Execution Copy

   

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CREDIT AGREEMENT

dated as of

August 7, 2018

among

SIFCO INDUSTRIES, INC.,
T & W FORGE, LLC,
QUALITY ALUMINUM FORGE, LLC,

and

JPMORGAN CHASE BANK, N.A.

ASSET BASED LENDING

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CREDIT AGREEMENT dated as of August 7, 2018 (as it may be amended or modified
from time to time, together with all Exhibits, Schedules and Riders annexed
hereto from time to time, each of which is hereby incorporated herein and made a
part hereof, this “Agreement”), by and among SIFCO Industries, Inc., an Ohio
corporation (“SIFCO”), T & W Forge, LLC, an Ohio limited liability company (“T &
W”), and Quality Aluminum Forge, LLC, an Ohio limited liability company
(“Quality Forge” and, together with SIFCO and T & W, collectively, the
“Borrowers” and each, individually, a “Borrower”), the Loan Parties party
hereto, and JPMorgan Chase Bank, N.A., a national banking association (the
“Lender”).

The parties hereto agree as follows:

Article I
Definitions

SECTION 1.01.    Defined Terms. As used in this Agreement, the capitalized terms
shall have the meanings specified in the Definitions Schedule attached
hereto.    

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

SECTION 1.03.    Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including” shall
be deemed to be followed by the phrase “without limitation”. The word “law”
shall be construed as referring to all statutes, rules, regulations, codes and
other laws (including official rulings and interpretations thereunder having the
force of law or with which affected Persons customarily comply) and all
judgments, orders and decrees of all Governmental Authorities. 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,
restated, supplemented or otherwise modified (subject to any restrictions on
such amendments, restatements, supplements or modifications set forth herein),
(b) any definition of or reference to any statute, rule or regulation shall be
construed as referring thereto as from time to time amended, supplemented or
otherwise modified (including by succession of comparable successor laws), (c)
any reference herein to any Person shall be construed to include such Person’s
successors and assigns (subject to any restrictions on assignments set forth
herein) and, in the case of any Governmental Authority, any other Governmental
Authority that shall have succeeded to any or all functions thereof, (d) 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, (e) all references herein to Articles, Sections, Exhibits,
Schedules and Riders shall be construed to refer to Articles and Sections of,
and Exhibits, Schedules and Riders to, this Agreement, (f) any reference in any
definition to the phrase “at any time” or “for any period” shall refer to the
same time or period for all calculations or determinations within such
definition, and (g) the words “asset” and “property” shall be construed to have
the same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, securities, accounts and contract rights.

SECTION 1.04.    Accounting Terms; GAAP. (a) Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
that, if after the date hereof the Borrowers migrate to IFRS or there occurs any
change in GAAP or in the application thereof on the operation of any provision
hereof and the Borrowers notify the Lender that the Borrowers request an
amendment to any provision hereof to eliminate the effect of such migration to
IFRS or change in GAAP or in the application thereof (or if the Lender notifies
the Borrowers that the Lender requests an amendment to any provision hereof for
such purpose), regardless of whether any such notice is given before or after
such migration to IFRS or change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP

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as in effect and applied immediately before such migration or change shall have
become effective until such notice shall have been withdrawn or such provision
amended in accordance herewith.     
(b)    Notwithstanding anything to the contrary contained in Section 1.04(a) or
in the definition of “Capital Lease Obligations,” in the event of an accounting
change requiring all leases to be capitalized, only those leases (assuming for
purposes hereof that such leases were in existence on the date hereof) that
would constitute capital leases in conformity with GAAP on the date hereof shall
be considered capital leases, and all calculations and deliverables under this
Agreement or any other Loan Document shall be made or delivered, as applicable,
in accordance therewith.

SECTION 1.05.    Interest Rates. The Lender does not warrant or accept
responsibility for, and shall not have any liability with respect to, the
administration, submission or any other matter related to the rates in the
definition of “LIBO Rate” or with respect to any comparable or successor rate
thereto, or replacement rate therefor.

ARTICLE II    
The Credits

SECTION 2.01.    Commitment. Subject to the terms and conditions set forth
herein, the Lender agrees to make Revolving Loans to the Borrowers from time to
time during the Availability Period in an aggregate principal amount that will
not result in the Revolving Exposure exceeding the lesser of (x) the Revolving
Commitment, less the Availability Block, if applicable, and (y) the Borrowing
Base, subject to the Lender’s authority, in its sole discretion, to make
Protective Advances pursuant to the terms of Section 2.04. Within the foregoing
limits and subject to the terms and conditions set forth herein, the Borrowers
may borrow, prepay and reborrow Revolving Loans.

SECTION 2.02.    Loans and Borrowings. (%3) Each Loan shall be made as part of a
Borrowing consisting of Loans of the same Class and Type. Any Protective Advance
shall be made in accordance with the procedures set forth in Section 2.04.
(a)    Subject to Section 2.13, each Borrowing, if applicable, shall be
comprised entirely of CBFR Loans or Eurodollar Loans as the Borrower
Representative may request in accordance herewith, provided that all Borrowings
made on the Effective Date must be made as CBFR Borrowings. The Lender at its
option may make any Eurodollar Loan by causing any domestic or foreign branch or
Affiliate of the Lender to make such Loan (and in the case of an Affiliate, the
provisions of Sections 2.13, 2.14, 2.15 and 2.16 shall apply to such Affiliate
to the same extent as to the Lender); provided that any exercise of such option
shall not affect the obligation of the Borrowers to repay such Loan in
accordance with the terms of this Agreement.
(b)    At the commencement of each Interest Period for any Eurodollar Borrowing,
such Borrowing shall be in an aggregate amount that is an integral multiple
equal to $250,000 and not less than $1,000,000. CBFR Borrowings may be in any
amount. Borrowings of more than one Type and Class may be outstanding at the
same time; provided that there shall not at any time be more than 5 Eurodollar
Borrowings outstanding.
(c)    Notwithstanding any other provision of this Agreement, the Borrower
Representative shall not be entitled to request, or to elect to convert or
continue, any Borrowing if the Interest Period requested with respect thereto
would end after the Maturity Date.

SECTION 2.03.    Borrowing Procedures; Requests for Revolving Borrowings.
(a)    Controlled Disbursement Account; DDA Access Product. Not later than 1:00
p.m., Chicago time, on each Business Day, the Lender shall, subject to the
conditions of this Agreement (but without any further written notice required),
make available to the Borrower Representative, by a credit to the Funding
Account, the proceeds of a CBFR Borrowing to the extent necessary to pay items
to be drawn on the Controlled Disbursement Accounts that day. All other
Revolving Loans shall be made upon notice given in accordance with §2.03(b). In

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addition, if the Borrowers have elected the DDA Access Product, the Borrowers
hereby authorize the Lender to, and the Lender shall, subject to the terms and
conditions set forth herein (but without any further written notice required),
to the extent that from time to time on any Business Day funds are required
under the DDA Access Product to reach the Target Balance (a “Deficiency Funding
Date”), make available to the applicable Borrower the proceeds of a CBFR
Borrowing in the amount of such deficiency up to the Target Balance, by means of
a credit to the Funding Account on or before the start of business on the next
succeeding Business Day, and such CBFR Borrowing shall be deemed made on such
Deficiency Funding Date.
(b)     Notices by the Borrowers to the Lender of requests for Revolving Loans
other than pursuant to §2.03(a). To request a Revolving Borrowing, the Borrower
Representative shall notify the Lender of such request either in writing
(delivered by hand or fax) by delivering a Borrowing Request signed by a
Responsible Officer of the Borrower Representative or through an Electronic
System if arrangements for doing so have been approved by the Lender (or if an
Extenuating Circumstance shall exist, by telephone) not later than (i) in the
case of a Eurodollar Borrowing, 10:00 a.m., Chicago time, three Business Days
before the date of the proposed Borrowing or (ii) in the case of a CBFR
Borrowing, noon, Chicago time, on the date of the proposed Borrowing; provided
that any such notice of a CBFR Revolving Borrowing to finance the reimbursement
of an LC Disbursement as contemplated by Section 2.05(e) may be given not later
than 9:00 a.m., Chicago time, on the date of the proposed Borrowing.
Each such Borrowing Request shall be irrevocable and each such telephonic
Borrowing Request, if permitted, shall be confirmed immediately upon cessation
of the Extenuating Circumstance by hand delivery, facsimile or a communication
through Electronic System to the Lender of a written Borrowing Request in a form
approved by the Lender and signed by a Responsible Officer of the Borrower
Representative. Each such written (or if permitted, telephonic) Borrowing
Request shall specify the following information in compliance with Section 2.01:

(i)    the name of the applicable Borrower;
(ii)
the aggregate amount of the requested Borrowing and, if applicable, a breakdown
of the separate wires comprising such Borrowing;

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

(iv)
whether such Borrowing is to be a CBFR Borrowing or a Eurodollar Borrowing; and

(v)
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
the term “Interest Period.”

If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be a CBFR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the applicable Borrowers
shall be deemed to have selected an Interest Period of one month's duration.

SECTION 2.04.    Protective Advances. Subject to the limitations set forth
below, the Lender is authorized by the Borrowers, from time to time in the
Lender's sole discretion (but shall have absolutely no obligation to), to make
Loans to the Borrowers, which the Lender, in its Permitted Discretion, deems
necessary or desirable (i) to preserve or protect the Collateral, or any portion
thereof, (ii) to enhance the likelihood of, or maximize the amount of, repayment
of the Loans and other Obligations or (iii) to pay any other amount chargeable
to or required to be paid by the Borrowers pursuant to the terms of this
Agreement, including payments of reimbursable expenses (including costs, fees,
and expenses as described in Section 8.03) and other sums payable under the Loan
Documents (any of such Loans are herein referred to as “Protective Advances”).
Protective Advances may be made even if the conditions precedent set forth in
Section 4.02 have not been satisfied. The Protective Advances shall be secured
by the Liens in favor of the Lender in and to the Collateral and shall
constitute Obligations hereunder. All Protective Advances shall be CBFR
Borrowings. The making of a Protective Advance on any one occasion shall not
obligate the Lender to make any Protective Advance on any other occasion.

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SECTION 2.05.    Letters of Credit. (%3) General. Subject to the terms and
conditions set forth herein, the Borrower Representative may request the
issuance of Letters of Credit for its own account or for the account of another
Borrower denominated in dollars, as the applicant thereof for support of its or
the other Loan Parties’, obligations, in a form reasonably acceptable to the
Lender at any time and from time to time during the Availability Period, and the
Lender may, but shall have no obligation to, issue such requested Letters of
Credit in accordance with and subject to the terms hereof. In the event of any
inconsistency between the terms and conditions of this Agreement and the terms
and conditions of any Letter of Credit Agreement, the terms and conditions of
this Agreement shall control. Notwithstanding anything herein to the contrary,
the Lender shall have no obligation hereunder to issue, and shall not issue, any
Letter of Credit (i) the proceeds of which would be made available to any Person
(A) to fund any activity or business of or with any Sanctioned Person, or in any
country or territory that, at the time of such funding, is the subject of any
Sanctions or (B) in any manner that would result in a violation of any Sanctions
by any party to this Agreement, (ii) if any order, judgment or decree of any
Governmental Authority or arbitrator shall by its terms purport to enjoin or
restrain the Lender from issuing such Letter of Credit, or any Requirement of
Law relating to the Lender or any request or directive (whether or not having
the force of law) from any Governmental Authority with jurisdiction over the
Lender shall prohibit, or request that the Lender refrain from, the issuance of
letters of credit generally or such Letter of Credit in particular or shall
impose upon the Lender with respect to such Letter of Credit any restriction,
reserve or capital requirement (for which the Lender is not otherwise
compensated hereunder) not in effect on the Effective Date, or shall impose upon
the Lender any unreimbursed loss, cost or expense which was not applicable on
the Effective Date and which the Lender in good faith deems material to it, or
(iii) if the issuance of such Letter of Credit would violate one or more
policies of the Lender applicable to letters of credit generally; provided that,
notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street
Reform and Consumer Protection Act and all requests, rules, guidelines,
requirements or directives thereunder or issued in connection therewith or in
the implementation thereof, and (y) all requests, rules, guidelines,
requirements or directives promulgated by the Bank for International
Settlements, the Basel Committee on Banking Supervision (or any successor or
similar authority) or the United States or foreign regulatory authorities, in
each case pursuant to Basel III, shall in each case be deemed not to be in
effect on the Effective Date for purposes of clause (ii) above, regardless of
the date enacted, adopted, issued or implemented.
(a)    Notice of Issuance, Amendment, Renewal, 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 Representative shall
deliver by hand or facsimile (or transmit through Electronic System, if
arrangements for doing so have been approved by the Lender) to the Lender prior
to 9:00 am, Chicago time, at least three Business Days prior to 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 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 paragraph (c) of this
Section), 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. In addition, as a condition to any
such Letter of Credit issuance, the applicable Borrower shall have entered into
a continuing agreement (or other letter of credit agreement) for the issuance of
letters of credit and/or shall submit a letter of credit application, in each
case, as required by the Lender and using the Lender’s standard form (each, a
“Letter of Credit Agreement”). A Letter of Credit shall be issued, amended,
renewed or extended only if (and upon issuance, amendment, renewal or extension
of each Letter of Credit the Borrowers shall be deemed to represent and warrant
that), after giving effect to such issuance, amendment, renewal or extension (i)
the LC Exposure shall not exceed the LC Exposure Amount, and (ii) the Revolving
Exposure shall not exceed the lesser of (x) the Revolving Commitment, minus the
Availability Block, if applicable, and (y) the Borrowing Base.
(b)    Expiration Date. Each Letter of Credit shall expire (or be subject to
termination or non-renewal by notice from the Lender to the beneficiary thereof)
at or prior to the close of business on the earlier of (i) the date one year
after the date of the issuance of such Letter of Credit (or, in the case of any
renewal or extension thereof, including, without limitation, any automatic
renewal provision, one year after such renewal or extension) and (ii) the date
that is five Business Days prior to the Maturity Date.

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(c)    Reimbursement. If the Lender shall make any LC Disbursement in respect of
a Letter of Credit, the Borrowers shall reimburse such LC Disbursement by paying
to the Lender an amount equal to such LC Disbursement on the date that such LC
Disbursement is made; provided that the Borrowers may, subject to the conditions
to borrowing set forth herein, request in accordance with Section 2.03 or 2.04
that such payment be financed with a CBFR Revolving Borrowing in an equivalent
amount and, to the extent so financed, the Borrowers’ obligation to make such
payment shall be discharged and replaced by the resulting CBFR Revolving
Borrowing.
(d)    Obligations Absolute. The Borrowers’ joint and several obligation to
reimburse LC Disbursements as provided in paragraph (d) of this Section 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, Letter of Credit Agreement or this Agreement, or any term or
provision herein or 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) any
payment by the Lender 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 Borrowers’ obligations hereunder. Neither the Lender nor any of its
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 the
Lender; provided that the foregoing shall not be construed to excuse the Lender
from liability to the Borrowers to the extent of any direct damages (as opposed
to special, indirect, consequential or punitive damages, claims in respect of
which are hereby waived by the Borrowers to the extent permitted by applicable
law) suffered by any Borrower that are caused by the Lender's failure to
exercise care when determining whether drafts and other documents presented
under a Letter of Credit comply with the terms thereof. The parties hereto
expressly agree that, in the absence of gross negligence or willful misconduct
on the part of the Lender (as finally determined by a court of competent
jurisdiction), the Lender shall be deemed to have exercised care in each such
determination. In furtherance of the foregoing and without limiting the
generality thereof, 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 Lender may, in its sole discretion, either accept and make
payment upon such documents without responsibility for further investigation,
regardless of any notice or information to the contrary, or refuse to accept and
make payment upon such documents if such documents are not in strict compliance
with the terms of such Letter of Credit.
(e)    Disbursement Procedures. The Lender shall, promptly following its receipt
thereof, examine all documents purporting to represent a demand for payment
under a Letter of Credit. The Lender shall promptly notify the Borrower
Representative by telephone (confirmed by fax or through Electronic Systems) of
such demand for payment and whether the Lender has made or will make an LC
Disbursement thereunder; provided that any failure to give or delay in giving
such notice shall not relieve any Borrower of its obligation to reimburse the
Lender with respect to any such LC Disbursement.
(f)    Interim Interest. If the Lender shall make any LC Disbursement, then,
unless the Borrowers shall reimburse such LC Disbursement in full on the date
such LC Disbursement is made, the unpaid amount thereof shall bear interest, for
each day from and including the date such LC Disbursement is made to but
excluding the date that the Borrowers reimburse such LC Disbursement, at the
rate per annum then applicable to CBFR Revolving Loans and such interest shall
be due and payable on the date when such reimbursement is payable; provided
that, if the Borrowers fail to reimburse such LC Disbursement when due pursuant
to paragraph (d) of this Section, then Section 2.12(d) shall apply.
(g)    Cash Collateralization. If any Event of Default shall occur and be
continuing, on the Business Day that the Borrower Representative receives notice
from the Lender demanding the deposit of cash collateral

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pursuant to this paragraph, the Borrowers shall deposit in an account with the
Lender, in the name and for the benefit of the Lender (the “LC Collateral
Account”), an amount in cash equal to 105% of the amount of the LC Exposure as
of such date plus any accrued and unpaid interest thereon; provided that the
obligation to deposit such cash collateral shall become effective immediately,
and such deposit shall become immediately due and payable, without demand or
other notice of any kind, upon the occurrence of any Event of Default with
respect to any Borrower described in clause (h) or (i) of Article VII. The
Borrowers also shall deposit cash collateral in accordance with this paragraph
as and to the extent required by Section 2.10(b). Each such deposit shall be
held by the Lender as collateral for the payment and performance of the Secured
Obligations. The Lender shall have exclusive dominion and control, including the
exclusive right of withdrawal, over the LC Collateral Account and each Borrower
hereby grants the Lender a security interest in the LC Collateral Account and
all money or other assets on deposit therein or credited thereto. Other than any
interest earned on the investment of such deposits, which investments shall be
made at the option and sole discretion of the Lender and at the Borrowers’ risk
and expense, such deposits shall not bear interest. Interest or profits, if any,
on such investments shall accumulate in the LC Collateral Account. Moneys in the
LC Collateral Account shall be applied by the Lender for LC Disbursements for
which it has not been reimbursed and, to the extent not so applied, shall be
held for the satisfaction of the reimbursement obligations of the Borrowers for
the LC Exposure at such time or, if the maturity of the Loans has been
accelerated, be applied to satisfy other Secured Obligations. If the Borrowers
are required to provide an amount of cash collateral hereunder as a result of
the occurrence of an Event of Default, such amount (to the extent not applied as
aforesaid) shall be returned to the Borrowers within three (3) Business Days
after all such Events of Default have been cured or waived as confirmed in
writing by the Lender.
(h)    LC Exposure Determination. For all purposes of this Agreement, the amount
of a Letter of Credit that, by its terms or the terms of any document related
thereto, provides for one or more automatic increases in the stated amount
thereof shall be deemed to be the maximum stated amount of such Letter of Credit
after giving effect to all such increases, whether or not such maximum stated
amount is in effect at the time of determination.
(i)    Letters of Credit Issued for Account of Subsidiaries. Notwithstanding
that a Letter of Credit issued or outstanding hereunder supports any obligations
of, or is for the account of, a Subsidiary, or states that a Subsidiary is the
“account party,” “applicant,” “customer,” “instructing party,” or the like of or
for such Letter of Credit, and without derogating from any rights of the Lender
(whether arising by contract, at law, in equity or otherwise) against such
Subsidiary in respect of such Letter of Credit, the Borrowers (i) shall
reimburse, indemnify and compensate the Lender hereunder for such Letter of
Credit (including to reimburse any and all drawings thereunder) as if such
Letter of Credit had been issued solely for the account of the Borrower and (ii)
irrevocably waives any and all defenses that might otherwise be available to it
as a guarantor or surety of any or all of the obligations of such Subsidiary in
respect of such Letter of Credit. Each Borrower hereby acknowledges that the
issuance of such Letters of Credit for its Subsidiaries inures to the benefit of
such Borrower, and that such Borrower’s business derives substantial benefits
from the businesses of such Subsidiaries.

SECTION 2.06.    Funding of Borrowings. The Lender shall make each Loan to be
made by it hereunder on the proposed date thereof available to the Borrowers by
promptly crediting the amounts in immediately available funds to the Funding
Account(s); provided that CBFR Revolving Loans made to finance the reimbursement
of an LC Disbursement as provided in Section 2.05(d), deemed requests for
Borrowings under Section 2.17(c), and Protective Advances shall be retained by
the Lender.

SECTION 2.07.    Interest Elections. (%3) Each Borrowing initially shall be of
the 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 Representative may elect to convert
such Borrowing to a different Type or to continue such Borrowing and, in the
case of a Eurodollar Borrowing, may elect Interest Periods therefor, all as
provided in this Section. The Borrower Representative may elect different
options with respect to different portions of the affected Borrowing, and the
Loans comprising each such portion shall be considered a separate Borrowing.
This Section shall not apply to Protective Advances, which may not be converted
or continued.

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(a)    To make an election pursuant to this Section, the Borrower Representative
shall notify the Lender of such election either in writing (delivered by hand or
fax) by delivering an Interest Election Request signed by a Responsible Officer
of the Borrower Representative or through Electronic System if arrangements for
doing so have been approved by the Lender (or if an Extenuating Circumstance
shall exist, by telephone) by the time that a Borrowing Request would be
required under Section 2.03 if the Borrowers were requesting a Borrowing of the
Type resulting from such election to be made on the effective date of such
election. Each such Interest Election Request shall be irrevocable and each such
telephonic Interest Election Request, if permitted, shall be confirmed
immediately upon cessation of the Extenuating Circumstance by hand delivery,
Electronic System or facsimile to the Lender of a written Interest Election
Request in a form approved by the Lender and signed by a Responsible Officer of
the Borrower Representative.
(b)    Each written (or if permitted, telephonic) Interest Election Request
(including requests submitted through Electronic System) shall specify the
following information in compliance with Section 2.02:
(i)    the name of the applicable Borrower and the Borrowing to which such
Interest Election Request 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 Request, which shall be a Business Day;
(iii)    whether the resulting Borrowing is to be a CBFR Borrowing or a
Eurodollar Borrowing; and
(iv)    if the resulting Borrowing is 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 the term “Interest Period”.
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrowers shall be deemed to have
selected an Interest Period of one month's duration.

(c)    If the Borrower Representative fails to deliver a timely Interest
Election Request with respect to a Eurodollar Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be
converted to a CBFR Borrowing. Notwithstanding any contrary provision hereof, if
an Event of Default has occurred and is continuing and the Lender so notifies
the Borrower Representative, then, so long as such Event of Default is
continuing (i) no outstanding Borrowing may be converted to or continued as a
Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be
converted to an CBFR Borrowing at the end of the Interest Period applicable
thereto.

SECTION 2.08.    Termination of Commitment. (%3) Unless previously terminated,
the Revolving Commitment shall terminate on the Maturity Date.
(a)    The Borrowers may at any time terminate the Revolving Commitment upon the
Payment in Full of the Secured Obligations.
(b)    The Borrower Representative shall notify the Lender of any election to
terminate the Revolving Commitment under paragraph (b) of this Section at least
five Business Days prior to the effective date of such termination, specifying
such election and the effective date thereof. Each notice delivered by the
Borrower Representative pursuant to this Section shall be irrevocable; provided
that a notice of termination of the Revolving Commitment delivered by the
Borrower Representative may state that such notice is conditioned upon the
effectiveness of other credit facilities, in which case such notice may be
revoked by the Borrower Representative

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(by notice to the Lender on or prior to the specified effective date) if such
condition is not satisfied. Any termination of the Revolving Commitment shall be
permanent.

SECTION 2.09.    Repayment and Amortization of Loans; Collection and Application
of Collateral Proceeds; Evidence of Debt.
(a)    Each Borrower hereby unconditionally, jointly and severally, promises to
pay to the Lender (i) the then unpaid principal amount of each Revolving Loan on
the Maturity Date, and (ii) the then unpaid amount of each Protective Advance on
the earlier of the Maturity Date and demand by the Lender.
(b)    All funds deposited into any Lock Box subject to a Lock Box Agreement or
into a Collateral Deposit Account will be swept on a daily basis into a
collection account maintained by the Borrowers with the Lender (the “Collection
Account”). The Lender shall hold and apply funds received into the Collection
Account as provided herein below.
(c)    All amounts deposited in the Collection Account shall be deemed received
by the Lender in accordance with Section 2.17. On each Business Day, the Lender
shall apply all immediately available funds credited to the Collection Account,
(i) if no Cash Dominion Period is in effect, by depositing such funds into the
Borrowers’ Funding Account, or (ii) during any Cash Dominion Period, first to
prepay any Protective Advances that may be outstanding, and second to prepay the
Revolving Loans and to cash collateralize outstanding LC Exposure.
(d)    The Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the Indebtedness of the Borrowers to the Lender
resulting from each Loan made by the Lender, in which the Lender shall record
(i) the amount of each Loan made hereunder, the Class and Type thereof and the
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrowers to the Lender
hereunder and (iii) the amount of any sum received by the Lender hereunder. The
entries made in such accounts shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure of the
Lender to maintain such accounts or any error therein shall not in any manner
affect the obligation of the Borrowers to repay the Loans and other Obligations
in accordance with the terms of this Agreement.
(e)    The Lender may request that Loans made by it be evidenced by a promissory
note. In such event, the Borrowers shall execute and deliver to the Lender a
promissory note payable to the Lender (or, if requested by the Lender, to the
Lender and its registered assigns) and in a form prepared by the Lender.
Thereafter, the Loans evidenced by such promissory note and interest thereon
shall at all times (including after assignment pursuant to Section 8.04) be
represented by one or more promissory notes in such form.

SECTION 2.10.    Prepayment of Loans. (%3) The Borrowers shall have the right at
any time and from time to time to prepay any Loan in whole or in part, subject
to prior notice in accordance with paragraph (e) of this Section and, if
applicable, payment of any break funding expenses under Section 2.15.
(a)    In the event and on such occasion that the Revolving Exposure exceeds the
lesser of (A) the Revolving Commitment, minus the Availability Block, if
applicable, and (B) the Borrowing Base, the Borrowers shall prepay the Revolving
Loans and LC Exposure or cash collateralize LC Exposure in accordance with
Section 2.05(h), as applicable in an aggregate amount equal to such excess.
(b)    In the event and on each occasion that any Net Proceeds are received by
or on behalf of any Loan Party in respect of any Prepayment Event, the Borrowers
shall, immediately after such Net Proceeds are received by any Loan Party,
prepay the Obligations and cash collateralize LC Exposure as set forth in
Section 2.10(d) below in an aggregate amount equal to (x) in the case of a
prepayment event described in clause (c) of the definition of the term
“Prepayment Event”, 50% of such Net Proceeds and (y) in the case of all other
Prepayment Events, 100% of such Net Proceeds, provided that, in the case of any
event described in clause (a) or (b) of the definition

8

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of the term “Prepayment Event”, if the Borrower Representative shall deliver to
the Lender a certificate of a Financial Officer to the effect that the Loan
Parties intend to apply the Net Proceeds from such event (or a portion thereof
specified in such certificate), within 180 days after receipt of such Net
Proceeds, to acquire (or replace or rebuild) real property, equipment or other
tangible assets (excluding inventory) to be used in the business of the Loan
Parties, and certifying that no Default or Event of Default has occurred and is
continuing, then either (i) so long as a Cash Dominion Period is not in effect,
no prepayment shall be required pursuant to this paragraph in respect of the Net
Proceeds specified in such certificate or (ii) if a Cash Dominion Period is in
effect, then, if the Net Proceeds specified in such certificate are to be
applied to acquire, replace or rebuild such assets by (A) the Borrowers, then
such Net Proceeds shall be applied by the Lender to reduce the outstanding
principal balance of the Revolving Loans (without a permanent reduction of the
Revolving Commitment) and upon such application, the Lender shall establish a
Reserve against the Borrowing Base in an amount equal to the amount of such
proceeds so applied and (B) any Loan Party that is not a Borrower, such Net
Proceeds shall be deposited in a cash collateral account, and in the case of
either (A) or (B), thereafter, such funds shall be made available to the
applicable Loan Party as follows:
(1)    The Borrower Representative shall request a Revolving Borrowing
(specifying that the request is to use Net Proceeds pursuant to this Section) or
the applicable Loan Party shall request a release from the cash collateral
account be made in the amount needed;
(2)    so long as the conditions set forth in Section 4.02 have been met, the
Lender shall make such Revolving Borrowing or the Lender shall release funds
from the cash collateral account; and
(3)    in the case of Net Proceeds applied against the Revolving Borrowing, the
Reserve established with respect to such Net Proceeds shall be reduced by the
amount of such Revolving Loan;
provided that to the extent of any such Net Proceeds therefrom that have not
been so applied by the end of such 180‑day period, a prepayment shall be
required at such time in an amount equal to such Net Proceeds that have not been
so applied.
(c)    Subject to the prepayment provisions set forth in any Rider with respect
to Loans (other than Revolving Loans) made pursuant to such Rider, all such
amounts pursuant to Section 2.10(c), shall be applied, first to prepay any
Protective Advances that may be outstanding, and second to prepay the Revolving
Loans without a corresponding reduction in the Revolving Commitment and to cash
collateralize outstanding LC Exposure.
(d)    The Borrower Representative shall notify the Lender by telephone
(confirmed by fax) or through Electronic System, if arrangements for doing so
have been approved by the Lender, of any prepayment hereunder not later than
10:00 a.m., Chicago time, (A) in the case of prepayment of a Eurodollar
Borrowing three Business Days before the date of prepayment, and (B) in the case
of prepayment of a CBFR Borrowing on the date of prepayment. Each such notice
shall be irrevocable and shall specify the prepayment date and the principal
amount of each Borrowing or portion thereof to be prepaid; provided that, if a
notice of prepayment is given in connection with a conditional notice of
termination of the Revolving Commitment as contemplated by Section 2.08, then
such notice of prepayment may be revoked if such notice of termination is
revoked in accordance with Section 2.08. Each partial prepayment of any
Borrowing shall be in an amount that would be permitted in the case of an
advance of a Borrowing of the same Type as provided in Section 2.02. Prepayments
shall be accompanied by (i) accrued interest to the extent required by Section
2.12 and (ii) break funding payments pursuant to Section 2.15.

SECTION 2.11.    Fees. (%3) The Borrowers agree to pay to the Lender a
commitment fee, which shall accrue at the Applicable Margin on the average daily
amount of the Available Revolving Commitment during the period from and
including the Effective Date to but excluding the date on which the Revolving
Commitment terminates. Accrued commitment fees shall be payable in arrears on
the first Business Day of each calendar month and on the date on which the
Revolving Commitment terminates, commencing on the first such date to occur
after the date hereof. All commitment fees shall be computed on the basis of a
year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).

