UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549-1004

FORM 8-K

Current Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

December 19, 2017

(Date of Report (Date of Earliest Event Reported))

LA-Z-BOY INCORPORATED

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code (734) 242-1444

None

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Item 1.01 Entry Into a Material Definitive Agreement

On December 19, 2017, La-Z-Boy Incorporated (the “Company”) and most of its domestic subsidiaries (collectively, the “Loan Parties”), signed a $150 million Second Amended and Restated Credit Agreement (the “Amended Agreement”) with Wells Fargo Capital Finance, LLC, as administrative agent and lender, and the financial institutions named therein (the “Lenders”). The Amended Agreement amends the $150 million Amended and Restated Credit Agreement dated as of October 19, 2011, among the Company, most of its domestic subsidiaries, the financial institutions listed therein, and Wells Fargo Capital Finance Corporation, LLC, as administrative agent, as amended on December 30, 2014 (the “Prior Agreement”). The Amended Agreement extends the maturity date of the revolving credit facility from December 30, 2019, to December 19, 2022. At the time the Amended Agreement became effective, there were no amounts outstanding under the Prior Agreement.

The Amended Agreement is a revolving credit facility with a commitment of $150 million. The Amended Agreement continues to be secured primarily by all of the Loan Parties’ accounts receivable, inventory, cash deposit and securities accounts.

Availability under the Amended Agreement will continue to vary based on a borrowing base calculation consisting of eligible accounts receivable and inventory. Interest on LIBOR Rate loans under the Prior Agreement varied from LIBOR plus 1.25% to 1.75% based on average Excess Availability (as defined). As a result of the Amended Agreement, the margin on Libor Rate loans, which continues to be based on average Excess Availability, will vary between LIBOR plus 1.00% to 1.50%. Interest on Base Rate loans under the Prior Agreement varied from 0.00% to 0.50% over the Base Rate also based on average Excess Availability. As a result of the Amended Agreement, the margin on Base Rate loans, which continues to be based on average Excess Availability, will vary between minus 0.25% and plus 0.25%.  The Base Rate is the highest of (a) the Federal Funds Rate plus 1/2 of 1%; (b) the one-month LIBOR Rate plus 1%; and (c) the rate of interest announced, from time to time, within Wells Fargo Bank at its principal office in San Francisco as its “prime rate.”

The foregoing description of the Amended Agreement is qualified in its entirety by reference to the complete text of the Amended Agreement. A copy of the Amended Agreement is filed as Exhibit 4.1 to this Report on Form 8-K and is incorporated herein by reference.

Item 2.03 Creation of a Direct Financial Obligation

The information set forth above under Item 1.01 is incorporated herein by reference.

Item 3.03 Material Modification to Rights of Security Holders

The Amended Agreement described under Item 1.01 allows the Company to pay dividends or repurchase shares from time to time, so long as at the time of such dividend or repurchase, the Company is not in Default (and no Default or Event of Default would be caused by paying the dividend or repurchasing the shares) and (i) Excess Availability exceeds 17.5% of the revolving credit commitment; or (ii) (A) Excess Availability exceeds 12.5% of the revolving credit commitment, and (B) the Fixed Charge Coverage Ratio (as defined) is greater than or equal to 1.00:1.00 calculated on a pro-forma basis. The Prior Agreement prohibited dividends or share repurchases at any time when Excess Availability fell below 17.5% of the revolving credit commitment or the Company failed to maintain a Fixed Charge Coverage Ratio of at least 1.00 to 1.00 on a pro forma basis. Currently, the Amended Agreement would not prohibit the Company from paying dividends (nor would the Prior Agreement have had that effect). The future payment of dividends is within the discretion of our Board of Directors and will depend, among other factors, on our earnings, capital requirements, and operating and financial condition, as well as Excess Availability and Fixed Charge Coverage Ratio under the Amended Agreement.

Item 9.01 Financial Statements and Exhibits

(d)       The following exhibit is furnished as part of this report:

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EXHIBIT INDEX

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: December 21, 2017

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Exhibit 4.1

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

dated as of December 19, 2017

by and among

LA-Z-BOY INCORPORATED,

ENGLAND, INC.,

LA-Z-BOY CANADA LIMITED,

LA-Z-BOY CASEGOODS, INC., and

LZB MANUFACTURING, INC.,

as the Borrowers,

LA-Z-BOY LOGISTICS, INC.,

LZB RETAIL, INC.,

LZB FURNITURE GALLERIES OF WASHINGTON D.C., INC., and

LZB FINANCE, INC.,

as the Subsidiary Guarantors,

the Lenders referred to herein,

and

WELLS FARGO CAPITAL FINANCE, LLC
as Administrative Agent

WELLS FARGO CAPITAL FINANCE, LLC,

JPMORGAN CHASE BANK, N.A., and

BANK OF AMERICA, N.A. ,
as Joint Lead Arrangers and Joint Bookrunners

JPMORGAN CHASE BANK, N.A.,
as Syndication Agent

BANK OF AMERICA, N.A,
as Documentation Agent

TABLE OF CONTENTS

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TABLE OF CONTENTS

(continued)

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TABLE OF CONTENTS

(continued)

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TABLE OF CONTENTS

(continued)

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TABLE OF CONTENTS

(continued)

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TABLE OF CONTENTS

(continued)

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EXHIBITS

SCHEDULES

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SECOND AMENDED AND RESTATED CREDIT AGREEMENT

SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of December 19, 2017 (this “Agreement”), by and among LA-Z-BOY INCORPORATED, a Michigan corporation (the “Parent”), ENGLAND, INC., a Michigan corporation, LA-Z-BOY CANADA LIMITED, an Ontario corporation, LA-Z-BOY CASEGOODS, INC., a North Carolina corporation, and LZB MANUFACTURING, INC., a Michigan corporation (together with those additional entities that hereafter become parties hereto as subsidiary borrowers pursuant to Section 10.11, each, a “Subsidiary Borrower” and collectively, the “Subsidiary Borrowers”, and, together with the Parent, each, a “Borrower” and, collectively, the “Borrowers”), as the Borrowers, LZB FINANCE, INC., a Michigan corporation, LA-Z-BOY LOGISTICS, INC., a Michigan corporation, LZB RETAIL, INC., a Michigan corporation, and LZB FURNITURE GALLERIES OF WASHINGTON D.C., INC., a Michigan corporation (together with those additional entities that hereafter become parties hereto as subsidiary guarantors pursuant to Section 10.11, each, a “Subsidiary Guarantor” and, collectively, the “Subsidiary Guarantor”), as Subsidiary Guarantors, the lenders who are or may become a party to this Agreement from time to time, as Lenders (the “Lenders”), and WELLS FARGO CAPITAL FINANCE, LLC, as the Administrative Agent for the Lenders (in such capacity, the “Administrative Agent”).

STATEMENT OF PURPOSE

A credit facility was extended to the Borrowers pursuant to the terms and conditions of that certain Amended and Restated Credit Agreement, dated as of October 19, 2011 (as amended, restated, supplemented or otherwise modified from time to time prior to the date hereof, the “Existing Credit Agreement”), by and among the Borrowers, the Persons party thereto from time to time as Guarantors (as defined in the Existing Credit Agreement), the financial institutions party thereto from time to time as Lenders (as defined in the Existing Credit Agreement), and Wells Fargo Capital Finance, LLC (as successor-by-merger to Wachovia Capital Finance Corporation (Central)), as the administrative agent.

In connection with the Existing Credit Agreement, the Borrowers and the Guarantors executed and delivered the Security Documents (as defined in the Existing Credit Agreement) in favor of the Administrative Agent to secure the payment and performance of the Obligations (as defined in the Existing Credit Agreement).

The Borrowers have requested that the Existing Credit Agreement be amended, modified and restated, pursuant to the terms and conditions set forth herein.

Each Credit Party (as defined herein) acknowledges and agrees that the security interests and Liens (as defined in the Existing Credit Agreement) granted to the Administrative Agent pursuant to the Existing Credit Agreement and the other Security Documents (as defined in the Existing Credit Agreement), shall remain outstanding and in full force and effect, without interruption or impairment of any kind, in accordance with the Existing Credit Agreement and shall continue to secure the Obligations (as defined herein), except as such security interest and Liens (as defined in the Existing Credit Agreement) are amended, restated or modified in this Agreement and the related Security Documents (as defined herein).

Each Credit Party acknowledges and agrees that (a) the Obligations (as defined herein) represent, among other things, the amendment, restatement, renewal, extension, consolidation and modification of the Obligations (as defined in the Existing Credit Agreement) arising in connection with the Existing Credit Agreement and the other Loan Documents (as defined in the Existing Credit Agreement) executed in connection therewith; (b) the Borrower Parties intend that the Existing Credit Agreement and the other Loan Documents (as defined in the Existing Credit Agreement) executed in connection therewith and the collateral

pledge thereunder shall secure, without interruption or impairment of any kind, all existing Obligations (as defined in the Existing Credit Agreement) under the Existing Credit Agreement and the other Loan Documents (as defined in the Existing Credit Agreement) executed in connection therewith, as they may be amended, restated, renewed, extended, consolidated and modified hereunder, together with all other obligations hereunder; (c) all Liens (as defined in the Existing Credit Agreement) evidenced by the Loan Documents (as defined in the Existing Credit Agreement) executed in connection therewith are hereby ratified, confirmed and continued, except as such Liens are amended, restated or modified in this Agreement and the related Security Documents (as defined herein); and (d) the Loan Documents (as defined herein) are intended to restate, renew, extend, consolidate, amend and modify the Existing Credit Agreement and the other Loan Documents (as defined in the Existing Credit Agreement) executed in connection therewith.

The Borrower intends that (a) the provisions of the Existing Credit Agreement and the other Loan Documents (as defined in the Existing Credit Agreement) executed in connection therewith, to the extent restated, renewed, extended, consolidated, amended and modified hereby and by the other Loan Documents (as defined herein), be hereby superseded and replaced by the provisions hereof and of the other Loan Documents (as defined herein); and (b) by entering into and performing its obligations hereunder, this contract shall not constitute a novation of the Obligations (as defined in the Existing Credit Agreement) under the Existing Credit Agreement, which remain outstanding or evidence repayment of any of the Obligations.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, such parties hereby agree that the Existing Credit Agreement is hereby amended and restated as follows:

ARTICLE 1.

DEFINITIONS

SECTION 1.1               Definitions.  The following terms when used in this Agreement shall have the meanings assigned to them below:

“AAA” shall have the meaning assigned thereto in Section 15.5(b).

“Account Debtor” means any Person who is obligated to make payments in respect of an Account.

“Accounts” means all “accounts,” as such term is defined in the UCC, of each Credit Party, whether now existing or hereafter created or arising, including (a) all accounts receivable, other receivables, book debts and other forms of obligations (other than forms of obligations evidenced by chattel paper (as defined in the UCC) or instruments (as defined in the UCC)) (including any such obligations that may be characterized as an account or contract right under the UCC), (b) all of each Credit Party’s rights in, to and under all purchase orders or receipts for goods or services, (c) all of each Credit Party’s rights to any goods represented by any of the foregoing (including unpaid sellers’ rights of rescission, replevin, reclamation and stoppage in transit and rights to returned, reclaimed or repossessed goods), (d) all rights to payment due to a Credit Party for property sold, leased, licensed, assigned or otherwise disposed of, for a policy of insurance issued or to be issued, for a secondary obligation incurred or to be incurred, for energy provided or to be provided, for the use or hire of a vessel under a charter or other contract, arising out of the use of a credit card or charge card, or for services rendered or to be rendered by such Credit Party or in connection with any other transaction (whether or not yet earned by performance on the part of such Credit Party), (e) all health care insurance receivables, (f) any instruments with respect to any of the foregoing and (g) all collateral security of any kind, given by any Account Debtor or any other Person with respect to any of the foregoing.

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“ACH Transactions” means any cash management or related services including the automated clearinghouse transfer of funds by the Administrative Agent (or any Affiliate of the Administrative Agent) for the account of the Credit Parties pursuant to agreement or overdrafts.

“Act” shall have the meaning assigned thereto in Section 15.24.

“Administrative Agent” means WFCF in its capacity as Administrative Agent hereunder, and any successor thereto appointed pursuant to Section 14.9.

“Administrative Agent’s Office” means the office of the Administrative Agent specified in or determined in accordance with the provisions of Section 15.1(c).

“Administrative Borrower” shall have the meaning assigned thereto in Section 15.26.

“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

“Affiliate” means, with respect to any Person, any other Person (other than a Subsidiary of any Borrower) which directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such first Person or any of its Subsidiaries.  The term “control” means (a) the power to vote ten percent (10%) or more of the securities or other Equity Interests of a Person having ordinary voting power, or (b) the possession, directly or indirectly, of any other power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.

“Agent Advances” shall have the meaning assigned thereto in Section 2.4(a).

“Agent-Related Persons” means the Administrative Agent, together with its Affiliates, officers, directors, employees, attorneys, and agents.

“Aggregate Commitment” means the aggregate amount of the Lenders’ Commitments hereunder, as such amount may be increased, reduced or otherwise modified at any time or from time to time pursuant to the terms hereof.  On the Closing Date, the Aggregate Commitment shall be One Hundred Fifty Million Dollars ($150,000,000), as such Aggregate Commitments may be increased after the Closing Date as set forth in Section 2.7.

“Aggregate Revolving Credit Obligations” means, as of any particular time, the sum of (a) the aggregate principal amount of all Revolving Credit Loans then outstanding, plus (b) the aggregate principal amount of all Swingline Loans then outstanding, plus (c) the aggregate principal amount of all Agent Advances then outstanding, plus (d) the aggregate amount of all L/C Obligations then outstanding.

“Agreement” means this Amended and Restated Credit Agreement.

“Anti-Corruption Laws” means the United States Foreign Corrupt Practices Act of 1977 (the “FCPA”), the U.K. Bribery Act of 2010, and the Corruption of Foreign Public Officials Act (Canada), as amended, and all other applicable laws and regulations or ordinances concerning or relating to bribery, money laundering or corruption in any jurisdiction in which any Credit Party or any of its Subsidiaries or Affiliates is located or is doing business.

“Anti-Money Laundering Laws” means the applicable laws or regulations in any jurisdiction in which any Credit Party or any of its Subsidiaries or Affiliates is located or is doing business that relates to

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money laundering, any predicate crime to money laundering, or any financial record keeping and reporting requirements related thereto.

“Applicable Law” means all applicable provisions of constitutions, laws, statutes, ordinances, rules, treaties, regulations, permits, licenses, approvals, interpretations and orders of courts or Governmental Authorities and all orders and decrees of all courts and arbitrators.

“Applicable Margin” shall have the meaning assigned thereto in Section 6.1(c).

“Application” means an application, in the form specified by the Issuing Lender from time to time, requesting the Issuing Lender to issue a Letter of Credit.

“Approved Fund” means any Person (other than a natural Person), including 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 such Approved Fund must be administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

“Arbitration Rules” shall have the meaning assigned thereto in Section 15.5(b).

“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 15.9), and accepted by the Administrative Agent, in substantially the form of Exhibit F or any other form approved by the Administrative Agent.

“Average Excess Availability” means, as of any date of determination, the average of the sum of daily Excess Availability on each day of the month most recently ended, divided by the number of days in such month.

“Avoidance Provisions” shall have the meaning assigned thereto in Section 4.1(c)(iii).

“Bank Product Provider” means WFCF, any Affiliate thereof and any Lender or Affiliate thereof approved by the Administrative Agent.

“Bank Product Reserves” means (a) one hundred percent (100%) of the aggregate mark-to-market exposure then owing by any Credit Party under each Lender Hedging Agreement, determined by the Lender (or its Affiliate) that is counterparty to such Lender Hedging Agreement, based on termination value, using a mutually satisfactory method, and furnished to the Administrative Agent on a monthly basis (or more frequently, in the reasonable discretion of the Administrative Agent), and (b) all reserves that the Administrative Agent, from time to time, establishes in its reasonable discretion for the other Bank Products then provided or outstanding.

“Bank Products” means any one or more of the following types of services or facilities extended to any of the Credit Parties by a Bank Product Provider:  (a) credit, debit or payment cards (including cardless e-payable services); (b) ACH Transactions; (c) cash management, including overdraft and controlled disbursement services; and (d) Lender Hedging Agreements.

“Bank Products Documents” means all agreements entered into from time to time by the Credit Parties in connection with any of the Bank Products and shall include the Lender Hedging Agreements.

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“Bankruptcy Code” means (a) the United States Bankruptcy Code (11 U.S.C. Section 101 et seq.), (b) the Bankruptcy and Insolvency Act (Canada), (c) the Companies’ Creditors Arrangement Act (Canada) or (d) any similar legislation (including any applicable corporations legislation to the extent the relief sought under such corporations legislation relates to or involves the compromise, settlement, adjustment or arrangement of debt) in any other relevant jurisdiction, in each case, as now or hereafter amended, and any successor statute or legislation.

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

“Bail-In Legislation” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

“Base Rate” means, at any time, the greatest of (a) the Federal Funds Rate plus ½%, (b) the LIBOR Rate (which rate shall be calculated based upon an Interest Period of one month and shall be determined on a daily basis), plus one percentage point, and (c) the rate of interest announced, from time to time, within Wells Fargo Bank at its principal office in San Francisco as its “prime rate”, with the understanding that the “prime rate” is one of Wells Fargo’s base rates (not necessarily the lowest of such rates) and serves as the basis upon which effective rates of interest are calculated for those loans making reference thereto and is evidenced by the recording thereof after its announcement in such internal publications as Wells Fargo may designate (and, if any such announced rate is below zero, then the rate determined pursuant to this clause (c) shall be deemed to be zero).

“Base Rate Loan” means any Loan bearing interest based on the Base Rate.

“Blocked Account” shall have the meaning assigned thereto in Section 10.13(a).

“Blocked Account Agreement” means any agreement executed by a depository bank or securities intermediary and the Administrative Agent, for the benefit of the Secured Parties, and acknowledged and agreed to by the applicable Credit Party, in form and substance acceptable to the Administrative Agent in its discretion.

“Borrowers” shall have the meaning assigned thereto in the Preamble to this Agreement.

“Borrowing Base” means, at any particular time, the sum of:

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

(b)           the lesser of (i) up to sixty-five percent (65%) of the value of Eligible Inventory consisting of finished goods, valued at the lower of cost (on a FIFO (or first in, first out) basis) or market value and (ii) up to eighty-five percent (85%) of the Net OLV of Eligible Inventory consisting of finished goods; plus

(c)           the lesser of (i) up to thirty-five percent (35%) of the value of Eligible Inventory consisting of raw materials, valued at the lower of cost (on a FIFO (or first in, first out) basis) or market value (and in no event including any intercompany profit thereon) and (ii) up to eighty-five percent (85%) of the Net OLV of Eligible Inventory consisting of raw materials; plus

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(d)           up to twenty percent (20%) of the face amount of any Commercial Letter of Credit issued in respect of the purchase of raw materials constituting Eligible L/C Inventory; plus

(e)           up to fifty percent (50%) of the face amount of any Commercial Letter of Credit issued in respect of the purchase of finished goods constituting Eligible L/C Inventory; minus

(f)            the Reserves.

“Borrowing Base Certificate” means a certificate of a Responsible Officer substantially in the form of Exhibit G.

“Business Day” means (a) for all purposes other than as set forth in clause (b) below, any day other than a Saturday, Sunday or legal holiday on which banks in Charlotte, North Carolina and New York, New York, are open for the conduct of their commercial banking business, and (b) with respect to all notices and determinations in connection with, and payments of principal and interest on, any LIBOR Rate Loan, any day that is a Business Day described in clause (a) above and that is also a day for trading by and between banks in Dollar deposits in the London interbank market.

“Calculation Date” shall have the meaning assigned thereto in Section 6.1(c).

“Canadian Borrower” means La-Z-Boy Canada Limited, an Ontario corporation.

“Canadian Employer Benefits Legislation” means the Canadian Pension Plan Act (Canada), the Pension Benefits Standards Act (Canada), the Pension Benefits Act (Ontario), the Health Insurance Act (Ontario), the Employment Standards Act (Ontario) and any federal (Canada), provincial or local counterparts or equivalents, in each case, as applicable and as amended or modified from time to time.

