Exhibit 10.1

 

EXECUTION COPY

 

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$150,000,000

 

SECOND AMENDED AND RESTATED

CREDIT AGREEMENT

 

dated as of

May 1, 2003,

as

amended and restated as of

June 30, 2004

and as

amended and restated as of

June 10, 2005

 

among

 

FASTENTECH, INC.,

 

THE LENDERS AND LC ISSUING BANKS PARTY HERETO,

 

JPMORGAN CHASE BANK, N.A.

as the Administrative Agent for the Lenders,

 

KEY BANK N.A. and NATIONAL CITY BANK

as Co-Syndication Agents for the Lenders,

 

KEY BANK N.A. and LASALLE BANK N.A.,

as Co-Documentation Agents for the Lenders

 

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J.P. MORGAN SECURITIES INC.

and

NATIONAL CITY BANK

as Joint Bookrunners and Lead Arrangers

and

KEY BANK N.A.

as Co-Arranger

 

 

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TABLE OF CONTENTS

 

          PAGE

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ARTICLE 1

DEFINITIONS

     Section 1.01.    Defined Terms    1 Section 1.02.    Classification of
Loans and Borrowings    24 Section 1.03.    Terms Generally    24 Section 1.04.
   Accounting Terms; Changes in GAAP    24      ARTICLE 2           THE CREDITS
     Section 2.01.    Revolving Commitments    25 Section 2.02.    Revolving
Loans    25 Section 2.03.    Requests to Borrow Revolving Loans    26 Section
2.04.    Letters of Credit    27 Section 2.05.    Funding of Revolving Loans   
31 Section 2.06.    Interest Elections    32 Section 2.07.    Termination or
Reduction of Commitments    34 Section 2.08.    Payment at Maturity; Evidence of
Debt    34 Section 2.09.    Optional Prepayments    35 Section 2.10.    Fees   
36 Section 2.11.    Interest    37 Section 2.12.    Alternate Rate of Interest
   38 Section 2.13.    Increased Costs    38 Section 2.14.    Break Funding
Payments    39 Section 2.15.    Taxes    40 Section 2.16.    Payments Generally;
Pro Rata Treatment; Sharing of Set-Offs    42 Section 2.17.    Lender’s
Obligation to Mitigate; Replacement of Lenders    43 Section 2.18.    Swingline
Loans    44 Section 2.19.    Optional Increase in Commitments    46 ARTICLE 3
REPRESENTATIONS AND WARRANTIES Section 3.01.    Organization; Powers    48
Section 3.02.    Authorization; Enforceability    48 Section 3.03.   
Governmental Approvals; No Conflicts    48 Section 3.04.    Financial
Statements; No Material Adverse Change    49 Section 3.05.    Properties    49

 

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Section 3.06.    Litigation and Environmental Matters    50 Section 3.07.   
Compliance with Laws and Agreements    50 Section 3.08.    Investment and
Holding Company Status    51 Section 3.09.    Taxes    51 Section 3.10.    ERISA
   51 Section 3.11.    Disclosure    51 Section 3.12.    Subsidiaries    51
Section 3.13.    Insurance    52 Section 3.14.    Labor Matters    52 Section
3.15.    Solvency    52 Section 3.16.    Senior Debt    52      ARTICLE 4       
   CONDITIONS     

Section 4.01.

   Effective Date    52 Section 4.02.    Consequences of Effectiveness    54
Section 4.03.    Each Extension of Credit    55      ARTICLE 5          
AFFIRMATIVE COVENANTS      Section 5.01.    Financial Statements and Other
Information    55 Section 5.02.    Notice of Material Events    57 Section 5.03.
   Information Regarding Collateral    57 Section 5.04.    [Reserved].    58
Section 5.05.    Existence; Conduct of Business    58 Section 5.06.    Payment
of Obligations    58 Section 5.07.    Maintenance of Properties    58 Section
5.08.    Insurance    59 Section 5.09.    Casualty and Condemnation    60
Section 5.10.    Proper Records; Rights to Inspect    61 Section 5.11.   
Compliance with Laws    61 Section 5.12.    Use of Proceeds and Letters of
Credit    61 Section 5.13.    Additional Subsidiaries    61 Section 5.14.   
Further Assurances    61 Section 5.15.    Landlord And Warehouseman Waivers   
62      ARTICLE 6           NEGATIVE COVENANTS      Section 6.01.    Debt;
Certain Equity Securities    63 Section 6.02.    Liens    65 Section 6.03.   
Fundamental Changes    66 Section 6.04.    Investments, Loans, Advances,
Guarantees and Acquisitions    67

 

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Section 6.05.    Asset Sales    68 Section 6.06.    Sale and Leaseback
Transactions    69 Section 6.07.    Hedging Agreements    69 Section 6.08.   
Restricted Payments; Certain Payments of Debt    70 Section 6.09.   
Transactions with Affiliates    72 Section 6.10.    Restrictive Agreements    72
Section 6.11.    Amendment or Termination of Material Documents    72 Section
6.12.    Capital Expenditures    73 Section 6.13.    Interest Expense Coverage
Ratio    73 Section 6.14.    Leverage Ratio    73 Section 6.15.    Minimum
EBITDA    73 Section 6.16.    Periods of Less Than Four Fiscal Quarters    74
Section 6.17.    Fiscal Year    74      ARTICLE 7           EVENTS OF DEFAULT   
       ARTICLE 8           THE ADMINISTRATIVE AGENT      Section 8.01.   
Appointment and Authorization    77 Section 8.02.    Rights and Powers as a
Lender    77 Section 8.03.    Limited Duties and Responsibilities    77 Section
8.04.    Authority to Rely on Certain Writings, Statements and Advice    78
Section 8.05.    Sub-Agents and Related Parties    78 Section 8.06.   
Resignation; Successor Administrative Agent    78 Section 8.07.    Credit
Decisions by Lenders    79      ARTICLE 9           MISCELLANEOUS     
Section 9.01.    Notices    79 Section 9.02.    Waivers; Amendments    80
Section 9.03.    Expenses; Indemnity; Damage Waiver    82 Section 9.04.   
Successors and Assigns    83 Section 9.05.    Survival    86 Section 9.06.   
Counterparts; Integration; Effectiveness    87 Section 9.07.    Severability   
87 Section 9.08.    Right of Set-off    87 Section 9.09.    Governing Law;
Jurisdiction; Consent to Service of Process    88 Section 9.10.    WAIVER OF
JURY TRIAL    88 Section 9.11.    Headings    89 Section 9.12.   
Confidentiality    89 Section 9.13.    Interest Rate Limitation    89 Section
9.14.    Continued Effectiveness of Security Agreement    90 Section 9.15.   
USA Patriot Act    90

 

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SCHEDULES:

 

Pricing Schedule

Commitment Schedule

Schedule 2.04 – Existing Letters of Credit

Schedule 3.05 – Existing Real Properties

Schedule 3.06 – Disclosed Matters

Schedule 3.12 – List of Subsidiaries

Schedule 3.13 – Insurance

Schedule 6.01 – Existing Indebtedness

Schedule 6.02 – Existing Liens

Schedule 6.04 – Existing Investments, Loans, Advances and Guaranties

Schedule 6.10 – Existing Restrictions

 

EXHIBITS:

 

Exhibit A—Form of Assignment

Exhibit B—Form of Opinion of Borrower’s Counsel

Exhibit C—Terms of Subordination

Exhibit D—Form of Commitment Acceptance

 

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SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of May 1, 2003, as amended
and restated as of June 30, 2004 and as further amended and restated as of June
10, 2005 among FASTENTECH, INC., the LENDERS and LC ISSUING BANKS party hereto,
JPMORGAN CHASE BANK, N.A., as Administrative Agent, KEY BANK N.A. and NATIONAL
CITY BANK, as Co-Syndication Agents, KEY BANK N.A. and LASALLE BANK N.A., as
Co-Documentation Agents, J.P. MORGAN SECURITIES INC. and NATIONAL CITY BANK, as
Joint Bookrunners and Lead Arrangers, and KEY BANK N.A., as Co-Arranger.

 

WHEREAS, the Borrower (as defined in Section 1.01 below), the lenders party
thereto (the “Existing Lenders”), JPMorgan Chase Bank, N.A. (formerly known as
JPMorgan Chase Bank), as Administrative Agent and certain other parties thereto
are parties to an Amended and Restated Credit Agreement dated as of May 1, 2003,
as amended and restated as of June 30, 2004 (as in effect immediately prior to
the effectiveness of this Amended Agreement (as defined in Section 1.01 below),
the “Existing Credit Agreement”);

 

WHEREAS, the parties to the Existing Credit Agreement desire to amend and
restate the Existing Credit Agreement to increase the aggregate commitments
thereunder and to modify certain other terms thereof, all as provided in this
Amended Agreement subject to the terms and conditions set forth in Section 4.01
hereof;

 

NOW, THEREFORE, the Existing Credit Agreement is amended and restated in its
entirety as follows:

 

ARTICLE 1

DEFINITIONS

 

Section 1.01. Defined Terms. As used in this Agreement, the following terms have
the meanings specified below:

 

“Additional Subordinated Debt” means Debt represented by senior subordinated
notes issued by the Borrower, and the Guarantees issued in connection therewith,
after the Effective Date; provided that any Additional Subordinated Debt shall
(i) be issued under the same indenture as the Subordinated Debt and with a Yield
to Worst no greater than 14.5%, (ii) otherwise have terms, including the terms
of subordination for both the issuer and the guarantor thereof, substantially
identical to, and in any event no less favorable to the Lenders than those
contained in the Subordinated Debt Documents governing the Subordinated Debt and
(iii) have no required amortization, redemption, defeasance, repayment or
acquisition prior to the first anniversary of the Revolving Maturity Date.

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“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Adjustment.

 

“Administrative Agent” means JPMorgan Chase Bank, N.A., in its capacity as
administrative agent under the Loan Documents.

 

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

 

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

 

“Agreement”, when used in reference to this Agreement, means the Amended
Agreement, as it may be further amended or amended and restated from time to
time.

 

“Alternate Base Rate” means, for any day, a rate per annum equal to the highest
of (a) the Prime Rate in effect on such day, (b) the Base CD Rate in effect on
such day plus 1% and (c) the Federal Funds Effective Rate in effect on such day
plus 1/2 of 1%. Any change in the Alternate Base Rate due to a change in the
Prime Rate, the Base CD Rate or the Federal Funds Effective Rate will be
effective from and including the effective date of such change in the Prime
Rate, the Base CD Rate or the Federal Funds Effective Rate, respectively.

 

“Amended Agreement” means this Second Amended and Restated Credit Agreement
dated as of June 10, 2005.

 

“Applicable Rate” has the meaning specified in the Pricing Schedule; provided
that at the option of the Administrative Agent (or at the request of the
Required Lenders), if the Borrower fails to deliver consolidated financial
statements to the Administrative Agent as and when required by Section 5.01(a)
or Section 5.01(b), the Applicable Rates in respect of Loans (including
Swingline Loans) and commitment fees will be those set forth in the Pricing
Schedule and corresponding to Level IV Status during the period from the
expiration of the time specified for such delivery until such financial
statements are so delivered.

 

“Assessment Rate” means, for any day, the annual assessment rate in effect on
such day that is payable by a member of the Bank Insurance Fund classified as
“well-capitalized” and within supervisory subgroup “B” (or a comparable
successor risk classification) within the meaning of 12 C.F.R. Part 327 (or any
successor provision) to the Federal Deposit Insurance Corporation for insurance
by such Corporation of time deposits made in dollars at the offices of

 

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such member in the United States; provided that if, as a result of any change in
any law, rule or regulation, the Assessment Rate cannot be determined as
aforesaid, then the Assessment Rate shall be such annual rate as the
Administrative Agent shall determine to be representative of the cost of such
insurance to the Lenders.

 

“Assignment” means an assignment and assumption agreement entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by Section 9.04), and accepted by the Administrative Agent, in the form of
Exhibit A or any other form approved by the Administrative Agent.

 

“Base CD Rate” means the sum of (a) the Three-Month Secondary CD Rate multiplied
by the Statutory Reserve Adjustment plus (b) the Assessment Rate.

 

“Base Rate”, when used with respect to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Alternate Base Rate.

 

“Borrower” means FastenTech, Inc., a Delaware corporation.

 

“Borrower Group Companies” means the Borrower and the Subsidiaries.

 

“Borrowing” means Loans of the same Interest Type made, converted or continued
on the same day and, in the case of Eurodollar Loans, as to which the same
Interest Period is in effect. The term “Borrowing” does not apply to a Swingline
Loan.

 

“Borrowing Request” means a request by the Borrower for a Borrowing in
accordance with Section 2.03.

 

“Business Acquisition” means (i) an investment (whether by means of share
purchase, capital contribution, loan or other extension of credit, time deposit
or otherwise) by the Borrower or any of its Subsidiaries in capital stock or
other equity interests (including warrants, options or other rights to acquire
such equity interests) of any Person other than the Borrower or any of its
Subsidiaries or (ii) an acquisition by the Borrower or any of its Subsidiaries
of the property and assets of any Person (other than the Company or any of its
Subsidiaries) that constitute all or substantially all of the assets of such
Person or any division or other business unit of such Person.

 

“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed; provided that, when used in connection with a Eurodollar Loan,
the term “Business Day” shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.

 

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“Capital Expenditures” means, for any period, (a) the additions to property,
plant and equipment and other capital expenditures of the Borrower and its
Subsidiaries that are (or would be) set forth in a consolidated statement of
cash flows of the Borrower and its Subsidiaries for such period prepared in
accordance with GAAP and (b) any Capital Lease Obligations incurred by the
Borrower and its Subsidiaries during such period.

 

“Capital Lease Obligations” of any Person means obligations of such Person to
pay rent or other amounts under any lease of (or other arrangement conveying the
right to use) real or personal property, or a combination thereof, which
obligations are required under GAAP to be classified and accounted for as
capital leases on a balance sheet of such Person. The amount of such obligations
will be the capitalized amount thereof determined in accordance with GAAP.

 

“Cash Collateral Account” has the meaning specified in Section 1 of the Security
Agreement.

 

“Change in Control” means (x) (1) at any time prior to the consummation of an
IPO, the Sponsor shall cease to own at any time at least 50% of the outstanding
voting stock (including for this purpose securities exercisable into or
convertible or exchangeable for voting stock) of the Borrower at such time or
(2) at any time on or after the consummation of an IPO, (aa) the Sponsor shall
cease to own at least 20% of the outstanding voting stock (including for this
purpose securities exercisable into or convertible or exchangeable for voting
stock) of the Borrower or (bb) any “Person” or “group” (as such terms are used
in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended),
excluding the Sponsor, is or shall become the “beneficial owner” (as defined in
Rules 13(d)-3 and 13(d)-5 under such Act), directly or indirectly, of a greater
percentage of the voting stock (including for this purpose securities
exercisable into or convertible or exchangeable for voting stock) than is owned
by the Sponsor; (y) occupation of a majority of the seats (other than vacant
seats) on the board of directors of the Borrower by Persons who were neither (i)
nominated by the board of directors of the Borrower nor (ii) appointed by
directors so nominated; or (z) the occurrence of a “Change of Control” as
defined in the Subordinated Debt Documents.

 

“Change in Law” means (a) the adoption of any law, rule or regulation after the
date of this Agreement, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after such
date or (c) compliance by any Lender or any LC Issuing Bank (or, for purposes of
Section 2.13(b), by any lending office of such Lender or by such Lender’s or
such LC Issuing Bank’s holding company, if any) with any request, guideline or
directive (whether or not having the force of law) of any Governmental Authority
made or issued after such date.

 

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“Collateral” means any and all “Collateral”, as defined in any Security
Document.

 

“Collateral and Guarantee Requirement” means the requirement that:

 

(a) the Administrative Agent shall have received from each Credit Party either
(i) evidence that such Credit Party has duly executed and delivered a
counterpart of the Security Agreement or (ii) in the case of any Person that
becomes a Credit Party after the Effective Date, a supplement to the Security
Agreement, in the form specified therein, duly executed and delivered on behalf
of such Credit Party;

 

(b) all outstanding Equity Interests in any Borrower Group Company owned by or
on behalf of any Credit Party shall have been pledged pursuant to the Security
Agreement (except that the Credit Parties shall not be required to pledge more
than 65% of the outstanding voting Equity Interests in any first tier Foreign
Subsidiary of a Credit Party or any shares in any Subsidiary of a first tier
Foreign Subsidiary) and the Administrative Agent shall have received all
certificates or other instruments representing such Equity Interests (to the
extent such Equity Interests are represented by certificates or other
instruments), which certificates or other instruments (other than those
representing the Equity Interests in Nelson Stud Welding Holdings, Inc., a
company organized under the laws of Mauritius) shall be accompanied by stock
powers or other instruments of transfer with respect thereto endorsed in blank;

 

(c) all documents and instruments, including Uniform Commercial Code financing
statements, required by law or reasonably requested by the Administrative Agent
to be filed, registered or recorded to create the Liens intended to be created
by the Security Documents and perfect or record such Liens to the extent, and
with the priority, required by the Security Agreement, shall have been filed,
registered or recorded or delivered to the Administrative Agent for filing,
registration or recording;

 

(d) The Administrative Agent shall have received (i) counterparts of a
modification to each of the Existing Mortgages with respect to each Mortgaged
Property described on Schedule 3.05 duly executed and delivered by the record
owner of such Mortgaged Property and the Administrative Agent, (ii) with respect
to each Existing Mortgage, a “date-down” endorsement to the title policy
delivered in connection with such Existing Mortgage, and (iii) such surveys,
abstracts, appraisals and other documents as the Administrative Agent or the
Required Lenders may reasonably request with respect to any such Mortgage or
Mortgaged Property;

 

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(e) each Credit Party shall have obtained all consents and approvals required to
be obtained by it in connection with the execution and delivery of all Security
Documents to which it is a party, the performance of its obligations thereunder
and the granting of the Liens granted by it thereunder; and

 

(f) each Credit Party shall have taken all other action required under the
Security Documents to perfect, register and/or record the Liens granted by it
thereunder, including, without limitation, using commercially reasonable efforts
to obtain waivers of landlords’ and warehousemen’s liens as provided in Section
5.15.

 

“Commitment” means a Revolving Commitment.

 

“Commitment Acceptance” has the meaning set forth in Section 2.19.

 

“Commitment Schedule” means the Commitment Schedule attached hereto and
identified as such.

 

“Consolidated Cash Interest Expense” means, for any period, the amount by which:

 

(a) the sum of (i) the interest expense (including imputed interest expense in
respect of Capital Lease Obligations) of the Borrower and its Subsidiaries for
such period, determined on a consolidated basis in accordance with GAAP, (ii)
any interest accrued during such period, in respect of Debt of the Borrower or
any Subsidiary, that is required under GAAP to be capitalized rather than
included in consolidated interest expense for such period and (iii) any cash
payments made during such period in respect of obligations referred to in clause
(b)(ii) below that were amortized or accrued in a previous period, exceeds

 

(b) the sum of (i) to the extent included in such consolidated interest expense
for such period, non-cash amounts attributable to amortization of financing
costs paid in a previous period and (ii) to the extent included in such
consolidated interest expense for such period, non-cash amounts attributable to
amortization of debt discount or accrued interest payable in kind for such
period.

 

“Consolidated EBITDA” means, for any period, Consolidated Net Income for such
period plus (a) without duplication and to the extent deducted in determining
such Consolidated Net Income, the sum of (i) consolidated interest

 

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expense for such period, (ii) consolidated income tax expense for such period,
(iii) all amounts attributable to depreciation and amortization for such period
and (iv) all non-capitalized expenses for such period attributable to: the
issuance by the Borrower of the Subordinated Debt, one time refinancing and
plant closing charges, extraordinary items, foreign currency exchange
agreements, debt issuance costs, purchase accounting adjustments, adjustments to
goodwill in accordance with Financial Accounting Standard 142 and mark-to-market
interest rate swaps; provided that the sum of all such items which are cash
amounts does not exceed $4,000,000 in the aggregate for such period; provided
further that the calculation of the sum referred to in the immediately preceding
clause shall not include one-time cash charges related to the retirement of the
Retired Subordinated Debt on the Original Closing Date. For purposes of
calculating the Leverage Ratio, if a material acquisition or disposition occurs,
Consolidated EBITDA will be determined after giving pro forma effect thereto as
if such acquisition or disposition had occurred at the beginning of the relevant
four-quarter period (or relevant twelve-month period in the case of any
calculation made pursuant to Section 6.16).

 

“Consolidated Net Income” means, for any period, the net income or loss of the
Borrower and its Subsidiaries for such period determined on a consolidated basis
in accordance with GAAP; provided that there shall be excluded (a) the income of
any Person (except (i) the Borrower and (ii) any Subsidiary if (x) it is
Controlled by the Borrower and (y) its accounts would be consolidated with those
of the Borrower in consolidated financial statements of the Borrower prepared in
accordance with GAAP) in which any other Person (except the Borrower, a
Subsidiary or a director holding qualifying shares in compliance with applicable
law) owns an Equity Interest, except to the extent that dividends or other
distributions were actually paid by such Person to the Borrower or any
Subsidiary during such period, and (b) the income or loss of any Person accrued
before (i) the date it becomes a Subsidiary, (ii) the date it is merged into or
consolidated with the Borrower or any Subsidiary or (iii) the date its assets
are acquired by the Borrower or any Subsidiary.

 

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

 

“Credit Parties” means the Borrower and the Subsidiary Guarantors.

 

“Debt” of any Person means, without duplication, (a) all obligations of such
Person for borrowed money or with respect to deposits or advances of any kind,
(b) all obligations of such Person evidenced by bonds, debentures, notes or
similar instruments, (c) all obligations of such Person on which interest
charges are customarily paid, (d) all obligations of such Person under
conditional sale or

 

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other title retention agreements relating to property acquired by such Person,
(e) all obligations of such Person in respect of the deferred purchase price of
property or services (excluding current accounts payable incurred in the
ordinary course of business), (f) all Debt of others secured by (or for which
the holder of such Debt has an existing right, contingent or otherwise, to be
secured by) any Lien on property owned or acquired by such Person, whether or
not the Debt secured thereby has been assumed, (g) all Guarantees by such Person
of Debt of others, (h) all Capital Lease Obligations of such Person, (i) all
obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty, (j) all obligations,
contingent or otherwise, of such Person in respect of bankers’ acceptances and
(k) the aggregate amount advanced by buyers or lenders with respect to all
Receivables Transactions, net of repayments or recoveries through liquidation of
the assets transferred pursuant to such Receivables Transaction. The Debt of any
Person shall include the Debt of any other entity (including any partnership in
which such Person is a general partner) to the extent that such Person is liable
therefor as a result of such Person’s ownership interest in or other
relationship with such entity, except to the extent that contractual provisions
binding on the holder of such Debt provide that such Person is not liable
therefor.

 

“Default” means any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.

 

“Disclosed Matters” means the actions, suits, proceedings and environmental
matters disclosed in Schedule 3.06.

 

“dollars” or “$” refers to lawful money of the United States.

 

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

 

“Effective Date” means the date on which each of the conditions specified in
Section 4.01 is satisfied (or waived in accordance with Section 9.02).

 

“Environmental Laws” means all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to the environment, the preservation or reclamation of natural resources, the
management, release or threatened release of any Hazardous Material or health
and safety matters.

 

“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of remediation, fines, penalties or
indemnities), of any Credit Party directly or indirectly resulting from or based
on

 

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(a) violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Material, (c)
exposure to any Hazardous Material, (d) the release or threatened release of any
Hazardous Material into the environment or (e) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.

 

“Equity Interests” means (i) 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 or (ii) any warrants,
options or other rights to acquire such shares or interests.

 

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

 

“ERISA Affiliate” means any trade or business (whether or not incorporated)
that, together with the Borrower or any Subsidiary, is treated as a single
employer under Section 414(b) or (c) of the Internal Revenue Code or, solely for
purposes of Section 302 of ERISA and Section 412 of the Internal Revenue Code,
is treated as a single employer under Section 414 of the Internal Revenue Code.

 

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of
ERISA or the regulations issued thereunder with respect to a Plan (except an
event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an “accumulated funding deficiency” (as defined in
Section 412 of the Internal Revenue Code or Section 302 of ERISA), whether or
not waived; (c) the filing pursuant to Section 412(d) of the Internal Revenue
Code or Section 303(d) of ERISA of an application for a waiver of the minimum
funding standard with respect to any Plan; (d) the incurrence by the Borrower or
any ERISA Affiliate of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate
from the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f)
the incurrence by the Borrower or any ERISA Affiliate of any liability with
respect to withdrawal or partial withdrawal from any Plan or Multiemployer Plan;
or (g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the
receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of
any notice, concerning the imposition of Withdrawal Liability or a determination
that a Multiemployer Plan is, or is expected to be, insolvent or in
reorganization, within the meaning of Title IV of ERISA.