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(a)    The Borrowers agree to pay (i) to the Lender a letter of credit fee with
respect to Letters of Credit, which shall accrue at the same Applicable Margin
used to determine the interest rate applicable to Eurodollar Revolving Loans on
the average daily amount of the LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the Effective Date to but excluding the later of the date on which the
Revolving Commitment terminates and the date on which the Lender ceases to have
any LC Exposure, and (ii) the Lender’s standard fees and commissions with
respect to the issuance, amendment, cancellation, negotiation, transfer,
presentment, renewal or extension of any Letter of Credit or processing of
drawings thereunder. Accrued letter of credit fees shall be payable in arrears
on the first Business Day of each calendar month and on the date on which the
Revolving Commitment terminates; provided that any such fees accruing after the
date on which the Revolving Commitment terminates shall be payable on demand.
Any other fees payable to the Lender pursuant to this paragraph shall be payable
within 10 days after written demand by the Lender. All letter of credit fees
shall be computed on the basis of a year of 360 days and shall be payable for
the actual number of days elapsed (including the first day but excluding the
last day).
(b)    The Borrowers agree to pay to the Lender, the Annual Administration Fee,
annually in advance beginning on the Effective Date and on each anniversary
thereof during the term of the Revolving Commitment. The Annual Administration
Fee shall be deemed fully earned by the Lender on the Effective Date, in the
case of the first year, and on each anniversary thereof, in the case of each
year thereafter, and shall be due and payable in full on each such date.
(c)    The Borrowers agree to pay to the Lender the Closing Fee. The entire
Closing Fee shall be deemed fully earned by the Lender and shall be due and
payable in full on the Effective Date.
(d)    The Borrowers agree to pay to the Lender, during any Cash Dominion
Period, a fee equal to the additional interest that the Borrowers would have
paid in respect of the Revolving Loans, at the CBFR plus the Applicable Margin,
as if each uncollected check had not been received in the Collection Account and
credited to the Borrowers until the earlier of (i) the date that such check is
actually collected and (ii) three Business Days after the Business Day that such
check was actually received in the Collection Account. Such fee will be payable
monthly in arrears on the first Business Day of each calendar month and on the
date on which the Revolving Commitment terminates; provided that any such fees
accruing after the date on which the Revolving Commitment terminates shall be
payable on demand.
(e)    All fees payable hereunder shall be paid on the dates due, in immediately
available funds, to the Lender. Fees paid shall not be refundable under any
circumstances.

SECTION 2.12.    Interest. (%3) The Loans comprising CBFR Borrowings shall bear
interest at the CBFR plus the Applicable Margin applicable from time to time to
the Class of Loan set forth in the definition of Applicable Margin.
(a)    The Loans comprising each Eurodollar Borrowing shall bear interest at the
Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the
Applicable Margin applicable from time to time to the Class of Loan set forth in
the definition of Applicable Margin.
(b)    Each Protective Advance shall bear interest at the CBFR plus the
Applicable Margin applicable from time to time to in effect for Revolving Loans
as set forth in the definition of Applicable Margin plus 2%.
(c)    Notwithstanding the foregoing, during the occurrence and continuance of
an Event of Default, the Lender may, at its option, by notice to the Borrower
Representative, declare that (i) all Loans shall bear interest at 2% plus the
rate otherwise applicable to such Loans as provided in the preceding paragraphs
of this Section or (ii) in the case of any other amount outstanding hereunder,
such amount shall accrue at 2% plus the rate applicable to such fee or other
obligation as provided hereunder or if no rate is specified herein as applicable
hereunder at 2%

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plus the CBFR plus the Applicable Margin from time to time in effect for
Revolving Loans as set forth in the definition of Applicable Margin.
(d)    Accrued interest on each Loan (for CBFR Loans, accrued through the last
day of the prior calendar month) shall be payable in arrears on each Interest
Payment Date for such Loan and upon termination of the Commitment applicable to
such Loan; provided that (i) interest accrued pursuant to paragraphs (c) and (d)
of this Section shall be payable on demand, (ii) in the event of any repayment
or prepayment of any Loan (other than a prepayment of a CBFR Revolving Loan
prior to the end of the Availability Period), accrued interest on the principal
amount repaid or prepaid shall be payable on the date of such repayment or
prepayment and (iii) in the event of any conversion of any Eurodollar Loan prior
to the end of the current Interest Period therefor, accrued interest on such
Loan shall be payable on the effective date of such conversion.
(e)    All interest hereunder shall be computed on the basis of a year of 360
days, except that interest computed by reference to the CB Floating Rate shall
be computed on the basis of a year of 365 days (or 366 days in a leap year), and
in each case shall be payable for the actual number of days elapsed (including
the first day but excluding the last day). The applicable CB Floating Rate,
Adjusted LIBO Rate, REVLIBOR30 Rate, or LIBO Rate shall be determined by the
Lender in accordance with the definitions thereof, and such determination shall
be conclusive absent manifest error.

SECTION 2.13.    Alternate Rate of Interest; Illegality.
(a)    If prior to the commencement of any Interest Period for a Eurodollar
Borrowing:
(1)    the Lender determines (which determination shall be conclusive and
binding absent manifest error) that adequate and reasonable means do not exist
for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable for a
Loan (including, without limitation, by means of an Interpolated Rate or because
the LIBO Screen Rate is not available or published on a current basis) for such
Interest Period; or
(2)    the Lender determines the Adjusted LIBO Rate or the LIBO Rate, as
applicable, for a Loan for such Interest Period will not adequately and fairly
reflect the cost to the Lender of making or maintaining its Loans included in
such Borrowing for such Interest Period;
then the Lender shall give notice thereof to the Borrower Representative through
Electronic System as provided in Section 8.01 as promptly as practicable
thereafter and, until the Lender notifies the Borrower Representative that the
circumstances giving rise to such notice no longer exist, (A) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and any such Eurodollar Borrowing shall be repaid or converted to a CBFR
Borrowing on the last day of the then current Interest Period applicable
thereto, and (B) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as a CBFR Borrowing.

(b)    If the Lender determines that any Requirement of Law has made it
unlawful, or if any Governmental Authority has asserted that it is unlawful, for
the Lender or its applicable lending office to make, maintain, fund or continue
any Eurodollar Borrowing, or any Governmental Authority has imposed material
restrictions on the authority of the Lender to purchase or sell, or to take
deposits of, dollars in the London interbank market, then, on notice thereof by
the Lender to the Borrower Representative, any obligations of the Lender to
make, maintain, fund or continue Eurodollar Loans or to convert CBFR Borrowings
to Eurodollar Borrowings will be suspended until the Lender notifies the
Borrower that the circumstances giving rise to such determination no longer
exist. Upon receipt of such notice, the Borrowers will upon demand from the
Lender, either convert or prepay all Eurodollar Borrowings to CBFR Borrowings,
either on the last day of the Interest Period therefor, if the Lender may
lawfully continue to maintain such Eurodollar Borrowings to such day, or
immediately, if the Lender may not lawfully continue to maintain such Loans.
Upon any such conversion or prepayment, the Borrower will also pay accrued
interest on the amount so converted or prepaid.

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SECTION 2.14.    Increased Costs. (%3) If any Change in Law shall:
(i)    impose, modify or deem applicable any reserve, special deposit, liquidity
or similar requirement (including any compulsory loan requirement, insurance
charge or other assessment) against assets of, deposits with or for the account
of, or credit extended by, the Lender (except any such reserve requirement
reflected in the Adjusted LIBO Rate);
(ii)    impose on the Lender or the London interbank market any other condition,
cost or expense (other than Taxes) affecting this Agreement or Loans hereunder
or any Letter of Credit; or
(iii)    subject the Lender to any Taxes (other than (A) Indemnified Taxes, (B)
Taxes described in clause (b) of the definition of Excluded Taxes and (C)
Connection Income Taxes) on its loans, loan principal, letters of credit,
commitments, or other obligations, or its deposits, reserves, other liabilities
or capital attributable thereto;
and the result of any of the foregoing shall be to increase the cost to the
Lender of making, continuing, converting into or maintaining any Loan (or of
maintaining its obligation to make any such Loan) or to increase the cost to the
Lender of issuing or maintaining any Letter of Credit or to reduce the amount of
any sum received or receivable by the Lender hereunder (whether of principal,
interest or otherwise), then the Borrowers will pay to the Lender such
additional amount or amounts as will compensate the Lender for such additional
costs incurred or reduction suffered.

(b)    If the Lender determines that any Change in Law regarding capital or
liquidity requirements has or would have the effect of reducing the rate of
return on the Lender’s capital or on the capital of the Lender’s holding
company, if any, as a consequence of this Agreement or the Loans made by, the
Commitments of or the Letters of Credit issued by the Lender to a level below
that which the Lender or the Lender’s holding company could have achieved but
for such Change in Law (taking into consideration the Lender’s policies and the
policies of the Lender’s holding company with respect to capital adequacy and
liquidity), then from time to time the Borrowers will pay to the Lender such
additional amount or amounts as will compensate the Lender or the Lender’s
holding company for any such reduction suffered.
(c)    A certificate of the Lender setting forth the amount or amounts necessary
to compensate the Lender or its holding company, as the case may be, as
specified in paragraph (a) or (b) of this Section shall be delivered to the
Borrower Representative and shall be conclusive absent manifest error. The
Borrowers shall pay the Lender the amount shown as due on any such certificate
within 10 days after receipt thereof.
(d)    Failure or delay on the part of the Lender to demand compensation
pursuant to this Section shall not constitute a waiver of the Lender’s right to
demand such compensation; provided that the Borrowers shall not be required to
compensate the Lender pursuant to this Section for any increased costs or
reductions incurred more than 270 days prior to the date that the Lender
notifies the Borrower Representative of the Change in Law giving rise to such
increased costs or reductions and of the Lender’s intention to claim
compensation therefor; provided further that, if the Change in Law giving rise
to such increased costs or reductions is retroactive, then the 270-day period
referred to above shall be extended to include the period of retroactive effect
thereof.

SECTION 2.15.    Break Funding Payments. In the event of (a) the payment of any
principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default or as a
result of any prepayment pursuant to Section 2.10 or any Rider), (b) the
conversion of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto or (c) the failure to borrow, convert, continue or
prepay any Eurodollar Loan on the date specified in any notice delivered
pursuant hereto (regardless of whether such notice may be revoked under Section
2.08(c) and is revoked in accordance therewith), then, in any such event, the
Borrowers shall compensate the Lender for the loss, cost and expense
attributable to such event. In the case of a Eurodollar Loan, such loss, cost or
expense to the Lender shall be deemed to include an amount determined by the
Lender to be the excess, if any, of (i) the amount of interest which would have
accrued on the principal amount

12

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of such Loan had such event not occurred, at the Adjusted LIBO Rate that would
have been applicable to such Eurodollar Loan, for the period from the date of
such event to the last day of the then current Interest Period therefor (or, in
the case of a failure to borrow, convert or continue, for the period that would
have been the Interest Period for such Eurodollar Loan), over (ii) the amount of
interest which would accrue on such principal amount for such period at the
interest rate which the Lender would bid were it to bid, at the commencement of
such period, for dollar deposits of a comparable amount and period from other
banks in the eurodollar market. A certificate of the Lender setting forth any
amount or amounts that the Lender is entitled to receive pursuant to this
Section shall be delivered to the Borrower Representative and shall be
conclusive absent manifest error. The Borrowers shall pay the Lender the amount
shown as due on any such certificate within 10 days after receipt thereof.

SECTION 2.16.    Taxes. (%3) Withholding of Taxes; Gross Up. Any and all
payments by or on account of any obligation of any Loan Party under any Loan
Document shall be made without deduction or withholding for any Taxes, except as
required by applicable law. If any applicable law (as determined in the good
faith discretion of an applicable withholding agent) requires the deduction or
withholding of any Tax from any such payment by a withholding agent, then the
applicable withholding agent shall be entitled to make such deduction or
withholding and shall timely pay the full amount deducted or withheld to the
relevant Governmental Authority in accordance with applicable law and, if such
Tax is an Indemnified Tax, then the sum payable by the applicable Loan Party
shall be increased as necessary so that after such deduction or withholding has
been made (including such deductions and withholdings applicable to additional
sums payable under this Section 2.16) the Lender receives an amount equal to the
sum it would have received had no such deduction or withholding been made.
(a)    Payment of Other Taxes by the Loan Parties. The Loan Parties shall timely
pay to the relevant Governmental Authority in accordance with applicable law, or
at the option of the Lender timely reimburse it for, Other Taxes.
(b)    Evidence of Payment. As soon as practicable after any payment of Taxes by
any Loan Party to a Governmental Authority pursuant to this Section 2.16, such
Loan Party shall deliver to the Lender 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 Lender.
(c)    Indemnification by the Loan Parties. To the extent not paid, reimbursed,
or compensated pursuant to Section 2.16(a) or (b), the Loan Parties shall
jointly and severally indemnify the Lender, within 10 days after demand
therefor, for the full amount of any Indemnified Taxes (including Indemnified
Taxes imposed or asserted on or attributable to amounts payable under this
Section) payable or paid by the Lender or required to be withheld or deducted
from a payment to the Lender and any reasonable expenses arising therefrom or
with respect thereto, whether or not such Indemnified Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability delivered to any Loan
Party by the Lender shall be conclusive absent manifest error.
(d)    Treatment of Certain Refunds. If the Lender determines, in its sole
discretion, exercised in good faith, that it has received a refund of any Taxes
as to which it has been indemnified pursuant to this Section 2.16 (including by
the payment of additional amounts pursuant to this Section), it shall pay to the
indemnifying party an amount equal to such refund (but only to the extent of
indemnity payments made under this Section 2.16 with respect to the Taxes giving
rise to such refund), net of all out-of-pocket expenses (including Taxes) of the
Lender and without interest (other than any interest paid by the relevant
Governmental Authority with respect to such refund). Such indemnifying party,
upon the request of the Lender, shall repay to the Lender the amount paid over
pursuant to this Section 2.16(e) (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) in the event that the Lender is
required to repay such refund to such Governmental Authority. Notwithstanding
anything to the contrary in this Section 2.16(e), in no event will the Lender be
required to pay any amount to an indemnifying party pursuant to this Section
2.16(e) the payment of which would place the Lender in a less favorable net
after-Tax position than the Lender would have been in if the Tax subject to
indemnification and giving rise to such refund had not been deducted, withheld
or otherwise imposed and the indemnification payments or additional amounts
giving rise to such refund had never been paid. This Section 2.16(e) shall not
be construed to require the Lender to make

13

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available its Tax returns (or any other information relating to its Taxes that
it deems confidential) to the indemnifying party or any other Person.
(e)    Survival. Each party’s obligations under this Section shall survive the
termination of the Commitments and the repayment, satisfaction or discharge of
all obligations under any Loan Document (including the Payment in Full of the
Secured Obligations).
(f)    Defined Terms. For purposes of this Section 2.16, the term “applicable
law” includes FATCA.

SECTION 2.17.    Payments Generally; Allocation of Proceeds. (%3) The Borrowers
shall make each payment required to be made by them hereunder (whether of
principal, interest, fees or reimbursement of LC Disbursements, or of amounts
payable under Section 2.14, 2.15 or 2.16, or otherwise) prior to 2:00 p.m.,
Chicago time, on the date when due, in immediately available funds, without
setoff, recoupment or counterclaim. Any amounts received after such time on any
date may, in the discretion of the Lender, 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 Lender at its offices at 10 South
Dearborn Street, Floor L2, Chicago, Illinois. Unless otherwise provided for
herein, if any payment hereunder shall be due on a day that is not a Business
Day, the date for payment shall be extended to the next succeeding Business Day,
and, in the case of any payment accruing interest, interest thereon shall be
payable for the period of such extension. All payments hereunder shall be made
in dollars.
(a)    Any payments received by the Lender (including from proceeds of
Collateral) (i) not constituting either (A) a specific payment of principal,
interest, fees or other sums payable under the Loan Documents (which shall be
applied as specified by the Borrower Representative), (B) a mandatory prepayment
(which shall be applied in accordance with Section 2.10 or any applicable
Rider), or (C) amounts to be applied from the Collection Account during a Cash
Dominion Period (which shall be applied in accordance with Section 2.09(c)),
shall be applied by the Lender to the payment of the Secured Obligations in such
order as the Lender may elect in its sole discretion. Notwithstanding the
foregoing, amounts received from any Loan Party shall not be applied to any
Excluded Swap Obligation of such Loan Party. Notwithstanding anything to the
contrary contained in this Agreement, unless so directed by the Borrower
Representative, or unless an Event of Default is in existence, the Lender shall
not apply any payment which it receives to any Eurodollar Loan of a Class,
except (a) on the expiration date of the Interest Period applicable thereto or
(b) in the event, and only to the extent, that there are no outstanding CBFR
Loans of the same Class and, in any such event, the Borrowers shall pay the
break funding payment required in accordance with Section 2.15. The Lender shall
have the continuing and exclusive right to apply and reverse and reapply any and
all such proceeds and payments to any portion of the Secured Obligations.
(b)    At the election of the Lender, all payments of principal, interest, LC
Disbursements, fees, premiums, reimbursable expenses (including, without
limitation, all reimbursement for fees, costs and expenses pursuant to Section
8.03), and other sums chargeable to or required to be paid by the Borrowers
under the Loan Documents, may be paid from the proceeds of Borrowings made
hereunder whether made following a request by the Borrower Representative
pursuant to Section 2.03 or a deemed request as provided in this Section or may
be deducted from any deposit account of any Borrower maintained with the Lender.
Each Borrower hereby irrevocably authorizes (i) the Lender, even if the
conditions precedent set forth in Section 4.02 have not been satisfied, to make
a Borrowing for the purpose of paying each payment of principal, interest and
fees as it becomes due hereunder or any other amount due under the Loan
Documents and agrees that all such amounts charged shall constitute Loans (but
such a Borrowing may only constitute a Protective Advance if it is to reimburse
costs, fees and expenses as described in Section 8.03) and that all such
Borrowings shall be deemed to have been requested pursuant to Sections 2.03 or
2.04, as applicable and (ii) the Lender to charge any deposit account of any
Borrower maintained with the Lender for each payment of principal, interest and
fees as it becomes due hereunder or any other amount due under the Loan
Documents.
(c)    The Lender may from time to time provide the Borrowers with account
statements or invoices with respect to any of the Secured Obligations (the
“Statements”). The Lender is under no duty or obligation to provide Statements,
which, if provided, will be solely for the Borrowers’ convenience. Statements
may contain

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estimates of the amounts owed during the relevant billing period, whether of
principal, interest, fees or other Secured Obligations. If the Borrowers pay the
full amount indicated on a Statement on or before the due date indicated on such
Statement, the Borrowers shall not be in default of payment with respect to the
billing period indicated on such Statement; provided, that acceptance by the
Lender of any payment that is less than the total amount actually due at that
time (including but not limited to any past due amounts) shall not constitute a
waiver of the Lender’s right to receive payment in full at another time.

SECTION 2.18.    Indemnity for Returned Payments. If after receipt of any
payment which is applied to the payment of all or any part of the Obligations
(including a payment effected through exercise of a right of setoff), the Lender
is for any reason compelled to surrender such payment or proceeds to any Person
because such payment or application of proceeds is invalidated, declared
fraudulent, set aside, determined to be void or voidable as a preference,
impermissible setoff, or a diversion of trust funds, or for any other reason
(including pursuant to any settlement entered into by the Lender in its
discretion), then the Obligations or part thereof intended to be satisfied shall
be revived and continued and this Agreement shall continue in full force as if
such payment or proceeds had not been received by the Lender. The provisions of
this Section 2.18 shall be and remain effective notwithstanding any contrary
action which may have been taken by the Lender in reliance upon such payment or
application of proceeds. The provisions of this Section 2.18 shall survive the
termination of this Agreement.

ARTICLE III    
Representations and Warranties
Each Loan Party represents and warrants to the Lender that:

SECTION 3.01.    Organization; Powers. Each Loan Party and each Subsidiary is
duly organized, or formed, validly existing and 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 is qualified to do business in,
and is in good standing in, every jurisdiction where the nature of its business
or property in any such jurisdiction makes such qualification necessary.

SECTION 3.02.    Authorization; Enforceability. The Transactions are within each
Loan Party’s corporate or other organizational powers and have been duly
authorized by all necessary corporate or other organizational actions and, if
required, actions by equity holders. Each Loan Document to which each Loan Party
is a party has been duly executed and delivered by such Loan Party and
constitutes a legal, valid and binding obligation of such Loan Party,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or 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.

SECTION 3.03.    Governmental Approvals; No Conflicts. The Transactions (a) do
not require any consent or approval of, registration or filing with, or any
other action by, any Governmental Authority, except such as have been obtained
or made and are in full force and effect and except for filings necessary to
perfect Liens created pursuant to the Loan Documents, (b) will not violate any
Requirement of Law applicable to any Loan Party or any Subsidiary, (c) will not
violate or result in a default under any indenture, agreement or other
instrument binding upon any Loan Party or any Subsidiary or the assets of any
Loan Party or any Subsidiary, or give rise to a right thereunder to require any
payment to be made by any Loan Party or any Subsidiary, and (d) will not result
in the creation or imposition of, or the requirement to create, any Lien on any
asset of any Loan Party or any Subsidiary, except Liens created pursuant to the
Loan Documents.

SECTION 3.04.    Financial Condition; No Material Adverse Change. (%3) The
Company has heretofore furnished to the Lender its consolidated balance sheet
and statements of income, stockholders equity and cash flows (i) as of and for
the Reference Fiscal Year, reported on by the Borrowers’ Accountants, and (ii)
as of and for the Interim Fiscal Period certified by its Financial Officer. Such
financial statements present fairly, in all material respects, the financial
position and results of operations and cash flows of the Company and its
consolidated Subsidiaries as of such dates and for such periods in accordance
with GAAP, subject to year‑end audit adjustments

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(all of which, when taken as a whole, would not be materially adverse) and the
absence of footnotes in the case of the statements referred to in clause (ii)
above.
(a)    No event, change or condition has occurred that has had, or could
reasonably be expected to have, a Material Adverse Effect, since the last day of
the Reference Fiscal Year.

SECTION 3.05.    Properties. (%3) As of the date of this Agreement, Section 3.05
of the Disclosure Certificate sets forth the address of each parcel of real
property that is owned or leased by any Loan Party. Each of such leases and
subleases is valid and enforceable in accordance with its terms and is in full
force and effect, and no default by any party to any such lease or sublease
exists. Each of the Loan Parties and each of its Subsidiaries has good and
indefeasible title to, or valid leasehold interests in, all of its real and
personal property material to its business, free of all Liens other than those
permitted by Section 6.02.
(a)    Each Loan Party and each Subsidiary owns, or is licensed to use, all
trademarks, tradenames, copyrights, patents and other intellectual property
necessary to its business as currently conducted, a correct and complete list of
which, as of the date of this Agreement, is set forth in Section 3.05 of the
Disclosure Certificate, and the use thereof by each Loan Party and each
Subsidiary does not infringe in any material respect upon the rights of any
other Person, and each Loan Party’s and each Subsidiary’s rights thereto are not
subject to any licensing agreement or similar arrangement.

SECTION 3.06.    Litigation and Environmental Matters. (%3) There are no
actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of any Loan Party, threatened in
writing against or affecting any Loan Party or any Subsidiary (i) as to which
there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect or (ii) that involve any Loan
Document or the Transactions.
(a)    Except for the Disclosed Matters (i) no Loan Party nor any Subsidiary has
received notice of any claim with respect to any material Environmental
Liability or knows of any basis for any material Environmental Liability and
(ii) except with respect to any other matters that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect, no Loan Party or any Subsidiary (A) has failed to comply with any
Environmental Law applicable to it or to obtain, maintain or comply with any
permit, license or other approval required under any Environmental Law, (B) has
become subject to any applicable Environmental Liability, (C) has received
notice of any claim with respect to any Environmental Liability or (D) knows of
any basis for any Environmental Liability.
(b)    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; No Default. Except where
the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, each Loan Party and each
Subsidiary is in compliance with (i) all Requirement of Law applicable to it or
its property and (ii) all indentures, agreements and other instruments binding
upon it or its property. No Default has occurred and is continuing.

SECTION 3.08.    Investment Company Status. No Loan Party or any Subsidiary is
an investment company as defined in, or subject to regulation under, the
Investment Company Act of 1940.

SECTION 3.09.    Taxes. Each Loan Party and each Subsidiary has timely filed or
caused to be filed all Tax returns and reports required to have been filed and
has paid or caused to be paid all Taxes required to have been paid by it, except
(a) Taxes that are being contested in good faith by appropriate proceedings and
for which such Loan Party or such Subsidiary, as applicable, has set aside on
its books adequate reserves or (b) to the extent

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that the failure to do so could not be expected to result in a Material Adverse
Effect. No Liens have been filed and no claims are being asserted with respect
to any such Taxes.

SECTION 3.10.    ERISA. No ERISA Event has occurred or is reasonably expected to
occur that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect.

SECTION 3.11.    Disclosure. (a) The Loan Parties have disclosed to the Lender
all agreements, instruments and corporate or other restrictions to which any
Loan Party or any Subsidiary is subject, and all other matters known to it,
that, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect. None of the reports, financial statements,
certificates or other information furnished by or on behalf of any Loan Party or
any Subsidiary to the Lender in connection with this Agreement or any other Loan
Document (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 Loan Parties represent only that such
information was prepared in good faith based upon assumptions believed by the
Loan Parties to be reasonable at the time delivered and, if such projected
financial information was delivered prior to the Effective Date, as of the
Effective Date, it being understood that such projected financial information is
subject to uncertainties and contingencies, many of which are beyond the control
of the Loan Parties and their Subsidiaries, and no assurances can be given that
such projected financial information will be realized and that actual results
may differ in a material manner from such projected financial information.
(b)    As of the Effective Date, to the best knowledge of any Borrower, the
information included in the Beneficial Ownership Certification provided on or
prior to the Effective Date to any Lender in connection with this Agreement is
true and correct in all material respects.

SECTION 3.12.    Material Agreements. All Material Agreements to which any Loan
Party is a party or is bound as of the date of this Agreement are listed in
Section 3.12 of the Disclosure Certificate. No Loan Party is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in (i) any Material Agreement to which it is a party or
(ii) any agreement or instrument evidencing or governing Material Indebtedness.

SECTION 3.13.    Solvency. (%3) Immediately after the consummation of the
Transactions to occur on the Effective Date, (i) the fair value of the assets of
the Loan Parties, at a fair valuation, will exceed their debts and liabilities,
subordinated, contingent or otherwise, (ii) the present fair saleable value of
the property of the Loan Parties, will be greater than the amount that will be
required to pay the probable liability of their debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured; (iii) the Loan Parties will be able to pay their
debts and liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured, and (iv) the Loan Parties will not have
unreasonably small capital with which to conduct the business in which they is
engaged as such businesses are now conducted and is proposed to be conducted
after the Effective Date.
(a)    No Loan Party intends to, nor will permit any Subsidiary to, and no Loan
Party believes that it or any Subsidiary will, incur debts beyond its ability to
pay such debts as they mature, taking into account the timing of and amounts of
cash to be received by it or any such Subsidiary and the timing of the amounts
of cash to be payable on or in respect of its Indebtedness or the Indebtedness
of any such Subsidiary.

SECTION 3.14.    Insurance. Section 3.14 of the Disclosure Certificate sets
forth a description of all insurance maintained by or on behalf of the Loan
Parties and their Subsidiaries as of the Effective Date. As of the Effective
Date, all premiums in respect of such insurance have been paid in accordance
with the terms arranged by the insurance company. The Borrowers maintain, and
have caused each Subsidiary to maintain, with financially sound and reputable
insurance companies, insurance on all their real and personal property in such
amounts, subject to such deductibles and self-insurance retentions and covering
such properties and risks as are adequate and

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customarily maintained by companies engaged in the same or similar businesses
operating in the same or similar locations.

SECTION 3.15.    Capitalization and Subsidiaries. (a) Section 3.15 of the
Disclosure Certificate sets forth (i) a correct and complete list of the name
and relationship to the Borrowers of each Subsidiary, (ii) a true and complete
listing of each class of each of the Borrowers' authorized Equity Interests, all
of which issued Equity Interests are validly issued, outstanding, fully paid and
non-assessable, and owned beneficially and of record by the Persons identified
in Section 3.15 of the Disclosure Certificate, and (iii) the type of entity of
each Borrower and each Subsidiary. All of the issued and outstanding Equity
Interests owned by any Loan Party have been (to the extent such concepts are
relevant with respect to such ownership interests) duly authorized and issued
and are fully paid and non‑assessable. There are no outstanding commitments or
other obligations of any Loan Party to issue, and no options, warrants or other
rights of any Person to acquire, any shares of any class of capital stock or
other equity interests of any Loan Party.
(b) General Aluminum Forgings, LLC, an Ohio limited liability company, SIFCO
Custom Machining Company, a Minnesota corporation, and SIFCO Turbine Component
Services LLC, an Ohio limited liability company, do not, and will not, own any
assets at any time with a value in the aggregate in excess of $50,000, and each
will be dissolved within 30 days of the finalization of all open accounts and
claims that are currently pending in respect to each such Dormant Subsidiary.
(c) All assets of T & W are described Section 3.15 of the Disclosure
Certificate, and T & W does not, and will not, own any other assets at any time.

SECTION 3.16.    Security Interest in Collateral. The provisions of the
Collateral Documents when executed and delivered create legal and valid Liens on
all of the Collateral in favor of the Lender, for the benefit of the Secured
Parties, and such Liens constitute perfected and continuing Liens on the
Collateral, securing the Secured Obligations, enforceable against the applicable
Loan Party (except as enforceability may be limited by equitable principles or
by bankruptcy, insolvency, reorganization, moratorium or similar laws relating
to or limiting creditors’ rights generally), and having priority over all other
Liens on the Collateral except in the case of (a) Permitted Encumbrances, to the
extent any such Permitted Encumbrances would have priority over the Liens in
favor of the Lender pursuant to any applicable law or agreement and (b) Liens
perfected only by possession (including possession of any certificate of title)
or control to the extent the Lender has not obtained or does not maintain
possession or control of such Collateral.

SECTION 3.17.    Employment Matters. As of the Effective Date, there are no
strikes, lockouts or slowdowns against any Loan Party or any Subsidiary pending
or, to the knowledge of any Loan Party, threatened in writing. The hours worked
by and payments made to employees of the Loan Parties and their Domestic
Subsidiaries have not been in violation, in any material manner, of the Fair
Labor Standards Act or any other applicable federal, state, local or foreign law
dealing with such matters. All material payments due from any Loan Party or any
Subsidiary, or for which any claim may be made against any Loan Party or any
Subsidiary, 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
Loan Party or such Subsidiary (to the extent required by GAAP) in all material
respects.

SECTION 3.18.    Margin Regulations. No Loan Party is engaged and will not
engage, principally or as one of its important activities, in the business of
purchasing or carrying Margin Stock, or extending credit for the purpose of
purchasing or carrying Margin Stock, and no part of the proceeds of any
Borrowing or Letter of Credit extension hereunder will be used to buy or carry
any Margin Stock. Following the application of the proceeds of each Borrowing or
drawing under each Letter of Credit, not more than 25% of the value of the
assets (either of any Loan Party only or of the Loan Parties and their
Subsidiaries on a consolidated basis) will be Margin Stock.

SECTION 3.19.    Use of Proceeds. The proceeds of the Loans have been used and
will be used, whether directly or indirectly, as set forth in Section 5.08.

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SECTION 3.20.    No Burdensome Restrictions. No Loan Party is subject to any
Burdensome Restriction except Burdensome Restrictions permitted under Section
6.10.

