Document:

Exhibit 10.2

 

CERTAIN PORTIONS
OF THIS EXHIBIT HAVE BEEN AFFORDED CONFIDENTIAL TREATMENT UNDER RULE 24b-2
OF THE SECURITIES EXCHANGE ACT OF 1934. 
THE OMITTED MATERIALS HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

 

SHAREHOLDERS AGREEMENT

 

THIS SHAREHOLDERS
AGREEMENT (the “Agreement”) is made and dated as
of this 1st day of February 2005 by and among the individuals
and entities listed as Existing Shareholders of the Company on Schedule A
hereto (each an “Existing Shareholder” and,
collectively, the “Existing Shareholders”),
TMP Worldwide Limited, a company organized under the laws of the United Kingdom
(the “Investor”, and collectively with the
Existing Shareholders, the “Shareholders”
and each a “Shareholder”) and China HR.com
Holdings Ltd., an exempted company limited by shares incorporated under the
laws of the Cayman Islands (the “Company”).  Monster Worldwide, Inc., a Delaware
corporation (“Monster”), which is the ultimate
parent company of the Investor, is also a party to certain specified provisions
of this Agreement as more fully set forth below.

 

BACKGROUND

 

WHEREAS, the Shareholders
are holders of all of the issued and outstanding ordinary shares of the
Company, U.S.$.05 par value per share (the “Ordinary Shares”);

 

WHEREAS, the Company, the
Investor and certain Shareholders are parties to an Ordinary Shares Purchase
Agreement (the “Purchase Agreement”), dated January 30,
2005,  pursuant to which the Investor is
contemporaneously herewith acquiring 22,815,357 Ordinary Shares from the
Company (the “Shares”);

 

WHEREAS, the Company and
certain of the Existing Shareholders are parties to the Share Subscription
Agreement, dated March 24, 2000 (the “2000 Subscription
Agreement”), which the parties thereto desire to terminate in connection
with entering into this Agreement and the Purchase Agreement;

 

WHEREAS, the Company and
certain of the Existing Shareholders are parties to the Subscription Agreement,
dated July 13, 2001 (the “2001 Subscription
Agreement”), which the parties thereto desire to terminate in
connection with entering into this Agreement and the Purchase Agreement;

 

WHEREAS, the Company and
certain of the Existing Shareholders are parties to the Shareholders’
Agreement, dated March 29, 2000 (the “Prior Agreement”),
as amended by the Supplemental Agreement, dated July 13, 2001 (the “Prior Agreement Supplement”), each of which the parties
thereto desire to terminate in connection with the entering into this Agreement
and the Purchase Agreement; and

 

WHEREAS, the parties’ obligations
under the Purchase Agreement are conditioned upon the execution and delivery of
this Agreement by the Existing Shareholders, the Investor and the

 

 

Company and the
termination of the 2000 Subscription Agreement, the 2001 Subscription Agreement,
the Prior Agreement and the Prior Agreement Supplement (collectively, the “Old Agreements”) by the parties thereto.

 

NOW, THEREFORE, in
consideration of the mutual promises and covenants set forth in this Agreement,
and intending to be legally bound, the parties agree as follows:

 

SECTION 1.                            DEFINITIONS.

 

1.1                               “Affiliate”
shall mean, with respect to any specified person, (i) any other person
that owns (directly or indirectly), individually or as part of a group (as
determined pursuant to Rule 13d-5 under the Securities Exchange Act of
1934, as amended (the “Exchange Act”)),
greater than fifty percent (50%) of the voting shares or other capital interest
of such specified person, (ii) any other person of whom greater than fifty
percent (50%) of the voting shares or other capital interest is owned by
(directly or indirectly), individually or as part of a group (as determined
pursuant to Rule 13d-5 under the Exchange Act, by such person, and (iii) any
other person controlling, controlled by or under common control with such
person.

 

1.2                               “Call
Fair Market Value” per Ordinary Share shall be equal to the amount
determined by [*].

 

1.3                               “Fully
Diluted Ordinary Shares” shall mean the Company’s outstanding Ordinary
Shares and Ordinary Shares issued or issuable upon conversion of any of the
Company’s outstanding preference shares, or upon exercise of outstanding
rights, options and warrants to acquire Ordinary Shares and any other Ordinary
Share equivalents.

 

1.4                               “Put
Fair Market Value” per Ordinary Share shall be equal to the amount
determined by [*].

 

1.5                               “Qualified
IPO” shall mean a firm commitment initial public offering by the Company of
its Ordinary Shares pursuant to a registration statement under the United
States Securities Act (i) with an aggregate offering price of at least
Fifty Million United States Dollars (U.S.$50,000,000) and (ii) at a per
share price equal to at least U.S.$3.00 (subject to adjustment for share
dividends, recapitalizations, splits and similar events).

 

1.6                               “Revenue”
shall mean the Company’s consolidated revenues, as stated in the Company’s
consolidated income statements, determined in accordance with GAAP (as defined
below) and audited by one of the “big four” international accounting firms
jointly selected by the Company and the Investor as the Company’s independent
auditors.

 

1.7                               “Securities
Act” shall mean the Securities Act of 1933, as amended.

 

* Confidential

 

2

 

SECTION 2.                            PROPOSED TRANSFERS BY THE SHAREHOLDERS.

 

2.1                               Prohibitions.

 

(a)                                  Prohibitions During Standstill Period.  Except as otherwise
provided herein, within three (3) years from the date of this Agreement
(the “Standstill Period”), no Shareholder
may purchase, sell or transfer his, her or its Ordinary Shares, or any options,
warrants, or other securities of any type whatsoever that are convertible into
Ordinary Shares.  Ordinary Shares and any
options, warrants or other securities of any type whatsoever that are
convertible into Ordinary Shares are sometimes collectively referred to as “Equity Securities”.

 

(b)                                 Other Prohibitions. 
Except for the Investor and its Affiliates, no Shareholder that is not a
natural person may permit the transfer of any equity securities or other
interests in such Shareholder at any time.

 

2.2                               Right of First Refusal.

 

(a)                                  Transfer Notice. 
Except in the case of the Specified Redemption (as defined below), if at
any time after the end of the Standstill Period, any Shareholder (the “Selling Shareholder”) proposes, directly or indirectly, to
transfer by sale, assignment or gift any Ordinary Shares or any other Equity
Securities to one or more third parties pursuant to an understanding with such
third parties (a “Transfer”), then the Selling
Shareholder shall give the Company and the other Shareholders (the “Non-Selling Shareholders”), written notice of the Selling
Shareholder’s intention to make the Transfer (the “Transfer
Notice”), which Transfer Notice shall include (i) a description
of the Equity Securities to be transferred (the “Offered
Shares”), (ii) the identity of the prospective transferee(s)
and (iii) the consideration and the material terms and conditions upon
which the proposed Transfer is to be made. 
The Transfer Notice shall certify that the Selling Shareholder has
received a firm offer from the prospective transferee(s) and in good faith
believes a binding agreement for the Transfer is obtainable on the terms set
forth in the Transfer Notice.  The
Transfer Notice shall also include a copy of any written proposal, term sheet
or letter of intent or other agreement relating to the proposed Transfer.

 

(b)                                 Non-Selling Shareholders’ Option.  Each of the Non-Selling Shareholders shall
have an option for a period of thirty (30) days from its receipt of the
Transfer Notice to elect to purchase up to its Right of First Refusal Pro Rata
Portion (as defined below) of the Offered Shares at the same price and subject
to the same material terms and conditions as described in the Transfer
Notice.  With respect to each Non-Selling
Shareholder, its “Right of First Refusal Pro Rata Portion” shall mean the
number of Offered Shares multiplied by a fraction, the numerator of which shall
equal the number of Equity Securities then held by the Non-Selling Shareholder,
and the denominator of which shall equal the total number of Equity Securities
held by all Non-Selling Shareholders, in each case on a fully diluted basis
assuming full conversion, exercise and exchange of all options, warrants and
other convertible securities.  Each Non-Selling
Shareholder may exercise its right of first refusal by notifying the Selling
Shareholder and the Company in writing before expiration of the thirty (30) day
period as to the number of Offered Shares which it wishes to purchase.  Within five (5) days after the
expiration of the foregoing period, the Selling Shareholder shall give the
Company and the Non-Selling

 

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Shareholders written notice of the amount of Offered
Shares proposed to be sold after giving effect to the exercise of rights under
this Section 2.2(b) (the “Second Notice”).

 

2.3                               Right of Co-Sale. At any time after the end of the
Standstill Period, to the extent the Non-Selling Shareholders do not exercise
their right of refusal as to all of the Offered Shares pursuant to Section 2.2
above, the Non-Selling Shareholders shall have the right to participate in the
proposed Transfer, to the extent of their respective Right of Co-Sale Pro Rata
Portion (as defined below), on the same terms and conditions as specified in
the Transfer Notice.  With respect to
each Non-Selling Shareholder, the Right of Co-Sale Pro Rata Portion shall mean
the number of Offered Shares proposed to be transferred to a prospective
transferee after giving effect to the exercise of rights under Section 2.2(b) above
multiplied by a fraction, the numerator of which shall equal the number of
Equity Securities then held by a Non-Selling Shareholder, and the denominator
of which shall equal the number of Equity Securities held by all Shareholders,
in each case on a fully diluted basis assuming full conversion, exercise and
exchange of all options, warrants and other convertible securities.  Each Non-Selling Shareholder shall exercise
its right of co-sale by delivering a written notice to the Selling Shareholder
and the Company prior to the expiration of thirty (30) days after receipt of
the Second Notice, indicating the number of shares of Equity Securities the
Non-Selling Shareholder wishes to sell under its right to participate. To the
extent that the Non-Selling Shareholders exercise such right of co-sale, the
number of shares of Equity Securities that the Selling Shareholder may sell in
the Transfer shall be correspondingly reduced.

 

2.4                               Non-Exercise of Rights. 
To the extent that the Non-Selling Shareholders have not exercised their
right to purchase the Offered Shares nor their right to participate in the sale
of the Offered Shares within the time periods specified in Section 2.2 and
Section 2.3, the Selling Shareholder shall have a period of thirty (30)
days from the expiration of the thirty (30)-day time period set forth in Section 2.3
in which to sell the Offered Shares to the third-party transferee(s) identified
in the Transfer Notice upon terms and conditions (including the purchase price)
no more favorable to the transferee(s) than those specified in the Transfer
Notice. In the event the Selling Shareholder does not consummate the sale or
disposition of the Offered Shares within the thirty (30) day period set forth
in this Section 2.4, the Non-Selling Shareholders’ first refusal rights
and co-sale rights shall continue to be applicable to any subsequent
disposition of the Offered Shares by the Selling Shareholder until such right
lapses in accordance with the terms of this Agreement. Furthermore, the
exercise or non-exercise of the rights of the Non-Selling Shareholders under
this Section 2.4 to purchase Equity Securities from the Selling
Shareholder or to participate in sales of Equity Securities by the Selling
Shareholder shall not adversely affect their rights to make subsequent
purchases from the Selling Shareholder of Equity Securities or subsequently
participate in sales of Equity Securities by the Selling Shareholder.

 

2.5                               Closing.  Each
Non-Selling Shareholder shall effect its participation in a sale pursuant to Section 2.3
hereof by promptly delivering to the Selling Shareholder for transfer to the
prospective purchaser one or more certificates, properly endorsed for transfer,
which represent that number of Equity Securities which the Non-Selling
Shareholder elects to sell.  The share
certificate or certificates that the Non-Selling Shareholders deliver to the
Selling Shareholder pursuant to Section 2.3 shall be transferred to the
prospective purchaser in consummation of the sale of the Offered Shares pursuant
to the terms and conditions specified in the Transfer Notice, and the Selling
Shareholder shall concurrently therewith remit to each Non-Selling

 

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Shareholder that portion
of the sale proceeds to which such Non-Selling Shareholder is entitled by
reason of its participation in such sale. 
To the extent that any prospective purchaser, or purchasers, prohibits
such assignment or otherwise refuses to purchase shares or other securities
from a Non-Selling Shareholder in connection with the exercise of its rights of
co-sale hereunder, the Selling Shareholder shall not sell to such prospective
purchaser or purchasers any Offered Shares unless and until, simultaneously
with such sale, the Selling Shareholder shall purchase such shares or other
securities from the Non-Selling Shareholder. 
To the extent that a Non-Selling Shareholder elects to purchase any of
the Offered Shares covered in the Transfer Notice directly from the Selling
Shareholder, then such Selling Shareholder shall within ninety (90) days of the
date of the Transfer Notice (or, if earlier, simultaneous with the consummation
of the sale of the Offered Shares pursuant to the terms and conditions
specified in the Transfer Notice) deliver certificate(s) for such shares to the
Non-Selling Shareholder who shall deliver to the Selling Shareholder the
consideration of the type and on the terms set forth in the Transfer Notice.

 

SECTION 3.                            EXEMPT TRANSFERS; PROHIBITIONS.

 

3.1                               Certain Transfers. 
The provisions of Section 2 shall not apply to:  (a) any transfer of Equity Securities to
the ancestors, descendants, siblings or spouse of a Shareholder, or to trusts,
family limited partnerships or similar estate planning entities for the benefit
of such persons including such Shareholder; (b) any transfer of Equity
Securities to a subsidiary, affiliate, parent, partner, limited partner,
retired partner, member, retired member or shareholder of a holder of Equity
Securities, and (c) any bona fide gift, provided
that, in any such case described in (a) through (c) above the
Shareholder gives the Board of Directors of the Company prior written notice of
such transfer or gift and the transferee or donee shall first furnish the
Company with a written agreement, in form and substance reasonably acceptable
to the Board of Directors, to be bound by and comply with all provisions of
this Agreement as well as the terms of any other restrictive agreement to which
such Equity Securities are subject.  Such
transferred Equity Securities shall remain “Equity
Securities” hereunder, and such pledgee, transferee or donee shall
be treated as a “Shareholder” for purposes of this
Agreement.

 

3.2                               Public Offering; Company Transfers.  Notwithstanding the foregoing, the provisions
of Section 2 shall not apply to the sale of any Equity Securities (a) to
the public in a Qualified IPO; or (b) to the Company, including but not
limited to the sale to the Company of 15,970,750 Ordinary Shares from
Shareholders at an aggregate purchase price of Thirty Five Million United
States Dollars (U.S.$35,000,000) and a purchase price per share equal to the
purchase price per share payable by the Investor under the Purchase Agreement
(the “Specified Redemption”).

 

3.3                               Prohibited Transfers. 
No Existing Shareholder shall either directly or indirectly, sell,
assign, mortgage, transfer, pledge, create a security interest in or lien upon,
encumber, give, place in trust, hypothecate, or otherwise in any manner
voluntarily or involuntarily dispose of, any or all of its Ordinary Shares or
any other Equity Securities except and only to the extent expressly permitted
by the provisions of Section 2, Sections 3.1 and 3.2, Section 4 and Section 5.

 

5

 

SECTION 4.                            PROHIBITED TRANSFERS; EFFECT OF BREACH.

 

4.1                               Put Option Right. 
In the event a Shareholder (the “Breaching Shareholder”)
should sell or attempt to sell any Equity Securities in contravention of the
provisions of Section 2 of this Agreement (a “Prohibited
Transfer”), the other Shareholders (the “Non-Breaching
Shareholders”), in addition to such other remedies as may be
available at law, in equity or hereunder, shall have the put option provided in
Section 4.2 below, and the Breaching Shareholder who breached or attempted
to breach such provisions shall be bound by the applicable provisions of such
option.

 

4.2                               Put Option.  In
the event of a Prohibited Transfer, the Non-Breaching Shareholders shall have
the right to sell to the Breaching Shareholder the number of Equity Securities
equal to the number of Equity Securities the Non-Breaching Shareholders would
have been entitled to transfer to the transferee in the Prohibited Transfer had
the Prohibited Transfer under Section 2 hereof been effected pursuant to
and in compliance with the terms hereof. 
Such sale shall be made on the following terms and conditions:

 

(a)                                  the
price per share at which the Equity Securities are to be sold shall be equal to
the greater of (i)  the price per share paid by the transferee in the
Prohibited Transfer and (ii) the Call Fair Market Value.  The Breaching Shareholder shall also
reimburse the Non-Breaching Shareholders for any and all fees and expenses,
including legal fees and expenses, incurred pursuant to the exercise or the
attempted exercise of the Non-Breaching Shareholders’ rights under Section 2;

 

(b)                                 within
ninety (90) days after the later of the dates on which the Non-Breaching
Shareholders (i) received notice of the Prohibited Transfer or (ii) otherwise
became aware of the Prohibited Transfer, the Non-Breaching Shareholders shall,
if exercising the option created hereby, deliver to the Breaching Shareholder
the certificate or certificates representing Equity Securities to be sold, each
certificate to be properly endorsed for transfer;

 

(c)                                  the
Breaching Shareholder shall, upon receipt of the certificate or certificates
for the Equity Securities to be sold by the Non-Breaching Shareholders,
pursuant to this Section 4.2, pay the aggregate purchase price therefor
and the amount of reimbursable fees and expenses, as specified in Section 4.2(a),
in cash or by other means acceptable to the Non-Breaching Shareholders; and

 

(d)                                 notwithstanding
the foregoing, any attempt by a Breaching Shareholder to transfer Equity
Securities in violation of Sections 2 or 3 hereof shall be void, and the
Company agrees that it will not effect such a transfer nor will it treat any
alleged transferee as the holder of such Equity Securities without the written
consent of the Non-Breaching Shareholders. 
The exercise of any Non-Breaching Shareholder’s rights under the
provisions of this Section 4.2 shall not be deemed to be consent to or
ratification of a violation of  Section 2
hereof.

 

SECTION 5.                            PUT AND CALL OPTION.

 

5.1                               Put Option.  In
the event that the Company has not consummated a Qualified IPO prior to the
third anniversary of the date of this Agreement, the Investor hereby grants to
the Existing Shareholders the right and option (the “Put Option”),
exercisable at any time during the

 

6

 

eighteen (18) month
period immediately following the third anniversary of the date of this
Agreement (the “Exercise Period”), to cause the
Investor to purchase all, but not less than all, of each and every Existing
Shareholder’s Ordinary Shares (the “Put Option Shares”)
for the Put Fair Market Value.

 

5.2                               Exercise of Put Option. 
The Put Option must be exercised by each and every Existing Shareholder,
if at all, during the Exercise Period only by the delivery during the Exercise
Period of a written notice, signed by all of the Existing Shareholders, to the
Company and the Investor (the “Put Option Notice”)
specifying the (i) exercise of the Put Option, (ii) the Put Fair
Market Value and (iii) the proposed delivery date of the Put Option Shares
which shall be at least twenty (20) days from the date of the Put Option Notice
(the “Put Option Closing Date”).  In the event the Put Option is not exercised
during the Exercise Period in accordance with the terms hereof, the Put Option
shall automatically expire and be of no force or effect.

 

5.3                               Put Option Closing. 
Upon the Existing Shareholders’ election to exercise the Put Option, on
the Put Option Closing Date each Existing Shareholder shall deliver (a) the
share certificate or certificates and a duly executed stock power in favor of
the Investor or its designee representing the Put Option Shares to the Investor
and (b) a duly executed ordinary shares purchase agreement in
substantially the form of the Purchase Agreement (the “Put Purchase
Agreement”), containing, among other things, (i) representations and
warranties of the Company and the Investor which shall speak on and as of the
date of signing and closing of such transaction and shall in other respects be
identical to the representations and warranties provided in Section 2 of
the Purchase Agreement and representations and warranties providing that upon
delivery of the Put Option Shares the Investor shall acquire good, valid and
marketable title to the Put Option Shares free and clear of any liens, claims
or encumbrances imposed by any action or omission of the Existing Shareholders
or the Company, provided, however, that (x) the Schedule of Exceptions thereto shall
be updated to reflect the then-current situation of the Company and its
subsidiaries, and (y) the financial information shall reflect the two most
recent fiscal years plus the most recent practicable interim period, (ii) agreements
and indemnities of the Company, the Existing Shareholders and the Investor
identical to those provided in Sections 6 and 7 of the Purchase Agreement and (iii) covenants
prohibiting the Existing Shareholders and their Affiliates from directly or
indirectly (x) competing in or into the Peoples Republic of China and any other
countries in which or into which the Company or its subsidiaries conducts
business or (y) soliciting, servicing or hiring any then-current or former
clients or employees of the Company or its subsidiaries, in each case for a
period of twenty-four (24) months from the date of the closing of the Put
Purchase Agreement and (iv) confidentiality agreements of the Existing
Shareholders.  It is understood and
agreed that the Investor may by written notice to the Company refuse to
consummate the Put Option in the event that (a) the information reflected
in the Schedule of Exceptions to the proposed Put Purchase Agreement as
compared to the Schedule of Exceptions attached to the Purchase Agreement
materially adversely affects the value of the Company and its subsidiaries or
the value to the Investor of the proposed investment, (b) there exists any
suit, action, proceeding, legislation, ruling, order or injunction (or
reasonable threat thereof) or set of facts restraining or prohibiting the
consummation of the transactions or which would compel the Investor to dispose
of, discontinue or materially restrict the operations of a significant portion
of the business of the Company and its subsidiaries, including but not limited
to any governmental or regulatory authority prohibition or limitation
materially affecting the Investor’s right to own shares of the Company or any
of its direct or

 

7

 

indirect subsidiaries,
including without limitation China-HR.com Corporation, China HR.com (Hong Kong)
Limited, Ecareer (Shanghai) Limited or Ecareer (Beijing Limited), (c) there
has been a material adverse change in the assets, condition (financial or
otherwise), operating results, business activities or operations of the Company
and its subsidiaries, or (d) the Company or any Existing Shareholder have
breached one or more provisions of this Agreement and such breaches,
individually or in the aggregate, materially adversely affect the value of the
Company and its subsidiaries or the value to the Investor of the proposed investment.  The exercise of the Investor’s rights under
the immediately preceding sentence is sometimes called a “Put Refusal”.  Any disputes over whether or not the Put
Refusal grounds set forth above have been met shall be submitted to binding
arbitration in accordance with Section 5.15 below.  If the Investor refuses to or fails to
purchase the Put Option Shares for any reason other than a Put Refusal (a “Put Breach”), including, without limitation, the lack of
funds to pay the Put Fair Market Value, then the Existing Shareholders shall
have the right and option to purchase at [*] (the “Repurchase Right”). If the Existing Shareholders exercise
the Repurchase Right, then the Repurchase Right shall be their sole and
exclusive remedy arising out of or in connection with a Put Breach.  On the Put Option Closing Date, the Investor
shall concurrently therewith remit to each Shareholder the Put Fair Market
Value to which such Existing Shareholder is entitled by reason of its exercise
of the Put Option.  In the event the
Company is unable to deliver the Put Purchase Agreement in a form satisfactory
to the Investor or the Investor has exercised its right of Put Refusal, then
the Investor shall have no further obligation to purchase the Put Option Shares
and the option contemplated by this Section 5.3 shall automatically expire
and be of no further force or effect. 
Notwithstanding the foregoing, the Put Option Closing shall not occur
until the Put Fair Market Value is conclusively determined.

 

5.4                               Company Call Option. 
In the event that the Investor exercises its right of Put Refusal, the
Investor hereby grants to the Company, the right and option (the “Company Call Option”), exercisable at any time after the
date the Investor exercises its right of Put Refusal and for a period of thirty
(30) days thereafter (the “Company Exercise Period”),
to elect to purchase from the Investor, all, but not less than all, of the
Ordinary Shares held by the Investor (the “Company Option Shares”)
for the Call Fair Market Value.

 

5.5                               Exercise of Company Call Option.  The Company Call Option may be exercised by
the Company, if at all, during the Company Exercise Period only by the delivery
during the Company Exercise Period of a written notice to the Investor (the “Company Option Notice”) specifying the (i) exercise of
the Company Call Option, (ii) the Call Fair Market Value and (iii) the
proposed delivery date of the Company Option Shares which shall be at least
twenty (20) days from the date of the Company Option Notice (the “Company Option Closing Date”).  In the event the Company Call Option is not
properly exercised during the Company Exercise Period in accordance with the
terms hereof, the Company Call Option shall automatically expire and be of no
force or effect and the Existing Shareholders shall be entitled to the Existing
Shareholders Call Option (as hereinafter defined).

 

5.6                               Company Call Option Closing.  Upon the Company’s election to exercise the
Company Call Option, on the Company Option Closing Date the Investor shall
deliver a share certificate or certificates and a duly executed stock power in
favor of the Company representing

 

*Confidential

 

8

 

its Company Option Shares
to the Company and the Company shall concurrently therewith remit to the
Investor the Call Fair Market Value to which the Investor is entitled by reason
of the Company’s exercise of the Company Call Option.  Upon delivery of the Company Option Shares to
the Company, the Company shall acquire good, valid and marketable title to the
Company Option Shares free and clear of any liens, claims or encumbrances
imposed by any action or omission of the Investor.

 

5.7                               Existing Shareholder Call Option.  In the event that the Investor exercises its
right of Put Refusal and the Company does not properly exercise the Company
Call Option within the Company Exercise Period, the Investor hereby grants to
each Existing Shareholder, the right and option (the “Existing
Shareholder Call Option”), exercisable at any time after the expiration
of the Company Exercise Period and before the date which is one hundred twenty
(120) days after the date the Investor exercises its right of Put Refusal (the “Existing Shareholder Exercise Period”), to elect to purchase
from the Investor on a pro-rata basis, all, but not less than all, of the
Ordinary Shares held by the Investor (the “Existing Shareholder
Option Shares”) for the Call Fair Market Value.

 

5.8                               Exercise of Existing Shareholder Call Option.  The Existing Shareholder Call Option may be
exercised by each and every Existing Shareholder, if at all, during the
Existing Shareholder Exercise Period only by the delivery during the Existing
Shareholder Exercise Period of a written notice to the Investor (the “Existing  Shareholder Option Notice”)
specifying the (i) exercise of the Existing Shareholder Call Option, (ii) the
Call Fair Market Value and (iii) the proposed delivery date of the
Existing Shareholder Option Shares which shall be at least twenty (20) days
after the date of the Existing Shareholder Option Notice  (the “Existing Shareholder
Option Closing Date”).  In the
event the Existing Shareholder Call Option is not properly exercised during the
Existing Shareholder Exercise Period in accordance with the terms hereof, the
Existing Shareholder Call Option shall automatically expire and be of no force
or effect.

 

5.9                               Existing Shareholder Call Option Closing.  Upon the Existing Shareholders’ election to
exercise the Existing Shareholder Call Option, on the Existing Shareholder
Option Closing Date the Investor shall deliver a share certificate or
certificates and a duly executed stock power in favor of each of the Existing
Shareholders representing their pro-rata portion Existing Shareholder Option
Shares to the Existing Shareholders and each Existing Shareholder shall
concurrently therewith remit to the Investor its pro-rata portion of the Call
Fair Market Value to which the Investor is entitled by reason of the
Shareholders’ exercise of the Shareholder Call Option.  Upon delivery of the Existing Shareholder
Option Shares to the Company, the Existing Shareholders shall acquire good,
valid and marketable title to the Existing Shareholder Option Shares free and
clear of any liens, claims or encumbrances imposed by any action or omission of
the Investor.

 

5.10                        Call Option.  The
Existing Shareholders hereby grant to the Investor the right and option (the “Call Option”), exercisable at any time during the Exercise
Period, to elect to purchase from the Existing Shareholders all, but not less than all, of the Company’s issued and
outstanding Ordinary Shares owned by the Existing Shareholders (the “Call Option Shares”) at the Call Fair Market Value.

 

9

 

5.11                        Exercise of Call Option. 
The Call Option must be exercised by the Investor, if at all, during the
Exercise Period only by the delivery during the Exercise Period of a written
notice to the Company (the “Call Option Notice”)
specifying the (i) exercise of the Call Option, (ii) the Call Fair
Market Value and (iii) the proposed delivery date of the Call Option
Shares which shall be at least twenty (20) days from the date of the Call
Option Notice (the “Call Option Closing Date”).  In the event the Call Option is not properly
exercised during the Exercise Period in accordance with the terms hereof, the
Call Option shall automatically expire and be of no force or effect.

 

5.12                        Call Option Closing. 
Upon the Investor’s election to exercise the Call Option, on the Call
Option Closing Date each Existing Shareholder shall deliver (a) share
certificate or certificates and duly executed stock powers in favor of the
Investor or its designee representing the Call Option Shares to the Investor
and (b) a duly executed ordinary shares purchase agreement in
substantially the form of the Purchase Agreement (the “Call Purchase Agreement”), containing,
among other things, (i) representations and warranties of the Company and
the Investor which shall speak on and as of the date of signing and closing of
such transaction and shall in other respects be identical to the
representations and warranties provided in Section 2 of the Purchase
Agreement and representations and warranties providing that upon delivery of
the Call Option Shares the Investor shall acquire good, valid and marketable
title to the Call Option Shares free and clear of any liens, claims or
encumbrances imposed by any action or omission of the Existing Shareholders or
the Company, provided, however, that (x) the Schedule of Exceptions thereto shall
be updated to reflect the then-current situation of the Company and its
subsidiaries, and (y) the financial information shall reflect the two most
recent fiscal years plus the most recent practicable interim period, (ii) agreements
and indemnities of the Company, the Existing Shareholders and the Investor
identical to those provided in Sections 6 and 7 of the Purchase Agreement, and (iii) covenants
prohibiting the Existing Shareholders and their Affiliates from directly or
indirectly (x) competing in or into the Peoples Republic of China and any other
countries in which or into which the Company or its subsidiaries conducts
business or (y) soliciting, servicing or hiring any then-current or former
clients or employees of the Company or its subsidiaries, in each case for a
period of twenty-four (24) months from the date of the closing of the Call
Purchase Agreement and (iv) confidentiality agreements of the Existing
Shareholders.  It is understood and
agreed that the Investor may by written notice to the Company refuse to
consummate the Call Option in the event that (a) the information reflected
in the Schedule of Exceptions to the proposed Call Purchase Agreement as
compared to the Schedule of Exceptions attached to the Purchase Agreement
materially adversely affects the value of the Company and its subsidiaries or
the value to the Investor of the proposed investment, (b) there exists any
suit, action, proceeding, legislation, ruling, order or injunction (or
reasonable threat thereof) or set of facts restraining or prohibiting the consummation
of the transactions or which would compel the Investor to dispose of,
discontinue or materially restrict the operations of a significant portion of
the business of the Company and its subsidiaries, including but not limited to
any governmental or regulatory authority prohibition or limitation materially
affecting the Investor’s right to own shares of the Company or any of its
direct or indirect subsidiaries, including without limitation China-HR.com
Corporation, China HR.com (Hong Kong) Limited, Ecareer (Shanghai) Limited or
Ecareer (Beijing Limited), (c) there has been a material adverse change in
the assets, condition (financial or otherwise), operating results, business
activities or operations of the Company and its subsidiaries or (d) the Company
or any Existing Shareholder have breached one or more provisions of this
Agreement and such

 

10

 

breaches, individually or
in the aggregate, materially adversely affect the value of the Company and its
subsidiaries or the value to the Investor of the proposed investment.  The exercise of the Investor’s rights under
the immediately preceding sentence is sometimes called a “Call Refusal”.  Any disputes over whether or not the Call
Refusal grounds set forth above have been met shall be submitted to binding
arbitration in accordance with Section 5.15 below.  On the Call Option Closing Date, the Investor
shall concurrently therewith remit to the Existing Shareholders the Call Fair
Market Value to which the Existing Shareholders are entitled by reason of the
Investor’s exercise of the Call Option.  In the event the Company is unable
to deliver the Call Purchase Agreement in a form reasonably satisfactory to the
Investor or the Investor has exercised its right of Call Refusal, then the
Investor shall have no further obligation to purchase the Call Option
Shares.   Notwithstanding the foregoing,
the Call Option Closing shall not occur until the Call Fair Market Value is
conclusively determined.