 

“Eurodollar”, when used with respect to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Adjusted LIBO Rate.

 

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“Events of Default” has the meaning specified in Article 7.

 

“Excluded Taxes” means, with respect to any Lender Party or other recipient of a
payment made by or on account of any obligation of the Borrower hereunder:

 

(a) income or franchise taxes imposed on (or measured by) its net income by the
United States, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located;

 

(b) any branch profits taxes imposed by the United States or any similar tax
imposed by any other jurisdiction described in clause (a) above; and

 

(c) in the case of a Foreign Lender, any withholding tax that (i) is in effect
and would apply to amounts payable to such Foreign Lender at the time such
Foreign Lender becomes a party to this Agreement or designates a new lending
office or (ii) is attributable to such Foreign Lender’s failure to comply with
Section 2.15(e).

 

Notwithstanding the foregoing, a withholding tax will not be an “Excluded Tax”
to the extent that (A) it is imposed on amounts payable to a Foreign Lender by
reason of an assignment made to such Foreign Lender at the Borrower’s request
pursuant to Section 2.17(b), (B) it is imposed on amounts payable to a Foreign
Lender by reason of any other assignment and does not exceed the amount for
which the assignor would have been indemnified pursuant to Section 2.15(a) or
(C) in the case of designation of a new lending office, it does not exceed the
amount for which such Foreign Lender would have been indemnified if it had not
designated a new lending office.

 

“Existing Agreement Closing Date” means June 30, 2004, the closing date of the
Existing Credit Agreement.

 

“Existing Credit Agreement” has the meaning set forth in the first “Whereas”
clause of this Amended Agreement.

 

“Existing Lenders” has the meaning set forth in the first “Whereas” clause of
this Amended Agreement.

 

“Existing Letters of Credit” the letters of credit issued before the Effective
Date under the Existing Credit Agreement and identified on Schedule 2.04.

 

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“Existing Mortgages” means the mortgages and deeds of trust delivered pursuant
to the Original Agreement or the Existing Credit Agreement on the Mortgaged
Properties described in Schedule 3.05.

 

“Fabri-Steel” means Fabri-Steel Products Incorporated, a Michigan corporation.

 

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

 

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

 

“Financial Officer” means the chief financial officer, principal accounting
officer, treasurer or controller of the Borrower.

 

“Financing Transactions” means the execution, delivery and performance by each
Credit Party of the Loan Documents to which it is to be a party, the borrowing
of Loans and Swingline Loans, the use of the proceeds thereof and the issuance
of Letters of Credit hereunder.

 

“Fiscal Quarter” means a fiscal quarter of the Borrower.

 

“Fiscal Year” means a fiscal year of the Borrower.

 

“Foreign Lender” means any Lender that is organized under the laws of a
jurisdiction outside the United States.

 

“Foreign Subsidiary” means a Subsidiary (which may be a corporation, limited
liability company, partnership or other legal entity) organized under the laws
of a jurisdiction outside the United States, and conducting substantially all
its operations outside the United States, other than any such entity that is
(whether as a matter of law, pursuant to an election by such entity or
otherwise) treated as a partnership in which any Credit Party is a partner or as
a branch of any Credit Party for United States income tax purposes.

 

“GAAP” means generally accepted accounting principles as in effect from time to
time in the United States, applied on a basis consistent (except for changes
concurred in by the Borrower’s independent public accountants) with the most
recent audited consolidated financial statements of the Borrower and its
consolidated Subsidiaries delivered to the Lenders.

 

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“German Subsidiary” means any Foreign Subsidiary of the Borrower that is
organized under the laws of, and conducts substantially all its operations in,
Germany.

 

“Governmental Authority” means the government of the United States, any other
nation or any political subdivision thereof, whether state or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.

 

“Guarantee” by any Person (the “guarantor”) means any obligation, contingent or
otherwise, of the guarantor guaranteeing or having the economic effect of
guaranteeing any Debt or other obligation of any other Person (the “primary
obligor”) in any manner, whether directly or indirectly, and including any
obligation of the guarantor, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Debt or other
obligation or to purchase (or advance or supply funds for the purchase of) any
security for the payment thereof, (b) to purchase or lease property, securities
or services for the purpose of assuring the owner of such Debt or other
obligation of the payment thereof, (c) to maintain working capital, equity
capital or any other financial statement condition or liquidity of the primary
obligor so as to enable the primary obligor to pay such Debt or other obligation
or (d) as an account party in respect of any letter of credit or letter of
guaranty issued to support such Debt or other obligation; provided that the term
“Guarantee” shall not include endorsements for collection or deposit in the
ordinary course of business.

 

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

 

“Hedging Agreement” means any interest rate protection agreement, foreign
currency exchange agreement, commodity price protection agreement or other
interest rate, currency exchange rate or commodity price hedging arrangement.

 

“IET” means Integrated Energy Technologies, Inc., a Subsidiary of the Borrower
organized under the laws of Delaware.

 

“Indemnified Taxes” means all Taxes except Excluded Taxes.

 

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“Interest Election” means an election by the Borrower to change or continue the
Interest Type of a Borrowing in accordance with Section 2.06.

 

“Interest Payment Date” means (a) with respect to any Base Rate Loan (other than
Swingline Loans), the last day of each March, June, September and December, (b)
with respect to any Swingline Loan, the day on which such Loan is required to be
repaid and (c) with respect to any Eurodollar Loan, the last day of the Interest
Period applicable to the Borrowing of which such Loan is a part and, if such
Interest Period is longer than three months, each day during such Interest
Period that occurs at intervals of three months’ duration after the first day of
such Interest Period.

 

“Interest Period” means, with respect to any Eurodollar Borrowing, the period
beginning on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
thereafter, as the Borrower may elect; provided that (a) if any Interest Period
would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day and (b) any Interest Period
that commences on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the last calendar month of
such Interest Period) shall end on the last Business Day of the last calendar
month of such Interest Period. For purposes hereof, the date of a Borrowing
initially shall be the date on which such Borrowing is made and thereafter shall
be deemed to be the effective date of the most recent conversion or continuation
of such Borrowing.

 

“Interest Type”, when used with respect to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate
Base Rate.

 

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

 

“IPO” means an underwritten public offering of common stock of, and by, the
Borrower pursuant to a registration statement filed with the SEC in accordance
with the Securities Act of 1934, as amended, which public equity offering
results in gross proceeds to the Borrower of not less than $20,000,000.

 

“LC Disbursement” means a payment made by an LC Issuing Bank in respect of a
drawing under a Letter of Credit.

 

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“LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of
all Letters of Credit outstanding at such time plus (b) the aggregate amount of
all LC Disbursements that have not yet been reimbursed by or on behalf of the
Borrower at such time. The LC Exposure of any Revolving Lender at any time will
be its Revolving Percentage of the total LC Exposure at such time.

 

“LC Issuing Bank” means JPMorgan Chase Bank and any other Lender that may agree
to issue letters of credit hereunder with the consent of the Administrative
Agent (not to be unreasonably withheld), in each case in its capacity as the
issuer of Letters of Credit, and its successors in such capacity as provided in
Section 2.04(i). Each LC Issuing Bank may, in its discretion, arrange for one or
more Letters of Credit to be issued by its Affiliates, in which case the term
“LC Issuing Bank” shall include each such Affiliate with respect to Letters of
Credit issued by it.

 

“LC Reimbursement Obligations” means, at any time, all obligations of the
Borrower to reimburse each LC Issuing Bank for amounts paid by it in respect of
drawings under Letters of Credit, including any portion of such obligations to
which Lenders have become subrogated by making payments to an LC Issuing Bank
pursuant to Section 2.04(e).

 

“Lender Parties” means the Lenders, each LC Issuing Bank and the Administrative
Agent.

 

“Lenders” means the Persons listed on the Commitment Schedule and any other
Person that shall have become a party hereto pursuant to an Assignment, other
than any such Person that ceases to be a party hereto pursuant to an Assignment.
Unless the context otherwise requires, the term “Lenders” includes the Swingline
Lenders.

 

“Letter of Credit” means (i) any Existing Letters of Credit and (ii) any letter
of credit issued pursuant to this Agreement, and “Letters of Credit” means all
of the foregoing, collectively.

 

“Leverage Ratio” means, on any day, the ratio of (a) Net Debt as of such day to
(b) Consolidated EBITDA for the period of four consecutive Fiscal Quarters
(subject to Section 6.16) ended on such day (or, if such day is not the last day
of a Fiscal Quarter, ended on the last day of the Fiscal Quarter most recently
ended before such day).

 

“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period, the rate appearing on Page 3750 of the Dow Jones Market Service (or on
any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those

 

14

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currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days before the beginning of
such Interest Period, as the rate for dollar deposits with a maturity comparable
to such Interest Period. If such rate is not available at such time for any
reason, then the “LIBO Rate” with respect to such Eurodollar Borrowing for such
Interest Period shall be the rate at which dollar deposits of $5,000,000 and for
a maturity comparable to such Interest Period are offered by the principal
London office of the Administrative Agent in immediately available funds in the
London interbank market at approximately 11:00 a.m., London time, two Business
Days before the beginning of such Interest Period.

 

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of
such asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.

 

“Loan Documents” means this Agreement and the Security Documents.

 

“Loans” means loans made by the Lenders to the Borrower pursuant to this
Agreement. Unless the context otherwise requires, the term “Loans” includes
Swingline Loans.

 

“Long-Term Debt” means any Debt that, in accordance with GAAP, constitutes (or,
when incurred, constituted) a long-term liability.

 

“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, operations, prospects or condition, financial or otherwise, of the
Borrower Group Companies taken as a whole, (b) the ability of any Credit Party
to perform any of its obligations under any Loan Document or (c) the rights of
or benefits available to any Lender Party under any Loan Document.

 

“Material Debt” means Debt (other than obligations in respect of the Loans and
Letters of Credit), or obligations in respect of one or more Hedging Agreements,
of any one or more Borrower Group Companies in an aggregate principal amount
exceeding $5,000,000. For purposes of determining Material Debt, the “principal
amount” of the obligations of any Borrower Group Company in respect of any
Hedging Agreement at any time will be the maximum aggregate amount (after giving
effect to any netting agreements) that such Borrower Group Company would be
required to pay if such Hedging Agreement were terminated at such time.

 

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“Moody’s” means Moody’s Investors Service, Inc.

 

“Mortgage” means a mortgage, deed of trust, assignment of leases and rents,
leasehold mortgage or other security document granting a Lien on any Mortgaged
Property to secure the Secured Obligations. Each Mortgage must be satisfactory
in form and substance to the Administrative Agent.

 

“Mortgaged Property” means each parcel of real property and improvements thereto
owned or, solely in the case of real property located in Cleveland, Ohio,
leased, by a Credit Party that is either (i) identified on Schedule 3.05 (but
not including those properties located in Gevelsberg, Germany and Lagrange, Ohio
as identified on Schedule 3.05) or (ii) subject to a Transaction Lien granted
after the Effective Date pursuant to Section 5.13 or 5.14.

 

“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3)
of ERISA.

 

“Net Debt” means, as of any date, the sum (without duplication) of (a) the
aggregate principal amount of Debt of the Borrower and its Subsidiaries
outstanding as of such date, in the amount that would be reflected on a balance
sheet prepared as of such date on a consolidated basis in accordance with GAAP,
and (b) the aggregate principal amount of Debt of the Borrower and its
Subsidiaries outstanding as of such date that is not required to be reflected on
a balance sheet in accordance with GAAP, determined on a consolidated basis,
minus cash, cash equivalents and Permitted Investments at such date that would
be reflected on the balance sheet; provided that, for purposes of clause (b)
above, the term “Debt” will not include contingent obligations of the Borrower
or any Subsidiary as an account party in respect of any letter of credit or
letter of guaranty unless such letter of credit or letter of guaranty supports
an obligation that constitutes Debt.

 

“Net Cash Proceeds” shall mean, with respect to the incurrence of Debt of the
Borrower in connection with the issuance of Additional Subordinated Debt, the
gross proceeds received from such incurrence less all reasonable out-of-pocket
expenses, discounts and commissions and other fees and expenses incurred or to
be incurred and all federal, state, local and foreign taxes assessed or to be
assessed in connection with the closing of such transaction.

 

“Original Agreement” means the Credit Agreement dated as of May 1, 2003, as in
effect immediately prior to the Existing Agreement Closing Date.

 

“Original Closing Date” means May 1, 2003, the closing date of the Original
Agreement.

 

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

 

“Participants” has the meaning specified in Section 9.04(c).

 

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA and any successor entity performing similar functions.

 

“Perfection Certificate” means a certificate in the form of Exhibit E to the
Security Agreement or any other form approved by the Administrative Agent.

 

“Permitted Investments” means investments in:

 

(a) direct obligations of, or obligations the principal of and interest on which
are unconditionally guaranteed by, the United States (or by any agency thereof
to the extent such obligations are backed by the full faith and credit of the
United States), in each case maturing within one year from the date of
acquisition thereof;

 

(b) commercial paper maturing within 270 days from the date of acquisition
thereof and having, at such date of acquisition, the highest credit rating
obtainable from S&P or from Moody’s;

 

(c) certificates of deposit, banker’s acceptances and time deposits maturing
within 180 days from the date of acquisition thereof issued or guaranteed by or
placed with, and money market deposit accounts issued or offered by, any
domestic office of any commercial bank organized under the laws of the United
States or any State thereof which has a combined capital and surplus and
undivided profits of at least $500,000,000;

 

(d) fully collateralized repurchase agreements with a term of not more than 30
days for securities described in clause (a) above and entered into with a
financial institution satisfying the criteria described in clause (c) above; and

 

(e) shares of prime money market funds that invest exclusively in assets
satisfying the requirements of clauses (a) through (d) of this definition.

 

“Permitted Liens” means:

 

(a) Liens imposed by law for taxes that are not yet due or are being contested
in compliance with Section 5.06;

 

17

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(b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other
like Liens imposed by law, arising in the ordinary course of business and
securing obligations that are not overdue by more than 60 days or are being
contested in compliance with Section 5.06;

 

(c) pledges and deposits made in the ordinary course of business in compliance
with workers’ compensation, unemployment insurance and other social security
laws or regulations;

 

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

 

(e) judgment liens in respect of judgments that do not constitute an Event of
Default under clause (k) of Article 7; and

 

(f) easements, zoning restrictions, rights-of-way and similar encumbrances on
real property imposed by law or arising in the ordinary course of business that
do not secure any monetary obligation and do not materially detract from the
value of the affected property or interfere with the ordinary conduct of
business of the Borrower or any Subsidiary;

 

provided that the term “Permitted Liens” shall not include any Lien that secures
Debt.

 

“Permitted Receivables Transaction” means any Receivables Transaction of which
the effect of the structure and documentation on the Lenders (including an
intercreditor agreement) is reasonably acceptable to the Required Lenders.

 

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

 

“Plan” means any employee pension benefit plan (except a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Internal
Revenue Code or Section 302 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) a “contributing sponsor” as defined in Section
4001(a)(13) of ERISA.

 

“Preferred Stock” means the Series A senior preferred stock, the Series B junior
preferred stock, the Series C junior preferred stock, the Series D senior
preferred stock, the Series E junior preferred stock and the Series F senior
preferred stock of the Borrower.

 

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“Pricing Schedule” means the Pricing Schedule attached hereto and identified as
such.

 

“Prime Rate” means the rate of interest per annum publicly announced from time
to time by JPMorgan Chase Bank as its prime rate in effect at its principal
office in New York City. Each change in the Prime Rate will be effective for
purposes hereof from and including the date such change is publicly announced as
being effective.

 

“Proposed Acraline Acquisition” means a proposed Business Acquisition pursuant
to which the Borrower will acquire, through IET (or one of IET’s wholly-owned
subsidiaries), substantially all of the assets of Acraline Products, Inc. for a
purchase price of $40,000,000, $32,000,000 of which shall be paid in cash and
the balance of which shall be paid with one or more subordinated, unsecured
discount notes issued by the Borrower or IET (or such subsidiary of IET) at
closing, which notes are (x) subordinated to the obligations of the Credit
Parties under the Loan Documents on terms and conditions no less favorable to
the Lenders than those set forth in Exhibit C and (y) payable on or after
December 30, 2005.

 

“Receivables Transaction” means any receivables securitization program or other
type of accounts receivable financing transaction (including by way of sale) by
the Borrower or any of its Subsidiaries; provided that substantially all Debt
incurred in connection therewith (other than Debt of an SPV) arises from a
transfer of accounts receivable which is intended by the parties thereto to be
treated as a sale.

 

“Register” has the meaning specified in Section 9.04(b)(iv).

 

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

 

“Required Lenders” means, at any time, Lenders having Revolving Exposures and
unused Commitments representing at least 51% of the sum of all Revolving
Exposures and unused Commitments at such time.

 

“Restricted Debt” means Debt of the Borrower or any Subsidiary, the payment,
prepayment, redemption, purchase or defeasance of which is restricted under
Section 6.08.

 

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“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interest in any
Borrower Group Company, or any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
any Equity Interest in any Borrower Group Company (including, for this purpose,
any payment in respect of any Equity Interest under a Synthetic Purchase
Agreement).

 

“Retired Subordinated Debt” means (a) the senior subordinated Credit Agreement
dated as of March 31, 1999 between Fabri-Steel Products Incorporated and
Citicorp Mezzanine Partners, L.P., (b) the Subordinated Credit Agreement dated
as of March 17, 2000 between Fabri-Steel Holdings, Inc. and Citicorp Mezzanine
III, L.P., as assigned to Citicorp Mezzanine Partners, L.P. and (c) the 10%
subordinated notes payable to former minority shareholders of the Ferry Cap and
Set Screw Company due June 30, 2007, all of which were repaid in full and
terminated or retired, as applicable, on the Original Closing Date.

 

“Revolving Availability Period” means the period from and including the
Effective Date to but excluding the Revolving Maturity Date (or, if earlier, the
date on which all outstanding Revolving Commitments terminate).

 

“Revolving Borrowing” means a Borrowing pursuant to Section 2.01(a).

 

“Revolving Commitment” means, with respect to each Lender, the commitment, if
any, of such Lender to make Revolving Loans and to acquire participations in
Letters of Credit and Swingline Loans hereunder, expressed as an amount
representing the maximum aggregate amount of such Lender’s Revolving Exposure
hereunder, as such commitment may be (a) reduced from time to time pursuant to
Section 2.07 and (b) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 9.04. The initial amount of
each Lender’s Revolving Commitment is set forth on the Commitment Schedule, or
in the Assignment pursuant to which such Lender shall have assumed its initial
Revolving Commitment, as applicable. The initial aggregate amount of the
Revolving Commitments is $150,000,000.

 

“Revolving Exposure” means, with respect to any Lender at any time, the sum of
the aggregate outstanding principal amount of such Lender’s Revolving Loans and
its LC Exposure and Swingline Exposure at such time.

 

“Revolving Lender” means a Lender with a Revolving Commitment or, if the
Revolving Commitments have terminated or expired, a Lender with a Revolving
Exposure.

 

“Revolving Loan” means a Loan made pursuant to Section 2.01(a).

 

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“Revolving Maturity Date” means May 1, 2010.

 

“Revolving Percentage” means, with respect to any Revolving Lender, the
percentage of the total Revolving Commitments represented by such Lender’s
Revolving Commitment. If the Revolving Commitments have terminated or expired,
the Revolving Percentages will be determined based on the Revolving Commitments
most recently in effect, adjusted to give effect to any assignments.

 

“S&P” means Standard & Poor’s.

 

“SEC” means the Securities and Exchange Commission.

 

“Secured Guarantee” has the meaning specified in Section 1 of the Security
Agreement.

 

“Secured Obligations” has the meaning specified in Section 1 of the Security
Agreement.

 

“Secured Parties” has the meaning specified in Section 1 of the Security
Agreement.

 

“Security Agreement” means the Guarantee and Security Agreement dated as of May
1, 2003 among the Credit Parties and the Administrative Agent.

 

“Security Documents” means the Security Agreement, the Mortgages and each other
security agreement, instrument or document executed and delivered pursuant to
Section 5.13 or 5.14 to secure any of the Secured Obligations.

 

“Senior Secured Leverage Ratio” means, on any day, the Leverage Ratio on such
day, adjusted by excluding from Net Debt any Debt that is unsecured or which is
by its terms subordinate to the Loans.

 

“Sponsor” means Citicorp Venture Capital Ltd., a New York corporation, 399
Venture Partners, Inc., a Delaware corporation, and their respective Affiliates,
including CCT Partners V LP, Citicorp Mezzanine Partners, L.P., Citicorp
Mezzanine III, L.P. and CVC Equity Partners L.P.

 

“SPV” means a Subsidiary which is a special-purpose entity created and used
solely for purposes of effecting a Permitted Receivables Transaction.

 

“Statutory Reserve Adjustment” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Federal Reserve Board to which the Administrative Agent is
subject with respect to (a) for purposes of determining

 

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the Base CD Rate, new negotiable nonpersonal time deposits in dollars of over
$100,000 with maturities approximately equal to three months and (b) for
purposes of determining the Adjusted LIBO Rate, eurocurrency funding (currently
referred to as “Eurocurrency Liabilities” in Regulation D of the Federal Reserve
Board). Such reserve percentages will include those imposed pursuant to such
Regulation D. Eurodollar Loans will be deemed to constitute eurocurrency funding
and to be subject to such reserve requirements without benefit of or credit for
proration, exemptions or offsets that may be available from time to time to any
Lender under such Regulation D or any comparable regulation. The Statutory
Reserve Adjustment will be adjusted automatically on and as of the effective
date of any change in any applicable reserve percentage.

 

“Subordinated Debt” means the 11.5% Senior Subordinated Notes due 2011 issued by
the Borrower and the Guarantees issued in connection therewith by certain of the
Subsidiaries, in each case on or before the Original Closing Date, in the
aggregate principal amount of $175,000,000 (including such Senior Subordinated
Notes in the aggregate principal amount of $30,000,000 issued pursuant to
Section 6 of the Purchase Agreement dated as of August 27, 2002 between
Fabri-Steel and Citibank, N.A.) and the Debt represented thereby.

 

“Subordinated Debt Documents” means the indenture under which the Subordinated
Debt is issued and all other instruments, agreements and other documents
evidencing or governing the Subordinated Debt or providing for any Guarantee or
other right in respect thereof.

 

“subsidiary” means, with respect to any Person (the “parent”) at any date, (a)
any corporation, limited liability company, partnership or other entity the
accounts of which would be consolidated with those of the parent in the parent’s
consolidated financial statements if such financial statements were prepared in
accordance with GAAP as of such date and (b) any other corporation, limited
liability company, partnership or other entity (i) of which securities or other
ownership interests representing more than 50% of the equity or more than 50% of
the ordinary voting power or, in the case of a partnership, more than 50% of the
general partnership interests are, as of such date, owned, controlled or held,
or (ii) that is otherwise Controlled as of such date, by the parent and/or one
or more of its subsidiaries.

 

“Subsidiary” means any subsidiary of the Borrower.

 

“Subsidiary Guarantors” means each Subsidiary listed on the signature pages of
the Security Agreement under the caption “Guarantors” and each Domestic
Subsidiary that becomes at any time after the Original Closing Date (including
after the date hereof) a Guarantor pursuant to Section 27 of the Security
Agreement.

 

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“Supermajority Lenders” means, at any time, Lenders having Revolving Exposures
and unused Commitments representing at least 66- 2/3% of the sum of all
Revolving Exposures and unused Commitments at such time.

 

“Swingline Exposure” means, at any time, the aggregate outstanding principal
amount of the Swingline Loans at such time. The Swingline Exposure of any Lender
at any time will be its Revolving Percentage of the total Swingline Exposure at
such time.

 

“Swingline Lenders” means JPMorgan Chase Bank, N.A. and National City Bank, and
“Swingline Lender” means either of them, as the context may require.

 

“Swingline Loan” means a loan made pursuant to Section 2.18.

 

“Synthetic Purchase Agreement” means any swap, derivative or other agreement or
combination of agreements pursuant to which the Borrower or a Subsidiary is or
may become obligated to make (i) any payment in connection with the purchase by
any third party, from a Person other than the Borrower or a Subsidiary, of any
Equity Interest or Restricted Debt or (ii) any payment (other than on account of
a permitted purchase by it of any Equity Interest or Restricted Debt) the amount
of which is determined by reference to the price or value at any time of any
Equity Interest or Restricted Debt; provided that no phantom stock or similar
plan providing for payments only to current or former directors, officers or
employees of the Borrower or its Subsidiaries (or their heirs or estates) will
be deemed to be a Synthetic Purchase Agreement.