“Canadian Obligations” means (a) the Loans received, directly or indirectly, by the Canadian Borrower, (b) the L/C Obligations outstanding in respect of Letters of Credit issued for the benefit of the Canadian Borrower, (c) all Hedging Obligations owing by the Canadian Borrower under any Lender Hedging Agreement, (d) all existing or future payments and other obligations owing by the Canadian Borrower under any other Bank Products Document and (e) all other fees and commissions (including attorneys’ fees), charges, indebtedness, loans, liabilities, financial accommodations, obligations, covenants and duties owing by the Canadian Borrower or any of its Subsidiaries to the Administrative Agent or any other member of the Lender Group, in each case under or in respect of this Agreement, any Note, any Letter of Credit or any of the other Loan Documents of every kind, nature and description, direct or indirect, absolute or contingent, due or to become due, contractual or tortious, liquidated or unliquidated, and whether or not evidenced by any note.

“Canadian Pension Plan” means any pension plan required to be registered under the Income Tax Act (Canada) or any Canadian federal or provincial law and/or contributed to by the Canadian Borrower for its employees or former employees, including, without limitation, any pension benefit plan within the meaning of the Pension Benefits Act (Ontario), but does not include the Canada Pension Plan maintained by the Government of Canada or the Quebec Pension Plan maintained by the Province of Quebec.

“Canadian Pledge Agreement” means that certain Pledge Agreement dated as of February 6, 2008 executed by the Parent in favor of the Administrative Agent, for the benefit of the Secured Parties.

“Canadian Security Agreement” means that certain Amended and Restated Security Agreement dated as of October 19, 2011, executed by the Canadian Borrower and any other Credit Party organized under the laws of Canada or any province or territory thereof in favor of the Administrative Agent, for the benefit of the Secured Parties.

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“Capital Asset” means, with respect to the Parent and its Subsidiaries, any asset that should, in accordance with GAAP, be classified and accounted for as a capital asset on a Consolidated balance sheet of the Parent and its Subsidiaries.

“Capital Expenditures” means with respect to the Parent and its Subsidiaries (other than any VIE) for any period, the aggregate cost of all Capital Assets acquired by the Parent and its Subsidiaries during such period, as determined in accordance with GAAP.

“Capital Lease” means any lease of any property by Parent or any of its Subsidiaries (other than any VIE), as lessee, that should, in accordance with GAAP, be classified and accounted for as a capital lease on a Consolidated balance sheet (but excluding any VIE) of the Parent and its Subsidiaries; provided, that, notwithstanding anything in this Agreement to the contrary, GAAP for purposes of classifying and accounting for such Capital Leases as provided herein, shall mean GAAP as it exists on the Closing Date.

“Cash and Investment Securities” shall mean cash plus the total of the amount invested in securities described in Section 12.3(e), other than those amounts invested to fund Pension Plans or Employee Benefit Plans.

“Cash Sweep Period” means the period of time from and after any Cash Sweep Trigger Date and continuing through the date five (5) Business Days following the occurrence of any Cash Sweep Termination Date.

“Cash Sweep Termination Date” means any date on which (a) if the Cash Sweep Period occurred as a result of an event described in clause (a) of the definition of Cash Sweep Trigger Date, such Event of Default has been waived in accordance with the terms of this Agreement and no other Event of Default shall have occurred and be continuing, or (b) if the Cash Sweep Period occurred as a result of an event described in clause (b) of the definition of Cash Sweep Trigger Date, Excess Availability has been greater than ten percent (10%) of the Revolving Credit Commitment, for each day of any forty-five (45) consecutive day period after the relevant Cash Sweep Trigger Date; provided, however, except as the Administrative Agent and the Required Lenders may otherwise hereafter agree in writing, a Cash Sweep Period may no longer be terminated following the second termination of any Cash Sweep Period in any twelve (12) consecutive month period or the sixth termination of any Cash Sweep Period during the term of this Agreement, and such Cash Sweep Period shall continue until the payment in full of the Obligations (other than contingent Obligations as to which the Administrative Agent shall have received cash collateral pursuant to the terms of Section 2.6 or 13.2, as applicable, or otherwise acceptable to the Administrative Agent) and the termination of the Commitments.

“Cash Sweep Trigger Date” means any date (a) on which an Event of Default occurs or (b) on which Excess Availability falls below ten percent (10%) of the Revolving Credit Commitment, for more than three (3) consecutive Business Days.

“CFC” means a controlled foreign corporation (as that term is defined in the Code).

“Change of Control” means (a) any Person or two or more Persons acting in concert shall have acquired “beneficial ownership,” directly or indirectly, of, or shall have acquired by contract or otherwise, or shall have entered into a contract or arrangement that, upon consummation, will result in its or their acquisition of, or control over, voting Equity Interests of the Parent (or other securities convertible into such voting Equity Interests) representing thirty-five percent (35%) or more of the combined voting power of all voting Equity Interests of the Parent, (b) [reserved], or (c) except as otherwise permitted herein, the Parent shall cease to own, free and clear of all Liens or other encumbrances (other than the Liens of the

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Administrative Agent), directly or indirectly, one hundred percent (100%) of the outstanding voting Equity Interests of its Subsidiaries that are Credit Parties on a fully diluted basis.  As used herein, “beneficial ownership” shall have the meaning provided in Rule 13d-3 of the Securities and Exchange Commission under the Securities Act of 1934.

“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; provided, that for purposes of this Agreement, the Dodd-Frank Wall Street Reform and Consumer Protection Act (including regulations promulgated with respect thereto), and all requests, guidelines or directives in connection therewith are deemed to have gone into effect and been adopted after the date of this Agreement and all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States regulatory authorities, in each case pursuant to Basel III, shall each be deemed to be a “Change in Law”, regardless of the date enacted, adopted, issued or implemented.

“Clearing Account” means account no. 2000062858984 (or such other account number established by the Administrative Agent for purposes of Section 10.13) maintained by the Administrative Agent at Wells Fargo Bank, in San Francisco, California pursuant to Section 10.13, and over which the Administrative Agent has the sole dominion and exclusive access and control for withdrawal purposes pursuant to Section 10.13.

“Closing Date” means the date of this Agreement or such later Business Day upon which each condition described in Section 7.1 shall be satisfied or waived in a manner in accordance with this Agreement.

“Coahuila Facility” means the manufacturing facility used by LZB Manufacturing Inc. and located at Area Industrial Amistad Aeropuerto in Ramos Arizpe, State of Coahuila, Mexico, or a substantially similar facility located in Mexico.

“Code” means the Internal Revenue Code of 1986, and the rules and regulations thereunder, each as amended or modified from time to time.

“Collateral” means the collateral security for the Obligations pledged or granted pursuant to the Security Documents.

“Collateral Access Agreement” means any agreement of any lessor, warehouseman, processor, customs broker, freight forwarder, consignee or other Person in possession of, having a Lien upon or having rights or interests in any of the Collateral in favor of the Administrative Agent, for the benefit of the Secured Parties, in form and substance satisfactory to the Administrative Agent, pursuant to which such Person, among other things, waives or subordinates its Liens or certain other rights or interests such Person may hold in regard to the property of any of the Credit Parties and agrees to provide the Administrative Agent access to the Collateral.

“Collateral Enforcement Actions” shall have the meaning assigned thereto in Section 13.5.

“Commercial Letter of Credit” means a documentary Letter of Credit issued by the Issuing Lender in respect of the purchase of goods or services by a Borrower or its Subsidiaries in the ordinary course of its business.

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“Commitment” means, as to any Lender, the obligation of such Lender to make or participate in Loans to and issue or participate in Letters of Credit hereunder in an aggregate principal or face amount at any time outstanding not to exceed the amount set forth opposite such Lender’s name in the Register, as the same may be increased, reduced or otherwise modified at any time or from time to time pursuant to the terms hereof or by the execution and delivery of an Assignment and Assumption pursuant to the terms hereof.

“Commitment Increase” shall have the meaning assigned thereto in Section 2.7(a)(i).

“Commitment Increase Cap” shall have the meaning assigned thereto in Section 2.7(a)(i).

“Commitment Percentage” means, as to any Lender at any time, the ratio of (a) the amount of the Commitment of such Lender to (b) the Aggregate Commitment.

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.

“Consolidated” means, when used with reference to financial statements or financial statement items of the Parent and its Subsidiaries, such statements or items on a consolidated basis in accordance with applicable principles of consolidation under GAAP.

“Contributing Borrower” shall have the meaning assigned thereto in Section 4.1(f).

“Covenant Period” means a period that (a) begins on the first day the Excess Availability is less than ten percent (10.00%) of the Revolving Credit Commitment (the “Covenant Trigger Amount”), and (b) ends on the first date thereafter on which Excess Availability has exceeded the Covenant Trigger Amount for each day of any ninety (90) consecutive day period.

“Credit Facility” means, collectively, the Revolving Credit Facility, the L/C Facility and the Swingline Facility.

“Credit Parties” means, collectively, the Borrowers and the Subsidiary Guarantors.

“Customer Dispute” means all instances in which (a) a customer of a Borrower has rejected or returned goods sold by such Borrower to such customer and such return or rejection has not been accepted by such Borrower as a valid return or rejection, or (b) a customer of a Borrower has otherwise affirmatively asserted grounds for nonpayment of an Account, including any repossession of goods by such Borrower, or any claim by an Account Debtor of total or partial failure of delivery, set-off, counterclaim, or breach of warranty.

“Debt” means, with respect to the Parent and its Subsidiaries (other than any VIE) at any date and without duplication,  (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, or upon which interest payments are customarily made, (c) all obligations of such Person under conditional sale or other title retention agreements relating to property purchased by such Person (other than customary reservations or retentions of title under agreements with vendors and suppliers entered into in the ordinary course of business), (d) all obligations of such Person issued or assumed as the deferred purchase price of property or services purchased by such Person (other than trade debt incurred in the ordinary course of business and not more than sixty (60) days past due) which would appear as liabilities on a balance sheet of such Person, (e) all obligations of such Person under take-or-pay or similar arrangements or under commodities agreements, (f) all Debt of others secured by (or for which the holder of such Debt has an existing right, contingent or

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otherwise, to be secured by) any Lien on, or payable out of the proceeds of production from, property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed, (g) all guaranties of such Person with respect to Debt of others of the type referred in this definition of another Person, (h) the principal portion of all obligations of such Person under Capital Leases, (i) all obligations of such Person under Hedging Agreements, (j) the maximum amount of all letters of credit issued or bankers’ acceptances facilities created for the account of such Person and, without duplication, all drafts drawn thereunder (to the extent unreimbursed), (k) all preferred Equity Interests issued by such Person and required by the terms thereof to be redeemed, or for which mandatory sinking fund payments are due, by a fixed date, (l) the principal component of payments due under any synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing product, other than operating leases that do not constitute any of the foregoing, during the applicable period ending on such date, determined on a Consolidated basis in accordance with GAAP, and (m) the Debt of any partnership or unincorporated joint venture in which such Person is a general partner or a joint venturer.

“Default” means any of the events specified in Section 13.1 which, with the passage of time, the giving of notice or any other condition, would constitute an Event of Default.

“Defaulting Lender” means any Lender that (a) has failed to fund any portion of the Revolving Credit Loans, participations in L/C Obligations or participations in Swingline Loans required to be funded by it hereunder within one (1) Business Day of the date on which the same was 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 been deemed insolvent or become the subject of a bankruptcy or insolvency proceeding, or (d) is the subject of any Bail-In Action.

“Defined Benefit Plan” means any Canadian Pension Plan which contains a “defined benefit provision”, as defined in subsection 147.1(1) of the Income Tax Act (Canada).

“Dilution” means, as of any date of determination, a percentage, based upon the experience of the immediately prior period, that is the result of dividing the Dollar amount of (a) bad debt write-downs, discounts, advertising allowances, credits, or other dilutive items with respect to the Accounts of the Borrowers during such period, by (b) the billings of the Borrowers with respect to Accounts during such period.

“Dilution Reserve” means, as of any date of determination, an amount sufficient to reduce the advance rate against Eligible Accounts by one (1) percentage point for each percentage point by which Dilution is in excess of five percent (5%).

“Disputes” shall have the meaning set forth in Section 15.5(b).

“Dollars” or “$” means, unless otherwise qualified, dollars in lawful currency of the United States.

“Domestic Subsidiary” means any Subsidiary of a Credit Party that is organized and existing under the laws of the United States or any state or commonwealth thereof or under the laws of the District of Columbia.

“Drawing Document” means any Letter of Credit or other document presented for purposes of drawing under any Letter of Credit.

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“EBITDA” means, for any period, the sum of the following determined on a Consolidated basis (but excluding any VIE), without duplication, for the Parent and its Subsidiaries (other than any VIE) in accordance with GAAP:  (a) Net Income for such period plus (b) the sum of the following to the extent deducted in determining Net Income for such period: (i) Interest Expense, (ii) Tax Expense, and (iii) amortization and depreciation less (c) interest income and any extraordinary gains; provided, however, that if any such calculation includes any period in which an acquisition or sale of a Person or all or substantially all of the assets of a Person occurred, then such calculation shall be made on a pro forma basis.

“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

“EEA Resolution Authority” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

“Eligible Accounts” means, at any particular date, all Accounts of the Borrowers that the Administrative Agent, in the exercise of its Permitted Discretion, determines to be Eligible Accounts; provided, however, that, without limiting the right of the Administrative Agent to establish other criteria of ineligibility, Eligible Accounts shall not include any of the following Accounts:

(a)                                 Accounts with respect to which more than sixty (60) days have elapsed since the due date of the original invoice therefor or more than one hundred twenty (120) days have elapsed since the date of the original invoice therefor; provided, however, that up to $5,000,000 of Accounts owed by Account Debtors with payment terms permitting payment more than one hundred (100) days after the date of the original invoice therefor may be included as eligible pursuant to this clause (a) so long as no more than sixty (60) days have elapsed since the due date of the original invoice therefor and no more than one hundred thirty (130) days have elapsed since the date of the original invoice therefor;

(b)                                 Accounts that do not conform to all of the warranties and representations regarding the same which are set forth in this Agreement or any of the other Loan Documents;

(c)                                  Accounts (or any other Account due from the same Account Debtor) with respect to which, in whole or in part, a check, promissory note, draft, trade acceptance or other instrument for the payment of money has been received, presented for payment and returned uncollected for any reason;

(d)                                 Accounts as to which any Borrower has not performed, as of the applicable date of calculation, all of its obligations then required to have been performed, including the delivery of merchandise or rendition of services applicable to such Accounts;

(e)                                  Accounts as to which any one or more of the following events has occurred with respect to the Account Debtor on such Accounts:  death or judicial declaration of incompetency of such Account Debtor who is an individual; the filing by or against such Account Debtor of a request or petition for liquidation, reorganization, arrangement, adjustment of debts, adjudication as a bankrupt, winding-up, or

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other relief under the bankruptcy, insolvency, or similar laws (including, without limitation, any applicable corporations legislation to the extent the relief sought under such corporations legislation relates to or involves the compromise, settlement, adjustment or arrangement of debt) of the United States or Canada, any state, territory or province thereof, or any foreign jurisdiction, now or hereafter in effect; the making of any general assignment by such Account Debtor for the benefit of creditors; the appointment of a receiver or trustee for such Account Debtor or for any of the assets of such Account Debtor, including the appointment of or taking possession by a “custodian,” as defined in Bankruptcy Code; the institution by or against such Account Debtor of any other type of insolvency proceeding (under the bankruptcy laws of the United States, Canada or otherwise) or of any formal or informal proceeding for the dissolution or liquidation of, settlement of claims against, or winding up of affairs of, such Account Debtor; the sale, assignment, or transfer of all or substantially all of the assets of such Account Debtor unless the obligations of such Account Debtor in respect of the Accounts are assumed by and assigned to such purchaser or transferee; the nonpayment generally by such Account Debtor of its debts as they become due; or the cessation of the business of such Account Debtor as a going concern;

(f)                                   (i) those Accounts of an Account Debtor for whom fifty percent (50%) or more of the aggregate Dollar amount of such Account Debtor’s outstanding Accounts are classified as ineligible under the criteria (other than this clause (f)) set forth herein; or (ii) those Accounts with respect to which the aggregate Dollar amount of all Accounts owed by the Account Debtor thereon exceeds ten percent (10%), or such higher percentage to which the Administrative Agent agrees, in its Permitted Discretion, of the aggregate amount of all Accounts at such time to the extent of such excess;

(g)                                  Accounts owed by an Account Debtor which: (i) does not maintain its chief executive office in the United States or, with respect to Accounts owed by an Account Debtor to the Canadian Borrower, Canada; or (ii) is not organized under the laws of the United States or any state or territory thereof or, with respect to Accounts owed by an Account Debtor to the Canadian Borrower, is not organized under the laws of Canada or any province or territory thereof; or (iii) is the government of any foreign country or sovereign state, or of any state, province, territory, municipality, or other political subdivision thereof, or of any department, agency, public corporation, or other instrumentality thereof; except to the extent that such Accounts are secured or payable by a letter of credit or acceptance, or insured under foreign credit insurance in each case, on terms and conditions satisfactory to the Administrative Agent in its sole discretion;

(h)                                 Accounts owed by (i) an Account Debtor which is an Affiliate or employee of any Credit Party or (ii) a VIE;

(i)                                     Accounts owed by an Account Debtor that the Administrative Agent does not deem to be creditworthy in any material respect in its Permitted Discretion;

(j)                                    Accounts owed by an Account Debtor that is indebted to any Borrower in any way pursuant to a promissory note or other instrument, other than any promissory notes or instruments in an aggregate amount not to exceed $2,500,000 at any time outstanding, provided that no such note or instrument was issued in respect of a trade receivable and the Account Debtor obligated under such note or instrument is current as to all payments due under such note or instrument;

(k)                                 Accounts which are subject to any right of setoff by the Account Debtor, unless the Account Debtor has entered into an agreement acceptable to the Administrative Agent to waive setoff rights, except, if such right of setoff is exercised in the ordinary course of the business of the Borrowers, to the extent of such right of setoff;

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(l)                                     Accounts which are subject to any Customer Dispute, but only to the extent of the amount in dispute;

(m)                             Accounts which are owed by the government of the United States or, with respect to the Canadian Borrower, Canada, or any department, agency, public corporation, or other instrumentality thereof, unless all required procedures for the effective collateral assignment of the Accounts under the Federal Assignment of Claims Act of 1940 (or similar Canadian law, as applicable) and any other steps necessary to perfect the Administrative Agent’s security interest, for the benefit of the Secured Parties, in such Accounts have been complied with to the Administrative Agent’s satisfaction with respect to such Accounts;

(n)                                 Accounts which are owed by any state, municipality, territory, province or other political subdivision of the United States or, with respect to the Canadian Borrower, Canada, or any department, agency, public corporation, or other instrumentality thereof and as to which the Administrative Agent determines in its Permitted  Discretion that its security interest therein is not or cannot be perfected;

(o)                                 Accounts which represent sales on a bill-and-hold, guaranteed sale, sale and return, sale on approval, consignment or other repurchase or return basis;

(p)                                 Accounts which are evidenced by a promissory note or other instrument or by chattel paper;

(q)                                 Accounts with respect to which the Account Debtor is located in a state, province or other jurisdiction that requires, as a condition to access to the courts of such jurisdiction, that a creditor qualify to transact business, file a business activities report or form, or take one or more other actions, unless the applicable Borrower has so qualified, filed such report or forms, or taken such actions (and, in each case, paid any required fees or other charges), except to the extent that such Borrower may qualify subsequently as a foreign entity authorized to transact business in such state, province or other jurisdiction and gain access to such courts, without incurring any cost or penalty viewed by the Administrative Agent to be significant in amount, and such later qualification cures any access to such courts to enforce payment of such Account;

(r)                                    Accounts as to which the applicable Account Debtor has not been sent an invoice;

(s)                                   Accounts which are not a bona fide, valid and, to the best of any Borrower’s knowledge, enforceable obligation of the Account Debtor thereunder;

(t)                                    Accounts which are owed by an Account Debtor with whom any Borrower has any agreement or understanding for deductions from the Accounts, except for discounts or allowances which are made in the ordinary course of business for prompt payment or volume purchases and which discounts or allowances are reflected in the calculation of the face value of each invoice related to such Accounts, or Accounts with respect to which a debit or chargeback has been issued or generated;

(u)                                 Accounts which are not subject to a valid and continuing first priority Lien in favor of the Administrative Agent, for the benefit of the Secured Parties, pursuant to the Security Documents as to which all action necessary or desirable to perfect such security interest shall have been taken, and to which any Borrower has good and marketable title, free and clear of any Liens (other than Liens in favor of the Administrative Agent, for the benefit of the Secured Parties); or

(v)                                 Accounts as to which a security agreement, financing statement, equivalent security or Lien instrument or continuation statement is on file or of record in any public office, except as may have

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been filed in favor of the Administrative Agent, for the benefit of the Secured Parties, pursuant to the Security Documents.

“Eligible Assignee” means (a) a Lender, (b) an Affiliate of a Lender, (c) an Approved Fund, and (d) any other Person (other than a natural person) approved by (i) the Administrative Agent, (ii) the Swingline Lender and the Issuing Lender, and (iii) unless a Default or Event of Default has occurred and is continuing, the Administrative Borrower (each such approval not to be unreasonably withheld or delayed); provided that notwithstanding the foregoing, “Eligible Assignee” shall not include the Parent or any of the Parent’s Affiliates or Subsidiaries.

“Eligible In Transit Inventory” means Inventory that would otherwise be Eligible Inventory (other than for its location) as to which:

(a)                                 such Inventory has been paid for in full in cash;

(b)                                 such Inventory is then in transit (whether by vessel, air or land) from a location outside of the continental United States to any location (i) that is the subject of an Collateral Access Agreement relating to such Inventory or (ii) for which the Administrative Agent has established appropriate Reserves;

(c)                                  the title of such Inventory has passed to, and such Inventory is owned by, a Borrower and for which the Administrative Agent shall have received such evidence thereof as the Administrative Agent may require in its Permitted Discretion;

(d)                                 the Administrative Agent has received each of the following: (i) a copy of the certificate of marine cargo insurance in connection therewith in which the Administrative Agent has been named as an additional insured and loss payee in a manner acceptable to the Administrative Agent in its Permitted Discretion; and (ii) a copy of the invoice, packing slip and manifest with respect thereto;

(e)                                  such Inventory is either (i) subject to a negotiable bill of lading (A) that is consigned to the Administrative Agent, (B) that was issued by the carrier in respect of such Inventory and (C) is in the possession of the customs broker, freight forwarder or other third party handling the shipping and delivery of such Inventory acting on behalf of the Administrative Agent or (ii) subject to a negotiable cargo receipt and is not the subject of a bill of lading (other than a negotiable bill of lading consigned to, and in the possession of a consolidator or the Administrative Agent, or their respective agents) and such negotiable cargo receipt is (A) consigned to the Administrative Agent, (B) issued by a consolidator in respect of such Inventory and (C) either in the possession of the Administrative Agent or the customs broker, freight forwarder or other third party handling the shipping and delivery of such Inventory acting on behalf of the Administrative Agent;

(f)                                   such Inventory is insured against types of loss, damage, hazards, and risks, and in amounts, satisfactory to the Administrative Agent;

(g)                                  the Administrative Agent has received an executed Collateral Access Agreement with respect to such Inventory; and

(h)                                 such Inventory shall not have been in transit for more than ninety (90) days.

“Eligible Inventory” means, as of any particular date, the portion of the Inventory of the Borrowers that the Administrative Agent, in the exercise of its Permitted Discretion, determines to be

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Eligible Inventory; provided, however, that without limiting the right of the Administrative Agent to establish other criteria of ineligibility, Eligible Inventory shall not include any of the following Inventory:

(a)                                 Inventory that is not owned solely by any Borrower;

(b)                                 Inventory that does not conform to all of the warranties and representations regarding the same which are set forth in this Agreement or any of the other Loan Documents;

(c)                                  Inventory that is not located in the continental United States or, with respect to Inventory of the Canadian Borrower, Canada (other than the Province of Quebec), either (i) on real property owned by any Borrower or any Subsidiary Guarantor, or (ii) on leased premises (A) in regard to which the landlord thereof, or any bailee, warehouseman or similar party that will be in possession of such Inventory, shall have executed and delivered to the Administrative Agent a Collateral Access Agreement or (B) for which the Administrative Agent has established appropriate Reserves;

(d)                                 Inventory that is subject to any claim of reclamation, Lien, adverse claim, interest or right of any other Person, subject only to normal and customary warehouseman, filler, packer, or processor charges payable to a Person who is party to an Collateral Access Agreement relating to such Inventory;

(e)                                  Inventory to which no Borrower has good, valid, and marketable title;

(f)                                   Inventory that constitutes goods returned or rejected by a Borrower’s customer for which a credit has not yet been issued;

(g)                                  Inventory that is damaged;

(h)                                 Inventory that has been determined by the Administrative Agent, in its Permitted Discretion, to be a “no charge” or sample item;

(i)                                     Inventory that is held by a Borrower pursuant to consignment, sale or return, sale on approval or any similar arrangement;

(j)                                    Inventory that is not in good condition or does not meet all standards imposed by any Person having regulatory authority over such goods or their use or sale, or Inventory that is not currently saleable in the ordinary course of any Borrower’s business;

(k)                                 Inventory that consists of work-in-process or spare parts;

(l)                                     Inventory constituting shrink reserve;

(m)                             Inventory owned by a VIE;

(n)                                 Inventory scheduled for return to vendors, Inventory which is obsolete or slow-moving (for purposes of this clause (n), what constitutes “obsolete or slow-moving” Inventory shall be determined by the Administrative Agent in its Permitted Discretion), display items, packaging materials, labels or name plates or similar supplies;

(o)                                 Inventory that is not personal property in which any Borrower has granted a valid and continuing first Lien in favor of the Administrative Agent, for the benefit of the Secured Parties, pursuant to the Security Documents, or as to which all action necessary to perfect such security interest has not been taken;

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(p)                                 Inventory that constitutes goods in transit from a location outside of the United States to any location (i) that is the subject of an Collateral Access Agreement relating to such Inventory or (ii) for which the Administrative Agent has established appropriate Reserves; provided, however, that up to $12,500,000 of Inventory so in transit from vendors and suppliers may be included as eligible pursuant to this clause (p) so long as such Inventory is Eligible In Transit Inventory; or

(q)                                 Inventory that is covered, in whole or in part, by any security agreement, financing statement, equivalent security or Lien instrument or continuation statement which is on file or of record in any public office, except such as may have been filed in favor of the Administrative Agent, for the benefit of the Secured Parties, pursuant to the Security Documents.

“Eligible L/C Inventory” means Inventory that would otherwise be Eligible Inventory (other than for its location) as to which:

(a)                                 such Inventory is purchased with and subject to a Commercial Letter of Credit;

(b)                                 such Inventory is then in transit (whether by vessel, air or land) from a location outside of the continental United States to any location (i) that is the subject of an Collateral Access Agreement relating to such Inventory or (ii) for which the Administrative Agent has established appropriate Reserves;

(c)                                  the title of such Inventory has passed to, and such Inventory is owned by, a Borrower and for which the Administrative Agent shall have received such evidence thereof as the Administrative Agent may require in its Permitted Discretion;

(d)                                 the Administrative Agent has received each of the following: (i) a copy of the certificate of marine cargo insurance in connection therewith in which the Administrative Agent has been named as an additional insured and loss payee in a manner acceptable to the Administrative Agent in its Permitted Discretion; and (ii) a copy of the invoice, packing slip and manifest with respect thereto;

(e)                                  such Inventory is either (i) subject to a negotiable bill of lading (A) that is consigned to the Issuing Lender (unless and until such time as the Administrative Agent shall require that the same be consigned to the Administrative Agent, then thereafter, that is consigned to the Administrative Agent either directly or by means of endorsements), (B) that was issued by the carrier in respect of such Inventory and (C) is either in the possession of the customs broker, freight forwarder or other third party handling the shipping and delivery of such Inventory acting on behalf of the Administrative Agent or the subject of a telefacsimile or other electronic copy that the Administrative Agent has received from the Issuing Lender with respect to the Letter of Credit and as to which the Administrative Agent has also received confirmation from the Issuing Lender that such document is in transit to the Administrative Agent or the customs broker, freight forwarder or other third party handling the shipping and delivery of such Inventory acting on behalf of the Administrative Agent or (ii) subject to a negotiable cargo receipt and is not the subject of a bill of lading (other than a negotiable bill of lading consigned to, and in the possession of a consolidator or the Administrative Agent, or their respective agents) and such negotiable cargo receipt is (A) consigned to the Issuing Lender (unless and until such time as the Administrative Agent shall require that the same be consigned to the Administrative Agent, then thereafter, that is consigned to the Administrative Agent either directly or by means of endorsements), (B) issued by a consolidator in respect of such Inventory and (C) either in the possession of the Administrative Agent or the customs broker, freight forwarder or other third party handling the shipping and delivery of such Inventory acting on behalf of the Administrative Agent or the subject of a telefacsimile or other electronic copy that the Administrative Agent has received from the Issuing Lender with respect to the Letter of Credit and as to which the Administrative Agent has also received a confirmation from the Issuing Lender

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that such document is in transit to the Administrative Agent or the customs broker, freight forwarder or other third party handling the shipping and delivery of such Inventory;

(f)                                   such Inventory is insured against types of loss, damage, hazards, and risks, and in amounts, satisfactory to the Administrative Agent;

(g)                                  the Administrative Agent has received an executed Collateral Access Agreement with respect to such Inventory; and

(h)                                 such Inventory shall not have been in transit for more than ninety (90) days.

“Employee Benefit Plan” means any employee benefit plan within the meaning of Section 3(3) of ERISA  (a) that is maintained for employees of any Borrower or any ERISA Affiliate, (b) that has at any time within the preceding six (6) years been maintained for the employees of any Borrower or any current or former ERISA Affiliate, (c) to which any Borrower or any ERISA Affiliate makes contributions or is required to make contributions, (d) to which any Borrower or any ERISA Affiliate has made or has been required to make contributions at any time within the preceding six (6) years or (e) to which any Borrower or any ERISA Affiliate has, or has had at any time within the preceding six (6) years, any liability, contingent or otherwise.

“Environmental Claims” means any and all administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, accusations, allegations, notices of noncompliance or violation, investigations (other than internal reports prepared by any Person in the ordinary course of business and not in response to any third party action or request of any kind) or proceedings relating in any way to any actual or alleged violation of or liability under any Environmental Law or relating to any permit issued, or any approval given, under any such Environmental Law, including any and all claims by Governmental Authorities for enforcement, cleanup, removal, response, remedial or other actions or by any third party for damages, contribution, indemnification cost recovery, compensation or injunctive relief resulting from Hazardous Materials or arising from alleged injury or threat of injury to human health or the environment.

“Environmental Laws” means any and all federal (United States or Canada), foreign, state, provincial and local laws, statutes, ordinances, codes, rules, standards and regulations, permits, licenses, approvals, interpretations, decrees, agreements and orders of courts or Governmental Authorities, relating to the protection of human health or the environment, including requirements pertaining to the manufacture, processing, distribution, use, treatment, storage, disposal, transportation, handling, reporting, licensing, permitting, investigation or remediation of Hazardous Materials.

“Equity Interests” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such equity interest.

“ERISA” means the Employee Retirement Income Security Act of 1974, and the rules and regulations thereunder, each as amended or modified from time to time.

“ERISA Affiliate” means any Person who, together with any Credit Party, is treated as a single employer or who is under common control with any Credit Party within the meaning of Section 414(b), (c), (m) or (o) of the Code or Section 4001(b) of ERISA.

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.

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“Event of Default” means any of the events specified in Section 13.1, provided that any requirement for passage of time, giving of notice, or any other condition, has been satisfied.

“Excess Availability” means, as of any particular time, (a) the lesser of (i) the Revolving Credit Commitment minus the Reserves and (ii) the Borrowing Base, minus (b) in each case, the sum of (i) the Aggregate Revolving Credit Obligations plus (ii) the aggregate amount of all then outstanding and unpaid trade payables and other obligations of the Borrowers which are outstanding more than sixty (60) days past due as of the end of the immediately preceding month or at the Administrative Agent’s option, as of a more recent date based on such reports as the Administrative Agent may from time to time specify (other than trade payables or other obligations being contested or disputed by a Borrower in good faith), plus (iii) without duplication, the amount of checks issued by the Borrowers to pay trade payables and other obligations which are more than sixty (60) days past due as of the end of the immediately preceding month or at the Administrative Agent’s option, as of a more recent date based on such reports as the Administrative Agent may from time to time specify (other than trade payables or other obligations being contested or disputed by a Borrower in good faith), but not yet sent.

“Excluded Swap Obligation” means, with respect to any Subsidiary Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the Guaranty of such Subsidiary Guarantor of, or the grant by such Subsidiary Guarantor of a security interest to secure, such Swap Obligation (or any Guaranty thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Subsidiary Guarantor’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the Guaranty of such Subsidiary  Guarantor or the grant of such security interest becomes effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Subsidiary Guaranty or security interest is or becomes illegal.

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender, the Issuing Lender or any other recipient of any payment to be made by or on account of any obligation of any Borrower hereunder, (a) taxes imposed on or measured by its overall net income (however denominated), and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the laws under which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located, (b) any branch profits taxes imposed by the United States or any similar tax imposed by any other jurisdiction in which any Borrower is located and (c) in the case of a Foreign Lender (other than an assignee pursuant to a request by a Borrower under Section 6.12(b)), any withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party hereto (or designates a new lending office) or is attributable to such Foreign Lender’s failure or inability (other than as a result of a Change in Law) to comply with Section 6.11(e), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the Borrowers with respect to such withholding tax pursuant to Section 6.11(a).

“Existing Credit Agreement” shall have the meaning assigned to such term in the statement of purpose.

“Extensions of Credit” means, as to any Lender at any time, (a) an amount equal to the sum of (i) the aggregate principal amount of all Revolving Credit Loans made by such Lender then outstanding, (ii) such Lender’s Revolving Credit Commitment Percentage of the L/C Obligations then outstanding, (iii) such Lender’s Revolving Credit Commitment Percentage of the Swingline Loans then outstanding, and

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(iv) such Lender’s Revolving Credit Commitment Percentage of the Agent Advances then outstanding or (b) the making of any Loan or participation in any Letter of Credit by such Lender, as the context requires.

“FASB 142” means the Financial Accounting Standards Board Statement No. 142, as in effect on the date of this Agreement, specifying applicable accounting principles with respect to goodwill adjustments.

“FDIC” means the Federal Deposit Insurance Corporation, or any successor thereto.

“Federal Funds Rate” means the rate per annum (rounded upwards, if necessary, to the next higher 1/100th of 1%) representing the daily effective federal funds rate as quoted by the Administrative Agent and confirmed in Federal Reserve Board Statistical Release H.15 (519) or any successor or substitute publication selected by the Administrative Agent.  If, for any reason, such rate is not available, then “Federal Funds Rate” means a daily rate which is determined, in the opinion of the Administrative Agent, to be the rate at which federal funds are being offered for sale in the national federal funds market at 9:00 a.m.  Rates for weekends or holidays shall be the same as the rate for the most immediately preceding Business Day.

“Fee Letter” shall have the meaning assigned thereto in Section 6.3(b).

“Fiscal Year” means the fiscal year of the Parent and its Subsidiaries ending on the last Saturday in April or as such Fiscal Year is changed pursuant to the terms of Section 12.9.

“Fixed Charge Coverage Ratio” means, as of any date of determination, the ratio of (a) the sum of (i) EBITDA minus (ii) unfinanced Capital Expenditures minus (iii) Tax Expense (payable in cash) minus (iv) dividends and distributions (payable in cash) made by the Parent minus (v) the amount paid by the Parent to purchase any of its Equity Interests minus (vi) loans and cash contributions made after the Closing Date by any Credit Party or any Subsidiary of a Credit Party to a Foreign Subsidiary to (b) Fixed Charges, in each case, for the period of twelve (12) consecutive months ending on or immediately prior to such date.

“Fixed Charges” means, with respect to the Parent and its Subsidiaries (other than any VIE) for any period, the sum of the following determined on a Consolidated basis (but excluding any VIE), without duplication, for the Parent and its Subsidiaries in accordance with GAAP: (a) Interest Expense (payable in cash); and (b) principal payments with respect to Debt (other than principal payments made on any Revolving Credit Loan during the term of this Agreement).

“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, each state thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

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

“Funding Borrower” shall have the meaning assigned thereto in Section 4.1(f).

“GAAP” means generally accepted accounting principles, as recognized by the American Institute of Certified Public Accountants and the Financial Accounting Standards Board, consistently applied and maintained on a consistent basis for the Parent and its Subsidiaries throughout the period indicated and (subject to Section 15.8) consistent with the prior financial practice of the Parent and its Subsidiaries.

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“Governmental Approvals” means all authorizations, consents, permits, approvals, licenses and exemptions of, registrations and filings with, and reports to, all Governmental Authorities.

“Governmental Authority” means any nation, province, territory, state or political subdivision thereof, and any government or any Person exercising executive, legislative, regulatory or administrative powers or functions of or pertaining to government, and any corporation or other entity owned or controlled, through Equity Interests or capital ownership or otherwise, by any of the foregoing.

“Guaranty” shall have the meaning assigned thereto in Section 5.1.

“Guaranty Obligation” means, with respect to the Parent and its Subsidiaries, without duplication, any obligation, contingent or otherwise, of any such Person pursuant to which such Person has directly or indirectly guaranteed any Debt or other obligation of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of any such Person (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or other obligation (whether arising by virtue of partnership arrangements, by agreement to keep well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement condition or otherwise) or (b) entered into for the purpose of assuring in any other manner the obligee of such Debt or other obligation of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); provided, that the term Guaranty Obligation shall not include (i) endorsements for collection or deposit in the ordinary course of business or (ii) any guaranty by any Borrower of any operating lease of any Subsidiary of such Borrower.

“Hazardous Materials” means any substances or materials (a) which are or become defined as hazardous wastes, hazardous substances, pollutants, contaminants, chemical substances or mixtures or toxic substances under any Environmental Law, (b) which are toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic or otherwise harmful to human health or the environment and are or become regulated by any Governmental Authority, (c) the presence of which require investigation or remediation under any Environmental Law or common law, (d) the discharge or emission or release of which requires a permit or license under any Environmental Law or other Governmental Approval, (e) which are deemed to constitute a nuisance or a trespass which pose a health or safety hazard to Persons or neighboring properties, (f) which consist of underground or aboveground storage tanks, whether empty, filled or partially filled with any substance, or (g) which contain asbestos, polychlorinated biphenyls, urea formaldehyde foam insulation, petroleum hydrocarbons, petroleum derived substances or waste, crude oil, nuclear fuel, natural gas or synthetic gas.

“Hedging Agreement” means any agreement with respect to any Interest Rate Contract, forward rate agreement, commodity swap, forward foreign exchange agreement, currency swap agreement, cross-currency rate swap agreement, currency option agreement or other agreement or arrangement designed to alter the risks of any Person arising from fluctuations in interest rates, currency values or commodity prices, all as amended, restated, supplemented or otherwise modified from time to time.

“Hedging Obligations” shall have the meaning assigned thereto in the definition of Obligations.

“Immaterial Subsidiaries” means LZB Carolina Properties, Inc., LZB Delaware Valley Inc., and LZB Delaware Valley Properties, Inc.

“Indemnified Taxes” means Taxes and Other Taxes other than Excluded Taxes.

“Indemnitee” shall have the meaning assigned thereto in Section 15.2(b).

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“Independent Accountants” shall have the meaning assigned thereto in Section 9.1(c).

“Information Materials” shall have the meaning assigned thereto in Section 9.7.

“Interest Expense” means, with respect to the Parent and its Subsidiaries (other than any VIE) for any period, the gross interest expense (including interest expense attributable to Capital Leases and all net payment obligations pursuant to Interest Rate Contracts but excluding the effect of any changes in fair value with respect to any such Interest Rate Contracts) of the Parent and its Subsidiaries, all determined for such period on a Consolidated basis (but excluding any VIE), without duplication, in accordance with GAAP.

“Interest Period” shall have the meaning assigned thereto in Section 6.1(b).

“Interest Rate Contract” means any interest rate swap agreement, interest rate cap agreement, interest rate floor agreement, interest rate collar agreement, interest rate option or any other agreement regarding the hedging of interest rate risk exposure executed in connection with hedging the interest rate exposure of any Person and any confirming letter executed pursuant to such agreement, all as amended, restated, supplemented or otherwise modified from time to time.

“Inventory” means all “inventory,” as such term is defined in the UCC, of each Credit Party, whether now existing or hereafter acquired, wherever located, and in any event including inventory, merchandise, goods and other personal property that are held by or on behalf of a Credit Party for sale or lease or are furnished or are to be furnished under a contract of service, goods that are leased by a Credit Party as lessor, or that constitute raw materials, samples, work-in-process, finished goods, returned goods, promotional materials or materials or supplies of any kind, nature or description used or consumed or to be used or consumed in such Credit Party’s business or in the processing, production, packaging, promotion, delivery or shipping of the same, including all supplies and embedded software.

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

“Issuer Document” means, with respect to any Letter of Credit, an Application, a letter of credit agreement, or any other document, agreement or instrument entered into (or to be entered into) by a Borrower in favor of Issuing Lender and relating to such Letter of Credit.

“Issuing Lender” means, individually and collectively, (a) Wells Fargo Bank or successor thereto, and (b) unless resulting from the Borrowers’ failure to satisfy the conditions of Section 7.2, if Wells Fargo Bank is unwilling or unable to issue a Letter of Credit requested pursuant to Article 3, any other Lender.

“L/C Commitment” means, as to any Lender, the obligation of such Lender to participate in Letters of Credit hereunder in an aggregate principal amount at any time outstanding not to exceed the amount set forth opposite such Lender’s name on the Register, as such amount may be reduced or otherwise modified at any time or from time to time pursuant to the terms hereof.  The L/C Commitment of all Lenders shall be the lesser of (a) the Revolving Credit Commitment and (b) Fifty Million Dollars ($50,000,000).

“L/C Commitment Percentage” means, as to any Lender, at any time, the ratio of (a) the amount of the L/C Commitment of such Lender to (b) the L/C Commitment of all Lenders.

“L/C Facility” means the letter of credit facility established pursuant to Article 3.

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“L/C Obligations” means at any time, an amount equal to the sum of (a) the aggregate undrawn and unexpired amount of the then outstanding Letters of Credit and (b) the aggregate amount of drawings under Letters of Credit which have not then been reimbursed pursuant to Section 3.5. For the avoidance of doubt, no amounts owing by any Credit Party to any Lender pursuant to any letter of credit issued under Section 12.1(k) shall be considered as a L/C Obligation for purposes of this Credit Agreement or any other Loan Document.

“Lender” means (a) each Person executing this Agreement as a Lender (including the Issuing Lender and the Swingline Lender unless the context otherwise requires) set forth on the signature pages hereto and (b) each Person that hereafter becomes a party to this Agreement as a Lender pursuant to Section 2.7 or 15.9.

“Lender Agreement” means a Lender Agreement executed pursuant to Section 2.7, substantially in the form attached hereto as Exhibit H.

“Lender Group” means, collectively, the Administrative Agent and the Lenders.  In addition, if WFCF ceases to be the Administrative Agent or any Lender, any Issuing Lender or the Swingline Lender ceases to be a Lender, then for any Lender Hedging Agreement entered into by any Credit Party with WFCF or such Lender (or an Affiliate of such Person), as the case may be, while WFCF was the Administrative Agent or a Lender (in each case as defined hereunder), WFCF or such Lender (or such Affiliate), as the case may be, shall be deemed to be a member of the Lender Group for purposes of determining the secured parties under any of the Security Documents.

“Lender Hedging Agreement” means any Hedging Agreement between any Credit Party and any Person (or Affiliate of such Person) that was the Administrative Agent or a Lender (in each case as defined hereunder) at the time it entered into such Hedging Agreement, whether or not such Person has ceased to be the Administrative Agent or a Lender under this Agreement.

“Lending Office” means, with respect to any Lender, the office of such Lender maintaining such Lender’s Revolving Credit Commitment Percentage or L/C Commitment Percentage of the Extensions of Credit, as applicable.

“Letters of Credit” means either Standby Letters of Credit or Commercial Letters of Credit issued by the Issuing Lender on behalf of the Borrowers from time to time in accordance with Article 3. For the avoidance of doubt, no letter of credit issued under Section 12.1(k) shall be considered a Letter of Credit for purposes of this Credit Agreement or any other Loan Document.

“LIBOR Rate” means the rate per annum as published by ICE Benchmark Administration Limited (or any successor page or other commercially available source as the Administrative Agent may designate from time to time) as of 11:00 a.m., London time, two Business Days prior to the commencement of the requested Interest Period, for a term, and in an amount, comparable to the Interest Period and the amount of the LIBOR Rate Loan requested (whether as an initial LIBOR Rate Loan or as a continuation of a LIBOR Rate Loan or as a conversion of a Base Rate Loan to a LIBOR Rate Loan) by Borrowers in accordance with this Agreement (and, if any such published rate is below zero, then the rate determined pursuant to this definition shall be deemed to be zero).  Each determination of the LIBOR Rate shall be made by the Administrative Agent and shall be conclusive in the absence of manifest error.

“LIBOR Rate Loan” means any Loan bearing interest at a rate determined by reference to the LIBOR Rate.

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“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest, hypothecation, assignment, deposit arrangement, easement, security agreement or encumbrance of any kind in respect of such asset.  For the purposes of this Agreement, a Person shall be deemed to own subject to a Lien any asset which it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, Capital Lease or other title retention agreement relating to such asset.

“Loan Documents” means, collectively, this Agreement, the Notes, the Applications, the Security Documents, the Collateral Access Agreements, the Fee Letter, the Letters of Credit, each joinder agreement executed pursuant to Section 10.11, and each other document, instrument, certificate and agreement executed and delivered by any Credit Party or any Subsidiary thereof in connection with this Agreement or any other Loan Document or otherwise referred to herein or therein or contemplated hereby or thereby (excluding any Hedging Agreement).

“Loans” means the collective reference to the Revolving Credit Loans, the Agent Advances and the Swingline Loans and “Loan” means any of such Loans.

“Margin Rate Period” shall have the meaning assigned thereto in Section 6.1(c).

“Material Adverse Effect” means, with respect to the Parent or any of its Subsidiaries, (a) a material adverse effect on the assets, liabilities (whether actual or contingent), business, prospects, operations or condition (financial or otherwise) of the Parent and its Subsidiaries, taken as a whole, (b) a material impairment of (i) the ability of the Parent and its Subsidiaries, taken as a whole, to perform their obligations under the Loan Documents or (ii) the ability of the Lender Group to enforce the Obligations, (c) a material impairment of the enforceability or priority of the Administrative Agent’s Liens with respect to the Collateral as a result of an action or failure to act on the part of the Parent or any of its Subsidiaries or (d) an impairment of the Administrative Agent’s ability to realize upon Collateral included in the calculation of the Borrowing Base with a value of at least $10,000,000 in the aggregate.

“Material Contract” means (a) any contract or other agreement (other than the Loan Documents), written or oral, of any Borrower or any of its Subsidiaries involving monetary liability of or to any Person in an amount in excess of $7,500,000 and (b) any other contract or other agreement, written or oral, of any Borrower or any of its Subsidiaries the failure of any Person party thereto to comply with which, or the cancellation of which, could reasonably be expected to have a Material Adverse Effect.

“Material Operating Subsidiary” means a Subsidiary of a Credit Party that has assets constituting at least ten percent (10%) of total assets of the Parent on a Consolidated basis (but excluding any VIE) as of the end of the immediately preceding fiscal quarter for which the Parent has delivered financial statements pursuant to Section 9.1(b).

“Maximum Borrower Liability” shall have the meaning assigned thereto in Section 4.1(c).

“Maximum Guaranteed Amount” shall have the meaning assigned thereto in Section 5.1(g).

“Multiemployer Plan” means a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA to which any Borrower or any ERISA Affiliate is making, or is accruing an obligation to make, or has made, or has accrued an obligation to make, contributions within the preceding six (6) years.

“Net Cash Proceeds” means, as applicable, (a) with respect to any sale or other disposition of assets, the gross cash proceeds received by any Borrower or any of their Subsidiaries from such sale less the sum of (i) all income taxes and other taxes assessed by a Governmental Authority as a result of such

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sale and any other fees and expenses incurred in connection therewith and (ii) the principal amount of, premium, if any, and interest on any Debt secured by a Lien on the asset (or a portion thereof) sold, which Debt is required to be repaid in connection with such sale, (b) with respect to any offering of Equity Interests or issuance of Debt, the gross cash proceeds received by any Borrower or any of their Subsidiaries therefrom less all legal, underwriting and other fees and expenses incurred in connection therewith and (c) with respect to any payment under an insurance policy or in connection with a condemnation proceeding, the amount of cash proceeds received by any Borrower or any of their Subsidiaries from an insurance company or Governmental Authority, as applicable, net of all expenses of collection.

“Net Income” means, with respect to any Person for any period, the aggregate of the net income (loss) of such Person and its Subsidiaries (other than any VIE), on a consolidated basis, for such period (and as to the Parent and its Subsidiaries (other than any VIE), excluding to the extent included therein (a) any extraordinary, one-time or non-recurring gains, (b) non-cash losses or charges and (c) non-cash items resulting from operations that have been discontinued on or before the end of the applicable period) after deducting all charges which should be deducted before arriving at the net income (loss) for such period (but without regard to operations that have been discontinued on or before the date hereof) and after deducting the provision for taxes for such period, all as determined in accordance with GAAP; provided, that

(i)    the net income of any Person that is accounted for by the equity method of accounting shall be included only to the extent of the amount of dividends or distributions paid or payable to such Person or a Subsidiary of such Person;

(ii)    except to the extent included pursuant to the foregoing clause, the net income of any Person accrued prior to the date it becomes a Subsidiary of such Person or is merged into or consolidated with such Person or any of its Subsidiaries or that Person’s assets are acquired by such Person or by any of its Subsidiaries shall be excluded; and

(iii)    the net income (if positive) of any Wholly-Owned Subsidiary to the extent that the declaration or payment of dividends or similar distributions by such Wholly-Owned Subsidiary to such Person or to any other Wholly-Owned Subsidiary of such Person is not at the time permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to such Wholly-Owned Subsidiary shall be excluded.

For the purposes of this definition, net income excludes any gain and non-cash loss together with any related provision for taxes for such gain and non-cash loss realized upon the sale or other disposition of any assets that are not sold in the ordinary course of business (including dispositions pursuant to sale and leaseback transactions and for this purpose sales or other dispositions of retail stores, warehouses, distribution centers or corporate offices shall not be deemed to be in the ordinary course of the business of the Parent and its Subsidiaries) or of any Equity Interests of such Person or a Subsidiary of such Person and any net income or non-cash loss realized as a result of changes in accounting principles or the application thereof to such Person and any net income realized as the result of the extinguishment of debt.

“Net OLV” means, as to each of the following categories of Inventory, the value that is estimated to be recoverable in an orderly liquidation thereof, net of liquidation expenses of selling such category of assets, as determined from time to time by a qualified appraiser selected by the Administrative Agent:  retail; upholstery; case goods; and raw materials.

“New Lender” shall have the meaning assigned thereto in Section 2.7(a)(i).

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“Notes” means the collective reference to the Revolving Credit Notes and the Swingline Notes.

“Notice of Account Designation” shall have the meaning assigned thereto in Section 2.3(b).

“Notice of Borrowing” shall have the meaning assigned thereto in Section 2.3(a).

“Notice of Conversion/Continuation” shall have the meaning assigned thereto in Section 6.2.

“Notice of Requested Commitment Increase” shall have the meaning assigned thereto in Section 2.7(a)(i).

“Obligations” means, in each case, whether now in existence or hereafter arising: (a) the principal of and interest on (including interest accruing after the filing of any bankruptcy or similar petition (regardless of whether allowed or allowable in whole or in part as a claim in any such bankruptcy)) the Loans, (b) the L/C Obligations, including all indemnification obligations with respect to Letters of Credit (irrespective of whether contingent),  (c) all existing or future payments and other obligations owing by any Credit Party under any Lender Hedging Agreement (all such obligations with respect to any such Lender Hedging Agreement, “Hedging Obligations”), (d) all existing or future payments and other obligations owing by any Credit Party under any other Bank Products Document and (e) all other fees and commissions (including attorneys’ fees), charges, indebtedness, loans, liabilities, indemnitees, expenses (including expenses that accrue after the filing of a bankruptcy (regardless of whether allowed or allowable in whole or in part as a claim in any such bankruptcy)), financial accommodations, obligations, covenants and duties owing by any Credit Party or any of their Subsidiaries to the Administrative Agent or any other member of the Lender Group, in each case under or in respect of this Agreement, any Note, any Letter of Credit or any of the other Loan Documents of every kind, nature and description, direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising contractual or tortious, liquidated or unliquidated, and whether or not evidenced by any note. For the avoidance of doubt, no amounts owing by any Credit Party to any Lender pursuant to any letter of credit issued under Section 12.1(k) shall be considered as an Obligation for purposes of this Credit Agreement or any other Loan Document.

“OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury, or any successor office or agency.

“Officer’s Compliance Certificate” shall have the meaning assigned thereto in Section 9.2.

“Other Debtor Relief Law” shall have the meaning assigned thereto in Section 4.1(c)(iii).

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

“Overadvance” shall have the meaning assigned thereto in Section 2.2(c).

“Parent” shall have the meaning assigned thereto in the Preamble to this Agreement.

“Participant” shall have the meaning assigned thereto in Section 15.9(d).

“Patriot Act” has the meaning specified therefor in Section 8.1(x) of this Agreement.

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“PBGC” means the Pension Benefit Guaranty Corporation or any successor agency.

“Pension Plan” means any Employee Benefit Plan, other than a Multiemployer Plan, which is subject to the provisions of Title IV of ERISA or Section 412 of the Code and (a) which is maintained for the employees of any Borrower or any ERISA Affiliates, (b) which has at any time within the preceding six (6) years been maintained for the employees of any Borrower or any of its current or former ERISA Affiliates, (c) to which any Borrower or any ERISA Affiliate makes contributions or is required to make contributions, (d) to which any Borrower or any ERISA Affiliate has made or has been required to make contributions at any time within the preceding six (6) years or (e) to which any Borrower or any ERISA Affiliate has, or has had at any time within the preceding six (6) years, any liability, contingent or otherwise.

“Permitted Acquisitions” shall have the meaning assigned thereto in Section 12.3(c).

“Permitted Discretion” means a determination made in the exercise of reasonable (from the perspective of a secured asset-based lender) business judgment.

“Permitted Lien” means any Lien permitted pursuant to Section 12.2.

“Person” means an individual, corporation, limited liability company, partnership, association, trust, business trust, joint venture, joint stock company, pool, syndicate, sole proprietorship, unincorporated organization, Governmental Authority or any other form of entity or group thereof.

“PPSA” means the Personal Property Security Act (Ontario) (as may be amended and in effect from time to time), as applicable in the context, or analogous legislation of the applicable Canadian province, provinces, territory or territories in respect of the Canadian Borrower.

“Qualified ECP Guarantor” means, in respect of any Swap Obligation, each Credit Party that has total assets exceeding $10,000,000 at the time the relevant guaranty, keepwell, or grant of the relevant security interest becomes effective with respect to such Swap Obligation or such other Person as constitutes an “eligible contract participant” under the Commodity Exchange Act or any regulations promulgated thereunder and can cause another Person to qualify as an “eligible contract participant” at such time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

“Register” shall have the meaning assigned thereto in Section 15.9(c).

“Reimbursement Obligation” means the obligation of the Borrowers to reimburse the Issuing Lender pursuant to Section 3.5 for amounts drawn under Letters of Credit.

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

“Release” means, with respect to Hazardous Materials, any releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, disposing or dumping, as any of such terms may be further defined under any Environmental Laws, into or through any medium, including groundwater, surface water, land, soil or air.

“Required Lenders” means, at any date, (a) any combination of Lenders holding in the aggregate greater than fifty percent (50%) of the outstanding Extensions of Credit plus the aggregate unused Revolving Credit Commitment at such time or, (b) if the Credit Facility has been terminated pursuant to Section 13.2, any combination of Lenders holding greater than fifty percent (50%) of the aggregate

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Extensions of Credit; provided that the Commitment of, and the portion of the Extensions of Credit, as applicable, held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders.

“Reserves” means reserves that the Administrative Agent may establish from time to time against the aggregate Revolving Credit Commitments or the Borrowing Base as the Administrative Agent shall deem necessary in its Permitted Discretion.  Without limiting the generality of the foregoing, the following reserves shall be deemed an exercise of the Administrative Agent’s Permitted Discretion:  (a) reserves for price adjustments and damages; (b) reserves for obsolescence of Inventory; (c) reserves for special order goods and deferred shipment sales; (d) reserves for accrued but unpaid vendor royalties and ad valorem and personal property tax liability; (e) reserves for market value declines; (f) Account reserves; (g) Bank Product Reserves; (h) reserves for rent to be paid with respect to leased assets and warehousemen’s, bailees’, shippers’ or carriers’ charges; (i) to the extent not excluded pursuant to the definition of Eligible Accounts, the Dilution Reserve; (j) reserves for amounts owing by a Borrower to a credit card issuer or credit card processor; (k) reserves for changes in Inventory turnover or mix that results in a decrease in the value of the Inventory; (l) reserves for duty and freight on in-transit goods; (m) reserves for customer deposits; (n) reserves for variances between the Borrowers’ perpetual Inventory records and periodic test counts by the Administrative Agent’s field examiners; (o) reserves for the face amount of letters of credit existing on the Closing Date that were issued for the account of the Parent or any of its Subsidiaries but do not constitute Letters of Credit; and (p) reserves for any other matter that has a negative impact on the value of the Collateral; provided that reserves for unpaid vendor royalties (as referenced in subclause (d)) or customer deposits (as referenced in subclause (m)) shall only be imposed against the Borrowing Base (and not the aggregate Revolving Credit Commitments) unless Excess Availability is less than fifty percent (50%) of the aggregate Revolving Credit Commitments.

“Responsible Officer” means any of the following: the chief executive officer, chief financial officer, senior vice president, principal accounting officer or treasurer of the Parent.  Any document delivered hereunder that is signed by a Responsible Officer shall be conclusively presumed to have been authorized by all necessary corporate, partnership or other action on the part of the Parent and such Responsible Officer shall be conclusively presumed to have acted on behalf of the Parent.

“Revolving Credit Commitment” means (a) as to any Lender, the obligation of such Lender to make Revolving Credit Loans to the account of the Borrowers hereunder in an aggregate principal amount at any time outstanding not to exceed the amount set forth opposite such Lender’s name on the Register as such amount may be reduced or modified at any time or from time to time pursuant to the terms hereof and (b) as to all Lenders, the aggregate commitment of all Lenders to make Revolving Credit Loans, as such amount may be reduced or modified at any time or from time to time pursuant to the terms hereof.  The Revolving Credit Commitment of all Lenders on the Closing Date shall be One Hundred Fifty Million Dollars ($150,000,000).

“Revolving Credit Commitment Percentage” means, as to any Lender at any time, the ratio of (a) the amount of the Revolving Credit Commitment of such Lender to (b) the Revolving Credit Commitments of all Lenders.

“Revolving Credit Facility” means the revolving credit facility established pursuant to Article 2.

“Revolving Credit Loans” means any revolving loan made to the Borrowers pursuant to Section 2.1, and all such revolving loans collectively as the context requires.

“Revolving Credit Maturity Date” means the earliest of (a) December 19, 2022, (b) the date of termination of the Revolving Credit Facility by the Borrowers pursuant to Section 2.6, or (c) the date of

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termination of the Revolving Credit Facility by the Administrative Agent on behalf of the Lenders pursuant to Section 13.2(a).

“Revolving Credit Note” means a promissory note made by the Borrowers payable to the order of a Lender, substantially in the form of Exhibit A-1, evidencing a Revolving Credit Loan, and any amendments and modifications thereto, any substitutes therefor, and any replacements, restatements, renewals or extensions thereof, in whole or in part.

“Sanctioned Entity” means (a) a country or territory or a government of a country or territory, (b) an agency of the government of a country or territory, (c) an organization directly or indirectly controlled by a country or territory or its government, or (d) a Person resident in or determined to be resident in a country or territory, in each case of clauses (a) through (d) that is a target of Sanctions, including a target of any country sanctions program administered and enforced by OFAC.

“Sanctioned Person” means, at any time (a) any Person named on the list of Specially Designated Nationals and Blocked Persons maintained by OFAC, OFAC’s consolidated Non-SDN list or any other Sanctions-related list maintained by any Governmental Authority, (b) a Person or legal entity that is a target of Sanctions, (c) any Person operating, organized or resident in a Sanctioned Entity, or (d) any Person directly or indirectly owned or controlled (individually or in the aggregate) by or acting on behalf of any such Person or Persons described in clauses (a) through (c) above.

“Sanctions” means individually and collectively, respectively, any and all economic sanctions, trade sanctions, financial sanctions, sectoral sanctions, secondary sanctions, trade embargoes anti-terrorism laws and other sanctions laws, regulations or embargoes, including those imposed, administered or enforced from time to time by:  (a) the United States of America, including those administered by OFAC, the U.S. Department of State, the U.S. Department of Commerce, or through any existing or future executive order, (b) Her Majesty’s Treasury of the United Kingdom, or (c) any other Governmental Authority with jurisdiction over any Credit Party or any of their respective Subsidiaries.

“Secured Parties” means the members of the Lender Group and the Bank Product Providers.

“Security Agreement” means that certain Amended and Restated Security Agreement dated as of October 19, 2011, executed by the Credit Parties (other than the Canadian Borrower and any other Credit Party organized under the laws of Canada or any province or territory thereof) in favor of the Administrative Agent, for the benefit of the Secured Parties.

“Security Documents” means the collective reference to the Security Agreement, the Canadian Security Agreement, the Canadian Pledge Agreement, the Blocked Account Agreements and each other agreement or writing pursuant to which any Borrower or any Subsidiary thereof purports to pledge or grant a security interest in any property or assets securing the Obligations or any such Person purports to guaranty the payment or performance of the Obligations, in each case, as amended, restated, supplemented or otherwise modified from time to time.

“Solvent” means, as to the Borrowers and their Subsidiaries on a particular date, that any such Person (a) has capital sufficient to carry on its business and transactions and all business and transactions in which it is about to engage and is able to pay its debts as they mature, (b) has assets having a value, both at fair valuation and at present fair saleable value, greater than the amount required to pay its probable liabilities (including contingencies), and (c) does not believe that it will incur debts or liabilities beyond its ability to pay such debts or liabilities as they mature.

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“Standard Letter of Credit Practice” means, for Issuing Lender, any domestic or foreign law or letter of credit practices applicable in the city in which Issuing Lender issued the applicable Letter of Credit or, for its branch or correspondent, such laws and practices applicable in the city in which it has advised, confirmed or negotiated such Letter of Credit, as the case may be, in each case, (a) which letter of credit practices are of banks that regularly issue letters of credit in the particular city, and (b) which laws or letter of credit practices are required or permitted under ISP or Uniform Customs, as chosen in the applicable Letter of Credit.

“Standby Letter of Credit” means a Letter of Credit issued to support obligations of any Borrower or its Subsidiaries incurred in the ordinary course of its business, and which is not a Commercial Letter of Credit.

“Subsidiary” means as to any Person, any corporation, partnership, limited liability company or other entity of which more than fifty percent (50%) of the outstanding capital stock or other Equity Interests having ordinary voting power to elect a majority of the board of directors or other managers of such corporation, partnership, limited liability company or other entity is at the time owned by or the management is otherwise controlled by such Person, or one or more Subsidiaries of such Person (irrespective of whether, at the time, capital stock or other Equity Interest of any other class or classes of such corporation, partnership, limited liability company or other entity shall have or might have voting power by reason of the happening of any contingency).  Unless otherwise qualified, references to “Subsidiary” or “Subsidiaries” herein shall refer to those of the Parent.

“Subsidiary Borrower” shall have the meaning assigned thereto in the Recitals of this Agreement.

“Subsidiary Guarantors” shall have the meaning assigned thereto in the Recitals of this Agreement.

“Supermajority Lenders” means, at any date, (a) any combination of Lenders holding in the aggregate greater than seventy-five percent (75%) of the outstanding Extensions of Credit plus the aggregate unused Revolving Credit Commitment at such time or, (b) if the Credit Facility has been terminated pursuant to Section 13.2, any combination of Lenders holding greater than seventy-five percent (75%) of the aggregate Extensions of Credit; provided that the Commitment of, and the portion of the Extensions of Credit, as applicable, held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders.

“Swap Obligation” means, with respect to any Credit Party, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act.

“Swingline Commitment” means the lesser of (a) Thirty-Five Million Dollars ($35,000,000) and (b) the aggregate Revolving Credit Commitment of the Lenders.

“Swingline Facility” means the swingline facility established pursuant to Section 2.2.

“Swingline Lender” means WFCF in its capacity as swingline lender hereunder.

“Swingline Loan” means any swingline loan made by the Swingline Lender to the Borrowers pursuant to Section 2.2, and all such swingline loans collectively as the context requires.

“Swingline Note” means the Swingline Note made by the Borrowers payable to the order of the Swingline Lender, if requested, substantially in the form of Exhibit A-2, evidencing the Swingline Loans,

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and any amendments and modifications thereto, any substitutes therefor, and any replacements, restatements, renewals or extensions thereof, in whole or in part.

“Swingline Termination Date” means the first to occur of (a) the resignation of WFCF as Administrative Agent in accordance with Section 14.9 and (b) the Revolving Credit Maturity Date.

“Tax Expense” means, with respect to the Parent and its Subsidiaries (other than any VIE) for any period, federal (United States or Canada), state, provincial, local and foreign income, value added and similar taxes and any single business taxes that are not recorded as sales and general administration (expense), in each case, imposed on the Parent or any of its Subsidiaries, without duplication, for such period.

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

“Termination Event” means (a) a “Reportable Event” described in Section 4043 of ERISA for which the notice requirement has not been waived by the PBGC, (b) the withdrawal of any Borrower or any ERISA Affiliate from a Pension Plan during a plan year in which it was a “substantial employer” as defined in Section 4001(a)(2) of ERISA, (c) the termination of a Pension Plan, the filing of a notice of intent to terminate a Pension Plan or the treatment of a Pension Plan amendment as a termination, under Section 4041 of ERISA, if the plan assets are not sufficient to pay all plan liabilities, (d) the institution of proceedings to terminate, or the appointment of a trustee with respect to, any Pension Plan by the PBGC, (e) any other event or condition which would constitute grounds under Section 4042(a) of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan, (f) the imposition of a Lien pursuant to Section 412 or 430 of the Code or Section 302 or 4068 of ERISA, (g) the partial or complete withdrawal of any Borrower or any ERISA Affiliate from a Multiemployer Plan, (h) any event or condition which results in the reorganization or insolvency of a Multiemployer Plan under Sections 4241 or 4245 of ERISA, (i) any event or condition which results in the termination of a Multiemployer Plan under Section 4041A of ERISA or the institution by the PBGC of proceedings to terminate or to appoint a trustee to administer a Multiemployer Plan under Section 4042 of ERISA, (j) any Pension Plan being in “at risk status” within the meaning of Code Section 430(i), (k) any Multiemployer Plan being in “endangered status” or “critical status” within the meaning of Code Section 432(b), or (l) with respect to any Pension Plan, any Borrower or any ERISA Affiliate incurring a substantial cessation of operations within the meaning of ERISA Section 4062(e).

“Uniform Customs” means the rules of the Uniform Customs and Practice for Documentary Credits, as most recently published by the International Chamber of Commerce and in effect as of July 1, 2007 (or such later version thereof as may be in effect at the time of issuance).

“UCC” means the Uniform Commercial Code as in effect in the State of North Carolina, as amended or modified from time to time.

“United States” means the United States of America.

“VIE” means an independent dealer of any Credit Party that is determined to have insufficient equity to carry out its businesses without the financial support of a Credit Party and is categorized under GAAP or generally accepted Canadian accounting principles, as applicable, as a “variable interest entity” or a “VIE”.

“Wells Fargo Bank” means Wells Fargo Bank, N.A.

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“WFCF” means Wells Fargo Capital Finance, LLC, a Delaware limited liability company.

“Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

“Wholly-Owned Subsidiary” means, at any time, any Subsidiary one hundred percent (100%) of all of the equity interests (except directors’ qualifying shares or shares aggregating less than one percent (1%) of the outstanding shares of such Subsidiary which are owned by individuals) and voting interests of which are owned by any one or more of the Parent and the Parent’s other Wholly-Owned Subsidiaries at such time.

SECTION 1.2                                             Other Definitions and Provisions.  With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:  (a) the definitions of terms herein shall apply equally to the singular and plural forms of the terms defined, (b) whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms, (c) the words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”, (d) the word “will” shall be construed to have the same meaning and effect as the word “shall”, (e) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (f) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (g) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (h) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, (i) all Schedules and Exhibits attached to this Agreement shall be deemed incorporated herein by reference, (j) the preamble and the statement of purpose to this Agreement shall be deemed an integral part of this Agreement and are incorporated herein by reference, (k) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights, (l) the term “documents” includes any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other writings, however evidenced, whether in physical or electronic form, (m) 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”, (n) and the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or”, and (o) Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.

SECTION 1.3                                             Accounting Terms.  All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the audited financial statements required by Section 9.1(b), except as otherwise specifically prescribed herein.

SECTION 1.4                                             UCC and PPSA Terms.  Any terms used in this Agreement that are defined in the UCC shall be construed and defined as set forth in the UCC unless otherwise defined herein; provided, however, that to the extent that the UCC is used to define any term herein and such term is defined differently in different Articles of the UCC, the definition of such term contained in Article 9 of

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the UCC shall govern, and when used to describe a category or categories of Collateral owned or hereafter acquired by the Canadian Borrower and located in Canada, such terms shall include the equivalent category or categories of property set out in the PPSA.

SECTION 1.5                                             Rounding.  Any financial ratios required to be maintained by the Borrowers pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one decimal place more than the number of decimal places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).

SECTION 1.6                                             References to Agreement and Laws.  Unless otherwise expressly provided herein, (a) references to formation documents, governing documents, agreements (including the Loan Documents) and other contractual instruments shall be deemed to include all subsequent amendments, restatements, extensions, supplements and other modifications thereto, but only to the extent that such amendments, restatements, extensions, supplements and other modifications are not prohibited by any Loan Document; and (b) references to any Applicable Law shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such Applicable Law.

SECTION 1.7                                             Times of Day.  Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).

SECTION 1.8                                             Letter of Credit Amounts.  Unless otherwise specified, all references herein to the amount of a Letter of Credit at any time shall be deemed to mean the maximum face amount of such Letter of Credit after giving effect to all increases thereof contemplated by such Letter of Credit or the Application therefor, whether or not such maximum face amount is in effect at such time.

ARTICLE 2.

REVOLVING CREDIT FACILITY

SECTION 2.1                                             Revolving Credit Loans.  Subject to the terms and conditions of this Agreement, and in reliance upon the representations and warranties set forth herein, each Lender severally agrees to make Revolving Credit Loans to the Borrowers from time to time from the Closing Date through, but not including, the Revolving Credit Maturity Date as requested by the Administrative Borrower in accordance with the terms of Section 2.3; provided, that (a) the aggregate principal amount of all outstanding Revolving Credit Loans (after giving effect to any amount requested), together with all other Aggregate Revolving Credit Obligations, shall not exceed the Revolving Credit Commitment, (b) the principal amount of outstanding Revolving Credit Loans from any Lender to the Borrowers shall not at any time exceed such Lender’s Revolving Credit Commitment less such Lender’s Revolving Credit Commitment Percentage of outstanding Swingline Loans and L/C Obligations, (c) the aggregate principal amount of all outstanding Revolving Credit Loans (after giving effect to any amount requested), together with all other Aggregate Revolving Credit Obligations, shall not exceed the Borrowing Base and (d) the aggregate principal amount of all outstanding Revolving Credit Loans (after giving effect to any amount requested) made to the Canadian Borrower, together with all other Aggregate Revolving Credit Obligations made to or for the benefit of the Canadian Borrower, shall not exceed the aggregate amount of the applicable percentage of Eligible Accounts and Eligible Inventory of the Canadian Borrower included in the calculation of the Borrowing Base.  Each Revolving Credit Loan by a Lender shall be in a principal amount equal to such Lender’s Revolving Credit Commitment Percentage of the aggregate principal amount of Revolving Credit Loans requested on such occasion.  Subject to the terms and conditions hereof, the Borrowers may borrow, repay and reborrow Revolving Credit Loans hereunder from the Closing Date until the Revolving Credit Maturity Date.

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SECTION 2.2                                             Swingline Loans.

(a)                                 Availability.  Subject to the terms and conditions of this Agreement, the Swingline Lender agrees to make Swingline Loans to the Borrowers from time to time from the Closing Date through, but not including, the Swingline Termination Date; provided, that the aggregate principal amount of all outstanding Swingline Loans (after giving effect to any amount requested), shall not exceed the least of (i) the Revolving Credit Commitment less the sum of all other outstanding Aggregate Revolving Credit Obligations, (ii) the Borrowing Base less the sum of all other outstanding Aggregate Revolving Credit Obligations, and (iii) the Swingline Commitment.

(b)                                 Refunding.

(i)                                     Swingline Loans shall be refunded by the Lenders on demand by the Swingline Lender, which demand shall be made no less frequently than weekly.  Such refundings shall be made by the Lenders in accordance with their respective Revolving Credit Commitment Percentages and shall thereafter be reflected as Revolving Credit Loans of the Lenders on the books and records of the Administrative Agent.  Each Lender shall fund its respective Revolving Credit Commitment Percentage of Revolving Credit Loans as required to repay Swingline Loans outstanding to the Swingline Lender upon demand by the Swingline Lender but in no event later than 12:00 p.m. on the next succeeding Business Day after such demand is made.  No Lender’s obligation to fund its respective Revolving Credit Commitment Percentage of a Swingline Loan shall be affected by any other Lender’s failure to fund its Revolving Credit Commitment Percentage of a Swingline Loan, nor shall any Lender’s Revolving Credit Commitment Percentage be increased as a result of any such failure of any other Lender to fund its Revolving Credit Commitment Percentage of a Swingline Loan.  Each Revolving Credit Loan made in accordance with this Section 2.2(b) shall bear interest as a Base Rate Loan commencing on the date of the refunding of the Swingline Loan to which such Revolving Credit Loan relates.

(ii)                                  The Borrowers shall pay to the Swingline Lender on demand the amount of such Swingline Loans to the extent amounts received from the Lenders are not sufficient to repay in full the outstanding Swingline Loans requested or required to be refunded.  In addition, if the Borrowers have not repaid such outstanding Swingline Loans within one (1) Business Day of such demand by the Swingline Lender, each Borrower hereby authorizes the Administrative Agent to charge any account maintained by any Borrower with the Swingline Lender (up to the amount available therein) in order to immediately pay the Swingline Lender the amount of such Swingline Loans to the extent amounts received from the Lenders are not sufficient to repay in full the outstanding Swingline Loans requested or required to be refunded.  If any portion of any such amount paid to the Swingline Lender shall be recovered by or on behalf of any Borrower from the Swingline Lender in bankruptcy or otherwise, the loss of the amount so recovered shall be ratably shared among all the Lenders in accordance with their respective Revolving Credit Commitment Percentages (unless the amounts so recovered by or on behalf of such Borrower pertain to a Swingline Loan extended after the occurrence and during the continuance of an Event of Default of which the Administrative Agent has received notice in the manner required pursuant to Section 14.5 and which such Event of Default has not been waived by the Required Lenders or the Lenders, as applicable).

(iii)                               Each Lender acknowledges and agrees that its obligation to refund Swingline Loans in accordance with the terms of this Section 2.2(b) is absolute and unconditional and shall not be affected by any circumstance whatsoever, including non-satisfaction of the conditions set forth in Article 7.  Further, each Lender agrees and acknowledges that, if prior to the refunding of any outstanding Swingline Loans pursuant to this Section 2.2, one of the events described in

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Section 13.1(j) or (k) shall have occurred, each Lender will, on the date the applicable Revolving Credit Loan would have been made, be deemed to have purchased an undivided participating interest in the Swingline Loan to be refunded in an amount equal to its Revolving Credit Commitment Percentage of the aggregate amount of such Swingline Loan.  Each Lender will immediately transfer to the Swingline Lender, in immediately available funds, the amount of its participation and upon receipt thereof the Swingline Lender will deliver to such Lender a certificate evidencing such participation dated the date of receipt of such funds and for such amount.  Whenever, at any time after the Swingline Lender has received from any Lender such Lender’s participating interest in a Swingline Loan, the Swingline Lender receives any payment on account thereof, the Swingline Lender will distribute to such Lender its participating interest in such amount (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender’s participating interest was outstanding and funded).

(c)                                  Overadvances; Optional Overadvances.  If at any time the amount of the Aggregate Revolving Credit Obligations exceeds the Revolving Credit Commitment, the Borrowing Base or any other applicable limitation set forth in this Agreement (including the limitations on Swingline Loans, Agent Advances and Letters of Credit), such excess (an “Overadvance”) shall nevertheless constitute a portion of the Obligations that are secured by the Collateral and are entitled to all benefits thereof.  In no event, however, shall the Borrowers have any right whatsoever to (i) receive any Revolving Credit Loan, (ii) receive any Swingline Loan, or (iii) request the issuance of any Letter of Credit if, before or after giving effect thereto, there shall exist a Default or Event of Default.  Notwithstanding any other contrary provision of this Agreement, including Section 7.2, the Lenders hereby authorize the Swingline Lender, at the direction of the Administrative Agent in the Administrative Agent’s Permitted Discretion, and Swingline Lender shall at the direction of the Administrative Agent, knowingly and intentionally, continue to make Swingline Loans to the Borrowers notwithstanding that an Overadvance exists or thereby would be created, so long as (i) the total principal amount of such Overadvances, together with the amount of Agent Advances made pursuant to Section 2.4(a), then outstanding does not exceed an aggregate amount equal to ten percent (10%) of the lesser of (A) the Revolving Credit Commitment and (B) the Borrowing Base, (ii) after giving effect to such Swingline Loans, the outstanding Aggregate Revolving Credit Obligations does not exceed the Revolving Credit Commitment, and (iii) at the time of the making of any such Swingline Loans, the Administrative Agent does not believe, in good faith, that the Overadvance created by such Swingline Loans will be outstanding for more than thirty (30) days; provided, however, that upon written notice to the Administrative Agent, the Required Lenders may at any time revoke the Administrative Agent’s authority to direct the Swingline Lender to continue to make Swingline Loans when an Overadvance exists or would be caused thereby. The foregoing sentence is for the exclusive benefit of the Administrative Agent, the Swingline Lender, and the Lenders and is not intended to benefit the Borrowers in any way.

SECTION 2.3                                             Procedure for Advances of Revolving Credit and Swingline Loans.

(a)                                 Requests for Borrowing.  The Administrative Borrower shall give the Administrative Agent irrevocable prior written notice substantially in the form attached hereto as Exhibit B (a “Notice of Borrowing”) not later than 12:00 noon (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 LIBOR 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 $3,000,000 or a whole multiple of $1,000,000 in excess thereof, (y) with respect to LIBOR Rate Loans, in an aggregate principal amount of $3,000,000 or a whole multiple of $1,000,000 in excess thereof and (z) with respect to Swingline Loans, in an aggregate principal amount of $1,000,000 or a whole multiple of $1,000,000 in excess thereof, (C) whether such Loan is to be a Revolving Credit Loan or Swingline Loan, (D) in the case of a Revolving Credit Loan, whether the Loans

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are to be LIBOR Rate Loans or Base Rate Loans, and (E) in the case of a LIBOR Rate Loan, the duration of the Interest Period applicable thereto.  A Notice of Borrowing received after 12:00 noon shall be deemed received on the next Business Day.  The Administrative Agent shall promptly notify the Lenders of each Notice of Borrowing.

(b)                                 Disbursement of Revolving Credit and Swingline Loans.  Not later than 2:00 p.m. on the proposed borrowing date, (i) each Lender will make available to the Administrative Agent, for the account of the Borrowers, at the office of the Administrative Agent in funds immediately available to the Administrative Agent, such Lender’s Revolving Credit Commitment Percentage of the Revolving Credit 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 Borrowers, 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.  Each Borrower hereby irrevocably authorizes the Administrative Agent to disburse the proceeds of each borrowing requested pursuant to this Section 2.3 in immediately available funds by crediting or wiring such proceeds to the deposit account of the Administrative Borrower or, if such proceeds are to be wired by the Administrative Agent to the Canadian Borrower, to the deposit account of the Canadian Borrower maintained with a commercial bank incorporated under the laws of the United States acceptable to the Administrative Agent, in each case, identified in the most recent notice substantially in the form of Exhibit C (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 6.7, the Administrative Agent shall not be obligated to disburse the portion of the proceeds of any Revolving Credit Loan requested pursuant to this Section 2.3 to the extent that any Lender has not made available to the Administrative Agent its Revolving Credit Commitment Percentage of such Loan.  Revolving Credit Loans to be made for the purpose of refunding Swingline Loans shall be made by the Lenders as provided in Section 2.2(b).  Each of the Borrower Parties hereby acknowledges and agrees that any proceeds of Loans to be disbursed or otherwise delivered to the Canadian Borrower by such Borrower Party or any of its Subsidiaries or Affiliates shall be wired to a deposit account of the Canadian Borrower maintained with a commercial bank incorporated under the laws of the United States.

SECTION 2.4                                             Agent Advances.

(a)                                 Availability.  Subject to the limitations set forth below and notwithstanding anything else in this Agreement to the contrary, the Administrative Agent is authorized by the Borrowers and the Lenders, from time to time in the Administrative Agent’s sole discretion, (i) at any time that a Default exists, or (ii) at any time that any of the other conditions precedent set forth in Section 7.2 have not been satisfied, to make Base Rate Loans to the Borrowers on behalf of the Lenders in an aggregate amount outstanding at any time not to exceed, together with the amount of Overadvances made pursuant to Section 2.2(c) then outstanding, an aggregate amount equal to ten percent (10%) of the lesser of (A) the Revolving Credit Commitment and (B) the Borrowing Base, which the Administrative Agent, in its Permitted Discretion, deems necessary or desirable (A) to preserve or protect the Collateral, or any portion thereof, (B) to enhance the likelihood of, or maximize the amount of, repayment of the Loans and other Obligations, or (C) to pay any other amount chargeable to the Borrowers pursuant to the terms of this Agreement, including costs, fees and expenses as provided under this Agreement (any of such advances are herein referred to as “Agent Advances”).  The Administrative Agent shall promptly provide to the Borrowers written notice of any Agent Advance.  In no event shall the Administrative Agent make an Agent Advance if (i) the Aggregate Revolving Credit Obligations, after giving effect to any Agent Advance, exceed the Revolving Credit Commitment, or (ii) at the time of the making of any such Agent Advance, the Administrative Agent believes, in good faith, that the Agent Advance will be outstanding for more than thirty (30) days. Notwithstanding anything to the contrary contained herein, the Required

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Lenders may at any time revoke the Administrative Agent’s authority to make further Agent Advances by written notice to the Administrative Agent.

(b)                                 Terms.  The Agent Advances shall be secured by the Collateral and shall constitute Obligations hereunder.  Each Agent Advance shall bear interest as a Base Rate Loan.  Each Agent Advance shall be subject to all terms and conditions of this Agreement and the other Loan Documents applicable to Revolving Credit Loans, except that all payments thereon shall be made to the Administrative Agent solely for its own account and the making of any Agent Advance shall not require the consent of the Borrowers.  The Administrative Agent shall have no duty or obligation to make any Agent Advance hereunder.

(c)                                  Refunding.

(i)                                     Agent Advances shall be refunded by the Lenders on demand by the Administrative Agent.  Such refundings shall be made by the Lenders in accordance with their respective Revolving Credit Commitment Percentages and shall thereafter be reflected as Revolving Credit Loans of the Lenders on the books and records of the Administrative Agent.  Each Lender shall fund its respective Revolving Credit Commitment Percentage of Revolving Credit Loans as required to repay Agent Advances outstanding to the Administrative Agent upon demand by the Administrative Agent but in no event later than 12:00 p.m. on the next succeeding Business Day after such demand is made.  No Lender’s obligation to fund its respective Revolving Credit Commitment Percentage of an Agent Advance shall be affected by any other Lender’s failure to fund its Revolving Credit Commitment Percentage of an Agent Advance, nor shall any Lender’s Revolving Credit Commitment Percentage be increased as a result of any such failure of any other Lender to fund its Revolving Credit Commitment Percentage of an Agent Advance.

(ii)                                  The Borrowers shall pay to the Administrative Agent on demand the amount of such Agent Advances to the extent amounts received from the Lenders are not sufficient to repay in full the outstanding Agent Advances requested or required to be refunded.  In addition, if the Borrowers have not repaid such outstanding Agent Advances within one (1) Business Day of such demand by the Administrative Agent, each Borrower hereby authorizes the Administrative Agent to charge any account maintained by any Borrower with the Administrative Agent (up to the amount available therein) in order to immediately pay the Administrative Agent the amount of such Agent Advances to the extent amounts received from the Lenders are not sufficient to repay in full the outstanding Agent Advances requested or required to be refunded.  If any portion of any such amount paid to the Administrative Agent shall be recovered by or on behalf of any Borrower from the Administrative Agent in bankruptcy or otherwise, the loss of the amount so recovered shall be ratably shared among all the Lenders in accordance with their respective Revolving Credit Commitment Percentages. Each Revolving Credit Loan made in accordance with this Section 2.4(c) shall bear interest as a Base Rate Loan commencing on the date of the refunding of the Agent Advance to which such Revolving Credit Loan relates.

(iii)                               Each Lender acknowledges and agrees that its obligation to refund Agent Advances in accordance with the terms of this Section 2.4(c) is absolute and unconditional and shall not be affected by any circumstance whatsoever, including non-satisfaction of the conditions set forth in Article 7.  Further, each Lender agrees and acknowledges that, if prior to the refunding of any outstanding Agent Advances pursuant to this Section 2.4, one of the events described in Section 13.1(j) or (k) shall have occurred, each Lender will, on the date the applicable Revolving Credit Loan would have been made, be deemed to have purchased an undivided participating interest in the Agent Advances to be refunded in an amount equal to its

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Revolving Credit Commitment Percentage of the aggregate amount of such Agent Advance.  Each Lender will immediately transfer to the Administrative Agent, in immediately available funds, the amount of its participation and upon receipt thereof the Administrative Agent will deliver to such Lender a certificate evidencing such participation dated the date of receipt of such funds and for such amount.  Whenever, at any time after the Administrative Agent has received from any Lender such Lender’s participating interest in an Agent Advance, the Administrative Agent receives any payment on account thereof, the Administrative Agent will distribute to such Lender its participating interest in such amount (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender’s participating interest was outstanding and funded).

SECTION 2.5                                             Repayment of Loans.

(a)                                 Repayment on Termination Date.  The Borrowers hereby agree to repay the outstanding principal amount of (i) all Revolving Credit Loans and Agent Advances in full on the Revolving Credit Maturity Date, and (ii) all Swingline Loans in accordance with Section 2.2(b), together, in each case, with all accrued but unpaid interest thereon.

(b)                                 Mandatory Repayment of Revolving Credit Loans.  In the event that (i) the Lenders shall make any Revolving Credit Loans, (ii) the Swingline Lender shall make any Swingline Loan, (iii) the Administrative Agent shall make any Agent Advances or (iv) the Issuing Lender shall issue any Letter of Credit, which, in any such case, gives rise to an Overadvance, the Borrowers shall make, on demand, a payment on the Obligations to be applied to the Revolving Credit Loans, the Swingline Loans, the Agent Advances and as cash collateral for such Letter of Credit, as appropriate, in an aggregate principal amount equal to such Overadvance.

(c)                                  Optional Prepayments.  The Borrowers may at any time and from time to time prepay Revolving Credit Loans and Swingline Loans, in whole or in part, upon at least three (3) Business Days irrevocable prior written notice to the Administrative Agent with respect to LIBOR Rate Loans and same Business Day irrevocable prior written notice with respect to Base Rate Loans and Swingline Loans, specifying the date and amount of prepayment and whether the prepayment is of LIBOR 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 prepayment shall be in an aggregate amount of $1,000,000 or a whole multiple of $1,000,000 in excess thereof with respect to Base Rate Loans, $1,000,000 or a whole multiple of $1,000,000 in excess thereof with respect to LIBOR Rate Loans and $1,000,000 or a whole multiple of $1,000,000 in excess thereof with respect to Swingline Loans.  Each such prepayment shall be accompanied by an amount required to be paid pursuant to Section 6.9.

(d)                                 Limitation on Prepayment of LIBOR Rate Loans.  No Borrower may prepay any LIBOR 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 6.8.

(e)                                  The Other Obligations.  In addition to the foregoing, the Borrowers hereby promise, jointly and severally, to pay all Obligations (other than Obligations in respect of Bank Products), including the principal amount of the Loans, amounts drawn under Letters of Credit and interest and fees on the foregoing, as the same become due and payable hereunder and, in any event, on the Revolving Credit Maturity Date.  In addition to the foregoing, the Borrowers hereby promise, jointly and severally, to pay all Obligations in respect of Bank Products as the same become due and payable under the applicable Bank Products Documents.

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(f)                                   Hedging Agreements.  No repayment or prepayment pursuant to this Section 2.5 shall affect any of the Borrowers’ obligations under any Hedging Agreement.

(g)                                  Payments by the Canadian Borrower.  Any payments made by the Canadian Borrower to the Administrative Agent, directly or indirectly, pursuant to the Loan Documents shall be made from the account of the Canadian Borrower listed in the most recent Notice of Account Designation received by the Administrative Agent pursuant to Section 2.3(b).

SECTION 2.6                                             Permanent Reduction of the Revolving Credit Commitment.

(a)                                 Voluntary Reduction.  The Borrowers shall have the right at any time and from time to time, upon at least ten (10) Business Days irrevocable prior written notice to the Administrative Agent, to permanently reduce, without premium or penalty, the Revolving Credit Commitment, in whole or in part, at any time, in an aggregate principal amount not less than $1,000,000 or any whole multiple of $1,000,000 in excess thereof.  Any reduction of the Revolving Credit Commitment shall be applied to the Revolving Credit Commitment of each Lender according to its Revolving Credit Commitment Percentage.  All commitment fees accrued until the effective date of any termination of the Revolving Credit Commitment shall be paid on the effective date of such termination.

(b)                                 Corresponding Payment.  Each permanent reduction permitted or required pursuant to this Section 2.6 shall be accompanied by a payment of principal sufficient to reduce the Aggregate Revolving Credit Obligations after such reduction to the Revolving Credit Commitment as so reduced and if the Revolving Credit Commitment as so reduced is less than the aggregate amount of all outstanding Letters of Credit, the Borrowers shall be required to deposit cash collateral in a cash collateral account opened by the Administrative Agent in an amount equal to one hundred five percent (105%) of the aggregate then undrawn and unexpired amount of such Letters of Credit.  Such cash collateral shall be applied in accordance with Section 13.2(b).  Any reduction of the Revolving Credit Commitment to zero shall be accompanied by payment of all outstanding Revolving Credit Loans, Agent Advances, Swingline Loans and all other Obligations (other than Bank Products) (and furnishing of cash collateral in an amount equal to one hundred five percent (105%) of the aggregate then undrawn and unexpired Letters of Credit then outstanding) and shall result in the termination of the Revolving Credit Commitment, the L/C Commitment, the Swingline Commitment and the Revolving Credit Facility.  Such cash collateral shall be applied in accordance with Section 13.2(b).  If the reduction of the Revolving Credit Commitment requires the repayment of any LIBOR Rate Loan, such repayment shall be accompanied by any amount required to be paid pursuant to Section 6.8.

SECTION 2.7                                             Additional Increase of Commitments; Additional Lenders.

(a)                                 Increase of Revolving Credit Commitment.

(i)                                     The Administrative Borrower, on behalf of the Borrowers, may request the right to effectuate an increase in the Revolving Credit Commitment (a “Commitment Increase”), in an aggregate amount of up to $25,000,000 (the “Commitment Increase Cap”), once during the term of this Agreement by delivering a Notice of Requested Commitment Increase to Administrative Agent substantially in the form of Exhibit I (a “Notice of Requested Commitment Increase”), provided that: (A) the proposed Commitment Increase shall have been consented to in writing by the Administrative Agent (with such consent not to be unreasonably withheld), each Lender (if any) who is increasing its Revolving Credit Commitment and any other bank or financial institution acceptable to the Parent and the Administrative Agent that has agreed to become a Lender in respect of all or a portion of the Commitment Increase (a “New Lender”); (B) each Lender has been afforded the right to fund the Commitment Increase prior to any New Lender

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being given such right; (C) the Borrowers are in pro forma compliance with all financial covenants set forth in Article 11 prior to, and upon giving effect to, such Commitment Increase; and (D) all conditions to borrowing set forth in Section 7.2 shall be satisfied prior to such Commitment Increase.  The Notice of Requested Commitment Increase shall specify: (1) the amount of the proposed Commitment Increase and (2) the requested date of the proposed Commitment Increase (which shall be at least fifteen (15) days from the date of delivery of the Notice of Requested Commitment Increase).  Each Notice of Requested Commitment Increase shall be binding on all Borrowers.  Upon the effective date of any Commitment Increase, the Administrative Borrower shall deliver to the Administrative Agent a certificate of the chief financial officer of the Parent certifying that no Default or Event of Default then exists or would be caused thereby.  The Commitment Increase shall not be effective until the Administrative Agent shall have received amendments to this Agreement and the other Loan Documents, commitments of Lenders or New Lenders in an aggregate amount equal to the Commitment Increase, Lender Agreements for each Lender or New Lender committing to the Commitment Increase, any upfront fees to be paid to the Lenders committing to the Commitment Increase, and, if requested, opinion letters, Revolving Credit Notes and such other agreements, documents and instruments requested by and reasonably satisfactory to the Administrative Agent in its reasonable discretion evidencing and setting forth the conditions of the Commitment Increase.

(ii)                                  If the Administrative Agent approves a proposed Commitment Increase (with such approval not to be unreasonably withheld), the Administrative Agent shall deliver a copy of the Notice of Requested Commitment Increase relating thereto to each Lender.  No Lender (or any successor thereto) shall have any obligation to increase its Revolving Credit Commitment or its other obligations under this Agreement or the other Loan Documents, and any decision by a Lender to increase its Revolving Credit Commitment shall be made in its sole discretion independently from any other Lender. If the Administrative Agent receives commitments from the Lenders or the New Lenders in excess of the amount of the proposed Commitment Increase, the Administrative Agent shall have the right, in its sole discretion, to reduce and reallocate (within the minimum and maximum amounts specified by each such Lender or New Lender in its notice to the Administrative Agent) the shares of the Commitment Increase of the Lenders or New Lenders willing to fund the proposed Commitment Increase so that the total committed shares of the proposed Commitment Increase equals the proposed Commitment Increase. The Administrative Agent shall notify each Lender or New Lender, as the case may be, whether its proposed share of the Commitment Increase has been accepted and, if so, the amount of its share of the Commitment Increase, and such Lender shall thereafter execute and deliver a Lender Agreement with respect to its respective share of the Commitment Increase.

(iii)                               Notwithstanding anything to the contrary contained herein, each Commitment Increase meeting the conditions set forth in Section 2.7(a)(i) shall not require the consent of any Lender other than those Lenders, if any, which have agreed to increase their Revolving Credit Commitments in connection with the Commitment Increase and shall not constitute an amendment, modification or waiver subject to Section 15.11 and shall be effective as of the later of (a) the date specified in the applicable Notice of Requested Commitment Increase and (b) the date upon which the foregoing conditions shall have been satisfied or waived by the Administrative Agent and the Lenders which have agreed to increase their Revolving Credit Commitments, or by the requisite Lenders in accordance with Section 15.11 in the case of a waiver of an Event of Default, as applicable.

(b)                                 Effect of Commitment Increase.  After giving effect to any Commitment Increase, the outstanding Revolving Credit Loans may not be held pro rata in accordance with the new Revolving Credit Commitment.  In order to remedy the foregoing, on the effective date of each Commitment

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Increase, the Lenders (including any New Lenders) shall reallocate the Revolving Credit Loans owed to them among themselves so that, after giving effect thereto, the Revolving Credit Loans will be held by the Lenders (including any New Lenders) on a pro rata basis in accordance with their respective Revolving Credit Commitment Percentages hereunder (after giving effect to such Commitment Increase).  Each Lender agrees to wire immediately available funds to the Administrative Agent in accordance with this Agreement as may be required by Administrative Agent in connection with the foregoing.  Notwithstanding the provisions of Section 15.9, the reallocations so made by each Lender whose Revolving Credit Commitment Percentage has increased shall be deemed to be a purchase of a corresponding amount of the Revolving Credit Loans of the Lender or Lenders whose Revolving Credit Commitment Percentage have decreased and shall not be considered an assignment for purposes of Section 15.9.

SECTION 2.8                                             Termination of Revolving Credit Facility.  The Revolving Credit Facility shall terminate on the Revolving Credit Maturity Date.

ARTICLE 3.

LETTER OF CREDIT FACILITY

SECTION 3.1                                             L/C Commitment.

(a)                                 Subject to the terms and conditions hereof, the Issuing Lender, in reliance on the agreements of the other Lenders set forth in Section 3.4(a), agrees to issue Letters of Credit for the account of the Borrowers on any Business Day from the Closing Date through but not including the Revolving Credit Maturity Date in such form as may be approved from time to time by the Issuing Lender; provided, that the Issuing Lender shall have no obligation to issue any Letter of Credit if, after giving effect to such issuance, (a) the L/C Obligations would exceed the L/C Commitment or (b) the outstanding Aggregate Revolving Credit Obligations would exceed the lesser of (x) the Revolving Credit Commitment and (y) the Borrowing Base.  Each Letter of Credit shall (i) be denominated in Dollars in a minimum amount of $25,000, (ii) be issued to support obligations of any Borrower or any of their Subsidiaries, contingent or otherwise, incurred in the ordinary course of business, (iii) expire on a date satisfactory to the Issuing Lender, which date shall be no later than the earlier of (A) one year from the date of issuance of such Letter of Credit (subject to automatic renewals of Letters of Credit issued by Wells Fargo Bank so long as such renewal periods terminate no later than the fifth Business Day prior to the Revolving Credit Maturity Date) and (B) the fifth Business Day prior to the Revolving Credit Maturity Date and (iv) be subject to the ISP or Uniform Customs, as set forth in the applicable Application or as determined by the Issuing Lender and, to the extent not inconsistent therewith, the laws of the State of North Carolina.

(b)                                 In the event there is a Defaulting Lender as of the date of any request for the issuance of a Letter of Credit, the Issuing Lender shall not at any time be obligated to issue or arrange for such Letter of Credit to the extent that (x) the Defaulting Lender’s Letter of Credit Revolver Credit Commitment Percentage with respect to such Letter of Credit is not reallocated to the other Lenders or (y) the Issuing Lender has not otherwise entered into arrangements reasonably satisfactory to it and Borrowers to eliminate the Issuing Lender’s risk with respect to the participation in such Letter of Credit of the Defaulting Lender, which arrangements may include Borrowers cash collateralizing such Defaulting Lender’s Letter of Credit Revolver Credit Commitment Percentage. Additionally, Issuing Lender shall have no obligation to issue a Letter of Credit if (A) such issuance would conflict with, or cause the Issuing Lender or any Lender to exceed any limits imposed by any Applicable Law, (B) any order, judgment, or decree of any Governmental Authority or arbitrator shall, by its terms, purport to enjoin or restrain Issuing Lender from issuing such Letter of Credit, or any law applicable to Issuing Lender or any

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request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over Issuing Lender shall prohibit or request that Issuing Lender refrain from the issuance of letters of credit generally or such Letter of Credit in particular, (C) the issuance of such Letter of Credit would violate one or more policies of Issuing Lender applicable to letters of credit generally, or (D) if amounts demanded to be paid under any Letter of Credit will or may not be in Dollars. References herein to “issue” and derivations thereof with respect to Letters of Credit shall also include extensions or modifications of any existing Letters of Credit, unless the context otherwise requires.

SECTION 3.2                                             Procedure for Issuance of Letters of Credit.  The Administrative Borrower may from time to time after the Closing Date request that the Issuing Lender issue a Letter of Credit by delivering to the Issuing Lender at the Administrative Agent’s Office a  written request and an Application therefor, completed to the satisfaction of the Issuing Lender. Each request for the issuance of a Letter of Credit, or the amendment, renewal, or extension of any outstanding Letter of Credit, shall be made in writing by the Administrative Borrower and delivered to Issuing Lender via hand delivery, telefacsimile, or other electronic method of transmission reasonably in advance of the requested date of issuance, amendment, renewal, or extension.  Each such request shall be in form and substance reasonably satisfactory to Issuing Lender and (i) shall specify (A) the amount of such Letter of Credit, (B) the date of issuance, amendment, renewal, or extension of such Letter of Credit, (C) the proposed expiration date of such Letter of Credit, (D) the name and address of the beneficiary of the Letter of Credit, and (E) such other information (including, the conditions to drawing, and, in the case of an amendment, renewal, or extension, identification of the Letter of Credit to be so amended, renewed, or extended) as shall be necessary to prepare, amend, renew, or extend such Letter of Credit, and (ii) shall be accompanied by such Issuer Documents as Administrative Agent or Issuing Lender may request or require, to the extent that such requests or requirements are consistent with the Issuer Documents that Issuing Lender generally requests for Letters of Credit in similar circumstances.  Anything contained herein to the contrary notwithstanding, Issuing Lender may, but shall not be obligated to, issue or cause the issuance of a Letter of Credit that supports the obligations of Borrowers or one of their Subsidiaries in respect of (A) a lease of real property, or (B) an employment contract.  Upon receipt of any written request for the issuance of a Letter of Credit and Application, the Issuing Lender shall process such Application and other Issuer Documents in connection therewith in accordance with its customary procedures and shall, subject to Section 3.1 and Article 7, promptly issue the Letter of Credit requested thereby (but in no event shall the Issuing Lender be required to issue any Letter of Credit earlier than three (3) Business Days after its receipt of the Application therefor and all such other certificates, documents and other papers and information relating thereto) by issuing the original of such Letter of Credit to the beneficiary thereof or as otherwise may be agreed by the Issuing Lender and the Administrative Borrower.  The Issuing Lender shall promptly furnish to the Administrative Borrower a copy of such Letter of Credit and promptly notify each Lender of the issuance and, upon request by any Lender, furnish to such Lender a copy of such Letter of Credit and the amount of such Lender’s Letter of Credit participation therein. The Issuing Lender, if other than Wells Fargo Bank or any of its Affiliates,  shall also notify Administrative Agent in writing no later than the Business Day immediately following the Business Day on which such Issuing Lender issued any Letter of Credit; provided that (i) until Administrative Agent advises any such Issuing Lender that the provisions of Section 7.2 are not satisfied, or (ii) unless the aggregate amount of the Letters of Credit issued in any such week exceeds such amount as shall be agreed by Administrative Agent and such Issuing Lender, such Issuing Lender shall be required to so notify Administrative Agent in writing only once each week of the Letters of Credit issued by such Issuing Lender during the immediately preceding week as well as the daily amounts outstanding for the prior week, such notice to be furnished on such day of the week as Administrative Agent and such Issuing Lender may agree.

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SECTION 3.3                                             Commissions and Other Charges.

(a)                                 Letter of Credit Commission.  The Borrowers shall pay to the Administrative Agent, for the account of the Lenders, in accordance with their respective Revolving Credit Commitment Percentages, a letter of credit commission with respect to each Letter of Credit in an amount equal to the Applicable Margin with respect to LIBOR Rate Loans for the Revolving Credit Facility (determined on a per annum basis) multiplied by the average daily amount of such Lender’s L/C Obligations during the period from and including the date of the issuance of such Letter of Credit to but excluding the date on which such Letter of Credit has expired or is terminated.  Such commission shall be payable monthly in arrears on the last Business Day of each calendar month and on the Revolving Credit Maturity Date and thereafter on demand of the Administrative Agent.  The Administrative Agent shall, promptly following its receipt thereof, distribute to the Lenders all commissions received pursuant to this Section 3.3(a) in accordance with their respective Revolving Credit Commitment Percentages.

(b)                                 Issuance Fee.  In addition to the foregoing commission, the Borrowers shall pay the Issuing Lender an issuance fee with respect to each Letter of Credit in an amount equal to the average daily amount of such Lender’s L/C Obligations during the period from and including the date of the issuance of such Letter of Credit to but excluding the date on which such Letter of Credit has expired or is terminated multiplied by 0.15% per annum.  Such issuance fee shall be payable monthly in arrears on the last Business Day of each calendar month and on the Revolving Credit Maturity Date and thereafter on demand of the Administrative Agent.

(c)                                  Other Costs.  (i) In addition to the foregoing fees and commissions, the Borrowers shall pay or reimburse the Issuing Lender for such normal and customary costs and expenses as are incurred or charged by the Issuing Lender in issuing, effecting payment under, amending or otherwise administering any Letter of Credit.

(ii) If by reason of (x) any change after the Closing Date in any applicable law, treaty, rule, or regulation or any change in the interpretation or application thereof by any Governmental Authority, or (y) compliance by Issuing Lender or any other member of the Lender Group, with any direction, request, or requirement (irrespective of whether having the force of law) of any Governmental Authority or monetary authority including, Regulation D of the Board of Governors as from time to time in effect (and any successor thereto):

(A)                               any reserve, deposit, or similar requirement is or shall be imposed or modified in respect of any Letter of Credit issued or caused to be issued hereunder or hereby, or

(B)                               there shall be imposed on Issuing Lender or any other member of the Lender Group any other condition regarding any Letter of Credit,

and the result of the foregoing is to increase, directly or indirectly, the cost to Issuing Lender or any other member of the Lender Group of issuing, making, participating in, or maintaining any Letter of Credit or to reduce the amount receivable in respect thereof, then, and in any such case, Administrative Agent may, at any time within a reasonable period after the additional cost is incurred or the amount received is reduced, notify Borrowers, and Borrowers shall pay within 30 days after demand therefor, such amounts as Administrative Agent may specify to be necessary to compensate Issuing Lender or any other member of the Lender Group for such additional cost or reduced receipt, together with interest on such amount from the date of such demand until payment in full thereof at the rate then applicable to a Revolving Credit Loan bearing interest at the Base Rate hereunder; provided, that (A) Borrowers shall not be required to provide any compensation pursuant to this Section 3.3(c)(ii) for any such amounts incurred more than 180 days prior to the date on which the demand for payment of such amounts is first made to

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Borrowers, and (B) if an event or circumstance giving rise to such amounts is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof.  The determination by Administrative Agent of any amount due pursuant to this Section 3.3(c)(ii) as set forth in a certificate setting forth the calculation thereof in reasonable detail, shall, in the absence of manifest or demonstrable error, be final and conclusive and binding on all of the parties hereto.

SECTION 3.4                                             L/C Participations.

(a)                                 Participations.  The Issuing Lender irrevocably agrees to grant and hereby grants to each Lender, and, to induce the Issuing Lender to issue Letters of Credit hereunder, each Lender irrevocably agrees to accept and purchase and hereby accepts and purchases from the Issuing Lender, on the terms and conditions hereinafter stated, for such Lender’s own account and risk an undivided interest equal to such Lender’s Revolving Credit Commitment Percentage in the Issuing Lender’s obligations and rights under and in respect of each Letter of Credit issued hereunder and the amount of each draft paid by the Issuing Lender thereunder.  Each Lender unconditionally and irrevocably agrees with the Issuing Lender that, if a draft is paid under any Letter of Credit for which the Issuing Lender is not reimbursed in full by the Borrowers through a Revolving Credit Loan or otherwise in accordance with the terms of this Agreement, such Lender shall pay to the Issuing Lender upon demand at the Issuing Lender’s address for notices specified herein an amount equal to such Lender’s Revolving Credit Commitment Percentage of the amount of such draft, or any part thereof, which is not so reimbursed.

(b)                                 Payments by Lenders.  Upon becoming aware of any amount required to be paid by any Lender to the Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed portion of any payment made by the Issuing Lender under any Letter of Credit, the Issuing Lender shall notify each Lender of the amount and due date of such required payment and such Lender shall pay to the Issuing Lender the amount specified on the applicable due date.  If any such amount is paid to the Issuing Lender after the date such payment is due, such Lender shall pay to the Issuing Lender on demand, in addition to such amount, the product of (i) such amount, multiplied by (ii) the daily average Federal Funds Rate as determined by the Administrative Agent during the period from and including the date such payment is due to the date on which such payment is immediately available to the Issuing Lender, multiplied by (iii) a fraction the numerator of which is the number of days that elapse during such period and the denominator of which is three hundred sixty (360).  A certificate of the Issuing Lender with respect to any amounts owing under this Section 3.4(b) shall be conclusive in the absence of manifest error.  With respect to payment to the Issuing Lender of the unreimbursed amounts described in this Section 3.4(b), if the Lenders receive notice that any such payment is due (A) prior to 1:00 p.m. on any Business Day, such payment shall be due that Business Day, and (B) after 1:00 p.m. on any Business Day, such payment shall be due on the following Business Day.

(c)                                  Distributions to Lenders.  Whenever, at any time after the Issuing Lender has made payment under any Letter of Credit and has received from any Lender its Revolving Credit Commitment Percentage of such payment in accordance with this Section 3.4, the Issuing Lender receives any payment related to such Letter of Credit (whether directly from any Borrower or otherwise), or any payment of interest on account thereof, the Issuing Lender will distribute to such Lender its pro rata share thereof; provided, that in the event that any such payment received by the Issuing Lender shall be required to be returned by the Issuing Lender, such Lender shall return to the Issuing Lender the portion thereof previously distributed by the Issuing Lender to it.

SECTION 3.5                                             Reimbursement Obligation of the Borrowers.  In the event of any drawing under any Letter of Credit, each Borrower agrees to immediately reimburse the Issuing Lender for amounts paid by the Issuing Lender in respect of draws under each Letter of Credit.  In order to facilitate such repayment, each Borrower hereby irrevocably requests that the Lenders make, and the Lenders

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hereby severally agree to make, on the terms and conditions of this Agreement (other than as provided in Articles 2 and 6 with respect to the amounts of, the timing and form of requests for, and the repayment of, Revolving Credit Loans hereunder and in Section 7.2 with respect to conditions precedent to Revolving Credit Loans hereunder), with respect to any drawing under a Letter of Credit, a Revolving Credit Loan bearing interest at the Base Rate commencing on the day on which any drawing is made under any Letter of Credit and in the aggregate amount of such drawing plus any amounts referred to in Section 3.3(c) incurred by the Issuing Lender in connection with such draw, the proceeds of which shall be applied to reimburse the Issuing Lender for the amount of the related drawing and costs and expenses. Each Lender acknowledges and agrees that its obligation to fund a Revolving Credit Loan in accordance with this Section 3.5 to reimburse the Issuing Lender for any draft paid under a Letter of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including non-satisfaction of the conditions set forth in Section 2.3(a) or Article 7.

SECTION 3.6                                             Limited Liability.

(a)                                 The liability of Issuing Lender (or any other Letter of Credit Related Person) under, in connection with or arising out of any Letter of Credit (or pre-advice), regardless of the form or legal grounds of the action or proceeding, shall be limited to direct damages suffered by Borrowers that are caused directly by Issuing Lender’s gross negligence, willful misconduct or bad faith, as determined by a court of competent jurisdiction by final and non-appealable judgment.  Issuing Lender shall be deemed to have acted with due diligence and reasonable care if Issuing Lender’s conduct is in accordance with Standard Letter of Credit Practice or in accordance with this Agreement.

(b)                                 Borrowers are responsible for preparing or approving the final text of the Letter of Credit as issued by Issuing Lender, irrespective of any assistance Issuing Lender may provide such as drafting or recommending text or by Issuing Lender’s use or refusal to use text submitted by Borrowers.  Borrowers are solely responsible for the suitability of the Letter of Credit for Borrowers’ purposes.  With respect to any Letter of Credit containing an “automatic amendment” to extend the expiration date of such Letter of Credit, Issuing Lender, in its sole and absolute discretion, may give notice of nonrenewal of such Letter of Credit and, if Borrowers do not at any time want such Letter of Credit to be renewed, Borrowers will so notify Administrative Agent and Issuing Lender at least 15 calendar days before Issuing Lender is required to notify the beneficiary of such Letter of Credit or any advising bank of such nonrenewal pursuant to the terms of such Letter of Credit.

SECTION 3.7                                             Obligations Absolute.

(a)                                 The Borrowers’ obligations under this Article 3 (including the Reimbursement Obligation) shall be absolute and unconditional under any and all circumstances and irrespective of any set-off, counterclaim or defense to payment which any Borrower may have or have had against the Issuing Lender or any beneficiary of a Letter of Credit or any other Person.  Each Borrower also agrees that the Issuing Lender and the Lenders shall not be responsible for, and each Borrower’s Reimbursement Obligation under Section 3.5 shall not be affected by, among other things, the validity or genuineness of documents or of any endorsements thereon, even though such documents shall in fact prove to be invalid, fraudulent or forged, or any dispute between or among any Borrower and any beneficiary of any Letter of Credit or any other party to which such Letter of Credit may be transferred or any claims whatsoever of any Borrower against any beneficiary of such Letter of Credit or any such transferee.  Each Borrower agrees that any action taken or omitted by the Issuing Lender under or in connection with any Letter of Credit or the related drafts or documents, if done in the absence of gross negligence, willful misconduct, or bad faith, as determined by a court of competent jurisdiction by final and non-appealable judgment, shall be binding on the Borrowers and shall not result in any liability of the Issuing Lender or any Lender to any Borrower.  The responsibility of the Issuing Lender to any Borrower in connection with any draft

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presented for payment under any Letter of Credit shall, in addition to any payment obligation expressly provided for in such Letter of Credit, be limited to determining that the documents (including each draft) delivered under such Letter of Credit in connection with such presentment are in conformity with such Letter of Credit.

(b)                                 Notwithstanding anything in this Agreement to the contrary and without limiting any other provision of this Agreement, so long as Issuing Lender’s conduct is in accordance with Standard Letter of Credit Practice, Issuing Lender and each other Letter of Credit Related Person (if applicable) shall not be responsible to Borrowers for, and Issuing Lender’s rights and remedies against Borrowers and Borrower’s Reimbursement Obligation under Section 3.5 for each drawing under each Letter of Credit shall not be impaired by:

(i)                                     honor of a presentation under any Letter of Credit that on its face substantially complies with the terms and conditions of such Letter of Credit, even if the Letter of Credit requires strict compliance by the beneficiary;

(ii)                                  honor of a presentation of any Drawing Document that appears on its face to have been signed, presented or issued (A) by any purported successor or transferee of any beneficiary or other Person required to sign, present or issue such Drawing Document or (B) under a new name of the beneficiary;

(iii)                               acceptance as a draft of any written or electronic demand or request for payment under a Letter of Credit, even if nonnegotiable or not in the form of a draft or notwithstanding any requirement that such draft, demand or request bear any or adequate reference to the Letter of Credit;

(iv)                              the identity or authority of any presenter or signer of any Drawing Document or the form, accuracy, genuineness or legal effect of any Drawing Document (other than Issuing Lender’s determination that such Drawing Document appears on its face substantially to comply with the terms and conditions of the Letter of Credit) even though such documents shall in fact prove to be invalid, fraudulent or forged;

(v)                                 acting upon any instruction or request relative to a Letter of Credit or requested Letter of Credit that Issuing Lender in good faith believes to have been given by a Person authorized to give such instruction or request;

(vi)                              any errors, omissions, interruptions or delays in transmission or delivery of any message, advice or document (regardless of how sent or transmitted) or for errors in interpretation of technical terms or in translation or any delay in giving or failing to give notice to Borrowers;

(vii)                           any acts, omissions or fraud by, or the insolvency of, any beneficiary, any nominated person or entity or any other Person or any breach of contract or other dispute between any beneficiary and any Borrower or any of the parties to the underlying transaction to which the Letter of Credit relates or any claims whatsoever of any Borrower against any beneficiary of such Letter of Credit or any such other party to the underlying transaction;

(viii)                        assertion or waiver of any provision of the ISP or Uniform Customs that primarily benefits an issuer of a letter of credit, including any requirement that any Drawing Document be presented to it at a particular hour or place;

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(ix)                              payment to any paying or negotiating bank (designated or permitted by the terms of the applicable Letter of Credit) claiming that it rightfully honored or is entitled to reimbursement or indemnity under Standard Letter of Credit Practice applicable to it;

(x)                                 acting or failing to act as required or permitted under Standard Letter of Credit Practice applicable to where Issuing Lender has issued, confirmed, advised or negotiated such Letter of Credit, as the case may be;

(xi)                              honor of a presentation after the expiration date of any Letter of Credit notwithstanding that a presentation was made prior to such expiration date and dishonored by Issuing Lender if subsequently Issuing Lender or any court or other finder of fact determines such presentation should have been honored;

(xii)                           dishonor of any presentation that does not strictly comply or that is fraudulent, forged or otherwise not entitled to honor; or

(xiii)                        honor of a presentation that is subsequently determined by Issuing Lender to have been made in violation of international, federal, state or local restrictions on the transaction of business with certain prohibited Persons.

SECTION 3.8                                             Effect of Application.  To the extent that any provision of any Application related to any Letter of Credit is inconsistent with the provisions of this Article 3, the provisions of this Article 3 shall apply.

ARTICLE 4.

JOINT AND SEVERAL LIABILITY OF THE BORROWERS

SECTION 4.1                                             Joint and Several Obligations.  (a)  All Obligations shall constitute joint and several obligations of the Borrowers and shall be secured by the Administrative Agent’s security interest (on behalf of the Lender Group) and Lien upon all of the Collateral, and by all other security interests and Liens heretofore, now or at any time hereafter granted by each Borrower to the Lender Group, or any of them, to the extent provided in the Security Documents under which such Lien arises.  Each Borrower expressly represents and acknowledges that it is part of a common enterprise with the other Borrowers and that any financial accommodations by the Lender Group, or any of them, to any other Borrower hereunder and under the other Loan Documents are and will be of direct and indirect interest, benefit and advantage to all Borrowers.  Each Borrower acknowledges that any Notice of Borrowing, Notice of Conversion/Continuation or other notice given by any Borrower to the Administrative Agent or any Lender shall bind all Borrowers, and that any notice given by the Administrative Agent or any Lender to any Borrower shall be effective with respect to all Borrowers.  Each Borrower acknowledges and agrees that each Borrower shall be liable, on a joint and several basis, for all of the Loans and other Obligations, regardless of which Borrower actually may have received the proceeds of any of the Loans or other extensions of credit or the amount of such Loans or other extensions of credit received or the manner in which the Administrative Agent or any Lender accounts among the Borrowers for such Loans or other Obligations on its books and records, and further acknowledges and agrees that Loans and other extensions of credit to any Borrower inure to the mutual benefit of all of the Borrowers and that the Lender Group is relying on the joint and several liability of the Borrowers in extending the Loans and other financial accommodations under the Loan Documents and Bank Products Documents.

(b)                                 Each Borrower shall be entitled to subrogation and contribution rights from and against the other Borrowers to the extent such Borrower is required to pay to the Lender Group any amount in

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excess of the Loans advanced directly to, or other Obligations incurred directly by, such Borrower or as otherwise available under Applicable Law; provided, however, that such subrogation and contribution rights are and shall be subject to the terms and conditions of Sections 4.1(c) through 4.1(g).

(c)                                  It is the intent of the Borrowers and the Lender Group and any other Person holding any of the Obligations that each Borrower’s maximum obligations hereunder (such Borrower’s “Maximum Borrower Liability”) in any case or proceeding referred to below (but only in such a case or proceeding) shall not be in excess of:

(i)                                     in a case or proceeding commenced by or against such Borrower under the Bankruptcy Code on or within one (1) year from the date on which any of the Obligations of such Borrower are incurred, the maximum amount that would not otherwise cause the Obligations of such Borrower hereunder (or any other Obligations of such Borrower to the Lender Group and any other Person holding any of the Obligations) to be avoidable or unenforceable against such Borrower under (A) Section 548 of the United States Bankruptcy Code (11 U.S.C. Section 101 et seq.) or such equivalent section under a Bankruptcy Code or (B) any state fraudulent transfer or fraudulent conveyance act or statute applied in such case or proceeding by virtue of Section 544 of the United States Bankruptcy Code (11 U.S.C. Section 101 et seq.) or such equivalent section under a Bankruptcy Code; or

(ii)                                  in a case or proceeding commenced by or against such Borrower under the Bankruptcy Code subsequent to one (1) year from the date on which any of the Obligations of such Borrower are incurred, the maximum amount that would not otherwise cause the Obligations of such Borrower hereunder (or any other Obligations of such Borrower to the Lender Group and any other Person holding any of the Obligations) to be avoidable or unenforceable against such Borrower under any state fraudulent transfer or fraudulent conveyance act or statute applied in any such case or proceeding by virtue of Section 544 of the United States Bankruptcy Code (11 U.S.C. Section 101 et seq.) or such equivalent section under a Bankruptcy Code; or

(iii)                               in a case or proceeding commenced by or against such Borrower under any law, statute or regulation other than the Bankruptcy Code relating to dissolution, liquidation, conservatorship, bankruptcy, moratorium, readjustment of debt, compromise, rearrangement, receivership, insolvency, reorganization or similar debtor relief from time to time in effect affecting the rights of creditors generally (collectively, “Other Debtor Relief Law”), the maximum amount that would not otherwise cause the Obligations of such Borrower hereunder (or any other Obligations of such Borrower to the Lender Group and any other Person holding any of the Obligations) to be avoidable or unenforceable against such Borrower under such Other Debtor Relief Law, including any state fraudulent transfer or fraudulent conveyance act or statute applied in any such case or proceeding.  (The substantive state, provincial or federal (United States or Canada) laws under which the possible avoidance or unenforceability of the Obligations of any Borrower hereunder (or any other Obligations of such Borrower to the Lender Group and any other Person holding any of the Obligations) shall be determined in any such case or proceeding shall hereinafter be referred to as the “Avoidance Provisions”).

Notwithstanding the foregoing, no provision of this Section 4.1(c) shall limit any Borrower’s liability for Loans advanced directly or indirectly to it, or Letters of Credit issued directly or indirectly for its benefit, under this Agreement.

(d)                                 To the extent set forth in Section 4.1(c), but only to the extent that the Obligations of any Borrower hereunder, or the transfers made by such Borrower under any Security Document, would otherwise be subject to avoidance under any Avoidance Provisions if such Borrower is not deemed to

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have received valuable consideration, fair value, fair consideration or reasonably equivalent value for such transfers or obligations, or if such transfers or obligations of any Borrower hereunder would render such Borrower insolvent, or leave such Borrower with an unreasonably small capital or unreasonably small assets to conduct its business, or cause such Borrower to have incurred debts (or to have intended to have incurred debts) beyond its ability to pay such debts as they mature, in each case as of the time any of the obligations of such Borrower are deemed to have been incurred and transfers made under such Avoidance Provisions, then the obligations of such Borrower hereunder shall be reduced to that amount which, after giving effect thereto, would not cause the Obligations of such Borrower hereunder (or any other Obligations of such Borrower to the Lender Group or any other Person holding any of the Obligations), as so reduced, to be subject to avoidance under such Avoidance Provisions.  This Section 4.1(d) is intended solely to preserve the rights hereunder of the Lender Group and any other Person holding any of the Obligations to the maximum extent that would not cause the obligations of the Borrowers hereunder to be subject to avoidance under any Avoidance Provisions, and none of the Borrowers nor any other Person shall have any right, defense, offset, or claim under this Section 4.1(d) as against the Lender Group or any other Person holding any of the Obligations that would not otherwise be available to such Person under the Avoidance Provisions.

(e)                                  Each Borrower agrees that the Obligations may at any time and from time to time exceed the Maximum Borrower Liability of such Borrower, and may exceed the aggregate Maximum Borrower Liability of all Borrowers hereunder, without impairing this Agreement or any provision contained herein or affecting the rights and remedies of the Lender Group hereunder.

(f)                                   In the event any Borrower (a “Funding Borrower”) shall make any payment or payments under this Agreement or shall suffer any loss as a result of any realization upon any collateral granted by it to secure its obligations hereunder, each other Borrower (each, a “Contributing Borrower”) shall contribute to such Funding Borrower an amount equal to such payment or payments made, or losses suffered, by such Funding Borrower determined as of the date on which such payment or loss was made multiplied by the ratio of (i) the Maximum Borrower Liability of such Contributing Borrower (without giving effect to any right to receive any contribution or other obligation to make any contribution hereunder), to (ii) the aggregate Maximum Borrower Liability of all Borrowers (including the Funding Borrowers) hereunder (without giving effect to any right to receive, or obligation to make, any contribution hereunder).  Nothing in this Section 4.1(f) shall affect any Borrower’s joint and several liability to the Lender Group for the entire amount of its Obligations.  Each Borrower covenants and agrees that its right to receive any contribution hereunder from a Contributing Borrower shall be subordinate and junior in right of payment to all obligations of the Borrowers to the Lender Group hereunder.

(g)                                  No Borrower will exercise any rights which it may acquire by way of subrogation hereunder or under any other Loan Document or Bank Products Documents or at law by any payment made hereunder or otherwise, nor shall any Borrower seek or be entitled to seek any contribution or reimbursement from any other Borrower in respect of payments made by such Borrower hereunder or under any other Loan Document or Bank Products Documents, until all amounts owing to the Lender Group on account of the Obligations are paid in full in cash.  If any amounts shall be paid to any Borrower on account of such subrogation or contribution rights at any time when all of the Obligations shall not have been paid in full, such amount shall be held by such Borrower in trust for the Lender Group, segregated from other funds of such Borrower, and shall, forthwith upon receipt by such Borrower, be turned over to the Administrative Agent in the exact form received by such Borrower (duly endorsed by such Borrower to the Administrative Agent, if required), to be applied against the Obligations, whether matured or unmatured, as provided for herein.

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(h)                                 Canadian Borrower.  Notwithstanding anything in this Agreement or any other Loan Document to the contrary, so long as (a) the Canadian Borrower is a CFC, (b) Section 956 of the Code is in effect and (c) a guaranty by the Canadian Borrower of, or joint and several liability of the Canadian Borrower with respect to, all of the Obligations would result in a deemed distribution of the “earnings and profits” of the Canadian Borrower to the Parent under Section 956 of the Code, the Obligations of the Canadian Borrower under this Article 4 shall be limited to the Canadian Obligations; provided that, anything to the contrary contained in the foregoing notwithstanding, the Obligations guaranteed by the Canadian Borrower shall exclude any Excluded Swap Obligation.

ARTICLE 5.

GUARANTY

SECTION 5.1                                             Guaranty.

(a)                                 Each Subsidiary Guarantor hereby guarantees to the Administrative Agent, for the benefit of the Secured Parties, the full and prompt payment of the Obligations, including any interest therein (including interest as provided in this Agreement, accruing after the filing of a petition initiating any insolvency proceedings, whether or not such interest accrues or is recoverable against the Borrowers after the filing of such petition for purposes of the Bankruptcy Code or is an allowed claim in such proceeding), plus reasonable attorneys’ fees and expenses if the obligations represented by the guaranty set forth in this Article 5 (this “Guaranty”) are collected by law, through an attorney-at-law, or under advice therefrom; provided that, anything to the contrary contained in the foregoing notwithstanding, the Obligations guaranteed by any Subsidiary Guarantor shall exclude any Excluded Swap Obligation.

(b)                                 Regardless of whether any proposed guarantor or any other Person shall become in any other way responsible to the Lender Group, or any of them, for or in respect of the Obligations or any part thereof, and regardless of whether or not any Person now or hereafter responsible to the Lender Group, or any of them, for the Obligations or any part thereof, whether under this Guaranty or otherwise, shall cease to be so liable, each Subsidiary Guarantor hereby declares and agrees that this Guaranty shall be a joint and several obligation, shall be a continuing guaranty and shall be operative and binding until the Obligations (other than Excluded Swap Obligations) shall have been indefeasibly paid in full in cash (or in the case of L/C Obligations, secured through delivery of cash collateral in an amount equal to one hundred and five percent (105%) of the L/C Obligations) and the Revolving Credit Commitment shall have been terminated.

(c)                                  Each Subsidiary Guarantor absolutely, unconditionally and irrevocably waives any and all right to assert any defense (other than the defense of payment in cash in full, to the extent of its obligations hereunder, or a defense that such Subsidiary Guarantor’s liability is limited as provided in Section 5.1(g)), set-off, counterclaim or cross-claim of any nature whatsoever with respect to this Guaranty or the obligations of the Subsidiary Guarantors under this Guaranty or the obligations of any other Person or party (including the Borrowers) relating to this Guaranty or the obligations of any of the Subsidiary Guarantors under this Guaranty or otherwise with respect to the Obligations in any action or proceeding brought by the Administrative Agent or any other member of the Lender Group to collect the Obligations or any portion thereof, or to enforce the obligations of any of the Subsidiary Guarantors under this Guaranty.

(d)                                 The Lender Group, or any of them, may from time to time, without exonerating or releasing any Subsidiary Guarantor in any way under this Guaranty, (i) take such further or other security or securities for the Obligations or any part thereof as they may deem proper, or (ii) release, discharge, abandon or otherwise deal with or fail to deal with any Subsidiary Guarantor of the Obligations or any

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security or securities therefor or any part thereof now or hereafter held by the Lender Group, or any of them, or (iii) amend, modify, extend, accelerate or waive in any manner any of the provisions, terms, or conditions of the Loan Documents, all as they may consider expedient or appropriate in their sole discretion.  Without limiting the generality of the foregoing, or of Section 5.1(e), it is understood that the Lender Group, or any of them, may, without exonerating or releasing any Subsidiary Guarantor, give up, modify or abstain from perfecting or taking advantage of any security for the Obligations and accept or make any compositions or arrangements, and realize upon any security for the Obligations when, and in such manner, and with or without notice, all as such Person may deem expedient.

(e)                                  Each Subsidiary Guarantor acknowledges and agrees that no change in the nature or terms of the Obligations or any of the Loan Documents, or other agreements, instruments or contracts evidencing, related to or attendant with the Obligations (including any novation), shall discharge all or any part of the liabilities and obligations of such Subsidiary Guarantor pursuant to this Guaranty; it being the purpose and intent of the Subsidiary Guarantors and the Lender Group that the covenants, agreements and all liabilities and obligations of each Subsidiary Guarantor hereunder are absolute, unconditional and irrevocable under any and all circumstances.  Without limiting the generality of the foregoing, each Subsidiary Guarantor agrees that until each and every one of the covenants and agreements of this Guaranty is fully performed, and without possibility of recourse, whether by operation of law or otherwise, such Subsidiary Guarantor’s undertakings hereunder shall not be released, in whole or in part, by any action or thing which might, but for this Section 5.1(e), be deemed a legal or equitable discharge of a surety or guarantor, or by reason of any waiver, omission of the Lender Group, or any of them, or their failure to proceed promptly or otherwise, or by reason of any action taken or omitted by the Lender Group, or any of them, whether or not such action or failure to act varies or increases the risk of, or affects the rights or remedies of, such Subsidiary Guarantor or by reason of any further dealings between any Borrower, on the one hand, and any member of the Lender Group, on the other hand, or any other guarantor or surety, and such Subsidiary Guarantor hereby expressly waives and surrenders any defense to its liability hereunder, or any right of counterclaim or offset of any nature or description which it may have or may exist based upon, and shall be deemed to have consented to, any of the foregoing acts, omissions, things, agreements or waivers.

(f)                                   The Lender Group, or any of them, may, without demand or notice of any kind upon or to any Subsidiary Guarantor, at any time or from time to time when any amount shall be due and payable hereunder by any Subsidiary Guarantor, if the Borrowers shall not have timely paid any of the Obligations (or in the case of L/C Obligations, secured through delivery of cash collateral in an amount equal to one hundred and five percent (105%) of the L/C Obligations), set-off and appropriate and apply to any portion of the Obligations hereby guaranteed, and in such order of application as the Administrative Agent may from time to time elect in accordance with this Agreement, any deposits, property, balances, credit accounts or moneys of any Subsidiary Guarantor in the possession of any member of the Lender Group or under their respective control for any purpose.  If and to the extent that any Subsidiary Guarantor makes any payment to the Administrative Agent or any other Person pursuant to or in respect of this Guaranty, any claim which such Subsidiary Guarantor may have against the Borrowers by reason thereof shall be subject and subordinate to the prior payment in full of the Obligations to the satisfaction of the Lender Group.

(g)                                  The creation or existence from time to time of Obligations in excess of the amount committed to or outstanding on the date of this Guaranty is hereby authorized, without notice to any Subsidiary Guarantor, and shall in no way impair or affect this Guaranty or the rights of the Lender Group herein. It is the intention of each Subsidiary Guarantor and the Administrative Agent that each Subsidiary Guarantor’s obligations hereunder shall be, but not in excess of, the Maximum Guaranteed Amount (as herein defined).  The “Maximum Guaranteed Amount” with respect to any Subsidiary Guarantor, means the maximum amount which could be paid by such Subsidiary Guarantor without rendering this Guaranty

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void or voidable as would otherwise be held or determined by a court of competent jurisdiction in any action or proceeding involving any state, provincial or federal (United States or Canada) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws (including, without limitation, any applicable corporations legislation to the extent the relief sought under such corporations legislation relates to or involves the compromise, settlement, adjustment or arrangement of debt) relating to the insolvency of debtors.

(h)                                 Upon the bankruptcy or winding up or other distribution of assets of any Borrower, or of any surety or guarantor (other than the applicable Subsidiary Guarantor) for any Obligations of the Borrowers to the Lender Group, or any of them, the rights of the Administrative Agent against any Subsidiary Guarantor shall not be affected or impaired by the omission of any member of the Lender Group to prove its claim, or to prove the full claim, as appropriate, against such Borrower, or any other Borrower or any such other guarantor or surety, and the Administrative Agent may prove such claims as it sees fit and may refrain from proving any claim and in its discretion may value as it sees fit or refrain from valuing any security held by it without in any way releasing, reducing or otherwise affecting the liability to the Lender Group of each of  the Subsidiary Guarantors.

(i)                                     Each Subsidiary Guarantor hereby absolutely, unconditionally and irrevocably expressly waives, except to the extent such waiver would be expressly prohibited by Applicable Law, the following:  (i) notice of acceptance of this Guaranty, (ii) notice of the existence or creation of all or any of the Obligations, (iii) presentment, demand, notice of dishonor, protest and all other notices whatsoever (other than notices expressly required hereunder or under any other Loan Document to which any Subsidiary Guarantor is a party), (iv) all diligence in collection or protection of or realization upon the Obligations or any part thereof, any obligation hereunder, or any security for any of the foregoing, (v) all rights to enforce any remedy which the Lender Group, or any of them, may have against the Borrowers, and (vi) until the Obligations shall have been indefeasibly paid in full in cash (or in the case of L/C Obligations, secured through delivery of cash collateral in an amount equal to one hundred and five percent (105%) of the L/C Obligations) and the Revolving Credit Commitment shall have been terminated, all rights of subrogation, indemnification, contribution and reimbursement from the Borrowers for amounts paid hereunder and any benefit of, or right to participate in, any collateral or security now or hereinafter held by the Lender Group, or any of them, in respect of the Obligations.  If a claim is ever made upon any member of the Lender Group for the repayment or recovery of any amount or amounts received by such Person in payment of any of the Obligations and such Person repays all or part of such amount by reason of (A) any judgment, decree or order of any court or administrative body having jurisdiction over such Person or any of its property, or (B) any settlement or compromise of any such claim effected by such Person with any such claimant, including any Borrower, then in such event each Subsidiary Guarantor agrees that any such judgment, decree, order, settlement or compromise shall be binding upon such Subsidiary Guarantor, notwithstanding any revocation hereof or the cancellation of any promissory note or other instrument evidencing any of the Obligations, and such Subsidiary Guarantor shall be and remain obligated to such Person hereunder for the amount so repaid or recovered to the same extent as if such amount had never originally been received by such Person.

(j)                                    This Guaranty is a continuing guaranty of the Obligations (other than  Excluded Swap Obligations) and all liabilities to which it applies or may apply under the terms hereof and shall be conclusively presumed to have been created in reliance hereon.  No failure or delay by any member of the Lender Group in the exercise of any right, power, privilege or remedy shall operate as a waiver thereof, and no single or partial exercise by the Administrative Agent of any right or remedy shall preclude other or further exercise thereof or the exercise of any other right or remedy and no course of dealing between any Subsidiary Guarantor and any member of the Lender Group shall operate as a waiver thereof.  No action by any member of the Lender Group permitted hereunder shall in any way impair or affect this Guaranty.  For the purpose of this Guaranty, the Obligations shall include all Obligations of the

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Borrowers to the Lender Group, notwithstanding any right or power of any third party, individually or in the name of the Borrowers and the Lender Group, or any of them, to assert any claim or defense as to the invalidity or unenforceability of any such Obligation, and no such claim or defense shall impair or affect the obligations of any Subsidiary Guarantor hereunder.

(k)                                 This is a guaranty of payment and not of collection.  In the event the Administrative Agent makes a demand upon any Subsidiary Guarantor in accordance with the terms of this Guaranty, such Subsidiary Guarantor shall be held and bound to the Administrative Agent directly as debtor in respect of the payment of the amounts hereby guaranteed.  All costs and expenses, including reasonable attorneys’ fees and expenses, incurred by the Administrative Agent in obtaining performance of or collecting payments due under this Guaranty shall be deemed part of the Obligations guaranteed hereby.

(l)                                     Each Subsidiary Guarantor is a direct or indirect Wholly-Owned Subsidiary of a Borrower.  Each Subsidiary Guarantor expressly represents and acknowledges that any financial accommodations by the Lender Group to any Borrower, including the extension of credit, are and will be of direct interest, benefit and advantage to such Subsidiary Guarantor.

(m)                             The payment obligation of a Subsidiary Guarantor to any other Subsidiary Guarantor under any Applicable Law regarding contribution rights among co-obligors or otherwise shall be subordinate and subject in right of payment to the prior payment in full of the obligations of such Subsidiary Guarantor under the other provisions of this Guaranty, and such Subsidiary Guarantor shall not exercise any right or remedy with respect to such rights until payment and satisfaction in full of all such obligations.

(n)                                 If acceleration of the time for payment, or the liability of any Borrower to make payment, of any amount specified to be payable by such Borrower in respect of the Obligations is stayed, prohibited or otherwise affected upon any bankruptcy or insolvency proceeding or other event affecting such Borrower or payment of any of the Obligations by such Borrower, all such amounts otherwise subject to acceleration or payment shall nonetheless be deemed for all purposes of this Guaranty to be and to have become due and payable by such Subsidiary Guarantor and shall be payable by each Subsidiary Guarantor under this Guaranty immediately forthwith on demand by the Administrative Agent.

SECTION 5.2                                             Special Provisions Applicable to Subsidiary Guarantors.   Pursuant to Section 10.11, certain new Subsidiaries of a Borrower are required to enter into this Agreement by executing and delivering to the Administrative Agent a joinder agreement as provided in Section 10.11.  Upon the execution and delivery of such joinder agreement by a new Subsidiary, such Subsidiary shall become a Subsidiary Guarantor and Credit Party hereunder with the same force and effect as if originally named as a Subsidiary Guarantor or Credit Party herein.  The execution and delivery of any joinder agreement adding an additional Subsidiary Guarantor as a party to this Agreement shall not require the consent of any other party hereto.  The rights and obligations of each party hereunder shall remain in full force and effect notwithstanding the addition of any new Subsidiary Guarantor hereunder.

SECTION 5.3                     Keepwell.  Each Qualified ECP Guarantor hereby jointly and severally absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as may be needed from time to time by each other Credit Party to guaranty and otherwise honor all Obligations in respect of Swap Obligations (provided, however, that each Qualified ECP Guarantor shall only be liable under this Section 5.3 for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Section 5.3, or otherwise under the Loan Documents, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount).  The obligations of each Qualified ECP Guarantor under this Section shall remain in full force and effect until payment in full of the Obligations (other than Excluded Swap Obligations).  Each Qualified ECP