 

5.13                        Payment of Put Fair Market Value/Call Fair Market Value.  The Put Fair Market Value or Call Fair Market
Value, as the case may be, payable to the Existing Shareholders by the Investor
under any provision of this Section 5 may, at the election of the
Investor, be paid in a combination of cash and unregistered shares of the
common stock of the Investor’s parent company, Monster (“Monster
Shares”), provided that Monster Shares shall constitute no more than
one-half (1/2) of the Put Fair Market Value or Call Fair Market Value, as the
case may be.  In the event the Investor
elects to deliver Monster Shares, such Monster Shares shall be valued at the
average of the closing prices per Monster Share as reported by the Nasdaq
National Market for each day in the ten (10) business day period ending
three (3) days before the applicable closing date and any Existing
Shareholder receiving Monster Shares shall become party to a registration
rights agreement which shall provide, among other things, for the filing of a
registration statement registering any Monster Shares issued hereby within ten (10) business
days from the Put Option Closing Date or Call Option Closing Date, as the case
may be, and customary indemnification. 
Notwithstanding anything to the contrary contained herein, if the
Investor, on the one hand, or the Existing Shareholders, on the other hand, in
their respective reasonable discretion, object to the computation of the Call
Fair Market Value or the Put Fair Market Value, as the case may be, the
Investor and the Existing Shareholders shall jointly retain a firm of
recognized financial experts who shall be instructed to conclusively establish
Call Fair Market Value or Put Fair Market Value, as the case may be.  The costs of such financial expert shall be
paid by the Company and the determination of the Call Fair Market Value or the
Put Fair Market Value by such financial expert shall be conclusive.

 

5.14                        Conflicting Option
Exercises.  In the event
that both the Put Option Notice and the Call Option Notice are provided in accordance
with this Agreement and the transactions contemplated by the earlier of such
notices have not yet been consummated in accordance herewith, the Put Option
Notice shall prevail (irrespective of the order in which the competing notices
have been given).

 

5.15                        Binding Arbitration.  If
any dispute arises over whether or not the Put Refusal or Call Refusal grounds
have been met or the Existing Shareholders seek any remedy for a Put Breach
other than the Repurchase Right, injunctive relief or specific performance, the
Existing Shareholders shall provide written notice of their objection or intent
to pursue remedies for a Put Breach other than the Repurchase Right to the
Investor no later than thirty (30) days after the Investor’s exercise of the
Put Refusal, the Call Refusal or the occurrence of a Put Breach, as the

 

11

 

case may be.  Promptly thereafter, such dispute shall be
submitted to binding arbitration at Hong Kong International Arbitration Centre
in accordance with the commercial UNCITRAL Arbitration Rules then in
effect (the “UNCITRAL Rules”).  The arbitration tribunal shall consist of
three (3) arbitrators experienced in New York corporate law and matters of
this nature who shall be appointed according the UNCITRAL Rules.  The language of the arbitration shall be
English.

 

SECTION 6.                            LEGEND.

 

6.1                               Legend.  Each
certificate representing Equity Securities now or hereafter owned by any
Shareholder, or issued to any person in connection with a transfer from a
Shareholder pursuant hereto shall be endorsed with the following legend:

 

“THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND
CONDITIONS OF A CERTAIN SHAREHOLDERS AGREEMENT BY AND AMONG THE COMPANY AND
CERTAIN SHAREHOLDERS OF THE COMPANY CONTAINING, AMONG OTHER THINGS CERTAIN
AGREEMENTS TO VOTE SUCH SECURITIES AS SPECIFIED IN SUCH AGREEMENT.  COPIES OF SUCH AGREEMENT MAY BE OBTAINED
UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY.”

 

6.2                               Stop Orders.  Each
Shareholder agrees that the Company may instruct its transfer agent to impose
transfer restrictions on the shares represented by certificates bearing the
legend referred to in Section 6.1 above to enforce the provisions of this Agreement
and the Company agrees to do so promptly. 
The legend shall be removed upon termination of this Agreement.

 

SECTION 7.                            AFFIRMATIVE COVENANTS OF THE COMPANY.

 

The Company hereby
covenants and agrees as follows:

 

7.1                               Financial Information. 
The Company shall furnish the following reports to the Investor:

 

(a)                                  as
soon as practicable after the end of each fiscal year of the Company, and in
any event within sixty (60) days thereafter, management accounts for the
preceding fiscal year prepared by the Company in accordance with International
Standards on Accounting (“ISA”)
consistently applied and setting forth in each case in comparative form the
figures for the previous fiscal year;

 

(b)                                 as
soon as practicable after the end of each fiscal year of the Company, and in
any event within ninety (90) days thereafter, a consolidated balance sheet of
the Company and its subsidiaries, if any, as of the end of such fiscal year and
the related consolidated income statement, consolidated statement in changes in
equity and consolidated cash flow statement for the fiscal year then ended,
prepared in accordance with ISA consistently applied and setting forth in each
case in comparative form the figures for the previous fiscal year, and audited
and

 

12

 

certified by a firm of independent public accountants
of recognized international standing selected by the Board of Directors of the
Company;

 

(c)                                  as
soon as practicable after the end of each of the first three fiscal quarters of
each fiscal year of the Company, and in any event within forty-five (45) days
after the end of each of the first three fiscal quarters, a consolidated
balance sheet of the Company and its subsidiaries, if any as of the end of such
quarter, and the related consolidated income statement, consolidated statement
in changes in equity and consolidated cash flow statement of the
Company and its subsidiaries, if any, for the current fiscal year to date,
unaudited but prepared in accordance with ISA consistently applied and setting
forth in comparative form the figures for the corresponding periods of the
previous fiscal year, together with a comparison of such statements to the
Budget (as herein defined), subject to changes resulting from immaterial normal
year-end audit adjustments, all in reasonable detail and certified by the
principal financial officer of the Company; and

 

(d)                                 as
soon as practicable after the end of each month of each fiscal year of the
Company, and in any event within twenty (20) days after the end of each month,
a consolidated balance sheet of the Company and its subsidiaries, if any, as of
the end of such month, and the related consolidated income statement,
consolidated statement in changes in equity and consolidated cash flow
statement of the Company and its subsidiaries, if any, as of the end of such
month, unaudited but prepared in accordance with ISA consistently applied and
setting forth in comparative form the figures for the corresponding periods of
the previous fiscal year for the material business units, together with a
comparison of such statements to the Budget, subject to changes resulting from
immaterial normal year-end audit adjustments, all in reasonable detail and
certified by the principal financial officer of the Company.

 

Notwithstanding
anything to the contrary set forth above, each report delivered pursuant to
this Section 7.1 shall specifically (i) reconcile net income as
reported on the consolidated income statement according to ISA with net income
according to generally accepted accounting principles in the United States (“GAAP”) and such reconciliation shall be provided to the
Investor in a tabular format with each material reconciling item described and
quantified in reasonable detail, and (ii) indicate the amount of each
material variation between the amount of any line item appearing in the
consolidated balance sheet prepared in according to ISA and the amount of any
line item appearing on the consolidated balance sheet prepared according to
GAAP.

 

7.2                               Additional Information and Rights.

 

(a)                                  Upon
notification by the Investor, the Company shall permit the Investor to visit
and inspect any of the properties of the Company and its subsidiaries,
including its books of account and other records, including without limitation,
contracts, agreements and any other obligations enforceable against the Company
or its subsidiaries (and make copies thereof and take extracts therefrom), and
to discuss its affairs, finances and accounts with the officers of the Company
and its subsidiaries and its independent public accountants, all at such
reasonable times and as often as the Investor may reasonably request.

 

13

 

(b)                                 The
Company shall deliver to the Investor annually (and in any event no later than
thirty (30) days before the end of each fiscal year) a budget and business plan
of the Company and its subsidiaries for the next fiscal year and the next five
fiscal years (the “Budget”), in
such manner and form as approved by the Board of Directors of the Company,
including the Investor Directors (as hereinafter defined), which shall include
at least a projection of income and a projected cash flow statement for each
fiscal quarter in such fiscal year.  The
Company will use its best efforts to operate within the Budget, as approved by
the Board of Directors of the Company, applicable to each respective fiscal
year.  It is understood that no Budget
nor deviation therefrom shall be operative unless it is affirmatively approved
by at least one of the Investor Directors.

 

(c)                                  The
provisions of Section 7.1 and this Section 7.2 shall not be in
limitation of any rights which the Investor may have with respect to the books
and records of the Company and its subsidiaries, or to inspect their properties
or discuss their affairs, finances and accounts, under applicable law.

 

(d)                                 The
Investor hereby agrees to use all proprietary and confidential information
obtained from the Company under this Section 7 solely in connection with
its investment in the Company, to hold in confidence and trust and not to
misuse or disclose any confidential information provided pursuant to this Section 7.

 

7.3                               Meetings of Directors. 
The Company shall hold meetings of the Company’s Board of Directors not
less than four (4) times a year on a quarterly basis, which may be held in
person or by conference telephone by means of which all persons participating
in the meeting can hear each other.

 

7.4                               Expenses of Directors. 
The Company shall promptly reimburse in full, each director of the
Company who is not an employee of the Company attending a meeting of the Board
of Directors or any committee for all of his or her reasonable out-of-pocket
expenses incurred in attending each meeting of the Board of Directors of the
Company or any committee thereof.

 

7.5                               Prompt Payment of Taxes, etc.  The
Company will promptly pay and discharge, or cause to be paid and discharged,
when due and payable, all lawful taxes, assessments and governmental charges or
levies imposed upon the income, profits, property or business of the Company or
any subsidiary; provided, however, that any such
tax, assessment, charge or levy need not be paid if the validity thereof shall
currently be contested in good faith by appropriate proceedings and if the
Company shall have set aside on its books adequate reserves with respect
thereto, and provided, further, that the Company will pay all such taxes,
assessments, charges or levies forthwith upon the commencement of proceedings
to foreclose any lien which may have attached as security therefor.

 

7.6                               Tax Matters.  Upon
the Investor’s request, the Company shall provide the Investor with such
information as it shall reasonably request in connection with each of the
Investor’s and/or its Affiliates’ preparation of their respective tax returns
or to make any tax election that may be available to the Investor and/or its
Affiliates.  Neither the Company nor any

 

14

 

of its subsidiaries shall
make or agree to make any election for any United States tax purpose without
the prior written consent of the Investor.

 

7.7                               Insurance.                                      The
Company will keep its assets and those of its subsidiaries which are of an
insurable character insured by financially sound and reputable insurers against
loss or damage by fire, explosion or other risks customarily insured against by
companies in the Company’s line of business, in amounts sufficient to prevent
the Company or any subsidiary from becoming a co-insurer and not in any event
less than 100% of the insurable value of the property insured; and the Company
will maintain and cause its subsidiaries to maintain, with financially sound
and reputable insurers, insurance against other hazards and risks and liability
to persons and property to the extent and in the manner customary for companies
in similar businesses similarly situated and to the extent available on
commercially reasonable terms.  In
addition to the foregoing, the Company shall obtain and maintain in full force
and effect, from financially sound and reputable insurers, directors and
officers insurance in a minimum amount deemed reasonable by the Board of
Directors for the benefit of each of its directors and officers.

 

7.8                               Compliance with Certain Requirements.  The Company and all its subsidiaries shall
duly observe and conform to all requirements of governmental authorities
relating to the conduct of their businesses or their properties or assets.  The Company will use its best efforts to
ensure that the representations and warranties set forth in Sections 2.11,
2.12, 2.19, 2.23, 2.25, 2.28 and 2.30 of the Purchase Agreement remain true,
correct and complete from and after the date hereof on each and every day
during the term of this Agreement as if made on and as of each day during the
term hereof.  The Company shall use, and
cause its subsidiaries to use, commercially reasonable efforts to comply with
the best industry practices in the respective jurisdictions where it or they do
business.

 

7.9                               Maintenance of Corporate Existence, etc.  The Company and its subsidiaries shall
maintain in full force and effect their corporate existence, permits, rights
and franchises  necessary to conduct
their business and all licenses and other rights to use patents, processes, licenses,
trademarks, trade names or copyrights owned or possessed by it or any
subsidiary necessary to conduct their business.

 

7.10                        Regulatory Compliance. 
The Company will use commercially reasonable efforts, and will cause its
subsidiaries, including without limitation, China-HR.com Corporation, China
HR.com (Hong Kong) Limited, Ecareer (Beijing) Limited, Ecareer (Shanghai)
Limited, and Beijing YiJiaXin (E-Channel) Enterprise Management and Consultant
Co. Ltd. (“E-Channel”) to use commercially reasonable
efforts, to obtain or maintain all such licenses, permits, certificates and
approvals necessary for ownership and operation of their business in China as
soon as practicable after the date of this Agreement and the Company hereby
agrees that the Investor shall have the right to approve any arrangements
relating to the relationship of the Company and/or any of its subsidiaries or
affiliates with E-Channel, including without limitation, the right to approve
any new shareholder or shareholders of E-Channel.

 

SECTION 8.                            NEGATIVE COVENANTS OF THE COMPANY.

 

Without
the prior written approval of a majority of the members of the Board of
Directors and at least one Investor Director, the Company will not take or
permit to occur, and the

 

15

 

Shareholders will ensure
that the Company does not take or permit to occur, any of the actions set forth
in this Section 8.

 

8.1                               Management.

 

(a)                                  Recruit,
hire or dismiss the Company’s chief executive officer or any employee or
officer who shall be assigned duties or responsibilities substantially similar
to those of such officer; or

 

(b)                                 Recruit,
hire or dismiss any of the Company’s chief financial officer or chief
technology officer, or any employee or officer who shall be assigned duties or
responsibilities substantially similar to those of such officers.

 

8.2                               Affiliate Transactions. 
Enter into, or permit any subsidiary to enter into, any transaction with
any of its Affiliates, except for normal employment arrangements and benefit
programs on reasonable terms and except as approved by a majority of the
members of the Board who do not have an interest in any such transaction; provided, however, nothing in this Section 8.2 shall be
deemed to prohibit transactions between the Company and its subsidiaries or
between such subsidiaries.

 

8.3                               Capital Expenditures. 
Make, or permit any subsidiary to make in any fiscal year, capital
expenditures or financial commitments (including, without limitation, payments
with respect to capital leases as determined in accordance with GAAP) exceeding,
in the aggregate and, on a consolidated basis, U.S.$75,000, except as set forth
in the Budget.

 

8.4                               Employee Benefit Plan. 
Create or change any management or employee incentive plan, or any share
plan, option plan, or other agreement or understanding or right to purchase
capital shares of the Company, including but not limited to employee options.

 

8.5                               Security Interests. 
Become subject to any mortgage, pledge, lien, encumbrance, charge,
restriction (including without limitation restrictions on transfer) or any
other security interest on any of the Company’s or its subsidiaries
intellectual property.

 

8.6                               Indebtedness. 
Incur indebtedness in excess of U.S.$1,000,000 in the aggregate.

 

8.7                               Joint Venture. 
Enter into a strategic acquisition, strategic alliance, joint venture or
any other relationship in a transaction or transactions with a third party.

 

8.8                               Dividends; Redemption. 
Pay or declare any dividend or make any distribution on, redeem,
purchase or otherwise acquire any Ordinary Shares, except for the Specified
Redemption.

 

8.9                               Issuance of Securities.  Issue
or enter into a contract to issue any Equity Securities.

 

16

 

SECTION 9.                            ANTI-DILUTION PROTECTION.

 

The Investor shall
have the right and option to purchase up to its pro rata share of New
Securities (as defined below) which the Company may, from time to time, propose
to sell and issue to any third party, on the same terms and at the same price
that the Company proposes to sell and issue to such third party.  The Investor’s pro rata share, for purposes
of this right, is the ratio of the number of Fully Diluted Ordinary Shares
owned by the Investor immediately prior to the issuance of New Securities to
the total number of Fully Diluted Ordinary Shares outstanding immediately prior
to the issuance of New Securities.  For
the purposes of clarity, it is the parties intent that from and after the
closing of the transactions contemplated by the Purchase Agreement and the
concurrent closing of the Specified Redemption, and except as contemplated by Section 5
and Section 10.2 hereof, the Investor shall at all times during the term
of this Agreement own 40% of the Company’s Fully Diluted Ordinary Shares. The
reference to 40% in the immediately preceding sentence shall from time to time
automatically be deemed increased or decreased, as the case may be, as a result
of increases or decreases in the Investor’s percentage ownership resulting
directly from the Investor’s exercise of its rights under Sections 2 or 4.2
above. This right shall be subject to the following provisions:

 

(a)                                  “New Securities” shall mean any share capital (including
Ordinary Shares) of the Company whether now authorized or not, and rights,
options or warrants to purchase such share capital, and securities of any type
whatsoever that are, or may become, convertible into share capital; provided that the term “New
Securities” does not include: (i) securities
purchased or issued under the Purchase Agreement; (ii) securities
issued in a Qualified IPO; (iii) securities
issued in connection with any share split or share dividend of the Company as a
result of which the of ratio of the number of Fully Diluted Ordinary Shares
owned by the Investor to the total number of Fully Diluted Ordinary Shares
outstanding remains unchanged; and (iv) securities issued pursuant to the
conversion or exercise of convertible or exercisable securities or options
issued or granted as of the date hereof under the Company’s 2005 Stock
Incentive Plan.

 

(b)                                 In
the event the Company proposes to undertake an issuance of New Securities, it
shall give the Investor written notice of its intention, describing the type of
New Securities, their price and the general terms upon which the Company
proposes to issue the same.  If  the Investor elects to exercise its right to
anti-dilution protection under this Section 9, the Investor shall, within
twenty (20) business days of its receipt of the notice from the Company,
deliver a written notice to the Company setting forth the number of New
Securities it wishes to purchase from the Company and the aggregate purchase
price.  The Company shall issue to the
Investor its pro rata share of the New Securities in exchange for such purchase
price.

 

(c)                                  The
provisions of this Section 9 shall not in any way limit the other
provisions of this Agreement, including but not limited to the provisions of
Sections 7 and 8 hereof.

 

SECTION 10.                     QUALIFIED IPO.

 

10.1                        Investor Assistance. 
At the Company’s request, the Investor shall in good faith cooperate with
the Company in order to facilitate the Company’s plans to effect a Qualified
IPO,

 

17

 

and in connection with
the foregoing the Investor shall take such actions as may be reasonably
requested from time to time by the Company. 
The parties understand and hereby agree that the Investor will not sell
any Shares as part of a Qualified IPO.

 

10.2                        Qualified IPO Shares. 
In the event the Company consummates a Qualified IPO prior to the third
anniversary of the date of this Agreement, at or concurrently with the sale of
the Company’s Ordinary Shares pursuant to such Qualified IPO, the Investor
shall have the right to acquire directly from the Company at the Qualified IPO
price per share, an interest in the Company which subsequent to the
consummation of its Qualified IPO shall constitute fifty-one percent (51%) of
the Company’s Fully Diluted Ordinary Shares and shall entitle the Investor to
seventy percent (70%) of the voting power of the Company’s Fully Diluted Ordinary
Shares.

 

SECTION 11.                     BOARD OF DIRECTORS.

 

(a)                                  Each
of the parties to this Agreement shall take all actions within their respective
power, including but not limited to, the voting of all share capital of the
Company owned by them, required to cause no less than forty percent (40%) of
the Board of Directors of the Company (the “Board of
Directors”) to consist of representatives designated from time to
time by the Investor (the “Investor Directors”)
at all times. The representatives initially designated to the Board of
Directors by the Investor shall be Andrew J. McKelvey and two other directors
to be designated by the Investor on or after the date of this Agreement.  The appointment of the three representatives of
the Investor shall be effective as of the date of this Agreement or, if later,
the date of designation by the Investor. 
Notwithstanding the foregoing, at no time shall the Investor Directors
constitute less than forty percent (40%) of the members of the Board of
Directors, in the event the size of the Board of Directors is increased or
decreased from time to time.

 

(b)                                 In
the event any director elected to the Board of Directors after being designated
by the Investor as a candidate for membership pursuant to this Section 11
dies, resigns, is removed or otherwise ceases to serve as a member of the Board
of Directors, the Company shall give notice thereof to the Investor and the
Investor shall promptly designate a successor and notify the Board of Directors
of its selection, and the Board of Directors shall act promptly to fill the
vacancy with such designee in accordance with this Section 11, the Company’s
Memorandum of Association and Articles of Association.

 

(c)                                  Each
party hereto hereby agrees to cast such party’s votes for, or give such party’s
written consent to, the removal of a designee of the Investor on the Board of
Directors at any time upon receipt of instructions in writing to such effect,
signed by the Investor.

 

(d)                                 The
Board of Directors of the Company shall have no right to fill any vacancy on
the Board for which the Investor has the right to designate a candidate unless
such vacancy is filled by a designee of the Investor having the right to
designate such director.

 

(e)                                  The
directors of the Company shall be insured by the Company as set forth in Section 7.8,
through the purchase of director’s liability insurance in such amount as is
determined by the Board of Directors, and shall be indemnified by the Company
to the fullest extent provided under applicable law.

 

18

 

(f)                                    The
voting agreements contained herein are coupled with an interest and may not be
revoked during the term of this Agreement.

 

SECTION 12.                     NON-COMPETITION; CONFIDENTIALITY.

 

12.1                        Non-competition.  (a)                            Each
of the Investor and Monster agrees that for a period of three (3) years
after the date hereof, it and its subsidiaries will not engage, directly or
indirectly, in the Internet job board business in or into China, it being
understood, however, that the foregoing shall not in any way be deemed to
preclude: (i) posting of jobs or acquisition of resume licenses, the
viewing of jobs or posting of resumes, or use of any other services or products
by persons or entities based in China on any websites of Monster or its
subsidiaries not based in or targeted to China (except as otherwise provided in
(ii) and (iii) below; (ii) any and all current or future activities
of or relating to the Hong Kong job board of Monster or its subsidiaries,
currently located at www.monster.com.hk <<http://www.monster.com.hk>>,
including but not limited to posting of jobs or acquisition of resumes
licenses, the viewing of jobs or posting of resumes, or use of any other
services or products by persons or entities based in China, whether or not such
site is targeted to China (including but not limited to programs similar to the
“Destination China” program currently available through
<<http://destinationchina.comonster.com.hk>>); and (iii) any and all activities relating to
the recruitment advertising business of Monster and its subsidiaries including,
without limitation, the placement of help wanted advertisements in newspapers
and online job boards of those who may be competitors of the Company, whether
or not such businesses are located in or targeted to China, it being understood
that the recruitment advertising business of Monster and its subsidiaries is,
among other things, in the process of applying for representative office status
in Shanghai and is anticipated to be involved in the development of interactive
products and online job boards for clients within China and elsewhere.

 

(b)                                 Each
Existing Shareholder agrees that for a period of three (3) years after the
date hereof, neither it nor any of its affiliates will, directly or indirectly,
engage in the Internet job board business in or into China.

 

(c)                                  Notwithstanding
the foregoing, nothing contained in this Section 12.1 shall prohibit the
Investor, Monster, the Existing Shareholders nor any of their respective
affiliates from owning not more than an aggregate of five percent (5%) of any
class of stock of any company engaged directly or indirectly in the business in
China which is listed on a national securities exchange or traded in the
over-the-counter market. The Investor, Monster and each Existing Shareholder
acknowledges that the restrictions set forth herein are reasonable, valid and
necessary for the protection of the legitimate interest of the Company.

 

12.2                        Confidentiality. 
The Company and each Existing Shareholder agrees to maintain the confidentiality
of the transactions contemplated by this Agreement and the Purchase Agreement
and not to use the Monster name or any abbreviation or derivation thereof or
hold itself out as having an affiliation with Monster, except to the extent
otherwise (i) required by law or the regulations of applicable securities
exchanges or (ii) consented to by the Investor or Monster.  It is understood that a press release and

 

19

 

certain other general
public disclosure is intended to be issued and made by the Company in
connection with the consummation of the transactions contemplated hereby and by
the Purchase Agreement and that such press release and the form and content of
any such general public disclosure shall be subject to the prior review and
prior approval of Monster.

 

SECTION 13.                     MISCELLANEOUS.

 

13.1                        Governing Law. 
This Agreement shall be governed by and construed under the laws of the
State of New York, without regard to that state’s conflicts of laws principles.

 

13.2                        Amendment.  Any
provision of this Agreement may be amended and the observance thereof may be
waived (either generally or in a particular instance and either retroactively
or prospectively) only by the written consent of the Company, the Investor, Monster
and the holders of a majority of the then outstanding Ordinary Shares.

 

13.3                        Termination.  The
rights and obligations set forth in Sections 7.1 and 7.2 shall terminate upon
the closing of a public offering by the Company which results in the Company
being required to file periodic reports under the Exchange Act.  Except for those set forth in Sections 12 and
13.11, all other rights and obligations established in this Agreement shall
terminate upon the earliest of (a) the closing
of a Qualified IPO (subject to concurrent compliance with the provisions of Section 10.2
above), (b) the closing of the Company’s sale
of all or substantially all of its assets or the acquisition of the Company by
another entity by means of a merger or consolidation resulting in the exchange
of the Company’s outstanding share capital for securities or consideration
issued, or caused to be issued, by the acquiring entity, its subsidiary or
another third party, provided that such sale has been approved by at least one
Investor Director or (c) the closing, if any, of the options contemplated
by Sections 5.3, 5.6, 5.9 or 5.12 hereof.

 

13.4                        Notices.  All
notices and other communications required or permitted hereunder shall be in
writing and shall be mailed by United States first-class mail, postage prepaid,
sent by facsimile or delivered by a courier addressed (a) if
to a Shareholder, as may be indicated on Schedule A hereto, or at
such other address as such holder or permitted assignee shall have furnished to
the Company in writing, (b) if to the Investor, at the address or
facsimile number indicated on the signature page hereof or (c) if to the Company, at the address or facsimile
number indicated for the Company on the signature page hereof.  All such notices and other written communications
shall be effective on the date of mailing, the time of confirmed facsimile
transmission or the date of delivery if delivered by a courier, as the case may
be.  Changes of address, telephone or
facsimile numbers may be made by notices provided for herein.

 

13.5                        Severability.  In
the event one or more of the provisions of this Agreement should, for any
reason, be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions
of this Agreement, and this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein.

 

13.6                        Counterparts; Originals. 
This Agreement may be executed in two or more counterparts and delivered
via facsimile signature, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.  This Agreement may be

 

20

 

executed or delivered by
telecopy or facsimile and execution in such manner shall constitute an
original.

 

13.7                        Entire Agreement; Consent; Termination of Agreements.  This Agreement constitutes the entire
agreement between the parties relative to the specific subject matter
hereof.  Any previous agreement among the
parties relative to the specific subject matter hereof is superseded by this
Agreement.  By their execution of this
Agreement, the parties hereto who were parties to the Old Agreements are, with
respect to the transactions contemplated hereby and by the Purchase Agreement,
waiving their rights of participation arising out of, and giving such consent
as may otherwise be required under the terms of each of the Old
Agreements.  By their execution of this
Agreement, the Company and the parties hereto who were parties to any of the
Old Agreements agree that the rights and obligations set forth in each of the
Old Agreements are automatically terminated and of no further force and effect
as of the date hereof.

 

13.8                        Further Assurances. 
The parties agree, from time to time and without further consideration,
to execute and deliver such further documents and take such further actions as
reasonably may be required to implement and effectuate the transactions
contemplated in this Agreement.

 

13.9                        Successors and Assigns; Shareholders. 
Except as otherwise provided herein, this Agreement will
bind and inure to the benefit of and be enforceable by the Company and its
successors and assigns and the Shareholders and the Investor and any subsequent
holder of Ordinary Shares and the respective successors and assigns of each of
them, so long as they hold such shares. 
None of the provisions hereof shall create, or be construed or deemed to
create, any right to employment in favor of any person by the Company.  This Agreement is not intended to create any
third party beneficiaries. 
Notwithstanding anything to the contrary contained herein, any holder of
Ordinary Shares may become party to this Agreement in such capacity by
executing and delivering a counterpart signature page to this Agreement
and if accepted by the Company and the Investor through delivery of their
respective signature pages to such holder, no further action or consent
shall be required by any Shareholder. 
Any person so added to this Agreement shall be listed on Schedule A
hereto and shall thereafter be deemed to be a Shareholder for all purposes of
this Agreement.  For the purposes of
clarity, it is understood and agreed that the term “Shareholder” as used
herein, does not include or refer to the Investor.

 

13.10                 Attorney Fees.  In
the event that any dispute among the parties to this Agreement should result in
litigation, the prevailing party in such dispute shall be entitled to recover
from the losing party all fees, costs and expenses of enforcing any right of
such prevailing party under or with respect to this Agreement, including
without limitation, such reasonable fees and expenses of attorneys and
accountants, which shall include, without limitation, all fees, costs and
expenses of appeals.

 

13.11                 “Market Stand-Off” Agreement. Except as otherwise
contemplated by or permitted in this Agreement and except for transfers to
Affiliates, the Investor agrees that from the date hereof until the date which
is 365 days after the effective date of a registration statement which is
actually utilized in conjunction with a Qualified IPO (the “Stand-Off
Period”), it shall not sell or otherwise transfer or dispose of any
Ordinary Shares of the Company held by the Investor.  Further, except as otherwise contemplated by
or permitted in this Agreement, the

 

21

 

Investor agrees that
during the Stand-Off Period, the Investor will not purchase or otherwise
acquire additional Ordinary Shares.  The
foregoing restrictions shall expire with respect to the Investor on the third
anniversary of the date of this Agreement if the Company has not consummated a
Qualified IPO prior to such date.  The
Company may impose stop-transfer instructions with respect to the Ordinary
Shares held by the Investor subject to the foregoing restriction until the end
of the Stand-Off Period.

 

13.12                 Specific Performance. 
The parties hereby declare that it is impossible to measure in money the
damages which will accrue to a party hereto by reason of a failure to perform
any of the obligations under this Agreement. 
Therefore, in addition to all other rights and remedies, all parties
hereto shall have the right to specific performance of the obligations of the
other parties under this Agreement, and if any party hereto shall institute any
action or proceeding to enforce the provisions hereof, any person (including
the Company) against whom such action or proceedings is brought hereby waives
the claim or defense therein that such party has or have an adequate remedy at
law, and such person shall not urge in any such action or proceeding the claim
or defense that such remedy at law exists.