 

“Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.

 

“Three-Month Secondary CD Rate” means, for any day, the secondary market rate
for three-month certificates of deposit reported as being in effect on such day
(or, if such day is not a Business Day, the next preceding Business Day) by the
Federal Reserve Board through the public information telephone line of the
Federal Reserve Bank of New York (which rate will, under the current practices
of the Federal Reserve Board, be published in Federal Reserve Statistical
Release H.15(519) during the week following such day) or, if such rate is not so
reported for such day or such next preceding Business Day, the average of the
secondary market quotations for three-month certificates of deposit of major
money center banks in New York City received at approximately 10:00 a.m., New
York City time, on such day (or, if such day is not a Business Day, on the next
preceding Business Day) by the Administrative Agent from three negotiable
certificate of deposit dealers of recognized standing selected by it.

 

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“Transaction Liens” means the Liens on Collateral granted by the Credit Parties
under the Security Documents.

 

“United States” means the United States of America.

 

“Utilization” means, at any date, the percentage equivalent of a fraction (i)
the numerator of which is the aggregate amount of the Revolving Exposure of all
Lenders at such date and (ii) the denominator of which is the aggregate amount
of the Revolving Commitments of all the Lenders at such date.

 

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.

 

“Yield to Worst” means the lowest yield of yield to maturity or yield to all
possible call dates.

 

Section 1.02. Classification of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Interest Type (e.g., a
“Eurodollar Loan”). Borrowings also may be classified and referred to by
Interest Type (e.g., a “Eurodollar Borrowing”).

 

Section 1.03. Terms Generally. The definitions of terms herein (including those
incorporated by reference to another document) apply equally to the singular and
plural forms of the terms defined. Whenever the context may require, any pronoun
includes the corresponding masculine, feminine and neuter forms. The words
“include”, “includes” and “including” shall be deemed to be followed by the
phrase “without limitation”. The word “will” shall be construed to have the same
meaning and effect as the word “shall”. Unless the context requires otherwise,
(a) 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), (b) any reference herein to any Person shall be construed to
include such Person’s successors and assigns, (c) 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, (d)
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 and (e) the word “property” shall be construed to refer to any
and all tangible and intangible assets and properties, including cash,
securities, accounts and contract rights.

 

Section 1.04. Accounting Terms; Changes in GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be

 

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construed in accordance with GAAP as in effect from time to time; provided that,
if the Borrower notifies the Administrative Agent that the Borrower requests an
amendment of any provision hereof to eliminate the effect of any change
occurring after the Original Closing Date in GAAP or in the application thereof
(or if the Administrative Agent notifies the Borrower that the Required Lenders
request an amendment of any provision hereof for such purpose), regardless of
whether such notice is given before or after such change in GAAP or in the
application thereof, then such provision shall be applied on the basis of GAAP
as in effect and applied immediately before such change shall have become
effective until such notice shall have been withdrawn or such provision amended
in accordance herewith.

 

ARTICLE 2

THE CREDITS

 

Section 2.01. Revolving Commitments. (a) Subject to the terms and conditions set
forth herein, each Revolving Lender agrees to make Revolving Loans to the
Borrower from time to time during the Revolving Availability Period in an
aggregate principal amount that will not at any time result in such Lender’s
Revolving Exposure exceeding its Revolving Commitment. Within the foregoing
limits and subject to the terms and conditions set forth herein, the Borrower
may borrow, prepay and reborrow Revolving Loans.

 

(b) The Commitments of the Lenders are several, i.e., the failure of any Lender
to make any Loan required to be made by it shall not relieve any other Lender of
its obligations hereunder, and no Lender shall be responsible for any other
Lender’s failure to make Loans as and when required hereunder.

 

Section 2.02. Revolving Loans. (a) Each Revolving Loan shall be made as part of
a Borrowing consisting of Loans of the same Interest Type made by the Lenders
ratably in accordance with their respective Commitments, as the Borrower may
request (subject to Section 2.12) in accordance herewith; provided that any
Borrowings made on the Effective Date must be Base Rate Borrowings. Each Lender
at its option may make any Eurodollar Loan by causing any domestic or foreign
branch or Affiliate of such Lender to make such Loan. Any exercise of such
option shall not affect the Borrower’s obligation to repay such Loan as provided
herein.

 

(b) At the beginning of each Interest Period for any Eurodollar Borrowing, the
aggregate amount of such Borrowing shall be an integral multiple of $1,000,000
and not less than $2,000,000. When each Base Rate Borrowing is made, the
aggregate amount of such Borrowing shall be an integral multiple of $1,000,000
and not less than $2,000,000; provided that a Base Rate Revolving Borrowing may
be in an aggregate amount that (i) is equal to the entire unused

 

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balance of the Revolving Commitments or (ii) is required to finance the
reimbursement of an LC Disbursement as contemplated by Section 2.04(e).
Borrowings of more than one Interest Type may be outstanding at the same time;
provided that there shall not at any time be more than a total of 5 Eurodollar
Borrowings outstanding.

 

(c) Notwithstanding any other provision hereof, the Borrower will not be
entitled to request, or to elect to convert or continue, any Eurodollar
Borrowing if the Interest Period requested with respect thereto would end after
the Revolving Maturity Date.

 

Section 2.03. Requests to Borrow Revolving Loans. To request a Revolving
Borrowing, the Borrower shall notify the Administrative Agent of such request by
telephone (a) in the case of a Eurodollar Borrowing, not later than 11:00 a.m.,
New York City time, three Business Days before the date of the proposed
Borrowing or (b) in the case of a Base Rate Borrowing, not later than 11:00
a.m., New York City time, one Business Day before the date of the proposed
Borrowing; provided that any such notice of a Base Rate Revolving Borrowing to
finance the reimbursement of an LC Disbursement as contemplated by Section
2.04(e) may be given not later than 10:00 a.m., New York City time, on the date
of the proposed Borrowing. Each such telephonic Borrowing Request shall be
irrevocable and shall be confirmed promptly by hand delivery or facsimile to the
Administrative Agent of a written Borrowing Request in a form approved by the
Administrative Agent and signed by the Borrower. Each such telephonic and
written Borrowing Request shall specify the following information in compliance
with Section 2.02:

 

(i) the aggregate amount of such Borrowing;

 

(ii) the date of such Borrowing, which shall be a Business Day;

 

(iii) whether such Borrowing is to be a Base Rate Borrowing or a Eurodollar
Borrowing;

 

(iv) in the case of a Eurodollar Borrowing, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of
“Interest Period”; and

 

(v) the location and number of the Borrower’s account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.05.

 

If no election as to the Interest Type of a Borrowing is specified, the
requested Borrowing will be a Base Rate Borrowing. If no Interest Period with
respect to a requested Eurodollar Borrowing is specified, the Borrower will be

 

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deemed to have selected an Interest Period of one month’s duration. Promptly
after it receives a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender as to the details of such
Borrowing Request and the amount of such Lender’s Loan to be made pursuant
thereto.

 

Section 2.04. Letters of Credit. (a) General. On the Effective Date, the LC
Issuing Bank shall be deemed, without further action by any party hereto, to
have sold to each of the Lenders, and each Lender shall be deemed, without
further action by any party hereto, to have purchased from the LC Issuing Bank,
a participation (on the terms specified in this Section) in each Existing Letter
of Credit equal to such Lender’s Revolving Percentage thereof. Concurrently with
such sale, the participations sold to the Existing Lenders pursuant to the terms
of the Existing Credit Agreement shall be automatically cancelled without
further action by any of the parties hereto. Each Lender acknowledges and agrees
that its obligation to acquire participations in Existing Letters of Credit
pursuant to this subsection is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including the occurrence and
continuance of a Default of reduction or termination of the Commitments, and
that each payment by a Lender to acquire such participations shall be made
without any offset, abatement, withholding or reduction whatsoever. Subject to
the terms and conditions set forth herein, the Borrower may request the issuance
of Letters of Credit for its own account or the account of one of its
Subsidiaries, in a form reasonably acceptable to the Administrative Agent and
the applicable LC Issuing Bank, from time to time during the Revolving
Availability Period. If the terms and conditions of any form of letter of credit
application or other agreement submitted by the Borrower to, or entered into by
the Borrower with, any LC Issuing Bank relating to any Letter of Credit are not
consistent with the terms and conditions of this Agreement, the terms and
conditions of this Agreement shall control.

 

(b) Notice of Issuance, Amendment, Renewal or Extension; Certain Conditions. To
request the issuance of a Letter of Credit (or the amendment, renewal or
extension of an outstanding Letter of Credit), the Borrower shall hand deliver
or facsimile (or transmit by electronic communication, if arrangements for doing
so have been approved by the applicable LC Issuing Bank) to an LC Issuing Bank
and the Administrative Agent (reasonably in advance of the requested date of
issuance, amendment, renewal or extension) a notice requesting the issuance of a
Letter of Credit, or identifying the Letter of Credit to be amended, renewed or
extended, and specifying the requested date of issuance, amendment, renewal or
extension (which shall be a Business Day), the date on which such Letter of
Credit is to expire (which shall comply with Section 2.04(c)), the amount of
such Letter of Credit, the name and address of the beneficiary thereof and such
other information as shall be necessary to prepare, amend, renew or extend such
Letter of Credit. If requested by the applicable LC Issuing Bank, the Borrower
also shall submit a letter of credit application on such LC Issuing Bank’s
standard form in connection with any request for a Letter of Credit. A Letter of
Credit shall be

 

27

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issued, amended, renewed or extended only if (and upon issuance, amendment,
renewal or extension of each Letter of Credit the Borrower shall be deemed to
represent and warrant that), after giving effect to such issuance, amendment,
renewal or extension, (i) the LC Exposure will not exceed $5,000,000 and (ii)
the total Revolving Exposures will not exceed the total Revolving Commitments
then in effect. Subject to the foregoing sentence, and so long as no Event of
Default shall have occurred and be continuing, Letters of Credit containing
customary “evergreen” provisions shall be extended automatically so long as such
extension is for a period not exceeding one year and is granted no earlier than
three months before the then existing expiry date thereof.

 

(c) Expiration Date. Each Letter of Credit shall expire at or before the close
of business on the earlier of (i) the date that is one year after such Letter of
Credit is issued (or, in the case of any renewal or extension thereof, one year
after such renewal or extension) and (ii) the date that is five Business Days
before the Revolving Maturity Date.

 

(d) Participations. Effective upon the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the applicable LC Issuing Bank or the Revolving
Lenders, the applicable LC Issuing Bank grants to each Revolving Lender, and
each Revolving Lender acquires from such LC Issuing Bank, a participation in
such Letter of Credit equal to such Lender’s Revolving Percentage of the
aggregate amount available to be drawn thereunder. Pursuant to such
participations, each Revolving Lender agrees to pay to the Administrative Agent,
for the account of the applicable LC Issuing Bank, such Lender’s Revolving
Percentage of (i) each LC Disbursement made by such LC Issuing Bank and not
reimbursed by the Borrower on the date due as provided in Section 2.04(e) and
(ii) any reimbursement payment required to be refunded to the Borrower for any
reason. Each Lender’s obligation to acquire participations and make payments
pursuant to this subsection is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including any amendment, renewal or
extension of any Letter of Credit or the occurrence and continuance of a Default
or any reduction or termination of the Commitments, and each such payment shall
be made without any offset, abatement, withholding or reduction whatsoever.

 

(e) Reimbursement. If an LC Issuing Bank makes any LC Disbursement under a
Letter of Credit, the Borrower shall reimburse such LC Disbursement by paying an
amount equal to such LC Disbursement to the Administrative Agent not later than
12:00 noon, New York City time, on the day that such LC Disbursement is made, if
the Borrower receives notice of such LC Disbursement before 10:00 a.m., New York
City time, on such day, or, if such notice has not been received by the Borrower
before such time on such day, then not later than 12:00 noon, New York City
time, on (i) the Business Day that the Borrower receives such notice, if such
notice is received before 10:00 a.m., New

 

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York City time, on the day of receipt, or (ii) the next Business Day, if such
notice is not received before such time on the day of receipt; provided that the
Borrower may, subject to the conditions to borrowing set forth herein and the
minimum borrowing requirements set forth in Section 2.02(b) or Section 2.18, as
applicable, request in accordance with Section 2.03 or Section 2.18, as the case
may be that such payment be made with the proceeds of a Base Rate Revolving
Borrowing or a Swingline Loan and, to the extent so financed, the Borrower’s
obligation to make such payment shall be discharged and replaced by the
resulting Base Rate Revolving Borrowing or Swingline Loan. If the Borrower fails
to make such payment when due, the Administrative Agent shall notify each
Revolving Lender of the applicable LC Disbursement, the payment then due from
the Borrower in respect thereof and such Lender’s Revolving Percentage thereof.
Promptly after it receives such notice, each Revolving Lender shall pay to the
Administrative Agent its Revolving Percentage of the payment then due from the
Borrower, in the same manner as is provided in Section 2.05 with respect to
Loans made by such Lender (and Section 2.05(b) shall apply, mutatis mutandis, to
such payment obligations of the Revolving Lenders), and the Administrative Agent
shall promptly pay to the applicable LC Issuing Bank the amounts so received by
it from the Revolving Lenders. If a Revolving Lender makes a payment pursuant to
this subsection to reimburse an LC Issuing Bank for any LC Disbursement (other
than by funding Base Rate Revolving Loans as contemplated above), (i) such
payment will not constitute a Loan and will not relieve the Borrower of its
obligation to reimburse such LC Disbursement and (ii) such Revolving Lender will
be subrogated to its pro rata share of such LC Issuing Bank’s claim against the
Borrower for such reimbursement. Promptly after the Administrative Agent
receives any payment from the Borrower pursuant to this subsection, the
Administrative Agent will distribute such payment to the applicable LC Issuing
Bank or, if Revolving Lenders have made payments pursuant to this subsection to
reimburse such LC Issuing Bank, then to such Lenders and such LC Issuing Bank as
their interests may appear.

 

(f) Obligations Absolute. The Borrower’s obligation to reimburse LC
Disbursements as provided in Section 2.04(e) shall be absolute, unconditional
and irrevocable, and shall be performed strictly in accordance with the terms of
this Agreement under any and all circumstances whatsoever and irrespective of
(i) any lack of validity or enforceability of any Letter of Credit or this
Agreement, or any term or provision therein, (ii) any draft or other document
presented under a Letter of Credit proving to be forged, fraudulent or invalid
in any respect or any statement therein being untrue or inaccurate in any
respect, (iii) payment by an LC Issuing Bank under a Letter of Credit against
presentation of a draft or other document that does not comply with the terms of
such Letter of Credit or (iv) any other event or circumstance whatsoever,
whether or not similar to any of the foregoing, that might, but for the
provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrower’s

 

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obligations hereunder. None of the Administrative Agent, the Lenders, the LC
Issuing Banks and their respective Related Parties shall have any liability or
responsibility by reason of or in connection with the issuance or transfer of
any Letter of Credit or any payment or failure to make any payment thereunder
(irrespective of any of the circumstances referred to in the preceding
sentence), or any error, omission, interruption, loss or delay in transmission
or delivery of any draft, notice or other communication under or relating to any
Letter of Credit (including any document required to make a drawing thereunder),
any error in interpretation of technical terms or any consequence arising from
causes beyond the control of any LC Issuing Bank; provided that the foregoing
shall not excuse any LC Issuing Bank from liability to the Borrower to the
extent of any direct damages (as opposed to consequential damages, claims in
respect of which are waived by the Borrower to the extent permitted by
applicable law) suffered by the Borrower that are caused by such LC Issuing
Bank’s failure to exercise care when determining whether drafts and other
documents presented under a Letter of Credit comply with the terms thereof. In
the absence of gross negligence or willful misconduct on the part of any LC
Issuing Bank (as finally determined by a court of competent jurisdiction), such
LC Issuing Bank shall be deemed to have exercised care in each such
determination. Without limiting the generality of the foregoing, the parties
agree that, with respect to documents presented which appear on their face to be
in substantial compliance with the terms of a Letter of Credit, the applicable
LC Issuing Bank may, in its sole discretion, either (A) accept and make payment
upon such documents without responsibility for further investigation, regardless
of any notice or information to the contrary, or (B) refuse to accept and make
payment upon such documents if such documents do not strictly comply with the
terms of such Letter of Credit.

 

(g) Disbursement Procedures. Each LC Issuing Bank shall, promptly after its
receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. Each LC Issuing Bank shall promptly notify the
Administrative Agent and the Borrower by telephone (confirmed by facsimile) of
such demand for payment and whether such LC Issuing Bank has made or will make
an LC Disbursement pursuant thereto; provided that any failure to give or delay
in giving such notice will not relieve the Borrower of its obligation to
reimburse such LC Issuing Bank and the Revolving Lenders with respect to any
such LC Disbursement.

 

(h) Interim Interest. Unless the Borrower reimburses an LC Disbursement in full
on the day it is made, the unpaid amount thereof shall bear interest, for each
day from and including the day on which such LC Disbursement is made to but
excluding the day on which the Borrower reimburses such LC Disbursement, at the
rate per annum then applicable to Base Rate Revolving Loans; provided that, if
the Borrower fails to reimburse such LC Disbursement when due pursuant to
Section 2.04(e), then Section 2.11(c) and 2.11(d) shall apply. Interest accrued
pursuant to this subsection shall be for the account of the

 

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applicable LC Issuing Bank, except that a pro rata share of interest accrued on
and after the day that any Revolving Lender reimburses such LC Issuing Bank for
a portion of such LC Disbursement pursuant to Section 2.04(e) shall be for the
account of such Lender.

 

(i) Replacement of LC Issuing Bank. Any LC Issuing Bank may be replaced at any
time by written agreement among the Borrower, the Administrative Agent, the
replaced LC Issuing Bank and the successor LC Issuing Bank. The Administrative
Agent shall notify the Lenders of any such replacement. At the time any such
replacement becomes effective, the Borrower shall pay all unpaid fees accrued
for the account of the replaced LC Issuing Bank pursuant to Section 2.10(b). On
and after the effective date of any such replacement, (i) the successor LC
Issuing Bank will have all the rights and obligations of the replaced LC Issuing
Bank under this Agreement with respect to Letters of Credit to be issued
thereafter and (ii) references herein to the term “LC Issuing Bank” will be
deemed to refer to such successor or to any previous LC Issuing Bank, or to such
successor and all previous LC Issuing Banks, as the context shall require. After
an LC Issuing Bank is replaced, it will remain a party hereto and will continue
to have all the rights and obligations of an LC Issuing Bank under this
Agreement with respect to Letters of Credit issued by it before such
replacement, but will not be required to issue additional Letters of Credit.

 

(j) Cash Collateralization. If an Event of Default shall occur and be
continuing, on the Business Day that the Borrower receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Revolving Lenders with LC Exposures representing at least
51% of the total LC Exposure) demanding the deposit of cash collateral pursuant
to this subsection, the Borrower shall deposit in its Cash Collateral Account an
amount in cash equal to the LC Exposure as of such date plus any accrued and
unpaid interest thereon; provided that the obligation to deposit such cash
collateral will become effective immediately, and such deposit will become
immediately due and payable, without demand or other notice of any kind, upon
the occurrence of any Event of Default with respect to the Borrower described in
clause (h) or (i) of Article 7. Any amount so deposited (including any earnings
thereon) will be withdrawn from the Borrower’s Cash Collateral Account by the
Administrative Agent and applied to pay LC Reimbursement Obligations as they
become due; provided that (i) if at any time all Events of Default have been
cured or waived, such amount (to the extent not theretofore so applied) will be
returned to the Borrower upon its request and (ii) if at any time the maturity
of the Loans has been accelerated, such amount (to the extent not theretofore so
applied or returned) will be applied to pay the Secured Obligations as provided
in Section 21 of the Security Agreement.

 

Section 2.05. Funding of Revolving Loans. (a) Each Lender making a Revolving
Loan hereunder shall wire the principal amount thereof in immediately

 

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available funds, by 12:00 noon, New York City time, on the proposed date of such
Loan, to the account of the Administrative Agent most recently designated by it
for such purpose by notice to the Lenders. The Administrative Agent shall make
such funds available to the Borrower by promptly crediting the amounts so
received, in like funds, to an account of the Borrower maintained with the
Administrative Agent in New York City and designated by the Borrower in the
applicable Borrowing Request; provided that Base Rate Revolving Loans made to
finance the reimbursement of an LC Disbursement as provided in Section 2.04(e)
will be remitted by the Administrative Agent to the applicable LC Issuing Bank.

 

(b) Unless the Administrative Agent receives notice from a Lender before the
proposed date of any Borrowing that such Lender will not make its share of such
Borrowing available to the Administrative Agent, the Administrative Agent may
assume that such Lender has made such share available on such date in accordance
with Section 2.05(a) and may, in reliance on such assumption, make a
corresponding amount available to the Borrower. In such event, if a Lender has
not in fact made its share of such Borrowing available to the Administrative
Agent, such Lender and the Borrower severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount with interest thereon, for
each day from and including the day such amount is made available to the
Borrower to but excluding the date of payment to the Administrative Agent, at
(i) in the case of such Lender, the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation or (ii) in the case of the Borrower,
the interest rate applicable to Base Rate Loans. If such Lender pays such amount
to the Administrative Agent, such amount shall constitute such Lender’s Loan
included in such Borrowing.

 

Section 2.06. Interest Elections. (a) Each Revolving Borrowing initially shall
be of the Interest Type specified in the applicable Borrowing Request and, in
the case of a Eurodollar Borrowing, shall have an initial Interest Period as
specified in such Borrowing Request. Thereafter, the Borrower may elect to
convert such Borrowing to a different Interest Type or, in the case of a
Eurodollar Borrowing, to continue such Borrowing for one or more additional
Interest Periods, all as provided in this Section. The Borrower may elect
different options with respect to different portions of the affected Borrowing,
in which case each such portion shall be allocated ratably among the Lenders
holding the Loans comprising such Borrowing, and the Loans comprising each such
portion shall be considered a separate Borrowing.

 

(b) To make an election pursuant to this Section, the Borrower shall notify the
Administrative Agent thereof by telephone by the time that a Borrowing Request
would be required under Section 2.03 if the Borrower were requesting that a
Borrowing of the Interest Type resulting from such election be made on the
effective date of such election. Each such telephonic Interest

 

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Election shall be irrevocable and shall be confirmed promptly by hand delivery
or facsimile to the Administrative Agent of a written Interest Election in a
form approved by the Administrative Agent and signed by the Borrower.

 

(c) Each telephonic and written Interest Election shall specify the following
information in compliance with Section 2.02 and subsection (e) of this Section:

 

(i) the Borrowing to which such Interest Election applies and, if different
options are being elected with respect to different portions thereof, the
portions thereof to be allocated to each resulting Borrowing (in which case the
information to be specified pursuant to clauses (iii) and (iv) below shall be
specified for each resulting Borrowing);

 

(ii) the effective date of the election made pursuant to such Interest Election,
which shall be a Business Day;

 

(iii) whether the resulting Borrowing is to be a Base Rate Borrowing or a
Eurodollar Borrowing; and

 

(iv) if the resulting Borrowing is to be a Eurodollar Borrowing, the Interest
Period to be applicable thereto after giving effect to such election, which
shall be a period contemplated by the definition of “Interest Period”.

 

If an Interest Election requests a Eurodollar Borrowing but does not specify an
Interest Period, the Borrower will be deemed to have selected an Interest Period
of one month’s duration.

 

(d) Promptly after it receives an Interest Election, the Administrative Agent
shall advise each Lender as to the details thereof and such Lender’s portion of
each resulting Borrowing.

 

(e) If the Borrower fails to deliver a timely Interest Election with respect to
a Eurodollar Borrowing before the end of an Interest Period applicable thereto,
such Borrowing (unless repaid) will be converted to a Base Rate Borrowing at the
end of such Interest Period. Notwithstanding any contrary provision hereof, if
an Event of Default has occurred and is continuing and the Administrative Agent,
at the request of the Required Lenders, so notifies the Borrower, then, so long
as an Event of Default is continuing, (i) no outstanding Borrowing may be
converted to or continued as a Eurodollar Borrowing and (ii) each Eurodollar
Borrowing (unless repaid) will be converted to a Base Rate Borrowing at the end
of the Interest Period applicable thereto on the date of such notice.

 

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Section 2.07. Termination or Reduction of Commitments. (a) Unless previously
terminated, the Revolving Commitments will terminate on the Revolving Maturity
Date.

