LOAN AND SECURITY AGREEMENT

Exhibit 10.1

EXECUTION COPY

 

$600,000,000

LOAN AND SECURITY AGREEMENT

Dated as of September 2, 2009

by and among

MOHAWK INDUSTRIES, INC.

and

CERTAIN OF ITS SUBSIDIARIES,

as Borrowers,

CERTAIN OF ITS SUBSIDIARIES,

as Guarantors,

THE LENDERS FROM TIME TO TIME PARTY HERETO,

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Administrative Agent,

JPMORGAN CHASE BANK, N.A.,

SUNTRUST BANK

and

BANK OF AMERICA, N.A.,

each, as a Syndication Agent

 

WELLS FARGO SECURITIES, LLC, J.P. MORGAN SECURITIES INC.,

SUNTRUST ROBINSON HUMPHREY, INC. and BANC OF AMERICA SECURITIES LLC,

as Joint Lead Arrangers

 

WELLS FARGO SECURITIES, LLC, J.P. MORGAN SECURITIES INC.,

SUNTRUST ROBINSON HUMPHREY, INC., BANC OF AMERICA SECURITIES LLC,

BARCLAYS BANK PLC, DEUTSCHE BANK SECURITIES INC. and

REGIONS BUSINESS CAPITAL CORPORATION,

as Joint Bookrunners

 

TABLE OF CONTENTS

 

 

i

TABLE OF CONTENTS

continued

 

 

ii

TABLE OF CONTENTS

continued

 

 

iii

TABLE OF CONTENTS

continued

 

 

iv

INDEX TO EXHIBITS AND SCHEDULES

 

 

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LOAN AND SECURITY AGREEMENT

This Loan and Security Agreement dated as of September 2, 2009 is entered into by and among MOHAWK INDUSTRIES, INC., a Delaware corporation (the “ Company ”), those Subsidiaries of the Company identified as “Borrowers” on the signature pages hereto and any additional Subsidiary of the Company that becomes a party hereto as a “Borrower” in accordance with the terms hereof (together with the Company, the “ Borrowers ”), those Subsidiaries of the Company identified as “Guarantors” on the signature pages hereto and each additional Subsidiary of the Company that becomes a party hereto as a “Guarantor” (collectively, the “ Guarantors ”), the parties hereto from time to time as lenders, whether by execution of this Agreement or an Assignment and Assumption (collectively, the “ Lenders ” as hereinafter further defined) and WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association, in its capacity as administrative agent for the Lenders (in such capacity, the “ Administrative Agent ” as hereinafter further defined) and in its capacity as issuing bank for letters of credit hereunder (in such capacity, “ Issuing Bank ” as hereinafter further defined).

W I T N E S S E T H :

WHEREAS, the Borrowers have requested that the Administrative Agent and the Lenders enter into financing arrangements with the Borrowers pursuant to which the Lenders may make loans and provide other financial accommodations to the Borrowers; and

WHEREAS, each Lender is willing to agree (severally and not jointly) to make such loans and provide such financial accommodations to the Borrowers on a pro rata basis according to its Commitment (as defined below) on the terms and conditions set forth herein and the Administrative Agent is willing to act as administrative agent for the Lenders on the terms and conditions set forth herein and the other Loan Documents;

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

ARTICLE 1

DEFINITIONS

Section 1.1 Defined Terms . For purposes of this Agreement, the following terms have the respective meanings given to them below:

“ 2011 Indenture ” means that certain Indenture dated as of January 9, 2006, by and between the Company and SunTrust Bank as trustee, as amended, restated, supplemented or otherwise modified through the date hereof pursuant to which certain notes of the Company in the aggregate original principal amount of $500,000,000 had been issued.

“ 2011 Notes ” means the Company’s outstanding 5.75% senior notes due January 15, 2011 issued pursuant to the 2011 Indenture outstanding on the Closing Date.

“ 2012 Indenture ” means that certain Indenture dated as of April 2, 2002, by and between the Company and Wachovia as trustee, as amended, restated, supplemented or otherwise modified through the date hereof pursuant to which certain notes of the Company in the aggregate original principal amount of $400,000,000 had been issued.

“ 2012 Notes ” means the Company’s outstanding 7.20% senior notes due April 15, 2012 issued pursuant to the 2012 Indenture outstanding on the Closing Date.

“ Accounts ” means, as to each Loan Party, all present and future accounts, as defined in the UCC, of such Loan Party.

“ Acquisition ” means any transaction or series of related transactions for the purpose of resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the assets of a Person, or all or substantially all of any business unit, division, product line or line of business of any Person, (b) the acquisition in excess of fifty percent (50%) of the Capital Stock of any Person, or otherwise causing any Person to become a Subsidiary or (c) a merger or consolidation or any other combination with another Person (other than a Person that is already a Subsidiary).

“ Acquisition Compliance Certificate ” means a certificate substantially in the form of Exhibit K hereto delivered by a Responsible Officer of the Company pursuant to clause (i) of the definition of Permitted Acquisition, which certificate shall confirm satisfaction of each of the conditions precedent set forth in the definition of Permitted Acquisition and shall include reasonably detailed calculations demonstrating satisfaction of the requirements set forth in clause (d) therein.

“ Additional Issuing Bank ” means up to two (2) Lenders, in addition to the Administrative Agent, each designated by the Administrative Borrower as an additional issuer of Letters of Credit pursuant to Section 2.3(j) .

“ Adjusted Eurodollar Rate ” means, with respect to each Interest Period for any Eurodollar Rate Loan comprising part of the same borrowing (including conversions, extensions and renewals), the rate per annum determined by dividing (a) the LIBOR Rate for such Interest Period by (b) a percentage equal to: (i) one (1)  minus (ii) the Reserve Percentage. For purposes hereof, “ Reserve Percentage ” means for any day, that percentage (expressed as a decimal) which is in effect from time to time under Regulation D of the Board of Governors of the Federal Reserve System (or any successor), as such regulation may be amended from time to time or any successor regulation, as the maximum reserve requirement (including, without limitation, any basic, supplemental, emergency, special, or marginal reserves) applicable with respect to Eurocurrency liabilities as that term is defined in Regulation D (or against any other category of liabilities that includes deposits by reference to which the interest rate of Eurodollar Rate Loans is determined), whether or not any Lender has any Eurocurrency liabilities subject to such reserve requirement at that time. Eurodollar Rate Loans shall be deemed to constitute Eurocurrency liabilities and as such shall be deemed subject to reserve requirements without benefits of credits for proration, exceptions or offsets that may be available from time to time to a Lender. The Adjusted Eurodollar Rate shall be adjusted automatically on and as of the effective date of any change in the Reserve Percentage.

“ Administrative Agent ” means Wachovia Bank, National Association, in its capacity as administrative agent on behalf of the Lenders pursuant to the terms hereof and any replacement or successor agent hereunder.

“ Administrative Agent Payment Account ” means the account of the Administrative Agent as the Administrative Agent may from time to time designate to the Administrative Borrower as the Administrative Agent Payment Account for purposes of this Agreement and the other Loan Documents.

“ Administrative Borrower ” means the Company, in its capacity as the administrative borrower on behalf of itself and the other the Borrowers pursuant to Section 2.10 and its successors and assigns in such capacity.

 

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“ Affiliate ” means, with respect to a specified Person, any other Person that directly or indirectly, through one or more intermediaries, controls or is controlled by or is under common control with such Person, and without limiting the generality of the foregoing, includes (a) any Person which beneficially owns or holds five percent (5%) or more of any class of Voting Stock of such Person or other equity interests in such Person, (b) any Person of which such Person beneficially owns or holds five percent (5%) or more of any class of Voting Stock or in which such Person beneficially owns or holds five percent (5%) or more of the equity interests, and (c) any director or executive officer of such Person and (d) solely for purposes of Section 10.7 , any Affiliate (as described in clause (b) above) of any director or executive officer of the Company. For the purposes of this definition, the term “control” (including with correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of Voting Stock, by agreement or otherwise.

“ Aggregate Commitment ” means the aggregate Commitments of all of the Lenders hereunder, as such amount may be increased, reduced or otherwise modified pursuant to the terms of this Agreement. The Aggregate Commitment on the Closing Date shall be $600,000,000.

“ Agreement ” means, on any date, this Loan and Security Agreement as originally in effect on the Closing Date and as thereafter from time to time amended, supplemented, amended and restated or otherwise modified from time to time and in effect on such date.

“ Alternative Currency ” means (a) Euro, (b) Sterling, (c) Canadian Dollar and (d) with the prior written consent of the applicable Issuing Bank, any other lawful currency (other than Dollars); provided that in each case of (a) through (d) above, such currency is freely transferable and convertible into Dollars in the United States currency market and freely available to the applicable Issuing Bank in the London interbank deposit market.

“ Alternative Currency Letter of Credit ” means any Letter of Credit denominated in an Alternative Currency.

“ Alternative Currency Letter of Credit Obligations ” means, at any time, the sum of (a) the aggregate undrawn amount of all Alternative Currency Letters of Credit outstanding at such time, plus (b) the aggregate amount of all drawings under Alternative Currency Letters of Credit for which any Issuing Bank has not at such time been reimbursed, plus (c) without duplication, the aggregate amount of all payments made by each Lender to each Issuing Bank with respect to such Lender’s participation in Alternative Currency Letters of Credit as provided in Section 2.3 for which the Borrowers have not at such time reimbursed the Lenders, whether by way of a Loan or otherwise.

“ Alternative Currency Letter of Credit Sublimit ” means an amount equal to the lesser of the Letter of Credit Limit and $25,000,000.

 

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“ Applicable Margin ” means for Eurodollar Rate Loans, Swingline Loans and Base Rate Loans, the appropriate applicable percentages corresponding to the Level of Average Excess Availability determined as of the most recent Calculation Date as shown below:

 

The Applicable Margin shall be determined and adjusted quarterly on the date (each a “ Calculation Date ”) five (5) Business Days after the date on which the Administrative Borrower provides the monthly Borrowing Base Certificate in accordance with the provisions of Section 7.1(a) for the last month of the applicable quarterly period; provided that (i) the initial Applicable Margin shall be based on Level 3 (as shown above) and shall remain at Level 3 until the first Calculation Date that occurs after the Closing Date, and, thereafter, the Level shall be determined by the Average Excess Availability for the applicable quarterly period, and (ii) if the Administrative Borrower fails to provide the monthly Borrowing Base Certificate to the Administrative Agent as required by and within the time limits set forth in Section 7.1(a) or an Event of Default shall have occurred and be continuing, the Applicable Margin shall be based on Level 1 until five (5) Business Days after the applicable monthly Borrowing Base Certificate is provided or such Event of Default is no longer continuing, whereupon the Level shall be determined by the Average Excess Availability as of the most recent Calculation Date. Except as set forth above, each Applicable Margin shall be effective from one Calculation Date until the next Calculation Date.

“ Approved Fund ” means any Person (other than a natural Person), including without limitation, any special purpose entity, that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business; provided that any such Approved Fund must be administered, managed or underwritten by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

“ Assignment and Assumption ” means an Assignment and Assumption substantially in the form of Exhibit A hereto (with blanks appropriately completed) delivered to the Administrative Agent in connection with an assignment of a Lender’s interest hereunder in accordance with the provisions of Section 14.11 .

“ Average Excess Availability ” means, as of the end of each calendar quarter, the daily average amount (calculated for such calendar quarter) of Excess Availability.

“ Bank Product Amount ” has the meaning given to such term in the definition of Bank Products.

“ Bank Product Provider ” means any Person that, at the time it provides any Bank Products to Loan Parties, is a Lender or an Affiliate of a Lender. In no event shall any Bank Product Provider acting in such capacity be deemed a Lender for purposes hereof to the extent of and as to Bank Products except that each reference to the term “Lender” in Sections 12.1 , 12.2 , 12.3(b) , 12.6 , 12.7 , 12.8 , 12.11 and 14.10

 

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shall be deemed to include such Bank Product Provider and in no event shall the approval of any such person in its capacity as Bank Product Provider be required in connection with the release or termination of any security interest or Lien of the Administrative Agent.

“ Bank Products ” means any one or more of the following types or services or facilities provided to a Loan Party by a Bank Product Provider: (a) purchasing cards, commercial cards, credit cards or stored value cards, (b) cash management or related services, including (i) the automated clearinghouse transfer of funds for the account of a Loan Party pursuant to agreement or overdraft for any accounts of a Loan Party maintained at the Administrative Agent or any Bank Product Provider that are subject to the control of the Administrative Agent pursuant to any Deposit Account Control Agreement to which the Administrative Agent or such Bank Product Provider is a party, as applicable, (ii) controlled disbursement services and (iii) E-payables or comparable services, and (c) Hedge Agreements if and to the extent permitted hereunder. In connection with any Bank Product, each Bank Product Provider, other than Wachovia and its Affiliates, shall provide written notice to the Administrative Agent prior to entering into a Bank Product of (x) the existence of such Bank Product, (y) the maximum dollar amount of obligations arising thereunder (the “ Bank Product Amount ”) and (z) the methodology to be used by such parties in determining the obligations under such Bank Product from time to time. The Bank Product Amount may be changed from time to time upon written notice to the Administrative Agent by the applicable Bank Product Provider. No Bank Product Amount may be established at any time that a Default or Event of Default exists, or if a reserve in such amount would cause an Overadvance.

“ Base Rate ” means, on any date, the greatest of (a) the rate from time to time publicly announced by Wachovia, or its successors, as its prime rate, whether or not such announced rate is the best rate available at such bank, (b) the Federal Funds Rate in effect on such day plus one-half percent (0.50%) and (c) the LIBOR Rate for a one month Interest Period on such day plus one and one-half percent (1.50%) ( provided that if the LIBOR Rate is not available on such date as described in Article 4 or otherwise, the most recently available LIBOR Rate for a one month Interest Period shall be used).

“ Base Rate Loans ” means any Loan made to a Borrower that bears interest based on the Base Rate.

“ Blocked Accounts ” has the meaning given to such term in Section 6.3(a) .

“ Borrower ” and “ Borrowers ” have the meanings given to such terms in the preamble hereof.

“ Borrowing Base ” means, as of any date of calculation, the amount equal to:

(a) eighty-five percent (85%) of Eligible Accounts; plus

(b) the least of (i) sixty-five percent (65%)  multiplied by the Value of Eligible Inventory, (ii) eighty-five (85%) of the Net Recovery Percentage multiplied by the Value of such Eligible Inventory or (iii) the amount calculated in clause (a) above; minus

(c) Reserves.

“ Borrowing Base Certificate ” means a borrowing base certificate in substantially the form of Exhibit B hereto.

“ Business Day ” means any day other than a Saturday, Sunday, or other day on which commercial banks are authorized or required to close under the laws of the State of New York or the State of North Carolina, and a day on which the Administrative Agent is open for the transaction of business, except that

 

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if a determination of a Business Day shall relate to any Eurodollar Rate Loans or Swingline Loans, the term Business Day shall also exclude any day on which banks are closed for dealings in Dollar deposits in the London interbank market or other applicable Eurodollar Rate market.

“ Calculation Date ” has the meaning given to such term in the definition of Applicable Margin.

“ Canadian Dollars ” means the lawful currency of Canada.

“ Capital Expenditures ” means expenditures for the acquisition (including the acquisition by capitalized lease) or improvement of capital assets, as determined in accordance with GAAP; provided that “Capital Expenditures” shall not include, to the extent otherwise included therein, any Acquisition.

“ Capital Leases ” means, as applied to any Person, any lease of (or any agreement conveying the right to use) any property (whether real, personal or mixed) by such Person as lessee which in accordance with GAAP, is required to be reflected as a liability on the balance sheet of such Person. Notwithstanding the foregoing and Section 1.2(g) , any obligations of a Person under a lease (whether existing now or entered into in the future) that is not (or would not be) a Capital Lease under GAAP as in effect on the Closing Date, shall not be treated as a Capital Lease solely as a result of the adoption of changes in GAAP outlined by the Financial Accounting Standards Board in its press release dated March 19, 2009.

“ Capital Stock ” means, with respect to any Person, any and all shares, interests, participations or other equivalents (however designated) of such Person’s capital stock or partnership, limited liability company or other equity interests at any time outstanding, and any and all rights, warrants or options exchangeable for or convertible into such capital stock or other interests (but excluding any debt security that is exchangeable for or convertible into such capital stock).

“ Cash Dominion Period ” means (a) any period during which any Event of Default shall have occurred and be continuing and (b) each period commencing on a date that either (i) Excess Availability has been less than the Threshold Amount for a period of three (3) consecutive Business Days (such period, the “ Cash Dominion Grace Period ”) or (ii) Excess Availability is less than the Threshold Amount and the Company has waived application of the Cash Dominion Grace Period, and continuing until the date Excess Availability shall have been equal to or greater than the Threshold Amount for forty-five (45) consecutive calendar days (unless the Administrative Agent has determined that the circumstances surrounding such Cash Dominion Period cease to exist); provided that a Cash Dominion Period commencing under clause (b) may be discontinued no more than two (2) times in any period of twelve (12) consecutive months.