 

22

 

The foregoing
Shareholders Agreement is hereby executed as of the date first above written.

 

	
   

  	
  CHINA HR.COM
  HOLDINGS LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Xu Xin

  
	
   

  	
   

  	
  Name:  (Kathy)
  Xu Xin

  
	
   

  	
   

  	
  Title:    Chairperson
  of the Board

  
	
   

  	
   

  	
  Address:

  	
  4/F,
  CITIC Buildings #2

  
	
   

  	
   

  	
   

  	
  19
  Jianguomenwai Dajie

  
	
   

  	
   

  	
   

  	
  Chaoyang
  District

  
	
   

  	
   

  	
   

  	
  Beijing,
  China

  
	
   

  	
   

  	
  Telephone:
  (852) 9328-7839

  
	
   

  	
   

  	
  Fax:
  (852) 2857-3080

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INVESTOR:

  
	
   

  	
   

  
	
   

  	
  TMP WORLDWIDE
  LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ S.J. Cooney

  
	
   

  	
   

  	
  Name:  S.J.
  Cooney

  
	
   

  	
   

  	
  Title:    Director

  
	
   

  	
   

  	
  Address:

  	
  622
  Third Avenue

  
	
   

  	
   

  	
   

  	
  New York, New York 10017

  
	
   

  	
   

  	
  Telephone: (212) 351-7000

  
	
   

  	
   

  	
  Facsimile: (917) 256-8526

  
					

 

 

	
   

  	
  EXISTING SHAREHOLDERS:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  E-CAREER
  HOLDINGS LTD.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Xu Xin

  
	
   

  	
  Name: (Kathy)
  Xu Xin

  
	
   

  	
  Title:   Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GOOD
  CONNECTION ENTERPRISES LIMITED

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Jiexian Zhang

  
	
   

  	
  Name: (James)
  Jiexian Zhang

  
	
   

  	
  Title:   Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MACINTOSH
  ASSOCIATES LIMITED

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Wong Siu Kong

  
	
   

  	
  Name: Wong
  Siu Kong

  
	
   

  	
  Title:   Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SURBITON
  INVESTMENTS LTD.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Adrian Fu Hau Chak

  
	
   

  	
  Name: Adrian
  Fu Hau Chak

  
	
   

  	
  Title:   Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FULL
  MOON RESOURCES LIMITED

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Leung Pak To

  
	
   

  	
  Name: (Francis)
  Leung Pak To

  
	
   

  	
  Title:
     Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BEAUCHAMP
  INTERNATIONAL LIMITED

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Yip Shiu Kwong

  
	
   

  	
  Name: (James)
  Yip Shiu Kwong

  
	
   

  	
  Title:   Director

  

 

 

	
   

  	
  UNION
  ADVANCE GROUP LIMITED

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Zhang Jianguo

  
	
   

  	
  Name: Zhang
  Jianguo

  
	
   

  	
  Title:   Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GREAT
  STRATEGIES GROUP LIMITED

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Lu Xuebin

  
	
   

  	
  Name: Lu
  Xuebin

  
	
   

  	
  Title:   Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ALL
  UNITED CONSULTANTS GROUP

  LIMITED

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Zhang Xiaowen

  
	
   

  	
  Name: Zhang
  Xiaowen

  
	
   

  	
  Title:  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EMPIRE
  PEOPLE LIMITED

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Tang Shengping

  
	
   

  	
  Name: Tang
  Shengping

  
	
   

  	
  Title:  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AS
  TO SECTIONS 5.13, 12 AND 13 ONLY:

  
	
   

  	
   

  
	
   

  	
  MONSTER
  WORLDWIDE, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Myron Olesnyckyj

  
	
   

  	
   

  	
  Name: Myron
  Olesnckyj

  
	
   

  	
   

  	
  Title:   Senior
  Vice President

  
	
   

  	
   

  	
  Address:

  	
  622
  Third Avenue

  
	
   

  	
   

  	
   

  	
  New
  York, New York 10017

  
	
   

  	
   

  	
  Telephone:
  (212) 351-7000

  
	
   

  	
   

  	
  Facsimile:
  (917) 256-8526

  
							

 

 

SCHEDULE A

 

Existing
Shareholders:

 

E-Career Holdings Ltd

Huntlaw Building

P.O. Box 2908

George Town

Grand Cayman

Cayman Islands

 

Good Connection Enterprises Limited

P.O. Box 957

Offshore Incorporations Centre

Road Town, Tortola

British Virgin Islands

 

Macintosh Associates Limited

P.O. Box 957

Offshore Incorporations Centre

Road Town, Tortola

British Virgin Islands

 

Surbiton Investments Limited

P.O. Box 71

Craigmuir Chambers

Road Town, Tortola

British Virgin Islands

 

Full Moon Resources Limited

P.O. Box 957

Offshore Incorporations Centre

Road Town, Tortola

British Virgin Islands

 

Beauchamp International Limited

P.O. Box 957

Offshore Incorporations Centre

Road Town, Tortola

British Virgin Islands

 

 

Union Advance
Group Limited

c/o China HR.com
Holdings Ltd.

4/F, CITIC
Buildings #2

19
Jianguomenwai Dajie

Chaoyang
District

Beijing, China

 

Great Strategies Group
Limited

c/o China HR.com
Holdings Ltd.

4/F, CITIC
Buildings #2

19
Jianguomenwai Dajie

Chaoyang
District

Beijing, China

 

All United
Consultants Limited

c/o China HR.com
Holdings Ltd.

4/F, CITIC
Buildings #2

19
Jianguomenwai Dajie

Chaoyang
District

Beijing, China

 

Empire
People Limited

c/o China HR.com
Holdings Ltd.

4/F, CITIC
Buildings #2

19
Jianguomenwai Dajie

Chaoyang
District

Beijing, ChinaExhibit 10.1

 

Execution Copy

 

 

$25,000,000

 

 

SECOND AMENDED AND RESTATED

CREDIT AGREEMENT

 

among

 

 

TTM TECHNOLOGIES, INC.,

as Borrower,

 

 

THE DOMESTIC SUBSIDIARIES OF THE BORROWER

FROM TIME TO TIME PARTIES HERETO,

as Guarantors,

 

 

THE LENDERS PARTIES HERETO

 

and

 

WACHOVIA BANK, NATIONAL ASSOCIATION

(formerly known as First Union National Bank),

as Administrative Agent

 

and

 

COMERICA BANK,

as Syndication Agent

 

and

 

SILICON VALLEY BANK,

as Documentation Agent

 

and

 

WACHOVIA CAPITAL MARKETS, LLC

(formerly known as First Union Capital Markets Corp.),

as Lead Arranger and Book Manager

 

Dated as of July 15, 2005

 

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I DEFINITIONS

  	
   

  
	
  Section 1.1

  	
   

  	
  Defined Terms

  	
   

  
	
  Section 1.2

  	
   

  	
  Other Definitional
  Provisions

  	
   

  
	
  Section 1.3

  	
   

  	
  Accounting Terms

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II
  THE LOANS; AMOUNT AND TERMS

  	
   

  
	
  Section 2.1

  	
   

  	
  Revolving Loans

  	
   

  
	
  Section 2.2

  	
   

  	
  Increase Option

  	
   

  
	
  Section 2.3

  	
   

  	
  Intentionally
  Omitted

  	
   

  
	
  Section 2.4

  	
   

  	
  Letter of
  Credit Subfacility

  	
   

  
	
  Section 2.5

  	
   

  	
  Swingline
  Loan Subfacility

  	
   

  
	
  Section
  2.6

  	
   

  	
  Fees

  	
   

  
	
  Section 2.7

  	
   

  	
  Commitment
  Reductions

  	
   

  
	
  Section 2.8

  	
   

  	
  Prepayments

  	
   

  
	
  Section 2.9

  	
   

  	
  Minimum
  Principal Amount of Tranches

  	
   

  
	
  Section 2.10

  	
   

  	
  Default
  Rate and Payment Dates

  	
   

  
	
  Section 2.11

  	
   

  	
  Conversion
  Options

  	
   

  
	
  Section 2.12

  	
   

  	
  Computation
  of Interest and Fees

  	
   

  
	
  Section 2.13

  	
   

  	
  Pro Rata
  Treatment and Payments

  	
   

  
	
  Section 2.14

  	
   

  	
  Non-Receipt
  of Funds by the Administrative Agent

  	
   

  
	
  Section 2.15

  	
   

  	
  Inability
  to Determine Interest Rate

  	
   

  
	
  Section 2.16

  	
   

  	
  Illegality

  	
   

  
	
  Section 2.17

  	
   

  	
  Requirements of
  Law

  	
   

  
	
  Section 2.18

  	
   

  	
  Indemnity

  	
   

  
	
  Section
  2.19

  	
   

  	
  Taxes

  	
   

  
	
  Section 2.20

  	
   

  	
  Indemnification;
  Nature of Issuing Lender’s Duties

  	
   

  
	
  Section 2.21

  	
   

  	
  Replacement
  of Lenders

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III
  REPRESENTATIONS AND WARRANTIES

  	
   

  
	
  Section 3.1

  	
   

  	
  Financial
  Condition

  	
   

  
	
  Section 3.2

  	
   

  	
  No Change

  	
   

  
	
  Section 3.3

  	
   

  	
  Corporate
  Existence; Compliance with Law

  	
   

  
	
  Section 3.4

  	
   

  	
  Corporate
  Power; Authorization; Enforceable Obligations

  	
   

  
	
  Section 3.5

  	
   

  	
  No Legal Bar;
  No Default

  	
   

  
	
  Section 3.6

  	
   

  	
  No Material
  Litigation

  	
   

  
	
  Section 3.7

  	
   

  	
  Investment
  Company Act

  	
   

  
	
  Section 3.8

  	
   

  	
  Margin
  Regulations

  	
   

  
	
  Section
  3.9

  	
   

  	
  ERISA

  	
   

  
	
  Section 3.10

  	
   

  	
  Environmental
  Matters

  	
   

  
	
  Section 3.11

  	
   

  	
  Purpose of Loans

  	
   

  
	
  Section
  3.12

  	
   

  	
  Subsidiaries

  	
   

  
	
  Section 3.13

  	
   

  	
  Ownership

  	
   

  
	
  Section 3.14

  	
   

  	
  Indebtedness

  	
   

  

 

i

 

	
  Section
  3.15

  	
   

  	
  Taxes

  	
   

  
	
  Section 3.16

  	
   

  	
  Intellectual
  Property

  	
   

  
	
  Section 3.17

  	
   

  	
  Solvency

  	
   

  
	
  Section 3.18

  	
   

  	
  Investments

  	
   

  
	
  Section 3.19

  	
   

  	
  Location of
  Collateral

  	
   

  
	
  Section
  3.20

  	
   

  	
  No
  Burdensome Restrictions

  	
   

  
	
  Section 3.21

  	
   

  	
  Labor Matters

  	
   

  
	
  Section 3.22

  	
   

  	
  Security
  Documents

  	
   

  
	
  Section
  3.23

  	
   

  	
  Accuracy
  and Completeness of Information

  	
   

  
	
  Section
  3.24

  	
   

  	
  Compliance
  with Trading with the Enemy Act, OFAC Rules and Regulations and Patriot Act

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV
  CONDITIONS PRECEDENT

  	
   

  
	
  Section 4.1

  	
   

  	
  Conditions
  to Closing Date and Initial Revolving Loans

  	
   

  
	
  Section 4.2

  	
   

  	
  Conditions
  to All Extensions of Credit

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V AFFIRMATIVE
  COVENANTS

  	
   

  
	
  Section 5.1

  	
   

  	
  Financial
  Statements

  	
   

  
	
  Section 5.2

  	
   

  	
  Certificates;
  Other Information

  	
   

  
	
  Section 5.3

  	
   

  	
  Payment of
  Obligations

  	
   

  
	
  Section 5.4

  	
   

  	
  Conduct of
  Business and Maintenance of Existence

  	
   

  
	
  Section 5.5

  	
   

  	
  Maintenance
  of Property; Insurance

  	
   

  
	
  Section 5.6

  	
   

  	
  Inspection
  of Property; Books and Records; Discussions

  	
   

  
	
  Section
  5.7

  	
   

  	
  Notices

  	
   

  
	
  Section 5.8

  	
   

  	
  Environmental
  Laws

  	
   

  
	
  Section 5.9

  	
   

  	
  Financial
  Covenants

  	
   

  
	
  Section 5.10

  	
   

  	
  Additional
  Subsidiary Guarantors

  	
   

  
	
  Section 5.11

  	
   

  	
  Compliance with
  Law

  	
   

  
	
  Section 5.12

  	
   

  	
  Pledged Assets

  	
   

  
	
  Section 5.13

  	
   

  	
  Further
  Assurances

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI
  NEGATIVE COVENANTS

  	
   

  
	
  Section 6.1

  	
   

  	
  Indebtedness

  	
   

  
	
  Section
  6.2

  	
   

  	
  Liens

  	
   

  
	
  Section 6.3

  	
   

  	
  Guaranty
  Obligations

  	
   

  
	
  Section 6.4

  	
   

  	
  Nature of
  Business

  	
   

  
	
  Section 6.5

  	
   

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

  	
   

  
	
  Section 6.6

  	
   

  	
  Advances,
  Investments and Loans

  	
   

  
	
  Section 6.7

  	
   

  	
  Transactions
  with Affiliates

  	
   

  
	
  Section 6.8

  	
   

  	
  Ownership
  of Subsidiaries; Restrictions

  	
   

  
	
  Section 6.9

  	
   

  	
  Fiscal
  Year; Organizational Documents; Material Contracts

  	
   

  
	
  Section 6.10

  	
   

  	
  Limitation
  on Restricted Actions

  	
   

  
	
  Section
  6.11

  	
   

  	
  Restricted Payments

  	
   

  
	
  Section
  6.12

  	
   

  	
  Prepayments of Indebtedness, etc.

  	
   

  
	
  Section
  6.13

  	
   

  	
  No Further Negative Pledges

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII EVENTS OF DEFAULT

  	
   

  
	
  Section
  7.1

  	
   

  	
  Events of Default

  	
   

  

 

ii

 

	
  Section
  7.2

  	
   

  	
  Acceleration; Remedies

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII THE AGENT

  	
   

  
	
  Section
  8.1

  	
   

  	
  Appointment

  	
   

  
	
  Section
  8.2

  	
   

  	
  Delegation of Duties

  	
   

  
	
  Section
  8.3

  	
   

  	
  Exculpatory Provisions

  	
   

  
	
  Section
  8.4

  	
   

  	
  Reliance by Administrative Agent

  	
   

  
	
  Section
  8.5

  	
   

  	
  Notice of Default

  	
   

  
	
  Section
  8.6

  	
   

  	
  Non-Reliance on Administrative
  Agent and Other Lenders

  	
   

  
	
  Section
  8.7

  	
   

  	
  Indemnification

  	
   

  
	
  Section
  8.8

  	
   

  	
  Administrative Agent in Its
  Individual Capacity

  	
   

  
	
  Section
  8.9

  	
   

  	
  Successor Administrative Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX MISCELLANEOUS

  	
   

  
	
  Section
  9.1

  	
   

  	
  Amendments, Waivers and Release of
  Collateral

  	
   

  
	
  Section
  9.2

  	
   

  	
  Notices

  	
   

  
	
  Section
  9.3

  	
   

  	
  No Waiver; Cumulative Remedies

  	
   

  
	
  Section
  9.4

  	
   

  	
  Survival of Representations and
  Warranties

  	
   

  
	
  Section
  9.5

  	
   

  	
  Payment of Expenses and Taxes

  	
   

  
	
  Section
  9.6

  	
   

  	
  Successors and Assigns;
  Participations; Purchasing Lenders

  	
   

  
	
  Section
  9.7

  	
   

  	
  Adjustments; Set-off

  	
   

  
	
  Section
  9.8

  	
   

  	
  Table of Contents and Section
  Headings

  	
   

  
	
  Section
  9.9

  	
   

  	
  Counterparts

  	
   

  
	
  Section
  9.10

  	
   

  	
  Effectiveness

  	
   

  
	
  Section
  9.11

  	
   

  	
  Severability

  	
   

  
	
  Section
  9.12

  	
   

  	
  Integration

  	
   

  
	
  Section
  9.13

  	
   

  	
  Governing Law

  	
   

  
	
  Section
  9.14

  	
   

  	
  Consent to Jurisdiction and
  Service of Process

  	
   

  
	
  Section
  9.15

  	
   

  	
  Confidentiality

  	
   

  
	
  Section
  9.16

  	
   

  	
  Acknowledgments

  	
   

  
	
  Section
  9.18

  	
   

  	
  Waivers of Jury Trial

  	
   

  
	
  Section
  9.19

  	
   

  	
  Binding Effect; Termination of
  this Agreement; Termination of Existing Credit Agreement

  	
   

  
	
  Section
  9.20

  	
   

  	
  USA Patriot Act Notice

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X GUARANTY

  	
   

  
	
  Section
  10.1

  	
   

  	
  The Guaranty

  	
   

  
	
  Section
  10.2

  	
   

  	
  Bankruptcy

  	
   

  
	
  Section
  10.3

  	
   

  	
  Nature of Liability

  	
   

  
	
  Section
  10.4

  	
   

  	
  Independent Obligation

  	
   

  
	
  Section
  10.5

  	
   

  	
  Authorization

  	
   

  
	
  Section
  10.6

  	
   

  	
  Reliance

  	
   

  
	
  Section
  10.7

  	
   

  	
  Waiver

  	
   

  
	
  Section
  10.8

  	
   

  	
  Limitation on Enforcement

  	
   

  
	
  Section
  10.9

  	
   

  	
  Confirmation of Payment

  	
   

  
	
  Section
  10.10

  	
   

  	
  California Waivers

  	
   

  

 

iii

 

Schedules

 

	
  Schedule 1.1(a)

  	
   

  	
  Account
  Designation Letter

  
	
  Schedule 1.1(b)

  	
   

  	
  Permitted Liens

  
	
  Schedule 1.1(c)

  	
   

  	
  Investments

  
	
  Schedule 2.1(a)

  	
   

  	
  Schedule of
  Lenders and Commitments

  
	
  Schedule 2.1(b)(i)

  	
   

  	
  Form of
  Notice of Borrowing

  
	
  Schedule 2.1(e)

  	
   

  	
  Form of
  Revolving Note

  
	
  Schedule 2.5(d)

  	
   

  	
  Form of
  Swingline Note

  
	
  Schedule 2.11

  	
   

  	
  Form of
  Notice of Conversion/Extension

  
	
  Schedule 2.19

  	
   

  	
  Section 2.19
  Certificate

  
	
  Schedule 3.12

  	
   

  	
  Subsidiaries

  
	
  Schedule 3.16

  	
   

  	
  Intellectual
  Property

  
	
  Schedule 3.19(a)

  	
   

  	
  Location of Real
  Property

  
	
  Schedule 3.19(b)

  	
   

  	
  Location of
  Collateral

  
	
  Schedule 3.19(c)

  	
   

  	
  Chief Executive
  Offices

  
	
  Schedule 4.1(b)

  	
   

  	
  Form of
  Secretary’s Certificate

  
	
  Schedule 4.1(i)

  	
   

  	
  Form of
  Solvency Certificate

  
	
  Schedule 5.5(b)

  	
   

  	
  Insurance

  
	
  Schedule 5.10

  	
   

  	
  Form of
  Joinder Agreement

  
	
  Schedule 6.1(b)

  	
   

  	
  Indebtedness

  
	
  Schedule 6.7

  	
   

  	
  Transactions
  with Affiliates

  
	
  Schedule 6.9

  	
   

  	
  Fiscal Quarter
  Ends

  
	
  Schedule 9.2

  	
   

  	
  Schedule of
  Lenders’ Lending Offices

  
	
  Schedule 9.6(c)

  	
   

  	
  Form of
  Commitment Transfer Supplement

  

 

iv

 

THIS SECOND
AMENDED AND RESTATED  CREDIT AGREEMENT,
dated as of July 15, 2005, among TTM TECHNOLOGIES, INC.
(formerly known as Pacific Circuits, Inc.), a Washington corporation,
those Domestic Subsidiaries of the Borrower identified as a “Guarantor” on the
signature pages hereto and such other Domestic Subsidiaries of the
Borrower as may from time to time become a party hereto (the “Guarantors”),
the several banks and other financial institutions as may from time to time
become parties to this Agreement (collectively, the “Lenders”; and
individually, a “Lender”), and WACHOVIA BANK, NATIONAL
ASSOCIATION (formerly known as First Union National Bank), a
national banking association, as administrative agent for the Lenders hereunder
(in such capacity, the “Administrative Agent”).

 

W  I  T  N  E
S  S  E  T  H:

 

WHEREAS,
the Borrower (formerly known as Pacific Circuits, Inc.) is party to that
certain Amended and Restated Credit Agreement, dated as of September 29, 2000,
as amended from time to time thereafter (as amended, the “Existing Credit
Agreement”), among the Borrower, the Domestic Subsidiaries of the Borrower,
as guarantors, the several banks and other financial institutions party thereto
(the “Existing Lenders”) and First Union National Bank, as administrative
agent for the lenders thereunder; pursuant to which the Existing Lenders have
agreed to make loans and other financial accommodations to the Borrower in the
amount of up to $70,000,000 pursuant to the terms and conditions contained
therein.

 

WHEREAS,
the Lenders have agreed to amend and restate the Existing Credit Agreement and
restructure the Existing Credit Agreement to provide for, among other things, $25,000,000
in revolving loans and other financial accommodations to the Borrower on the
terms and conditions contained herein.

 

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

 

ARTICLE I

 

DEFINITIONS

 

Section 1.1                                   Defined Terms.

 

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

 

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

 

 

“ACI”
shall mean TTM Advanced Circuits, Inc. (formerly known as Honeywell
Advanced Circuits, Inc.), a Minnesota corporation.

 

“Acquisition”,
by any Person, shall mean the acquisition by such Person, in a single
transaction or in a series of related transactions, of all of the Capital Stock
or all or substantially all of the property of another Person, whether or not
involving a merger or consolidation with such other Person and whether for
cash, property, services, assumption of Indebtedness, securities or otherwise.

 

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

 

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

 

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

 

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

 

“Alternate
Base Rate” shall mean, for any day, a rate per annum equal to the greater
of (a) the Prime Rate in effect on such day and (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%.  For purposes hereof: “Prime Rate”
shall mean, at any time, the rate of interest per annum publicly announced from
time to time by Wachovia at its principal office in Charlotte, North Carolina
as its prime rate.  Each change in the
Prime Rate shall be effective as of the opening of business on the day such
change in the Prime Rate occurs.  The
parties hereto acknowledge that the rate announced publicly by Wachovia as its
Prime Rate is an index or base rate and shall not necessarily be its lowest or
best rate charged to its customers or other banks; and “Federal Funds
Effective Rate” shall mean, for any day, the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate is not
so published on the next succeeding Business Day, the average of the quotations
for the day of such transactions received by the Administrative Agent from
three federal funds brokers of recognized standing selected by it.  If for any reason the Administrative Agent
shall have determined (which determination shall be conclusive in the absence
of manifest error) that it is unable to ascertain the Federal Funds Effective
Rate, for any reason, including the inability or failure of the Administrative
Agent to obtain sufficient quotations in accordance with the terms thereof, the
Alternate Base Rate shall be determined without regard to clause (b) of
the first sentence of this definition, as appropriate, until the circumstances
giving rise to such inability no longer exist. 
Any change in the Alternate Base Rate due to a change in the Prime Rate
or the Federal Funds Effective Rate shall be effective on the opening of
business on the date of such change.

 

2

 

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

 

“Applicable
Percentage” shall mean, for any day, the rate per annum set forth below
opposite the applicable Level then in effect, it being understood that the
Applicable Percentage for (i) Revolving Loans which are Alternate Base
Rate Loans shall be the percentage set forth under the column “Alternate Base
Rate Margin for Revolving Loans”, (ii) Revolving Loans which are LIBOR
Rate Loans shall be the percentage set forth under the column “LIBOR Rate
Margin for Revolving Loans and Letter of Credit Fee”, (iii) the Letter of
Credit Fee shall be the percentage set forth under the column “LIBOR Rate
Margin for Revolving Loans and Letter of Credit Fee”, and (iv) the
Commitment Fee shall be the percentage set forth under the column “Commitment
Fee”:

 

	
  Level

  	
   

  	
  Leverage

  Ratio

  	
   

  	
  Alternate

  Base Rate

  Margin for

  Revolving

  Loans

  	
   

  	
  LIBOR Rate

  Margin for

  Revolving

  Loans

  and Letter of

  Credit Fee

  	
   

  	
  Commitment

  Fee

  	
   

  
	
  I

  	
   

  	
  3
  2.00 to 1.0

  	
   

  	
  0.50

  	
  %

  	
  1.75

  	
  %

  	
  0.35

  	
  %

  
	
  II

  	
   

  	
  <
  2.00 to 1.0 but 3 1.50 to 1.0

  	
   

  	
  0.25

  	
  %

  	
  1.50

  	
  %

  	
  0.30

  	
  %

  
	
  III

  	
   

  	
  <
  1.50 to 1.0 but 3 1.00 to 1.0

  	
   

  	
  0.00

  	
  %

  	
  1.25

  	
  %

  	
  0.25

  	
  %

  
	
  IV

  	
   

  	
  <
  1.00 to 1.0

  	
   

  	
  0.00

  	
  %

  	
  1.00

  	
  %

  	
  0.20

  	
  %

  

 

The
Applicable Percentage shall, in each case, be determined and adjusted quarterly
on the date five (5) Business Days after the date on which the
Administrative Agent has received from the Borrower the quarterly financial
information and certifications required to be delivered to the Administrative
Agent and the Lenders in accordance with the provisions of Sections 5.1(b) and
5.2(b) (each an “Interest Determination Date”).  Such Applicable Percentage shall be effective
from such Interest Determination Date until the next such Interest
Determination Date.  The initial
Applicable Percentages shall be based on Level IV
until the first Interest Determination Date occurring after June 30,
2005.  After June 30, 2005, if the
Borrower shall fail to provide the quarterly financial information and
certifications in accordance with the provisions of Sections 5.1(b) and
5.2(b), the Applicable Percentage from such Interest Determination Date shall, on the date five (5) Business Days after the date by
which the Borrower was so required to provide such financial information and
certifications to the Administrative Agent and the Lenders, be
based on Level I until such time as such information and certifications are
provided, whereupon the Level shall be determined by the then current Leverage
Ratio.

 

3

 

“Asset
Disposition” shall mean the disposition of any or all of the assets
(including, without limitation, the Capital Stock of a Subsidiary or any
ownership interest in a joint venture) of any Credit Party or any Subsidiary
whether by sale, lease, transfer or otherwise. 
The term “Asset Disposition” shall not include (i) Specified Sales,
(ii) the sale, lease or transfer of assets permitted by Section 6.5(a)(iii) or
(iv) hereof, or (iii) any Equity Issuance.

 

“Available
Cash” shall mean, as of any date of determination, the aggregate amount of
all domestic cash and Cash
Equivalents of the Credit Parties
which such cash or Cash Equivalents are not subject to any Liens in favor of
any Person (other than customary Liens in favor of any depository bank or
investment institution or similar entity), readily marketable and available for
the immediate payment or repayment of Indebtedness as of such date of
determination.

 

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

 

“Borrower”
shall mean TTM Technologies, Inc. (formerly known as Pacific Circuits, Inc.),
a Washington corporation and any successors permitted hereunder.

 

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

 

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

 

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

 

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

 

“Capital
Lease Obligations” shall mean the capitalized lease obligations relating to
a Capital Lease determined in accordance with GAAP.

 

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

 

4

 

“Cash
Equivalents” shall mean (i) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than twelve months from the date of acquisition (“Government Obligations”),
(ii) U.S. dollar denominated (or foreign currency fully hedged) time
deposits, certificates of deposit, Eurodollar time deposits and Eurodollar
certificates of deposit of (y) any domestic commercial bank of recognized
standing having capital and surplus in excess of $250,000,000 or (z) any bank
whose short-term commercial paper rating from S&P is at least A-1 or the
equivalent thereof or from Moody’s is at least P-1 or the equivalent thereof
(any such bank being an “Approved Bank”), in each case with maturities
of not more than 364 days from the date of acquisition, (iii) commercial
paper and variable or fixed rate notes issued by any Approved Bank (or by the
parent company thereof) or any variable rate notes issued by, or guaranteed by
any domestic corporation rated A-1 (or the equivalent thereof) or better by
S&P or P-1 (or the equivalent thereof) or better by Moody’s and maturing
within one year of the date of acquisition, (iv) repurchase agreements
with a bank or trust company (including a Lender) or a recognized securities
dealer having capital and surplus in excess of $500,000,000 for direct
obligations issued by or fully guaranteed by the United States of America, (v) obligations
of any state of the United States or any political subdivision thereof for the
payment of the principal and redemption price of and interest on which there
shall have been irrevocably deposited Government Obligations maturing as to
principal and interest at times and in amounts sufficient to provide such
payment, and (vi) auction preferred stock rated in the highest short-term
credit rating category by S&P or Moody’s.

 

“Change
of Control” shall mean the occurrence of any of the following events:  (a) any Person or two or more Persons
acting in concert shall have acquired beneficial ownership, directly or
indirectly, or shall have acquired by contract or otherwise, or shall have
entered into a contract or arrangement that, upon consummation, will result in
its or their acquisition of control over, Voting Stock of the Borrower (or
other securities convertible into such Voting Stock) representing 33% or more
of the combined voting power of all Voting Stock of the Borrower or (b) the
occupation of a majority of the seats (other than vacant seats) on the board of
directors of the Borrower by Persons who were neither (i) nominated by the
board of directors of the Borrower nor (ii) appointed by directors so
nominated.  As used herein, “beneficial
ownership” shall have the meaning provided in Rule 13d-3 of the Securities
and Exchange Commission promulgated under the Securities Exchange Act of 1934.

 

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

 

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

 

“Collateral”
shall mean a collective reference to the collateral which is identified in, and
at any time will be covered by, the Security Documents.

 

5

 

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

 

“Commitment
Fee” shall have the meaning set forth in Section 2.6(a).

 

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

 

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

 

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

 

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

 

“Consolidated
Capital Expenditures” shall mean, for any period, all capital expenditures
of the Borrower and its Subsidiaries on a consolidated basis for such period,
as determined in accordance with GAAP. 
The term “Consolidated Capital Expenditures” shall not include capital
expenditures in respect of the reinvestment of proceeds derived from (i) Recovery
Events or (ii) a sale of assets pursuant to Section 6.5(a)(ii) received
by the Borrower and its Subsidiaries to the extent that such reinvestment is
permitted under the Credit Documents.

 

“Consolidated
Cash Taxes” shall mean, as of any date with respect to the Borrower and its
Subsidiaries on a consolidated basis, the aggregate of all taxes, as determined
in accordance with GAAP, to the extent such taxes are paid in cash during the
applicable period (without giving effect to any tax refunds or credits received
during such applicable period).