SECTION 3.21.    Anti-Corruption Laws and Sanctions. Each Loan Party has
implemented and maintains in effect policies and procedures designed to ensure
compliance by such Loan Party, its Subsidiaries and their respective directors,
officers, employees and Authorized Agents with Anti-Corruption Laws and
applicable Sanctions, and such Loan Party, its Subsidiaries and their respective
directors, officers and employees and, to the knowledge of such Loan Party, its
Authorized Agents, are in compliance with Anti-Corruption Laws and applicable
Sanctions in all material respects and are not knowingly engaged in any activity
that would reasonably be expected to result in any Loan Party being designated
as a Sanctioned Person. None of (a) any Loan Party, any Subsidiary or any of
their respective directors, officers or, to the knowledge of any such Loan Party
or Subsidiary, employees, or (b) to the knowledge of any such Loan Party or
Subsidiary, any Authorized Agent of such Loan Party or any Subsidiary that will
act in any capacity in connection with or benefit from the credit facility
established hereby, is a Sanctioned Person. No Borrowing or Letter of Credit,
use of proceeds, Transaction or other transaction contemplated by this Agreement
or the other Loan Documents will violate Anti-Corruption Laws or applicable
Sanctions.

SECTION 3.22.    Affiliate Transactions. Except as set forth on Section 3.22 of
the Disclosure Certificate, as of the date of this Agreement, there are no
existing or proposed agreements, arrangements, understandings, or transactions
between any Loan Party and any of the officers, members, managers, directors,
stockholders, parents, holders of other Equity Interests, employees, or
Affiliates (other than Subsidiaries) of any Loan Party or any members of their
respective immediate families, and none of the foregoing Persons are directly or
indirectly indebted to or have any direct or indirect ownership, partnership, or
voting interest in any Affiliate of any Loan Party or any Person with which any
Loan Party has a business relationship or which competes with any Loan Party
(except that any such Persons may own Equity Interests in (but not exceeding
2.0% of the outstanding Equity Interests of) any publicly traded company that
may compete with a Loan Party).

SECTION 3.23.    Common Enterprise. The successful operation and condition of
each of the Loan Parties is dependent on the continued successful performance of
the functions of the group of the Loan Parties as a whole and the successful
operation of each of the Loan Parties is dependent on the successful performance
and operation of each other Loan Party. Each Loan Party expects to derive
benefit (and its board of directors or other governing body has determined that
it may reasonably be expected to derive benefit), directly and indirectly, from
(i) successful operations of each of the other Loan Parties and (ii) the credit
extended by the Lender to the Borrowers hereunder, both in their separate
capacities and as members of the group of companies. Each Loan Party has
determined that execution, delivery, and performance of this Agreement and any
other Loan Documents to be executed by such Loan Party is within its purpose, in
furtherance of its direct and/or indirect business interests, will be of direct
and indirect benefit to such Loan Party, and is in its best interest.

SECTION 3.24.    Plan Assets; Prohibited Transactions. No Loan Party or any of
its Domestic Subsidiaries is an entity deemed to hold “plan assets” (within the
meaning of the Plan Asset Regulations), and neither the execution, delivery or
performance of the transactions contemplated under this Agreement, including the
making of any Loan and the issuance of any Letter of Credit hereunder, will give
rise to a non-exempt prohibited transaction under Section 406 of ERISA or
Section 4975 of the Code.

ARTICLE IV    
Conditions

SECTION 4.01.    Effective Date. The obligations of the Lender to make Loans and
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 8.02):
(a)    Credit Agreement and Loan Documents. The Lender (or its counsel) shall
have received (i) a counterpart of this Agreement signed on behalf of each party
hereto or written evidence satisfactory to the Lender

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(which may include facsimile or other electronic transmission of a signed
signature page of this Agreement) that each such party has signed a counterpart
of this Agreement, (ii) a counterpart of each other Loan Document (each in form
and substance reasonably satisfactory to Lender) signed on behalf of each party
thereto or written evidence reasonably satisfactory to the Lender (which may
include facsimile or other electronic transmission of a signed signature page
thereof) that each such party has signed a counterpart of such Loan Document,
(iii) such other certificates, documents, instruments and agreements as the
Lender shall reasonably request in connection with the Transactions, including
all those documents and requirements listed in the Closing Conditions Schedule
dated as of the date hereof among the Borrowers and the Lender, in each case in
form and substance reasonably satisfactory to the Lender, and (iv) evidence
reasonably satisfactory to the Lender as to the satisfaction of each of the
items and requirements set forth in such Closing Conditions Schedule in a manner
reasonably satisfactory to the Lender.
(b)    Other Documents. The Lender shall have received such other documents as
the Lender or its counsel may have reasonably requested.
The Lender shall notify the Borrower Representative of the Effective Date, and
such notice shall be conclusive and binding. Notwithstanding the foregoing, the
obligations of the Lender to make Loans and to issue Letters of Credit hereunder
shall not become effective unless each of the foregoing conditions is satisfied
(or waived pursuant to Section 8.02) at or prior to 2:00 p.m., Chicago time, on
the 5th Business Day following the date of this Agreement (and, in the event
such conditions are not so satisfied or waived, the Commitment shall terminate
at such time).

SECTION 4.02.    Each Credit Event. The obligation of the Lender to make a Loan
on the occasion of any Borrowing, and to issue, amend, renew or extend any
Letter of Credit, is subject to the satisfaction of the following conditions:
(a)    The representations and warranties of the Loan Parties set forth in the
Loan Documents shall be true and correct in all material respects with the same
effect as though made on and as of the date of such Borrowing or the date of
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable (it being understood and agreed that any representation or warranty
which by its terms is made as of a specified date shall be required to be true
and correct in all material respects only as of such specified date, and that
any representation or warranty which is subject to any materiality qualifier
shall be required to be true and correct in all respects).
(b)    At the time of and immediately after giving effect to such Borrowing or
the issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, (i) no Default shall have occurred and be continuing and (ii) no
Protective Advance shall be outstanding.
(c)    After giving effect to any Borrowing or the issuance, amendment, renewal
or extension of any Letter of Credit, Availability shall not be less than zero.
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by each
Borrower on the date thereof as to the matters specified in paragraphs (a), (b)
and (c) of this Section.

ARTICLE V    
Affirmative Covenants
Until all of the Secured Obligations shall have been Paid in Full, each Loan
Party executing this Agreement covenants and agrees, jointly and severally with
all of the other Loan Parties, with the Lender that:        

SECTION 5.01.    Financial Statements; Borrowing Base and Other Information. The
Borrowers will furnish to the Lender the information required under the
Reporting Schedule attached hereto within the applicable time periods set forth
therein.

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SECTION 5.02.    Notices of Material Events. The Borrowers will furnish to the
Lender prompt (but in any event within any time period that may be specified
below) written notice of the following:
(a)    the occurrence of any Default within one Business Day of the knowledge of
any Borrower thereof;
(b)    receipt of any notice of any investigation by a Governmental Authority or
any litigation or proceeding commenced or threatened in writing against any Loan
Party or any Subsidiary that (i) seeks damages in excess of $250,000, (ii) seeks
injunctive relief regarding any matter material to the operations of the
business of the Loan Parties or their Subsidiaries, (iii) is asserted or
instituted against any Plan, its fiduciaries or its assets, (iv) alleges
criminal misconduct by any Loan Party or any Subsidiary, (v) alleges the
violation of, or seeks to impose remedies under, any Environmental Law or
related Requirement of Law, or seeks to impose Environmental Liability, (vi)
asserts liability on the part of any Loan Party or any Subsidiary in excess of
$250,000, in respect of any tax, fee, assessment, or other governmental charge,
or (vii) involves any product recall;
(c)    any Lien (other than Permitted Encumbrances or other Liens permitted
pursuant to Section 6.02 hereof or in any Collateral Document) or claim made or
asserted against any of the Collateral;
(d)    any loss, damage, or destruction to the Collateral in the amount of
$250,000 or more, whether or not covered by insurance;
(e)    within two Business Days of receipt thereof, any and all default notices
received under or with respect to any leased location or public warehouse where
Collateral is located, provided that no notice shall be required if none of such
Collateral constitutes Eligible Inventory and the aggregate value is less than
$250,000;
(f)    all material amendments to any Material Agreement, together with a copy
of each such amendment;
(g)    any material change in accounting or financial reporting practices by the
Borrower or any Subsidiary not otherwise required by GAAP;
(h)    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
liability of the Loan Parties and their Subsidiaries in an aggregate amount
exceeding $250,000;
(i)    promptly after the same become publicly available, copies of all periodic
and other reports, proxy statements and other materials filed by the Company or
any Subsidiary with the SEC or any Governmental Authority succeeding to any or
all of the functions of the SEC, or with any national securities exchange, or
distributed by the Company to its shareholders generally, as the case may be;
(j)    promptly after receipt thereof by the Company or any Subsidiary, copies
of each notice or other correspondence received from the SEC (or comparable
agency in any applicable non-U.S. jurisdiction) concerning any investigation or
possible investigation or other inquiry by the SEC or such other agency
regarding financial or other operational results of the Company or any
Subsidiary thereof;
(k)    promptly following any request therefor, copies of any detailed audit
reports, management letters or recommendations submitted to the board of
directors (or the audit committee of the board of directors) of the Borrower by
independent accountants in connection with the accounts or books of the Company
or any Subsidiary, or any audit of any of them as the Lender may reasonably
request;

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(l)    any other development that results in, or could reasonably be expected to
result in, a Material Adverse Effect; and
(m)    if and to the extent such information required under Beneficial Ownership
Regulation, any change in the information provided in the Beneficial Ownership
Certification delivered to the Lender that would result in a change to the list
of beneficial owners identified in such certification; provided that no Loan
Party shall be responsible for providing any information relating to the change
in shareholders of the Company if and to the extent such information is not
required under Beneficial Ownership Regulation.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower Representative
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.    Existence; Conduct of Business. Each Loan Party will, and will
cause each Subsidiary to, (a) 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, qualifications, licenses, permits, franchises, governmental
authorizations, intellectual property rights, licenses and permits material to
the conduct of its business, and maintain all requisite authority to conduct its
business in each jurisdiction where the character of its property or its
business activities makes such qualification necessary and is material to the
conduct of its business; and (b) carry on and conduct its business in
substantially the same manner and in substantially the same fields of enterprise
as it is presently conducted; provided that the foregoing shall not prohibit (i)
any sales of property, merger, consolidation, liquidation or dissolution
permitted under Section 6.03 or 6.05 or (ii) the withdrawal by any Loan Party or
Subsidiary of its qualification as a foreign corporation in any jurisdiction
where such qualification is not necessary due to the reduced character of its
property or its business in any such jurisdiction, or (iii) the abandonment by
any Loan Party of any rights, franchises, licenses, trademarks, trade names,
copyrights or patents that such Person reasonably determines are not useful to
its business or no longer commercially desirable. Notwithstanding anything in
this Agreement to the contrary, the Loan Parties represent and agree that
General Aluminum Forgings, LLC, an Ohio limited liability company, SIFCO Custom
Machining Company, a Minnesota corporation, and SIFCO Turbine Component Services
LLC, an Ohio limited liability company, do not, and will not, own any assets at
any time and each will be dissolved within 30 days of the finalization of all
open accounts and claims that are currently pending in respect to each such
Dormant Subsidiary, that T & W does not, and will not, own any assets at any
time other than as described in Section 3.15 of the Disclosure Certificate, and
that no Loan Party nor any Subsidiary will transfer any assets to, or make any
loan or other advance to, or make any investment in, any of General Aluminum
Forgings, LLC, an Ohio limited liability company, SIFCO Custom Machining
Company, a Minnesota corporation, SIFCO Turbine Component Services LLC, an Ohio
limited liability company, and T & W.

SECTION 5.04.    Payment of Obligations. Each Loan Party will, and will cause
each Subsidiary to, pay or discharge all Material Indebtedness and all other
material liabilities and obligations, including Taxes, 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) such Loan Party
or Subsidiary has set aside on its books adequate reserves with respect thereto
in accordance with GAAP and (c) the failure to make payment pending such contest
could not reasonably be expected to result in a Material Adverse Effect;
provided, however, each Loan Party will, and will cause each Subsidiary to,
remit withholding taxes and other payroll taxes to appropriate Governmental
Authorities as and when claimed to be due, notwithstanding the foregoing
exceptions.

SECTION 5.05.    Maintenance of Properties. Each Loan Party will, and will cause
each Subsidiary to, keep and maintain all property material to the conduct of
its business in good working order and condition, ordinary wear and tear
excepted, except as otherwise permitted under Section 6.05.

SECTION 5.06.    Books and Records; Inspection Rights. Each Loan Party will, and
will cause each Subsidiary to, (a) keep proper books of record and account in
which full, true and correct entries are made of all dealings and transactions
in relation to its business and activities and (b) permit any representatives
designated by the Lender (including employees of the Lender, or any consultants,
accountants, lawyers, agents and appraisers

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retained by the Lender), upon reasonable prior notice, to visit and inspect its
properties, to conduct at such Loan Party’s premises field examinations of such
Loan Party’s assets, liabilities, books and records, including examining and
making extracts from its books and records, environmental assessment reports and
Phase I or Phase II studies, 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. Each Loan Party acknowledges that the Lender,
after exercising its rights of inspection, may prepare certain Reports
pertaining to the Loan Parties’ assets for internal use by the Lender. After the
occurrence and during the continuance of any Event of Default, each Loan Party
shall provide the Lender with access to its suppliers. Notwithstanding anything
to the contrary in this Agreement, the payment for field exams shall be
determined in accordance with Section 8.03(a).

SECTION 5.07.    Compliance with Laws and Material Contractual Obligations. Each
Loan Party will, and will cause each Subsidiary to, (i) comply with each
Requirement of Law applicable to it or its property (including without
limitation Environmental Laws) and (ii) perform in all material respects its
obligations under Material Agreements to which it is a party, except, in each
case, where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. Each Loan Party
will maintain in effect and enforce policies and procedures designed to ensure
compliance by such Loan Party, its Subsidiaries and their respective directors,
officers, employees and Authorized Agents with Anti-Corruption Laws and
applicable Sanctions.

SECTION 5.08.    Use of Proceeds. (%3) The proceeds of the Loans and the Letters
of Credit will be used only for working capital and general organizational
purposes in the ordinary course of business, including but not limited to
repaying Indebtedness of one or more of the Borrowers. No part of the proceeds
of any Loan and no Letter of Credit will be used, whether directly or
indirectly, (%5) for any purpose that entails a violation of any of the
regulations of the Federal Reserve Board, including Regulations T, U and X or
(ii) to make any Acquisition, except as may be permitted by Section 6.04 hereto.
(a)    No Borrower will request any Borrowing or Letter of Credit, and no
Borrower shall use, and each Borrower shall procure that its Subsidiaries and
its and their respective directors, officers, employees and agents shall not
use, the proceeds of any Borrowing or Letter of Credit (i) in furtherance of an
offer, payment, promise to pay, or authorization of the payment or giving of
money, or anything else of value, to any Person in violation of any
Anti-Corruption Laws to the extent such activity, businesses or transactions
would be prohibited by Sanctions, if conducted by a corporation incorporated in
the United States or the European Union, (ii) for the purpose of funding,
financing or facilitating any activities, business or transaction of or with any
Sanctioned Person, or in any Sanctioned Country, except to the extent permitted
for a Person required to comply with Sanctions, or (iii) in any manner that
would result in the violation of any Sanctions applicable to any party hereto.

SECTION 5.09.    Accuracy of Information. The Loan Parties will ensure that any
written information, including financial statements or other documents,
furnished to the Lender in connection with this Agreement or any other Loan
Document contains no 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, and the furnishing of
such information shall be deemed to be a representation and warranty by each
Borrower on the date thereof as to the matters specified in this Section 5.09;
provided that, with respect to projected financial information, the Loan Parties
will only ensure that such information was prepared in good faith based upon
assumptions believed by the Loan Parties to be reasonable at the time, it being
understood that such projected financial information is subject to uncertainties
and contingencies, many of which are beyond the control of the Loan Parties and
their Subsidiaries, and no assurances can be given that such projected financial
information will be realized and that actual results may differ in a material
manner from such projected financial information.

SECTION 5.10.    Insurance. (%3) Each Loan Party will, and will cause each
Subsidiary to, maintain with financially sound and reputable carriers having a
financial strength rating of at least A- by A.M. Best Company (a) insurance in
such amounts (with no greater risk retention) and against such risks (including,
without limitation, loss or damage by fire and loss in transit; theft, burglary,
pilferage, larceny, embezzlement, and other criminal activities; business
interruption; and general liability) and such other hazards, as is customarily
maintained by companies of established repute engaged in the same or similar
businesses operating in the same or similar locations and (b) all

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insurance required pursuant to the Collateral Documents. The Borrowers will
furnish to the Lender, upon request of the Lender, but no less frequently than
annually, information in reasonable detail as to the insurance so maintained.
(a)    In the event any Collateral is located in any area that has been
designated by the Federal Emergency Management Agency as a “Special Flood Hazard
Area”, the applicable Loan Party shall purchase and maintain flood insurance on
such Collateral (including any personal property which is located on any real
property leased by such Loan Party within a “Special Flood Hazard Area”). The
amount of flood insurance required by this Section shall be in an amount equal
to the lesser of the Commitment or the total replacement cost value of the
improvements.
(b)    All insurance policies required hereunder or under this Section 5.10
shall name the Lender as an additional insured or as lender loss payee, as
applicable, and shall contain lender loss payable clauses or mortgagee clauses,
through endorsements in form and substance satisfactory to the Lender, which
provide that: (i) all proceeds thereunder with respect to any Collateral shall
be payable to the Lender; (ii) no such insurance shall be affected by any act or
neglect of the insured or owner of the property described in such policy; and
(iii) such policy and lender loss payable or mortgagee clauses may be canceled,
amended, or terminated only upon at least 30 days prior written notice given to
the Lender.
(c)    All premiums on such insurance shall be paid when due, and copies of the
policies delivered to the Lender upon its written request. If a Loan Party fails
to obtain any insurance as required by this Section, the Lender may obtain such
insurance at the Borrowers’ expense. By purchasing such insurance, the Lender
shall not be deemed to have waived any Event of Default arising from the
applicable Loan Party's failure to maintain such insurance or pay any premiums
therefor.

SECTION 5.11.    Casualty and Condemnation. The Borrowers will (a) furnish to
the Lender 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 material portion of the Collateral or interest
therein under power of eminent domain or by condemnation or similar proceeding
and (b) ensure that the Net Proceeds of any such event (whether in the form of
insurance proceeds, condemnation awards or otherwise) are collected and applied
in accordance with any applicable provisions of this Agreement and the
Collateral Documents.

SECTION 5.12.    Appraisals. At any time that the Lender requests, each Loan
Party will provide the Lender with appraisals or updates thereof of its
Inventory, Equipment and real property, as applicable, from an appraiser
selected and engaged by the Lender, and prepared on a basis reasonably
satisfactory to the Lender, such appraisals and updates to include, without
limitation, information required by any applicable Requirement of Law and shall
be paid for in accordance with Section 8.03(a).

SECTION 5.13.    Depository Banks. At all times on and after the date 90 days
after the Effective Date, each of the Borrowers and their Domestic Subsidiaries
will maintain the Lender as its principal depository bank, including for the
maintenance of operating, administrative, cash management, collection activity,
and other deposit accounts for the conduct of its business; provided, however,
that the Loan Parties may maintain each of the deposit and lockbox accounts set
forth in Section B of the Perfection Certificate for each such Loan Party so
long as (a) maintaining any such account is necessary for the collection of
receivables, (b) all funds and other proceeds are swept or transferred into an
account maintained with the Lender promptly after receipt and (c) the Loan
Parties deliver a signed account control agreement acceptable to the Lender with
respect to each such account within 30 days after the Effective Date.

SECTION 5.14.    Additional Collateral; Further Assurances. (%3) Subject to
applicable Requirements of Law, each Loan Party will cause each Domestic
Subsidiary formed or acquired after the date of this Agreement to become a Loan
Party by executing a joinder agreement in form satisfactory to the Lender. Upon
execution and delivery thereof, each such Person (i) shall automatically become
a Loan Guarantor hereunder and thereupon shall have all of the rights, benefits,
duties, and obligations in such capacity under the Loan Documents

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and (ii) will grant Liens to the Lender, for the benefit of the Secured Parties,
in any property of such Loan Party which constitutes Collateral, including any
parcel of real property located in the U.S. owned by any Loan Party and all
other existing and future assets of each Loan Party.
(a)    Each Loan Party will cause 100% of the issued and outstanding Equity
Interests of each of its Subsidiaries (limited, in the case of the Equity
Interests of Foreign Subsidiaries, to (i) 66.66% of the issued and outstanding
Equity Interests entitled to vote (within the meaning of Treas. Reg. Section
1.956-2(c)(2)), provided that a greater percentage may be required by the Lender
to the extent a pledge of a greater percentage could not reasonably be expected
to result in a material adverse tax consequence or if the Lender’s ability to be
repaid in full would be impaired without such greater percentage, and (ii) 100%
of the issued and outstanding Equity Interests not entitled to vote (within the
meaning of Treas. Reg. Section 1.956-2(c)(2)) in each Foreign Subsidiary
directly owned by such Loan Party) to be subject at all times to a first
priority, perfected Lien in favor of the Lender, for the benefit of the Secured
Parties, pursuant to the terms and conditions of the Loan Documents or other
security documents as the Lender shall reasonably request.
(b)    Without limiting the foregoing, each Loan Party will, and will cause each
Domestic Subsidiary to, execute and deliver, or cause to be executed and
delivered, to the Lender such documents, agreements and instruments, and will
take or cause to be taken such further actions (including the filing and
recording of financing statements, fixture filings, mortgages, deeds of trust
and other documents and such other actions or deliveries of the type required by
Section 4.01, as applicable), which may be required by any Requirement of Law or
which the Lender may, from time to time, reasonably request to carry out the
terms and conditions of this Agreement and the other Loan Documents and to
ensure perfection and priority of the Liens created or intended to be created by
the Collateral Documents, all in form and substance reasonably satisfactory to
the Lender and all at the expense of the Loan Parties.
(c)    If any material assets (including any real property or improvements
thereto or any interest therein) are acquired by any Loan Party after the
Effective Date (other than assets constituting Collateral under the Security
Agreement that become subject to the Lien under the Security Agreement upon
acquisition thereof), the Borrower Representative will (i) notify the Lender,
and, if requested by the Lender, cause such assets to be subjected to a Lien
securing the Secured Obligations and (ii) take, and cause each applicable Loan
Party to take, such actions as shall be necessary or reasonably requested by the
Lender to grant and perfect such Liens, including actions described in paragraph
(c) of this Section, all at the expense of the Loan Parties.

SECTION 5.15.    Receivables. (%3) Certain Agreements on Receivables. No Loan
Party will make or agree to make any material discount, credit, rebate or other
reduction in the original amount owing on a Receivable or accept in satisfaction
of a Receivable less than the original amount thereof, except that, prior to the
occurrence of an Event of Default, the Loan Parties may reduce the amount of
Accounts arising from the sale of Inventory in accordance with their present
policies and in the ordinary course of business.
(a)    Collection of Receivables. Except as otherwise provided in this Agreement
or the Security Agreement, each Loan Party will use commercially reasonable
efforts collect and enforce, at the Loan Party's sole expense, all amounts due
or hereafter due to such Loan Party under the Receivables.
(b)    Delivery of Invoices. The Borrowers will deliver to the Lender
immediately upon its request after the occurrence and during the continuation of
an Event of Default duplicate invoices with respect to each Account of the Loan
Parties bearing such language of assignment as the Lender shall specify.
(c)    Disclosure of Counterclaims on Receivables. If (i) any material discount,
credit or agreement to make a rebate or to otherwise reduce the amount owing on
a Receivable exists or (ii) if, to the knowledge of any Loan Party, any dispute,
setoff, claim, counterclaim or defense exists or has been asserted or threatened
in writing with respect to a Receivable, the applicable Borrower will promptly
disclose such fact to the Lender in writing. The Borrowers shall send the Lender
a copy of each such credit memorandum in excess of $250,000 as soon as issued

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by any Loan Party, and the applicable Borrower shall promptly report each such
credit memo and each of the facts required to be disclosed to the Lender in
accordance with this Section 5.15(d) on the Borrowing Base Certificates
submitted by it.

SECTION 5.16.    Inventory and Equipment. (%3) Maintenance of Goods. Each Loan
Party will maintain, preserve, protect and keep its Equipment in good repair and
working condition, except for ordinary wear and tear in respect of its
Equipment. Each Loan Party will keep its Inventory in saleable condition, except
for damaged or defective goods arising in the ordinary course of the Loan
Party’s business.
(a)    Returned Inventory. If an Account Debtor returns any Inventory to a Loan
Party when no Event of Default exists, then such Loan Party shall promptly
determine the reason for such return and shall issue a credit memorandum to such
Account Debtor in the appropriate amount or take such other action in accordance
with its historical practices and consistent with its sale terms and conditions.
The Borrowers shall promptly report to the Lender any return involving an amount
in excess of $250,000. Each such report shall indicate the reasons for the
returns and the locations and condition of the returned Inventory. In the event
any Account Debtor returns Inventory to a Loan Party when an Event of Default
exists, such Loan Party, upon the request of the Lender, shall: (i) hold the
returned Inventory in trust for the Lender; (ii) segregate all returned
Inventory from all of its other property; (iii) dispose of the returned
Inventory solely according to the Lender’s written instructions; and (iv) not
issue any credits or allowances with respect thereto without the Lender’s prior
written consent. All returned Inventory shall be subject to the Lender’s Liens
thereon. Whenever any Inventory is returned, the related Account shall be deemed
ineligible to the extent of the amount owing by the Account Debtor with respect
to such returned Inventory and such returned Inventory shall not be Eligible
Inventory unless otherwise determined by the Lender in its Permitted Discretion.
(b)    Inventory Count; Perpetual Inventory System. Each Loan Party will conduct
a physical count of the Inventory at least once per fiscal year, and after and
during the continuation of an Event of Default, at such other times as the
Lender requests. Each Loan Party, at its own expense, shall deliver to the
Lender the results of each physical verification, which such Loan Party has
made, or has caused any other Person to make on its behalf, of all or any
portion of its Inventory. Unless waived by the Lender, each Loan Party will
maintain a perpetual inventory reporting system at all times.
(c)    Equipment. Each Loan Party shall promptly inform the Lender of any
additions to or deletions from the Equipment which individually or in the
aggregate exceed $250,000. Each Loan Party shall not permit any Equipment to
become a fixture with respect to real property or to become an accession with
respect to other personal property with respect to which real or personal
property the Lender does not have a Lien. Each Loan Party will not, without the
Lender’s prior written consent, alter or remove any identifying symbol or number
on any of such Loan Party’s Equipment constituting Collateral.

ARTICLE VI    
Negative Covenants
Until all Secured Obligations shall have been Paid in Full, each Loan Party
executing this Agreement covenants and agrees, jointly and severally with all of
the other Loan Parties, with the Lender that:

SECTION 6.01.    Indebtedness. No Loan Party will, nor will it permit any
Subsidiary to, create, incur or suffer to exist any Indebtedness, except:
(a)    the Secured Obligations;
(b)    Indebtedness existing on the date hereof and set forth in Section 6.01 of
the Disclosure Certificate and any extensions, renewals, refinancing’s and
replacements of any such Indebtedness in accordance with clause (f) hereof;

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(c)    Indebtedness of any Borrower to any Subsidiary and of any Subsidiary to
any Borrower or any other Subsidiary, provided that (i) Indebtedness of any
Subsidiary that is not a Loan Party to any Borrower or any other Loan Party
shall be subject to Section 6.04 and (ii) Indebtedness of any Loan Party to any
Subsidiary that is not a Loan Party shall be subordinated to the Secured
Obligations on terms reasonably satisfactory to the Lender;
(d)    Guarantees by any Borrower of Indebtedness of any Subsidiary and by any
Subsidiary of Indebtedness of any Borrower or any other Subsidiary, provided
that (i) the Indebtedness so Guaranteed is permitted by this Section 6.01, (ii)
Guarantees by any Borrower or other Loan Party of Indebtedness of any Subsidiary
that is not a Loan Party shall be subject to Section 6.04 and (iii) Guarantees
permitted under this clause (d) shall be subordinated to the Secured Obligations
on the same terms as the Indebtedness so Guaranteed is subordinated to the
Secured Obligations;
(e)    Indebtedness of any Borrower or any Subsidiary not otherwise permitted
under this Section 6.01 and incurred to finance the acquisition, construction or
improvement of any fixed or capital assets (whether or not constituting purchase
money Indebtedness), including Capital Lease Obligations and any Indebtedness
assumed in connection with the acquisition of any such assets or secured by a
Lien on any such assets prior to the acquisition thereof, and extensions,
renewals and replacements of any such Indebtedness in accordance with clause (f)
below; provided that (i) such Indebtedness is incurred prior to or within 90
days after such acquisition or the completion of such construction or
improvement and (ii) the aggregate principal amount of Indebtedness permitted by
this clause (e) together with any Refinance Indebtedness in respect thereof
permitted by clause (f) below, shall not exceed the Purchase Money Debt Limit at
any time outstanding;
(f)    Indebtedness which represents extensions, renewals, refinancing or
replacements (such Indebtedness being so extended, renewed, refinanced or
replaced being referred to herein as the “Refinance Indebtedness”) of any of the
Indebtedness described in clauses (b),(e), (i) and (j) hereof (such Indebtedness
being referred to herein as the “Original Indebtedness”); provided that (i) such
Refinance Indebtedness does not increase the principal amount or interest rate
of the Original Indebtedness, (ii) any Liens securing such Refinance
Indebtedness are not extended to any additional property of any Loan Party or
any Subsidiary, (iii) no Loan Party or any Subsidiary that is not originally
obligated with respect to repayment of such Original Indebtedness is required to
become obligated with respect to such Refinance Indebtedness, (iv) such
Refinance Indebtedness does not result in a shortening of the average weighted
maturity of such Original Indebtedness, (v) the terms of such Refinance
Indebtedness are not less favorable to the obligor thereunder than the original
terms of such Original Indebtedness and (vi) if such Original Indebtedness was
subordinated in right of payment to the Secured Obligations, then the terms and
conditions of such Refinance Indebtedness must include subordination terms and
conditions that are at least as favorable to the Lender as those that were
applicable to such Original Indebtedness;
(g)    Indebtedness owed to any Person providing workers’ compensation, health,
disability or other employee benefits or property, casualty or liability
insurance, pursuant to reimbursement or indemnification obligations to such
Person, in each case incurred in the ordinary course of business;
(h)    Indebtedness of any Loan Party in respect of performance bonds, bid
bonds, appeal bonds, surety bonds and similar obligations, in each case provided
in the ordinary course of business;
(i)    Subordinated Indebtedness in an aggregate principal amount not exceeding
the Subordinated Debt Limit at any time outstanding;
(j)    the City of Cleveland Indebtedness;
(k)    other unsecured Indebtedness in an aggregate principal amount not
exceeding the Unsecured Debt Limit at any time outstanding; and
(l)    such other Indebtedness as may be permitted under the terms of any Rider
attached hereto.

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Notwithstanding anything in this Section 6.01, in Section 6.04 or in any other
provision of this Agreement to the contrary, each Loan Party acknowledges and
agrees that it does not, and will not, Guarantee or otherwise be or become
liable with respect to any of the Indebtedness of any Foreign Subsidiary
described in Section 6.01 of the Disclosure Certificate, and will not make any
payments thereon.

