Exhibit 10.1

REVOLVING CREDIT
 
AND
 
SECURITY AGREEMENT
 
 
 
PNC BANK, NATIONAL ASSOCIATION
 
(AS LENDER AND AS AGENT)
 
AND
 
SUCH OTHER LENDERS WHICH ARE NOW OR HEREAFTER A PARTY HERETO
 
WITH
 
HORSEHEAD CORPORATION, A DELAWARE CORPORATION
 
(AS BORROWER)
 
AND
 
THE GUARANTORS PARTY HERETO
 
 
 
 
September 28, 2011
 
 
 
 
 

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TABLE OF CONTENTS
 
I.
DEFINITIONS.
1
 
1.1.
Accounting Terms.
1
 
1.2.
General Terms.
1
 
1.3.
Uniform Commercial Code Terms.
25
 
1.4.
Certain Matters of Construction.
26
II.
ADVANCES, PAYMENTS.
27
 
2.1.
Revolving Advances.
27
 
2.2.
Procedure for Revolving Advances Borrowing.
27
 
2.3.
Disbursement of Advance Proceeds.
30
 
2.4.
Maximum Advances.
30
 
2.5.
Repayment of Advances.
30
 
2.6.
Repayment of Excess Advances.
31
 
2.7.
Statement of Account.
31
 
2.8.
Letters of Credit.
31
 
2.9.
Issuance of Letters of Credit.
31
 
2.10.
Requirements For Issuance of Letters of Credit.
32
 
2.11.
Disbursements, Reimbursement.
33
 
2.12.
Repayment of Participation Advances.
34
 
2.13.
Documentation.
34
 
2.14.
Determination to Honor Drawing Request.
35
 
2.15.
Nature of Participation and Reimbursement Obligations.
35
 
2.16.
Indemnity.
36
 
2.17.
Liability for Acts and Omissions.
37
 
2.18.
Additional Payments.
38
 
2.19.
Manner of Borrowing and Payment.
38
 
2.20.
Use of Proceeds.
40
 
2.21.
Defaulting Lender.
40
III.
INTEREST AND FEES.
41
 
3.1.
Interest.
41
 
3.2.
Letter of Credit Fees.
42
 
3.3.
Facility Fee.
43
 
3.4.
Fee Letter.
43
 
3.5.
Computation of Interest and Fees.
43
 
3.6.
Maximum Charges.
44
 
3.7.
Increased Costs.
44
 
3.8.
Basis For Determining Interest Rate Inadequate or Unfair.
45
 
3.9.
Capital Adequacy.
45
 
3.10.
Gross Up for Taxes.
46
 
3.11.
Withholding Tax Exemption.
46
IV.
COLLATERAL:  GENERAL TERMS.
47
 
4.1.
Security Interest in the Collateral.
47
 
4.2.
Perfection of Security Interest.
47
 
4.3.
Disposition of Collateral.
48
 
4.4.
Preservation of Collateral.
48

 
 
 
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4.5.
Ownership of Collateral.
49
 
4.6.
Defense of Agent's and Lenders' Interests.
49
 
4.7.
Books and Records.
50
 
4.8.
Intentionally Omitted.
50
 
4.9.
Compliance with Laws.
50
 
4.10.
Inspection of Premises; Appraisals.
50
 
4.11.
Insurance.
51
 
4.12.
Failure to Pay Insurance.
52
 
4.13.
Payment of Taxes.
52
 
4.14.
Payment of Leasehold Obligations.
52
 
4.15.
Receivables.
53
 
4.16.
Inventory.
55
 
4.17.
Maintenance of Equipment.
55
 
4.18.
Exculpation of Liability.
56
 
4.19.
Environmental Matters.
56
 
4.20.
Financing Statements.
56
V.
REPRESENTATIONS AND WARRANTIES.
57
 
5.1.
Authority.
57
 
5.2.
Formation and Qualification.
57
 
5.3.
Survival of Representations and Warranties.
57
 
5.4.
Tax Returns.
58
 
5.5.
Financial Statements.
58
 
5.6.
Entity Names.
59
 
5.7.
O.S.H.A. and Environmental Compliance.
59
 
5.8.
Solvency; No Litigation, Violation, Indebtedness or Default.
59
 
5.9.
Patents, Trademarks, Copyrights and Licenses.
61
 
5.10.
Licenses and Permits.
61
 
5.11.
Default of Indebtedness.
61
 
5.12.
No Default.
61
 
5.13.
No Burdensome Restrictions.
61
 
5.14.
No Labor Disputes.
62
 
5.15.
Margin Regulations.
62
 
5.16.
Investment Company Act.
62
 
5.17.
Disclosure.
62
 
5.18.
Swaps.
62  
5.19.
Conflicting Agreements.
62
 
5.20.
Application of Certain Laws and Regulations.
63
 
5.21.
Business and Property of Borrower Parties.
63
 
5.22.
Section 20 Subsidiaries.
63
 
5.23.
Anti-Terrorism Laws.
63
 
5.24.
Trading with the Enemy.
64
 
5.25.
Federal Securities Laws.
64
VI.
AFFIRMATIVE COVENANTS.
64
 
6.1.
Payment of Fees.
64
 
6.2.
Conduct of Business and Maintenance of Existence and Assets.
64
 
6.3.
Violations.
65

 
 
 
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6.4.
Government Receivables.
65
 
6.5.
Financial Covenants.
65
 
6.6.
Execution of Supplemental Instruments.
66
 
6.7.
Payment of Indebtedness.
66
 
6.8.
Standards of Financial Statements.
66
 
6.9.
Federal Securities Laws.
66
VII.
NEGATIVE COVENANTS.
66
 
7.1.
Merger, Consolidation, Acquisition and Sale of Assets.
66
 
7.2.
Creation of Liens.
68
 
7.3.
Guarantees.
68
 
7.4.
Investments.
68
 
7.5.
Loans.
69
 
7.6.
Dividends/Distributions.
69
 
7.7.
Indebtedness.
69
 
7.8.
Nature of Business.
70
 
7.9.
Transactions with Affiliates.
70
 
7.10.
Leases
70
 
7.11.
Subsidiaries.
70
 
7.12.
Fiscal Year and Accounting Changes.
71
 
7.13.
Pledge of Credit.
71
 
7.14.
Amendment of Organizational Documents.
71
 
7.15.
Compliance with ERISA.
71
 
7.16.
Prepayment of Indebtedness.
72
 
7.17.
Anti-Terrorism Laws.
72
 
7.18.
Membership/Partnership Interests.
72
 
7.19.
Trading with the Enemy Act.
72
 
7.20.
Other Agreements.
72
 
7.21.
Double Negative Pledge.
73
VIII.
CONDITIONS PRECEDENT.
73
 
8.1.
Conditions to Initial Advances.
73
 
8.2.
Conditions to Each Advance.
76
IX.
INFORMATION AS TO LOAN PARTIES.
76
 
9.1.
Disclosure of Material Matters.
77
 
9.2.
Schedules.
77
 
9.3.
Intentionally Omitted.
77
 
9.4.
Litigation.
77
 
9.5.
Material Occurrences.
77
 
9.6.
Government Receivables.
78
 
9.7.
Annual Financial Statements.
78
 
9.8.
Quarterly Financial Statements.
78
 
9.9.
Monthly Financial Statements.
79
 
9.10.
Other Reports.
79
 
9.11.
Additional Information.
79
 
9.12.
Projected Operating Budget.
79
 
9.13.
Environmental Matters.
79
 
9.14.
Notice of Suits, Adverse Events.
80

 
 
 
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9.15.
ERISA Notices and Requests.
80
 
9.16.
Additional Documents.
81
X.
EVENTS OF DEFAULT.
81
 
10.1.
Nonpayment.
81
 
10.2.
Breach of Representation.
81
 
10.3.
Financial Information.
81
 
10.4.
Judicial Actions.
81
 
10.5.
Noncompliance.
82
 
10.6.
Judgments.
82
 
10.7.
Bankruptcy.
82
 
10.8.
Inability to Pay.
82
 
10.9.
Affiliate Bankruptcy.
82
 
10.10.
Material Adverse Effect.
83
 
10.11.
Lien Priority.
83
 
10.12.
Cross Default - Indebtedness.
83
 
10.13.
Cross Default – Other Agreements.
83
 
10.14.
Breach of Guaranty.
83
 
10.15.
Change of Ownership.
84
 
10.16.
Invalidity.
84
 
10.17.
Licenses.
84
 
10.18.
Seizures.
84
 
10.19.
Holding.
84
 
10.20.
Pension Plans.
84
XI.
LENDERS' RIGHTS AND REMEDIES AFTER DEFAULT.
85
 
11.1.
Rights and Remedies.
85
 
11.2.
Agent's Discretion.
86
 
11.3.
Setoff.
87  
11.4.
Rights and Remedies not Exclusive.
87
 
11.5.
Allocation of Payments After Event of Default.
87
XII.
WAIVERS AND JUDICIAL PROCEEDINGS.
88
 
12.1.
Waiver of Notice.
88
 
12.2.
Delay.
88  
12.3.
Jury Waiver.
88
XIII.
EFFECTIVE DATE AND TERMINATION.
89
 
13.1.
Term.
89  
13.2.
Termination.
89
XIV.
REGARDING AGENT.
89
 
14.1.
Appointment.
89
 
14.2.
Nature of Duties.
90
 
14.3.
Lack of Reliance on Agent and Resignation.
90
 
14.4.
Certain Rights of Agent.
91
 
14.5.
Reliance.
91
 
14.6.
Notice of Default.
91
 
14.7.
Indemnification.
92
 
14.8.
Agent in its Individual Capacity.
92
 
14.9.
Delivery of Documents.
92

 
 
 
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14.10.
Borrower's Undertaking to Agent.
92
 
14.11.
No Reliance on Agent's Customer Identification Program.
92
 
14.12.
Other Agreements.
93
XV.
MISCELLANEOUS.
93
 
15.1.
Governing Law.
93
 
15.2.
Entire Understanding.
94
 
15.3.
Successors and Assigns; Participations; New Lenders.
96
 
15.4.
Application of Payments.
98
 
15.5.
Indemnity.
98
 
15.6.
Notice.
99  
15.7.
Survival.
100
 
15.8.
Severability.
101
 
15.9.
Expenses.
101
 
15.10.
Injunctive Relief.
101
 
15.11.
Consequential Damages.
101
 
15.12.
Captions.
101
 
15.13.
Counterparts; Facsimile Signatures.
102
 
15.14.
Construction.
102
 
15.15.
Confidentiality; Sharing Information.
102
 
15.16.
Publicity.
103
 
15.17.
Certifications From Banks and Participants; USA PATRIOT Act.
103
 
15.18.
Joinder of Guarantors.
103

 

 
 
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LIST OF EXHIBITS AND SCHEDULES
 
Exhibits
     
Exhibit 1.2
Borrowing Base Certificate
Exhibit 2.1(a)
Revolving Credit Note
Exhibit 5.5(a)
Financial Projections
Exhibit 8.1(i)
Financial Condition Certificate
Exhibit 15.3
Commitment Transfer Supplement
   
Schedules
     
Schedule 1.2(B)
Permitted Encumbrances
Schedule 1.2(E)
Existing Bank Accounts
Schedule 2.9
Existing Letters of Credit
Schedule 4.5
Equipment and Inventory Locations
Schedule 4.15(h)
Deposit and Investment Accounts
Schedule 4.19
Real Property
Schedule 5.1
Consents
Schedule 5.2(a)
States of Qualification and Good Standing
Schedule 5.2(b)
Subsidiaries
Schedule 5.4
Federal Tax Identification Number
Schedule 5.6
Prior Names
Schedule 5.8(b)
Litigation
Schedule 5.8(d)
Plans
Schedule 5.9
Intellectual Property, Source Code Escrow Agreements
Schedule 5.10
Licenses and Permits
Schedule 5.14
Labor Disputes
Schedule 7.1
Excluded Property
Schedule 7.3
Guarantees
Schedule 7.7
Indebtedness

 
 
 
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REVOLVING CREDIT
AND
SECURITY AGREEMENT
 
Revolving Credit and Security Agreement dated September 28, 2011, among
Horsehead Corporation, a Delaware corporation (the "Borrower"), the Guarantors
(as hereinafter defined), the financial institutions which are now or which
hereafter become a party hereto (collectively, the "Lenders" and individually a
"Lender") and PNC Bank, National Association ("PNC"), as agent for the Lenders
(PNC, in such capacity, the "Agent").
 
IN CONSIDERATION of the mutual covenants and undertakings herein contained, the
receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound hereby, Borrower, Guarantors, Lenders and Agent hereby agree as
follows:
 
I.              DEFINITIONS.
 
1.1.          Accounting Terms.
 
As used in this Agreement, the Other Documents or any certificate, report or
other document made or delivered pursuant to this Agreement, accounting terms
not defined in Section 1.2 or elsewhere in this Agreement and accounting terms
partly defined in Section 1.2 to the extent not defined, shall have the
respective meanings given to them under GAAP; provided, however, whenever such
accounting terms are used for the purposes of determining compliance with
financial covenants in this Agreement, such accounting terms shall be defined in
accordance with GAAP as applied in preparation of the audited financial
statements of Holding for the fiscal year ended December 31, 2010.
 
1.2.          General Terms.
 
For purposes of this Agreement the following terms shall have the following
meanings:
 
"Adjusted EBITDA" shall mean, as of any date of determination, EBITDA of the
Borrower and its Subsidiaries, as adjusted (without duplication) to add-back all
non-cash expense items and one-time non-recurring expenses or charges for
discontinued operations, restructuring, impairment and other charges as reviewed
and approved by the Agent, in each case, as consolidated and determined for the
Borrower and its Subsidiaries in accordance with GAAP.
 
"Adjustment Date" shall have the meaning set forth in Section 3.1(b) hereof.
 
"Advance Rates" shall have the meaning set forth in Section 2.1 (a)(y)(ii)
hereof.
 
"Advances" shall mean and include the Revolving Advances and Letters of Credit.
 
 
 

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"Affiliate" of any Person shall mean (a) any Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with
such Person, or (b) any Person who is a director, managing member, general
partner or officer (i) of such Person, (ii) of any Subsidiary of such Person or
(iii) of any Person described in clause (a) above. For purposes of this
definition, control of a Person shall mean the power, direct or indirect, (x) to
vote five percent (5%) or more of the Equity Interests having ordinary voting
power for the election of directors of such Person or other Persons performing
similar functions for any such Person, or (y) to direct or cause the direction
of the management and policies of such Person whether by ownership of Equity
Interests, contract or otherwise.
 
"Agent" shall have the meaning set forth in the preamble to this Agreement and
shall include its successors and assigns.
 
"Agreement" shall mean this Revolving Credit and Security Agreement, as the same
may be amended, restated, supplemented or otherwise modified from time to time.
 
"Alternate Base Rate" shall mean, for any day, a rate per annum equal to the
higher of (i) the Base Rate in effect on such day, (ii) the Federal Funds Open
Rate in effect on such day plus one half of one percent (0.5%) and (iii) the
Daily LIBOR Rate plus one percent (1%). For purposes of this definition, "Daily
LIBOR Rate" shall mean, for any day, the rate per annum determined by Agent by
dividing (x) the Published Rate by (y) a number equal to 1.00 minus the
percentage prescribed by the Federal Reserve for determining the maximum reserve
requirements with respect to any eurocurrency funding by banks on such day. For
the purposes of this definition, "Published Rate" shall mean the rate of
interest published each Business Day in The Wall Street Journal "Money Rates"
listing under the caption "London Interbank Offered Rates" for a one month
period (or, if no such rate is published therein for any reason, then the
Published Rate shall be the eurodollar rate for a one month period as published
in another publication determined by Agent).
 
"Alternate Source" shall have the meaning set forth in the definition of
"Federal Funds Open Rate".
 
"Alternative Source" shall have the meaning set forth in the definition of
"Eurodollar Rate".
 
"Anti-Terrorism Laws" shall mean any Applicable Laws relating to terrorism or
money laundering, including Executive Order No. 13224, the USA PATRIOT Act, the
Applicable Laws comprising or implementing the Bank Secrecy Act, and the
Applicable Laws administered by the United States Treasury Department's Office
of Foreign Asset Control (as any of the foregoing Applicable Laws may from time
to time be amended, renewed, extended, or replaced).
 
"Applicable Base Rate Margin" shall have the meaning set forth in Section 3.1(b)
thereof.
 
"Applicable Eurodollar Rate Margin" shall have the meaning set forth in Section
3.1(b) thereof.
 
"Applicable Facility Fee Rate" shall have the meaning set forth in Section 3.3
thereof.
 
 
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"Applicable Law" shall mean all laws, rules and regulations applicable to the
Person, conduct, transaction, covenant, Other Document or contract in question,
including all applicable common law and equitable principles; all provisions of
all applicable state, federal and foreign constitutions, statutes, rules,
regulations, treaties, directives and orders of any Governmental Body, and all
orders, judgments and decrees of all courts and arbitrators.
 
"Applicable Letter of Credit Fee Percentage" shall have the meaning set forth in
Section 3.2 hereof.
 
"Authority" shall mean any state agency or other Person responsible in whole or
in part for environmental matters in the state in which any Real Property is
located or the United States Environmental Protection Agency
 
"Average Undrawn Availability" shall mean, as of any date of determination, the
average of Undrawn Availability for the fiscal quarter most recently ended.
 
"Base Rate" shall mean the base commercial lending rate of PNC as publicly
announced to be in effect from time to time, such rate to be adjusted
automatically, without notice, on the effective date of any change in such rate.
This rate of interest is determined from time to time by PNC as a means of
pricing some loans to its customers and is neither tied to any external rate of
interest or index nor does it necessarily reflect the lowest rate of interest
actually charged by PNC to any particular class or category of customers of PNC.
 
"Blocked Accounts" shall have the meaning set forth in Section 4.15(h).
 
"Blocked Account Agreement" shall mean the Blocked Account Agreement dated of
even date herewith made by Borrower to Agent for the benefit of the Lenders with
respect to Borrower's bank accounts described in Section 4.15, but in any case,
excluding the Existing Bank Accounts.
 
"Blocked Account Bank" shall have the meaning set forth in Section 4.15(h).
 
"Blocked Person" shall have the meaning set forth in Section 5.23(b) hereof.
 
"Borrower" shall have the meaning set forth in the preamble to this Agreement
and shall extend to all permitted successors and assigns of such Person.
 
"Borrower's Account" shall have the meaning set forth in Section 2.7.
 
"Borrower Party" or "Borrower Parties" shall mean, singularly or collectively,
as the context may require, the Borrower and each of its Subsidiaries.
 
"Borrowing Base Certificate" shall mean a certificate in substantially the form
of Exhibit 1.2 duly executed by the President, Chief Financial Officer or
Controller of Borrower and delivered to Agent, appropriately completed, by which
such officer shall certify to Agent the Formula Amount and calculation thereof
as of the date of such certificate.
 
 
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"Business Day" shall mean any day other than Saturday or Sunday or a legal
holiday on which commercial banks are authorized or required by law to be closed
for business in East Brunswick, New Jersey and, if the applicable Business Day
relates to any Eurodollar Rate Loans, such day must also be a day on which
dealings are carried on in the London interbank market.
 
"Capital Expenditures" shall mean expenditures made or liabilities incurred for
the acquisition of any fixed assets or improvements, replacements, substitutions
or additions thereto which have a useful life of more than one year, including
the total principal portion of Capitalized Lease Obligations, which, in
accordance with GAAP, would be classified as capital expenditures; provided that
expenditures made during such period in connection with the replacement,
substitution, restoration or repair of assets to the extent financed with
insurance proceeds paid on account of the loss or damage to the assets being
replaced, substituted, restored or repaired shall not constitute Capital
Expenditures.
 
"Capitalized Lease Obligation" shall mean any Indebtedness of any Borrower Party
represented by obligations under a lease that is required to be capitalized for
financial reporting purposes in accordance with GAAP.
 
"Cash Dominion Event" shall mean either (a) an Event of Default shall have
occurred and be continuing, or (b) a Testing Event shall have occurred and be
continuing.
 
"Cash Equivalents" shall mean: (a) marketable direct obligations issued or
unconditionally guaranteed by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within six (6) months from the date of acquisition thereof;
(b) commercial paper maturing no more than six (6) months from the date issued
and, at the time of acquisition, having a rating of at least A-1 from Standard &
Poor's or at least P-1 from Moody's Investors Service, Inc.; and (c)
certificates of deposit or bankers' acceptances maturing within six (6) months
from the date of issuance thereof issued by, or overnight reverse repurchase
agreements from any commercial bank organized under the laws of the United
States of America, or any state thereof or the District of Columbia, whose
obligations are rated A-1, A or the equivalent or better by Standard & Poor's on
the date of acquisition and not subject to setoff rights in favor of such bank.
 
"CERCLA" shall mean the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C. §§9601 et seq.
 
"Change of Ownership" shall mean (a) one hundred percent (100%) of the Equity
Interests of the Borrower is no longer owned or controlled by Holding, (b) one
hundred percent (100%) of the Equity Interests of any Subsidiary of the Borrower
(other than Horsehead Zinc Recycling, LLC, a South Carolina limited liability
company ("Horsehead Zinc")) is no longer owned or controlled by the Borrower,
(c) ninety-nine percent (99%) of the Equity Interests of Horsehead Zinc is no
longer owned or controlled by the Borrower or (d) any merger, consolidation or
sale of substantially all of the property or assets of any Borrower Party. For
purposes of this definition, "controlled by" shall mean the power of any person,
direct or indirect (i) to vote one hundred percent (100%) or more of the Equity
Interests having ordinary voting power for the election of directors (or the
individuals performing similar functions) of any Person or (ii) to direct or
cause the direction of the management and policies of any Person by contract or
otherwise.
 
 
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"Charges" shall mean all taxes, charges, fees, imposts, levies or other
assessments, including all net income, gross income, gross receipts, sales, use,
ad valorem, value added, transfer, franchise, profits, inventory, capital stock,
license, withholding, payroll, employment, social security, unemployment,
excise, severance, stamp, occupation and property taxes, custom duties, fees,
assessments, liens, claims and charges of any kind whatsoever, together with any
interest and any penalties, additions to tax or additional amounts, imposed by
any taxing or other authority, domestic or foreign (including the Pension
Benefit Guaranty Corporation or any environmental agency or superfund), upon the
Collateral or the Borrower.
 
"CIP Regulations" shall have the meaning set forth in Section 14.11 hereof.
 
"Closing Date" shall mean September 28, 2011 or such other date as may be agreed
to by the parties hereto.
 
"Code" shall mean the Internal Revenue Code of 1986, as the same may be amended
or supplemented from time to time, and any successor statute of similar import,
and the rules and regulations thereunder, as from time to time in effect.
 
"Collateral" shall mean and include:
 
(a) all Receivables;
 
(b) all Equipment;
 
(c) all General Intangibles;
 
(d) all Inventory;
 
(e) all Investment Property;
 
(f) all Subsidiary Stock;
 
(g) all of the Borrower's right, title and interest in and to, whether now owned
or hereafter acquired and wherever located, (i) its respective goods and other
property including all merchandise returned or rejected by Customers, relating
to or securing any of the Receivables; (ii) all of the Borrower's rights as a
consignor, a consignee, an unpaid vendor, mechanic, artisan, or other lienor,
including stoppage in transit, setoff, detinue, replevin, reclamation and
repurchase; (iii) all additional amounts due to the Borrower from any Customer
relating to the Receivables; (iv) other property, including warranty claims,
relating to any goods securing the Obligations; (v) all of the Borrower's
contract rights, rights of payment which have been earned under a contract
right, instruments (including promissory notes), documents, chattel paper
(including electronic chattel paper), warehouse receipts, deposit accounts,
letters of credit and money; (vi) all commercial tort claims (whether now
existing or hereafter arising); (vii) if and when obtained by the Borrower, all
real and personal property of third parties in which the Borrower has been
granted a lien or security interest as security for the payment or enforcement
of Receivables; (viii) all letter of credit rights (whether or not the
respective letter of credit is evidenced by a writing); (ix) all supporting
obligations; and (x) any other goods, personal property or real property now
owned or hereafter acquired in which the Borrower has expressly granted a
security interest or may in the future grant a security interest to Agent
hereunder, or in any amendment or supplement hereto or thereto, or under any
other agreement between Agent and the Borrower;
 
 
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(h) all of the Borrower's ledger sheets, ledger cards, files, correspondence,
records, books of account, business papers, computers, computer software (owned
by the Borrower or in which it has an interest), computer programs, tapes, disks
and documents relating to (a), (b), (c), (d), (e), (f) or (g) of this Paragraph;
and
 
(j) all proceeds and products of (a), (b), (c), (d), (e), (f), (g) and (h) in
whatever form, including: cash, deposit accounts (whether or not comprised
solely of proceeds), certificates of deposit, insurance proceeds (including
hazard, flood and credit insurance), negotiable instruments and other
instruments for the payment of money, chattel paper, security agreements,
documents, eminent domain proceeds, condemnation proceeds and tort claim
proceeds;
 
in each case, other than Excluded Property of the Borrower, provided, however,
that, if and when the prohibition which prevents the granting by the Borrower to
the Agent of a security interest in such Excluded Property is removed or
otherwise terminated, the Agent shall, to the extent permitted by applicable
law, be deemed to have, and at all times from and after the date hereof to have
had, a security interest in and pledge of such Excluded Property.
 
"Commitment Percentage" of any Lender shall mean the percentage set forth below
such Lender's name on the signature page hereof as same may be adjusted upon any
assignment by a Lender pursuant to Section 15.3(c) or (d) hereof.
 
"Commitment Transfer Supplement" shall mean a document in the form of Exhibit
15.3 hereto, properly completed and otherwise in form and substance satisfactory
to Agent by which the Purchasing Lender purchases and assumes a portion of the
obligation of Lenders to make Advances under this Agreement.
 
"Compliance Certificate" shall mean a compliance certificate to be signed by the
Chief Financial Officer or Controller of Borrower, which shall state that, based
on an examination sufficient to permit such officer to make an informed
statement, no Default or Event of Default exists, or if such is not the case,
specifying such Default or Event of Default, its nature, when it occurred,
whether it is continuing and the steps being taken by the defaulting party with
respect to such default and, such certificate shall have appended thereto
calculations which set forth (i) compliance with the requirements or
restrictions imposed by Sections 6.5, 7.4, 7.5, 7.6, 7.8 and 7.9, and (ii) with
respect to any certificate delivered pursuant to Section 9.8, the calculation of
Average Undrawn Availability.
 
"Consents" shall mean all filings and all licenses, permits, consents,
approvals, authorizations, qualifications and orders of Governmental Bodies and
other third parties, domestic or foreign, necessary to carry on any Borrower
Party's business or necessary (including to avoid a conflict or breach under any
agreement, instrument, other document, license, permit or other authorization)
for the execution, delivery or performance of this Agreement or any Other
Documents, including any Consents required under all applicable federal, state
or other Applicable Law.
 
 
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"Consideration" shall mean with respect to any Permitted Acquisition, without
duplication, the aggregate of (i) the cash paid by any of the Borrower Parties,
directly or indirectly, to the seller in connection therewith, (ii) the
Indebtedness incurred or assumed by any of the Borrower Parties, whether in
favor of the seller or otherwise and whether fixed or contingent, in connection
therewith, (iii) any guaranty given or incurred by any Borrower Party in
connection therewith, and (iv) any other consideration given or obligation
incurred by any of the Borrower Parties in connection therewith.
 
"Consigned Inventory" shall mean Inventory of the Borrower that is in the
possession of another Person on a consignment, sale or return, or other basis
that does not constitute a final sale and acceptance of such Inventory.
 
"Controlled Group" shall mean, at any time, each Borrower Party and all members
of a controlled group of corporations and all trades or businesses (whether or
not incorporated) under common control and all other entities which, together
with any Borrower Party, are treated as a single employer under Section 414 of
the Code.
 
"Current Liabilities" shall mean, with respect to Holding, on any date of
determination, all amounts which would, in accordance with GAAP, be included
under current liabilities on a balance sheet.
 
"Customer" shall mean and include the account debtor with respect to any
Receivable and/or the prospective purchaser of goods, services or both with
respect to any contract or contract right, and/or any party who enters into or
proposes to enter into any contract or other arrangement with the Borrower,
pursuant to which the Borrower is to deliver any personal property or perform
any services.
 
"Customs" shall have the meaning set forth in Section 2.10(b) hereof.
 
"Default" shall mean an event, circumstance or condition which, with the giving
of notice or passage of time or both, would constitute an Event of Default.
 
"Default Rate" shall have the meaning set forth in Section 3.1 hereof.
 
"Defaulting Lender" shall have the meaning set forth in Section 2.2 1(a) hereof.
 
"Deposit Account Control Agreement" shall have the meaning set forth in Section
4.15(h).
 
"Depository Accounts" shall have the meaning set forth in Section 4.15(h)
hereof.
 
"Designated Lender" shall have the meaning set forth in Section 15.2(b) hereof.
 
 
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"Documents" shall have the meaning set forth in Section 8.1(c) hereof.
 
"Dollar" and the sign "$" shall mean lawful money of the United States of
America.
 
"Domestic Person" shall mean any entity organized under the laws of any state of
the United States of America or the District of Columbia.
 
"Domestic Rate Loan" shall mean any Advance that bears interest based upon the
Alternate Base Rate.
 
"Drawing Date" shall have the meaning set forth in Section 2.11(b) hereof.
 
"Earnings Before Interest and Taxes" shall mean for any period the sum of (i)
net income (or loss) of the Borrower and its Subsidiaries on a consolidated
basis for such period (excluding extraordinary gains), plus (ii) all interest
expense of the Borrower and its Subsidiaries on a consolidated basis for such
period, plus (iii) all charges against income of the Borrower and its
Subsidiaries on a consolidated basis for such period for federal, state and
local taxes.
 
"EBITDA" shall mean for any period the sum of (i) Earnings Before Interest and
Taxes for such period plus (ii) depreciation expenses, plus (iii) amortization
expenses, plus (iv) non-cash stock based compensation expenses, plus (v)
non-cash charges deducted from Earnings Before Interest and Taxes as a result of
mark-to-market adjustments, plus (vi) non-cash charges deducted from Earnings
Before Interest and Taxes for fixed asset write-downs/write-offs and any other
non-recurring charges, plus (vii) any gains recognized in connection with the
exercise of any options and not otherwise included in Earnings Before Interest
and Taxes, less (viii) non-cash adjustments added to Earnings Before Interest
and Taxes as a result of mark-to-market adjustments, less (ix) any losses
incurred as a result of the expiration of any unexercised options and not
otherwise deducted from Earnings Before Interest and Taxes, in each case of the
Borrower and its Subsidiaries on a consolidated basis for such period.
 
"Eligible Inventory" shall mean and include Inventory, excluding work in
process, with respect to the Borrower, valued at the lower of cost or market
value, determined on a first­in-first-out basis, which is not, in Agent's
commercially reasonable opinion, obsolete, slow moving or unmerchantable and
which Agent, in its commercially reasonable discretion, shall not deem
ineligible Inventory, based on such considerations as Agent may from time to
time deem appropriate including whether the Inventory is subject to a perfected,
first priority security interest in favor of Agent and no other Lien (other than
a Permitted Encumbrance). In addition, Inventory shall not be Eligible Inventory
if it (i) does not conform to all standards imposed by any Governmental Body
which has regulatory authority over such goods or the use or sale thereof, (ii)
is in transit unless such otherwise Eligible Inventory is in transit from a
domestic location owned by the Borrower to a domestic location owned by the
Borrower, (iii) is located outside the continental United States or at a
location that is not otherwise in compliance with this Agreement, (iv)
constitutes Consigned Inventory, unless the Borrower can establish with respect
to an item of Consigned Inventory that: (x) all appropriate notices required by
the Uniform Commercial Code have been given by the Borrower to any secured
parties of such consignee having a security interest in Inventory of the
consignee prior to delivery of such item of Inventory to such consignee, (y) all
appropriate financing statements have been filed by the Borrower against such
consignee prior to such delivery of such item of Inventory to the consignee and
(z) access agreements, in form and substance satisfactory to the Agent, have
been executed by the consignee and delivered to the Agent; provided, however,
notwithstanding that such Inventory would otherwise be Eligible Inventory
hereunder, such Inventory shall be deemed to not be Eligible Inventory if the
regular reporting with respect to such Inventory provided by such third Person
to the Borrower and the Agent is not acceptable to the Agent in its reasonable
discretion, (v) is the subject of an Intellectual Property Claim; (vi) is
subject to a License Agreement or other agreement that limits, conditions or
restricts the Borrower's or Agent's right to sell or otherwise dispose of such
Inventory, unless Agent is a party to a Licensor/Agent Agreement with the
Licensor under such License Agreement; (vii) or is situated at a location not
owned by a Borrower unless the owner or occupier of such location has executed
in favor of Agent a Lien Waiver Agreement; or (viii) is not otherwise
satisfactory to Agent as determined in good faith by Agent in the exercise of
its discretion in a reasonable manner. Eligible Inventory shall not include
Inventory being acquired pursuant to a trade Letter of Credit to the extent such
trade Letter of Credit remains outstanding.
 
 
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"Eligible Receivables" shall mean and include with respect to the Borrower, each
Receivable of the Borrower arising in the Ordinary Course of Business and which
Agent, in its commercially reasonable discretion, shall deem to be an Eligible
Receivable, based on such considerations as Agent may from time to time deem
appropriate. A Receivable shall not be deemed eligible unless such Receivable is
subject to Agent's first priority perfected security interest and no other Lien
(other than Permitted Encumbrances), and is evidenced by an invoice or other
documentary evidence satisfactory to Agent. In addition, no Receivable shall be
an Eligible Receivable if:
 
(a) it arises out of a sale made by the Borrower to an Affiliate of the Borrower
or to a Person controlled by an Affiliate of the Borrower, unless such sale was
made on standard, fair and reasonable terms and conditions, no less favorable to
the Borrower than the Borrower could obtain in a comparable arms length
transaction with an unrelated third party; provided that the aggregate amount of
Eligible Receivables based on such Affiliate sales shall not exceed Two Hundred
Fifty Thousand and 00/100 Dollars ($250,000.00) at any time;
 
(b) it is due or unpaid more than (i) sixty (60) days after the original due
date or (ii) ninety (90) days after the original invoice date;
 
(c) fifty percent (50%) or more of the Receivables from such Customer are not
deemed Eligible Receivables hereunder;
 
(d) any covenant, representation or warranty contained in this Agreement with
respect to such Receivable has been breached;
 
(e) the Customer shall (i) apply for, suffer, or consent to the appointment of,
or the taking of possession by, a receiver, custodian, trustee or liquidator of
itself or of all or a substantial part of its property or call a meeting of its
creditors, (ii) admit in writing its inability, or be generally unable, to pay
its debts as they become due or cease operations of its present business, (iii)
make a general assignment for the benefit of creditors, (iv) commence a
voluntary case under any state or federal bankruptcy laws (as now or hereafter
in effect), (v) be adjudicated a bankrupt or insolvent, (vi) file a petition
seeking to take advantage of any other law providing for the relief of debtors,
(vii) acquiesce to, or fail to have dismissed, any petition which is filed
against it in any involuntary case under such bankruptcy laws, or (viii) take
any action for the purpose of effecting any of the foregoing;
 
 
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(f) the sale is to a Customer outside the continental United States of America
or Canada, unless the sale is on letter of credit (subject to UCP Publication
No. 600, and any amendments or revision thereof), guaranty or acceptance terms,
in each case acceptable to Agent in its reasonable discretion, or otherwise on
terms acceptable to Agent in its reasonable discretion;
 
(g) the sale to the Customer is on a bill-and-hold (unless pursuant to
documentation in form and substance satisfactory to Agent), guaranteed sale,
sale-and-return, sale on approval, consignment or any other repurchase or return
basis or is evidenced by chattel paper;
 
(h) the Customer is the United States of America, any state or any department,
agency or instrumentality of any of them, unless the Borrower assigns its right
to payment of such Receivable to Agent pursuant to the Assignment of Claims Act
of 1940, as amended (31 U.S.C. Sub-Section 3727 et seq. and 41 U.S.C.
Sub-Section 15 et seq.) or has otherwise complied with other applicable statutes
or ordinances;
 
(i) the goods giving rise to such Receivable have not been delivered to and
accepted by the Customer or the services giving rise to such Receivable have not
been performed by the Borrower and accepted by the Customer or the Receivable
otherwise does not represent a final sale;
 
(j) the Receivable arises with respect to a Customer whose aggregate amount of
Receivables constitute fifteen percent (15%) or more of the aggregate amount of
all Receivables owed to the Borrower, to the extent such Receivables exceed such
limit;
 
(k) the Receivable is subject to any offset, deduction, defense, dispute, or
counterclaim, only to the extent of such offset, deduction, defense, dispute or
counterclaim,
 
(l) the Customer is also a creditor or supplier of a Borrower or the Receivable
is contingent in any respect or for any reason, only to the extent of any
offset, deduction, defense, dispute, counterclaim or contingency;
 
(m) the Borrower has made any agreement with any Customer for any deduction
therefrom, except for discounts or allowances made in the Ordinary Course of
Business for prompt payment, all of which discounts or allowances are reflected
in the calculation of the face value of each respective invoice related thereto;
 
(n) any return, rejection or repossession of the merchandise has occurred or the
rendition of services has been disputed;
 
(o) such Receivable is not payable to a Borrower; or
 
 
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(p) such Receivable is not otherwise satisfactory to Agent as determined in good
faith by Agent in the exercise of its discretion in a reasonable manner.
 
"Environmental Laws" shall mean all federal, state and local environmental,
occupational health and safety laws, statutes, ordinances and codes relating to
the protection of the environment and/or governing the use, storage, treatment,
generation, transportation, processing, handling, production or disposal of
Hazardous Substances and the rules, regulations, decisions, orders and
directives of federal, state and local governmental agencies and authorities
with respect thereto.
 
"Equipment" shall mean and include as to the Borrower all of the Borrower's
goods (other than Inventory) whether now owned or hereafter acquired and
wherever located including all equipment, machinery, apparatus, motor vehicles,
fittings, furniture, furnishings, fixtures, parts, accessories and all
replacements and substitutions therefor or accessions thereto.
 
"Equity Interests" of any Person shall mean any and all shares, rights to
purchase, options, warrants, general, limited or limited liability partnership
interests, member interests, participation or other equivalents of or interest
in (regardless of how designated) equity of such Person, whether voting or
nonvoting, including common stock, preferred stock, convertible securities or
any other "equity security" (as such term is defined in Rule 3a1 1-1 of the
General Rules and Regulations promulgated by the SEC under the Exchange Act).
 
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time and the rules and regulations promulgated thereunder.
 
"Eurodollar Rate" shall mean for any Eurodollar Rate Loan for the then current
Interest Period relating thereto the interest rate per annum (rounded upwards,
if necessary, to the nearest one hundredth (1/100) of one percent (1%))
determined by Agent by dividing (i) the rate which appears on the Bloomberg Page
BBAM1 (or on such other substitute Bloomberg page that displays rates at which
US dollar deposits are offered by leading banks in the London interbank deposit
market), or the rate which is quoted by another source selected by Agent which
has been approved by the British Bankers' Association as an authorized
information vendor for the purpose of displaying rates at which US dollar
deposits are offered by leading banks in the London interbank deposit market (an
"Alternative Source"), at approximately 11:00 a.m., London time two (2) Business
Days prior to the first day of such Interest Period (or if there shall at any
time, for any reason, no longer exist a Bloomberg Page BBAM1 (or any substitute
page) or any Alternate Source, a comparable replacement rate determined by Agent
at such time (which determination shall be conclusive absent manifest error))
for an amount comparable to such Eurodollar Rate Loan and having a borrowing
date and a maturity comparable to such Interest Period by (ii) a number equal to
1.00 minus the Reserve Percentage.
 
The Eurodollar Rate shall be adjusted with respect to any Eurodollar Rate Loan
that is outstanding on the effective date of any change in the Reserve
Percentage as of such effective date. Agent shall give prompt notice to Borrower
of the Eurodollar Rate as determined or adjusted in accordance herewith, which
determination shall be conclusive absent manifest error.
 
 
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"Eurodollar Rate Loan" shall mean an Advance at any time that bears interest
based on the Eurodollar Rate.
 
"Event of Default" shall have the meaning set forth in Article X hereof.
 
"Exchange Act" shall have the mean the Securities Exchange Act of 1934, as
amended.
 
"Excluded Property" shall mean the assets set forth on Schedule 7.1.
 
"Executive Order No. 13224" shall mean the Executive Order No. 13224 on
Terrorist Financing, effective September 24, 2001, as the same has been, or
shall hereafter be, renewed, extended, amended or replaced.
 
"Existing Bank Accounts" shall mean those bank accounts set forth on Schedule
1.2(E).
 
"Existing Letters of Credit" shall have the meaning set forth in Section 2.9.
 
"Federal Funds Effective Rate" for any day shall mean the rate per annum (based
on a year of 360 days and actual days elapsed and rounded upward to the nearest
one hundredth (1/100) of one percent (1%)) announced by the Federal Reserve Bank
of New York (or any successor) on such day as being the weighted average of the
rates on overnight federal funds transactions arranged by federal funds brokers
on the previous trading day, as computed and announced by such Federal Reserve
Bank (or any successor) in substantially the same manner as such Federal Reserve
Bank computes and announces the weighted average it refers to as the "Federal
Funds Effective Rate" as of the date of this Agreement; provided, if such
Federal Reserve Bank (or its successor) does not announce such rate on any day,
the "Federal Funds Effective Rate" for such day shall be the Federal Funds
Effective Rate for the last day on which such rate was announced.
 
"Federal Funds Open Rate" for any day shall mean the rate per annum (based on a
year of 360 days and actual days elapsed) which is the daily federal funds open
rate as quoted by ICAP North America, Inc. (or any successor) as set forth on
the Bloomberg Screen BTMM for that day opposite the caption "OPEN" (or on such
other substitute Bloomberg Screen that displays such rate), or as set forth on
such other recognized electronic source used for the purpose of displaying such
rate as selected by PNC (an "Alternate Source") (or if such rate for such day
does not appear on the Bloomberg Screen BTMM (or any substitute screen) or on
any Alternate Source, or if there shall at any time, for any reason, no longer
exist a Bloomberg Screen BTMM (or any substitute screen) or any Alternate
Source, a comparable replacement rate determined by PNC at such time (which
determination shall be conclusive absent manifest error); provided however, that
if such day is not a Business Day, the Federal Funds Open Rate for such day
shall be the "open" rate on the immediately preceding Business Day. If and when
the Federal Funds Open Rate changes, the rate of interest with respect to any
advance to which the Federal Funds Open Rate applies will change automatically
without notice to Loan Parties, effective on the date of any such change.
 