 

“Consolidated
EBITDA” shall mean, for any period, the sum of (i) Consolidated Net
Income for such period, plus (ii) an amount which, in the determination of
Consolidated Net Income for such period, has been deducted for (A) Consolidated
Interest Expense, (B) total federal, state, local and foreign income,
value added and similar taxes, (C) losses (or minus gains) on the
sale or disposition of assets outside the ordinary course of business and (D) depreciation,
amortization expense, non-cash stock option expense pursuant to FAS123-R and
other non-cash charges (including non-cash restructuring charges), all as
determined in accordance with GAAP.

 

“Consolidated
Interest Expense” shall mean, for any period, all cash interest expense of
the Borrower and its Subsidiaries (including, without limitation, the interest
component under Capital Leases), as determined in accordance with GAAP.

 

6

 

“Consolidated
Net Income” shall mean, for any period, net income (excluding extraordinary
items) after taxes for such period of the Borrower and its Subsidiaries on a
consolidated basis, as determined in accordance with GAAP.

 

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

 

“Credit
Documents” shall mean this Agreement, each of the Notes, any Joinder
Agreement, the Letters of Credit, LOC Documents and the Security Documents.

 

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

 

“Credit
Party Obligations” shall mean, without duplication, (i) all of the
obligations of the Credit Parties to the Lenders (including the Issuing Lender)
and the Administrative Agent, whenever arising, under this Agreement, the Notes
or any of the other Credit Documents (including, but not limited to, any
interest accruing after the occurrence of a filing of a petition of bankruptcy
under the Bankruptcy Code with respect to any Credit Party, regardless of
whether such interest is an allowed claim under the Bankruptcy Code) and (ii) all
liabilities and obligations, whenever arising, owing from the Borrower or any
of its Subsidiaries to any Lender, or any Affiliate of a Lender, arising under
any Hedging Agreement.

 

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

 

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

 

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

 

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

 

“Domestic
Lending Office” shall mean, initially, the office of each Lender designated
as such Lender’s Domestic Lending Office shown on Schedule 9.2; and
thereafter, such other office of such Lender as such Lender may from time to
time specify to the Administrative Agent and the Borrower as the office of such
Lender at which Alternate Base Rate Loans of such Lender are to be made.

 

7

 

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

 

“Eligible
Inventory and A/R Report” shall have the meaning set forth in Section 5.2(f).

 

“Eligible Inventory” shall mean, as of any date of
determination and without duplication, the lower of the aggregate book value
(based on a FIFO or a moving average cost valuation, consistently applied) or
fair market value of all raw materials and finished goods inventory owned by
the Borrower or any of its Subsidiaries less appropriate reserves determined in
accordance with GAAP but excluding in any event (a) inventory which is (i) not
subject to a perfected, first priority Lien in favor of the Administrative
Agent to secure the Credit Party Obligations or (ii) subject to any other
Lien that is not a Permitted Lien, (b) inventory which is not in good
condition or fails to meet standards for sale or use imposed by governmental
agencies, departments or divisions having regulatory authority over such goods,
(c) inventory located outside of the United States, (d) inventory
located at a location not owned by the Borrower or any of its Subsidiaries with
respect to which the Administrative Agent shall not have received a landlord’s,
warehousemen’s, bailee’s or appropriate waiver or subordination satisfactory to
the Administrative Agent, (e) inventory which is leased, on consignment or
“sale or return” basis or which is “in-transit” to a customer or has otherwise
been shipped to a customer, (f) any parts, supply, scrap, chemicals or
obsolete Inventory and any Inventory that is not reasonably marketable or slow
moving (no sales in the last 12 months or inventory in-excess of a 12 month
supply) and (g) any finished goods inventory without a current
(non-expired) purchase order.

 

“Eligible Receivables” shall mean, as of any date
of determination and without duplication, the aggregate book value of all
accounts receivable, receivables, and obligations for payment created or
arising from the sale of inventory or the rendering of services in the ordinary
course of business (collectively, the “Receivables”), owned by or owing
to the Borrower or any of its Subsidiaries, net of allowances and reserves for
doubtful or uncollectible accounts and sales adjustments consistent with such
Person’s internal policies and in any event in accordance with GAAP, but
excluding in any event (a) any Receivable that is (i) not subject to
a perfected, first priority Lien in favor of the Administrative Agent to secure the Credit Party Obligations or (ii) subject
to any other Lien that is not a Permitted Lien, (b) Receivables
that are more than 90 days past invoice
date or more than 60 days past due date, (c) Receivables evidenced by
notes, chattel paper or other instruments, unless such notes, chattel paper or
instruments have been delivered to and are in the possession of the Administrative
Agent, (d) Receivables owing by an
account debtor that is not solvent (to the extent the financial statements of
the account debtor are public knowledge or delivered to the Borrower) or is
subject to any bankruptcy or insolvency proceeding of any kind, (e) Receivables
owing by an account debtor located outside of the United States or Canada unless
the sale is on a commercial or standby letter of credit, guaranty or acceptance
terms, or subject to credit insurance, in each case acceptable to the
Administrative Agent in its reasonable discretion, (f) Receivables which are contingent or subject to offset, deduction,
counterclaim, dispute or other defense to payment, in each case to the extent
of such offset, deduction, counterclaim, dispute or other defense, (g) Receivables
for which any direct or indirect Subsidiary or any Affiliate is the account
debtor, (h) Receivables representing a sale to

 

8

 

the
government of the United States or any agency or instrumentality thereof unless
the Federal Assignment of Claims Act has been complied with to the reasonable
satisfaction of the Administrative Agent with respect to the granting of a security interest in such Receivable, (i) Receivables
owing by an account debtor in which more than 50% of the account debtors’ total
accounts receivable balance is more than 90 days past invoice date, (j)
the sale to the account debtor is on a bill-and-hold, guaranteed sale,
sale-and-return, sale on approval or consignment basis or made pursuant to any
other written agreement providing for repurchase or return (other than
repurchases or returns for defective or nonconforming goods), (k) Receivables
that represent interest payments, late or finance charges, or service charges
owing to the Borrower or its Subsidiaries, (l) Receivables which are in a
currency other than U.S. dollars, (m) such Receivable is an obligation for
which the total unpaid accounts of the account debtor to the Borrower and its
Subsidiaries exceed 20% of the aggregate of all Receivable of the Borrower and
its Subsidiaries, to the extent of such excess; provided that Receivables
described in this clause (m) that are covered by commercial or standby letters
of credit or credit insurance shall not be excluded in an amount equal to the
letter of credit amount or the credit insurance policy amount minus any
deductibles owed or owing by the Borrower and (n) any receivable that is double billed or double financed to the
extent of such duplication.

 

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

 

“Equity
Issuance” shall mean any issuance by any Credit Party or any Subsidiary to
any Person which is not a Credit Party of (a) shares of its Capital Stock,
(b) any shares of its Capital Stock pursuant to the exercise of options or
warrants or (c) any shares of its Capital Stock pursuant to the conversion
of any debt securities to equity. The term “Equity Issuance” shall not include (i) any
Asset Disposition, or (ii) any Debt Issuance.

 

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

 

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

 

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

 

9

 

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

 

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

 

“Fee
Letter” shall mean the engagement letter dated May 27, 2005 addressed
to the Borrower from the Administrative Agent, as amended, modified or
otherwise supplemented.

 

“Fixed
Charge Coverage Ratio” shall mean, as of the end of each fiscal quarter of
the Borrower, for the Borrower and its Subsidiaries on a consolidated basis for
the four consecutive quarters ending on such date, the ratio of (i) Consolidated
EBITDA for the applicable period to (ii) the sum of Consolidated Interest
Expense for the applicable period plus Scheduled Funded Debt Payments
for the applicable period plus Consolidated Cash Taxes for the
applicable period plus Consolidated Capital Expenditures for the
applicable period plus Restricted Payments (other than Restricted
Payments permitted by clauses (a) and (b) of Section 6.11
hereof) for the applicable period.

 

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

 

“Funded
Debt” shall mean, with respect to the Borrower and its Subsidiaries on a
consolidated basis, without duplication, (a) all Indebtedness of such
Person other than Indebtedness of the types referred to in clause (e), (f), (i) and
(l) of the definition of “Indebtedness” set forth in this Section 1.1, (b) all
Funded Debt of others of the type referred to in clause (a) above secured
by (or for which the holder of such Funded Debt has an existing right,
contingent or otherwise, to be secured by) any Lien on, or payable out of the
proceeds of production from, property owned or acquired by such Person, whether
or not the obligations secured thereby have been assumed, (c) all Guaranty
Obligations of such Person with respect to Funded Debt of the type referred to
in clause (a) above of another Person, and (d) Funded Debt of the
type referred to in clause (a) above of any partnership or unincorporated
joint venture in which such Person is legally obligated or has a reasonable
expectation of being liable with respect thereto.

 

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

 

“Government
Acts” shall have the meaning set forth in Section 2.20.

 

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

 

“Guaranty
Obligations” shall mean, with respect to any Person, without duplication,
any obligations of such Person (other than endorsements in the ordinary course
of business of negotiable instruments for deposit or collection) guaranteeing
or intended to guarantee any Indebtedness of any other Person in any manner,
whether direct or indirect, and including without limitation any 

 

10

 

obligation, whether or
not contingent, (i) to purchase any such Indebtedness or any property
constituting security therefor, (ii) to advance or provide funds or other
support for the payment or purchase of any such Indebtedness or to maintain
working capital, solvency or other balance sheet condition of such other Person
(including without limitation keep well agreements, maintenance agreements,
comfort letters or similar agreements or arrangements) for the benefit of any
holder of Indebtedness of such other Person, (iii) to lease or purchase
Property, securities or services primarily for the purpose of assuring the
holder of such Indebtedness, or (iv) to otherwise assure or hold harmless
the holder of such Indebtedness against loss in respect thereof.  The amount of any Guaranty Obligation
hereunder shall (subject to any limitations set forth therein) be deemed to be
an amount equal to the outstanding principal amount (or maximum principal
amount, if larger) of the Indebtedness in respect of which such Guaranty
Obligation is made.

 

“Guarantor”
shall mean the Domestic Subsidiaries identified as a “Guarantor” on the
signature pages hereto and the Additional Credit Parties which execute a
Joinder Agreement, together with their successors and permitted assigns.

 

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

 

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

 

“Indebtedness”
shall mean, with respect to any Person, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, or upon
which interest payments are customarily made, (c) all obligations of such
Person under conditional sale or other title retention agreements relating to
property purchased by such Person (other than customary reservations or
retentions of title under agreements with suppliers entered into in the
ordinary course of business), (d) all obligations of such Person issued or
assumed as the deferred purchase price of property or services purchased by
such Person (other than trade debt incurred in the ordinary course of business
and due within six months of the incurrence thereof) which would appear as
liabilities on a balance sheet of such Person, (e) all obligations of such
Person under take-or-pay or similar arrangements or under commodities
agreements, (f) all Indebtedness of others secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien on, or payable out of the proceeds of production from,
property owned or acquired by such Person, whether or not the obligations secured
thereby have been assumed, (g) all Guaranty Obligations of such Person
with respect to Indebtedness of another Person, (h) the principal portion
of all obligations of such Person under Capital Leases, (i) all
obligations of such Person under Hedging Agreements, (j) the maximum amount of all standby letters of credit issued or
bankers’ acceptances facilities created for the account of such Person and,
without duplication, all drafts drawn thereunder (to the extent unreimbursed),
(k) all preferred Capital Stock issued by
such Person and which by the terms thereof could be (at the request of the
holders thereof or otherwise) subject to mandatory sinking fund payments,
redemption or other acceleration, (l) the
principal balance outstanding under any synthetic lease, tax retention
operating lease, off-balance sheet loan or similar off-balance sheet financing
product and (m) the Indebtedness of any
partnership or unincorporated joint venture in which such Person is a general
partner or a joint venturer.

 

11

 

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

 

“Insolvent”
shall mean being in a condition of Insolvency.

 

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

 

“Interest
Payment Date” shall mean (a) as to any Alternate Base Rate Loan or
Swingline Loan, the last day of each March, June, September and December and
on the applicable Maturity Date, (b) as to any LIBOR Rate Loan having an
Interest Period of three months or less, the last day of such Interest Period,
and (c) as to any LIBOR Rate Loan having an Interest Period longer than
three months, each day which is three months after the first day of such
Interest Period and the last day of such Interest Period.

 

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

 

(i)                                     initially, the
period commencing on the Borrowing Date or conversion date, as the case may be,
with respect to such LIBOR Rate Loan and ending one, two, three or six months
thereafter, as selected by the Borrower in the notice of borrowing or notice of
conversion given with respect thereto; and

 

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

 

provided that the foregoing
provisions are subject to the following:

 

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

 

(B)                                any
Interest Period pertaining to a LIBOR Rate Loan that begins on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of the relevant calendar month;

 

12

 

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

 

(D)                               any
Interest Period in respect of any Loan that would otherwise extend beyond the
applicable Maturity Date; and

 

(E)                                 no
more than six (6) LIBOR Rate Loans may be in effect at any time.  For purposes hereof, LIBOR Rate Loans with
different Interest Periods shall be considered as separate LIBOR Rate Loans,
even if they shall begin on the same date and have the same duration, although
borrowings, extensions and conversions may, in accordance with the provisions
hereof, be combined at the end of existing Interest Periods to constitute a new
LIBOR Rate Loan with a single Interest Period.

 

“Issuing
Lender” shall mean Wachovia.

 

“Issuing
Lender Fees” shall have the meaning set forth in Section 2.6(c).

 

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

 

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

 

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

 

“Letter
of Credit Fee” shall have the meaning set forth in Section 2.6(b).

 

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

 

“LIBOR”
shall mean, for any LIBOR Rate Loan for any Interest Period therefor, either (a) the
rate of interest per annum determined by the Administrative Agent (rounded
upward to the nearest 1/100 of 1%) appearing on the Telerate Page 3750 (or
any successor page) as the London interbank offered rate for deposits in Dollars
at approximately 11:00 A.M. (London time), on the second full Business Day
preceding the first day of such Interest Period, and in an amount approximately
equal to the amount of the LIBOR Rate Loan and for a period approximately equal
to such Interest Period or (b) if such rate is for any reason not
available, the rate per annum equal to the rate at which the Administrative
Agent or its designee is offered deposits in Dollars at or about 11:00 A.M.
(London time), two Business Days prior to the beginning of such Interest Period
in the interbank eurodollar market where the eurodollar and

 

13

 

exchange operations in
respect of its LIBOR Rate Loans are then being conducted for settlement in
immediately available funds, for delivery on the first day of such Interest
Period for the number of days comprised therein, and in an amount comparable to
the amount of the LIBOR Rate Loan to be outstanding during such Interest
Period.

 

“LIBOR
Lending Office” shall mean, initially, the office of each Lender designated
as such Lender’s LIBOR Lending Office shown on Schedule 9.2; and
thereafter, such other office of such Lender as such Lender may from time to
time specify to the Administrative Agent and the Borrower as the office of such
Lender at which the LIBOR Rate Loans of such Lender are to be made.

 

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

 

	
  LIBOR
  Rate =

  	
   

  	
  LIBOR

  	
   

  
	
   

  	
   

  	
  1.00 - Eurodollar Reserve Percentage

  	
   

  

 

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

 

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

 

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

 

“LOC
Commitment” shall mean the commitment of the Issuing Lender to issue
Letters of Credit and with respect to each Lender, the commitment of such
Lender to purchase participation interests in the Letters of Credit up to such
Lender’s LOC Committed Amount as specified in Schedule 2.1(a), as
such amount may be reduced from time to time in accordance with the provisions
hereof.

 

“LOC
Commitment Percentage” shall mean, for each Lender, the percentage
identified as its LOC Commitment Percentage on Schedule 2.1(a), as
such percentage may be modified in connection with any assignment made in
accordance with the provisions of Section 9.6(c).

 

“LOC
Committed Amount” shall mean, collectively, the aggregate amount of all of
the LOC Commitments of the Lenders to issue and participate in Letters of
Credit as referenced in Section 2.4 and, individually, the amount of each
Lender’s LOC Commitment as specified in Schedule 2.1(a).

 

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

 

14

 

“LOC
Obligations” shall mean, at any time, the sum of (i) the maximum
amount which is, or at any time thereafter may become, available to be drawn
under Letters of Credit then outstanding, assuming compliance with all
requirements for drawings referred to in such Letters of Credit plus (ii) the
aggregate amount of all drawings under Letters of Credit honored by the Issuing
Lender but not theretofore reimbursed.

 

“Mandatory
Borrowing” shall have the meaning set forth in Section 2.4(e) or Section 2.5(b)(ii),
as the context may require.

 

“Material
Adverse Effect” shall mean a material adverse effect on (a) the
business, operations, property, condition (financial or otherwise) of the
Borrower and its Subsidiaries taken as a whole, (b) the ability of the
Borrower or any Guarantor to perform its obligations, when such obligations are
required to be performed, under this Agreement, any of the Notes or any other
Credit Document to which it is a party or (c) the validity or
enforceability of this Agreement, any of the Notes or any of the other Credit
Documents or the rights or remedies of the Administrative Agent or the Lenders
hereunder or thereunder.

 

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

 

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

 

“Maturity
Date” shall mean the Revolving Commitment Termination Date.

 

“Moody’s”
shall mean Moody’s Investors Service, Inc.

 

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

 

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

 

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

 

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

 

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

 

15

 

“Notice
of Borrowing” shall mean the written notice of borrowing as referenced and
defined in Section 2.1(b)(i) or 2.5(b)(i), as appropriate.

 

“Notice
of Conversion” shall mean the written notice of extension or conversion as
referenced and defined in Section 2.11.

 

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

 

“OFAC”
shall mean the U.S. Department of the Treasury’s Office of Foreign Assets
Control.

 

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

 

“Participation
Interest” shall mean the purchase by a Lender of a participation interest
in Letters of Credit as provided in Section 2.4.

 

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

 

“Permitted
Investments” shall mean:

 

(i)                                     cash and Cash
Equivalents;

 

(ii)                                  receivables
owing to the Borrower or any of its Subsidiaries or any receivables and
advances to suppliers, in each case if created, acquired or made in the
ordinary course of business and payable or dischargeable in accordance with
customary trade terms;

 

(iii)                               investments
in and loans to any Credit Parties;

 

(iv)                              loans
and advances to officers, directors, employees and Affiliates in an aggregate
amount not to exceed $1,000,000 at any time outstanding;

 

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

 

(vi)                              investments,
acquisitions or transactions permitted under Section 6.5(b);

 

(vii)                           additional
loan advances and/or investments of a nature not contemplated by the foregoing
clauses hereof, provided that such loans, advances and/or investments
made pursuant to this clause (vii) shall not exceed an aggregate amount of
$100,000;

 

(viii)                        investments
existing on the date hereof and set forth on Schedule 1.1(c);

 

16

 

(ix)                                investments
by the Borrower in Hedge Agreements permitted under Section 6.1(e); and

 

(x)                                   investments
consisting of intercompany debt permitted under Section 6.1(d).

 

As
used herein, “investment” shall mean all investments, in cash or by
delivery of property made, directly or indirectly in, to or from any Person,
whether by acquisition of shares of Capital Stock, property, assets,
indebtedness or other obligations or securities or by loan advance, capital
contribution or otherwise.

 

“Permitted
Liens” shall mean:

 

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

 

(ii)                                  Liens
in favor of a Lender hereunder in connection with Hedging Agreements, but only (A) to
the extent such Liens secure obligations under Hedging Agreements with any
Lender, or any Affiliate of a Lender, (B) to the extent such Liens are on
the same collateral as to which the Administrative Agent on behalf of the Lenders
also has a Lien and (C) if such provider and the Lenders shall share pari
passu in the collateral subject to such Liens;

 

(iii)                               purchase
money Liens securing purchase money indebtedness (and refinancings thereof) to
the extent permitted under Section 6.1(c);

 

(iv)                              Liens
for taxes, assessments, charges or other governmental levies not yet due or as
to which the period of grace (not to exceed 60 days), if any, related thereto
has not expired or which are being contested in good faith by appropriate proceedings,
provided that adequate reserves with respect thereto are maintained on
the books of the Borrower or its Subsidiaries, as the case may be, in
conformity with GAAP (or, in the case of Subsidiaries with significant
operations outside of the United States of America, generally accepted
accounting principles in effect from time to time in their respective
jurisdictions of incorporation);

 

(v)                                 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 60 days or which are being contested in good faith by appropriate
proceedings;

 

(vi)                              pledges
or deposits in connection with workers’ compensation, unemployment insurance
and other social security legislation and deposits securing liability to
insurance carriers under insurance or self-insurance arrangements;

 

17

 

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

 

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

 

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

 

(x)                                   Liens
arising in connection with Capitalized Leases to the extent permitted under Section 6.1(c);

 

(xi)                                Liens
on property of a Person existing at the time such Person is acquired, merged
into or consolidated with the Borrower or any Subsidiary of the Borrower so
long as such Liens were not created in contemplation of such acquisition,
merger or consolidation;

 

(xii)                             Liens
set forth in Exhibit B to the real property title reports set forth on Schedule 1.1(b);

 

(xiii)                          any
attachment or judgment Lien the existence of which, individually or in the
aggregate, does not result in an Event of Default under Section 7.1(f);
and

 

(xiv)                         Liens
arising in connection with securing insurance premium financing to the extent
permitted under Section 6.1(h); and

 

(xv)                            other
Liens securing debt outstanding in an aggregate principal amount not to exceed
$500,000.

 

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

 

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

 

18

 

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

 

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

 

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

 

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

 

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

 

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

 

“Reincorporation
Merger” shall have the meaning set forth in Section 6.6

 

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

 

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

 

“Required
Lenders” shall mean, at any time, Lenders which are then in compliance with
their obligations hereunder (as determined by the Administrative Agent) and
holding in the aggregate at least 51% of the Revolving Commitments (and
Participation Interests therein) or if the Commitments have been terminated,
the outstanding Revolving Loans and Participation Interests (including the
Participation Interests of the Issuing Lender in any Letters of Credit and of
the Swingline Lender in any Swingline Loans), with a minimum of two Lenders
required in any case.

 

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

 

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

 

“Restricted
Payment” shall mean (a) any dividend or other distribution, direct or
indirect, on account of any shares of any class of Capital Stock of the Borrower
or any of its Subsidiaries,

 

19

 

now or hereafter
outstanding, (b) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect, of any
shares of any class of Capital Stock of the Borrower or any of its Subsidiaries,
now or hereafter outstanding or (c) any payment made to retire, or to
obtain the surrender of, any outstanding warrants, options or other rights to
acquire shares of any class of Capital Stock of the Borrower or any of its
Subsidiaries, now or hereafter outstanding.

 

“Revolving
Commitment” shall mean, with respect to each Lender, the commitment of such
Lender to make Revolving Loans in an aggregate principal amount at any time
outstanding up to such Lender’s Revolving Committed Amount as specified in Schedule 2.1(a),
as such amount may be reduced from time to time in accordance with the
provisions hereof.

 

“Revolving
Commitment Percentage” shall mean, for each Lender, the percentage identified
as its Revolving Commitment Percentage on Schedule 2.1(a), as such
percentage may be modified in connection with any assignment made in accordance
with the provisions of Section 9.6(c).

 

“Revolving
Commitment Termination Date” shall mean July 15, 2008.

 

“Revolving
Committed Amount” shall mean, collectively, the aggregate amount of all
Revolving Commitments as referenced in Section 2.1(a), as such amount may
be reduced from time to time in accordance with the provisions hereof, and,
individually, the amount of each Lender’s Revolving Commitment as specified on Schedule 2.1(a).

 

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

 

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

 

“S&P”
shall mean Standard & Poor’s Ratings Group, a division of McGraw Hill, Inc.

 

“Sanctioned
Country” shall mean a country subject to a sanctions program identified on
the list maintained by OFAC and available at http://www.treas.gov/offices/eotffc/ofac/sanctions/index.html,
or as otherwise published from time to time.

 

“Sanctioned
Person” shall mean (i) a person named on the list of Specially
Designated Nationals or Blocked Persons maintained by OFAC available at http://www.treas.gov/offices/eotffc/ofac/sdn/index.html,
or as otherwise published from time to time, or (ii) (A) an agency of
the government of a Sanctioned Country, (B) an organization controlled by
a Sanctioned Country, or (C) a person resident in a Sanctioned Country.

 

“Scheduled
Funded Debt Payments” shall mean, as of any date of determination for the
Borrower and its Subsidiaries, the sum of all scheduled payments of principal
on Funded Debt for the applied period ending on the date of determination
(including the principal component of payments due on Capital Leases during the
applicable period ending on the date of determination).

 

20

 

“Security
Agreement” shall mean the Amended and Restated Security Agreement dated as
of the Closing Date given by the Borrower and the other Credit Parties to the
Administrative Agent, as amended, modified or supplemented from time to time in
accordance with its terms.

 

“Security
Documents” shall mean the Security Agreement, the Pledge Agreement, the
Mortgage Instruments and such other documents executed and delivered in
connection with the attachment and perfection of the Administrative Agent’s
security interests and liens arising thereunder, including, without limitation,
UCC financing statements.

 

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

 

“Specified
Sales” shall mean (a) the sale, transfer, lease or other disposition
of inventory and materials in the ordinary course of business and (b) the
sale, transfer or other disposition of Permitted Investments described in
clause (i) of the definition thereof.

 

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

 

“Swingline
Commitment” shall mean the commitment of the Swingline Lender to make
Swingline Loans in an aggregate principal amount at any time outstanding up to
the Swingline Committed Amount, and the commitment of the Lenders to purchase
participation interests in the Swingline Loans as provided in Section 2.5(b)(ii),
as such amounts may be reduced from time to time in accordance with the
provisions hereof.

 

“Swingline
Committed Amount” shall mean the amount of the Swingline Lender’s Swingline
Commitment as specified in Section 2.5(a).

 

“Swingline
Lender” shall mean Wachovia, in its capacity as such.

 

“Swingline
Loan” or “Swingline Loans” shall have the meaning set forth in Section 2.5(a).

 

“Swingline
Note” shall mean the promissory note of the Borrower in favor of the
Swingline Lender evidencing the Swingline Loans provided pursuant to Section 2.5(d),
as such promissory note may be amended, modified, supplemented, extended,
renewed or replaced from time to time.

 

21

 

“Taxes”
shall have the meaning set forth in Section 2.19.

 

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

 

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

 

“2.19
Certificate” shall have the meaning set forth in Section 2.19.

 

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

 

“Unused
Revolving Commitment” shall mean, as of any day, the amount by which (i) the
Revolving Committed Amount exceeds (ii) the sum of the aggregate amount of
outstanding Revolving Loans, Swingline Loans and LOC Obligations.

 

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

 

“Wachovia”
shall mean Wachovia Bank, National Association, a national banking association.

 

Section 1.2                                   Other
Definitional Provisions.

 

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

 

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

 

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

 

22

 

Section 1.3                                   Accounting
Terms.

 

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

 

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

 

Notwithstanding
the above, the parties hereto acknowledge and agree that, for purposes of all
calculations made in determining compliance for any applicable period with the
financial covenants set forth in Section 5.9 (including without limitation
for purposes of the definition of “Applicable Percentage” set forth in Section 1.1),
after consummation of any Acquisition (A) income statement
items (whether positive or negative) and capital expenditures attributable
to the Person or property acquired shall, to the extent not otherwise included
in such income statement items for the Borrower and its Subsidiaries on a
consolidated basis in accordance with GAAP or in accordance with any defined
terms set forth in Section 1.1, be included to the extent relating to any
period applicable in such calculations; (B) to the extent not retired in
connection with such Acquisition, Indebtedness of the Person or property
acquired shall be deemed to have been incurred as of the first day of the
applicable period and (C) pro forma adjustments may be included to the
extent that such adjustments would give effect to items that are (1) directly
attributable to such transaction, (2) expected to have a continuing impact
on the Borrower and its Subsidiaries on a consolidated basis and (3) factually
supportable.

 

23

 

ARTICLE II

 

THE LOANS; AMOUNT AND TERMS

 

Section 2.1                                   Revolving
Loans.

 

(a)                                  Revolving
Commitment.  During the Commitment
Period, subject to the terms and conditions hereof, each Lender severally
agrees to make revolving credit loans (“Revolving Loans”) to the
Borrower from time to time for the purposes hereinafter set forth; provided,
however, that (i) with regard to each Lender individually, the sum
of such Lender’s share of outstanding Revolving Loans plus such Lender’s
Revolving Commitment Percentage of Swingline Loans plus such Lender’s
LOC Commitment Percentage of LOC Obligations shall not exceed such Lender’s
Revolving Commitment Percentage of the aggregate Revolving Committed Amount,
and (ii) with regard to the Lenders collectively, the sum of the aggregate
amount of outstanding Revolving Loans plus Swingline Loans plus
LOC Obligations shall not exceed the Revolving Committed Amount.  For purposes hereof, the aggregate amount
available hereunder shall be TWENTY FIVE MILLION DOLLARS
($25,000,000) (as such aggregate maximum amount may be reduced from
time to time as provided in Section 2.7, the “Revolving Committed
Amount”).  Revolving Loans may
consist of Alternate Base Rate Loans or LIBOR Rate Loans, or a combination
thereof, as the Borrower may request, and may be repaid and reborrowed in
accordance with the provisions hereof.

 

(b)                                 Revolving
Loan Borrowings.

 

(i)                                     Notice
of Borrowing.  The Borrower shall
request a Revolving Loan borrowing by written notice (or telephone notice
promptly confirmed in writing which confirmation may be by fax) to the
Administrative Agent not later than 1:00 P.M. (Charlotte, North Carolina
time) on the Business Day prior to the date of requested borrowing in the case
of Alternate Base Rate Loans, and on the third Business Day prior to the date of
the requested borrowing in the case of LIBOR Rate Loans.  Each such request for borrowing shall be
irrevocable and shall specify (A) that a Revolving Loan is requested, (B) the
date of the requested borrowing (which shall be a Business Day), (C) the
aggregate principal amount to be borrowed, (D) whether the borrowing shall
be comprised of Alternate Base Rate Loans, LIBOR Rate Loans or a combination
thereof, and if LIBOR Rate Loans are requested, the Interest Period(s)
therefor.  A form of Notice of Borrowing
(a “Notice of Borrowing”) is attached as Schedule 2.1(b)(i).  If the Borrower shall fail to specify in any
such Notice of Borrowing (I) an applicable Interest Period in the case of a
LIBOR Rate Loan, then such notice shall be deemed to be a request for an
Interest Period of one month, or (II) the type of Revolving Loan requested,
then such notice shall be deemed to be a request for an Alternate Base Rate
Loan hereunder.  The Administrative Agent
shall give notice to each Lender promptly upon receipt of each Notice of
Borrowing, the contents thereof and each such Lender’s share thereof.