SECTION 6.02.    Liens. No Loan Party will, nor will it permit any Subsidiary
to, create, incur, assume or permit to exist any Lien on any property or asset
now owned or hereafter acquired by it, or assign or sell any income or revenues
(including Accounts) or rights in respect of any thereof, except:
(a)    Liens created pursuant to any Loan Document;
(b)    Permitted Encumbrances;
(c)    any Lien on any property or asset of any Borrower or any Subsidiary
existing on the date hereof and set forth in Section 6.02 of the Disclosure
Certificate; provided that (i) such Lien shall not apply to any other property
or asset of such Borrower or Subsidiary and (ii) such Lien shall secure only
those obligations which it secures on the date hereof and extensions, renewals
and replacements thereof that do not increase the outstanding principal amount
thereof;
(d)    Liens on fixed or capital assets acquired, constructed or improved by any
Borrower or any Subsidiary; provided that (i) such Liens secure Indebtedness
permitted by clause (e) of Section 6.01, (ii) such Liens and the Indebtedness
secured thereby are incurred prior to or within 90 days after such acquisition
or the completion of such construction or improvement, (iii) the Indebtedness
secured thereby does not exceed 80% of the cost of acquiring, constructing or
improving such fixed or capital assets and (iv) such Liens shall not apply to
any other property or assets of any Borrower or Subsidiary;
(e)    Liens of a collecting bank arising in the ordinary course of business
under Section 4‑208 of the UCC in effect in the relevant jurisdiction covering
only the items being collected upon;
(f)    Liens arising out of Sale and Leaseback Transactions permitted by Section
6.06;
(g)    a Lien on a 1500 Ton Forging Press machine located at 970 East 64th
Street, Cleveland, Ohio 44103 securing the City of Cleveland Indebtedness,
provided that such Lien is subordinated to the Liens in favor of the Lender on
terms satisfactory to the Lender (which may be satisfied as a result of the UCC
filing being filed after the UCC filing of the Lender);
(h)    Liens granted by a Subsidiary that is not a Loan Party in favor of any
Borrower or another Loan Party in respect of Indebtedness owed by such
Subsidiary; and
(i)    such other Liens as may be permitted under the terms of any Rider
attached hereto.
Notwithstanding the foregoing, none of the Liens permitted pursuant to this
Section 6.02 may at any time attach to any Loan Party’s (1) Accounts, other than
those permitted under clause (a) of the definition of Permitted Encumbrances and
clause (a) above, or (2) Inventory, other than those permitted under clauses (a)
and (b) of the definition of Permitted Encumbrances and clause (a) above.

SECTION 6.03.    Fundamental Changes. (%3) No Loan Party will, nor will it
permit any Subsidiary to, merge into or consolidate with any other Person, or
permit any other Person to merge into or consolidate with it, or liquidate or
dissolve, except that, if at the time thereof and immediately after giving
effect thereto no Event of Default shall have occurred and be continuing (i) any
Subsidiary of any Borrower may merge into a Borrower in a transaction in which
such Borrower is the surviving entity, (ii) any Loan Party (other than a
Borrower) may merge into any other Loan Party in a transaction in which the
surviving entity is a Loan Party, (iii) after the completion of

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the T & W Asset Disposition, T & W may be dissolved, (iv) any Subsidiary that is
not a Loan Party may merge into a Loan Party in a transaction in which the
surviving entity is a Loan Party, (v) any Subsidiary that is not a Loan Party
may merge into any other Subsidiary that is not a Loan Party, and, (vi) any
Subsidiary that is not a Loan Party may liquidate or dissolve if the Borrower
which owns such Subsidiary determines in good faith that such liquidation or
dissolution is in the best interests of such Borrower and is not materially
disadvantageous to the Lender; provided that any such merger involving a Person
that is not a wholly owned Subsidiary immediately prior to such merger shall not
be permitted unless also permitted by Section 6.04.
(a)    No Loan Party will, nor will it permit any Subsidiary to, engage to any
material extent in any business other than businesses of the type conducted by
the Borrowers and their Subsidiaries on the date of hereof and businesses
reasonably related thereto.
(b)    No Loan Party will, nor will it permit any Subsidiary to, change its
fiscal year from the basis in effect on the Effective Date.
(c)    No Loan Party will change the accounting basis upon which its financial
statements are prepared unless such change is required by a change in GAAP.
(d)    No Loan Party will change the tax filing elections it has made under the
Code.
(e)    No Loan Party will change the type of entity that it is without thirty
(30) days’ prior written notice to the Lender, provided that, each Loan Party
shall cooperate with the Lender and take all reasonable action requested by the
Lender (including without limitation the delivery of all agreements and legal
opinions required by the Lender) in connection therewith to ensure the continued
perfection of any Liens in favor of the Lender in any Collateral and the
continued enforceability of all Loan Documents.
(f)    No Loan Party will change its organization identification number, if any,
issued by its state of incorporation or other organization without thirty (30)
days’ prior written notice to the Lender, provided that, each Loan Party shall
cooperate with the Lender and take all reasonable action requested by the Lender
in connection therewith to ensure the continued perfection of any Liens in favor
of the Lender in any Collateral.
(g)    No Loan Party will change its state of incorporation or organization, in
each case, unless the Lender shall have received at least 30 days prior written
notice of such change and the Lender shall have acknowledged in writing that
either (1) such change will not adversely affect the validity, perfection or
priority of the Lender's security interest in the Collateral, or (2) any
reasonable action requested by the Lender in connection therewith has been
completed or taken (including any action to continue the perfection of any Liens
in favor of the Lender in any Collateral), provided that, any new location of
incorporation or organization shall be in the continental U.S.

SECTION 6.04.    Investments, Loans, Advances, Guarantees and Acquisitions. No
Loan Party will, nor will it permit any Subsidiary to, form any subsidiary after
the Effective Date, or purchase, hold or acquire (including pursuant to any
merger with any Person that was not a Loan Party and a wholly owned Subsidiary
prior to such merger) any evidences of Indebtedness or Equity Interests or other
securities (including any option, warrant or other right to acquire any of the
foregoing) of, make or permit to exist any loans or advances to, Guarantee any
obligations of, or make or permit to exist any investment or any 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 (whether through purchase of assets, merger or otherwise), except:
(a)    Permitted Investments, subject to control agreements in favor of the
Lender or otherwise subject to a perfected security interest in favor of the
Lender;

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(b)    investments and loans in existence on the date hereof and described in
Section 6.04 of the Disclosure Certificate;
(c)    investments by the Borrowers and their Subsidiaries not otherwise
permitted under this Section 6.04 in Equity Interests in their respective
Subsidiaries, provided that (A) any such Equity Interests held by a Loan Party
shall be pledged pursuant to the Security Agreement and (B) the aggregate amount
of investments by Loan Parties in Subsidiaries that are not Loan Parties
(together with outstanding intercompany loans permitted under clause (B) to the
proviso to Section 6.04(d) and outstanding Guarantees permitted under the
proviso to Section 6.04(e)) shall not exceed the Investment Limit at any time
outstanding (in each case determined without regard to any write-downs or
write-offs);
(d)    loans or advances made by any Loan Party to any Subsidiary and made by
any Subsidiary to a Loan Party or any other Subsidiary not otherwise permitted
under this Section 6.04, provided that (A) any such loans and advances made by a
Loan Party shall be evidenced by a promissory note pledged pursuant to the
Security Agreement and (B) the amount of such loans and advances made by Loan
Parties to Subsidiaries that are not Loan Parties (together with outstanding
investments permitted under clause (B) to the proviso to Section 6.04(c) and
outstanding Guarantees permitted under the proviso to Section 6.04(e)) shall not
exceed the Investment Limit at any time outstanding (in each case determined
without regard to any write-downs or write-offs);
(e)    Guarantees not otherwise permitted under this Section 6.04 constituting
Indebtedness permitted by Section 6.01 and subject to Section 6.01, provided
that the aggregate principal amount of Indebtedness of Subsidiaries that are not
Loan Parties that is Guaranteed by any Loan Party (together with outstanding
investments permitted under clause (B) to the proviso to Section 6.04(c) and
outstanding intercompany loans permitted under clause (B) to the proviso to
Section 6.04(d)) shall not exceed the Investment Limit at any time outstanding
(in each case determined without regard to any write-downs or write-offs);
(f)    loans or advances made by a Loan Party to its employees on an arms-length
basis in the ordinary course of business consistent with past practices for
travel and entertainment expenses, relocation costs and similar purposes up to a
maximum of $50,000 at any one time outstanding;
(g)    notes payable, or stock or other securities, issued by Account Debtors to
a Loan Party pursuant to negotiated agreements with respect to settlement of
such Account Debtor's Accounts in the ordinary course of business, consistent
with past practices;
(h)    investments in the form of Swap Agreements permitted by Section 6.07;
(i)    investments of any Person existing at the time such Person becomes a
Subsidiary of a Borrower or consolidates or merges with a Borrower or any of the
Subsidiaries so long as such investments were not made in contemplation of such
Person becoming a Subsidiary or of such merger;
(j)    investments received in connection with the disposition of assets
permitted by Section 6.05;
(k)    investments constituting deposits described in clauses (c) and (d) of the
definition of the term “Permitted Encumbrances;”
(l)    investments, purchases and Permitted Acquisitions as may be permitted by
the terms of any Rider attached hereto.
(m)    extensions of trade credit in the ordinary course of business and any
securities received in satisfaction or partial satisfaction thereof from
financially troubled Account Debtors to the extent reasonably necessary

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in order to prevent or limit loss and any prepayments and other credits to
suppliers made in the ordinary course of business;
(n)    any endorsement of a check or other medium of payment for deposit or
collection through normal banking channels or similar transaction in the normal
course of business;
(o)    investments received in connection with the bankruptcy or reorganization
of, or settlement of delinquent accounts and disputes with or judgments against,
customers and suppliers, in each case in the ordinary course of business; and
(p)    advances in the form of a prepayment of expenses in the ordinary course
of business of the Loan Parties, so long as such expenses are paid in accordance
with customary trade terms consistent with past business practices of the
applicable Loan Party.

SECTION 6.05.    Asset Sales. No Loan Party will, nor will it permit any
Subsidiary to, sell, transfer, lease or otherwise dispose of any asset,
including any Equity Interest owned by it, nor will any Borrower permit any
Subsidiary to issue any additional Equity Interest in such Subsidiary (other
than to another Borrower or another Subsidiary in compliance with Section 6.04),
except:
(a)    sales, transfers and dispositions of (i) Inventory in the ordinary course
of business and (ii) used, obsolete, worn out or surplus Equipment or property
in the ordinary course of business;
(b)    sales, transfers and dispositions of assets to any Borrower or any
Subsidiary, provided that any such sales, transfers or dispositions involving a
Subsidiary that is not a Loan Party shall be made in compliance with Section
6.09;
(c)    sales, transfers and dispositions of Accounts in connection with the
compromise, settlement or collection thereof;
(d)    sales, transfers and dispositions of Permitted Investments and other
investments permitted by clauses (i) and (j) of Section 6.04;
(e)    Sale and Leaseback Transactions permitted by Section 6.06;
(f)    dispositions resulting from any casualty or other insured damage to, or
any taking under power of eminent domain or by condemnation or similar
proceeding of, any property or asset of any Borrower or any Subsidiary;
(g)    sales, transfers and other dispositions of assets (other than Equity
Interests in a Subsidiary unless all Equity Interests in such Subsidiary are
sold) that are not permitted by any other paragraph of this Section, provided
that the aggregate fair market value of all assets sold, transferred or
otherwise disposed of in reliance upon this paragraph (g) shall not exceed
$150,000 during any fiscal year of the Borrowers;
(h)    any Subsidiary that is not a Loan Party may liquidate or dissolve if the
Borrower that owns such Subsidiary determines in good faith that such
liquidation or dissolution is in the best interests of such Borrower and will
not materially adversely affect the Lender; and
(i)    the T & W Asset Disposition;
provided that all sales, transfers, leases and other dispositions permitted
hereby (other than those permitted by paragraphs (b) and (f) above) shall be
made for fair value and for at least 75% cash consideration.

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SECTION 6.06.    Sale and Leaseback Transactions. No Loan Party will, nor will
it permit any Subsidiary to, 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 (a “Sale and
Leaseback Transaction”), except for any such sale of any fixed or capital assets
by any Borrower or any Subsidiary that is made for cash consideration in an
amount not less than the fair value of such fixed or capital asset and is
consummated within 90 days after such Borrower or such Subsidiary acquires or
completes the construction of such fixed or capital asset.

SECTION 6.07.    Swap Agreements. No Loan Party will, nor will it permit any
Subsidiary to, enter into any Swap Agreement, except (a) Swap Agreements entered
into to hedge or mitigate risks to which any Borrower or any Subsidiary has
actual exposure (other than those in respect of Equity Interests of any Borrower
or any Subsidiary), and (b) Swap Agreements entered into in order to effectively
cap, collar or exchange interest rates (from floating to fixed rates, from one
floating rate to another floating rate or otherwise) with respect to any
interest-bearing liability or investment of any Borrower or any Subsidiary.

SECTION 6.08.    Restricted Payments; Certain Payments of Indebtedness. (%3) No
Loan Party will, nor will it permit any Subsidiary to, declare or make, or agree
to declare or make, directly or indirectly, any Restricted Payment, or incur any
obligation (contingent or otherwise) to do so, except (i) any Borrower may
declare and pay dividends with respect to its common stock payable solely in
additional shares of its common stock, and, with respect to its preferred stock,
payable solely in additional shares of such preferred stock or in shares of its
common stock, (ii) Subsidiaries may declare and pay dividends ratably with
respect to their Equity Interests, and (iii) the Borrowers may make Restricted
Payments, not exceeding $50,000 in the aggregate during any fiscal year,
pursuant to and in accordance with stock option plans or other benefit plans for
management or employees of the Borrowers and their Subsidiaries, (iv) so long as
(A) the Loan Party is a “pass through” entity for federal income tax purposes,
and (B) there exists no Event of Default, the Borrowers may pay dividends or
make distributions to its shareholders/members in an aggregate amount not
greater than the amount necessary for such shareholders/members to pay their
actual state and United States federal income tax liabilities in respect of
income earned by the Borrowers, after deducting any unused prior losses, (v) the
Borrowers may make Restricted Payments if and to the extent specifically agreed
to in writing by the Lender prior thereto, and (vi) the Borrowers may make Other
Restricted Payments (as defined in the Financial Covenants Schedule).
(a)    No Loan Party will, nor will it permit any Subsidiary to, 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 Indebtedness, 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, retirement, acquisition,
cancellation or termination of any Indebtedness, except (i) payment of
Indebtedness created under the Loan Documents, (ii) payment of regularly
scheduled interest and principal payments as and when due in respect of any
Indebtedness permitted under Section 6.01, other than payments in respect of the
Subordinated Indebtedness prohibited by the subordination provisions thereof,
(iii) refinancings of Indebtedness to the extent permitted by Section 6.01, and
(iv) payment of secured Indebtedness that becomes due as a result of the
voluntary sale or transfer of the property or assets securing such Indebtedness
to the extent such sale or transfer is permitted by the terms of Section 6.05.

SECTION 6.09.    Transactions with Affiliates. No Loan Party will, nor will it
permit any Subsidiary to, sell, lease or otherwise transfer any property or
assets to, or purchase, lease or otherwise acquire any property or assets from,
or otherwise engage in any other transactions with, any of its Affiliates,
except (a) transactions that (i) are in the ordinary course of business and (ii)
are at prices and on terms and conditions not less favorable to such Loan Party
or such Subsidiary than could be obtained on an arm’s-length basis from
unrelated third parties, (b) transactions between or among any Borrower and any
Subsidiary that is a Loan Party not involving any other Affiliate, (c) any
investment permitted by Sections 6.04(c) or 6.04(d), (d) any Indebtedness
permitted under Section 6.01(c), (e) any Restricted Payment permitted by Section
6.08, (f) loans or advances to employees permitted under Section 6.04, (g) the
payment of reasonable fees to directors of any Borrower or any Subsidiary who
are not employees of

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such Borrower or Subsidiary, and compensation, severance and employee benefit
arrangements paid to, and indemnities provided for the benefit of, directors,
officers or employees of the Borrowers or their Subsidiaries in the ordinary
course of business, including without limitation the issuance of capital stock,
payment of bonuses, long-term incentive compensation plans and other
transactions pursuant to employment or compensation agreements, indemnification
agreements or other arrangements, all in the ordinary course of business in a
manner consistent with past practice, and (h) any issuances of securities or
other payments, awards or grants in cash, securities or otherwise pursuant to,
or the funding of, employment agreements, stock options and stock ownership
plans approved by a Borrower’s board of directors.

SECTION 6.10.    Restrictive Agreements. No Loan Party will, nor will it permit
any Subsidiary to, directly or indirectly, enter into, incur or permit to exist
any agreement or other arrangement that prohibits, restricts or imposes any
condition upon (a) the ability of such Loan Party or any Subsidiary to create,
incur or permit to exist any Lien upon any of its property or assets, or (b) the
ability of any Subsidiary to pay dividends or other distributions with respect
to any of its Equity Interests or to make or repay loans or advances to any
Borrower or any other Subsidiary or to Guarantee Indebtedness of any Borrower or
any other Subsidiary; provided that (i) the foregoing shall not apply to
restrictions and conditions imposed by any Requirement of Law or by any Loan
Document, (ii) the foregoing shall not apply to restrictions and conditions
existing on the date hereof identified on Section 6.10 of the Disclosure
Certificate (but shall apply to any extension or renewal of, or any amendment or
modification expanding the scope 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 the foregoing
shall not apply to restrictions or conditions imposed by any agreement relating
to secured Indebtedness permitted by this Agreement if such restrictions or
conditions apply only to the property or assets securing such Indebtedness and
(v) clause (a) of the foregoing shall not apply to customary provisions in
leases and other contracts restricting the assignment thereof.

SECTION 6.11.    Amendment of Material Documents. No Loan Party will, nor will
it permit any Subsidiary to, amend, modify or waive any of its rights under (a)
any agreement relating to any Subordinated Indebtedness, (b) its charter,
articles or certificate of incorporation or organization, by-laws, operating,
management or partnership agreement or other organizational or governing
documents or (c) any Material Agreement, to the extent any such amendment,
modification or waiver would be materially adverse to the Lender.

SECTION 6.12.    Financial Covenants. Set forth on the Financial Covenants
Schedule attached hereto.

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

(a)    the Borrowers shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise;the Borrowers shall fail to pay any interest
on any Loan or any fee or any other amount (other than an amount referred to in
clause (a) of this Article) payable under this Agreement or any other Loan
Document, when and as the same shall become due and payable, and such failure
shall continue unremedied for a period of five days;
(b)    any representation or warranty made or deemed made by or on behalf of any
Loan Party or any Subsidiary in, or in connection with, this Agreement or any
other Loan Document, or in any report, certificate, financial statement or other
document furnished pursuant to or in connection with this Agreement or any other
Loan Document, shall prove to have been materially incorrect when made or deemed
made;

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(c)    any Loan Party shall fail to observe or perform any covenant, condition
or agreement contained in Section 5.02(a), 5.03 (with respect to a Loan Party’s
existence) or 5.08 or in Article VI;
(d)    any Loan Party shall fail to observe or perform any covenant, condition
or agreement contained in this Agreement (other than those which constitute a
default under another Section of this Article), and such failure shall continue
unremedied for a period of (i) 5 days after the earlier of any Loan Party’s
knowledge of such breach or notice thereof from the Lender if such breach
relates to terms or provisions of Section 5.01, 5.02 (other than Section
5.02(a)), 5.03 through 5.07, 5.10, 5.11, 5.13, 5.15 or 5.16 of this Agreement or
(ii) 15 days after the earlier of any Loan Party’s knowledge of such breach or
notice thereof from the Lender if such breach relates to terms or provisions of
any other Section of this Agreement;
(e)    any Loan Party or Subsidiary shall fail to make any payment (whether of
principal or interest and regardless of amount) in respect of any Material
Indebtedness, when and as the same shall become due and payable after giving
effect to any applicable grace period provided with respect thereto;
(f)    any event or condition occurs that results in any Material Indebtedness
becoming due prior to its scheduled maturity or that enables or permits (with or
without the giving of notice, the lapse of time or both) the holder or holders
of any Material Indebtedness or any trustee or agent on its or their behalf to
cause any Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity;
provided that this clause (g) shall not apply to secured Indebtedness that
becomes due as a result of the voluntary sale or transfer of the property or
assets securing such Indebtedness to the extent such sale or transfer is
permitted by Section 6.05;
(g)    an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of a Loan Party or Subsidiary 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 Loan Party or Subsidiary 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;
(h)    any Loan Party or Subsidiary 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) of this Article, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for such Loan Party or Subsidiary 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;
(i)    any Loan Party or Subsidiary shall become unable, admit in writing its
inability, or publicly declare its intention not to, or fail generally to pay
its debts as they become due;
(j)    (1) one or more judgments for the payment of money in an aggregate amount
in excess of the Judgment Amount shall be rendered against any Loan Party, any
Subsidiary or any combination thereof and the same shall remain undischarged for
a period of 30 consecutive 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 assets of any Loan Party or Subsidiary to enforce any such
judgment; or (2) any Loan Party or Subsidiary shall fail within 30 days to
discharge one or more non-monetary judgments or orders which, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect,
which judgments or orders, in any such case, are not stayed on appeal or
otherwise being appropriately contested in good faith by proper proceedings
diligently pursued;

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(k)    an ERISA Event shall have occurred that, in the opinion of the Lender,
when taken together with all other ERISA Events that have occurred, could
reasonably be expected to result in a Material Adverse Effect;
(l)    a Change in Control shall occur;
(m)    the occurrence of any “default”, as defined in any Loan Document (other
than this Agreement) or the breach of any of the terms or provisions of any Loan
Document (other than this Agreement), which default or breach continues beyond
any period of grace therein provided;
(n)    the Loan Guaranty or any Obligation Guaranty shall fail to remain in full
force or effect or any action shall be taken to discontinue or to assert the
invalidity or unenforceability of the Loan Guaranty or any Obligation Guaranty
or a Loan Guarantor shall fail to comply with any of the terms or provisions of
the Loan Guaranty or any Obligation Guaranty to which it is a party, or any Loan
Guarantor shall deny that it has any further liability under the Loan Guaranty
or any Obligation Guaranty to which it is a party, or shall give notice to such
effect, including, but not limited to notice of termination delivered pursuant
to Section 9.08 or any notice of termination delivered pursuant to the terms of
any Obligation Guaranty;
(o)    except as permitted by the terms of this Agreement or any Collateral
Document, (i) any Collateral Document shall for any reason fail to create a
valid security interest in any Collateral purported to be covered thereby, or
(ii) any Lien securing any Secured Obligation shall cease to be a perfected,
first priority Lien;
(p)    any Collateral Document shall fail to remain in full force or effect or
any action shall be taken by a Person other than the Lender to discontinue or to
assert the invalidity or unenforceability of any Collateral Document;
(q)    any material provision of any Loan Document for any reason ceases to be
valid, binding and enforceable against any Loan Party in accordance with its
terms, or any Loan Party shall challenge the enforceability of any Loan Document
or shall assert in writing, or engage in any action or inaction that evidences
its assertion, that any provision of any of the Loan Documents has ceased to be
or otherwise is not valid, binding and enforceable in accordance with its terms;
(r)    any Loan Party is criminally indicted or convicted under any law that may
reasonably be expected to lead to a forfeiture of any property of such Loan
Party having a fair market value in excess of $250,000; or
(s)    if the common stock of the Company is delisted by the NYSE American;
then, and in every such event (other than an event described in clause (h) or
(i) of this Article), and at any time thereafter during the continuance of such
event, the Lender may, by written notice to the Borrower Representative, take
any or all of the following actions, at the same or different times: (i)
terminate the Commitment, whereupon the Commitment shall terminate immediately,
(ii) declare the Loans then outstanding to be due and payable in whole (or in
part, but ratably as among the Classes of Loans and the Loans of each Class at
the time outstanding, in which case any principal not so declared to be due and
payable may thereafter be declared to be due and payable), whereupon 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 Borrowers accrued
hereunder, shall become due and payable immediately, in each case without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrowers, and (iii) require cash collateral for the LC
Exposure in accordance with Section 2.05(h) hereof; and in the case of any event
described in clause (h) or (i) of this Article, the Commitment shall
automatically terminate and the principal of the Loans then outstanding and cash
collateral for the LC Exposure, together with accrued interest thereon and all
fees and other Obligations of the Borrowers accrued hereunder, shall
automatically become due and payable, in each case without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Borrowers. Upon the occurrence and during the continuance of an Event of
Default, the Lender may

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increase the rate of interest applicable to the Loans and other Obligations as
set forth in this Agreement and exercise any rights and remedies provided to the
Lender under the Loan Documents or at law or equity, including all remedies
provided under the UCC.

ARTICLE VIII
Miscellaneous

SECTION 8.01.    Notices. (a) Except in the case of notices and other
communications expressly permitted to be given by telephone or Electronic
Systems (and subject in each case to paragraph (b) below), all notices and other
communications provided for herein shall be in writing and shall be delivered by
hand or overnight courier service, mailed by certified or registered mail or
sent by facsimile, to the addresses set forth on the Terms Schedule attached
hereto. All such notices and other communications (i) sent by hand or overnight
courier service, or mailed by certified or registered mail, shall be deemed to
have been given when received, (ii) sent by facsimile shall be deemed to have
been given when sent, provided that if not given during normal business hours of
the recipient, such notice or communication shall be deemed to have been given
at the opening of business on the next Business Day for the recipient or (iii)
delivered through Electronic Systems to the extent provided in paragraph (b)
below shall be effective as provided in such paragraph.
SECTION 8.02.    Waivers; Amendments. (a) No failure or delay by the Lender 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
hereunder and under any other Loan Document are cumulative and are not exclusive
of any rights or remedies that it would otherwise have. No waiver of any
provision of any Loan Document or consent to any departure by any Loan Party
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section, and then such waiver or consent shall be
effec-tive only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether the Lender may have had notice or knowledge of
such Default at the time
(b)    Neither this Agreement nor any other Loan Document nor any provision
hereof or thereof may be waived, amended or modified except (i) in the case of
this Agreement, pursuant to an agreement or agreements in writing entered into
by the Borrowers and the Lender, or (ii) in the case of any other Loan Document,
pursuant to an agreement or agreements in writing entered into by the Lender and
the Loan Party or Loan Parties that are parties thereto.

SECTION 8.03.    Expenses; Indemnity; Damage Waiver. (a) The Loan Parties,
jointly and severally, shall pay all (i) documented and reasonable out‑of‑pocket
expenses incurred by the Lender and its Affiliates, including the reasonable
fees, charges and disbursements of counsel for the Lender, in connection with
the credit facilities provided for herein, the preparation and administration of
the Loan Documents and any amendments, modifications or waivers of the
provisions of the Loan Documents (whether or not the transactions contemplated
hereby or thereby shall be consummated), (ii) documented and reasonable
out-of-pocket expenses incurred by the Lender in connection with the issuance,
amendment, renewal or extension of any Letter of Credit or any demand for
payment thereunder and (iii) documented and reasonable out-of-pocket expenses
incurred by the Lender, including the fees, charges and disbursements of any
counsel for the Lender, in connection with the enforcement, collection or
protection of its rights in connection with the Loan Documents, including its
rights under this Section, or in connection with the Loans made or Letters of
Credit issued hereunder, including all such documented and reasonable
out-of‑pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit. Expenses being
reimbursed by the Loan Parties under this Section include, without limiting the
generality of the foregoing, fees, costs and expenses incurred in connection
with: (A) appraisals and insurance reviews; (B) field examinations

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and the preparation of Reports based on the fees charged by a third party
retained by the Lender or the internally allocated fees for each Person employed
by the Lender with respect to each field examination; (C) background checks
regarding senior management and/or key investors, as deemed necessary or
appropriate in the sole discretion of the Lender; (D) Taxes, fees and other
charges for (1) lien and title searches and title insurance and (2) filing
financing statements and continuations, recording any Mortgages, and other
actions to perfect, protect, and continue the Lender’s Liens; (E) sums paid or
incurred to take any action required of any Loan Party under the Loan Documents
that such Loan Party fails to pay or take; and (F) forwarding loan proceeds,
collecting checks and other items of payment, and establishing and maintaining
the accounts and lock boxes (without duplication of any fees or expenses set
forth in any applicable documentation relating thereto), and costs and expenses
of preserving and protecting the Collateral; provided that the Loan Parties
shall not be obligated to reimburse the Lender for more than the number of
appraisals (whether for inventory or intellectual property) and field
examinations set forth in the Terms Schedule attached hereto during any calendar
year unless an Event of Default has occurred and is continuing. All of the
foregoing fees, costs and expenses may be charged to the Borrowers as Revolving
Loans or to another deposit account, all as described in Section 2.17(c).
(b)    The Loan Parties, jointly and severally, shall indemnify the Lender, and
each Related Party of the Lender (each such Person being called an “Indemnitee”)
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, penalties, incremental taxes, liabilities and related expenses,
including the fees, charges and disbursements of any 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 the Loan Documents or
any agreement or instrument contemplated thereby, the performance by the parties
hereto of their respective obligations thereunder or the consummation of the
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
the Lender to honor a demand for payment under a Letter of Credit if the
documents presented in connection with such demand do not strictly comply with
the terms of such Letter of Credit), (iii) any actual or alleged presence or
Release of Hazardous Materials on or from any property owned or operated by a
Loan Party or a Subsidiary, or any Environmental Liability related in any way to
a Loan Party or a Subsidiary, (iv) the failure of a Loan Party to deliver to the
Lender the required receipts or other required documentary evidence with respect
to a payment made by a Loan Party for Taxes pursuant to Section 2.16, or (v) any
actual or prospective claim, litigation, investigation, arbitration or
proceeding relating to any of the foregoing, whether or not such claim,
litigation, investigation, arbitration or proceeding is brought by any Loan
Party or their respective equity holders, Affiliates, creditors or any other
third Person and 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, as to any Indemnitee, be available to the extent that such
losses, claims, damages, penalties, liabilities or related expenses are
deter-mined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee. This Section 8.03(b) shall not apply with respect to Taxes
other than any Taxes that represent losses or damages arising from any non-Tax
claim

(c)    To the extent permitted by applicable law, no Loan Party shall assert,
and each Loan Party hereby waives, any claim against any Indemnitee (i) for any
damages arising from the use by others of information or other materials
obtained through telecommunications, electronic or other information
transmission systems (including the Internet) or (ii) on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement, any other Loan Document or any agreement or instrument
contemplated hereby or thereby, the Transactions, any Loan or Letter of Credit
or the use of the proceeds thereof; provided that, nothing in this paragraph (c)
shall relieve any Loan Party of any obligation it may have to indemnify an
Indemnitee against special, indirect, consequential or punitive damages asserted
against such Indemnitee by a third party.
(d)    All amounts due under this Section shall be payable promptly after
written demand therefor.