 

(b) The Borrower may at any time terminate, or from time to time reduce, the
Commitments; provided that (i) the amount of each reduction of the Commitments
shall be an integral multiple of $1,000,000 and not less than $2,000,000 and
(ii) the Borrower shall not terminate or reduce the Revolving Commitments if,
after giving effect thereto and to any concurrent prepayment of Revolving Loans
pursuant to Section 2.09, the total Revolving Exposures would exceed the total
Revolving Commitments.

 

(c) The Borrower shall notify the Administrative Agent of any election to
terminate or reduce the Commitments under Section 2.07(b) at least three
Business Days before the effective date of such termination or reduction,
specifying such election and the effective date thereof. Promptly after it
receives any such notice, the Administrative Agent shall advise the Lenders of
the contents thereof. Each notice delivered by the Borrower pursuant to this
Section will be irrevocable; provided that any such notice terminating the
Revolving Commitments may state that it is conditioned on the effectiveness of
other credit facilities, in which case such notice may be revoked by the
Borrower (by notice to the Administrative Agent on or before the specified
effective date) if such condition is not satisfied. Any termination or reduction
of the Commitments will be permanent and will be made ratably among the Lenders
in accordance with their respective Commitments.

 

Section 2.08. Payment at Maturity; Evidence of Debt. (a) The Borrower
unconditionally promises to pay to the Administrative Agent on the Revolving
Maturity Date, for the account of each Revolving Lender, the then unpaid
principal amount of such Lender’s Revolving Loans.

 

(b) Each Lender shall maintain in accordance with its usual practice an account
or accounts evidencing the indebtedness of the Borrower to such Lender resulting
from each Loan made by such Lender, including the amounts of principal and
interest payable and paid to such Lender from time to time.

 

(c) The Administrative Agent shall maintain accounts in which it shall record
(i) the amount of each Loan made hereunder, the Interest Type thereof and each
Interest Period (if any) applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder for the account of the Lenders and each Lender’s share thereof.

 

(d) The entries made in the accounts maintained pursuant to subsections (b) and
(c) of this Section shall be prima facie evidence of the existence and

 

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amounts of the obligations recorded therein; provided that any failure by any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not affect the Borrower’s obligation to repay the Loans in
accordance with the terms of this Agreement.

 

(e) Any Lender may request that Loans made by it be evidenced by a promissory
note. In such event, the Borrower shall prepare, execute and deliver to such
Lender a promissory note payable to the order of such Lender (or, if requested
by such Lender, to such Lender and its registered assigns) and in a form
approved by the Administrative Agent. Thereafter, the Loans evidenced by such
promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 9.04) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).

 

Section 2.09. Optional Prepayments. (a) Optional Prepayments. The Borrower will
have the right at any time to prepay any Borrowing in whole or in part, subject
to the provisions of this Section.

 

(b) Allocation of Prepayments. Before any optional prepayment of Borrowings
hereunder, the Borrower shall select the Borrowing or Borrowings to be prepaid
and shall specify such selection in the notice of such prepayment pursuant to
Section 2.09(e).

 

(c) Partial Prepayments. Each partial prepayment of a Borrowing shall be in an
amount that would be permitted under Section 2.02(b) for a Borrowing of the same
Interest Type. Each partial prepayment of a Borrowing shall be applied ratably
to the Loans included in such Borrowing.

 

(d) Accrued Interest. Each prepayment of a Borrowing shall be accompanied by
accrued interest to the extent required by Section 2.11.

 

(e) Notice of Prepayments. The Borrower shall notify the Administrative Agent by
telephone (confirmed by facsimile) of any prepayment of any Borrowing hereunder
(i) in the case of a Eurodollar Borrowing, not later than 11:00 a.m., New York
City time, three Business Days before the date of prepayment and (ii) in the
case of a Base Rate Borrowing, not later than 11:00 a.m., New York City time,
one Business Day before the date of prepayment. Each such notice shall be
irrevocable and shall specify the prepayment date, the principal amount of each
Borrowing or portion thereof to be prepaid; provided that, if a notice of
optional prepayment is given in connection with a conditional notice of
termination of the Revolving Commitments as contemplated by Section 2.07(c),
then such notice of prepayment may be revoked if such notice of termination is
revoked in accordance with Section 2.07(c). Promptly after it receives any such
notice, the Administrative Agent shall advise the Lenders of the contents
thereof.

 

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Section 2.10. Fees. (a) The Borrower shall pay to the Administrative Agent for
the account of each Lender a commitment fee, which shall accrue at the
Applicable Rate on the average daily unused amount of the Commitment of such
Lender. Such fees shall accrue during the period from the Effective Date to the
date on which such Commitment terminates. Accrued commitment fees will be
payable in arrears in respect of the Revolving Commitments, on the last day of
March, June, September and December of each year and the day when the Revolving
Commitments terminate, commencing on the first such day to occur after the date
hereof. All commitment fees will be computed on the basis of a year of 360 days
and will be payable for the actual number of days elapsed (including the first
day but excluding the last day). For purposes of computing commitment fees with
respect to Revolving Commitments, a Lender’s Revolving Commitment will be deemed
to be used to the extent of its outstanding Revolving Loans and LC Exposure (and
its Swingline Exposure will be disregarded for such purpose).

 

(b) The Borrower shall pay (i) to the Administrative Agent for the account of
each Revolving Lender a participation fee with respect to its participations in
Letters of Credit, which shall accrue for each day, at the Applicable Rate that
applies to Eurodollar Revolving Loans, on the amount of such Lender’s LC
Exposure (excluding any portion thereof attributable to unreimbursed LC
Disbursements) on such day, during the period from the Effective Date to the
later of the date on which such Lender’s Revolving Commitment terminates and the
date on which such Lender ceases to have any LC Exposure, and (ii) to each LC
Issuing Bank a fronting fee, which shall accrue at the rate of 1/4 of 1% per
annum on the average daily amount of the LC Exposure (excluding any portion
thereof attributable to unreimbursed LC Disbursements) during the period from
the Effective Date to the later of the date on which the Revolving Commitments
terminate and the date on which there ceases to be any LC Exposure, as well as
each LC Issuing Bank’s standard fees with respect to issuing, amending, renewing
or extending any Letter of Credit or processing drawings thereunder.
Participation fees and fronting fees accrued through the last day of March,
June, September and December of each year will be payable on the third Business
Day following such last day, commencing on the first such date to occur after
the Effective Date; provided that all such fees accrued to the date on which the
Revolving Commitments terminate will be payable on such date, and any such fees
accruing after such date will be payable on demand. Any other fees payable to
any LC Issuing Bank pursuant to this subsection will be payable within 10 days
after demand. All such participation fees and fronting fees will be computed on
the basis of a year of 360 days and will be payable for the actual number of
days elapsed (including the first day but excluding the last day).

 

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(c) The Borrower shall pay to the Administrative Agent, for its own account,
fees payable in the amounts and at the times separately agreed upon by the
Borrower and the Administrative Agent.

 

(d) All fees payable hereunder shall be paid on the dates due, in immediately
available funds, to the Administrative Agent (or to any LC Issuing Bank, in the
case of fees payable to it) for distribution, in the case of commitment fees and
participation fees, to the Lenders entitled thereto. Fees paid shall not be
refundable under any circumstances.

 

Section 2.11. Interest. (a) The Base Rate Loans shall bear interest for each day
at the Alternate Base Rate plus the Applicable Rate. The Swingline Loans shall
bear interest at the rate applicable to Base Rate Revolving Loans.

 

(b) The Loans comprising each Eurodollar Borrowing shall bear interest for each
Interest Period in effect for such Borrowing at the Adjusted LIBO Rate for such
Interest Period plus the Applicable Rate.

 

(c) Notwithstanding the foregoing, if any principal of or interest on any Loan
or any fee or other amount payable by the Borrower hereunder is not paid when
due, whether at stated maturity, upon acceleration or otherwise, such overdue
amount shall bear interest, after as well as before judgment, at a rate per
annum equal to (i) in the case of overdue principal of any Loan, 2% plus the
rate otherwise applicable to such Loan as provided in the preceding subsections
of this Section or (ii) in the case of any other amount, 2% plus the rate
applicable to Base Rate Revolving Loans.

 

(d) Interest accrued on each Revolving Loan shall be payable in arrears on each
Interest Payment Date for such Loan and upon termination of the Revolving
Commitments; provided that (i) interest accrued pursuant to Section 2.11(c)
shall be payable on demand, (ii) upon any repayment of any Loan (except a
prepayment of a Base Rate Revolving Loan before the end of the Revolving
Availability Period), interest accrued on the principal amount repaid shall be
payable on the date of such repayment and (iii) upon any conversion of a
Eurodollar Loan before the end of the current Interest Period therefor, interest
accrued on such Loan shall be payable on the effective date of such conversion.

 

(e) All interest hereunder will be computed on the basis of a year of 360 days,
except that interest computed by reference to the Alternate Base Rate at times
when the Alternate Base Rate is based on the Prime Rate will be computed on the
basis of a year of 365 days (or 366 days in a leap year), and in each case will
be payable for the actual number of days elapsed (including the first day but
excluding the last day). Each applicable Alternate Base Rate or Adjusted LIBO
Rate shall be determined by the Administrative Agent, and its determination
thereof will be conclusive absent manifest error.

 

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Section 2.12. Alternate Rate of Interest. If before the beginning of any
Interest Period for a Eurodollar Borrowing:

 

(i) the Administrative Agent determines (which determination will be conclusive
absent manifest error) that adequate and reasonable means do not exist for
ascertaining the Adjusted LIBO Rate for such Interest Period; or

 

(ii) Lenders whose Loans to be included in such Borrowing aggregate at least 51%
thereof advise the Administrative Agent that the Adjusted LIBO Rate for such
Interest Period will not adequately and fairly reflect the cost to such Lenders
of making or maintaining such Loans for such Interest Period;

 

then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or facsimile (such notice, an “Alternate Interest Rate
Notice”) as promptly as practicable thereafter and, until the Administrative
Agent notifies the Borrower and the Lenders that the circumstances giving rise
to such Alternate Interest Rate Notice no longer exist, (i) any Interest
Election that requests the conversion of any Borrowing to, or continuation of
any Borrowing as, a Eurodollar Borrowing will be ineffective and (ii) if any
Borrowing Request requests a Eurodollar Borrowing, such Borrowing will be made
as a Base Rate Borrowing. The Administrative Agent will promptly notify the
Borrower and the Lenders if it determines that the circumstances giving rise to
the Alternate Interest Rate Notice no longer exist.

 

Section 2.13. Increased Costs. (a) If any Change in Law shall:

 

(i) impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, or credit
extended by, any Lender (except any such reserve requirement reflected in the
Adjusted LIBO Rate) or any LC Issuing Bank; or

 

(ii) impose on any Lender or any LC Issuing Bank or the London interbank market
any other condition affecting this Agreement or Eurodollar Loans made by such
Lender or any Letter of Credit or participation therein;

 

and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make Eurodollar Loans) or to increase the cost to such Lender or
such LC Issuing Bank of participating in, issuing or maintaining any Letter of
Credit or to reduce any amount received or receivable by such Lender or such LC
Issuing Bank hereunder (whether of principal, interest or otherwise), then the
Borrower shall

 

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pay to such Lender or such LC Issuing Bank, as the case may be, such additional
amount or amounts as will compensate it for such additional cost incurred or
reduction suffered.

 

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

 

(c) A certificate of a Lender or an LC Issuing Bank setting forth the amount or
amounts necessary to compensate it or its holding company (including reasonably
detailed calculations of such amount), as the case may be, as specified in
subsection (a) or (b) of this Section shall be delivered to the Borrower and
shall be conclusive absent manifest error. The Borrower shall pay such Lender or
such LC Issuing Bank, as the case may be, the amount shown as due on any such
certificate within 10 days after receipt thereof.

 

(d) Failure or delay by any Lender or any LC Issuing Bank to demand compensation
pursuant to this Section will not constitute a waiver of its right to demand
such compensation; provided that the Borrower will not be required to compensate
a Lender or an LC Issuing Bank pursuant to this Section for any increased cost
or reduction incurred more than 270 days before it notifies the Borrower of the
Change in Law giving rise to such increased cost or reduction and of its
intention to claim compensation therefor. However, if the Change in Law giving
rise to such increased cost or reduction is retroactive, then the 270-day period
referred to above will be extended to include the period of retroactive effect
thereof.

 

Section 2.14. Break Funding Payments. If (a) any principal of any Eurodollar
Loan is repaid on a day other than the last day of an Interest Period applicable
thereto (including, without limitation, as a result of an Event of Default or
pursuant to Section 2.09), (b) any Eurodollar Loan is converted on a day other
than the last day of an Interest Period applicable thereto, (c) the Borrower
fails to borrow, convert, continue or prepay any Revolving Loan on the date
specified in any notice delivered pursuant hereto (regardless of whether such
notice may be

 

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revoked under Section 2.09(e) and is revoked in accordance therewith), or (d)
any Eurodollar Loan is assigned on a day other than the last day of an Interest
Period applicable thereto as a result of a request by the Borrower pursuant to
Section 2.17, then the Borrower shall compensate each Lender for its loss, cost
and expense attributable to such event. In the case of a Eurodollar Loan, such
loss, cost and expense to any Lender shall be deemed to include an amount
determined by such Lender to be the excess, if any, of (i) the amount of
interest that would have accrued on the principal amount of such Loan had such
event not occurred, at the Adjusted LIBO Rate that would have been applicable to
such Loan, for the period from the date of such event to the end of the then
current Interest Period therefor (or, in the case of a failure to borrow,
convert or continue, the Interest Period that would have begun on the date of
such failure), over (ii) the amount of interest that would accrue on such
principal amount for such period at the interest rate which such Lender would
bid were it to bid, at the beginning of such period, for dollar deposits of a
comparable amount and period from other banks in the eurodollar market. A
certificate of any Lender setting forth any amount or amounts that such Lender
is entitled to receive pursuant to this Section shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay
such Lender the amount shown as due on any such certificate within 10 days after
receipt thereof.

 

Section 2.15. Taxes. (a) All payments by the Borrower under the Loan Documents
shall be made free and clear of and without deduction for any Indemnified Taxes
or Other Taxes; provided that, if the Borrower shall be required to deduct any
Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable
will be increased as necessary so that, after all required deductions (including
deductions applicable to additional sums payable under this Section) are made,
each relevant Lender Party receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower shall make such
deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.

 

(b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.

 

(c) The Borrower shall indemnify each Lender Party, within 10 days after written
demand therefor, for the full amount of any Indemnified Taxes or Other Taxes
paid by such Lender Party with respect to any payment by or obligation of the
Borrower under the Loan Documents (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section)
and any penalties, interest and reasonable expenses arising therefrom or with
respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
A certificate as to the amount of any such payment (including

 

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reasonably detailed calculations of such amount) delivered to the Borrower by a
Lender Party on its own behalf, or by the Administrative Agent on behalf of a
Lender Party, shall be conclusive absent manifest error.

 

(d) As soon as practicable after the Borrower pays any Indemnified Taxes or
Other Taxes to a Governmental Authority, the Borrower shall deliver to the
Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.

 

(e) Any Foreign Lender that is entitled to an exemption from or reduction of
withholding tax under the laws of the United States, or any treaty to which the
United States is a party, with respect to payments under this Agreement shall
deliver to the Borrower (with a copy to the Administrative Agent), at the time
or times prescribed by applicable law, such properly completed and executed
documentation prescribed by applicable law or reasonably requested by the
Borrower as will permit such payments to be made without withholding or at a
reduced rate, provided that such Foreign Lender has received written notice from
the Borrower advising it of the availability of such exemption or reduction and
supplying all applicable documentation. If any such Foreign Lender becomes
subject to any Tax because it fails to comply with this subsection as and when
prescribed by applicable law, the Borrower shall take such steps as such Foreign
Lender shall reasonably request to assist such Foreign Lender to recover such
Tax.

 

(f) If any Lender Party shall become aware that it is entitled to claim a refund
in respect of any Indemnified Taxes or Other Taxes as to which it has been
indemnified by the Borrower or with respect to which the Borrower has paid
increased amounts hereunder, it shall promptly notify the Borrower of such
refund. Within 30 days after receipt of a request by the Borrower, a Lender
Party shall, at the Borrower’s expense, make a claim to a Governmental Authority
for a refund if, in the judgment of such Lender Party, the making of such claim
will not (i) be disadvantageous to it or (ii) require the disclosure of
information the Lender Party deems to be confidential. The Lender Party will not
be required to institute any other administrative or judicial proceedings to
obtain any such refund. If the Lender Party receives a refund specifically
related to Indemnified Taxes or Other Taxes as to which it has been indemnified
by the Borrower, or with respect to which the Borrower has paid increased
amounts hereunder, it shall within 30 days after receipt of such refund pay over
the amount of such refund to the Borrower (but only to the extent of indemnity
payments made, or additional amounts paid, by the Borrower with respect to the
Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket
expenses of such Lender Party related to claiming such refund. The Borrower
shall, upon the request of such Lender Party repay the amount paid over to the
Borrower (plus penalties, interest or other charges due to

 

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the appropriate Governmental Authority in connection therewith) to such Lender
Party in the event such Lender Party is required to repay such refund to such
Governmental Authority.

 

Section 2.16. Payments Generally; Pro Rata Treatment; Sharing of Set-Offs. (a)
The Borrower shall make each payment required to be made by it under the Loan
Documents (whether of principal, interest or fees, or reimbursement of LC
Disbursements, or amounts payable under Section 2.13, 2.14 or 2.15 or otherwise)
before the time expressly required under the relevant Loan Document for such
payment (or, if no such time is expressly required, before 12:00 noon, New York
City time), on the date when due, in immediately available funds, without
set-off or counterclaim. Any amount received after such time on any day may, in
the discretion of the Administrative Agent, be deemed to have been received on
the next succeeding Business Day for purposes of calculating interest thereon.
All such payments shall be made to the Administrative Agent at its offices
specified in Section 9.01(a)(ii) (or at such other offices as may be designated
by the Administrative Agent from time to time by written notice to the
Borrower), except payments to be made directly to an LC Issuing Bank or a
Swingline Lender as expressly provided herein and except that payments pursuant
to Sections 2.13, 2.14, 2.15 and 9.03 shall be made directly to the Persons
entitled thereto and payments pursuant to other Loan Documents shall be made to
the Persons specified therein. The Administrative Agent shall distribute any
such payment received by it for the account of any other Person to the
appropriate recipient promptly after receipt thereof. If any payment under any
Loan Document shall be due on a day that is not a Business Day, the date for
payment will be extended to the next succeeding Business Day and, if such
payment accrues interest, interest thereon will be payable for the period of
such extension. All payments under each Loan Document shall be made in dollars.

 

(b) If at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, unreimbursed LC
Disbursements, interest and fees then due hereunder, such funds shall be applied
(i) first, to pay interest and fees then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of interest and fees
then due to such parties, and (ii) second, to pay principal and unreimbursed LC
Disbursements then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of principal and unreimbursed LC Disbursements then
due to such parties.

 

(c) If any Lender shall, by exercising any right of set-off or counterclaim or
otherwise, obtain payment in respect of any principal of or interest on any of
its Loans or any of its participations in LC Disbursements or Swingline Loans
resulting in such Lender receiving payment of a greater proportion of the
aggregate amount of its Loans and participations in LC Disbursements and
Swingline Loans and accrued interest thereon than the

 

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proportion received by any other Lender, then the Lender receiving such greater
proportion shall purchase (for cash at face value) participations in the Loans
and participations in LC Disbursements and Swingline Loans of other Lenders to
the extent necessary so that the benefit of all such payments shall be shared by
the Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Loans and participations in LC
Disbursements and Swingline Loans; provided that (i) if any such participations
are purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this subsection shall not apply to any payment made by the
Borrower pursuant to and in accordance with the express terms of this Agreement
or any payment obtained by a Lender as consideration for the assignment of or
sale of a participation in any of its Loans or participations in LC
Disbursements to any assignee or participant, other than to the Borrower or any
Subsidiary or Affiliate thereof (as to which the provisions of this subsection
shall apply). The Borrower consents to the foregoing and agrees, to the extent
it may effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of set-off and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of the Borrower in the amount
of such participation.

 

(d) Unless, before the date on which any payment is due to the Administrative
Agent for the account of one or more Lender Parties hereunder, the
Administrative Agent receives from the Borrower notice that the Borrower will
not make such payment, the Administrative Agent may assume that the Borrower has
made such payment on such date in accordance herewith and may, in reliance on
such assumption, distribute to each relevant Lender Party the amount due to it.
In such event, if the Borrower has not in fact made such payment, each Lender
Party severally agrees to repay to the Administrative Agent forthwith on demand
the amount so distributed to such Lender Party with interest thereon, for each
day from and including the day such amount is distributed to it to but excluding
the day it repays the Administrative Agent, at the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation.

 

(e) If any Lender fails to make any payment required to be made by it pursuant
to Section 2.04(d), 2.04(e), 2.05(b), 2.16(d) or 9.03(c), the Administrative
Agent may, in its discretion (notwithstanding any contrary provision hereof),
apply any amounts thereafter received by the Administrative Agent for the
account of such Lender to satisfy such Lender’s obligations under such Sections
until all such unsatisfied obligations are fully paid.

 

Section 2.17. Lender’s Obligation to Mitigate; Replacement of Lenders. (a) If
any Lender requests compensation under Section 2.13, or if the Borrower is

 

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required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.15, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 2.13 or 2.15, as the case may be, in the
future, (ii) would not subject such Lender to any unreimbursed cost or expense
and (iii) would not otherwise be disadvantageous to such Lender. The Borrower
shall pay all reasonable costs and expenses incurred by any Lender in connection
with any such designation or assignment.

 

(b) If any Lender requests compensation under Section 2.13, or if the Borrower
is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.15, or if any
Lender defaults in its obligation to fund Loans hereunder, then the Borrower
may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign, without recourse (in
accordance with and subject to the restrictions contained in Section 9.04), all
its interests, rights and obligations under this Agreement to an assignee that
shall assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment); provided that (i) the Borrower shall have received the
prior written consent of the Administrative Agent (and, if a Revolving
Commitment is being assigned, each LC Issuing Bank and the Swingline Lenders,
which consents shall not unreasonably be withheld, (ii) such Lender shall have
received payment of an amount equal to the outstanding principal of its Loans
and participations in LC Disbursements and Swingline Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrower (in the case of all other amounts) and (iii) in the case
of any such assignment resulting from a claim for compensation under Section
2.13 or payments required to be made pursuant to Section 2.15, such assignment
will result in a material reduction in such compensation or payments. A Lender
shall not be required to make any such assignment if, prior thereto, as a result
of a waiver by such Lender or otherwise, the circumstances entitling the
Borrower to require such assignment cease to apply.

 

Section 2.18. Swingline Loans. (a) Subject to the terms and conditions set forth
herein, each Swingline Lender agrees to make Swingline Loans to the Borrower
from time to time during the Revolving Availability Period, in each case in an
amount that (i) is an aggregate principal amount of $500,000 or an integral
multiple of $500,000, (ii) will not result in the aggregate outstanding
principal amount of all Swingline Loans made by all Swingline Lenders exceeding
$10,000,000 and (iii) will not result in the total Revolving Exposures exceeding
the total Revolving Commitments; provided that no Swingline Lender

 

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will be required to make a Swingline Loan to refinance an outstanding Swingline
Loan. Within the foregoing limits and subject to the terms and conditions set
forth herein, the Borrower may borrow, prepay and reborrow Swingline Loans.

 

(b) To request a Swingline Loan, the Borrower shall notify the Administrative
Agent of such request by telephone (confirmed by telecopy), not later than 11:00
a.m., New York City time, on the proposed date of borrowing. Each such notice
shall be irrevocable and shall specify the Swingline Lender requested to provide
such borrowing and the requested date (which shall be a Business Day) and amount
of the requested Swingline Loan. The Administrative Agent shall promptly advise
the relevant Swingline Lender of any such notice received from the Borrower. The
relevant Swingline Lender shall make each Swingline Loan available to the
Borrower by means of a credit to the Borrower’s general deposit account with
such Swingline Lender (or, if such Swingline Loan is made to finance the
reimbursement of an LC Disbursement as provided in Section 2.04(e), by
remittance to the LC Issuing Bank) by 3:00 p.m., New York City time, on the
requested date of such Swingline Loan.

 

(c) The Borrower unconditionally promises to pay to each Swingline Lender the
then unpaid principal amount of each Swingline Loan made by it on the fifth
Business Day after such Swingline Loan is made; provided that on each day that a
Revolving Borrowing is made, the Borrower shall repay all Swingline Loans that
were outstanding when such Borrowing was requested.