 

24

 

(ii)                                  Minimum
Amounts.  Each Revolving Loan
borrowing shall be in a minimum aggregate amount of (A) with respect to
LIBOR Rate Loans, $2,000,000 and integral multiples of $500,000 in excess
thereof (or the remaining amount of the Revolving Committed Amount, if less)
and (B) with respect to Alternate Base Rate Loans, $500,000 and integral
multiples of $100,000 in excess thereof (or the remaining amount of the
Revolving Committed Amount, if less).

 

(iii)                               Advances.  Each Lender will make its Revolving
Commitment Percentage of each Revolving Loan borrowing available to the
Administrative Agent for the account of the Borrower at the office of the
Administrative Agent specified in Schedule 9.2, or at such other
office as the Administrative Agent may designate in writing, by 3:00 P.M.
(Charlotte, North Carolina time) on the date specified in the applicable Notice
of Borrowing in Dollars and in funds immediately available to the
Administrative Agent.  Such borrowing
will then be made available to the Borrower by the Administrative Agent by
crediting the account of the Borrower on the books of such office with the
aggregate of the amounts made available to the Administrative Agent by the
Lenders and in like funds as received by the Administrative Agent.

 

(c)                                  Repayment.  The principal amount of all Revolving Loans
shall be due and payable in full on the Revolving Commitment Termination Date.

 

(d)                                 Interest.  Subject to the provisions of Section 2.10,
Revolving Loans shall bear interest as follows:

 

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

 

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

 

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

 

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

 

Section 2.2                                   Increase
Option.

 

(a)                                  Request
for Increase.  Provided there exists
no Default or Event of Default, upon notice to the Lenders, the Borrower may,
on a one-time basis, request an increase in the Revolving Committed Amount by
up to the aggregate principal amount of $25,000,000;

 

25

 

provided
that any such request for an increase shall be in a minimum amount of
$5,000,000 and integral multiples of $1,000,000 in excess thereof; provided
further that with respect to any such increase, the Borrower shall first
request such increase from the Lenders and, in the event that the Lenders elect
not to provide the full amount of such requested increase, then the Borrower
shall have the right to solicit, and the Lenders shall cooperate with respect
thereto, other banks, financial institutions or investment funds, in each case
in accordance with the terms set forth in this Section 2.2, in connection
with such increase.  At the time of
sending such notice, the Borrower shall specify the time period within which
each Lender is requested to respond (which shall in no event be less than
twenty (20) Business Days from the date of delivery of such notice to the
Lenders).

 

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

 

(c)                                  Effective
Date and Allocations.  If the
Revolving Committed Amount is increased in accordance with this Section, the
Administrative Agent and the Borrower shall determine the effective date (the “Increase
Effective Date”) and the final allocation of such increase.  The Administrative Agent shall promptly
notify the Borrower and the Lenders of the final allocation of such increase
and the Increase Effective Date.

 

(d)                                 Conditions
to Effectiveness of Increase.  As a
condition precedent to such increase, the Borrower shall deliver to the Lenders
(x) a certificate of each Credit Party dated as of the Increase Effective Date
signed by a Responsible Officer of such Credit Party (i) certifying and
attaching the resolutions adopted by such Credit 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 III hereof and the other Credit
Documents are true and correct in all material respects (other than such
representations and warranties which have a materiality qualifier contained
therein, in which case such representations and warranties shall be 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 2.2, the representations and warranties
contained in Section 3.1 shall be deemed to refer to the most recent
statements furnished pursuant to Section 5.1, and (B) no Default or
Event of Default then exists and (y) an opinion or opinions of legal counsel
for the Borrower, dated as of the Increase Effective Date and addressed to the
Administrative Agent and the Lenders, in form and substance reasonably
acceptable to the Lenders.  The Borrower
shall prepay any Loans outstanding on the Increase Effective Date to the extent
necessary to keep the outstanding Loans ratable with any revised applicable
Commitment Percentages arising from any nonratable increase in the Commitments
under this Section.

 

(e)                                  Conflicting
Provisions.  This Section shall
supersede any provisions in Sections 2.13 or 9.1 to the contrary.

 

26

 

Section 2.3                                   Intentionally
Omitted.

 

Section 2.4                                   Letter
of Credit Subfacility.

 

(a)                                  Issuance.  Subject to the terms and conditions hereof
and of the LOC Documents, if any, and any other terms and conditions which the
Issuing Lender may reasonably require, during the Commitment Period the Issuing
Lender shall issue, and the Lenders shall participate in, Letters of Credit for
the account of the Borrower from time to time upon request in a form acceptable
to the Issuing Lender; provided, however, that (i) the
aggregate amount of LOC Obligations shall not at any time exceed FIVE MILLION DOLLARS ($5,000,000) (the “LOC Committed
Amount”), (ii) the sum of the aggregate amount of Revolving Loans plus
Swingline Loans plus LOC Obligations shall not at any time exceed the
Revolving Committed Amount, (iii) all Letters of Credit shall be denominated
in U.S. Dollars, (iv) no Letter of Credit shall be issued if the Issuing
Lender has received written notice from any Lender or the Administrative Agent,
at least one Business Day prior to the requested date of issuance of the
applicable Letter of Credit, that one or more applicable conditions contained
in Section 4.2 have not been satisfied, and (v) Letters of Credit
shall be issued for the purpose of supporting tax-advantaged variable rate
demand note financing and for other lawful corporate purposes and may be issued
as standby letters of credit, including in connection with workers’ compensation
and other insurance programs, and trade letters of credit.  Except as otherwise expressly agreed upon by
all the Lenders, no Letter of Credit 
shall have an original expiry date more than twelve (12) months from the
date of issuance; provided, however, so long as no Default or
Event of Default has occurred and is continuing and subject to the other terms
and conditions to the issuance of Letters of Credit hereunder, the expiry dates
of Letters of Credit may be extended annually or periodically from time to time
on the request of the Borrower or by operation of the terms of the applicable
Letter of Credit to a date not more than twelve (12) months from the date of
extension; provided, further, that no Letter of Credit, as
originally issued or as extended, shall have an expiry date extending beyond
the Revolving Commitment Termination Date unless the Borrower shall, at the
time of issuance and until the expiry thereof, cash collateralize such Letter
of Credit.  For purposes hereof, “cash
collateralize” means to pledge and deposit with or deliver to the
Administrative Agent, for the benefit of the Issuing Lender and the Lenders
holding Revolving Commitments, as collateral for the LOC Obligations, cash or
deposit account balances pursuant to documentation in form and substance
satisfactory to the Administrative Agent and the Issuing Lender (which
documents are hereby consented to by the Lenders holding Revolving
Commitments).  The Borrower hereby grants
to the Administrative Agent, for the benefit of the Issuing Lender and the
Lenders holding Revolving Commitments, 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 with the
Administrative Agent. Each Letter of Credit shall comply with the related LOC
Documents.  The issuance and expiry date
of each Letter of Credit shall be a Business Day.  Any Letters of Credit issued hereunder shall
be in a minimum original face amount of $50,000.  Wachovia shall be the Issuing Lender on all
Letters of Credit issued after the Closing Date.

 

(b)                                 Notice
and Reports.  The request for the
issuance of a Letter of Credit shall be submitted to the Issuing Lender at
least five (5) Business Days prior to the requested date of issuance.  The Issuing Lender will promptly upon request
provide to the Administrative Agent

 

27

 

for dissemination to the
Lenders a detailed report specifying the Letters of Credit which are then
issued and outstanding and any activity with respect thereto which may have
occurred since the date of any prior report, and including therein, among other
things, the account party, the beneficiary, the face amount, expiry date as
well as any payments or expirations which may have occurred.  The Issuing Lender will further provide to
the Administrative Agent promptly upon request copies of the Letters of Credit.  The Issuing Lender will provide to the
Administrative Agent promptly upon request a summary report of the nature and
extent of LOC Obligations then outstanding.

 

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

 

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

 

28

 

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

 

(e)                                  Repayment
with Revolving Loans.  On any day on
which the Borrower shall have requested, or been deemed to have requested (i) a
Swingline Loan borrowing to reimburse a drawing under a Letter of Credit, the
Swingline Lender shall make the Swingline Loan advance pursuant to the terms of
the request or deemed request in accordance with the provisions for Swingline
Loan advances hereunder or (ii) a Revolving Loan to reimburse a drawing
under a Letter of Credit, the Administrative Agent shall give notice to the
Lenders that a Revolving Loan has been requested or deemed requested in
connection with a drawing under a Letter of Credit, in which case a Revolving
Loan borrowing comprised entirely of Alternate Base Rate Loans (each such
borrowing, a “Mandatory Borrowing”) shall be immediately made (without
giving effect to any termination of the Commitments pursuant to Section 7.2)
pro  rata based on each Lender’s respective Revolving Commitment
Percentage (determined before giving effect to any termination of the
Commitments pursuant to Section 7.2) and in the case of both clauses (i) and
(ii) the proceeds thereof shall be paid directly to the Issuing Lender for
application to the respective LOC Obligations. 
Each Lender hereby irrevocably agrees to make such Revolving Loans
immediately upon any such request or deemed request on account of each
Mandatory Borrowing in the amount and in the manner specified in the preceding
sentence and on the same such date notwithstanding (i) the amount
of Mandatory Borrowing may not comply with the minimum amount for borrowings of
Revolving Loans otherwise required hereunder, (ii) whether any conditions
specified in Section 4.2 are then satisfied, (iii) whether a Default
or an Event of Default then exists, (iv) failure for any such request or
deemed request for Revolving Loan to be made by the time otherwise required in Section 2.1(b),
(v) the date of such Mandatory Borrowing, or (vi) any reduction in
the Revolving Committed Amount after any such Letter of Credit may have been
drawn upon; provided, however, that in the event any such
Mandatory Borrowing should be less than the minimum amount for borrowings of
Revolving Loans otherwise provided in Section 2.1(b)(ii), the Borrower
shall pay to the Administrative Agent for its own account an administrative fee
of $500.  In the event that any Mandatory
Borrowing cannot for any reason be made on the date otherwise required above
(including, without limitation, as a result of the commencement of a proceeding
under the Bankruptcy Code), then

 

29

 

each such Lender hereby
agrees that it shall forthwith fund (as of the date the Mandatory Borrowing
would otherwise have occurred, but adjusted for any payments received from the
Borrower on or after such date and prior to such purchase) its Participation
Interests in the outstanding LOC Obligations; provided, further,
that in the event any Lender shall fail to fund its Participation Interest on
the day the Mandatory Borrowing would otherwise have occurred, then the amount
of such Lender’s unfunded Participation Interest therein shall bear interest
payable by such Lender to the Issuing Lender upon demand, at the rate equal to,
if paid within two (2) Business Days of such date, the Federal Funds
Effective Rate, and thereafter at a rate equal to the Alternate Base Rate.

 

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

 

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

 

Section 2.5                                   Swingline
Loan Subfacility.

 

(a)                                  Swingline
Commitment.  During the Commitment
Period, subject to the terms and conditions hereof, the Swingline Lender, in
its individual capacity, agrees to make certain revolving credit loans to the
Borrower (each a “Swingline Loan” and, collectively, the “Swingline
Loans”) for the purposes hereinafter set forth; provided, however,
(i) the aggregate amount of Swingline Loans outstanding at any time shall
not exceed FIVE MILLION DOLLARS ($5,000,000) (the
“Swingline Committed Amount”), (ii) the sum of the aggregate amount
of outstanding Revolving Loans plus Swingline Loans plus LOC
Obligations shall not exceed the Revolving Committed Amount and (iii) no
Swingline Loan shall be made if the Swingline Lender has received written
notice from any Lender or the Administrative Agent that one or more applicable
conditions contained in Section 4.2 have not been satisfied.  Swingline Loans hereunder may be repaid and
reborrowed in accordance with the provisions hereof.

 

(b)                                 Swingline
Loan Borrowings.

 

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

 

30

 

(ii)                                  Repayment
of Swingline Loans.  Each Swingline
Loan borrowing shall be due and payable on the Revolving Commitment Termination
Date.  The Swingline Lender may, at any
time, in its sole discretion, by written notice to the Borrower and the
Administrative Agent, demand repayment of its Swingline Loans by way of a
Revolving Loan borrowing, in which case the Borrower shall be deemed to have
requested a Revolving Loan borrowing comprised entirely of Alternate Base Rate
Loans in the amount of such Swingline Loans; provided, however,
that, in the following circumstances, any such demand shall also be deemed to
have been given one Business Day prior to each of (i) the Revolving
Commitment Termination Date, (ii) the occurrence of any Event of Default
described in Section 7.1(e), (iii) upon acceleration of the Credit
Party Obligations hereunder, whether on account of an Event of Default
described in Section 7.1(e) or any other Event of Default, and (iv) the
exercise of remedies in accordance with the provisions of Section 7.2
hereof (each such Revolving Loan borrowing made on account of any such deemed
request therefor as provided herein being hereinafter referred to as “Mandatory
Borrowing”).  Each Lender hereby
irrevocably agrees to make such Revolving Loans promptly upon any such request
or deemed request on account of each Mandatory Borrowing in the amount and in
the manner specified in the preceding sentence and on the same such date notwithstanding
(I) the amount of Mandatory Borrowing may not comply with the minimum amount
for borrowings of Revolving Loans otherwise required hereunder, (II) whether
any conditions specified in Section 4.2 are then satisfied, (III) whether
a Default or an Event of Default then exists, (IV) failure of any such request
or deemed request for Revolving Loans to be made by the time otherwise required
in Section 2.1(b)(i), (V) the date of such Mandatory Borrowing, or (VI)
any reduction in the Revolving Committed Amount or termination of the Revolving
Commitments immediately prior to such Mandatory Borrowing or Contemporaneously
therewith.  In the event that any
Mandatory Borrowing cannot for any reason be made on the date otherwise required
above (including, without limitation, as a result of the commencement of a
proceeding under the Bankruptcy Code), then each Lender hereby agrees that it
shall forthwith purchase (as of the date the Mandatory Borrowing would
otherwise have occurred, but adjusted for any payments received from the
Borrower on or after such date and prior to such purchase) from  the Swingline Lender such participations in
the outstanding Swingline Loans as shall be necessary to cause each such Lender
to share in such Swingline Loans ratably based upon its respective Revolving
Commitment Percentage (determined before giving effect to any termination of
the Commitments pursuant to Section 7.2); provided that (A) all
interest payable on the Swingline Loans shall be for the account of the
Swingline Lender until the date as of which the respective participation is
purchased, and (B) at the time any purchase of participations pursuant to
this sentence is actually made, the purchasing Lender shall be required to pay
to the Swingline Lender interest on the principal amount of such participation
purchased for each day from and including the day upon which the Mandatory
Borrowing would otherwise have occurred to but excluding the date of payment
for such participation, at the rate equal to, if paid within two (2) Business
Days of the date of the Mandatory Borrowing, the Federal Funds Effective Rate,
and thereafter at a rate equal to the Alternate Base Rate.

 

31

 

(c)                                  Interest
on Swingline Loans.  Subject to the
provisions of Section 2.10, Swingline Loans shall bear interest at a per
annum rate equal to the Alternate Base Rate plus the applicable
Percentage for Revolving Loans that are Alternate Base Rate Loans.  Interest on Swingline Loans shall be payable
in arrears on each Interest Payment Date.

 

(d)                                 Swingline
Note.  The Swingline Loans shall be
evidenced by a duly executed promissory note of the Borrower to the Swingline
Lender in the original amount of the Swingline Committed Amount and substantially
in the form of Schedule 2.5(d).

 

Section 2.6                                   Fees.

 

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

 

(b)                                 Letter
of Credit Fees.  In consideration of
the LOC Commitments, the Borrower agrees to pay to the Issuing Lender a fee
(the “Letter of Credit Fee”) equal to the Applicable Percentage per
annum on the average daily maximum amount available to be drawn under each
Letter of Credit from the date of issuance to the date of expiration.  In addition to such Letter of Credit Fee, the
Issuing Lender may charge, and retain for its own account without sharing by
the other Lenders, an additional facing fee of one-fourth of one percent (1⁄4%)
per annum on the average daily maximum amount available to be drawn under each
such Letter of Credit issued by it.  The
Issuing Lender shall promptly pay over to the Administrative Agent for the
ratable benefit of the Lenders (including the Issuing Lender) the Letter of Credit
Fee.  The Letter of Credit Fee shall be
payable quarterly in arrears on the 15th day following the last day of each
calendar quarter for the prior calendar quarter.

 

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

 

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

 

Section 2.7                                   Commitment
Reductions.

 

(a)                                  Voluntary
Reductions.  The Borrower shall have
the right to terminate or permanently reduce the unused portion of the
Revolving Committed Amount at any time or from

 

32

 

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

 

(b)                                 Mandatory
Reductions.  On any date that the
Revolving Loans are required to be prepaid pursuant to the terms of Section 2.8(b) (ii),
(iii) and (iv), the Revolving Committed Amount shall be automatically
permanently reduced by the amount of such required prepayment and/or reduction.

 

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

 

Section 2.8                                   Prepayments.

 

(a)                                  Optional
Prepayments.  The Borrower shall have
the right to prepay Loans in whole or in part from time to time; provided,
however, that each partial prepayment of Revolving Loans shall be in a
minimum principal amount of $1,000,000 and
integral multiples of $500,000 in excess thereof, and each prepayment of
Swingline Loans shall be in a minimum principal amount of $100,000 and integral
multiples of $100,000 in excess thereof. 
The Borrower shall give three Business Days’ irrevocable notice in the
case of LIBOR Rate Loans and one Business Day’s irrevocable notice in the case
of Alternate Base Rate Loans, to the Administrative Agent (which shall notify
the Lenders thereof as soon as practicable). 
Amounts prepaid under this Section 2.8(a) shall be applied to
the Revolving Loans or Swingline Loans, as applicable, first to Alternate Base
Rate Loans and then to LIBOR Rate Loans in direct order of Interest Period
maturities.  All prepayments under this Section 2.8(a) shall
be subject to Section 2.18, but otherwise without premium or penalty.  Interest on the principal amount prepaid
shall be payable on the next occurring Interest Payment Date that would have
occurred had such loan not been prepaid or, at the request of the
Administrative Agent, interest on the principal amount prepaid shall be payable
on any date that a prepayment is made hereunder through the date of
prepayment.  Amounts prepaid on the
Revolving Loans may be reborrowed in accordance with the terms hereof.

 

(b)                                 Mandatory
Prepayments.

 

(i)                                     Revolving
Committed Amount.  If at any time
after the Closing Date, the sum of the aggregate principal amount of
outstanding Revolving Loans plus Swingline Loans plus LOC
Obligations shall exceed the Revolving Committed Amount, the Borrower
immediately shall prepay the Revolving Loans and (after all Revolving Loans
have been repaid) cash collateralize the LOC Obligations, in an amount
sufficient to eliminate such excess.

 

33

 

(ii)                                  Recovery
Event.  To the extent of cash
proceeds received in connection with a Recovery Event which are in excess of
$250,000 in the aggregate and which are not
applied in accordance with Section 6.5(a)(ii), within 180 days after the
receipt by a Credit Party of such cash proceeds, the Borrower shall prepay the
Loans in an aggregate amount equal to one-hundred percent (100%) of such cash
proceeds to the Lenders (such prepayment to be applied as set forth in clause (iii) below).

 

(iii)                               Application
of Mandatory Prepayments.  All
amounts required to be paid pursuant to this Section 2.8(b) shall be
applied to Revolving Loans and (after all Revolving Loans have been repaid) to
a cash collateral account in respect of LOC Obligations.  Within the parameters of the applications set
forth above, prepayments shall be applied first to Alternate Base Rate Loans
and then to LIBOR Rate Loans in direct order of Interest Period
maturities.  All prepayments under this Section 2.8(b) shall
be subject to Section 2.18 and be accompanied by interest on the principal
amount prepaid through the date of prepayment.

 

Section 2.9                                   Minimum
Principal Amount of Tranches.

 

All
borrowings, payments and prepayments in respect of Revolving Loans shall be in
such amounts and be made pursuant to such elections so that after giving effect
thereto the aggregate principal amount of the Revolving Loans comprising any
Tranche shall not be less than (i) with respect to LIBOR Rate Loans,
$1,000,000 or a whole multiple of $500,000 in excess thereof and (ii) with
respect to Base Rate Loans, $500,000 in the aggregate or a whole multiple of
$100,000 in excess thereof.

 

Section 2.10                            Default
Rate and Payment Dates.

 

Upon
the occurrence, and during the continuance, of an Event of Default, the
principal of and, to the extent permitted by law, interest on the Loans and any
other amounts owing hereunder or under the other Credit Documents shall bear
interest, payable on demand, at a per annum rate 2% greater than the rate which
would otherwise be applicable (or if no rate is applicable, whether in respect
of interest, fees or other amounts, then the Alternate Base Rate plus
2%).

 

Section 2.11                            Conversion
Options.

 

(a)                                  The
Borrower may, in the case of Revolving Loans, elect from time to time to
convert Alternate Base Rate Loans to LIBOR Rate Loans, by giving the
Administrative Agent at least three Business Days’ prior irrevocable written
notice of such election.  A form of
Notice of Conversion/ Extension is attached as Schedule 2.11.  If the date upon which an Alternate Base Rate
Loan is to be converted to a LIBOR Rate Loan is not a Business Day, then such
conversion shall be made on the next succeeding Business Day and during the
period from such last day of

 

34

 

an Interest Period to
such succeeding Business Day such Loan shall bear interest as if it were an
Alternate Base Rate Loan.  All or any
part of outstanding Alternate Base Rate Loans may be converted as provided
herein, provided that (i) no Loan may be converted into a LIBOR
Rate Loan when any Default or Event of Default has occurred and is continuing
and (ii) partial conversions shall be in an aggregate principal amount of
$400,000 or a whole multiple of $100,000 in excess thereof.

 

(b)                                 Any
LIBOR Rate Loans may be continued as such upon the expiration of an Interest
Period with respect thereto by compliance by the Borrower with the notice
provisions contained in Section 2.11(a); provided, that no LIBOR
Rate Loan may be continued as such when any Default or Event of Default has
occurred and is continuing, in which case such Loan shall be automatically
converted to an Alternate Base Rate Loan at the end of the applicable Interest
Period with respect thereto.  If the
Borrower shall fail to give timely notice of an election to continue a LIBOR
Rate Loan, or the continuation of LIBOR Rate Loans is not permitted hereunder,
such LIBOR Rate Loans shall be automatically converted to Alternate Base Rate
Loans at the end of the applicable Interest Period with respect thereto.

 

Section 2.12                            Computation
of Interest and Fees.

 

(a)                                  Interest
payable hereunder with respect to Alternate Base Rate Loans shall be calculated
on the basis of a year of 365 days (or 366 days, as applicable) for the actual
days elapsed.  All other fees, interest
and all other amounts payable hereunder shall be calculated on the basis of a
360 day year for the actual days elapsed. 
The Administrative Agent shall as soon as practicable notify the
Borrower and the Lenders of each determination of a LIBOR Rate on the Business
Day of the determination thereof.  Any
change in the interest rate on a Loan resulting from a change in the Alternate
Base Rate shall become effective as of the opening of business on the day on
which such change in the Alternate Base Rate shall become effective.  The Administrative Agent shall as soon as
practicable notify the Borrower and the Lenders of the effective date and the
amount of each such change.

 

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

 

Section 2.13                            Pro
Rata Treatment and Payments.

 

(a)                                  Each
borrowing of Revolving Loans and any reduction of the Revolving Commitments
shall be made pro  rata according to the respective Commitment
Percentages of the Lenders.  Each payment
under this Agreement or any Note shall be applied, first, to any fees then due
and owing by the Borrower pursuant to Section 2.6, second, to interest
then due and owing in respect of the Notes of the Borrower and, third, to
principal then due and owing hereunder and under the Notes of the
Borrower.  Each payment on account of any
fees pursuant to Section 2.6 shall be made pro  rata in
accordance with the respective amounts due and owing (except as to the portion
of the Letter of Credit retained by the Issuing Lender and the Issuing Lender
Fees).  Each

 

35

 

payment (other than
prepayments) by the Borrower on account of principal of and interest on the
Revolving Loans shall be made pro  rata according to the
respective amounts due and owing in accordance with Section 2.8 hereof.
Prepayments made pursuant to Section 2.16 shall be applied in accordance
with such section.  Each mandatory
prepayment on account of principal of the Loans shall be applied in accordance
with Section 2.8(b).  All payments
(including prepayments) to be made by the Borrower on account of principal,
interest and fees shall be made without defense, set-off or counterclaim (except
as provided in Section 2.19(b)) and shall be made to the Administrative
Agent for the account of the Lenders at the Administrative Agent’s office
specified on Schedule 9.2 in Dollars and in immediately available
funds not later than 2:00 P.M. (Charlotte, North Carolina time) on the
date when due.  The Administrative Agent
shall distribute such payments to the Lenders entitled thereto promptly upon
receipt in like funds as received.  If
any payment hereunder (other than payments on the LIBOR Rate Loans) becomes due
and payable on a day other than a Business Day, such payment shall be extended
to the next succeeding Business Day, and, with respect to payments of
principal, interest thereon shall be payable at the then applicable rate during
such extension.  If any payment on a
LIBOR Rate Loan becomes due and payable on a day other than a Business Day, the
maturity thereof shall be extended to the next succeeding Business Day unless
the result of such extension would be to extend such payment into another calendar
month, in which event such payment shall be made on the immediately preceding
Business Day.

 

(b)                                 Allocation
of Payments After Event of Default. 
Notwithstanding any other provisions of this Agreement to the contrary,
after the occurrence and during the continuance of an Event of Default, all
amounts collected or received by the Administrative Agent or any Lender on
account of the Credit Party Obligations or any other amounts outstanding under
any of the Credit Documents or in respect of the Collateral shall be paid over
or delivered as follows:

 

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

 

SECOND, to payment of any fees owed to the
Administrative Agent;

 

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

 

FOURTH, to the payment of all of the Credit Party
Obligations consisting of accrued fees and interest;

 

FIFTH, to the payment of the outstanding principal
amount of the Credit Party Obligations (including the payment or cash
collateralization of the outstanding LOC Obligations);

 

36

 

SIXTH, to all other Credit Party Obligations and other
obligations which shall have become due and payable under the Credit Documents
or otherwise and not repaid pursuant to clauses “FIRST” through “FIFTH” above;
and

 

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

 

In
carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (ii) each of the Lenders shall receive an amount
equal to its pro rata share (based on the proportion that the then outstanding
Loans and LOC Obligations held by such Lender bears to the aggregate then
outstanding Loans and LOC Obligations) of amounts available to be applied
pursuant to clauses “THIRD”, “FOURTH”, “FIFTH” and “SIXTH” above; and (iii) to
the extent that any amounts available for distribution pursuant to clause “FIFTH”
above are attributable to the issued but undrawn amount of outstanding Letters
of Credit, such amounts shall be held by the Administrative Agent in a cash
collateral account and applied (A) first, to reimburse the Issuing Lender
from time to time for any drawings under such Letters of Credit and (B) then,
following the expiration of all Letters of Credit, to all other obligations of
the types described in clauses “FIFTH” and “SIXTH” above in the manner provided
in this Section 2.13(b).

 

Section 2.14                            Non-Receipt
of Funds by the Administrative Agent.

 

(a)                                  Unless
the Administrative Agent shall have been notified in writing by a Lender prior
to the date a Loan is to be made by such Lender (which notice shall be
effective upon receipt) that such Lender does not intend to make the proceeds
of such Loan available to the Administrative Agent, the Administrative Agent
may assume that such Lender has made such proceeds available to the
Administrative Agent on such date, and the Administrative Agent may in reliance
upon such assumption (but shall not be required to) make available to the
Borrower a corresponding amount.  If such
corresponding amount is not in fact made available to the Administrative Agent,
the Administrative Agent shall be able to recover such corresponding amount
from such Lender.  If such Lender does
not pay such corresponding amount forthwith upon the Administrative Agent’s
demand therefor, the Administrative Agent will promptly notify the Borrower,
and the Borrower shall immediately pay such corresponding amount to the
Administrative Agent.  The Administrative
Agent shall also be entitled to recover from the Lender or the Borrower, as the
case may be, interest on such corresponding amount in respect of each day from
the date such corresponding amount was made available by the Administrative
Agent to the Borrower to the date such corresponding amount is recovered by the
Administrative Agent at a per annum rate equal to (i) from the Borrower at
the applicable rate for the applicable borrowing pursuant to the Notice of
Borrowing and (ii) from a Lender at the Federal Funds Effective Rate.

 

(b)                                 Unless
the Administrative Agent shall have been notified in writing by the Borrower,
prior to the date on which any payment is due from it hereunder (which notice
shall be effective upon receipt) that the Borrower does not intend to make such
payment, the Administrative Agent may assume that such Borrower has made such
payment when due, and

 

37

 

the Administrative Agent
may in reliance upon such assumption (but shall not be required to) make
available to each Lender on such payment date an amount equal to the portion of
such assumed payment to which such Lender is entitled hereunder, and if the
Borrower has not in fact made such payment to the Administrative Agent, such
Lender shall, on demand, repay to the Administrative Agent the amount made
available to such Lender.  If such amount
is repaid to the Administrative Agent on a date after the date such amount was
made available to such Lender, such Lender shall pay to the Administrative
Agent on demand interest on such amount in respect of each day from the date
such amount was made available by the Administrative Agent to such Lender to
the date such amount is recovered by the Administrative Agent at a per annum
rate equal to the Federal Funds Effective Rate.

 

(c)                                  A
certificate of the Administrative Agent submitted to the Borrower or any Lender
with respect to any amount owing under this Section 2.14 shall be
conclusive in the absence of manifest error.

 

Section 2.15                            Inability
to Determine Interest Rate.

 

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

 

Section 2.16                            Illegality.

 

Notwithstanding
any other provision of this Agreement, if the adoption of or any change in any
relevant Requirement of Law or in the interpretation or application thereof by
the relevant Governmental Authority to any Lender shall make it unlawful for
such Lender or its LIBOR Lending Office to make or maintain LIBOR Rate Loans as
contemplated by this Agreement or to obtain in the interbank eurodollar market
through its LIBOR Lending Office the funds with which to make such Loans, (a) such
Lender shall promptly notify the Administrative Agent and the Borrower thereof,
(b) the commitment of such Lender hereunder to make LIBOR Rate Loans or
continue LIBOR Rate Loans as such shall forthwith be suspended until the
Administrative Agent shall give notice that the condition or situation which
gave rise to the suspension shall no

 

38

 

longer exist, and (c) such
Lender’s Loans then outstanding as LIBOR Rate Loans, if any, shall be converted
on the last day of the Interest Period for such Loans or within such earlier
period as required by law as Alternate Base Rate Loans.  The Borrower hereby agrees promptly to pay
any Lender, upon its demand, any additional amounts necessary to compensate
such Lender for actual and direct costs (but not including anticipated profits)
reasonably incurred by such Lender in making any repayment in accordance with
this Section including, but not limited to, any interest or fees payable
by such Lender to lenders of funds obtained by it in order to make or maintain
its LIBOR Rate Loans hereunder.  A
certificate as to any additional amounts payable pursuant to this Section submitted
by such Lender, through the Administrative Agent, to the Borrower shall be
conclusive in the absence of manifest error. 
Each Lender agrees to use reasonable efforts (including reasonable
efforts to change its LIBOR Lending Office) to avoid or to minimize any amounts
which may otherwise be payable pursuant to this Section; provided, however,
that such efforts shall not cause the imposition on such Lender of any
additional costs or legal or regulatory burdens deemed by such Lender in its sole
discretion to be material.