 
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"Fee Letter" shall mean the fee letter dated of even date herewith among
Borrower and Agent.
 
"Financial Statements" shall have the meaning set forth in Section 5.5(c).
 
"Fixed Charge Coverage Ratio" shall mean and include, with respect to the
Borrower and its Subsidiaries on a consolidated basis for any fiscal period, the
ratio of (a) Adjusted EBITDA minus the sum of (i) Unfinanced Capital
Expenditures made during such period, (ii) cash taxes paid or required to be
paid during such period, (iii) cash investments in Holding as permitted pursuant
to Section 7.4 hereof, (iv) advances, loans and extensions of credit made in
cash to Holding as permitted pursuant to Section 7.5 hereof and (v) dividends
and distributions paid in cash as permitted pursuant to Section 7.6 hereof, to
(b) the sum of (i) all cash expenses and charges for pension and benefit plans
(to the extent not already included in Adjusted EBITDA) plus (ii) all Senior
Debt Payments during such period.
 
"Foreign Subsidiary" of any Person, shall mean any Subsidiary of such Person
that is not organized or incorporated in the United States or any State or
territory thereof.
 
"Formula Amount" shall have the meaning set forth in Section 2.1(a).
 
"GAAP" shall mean generally accepted accounting principles in the United States
of America in effect from time to time.
 
"General Intangibles" shall mean and include all of the Borrower's general
intangibles, whether now owned or hereafter acquired, including all payment
intangibles, all choses in action, causes of action, corporate or other business
records, inventions, designs, patents, patent applications, equipment
formulations, manufacturing procedures, quality control procedures, trademarks,
trademark applications, service marks, trade secrets, goodwill, copyrights,
design rights, software, computer information, source codes, codes, records and
updates, registrations, licenses, franchises, customer lists, tax refunds, tax
refund claims, computer programs, all claims under guaranties, security
interests or other security held by or granted to the Borrower to secure payment
of any of the Receivables by a Customer (other than to the extent covered by
Receivables) all rights of indemnification and all other intangible property of
every kind and nature (other than Receivables).
 
"Governmental Acts" shall have the meaning set forth in Section 2.16.
 
"Governmental Body" shall mean any nation or government, any state or other
political subdivision thereof or any entity, authority, agency, division or
department exercising the legislative, judicial, regulatory or administrative
functions of or pertaining to a government.
 
"Guarantor" or "Guarantors" shall mean, singularly or collectively, as the
context may require, Holding, each Person which joins this Agreement as a
Guarantor after the date hereof pursuant to Section 15.18 and any other Person
who may hereafter guarantee payment or performance of the whole or any part of
the Obligations and shall extend to all permitted successors and assigns of such
Persons.
 
 
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"Guaranty" shall mean (i) the Guaranty and Suretyship Agreement made by Holding
in favor of Agent for its benefit and for the ratable benefit of Lenders, and
(ii) any other guaranty of the obligations of Borrower executed by a Guarantor
in favor of Agent for its benefit and for the ratable benefit of Lenders, in
form and substance satisfactory to Agent, in each case together with all
amendments, supplements, modifications, substitutions and replacements thereto
and thereof, and "Guarantees" means collectively, all such Guarantees.
 
"Hazardous Discharge" shall mean any Release or threat of Release of any
Hazardous Substance at the Real Property equal to or exceeding a reportable
quantity for which notice must be provided to any Authority pursuant to any
applicable Environmental Laws.
 
"Hazardous Substance" shall mean any flammable explosives, radon, radioactive
materials, asbestos, urea formaldehyde foam insulation, polychlorinated
biphenyls, petroleum and petroleum products, hazardous materials, Hazardous
Wastes, hazardous substances or Toxic Substances as defined in CERCLA, the
Hazardous Materials Transportation Act, as amended (49 U.S.C. Sections 1801, et
seq.) or any other applicable Environmental Law and in the regulations adopted
pursuant thereto.
 
"Hazardous Wastes" shall mean all waste materials subject to regulation under
CERCLA, RCRA and any other applicable Federal and state laws now in force or
hereafter enacted relating to hazardous waste disposal.
 
"Hedge Liabilities" shall have the meaning provided in the definition of
"Lender-Provided Interest Rate Hedge".
 
"Holding" shall mean Horsehead Holding Corp., a Delaware corporation.
 
"Holding Bond Issuances" shall mean any unsecured debt securities issuances by
Holding.
 
"Horsehead Zinc" shall have the meaning set forth in the definition of "Change
of Ownership".
 
"Indebtedness" of a Person at a particular date shall mean any and all
indebtedness, obligations or liabilities (whether matured or unmatured,
liquidated or unliquidated, direct or indirect, absolute or contingent, or joint
or several) of such Person for or in respect of: (i) borrowed money, (ii)
amounts raised under or liabilities in respect of any note purchase or
acceptance credit facility, (iii) reimbursement obligations (contingent or
otherwise) under any letter of credit agreement, (iv) obligations under any
currency swap agreement, interest rate swap, cap, collar or floor agreement or
other interest rate management device, (v) Capitalized Lease Obligations, (vi)
operating lease obligations, (vii) any other transaction (including forward sale
or purchase agreements, and conditional sales agreements) having the commercial
effect of a borrowing of money entered into by such Person to finance its
operations or capital requirements (but not including trade payables and accrued
expenses incurred in the ordinary course of business which are not represented
by a promissory note or other evidence of indebtedness and which are not more
than thirty (30) days past due), or (viii) any Guaranty of Indebtedness for
borrowed money.
 
 
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"Ineligible Security" shall mean any security which may not be underwritten or
dealt in by member banks of the Federal Reserve System under Section 16 of the
Banking Act of 1933 (12 U.S.C. Section 24, Seventh), as amended.
 
"Intellectual Property" shall mean property constituting under any Applicable
Law a patent, patent application, copyright, trademark, service mark, trade
name, mask work, trade secret or license or other right to use any of the
foregoing.
 
"Intellectual Property Claim" shall mean the assertion by any Person of a claim
(whether asserted in writing, by action, suit or proceeding or otherwise) that
the Borrower's ownership, use, marketing, sale or distribution of any Inventory,
Equipment, Intellectual Property or other property or asset is violative of any
ownership of or right to use any Intellectual Property of such Person.
 
"Interest Period" shall mean the period provided for any Eurodollar Rate Loan
pursuant to Section 2.2(b).
 
"Interest Rate Hedge" shall mean an interest rate exchange, collar, cap, swap,
adjustable strike cap, adjustable strike corridor or similar agreements entered
into by any Borrower Party or its Subsidiaries in order to provide protection
to, or minimize the impact upon, such Borrower Party and/or its Subsidiaries of
increasing floating rates of interest applicable to Indebtedness.
 
"Inventory" shall mean and include all of the Borrower's now owned or hereafter
acquired goods, merchandise and other personal property, wherever located, to be
furnished under any consignment arrangement, contract of service or held for
sale or lease, all raw materials, work in process, finished goods and materials
and supplies of any kind, nature or description which are or might be used or
consumed in the Borrower's business or used in selling or furnishing such goods,
merchandise and other personal property, and all documents of title or other
documents representing them.
 
"Inventory Advance Rate" shall have the meaning set forth in Section
2.1(a)(y)(ii) hereof.
 
"Investment Property" shall mean and include all of the Borrower's now owned or
hereafter acquired securities (whether certificated or uncertificated),
securities entitlements, securities accounts, commodities contracts and
commodities accounts.
 
"IP Security Agreement" shall mean the Patent, Trademark and Copyright Security
Agreement, dated of even date herewith executed and delivered by Borrower in
connection with this Agreement, together with all amendments, supplements,
modifications, substitutions and replacements thereto and thereof.
 
"Issuer" shall mean any Person who issues a Letter of Credit pursuant to the
terms hereof.
 
 
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"Lender" and "Lenders" shall have the meaning ascribed to such term in the
preamble to this Agreement and shall include each Person which becomes a
transferee, successor or assign of any Lender.
 
"Lender-Provided Interest Rate Hedge" shall mean an Interest Rate Hedge which is
provided by any Lender and with respect to which Agent confirms meets the
following requirements: such Interest Rate Hedge (i) is documented in a standard
International Swap Dealer Association Agreement or other similar agreement
acceptable to Agent in its sole discretion, (ii) provides for the method of
calculating the reimbursable amount of the provider's credit exposure in a
reasonable and customary manner, and (iii) is entered into for hedging (rather
than speculative) purposes. The liabilities of any Borrower Party to the
provider of any Lender-Provided Interest Rate Hedge (the "Hedge Liabilities")
shall be "Obligations" hereunder, guaranteed obligations under the Guaranty and
otherwise treated as Obligations for purposes of each of the Other Documents.
The Liens securing the Hedge Liabilities shall be pari passu with the Liens
securing all other Obligations under this Agreement and the Other Documents.
 
"Letter of Credit Fees" shall have the meaning set forth in Section 3.2.
 
"Letter of Credit Borrowing" shall have the meaning set forth in Section
2.11(d).
 
"Letter of Credit Sublimit" shall mean Thirty Million and 00/100 Dollars
($30,000,000.00).
 
"Letters of Credit" shall have the meaning set forth in Section 2.8.
 
"License Agreement" shall mean any agreement between the Borrower and a Licensor
pursuant to which the Borrower is authorized to use any Intellectual Property in
connection with the manufacturing, marketing, sale or other distribution of any
Inventory of the Borrower or otherwise in connection with the Borrower's
business operations.
 
"Licensor" shall mean any Person from whom the Borrower obtains the right to use
(whether on an exclusive or non-exclusive basis) any Intellectual Property in
connection with the Borrower's manufacture, marketing, sale or other
distribution of any Inventory or otherwise in connection with the Borrower's
business operations.
 
"Licensor/Agent Agreement" shall mean an agreement between Agent and a Licensor,
in form and content satisfactory to Agent, by which Agent is given the
unqualified right, vis-a-vis such Licensor, to enforce Agent's Liens with
respect to and to dispose of the Borrower's Inventory with the benefit of any
Intellectual Property applicable thereto, irrespective of the Borrower's default
under any License Agreement with such Licensor.
 
"Lien" shall mean any mortgage, deed of trust, pledge, hypothecation,
assignment, security interest, lien (whether statutory or otherwise), Charge,
claim or encumbrance, or preference, priority or other security agreement or
preferential arrangement held or asserted in respect of any asset of any kind or
nature whatsoever including any conditional sale or other title retention
agreement, any lease having substantially the same economic effect as any of the
foregoing, and the filing of, or agreement to give, any financing statement
under the Uniform Commercial Code or comparable law of any jurisdiction.
 
 
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"Lien Waiver Agreement" shall mean an agreement which is executed in favor of
Agent by a Person who owns or occupies premises at which any Collateral may be
located from time to time and by which such Person shall waive any Lien that
such Person may ever have with respect to any of the Collateral and shall
authorize Agent from time to time to enter upon the premises to inspect or
remove the Collateral from such premises or to use such premises to store or
dispose of such Inventory.
 
"Loan Party" or "Loan Parties" shall mean, singularly or collectively, as the
context may require, the Borrower and each Guarantor and shall extend to all
permitted successors and assigns of each such Person.
 
"Material Adverse Effect" shall mean a material adverse effect on (a) the
financial condition, results of operations, assets, business or properties of
the Borrower Parties, taken as a whole, (b) any Borrower Party's ability to duly
and punctually pay or perform the Obligations in accordance with the terms
thereof, (c) the Agent's Liens on the Collateral or the priority of any such
Lien or (d) the practical realization of the benefits of Agent's and each
Lender's rights and remedies under this Agreement and the Other Documents.
 
"Maximum Face Amount" shall mean, with respect to any outstanding Letter of
Credit, the face amount of such Letter of Credit including all automatic
increases provided for in such Letter of Credit, whether or not any such
automatic increase has become effective.
 
"Maximum Revolving Advance Amount" shall mean Sixty Million and 00/100 Dollars
($60,000,000.00).
 
"Maximum Undrawn Amount" shall mean with respect to any outstanding Letter of
Credit, the amount of such Letter of Credit that is or may become available to
be drawn, including all automatic increases provided for in such Letter of
Credit, whether or not any such automatic increase has become effective.
 
"Modified Commitment Transfer Supplement" shall have the meaning set forth in
Section 15.3(d).
 
"Month End Financial Statements" shall have the meaning set forth in Section
5.5(c).
 
"Multiemployer Plan" shall mean a "multiemployer plan" as defined in Sections
3(37) and 4001(a)(3) of ERISA.
 
"Multiple Employer Plan" shall mean a Plan which has two or more contributing
sponsors (including any Borrower Party or any member of the Controlled Group) at
least two of whom are not under common control, as such a plan is described in
Section 4064 of ERISA.
 
"Net Orderly Liquidation Value" shall mean, at any time, the aggregate value of
the Borrower's Inventory at such time in an orderly liquidation, taking into
account all costs, fees and expenses estimated to be incurred by the Agent and
the Lenders in connection with such liquidation, based upon the most recent
appraisal of the Borrower's Inventory conducted by an appraiser selected by the
Agent.
 
 
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"Note" shall mean each Revolving Credit Note and "Notes" shall collectively mean
all of the Revolving Credit Notes.
 
"Notice of Waiver of Rights" shall mean the Notice of Waiver of Rights Regarding
Warrants of Attorney, Execution Rights and Waiver of Rights to Prior Notice and
Judicial Hearing, dated of even date herewith, made by Loan Parties to Agent,
together with all amendments, supplements, modifications, substitutions and
replacements thereto and thereof.
 
"Obligations" shall mean and include any and all loans, advances, debts,
liabilities, obligations, covenants and duties owing by any Borrower Party to
Lenders or Agent or to any other direct or indirect subsidiary or affiliate of
Agent or any Lender of any kind or nature, present or future (including any
interest or other amounts accruing thereon after maturity, or after the filing
of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding relating to any Borrower Party, whether or not
a claim for post-filing or post-petition interest or other amounts is allowed in
such proceeding), whether or not evidenced by any note, guaranty or other
instrument, whether arising under any agreement, instrument or document,
(including this Agreement and the Other Documents) whether or not for the
payment of money, whether arising by reason of an extension of credit, opening
of a letter of credit, loan, equipment lease or guarantee, under any interest or
currency swap, future, option or other similar agreement, or in any other
manner, whether arising out of overdrafts or deposit or other accounts or
electronic funds transfers (whether through automated clearing houses or
otherwise) or out of Agent's or any Lenders non-receipt of or inability to
collect funds or otherwise not being made whole in connection with depository
transfer check or other similar arrangements, whether direct or indirect
(including those acquired by assignment or participation), absolute or
contingent, joint or several, due or to become due, now existing or hereafter
arising, contractual or tortious, liquidated or unliquidated, regardless of how
such indebtedness or liabilities arise or by what agreement or instrument they
may be evidenced or whether evidenced by any agreement or instrument, including
any and all of any Borrower Party's Indebtedness and/or liabilities under this
Agreement, the Other Documents or under any other agreement between Agent or
Lenders and any Borrower Party and any amendments, extensions, renewals or
increases and all costs and expenses of Agent and any Lender incurred in the
documentation, negotiation, modification, enforcement, collection or otherwise
in connection with any of the foregoing, including reasonable attorneys' fees
and expenses and all obligations of any Borrower Party to Agent or Lenders to
perform acts or refrain from taking any action.
 
"Ordinary Course of Business" shall mean with respect to any Borrower Party,
operations in connection with environmental services, metals processing and
metals reclamation and all related activities incidental thereto.
 
"Other Documents" shall mean the Notes, any Guaranty, any Pledge Agreement, any
Lender-Provided Interest Rate Hedge, the IP Security Agreement, the Notice of
Waiver of Rights, any Lien Waiver Agreement, the Fee Letter and any and all
other agreements, instruments and documents, including guaranties, pledges,
powers of attorney, consents, interest or currency swap agreements or other
similar agreements and all other writings heretofore, now or hereafter executed
by any Loan Party and/or delivered to Agent or any Lender in respect of the
transactions contemplated by this Agreement.
 
 
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"Out-of-Formula Loans" shall have the meaning set forth in Section 15.2(b).
 
"Owned Real Property" shall mean all of each Borrower Party's right, title and
interest in and to the owned premises identified on Schedule 4.19 hereto or
which is hereafter owned by any Borrower Party.
 
"Parent" of any Person shall mean a corporation or other entity owning, directly
or indirectly at least fifty percent (5 0%) of the shares of stock or other
ownership interests having ordinary voting power to elect a majority of the
directors of the Person, or other Persons performing similar functions for any
such Person.
 
"Participant" shall mean each Person who shall be granted the right by any
Lender to participate in any of the Advances and who shall have entered into a
participation agreement in form and substance satisfactory to such Lender.
 
"Participation Advance" shall have the meaning set forth in Section 2.11(d).
 
"Participation Commitment" shall mean each Lender's obligation to buy a
participation of the Letters of Credit issued hereunder.
 
"Payee" shall have the meaning set forth in Section 3.10.
 
"Payment Office" shall mean initially Two Tower Center Boulevard, East
Brunswick, New Jersey 08816; thereafter, such other office of Agent, if any,
which it may designate by notice to Borrower and to each Lender to be the
Payment Office.
 
"PBGC" shall mean the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA or any successor.
 
"Pension Benefit Plan" shall mean at any time any employee pension benefit plan
(including a Multiple Employer Plan, but not a Multiemployer Plan) which is
covered by Title IV of ERISA or is subject to the minimum funding standards
under Section 412 of the Code and either (i) is maintained by any member of the
Controlled Group for employees of any member of the Controlled Group; or (ii)
has at any time within the preceding five years been maintained by any entity
which was at such time a member of the Controlled Group for employees of any
entity which was at such time a member of the Controlled Group.
 
"Permitted Acquisition" shall have the meaning set forth in Section 7.1(a)
hereof.
 
"Permitted Encumbrances" shall mean:
 
(a) Liens in favor of Agent for the benefit of Agent and Lenders;
 
(b) Liens for taxes, assessments or other governmental charges not delinquent or
being Properly Contested;
 
(c) Liens disclosed in the financial statements referred to in Section 5.5, the
existence of which Agent has consented to in writing;
 
 
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(d) deposits or pledges to secure obligations under worker's compensation,
social security or similar laws, or under unemployment insurance;
 
(e) deposits or pledges to secure bids, tenders, contracts (other than contracts
for the payment of money), leases, statutory obligations, surety and appeal
bonds and other obligations of like nature arising in the Ordinary Course of
Business;
 
(f) Liens arising by virtue of the rendition, entry or issuance against any
Borrower Party or any Subsidiary, or any property of any Borrower Party or any
Subsidiary, of any judgment, writ, order, or decree for so long as each such
Lien (x) is in existence for less than twenty (20) consecutive days after it
first arises or is being Properly Contested and (y) is at all times junior in
priority to any Liens in favor of Agent;
 
(g) mechanics', workers', materialmen's or other like Liens arising in the
Ordinary Course of Business with respect to obligations which are not due or
which are being Properly Contested;
 
(h) Liens placed upon fixed assets hereafter acquired to secure a portion of the
purchase price thereof, provided that (x) any such lien shall not encumber any
other property of any Borrower Party and (y) the aggregate amount of
Indebtedness secured by such Liens incurred as a result of such purchases during
any fiscal year shall not exceed the amount provided for in Section 7.7(c);
 
(i) easements (including, without limitation, reciprocal easement agreements and
utility agreements), encroachments, rights-of-way, covenants, consents,
reservations, defects or irregularities in title, variations, zoning, and other
restrictions, charges or encumbrances (whether or not recorded) affecting the
Real Property, if applicable, and which do not, individually or in the aggregate
(i) materially interfere with the occupation, use or enjoyment by the applicable
Borrower Party of its business or property so encumbered and (ii) do not
materially and adversely affect the value of such Real Property;
 
(j) Liens arising from the precautionary UCC financing statements filed under
any lease or license permitted by this Agreement;
 
(k) Liens of local or state authorities for franchise or other like Taxes,
provided that such liens do not exceed One Hundred Thousand and 00/100 Dollars
($100,000.00) in the aggregate at any time for the Borrower;
 
(l) Liens on insurance policies and the proceeds thereof securing the financing
of the premiums with respect thereto;
 
(m) customary rights of set-off, revocation, refund or chargeback under deposit
agreements or under the Uniform Commercial Code of banks or other financial
institutions where any Borrower Party maintains deposits (other than deposits
intended as cash collateral) in the ordinary course of business;
 
(n) Liens disclosed on Schedule 1.2(B);
 
 
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(o) other Liens on assets securing Indebtedness not exceeding Five Hundred
Thousand and 00/100 Dollars ($500,000.00) in the aggregate at any time for all
Borrower Parties;
 
(p) Liens securing the Project Indebtedness to the extent such Liens are on Real
Property or on assets acquired with the proceeds of the Project Indebtedness
covering such Real Property securing such Indebtedness, provided that any such
lien shall not encumber any other property of any Borrower Party (in furtherance
of the Liens permitted under this clause (p), the parties hereto acknowledge and
agree that such Liens, to the extent required by any applicable third-party
lender, shall be first-priority Liens); and
 
(q) any extension, renewal or replacement (or successive extensions, renewals or
replacements), in whole or in part, of any Lien referred to in the foregoing
clauses (a) through (n), provided that any such extension, renewal or
replacement Lien shall be limited to all or a part of the property that was the
subject to the Lien so extended, renewed or replaced (plus any improvements on
such property) and provided that any such extension, renewal or replacement Lien
shall not secure an amount (i.e., outstanding principal plus accrued and unpaid
interest and fees and expenses in the case of Indebtedness permitted pursuant to
this Agreement) greater than the amount outstanding immediately prior to such
extension, renewal or replacement Lien.
 
"Person" shall mean any individual, sole proprietorship, partnership,
corporation, business trust, joint stock company, trust, unincorporated
organization, association, limited liability company, limited liability
partnership, institution, public benefit corporation, joint venture, entity or
Governmental Body (whether federal, state, county, city, municipal or otherwise,
including any instrumentality, division, agency, body or department thereof).
 
"Plan" shall mean any employee benefit plan within the meaning of Section 3(3)
of ERISA (including a Pension Benefit Plan), maintained for employees of the
Borrower or any member of the Controlled Group or any such Plan to which the
Borrower or any member of the Controlled Group is required to contribute on
behalf of any of its employees.
 
"Pledge Agreement" shall mean (i) the Pledge Agreement dated of even date
herewith made by Holding to Agent for the benefit of Lenders, with respect to
all of the issued and outstanding capital stock of the Borrower and (ii) any
other Pledge Agreement executed and delivered by any Loan Party to Agent for the
benefit of Lenders with respect to the Subsidiary Stock, in each case together
with all amendments, supplements, modifications, substitutions and replacements
thereto and thereof, and "Pledge Agreements" means collectively, all such Pledge
Agreements.
 
"PNC" shall have the meaning set forth in the preamble to this Agreement and
shall extend to all of its successors and assigns.
 
"Project Indebtedness" shall mean secured or unsecured Indebtedness of any
Borrower Party, which does not exceed One Hundred Fifty Million and 00/100
Dollars ($150,000,000.00) in the aggregate at any time outstanding; provided
that the proceeds of such Indebtedness shall be used exclusively by the
applicable Borrower Party to complete construction of a manufacturing plant.
 
 
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"Projections" shall have the meaning set forth in Section 5.5(a) hereof.
 
"Properly Contested" shall mean, in the case of any Indebtedness or Lien, as
applicable, of any Person (including any taxes) that is not paid as and when due
or payable by reason of such Person's bona fide dispute concerning its liability
to pay same or concerning the amount thereof, (i) such Indebtedness or Lien, as
applicable, is being properly contested in good faith by appropriate proceedings
promptly instituted and diligently conducted; (ii) such Person has established
appropriate reserves as shall be required in conformity with GAAP; (iii) the
non-payment of such Indebtedness will not have a Material Adverse Effect and
will not result in the forfeiture of any assets of such Person; (iv) no Lien is
imposed upon any of such Person's assets with respect to such Indebtedness
unless such Lien is at all times junior and subordinate in priority to the Liens
in favor of Agent (except only with respect to property taxes that have priority
as a matter of applicable state law) and enforcement of such Lien is stayed
during the period prior to the final resolution or disposition of such dispute;
(v) if such Indebtedness or Lien, as applicable, results from, or is determined
by the entry, rendition or issuance against a Person or any of its assets of a
judgment, writ, order or decree, enforcement of such judgment, writ, order or
decree is stayed pending a timely appeal or other judicial review; and (vi) if
such contest is abandoned, settled or determined adversely (in whole or in part)
to such Person, such Person forthwith pays such Indebtedness and all penalties,
interest and other amounts due in connection therewith.
 
"Purchasing CLO" shall have the meaning set forth in Section 15.3(d) hereof.
 
"Purchasing Lender" shall have the meaning set forth in Section 15.3(c) hereof.
 
"RCRA" shall mean the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901
et seq., as same may be amended from time to time.
 
"Real Property" shall mean all of each Borrower Party's right, title and
interest in and to the owned and leased premises identified on Schedule 4.19
hereto or which is hereafter owned or leased by any Borrower Party.
 
"Receivables" shall mean and include all of the Borrower's accounts, contract
rights, instruments (including those evidencing indebtedness owed to the
Borrower by its Affiliates), documents, chattel paper (including electronic
chattel paper), general intangibles relating to accounts, drafts and
acceptances, credit card receivables and all other forms of obligations owing to
the Borrower arising out of or in connection with the sale or lease of Inventory
or the rendition of services, all supporting obligations, guarantees and other
security therefor, whether secured or unsecured, now existing or hereafter
created, and whether or not specifically sold or assigned to Agent hereunder.
 
"Receivables Advance Rate" shall have the meaning set forth in Section 2.1
(a)(y)(i) hereof.
 
"Register" shall have the meaning set forth in Section 15.3(e).
 
"Reimbursement Obligation" shall have the meaning set forth in Section 2.11(b)
hereof.
 
 
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"Release" shall mean any release, spill, discharge, leak or disposal of any
Hazardous Substance.
 
"Reportable Event" shall mean a reportable event described in Section 4043(c) of
ERISA or the regulations promulgated thereunder.
 
"Required Lenders" shall mean Lenders holding at least sixty-six and two-thirds
of one percent (66 2/3%) of the Advances and, if no Advances are outstanding,
shall mean Lenders holding at least sixty-six and two-thirds of one percent (66
2/3%) of the Commitment Percentages; provided, however, if there are fewer than
three (3) Lenders, Required Lenders shall mean all Lenders.
 
"Reserve Percentage" shall mean as of any day the maximum percentage in effect
on such day as prescribed by the Board of Governors of the Federal Reserve
System (or any successor) for determining the reserve requirements (including
supplemental, marginal and emergency reserve requirements) with respect to
eurocurrency funding (currently referred to as "Eurocurrency Liabilities".
 
"Revolving Advances" shall mean Advances made other than Letters of Credit.
 
"Revolving Credit Note" shall mean, collectively, the promissory notes referred
to in Section 2.1(a) hereof.
 
"Revolving Interest Rate" shall mean an interest rate per annum equal to (a) the
sum of the Alternate Base Rate plus the Applicable Base Rate Margin with respect
to Domestic Rate Loans and (b) the sum of the Eurodollar Rate plus the
Applicable Eurodollar Rate Margin with respect to Eurodollar Rate Loans.
 
"SEC" shall mean the Securities and Exchange Commission or any successor
thereto.
 
"Section 20 Subsidiary" shall mean the Subsidiary of the bank holding company
controlling PNC, which Subsidiary has been granted authority by the Federal
Reserve Board to underwrite and deal in certain Ineligible Securities.
 
"Securities Act" shall mean the Securities Act of 1933, as amended.
 
"Senior Debt Payments" shall mean and include all cash actually expended by the
Borrower and its Subsidiaries on a consolidated basis to make (a) interest
payments on any Advances hereunder, plus (b) payments for all fees, commissions
and charges set forth herein and with respect to any Advances, excluding any
fees or costs incurred in connection with the closing of this transaction or any
amortization of such fees and costs, plus (c) capitalized lease payments, plus
(d) payments with respect to any other Indebtedness for borrowed money.
 
"Settlement Date" shall mean the Closing Date and thereafter Wednesday or
Thursday of each week or more frequently if Agent deems appropriate unless such
day is not a Business Day in which case it shall be the next succeeding Business
Day.
 
 
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"Standard & Poor's" shall mean Standard & Poor's Ratings Services, a division of
The McGraw-Hill Companies, Inc.
 
"Subsidiary" of any Person shall mean a corporation or other entity of whose
Equity Interests having ordinary voting power (other than Equity Interests
having such power only by reason of the happening of a contingency) to elect a
majority of the directors of such corporation, or other Persons performing
similar functions for such entity, are owned, directly or indirectly, by such
Person.
 
"Subsidiary Stock" shall mean all of the issued and outstanding Equity Interests
of any Subsidiary owned by any Borrower Party (not to exceed sixty-five percent
(65%) of the Equity Interests of any Foreign Subsidiary).
 
"Taxes" shall mean all federal, state, municipal and other governmental taxes,
levies, charges, claims and assessments which are or may be owed or collected by
any Borrower Party with respect to its business, operations, Collateral or
otherwise.
 
"Term" shall have the meaning set forth in Section 13.1 hereof.
 
"Termination Event" shall mean (i) a Reportable Event with respect to any Plan
or Multiemployer Plan; (ii) the withdrawal of the Borrower or any member of the
Controlled Group from a Plan or Multiemployer Plan during a plan year in which
such entity was a "substantial employer" as defined in Section 4001(a)(2) of
ERISA; (iii) the providing of notice of intent to terminate a Plan in a distress
termination described in Section 4041(c) of ERISA; (iv) the institution by the
PBGC of proceedings to terminate a Plan or Multiemployer Plan; (v) any event or
condition (a) which might constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan or
Multiemployer Plan, or (b) that may result in termination of a Multiemployer
Plan pursuant to Section 4041A of ERISA; or (vi) the partial or complete
withdrawal within the meaning of Sections 4203 and 4205 of ERISA, of the
Borrower or any member of the Controlled Group from a Multiemployer Plan.
 
"Testing Event" shall mean (i) Undrawn Availability for any consecutive five (5)
Business Day period is less than or equal to Twelve Million Five Hundred
Thousand and 00/100 Dollars ($12,500,000.00), or (ii) Undrawn Availability on
any Business Day is less than or equal to Ten Million and 00/100 Dollars
($10,000,000.00).
 
"Testing Event Cure" shall mean, following the occurrence of a Testing Event,
Undrawn Availability for any consecutive thirty (30) day period exceeds Fifteen
Million and 00/100 Dollars ($15,000,000.00)
 
"Toxic Substance" shall mean and include any material present on the Real
Property which has been shown to have significant adverse effect on human health
or which is subject to regulation under the Toxic Substances Control Act (TSCA),
15 U.S.C. §§ 2601 et seq., or any other applicable Federal or state laws now in
force or hereafter enacted relating to toxic substances. "Toxic Substance"
includes asbestos, polychlorinated biphenyls (PCBs) and lead-based paints.
 
 
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"Trading with the Enemy Act" shall mean the foreign assets control regulations
of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as
amended) and any enabling legislation or executive order relating thereto.
 
"Transactions" shall have the meaning set forth in Section 5.8(a) hereof.
 
"Transferee" shall have the meaning set forth in Section 15.3(d) hereof.
 
"Undrawn Availability" at a particular date shall mean an amount equal to (a)
the lesser of (i) the Formula Amount or (ii) the Maximum Revolving Advance
Amount, minus (b) the sum of (i) the outstanding amount of Advances plus (ii)
all amounts due and owing to the Borrower's trade creditors which are sixty (60)
days or more past due, plus (iii) fees and expenses for which Borrower is liable
but which have not been paid or charged to Borrower's Account.
 
"Unfinanced Capital Expenditures" shall mean all Capital Expenditures of the
Borrower and its Subsidiaries on a consolidated basis other than those made
utilizing financing provided by the applicable seller or third party lenders.
For the avoidance of doubt, Capital Expenditures made by the Borrower or any of
its Subsidiaries utilizing Revolving Advances shall be deemed Unfinanced Capital
Expenditures.
 
"Uniform Commercial Code" shall have the meaning set forth in Section 1.3
hereof.
 
"Unrestricted Cash" shall mean cash of Holding which is unrestricted, accessible
and denominated in U.S. Dollars and on deposit in an account of Holding which is
maintained at a domestic branch of a financial institution.
 
"USA PATRIOT Act" shall mean the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001,
Public Law 107-56, as the same has been, or shall hereafter be, renewed,
extended, amended or replaced.
 
"Week" shall mean the time period commencing with the opening of business on a
Wednesday and ending on the end of business the following Tuesday.
 
"Year End Financial Statements" shall have the meaning set forth in Section
5.5(b).
 
1.3.    Uniform Commercial Code Terms.
 
All terms used herein and defined in the Uniform Commercial Code as adopted in
the Commonwealth of Pennsylvania from time to time (the "Uniform Commercial
Code") shall have the meaning given therein unless otherwise defined herein.
Without limiting the foregoing, the terms "accounts", "chattel paper",
"commercial tort claims", "instruments", "general intangibles", "goods",
"payment intangibles", "proceeds", "supporting obligations", "securities",
"investment property", "documents", "deposit accounts", "software", "letter of
credit rights", "inventory", "equipment" and "fixtures", as and when used in the
description of Collateral (including in Section 4.1 hereto) shall have the
meanings given to such terms in Articles 8 or 9 of the Uniform Commercial Code.
To the extent the definition of any category or type of collateral is expanded
by any amendment, modification or revision to the Uniform Commercial Code, such
expanded definition will apply automatically as of the date of such amendment,
modification or revision.
 
 
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1.4.          Certain Matters of Construction.
 
The terms "herein", "hereof" and "hereunder" and other words of similar import
refer to this Agreement as a whole and not to any particular section, paragraph
or subdivision. All references herein to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and Exhibits
and Schedules to, this Agreement. Any pronoun used shall be deemed to cover all
genders. Wherever appropriate in the context, terms used herein in the singular
also include the plural and vice versa. All references to statutes and related
regulations shall include any amendments of same and any successor statutes and
regulations. Unless otherwise provided, all references to any instruments or
agreements to which Agent is a party, including references to any of the Other
Documents, shall include any and all modifications or amendments thereto and any
and all extensions or renewals thereof. All references herein to the time of day
shall mean the time in Pittsburgh, Pennsylvania. Unless otherwise provided, all
financial calculations shall be performed with Inventory valued on a first-in,
first-out basis. Whenever the words "including" or "include" shall be used, such
words shall be understood to mean "including, without limitation" or "include,
without limitation". A Default or Event of Default shall be deemed to exist at
all times during the period commencing on the date that such Default or Event of
Default occurs to the date on which such Default or Event of Default is waived
in writing pursuant to this Agreement or, in the case of a Default, is cured
within any period of cure expressly provided for in this Agreement; and an Event
of Default shall "continue" or be "continuing" until such Event of Default has
been waived in writing by the Required Lenders. Any Lien referred to in this
Agreement or any of the Other Documents as having been created in favor of
Agent, any agreement entered into by Agent pursuant to this Agreement or any of
the Other Documents, any payment made by or to or funds received by Agent
pursuant to or as contemplated by this Agreement or any of the Other Documents,
or any act taken or omitted to be taken by Agent, shall, unless otherwise
expressly provided, be created, entered into, made or received, or taken or
omitted, for the benefit or account of Agent and Lenders. All covenants
hereunder shall be given independent effect so that if a particular action or
condition is not permitted by any of such covenants, the fact that it would be
permitted by an exception to, or otherwise within the limitations of, another
covenant shall not avoid the occurrence of a default if such action is taken or
condition exists. In addition, all representations and warranties hereunder
shall be given independent effect so that if a particular representation or
warranty proves to be incorrect or is breached, the fact that another
representation or warranty concerning the same or similar subject matter is
correct or is not breached will not affect the incorrectness of a breach of a
representation or warranty hereunder.
 
 
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II.            ADVANCES, PAYMENTS.
 
2.1.          Revolving Advances.
 
(a) Amount of Revolving Advances. Subject to the terms and conditions set forth
in this Agreement including Section 2.1(b), each Lender, severally and not
jointly, will make Revolving Advances to Borrower in aggregate amounts
outstanding at any time equal to such Lender's Commitment Percentage of the
lesser of (x) the Maximum Revolving Advance Amount less the aggregate Maximum
Undrawn Amount of all outstanding Letters of Credit and (y) an amount equal to
the sum of:
 
(i) up to eighty-five percent (85%), subject to the provisions of Section 2.1(b)
hereof ("Receivables Advance Rate"), of Eligible Receivables, plus
 
(ii) subject to the provisions of Section 2.1(b) hereof, up to the lesser of (A)
the lesser of (x) up to sixty-five percent (65%) ("Inventory Advance Rate" and
together with the Receivables Advance Rate, the "Advance Rates") of the
aggregate value of the Eligible Inventory, valued at the lower of
weighted-average cost or market, or (y) up to eighty-five percent (85%) of the
Net Orderly Liquidation Value of the Eligible Inventory, or (B) Thirty Million
and 00/100 Dollars ($30,000,000.00) in the aggregate at any one time, minus
 
(iii) the aggregate Maximum Undrawn Amount of all outstanding Letters of Credit,
minus
 
(iv) such reserves as Agent may reasonably deem proper and necessary from time
to time.
 
The amount derived from (x) the sum of Sections 2.1 (a)(y)(i) and (ii), minus
(y) Section 2.1 (a)(y)(iv), at any time and from time to time shall be referred
to as the "Formula Amount". The Revolving Advances shall be evidenced by one or
more secured promissory notes (collectively, the "Revolving Credit Note")
substantially in the form attached hereto as Exhibit 2.1(a).
 
(b) Discretionary Rights. The Advance Rates may be increased or decreased by
Agent at any time and from time to time in the exercise of its reasonable
discretion. Each Borrower consents to any such increases or decreases and
acknowledges that decreasing the Advance Rates or increasing or imposing
reserves may limit or restrict Advances requested by Borrower. The rights of
Agent under this subsection are subject to the provisions of Section 15.2(b).
 
2.2.       Procedure for Revolving Advances Borrowing.
 
(a) Borrower may notify Agent prior to 12:00 p.m. on a Business Day of a
Borrower's request to incur, on that day, a Revolving Advance hereunder. Should
any amount required to be paid as interest hereunder, or as fees or other
charges under this Agreement or any other agreement with Agent or Lenders, or
with respect to any other Obligation, become due, same shall be deemed a request
for a Revolving Advance maintained as a Domestic Rate Loan as of the date such
payment is due, in the amount required to pay in full such interest, fee, charge
or Obligation under this Agreement or any other agreement with Agent or Lenders,
and such request shall be irrevocable.
 
 
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(b) Notwithstanding the provisions of subsection (a) above, in the event the
Borrower desires to obtain a Eurodollar Rate Loan, Borrower shall give Agent
written notice by no later than 12:00 p.m. on the day which is three (3)
Business Days prior to the date such Eurodollar Rate Loan is to be borrowed,
specifying (i) the date of the proposed borrowing (which shall be a Business
Day), (ii) the type of borrowing and the amount on the date of such Advance to
be borrowed, which amount shall be in an aggregate principal amount that is not
less than One Million and 00/100 Dollars ($1,000,000.00) and integral multiples
of One Million and 00/100 Dollars ($1,000,000.00) in excess thereof, and (iii)
the duration of the first Interest Period therefor. Interest Periods for
Eurodollar Rate Loans shall be for one, two or three months; provided, if an
Interest Period would end on a day that is not a Business Day, it shall end on
the next succeeding Business Day unless such day falls in the next succeeding
calendar month in which case the Interest Period shall end on the next preceding
Business Day. No Eurodollar Rate Loan shall be made available to the Borrower
during the continuance of a Default or an Event of Default. After giving effect
to each requested Eurodollar Rate Loan, including those which are converted from
a Domestic Rate Loan under Section 2.2(d), there shall not be outstanding more
than four (4) Eurodollar Rate Loans, in the aggregate.
 
(c) Each Interest Period of a Eurodollar Rate Loan shall commence on the date
such Eurodollar Rate Loan is made and shall end on such date as Borrower may
elect as set forth in subsection (b)(iii) above provided that the exact length
of each Interest Period shall be determined in accordance with the practice of
the interbank market for offshore Dollar deposits and no Interest Period shall
end after the last day of the Term.
 
Borrower shall elect the initial Interest Period applicable to a Eurodollar Rate
Loan by its notice of borrowing given to Agent pursuant to Section 2.2(b) or by
its notice of conversion given to Agent pursuant to Section 2.2(d), as the case
may be. Borrower shall elect the duration of each succeeding Interest Period by
giving irrevocable written notice to Agent of such duration not later than 10:00
a.m. on the day which is three (3) Business Days prior to the last day of the
then current Interest Period applicable to such Eurodollar Rate Loan. If Agent
does not receive timely notice of the Interest Period elected by Borrower,
Borrower shall be deemed to have elected to convert to a Domestic Rate Loan
subject to Section 2.2(d) hereinbelow.
 
(d) Provided that no Event of Default shall have occurred and be continuing,
Borrower may, on the last Business Day of the then current Interest Period
applicable to any outstanding Eurodollar Rate Loan, or on any Business Day with
respect to Domestic Rate Loans, convert any such loan into a loan of another
type in the same aggregate principal amount provided that any conversion of a
Eurodollar Rate Loan shall be made only on the last Business Day of the then
current Interest Period applicable to such Eurodollar Rate Loan. If Borrower
desires to convert a loan, Borrower shall give Agent written notice by no later
than 10:00 a.m. (i) on the day which is three (3) Business Days' prior to the
date on which such conversion is to occur with respect to a conversion from a
Domestic Rate Loan to a Eurodollar Rate Loan, or (ii) on the day which is one
(1) Business Day prior to the date on which such conversion is to occur with
respect to a conversion from a Eurodollar Rate Loan to a Domestic Rate Loan,
specifying, in each case, the date of such conversion, the loans to be converted
and if the conversion is from a Domestic Rate Loan to any other type of loan,
the duration of the first Interest Period therefor.
 
 
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(e) At its option and upon written notice given prior to 10:00 a.m. at least
three (3) Business Days' prior to the date of such prepayment, the Borrower may
prepay the Eurodollar Rate Loans in whole at any time or in part from time to
time with accrued interest on the principal being prepaid to the date of such
repayment. Such Borrower shall specify the date of prepayment of Advances which
are Eurodollar Rate Loans and the amount of such prepayment. In the event that
any prepayment of a Eurodollar Rate Loan is required or permitted on a date
other than the last Business Day of the then current Interest Period with
respect thereto, the Borrower shall indemnify Agent and Lenders therefor in
accordance with Section 2.2(f) hereof.
 