“ Cash Equivalents ” means, at any time, (a) any evidence of Indebtedness with a maturity date of ninety (90) days or less 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; (b) certificates of deposit or bankers’ acceptances with a maturity of ninety (90) days or less of any financial institution that is a member of the Federal Reserve System having combined capital and surplus and undivided profits of not less than $1,000,000,000; (c) commercial paper (including variable rate demand notes) with a maturity of ninety (90) days or less issued by a corporation (except an Affiliate of any Loan Party) organized under the laws of any State of the United States of America or the District of Columbia and rated at least A-1 by S&P or at least P-1 by Moody’s; (d) repurchase obligations with a term of not more than thirty (30) days for underlying securities of the types described in clause (a) above entered into with any financial institution having combined capital and surplus and undivided profits of not less than $1,000,000,000; (e) repurchase agreements and reverse repurchase agreements relating to marketable direct obligations issued or unconditionally guaranteed by the United States of America or issued by any governmental agency

 

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thereof and backed by the full faith and credit of the United States of America, in each case maturing within ninety (90) days or less from the date of acquisition; provided that the terms of such agreements comply with the guidelines set forth in the Federal Financial Agreements of Depository Institutions with Securities Dealers and Others, as adopted by the Comptroller of the Currency on October 31, 1985; (f) investments in money market funds and mutual funds which invest substantially all of their assets in securities of the types described in clauses (a) through (e) above; (g) investments in bond and equity funds which funds have a Morningstar rating of four or higher and a term not in excess of twelve months; and (h) any other investments made by the Loan Parties or their Domestic Subsidiaries in securities having a maturity of twelve months or less which investments are made in accordance with the terms of an internal investment policy which policy shall be reasonably satisfactory to the Administrative Agent. For the avoidance of doubt, auction rate securities shall not constitute “Cash Equivalents”.

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

“ Change of Control ” means (a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than a Permitted Holder, becoming the ultimate “beneficial owner” (as such term is used in Rules 13d-3 and 13d-5 under the Exchange Act, except that for purposes of this clause (a) such person or group shall be deemed to have “beneficial ownership” of all shares that any such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than thirty percent (30%) of the Voting Stock in the Company; or (b) during any year following the Closing Date, individuals who at the beginning of such year constituted the board of directors of the Company (together with any new directors whose election to the board of directors or whose nomination for election by the equityholders of the Company was approved by a vote of at least a majority of the members of the board of directors then still in office who were either directors at the beginning of such year or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the board of directors of the Company then still in office; or (c) except as otherwise permitted pursuant to Section 10.4 or 10.5 , the failure of the Company to, directly or indirectly, own and control one hundred percent (100%) of each class of the Capital Stock of each Borrower (other than the Company).

“ Closing Date ” means the date on which the conditions specified in Section 5.1 are satisfied (or waived in accordance with Section 14.2 ).

“ Code ” means the Internal Revenue Code of 1986, as the same now exists or may from time to time hereafter be amended, modified, recodified or supplemented, together with all rules, regulations and interpretations thereunder or related thereto.

“ Collateral ” has the meaning given to such term in Section 6.1 .

“ Collateral Access Agreement ” means an agreement in writing, in form and substance reasonably satisfactory to the Administrative Agent, from a lessor of premises to any Loan Party, or another person to whom any Collateral is consigned or who has custody, control or possession of any such Collateral or is otherwise the owner or operator of a premises on which any of such Collateral is located, in favor of the Administrative Agent with respect to the Collateral at such premises or otherwise in the custody, control or possession of such lessor, consignee or other person.

 

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“ Commitment ” means, at any time, as to each Lender, the principal amount set forth beside such Lender’s name on Schedule 1.1(a) or in the Assignment and Assumption Agreement pursuant to which such Lender became a Lender hereunder in accordance with the provisions of Section 14.11 , as the same may be adjusted from time to time in accordance with the terms hereof.

“ Commitment Fee ” has the meaning given to such term in Section 3.2(a) .

“ Commitment Fee Rate ” means, on any date of calculation, (a) if Average Excess Availability during the immediately preceding calendar quarter (or part thereof) is equal to or greater than fifty percent (50%) of the Aggregate Commitment then in effect, one percent (1.00%) per annum or (b) if Average Excess Availability during the immediately preceding calendar quarter (or part thereof) is less than fifty percent (50%) of the Aggregate Commitment then in effect, three-quarters of one percent (0.75%) per annum.

“ Company ” has the meaning given to such term in the preamble.

“ Compliance Certificate ” means a compliance certificate substantially in the form of Exhibit C hereto.

“ Consolidated Cash Taxes ” means, for any applicable period of computation, the sum of all income taxes paid in cash by the Company and its Subsidiaries during such period (net of all income tax refunds and credits received in cash by the Company and its Subsidiaries during such period), which number for the applicable period of computation shall not be less than zero, determined on a consolidated basis in accordance with applicable law and GAAP.

“ Consolidated EBITDA ” means, for any applicable period of computation, determined on a consolidated basis for the Company and its Subsidiaries in accordance with GAAP, (a) Consolidated Net Income for such period plus (b) without duplication, the sum of the following to the extent deducted in calculating Consolidated Net Income: (i) Consolidated Interest Expense for such period, (ii) income tax expense (including, without limitation, any federal, state, local and foreign income and similar taxes) of the Company and its Subsidiaries for such period, (iii) depreciation and amortization of the Company and its Subsidiaries for such period, (iv) those certain cash charges for the twelve-month period ending August 1, 2009 as set forth on Schedule 1.1(b) , (v) any extraordinary charges or any non-cash charges (including non-recurring charges) for such period (excluding non-cash charges that are expected to become cash charges in a future period or that are reserves for future cash charges), (vi) non-cash losses for such period from the proposed or actual disposition of material assets, (vii) non-cash goodwill and intangible asset write-downs and restructuring charges for such period ( provided that any cash payment made with respect to any such goodwill and intangible asset write-down or restructuring charges shall be subtracted in computing Consolidated EBITDA during the period during which such cash payment is made), (viii) non-cash charges resulting from the vesting or exercise of stock options or stock appreciation rights granted to management of the Company or any Subsidiary for such period, and (ix) non-cash charges to the extent solely attributable to unrealized losses under Financial Accounting Standards Board Statement No. 133, Accounting for Derivative Instruments and Hedging Activities (“ SFAS 133 ”) for such period ( provided that any cash payment made with respect to any such non-cash charge shall be subtracted in computing Consolidated EBITDA during the period in which such cash payment is made (it being understood that the provision of cash collateral shall not constitute a “payment” for these purposes)), minus (c) without duplication, the sum of the following to the extent included in calculating Consolidated Net Income: (i) non-cash, extraordinary or non-recurring gains for such period, (ii) non-cash gains for such period from the proposed or actual disposition of material assets, and (iii) non-cash gains to the extent solely attributable to unrealized gains under SFAS 133 ( provided that any cash received with respect to any such non-cash gain shall be added in computing Consolidated EBITDA during the period in which such cash is received).

 

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“ Consolidated Indebtedness ” means, as of any date of determination, all Indebtedness of the Company and its Subsidiaries, determined on a consolidated basis in accordance with GAAP.

“ Consolidated Indebtedness Payments ” means, for any applicable period of computation, the sum of all (a) scheduled payments of principal on Consolidated Indebtedness for such period (including the principal component of payments due on Capital Leases or under any synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing product during such period) and (b) all repayments, repurchases and redemptions of the Existing Senior Notes (or any Permitted Refinancing Indebtedness in respect thereof), determined on a consolidated basis in accordance with GAAP; provided that Consolidated Indebtedness Payments shall not include (i) voluntary prepayments or mandatory prepayments of Loans hereunder or (ii) any payment pursuant to which such Consolidated Indebtedness is refinanced or repaid in whole or in part (A) through an incurrence of Indebtedness expressly permitted by Section 10.1 , (B) with the proceeds of an issuance of Capital Stock of the Company or (C) with the proceeds of a disposition of assets (other than Collateral) expressly permitted pursuant to Section 10.5 .

“ Consolidated Interest Expense ” means, for any applicable period of computation, all interest expense of the Company and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP.

“ Consolidated Net Income ” means, for any applicable period of computation, the net income (or net deficit) of the Company and its Subsidiaries for such period determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded from Consolidated Net Income the net income (or net deficit) of any Person (other than a Subsidiary) in which the Company or any of its Subsidiaries has a joint interest with a third party, except to the extent such net income is actually paid in cash to the Company or any of its Subsidiaries by dividend or other distribution during such period.

“ Consolidated Total Assets ” means, at any time, without duplication, the total assets of the Company and its Subsidiaries, determined on a consolidated basis, as set forth or reflected on the most recent consolidated balance sheet of the Company and its Subsidiaries, prepared in accordance with GAAP.

“ Credit Card Agreements ” means all agreements now or hereafter entered into by any Borrower with any Credit Card Issuer or any Credit Card Processor, as the same now exist or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.

“ Credit Card Issuer ” means any Person (other than a Borrower) who issues or whose members issue credit cards, including, without limitation, MasterCard or VISA bank credit or debit cards or other bank credit or debit cards issued through MasterCard International, Inc., Visa, U.S.A., Inc. or Visa International and American Express, Discover, Diners Club, Carte Blanche and other non-bank credit or debit cards.

“ Credit Card Processor ” means any servicing or processing agent or any factor or financial intermediary who facilitates, services, processes or manages the credit authorization, billing transfer and/or payment procedures with respect to any sales transactions of any Borrower involving credit card or debit card purchases by customers using credit cards or debit cards issued by any Credit Card Issuer.

 

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“ Credit Card Processor Agreement ” means an agreement in writing, in form and substance reasonably satisfactory to the Administrative Agent, by and between the Administrative Agent and a Credit Card Processor related to any Borrower’s Credit Card Agreements.

“ Credit Facility ” means the Loans and Letters of Credit provided to or for the benefit of any Borrower pursuant to Sections 2.1 , 2.2 and 2.3 .

“ Default ” means an act, condition or event which with notice or passage of time or both would constitute an Event of Default.

“ Defaulting Lender ” means any Lender that (a) has failed to fund any portion of the Revolving Loans, participations in Letter of Credit Obligations or participations in Swingline Loans required to be funded by it hereunder within one (1) Business Day of the date required to be funded by it hereunder, (b) has otherwise failed to pay over to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within one (1) Business Day of the date when due, unless such amount is the subject of a good faith dispute, (c) has notified the Borrowers, the Administrative Agent or any other Lender in writing that it does not intend to comply with any of its funding obligations under this Agreement or has made a public statement to the effect that it does not intend to comply with its funding obligations under this Agreement or under other agreements in which it commits or is obligated to extend credit, or (d) has (or has a parent corporation that has) (i) become or is insolvent, as reasonably determined by the Administrative Agent in consultation with the Borrowers, or (ii) become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee or custodian appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment.

“ Defaulting Lender Termination ” has the meaning given to such term in Section 4.11 .

“ Defaulting Lender Termination Date ” has the meaning given to such term in Section 4.11 .

“ Deposit Account Control Agreement ” means an agreement in writing, in form and substance reasonably satisfactory to the Administrative Agent, by and among the Administrative Agent, the Loan Party with a deposit account at any bank and the bank at which such deposit account is at any time maintained which provides that such bank will comply with instructions originated by the Administrative Agent directing disposition of the funds in the deposit account without further consent by such Loan Party and has such other terms and conditions as the Administrative Agent may reasonably require.

“ Dollar Amount ” means (a) with respect to any amount denominated in Dollars, such amount, and (b) with respect to any amount expressed in an Alternative Currency, the amount of Dollars which is equivalent to the amount so expressed in such Alternative Currency, at the most favorable spot exchange rate determined by the Administrative Agent to be available to it at approximately 11:00 a.m. (the time of the applicable Issuing Bank’s correspondent for the issuance of such Alternative Currency Letter of Credit) two (2) Business Days prior to the most recent Revaluation Date.

“ Dollars ” means the lawful currency of the United States of America.

“ Domestic Subsidiary ” means any Subsidiary that is incorporated or organized under the laws of any state of the United States or the District of Columbia.

“ Eligible Accounts ” means Accounts created by a Borrower that in each case satisfy the criteria set forth below as reasonably determined by the Administrative Agent:

(a) such Accounts arise from the actual and bona fide sale and delivery of goods by such Borrower or rendition of services by such Borrower in the ordinary course of its business which transactions are completed in accordance with the terms and provisions contained in any documents related thereto;

 

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(b) such Accounts (i) are evidenced by an invoice delivered to the related account debtor and (ii) have payment terms of:

(A) sixty-one (61) days or less and do not remain unpaid more than sixty (60) days after the original due date thereof;

(B) sixty-two (62) to ninety-one (91) days, do not remain unpaid more than thirty (30) days after the original due date thereof and are owing by account debtors with a long term debt rating of BBB or better or Baa or better (in each case with a stable outlook or better) by any two of S&P, Moody’s or Fitch, Inc.; or

(C) sixty-two (62) to one hundred twenty-two (122) days, do not remain unpaid more than thirty (30) days past the original due date thereof and are not included in clause (b)(ii)(B) hereto ( provided that all such Accounts under this clause (b)(ii)(C) shall be limited to an amount equal to 12.0% of the Aggregate Commitment in the aggregate and provided further that all such Accounts under this clause (b)(ii)(C) with payment terms of ninety-two (92) to one hundred twenty-two (122) days shall be limited to an amount equal to 2.5% of the Aggregate Commitment in the aggregate);

(c) such Accounts comply with the following terms and conditions: (i) the amounts shown on any invoice delivered to the Administrative Agent or schedule thereof delivered to the Administrative Agent shall be true and complete, (ii) no payments shall be made thereon except payments immediately delivered to the Administrative Agent to the extent required pursuant to the terms of this Agreement, (iii) no credit, discount, allowance or extension or agreement for any of the foregoing shall be granted to any account debtor except for credits, discounts, allowances or extensions made or given in the ordinary course of each Borrower’s business in accordance with its customary credit practices and policies and (iv) none of the transactions giving rise thereto will violate any applicable foreign, Federal, State or local laws or regulations, all documentation relating thereto will be legally sufficient under such laws and regulations and all such documentation will be legally enforceable in accordance with its terms;

(d) such Accounts do not arise from sales on consignment, guaranteed sale, sale and return, sale on approval, or other terms under which payment by the account debtor may be conditional or contingent;

(e) the chief executive office of the account debtor with respect to such Accounts is located in the United States of America or Canada ( provided that, such Borrower shall have executed and delivered, or shall have caused to be executed and delivered, such other agreements, documents and instruments as may be reasonably required by the Administrative Agent to perfect the security interest of the Administrative Agent in those Accounts of an account debtor with its chief executive office or principal place of business in Canada in accordance with the applicable laws of the Province of Canada in which such chief executive office or principal place of business is located and shall have taken or shall have caused to be taken such other and further actions as the Administrative Agent may have reasonably requested to enable the Administrative Agent as secured party with respect thereto to collect such Accounts under the applicable Federal or Provincial laws of Canada) or, at the Administrative Agent’s option, if the chief executive office and principal place of business of the account debtor with respect to such Accounts is located other than in the United States of America or Canada then if either: (i) the

 

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account debtor has delivered to such Borrower an irrevocable letter of credit issued or confirmed by a bank reasonably satisfactory to the Administrative Agent and payable only in the United States of America and in Dollars, sufficient to cover such Account, in form and substance satisfactory to the Administrative Agent and if required by Section 6.2(e) , the original of such letter of credit has been delivered to the Administrative Agent or the Administrative Agent’s agent and the issuer thereof, and such Borrower has complied with the other applicable terms of Section 6.2(e) with respect to the assignment of the proceeds of such letter of credit to the Administrative Agent or naming the Administrative Agent as transferee beneficiary thereunder, as the Administrative Agent may specify or (ii) such Account is subject to credit insurance payable to the Administrative Agent issued by an insurer and on terms and in an amount acceptable to the Administrative Agent, then so long as such Account is otherwise an Eligible Account, such Account will be included as an Eligible Account;

(f) such Accounts do not consist of percentage of completion accounts or progress billings (such that the obligation of the account debtors with respect to such Accounts is conditioned upon such Borrower’s satisfactory completion of any further performance under the agreement giving rise thereto), bill and hold invoices or retainage invoices, except as to bill and hold invoices, if the Administrative Agent shall have received an agreement in writing from the account debtor, in form and substance satisfactory to the Administrative Agent, confirming the unconditional obligation of the account debtor to take the goods related thereto and pay such invoice;

(g) such Accounts are not owing by creditors or suppliers and are not otherwise subject to any potential offset, counterclaim, dispute, deduction, discount, recoupment, reserve, defense, chargeback, rebate, credit or allowance ( provided that if such Accounts are otherwise Eligible Accounts, the portion of such Accounts in excess of the amount at any time and from time to time owed by such Borrower to such account debtor or claimed owed by such account debtor may be deemed Eligible Accounts);

(h) there are no facts, events or occurrences which would impair the validity, enforceability or collectability of such Accounts or reduce the amount payable or delay payment thereunder;

(i) such Accounts are subject to the first priority, valid and perfected security interest of the Administrative Agent and not subject to any other Liens and any goods giving rise thereto are not, and were not at the time of the sale thereof, subject to any Liens, in each case other than Liens permitted under Section 10.2 that are junior to the Administrative Agent’s first priority security interest;

(j) neither the account debtor nor any officer or employee of the account debtor with respect to such Accounts is an officer, employee, agent or Affiliate of any Loan Party;

(k) the account debtors with respect to such Accounts are not any foreign government, the United States of America, political subdivision, department, agency or instrumentality thereof, unless, if the account debtor is the United States of America, political subdivision, department, agency or instrumentality thereof, upon the Administrative Agent’s request, the Federal Assignment of Claims Act of 1940, as amended, has been complied with in a manner satisfactory to the Administrative Agent;

(l) to the knowledge of the Responsible Officers of such Borrower, there are no proceedings or actions which are threatened or pending against the account debtors with respect to such Accounts which might result in any material adverse change in any such account debtor’s financial condition (including, without limitation, any bankruptcy, dissolution, liquidation, reorganization or similar proceeding; provided that in the case of any account debtor that is a debtor in a case under any

 

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bankruptcy or insolvency proceeding, post-petition Accounts up to an aggregate amount of $10,000,000 that are otherwise Eligible Accounts under this definition may be treated as Eligible Accounts in the Administrative Agent’s discretion);

(m) the aggregate amount of such Accounts owing by a single account debtor do not constitute more than fifteen percent (15%) of the aggregate amount of all otherwise Eligible Accounts (but the portion of the Accounts not in excess of the applicable percentages shall be deemed Eligible Accounts);

(n) such Accounts are not owed by an account debtor who has Accounts classified as ineligible under clause (b) above which constitute more than fifty percent (50%) of the total Accounts of such account debtor;

(o) the account debtor is not located in a state requiring the filing of a “Notice of Business Activities Report” or similar report in order to permit such Borrower to seek judicial enforcement in such State of payment of such Account, unless such Borrower has qualified to do business in such state or has filed a “Notice of Business Activities Report” or equivalent report for then current year or such failure to file and inability to seek judicial enforcement is capable of being remedied without any material delay or material cost;

(p) such Accounts are owed by account debtors whose total indebtedness to such Borrower does not exceed the credit limit with respect to such account debtors as determined by such Borrower from time to time, to the extent such credit limit as to any account debtor is established consistent with the customary credit practices and policies of such Borrower (but the portion of the Accounts not in excess of such credit limit may be deemed Eligible Accounts if such Accounts are otherwise Eligible Accounts);

(q) such Accounts do not include any billing for interest, fees or late charges (but the portion of the Accounts in excess of such amounts shall be deemed Eligible Accounts if such Accounts are otherwise Eligible Accounts);

(r) such Accounts are owed by account debtors deemed creditworthy at all times by the Administrative Agent in good faith; and

(s) no portion of any such Accounts is evidenced by a promissory note or other instrument or by chattel paper.