 

Section 2.17                            Requirements
of Law.

 

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

 

(i)                                     shall
subject such Lender to any tax of any kind whatsoever with respect to any
Letter of Credit or any application relating thereto, any LIBOR Rate Loan made
by it, or change the basis of taxation of payments to such Lender in respect
thereof (except for changes in the rate of tax on the overall net income of
such Lender);

 

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

 

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

 

and the result of any of
the foregoing is to increase the cost to such Lender of making or maintaining
LIBOR Rate Loans or the Letters of Credit or to reduce any amount receivable
hereunder or under any Note, then, in any such case, the Borrower shall
promptly pay such Lender, upon its demand, any additional amounts necessary to
compensate such Lender for such additional cost or reduced amount receivable
which such Lender reasonably deems to be material as determined by such Lender
with respect to its LIBOR Rate Loans or Letters of Credit.  A certificate as to any additional amounts
payable pursuant to this Section submitted by such Lender, through the
Administrative Agent, to the Borrower shall be conclusive in the absence of
manifest error.  Each Lender agrees to
use reasonable efforts (including reasonable efforts to change its Domestic
Lending Office or LIBOR Lending Office, as the case may be) to avoid or to
minimize any amounts which might otherwise be payable pursuant to this
paragraph of this Section; provided, however, that such efforts
shall not cause the imposition on such Lender of any additional costs or legal
or regulatory burdens deemed by such Lender to be material.

 

39

 

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

 

(c)                                  The
agreements in this Section 2.17 shall survive the termination of this
Agreement and payment of the Notes and all other amounts payable hereunder.

 

Section 2.18                            Indemnity.

 

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

 

40

 

Section 2.19                            Taxes.

 

(a)                                  All
payments made by the Borrower hereunder or under any Note will be, except as
provided in Section 2.19(b), made free and clear of, and without deduction
or withholding for, any present or future taxes, levies, imposts, duties, fees,
assessments or other charges of whatever nature now or hereafter imposed by any
Governmental Authority or by any political subdivision or taxing authority
thereof or therein with respect to such payments (but excluding any tax imposed
on or measured by the net income or profits (and franchise taxes imposed in
lieu thereof) of a Lender pursuant to the laws of the jurisdiction in which it
is organized or the jurisdiction in which the principal office or applicable
lending office of such Lender is located or any subdivision thereof or therein)
and all interest, penalties or similar liabilities with respect thereto (all
such non-excluded taxes, levies, imposts, duties, fees, assessments or other
charges being referred to collectively as “Taxes”).  If any Taxes are so levied or imposed, the
Borrower agrees to pay the full amount of such Taxes, and such additional
amounts as may be necessary so that every payment of all amounts due under this
Agreement or under any Note, after withholding or deduction for or on account of
any Taxes, will not be less than the amount provided for herein or in such
Note.  The Borrower will furnish to the
Administrative Agent as soon as practicable after the date the payment of any
Taxes is due pursuant to applicable law certified copies (to the extent
reasonably available and required by law) of tax receipts evidencing such
payment by the Borrower.  The Borrower
agrees to indemnify and hold harmless each Lender, and reimburse such Lender
upon its written request, for the amount of any Taxes so levied or imposed and
paid by such Lender to the extent not paid by the Borrower.

 

(b)                                 Each
Lender that is not a United States person (as such term is defined in Section 7701(a)(30)
of the Code) agrees to deliver to the Borrower and the Administrative Agent on
or prior to the Closing Date, or in the case of a Lender that is an assignee or
transferee of an interest under this Agreement pursuant to Section 9.6(d) (unless
the respective Lender was already a Lender hereunder immediately prior to such
assignment or transfer), on the date of such assignment or transfer to such
Lender, (i) if the Lender is a “bank” within the meaning of Section 881(c)(3)(A) of
the Code, two accurate and complete original signed copies of Internal Revenue
Service Form W-8BEN or W-8ECI (or successor forms) certifying such
Lender’s entitlement to a complete exemption from United States
withholding tax with respect to payments to be made under this Agreement and
under any Note, or (ii) if the Lender is not a “bank” within the meaning
of Section 881(c)(3)(A) of the Code, either Internal Revenue Service Form W-8BEN
or W-8ECI as set forth in clause (i) above with the
certification required in such clause (i), or (x) a certificate
substantially in the form of Schedule 2.19 (any such certificate, a
“2.19 Certificate”) and (y) two accurate and complete original
signed copies of Internal Revenue Service Form W-8 (or successor form)
certifying such Lender’s entitlement to a complete exemption from United States
withholding tax with respect to payments of interest to be made under this Agreement
and under any Note.  In addition, each
Lender agrees that it will deliver upon the Borrower’s request updated versions
of the foregoing, as applicable, whenever the previous certification has become
obsolete or inaccurate in any material respect, together with such other forms
as may be required in order to confirm or establish the entitlement of such
Lender to a continued exemption from or reduction in United States withholding
tax with respect to payments under this Agreement and any Note.  Notwithstanding anything to the contrary
contained in Section 2.19(a), but subject to the immediately succeeding
sentence, (x) the

 

41

 

Borrower shall be
entitled, to the extent it is required to do so by law, to deduct or withhold
Taxes imposed by the United States (or any political subdivision or taxing
authority thereof or therein) from interest, fees or other amounts payable
hereunder for the account of any Lender which is not a United States person (as
such term is defined in Section 7701(a)(30) of the Code) for U.S. Federal
income tax purposes to the extent that such Lender has not provided to the
Borrower U.S. Internal Revenue Service Forms that establish a complete
exemption from such deduction or withholding and (y) the Borrower shall
not be obligated pursuant to Section 2.19(a) hereof to gross-up
payments to be made to a Lender in respect of Taxes imposed by the United
States if (I) such Lender has not provided to the Borrower the Internal
Revenue Service Forms required to be provided to the Borrower pursuant to this Section 2.19(b) to
the extent that such Forms do not establish a complete exemption from
withholding of such Taxes or (II) in the case of a payment, other than
interest, to a Lender described in clause (ii) above, to the extent
that such Forms do not establish a complete exemption from withholding of such
Taxes.  Notwithstanding anything to the
contrary contained in the preceding sentence or elsewhere in this Section 2.19,
the Borrower agrees to pay additional amounts and to indemnify each Lender in
the manner set forth in Section 2.19(a) (without regard to the
identity of the jurisdiction requiring the deduction or withholding) in respect
of any amounts deducted or withheld by it as described in the immediately
preceding sentence as a result of any changes after the Closing Date in any
applicable law, treaty, governmental rule, regulation, guideline or order, or
in the interpretation thereof, relating to the deducting or withholding of
Taxes.

 

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

 

(d)                                 If
the Borrower pays any additional amount pursuant to this Section 2.19 with
respect to a Lender, such Lender shall use reasonable efforts to obtain a
refund of tax or credit against its tax liabilities on account of such payment;
provided that such Lender shall have no obligation to use such
reasonable efforts if either (i) it is in an excess foreign tax credit
position or (ii) it believes in good faith, in its sole discretion, that
claiming a refund or credit would cause adverse tax consequences to it.  In the event that such Lender receives such a
refund or credit, such Lender shall pay to the Borrower an amount that such
Lender reasonably determines is equal to the net tax benefit obtained by such
Lender as a result of such payment by the Borrower.  In the event that no refund or credit is
obtained with respect to the Borrower’s payments to such Lender pursuant to
this Section 2.19, then such Lender shall upon request provide a
certification that such Lender has not received a refund or credit for such
payments.  Nothing contained in this Section 2.19
shall require a Lender to disclose or detail the basis of its calculation of
the amount of any tax benefit or any other amount or the basis of its
determination referred to in the proviso to the first sentence of this Section 2.19
to the Borrower or any other party.

 

(e)                                  The
agreements in this Section 2.19 shall survive the termination of this
Agreement and the payment of the Notes and all other amounts payable hereunder.

 

42

 

Section 2.20                            Indemnification;
Nature of Issuing Lender’s Duties.

 

(a)                                  In
addition to its other obligations under Section 2.4, the Borrower hereby
agrees to protect, indemnify, pay and save each Issuing Lender harmless from
and against any and all claims, demands, liabilities, damages, losses, costs,
charges and expenses (including reasonable attorneys’ fees) that the Issuing
Lender may incur or be subject to as a consequence, direct or indirect, of (i) the
issuance of any Letter of Credit or (ii) the failure of the Issuing Lender
to honor a drawing under a Letter of Credit as a result of any act or omission,
whether rightful or wrongful, of any present or future de jure or de facto
government or governmental authority (all such acts or omissions, herein called
“Government Acts”).

 

(b)                                 As
between the Borrower and the Issuing Lender, the Borrower shall assume all
risks of the acts, omissions or misuse of any Letter of Credit by the
beneficiary thereof.  The Issuing Lender
shall not be responsible:  (i) for
the form, validity, sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the application for and
issuance of any Letter of Credit, even if it should in fact prove to be in any
or all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) for
the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, that may prove to be
invalid or ineffective for any reason; (iii) for failure of the
beneficiary of a Letter of Credit to comply fully with conditions required in
order to draw upon a Letter of Credit; (iv) for errors, omissions,
interruptions or delays in transmission or delivery of any messages, by mail,
cable, telegraph, telex or otherwise, whether or not they be in cipher; (v) for
errors in interpretation of technical terms; (vi) for any loss or delay in
the transmission or otherwise of any document required in order to make a
drawing under a Letter of Credit or of the proceeds thereof; and (vii) for
any consequences arising from causes beyond the control of the Issuing Lender,
including, without limitation, any Government Acts.  None of the above shall affect, impair, or
prevent the vesting of the Issuing Lender’s rights or powers hereunder.

 

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

 

(d)                                 Nothing
in this Section 2.20 is intended to limit the reimbursement obligation of
the Borrower contained in Section 2.4(d) hereof.  The obligations of the Borrower under this Section 2.20
shall survive the termination of this Agreement.  No act or omissions of any current or prior
beneficiary of a Letter of Credit shall in any way affect or impair the rights
of the Issuing Lender to enforce any right, power or benefit under this
Agreement.

 

43

 

(e)                                  Notwithstanding
anything to the contrary contained in this Section 2.20, the Borrower
shall have no obligation to indemnify any Issuing Lender in respect of any
liability incurred by such Issuing Lender arising out of the gross negligence
or willful misconduct of the Issuing Lender (including action not taken by an
Issuing Lender), as determined by a court of competent jurisdiction.

 

Section 2.21                            Replacement of Lenders.

 

If any
Lender delivers a notice pursuant to Section 2.16, 2.17 or 2.19
(hereinafter any such Lender shall be referred to as a “Replaced Lender”), then
in such case, the Borrower may, upon at least five (5) Business Days’
notice to the Administrative Agent and such Replaced Lender, designate a
replacement lender (a “Replacement Lender”) acceptable to the Administrative
Agent in its reasonable discretion, to which such Replaced Lender shall,
subject to its receipt (unless a later date for the remittance thereof shall be
agreed upon by the Borrower and the Replaced Lender) of all amounts owed to
such Replaced Lender hereunder, assign all (but not less than all) of its
rights and obligations hereunder.  Upon
any assignment by any Lender pursuant to this Section 2.21 becoming
effective, the Replacement Lender shall thereupon be deemed to be a “Lender”
for all purposes of this Agreement and such Replaced Lender shall thereupon
cease to be a “Lender” for all purposes of this Agreement and shall have no
further rights or obligations hereunder (other than pursuant to Sections 2.15,
2.16, 2.17 or 9.5 while such Replaced Lender was a Lender).

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES

 

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

 

Section 3.1                                   Financial
Condition.

 

The
balance sheets and the related statements of income and of cash flows of the
Borrower for fiscal year 2004 audited by KPMG, LLP are complete and correct and
present fairly the financial condition of the Borrower and its Subsidiaries as
of such dates.  Additionally, (i) the
unaudited interim consolidated financial statements of the Borrower for each fiscal
quarter ended after January 1, 2005 and (ii) the pro forma balance
sheet of the Borrower as of the Closing Date, giving effect to the transactions
contemplated hereby have been prepared in good faith based upon reasonable
assumptions and represent the Borrower’s best estimate of future results.  All such financial statements, including the
related schedules and notes thereto, have been prepared in accordance with GAAP
applied consistently throughout the periods involved (except as disclosed
therein).  From December 31, 2004 to
the Closing Date, the Borrower and its Subsidiaries have no Indebtedness or
other unusual forward or long-term commitment which is not incurred in the
ordinary course of business or not fairly reflected in the foregoing financial
statements.

 

44

 

Section 3.2                                   No Change.

 

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

 

Section 3.3                                   Corporate
Existence; Compliance with Law.

 

Each
of the Borrower and the other Credit Parties (a) is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, (b) has the requisite power and authority and the legal
right to own and operate all its material property, to lease the material
property it operates as lessee and to conduct the business in which it is
currently engaged, (c) is duly qualified to conduct business and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification except to the extent that the failure to so qualify or be in good
standing could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect and (d) is in compliance with all Requirements of Law
except to the extent that the failure to comply therewith could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.

 

Section 3.4                                   Corporate Power;
Authorization; Enforceable Obligations.

 

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

 

45

 

Section 3.5                                   No Legal Bar; No
Default.

 

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

 

Section 3.6                                   No Material
Litigation.

 

No litigation,
investigation or proceeding of or before any arbitrator or Governmental
Authority is pending or, to the best knowledge of the Borrower, threatened by
or against any Credit Party or any of its Subsidiaries or against any of its or
their respective properties or revenues (a) with respect to the Credit
Documents or any Loan or any of the transactions contemplated hereby, or (b) which
could reasonably be expected to have a Material Adverse Effect.  The Borrower makes note of the matter set
forth in Item 3 on page 21 of the Borrower’s Form 10-K for the fiscal
year ended December 31, 2004, but the Borrower does not reasonably expect
such matter to have a Material Adverse Effect.

 

Section 3.7                                   Investment
Company Act.

 

Neither
the Borrower nor any Credit Party is an “investment company”, or a company “controlled”
by any entity which is required to register as an “investment company”, within
the meaning of the Investment Company Act of 1940, as amended.

 

Section 3.8                                   Margin
Regulations.

 

No
part of the proceeds of any Loan hereunder will be used directly or indirectly
for any purpose which violates, or which would be inconsistent with, the
provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System as now and from time to time hereafter in effect.  The Borrower and its Subsidiaries taken as a
group do not own “margin stock” except as identified in the financial
statements referred to in Section 3.1 and the aggregate value of all “margin
stock” owned by the Borrower and its Subsidiaries taken as a group does not exceed
25% of the value of their assets.

 

Section 3.9                                   ERISA.

 

Neither
a Reportable Event nor an “accumulated funding deficiency” (within the meaning
of Section 412 of the Code or Section 302 of ERISA) has occurred
during the five-year period prior to the date on which this representation is
made or deemed made with respect to any Plan, and each Plan has complied in all
material respects with the applicable provisions of ERISA and

 

46

 

the Code, except to the
extent that any such occurrence or failure to comply would not reasonably be
expected to have a Material Adverse Effect. 
No termination of a Single Employer Plan has occurred resulting in any
liability that has remained underfunded, and no Lien in favor of the PBGC or a
Plan has arisen, during such five-year period which could reasonably be
expected to have a Material Adverse Effect. 
The present value of all accrued benefits under each Single Employer
Plan (based on those assumptions used to fund such Plans) did not, as of the
last annual valuation date prior to the date on which this representation is
made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits by an amount which, as determined in accordance with GAAP,
could reasonably be expected to have a Material Adverse Effect.  Neither the Borrower nor any Commonly
Controlled Entity is currently subject to any liability for a complete or
partial withdrawal from a Multiemployer Plan which could reasonably be expected
to have a Material Adverse Effect.

 

Section 3.10                            Environmental Matters.

 

Except
as could not be reasonably expected to have a Material Adverse Effect:

 

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

 

(b)                                 To
the best knowledge of the Borrower and the other Credit Parties, the Properties
and all operations of the Borrower and the other Credit Parties and/or their
Subsidiaries at the Properties are in compliance, and have in the last three
years been in compliance, in all material respects with all applicable
Environmental Laws, and there is no contamination at, under or about the
Properties or violation of any Environmental Law with respect to the Properties
or the business operated by the Borrower and the other Credit Parties or any of
their Subsidiaries (the “Business”).

 

(c)                                  Neither
the Borrower nor any of the other Credit Parties has received any written or
actual notice of violation, alleged violation, non-compliance, liability or
potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Properties or the Business, nor
does the Borrower or any of the other Credit Parties nor any of their
Subsidiaries have knowledge or reason to believe that any such notice will be
received or is being threatened.

 

(d)                                 To
the best knowledge of the Borrower and the other Credit Parties, Materials of
Environmental Concern have not been transported or disposed of from the
Properties in violation of, or in a manner or to a location which could
reasonably be expected to give rise to liability under any Environmental Law,
nor have any Materials of Environmental Concern been generated, treated, stored
or disposed of at, on or under any of the Properties in violation of, or in a
manner that could reasonably be expected to give rise to liability under, any
applicable Environmental Law.

 

47

 

(e)                                  No
judicial proceeding or governmental or administrative action is pending or, to
the knowledge of the Borrower and the other Credit Parties, threatened, under
any Environmental Law to which the Borrower or any other Credit Party or any
Subsidiary is or will be named as a party with respect to the Properties or the
Business, nor are there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or judicial
requirements outstanding under any Environmental Law with respect to the
Properties or the Business.

 

(f)                                    To
the best knowledge of the Borrower and the other Credit Parties, there has been
no release or threat of release of Materials of Environmental Concern at or
from the Properties, or arising from or related to the operations of the
Borrower or any other Credit Party or any Subsidiary in connection with the
Properties or otherwise in connection with the Business, in violation of or in
amounts or in a manner that could reasonably be expected to give rise to
liability under Environmental Laws.

 

Section 3.11                            Purpose of Loans.

 

The
Extensions of Credit will be used solely (a) to refinance certain existing
Indebtedness of the Borrower and to pay certain fees and expenses related
thereto and (b) to provide for the working capital and general corporate
requirements of the Borrower and its Subsidiaries; provided, however,
that in no case shall any Extension of Credit be used (i) to fund all or
any portion of an Acquisition or (ii) to repurchase Capital Stock.

 

Section 3.12                            Subsidiaries.

 

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

 

Section 3.13                            Ownership.

 

Each
Credit Party and its Subsidiaries is the owner of, and has good and marketable
title to, all of its respective assets and none of such assets is subject to
any Lien other than Permitted Liens.

 

Section 3.14                            Indebtedness.

 

Except
as otherwise permitted under Section 6.1, the Borrower and its
Subsidiaries have no Indebtedness.

 

48

 

Section 3.15                            Taxes.

 

Each
of the Borrower and its Subsidiaries has filed, or caused to be filed, all tax
returns (federal, state, local and foreign) required to be filed and paid (a) all
amounts of taxes shown thereon to be due (including interest and penalties) and
(b) all other taxes, fees, assessments and other governmental charges
(including mortgage recording taxes, documentary stamp taxes and intangibles
taxes) owing by it, except for such taxes (i) which are not yet delinquent
or (ii) that are being contested in good faith and by proper proceedings,
and against which adequate reserves are being maintained in accordance with
GAAP.  Neither the Borrower nor any of
its Subsidiaries is aware as of the Closing Date of any proposed tax
assessments against it or any of its Subsidiaries which could reasonably be
expected to have a Material Adverse Effect.

 

Section 3.16                            Intellectual Property.

 

Each
of the Borrower and its Subsidiaries owns, or has the legal right to use, all
trademarks, tradenames, copyrights, technology, know-how and processes
necessary for each of them to conduct its business as currently conducted.  Set forth on Schedule 3.16 is a
list of all Intellectual Property owned by each of the Borrower and its
Subsidiaries or that the Borrower or any of its Subsidiaries has the right to
use as of the Closing Date.  No claim has
been asserted and is pending by any Person challenging or questioning the use
of any such Intellectual Property or the validity or effectiveness of any such
Intellectual Property, nor does the Borrower or any of its Subsidiaries know of
any such claim, and, to the knowledge of the Borrower or any of its
Subsidiaries, the use of such Intellectual Property by the Borrower or any of
its Subsidiaries does not infringe on the rights of any Person, except for such
claims and infringements that in the aggregate, could not reasonably be
expected to have a Material Adverse Effect. 
Schedule 3.16 may be updated from time to time by the
Borrower to include new Intellectual Property by giving written notice thereof
to the Administrative Agent.

 

Section 3.17                            Solvency.

 

The
fair saleable value of each Credit Party’s assets, measured on a going concern
basis, exceeds all probable liabilities, including those to be incurred
pursuant to this Agreement. None of the Credit Parties (a) has
unreasonably small capital in relation to the business in which it is or
proposes to be engaged or (b) has incurred, or believes that it will incur
after giving effect to the transactions contemplated by this Agreement, debts
beyond its ability to pay such debts as they become due.

 

Section 3.18                            Investments.

 

All
Investments of each of the Borrower and its Subsidiaries are Permitted
Investments.

 

Section 3.19                            Location of Collateral.

 

Set
forth on Schedule 3.19(a) is a list of the Properties of the
Borrower and its Subsidiaries with street address, county and state where
located.  Set forth on Schedule 3.19(b) is
a list of all locations where any tangible personal property of the Borrower
and its Subsidiaries is

 

49

 

located, including county
and state where located.  Set forth on Schedule 3.19(c) is
the chief executive office and principal place of business of each of the
Borrower and its Subsidiaries.  Schedules
3.19(a), 3.19(b) and 3.19(c) may be updated from
time to time by the Borrower to include new properties or locations by giving
written notice thereof to the Administrative Agent.  Notwithstanding anything in this Agreement or
the other Credit Documents to the contrary, the Lenders acknowledge and agree
that the Credit Parties may store certain of their inventory at locations that
are owned or leased by vendors of the Credit Parties pursuant to various “vendor-managed
inventory agreements” as long as the total aggregate value of all such
inventory does not exceed 5% of the total aggregate value of all of the
inventory of the Credit Parties.

 

Section 3.20                            No Burdensome
Restrictions.

 

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

 

Section 3.21                            Labor Matters.

 

There
are no collective bargaining agreements or Multiemployer Plans covering the
employees of the Borrower or any of its Subsidiaries as of the Closing Date and
none of the Borrower or any of its Subsidiaries (i) has suffered any
strikes, walkouts, work stoppages or other material labor difficulty
within the last five years or (ii) has knowledge of any potential or
pending strike, walkout or work stoppage.

 

Section 3.22                            Security Documents.

 

The
Security Documents create valid security interests in, and Liens on, the
Collateral purported to be covered thereby, which security interests and Liens
are currently (or will be, upon the filing of appropriate financing statements
or the recordation of the applicable Mortgage Instruments in favor of Wachovia,
as Collateral Agent for the Lenders) perfected security interests and Liens, prior
to all other Liens other than Permitted Liens.

 

Section 3.23                            Accuracy
and Completeness of Information.

 

All
factual information heretofore, contemporaneously or hereafter furnished by or
on behalf of any Credit Party or any of its Subsidiaries to the Administrative
Agent or any Lender for purposes of or in connection with this Agreement or any
other Credit Document (including, without limitation, information disclosed in
all financial statements and all footnotes attached thereto), or any transaction
contemplated hereby or thereby, is or will be true and accurate in all material
respects and not incomplete by omitting to state any material fact necessary to
make such information not misleading. 
There is no fact now known to the Borrower, any other Credit Party or
any of their Subsidiaries which has, or could reasonably be expected to have, a
Material Adverse Effect which fact has not been set forth herein, in the
financial statements of the Borrower and its Subsidiaries furnished to the
Administrative Agent and/or the Lenders, or in any certificate, opinion or
other written statement made or furnished by any Credit Party to the
Administrative Agent and/or the Lenders.

 

50

 

Section 3.24                            Compliance with Trading
with the Enemy Act, OFAC Rules and Regulations and Patriot Act.

 

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

 

(b)                                 None
of the Borrower, any Subsidiary of the Borrower or, to the knowledge of a
Responsible Officer of the Credit Parties, any Affiliate of any Credit Party (i) is
a Sanctioned Person, (ii) has more than 15% of its assets in Sanctioned
Countries, or (iii) derives more than 15% of its operating income from
investments in, or transactions with Sanctioned Persons or Sanctioned
Countries.  The proceeds of any Loan will
not be used and have not been used to fund any operations in, finance any
investments or activities in or make any payments to, a Sanctioned Person or a
Sanctioned Country.

 

ARTICLE IV

 

CONDITIONS PRECEDENT

 

Section 4.1                                   Conditions to
Closing Date and Initial Revolving Loans.

 

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

 

(a)                                  Execution
of Agreement.  The Administrative
Agent shall have received (i) counterparts of this Agreement, executed by
a duly authorized officer of each party hereto, (ii) for the account of
each Lender, Revolving Notes, and for the account of the Swingline Lender, a
Swingline Note and (iii) counterparts of the Security Agreement and the
Pledge Agreement, in each case conforming to the requirements of this Agreement
and executed by duly authorized officers of the Credit Parties.

 

51

 

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

 

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

 

(ii)                                  Resolutions.  Copies of resolutions of the board of
directors of each Credit Party approving and adopting the Credit Documents, the
transactions contemplated therein and authorizing execution and delivery
thereof, certified by an officer of such Credit Party as of the Closing Date to
be true and correct and in force and effect as of such date.

 

(iii)                               Bylaws.  A copy of the bylaws of each Credit Party
certified by an officer of such Credit Party as of the Closing Date to be true
and correct and in force and effect as of such date.

 

(iv)                              Good
Standing.  Copies of (i) certificates
of good standing, existence or its equivalent with respect to the each Credit
Party certified as of a recent date by the appropriate governmental authorities
of the state of incorporation and each other state in which the failure to so
qualify and be in good standing could reasonably be expected to have a Material
Adverse Effect on the business or operations of the Borrower and its
Subsidiaries in such state and (ii) a certificate indicating payment of
all corporate franchise taxes certified as of a recent date by the appropriate
governmental taxing authorities.

 

(v)                                 Incumbency.  An incumbency certificate of each Credit
Party certified by a secretary or assistant secretary to be true and correct as
of the Closing Date.

 

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

 

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

 

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

 

52

 

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

 

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

 

(iv)                              in
the case of any personal property Collateral located at premises leased by a
Credit Party, such estoppel letters, consents and waivers from the landlords on
such real property as may be required by the Administrative Agent.

 

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

 

(i)                                     fully
executed and notarized mortgages, deeds of trust or deeds to secure debt, or
appropriate amendments to any existing mortgages, deeds of trust or deeds to secure
debt as the Administrative Agent may deem necessary, (each, as the same may be
amended, modified, restated or supplemented from time to time, a “Mortgage
Instrument” and collectively the “Mortgage Instruments”) encumbering
the fee interest in the properties listed in Schedule 3.19(a) as
properties owned by the Credit Parties (each a “Mortgaged Property” and
collectively the “Mortgaged Properties”);

 

(ii)                                  a
title report obtained by the Credit Parties in respect of each of the Mortgaged
Properties;

 

(iii)                               with respect to each
Mortgaged Property, current form ALTA mortgagee title insurance policies issued
by Lawyers Title Insurance Corporation or appropriate endorsements to any such
existing mortgagee title insurance policies (the “Mortgage Policies”), in
amounts not less than the respective amounts designated in Schedule 3.19(a) with
respect to any particular Mortgaged Property, assuring the Administrative Agent
that each of the Mortgage Instruments creates a valid and enforceable first
priority mortgage lien on the applicable Mortgaged Property, free and clear of
all defects and encumbrances except Permitted Liens, shall provide for
affirmative insurance and such reinsurance as the Administrative Agent may
reasonably request, all of the foregoing in form and substance reasonably
satisfactory to the Administrative Agent;

 

(iv)                              evidence
as to (A) whether any Mortgaged Property is in an area designated by the
Federal Emergency Management Agency as having special flood or mud slide
hazards (a “Flood Hazard Property”) and (B) if any Mortgaged
Property is a Flood Hazard Property, (1) whether the community in which
such Mortgaged Property is located is participating in the National Flood
Insurance

 

53

 

Program,
(2) the applicable Credit Party’s written acknowledgment of receipt of
written notification from the Administrative Agent (a) as to the fact that
such Mortgaged Property is a Flood Hazard Property and (b) as to whether
the community in which each such Flood Hazard Property is located is
participating in the National Flood Insurance Program and (3) copies of
insurance policies or certificates of insurance of the Borrower and its
Subsidiaries evidencing flood insurance reasonably satisfactory to the
Administrative Agent and naming the Administrative Agent as sole loss payee on
behalf of the Lenders; and

 

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

 

(f)                                    Liability
and Casualty Insurance.  The
Administrative Agent shall have received copies of insurance policies or
certificates of insurance evidencing liability and casualty insurance meeting
the requirements set forth herein or in the Security Documents.  The Administrative Agent shall be named as
loss payee and additional insured on all such insurance policies for the
benefit of the Lenders.

 

(g)                                 Fees.  The Administrative Agent shall have received
all fees, if any, owing pursuant to the Fee Letter and Section 2.6.

 

(h)                                 Litigation.  There shall not exist any pending litigation
or, to the best of any Credit Party’s knowledge, investigation affecting or
relating to the Borrower or any of its Subsidiaries, this Agreement and the
other Credit Documents that in the reasonable judgment of the Administrative
Agent could materially adversely affect the Borrower or any of its
Subsidiaries, this Agreement and the other Credit Documents, that has not been
settled, dismissed, vacated, discharged or terminated prior to the Closing
Date.

 

54

 

(i)                                     Solvency
Evidence.  The Administrative Agent
shall have received an officer’s certificate for each Credit Party prepared by
the chief financial officer of each such Credit Party as to the financial
condition, solvency and related matters of each such Credit Party, in each case
after giving effect to the initial borrowings under the Credit Documents and
the other transactions contemplated hereby, in substantially the form of Schedule 4.1(i) hereto.

 

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

 

(k)                                  Corporate
Structure.  The corporate capital and
ownership structure of the Borrower and its Subsidiaries shall be as described
in Schedule 3.12.  The
Administrative Agent shall be satisfied with management structure and legal
structure of the Borrower as of the Closing Date.

 

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

 

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

 

(n)                                 Bankruptcy.  There shall be no bankruptcy or insolvency
proceedings with respect to the Borrower or any of its Subsidiaries.