(f) Each Borrower shall indemnify Agent and Lenders and hold Agent and Lenders
harmless from and against any and all losses or expenses that Agent and Lenders
may sustain or incur as a consequence of any prepayment, conversion of or any
default by the Borrower in the payment of the principal of or interest on any
Eurodollar Rate Loan or failure by the Borrower to complete a borrowing of, a
prepayment of or conversion of or to a Eurodollar Rate Loan after notice thereof
has been given, including, but not limited to, any interest payable by Agent or
Lenders to lenders of funds obtained by it in order to make or maintain its
Eurodollar Rate Loans hereunder. A certificate as to any additional amounts
payable pursuant to the foregoing sentence submitted by Agent or any Lender to
Borrower shall be conclusive absent manifest error.
 
(g) Notwithstanding any other provision hereof, if any Applicable Law, or any
change therein or in the interpretation or application thereof, shall make it
unlawful for any Lender (for purposes of this subsection (g), the term "Lender"
shall include any Lender and the office or branch where any Lender or any
corporation or bank controlling such Lender makes or maintains any Eurodollar
Rate Loans) to make or maintain its Eurodollar Rate Loans, the obligation of
Lenders to make Eurodollar Rate Loans hereunder shall forthwith be cancelled and
Borrower shall, if any affected Eurodollar Rate Loans are then outstanding,
promptly upon request from Agent, either pay all such affected Eurodollar Rate
Loans or convert such affected Eurodollar Rate Loans into loans of another type;
provided, however, it is understood and agreed that the Dodd-Frank Wall Street
Reform and Consumer Protection Act (Pub. L. 111-203, H.R. 4173), all Laws
relating thereto, all interpretations and applications thereof and any
compliance by the Agent or any Lender with any request or directive relating
thereto shall, for the purposes of this Agreement, be deemed to be adopted
subsequent to the date hereof. If any such payment or conversion of any
Eurodollar Rate Loan is made on a day that is not the last day of the Interest
Period applicable to such Eurodollar Rate Loan, Borrower shall pay Agent, upon
Agent's request, such amount or amounts as may be necessary to compensate
Lenders for any loss or expense sustained or incurred by Lenders in respect of
such Eurodollar Rate Loan as a result of such payment or conversion, including,
but not limited to, any interest or other amounts payable by Lenders to lenders
of funds obtained by Lenders in order to make or maintain such Eurodollar Rate
Loan. A certificate as to any additional amounts payable pursuant to the
foregoing sentence submitted by Lenders to Borrower shall be conclusive absent
manifest error.
 
 
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2.3.       Disbursement of Advance Proceeds.
 
All Advances shall be disbursed from whichever office or other place Agent may
designate from time to time and, together with any and all other Obligations of
Borrower to Agent or Lenders, shall be charged to Borrower's Account on Agent's
books. During the Term, Borrower may use the Revolving Advances by borrowing,
prepaying and reborrowing, all in accordance with the terms and conditions
hereof. The proceeds of each Revolving Advance requested by Borrower or deemed
to have been requested by the Borrower under Section 2.2 hereof shall, with
respect to requested Revolving Advances to the extent Lenders make such
Revolving Advances, be made available to the Borrower on the day so requested by
way of credit to the Borrower's operating account at PNC, or such other bank as
Borrower may designate following notification to Agent, in immediately available
federal funds or other immediately available funds or, with respect to Revolving
Advances deemed to have been requested by the Borrower, be disbursed to Agent to
be applied to the outstanding Obligations giving rise to such deemed request.
 
2.4.       Maximum Advances.
 
The aggregate balance of Revolving Advances outstanding at any time shall not
exceed the lesser of (a) the Maximum Revolving Advance Amount or (b) the Formula
Amount less, in each case, the aggregate Maximum Undrawn Amount of all issued
and outstanding Letters of Credit.
 
2.5.       Repayment of Advances.
 
(a) The Revolving Advances shall be due and payable in full on the last day of
the Term subject to earlier prepayment as herein provided.
 
(b) Each Borrower Party recognizes that the amounts evidenced by checks, notes,
drafts or any other items of payment relating to and/or proceeds of Collateral
may not be collectible by Agent on the date received. In consideration of
Agent's agreement to conditionally credit Borrower's Account as of the next
Business Day following the Agent's receipt of those items of payment, each
Borrower Party agrees that, in computing the charges under this Agreement, all
items of payment shall be deemed applied by Agent on account of the Obligations
(i) on the Business Day Agent receives such payments via wire transfer or
electronic depository check or (ii) in the case of payments received by Agent in
any other form, one (1) Business Day after the Business Day such payment
constitutes good funds in Agent's account. Agent is not, however, required to
credit Borrower's Account for the amount of any item of payment which is
unsatisfactory to Agent and Agent may charge Borrower's Account for the amount
of any item of payment which is returned to Agent unpaid.
 
(c) All payments of principal, interest and other amounts payable hereunder, or
under any of the Other Documents shall be made to Agent at the Payment Office
not later than 1:00 P.M. on the due date therefor in lawful money of the United
States of America in federal funds or other funds immediately available to
Agent. Agent shall have the right to effectuate payment on any and all
Obligations due and owing hereunder by charging Borrower's Account or by making
Advances as provided in Section 2.2 hereof.
 
 
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(d) Borrower shall pay principal, interest, and all other amounts payable
hereunder, or under any related agreement, without any deduction whatsoever,
including any deduction for any setoff or counterclaim.
 
2.6.       Repayment of Excess Advances.
 
The aggregate balance of Advances outstanding at any time in excess of the
maximum amount of Advances permitted hereunder shall be immediately due and
payable without the necessity of any demand, at the Payment Office, whether or
not a Default or Event of Default has occurred.
 
2.7.          Statement of Account.
 
Agent shall maintain, in accordance with its customary procedures, a loan
account ("Borrower's Account") in the name of Borrower in which shall be
recorded the date and amount of each Advance made by Agent and the date and
amount of each payment in respect thereof; provided, however, the failure by
Agent to record the date and amount of any Advance shall not adversely affect
Agent or any Lender. Each month, Agent shall send to Borrower a statement
showing the accounting for the Advances made, payments made or credited in
respect thereof, and other transactions between Agent and Borrower during such
month. The monthly statements shall be deemed correct and binding upon Borrower
in the absence of manifest error and shall constitute an account stated between
Lenders and Borrower unless Agent receives a written statement of Borrower's
specific exceptions thereto within thirty (30) days after such statement is
received by Borrower. The records of Agent with respect to the loan account
shall be conclusive evidence absent manifest error of the amounts of Advances
and other charges thereto and of payments applicable thereto.
 
2.8.          Letters of Credit.
 
Subject to the terms and conditions hereof, Agent shall issue or cause the
issuance of standby and/or trade letters of credit (such letters of credit and
the Existing Letters of Credit are collectively, the "Letters of Credit") for
the account of the Borrower; provided, however, that Agent will not be required
to issue or cause to be issued any Letters of Credit to the extent that the
issuance thereof would then cause the sum of (i) the outstanding Revolving
Advances plus (ii) the Maximum Undrawn Amount of all outstanding Letters of
Credit to exceed the lesser of (x) the Maximum Revolving Advance Amount or (y)
the Formula Amount. The Maximum Undrawn Amount of outstanding Letters of Credit
shall not exceed in the aggregate at any time the Letter of Credit Sublimit. All
disbursements or payments related to Letters of Credit shall be deemed to be
Domestic Rate Loans consisting of Revolving Advances and shall bear interest at
the Revolving Interest Rate for Domestic Rate Loans; Letters of Credit that have
not been drawn upon shall not bear interest.
 
 
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2.9.          Issuance of Letters of Credit.
 
(a) Borrower may request Agent to issue or cause the issuance of a Letter of
Credit by delivering to Agent at the Payment Office, prior to 12:00 p.m., at
least five (5) Business Days' prior to the proposed date of issuance, Agent's
form of Letter of Credit Application (the "Letter of Credit Application")
completed to the satisfaction of Agent; and, such other certificates, documents
and other papers and information as Agent may reasonably request. Borrower also
has the right to give instructions and make agreements with respect to any
application, any applicable letter of credit and security agreement, any
applicable letter of credit reimbursement agreement and/or any other applicable
agreement, any letter of credit and the disposition of documents, disposition of
any unutilized funds, and to agree with Agent upon any amendment, extension or
renewal of any Letter of Credit. As of the date hereof, those letters of credit
set forth on Schedule 2.9 attached hereto and made a part hereof, which were
issued by the Agent and are outstanding on the date hereof (the "Existing
Letters of Credit"), are hereby deemed to be Letters of Credit issued and
outstanding hereunder.
 
(b) Each Letter of Credit shall, among other things, (i) provide for the payment
of sight drafts, other written demands for payment, or acceptances of usance
drafts when presented for honor thereunder in accordance with the terms thereof
and when accompanied by the documents described therein and (ii) have an expiry
date not later than twenty-four (24) months after such Letter of Credit's date
of issuance and in no event later than the last day of the Term. Each standby
Letter of Credit shall be subject either to the Uniform Customs and Practice for
Documentary Credits as most recently published by the International Chamber of
Commerce at the time a Letter of Credit is issued (the "UCP") or the
International Standby Practices (ISP98 International Chamber of Commerce
Publication Number 590) (the "ISP98 Rules")), and any subsequent revision
thereof at the time a standby Letter of Credit is issued, as determined by
Agent, and each trade Letter of Credit shall be subject to the UCP.
 
(c) Agent shall use its reasonable efforts to notify Lenders of the request by
Borrower for a Letter of Credit hereunder.
 
2.10.     Requirements For Issuance of Letters of Credit.
 
(a) Borrower shall authorize and direct any Issuer to name the Borrower as the
"Applicant" or "Account Party" of each Letter of Credit. If Agent is not the
Issuer of any Letter of Credit, Borrower shall authorize and direct the Issuer
to deliver to Agent all instruments, documents, and other writings and property
received by the Issuer pursuant to the Letter of Credit and to accept and rely
upon Agent's instructions and agreements with respect to all matters arising in
connection with the Letter of Credit or the application therefor.
 
(b) In connection with all Letters of Credit issued or caused to be issued by
Agent under this Agreement, the Borrower hereby appoints Agent, or its designee,
as its attorney, with full power and authority if an Event of Default shall have
occurred, (i) to sign and/or endorse the Borrower's name upon any warehouse or
other receipts, letter of credit applications and acceptances, (ii) to sign the
Borrower's name on bills of lading; (iii) to clear Inventory through the United
States of America Customs Department ("Customs") in the name of the Borrower or
Agent or Agent's designee, and to sign and deliver to Customs officials powers
of attorney in the name of the Borrower for such purpose; and (iv) to complete
in the Borrower's name or Agent's, or in the name of Agent's designee, any
order, sale or transaction, obtain the necessary documents in connection
therewith, and collect the proceeds thereof. Neither Agent nor its attorneys
will be liable for any acts or omissions nor for any error of judgment or
mistakes of fact or law, except for Agent's or its attorney's willful
misconduct. This power, being coupled with an interest, is irrevocable as long
as any Letters of Credit remain outstanding.
 
 
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2.11.        Disbursements, Reimbursement.
 
(a) Immediately upon the issuance of each Letter of Credit, each Lender shall be
deemed to, and hereby irrevocably and unconditionally agrees to, purchase from
Agent a participation in such Letter of Credit and each drawing thereunder in an
amount equal to such Lender's Commitment Percentage of the Maximum Face Amount
of such Letter of Credit and the amount of such drawing, respectively.
 
(b) In the event of any request for a drawing under a Letter of Credit by the
beneficiary or transferee thereof, Agent will promptly notify Borrower. Provided
that Borrower shall have received such notice, Borrower shall reimburse (such
obligation to reimburse Agent shall sometimes be referred to as a "Reimbursement
Obligation") Agent prior to 12:00 Noon on each date that an amount is paid by
Agent under any Letter of Credit (each such date, a "Drawing Date") in an amount
equal to the amount so paid by Agent. In the event Borrower fail to reimburse
Agent for the full amount of any drawing under any Letter of Credit by 12:00
Noon on the Drawing Date, Agent will promptly notify each Lender thereof, and
Borrower shall be deemed to have requested that a Revolving Advance maintained
as a Domestic Rate Loan be made by Lenders to be disbursed on the Drawing Date
under such Letter of Credit, subject to the amount of the unutilized portion of
the lesser of Maximum Revolving Advance Amount or the Formula Amount and subject
to Section 8.2 hereof. Any notice given by Agent pursuant to this Section
2.11(b) may be oral if immediately confirmed in writing; provided that the lack
of such an immediate confirmation shall not affect the conclusiveness or binding
effect of such notice.
 
(c) Each Lender shall upon any notice pursuant to Section 2.11(b) make available
to Agent an amount in immediately available funds equal to its Commitment
Percentage of the amount of the drawing, whereupon the participating Lenders
shall (subject to Section 2.11(d)) each be deemed to have made a Revolving
Advance maintained as a Domestic Rate Loan to Borrower in that amount. If any
Lender so notified fails to make available to Agent the amount of such Lender's
Commitment Percentage of such amount by no later than 2:00 p.m. on the Drawing
Date, then interest shall accrue on such Lender's obligation to make such
payment, from the Drawing Date to the date on which such Lender makes such
payment (i) at a rate per annum equal to the Federal Funds Effective Rate during
the first three days following the Drawing Date and (ii) at a rate per annum
equal to the rate applicable to Revolving Advances maintained as a Domestic Rate
Loans on and after the fourth day following the Drawing Date. Agent will
promptly give notice of the occurrence of the Drawing Date, but failure of Agent
to give any such notice on the Drawing Date or in sufficient time to enable any
Lender to effect such payment on such date shall not relieve such Lender from
its obligation under this Section 2.11(c), provided that such Lender shall not
be obligated to pay interest as provided in Section 2.1 1(c)(i) and (ii) until
and commencing from the date of receipt of notice from Agent of a drawing.
 
 
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(d) With respect to any unreimbursed drawing that is not converted into a
Revolving Advance maintained as a Domestic Rate Loan to Borrower in whole or in
part as contemplated by Section 2.11(b), because of Loan Parties' failure to
satisfy the conditions set forth in Section 8.2 (other than any notice
requirements) or for any other reason, Borrower shall be deemed to have incurred
from Agent a borrowing (each a "Letter of Credit Borrowing") in the amount of
such drawing. Such Letter of Credit Borrowing shall be due and payable on demand
(together with interest) and shall bear interest at the rate per annum
applicable to a Revolving Advance maintained as a Domestic Rate Loan. Each
Lender's payment to Agent pursuant to Section 2.11(c) shall be deemed to be a
payment in respect of its participation in such Letter of Credit Borrowing and
shall constitute a "Participation Advance" from such Lender in satisfaction of
its Participation Commitment under this Section 2.11.
 
(e) Each Lender's Participation Commitment shall continue until the last to
occur of any of the following events: (x) Agent ceases to be obligated to issue
or cause to be issued Letters of Credit hereunder; (y) no Letter of Credit
issued or created hereunder remains outstanding and uncancelled and (z) all
Persons (other than Loan Parties) have been fully reimbursed for all payments
made under or relating to Letters of Credit.
 
2.12.    Repayment of Participation Advances.
 
(a) Upon (and only upon) receipt by Agent for its account of immediately
available funds from Borrower (i) in reimbursement of any payment made by Agent
under the Letter of Credit with respect to which any Lender has made a
Participation Advance to Agent, or (ii) in payment of interest on such a payment
made by Agent under such a Letter of Credit, Agent will pay to each Lender, in
the same funds as those received by Agent, the amount of such Lender's
Commitment Percentage of such funds, except Agent shall retain the amount of the
Commitment Percentage of such funds of any Lender that did not make a
Participation Advance in respect of such payment by Agent.
 
(b) If Agent is required at any time to return to the Borrower, or to a trustee,
receiver, liquidator, custodian, or any official in any insolvency proceeding,
any portion of the payments made by Borrower to Agent pursuant to Section
2.12(a) in reimbursement of a payment made under the Letter of Credit or
interest or fee thereon, each Lender shall, on demand of Agent, forthwith return
to Agent the amount of its Commitment Percentage of any amounts so returned by
Agent plus interest at the Federal Funds Effective Rate.
 
2.13.   Documentation.
 
The Borrower agrees to be bound by the terms of the Letter of Credit Application
and by Agent's interpretations of any Letter of Credit issued on behalf of the
Borrower and by Agent's written regulations and customary practices relating to
letters of credit, though Agent's interpretations may be different from the
Borrower's own. In the event of a conflict between the Letter of Credit
Application and this Agreement, this Agreement shall govern. It is understood
and agreed that, except in the case of gross negligence or willful misconduct
(as determined by a court of competent jurisdiction in a final non-appealable
judgment), Agent shall not be liable for any error, negligence and/or mistakes,
whether of omission or commission, in following Borrower's or the Borrower's
instructions or those contained in the Letters of Credit or any modifications,
amendments or supplements thereto.
 
 
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2.14.    Determination to Honor Drawing Request.
 
In determining whether to honor any request for drawing under any Letter of
Credit by the beneficiary thereof, Agent shall be responsible only to determine
that the documents and certificates required to be delivered under such Letter
of Credit have been delivered and that they comply on their face with the
requirements of such Letter of Credit and that any other drawing condition
appearing on the face of such Letter of Credit has been satisfied in the manner
so set forth.
 
2.15.   Nature of Participation and Reimbursement Obligations.
 
Each Lender's obligation in accordance with this Agreement to make the Revolving
Advances or Participation Advances as a result of a drawing under a Letter of
Credit, and the obligations of Borrower to reimburse Agent upon a draw under a
Letter of Credit, shall be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms of this Section 2.15 under all
circumstances, including the following circumstances:
 
(i) any set-off, counterclaim, recoupment, defense or other right which such
Lender may have against Agent, any Loan Party or any other Person for any reason
whatsoever;
 
(ii) the failure of any Loan Party or any other Person to comply, in connection
with a Letter of Credit Borrowing, with the conditions set forth in this
Agreement for the making of a Revolving Advance, it being acknowledged that such
conditions are not required for the making of a Letter of Credit Borrowing and
the obligation of Lenders to make Participation Advances under Section 2.10;
 
(iii) any lack of validity or enforceability of any Letter of Credit;
 
(iv) any claim of breach of warranty that might be made by Borrower or any
Lender against the beneficiary of a Letter of Credit, or the existence of any
claim, set-off, recoupment, counterclaim, cross-claim, defense or other right
which the Borrower or any Lender may have at any time against a beneficiary, any
successor beneficiary or any transferee of any Letter of Credit or the proceeds
thereof (or any Persons for whom any such transferee may be acting), Agent or
any Lender or any other Person, whether in connection with this Agreement, the
transactions contemplated herein or any unrelated transaction (including any
underlying transaction between the Borrower or any Subsidiaries of the Borrower
and the beneficiary for which any Letter of Credit was procured);
 
(v) the lack of power or authority of any signer of (or any defect in or forgery
of any signature or endorsement on) or the form of or lack of validity,
sufficiency, accuracy, enforceability or genuineness of any draft, demand,
instrument, certificate or other document presented under or in connection with
any Letter of Credit, or any fraud or alleged fraud in connection with any
Letter of Credit, or the transport of any property or provisions of services
relating to a Letter of Credit, in each case even if Agent or any of Agent's
Affiliates has been notified thereof;
 
 
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(vi)    payment by Agent under any Letter of Credit against presentation of a
demand, draft or certificate or other document which does not comply with the
terms of such Letter of Credit;
 
(vii)   the solvency of, or any acts or omissions by, any beneficiary of any
Letter of Credit, or any other Person having a role in any transaction or
obligation relating to a Letter of Credit, or the existence, nature, quality,
quantity, condition, value or other characteristic of any property or services
relating to a Letter of Credit;
 
(viii)  any failure by Agent or any of Agent's Affiliates to issue any Letter of
Credit in the form requested by Borrower, unless Agent has received written
notice from Borrower of such failure within three (3) Business Days after Agent
shall have furnished Borrower a copy of such Letter of Credit and such error is
material and no drawing has been made thereon prior to receipt of such notice;
 
(ix)     any Material Adverse Effect on any Loan Party;
 
(x)      any breach of this Agreement or any Other Document by any party
thereto;                                 
 
(xi)     the occurrence or continuance of an insolvency proceeding with respect
to any Loan Party;
 
(xii)    the fact that a Default or Event of Default shall have occurred and be
continuing;
 
(xiii)   the fact that the Term shall have expired or this Agreement or the
Obligations hereunder shall have been terminated; and
 
(xiv)   any other circumstance or happening whatsoever, whether or not similar
to any of the foregoing.
 
2.16.        Indemnity.
 
In addition to amounts payable as provided in Section 15.5, each Loan Party
hereby agrees to protect, indemnify, pay and save harmless Agent and any of
Agent's Affiliates that have issued a Letter of Credit from and against any and
all claims, demands, liabilities, damages, taxes, penalties, interest,
judgments, losses, costs, charges and expenses (including reasonable fees,
expenses and disbursements of counsel and allocated costs of internal counsel)
which Agent or any of Agent's Affiliates may incur or be subject to as a
consequence, direct or indirect, of the issuance of any Letter of Credit, other
than as a result of (A) the gross negligence or willful misconduct of Agent as
determined by a final and non-appealable judgment of a court of competent
jurisdiction or (b) the wrongful dishonor by Agent or any of Agent's Affiliates
of a proper demand for payment made under any Letter of Credit, except if such
dishonor resulted from any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto Governmental Body (all such acts or
omissions herein called "Governmental Acts").
 
 
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2.17.        Liability for Acts and Omissions.
 
As between Loan Parties and Agent and Lenders, each Loan Party assumes all risks
of the acts and omissions of, or misuse of the Letters of Credit by, the
respective beneficiaries of such Letters of Credit. In furtherance and not in
limitation of the respective foregoing, Agent shall not be responsible for: (i)
the form, validity, sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the application for an
issuance of any such Letter of Credit, even if it should in fact prove to be in
any or all respects invalid, insufficient, inaccurate, fraudulent or forged
(even if Agent shall have been notified thereof); (ii) the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any such Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) the failure of the beneficiary of
any such Letter of Credit, or any other party to which such Letter of Credit may
be transferred, to comply fully with any conditions required in order to draw
upon such Letter of Credit or any other claim of the Borrower against any
beneficiary of such Letter of Credit, or any such transferee, or any dispute
between or among the Borrower and any beneficiary of any Letter of Credit or any
such transferee; (iv) errors, omissions, interruptions or delays in transmission
or delivery of any messages, by mail, cable, facsimile, telex or otherwise,
whether or not they be in cipher; (v) errors in interpretation of technical
terms; (vi) any loss or delay in the transmission or otherwise of any document
required in order to make a drawing under any such Letter of Credit or of the
proceeds thereof; (vii) the misapplication by the beneficiary of any such Letter
of Credit of the proceeds of any drawing under such Letter of Credit; or (viii)
any consequences arising from causes beyond the control of Agent, including any
governmental acts, and none of the above shall affect or impair, or prevent the
vesting of, any of Agent's rights or powers hereunder. Nothing in the preceding
sentence shall relieve Agent from liability for Agent's gross negligence or
willful misconduct (as determined by a court of competent jurisdiction in a
final non-appealable judgment) in connection with actions or omissions described
in such clauses (i) through (viii) of such sentence. In no event shall Agent or
Agent's Affiliates be liable to any Loan Party for any indirect, consequential,
incidental, punitive, exemplary or special damages or expenses (including
attorneys' fees), or for any damages resulting from any change in the value of
any property relating to a Letter of Credit.
 
Without limiting the generality of the foregoing, Agent and each of its
Affiliates may rely on any oral or other communication believed in good faith by
Agent or such Affiliate to have been authorized or given by or on behalf of the
applicant for a Letter of Credit, may honor any presentation if the documents
presented appear on their face substantially to comply with the terms and
conditions of the relevant Letter of Credit; (iii) may honor a previously
dishonored presentation under a Letter of Credit, whether such dishonor was
pursuant to a court order, to settle or compromise any claim of wrongful
dishonor, or otherwise, and shall be entitled to reimbursement to the same
extent as if such presentation had initially been honored, together with any
interest paid by Agent or its Affiliates; (iv) may honor any drawing that is
payable upon presentation of a statement advising negotiation or payment, upon
receipt of such statement (even if such statement indicates that a draft or
other document is being delivered separately), and shall not be liable for any
failure of any such draft or other document to arrive, or to conform in any way
with the relevant Letter of Credit; (v) may pay any paying or negotiating bank
claiming that it rightfully honored under the laws or practices of the place
where such bank is located; and (vi) may settle or adjust any claim or demand
made on Agent or its Affiliate in any way related to any order issued at the
applicant's request to an air carrier, a letter of guarantee or of indemnity
issued to a carrier or any similar document (each an "Order") and honor any
drawing in connection with any Letter of Credit that is the subject of such
Order, notwithstanding that any drafts or other documents presented in
connection with such Letter of Credit fail to conform in any way with such
Letter of Credit.
 
 
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In furtherance and extension and not in limitation of the specific provisions
set forth above, any action taken or omitted by Agent under or in connection
with the Letters of Credit issued by it or any documents and certificates
delivered thereunder, if taken or omitted in good faith and without gross
negligence (as determined by a court of competent jurisdiction in a final
non-appealable judgment), shall not put Agent under any resulting liability to
any Loan Party or any Lender.
 
2.18.   Additional Payments.
 
Any sums expended by Agent or any Lender due to any Loan Party's failure to
perform or comply with its obligations under this Agreement or any Other
Document including any Loan Party's obligations under Sections 4.2, 4.4, 4.12,
4.13, 4.14 and 6.1 hereof, may be charged to Borrower's Account as a Revolving
Advance and added to the Obligations.
 
2.19.   Manner of Borrowing and Payment.
 
(a) Each borrowing of Revolving Advances shall be advanced according to the
applicable Commitment Percentages of Lenders.
 
(b) Each payment (including each prepayment) by the Borrower on account of the
principal of and interest on the Revolving Advances, shall be applied to the
Revolving Advances pro rata according to the applicable Commitment Percentages
of Lenders. Except as expressly provided herein, all payments (including
prepayments) to be made by the Borrower on account of principal, interest and
fees shall be made without set off or counterclaim and shall be made to Agent on
behalf of Lenders to the Payment Office, in each case on or prior to 1:00 P.M.
in Dollars and in immediately available funds.
 
(c) (i) Notwithstanding anything to the contrary contained in Sections 2.19(a)
and (b) hereof, commencing with the first Business Day following the Closing
Date, each borrowing of Revolving Advances shall be advanced by Agent and each
payment by the Borrower on account of Revolving Advances shall be applied first
to those Revolving Advances advanced by Agent. On or before 1:00 P.M. on each
Settlement Date commencing with the first Settlement Date following the Closing
Date, Agent and Lenders shall make certain payments as follows: (I) if the
aggregate amount of new Revolving Advances made by Agent during the preceding
Week (if any) exceeds the aggregate amount of repayments applied to outstanding
Revolving Advances during such preceding Week, then each Lender shall provide
Agent with funds in an amount equal to its applicable Commitment Percentage of
the difference between (w) such Revolving Advances and (x) such repayments and
(II) if the aggregate amount of repayments applied to outstanding Revolving
Advances during such Week exceeds the aggregate amount of new Revolving Advances
made during such Week, then Agent shall provide each Lender with funds in an
amount equal to its applicable Commitment Percentage of the difference between
(y) such repayments and (z) such Revolving Advances.
 
 
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(ii) Each Lender shall be entitled to earn interest at the applicable Revolving
Interest Rate on outstanding Advances which it has funded.
 
(iii) Promptly following each Settlement Date, Agent shall submit to each Lender
a certificate with respect to payments received and Advances made during the
Week immediately preceding such Settlement Date. Such certificate of Agent shall
be conclusive in the absence of manifest error.
 
(d) If any Lender or Participant (a "Benefited Lender") shall at any time
receive any payment of all or part of its Advances, or interest thereon, or
receive any Collateral in respect thereof (whether voluntarily or involuntarily
or by set-off) in a greater proportion than any such payment to and Collateral
received by any other Lender, if any, in respect of such other Lender's
Advances, or interest thereon, and such greater proportionate payment or receipt
of Collateral is not expressly permitted hereunder, such benefited Lender shall
purchase for cash from the other Lenders a participation in such portion of each
such other Lender's Advances, or shall provide such other Lender with the
benefits of any such Collateral, or the proceeds thereof, as shall be necessary
to cause such benefited Lender to share the excess payment or benefits of such
Collateral or proceeds ratably with each of the other Lenders; provided,
however, that if all or any portion of such excess payment or benefits is
thereafter recovered from such benefited Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest. Each Lender so purchasing a portion of another
Lender's Advances may exercise all rights of payment (including rights of
set-off) with respect to such portion as fully as if such Lender were the direct
holder of such portion.
 
(e) Unless Agent shall have been notified by telephone, confirmed in writing, by
any Lender that such Lender will not make the amount which would constitute its
applicable Commitment Percentage of the Advances available to Agent, Agent may
(but shall not be obligated to) assume that such Lender shall make such amount
available to Agent on the next Settlement Date and, in reliance upon such
assumption, make available to Borrower a corresponding amount. Agent will
promptly notify Borrower of its receipt of any such notice from a Lender. If
such amount is made available to Agent on a date after such next Settlement
Date, such Lender shall pay to Agent on demand an amount equal to the product of
(i) the daily average Federal Funds Rate (computed on the basis of a year of 360
days) during such period as quoted by Agent, times (ii) such amount, times (iii)
the number of days from and including such Settlement Date to the date on which
such amount becomes immediately available to Agent. A certificate of Agent
submitted to any Lender with respect to any amounts owing under this paragraph
(e) shall be conclusive, in the absence of manifest error. If such amount is not
in fact made available to Agent by such Lender within three (3) Business Days
after such Settlement Date, Agent shall be entitled to recover such an amount,
with interest thereon at the rate per annum then applicable to such Revolving
Advances hereunder, on demand from Borrower; provided, however, that Agent's
right to such recovery shall not prejudice or otherwise adversely affect
Borrower's rights (if any) against such Lender.
 
 
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2.20.   Use of Proceeds.
 
(a) Borrower shall apply the proceeds of Advances to (i) pay fees and expenses
relating to this transaction, (ii) provide for its working capital needs and
reimburse drawings under Letters of Credit and (iii) provide for all other
general corporate purposes.
 
(b) Without limiting the generality of Section 2.20(a) above, neither Borrower,
the Guarantors nor any other Person which may in the future become party to this
Agreement or the Other Documents as a Borrower or Guarantor, intends to use nor
shall they use any portion of the proceeds of the Advances, directly or
indirectly, for any purpose in violation of the Trading with the Enemy Act.
 
2.21.      Defaulting Lender.
 
(a) Notwithstanding anything to the contrary contained herein, in the event any
Lender (x) has refused (which refusal constitutes a breach by such Lender of its
obligations under this Agreement) to make available its portion of any Advance
or (y) notifies either Agent or Borrower that it does not intend to make
available its portion of any Advance (if the actual refusal would constitute a
breach by such Lender of its obligations under this Agreement) (each, a "Lender
Default"), all rights and obligations hereunder of such Lender (a "Defaulting
Lender") as to which a Lender Default is in effect and of the other parties
hereto shall be modified to the extent of the express provisions of this Section
2.21 while such Lender Default remains in effect.
 
(b) Advances shall be incurred pro rata from Lenders (the "Non-Defaulting
Lenders") which are not Defaulting Lenders based on their respective Commitment
Percentages, and no Commitment Percentage of any Lender or any pro rata share of
any Advances required to be advanced by any Lender shall be increased as a
result of such Lender Default. Amounts received in respect of principal of any
type of Advances shall be applied to reduce the applicable Advances of each
Lender (other than any Defaulting Lender) pro rata based on the aggregate of the
outstanding Advances of that type of all Lenders at the time of such
application; provided, that, Agent shall not be obligated to transfer to a
Defaulting Lender any payments received by Agent for the Defaulting Lender's
benefit, nor shall a Defaulting Lender be entitled to the sharing of any
payments hereunder (including any principal, interest or fees). Amounts payable
to a Defaulting Lender shall instead be paid to or retained by Agent. Agent may
hold and, in its discretion, re-lend to a Borrower the amount of such payments
received or retained by it for the account of such Defaulting Lender.
 
(c) A Defaulting Lender shall not be entitled to give instructions to Agent or
to approve, disapprove, consent to or vote on any matters relating to this
Agreement and the Other Documents. All amendments, waivers and other
modifications of this Agreement and the Other Documents may be made without
regard to a Defaulting Lender and, for purposes of the definition of "Required
Lenders", a Defaulting Lender shall be deemed not to be a Lender and not to have
either Advances outstanding or a Commitment Percentage.
 
(d) Other than as expressly set forth in this Section 2.21, the rights and
obligations of a Defaulting Lender (including the obligation to indemnify Agent)
and the other parties hereto shall remain unchanged. Nothing in this Section
2.21 shall be deemed to release any Defaulting Lender from its obligations under
this Agreement and the Other Documents, shall alter such obligations, shall
operate as a waiver of any default by such Defaulting Lender hereunder, or shall
prejudice any rights which the Borrower, Agent or any Lender may have against
any Defaulting Lender as a result of any default by such Defaulting Lender
hereunder.
 
 
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(e) In the event a Defaulting Lender retroactively cures to the satisfaction of
Agent the breach which caused a Lender to become a Defaulting Lender, such
Defaulting Lender shall no longer be a Defaulting Lender and shall be treated as
a Lender under this Agreement.
 
III.        INTEREST AND FEES.
 
3.1.         Interest.
 
(a) Interest on Advances shall be payable in arrears on the first day of each
month with respect to Domestic Rate Loans and, with respect to Eurodollar Rate
Loans, at the end of each Interest Period. Interest charges shall be computed on
the actual principal amount of Advances outstanding during the month at a rate
per annum equal to the applicable Revolving Interest Rate. From the Closing Date
through the day immediately preceding the first (1st) Adjustment Date, (x)
Domestic Rate Loans shall bear interest for each day at a rate per annum equal
to the Alternate Base Rate plus one percent (1.00%), and (y) Eurodollar Rate
Loans shall bear interest for each applicable Interest Period at a rate per
annum equal to the Eurodollar Rate plus two and one half of one percent (2.50%).
 
(b) Subject to the terms and conditions of this Agreement, during each fiscal
quarter of the Borrower, in accordance with Section 9.8 hereof, the Borrower
shall submit to Agent a Compliance Certificate calculating Average Undrawn
Availability. Upon receipt by Agent of a Compliance Certificate as of September
30, 2011, and as of the last day of each fiscal quarter thereafter, Average
Undrawn Availability shall be calculated. Any increase or decrease in the
Applicable Base Rate Margin, the Applicable Eurodollar Rate Margin, the
Applicable Letter of Credit Fee Percentage or the Applicable Facility Fee Rate
computed as of a fiscal quarter end shall be effective on the date on which the
Compliance Certificate calculating Average Undrawn Availability is due to be
delivered under Section 9.8 hereof (each, an "Adjustment Date"). From each
Adjustment Date until the next Adjustment Date, (x) Domestic Rate Loans shall
bear interest for each day at a rate per annum equal to the Alternate Base Rate
plus the applicable margin determined by reference to Borrower’s Average Undrawn
Availability (the "Applicable Base Rate Margin") set forth below and (y)
Eurodollar Rate Loans shall bear interest during each applicable Interest Period
at a rate per annum equal to the Eurodollar Rate plus the applicable margin
determined by reference to Borrower’s Average Undrawn Availability (the
"Applicable Eurodollar Rate Margin") set forth below:
 
TIER
AVERAGE
UNDRAWN
AVAILABILITY
APPLICABLE
BASE RATE
MARGIN
APPLICABLE
EURODOLLAR
RATE
MARGIN
APPLICABLE
LETTER OF
CREDIT FEE
PERCENTAGE
APPLICABLE
FACILITY FEE
RATE
I
≤$10,000,000.00
1.00%
2.50%
2.50%
0.25%

II
>$10,000,000.00
≤$25,000,000.00
0.75%
2.25%
2.25%
0.25%
III
>$25,000,000.00
≤$40,000,000.00
0.50%
2.00%
2.00%
0.375%
IV
>$40,000,000.00
0.25%
1.75%
1.75%
0.375%

 
 
 
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(c) Subject to the terms and conditions of this Agreement, in the event that the
Borrower fails to timely deliver any Compliance Certificate calculating Average
Undrawn Availability in accordance with Section 9.8 hereof, the Applicable Base
Rate Margin, the Applicable Eurodollar Rate Margin, the Applicable Letter of
Credit Fee Percentage and the Applicable Facility Fee Rate shall be the amount
corresponding to Tier I until the delivery of such Compliance Certificate
calculating Average Undrawn Availability.
 
(d) Whenever, subsequent to the date of this Agreement, the Alternate Base Rate
is increased or decreased, the Revolving Interest Rate for Domestic Rate Loans
shall be similarly changed without notice or demand of any kind by an amount
equal to the amount of such change in the Alternate Base Rate during the time
such change or changes remain in effect. The Eurodollar Rate shall be adjusted
with respect to Eurodollar Rate Loans without notice or demand of any kind on
the effective date of any change in the Reserve Percentage as of such effective
date. Upon and after the occurrence of an Event of Default, and during the
continuation thereof, at the option of Agent or at the direction of Required
Lenders, the Obligations shall bear interest at the applicable Revolving
Interest Rate (with an Applicable Base Rate Margin or Applicable Eurodollar Rate
Margin corresponding to Tier I in the pricing grid set forth in Section 3.1(b)
hereof) plus two percent (2.0%) per annum (the "Default Rate").
 
3.2.          Letter of Credit Fees.
 
Borrower shall pay (x) to Agent, for the ratable benefit of Lenders, fees for
each Letter of Credit for the period from and excluding the date of issuance of
same to and including the date of expiration or termination, equal to the
average daily face amount of each outstanding Letter of Credit multiplied by (i)
from the Closing Date until the first (1st) Adjustment Date, two and one half of
one percent (2.50%) per annum and (ii) on and after the first (1st) Adjustment
Date, the applicable percentage per annum determined by reference to Average
Undrawn Availability as set forth in Section 3.1(b) hereof (the "Applicable
Letter of Credit Fee Percentage"), such fees to be calculated on the basis of a
360-day year for the actual number of days elapsed and to be payable quarterly
in arrears on the first day of each quarter and on the last day of the Term, and
(y) to the Issuer, a fronting fee of one quarter of one percent (0.25%) per
annum, together with any and all administrative, issuance, amendment, payment
and negotiation charges with respect to Letters of Credit and all fees and
expenses as agreed upon by Issuer and Borrower in connection with any Letter of
Credit, including in connection with the opening, amendment or renewal of any
such Letter of Credit and any acceptances created thereunder and shall reimburse
Agent for any and all fees and expenses, if any, paid by Agent to the Issuer
(all of the foregoing fees, the "Letter of Credit Fees"). All such charges shall
be deemed earned in full on the date when the same are due and payable hereunder
and shall not be subject to rebate or pro-ration upon the termination of this
Agreement for any reason. Any such charge in effectat the time of a particular
transaction shall be the charge for that transaction, notwithstanding any
subsequent change in the Issuer's prevailing charges for that type of
transaction. All Letter of Credit Fees payable hereunder shall be deemed earned
in full on the date when the same are due and payable hereunder and shall not be
subject to rebate or pro-ration upon the termination of this Agreement for any
reason. Upon and after the occurrence of an Event of Default, and during the
continuation thereof, at the option of Agent or at the direction of Required
Lenders, the Letter of Credit Fees described in clause (x) of this Section 3.2
(with an Applicable Letter of Credit Fee Percentage corresponding to Tier I in
the pricing grid set forth in Section 3.1(b) hereof) shall be increased by an
additional two percent (2.0%) per annum.
 
 
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On demand upon the occurrence and during the continuance of an Event of Default,
Borrower will cause cash to be deposited and maintained in an account with
Agent, as cash collateral, in an amount equal to one hundred five percent (105%)
of the Maximum Undrawn Amount of all outstanding Letters of Credit, and the
Borrower hereby irrevocably authorizes Agent, in its discretion, on the
Borrower's behalf and in the Borrower's name, to open such an account and to
make and maintain deposits therein, or in an account opened by the Borrower, in
the amounts required to be made by the Borrower, out of the proceeds of
Receivables or other Collateral or out of any other funds of the Borrower coming
into any Lender's possession at any time. Agent will invest such cash collateral
(less applicable reserves) in such short-term money-market items as to which
Agent and the Borrower mutually agree and the net return on such investments
shall be credited to such account and constitute additional cash collateral. The
Borrower may not withdraw amounts credited to any such account except upon the
occurrence of all of the following: (x) payment and performance in full of all
Obligations, (y) expiration of all Letters of Credit and (z) termination of this
Agreement.
 
3.3.   Facility Fee.
 
If, for any calendar quarter during the Term, the average daily unpaid balance
of the Revolving Advances and undrawn amount of any outstanding Letters of
Credit for each day of such calendar quarter does not equal the Maximum
Revolving Advance Amount, then Borrower shall pay to Agent for the ratable
benefit of Lenders a fee at a rate equal to (i) from the Closing Date until the
first (1st) Adjustment Date, one quarter of one percent (0.25%) per annum and
(ii) on and after the first (1st) Adjustment Date, the applicable percentage per
annum determined by reference to Average Undrawn Availability as set forth in
Section 3.1(b) hereof (the "Applicable Facility Fee Rate"), on the amount by
which the Maximum Revolving Advance Amount exceeds such average daily unpaid
balance. Such fee shall be payable to Agent in arrears on the first day of each
calendar quarter with respect to the previous calendar quarter.
 
3.4.   Fee Letter.
 
Borrower shall pay the amounts required to be paid in the Fee Letter in the
manner and at the times required by the Fee Letter.
 
 
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3.5.   Computation of Interest and Fees.
 
Interest and fees hereunder shall be computed on the basis of a year of 360 days
and for the actual number of days elapsed. If any payment to be made hereunder
becomes due and payable on a day other than a Business Day, the due date thereof
shall be extended to the next succeeding Business Day and interest thereon shall
be payable at the Revolving Interest Rate for Domestic Rate Loans during such
extension.
 
 3.6.    Maximum Charges.
 
In no event whatsoever shall interest and other charges charged hereunder exceed
the highest rate permissible under law. In the event interest and other charges
as computed hereunder would otherwise exceed the highest rate permitted under
law, such excess amount shall be first applied to any unpaid principal balance
owed by Borrower, and if the then remaining excess amount is greater than the
previously unpaid principal balance, Lenders shall promptly refund such excess
amount to Borrower and the provisions hereof shall be deemed amended to provide
for such permissible rate.
 