SECTION 8.04.    Successors and Assigns. (a) The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby (including any Affiliate of
the Lender that issues any Letter of Credit), except that no Borrower may assign
or otherwise transfer any of its rights or obligations hereunder without the
prior written consent of the Lender (and any attempted

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assignment or transfer by any Borrower without such consent shall be null and
void). Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby and, to the extent expressly
contemplated hereby, the Related Parties of the Lender) any legal or equitable
right, remedy or claim under or by reason of this Agreement.
(b)    The Lender may assign to one or more Persons (other than an Ineligible
Institution) 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); provided that, except in the case of an assignment to an Affiliate of the
Lender or an Approved Fund, the Borrower Representative must give its prior
written consent to such assignment (which consent shall not be unreasonably
withheld; provided that the Borrower Representative shall be deemed to have
consented to any such assignment unless it shall object thereto by written
notice to the Lender within five Business Days after having received notice
thereof); and provided further that no consent of the Borrower Representative
shall be required if an Event of Default has occurred and is continuing. Subject
to notification of an assignment, the assignee shall be a party hereto and, to
the extent of the interest assigned, have the rights and obligations of the
Lender under this Agreement, and the Lender shall, to the extent of the interest
assigned, be released from its obligations under this Agreement (and, in the
case of an assignment covering all of the Lender’s rights and obligations under
this Agreement, the Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 2.14, 2.15, 2.16 and 8.03). Each
Borrower and each other Loan Party hereto hereby agrees to execute any amendment
and/or any other document that may be necessary to effectuate such an
assignment, including an amendment to this Agreement to provide for multiple
lenders and an administrative agent to act on behalf of such lenders. Any
assignment or transfer by the Lender of rights or obligations under this
Agreement that does not comply with this paragraph shall be treated for purposes
of this Agreement as a sale by the Lender of a participation in such rights and
obligations in accordance with paragraph (c) of this Section.
For the purposes of this Section 8.04(b), the terms “Approved Fund” and
“Ineligible Institution” have the following meanings:

“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) the Lender, (b) an Affiliate of the Lender or (c) an entity or an
Affiliate of an entity that administers or manages the Lender.

“Ineligible Institution” means a (a) natural person, (b) holding company,
investment vehicle or trust for, or owned and operated for the primary benefit
of, a natural person or relative(s) thereof; provided that, with respect to
clause (b), such holding company, investment vehicle or trust shall not
constitute an Ineligible Institution if it (x) has not been established for the
primary purpose of acquiring any Loans or Commitments, (y) is managed by a
professional advisor, who is not such natural person or a relative thereof,
having significant experience in the business of making or purchasing commercial
loans, and (z) has assets greater than $25,000,000 and a significant part of its
activities consist of making or purchasing commercial loans and similar
extensions of credit in the ordinary course of its business, or (c) a Loan Party
or a Subsidiary or other Affiliate of a Loan Party.

(c)    The Lender may, without the consent of, or notice to, the Borrowers, sell
participations to one or more banks or other entities other than an Ineligible
Institution (a “Participant”) in all or a portion of the Lender’s rights and
obligations under this Agreement (including all or a portion of its Commitment
and/or the Loans owing to it); provided that (i) the Lender’s obligations under
this Agreement shall remain unchanged, (ii) the Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Borrowers shall continue to deal solely and directly with the
Lender in connection with the Lender’s rights and obligations under this
Agreement. Subject to paragraph (d) of this Section, the Borrowers agree that
each Participant shall be entitled to the benefits of Sections 2.14, 2.15 and
2.16 (subject to the requirements and limitations therein) to the same extent as
if it were the Lender and had acquired its interest by assignment pursuant to
paragraph (b) of this Section; provided that such Participant shall not be
entitled to receive any greater payment under Section 2.14 or 2.16, with respect
to any participation, than its participating Lender would have been entitled to
receive, except to the extent such

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entitlement to receive a greater payment results from a Change in Law that
occurs after the Participant acquired the applicable participation.
To the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 8.08 as though it were a Lender. If the Lender shall sell a
participation, it shall, acting solely for this purpose as a non-fiduciary agent
of the Borrowers, maintain a register on which it enters the name and address of
each Participant and the principal amounts (and stated interest) of each
Participant’s interest in the Loans or other obligations under this Agreement or
any other Loan Document (the “Participant Register”); provided that the Lender
shall have no obligation to disclose all or any portion of the Participant
Register (including the identity of any Participant or any information relating
to a Participant’s interest in any Commitment, Loans, Letters of Credit or its
other obligations under any Loan Document) to any Person except to the extent
that such disclosure is necessary to establish that such Commitment, Loan,
Letter of Credit or other obligation is in registered form under Section
5f.103-1(c) of the U.S. Treasury Regulations. The entries in the Participant
Register shall be conclusive absent manifest error, and the Lender shall treat
each Person whose name is recorded in the Participant Register as the owner of
such participation for all purposes of this Agreement notwithstanding any notice
to the contrary.

(d)    The 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 the
Lender, including without limitation 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 the Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for the Lender
as a party hereto.

SECTION 8.05.    Survival. All covenants, agreements, representations and
warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement or any other Loan Document 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 the Lender may have had notice or
knowledge of any Event of Default or incorrect representation or warranty at the
time any credit is extended hereunder, and shall continue in full force and
effect as long as the principal of or any accrued interest on any Loan or any
fee or any other amount payable under this Agreement is outstanding and unpaid
or any Letter of Credit is outstanding and so long as the Commitment has not
expired or terminated. The provisions of Sections 2.14, 2.15, 2.16 and Article
VIII shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Letters of Credit and the Commitment
or the termination of this Agreement or any other Loan Document or any provision
hereof or thereof.

SECTION 8.06.    Counterparts; Integration; Effectiveness; Electronic Execution.
(a) 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 Lender 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 shall become
effective when it shall have been executed by the Lender and when the Lender
shall have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
(b)    Delivery of an executed counterpart of a signature page of this Agreement
by telecopy, emailed pdf. or any other electronic means that reproduces an image
of the actual executed signature page shall be effective as delivery of a
manually executed counterpart of this Agreement. The words “execution,”
“signed,” “signature,” “delivery,” and words of like import in or relating to
any document to be signed in connection with this Agreement and the transactions
contemplated hereby or thereby shall be deemed to include Electronic Signatures,
deliveries or the keeping of records in electronic form, each of which shall be
of the same legal effect, validity or

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enforceability as a manually executed signature, physical delivery thereof or
the use of a paper-based recordkeeping system, as the case may be, to the extent
and as provided for in any applicable law, including the Federal Electronic
Signatures in Global and National Commerce Act, the New York State Electronic
Signatures and Records Act, or any other similar state laws based on the Uniform
Electronic Transactions Act.
SECTION 8.07.    Severability. Any provision of any Loan Document held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions thereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 8.08.    Right of Set off. If an Event of Default shall have occurred
and be continuing, the Lender and each of its Affiliates is hereby 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 the Lender or such Affiliate to or for the credit or the account of any
Borrower or Loan Guarantor against any and all of the Secured Obligations held
by the Lender or such Affiliate, irrespective of whether or not the Lender shall
have made any demand under the Loan Documents and although such obligations may
be contingent or unmatured or are owed to a branch office or Affiliate of the
Lender different from the branch office or Affiliate holding such deposit or
obligated on such indebtedness. The rights of the Lender and its Affiliates
under this Section are in addition to other rights and remedies (including other
rights of setoff) that the Lender and its Affiliates may have.

SECTION 8.09.    Governing Law; Jurisdiction; Consent to Service of Process. (a)
The Loan Documents (other than those containing a contrary express choice of law
provision) shall be governed by and construed in accordance with the internal
laws and not the law of conflicts of the Governing State, but giving effect to
federal laws applicable to national banks.
(b)    Each Loan Party hereby irrevocably and unconditionally submits, for
itself and its property, to the exclusive jurisdiction of any U.S. federal or
Governing State court sitting in the Primary City, and any appellate court from
any thereof, in any action or proceeding arising out of or relating to any Loan
Documents, the transactions relating hereto or thereto, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may (and any such claims, cross-claims or third party claims brought
against the Lender or any of its Related Parties may only) be heard and
determined in the Governing State or, to the extent permitted by applicable law,
in such federal court. Each of the parties hereto agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
applicable law. Nothing in this Agreement or any other Loan Document shall
affect any right that the Lender may otherwise have to bring any action or
proceeding relating to this Agreement or any other Loan Document against any
Loan Party or its properties in the courts of any jurisdiction.
(c)    Each Loan Party hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or any other Loan Document in any
court referred to in paragraph (b) of this Section. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.
(d)    Each party to this Agreement irrevocably consents to service of process
in the manner provided for notices in Section 8.01. Nothing in this Agreement or
any other Loan Document will affect the right of any party to this Agreement to
serve process in any other manner permitted by law.

SECTION 8.10.    WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT,

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ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY
(WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A)
CERTIFIES THAT NO REPRESENTATIVE OR OTHER AGENT (INCLUDING ANY ATTORNEY) OF ANY
OTHER PARTY 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 8.11.    Headings. Article and Section headings and the Table of
Contents used 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 8.12.    Confidentiality. The Lender 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 Governmental
Authority (including any self-regulatory authority, such as the National
Association of Insurance Commissioners), (c) to the extent required by any
Requirement of Law or by any subpoena or similar legal process, (d) to any other
party to this Agreement, (e) in connection with the exercise of any remedies
under this Agreement or any other Loan Document or any suit, action or
proceeding relating to this Agreement or any other Loan Document or the
enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to (i)
any assignee of or Participant in, or any prospective assignee of or Participant
in, any of its rights or obligations under this Agreement or (ii) any actual or
prospective counterparty (or its advisors) to any swap or derivative transaction
relating to the Loan Parties and their obligations, (g) with the consent of the
Borrower Representative, (h) to holders of Equity Interests in a Borrower, (i)
to any Person providing a Guarantee of all or any portion of the Secured
Obligations or (j) to the extent such Information (i) becomes publicly available
other than as a result of a breach of this Section or (ii) becomes available to
the Lender on a non-confidential basis from a source other than the Borrowers.
For the purposes of this Section, “Information” means all information received
from any Borrower relating to the Borrowers or their business, other than any
such information that is available to the Lender on a non-confidential basis
prior to disclosure by the Borrowers; provided that, in the case of information
received from the Borrowers 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 8.13.    Nonreliance; Violation of Law. The Lender hereby represents
that it is not relying on or looking to any margin stock for the repayment of
the Borrowings provided for herein. Anything contained in this Agreement to the
contrary notwithstanding, the Lender shall not be obligated to extend credit to
the Borrowers in violation of any Requirement of Law.

SECTION 8.14.    USA PATRIOT Act. The Lender is subject to the requirements of
the USA PATRIOT Act and hereby notifies each Loan Party that, pursuant to the
requirements of the USA PATRIOT Act, it is required to obtain, verify and record
information that identifies such Loan Party, which information includes the name
and address of such Loan Party and other information that will allow the Lender
to identify such Loan Party in accordance with the USA PATRIOT Act.

SECTION 8.15.    Disclosure. Each Loan Party hereby acknowledges and agrees that
the Lender and/or its Affiliates from time to time may hold investments in, make
other loans to or have other relationships with any of the Loan Parties and
their respective Affiliates.

SECTION 8.16.    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 which are treated

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as interest on such Loan under applicable law (collectively the “Charges”),
shall exceed the maximum lawful rate (the “Maximum Rate”) which may be
contracted for, charged, taken, received or reserved by the Lender 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 the Lender in respect of other Loans or periods shall be
increased (but not above the Maximum Rate therefor) until such cumulated amount,
together with interest thereon at the NYFRB Rate to the date of repayment, shall
have been received by the Lender.

SECTION 8.17.    Marketing Consent. The Borrowers hereby authorize the Lender,
at its sole expense, but without any prior approval by the Borrowers, to publish
such tombstones and give such other publicity to this Agreement as it may from
time to time determine in its sole discretion. The foregoing authorization shall
remain in effect unless and until the Borrowers notify the Lender in writing
that such authorization is revoked.

SECTION 8.18.    Joint and Several. Each Borrower hereby unconditionally and
irrevocably agrees it is jointly and severally liable to the Lender for the
Secured Obligations. In furtherance thereof, each Borrower agrees that wherever
in this Agreement it is provided that a Borrower is liable for a payment, such
obligation is the joint and several obligation of each Borrower. Each Borrower
acknowledges and agrees that its joint and several liability under this
Agreement and the Loan Documents is absolute and unconditional and shall not in
any manner be affected or impaired by any acts or omissions whatsoever by the
Lender or any other Person. Each Borrower’s liability for the Secured
Obligations shall not in any manner be impaired or affected by who receives or
uses the proceeds of the credit extended hereunder or for what purposes such
proceeds are used, and each Borrower waives notice of borrowing requests issued
by, and loans or other extensions of credit made to, other Borrowers. Each
Borrower hereby agrees not to exercise or enforce any right of exoneration,
contribution, reimbursement, recourse or subrogation available to such Borrower
against any party liable for payment under this Agreement and the Loan Documents
unless and until the Lender has been paid in full and all of the Secured
Obligations are satisfied and discharged following termination or expiration of
all commitments of the Lender to extend credit to the Borrowers. Each Borrower’s
joint and several liability hereunder with respect to the Secured Obligations
shall, to the fullest extent permitted by applicable law, be the unconditional
liability of such Borrower irrespective of (i) the validity, enforceability,
avoidance or subordination of any of the Secured Obligations or of any other
document evidencing all or any part of the Secured Obligations, (ii) the absence
of any attempt to collect any of the Secured Obligations from any other Loan
Party or any Collateral or other security therefor, or the absence of any other
action to enforce the same, (iii) the amendment, modification, waiver, consent,
extension, forbearance or granting of any indulgence by the Lender with respect
to any provision of any instrument executed by any other Loan Party evidencing
or securing the payment of any of the Secured Obligations, or any other
agreement now or hereafter executed by any other Loan Party and delivered to the
Lender, (iv) the failure by the Lender to take any steps to perfect or maintain
the perfected status of its Lien upon, or to preserve its rights to, any of the
Collateral or other security for the payment or performance of any of the
Secured Obligations or the Lender’s release of any Collateral or of its Liens
upon any Collateral, (v) the release or compromise, in whole or in part, of the
liability of any other Loan Party for the payment of any of the Secured
Obligations, (vi) any increase in the amount of the Secured Obligations beyond
any limits imposed herein or in the amount of any interest, fees or other
charges payable in connection therewith, in each case, if consented to by any
other Borrower, or any decrease in the same, or (vii) any other circumstance
that might constitute a legal or equitable discharge or defense of any Loan
Party. After the occurrence and during the continuance of any Event of Default,
the Lender may proceed directly and at once, without notice to any Borrower,
against any or all of Loan Parties to collect and recover all or any part of the
Secured Obligations, without first proceeding against any other Loan Party or
against any Collateral or other security for the payment or performance of any
of the Secured Obligations, and each Borrower waives any provision that might
otherwise require the Lender under applicable law to pursue or exhaust its
remedies against any Collateral or other Loan Party before pursuing such
Borrower or its property. Each Borrower consents and agrees that the Lender
shall be under no obligation to marshal any assets in favor of any Loan Party or
against or in payment of any or all of the Secured Obligations.

SECTION 8.19.    No Fiduciary Duty, etc. Each Borrower acknowledges and agrees,
and acknowledges its subsidiaries’ understanding, that Lender will not have any
obligations except those obligations

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expressly set forth herein and in the other Loan Documents and Lender is acting
solely in the capacity of an arm’s length contractual counterparty to each
Borrower with respect to the Loan Documents and the transaction contemplated
therein and not as a financial advisor or a fiduciary to, or an agent of, any
Borrower or any other person. Each Borrower agrees that it will not assert any
claim against the Lender based on an alleged breach of fiduciary duty by the
Lender in connection with this Agreement and the transactions contemplated
hereby. Additionally, each Borrower acknowledges and agrees that the Lender is
not advising any Borrower as to any legal, tax, investment, accounting,
regulatory or any other matters in any jurisdiction. Each Borrower shall consult
with its own advisors concerning such matters and shall be responsible for
making its own independent investigation and appraisal of the transactions
contemplated hereby, and the Lender shall have no responsibility or liability to
any Borrower with respect thereto. Each Borrower further acknowledges and
agrees, and acknowledges its subsidiaries’ understanding, that the Lender,
together with its affiliates, is a full service securities or banking firm
engaged in securities trading and brokerage activities as well as providing
investment banking and other financial services. In the ordinary course of
business, the Lender may provide investment banking and other financial services
to, and/or acquire, hold or sell, for its own accounts and the accounts of
customers, equity, debt and other securities and financial instruments
(including bank loans and other obligations) of, any Borrower and other
companies with which any Borrower may have commercial or other relationships.
With respect to any securities and/or financial instruments so held by the
Lender or any of its customers, all rights in respect of such securities and
financial instruments, including any voting rights, will be exercised by the
holder of the rights, in its sole discretion. In addition, each Borrower
acknowledges and agrees, and acknowledges its subsidiaries’ understanding, that
the Lender and its affiliates may be providing debt financing, equity capital or
other services (including financial advisory services) to other companies in
respect of which you may have conflicting interests regarding the transactions
described herein and otherwise. The Lender will not use confidential information
obtained from any Borrower by virtue of the transactions contemplated by the
Loan Documents or its other relationships with such Borrower in connection with
the performance by the Lender of services for other companies, and the Lender
will not furnish any such information to other companies. Each Borrower also
acknowledges that the Lender has no obligation to use in connection with the
transactions contemplated by the Loan Documents, or to furnish to any Borrower,
confidential information obtained from other companies.

ARTICLE VIII    
Loan Guaranty

SECTION 9.01.    Guaranty. Each Loan Guarantor (other than those that have
delivered a separate Guaranty) hereby agrees that it is jointly and severally
liable for, and, as a primary obligor and not merely as surety, absolutely,
unconditionally and irrevocably guarantees to the Secured Parties, the prompt
payment when due, whether at stated maturity, upon acceleration or otherwise,
and at all times thereafter, of the Secured Obligations and all costs and
expenses including, without limitation, all court costs and attorneys’ and
paralegals’ fees (including allocated costs of in-house counsel and paralegals)
and expenses paid or incurred by the Lender in endeavoring to collect all or any
part of the Secured Obligations from, or in prosecuting any action against, any
Borrower, any Loan Guarantor or any other guarantor of all or any part of the
Secured Obligations (such costs and expenses, together with the Secured
Obligations, collectively the “Guaranteed Obligations”); provided, however, that
the definition of “Guaranteed Obligations” shall not create any guarantee by any
Loan Guarantor of (or grant of security interest by any Loan Guarantor to
support, as applicable) any Excluded Swap Obligations of such Loan Guarantor for
purposes of determining any obligations of any Loan Guarantor. Each Loan
Guarantor further agrees that the Guaranteed Obligations may be extended or
renewed in whole or in part without notice to or further assent from it, and
that it remains bound upon its guarantee notwithstanding any such extension or
renewal. All terms of this Loan Guaranty apply to and may be enforced by or on
behalf of any domestic or foreign branch or Affiliate of the Lender that
extended any portion of the Guaranteed Obligations.

SECTION 9.02.    Guaranty of Payment. This Loan Guaranty is a guaranty of
payment and not of collection. Each Loan Guarantor waives any right to require
the Lender to sue any Borrower, any Loan Guarantor, any other guarantor of, or
any other Person obligated for all or any part of the Guaranteed Obligations
(each, an “Obligated Party”), or otherwise to enforce its payment against any
collateral securing all or any part of the Guaranteed Obligations.

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SECTION 9.03.    No Discharge or Diminishment of Loan Guaranty. (a) Except as
otherwise provided for herein, the obligations of each Loan Guarantor hereunder
are unconditional and absolute and not subject to any reduction, limitation,
impairment or termination for any reason (other than Payment in Full of the
Guaranteed Obligations), including: (i) any claim of waiver, release, extension,
renewal, settlement, surrender, alteration, or compromise of any of the
Guaranteed Obligations, by operation of law or otherwise; (ii) any change in the
corporate existence, structure or ownership of any Borrower or any other
Obligated Party liable for any of the Guaranteed Obligations; (iii) any
insolvency, bankruptcy, reorganization or other similar proceeding affecting any
Obligated Party, or their assets or any resulting release or discharge of any
obligation of any Obligated Party; or (iv) the existence of any claim, setoff or
other rights which any Loan Guarantor may have at any time against any Obligated
Party, the Lender, or any other Person, whether in connection herewith or in any
unrelated transactions.
(b)    The obligations of each Loan Guarantor hereunder are not subject to any
defense or setoff, counterclaim, recoupment, or termination whatsoever by reason
of the invalidity, illegality, or unenforceability of any of the Guaranteed
Obligations or otherwise, or any provision of applicable law or regulation
purporting to prohibit payment by any Obligated Party, of the Guaranteed
Obligations or any part thereof.
(c)    Further, the obligations of any Loan Guarantor hereunder are not
discharged or impaired or otherwise affected by: (i) the failure of the Lender
to assert any claim or demand or to enforce any remedy with respect to all or
any part of the Guaranteed Obligations; (ii) any waiver or modification of or
supplement to any provision of any agreement relating to the Guaranteed
Obligations; (iii) any release, non-perfection, or invalidity of any indirect or
direct security for the obligations of any Borrower for all or any part of the
Guaranteed Obligations or any obligations of any other Obligated Party liable
for any of the Guaranteed Obligations; (iv) any action or failure to act by the
Lender with respect to any collateral securing any part of the Guaranteed
Obligations; or (v) any default, failure or delay, willful or otherwise, in the
payment or performance of any of the Guaranteed Obligations, or any other
circumstance, act, omission or delay that might in any manner or to any extent
vary the risk of such Loan Guarantor or that would otherwise operate as a
discharge of any Loan Guarantor as a matter of law or equity (other than the
Payment in Full of the Guaranteed Obligations).

SECTION 9.04.    Defenses Waived. To the fullest extent permitted by applicable
law, each Loan Guarantor hereby waives any defense based on or arising out of
any defense of any Borrower or any Loan Guarantor or the unenforceability of all
or any part of the Guaranteed Obligations from any cause, or the cessation from
any cause of the liability of any Borrower, any Loan Guarantor, or any other
Obligated Party other than the Payment in Full of the Guaranteed Obligations.
Without limiting the generality of the foregoing, each Loan Guarantor
irrevocably waives acceptance hereof, presentment, demand, protest and, to the
fullest extent permitted by law, any notice not provided for herein, as well as
any requirement that at any time any action be taken by any Person against any
Obligated Party, or any other Person. Each Loan Guarantor confirms that it is
not a surety under any state law and shall not raise any such law as a defense
to its obligations hereunder. The Lender may, at its election, foreclose on any
Collateral held by it by one or more judicial or nonjudicial sales, accept an
assignment of any such Collateral in lieu of foreclosure or otherwise act or
fail to act with respect to any collateral securing all or a part of the
Guaranteed Obligations, compromise or adjust any part of the Guaranteed
Obligations, make any other accommodation with any Obligated Party or exercise
any other right or remedy available to it against any Obligated Party, without
affecting or impairing in any way the liability of such Loan Guarantor under
this Loan Guaranty except to the extent the Guaranteed Obligations have been
Paid in Full. To the fullest extent permitted by applicable law, each Loan
Guarantor waives any defense arising out of any such election even though that
election may operate, pursuant to applicable law, to impair or extinguish any
right of reimbursement or subrogation or other right or remedy of any Loan
Guarantor against any Obligated Party or any security.

SECTION 9.05.    Rights of Subrogation. No Loan Guarantor will assert any right,
claim or cause of action, including, without limitation, a claim of subrogation,
contribution or indemnification that it has against any Obligated Party, or any
collateral, until the Loan Parties and the Loan Guarantors have fully performed
all their obligations to the Lender.

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SECTION 9.06.    Reinstatement; Stay of Acceleration. If at any time any payment
of any portion of the Guaranteed Obligations (including a payment effected
through exercise of a right of setoff) is rescinded or must otherwise be
restored or returned upon the insolvency, bankruptcy, or reorganization of any
Obligated Party or otherwise (including pursuant to any settlement entered into
by a Secured Party in its discretion), each Loan Guarantor’s obligations under
this Loan Guaranty with respect to that payment shall be reinstated at such time
as though the payment had not been made and whether or not the Lender is in
possession of this Loan Guaranty. If acceleration of the time for payment of any
of the Guaranteed Obligations is stayed upon the insolvency, bankruptcy or
reorganization of any Obligated Party, all such amounts otherwise subject to
acceleration under the terms of any agreement relating to the Guaranteed
Obligations shall nonetheless be payable by the Loan Guarantors forthwith on
demand by the Lender.

SECTION 9.07.    Information. Each Loan Guarantor assumes all responsibility for
being and keeping itself informed of each Obligated Party’s financial condition
and assets, and of all other circumstances bearing upon the risk of nonpayment
of the Guaranteed Obligations and the nature, scope and extent of the risks that
each Loan Guarantor assumes and incurs under this Loan Guaranty, and agrees that
the Lender shall not have any duty to advise any Loan Guarantor of information
known to it regarding those circumstances or risks.

SECTION 9.08.    Termination. The Lender may continue to make loans or extend
credit to the Borrowers based on this Loan Guaranty until five days after it
receives written notice of termination from any Loan Guarantor. Notwithstanding
receipt of any such notice, each Loan Guarantor will continue to be liable to
the Lender for any Guaranteed Obligations created, assumed or committed to prior
to the fifth day after receipt of the notice, and all subsequent renewals,
extensions, modifications and amendments with respect to, or substitutions for,
all or any part of such Guaranteed Obligations. Nothing in this Section 9.08
shall be deemed to constitute a waiver of, or eliminate, limit, reduce or
otherwise impair any rights or remedies the Lender may have in respect of, any
Default or Event of Default that shall exist under clause (o) of Article VII
hereof as a result of any such notice of termination.

SECTION 9.09.    Taxes. Each payment of the Guaranteed Obligations will be made
by each Loan Guarantor without withholding for any Taxes, unless such
withholding is required by law. If any Loan Guarantor determines, in its sole
discretion exercised in good faith, that it is so required to withhold Taxes,
then such Loan Guarantor may so withhold and shall timely pay the full amount of
withheld Taxes to the relevant Governmental Authority in accordance with
applicable law. If such Taxes are Indemnified Taxes, then the amount payable by
such Loan Guarantor shall be increased as necessary so that, net of such
withholding (including such withholding applicable to additional amounts payable
under this Section), the Lender receives the amount it would have received had
no such withholding been made.

SECTION 9.10.    Maximum Liability. Notwithstanding any other provision of this
Loan Guaranty, the amount guaranteed by each Loan Guarantor hereunder shall be
limited to the extent, if any, required so that its obligations hereunder shall
not be subject to avoidance under Section 548 of the Bankruptcy Code or under
any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent
Conveyance Act, Uniform Voidable Transactions Act or similar statute or common
law. In determining the limitations, if any, on the amount of any Loan
Guarantor’s obligations hereunder pursuant to the preceding sentence, it is the
intention of the parties hereto that any rights of subrogation, indemnification
or contribution which such Loan Guarantor may have under this Loan Guaranty, any
other agreement or applicable law shall be taken into account.

SECTION 9.11.    Contribution.
(a)    To the extent that any Loan Guarantor shall make a payment under this
Loan Guaranty (a “Guarantor Payment”) which, taking into account all other
Guarantor Payments then previously or concurrently made by any other Loan
Guarantor, exceeds the amount which otherwise would have been paid by or
attributable to such Loan Guarantor if each Loan Guarantor had paid the
aggregate Guaranteed Obligations satisfied by such Guarantor Payment in the same
proportion as such Loan Guarantor’s “Allocable Amount” (as defined below) (as
determined immediately prior to such Guarantor Payment) bore to the aggregate
Allocable Amounts of each of the Loan

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Guarantors as determined immediately prior to the making of such Guarantor
Payment, then, following indefeasible payment in full in cash of the Guarantor
Payment and the Payment in Full of the Guaranteed Obligations and the
termination of this Agreement, such Loan Guarantor shall be entitled to receive
contribution and indemnification payments from, and be reimbursed by, each other
Loan Guarantor for the amount of such excess, pro rata based upon their
respective Allocable Amounts in effect immediately prior to such Guarantor
Payment.
(b)    As of any date of determination, the “Allocable Amount” of any Loan
Guarantor shall be equal to the excess of the fair saleable value of the
property of such Loan Guarantor over the total liabilities of such Loan
Guarantor (including the maximum amount reasonably expected to become due in
respect of contingent liabilities, calculated, without duplication, assuming
each other Loan Guarantor that is also liable for such contingent liability pays
its ratable share thereof), giving effect to all payments made by other Loan
Guarantors as of such date in a manner to maximize the amount of such
contributions.
(c)    This Section 9.11 is intended only to define the relative rights of the
Loan Guarantors, and nothing set forth in this Section 9.11 is intended to or
shall impair the obligations of the Loan Guarantors, jointly and severally, to
pay any amounts as and when the same shall become due and payable in accordance
with the terms of this Loan Guaranty.
(d)    The parties hereto acknowledge that the rights of contribution and
indemnification hereunder shall constitute assets of the Loan Guarantor or Loan
Guarantors to which such contribution and indemnification are owing.
(e)    The rights of the indemnifying Loan Guarantors against other Loan
Guarantors under this Section 9.11 shall be exercisable upon the Payment in Full
of the Guaranteed Obligations and the termination of this Agreement.

SECTION 9.12.    Liability Cumulative. The liability of each Loan Party as a
Loan Guarantor under this Article IX is in addition to and shall be cumulative
with all liabilities of each Loan Party to the Lender under this Agreement and
the other Loan Documents to which such Loan Party is a party or in respect of
any obligations or liabilities of the other Loan Parties, without any limitation
as to amount, unless the instrument or agreement evidencing or creating such
other liability specifically provides to the contrary.

SECTION 9.13.    Keepwell. Each Qualified ECP Guarantor hereby jointly and
severally absolutely, unconditionally and irrevocably undertakes to provide such
funds or other support as may be needed from time to time by each other Loan
Party to honor all of its obligations under this Guarantee in respect of a Swap
Obligation (provided, however, that each Qualified ECP Guarantor shall only be
liable under this Section 9.13 for the maximum amount of such liability that can
be hereby incurred without rendering its obligations under this Section 9.13 or
otherwise under this Loan Guaranty voidable under applicable law relating to
fraudulent conveyance or fraudulent transfer, and not for any greater amount).
Except as otherwise provided herein, the obligations of each Qualified ECP
Guarantor under this Section 9.13 shall remain in full force and effect until
the termination of all Swap Obligations. Each Qualified ECP Guarantor intends
that this Section 9.13 constitute, and this Section 9.13 shall be deemed to
constitute, a “keepwell, support, or other agreement” for the benefit of each
other Loan Party for all purposes of Section 1a(18)(A)(v)(II) of the Commodity
Exchange Act.

ARTICLE IX    

The Borrower Representative

SECTION 10.01. Appointment; Nature of Relationship. The Company is hereby
appointed by each of the Borrowers as its contractual representative (herein
referred to as the “Borrower Representative”) hereunder and under each other
Loan Document, and each of the Borrowers irrevocably authorizes the Borrower
Representative

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to act as the contractual representative of such Borrower with the rights and
duties expressly set forth herein and in the other Loan Documents. The Borrower
Representative agrees to act as such contractual representative upon the express
conditions contained in this Article X. Additionally, the Borrowers hereby
appoint the Borrower Representative as their agent to receive all of the
proceeds of the Loans in the Funding Account(s), at which time the Borrower
Representative shall promptly disburse such Loans to the appropriate Borrower,
provided that, in the case of a Revolving Loan, such amount shall not exceed
such Borrower’s Availability. The Lender and its respective officers, directors,
agents or employees, shall not be liable to the Borrower Representative or any
Borrower for any action taken or omitted to be taken by the Borrower
Representative or the Borrowers pursuant to this Section 10.01.