 

(o)                                 Material
Adverse Effect.  No material adverse
change shall have occurred since December 31, 2004 in the business,
properties, operations or conditions (financial or otherwise) of the Borrower
and its Subsidiaries taken as a whole.

 

(p)                                 Financial
Statements.  The Administrative Agent
shall have received copies of the financial statements referred to in Section 3.1
hereof, each in form and substance satisfactory to it.

 

(q)                                 Termination
of Existing Indebtedness.  All
existing Indebtedness for borrowed money of the Borrower and its Subsidiaries
(other than the Indebtedness listed on Schedule 6.1(b)) shall have
been repaid in full and terminated.

 

55

 

(r)                                    Patriot
Act Certificate.  The Administrative
Agent shall have received a certificate satisfactory thereto, for benefit of
itself and the Lenders, provided by the Borrower that sets forth information
required by the Patriot Act (as defined in Section 9.18) including,
without limitation, the identity of the Borrower, the name and address of the
Borrower and other information that will allow the Administrative Agent or any
Lender, as applicable, to identify the Borrower in accordance with the Patriot
Act.

 

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

 

Section 4.2                                   Conditions to All
Extensions of Credit.

 

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

 

(a)                                  Representations
and Warranties.  The representations
and warranties made by the Credit Parties herein, in the Security Documents or
which are contained in any certificate furnished at any time under or in
connection herewith shall be true and correct in all material respects on and
as of the date of such Extension of Credit as if made on and as of such date
other than any such representations and warranties that, by its terms, refer to
a specific date other than the date of such Extension of Credit, which shall be
true and correct to all material respects on and as of such specific date.

 

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

 

(c)                                  Compliance
with Commitments.  Immediately after
giving effect to the making of any such Extension of Credit (and the
application of the proceeds thereof), (i) the sum of the aggregate
principal amount of outstanding Revolving Loans plus Swingline Loans plus
LOC Obligations shall not exceed the Revolving Committed Amount, (ii) the
LOC Obligations shall not exceed the LOC Committed Amount and (iii) the
Swingline Loans shall not exceed the Swingline Commitment.

 

(d)                                 Additional
Conditions to Revolving Loans.  If
such Loan is made pursuant to Section 2.1, all conditions set forth in
such Section shall have been satisfied.

 

(e)                                  Additional
Conditions to Letters of Credit.  If
such Extension of Credit is made pursuant to Section 2.4, all conditions
set fort in such Section shall have been satisfied.

 

56

 

(f)                                    Additional
Conditions to Swingline Loans.  If
such Extension of Credit is made pursuant to Section 2.5, all conditions
set forth in such Section shall have been satisfied.

 

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

 

ARTICLE V

 

AFFIRMATIVE COVENANTS

 

The
Credit Parties hereby covenant and agree that on the Closing Date, and
thereafter for so long as this Agreement is in effect and until the Commitments
have terminated, no Note remains outstanding and unpaid and the Credit Party
Obligations, together with interest, Commitment Fees and all other amounts owing
to the Administrative Agent or any Lender hereunder, are paid in full, the
Borrower shall, and shall cause each of its Subsidiaries (other than in the
case of Sections 5.1, 5.2 or 5.7 hereof), to:

 

Section 5.1                                   Financial
Statements.

 

Furnish
to the Administrative Agent and each of the Lenders:

 

(a)                                  Annual
Financial Statements.  As soon as
available, but in any event within ninety (90) days after the end of each
fiscal year of the Borrower, a copy of the consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at the end of such fiscal year
and the related consolidated statements of income and of cash flows of the
Borrower and its consolidated Subsidiaries for such year, such consolidated
statements shall be audited by a firm of independent certified public
accountants of nationally recognized standing reasonably acceptable to the
Required Lenders, and shall set forth in each case in comparative form the
figures for the previous year, reported on without a “going concern” or like
qualification or exception, or qualification indicating that the scope of the
audit was inadequate to permit such independent certified public accountants to
certify such financial statements without such qualification; and

 

(b)                                 Quarterly
Financial Statements.  As soon as
available and in any event within forty-five (45) days after the end of each of
the first three fiscal quarters of the Borrower, a company-prepared
consolidated balance sheet of the Borrower and its consolidated Subsidiaries as
at the end of such period and related company-prepared statements of income and
cash flows for the Borrower and its consolidated Subsidiaries for such
quarterly period and for the portion of the fiscal year ending with such
period, in each case setting forth in comparative form consolidated figures for
the corresponding period or periods of the preceding fiscal year (subject to
normal recurring year-end audit adjustments);

 

57

 

all such financial
statements to be complete and correct in all material respects (subject, in the
case of interim statements, to normal recurring year-end audit adjustments) and
to be prepared in reasonable detail and, in the case of the annual and
quarterly financial statements provided in accordance with subsections (a) and
(b) above, in accordance with GAAP applied consistently throughout the
periods reflected therein and further accompanied by a description of, and an
estimation of the effect on the financial statements on account of, a change,
if any, in the application of accounting principles as provided in Section 1.3.

 

Section 5.2                                   Certificates;
Other Information.

 

Furnish
to the Administrative Agent and each of the Lenders:

 

(a)                                  concurrently
with the delivery of the financial statements referred to in Section 5.1(a) above,
a certificate of the independent certified public accountants reporting on such
financial statements stating that in making the examination necessary therefor
no knowledge was obtained of any Default or Event of Default, except as
specified in such certificate;

 

(b)                                 concurrently
with the delivery of the financial statements referred to in Sections 5.1(a) and
5.1(b) above, a certificate of a Responsible Officer stating that, to the
best of such Responsible Officer’s knowledge, each of the Credit Parties during
such period observed or performed in all material respects all of its covenants
and other agreements, and satisfied in all material respects every condition,
contained in this Agreement to be observed, performed or satisfied by it, and
that such Responsible Officer has obtained no knowledge of any Default or Event
of Default except as specified in such certificate and such certificate shall
include the calculations in reasonable detail required to indicate compliance
with Section 5.9 as of the last day of such period;

 

(c)                                  within
thirty (30) days after the same are sent, copies of all material financial
reports (other than those otherwise provided pursuant to Section 5.1 and
those which are of a promotional nature) and other financial information which
the Borrower sends to its shareholders, and within thirty days after the same
are filed, copies of all financial statements and non-confidential reports
which the Borrower may make to, or file with the Securities and Exchange Commission
or any successor or analogous Governmental Authority;

 

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

 

(e)                                  promptly
upon receipt thereof, a copy of any other report or “management letter”
submitted by independent accountants to the Borrower or any of its Subsidiaries
in connection with any annual, interim or special audit of the books of such
Person;

 

58

 

(f)                                    to
the extent that the sum of (A) Available Cash plus (B) the
Unused Revolving Commitment is (x) less than $15,000,000 as of the end of the
most recently ended fiscal month, the Borrower shall provide a report with
respect to the aggregate amount of Eligible Inventory and Eligible Receivables
(collectively, the “Eligible Inventory and A/R Report”) within 30 days
following the end of each such month and (y) greater than or equal to
$15,000,000 but less than $40,000,000 as of the end of the most recently ended
fiscal quarter, the Borrower shall provide an Eligible Inventory and A/R Report
within 45 days following the end of each such fiscal quarter; and

 

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

 

Section 5.3                                   Payment of
Obligations.

 

Pay,
discharge or otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, in accordance with industry practice (subject,
where applicable, to specified grace periods) all its material obligations of
whatever nature and any additional costs that are imposed as a result of any
failure to so pay, discharge or otherwise satisfy such obligations, except when
the amount or validity of such obligations and costs is currently being
contested in good faith by appropriate proceedings and reserves, if applicable,
in conformity with GAAP with respect thereto have been provided on the books of
the Borrower or its Subsidiaries, as the case may be.

 

Section 5.4                                   Conduct of
Business and Maintenance of Existence.

 

Except
as provided in Section 6.5, continue to engage in business of the same
general type as now conducted by it on the Closing Date and preserve, renew and
keep in full force and effect its corporate existence and take all reasonable
action to maintain all rights, privileges and franchises necessary or desirable
in the normal conduct of its business; comply with all Contractual Obligations
and Requirements of Law applicable to it except to the extent that failure to
comply therewith could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.

 

Section 5.5                                   Maintenance of
Property; Insurance.

 

(a)                                  Keep
all property useful and necessary in its business in good working order and
condition (ordinary wear and tear and obsolescence excepted) except where
failure to do so would not have a Material Adverse Effect;

 

(b)                                 Maintain
with financially sound and reputable insurance companies insurance on all its
material property (including without limitation its material tangible Collateral) in at least such amounts and against at least
such risks as are usually insured against in the same general area by companies
engaged in the same or a similar business; and furnish to the Administrative
Agent, upon written request, full information as to the insurance carried; provided,
however, that the Borrower and its Subsidiaries may

 

59

 

maintain
self insurance plans to the extent companies of similar size and in similar
businesses do so. The Administrative Agent shall be named as loss payee or
mortgagee, as its interest may appear, and/or additional insured with respect
to any such insurance providing coverage in respect of any Collateral, and each
provider of any such insurance shall agree, by endorsement upon the policy or
policies issued by it or by independent instruments furnished to the
Administrative Agent, that it will give the Administrative Agent thirty (30)
days prior written notice before any such policy or policies shall be altered
or canceled, and that no act or default of the Borrower or any of its
Subsidiaries or any other Person shall affect the rights of the Administrative
Agent or the Lenders under such policy or policies.  The present insurance coverage of the
Borrower and its Subsidiaries is outlined as to carrier, policy number,
expiration date, type and amount on Schedule 5.5(b); and

 

(c)                                  In
case of any material loss, damage to or destruction of the Collateral of any
Credit Party or any part thereof, such Credit Party shall promptly give written
notice thereof to the Administrative Agent generally describing the nature and
extent of such damage or destruction.

 

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

 

Keep
proper books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its businesses and activities; and permit,
during regular business hours and upon reasonable notice by the Administrative
Agent or any Lender, the Administrative Agent or any Lender to visit and
inspect any of its properties and examine and make abstracts from any of its
books and records (other than materials protected by the attorney-client
privilege and materials which the Borrower may not disclose without violation
of a confidentiality obligation binding upon it) at any reasonable time and as
often as may reasonably be desired, and to discuss the business, operations,
properties and financial and other condition of the Borrower and its
Subsidiaries with officers and employees of the Borrower and its Subsidiaries
and with its independent certified public accountants.

 

Section 5.7                                   Notices.

 

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

 

(a)                                  promptly,
but in any event within two (2) Business Days after the Borrower knows or
has reason to know thereof, the occurrence of any Default or Event of Default;

 

(b)                                 promptly,
any default or event of default under any Contractual Obligation of the
Borrower or any of its Subsidiaries which could reasonably be expected to have
a Material Adverse Effect;

 

60

 

(c)                                  promptly,
any litigation, or any investigation or proceeding known to the Borrower,
affecting the Borrower or any of its Subsidiaries which, if adversely
determined, could reasonably be expected to have a Material Adverse Effect;

 

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

 

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

 

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

 

Section 5.8                                   Environmental
Laws.

 

(a)                                  Comply
in all material respects with, and use its best efforts to ensure compliance in
all material respects by all tenants and subtenants, if any, with, all
applicable Environmental Laws and obtain and comply in all material respects
with and maintain, and use its best efforts to ensure that all tenants and
subtenants obtain and comply in all material respects with and maintain, any
and all licenses, approvals, notifications, registrations or permits required
by applicable Environmental Laws except to the extent that failure to do so
could not reasonably be expected to have a Material Adverse Effect;

 

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

 

(c)                                  Defend,
indemnify and hold harmless the Administrative Agent and the Lenders, and their
respective employees, agents, officers and directors, from and against any and
all claims, demands, penalties, fines, liabilities, settlements, damages, costs
and expenses of whatever kind or nature known or unknown, contingent or
otherwise, arising

 

61

 

out
of, or in any way relating to the violation of, noncompliance with or liability
under, any Environmental Law applicable to the operations of the  Borrower any of its Subsidiaries or the
Properties, or any legally binding orders, requirements or demands of
Governmental Authorities related thereto, including, without limitation, reasonable
attorney’s and consultant’s fees, investigation and laboratory fees, response
costs, court costs and litigation expenses, except to the extent that any of
the foregoing arise out of the gross negligence or willful misconduct of the
party seeking indemnification therefor. 
The agreements in this paragraph shall survive repayment of the Notes
and all other amounts payable hereunder.

 

Section 5.9                                   Financial
Covenants.

 

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

 

(a)                                  Leverage
Ratio.  The Leverage Ratio, as of the
last day of each fiscal quarter of the Borrower and its Subsidiaries, shall be
less than or equal to 2.50 to 1.00.

 

(b)                                 Fixed
Charge Coverage Ratio.  The Fixed
Charge Coverage Ratio, as of the last day of each fiscal quarter of the
Borrower and its Subsidiaries shall be greater than or equal to 1.15 to 1.00.

 

Section 5.10                            Additional Subsidiary
Guarantors.

 

The
Credit Parties will cause each of their Domestic Subsidiaries, whether newly
formed, after acquired or otherwise existing, to promptly become a Guarantor
hereunder by way of execution of a Joinder Agreement.  The guaranty obligations of any such
Additional Credit Party shall be secured by, among other things, the Collateral
of the Additional Credit Party.

 

Section 5.11                            Compliance with Law.

 

Each
Credit Party will, and will cause each of its Subsidiaries to, comply with all
laws, rules, regulations and orders, and all applicable restrictions imposed by
all Governmental Authorities, applicable to it and its Property if
noncompliance with any such law, rule, regulation, order or restriction could
reasonably be expected to have a Material Adverse Effect.

 

Section 5.12                            Pledged Assets.

 

Each
Credit Party will, and will cause each of its Subsidiaries to, be subject at
all times to a first priority, perfected Lien with respect to all of such
Subsidiary’s Collateral (subject in each case to Permitted Liens) in favor of
the Administrative Agent pursuant to the terms and conditions of the Security
Documents or such other security documents as the Administrative Agent shall
reasonably request.  Each Credit Party
shall, and shall cause each of its Subsidiaries to, adhere to the covenants
regarding the location of personal property as set forth in the Security
Documents.

 

62

 

Section 5.13                            Further Assurances.

 

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

 

(b)                                 By
no later than October 31, 2005 (or such extended period of time as agreed
to by the Administrative Agent), with respect to (i) that certain deposit
account #68927516 held on the Closing Date by Bank of America, N.A. and (ii) that
certain deposit account #121-1070 held on the Closing Date by Mellon Bank (collectively,
the “Subject Accounts”), the Credit Parties shall have caused (i) the
Subject Accounts to be moved to the Administrative Agent or (ii) Bank of
America, N.A. and Mellon Bank to have executed control agreements in form and
substance satisfactory to the Administrative Agent.

 

(c)                                  By
no later than October 31, 2005 (or such extended period of time as agreed
to by the Administrative Agent), with respect to that certain securities
account #78159054 held on the Closing Date by Thomas Weisel Partners LLC (the “Securities
Account”), the Credit Parties shall have caused Thomas Weisel Partners LLC
to have executed a control agreement in form and substance satisfactory to the
Administrative Agent.

 

ARTICLE VI

 

NEGATIVE COVENANTS

 

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

 

Section 6.1                                   Indebtedness.

 

The
Borrower will not, nor will it permit any Subsidiary to, contract, create,
incur, assume or permit to exist any Indebtedness, except:

 

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

 

(b)                                 Indebtedness
of the Borrower and its Subsidiaries existing as of the Closing Date as
referenced in the financial statements referenced in Section 3.1 (and set
out more specifically in Schedule 6.1(b)) hereto and renewals,
refinancings or extensions thereof in a principal amount not in excess of that
outstanding as of the date of such renewal, refinancing or extension;

 

63

 

(c)                                  Indebtedness
of the Borrower and its Subsidiaries incurred after the Closing Date consisting
of Capital Leases or Indebtedness incurred to provide all or a portion of the
purchase price or cost of construction of an asset provided that (i) such
Indebtedness when incurred shall not exceed the purchase price or cost of
construction of such asset; (ii) no such Indebtedness shall be refinanced
for a principal amount in excess of the principal balance outstanding thereon
at the time of such refinancing; and (iii) the total amount of all such
Indebtedness shall not exceed $2,000,000 at any time outstanding;

 

(d)                                 Unsecured
intercompany Indebtedness among the Credit Parties of the type described in
clause (iii) of the definition of Permitted Investments and permitted
under Section 6.8;

 

(e)                                  Indebtedness
and obligations owing under Hedging Agreements relating to the Loans hereunder
and other Hedging Agreements entered into in order to manage existing or
anticipated interest rate, exchange rate or commodity price risks and not for
speculative purposes;

 

(f)                                    Indebtedness
and obligations of Credit Parties owing under documentary letters of credit for
the purchase of goods or other merchandise (but not under standby, direct pay
or other letters of credit except for the Letters of Credit hereunder)
generally in an aggregate amount not to exceed $250,000 in the aggregate;

 

(g)                                 Indebtedness
in respect of Guaranty Obligations (other than Guaranty Obligations permitted
pursuant to Section 6.1(a)) in an aggregate amount not to exceed $500,000
at any time outstanding; and

 

(h)                                 other
Indebtedness of the Borrower and its Subsidiaries which does not exceed
$2,500,000 in the aggregate at any time outstanding.

 

Section 6.2                                   Liens.

 

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

 

Section 6.3                                   Guaranty
Obligations.

 

The
Borrower will not, nor will it permit any Subsidiary to, enter into or
otherwise become or be liable in respect of any Guaranty Obligations (excluding
specifically therefrom endorsements in the ordinary course of business of
negotiable instruments for deposit or collection) other than (i) those in
favor of the Lenders in connection herewith, and (ii) Guaranty Obligations
by the Borrower or its Subsidiaries of Indebtedness permitted under Section 6.1(b) and
Section 6.1(g) (except, as regards Indebtedness under
Section 6.1(b) thereof, only if and to the extent such Indebtedness
was guaranteed on the Closing Date).

 

64

 

Section 6.4                                   Nature of Business.

 

The
Borrower will not, nor will it permit any Subsidiary to, alter the character of
its business in any material respect from that conducted as of the Closing
Date.

 

Section 6.5                                   Consolidation,
Merger, Sale or Purchase of Assets, etc.

 

The
Borrower will not, nor will it permit any Subsidiary to,

 

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

 

(i)                                     Specified
Sales;

 

(ii)                                  the
sale, transfer, lease or other disposition of property or assets (A) which
are the subject of a Recovery Event; provided, that the net cash
proceeds of such disposition are applied in accordance with Section 2.8(b)(ii) or
(B) the sale, lease, transfer or other disposition of machinery, parts and
equipment no longer used or useful in the conduct of the business of the
Borrower or any of its Subsidiaries, as appropriate, in its reasonable
discretion, so long as the net proceeds therefrom are used to repair or replace
damaged property or to purchase or otherwise acquire new assets or property, provided
that such purchase or acquisition is committed to within 180 days of receipt of
the net proceeds and such purchase or acquisition is consummated within 270
days of receipt of such proceeds;

 

(iii)                               the sale, lease or
transfer of property or assets (at fair value) between the Borrower and any
Guarantor;

 

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

 

provided,
that in the case of a sale, lease or transfer pursuant to Section 6.5(a)(iv),
at least 75% of the consideration received therefor by the Borrower or any such
Subsidiary is in the form of cash or Cash Equivalents; provided, further,
that with respect to sales of assets permitted hereunder only, the
Administrative Agent shall be entitled, without the consent of the Required
Lenders, to release its Liens relating to the particular assets sold; or

 

(b)                                 (i) 
purchase, lease or otherwise acquire (in a single transaction or a series of
related transactions) the property or assets of any Person (other than
purchases or other acquisitions of inventory, leases, materials, property and
equipment in the ordinary course of

 

65

 

business, except as
otherwise limited or prohibited herein); provided, that so long as no
Default or Event of Default shall have occurred and be continuing or would
result therefrom, the Borrower may acquire all or a majority of the Capital
Stock or other ownership interest in any Person (in a similar or related line
of business) or all or a substantial portion of the assets, property and/or
operations of a Person (in a similar or related line of business); provided,
however, that both before and after giving effect to any such Acquisition
otherwise permitted hereunder, (A) the aggregate outstanding amount of
Revolving Loans plus Swingline Loans plus LOC Obligations shall not exceed an
amount equal to 20% of the aggregate Revolving Committed Amount and (B) the
Leverage Ratio on a pro forma basis before and after giving effect to any such
Acquisition shall not exceed 2.0 to 1.0 or (ii) enter into any transaction
of merger or consolidation, except for (A) investments or acquisitions
permitted pursuant to Section 6.6, and (B) the merger or
consolidation of a Credit Party with and into another Credit Party, provided
that, except as provided in this Section 6.4, if the Borrower is a party
thereto, the Borrower will be the surviving corporation.

 

Notwithstanding the
foregoing and so long as no Default or Event of Default shall have occurred and
be continuing, the Borrower may merge into, or be converted into TTM
Technologies, Inc., a Delaware corporation (“TTM Delaware”) for the
sole purpose of reincorporating the Borrower as a Delaware corporation, with TTM
Delaware being the surviving corporation of such merger or conversion (the “Reincorporation
Merger”).  In connection with the
Reincorporation Merger the Borrower represents and warrants that: (i) immediately
preceding the Reincorporation Merger, TTM Delaware shall be a wholly-owned
Subsidiary of the Borrower and shall have no assets or liabilities, (ii) the
terms of the Reincorporation Merger shall provide for the shares of Capital
Stock of the Borrower to be converted into or exchanged for shares of TTM
Delaware, and no other consideration being paid or issued to any other Person, (iii) upon
consummation of the Reincorporation Merger, TTM Delaware shall confirm to the
Administrative Agent, pursuant to a written instrument satisfactory in form and
substance to the Administrative Agent that TTM Delaware has become liable for
all Obligations of the Borrower under this Agreement and the other Credit Documents,
(iv) upon consummation of the Reincorporation Merger, the Administrative
Agent shall have received all documents and instruments, if any, reasonably
requested by the Administrative Agent to be filed, registered or recorded to
create or perfect the Liens intended to be created under the Credit Documents
and (v) upon the satisfaction of the conditions provided in clauses (i),
(ii), (iii) and (iv) hereof, all references to the Borrower in the
Credit Documents shall be amended to refer to TTM Delaware, mutatis  mutandis.

 

Section 6.6                                   Advances,
Investments and Loans.

 

The
Borrower will not, nor will it permit any Subsidiary to, lend money or extend
credit or make advances to any Person, or purchase or acquire any stock,
obligations or securities of, or any other interest in, or make any capital
contribution to, any Person except for Permitted Investments.

 

Section 6.7                                   Transactions with
Affiliates.

 

Except
for those transactions contemplated by the agreements set forth on Schedule 6.7
and except as permitted in subsection (iv) of the definition of
Permitted Investments, the

 

66

 

Borrower will not, nor
will it permit any Subsidiary to, enter into any transaction or series of
transactions, whether or not in the ordinary course of business, with any
officer, director, shareholder or Affiliate other than on fair and reasonable
terms and conditions substantially as favorable as would be obtainable in a
comparable arm’s-length transaction with a Person other than an officer,
director, shareholder or Affiliate.

 

Section 6.8                                   Ownership of
Subsidiaries; Restrictions.

 

The
Borrower will not, nor will it permit any Subsidiary to, create, form or
acquire any Subsidiaries, except for Domestic Subsidiaries which are joined as
Additional Credit Parties in accordance with the terms hereof.  The Borrower will not sell, transfer, pledge
or otherwise dispose of any Capital Stock or other equity interests in any of
its Subsidiaries, nor will it permit any of its Subsidiaries to issue, sell,
transfer, pledge or otherwise dispose of any of their Capital Stock or other
equity interests, except in a transaction permitted by Section 6.5.

 

Section 6.9                                   Fiscal Year;
Organizational Documents; Material Contracts.

 

The
Borrower will not, nor will it permit any of its Subsidiaries to, change its
fiscal year or to change any fiscal quarter end as set forth on Schedule 6.9.  The Borrower will not, nor will it permit any
Subsidiary to, amend, modify or change its articles of incorporation (or
corporate charter or other similar organizational document) or bylaws (or other
similar document) without the prior written consent of the Required
Lenders.  The Borrower will not, nor will
it permit any of its Subsidiaries to, without the prior written consent of the
Administrative Agent, amend, modify, cancel or terminate or fail to renew or
extend or permit the amendment, modification, cancellation or termination of
any of the Material Contracts, except in the event that such amendments,
modifications, cancellations or terminations could not reasonably be expected
to have a Material Adverse Effect.

 

Section 6.10                            Limitation on Restricted
Actions.

 

The
Borrower will not, nor will it permit any Subsidiary to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective
any encumbrance or restriction on the ability of any such Person to (a) pay
dividends or make any other distributions to any Credit Party on its Capital
Stock or with respect to any other interest or participation in, or measured
by, its profits, (b) pay any Indebtedness or other obligation owed to any
Credit Party, (c) make loans or advances to any Credit Party, (d) sell,
lease or transfer any of its properties or assets to any Credit Party, or (e) act
as a Guarantor and pledge its assets pursuant to the Credit Documents or any
renewals, refinancings, exchanges, refundings or extension thereof, except (in
respect of any of the matters referred to in clauses (a)-(d) above) for
such encumbrances or restrictions existing under or by reason of (i) this
Agreement and the other Credit Documents, (ii) applicable law, (iii) any
document or instrument governing Indebtedness incurred pursuant to Section 6.1(c),
provided that any such restriction contained therein relates only to the
asset or assets constructed or acquired in connection therewith or (iv) any
Permitted Lien or any document or instrument governing any Permitted Lien, provided
that any such restriction contained therein relates only to the asset or assets
subject to such Permitted Lien.

 

67

 

Section 6.11                            Restricted
Payments.

 

The Borrower will not,
nor will it permit any Subsidiary to, directly or indirectly, declare, order,
make or set apart any sum for or pay any Restricted Payment, except (a) to make dividends payable solely in the same
class of Capital Stock of such Person, (b)
to make dividends or other distributions payable to any Credit Party (directly
or indirectly through Subsidiaries) and (c)
the Borrower may repurchase options of management and Capital Stock; provided,
however, that (i) no Default or Event of
Default has occurred and is continuing at such time or would be directly or
indirectly caused as a result thereof and (ii)
before and after giving effect to any such repurchase, (x) the aggregate
outstanding amount of Revolving Loans plus Swingline Loans plus LOC Obligations
shall not exceed an amount equal to 20% of the aggregate Revolving Committed
Amount and (y) the Leverage Ratio, on a pro forma basis, shall not exceed 2.0
to 1.0.

 

Section 6.12                            Prepayments
of Indebtedness, etc.

 

The Borrower will not,
nor will it permit any Subsidiary to, after the issuance thereof, amend or
modify (or permit the amendment or modification of) any of the terms of any
Indebtedness if such amendment or modification would add or change any terms in
a manner adverse to the issuer of such Indebtedness, or shorten the final
maturity or average life to maturity or require any payment to be made sooner
than originally scheduled or increase the interest rate applicable thereto or
change any subordination provision thereof.

 

Section 6.13                            No
Further Negative Pledges.

 

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

 

68

 

ARTICLE VII

 

EVENTS OF DEFAULT

 

Section 7.1                                   Events
of Default.

 

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

 

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

 

(b)                                 Any
representation or warranty made or deemed made herein, in the Security
Documents or in any of the other Credit Documents or which is contained in any
certificate, document or financial or other statement furnished at any time
under or in connection with this Agreement shall prove to have been incorrect,
false or misleading in any material respect on or as of the date made or deemed
made; or

 

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

 

(d)                                 The
Borrower or any of its Subsidiaries shall (i) default in any payment of
principal of or interest on any Indebtedness (other than the Notes) in a
principal amount outstanding of at least $500,000 in the aggregate for the
Borrower and any of its Subsidiaries beyond the period of grace (not to exceed
30 days), if any, provided in the instrument or agreement under which such
Indebtedness was created; or (ii) default in the observance or performance of
any other agreement or condition relating to any Indebtedness in a principal
amount outstanding of at least $500,000 in the aggregate for the Borrower and
its Subsidiaries or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition
exist, the effect of which default or other event or condition is to cause, or
to permit the holder or holders of such Indebtedness or beneficiary or
beneficiaries of such Indebtedness (or a trustee or agent on behalf of such
holder or holders or beneficiary or beneficiaries) to cause, with the giving of
notice if required, such Indebtedness to become due prior to its stated maturity;
or

 

69

 

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

 

(f)                                    One
or more judgments or decrees shall be entered against the Borrower or any of
its Subsidiaries involving in the aggregate a liability (to the extent not paid
when due or covered by insurance) of $1,000,000 or more and all such judgments
or decrees shall not have been paid and satisfied, vacated, discharged, stayed
or bonded pending appeal within 10 days from the entry thereof; or

 

(g)                                 (i)
Any Person shall engage in any “prohibited transaction” (as defined in Section
406 of ERISA or Section 4975 of the Code) involving any Plan, (ii) any “accumulated
funding deficiency” (as defined in Section 302 of ERISA), whether or not
waived, shall exist with respect to any Plan or any Lien in favor of the PBGC
or a Plan (other than a Permitted Lien) shall arise on the assets of the
Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to terminate, any
Single Employer Plan, which Reportable Event or commencement of proceedings or
appointment of a Trustee is, in the reasonable opinion of the Required Lenders,
likely to result in the termination of such Plan for purposes of Title IV of
ERISA, (iv) any Single Employer Plan shall terminate for purposes of Title IV
of ERISA, (v) the Borrower, any of its Subsidiaries or any Commonly Controlled
Entity shall, or in the reasonable opinion of the Required Lenders is likely
to, incur any liability in connection with a withdrawal from, or the Insolvency
or Reorganization of, any

 

70

 

Multiemployer Plan or
(vi) any other similar event or condition shall occur or exist with respect to
a Plan; and in each case in clauses (i) through (vi) above, such event or
condition, together with all other such events or conditions, if any, could
have a Material Adverse Effect; or

 

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

 

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

 

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

 

Section 7.2                                   Acceleration;
Remedies.

 

Upon the occurrence of an
Event of Default, then, and in any such event, (a) if such event is an Event of
Default specified in Section 7.1(e) above, automatically the Commitments shall
immediately terminate and the Loans (with accrued interest thereon), and all
other amounts under the Credit Documents (including without limitation the
maximum amount of all contingent liabilities under Letters of Credit) shall
immediately become due and payable, and (b) if such event is any other Event of
Default, either or both of the following actions may be taken:  (i) with the written consent of the Required
Lenders, the Administrative Agent may, or upon the written request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower
declare the Commitments to be terminated forthwith, whereupon the Commitments
shall immediately terminate; and (ii) the Administrative Agent may, or upon the
written request of the Required Lenders, the Administrative Agent shall, by
notice of default to the Borrower, declare the Loans (with accrued interest
thereon) and all other amounts owing under this Agreement and the Notes to be
due and payable forthwith and direct the Borrower to pay to the Administrative
Agent cash collateral as security for the LOC Obligations for subsequent
drawings under then outstanding Letters of Credit an amount equal to the
maximum amount of which may be drawn under Letters of Credit then outstanding,
whereupon the same shall immediately become due and payable.