3.7.    Increased Costs.
 
In the event that any Applicable Law, or any change therein or in the
interpretation or application thereof, or compliance by any Lender (for purposes
of this Section 3.7, the term "Lender" shall include Agent or any Lender and any
corporation or bank controlling Agent or any Lender) and the office or branch
where Agent or any Lender (as so defined) makes or maintains any Eurodollar Rate
Loans with any request or directive (whether or not having the force of law)
from any central bank or other financial, monetary or other authority, shall:
 
(a) subject Agent or any Lender to any tax of any kind whatsoever with respect
to this Agreement or any Other Document or change the basis of taxation of
payments to Agent or any Lender of principal, fees, interest or any other amount
payable hereunder or under any Other Documents (except for changes in the rate
of tax on the overall net income of Agent or any Lender by the jurisdiction in
which it maintains its principal office);
 
(b) impose, modify or hold applicable any reserve, special deposit, assessment
or similar requirement against assets held by, or deposits in or for the account
of, advances or loans by, or other credit extended by, any office of Agent or
any Lender, including pursuant to Regulation D of the Board of Governors of the
Federal Reserve System; or
 
(c) impose on Agent or any Lender or the London interbank Eurodollar market any
other condition with respect to this Agreement or any Other Document;
 
and the result of any of the foregoing is to increase the cost to Agent or any
Lender of making, renewing or maintaining its Advances hereunder by an amount
that Agent or such Lender deems to be material or to reduce the amount of any
payment (whether of principal, interest or otherwise) in respect of any of the
Advances by an amount that Agent or such Lender deems to be material, then, in
any case Borrower shall promptly pay Agent or such Lender, upon its demand, such
additional amount as will compensate Agent or such Lender for such additional
cost or such reduction, as the case may be, provided that the foregoing shall
not apply to increased costs which are reflected in the Eurodollar Rate, as the
case may be. It is understood and agreed that the Dodd-Frank Wall Street Reform
and Consumer Protection Act (Pub. L. 111-203, H.R. 4173), all Laws relating
thereto, all interpretations and applications thereof and any compliance by the
Agent or any Lender with any request or directive relating thereto shall, for
the purposes of this Agreement, be deemed to be adopted subsequent to the date
hereof. Agent or such Lender shall certify the amount of such additional cost or
reduced amount to Borrower, and such certification shall be conclusive absent
manifest error.
 
 
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3.8.   Basis For Determining Interest Rate Inadequate or Unfair.
 
In the event that Agent or any Lender shall have determined that:
 
(a) reasonable means do not exist for ascertaining the Eurodollar Rate for any
Interest Period; or
 
(b) Dollar deposits in the relevant amount and for the relevant maturity are not
available in the London interbank Eurodollar market, with respect to an
outstanding Eurodollar Rate Loan, a proposed Eurodollar Rate Loan, or a proposed
conversion of a Domestic Rate Loan into a Eurodollar Rate Loan,
 
then Agent shall give Borrower prompt written or telephonic of such
determination. If such notice is given, (i) any such requested Eurodollar Rate
Loan shall be made as a Domestic Rate Loan, unless Borrower shall notify Agent
no later than 10:00 a.m. two (2) Business Days prior to the date of such
proposed borrowing, that its request for such borrowing shall be cancelled or
made as an unaffected type of Eurodollar Rate Loan, (ii) any Domestic Rate Loan
or Eurodollar Rate Loan which was to have been converted to an affected type of
Eurodollar Rate Loan shall be continued as or converted into a Domestic Rate
Loan, or, if Borrower shall notify Agent, no later than 10:00 a.m. two (2)
Business Days prior to the proposed conversion, shall be maintained as an
unaffected type of Eurodollar Rate Loan, and (iii) any outstanding affected
Eurodollar Rate Loans shall be converted into a Domestic Rate Loan, or, if
Borrower shall notify Agent, no later than 10:00 a.m. two (2) Business Days
prior to the last Business Day of the then current Interest Period applicable to
such affected Eurodollar Rate Loan, shall be converted into an unaffected type
of Eurodollar Rate Loan, on the last Business Day of the then current Interest
Period for such affected Eurodollar Rate Loans. Until such notice has been
withdrawn, Lenders shall have no obligation to make an affected type of
Eurodollar Rate Loan or maintain outstanding affected Eurodollar Rate Loans and
the Borrower shall not have the right to convert a Domestic Rate Loan or an
unaffected type of Eurodollar Rate Loan into an affected type of Eurodollar Rate
Loan.
 
 
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3.9.   Capital Adequacy.
 
(a) In the event that Agent or any Lender shall have determined that any
Applicable Law or guideline regarding capital adequacy, or any change therein,
or any change in the interpretation or administration thereof by any
Governmental Body, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by Agent or any Lender
(for purposes of this Section 3.9, the term "Lender" shall include Agent or any
Lender and any corporation or bank controlling Agent or any Lender) and the
office or branch where Agent or any Lender (as so defined) makes or maintains
any Eurodollar Rate Loans with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on Agent or any Lender's capital as a consequence of its obligations
hereunder to a level below that which Agent or such Lender could have achieved
but for such adoption, change or compliance (taking into consideration Agent's
and each Lender's policies with respect to capital adequacy) by an amount deemed
by Agent or any Lender to be material, then, from time to time, Borrower shall
pay upon demand to Agent or such Lender such additional amount or amounts as
will compensate Agent or such Lender for such reduction; provided, however, it
is understood and agreed that the Dodd-Frank Wall Street Reform and Consumer
Protection Act (Pub. L. 111-203, H.R. 4173), all Laws relating thereto, all
interpretations and applications thereof and any compliance by the Agent or any
Lender with any request or directive relating thereto shall, for the purposes of
this Agreement, be deemed to be adopted subsequent to the date hereof. In
determining such amount or amounts, Agent or such Lender may use any reasonable
averaging or attribution methods. The protection of this Section 3.9 shall be
available to Agent and each Lender regardless of any possible contention of
invalidity or inapplicability with respect to the Applicable Law or condition.
 
(b) A certificate of Agent or such Lender setting forth such amount or amounts
as shall be necessary to compensate Agent or such Lender with respect to Section
3.9(a) hereof when delivered to Borrower shall be conclusive absent manifest
error.
 
3.10.   Gross Up for Taxes.
 
If the Borrower shall be required by Applicable Law to withhold or deduct any
taxes from or in respect of any sum payable under this Agreement or any of the
Other Documents to Agent, or any Lender, assignee of any Lender, or Participant
(each, individually, a "Payee" and collectively, the "Payees"), (a) the sum
payable to such Payee or Payees, as the case may be, shall be increased as may
be necessary so that, after making all required withholding or deductions, the
applicable Payee or Payees receives an amount equal to the sum it would have
received had no such withholding or deductions been made (the "Gross-Up
Payment"), (b) the Borrower shall make such withholding or deductions, and (c)
the Borrower shall pay the full amount withheld or deducted to the relevant
taxation authority or other authority in accordance with Applicable Law.
Notwithstanding the foregoing, the Borrower shall not be obligated to make any
portion of the Gross-Up Payment that is attributable to any withholding or
deductions that would not have been paid or claimed had the applicable Payee or
Payees properly claimed a complete exemption with respect thereto pursuant to
Section 3.11 hereof.
 
3.11.     Withholding Tax Exemption.
 
(a) Each Payee that is not incorporated under the Laws of the United States of
America or a state thereof (and, upon the written request of Agent, each other
Payee) agrees that it will deliver to Borrower and Agent two (2) duly completed
appropriate valid Withholding Certificates (as defined under § 1.1441-1 (c)(1 6)
of the Income Tax Regulations ("Regulations")) certifying its status (i.e., U.S.
or foreign person) and, if appropriate, making a claim of reduced, or exemption
from, U.S. withholding tax on the basis of an income tax treaty or an exemption
provided by the Code. The term "Withholding Certificate" means a Form W-9; a
Form W - 8BEN; a Form W-8ECI; a Form W-8IMY and the related statements and
certifications as required under § 1.1441-1 (e)(2) and/or (3) of the
Regulations; a statement described in § 1.871 - 14(c)(2)(v) of the Regulations;
or any other certificates under the Code or Regulations that certify or
establish the status of a payee or beneficial owner as a U.S. or foreign person.
 
 
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(b) Each Payee required to deliver to Borrower and Agent a valid Withholding
Certificate pursuant to Section 3.11(a) hereof shall deliver such valid
Withholding Certificate as follows: (A) each Payee which is a party hereto on
the Closing Date shall deliver such valid Withholding Certificate at least five
(5) Business Days prior to the first date on which any interest or fees are
payable by the Borrower hereunder for the account of such Payee; (B) each Payee
shall deliver such valid Withholding Certificate at least five (5) Business Days
before the effective date of such assignment or participation (unless Agent in
its sole discretion shall permit such Payee to deliver such Withholding
Certificate less than five (5) Business Days before such date in which case it
shall be due on the date specified by Agent). Each Payee which so delivers a
valid Withholding Certificate further undertakes to deliver to Borrower and
Agent two (2) additional copies of such Withholding Certificate (or a successor
form) on or before the date that such Withholding Certificate expires or becomes
obsolete or after the occurrence of any event requiring a change in the most
recent Withholding Certificate so delivered by it, and such amendments thereto
or extensions or renewals thereof as may be reasonably requested by Borrower or
Agent.
 
(c) Notwithstanding the submission of a Withholding Certificate claiming a
reduced rate of or exemption from U.S. withholding tax required under Section
3.11(b) hereof, Agent shall be entitled to withhold United States federal income
taxes at the full thirty percent (30%) withholding rate if in its reasonable
judgment it is required to do so under the due diligence requirements imposed
upon a withholding agent under §1.1441-7(b) of the Regulations. Further, Agent
is indemnified under § 1.1461-1(e) of the Regulations against any claims and
demands of any Payee for the amount of any tax it deducts and withholds in
accordance with regulations under § 1441 of the Code.
 
IV.       COLLATERAL: GENERAL TERMS.
 
       4.1.          Security Interest in the Collateral.
 
To secure the prompt payment and performance to Agent and each Lender of the
Obligations, the Borrower hereby assigns, pledges and grants to Agent for its
benefit and for the ratable benefit of each Lender a continuing security
interest in and to and Lien on all of its Collateral, whether now owned or
existing or hereafter acquired or arising and wheresoever located. The Borrower
shall mark its books and records as may be necessary or appropriate to evidence,
protect and perfect Agent's security interest and shall cause its financial
statements to reflect such security interest. The Borrower shall promptly
provide Agent with written notice of all commercial tort claims to the extent
that the damages sought for all commercial tort claims of the Borrower exceeds
One Million and 00/100 Dollars ($1,000,000.00) in the aggregate, such notice to
contain the case title together with the applicable court and a brief
description of the claim(s). Upon delivery of each such notice, the Borrower
shall be deemed to hereby grant to Agent a security interest and lien in and to
such commercial tort claims and all proceeds thereof.
 
 
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4.2.       Perfection of Security Interest.
 
The Borrower shall take all action that may be necessary or desirable, or that
Agent may request, so as at all times to maintain the validity, perfection,
enforceability and priority of Agent's security interest in and Lien on the
Collateral or to enable Agent to protect, exercise or enforce its rights
hereunder and in the Collateral, including (i) immediately discharging all Liens
other than Permitted Encumbrances, (ii) obtaining Lien Waiver Agreements, (iii)
delivering to Agent, endorsed or accompanied by such instruments of assignment
as Agent may specify, and stamping or marking, in such manner as Agent may
specify, any and all chattel paper, instruments, letters of credits and advices
thereof and documents evidencing or forming a part of the Collateral, (iv)
entering into warehousing, lockbox and other custodial arrangements satisfactory
to Agent, and (v) executing and delivering financing statements, control
agreements, instruments of pledge, mortgages, notices and assignments, in each
case in form and substance satisfactory to Agent, relating to the creation,
validity, perfection, maintenance or continuation of Agent's security interest
and Lien under the Uniform Commercial Code or other Applicable Law. By its
signature hereto, the Borrower hereby authorizes Agent to file against the
Borrower, one or more financing, continuation or amendment statements pursuant
to the Uniform Commercial Code in form and substance satisfactory to Agent
(which statements may have a description of collateral which is broader than
that set forth herein). All charges, expenses and fees Agent may incur in doing
any of the foregoing, and any local taxes relating thereto, shall be charged to
Borrower's Account as a Revolving Advance of a Domestic Rate Loan and added to
the Obligations, or, at Agent's option, shall be paid to Agent for its benefit
and for the ratable benefit of Lenders promptly upon written demand but in any
event no later than ten (10) days after such demand.
 
4.3.       Disposition of Collateral.
 
The Borrower will safeguard and protect all Collateral for Agent's general
account and make no disposition thereof whether by sale, lease or otherwise
except as otherwise permitted under this Agreement.
 
4.4.       Preservation of Collateral.
 
In addition to the rights and remedies set forth in Section 11.1 hereof, upon
the occurrence and during the continuance of an Event of Default, Agent: (a) may
at any time take such steps as Agent deems necessary to protect Agent's interest
in and to preserve the Collateral, including the hiring of such security guards
or the placing of other security protection measures as Agent may deem
appropriate; (b) may employ and maintain at any of the Borrower's premises a
custodian who shall have full authority to do all acts necessary to protect
Agent's interests in the Collateral; (c) may lease warehouse facilities to which
Agent may move all or part of the Collateral; (d) may use the Borrower's owned
or leased lifts, hoists, trucks and other facilities or equipment for handling
or removing the Collateral; and (e) shall have, and is hereby granted, a right
of ingress and egress to the places where the Collateral is located, and may
proceed over and through any of the Borrower's owned or leased property. The
Borrower shall cooperate fully with all of Agent's efforts to preserve the
Collateral and will take such actions to preserve the Collateral as Agent may
direct. All of Agent's expenses of preserving the Collateral, including any
expenses relating to the bonding of a custodian, shall be charged to Borrower's
Account as a Revolving Advance maintained as a Domestic Rate Loan and added to
the Obligations.
 
 
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4.5.          Ownership of Collateral.
 
(a) With respect to the Collateral, at the time the Collateral becomes subject
to Agent's security interest: (i) the Borrower shall be the sole owner of and
fully authorized and able to sell, transfer, pledge and/or grant a first
priority security interest in each and every item of the its respective
Collateral to Agent; and, except for Permitted Encumbrances the Collateral shall
be free and clear of all Liens and encumbrances whatsoever; (ii) each document
and agreement executed by the Borrower or delivered to Agent or any Lender in
connection with this Agreement shall be true and correct in all respects; (iii)
all signatures and endorsements of the Borrower that appear on such documents
and agreements shall be genuine and the Borrower shall have full capacity to
execute same; and (iv) the Borrower's Equipment and Inventory shall be located
as set forth on Schedule 4.5 and shall not be removed from such location(s)
without the prior written consent of Agent except with respect to the sale of
Inventory in the Ordinary Course of Business and except as otherwise permitted
under this Agreement.
 
(b) (i) There is no location at which the Borrower has any Inventory (except for
Inventory in transit) other than those locations listed on Schedule 4.5; (ii)
Schedule 4.5 hereto contains a correct and complete list, as of the Closing
Date, of the legal names and addresses of each warehouse at which Inventory of
the Borrower is stored; none of the receipts received by the Borrower from any
warehouse states that the goods covered thereby are to be delivered to bearer or
to the order of a named Person or to a named Person and such named Person's
assigns; (iii) Schedule 4.5 hereto sets forth a correct and complete list as of
the Closing Date of (A) each place of business of the Borrower and (B) the chief
executive office of the Borrower; and (iv) Schedule 4.5 hereto sets forth a
correct and complete list as of the Closing Date of the location, by state and
street address, of all Real Property owned or leased by the Borrower, together
with the names and addresses of any landlords.
 
4.6.          Defense of Agent's and Lenders' Interests.
 
Until (a) payment and performance in full of all of the Obligations and (b)
termination of this Agreement, Agent's interests in the Collateral shall
continue in full force and effect. During such period the Borrower shall not,
without Agent's prior written consent, pledge, sell (except as otherwise
permitted under this Agreement), assign, transfer, create or suffer to exist a
Lien upon or encumber or allow or suffer to be encumbered in any way except for
Permitted Encumbrances, any part of the Collateral. The Borrower shall defend
Agent's interests in the Collateral against any and all Persons whatsoever. At
any time following demand by Agent for payment of all Obligations upon the
occurrence and during the continuance of an Event of Default, Agent shall have
the right to take possession of the indicia of the Collateral and the Collateral
in whatever physical form contained, including: labels, stationery, documents,
instruments and advertising materials. If Agent exercises this right to take
possession of the Collateral, the Borrower shall, upon demand, assemble it in
the best manner possible and make it available to Agent at a place reasonably
convenient to Agent. In addition, with respect to all Collateral, Agent and
Lenders shall be entitled to all of the rights and remedies set forth herein and
further provided by the Uniform Commercial Code or other Applicable Law. The
Borrower shall, and Agent may, at its option, instruct all suppliers, carriers,
forwarders, warehousers or others receiving or holding cash, checks, Inventory,
documents or instruments in which Agent holds a security interest to deliver
same to Agent and/or subject to Agent's order and if they shall come into the
Borrower's possession, they, and each of them, shall be held by the Borrower in
trust as Agent's trustee, and the Borrower will immediately deliver them to
Agent in their original form together with any necessary endorsement.
 
 
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4.7.          Books and Records.
 
The Borrower shall (a) keep proper books of record and account in which full,
true and correct entries will be made of all dealings or transactions of or in
relation to its business and affairs; (b) set up on its books accruals with
respect to all taxes, assessments, charges, levies and claims; and (c) on a
reasonably current basis set up on its books, from its earnings, allowances
against doubtful Receivables, advances and investments and all other proper
accruals (including by reason of enumeration, accruals for premiums, if any, due
on required payments and accruals for depreciation, obsolescence, or
amortization of properties), which should be set aside from such earnings in
connection with its business. All determinations pursuant to this subsection
shall be made in accordance with, or as required by, GAAP consistently applied
in the opinion of such independent public accountant as shall then be regularly
engaged by the Borrower.
 
4.8.          Intentionally Omitted.
 
4.9.          Compliance with Laws.
 
The Borrower shall comply with all Applicable Laws with respect to the
Collateral or any part thereof or to the operation of the Borrower's business
the non-compliance with which could reasonably be expected to have a Material
Adverse Effect. The assets of the Borrower at all times shall be maintained in
accordance with the requirements of all insurance carriers which provide
insurance with respect to the assets of the Borrower so that such insurance
shall remain in full force and effect.
 
    4.10.   Inspection of Premises; Appraisals.
 
At all reasonable times and upon prior notice to the Borrower if no Event of
Default has occurred and is continuing, Agent and each Lender (at such Lender's
sole expense) shall have full access to and the right to audit, check, inspect
and make abstracts and copies from the Borrower's books, records, audits,
correspondence and all other papers relating to the Collateral and the operation
of the Borrower's business. Agent, any Lender (at such Lender's sole expense)
and their agents may enter upon any premises of the Borrower at any time during
business hours and at any other reasonable time, and from time to time, for the
purpose of inspecting the Collateral and any and all records pertaining thereto
and the operation of the Borrower's business. Further, at such times as Agent
deems advisable or necessary, Agent shall cause to be conducted an appraisal of
the Inventory of the Borrower and/or a field examination of the Borrower;
provided that the Borrower shall be responsible for the expense of any such
appraisal and/or field examination no more than (i) one (1) time per year with
respect to the Borrower's Inventory, and (ii) one (1) time per year with respect
to field examinations, unless in any case an Event of Default has occurred and
is continuing, in which event no such frequency limitation shall apply and the
Borrower shall be responsible for any expenses associated with any and all
appraisals and field examinations conducted pursuant to this Section 4.10.
 
 
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4.11.    Insurance.
 
The assets and properties of the Borrower at all times shall be maintained in
accordance with the requirements of all insurance carriers which provide
insurance with respect to the assets and properties of the Borrower so that such
insurance shall remain in full force and effect. The Borrower shall bear the
full risk of any loss of any nature whatsoever with respect to the Collateral.
At the Borrower's own cost and expense in amounts and with carriers reasonably
acceptable to Agent, the Borrower shall (a) keep all its insurable properties
and properties in which the Borrower has an interest insured against the hazards
of fire, flood, sprinkler leakage, those hazards covered by extended coverage
insurance and such other hazards, and for such amounts, as is customary in the
case of companies engaged in businesses similar to the Borrower's including
business interruption insurance; (b) maintain a bond in such amounts as is
customary in the case of companies engaged in businesses similar to the Borrower
insuring against larceny, embezzlement or other criminal misappropriation of
insured's officers and employees who may either singly or jointly with others at
any time have access to the assets or funds of the Borrower either directly or
through authority to draw upon such funds or to direct generally the disposition
of such assets; (c) maintain public and product liability insurance against
claims for personal injury, death or property damage suffered by others; (d)
maintain all such worker's compensation or similar insurance as may be required
under the laws of any state or jurisdiction in which the Borrower is engaged in
business; and (e) furnish Agent with (i) evidence of the maintenance of such
policies by the renewal thereof before any expiration date, and (ii) appropriate
loss payable endorsements in form and substance satisfactory to Agent, naming
Agent as an additional named insured and lender loss payee as its interests may
appear with respect to all insurance coverage referred to in clauses (a) and (c)
above, and providing (A) that all proceeds thereunder shall be payable to Agent,
(B) no such insurance shall be affected by any act or neglect of the insured or
owner of the property described in such policy, and (C) that such policy and
loss payable clauses may not be cancelled, amended or terminated unless prior
written notice is given to Agent in accordance with the terms and provisions of
the applicable insurance policy(ies). The Borrower shall provide copies of all
such insurance policies (including the appropriate lender loss payee, mortgagee
and additional insured endorsements) within thirty (30) days after Agent's
reasonable request, however, only certificates of insurance shall be required on
the Closing Date. In the event of any loss thereunder, the carriers named
therein hereby are directed by Agent and the Borrower to make payment for such
loss to Agent and not to the Borrower and Agent jointly. If any insurance losses
are paid by check, draft or other instrument payable to the Borrower and Agent
jointly, Agent may endorse the Borrower's name thereon and do such other things
as Agent may deem advisable to reduce the same to cash. Agent is hereby
authorized during the existence of an Event of Default to adjust and compromise
claims under insurance coverage referred to in clauses (a) and (b) above. All
loss recoveries received by Agent upon any such insurance may be applied to the
Obligations, in such order as Agent in its sole discretion shall determine. Any
surplus shall be paid by Agent to the Borrower or applied as may be otherwise
required by law. Any deficiency thereon shall be paid by the Borrower to Agent,
on demand. Anything hereinabove to the contrary notwithstanding, and subject to
the fulfillment of the conditions set forth below, Agent shall remit to Borrower
insurance proceeds received by Agent during any calendar year under insurance
policies procured and maintained by the Borrower which insure the Borrower's
insurable properties to the extent (i) no Event of Default or Default shall have
occurred and be continuing and (ii) Undrawn Availability, both prior to and
after giving effect to any such payment, is equal to or greater than Twenty
Million and 00/100 Dollars ($20,000,000.00). In the event either (i) an Event of
Default or Default shall have occurred and be continuing or (ii) Undrawn
Availability, both prior to and after giving effect to any such payment, is less
than Twenty Million and 00/100 Dollars ($20,000,000.00), then Agent may, in its
sole discretion, either remit the insurance proceeds to Borrower upon Borrower
providing Agent with evidence reasonably satisfactory to Agent that the
insurance proceeds will be used by the Borrower to repair, replace or restore
the insured property which was the subject of the insurable loss, or apply the
proceeds to the Obligations, as aforesaid. The agreement of Agent to remit
insurance proceeds in the manner above provided shall be subject in each
instance to satisfaction of the condition that the Borrower shall use such
insurance proceeds to repair, replace or restore the insurable property which
was the subject of the insurable loss and for no other purpose.
 
 
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4.12.        Failure to Pay Insurance.
 
If the Borrower fails to obtain insurance as hereinabove provided, or to keep
the same in force, Agent, if Agent so elects, may obtain such insurance and pay
the premium therefor on behalf of the Borrower, and charge Borrower's Account
therefor as a Revolving Advance of a Domestic Rate Loan and such expenses so
paid shall be part of the Obligations.
 
4.13.         Payment of Taxes.
 
The Borrower will pay, when due, all taxes, assessments and other Charges
lawfully levied or assessed upon the Borrower or any of the Collateral including
real and personal property taxes, assessments and charges and all franchise,
income, employment, social security benefits, withholding, and sales taxes. If
any tax by any Governmental Body is or may be imposed on or as a result of any
transaction between the Borrower and Agent or any Lender which Agent or any
Lender may be required to withhold or pay or if any taxes, assessments, or other
Charges remain unpaid after the date fixed for their payment, or if any claim
shall be made which, in Agent's or any Lender's opinion, may possibly create a
valid Lien on the Collateral, Agent may without notice to the Borrower pay the
taxes, assessments or other Charges and the Borrower hereby indemnifies and
holds Agent and each Lender harmless in respect thereof. Agent will not pay any
taxes, assessments or Charges to the extent that the Borrower has Properly
Contested those taxes, assessments or Charges. The amount of any payment by
Agent under this Section 4.13 shall be charged to Borrower's Account as a
Revolving Advance maintained as a Domestic Rate Loan and added to the
Obligations and, until the Borrower shall furnish Agent with an indemnity
therefor (or supply Agent with evidence satisfactory to Agent that due provision
for the payment thereof has been made), Agent may hold without interest any
balance standing to the Borrower' credit and Agent shall retain its security
interest in and Lien on any and all Collateral held by Agent.
 
4.14.         Payment of Leasehold Obligations.
 
The Borrower shall at all times pay, when and as due, its rental obligations
under all leases under which it is a tenant, and shall otherwise comply, in all
material respects, with all other terms of such leases and keep them in full
force and effect and, at Agent's request will provide evidence of having done
so.
 
 
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4.15.    Receivables.
 
(a) Nature of Receivables. Each of the Receivables shall be a bona fide and
valid account representing a bona fide indebtedness incurred by the Customer
therein named, for a fixed sum as set forth in the invoice relating thereto
(provided immaterial or unintentional invoice errors shall not be deemed to be a
breach hereof) with respect to an absolute sale or lease and delivery of goods
upon stated terms of the Borrower, or work, labor or services theretofore
rendered by the Borrower as of the date each Receivable is created. Same shall
be due and owing in accordance with the Borrower's standard terms of sale
without dispute, setoff or counterclaim except as may be stated on the accounts
receivable schedules delivered by the Borrower to Agent.
 
(b) Solvency of Customers. Each Customer, to the actual knowledge of the
Borrower, as of the date each Receivable is created, is and will be solvent and
able to pay all Receivables on which the Customer is obligated in full when due
or with respect to such Customers of the Borrower who are not solvent the
Borrower has set up on its books and in its financial records bad debt reserves
adequate to cover such Receivables.
 
(c) Location of the Borrower. The Borrower's chief executive office is located
at the address specified on Schedule 4.5 with respect to the Borrower. Until
written notice is given to Agent by Borrower of any other office at which the
Borrower keeps its books and records, all such books and records shall be kept
at4955 Steubenville Pike, Suite 405, Pittsburgh, PA 15205.
 
(d) Collection of Receivables. Prior to a Cash Dominion Event, the Borrower
will, at the Borrower's sole cost and expense, collect all amounts due on
Receivables; provided, however, that to the extent the Borrower deposits such
amounts in an account, such account shall be an account with respect to which a
Blocked Account Agreement has been entered into but will not go into effect
until the occurrence of a Cash Dominion Event. Upon the occurrence of a Cash
Dominion Event and until, as applicable, no Event of Default shall have occurred
and be continuing or upon the occurrence of a Testing Event Cure, the Borrower
shall deliver to the Agent, or deposit in the Blocked Account, on Agent's behalf
and for Agent's account, in original form and on the date of receipt thereof,
all checks, drafts, notes, money orders, acceptances, cash and other evidences
of Indebtedness payable to the Borrower on Receivables, and shall not commingle
such collections with the Borrower's funds or use the same except to pay
Obligations.
 
(e) Notification of Assignment of Receivables. At any time upon the occurrence
and during the continuance of an Event of Default, Agent shall have the right to
send notice of the assignment of, and Agent's security interest in and Lien on,
the Receivables to any and all Customers or any third party holding or otherwise
concerned with any of the Collateral. Thereafter, Agent shall have the sole
right to collect the Receivables, take possession of the Collateral, or both.
Agent's actual collection expenses, including, but not limited to, stationery
and postage, telephone and telegraph, secretarial and clerical expenses and the
salaries of any collection personnel used for collection, may be charged to
Borrower's Account and added to the Obligations.
 
 
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(f) Power of Agent to Act on the Borrower's Behalf. At any time after the
occurrence and during the continuance of an Event of Default, Agent shall have
the right to receive, endorse, assign and/or deliver in the name of Agent or the
Borrower any and all checks, drafts and other instruments for the payment of
money relating to the Receivables, and the Borrower hereby waives notice of
presentment, protest and non-payment of any instrument so endorsed. The Borrower
hereby constitutes Agent or Agent's designee as the Borrower's attorney with
power, at any time after the occurrence and during the continuance of an Event
of Default, (i) to endorse the Borrower's name upon any notes, acceptances,
checks, drafts, money orders or other evidences of payment or Collateral; (ii)
to sign the Borrower's name on any invoice or bill of lading relating to any of
the Receivables, drafts against Customers, assignments and verifications of
Receivables; (iii) to send verifications of Receivables to any Customer; (iv) to
sign the Borrower's name on all financing statements or any other documents or
instruments deemed necessary or appropriate by Agent to preserve, protect, or
perfect Agent's interest in the Collateral and to file same; (v) to demand
payment of the Receivables; (vi) to enforce payment of the Receivables by legal
proceedings or otherwise; (vii) to exercise all of the Borrower's rights and
remedies with respect to the collection of the Receivables and any other
Collateral; (viii) to settle, adjust, compromise, extend or renew the
Receivables; (ix) to settle, adjust or compromise any legal proceedings brought
to collect Receivables; (x) to prepare, file and sign the Borrower's name on a
proof of claim in bankruptcy or similar document against any Customer; (xi) to
prepare, file and sign the Borrower's name on any notice of Lien, assignment or
satisfaction of Lien or similar document in connection with the Receivables; and
(xii) to do all other acts and things necessary to carry out this Agreement. All
acts of said attorney or designee are hereby ratified and approved, and said
attorney or designee shall not be liable for any acts of omission or commission
nor for any error of judgment or mistake of fact or of law, unless done
maliciously or with gross (not mere) negligence (as determined by a court of
competent jurisdiction in a final non-appealable judgment); this power being
coupled with an interest is irrevocable while any of the Obligations remain
unpaid. Agent shall have the right at any time, after the occurrence and during
the continuance of an Event of Default, to change the address for delivery of
mail addressed to the Borrower to such address as Agent may designate and to
receive, open and dispose of all mail addressed to the Borrower.
 
(g) No Liability. Neither Agent nor any Lender shall, under any circumstances or
in any event whatsoever, have any liability for any error or omission or delay
of any kind occurring in the settlement, collection or payment of any of the
Receivables or any instrument received in payment thereof, or for any damage
resulting therefrom, except to the extent that any of the foregoing arises out
of the willful misconduct or gross negligence of Agent or any Lender. At any
time after the occurrence and during the continuance of an Event of Default,
Agent may, without notice or consent from the Borrower, sue upon or otherwise
collect, extend the time of payment of, compromise or settle for cash, credit or
upon any terms any of the Receivables or any other securities, instruments or
insurance applicable thereto and/or release any obligor thereof. At any time
after the occurrence and during the continuance of an Event of Default, Agent is
authorized and empowered to accept the return of the goods represented by any of
the Receivables, without notice to or consent by the Borrower, all without
discharging or in any way affecting the Borrower's liability hereunder.
 
 
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(h) Establishment of a Lockbox Account, Dominion Account. Upon the occurrence of
a Cash Dominion Event and until, as applicable, no Event of Default shall have
occurred and be continuing or upon the occurrence of a Testing Event Cure, all
proceeds of Collateral shall be remitted directly by the customers of the
Borrower to (or, to the extent the Borrower received such proceeds directly,
they shall be deposited by Borrower into) either a lockbox account, dominion
account or such other "blocked account" ("Blocked Accounts") established at a
bank or banks (each such bank, a "Blocked Account Bank") pursuant to an
arrangement with such Blocked Account Bank as may be selected by Borrower and be
acceptable to Agent. The Borrower, Agent and each Blocked Account Bank shall
enter into a deposit account control agreement (each, a "Deposit Account Control
Agreement") in form and substance satisfactory to Agent directing such Blocked
Account Bank to transfer such funds so deposited to Agent, either to any account
maintained by Agent at said Blocked Account Bank or by wire transfer to
appropriate account(s) of Agent. All funds deposited in such Blocked Accounts
shall immediately become the property of Agent and Borrower shall obtain the
agreement by such Blocked Account Bank to waive any offset rights against the
funds so deposited. Neither Agent nor any Lender assumes any responsibility for
such blocked account arrangement, including any claim of accord and satisfaction
or release with respect to deposits accepted by any Blocked Account Bank
thereunder. Alternatively, upon the occurrence of a Cash Dominion Event and
until, as applicable, no Event of Default shall have occurred and be continuing
or upon the occurrence of a Testing Event Cure, Agent may establish depository
accounts ("Depository Accounts") in the name of Agent at a bank or banks for the
deposit of such funds and Borrower shall deposit all proceeds of Collateral or
cause same to be deposited, in kind, in such Depository Accounts of Agent in
lieu of depositing same to the Blocked Accounts. All deposit accounts and
investment accounts of the Borrower and its Subsidiaries are set forth on
Schedule 4.15(h).
 
(i) Adjustments. The Borrower shall not, without Agent's consent (which consent
shall not be unreasonably withheld, conditioned or delayed), compromise or
adjust any Receivables (or extend the time for payment thereof) or accept any
returns of merchandise or grant any additional discounts, allowances or credits
thereon except for those compromises, adjustments, returns, discounts, credits
and allowances as have been heretofore customary in the business of the
Borrower.
 
4.16.   Inventory.
 
To the extent Inventory held for sale or lease has been produced by the
Borrower, it has been and will be produced by the Borrower in accordance with
the Federal Fair Labor Standards Act of 1938, as amended, and all rules,
regulations and orders thereunder.
 
4.17.   Maintenance of Equipment.
 
The Equipment shall be maintained in good operating condition and repair
(reasonable wear and tear excepted) and all necessary replacements of and
repairs thereto shall be made so that the value and operating efficiency of the
Equipment shall be maintained and preserved. The Borrower shall not use or
operate the Equipment in violation of any law, statute, ordinance, code, rule or
regulation.
 
 
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4.18.   Exculpation of Liability.
 
Nothing herein contained shall be construed to constitute Agent or any Lender as
the Borrower's agent for any purpose whatsoever, nor shall Agent or any Lender
be responsible or liable for any shortage, discrepancy, damage, loss or
destruction of any part of the Collateral wherever the same may be located and
regardless of the cause thereof. Neither Agent nor any Lender, whether by
anything herein or in any assignment or otherwise, assume any of the Borrower's
obligations under any contract or agreement assigned to Agent or such Lender,
and neither Agent nor any Lender shall be responsible in any way for the
performance by the Borrower of any of the terms and conditions thereof.
 
4.19.   Environmental Matters.
 
(a) The Borrower shall ensure that the Real Property and all operations and
businesses conducted thereon remains in compliance with all Environmental Laws
except to the extent any such failure to comply is not reasonably likely to have
a Material Adverse Effect and they shall not place or permit to be placed any
Hazardous Substances on any Real Property except as permitted by Applicable Law
or appropriate governmental authorities.
 
(b) The Borrower shall defend and indemnify Agent and Lenders and hold Agent,
Lenders and their respective employees, agents, directors and officers harmless
from and against all loss, liability, damage and expense, claims, costs,
judgments, suits, fines and penalties and disbursements of any kind, including
reasonable attorney's fees, suffered or incurred by Agent or Lenders under or on
account of any Environmental Laws, including the assertion of any Lien
thereunder, with respect to any Hazardous Discharge, the presence of any
Hazardous Substances affecting the Real Property, whether or not the same
originates or emerges from the Real Property or any contiguous real estate,
including any loss of value of the Real Property as a result of the foregoing
except to the extent such loss, liability, damage and expense is attributable to
any Hazardous Discharge or to the presence of any Hazardous Substances resulting
from actions on the part of Agent or any Lender. The Borrower' obligations under
this Section 4.19(b) shall arise upon the discovery of the presence of any
Hazardous Substances at the Real Property, whether or not any federal, state, or
local environmental agency has taken or threatened any action in connection with
the presence of any Hazardous Substances. The Borrower's obligations and the
indemnifications hereunder shall survive the termination of this Agreement for a
period of five (5) years.
 
(c) For purposes of Section 4.19 and 5.7, all references to Real Property shall
be deemed to include all of the Borrower's right, title and interest in and to
its owned and leased premises.
 
4.20.   Financing Statements.
 
Except as respects the financing statements filed by Agent and the financing
statements described on Schedule 1.2(B), no financing statement covering any of
the Collateral or any proceeds thereof is on file in any public office.
 
 
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V.        REPRESENTATIONS AND WARRANTIES.
 
 Borrower represents and warrants as follows:
 
      5.1.       Authority.
 
Borrower has full power, authority and legal right to enter into this Agreement
and the Other Documents and to perform all its respective Obligations hereunder
and thereunder. This Agreement and the Other Documents have been duly executed
and delivered by Borrower and this Agreement and the Other Documents constitute
the legal, valid and binding obligation of Borrower, enforceable in accordance
with their terms, except as such enforceability may be limited by any applicable
bankruptcy, insolvency, moratorium or similar laws affecting creditors' rights
generally. The execution, delivery and performance of this Agreement and of the
Other Documents (a) are within Borrower's corporate powers, have been duly
authorized by all necessary corporate action, are not in contravention of law or
the terms of Borrower's by-laws, certificate or articles of incorporation or
other applicable documents relating to Borrower's formation or to the conduct of
Borrower's business or of any material agreement or undertaking to which
Borrower is a party or by which Borrower is bound, (b) will not conflict with or
violate any law or regulation, or any judgment, order or decree of any
Governmental Body, (c) will not require the Consent of any Governmental Body or
any other Person, except those Consents set forth on Schedule 5.1 hereto, all of
which will have been duly obtained, made or compiled prior to the Closing Date
and which are in full force and effect and (d) will not conflict with, nor
result in any breach in any of the provisions of or constitute a default under
or result in the creation of any Lien except Permitted Encumbrances upon any
asset of Borrower under the provisions of any agreement, charter document,
instrument, by-law or other instrument to which Borrower is a party or by which
it or its property is a party or by which it may be bound.
 
5.2.          Formation and Qualification.
 
(a) Each Borrower Party is duly incorporated and in good standing under the laws
of the state listed on Schedule 5.2(a) and is qualified to do business and is in
good standing in the states listed on Schedule 5.2(a) which constitute all
states in which qualification and good standing are necessary for such Borrower
Party to conduct its business and own its property and where the failure to so
qualify could reasonably be expected to have a Material Adverse Effect on such
Borrower Party. Borrower has delivered to Agent true and complete copies of its
certificate or articles of incorporation and by-laws, and will promptly notify
Agent of any amendment or changes thereto.
 
(b) The only Subsidiaries of each Borrower Party are listed on Schedule 5.2(b).
 
5.3.          Survival of Representations and Warranties.
 
All representations and warranties of Borrower contained in this Agreement and
the Other Documents shall be true at the time of Borrower's execution of this
Agreement and the Other Documents, and shall survive the execution, delivery and
acceptance thereof by the parties thereto and the closing of the transactions
described therein or related thereto.
 
 
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5.4.          Tax Returns.
 
Each Borrower Party's federal tax identification number is set forth on Schedule
5.4. Each Borrower Party has filed all federal, state and local tax returns and
other reports each is required by law to file and has paid all taxes,
assessments, fees and other governmental charges that are due and payable.
Federal, state and local income tax returns of each Borrower Party have been
examined and reported upon by the appropriate taxing authority or closed by
applicable statute and satisfied for all fiscal years prior to and including the
fiscal year ending 2006. The provision for taxes on the books of each Borrower
Party is adequate for all years not closed by applicable statutes, and for its
current fiscal year, and no Borrower Party has any knowledge of any deficiency
or additional assessment in connection therewith not provided for on its books.
 
5.5.          Financial Statements.
 
(a) The twelve-month cash flow projections of Holding and its Subsidiaries on a
consolidated basis and the Borrower and its Subsidiaries on a consolidated and
consolidating basis and their projected balance sheets as of the Closing Date,
copies of which are annexed hereto as Exhibit 5.5(a) (the "Projections") were
prepared by the Chief Financial Officer of Holding and/or the Borrower, are
based on underlying assumptions which provide a reasonable basis for the
projections contained therein and reflect Holding's and/or the Borrower's
judgment based on present circumstances of the most likely set of conditions and
course of action for the projected period.
 
(b) The balance sheets of Holding and its Subsidiaries on a consolidated basis
as of the fiscal year ending December 31, 2010, and the related statements of
income, changes in stockholder's equity, and changes in cash flow for the period
ended on such date (collectively, the "Year End Financial Statements"),copies of
which have been delivered to Agent, have been prepared in accordance with GAAP,
consistently applied (except for changes in application in which such
accountants concur) and present fairly the financial position of Holding and its
Subsidiaries at such date and the results of their operations for such period.
Since December 31, 2010 there has been no change in the condition, financial or
otherwise, of Holding or its Subsidiaries as shown on the consolidated balance
sheet as of such date and no change in the aggregate value of machinery,
equipment and Real Property owned by Holding and its Subsidiaries, except
changes in the Ordinary Course of Business, none of which individually or in the
aggregate has been materially adverse.
 
(c) The balance sheets of Holding and its Subsidiaries on a consolidating basis
as of the months ending January 31, 2011 through June 30, 2011, and the related
statements of income, changes in stockholder's equity, and changes in cash flow
for the period ended on such date (collectively, the "Month End Financial
Statements" and together with the Year End Financial Statements, the "Financial
Statements"), copies of which have been delivered to Agent, have been prepared
in accordance with GAAP, consistently applied and present fairly the financial
position of Holding and its Subsidiaries at such date and the results of their
operations for such period.
 
 
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5.6.    Entity Names.
 
No Borrower Party has been known by any other corporate name in the past five
years and no Borrower Party sells Inventory under any other name except as set
forth on Schedule 5.6, nor has any Borrower Party been the surviving company of
a merger or consolidation or acquired all or substantially all of the assets of
any Person during the preceding five (5) years.
 