SECTION 10.02. Powers. The Borrower Representative shall have and may exercise
such powers under the Loan Documents as are specifically delegated to the
Borrower Representative by the terms of each thereof, together with such powers
as are reasonably incidental thereto. The Borrower Representative shall have no
implied duties to the Borrowers, or any obligation to the Lender to take any
action thereunder except any action specifically provided by the Loan Documents
to be taken by the Borrower Representative.

SECTION 10.03. Employment of Agents. The Borrower Representative may execute any
of its duties as the Borrower Representative hereunder and under any other Loan
Document by or through authorized officers.

SECTION 10.04. Notices. Each Borrower shall immediately notify the Borrower
Representative of the occurrence of any Default hereunder referring to this
Agreement describing such Default and stating that such notice is a “notice of
default.” In the event that the Borrower Representative receives such a notice,
the Borrower Representative shall give prompt notice thereof to the Lender. Any
notice provided to the Borrower Representative hereunder shall constitute notice
to each Borrower on the date received by the Borrower Representative.

SECTION 10.05. Successor Borrower Representative. Upon the prior written consent
of the Lender, the Borrower Representative may resign at any time, such
resignation to be effective upon the appointment of a successor Borrower
Representative.

SECTION 10.06. Execution of Loan Documents; Borrowing Base Certificate. The
Borrowers hereby empower and authorize the Borrower Representative, on behalf of
the Borrowers, to execute and deliver to the Lender the Loan Documents and all
related agreements, certificates, documents, or instruments as shall be
necessary or appropriate to effect the purposes of the Loan Documents, including
without limitation, the Borrowing Base Certificate and the Compliance
Certificates. Each Borrower agrees that any action taken by the Borrower
Representative or the Borrowers in accordance with the terms of this Agreement
or the other Loan Documents, and the exercise by the Borrower Representative of
its powers set forth therein or herein, together with such other powers that are
reasonably incidental thereto, shall be binding upon all of the Borrowers.

SECTION 10.07. Reporting. Each Borrower hereby agrees that such Borrower shall
furnish promptly after each fiscal month to the Borrower Representative a copy
of its Borrowing Base Certificate and any other certificate or report required
hereunder or requested by the Borrower Representative on which the Borrower
Representative shall rely to prepare the Borrowing Base Certificate and
Compliance Certificates required pursuant to the provisions of this Agreement.

    

ARTICLE X    
Warrant of Attorney
Each Borrower authorizes any attorney at law to appear in any court of record in
the State of Ohio or in any other state or territory of the United States of
America after the loans become due, whether by acceleration or otherwise, to
waive the issuing and service of process, and to confess judgment against such
Borrower in favor of the Lender for the amount then appearing due on the Loans,
together with interest, expenses, the costs of suit and reasonable counsel fees,
and thereupon to release and waive all errors and all rights of appeal and stays
of execution. Such authority shall not be exhausted by one exercise, but
judgment may be confessed from time to time as any sums and/

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or costs, expenses or reasonable counsel fees shall be due, by filing an
original or a photostatic copy of this Agreement. Each Borrower waives any
conflict of interest that an attorney hired by the Lender may have in acting on
such Borrower’s behalf in confessing judgment against such Borrower while such
attorney is retained by the Lender. Each Borrower expressly consents to such
attorney acting for such Borrower in confessing judgment and to such attorney’s
fee being paid by the Lender or deducted from the proceeds of collection of the
notes or collateral security therefor.

(Signature Page Follows)

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

BORROWERS:

SIFCO INDUSTRIES, INC.

By:_/s/ Thomas Kubera___________________________
Name: Tom Kubera
Title: Interim Chief Financial Officer

T & W FORGE, LLC

By:_/s/ Thomas Kubera___________________________
Name: Tom Kubera
Title: Treasurer

QUALITY ALUMINUM FORGE, LLC

By:_/s/ Thomas Kubera___________________________
Name: Tom Kubera
Title: Treasurer

Signature Page to Credit Agreement

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

 
LENDER:

JPMORGAN CHASE BANK, N.A.

By: /s/ Matthew McLuckey______________________________
Name: Matthew McLuckey
Title: Authorized Officer

Signature Page to Credit Agreement

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Definitions Schedule

The following terms shall have the meanings given to them in the Terms Schedule
attached hereto: “Annual Administration Fee”, “Applicable Margin”, “Availability
Block”, “Borrowers’ Accountants”, “Cash Dominion Period”, “Closing Fee”,
“Governing State”, “Investment Limit”, “Judgment Amount”, “LC Exposure Amount”,
“Maturity Date”, “Primary City”, “Purchase Money Debt Limit”, “Reference Fiscal
Year”, “Subordinated Debt Limit”, and “Unsecured Debt Limit”.

The following terms shall have the meanings assigned to them in the Borrowing
Base Schedule attached hereto. “Borrowing Base”, “Eligible Accounts”, and
“Eligible Inventory”.

The following terms shall have the meaning given to them in the Security
Agreement: “Collateral Access Agreement”, “Collateral Deposit Account”,
“Collection Account”, “Control Agreement”, and “Receivables”.

The following terms shall have the meaning given to them in the UCC: “Account”,
“Document”, “Equipment”, and “Inventory”.

“Account Debtor” means any Person obligated on an Account.

“Acquisition” means any transaction, or any series of related transactions,
consummated on or after the Effective Date, by which any Loan Party (a) acquires
any going business or all or substantially all of the assets of any Person,
whether through purchase of assets, merger or otherwise or (b) directly or
indirectly acquires (in one transaction or as the most recent transaction in a
series of transactions) at least a majority (in number of votes) of the Equity
Interests of a Person which has ordinary voting power for the election of
directors or other similar management personnel of a Person (other than Equity
Interests having such power only by reason of the happening of a contingency) or
a majority of the outstanding Equity Interests of a Person.

“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any
Interest Period or for any CBFR Borrowing, 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 Rate.

“Adjusted One Month LIBOR Rate” means, for any day, an interest rate per annum
equal to the sum of (i) 2.50% plus (ii) the Adjusted LIBO Rate for a one-month
interest period on such day (or if such day is not a Business Day, the
immediately preceding Business Day); provided that, for the avoidance of doubt,
the Adjusted LIBO Rate for any day shall be based on the LIBO Screen Rate at
approximately 11:00 a.m. London time on such day; provided further, that, if the
LIBO Screen Rate at such time shall be less than zero, such rate shall be deemed
to be zero for purposes of this Agreement.

“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 the specified Person.

“Anti-Corruption Laws” means all laws, rules, and regulations of any
jurisdiction applicable to any of the Borrowers or any of their Subsidiaries
from time to time concerning or relating to bribery or corruption.

“Authorized Agent” means, with respect to any Loan Party or any Subsidiary
thereof, an agent of such Person that is also controlled by such Person or for
whose actions such Person is liable.
    
“Availability” means, at any time, an amount equal to (a) the lesser of (i) the
Revolving Commitment, minus the Availability Block, if applicable, and (ii) the
Borrowing Base minus (b) the Revolving Exposure.

“Availability Period” means the period from and including the Effective Date to
but excluding the earlier of the Maturity Date and the date of termination of
the Revolving Commitment.

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“Available Revolving Commitment” means, at any time, the Revolving Commitment
minus the Revolving Exposure.

“Banking Services” means each and any of the following bank services provided to
any Loan Party by the Lender or any of its Affiliates: (a) credit cards for
commercial customers (including, without limitation, “commercial credit cards”
and purchasing cards), (b) stored value cards, (c) merchant processing services,
and (d) treasury management services (including, without limitation, controlled
disbursement, automated clearinghouse transactions, return items, overdrafts,
cash pooling services, and interstate depository network services), and (e)
Lease Financing.

“Banking Services Obligations” means any and all obligations of the Loan
Parties, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor) in connection with Banking
Services, provided, however, Banking Services Obligations in respect of Lease
Financing shall be limited to Lease Deficiency Obligations.

“Bankruptcy Code” means Title 11 of the United States Code entitled
“Bankruptcy”, as now and hereafter in effect, or any successor statute.
    
“Bankruptcy Event” means, with respect to any Person, when such Person becomes
the subject of a voluntary or involuntary bankruptcy or insolvency proceeding,
or has had a receiver, conservator, trustee, administrator, custodian, assignee
for the benefit of creditors or similar Person charged with the reorganization
or liquidation of its business, appointed for it, or, in the good faith
determination of the Lender, has taken any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any such proceeding
or appointment or has had any order for relief in such proceeding entered in
respect thereof, provided that a Bankruptcy Event shall not result solely by
virtue of any ownership interest, or the acquisition of any ownership interest,
in such Person by a Governmental Authority or instrumentality thereof, unless
such ownership interest results in or provides such Person with immunity from
the jurisdiction of courts within the U.S. or from the enforcement of judgments
or writs of attachment on its assets or permit such Person (or such Governmental
Authority or instrumentality) to reject, repudiate, disavow or disaffirm any
contracts or agreements made by such Person.

“Beneficial Ownership Certification” means a certification regarding the
beneficial ownership as required
by the Beneficial Ownership Regulation.

“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.

“Borrower” or “Borrowers” means, individually or collectively, the Company, T &
W Forge, LLC, an Ohio limited liability company, and Quality Aluminum Forge,
LLC, an Ohio limited liability company.

“Borrower Representative” means the Company, in its capacity as contractual
representative of the Borrowers pursuant to Article X.

“Borrowing” means (a) Revolving Loans of the same Type, made, converted or
continued on the same date and, in the case of Eurodollar Loans, as to which a
single Interest Period is in effect, (b) a Protective Advance, and (c) in the
case of any other Loan made pursuant to a Rider attached hereto, any such Loan
made on the same date as any such Rider and, in the case of Eurodollar Loans, as
to which a single Interest Period is in effect.

“Borrowing Base Certificate” means a certificate, signed and certified as
accurate and complete by a Financial Officer of the Borrower Representative, in
form which is acceptable to the Lender in its sole discretion.

“Borrowing Request” means a request by the Borrower Representative for a
Revolving Borrowing in accordance with Section 2.03 or, for another Class of
Loan made pursuant to a Rider attached hereto, in accordance with such Rider.

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“Burdensome Restriction” means any consensual encumbrance or restriction of the
type described in Section 6.10.
“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 or
a Loan accruing interest at REVLIBOR30 Rate without giving effect to the proviso
contained in the definition for “REVLIBOR30 Rate”, the term “Business Day” shall
also exclude any day on which banks are not open for general business in London.
 

“Capital Lease Obligations” is defined in the Financial Covenants Schedule
attached hereto.

“CB Floating Rate” means the Prime Rate; provided that the CB Floating Rate
shall never be less than the Adjusted One Month LIBOR Rate on such day (or if
such day is not a Business Day, the immediately preceding Business Day). Any
change in the CB Floating Rate due to a change in the Prime Rate or the Adjusted
One Month LIBOR Rate shall be effective from and including the effective date of
such change in the Prime Rate or the Adjusted One Month LIBOR Rate,
respectively.

“CBFR”, when used in reference to: (a) a rate of interest, refers to the
REVLIBOR30 Rate, unless the REVLIBOR30 Rate shall not be available at such time,
then it refers to the CB Floating Rate, and (b) any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, bear interest at a
rate determined by reference to the REVLIBOR30 Rate or the CB Floating Rate.

“Change in Control” means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the SEC
thereunder as in effect on the date hereof) of Equity Interests representing
more than 50% of the aggregate ordinary voting power represented by the issued
and outstanding Equity Interests of the Company; or (b) occupation at any time
of a majority of the seats (other than vacant seats) on the board of directors
of the Company by Persons who were not (i) directors of the Company on the date
of this Agreement, nominated, appointed or approved for consideration by
shareholders for election by the board of directors of the Company, (ii)
approved by the board of directors of the Company as director candidates prior
to their election, nor (iii) appointed by directors so nominated, appointed or
approved; or (c) the Company shall cease to own, free and clear of all Liens or
other encumbrances, 100% of the outstanding voting Equity Interests of each
other Loan Party on a fully diluted basis.

“Change in Law” means the occurrence after the date of this Agreement of any of
the following: (a) the adoption of or taking effect of any law, rule, regulation
or treaty; (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation, implementation or application thereof by any
Governmental Authority; or (c) compliance by the Lender (or, for purposes of
Section 2.14(b), by any lending office of the Lender or by the Lender’s holding
company, if any) with any request, guideline, requirement or directive (whether
or not having the force of law) of any Governmental Authority made or issued
after the date of this Agreement; provided that notwithstanding anything herein
to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection
Act and all requests, rules, guidelines, requirements or directives thereunder
or issued in connection therewith or in the implementation thereof, and (y) all
requests, rules, guidelines, requirements or directives promulgated by the Bank
for International Settlements, the Basel Committee on Banking Supervision (or
any successor or similar authority) or the United States or foreign regulatory
authorities, in each case pursuant to Basel III, shall in each case be deemed to
be a “Change in Law”, regardless of the date enacted, adopted, issued or
implemented.

“City of Cleveland Indebtedness” means those certain loans from the City of
Cleveland Department of Economic Development to SIFCO in an aggregate amount not
to exceed $485,000 (of which $180,000 is to be forgiven), which Indebtedness
shall be secured by specific equipment (a 1500 ton press) owned by SIFCO and
located at 970 East 64th Street, Cleveland, Ohio 44103, shall not have any
principal maturities until at least five years after the date such loans are
made and shall be on the other terms disclosed to the Lender prior to the
Effective Date.
    

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“Class”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, is a Revolving Loan, Protective
Advance, or Loan of another Class made pursuant to a Rider attached hereto.

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

“Collateral” means any and all property owned, leased or operated by a Person
covered by the Collateral Documents and any and all other property of any Loan
Party, now existing or hereafter acquired, that may at any time be, become or
intended to be, subject to a security interest or Lien in favor of the Lender,
on behalf of the Secured Parties, to secure the Secured Obligations.

“Collateral Documents” means, collectively, the Security Agreement, any
Mortgages, and any other agreements, instruments and documents executed in
connection with this Agreement that are intended to create, perfect or evidence
Liens to secure the Secured Obligations, including, without limitation, all
other security agreements, pledge agreements, loan agreements, notes,
guarantees, subordination agreements, pledges, powers of attorney, consents,
assignments, contracts, notices, leases, financing statements and all other
written matter whether theretofore, now or hereafter executed by any Loan Party
and delivered to the Lender.

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et
seq.).

“Commitment” means the sum of the Revolving Commitment and any other commitment
to make Loans pursuant to a Rider attached hereto.

“Company” means SIFCO Industries, Inc., an Ohio corporation.

“Connection Income Taxes” means Other Connection Taxes that are imposed on or
measured by net income (however denominated) or that are franchise Taxes or
branch profits Taxes.

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

“Controlled Disbursement Account” means any account of the Borrowers maintained
with the Lender as a zero balance, cash management account pursuant to and under
any agreement between a Borrower and the Lender, as modified and amended from
time to time, and through which all disbursements of a Borrower, any Loan Party
and any designated Subsidiary of a Borrower are made and settled on a daily
basis with no uninvested balance remaining overnight.

“DDA Access Product” means the bank service provided to any Loan Party by the
Lender in its sole discretion consisting of direct access to schedule payments
from the Funding Account by electronic, internet or other access mechanisms that
may be agreed upon from time to time by the Lender and the funding of such
payments under the Loan Borrowing Option in the DDA Access Product Agreement.

“DDA Access Product Agreement” means the Lender’s Treasury Services End of Day
Investment & Loan Sweep Service Terms, as in effect on the date of this
Agreement, as the same may be amended from time to time.

“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.

“Disclosure Certificate” means the disclosure certificate prepared, executed and
delivered by the Loan Parties to the Lender.

“Disclosed Matters” means the actions, suits and proceedings and the
environmental matters disclosed in Section 3.06 of the Disclosure Certificate.

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

“Domestic Subsidiary” means a Subsidiary organized under the laws of a
jurisdiction located in the U.S.

“Dormant Subsidiary” means a Subsidiary that (a) is not the direct or indirect
equity holder of a Loan Party, (b) has aggregate assets of less than Fifty
Thousand Dollars ($50,000), (c) does not conduct any business and does not own
any asset used or needed by any Loan Party, and (d) has no direct or indirect
Subsidiaries with aggregate assets of more than Fifty Thousand Dollars
($50,000).

“ECP” means an “eligible contract participant” as defined in Section 1(a)(18) of
the Commodity Exchange Act or any regulations promulgated thereunder and the
applicable rules issued by the Commodity Futures Trading Commission and/or the
SEC.

“Effective Date” means the date on which the conditions specified in Section
4.01 are satisfied (or waived in accordance with Section 8.02).

“Electronic Signature” means an electronic sound, symbol, or process attached
to, or associated with, a contract or other record and adopted by a Person with
the intent to sign, authenticate or accept such contract or record.
“Electronic System” means any electronic system, including e-mail, e-fax, web
portal access for the Borrowers, Intralinks®, ClearPar®, Debt Domain, Syndtrak
and any other Internet or extranet-based site, whether such electronic system is
owned, operated or hosted by the Lender or any of its respective Related Parties
or any other Person, providing for access to data protected by passcodes or
other security system.
“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 (i) the environment, (ii) preservation or reclamation of natural resources,
(iii) the management, Release or threatened Release of any Hazardous Material or
(iv) health and safety matters.

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

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

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

“ERISA Affiliate” means any trade or business (whether or not incorporated)
that, together with the Borrowers, is treated as a single employer under Section
414(b) or (c) of the Code or Section 4001(14) of ERISA or, solely for purposes
of Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the 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 (other than
an event for which the 30‑day notice period is waived); (b) the failure to
satisfy the “minimum funding standard” (as defined in Section 412 of the Code or
Section 302 of ERISA),

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whether or not waived; (c) the filing pursuant to Section 412(c) of the Code or
Section 302(c) of ERISA of an application for a waiver of the minimum funding
standard with respect to any Plan; (d) the incurrence by any 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 any 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 any Borrower or any ERISA Affiliate of any liability with
respect to the withdrawal or partial withdrawal of any Borrower or any ERISA
Affiliate from any Plan or Multiemployer Plan; or (g) the receipt by any
Borrower or any ERISA Affiliate of any notice, or the receipt by any
Multiemployer Plan from any Borrower or any ERISA Affiliate of any notice,
concerning the imposition upon any Borrower or any ERISA Affiliate of Withdrawal
Liability or a determination that a Multiemployer Plan is, or is expected to be,
insolvent, in critical status or in reorganization, within the meaning of Title
IV of ERISA.

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

“Event of Default” has the meaning assigned to such term in Article VII.

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

“Excluded Taxes” means any of the following Taxes imposed on or with respect to
the Lender or required to be withheld or deducted from a payment to the Lender:
(a) Taxes imposed on or measured by net income (however denominated), franchise
Taxes, and branch profits Taxes, in each case, (i) imposed as a result of the
Lender being organized under the laws of, or having its principal office or its
applicable lending office located in, the jurisdiction imposing such Tax (or any
political subdivision thereof) or (ii) that are Other Connection Taxes, and (b)
any withholding Taxes imposed under FATCA.

“Extenuating Circumstance” means any period during which the Lender has
determined in its sole discretion (i) that due to unforeseen and/or nonrecurring
circumstances, it is impractical and/or not feasible to submit or receive a
Borrowing Request or Interest Election Request by email or fax or through
Electronic System,
and (ii) to accept a Borrowing Request or Interest Election Request
telephonically.

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future
regulations or official interpretations thereof and any agreement entered into
pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory
legislation, rules or practices adopted pursuant to any intergovernmental
agreement, treaty or convention among Governmental Authorities and implementing
such Sections of the Code.

“Federal Funds Effective Rate” means, for any day, the rate calculated by the
NYFRB based on such day’s federal funds transactions by depositary institutions
(as determined in such manner as the NYFRB shall set forth on its public website
from time to time) and published on the next succeeding Business Day by the
NYFRB as the effective federal funds rate, provided that if the Federal Funds
Effective Rate as so determined would be less than zero, such rate shall be
deemed to zero for the purposes of this Agreement.

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

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“Financial Officer” means the chief financial officer, chief accounting officer,
treasurer or controller of any Borrower.
“Foreign Subsidiary” means a Subsidiary that is organized under the laws of any
jurisdiction other than the United States, a State thereof or the District of
Columbia.
“Funding Account” means the deposit account of the Borrowers to which the Lender
is authorized by the Borrowers to transfer the proceeds of any Borrowings
requested or authorized pursuant to this Agreement.

“GAAP” means generally accepted accounting principles in the U.S., as modified
or understood in conjunction with Section 1.04 hereof.

“Governmental Authority” means the government of the U.S., 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” of or by any Person (the “Guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness 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
Indebtedness or other obligation or to purchase (or to 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 Indebtedness 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
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided, that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.

“Guaranteed Obligations” has the meaning assigned to such term in Section 9.01.

“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.

“IFRS” means the body of pronouncements issued by the International Accounting
Standards Board (“IASB”), including International Financial Reporting Standards
and interpretations approved by the IASB, International Accounting Standards and
Standing Interpretations Committee interpretations approved by the predecessor
International Accounting Standards Committee and adapted for use in the European
Union.

“Impacted Interest Period” has the meaning assigned to such term in the
definition of “LIBO Rate”.

“Increased Borrowing Base Reporting Period” means the period commencing on the
day on which Availability, as calculated by the Lender, which calculation shall
be deemed correct absent manifest error, is less than 12.5% of the Revolving
Commitment, and ending on the day on which Availability, as calculated by the
Lender, which calculation shall be deemed correct absent manifest error, is
equal to or greater than 12.5% of the Revolving Commitment for thirty (30)
consecutive days.

“Indebtedness” 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 upon which interest
charges are customarily paid, (d) all obligations of such Person under
conditional sale or 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

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services (excluding current accounts payable incurred in the ordinary course of
business), (f) all Indebtedness of others secured by (or for which the holder of
such Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien on property owned or acquired by such Person, whether or not the
Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person
of Indebtedness 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, (k)
all obligations of such Person under any earn-out (which for all purposes of
this Agreement shall be valued at the maximum potential payable with respect to
each such earn-out), (l) any other Off-Balance Sheet Liability of such Person,
and (m) all obligations of such Person, whether absolute or contingent and
howsoever and whensoever created, arising, evidenced or acquired (including all
renewals, extensions and modifications thereof and substitutions therefor),
under (i) any and all Swap Agreements, and (ii) any and all cancellations, buy
backs, reversals, terminations or assignments of any Swap Agreement transaction.
The Indebtedness of any Person shall include the Indebtedness of any other
entity (including any partnership in which such Person is a general partner) to
the extent 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 the
terms of such Indebtedness provide that such Person is not liable therefor.

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any obligation of any Loan
Party under any Loan Document and (b) to the extent not otherwise described in
the foregoing clause (a) hereof, Other Taxes.
    
“Interest Election Request” means a request by the Borrower Representative to
convert or continue a Borrowing in accordance with Section 2.07.

“Interest Payment Date” means (a) with respect to any CBFR Loan, the first
Business Day of each calendar month and the Maturity Date, (b) with respect to
any Eurodollar Loan, the last day of each Interest Period applicable to the
Borrowing of which such Loan is a part and, in the case of a Eurodollar
Borrowing with an Interest Period of more than three months' duration, each day
prior to the last day of such Interest Period that occurs at intervals of three
months' duration after the first day of such Interest Period, and (c) with
respect to all Loans, the Maturity Date.

“Interest Period” means with respect to any Eurodollar Borrowing the period
commencing on the date of such Eurodollar Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months (or, with the consent of the Lender, twelve months) thereafter, as
the Borrower Representative may elect; provided, that (i) 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 (ii) 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 the effective date of the most recent conversion or continuation of
such Borrowing.

“Interpolated Rate” means, at any time, for any Interest Period, the rate per
annum (rounded to the same number of decimal places as the LIBO Screen Rate)
determined by the Lender (which determination shall be conclusive and binding
absent manifest error) to be equal to the rate that results from interpolating
on a linear basis between: (a) the LIBO Screen Rate for the longest period (for
which the LIBO Screen Rate is available) that is shorter than the Impacted
Interest Period and (b) the LIBO Screen Rate for the shortest period (for which
the LIBO Screen Rate is available) that exceeds the Impacted Interest Period, in
each case, at such time; provided, that, if any Interpolated Rate shall be less
than zero, such rate shall be deemed to be zero for purposes of this Agreement.

“LC Disbursement” means any payment made by the Lender pursuant to a Letter of
Credit.

“LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of
all outstanding Letters of Credit at such time plus (b) the aggregate amount of
all LC Disbursements relating to Letters of Credit that have not yet been
reimbursed by or on behalf of the Borrowers at such time.    

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“Lease Deficiency Obligation” means after default, repossession and disposition
of the Equipment which is the subject of or which secures a Lease Financing, the
amount, if any, by which (i) any and all obligations of the Loan Parties to a
Lessor, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor) in connection with a specific
Lease Financing, exceeds (ii) the Net Proceeds realized by the Lessor upon the
disposition of the Equipment which is the subject of or which secures the
specific Lease Financing.

“Lease Financing” means (i) a lease of specific Equipment as defined in Article
2-A of the UCC, and (ii) a secured financing transaction secured by specific
Equipment, whether that transaction is called a lease or a loan, entered into by
any Loan Party with the Lender or any of its Affiliates (in this context, the
“Lessor”).
 
“Letters of Credit” means the letters of credit issued pursuant to this
Agreement, and the term “Letter of Credit” means any one of them or each of them
singularly, as the context may require.

“Letter of Credit Agreement” has the meaning assigned to it in Section 2.05(b).

“LIBO Rate” means, with respect to any Eurodollar Borrowing for any applicable
Interest Period or for any CBFR Borrowing, the LIBO Screen Rate at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period; provided that, if the LIBO Screen Rate shall not be available
at such time for such Interest Period (an “Impacted Interest Period”), then the
LIBO Rate shall be the Interpolated Rate, subject to Section 2.13 in the event
that the Lender shall conclude that it shall not be possible to determine such
Interpolated Rate (which conclusion shall be conclusive and binding absent
manifest error). Notwithstanding the above, to the extent that “LIBO Rate” or
“Adjusted LIBO Rate” is used in connection with a CBFR Borrowing, such rate
shall be determined as modified by the definition of Adjusted One Month LIBOR
Rate.

“LIBO Screen Rate” means, for any day and time, with respect to any Eurodollar
Borrowing for any Interest Period or for any CBFR Borrowing, the London
interbank offered rate as administered by ICE Benchmark Administration (or any
other Person that takes over the administration of such rate for Dollars) for a
period equal in length to such Interest Period as displayed on such day and time
on pages LIBOR01 or LIBOR02 of the Reuters screen that displays such rate (or,
in the event such rate does not appear on a Reuters page or screen, on any
successor or substitute page on such screen that displays such rate, or on the
appropriate page of such other information service that publishes such rate from
time to time as selected by the Lender in its reasonable discretion); provided
that if the LIBO Screen Rate as so determined would be less than zero, such rate
shall be deemed to zero for the purposes of this Agreement.
 
“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 Borrowing Option” has the meaning assigned to such term in the DDA Access
Product Agreement.

“Loan Documents” means, collectively, this Agreement, any promissory notes
issued pursuant to this Agreement, any Letter of Credit Agreement, the
Collateral Documents, the Loan Guaranty, any Obligation Guaranty, and all other
agreements, instruments, documents and certificates identified in or
contemplated by Section 4.01 executed and delivered to, or in favor of, the
Lender and including all other pledges, powers of attorney, consents,
assignments, contracts, notices, letter of credit agreements, letter of credit
applications and all other written matter whether heretofore, now or hereafter
executed by or on behalf of any Loan Party and delivered to the Lender in
connection with this Agreement or the transactions contemplated hereby. Any
reference in this Agreement or any other Loan Document to a Loan Document shall
include all appendices, exhibits, riders or schedules thereto, and all
amendments, restatements, supplements or other modifications thereto, all
waivers thereunder, and shall refer to this Agreement or such Loan Document as
the same may be in effect at any and all times such reference becomes operative.

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“Loan Guarantor” means each Loan Party other than a Borrower.

“Loan Guaranty” means Article IX of this Agreement and each separate Guarantee,
in form and substance satisfactory to the Lender, delivered by each Loan
Guarantor.

“Loan Parties” means the Borrowers, the Borrowers’ Domestic Subsidiaries that
are not Dormant Subsidiaries, and any other Person who becomes a party to this
Agreement pursuant to a joinder agreement and their respective successors and
assigns, and the term “Loan Party” shall mean any one of them or all of them
individually, as the context may require.    

“Loans” means the loans and advances made by the Lender pursuant to this
Agreement, including Protective Advances and any loans made pursuant to a Rider
hereto.

“Margin Stock” means margin stock within the meaning of Regulations T, U and X,
as applicable.

“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, operations or condition, financial or otherwise, of the Loan Parties
taken as a whole, (b) the ability of any Loan Party to perform any of its
Obligations, (c) the Collateral, or the Lender’s Liens on the Collateral or the
priority of such Liens, or (d) the rights of or benefits available to the Lender
under any of the Loan Documents.

“Material Agreements” means all material agreements and contracts identified in
Section 3.12 of the Disclosure Certificate.

“Material Indebtedness” means Indebtedness (other than the Loans and Letters of
Credit), or obligations in respect of one or more Swap Agreements, of any one or
more of the Loan Parties or any Subsidiary in an aggregate principal amount
exceeding $250,000. For purposes of determining Material Indebtedness, the
“principal amount” of the obligations of the Loan Parties or any Subsidiary in
respect of any Swap Agreement at any time shall be the maximum aggregate amount
(giving effect to any netting agreements) that such Loan Party or Subsidiary
would be required to pay if such Swap Agreement were terminated at such time.

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

“Mortgages” means any mortgage, deed of trust or other agreement which conveys
or evidences a Lien in favor of the Lender, on real property of a Loan Party.

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

“Net Proceeds” means, with respect to any event, (a) the cash proceeds received
in respect of such event including (i) any cash received in respect of any
non-cash proceeds (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or purchase
price adjustment receivable or otherwise, but excluding any interest payments),
but only as and when received, (ii) in the case of a casualty, insurance
proceeds and (iii) in the case of a condemnation or similar event, condemnation
awards and similar payments, minus (b) the sum of (i) all reasonable fees and
out-of-pocket expenses paid to third parties (other than Affiliates) in
connection with such event, (ii) in the case of a sale, transfer or other
disposition of an asset (including pursuant to a sale and leaseback transaction
or a casualty or a condemnation or similar proceeding), the amount of all
payments required to be made as a result of such event to repay Indebtedness
(other than Loans) secured by such asset or otherwise subject to mandatory
prepayment as a result of such event and (iii) the amount of all taxes paid (or
reasonably estimated to be payable) and the amount of any reserves established
to fund contingent liabilities reasonably estimated to be payable, in each case
during the year that such event occurred or the next succeeding year and that
are directly attributable to such event (as determined reasonably and in good
faith by a Financial Officer of the Borrower Representative).

“NYFRB” means the Federal Reserve Bank of New York.