 

ARTICLE VIII

 

THE AGENT

 

Section 8.1                                   Appointment.

 

Each Lender hereby
irrevocably designates and appoints Wachovia Bank, National Association as the
Administrative Agent of such Lender under this Agreement, and each such

 

71

 

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

 

Section 8.2                                   Delegation
of Duties.

 

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

 

Section 8.3                                   Exculpatory
Provisions.

 

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

 

Section 8.4                                   Reliance
by Administrative Agent.

 

The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
Note, writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message, statement, order or
other document or conversation believed by it in good faith to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons
and upon advice and statements of legal counsel (including, without limitation,
counsel to the Borrower), independent accountants and other experts selected by
the

 

72

 

Administrative
Agent.  The Administrative Agent may deem
and treat the payee of any Note as the owner thereof for all purposes unless
(a) a written notice of assignment, negotiation or transfer thereof shall have
been filed with the Administrative Agent and (b) the Administrative Agent shall
have received the written agreement of such assignee to be bound hereby as
fully and to the same extent as if such assignee were an original Lender party
hereto, in each case in form satisfactory to the Administrative Agent.  The Administrative Agent shall be fully
justified in failing or refusing to take any action under this Agreement unless
it shall first receive such advice or concurrence of the Required Lenders as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred by it
by reason of taking or continuing to take any such action.  The Administrative Agent shall in all cases
be fully protected in acting, or in refraining from acting, under any of the
Credit Documents in accordance with a request of the Required Lenders or all of
the Lenders, as may be required under this Agreement, and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Lenders and all future holders of the Notes.

 

Section 8.5                                   Notice
of Default.

 

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

 

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

 

Each Lender expressly
acknowledges that neither the Administrative Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates has made any
representation or warranty to it and that no act by the Administrative Agent
hereinafter taken, including any review of the affairs of the Borrower, shall
be deemed to constitute any representation or warranty by the Administrative
Agent to any Lender.  Each Lender
represents to the Administrative Agent that it has, independently and without reliance
upon the Administrative Agent or any other Lender, and based on such documents
and information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrower and made its own decision to
make its Loans hereunder and enter into this Agreement.  Each Lender also represents that it will,
independently and without reliance upon the Administrative Agent or any other
Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this

 

73

 

Agreement, and to make
such investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Borrower.  Except for notices, reports
and other documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, condition (financial
or otherwise), prospects or creditworthiness of the Borrower which may come
into the possession of the Administrative Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates.

 

Section 8.7                                   Indemnification.

 

The Lenders agree to indemnify
the Administrative Agent in its capacity hereunder (to the extent not
reimbursed by the Borrower and without limiting the obligation of the Borrower
to do so), ratably according to their respective Commitment Percentages in
effect on the date on which indemnification is sought under this Section, from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time (including, without limitation, at any time
following the payment of the Notes) be imposed on, incurred by or asserted
against the Administrative Agent in any way relating to or arising out of any
Credit Document or any documents contemplated by or referred to herein or therein
or the transactions contemplated hereby or thereby or any action taken or
omitted by the Administrative Agent under or in connection with any of the
foregoing; provided, however, that no Lender shall be liable for
the payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements to the
extent resulting from the Agent’s gross negligence or willful misconduct, as
determined by a court of competent jurisdiction.  The agreements in this Section 8.7 shall
survive the termination of this Agreement and payment of the Notes and all
other amounts payable hereunder.

 

Section 8.8                                   Administrative
Agent in Its Individual Capacity.

 

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

 

Section 8.9                                   Successor
Administrative Agent.

 

The Administrative Agent
may resign as Administrative Agent upon 30 days’ prior notice to the Borrower
and the Lenders.  If the Administrative
Agent shall resign as Administrative Agent under this Agreement and the Notes,
then the Required Lenders shall appoint from among the Lenders a successor
agent for the Lenders, which successor agent shall be approved by the Borrower,
whereupon such successor agent shall succeed to the rights, powers and duties
of the Administrative Agent, and the term “Administrative Agent” shall mean
such successor agent

 

74

 

effective upon such
appointment and approval, and the former Agent’s rights, powers and duties as
Administrative Agent shall be terminated, without any other or further act or
deed on the part of such former Administrative Agent or any of the parties to
this Agreement or any holders of the Notes. 
After any retiring Agent’s resignation as Administrative Agent, the
provisions of this Section 8.9 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Administrative Agent under this
Agreement.

 

ARTICLE IX

 

MISCELLANEOUS

 

Section 9.1                                   Amendments,
Waivers and Release of Collateral.

 

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

 

(i)                                     reduce
the amount or extend the scheduled date of maturity of any Loan or Note or any
installment thereon, or reduce the stated rate of any interest or fee payable
hereunder (other than interest at the increased post-default rate) or extend
the scheduled date of any payment thereof or increase the amount or extend the
expiration date of any Lender’s Commitment, in each case without the written
consent of each Lender directly affected thereby, or

 

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

 

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

 

(iv)                              release
any of the Guarantors from their obligations under the Guaranty, except in
accordance with the terms thereof, without the written consent of all of the
Lenders, or

 

75

 

(v)                                 release
all or substantially all of the Collateral, without the written consent of all
of the Lenders, or

 

(vi)                              amend,
modify or waive any provision of Section 2.2 or otherwise increase the
Revolving Committed Amount, other than in compliance with Section 2.2, without
the written consent of all of the Lenders, or

 

(vii)                           amend,
modify or waive any provision of the Credit Documents requiring consent,
approval or request of the Required Lenders or all Lenders, without the written
consent of all of the Required Lenders or Lenders as appropriate and, provided,
further, that no amendment, waiver or consent affecting the rights or
duties of the Administrative Agent or the Issuing Lender under any Credit
Document shall in any event be effective, unless in writing and signed by the
Administrative Agent and/or the Issuing Lender, as applicable, in addition to
the Lenders required hereinabove to take such action.

 

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

 

Notwithstanding any of
the foregoing to the contrary, the consent of the Borrower shall not be
required for any amendment, modification or waiver of the provisions of Article
VIII (other than the provisions of Section 8.9); provided, however, that the Administrative Agent will
provide written notice to the Borrower of any such amendment, modification or
waiver.  In addition, the Borrower and
the Lenders hereby authorize the Administrative Agent to modify this Agreement
by unilaterally amending or supplementing Schedule 2.1(a) from time to
time in the manner requested by the Borrower, the Administrative Agent or any
Lender in order to reflect any assignments or transfers of the Loans as
provided for hereunder; provided, however, that the
Administrative Agent shall promptly deliver a copy of any such modification to
the Borrower and each Lender.

 

Notwithstanding the fact
that the consent of all the Lenders is required in certain circumstances as set
forth above, (x) each Lender is entitled to vote as such Lender sees fit on any
bankruptcy reorganization plan that affects the Loans, and each Lender
acknowledges that the provisions of Section 1126(c) of the Bankruptcy Code
supersedes the unanimous consent provisions set forth herein and (y) the
Required Lenders may consent to allow a Credit Party to use cash collateral in
the context of a bankruptcy or insolvency proceeding.

 

76

 

Section 9.2                                   Notices.

 

Except as otherwise
provided in Article II, all notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made (a) when delivered by hand, (b) when confirmation
of transmittal via telecopy (or other facsimile device) to the number set out
herein has been received by the sender, (c) the day following the day on which
the same has been delivered prepaid to a reputable national overnight air
courier service, or (d) the third Business Day following the day on which the
same is sent by certified or registered mail, postage prepaid, in each case,
addressed as follows in the case of the Borrower, the other Credit Parties and
the Administrative Agent, and as set forth on Schedule 9.2 in the case
of the Lenders, or to such other address as may be hereafter notified by the
respective parties hereto and any future holders of the Notes:

 

	
  The Borrower

  	
   

  	
   

  
	
  and the other

  	
   

  	
  TTM Technologies, Inc.

  
	
  Credit Parties:

  	
   

  	
  2630 South Harbor
  Boulevard

  
	
   

  	
   

  	
  Santa Ana, CA 92704

  
	
   

  	
   

  	
  Attention: Ms. Stacey
  Peterson

  
	
   

  	
   

  	
  Telecopier: (714)
  241-1668

  
	
   

  	
   

  	
  Telephone: (714)
  241-0303

  
	
   

  	
   

  	
  Email:  speterson@ttmtech.com

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  With a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Greenberg Traurig, LLP

  
	
   

  	
   

  	
  2375 East Camelback
  Road

  
	
   

  	
   

  	
  Phoenix, AZ 85016

  
	
   

  	
   

  	
  Attention:  Mr. Mike Kaplan

  
	
   

  	
   

  	
  Telecopier:  (602) 445-8615

  
	
   

  	
   

  	
  Telephone:  (602) 445-8313

  
	
   

  	
   

  	
  Email:  kaplanm@gtlaw.com

  
	
   

  	
   

  	
   

  
	
  The Administrative

  	
   

  	
  Wachovia Bank, National
  Association

  
	
  Agent:

  	
   

  	
  Charlotte Plaza

  
	
   

  	
   

  	
  201 South College
  Street, CP-8

  
	
   

  	
   

  	
  Charlotte, NC
  29288-0680

  
	
   

  	
   

  	
  Attention: Syndication
  Agency Services

  
	
   

  	
   

  	
  Telecopier: (704)
  383-0288

  

 

77

 

 

	
   

  	
   

  	
  with a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Wachovia Bank, National
  Association

  
	
   

  	
   

  	
  One Wachovia Center

  
	
   

  	
   

  	
  301 South College
  Street, NC0760

  
	
   

  	
   

  	
  Charlotte, NC
  28288-0737

  
	
   

  	
   

  	
  Attention:  Mr. David Hall

  
	
   

  	
   

  	
  Telecopier: (704)
  383-6647

  
	
   

  	
   

  	
  Telephone:  (704) 383-3727

  
	
   

  	
   

  	
  Email:  david.hall@wachovia.com

  

 

Section 9.3                                   No
Waiver; Cumulative Remedies.

 

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

 

Section 9.4                                   Survival
of Representations and Warranties.

 

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

 

Section 9.5                                   Payment
of Expenses and Taxes.

 

The Borrower agrees (a)
to pay or reimburse the Administrative Agent for all its reasonable
out-of-pocket costs and expenses incurred in connection with the development,
preparation, negotiation, printing and execution of, and any amendment,
supplement or modification to, this Agreement and the other Credit Documents
and any other documents prepared in connection herewith or therewith, and the
consummation and administration of the transactions contemplated hereby and
thereby, together with the reasonable fees and disbursements of counsel to the
Administrative Agent or (b) to pay or reimburse each Lender and the
Administrative Agent for all its costs and expenses incurred in connection with
the enforcement or preservation of any rights under this Agreement, the Notes
and any such other documents, including, without limitation, the reasonable
fees and disbursements of counsel to the Administrative Agent and to the
Lenders (including reasonable allocated costs of in-house legal counsel), and
(c) on demand, to pay, indemnify, and hold each Lender and the Administrative
Agent harmless from, any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other similar taxes, if any, which may be payable or determined to
be payable in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,

 

78

 

supplement or
modification of, or any waiver or consent under or in respect of, the Credit
Documents and any such other documents, and (d) to pay, indemnify, and hold
each Lender and the Administrative Agent and their Affiliates harmless from and
against, any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of the Credit Documents and any such other
documents and the use, or proposed use, of proceeds of the Loans (all of the
foregoing, collectively, the “indemnified liabilities”); provided,
however, that the Borrower shall not have any obligation hereunder to the
Administrative Agent or any Lender with respect to indemnified liabilities
arising from the gross negligence or willful misconduct of the Administrative
Agent or any such Lender, as determined by a court of competent jurisdiction.  The agreements in this Section 9.5 shall
survive repayment of the Loans, Notes and all other amounts payable hereunder.

 

Section 9.6                                   Successors
and Assigns; Participations; Purchasing Lenders.

 

(a)                                  This
Agreement shall be binding upon and inure to the benefit of the Borrower, the
Lenders, the Administrative Agent, all future holders of the Notes and their
respective successors and assigns, except that the Borrower may only assign or
transfer any of its rights or obligations under this Agreement or the other
Credit Documents (i) in connection with the Reincorporation Merger pursuant to
the terms set forth in Section 6.5 or (ii) with the prior written consent of
each Lender.

 

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

 

79

 

of the collateral, or
(iv) consent to the assignment or transfer by the Borrower of any of its rights
and obligations under this Agreement.  In
the case of any such participation, the Participant shall not have any rights
under this Agreement or any of the other Credit Documents (the Participant’s
rights against such Lender in respect of such participation to be those set
forth in the agreement executed by such Lender in favor of the Participant
relating thereto) and all amounts payable by the Borrower hereunder shall be
determined as if such Lender had not sold such participation, provided
that each Participant shall be entitled to the benefits of Sections 2.16, 2.17,
2.18 and 9.5 with respect to its participation in the Commitments and the Loans
outstanding from time to time; provided, that no Participant shall be
entitled to receive any greater amount pursuant to such Sections than the
transferor Lender would have been entitled to receive in respect of the amount
of the participation transferred by such transferor Lender to such Participant
had no such transfer occurred.

 

(c)                                  Any
Lender may, in the ordinary course of its commercial banking business and in
accordance with applicable law, at any time, sell or assign to any Lender or
any affiliate thereof and with the consent of the Administrative Agent and, so
long as no Event of Default has occurred and is continuing, the Borrower (in
each case, which consent shall not be unreasonably withheld), to one or more
additional banks or financial institutions (“Purchasing Lenders”), all
or any part of its rights and obligations under this Agreement and the Notes in
minimum amounts of $5,000,000 with respect to its Revolving Commitment, its
Revolving Loans (or, if less, the entire amount of such Lender’s obligations),
pursuant to a Commitment Transfer Supplement, executed by such Purchasing
Lender and such transferor Lender (and, in the case of a Purchasing Lender that
is not then a Lender or an affiliate thereof, the Administrative Agent and, so
long as no Event of Default has occurred and is continuing, the Borrower), and
delivered to the Administrative Agent for its acceptance and recording in the
Register; provided, however, that any sale or assignment to an
existing Lender shall not require the consent of the Administrative Agent or
the Borrower nor shall any such sale or assignment be subject to the minimum
assignment amounts specified herein. 
Upon such execution, delivery, acceptance and recording, from and after
the Transfer Effective Date specified in such Commitment Transfer Supplement,
(x) the Purchasing Lender thereunder shall be a party hereto and, to the extent
provided in such Commitment Transfer Supplement, have the rights and
obligations of a Lender hereunder with a Commitment as set forth therein, and
(y) the transferor Lender thereunder shall, to the extent provided in such
Commitment Transfer Supplement, be released from its obligations under this
Agreement (and, in the case of a Commitment Transfer Supplement covering all or
the remaining portion of a transferor Lender’s rights and obligations under
this Agreement, such transferor Lender shall cease to be a party hereto).  Such Commitment Transfer Supplement shall be
deemed to amend this Agreement to the extent, and only to the extent, necessary
to reflect the addition of such Purchasing Lender and the resulting adjustment
of Commitment Percentages arising from the purchase by such Purchasing Lender
of all or a portion of the rights and obligations of such transferor Lender
under this Agreement and the Notes.  On
or prior to the Transfer Effective Date specified in such Commitment Transfer
Supplement, the Borrower, at its own expense, shall execute and deliver to the
Administrative Agent in exchange for the Notes delivered to the

 

80

 

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

 

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

 

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

 

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

 

(g)                                 At
the time of each assignment pursuant to this Section 9.6 to a Person which is
not already a Lender hereunder and which is not a United States person (as such
term is defined in Section 7701(a)(30) of the Code) for Federal income tax
purposes, the respective assignee Lender shall provide to the Borrower and the
Administrative Agent the appropriate Internal Revenue Service Forms (and, if
applicable, a 2.18 Certificate) described in Section 2.19.

 

81

 

(h)                                 Nothing
herein shall prohibit any Lender from pledging or assigning any of its rights
under this Agreement (including, without limitation, any right to payment of
principal and interest under any Note) to any Federal Reserve Bank in
accordance with applicable laws.

 

Section 9.7                                   Adjustments;
Set-off.

 

(a)                                  Each
Lender agrees that if any Lender (a “benefited Lender”) shall at any
time receive any payment of all or part of its Loans, or interest thereon, or
receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 7.1(e), or otherwise) in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in respect
of such other Lender’s Loans, or interest thereon, such benefited Lender shall
purchase for cash from the other Lenders a participating interest in such
portion of each such other Lender’s Loan, or shall provide such other Lenders
with the benefits of any such collateral, or the proceeds thereof, as shall be
necessary to cause such benefited Lender to share the excess payment or
benefits of such collateral or proceeds ratably with each of the Lenders; provided,
however, that if all or any portion of such excess payment or benefits
is thereafter recovered from such benefited Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest.  The
Borrower agrees that each Lender so purchasing a portion of another Lender’s
Loans may exercise all rights of payment (including, without limitation, rights
of set-off) with respect to such portion as fully as if such Lender were the
direct holder of such portion.

 

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

 

82

 

notwithstanding the fact
that such right of set-off shall not have been exercised by such Lender prior
to the occurrence of any Event of Default. 
Each Lender agrees promptly to notify the Borrower and the Administrative
Agent after any such set-off and application made by such Lender; provided,
however, that the failure to give such notice shall not affect the
validity of such set-off and application.

 

Section 9.8                                   Table
of Contents and Section Headings.

 

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

 

Section 9.9                                   Counterparts.

 

This Agreement may be
executed by one or more of the parties to this Agreement on any number of
separate counterparts, and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.  A set of the copies of this Agreement signed
by all the parties shall be lodged with the Borrower and the Administrative
Agent.

 

Section 9.10                            Effectiveness.

 

This Agreement shall
become effective on the date on which all of the parties have signed a copy
hereof (whether the same or different copies) and shall have delivered the same
to the Administrative Agent pursuant to Section 9.2 or, in the case of
the Lenders, shall have given to the Administrative Agent written, telecopied
or telex notice (actually received) at such office that the same has been
signed and mailed to it.

 

Section 9.11                            Severability.

 

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

 

Section 9.12                            Integration.

 

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

 

83

 

Section 9.13                            Governing
Law.

 

This Agreement and the
Notes and the rights and obligations of the parties under this Agreement and
the Notes shall be governed by, and construed and interpreted in accordance
with, the law of the State of North Carolina.

 

Section 9.14                            Consent
to Jurisdiction and Service of Process.

 

All judicial proceedings
brought against the Borrower and/or any other Credit Party with respect to this
Agreement, any Note or any of the other Credit Documents may be brought in any
state or federal court of competent jurisdiction in the State of North
Carolina, and, by execution and delivery of this Agreement, each of the
Borrower and the other Credit Parties accepts, for itself and in connection
with its properties, generally and unconditionally, the non-exclusive
jurisdiction of the aforesaid courts and irrevocably agrees to be bound by any
final judgment rendered thereby in connection with this Agreement from which no
appeal has been taken or is available. 
Each of the Borrower and the other Credit Parties irrevocably agrees
that all service of process in any such proceedings in any such court may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to it at its address set
forth in Section 9.2 or at such other address of which the Administrative Agent
shall have been notified pursuant thereto, such service being hereby
acknowledged by the each of the Borrower and the other Credit Parties to be
effective and binding service in every respect. 
Each of the Borrower, the other Credit Parties, the Administrative Agent
and the Lenders irrevocably waives any objection, including, without
limitation, any objection to the laying of venue or based on the grounds of
forum non conveniens which it may now or hereafter have to the bringing of any
such action or proceeding in any such jurisdiction.  Nothing herein shall affect the right to
serve process in any other manner permitted by law or shall limit the right of
any Lender to bring proceedings against the Borrower or the other Credit
Parties in the court of any other jurisdiction.

 

Section 9.15                            Confidentiality.

 

The Administrative Agent
and each of the Lenders agrees that it will use its best efforts not to
disclose without the prior consent of the Borrower (other than to its
employees, affiliates, auditors or counsel or to another Lender) any
information with respect to the Borrower and its Subsidiaries which is furnished
pursuant to this Agreement, any other Credit Document or any documents
contemplated by or referred to herein or therein and which is designated by the
Borrower to the Lenders in writing as confidential or as to which it is
otherwise reasonably clear such information is not public, except that any
Lender may disclose any such information (a) as has become generally available
to the public other than by a breach of this Section 9.16, (b) as may be
required or appropriate in any report, statement or testimony submitted to any
municipal, state or federal regulatory body having or claiming to have
jurisdiction over such Lender or to the Federal Reserve Board or the Federal
Deposit Insurance Corporation or the OCC or the NAIC or similar organizations
(whether in the United States or elsewhere) or their successors, (c) as may be
required or appropriate in response to any summons or subpoena or any law,
order, regulation or ruling applicable to such Lender, (d) to any prospective
Participant or assignee in connection with any contemplated transfer pursuant
to Section 9.6, provided that such prospective transferee shall have
been made aware of this Section 9.16 and shall have agreed to

 

84

 

be bound by its
provisions as if it were a party to this Agreement or (e) with the consent of
the Borrower (which consent shall not be unreasonably withheld) to Gold
Sheets and other similar bank trade publications; such information to
consist of deal terms and other information regarding the credit facilities
evidenced by this Agreement customarily found in such publications.

 

Section 9.16                            Acknowledgments.

 

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

 

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

 

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

 

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

 

Section 9.17                            Intentionally
Omitted.

 

Section 9.18                            Waivers
of Jury Trial.

 

THE BORROWER, THE OTHER
CREDIT PARTIES, THE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY JURY
IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

Section 9.19                            Binding
Effect; Termination of this Agreement; Termination of Existing Credit Agreement.

 

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

 

(b)                                 The
term of this Agreement shall be until no Loans, LOC Obligations or any other
amounts payable hereunder or under any of the other Credit Documents shall
remain outstanding, no Letters of Credit shall be outstanding, all of the
Credit Party Obligations have been irrevocably satisfied in full and all of the
Commitments hereunder shall have expired or been terminated.

 

85

 

(c)                                  The
Credit Parties and the Existing Lenders (including the Issuing Lender) party to
the Existing Credit Agreement each hereby agrees that, at such time as the Agreement
shall have become effective pursuant to the terms of subsection (a) above, (i)
the Existing Credit Agreement automatically shall be deemed amended and
restated in its entirety by this Agreement, (ii) the Commitments under the
Existing Credit Agreement and as defined therein automatically shall be
terminated and replaced with the Commitments hereunder and (iii) all of the
promissory notes executed by the Borrower in connection with the Existing
Credit Agreement automatically shall be canceled and replaced by the Notes.

 

Section 9.20                            USA Patriot Act Notice.

 

Each Lender and the
Administrative Agent (for itself and not on behalf of any Lender) hereby
notifies the Borrower that pursuant to the requirements of the USA Patriot Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot
Act”), it is required to obtain, verify and record information that
identifies the Borrower, which information includes the name and address of the
Borrower and other information that will allow such Lender or the
Administrative Agent, as applicable, to identify the Borrower in accordance
with the Patriot Act.

 

ARTICLE X

 

GUARANTY

 

Section 10.1                            The
Guaranty.

 

In order to induce the
Lenders to enter into this Agreement and to extend credit hereunder and in
recognition of the direct benefits to be received by the Guarantors from the
Extensions of Credit hereunder, each of the Guarantors hereby agrees with the
Administrative Agent and the Lenders as follows: the Guarantor hereby
unconditionally and irrevocably jointly and severally guarantees as primary
obligor and not merely as surety the full and prompt payment when due, whether
upon maturity, by acceleration or otherwise, of any and all Credit Party
Obligations to the Administrative Agent and the Lenders.  If any or all of the Credit Party Obligations
of the Borrower to the Administrative Agent and the Lenders becomes due and
payable hereunder, each Guarantor unconditionally promises to pay such
indebtedness to the Administrative Agent and the Lenders, on order, or demand,
together with any and all reasonable expenses which may be incurred by the
Administrative Agent or the Lenders in collecting any of the Credit Party
Obligations.

 

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

 

86

 

Section 10.2                            Bankruptcy.

 

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

 

Section 10.3                            Nature
of Liability.

 

The liability of each
Guarantor hereunder is exclusive and independent of any security for or other
guaranty of the indebtedness of the Borrower whether executed by any such
Guarantor, any other guarantor or by any other party, and no Guarantor’s
liability hereunder shall be affected or impaired by (a) any direction as to
application of payment by the Borrower or by any other party, or (b) any other
continuing or other guaranty, undertaking or maximum liability of a guarantor
or of any other party as to the indebtedness of the Borrower, or (c) any
payment on or in reduction of any such other guaranty or undertaking, or (d)
any dissolution, termination or increase, decrease or change in personnel by
the Borrower, or (e) any payment made to the Administrative Agent or the
Lenders on the indebtedness which the Administrative Agent or such Lenders
repay the Borrower pursuant to court order in any bankruptcy, reorganization,
arrangement, moratorium or other debtor relief proceeding, and each of the
Guarantors waives any right to the deferral or modification of its obligations
hereunder by reason of any such proceeding.

 

Section 10.4                            Independent
Obligation.

 

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

 

Section 10.5                            Authorization.

 

Each of the Guarantors
authorizes the Administrative Agent and each Lender without notice or demand
(except as shall be required by applicable statute and cannot be waived), and
without affecting or impairing its liability hereunder, from time to time to
(a) renew,

 

87

 

compromise, extend,
increase, accelerate or otherwise change the time for payment of, or otherwise
change the terms of the indebtedness or any part thereof in accordance with
this Agreement, including any increase or decrease of the rate of interest
thereon, (b) take and hold security from any guarantor or any other party for
the payment of this Guaranty or the indebtedness and exchange, enforce waive
and release any such security, (c) apply such security and direct the order or
manner of sale thereof as the Administrative Agent and the Lenders in their
discretion may determine and (d) release or substitute any one or more
endorsers, guarantors, the Borrower or other obligors.

 

Section 10.6                            Reliance.

 

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

 

Section 10.7                            Waiver.

 

(a)                                  Each
of the Guarantors waives any right (except as shall be required by applicable
statute and cannot be waived) to require the Administrative Agent or any Lender
to (i) proceed against the Borrower, any other guarantor or any other party,
(ii) proceed against or exhaust any security held from the Borrower, any other
guarantor or any other party, or (iii) pursue any other remedy in the
Administrative Agent’s or any Lender’s power whatsoever.  Each of the Guarantors waives any defense
based on or arising out of any defense of the Borrower, any other guarantor or
any other party other than payment in full of the indebtedness, including without
limitation any defense based on or arising out of the disability of the
Borrower, any other guarantor or any other party, or the unenforceability of
the indebtedness or any part thereof from any cause, or the cessation from any
cause of the liability of the Borrower other than payment in full of the
indebtedness.  Without limiting the
generality of the provisions of this Article X, each of the Guarantors hereby
specifically waives the benefits of N.C. Gen. Stat. § 26-7 through 26-9,
inclusive.  The Administrative Agent or
any of the Lenders may, at their election, foreclose on any security held by
the Administrative Agent or a Lender by one or more judicial or nonjudicial
sales, whether or not every aspect of any such sale is commercially reasonable
(to the extent such sale is permitted by applicable law), or exercise any other
right or remedy the Administrative Agent and any Lender may have against the
Borrower or any other party, or any security, without affecting or impairing in
any way the liability of any Guarantor hereunder except to the extent the
indebtedness has been paid.  Each of the
Guarantors waives any defense arising out of any such election by the
Administrative Agent and each of the Lenders, even though such election
operates to impair or extinguish any right of reimbursement or subrogation or
other right or remedy of the Guarantors against the Borrower or any other party
or any security.

 

(b)                                 Each
of the Guarantors waives all presentments, demands for performance, protests
and notices, including without limitation notices of nonperformance, notice of
protest, notices of dishonor, notices of acceptance of this

 

88

 

Guaranty, and notices of
the existence, creation or incurring of new or additional indebtedness.  Each Guarantor assumes all responsibility for
being and keeping itself informed of the Borrower’s financial condition and
assets, and of all other circumstances bearing upon the risk of nonpayment of
the indebtedness and the nature, scope and extent of the risks which such
Guarantor assumes and incurs hereunder, and agrees that neither the
Administrative Agent nor any Lender shall have any duty to advise such
Guarantor of information known to it regarding such circumstances or risks.

 

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

 

Section 10.8                            Limitation
on Enforcement.

 

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

 

Section 10.9                            Confirmation
of Payment.

 

The Administrative Agent
and the Lenders will, upon request after payment of the indebtedness and
obligations which are the subject of this Guaranty and termination of the
Commitments relating thereto, confirm to the Borrower, the Guarantors or any
other Person that the such indebtedness and obligations have been paid and the
Commitments relating thereto terminated, subject to the provisions of Section 10.2.

 

Section 10.10                     California
Waivers.

 

Without limiting the
generality of the foregoing, each Guarantor waives all rights and defenses that
such Guarantor may have because the Credit Party obligations are secured by
real

 

89

 

property.  This means, among other things: (1) the
administrative agent or the lenders may collect from such Guarantor without
first foreclosing on any real or personal property collateral pledged by the
Borrower or any other Credit Party; (2) if the administrative agent or the
lenders foreclose on any real property collateral pledged by the Borrower or
any other Credit Party: (A) the amount of the obligations may be reduced only
by the price for which that collateral is sold at the foreclosure sale, even if
the collateral is worth more than the sale price; (B) the administrative agent
or the lenders may collect from such Guarantor even if the administrative agent
or the Lenders, by foreclosing on the real property collateral, have destroyed
any right such Guarantor may have to collect from the Borrower or any other
Credit Party.  This is an unconditional
and irrevocable waiver of any rights and defenses such Guarantor may have
because the Credit Party obligations are secured by real property.  These rights and defenses include, but are
not limited to, any rights or defenses based upon Section 580a, 580b, 580d, or
726 of the California Code of Civil Procedure (the “CCP”).

 

In addition, each
Guarantor waives all rights and defenses arising out of an election of remedies
by the Administrative Agent or the Lenders, even though that election of
remedies, such as a nonjudicial foreclosure with respect to security for a
guaranteed obligation, has destroyed such Guarantor’s rights by the operation of
Section 580d of the CPC or otherwise.

 

90

 

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

 

	
  BORROWER:

  	
  TTM TECHNOLOGIES, INC.,

  a Washington corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  GUARANTORS:

  	
  POWER
  CIRCUITS, INC.,

  a California corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TTM
  ADVANCED CIRCUITS, INC.,

  a Minnesota corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TTM
  TECHNOLOGIES, INC.,

  a Delaware corporation

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TTM
  TECHNOLOGIES INTERNATIONAL, INC.,

  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 

	
  AGENT AND LENDERS:

  	
  WACHOVIA
  BANK, NATIONAL ASSOCIATION,

  as Administrative Agent and as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 

[OTHER
LENDERS]

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