5.7.    O.S.H.A. and Environmental Compliance.
 
(a) Except as could not reasonably be expected to have a Material Adverse
Effect, (i) none of the operations of any Borrower Party are the subject of any
federal, state or local investigation to determine whether any remedial action
is needed to address the presence or disposal of any environmental pollution,
hazardous material or environmental removal, response or remedial action on any
Borrower Party's owned or leased real property and no such investigations are,
to the best of such Borrower Party's knowledge, threatened against such Borrower
Party, and (ii) no enforcement proceeding, complaint, summons, citation, notice,
order, claim, litigation, investigation, letter or other written communication
from a federal, state or local authority has been filed against or delivered to
such Borrower Party, regarding or involving any threat of release or release of
any environmental pollution or hazardous material on any real property now or
previously owned or operated by such Borrower Party or, to such Borrower Party’s
knowledge, at any off-site location.
 
(b) Except as could not reasonably be expected to have a Material Adverse
Effect, no Borrower Party has any known contingent liability with respect to any
release or threat of release of any environmental pollution or hazardous
material or other violation of Environmental Laws on any real property now or
previously owned or operated by such Borrower Party or to such Borrower Party's
knowledge, at any off-site location.
 
(c) Each Borrower Party is and has been in compliance with all Environmental
Laws applicable to the operation of such Borrower Party's business, except to
the extent that the failure to so comply could not reasonably be expected to
have a Material Adverse Effect.
 
5.8.    Solvency; No Litigation, Violation, Indebtedness or Default.
 
(a) After giving effect to the transactions contemplated under this Agreement
(collectively, the "Transactions"), each Borrower Party will be solvent, able to
pay its debts as they mature, will have capital sufficient to carry on its
business and all businesses in which it is about to engage, and (i) as of the
Closing Date, the fair present saleable value of its assets, calculated on a
going concern basis, is in excess of the amount of its liabilities and (ii)
subsequent to the Closing Date, the fair saleable value of its assets
(calculated on a going concern basis) will be in excess of the amount of its
liabilities.
 
(b) Except as disclosed in Schedule 5.8(b), no Borrower Party has (i) any
pending or threatened litigation, arbitration, actions or proceedings which
involve the possibility of having a Material Adverse Effect, and (ii) any
liabilities or indebtedness for borrowed money other than the Obligations.
 
 
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(c) No Borrower Party is in violation of any applicable statute, law, rule,
regulation or ordinance in any respect which could reasonably be expected to
have a Material Adverse Effect, nor is any Borrower Party in violation of any
order of any court, Governmental Body or arbitration board or tribunal which
could reasonably be expected to have a Material Adverse Effect.
 
(d) No Borrower Party nor any member of the Controlled Group maintains or
contributes to any Plan other than (i) as of the Closing Date, those listed on
Schedule 5.8(d) hereto and (ii) thereafter, as permitted under this Agreement.
(i) No Plan has incurred any "accumulated funding deficiency," as defined in
Section 302(a)(2) of ERISA and Section 4 12(a) of the Code, whether or not
waived, and each Borrower Party and each member of the Controlled Group has met
all applicable minimum funding requirements under Section 302 of ERISA in
respect of each Plan; (ii) each Plan which is intended to be a qualified plan
under Section 401(a) of the Code as currently in effect has been determined by
the Internal Revenue Service to be qualified under Section 401(a) of the Code
and the trust related thereto is exempt from federal income tax under Section
501(a) of the Code; (iii) neither any Borrower Party nor any member of the
Controlled Group has incurred any liability to the PBGC other than for the
payment of premiums, and there are no premium payments which have become due
which are unpaid; (iv) no Plan has been terminated by the plan administrator
thereof nor by the PBGC, and there is no occurrence which would cause the PBGC
to institute proceedings under Title IV of ERISA to terminate any Plan; (v) at
this time, the current value of the assets of each Plan exceeds the present
value of the accrued benefits and other liabilities of such Plan and neither any
Borrower Party nor any member of the Controlled Group knows of any facts or
circumstances which would materially change the value of such assets and accrued
benefits and other liabilities; (vi) neither any Borrower Party nor any member
of the Controlled Group has breached any of the responsibilities, obligations or
duties imposed on it by ERISA with respect to any Plan; (vii) neither any
Borrower Party nor any member of a Controlled Group has incurred any liability
for any excise tax arising under Section 4972 or 4980B of the Code, and no fact
exists which could give rise to any such liability; (viii) neither any Borrower
Party nor any member of the Controlled Group nor any fiduciary of, nor any
trustee to, any Plan, has engaged in a "prohibited transaction" described in
Section 406 of the ERISA or Section 4975 of the Code nor taken any action which
would constitute or result in a Termination Event with respect to any such Plan
which is subject to ERISA; (ix) each Borrower Party and each member of the
Controlled Group has made all contributions due and payable with respect to each
Plan; (x) there exists no event described in Section 4043(b) of ERISA, for which
the thirty (30) day notice period has not been waived; (xi) neither any Borrower
Party nor any member of the Controlled Group has any fiduciary responsibility
for investments with respect to any plan existing for the benefit of persons
other than employees or former employees of the Borrower and any member of the
Controlled Group; (xii) neither any Borrower Party nor any member of the
Controlled Group maintains or contributes to any Plan which provides health,
accident or life insurance benefits to former employees, their spouses or
dependents, other than in accordance with Section 4980B of the Code; (xiii)
neither any Borrower Party nor any member of the Controlled Group has withdrawn,
completely or partially, from any Multiemployer Plan so as to incur liability
under the Multiemployer Pension Plan Amendments Act of 1980 and there exists no
fact which would reasonably be expected to result in any such liability; and
(xiv) no Plan fiduciary (as defined in Section 3(2 1) of ERISA) has any
liability for breach of fiduciary duty or for any failure in connection with the
administration or investment of the assets of a Plan.
 
 
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5.9.          Patents, Trademarks, Copyrights and Licenses.
 
All patents, patent applications, trademarks, trademark applications, service
marks, service mark applications, copyrights, copyright applications, design
rights, tradenames, assumed names, trade secrets and licenses owned or utilized
by any Borrower Party are set forth on Schedule 5.9, are valid and have been
duly registered or filed with all appropriate Governmental Bodies and constitute
all of the intellectual property rights which are necessary for the operation of
its business; there is no objection to or pending challenge to the validity of
any such patent, trademark, copyright, design rights, tradename, trade secret or
license and no Borrower Party is aware of any grounds for any challenge, except
as set forth in Schedule 5.9 hereto. Each patent, patent application, patent
license, trademark, trademark application, trademark license, service mark,
service mark application, service mark license, design rights, copyright,
copyright application and copyright license owned or held by any Borrower Party
and all trade secrets used by any Borrower Party consist of original material or
property developed by such Borrower Party or was lawfully acquired by such
Borrower Party from the proper and lawful owner thereof. Each of such items has
been maintained so as to preserve the value thereof from the date of creation or
acquisition thereof. With respect to all software used by any Borrower Party,
such Borrower Party is in possession of all source and object codes related to
each piece of software or is the beneficiary of a source code escrow agreement,
each such source code escrow agreement being listed on Schedule 5.9 hereto.
 
5.10.   Licenses and Permits.
 
Except as set forth in Schedule 5.10, each Borrower Party (a) is in material
compliance with and (b) has procured and is now in possession of, all material
licenses or permits required by any applicable federal, state or local law, rule
or regulation for the operation of its business in each jurisdiction wherein it
is now conducting or proposes to conduct business and where the failure to
procure such licenses or permits could have a Material Adverse Effect.
 
5.11.   Default of Indebtedness.
 
No Borrower Party is in default in the payment of the principal of or interest
on any Indebtedness or under any instrument or agreement under or subject to
which any Indebtedness has been issued and no event has occurred under the
provisions of any such instrument or agreement which with or without the lapse
of time or the giving of notice, or both, constitutes or would constitute an
event of default thereunder.
 
5.12.   No Default.
 
No Borrower Party is in default in the payment or performance of any of its
contractual obligations which could reasonably be expected to have a Material
Adverse Effect and no Default has occurred.
 
5.13.   No Burdensome Restrictions.
 
No Borrower Party is party to any contract or agreement the performance of which
could have a Material Adverse Effect. Each Borrower Party has heretofore
delivered to Agent true and complete copies of all material contracts to which
it is a party or to which it or any of its properties is subject. No Borrower
Party has agreed or consented to cause or permit in the future (upon the
happening of a contingency or otherwise) any of its property, whether now owned
or hereafter acquired, to be subject to a Lien which is not a Permitted
Encumbrance.
 
 
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5.14.   No Labor Disputes.
 
No Borrower Party is involved in any labor dispute; there are no strikes or
walkouts or union organization of any Borrower Party's employees threatened or
in existence and all labor contracts of each Borrower Party are set forth on
Schedule 5.14 hereto.
 
5.15.   Margin Regulations.
 
No Borrower Party is engaged, nor will it engage, principally or as one of its
important activities, in the business of extending credit for the purpose of
"purchasing" or "carrying" any "margin stock" within the respective meanings of
each of the quoted terms under Regulation U of the Board of Governors of the
Federal Reserve System as now and from time to time hereafter in effect. No part
of the proceeds of any Advance will be used for "purchasing" or "carrying"
"margin stock" as defined in Regulation U of such Board of Governors.
 
5.16.   Investment Company Act.
 
No Borrower Party is an "investment company" registered or required to be
registered under the Investment Company Act of 1940, as amended, nor is it
controlled by such a company.
 
5.17.   Disclosure.
 
No representation or warranty made by any Borrower Party in this Agreement, any
Other Document or in any financial statement, report, certificate or any other
document furnished in connection herewith or therewith contains any untrue
statement of fact or omits to state any fact necessary to make the statements
herein or therein not misleading. There is no fact known to any Borrower Party
or which reasonably should be known to such Borrower Party which such Borrower
Party has not disclosed to Agent in writing with respect to the transactions
contemplated by this Agreement or any Other Document which could reasonably be
expected to have a Material Adverse Effect.
 
5.18.   Swaps.
 
No Borrower Party is a party to, nor will it be a party to, any swap agreement
whereby such Borrower Party has agreed or will agree to swap interest rates or
currencies unless same provides that damages upon termination following an event
of default thereunder are payable on an unlimited "two-way basis" without regard
to fault on the part of either party.
 
5.19.   Conflicting Agreements.
 
No provision of any mortgage, indenture, contract, agreement, judgment, decree
or order binding on any Borrower Party or affecting the Collateral conflicts
with, or requires any Consent which has not already been obtained to, or would
in any way prevent the execution, delivery or performance of, the terms of this
Agreement or the Other Documents.
 
 
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5.20.   Application of Certain Laws and Regulations.
 
Neither any Borrower Party nor any Affiliate of any Borrower Party is subject to
any law, statute, rule or regulation which prohibits the incurrence of any
Indebtedness under this Agreement, including laws, statutes, rules or
regulations relative to common or interstate carriers or to the sale of
electricity, gas, steam, water, telephone, telegraph or other public utility
services.
 
5.21.   Business and Property of Borrower Parties.
 
Upon and after the Closing Date, Borrower Parties do not propose to engage in
any business other than its Ordinary Course of Business and activities necessary
to conduct the foregoing. On the Closing Date, each Borrower Party will own all
the property and possess all of the rights and Consents necessary for the
conduct of the business of such Borrower Party.
 
5.22.   Section 20 Subsidiaries.
 
Borrower Parties do not intend to use and shall not use any portion of the
proceeds of the Advances, directly or indirectly, to purchase during the
underwriting period, or for 30 days thereafter, Ineligible Securities being
underwritten by a Section 20 Subsidiary.
 
5.23.    Anti-Terrorism Laws.
 
(a) General. Neither any Loan Party nor any Affiliate of any Loan Party is in
violation of any Anti-Terrorism Law or engages in or conspires to engage in any
transaction that evades or avoids, or has the purpose of evading or avoiding, or
attempts to violate, any of the prohibitions set forth in any Anti-Terrorism
Law.
 
(b) Executive Order No. 13224. Neither any Loan Party nor any Affiliate of any
Loan Party or their respective agents acting or benefiting in any capacity in
connection with the Advances or other transactions hereunder, is any of the
following (each a "Blocked Person"):
 
(i) a Person that is listed in the annex to, or is otherwise subject to the
provisions of, the Executive Order No. 13224;
 
(ii) a Person owned or controlled by, or acting for or on behalf of, any Person
that is listed in the annex to, or is otherwise subject to the provisions of,
the Executive Order No. 13224;
 
(iii) a Person or entity with which any Lender is prohibited from dealing or
otherwise engaging in any transaction by any Anti-Terrorism Law;
 
(iv) a Person or entity that commits, threatens or conspires to commit or
supports "terrorism" as defined in the Executive Order No. 13224;
 
 
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(v) a Person or entity that is named as a "specially designated national" on the
most current list published by the U.S. Treasury Department Office of Foreign
Asset Control at its official website or any replacement website or other
replacement official publication of such list, or
 
(vi) a Person or entity who is affiliated or associated with a Person or entity
listed above.
 
Neither any Loan Party nor to the knowledge of any Loan Party, any of its agents
acting in any capacity in connection with the Advances or other transactions
hereunder (i) conducts any business or engages in making or receiving any
contribution of funds, goods or services to or for the benefit of any Blocked
Person, or (ii) deals in, or otherwise engages in any transaction relating to,
any property or interests in property blocked pursuant to the Executive Order
No. 13224.
 
5.24.    Trading with the Enemy.
 
No Loan Party has engaged, nor does it intend to engage, in any business or
activity prohibited by the Trading with the Enemy Act.
 
5.25.    Federal Securities Laws.
 
Neither any Borrower Party nor any of its Subsidiaries (i) is required to file
periodic reports under the Exchange Act, (ii) has any securities registered
under the Exchange Act or (iii) has filed a registration statement that has not
yet become effective under the Securities Act.
 
VI.       AFFIRMATIVE COVENANTS.
 
Borrower shall, and shall cause each other Borrower Party to, until payment in
full of the Obligations and termination of this Agreement:
 
6.1.       Payment of Fees.
 
Pay to Agent on demand all usual and customary fees and expenses which Agent
incurs in connection with (a) the forwarding of Advance proceeds and (b) the
establishment and maintenance of any Blocked Accounts or Depository Accounts as
provided for in Section 4.15(h). Agent may, without making demand, charge
Borrower's Account for all such fees and expenses.
 
6.2.       Conduct of Business and Maintenance of Existence and Assets.
 
(a) Conduct continuously and operate actively its business according to good
business practices and maintain all of its properties useful or necessary in its
business in good working order and condition (reasonable wear and tear excepted
and except as may be disposed of in accordance with the terms of this
Agreement), including all licenses, patents, copyrights, design rights,
tradenames, trade secrets and trademarks and take all actions necessary to
enforce and protect the validity of any intellectual property right or other
right included in the Collateral; (b) keep in full force and effect its
existence and comply in all material respects with the laws and regulations
governing the conduct of its business where the failure to do so could
reasonably be expected to have a Material Adverse Effect; and (c) make all such
reports and pay all such franchise and other taxes and license fees and do all
such other acts and things as may be lawfully required to maintain its rights,
licenses, leases, powers and franchises under the laws of the United States or
any political subdivision thereof.
 
 
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6.3.          Violations.
 
Promptly notify Agent in writing of any violation of any law, statute,
regulation or ordinance of any Governmental Body, or of any agency thereof,
applicable to any Borrower Party which could reasonably be expected to have a
Material Adverse Effect.
 
6.4.          Government Receivables.
 
Take all steps necessary to protect Agent's interest in the Collateral under the
Federal Assignment of Claims Act, the Uniform Commercial Code and all other
applicable state or local statutes or ordinances and deliver to Agent
appropriately endorsed, any instrument or chattel paper connected with any
Receivable arising out of contracts between the Borrower and the United States,
any state or any department, agency or instrumentality of any of them.
 
6.5.          Financial Covenants.
 
(a) Fixed Charge Coverage Ratio. Maintain a Fixed Charge Coverage Ratio of not
less than 1.15 to 1.00 calculated as of the last day of the month ending
September 30, 2011 and as of the last day of each month thereafter for the
period equal to the twelve (12) consecutive months then ending.
 
(b) Without limiting any other term or provision of this Agreement, the Borrower
Parties shall not be required to comply with the financial covenant set forth in
clause (a) above unless and until, beginning on the Closing Date through the end
of the Term, a Testing Event occurs, in which case the Borrower Parties shall be
required to have complied with such financial covenant for the relevant period
ended as of the last day of the prior month and to comply with such financial
covenant for the relevant period ending as of the last day of the current month
and for each relevant period thereafter; provided, however, following the
occurrence of a Testing Event, if a Testing Event Cure occurs, then such Testing
Event shall thereafter cease to exist and the Borrower Parties shall not be
required to comply with such financial covenant for any relevant period ending
after the last day of the month during which the last day of such thirty (30)
day period occurred (it being agreed for avoidance of doubt that the Borrower
Parties shall be required to comply with such financial covenant for the
relevant period ending on the last day of such month) unless and until a
subsequent Testing Event occurs, in which case the Borrower Parties shall be
required to have complied and to comply with such financial covenant in
accordance with the foregoing provisions so long as such subsequent Testing
Event continues (it being agreed that any Testing Event shall continue unless
and until it ceases to exist in accordance with this proviso).
 
 
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 6.6.           Execution of Supplemental Instruments.
 
Execute and deliver to Agent from time to time, upon demand, such supplemental
agreements, statements, assignments and transfers, or instructions or documents
relating to the Collateral, and such other instruments as Agent may request, in
order that the full intent of this Agreement may be carried into effect.
 
 6.7.            Payment of Indebtedness.
 
Pay, discharge or otherwise satisfy at or before maturity (subject, where
applicable, to specified grace periods and, in the case of the trade payables,
to normal payment practices) all its obligations and liabilities of whatever
nature, except when the failure to do so could not reasonably be expected to
have a Material Adverse Effect or when the amount or validity thereof is
currently being contested in good faith by appropriate proceedings and the
applicable Borrower Party shall have provided for such reserves as Agent may
reasonably deem proper and necessary, subject at all times to any applicable
subordination arrangement in favor of Lenders.
 
 6.8.            Standards of Financial Statements.
 
Cause all financial statements referred to in Sections 9.7, 9.8, 9.9, and 9.12
as to which GAAP is applicable to be complete and correct in all material
respects (subject, in the case of interim financial statements, to normal
year-end audit adjustments) and to be prepared in reasonable detail and in
accordance with GAAP applied consistently throughout the periods reflected
therein (except as concurred in by such reporting accountants or officer, as the
case may be, and disclosed therein).
 
 6.9.           Federal Securities Laws.
 
Promptly notify Agent in writing if any Borrower Party or any of its
Subsidiaries (i) is required to file periodic reports under the Exchange Act,
(ii) registers any securities under the Exchange Act or (iii) files a
registration statement under the Securities Act.
 
VII.      NEGATIVE COVENANTS.
 
No Borrower Party shall, until satisfaction in full of the Obligations and
termination of this Agreement:
 
 7.1.         Merger, Consolidation, Acquisition and Sale of Assets.
 
(a) Enter into any merger, consolidation or other reorganization with or into
any other Person or acquire all or a substantial portion of the assets or Equity
Interests of any Person or permit any other Person to consolidate with or merge
with it; provided however, that any Borrower Party may purchase or acquire all
or a substantial portion of the assets or Equity Interests of any Domestic
Person or a business or division of another Domestic Person (a "Permitted
Acquisition"), provided that, each of the following requirements is met:
 
 
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(i) if such Borrower Party is acquiring the ownership interests in such Person,
such Person shall on or before the date of such Permitted Acquisition join this
Agreement as a Guarantor pursuant to Section 15.18 and the Agent shall have
received all documents, including organizational documents and legal opinions,
it may reasonably require in connection therewith (including, without
limitation, such documentation as is required pursuant to Section 15.18);
 
(ii) such Borrower Party, such Person and its owners, as applicable, shall grant
and cause to be perfected first priority Liens to the Agent for the benefit of
the Lenders in the assets of or acquired from such Person covering the same type
of assets as the Collateral in accordance with the terms and provisions of
Section 15.18, subject to no other Liens except Permitted Encumbrances, on or
before the date of such Permitted Acquisition;
 
(iii) the applicable Borrower Party shall pledge all of the capital stock,
shares of beneficial interest, partnership interests or limited liability
company interests, as applicable, of such Person owned by such Borrower Party to
the Agent for the benefit of the Lenders pursuant to a Pledge Agreement;
 
(iv) the board of directors or other equivalent governing body of such Person
shall have approved such Permitted Acquisition and the Borrower Parties also
shall have delivered to the Lenders written evidence of the approval of the
board of directors (or equivalent body) of such Person for such Permitted
Acquisition;
 
(v) each applicable Governmental Body shall have approved such Permitted
Acquisition and the Borrower Parties shall have delivered to the Lenders written
evidence of the approval of such Governmental Body or such Permitted
Acquisition;
 
(vi) the business acquired, or the business conducted by the Person whose
ownership interests are being acquired, as applicable, shall be substantially
the same as one or more line or lines of business conducted by the Loan Parties
and shall comply with Section 7.8;
 
(vii) the Borrower shall demonstrate the following, each after giving effect to
such Permitted Acquisition, by delivering at least five (5) Business Days prior
to such Permitted Acquisition a certificate in the form of Exhibit 7.1
evidencing such compliance: (y) the aggregate Consideration paid for all
Permitted Acquisitions does not exceed Five Million and 00/100 Dollars
($5,000,000.00), and (z) Undrawn Availability of at least Twenty Million and
00/100 Dollars ($20,000,000.00);
 
(viii) the Borrower Parties shall deliver to the Agent at least ten (10)
Business Days before such Permitted Acquisition copies of (x) any agreements
entered into or proposed to be entered into by such Borrower Parties in
connection with such Permitted Acquisition, (y) such other information about
such Person or its assets as any Loan Party may reasonably require, and (z) pro
forma projections (including a pro forma balance sheet, statements of operations
and cash flow) and assumptions used by the Borrower Parties to prepare such
projections and all such items shall be in form and substance satisfactory to
the Agent; and
 
 
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(ix)            no Event of Default or Default shall exist immediately prior to
or after giving effect to such Permitted Acquisition.
 
(b) Except for Excluded Property in which Agent does not have a security
interest in accordance with the terms of this Agreement, sell, lease, transfer
or otherwise dispose of any of its properties or assets, except (i) dispositions
of Inventory in the Ordinary Course of Business, (ii) the disposition or
transfer of obsolete and worn-out Equipment in the Ordinary Course of Business
during any fiscal year having an aggregate fair market value of not more than
Five Hundred Thousand and 00/100 Dollars ($500,000.00) and only to the extent
that the proceeds of any such disposition are used to acquire replacement
Equipment which is subject to Agent's first priority security interest and (iii)
any other sales or dispositions expressly permitted by this Agreement.
 
7.2.          Creation of Liens.
 
Create or suffer to exist any Lien or transfer upon or against any of its
property or assets now owned or hereafter acquired, except Permitted
Encumbrances.
 
7.3.          Guarantees.
 
Become liable upon the obligations or liabilities of any Person by assumption,
endorsement or guaranty thereof or otherwise (other than to Lenders) except (a)
as disclosed on Schedule 7.3, (b) guarantees in respect of any Indebtedness or
obligations of a Borrower Party to the extent that such Indebtedness or other
obligations would not otherwise be prohibited by Section 7.7, (c) the
endorsement of checks in the Ordinary Course of Business, (d) so long as such
guarantee is unsecured, the guaranty of the Indebtedness of Holding under any
Holding Bond Issuances by any Borrower Party and (e) the guaranty of the Project
Indebtedness by any Borrower Party.
 
7.4.          Investments.
 
Purchase or acquire obligations or Equity Interests of, or any other interest
in, any Person, except (a) obligations issued or guaranteed by the United States
of America or any agency thereof, (b) commercial paper with maturities of not
more than 180 days and a published rating of not less than A-1 or P-1 (or the
equivalent rating), (c) certificates of time deposit and bankers' acceptances
having maturities of not more than 180 days and repurchase agreements backed by
United States government securities of a commercial bank if (i) such bank has a
combined capital and surplus of at least Five Hundred Million and 00/100 Dollars
($500,000,000.00), or (ii) its debt obligations, or those of a holding company
of which it is a Subsidiary, are rated not less than A (or the equivalent
rating) by a nationally recognized investment rating agency, (d) U.S. money
market funds that invest solely in obligations issued or guaranteed by the
United States of America or an agency thereof, (e) investments by a Borrower
Party in a Borrower Party, (f) investments by any Borrower Party in Holding
permitted under Sections 7.3 and 7.5 hereof, (g) investments consisting of
promissory notes acquired as non-cash consideration in connection with the
Excluded Property, obsolete or surplus Equipment or surplus real estate, (h)
investments received in connection with good faith settlement of delinquent
accounts and disputes with any customer or supplier arising in the Ordinary
Course of Business, (i) Permitted Acquisitions and (j) other investments not to
exceed Two Million Five Hundred Thousand and 00/100 Dollars ($2,500,000.00) in
the aggregate at any time for all Borrower Parties.
 
 
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7.5.          Loans.
 
Make advances, loans or extensions of credit to any Person, including any
Parent, Subsidiary or Affiliate, except with respect to (a) the extension of
commercial trade credit in connection with the sale of Inventory in the Ordinary
Course of Business, (b) advances, loans or extensions of credit to a Borrower
Party, (c) loans to its employees in the Ordinary Course of Business not to
exceed the aggregate amount of Fifty Thousand and 00/100 Dollars ($50,000.00) at
any time outstanding, (d) advances, loans and extensions of credit from any
Borrower Party to Holding to enable Holding to make payments and/or prepayments
as required or permitted under the terms and provisions of any applicable
Holding Bond Issuances or under the Project Indebtedness so long as no Event of
Default shall have occurred or shall occur as a result of giving effect to any
such advance, loan or extension of credit and (e) other advances, loans or
extensions of credit in an aggregate amount at any time not to exceed Five
Hundred Thousand and 00/1 00 Dollars ($500,000.00) for all Borrower Parties.
 
7.6.          Dividends/Distributions.
 
Declare, pay or make any dividend or distribution on any shares of the common
stock, preferred stock, membership interests or partnership interests of any
Borrower Party or apply any of its funds, property or assets to the purchase,
redemption or other retirement of any common stock, preferred stock, membership
interests or partnership interests or of any options to purchase or acquire any
such shares of common or preferred stock, membership interests or partnership
interests of any Borrower Party, except that (i) any Borrower Party may make any
such payment or distribution to another Borrower Party, (ii) so long as no Event
of Default shall have occurred and be continuing or shall occur as a result of
giving effect to any such payment, the Borrower Parties shall be permitted to
pay dividends or distributions to Holding to enable Holding to make payments as
required or permitted under any Holding Bond Issuance or under the Project
Indebtedness and (iii) so long as (y) no Event of Default or Default shall have
occurred and be continuing or shall occur as a result of giving effect to any
such payment and (z) Undrawn Availability, both prior to and after giving effect
to any such payment, is equal to or greater than Twenty Million and 00/100
Dollars ($20,000,000.00), the Borrower Parties shall be permitted to pay
dividends or distributions.
 
7.7.          Indebtedness.
 
Create, incur, assume or suffer to exist any Indebtedness (exclusive of trade
debt) except in respect of:
 
(a) Indebtedness existing on the Closing Date and set forth on Schedule 7.7
(including any extensions or renewals thereof), provided that the principal
amount of such Indebtedness shall not be increased without the prior written
consent of the Required Lenders;
 
(b) Indebtedness to Agent or Lenders under or pursuant to this Agreement or the
Other Documents;
 
 
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(c)  Indebtedness incurred for Capital Expenditures in an aggregate principal
amount not to exceed Five Million and 00/100 Dollars ($5,000,000.00) at any
time;
 
(d) the Project Indebtedness;
 
(e) any guarantee permitted under Section 7.3 hereof; and
 
(f) any Indebtedness of any Borrower Party owed to a Loan Party.
 
7.8.          Nature of Business.
 
Substantially change the nature of the business in which it is presently
engaged, nor except as specifically permitted hereby purchase or invest,
directly or indirectly, in any assets or property other than in the Ordinary
Course of Business for assets or property which are useful in, necessary for and
are to be used in its business as presently conducted.
 
7.9.          Transactions with Affiliates.
 
Directly or indirectly, purchase, acquire or lease any property from, or sell,
transfer or lease any property to, or otherwise enter into any transaction or
deal with, any Affiliate, except transactions: (i) between or among the Loan
Parties and/or their respective Subsidiaries not otherwise prohibited hereunder;
and (ii) disclosed to Agent, which are in the Ordinary Course of Business, on an
arm's-length basis on terms and conditions no less favorable than terms and
conditions which would have been obtainable from a Person other than an
Affiliate.
 
7.10.        Leases.
 
Enter as lessee into any operating lease arrangement for real or personal
property (except for rail car leases) if after giving effect thereto, aggregate
annual rental payments for all such leased property would exceed One Million and
00/100 Dollars ($1,000,000.00) in any one fiscal year in the aggregate for all
Borrower Parties.
 
7.11.        Subsidiaries.
 
(a) Form any Subsidiary unless (i) such Subsidiary becomes a Guarantor for the
Obligations and among other things, executes a Guaranty in form and substance
satisfactory to Agent, (ii) Agent shall have received all documents, including
organizational documents and legal opinions, it may reasonably require in
connection therewith and (iii) the Subsidiary created by such Borrower Party
shall grant first priority, perfected Liens in its assets to Agent for the
benefit of Lenders covering the same type of assets as the Collateral, and the
applicable Borrower Party shall pledge all of the Equity Interests in such
Subsidiary owned by such Borrower Party to Agent for the benefit of Lenders
pursuant to a Pledge Agreement; provided, however, to the extent any such
Subsidiary is formed for the exclusive purpose of incurring the Project
Indebtedness, such Subsidiary shall become a Guarantor and otherwise comply with
the requirements of this Section 7.11(a); provided, however, if such Guaranty
and/or any such grant of a security interest in the assets of such Subsidiary is
prohibited by, or constitutes a breach or default under or results in the
termination of any contract, license, agreement, instrument or other document
evidencing the Project Indebtedness, then such Subsidiary shall not be required
to become a Guarantor and otherwise comply with the requirements of this Section
7.11(a); provided further, however, that upon either the payment in full and
termination of the Project Indebtedness or the elimination otherwise of any such
prohibition, breach or default, such Subsidiary shall immediately become a
Guarantor and otherwise comply with the requirements of this Section 7.11(a).
 
 
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(b)            Enter into any partnership, joint venture or similar arrangement.
 
7.12.        Fiscal Year and Accounting Changes.
 
Change its fiscal year from the twelve-month period beginning January 1 and
ending December 31 or make any change (i) in accounting treatment and reporting
practices except as required by GAAP or (ii) in tax reporting treatment except
as required by law.
 
7.13.        Pledge of Credit.
 
Now or hereafter (i) pledge Agent's or any Lender's credit on any purchases or
for any purpose whatsoever or (ii) use any portion of any Advance in or for any
business other than in the Ordinary Course of Business or as permitted under
Sections 7.3, 7.4, 7.5 and 7.6 of this Agreement).
 
7.14.        Amendment of Organizational Documents.
 
Amend, modify or waive any term or provision of its Certificate or Articles of
Incorporation or By-Laws unless required by law.
 
7.15.        Compliance with ERISA.
 
(i) (x) Maintain, or permit any member of the Controlled Group to maintain, or
(y) become obligated to contribute, or permit any member of the Controlled Group
to become obligated to contribute, to any Plan, other than those Plans disclosed
on Schedule 5.8(d) or any other Plan for which Agent has provided its prior
written consent, (ii) engage, or permit any member of the Controlled Group to
engage, in any non-exempt "prohibited transaction", as that term is defined in
section 406 of ERISA and Section 4975 of the Code, (iii) incur, or permit any
member of the Controlled Group to incur, any "accumulated funding deficiency",
as that term is defined in Section 302 of ERISA or Section 412 of the Code, (iv)
terminate, or permit any member of the Controlled Group to terminate, any Plan
where such event could result in any liability of any Borrower Party or any
member of the Controlled Group or the imposition of a lien on the property of
any Borrower Party or any member of the Controlled Group pursuant to Section
4068 of ERISA, (v) assume, or permit any member of the Controlled Group to
assume, any obligation to contribute to any Multiemployer Plan not disclosed on
Schedule 5.8(d), (vi) incur, or permit any member of the Controlled Group to
incur, any withdrawal liability to any Multiemployer Plan; (vii) fail promptly
to notify Agent of the occurrence of any Termination Event, (viii) fail to
comply, or permit a member of the Controlled Group to fail to comply, with the
requirements of ERISA or the Code or other Applicable Laws in respect of any
Plan, (ix) fail to meet, or permit any member of the Controlled Group to fail to
meet, all minimum funding requirements under ERISA or the Code or postpone or
delay or allow any member of the Controlled Group to postpone or delay any
funding requirement with respect of any Plan.
 
 
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7.16.        Prepayment of Indebtedness.
 
At any time, directly or indirectly, prepay any Indebtedness (other than
Indebtedness to Agent or Lenders pursuant to this Agreement or the Other
Documents), or repurchase, redeem, retire or otherwise acquire any Indebtedness,
in each case of any Borrower Party, if any Event of Default shall have occurred
and be continuing or shall occur as a result of giving effect to any such
payment.
 
7.17.        Anti-Terrorism Laws.
 
No Borrower Party shall, until satisfaction in full of the Obligations and
termination of this Agreement, nor shall it permit any Affiliate or agent to:
 
(a) Conduct any business or engage in any transaction or dealing with any
Blocked Person, including the making or receiving any contribution of funds,
goods or services to or for the benefit of any Blocked Person.
 
(b) Deal in, or otherwise engage in any transaction relating to, any property or
interests in property blocked pursuant to the Executive Order No. 13224.
 
(c) Engage in or conspire to engage in any transaction that evades or avoids, or
has the purpose of evading or avoiding, or attempts to violate, any of the
prohibitions set forth in the Executive Order No. 13224, the USA PATRIOT Act or
any other Anti-Terrorism Law. Each Borrower Party shall deliver or shall cause
to be delivered to Lenders any certification or other evidence requested from
time to time by any Lender in its sole discretion, confirming such Borrower
Party's compliance with this Section 7.17.
 
7.18.        Membership/Partnership Interests.
 
Elect to treat or permit any of its Subsidiaries to (x) treat its limited
liability company membership interests or partnership interests, as the case may
be, as securities as contemplated by the definition of "security" in Section
8-102(15) and by Section 8-103 of Article 8 of Uniform Commercial Code or (y)
certificate its limited liability company membership interests or partnership
interests, as the case may be.

7.19.        Trading with the Enemy Act.

Engage in any business or activity in violation of the Trading with the Enemy
Act.
 
7.20.        Other Agreements.
 
Enter into any amendment, waiver or modification of any contract, document or
agreement in a manner that would be materially adverse to Agent or any Lender.
 
 
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7.21.        Double Negative Pledge.
 
Enter into or suffer to exist any agreement with any Person, other than in
connection with this Agreement, any Holding Bond Issuances or the Project
Indebtedness, which prohibits or limits the ability of such Borrower Party to
create, incur, assume or suffer to exist any Lien upon or with respect to any
property or assets of any kind, real or personal, tangible or intangible
(including, but not limited to, stock or other equity interests, as the case may
be) of such Borrower Party.
 
VIII.        CONDITIONS PRECEDENT.
 
8.1.          Conditions to Initial Advances.
 
The agreement of Lenders to make the initial Advances requested to be made on
the Closing Date is subject to the satisfaction, or waiver by Agent, immediately
prior to or concurrently with the making of such Advances, of the following
conditions precedent:
 
(a) Credit Agreement and Other Documents. Agent shall have received this
Agreement and each Other Document duly executed and delivered by an authorized
officer of each Loan Party and any third parties, as applicable (including,
without limitation, all original stock certificates or other certificates
evidencing the Subsidiary Stock and appropriate transfer powers with respect
thereto);
 
(b) Filings, Registrations and Recordings. (i) Each document (including any
Uniform Commercial Code financing statement) required by this Agreement, any
related agreement or under law or reasonably requested by Agent to be filed,
registered or recorded in order to create, in favor of Agent, a perfected
security interest in or lien upon the Collateral shall have been properly filed,
registered or recorded in each jurisdiction in which the filing, registration or
recordation thereof is so required or requested, and Agent shall have received
an acknowledgment copy, or other evidence satisfactory to it, of each such
filing, registration or recordation and satisfactory evidence of the payment of
any necessary fee, tax or expense relating thereto; and (ii) Agent shall have
received the results of searches listing all effective financing statements
which name any of the Loan Parties as debtor, together with copies of such
financing statements, none of which, except for Permitted Encumbrances, shall
cover any of the Collateral;
 
(c) Authorization Proceedings of Loan Parties. Agent shall have received a copy
of the resolutions in form and substance reasonably satisfactory to Agent, of
the Board of Directors of each Loan Party authorizing (i) the execution,
delivery and performance of this Agreement, the Notes, and any other Other
Document and (ii) with respect to the Borrower, the granting by the Borrower of
the security interests in and liens upon the Collateral certified by the
Secretary or an Assistant Secretary of the Borrower as of the Closing Date; and,
such certificate shall state that the resolutions thereby certified have not
been amended, modified, revoked or rescinded as of the date of such certificate;
 
(d) Incumbency Certificates of Loan Parties. Agent shall have received a
certificate of the Secretary or an Assistant Secretary of each Loan Party, dated
the Closing Date, as to the incumbency and signature of the officers of each
Loan Party executing this Agreement, the Other Documents, any certificate or
other documents to be delivered by it pursuant hereto, together with evidence of
the incumbency of such Secretary or Assistant Secretary;
 
 
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(e) Certificates. Agent shall have received a copy of the Certificate or
Articles of Incorporation of each Loan Party, and all amendments thereto,
certified by the Secretary of State or other appropriate official of its
jurisdiction of incorporation together with copies of the By-Laws of each Loan
Party and all agreements of the Borrower's shareholders, in each case certified
as accurate and complete by the Secretary of each Loan Party;
 
(f) Good Standing and Tax Lien Certificates. Agent shall have received good
standing and tax lien certificates for each Loan Party dated not more than
thirty (30) days prior to the Closing Date, issued by the Secretary of State or
other appropriate official of each Loan Party's jurisdiction of incorporation
and each jurisdiction where the conduct of each Loan Party's business activities
or the ownership of its properties necessitates qualification;
 
(g) Legal Opinion. Agent shall have received the executed legal opinion of
Buchanan Ingersoll & Rooney P.C. and local counsel opinions in form and
substance satisfactory to Agent which shall cover such matters incident to the
transactions contemplated by this Agreement, the Notes and any other Other
Document as Agent may reasonably require and each Loan Party hereby authorizes
and directs such counsel to deliver such opinions to Agent and Lenders;
 
(h) No Litigation. (i) No litigation, investigation or proceeding before or by
any arbitrator or Governmental Body shall be continuing or threatened against
any Loan Party or against the respective officers or directors of any Loan Party
in connection with this Agreement, the Other Documents or any of the
transactions contemplated thereby and which could reasonably be expected to have
a Material Adverse Effect; and (ii) no injunction, writ, restraining order or
other order of any nature materially adverse to any Borrower Party or the
conduct of its respective business or inconsistent with the due consummation of
the Transactions shall have been issued by any Governmental Body;
 
(i) Financial Condition Certificates. Agent shall have received an executed
Financial Condition Certificate in the form of Exhibit 8.1(i);
 
(j) Collateral Examination. Agent shall have completed Collateral examinations
and received appraisals, the results of which shall be satisfactory in form and
substance to Lenders, of the Receivables, Inventory and Equipment of the
Borrower and all books and records in connection therewith;
 
(k) Fees. Agent shall have received all fees payable to Agent and Lenders on or
prior to the Closing Date hereunder, including pursuant to Article III hereof
and the Fee Letter;
 
(l) Existing Indebtedness. Agent shall have received (i) a payoff letter, in
form and substance satisfactory to Agent, pursuant to which any existing
Indebtedness that is to be paid by initial Advances hereunder will be paid in
full, and (ii) evidence satisfactory to Agent that all necessary termination
statements, satisfaction documents and any other applicable releases in
connection with any existing Indebtedness and all other Liens with respect to
Borrower that are not Permitted Encumbrances have been filed or arrangements
satisfactory to Agent have been made for such filing;
 
 
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(m) Financial Statements. Agent shall have received a copy of (i) the Financial
Statements, and (ii) the Projections, which in each case shall be satisfactory
in all respects to Agent and Lenders;
 
(n) Insurance. Agent shall have received in form and substance satisfactory to
Agent, certified copies of Borrower Parties' casualty insurance policies,
together with loss payable endorsements on Agent's standard form of loss payee
endorsement naming Agent as lender loss payee, and certified copies of Borrower
Parties' liability insurance policies, together with endorsements naming Agent
as a co-insured;
 
(o) Payment Instructions. Agent shall have received written instructions from
Borrower directing the application of proceeds of the initial Advances made
pursuant to this Agreement;
 
(p) Blocked Accounts. Agent shall have received duly executed agreements
establishing the Blocked Accounts or Depository Accounts with financial
institutions acceptable to Agent for the collection or servicing of the
Receivables and proceeds of the Collateral or, alternatively, the Borrower shall
have established with Agent all of its bank accounts with Agent, all in a manner
to the satisfaction of Agent in its sole discretion;
 
(q) Consents. Agent shall have received any and all Consents necessary to permit
the effectuation of the transactions contemplated by this Agreement and the
Other Documents; and, Agent shall have received such Consents and waivers of
such third parties as might assert claims with respect to the Collateral, as
Agent and its counsel shall deem necessary;
 
(r) No Adverse Material Change. (i) Since December 31, 2010, there shall not
have occurred any event, condition or state of facts which could reasonably be
expected to have a Material Adverse Effect and (ii) no representations made or
information supplied to Agent or Lenders shall have been proven to be inaccurate
or misleading in any material respect;
 
(s) Waivers. Agent shall have received fully executed copies of all Lien Waiver
Agreements required by the Agent to be executed on or prior to the Closing Date;
 
(t) Contract Review. Agent shall have reviewed all material contracts of
Borrower Parties including leases, union contracts, labor contracts, vendor
supply contracts, license agreements and distributorship agreements and such
contracts and agreements shall be satisfactory in all respects to Agent;
 
(u) Closing Certificate. Agent shall have received a closing certificate signed
by the Chief Financial Officer of each Loan Party dated as of the date hereof,
stating that (i) all representations and warranties set forth in this Agreement
and the Other Documents are true and correct on and as of such date, (ii) each
Loan Party is on such date in compliance with all the terms and provisions set
forth in this Agreement and the Other Documents and (iii) on such date no
Default or Event of Default has occurred or is continuing;

 
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(v) Borrowing Base. Agent shall have received evidence from Borrower that the
aggregate amount of Eligible Inventory and Eligible Receivables is sufficient in
value and amount to support Advances in the amount requested by Borrower on the
Closing Date;
 
(w) Undrawn Availability. After giving effect to the initial Advances hereunder,
Borrower shall have Undrawn Availability of at least Twenty-Five Million and
00/100 Dollars ($25,000,000.00);
 
(x) Compliance with Laws. Agent shall be reasonably satisfied that the Borrower
is in compliance with all pertinent federal, state, local or territorial
regulations, including those with respect to the Federal Occupational Safety and
Health Act, the Environmental Protection Act, ERISA and the Trading with the
Enemy Act; and
 
(y) Other. All corporate and other proceedings, and all documents, instruments
and other legal matters in connection with the Transactions shall be
satisfactory in form and substance to Agent and its counsel.
 