 

(d) The Borrower will have the right at any time to prepay any Swingline Loan in
full or in part in an amount aggregating $500,000 or any integral multiple of
$500,000. The Borrower shall notify the relevant Swingline Lender and the
Administrative Agent, by telephone (confirmed by telecopy), of the date and
amount of any such prepayment not later than 11:00 a.m., New York City time, on
the date of prepayment. Each such prepayment shall be made directly to the
relevant Swingline Lender and shall be accompanied by accrued interest on the
amount prepaid.

 

(e) Each Swingline Lender may, by written notice given to the Administrative
Agent not later than 12:00 noon, New York City time, on any Business Day,
require the Revolving Lenders to acquire participations on such Business Day in
all or a portion of its Swingline Loans then outstanding. Such notice shall
specify the aggregate amount of Swingline Loans in which Revolving Lenders will
participate. Promptly after it receives such notice, the Administrative Agent
shall notify each Revolving Lender as to the details thereof and such Lender’s
Revolving Percentage of such aggregate amount of Swingline Loans. Each Revolving
Lender agrees, upon receipt of such notification, to pay to the Administrative
Agent, for the account of the relevant Swingline Lender, such Lender’s Revolving
Percentage of such aggregate amount of Swingline Loans. Each Revolving Lender’s
obligation to acquire participations in Swingline Loans

 

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pursuant to this subsection is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including the occurrence and
continuance of a Default or any reduction or termination of the Commitments, and
each payment by a Revolving Lender to acquire such participations shall be made
without any offset, abatement, withholding or reduction whatsoever. Each
Revolving Lender shall comply with its obligation under this subsection by wire
transfer of immediately available funds, in the same manner as provided in
Section 2.05 with respect to Loans made by such Lender (and Section 2.05(b)
shall apply, mutatis mutandis, to the payment obligations of the Revolving
Lenders under this subsection), and the Administrative Agent shall promptly pay
to the relevant Swingline Lender the amounts so received by it from the
Revolving Lenders. The Administrative Agent shall notify the Borrower of any
participations in Swingline Loans acquired pursuant to this subsection, and
thereafter payments in respect of such Swingline Loans shall be made to the
Administrative Agent and not to the relevant Swingline Lender. Any amounts
received by a Swingline Lender from the Borrower (or any other party on behalf
of the Borrower) in respect of its Swingline Loan after such Swingline Lender
receives the proceeds of a sale of participations therein shall be promptly
remitted to the Administrative Agent, which shall promptly remit any such
amounts received by it to the Revolving Lenders that shall have made payments
pursuant to this subsection and to the relevant Swingline Lender, as their
interests may appear. The purchase of participations in Swingline Loans pursuant
to this subsection will not relieve the Borrower of any default in the payment
thereof.

 

Section 2.19. Optional Increase in Commitments. At any time, if no Default shall
have occurred and be continuing (or would result after giving effect thereto),
the Borrower, may, if it so elects, increase the aggregate amount of the
Commitments (each such increase to be in an aggregate amount that is an integral
multiple of $1,000,000 and not less than $5,000,000), either by designating a
financial institution (or financial institutions) not theretofore a Lender to
become a Lender (such designation to be effective only with the prior written
consent of the Administrative Agent and each LC Issuing Bank, which consent will
not be unreasonably withheld or delayed, and only if such financial institution
accepts a Commitment in an aggregate amount that is an integral multiple of
$1,000,000 and not less than $5,000,000), or by agreeing with an existing Lender
that such Lender’s Commitment shall be increased. Upon execution and delivery by
the Borrower and such Lender or other financial institution of an instrument (a
“Commitment Acceptance”) substantially in the form of Exhibit D hereto, such
existing Lender shall have a Commitment as therein set forth or such other
financial institution shall become a Lender with a Commitment as therein set
forth and all the rights and obligations of a Lender with such a Commitment
hereunder; provided:

 

(a) that the Borrower shall provide prompt notice of such increase to the
Administrative Agent, who shall promptly notify the Lenders;

 

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(b) that the Borrower shall have delivered to the Administrative Agent a copy of
the Commitment Acceptance;

 

(c) that the amount of such increase, together with all other increases in the
aggregate amount of the Commitments pursuant to this Section 2.19 since the date
of this Amended Agreement, does not exceed $25,000,000;

 

(d) that, before and after giving effect to such increase, the representations
and warranties of the Borrower contained in Article 3 of this Agreement shall be
true and correct in all material respects; and

 

(e) that the Administrative Agent shall have received such evidence (including
an opinion of Borrower’s counsel) as it may reasonably request to confirm the
Borrower’s due authorization of the transactions contemplated by this Section
2.19 and the validity and enforceability of the obligations of the Borrower
resulting therefrom.

 

On the date of any such increase, the Borrower shall be deemed to have
represented to the Administrative Agent and the Lenders that the conditions set
forth in clauses (a) through (e) above have been satisfied.

 

Upon any increase in the aggregate amount of the Commitments pursuant to this
Section 2.19:

 

(x) within five Business Days, in the case of any Base Rate Borrowings then
outstanding, and at the end of the then current Interest Period with respect
thereto, in the case of any Eurodollar Borrowings then outstanding, the Borrower
shall prepay such Borrowing in its entirety and, to the extent the Borrower
elects to do so and subject to the conditions specified in Article 4, the
Borrower shall reborrow Loans from the Lenders in proportion to their respective
Commitments after giving effect to such increase, until such time as all
outstanding Loans are held by the Lenders in such proportion; and

 

(y) each existing Lender whose Commitment has not increased pursuant to this
Section 2.19 (each, a “Non-IncreasingLender”) shall be deemed, without further
action by any party hereto, to have sold to each Lender whose Commitment has
been assumed or increased under this Section 2.19 (each, an
“IncreasedCommitmentLender”), and each Increased Commitment Lender shall be
deemed, without further action by any party hereto, to have purchased from each
Non-Increasing Lender, a participation (on the terms specified in 2.04(d) and
Section 2.18(e) respectively) in each outstanding Letter of Credit and each
Swingline Loan in which such Non-Increasing Lender has acquired a participation
in an amount equal to such Increased Commitment Lender’s Revolving

 

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Percentage thereof, until such time as all LC Exposures and Swingline Exposures
are held by the Lenders in proportion to their respective Commitments after
giving effect to such increase.

 

ARTICLE 3

REPRESENTATIONS AND WARRANTIES

 

The Borrower represents and warrants to the Lender Parties that:

 

Section 3.01. Organization; Powers. Each Borrower Group Company is duly
organized, validly existing and to the extent applicable in good standing under
the laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where failures
to do so, in the aggregate, could not reasonably be expected to result in a
Material Adverse Effect, is qualified to do business in, and is in good standing
in, every jurisdiction where such qualification is required.

 

Section 3.02. Authorization; Enforceability. (a) The Financing Transactions to
be entered into by each Borrower Group Company are within its corporate powers
and have been duly authorized by all necessary corporate and, if required,
stockholder action. This Agreement has been duly executed and delivered by the
Borrower and constitutes, and each other Loan Document to which any Credit Party
is to be a party, when executed and delivered by such Credit Party, will
constitute, a legal, valid and binding obligation of the Borrower or such Credit
Party, as the case may be, in each case enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
and other laws affecting creditors’ rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.

 

(b) The Security Documents create valid security interests in, and first
mortgage Liens on, the Collateral purported to be covered thereby, which
security interests and mortgage Liens are and will remain perfected security
interests and mortgage Liens, prior to all other Liens (other than Liens not
securing Debt which rank senior to such security interests and mortgage Liens by
operation of law and other Permitted Liens and Permitted Encumbrances (as such
term is defined in the applicable Mortgage)). Each of the representations and
warranties made by each Subsidiary Guarantor in the Security Documents is true
and correct in all material respects.

 

Section 3.03. Governmental Approvals; No Conflicts. The Financing Transactions
(a) do not require any consent or approval of, registration or filing with, or
other action by, any Governmental Authority, except (i) such as have been
obtained or made and are in full force and effect and (ii) filings necessary to

 

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perfect the Transaction Liens, (b) will not violate any applicable law or
regulation or the charter, by-laws or other organizational documents of any
Borrower Group Company or any order of any Governmental Authority, (c) will not
violate or result in a default under any indenture, agreement or other
instrument binding upon any Borrower Group Company or any of its properties, or
give rise to a right thereunder to require any Borrower Group Company to make
any payment and (d) will not result in the creation or imposition of any Lien
(other than the Transaction Liens) on any property of any Borrower Group
Company.

 

Section 3.04. Financial Statements; No Material Adverse Change. (a) The Borrower
has heretofore furnished to the Lenders (i) its consolidated balance sheet as of
September 30, 2004 and the related consolidated statements of income,
stockholders’ equity and cash flows for the Fiscal Year then ended, reported on
by Ernst & Young LLP, independent public accountants, and (ii) its unaudited
consolidated balance sheets as of December 31, 2004 and March 31, 2005 and the
related unaudited consolidated statements of income, stockholders’ equity and
cash flows for the Fiscal Quarters then ended and for the portions of the Fiscal
Year then ended, all certified by its chief financial officer. Such financial
statements present fairly, in all material respects, the financial position of
the Borrower and its consolidated Subsidiaries as of such dates and their
results of operations and cash flows for such periods in accordance with GAAP,
subject to normal year-end adjustments and the absence of footnotes in the case
of the statements referred to in clause (ii) above.

 

(b) After giving effect to the Financing Transactions, none of the Borrower
Group Companies has, as of the Effective Date, any material contingent
liabilities, unusual long-term commitments or unrealized losses, except as
disclosed in the financial statements referred to above or the notes thereto and
except for the Disclosed Matters.

 

(c) Since September 30, 2004, there has been no material adverse change in the
business, assets, operations, prospects or condition, financial or otherwise, of
the Borrower Group Companies, taken as a whole.

 

Section 3.05. Properties. (a) Each Borrower Group Company has good title to, or
valid leasehold interests in, all real and personal property material to its
business (including all its Mortgaged Properties), except for minor defects in
title that do not materially interfere with its ability to conduct its business
as currently conducted or to utilize such properties for their intended purposes
and except as may be disclosed in the title reports previously delivered to the
Administrative Agent.

 

(b) Each Borrower Group Company owns, or is licensed to use, all trademarks,
tradenames, copyrights, patents and other intellectual property material to its
business, and the use thereof by the Borrower Group Companies

 

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does not infringe upon the rights of any other Person, except for infringements
that, in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect.

 

(c) Schedule 3.05 sets forth the correct address and a brief description of each
real property that is owned or leased by each of the Borrower Group Companies as
of the Effective Date.

 

(d) As of the Effective Date, no Credit Party has received notice of, or has
knowledge of, any pending or contemplated condemnation proceeding affecting any
Mortgaged Property or any sale or disposition thereof in lieu of condemnation.
Neither any Mortgaged Property nor any interest therein is subject to any right
of first refusal, option or other contractual right to purchase such Mortgaged
Property or interest therein.

 

Section 3.06. Litigation and Environmental Matters. (a) Except for the Disclosed
Matters, there are no actions, suits or proceedings by or before any arbitrator
or Governmental Authority pending against or, to the knowledge of the Borrower,
threatened against or affecting any Borrower Group Company (i) as to which there
is a reasonable possibility of adverse determinations that, in the aggregate,
could reasonably be expected to result in a Material Adverse Effect or (ii) that
involve the legality, validity or enforceability of any of the Loan Documents or
the Financing Transactions.

 

(b) Except for the Disclosed Matters and except for other matters that, in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect, no Borrower Group Company (i) has failed to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or
other approval required under any Environmental Law, (ii) is subject to any
Environmental Liability, (iii) has received notice of any claim with respect to
any Environmental Liability or (iv) knows of any basis for any Environmental
Liability.

 

(c) Since the date of this Agreement, there has been no change in the status of
the Disclosed Matters that, individually or in the aggregate, has resulted in,
or materially increased the likelihood of, a Material Adverse Effect.

 

Section 3.07. Compliance with Laws and Agreements. Each Borrower Group Company
is in compliance with all laws, regulations and orders of any Governmental
Authority applicable to it or its property and all indentures, agreements and
other instruments binding on it or its property, except where failures to do so,
in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect. No Default has occurred and is continuing.

 

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Section 3.08. Investment and Holding Company Status. No Borrower Group Company
is (a) an “investment company” as defined in, or subject to regulation under,
the Investment Company Act of 1940 or (b) a “holding company” or “subsidiary
company” of a holding company as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935.

 

Section 3.09. Taxes. Each Borrower Group Company has timely filed or caused to
be filed all Tax returns and reports required to have been filed by it and has
paid or caused to be paid all Taxes required to have been paid by it, except (a)
any Taxes that are being contested in good faith by appropriate proceedings and
for which the relevant Borrower Group Company has set aside on its books
adequate reserves or (b) to the extent that failures to do so, in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect.

 

Section 3.10. ERISA. No ERISA Event has occurred or is reasonably expected to
occur that, when taken together with all other ERISA Events for which liability
is reasonably expected to occur, could reasonably be expected to result in a
Material Adverse Effect. Based on the assumptions used for purposes of Statement
of Financial Accounting Standards No. 87, with respect to all underfunded Plans
in the aggregate, the present value of all the accumulated benefit obligations
thereunder did not, as of the date of the most recent financial statements
reflecting such amounts, exceed by more than $25,000,000 the fair market value
of all the assets thereof.

 

Section 3.11. Disclosure. The Borrower has disclosed to the Lenders all
agreements, instruments and corporate or other restrictions to which any
Borrower Group Company is subject, and all other matters known to any of them,
that, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect. None of the reports, financial statements,
certificates or other information furnished by or on behalf of any Credit Party
to the Administrative Agent or any Lender in connection with the negotiation of
this Agreement or any other Loan Document or delivered hereunder or thereunder
(as modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided that, with respect to projected financial
information, the Borrower represents only that such information was prepared in
good faith based on assumptions believed to be reasonable at the time.

 

Section 3.12. Subsidiaries. Schedule 3.12 sets forth the name of, and the
ownership interest of the Borrower in, each of its Subsidiaries and identifies
each Subsidiary that is a Subsidiary Guarantor, in each case as of the Effective
Date. The Borrower has no Domestic Subsidiaries other than the Subsidiary
Guarantors. All the Borrower’s Subsidiaries are, and will at all times be, fully
consolidated in its consolidated financial statements. No Borrower Group Company
is engaged in any joint venture or partnership with another Person.

 

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Section 3.13. Insurance. Schedule 3.13 sets forth a description of all insurance
maintained by or on behalf of the Borrower and its Subsidiaries as of the
Effective Date. As of the Effective Date, all premiums in respect of such
insurance have been paid. The Borrower believes that the insurance maintained by
or on behalf of the Borrower and its Subsidiaries is adequate.

 

Section 3.14. Labor Matters. As of the Effective Date, there are no strikes,
lockouts or slowdowns against any Borrower Group Company pending or, to the
knowledge of the Borrower, threatened. The hours worked by and payments made to
employees of the Borrower Group Companies have not violated the Fair Labor
Standards Act or any other applicable Federal, state, local or foreign law
dealing with such matters, except where a violation could not reasonably be
expected to result in a Material Adverse Effect. All payments due from any
Borrower Group Company, or for which any claim may be made against any Borrower
Group Company, on account of wages and employee health and welfare insurance and
other benefits, have been paid or accrued as a liability on the books of such
Borrower Group Company.

 

Section 3.15. Solvency. Immediately after the Financing Transactions to occur on
or before the Effective Date are consummated and after giving effect to the
application of the proceeds of any Loan made on the Effective Date, (a) the fair
value of the assets of each Credit Party, at a fair valuation, will exceed its
debts and liabilities, subordinated, contingent or otherwise; (b) the present
fair saleable value of the property of each Credit Party will exceed the amount
that will be required to pay the probable liability of its debts and other
liabilities, subordinated, contingent or otherwise, as such debts and other
liabilities become absolute and matured; (c) each Credit Party will be able to
pay its debts and liabilities, subordinated, contingent or otherwise, as such
debts and liabilities become absolute and matured; and (d) no Credit Party will
have unreasonably small capital with which to conduct the business in which it
is engaged as such business is now conducted and proposed to be conducted after
the Effective Date.

 

Section 3.16. Senior Debt. The Secured Obligations constitute “Senior Debt” and
“Designated Senior Debt” under and as defined in the Subordinated Debt
Documents.

 

ARTICLE 4

CONDITIONS

 

Section 4.01. Effective Date. The obligations of the Lenders to make Loans and
of each LC Issuing Bank to issue Letters of Credit hereunder shall not become
effective until the date on which each of the following conditions is satisfied
(or waived in accordance with Section 9.02):

 

(a) The Administrative Agent (or its counsel) shall have received from each
party hereto either (i) a counterpart of this Amended Agreement signed on behalf
of such party or (ii) written evidence satisfactory to the Administrative Agent
(which may include facsimile transmission of a signed signature page) that such
party has signed a counterpart of this Amended Agreement.

 

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(b) The Administrative Agent shall have received a favorable written opinion
(addressed to the Administrative Agent and the Lenders and dated the Effective
Date) of Dechert LLP, counsel for the Borrower, substantially in the form of
Exhibit B, and covering such other matters relating to the Credit Parties, the
Loan Documents or the Financing Transactions as the Required Lenders shall
reasonably request. The Borrower requests such counsel to deliver such opinion.

 

(c) The Administrative Agent shall have received such documents and certificates
as the Administrative Agent or its counsel may reasonably request relating to
the organization, existence and good standing of each Credit Party, the
authorization of the Financing Transactions and any other legal matters relating
to the Credit Parties, the Loan Documents or the Financing Transactions, all in
form and substance satisfactory to the Administrative Agent and its counsel.

 

(d) The Administrative Agent shall have received a certificate, dated the
Effective Date and signed by the President, a Vice President or a Financial
Officer of the Borrower, confirming compliance with the conditions set forth in
clauses (a) and (b) of Section 4.03.

 

(e) The Credit Parties shall have paid all fees and other amounts due and
payable to the Lender Parties on or before the Effective Date under or in
connection with the Loan Documents, including, to the extent invoiced, all
out-of-pocket expenses (including fees, charges and disbursements of counsel)
required to be reimbursed or paid by any Credit Party under the Loan Documents.

 

(f) The Collateral and Guarantee Requirement shall have been satisfied and the
Administrative Agent shall have received a completed Perfection Certificate
dated the Effective Date and signed by a Financial Officer or other executive
officer of the Borrower, together with all attachments contemplated thereby,
including the results of a search of the Uniform Commercial Code (or equivalent)
filings made with respect to the Credit Parties in the jurisdictions
contemplated by the Perfection Certificate and copies of the financing
statements (or similar documents) disclosed by such search and evidence
reasonably satisfactory to the Administrative Agent that the Liens indicated by
such financing statements (or similar documents) are permitted by Section 6.02
or have been released.

 

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(g) The Administrative Agent shall have received evidence that all insurance
required by Section 5.08 is in effect.

 

(h) All consents and approvals required to be obtained, or in the discretion of
the Administrative Agent advisable to obtain, from any Governmental Authority or
other Person in connection with the Financing Transactions or the continuing
operations of the Borrower Group Companies shall have been obtained, and all
applicable waiting periods and appeal periods shall have expired, in each case
without the imposition of any burdensome condition.

 

(i) The Lenders shall have received from the Borrower satisfactory copies of (i)
its consolidated balance sheets as of September 30, 2004 and the related
consolidated statements of income, stockholders’ equity and cash flows for the
Fiscal Year then ended, reported on by Ernst & Young LLP, independent public
accountants, and (ii) its unaudited consolidated balance sheets as of December
31, 2004 and March 31, 2005 and the related unaudited consolidated statements of
income, stockholders’ equity and cash flows for the Fiscal Quarters then ended
and for the portions of the Fiscal Year then ended; and

 

(j) [Reserved].

 

(k) The Administrative Agent shall have received evidence satisfactory to it
that all principal of any loans outstanding under, and all accrued interest and
fees under, the Existing Credit Agreement shall have been paid in full.

 

Promptly after the Effective Date occurs, the Administrative Agent shall notify
the Borrower and the Lenders thereof, and such notice shall be conclusive and
binding.

 

Section 4.02. Consequences of Effectiveness. (a) On the Effective Date, without
further action by any of the parties to the Existing Credit Agreement or the
Amended Agreement, (i) the Existing Credit Agreement will be automatically
amended and restated to read as this Amended Agreement reads, (ii) each lender
not a party to the Existing Credit Agreement shall become a party to, and a
Lender under, this Amended Agreement, and (ii) the Commitments of each Lender
shall be the amounts set forth opposite the name of such Lender on the
Commitment Schedule, as such amount may be changed from time to time in
accordance with the terms hereof.

 

(b) Those Lenders which are also Existing Lenders (comprising the “Required
Lenders” as defined in the Existing Credit Agreement) and the Borrower hereby
waive compliance with any provision of the Existing Credit Agreement requiring
notice of (x) termination of the commitments thereunder and/or (y) prepayment of
loans thereunder, in each case to the extent necessary to give effect to
subsections 4.01(k) and 4.02(a), provided that any such prepayment of loans
shall be subject to Section 2.16 of the Existing Credit Agreement.

 

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(c) On and after the Effective Date, the rights and obligations of the parties
hereto shall be governed by the provisions hereof. The rights and obligations of
the parties to the Existing Credit Agreement with respect to the period before
the Effective Date shall continue to be governed by the provisions thereof as in
effect before the Effective Date, except that all interest and fees accrued
under the Existing Credit Agreement to but excluding the Effective Date shall be
paid on the Effective Date.

 

Section 4.03. Each Extension of Credit. The obligation of each Lender to make a
Loan on the occasion of any Borrowing, the obligation of any Swingline Lender to
make any Swingline Loan and the obligation of any LC Issuing Bank to issue,
amend, renew or extend any Letter of Credit, are each subject to receipt of the
Borrower’s request therefor in accordance herewith and to the satisfaction of
the following conditions:

 

(a) The representations and warranties of each Credit Party set forth in the
Loan Documents shall be true in all material respects on and as of the date of
such Borrowing or Swingline Loan or the date of issuance, amendment, renewal or
extension of such Letter of Credit, as applicable.

 

(b) Immediately after giving effect to such Borrowing or Swingline Loan or the
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, no Default shall have occurred and be continuing.

 

Each Borrowing, each Swingline Loan and each issuance, amendment, renewal or
extension of a Letter of Credit shall be deemed to constitute a representation
and warranty by the Borrower on the date thereof as to the matters specified in
clauses (a) and (b) of this Section.

 

ARTICLE 5

AFFIRMATIVE COVENANTS

 

Until all the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder have been paid in full and
all Letters of Credit have expired or been cancelled and all LC Disbursements
have been reimbursed, the Borrower covenants and agrees with the Lenders that:

 

Section 5.01. Financial Statements and Other Information. The Borrower will
furnish to the Administrative Agent and each Lender:

 

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(a) within 90 days after the end of each Fiscal Year, its audited consolidated
balance sheet as of the end of such Fiscal Year and the related statements of
operations, stockholders’ equity and cash flows for such Fiscal Year, setting
forth in each case in comparative form the figures for the previous Fiscal Year,
all such consolidated balance sheets and related statements reported on by Ernst
& Young LLP or other independent public accountants of recognized national
standing (without a “going concern” or like qualification or exception and
without any qualification or exception as to the scope of such audit) as
presenting fairly in all material respects the financial position, results of
operations and cash flows of the Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP;

 

(b) within 45 days after the end of each of the first three Fiscal Quarters of
each Fiscal Year, its consolidated balance sheet as of the end of such Fiscal
Quarter and the related statements of operations, stockholders’ equity and cash
flows for such Fiscal Quarter and for the then elapsed portion of such Fiscal
Year, setting forth in each case in comparative form the figures for the
corresponding period or periods of (or, in the case of the balance sheet, as of
the end of) the previous Fiscal Year, all certified by a Financial Officer as
presenting fairly in all material respects the financial position, results of
operations and cash flows of the Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP, subject to normal year-end
adjustments and the absence of footnotes;

 

(c) concurrently with each delivery of financial statements under clause (a) or
(b) above, a certificate of a Financial Officer (i) certifying as to whether a
Default has occurred and, if a Default has occurred and is continuing,
specifying the details thereof and any action taken or proposed to be taken with
respect thereto, (ii) setting forth reasonably detailed calculations
demonstrating compliance with Sections 6.13, 6.14 and 6.15 and (iii) stating
whether any change in GAAP or in the application thereof has occurred since the
date of the Borrower’s audited financial statements referred to in Section 3.04
and, if any such change has occurred, specifying the effect of such change on
the financial statements accompanying such certificate;

 

(d) concurrently with each delivery of financial statements under clause (a)
above, a certificate of the accounting firm that reported on such financial
statements stating whether during the course of their examination of such
financial statements they obtained knowledge of any Default (which certificate
may be limited to the extent required by accounting rules or guidelines);

 

(e) within 90 days after the end of each Fiscal Year, a detailed consolidated
budget for such Fiscal Year presented on a monthly basis (including a projected
consolidated balance sheet and related statements of projected operations and
cash flows as of the end of and for such Fiscal Year and setting forth the
assumptions used in preparing such budget) and, promptly when available, any
significant revisions of such budget;

 

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(f) promptly after the same become publicly available, copies of all periodic
and other reports, proxy statements and other materials filed by any Borrower
Group Company with the SEC, or any Governmental Authority succeeding to any or
all of the functions of the SEC, or with any national securities exchange, as
the case may be; and

 

(g) promptly following any request therefor, such other information regarding
the operations, business affairs and financial condition of any Borrower Group
Company, or compliance with the terms of any Loan Document, as the
Administrative Agent or any Lender may reasonably request.