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“NYFRB Rate” means, for any day, the greater of (a) the Federal Funds Effective
Rate in effect on such day and (b) the Overnight Bank Funding Rate in effect on
such day(or for any day that is not a Business Day, for the immediately
preceding Business Day); provided that if none of such rates are published for
any day that is a Business Day, the term “NYFRB Rate” means the rate for a
federal funds transaction quoted at 11:00 a.m. on such day received by the
Lender from a federal funds broker of recognized standing selected by it;
provided, further, that if any of the aforesaid rates as so determined would be
less than zero, such rate shall be deemed to be zero for purposes of this
Agreement.

“Obligated Party” has the meaning assigned to such term in Section 9.02.

“Obligation Guaranty” means any Guarantee of all or any portion of the Secured
Obligations executed and delivered to the Lender by a guarantor who is not a
Loan Party.

“Obligations” means all unpaid principal of and accrued and unpaid interest on
the Loans, all LC Exposure, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations and indebtedness (including
interest and fees accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), obligations and liabilities of any of the Loan
Parties to the Lender or any indemnified party individually or collectively,
existing on the Effective Date or arising thereafter, direct or indirect, joint
or several, absolute or contingent, matured or unmatured, liquidated or
unliquidated, secured or unsecured, arising by contract, operation of law or
otherwise, arising or incurred under this Agreement or any of the other Loan
Documents or in respect of any of the Loans made or reimbursement or other
obligations incurred or any of the Letters of Credit or other instruments at any
time evidencing any thereof.

“OFAC” means the Office of Foreign Assets Control of the United States
Department of the Treasury.
“Off-Balance Sheet Liability” of a Person means (a) any repurchase obligation or
liability of such Person with respect to accounts or notes receivable sold by
such Person, (b) any indebtedness, liability or obligation under any so-called
“synthetic lease” transaction entered into by such Person, or (c) any
indebtedness, liability or obligation arising with respect to any other
transaction which is the functional equivalent of or takes the place of
borrowing but which does not constitute a liability on the balance sheet of such
Person (other than operating leases).
    
“Other Connection Taxes” means, with respect to the Lender, Taxes imposed as a
result of a present or former connection between the Lender and the jurisdiction
imposing such Taxes (other than a connection arising from the Lender having
executed, delivered, become a party to, performed its obligations under,
received payments under, received or perfected a security interest under,
engaged in any other transaction pursuant to, or enforced, any Loan Document, or
sold or assigned an interest in any Loan, Letter of Credit or any Loan
Document).

“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Loan Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment.

“Overnight Bank Funding Rate” means, for any day, the rate comprised of both
overnight federal funds and overnight Eurodollar borrowings by U.S.–managed
banking offices of depository institutions (as such composite rate shall be
determined by the NYFRB as set forth on its public website from time to time)
and published on the next succeeding Business Day by the NYFRB as an overnight
bank funding rate.

“Paid in Full” or “Payment in Full” means, (i) the indefeasible payment in full
in cash of all outstanding Loans and LC Disbursements, together with accrued and
unpaid interest thereon, (ii) the termination, expiration, or cancellation and
return of all outstanding Letters of Credit (or alternatively, with respect to
each such Letter of Credit, the furnishing to the Lender of a cash deposit, or
at the discretion of the Lender a backup standby letter of credit satisfactory
to the Lender, in an amount equal to 105% of the LC Exposure as of the date of
such payment), (iii) the indefeasible payment in full in cash of the accrued and
unpaid fees, (iv) the indefeasible payment in full in cash of

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all reimbursable expenses and other Secured Obligations (other than Unliquidated
Obligations for which no claim has been made and other obligations expressly
stated to survive such payment and termination of this Agreement), together with
accrued and unpaid interest thereon, (v) the termination of all Commitments, and
(vi) the termination of the Swap Agreement Obligations and the Banking Services
Obligations or entering into other arrangements satisfactory to the Secured
Parties counterparties thereto.

“Participant” has the meaning assigned to such term in Section 8.04(c).

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

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

“Permitted Encumbrances” means:

(a)    Liens imposed by law for Taxes that are not yet due or are being
contested in compliance with Section 5.04;

(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 30 days or are being
contested in compliance with Section 5.04;

(c)    Liens incurred in, 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)    Liens incurred or deposits to secure the performance of tender bids,
trade contracts, leases, statutory obligations, surety and appeal bonds, payment
and return of money bonds, and other similar obligations, performance bonds and
other obligations of a like nature, in each case in the ordinary course of
business;

(e)    attachment or judgment Liens in respect of judgments that do not
constitute an Event of Default under clause (k) of Article VII;

(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 obligations and do not materially detract from the
value of the affected property or interfere with the ordinary conduct of
business of any Borrower or any Subsidiary;

(g)    customary restrictive provisions in leases, subleases, licenses or
sublicenses and other contracts restricting the assignment, transfer, lease,
sublease, license or sublicense thereof (or otherwise restricting the granting
of a Lien on the assets subject thereto);

(h)    purported Liens evidenced by the filing of financing statements as a
precautionary measure in connection with operating leases of personal property
and consignment of goods entered into in the ordinary course of business;

(i)    non-exclusive outbound licenses of patents, trademarks, copyrights and
other intellectual property rights granted by any Loan Party in the ordinary
course of business and not interfering in any respect with the ordinary conduct
of or materially detracting from the value of the business of such Person; and

(j)     other similar Liens incurred in the ordinary course of business which
are incidental to the conduct of the business or the ownership of the property
and assets of the Loan Parties and which were not

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incurred in connection with the borrowing of money or the obtaining of advances
or credit, and which do not have priority ahead of the Lien of the Lender and in
the aggregate materially impair the use of such properties and assets in the
operation of such Persons’ business;

provided that the term “Permitted Encumbrances” shall not include any Lien
securing Indebtedness, except with respect to clause (e) above.

“Permitted Investments” means:

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

(b)    investments in 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)    investments in certificates of deposit, bankers’ 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 U.S. or any State thereof which has a combined capital and surplus and
undivided profits of not less than $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)    money market funds that (i) comply with the criteria set forth in
Securities and Exchange Commission Rule 2a-7 under the Investment Company Act of
1940, (ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio
assets of at least $5,000,000,000.

“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 (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, and in respect of which any Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

“Prepayment Event” means:
(a)    any sale, transfer or other disposition (including pursuant to a sale and
leaseback transaction) of any property or asset of any Loan Party, other than
dispositions described in Section 6.05(a); or
(b)    any casualty or other insured damage to, or any taking under power of
eminent domain or by condemnation or similar proceeding of, any property or
asset of any Loan Party with a fair value immediately prior to such event equal
to or greater than the $100,000; or
(c)    the issuance by a Borrower of any Equity Interests, or the receipt by a
Borrower of any capital contribution; or
(d)    the incurrence by any Loan Party of any Indebtedness, other than
Indebtedness permitted under Section 6.01.

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“Prime Rate” means the rate of interest last quoted by The Wall Street Journal
as the “Prime Rate” in the U.S. or, if The Wall Street Journal ceases to quote
such rate, the highest per annum interest rate published by the Federal Reserve
Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest
Rates) as the “bank prime loan” rate or, if such rate is no longer quoted
therein, any similar rate quoted therein (as determined by the Lender) or any
similar release by the Federal Reserve Board (as determined by the Lender). Each
change in the Prime Rate shall be effective from and including the date such
change is publicly announced or quoted as being effective.

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

“Rate Indices” means CB Floating Rate, Adjusted LIBO Rate, REVLIBOR30 Rate, and
LIBO Rate.

“Regulation D” means Regulation D of the Federal Reserve Board, as in effect
from time to time and all official rulings and interpretations thereunder or
thereof.

“Regulation T” means Regulation T of the Federal Reserve Board, as in effect
from time to time and all official rulings and interpretations thereunder or
thereof.

“Regulation U” means Regulation U of the Federal Reserve Board, as in effect
from time to time and all official rulings and interpretations thereunder or
thereof.

“Regulation X” means Regulation X of the Federal Reserve Board, as in effect
from time to time and all official rulings and interpretations thereunder or
thereof.    

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

“Release” means any releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, migrating, disposing or
dumping of any substance into the environment.

“Report” means reports prepared by the Lender or another Person showing the
results of appraisals, field examinations or audits pertaining to the assets of
the Loan Parties from information furnished by or on behalf of the Borrowers,
after the Lender has exercised its rights of inspection pursuant to this
Agreement.

“Requirement of Law” means, with respect to any Person, (a) the charter,
articles or certificate of organization or incorporation and bylaws or
operating, management or partnership agreement, or other organizational or
governing documents of such Person, and (b) any statute, law (including common
law), treaty, rule regulation, code, ordinance, order, decree, writ, judgment,
injunction or determination of any arbitrator or court or other Governmental
Authority (including Environmental Laws), in each case applicable to or binding
upon such Person or any of its property or to which such Person or any of its
property is subject.    

“Reserves” means any and all reserves which the Lender deems necessary, in its
Permitted Discretion, to maintain (including, without limitation, an
availability reserve, reserves for accrued and unpaid interest on the Secured
Obligations, Banking Services Reserves, volatility reserves, reserves for rent
at locations leased by any Loan Party and for consignee's, warehousemen’s and
bailee’s charges, reserves for dilution of Accounts, reserves for Inventory
shrinkage, reserves for customs charges and shipping charges related to any
Inventory in transit, reserves for Swap Agreement Obligations, reserves for
contingent liabilities of any Loan Party, reserves for uninsured losses of any
Loan Party, reserves for uninsured, underinsured, unindemnified or under
indemnified liabilities or potential liabilities

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with respect to any litigation and reserves for taxes, fees, assessments, and
other governmental charges) with respect to the Collateral or any Loan Party.

“Responsible Officer” means the president, Financial Officer or other executive
officer of any Borrower.

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests in any Loan
Party or Subsidiary, or any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
any such Equity Interests or any option, warrant or other right to acquire any
such Equity Interests.

“REVLIBOR30 Rate” means the London interbank offered rate administered by ICE
Benchmark Administration (or any other Person that takes over the administration
of such rate for Dollars) for a one (1) month period as displayed on pages
LIBOR01 or LIBOR02 of the Reuters screen that displays such rate (or, in the
event such rate does not appear on a Reuters page or screen, on any successor or
substitute page on such screen that displays such rate, or on the appropriate
page of such other information service that publishes such rate from time to
time as shall be selected by the Lender in its reasonable discretion; in each
case the “REVLIBOR30 Screen Rate”) at approximately 11:00 a.m., London time, two
Business Days prior to the first Business Day of each month, adjusted monthly on
the first Business Day of each month; provided that, (x) if the REVLIBOR30
Screen Rate shall be less than zero, such rate shall be deemed to be zero for
purposes of this Agreement and (y) if the REVLIBOR30 Screen Rate shall not be
available at such time for such a period, then the REVLIBOR30 Rate shall be
equal to the CB Floating Rate. Any change in the REVLIBOR30 Rate shall be
effective from and include the effective date of such change.

“Revolving Commitment” means the commitment of the Lender to make Revolving
Loans hereunder up to the amount set forth in the Terms Schedule. The initial
amount of the Lender’s Revolving Commitment is $30,000,000.
“Revolving Exposure” means, at any time, the sum of (a) the outstanding
principal amount of Revolving Loans and LC Exposure at such time, plus (b) the
aggregate principal amount of Protective Advances outstanding at such time.

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

“S&P” means Standard & Poor's Ratings Services, a Standard & Poor’s Financial
Services LLC business.

“Sanctioned Country” means, at any time, a country, region, or territory which
is itself the subject or target of any Sanctions (at the time of this Agreement,
Crimea, Cuba, Iran, North Korea and Syria).

“Sanctioned Person” means, at any time, (a) any Person listed in any
Sanctions-related list of designated Persons maintained by the Office of Foreign
Assets Control of the U.S. Department of the Treasury or the U.S. Department of
State. the United Nations Security Council, the European Union, any European
Union member state or Her Majesty’s Treasury of the United Kingdom or other
relevant sanctions authority, (b) any Person operating, organized or resident in
a Sanctioned Country, (c) any Person owned or controlled by any such Person or
Persons described in the foregoing clauses (a) or (b), or (d) any Person
otherwise the subject of any Sanctions.

“Sanctions” means economic or financial sanctions or trade embargoes imposed,
administered or enforced from time to time by (a) the U.S. government, including
those administered by the Office of Foreign Assets Control of the U.S.
Department of the Treasury or the U.S. Department of State, or (b) the United
Nations Security Council, the European Union, any European Union member state or
Her Majesty’s Treasury of the United Kingdom or other relevant sanctions
authority.

“SEC” means the Securities and Exchange Commission of the U.S.

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“Secured Obligations” means all Obligations, together with all (i) Banking
Services Obligations and (ii) Swap Agreement Obligations owing to the Lender or
its Affiliates; provided, however, that the definition of “Secured Obligations”
shall not create any guarantee by any Loan Guarantor of (or grant of security
interest by any Loan Guarantor to support, as applicable) any Excluded Swap
Obligations of such Loan Guarantor for purposes of determining any obligations
of any Loan Guarantor.

“Secured Parties” means (a) the Lender, (b) each Affiliate of the Lender that
provides Banking Services, (c) each Affiliate of the Lender that is a
counterparty to any Swap Agreement, (d) the beneficiaries of each
indemnification obligation undertaken by any Loan Party under any Loan Document,
and (e) the successors and assigns of each of the foregoing.

“Security Agreement” means that certain Security Agreement (including any and
all supplements thereto), dated as of the date hereof, among the Loan Parties
and the Lender, for the benefit of the Secured Parties, and any other pledge or
security agreement entered into, after the date of this Agreement by any other
Loan Party (as required by this Agreement or any other Loan Document), or any
other Person, for the benefit of the Secured Parties.

“Statutory Reserve Rate” 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 percentage (including any
marginal, special, emergency or supplemental reserves) established by the
Federal Reserve Board to which the Lender is subject with respect to the
Adjusted LIBO Rate, for eurocurrency funding (currently referred to as
“Eurocurrency liabilities” in Regulation D). Such reserve percentages shall
include those imposed pursuant to Regulation D. Eurodollar Loans shall 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 the Lender under Regulation D or any
comparable regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.

“Subordinated Indebtedness” of a Person means any Indebtedness of such Person
the payment of which is subordinated to payment of the Secured Obligations to
the written satisfaction of the Lender.

“subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association 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, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) 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 (b) that is, as of such date, otherwise
Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and/or one or more subsidiaries of the parent.

“Subsidiary” means any direct or indirect subsidiary of the Company or a Loan
Party, as applicable.

“Swap Agreement” means any agreement with respect to any swap, forward, spot,
future, credit default or derivative transaction or option or similar agreement
involving, or settled by reference to, one or more rates, currencies,
commodities, equity or debt instruments or securities, or economic, financial or
pricing indices or measures of economic, financial or pricing risk or value or
any similar transaction or any combination of these transactions; provided that
no phantom stock or similar plan providing for payments only on account of
services provided by current or former directors, officers, employees or
consultants of the Borrowers or the Subsidiaries shall be a Swap Agreement.

“Swap Agreement Obligations” means any and all obligations of the Loan Parties,
whether absolute or contingent and howsoever and whensoever created, arising,
evidenced or acquired (including all renewals, extensions and modifications
thereof and substitutions therefor), under (a) any and all Swap Agreements
permitted hereunder with the Lender or an Affiliate of the Lender, and (b) any
and all cancellations, buy backs, reversals, terminations or assignments of any
Swap Agreement transaction permitted hereunder with the Lender or an Affiliate
of the Lender.

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

“T & W Asset Disposition” means, collectively, the sale of the assets of T & W
to non-Borrower and non-Loan Party Persons and the transfer of assets to SIFCO.
    
“Target Balance” has the meaning assigned to such term in the DDA Access Product
Agreement.

“Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, withholdings (including backup withholding), value added taxes, or
any other goods and services, use or sales taxes, assessments, fees or other
charges imposed by any Governmental Authority, including any interest, additions
to tax or penalties applicable thereto.
    
“Transactions” means the execution, delivery and performance by the Loan Parties
of this Agreement and the other Loan Documents, the borrowing of Loans and other
credit extensions, the use of the proceeds thereof and the issuance of Letters
of Credit hereunder.

“Type”, when used in reference 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 CBFR.

“UCC” means the Uniform Commercial Code as in effect from time to time in the
Governing State or any other state the laws of which are required to be applied
in connection with the issue of perfection of security interests.

“Unliquidated Obligations” means, at any time, any Secured Obligations (or
portion thereof) that are contingent in nature or unliquidated at such time,
including any Secured Obligation that is: (i) an obligation to reimburse a bank
for drawings not yet made under a letter of credit issued by it; (ii) any other
obligation (including any guarantee) that is contingent in nature at such time;
or (iii) an obligation to provide collateral to secure any of the foregoing
types of obligations.

“U.S.” means the United States of America.

“USA PATRIOT Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001.
“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.

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Borrowing Base Schedule

“Borrowing Base” means, at any time, the sum of (a) 85% of Eligible Accounts at
such time, plus (b) the lesser of (i) 70% of Eligible Inventory, valued at the
lower of cost or market value, determined on a first-in-first-out basis, at such
time and (ii) the product of 85% multiplied by the NOLV Percentage identified in
the most recent inventory appraisal ordered by the Lender multiplied by Eligible
Inventory, valued at the lower of cost or market value, determined on a
first-in-first-out basis, at such time, minus (c) Reserves, plus (d) the PP&E
Component. The Lender may, in its Permitted Discretion, reduce the advance rates
set forth above or reduce one or more of the other elements used in computing
the Borrowing Base.

“Eligible Accounts” means, at any time, the Accounts of a Borrower which the
Lender determines in its Permitted Discretion are eligible as the basis for the
extension of Revolving Loans and the issuance of Letters of Credit hereunder.
Without limiting the Lender's discretion provided herein, Eligible Accounts
shall not include any Account:

(a)which is not subject to a first priority perfected security interest in favor
of the Lender;

(b)which is subject to any Lien other than (i) a Lien in favor of the Lender and
(ii) a Permitted Encumbrance which does not have priority over the Lien in favor
of the Lender;

(c)(i) which is unpaid more than 120 days after the date of the original invoice
therefor or more than 60 days after the original due date therefor, or (ii)
which has been written off the books of the Borrowers or otherwise designated as
uncollectible;

(d)which is owing by an Account Debtor for which more than 50% of the Accounts
owing from such Account Debtor and its Affiliates are ineligible hereunder;

(e)which is owing by an Account Debtor to the extent the aggregate amount of
Accounts owing from such Account Debtor and its Affiliates to such Borrower
exceeds 25% of the aggregate Eligible Accounts;

(f)with respect to which any covenant, representation, or warranty contained in
this Agreement or in the Security Agreement has been breached or is not true;

(g)which (i) does not arise from the sale of goods or performance of services in
the ordinary course of business, (ii) is not evidenced by an invoice or other
documentation reasonably satisfactory to the Lender which has been sent to the
Account Debtor, (iii) represents a progress billing, (iv) is contingent upon
such Borrower’s completion of any further performance, (v) represents a sale on
a bill-and-hold, guaranteed sale, sale-and-return, sale on approval,
consignment, cash-on-delivery or any other repurchase or return basis, or (vi)
relates to payments of interest;

(h)for which the goods giving rise to such Account have not been shipped to the
Account Debtor or for which the services giving rise to such Account have not
been performed by such Borrower or if such Account was invoiced more than once;

(i)with respect to which any check or other instrument of payment has been
returned uncollected for any reason;

(j)which is owed by an Account Debtor which has (i) applied for, suffered, or
consented to the appointment of any receiver, custodian, trustee, or liquidator
of its assets, (ii) has had possession of all or a material part of its property
taken by any receiver, custodian, trustee or liquidator, (iii) filed, or had
filed against it, any request or petition for liquidation, reorganization,
arrangement, adjustment of debts, adjudication as bankrupt, winding-up, or
voluntary or involuntary case under any state or federal bankruptcy laws, (iv)
has admitted in writing its inability,

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or is generally unable to, pay its debts as they become due, (v) become
insolvent, or (vi) ceased operation of its business;

(k)which is owed by any Account Debtor which has sold all or a substantially all
of its assets;

(l)which is owed by an Account Debtor which (i) does not maintain its chief
executive office in the U.S. (including any territory thereof) or Canada or (ii)
is not organized under applicable law of the U.S., any state of the U.S. or the
District of Columbia, Canada, or any province of Canada (each such Account, a
“Foreign Account”) unless, in any such case, such Foreign Account is backed by a
Letter of Credit acceptable to the Lender which is in the possession of, and is
directly drawable by, the Lender or is insured by an insurer acceptable to the
Lender in its Permitted Discretion, provided that the aggregate amount of
Foreign Accounts considered Eligible Accounts under this clause (l) due to being
insured by an insurer acceptable to the Lender shall not exceed $1,500,000 minus
$500,000 on each one year anniversary of the Effective Date until such amount is
reduced to $0;

(m)which is owed in any currency other than dollars;

(n)which is owed by (i) any government (or any department, agency, public
corporation, or instrumentality thereof) of any country other than the U.S.
unless such Account is backed by a Letter of Credit acceptable to the Lender
which is in the possession of, and is directly drawable by, the Lender, or (ii)
any government of the U.S., or any department, agency, public corporation, or
instrumentality thereof, unless the Federal Assignment of Claims Act of 1940 (31
U.S.C. § 3727 et seq. and 41 U.S.C. § 15 et seq.), and any other steps necessary
to perfect or protect the Lien of the Lender in such Account, have been complied
with to the Lender’s satisfaction;

(o)which is owed by any Affiliate of any Loan Party or any employee, officer,
director, agent or stockholder of any Loan Party or any of its Affiliates;

(p)which, for any Account Debtor, exceeds a credit limit determined by the
Lender in its Permitted Discretion, to the extent of such excess;

(q)which is owed by an Account Debtor or any Affiliate of such Account Debtor to
which such Borrower is indebted, but only to the extent of such indebtedness, or
is subject to any security deposit, progress payment, retainage or other similar
advance made by or for the benefit of an Account Debtor, in each case to the
extent thereof;

(r)which is subject to any counterclaim, deduction, defense, setoff or dispute
but only to the extent thereof;

(s)which is evidenced by any promissory note, chattel paper, or instrument;

(t)which is owed by an Account Debtor (i) located in any jurisdiction which
requires filing of a “Notice of Business Activities Report” or other similar
report in order to permit the applicable Borrower to seek judicial enforcement
in such jurisdiction of payment of such Account, unless such Borrower has filed
such report or qualified to do business in such jurisdiction or (ii) which is a
Sanctioned Person;

(u)with respect to which such Borrower has made any agreement with the Account
Debtor for any reduction thereof, other than discounts and adjustments given in
the ordinary course of business, or any Account which was partially paid and
such Borrower created a new receivable for the unpaid portion of such Account;

(v)which does not comply in all material respects with the requirements of all
applicable laws and regulations, whether federal, state or local, including
without limitation the Federal Consumer Credit Protection Act, the Federal Truth
in Lending Act and Regulation Z of the Board;

(w)which is for goods that have been sold under a purchase order or pursuant to
the terms of a contract or other agreement or understanding (written or oral)
that indicates or purports that any Person other than the

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Borrower has or has had an ownership interest in such goods, or which indicates
any party other than the Borrower as payee or remittance party;

(x)which was created on cash on delivery terms; or

(y)which the Lender determines in its Permitted Discretion may not be paid by
reason of the Account Debtor’s inability to pay or which the Lender otherwise
determines in its Permitted Discretion is unacceptable for any reason
whatsoever.

In the event that an Account of a Borrower which was previously an Eligible
Account ceases to be an Eligible Account hereunder, such Borrower or the
Borrower Representative shall notify the Lender thereof on and at the time of
submission to the Lender of the next Borrowing Base Certificate. In determining
the amount of an Eligible Account of a Borrower, the face amount of an Account
may, in the Lender's Permitted Discretion, be reduced by, without duplication,
to the extent not reflected in such face amount, (i) the amount of all accrued
and actual discounts, claims, credits or credits pending, promotional program
allowances, price adjustments, finance charges or other allowances (including
any amount that such Borrower may be obligated to rebate to an Account Debtor
pursuant to the terms of any agreement or understanding (written or oral)) and
(ii) the aggregate amount of all cash received in respect of such Account but
not yet applied by such Borrower to reduce the amount of such Account.

“Eligible Equipment” means the Equipment owned by a Borrower which the Lender
determines in its Permitted Discretion are eligible as the basis for the
extension of Revolving Loans and the issuance of Letters of Credit hereunder.
Without limiting the Lender's discretion provided herein, Eligible Equipment
shall not include any Equipment unless:

(a)    such Borrower has good title to such Equipment;
(b)    such Borrower has the right to subject such Equipment to a Lien in favor
of the Lender; such Equipment is subject to a first priority perfected Lien in
favor of the Lender and is free and clear of all other Liens of any nature
whatsoever (except for Permitted Encumbrances which do not have priority over
the Lien in favor of the Lender);

(c)    the full purchase price for such Equipment has been paid by such
Borrower;

(d)    such Equipment is located on premises (i) owned by such Borrower, which
premises are subject to a first priority perfected Lien in favor of the Lender,
or (ii) leased by such Borrower where (x) the lessor has delivered to the Lender
a Collateral Access Agreement or (y) a Reserve for rent, charges, and other
amounts due or to become due with respect to such facility has been established
by the Lender in its Permitted Discretion;

(e)    such Equipment is in good working order and condition (ordinary wear and
tear excepted) and is used or held for use by such Borrower in the ordinary
course of its business;

(f)    such Equipment (i) is not subject to any agreement which restricts the
ability of such Borrower to use, sell, transport or dispose of such Equipment or
which restricts the Lender’s ability to take possession of, sell or otherwise
dispose of such Equipment and (ii) has not been purchased from a Sanctioned
Person; and

(g)    such Equipment does not constitute “Fixtures” under the applicable laws
of the jurisdiction in which such Equipment is located.

In the event that Equipment which was previously Eligible Equipment ceases to be
Eligible Equipment hereunder, such Borrower shall notify the Lender thereof on
and at the time of submission to the Lender of the next Borrowing Base
Certificate.

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“Eligible Inventory” means, at any time, the Inventory of a Borrower which the
Lender determines in its Permitted Discretion is eligible as the basis for the
extension of Revolving Loans, and the issuance of Letters of Credit hereunder.
Without limiting the Lender’s discretion provided herein, Eligible Inventory
shall not include any Inventory:
(a)    which is not subject to a first priority perfected Lien in favor of the
Lender;
(b)    which is subject to any Lien other than (i) a Lien in favor of the Lender
and (ii) a Permitted Encumbrance which does not have priority over the Lien in
favor of the Lender;
(c)    which is, in the Lender’s opinion in its Permitted Discretion, slow
moving, obsolete, unmerchantable, defective, used, unfit for sale, not salable
at prices approximating at least the cost of such Inventory in the ordinary
course of business, or unacceptable due to age, type, category and/or quantity;
(d)    with respect to which any covenant, representation, or warranty contained
in this Agreement or the Security Agreement has been breached or is not true, or
which does not conform to all standards imposed by any Governmental Authority
having authority over such Inventory, or its use or sale;
(e)    in which any Person other than such Borrower shall (i) have any direct or
indirect ownership, interest or title or (ii) be indicated on any purchase order
or invoice with respect to such Inventory as having or purporting to have an
interest therein;
(f)    which is unfinished goods (other than raw materials or work-in-process)
or which constitutes spare or replacement parts, packaging and shipping
material, manufacturing supplies, samples, prototypes, displays or display
items, bill-and-hold or ship-in-place goods, goods that are returned or marked
for return, repossessed goods, defective or damaged goods, goods held on
consignment, or goods which are not of a type held for sale in the ordinary
course of business;
(g)    which is not located in the U.S. or is in transit with a common carrier
from vendors and suppliers;
(h)    which is located in any location leased by such Borrower unless (i) the
lessor has delivered to the Lender a Collateral Access Agreement or (ii) a
Reserve for rent, charges, and other amounts due or to become due with respect
to such facility has been established by the Lender in its Permitted Discretion;
(i)    which is located in any third party warehouse or is in the possession of
a bailee (other than a third party processor) and is not evidenced by a
Document, unless (i) such warehouseman or bailee has delivered to the Lender a
Collateral Access Agreement and such other documentation as the Lender may
require or (ii) an appropriate Reserve has been established by the Lender in its
Permitted Discretion;
(j)    which is being processed offsite at a third party location or outside
processor, or is in transit to or from such third party location or outside
processor, unless (i) such processor has delivered to the Lender a Collateral
Access Agreement and such other documentation as the Lender may require or (ii)
an appropriate Reserve has been established by the Lender in its Permitted
Discretion;
(k)    which is a discontinued product or component thereof;
(l)    which is the subject of a consignment by such Borrower as consignor;
(m)    which is perishable;

4

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(n)    which contains or bears any intellectual property rights licensed to such
Borrower unless the Lender is satisfied that it may sell or otherwise dispose of
such Inventory without (i) infringing the rights of such licensor, (ii)
violating any contract with such licensor, or (iii) incurring any liability with
respect to payment of royalties other than royalties incurred pursuant to sale
of such Inventory under the current licensing agreement;
(o)    which is not reflected in a current perpetual inventory report of such
Borrower;
(p)    for which reclamation rights have been asserted by the seller;
(q)    which has been acquired from a Sanctioned Person; or
(r)    which the Lender in its Permitted Discretion otherwise determines is
unacceptable for any reason whatsoever.

In the event that Inventory of a Borrower which was previously Eligible
Inventory ceases to be Eligible Inventory hereunder, such Borrower or the
Borrower Representative shall notify the Lender thereof on and at the time of
submission to the Lender of the next Borrowing Base Certificate.

“NOLV Percentage” means, as of any date of determination, the percentage of the
book value of Borrower’s Inventory that is estimated to be recoverable in an
orderly liquidation thereof net of all associated costs of such liquidation, as
such percentage is specified in the most recent appraisal received by Lender
from an appraiser selected by Lender.
“PP&E Component” means, at the time of any determination, an amount equal to the
lesser of (a) 85% of the net orderly liquidation value of the Borrowers’
Eligible Equipment (as specified in an appraisal received by Lender from an
appraiser selected by Lender) less Reserves established by the Lender in its
Permitted Discretion, (b) $3,000,000 less Reserves established by the Lender in
its Permitted Discretion; provided, that, (i) the amount included in the PP&E
Component shall be reduced, on the first day of each calendar month following
the Effective Date, based on a seven year level amortization schedule, and (ii)
the amount included in the PP&E Component shall be reduced, on the date any item
of Eligible Equipment ceases to be Eligible Equipment for any reason (including
as a result of any sale, transfer or other disposition thereof or any casualty
or condemnation event with respect thereto), by the amount then included in the
PP&E Component with respect to such item of Eligible Equipment.

5

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Terms Schedule

1.    Revolving Commitment (Definitions Schedule): $30,000,000.

(a)    The Borrowers may request that the Lender increase the Revolving
Commitment provided that (i) any such request for an increase shall be in a
minimum amount of $5,000,000, (ii) the Borrowers may make a maximum of two such
requests, (iii) after giving effect thereto, the sum of the total of the
additional Commitments does not exceed $10,000,000, (iv) the procedure described
in Section 2.09(e) have been satisfied. Nothing contained in this section shall
constitute, or otherwise be deemed to be, a commitment on the part of the Lender
to increase its Commitment hereunder at any time and the Borrowers acknowledge
that the Lender may decline the request for any reason, or no reason whatsoever,
notwithstanding the absence of a Material Adverse Effect, Default or Event of
Default.