The criteria for Eligible Accounts set forth above may only be changed and any new criteria for Eligible Accounts may only be established by the Administrative Agent in good faith based on either: (i) an event, condition or other circumstance arising after the Closing Date, or (ii) an event, condition or other circumstance existing on the Closing Date to the extent the Administrative Agent has no written notice thereof from a Borrower prior to the Closing Date or otherwise has no knowledge of such event, condition or other circumstance prior to the Closing Date, in either case under clause (i) or (ii) which adversely affects or could reasonably be expected to adversely affect the Accounts in the good faith determination of the Administrative Agent. Any Accounts that are not Eligible Accounts shall nevertheless be part of the Collateral. Prior to the inclusion of any Accounts acquired in connection with any Permitted Acquisition as Eligible Accounts, the Administrative Agent or its designee shall have conducted an audit and field examination with respect to such Accounts, the results of which audit and field examination shall be reasonably satisfactory to the Administrative Agent.

 

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“ Eligible Assignee ” means (a) any Lender, (b) any Affiliate of a Lender, (c) an Approved Fund or (d) any other Person (other than a natural person) that is approved by the Administrative Agent (which approval shall not be unreasonably withheld, conditioned or delayed), provided that neither the Company nor any Subsidiary or Affiliate thereof shall qualify as an Eligible Assignee.

“ Eligible Inventory ” means, as to each Borrower, Inventory of such Borrower consisting of finished goods held for resale in the ordinary course of the business of such Borrower and raw materials for such finished goods, except to the extent consisting of any of the following as reasonably determined by the Administrative Agent:

(t) work-in-process;

(u) components which are not part of finished goods;

(v) spare parts for equipment;

(w) display items, samples, tooling and packaging and shipping materials;

(x) supplies used or consumed in such Borrower’s business;

(y) Inventory having a Value in excess of $200,000 located on leased premises or in the possession of a warehouseman or processor, unless such lessor, warehouseman or processor has delivered a Collateral Access Agreement with respect thereto or an appropriate Reserve with respect to rent has been established with respect thereto;

(z) Inventory located at any premises if the Value of the Inventory located at such premises is less than $200,000 unless otherwise agreed by the Administrative Agent in its sole discretion;

(aa) Inventory subject to a Lien of any other Person which Lien is not subordinated to the Lien of the Administrative Agent pursuant to an intercreditor agreement in form and substance reasonably satisfactory to the Administrative Agent;

(bb) bill and hold goods;

(cc) unsalable, unserviceable, obsolete or slow moving Inventory;

(dd) Inventory that is not subject to the first priority, valid and perfected security interest of the Administrative Agent;

(ee) returned, damaged and/or defective Inventory;

(ff) Inventory consisting of chemicals or dyes stored in open containers;

(gg) Inventory that is not reflected in the details of a current perpetual inventory report unless the Company shall have provided reporting with respect to such Inventory in form and substance reasonably satisfactory to the Administrative Agent;

(hh) Inventory subject to a negotiable warehouse receipt or other negotiable Document;

(ii) Inventory purchased or sold on consignment;

 

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(jj) Inventory located outside the United States of America or Inventory that is in transit (other than Inventory that is otherwise Eligible Inventory and is in transit between domestic locations of the Borrowers); and

(r) Inventory upon which any Material Trademark is affixed unless the Administrative Agent has been granted a non-exclusive license with respect to such Material Trademark in accordance with Section 11.2(g) .

The criteria for Eligible Inventory set forth above may only be changed and any new criteria for Eligible Inventory may only be established by the Administrative Agent in good faith based on either: (i) an event, condition or other circumstance arising after the Closing Date or (ii) an event, condition or other circumstance existing on the Closing Date to the extent the Administrative Agent has no written notice thereof from the Administrative Borrower prior to the Closing Date or otherwise has no knowledge of such event, condition or circumstance prior to the Closing Date, in either case under clause (i) or (ii) which adversely affects or could reasonably be expected to adversely affect the Inventory in the good faith determination of the Administrative Agent. Any Inventory that is not Eligible Inventory shall nevertheless be part of the Collateral. Prior to the inclusion of any Inventory acquired in connection with any Permitted Acquisition as Eligible Inventory, the Administrative Agent or its designee shall have conducted an appraisal and field examination with respect to such Inventory, the results of which appraisal and field examination shall be reasonably satisfactory to the Administrative Agent.

“ EMU Legislation ” means the legislative measures of the European Council for the introduction of, changeover to or operation of a single or unified European currency.

“ Environmental Laws ” means all foreign, Federal, State, provincial and local laws (including common law), legislation, rules, codes, licenses, permits (including any conditions imposed therein), authorizations, judicial or administrative decisions, injunctions or agreements between any Loan Party and any Governmental Authority, (a) relating to pollution and the protection, preservation or restoration of the environment (including air, water vapor, surface water, ground water, drinking water, drinking water supply, surface land, subsurface land, plant and animal life or any other natural resource), or to human health or safety, (b) relating to the exposure to, or the use, storage, recycling, treatment, generation, manufacture, processing, distribution, transportation, handling, labeling, production, release or disposal, or threatened release, of Hazardous Materials, or (c) relating to all laws with regard to recordkeeping, notification, disclosure and reporting requirements respecting Hazardous Materials including, without limitation, (i) the Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Federal Superfund Amendments and Reauthorization Act, the Federal Water Pollution Control Act of 1972, the Federal Clean Water Act, the Federal Clean Air Act, the Federal Resource Conservation and Recovery Act of 1976 (including the Hazardous and Solid Waste Amendments thereto), the Federal Solid Waste Disposal and the Federal Toxic Substances Control Act, the Federal Insecticide, Fungicide and Rodenticide Act, and the Federal Safe Drinking Water Act of 1974, (ii) applicable state counterparts to such laws and (iii) any common law, civil law or equitable doctrine that may impose liability or obligations for injuries or damages due to, or threatened as a result of, the presence of or exposure to any Hazardous Materials.

“ ERISA ” means the Employee Retirement Income Security Act of 1974, together with all rules, regulations and interpretations thereunder or related thereto.

“ ERISA Affiliate ” means any person required to be aggregated with the Company or any of its Subsidiaries under Sections 414(b), 414(c), 414(m) or 414(o) of the Code or Section 4001(b) of ERISA.

 

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“ ERISA Event ” means (a) any “reportable event”, as defined in Section 4043(c) of ERISA or the regulations issued thereunder, with respect to a Pension Plan, other than events as to which the requirement of notice has been waived in regulations by the Pension Benefit Guaranty Corporation, (b) the adoption of any amendment to a Pension Plan that would require the provision of security pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA, (c) a complete or partial withdrawal by the Company or any ERISA Affiliate from a Multiemployer Plan or a cessation of operations which is treated as such a withdrawal or notification that a Multiemployer Plan is in reorganization, (d) the filing of a notice of intent to terminate, the treatment of a Pension Plan amendment as a termination under Section 4041 or 4041A of ERISA, or the commencement of proceedings by the Pension Benefit Guaranty Corporation to terminate a Pension Plan, (e) an event or condition which might reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, (f) the imposition of any liability under Title IV of ERISA, other than the Pension Benefit Guaranty Corporation premiums due but not delinquent under Section 4007 of ERISA, upon the Company or any ERISA Affiliate in excess of $25,000,000 and (g) any other event or condition with respect to a Plan including any Pension Plan subject to Title IV of ERISA maintained, or contributed to, by any ERISA Affiliate that could reasonably be expected to result in liability of any Borrower in excess of $25,000,000.

“ Euro ” means the single currency of the Participating Member States introduced in accordance with the EMU Legislation.

“ Eurodollar Rate Loans ” means any Revolving Loan made to a Borrower that bears interest based on the Adjusted Eurodollar Rate.

“ Event of Default ” has the meaning given to such term in Section 11.1 .

“ Excess Availability ” means the amount, as determined by the Administrative Agent, calculated at any date, equal to (a) the lesser of (i) the Borrowing Base (as set forth in the Borrowing Base Certificate most recently delivered by the Administrative Borrower) and (ii) the Aggregate Commitment minus (b) the Total Outstandings as of such date.

“ Excess Special Agent Advances ” has the meaning given to such term in Section 2.8(b) .

“ Exchange Act ” means the Securities Exchange Act of 1934, together with all rules, regulations and interpretations thereunder or related thereto.

“ Excluded Account ” has the meaning given to such term in Section 6.2 .

“ Excluded Taxes ” means, with respect to the Administrative Agent, any Issuing Bank, any Lender or any other recipient of any payment to be made by or on account of any obligation of any Loan Party hereunder, (a) any taxes imposed on or measured by its overall net income (however denominated) or net profits of such Person (and franchise taxes imposed in lieu thereof) by the jurisdiction under the laws of which such recipient (i) is organized or incorporated, (ii) maintains its principal lending office or, in the case of any Lender or any Issuing Bank, its applicable lending office with respect to this Agreement or (iii) has a present or former connection other than a connection resulting from entering into this Agreement, receiving any payment or enforcing any right under this Agreement; (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction in which such Lender or such Issuing Bank is located and (c) in the case of any Foreign Lender, any withholding tax payable with respect to payments under the Loan Documents under laws (including any statute, treaty or regulation) in effect on the Closing Date (or, in the case of an Eligible Assignee, the date of the Assignment and Assumption) or is attributable to such Foreign Lender’s failure or inability (other

 

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than as a result of a Change in Law) to comply with Section 4.5(g) , except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of assignment, to receive additional amounts from the Loan Party with respect to such withholding tax pursuant to Section 4.5(b) .

“ Existing Facility ” means the Five Year Credit Agreement dated as of October 28, 2005 (as amended, restated, supplemented or otherwise modified) by and among the Company, as borrower, the financial institutions party thereto, as Lenders and Wachovia, as Administrative Agent.

“ Existing Letters of Credit ” means, collectively, the letters of credit issued for the account of a Loan Party or for which such Loan Party is otherwise liable, and listed on Schedule 1.1(c) .

“ Existing Senior Notes ” means, collectively, the 2011 Notes and the 2012 Notes.

“ Facility Increase ” has the meaning given to such term in Section 2.7 .

“ Federal Funds Rate ” means, for any period, a fluctuating interest rate per annum equal, for each day during such period, to the weighted average (rounded upwards, if necessary, to the next  ¹ / 100 of 1%) of the rates on overnight Federal Funds transactions with members of the Federal Reserve System arranged by Federal Funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for such day on such transactions received by the Administrative Agent from three Federal Funds brokers of recognized standing selected by it.

“ Fee Letter ” means the letter agreement, dated as of June 12, 2009, by and among the Company, Wachovia, JPMorgan Chase Bank, N.A., SunTrust Bank, Bank of America, N.A. and the Joint Lead Arrangers, setting forth certain fees payable by the Borrowers in connection with the Credit Facilities, as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.

“ Financial Covenant Threshold Amount ” means an amount equal to fifteen percent (15%) of the Aggregate Commitment.

“ Financial Covenant Trigger Event ” has the meaning given to such term in Section 9.11 .

“ Fixed Charge Coverage Ratio ” means, as of the last day of each fiscal month of the Company, the ratio of (a) (i) Consolidated EBITDA plus (ii) cash interest income minus (iii) Unfinanced Capital Expenditures minus (iv) Consolidated Cash Taxes minus (v) Restricted Payments made pursuant to Section 10.6(e) to (b) Fixed Charges, in each case, computed for the consecutive twelve-fiscal month period then ending. For purposes of calculating the Fixed Charge Coverage Ratio for any applicable period during which any Permitted Acquisition or any Asset Disposition is consummated, (i) income statement items and balance sheet items (whether positive or negative) attributable to the business or Person acquired in such Permitted Acquisition or the asset(s) subject to such Asset Disposition shall be included or excluded, as applicable, in such calculations to the extent relating to such applicable period and the Permitted Acquisition or Asset Disposition shall be deemed to have occurred as of the first day of such applicable period, (ii) Consolidated EBITDA may be adjusted to include operating and other expense reductions and other adjustments for such period resulting from such Permitted Acquisition and (iii) Indebtedness of a business or Person that is retired in connection with such Permitted Acquisition or Asset Disposition shall be excluded from such calculations and deemed to have been retired as of the first day of such applicable period, in each case, to the extent that such adjustments in clauses (i), (ii) and (iii) of this sentence (x) are of the type that would be permitted pursuant to Article XI of Regulation S-X

 

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under the Exchange Act or (y) are reasonably consistent with the purposes of such Regulation S-X as determined in good faith by the Company and reasonably acceptable to the Administrative Agent. For purposes of this definition, “Asset Disposition” means the disposition of any or all of the assets of any Loan Party or any Subsidiary thereof whether by sale, lease, transfer or otherwise.

“ Fixed Charges ” means, for any applicable period of computation, without duplication, the sum of (a) all Consolidated Interest Expense paid in cash for such period plus (b) Consolidated Indebtedness Payments made during such period.

“ Foreign Lender ” means any Lender that is organized under the laws of a jurisdiction other than that in which a Borrower is resident for tax purposes. For purposes of this definition, the United States of America, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

“ Foreign Subsidiary ” means any Subsidiary that is not a Domestic Subsidiary.

“ GAAP ” means generally accepted accounting principles in the United States of America as in effect from time to time as set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and the statements and pronouncements of the Financial Accounting Standards Board, which, in each case, are applicable to the circumstances as of the date of determination consistently applied.

“ Governmental Authority ” means any nation or government, any state, province, or other political subdivision thereof, any central bank (or similar monetary or regulatory authority) thereof, and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

“ Guarantor ” has the meaning given to such term in the preamble hereof and shall include any other Person that at any time after the Closing Date becomes party to a guarantee in favor of the Administrative Agent, for the benefit of the Secured Parties, with respect to the Obligations or who is the owner of any property that is security for the Obligations.

“ Guaranty ” means the guaranty made by the Guarantors of the Obligations under Article 13 in favor of the Administrative Agent, for the benefit of the Secured Parties.

“ Hazardous Materials ” means any hazardous, toxic or dangerous substances, materials and wastes, including hydrocarbons (including naturally occurring or man-made petroleum and hydrocarbons), flammable explosives, asbestos, urea formaldehyde insulation, radioactive materials, biological substances, polychlorinated biphenyls, pesticides, herbicides and any other kind and/or type of pollutants or contaminants (including materials which include hazardous constituents), sewage, sludge, industrial slag, solvents and/or any other similar substances, materials, or wastes and including any other substances, materials or wastes that are or become regulated under any Environmental Law (including any that are or become classified as hazardous or toxic under any Environmental Law).

“ Hedge Agreement ” means any rate swap agreement, basis swap, forward rate agreement, commodity swap, interest rate option, forward foreign exchange agreement, spot foreign exchange agreement, rate cap agreement rate, floor agreement, rate collar agreement, currency swap agreement, cross-currency rate swap agreement, currency option, any other similar agreement (including any option to enter into any of the foregoing or a master agreement for any the foregoing together with all supplements thereto).

 

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“ Increase Effective Date ” has the meaning given to such term in Section 2.7 .

“ Indebtedness ” means, with respect to any Person, any liability, whether or not contingent, (a) in respect of borrowed money or evidenced by bonds, notes, debentures or similar instruments, (b) representing the balance deferred and unpaid of the purchase price of any property or services (other than an account payable to a trade creditor incurred in the ordinary course of business of such Person and payable in accordance with customary trade practices), (c) all obligations as lessee under leases which have been, or should be, in accordance with GAAP recorded as Capital Leases, (d) any contractual obligation, contingent or otherwise, of such Person to pay or be liable for the payment of any indebtedness described in this definition of another Person, including, without limitation, any such indebtedness, directly or indirectly guaranteed, or any agreement to purchase, repurchase, or otherwise acquire such indebtedness, or any security therefor, or to provide funds for the payment or discharge thereof, or to maintain solvency, assets, level of income, or other financial condition, (e) all obligations with respect to redeemable stock and redemption or repurchase obligations under any Capital Stock or other equity securities issued by such Person, except to the extent such obligations can be satisfied with Capital Stock of such Person, (f) all reimbursement obligations and other liabilities of such Person with respect to surety bonds (whether bid, performance or otherwise), letters of credit, bankers’ acceptances, drafts or similar documents or instruments issued for such Person’s account, (g) all indebtedness of such Person in respect of indebtedness of another Person for borrowed money or indebtedness of another Person otherwise described in this definition which is secured by any consensual lien, security interest, collateral assignment, conditional sale, mortgage, deed of trust, or other encumbrance on any asset of such Person, whether or not such indebtedness is assumed by or is a personal liability of such Person, all as of such time, (h) all net obligations, liabilities and indebtedness of such Person (marked to market) arising under Hedge Agreements, (i) indebtedness of any partnership or joint venture in which such Person is a general partner or a joint venturer to the extent such Person is liable therefor as a result of such Person’s ownership interest in such entity, except to the extent that the terms of such indebtedness expressly provide that such Person is not liable therefor or such Person has no liability therefor as a matter of law, (j) the principal and interest portions of all rental obligations of such Person under any synthetic lease or similar off-balance sheet financing where such transaction is considered to be borrowed money for tax purposes but is classified as an operating lease in accordance with GAAP, (k) 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), and (l) all obligations of such person under take or pay or similar arrangements.