 

Section 5.02. Notice of Material Events. The Borrower will furnish to the
Administrative Agent and each Lender prompt written notice of the following:

 

(a) the occurrence of any Default;

 

(b) the filing or commencement of any action, suit or proceeding by or before
any arbitrator or Governmental Authority against or affecting any Borrower Group
Company or any Affiliate thereof that, if adversely determined, could reasonably
be expected to result in a Material Adverse Effect;

 

(c) the occurrence of any ERISA Event that, alone or together with any other
ERISA Events that have occurred, could reasonably be expected to result in
liabilities of the Borrower Group Companies in an aggregate amount exceeding
$5,000,000; and

 

(d) any other development that results in, or could reasonably be expected to
result in, a Material Adverse Effect.

 

Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.

 

Section 5.03. Information Regarding Collateral. (a) The Borrower will furnish to
the Administrative Agent prompt written notice of any change in (i) any Credit
Party’s corporate name or any trade name used to identify it in the conduct of
its business or any Credit Party’s chief executive office, its principal place
of business, or any office or facility at which Collateral owned by it is
located (including the establishment of any such new office or facility), (ii)
any Credit Party’s identity or corporate structure or (iii) any Credit Party’s
Federal Taxpayer Identification Number. The Borrower will not effect or permit
any change

 

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referred to in the preceding sentence unless all filings have been made under
the Uniform Commercial Code and all other actions have been taken that are
required so that such change will not at any time adversely affect the validity,
perfection or priority of any Transaction Lien on any of the Collateral. The
Borrower will also promptly notify the Administrative Agent if any material
portion of the Collateral is damaged or destroyed.

 

(b) Each year, at the time annual financial statements with respect to the
preceding Fiscal Year are delivered pursuant to Section 5.01(a), the Borrower
will deliver to the Administrative Agent a certificate of a Financial Officer
(i) setting forth the information required pursuant to Section A of the
Perfection Certificate or confirming that there has been no change in such
information since the date of the Perfection Certificate delivered on the
Effective Date or the date of the most recent certificate delivered pursuant to
this subsection and (ii) certifying that all Uniform Commercial Code financing
statements (including fixture filings, as applicable) or other appropriate
filings, recordings or registrations, including all refilings, rerecordings and
reregistrations, containing a description of the Collateral have been filed of
record in each appropriate office in each jurisdiction identified pursuant to
clause (i) above to the extent necessary to protect and perfect the Transaction
Liens for a period of at least 18 months after the date of such certificate
(except as noted therein with respect to any continuation statements to be filed
within such period).

 

Section 5.04. [Reserved].

 

Section 5.05. Existence; Conduct of Business. Each Borrower Group Company will
do or cause to be done all things necessary to preserve, renew and keep in full
force and effect its legal existence and the rights, licenses, permits,
privileges, franchises, patents, copyrights, trademarks and trade names material
to the conduct of its business; provided that the foregoing shall not prohibit
any merger, consolidation, liquidation or dissolution permitted under Section
6.03.

 

Section 5.06. Payment of Obligations. Each Borrower Group Company will pay its
Debt and other obligations, including Tax liabilities, before the same shall
become delinquent or in default, except where (a) the validity or amount thereof
is being contested in good faith by appropriate proceedings, (b) the relevant
Borrower Group Company has set aside on its books adequate reserves with respect
thereto in accordance with GAAP, (c) such contest effectively suspends
collection of the contested obligation and the enforcement of any Lien securing
such obligation and (d) the failure to make payment pending such contest could
not reasonably be expected to result in a Material Adverse Effect.

 

Section 5.07. Maintenance of Properties. Each Borrower Group Company will
maintain all property material to the conduct of its business in good working
order and condition, ordinary wear and tear excepted.

 

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Section 5.08. Insurance. (a) The Borrower Group Companies will maintain with
financially sound and reputable insurance companies selected by the Borrower
that customarily write insurance for the risks covered thereby in the amounts
contemplated thereby:

 

(i) fire and extended coverage insurance, on a replacement cost basis, with
respect to all personal property and improvements to real property, in such
amounts as are customarily maintained by companies in the same or similar
business operating in the same or similar locations;

 

(ii) commercial general liability insurance against claims for bodily injury,
death or property damage occurring upon, about or in connection with the use of
any properties owned, occupied or controlled by it, providing coverage on an
occurrence basis with a combined single limit of at least $25,000,000 and
including the broad form CGL endorsement;

 

(iii) business interruption insurance, insuring against loss of gross earnings
for a period of at least 12 months arising from any risks or occurrences
required to be covered by insurance pursuant to clause (i) above; and

 

(iv) such other insurance as may be required by law or as is reasonably carried
by companies of established repute engaged in the same or similar business,
owning similar properties, and located in the same general areas as the Borrower
Group Companies.

 

Deductibles or self-insured retention shall not exceed $2,500,000 for fire and
extended coverage policies, $2,000,000 for commercial general liability policies
or seven days for business interruption policies.

 

(b) Fire and extended coverage policies (and any policies required to be
maintained pursuant to subsection (c) of this Section) maintained with respect
to any Collateral shall be endorsed or otherwise amended to include (i) a
non-contributing mortgagee clause (regarding improvements to real property) and
lenders’ loss payable clause (regarding personal property), in each case in
favor of the Administrative Agent and providing for losses thereunder to be
payable to the Administrative Agent or its designee as sole loss payee, (ii) a
provision to the effect that neither the Borrower, the Administrative Agent nor
any other party shall be a coinsurer and (iii) such other provisions as the
Administrative Agent may reasonably require from time to time to protect the
interests of the Secured Parties. Commercial general liability policies shall be
endorsed to name the Administrative Agent as an additional insured. Business
interruption policies shall name the Administrative Agent as sole loss payee.
Each such policy referred to in this subsection also shall provide that it shall
not be canceled,

 

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modified in any material respect (or in any respect whatsoever which could
reasonably be expected to be adverse to the Administrative Agent or the Lenders)
or not renewed (i) by reason of nonpayment of premium except upon at least 10
days’ prior written notice thereof by the insurer to the Administrative Agent
(giving the Administrative Agent the right to cure defaults in the payment of
premiums) or (ii) for any other reason except upon at least 30 days’ prior
written notice thereof by the insurer to the Administrative Agent. The Borrower
shall deliver to the Administrative Agent, prior to the cancellation,
modification or nonrenewal of any such policy of insurance, a copy of a renewal
or replacement policy (or other evidence of renewal of a policy previously
delivered to the Administrative Agent) together with evidence satisfactory to
the Administrative Agent of payment of the premium therefor.

 

(c) If at any time the area in which any Mortgaged Property is located is
designated a “flood hazard area” in any Flood Insurance Rate Map published by
the Federal Emergency Management Agency (or any successor agency), the Borrower
shall obtain flood insurance in such total amount as the Administrative Agent or
the Required Lenders may from time to time require, and otherwise comply with
the National Flood Insurance Program as set forth in the Flood Disaster
Protection Act of 1973, as amended from time to time. If at any time the area in
which any Mortgaged Property is located is designated a “Zone 1” area, the
Borrower shall obtain earthquake insurance in such total amount as the
Administrative Agent or the Required Lenders may from time to time require.

 

(d) Any proceeds in excess of $2,000,000 from any insurance policy which are
payable to the insured in respect of any claim, or any condemnation award or
other compensation in respect of a condemnation (or any transfer or disposition
of property in lieu of condemnation) for which the Borrower or any of its
Subsidiaries receives a condemnation award or other compensation in excess of
$2,000,000, shall be paid to the Administrative Agent to be held, applied or
released for application in accordance with Section 15 of the Security Agreement
and each insurance policy shall provide that all insurance proceeds in excess of
$2,000,000 per claim which are payable to the insured shall be adjusted with and
payable to the Administrative Agent; provided that so long as no Event of
Default has occurred and is continuing, no claim shall be adjusted or settled
without the consent of the Borrower or the applicable Subsidiary. The Borrower
hereby appoints the Administrative Agent as its attorney-in-fact to make proof
of loss, claim for insurance and adjustments with insurers, and to execute or
endorse all documents, checks or drafts in connection with payments under
insurance policies.

 

Section 5.09. Casualty and Condemnation. The Borrower will furnish to the
Administrative Agent and the Lenders prompt written notice of any casualty or
other insured damage to any material portion of the Collateral or the
commencement of any action or proceeding for the taking of any Collateral or any
part thereof or interest therein under power of eminent domain or by
condemnation or similar proceeding.

 

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Section 5.10. Proper Records; Rights to Inspect. Each Borrower Group Company
will keep proper books of record and account in which complete and correct
entries are made of all transactions relating to its business and activities.
Each Borrower Group Company will permit any representatives designated by the
Administrative Agent or any Lender, upon reasonable prior notice, to visit and
inspect its properties, to examine and make extracts from its books and records,
and to discuss its affairs, finances and condition with its officers and
independent accountants, all at such reasonable times and as often as reasonably
requested.

 

Section 5.11. Compliance with Laws. Each Borrower Group Company will comply with
all laws, rules, regulations and orders of any Governmental Authority applicable
to it or its property, except where failures to do so, in the aggregate, could
not reasonably be expected to result in a Material Adverse Effect.

 

Section 5.12. Use of Proceeds and Letters of Credit. The proceeds of the
Revolving Loans and Swingline Loans will be used only (i) to prepay loans
outstanding under the Existing Credit Agreement and pay fees and expenses
payable in connection with the Financing Transactions, (ii) for general
corporate purposes of the Borrower and its Subsidiaries in the ordinary course
of business, (iii) to finance any Business Acquisition permitted by Section
6.04(g) and (iv) to make any Restricted Payment permitted by Section 6.08(a)(v).
No part of the proceeds of any Loan will be used, directly or indirectly, for
any purpose that entails a violation of any of the Regulations of the Federal
Reserve Board, including Regulations G, U and X. Letters of Credit will be
requested and used only to support obligations incurred in the ordinary course
of business.

 

Section 5.13. Additional Subsidiaries. If any additional Subsidiary is formed or
acquired after the Effective Date, the Borrower will, within three Business Days
after such Subsidiary is formed or acquired, notify the Administrative Agent and
the Lenders thereof and cause any Equity Interest in or Debt of such Subsidiary
owned by or on behalf of any Credit Party to be added to the Collateral. If such
Subsidiary is or subsequently becomes a wholly owned Domestic Subsidiary and is
not prohibited by applicable law or regulation from guaranteeing the Borrower’s
obligations hereunder, the Borrower shall promptly cause the Collateral and
Guarantee Requirement to be satisfied with respect to such Subsidiary, whereupon
such Subsidiary will become a “Subsidiary Guarantor” and “Lien Grantor” for
purposes of the Loan Documents.

 

Section 5.14. Further Assurances. (a) Each Borrower Group Company will execute
and deliver any and all further documents, financing statements, agreements and
instruments, and take all such further actions (including the filing

 

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and recording of financing statements, fixture filings, mortgages, deeds of
trust and other documents), that may be required under any applicable law, or
that the Administrative Agent or the Required Lenders may reasonably request, to
cause the Collateral and Guarantee Requirement to be and remain satisfied, all
at the Borrower’s expense. The Borrower will provide to the Administrative
Agent, from time to time upon request, evidence reasonably satisfactory to the
Administrative Agent as to the perfection and priority of the Transaction Liens
created or intended to be created by the Security Documents.

 

(b) If any material assets (including any real property (other than one or more
parcels of real property having an aggregate fair market value less than
$1,000,000) or improvements thereto or any interest therein) are acquired by the
Borrower or any Subsidiary Guarantor after the Effective Date (other than assets
constituting Collateral that become subject to Transaction Liens upon
acquisition thereof), the Borrower will notify the Administrative Agent and the
Lenders thereof, and, if requested by the Administrative Agent or the Required
Lenders, will cause such assets to be subjected to a Transaction Lien securing
the Secured Obligations and will take, or cause the relevant Subsidiary
Guarantor to take, such actions as shall be necessary or reasonably requested by
the Administrative Agent to grant and perfect or record such Transaction Lien,
including actions described in Section 5.14(a), all at the Borrower’s expense.

 

Section 5.15. Landlord And Warehouseman Waivers. The Borrower shall use its
commercially reasonable efforts to deliver to the Administrative Agent waivers
or subordinations of contractual and statutory landlord’s, landlord’s
mortgagee’s and warehouseman’s Liens in form and substance reasonably
satisfactory to the Administrative Agent under each existing lease, warehouse
agreement or similar agreement to which the Borrower or any Subsidiary is a
party; provided that such waivers or subordinations will in any event be
incorporated when the existing lease, warehouse agreement or similar agreement
is amended, renewed or extended and the Borrower will obtain waivers of both
contractual and statutory landlord’s, landlord’s mortgagee’s and warehouseman’s
Liens in form and substance reasonably satisfactory to the Administrative Agent
in connection with each new lease, warehouse agreement or similar agreement
entered into by the Borrower or any Subsidiary.

 

ARTICLE 6

NEGATIVE COVENANTS

 

Until all the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder have been paid in full and
all Letters of Credit have expired or been cancelled and all LC Disbursements
have been reimbursed, the Borrower covenants and agrees with the Lenders that:

 

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Section 6.01. Debt; Certain Equity Securities. (a) Neither the Borrower nor any
Subsidiary will create, incur, assume or permit to exist any Debt, except:

 

(i) Debt created under the Loan Documents;

 

(ii) the Subordinated Debt;

 

(iii) Debt existing on the Existing Agreement Closing Date and listed in
Schedule 6.01 and extensions, renewals and replacements of any such Debt that do
not increase the outstanding principal amount thereof or result in an earlier
maturity date or decreased weighted average life thereof;

 

(iv) Debt of the Borrower to any Subsidiary and Debt of any Subsidiary to the
Borrower or any other Subsidiary; provided that Debt of any Subsidiary that is
not a Credit Party to the Borrower or any Subsidiary Guarantor shall be subject
to Section 6.04;

 

(v) Guarantees by the Borrower of Debt of any Subsidiary and Guarantees by any
Subsidiary of Debt of the Borrower or any other Subsidiary; provided that
Guarantees by the Borrower or any Subsidiary Guarantor of Debt of any Subsidiary
that is not a Credit Party shall be subject to Section 6.04;

 

(vi) Debt of the Borrower or any Subsidiary incurred to finance the acquisition,
construction or improvement of any fixed or capital assets, including Capital
Lease Obligations and any Debt assumed in connection with the acquisition of any
such assets or secured by a Lien on any such assets before the acquisition
thereof, and extensions, renewals and replacements of any such Debt that do not
increase the outstanding principal amount thereof or result in an earlier
maturity date or decreased weighted average life thereof; provided that (A) such
Debt is incurred before or within 90 days after such acquisition or the
completion of such construction or improvement and (B) the aggregate principal
amount of Debt permitted by this clause shall not exceed $6,000,000 at any time
outstanding;

 

(vii) Debt of any Person that becomes a Subsidiary after the Existing Agreement
Closing Date; provided that (A) such Debt exists at the time such Person becomes
a Subsidiary and is not created in contemplation of or in connection with such
Person becoming a Subsidiary and (B) the aggregate principal amount of Debt
permitted by this clause shall not exceed $6,000,000 at any time outstanding;

 

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(viii) Debt of the Borrower or any Subsidiary arising in connection with a
Permitted Receivables Transaction;

 

(ix) unsecured Debt of the Borrower or any Subsidiary of the Borrower issued to
a seller in connection with, and as consideration in lieu of cash for, a
Business Acquisition otherwise permitted under this Agreement; provided that (i)
any such Debt (other than Debt issued in connection with, and as consideration
for, the Proposed Acraline Acquisition) requires no payment of principal prior
to, and has a maturity no earlier than, the first anniversary of the Revolving
Maturity Date, (ii) any such Debt issued in connection with, and as
consideration for, the Proposed Acraline Acquisition, requires no payment of
principal prior to, and has a maturity no earlier than, December 30, 2005, (iii)
any such Debt is expressly subordinated in right of payment (at maturity, upon
acceleration or otherwise) by the instrument creating such Debt to the
obligations of the Credit Parties under the Loan Documents on terms and
conditions no less favorable to the Lenders than those set forth in Exhibit C
and (iv) in the case of any such Debt issued by a Subsidiary of the Borrower,
such Debt is issued only in connection with, and as consideration for, the
Proposed Acraline Acquisition;

 

(x) Additional Subordinated Debt;

 

(xi) Debt under Hedging Agreements; provided that such Hedging Agreements are
related to business transactions of the Borrower or one or more Subsidiaries
entered into in the ordinary course of business and that such Hedging Agreements
are entered into for bona fide hedging purposes of the Borrower or any
Subsidiary and not for purposes of speculation;

 

(xii) Debt represented by letters of credit and guarantees for the account of
the Borrower or any Subsidiary, as the case may be, in order to provide security
for workers’ compensation claims, payment obligations in connection with
self-insurance or similar requirements in the ordinary course of business, and
other Debt with respect to workers’ compensation claims, self-insurance
obligations, performance, surety and similar bonds and completion guarantees
provided by the Borrower of any Subsidiary in the ordinary course of business;

 

(xiii) Debt in respect of trade and standby letters of credit, performance
bonds, bankers’ acceptances and surety or appeal bonds issued for the account of
the Borrower or any Subsidiary in the ordinary course of its business;

 

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(xiv) indemnification, adjustment of purchase price or similar obligations, in
each case, incurred in connection with the disposition of any business, assets
or capital stock of the Borrower or any Subsidiary; provided that the maximum
aggregate liability in respect of all such Debt shall at no time exceed the
gross proceeds actually received by the Borrower and the Subsidiaries in
connection with such disposition;

 

(xv) Debt arising from the honoring by a bank or other financial institution of
a check, draft or similar instrument (except in the case of daylight overdrafts)
drawn against insufficient funds in the ordinary course of business; provided
that such Debt is extinguished within five business days of incurrence;

 

(xvi) Debt of any German Subsidiary; provided that the aggregate principal
amount of all Debt permitted by this clause shall not exceed $10,000,000 at any
time outstanding; and

 

(xvii) other unsecured Debt in an aggregate principal amount for all Debt
permitted under this clause not exceeding $10,000,000 at any time outstanding.

 

(b) No Borrower Group Company will issue any preferred stock or other preferred
Equity Interests, unless such preferred stock or any such preferred Equity
Interest is (i) not subject to mandatory redemption prior to the first
anniversary of the Revolving Maturity Date and (ii) issued either (x) for 100%
cash consideration or (y) in connection with a Business Acquisition permitted
under Section 6.04(g).

 

Section 6.02. Liens. Neither the Borrower nor any Subsidiary will create or
permit to exist any Lien on any property now owned or hereafter acquired by it,
or assign or sell any income or revenues (including accounts receivable) or
rights in respect of any thereof, except:

 

(a) Transaction Liens;

 

(b) Permitted Liens;

 

(c) any Lien on any property of the Borrower or any Subsidiary existing on the
Existing Agreement Closing Date and listed in Schedule 6.02; provided that (i)
such Lien shall not apply to any other property of the Borrower or any
Subsidiary and (ii) such Lien shall secure only those obligations which it
secures on the Existing Agreement Closing Date and extensions, renewals and
replacements thereof that do not increase the outstanding principal amount
thereof;

 

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(d) any Lien existing on any property before the acquisition thereof by the
Borrower or any Subsidiary or existing on any property of any Person that
becomes a Subsidiary after the date hereof before the time such Person becomes a
Subsidiary; provided that (i) such Lien is not created in contemplation of or in
connection with such acquisition or such Person becoming a Subsidiary, as the
case may be, (ii) such Lien will not apply to any other property of the Borrower
or any Subsidiary and (iii) such Lien will secure only those obligations which
it secures on the date of such acquisition or the date such Person becomes a
Subsidiary, as the case may be, and extensions, renewals and replacements
thereof that do not increase the outstanding principal amount thereof;

 

(e) Liens on fixed or capital assets acquired, constructed or improved by the
Borrower or any Subsidiary; provided that (i) the Debt secured by such liens is
permitted by Section 6.01(a)(vi), (ii) such Liens and the Debt secured thereby
are incurred before or within 90 days after such acquisition or the completion
of such construction or improvement, (iii) the Debt secured thereby does not
exceed 75% of the cost of acquiring, constructing or improving such fixed or
capital assets and (iv) such Liens will not apply to any other property of the
Borrower or any Subsidiary;

 

(f) Liens on property of the Borrower’s German Subsidiaries securing Debt
permitted pursuant to Section 6.01(a)(xvi);

 

(g) Liens securing Debt arising out of, and sales of accounts receivable as part
of, a Permitted Receivables Transaction;

 

(h) Permitted Encumbrances (as such term is defined in the applicable Mortgage)
on Mortgaged Property; and

 

(i) Liens not otherwise permitted by the foregoing clauses arising in the
ordinary course of its business which (i) do not secure Debt and (ii) do not
secure any single obligation (or class of obligations having a common cause) in
an amount exceeding $3,000,000.

 

Section 6.03. Fundamental Changes. (a) No Borrower Group Company will merge into
or consolidate with any other Person, or liquidate or dissolve, or permit any
other Person to merge into or consolidate with it, except that, if at the time
thereof and immediately after giving effect thereto no Default shall have
occurred and be continuing, (i) any Subsidiary may merge into the Borrower in a
transaction in which the Borrower is the surviving corporation, (ii) any
Subsidiary may merge into any Subsidiary in a transaction in which the surviving
entity is a Subsidiary and (if any party to such merger is a Subsidiary
Guarantor) is a Subsidiary Guarantor and (iii) any Subsidiary (except a
Subsidiary Guarantor) may liquidate or dissolve if the Borrower determines in
good faith that such liquidation or dissolution is in the best interests of the
Borrower and is not

 

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materially disadvantageous to the Lenders; provided that, if any such merger
involves a Person that is not a wholly owned Subsidiary immediately before such
merger, such merger shall not be permitted unless also permitted by Section
6.04.

 

(b) Neither the Borrower nor any Subsidiary will engage to any material extent
in any business except businesses of the types conducted by the Borrower and its
Subsidiaries on the date of this Agreement and businesses reasonably related
thereto.