8.2.          Conditions to Each Advance.
 
The agreement of Lenders to make any Advance requested to be made on any date
(including the initial Advance), is subject to the satisfaction of the following
conditions precedent as of the date such Advance is made:
 
(a) Representations and Warranties. Each of the representations and warranties
made by any Loan Party in or pursuant to this Agreement, the Other Documents and
any related agreements to which it is a party, and each of the representations
and warranties contained in any certificate, document or financial or other
statement furnished at any time under or in connection with this Agreement, the
Other Documents or any related agreement shall be true and correct in all
material respects on and as of such date as if made on and as of such date;
 
(b) No Default. No Event of Default or Default shall have occurred and be
continuing on such date, or would exist after giving effect to the Advances
requested to be made, on such date; provided, however that Agent, in its sole
discretion, may continue to make Advances notwithstanding the existence of an
Event of Default or Default and that any Advances so made shall not be deemed a
waiver of any such Event of Default or Default; and
 
(c) Maximum Advances. In the case of any type of Advance requested to be made,
after giving effect thereto, the aggregate amount of such type of Advance shall
not exceed the maximum amount of such type of Advance permitted under this
Agreement.
 
Each request for an Advance by the Borrower hereunder shall constitute a
representation and warranty by each Loan Party as of the date of such Advance
that the conditions contained in this subsection shall have been satisfied.
 
IX.           INFORMATION AS TO LOAN PARTIES.
 
Until satisfaction in full of the Obligations and the termination of this
Agreement:
 
 
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9.1.           Disclosure of Material Matters.
 
Each Borrower Party shall, immediately upon learning thereof, report to Agent
all matters materially affecting the value, enforceability or collectibility of
any portion of the Collateral, including the Borrower's reclamation or
repossession of, or the return to the Borrower of, a material amount of goods or
claims or disputes asserted by any Customer or other obligor.
 
9.2.           Schedules.
 
The Borrower shall, deliver to Agent on or before the twenty-fifth (25th) day of
each month as and for the prior month (a) accounts receivable agings inclusive
of reconciliations to the general ledger, (b) accounts payable schedules
inclusive of reconciliations to the general ledger, (c) Inventory reports and
(d) a Borrowing Base Certificate in form and substance satisfactory to Agent,
(which shall be calculated as of the last day of the prior month and which shall
not be binding upon Agent or restrictive of Agent's rights under this
Agreement); provided, however, for any period when a Cash Dominion Event has
occurred and is continuing, then, during all such periods the Borrower shall
deliver a Borrowing Base Certificate in form and substance satisfactory to the
Agent on a weekly basis as and for the prior week (consisting of the seven (7)
days commencing on Monday of such prior week and ending on Sunday of such prior
week).  In addition, the Borrower will deliver to Agent at such intervals as
Agent may require:  (i) confirmatory assignment schedules, (ii) copies of
Customer's invoices, (iii) evidence of shipment or delivery, and (iv) such
further schedules, documents and/or information regarding the Collateral as
Agent may require including trial balances and test verifications.  Agent shall
have the right to confirm and verify all Receivables by any manner and through
any medium it considers advisable during the course of any field examination
conducted pursuant to Section 4.10 and do whatever it may deem reasonably
necessary to protect its interests hereunder.  The items to be provided under
this Section 9.2 are to be in form satisfactory to Agent and executed by the
Borrower and delivered to Agent from time to time solely for Agent's convenience
in maintaining records of the Collateral, and the Borrower's failure to deliver
any of such items to Agent shall not affect, terminate, modify or otherwise
limit Agent's Lien with respect to the Collateral.
 
9.3.           Intentionally Omitted.
 
9.4.           Litigation.
 
Each Borrower Party shall promptly notify Agent in writing of any claim,
litigation, suit or administrative proceeding affecting any Loan Party whether
or not the claim is covered by insurance, and of any litigation, suit or
administrative proceeding, which in any such case affects a material portion of
the Collateral or which could reasonably be expected to have a Material Adverse
Effect.
 
 
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9.5.           Material Occurrences.
 
Each Borrower Party shall promptly notify Agent in writing upon the occurrence
of (a) any Event of Default or Default; (b) any event, development or
circumstance whereby any financial statements or other reports furnished to
Agent fail in any material respect to present fairly, in accordance with GAAP
consistently applied, the financial condition or operating results of any Loan
Party as of the date of such statements; (c) any accumulated retirement plan
funding deficiency which, if such deficiency continued for two plan years and
was not corrected as provided in Section 4971 of the Code, could subject any
Loan Party to a tax imposed by Section 4971 of the Code; (d) each and every
default by any Loan Party which might result in the acceleration of the maturity
of any Indebtedness, including the names and addresses of the holders of such
Indebtedness with respect to which there is a default existing or with respect
to which the maturity has been or could be accelerated, and the amount of such
Indebtedness and which could reasonably be expected to have a Material Adverse
Effect; and (e) any other development in the business or affairs of any Loan
Party, which could reasonably be expected to have a Material Adverse Effect; in
each case describing the nature thereof and the action Loan Parties propose to
take with respect thereto.
 
9.6.           Government Receivables.
 
Each Borrower Party shall notify Agent immediately if any of its Receivables
arise out of contracts between any Borrower Party and the United States, any
state, or any department, agency or instrumentality of any of them.
 
9.7.           Annual Financial Statements.
 
Each Loan Party, as applicable, shall furnish Agent and Lenders within one
hundred five (105) days after the end of each fiscal year of Holding, financial
statements of Holding and its Subsidiaries on a consolidated basis and the
Borrower and its Subsidiaries on a consolidated and consolidating basis
including statements of income and stockholders' equity and cash flow from the
beginning of the current fiscal year to the end of such fiscal year and the
balance sheet as at the end of such fiscal year, all prepared in accordance with
GAAP applied on a basis consistent with prior practices, and in reasonable
detail and reported upon without qualification by Grant Thornton LLP, or such
other independent certified public accounting firm selected by Loan Parties and
satisfactory to Agent.  In addition, the reports shall be accompanied by a
Compliance Certificate.
 
9.8.           Quarterly Financial Statements.
 
Each Loan Party, as applicable, shall furnish Agent and Lenders within
forty-five (45) days after the end of each fiscal quarter, an unaudited balance
sheet of Holding and its Subsidiaries on a consolidated basis and the Borrower
and its Subsidiaries on a consolidated and consolidating basis and unaudited
statements of income and stockholders' equity and cash flow of Holding and its
Subsidiaries on a consolidated basis and the Borrower and its Subsidiaries on a
consolidated and consolidating basis reflecting results of operations from the
beginning of the fiscal year to the end of such quarter and for such quarter,
prepared on a basis consistent with prior practices and complete and correct in
all material respects, subject to normal and recurring year end adjustments that
individually and in the aggregate are not material to Loan Parties' business or
Borrower Parties' business, as applicable, and accompanied by comparative
financial statements of Holding and its Subsidiaries and the Borrower and its
Subsidiaries, as applicable, for the same quarter and same fiscal year-to-date
period in the prior fiscal year.  The reports shall be accompanied by a
Compliance Certificate.
 
 
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9.9.           Monthly Financial Statements.
 
The Borrower shall, furnish Agent and Lenders within thirty (30) days after the
end of each month, an unaudited balance sheet of the Borrower and its
Subsidiaries on a consolidated and consolidating basis and unaudited statements
of income and stockholders' equity and cash flow of the Borrower and its
Subsidiaries on a consolidated and consolidating basis reflecting results of
operations from the beginning of the fiscal year to the end of such month and
for such month, prepared on a basis consistent with prior practices and complete
and correct in all material respects, subject to normal and recurring year end
adjustments that individually and in the aggregate are not material to the
Borrower or any of its Subsidiaries' business, and accompanied by comparative
financial statements of the Borrower and its Subsidiaries for the same month and
same fiscal year-to-date period in the prior fiscal year.
 
9.10.        Other Reports.
 
Each Borrower Party shall furnish Agent as soon as available, but in any event
within ten (10) days after the written request of the Agent, with copies of such
financial statements, reports and returns as each Borrower Party shall send to
its stockholders, members or partners, as applicable.
 
9.11.        Additional Information.
 
Each Borrower Party shall furnish Agent with such additional information as
Agent shall reasonably request in order to enable Agent to determine whether the
terms, covenants, provisions and conditions of this Agreement, the Notes and any
other Other Document have been complied with by Loan Parties including, without
the necessity of any request by Agent, (a) at least thirty (30) days prior
thereto, notice of any Borrower Party's opening of any new principal office or
any Borrower Party's closing of any principal office, and (b) promptly upon any
Borrower Party's learning thereof, notice of any labor dispute to which any
Borrower Party may become a party, any strikes or walkouts relating to any of
its plants or other facilities, and the expiration of any labor contract to
which any Borrower Party is a party or by which any Borrower Party is bound.
 
9.12.        Projected Operating Budget.
 
The Borrower shall furnish Agent and Lenders, no later than January 31st of each
fiscal year of the Borrower and its Subsidiaries during the Term a month by
month projected operating budget and cash flow of the Borrower and its
Subsidiaries on a consolidated and consolidating basis for such fiscal year
(including an income statement for each month and a balance sheet as at the end
of the last month in each fiscal quarter), such projections to be accompanied by
a certificate signed by the President or Chief Financial Officer of the Borrower
to the effect that such projections have been prepared on the basis of sound
financial planning practice consistent with past budgets and financial
statements.
 
 
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9.13.        Environmental Matters.
 
 Each Borrower Party shall promptly notify Agent in writing upon the occurrence
of (a) any expenditure (actual or anticipated, individually or in the aggregate
during a fiscal year) in excess of One Hundred Seventy Five Thousand and 00/100
Dollars ($175,000.00) for environmental response, removal or remedial action or
for responses to environmental violations or environmental testing and the
impact of said expenses on the affected Borrower Party's working capital, which
expenditure is not identified in any Phase I or other environmental report
previously delivered to the Agent, and (b) any Borrower Party's receipt of
written notice from any local, state or federal authority advising such Borrower
Party of any environmental liability (real or potential) arising from such
Borrower Party's operations, its owned or leased real property, its
environmental management practices, or off-site waste disposal sites used by
such Borrower Party, which liability could reasonably be expected to result in
expenditures in excess of One Hundred Seventy Five Thousand and 00/100 Dollars
($175,000.00).
 
9.14.        Notice of Suits, Adverse Events.
 
Each Borrower Party shall furnish Agent with prompt written notice of (i) any
lapse or other termination of any Consent issued to any Loan Party by any
Governmental Body or any other Person that could reasonably be expected to have
a Material Adverse Effect, (ii) any refusal by any Governmental Body or any
other Person to renew or extend any such Consent that could reasonably be
expected to have a Material Adverse Effect; and (iii) copies of any periodic or
special reports filed by any Borrower Party with any Governmental Body or
Person, if such reports indicate any material change in the business,
operations, affairs or condition of any Borrower Party, or if copies thereof are
requested by Lender, and (iv) copies of any material notices and other
communications from any Governmental Body or Person which specifically relate to
any Loan Party that could reasonably be expected to have a Material Adverse
Effect.
 
9.15.        ERISA Notices and Requests.
 
Each Borrower Party shall furnish Agent with immediate written notice in the
event that (i) any Borrower Party or any member of the Controlled Group knows or
has reason to know that a Termination Event has occurred, together with a
written statement describing such Termination Event and the action, if any,
which such Borrower Party or any member of the Controlled Group has taken, is
taking, or proposes to take with respect thereto and, when known, any action
taken or threatened by the Internal Revenue Service, Department of Labor or PBGC
with respect thereto, (ii) any  Borrower Party or any member of the Controlled
Group knows or has reason to know that a prohibited transaction (as defined in
Sections 406 of ERISA and 4975 of the Code) has occurred together with a written
statement describing such transaction and the action which such Borrower Party
or any member of the Controlled Group has taken, is taking or proposes to take
with respect thereto, (iii) a funding waiver request has been filed with respect
to any Plan together with all communications received by any Borrower Party or
any member of the Controlled Group with respect to such request, (iv) any
increase in the benefits of any existing Plan or the establishment of any new
Plan or the commencement of contributions to any Plan to which any Borrower
Party or any member of the Controlled Group was not previously contributing
shall occur, (v) any Borrower Party or any member of the Controlled Group shall
receive from the PBGC a notice of intention to terminate a Plan or to have a
trustee appointed to administer a Plan, together with copies of each such
notice, (vi) any Borrower Party or any member of the Controlled Group shall
receive any favorable or unfavorable determination letter from the Internal
Revenue Service regarding the qualification of a Plan under Section 401(a) of
the Code, together with copies of each such letter; (vii) any Borrower Party or
any member of the Controlled Group shall receive a notice regarding the
imposition of withdrawal liability, together with copies of each such notice;
(viii) any Borrower Party or any member of the Controlled Group shall fail to
make a required installment or any other required payment under Section 412 of
the Code on or before the due date for such installment or payment; or (ix) any
Borrower Party or any member of the Controlled Group knows that (a) a
Multiemployer Plan has been terminated, (b) the administrator or plan sponsor of
a Multiemployer Plan intends to terminate a Multiemployer Plan, or (c) the PBGC
has instituted or will institute proceedings under Section 4042 of ERISA to
terminate a Multiemployer Plan.
 
 
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9.16.        Additional Documents.
 
Each Borrower Party shall execute and deliver to Agent, upon request, such
documents and agreements as Agent may, from time to time, reasonably request to
carry out the purposes, terms or conditions of this Agreement.
 
X.            EVENTS OF DEFAULT.
 
The occurrence of any one or more of the following events shall constitute an
"Event of Default":
 
10.1.        Nonpayment.
 
Failure by the Borrower to pay any principal or interest on the Obligations when
due, whether at maturity or by reason of acceleration pursuant to the terms of
this Agreement or by notice of intention to prepay, or by required prepayment or
failure to pay any other liabilities or make any other payment, fee or charge
provided for herein when due or in any Other Document;
 
10.2.        Breach of Representation.
 
Any representation or warranty made or deemed made by any Loan Party in this
Agreement, any Other Document or any related agreement or in any certificate,
document or financial or other statement furnished at any time in connection
herewith or therewith shall prove to have been misleading in any material
respect on the date when made or deemed to have been made;
 
10.3.        Financial Information.
 
Failure by any Loan Party to (i) furnish financial information when due or when
otherwise required to do so pursuant to the terms and conditions of this
Agreement and any of the Other Documents, or (ii) permit the inspection of its
books or records in accordance with this Agreement;
 
10.4.        Judicial Actions.
 
Issuance of a notice of Lien, levy, assessment, injunction or attachment against
the Borrower's Inventory or Receivables or against a material portion of the
Borrower's other property, other than Permitted Encumbrances, which is not
stayed or lifted within thirty (30) days;
 
 
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10.5.        Noncompliance.
 
Except as otherwise provided for in Sections 10.1, 10.3 and 10.5(ii), (i)
failure or neglect of any Loan Party to perform, keep or observe any term,
provision, condition, covenant herein contained, or contained in any Other
Document or any other agreement or arrangement, now or hereafter entered into
between any Loan Party and Agent or any Lender related to the transactions
described herein, or (ii) failure or neglect of any Borrower Party to perform,
keep or observe any term, provision, condition or covenant, contained in
Sections 4.6, 4.7, 4.9, 6.1, 6.3, 6.4, 9.4 or 9.6 hereof which is not cured
within thirty (30) days from the occurrence of such failure or neglect;
 
10.6.        Judgments.
 
Any judgment or judgments are rendered against (a) all Loan Parties (excluding
Holding), collectively, for an aggregate amount in excess of Five Hundred
Thousand and 00/100 Dollars ($500,000.00) or (b) Holding to the extent that the
collective amount of such judgment or judgments, multiplied by 1.25, exceeds the
positive difference between (y) the sum of Unrestricted Cash and Cash
Equivalents of Holding, and (z) Current Liabilities, and, in either case, (i)
enforcement proceedings shall have been commenced by a creditor upon such
judgment, (ii) there shall be any period of thirty (30) consecutive days during
which a stay of enforcement of such judgment, by reason of a pending appeal or
otherwise, shall not be in effect, or (iii) any such judgment results in the
creation of a Lien upon any of the Collateral (other than a Permitted
Encumbrance);
 
10.7.        Bankruptcy.
 
Any Loan Party shall (i) apply for, consent to or suffer the appointment of, or
the taking of possession by, a receiver, custodian, trustee, liquidator or
similar fiduciary of itself or of all or a substantial part of its property,
(ii) make a general assignment for the benefit of creditors, (iii) commence a
voluntary case under any state or federal bankruptcy laws (as now or hereafter
in effect), (iv) be adjudicated a bankrupt or insolvent, (v) file a petition
seeking to take advantage of any other law providing for the relief of debtors,
(vi) acquiesce to, or fail to have dismissed, within thirty (30) days, any
petition filed against it in any involuntary case under such bankruptcy
laws,  or (vii) take any action for the purpose of effecting any of the
foregoing;
 
10.8.        Inability to Pay.
 
Any Loan Party shall admit in writing its inability, or be generally unable, to
pay its debts as they become due or cease operations of its business as
permitted hereunder;
 
 
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10.9.        Affiliate Bankruptcy.
 
Holding or any Borrower Party shall (i) apply for, consent to or suffer the
appointment of, or the taking of possession by, a receiver, custodian, trustee,
liquidator or similar fiduciary of itself or of all or a substantial part of its
property, (ii) admit in writing its inability, or be generally unable, to pay
its debts as they become due or cease operations of its present business, (iii)
make a general assignment for the benefit of creditors, (iv) commence a
voluntary case under any state or federal bankruptcy laws (as now or hereafter
in effect), (v) be adjudicated a bankrupt or insolvent, (vi) file a petition
seeking to take advantage of any other law providing for the relief of debtors,
(vii) acquiesce to, or fail to have dismissed, within thirty (30) days, any
petition filed against it in any involuntary case under such bankruptcy laws, or
(viii) take any action for the purpose of effecting any of the foregoing;
 
10.10.      Material Adverse Effect.
 
Any change in any Loan Party's results of operations or financial condition
which in Agent's opinion has a Material Adverse Effect;
 
10.11.      Lien Priority.
 
Any Lien created hereunder or provided for hereby or under any related agreement
for any reason ceases to be or is not a valid and perfected Lien having a first
priority interest;
 
10.12.      Cross Default - Indebtedness.
 
A default or event of default has occurred under any document relating to any
other Indebtedness of (a) any of the Loan Parties (excluding Holding) in the
aggregate principal amount of Five Hundred Thousand and 00/100 Dollars
($500,000.00) or greater or (b) Holding to the extent that the aggregate
principal amount of Indebtedness under such document or documents, multiplied by
1.25, exceeds the positive difference between (y) the sum of Unrestricted Cash
and Cash Equivalents of Holding, and (z) Current Liabilities, and such default
or event of default consists of the failure to pay (beyond any period of grace
permitted with respect thereto, whether waived or not) any Indebtedness when due
(whether at stated maturity, by acceleration or otherwise) or if such breach or
default permits or causes the acceleration of any Indebtedness (whether or not
such right shall have been waived) or the termination of any commitment to lend;
 
10.13.      Cross Default – Other Agreements.
 
A default of the obligations of (a) any Loan Party (excluding Holding) under any
other agreement to which it is a party shall occur which could reasonably be
expected to have a Material Adverse Effect or (b) Holding to the extent that the
aggregate amount of monetary obligations subject to such default or defaults,
multiplied by 1.25, exceeds the positive difference between (y) the sum of
Unrestricted Cash and Cash Equivalents of Holding, and (z) Current Liabilities
and which default is not cured within any applicable grace period;
 
10.14.      Breach of Guaranty.
 
Termination or breach of any Guaranty or similar agreement executed and
delivered to Agent in connection with the Obligations of any Loan Party, or if
any Guarantor attempts to terminate, challenges the validity of, or its
liability under, any such Guaranty or similar agreement;
 
 
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10.15.      Change of Ownership.
 
Any Change of Ownership shall occur;
 
10.16.      Invalidity.
 
Any material provision of this Agreement or any Other Document shall, for any
reason, cease to be valid and binding on any Loan Party, or any Loan Party shall
so claim in writing to Agent or any Lender;
 
10.17.      Licenses.
 
(i) Any Governmental Body shall (A) revoke, terminate, suspend or adversely
modify any license, permit, patent trademark or tradename of the Borrower, the
continuation of which is material to the continuation of the Borrower's
business, or (B) commence proceedings to suspend, revoke, terminate or adversely
modify any such license, permit, trademark, tradename or patent and such
proceedings shall not be dismissed or discharged within sixty (60) days, or (C)
schedule or conduct a hearing on the renewal of any license, permit, trademark,
tradename or patent necessary for the continuation of the Borrower's business
and the staff of such Governmental Body issues a report recommending the
termination, revocation, suspension or material, adverse modification of such
license, permit, trademark, tradename or patent; (ii) any agreement which is
necessary or material to the operation of the Borrower's business shall be
revoked or terminated and not replaced by a substitute acceptable to Agent
within thirty (30) days after the date of such revocation or termination, and
such revocation or termination and non-replacement would reasonably be expected
to have a Material Adverse Effect;
 
10.18.      Seizures.
 
Any material portion of the Collateral shall be seized or taken by a
Governmental Body, or any Borrower Party or the title and rights of any Borrower
Party which is the owner of any material portion of the Collateral shall have
become the subject matter of claim, litigation, suit or other proceeding which,
in the opinion of Agent, upon final determination, could reasonably be expected
to result in impairment or loss of the security provided by this Agreement or
the Other Documents;
 
10.19.      Holding.
 
At any time, Holding ceases to be a publicly held corporation; or
 
10.20.      Pension Plans.
 
An event or condition specified in Sections 7.15 or 9.15 hereof shall occur or
exist with respect to any Plan and, as a result of such event or condition,
together with all other such events or conditions, any Borrower Party or any
member of the Controlled Group shall incur, or in the opinion of Agent be
reasonably likely to incur, a liability to a Plan or the PBGC (or both) which,
in the reasonable judgment of Agent, would have a Material Adverse Effect.
 
 
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XI.           LENDERS' RIGHTS AND REMEDIES AFTER DEFAULT.
 
11.1.        Rights and Remedies.
 
(a)           Upon the occurrence of (i) an Event of Default pursuant to Section
10.7 all Obligations shall be immediately due and payable and this Agreement and
the obligation of Lenders to make Advances shall be deemed terminated; and, (ii)
any of the other Events of Default and at any time thereafter (such default not
having previously been cured), at the option of Required Lenders all Obligations
shall be immediately due and payable and Lenders shall have the right to
terminate this Agreement and to terminate the obligation of Lenders to make
Advances and (iii) a filing of a petition against any Loan Party in any
involuntary case under any state or federal bankruptcy laws, all Obligations
shall be immediately due and payable and the obligation of Lenders to make
Advances hereunder shall be terminated other than as may be required by an
appropriate order of the bankruptcy court having jurisdiction over such Loan
Party.  Upon the occurrence of any Event of Default, Agent shall have the right
to exercise any and all rights and remedies provided for herein, under the Other
Documents, under the Uniform Commercial Code and at law or equity generally,
including the right to foreclose the security interests granted herein and to
realize upon any Collateral by any available judicial procedure and/or to take
possession of and sell any or all of the Collateral with or without judicial
process.  Agent may enter any of the Borrower's premises or other premises
without legal process and without incurring liability to the Borrower therefor,
and Agent may thereupon, or at any time thereafter, in its discretion without
notice or demand, take the Collateral and remove the same to such place as Agent
may deem advisable and Agent may require the Borrower to make the Collateral
available to Agent at a convenient place.  With or without having the Collateral
at the time or place of sale, Agent may sell the Collateral, or any part
thereof, at public or private sale, at any time or place, in one or more sales,
at such price or prices, and upon such terms, either for cash, credit or future
delivery, as Agent may elect.  Except as to that part of the Collateral which is
perishable or threatens to decline speedily in value or is of a type customarily
sold on a recognized market, Agent shall give the Borrower reasonable
notification of such sale or sales, it being agreed that in all events written
notice mailed to Borrower at least ten (10) days prior to such sale or sales is
reasonable notification.  At any public sale Agent or any Lender may bid for and
become the purchaser, and Agent, any Lender or any other purchaser at any such
sale thereafter shall hold the Collateral sold absolutely free from any claim or
right of whatsoever kind, including any equity of redemption and all such
claims, rights and equities are hereby expressly waived and released by the
Borrower.  In connection with the exercise of the foregoing remedies, including
the sale of Inventory, Agent is granted a perpetual nonrevocable, royalty free,
nonexclusive license and Agent is granted permission to use all of the
Borrower's (a) trademarks, trade styles, trade names, patents, patent
applications, copyrights, service marks, licenses, franchises and other
proprietary rights which are used or useful in connection with Inventory for the
purpose of marketing, advertising for sale and selling or otherwise disposing of
such Inventory and (b) Equipment for the purpose of completing the manufacture
of unfinished goods and, in furtherance of the foregoing grant, to the extent
any such trademarks, trade styles, trade names, patents, patent applications,
copyrights, service marks, licenses, franchises and other proprietary rights
which are used or useful in connection with Inventory for the purpose of
marketing, advertising for sale and selling or otherwise disposing of such
Inventory consist of Excluded Property, or are otherwise not able to be licensed
by the Borrower to the Agent, the Borrower shall use its best commercial efforts
to cause all necessary consents to be given for the  purposes set forth
above.  The cash proceeds realized from the sale of any Collateral shall be
applied to the Obligations in the order set forth in Section 11.5
hereof.  Noncash proceeds will only be applied to the Obligations as they are
converted into cash.  If any deficiency shall arise, Loan Parties shall remain
liable to Agent and Lenders therefor.
 
 
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(b)           To the extent that Applicable Law imposes duties on Agent to
exercise remedies in a commercially reasonable manner, the Borrower acknowledges
and agrees that it is not commercially unreasonable for Agent (i) to fail to
incur expenses reasonably deemed significant by Agent to prepare Collateral for
disposition or otherwise to complete raw material or work in process into
finished goods or other finished products for disposition, (ii) to fail to
obtain third party consents for access to Collateral to be disposed of, or to
obtain or, if not required by other law, to fail to obtain governmental or third
party consents for the collection or disposition of Collateral to be collected
or disposed of, (iii) to fail to exercise collection remedies against Customers
or other Persons obligated on Collateral or to remove Liens on or any adverse
claims against Collateral, (iv) to exercise collection remedies against
Customers and other Persons obligated on Collateral directly or through the use
of collection agencies and other collection specialists, (v) to advertise
dispositions of Collateral through publications or media of general circulation,
whether or not the Collateral is of a specialized nature, (vi) to contact other
Persons, whether or not in the same business as the Borrower, for expressions of
interest in acquiring all or any portion of such Collateral, (vii) to hire one
or more professional auctioneers to assist in the disposition of Collateral,
whether or not the Collateral is of a specialized nature, (viii) to dispose of
Collateral by utilizing internet sites that provide for the auction of assets of
the types included in the Collateral or that have the reasonable capacity of
doing so, or that match buyers and sellers of assets, (ix) to dispose of assets
in wholesale rather than retail markets, (x) to disclaim disposition warranties,
such as title, possession or quiet enjoyment, (xi) to purchase insurance or
credit enhancements to insure Agent against risks of loss, collection or
disposition of Collateral or to provide to Agent a guaranteed return from the
collection or disposition of Collateral, or (xii) to the extent deemed
appropriate by Agent, to obtain the services of other brokers, investment
bankers, consultants and other professionals to assist Agent in the collection
or disposition of any of the Collateral.  The Borrower acknowledges that the
purpose of this Section 11.1(b) is to provide non-exhaustive indications of what
actions or omissions by Agent would not be commercially unreasonable in Agent's
exercise of remedies against the Collateral and that other actions or omissions
by Agent shall not be deemed commercially unreasonable solely on account of not
being indicated in this Section 11.1(b).  Without limitation upon the foregoing,
nothing contained in this Section 11.1(b) shall be construed to grant any rights
to any Loan Party or to impose any duties on Agent that would not have been
granted or imposed by this Agreement or by Applicable Law in the absence of this
Section 11.1(b).
 
11.2.        Agent's Discretion.
 
Agent shall have the right in its sole discretion to determine which rights,
Liens, security interests or remedies Agent may at any time pursue, relinquish,
subordinate, or modify or to take any other action with respect thereto and such
determination will not in any way modify or affect any of Agent's or Lenders'
rights hereunder.
 
 
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11.3.        Setoff.
 
Subject to Section 14.12, in addition to any other rights which Agent or any
Lender may have under Applicable Law, upon the occurrence of an Event of Default
hereunder, Agent and such Lender shall have a right, immediately and without
notice of any kind, to apply any Borrower Party's property held by Agent and
such Lender to reduce the Obligations.
 
11.4.        Rights and Remedies not Exclusive.
 
The enumeration of the foregoing rights and remedies is not intended to be
exhaustive and the exercise of any rights or remedy shall not preclude the
exercise of any other right or remedies provided for herein or otherwise
provided by law, all of which shall be cumulative and not alternative.
 
11.5.        Allocation of Payments After Event of Default.
 
Notwithstanding any other provisions of this Agreement to the contrary, after
the occurrence and during the continuance of an Event of Default, all amounts
collected or received by Agent on account of the Obligations or any other
amounts outstanding under any of the Other Documents or in respect of the
Collateral may, at Agent's discretion, be paid over or delivered as follows:
 
FIRST, to the payment of all reasonable out-of-pocket costs and expenses
(including reasonable attorneys' fees) of Agent in connection with enforcing its
rights and the rights of Lenders under this Agreement and the Other Documents
and any protective advances made by Agent with respect to the Collateral under
or pursuant to the terms of this Agreement;
 
SECOND, to payment of any fees owed to Agent;
 
THIRD, to the payment of all reasonable out-of-pocket costs and expenses
(including reasonable attorneys' fees) of each of Lenders to the extent owing to
such Lender pursuant to the terms of this Agreement;
 
FOURTH, to the payment of all of the Obligations consisting of accrued fees and
interest;
 
FIFTH, to the payment of the outstanding principal amount of the Obligations
(including the payment or cash collateralization of any outstanding Letters of
Credit);
 
SIXTH, to all other Obligations and other obligations which shall have become
due and payable under the Other Documents or otherwise and not repaid pursuant
to clauses "FIRST" through "FIFTH" above; and
 
SEVENTH, to the payment of the surplus, if any, to whoever may be lawfully
entitled to receive such surplus.
 
 
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In carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (ii) each of Lenders shall receive (so long as it is not a
Defaulting Lender) an amount equal to its pro rata share (based on the
proportion that the then outstanding Advances held by such Lender bears to the
aggregate then outstanding Advances) of amounts available to be applied pursuant
to clauses "FOURTH", "FIFTH" and "SIXTH" above; and (iii) to the extent that any
amounts available for distribution pursuant to clause "FIFTH" above are
attributable to the issued but undrawn amount of outstanding Letters of Credit,
such amounts shall be held by Agent in a cash collateral account and applied (A)
first, to reimburse the Issuer from time to time for any drawings under such
Letters of Credit and (B) then, following the expiration of all Letters of
Credit, to all other obligations of the types described in clauses "FIFTH" and
"SIXTH" above in the manner provided in this Section 11.5.
 
XII.          WAIVERS AND JUDICIAL PROCEEDINGS.
 
12.1.        Waiver of Notice.
 
Each Loan Party hereby waives notice of non-payment of any of the Receivables,
demand, presentment, protest and notice thereof with respect to any and all
instruments, notice of acceptance hereof, notice of loans or advances made,
credit extended, Collateral received or delivered, or any other action taken in
reliance hereon, and all other demands and notices of any description, except
such as are expressly provided for herein.
 
12.2.        Delay.
 
No delay or omission on Agent's or any Lender's part in exercising any right,
remedy or option shall operate as a waiver of such or any other right, remedy or
option or of any Default or Event of Default.
 
12.3.        Jury Waiver.
 
EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY
OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING UNDER THIS AGREEMENT
OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH, OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL
TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT
OR TORT OR OTHERWISE AND EACH PARTY HEREBY CONSENTS THAT ANY SUCH CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND
THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENTS OF THE PARTIES
HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
 
 
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XIII.        EFFECTIVE DATE AND TERMINATION.
 
13.1.        Term.
 
This Agreement, which shall inure to the benefit of and shall be binding upon
the respective successors and permitted assigns of each Loan Party, Agent and
each Lender, shall become effective on the date hereof and shall continue in
full force and effect until September 28, 2016 (the "Term") unless sooner
terminated as herein provided.  Borrower may terminate this Agreement at any
time upon ninety (90) days' prior written notice upon payment in full of the
Obligations.
 
13.2.        Termination.
 
The termination of the Agreement shall not affect any Loan Party's, Agent's or
any Lender's rights, or any of the Obligations having their inception prior to
the effective date of such termination, and the provisions hereof shall continue
to be fully operative until all transactions entered into, rights or interests
created or Obligations have been fully and indefeasibly paid, disposed of,
concluded or liquidated.  The security interests, Liens and rights granted to
Agent and Lenders hereunder and the financing statements filed hereunder shall
continue in full force and effect, notwithstanding the termination of this
Agreement or the fact that Borrower's Account may from time to time be
temporarily in a zero or credit position, until all of the Obligations of the
Borrower have been indefeasibly paid and performed in full after the termination
of this Agreement or the Borrower has furnished Agent and Lenders with an
indemnification satisfactory to Agent and Lenders with respect
thereto.  Accordingly, the Borrower waives any rights which it may have under
the Uniform Commercial Code to demand the filing of termination statements with
respect to the Collateral, and Agent shall not be required to send such
termination statements to the Borrower, or to file them with any filing office,
unless and until this Agreement shall have been terminated in accordance with
its terms and all Obligations have been indefeasibly paid in full in immediately
available funds.  All representations, warranties, covenants, waivers and
agreements contained herein shall survive termination hereof until all
Obligations are indefeasibly paid and performed in full.
 
XIV.        REGARDING AGENT.
 
14.1.        Appointment.
 
Each Lender hereby designates PNC to act as Agent for such Lender under this
Agreement and the Other Documents.  Each Lender hereby irrevocably authorizes
Agent to take such action on its behalf under the provisions of this Agreement
and the Other Documents and to exercise such powers and to perform such duties
hereunder and thereunder as are specifically delegated to or required of Agent
by the terms hereof and thereof and such other powers as are reasonably
incidental thereto and Agent shall hold all Collateral, payments of principal
and interest, fees (except the fees set forth in the Fee Letter), charges and
collections (without giving effect to any collection days) received pursuant to
this Agreement, for the ratable benefit of Lenders.  Agent may perform any of
its duties hereunder by or through its agents or employees.  As to any matters
not expressly provided for by this Agreement (including collection of the Notes)
Agent shall not be required to exercise any discretion or take any action, but
shall be required to act or to refrain from acting (and shall be fully protected
in so acting or refraining from acting) upon the instructions of the Required
Lenders, and such instructions shall be binding; provided, however, that Agent
shall not be required to take any action which exposes Agent to liability or
which is contrary to this Agreement or the Other Documents or Applicable Law
unless Agent is furnished with an indemnification reasonably satisfactory to
Agent with respect thereto.
 
 
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14.2.        Nature of Duties.
 
Agent shall have no duties or responsibilities except those expressly set forth
in this Agreement and the Other Documents.  Neither Agent nor any of its
officers, directors, employees or agents shall be (i) liable for any action
taken or omitted by them as such hereunder or in connection herewith, unless
caused by their gross (not mere) negligence or willful misconduct (as determined
by a court of competent jurisdiction in a final non-appealable judgment), or
(ii) responsible in any manner for any recitals, statements, representations or
warranties made by any Loan Party or any officer thereof contained in this
Agreement, or in any of the Other Documents or in any certificate, report,
statement or other document referred to or provided for in, or received by Agent
under or in connection with, this Agreement or any of the Other Documents or for
the value, validity, effectiveness, genuineness, due execution, enforceability
or sufficiency of this Agreement, or any of the Other Documents or for any
failure of any Loan Party to perform its obligations hereunder.  Agent shall not
be under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any of the Other Documents, or to inspect the properties,
books or records of any Loan Party.  The duties of Agent as respects the
Advances to Borrower shall be mechanical and administrative in nature; Agent
shall not have by reason of this Agreement a fiduciary relationship in respect
of any Lender; and nothing in this Agreement, expressed or implied, is intended
to or shall be so construed as to impose upon Agent any obligations in respect
of this Agreement except as expressly set forth herein.
 
14.3.        Lack of Reliance on Agent and Resignation.
 
Independently and without reliance upon Agent or any other Lender, each Lender
has made and shall continue to make (i) its own independent investigation of the
financial condition and affairs of each Loan Party in connection with the making
and the continuance of the Advances hereunder and the taking or not taking of
any action in connection herewith, and (ii) its own appraisal of the
creditworthiness of each Loan Party.  Agent shall have no duty or
responsibility, either initially or on a continuing basis, to provide any Lender
with any credit or other information with respect thereto, whether coming into
its possession before making of the Advances or at any time or times thereafter
except as shall be provided by any Loan Party pursuant to the terms
hereof.  Agent shall not be responsible to any Lender for any recitals,
statements, information, representations or warranties herein or in any
agreement, document, certificate or a statement delivered in connection with or
for the execution, effectiveness, genuineness, validity, enforceability,
collectibility or sufficiency of this Agreement or any Other Document, or of the
financial condition of any Loan Party, or be required to make any inquiry
concerning either the performance or observance of any of the terms, provisions
or conditions of this Agreement, the Notes, the other Other Documents or the
financial condition of any Loan Party, or the existence of any Event of Default
or any Default.
 
 
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Agent may resign on sixty (60) days' written notice to each of Lenders and
Borrower and upon such resignation, the Required Lenders will promptly designate
a successor Agent reasonably satisfactory to Loan Parties.
 
Any such successor Agent shall succeed to the rights, powers and duties of
Agent, and the term "Agent" shall mean such successor agent effective upon its
appointment, and the former Agent's rights, powers and duties as Agent shall be
terminated, without any other or further act or deed on the part of such former
Agent.  After any Agent's resignation as Agent, the provisions of this Article
XIV shall inure to its benefit as to any actions taken or omitted to be taken by
it while it was Agent under this Agreement.
 
14.4.        Certain Rights of Agent.
 
If Agent shall request instructions from Lenders with respect to any act or
action (including failure to act) in connection with this Agreement or any Other
Document, Agent shall be entitled to refrain from such act or taking such action
unless and until Agent shall have received instructions from the Required
Lenders; and Agent shall not incur liability to any Person by reason of so
refraining.  Without limiting the foregoing, Lenders shall not have any right of
action whatsoever against Agent as a result of its acting or refraining from
acting hereunder in accordance with the instructions of the Required Lenders.
 
14.5.        Reliance.
 
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any note, writing, resolution, notice, statement, certificate, telex, teletype
or telecopier message, cablegram, order or other document or telephone message
believed by it to be genuine and correct and to have been signed, sent or made
by the proper person or entity, and, with respect to all legal matters
pertaining to this Agreement and the Other Documents and its duties hereunder,
upon advice of counsel selected by it.  Agent may employ agents and
attorneys-in-fact and shall not be liable for the default or misconduct of any
such agents or attorneys-in-fact selected by Agent with reasonable care.
 
14.6.        Notice of Default.
 
Agent shall not be deemed to have knowledge or notice of the occurrence of any
Default or Event of Default hereunder or under the Other Documents, unless Agent
has received notice from a Lender or Borrower referring to this Agreement or the
Other Documents, describing such Default or Event of Default and stating that
such notice is a "notice of default".  In the event that Agent receives such a
notice, Agent shall give notice thereof to Lenders.  Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders; provided, that, unless and until Agent shall
have received such directions, Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests of Lenders.
 
 
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14.7.        Indemnification.
 
To the extent Agent is not reimbursed and indemnified by Loan Parties, each
Lender will reimburse and indemnify Agent in proportion to its respective
portion of the Advances (or, if no Advances are outstanding, according to its
Commitment Percentage), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by or asserted against Agent in performing its duties hereunder, or in any way
relating to or arising out of this Agreement or any Other Document; provided
that, Lenders shall not be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from Agent's gross (not mere) negligence or
willful misconduct (as determined by a court of competent jurisdiction in a
final non-appealable judgment).
 
14.8.        Agent in its Individual Capacity.
 
With respect to the obligation of Agent to lend under this Agreement, the
Advances made by it shall have the same rights and powers hereunder as any other
Lender and as if it were not performing the duties as Agent specified herein;
and the term "Lender" or any similar term shall, unless the context clearly
otherwise indicates, include Agent in its individual capacity as a
Lender.  Agent may engage in business with any Loan Party as if it were not
performing the duties specified herein, and may accept fees and other
consideration from any Loan Party for services in connection with this Agreement
or otherwise without having to account for the same to Lenders.
 
14.9.        Delivery of Documents.
 
To the extent Agent receives financial statements required under Sections 9.7,
9.8, 9.9,  9.12 and 9.13 or Borrowing Base Certificates from the Borrower
pursuant to the terms of this Agreement which the Borrower is not obligated to
deliver to each Lender, Agent will promptly furnish such documents and
information to Lenders.
 
14.10.      Borrower's Undertaking to Agent.
 
Without prejudice to their respective obligations to Lenders under the other
provisions of this Agreement, the Borrower hereby undertakes with Agent to pay
to Agent from time to time on demand all amounts from time to time due and
payable by it for the account of Agent or Lenders or any of them pursuant to
this Agreement to the extent not already paid.  Any payment made pursuant to any
such demand shall pro tanto satisfy the relevant Borrower's obligations to make
payments for the account of Lenders or the relevant one or more of them pursuant
to this Agreement.
 