“ Indemnitee ” has the meaning given to such term in Section 14.4 .

“ Information Certificate ” means a certificate of the Loan Parties substantially in the form of Exhibit D hereto.

“ Intellectual Property ” means all of the following in any jurisdiction throughout the world: (a) patents, patent applications and inventions, including all renewals, extensions, combinations, divisions, or reissues thereof, (“ Patents ”); (b) trademarks, service marks, trade names, trade dress, logos, Internet domain names and other business identifiers, together with the goodwill symbolized by any of the foregoing, and all applications, registrations, renewals and extensions thereof, (“ Trademarks ”); (c) copyrights and all works of authorship including all registrations, applications, renewals, extensions and reversions thereof (“ Copyrights ”); (d) all computer software, source code, executable code, data, databases and documentation thereof; (e) all trade secret rights in information, including trade secret rights in any formula, pattern, compilation, program, device, method, technique, or process, that (1) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its

 

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disclosure or use, and (2) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy; (f) all other intellectual property or proprietary rights in any discoveries, concepts, ideas, research and development, know-how, formulae, patterns, inventions, compilations, compositions, manufacturing and production processes and techniques, program, device, method, technique, technical data, procedures, designs, recordings, graphs, drawings, reports, analyses, specifications, databases, and other proprietary or confidential information, including customer lists, supplier lists, pricing and cost information, business and marketing plans and proposals and advertising and promotional materials; and (g) all rights to sue at law or in equity for any infringement or other impairment or violation thereof and all products and proceeds of the foregoing.

“ Interest Period ” means for any Eurodollar Rate Loan, a period of one (1), two (2), three (3) or six (6) months duration as the Administrative Borrower on behalf of any Borrower may elect; provided that:

(kk) the Administrative Borrower on behalf of such Borrower may not elect an Interest Period that will end after the last day of then-current term of this Agreement;

(ll) the Interest Period shall commence on the date the Revolving Loan is made or continued as, or converted into, a Eurodollar Rate Loan, and shall expire on the numerically corresponding day in the calendar month at its end;

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

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

“ Inventory ” means, as to each Loan Party, all present and future inventory, as defined in the UCC, of such Loan Party.

“ Investment ” means, with respect to a Person, any investment in any other Person, whether by means of (a) purchase or acquisition of obligations or securities of such other Person, (b) capital contribution to such other Person, (c) loan or advance to such other Person, (d) making of a time deposit with such other Person, (e) guarantee or assumption of, or providing any collateral or letter of credit for, any obligation of such other Person, (f) Acquisition or (g) otherwise.

“ Investment Property Control Agreement ” means an agreement in writing, in form and substance reasonably satisfactory to the Administrative Agent, by and among the Administrative Agent, any Loan Party (as the case may be) and any securities intermediary that maintains a securities account of such Loan Party, acknowledging that such securities intermediary has custody, control or possession of such securities account on behalf of the Administrative Agent, that it will comply with entitlement orders originated by the Administrative Agent with respect to such securities account, and has such other terms and conditions as the Administrative Agent may reasonably require.

“ Issuing Bank ” means (a) with respect to any Letter of Credit (other than Existing Letters of Credit), Wachovia in its capacity as issuer of such Letters of Credit hereunder, any Additional Issuing Bank or any successor issuer of such Letters of Credit hereunder and (b) with respect to each Existing Letter of Credit, the Lender identified on Schedule 1.1(c) as the issuer of such Existing Letter of Credit.

 

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“ Joint Lead Arrangers ” means, collectively, Wells Fargo Securities, LLC, J.P. Morgan Securities Inc., SunTrust Robinson Humphrey, Inc. and Banc of America Securities LLC.

“ Lender ” means each financial institution signatory hereto as a Lender and each other Person made a party to this Agreement as a Lender in accordance with Section 14.11 .

“ Lending Party ” means the Administrative Agent or any Lender.

“ Letter of Credit Documents ” means, 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 (a) the rights and obligations of the parties concerned or at risk with respect to such Letter of Credit or (b) any collateral security for any obligations related to such Letter of Credit.

“ Letter of Credit Limit ” means $175,000,000.

“ Letter of Credit Obligations ” means, at any time, the sum of (a) the aggregate undrawn amount of all Letters of Credit outstanding at such time, plus (b) the aggregate amount of all drawings under Letters of Credit for which any Issuing Bank has not at such time been reimbursed, plus (c) without duplication, the aggregate amount of all payments made by each Lender to each Issuing Bank with respect to such Lender’s participation in Letters of Credit as provided in Section 2.3 for which the Borrowers have not at such time reimbursed the Lenders, whether by way of a Loan or otherwise.

“ Letters of Credit ” means all letters of credit (whether documentary or stand-by and whether for the purchase of inventory, equipment or otherwise) issued by an Issuing Bank for the account of any Borrower pursuant to this Agreement, and all amendments, renewals, extensions or replacements thereof, and including, but not limited to, the Existing Letters of Credit.

“ LIBOR Market Index Rate ” means, for any day, the rate per annum (rounded upwards, if necessary, to the nearest  ¹ / 100 of 1%) appearing on Reuters Screen LIBOR01 Page (or any successor page) as the London interbank offered rate for one (1) month deposits in Dollars at approximately 11:00 a.m. (London time), on such day, or if such day is not a Business Day, then the immediately preceding Business Day (or if not so reported, then as determined by the Administrative Agent from another recognized source or interbank quotation) ( provided that if such London interbank offered rate is not available on such date, the most recently available London interbank offered rate for one (1) month deposits in Dollars shall be used).

“ LIBOR Rate ” means, for any Eurodollar Rate Loan for any Interest Period therefor, the rate per annum (rounded upwards, if necessary, to the nearest  ¹ / 100 of 1%) appearing on Reuters Screen LIBOR01 Page (or any successor page) as the London interbank offered rate for deposits in Dollars at approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period; provided that if more than one rate is specified on Reuters Screen LIBOR01 Page, the applicable rate shall be the arithmetic mean of all such rates (rounded upwards, if necessary, to the nearest  ¹ / 100 of 1%). If, for any reason, neither of such rates is available, then “ LIBOR Rate ” means the rate per annum at which, as determined by the Administrative Agent, Dollars in an amount comparable to the Loans then requested are being offered to leading banks at approximately 11:00 a.m. (London time), two (2) Business Days prior to the commencement of the applicable Interest Period for settlement in immediately available funds by leading banks in the London interbank market for a period equal to the Interest Period selected.

 

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“ Lien ” means 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 Documents ” means, collectively, this Agreement, the Notes, the Letter of Credit Documents, all Deposit Account Control Agreements, all Investment Property Control Agreements, Credit Card Processor Agreements and all other agreements, documents and instruments now or at any time hereafter executed and/or delivered by any Loan Party in connection with this Agreement; provided that in no event shall the term “Loan Documents” be deemed to include any Hedge Agreement.

“ Loan Parties ” means, collectively, the Borrowers and the Guarantors.

“ Loans ” means, collectively, the Revolving Loans and Swingline Loans.

“ Margin Stock ” means “margin stock” as defined in Regulations T, U or X of the Board of Governors of the Federal Reserve System, as in effect from time to time, together with all offered ratings and interpretations issued thereunder.

“ Material Adverse Effect ” means a material adverse effect on (a) the business, operations, financial condition, liabilities (whether actual or contingent) or properties of the Company and its Subsidiaries, taken as a whole; (b) the legality, validity or enforceability of this Agreement or any other material Loan Document; (c) the legality, validity, enforceability, perfection or priority of the security interests and liens of the Administrative Agent upon a material portion of the Collateral; (d) a material portion of the Collateral or its value (to the extent not otherwise addressed in this Agreement within the definitions of “Eligible Accounts”, “Eligible Inventory” or “Reserves”); (e) the ability of any Loan Party to repay the Obligations or of any Borrower to perform its material obligations under this Agreement or any other material Loan Document as and when to be performed; or (f) the ability of the Administrative Agent or any Lender to enforce the Obligations or realize upon the Collateral (except for an immaterial portion thereof) or otherwise with respect to the rights and remedies of the Administrative Agent and the Lenders under this Agreement or any other material Loan Document.

“ Material Contract ” means any contract or other agreement (other than the Loan Documents), whether written or oral, to which any Loan Party is a party as to which the breach, nonperformance, cancellation or failure to renew by any party thereto would have a Material Adverse Effect.

“ Material Intellectual Property ” means all Intellectual Property owned or licensed by any Loan Party, where the failure to own or license such Intellectual Property could reasonably be expected to have a Material Adverse Effect.

“ Material Release or Non-Compliance ” means (a) the occurrence of any event involving the release, spill or discharge of any Hazardous Material or (b) any investigation, proceeding, complaint, order, directive, claim, citation or notice with respect to any non-compliance with or violation of any Environmental Law by any Loan Party or the release, spill or discharge of any Hazardous Material if, in the case of each of the foregoing clauses (a) or (b), the release, spill or discharge, or the alleged or actual non-compliance or violation of Environmental Law by any Loan Party could reasonably be expected to have a Material Adverse Effect.

“ Material Subsidiary ” means, as of the date of any determination thereof, any Domestic Subsidiary (other than a Domestic Subsidiary a majority of the Voting Stock of which is owned by a

 

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Foreign Subsidiary, to the extent that such Domestic Subsidiary becoming a Guarantor would result in material adverse tax consequences to the Company or its Subsidiaries) that either: (a) owns assets having a book value equal to or greater than 5.0% of Consolidated Total Assets or (b) had Consolidated EBITDA (calculated solely for such Domestic Subsidiary) for any prior period of four consecutive fiscal quarters equal to or greater than 5.0% of Consolidated EBITDA of the Company and its consolidated Subsidiaries for the same four fiscal quarter period.

“ Material Trademark ” means any Trademark owned by a Loan Party that is affixed or attached to, or otherwise required with respect to the sale of, Inventory of the Loan Parties having a gross book value in excess of $25,000,000.

“ Maturity Date ” means the earlier to occur of (a) September 2, 2013; provided that such date shall be accelerated to: (i) if the 2011 Notes have not been repaid, refinanced, defeased or, in the reasonable determination of the Administrative Agent, adequately reserved for by the Borrowers prior to October 15, 2010, October 15, 2010 and (ii) if the Maturity Date has not been modified pursuant to clause (i) above and the 2012 Notes have not been repaid, refinanced, defeased or, in the reasonable determination of the Administrative Agent, adequately reserved for by the Borrowers prior to January 15, 2012, January 15, 2012, (b) the date of termination of the entire Aggregate Commitment by the Administrative Borrower pursuant to Section 2.6 or (c) the date on which the Obligations have been accelerated pursuant to Section 11.2(b) and in connection therewith, the Obligations have become immediately due and payable and the Aggregate Commitment has been terminated. For purposes hereof, the Administrative Agent shall deem the applicable Existing Senior Notes to be adequately reserved for if the Borrowers shall have arranged for the following (individually or a through a combination of the following) in an amount greater than or equal to the amount necessary to fully repay the principal and interest of the applicable Existing Senior Notes as required pursuant to the 2011 Indenture and/or 2012 Indenture, as applicable (such amount, the “ Refinancing Amount ”): (x) the Borrowers shall have deposited cash in Dollars in a deposit account under the exclusive dominion and control of the Administrative Agent (which the Loan Parties shall not be permitted to access) and/or (y) the Administrative Agent shall have established Reserves (in addition to any other Reserves established pursuant to the terms of this Agreement).

“ Maximum Interest Rate ” means the maximum non-usurious rate of interest under applicable Federal or State law as in effect from time to time that may be contracted for, taken, reserved, charged or received in respect of the indebtedness of a Borrower to the Administrative Agent or a Lender, or to the extent that at any time such applicable law may thereafter permit a higher maximum non-usurious rate of interest, then such higher rate.

“ Moody’s ” means Moody’s Investors Service, Inc., and its successors and assigns.

“ Multiemployer Plan ” means a “multi-employer plan” as defined in Section 4001(a)(3) of ERISA which is or was at any time during the current year or the immediately preceding six (6) years contributed to by any Loan Party or any ERISA Affiliate or with respect to which any Loan Party or any ERISA Affiliate may incur any liability.

“ Net Cash Proceeds ” means, as applicable, (a) with respect to any sales of Collateral, the gross cash proceeds received by the Company or any of its Subsidiaries therefrom less the sum of (i) all income taxes and other taxes assessed by a Governmental Authority (or reasonable reserves therefor) as a result of such sale and any other fees and expenses incurred in connection with such sale and (ii) the principal amount of, premium, if any, and interest on any Indebtedness secured by a Lien on the asset (or portion thereof) sold, which Indebtedness is required to be repaid in connection with such sale and (b) with respect to any proceeds received from any insurance or condemnation award, the gross cash proceeds

 

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received by the Company or any of its Subsidiaries therefrom less the sum of (i) all fees and expenses in connection therewith and (ii) the principal amount of, premium, if any, and interest on any Indebtedness secured by a Lien on the asset (or portion thereof) subject to such insurance or condemnation award, which Indebtedness is required to be repaid in connection therewith.

“ Net Recovery Percentage ” means the fraction, expressed as a percentage, (a) the numerator of which is the amount equal to the amount of the recovery in respect of the Inventory at such time on a “net orderly liquidation value” basis as set forth in the most recent acceptable appraisal of Inventory received by the Administrative Agent in accordance with Section 7.3 , net of reasonably estimated liquidation expenses, and (b) the denominator of which is the applicable original cost of the aggregate amount of the Inventory subject to such appraisal.

“ Non-Consenting Lender ” has the meaning given to such term in Section 14.2(c) .

“ Non-Loan Party ” means any Subsidiary of the Company that is not a Loan Party.

“ Note ” means any promissory note substantially in the form of Exhibit J hereto made by the Borrowers in favor of a Lender evidencing such Lender’s Commitment, and any amendments, supplements and modifications thereto and replacements or renewals thereof.

“ Notice of Account Designation ” has the meaning given to such term in Section 2.4(b) .

“ Notice of Borrowing ” has the meaning given to such term in Section 2.4(a) .

“ Notice of Conversion ” has the meaning given to such term in Section 3.1(b)(ii) .

“ Notice of Default or Failure of Condition ” has the meaning given to such term in Section 12.3(a) .

“ Notice of Prepayment ” has the meaning given to such term in Section 2.5(b) .

“ Noticed Bank Product ” means any Bank Product provided by the Administrative Agent or any of its Affiliates and any other Bank Product for which the applicable Bank Product Provider (a) has disclosed to the Administrative Agent prior to the Closing Date (which disclosure shall comply with the information provisions set forth in the definition of “Bank Products”) or (b) shall have complied with the notice and other information provisions set forth in the definition of “Bank Products”.

“ Obligations ” means (a) any and all Loans, Letter of Credit Obligations, Special Agent Advances and all other obligations, liabilities and indebtedness of every kind, nature and description owing by any or all of the Loan Parties to the Administrative Agent or any Lender and/or any of their Affiliates or any Issuing Bank, including principal, interest, charges, fees, costs and expenses, however evidenced, whether as principal, surety, endorser, guarantor or otherwise, arising under this Agreement or any other Loan Document or on account of any Letter of Credit and all other Letter of Credit Obligations, whether now existing or hereafter arising, whether arising before, during or after the initial or any renewal term of this Agreement or after the commencement of any case or proceeding with respect to any such Loan Party under the United States Bankruptcy Code or any similar statute (including, to the extent permitted under applicable law, the payment of interest and other amounts which would accrue and become due but for the commencement of such case, whether or not such amounts are allowed or allowable in whole or in part in such case), whether direct or indirect, absolute or contingent, joint or several, due or not due, primary or secondary, liquidated or unliquidated, or secured or unsecured and (b) subject to the priority in right of payment set forth in Section 11.3 , all obligations, liabilities and indebtedness of every kind, nature and description owing by any or all of the Loan Parties to any Bank Product Provider arising under or pursuant to any Bank Products, whether now existing or hereafter arising.

 

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

“ Other Taxes ” has the meaning given to such term in Section 4.5(c) .

“ Overadvance ” has the meaning given to such term in Section 2.8(a) .

“ Participant ” has the meaning given to such term in Section 14.11(e) .

“ Participating Member State ” means each state so described in any EMU Legislation.

“ Patriot Act ” has the meaning given to such term in Section 14.14 .

“ Pension Plan ” means a pension plan (as defined in Section 3(2) of ERISA) subject to Title IV of ERISA which any Loan Party sponsors, maintains, or to which any Loan Party or ERISA Affiliate makes, is making, or is obligated to make contributions, other than a Multiemployer Plan.

“ Permits ” has the meaning given to such term in Section 8.7(b) .