(b)    The amendment hereto for such an increase shall be in form and substance
satisfactory to the Lender. As a condition precedent to (i) requesting such an
increase, the Borrowers shall deliver to the Lender a certificate of each Loan
Party signed by an authorized officer of such Loan Party (A) certifying and
attaching the resolutions adopted by such Loan Party approving or consenting to
such increase, and (B) in the case of the Borrowers, certifying that, before and
after giving effect to such increase or addition, (1) the representations and
warranties contained in Article III and the other Loan Documents are true and
correct, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they are true and correct
as of such earlier date, (2) no Default exists and (3) the Borrowers are in
compliance (on a pro forma basis) with the covenants contained in the Financial
Covenants Schedule, and (ii) the Lender agreeing to such an increase, the
Borrowers shall deliver to the Lender legal opinions and documents consistent
with those delivered on the Effective Date, to the extent requested by the
Lender.

2.
Maturity Date (Definitions Schedule):

August 6, 2021, or any earlier date on which the Revolving Commitment is reduced
to zero or otherwise terminated pursuant to the terms hereof.

3.
Applicable Margin (Definitions Schedule):

For any day, with respect to any Loan, or with respect to the commitment fees
payable hereunder, as the case may be, the applicable rate per annum set forth
below under the applicable caption below, based upon the Category Criteria as of
the most recent determination date, provided, that the “Applicable Margin” shall
be the applicable rates per annum set forth below in Category 2 during the
period from the Effective Date to, and including, the scheduled date of delivery
to the Lender of the consolidated financial statements required under Section
5.01 for the fiscal quarter ending March 31, 2019:

Category Criteria -
Fixed Charge Coverage Ratio

REVLIBOR30
CBFR Spread CB Floating Rate
Eurodollar Spread
Commitment Fee Rate
Category 1
Fixed Charge Coverage Ratio < 1.15:1.0

2.00%

- 0.50%

2.00%

0.25%
Category 2
Fixed Charge Coverage Ratio < 1.50:1.0 but ≥ 1:15:1.0

1.75%

- 0.75%

1.75%

0.25%
Category 3
Fixed Charge Coverage Ratio ≥ 1:50:1.0

1.50%

- 1.00%

1.50%

0.25%

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

For purposes of the foregoing, (a) the Applicable Margin shall be determined as
of the end of each fiscal quarter of the Company based upon the Borrowers’
annual or quarterly consolidated financial statements delivered pursuant to
Section 5.01, commencing with the fiscal quarter ending March 31, 2019, and (b)
each change in the Applicable Margin resulting from a change in the Category
Criteria shall be effective during the period commencing on and including the
scheduled date of delivery to the Lender of such consolidated financial
statements indicating such change and ending on the date immediately preceding
the effective date of the next such change, provided that the Category Criteria
shall be deemed to be in Category 1 at the option of the Lender if the Borrower
Representative fails to deliver the consolidated financial statements required
to be delivered by it pursuant to the Reporting Schedule attached hereto during
the period from the expiration of the time for delivery thereof until such
consolidated financial statements are delivered.

4.
Availability Block (Section 2.01, etc.):

Not Applicable

5.
LC Exposure (Section 2.05):

LC Exposure Amount- $1,000,000

6.
Prepayment Fee (Section 2.08):

None

7.
Cash Dominion Period (Section 2.09, etc.):

At all times.

8.
Closing and Administration Fees (Section 2.11):

Annual Administration Fee- $0

Closing Fee- $0

9.
Fiscal Periods and Accountants (Section 3.04):

Reference Fiscal Year- the fiscal year ended September 30, 2017.

Borrower’s Accountants- Grant Thornton LLP, independent public accountants.

Interim Fiscal Period- The quarter and the portion of the fiscal year ended
March 31, 2018.

10.
Debt Limits (Section 6.01):

Purchase Money Debt Limit- $4,000,000

Subordinated Debt Limit- $1,000,000

Unsecured Debt Limit- $100,000

11.
Investment Limit (Section 6.04):

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$100,000

12.
Judgment Amount (Article VII):

$250,000

13.
Notice Addresses (Section 8.01):

if to any Loan Party, to the Company at:            

970 East 64th Street
Cleveland, Ohio 44103
Attention: Peter Knapper, President and Chief Executive Officer                
Facsimile No: 216.432.6281                

if to Lender, at:
JPMorgan Chase Bank, N.A.
1300 East Ninth Street, 13th Floor
Cleveland, OH 44114
Attention: Portfolio Manager            
Facsimile No: 216.781.2071

14.
Field Examinations and Appraisals (Section 8.03):

So long as no Event of Default has occurred or exists during such calendar year,
the Loan Parties shall not be obligated to reimburse the Lender for more than
the number of appraisals and field examinations set forth below during any
calendar year:

Field Examinations - One per calendar year, unless Availability is less than
12.5% of the Revolving Commitment at any time during such calendar year, in
which case the Lender may require additional field examinations.

Inventory Appraisals - One per calendar year, unless Availability is less than
12.5% of the Revolving Commitment at any time during such calendar year, in
which case the Lender may require additional inventory appraisals.

Equipment Appraisals – One per calendar year, unless Availability is less than
12.5% of the Revolving Commitment at any time during such calendar year, in
which case the Lender may require additional equipment appraisals.

15.
Governing State and Primary City (Section 8.09):

Governing State - Ohio

Primary City- Cleveland, Ohio

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Reporting Schedule

The Borrowers will furnish to the Lender:

(a)within 120 days after the end of each fiscal year of the Company, their
audited consolidated and, if applicable, consolidating balance sheet and related
statements of operations, stockholders' equity and cash flows as of the end of
and for such year, setting forth in each case in comparative form the figures
for the previous fiscal year, all reported on by independent public accountants
acceptable to the Lender (without a “going concern” or like qualification,
commentary or exception and without any qualification or exception as to the
scope of such audit) to the effect that such consolidated financial statements
present fairly in all material respects the financial condition and results of
operations of the Company and its consolidated Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied, accompanied by any
management letter prepared by said accountants;

(b)within 45 days after the end of each fiscal quarter of the Company, its
consolidated and, if applicable, consolidating balance sheet and related
statements of operations, stockholders' equity and cash flows as of the end of
and for such fiscal quarter and the then elapsed portion of the 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 of the Borrower
Representative as presenting fairly in all material respects the financial
condition and results of operations of the Company and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied, subject to normal year-end audit adjustments and the absence of
footnotes;

(c) within 30 days after the end of each fiscal month of the Company, its
consolidated and, if applicable, consolidating balance sheet and related
statements of operations, stockholders' equity and cash flows as of the end of
and for such fiscal month and the then elapsed portion of the 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 of the Borrower
Representative as presenting fairly in all material respects the financial
condition and results of operations of the Company and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied, subject to normal year-end audit adjustments and the absence of
footnotes;

(d)concurrently with any delivery of financial statements under clause (a), (b)
or (c) above, a certificate of a Financial Officer of the Borrower
Representative in form and detail acceptable to the Lender, (i) certifying, in
the case of the financial statements delivered under clause (b), as presenting
fairly in all material respects the financial condition and results of
operations of the Company and its consolidated Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied, subject to normal year-end
audit adjustments and the absence of footnotes, (ii) certifying as to whether a
Default or Event of Default has occurred and, if a Default or Event of Default
has occurred, specifying the details thereof and any action taken or proposed to
be taken with respect thereto, (iii) setting forth reasonably detailed
calculations demonstrating compliance with the covenants set forth on the
Financial Covenants Schedule attached hereto, and (iv) stating whether any
change in GAAP or in the application thereof has occurred since the date of the
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;

(e)within 45 days after the end of each fiscal year of the Company, a copy of
the plan and forecast (including a projected consolidated and consolidating
balance sheet, income statement and funds flow statement) of the Company and its
Subsidiaries for each month of such fiscal year in form and detail reasonably
satisfactory to the Lender;

(f)within 25 days of the end of each calendar month or during any Increased
Borrowing Base Reporting Period, by Wednesday of each week for the weekly period
ending on the Friday of the week prior to the date such Borrowing Base
Certificate is submitted (or, in each case the next Business Day if such day is
not a Business Day) and at such other times as may be necessary to re-determine
Availability or as requested by the Lender, as of the

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period then ended, a Borrowing Base Certificate and supporting information in
connection therewith, together with any additional reports with respect to the
Borrowing Base as the Lender may reasonably request;

(g)within 25 days of the end of each calendar month or during any Increased
Borrowing Base Reporting Period, by Wednesday of each week for the weekly period
ending on the Friday of the week prior, and at such other times as may be
requested by the Lender, as of the period then ended, all delivered
electronically in a text formatted file acceptable to the Lender (not in an
Adobe *.pdf file):

(i)    a detailed aging of the Borrowers’ Accounts including all invoices aged
by invoice date and due date (with an explanation of the terms offered) prepared
in a manner reasonably acceptable to the Lender, together with a summary
specifying the name, address, and balance due for each Account Debtor;
(ii)    a schedule detailing the Borrowers’ Inventory, in form reasonably
satisfactory to the Lender, (1) by location (showing Inventory in transit and
any Inventory located with a third party under any consignment, bailee
arrangement, or warehouse agreement), by class (raw material, work-in-process
and finished goods), by product type, and by volume on hand, which Inventory
shall be valued at the lower of cost (determined on a first-in, first-out basis)
or market and adjusted for Reserves as the Lender has previously indicated to
the Borrower Representative are deemed by the Lender to be appropriate and (2)
including a report of any variances or other results of Inventory counts
performed by the Borrowers since the last Inventory schedule (including
information regarding sales or other reductions, additions, returns, credits
issued by the Borrowers and complaints and claims made against the Borrowers);
(iii)    a worksheet of calculations prepared by the Borrowers to determine
Eligible Accounts and Eligible Inventory, such worksheets detailing the Accounts
and Inventory excluded from Eligible Accounts and Eligible Inventory and the
reason for such exclusion;
(iv)    a reconciliation of the Borrowers’ Accounts and Inventory between (A)
the amounts shown in the Borrowers’ general ledger and financial statements and
the reports delivered pursuant to clauses (i) and (ii) above, and (B) the
amounts and dates shown in the reports delivered pursuant to clauses (i) and
(ii) above and the Borrowing Base Certificate delivered pursuant to clause (e)
above as of such date; and
(v)    a reconciliation of the loan balance per the Borrowers’ general ledger to
the loan balance under this Agreement;
(vi)    a schedule and aging of the Borrowers’ accounts payable, delivered
electronically in a text formatted file acceptable to the Lender;
    
(h)
promptly upon the Lender's request:

(i)    copies of invoices issued by the Borrowers in connection with any
Accounts, credit memos, shipping and delivery documents, and other information
related thereto;
(ii)    copies of purchase orders, invoices, and shipping and delivery documents
in connection with any Inventory or Equipment purchased by any Loan Party; and
(iii)    a schedule detailing the balance of all intercompany accounts of the
Loan Parties;
(iv)    an updated customer list for the Borrowers and their Subsidiaries, which
list shall state the customer’s name, mailing address and phone number,
delivered electronically in a text formatted file acceptable to the Lender and
certified as true and correct by a Financial Officer;

2

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(v)    the Borrowers’ sales journal, cash receipts journal (identifying trade
and non-trade cash receipts) and debit memo/credit memo journal;
(vi)    copies of all tax returns filed by any Loan Party with the U.S. Internal
Revenue Service;
(vii)    a certificate of good standing or the substantive equivalent available
in the jurisdiction of incorporation, formation or organization for each Loan
Party from the appropriate governmental officer in such jurisdiction;
(i)promptly after any request therefor by the Lender, copies of (i) any
documents described in Section 101(k)(1) of ERISA that any Borrower or any ERISA
Affiliate may request with respect to any Multiemployer Plan and (ii) any
notices described in Section 101(l)(1) of ERISA that the Borrower or any ERISA
Affiliate may request with respect to any Multiemployer Plan; provided that if a
Borrower or any ERISA Affiliate has not requested such documents or notices from
the administrator or sponsor of the applicable Multiemployer Plan, the
applicable Borrower or the applicable ERISA Affiliate shall promptly make a
request for such documents and notices from such administrator or sponsor and
shall provide copies of such documents and notices promptly after receipt
thereof; and
(j)promptly following any request therefor, copies of any detailed audit
reports, management letters or recommendations submitted to the board of
directors (or the audit committee of the board of directors) of any Borrower by
independent accountants in connection with the accounts or books of any Borrower
or any Subsidiary, or any audit of any of them as the Lender may reasonably
request; and

(k)promptly following any request therefor, (x) such other information regarding
the operations, assets, liabilities, changes in ownership of Equity Interests,
business affairs and financial condition of any Loan Party or any Subsidiary, or
compliance with the terms of the Loan Documents, as the Lender may reasonably
request, and (y) information and documentation reasonably requested by the
Lender for purposes of compliance with applicable “know your customer” and
anti-money laundering rules and regulations, including the USA PATRIOT Act and
the Beneficial Ownership Regulation.
Documents required to be delivered pursuant to Section 5.01(a) or (b) (to the
extent any such documents are included in materials otherwise filed with the
SEC) may be delivered electronically and, if so delivered, shall be deemed to
have been delivered on the date (i) on which such materials are publicly
available as posted on the Electronic Data Gathering, Analysis and Retrieval
system (EDGAR); or (ii) on which such documents are posted on the Borrower’s
behalf on an Internet or intranet website, if any, to which the Lender has
access (whether a commercial, third-party website or whether made available by
the Lender); provided that: (A) upon written request by the Lender to the
Borrower, the Borrower shall deliver paper copies of such documents to the
Lender until a written request to cease delivering paper copies is given by the
Lender and (B) the Borrower shall notify the Lender (by telecopier or electronic
mail) of the posting of any such documents and provide to the Lender by
electronic mail electronic versions (i.e., soft copies) of such documents.

3

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Financial Covenants Schedule

(A)     Financial Covenants Definitions:

“Capital Expenditures” means, without duplication, any expenditure or commitment
to expend money for any purchase or other acquisition of any asset which would
be classified as a fixed or capital asset on a consolidated balance sheet of the
Company and its Subsidiaries prepared in accordance with GAAP.

“Capital Lease Obligations” of any Person means the 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 to be classified and accounted for as capital leases or
financing leases on a balance sheet of such Person under GAAP, and the amount of
such obligations shall be the capitalized amount thereof determined in
accordance with GAAP.

“EBITDA” means, for any period, Net Income for such period plus

(a)    without duplication and to the extent deducted in determining Net Income
for such period, the sum of:

(i)    Interest Expense for such period,

(ii)    income tax expense for such period,

(iii)    all amounts attributable to depreciation and amortization expense for
such period,

(iv)    non-recurring charges, fees, costs and expenses incurred during such
period in connection with the negotiation and closing of this Agreement and the
other Loan Documents or in connection with the amendment, waiver, consent or
other modification to this Agreement or any other Loan Document or the
administration hereof or thereof in an aggregate amount under this clause (iv)
not to exceed $200,000 for any such period,

(v)    non-recurring extraordinary cash losses or expenses not incurred in the
ordinary course of business (other than those described in clause (iv) above)
that are reasonably acceptable to the Lender and supported by documentation
reasonably acceptable to the Lender;

(vi)    any increase in the reserve for inventories for which cost is determined
using the last in, first out (“LIFO”) method;

(vii)    losses incurred in connection with the disposal of operating assets;
and

(viii)    any other non-cash charges for such period (but excluding any non-cash
charge in respect of an item that was included in Net Income in a prior period),
minus

(b)    without duplication and to the extent included in Net Income for such
period, the sum of (i) any extraordinary gains and any non-cash items of income
for such period, (ii) any cash payments made during such period in respect of
non-cash charges described in clause (a) taken in a prior period, (iii) any
gains in connection with the disposal of operating assets and (iv) any decrease
in the reserve for inventories for which cost is determined using the last in,
first out (“LIFO”) method, all calculated for the Company and its Domestic
Subsidiaries on a consolidated basis in accordance with GAAP but without giving
effect to their Foreign Subsidiaries; provided that, notwithstanding the
foregoing, “EBITDA” for certain months prior to the Effective Date shall be in
such amounts as may be separately agreed upon between the Borrowers and the
Lender.

“Fixed Charge Coverage Ratio” means the ratio, determined as of the end of each
of fiscal month of the Borrowers for the twelve fiscal month period then ended,
of (a) EBITDA minus Unfinanced Capital Expenditures to

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(b) Fixed Charges, all calculated for the Company and its Domestic Subsidiaries
on a consolidated basis in accordance with GAAP but without giving effect to
their Foreign Subsidiaries; provided that the Fixed Charge Coverage Ratio shall
be determined (i) for the eleven month period ended when determined as of August
31, 2018, and (ii) for the twelve month period ended when determined as of
September 30, 2018 or any fiscal month thereafter.

“Fixed Charges” means, for any period, without duplication, cash Interest
Expense, plus prepayments (excluding prepayments to a Revolving Loan) and
scheduled principal payments on Indebtedness made during such period, plus
expense for taxes paid in cash, plus Restricted Payments paid in cash, plus
Capital Lease Obligation payments, plus cash contributions to any Plan, all
calculated for the Company and its Domestic Subsidiaries on a consolidated basis
in accordance with GAAP but without giving effect to their Foreign Subsidiaries;
provided that, notwithstanding the foregoing, cash Interest Expense and
scheduled principal payments on Indebtedness for periods prior to the Effective
Date shall be adjusted in a manner acceptable to the Lender to eliminate any
such amounts attributable to Indebtedness paid in full on the Effective Date.

    “Interest Expense” means, for any period, total interest expense (including
that attributable to Capital Lease Obligations) of Company and its Domestic
Subsidiaries, but without giving effect to their Foreign Subsidiaries, for such
period with respect to all outstanding Indebtedness of Company and its Domestic
Subsidiaries (including all commissions, discounts and other fees and charges
owed with respect to letters of credit and bankers’ acceptances and net costs
under Swap Agreements in respect of interest rates to the extent such net costs
are allocable to such period in accordance with GAAP), calculated on a
consolidated basis for Company and its Domestic Subsidiaries for such period in
accordance with GAAP but without giving effect to their Foreign Subsidiaries.

“Net Income” means, for any period, the consolidated net income (or loss) of
Company and its Domestic Subsidiaries, determined on a consolidated basis in
accordance with GAAP but without giving effect to their Foreign Subsidiaries;
provided that there shall be excluded (a) the income (or deficit) of any Person
accrued prior to the date it becomes a Subsidiary or is merged into or
consolidated with such Person and its Subsidiaries, (b) the income (or deficit)
of any Person (other than a Subsidiary) in which such Person or its Subsidiaries
has an ownership interest, except to the extent that any such income is actually
received by such Person or such Subsidiary in the form of dividends or similar
distributions and (c) the undistributed earnings of any Subsidiary to the extent
that the declaration or payment of dividends or similar distributions by such
Subsidiary is not at the time permitted by the terms of any contractual
obligation (other than under any Loan Document) or Requirement of Law applicable
to such Subsidiary.

“Other Restricted Payments” means Restricted Payments for the Company subject to
the satisfaction of the Payment Condition.

“Payment Condition” shall be deemed to be satisfied in connection with a
Restricted Payment if:

(A)    no Default or Event of Default has occurred and is continuing or would
result immediately after giving effect to such Restricted Payment;

(B)     immediately after giving effect to and at all times during the 30-day
period immediately prior to such Restricted Payment, the Borrowers shall have
(1) Availability calculated on a pro forma basis after giving effect to such
Restricted Payment of not less than 20% of the Revolving Commitment and (2) a
Fixed Charge Coverage Ratio for the trailing twelve months calculated on a pro
forma basis after giving effect to such Restricted Payment of not less than 1.25
to 1.00; and

(C)    Borrowers shall have delivered to the Lender a certificate in form and
substance reasonably satisfactory to the Lender certifying as to the items
described in (A) and (B) above and attaching calculations for item (B).

“Unfinanced Capital Expenditures” means, for any period, Capital Expenditures
made during such period which are not financed from the proceeds of any
Indebtedness (other than the Revolving Loans; it being understood

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and agreed that, to the extent any Capital Expenditures are financed with
Revolving Loans, such Capital Expenditures shall be deemed Unfinanced Capital
Expenditures).
    
(B)     Financial Covenants.

(i)    Fixed Charge Coverage Ratio. The Borrowers will not permit the Fixed
Charge Coverage Ratio, at any time on or after August 31, 2018 that Availability
is equal to or less than 12.5% of the Revolving Commitment (tested as of the
most recently ended fiscal month for which financial statements have been
received under Section 5.01), to be less than 1.1 to 1.0.

(C) Other Restricted Payments. In addition to any Restricted Payments permitted
pursuant to Section 6.08, the Borrowers may make Other Restricted Payments.

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Closing Conditions Schedule
(a)Closing Certificates; Certified Certificate of Incorporation; Good Standing
Certificates. The Lender shall have received (i) a certificate of each Loan
Party, dated the Effective Date and executed by its Secretary or Assistant
Secretary, which shall (A) certify the resolutions of its Board of Directors,
members or other body authorizing the execution, delivery and performance of the
Loan Documents to which it is a party, (B) identify by name and title and bear
the signatures of the each Financial Officer and any other officers of such Loan
Party authorized to sign the Loan Documents to which it is a party, and (C)
contain appropriate attachments, including the certificate or articles of
incorporation or organization of each Loan Party certified by the relevant
authority of the jurisdiction of organization of such Loan Party and a true and
correct copy of its by‑laws or operating, management or partnership agreement,
and (ii) a long form good standing certificate for each Loan Party from its
jurisdiction of organization.
(b)Financial Statements and Projections. The Lender shall have received (i)
audited consolidated financial statements of the Borrowers for the 2017 fiscal
year, (ii) unaudited interim consolidated financial statements of the Borrowers
for each fiscal month and quarter ended after the date of the latest applicable
financial statements delivered pursuant to clause (i) of this paragraph as to
which such financial statements are available, and such financial statements
shall not, in the reasonable judgment of the Lender, reflect any material
adverse change in the consolidated financial condition of the Borrowers, as
reflected in the financial statements or projections and (iii) satisfactory
projections for 2018 and 2019.
(c)Fees. The Lender shall have received all fees required to be paid, and all
expenses for which invoices have been presented (including the reasonable fees
and expenses of legal counsel), on or before the Effective Date. All such
amounts will be paid with proceeds of Loans made on the Effective Date and will
be reflected in the funding instructions given by the Borrowers to the Lender on
or before the Effective Date.
Closing Availability. After giving effect to all Borrowings to be made on the
Effective Date and the issuance of any Letters of Credit on the Effective Date
and payment of all fees and expenses due hereunder, and with all of the Loan
Parties’ indebtedness, liabilities, and obligations current, the Borrowers’
Availability shall not be less than $4,000,000.
(d)Filings, Registrations and Recordings. Each document (including any Uniform
Commercial Code financing statement) required by the Collateral Documents or
under law or reasonably requested by the Lender to be filed, registered or
recorded in order to create in favor of the Lender, for the benefit of the
Secured Parties, a perfected Lien on the Collateral described therein, prior and
superior in right to any other Person (other than with respect to Liens
expressly permitted by Section 6.02), shall be in proper form for filing,
registration or recordation.
(e)No Default Certificate. The Lender shall have received a certificate, signed
by the Financial Officer of each Borrower, on the initial Borrowing date (i)
stating that no Default has occurred and is continuing, (ii) stating that the
representations and warranties contained in Article III are true and correct as
of such date, and (iii) certifying any other factual matters as may be
reasonably requested by the Lender.
(f)Opinion of Counsel. Each of the Loan Parties shall have delivered a written
opinion of such Loan Party’s counsel, addressed to the Lender in form and
substance reasonably satisfactory to the Lender and its counsel.
(g)Lien Searches. The Lender shall have received the results of a recent lien
search in such jurisdictions as the Lender shall deem appropriate, and such
search shall reveal no liens on any of the assets of the Loan Parties except for
liens permitted by Section 6.02 or discharged on or prior to the Effective Date
pursuant to a pay-off letter or other documentation reasonably satisfactory to
the Lender.
(h)Pay-Off Letter. The Lender shall have received satisfactory pay-off letters
for all existing Indebtedness to be repaid from the proceeds of the initial
Borrowing, confirming that all Liens upon any of the property of the Loan
Parties constituting Collateral will be terminated concurrently with such
payment and all letters of credit issued or guaranteed as part of such
Indebtedness shall have been cash collateralized or supported by a Letter of
Credit.

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(i)Funding Account. The Lender shall have received a notice designating the
Funding Account.
(j)Collateral Access and Control Agreements. The Lender shall have received each
Collateral Access Agreement and Control Agreement required to be provided
pursuant to the Security Agreement.
(k)Solvency. The Lender shall have received a solvency certificate in form and
substance reasonably satisfactory to the Lender from a Financial Officer.
(l)Borrowing Base Certificate. The Lender shall have received a Borrowing Base
Certificate which calculates the Borrowing Base as of a recent date determined
by the Lender.
(m)Money Transfer Authorizations. The Borrowers shall have delivered money
transfer authorizations as the Lender may have reasonably requested.
(n)Audits, Appraisals, etc. The Loan Parties shall have delivered (i) Collateral
audits, satisfactory to the Lender, prepared by an independent firm engaged
directly by the Lender and (ii) appraisals, prepared by an independent appraiser
engaged directly by the Lender, of the inventory and equipment of the Loan
Parties and which audits and appraisals shall be satisfactory to the Lender,
together with evidence of compliance with applicable federal regulations
governing loans in areas having special flood hazards.
(o)Insurance. The Lender shall have received evidence of insurance coverage in
form, scope, and substance reasonably satisfactory to the Lender and otherwise
in compliance with the terms of Section 5.10 of the Credit Agreement.
(p)Letter of Credit Application. The Borrowers shall have delivered a properly
completed letter of credit application if the issuance of a Letter of Credit
will be required on the Effective Date.
(q)ERISA. If any Borrower has any Plans, such Borrower shall have delivered to
the Lender its most recent statement of the unfunded liabilities of such Plan,
certified as correct by an actuary enrolled under ERISA.
(r)USA PATRIOT Act. The Lender shall have received (i) at least five (5) days
prior to the Effective Date, all documentation and other information regarding
each Borrower requested in connection with applicable “know your customer” and
anti-money laundering rules and regulations, including the USA PATRIOT Act, to
the extent requested in writing of the Borrowers at least ten (10) days prior to
the Effective Date, and (ii) to the extent any Borrower qualifies as a “legal
entity customer” under the Beneficial Ownership Regulation, at least five (5)
days prior to the Effective Date to the extent the Lender has requested, in a
written notice to the Borrowers at least ten (10) days prior to the Effective
Date, a Beneficial Ownership Certification in relation to each Borrower.
(s)Other Closing Deliverables. The Borrowers shall have delivered to the Lender,
in each case in form and substance reasonably satisfactory to the Lender, each
of the other agreements, instruments, certificates and items set forth in the
closing checklist or schedule of closing documents most recently provided by the
Lender (or its counsel) to the Borrowers (or their counsel).

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Permitted Acquisitions Rider

“Permitted Acquisition” is added to the exceptions permitted by Section 6.04 and
means any Acquisition by any Loan Party in a transaction that satisfies each of
the following requirements:
(a)such Acquisition is not a hostile or contested acquisition;
(b)the business acquired in connection with such Acquisition is (i) located in
the U.S., (ii) organized under applicable U.S. and state laws, and (iii) not
engaged, directly or indirectly, in any line of business other than the
businesses in which the Loan Parties are engaged on the Effective Date and any
business activities that are substantially similar, related, or incidental
thereto;
(c)both before and after giving effect to such Acquisition and the Loans (if
any) requested to be made in connection therewith, each of the representations
and warranties in the Loan Documents is true and correct (except any such
representation or warranty which relates to a specified prior date) and no
Default exists, will exist, or would result therefrom and all transactions in
connection with any such Acquisition shall be consummated, in all material
respects, in accordance with all applicable laws;
(d)as soon as available, but not less than 30 days prior to such Acquisition,
the Borrower Representative has provided the Lender (i) notice of such
Acquisition and (ii) a copy of all business and financial information reasonably
requested by the Lender including pro forma financial statements, statements of
cash flow, and Availability projections;
(e)if the Accounts and Inventory acquired in connection with such Acquisition
are proposed to be included in the determination of the Borrowing Base, the
Lender shall have conducted an audit and field examination of such Accounts and
Inventory, the results of which shall be satisfactory to the Lender;
(f)the total consideration (including the maximum potential aggregate amount of
all deferred payment obligations (including earn-outs) and Indebtedness assumed
or incurred) of such Acquisition does not exceed (when combined with all other
Acquisitions made during the same period) $5,000,000 in any fiscal year of the
Borrowers and no Loan Party shall, as a result of or in connection with any such
acquisition, assume or incur any direct or contingent liabilities (whether
relating to environmental, tax, litigation, or other matters) that could
reasonably be expected to have a Material Adverse Effect;
(g)if such Acquisition is an acquisition of the Equity Interests of a Person,
such Acquisition is structured so that the acquired Person shall become a
wholly-owned Subsidiary of a Loan Party and a Loan Party pursuant to the terms
of this Agreement;
(h)if such Acquisition is an acquisition of assets, the Acquisition is
structured so that a Borrower shall acquire such assets;
(i)if such Acquisition is an acquisition of Equity Interests, such Acquisition
will not result in any violation of Regulation U;
(j)if such Acquisition involves a merger or a consolidation involving any
Borrower or any other Loan Party, such Borrower or such Loan Party, as
applicable, shall be the surviving entity;
(k)no Loan Party shall, as a result of or in connection with any such
Acquisition, assume or incur any direct or contingent liabilities (whether
relating to environmental, tax, litigation, or other matters) that could
reasonably be expected to have a Material Adverse Effect;
(l)in connection with an Acquisition of the Equity Interests of any Person, all
Liens on property of such Person, other than Permitted Encumbrances, shall be
terminated unless the Lender in its sole discretion consents

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otherwise, and in connection with an Acquisition of the assets of any Person,
all Liens on such assets shall be terminated;
(m)the Fixed Charge Coverage Ratio shall be not less than 1.25 to 1.00 for the
most recently completed twelve-month period prior to the date such Acquisition
is consummated for which the Borrowers are then required to have delivered
interim financial statements to the Lender in accordance with the terms of the
Reporting Schedule attached hereto, as calculated on a pro forma basis as if
such Acquisition (and any Loans made in connection therewith) had been
consummated on the last day of such period;
(n)the Borrower Representative shall certify to the Lender (and provide the
Lender with a pro forma calculation in form and substance reasonably
satisfactory to the Lender) that, after giving effect to the completion of such
Acquisition, on a pro forma basis and at all times during the 60-day period
prior to the consummation of such Acquisition, Availability will not be less
than 20% of the Revolving Commitment then in effect, which includes all
consideration given in connection with such Acquisition, other than Equity
Interests of any applicable Borrower delivered to the seller(s) in such
Acquisition, as having been paid in cash at the time of making such Acquisition;
(o)all actions required to be taken with respect to any newly acquired or formed
wholly-owned Subsidiary of a Borrower or a Loan Party, as applicable, required
under Section 5.14 shall have been taken; and
(p)    the Borrower Representative shall have delivered to the Lender the final
executed acquisition agreement and all other material documentation relating to
such Acquisition within 10 days following the consummation thereof.

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