14.11.      No Reliance on Agent's Customer Identification Program.
 
Each Lender acknowledges and agrees that neither such Lender, nor any of its
Affiliates, participants or assignees, may rely on Agent to carry out such
Lender's, Affiliate's, participant's or assignee's customer identification
program, or other obligations required or imposed under or pursuant to the USA
PATRIOT Act or the regulations thereunder, including the regulations contained
in 31 CFR 103.121 (as hereafter amended or replaced, the "CIP Regulations"), or
any other Anti-Terrorism Law, including any programs involving any of the
following items relating to or in connection with any Loan Party, its Affiliates
or its agents, this Agreement, the Other Documents or the transactions hereunder
or contemplated hereby: (1) any identity verification procedures, (2) any
record-keeping, (3) comparisons with government lists, (4) customer notices or
(5) other procedures required under the CIP Regulations or such other laws.
 
 
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14.12.      Other Agreements.
 
Each Lender agrees that it shall not, without the express consent of Agent, and
that it shall, to the extent it is lawfully entitled to do so, upon the request
of Agent, set off against the Obligations, any amounts owing by such Lender to
any Loan Party or any deposit accounts of any Loan Party now or hereafter
maintained with such Lender.  Anything in this Agreement to the contrary
notwithstanding, each Lender further agrees that it shall not, unless
specifically requested to do so by Agent, take any action to protect or enforce
its rights arising out of this Agreement or the Other Documents, it being the
intent of Lenders that any such action to protect or enforce rights under this
Agreement and the Other Documents shall be taken in concert and at the direction
or with the consent of Agent or Required Lenders.
 
XV.         MISCELLANEOUS.
 
15.1.        Governing Law.
 
This Agreement shall be governed by and construed in accordance with the laws of
the Commonwealth of Pennsylvania applied to contracts to be performed wholly
within the Commonwealth of Pennsylvania.  Any judicial proceeding brought by or
against any Loan Party with respect to any of the Obligations, this Agreement,
the Other Documents or any related agreement may be brought in any court of
competent jurisdiction in the Commonwealth of Pennsylvania, United States of
America, and, by execution and delivery of this Agreement, each Loan Party
accepts for itself and in connection with its properties, generally and
unconditionally, the non-exclusive jurisdiction of the aforesaid courts, and
irrevocably agrees to be bound by any judgment rendered thereby in connection
with this Agreement.  Each Loan Party hereby waives personal service of any and
all process upon it and consents that all such service of process may be made by
registered mail (return receipt requested) directed to Borrower at its address
set forth in Section 15.6 and service so made shall be deemed completed five (5)
days after the same shall have been so deposited in the mails of the United
States of America, or, at Agent's option, by service upon Borrower which each
Loan Party irrevocably appoints as the Borrower's Agent for the purpose of
accepting service within the Commonwealth of Pennsylvania.  Nothing herein shall
affect the right to serve process in any manner permitted by law or shall limit
the right of Agent or any Lender to bring proceedings against any Loan Party in
the courts of any other jurisdiction.  Each Loan Party waives any objection to
jurisdiction and venue of any action instituted hereunder and shall not assert
any defense based on lack of jurisdiction or venue or based upon forum non
conveniens.  Each Loan Party waives the right to remove any judicial proceeding
brought against such Loan Party in any state court to any federal court.  Any
judicial proceeding by any Loan Party against Agent or any Lender involving,
directly or indirectly, any matter or claim in any way arising out of, related
to or connected with this Agreement or any related agreement, shall be brought
only in a federal or state court located in the County of Allegheny,
Commonwealth of Pennsylvania.
 
 
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15.2.        Entire Understanding.
 
(a)           This Agreement and the documents executed concurrently herewith
contain the entire understanding between each Loan Party, Agent and each Lender
and supersedes all prior agreements and understandings, if any, relating to the
subject matter hereof.  Any promises, representations, warranties or guarantees
not herein contained and hereinafter made shall have no force and effect unless
in writing, signed by each Loan Party's, Agent's and each Lender's respective
officers.  Neither this Agreement nor any portion or provisions hereof may be
changed, modified, amended, waived, supplemented, discharged, cancelled or
terminated orally or by any course of dealing, or in any manner other than by an
agreement in writing, signed by the party to be charged.  Each Loan Party
acknowledges that it has been advised by counsel in connection with the
execution of this Agreement and Other Documents and is not relying upon oral
representations or statements inconsistent with the terms and provisions of this
Agreement.
 
(b)           The Required Lenders, Agent with the consent in writing of the
Required Lenders, and Loan Parties may, subject to the provisions of this
Section 15.2(b), from time to time enter into written supplemental agreements to
this Agreement or the Other Documents executed by Loan Parties, for the purpose
of adding or deleting any provisions or otherwise changing, varying or waiving
in any manner the rights of Lenders, Agent or Loan Parties thereunder or the
conditions, provisions or terms thereof or waiving any Event of Default
thereunder, but only to the extent specified in such written agreements;
provided, however, that no such supplemental agreement shall, without the
consent of all Lenders:
 
(i)           increase the Commitment Percentage, the maximum dollar commitment
of any Lender or the Maximum Revolving Advance Amount.
 
(ii)           extend the maturity of any Note or the due date for any amount
payable hereunder, or decrease the rate of interest or reduce any fee payable by
Loan Parties to Lenders pursuant to this Agreement.
 
(iii)           alter the definition of the term Required Lenders or alter,
amend or modify this Section 15.2(b).
 
(iv)           release any Collateral during any calendar year (other than in
accordance with the provisions of this Agreement) having an aggregate value in
excess of Two Hundred Fifty Thousand and 00/100 Dollars ($250,000.00).
 
(v)           change the rights and duties of Agent.
 
(vi)           permit any Advance to be made or issued if after giving effect
thereto the total of Advances outstanding hereunder would exceed the Formula
Amount for more than sixty (60) consecutive Business Days or exceed one hundred
ten percent (110%) of the Formula Amount.
 
 
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(vii)           increase the Advance Rates above the Advance Rates in effect on
the Closing Date.
 
(viii)           release any Guarantor.
 
Any such supplemental agreement shall apply equally to each Lender and shall be
binding upon Loan Parties, Lenders and Agent and all future holders of the
Obligations.  In the case of any waiver, Loan Parties, Agent and Lenders shall
be restored to their former positions and rights, and any Event of Default
waived shall be deemed to be cured and not continuing, but no waiver of a
specific Event of Default shall extend to any subsequent Event of Default
(whether or not the subsequent Event of Default is the same as the Event of
Default which was waived), or impair any right consequent thereon.
 
In the event that Agent requests the consent of a Lender pursuant to this
Section 15.2 and such consent is denied, then PNC may, at its option, require
such Lender to assign its interest in the Advances to PNC or to another Lender
or to any other Person designated by Agent (the "Designated Lender"), for a
price equal to (i) the then outstanding principal amount thereof plus (ii)
accrued and unpaid interest and fees due such Lender, which interest and fees
shall be paid when collected from Borrower.  In the event PNC elects to require
any Lender to assign its interest to PNC or to the Designated Lender, PNC will
so notify such Lender in writing within forty five (45) days following such
Lender's denial, and such Lender will assign its interest to PNC or the
Designated Lender no later than five (5) days following receipt of such notice
pursuant to a Commitment Transfer Supplement executed by such Lender, PNC or the
Designated Lender, as appropriate, and Agent.
 
Notwithstanding (a) the existence of a Default or an Event of Default, (b) that
any of the other applicable conditions precedent set forth in Section 8.2 hereof
have not been satisfied or (c) any other provision of this Agreement, Agent may
at its discretion and without the consent of the Required Lenders, voluntarily
permit the sum of the outstanding Revolving Advances and the Maximum Undrawn
Amount at any time to exceed the Formula Amount hereof at such time by up to
ten percent (10%) of the Formula Amount for up to sixty (60) consecutive
Business Days (the "Out-of-Formula Loans"); provided, that, such outstanding
Advances do not exceed the Maximum Revolving Advance Amount.  If Agent is
willing in its sole and absolute discretion to make such Out-of-Formula Loans,
such Out-of-Formula Loans shall be payable on demand and shall bear interest at
the Default Rate for Revolving Advances consisting of Domestic Rate Loans;
provided that, if Lenders do make Out-of-Formula Loans, neither Agent nor
Lenders shall be deemed thereby to have changed the limits of Section
2.1(a).  For purposes of this paragraph, the discretion granted to Agent
hereunder shall not preclude involuntary overadvances that may result from time
to time due to the fact that the Formula Amount was unintentionally exceeded for
any reason, including Collateral previously deemed to be "Eligible Inventory",
or "Eligible Receivable", as applicable, becomes ineligible, collections of
Receivables applied to reduce outstanding Revolving Advances are thereafter
returned for insufficient funds or overadvances are made to protect or preserve
the Collateral.  In the event Agent involuntarily permits the outstanding
Revolving Advances to exceed the Formula Amount by more than ten percent (10%),
Agent shall use its efforts to have Borrower decrease such excess in as
expeditious a manner as is practicable under the circumstances and not
inconsistent with the reason for such excess.  Revolving Advances made after
Agent has determined the existence of involuntary overadvances shall be deemed
to be involuntary overadvances and shall be decreased in accordance with the
preceding sentence.
 
 
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In addition to (and not in substitution of) the discretionary Revolving Advances
permitted above in this Section 15.2, Agent is hereby authorized by Loan Parties
and Lenders, from time to time in Agent's sole discretion, (A) after the
occurrence and during the continuation of a Default or an Event of Default, or
(B) at any time that any of the other applicable conditions precedent set forth
in Section 8.2 hereof have not been satisfied, to make Revolving Advances to
Borrower on behalf of Lenders which Agent, in its reasonable business judgment,
deems necessary or desirable (a) to preserve or protect the Collateral, or any
portion thereof, (b) to enhance the likelihood of, or maximize the amount of,
repayment of the Advances and other Obligations, or (c) to pay any other amount
chargeable to Borrower pursuant to the terms of this Agreement; provided, that
at any time after giving effect to any such Revolving Advances the outstanding
Revolving Advances do not exceed one hundred percent (100%) of the Formula
Amount.
 
15.3.        Successors and Assigns; Participations; New Lenders.
 
(a)           This Agreement shall be binding upon and inure to the benefit of
Loan Parties, Agent, each Lender, all future holders of the Obligations and
their respective successors and permitted assigns, except that no Loan Party may
assign or transfer any of its rights or obligations under this Agreement without
the prior written consent of Agent and each Lender.
 
(b)           Each Loan Party acknowledges that in the regular course of
commercial banking business one or more Lenders may at any time and from time to
time sell participating interests in the Advances to other financial
institutions (each such transferee or purchaser of a participating interest, a
"Participant").  Each Participant may exercise all rights of payment (including
rights of set-off) with respect to the portion of such Advances held by it or
other Obligations payable hereunder as fully as if such Participant were the
direct holder thereof provided that Borrower shall not be required to pay to any
Participant more than the amount which it would have been required to pay to
Lender which granted an interest in its Advances or other Obligations payable
hereunder to such Participant had such Lender retained such interest in the
Advances hereunder or other Obligations payable hereunder and in no event shall
Borrower be required to pay any such amount arising from the same circumstances
and with respect to the same Advances or other Obligations payable hereunder to
both such Lender and such Participant.  Each Loan Party hereby grants to any
Participant a continuing security interest in any deposits, moneys or other
property actually or constructively held by such Participant as security for the
Participant's interest in the Advances.
 
(c)           Any Lender, with the consent of Agent which shall not be
unreasonably withheld or delayed, may sell, assign or transfer all or any part
of its rights and obligations under or relating to Revolving Advances under this
Agreement and the Other Documents to one or more additional banks or financial
institutions and one or more additional banks or financial institutions may
commit to make Advances hereunder (each a "Purchasing Lender"), in minimum
amounts of not less than Five Million and 00/100 Dollars ($5,000,000.00),
pursuant to a Commitment Transfer Supplement, executed by a Purchasing Lender,
the transferor Lender, and Agent and delivered to Agent for recording.  Upon
such execution, delivery, acceptance and recording, from and after the transfer
effective date determined pursuant to such Commitment Transfer Supplement, (i)
Purchasing Lender thereunder shall be a party hereto and, to the extent provided
in such Commitment Transfer Supplement, have the rights and obligations of a
Lender thereunder with a Commitment Percentage as set forth therein, and (ii)
the transferor Lender thereunder shall, to the extent provided in such
Commitment Transfer Supplement, be released from its obligations under this
Agreement, the Commitment Transfer Supplement creating a novation for that
purpose.  Such Commitment Transfer Supplement shall be deemed to amend this
Agreement to the extent, and only to the extent, necessary to reflect the
addition of such Purchasing Lender and the resulting adjustment of the
Commitment Percentages arising from the purchase by such Purchasing Lender of
all or a portion of the rights and obligations of such transferor Lender under
this Agreement and the Other Documents.  Each Loan Party hereby consents to the
addition of such Purchasing Lender and the resulting adjustment of the
Commitment Percentages arising from the purchase by such Purchasing Lender of
all or a portion of the rights and obligations of such transferor Lender under
this Agreement and the Other Documents.  Loan Parties shall execute and deliver
such further documents and do such further acts and things in order to
effectuate the foregoing.
 
 
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(d)           Any Lender, with the consent of Agent which shall not be
unreasonably withheld or delayed, may directly or indirectly sell, assign or
transfer all or any portion of its rights and obligations under or relating to
Revolving Advances under this Agreement and the Other Documents to an entity,
whether a corporation, partnership, trust, limited liability company or other
entity that (i) is engaged in making, purchasing, holding or otherwise investing
in bank loans and similar extensions of credit in the ordinary course of its
business and (ii) is administered, serviced or managed by the assigning Lender
or an Affiliate of such Lender (a "Purchasing CLO" and together with each
Participant and Purchasing Lender, each a "Transferee" and collectively the
"Transferees"), pursuant to a Commitment Transfer Supplement modified as
appropriate to reflect the interest being assigned ("Modified Commitment
Transfer Supplement"), executed by any intermediate purchaser, the Purchasing
CLO, the transferor Lender, and Agent as appropriate and delivered to Agent for
recording.  Upon such execution and delivery, from and after the transfer
effective date determined pursuant to such Modified Commitment Transfer
Supplement, (i) Purchasing CLO thereunder shall be a party hereto and, to the
extent provided in such Modified Commitment Transfer Supplement, have the rights
and obligations of a Lender thereunder and (ii) the transferor Lender thereunder
shall, to the extent provided in such Modified Commitment Transfer Supplement,
be released from its obligations under this Agreement, the Modified Commitment
Transfer Supplement creating a novation for that purpose.  Such Modified
Commitment Transfer Supplement shall be deemed to amend this Agreement to the
extent, and only to the extent, necessary to reflect the addition of such
Purchasing CLO.  Each Loan Party hereby consents to the addition of such
Purchasing CLO.  Loan Parties shall execute and deliver such further documents
and do such further acts and things in order to effectuate the foregoing.
 
(e)           Agent shall maintain at its address a copy of each Commitment
Transfer Supplement and Modified Commitment Transfer Supplement delivered to it
and a register (the "Register") for the recordation of the names and addresses
of each Lender and the outstanding principal, accrued and unpaid interest and
other fees due hereunder.  The entries in the Register shall be conclusive, in
the absence of manifest error, and the Borrower, Agent and Lenders may treat
each Person whose name is recorded in the Register as the owner of the Advance
recorded therein for the purposes of this Agreement.  The Register shall be
available for inspection by Borrower or any Lender at any reasonable time and
from time to time upon reasonable prior notice.  Agent shall receive a fee in
the amount of Three Thousand Five Hundred and 00/100 Dollars ($3,500.00) payable
by the applicable Purchasing Lender and/or Purchasing CLO upon the effective
date of each transfer or assignment (other than to an intermediate purchaser) to
such Purchasing Lender and/or Purchasing CLO.
 
 
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(f)           Each Loan Party authorizes each Lender to disclose to any
Transferee and any prospective Transferee any and all financial information in
such Lender's possession concerning such Loan Party which has been delivered to
such Lender by or on behalf of such Loan Party pursuant to this Agreement or in
connection with such Lender's credit evaluation of such Loan Party.
 
15.4.        Application of Payments.
 
Agent shall have the continuing and exclusive right to apply or reverse and
re-apply any payment and any and all proceeds of Collateral to any portion of
the Obligations.  To the extent that any Loan Party makes a payment or Agent or
any Lender receives any payment or proceeds of the Collateral for any Loan
Party's benefit, which are subsequently invalidated, declared to be fraudulent
or preferential, set aside or required to be repaid to a trustee, debtor in
possession, receiver, custodian or any other party under any bankruptcy law,
common law or equitable cause, then, to such extent, the Obligations or part
thereof intended to be satisfied shall be revived and continue as if such
payment or proceeds had not been received by Agent or such Lender.
 
15.5.        Indemnity.
 
Each Loan Party shall indemnify Agent, each Lender and each of their respective
officers, directors, Affiliates, attorneys, employees and agents from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses and disbursements of any kind or
nature whatsoever (including fees and disbursements of counsel) which may be
imposed on, incurred by, or asserted against Agent or any Lender in any claim,
litigation, proceeding or investigation instituted or conducted by any
Governmental Body or instrumentality or any other Person with respect to any
aspect of, or any transaction contemplated by, or referred to in, or any matter
related to, this Agreement or the Other Documents, whether or not Agent or any
Lender is a party thereto, except to the extent that any of the foregoing arises
out of the willful misconduct or gross negligence of the party being indemnified
(as determined by a court of competent jurisdiction in a final and
non-appealable judgment).  Additionally, if any taxes (excluding taxes imposed
upon or measured solely by the net income of Agent and Lenders, but including
any intangibles taxes, stamp tax, recording tax or franchise tax) shall be
payable by Agent, Lenders or Loan Parties on account of the execution or
delivery of this Agreement, or the execution, delivery, issuance or recording of
any of the Other Documents, or the creation or repayment of any of the
Obligations hereunder, by reason of any Applicable Law now or hereafter in
effect, Loan Parties will pay (or will promptly reimburse Agent and Lenders for
payment of) all such taxes, including interest and penalties thereon, and will
indemnify and hold the indemnitees described above in this Section 15.5 harmless
from and against all liability in connection therewith.
 
 
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15.6.        Notice.
 
Any notice or request hereunder may be given to Borrower or any Loan Party or to
Agent or any Lender at their respective addresses set forth below or at such
other address as may hereafter be specified in a notice designated as a notice
of change of address under this Section 15.6.  Any notice, request, demand,
direction or other communication (for purposes of this Section 15.6 only, a
"Notice") to be given to or made upon any party hereto under any provision of
this Loan Agreement shall be given or made by telephone or in writing (which
includes by means of electronic transmission (i.e., "e-mail") or facsimile
transmission or by setting forth such Notice on a site on the World Wide Web (a
"Website Posting") if Notice of such Website Posting (including the information
necessary to access such site) has previously been delivered to the applicable
parties hereto by another means set forth in this Section 15.6) in accordance
with this Section 15.6.  Any such Notice must be delivered to the applicable
parties hereto at the addresses and numbers set forth under their respective
names on Section 15.6 hereof or in accordance with any subsequent unrevoked
Notice from any such party that is given in accordance with this Section
15.6.  Any Notice shall be effective:
 
(a)           In the case of hand-delivery, when delivered;
 
(b)           If given by mail, four days after such Notice is deposited with
the United States Postal Service, with first-class postage prepaid, return
receipt requested;
 
(c)           In the case of a telephonic Notice, when a party is contacted by
telephone, if delivery of such telephonic Notice is confirmed no later than the
next Business Day by hand delivery, a facsimile or electronic transmission, a
Website Posting or an overnight courier delivery of a confirmatory Notice
(received at or before noon on such next Business Day);
 
(d)           In the case of a facsimile transmission, when sent to the
applicable party's facsimile machine's telephone number, if the party sending
such Notice receives confirmation of the delivery thereof from its own facsimile
machine;
 
(e)           In the case of electronic transmission, when actually received;
 
(f)           In the case of a Website Posting, upon delivery of a Notice of
such posting (including the information necessary to access such site) by
another means set forth in this Section 15.6; and
 
(g)           If given by any other means (including by overnight courier), when
actually received.
 
Any Lender giving a Notice to Borrower or any Loan Party shall concurrently send
a copy thereof to Agent, and Agent shall promptly notify the other Lenders of
its receipt of such Notice.
 
 
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(A)          If to Agent or PNC at:
 
PNC Bank, National Association
Three PNC Plaza, 6th Floor
225 Fifth Avenue
Pittsburgh, Pennsylvania  15222
Attention:         Douglas Hoffman,
Telephone:       (412) 768-1333
Facsimile:          (412) 768-4369

with an additional copy to:

Thorp Reed & Armstrong LLP
One Oxford Centre
301 Grant Street, 14th Floor
Pittsburgh, PA  15219-1425
Attention:         Sean M. Girdwood
Telephone:       (412) 394-2567
Facsimile:          (412) 394-2555
 
(B)          If to a Lender other than Agent, as specified on the signature
pages hereof.
 
(C)          If to Borrower or any Loan Party:
 
Horsehead Corporation
4955 Steubenville Pike, Suite 405
Pittsburgh, Pennsylvania 15205
Attention:         Robert Scherich
Telephone:       (724) 773-9000
Facsimile:          (724) 774-4348

with a copy to:

Buchanan Ingersoll & Rooney P.C.
One Oxford Centre, 20th Floor
Pittsburgh, Pennsylvania 15219-1040
Attention:         Jason A. D'Amico, Esquire
Telephone:       412-392-2152
Facsimile:          412-562-1041
 
15.7.        Survival.
 
The obligations of Loan Parties under Sections 2.2(f), 3.7, 3.8, 3.9, 4.19(b)
and 15.5 and the obligations of Lenders under Section 14.7, shall survive
termination of this Agreement and the Other Documents and payment in full of the
Obligations for a period of five (5) years.
 
 
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15.8.        Severability.
 
If any part of this Agreement is contrary to, prohibited by, or deemed invalid
under Applicable Laws, such provision shall be inapplicable and deemed omitted
to the extent so contrary, prohibited or invalid, but the remainder hereof shall
not be invalidated thereby and shall be given effect so far as possible.
 
15.9.        Expenses.
 
All costs and expenses including reasonable attorneys' fees and disbursements
incurred by Agent on its behalf or on behalf of Lenders (a) in all efforts made
to enforce payment of any Obligation or effect collection of any Collateral, or
(b) in connection with the entering into, modification, amendment,
administration and enforcement of this Agreement and any Other Document or any
consents or waivers hereunder or thereunder and all related agreements,
documents and instruments, or (c) in instituting, maintaining, preserving,
enforcing and foreclosing on Agent's security interest in or Lien on any of the
Collateral, or maintaining, preserving or enforcing any of Agent's or any
Lender's rights hereunder and under any Other Document and under all related
agreements, documents and instruments, whether through judicial proceedings or
otherwise, or (d) in defending or prosecuting any actions or proceedings arising
out of or relating to Agent's or any Lender's transactions with any Loan Party
and any third party that is a party to any Other Document or (e) in connection
with any advice given to Agent or any Lender with respect to its rights and
obligations under this Agreement and any Other Document and all related
agreements, documents and instruments, may be charged to Borrower's Account and
shall be part of the Obligations.
 
15.10.      Injunctive Relief.
 
Each Loan Party recognizes that, in the event any Loan Party fails to perform,
observe or discharge any of its obligations or liabilities under this Agreement,
or threatens to fail to perform, observe or discharge such obligations or
liabilities, any remedy at law may prove to be inadequate relief to Lenders;
therefore, Agent, if Agent so requests, shall be entitled to temporary and
permanent injunctive relief in any such case without the necessity of proving
that actual damages are not an adequate remedy.
 
15.11.      Consequential Damages.
 
Neither Agent nor any Lender, nor any agent or attorney for any of them, shall
be liable to any Loan Party (or any Affiliate of any such Person) for indirect,
punitive, exemplary or consequential damages arising from any breach of
contract, tort or other wrong relating to the establishment, administration or
collection of the Obligations or as a result of any transaction contemplated
under this Agreement or any Other Document.
 
15.12.      Captions.
 
The captions at various places in this Agreement are intended for convenience
only and do not constitute and shall not be interpreted as part of this
Agreement.
 
 
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15.13.      Counterparts; Facsimile Signatures.
 
This Agreement may be executed in any number of and by different parties hereto
on separate counterparts, all of which, when so executed, shall be deemed an
original, but all such counterparts shall constitute one and the same
agreement.  Any signature delivered by a party by facsimile transmission shall
be deemed to be an original signature hereto.
 
15.14.      Construction.
 
The parties acknowledge that each party and its counsel have reviewed this
Agreement and that the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of this Agreement or any amendments, schedules or exhibits
thereto.
 
15.15.      Confidentiality; Sharing Information.
 
Agent, each Lender and each Transferee shall hold all non-public information
obtained by Agent, such Lender or such Transferee pursuant to the requirements
of this Agreement in accordance with Agent's, such Lender's and such
Transferee's customary procedures for handling confidential information of this
nature; provided, however, Agent, each Lender and each Transferee may disclose
such confidential information (a) to its examiners, Affiliates, outside
auditors, counsel and other professional advisors, (b) to Agent, any Lender or
to any prospective Transferees, and (c) as required or requested by any
Governmental Body or representative thereof or pursuant to legal process;
provided, further that (i) unless specifically prohibited by Applicable Law,
Agent, each Lender and each Transferee shall use its reasonable best efforts
prior to disclosure thereof, to notify the applicable Loan Party of the
applicable request for disclosure of such non-public information (A) by a
Governmental Body or representative thereof (other than any such request in
connection with an examination of the financial condition of a Lender or a
Transferee by such Governmental Body) or (B) pursuant to legal process and (ii)
in no event shall Agent, any Lender or any Transferee be obligated to return any
materials furnished by any Loan Party other than those documents and instruments
in possession of Agent or any Lender in order to perfect its Lien on the
Collateral once the Obligations have been paid in full and this Agreement has
been terminated.  Each Loan Party acknowledges that from time to time financial
advisory, investment banking and other services may be offered or provided to
such Loan Party or one or more of its Affiliates (in connection with this
Agreement or otherwise) by any Lender or by one or more Subsidiaries or
Affiliates of such Lender and each Loan Party hereby authorizes each Lender to
share any information delivered to such Lender by such Loan Party and its
Subsidiaries pursuant to this Agreement, or in connection with the decision of
such Lender to enter into this Agreement, to any such Subsidiary or Affiliate of
such Lender, it being understood that any such Subsidiary or Affiliate of any
Lender receiving such information shall be bound by the provisions of this
Section 15.15 as if it were a Lender hereunder.  Such authorization shall
survive the repayment of the other Obligations and the termination of this
Agreement.
 
 
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15.16.      Publicity.
 
Each Loan Party and each Lender hereby authorizes Agent to make appropriate
announcements of the financial arrangement entered into among Loan Parties,
Agent and Lenders, including announcements which are commonly known as
tombstones, in such publications and to such selected parties as Agent shall in
its sole and absolute discretion deem appropriate.
 
15.17.      Certifications From Banks and Participants; USA PATRIOT Act.
 
Each Lender or assignee or participant of a Lender that is not incorporated
under the Laws of the United States of America or a state thereof (and is not
excepted from the certification requirement contained in Section 313 of the USA
PATRIOT Act and the applicable regulations because it is both (i) an affiliate
of a depository institution or foreign bank that maintains a physical presence
in the United States or foreign country, and (ii) subject to supervision by a
banking authority regulating such affiliated depository institution or foreign
bank) shall deliver to Agent the certification, or, if applicable,
recertification, certifying that such Lender is not a "shell" and certifying to
other matters as required by Section 313 of the USA PATRIOT Act and the
applicable regulations: (1) within 10 days after the Closing Date, and (2) as
such other times as are required under the USA PATRIOT Act.
 
15.18.      Joinder of Guarantors.
 
Any Subsidiary of any Borrower Party which is required to join this Agreement as
a Guarantor pursuant to Section 7.1(a) and which has not yet done so shall
execute and deliver to the Agent (i) a joinder agreement, in form and substance
satisfactory to the Bank, pursuant to which it shall join as a Guarantor each of
the documents to which the Guarantors are parties; (ii) documents in the forms
described in Section 8.1 modified as appropriate to relate to such Subsidiary;
and (iii) documents necessary to grant and perfect first priority security
interests to the Agent for the benefit of the Lenders in all Collateral held by
such Subsidiary.  The Borrower Parties shall deliver such joinder agreement and
related documents to the Agent within five (5) Business Days after the date of
the filing of such Subsidiary's articles of incorporation if the Subsidiary is a
corporation, the date of the filing of its certificate of limited partnership if
it is a limited partnership or the date of its organization if it is an entity
other than a limited partnership or corporation.
 
[INTENTIONALLY LEFT BLANK]
 
 
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Each of the parties, with the intent to be legally bound, has signed this
Agreement as of the day and year first above written, as a document under seal.
 

 
BORROWER:
     
Horsehead Corporation
         
By:  /s/ James M. Hensler                (SEAL)
 
Name: James M. Hensler                              
     
Title: President and CEO                              
     
 
 
GUARANTOR:
     
Horsehead Holding Corp.
         
By:  /s/ James M. Hensler                (SEAL)
 
Name: James M. Hensler                              
     
Title: President and CEO                              

 
 
 

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

 
 

 
Agent and Lenders:
     
PNC Bank, National Association, as Agent and as Lender
     
By:   /s/ Douglas Hoffman                           
 
Name:  Douglas Hoffman
 
Title:  Vice President
     
Commitment Percentage:  100%

 
 
 

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EXHIBIT 1.2
 
FORM OF BORROWING BASE CERTIFICATE
 
This Borrowing Base Certificate (the "Certificate") is delivered pursuant to
Section 9.2 of the Revolving Credit and Security Agreement, dated September 28,
2011, (as the same may hereafter be amended, restated, supplemented or otherwise
modified from time to time, the "Credit Agreement"), by and among Horsehead
Corporation, a Delaware corporation (the "Borrower"), the Guarantors (as defined
therein) party thereto, PNC Bank, National Association ("PNC Bank") and various
other financial institutions from time to time (PNC Bank and such other
financial institutions are each a "Lender" and collectively, the "Lenders"), and
PNC Bank, as administrative and collateral agent for the Lenders (in such
capacity, the "Agent").  Unless otherwise defined herein, capitalized terms used
herein have the meanings provided in the Credit Agreement.
 
The undersigned hereby certifies that [he/she] is the [President] [Chief
Financial Officer] [Controller] of the Borrower and that, as such, [he/she] is
authorized to execute this Certificate on behalf of the Borrower and further
certifies that:
 
For purposes of this Certificate, the date for which the Formula Amount is being
calculated is _______________, 201_ (the "Calculation Date").
 
1.           The calculation of the Formula Amount is attached hereto as Exhibit
A.
 
2.           As of the Calculation Date, the aggregate outstanding principal
amount of all Revolving Advances on such date does not (and, after giving effect
to any Advance being requested in conjunction with the delivery of this
Certificate, will not) exceed the lesser of (a) the Maximum Revolving Advance
Amount less the aggregate Maximum Undrawn Amount of outstanding Letters of
Credit or (b) the Formula Amount.
 
3.           All Receivables set forth herein as Eligible Receivables meet each
of the requirements of Eligible Receivables as set forth in the Credit
Agreement.  All Inventory set forth herein as Eligible Inventory meet each of
the requirements of Eligible Inventory as set forth in the Credit Agreement.
 
[INTENTIONALLY LEFT BLANK]
 
 
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IN WITNESS WHEREOF, the undersigned has hereunto set [his/her] hand this _____
day of ______________, 201_.
 

 
BORROWER:
     
Horsehead Corporation,
 
a Delaware corporation
         
By:                                                                   
 
Name:                                                              
 
Title:                                                                

 
 
 

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

 
 
EXHIBIT A

FORMULA AMOUNT

(see attached)
 
 
 
 

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

 
 
EXHIBIT 2.1(a)
 
FORM OF
REVOLVING CREDIT NOTE
 
$___________.00
Date:___________ ___, 201_
 
Pittsburgh, Pennsylvania

 
This Revolving Credit Note (this "Note") is executed and delivered under and
pursuant to the terms of that certain Revolving Credit and Security Agreement,
dated September 28, 2011 (as amended, restated, supplemented or modified from
time to time, the "Credit Agreement"), by and among Horsehead Corporation, a
Delaware corporation (the "Borrower"), the Guarantors party thereto, PNC Bank,
National Association ("PNC") and various other financial institutions from time
to time (PNC and such other financial institutions are each, a "Lender" and
collectively, the "Lenders"), and PNC, as agent for the Lenders (in such
capacity, the "Agent").  Capitalized terms not otherwise defined herein shall
have the meanings provided in the Credit Agreement.
 
FOR VALUE RECEIVED, the Borrower hereby promises to pay to the order of
[_______________], at the office of Agent located at Two Tower Center Boulevard,
East Brunswick, New Jersey  08816, or at such other place as Agent may from time
to time designate to the Borrower in writing:
 
(i)           the principal sum of [_________________ and 00/100 Dollars
($______________.00)] or, if different from such amount, the unpaid principal
balance of [_________________'s] Commitment Percentage of the Revolving Advances
as may be due and owing under the Credit Agreement, payable in accordance with
the provisions of the Credit Agreement and subject to acceleration upon the
occurrence of an Event of Default under the Credit Agreement or earlier
termination of the Credit Agreement pursuant to the terms thereof; and
 
(ii)           interest on the principal amount of this Note from time to time
outstanding until such principal amount is paid in full at the applicable
Revolving Interest Rate in accordance with the provisions of the Credit
Agreement.  In no event, however, shall interest exceed the maximum interest
rate permitted by law.  Upon and after the occurrence of an Event of Default,
and during the continuance thereof, at the option of Agent or at the direction
of Required Lenders, interest shall be payable at the Default Rate.
 
This Note is one of the Notes referred to in the Credit Agreement and is secured
by the Liens granted pursuant to the Credit Agreement and the Other Documents,
is entitled to the benefits of the Credit Agreement and the Other Documents and
is subject to all of the agreements, terms and conditions therein contained.
 
This Note may be voluntarily prepaid, in whole or in part, on the terms and
conditions set forth in the Credit Agreement.
 
 
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If an Event of Default under Section 10.7 of the Credit Agreement shall occur or
a petition against any Loan Party in any involuntary case under any state or
federal bankruptcy laws shall be filed, then this Note shall become immediately
due and payable, without notice, together with reasonable attorneys' fees if the
collection hereof is placed in the hands of an attorney to obtain or enforce
payment hereof.  If any other Event of Default shall occur under the Credit
Agreement or any of the Other Documents, then this Note may, as provided in the
Credit Agreement, be declared to be immediately due and payable, without notice,
together with reasonable attorneys' fees, if the collection hereof is placed in
the hands of an attorney to obtain or enforce payment hereof.
 
This Note shall be construed and enforced in accordance with the laws of the
Commonwealth of Pennsylvania.
 
The Borrower expressly waives any presentment, demand, protest, notice of
protest, or notice of any kind except as expressly provided in the Credit
Agreement.
 
[____________] may at any time pledge all or any portion of its rights under the
Credit Agreement or any of the Other Documents including any portion of this
Note to any of the twelve (12) Federal Reserve Banks organized under Section 4
of the Federal Reserve Act, 12 U.S.C. § 341.  No such pledge or enforcement
thereof shall release [____________] from its obligations under the Credit
Agreement or any of the Other Documents.
 
WARRANT OF ATTORNEY TO CONFESS JUDGMENT.  THE BORROWER HEREBY IRREVOCABLY
AUTHORIZES AND EMPOWERS THE PROTHONOTARY, ANY ATTORNEY OR ANY CLERK OF ANY COURT
OF RECORD, FOLLOWING THE OCCURRENCE OF AN EVENT OF DEFAULT, TO APPEAR FOR AND
CONFESS JUDGMENT AGAINST THE BORROWER FOR SUCH SUMS AS ARE DUE AND/OR MAY BECOME
DUE UNDER THIS NOTE, WITH OR WITHOUT DECLARATION, WITH COSTS OF SUIT, WITHOUT
STAY OF EXECUTION AND WITH AN AMOUNT EQUAL TO FIFTEEN PERCENT (15%) OF THE
AMOUNT OF SUCH JUDGMENT, BUT NOT LESS THAN TEN THOUSAND DOLLARS ($10,000.00),
ADDED FOR ATTORNEYS' COLLECTION FEES.  TO THE EXTENT PERMITTED BY LAW, THE
BORROWER RELEASES ALL ERRORS IN SUCH PROCEEDINGS.  IF A COPY OF THIS NOTE,
VERIFIED BY AFFIDAVIT BY OR ON BEHALF OF THE HOLDER OF THIS NOTE SHALL HAVE BEEN
FILED IN SUCH ACTION, IT SHALL NOT BE NECESSARY TO FILE THE ORIGINAL NOTE AS A
WARRANT OF ATTORNEY.  THE AUTHORITY AND POWER TO APPEAR FOR AND CONFESS JUDGMENT
AGAINST THE BORROWER SHALL NOT BE EXHAUSTED BY THE INITIAL EXERCISE THEREOF AND
MAY BE EXERCISED AS OFTEN AS THE HOLDER SHALL FIND IT NECESSARY AND DESIRABLE
AND THIS NOTE SHALL BE A SUFFICIENT WARRANT THEREFOR.  THE HOLDER HEREOF MAY
CONFESS ONE OR MORE JUDGMENTS IN THE SAME OR DIFFERENT JURISDICTIONS FOR ALL OR
ANY PART OF THE AMOUNT OWING HEREUNDER, WITHOUT REGARD TO WHETHER JUDGMENT HAS
THERETOFORE BEEN CONFESSED ON MORE THAN ONE OCCASION FOR THE SAME AMOUNT.  IN
THE EVENT ANY JUDGMENT CONFESSED AGAINST THE BORROWER HEREUNDER IS STRICKEN OR
OPENED UPON APPLICATION BY OR ON THE BORROWER'S BEHALF FOR ANY REASON, THE
HOLDER IS HEREBY AUTHORIZED AND EMPOWERED TO AGAIN APPEAR FOR AND CONFESS
JUDGMENT AGAINST THE BORROWER FOR ANY PART OR ALL OF THE AMOUNTS OWING
HEREUNDER, AS PROVIDED FOR HEREIN, IF DOING SO WILL CURE ANY ERRORS OR DEFECTS
IN SUCH PRIOR PROCEEDINGS.
 
 
- 4 -

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

 
 
WITH RESPECT TO THE ATTORNEYS' COLLECTION FEES PROVIDED FOR IN THE FOREGOING
WARRANT OF ATTORNEY TO CONFESS JUDGMENT, THE HOLDER WILL NOT HOLD THE BORROWER
RESPONSIBLE FOR LEGAL FEES, COSTS OR EXPENSES IN CONNECTION WITH ANY EVENT OF
DEFAULT UNDER THE CREDIT AGREEMENT OR ANY OF THE OTHER DOCUMENTS AND ANY
COLLECTION PROCEEDINGS RELATED THERETO, IN EXCESS OF THOSE ACTUALLY AND
REASONABLY INCURRED.  ANY ASSESSMENT IN EXCESS THEREOF SET FORTH IN THE
FOREGOING WARRANT OF ATTORNEY TO CONFESS JUDGMENT WILL BE HELD AS ADDITIONAL
COLLATERAL FOR THE OBLIGATIONS, LEGAL FEES, COSTS AND EXPENSES AND UPON PAYMENT
OF SUCH OBLIGATIONS, LEGAL FEES, COSTS AND EXPENSES IN FULL, THE HOLDER WILL
CAUSE THE JUDGMENT SO CONFESSED TO BE SATISFIED, AND, TO THE EXTENT HELD BY THE
HOLDER, REMIT TO THE BORROWER ANY SUCH EXCESS.  IF SUCH ASSESSMENT IS LESS THAN
THE LEGAL FEES, COSTS, AND EXPENSES ACTUALLY INCURRED, THE HOLDER SHALL NOT BE
DEEMED TO HAVE WAIVED ANY RIGHT TO SEEK TO REASSESS OR OTHERWISE INITIATE ACTION
FOR PAYMENT OF ADDITIONAL LEGAL FEES, COSTS AND EXPENSES.
 
WAIVER OF TRIAL BY JURY.  THE UNDERSIGNED HEREBY EXPRESSLY, KNOWINGLY AND
VOLUNTARILY WAIVES ALL BENEFIT AND ADVANTAGE OF ANY RIGHT TO A TRIAL BY JURY,
AND THE UNDERSIGNED WILL NOT AT ANY TIME INSIST UPON, OR PLEAD OR IN ANY MANNER
WHATSOEVER CLAIM OR TAKE THE BENEFIT OR ADVANTAGE OF A TRIAL BY JURY IN ANY
ACTION ARISING IN CONNECTION WITH THIS NOTE, THE CREDIT AGREEMENT OR ANY OF THE
OTHER DOCUMENTS.
 
[INTENTIONALLY LEFT BLANK]
 
 
- 5 -

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

 
 
IN WITNESS WHEREOF, and intending to be legally bound, the undersigned hereby
executed this Revolving Credit Note on the date set forth above.
 
 
WITNESS:
Horsehead Corporation
                                                                          
By:                                                                           
Name:                                                                    
  Title:                                                                      

 
 
 

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

 
 
EXHIBIT 5.5(a)
 
FINANCIAL PROJECTIONS
 
 
 
- 7 -

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

 
 
EXHIBIT 8.1(i)
 
FORM OF FINANCIAL CONDITION CERTIFICATE
 
The undersigned, as the Chief Financial Officer of Horsehead Corporation, a
Delaware corporation (the "Borrower"), hereby certifies that:
 
I am the Chief Financial Officer of the Borrower, as indicated above.  Each Loan
Party (as defined in the Credit Agreement (as hereinafter defined)) is duly
organized, existing and in good standing under the laws of the jurisdiction of
its organization.
 
I am familiar with the business and financial affairs of Loan Parties including,
without limiting the generality of the foregoing, all of the matters hereinafter
described.
 
This Certificate is made and delivered to PNC Bank, National Association
("PNC"), and various other financial institutions from time to time (PNC and
such other financial institutions are each a "Lender" and collectively, the
"Lenders"), and PNC, as agent for the Lenders (in such capacity, the "Agent"),
pursuant to the terms of that Revolving Credit and Security Agreement, dated of
even date herewith, by and among the Borrower, the Guarantors party thereto,
Lenders and Agent (as amended, restated, supplemented or modified from time to
time, the "Credit Agreement"), for the purpose of inducing Lenders, now and from
time to time hereafter, to make Advances to Borrower pursuant to the Credit
Agreement together with all notes, security agreements, agreements, guarantees,
instruments and documents heretofore now and from time to time hereafter
executed by any Loan Party and delivered to Agent and/or Lenders (all
hereinafter collectively referred to as the "Other Documents").  I understand
that you are relying on this Certificate.  All capitalized terms used and not
otherwise defined herein shall have the meanings set forth in the Credit
Agreement.
 