“ Permitted Acquisition ” means any Acquisition by any Loan Party or any Subsidiary thereof where:

(oo) the business, assets or division acquired are for use, or the Person acquired is engaged, in a Permitted Line of Business;

(pp) if the Acquisition involves a merger or other combination involving (i) any Borrower, such Borrower is the surviving entity and (ii) any Guarantor, either such Guarantor is the surviving entity or the continuing or surviving entity shall become a Loan Party if and when required to do so under Section 9.9 ;

(qq) immediately before and after giving effect to such Acquisition, no Default or Event of Default shall exist;

(rr) (i) if the Permitted Acquisition Consideration includes the incurrence or assumption of Indebtedness permitted pursuant to Section 10.1 , consists of Capital Stock of the Company or is funded from the proceeds of any issuance of Capital Stock of the Company (or a combination thereof), then (A) both 30-Day Pro Forma Excess Availability and Pro Forma Excess Availability on the date of such Acquisition shall not be less than $150,000,000 and (B) such Permitted Acquisition Consideration shall not be funded, in whole or in part, from the proceeds of any Loan hereunder; or

(ii) if the Permitted Acquisition Consideration is provided from any source not described in the preceding clause (d)(i), then immediately before and after giving effect to such Acquisition, either:

(A) both 30-Day Pro Forma Excess Availability and Pro Forma Excess Availability on the date of such Acquisition shall not be less than $300,000,000; or

 

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(B) (1) both 30-Day Pro Forma Excess Availability and Pro Forma Excess Availability on the date of such Acquisition shall not be less than twenty-five percent (25%) of the Aggregate Commitment and (2) the Company shall have a Fixed Charge Coverage Ratio equal to or greater than 1.10 to 1.00 (calculated for the fiscal month most recently ended prior to the consummation of such Acquisition for which financial statements have been delivered pursuant to Section 9.5 , on a pro forma basis after giving effect to such Acquisition);

(ss) such Acquisition shall be non-hostile and shall have been approved, as necessary, by the target’s board of directors, shareholders or other requisite Persons;

(tt) for any Acquisition (or series of related Acquisitions) with Permitted Acquisition Consideration greater than $50,000,000, the Administrative Agent shall have received complete executed or conformed copies of each material document, instrument and agreement executed by a Loan Party in connection with such Acquisition not more than twenty (20) Business Days after such Acquisition (or such longer period as may be agreed to by the Administrative Agent in its sole discretion); provided that if Pro Forma Excess Availability at the time of such Acquisition would be less than $300,000,000, promptly upon the request of the Administrative Agent at any time prior to the consummation of such Acquisition, the Administrative Borrower shall provide draft copies of each material document, instrument and agreement to be executed by a Loan Party in connection with such Acquisition;

(uu) for any Acquisition (or series of related Acquisitions) with Permitted Acquisition Consideration greater than $50,000,000, the Administrative Agent shall have received an acquisition summary with respect to the Person, assets and/or business or division to be acquired (including financial statements for the most recent twelve month period for which they are available and as otherwise available, or such other form of financial statements reasonably acceptable to the Administrative Agent) and the Company’s calculation of pro forma Consolidated EBITDA relating thereto calculated in a manner reasonably satisfactory to the Administrative Agent (i) not less than ten (10) Business Days prior to such Acquisition (or such shorter period as may be agreed to by the Administrative Agent in its sole discretion) if, immediately before and after giving effect to such Acquisition, Pro Forma Excess Availability would be less than $300,000,000 or (ii) not more than twenty (20) Business Days after such Acquisition (or such longer period as may be agreed to by the Administrative Agent in its sole discretion) if, immediately before and after giving effect to such Acquisition, Pro Forma Excess Availability would be equal to or greater than $300,000,000; and

(vv) for any Acquisition (or series of related Acquisitions) with Permitted Acquisition Consideration greater than $50,000,000, not less than five (5) Business Days prior to the consummation of such Acquisition (or such shorter period as may be agreed to by the Administrative Agent in its sole discretion), the Administrative Agent shall have received an executed Acquisition Compliance Certificate.

For purposes of this definition and notwithstanding anything contained in this Agreement to the contrary, (x) “ Pro Forma Excess Availability ” means Excess Availability calculated on a pro forma basis to include (i) any Eligible Accounts and Eligible Inventory to be acquired in connection with such Acquisition (determined pursuant to field exams, appraisals or other methodologies reasonably acceptable to the Administrative Agent), (ii) the borrowing of any Loans used to finance such Acquisition, as applicable, and (iii) prepayments of the Loans occurring on the date of such Acquisition made from the proceeds from the incurrence of Indebtedness or the issuance of Capital Stock of the Company (or a combination thereof) in excess of the Permitted Acquisition Consideration for such Acquisition and (y) “ 30-Day Pro Forma Excess Availability ” means the average daily Pro Forma Excess Availability for the thirty (30) consecutive day period immediately preceding such Acquisition.

 

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“ Permitted Acquisition Consideration ” means the aggregate amount of the purchase price, including, but not limited to, any Indebtedness incurred or assumed in connection therewith, earnouts (valued at the maximum amounts reasonably expected to be payable thereunder as determined in good faith by the Company’s board of directors), deferred payments, or Capital Stock of the Company, net of the applicable acquired company’s cash and Cash Equivalents (as shown on its most recent financial statements delivered in connection with the applicable Permitted Acquisition) to be paid in connection with any applicable Permitted Acquisition as set forth in the applicable documentation for such Permitted Acquisition.

“ Permitted Currency ” means Dollars or any Alternative Currency, or each such currency, as the context requires.

“ Permitted Holder ” shall mean (a) Jeffrey S. Lorberbaum, his spouse and any of his children (whether natural or adopted); (b) all lineal descendants of any person described in clause (a); (c) all trusts for the benefit of any person described in clause (a) or (b) and trustees of such trusts acting in such capacity; (d) all legal representatives of any person or trust described in clauses (a), (b) or (c) acting in such capacity; and (e) all partnerships, corporations, limited liability companies or other entities controlling, controlled by or under common control with any Person, trust or other entity described in clauses (a), (b), (c) or (d). The term “control” for purposes of this definition shall have the meaning set forth in the definition of “Affiliate”.

“ Permitted Line of Business ” shall mean businesses in substantially the same fields as the businesses conducted by the Loan Parties and their Subsidiaries on the Closing Date (including, without limitation, the manufacturing, marketing and/or distribution of commercial or home furnishings and floor coverings and other reasonably related products and any “vertical integration” with respect thereto), and business activities reasonably related, ancillary or complementary thereto.

“ Permitted Refinancing Indebtedness ” means, in respect of any Indebtedness (the “ Original Indebtedness ”), any Indebtedness that refinances, refunds, renews, replaces, defeases or extends such Original Indebtedness (or any Permitted Refinancing Indebtedness in respect thereof); provided that (a) the principal amount of the Permitted Refinancing Indebtedness shall not exceed the principal amount of the Original Indebtedness except by an amount equal to any premium or other similar amount reasonably determined by the Company to be required to be paid in connection therewith, accrued and unpaid interest thereon, and fees and expenses reasonably incurred, in connection with such refinancing and by an amount equal to any existing commitments unutilized thereunder, (b) the final maturity date and weighted average life of such Permitted Refinancing Indebtedness shall not be prior to or shorter than that applicable to the Original Indebtedness, (c) such Permitted Refinancing Indebtedness shall not be required to be repaid, prepaid, redeemed, repurchased or defeased, whether on one or more fixed dates, upon the occurrence of one or more events or at the option of any holder thereof (except, in each case, (i) upon the occurrence of an event of default or a change in control, (ii) upon the sale or other disposition of any assets securing such Permitted Refinancing Indebtedness, (iii) as and to the extent such repayment, prepayment, redemption, repurchase or defeasance would have been required pursuant to the terms of such Original Indebtedness or (iv) with respect to any Permitted Refinancing Indebtedness for the Existing Senior Notes, upon the sale or other disposition of any assets of the Company and its Subsidiaries the proceeds of which are not required to be applied to prepay Loans pursuant to this Agreement) prior to the earlier of (A) the maturity date of such Original Indebtedness and (B) the date that is three months after the Maturity Date; (d) except in connection with any Permitted Refinancing Indebtedness for the Existing Senior Notes, such Permitted Refinancing Indebtedness shall not constitute an obligation of any Subsidiary that shall not have been (or, in the case of after-acquired Subsidiaries, shall not have been required to become) an obligor in respect of such Original Indebtedness, and shall not constitute an obligation of the Company if the Company shall not have been an obligor in respect of such Original Indebtedness and, in each case, shall constitute an obligation of such Subsidiary or of the

 

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Company only to the extent of their obligations in respect of such Original Indebtedness; (e) any Permitted Refinancing Indebtedness of any Subordinated Indebtedness shall be on subordination terms substantially the same as those applicable to the Original Indebtedness or more favorable to the Lenders and (f) except as permitted pursuant to Section 10.2(p) , such Permitted Refinancing Indebtedness shall not be secured by any Lien on any asset other than the assets that secured such Original Indebtedness (or would have been required to secure such Original Indebtedness pursuant to the terms thereof) or by any Lien having a higher priority in respect of the Obligations than the Lien that secured such Original Indebtedness.

“ Person ” or “ person ” means any individual, sole proprietorship, partnership, corporation (including any corporation which elects subchapter S status under the Code), limited liability company, limited liability partnership, business trust, unincorporated association, joint stock corporation, trust, joint venture or other entity or any government or any agency or instrumentality or political subdivision thereof.

“ Plan ” means an employee benefit plan (as defined in Section 3(3) of ERISA) which any Loan Party sponsors, maintains, or to which it makes, is making, or is obligated to make contributions, or in the case of a Multiemployer Plan has made contributions at any time during the immediately preceding six (6) plan years or with respect to which any Loan Party may incur liability.

“ Pro Forma Excess Availability ” has the meaning given to such term in the definition of “Permitted Acquisition”.

“ Pro Rata Share ” means as to any Lender, the fraction (expressed as a percentage) the numerator of which is such Lender’s Commitment and the denominator of which is the Aggregate Commitment, as adjusted from time to time in accordance with the provisions of Section 14.11 ; provided that if the Aggregate Commitment shall have been terminated, the numerator shall be the unpaid amount of such Lender’s Loans and its interests in the Letters of Credit and Swingline Loans and the denominator shall be the aggregate amount of all unpaid Loans and Letters of Credit.

“ Records ” means, as to each Loan Party, all of such Loan Party’s present and future books of account of every kind or nature, purchase and sale agreements, invoices, ledger cards, bills of lading and other shipping evidence, statements, correspondence, memoranda, credit files and other data relating to the Collateral or any account debtor, together with the tapes, disks, diskettes and other data and software storage media and devices, file cabinets or containers in or on which the foregoing are stored (including any rights of any Loan Party with respect to the foregoing maintained with or by any other person).

“ Register ” has the meaning given to such term in Section 14.11(b) .

“ Report ” has the meaning given to such term in Section 12.9(a) .

“ Required Lenders ” means, at any time, those Lenders whose Pro Rata Shares aggregate in excess of fifty percent (50%) of the Aggregate Commitment, or if the Aggregate Commitment shall have been terminated, the Lenders to whom in excess of fifty percent (50%) of the Total Outstandings are owing; provided that the Pro Rata Share of, and the portion of the Total Outstandings, as applicable, owing or deemed owing to, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders.

“ Reserves ” means as of any date of determination, such amounts as the Administrative Agent may from time to time establish and revise in good faith reducing the amount of Loans and Letters of Credit that would otherwise be available to any Borrower under the lending formula(s) provided for herein: (a) to reflect events, conditions, contingencies or risks which, as determined by the

 

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Administrative Agent in good faith, adversely affect, or would have a reasonable likelihood of adversely affecting, either (i) the Collateral, its value or the amount that might be received by the Administrative Agent from the sale or other disposition or realization upon such Collateral, (ii) the obligations or liabilities of any Loan Party or (iii) the security interests and other rights of the Administrative Agent or any Lender in the Collateral (including the enforceability, perfection and priority thereof); or (b) to reflect the Administrative Agent’s good faith belief that any collateral report or financial information furnished by or on behalf of any Loan Party to the Administrative Agent is or may have been incomplete, inaccurate or misleading in any material respect; or (c) in respect of any state of facts which the Administrative Agent determines in good faith constitutes a Default or an Event of Default. Without limiting the generality of the foregoing, Reserves may, at the Administrative Agent’s option, be established to reflect: (A) dilution with respect to the Accounts (based on the ratio of the aggregate amount of non-cash reductions in such Accounts for any period to the aggregate dollar amount of the sales for such period) as calculated by the Administrative Agent for any period is or is reasonably anticipated to be greater than five percent (5%); (B) returns, discounts, claims (including, without limitation, warranty claims), credits and allowances of any nature that are not paid pursuant to the reduction of Accounts; (C) sales, excise or similar taxes included in the amount of any such Accounts reported to the Administrative Agent; (D) factors that may negatively impact the Value of Inventory, including, without limitation, change in salability, obsolescence, seasonality, theft, shrinkage, imbalance, change in composition or mix, markdowns and vendor chargebacks; (E) testing variances identified as part of the Administrative Agent’s periodic field examinations; (F) a reserve of up to three months’ rent and other charges that could be payable to any owner or lessor of premises where any Collateral is located, other than for those locations where the Administrative Agent has received a Collateral Access Agreement that the Administrative Agent has accepted in writing; (G) amounts due or to become due to owners and licensors of Material Intellectual Property used by any Borrower, and (H) obligations, liabilities or indebtedness (contingent or otherwise) of Loan Parties to the Administrative Agent or any Bank Product Provider arising under or in connection with any Bank Products or as such Affiliate or Person may otherwise require in connection therewith to the extent that such obligations, liabilities or indebtedness constitute Obligations as such term is defined herein or otherwise receive the benefit of the security interest of the Administrative Agent in any Collateral. The amount of any Reserve established by the Administrative Agent shall have a reasonable relationship to the event, condition or other matter which is the basis for such reserve and shall be established by the Administrative Agent in good faith without duplication for items already excluded from Eligible Accounts or Eligible Inventory, as the case may be.

“ Responsible Officer ” means, for any Loan Party, any of the chief executive officer, chief financial officer, treasurer or controller of such Loan Party.

“ Restricted Payment ” means any dividend or other distribution (whether in cash, securities or other property) with respect to any Capital Stock of the Company or any of its Subsidiaries, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Capital Stock or on account of any return of capital to the Company or such Subsidiary’s stockholders, partners or members (or the equivalent Person thereof), or payment made to redeem, purchase, repurchase or retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire any Capital Stock of the Company or any of its Subsidiaries, or any setting apart of funds or property for any of the foregoing.

“ Revaluation Date ” means, with respect to any Alternative Currency Letter of Credit, (a) the date of issuance of such Alternative Currency Letter of Credit, (b) the date of making any Loan or issuance of any other Letter of Credit, (c) each date of an amendment of such Alternative Currency Letter of Credit having the effect of increasing the amount thereof (solely with respect to the increased amount), (d) each date of any payment by the applicable Issuing Bank of any drawing under such Alternative Currency Letter of Credit and (e) such additional dates as the Administrative Agent or the applicable Issuing Bank shall reasonably determine or the Required Lenders shall reasonably require.

 

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“ Revolving Loans ” means the loans now or hereafter made by or on behalf of any Lender or by the Administrative Agent for the account of any Lender on a revolving basis pursuant to the Credit Facility (involving advances, repayments and readvances) as set forth in Section 2.1 .

“ S&P ” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. and its successors and assigns.

“ Sale and Lease-Back Transaction ” means any arrangement whereby the Company or any of its Subsidiaries has sold or transferred, or will sell or transfer, property (other than the Collateral) to any Person and has or will take back a lease of such property from such Person or its Affiliates pursuant to which the rental payments are calculated to amortize the purchase price of such property substantially over the useful life of such property, in all cases, so long as such lease is characterized as an operating lease.

“ Sanctioned Entity ” means (a) an agency of the government of, (b) an organization directly or indirectly controlled by, or (c) a person resident in, a country that is subject to a sanctions program identified on the list maintained and published by OFAC and available at http://www.treas.gov/offices/enforcement/ofac/programs, or as otherwise published from time to time as such program may be applicable to such agency, organization or person.

“ Sanctioned Person ” means a person named on the list of Specially Designated Nationals or Blocked Persons maintained by OFAC available at http://www.treas.gov/offices/enforcement/ofac/sdn /index.html, or as otherwise published from time to time.

“ Secured Parties ” means, collectively, (a) the Administrative Agent, (b) the Issuing Banks, (c) the Lenders, and (d) the Bank Product Providers.

“ Solvent ” means, at any time with respect to any Person, that at such time such Person (a) is able to pay its debts as they mature and has (and has a reasonable basis to believe it will continue to have) sufficient capital (and not unreasonably small capital) to carry on its business consistent with its practices as of the Closing Date, and (b) the assets and properties of such Person at a fair valuation (and including as assets for this purpose at a fair valuation all rights of subrogation, contribution or indemnification arising pursuant to any guarantees given by such Person) are greater than the Indebtedness of such Person, and including subordinated and contingent liabilities computed at the amount which, such person has a reasonable basis to believe, represents an amount which can reasonably be expected to become an actual or matured liability (and including as to contingent liabilities arising pursuant to any guarantee the face amount of such liability as reduced to reflect the probability of it becoming a matured liability).

“ Special Agent Advances ” has the meaning given to such term in Section 2.8(b) .

“ Sterling ” means the lawful currency of the United Kingdom of Great Britain and Northern Ireland.

“ Store Bank Accounts ” means, collectively, those certain deposit accounts of the Loan Parties maintained at local or regional banks, for use by certain sales service centers and other similar stores, into which proceeds of Inventory sales and in-store payments on Accounts are deposited, which amounts shall be thereafter swept into the Blocked Accounts of the Loan Parties within two (2) Business Days after deposit therein.

 

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“ Subordinated Indebtedness ” means Indebtedness of the Company and its Subsidiaries that is subordinate in right of payment to the right of the Administrative Agent and the Lenders to receive the prior payment in full of all of the Obligations on terms and conditions reasonably acceptable to the Administrative Agent.