 

Section 6.04. Investments, Loans, Advances, Guarantees and Acquisitions. Neither
the Borrower nor any Subsidiary will purchase, hold or acquire (including
pursuant to any merger with any Person that was not a wholly owned Subsidiary
before such merger) any Equity Interest in or evidence of indebtedness or other
security (including any option, warrant or other right to acquire any of the
foregoing) of, make or permit to exist any loan or advance to, Guarantee any
obligation of, or make or permit to exist any investment or other interest in,
any other Person, or purchase or otherwise acquire (in one transaction or a
series of transactions) any assets of any other Person constituting a business
unit, except:

 

(a) Permitted Investments;

 

(b) investments existing on the Existing Agreement Closing Date and listed on
Schedule 6.04;

 

(c) investments by the Borrower and its Subsidiaries in Equity Interests in
their respective Subsidiaries; provided that (i) any such Equity Interest held
by a Credit Party shall be pledged pursuant to the Security Agreement as
required to satisfy clause (b) of the definition of “Collateral and Guarantee
Requirement” and (ii) the aggregate amount of investments by Credit Parties in,
and loans and advances by Credit Parties to, and Guarantees by Credit Parties of
Debt of, Subsidiaries that are not Credit Parties (including all such
investments, loans, advances and Guarantees existing on the Effective Date
(other than those existing on the closing date and identified on Schedule 6.04),
but excluding investments arising in connection with, and as part of, a
Permitted Receivables Transaction) shall not exceed (x) $3,000,000 at any time
outstanding in the case of advances made to TRW Nelson Bolzenschweiss-Technik
Verwaltungs GmhH and other German Subsidiaries of the Borrower, in each case to
be used for working capital and (y) an aggregate amount of $10,000,000 at any
time outstanding in the case of all other investments;

 

(d) loans or advances made by the Borrower to any Subsidiary or made by any
Subsidiary to the Borrower or any other Subsidiary; provided that the amount of
such loans and advances made by Credit Parties to Subsidiaries that are not
Credit Parties shall be subject to the limitations set forth in clause 6.04(c)
above;

 

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(e) Guarantees constituting Debt permitted by Section 6.01; provided that (i) a
Subsidiary shall not Guarantee the Subordinated Debt unless (A) such Subsidiary
also has Guaranteed the Secured Obligations pursuant to the Security Agreement
and (B) such Guarantee of the Subordinated Debt is subordinated to such
Guarantee of the Secured Obligations on terms no less favorable to the Lenders
than the subordination provisions of the Subordinated Debt, and (ii) the
aggregate principal amount of Debt of Subsidiaries that are not Credit Parties
that is Guaranteed by Credit Parties shall be subject to the limitations set
forth in clause 6.04(c) above;

 

(f) investments received in connection with the bankruptcy or reorganization of,
or settlement of delinquent accounts and disputes with, customers and suppliers,
in each case in the ordinary course of business;

 

(g) any Business Acquisition; provided that no Business Acquisition shall be
permitted pursuant to this Section 6.04(g) unless (i) immediately before and
after giving effect to such Business Acquisition, no Default shall have occurred
and be continuing, (ii) such Business Acquisition is non-hostile and (iii) in
the case of any Business Acquisition consisting of an investment in capital
stock or other equity interests of any Person (a “Target Entity”), immediately
after giving effect to such Business Acquisition, the Borrower or any of its
Subsidiaries shall hold securities or other ownership interests representing
more than 50% of the ordinary voting power of such Target Entity;

 

(h) With respect to each Mortgaged Property, Permitted Encumbrances (as defined
in the related Mortgages);

 

(i) loans or advances to employees made in the ordinary course of business
consistent with past practices of the Borrower or its Subsidiaries; provided
that the outstanding principal amount of such loans and advances shall not
exceed $1,000,000 at any time;

 

(j) Guarantees by the Borrower and its Subsidiaries of the payment obligations
of their respective Subsidiaries pursuant to operating leases of such
Subsidiaries; and

 

(k) other investments (excluding Guarantees and Business Acquisitions) in an
aggregate principal amount not exceeding $5,000,000 at any time outstanding.

 

Section 6.05. Asset Sales. Neither the Borrower nor any Subsidiary will sell,
transfer, lease or otherwise dispose of any property, including any Equity

 

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Interest owned by it, nor will any Subsidiary issue any additional Equity
Interest in such Subsidiary, except:

 

(a) transfers of assets in connection with a Permitted Receivables Transaction;

 

(b) sales of inventory, used or surplus equipment and Permitted Investments in
the ordinary course of business;

 

(c) sales, transfers and other dispositions to the Borrower or a Subsidiary;
provided that any such sales, transfers or dispositions involving a Subsidiary
that is not a Credit Party shall comply with Section 6.09;

 

(d) sales of real property and fixtures and improvements thereon; provided that
the aggregate fair market value of all such real property, fixtures and
improvements sold in reliance on this clause shall not exceed $5,000,000 during
the term of this Agreement;

 

(e) sales, transfers and other dispositions of assets that are not permitted by
any other clause of this Section; provided that the aggregate fair market value
of all assets sold, transferred or otherwise disposed of in reliance on this
clause shall not exceed $5,000,000 during any Fiscal Year;

 

provided that all sales, transfers, leases and other dispositions permitted by
this Section (except those permitted by clause (c) above) shall be made for fair
value and for at least 85% cash consideration.

 

Section 6.06. Sale and Leaseback Transactions. Neither the Borrower nor any
Subsidiary will enter into any arrangement, directly or indirectly, whereby it
shall sell or transfer any property, real or personal, used or useful in its
business, whether now owned or hereafter acquired, and thereafter rent or lease
such property or other property that it intends to use for substantially the
same purpose or purposes as the property sold or transferred, except for any
such sale of any fixed or capital asset that is made for cash consideration in
an amount not less than the cost of such fixed or capital asset and is
consummated within 90 days after such Borrower Group Company acquires or
completes the construction of such fixed or capital asset.

 

Section 6.07. Hedging Agreements. Neither the Borrower nor any Subsidiary will
enter into any Hedging Agreement, except Hedging Agreements entered into in the
ordinary course of business to hedge or mitigate risks to which a Borrower Group
Company is exposed in the conduct of its business or the management of its
liabilities.

 

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Section 6.08. Restricted Payments; Certain Payments of Debt. (a) No Borrower
Group Company will declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment, or incur any obligation (contingent or
otherwise) to do so, except that (i) the Borrower may declare and pay dividends
with respect to its capital stock payable solely in additional shares of its
common stock; (ii) any Subsidiary may declare and pay dividends with respect to
its capital stock; (iii) the Borrower may repurchase shares of its Equity
Interests from employees of the Borrower or any of its Subsidiaries upon their
death, termination or retirement, so long as, before and after giving effect to
such repurchase, (x) no Default shall have occurred and be continuing and (y)
the aggregate consideration for all such repurchases made in reliance on this
clause (iii) after the Existing Agreement Closing Date does not exceed
$3,000,000 plus proceeds of equity issuances to employees; (iv) the Borrower may
repurchase shares of the Preferred Stock at any time so long as, before and
after giving effect to any such repurchase, the aggregate consideration for all
such repurchases of Preferred Stock made in reliance on this clause does not
exceed $20,000,000; and (v) the Borrower may repurchase shares of its Equity
Interests at any time so long as, before and after giving effect to any such
repurchase, (x) no Default shall have occurred and be continuing, (y) the
aggregate unused amount of the Revolving Commitments shall be equal to or
greater than $15,000,000 and (z) the aggregate consideration for all of such
repurchases made in reliance on this clause (v) after the Existing Agreement
Closing Date does not exceed the sum of (A) $5,000,000 plus (B) 50% of
Consolidated Net Income for each Fiscal Year ended prior to the date of such
repurchases (commencing with the Fiscal Year ended September 30, 2003). Solely
for purposes of calculating the amount in Section 6.08(a)(v) (z)(B) above, if
Consolidated Net Income (as adjusted to exclude one time restructuring and plant
closing charges that are non-cash charges, and to the extent applicable, in
accordance with clause (2) below) for any Fiscal Year is less than zero (such
negative number for any Fiscal Year, the “Negative Carry-Forward Amount”), (1)
Consolidated Net Income for such Fiscal Year shall be deemed to be zero and (2)
the Negative Carry-Forward Amount in respect of such Fiscal Year shall be
applied to reduce Consolidated Net Income for the succeeding Fiscal Year.

 

(b) No Borrower Group Company will make or agree to pay or make, directly or
indirectly, any payment or other distribution (whether in cash, securities or
other property) of or in respect of principal of or interest on any Debt, or any
payment or other distribution (whether in cash, securities or other property),
including any sinking fund or similar deposit, on account of the purchase,
redemption, defeasance or termination of any Debt (including, without
limitation, any payment in respect of Restricted Debt under a Synthetic Purchase
Agreement), except:

 

(i) payment of Debt created under the Loan Documents;

 

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(ii) payment of regularly scheduled interest and principal payments as and when
due in respect of any Debt, except payments in respect of the Subordinated Debt
prohibited by the subordination provisions thereof;

 

(iii) refinancings of Debt to the extent permitted by Section 6.01;

 

(iv) payment of secured Debt that becomes due as a result of the voluntary sale
or transfer of the property securing such Debt;

 

(v) payment of intercompany debt owing;

 

(vi) payment of Debt that is permitted under Section 6.01(vi);

 

(vii) payment of Debt that is permitted under Section 6.01(vii); and

 

(viii) repurchases of Subordinated Debt, so long as before and after giving
effect to any such repurchase, (A) no Default shall have occurred and be
continuing, (B) the aggregate unused amount of the Revolving Commitments shall
be equal to or greater than $25,000,000, (C) the Senior Secured Leverage Ratio
shall not exceed 2.00:1, (D) the aggregate consideration for all such
repurchases of Subordinated Debt made in reliance on this clause (viii) does not
exceed $25,000,000 and (E) the call premium (if any) applicable to such
repurchased Subordinated Debt does not exceed 115%.

 

(c) The Borrower will not enter into or be party to, or make any payment under,
any Synthetic Purchase Agreement unless (i) in the case of any Synthetic
Purchase Agreement related to any Equity Interests, (A) the payments required to
be made thereunder are limited to the amount permitted under subsection (a) of
this Section and (B) the obligations of the Borrower thereunder are subordinated
to the Secured Obligations on terms satisfactory to the Required Lenders; and
(ii) in the case of any Synthetic Purchase Agreement related to any Subordinated
Debt, (A) the payments required to be made thereunder are limited to the amount
permitted under subsection (b) of this Section and (B) the obligations of the
Borrower thereunder are subordinated to the Secured Obligations to at least the
same extent as the Subordinated Debt to which such Synthetic Purchase Agreement
relates. The Borrower shall promptly deliver to the Administrative Agent a copy
of any Synthetic Purchase Agreement to which it becomes party. The Borrower will
not permit any Subsidiary to enter into, be party to, or make any payment under
any Synthetic Purchase Agreement.

 

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Section 6.09. Transactions with Affiliates. No Borrower Group Company will sell,
lease or otherwise transfer any property to, or purchase, lease or otherwise
acquire any property from, or otherwise engage in any other transaction with,
any of its Affiliates, except (a) transactions in the ordinary course of
business and at prices and on terms and conditions not less favorable to such
Borrower Group Company than could be obtained on an arm’s-length basis from
unrelated third parties, (b) transactions between or among the Borrower and the
Subsidiary Guarantors not involving any other Affiliate, (c) any Restricted
Payment permitted by Section 6.08, (d) transactions in connection with a
Permitted Receivables Transaction and (e) the performance of the Advisory
Agreement dated as of May 1, 2003 by and among the Borrower, certain of its
Subsidiaries from time to time and Citicorp Venture Capital Ltd.

 

Section 6.10. Restrictive Agreements. No Borrower Group Company will, directly
or indirectly, enter into or permit to exist any agreement or other arrangement
that prohibits, restricts or imposes any condition on (a) the ability of any
Borrower Group Company to create or permit to exist any Lien on any of its
property or (b) the ability of any Subsidiary to pay dividends or other
distributions with respect to any shares of its capital stock or to make or
repay loans or advances to the Borrower or any other Subsidiary or to Guarantee
Debt of the Borrower or any other Subsidiary; provided that (i) the foregoing
shall not apply to restrictions and conditions imposed by law or by any Loan
Document, Subordinated Debt Document or any document evidencing a Permitted
Receivables Transaction, (ii) the foregoing shall not apply to restrictions and
conditions existing on the Existing Agreement Closing Date and identified on
Schedule 6.10 (but shall apply to any amendment or modification expanding the
scope of, or any extension or renewal of, any such restriction or condition),
(iii) the foregoing shall not apply to customary restrictions and conditions
contained in agreements relating to the sale of a Subsidiary pending such sale,
provided that such restrictions and conditions apply only to the Subsidiary that
is to be sold and such sale is permitted hereunder, (iv) clause (a) of this
Section shall not apply to restrictions or conditions imposed by any agreement
relating to secured Debt permitted by this Agreement if such restrictions or
conditions apply only to the property securing such Debt and (v) clause (a) of
this Section shall not apply to customary provisions in leases restricting the
assignment thereof.

 

Section 6.11. Amendment or Termination of Material Documents. No Borrower Group
Company will (a) amend, modify or waive any of its rights under any Subordinated
Debt Document or (b) amend, modify or waive a provision in its certificate of
incorporation, by-laws or other organizational documents if such amendment,
waiver or modification could adversely effect any Lender or (c) terminate any
material license or contract constituting a part of the Collateral unless the
Borrower’s board of directors has determined in its good faith discretion that
such license or agreement is no longer useful to the business of the Borrower
and its Subsidiaries.

 

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Section 6.12. Capital Expenditures. (a) The Borrower will not permit the
aggregate amount of Capital Expenditures made in any Fiscal Year, excluding
Business Acquisitions, to exceed $17,000,000.

 

(b) If any property acquired or constructed by any Credit Party after the
Existing Agreement Closing Date and having an aggregate fair market value (taken
together with the fair market value of all other such properties not subject to
a Transaction Lien) in excess of $1,000,000 is not subject to a Transaction
Lien, the Borrower will cause such mortgages and other security documents to be
executed and delivered as may be necessary, or as the Administrative Agent may
request, to subject such property to a Transaction Lien.

 

Section 6.13. Interest Expense Coverage Ratio. The Borrower will not permit the
ratio of (a) Consolidated EBITDA to (b) Consolidated Cash Interest Expense, in
each case for any period of four consecutive Fiscal Quarters (subject to Section
6.16) ending on any date during any period set forth below, to be less than the
ratio set forth below opposite such period:

 

Period

--------------------------------------------------------------------------------

   Ratio

--------------------------------------------------------------------------------

10/01/03 – 9/30/05    1.75:1 10/01/05 – 9/30/07    2.00:1 Thereafter    2.25:1

 

Section 6.14. Leverage Ratio. The Borrower will not permit the Leverage Ratio at
any time during any period set forth below to exceed the ratio set forth
opposite such period:

 

Period

--------------------------------------------------------------------------------

   Ratio

--------------------------------------------------------------------------------

06/10/05 – 9/30/05    5.00:1 10/01/05 – 9/30/06    4.75:1 10/01/06 – 9/30/07   
4.50:1 10/01/07 – 9/30/08    4.25:1 Thereafter    4.00:1

 

Section 6.15. Minimum EBITDA. At the last day of each Fiscal Quarter during each
period set forth below, Consolidated EBITDA for the period of four consecutive
Fiscal Quarters then ended shall not be less than the amount set forth below
opposite such period:

 

Period

--------------------------------------------------------------------------------

   Amount ($)

--------------------------------------------------------------------------------

4/01/05 – 9/30/05    47,000,000 10/01/05 – 9/30/06    49,000,000 10/01/06 –
9/30/07    52,000,000 10/01/07 – 9/30/08    54,000,000 Thereafter    56,000,000

 

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Section 6.16. Periods of Less Than Four Fiscal Quarters. If any determination
hereunder is required by the terms hereof to be made for a period of four
consecutive Fiscal Quarters at a time when fewer than four full Fiscal Quarters
have elapsed since the Existing Agreement Closing Date, such determination shall
be made for the period of twelve months then most recently ended; provided that
such determination shall be made subject to the last sentence of the definition
of Consolidated EBITDA.

 

Section 6.17. Fiscal Year. The Borrower will not change its fiscal year from a
fiscal year ending September 30 and no Subsidiary will change its fiscal year
from the fiscal year in effect on the date hereof.

 

ARTICLE 7

EVENTS OF DEFAULT

 

If any of the following events (“Events of Default”) shall occur:

 

(a) the Borrower shall fail to pay any principal of any Loan or any LC
Reimbursement Obligation when the same shall become due, whether at the due date
thereof or at a date fixed for prepayment thereof or otherwise;

 

(b) the Borrower shall fail to pay when due any interest on any Loan or any fee
or other amount (except an amount referred to in clause (a) above) payable under
any Loan Document, and such failure shall continue unremedied for a period of
three Business Days;

 

(c) any representation, warranty or certification made or deemed made by or on
behalf of any Borrower Group Company in or in connection with any Loan Document
or any amendment or modification thereof or waiver thereunder, or in any report,
certificate, financial statement or other document furnished pursuant to or in
connection with any Loan Document or any amendment or modification thereof or
waiver thereunder, shall prove to have been incorrect when made or deemed made;

 

(d) the Borrower shall fail to observe or perform any covenant or agreement
contained in Section 5.02, 5.05 (with respect to the existence of the Borrower)
or 5.12 or in Article 6;

 

(e) any Credit Party shall fail to observe or perform any covenant or agreement
contained in any Loan Document (other than those specified in clause (a), (b) or
(d) above), and such failure shall continue unremedied for a period of 30 days
after notice thereof from the Administrative Agent to the Borrower (which notice
will be given at the request of any Lender);

 

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(f) any Borrower Group Company shall fail to make a payment or payments (whether
of principal or interest and regardless of amount) in respect of Material Debt
when the same shall become due, whether at the due date thereof or at a date
fixed for prepayment thereof or otherwise;

 

(g) any event or condition occurs that results in the acceleration of the
maturity of any Material Debt or that enables or permits (with or without the
giving of notice, the lapse of time or both) the holder or holders of Material
Debt or any trustee or agent on its or their behalf to cause Material Debt to
become due, or to require the prepayment, repurchase, redemption or defeasance
thereof, before its scheduled maturity; provided that this clause shall not
apply to secured Debt that becomes due as a result of a voluntary sale or
transfer of the property securing such Debt;

 

(h) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of any Borrower Group Company or its debts, or of a substantial part of
its assets, under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for any Borrower Group Company or for a substantial part of its assets, and, in
any such case, such proceeding or petition shall continue undismissed for 60
days or an order or decree approving or ordering any of the foregoing shall be
entered;

 

(i) any Borrower Group Company shall (i) voluntarily commence any proceeding or
file any petition seeking liquidation, reorganization or other relief under any
Federal, state or foreign bankruptcy, insolvency, receivership or similar law
now or hereafter in effect, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition described
in clause (h) above, (iii) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar official for
any Borrower Group Company or for a substantial part of its assets, (iv) file an
answer admitting the material allegations of a petition filed against it in any
such proceeding, (v) make a general assignment for the benefit of creditors or
(vi) take any action for the purpose of effecting any of the foregoing;

 

(j) any Borrower Group Company shall become unable, admit in writing its
inability or fail generally to pay its debts as they become due;

 

(k) one or more judgments for the payment of money in an aggregate amount
exceeding $5,000,000 shall be rendered against one or more Borrower Group
Companies and shall remain undischarged for a period of 30 consecutive

 

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days during which execution shall not be effectively stayed, or any action shall
be legally taken by a judgment creditor to attach or levy upon any asset of any
Borrower Group Company to enforce any such judgment;

 

(l) an ERISA Event shall have occurred that, in the opinion of the Required
Lenders, when taken together with all other ERISA Events that have occurred,
could reasonably be expected to result in liability of the Borrower and its
Subsidiaries in an aggregate amount exceeding $5,000,000;

 

(m) any Lien purported to be created under any Security Document shall cease to
be, or shall be asserted by any Credit Party not to be, a valid and perfected
Lien on any Collateral, with the priority required by the applicable Security
Document, except (i) as a result of a sale or other disposition of the
applicable Collateral in a transaction permitted under the Loan Documents or
(ii) as a result of the Administrative Agent’s failure to maintain possession of
any stock certificates, promissory notes or other documents delivered to it
under the Security Agreement;

 

(n) a Change in Control shall occur; or

 

(o) any Subsidiary Guarantor’s Secured Guarantee shall at any time fail to
constitute a valid and binding agreement of such Subsidiary Guarantor or any
party shall so assert in writing;

 

then, and in every such event (except an event with respect to the Borrower
described in clause (h) or (i) above), and at any time thereafter during the
continuance of such event, the Administrative Agent may, and at the request of
the Required Lenders shall, by notice to the Borrower, take either or both of
the following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and (ii)
declare the Loans then outstanding to be due and payable in whole (or in part,
in which case any principal not so declared to be due and payable may thereafter
be declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of the Borrower accrued hereunder, shall become due
and payable immediately, without presentment, demand, protest or other notice of
any kind, all of which are waived by the Borrower; and in the case of any event
with respect to the Borrower described in clause (h) or (i) above, the
Commitments shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and all fees and other
obligations of the Borrower accrued hereunder, shall automatically become due
and payable, without presentment, demand, protest or other notice of any kind,
all of which are waived by the Borrower.

 

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ARTICLE 8

THE ADMINISTRATIVE AGENT

 

Section 8.01. Appointment and Authorization. Each Lender Party irrevocably
appoints the Administrative Agent as its agent and authorizes the Administrative
Agent (i) to sign and deliver the Security Documents and (ii) to take such
actions on its behalf and to exercise such powers as are delegated to the
Administrative Agent by the terms of the Loan Documents, together with such
actions and powers as are reasonably incidental thereto.

 

Section 8.02. Rights and Powers as a Lender. A bank serving as the
Administrative Agent shall, in its capacity as a Lender, have the same rights
and powers as any other Lender and may exercise the same as though it were not
the Administrative Agent. Such bank and its Affiliates may accept deposits from,
lend money to and generally engage in any kind of business with any Borrower
Group Company or Affiliate thereof as if it were not the Administrative Agent.

 

Section 8.03. Limited Duties and Responsibilities. The Administrative Agent
shall not have any duties or obligations except those expressly set forth in the
Loan Documents. Without limiting the generality of the foregoing, (a) the
Administrative Agent shall not be subject to any fiduciary or other implied
duties, regardless of whether a Default has occurred and is continuing, (b) the
Administrative Agent shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated by the Loan Documents that the Administrative Agent is
required in writing to exercise by the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02) and (c) except as expressly set forth in the Loan
Documents, the Administrative Agent shall not have any duty to disclose, and
shall not be liable for any failure to disclose, any information relating to any
Borrower Group Company that is communicated to or obtained by the bank serving
as Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02) or in the absence of its own gross negligence or
willful misconduct. The Administrative Agent shall be deemed not to have
knowledge of any Default unless and until written notice thereof is given to the
Administrative Agent by the Borrower or a Lender, and the Administrative Agent
shall not be responsible for or have any duty to ascertain or inquire into (i)
any statement, warranty or representation made in or in connection with any Loan
Document, (ii) the contents of any certificate, report or other document
delivered thereunder or in connection therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth in any Loan Document, (iv) the validity, enforceability, effectiveness or
genuineness of any Loan Document or

 

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any other agreement, instrument or document or (v) the satisfaction of any
condition set forth in Article 4 or elsewhere in any Loan Document, other than
to confirm receipt of items expressly required to be delivered to the
Administrative Agent.

 

Section 8.04. Authority to Rely on Certain Writings, Statements and Advice. The
Administrative Agent shall be entitled to rely on, and shall not incur any
liability for relying on, any notice, request, certificate, consent, statement,
instrument, document or other writing believed by it to be genuine and to have
been signed or sent by the proper Person. The Administrative Agent also may rely
on any statement made to it orally or by telephone and believed by it to be made
by the proper Person, and shall not incur any liability for relying thereon. The
Administrative Agent may consult with legal counsel (who may be counsel for any
Borrower Group Company), independent accountants and other experts selected by
it, and shall not be liable for any action taken or not taken by it in
accordance with the advice of any such counsel, accountants or experts.

 

Section 8.05. Sub-Agents and Related Parties. The Administrative Agent may
perform any and all its duties and exercise its rights and powers by or through
one or more sub-agents appointed by it. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding Sections of this Article shall apply to any such sub-agent and to the
Related Parties of the Administrative Agent and any such sub-agent, and shall
apply to activities in connection with the syndication of the credit facilities
provided for herein as well as activities as Administrative Agent.

 

Section 8.06. Resignation; Successor Administrative Agent. Subject to the
appointment and acceptance of a successor Administrative Agent as provided in
this Section, the Administrative Agent may resign at any time by notifying the
Lenders, each LC Issuing Bank and the Borrower. Upon any such resignation, the
Required Lenders shall have the right, in consultation with the Borrower, to
appoint a successor. If no successor shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30 days after
the retiring Administrative Agent gives notice of its resignation, then the
retiring Administrative Agent may, on behalf of the Lenders and each LC Issuing
Bank, appoint a successor Administrative Agent which shall be a bank with an
office in New York, New York, or an Affiliate of any such bank. Upon acceptance
of its appointment as Administrative Agent hereunder by a successor, such
successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. The fees payable by the Borrower to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed by
the Borrower and such successor. After the Administrative Agent’s resignation
hereunder, the provisions

 

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of this Article and Section 9.03 shall continue in effect for the benefit of
such retiring Administrative Agent, its sub-agents and their respective Related
Parties in respect of any actions taken or omitted to be taken by any of them
while the retiring Administrative Agent was acting as Administrative Agent.

 

Section 8.07. Credit Decisions by Lenders. Each Lender acknowledges that it has,
independently and without reliance on the Administrative Agent or any other
Lender and based on such documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement. Each
Lender also acknowledges that it will, independently and without reliance on the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based on this Agreement,
any other Loan Document or related agreement or any document furnished hereunder
or thereunder.