I have reviewed the twelve month cash flow projections of the Borrower and its
Subsidiaries on a consolidated basis and their projected balance sheets, copies
of which are attached hereto as Exhibit A (the "Projections"), and am familiar
with the process pursuant to which they were generated.  The Projections are
based on underlying assumptions which provide a reasonable basis for the
Projections and which reflect Loan Parties' judgment at the time prepared, based
on present circumstances of the most likely set of conditions and course of
action for the period projected.
 
Immediately following the execution of the Credit Agreement and the Other
Documents, the assets of each Loan Party, at a fair valuation, will be in excess
of the total amount of such Loan Party's liabilities (including contingent and
unmatured liabilities), each Loan Party will be able to pay its respective debts
as they become due and no Loan Party will  have unreasonably small capital in
order to carry on its respective businesses.  All material undisputed debts
owing to third parties by each Loan Party are current and not past due.
 
The Credit Agreement was and the Other Documents were and will be executed and
delivered by Loan Parties to Agent and Lenders in good faith and in exchange for
reasonably equivalent value and fair consideration.
 
 
- 8 -

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

 
 
I have reviewed the relevant terms of the Credit Agreement and the Other
Documents and have made or have caused to be made under our supervision a review
of the transactions and conditions of the Borrower and its Subsidiaries from
April 1, 2011 to the date of this Certificate and such review has not disclosed
the existence during such period of any condition or event which constitutes or
would constitute a Default or Event of Default.
 

[INTENTIONALLY LEFT BLANK]
 
 
- 9 -

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

 
 
Dated: September 28, 2011
 
 
WITNESS:
Horsehead Corporation
                                                                          
By:                                                                           
Name:                                                                    
  Title: Chief Financial Officer

 
 
 

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

 
 
EXHIBIT 15.3
 
COMMITMENT TRANSFER SUPPLEMENT
 
COMMITMENT TRANSFER SUPPLEMENT, dated as of ______________ __, 201_, among
________________ (the "Transferor Lender"), each Purchasing Lender executing
this Commitment Transfer Supplement (each, a "Purchasing Lender"), and PNC Bank,
National Association ("PNC") as agent for the Lenders (as defined below) under
the Credit Agreement (as defined below).
 
W I T N E S S E T H:
 
WHEREAS, in accordance with Section 15.3 of the Revolving Credit and Security
Agreement dated September 28, 2011 (as from time to time amended, restated,
supplemented or otherwise modified in accordance with the terms thereof, the
"Credit Agreement") among Horsehead Corporation, a Delaware corporation (the
"Borrower"), the Guarantors party thereto (the Borrower and the Guarantors are
collectively, the "Loan Parties"), PNC and the various other financial
institutions named in or which hereafter become a party to the Credit Agreement
(collectively, the "Lenders") and PNC as agent for Lenders (in such capacity,
"Agent"), this Commitment Transfer Supplement is being executed and delivered by
the Transferor Lender and each Purchasing Lender, and consented to by Agent in
accordance with Section 15.3(c) of the Credit Agreement;
 
WHEREAS, each Purchasing Lender wishes to become a Lender party to the Credit
Agreement; and
 
WHEREAS, the Transferor Lender is selling and assigning to each Purchasing
Lender, rights, obligations and commitments under the Credit Agreement.
 
NOW, THEREFORE, the parties hereto hereby agree as follows:
 
1.           All capitalized terms used herein which are not defined shall have
the meanings given to them in the Credit Agreement,
 
2.           Upon receipt by Agent of four (4) counterparts of this Commitment
Transfer Supplement, to each of which is attached a fully completed Schedule I,
and each of which has been executed by the Transferor Lender and Agent, Agent
will transmit to Transferor Lender and each Purchasing Lender a Transfer
Effective Notice, substantially in the form of Schedule II to this Commitment
Transfer Supplement (a "Transfer Effective Notice"). Such Transfer Effective
Notice shall set forth, inter alia, the date on which the transfer effected by
this Commitment Transfer Supplement shall become effective (the "Transfer
Effective Date"), which date shall not be earlier than the first (1st) Business
Day following the date such Transfer Effective Notice is received. From and
after the Transfer Effective Date, each Purchasing Lender shall be a Lender
party to the Credit Agreement for all purposes thereof.
 
 
- 2 -

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

 
 
3.           At or before 12:00 Noon (Pittsburgh, Pennsylvania time) on the
Transfer Effective Date each Purchasing Lender shall pay to Transferor Lender,
in immediately available funds, an amount equal to the purchase price, as agreed
between Transferor Lender and such Purchasing Lender (the "Purchase Price"), of
the portion of the Advances being purchased by such Purchasing Lender (such
Purchasing Lender's "Purchased Percentage") of the outstanding Advances and
other amounts owing to the Transferor Lender under the Credit Agreement and the
Other Documents. Effective upon receipt by Transferor Lender of the Purchase
Price from a Purchasing Lender, Transferor Lender hereby irrevocably sells
assigns and transfers to such Purchasing Lender, without recourse,
representation or warranty, and each Purchasing Lender hereby irrevocably
purchases, takes and assumes from Transferor Lender, such Purchasing Lender's
Purchased Percentage of the Advances and other amounts owing to the Transferor
Lender under the Credit Agreement and the Other Documents together with all
instruments, documents and collateral security pertaining thereto.
 
4.           Transferor Lender has made arrangements with each Purchasing Lender
with respect to (i) the portion, if any, to be paid, and the date or dates for
payment, by Transferor Lender to such Purchasing Lender of any fees heretofore
received by Transferor Lender pursuant to the Credit Agreement prior to the
Transfer Effective Date and (ii) the portion, if any, to be paid, and the date
or dates for payment, by such Purchasing Lender to Transferor Lender of fees or
interest received by such Purchasing Lender pursuant to the Credit Agreement
from and after the Transfer Effective Date.
 
5.           (a)  All principal payments that would otherwise be payable from
and after the Transfer Effective Date to or for the account of Transferor Lender
pursuant to the Credit Agreement and the Other Documents shall, instead, be
payable to or for the account of Transferor Lender and Purchasing Lender, as the
case may be, in accordance with their respective interests as reflected in this
Commitment Transfer Supplement.
 
(b)  All interest, fees and other amounts that would otherwise accrue for the
account of Transferor Lender from and after the Transfer Effective Date pursuant
to the Credit Agreement and the Other Documents shall, instead, accrue for the
account of, and be payable to, Transferor Lender and Purchasing Lender, as the
case may be, in accordance with their respective interests as reflected in this
Commitment Transfer Supplement. In the event that any amount of interest, fees
or other amounts accruing prior to the Transfer Effective Date was included in
the Purchase Price paid by any Purchasing Lender, Transferor Lender and each
Purchasing Lender will make appropriate arrangements for payment by Transferor
Lender to such Purchasing Lender of such amount upon receipt thereof from the
Borrower.
 
6.           Concurrently with the execution and delivery hereof, Transferor
Lender will provide to each Purchasing Lender conformed copies of the Credit
Agreement and all related documents delivered to Transferor Lender.
 
7.           Each of the parties to this Commitment Transfer Supplement agrees
that at any time and from time to time upon the written request of any other
party, it will execute and deliver such further documents and do such further
acts and things as such other party may reasonably request in order to effect
the purposes of this Commitment Transfer Supplement.
 
 
- 3 -

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

 
 
8.           By executing and delivering this Commitment Transfer Supplement,
Transferor Lender and each Purchasing Lender confirm to and agree with each
other and Agent and Lenders as follows: (i) other than the representation and
warranty that it is the legal and beneficial owner of the interest being
assigned hereby free and clear of any adverse claim, Transferor Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement, the Other Documents
or any other instrument or document furnished pursuant thereto; (ii) Transferor
Lender makes no representation or warranty and assumes no responsibility with
respect to the financial condition of Loan Parties or the performance or
observance by Loan Parties of any of their Obligations under the Credit
Agreement, the Other Documents or any other instrument or document furnished
pursuant hereto; (iii) each Purchasing Lender confirms that it has received a
copy of the Credit Agreement, together with copies of such financial statements
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Commitment Transfer
Supplement; (iv) each Purchasing Lender will, independently and without reliance
upon Agent, Transferor Lender or any other Lenders and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under the Credit Agreement;
(v) each Purchasing Lender appoints and authorizes Agent to take such action as
agent on its behalf and to exercise such powers under the Credit Agreement as
are delegated to Agent by the terms thereof; (vi) each Purchasing Lender agrees
that it will perform all of its respective obligations as set forth in the
Credit Agreement to be performed by each as a Lender; and (vii) each Purchasing
Lender represents and warrants to Transferor Lender, Lenders, Agent and the
Borrower that it is either (x) entitled to the benefits of an income tax treaty
with the United States of America that provides for an exemption from the United
States withholding tax on interest and other payments made by Loan Parties under
the Credit Agreement and the Other Documents or (y) is engaged in trade or
business within the United States of America.
 
9.           Schedule I hereto sets forth the revised Commitment Percentages of
Transferor Lender and the Commitment Percentage of each Purchasing Lender as
well as administrative information with respect to each Purchasing Lender.
 
10.         This Commitment Transfer Supplement shall be governed by, and
construed in accordance with, the laws of the Commonwealth of Pennsylvania.
 
[remainder of page intentionally left blank; signature page immediately follows]
 
 
- 4 -

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

 
 
IN WITNESS WHEREOF, the parties hereto have caused this Commitment Transfer
Supplement to be executed and delivered by their respective duly authorized
officers on the date set forth above.
 

                                                                              
as Transferor Lender
     
By:                                                                    
 
Name:                                                               
 
Title:                                                                 
                                                                                
 
as a Purchasing Lender
     
By:                                                                    
 
Name:                                                               
 
Title:                                                                 

 
Consented to as of the date set forth above:
 
PNC BANK, NATIONAL ASSOCIATION
as Agent
 
By:                                                                
              
Name:                                                                          
Title:                                                          
                 
 
 
 

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

 
 
SCHEDULE I TO COMMITMENT TRANSFER SUPPLEMENT
 
LIST OF OFFICES, ADDRESSES FOR NOTICES AND COMMITMENT AMOUNTS
 

(Transferor Lender)
Revised Commitment Amount       $                                       
 
 
Revised Commitment Percentage                                       %
 
(Purchasing Lender) 
Commitment Amount                       $                                      
                                                                                     
 
Commitment Percentage                                                       %
 
Purchasing Lender's Address for Notices
 
                                                                   
                                                                   
                                                                   
 
Attention:
Telephone:
Telecopier:
 
 

 
 
 

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

 
 
SCHEDULE II TO COMMITMENT TRANSFER SUPPLEMENT
 
(Form of Transfer Effective Notice)
 
To:  ___________________________________________, as Transferor Lender and
________________________________, as Purchasing Lender:
 
The undersigned, as Agent under the Revolving Credit and Security Agreement
dated September 28, 2011 (as from time to time amended, restated, supplemented
or otherwise modified in accordance with the terms thereof, the "Credit
Agreement") among Horsehead Corporation, a Delaware corporation (the
"Borrower"), the Guarantors party thereto (the Borrower and the Guarantors are
collectively, the "Loan Parties"), PNC BANK, NATIONAL ASSOCIATION and the
various other financial institutions named in or which hereafter become a party
to the Credit Agreement (collectively, the "Lenders") and PNC BANK, NATIONAL
ASSOCIATION, as agent for the Lenders (in such capacity, "Agent"), acknowledges
receipt of four (4) executed counterparts of a completed Commitment Transfer
Supplement in the form attached hereto. [Note: Attach copy of Commitment
Transfer Supplement].  Terms defined in such Commitment Transfer Supplement are
used herein as therein defined.
 
Pursuant to such Commitment Transfer Supplement, you are advised that the
Transfer Effective Date will be ___________ ___, 201__.
 
[remainder of page intentionally left blank; signature page immediately follows]
 
 
 

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

 
 

 
PNC BANK, NATIONAL ASSOCIATION
 
as Agent
         
By:                                                                     
 
Name:                                                                
 
Title:                                                                  

 
ACCEPTED FOR RECORDATION
IN REGISTER:  __________________
 
 
 

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

 
 
Schedule 1.2(B)
 
Permitted Encumbrances
 
1.
Mortgage from Horsehead Zinc Recycling, LLC, to CCM Community Development IV
LLC, dated as of May 29, 2009 and recorded June 4, 2009 in the Office of the
Clerk of Court for Barnwell County, South Carolina, in Book 886, at page 126 for
the facility owned by Horsehead Zinc Recycling, LLC and located at 941
Technology Drive, Barnwell, South Carolina, 29812-8650.

 
 
 

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

 
 
Schedule 1.2(E)
 
Existing Bank Accounts
 
ENTITY
 
BANK NAME
ACCT NUMBER
PURPOSE
Horsehead Corporation
 
PNC Bank
80-2622-7525
Collection Account
Horsehead Corporation
 
PNC Bank
10-1929-3127
Controlled Disbursements
Horsehead Corporation
 
PNC Bank
80-2622-7509
Payroll Account
Horsehead Corporation
 
PNC Bank
80-2622-7517
Operating Account
Horsehead Corporation
 
Huntington Bank
01059748150
Superintendent Account
Chestnut Ridge Railroad Corp.
 
Huntington Bank
01059709270
Overnight Investment and Payroll Account

 
 
 

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

 
 
Schedule 4.5
 
Equipment and Inventory Locations
 
(All owned or leased by Borrower)
 
Location
 
Address
Owned or Leased or Third
Party Warehouse
Monaca, PA
300 Frankfort Road
Monaca, PA  15061-2210
 
Owned
Pittsburgh, PA
(Chief Executive Office)
4955 Steubenville Pike, Suite 405
Pittsburgh, PA  15205
 
Leased (Massaro Corporation)
Calumet, IL
2701 E. 114th Street
Chicago, IL  60617-6449
 
Owned
Barnwell, SC
941 Technology Drive
Barnwell, SC 29812-8650
 
Owned
Rockwood, TN
P.O. Box 5
Rockwood, TN 37854
 
Owned
Palmerton, PA
900 Delaware Avenue
Palmerton, PA 18071-2008
 
Owned
Buena Park, CA
P.O. Box 6798, Buena Park, CA 90622
 
Third Party Warehouse (H.M. Royal)
Valley, NE
P.O. Box 358, Highway 275, Valley, NE 68064
 
Third Party Warehouse (Valmont Industries)
Sandy Springs, SC
6301 Highway 76, Sandy Springs, SC  29677
 
Third Party Warehouse (Michelin)
Anderson, SC
1 Bib Way, Anderson, SC  29626
 
Third Party Warehouse (Michelin)
Bartlesville, OK
Old Highway 90, PO Box 3467,
Beaumont, Texas 77704-3467
 
Owned
Beaumont, TX
Highway 123 & West 11th Street,
Bartlesville, Oklahoma 74003
 
Owned

 
 
 

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

 
 
Schedule 4.15(h)
 
Deposit and Investment Accounts
 
ENTITY
 
BANK NAME
ACCT NUMBER
PURPOSE
Horsehead Corporation
 
PNC Bank
80-2622-7525
Collection Account
Horsehead Corporation
 
PNC Bank
10-1929-3127
Controlled Disbursements
Horsehead Corporation
 
PNC Bank
80-2622-7509
Payroll Account
Horsehead Corporation
 
PNC Bank
80-2622-7517
Operating Account
Horsehead Corporation
 
Huntington Bank
01059748150
Superintendent Account
Chestnut Ridge Railroad Corp.
 
Huntington Bank
01059709270
Overnight Investment and Payroll Account

 
 
 

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

 
 
Schedule 4.19
 
Owned and Leased Real Property
 
(All owned or leased by Borrower)
 
Location
 
Address
Owned or Leased
Monaca
300 Frankfort Road
Monaca, PA  15061-2210
 
Owned
Pittsburgh
4955 Steubenville Pike, Suite 405
Pittsburgh, PA  15205
 
Leased
Calumet
2701 E. 114th Street
Chicago, IL  60617-6449
 
Owned
Barnwell
941 Technology Drive
Barnwell, SC  29812-8650
 
Owned
Rockwood
P.O. Box 5
Rockwood, TN  37854
 
Owned
Palmerton
900 Delaware Avenue
Palmerton, PA  18071-2008
 
Owned
Bartlesville, OK
Old Highway 90, PO Box 3467,
Beaumont, Texas 77704-3467
 
Owned
Beaumont, TX
Highway 123 & West 11th Street,
Bartlesville, Oklahoma 74003
 
Owned

 
 
 

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

 
 
Schedule 5.1
 
Consents
 
None.
 
 
 

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

 
 
Schedule 5.2(a)
 
States of Formation and Foreign Qualifications
 
Borrower Party
 
State of Formation
Foreign Qualifications
Horsehead Corporation
Delaware
Pennsylvania, Illinois,
Oklahoma, Texas,
Tennessee and South Carolina
 
Chestnut Ridge Railroad Corp.
Delaware
Pennsylvania
 
Horsehead Zinc Recycling, LLC
South Carolina
None
 

 
 
 

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

 
 
Schedule 5.2(b)
 
Borrower's Subsidiaries
 
Entity Name
 
% Owned by Borrower
State of Organization
Chestnut Ridge Railroad Corp.
 
100%
DE
Horsehead Zinc Recycling, LLC
 
99.99%
SC

 
 
 

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

 
 
Schedule 5.4
 
Federal Tax Identification Numbers
 
Borrower Party
 
Federal Tax Identification Number
Horsehead Corporation
 
20-0447346
Chestnut Ridge Railroad Corp.
 
20-0689642
Horsehead Zinc Recycling, LLC
 
26-3478617

 
 
 

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

 
 
Schedule 5.6
 
Prior and Other Names
 
1.
Horsehead Corporation was formerly known as Horsehead Corp.; and

 
2.
Horsehead Corporation operates (d/b/a) in South Carolina as Horsehead Recycling.

 
 
 

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

 
 
Schedule 5.8(b)
 
Litigation
 
None.
 
 
 

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

 
 
Schedule 5.8(d)
 
Plans
 
1.
Salaried Plan #610999 – Horsehead Corporation Retirement Savings Plan; and

 
2.
Hourly Plan #515169 & 614240 (Palmerton) – Horsehead Corporation Retirement and
Savings Plan for Hourly Paid Employees.

 
 
 

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

 
 
Schedule 5.9
 
Intellectual Property, Source Code Escrow Agreements
 
 
PATENTS
 
NONE
 
 
TRADEMARKS
 
U.S. TRADEMARK REGISTRATIONS
 
(All owned by Borrower)
 
MARK
 
REG. NO.
ISSUED
ECOLOAM
 
1,834,219
05/03/1994
ECOTITE
 
3,573,990
02/10/2009
FLORENCE
 
521,196
02/21/1950
FLORENCE
 
544,503
07/03/1951
HORSEHEAD CORPORATION AND DESIGN
Leading the World in Zinc Recycling
 
3,511,090
10/07/2008
KADOX
 
174,809
10/23/1923
XX
 
534,629
12/12/1950
ZINSTABE
 
1,033,496
02/17/1976
ZINVISIBLE
 
2,798,379
12/23/2003

 
 
 

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

 
 
FOREIGN TRADEMARK REGISTRATIONS
 
MARK
 
COUNTRY
REG. NO.
ISSUED
HORSEHEAD CORPORATION AND DESIGN
Leading the World in Zinc Recycling
 
Canada
TMA756445
01/05/2010
HORSEHEAD CORPORATION AND DESIGN
Leading the World in Zinc Recycling
 
Costa Rica
180611
10/07/2008
HORSEHEAD CORPORATION AND DESIGN
Leading the World in Zinc Recycling
 
Costa Rica
180612
10/07/2008
HORSEHEAD CORPORATION AND DESIGN
Leading the World in Zinc Recycling
 
Costa Rica
180613
10/07/2008
HORSEHEAD CORPORATION AND DESIGN
Leading the World in Zinc Recycling
 
El Salvador
N/A (Serial No. 2008074013)
11/25/2009
HORSEHEAD CORPORATION AND DESIGN
Leading the World in Zinc Recycling
 
European Community
006674469
01/29/2009
HORSEHEAD CORPORATION AND DESIGN
Leading the World in Zinc Recycling
 
Honduras
106631
09/22/2008
HORSEHEAD CORPORATION AND DESIGN
Leading the World in Zinc Recycling
 
Honduras
106853
10/21/2008
HORSEHEAD CORPORATION AND DESIGN
Leading the World in Zinc Recycling
 
Honduras
13907
09/22/2008
HORSEHEAD CORPORATION AND DESIGN
Leading the World in Zinc Recycling
 
Japan
5,313,135
04/02/2010
HORSEHEAD CORPORATION AND DESIGN
Leading the World in Zinc Recycling
 
Korea
45-0028551
08/10/2009

 
 
 

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

 
 
MARK
 
COUNTRY
REG. NO.
ISSUED
HORSEHEAD CORPORATION AND DESIGN
Leading the World in Zinc Recycling
 
Mexico
1043019
05/29/2008
HORSEHEAD CORPORATION AND DESIGN
Leading the World in Zinc Recycling
 
Mexico
1043735
05/30/2008
HORSEHEAD CORPORATION AND DESIGN
Leading the World in Zinc Recycling
 
Mexico
1046166
06/24/2008
HORSEHEAD CORPORATION AND DESIGN
Leading the World in Zinc Recycling
 
Nicaragua
0900867
06/15/2009
HORSEHEAD CORPORATION AND DESIGN
Leading the World in Zinc Recycling
 
Nicaragua
0900865
06/15/2009
HORSEHEAD CORPORATION AND DESIGN
Leading the World in Zinc Recycling
 
Nicaragua
0900866
06/15/2009
HORSEHEAD CORPORATION AND DESIGN
Leading the World in Zinc Recycling
 
Saudi Arabia
1060/37
04/15/2009
HORSEHEAD CORPORATION AND DESIGN
Leading the World in Zinc Recycling
 
Saudi Arabia
1060/38
04/15/2009
HORSEHEAD CORPORATION AND DESIGN
Leading the World in Zinc Recycling
 
Saudi Arabia
1062/38
04/22/2009
KADOX
 
Canada
TMDA041803
07/11/1927
ZINVISIBLE
 
Canada
TMA631638
02/01/2005
ZINVISIBLE
 
European Community
2,377,836
07/27/2004
ZINVISIBLE
 
Switzerland
494,253
01/31/2002

 
 
 

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

 
 
FOREIGN TRADEMARK APPLICATIONS
 
MARK
 
COUNTRY
SER. NO.
FILED
ECOTITE
 
Canada
1,283,174
12/15/2005
HORSEHEAD CORPORATION AND DESIGN
Leading the World in Zinc Recycling
 
Brazil
829605509
02/19/2008
HORSEHEAD CORPORATION AND DESIGN
Leading the World in Zinc Recycling
 
Brazil
829605460
02/19/2008
HORSEHEAD CORPORATION AND DESIGN
Leading the World in Zinc Recycling
 
Brazil
900745380
02/18/2008
HORSEHEAD CORPORATION AND DESIGN
Leading the World in Zinc Recycling
 
El Salvador
2008074015
02/15/2008
HORSEHEAD CORPORATION AND DESIGN
Leading the World in Zinc Recycling
 
El Salvador
2008074014
02/15/2008
HORSEHEAD CORPORATION AND DESIGN
Leading the World in Zinc Recycling
 
Guatemala
2599-2010
04/15/2010
HORSEHEAD CORPORATION AND DESIGN
Leading the World in Zinc Recycling
 
Guatemala
2598-2010
04/15/2010
HORSEHEAD CORPORATION AND DESIGN
Leading the World in Zinc Recycling
 
Guatemala
1302-2007
02/15/2008

 
COPYRIGHT REGISTRATIONS
 
NONE
 
SOURCE CODE ESCROW AGREEMENTS
 
NONE
 
 
 

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

 
 
Schedule 5.10
 
Licenses and Permits
 
None.
 
 
 

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

 
 
Schedule 5.14
 
Labor Contracts
 
1.
Agreement between Monaca Division Horsehead Corporation and United Steel, Paper
and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service
Workers International Union Local 8183 dated May 1, 2011.
   
2.
Memorandum of Agreement for the Monaca Power Plant between Horsehead Corporation
and United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied
Industrial and Service Workers International Union Local 8183-25 dated September
1, 2007, including supplemental Memorandum of Agreement between Horsehead
Corporation and USW Local 8183-25 dated March 14, 2011.
   
3.
Articles of Agreement for the Calumet Plant between Horsehead Corporation and
United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied
Industrial and Service Workers International Union and its Local 7-209 dated
August 2, 2011, expiring August 3, 2014.
   
4.
Articles of Agreement for Rockwood, Tennessee between Horsehead Corporation and
United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied
Industrial and Service Workers International Union and its Local 9-990 dated
July 1, 2011, expiring July 1, 2015.
   
5.
Agreement for Palmerton, PA between Horsehead Corporation and United Steel,
Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service
Workers International Union and Local Union 2599-16 dated April 27, 2011,
expiring April 27, 2015.
   
6.
Agreement between Chestnut Ridge Railroad Corp. and United Transportation Union
dated December 10, 2007.

 
 
 

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

 
 
Schedule 7.1
 
Excluded Property
 
1.
(A) All real property, improvements and fixtures owned by Horsehead Corporation
and located in Potter and Center Townships, Beaver County, Pennsylvania and
identified by the following tax parcel numbers:

 
a)
73-163-0188-000-1;
 
b)
73-163-0189-000-1;
 
c)
73-163-0190-000-1;
 
d)
73-163-0191-000-1;
 
e)
73-163-0192-000-1;
 
f)
73-163-0193-000-1;
 
g)
73-163-0194-000-1;
 
h)
73-163-0197-000-1;
 
i)
73-163-0199-000-1;
 
j)
73-163-0201-003-1;
 
k)
73-163-0202-001-1;
 
l)
73-172-0189-002-1;
 
m)
73-172-0201-000-1;
 
n)
73-172-0203-000-1;
 
o)
73-172-0203-001-1;
 
p)
73-172-0203-002-1;
 
q)
73-172-0203-003-1;
 
r)
73-172-0203-004-1;
 
s)
73-172-0213-000-1;
 
t)
73-173-0249-002-1;
 
u)
73-173-0250-000-1;
 
v)
73-173-0250-005-1; and
 
w)
73-173-0308-000-1.

 

  (B)        The following Equipment located at the foregoing tax parcels:

 
Sys No
Ext
000168
No 1 Unit Primary Precipitator
000

 
 
 

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

 
 
Sys No
Ext
000203
#2 Unit Power Plant Long D
000
000408
Power Plt NOX Compliance
000
000436
Replace #2 Unit Cyclotrell Tub
000
000438
Replace #6 Coal Bin
000
000441
Replace 2 Coal Bins
000
000442
Coal Bins
000
000444
Power Plt Asbestos encap
000
000535
PRB Coal Phase 1 (Pwr Plt)
000
000536
PRB Coal Phase 2 (Pwr Plt)
000
000549
#1 unit ID Fan Wheel
000
000575
Pwr Plt Unit #1 Improvements
000
000604
Repl Fork Truck (PPlt)
000
000652
#1 Main Feed Pump
000
000653
#1 Boiler Backpass
000
000654
#1 Turbine Repairs
000
000655
Rebid Coal Barge Unloader Motor
000
000656
Rebld Condensate Pump
000
000662
#2 Main Boiler Pump Rebld (PPlt)
000
000663
3 New Air Compressors (PPlt)
000
001299
Spare ID Fan Motor Power Plant
000
001314
Computer Hdwe - Pwr Plt
000
001320
South Traveling Screen - Pwr Plt
000

 
 
 

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

 
 

Sys No Ext
001321
Repl Stack Cap - Pwr Plt
000
001324
Recondition T-2 Transformer (PPlt)
000
001325
Repl #1 Coal Belt - Pwr Plt
000
001338
#2 Burner Ignition Sys - Pwr Plt
000
001341
Upgrade Instrumentation (PPlt)
000
001362
Bottom Ash Pump - Pwr Plt
000
001363
Condensate Pump O'haul - Pwr Plt
000
001364
Condenser Expansion - Pwr Plt
000
001365
Drip Pump - Pwr Plt
000
001366
Unit #2 Precip Wire Repl - Pwr Plt
000
001461
Clinker Grinder - PPlt
000
001462
Bucket for Coal Barge Unloader
000
001465
Unit #2 ID Fan Expan Joints - PPlt
000
001479
Turbine Oil Purification - Pwr Plt
000
001562
HV Line Support (Compr Hse)
000
001576
Accoustic Cleaners #1 Unit - Pwr Plt
000
001577
Unit #2 Valve Overhauls - Pwr Plt
000
001583
Barge Unloader Safety Work - PPlt
000
001584
Unit #1 Upper Arch Tube Repl - Pwr Plt
000
001585
Unit #1 Air Preheater Baskets & Seals
000
001586
Unit #1 ID Fan Expan Joints - PPlt
000
001587
#2 Sluice Pump Assmbly - PPlt
000

 
 
 

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

 
 

Sys No Ext
001594
Bulldozer Overhaul - Pwr Plt
000
001598
#83 Auto Transfer Switch - Pwr Plt
000
001709
Barge Unloader Controls - Pwr Plt
000
001710
Unit #1 Precip Wire Repl - Pwr Plt
000
001711
Precipitator Vibr Controls - Pwr Plt
000
001712
Coal Mill Rebuild - Pwr Plt
000
001713
Bearing & Oil Seals - #1 Turb Generator
000
001744
Bulk Storage Tank - Pwr Plt
000
001746
New Coal Bucket for Barge Unloader
000
001755
Rewind #2 ID Fan Motor Drive - Pwr Plt
000
001757
Repr Unit#2 Boiler feed Pumps-PwrPlt
000
001758
Condensate Booster Assembly -Pwr Plt
000
001764
Repl #2 Traveling Screen - Pwr Plt
000
001765
Rebuild of #5 Coal Mill
000
001772
Refurb 2 Circulating H20 Pumps -PPlt
000
001774
138 KV Substation Reprs - Pwr Plt
000
001779
Refurbish #2 Circ H20 Pump - Pwr Plt
000
001780
13.5 KV Auxiliary Disconnects - Pwr Plt
000
001812
Flyash Pond Pipe Supports - Pwr Plt
000
001837
Unit #2 Coal Mill Refurbishments - PPlt
000
001846
Unit 2 Planned Outage
000
001850
Unit #2 Turbine Emergency Reprs
000

 
 
 

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

 
 

Sys No Ext
001863
Unit #1 Generator Repair - Pwr Plt
000
001884
Reprs to #1 & #2 Flyash Ponds - Pwr Plt
000
001893
Truck - Pwr Plt
000
001904
CEC Environ Controls - Pwr Plt
000
001905
100 KW Diesel Control Power - Pwr Plt
000
001942
Repr Motor on Coal Unloader Pwr Plt
000
001943
Hi-Vac (for coal rejects) Pwr Plt
000
001955
Rebuild Spare Exciter Pwr Plt
000
001972
Repl Bulldozer Drive Assmbly- Pwr Plt
000
001974
Air Preheater Baskets & Seals - PPlt
000
001975
Rebid Coal Unloader Motor - Pwr Plt
000
002003
Lifting Equip Pwr Plt
000
002007
Industrial Engraver Pwr Plt
000
002025
Repr Unit #1 Exciter Pwr Plt
000
002028
#2 Boiler Safety Valve - Pwr Plt
000
002037
Rehab #1 Unit Aux Boiler Pwr Plt
000
002049
Water Truck Pwr Plt
000
002050
Trailer Archive Center Pwr Plt
000
002051
Repair work to Boiler Tubes - Pwr Plt
000
002138
Repl Unit 1 Pressure Cntrl Valve - PPlt
000
002153
Rbld #6 Coal Pulverizer Pwr Plt
000
002154
KL-30 Oil Filtration System Pwr Plt
000

 
 
 

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

 
 

Sys No Ext
002158
Modular Office Space Pwr Plt
000
002199
Capacity Improvements - Pwr Plt
000
002201
Repr 4 Westinghouse Controllers PPlt
000
002234
STP Repl Blower Pwr Plt
000
002235
Sewage Plant Upgrade - Pwr Plt
000

 
(C)           All proceeds and products of (A) and (B) in whatever form,
including:  cash, deposit accounts (whether or not comprised solely of
proceeds), certificates of deposit, insurance proceeds (including hazard, flood
and credit insurance), negotiable instruments and other instruments for the
payment of money, chattel paper, security agreements, documents, eminent domain
proceeds, condemnation proceeds and tort claim proceeds.
 
2.
(A) All real property, improvements and fixtures owned by Horsehead Corporation
and located in Bartlesville, Oklahoma and having a mailing address of Highway
123 & West 11th Street, Bartlesville, Oklahoma 74003, and the following
Equipment at such location:

 
Sys No
Ext
 
Class = BUILDINGS
 
001277
Equidae 2003 Buildings Total
000
 
001278
Roofing/crane girder repair
000
 
001520
Roofing/Siding
000
 
001995
RPL ROOF ON BVILLE PROCESS BDG
000
 
Class = MACHINERY AND EQUIPMENT
 
001279
Equidae 2003 Equipment Total
000
 
001281
Air-ox circuit
000
 
001283
Mix tank replacement
000
 
001284
WWTP aa replacement
000
 
001285
Wet circuit crane
000
 
001286
Varian spectra replacement
000
 
001288
Wet circuit attrition machine
000
 

 
 
 

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

 
 

Sys No Ext  
001289
Forklift
000
 
001290
PLC data acquisition system
000
 
001381
Replace Wet Side Ball Mill
000
 
001382
Replace Wet Side Hammer
000
 
001383
SP-65 Hose Pumps
000
 
001384
SP-40 Hose Pumps
000
 
001572
Water truck replacement
000
 
001624
Larox Filter Control system
000
 
Class = RAILCARS
 
001291
Equidae 2003 Rail Cars Total
000
 

 
(B) All proceeds and products of (A) in whatever form, including:  cash, deposit
accounts (whether or not comprised solely of proceeds), certificates of deposit,
insurance proceeds (including hazard, flood and credit insurance), negotiable
instruments and other instruments for the payment of money, chattel paper,
security agreements, documents, eminent domain proceeds, condemnation proceeds
and tort claim proceeds.
 
 
3.
All real property leased and all improvements and fixtures owned by Horsehead
Corporation and located in Beaumont, Texas and having a mailing address of Old
Highway 90, PO Box 3467, Beaumont, Texas 77704-3467, and the following Equipment
at such location:

 
Sys No
Ext
 
Class = BUILDINGS
 
000693
OFFICE EXPANSION
000
 
000694
ELECTRICAL/INSTALLATION
000
 
000695
FOUNDATIONS/CONCRETE
000
 
000696
PROCESS BUILDING
000
 
000697
RAIL SPUR
000
 
000698
M/S STACK
000
 

 
 
 

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

 
 
Sys No
Ext
 
000699
M/S IRM BUILDING
000
 
000700
M/S FEED BINS
000
 
000701
M/S BLENDING BINS
000
 
000702
BMT FIRE DAMAGE REPLACEMENT
000
 
Class = LAND IMPROVEMENTS
 
001506
Contour&Asphalt w Drain Ditch
000
 
001507
East Side RR Containmnt
000
 
Class = MACHINERY AND EQUIPMENT
 
000703
PROCESS AIR COMPRESSOR
000
 
000705
COOLING WTR SIDE STREAM
000
 
000707
PD UNLOADING SCREEN
000
 
000708
OIL SEPARATOR
000
 
000709
REMOVE & REPLACE REFR LIN
000
 
000710
RELOCATE GAS LINE & PLOT
000
 
Class = ME
 
000711
SPARE COOLING WATER PUMP
000
 
000712
ELEVATE CZO RAILCAR SCREW
000
 
000714
PROCESS AIR COMP DRYER
000
 
000715
CPU SYSTEM
000
 
000716
REACTOR TOWER LEAN TO EXT
000
 
000717
PD RAIL UNLOADING SYSTEM
000
 
000718
PROCESS EQUIP COOLING
000
 
000719
M/S PIPE & CONTROL
000
 
000720
PROCESS EQUIPMENT AIR
000
 

 
 
 

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

 
 
Sys No
Ext
 
000723
PROCESS EQUIPMENT FLUX
000
 
000724
PRODUCT BAGHOUSE
000
 
000725
M/S MISC FAB & FREIGHT
000
 
000726
M/S COMBUSTION CHAMBER
000
 
000727
SCADA COMPUTER RPLCEMENT
000
 
000728
CAT 100 FORKLIFT REPLACEMENT
000
 
001392
Process Coke Burner Trial
000
 
001393
Bag House Duct Work
000
 
001527
Asphalt Railcar loading / unloading area
000
 
001528
Install Duct section btwn reactor/baghs
000
 
001924
Rplce Railcar Loading Screw Conveyor
000
 
001925
Install Car Puller
000
 

 
(B) All proceeds and products of (A) in whatever form, including:  cash, deposit
accounts (whether or not comprised solely of proceeds), certificates of deposit,
insurance proceeds (including hazard, flood and credit insurance), negotiable
instruments and other instruments for the payment of money, chattel paper,
security agreements, documents, eminent domain proceeds, condemnation proceeds
and tort claim proceeds.
 
4.
All real property, improvements and fixtures owned by Horsehead Corporation and
located in Rockwood Tennessee, having a mailing address of 199 Truck Route,
Rockwood, Tennessee 37854 and identified by the following identification
numbers:

 
No.
 
Map No.
GP
CTL Map
Parcel
(a)
 
054J
A
54O
2400
(b)
 
054J
A
54O
2300
(c)
 
054J
A
54O
2200
(d)
 
054K
A
054K
2200

 
 
 

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

 
 
(d)
 
054K
A
054K
2200
(e)
 
054K
A
054K
2000
(f)
 
054F
A
054K
1600
(g)
 
054F
A
054K
1501
(h)
 
054F
A
054K
1500
(i)
 
054F
A
054K
1400
(j)
 
054K
A
054K
1200
(k)
 
054K
A
054K
800
(l)
 
054K
A
054K
700
(m)
 
054J
A
054J
902
(n)
 
054J
A
054J
901
(o)
 
054K
A
054K
2201
(p)
 
054K
A
054K
2100
(q)
 
054K
A
054K
500
(r)
 
054J
A
054J
100
(s)
 
054L
B
054L
100

 

 
 
(B) All proceeds and products of (A) in whatever form, including:  cash, deposit
accounts (whether or not comprised solely of proceeds), certificates of deposit,
insurance proceeds (including hazard, flood and credit insurance), negotiable
instruments and other instruments for the payment of money, chattel paper,
security agreements, documents, eminent domain proceeds, condemnation proceeds
and tort claim proceeds.

 
 
5.
All intellectual property related to TR and AZSA technology.

 
6.           All, Equipment the purchase of which has been directly financed by
Project Indebtedness, but only to the extent that and for so long as either (i)
such Equipment is encumbered by a perfected Lien securing the Project
Indebtedness or (ii) any grant of a security interest in such Equipment is
prohibited by, or constitutes a breach or default under or results in the
termination of or requires any consent not obtained under, any contract,
license, agreement, instrument or other document evidencing the Project
Indebtedness; provided, however, that upon either the payment in full and
termination of the Project Indebtedness or the release of any perfected Lien
against the applicable Equipment securing the Project Indebtedness, such
applicable Equipment shall immediately cease to be Excluded Property hereunder.
 
 
 

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

 
 
 
FOR THE AVOIDANCE OF DOUBT, NO INVENTORY OF THE BORROWER SHALL AT ANY TIME BE
INCLUDED AS EXCLUDED PROPERTY.

 
 
 
 

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

 
 
Schedule 7.3
 
Guarantees
 
None.
 
 
 
 

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

 
 
Schedule 7.7
 
Indebtedness
 
1.
Indebtedness under that certain Promissory Note dated May 29, 2009 in the
original principal amount of $6,880,000 made by Horsehead Zinc Recycling, LLC to
the order of Banc of America CDE III, LLC and any other Indebtedness of
Horsehead Zinc Recycling owing under any documents executed in connection with
such Promissory Note.

 
 
 

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

 
 

 
September 28, 2011

 
Horsehead Corporation
4955 Steubenville Pike, Suite 405
Pittsburgh, Pennsylvania 15205
 
Attention: Robert Scherich
 
Re:
Credit facility provided to Horsehead Corporation, a Delaware corporation (the
"Borrower"), by PNC Bank, National Association ("PNC") and various other
financial institutions from time to time (PNC and such other financial
institutions are each, a "Lender" and collectively, the "Lenders"), and PNC, as
agent for Lenders (in such capacity, the "Agent")

 
Dear Mr. Scherich:
 
Reference is made to the Credit Agreement, dated of even date herewith, by and
among the Borrower, the Guarantors (as defined therein) party thereto, the
Lenders party thereto and the Agent (the "Credit Agreement"). Capitalized teems
used herein and not otherwise defined shall have the meanings assigned to them
in the Credit Agreement.
 
Pursuant to the terms of the Credit Agreement, it is a condition precedent to
the Lenders' obligations to make the initial Advances under the Credit Agreement
that the Loan Parties deliver to Agent, among other things, each in form and
substance satisfactory to Agent: (i) a tax lien certificate of the Borrower from
the State of South Carolina (the "Tax Lien Certificate"), and (ii) a certificate
of liability insurance of the Borrower that, among other things, names the
Agent, on behalf of the Lenders, as an additional insured (the "Insurance
Certificate") (the Tax Lien Certificate and the Insurance Certificate are each,
an "Open Item" and collectively, the "Open Items").
 
As of the date hereof, Agent has not received, in form and substance
satisfactory to Agent, the Open Items.
 
Notwithstanding the failure of Loan Parties to satisfy the above conditions with
respect to the Open Items, if (i) all of the other conditions precedent to the
Credit Agreement are met, and (ii) an Event of Default or Default has not
occurred under the Credit Agreement or any of the Other Documents, the Lenders
will make the Advances in accordance with the terms of the Credit Agreement;
provided, however, that if the Loan Parties fail to provide either Open Item on
or before October 28, 2011, any such failure may, at the option of the Agent, be
deemed to be an Event of Default by the Loan Parties under the Credit Agreement.
 
This letter agreement shall constitute a rider to and form a part of the Credit
Agreement, as the same may be amended, restated, modified or supplemented from
time to time.

 
 

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

 
 
If the foregoing terms and conditions are acceptable to you, please indicate
your acceptance by signing in the space indicated below.
 

 
PNC Bank, National Association,
 
as a Agent and as Lender
  By: signature [hoffman.jpg]  
Name: Douglas Hoffman
 
Title: Vice President

 
 
 

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

 
 
Signature [hensler.jpg]