“ Subsidiary ” or “ subsidiary ” means, with respect to any Person, any corporation, limited liability company, limited liability partnership or other limited or general partnership, trust, association or other business entity of which an aggregate of at least a majority of the outstanding Voting Stock of such Person is, at the time, directly or indirectly, owned by such Person and/or one or more Subsidiaries of such Person.

“ Supermajority Lenders ” means, at any time, those Lenders whose Pro Rata Shares aggregate in excess of 66  ² / 3 % of the Aggregate Commitment, or if the Aggregate Commitment shall have been terminated, the Lenders to whom in excess of 66  ² / 3 % of the Total Outstandings are owing; provided that the Pro Rata Share of, and the portion of the Total Outstandings, as applicable, owing or deemed owing to, any Defaulting Lender shall be excluded for purposes of making a determination of Supermajority Lenders.

“ Swingline Lender ” means Wachovia, in its capacity as swingline lender hereunder, and its successors and assigns.

“ Swingline Limit ” means $60,000,000.

“ Swingline Loans ” has the meaning given to such term in Section 2.2(a) .

“ Taxes ” has the meaning given to such term in Section 4.5(a) .

“ 30-Day Excess Availability ” means, in connection with an Investment pursuant to Section 10.3(p) or 10.3(q) , a Restricted Payment pursuant to Section 10.6(e) , or a prepayment, repurchase or repayment pursuant to Section 10.9(b)(iii) , the average daily Excess Availability for the thirty (30) consecutive day period immediately preceding such Investment or prepayment, repurchase or repayment, as applicable.

“ Threshold Amount ” means an amount equal to twenty percent (20%) of the Aggregate Commitment.

“ Total Outstandings ” means, as of any date of calculation, the aggregate principal Dollar Amount of all Loans and Letter of Credit Obligations outstanding as of such date.

“ Trademark ” has the meaning given to such term in the definition of “Intellectual Property”.

“ UCC ” means the Uniform Commercial Code as in effect in the State of New York, and any successor statute, as in effect from time to time.

“ Unfinanced Capital Expenditures ” means, for any applicable period of computation, Capital Expenditures made by the Company and its Subsidiaries during such period, which Capital Expenditures are not financed from the proceeds of any Indebtedness (other than the Loans) or any issuance of Capital Stock by the Company to fund such Capital Expenditure.

“ Value ” means, as determined by the Administrative Agent in good faith, with respect to Inventory, the lower of (a) cost computed on a first-in first-out basis in accordance with GAAP (or such

 

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inventory accounting methods (subject to customary reserves) proposed by the Administrative Borrower as are acceptable to the Administrative Agent in its reasonable discretion and, with respect to any change in inventory accounting methods, a notice setting forth a description and the impact of such change shall have been furnished to the Administrative Agent and the Lenders in writing prior to the implementation of such change) or (b) market value (in each case, taking into account each Borrower’s favorable purchase price variances); provided that for purposes of the calculation of the Borrowing Base, (i) the Value of the Inventory shall not include the portion of the value of Inventory equal to the profit earned by any Affiliate on the sale thereof to any Borrower and (ii) notwithstanding anything to the contrary contained herein, the cost of the Inventory shall be computed in the same manner and consistent with the most recent appraisal of the Inventory received and accepted by the Administrative Agent, if any.

“ Voting Stock ” means with respect to any Person, (a) one (1) or more classes of Capital Stock of such Person having general voting powers to elect at least a majority of the board of directors, managers or trustees of such Person, irrespective of whether at the time Capital Stock of any other class or classes have or might have voting power by reason of the happening of any contingency, and (b) any Capital Stock of such Person convertible or exchangeable without restriction at the option of the holder thereof into Capital Stock of such Person described in clause (a) of this definition.

“ Wachovia ” means Wachovia Bank, National Association, in its individual capacity, and its successors and assigns.

Section 1.2 Interpretative Provisions .

(a) All terms used herein that are defined in Article 1, Article 8 or Article 9 of the UCC shall have the meanings given therein unless otherwise defined in this Agreement.

(b) All references to the plural herein shall also mean the singular and to the singular shall also mean the plural unless the context otherwise requires.

(c) All references to any Loan Party, the Administrative Agent and the Lenders pursuant to the definitions set forth in the recitals hereto, or to any other person herein, shall include their respective successors and assigns.

(d) The words “hereof”, “herein”, “hereunder”, “this Agreement” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not any particular provision of this Agreement and as this Agreement now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.

(e) The word “including” when used in this Agreement shall mean “including, without limitation” and the word “will” when used in this Agreement shall be construed to have the same meaning and effect as the word “shall”.

(f) All references to the term “good faith” used herein when applicable to the Administrative Agent or any Lender shall mean, notwithstanding anything to the contrary contained herein or in the UCC, honesty in fact in the conduct or transaction concerned.

(g) Any accounting term used in this Agreement shall have, unless otherwise specifically provided herein, the meaning customarily given in accordance with GAAP, and all financial computations hereunder shall be computed unless otherwise specifically provided herein, in accordance with GAAP as consistently applied and using the same method for inventory valuation as used in the preparation of the financial statements of the Company most recently received by the Administrative

 

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Agent prior to the Closing Date. Notwithstanding anything to the contrary contained in GAAP or any interpretations or other pronouncements by the Financial Accounting Standards Board or otherwise, the term “unqualified opinion” as used herein to refer to opinions or reports provided by accountants shall mean an opinion or report that is unqualified and also does not include any explanation, supplemental comment or other comment concerning the ability of the applicable person to continue as a going concern or the scope of the audit, except as otherwise specifically prescribed herein. If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either Administrative Borrower or the Required Lenders shall so request, the Administrative Agent, the Lenders, the Issuing Banks and Administrative Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); provided that until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) Administrative Borrower shall provide to the Administrative Agent and the Lenders financial statements and other documents required under this Agreement (at the same time as the delivery of any annual, quarterly or monthly financial statements given in accordance with the provisions of Section 9.5 ) or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP. Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made, without giving effect to any election under Statement of Financial Accounting Standards 159 (or any other Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of any Borrower or any Subsidiary thereof at “fair value”, as defined therein.

(h) All time references in this Agreement and the other Loan Documents shall be to Eastern Daylight or Eastern Standard Time, as then in effect, from time to time unless otherwise indicated. In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including”, the words “to” and “until” each mean “to but excluding” and the word “through” means “to and including”.

(i) Unless otherwise expressly provided herein, (i) references herein to any agreement, document or instrument shall be deemed to include all subsequent amendments, modifications, supplements, extensions, renewals, restatements or replacements with respect thereto, but only to the extent the same are not prohibited by the terms hereof or of any other Loan Document, and (ii) references to any statute or regulation are to be construed as including all statutory and regulatory provisions consolidating, amending, replacing, recodifying, supplementing or interpreting the statute or regulation.

(j) The captions and headings of this Agreement are for convenience of reference only and shall not affect the interpretation of this Agreement.

(k) This Agreement and other Loan Documents may use several different limitations, tests or measurements to regulate the same or similar matters. All such limitations, tests and measurements are cumulative and shall each be performed in accordance with their terms.

(l) This Agreement and the other Loan Documents are the result of negotiations among and have been reviewed by counsel to the Administrative Agent and the other parties, and are the products of all parties. Accordingly, this Agreement and the other Loan Documents shall not be construed against the Administrative Agent or the Lenders merely because of the Administrative Agent’s or any Lender’s involvement in their preparation.

 

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(m) An Event of Default shall exist or continue or be continuing until such Event of Default is waived in accordance with Section 14.2 ; provided that any Event of Default resulting solely from the failure of the Loan Parties to give notice of a Default pursuant to Section 9.5(b)(vii) shall be deemed to be waived upon the cure or waiver of such Default without any further action hereunder.

(n) For purposes of this Agreement, (i) references to the applicable outstanding amount of Letters of Credit or Letter of Credit Obligations (including, without limitation, all Alternative Currency Letters of Credit and Alternative Currency Letter of Credit Obligations) shall be deemed to refer to the Dollar Amount thereof, (ii) any cash collateral that is required to be provided with respect to Letters of Credit or Letter of Credit Obligations (including, without limitation, all Alternative Currency Letters of Credit and Alternative Currency Letter of Credit Obligations) shall be provided in the Permitted Currency in which such Letters of Credit are issued and (iii) all Loans made under this Agreement, including, without limitation, Loans made to refund drawings made under Alternative Currency Letters of Credit, shall be made only in Dollars.

(o) For purposes of this Agreement, the Dollar Amount of any Alternative Currency Letter of Credit shall be determined in accordance with the terms of this Agreement in respect of the most recent Revaluation Date. Such Dollar Amount shall become effective as of such Revaluation Date for such Alternative Currency Letter of Credit and shall be the Dollar Amount employed in converting any amounts between the applicable currencies until the next Revaluation Date to occur for such Alternative Currency Letter of Credit.

(p) Each provision of this Agreement shall be subject to such reasonable changes of construction as the Administrative Agent may, in consultation with the Company, from time to time specify to be appropriate to reflect the adoption of the Euro by any member state of the European Union and any relevant market conventions or practices relating to the Euro. Each provision of this Agreement also shall be subject to such reasonable changes of construction as the Administrative Agent may, in consultation with the Company, from time to time specify to be appropriate to reflect a change in currency of any other country and any relevant market conventions or practices relating to the change in currency.

ARTICLE 2

CREDIT FACILITIES

Section 2.1 Revolving Loans . Subject to and upon the terms and conditions contained herein, each Lender severally (and not jointly) agrees to make its Pro Rata Share of Revolving Loans in Dollars to the Borrowers from time to time from the Closing Date to the Maturity Date in amounts requested by the Administrative Borrower on behalf of the Borrowers; provided that, subject to the terms of Section 2.8 , after giving effect to any Revolving Loan (a) the Total Outstandings shall not at any time exceed the lesser of (i) the Borrowing Base and (ii) the Aggregate Commitment and (b) the aggregate outstanding principal amount of all Revolving Loans of each Lender, together with such Lender’s Pro Rata Share of the aggregate outstanding principal amount of all Swingline Loans and Letter of Credit Obligations, shall not exceed such Lender’s Commitment. Subject to the terms and conditions hereof, the Borrowers may borrow, repay and reborrow Revolving Loans until the Maturity Date; provided that the Borrowers may not borrow during any Cash Dominion Grace Period unless the Company has waived application of such Cash Dominion Grace Period.

Section 2.2 Swingline Loans .

(a) Availability . Subject to and upon the terms and conditions of this Agreement (including, without limitation, the terms and conditions set forth in Section 2.2(d) ), the Swingline Lender

 

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shall make loans to each Borrower in Dollars (each such loan, a “ Swingline Loan ”) from time to time from the Closing Date to the Maturity Date in amounts requested by the Administrative Borrower on behalf of such Borrower up to the aggregate principal amount not to exceed at any time outstanding the amount of the Swingline Limit; provided that, subject to the terms of Section 2.8 , after giving effect to any Swingline Loan, such Swingline Loan shall not cause the Total Outstandings to exceed the lesser of (i) the Borrowing Base and (ii) the Aggregate Commitment. Subject to the terms and conditions hereof, the Borrowers may borrow, repay and reborrow the applicable Swingline Loans hereunder. Each such Swingline Loan shall be requested by the Administrative Borrower pursuant to Section 2.4(a) and shall be made available by the Swingline Lender to the relevant Borrower in accordance with Section 2.4(b) .

(b) Refunding . The Swingline Lender may by written notice given to the Administrative Agent not later than 11:00 a.m. on any Business Day require the Lenders to acquire participations on such Business Day in all or a portion of the Swingline Loans outstanding. Such notice shall specify the aggregate amount of Swingline Loans in which the Lenders will participate. Promptly upon receipt of such notice, the Administrative Agent will give notice thereof to each Lender, specifying in such notice such Lender’s Pro Rata Share of such Swingline Loan or Swingline Loans. Each Lender hereby absolutely and unconditionally agrees, upon receipt of notice as provided above, to pay to the Administrative Agent, for the account of the Swingline Lender, such Lender’s Pro Rata Share of such Swingline Loan or Swingline Loans. Amounts funded by the Lenders pursuant to this Section 2.2(b) shall bear interest payable by the Borrowers at the rate then applicable to Base Rate Loans. Each Lender acknowledges and agrees that its obligation to acquire participations in Swingline Loans pursuant to this paragraph is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or Event of Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. Each Lender shall comply with its obligation under this paragraph by wire transfer of immediately available funds, in the same manner as provided in Section 2.4(b) and Section 3.4 with respect to Revolving Loans made by such Lender (and Section 2.4(b) and Section 3.4 shall apply, mutatis mutandis , to the payment obligations of the Lenders), and the Administrative Agent shall promptly pay to the Swingline Lender the amounts so received by it from the Lenders. The Administrative Agent shall notify the Administrative Borrower of any participations in any Swingline Loan acquired pursuant to this paragraph, and thereafter payments in respect of such Swingline Loan shall be made to the Administrative Agent and not to the Swingline Lender. Any amounts received by the Swingline Lender from the relevant Borrower (or other party on behalf of the relevant Borrower) in respect of a Swingline Loan after receipt by the Swingline Lender of the proceeds of a sale of participations therein shall be promptly remitted to the Administrative Agent; any such amounts received by the Administrative Agent shall be promptly remitted by the Administrative Agent to the Lenders that shall have made their payments pursuant to this paragraph and to the Swingline Lender, as their interests may appear; provided that any such payment so remitted shall be repaid to the Swingline Lender or to the Administrative Agent, as the case may be, if and to the extent such payment is required to be refunded to any Borrower for any reason. The purchase of participations in a Swingline Loan pursuant to this paragraph shall not relieve the Borrowers of any default in the payment thereof.

(c) Settlement . The Administrative Agent, on behalf of the Swingline Lender, shall request settlement (a “ Settlement ”) with the Lenders on at least a weekly basis or on any earlier date that the Administrative Agent elects, by notifying the Lenders of such requested Settlement by facsimile, telephone, or e-mail no later than 12:00 noon on the date of such requested Settlement (the “ Settlement Date ”). Each Lender (other than the Swingline Lender, in the case of the Swingline Loans) shall transfer the amount of such Lender’s Pro Rata Share of the outstanding principal amount of the applicable Swingline Loan with respect to which Settlement is requested to the Administrative Agent, to such account of the Administrative Agent as the Administrative Agent may designate, not later than 3:00 p.m. on such Settlement Date. Settlements may occur during the existence of a Default or Event of Default

 

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and whether or not the applicable conditions precedent set forth in Section 5.2 have then been satisfied. Such amounts transferred to the Administrative Agent shall be applied against the amounts of the Swingline Lender’s Swingline Loans and, together with the Swingline Lender’s Pro Rata Share of such Swingline Loan, shall constitute Revolving Loans (which shall be Base Rate Loans) of such Lenders, respectively. If any such amount is not transferred to the Administrative Agent by any Lender on such Settlement Date, the Swingline Lender shall be entitled to recover such amount on demand from such Lender together with interest thereon as specified in Section 3.4(f) .

(d) Defaulting Lender . Notwithstanding anything to the contrary contained in this Section 2.2 , the Swingline Lender shall not be obligated to make any Swingline Loans at a time when any other Lender is a Defaulting Lender, unless the Swingline Lender has entered into arrangements satisfactory to it to eliminate the Swingline Lender’s risk with respect to any such Defaulting Lender’s funding obligations hereunder, including by cash collateralizing such Defaulting Lender’s Pro Rata Share of the applicable outstanding Swingline Loans. On demand by the Swingline Lender or the Administrative Agent from time to time, the Borrowers shall cash collateralize each Defaulting Lender’s Pro Rata Share of the outstanding Swingline Loans on terms reasonably satisfactory to the Administrative Agent and the Swingline Lender. Any such cash collateral shall be deposited in a separate account with the Administrative Agent as collateral for the payment and performance of each Defaulting Lender’s Pro Rata Share of outstanding Swingline Loans. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Swingline Lender immediately for each Defaulting Lender’s Pro Rata Share of any Swingline Loans which have not otherwise been refunded by the Borrowers or such Defaulting Lender pursuant to the terms of this Section 2.2 .

Section 2.3 Letters of Credit .

(a) Letters of Credit . Subject to and upon the terms and conditions contained herein and in the Letter of Credit Documents, at the request of the Administrative Borrower on behalf of a Loan Party or any Subsidiary thereof, the Administrative Agent agrees to cause the applicable Issuing Bank to issue, and such Issuing Bank agrees to issue, one or more Letters of Credit in Permitted Currencies, for the ratable risk of each Lender according to its Pro Rata Share, containing terms and conditions acceptable to the Administrative Agent and such Issuing Bank; provided that an Additional Issuing Bank may only issue Letters of Credit under this Section 2.3(a) following compliance with Section 2.3(j) with respect to such Additional Issuing Bank. As of the Closing Date, each of the Existing Letters of Credit shall constitute, for all purposes of this Agreement and the other Loan Documents, Letters of Credit issued and outstanding hereunder.

(b) Requests for Letters of Credit . The Administrative Borrower requesting a Letter of Credit on behalf of a Borrower shall give the Administrative Agent and the applicable Issuing Bank at least two (2) Business Days’ (or four (4) Business Days’ with respect to each Alternative Currency Letter of Credit) prior written notice of the Administrative Borrower’s request for the issuance of a Letter of Credit on such Borrower’s behalf together with an application, in form and substance reasonably satisfactory to such Issuing Bank and the Administrative Agent, for the issuance of the Letter of Credit and such other Letter of Credit Documents as may be reasonably required by the Administrative Agent or the applicable Issuing Bank. Such notice shall be irrevocable and shall (i) specify the original face amount of the Letter of Credit requested (or identify the Letter of Credit to be amended, renewed or extended), (ii) the Permitted Currency in which such Letter of Credit shall be denominated (which shall be Dollars if such notice does not specify a Permitted Currency), (iii) the effective date (which date shall be a Business Day and in no event shall be a date less than ten (10) days prior to the Maturity Date) of issuance of such requested Letter of Credit (or such amendment, renewal or extension), (iv) whether such Letter of Credit may be drawn in a single or in partial draws, (v) the date on which such requested Letter

 

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of Credit is to expire (which date shall be a Business Day and shall not be more than one year from the date of issuance or occur after the Maturity Date; provided that (A) a Letter of Credit may be subject to automatic extension for additional one-year periods pursuant to the terms of the Letter of Documents acceptable to the applicable Issuing Bank and (B) such Letter of Credit may have an expiration date after the Maturity Date if (x) each of the Administrative Agent and the applicable Issuing Bank consent in writing prior to the issuance thereof, (y) all Letter of Credit Obligations associated with any such Letter of Credit are cash collateralized or otherwise supported in a manner satisfactory to the Administrative Agent and the applicable Issuing Bank on or prior to the Maturity Date and (z) except with respect to drawings made under such Letter of Credit on or prior to the Maturity Date, each Lender, other than the applicable Issuing Bank, shall be released from its obligation to participate in such Letter of Credit on the Maturity Date), (vi) the purpose for which such Letter of Credit is to be issued, (vii) the name and address of the beneficiary of the requested Letter of Credit, (viii) such other information as shall be necessary to enable the applicable Issuing Bank to prepare, amend, renew or extend such Letter of Credit and (ix) the proposed terms of the Letter of Credit. In no event shall a Letter of Credit be issued, amended, renewed or extended unless the forms and terms of the proposed Letter of Credit (as amended, renewed or extended, as the case may be) are reasonably satisfactory to the Administrative Agent and the applicable Issuing Bank. The renewal or extension of, or increase in the amount of, 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.

(c) Conditions Precedent . In addition to being subject to the satisfaction of the applicable conditions precedent contained in Article 5 and the other terms and conditions contained herein, no Letter of Credit shall be available unless each of the following conditions precedent have been satisfied in a manner satisfactory to the Administrative Agent: (i) the form and terms of the proposed Letter of Credit shall be satisfactory to the Administrative Agent and the applicable Issuing Bank, (ii) as of the date of issuance, no order of any court, arbitrator or other Governmental Authority shall purport by its terms to enjoin or restrain money center banks generally from issuing letters of credit of the type and in the amount of the proposed Letter of Credit, and no law, rule or regulation applicable to money center banks generally and no request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over money center banks generally shall prohibit, or request that the applicable Issuing Bank refrain from, the issuance of letters of credit generally or the issuance of such Letter of Credit, (iii) after giving effect to the issuance of such Letter of Credit, the Letter of Credit Obligations shall not exceed the Letter of Credit Limit, (iv) after giving effect to the issuance of such Letter of Credit, the Alternative Currency Letter of Credit Obligations shall not exceed the Alternative Currency Letter of Credit Sublimit and (v) subject to the terms of Section 2.8 , after giving effect to the issuance of such Letter of Credit, the Total Outstandings at such time shall not exceed the lesser of (A) the Borrowing Base at such time and (B) the Aggregate Commitment at such time.

(d) Reimbursement . Each Borrower shall reimburse immediately the applicable Issuing Bank in the applicable Permitted Currency for any draw under any Letter of Credit issued for the account of such Borrower and pay such Issuing Bank the amount of all other charges and fees payable to such Issuing Bank in connection with any Letter of Credit issued for the account of such Borrower immediately when due, irrespective of any claim, setoff, defense or other right which such Borrower may have at any time against such Issuing Bank or any other Person. Each drawing under any Letter of Credit or other amount payable in connection therewith when due, if such drawing is not reimbursed by the Borrowers as provided in the immediately preceding sentence, shall constitute a request by the Borrower for whose account such Letter of Credit was issued to the Administrative Agent for a Base Rate Loan in the Dollar Amount of such drawing or other amount then due, and shall be made by the Administrative Agent on behalf of the Lenders as a Revolving Loan (or Special Agent Advance, as the case may be). The date of such Revolving Loan (or Special Agent Advance, as applicable) shall be the date of the drawing or, as to other amounts, the due date therefor. Any payments made by or on behalf of the Administrative Agent or any Lender to the applicable Issuing Bank and/or related parties in connection with any Letter of Credit shall constitute additional Revolving Loans to such Borrower pursuant to this Section 2 (or Special Agent Advances as the case may be).

 

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(e) Indemnification; Assumption of Risk . The Loan Parties shall indemnify and hold the Administrative Agent and the Lenders harmless from and against any and all losses, claims, damages, liabilities, costs and expenses which the Administrative Agent or any Lender may suffer or incur in connection with any Letter of Credit and any documents, drafts or acceptances relating thereto, including any losses (including currency fluctuations), claims, damages, liabilities, costs and expenses due to any action taken by the applicable Issuing Bank or correspondent with respect to any Letter of Credit, except to the extent such losses, claims, damages, liabilities, costs or expenses result from the gross negligence or willful misconduct of the Administrative Agent or any Lender as determined pursuant to a final non-appealable order of a court of competent jurisdiction. Each Loan Party assumes all risks with respect to the acts or omissions of the drawer under or beneficiary of any Letter of Credit. None of the Administrative Agent or any Lender shall be responsible for paying any foreign, Federal, State or local taxes, duties or levies relating to any goods subject to any Letter of Credit or any documents, drafts or acceptances thereunder. Each Loan Party hereby releases and holds the Administrative Agent and the Lenders harmless from and against any acts, waivers, errors, delays or omissions with respect to or relating to any Letter of Credit, except for the gross negligence or willful misconduct of the Administrative Agent or any Lender as determined pursuant to a final, non-appealable order of a court of competent jurisdiction. The provisions of this Section 2.3(e) shall survive the payment of Obligations and the termination of this Agreement.

(f) Loan Party as Account Party . Each Loan Party hereby irrevocably authorizes and directs the applicable Issuing Bank to name such Loan Party as the account party therein and to deliver to the Administrative Agent all instruments, documents and other writings and property received by such Issuing Bank pursuant to the Letter of Credit. Nothing contained herein shall be deemed or construed to grant to any Loan Party any right or authority to pledge the credit of the Administrative Agent or any Lender in any manner. Loan Parties shall be bound by any reasonable interpretation made in good faith by the Administrative Agent, or the applicable Issuing Bank under or in connection with any Letter of Credit or any documents, drafts or acceptances thereunder, notwithstanding that such interpretation may be inconsistent with any instructions of any Loan Party.

(g) Participations . Immediately upon the issuance or amendment of any Letter of Credit, each Lender shall be deemed to have irrevocably and unconditionally purchased and received, without recourse or warranty, an undivided interest and participation therein equal to such Lender’s Pro Rata Share of the liability with respect to such Letter of Credit and the obligations of the applicable Borrowers with respect thereto (including all Letter of Credit Obligations with respect thereto). Each Lender shall absolutely, unconditionally and irrevocably assume, as primary obligor and not as surety, and be obligated to pay to the applicable Issuing Bank therefor and discharge when due, its Pro Rata Share of all of such 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 applicable Issuing Bank has not been reimbursed or otherwise paid as required hereunder or under any such Letter of Credit, each such Lender shall pay to such Issuing Bank its Pro Rata Share of such unreimbursed drawing or other amounts then due to such Issuing Bank in connection therewith. If such amount is not made available by a Lender when due, the Administrative Agent shall be entitled to recover such amount on demand from such Lender with interest thereon, for each day from the date such amount was due until the date such amount is paid to the Administrative Agent at the interest rate then payable by any Borrower in respect of Loans that are Base Rate Loans. All payments made by the Lenders pursuant to this Section 2.3(g) shall be funded in Dollars based on the Dollar Amount of the applicable obligation.

 

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(h) Obligations Absolute . The obligations of the Borrowers to pay the applicable Letter of Credit Obligations and the obligations of the Lenders to make payments to the Administrative Agent for the account of the applicable Issuing Bank with respect to Letters of Credit shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances, whatsoever, notwithstanding the occurrence or continuance of any Default, Event of Default, the failure to satisfy any other condition set forth in Article 5 or any other event or circumstance. Any reimbursement pursuant to Section 2.3(f) shall not relieve or otherwise impair the obligation of the Borrowers to reimburse the applicable Issuing Bank under any Letter of Credit or make any other payment in connection therewith.

(i) Defaulting Lender . Notwithstanding anything to the contrary contained in this Section 2.3 , no Issuing Bank shall be obligated to issue any Letter of Credit at a time when any other Lender is a Defaulting Lender, unless such Issuing Bank has entered into arrangements satisfactory to it to eliminate such Issuing Bank’s risk with respect to any such Defaulting Lender’s reimbursement obligations hereunder, including by cash collateralizing such Defaulting Lender’s Pro Rata Share of the liability with respect to such Letter of Credit. On demand by the applicable Issuing Bank or the Administrative Agent from time to time, the Borrowers shall cash collateralize each Defaulting Lender’s Pro Rata Share of the outstanding Letter of Credit Obligations on terms reasonably satisfactory to the Administrative Agent and the applicable Issuing Bank. Any such cash collateral shall be deposited in a separate account with the Administrative Agent as collateral for the payment and performance of each Defaulting Lender’s Pro Rata Share of the outstanding Letter of Credit Obligations. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the applicable Issuing Bank immediately for each Defaulting Lender’s Pro Rata Share of any drawing under any Letter of Credit which has not otherwise been reimbursed by the Borrowers or such Defaulting Lender pursuant to the terms of this Section 2.3 .

(j) Appointment and Duties of Additional Issuing Banks . The Administrative Borrower may appoint Additional Issuing Banks by written agreement among the Administrative Borrower, the Administrative Agent and the applicable Additional Issuing Bank entered into at least two (2) Business Days before the issuance of any Letters of Credit by such Additional Issuing Bank. Any Lender designated as an Additional Issuing Bank shall remain as such until the Administrative Borrower gives written notice to the Administrative Agent that such Lender is no longer an Additional Issuing Bank or such Additional Issuing Bank resigns pursuant to Section 14.11(g) ; provided that no Letter of Credit Obligations remain outstanding with respect to such Additional Issuing Bank. Each Additional Issuing Bank shall notify the Administrative Agent at least two (2) Business Days before (i) the issuance of any Letter of Credit by such Additional Issuing Bank and (ii) any amendment or modification to any Letter of Credit issued by such Additional Issuing Bank.

Section 2.4 Procedure for Advance of Loans .

(a) Requests for Borrowing . To request a Revolving Loan or a Swingline Loan on behalf of a Borrower, the Administrative Borrower shall give the Administrative Agent irrevocable prior written notice substantially in the form of Exhibit F hereof (a “ Notice of Borrowing ”) not later than 11:00 a.m. (i) on the same Business Day as each Base Rate Loan and each Swingline Loan and (ii) at least three (3) Business Days before each Eurodollar Rate Loan, of its intention to borrow, specifying (A) the date of such borrowing, which shall be a Business Day, (B) the amount of such borrowing, which shall be, (x) with respect to Base Rate Loans (other than Swingline Loans) in an aggregate principal amount of $2,000,000 or a whole multiple of $500,000 in excess thereof, (y) with respect to Eurodollar Rate Loans in an aggregate principal amount of $2,000,000 or a whole multiple of $500,000 in excess thereof and (z) with respect to Swingline Loans in an aggregate principal amount of $100,000 or a whole multiple of

 

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$25,000 in excess thereof, (C) whether such Loan is to be a Revolving Loan or Swingline Loan, (D) in the case of a Revolving Loan, whether the Loans are to be Eurodollar Rate Loans or Base Rate Loans, and (E) in the case of a Eurodollar Rate Loan, the duration of the Interest Period applicable thereto. A Notice of Borrowing received after 11:00 a.m. shall be deemed received on the next Business Day. Any Loan or any portion thereof as to which the Administrative Borrower has not duly specified an interest rate as provided herein shall be deemed a Base Rate Loan in the case of a Revolving Loan, and any Eurodollar Rate Loan for which the Administrative Borrower fails to specify an Interest Period shall be deemed to have an Interest Period of one (1) month. The Administrative Agent shall promptly notify the Lenders of each Notice of Borrowing.

(b) Disbursement of Revolving Loans and Swingline Loans . Not later than 1:00 p.m. on the proposed borrowing date, (i) each Lender will make available to the Administrative Agent, for the account of the applicable Borrower, at the office of the Administrative Agent in funds immediately available to the Administrative Agent, such Lender’s Pro Rata Share of the Revolving Loans to be made on such borrowing date and (ii) the Swingline Lender will make available to the Administrative Agent, for the account of the applicable Borrower, at the office of the Administrative Agent in funds immediately available to the Administrative Agent, the Swingline Loans to be made on such borrowing date. The Borrowers hereby irrevocably authorize the Administrative Agent to disburse the proceeds of each borrowing requested pursuant to this Section 2.4 in immediately available funds by crediting or wiring such proceeds to the deposit account of such Borrower identified in the most recent notice substantially in the form attached as Exhibit G hereto (a “ Notice of Account Designation ”) delivered by the Administrative Borrower to the Administrative Agent or as may be otherwise agreed upon by the Administrative Borrower and the Administrative Agent from time to time. Subject to Section 3.6 , the Administrative Agent shall not be obligated to disburse the portion of the proceeds of any Revolving Loan requested pursuant to this Section 2.4 to the extent that any Lender has not made available to the Administrative Agent its Pro Rata Share of such Revolving Loan. Revolving Loans to be made for the purpose of refunding Swingline Loans shall be made by the Lenders as provided in Section 2.2(c) .

(c) Authorization to Make Loans . The Administrative Agent and the Lenders are authorized to make the Loans based upon telephonic or other instructions received from anyone purporting to be an officer of the Administrative Borrower or any Borrower or other authorized person or, at the discretion of the Administrative Agent, if such Loans are necessary to satisfy any Obligations. All Loans and Letters of Credit under this Agreement shall be conclusively presumed to have been made to, and at the request of and for the benefit of, any Borrower when deposited to the credit of any Borrower or otherwise disbursed or established in accordance with the instructions of the Administrative Borrower or in accordance with the terms and conditions of this Agreement.

Section 2.5 Repayments and Prepayments .

(a) Repayment on Maturity Date . The Borrowers hereby agree to repay the outstanding principal amount of (i) all Revolving Loans in full on the Maturity Date, and (ii) all Swingline Loans on the earlier to occur of (x) one (1) Business Day following demand for payment thereof by the Administrative Agent and (y) the Maturity Date, together, in each case, with all accrued but unpaid interest thereon; provided that to the extent that the outstanding principal amount of any Swingline Loan is not repaid as set forth in clause (x) above, the Administrative Agent shall request a Settlement with respect to such Swingline Loan pursuant to Section 2.2(c) , and the Borrowers shall be deemed to have satisfied their obligations to repay such Swingline Loan upon the completion of such Settlement.

(b) Optional Prepayments . The Borrowers may at any time and from time to time prepay Revolving Loans and Swingline Loans, in whole or in part, with irrevocable prior written notice to the Administrative Agent substantially in the form of Exhibit H (a “ Notice of Prepayment ”) given not

 

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later than 11:00 a.m. (i) on the same Business Day as each Base Rate Loan and each Swingline Loan and (ii) at least three (3) Business Days before each Eurodollar Rate Loan, specifying the date and amount of prepayment and whether the prepayment is of Eurodollar Rate Loans, Base Rate Loans, Swingline Loans or a combination thereof, and, if of a combination thereof, the amount allocable to each. Upon receipt of such notice, the Administrative Agent shall promptly notify each Lender. If any such notice is given, the amount specified in such notice shall be due and payable on the date set forth in such notice. Partial prepayments shall be in an aggregate amount of $2,000,000 or a whole multiple of $500,000 in excess thereof with respect to Base Rate Loans (other than Swingline Loans), $2,000,000 or a whole multiple of $500,000 in excess thereof with respect to Eurodollar Rate Loans and $100,000 or a whole multiple of $25,000 in excess thereof with respect to Swingline Loans. A Notice of Prepayment received after 11:00 a.m. shall be deemed received on the next Business Day. Each such repayment shall be accompanied by any amount required to be paid pursuant to Section 4.6 .

(c) Mandatory Prepayments .

(i) Except as provided in Section 2.8 , if at any time the Total Outstandings exceed the lesser of (i) the Borrowing Base and (ii) the Aggregate Commitment, the Borrowers shall repay promptly upon the earlier of (A) any Responsible Officer of the Administrative Borrower obtaining knowledge thereof and (B) demand from the Administrative Agent, by payment to the Administrative Agent for the account of the Lenders, an amount equal to such excess with each such repayment applied first to the principal amount of outstanding Swingline Loans, second to the principal amount of outstanding Revolving Loans and third , with respect to any Letters of Credit then outstanding, to a payment of cash collateral into a cash collateral account opened by the Administrative Agent, for the benefit of the Lenders.

(ii) If as of the most recent Revaluation Date and for any reason (including, without limitation, due to currency rate fluctuations) (A) the outstanding Letter of Credit Obligations exceed the Letter of Credit Limit or (B) the outstanding Alternative Currency Letter of Credit Obligations exceed the Alternative Currency Letter of Credit Sublimit, then the Borrowers shall, promptly upon the earlier of (x) any Responsible Officer of the Administrative Borrower obtaining knowledge thereof and (y) demand from the Administrative Agent, by payment to the Administrative Agent for the account of the applicable Issuing Banks and the Lenders, make a payment of cash collateral in an amount equal to such excess into a cash collateral account opened by the Administrative Agent, for the benefit of the applicable Issuing Banks and the Lenders.

(iii) If at any time any Loan Party or any of its Subsidiaries shall receive Net Cash Proceeds from (A) any insurance or condemnation award payable by reason of theft, loss, physical destruction or damage, taking or similar event with respect to any Collateral or (B) the sale (or series of sales) or other disposition of Collateral or Material Trademarks, the Borrowers shall prepay Loans in an amount equal to one hundred percent (100%) of such Net Cash Proceeds, which Net Cash Proceeds shall promptly upon receipt thereof be deposited into a Blocked Account and payments therefrom shall be applied by the Administrative Agent for the account of the Lenders first to the principal amount of outstanding Swingline Loans and second to the principal amount of outstanding Revolving Loans, without a corresponding reduction of the Aggregate Commitment; provided that such prepayment shall only be required (x) during a Cash Dominion Period or (y) if, after giving effect to any event described in this clause (ii), a Cash Dominion Period (without giving effect to any Cash Dominion Grace Period) would be triggered.

(d) Limitation on Prepayment of LIBOR Rate Loans . The Borrowers may not prepay any Eurodollar Rate Loan on any day other than on the last day of the Interest Period applicable thereto unless such prepayment is accompanied by any amount required to be paid pursuant to Section 4.6 .

 

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(e) Hedging Agreements . No repayment or prepayment pursuant to this Section 2.5 shall affect any Loan Party’s obligations under any Hedging Agreement.

Section 2.6 Optional Reduction of Commitments . The Administrative Borrower shall have the right to terminate or permanently reduce the unused portion of the Aggregate Commitment at any time or from time to time upon not less than three (3) Business Days’ prior written 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 $10,000,000 or a whole multiple of $1,000,000 in excess thereof and shall be irrevocable and effective upon receipt by the Administrative Agent; provided that no such reduction or termination shall be permitted if after giving effect thereto, and to any prepayments of the Loans made on the effective date thereof, the sum of then outstanding aggregate principal amount of the Loans plus Letter of Credit Obligations would exceed the Aggregate Commitment after such proposed reduction.

Section 2.7 Optional Increase of Commitments . At any time following the Closing Date, the Company shall have the right, from time to time and upon not less than fifteen (15) Business Days (or such shorter period of time as agreed to by the Administrative Agent in its sole discretion) prior written notice to the Administrative Agent (which notice shall not obligate the Company to increase the Aggregate Commitment) to increase the Aggregate Commitment (each such increase, a “ Facility Increase ”); provided that:

(a) no Default or Event of Default shall have occurred and be continuing or would result from any such requested Facility Increase or borrowings thereunder;

(b) all representations and warranties contained herein and in the other Loan Documents shall be true and correct in all material respects with the same effect as though such representations and warranties had been made on and as of the date of such Facility Increase and after giving effect thereto, except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties shall have been true and correct in all material respects on and as of such earlier date); provided that any representation or warranty that is qualified as to “materiality”, “Material Adverse Effect” or similar language shall be true and correct (after giving effect to any qualification therein) in all respects on such respective dates;

(c) each Facility Increase shall be in an aggregate principal amount of at least $50,000,000 or a whole multiple of $10,000,000 in excess thereof;

(d) the aggregate amount of all Facility Increases made pursuant to this Section 2.7 shall not exceed $200,000,000;

(e) Facility Increases shall not increase or otherwise affect the Letter of Credit Limit or the Swingline Limit;

(f) the Commitment of any Lender shall not be increased without the approval of such Lender;

(g) in connection with each proposed Facility Increase, the Company may solicit commitments from (i) any Lender ( provided that no Lender shall have an obligation to commit to all or a portion of the proposed Facility Increase) or (ii) Eligible Assignees that are reasonably acceptable to both the Administrative Agent and the Company;

 

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(h) in the event that any existing Lender or any new lender commits to such requested Facility Increase, (i) any new lender will execute an accession agreement to this Agreement, (ii) the Commitment of any existing Lender that has committed to provide any of the requested increase shall be increased, (iii) the Pro Rata Shares of the Lenders shall be adjusted, (iv) the Borrowers shall make such borrowings and repayments as shall be necessary to affect the reallocation of the Commitments (and the Borrowers shall pay any amounts due under Section 4.6 in connection therewith), and (v) other changes shall be made to the Loan Documents as may be necessary to reflect the aggregate amount, if any, by which the Lenders have agreed to increase their respective Commitments or make new commitments in response to the Company’s request for an increase pursuant to this Section 2.7 and which other changes do not adversely affect the rights of those Lenders not participating in the increase;

(i) if the Aggregate Commitment is increased in accordance with this Section 2.7 , the Administrative Agent and the Company shall determine the effective date (the “ Increase Effective Date ”) and the final allocation of such Facility Increase and the Administrative Agent shall promptly notify the Administrative Borrower and the Lenders of the final allocation of such Facility Increase and Increase Effective Date;

(j) the Administrative Agent and the Lenders shall have received any fees and expenses payable by the Loan Parties in respect of such Facility Increase; and

(k) each Facility Increase shall be subject to all of the terms and conditions of this Agreement, and shall be secured by the Collateral and guaranteed by Guarantors pursuant to the terms hereof.

Section 2.8 Overadvances; Special Agent Advances .

(a) Additional Loans . No Loan shall be made nor shall any Letter of Credit be provided to any Borrower intentionally and with actual knowledge that such Loan or Letter of Credit would cause the Total Outstandings to exceed the lesser of (i) the Borrowing Base and (ii) the Aggregate Commitment (such excess, an “ Overadvance ”), without the prior consent of all of the Lenders, except, that, notwithstanding anything to the contrary contained herein and unless its authority has been revoked in writing by the Required Lenders, the Administrative Agent may require the Lenders to honor requests for such additional Loans or any Issuing Bank may provide such additional Letters of Credit intentionally and with actual knowledge that such Loans or Letters of Credit will cause an Overadvance, as the Administrative Agent may deem necessary or advisable in its discretion; provided that:

(i) the sum of (i) the aggregate principal amount of the additional Loans or additional Letters of Credit to any Borrower that may be made or provided after obtaining such actual knowledge of such Overadvance plus (ii) the amount of Special Agent Advances made pursuant to Section 2.8(b) then outstanding, shall not exceed an aggregate amount equal to the lesser of (x) ten percent (10%) of the Aggregate Commitment and (y) $60,000,000;

(ii) the sum of (i) the aggregate outstanding principal amount of the Loans and Letters of Credit (including the additional Loans and additional Letters of Credit made pursuant to this Section 2.8(a) ), plus (ii) the amount of Special Agent Advances made pursuant to Section 2.8(b) then outstanding, shall not exceed the Aggregate Commitment; and

 

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(iii) no such additional Loan or Letter of Credit shall be outstanding more than forty-five (45) days after the date such additional Loan or Letter of Credit is made or issued (as the case may be), in each case, except as the Required Lenders may otherwise agree.

Each Lender shall provide the amount of its Pro Rata Share of any such additional Loans or Letters of Credit pursuant to the terms of this Agreement, which Loans and Letters of Credit shall bear interest at the same applicable rates for other Loans and Letters of Credit made or provided hereunder.

(b) Special Agent Advances . The Administrative Agent may, at its option, from time to time, at any time on or after an Event of Default and for so long as the same is continuing or upon any other failure of a condition precedent to the Loans and Letters of Credit hereunder, make such disbursements and advances (“ Special Agent Advances ”) which the Administrative Agent, in its sole discretion, deems necessary or desirable either (i) to preserve or protect the Collateral or any portion thereof, (ii) to enhance the likelihood or maximize the amount of repayment by the Loan Parties of the Loans or any other Obligations or (iii) to pay any other amount chargeable to any Loan Party pursuant to the terms of this Agreement or any of the other Loan Documents consisting of costs, fees and expenses and payments to any Issuing Bank in respect of any Letter of Credit Obligations, provided that (A) the aggregate principal amount of the Special Agent Advances outstanding at any time, plus then outstanding principal amount of the additional Loans and Letters of Credit made or provided pursuant to Section 2.8(a) , shall not exceed an aggregate amount equal to the lesser of (x) ten percent (10%) of the Aggregate Commitment and (y) $60,000,000 and (B) the aggregate principal amount of the Special Agent Advances outstanding at any time, plus the then outstanding principal amount of the Loans and Letters of Credit (including the additional Loans and the additional Letters of Credit made pursuant to Section 2.8(a) ), shall not exceed the Aggregate Commitment, except at the Administrative Agent’s option; provided that to the extent that the aggregate principal amount of Special Agent Advances plus then outstanding principal amount of the Loans and Letters of Credit exceed the Aggregate Commitment, the Special Agent Advances that are in excess of the Aggregate Commitment (“ Excess Special Agent Advances ”) shall be for the sole account and risk of the Administrative Agent and notwithstanding anything to the contrary set forth below, no Lender shall have any obligation to provide its share of such Excess Special Agent Advances. The Special Agent Advances shall be repayable on demand and together with all interest thereon shall constitute Obligations secured by the Collateral. Special Agent Advances shall not constitute Loans but shall otherwise constitute Obligations hereunder. Interest on Special Agent Advances shall be payable at the interest rate then applicable to Base Rate Loans and shall be payable on demand. Each Lender agrees that it shall make available to the Administrative Agent, upon the Administrative Agent’s demand, in immediately available funds, the amount equal to such Lender’s Pro Rata Share of each such Special Agent Advance not to exceed such Lender’s Commitment. If such funds are not promptly made available to the Administrative Agent by such Lender, such Lender shall be deemed a Defaulting Lender and the Administrative Agent shall be entitled to recover such funds, on demand from such Lender together with interest thereon for each day from the date such payment was due until the date such amount is paid to the Administrative Agent at the greater of the daily average of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation for each day during such period and if such amounts are not paid within three (3) days of the Administrative Agent’s demand, at the highest interest rate provided for in Section 3.1 applicable to Base Rate Loans. The Required Lenders may at any time by written notice to the Administrative Agent (x) revoke the Administrative Agent’s authority to make further Special Agent Advances (including Excess Special Agent Advances) and (y) instruct the Administrative Agent to demand repayment of outstanding Special Agent Advances from the Loan Parties. Absent such revocation, the Administrative Agent’s determination that funding of a Special Agent Advance is appropriate shall be conclusive.

 

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Section 2.9 Joint and Several Liability of the Borrowers .

(a) Notwithstanding anything in this Agreement or any other Loan Documents to the contrary, each Borrower, jointly and severally, in consideration of the financial accommodations to be provided by the Administrative Agent and the Lenders under this Agreement and the other Loan Documents, for the mutual benefit, directly and indirectly, of each Borrower and in consideration of the undertakings of the other Borrowers to accept joint and several liability for the Obligations, hereby irrevocably and unconditionally accepts, not merely as a surety but also as a co-debtor, joint and several liability with the other Borrowers, with respect to the payment and performance of all of the Obligations, it being the intention of the parties hereto that all of the Obligations shall be the joint and several obligations of each Borrower without preferences or distinction among them. The Borrowers shall be liable for all amounts due to the Administrative Agent and the Lenders under this Agreement, regardless of which Borrower actually receives the Loans or Letter of Credit Obligations hereunder or the amount of such Revolving Loans received or the manner in which the Administrative Agent or any Lender accounts for such Loans, Letter of Credit Obligations or other extensions of credit on its books and records. The Obligations of the Borrowers with respect to Revolving Loans made to one of them, and the Obligations arising as a result of the joint and several liability of one of the Borrowers hereunder with respect to Revolving Loans made to the other of the Borrowers hereunder, shall be separate and distinct obligations, but all such other Obligations shall be primary obligations of all the Borrowers.

(b) If and to the extent that any Borrower shall fail to make any payment with respect to any of the Obligations as and when due or to perform any of the Obligations in accordance with the terms thereof, then in each such event, the other Borrowers will make such payment with respect to, or perform, such Obligation.

(c) Except as otherwise expressly provided herein, to the extent permitted by law, each Borrower (in its capacity as a joint and several obligor in respect of the obligations of the other Borrower) hereby waives notice of acceptance of its joint and several liability, notice of occurrence of any Event of Default (except to the extent notice is expressly required to be given pursuant to the terms of this Agreement), or of any demand for any payment under this Agreement or the other Loan Documents, notice of any action at any time taken or omitted by the Administrative Agent or any Lender under or in respect of any of the obligations hereunder, any requirement of diligence and, generally, all demands, notices and other formalities of every kind in connection with this Agreement and the other Loan Documents. Each Borrower hereby assents to, and waives notice of, any extension or postponement of the time for the payment of any of the Obligations, the acceptance of any partial payment thereon, any waiver, consent or other action or acquiescence by the Administrative Agent or any Lender at any time or times in respect of any default by the other Borrowers in the performance or satisfaction of any term, covenant, condition or provision of this Agreement, any and all other indulgences whatsoever by the Administrative Agent or any Lender in respect of any of the obligations hereunder, and the taking, addition, substitution or release, in whole or in part, at any time or times, of any security for any of such obligations or the addition, substitution or release, in whole or in part, of the other Borrowers. Without limiting the generality of the foregoing, each Borrower (in its capacity as a joint and several obligor in respect of the obligations of the other Borrowers) assents to any other action or delay in acting or any failure to act on the part of the Administrative Agent or any Lender, including, without limitation, any failure strictly or diligently to assert any right or to pursue any remedy or to comply fully with applicable laws or regulations thereunder which might, but for the provisions of this Section 2.9 , afford grounds for terminating, discharging or relieving such Borrower, in whole or in part, from any of its obligations under this Section 2.9 , it being the intention of each Borrower that, so long as any of the Obligations hereunder remain unsatisfied, the obligations of such Borrower under this Section 2.9 shall not be discharged except by payment or performance and then only to the extent of such payment or performance. The obligations of each Borrower under this Section 2.9 shall not be diminished or rendered unenforceable by any winding up, reorganization, arrangement, liquidation, reconstruction or similar proceeding with respect to any other Borrower. The joint and several liability of each Borrower hereunder shall continue in full force and effect notwithstanding any absorption, merger, amalgamation or any other change whatsoever in the name, membership, constitution or place of formation of any other Borrower or any of the Lenders.

 

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(d) The provisions of this Section 2.9 are made for the benefit of the Lenders and their successors and assigns, and subject to Section 11.2 , may be enforced by them from time to time against any Borrower as often as occasion therefor may arise and without requirement on the part of the Administrative Agent or any Lender first to marshal any of its claims or to exercise any of its rights against the other Borrowers or to exhaust any remedies available to it against the other Borrowers or to resort to any other source or means of obtaining payment of any of the Obligations hereunder or to elect any other remedy.

(e) Notwithstanding any provision to the contrary contained herein or in any of the other Loan Documents, to the extent the obligations of a Borrower 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 such Borrower hereunder shall be limited to the maximum amount that is permissible under applicable law (whether federal or state and including, without limitation, the United States Bankruptcy Code).

(f) With respect to the Obligations arising as a result of the joint and several liability of the Borrowers hereunder with respect to Loans, Letter of Credit Obligations or other extensions of credit made to the other Borrowers hereunder, each Borrower waives, until the Obligations shall have been paid in full (other than indemnities and contingent Obligations which have not yet accrued) and this Agreement shall have been terminated, any right to enforce any right of subrogation or any remedy which the Administrative Agent or any Lender now has or may hereafter have against any Borrower, any endorser or any guarantor of all or any part of the Obligations, and any benefit of, and any right to participate in, any security or collateral given to the Administrative Agent or any Lender. Any claim which any Borrower may have against any other Borrower with respect to any payments to the Administrative Agent or the Lenders hereunder or under any of the other Loan Documents are hereby expressly made subordinate and junior in right of payment, without limitation as to any increases in the Obligations arising hereunder or thereunder, to the prior payment in full in cash of the Obligations. Upon the occurrence of any Event of Default and for so long as the same is continuing, the Administrative Agent and the Lenders may proceed directly and at once, without notice (to the extent notice is waivable under applicable law), against (i) with respect to Obligations of the Borrowers, any of them or (ii) with respect to Obligations of any Borrower, to collect and recover the full amount, or any portion of the applicable Obligations, without first proceeding against the other applicable Borrowers or any other Person, or against any security or collateral for the Obligations. Each Borrower consents and agrees that the Administrative Agent and the Lenders shall be under no obligation to marshal any assets in favor of Borrower(s) or against or in payment of any or all of the Obligations.

Section 2.10 Appointment of Administrative Borrower as Agent for Requesting Loans and Receipts of Loans and Statements .

(a) Each Borrower hereby irrevocably appoints and constitutes the Administrative Borrower as its agent and attorney-in-fact to request and receive Loans and Letters of Credit pursuant to this Agreement and the other Loan Documents from the Administrative Agent or any Lender in the name or on behalf of such Borrower. The Administrative Agent and the Lenders may disburse the Loans to such bank account of the Administrative Borrower or a Borrower or otherwise make such Loans to a Borrower and provide such Letters of Credit to a Borrower as the Administrative Borrower may designate or direct, without notice to any other Loan Party. Notwithstanding anything to the contrary contained herein, the Administrative Agent may at any time and from time to time require that Loans to or for the account of any Borrower be disbursed directly to an operating account of such Borrower.

 

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(b) The Administrative Borrower hereby accepts the appointment by the Borrowers to act as the agent and attorney-in-fact of the Borrowers pursuant to this Section 2.10 . The Administrative Borrower shall ensure that the disbursement of any Loans to each Borrower requested by or paid to or for the account of the Company, or the issuance of any Letter of Credit for a Borrower hereunder, shall be paid to or for the account of such Borrower.

(c) Each Loan Party hereby irrevocably appoints and constitutes the Administrative Borrower as its agent to receive statements on account and all other notices from the Administrative Agent and the Lenders with respect to the Obligations or otherwise under or in connection with this Agreement and the other Loan Documents.

(d) Any notice, election, representation, warranty, agreem