 

ARTICLE 9

MISCELLANEOUS

 

Section 9.01. Notices. (a) Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by facsimile, as follows:

 

(i) if to the Borrower, to it at 8500 Normandale Lake Boulevard, Suite 1230,
Bloomington, MN 55437, Attention of Michael Elia (Facsimile No. (952) 921-2099),
with a copy to Dechert LLP, 400 Bell Atlantic Tower, 1717 Arch Street,
Philadelphia, PA 19103-2793, Attention of Gary Green (Facsimile No. (215)
994-2222);

 

(ii) if to the Administrative Agent or to JPMorgan Chase Bank, N.A. as an LC
Issuing Bank or as Swingline Lender, to JPMorgan Chase Bank, N.A., Loan and
Agency Services Group, 1111 Fannin, 10th Floor, Houston, Texas 77002, Attention
of Michael Chau (Facsimile No. (713) 750-2938) or Debbie Meche (Facsimile No.
(713) 750-2938), with a copy to JPMorgan Chase Bank, 270 Park Avenue, 15th
Floor, New York, New York 10017, Attention of Freddy Luscher (Facsimile No.
(212) 270-2901);

 

(iii) if to any other Lender, to it at its address (or facsimile number) set
forth in its Administrative Questionnaire.

 

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(b) Notices and other communications to the Lenders hereunder may be delivered
or furnished by electronic communications pursuant to procedures approved by the
Administrative Agent; provided that the foregoing shall not apply to notices
pursuant to Article 2 unless otherwise agreed by the Administrative Agent and
the applicable Lender. The Administrative Agent or the Borrower may, in its
discretion, agree to accept notices and other communications to it hereunder by
electronic communications pursuant to procedures approved by it; provided that
approval of such procedures may be limited to particular notices or
communications.

 

(c) Any party hereto may change its address or facsimile number for notices and
other communications hereunder by notice to the Administrative Agent and the
Borrower. All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement will be deemed to have been
given on the date of receipt.

 

Section 9.02. Waivers; Amendments. (a) No failure or delay by any Lender Party
in exercising any right or power hereunder or under any other Loan Document
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power. The rights and remedies of the Lender
Parties under the Loan Documents are cumulative and are not exclusive of any
rights or remedies that they would otherwise have. No waiver of any provision of
any Loan Document or consent to any departure by any Credit Party therefrom
shall in any event be effective unless the same shall be permitted by subsection
(b) of this Section, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given. Without limiting the
generality of the foregoing, neither the making of a Loan nor the issuance,
amendment, renewal or extension of a Letter of Credit shall be construed as a
waiver of any Default, regardless of whether any Lender Party had notice or
knowledge of such Default at the time.

 

(b) No Loan Document or provision thereof may be waived, amended or modified
except, in the case of this Agreement, by an agreement or agreements in writing
entered into by the Borrower and the Required Lenders or, in the case of any
other Loan Document, by an agreement or agreements in writing entered into by
the parties thereto with the consent of the Required Lenders; provided that no
such agreement shall:

 

(i) increase the Commitment of any Lender without its written consent;

 

(ii) reduce the principal amount of any Loan or LC Disbursement or reduce the
rate of interest thereon, or reduce any fee payable hereunder, without the
written consent of each Lender Party affected thereby;

 

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(iii) postpone the maturity of any Loan, or the required date of reimbursement
of any LC Disbursement, or any date for the payment of any interest or fee
payable hereunder, or reduce the amount of, waive or excuse any such payment, or
postpone the scheduled date of expiration of any Commitment, without the written
consent of each Lender Party affected thereby;

 

(iv) change Section 2.16(b) or 2.16(c) in a manner that would alter the pro rata
sharing of payments required thereby, without the written consent of each
Lender;

 

(v) change any provision of this Section or the percentage set forth in the
definition of “Required Lenders” or any other provision of any Loan Document
specifying the number or percentage of Lenders required to take any action
thereunder, without the written consent of each Lender;

 

(vi) release any Subsidiary Guarantor from its Secured Guarantee (except as
expressly provided in the Security Agreement), or limit its liability in respect
of its Secured Guarantee, without (x) the written consent of each Lender and (y)
the prior or simultaneous release and termination of any Guarantee of the
Subordinated Debt by such Subsidiary Guarantor;

 

(vii) release all or substantially all of the Collateral from the Transaction
Liens, without the written consent of each Lender; or

 

(viii) permit the Borrower to incur secured Debt not otherwise permitted to be
incurred hereunder in an amount in excess of $50,000,000, without the written
consent of the Supermajority Lenders;

 

provided further that no such agreement shall amend, modify or otherwise affect
the rights or duties of the Administrative Agent, any LC Issuing Bank or any
Swingline Lender without its prior written consent.

 

(c) Notwithstanding the foregoing, if the Required Lenders enter into or consent
to any waiver, amendment or modification pursuant to subsection (b) of this
Section, no consent of any other Lender will be required if, when such waiver,
amendment or modification becomes effective, (i) the Commitment of each Lender
not consenting thereto terminates and (ii) all amounts owing to it or accrued
for its account hereunder are paid in full.

 

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(d) For the avoidance of doubt, an increase in Commitments in accordance with
Section 2.19 shall not constitute an amendment, waiver or modification for
purposes of this Section 9.02.

 

Section 9.03. Expenses; Indemnity; Damage Waiver. (a) The Borrower shall pay (i)
all reasonable out-of-pocket expenses incurred by the Administrative Agent and
its Affiliates, including the reasonable fees, charges and disbursements of
counsel for the Administrative Agent, in connection with the syndication of the
credit facilities provided for herein, the preparation and administration of the
Loan Documents and any amendments, modifications or waivers of the provisions
thereof (whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable out-of-pocket expenses incurred by each LC
Issuing Bank in connection with the issuance, amendment, renewal or extension of
any Letter of Credit or any demand for payment thereunder and (iii) all
out-of-pocket expenses incurred by any Lender Party, including the fees, charges
and disbursements of any counsel for any Lender Party, in connection with the
enforcement or protection of its rights in connection with the Loan Documents
(including its rights under this Section), the Letters of Credit or the Loans,
including all such out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of the Letters of Credit or the Loans.

 

(b) The Borrower shall indemnify each of the Lender Parties and their respective
Related Parties (each such Person being called an “Indemnitee”) against, and
hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including the fees, charges and disbursements
of counsel for any Indemnitee, incurred by or asserted against any Indemnitee
arising out of, in connection with, or as a result of (i) the execution or
delivery of any Loan Document or any other agreement or instrument contemplated
hereby, the performance by the parties to the Loan Documents of their respective
obligations thereunder or the consummation of the Financing Transactions or any
other transactions contemplated hereby, (ii) any Loan or Letter of Credit or the
use of the proceeds therefrom (including any refusal by any LC Issuing Bank to
honor a demand for payment under a Letter of Credit if the documents presented
in connection with such demand do not strictly comply with the terms of such
Letter of Credit), (iii) any actual or alleged presence or release of Hazardous
Materials on or from any Mortgaged Property or any other property currently or
formerly owned or operated by the Borrower or any Subsidiary, or any
Environmental Liability related in any way to the Borrower or any Subsidiary or
(iv) any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory and regardless of whether any Indemnitee is a party thereto; provided
that such indemnity shall not be available to any Indemnitee to the extent that
such losses, claims, damages, liabilities or related expenses are determined by
a court of competent jurisdiction by final and nonappealable judgment to have
resulted from such Indemnitee’s gross negligence or willful misconduct.

 

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(c) To the extent that the Borrower fails to pay any amount required to be paid
by it to the Administrative Agent, any LC Issuing Bank or any Swingline Lender
under subsection (a) or (b) of this Section, each Lender severally agrees to pay
to the Administrative Agent, such LC Issuing Bank or such Swingline Lender, as
the case may be, such Lender’s pro rata share (determined as of the time that
the applicable unreimbursed expense or indemnity payment is sought) of such
unpaid amount; provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against the Administrative Agent, the applicable LC Issuing Bank or
the applicable Swingline Lender in its capacity as such. For purposes hereof, a
Lender’s “pro rata share” shall be determined based on its share of the sum of
the total Revolving Exposures and unused Commitments at the time.

 

(d) To the extent permitted by applicable law, the Borrower shall not assert,
and hereby waives, any claim against any Indemnitee, on any theory of liability,
for special, indirect, consequential or punitive damages (as opposed to direct
or actual damages) arising out of, in connection with, or as a result of, this
Agreement or any agreement or instrument contemplated hereby, the Financing
Transactions, any Loan or Letter of Credit or the use of the proceeds thereof.

 

(e) All amounts due under this Section shall be payable within five Business
Days after written demand therefor.

 

Section 9.04. Successors and Assigns. (a) The provisions of this Agreement shall
be binding on and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby (including any Affiliate of
any LC Issuing Bank that issues any Letter of Credit), except that (i) the
Borrower may not assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender (and any attempted
assignment or transfer by the Borrower without such consent shall be null and
void) and (ii) no Lender may assign or otherwise transfer its rights or
obligations hereunder except in accordance with this Section. Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby (including any Affiliate of any LC Issuing Bank that issues any
Letter of Credit), Participants (to the extent provided in subsection (c) of
this Section) and, to the extent expressly contemplated hereby, the Related
Parties of each of the Lender Parties) any legal or equitable right, remedy or
claim under or by reason of this Agreement.

 

(b) (i) Subject to the conditions set forth in subsection (b)(ii) below, any
Lender may assign to one or more assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans at the time owing to it) with the prior written consent (such
consent not to be unreasonably withheld) of:

 

(A) the Borrower, provided that no consent of the Borrower shall be required for
an assignment to a Lender, an Affiliate of a Lender, an Approved Fund (as
defined below) or, if an Event of Default has occurred and is continuing, any
other assignee; and

 

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(B) the Administrative Agent; and

 

(C) each LC Issuing Bank.

 

(ii) Assignments shall be subject to the following additional conditions:

 

(A) except in the case of an assignment to a Lender or an Affiliate of a Lender
or an assignment of the entire remaining amount of the assigning Lender’s
Commitment or Loans, the amount of the Commitment or Loans of the assigning
Lender subject to each such assignment (determined as of the date the Assignment
with respect to such assignment is delivered to the Administrative Agent) shall
not be less than $5,000,000 unless each of the Borrower and the Administrative
Agent otherwise consent, provided that no such consent of the Borrower shall be
required if an Event of Default has occurred and is continuing;

 

(B) each partial assignment shall be made as an assignment of a proportionate
part of all the assigning Lender’s rights and obligations under this Agreement;

 

(C) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment, together with a processing and recordation
fee of $3,500; and

 

(D) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent a completed Administrative Questionnaire.

 

For the purposes of this Section 9.04(b), the term “Approved Fund” has the
following meaning:

 

“Approved Fund” means any Person (other than a natural person) that is engaged
in making, purchasing, holding or investing in bank loans and similar extensions
of credit in the ordinary course of its business and that is administered or
managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an
Affiliate of an entity that administers or manages a Lender.

 

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(iii) Subject to acceptance and recording thereof pursuant to subsection (b)(ii)
of this Section, from and after the effective date specified in each Assignment
the assignee thereunder shall be a party hereto and, to the extent of the
interest assigned by such Assignment have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment, be released from its obligations
under this Agreement (and, in the case of an Assignment covering all of the
assigning Lender’s rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.13, 2.14, 2.15 and 9.03). Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this Section 9.04 shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance with
subsection (c) of this Section.

 

(iv) The Administrative Agent, acting for this purpose as an agent of the
Borrower, shall maintain at one of its offices a copy of each Assignment
delivered to it and a register for the recordation of the names and addresses of
the Lenders, and the Commitment of, and principal amount of the Loans and LC
Disbursements owing to, each Lender pursuant to the terms hereof from time to
time (the “Register”). The entries in the Register shall be conclusive, and the
Borrower, the Administrative Agent, the Issuing Bank and the Lenders may treat
each Person whose name is recorded in the Register pursuant to the terms hereof
as a Lender hereunder for all purposes of this Agreement, notwithstanding notice
to the contrary. The Register shall be available for inspection by the Borrower,
the Issuing Bank and any Lender, at any reasonable time and from time to time
upon reasonable prior notice.

 

(v) Upon its receipt of a duly completed Assignment executed by an assigning
Lender and an assignee, the assignee’s completed Administrative Questionnaire
(unless the assignee shall already be a Lender hereunder), the processing and
recordation fee referred to in subsection (b) of this Section and any written
consent to such assignment required by subsection (b) of this Section, the
Administrative Agent shall accept such Assignment and record the information
contained therein in the Register. No assignment shall be effective for purposes
of this Agreement unless it has been recorded in the Register as provided in
this subsection.

 

(c) (i) Any Lender may, without the consent of the Borrower or any other Lender
Party, sell participations to one or more banks or other entities (a
“Participant”) in all or a portion of such Lender’s rights and obligations under
this Agreement (including all or a portion of its Commitment and the Loans

 

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owing to it); provided that (A) such Lender’s obligations under this Agreement
shall remain unchanged, (B) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (C) the
Borrower and the other Lender Parties shall continue to deal solely and directly
with such Lender in connection with such Lender’s rights and obligations under
this Agreement. Any agreement or instrument pursuant to which a Lender sells
such a participation shall provide that such Lender shall retain the sole right
to enforce the Loan Documents and to approve any amendment, modification or
waiver of any provision of the Loan Documents; provided that such agreement or
instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in the
first proviso to Section 9.02(b) that affects such Participant. Subject to
subsection (c)(ii) of this Section, the Borrower agrees that each Participant
shall be entitled to the benefits of Sections 2.13, 2.14 and 2.15 to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to subsection (b) of this Section. To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 9.08 as though it
were a Lender, provided such Participant agrees to be subject to Section 2.16(c)
as though it were a Lender.

 

(ii) A Participant shall not be entitled to receive any greater payment under
Section 2.13 or 2.15 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant, unless the
sale of the participation to such Participant is made with the Borrower’s prior
written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 2.15 unless the Borrower
is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 2.15(e) as
though it were a Lender.

 

(d) Any Lender may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank, and this Section shall not apply to any such pledge or assignment
of a security interest; provided that no such pledge or assignment of a security
interest shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.

 

Section 9.05. Survival. All covenants, agreements, representations and
warranties made by the Credit Parties in the Loan Documents and in certificates
or other instruments delivered in connection with or pursuant to the Loan
Documents shall be considered to have been relied upon by the other parties
hereto and shall survive the execution and delivery of the Loan Documents and
the making of any Loans and issuance of any Letters of Credit, regardless of any
investigation made by any such other party or on its behalf and notwithstanding
that any Lender Party may have had notice or knowledge of any Default or

 

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incorrect representation or warranty at the time any credit is extended
hereunder, and shall continue in full force and effect as long as any principal
of or accrued interest on any Loan or any fee or other amount payable hereunder
is outstanding and unpaid or any Letter of Credit is outstanding or any
Commitment has not expired or terminated. The provisions of Sections 2.13, 2.14,
2.15 and 9.02(d) and Article 8 shall survive and remain in full force and effect
regardless of the consummation of the Financing Transactions, the repayment of
the Loans, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement or any provision hereof.

 

Section 9.06. Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement, the other
Loan Documents and any separate letter agreements with respect to fees payable
to the Administrative Agent constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement (i) will become
effective when the Administrative Agent shall have signed this Agreement and
received counterparts hereof that, when taken together, bear the signatures of
each of the other parties hereto and (ii) thereafter will be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns. Delivery of an executed counterpart of a signature page of this
Agreement by facsimile will be effective as delivery of a manually executed
counterpart of this Agreement.

 

Section 9.07. Severability. If any provision of any Loan Document is invalid,
illegal or unenforceable in any jurisdiction then, to the fullest extent
permitted by law, (i) such provision shall, as to such jurisdiction, be
ineffective to the extent (but only to the extent) of such invalidity,
illegality or unenforceability, (ii) the other provisions of the Loan Documents
shall remain in full force and effect in such jurisdiction and shall be
liberally construed in favor of the Lender Parties in order to carry out the
intentions of the parties thereto as nearly as may be possible and (iii) the
invalidity, illegality or unenforceability of any such provision in any
jurisdiction shall not affect the validity, legality or enforceability of such
provision in any other jurisdiction.

 

Section 9.08. Right of Set-off. If an Event of Default shall have occurred and
be continuing, each Lender and each of its Affiliates is authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other obligations at any time owing by such Lender
or Affiliate to or for the credit or the account of the Borrower against any
obligations of the Borrower now or hereafter existing hereunder and held by such
Lender, irrespective of whether or not such Lender shall have made any demand

 

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hereunder and although such obligations may be unmatured. The rights of each
Lender under this Section are in addition to other rights and remedies
(including other rights of setoff) that such Lender may have.

 

Section 9.09. Governing Law; Jurisdiction; Consent to Service of Process. (a)
This Agreement shall be construed in accordance with and governed by the law of
the State of New York.

 

(b) The Borrower irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of the Supreme Court of the State of
New York sitting in New York County and of the United States District Court of
the Southern District of New York, and any relevant appellate court, in any
action or proceeding arising out of or relating to any Loan Document, or for
recognition or enforcement of any judgment, and each party hereto irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State court or, to the
extent permitted by law, in such Federal court. Each party hereto agrees that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in any Loan Document shall affect any right that any
Lender Party may otherwise have to bring any action or proceeding relating to
any Loan Document against any Credit Party or its properties in the courts of
any jurisdiction.

 

(c) The Borrower irrevocably and unconditionally waives, to the fullest extent
it may legally and effectively do so, any objection that it may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of or
relating to any Loan Document in any court referred to in subsection (b) of this
Section. Each party hereto irrevocably waives, to the fullest extent permitted
by law, the defense of an inconvenient forum to the maintenance of any such
suit, action or proceeding in any such court.

 

(d) Each party hereto irrevocably consents to service of process in the manner
provided for notices in Section 9.01. Nothing in any Loan Document will affect
the right of any party hereto to serve process in any other manner permitted by
law.

 

Section 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO ANY
LOAN DOCUMENT OR ANY TRANSACTION CONTEMPLATED THEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY

 

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HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.

 

Section 9.11. Headings. Article and Section headings and the Table of Contents
herein are for convenience of reference only, are not part of this Agreement and
shall not affect the construction of, or be taken into consideration in
interpreting, this Agreement.

 

Section 9.12. Confidentiality. Each Lender Party agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates’ directors, officers, employees
and agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory
authority, (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (d) to any other party to this Agreement,
(e) in connection with the exercise of any remedy hereunder or any suit, action
or proceeding relating to any Loan Document or the enforcement of any right
thereunder, (f) subject to an agreement containing provisions substantially the
same as those of this Section, to (i) any actual or prospective assignee of or
Participant in any of its rights or obligations under this Agreement or (ii) any
actual or prospective counterparty (or its advisors) to any swap or derivative
transaction relating to the Borrower and its obligations, (g) with the consent
of the Borrower or (h) to the extent such Information either (i) becomes
publicly available other than as a result of a breach of this Section or (ii)
becomes available to any Lender Party on a nonconfidential basis from a source
other than the Borrower. For the purposes of this Section, “Information” means
all information received from the Borrower relating to the Borrower or its
business, other than any such information that is available to any Lender Party
on a nonconfidential basis before disclosure by the Borrower; provided that, in
the case of information received from the Borrower after the date hereof, such
information is clearly identified at the time of delivery as confidential. Any
Person required to maintain the confidentiality of Information as provided in
this Section shall be considered to have complied with its obligation to do so
if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.

 

Section 9.13. Interest Rate Limitation. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together with
all fees, charges and other amounts that are treated as interest on such Loan

 

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under applicable law (collectively the “Charges”), shall exceed the maximum
lawful rate (the “Maximum Rate”) that may be contracted for, charged or
otherwise received by the Lender holding such Loan in accordance with applicable
law, the rate of interest payable in respect of such Loan hereunder, together
with all Charges payable in respect thereof, shall be limited to the Maximum
Rate and, to the extent lawful, the interest and Charges that would have been
payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such Lender shall have received
such cumulated amount, together with interest thereon at the Federal Funds
Effective Rate to the date of payment.

 

Section 9.14. Continued Effectiveness of Security Agreement. The parties hereto
hereby acknowledge and confirm that, after giving effect to the occurrence of
the Effective Date and the amendment and restatement of the Existing Credit
Agreement pursuant to this Amended Agreement, (i) the Security Agreement shall
continue to be in full force and effect, (ii) all references in the Security
Agreement to the “Credit Agreement” shall refer to this Amended Agreement (as it
may be further amended, supplemented or otherwise modified in accordance with
the terms hereof) and the “Secured Obligations” shall include (without
limitation of such term as it is defined in the Security Agreement) all amounts
payable by the Borrower hereunder, (iii) the effectiveness of this Amended
Agreement and consummation of the transactions contemplated hereby to occur on
the Effective Date (the “Effective Date Transactions”) have no effect on the
validity or perfection of the security interest of the Administrative Agent, on
behalf of the Secured Parties, created pursuant to the Security Agreement and
(iv) the security interest granted to the Administrative Agent by the Credit
Parties in the Collateral pursuant to the Security Agreement will be a valid and
perfected security interest to the same extent it was prior to the effectiveness
of the Amended Agreement and consummation of the Effective Date Transactions.

 

Section 9.15. USA Patriot Act. Each Lender hereby notifies the Borrower that
pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)), it is required to obtain, verify and record
information that identifies the Borrower, which information includes the name
and address of the Borrower and other information that will allow such Lender to
identify the Borrower in accordance with said Act.

 

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

 

FASTENTECH, INC.

By:

 

 

--------------------------------------------------------------------------------

Name:

   

Title:

   

--------------------------------------------------------------------------------

JPMORGAN CHASE BANK, N.A., as a Lender, as an LC Issuing Bank, as a Swingline
Lender and as Administrative Agent

By:

 

 

--------------------------------------------------------------------------------

Name:

   

Title:

   

--------------------------------------------------------------------------------

NATIONAL CITY BANK, as a Lender, as a Swingline Lender and as a Co-Syndication
Agent

By:

 

 

--------------------------------------------------------------------------------

Name:

   

Title:

   

--------------------------------------------------------------------------------

KEY BANK N.A., as a Lender, as a Co-Syndication Agent and as a Co-Documentation
Agent

By:

 

 

--------------------------------------------------------------------------------

Name:

   

Title:

   

--------------------------------------------------------------------------------

LASALLE BANK N.A., as a Lender and as a Co-Documentation Agent

By:

 

 

--------------------------------------------------------------------------------

Name:

   

Title:

   

--------------------------------------------------------------------------------

FB COMMERCIAL FINANCE, INC., as a Lender

By:

 

 

--------------------------------------------------------------------------------

Name:

   

Title:

   

--------------------------------------------------------------------------------

FIFTH THIRD BANK, as a Lender

By:

 

 

--------------------------------------------------------------------------------

Name:

   

Title:

   

--------------------------------------------------------------------------------

LEHMAN COMMERCIAL PAPER INC., as a Lender

By:

 

 

--------------------------------------------------------------------------------

Name:

   

Title:

   

--------------------------------------------------------------------------------

As to Section 9.14:

 

PROGRESSIVE STAMPING CO. (DE), INC.

By:

 

 

--------------------------------------------------------------------------------

Name:

   

Title:

   

NELSON STUD WELDING, INC.

By:

 

 

--------------------------------------------------------------------------------

Name:

   

Title:

   

NELSON STUD WELDING INTERNATIONAL, INC.

By:

 

 

--------------------------------------------------------------------------------

Name:

   

Title:

   

 

FASTENTECH MICHIGAN HOLDINGS, INC.

By:

 

 

--------------------------------------------------------------------------------

Name:

   

Title:

   

--------------------------------------------------------------------------------

FASTENTECH DELAWARE HOLDINGS INC.

By:

 

 

--------------------------------------------------------------------------------

Name:

   

Title:

   

THE FERRY CAP & SET SCREW COMPANY

By:

 

 

--------------------------------------------------------------------------------

Name:

   

Title:

   

SPECIALTY BAR PRODUCTS COMPANY

By:

 

 

--------------------------------------------------------------------------------

Name:

   

Title:

   

INTEGRATED ENERGY TECHNOLOGIES, INC.

By:

 

 

--------------------------------------------------------------------------------

Name:

   

Title:

   

GEAR & BROACH, INC.

By:

 

 

--------------------------------------------------------------------------------

Name:

   

Title:

   

--------------------------------------------------------------------------------

SPIEGELBERG MANUFACTURING, INC.

By:

 

 

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Name:

   

Title:

   

MECO, INC.

By:

 

 

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Name:

   

Title:

   

SPUN METALS, INC.

By:

 

 

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Name:

   

Title:

   

GCE INDUSTRIES, INC.

By:

 

 

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Name:

   

Title: