Exhibit 10.3

$40,000,000 REVOLVING CREDIT FACILITY

$10,700,000 EPA/DOJ LETTER OF CREDIT FACILITY

CREDIT AGREEMENT

by and among

SL INDUSTRIES, INC.

AND THE OTHER ENTITIES LISTED AS BORROWERS ON THE SIGNATURE PAGES

HERETO OR JOINED AS A BORROWER FROM TIME TO TIME

and

THE LENDERS PARTY HERETO

and

PNC BANK, NATIONAL ASSOCIATION, as Administrative Agent

Dated as of August 9, 2012

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

TABLE OF CONTENTS

 

     Page     

1. CERTAIN DEFINITIONS

     1   

1.1 Certain Definitions

     1   

1.2 Construction

     22   

1.3 Accounting Principles; Changes in GAAP

     22   

2. REVOLVING CREDIT FACILITY

     23   

2.1 Revolving Credit Commitments

     23   

2.1.1 Revolving Credit Loans

     23   

2.1.2 Reserved

     23   

2.2 Nature of Lenders’ Obligations with Respect to Revolving Credit Loans

     23   

2.3 Commitment Fees

     23   

2.4 Facility Fees

     24   

2.5 Revolving Credit Loan Requests

     24   

2.5.1 Revolving Credit Loan Requests

     24   

2.5.2 Reserved

     24   

2.6 Making Revolving Credit Loans; Presumptions by the Administrative Agent;
Repayment of Revolving Credit Loans

     24   

2.6.1 Making Revolving Credit Loans

     24   

2.6.2 Presumptions by the Administrative Agent

     25   

2.6.3 Reserved

     25   

2.6.4 Repayment of Revolving Credit Loans

     25   

2.6.5 Reserved

     25   

2.6.6 Reserved

     25   

2.7 Notes

     25   

2.8 Use of Proceeds

     25   

2.9 Letter of Credit Subfacility

     26   

2.9.1 Issuance of Letters of Credit

     26   

2.9.2 Letter of Credit Fees

     27   

2.9.3 Disbursements, Reimbursement

     27   

2.9.4 Repayment of Participation Advances

     28   

2.9.5 Documentation

     29   

2.9.6 Determinations to Honor Drawing Requests

     29   

2.9.7 Nature of Participation and Reimbursement Obligations

     29   

2.9.8 Indemnity

     31   

2.9.9 Liability for Acts and Omissions

     31   

2.9.10 Issuing Lender Reporting Requirements

     32   

2.9.11 Cash Collateral

     32   

2.10 Defaulting Lenders

     33   

2.11 Reduction of Revolving Credit Commitment

     34   

2.12 Increase in Revolving Credit Commitments

     35   

2.12.1 Increasing Lenders and New Lenders

     35   

2.12.2 Treatment of Outstanding Loans and Letters of Credit

     36   

 

i

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

3. RESERVED

     36   

4. INTEREST RATES

     36   

4.1 Interest Rate Options

     36   

4.1.1 Revolving Credit Interest Rate Options

     36   

4.1.2 Reserved

     37   

4.1.3 Rate Quotations

     37   

4.2 Interest Periods

     37   

4.2.1 Amount of Borrowing Tranche

     37   

4.2.2 Renewals

     37   

4.3 Interest After Default

     37   

4.3.1 Letter of Credit Fees, Interest Rate

     37   

4.3.2 Other Obligations

     37   

4.3.3 Acknowledgment

     37   

4.4 LIBOR Rate Unascertainable; Illegality; Increased Costs; Deposits Not
Available

     38   

4.4.1 Unascertainable

     38   

4.4.2 Illegality; Increased Costs; Deposits Not Available

     38   

4.4.3 Administrative Agent’s and Lender’s Rights

     39   

4.5 Selection of Interest Rate Options

     39   

5. PAYMENTS

     39   

5.1 Payments

     39   

5.2 Pro Rata Treatment of Lenders

     40   

5.3 Sharing of Payments by Lenders

     40   

5.4 Presumptions by Administrative Agent

     40   

5.5 Interest Payment Dates

     41   

5.6 Voluntary Prepayments

     41   

5.6.1 Right to Prepay

     41   

5.6.2 Replacement of a Lender

     42   

5.7 Mandatory Prepayments

     42   

5.7.1 Sale of Assets/Issuance of Indebtedness

     42   

5.7.2 Application Among Interest Rate Options

     43   

5.8 Increased Costs

     43   

5.8.1 Increased Costs Generally

     43   

5.8.2 Capital Requirements

     44   

5.8.3 Certificates for Reimbursement; Repayment of Outstanding Loans; Borrowing
of New Loans

     44   

5.8.4 Delay in Requests

     44   

5.9 Taxes

     44   

5.9.1 Issuing Lender

     44   

5.9.2 Payments Free of Taxes

     44   

5.9.3 Payment of Other Taxes by the Loan Parties

     45   

5.9.4 Indemnification by the Loan Parties

     45   

5.9.5 Indemnification by the Lenders

     45   

5.9.6 Evidence of Payments

     45   

 

ii

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

5.9.7 Status of Lenders

     46   

5.9.8 Treatment of Certain Refunds

     48   

5.9.9 Survival

     48   

5.10 Indemnity

     48   

5.11 Settlement Date Procedures

     49   

6. REPRESENTATIONS AND WARRANTIES

     49   

6.1 Representations and Warranties

     49   

6.1.1 Organization and Qualification; Power and Authority; Compliance With Laws;
Title to Properties; Event of Default

     49   

6.1.2 Subsidiaries and Owners; Investment Companies

     50   

6.1.3 Validity and Binding Effect

     50   

6.1.4 No Conflict; Material Agreements; Consents

     50   

6.1.5 Litigation

     51   

6.1.6 Financial Statements

     51   

6.1.7 Margin Stock

     51   

6.1.8 Full Disclosure

     52   

6.1.9 Taxes

     52   

6.1.10 Patents, Trademarks, Copyrights, Licenses, Etc.

     52   

6.1.11 Liens in the Collateral

     52   

6.1.12 Insurance

     52   

6.1.13 ERISA Compliance

     52   

6.1.14 Environmental Matters

     53   

6.1.15 Solvency

     53   

6.2 Updates to Schedules

     53   

7. CONDITIONS OF LENDING AND ISSUANCE OF LETTERS OF CREDIT

     53   

7.1 First Loans and Letters of Credit

     53   

7.1.1 Deliveries

     53   

7.1.2 Payment of Fees

     55   

7.2 Each Loan or Letter of Credit

     55   

8. COVENANTS

     55   

8.1 Affirmative Covenants

     55   

8.1.1 Preservation of Existence, Etc.

     55   

8.1.2 Payment of Liabilities, Including Taxes, Etc.

     55   

8.1.3 Maintenance of Insurance

     56   

8.1.4 Maintenance of Properties and Leases

     56   

8.1.5 Visitation Rights

     56   

8.1.6 Keeping of Records and Books of Account

     56   

8.1.7 Compliance with Laws; Use of Proceeds

     56   

8.1.8 Further Assurances

     56   

8.1.9 Anti-Terrorism Laws

     57   

8.1.10 Deposit and Securities Accounts

     57   

8.2 Negative Covenants

     57   

 

iii

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

8.2.1 Indebtedness

     57   

8.2.2 Liens; Lien Covenants

     58   

8.2.3 Guaranties

     58   

8.2.4 Loans and Investments

     58   

8.2.5 Dividends and Related Distributions

     59   

8.2.6 Liquidations, Mergers, Consolidations, Acquisitions

     59   

8.2.7 Dispositions of Assets or Subsidiaries

     59   

8.2.8 Affiliate Transactions

     60   

8.2.9 Subsidiaries, Partnerships and Joint Ventures

     61   

8.2.10 Continuation of or Change in Business

     61   

8.2.11 Fiscal Year

     61   

8.2.12 Issuance of Stock

     61   

8.2.13 Changes in Organizational Documents

     62   

8.2.14 Capital Expenditures and Leases

     62   

8.2.15 Minimum Fixed Charge Coverage Ratio

     62   

8.2.16 Maximum Leverage Ratio

     62   

8.3 Reporting Requirements

     62   

8.3.1 Quarterly Financial Statements

     62   

8.3.2 Annual Financial Statements

     63   

8.3.3 Certificate of the Borrower

     63   

8.3.4 Notices

     63   

9. DEFAULT

     64   

9.1 Events of Default

     64   

9.1.1 Payments Under Loan Documents

     64   

9.1.2 Breach of Warranty

     64   

9.1.3 Breach of Negative Covenants or Visitation Rights

     64   

9.1.4 Breach of Other Covenants

     64   

9.1.5 Defaults in Other Agreements or Indebtedness

     65   

9.1.6 Final Judgments or Orders

     65   

9.1.7 Loan Document Unenforceable

     65   

9.1.8 Uninsured Losses; Proceedings Against Assets

     65   

9.1.9 Events Relating to Plans and Benefit Arrangements

     65   

9.1.10 Change of Control

     66   

9.1.11 Relief Proceedings

     66   

9.2 Consequences of Event of Default

     66   

9.2.1 Events of Default Other Than Bankruptcy, Insolvency or Reorganization
Proceedings

     66   

9.2.2 Bankruptcy, Insolvency or Reorganization Proceedings

     66   

9.2.3 Set-off

     67   

9.2.4 Application of Proceeds

     67   

10. THE ADMINISTRATIVE AGENT

     68   

10.1 Appointment and Authority

     68   

10.2 Rights as a Lender

     68   

10.3 Exculpatory Provisions

     68   

 

iv

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

10.4 Reliance by Administrative Agent

     69   

10.5 Delegation of Duties

     69   

10.6 Resignation of Administrative Agent

     70   

10.7 Non-Reliance on Administrative Agent and Other Lenders

     70   

10.8 Reserved

     70   

10.9 Reserved

     71   

10.10 Authorization to Release Collateral and Guarantors

     71   

10.11 No Reliance on Administrative Agent's Customer Identification Program

     71   

11. MISCELLANEOUS

     71   

11.1 Modifications, Amendments or Waivers

     71   

11.1.1 Increase of Commitment

     71   

11.1.2 Extension of Payment; Reduction of Principal Interest or Fees;
Modification of Terms of Payment

     71   

11.1.3 Release of Collateral or Guarantor

     72   

11.1.4 Miscellaneous

     72   

11.2 No Implied Waivers; Cumulative Remedies

     72   

11.3 Expenses; Indemnity; Damage Waiver

     72   

11.3.1 Costs and Expenses

     72   

11.3.2 Indemnification by the Borrower

     73   

11.3.3 Reimbursement by Lenders

     73   

11.3.4 Waiver of Consequential Damages, Etc.

     74   

11.3.5 Payments

     74   

11.4 Holidays

     74   

11.5 Notices; Effectiveness; Electronic Communication

     74   

11.5.1 Notices Generally

     74   

11.5.2 Electronic Communications

     75   

11.5.3 Change of Address, Etc.

     75   

11.6 Severability

     75   

11.7 Duration; Survival

     75   

11.8 Successors and Assigns

     76   

11.8.1 Successors and Assigns Generally

     76   

11.8.2 Assignments by Lenders

     76   

11.8.3 Register

     77   

11.8.4 Participations

     78   

11.8.5 Certain Pledges; Successors and Assigns Generally

     79   

11.9 Confidentiality

     79   

11.9.1 General

     79   

11.9.2 Sharing Information With Affiliates of the Lenders

     79   

11.10 Counterparts; Integration; Effectiveness

     80   

11.10.1 Counterparts; Integration; Effectiveness

     80   

11.11 CHOICE OF LAW; SUBMISSION TO JURISDICTION; WAIVER OF VENUE; SERVICE OF
PROCESS; WAIVER OF JURY TRIAL

     80   

11.11.1 Governing Law

     80   

11.11.2 SUBMISSION TO JURISDICTION

     80   

11.11.3 WAIVER OF VENUE

     81   

11.11.4 SERVICE OF PROCESS

     81   

11.11.5 WAIVER OF JURY TRIAL

     81   

11.12 USA Patriot Act Notice

     81   

 

v

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

LIST OF SCHEDULES AND EXHIBITS

 

SCHEDULES      SCHEDULE 1.1(A)   —      PRICING GRID SCHEDULE 1.1(B)   —     
COMMITMENTS OF LENDERS AND ADDRESSES FOR NOTICES SCHEDULE 1.1(P)   —     
PERMITTED LIENS SCHEDULE 6.1.1   —      QUALIFICATIONS TO DO BUSINESS SCHEDULE
6.1.2   —      SUBSIDIARIES SCHEDULE 6.1.4      REQUIRED CONSENTS SCHEDULE 6.1.5
     LITIGATION SCHEDULE 6.1.7      MATERIAL ADVERSE CHANGE SCHEDULE 6.1.10     
INTELLECTUAL PROPERTY SCHEDULE 6.1.14   —      ENVIRONMENTAL DISCLOSURES
SCHEDULE 8.1.3   —      INSURANCE REQUIREMENTS RELATING TO COLLATERAL SCHEDULE
8.2.1   —      PERMITTED INDEBTEDNESS SCHEDULE 9.1.6   —      FINAL JUDGMENTS OR
ORDERS EXHIBITS      EXHIBIT 1.1(A)   —      ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT 1.1(G)(1)   —      GUARANTOR JOINDER EXHIBIT 1.1(G)(2)   —      GUARANTY
AGREEMENT EXHIBIT 1.1(I)(2)   —      INTERCOMPANY SUBORDINATION AGREEMENT
EXHIBIT 1.1(N)(1)   —      REVOLVING CREDIT NOTE EXHIBIT 2.5   —      LENDER
JOINDER EXHIBIT 2.5.1   —      LOAN REQUEST EXHIBIT 5.9.7(A)   —      U.S. TAX
COMPLIANCE CERTIFICATE (For Foreign Lenders That Are Not Partnerships For U.S.
Federal Income Tax Purposes) EXHIBIT 5.9.7(B)   —      U.S. TAX COMPLIANCE
CERTIFICATE (For Foreign Participants That Are Not Partnerships For U.S. Federal
Income Tax Purposes) EXHIBIT 5.9.7(C)   —      U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax
Purposes) EXHIBIT 5.9.7(D)   —      U.S. TAX COMPLIANCE CERTIFICATE (For Foreign
Lenders That Are Partnerships For U.S. Federal Income Tax Purposes) EXHIBIT
8.3.3   —      QUARTERLY COMPLIANCE CERTIFICATE

 

 

vi

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

CREDIT AGREEMENT

THIS CREDIT AGREEMENT (as hereafter amended, the “Agreement”) is dated as of
August 9, 2012 and is made by and among SL INDUSTRIES, INC., a New Jersey
corporation (the “Parent Borrower”) and each of the entities listed as a
Borrower on the signature pages (together with the Parent Borrower, collectively
and individually as the context may require, “Borrower”), each of the GUARANTORS
(as hereinafter defined), the LENDERS (as hereinafter defined), and PNC BANK,
NATIONAL ASSOCIATION, in its capacity as administrative agent for the Lenders
under this Agreement (hereinafter referred to in such capacity as the
“Administrative Agent”).

The Borrower has requested the Lenders to provide (i) a revolving credit
facility to the Borrower in an aggregate principal amount not to exceed
$40,000,000 (or such other amount pursuant to the terms of Section 2.12 hereof)
and (ii) up to a $10,700,000 letter of credit. In consideration of their mutual
covenants and agreements hereinafter set forth and intending to be legally bound
hereby, the parties hereto covenant and agree as follows:

1. CERTAIN DEFINITIONS

1.1 Certain Definitions. In addition to words and terms defined elsewhere in
this Agreement, the following words and terms shall have the following meanings,
respectively, unless the context hereof clearly requires otherwise:

Administrative Agent shall mean PNC Bank, National Association, and its
successors and assigns.

Affiliate as to any Person shall mean any other Person (i) which directly or
indirectly controls, is controlled by, or is under common control with such
Person, (ii) which beneficially owns or holds 10% or more of any class of the
voting or other equity interests of such Person, or (iii) 10% or more of any
class of voting interests or other equity interests of which is beneficially
owned or held, directly or indirectly, by such Person; provided, however, that
Mario J. Gabelli and the various entities which he directly or indirectly
controls or for which he acts as chief investment officer (his affiliates) shall
not be deemed Affiliates of the Loan Parties.

Anti-Terrorism Laws shall mean any Laws relating to terrorism or money
laundering, including Executive Order No. 13224, the USA Patriot Act, the Laws
comprising or implementing the Bank Secrecy Act, and the Laws administered by
the United States Treasury Department’s Office of Foreign Asset Control (as any
of the foregoing Laws may from time to time be amended, renewed, extended, or
replaced).

Applicable Commitment Fee Rate shall mean the percentage rate per annum based on
the Leverage Ratio then in effect according to the pricing grid on Schedule
1.1(A) below the heading “Commitment Fee.”

Applicable Letter of Credit Fee Rate shall mean (i) the percentage rate per
annum based on the Leverage Ratio then in effect according to the pricing grid
on Schedule 1.1(A) below the heading “Letter of Credit Fee” with respect to each
Letter of Credit (other than the DOJ/EPA Letter of Credit) and (ii) one percent
(1.0%) per annum with respect to the DOJ/EPA Letter of Credit.

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

Applicable Margin shall mean, as applicable:

(A) the percentage spread to be added to the Base Rate applicable to Revolving
Credit Loans under the Base Rate Option based on the Leverage Ratio then in
effect according to the pricing grid on Schedule 1.1(A) below the heading
“Revolving Credit Base Rate Spread”, or

(B) the percentage spread to be added to the LIBOR Rate applicable to Revolving
Credit Loans under the LIBOR Rate Option based on the Leverage Ratio then in
effect according to the pricing grid on Schedule 1.1(A) below the heading
“Revolving Credit LIBOR Rate Spread”.

Approved Fund shall mean any fund that is engaged in making, purchasing, holding
or investing in bank loans and similar extensions of credit in the ordinary
course of business and that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.

Assignment and Assumption Agreement shall mean an assignment and assumption
agreement entered into by a Lender and an assignee permitted under Section 11.8
[Successors and Assigns], in substantially the form of Exhibit 1.1(A).

Authorized Officer shall mean, with respect to any Loan Party, the Chief
Executive Officer, President, Chief Financial Officer, Treasurer, Assistant
Treasurer, Secretary or Assistant Secretary of such Loan Party or such other
individuals, designated by written notice to the Administrative Agent from the
Borrower, authorized to execute notices, reports and other documents on behalf
of the Loan Parties required hereunder. The Borrower may amend such list of
individuals from time to time by giving written notice of such amendment to the
Administrative Agent.

Base Rate shall mean, for any day, a fluctuating per annum rate of interest
equal to the highest of (a) the Federal Funds Open Rate, plus 0.5%, and (b) the
Prime Rate, and (c) the Daily LIBOR Rate, plus 100 basis points (1.0%). Any
change in the Base Rate (or any component thereof) shall take effect at the
opening of business on the day such change occurs.

Base Rate Option shall mean the option of the Borrower to have Loans bear
interest at the rate and under the terms set forth in Section 4.1.1(i)
[Revolving Credit Interest Rate Options].

Borrower shall have the meaning set forth in the preamble.

Borrowing Date shall mean, with respect to any Loan, the date for the making
thereof or the renewal or conversion thereof at or to the same or a different
Interest Rate Option, which shall be a Business Day.

 

2

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

Borrowing Tranche shall mean specified portions of Loans outstanding as follows:
(i) any Loans to which a LIBOR Rate Option applies which become subject to the
same Interest Rate Option under the same Loan Request by the Borrower and which
have the same Interest Period shall constitute one Borrowing Tranche, and
(ii) all Loans to which a Base Rate Option applies shall constitute one
Borrowing Tranche.

Business Day shall mean any day other than a Saturday or Sunday or a legal
holiday on which commercial banks are authorized or required to be closed for
business in Pittsburgh, Pennsylvania and if the applicable Business Day relates
to any Loan to which the LIBOR Rate Option applies, such day must also be a day
on which dealings are carried on in the London interbank market.

Cash Collateralize shall mean to pledge and deposit with or deliver to
Administrative Agent, for the benefit of each Issuing Lender and the Lenders, as
collateral for the Letter of Credit Obligations, cash or deposit account
balances pursuant to documentation satisfactory to Administrative Agent and each
Issuing Lender (which documents are hereby consented to by the Lenders) in an
amount equal to 105% of the Letter of Credit Obligations. Such cash collateral
shall be maintained in blocked, non-interesting bearing deposit accounts at the
Administrative Agent.

Change in Law shall mean the occurrence, after the date of this Agreement, of
any of the following: (a) the adoption or taking effect of any Law, (b) any
change in any Law or in the administration, interpretation, implementation or
application thereof by any Official Body or (c) the making or issuance of any
request, rule, guideline or directive (whether or not having the force of Law)
by any Official Body; provided that notwithstanding anything herein to the
contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and
all requests, rules, regulations, guidelines, interpretations or directives
thereunder or issued in connection therewith (whether or not having the force of
Law) and (y) all requests, rules, regulations, guidelines, interpretations or
directives promulgated by the Bank for International Settlements, the Basel
Committee on Banking Supervision (or any successor or similar authority) or the
United States or foreign regulatory authorities (whether or not having the force
of Law), in each case pursuant to Basel III, shall in each case be deemed to be
a Change in Law regardless of the date enacted, adopted, issued, promulgated or
implemented.

Closing Date shall mean the Business Day on which the first Loan shall be made,
which shall be August 9, 2012.

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 the collateral under the (i) Security Agreement
(ii) Pledge Agreement and (iii) Patent, Trademark and Copyright Security
Agreement.

Commitment shall mean as to any Lender the aggregate of its Revolving Credit
Commitment and DOJ/EPA Commitment, and Commitments shall mean the aggregate of
the Revolving Credit Commitments and DOJ/EPA Commitments of all of the Lenders.

 

3

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

Commitment Fee shall have the meaning specified in Section 2.3 [Commitment
Fees].

Compliance Certificate shall have the meaning specified in Section 8.3.3
[Certificate of the Borrower].

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

Consolidated Adjusted EBITDA for any period of determination shall mean the
Consolidated EBITDA of Borrower and any Person acquired pursuant to a Permitted
Acquisition to the extent (i) such Person is a domestic or foreign Subsidiary
that becomes a Loan Party hereunder in connection with such Permitted
Acquisition and (ii) such historical Consolidated EBITDA of such Person is
supported by audited financial statements or an independent third party due
diligence report (i.e. Quality of Earnings Report) in form and substance
satisfactory to Administrative Agent; provided, further, that Administrative
Agent may make adjustments to such historical information as it determines in
its reasonable discretion.

Consolidated EBITDA for any period of determination shall mean the sum of

 

  (a) net income, plus

 

  (b) the following to the extent deducted in the computation of net income,
(i) depreciation expense, (ii) amortization expense, (iii) interest expense,
(iv) taxes, (v) non-cash restructuring charges that have been approved in
writing by Administrative Agent; (vi) all other non-cash charges reducing net
income for such period including, but not limited to, (1) non-cash charges
attributable to the grant, exercise or repurchase of stock, restricted stock,
restricted stock units or options for shares of capital stock (or similar equity
interests) to or from employees, directors, Related Parties or consultants,
(2) unrealized losses resulting solely from the marking of market of derivative
securities, including foreign exchange forward contracts, (3) non-cash charges
associated with amortization or write-off of deferred financing costs, and
(4) non-cash charges associated with purchase accounting write-up of inventory,
but excluding non-cash charges that require an accrual of or a reserve for cash
charges for any future periods and normally occurring accruals (other than with
respect to liabilities arising under Environmental Laws); plus

 

  (c) non-cash charges with respect to liabilities arising under Environmental
Laws that require an accrual of or a reserve for cash charges for any future
periods; minus

 

  (d) the amount of all cash payments made during the applicable period to the
extent such payments relate to non-cash charges with respect to liabilities
arising under Environmental Laws that were added back in determining net income
for such period or any prior period, in each case of the Borrower and its
Subsidiaries for such period determined and consolidated in accordance with
GAAP.

 

4

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

Daily LIBOR Rate shall mean, for any day, the rate per annum determined by the
Administrative Agent by dividing (x) the Published Rate by (y) a number equal to
1.00 minus the LIBOR Reserve Percentage on such day.

Defaulting Lender shall mean any Lender that (a) has failed, within two Business
Days of the date required to be funded or paid, to (i) fund any portion of its
Loans, (ii) fund any portion of its participations in Letters of Credit or
(iii) pay over to the Administrative Agent, the Issuing Lender or any Lender any
other amount required to be paid by it hereunder, unless, in the case of clause
(i) above, such Lender notifies the Administrative Agent in writing that such
failure is the result of such Lender’s good faith determination that a condition
precedent to funding (specifically identified and including the particular
default, if any) has not been satisfied, (b) has notified the Borrower or the
Administrative Agent in writing, or has made a public statement to the effect,
that it does not intend or expect to comply with any of its funding obligations
under this Agreement (unless such writing or public statement indicates that
such position is based on such Lender’s good faith determination that a
condition precedent (specifically identified and including the particular
default, if any) to funding a loan under this Agreement cannot be satisfied) or
generally under other agreements in which it commits to extend credit, (c) has
failed, within two Business Days after request by the Administrative Agent,
acting in good faith, to provide a certification in writing from an authorized
officer of such Lender that it will comply with its obligations (and is
financially able to meet such obligations) to fund prospective Loans and
participations in then outstanding Letters of Credit under this Agreement,
provided that such Lender shall cease to be a Defaulting Lender pursuant to this
clause (c) upon the Administrative Agent’s receipt of such certification in form
and substance satisfactory to the Administrative Agent, (d) has become the
subject of a Bankruptcy Event or (e) has failed at any time to comply with the
provisions of Section 5.3 with respect to purchasing participations from the
other Lenders, whereby such Lender’s share of any payment received, whether by
setoff or otherwise, is in excess of its Ratable Share of such payments due and
payable to all of the Lenders.

As used in this definition and in Section 2.10 [Defaulting Lenders], the term
“Bankruptcy Event” means, with respect to any Person, such Person or such
Person’s direct or indirect parent company becomes the subject of a bankruptcy
or insolvency proceeding, or has had a receiver, conservator, trustee,
administrator, custodian, assignee for the benefit of creditors or similar
Person charged with the reorganization or liquidation of its business appointed
for it, or, in the good faith determination of the Administrative Agent, has
taken any action in furtherance of, or indicating its consent to, approval of,
or acquiescence in, any such proceeding or appointment, provided that a
Bankruptcy Event shall not result solely by virtue of any ownership interest, or
the acquisition of any ownership interest, in such Person or such Person’s
direct or indirect parent company by an Official Body or instrumentality thereof
if, and only if, such ownership interest does not result in or provide such
Person with immunity from the jurisdiction of courts within the United States or
from the enforcement of judgments or writs of attachment on its assets or permit
such Person (or such Official Body or instrumentality) to reject, repudiate,
disavow or disaffirm any contracts or agreements made by such Person.

 

5

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

DOJ/EPA Agreements shall mean those certain settlement agreements with the
United States of America on behalf of the Administrator of the United States
Environmental Protection Agency (the “EPA”) and the United States Department of
Justice (the “DOJ”), the EPA and the DOJ and Borrower regarding certain
remediation and past costs for environmental liabilities with respect to the
premises known as the Puchack Well Field Superfund Site.

DOJ/EPA Commitment shall mean, as to any Lender at any time, the amount
initially set forth opposite its name on Schedule 1.1(B) in the column labeled
“Amount of Commitment for DOJ/EPA Letter of Credit,” as such Commitment is
thereafter assigned or modified and DOJ/EPA Commitments shall mean the aggregate
DOJ/EPA Commitments of all of the Lenders.

DOJ/EPA Letter of Credit shall mean a letter of credit issued to Borrower
pursuant to Section 2.9.1.2 [Issuances of Letters of Credit].

DOJ/EPA Letter of Credit Obligations shall mean, as of any date of
determination, the aggregate amount available to be drawn under the DOJ/EPA
Letter of Credit on such date (if such DOJ/EPA Letter of Credit shall increase
in amount automatically in the future, such aggregate amount available to be
drawn shall currently give effect to any such future increase) plus the
aggregate Reimbursement Obligations and Letter of Credit Borrowings with respect
to such DOJ/EPA Letter of Credit on such date.

DOJ/EPA Loan shall mean a loan made by Lenders to Borrower pursuant to
Section 2.9.3.1 [Disbursement, Reimbursement].

Dollar, Dollars, U.S. Dollars and the symbol $ shall mean lawful money of the
United States of America.

Drawing Date shall have the meaning specified in Section 2.9.3.1 [Disbursements,
Reimbursement].

Environmental Laws shall mean all applicable federal, state, local, tribal,
territorial and foreign Laws (including common law), constitutions, statutes,
treaties, regulations, rules, ordinances and codes and any consent decrees,
settlement agreements, judgments, orders, directives, policies or programs
issued by or entered into with an Official Body pertaining or relating to:
(i) pollution or pollution control; (ii) protection of human health from
exposure to regulated substances; (iii) protection of the environment and/or
natural resources; (iv) employee safety in the workplace; (v) the presence, use,
management, generation, manufacture, processing, extraction, treatment,
recycling, refining, reclamation, labeling, packaging, sale, transport, storage,
collection, distribution, disposal or release or threat of release of regulated
substances; (vi) the presence of contamination; (vii) the protection of
endangered or threatened species; and (viii) the protection of environmentally
sensitive areas.

Equity Interests shall have the meaning specified in Section 6.1.2.

ERISA shall mean the Employee Retirement Income Security Act of 1974, 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.

 

6

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

ERISA Affiliate shall mean, at any time, any trade or business (whether or not
incorporated) under common control with the Borrower and are treated as a single
employer under Section 414 of the Code.

ERISA Event shall mean (a) a reportable event (under Section 4043 of ERISA and
regulations thereunder) with respect to a Pension Plan; (b) a withdrawal by
Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of
ERISA during a plan year in which it was a substantial employer (as defined in
Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as
such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial
withdrawal by Borrower or any ERISA Affiliate from a Multiemployer Plan or
notification that a Multiemployer Plan is in reorganization; (d) the filing of a
notice of intent to terminate, the treatment of a Plan amendment as a
termination under Sections 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan;
(e) an event or condition which constitutes grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under
Title IV of ERISA, other than for PBGC premiums due but not delinquent under
Section 4007 of ERISA, upon Borrower or any ERISA Affiliate.

ERISA Group shall mean, at any time, the Borrower 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
the Borrower, are treated as a single employer under Section 414 of the Internal
Revenue Code.

Event of Default shall mean any of the events described in Section 9.1 [Events
of Default] and referred to therein as an “Event of Default.”

Excluded Taxes shall mean any of the following Taxes imposed on or with respect
to a Recipient or required to be withheld or deducted from a payment to a
Recipient, (i) Taxes imposed on or measured by net income (however denominated),
franchise Taxes, and branch profits Taxes, in each case, (a) imposed as a result
of such Recipient being organized under the laws of, or having its principal
office or, in the case of any Lender, its applicable lending office located in,
the jurisdiction imposing such Tax (or any political subdivision thereof) or
(b) that are Other Connection Taxes, (ii) in the case of a Lender, U.S. federal
withholding Taxes imposed on amounts payable to or for the account of such
Lender with respect to an applicable interest in a Loan or Commitment pursuant
to a law in effect on the date on which (a) such Lender acquires such interest
in such Loan or Commitment (other than pursuant to an assignment request by the
Borrower under Section 5.6.2 [Replacement of a Lender]) or (b) such Lender
changes its lending office, except in each case to the extent that, pursuant to
Section 5.9.7 [Status of Lenders], amounts with respect to such Taxes were
payable either to such Lender’s assignor immediately before such Lender became a
party hereto or to such Lender immediately before it changed its lending office,
(iii) Taxes attributable to such Recipient’s failure to comply with 5.9.7
[Status of Lenders], and (iv) any U.S. federal withholding Taxes imposed under
FATCA (except to the extent imposed due to the failure of the Borrower to
provide documentation or information to the IRS).

 

7

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

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.

Expiration Date shall mean, with respect to the Revolving Credit Commitments,
August 9, 2016.

Facility Fees shall mean the fees referred to in Section 2.4 [Facility Fees].

FATCA shall mean Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with) and any current or future
regulations or official interpretations thereof.

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
1/100 of 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 the Administrative Agent (for purposes of this definition,
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 the Administrative Agent 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 hereunder with respect
to any advance to which the Federal Funds Open Rate applies will change
automatically without notice to the Borrower, effective on the date of any such
change.

Fixed Charge Coverage Ratio shall mean the ratio of Consolidated EBITDA to Fixed
Charges.

 

8

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

Fixed Charges shall mean for any period of determination the sum of interest
expense, income taxes actually paid in cash, scheduled principal installments on
Indebtedness (as adjusted for prepayments), capital expenditures and payments
under capitalized leases, in each case of the Borrower and its Subsidiaries for
such period determined and consolidated in accordance with GAAP.

Foreign Lender shall mean (i) if the Borrower is a U.S. Person, a Lender that is
not a U.S. Person, and (ii) if the Borrower is not a U.S. Person, a Lender that
is resident or organized under the Laws of a jurisdiction other than that in
which the Borrower is resident for tax purposes.

GAAP shall mean generally accepted accounting principles as are in effect from
time to time, subject to the provisions of Section 1.3 [Accounting Principles],
and applied on a consistent basis both as to classification of items and
amounts.

Guarantor shall mean each of the parties to this Agreement which is designated
as a “Guarantor” on the signature page hereof and each other Person which joins
this Agreement as a Guarantor after the date hereof.

Guarantor Joinder shall mean a joinder by a Person as a Guarantor under the Loan
Documents in the form of Exhibit 1.1(G)(1).

Guaranty of any Person shall mean any obligation of such Person guaranteeing or
in effect guaranteeing any liability or obligation of any other Person in any
manner, whether directly or indirectly, including any agreement to indemnify or
hold harmless any other Person, any performance bond or other suretyship
arrangement and any other form of assurance against loss, except endorsement of
negotiable or other instruments for deposit or collection in the ordinary course
of business.

Guaranty Agreement shall mean the Continuing Agreement of Guaranty and
Suretyship in substantially the form of Exhibit 1.1(G)(2) executed and delivered
by each of the Guarantors.

Indebtedness shall mean, as to any Person at any time, 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) any other transaction (including forward sale or purchase
agreements, capitalized leases 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 sixty (60) days past due or bond contracts unless drawn upon or
claims have been made thereunder), or (vi) any Guaranty of Indebtedness for
borrowed money.

Indemnified Taxes shall mean (i) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any obligation of any Loan
Party under any Loan Document, and (ii) to the extent not otherwise described in
the preceding clause (i), Other Taxes.

 

9

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

Indemnitee shall have the meaning specified in Section 11.3.2 [Indemnification
by the Borrower].

Information shall mean all information received from the Loan Parties or any of
their Subsidiaries relating to the Loan Parties or any of such Subsidiaries or
any of their respective businesses, other than any such information that is
available to the Administrative Agent, any Lender or the Issuing Lender on a
non-confidential basis prior to disclosure by the Loan Parties or any of their
Subsidiaries, provided that, in the case of information received from the Loan
Parties or any of their Subsidiaries after the date of this Agreement, such
information is clearly identified at the time of delivery as confidential.

Insolvency Proceeding shall mean, with respect to any Person, (a) a case, action
or proceeding with respect to such Person (i) before any court or any other
Official Body under any bankruptcy, insolvency, reorganization or other similar
Law now or hereafter in effect, or (ii) for the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator, conservator (or similar
official) of any Loan Party or otherwise relating to the liquidation,
dissolution, winding-up or relief of such Person, or (b) any general assignment
for the benefit of creditors, composition, marshaling of assets for creditors,
or other, similar arrangement in respect of such Person’s creditors generally or
any substantial portion of its creditors; undertaken under any Law.

Intercompany Subordination Agreement shall mean a Subordination Agreement among
the Loan Parties in the form attached hereto as Exhibit 1.1(I)(2).

Interest Period shall mean the period of time selected by the Borrower in
connection with (and to apply to) any election permitted hereunder by the
Borrower to have Revolving Credit Loans bear interest under the LIBOR Rate
Option. Subject to the last sentence of this definition, such period shall be
one, two, three or six Months. Such Interest Period shall commence on the
effective date of such Interest Rate Option, which shall be (i) the Borrowing
Date if the Borrower is requesting new Loans, or (ii) the date of renewal of or
conversion to the LIBOR Rate Option if the Borrower is renewing or converting to
the LIBOR Rate Option applicable to outstanding Loans. Notwithstanding the
second sentence hereof: (A) any Interest Period which would otherwise end on a
date which is not a Business Day shall be extended to the next succeeding
Business Day unless such Business Day falls in the next calendar month, in which
case such Interest Period shall end on the next preceding Business Day, and
(B) the Borrower shall not select, convert to or renew an Interest Period for
any portion of the Loans that would end after the Expiration Date.

Interest Rate Hedge shall mean (i) an interest rate exchange, collar, cap, swap,
adjustable strike cap, adjustable strike corridor or similar agreements entered
into by the Loan Parties or their Subsidiaries in order to provide protection
to, or minimize the impact upon, the Borrower, the Guarantor and/or their
Subsidiaries of increasing floating rates of interest applicable to
Indebtedness.

 

10

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

Interest Rate Option shall mean any LIBOR Rate Option or Base Rate Option.

IRS shall mean the United States Internal Revenue Service.

Issuing Lender shall mean PNC, in its individual capacity as issuer of Letters
of Credit hereunder, and any other Lender that Borrower, Administrative Agent
and such other Lender may agree may from time to time issue Letters of Credit
hereunder.

Joint Venture shall mean a corporation, partnership, limited liability company
or other entity in which any Person other than the Loan Parties and their
Subsidiaries holds, directly or indirectly, an equity interest.

Law shall mean any law (including common law), constitution, statute, treaty,
regulation, rule, ordinance, opinion, release, ruling, order, injunction, writ,
decree, bond, judgment, authorization or approval, lien or award by or
settlement agreement with any Official Body.

Lender Provided Interest Rate Hedge shall mean an Interest Rate Hedge which is
provided by any Lender or its Affiliate and with respect to which the
Administrative Agent confirms: (i) is documented in a standard International
Swap Dealer Association Agreement, and (ii) provides for the method of
calculating the reimbursable amount of the provider’s credit exposure in a
reasonable and customary manner.

Lenders shall mean the financial institutions named on Schedule 1.1(B) and their
respective successors and assigns as permitted hereunder, each of which is
referred to herein as a Lender. For the purpose of any Loan Document which
provides for the granting of a security interest or other Lien to the Lenders or
to the Administrative Agent for the benefit of the Lenders as security for the
Obligations, “Lenders” shall include any Affiliate of a Lender to which such
Obligation is owed.

Letter of Credit shall have mean the letters of credit issued under Section
Section 2.9.1.1 [Issuance of Letters of Credit] and Section 2.9.1.2 [Issuance of
DOJ/EPA Letter of Credit].

Letter of Credit Borrowing shall have the meaning specified in Section 2.9.3
[Disbursements, Reimbursement].

Letter of Credit Fee shall have the meaning specified in Section 2.9.2 [Letter
of Credit Fees].

Letter of Credit Obligation shall mean, as of any date of determination, the
aggregate amount available to be drawn under all outstanding Letters of Credit
on such date (if any Letter of Credit shall increase in amount automatically in
the future, such aggregate amount available to be drawn shall currently give
effect to any such future increase) plus the aggregate Reimbursement Obligations
and Letter of Credit Borrowings on such date.

Letter of Credit Sublimit shall have the meaning specified in Section 2.9.1
[Issuance of Letters of Credit].

 

11

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

Leverage Ratio shall mean, as of the end of any date of determination, the ratio
of (A) consolidated Indebtedness of Borrower and its Subsidiaries on such date
to (B) Consolidated EBITDA (i) for the four fiscal quarters then ending if such
date is a fiscal quarter end or (ii) for the four fiscal quarters most recently
ended if such date is not a fiscal quarter end.

LIBOR Rate shall mean, with respect to the Loans comprising any Borrowing
Tranche to which the LIBOR Rate Option applies for any Interest Period, the
interest rate per annum determined by the Administrative Agent by dividing (the
resulting quotient rounded upwards, if necessary, to the nearest 1/100th of
1% per annum) (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 the Administrative 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
(for purposes of this definition, an “Alternate Source”), at approximately 11:00
a.m., London time, two (2) Business Days prior to the commencement of such
Interest Period as the London interbank offered rate for U.S. Dollars for an
amount comparable to such Borrowing Tranche and having a borrowing date and a
maturity comparable to 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 the
Administrative Agent at such time (which determination shall be conclusive
absent manifest error)), by (ii) a number equal to 1.00 minus the LIBOR Reserve
Percentage. LIBOR may also be expressed by the following formula:

 

LIBOR Rate

 

=

  

London interbank offered rates quoted by Bloomberg

or appropriate successor as shown on Bloomberg Page BBAM1

    

 

                             1.00 - LIBOR Reserve Percentage

The LIBOR Rate shall be adjusted with respect to any Loan to which the LIBOR
Rate Option applies that is outstanding on the effective date of any change in
the LIBOR Reserve Percentage as of such effective date. The Administrative Agent
shall give prompt notice to the Borrower of the LIBOR Rate as determined or
adjusted in accordance herewith, which determination shall be conclusive absent
manifest error.

LIBOR Rate Option shall mean the option of the Borrower to have Loans bear
interest at the rate and under the terms set forth in Section 4.1.1(ii)
[Revolving Credit LIBOR Rate Option].

LIBOR 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”).

Lien shall mean any mortgage, deed of trust, pledge, lien, security interest,
charge or other encumbrance or security arrangement of any nature whatsoever,
whether voluntarily or involuntarily given, including any conditional sale or
title retention arrangement, and any assignment, deposit arrangement or lease
intended as, or having the effect of, security and any filed financing statement
or other notice of any of the foregoing (whether or not a lien or other
encumbrance is created or exists at the time of the filing).

 

12

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

Loan Documents shall mean this Agreement, the Guaranty Agreement, the
Intercompany Subordination Agreement, the Notes, the Patent, Trademark and
Copyright Security Agreement, the Pledge Agreement, the Security Agreement, and
any other instruments, certificates or documents delivered in connection
herewith or therewith.

Loan Parties shall mean the Borrower and the Guarantors.

Loan Request shall have the meaning specified in Section 2.5 [Revolving Credit
Loan Requests].

Loans shall mean collectively and Loan shall mean separately all Revolving
Credit Loans and the DOJ/EPA Loans or any Revolving Credit Loan or DOJ/EPA Loan.

Material Adverse Change shall mean any set of circumstances or events which
(a) has or could reasonably be expected to have any material adverse effect
whatsoever upon the validity or enforceability of this Agreement or any other
Loan Document, (b) is or could reasonably be expected to be material and adverse
to the business, properties, assets, financial condition, results of operations
or prospects of the Loan Parties taken as a whole, (c) impairs materially or
could reasonably be expected to impair materially the ability of the Loan
Parties taken as a whole to duly and punctually pay or perform any of the
Obligations, or (d) impairs materially or could reasonably be expected to impair
materially the ability of the Administrative Agent or any of the Lenders, to the
extent permitted, to enforce their legal remedies pursuant to this Agreement or
any other Loan Document.

Month, with respect to an Interest Period under the LIBOR Rate Option, shall
mean the interval between the days in consecutive calendar months numerically
corresponding to the first day of such Interest Period. If any LIBOR Rate
Interest Period begins on a day of a calendar month for which there is no
numerically corresponding day in the month in which such Interest Period is to
end, the final month of such Interest Period shall be deemed to end on the last
Business Day of such final month.

Multiemployer Plan shall mean any employee benefit plan which is a
“multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA and to
which the Borrower or any member of the ERISA Group is then making or accruing
an obligation to make contributions or, within the preceding five Plan years,
has made or had an obligation to make such contributions.

Non-Consenting Lender shall have the meaning specified in Section 11.1
[Modifications, Amendments or Waivers].

Notes shall mean, collectively, the promissory notes in the form of Exhibit
1.1(N)(1) evidencing the Revolving Credit Loans.

 

13

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

Obligation shall mean any obligation or liability of any of the Loan Parties,
howsoever created, arising or evidenced, whether direct or indirect, absolute or
contingent, now or hereafter existing, or due or to become due, under or in
connection with (i) this Agreement, the Notes, the Letters of Credit or any
other Loan Document whether to the Administrative Agent, any of the Lenders or
their Affiliates or other persons provided for under such Loan Documents,
(ii) any Lender Provided Interest Rate Hedge and (iii) any Other Lender Provided
Financial Service Product.

Official Body shall mean the government of the United States of America or any
other nation, or of any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government (including
any supra-national bodies such as the European Union or the European Central
Bank) and any group or body charged with setting financial accounting or
regulatory capital rules or standards (including, without limitation, the
Financial Accounting Standards Board, the Bank for International Settlements or
the Basel Committee on Banking Supervision or any successor or similar authority
to any of the foregoing).

Other Connection Taxes shall mean, with respect to any Recipient, Taxes imposed
as a result of such Recipient conducting or having conducted a sufficient level
of ongoing business or income-generating activity in the jurisdiction imposing
such Tax to subject it to tax generally on the income or privilege of doing
business or unretained earnings associated with such activity (but, without
broadening the scope of the foregoing, not including any Tax imposed as a result
of such Recipient having executed, delivered, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, engaged in any other transaction pursuant to or enforced any
Loan Documents, or sold or assigned an interest in any Loan or Loan Document).

Other Lender Provided Financial Service Product shall mean agreements or other
arrangements under which any Lender or Affiliate of a Lender provides any of the
following products or services to any of the Loan Parties: (a) credit cards,
(b) credit card processing services, (c) debit cards, (d) purchase cards,
(e) ACH transactions, (f) cash management, including controlled disbursement,
accounts or services, or (g) foreign currency exchange.

Other Taxes shall mean all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Loan Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment (other than an assignment
made pursuant to Section 5.6.2 [Replacement of a Lender]).

Parent Borrower shall have the meaning set forth in the preamble.

Participant has the meaning specified in Section 11.8.4 [Participations].

Participant Register shall have the meaning specified in Section 11.8.4
[Participations].

 

14

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

Participation Advance shall have the meaning specified in Section 2.9.3
[Disbursements, Reimbursement].

Patent, Trademark and Copyright Security Agreement shall mean the Patent,
Trademark and Copyright Security Agreement dated as of even date herewith
executed and delivered by each of the Loan Parties to the Administrative Agent
for the benefit of the Lenders.

Payment Date shall mean the first day of each calendar quarter after the date
hereof and on the Expiration Date or upon acceleration of the Notes.

Payment In Full shall mean the indefeasible payment in full in cash of the Loans
and other Obligations hereunder, termination of the Commitments and expiration
or termination of all Letters of Credit.

PBGC shall mean the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA or any successor.

Pension Plan shall mean any “employee pension benefit plan” (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by Borrower or any
ERISA Affiliate or to which Borrower or any ERISA Affiliate contributes or has
an obligation to contribute, or in the case of a multiple employer or other plan
described in Section 4064(a) of ERISA, has made contributions at any times
during the immediately preceding five plan years.

Permitted Acquisitions shall mean acquisitions of the assets or Equity Interests
of another Person so long as: (a) the total costs and liabilities (including
without limitation, all assumed liabilities, all earn-out payments, deferred
payments and the value of any other stock or assets transferred, assigned or
encumbered with respect to such acquisitions) of (i) all such acquisitions do
not exceed $70,000,000 in the aggregate during the term of this Agreement,
(ii) all acquisitions involving foreign Subsidiaries does not exceed $40,000,000
in the aggregate during the term of this Agreement and (iii) each individual
acquisition involving foreign Subsidiaries does not exceed $20,000,000 for any
single transaction or related transactions; (b) with respect to the acquisition
of Equity Interests, such acquired company shall (i) have a positive EBITDA and
tangible net worth, calculated in accordance with GAAP immediately prior to such
acquisition, (ii) such acquired company shall be added as a Borrower or
Guarantor as determined by Administrative Agent in its sole discretion to this
Agreement and be jointly and severally liable for all Obligations, and
(iii) Administrative Agent shall be granted a first priority lien in all assets
of such acquired company; (c) the acquired company or property is used or useful
in the same or a similar line of business as the Borrower was engaged in on the
Closing Date (or any reasonable extensions or expansions thereof);
(d) Administrative Agent shall have received a first-priority security interest
in all acquired assets or Equity Interests, subject to documentation
satisfactory to Administrative Agent; (e) the board of directors (or other
comparable governing body) of such company shall have duly approved the
transaction; (f) the Borrower has delivered to Administrative Agent (i) a pro
forma balance sheet and pro forma financial statements and a Compliance
Certificate demonstrating that, upon giving effect to such acquisition on a pro
forma basis, the Borrower shall have a Pro-Forma Leverage Ratio less than or
equal to 2.75 to 1.0 as of the most recent fiscal quarter end for the trailing
twelve month period then ending (calculating such ratio as if such acquisition
occurred on the first day of such testing period) and (ii) financial statements
of the acquired entity for the two most recent fiscal years then ended, in form
and substance reasonably acceptable to Administrative Agent; (h) if such
acquisition includes general partnership interests or any other Equity Interest
that does not have a corporate (or similar) limitation on liability of the
owners thereof, then such acquisition shall be effected by having such Equity
Interests acquired by a corporate holding company directly or indirectly
wholly-owned by the Borrower and newly formed for the sole purpose of effecting
such acquisition; and (j) no Default or Event of Default shall have occurred or
will occur after giving pro forma effect to such acquisition.

 

15

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

Permitted Investments shall mean:

(i) direct obligations of the United States of America or any agency or
instrumentality thereof or obligations backed by the full faith and credit of
the United States of America maturing in twelve (12) months or less from the
date of acquisition;

(ii) commercial paper maturing in 180 days or less rated not lower than A-2 or
the equivalent thereof by Standard & Poor’s or P-2 or the equivalent thereof by
Moody’s Investors Service, Inc. on the date of acquisition;

(iii) demand deposits, time deposits or certificates of deposit maturing within
one year in commercial banks whose obligations are rated A-2 or the equivalent
or better by Standard & Poor’s or at least P-2 or the equivalent or better by
Moody’s Investors Services, Inc. on the date of acquisition;

(iv) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in (i) through (iii) above entered
into with any financial institution meeting the qualifications specified in
(iii) above;

(v) money market or mutual funds whose investments are limited to those types of
investments described in clauses (i)-(iii) above; and

(vi) investments made under cash management agreements with any other Lenders.

Permitted Liens shall mean:

(i) Liens for taxes, assessments, or similar charges, incurred in the ordinary
course of business and which are not yet due and payable;

(ii) Liens incurred or deposits made in the ordinary course of business to
secure the obligations of each Borrower under workers compensation, unemployment
insurance and other types of social security legislation or otherwise to secure
statutory or regulatory obligations or security deposits delivered with respect
to the payment of rent of each Borrower in the ordinary course of business
consistent with past practice, including to secure the performance of tenders,
surety and appeal bonds, performance bonds, performance of bids, leases, trade
contracts, governmental contracts, operating leases, performance and
return-of-money bonds and other similar obligations (exclusive in each case of
obligations for the payment of borrowed money); provided, that the obligations
in connection with which such Liens were incurred or deposits made shall have
been incurred in the ordinary course of business and shall otherwise be
permitted by this Agreement;

 

16

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

(iii) Liens of mechanics, materialmen, warehousemen, carriers, or other like
Liens, securing obligations incurred in the ordinary course of business that are
not yet due and payable and Liens of landlords securing obligations to pay lease
payments that are not yet due and payable or in default;

(iv) Good-faith pledges or deposits made in the ordinary course of business to
secure performance of bids, tenders, contracts (other than for the repayment of
borrowed money) or leases, not in excess of the aggregate amount due thereunder,
or to secure statutory obligations, or surety, appeal, indemnity, performance or
other similar bonds required in the ordinary course of business;

(v) Encumbrances consisting of zoning restrictions, easements or other
restrictions on the use of real property, none of which materially impairs the
use of such property or the value thereof, and none of which is violated in any
material respect by existing or proposed structures or land use;

(vi) Liens, security interests and mortgages in favor of the Administrative
Agent for the benefit of the Lenders and their Affiliates securing the
Obligations (including Lender Provided Interest Rate Hedges and Other Lender
Provided Financial Services Obligations);

(vii) Liens on property leased by any Loan Party or Subsidiary of a Loan Party
under capital and operating leases permitted in Section 8.2.14 [Capital
Expenditures and Leases] securing obligations of such Loan Party or Subsidiary
to the lessor under such leases;

(viii) Any Lien existing on the date of this Agreement and described on Schedule
1.1(P), provided that the principal amount secured thereby is not hereafter
increased, and no additional assets become subject to such Lien;

(ix) Purchase Money Security Interests and capitalized leases; provided that the
aggregate amount of loans and deferred payments secured by such Purchase Money
Security Interests and capitalized leases shall not exceed $2,500,000 in the
aggregate (excluding for the purpose of this computation any loans or deferred
payments secured by Liens described on Schedule 1.1(P));

(x) judgment Liens not giving rise to an Event of Default so long as any such
Lien is adequately bonded and any appropriate legal proceedings which may have
been duly initiated for the review of such judgment shall not have been finally
terminated or the period within which such proceedings may be initiated shall
not have expired, and such Lien does not affect the Collateral or, in the
aggregate, materially impair the ability of any Loan Party to perform its
Obligations hereunder or under the other Loan Documents; and

 

17

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

(xi) Liens securing Indebtedness, or Liens on shares of capital stock, of a
Person existing at the time such Person becomes a Subsidiary or is merged with
or into any Loan Party pursuant to a Permitted Acquisition or any Lien securing
Indebtedness incurred in connection with a Permitted Acquisition, provided that
(A) such Liens were in existence prior to the date of such Permitted
Acquisition, were not incurred in anticipation thereof, and do not extend to any
other assets; and (B) do not exceed One Million Dollars ($1,000,000) in the
aggregate; and

(xii) The following, (A) if the validity or amount thereof is being contested in
good faith by appropriate and lawful proceedings diligently conducted so long as
levy and execution thereon have been stayed and continue to be stayed or (B) if
a final judgment is entered and such judgment is discharged within thirty
(30) days of entry, and in either case they do not affect the Collateral or, in
the aggregate, materially impair the ability of any Loan Party to perform its
Obligations hereunder or under the other Loan Documents:

(1) Claims or Liens for taxes, assessments or charges due and payable and
subject to interest or penalty; provided that the applicable Loan Party
maintains such reserves or other appropriate provisions as shall be required by
GAAP and pays all such taxes, assessments or charges forthwith upon the
commencement of proceedings to foreclose any such Lien;

(2) Claims, Liens or encumbrances upon, and defects of title to, real or
personal property other than the Collateral, including any attachment of
personal or real property or other legal process prior to adjudication of a
dispute on the merits;

(3) Claims or Liens of mechanics, materialmen, warehousemen, carriers, or other
statutory nonconsensual Liens; or

(4) Liens resulting from final judgments or orders described in Section 9.1.6
[Final Judgments or Orders].

Person shall mean any individual, corporation, partnership, limited liability
company, association, joint-stock company, trust, unincorporated organization,
joint venture, government or political subdivision or agency thereof, or any
other entity.

Plan shall mean at any time an 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 ERISA Group for
employees of any member of the ERISA 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 ERISA Group for employees of any entity which was at such time a
member of the ERISA Group.

Pledge Agreement shall mean the Pledge Agreement dated as of even date herewith
executed and delivered by each of the Loan Parties to the Administrative Agent
for the benefit of the Lenders.

PNC shall mean PNC Bank, National Association, its successors and assigns.

Potential Default shall mean any event or condition which with notice or passage
of time, or both, would constitute an Event of Default.

 

18

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

Prime Rate shall mean the interest rate per annum announced from time to time by
the Administrative Agent at its Principal Office as its then prime rate, which
rate may not be the lowest or most favorable rate then being charged commercial
borrowers or others by the Administrative Agent. Any change in the Prime Rate
shall take effect at the opening of business on the day such change is
announced.

Principal Office shall mean the main banking office of the Administrative Agent
in Pittsburgh, Pennsylvania.

Prior Security Interest shall mean a valid and enforceable perfected
first-priority security interest under the Uniform Commercial Code in the
Collateral which is subject only to statutory Liens for taxes not yet due and
payable or Purchase Money Security Interests.

Pro Forma Leverage Ratio shall mean, as of the end of any date of determination,
the ratio of (A) consolidated Indebtedness of Borrower and its Subsidiaries on
such date to (B) Consolidated Adjusted EBITDA (i) for the four fiscal quarters
then ending if such date is a fiscal quarter end or (ii) for the four fiscal
quarters most recently ended if such date is not a fiscal quarter end.

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 rate at
which U.S. dollar deposits are offered by leading banks in the London interbank
deposit market for a one month period as published in another publication
selected by the Administrative Agent).

Purchase Money Security Interest shall mean Liens upon tangible personal
property securing loans to any Loan Party or Subsidiary of a Loan Party or
deferred payments by such Loan Party or Subsidiary for the purchase of such
tangible personal property.

Ratable Share shall mean the proportion that a Lender’s Commitment bears to the
Commitments of all of the Lenders, provided that in the case of Section 2.10
[Defaulting Lenders] when a Defaulting Lender shall exist, “Ratable Share” shall
mean the percentage of the aggregate Commitments (disregarding any Defaulting
Lender’s Commitment) represented by such Lender’s Commitment. If the Commitments
have terminated or expired, the Ratable Share shall be determined based upon the
Commitments most recently in effect, giving effect to any assignments.

“Recipient” shall mean (i) the Administrative Agent, (ii) any Lender and
(iii) the Issuing Lender, as applicable.

Reimbursement Obligation shall have the meaning specified in Section 2.9.3
[Disbursements, Reimbursement].

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

 

19

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

Relief Proceeding shall mean any proceeding seeking a decree or order for relief
in respect of any Loan Party or Subsidiary of a Loan Party in a voluntary or
involuntary case under any applicable bankruptcy, insolvency, reorganization or
other similar law now or hereafter in effect, or for the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator
(or similar official) of any Loan Party or Subsidiary of a Loan Party for any
substantial part of its property, or for the winding-up or liquidation of its
affairs, or an assignment for the benefit of its creditors.

Required Lenders shall mean

(A) If there exists fewer than three (3) Lenders, all Lenders (other than any
Defaulting Lender), and

(B) If there exist three (3) or more Lenders, Lenders (other than any Defaulting
Lender) having more than fifty percent (50%) of the aggregate amount of the
Revolving Credit Commitments of the Lenders (excluding any Defaulting Lender)
or, after the termination of the Revolving Credit Commitments, the outstanding
Revolving Credit Loans and Ratable Share of Letter of Credit Obligations of the
Lenders (excluding any Defaulting Lender).

Required Share shall have the meaning assigned to such term in Section 5.11
[Settlement Date Procedures].

Revolving Credit Commitment shall mean, as to any Lender at any time, the amount
initially set forth opposite its name on Schedule 1.1(B) in the column labeled
“Amount of Commitment for Revolving Credit Loans,” as such Commitment is
thereafter assigned or modified and Revolving Credit Commitments shall mean the
aggregate Revolving Credit Commitments of all of the Lenders.

Revolving Credit Loans shall mean collectively and Revolving Credit Loan shall
mean separately all Revolving Credit Loans or any Revolving Credit Loan made by
the Lenders or one of the Lenders to the Borrower pursuant to Section 2.1
[Revolving Credit Commitments] or 2.9.3 [Disbursements, Reimbursement].

Revolving Facility Usage shall mean at any time the sum of the outstanding
Revolving Credit Loans and the Letter of Credit Obligations (other than the
DOJ/EPA Letter of Credit Obligations).

Security Agreement shall mean the Security Agreement dated as of even date
herewith executed and delivered by each of the Loan Parties to the
Administrative Agent for the benefit of the Lenders.

Settlement Date shall mean the Business Day on which the Administrative Agent
elects to effect settlement pursuant Section 5.11 [Settlement Date Procedures].

 

20

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

Solvent shall mean, with respect to any Person on any date of determination,
taking into account such right of reimbursement, contribution or similar right
available to such Person from other Persons, that on such date (i) the fair
value of the property of such Person is greater than the total amount of
liabilities, including, without limitation, contingent liabilities, of such
Person, (ii) the present fair saleable value of the assets of such Person is not
less than the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured, (iii) such Person is
able to realize upon its assets and pay its debts and other liabilities,
contingent obligations and other commitments as they mature in the normal course
of business, (iv) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person’s ability to pay as such
debts and liabilities mature, and (v) such Person is not engaged in business or
a transaction, and is not about to engage in business or a transaction, for
which such Person’s property would constitute unreasonably small capital after
giving due consideration to the prevailing practice in the industry in which
such Person is engaged. In computing the amount of contingent liabilities at any
time, it is intended that such liabilities will be computed at the amount which,
in light of all the facts and circumstances existing at such time, represents
the amount that can reasonably be expected to become an actual or matured
liability.

Standard & Poor’s shall mean Standard & Poor’s Ratings Services, a division of
The McGraw-Hill Companies, Inc.

Statements shall have the meaning specified in Section 6.1.6(i) [Historical
Statements].

Subsidiary of any Person at any time shall mean any corporation, trust,
partnership, any limited liability company or other business entity (i) of which
more than 50% of the outstanding voting securities or other interests normally
entitled to vote for the election of one or more directors or trustees
(regardless of any contingency which does or may suspend or dilute the voting
rights) is at such time owned directly or indirectly by such Person or one or
more of such Person’s Subsidiaries, or (ii) which is controlled or capable of
being controlled by such Person or one or more of such Person’s Subsidiaries.

Subsidiary Equity Interests shall have the meaning specified in Section 6.1.2
[Subsidiaries and Owners; Investment Companies].

Taxes shall mean all present or future taxes, levies, imposts, duties,
deductions, withholdings (including backup withholding), assessments, fees or
other charges imposed by any Official Body, including any interest, additions to
tax or penalties applicable thereto.

Undrawn Availability at a particular date shall mean an amount equal to the
difference between the (i) Revolving Credit Commitments and (ii) the Revolving
Facility Usage.

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.

U.S. Person shall mean any Person that is a “United States Person” as defined in
Section 7701(a)(30) of the Code.

U.S. Tax Compliance Certificate shall have the meaning specified in
Section 5.9.7 [Status of Lenders].

 

21

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

Withholding Agent shall mean any Loan Party and the Administrative Agent.

1.2 Construction. Unless the context of this Agreement otherwise clearly
requires, the following rules of construction shall apply to this Agreement and
each of the other Loan Documents: (i) references to the plural include the
singular, the plural, the part and the whole and the words “include,” “includes”
and “including” shall be deemed to be followed by the phrase “without
limitation”; (ii) the words “hereof,” “herein,” “hereunder,” “hereto” and
similar terms in this Agreement or any other Loan Document refer to this
Agreement or such other Loan Document as a whole; (iii) article, section,
subsection, clause, schedule and exhibit references are to this Agreement or
another Loan Document, as the case may be, unless otherwise specified;
(iv) reference to any Person includes such Person’s successors and assigns;
(v) reference to any agreement, including this Agreement and any other Loan
Document together with the schedules and exhibits hereto or thereto, document or
instrument means such agreement, document or instrument as amended, modified,
replaced, substituted for, superseded or restated; (vi) relative to the
determination of any period of time, “from” means “from and including,” “to”
means “to but excluding,” and “through” means “through and including”; (vii) the
words “asset” and “property” shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights,
(viii) section headings herein and in each other Loan Document are included for
convenience and shall not affect the interpretation of this Agreement or such
Loan Document, and (ix) unless otherwise specified, all references herein to
times of day shall be references to Eastern Time.

1.3 Accounting Principles; Changes in GAAP. Except as otherwise provided in this
Agreement, all computations and determinations as to accounting or financial
matters and all financial statements to be delivered pursuant to this Agreement
shall be made and prepared in accordance with GAAP (including principles of
consolidation where appropriate), and all accounting or financial terms shall
have the meanings ascribed to such terms by GAAP; provided, however, that all
accounting terms used in Section 8.2 [Negative Covenants] (and all defined terms
used in the definition of any accounting term used in Section 8.2 shall have the
meaning given to such terms (and defined terms) under GAAP as in effect on the
date hereof applied on a basis consistent with those used in preparing
Statements referred to in Section 6.1.6(i) [Historical Statements].
Notwithstanding the foregoing, if the Borrower notifies the Administrative Agent
in writing that the Borrower wishes to amend any financial covenant in
Section 8.2 of this Agreement, any related definition and/or the definition of
the term Leverage Ratio for purposes of interest, Letter of Credit Fee and
Commitment Fee determinations to eliminate the effect of any change in GAAP
occurring after the Closing Date on the operation of such financial covenants
and/or interest, Letter of Credit Fee or Commitment Fee determinations (or if
the Administrative Agent notifies the Borrower in writing that the Required
Lenders wish to amend any financial covenant in Section 8.2, any related
definition and/or the definition of the term Leverage Ratio for purposes of
interest, Letter of Credit Fee and Commitment Fee determinations to eliminate
the effect of any such change in GAAP), then the Administrative Agent, the
Lenders and the Borrower shall negotiate in good faith to amend such ratios or
requirements to preserve the original intent thereof in light of such change in
GAAP (subject to the approval of the Required Lenders); provided that, until so
amended, the Loan Parties’ compliance with such covenants and/or the definition
of the term Leverage Ratio for purposes of interest, Letter of Credit Fee and
Commitment Fee determinations shall be determined on the basis of GAAP in effect
immediately before the relevant change in GAAP became effective, until either
such notice is withdrawn or such covenants or definitions are amended in a
manner satisfactory to the Borrower and the Required Lenders, and the Loan
Parties shall provide to the Administrative Agent, when they deliver their
financial statements pursuant to Section 8.3.1 [Quarterly Financial Statements]
and 8.3.2 [Annual Financial Statements] of this Agreement, such reconciliation
statements as shall be reasonably requested by the Administrative Agent.

 

22

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

2. REVOLVING CREDIT FACILITY

2.1 Revolving Credit Commitments.

2.1.1 Revolving Credit Loans. Subject to the terms and conditions hereof and
relying upon the representations and warranties herein set forth, each Lender
severally agrees to make Revolving Credit Loans to the Borrower at any time or
from time to time on or after the date hereof to the Expiration Date; provided
that after giving effect to each such Loan (i) the aggregate amount of Revolving
Credit Loans from such Lender shall not exceed such Lender’s Revolving Credit
Commitment minus such Lender’s Ratable Share of the Letter of Credit Obligations
and (ii) the Revolving Facility Usage shall not exceed the Revolving Credit
Commitments. Within such limits of time and amount and subject to the other
provisions of this Agreement, the Borrower may borrow, repay and reborrow
pursuant to this Section 2.1.

2.1.2 Reserved.

2.2 Nature of Lenders’ Obligations with Respect to Revolving Credit Loans. Each
Lender shall be obligated to participate in each request for Revolving Credit
Loans pursuant to Section 2.5 [Revolving Credit Loan Requests] and deemed
requests for DOJ/EPA Loans pursuant to Section 2.9.2 [Disbursements,
Reimbursement] in accordance with its Ratable Share. The aggregate of each
Lender’s Revolving Credit Loans outstanding hereunder to the Borrower at any
time shall never exceed its Revolving Credit Commitment minus its Ratable Share
of the outstanding Letter of Credit Obligations (other than the DOJ/EPA Letter
of Credit Obligations). The aggregate of each Lender’s DOJ/EPA Loans outstanding
hereunder to the Borrower at any time shall never exceed its DOJ/EPA Letter of
Credit Commitment. The obligations of each Lender hereunder are several. The
failure of any Lender to perform its obligations hereunder shall not affect the
Obligations of the Borrower to any other party nor shall any other party be
liable for the failure of such Lender to perform its obligations hereunder. The
Lenders shall have no obligation to make Revolving Credit Loans hereunder on or
after the Expiration Date.

2.3 Commitment Fees. Accruing from the date hereof until the Expiration Date,
the Borrower agrees to pay to the Administrative Agent for the account of each
Lender according to its Ratable Share, a nonrefundable commitment fee (the
“Commitment Fee”) equal to the Applicable Commitment Fee Rate (computed on the
basis of a year of 365 or 366 days, as the case may be, and actual days elapsed)
multiplied by the average daily difference between the amount of (i) the
Revolving Credit Commitments and (ii) the Revolving Facility Usage; provided,
however, that any Commitment Fee accrued with respect to the Revolving Credit
Commitment of a Defaulting Lender during the period prior to the time such
Lender became a Defaulting Lender and unpaid at such time shall not be payable
by the Borrower so long as such Lender shall be a Defaulting Lender except to
the extent that such Commitment Fee shall otherwise have been due and payable by
the Borrower prior to such time; and provided further that no Commitment Fee
shall accrue with respect to the Revolving Commitment of a Defaulting Lender so
long as such Lender shall be a Defaulting Lender. Subject to the proviso in the
directly preceding sentence, all Commitment Fees shall be payable in arrears on
each Payment Date.

 

23

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

2.4 Facility Fees. The Borrower agrees to pay to the Administrative Agent on the
Closing Date for the account of each Lender, as consideration for such Lender’s
Commitments, a non-refundable facility fee equal to 0.125% of such Lender’s
Revolving Credit Commitment.

2.5 Revolving Credit Loan Requests.

2.5.1 Revolving Credit Loan Requests. Except as otherwise provided herein, the
Borrower may from time to time prior to the Expiration Date request the Lenders
to make Revolving Credit Loans, or renew or convert the Interest Rate Option
applicable to existing Revolving Credit Loans pursuant to Section 4.2 [Interest
Periods], by delivering to the Administrative Agent, not later than 10:00 a.m.,
(i) three (3) Business Days prior to the proposed Borrowing Date with respect to
the making of Revolving Credit Loans to which the LIBOR Rate Option applies or
the conversion to or the renewal of the LIBOR Rate Option for any Loans; and
(ii) the same Business Day of the proposed Borrowing Date with respect to the
making of a Revolving Credit Loan to which the Base Rate Option applies or the
last day of the preceding Interest Period with respect to the conversion to the
Base Rate Option for any Loan, of a duly completed request therefor
substantially in the form of Exhibit 2.5.1 or a request by telephone immediately
confirmed in writing by letter, facsimile or telex in such form (each, a “Loan
Request”), it being understood that the Administrative Agent may rely on the
authority of any individual making such a telephonic request without the
necessity of receipt of such written confirmation. Each Loan Request shall be
irrevocable and shall specify the aggregate amount of the proposed Loans
comprising each Borrowing Tranche, and, if applicable, the Interest Period,
which amounts shall be in (x) integral multiples of $100,000 and not less than
$500,000 for each Borrowing Tranche under the LIBOR Rate Option, and
(y) integral multiples of $10,000 and not less than $100,000 for each Borrowing
Tranche under the Base Rate Option.

2.5.2 Reserved.

2.6 Making Revolving Credit Loans; Presumptions by the Administrative Agent;
Repayment of Revolving Credit Loans.

2.6.1 Making Revolving Credit Loans. The Administrative Agent shall, promptly
after receipt by it of a Loan Request pursuant to Section 2.5 [Revolving Credit
Loan Requests], notify the Lenders of its receipt of such Loan Request
specifying the information provided by the Borrower and the apportionment among
the Lenders of the requested Revolving Credit Loans as determined by the
Administrative Agent in accordance with Section 2.2 [Nature of Lenders’
Obligations with Respect to Revolving Credit Loans]. Each Lender shall remit the
principal amount of each Revolving Credit Loan to the Administrative Agent such
that the Administrative Agent is able to, and the Administrative Agent shall, to
the extent the Lenders have made funds available to it for such purpose and
subject to Section 7.2 [Each Loan or Letter of Credit], fund such Revolving
Credit Loans to the Borrower in U.S. Dollars and immediately available funds at
the Principal Office prior to 2:00 p.m., on the applicable Borrowing Date;
provided that if any Lender fails to remit such funds to the Administrative
Agent in a timely manner, the Administrative Agent may elect in its sole
discretion to fund with its own funds the Revolving Credit Loans of such Lender
on such Borrowing Date, and such Lender shall be subject to the repayment
obligation in Section 2.6.2 [Presumptions by the Administrative Agent].

 

24

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

2.6.2 Presumptions by the Administrative Agent. Unless the Administrative Agent
shall have received notice from a Lender prior to the proposed date of any Loan
that such Lender will not make available to the Administrative Agent such
Lender’s share of such Loan, the Administrative Agent may assume that such
Lender has made such share available on such date in accordance with
Section 2.6.1 [Making Revolving Credit Loans] and may, in reliance upon such
assumption, make available to the Borrower a corresponding amount. In such
event, if a Lender has not in fact made its share of the applicable Loan
available to the Administrative Agent, then the applicable Lender and the
Borrower severally agree to pay to the Administrative Agent forthwith on demand
such corresponding amount with interest thereon, for each day from and including
the date such amount is made available to the Borrower to but excluding the date
of payment to the Administrative Agent, at (i) in the case of a payment to be
made by such Lender, the greater of the Federal Funds Effective Rate and a rate
determined by the Administrative Agent in accordance with banking industry rules
on interbank compensation and (ii) in the case of a payment to be made by the
Borrower, the interest rate applicable to Loans under the Base Rate Option. If
such Lender pays its share of the applicable Loan to the Administrative Agent,
then the amount so paid shall constitute such Lender’s Loan. Any payment by the
Borrower shall be without prejudice to any claim the Borrower may have against a
Lender that shall have failed to make such payment to the Administrative Agent.

2.6.3 Reserved.

2.6.4 Repayment of Revolving Credit Loans. The Borrower shall repay the
Revolving Credit Loans together with all outstanding interest thereon on the
Expiration Date.

2.6.5 Reserved.

2.6.6 Reserved.

2.7 Notes. The Obligation of the Borrower to repay the aggregate unpaid
principal amount of the Revolving Credit Loans made to it by each Lender,
together with interest thereon, shall be evidenced by a revolving credit Note
dated the Closing Date payable to the order of such Lender in a face amount
equal to the Revolving Credit Commitment of such Lender.

2.8 Use of Proceeds. The proceeds of the Loans shall be used for refinancing
existing Indebtedness of Borrower and to provide for the working capital needs
of Borrower and reimbursement of letters of credit.

 

25

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

2.9 Letter of Credit Subfacility.

2.9.1 Issuance of Letters of Credit. Borrower may at any time prior to the
Expiration Date request the issuance of a standby or trade letter of credit on
behalf of itself or another Loan Party, or the amendment or extension of an
existing Letter of Credit, by delivering or having such other Loan Party deliver
to the Issuing Lender (with a copy to the Administrative

Agent) a completed application and agreement for letters of credit, or request
for such amendment or extension, as applicable, in such form as the Issuing
Lender may specify from time to time by no later than 10:00 a.m. at least five
(5) Business Days, or such shorter period as may be agreed to by the Issuing
Lender, in advance of the proposed date of issuance. Promptly after receipt of
any letter of credit application, the Issuing Lender shall confirm with the
Administrative Agent (by telephone or in writing) that the Administrative Agent
has received a copy of such Letter of Credit application and if not, such
Issuing Lender will provide Administrative Agent with a copy thereof. Unless the
Issuing Lender has received notice from any Lender, Administrative Agent or any
Loan Party, at least one day prior to the requested date of issuance, amendment
or extension of the applicable Letter of Credit, that one or more applicable
conditions in Section 7 [Conditions of Lending and Issuance of Letters of
Credit] is not satisfied, then, subject to the terms and conditions hereof and
in reliance on the agreements of the other Lenders set forth in this
Section 2.9, the Issuing Lender or any of the Issuing Lender’s Affiliates will
issue a Letter of Credit or agree to such amendment or extension, provided that
each Letter of Credit shall (A) have a maximum maturity of twelve (12) months
from the date of issuance, and (B) in no event expire later than the date which
is 364 days after the Expiration Date and provided further that; (i) Borrower
shall Cash Collateralize such Letter of Credit Obligations if required pursuant
to Section 2.9.11, and (ii) in no event shall (a) the Letter of Credit
Obligations (other than the DOJ/EPA Letter of Credit Obligations) exceed, at any
one time, $5,000,000 (the “Letter of Credit Sublimit”) or (b) the Revolving
Facility Usage exceed, at any one time, the Revolving Credit Commitments. Each
request by the Borrower for the issuance, amendment or extension of a Letter of
Credit shall be deemed to be a representation by the Borrower that it shall be
in compliance with the preceding sentence and with Section 7 [Conditions of
Lending and Issuance of Letters of Credit] after giving effect to the requested
issuance, amendment or extension of such Letter of Credit. Promptly after its
delivery of any Letter of Credit or any amendment to a Letter of Credit to the
beneficiary thereof, the applicable Issuing Lender will also deliver to Borrower
and Administrative Agent a true and complete copy of such Letter of Credit or
amendment.

2.9.1.2 Issuance of DOJ/EPA Letter of Credit. Notwithstanding anything to the
contrary contained in Section 2.9.1.1, Borrower may at any time prior to the
Expiration Date request the issuance of a standby letter of credit on behalf of
itself or another Loan Party for the benefit of the DOJ and the EPA, by
complying with the requirements set forth in Section 2.9.1.1; provided that each
Letter of Credit shall (A) have a maximum maturity of twelve (12) months from
the date of issuance, with automatic annual extensions, so long as no Potential
Default or Event of Default has occurred and such extension does not extend
beyond the Expiration Date, and (B) in no event expire later than the Expiration
Date and provided further that in no event shall (i) the aggregate face amount
of such Letter of Credit exceed an amount approved by Administrative Agent,
which in no event shall exceed the DOJ/EPA Letter of Credit Commitment.

 

26

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

2.9.2 Letter of Credit Fees. The Borrower shall pay (i) to the Administrative
Agent for the ratable account of the Lenders a fee (the “Letter of Credit Fee”)
equal to the Applicable Letter of Credit Fee Rate, and (ii) to the Issuing
Lender for its own account a fronting fee equal to 0.125% per annum (in each
case computed on the basis of a year of 360 days and actual days elapsed), which
fees shall be computed on the daily average Letter of Credit Obligations and
shall be payable quarterly in arrears on each Payment Date following issuance of
each Letter of Credit. The Borrower shall also pay to the Issuing Lender for the
Issuing Lender’s sole account the Issuing Lender’s then in effect customary fees
and administrative expenses payable with respect to the Letters of Credit as the
Issuing Lender may generally charge or incur from time to time in connection
with the issuance, maintenance, amendment (if any), assignment or transfer (if
any), negotiation, and administration of Letters of Credit.

2.9.3 Disbursements, Reimbursement. Immediately upon the issuance of each Letter
of Credit, each Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the Issuing Lender a participation in
such Letter of Credit and each drawing thereunder in an amount equal to such
Lender’s Ratable Share of the maximum amount available to be drawn under such
Letter of Credit and the amount of such drawing, respectively.

2.9.3.1 In the event of any request for a drawing under a Letter of Credit by
the beneficiary or transferee thereof, the Issuing Lender will promptly notify
the Borrower and the Administrative Agent thereof. Provided that it shall have
received such notice, the Borrower shall reimburse (such obligation to reimburse
the Issuing Lender shall sometimes be referred to as a “Reimbursement
Obligation”) the Issuing Lender prior to 12:00 noon on each date that an amount
is paid by the Issuing Lender under any Letter of Credit (each such date, a
“Drawing Date”) by paying to the Administrative Agent for the account of the
Issuing Lender an amount equal to the amount so paid by the Issuing Lender. In
the event the Borrower fails to reimburse the Issuing Lender (through the
Administrative Agent) for the full amount of any drawing under (i) any Letter of
Credit (other than the DOJ/EPA Letter of Credit) by 12:00 noon on the Drawing
Date, the Administrative Agent will promptly notify each Lender thereof, and the
Borrower shall be deemed to have requested that Revolving Credit Loans be made
by the Lenders under the Base Rate Option to be disbursed on the Drawing Date
under such Letter of Credit, subject to the amount of the unutilized portion of
the Revolving Credit Commitment and subject to the conditions set forth in
Section 7.2 [Each Loan or Letter of Credit] other than any notice requirements
or (ii) the DOJ/EPA Letter of Credit by 12:00 noon on the Drawing Date, the
Administrative Agent will promptly notify each Lender thereof, and the Borrower
shall be deemed to have requested that a borrowing by the Lenders (a “DOJ/EPA
Loan”) which shall be due and payable on demand (including interest) and shall
accrue interest at a rate applicable to the Revolving Credit Loans under the
Base Rate Option to be disbursed on the Drawing Date under the DOJ/EPA Letter of
Credit, subject to the amount of the DOJ/EPA Letter of Credit Commitment and
subject to the conditions set forth in Section 7.2 [Each Loan or Letter of
Credit] other than any notice requirements. Any notice given by the
Administrative Agent or Issuing Lender pursuant to this Section 2.9.3.1 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.

 

27

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

2.9.3.2 Each Lender shall upon any notice pursuant to Section 2.9.3.1 make
available to the Administrative Agent for the account of the Issuing Lender an
amount in immediately available funds equal to its Ratable Share of the amount
of the drawing, whereupon the participating Lenders shall (subject to
Section 2.9.3 [Disbursement; Reimbursement]) each be deemed to have made, as
applicable, (i) a Revolving Credit Loan under the Base Rate Option to the
Borrower in that amount or (ii) a DOJ/EPA Loan to the Borrower in that Amount,
which shall be due and payable on demand (together with interest) and shall bear
interest at the rate per annum applicable to Revolving Credit Loans under the
Base Rate Option. If any Lender so notified fails to make available to the
Administrative Agent for the account of the Issuing Lender the amount of such
Lender’s Ratable Share 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 (3) days following the Drawing Date and (ii) at a rate per annum
equal to the rate applicable to Loans under the Revolving Credit Base Rate
Option on and after the fourth day following the Drawing Date. The
Administrative Agent and the Issuing Lender will promptly give notice (as
described in Section 2.9.3.1 above) of the occurrence of the Drawing Date, but
failure of the Administrative Agent or the Issuing Lender 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 2.9.3.2.

2.9.3.3 With respect to any DOJ/EPA Loan or any unreimbursed drawing that is not
converted into a Revolving Credit Loans under the Base Rate Option to the
Borrower in whole or in part as contemplated by Section 2.9.3.1, because of the
Borrower’s failure to satisfy the conditions set forth in Section 7.2 [Each Loan
or Letter of Credit] other than any notice requirements, or for any other
reason, the Borrower shall be deemed to have incurred from the Issuing Lender a
borrowing (each a “Letter of Credit Borrowing”) in the amount of such DOJ/EPA
Loan or 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 the Revolving Credit Loans under the Base Rate Option. Each
Lender’s payment to the Administrative Agent for the account of the Issuing
Lender pursuant to Section 2.9.3 [Disbursements, Reimbursement] shall be deemed
to be a payment in respect of its participation in such Letter of Credit
Borrowing (each a “Participation Advance”) from such Lender in satisfaction of
its participation obligation under this Section 2.9.3.

2.9.4 Repayment of Participation Advances.

2.9.4.1 Upon (and only upon) receipt by the Administrative Agent for the account
of the Issuing Lender of immediately available funds from the Borrower (i) in
reimbursement of any payment made by the Issuing Lender under the Letter of
Credit with respect to which any Lender has made a Participation Advance to the
Administrative Agent, or (ii) in payment of interest on such a payment made by
the Issuing Lender under such a Letter of Credit, the Administrative Agent on
behalf of the Issuing Lender will pay to each Lender, in the same funds as those
received by the Administrative Agent, the amount of such Lender’s Ratable Share
of such funds, except the Administrative Agent shall retain for the account of
the Issuing Lender the amount of the Ratable Share of such funds of any Lender
that did not make a Participation Advance in respect of such payment by the
Issuing Lender.

2.9.4.2 If the Administrative Agent is required at any time to return to any
Loan Party, or to a trustee, receiver, liquidator, custodian, or any official in
any Insolvency Proceeding, any portion of any payment made by any Loan Party to
the Administrative Agent for the account of the Issuing Lender pursuant to this
Section in reimbursement of a payment made under the Letter of Credit or
interest or fee thereon, each Lender shall, on demand of the Administrative
Agent, forthwith return to the Administrative Agent for the account of the
Issuing Lender the amount of its Ratable Share of any amounts so returned by the
Administrative Agent plus interest thereon from the date such demand is made to
the date such amounts are returned by such Lender to the Administrative Agent,
at a rate per annum equal to the Federal Funds Effective Rate in effect from
time to time.

 

28

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

2.9.5 Documentation. Each Loan Party agrees to be bound by the terms of the
Issuing Lender’s application and agreement for letters of credit and the Issuing
Lender’s written regulations and customary practices relating to letters of
credit, though such interpretation may be different from such Loan Party’s own.
In the event of a conflict between such application or agreement and this
Agreement, this Agreement shall govern. It is understood and agreed that, except
in the case of gross negligence or willful misconduct, the Issuing Lender shall
not be liable for any error, negligence and/or mistakes, whether of omission or
commission, in following any Loan Party’s instructions or those contained in the
Letters of Credit or any modifications, amendments or supplements thereto.

2.9.6 Determinations to Honor Drawing Requests. In determining whether to honor
any request for drawing under any Letter of Credit by the beneficiary thereof,
the Issuing Lender 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.

2.9.7 Nature of Participation and Reimbursement Obligations. Each Lender’s
obligation in accordance with this Agreement to make the Revolving Credit Loans,
DOJ/EPA Loans or Participation Advances, as contemplated by Section 2.9.3
[Disbursements, Reimbursement], as a result of a drawing under a Letter of
Credit, and the Obligations of the Borrower to reimburse the Issuing Lender 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 2.9 under all circumstances, including the following circumstances:

(i) any set-off, counterclaim, recoupment, defense or other right which such
Lender may have against the Issuing Lender or any of its Affiliates, the
Borrower or any other Person for any reason whatsoever, or which any Loan Party
may have against the Issuing Lender or any of its Affiliates, any Lender 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 Sections 2.1
[Revolving Credit Commitments], 2.5 [Revolving Credit Loan Requests], 2.6
[Making Revolving Credit Loans] or 7.2 [Each Loan or Letter of Credit] or as
otherwise set forth in this Agreement for the making of a Revolving Credit Loan,
it being acknowledged that such conditions are not required for the making of a
Letter of Credit Borrowing and the obligation of the Lenders to make
Participation Advances under Section 2.9.3 [Disbursements, Reimbursement];

(iii) any lack of validity or enforceability of any Letter of Credit;

 

29

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

(iv) any claim of breach of warranty that might be made by any Loan Party or any
Lender against any beneficiary of a Letter of Credit, or the existence of any
claim, set-off, recoupment, counterclaim, crossclaim, defense or other right
which any Loan Party or any Lender may have at any time against a beneficiary,
successor beneficiary any transferee or assignee of any Letter of Credit or the
proceeds thereof (or any Persons for whom any such transferee may be acting),
the Issuing Lender or its Affiliates 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 any Loan
Party or Subsidiaries of a Loan Party 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 provision of services
relating to a Letter of Credit, in each case even if the Issuing Lender or any
of its Affiliates has been notified thereof;

(vi) payment by the Issuing Lender or any of its Affiliates 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 the Issuing Lender or any of its Affiliates to issue any
Letter of Credit in the form requested by any Loan Party, unless the Issuing
Lender has received written notice from such Loan Party of such failure within
three Business Days after the Issuing Lender shall have furnished such Loan
Party and the Administrative Agent 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 adverse change in the business, operations, properties, assets,
condition (financial or otherwise) or prospects of any Loan Party or
Subsidiaries of a Loan Party;

(x) any breach of this Agreement or any other Loan Document by any party
thereto;

(xi) the occurrence or continuance of an Insolvency Proceeding with respect to
any Loan Party;

(xii) the fact that an Event of Default or a Potential Default shall have
occurred and be continuing;

(xiii) the fact that the Expiration Date shall have passed or this Agreement or
the Commitments hereunder shall have been terminated; and

(xiv) any other circumstance or happening whatsoever, whether or not similar to
any of the foregoing.

 

30

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

2.9.8 Indemnity. The Borrower hereby agrees to protect, indemnify, pay and save
harmless the Issuing Lender and any of its Affiliates that has 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 the Issuing Lender or any of its 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 the Issuing Lender as determined by a final non-appealable
judgment of a court of competent jurisdiction or (B) the wrongful dishonor by
the Issuing Lender or any of Issuing Lender’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 government or Official Body.

2.9.9 Liability for Acts and Omissions. As between any Loan Party and the
Issuing Lender, or the Issuing Lender’s Affiliates, such 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 foregoing, the Issuing Lender shall not be responsible for any
of the following, including any losses or damages to any Loan Party or other
Person or property relating therefrom: (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 the Issuing Lender or
its Affiliates 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 any Loan Party against any
beneficiary of such Letter of Credit, or any such transferee, or any dispute
between or among any Loan Party 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, facsimile, e-mail, cable,
telegraph, 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 the Issuing Lender or its Affiliates, as applicable, including any
act or omission of any Official Body, and none of the above shall affect or
impair, or prevent the vesting of, any of the Issuing Lender’s or its Affiliates
rights or powers hereunder. Nothing in the preceding sentence shall relieve the
Issuing Lender from liability for the Issuing Lender’s gross negligence or
willful misconduct in connection with actions or omissions described in such
clauses (i) through (viii) of such sentence. In no event shall the Issuing
Lender or its Affiliates be liable to any Loan Party for any indirect,
consequential, incidental, punitive, exemplary or special damages or expenses
(including without limitation attorneys’ fees), or for any damages resulting
from any change in the value of any property relating to a Letter of Credit.

 

31

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

Without limiting the generality of the foregoing, the Issuing Lender and each of
its Affiliates (i) may rely on any oral or other communication believed in good
faith by the Issuing Lender or such Affiliate to have been authorized or given
by or on behalf of the applicant for a Letter of Credit, (ii) 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 the Issuing Lender or its Affiliate; (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 the Issuing Lender 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.

In furtherance and extension and not in limitation of the specific provisions
set forth above, any action taken or omitted by the Issuing Lender or its
Affiliates 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, shall not put the Issuing Lender or its Affiliates under any resulting
liability to the Borrower or any Lender.

2.9.10 Issuing Lender Reporting Requirements. Each Issuing Lender shall, on the
first Business Day of each month, provide to Administrative Agent and Borrower a
schedule of the Letters of Credit issued by it, in form and substance
satisfactory to Administrative Agent, showing the date of issuance of each
Letter of Credit, the account party, the original face amount (if any), and the
expiration date of any Letter of Credit outstanding at any time during the
preceding month, and any other information relating to such Letter of Credit
that the Administrative Agent may request.

2.9.11 Cash Collateral. Upon the request of Administrative Agent, (i) if any
Issuing Lender has honored any full or partial drawing request under any Letter
of Credit and such drawing has resulted in a Letter of Credit Borrowing, or
(ii) if, six months prior to the Expiration Date, any Letter of Credit
Obligation for any reason remains outstanding, Borrower shall, in each case,
immediately Cash Collateralize the then outstanding amount of all Letter of
Credit Obligations. Borrower hereby grants to Administrative Agent, for the
benefit of each Issuing Lender and the Lenders, a security interest in all cash
collateral pledged pursuant to this Section or otherwise under this Agreement.

 

32

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

2.10 Defaulting Lenders. Notwithstanding any provision of this Agreement to the
contrary, if any Lender becomes a Defaulting Lender, then the following
provisions shall apply for so long as such Lender is a Defaulting Lender:

(i) fees shall cease to accrue on the unfunded portion of the Commitment of such
Defaulting Lender pursuant to Section 2.3 [Commitment Fees];

(ii) the Commitment and outstanding Loans of such Defaulting Lender shall not be
included in determining whether the Required Lenders have taken or may take any
action hereunder (including any consent to any amendment, waiver or other
modification pursuant to Section 11.1 [Modifications, Amendments or Waivers]);
provided, that this clause (ii) shall not apply to the vote of a Defaulting
Lender in the case of an amendment, waiver or other modification requiring the
consent of such Lender or each Lender directly affected thereby;

(iii) if any Letter of Credit Obligations exist at the time such Lender becomes
a Defaulting Lender, then:

(a) all or any part of the outstanding Letter of Credit Obligations of such
Defaulting Lender shall be reallocated among the non-Defaulting Lenders in
accordance with their respective Ratable Shares but only to the extent that
(x) with respect to the Letter of Credit Obligations, other than the DOJ/EPA
Letter of Credit Obligations, the Revolving Facility Usage does not exceed the
total of all non-Defaulting Lenders’ Revolving Credit Commitments, and (y) no
Potential Default or Event of Default has occurred and is continuing at such
time. No reallocation hereunder shall constitute a waiver or release of any
claim of any party hereunder against a Defaulting Lender arising from that
Lender having become a Defaulting Lender, including any claim of a
Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased
exposure following such reallocation;

(b) if the reallocation described in clause (a) above cannot, or can only
partially, be effected, the Borrower shall within one Business Day following
notice by the Administrative Agent, cash collateralize for the benefit of the
Issuing Lender the Borrower’s obligations corresponding to such Defaulting
Lender’s Letter of Credit Obligations (after giving effect to any partial
reallocation pursuant to clause (a) above) in a deposit account held at the
Administrative Agent for so long as such Letter of Credit Obligations are
outstanding;

(c) if the Borrower cash collateralizes any portion of such Defaulting Lender’s
Letter of Credit Obligations pursuant to clause (b) above, the Borrower shall
not be required to pay any fees to such Defaulting Lender pursuant to
Section 2.9.2 [Letter of Credit Fees] with respect to such Defaulting Lender’s
Letter of Credit Obligations during the period such Defaulting Lender’s Letter
of Credit Obligations are cash collateralized;

(d) if the Letter of Credit Obligations of the non-Defaulting Lenders are
reallocated pursuant to clause (a) above, then the fees payable to the Lenders
pursuant to Section 2.9.2 shall be adjusted in accordance with such
non-Defaulting Lenders’ Ratable Share; and

(e) if all or any portion of such Defaulting Lender’s Letter of Credit
Obligations are neither reallocated nor cash collateralized pursuant to clause
(a) or (b) above, then, without prejudice to any rights or remedies of the
Issuing Lender or any other Lender hereunder, all Letter of Credit Fees payable
under Section 2.9.2 with respect to such Defaulting Lender’s Letter of Credit
Obligations shall be payable to the Issuing Lender (and not to such Defaulting
Lender) until and to the extent that such Letter of Credit Obligations are
reallocated and/or cash collateralized; and

 

33

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

(iv) so long as such Lender is a Defaulting Lender, the Issuing Lender shall not
be required to issue, amend or increase any Letter of Credit, unless such
Issuing Lender is satisfied that the related exposure and the Defaulting
Lender’s then outstanding Letter of Credit Obligations will be 100% covered by
the Revolving Credit Commitments and/or DOJ/EPA Letter of Credit Commitments of
the non-Defaulting Lenders and/or cash collateral will be provided by the
Borrower in accordance with Section 2.10(iii), and participating interests in
any newly issued or increased Letter of Credit shall be allocated among
non-Defaulting Lenders in a manner consistent with Section 2.10(iii)(a) (and
such Defaulting Lender shall not participate therein).

If (i) a Bankruptcy Event with respect to a parent company of any Lender shall
occur following the date hereof and for so long as such event shall continue, or
(ii) PNC or the Issuing Lender has a good faith belief that any Lender has
defaulted in fulfilling its obligations under one or more other agreements in
which such Lender commits to extend credit, the Issuing Lender shall not be
required to issue, amend or increase any Letter of Credit, unless PNC or the
Issuing Lender, as the case may be, shall have entered into arrangements with
the Borrower or such Lender, satisfactory to PNC or the Issuing Lender, as the
case may be, to defease any risk to it in respect of such Lender hereunder.

In the event that the Administrative Agent, the Borrower, PNC and the Issuing
Lender agree in writing that a Defaulting Lender has adequately remedied all
matters that caused such Lender to be a Defaulting Lender, then the
Administrative Agent will so notify the parties hereto, and the Ratable Share of
the Letter of Credit Obligations of the Lenders shall be readjusted to reflect
the inclusion of such Lender’s Commitment, and on such date such Lender shall
purchase at par such of the Loans of the other Lenders as the Administrative
Agent shall determine may be necessary in order for such Lender to hold such
Loans in accordance with its Ratable Share.

2.11 Reduction of Revolving Credit Commitment. The Borrower shall have the right
at any time after the Closing Date upon five (5) days’ prior written notice to
the Administrative Agent to permanently reduce (ratably among the Lenders in
proportion to their Ratable Shares) the Revolving Credit Commitments, in a
minimum amount of $5,000,000 and whole multiples of $1,000,000, or to terminate
completely the Revolving Credit Commitments, without penalty or premium except
as hereinafter set forth; provided that (i) any such reduction or termination
shall be accompanied by prepayment of the Notes, together with outstanding
Commitment Fees, and the full amount of interest accrued on the principal sum to
be prepaid (and all amounts referred to in Section 5.10 [Indemnity] hereof) to
the extent necessary to cause the aggregate Revolving Facility Usage after
giving effect to such prepayments to be equal to or less than the Revolving
Credit Commitments as so reduced or terminated, (ii) after giving effect to such
reduction Borrower has Undrawn Availability at all times thereafter in an amount
equal to at least $10,000,000 and (iii) contemporaneously with any termination
completely of the Revolving Credit Commitments, Borrower shall Cash
Collateralize such Letter of Credit Obligations pursuant to Section 2.9.11. Any
notice to reduce the Revolving Credit Commitments under this Section 2.1. shall
be irrevocable.

 

34

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

2.12 Increase in Revolving Credit Commitments.

2.12.1 Increasing Lenders and New Lenders. The Borrower may, at any time prior
to the third anniversary of the Closing Date, request that (1) the current
Lenders increase their Revolving Credit Commitments (any current Lender which
elects to increase its Revolving Credit Commitment shall be referred to as an
“Increasing Lender”) or (2) one or more new lenders (each a “New Lender”) join
this Agreement and provide a Revolving Credit Commitment hereunder, subject to
the following terms and conditions:

2.12.1.1 No Obligation to Increase. No current Lender shall be obligated to
increase its Revolving Credit Commitment and any increase in the Revolving
Credit Commitment by any current Lender shall be in the sole discretion of such
current Lender.

2.12.1.2 Defaults. There shall exist no Events of Default or Potential Default
on the effective date of such increase after giving effect to such increase.

2.12.1.3 Aggregate Revolving Credit Commitments. After giving effect to such
increase, the total Revolving Credit Commitments shall not exceed $70,000,000.

2.12.1.4 Minimum Revolving Credit Commitments. After giving effect to such
increase, the amount of the Revolving Credit Commitments provided by each of the
New Lenders and each of the Increasing Lenders shall be at least $5,000,000; and

2.12.1.5 Resolutions; Opinion. The Loan Parties shall deliver to the
Administrative Agent on or before the effective date of such increase the
following documents in a form reasonably acceptable to the Administrative Agent:
(1) certifications of their corporate secretaries with attached resolutions
certifying that the increase in the Revolving Credit Commitment has been
approved by such Loan Parties, and (2) an opinion of counsel addressed to the
Administrative Agent and the Lenders addressing the authorization and execution
of the Loan Documents by, and enforceability of the Loan Documents against, the
Loan Parties.

2.12.1.6 Notes. The Borrower shall execute and deliver (1) to each Increasing
Lender a replacement revolving credit Note reflecting the new amount of such
Increasing Lender’s Revolving Credit Commitment after giving effect to the
increase (and the prior Note issued to such Increasing Lender shall be deemed to
be terminated) and (2) to each New Lender a revolving credit Note reflecting the
amount of such New Lender’s Revolving Credit Commitment.

2.12.1.7 Approval of New Lenders. Any New Lender shall be subject to the
approval of the Administrative Agent, which approval shall not be unreasonably
withheld or delayed.

2.12.1.8 Increasing Lenders. Each Increasing Lender shall confirm its agreement
to increase its Revolving Credit Commitment pursuant to an acknowledgement in a
form acceptable to the Administrative Agent, signed by it and the Borrower and
delivered to the Administrative Agent at least five (5) days before the
effective date of such increase.

2.12.1.9 New Lenders—Joinder. Each New Lender shall execute a lender joinder in
substantially the form of Exhibit 2.5 pursuant to which such New Lender shall
join and become a party to this Agreement and the other Loan Documents with a
Revolving Credit Commitment in the amount set forth in such lender joinder.

 

35

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

2.12.2 Treatment of Outstanding Loans and Letters of Credit.

2.12.2.1 Repayment of Outstanding Loans; Borrowing of New Loans. On the on the
effective date of such increase, the Borrower shall repay all Loans then
outstanding, subject to the Borrower’s indemnity obligations under Section 5.10
[Indemnity]; provided that it may borrow new Loans with a Borrowing Date on such
date. Each of the Lenders shall participate in any new Loans made on or after
such date in accordance with their respective Ratable Shares after giving effect
to the increase in Revolving Credit Commitments contemplated by this
Section 2.5.

2.12.2.2 Outstanding Letters of Credit. Repayment of Outstanding Loans;
Borrowing of New Loans. On the effective date of such increase, each Increasing
Lender and each New Lender (i) will be deemed to have purchased a participation
in each then outstanding Letter of Credit equal to its Ratable Share of such
Letter of Credit and the participation of each other Lender in such Letter of
Credit shall be adjusted accordingly and (ii) will acquire, (and will pay to the
Administrative Agent, for the account of each Lender, in immediately available
funds, an amount equal to) its Ratable Share of all outstanding Participation
Advances.

3. RESERVED

4. INTEREST RATES

4.1 Interest Rate Options. The Borrower shall pay interest in respect of the
outstanding unpaid principal amount of the Loans as selected by it from the Base
Rate Option or LIBOR Rate Option set forth below applicable to the Loans, it
being understood that, subject to the provisions of this Agreement, the Borrower
may select different Interest Rate Options and different Interest Periods to
apply simultaneously to the Loans comprising different Borrowing Tranches and
may convert to or renew one or more Interest Rate Options with respect to all or
any portion of the Loans comprising any Borrowing Tranche; provided that there
shall not be at any one time outstanding more than six (6) Borrowing Tranches in
the aggregate among all of the Loans and provided further that if an Event of
Default or Potential Default exists and is continuing, the Borrower may not
request, convert to, or renew the LIBOR Rate Option for any Loans and the
Required Lenders may demand that all existing Borrowing Tranches bearing
interest under the LIBOR Rate Option shall be converted immediately to the Base
Rate Option, subject to the obligation of the Borrower to pay any indemnity
under Section 5.10 [Indemnity] in connection with such conversion. If at any
time the designated rate applicable to any Loan made by any Lender exceeds such
Lender’s highest lawful rate, the rate of interest on such Lender’s Loan shall
be limited to such Lender’s highest lawful rate.

4.1.1 Revolving Credit Interest Rate Options. The Borrower shall have the right
to select from the following Interest Rate Options applicable to the Revolving
Credit Loans:

(i) Revolving Credit Base Rate Option: A fluctuating rate per annum (computed on
the basis of a year of 365 or 366 days, as the case may be, and actual days
elapsed) equal to the Base Rate plus the Applicable Margin, such interest rate
to change automatically from time to time effective as of the effective date of
each change in the Base Rate; or

 

36

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

(ii) Revolving Credit LIBOR Rate Option: A rate per annum (computed on the basis
of a year of 360 days and actual days elapsed) equal to the LIBOR Rate plus the
Applicable Margin.

4.1.2 Reserved.

4.1.3 Rate Quotations. The Borrower may call the Administrative Agent on or
before the date on which a Loan Request is to be delivered to receive an
indication of the rates then in effect, but it is acknowledged that such
projection shall not be binding on the Administrative Agent or the Lenders nor
affect the rate of interest which thereafter is actually in effect when the
election is made.

4.2 Interest Periods. At any time when the Borrower shall select, convert to or
renew a LIBOR Rate Option, the Borrower shall notify the Administrative Agent
thereof at least three (3) Business Days prior to the effective date of such
LIBOR Rate Option by delivering a Loan Request. The notice shall specify an
Interest Period during which such Interest Rate Option shall apply.
Notwithstanding the preceding sentence, the following provisions shall apply to
any selection of, renewal of, or conversion to a LIBOR Rate Option:

4.2.1 Amount of Borrowing Tranche. Each Borrowing Tranche of Loans under the
LIBOR Rate Option shall be in integral multiples of $100,000 and not less than
$500,000; and

4.2.2 Renewals. In the case of the renewal of a LIBOR Rate Option at the end of
an Interest Period, the first day of the new Interest Period shall be the last
day of the preceding Interest Period, without duplication in payment of interest
for such day.

4.3 Interest After Default. To the extent permitted by Law, upon the occurrence
of an Event of Default and until such time such Event of Default shall have been
cured or waived, and at the discretion of the Administrative Agent or upon
written demand by the Required Lenders to the Administrative Agent:

4.3.1 Letter of Credit Fees, Interest Rate. The Letter of Credit Fees and the
rate of interest for each Loan otherwise applicable pursuant to Section 2.9.2
[Letter of Credit Fees] or Section 4.1 [Interest Rate Options], respectively,
shall be increased by 3.0% per annum;

4.3.2 Other Obligations. Each other Obligation hereunder if not paid when due
shall bear interest at a rate per annum equal to the sum of the rate of interest
applicable under the Revolving Credit Base Rate Option plus an additional
3.0% per annum from the time such Obligation becomes due and payable and until
it is paid in full; and

4.3.3 Acknowledgment. The Borrower acknowledges that the increase in rates
referred to in this Section 4.3 reflects, among other things, the fact that such
Loans or other amounts have become a substantially greater risk given their
default status and that the Lenders are entitled to additional compensation for
such risk; and all such interest shall be payable by Borrower upon demand by
Administrative Agent.

 

37

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

4.4 LIBOR Rate Unascertainable; Illegality; Increased Costs; Deposits Not
Available.

4.4.1 Unascertainable. If on any date on which a LIBOR Rate would otherwise be
determined, the Administrative Agent shall have reasonably determined that:

(i) adequate and reasonable means do not exist for ascertaining such LIBOR Rate,
or

(ii) a contingency has occurred which materially and adversely affects the
London interbank eurodollar market relating to the LIBOR Rate,

then, the Administrative Agent shall have the rights specified in Section 4.4.3
[Administrative Agent’s and Lender’s Rights].

4.4.2 Illegality; Increased Costs; Deposits Not Available. If at any time any
Lender shall have determined that:

(i) the making, maintenance or funding of any Loan to which a LIBOR Rate Option
applies has been made impracticable or unlawful by compliance by such Lender in
good faith with any Law or any interpretation or application thereof by any
Official Body or with any request or directive of any such Official Body
(whether or not having the force of Law), or

(ii) such LIBOR Rate Option will not adequately and fairly reflect the cost to
such Lender of the establishment or maintenance of any such Loan, or

(iii) after making all reasonable efforts, deposits of the relevant amount in
Dollars for the relevant Interest Period for a Loan, or to banks generally, to
which a LIBOR Rate Option applies, respectively, are not available to such
Lender with respect to such Loan, or to banks generally, in the interbank
eurodollar market,

then the Administrative Agent shall have the rights specified in Section 4.4.3
[Administrative Agent’s and Lender’s Rights].

 

38

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

4.4.3 Administrative Agent’s and Lender’s Rights. In the case of any event
specified in Section 4.4.1 [Unascertainable] above, the Administrative Agent
shall promptly so notify the Lenders and the Borrower thereof, and in the case
of an event specified in Section 4.4.2 [Illegality; Increased Costs; Deposits
Not Available] above, such Lender shall promptly so notify the Administrative
Agent and endorse a certificate to such notice as to the specific circumstances
of such notice, and the Administrative Agent shall promptly send copies of such
notice and certificate to the other Lenders and the Borrower. Upon such date as
shall be specified in such notice (which shall not be earlier than the date such
notice is given), the obligation of (A) the Lenders, in the case of such notice
given by the Administrative Agent, or (B) such Lender, in the case of such
notice given by such Lender, to allow the Borrower to select, convert to or
renew a LIBOR Rate Option shall be suspended until the Administrative Agent
shall have later notified the Borrower, or such Lender shall have later notified
the Administrative Agent, of the Administrative Agent’s or such Lender’s, as the
case may be, determination that the circumstances giving rise to such previous
determination no longer exist. If at any time the Administrative Agent makes a
determination under Section 4.4.1 [Unascertainable] and the Borrower has
previously notified the Administrative Agent of its selection of, conversion to
or renewal of a LIBOR Rate Option and such Interest Rate Option has not yet gone
into effect, such notification shall be deemed to provide for selection of,
conversion to or renewal of the Base Rate Option otherwise available with
respect to such Loans. If any Lender notifies the Administrative Agent of a
determination under Section 4.4.2 [Illegality; Increased Costs; Deposits Not
Available], the Borrower shall, subject to the Borrower’s indemnification
Obligations under Section 5.10 [Indemnity], as to any Loan of the Lender to
which a LIBOR Rate Option applies, on the date specified in such notice either
convert such Loan to the Base Rate Option otherwise available with respect to
such Loan or prepay such Loan in accordance with Section 5.6 [Voluntary
Prepayments]. Absent due notice from the Borrower of conversion or prepayment,
such Loan shall automatically be converted to the Base Rate Option otherwise
available with respect to such Loan upon such specified date.

4.5 Selection of Interest Rate Options. If the Borrower fails to select a new
Interest Period to apply to any Borrowing Tranche of Loans under the LIBOR Rate
Option at the expiration of an existing Interest Period applicable to such
Borrowing Tranche in accordance with the provisions of Section 4.2 [Interest
Periods], the Borrower shall be deemed to have converted such Borrowing Tranche
to the Revolving Credit Base Rate Option commencing upon the last day of the
existing Interest Period.

5. PAYMENTS

5.1 Payments. All payments and prepayments to be made in respect of principal,
interest, Commitment Fees, Letter of Credit Fees, or other fees or amounts due
from the Borrower hereunder shall be payable prior to 11:00 a.m. on the date
when due without presentment, demand, protest or notice of any kind, all of
which are hereby expressly waived by the Borrower, and without set-off,
counterclaim or other deduction of any nature, and an action therefor shall
immediately accrue. Such payments shall be made to the Administrative Agent at
the Principal Office for the ratable accounts of the Lenders with respect to the
Revolving Credit Loans or DOJ/EPA Loans in U.S. Dollars and in immediately
available funds, and the Administrative Agent shall promptly distribute such
amounts to the Lenders in immediately available funds; provided that in the
event payments are received by 11:00 a.m. by the Administrative Agent with
respect to the Loans and such payments are not distributed to the Lenders on the
same day received by the Administrative Agent, the Administrative Agent shall
pay the Lenders the Federal Funds Effective Rate with respect to the amount of
such payments for each day held by the Administrative Agent and not distributed
to the Lenders. The Administrative Agent’s and each Lender’s statement of
account, ledger or other relevant record shall, in the absence of manifest
error, be conclusive as the statement of the amount of principal of and interest
on the Loans and other amounts owing under this Agreement and shall be deemed an
“account stated.”

 

39

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

5.2 Pro Rata Treatment of Lenders. Each borrowing of Revolving Credit Loans
shall be allocated to each Lender according to its Ratable Share, and each
selection of, conversion to or renewal of any Interest Rate Option and each
payment or prepayment by the Borrower with respect to principal, interest,
Commitment Fees and Letter of Credit Fees (but excluding the Issuing Lender’s
fronting fee) shall (except as otherwise may be provided with respect to a
Defaulting Lender and except as provided in Section 4.4.3 [Administrative
Agent’s and Lender’s Rights] in the case of an event specified in Section 4.4
[LIBOR Rate Unascertainable; Etc.], 5.6.2 [Replacement of a Lender] or 5.8
[Increased Costs]) be payable ratably among the Lenders entitled to such payment
in accordance with the amount of principal, interest, Commitment Fees and Letter
of Credit Fees, as set forth in this Agreement.

5.3 Sharing of Payments by Lenders. If any Lender shall, by exercising any right
of setoff, counterclaim or banker’s lien, by receipt of voluntary payment, by
realization upon security, or by any other non-pro rata source, obtain payment
in respect of any principal of or interest on any of its Loans or other
obligations hereunder resulting in such Lender’s receiving payment of a
proportion of the aggregate amount of its Loans and accrued interest thereon or
other such obligations greater than the pro-rata share of the amount such Lender
is entitled thereto, then the Lender receiving such greater proportion shall
(a) notify the Administrative Agent of such fact, and (b) purchase (for cash at
face value) participations in the Loans and such other obligations of the other
Lenders, or make such other adjustments as shall be equitable, so that the
benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans and other amounts owing them, provided that:

(i) if any such participations are purchased and all or any portion of the
payment giving rise thereto is recovered, such participations shall be rescinded
and the purchase price restored to the extent of such recovery, together with
interest or other amounts, if any, required by Law (including court order) to be
paid by the Lender or the holder making such purchase; and

(ii) the provisions of this Section 5.3 shall not be construed to apply to
(x) any payment made by the Loan Parties pursuant to and in accordance with the
express terms of the Loan Documents or (y) any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its
Loans or Participation Advances to any assignee or participant, other than to
the Borrower or any Subsidiary thereof (as to which the provisions of this
Section 5.3 shall apply).

Each Loan Party consents to the foregoing and agrees, to the extent it may
effectively do so under applicable Law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against each
Loan Party rights of setoff and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of each Loan Party in the
amount of such participation.

5.4 Presumptions by Administrative Agent. Unless the Administrative Agent shall
have received notice from the Borrower prior to the date on which any payment is
due to the Administrative Agent for the account of the Lenders or the Issuing
Lender hereunder that the Borrower will not make such payment, the
Administrative Agent may assume that the Borrower has made such payment on such
date in accordance herewith and may, in reliance upon such assumption,
distribute to the Lenders or the Issuing Lender, as the case may be, the amount
due. In such event, if the Borrower has not in fact made such payment, then each
of the Lenders or the Issuing Lender, as the case may be, severally agrees to
repay to the Administrative Agent forthwith on demand the amount so distributed
to such Lender or the Issuing Lender, with interest thereon, for each day from
and including the date such amount is distributed to it but excluding the date
of payment to the Administrative Agent, at the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation.

 

40

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

5.5 Interest Payment Dates. Interest on Loans to which the Base Rate Option
applies shall be due and payable in arrears on each Payment Date. Interest on
Loans to which the LIBOR Rate Option applies shall be due and payable on the
last day of each Interest Period for those Loans and, if such Interest Period is
longer than three (3) Months, also on the 90th day of such Interest Period.
Interest on mandatory prepayments of principal under Section 5.7 [Mandatory
Prepayments] shall be due on the date such mandatory prepayment is due. Interest
on the principal amount of each Loan or other monetary Obligation shall be due
and payable on demand after such principal amount or other monetary Obligation
becomes due and payable (whether on the stated Expiration Date, upon
acceleration or otherwise).

5.6 Voluntary Prepayments.

5.6.1 Right to Prepay. The Borrower shall have the right at its option from time
to time to prepay the Loans in whole or part without premium or penalty (except
as provided in Section 5.6.2 [Replacement of a Lender] below, in Section 5.8
[Increased Costs] and Section 5.10 [Indemnity]). Whenever the Borrower desires
to prepay any part of the Loans, it shall provide a prepayment notice to the
Administrative Agent by 1:00 p.m. at least one (1) Business Day prior to the
date of prepayment of the Revolving Credit Loans, setting forth the following
information:

(w) the date, which shall be a Business Day, on which the proposed prepayment is
to be made;

(x) a statement indicating the application of the prepayment between to the
Revolving Credit Loans;

(y) a statement indicating the application of the prepayment between Loans to
which the Base Rate Option applies and Loans to which the LIBOR Rate Option
applies; and

(z) the total principal amount of such prepayment, which shall not be less than
the lesser of (i) the Revolving Facility Usage or (ii) $5,000,000 for any
Revolving Credit Loan.

All prepayment notices shall be irrevocable. The principal amount of the Loans
for which a prepayment notice is given, together with interest on such principal
amount except with respect to Loans to which the Base Rate Option applies, shall
be due and payable on the date specified in such prepayment notice as the date
on which the proposed prepayment is to be made. Except as provided in
Section 4.4.3 [Administrative Agent’s and Lender’s Rights], if the Borrower
prepays a Loan but fails to specify the applicable Borrowing Tranche which the
Borrower is prepaying, the prepayment shall be applied (i) to Revolving Credit
Loans; and (ii) after giving effect to the allocations in clause (i) above and
in the preceding sentence, first to Loans to which the Base Rate Option applies,
then to Loans to which the LIBOR Rate Option applies. Any prepayment hereunder
shall be subject to the Borrower’s Obligation to indemnify the Lenders under
Section 5.10 [Indemnity].

 

41

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

5.6.2 Replacement of a Lender. In the event any Lender (i) gives notice under
Section 4.4 [LIBOR Rate Unascertainable, Etc.], (ii) requests compensation under
Section 5.8 [Increased Costs], or requires the Borrower to pay any Indemnified
Taxes or additional amount to any Lender or any Official Body for the account of
any Lender pursuant to Section 5.9 [Taxes], (iii) is a Defaulting Lender,
(iv) becomes subject to the control of an Official Body (other than normal and
customary supervision), or (v) is a Non-Consenting Lender referred to in
Section 11.1 [Modifications, Amendments or Waivers], then in any such event the
Borrower may, at its sole expense, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in, and
consents required by, Section 11.8 [Successors and Assigns]), all of its
interests, rights (other than existing rights to payments pursuant to Sections
5.8 [Increased Costs] or 5.9 [Taxes]) and obligations under this Agreement and
the related Loan Documents to an assignee that shall assume such obligations
(which assignee may be another Lender, if a Lender accepts such assignment),
provided that:

(i) the Borrower shall have paid to the Administrative Agent the assignment fee
specified in Section 11.8 [Successors and Assigns], except in the case of
Section 5.6.2(iii) below;

(ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and Participation Advances, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder and under
the other Loan Documents (including any amounts under Section 5.10 [Indemnity])
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrower (in the case of all other amounts);

(iii) in the case of any such assignment resulting from a claim for compensation
under Section 5.8.1 [Increased Costs Generally] or payments required to be made
pursuant to Section 5.9 [Taxes], such assignment will result in a reduction in
such compensation or payments thereafter; and

(iv) such assignment does not conflict with applicable Law.

A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.

5.7 Mandatory Prepayments.

5.7.1 Sale of Assets/Issuance of Indebtedness. Within five (5) Business Days of
any sale of assets authorized by Sections 8.2.7(v) and 8.2.7.(vi) [Disposition
of Assets or Subsidiaries] or the issuance or incurrence of Indebtedness by
Borrower, the Borrower shall make a mandatory prepayment of principal on the
Revolving Credit Loans which shall result in a permanent reduction on a
dollar-for-dollar basis of the Revolving Credit Commitment equal to the
after-tax proceeds of such sale (as estimated in good faith by the Borrower)
and/or the net cash proceeds of such issuance or incurrence, together with
accrued interest on such principal amount. The foregoing shall not be deemed to
be implied consent to any such issuance and/or incurrence of Indebtedness.

 

42

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

5.7.2 Application Among Interest Rate Options. All prepayments required pursuant
to this Section 5.7 shall first be applied among the Interest Rate Options to
the principal amount of the Loans subject to the Base Rate Option, then to Loans
subject to a LIBOR Rate Option. In accordance with Section 5.10 [Indemnity], the
Borrower shall indemnify the Lenders for any loss or expense, including loss of
margin, incurred with respect to any such prepayments applied against Loans
subject to a LIBOR Rate Option on any day other than the last day of the
applicable Interest Period.

5.8 Increased Costs.

5.8.1 Increased Costs Generally. If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, compulsory
loan, insurance charge or similar requirement against assets of, deposits with
or for the account of, or credit extended or participated in by, any Lender
(except any reserve requirement reflected in the LIBOR Rate) or the Issuing
Lender;

(ii) subject any Recipient to any Taxes (other than (A) Indemnified Taxes,
(B) Taxes described in clauses (ii) through (iv) of the definition of Excluded
Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of
credit, commitments, or other obligations, or its deposits, reserves, other
liabilities or capital attributable thereto; or

(iii) impose on any Lender, the Issuing Lender or the London interbank market
any other condition, cost or expense (other than Taxes) affecting this Agreement
or Loans made by such Lender or any Letter of Credit or participation therein;

and the result of any of the foregoing shall be to increase the cost to such
Lender or such other Recipient of making, converting to, continuing or
maintaining any Loan or of maintaining its obligation to make any such Loan, or
to increase the cost to such Lender, the Issuing Lender or such other Recipient
of participating in, issuing or maintaining any Letter of Credit (or of
maintaining its obligation to participate in or to issue any Letter of Credit),
or to reduce the amount of any sum received or receivable by such Lender, the
Issuing Lender or other Recipient hereunder (whether of principal, interest or
any other amount) then, upon request of such Lender, the Issuing Lender or other
Recipient, the Borrower will pay to such Lender, the Issuing Lender or other
Recipient, as the case may be, such additional amount or amounts as will
compensate such Lender or the Issuing Lender, as the case may be, for such
additional costs incurred or reduction suffered.

 

43

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

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

5.8.3 Certificates for Reimbursement; Repayment of Outstanding Loans; Borrowing
of New Loans. A certificate of a Lender or the Issuing Lender setting forth in
reasonably sufficient detail for the calculation of the amount or amounts
necessary to compensate such Lender or the Issuing Lender or its holding
company, as the case may be, as specified in Sections 5.8.1 [Increased Costs
Generally] or 5.8.2 [Capital Requirements] and delivered to the Borrower shall
be conclusive absent manifest error. The Borrower shall pay such Lender or the
Issuing Lender, as the case may be, the amount shown as due on any such
certificate within ten (10) days after receipt thereof.

5.8.4 Delay in Requests. Failure or delay on the part of any Lender or the
Issuing Lender to demand compensation pursuant to this Section shall not
constitute a waiver of such Lender’s or the Issuing Lender’s right to demand
such compensation, provided that the Borrower shall not be required to
compensate a Lender or the Issuing Lender pursuant to this Section for any
increased costs incurred or reductions suffered more than nine months prior to
the date that such Lender or the Issuing Lender, as the case may be, notifies
the Borrower of the Change in Law giving rise to such increased costs or
reductions and of such Lender’s or the Issuing Lender’s intention to claim
compensation therefor (except that, if the Change in Law giving rise to such
increased costs or reductions is retroactive, then the nine (9) month period
referred to above shall be extended to include the period of retroactive effect
thereof).

5.9 Taxes.

5.9.1 Issuing Lender. For purposes of this Section 5.9, the term “Lender”
includes the Issuing Lender.

5.9.2 Payments Free of Taxes. Any and all payments by or on account of any
obligation of any Loan Party under any Loan Document shall be without deduction
or withholding for any Taxes, except as required by applicable Law. If any
applicable Law (as determined in the good faith discretion of an applicable
Withholding Agent) requires the deduction or withholding of any Tax from any
such payment by a Withholding Agent, then the applicable Withholding Agent shall
be entitled to make such deduction or withholding and shall timely pay the full
amount deducted or withheld to the relevant Official Body in accordance with
applicable Law and, if such Tax is an Indemnified Tax, then the sum payable by
the applicable Loan Party shall be increased as necessary so that after such
deduction or withholding has been made (including such deductions and
withholdings applicable to additional sums payable under this Section 5.9
[Taxes]) the applicable Recipient receives an amount equal to the sum it would
have received had no such deduction or withholding been made.

 

44

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

5.9.3 Payment of Other Taxes by the Loan Parties. The Loan Parties shall timely
pay to the relevant Official Body in accordance with applicable Law, or at the
option of the Administrative Agent timely reimburse it for the payment of, any
Other Taxes.

5.9.4 Indemnification by the Loan Parties. The Loan Parties shall jointly and
severally indemnify each Recipient, within ten (10) days after demand therefor,
for the full amount of any Indemnified Taxes (including Indemnified Taxes
imposed or asserted on or attributable to amounts payable under this Section 5.9
[Taxes]) payable or paid by such Recipient or required to be withheld or
deducted from a payment to such Recipient and any reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes were
correctly or legally imposed or asserted by the relevant Official Body. A
certificate as to the amount of such payment or liability reasonably describing
the basis for such determination delivered to the Borrower by a Lender (with a
copy to the Administrative Agent), or by the Administrative Agent on its own
behalf or on behalf of a Lender, shall be conclusive absent manifest error.

5.9.5 Indemnification by the Lenders. Each Lender shall severally indemnify the
Administrative Agent, within ten (10) days after demand therefor, for (i) any
Indemnified Taxes attributable to such Lender (but only to the extent that any
Loan Party has not already indemnified the Administrative Agent for such
Indemnified Taxes and without limiting the obligation of any of the Loan Parties
to do so), (ii) any Taxes attributable to such Lender’s failure to comply with
the provisions of Section 11.8.4 [Participations] relating to the maintenance of
a Participant Register, and (iii) any Excluded Taxes attributable to such
Lender, in each case, that are payable or paid by the Administrative Agent in
connection with any Loan Document, and any reasonable expenses arising therefrom
or with respect thereto, whether or not such Taxes were correctly or legally
imposed or asserted by the relevant Official Body. A certificate as to the
amount of such payment or liability reasonably describing the basis for such
determination delivered to any Lender by the Administrative Agent shall be
conclusive absent manifest error. Each Lender hereby authorizes the
Administrative Agent to set off and apply any and all amounts at any time owing
to such Lender under any Loan Document or otherwise payable by the
Administrative Agent to the Lender from any other source against any amount due
to the Administrative Agent under this Section 5.9.5 [Indemnification by the
Lenders].

5.9.6 Evidence of Payments. As soon as practicable after any payment of Taxes by
any Loan Party to an Official Body pursuant to this Section 5.9 [Taxes], such
Loan Party shall deliver to the Administrative Agent the original or a certified
copy of a receipt issued by such Official Body evidencing such payment, a copy
of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.

 

45

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

5.9.7 Status of Lenders.

(i) Any Lender that is entitled to an exemption from or reduction of withholding
Tax with respect to payments made under any Loan Document shall deliver to the
Borrower and the Administrative Agent, at the time or times reasonably requested
by the Borrower or the Administrative Agent, such properly completed and
executed documentation reasonably requested by the Borrower or the
Administrative Agent as will permit such payments to be made without withholding
or at a reduced rate of withholding. In addition, any Lender, if reasonably
requested by the Borrower or the Administrative Agent, shall deliver such other
documentation prescribed by applicable Law or reasonably requested by the
Borrower or the Administrative Agent as will enable the Borrower or the
Administrative Agent to determine whether or not such Lender is subject to
backup withholding or information reporting requirements. Notwithstanding
anything to the contrary in the preceding two sentences, the completion,
execution and submission of such documentation (other than such documentation
set forth in Section 5.9.7(ii)(A), (ii)(B) and (ii)(D) below) shall not be
required if in the Lender’s reasonable judgment such completion, execution or
submission would subject such Lender to any material unreimbursed cost or
expense or would materially prejudice the legal or commercial position of such
Lender.

(ii) Without limiting the generality of the foregoing, in the event that the
Borrower is a U.S. Borrower,

(A) any Lender that is a U.S. Person shall deliver to the Borrower and the
Administrative Agent on or prior to the date on which such Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Borrower or the Administrative Agent), executed
originals of IRS Form W-9 certifying that such Lender is exempt from U.S.
federal backup withholding tax;

(B) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of the Borrower or the Administrative
Agent), whichever of the following is applicable:

(i) in the case of a Foreign Lender claiming the benefits of an income tax
treaty to which the United States is a party (x) with respect to payments of
interest under any Loan Document, executed originals of IRS Form W-8BEN
establishing an exemption from, or reduction of, U.S. federal withholding Tax
pursuant to the “interest” article of such tax treaty and (y) with respect to
any other applicable payments under any Loan Document, IRS Form W-8BEN
establishing an exemption from, or reduction of, U.S. federal withholding Tax
pursuant to the “business profits” or “other income” article of such tax treaty;

(ii) executed originals of IRS Form W-8ECI;

(iii) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Code, (x) a certificate
substantially in the form of Exhibit 5.9.7(A) to the effect that such Foreign
Lender is not (A) a “bank” within the meaning of Section 881(c)(3)(A) of the
Code, (B) a “10 percent shareholder” of the Borrower within the meaning of
Section 881(c)(3)(B) of the Code, or (C) a “controlled foreign corporation”
described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance
Certificate”) and (y) executed originals of IRS Form W-8BEN; or

 

46

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

(iv) to the extent a Foreign Lender is not the beneficial owner, executed
originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, a
U.S. Tax Compliance Certificate substantially in the form of Exhibit 5.9.7(B) or
Exhibit 5.9.7(C), IRS Form W-9, and/or other certification documents from each
beneficial owner, as applicable; provided that if the Foreign Lender is a
partnership and one or more direct or indirect partners of such Foreign Lender
are claiming the portfolio interest exemption, such Foreign Lender may provide a
U.S. Tax Compliance Certificate substantially in the form of Exhibit 5.9.7(D) on
behalf of each such direct and indirect partner;

(C) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of the Borrower or the Administrative
Agent), executed originals of any other form prescribed by applicable Law as a
basis for claiming exemption from or a reduction in U.S. federal withholding
Tax, duly completed, together with such supplementary documentation as may be
prescribed by applicable Law to permit the Borrower or the Administrative Agent
to determine the withholding or deduction required to be made; and

(D) if a payment made to a Lender under any Loan Document would be subject to
U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender
shall deliver to the Borrower and the Administrative Agent at the time or times
prescribed by law and at such time or times reasonably requested by the Borrower
or the Administrative Agent such documentation prescribed by applicable law
(including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such
additional documentation reasonably requested by the Borrower or the
Administrative Agent as may be necessary for the Borrower and the Administrative
Agent to comply with their obligations under FATCA and to determine that such
Lender has complied with such Lender’s obligations under FATCA or to determine
the amount to deduct and withhold from such payment. Solely for purposes of this
clause (D), “FATCA” shall include any amendments made to FATCA after the date of
this Agreement.

Each Lender agrees that if any form or certification it previously delivered
expires or becomes obsolete or inaccurate in any respect, it shall update such
form or certification or promptly notify the Borrower and the Administrative
Agent in writing of its legal inability to do so.

 

47

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

5.9.8 Treatment of Certain Refunds. If any party determines, in its sole
discretion exercised in good faith, that it has received a refund of any Taxes
as to which it has been indemnified pursuant to this Section 5.9 [Taxes]
(including by the payment of additional amounts pursuant to this Section 5.9
[Taxes]), it shall pay to the indemnifying party an amount equal to such refund
(but only to the extent of indemnity payments made under this Section 5.9
[Taxes] with respect to the Taxes giving rise to such refund), net of all
out-of-pocket expenses (including Taxes) of such indemnified party and without
interest (other than any interest paid by the relevant Official Body with
respect to such refund). Such indemnifying party, upon the request of such
indemnified party incurred in connection with obtaining such refund, shall repay
to such indemnified party the amount paid over pursuant to this Section 5.9.8
[Treatment of Certain Refunds] (plus any penalties, interest or other charges
imposed by the relevant Official Body) in the event that such indemnified party
is required to repay such refund to such Official Body. Notwithstanding anything
to the contrary in this Section 5.9.8 [Treatment of Certain Refunds]), in no
event will the indemnified party be required to pay any amount to an
indemnifying party pursuant to this Section 5.9.8 [Treatment of Certain Refunds]
the payment of which would place the indemnified party in a less favorable net
after-Tax position than the indemnified party would have been in if the
indemnification payments or additional amounts giving rise to such refund had
never been paid. This paragraph shall not be construed to require any
indemnified party to make available its Tax returns (or any other information
relating to its Taxes that it deems confidential) to the indemnifying party or
any other Person.

5.9.9 Survival. Each party’s obligations under this Section 5.9 [Taxes] shall
survive the resignation of the Administrative Agent or any assignment of rights
by, or the replacement of, a Lender, the termination of the Commitments and the
repayment, satisfaction or discharge of all Obligations.

5.10 Indemnity. In addition to the compensation or payments required by
Section 5.8 [Increased Costs] or Section 5.9 [Taxes], the Borrower shall
indemnify each Lender against all liabilities, losses or expenses (including
loss of anticipated profits, any foreign exchange losses and any loss or expense
arising from the liquidation or reemployment of funds obtained by it to maintain
such Loan, from fees payable to terminate the deposits from which such funds
were obtained or from the performance of any foreign exchange contract) which
such Lender sustains or incurs as a consequence of any:

(i) payment, prepayment, conversion or renewal of any Loan to which a LIBOR Rate
Option applies on a day other than the last day of the corresponding Interest
Period (whether or not such payment or prepayment is mandatory, voluntary or
automatic and whether or not such payment or prepayment is then due),

(ii) attempt by the Borrower to revoke (expressly, by later inconsistent notices
or otherwise) in whole or part any Loan Requests under Section 2.5 [Revolving
Credit Loan Requests] or Section 4.2 [Interest Periods] or notice relating to
prepayments under Section 5.6 [Voluntary Prepayments], or

(iii) default by the Borrower in the performance or observance of any covenant
or condition contained in this Agreement or any other Loan Document, including
any failure of the Borrower to pay when due (by acceleration or otherwise) any
principal, interest, Commitment Fee or any other amount due hereunder.

If any Lender sustains or incurs any such loss or expense, it shall from time to
time notify the Borrower of the amount determined in good faith by such Lender
(which determination may include such assumptions, allocations of costs and
expenses and averaging or attribution methods as such Lender shall deem
reasonable) to be necessary to indemnify such Lender for such loss or expense.
Such notice shall set forth in reasonable detail the basis for such
determination. Such amount shall be due and payable by the Borrower to such
Lender ten (10) Business Days after such notice is given.

 

48

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

5.11 Settlement Date Procedures. The Administrative Agent shall notify each
Lender of its Ratable Share of the total of the Revolving Credit Loans and
DOJ/EPA Loans (each a “Required Share”). On such Settlement Date, each Lender
shall pay to the Administrative Agent the amount equal to the difference between
its Required Share and its Revolving Credit Loans and DOJ/EPA Loans, as
applicable, and the Administrative Agent shall pay to each Lender its Ratable
Share of all payments made by the Borrower to the Administrative Agent with
respect to the Revolving Credit Loans and DOJ/EPA Loans. The Administrative
Agent shall also effect settlement in accordance with the foregoing sentence on
the proposed Borrowing Dates for Revolving Credit Loans and on [Mandatory
Prepayment Dates] and may at its option effect settlement on any other Business
Day. These settlement procedures are established solely as a matter of
administrative convenience, and nothing contained in this Section 5.11 shall
relieve the Lenders of their obligations to fund Revolving Credit Loans on dates
other than a Settlement Date. The Administrative Agent may at any time at its
option for any reason whatsoever require each Lender to pay immediately to the
Administrative Agent such Lender’s Ratable Share of the outstanding Revolving
Credit Loans and each Lender may at any time require the Administrative Agent to
pay immediately to such Lender its Ratable Share of all payments made by the
Borrower to the Administrative Agent with respect to the Revolving Credit Loans.

6. REPRESENTATIONS AND WARRANTIES

6.1 Representations and Warranties. The Loan Parties, jointly and severally,
represent and warrant to the Administrative Agent and each of the Lenders as
follows:

6.1.1 Organization and Qualification; Power and Authority; Compliance With Laws;
Title to Properties; Event of Default. Each Loan Party and each Subsidiary of
each Loan Party (i) is a corporation, partnership or limited liability company
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization, (ii) has the lawful power to own or lease its
properties and to engage in the business it presently conducts or proposes to
conduct, (iii) is duly licensed or qualified and in good standing in each
jurisdiction listed on Schedule 6.1.1 and in all other jurisdictions where the
property owned or leased by it or the nature of the business transacted by it or
both makes such licensing or qualification necessary, (iv) has full power to
enter into, execute, deliver and carry out this Agreement and the other Loan
Documents to which it is a party, to incur the Indebtedness contemplated by the
Loan Documents and to perform its Obligations under the Loan Documents to which
it is a party, and all such actions have been duly authorized by all necessary
proceedings on its part, (v) is in compliance in all material respects with all
applicable Laws (other than Environmental Laws which are specifically addressed
in Section 6.1.14 [Environmental Matters]) in all jurisdictions in which any
Loan Party or Subsidiary of any Loan Party is presently or will be doing
business except where the failure to do so could not reasonably be expected to
constitute a Material Adverse Change, and (vi) has good and marketable title to
or valid leasehold interest in all properties, assets and other rights which it
purports to own or lease or which are reflected as owned or leased on its books
and records, free and clear of all Liens and encumbrances except Permitted
Liens. No Event of Default or Potential Default exists or is continuing.

 

49

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

6.1.2 Subsidiaries and Owners; Investment Companies. Schedule 6.1.2 states
(i) the name of each of the Borrower’s Subsidiaries, its jurisdiction of
organization and the amount, percentage and type of equity interests in such
Subsidiary (the “Subsidiary Equity Interests”), (ii) the name of each holder of
an equity interest in each Borrower other than Parent Borrower, the amount,
percentage and type of such equity interest (the “Borrower Equity Interests”),
and (iii) any options, warrants or other rights outstanding to purchase any such
equity interests referred to in clause (i) or (ii) (collectively the “Equity
Interests”). Except as set forth on Schedule 6.1.2, the Borrower and each
Subsidiary of the Borrower has good and marketable title to all of the
Subsidiary Equity Interests it purports to own, free and clear in each case of
any Lien and all such Subsidiary Equity Interests have been validly issued,
fully paid and nonassessable. None of the Loan Parties or Subsidiaries of any
Loan Party is an “investment company” registered or required to be registered
under the Investment Company Act of 1940 or under the “control” of an
“investment company” as such terms are defined in the Investment Company Act of
1940 and shall not become such an “investment company” or under such “control.”

6.1.3 Validity and Binding Effect. This Agreement and each of the other Loan
Documents (i) has been duly and validly executed and delivered by each Loan
Party, and (ii) constitutes, or will constitute, legal, valid and binding
obligations of each Loan Party which is or will be a party thereto, enforceable
against such Loan Party in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the enforcement of creditors’ rights generally and by
general equitable principles (whether enforcement is sought by proceedings in
equity or at law) and the implied covenants of good faith and fair dealing.

6.1.4 No Conflict; Material Agreements; Consents. Neither the execution and
delivery of this Agreement or the other Loan Documents by any Loan Party nor the
consummation of the transactions herein or therein contemplated or compliance
with the terms and provisions hereof or thereof by any of them will conflict
with, constitute a default under or result in any breach of (i) the terms and
conditions of the certificate of incorporation, bylaws, certificate of limited
partnership, partnership agreement, certificate of formation, limited liability
company agreement or other organizational documents of any Loan Party or
(ii) any Law or any material agreement or instrument or order, writ, judgment,
injunction or decree to which any Loan Party or any of its Subsidiaries is a
party or by which it or any of its Subsidiaries is bound or to which it is
subject, or result in the creation or enforcement of any Lien, charge or
encumbrance whatsoever upon any property (now or hereafter acquired) of any Loan
Party or any of its Subsidiaries (other than Liens granted under the Loan
Documents). There is no default under such material agreement (referred to
above) and none of the Loan Parties or their Subsidiaries is bound by any
contractual obligation, or subject to any restriction in any organization
document, or any requirement of Law which could reasonably be expected to result
in a Material Adverse Change. Except as set forth in Schedule 6.1.4, no consent,
approval, exemption, order or authorization of, or a registration or filing
with, any Official Body or any other Person is required by any Law or any
agreement in connection with the execution, delivery and carrying out of this
Agreement and the other Loan Documents.

 

50

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

6.1.5 Litigation. Except as set forth in Schedule 6.1.5, there are no actions,
suits, proceedings or investigations pending or, to the knowledge of any Loan
Party, threatened in writing against such Loan Party or any Subsidiary of such
Loan Party at law or in equity before any Official Body which individually or in
the aggregate could reasonably be expected to result in any Material Adverse
Change, except with regard to the environmental matters and issues disclosed
herein or otherwise disclosed to the Administrative Agent. None of the Loan
Parties or any Subsidiaries of any Loan Party is in violation of any order,
writ, injunction or any decree of any Official Body which could reasonably be
expected to result in any Material Adverse Change.

6.1.6 Financial Statements.

(i) Historical Statements. The Borrower has delivered to the Administrative
Agent copies of its audited consolidated year-end financial statements for and
as of the end of the fiscal year ended December 31, 2011. In addition, the
Borrower has delivered to the Administrative Agent copies of its unaudited
consolidated interim financial statements for the fiscal year to date and as of
the end of the fiscal quarter ended March 31, 2012 (all such annual and interim
statements being collectively referred to as the “Statements”). The Statements
were compiled from the books and records maintained by the Borrower’s
management, are correct and complete in all material respects and fairly
represent the consolidated financial condition of the Borrower and its
Subsidiaries as of the respective dates thereof and the results of operations
for the fiscal periods then ended and have been prepared in accordance with GAAP
consistently applied, subject (in the case of the interim statements) to normal
year-end audit adjustments and the absence of footnotes.

(ii) Accuracy of Financial Statements. Neither the Borrower nor any Subsidiary
of the Borrower has any material liabilities, contingent or otherwise, or
forward or long-term commitments that are not disclosed in the Statements or in
the notes thereto, and except as disclosed therein there are no unrealized or
anticipated losses from any commitments of the Borrower or any Subsidiary of the
Borrower which could reasonably be expected to cause a Material Adverse Change.
Since December 31, 2011, no Material Adverse Change has occurred, except as set
forth on Schedule 6.1.6.

6.1.7 Margin Stock. None of the Loan Parties or any Subsidiaries of any Loan
Party engages or intends to engage principally, or as one of its important
activities, in the business of extending credit for the purpose, immediately,
incidentally or ultimately, of purchasing or carrying margin stock (within the
meaning of Regulation U, T or X as promulgated by the Board of Governors of the
Federal Reserve System). No part of the proceeds of any Loan has been or will be
used, immediately, incidentally or ultimately, to purchase or carry any margin
stock or to extend credit to others for the purpose of purchasing or carrying
any margin stock or which is inconsistent with the provisions of the regulations
of the Board of Governors of the Federal Reserve System. None of the Loan
Parties or any Subsidiary of any Loan Party holds or intends to hold margin
stock in such amounts that more than 25% of the reasonable value of the assets
of any Loan Party or Subsidiary of any Loan Party are or will be represented by
margin stock.

 

51

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

6.1.8 Full Disclosure. Neither this Agreement nor any other Loan Document, nor
any certificate, statement, agreement or other documents furnished to the
Administrative Agent or any Lender in connection herewith or therewith, contains
any untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements contained herein and therein, in light
of the circumstances under which they were made, not misleading. There is no
fact known to any Loan Party which materially adversely affects the business,
property, assets, financial condition, results of operations or prospects of any
Loan Party or Subsidiary of any Loan Party which has not been set forth in this
Agreement or in the certificates, statements, agreements or other documents
furnished in writing to the Administrative Agent and the Lenders or the Parent
Borrower’s public filings with the Securities and Exchange Commission, prior to
or at the date hereof in connection with the transactions contemplated hereby.

6.1.9 Taxes. All federal, state, local and other tax returns required to have
been filed with respect to each Loan Party and each Subsidiary of each Loan
Party have been filed, and payment or adequate provision has been made for the
payment of all taxes, fees, assessments and other governmental charges which
have or may become due pursuant to said returns or to assessments received,
except to the extent that such taxes, fees, assessments and other charges are
being contested in good faith by appropriate proceedings diligently conducted
and for which such reserves or other appropriate provisions, if any, as shall be
required by GAAP shall have been made.

6.1.10 Patents, Trademarks, Copyrights, Licenses, Etc. Except as set forth on
Schedule 6.1.10, each Loan Party and each Subsidiary of each Loan Party owns or
possesses all the material patents, trademarks, service marks, trade names,
copyrights, licenses, registrations, franchises, permits and rights necessary to
own and operate its properties and to carry on its business as presently
conducted and planned to be conducted by such Loan Party or Subsidiary, without
known possible, alleged or actual conflict with the rights of others, except
where the failure to do so could not reasonably be expected to result in a
Material Adverse Change.

6.1.11 Liens in the Collateral. The Liens in the Collateral granted to the
Administrative Agent for the benefit of the Lenders pursuant to the Patent,
Trademark and Copyright Security Agreement, the Pledge Agreement, the Security
Agreement and the Mortgage (collectively, the “Collateral Documents”) constitute
and will continue to constitute Prior Security Interests. All filing fees and
other expenses in connection with the perfection of such Liens have been or will
be paid by the Borrower.

6.1.12 Insurance. The properties of each Loan Party and each of its Subsidiaries
are insured pursuant to policies and other bonds which are valid and in full
force and effect and which provide adequate coverage from reputable and
financially sound insurers in amounts sufficient to insure the assets and risks
of each such Loan Party and Subsidiary in accordance with prudent business
practice in the industry of such Loan Parties and Subsidiaries.

6.1.13 ERISA Compliance. (i) Each Plan is in compliance in all material respects
with the applicable provisions of ERISA, the Code and other federal or state
Laws. Each Plan that is intended to qualify under Section 401(a) of the Code has
received a favorable determination letter from the IRS or an application for
such a letter is currently being processed by the IRS with respect thereto and,
to the best knowledge of Borrower, nothing has occurred which would prevent, or
cause the loss of, such qualification. Borrower and each ERISA Affiliate have
made all required contributions to each Plan subject to Section 412 of the Code,
and no application for a funding waiver or an extension of any amortization
period pursuant to Section 412 of the Code has been made with respect to any
Plan.

 

52

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

(ii) No ERISA Event has occurred or is reasonably expected to occur; (a) no
Pension Plan has any unfunded pension liability (i.e. excess of benefit
liabilities over the current value of that Pension Plan’s assets, determined in
accordance with the assumptions used for funding the Pension Plan for the
applicable plan year); (b) neither Borrower nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability under Title IV of ERISA
with respect to any Pension Plan (other than premiums due and not delinquent
under Section 4007 of ERISA); (c) neither Borrower nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability (and no event has
occurred which, with the giving of notice under Section 4219 of ERISA, would
result in such liability) under Sections 4201 or 4243 of ERISA with respect to a
Multiemployer Plan; and (d) neither Borrower nor any ERISA Affiliate has engaged
in a transaction that could be subject to Sections 4069 or 4212(c) of ERISA.

6.1.14 Environmental Matters. Each Loan Party is and, to the knowledge of each
respective Loan Party and each of its Subsidiaries is and has been in compliance
in all material respects with applicable Environmental Laws except as disclosed
on Schedule 6.1.14.

6.1.15 Solvency. Before and after giving effect to the initial Loans hereunder,
each of the Loan Parties is solvent.

6.2 Updates to Schedules. Should any of the information or disclosures provided
on any of the Schedules attached hereto become outdated or incorrect in any
material respect, the Borrower shall promptly provide the Administrative Agent
in writing with such revisions or updates to such Schedule as may be reasonably
necessary or appropriate to update or correct same. No Schedule shall be deemed
to have been amended, modified or superseded by any such correction or update,
nor shall any breach of warranty or representation resulting from the inaccuracy
or incompleteness of any such Schedule be deemed to have been cured thereby,
unless and until the Required Lenders, in their reasonable discretion, shall
have accepted in writing such revisions or updates to such Schedule; provided
however, that the Borrower may update Schedules 6.1.1 and 6.1.2 without any
Lender approval in connection with any transaction permitted under Sections
8.2.6 [Liquidations, Mergers, Consolidations, Acquisitions], 8.2.7 [Dispositions
of Assets or Subsidiaries] and 8.2.9 [Subsidiaries, Partnerships and Joint
Ventures].

7. CONDITIONS OF LENDING AND ISSUANCE OF LETTERS OF CREDIT

The obligation of each Lender to make Loans and of the Issuing Lender to issue
Letters of Credit hereunder is subject to the performance by each of the Loan
Parties of its Obligations to be performed hereunder at or prior to the making
of any such Loans or issuance of such Letters of Credit and to the satisfaction
of the following further conditions:

7.1 First Loans and Letters of Credit.

7.1.1 Deliveries. On the Closing Date, the Administrative Agent shall have
received each of the following in form and substance satisfactory to the
Administrative Agent:

 

53

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

(i) A certificate of each of the Loan Parties signed by an Authorized Officer,
dated the Closing Date stating that (w) all representations and warranties of
the Loan Parties set forth in this Agreement are true and correct in all
material respects, (x) the Loan Parties are in compliance with each of the
covenants and conditions hereunder, (y) no Event of Default or Potential Default
exists, and (z) no Material Adverse Change has occurred since the date of the
last audited consolidated financial statements of the Parent Borrower delivered
to the Administrative Agent except as set forth on Schedule 6.1.6;

(ii) A certificate dated the Closing Date and signed by the Secretary or an
Assistant Secretary of each of the Loan Parties, certifying as appropriate as
to: (a) all action taken by each Loan Party in connection with this Agreement
and the other Loan Documents; (b) the names of the Authorized Officers
authorized to sign the Loan Documents and their true signatures; and (c) copies
of its organizational documents as in effect on the Closing Date certified by
the appropriate state official where such documents are filed in a state office
together with certificates from the appropriate state officials as to the
continued existence and good standing of each Loan Party in each state where
organized or qualified to do business;

(iii) This Agreement and each of the other Loan Documents signed by an
Authorized Officer and all appropriate financing statements and appropriate
stock powers and certificates evidencing the pledged Collateral;

(iv) A written opinion of counsel for the Loan Parties, dated the Closing Date;

(v) Evidence that adequate insurance required to be maintained under this
Agreement is in full force and effect, with additional insured, mortgagee and
lender loss payable special endorsements attached thereto in form and substance
satisfactory to the Administrative Agent and its counsel naming the
Administrative Agent as additional insured, mortgagee and lender loss payee;

(vi) A duly completed Compliance Certificate as of the last day of the fiscal
quarter of Borrower most recently ended prior to the Closing Date, signed by an
Authorized Officer of Borrower;

(vii) All material consents required to effectuate the transactions contemplated
hereby;

(viii) Evidence that the Amended and Restated Revolving Credit Agreement dated
October 23, 2008 among Borrower and Bank of America, N.A., has been terminated,
and all outstanding obligations thereunder have been paid and all Liens securing
such obligations have been released;

(ix) A Lien search in acceptable scope and with acceptable results;

(x) An executed landlord’s waiver or other lien waiver agreement from the
lessor, warehouse operator or other applicable Person for each leased Collateral
location as required under the Security Agreement;

 

54

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

(xi) Satisfactory completion by Borrower of the environmental questionnaire
provided by the Administrative Agent; and

(xii) Such other documents in connection with such transactions as the
Administrative Agent or said counsel may reasonably request.

7.1.2 Payment of Fees. The Borrower shall have paid all fees payable on or
before the Closing Date as required by this Agreement or any other Loan
Document.

7.2 Each Loan or Letter of Credit. At the time of making any Loans or issuing,
extending or increasing any Letters of Credit and after giving effect to the
proposed extensions of credit: (i) the representations, warranties of the Loan
Parties shall then be true and correct, (ii) no Event of Default or Potential
Default shall have occurred and be continuing, (iii) the making of the Loans or
issuance, extension or increase of such Letter of Credit shall not contravene
any Law applicable to any Loan Party or Subsidiary of any Loan Party or any of
the Lenders, and (iv) the Borrower shall have delivered to the Administrative
Agent a duly executed and completed Loan Request or to the Issuing Lender an
application for a Letter of Credit, as the case may be.

8. COVENANTS

The Loan Parties, jointly and severally, covenant and agree that until Payment
In Full, the Loan Parties shall comply at all times with the following
covenants:

8.1 Affirmative Covenants.

8.1.1 Preservation of Existence, Etc. Each Loan Party shall, and shall cause
each of its Subsidiaries to, maintain its legal existence as a corporation,
limited partnership or limited liability company and its license or
qualification and good standing in each jurisdiction in which its ownership or
lease of property or the nature of its business makes such license or
qualification necessary, except where the failure to do so could not,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Change or as otherwise expressly permitted in Section 8.2.6
[Liquidations, Mergers, Etc.].

8.1.2 Payment of Liabilities, Including Taxes, Etc. Each Loan Party shall, and
shall cause each of its Subsidiaries to, duly pay and discharge all liabilities
to which it is subject or which are asserted against it, promptly as and when
the same shall become due and payable, including all taxes, assessments and
governmental charges upon it or any of its properties, assets, income or
profits, prior to the date on which penalties attach thereto, except to the
extent that the failure to do so could not reasonably be expected to result in a
Material Adverse Change or to the extent that such liabilities, including taxes,
assessments or charges, are being contested in good faith and by appropriate and
lawful proceedings diligently conducted and for which such reserve or other
appropriate provisions, if any, as shall be required by GAAP shall have been
made.

 

55

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

8.1.3 Maintenance of Insurance. Each Loan Party shall, and shall cause each of
its Subsidiaries to, insure its properties and assets against loss or damage by
fire and such other insurable hazards as such assets are commonly insured
(including fire, extended coverage, property damage, workers’ compensation,
public liability and business interruption insurance) and against other risks
(including errors and omissions) in such amounts as similar properties and
assets are insured by prudent companies in similar circumstances carrying on
similar businesses, and with reputable and financially sound insurers, including
self-insurance to the extent customary, all as reasonably determined by the
Administrative Agent. The Loan Parties shall comply with the covenants and
provide the endorsement set forth on Schedule 8.1.3 relating to property and
related insurance policies covering the Collateral.

8.1.4 Maintenance of Properties and Leases. Each Loan Party shall, and shall
cause each of its Subsidiaries to, maintain in good repair, working order and
condition (ordinary wear and tear excepted) in accordance with the general
practice of other businesses of similar character and size, all of those
properties useful or necessary to its business, and from time to time, such Loan
Party will make or cause to be made all appropriate repairs, renewals or
replacements thereof.

8.1.5 Visitation Rights. Each Loan Party shall, and shall cause each of its
Subsidiaries to, permit any of the officers or authorized employees or
representatives of the Administrative Agent or any of the Lenders to visit and
inspect any of its properties and to examine and make excerpts from its books
and records and discuss its business affairs, finances and accounts with its
officers, all in such detail and at such times during normal business hours and
as often as any of the Lenders may reasonably request, provided that each Lender
shall provide the Borrower and the Administrative Agent with reasonable notice
prior to any visit or inspection. In the event any Lender desires to conduct an
audit of any Loan Party, such Lender shall make a reasonable effort to conduct
such audit contemporaneously with any audit to be performed by the
Administrative Agent.

8.1.6 Keeping of Records and Books of Account. The Borrower shall, and shall
cause each Subsidiary of the Borrower to, maintain and keep proper books of
record and account which enable the Borrower and its Subsidiaries to issue
financial statements in accordance with GAAP and as otherwise required by
applicable Laws of any Official Body having jurisdiction over the Borrower or
any Subsidiary of the Borrower, and in which full, true and correct entries
shall be made in all material respects of all its dealings and business and
financial affairs.

8.1.7 Compliance with Laws; Use of Proceeds. Each Loan Party shall, and shall
cause each of its Subsidiaries to, comply with all applicable Laws, including
all Environmental Laws, in all respects; provided that it shall not be deemed to
be a violation of this Section 8.1.7 if any failure to comply with any Law would
not result in fines, penalties, remediation costs, other similar liabilities or
injunctive relief which in the aggregate could reasonably be expected to
constitute a Material Adverse Change. The Loan Parties will use the Letters of
Credit and the proceeds of the Loans only in accordance with Section 2.8 [Use of
Proceeds] and as permitted by applicable Law.

8.1.8 Further Assurances. Each Loan Party shall, from time to time, at its
expense, faithfully preserve and protect the Administrative Agent’s Lien on and
Prior Security Interest in the Collateral and all other real and personal
property of the Loan Parties whether now owned or hereafter acquired as a
continuing first priority perfected Lien, subject only to Permitted Liens, and
shall do such other acts and things as the Administrative Agent in its sole
discretion may deem necessary or advisable from time to time in order to
preserve, perfect and protect the Liens granted under the Loan Documents and to
exercise and enforce its rights and remedies thereunder with respect to the
Collateral.

 

56

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

8.1.9 Anti-Terrorism Laws. None of the Loan Parties is or shall be (i) a Person
with whom any Lender is restricted from doing business under Executive Order
No. 13224 or any other Anti-Terrorism Law, (ii) engaged in any business involved
in making or receiving any contribution of funds, goods or services to or for
the benefit of such a Person or in any transaction that evades or avoids, or has
the purpose of evading or avoiding, the prohibitions set forth in any
Anti-Terrorism Law, or (iii) otherwise in violation of any Anti-Terrorism Law.
The Loan Parties shall provide to the Lenders any certifications or information
that a Lender requests to confirm compliance by the Loan Parties with
Anti-Terrorism Laws.

8.1.10 Deposit and Securities Accounts. Each Loan Party shall, within 60 days of
the Closing Date, and at all times thereafter, maintain their primary demand,
time and other deposit accounts with the Agent or a Lender approved by the Agent
in order to facilitate the making of the Loans and to provide security for
repayment of the Obligations, other than accounts with aggregate deposits of
less than $5,000 per Borrower or payroll accounts (subject to the limitations
set forth in clause (b) of the next sentence). Deposits and investments in
securities accounts with financial institutions, other than as provided above,
shall at no time exceed an aggregate of $200,000, provided that, (a) one account
may be maintained in England, six accounts in China, and six accounts in Mexico,
with aggregate deposits in all such accounts to be limited to $300,000 and
(b) amounts in excess of the aggregate limits stated above may be deposited in
employee payroll accounts (whether domestic or foreign) on any particular day if
such excess is paid as compensation to employees within one day.

8.2 Negative Covenants.

8.2.1 Indebtedness. Each of the Loan Parties shall not, and shall not permit any
of its Subsidiaries to, at any time create, incur, assume or suffer to exist any
Indebtedness, except:

(i) Indebtedness under the Loan Documents;

(ii) Existing Indebtedness as set forth on Schedule 8.2.1 (including any
extensions or renewals thereof; provided there is no increase in the amount
thereof or other significant change in the terms thereof unless otherwise
specified on Schedule 8.2.1);

(iii) Indebtedness incurred with respect to Purchase Money Security Interests
and capitalized leases as and to the extent permitted under Section 8.2.14
[Capital Expenditures and Leases];

(iv) Indebtedness of a Loan Party to another Loan Party which is subordinated
pursuant to the Intercompany Subordination Agreement;

(v) Any (i) Lender Provided Interest Rate Hedge, (ii) other Interest Rate Hedge
approved by the Administrative Agent or (iii) Indebtedness under any Other
Lender Provided Financial Services Product; provided however, the Loan Parties
and their Subsidiaries shall enter into a Lender Provided Interest Rate Hedge or
another Interest Rate Hedge only for hedging (rather than speculative) purposes;

 

57

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

(vi) Any guarantees permitted pursuant to Section 8.2.3; and

(vii) Other unsecured Indebtedness not described in clauses (i) through
(vi) above in an aggregate amount not to exceed Two Million Five Hundred
Thousand Dollars ($2,500,000).

8.2.2 Liens; Lien Covenants. Each of the Loan Parties shall not, and shall not
permit any of its Subsidiaries to, at any time create, incur, assume or suffer
to exist any Lien on any of its property or assets, tangible or intangible, now
owned or hereafter acquired, or agree or become liable to do so, except
Permitted Liens.

8.2.3 Guaranties. Each of the Loan Parties shall not, and shall not permit any
of its Subsidiaries to, at any time, directly or indirectly, become or be liable
in respect of any Guaranty, or assume, guarantee, become surety for, endorse or
otherwise agree, become or remain directly or contingently liable upon or with
respect to any obligation or liability of any other Person, except for
Guaranties of Indebtedness or other obligations of the Loan Parties permitted
hereunder. Any Loan Party may guarantee the obligations of another Loan Party,
provided that such other Loan Party is permitted to take such action or incur
such obligations under this Agreement.

8.2.4 Loans and Investments. Each of the Loan Parties shall not, and shall not
permit any of its Subsidiaries to, at any time make or suffer to remain
outstanding any loan or advance to, or purchase, acquire or own any stock,
bonds, notes or securities of, or any partnership interest (whether general or
limited) or limited liability company interest in, or any other investment or
interest in, or make any capital contribution to, any other Person, or agree,
become or remain liable to do any of the foregoing, except:

(i) Maintain existing investments in other Loan Parties;

(ii) trade credit extended on usual and customary terms in the ordinary course
of business;

(iii) Permitted Investments;

(iv) Loans, advances and investments in other Loan Parties;

(v) so long as no Event of Default shall have occurred and be continuing, make
investments in securities of trade creditors, customers or any debtor of any
Borrower or any of its Subsidiaries received in compromise of obligations
incurred in the ordinary course of business, including pursuant to any plan of
reorganization or similar arrangement upon the bankruptcy or insolvency of such
trade creditors, customers or debtors and any Investments received in
satisfaction of judgments;

 

58

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

(vi) so long as no Event of Default shall have occurred and be continuing, make
loans or advances to employees, directors, officers or consultants of any
Borrower or any of its Subsidiaries of the types consistent with past practice
in an aggregate amount at any time outstanding not to exceed Five Hundred
Thousand Dollars ($500,000); and

(vii) so long as no Event of Default shall have occurred and be continuing,
Parent Borrower may repurchase, redeem or otherwise retire or acquire equity or
other ownership interests of Parent Borrower from its employees or directors (or
their heirs or estates) or employees or directors (or their heirs or estates) of
Parent Borrower or other Loan Parties, in each case, pursuant to the terms of
any employment agreement, severance agreement, employee stock option agreement
or similar agreement in accordance with the provisions of any such arrangement
as in effect on the date hereof, in an aggregate amount pursuant to this clause
(viii) to all such employees or directors (or their heirs or estates) not to
exceed $500,000 per fiscal year.

8.2.5 Dividends and Related Distributions. Each of the Loan Parties shall not,
and shall not permit any of its Subsidiaries to, make or pay, or agree to become
or remain liable to make or pay, any dividend or other distribution of any
nature (whether in cash, property, securities or otherwise) on account of or in
respect of its shares of capital stock, partnership interests or limited
liability company interests on account of the purchase, redemption, retirement
or acquisition of its shares of capital stock (or warrants, options or rights
therefor), partnership interests or limited liability company interests at any
time when an Event of Default has occurred and is continuing or would occur as a
result of the making of such dividend or distribution.

8.2.6 Liquidations, Mergers, Consolidations, Acquisitions. Each of the Loan
Parties shall not, and shall not permit any of its Subsidiaries to, dissolve,
liquidate or wind-up its affairs, or become a party to any merger or
consolidation, or acquire by purchase, lease or otherwise all or substantially
all of the assets or capital stock of any other Person; provided that (i) any
Loan Party, other than the Parent Borrower, may consolidate or merge into
another Loan Party which is wholly-owned by one or more of the other Loan
Parties, so long as any consolidation and/or merger involving any Borrower
results in the Borrower entity being the surviving entity, (ii) the Borrower may
consummate a Permitted Acquisition and (iii) the liquidation and dissolution of
a non-operating Subsidiary or a Subsidiary having book assets not in excess of
$100,000.

8.2.7 Dispositions of Assets or Subsidiaries. Each of the Loan Parties shall
not, and shall not permit any of its Subsidiaries to, sell, convey, assign,
lease, abandon or otherwise transfer or dispose of, voluntarily or
involuntarily, any of its properties or assets, tangible or intangible
(including sale, assignment, discount or other disposition of accounts, contract
rights, chattel paper, equipment or general intangibles with or without recourse
or of capital stock, shares of beneficial interest, partnership interests or
limited liability company interests of a Subsidiary of such Loan Party), except:

(i) transactions involving the sale or other disposition of inventory in the
ordinary course of business;

(ii) any sale, transfer, lease or other disposition of assets in the ordinary
course of business which are no longer necessary or required in the conduct of
such Loan Party’s or such Subsidiary’s business;

 

59

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

(iii) any sale, transfer or lease of assets by any Loan Party to another Loan
Party;

(iv) any sale, transfer or lease of assets in the ordinary course of business
which are replaced by substitute assets acquired or leased within the parameters
of Section 8.2.14 [Capital Expenditures and Leases]; provided such substitute
assets are subject to the Lenders’ Prior Security Interest;

(v) upon twenty (20) days prior written notice to Agent, any sale, transfer,
lease or other disposition of assets, a division, operations or business to a
third party in a commercially reasonable arms-length transaction, whether as a
sale of assets or equity of one or more Loan Parties, so long as the total value
of the assets sold and/or transferred in conjunction with a sale of equity
interests, pursuant to this provision in the aggregate does not exceed
$20,000,000 during the term of this Agreement and so long as the after-tax
proceeds (as reasonably estimated by the Borrower) are applied as a mandatory
prepayment of the Revolving Credit Loans (if any) and a permanent reduction on a
dollar-for-dollar basis to the Revolving Credit Commitment in accordance with
the provisions of Section 5.7.1 [Sale of Assets] above; or

(vi) any sale, transfer or lease of assets, other than those specifically
excepted pursuant to clauses (i) through (v) above, which is approved by the
Required Lenders or the disposition of property subject to governmental
condemnation, so long as the after-tax proceeds (as reasonably estimated by the
Borrower) are applied as a mandatory prepayment of the Revolving Credit Loans
(if any) and a permanent reduction on a dollar-for-dollar basis to the Revolving
Credit Commitment in accordance with the provisions of Section 5.7.1 [Sale of
Assets] above.

8.2.8 Affiliate Transactions. Each of the Loan Parties shall not, and shall not
permit any of its Subsidiaries to, enter into or carry out any transaction with
any Affiliate of any Loan Party (including purchasing property or services from
or selling property or services to any Affiliate of any Loan Party or other
Person) unless such transaction (w) is desirable or beneficial to the business
of such Loan Party, (x) is not otherwise prohibited by this Agreement, (y) is
entered into upon fair and reasonable arm’s-length terms and conditions and
(z) is in accordance with all applicable Law, including, the payment of
management, consulting or other fees for management or similar services in the
exercise of the Loan Parties’ reasonable business judgment that are:

(i) reasonable compensation for services rendered to such Loan Party or
Subsidiary for officers, employees and directors in the ordinary course of
business and that are either (A) paid directly to such officers, employees or
directors or (B) to an Affiliate of such Loan Party or Subsidiary which provides
the services of such officers, employees or directors, so long as, in the case
of this clause (i), such arrangements are upon fair and reasonable terms no less
favorable to such Loan Party or Subsidiary than such Loan Party or Subsidiary
would obtain in a comparable arm’s length transaction with an unaffiliated
person,

(ii) for actual and necessary reasonable out-of-pocket legal and accounting,
insurance, marketing, payroll and similar types of services paid for by such
Affiliate on behalf of such Loan Party or Subsidiary, in the ordinary course of
their respective businesses or as the same may be directly attributable to such
Loan Party or Subsidiary and for the payment of taxes by or on behalf of such
Affiliate, or

 

60

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

(iii) for management, transaction and related fees, or other services, not in
excess of $500,000 per year to any Affiliate, and made pursuant to the
reasonable requirements of such Loan Party’s or Subsidiary’s business (as the
case may be), which services would be required by such Loan Party or Subsidiary
to operate such Loan Party’s or Subsidiary’s business whether or not such
services were provided by an Affiliate, and upon fair and reasonable terms no
less favorable to such Loan Party or Subsidiary than such Loan Party or
Subsidiary would obtain in a comparable arm’s length transaction with an
unaffiliated person.

provided, however, the foregoing restrictions on Affiliate transactions shall
not apply to transactions exclusively among the Loan Parties. Notwithstanding
anything contained herein to the contrary, any Loan Party or Subsidiary may make
payments for an indemnity provided in the ordinary course of business on behalf
of any officers, directors, employees, shareholders or any other Affiliate of
such Loan Party or Subsidiary in connection with the transactions permitted by
Section 8.2.8(b)(iii) hereof.

8.2.9 Subsidiaries, Partnerships and Joint Ventures. Each of the Loan Parties
shall not, and shall not permit any of its Subsidiaries to own or create
directly or indirectly any Subsidiaries other than (i) any Subsidiary which has
joined this Agreement as Guarantor on the Closing Date; and (ii) any Subsidiary
formed after the Closing Date which joins this Agreement as a Guarantor by
delivering to the Administrative Agent (A) a signed Guarantor Joinder;
(B) documents in the forms described in Section 7.1 [First Loans and Letters of
Credit] modified as appropriate; and (C) documents necessary to grant and
perfect Prior Security Interests to the Administrative Agent for the benefit of
the Lenders in the equity interests of, and Collateral held by, such Subsidiary.
Each of the Loan Parties shall not become or agree to become a party to a Joint
Venture without the prior written consent of the Administrative Agent.

8.2.10 Continuation of or Change in Business. Each of the Loan Parties shall
not, and shall not permit any of its Subsidiaries to, engage in any business
other than as substantially conducted and operated by such Loan Party or
Subsidiary during the present fiscal year and such businesses as are reasonably
related thereto and accretive to such Loan Party’s business, and such Loan Party
or Subsidiary shall not permit any material change in such business.

8.2.11 Fiscal Year. The Borrower shall not, and shall not permit any Subsidiary
of the Borrower to, change its fiscal year from the twelve-month period
beginning January 1 and ending December 31.

8.2.12 Issuance of Stock. Each of the Loan Parties shall not, and shall not
permit any of its Subsidiaries to, issue any additional shares of its capital
stock or any options, warrants or other rights in respect thereof, except in
connection with, and so long as such issuance does not result in a Change of
Control hereunder, (i) compensation of employees, directors, Related Parties or
consultants and (ii) Permitted Acquisitions.

 

61

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

8.2.13 Changes in Organizational Documents. Each of the Loan Parties shall not,
and shall not permit any of its Subsidiaries to, amend in any respect its
certificate of incorporation (including any provisions or resolutions relating
to capital stock), by-laws, certificate of limited partnership, partnership
agreement, certificate of formation, limited liability company agreement or
other organizational documents without providing at least five (5) Business
Days’ prior written notice to the Administrative Agent and the Lenders and, in
the event such change would be adverse to the Lenders as determined by the
Administrative Agent in its sole discretion, obtaining the prior written consent
of the Required Lenders.

8.2.14 Capital Expenditures and Leases. Each of the Loan Parties shall not, and
shall not permit any of its Subsidiaries to, make any payments exceeding
$7,000,000 in the aggregate in any fiscal year on account of the purchase or
lease of any assets which if purchased would constitute fixed assets or which if
leased would constitute a capitalized lease.

8.2.15 Minimum Fixed Charge Coverage Ratio. The Loan Parties shall not permit
the Fixed Charge Coverage Ratio, calculated as of the end of each fiscal
quarter, commencing with the fiscal quarter ending June 30, 2012, in each case
for the four (4) fiscal quarters then ended, to be less than 1.25 to 1.0;
provided, however, the ratio required to be maintained for any three (3) fiscal
quarters, following the execution of the DOJ/EPA Agreements (which Borrower and
Administrative Agent expect to occur by December 31, 2012), may be not be less
than 1.15 to 1.0.

8.2.16 Maximum Leverage Ratio. The Loan Parties shall not at any time permit the
ratio of Indebtedness of the Borrower and its Subsidiaries, as of the most
recently ended fiscal quarter, to Consolidated EBITDA, for the most recently
ended four fiscal quarters commencing with the fiscal quarter ending June 30,
2012, to exceed 3.25 to 1.0.

8.3 Reporting Requirements. The Loan Parties will furnish or cause to be
furnished to the Administrative Agent and each of the Lenders:

8.3.1 Quarterly Financial Statements. As soon as available and in any event
within fifty (50) calendar days after the end of each of the first three fiscal
quarters in each fiscal year, financial statements of the Borrower, consisting
of a consolidated and consolidating balance sheet as of the end of such fiscal
quarter and related consolidated and consolidating statements of income,
stockholders’ equity and cash flows for the fiscal quarter then ended and the
fiscal year through that date, all in reasonable detail and certified (subject
to normal year-end audit adjustments) by the Chief Executive Officer, President
or Chief Financial Officer of the Borrower as having been prepared in accordance
with GAAP, consistently applied, and setting forth in comparative form the
respective financial statements for the corresponding date and period in the
previous fiscal year.

 

62

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

8.3.2 Annual Financial Statements. As soon as available and in any event within
one-hundred twenty (120) days after the end of each fiscal year of the Borrower,
financial statements of the Borrower consisting of a consolidated and
consolidating balance sheet as of the end of such fiscal year, and related
consolidated and consolidating statements of income, stockholders’ equity and
cash flows for the fiscal year then ended, all in reasonable detail and setting
forth in comparative form the financial statements as of the end of and for the
preceding fiscal year, and certified by independent certified public accountants
of nationally recognized standing satisfactory to the Administrative Agent. The
certificate or report of accountants shall be free of qualifications (other than
any consistency qualification that may result from a change in the method used
to prepare the financial statements as to which such accountants concur) and
shall not indicate the occurrence or existence of any event, condition or
contingency which would materially impair the prospect of payment or performance
of any covenant, agreement or duty of any Loan Party under any of the Loan
Documents. The Loan Parties shall deliver with such financial statements and
certification by their accountants, if available, a letter of such accountants
to the Administrative Agent and the Lenders substantially to the effect that,
based upon their ordinary and customary examination of the affairs of the
Borrower, performed in connection with the preparation of such consolidated
financial statements, and in accordance with GAAP, they are not aware of the
existence of any condition or event which constitutes an Event of Default or
Potential Default or, if they are aware of such condition or event, stating the
nature thereof.

8.3.3 Certificate of the Borrower. Concurrently with the financial statements of
the Borrower furnished to the Administrative Agent and to the Lenders pursuant
to Sections 8.3.1 [Quarterly Financial Statements] and 8.3.2 [Annual Financial
Statements], a certificate (each a “Compliance Certificate”) of the Borrower
signed by the Chief Executive Officer, President or Chief Financial Officer of
the Borrower, in the form of Exhibit 8.3.3.

8.3.4 Notices.

8.3.4.1 Default. Promptly after any officer of any Loan Party has learned of the
occurrence of an Event of Default or Potential Default, a certificate signed by
an Authorized Officer setting forth the details of such Event of Default or
Potential Default and the action which such Loan Party proposes to take with
respect thereto.

8.3.4.2 Litigation. Promptly after the commencement thereof, notice of all
actions, suits, proceedings or investigations before or by any Official Body or
any other Person against any Loan Party or Subsidiary of any Loan Party which
relate to the Collateral, involve a claim or series of claims in excess of
$250,000 or which if adversely determined could reasonably be expected to
constitute a Material Adverse Change.

8.3.4.3 Organizational Documents. Within the time limits set forth in
Section 8.2.13 [Changes in Organizational Documents], any amendment to the
organizational documents of any Loan Party.

8.3.4.4 Erroneous Financial Information. Promptly following the conclusion by
the Borrower or its accountants that any previously issued financial statement,
audit report or interim review should no longer be relied upon or that
disclosure should be made or action should be taken to prevent future reliance.

8.3.4.5 ERISA Event. Immediately upon the occurrence of any ERISA Event.

8.3.4.6 Other Reports. Promptly upon their becoming available to the Borrower:

 

63

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

(i) Annual Budget. The annual budget and any forecasts or projections of the
Borrower, to be supplied upon request by Administrative Agent;

(ii) Management Letters. Any reports including management letters submitted to
the Borrower by independent accountants in connection with any annual, interim
or special audit;

(iii) SEC Reports; Shareholder Communications. Reports, including Forms 10-K,
10-Q and 8-K, registration statements and prospectuses and other shareholder
communications, filed by the Borrower with the Securities and Exchange
Commission, to be provided upon request by the Administrative Agent unless
available on the Securities and Exchange Commission’s EDGAR website; and

(iv) Other Information. Such other reports and information as any of the Lenders
may from time to time reasonably request.

9. DEFAULT

9.1 Events of Default. An Event of Default shall mean the occurrence or
existence of any one or more of the following events or conditions (whatever the
reason therefor and whether voluntary, involuntary or effected by operation of
Law):

9.1.1 Payments Under Loan Documents. The Borrower shall fail to pay any
principal of any Loan (including scheduled installments, mandatory prepayments
or the payment due at maturity), Reimbursement Obligation or Letter of Credit or
Obligation on any Loan, Reimbursement Obligation or Letter of Credit Obligation
or any other amount owing hereunder or under the other Loan Documents on the
date on which such principal becomes due in accordance with the terms hereof or
thereof. The Borrower shall fail to pay any interest on any Loan, Reimbursement
Obligation or Letter of Credit Obligation or any other amount owing hereunder or
under the other Loan Documents on the date on which such interest or other
amount becomes due in accordance with the terms hereof or thereof and such
amount shall remain unpaid for a period of three (3) Business Days;

9.1.2 Breach of Warranty. Any representation or warranty made at any time by any
of the Loan Parties herein or by any of the Loan Parties in any other Loan
Document, or in any certificate, other instrument or statement furnished
pursuant to the provisions hereof or thereof, shall prove to have been false or
misleading in any material respect as of the time it was made or furnished;

9.1.3 Breach of Negative Covenants or Visitation Rights. Any of the Loan Parties
shall default in the observance or performance of any covenant contained in
Section 8.1.5 [Visitation Rights] or Section 8.2 [Negative Covenants];

9.1.4 Breach of Other Covenants. Any of the Loan Parties shall default in the
observance or performance of any other covenant, condition or provision hereof
or of any other Loan Document and such default shall continue unremedied for a
period of ten (10) Business Days;

 

64

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

9.1.5 Defaults in Other Agreements or Indebtedness. A default or event of
default shall occur at any time under the terms of any other agreement involving
borrowed money or the extension of credit or any other Indebtedness under which
any Loan Party or Subsidiary of any Loan Party may be obligated as a borrower or
guarantor in excess of $250,000 in the aggregate, and such breach, 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;

9.1.6 Final Judgments or Orders. Except as set forth in Schedule 9.1.6, any
final judgments or orders for the payment of money in excess of $1,000,000 in
the aggregate and not covered by insurance in amounts and subject to policies
acceptable to Administrative Agent in its reasonable discretion shall be entered
against any Loan Party by a court having jurisdiction in the premises, which
judgment is not discharged, vacated, bonded or stayed pending appeal within a
period of thirty (30) days from the date of entry;

9.1.7 Loan Document Unenforceable. Any of the Loan Documents shall cease to be
legal, valid and binding agreements enforceable against the party executing the
same or such party’s successors and assigns (as permitted under the Loan
Documents) in accordance with the respective terms thereof or shall in any way
be terminated (except in accordance with its terms) or become or be declared
ineffective or inoperative or shall in any way be challenged or contested or
cease to give or provide the respective Liens, security interests, rights,
titles, interests, remedies, powers or privileges intended to be created
thereby;

9.1.8 Uninsured Losses; Proceedings Against Assets. There shall occur any
material uninsured damage to or loss, theft or destruction of any of the
Collateral in excess of $500,000 or the Collateral or any other of the Loan
Parties’ or any of their Subsidiaries’ assets are attached, seized, levied upon
or subjected to a writ or distress warrant; or such come within the possession
of any receiver, trustee, custodian or assignee for the benefit of creditors and
the same is not cured within thirty (30) days thereafter;

9.1.9 Events Relating to Plans and Benefit Arrangements. (i) An ERISA Event
occurs with respect to a Pension Plan or Multiemployer Plan which has resulted
or could reasonably be expected to result in liability of Borrower under Title
IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate
amount in excess of $1,000,000, or (ii) Borrower or any ERISA Affiliate fails to
pay when due, after the expiration of any applicable grace period, any
installment payment with respect to its withdrawal liability under Section 4201
of ERISA under a Multiemployer Plan in an aggregate amount in excess of
$1,000,000;

 

65

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

9.1.10 Change of Control. Any person or group of persons (within the meaning of
Sections 13(d) or 14(a) of the Securities Exchange Act of 1934, as amended),
other than Steel Partners Holdings L.P. and its Affiliates, and GAMCO Investors,
Inc. and its Affiliates, shall have acquired beneficial ownership (within the
meaning of Rule 13d-3 promulgated by the Securities and Exchange Commission
under said Act) of a percentage (based on voting power, in the event different
classes of stock shall have different voting powers) of the voting stock of
Parent Borrower equal to at least forty percent (40%); or (ii) within a period
of twelve (12) consecutive calendar months, individuals who were directors of
the Parent Borrower on the first day of such period shall cease to constitute a
majority of the board of directors of the Parent Borrower without the approval
of such individuals who were directors of the Parent Borrower on the first day
of such period.

9.1.11 Relief Proceedings. (i) A Relief Proceeding shall have been instituted
against any Loan Party or Subsidiary of a Loan Party and such Relief Proceeding
shall remain undismissed or unstayed and in effect for a period of thirty
(30) consecutive days or such court shall enter a decree or order granting any
of the relief sought in such Relief Proceeding, (ii) any Loan Party or
Subsidiary of a Loan Party institutes, or takes any action in furtherance of, a
Relief Proceeding, or (iii) any Loan Party or any Subsidiary of a Loan Party
ceases to be solvent or admits in writing its inability to pay its debts as they
mature.

9.2 Consequences of Event of Default.

9.2.1 Events of Default Other Than Bankruptcy, Insolvency or Reorganization
Proceedings. If an Event of Default specified under Sections 9.1.1 through
9.1.10 shall occur and be continuing, the Lenders and the Administrative Agent
shall be under no further obligation to make Loans and the Issuing Lender shall
be under no obligation to issue Letters of Credit and the Administrative Agent
may, and upon the request of the Required Lenders, shall (i) by written notice
to the Borrower, declare the unpaid principal amount of the Notes then
outstanding and all interest accrued thereon, any unpaid fees and all other
Indebtedness of the Borrower to the Lenders hereunder and thereunder to be
forthwith due and payable, and the same shall thereupon become and be
immediately due and payable to the Administrative Agent for the benefit of each
Lender without presentment, demand, protest or any other notice of any kind, all
of which are hereby expressly waived, and (ii) require the Borrower to, and the
Borrower shall thereupon, deposit in a non-interest-bearing account with the
Administrative Agent, as cash collateral for its Obligations under the Loan
Documents, an amount equal to the maximum amount currently or at any time
thereafter available to be drawn on all outstanding Letters of Credit, and the
Borrower hereby pledges to the Administrative Agent and the Lenders, and grants
to the Administrative Agent and the Lenders a security interest in, all such
cash as security for such Obligations; and

9.2.2 Bankruptcy, Insolvency or Reorganization Proceedings. If an Event of
Default specified under Section 9.1.11 [Relief Proceedings] shall occur, the
Lenders shall be under no further obligations to make Loans hereunder and the
Issuing Lender shall be under no obligation to issue Letters of Credit and the
unpaid principal amount of the Loans then outstanding and all interest accrued
thereon, any unpaid fees and all other Obligations of the Borrower to the
Lenders hereunder and thereunder shall be immediately due and payable, without
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived; and

 

66

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

9.2.3 Set-off. If an Event of Default shall have occurred and be continuing,
each Lender, the Issuing Lender, and each of their respective Affiliates and any
participant of such Lender or Affiliate which has agreed in writing to be bound
by the provisions of Section 5.3 [Sharing of Payments by Lenders] is hereby
authorized at any time and from time to time, to the fullest extent permitted by
applicable Law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final, in whatever currency) at any time held and
other obligations (in whatever currency) at any time owing by such Lender, the
Issuing Lender or any such Affiliate or participant to or for the credit or the
account of any Loan Party against any and all of the Obligations of such Loan
Party now or hereafter existing under this Agreement or any other Loan Document
to such Lender, the Issuing Lender, Affiliate or participant, irrespective of
whether or not such Lender, Issuing Lender, Affiliate or participant shall have
made any demand under this Agreement or any other Loan Document and although
such Obligations of the Borrower or such Loan Party may be contingent or
unmatured or are owed to a branch or office of such Lender or the Issuing Lender
different from the branch or office holding such deposit or obligated on such
Indebtedness. The rights of each Lender, the Issuing Lender and their respective
Affiliates and participants under this Section are in addition to other rights
and remedies (including other rights of setoff) that such Lender, the Issuing
Lender or their respective Affiliates and participants may have. Each Lender and
the Issuing Lender agrees to notify the Borrower and the Administrative Agent
promptly after any such setoff and application; provided that the failure to
give such notice shall not affect the validity of such setoff and application;
and

9.2.4 Application of Proceeds. From and after the date on which the
Administrative Agent has taken any action pursuant to this Section 9.2 and until
all Obligations of the Loan Parties have been paid in full, any and all proceeds
received by the Administrative Agent from any sale or other disposition of the
Collateral, or any part thereof, or the exercise of any other remedy by the
Administrative Agent, shall be applied as follows:

(i) first, to reimburse the Administrative Agent and the Lenders for
out-of-pocket costs, expenses and disbursements, including reasonable attorneys’
and paralegals’ fees and legal expenses, incurred by the Administrative Agent or
the Lenders in connection with realizing on the Collateral or collection of any
Obligations of any of the Loan Parties under any of the Loan Documents,
including advances made by the Lenders or any one of them or the Administrative
Agent for the reasonable maintenance, preservation, protection or enforcement
of, or realization upon, the Collateral, including advances for taxes,
insurance, repairs and the like and reasonable expenses incurred to sell or
otherwise realize on, or prepare for sale or other realization on, any of the
Collateral;

(ii) second, to the repayment of all Obligations then due and unpaid of the Loan
Parties to the Lenders or their Affiliates incurred under this Agreement or any
of the other Loan Documents or agreements evidencing any Lender Provided
Interest Rate Hedge or Other Lender Provided Financial Services Obligations,
whether of principal, interest, fees, expenses or otherwise and to cash
collateralize the Letter of Credit Obligations, in such manner as the
Administrative Agent may determine in its discretion; and

(iii) the balance, if any, as required by Law.

 

67

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

10. THE ADMINISTRATIVE AGENT

10.1 Appointment and Authority. Each of the Lenders and the Issuing Lender
hereby irrevocably appoints PNC to act on its behalf as the Administrative Agent
hereunder and under the other Loan Documents and authorizes the Administrative
Agent to take such actions on its behalf and to exercise such powers as are
delegated to the Administrative Agent by the terms

hereof or thereof, together with such actions and powers as are reasonably
incidental thereto. The provisions of this Section 10 are solely for the benefit
of the Administrative Agent, the Lenders and the Issuing Lender, and neither the
Borrower nor any other Loan Party shall have rights as a third party beneficiary
of any of such provisions.

10.2 Rights as a Lender. The Person serving as the Administrative Agent
hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as though it were not the
Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise
expressly indicated or unless the context otherwise requires, include the Person
serving as the Administrative Agent hereunder in its individual capacity. Such
Person and its Affiliates may accept deposits from, lend money to, act as the
financial advisor or in any other advisory capacity for and generally engage in
any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if such Person were not the Administrative Agent hereunder and
without any duty to account therefor to the Lenders.

10.3 Exculpatory Provisions. The Administrative Agent shall not have any duties
or obligations except those expressly set forth herein and in the other Loan
Documents. Without limiting the generality of the foregoing, the Administrative
Agent:

(a) shall not be subject to any fiduciary or other implied duties, regardless of
whether a Potential Default or Event of Default has occurred and is continuing;

(b) shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that the Administrative Agent
is required to exercise as directed in writing by the Required Lenders (or such
other number or percentage of the Lenders as shall be expressly provided for
herein or in the other Loan Documents); provided that the Administrative Agent
shall not be required to take any action that, in its opinion or the opinion of
its counsel, may expose the Administrative Agent to liability or that is
contrary to any Loan Document or applicable Law; and

(c) shall not, except as expressly set forth herein and in the other Loan
Documents, have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to the Borrower or any of its Affiliates that
is communicated to or obtained by the Person serving as the Administrative Agent
or any of its Affiliates in any capacity.

The Administrative Agent shall not be liable for any action taken or not taken
by it (i) with the consent or at the request of the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Sections 11.1 [Modifications, Amendments or
Waivers] and 9.2 [Consequences of Event of Default]) or (ii) in the absence of
its own gross negligence or willful misconduct. The Administrative Agent shall
be deemed not to have knowledge of any Potential Default or Event of Default
unless and until notice describing such Potential Default or Event of Default is
given to the Administrative Agent by the Borrower, a Lender or the Issuing
Lender.

 

68

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

The Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Potential Default or Event of
Default, (iv) the validity, enforceability, effectiveness or genuineness of this
Agreement, any other Loan Document or any other agreement, instrument or
document or (v) the satisfaction of any condition set forth in Section 7
[Conditions of Lending and Issuance of Letters of Credit] or elsewhere herein,
other than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.

10.4 Reliance by Administrative Agent. The Administrative Agent shall be
entitled to rely upon, and shall not incur any liability for relying upon, any
notice, request, certificate, consent, statement, instrument, document or other
writing (including any electronic message, Internet or intranet website posting
or other distribution) believed by it to be genuine and to have been signed,
sent or otherwise authenticated by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to have been made by the proper Person, and shall not incur any liability
for relying thereon. In determining compliance with any condition hereunder to
the making of a Loan, or the issuance of a Letter of Credit, that by its terms
must be fulfilled to the satisfaction of a Lender or the Issuing Lender, the
Administrative Agent may presume that such condition is satisfactory to such
Lender or the Issuing Lender unless the Administrative Agent shall have received
notice to the contrary from such Lender or the Issuing Lender prior to the
making of such Loan or the issuance of such Letter of Credit. The Administrative
Agent may consult with legal counsel (who may be counsel for the Borrower),
independent accountants and other experts selected by it, and shall not be
liable for any action taken or not taken by it in accordance with the advice of
any such counsel, accountants or experts.

10.5 Delegation of Duties. The Administrative Agent may perform any and all of
its duties and exercise its rights and powers hereunder or under any other Loan
Document by or through any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-agent may
perform any and all of its duties and exercise its rights and powers by or
through their respective Related Parties. The exculpatory provisions of this
Section 10 shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.

 

69

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

10.6 Resignation of Administrative Agent. The Administrative Agent may at any
time give notice of its resignation to the Lenders, the Issuing Lender and the
Borrower. Upon receipt of any such notice of resignation, the Required Lenders
shall have the right, with approval from the Borrower (so long as no Event of
Default has occurred and is continuing), to appoint a successor, such approval
not to be unreasonably withheld or delayed. If no such successor shall have been
so appointed by the Required Lenders and shall have accepted such appointment
within thirty (30) days after the retiring Administrative Agent gives notice of
its resignation, then the retiring Administrative Agent may on behalf of the
Lenders and the Issuing Lender, appoint a

successor Administrative Agent; provided that if the Administrative Agent shall
notify the Borrower and the Lenders that no qualifying Person has accepted such
appointment, then such resignation shall nonetheless become effective in
accordance with such notice and (i) the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder and under the other Loan
Documents (except that in the case of any collateral security held by the
Administrative Agent on behalf of the Lenders or the Issuing Lender under any of
the Loan Documents, the retiring Administrative Agent shall continue to hold
such collateral security until such time as a successor Administrative Agent is
appointed) and (ii) all payments, communications and determinations provided to
be made by, to or through the Administrative Agent shall instead be made by or
to each Lender and the Issuing Lender directly, until such time as the Required
Lenders appoint a successor Administrative Agent as provided for above in this
Section 10.6. Upon the acceptance of a successor’s appointment as Administrative
Agent hereunder, such successor shall succeed to and become vested with all of
the rights, powers, privileges and duties of the retiring (or retired)
Administrative Agent, and the retiring Administrative Agent shall be discharged
from all of its duties and obligations hereunder or under the other Loan
Documents (if not already discharged therefrom as provided above in this
Section). The fees payable by the Borrower to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor. After the retiring Administrative
Agent’s resignation hereunder and under the other Loan Documents, the provisions
of this Section 10 and Section 11.3 [Expenses; Indemnity; Damage Waiver] shall
continue in effect for the benefit of such retiring Administrative Agent, its
sub-agents and their respective Related Parties in respect of any actions taken
or omitted to be taken by any of them while the retiring Administrative Agent
was acting as Administrative Agent.

If PNC resigns as Administrative Agent under this Section 10.6, PNC shall also
resign as an Issuing Lender. Upon the appointment of a successor Administrative
Agent hereunder, such successor shall (i) succeed to all of the rights, powers,
privileges and duties of PNC as the retiring Issuing Lender and Administrative
Agent and PNC shall be discharged from all of its respective duties and
obligations as Issuing Lender and Administrative Agent under the Loan Documents,
and (ii) issue letters of credit in substitution for the Letters of Credit
issued by PNC, if any, outstanding at the time of such succession or make other
arrangement satisfactory to PNC to effectively assume the obligations of PNC
with respect to such Letters of Credit.

10.7 Non-Reliance on Administrative Agent and Other Lenders. Each Lender and the
Issuing Lender acknowledges that it has, independently and without reliance upon
the Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender and
the Issuing Lender also acknowledges that it will, independently and without
reliance upon the Administrative Agent or any other Lender or any of their
Related Parties and based on such documents and information as it shall from
time to time deem appropriate, continue to make its own decisions in taking or
not taking action under or based upon this Agreement, any other Loan Document or
any related agreement or any document furnished hereunder or thereunder.

10.8 Reserved.

 

70

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

10.9 Reserved.

10.10 Authorization to Release Collateral and Guarantors. The Lenders and
Issuing Lenders authorize the Administrative Agent to release (i) any Collateral
consisting of assets or equity interests sold or otherwise disposed of in a sale
or other disposition or transfer permitted under Section 8.2.7 [Disposition of
Assets or Subsidiaries] or 8.2.6 [Liquidations, Mergers, Consolidations,
Acquisitions], and (ii) any Guarantor from its obligations under the Guaranty
Agreement if the ownership interests in such Guarantor are sold or otherwise
disposed of or transferred to persons other than Loan Parties or Subsidiaries of
the Loan Parties in a transaction permitted under Section 8.2.7 [Disposition of
Assets or Subsidiaries] or 8.2.6 [Liquidations, Mergers, Consolidations,
Acquisitions].

10.11 No Reliance on Administrative 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 the Administrative 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 of
the Loan Parties, their Affiliates or their agents, the Loan Documents or the
transactions hereunder or contemplated hereby: (i) any identity verification
procedures, (ii) any recordkeeping, (iii) comparisons with government lists,
(iv) customer notices or (v) other procedures required under the CIP Regulations
or such other Laws.

11. MISCELLANEOUS

11.1 Modifications, Amendments or Waivers. With the written consent of the
Required Lenders, the Administrative Agent, acting on behalf of all the Lenders,
and the Borrower, on behalf of the Loan Parties, may from time to time enter
into written agreements amending or changing any provision of this Agreement or
any other Loan Document or the rights of the Lenders or the Loan Parties
hereunder or thereunder, or may grant written waivers or consents hereunder or
thereunder. Any such agreement, waiver or consent made with such written consent
shall be effective to bind all the Lenders and the Loan Parties; provided, that
no such agreement, waiver or consent may be made which will:

11.1.1 Increase of Commitment. Increase the amount of the Revolving Credit
Commitment of any Lender hereunder without the consent of such Lender;

11.1.2 Extension of Payment; Reduction of Principal Interest or Fees;
Modification of Terms of Payment. Whether or not any Loans are outstanding,
extend the Expiration Date or the time for payment of principal or interest of
any Loan (excluding the due date of any mandatory prepayment of a Loan), the
Commitment Fee or any other fee payable to any Lender, or reduce the principal
amount of or the rate of interest borne by any Loan or reduce the Commitment Fee
or any other fee payable to any Lender, without the consent of each Lender
directly affected thereby;

 

71

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

11.1.3 Release of Collateral or Guarantor. Except for sales of assets permitted
by Section 8.2.7 [Disposition of Assets or Subsidiaries], release all or
substantially all of the Collateral or any Guarantor from its Obligations under
the Guaranty Agreement without the consent of all Lenders (other than Defaulting
Lenders); or

11.1.4 Miscellaneous. Amend Section 5.2 [Pro Rata Treatment of Lenders], 10.3
[Exculpatory Provisions] or 5.3 [Sharing of Payments by Lenders] or this
Section 11.1, alter any provision regarding the pro rata treatment of the
Lenders or requiring all Lenders to authorize the taking of any action or reduce
any percentage specified in the definition of Required Lenders, in each case
without the consent of all of the Lenders (other than Defaulting Lenders);

provided that no agreement, waiver or consent which would modify the interests,
rights or obligations of the Administrative Agent or the Issuing Lender may be
made without the written consent of such Administrative Agent or Issuing Lender,
as applicable, and provided, further that, if in connection with any proposed
waiver, amendment or modification referred to in Sections 11.1.1 through 11.1.4
above, the consent of the Required Lenders is obtained but the consent of one or
more of such other Lenders whose consent is required is not obtained (each a
“Non-Consenting Lender”), then the Borrower shall have the right to replace any
such Non-Consenting Lender with one or more replacement Lenders pursuant to
Section 5.6.2 [Replacement of a Lender].

11.2 No Implied Waivers; Cumulative Remedies. No course of dealing and no delay
or failure of the Administrative Agent or any Lender in exercising any right,
power, remedy or privilege under this Agreement or any other Loan Document shall
affect any other or future exercise thereof or operate as a waiver thereof, nor
shall any single or partial exercise thereof preclude any further exercise
thereof or of any other right, power, remedy or privilege. The rights and
remedies of the Administrative Agent and the Lenders under this Agreement and
any other Loan Documents are cumulative and not exclusive of any rights or
remedies which they would otherwise have.

11.3 Expenses; Indemnity; Damage Waiver.

11.3.1 Costs and Expenses. The Borrower shall pay (i) all out-of-pocket expenses
incurred by the Administrative Agent and its Affiliates (including the
reasonable fees, charges and disbursements of counsel for the Administrative
Agent), and shall pay all reasonable fees and time charges and disbursements for
attorneys who may be employees of the Administrative Agent, in connection with
the syndication of the credit facilities provided for herein, the preparation,
negotiation, execution, delivery and administration of this Agreement and the
other Loan Documents or any amendments, modifications or waivers of the
provisions hereof or thereof (whether or not the transactions contemplated
hereby or thereby shall be consummated), (ii) all out-of-pocket expenses
incurred by the Issuing Lender in connection with the issuance, amendment,
renewal or extension of any Letter of Credit or any demand for payment
thereunder, (iii) all out-of-pocket expenses incurred by the Administrative
Agent, any Lender or the Issuing Lender (including the reasonable fees, charges
and disbursements of any counsel for the Administrative Agent, any Lender or the
Issuing Lender), and shall pay all fees and time charges for attorneys who may
be employees of the Administrative Agent, any Lender or the Issuing Lender, in
connection with the enforcement or protection of its rights (A) in connection
with this Agreement and the other Loan Documents, including its rights under
this Section, or (B) in connection with the Loans made or Letters of Credit
issued hereunder, including all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans or Letters of
Credit, and (iv) all reasonable out-of-pocket expenses of the Administrative
Agent’s regular employees and agents engaged periodically to perform audits of
the Loan Parties’ books, records and business properties.

 

72

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

11.3.2 Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent (and any sub-agent thereof), each Lender and the Issuing
Lender, and each Related Party of any of the foregoing Persons (each such Person
being called an “Indemnitee”) against, and hold each Indemnitee harmless from,
any and all losses, claims, damages, liabilities and related expenses (including
the reasonable fees, charges and disbursements of any counsel for any
Indemnitee), and shall indemnify and hold harmless each Indemnitee from all
reasonable fees and time charges and disbursements for attorneys who may be
employees of any Indemnitee, incurred by any Indemnitee or asserted against any
Indemnitee by any third party or by the Borrower or any other Loan Party arising
out of, in connection with, or as a result of (i) the execution or delivery of
this Agreement, any other Loan Document or any agreement or instrument
contemplated hereby or thereby, the performance or nonperformance by the parties
hereto of their respective obligations hereunder or thereunder or the
consummation of the transactions contemplated hereby or thereby, (ii) any Loan
or Letter of Credit or the use or proposed use of the proceeds therefrom
(including any refusal by the Issuing Lender to honor a demand for payment under
a Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit), (iii) breach of
representations, warranties or covenants of the Borrower under the Loan
Documents, or (iv) any actual or prospective claim, litigation, investigation or
proceeding relating to any of the foregoing, including any such items or losses
relating to or arising under Environmental Laws or pertaining to environmental
matters, whether based on contract, tort or any other theory, whether brought by
a third party or by the Borrower or any other Loan Party, and regardless of
whether any Indemnitee is a party thereto; provided that such indemnity shall
not, as to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses (x) are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence or willful misconduct of such Indemnitee or (y) result from
a claim brought by the Borrower or any other Loan Party against an Indemnitee
for breach in bad faith of such Indemnitee’s obligations hereunder or under any
other Loan Document, if the Borrower or such Loan Party has obtained a final and
nonappealable judgment in its favor on such claim as determined by a court of
competent jurisdiction. This Section 11.3.2 [Indemnification by the Borrower]
shall not apply with respect to Taxes other than any Taxes that represent
losses, claims, damages, etc. arising from any non-Tax claim.

11.3.3 Reimbursement by Lenders. To the extent that the Borrower for any reason
fails to indefeasibly pay any amount required under Sections 11.3.1 [Costs and
Expenses] or 11.3.2 [Indemnification by the Borrower] to be paid by it to the
Administrative Agent (or any sub-agent thereof), the Issuing Lender or any
Related Party of any of the foregoing, each Lender severally agrees to pay to
the Administrative Agent (or any such sub-agent), the Issuing Lender or such
Related Party, as the case may be, such Lender’s Ratable Share (determined as of
the time that the applicable unreimbursed expense or indemnity payment is
sought) of such unpaid amount, provided that the unreimbursed expense or
indemnified loss, claim, damage, liability or related expense, as the case may
be, was incurred by or asserted against the Administrative Agent (or any such
sub-agent) or the Issuing Lender in its capacity as such, or against any Related
Party of any of the foregoing acting for the Administrative Agent (or any such
sub-agent) or Issuing Lender in connection with such capacity.

 

73

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

11.3.4 Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable Law, the Borrower shall not assert, and hereby waives, any claim
against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement, any other
Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or Letter of Credit or the
use of the proceeds thereof. No Indemnitee referred to in Section 11.3.2
[Indemnification by Borrower] shall be liable for any damages arising from the
use by unintended recipients of any information or other materials distributed
by it through telecommunications, electronic or other information transmission
systems in connection with this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby.

11.3.5 Payments. All amounts due under this Section shall be payable not later
than ten (10) days after demand therefor.

11.4 Holidays. Whenever payment of a Loan to be made or taken hereunder shall be
due on a day which is not a Business Day such payment shall be due on the next
Business Day (except as provided in Section 4.2 [Interest Periods]) and such
extension of time shall be included in computing interest and fees, except that
the Loans shall be due on the Business Day preceding the Expiration Date if the
Expiration Date is not a Business Day. Whenever any payment or action to be made
or taken hereunder (other than payment of the Loans) shall be stated to be due
on a day which is not a Business Day, such payment or action shall be made or
taken on the next following Business Day, and such extension of time shall not
be included in computing interest or fees, if any, in connection with such
payment or action.

11.5 Notices; Effectiveness; Electronic Communication.

11.5.1 Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in
Section 11.5.2 [Electronic Communications]), all notices and other
communications provided for herein shall be in writing and shall be delivered by
hand or overnight courier service, mailed by certified or registered mail or
sent by telecopier (i) if to a Lender, to it at its address set forth in its
administrative questionnaire, or (ii) if to any other Person, to it at its
address set forth on Schedule 1.1(B).

Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next Business Day for the
recipient). Notices delivered through electronic communications to the extent
provided in Section 11.5.2 [Electronic Communications], shall be effective as
provided in such Section.

 

74

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

11.5.2 Electronic Communications. Notices and other communications to the
Lenders and the Issuing Lender hereunder may be delivered or furnished by
electronic communication (including e-mail and Internet or intranet websites)
pursuant to procedures approved by the Administrative Agent; provided that the
foregoing shall not apply to notices to any Lender or the Issuing Lender if such
Lender or the Issuing Lender, as applicable, has notified the Administrative
Agent that it is incapable of receiving notices under such Article by electronic
communication. The Administrative Agent or the Borrower may, in its discretion,
agree to accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it; provided that approval of
such procedures may be limited to particular notices or communications. Unless
the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement); provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next Business Day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.

11.5.3 Change of Address, Etc. Any party hereto may change its address, e-mail
address or telecopier number for notices and other communications hereunder by
notice to the other parties hereto.

11.6 Severability. The provisions of this Agreement are intended to be
severable. If any provision of this Agreement shall be held invalid or
unenforceable in whole or in part in any jurisdiction, such provision shall, as
to such jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without in any manner affecting the validity or enforceability
thereof in any other jurisdiction or the remaining provisions hereof in any
jurisdiction.

11.7 Duration; Survival. All representations and warranties of the Loan Parties
contained herein or made in connection herewith shall survive the execution and
delivery of this Agreement, the completion of the transactions hereunder and
Payment In Full. All covenants and agreements of the Borrower contained herein
relating to the payment of principal, interest, premiums, additional
compensation or expenses and indemnification, including those set forth in the
Notes, Section 5 [Payments] and Section 11.3 [Expenses; Indemnity; Damage
Waiver], shall survive Payment In Full. All other covenants and agreements of
the Loan Parties shall continue in full force and effect from and after the date
hereof and until Payment In Full.

 

75

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

11.8 Successors and Assigns.

11.8.1 Successors and Assigns Generally. The provisions of this Agreement shall
be binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns permitted hereby, except that neither the
Borrower nor any other Loan Party may assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of the
Administrative Agent and each Lender and no Lender may assign or otherwise
transfer any of its rights or obligations hereunder except (i) to an assignee in
accordance with the provisions of Section 11.8.2 [Assignments by Lenders],
(ii) by way of participation in accordance with the provisions of Section 11.8.4
[Participations], or (iii) by way of pledge or assignment of a security interest
subject to the restrictions of Section 11.8.6 [Certain Pledges; Successors and
Assigns Generally] (and any other attempted assignment or transfer by any party
hereto shall be null and void). Nothing in this Agreement, expressed or implied,
shall be construed to confer upon any Person (other than the parties hereto,
their respective successors and assigns permitted hereby, Participants to the
extent provided in Section 11.8.4 [Participations] and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent and
the Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.

11.8.2 Assignments by Lenders. Any Lender may at any time assign to one or more
assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans at the time owing to
it); provided that any such assignment shall be subject to the following
conditions:

(i) Minimum Amounts.

(A) in the case of an assignment of the entire remaining amount of the assigning
Lender’s Commitment and the Loans at the time owing to it or in the case of an
assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum
amount need be assigned; and

(B) in any case not described in clause (i)(A) of this Section 11.8.2, the
aggregate amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) or, if the applicable Commitment is not then in effect,
the principal outstanding balance of the Loans of the assigning Lender subject
to each such assignment (determined as of the date the Assignment and Assumption
Agreement with respect to such assignment is delivered to the Administrative
Agent or, if “Trade Date” is specified in the Assignment and Assumption
Agreement, as of the Trade Date) shall not be less than $5,000,000, in the case
of any assignment in respect of the Revolving Credit Commitment of the assigning
Lender, unless each of the Administrative Agent and, so long as no Event of
Default has occurred and is continuing, the Borrower otherwise consents (each
such consent not to be unreasonably withheld or delayed).

(ii) Proportionate Amounts. Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loan or the Commitment
assigned.

(iii) Required Consents. No consent shall be required for any assignment except
for the consent of the Administrative Agent (which shall not be unreasonably
withheld or delayed) and:

(A) the consent of the Borrower (such consent not to be unreasonably withheld or
delayed) shall be required unless (x) an Event of Default has occurred and is
continuing at the time of such assignment or (y) such assignment is to a Lender,
an Affiliate of a Lender or an Approved Fund; provided that the Borrower shall
be deemed to have consented to any such assignment unless it shall object
thereto by written notice to the Administrative Agent within five (5) Business
Days after having received notice thereof; and

 

76

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

(B) the consent of the Issuing Lender (such consent not to be unreasonably
withheld or delayed) shall be required for any assignment that increases the
obligation of the assignee to participate in exposure under one or more Letters
of Credit (whether or not then outstanding).

(iv) Assignment and Assumption Agreement. The parties to each assignment shall
execute and deliver to the Administrative Agent an Assignment and Assumption
Agreement, together with a processing and recordation fee of $3,500, and the
assignee, if it is not a Lender, shall deliver to the Administrative Agent an
administrative questionnaire provided by the Administrative Agent.

(v) No Assignment to Borrower. No such assignment shall be made to the Borrower
or any of the Borrower’s Affiliates or Subsidiaries.

(vi) No Assignment to Natural Persons. No such assignment shall be made to a
natural person.

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to Section 11.8.3 [Register], from and after the effective date specified in
each Assignment and Assumption Agreement, the assignee thereunder shall be a
party to this Agreement and, to the extent of the interest assigned by such
Assignment and Assumption Agreement, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Assumption Agreement, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Assumption Agreement covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto) but shall continue to be entitled to the benefits of Sections 4.4
[LIBOR Rate Unascertainable; Etc.], 5.8 [Increased Costs], and 11.3 [Expenses,
Indemnity; Damage Waiver] with respect to facts and circumstances occurring
prior to the effective date of such assignment. Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this Section 11.8.2 shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance with
Section 11.8.4 [Participations].

11.8.3 Register. The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain a record of the names and addresses of the
Lenders, and the Commitments of, and principal amounts of the Loans owing to,
each Lender pursuant to the terms hereof from time to time. Such register shall
be conclusive, and the Borrower, the Administrative Agent and the Lenders may
treat each Person whose name is in such register pursuant to the terms hereof as
a Lender hereunder for all purposes of this Agreement, notwithstanding notice to
the contrary. Such register shall be available for inspection by the Borrower
and any Lender, at any reasonable time and from time to time upon reasonable
prior notice.

 

77

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

11.8.4 Participations. Any Lender may at any time, without the consent of, or
notice to, the Borrower or the Administrative Agent, sell participations to any
Person (other than a natural person or the Borrower or any of the Borrower’s
Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such
Lender’s rights and/or obligations under this Agreement (including all or a
portion of its Commitment and/or the Loans owing to it); provided that (i) such
Lender’s obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Borrower, the Administrative
Agent, the Lenders, and the Issuing Lender shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement.

Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
(other than as is already provided for herein) to any amendment, modification or
waiver with respect to Sections 11.1.1 [Increase of Commitment], 11.1.2
[Extension of Payment, Etc.], or 11.1.3 [Release of Collateral or Guarantor])
that affects such Participant. The Borrower agrees that each Participant shall
be entitled to the benefits of Sections 4.4 [Libor Rate Unascertainable, Etc.],
5.8 [Increased Costs], 5.10 [Indemnity] and 5.9 [Taxes] (subject to the
requirements and limitations therein, including the requirements under
Section 5.9.7 [Status of Lenders] (it being understood that the documentation
required under Section 5.9.7 [Status of Lenders] shall be delivered to the
participating Lender)) to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to Section 11.8.2 [Assignments by
Lenders]; provided that such Participant (A) agrees to be subject to the
provisions of Section 5.6.2 [Replacement of a Lender] as if it were an assignee
under Section 11.8.2 [Assignments by Lenders]; and (B) shall not be entitled to
receive any greater payment under Sections 5.8 [Increased Costs] or 5.9 [Taxes],
with respect to any participation, than its participating Lender would have been
entitled to receive, except to the extent such entitlement to receive a greater
payment results from a Change in Law that occurs after the Participant acquired
the applicable participation. Each Lender that sells a participation agrees, at
the Borrower’s request and expense, to use reasonable efforts to cooperate with
the Borrower to effectuate the provisions of Section 5.6.2 [Replacement of a
Lender] with respect to any Participant. To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 9.2.3 [Set-off] as
though it were a Lender; provided that such Participant agrees to be subject to
Section 5.3 [Sharing of Payments by Lenders] as though it were a Lender. Each
Lender that sells a participation shall, acting solely for this purpose as an
agent of the Borrower, maintain a register on which it enters the name and
address of each Participant and the principal amounts (and stated interest) of
each Participant’s interest in the Loans or other obligations under the Loan
Documents (the “Participant Register”); provided that no Lender shall have any
obligation to disclose all or any portion of the Participant Register (including
the identity of any Participant or any information relating to a Participant’s
interest in any commitments, loans, letters of credit or its other obligations
under any Loan Document) to any Person except to the extent that such disclosure
is necessary to establish that such commitment, loan, letter of credit or other
obligation is in registered form under Section 5f.103-1(c) of the United States
Treasury Regulations. The entries in the Participant Register shall be
conclusive absent manifest error, and such Lender shall treat each Person whose
name is recorded in the Participant Register as the owner of such participation
for all purposes of this Agreement notwithstanding any notice to the contrary.
For the avoidance of doubt, the Administrative Agent (in its capacity as
Administrative Agent) shall have no responsibility for maintaining a Participant
Register.

 

78

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

11.8.5 Certain Pledges; Successors and Assigns Generally. Any Lender may at any
time pledge or assign a security interest in all or any portion of its rights
under this Agreement to secure obligations of such Lender, including any pledge
or assignment to secure obligations to a Federal Reserve Bank; provided that no
such pledge or assignment shall release such Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.

11.9 Confidentiality.

11.9.1 General. Each of the Administrative Agent, the Lenders and the Issuing
Lender agrees to maintain the confidentiality of the Information, except that
Information may be disclosed (i) to its Affiliates and to its and its
Affiliates’ respective partners, directors, officers, employees, agents,
advisors and other representatives (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (ii) to the
extent requested by any regulatory authority purporting to have jurisdiction
over it (including any self-regulatory authority, such as the National
Association of Insurance Commissioners), (iii) to the extent required by
applicable Laws or regulations or by any subpoena or similar legal process,
(iv) to any other party hereto, (v) in connection with the exercise of any
remedies hereunder or under any other Loan Document or any action or proceeding
relating to this Agreement or any other Loan Document or the enforcement of
rights hereunder or thereunder, (vi) subject to an agreement containing
provisions substantially the same as those of this Section, to (A) any assignee
of or Participant in, or any prospective assignee of or Participant in, any of
its rights or obligations under this Agreement or (B) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
the Borrower and its obligations, (vii) with the consent of the Borrower or
(viii) to the extent such Information (Y) becomes publicly available other than
as a result of a breach of this Section or (Z) becomes available to the
Administrative Agent, any Lender, the Issuing Lender or any of their respective
Affiliates on a nonconfidential basis from a source other than the Borrower or
the other Loan Parties. Any Person required to maintain the confidentiality of
Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such Information as such Person would
accord to its own confidential information.

11.9.2 Sharing Information With Affiliates of the Lenders. Each Loan Party
acknowledges that from time to time financial advisory, investment banking and
other services may be offered or provided to the Borrower 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 of the Loan
Parties hereby authorizes each Lender to share for such purpose any information
delivered to such Lender by such Loan Party and its Subsidiaries pursuant to
this Agreement to any such Subsidiary or Affiliate subject to the provisions of
Section 11.9.1 [General].

 

79

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

11.10 Counterparts; Integration; Effectiveness.

11.10.1 Counterparts; Integration; Effectiveness. This Agreement may be executed
in counterparts (and by different parties hereto in different counterparts),
each of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Agreement and the other Loan Documents,
and any separate letter agreements with respect to fees payable to the
Administrative Agent, constitute the entire contract among the parties relating
to the subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof including
any prior confidentiality agreements and commitments. Except as provided in
Section 7 [Conditions Of Lending And Issuance Of Letters Of Credit], this
Agreement shall become effective when it shall have been executed by the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof that, when taken together, bear the signatures of each of
the other parties hereto. Delivery of an executed counterpart of a signature
page of this Agreement by telecopy or e-mail shall be effective as delivery of a
manually executed counterpart of this Agreement.

11.11 CHOICE OF LAW; SUBMISSION TO JURISDICTION; WAIVER OF VENUE; SERVICE OF
PROCESS; WAIVER OF JURY TRIAL.

11.11.1 Governing Law. This Agreement shall be deemed to be a contract under the
Laws of the State of New York without regard to its conflict of laws principles.
Each standby Letter of Credit issued under this Agreement shall be subject
either to the rules of the Uniform Customs and Practice for Documentary Credits,
as most recently published by the International Chamber of Commerce (the “ICC”)
at the time of issuance (“UCP”) or the rules of the International Standby
Practices (ICC Publication Number 590) (“ISP98”), as determined by the Issuing
Lender, and each trade Letter of Credit shall be subject to UCP, and in each
case to the extent not inconsistent therewith, the Laws of the State of New York
without regard to is conflict of laws principles.

11.11.2 SUBMISSION TO JURISDICTION. THE BORROWER AND EACH OTHER LOAN PARTY
IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE
NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE COMMONWEALTH OF PENNSYLVANIA
SITTING IN PHILADELPHIA COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE
EASTERN DISTRICT OF PENNSYLVANIA, AND ANY APPELLATE COURT FROM ANY THEREOF, IN
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH
OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN
RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH
PENNSYLVANIA STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT
IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN
OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY
LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY
RIGHT THAT THE ADMINISTRATIVE AGENT, ANY LENDER OR THE ISSUING LENDER MAY
OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT AGAINST THE BORROWER OR ANY OTHER LOAN PARTY OR ITS
PROPERTIES IN THE COURTS OF ANY JURISDICTION.

 

80

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

11.11.3 WAIVER OF VENUE. THE BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT IN ANY COURT REFERRED TO IN THIS SECTION 11.11. EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT AND AGREES NOT ASSERT ANY SUCH DEFENSE.

11.11.4 SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 11.5 [NOTICES;
EFFECTIVENESS; ELECTRONIC COMMUNICATION]. NOTHING IN THIS AGREEMENT WILL AFFECT
THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
APPLICABLE LAW.

11.11.5 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, ADMINISTRATIVE
AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO
HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

11.12 USA Patriot Act Notice. Each Lender that is subject to the USA Patriot Act
and the Administrative Agent (for itself and not on behalf of any Lender) hereby
notifies Loan Parties that pursuant to the requirements of the USA Patriot Act,
it is required to obtain, verify and record information that identifies the Loan
Parties, which information includes the name and address of Loan Parties and
other information that will allow such Lender or Administrative Agent, as
applicable, to identify the Loan Parties in accordance with the USA Patriot Act.

 

81

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

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

 

BORROWERS:     SL INDUSTRIES, INC.     By:   /s/ Louis J. Belardi     Name:  
Louis J. Belardi     Title:   CFO, Secretary & Treasurer

 

   

SL DELAWARE, INC.

SL DELAWARE HOLDINGS, INC.

TEAL ELECTRONICS CORPORATION

RFL ELECTRONICS INC.

SL MONTEVIDEO TECHNOLOGY, INC.

SL SURFACE TECHNOLOGIES, INC.

CEDAR CORPORATION

MTE CORPORATION

MEX HOLDINGS LLC

SL POWER ELECTRONICS CORPORATION

SLGC HOLDINGS, INC.

    By:   /s/ Louis J. Belardi     Name:   Louis J. Belardi     Title:  
Authorized Officer

 

GUARANTORS:    

SL POWER ELECTRONICS LTD.

INDUSTRIAS SL, S.A. DE C.V.

CONDOR POWER SUPPLIES DE MEXICO, S.A. DE C.V.

SL XIANGHE POWER ELECTRONICS CORP.

SL SHANGHAI POWER ELECTRONICS CORP.

SL SHANGHAI INTERNATIONAL TRADING CORP.

CEDRO DE MEXICO, S.A. DE C.V.

TPE DE MEXICO, S. DE R.L. DE C.V.

    By:   /s/ Louis J. Belardi     Name:   Louis J. Belardi     Title:  
Authorized Officer

 

[SIGNATURE PAGE TO CREDIT AGREEMENT]

 

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

PNC BANK, NATIONAL ASSOCIATION,

individually as a Lender and as Administrative Agent

By:   /s/ Kirk M Mader Name:   Kirk M. Mader Title:   Senior Vice President

 

[SIGNATURE PAGE TO CREDIT AGREEMENT]

 

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

SCHEDULE 1.1(A)

PRICING GRID —

VARIABLE PRICING AND FEES BASED ON LEVERAGE RATIO

 

Level

  

Leverage Ratio

   Commitment
Fee     Letter of
Credit  Fee     Revolving Credit
Base  Rate Spread     Revolving Credit
LIBOR Rate
Spread  

I

   Less than or equal to 1.75 to 1.0      0.125 %      1.25 %      0.25 %     
1.25 % 

II

   Greater than 1.75 to 1.0 but less than or equal to 2.25 to 1.0      0.15 %   
  1.50 %      0.50 %      1.50 % 

III

   Greater than 2.25 to 1.0 but less than or equal to 2.75 to 1.0      0.20 %   
  1.75 %      0.75 %      1.75 % 

IV

   Greater than 2.75 to 1.0 but less than or equal to 3.25 to 1.0      0.25 %   
  2.00 %      1.00 %      2.00 % 

For purposes of determining the Applicable Margin, the Applicable Commitment Fee
Rate and the Applicable Letter of Credit Fee Rate:

(a) The Applicable Margin, the Applicable Commitment Fee Rate and the Applicable
Letter of Credit Fee Rate shall be determined on the Closing Date based on the
Leverage Ratio computed on such date pursuant to a Compliance Certificate to be
delivered on the Closing Date.

(b) The Applicable Margin, the Applicable Commitment Fee Rate and the Applicable
Letter of Credit Fee Rate shall be recomputed as of the end of each fiscal
quarter ending after the Closing Date based on the Leverage Ratio as of such
quarter end. Any increase or decrease in the Applicable Margin, the Applicable
Commitment Fee Rate or the Applicable Letter of Credit Fee Rate computed as of a
quarter end shall be effective on the date on which the Compliance Certificate
evidencing such computation is due to be delivered under Section 8.3.3
[Certificate of Borrower]. If a Compliance Certificate is not delivered when due
in accordance with such Section 8.3.3, then the rates in Level IV shall apply as
of the first Business Day after the date on which such Compliance Certificate
was required to have been delivered and shall remain in effect until the date on
which such Compliance Certificate is delivered.

 

SCHEDULE 1.1(A)

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

(c) If, as a result of any restatement of or other adjustment to the financial
statements of the Borrower or for any other reason, the Borrower or the Lenders
determine that (i) the Leverage Ratio as calculated by the Borrower as of any
applicable date was inaccurate and (ii) a proper calculation of the Leverage
Ratio would have resulted in higher pricing for such period, the Borrower shall
immediately and retroactively be obligated to pay to the Administrative Agent
for the account of the applicable Lenders, promptly on demand by the
Administrative Agent (or, after the occurrence of an actual or deemed entry of
an order for relief with respect to the Borrower under the Bankruptcy Code of
the United States, automatically and without further action by the
Administrative Agent, any Lender or the Issuing Lender), an amount equal to the
excess of the amount of interest and fees that should have been paid for such
period over the amount of interest and fees actually paid for such period. This
paragraph shall not limit the rights of the Administrative Agent, any Lender or
the Issuing Lender, as the case may be, under Section 2.9 [Letter of Credit
Subfacility] or 4.3 [Interest After Default] or 9 [Default]. The Borrower’s
obligations under this paragraph shall survive the termination of the
Commitments and the repayment of all other Obligations hereunder.

 

SCHEDULE 1.1(A)

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

SCHEDULE 1.1(B)

COMMITMENTS OF LENDERS AND ADDRESSES FOR NOTICES

Page 1 of 2

Part 1—Commitments of Lenders and Addresses for Notices to Lenders

 

Lender

   Amount of
Commitment
for Revolving
Credit Loans      Amount of
Commitment
for DOJ/EPA
Loans      Commitment      Ratable Share  

Name: PNC Bank, National Association

Address: 1600 Market Street,

22nd Floor, F2-F070-22-2

Philadelphia, PA 19103

Attention: Kirk Mader, Senior Vice President

Telephone: 215.585.1385

Telecopy: 215.585.4144

   $

 

 

 

40,000,000

 

 

 

  

 

 

 

   $

 

 

 

10,700,000

 

 

 

  

 

 

 

   $

 

 

 

50,700,000

 

 

 

  

 

 

 

    

 

 

 

100

 

 

 

% 

 

 

 

 

SCHEDULE 1.1(B)

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

SCHEDULE 1.1(B)

COMMITMENTS OF LENDERS AND ADDRESSES FOR NOTICES

Page 2 of 2

Part 2—Addresses for Notices to Borrower and Guarantors:

ADMINISTRATIVE AGENT

Name: PNC Bank, National Association

Address: 1600 Market Street, 22nd Floor, F2-F070-22-2

Philadelphia, PA 19103

Attention: Kirk Mader, Senior Vice President

Telephone: 215.585.1385

Telecopy: 215.585.4144

With a Copy To:

PNC Bank, National Association

Loan Administrator — Team Lead

Commercial Loan Administration

PNC Harborside

One East Pratt Street

4th Floor W, Mail Stop C3-C411-04-1

Baltimore, Maryland 21202

Attention: Nancy Norris

Telephone: 410.237.5283

Telecopy: 410.237.5256

BORROWER:

Name: SL Industries, Inc.

SL Delaware, Inc.

SL Delaware Holdings, Inc.

Teal Electronics Corporation

RFL Electronics, Inc.

SL Montevideo Technology, Inc.

SL Surface Technologies, Inc.

MTE Corporation

Cedar Corporation

MEX Holdings LLC

SL Power Electronics Corporation

 

SCHEDULE 1.1(B)

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

SLGC Holdings, Inc.

Address: 520 Fellowship Road, Suite A-114

Mount Laurel, NJ 08054

Attention: Louis J. Belardi

Telephone: (856) 222-5525

Telecopy: (856) 727-1683

GUARANTORS:

Name: SL Power Electronics Ltd.

Industrias SL, S.A. de C.V.

Condor Power Supplies de Mexico, S.A. de C.V.

SL Xianghe Power Electronics Corp.

SL Shanghai Power Electronics Corp.

SL Shanghai International Trading Corp.

Cedro de Mexico, S.A. de C.V.

TPE de Mexico, S. de R.L. De C.V.

Address: 520 Fellowship Road, Suite A-114

Mount Laurel, NJ 08054

Attention: Louis J. Belardi

Telephone: (856) 222-5525

Telecopy: (856) 727-1683

 

SCHEDULE 1.1(B)

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

SCHEDULE 1.1(P)

PERMITTED LIENS

 

Debtor

   Secured Party    Type/Filing Date    File Number    State   

Collateral Description

RFL Electronics Inc.    Oce Financial Services Inc.    Original

4/7/2010

   25593105    NJ    Equipment under PO# 49315 and all accessions, attachments,
replacements, substitutions, modifications and additions thereto, now or
hereafter acquired, and all proceeds thereof (including insurance proceeds)
Model serial# with all peripherals TDS720FA, 0772006341, 4904942, 0073205780,
TC54, 0451014275. This is a precautionary filing in connection with a true lease
transaction and is not to be construed as indicating the transaction is other
than a true lease.

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

SCHEDULE 6.1.1

QUALIFICATIONS TO DO BUSINESS

 

Loan Party

  

Jurisdiction of Organization

   Other States in which Loan Party is
Qualified to do Business

SL Industries, Inc.

   New Jersey    None

SL Delaware, Inc.

   Delaware    None

SL Delaware Holdings, Inc.

   Delaware    None

MTE Corporation

   Wisconsin    None

RFL Electronics Inc.

   Delaware    New Jersey, Ohio

SL Montevideo Technology, Inc.

   Minnesota    Pennsylvania

Cedar Corporation

   Nevada    None

Teal Electronics Corporation

   California    None

Mex Holdings LLC

   Delaware    None

SL Power Electronics Corporation

   Delaware    California, Massachusetts, Minnesota,
New York, Pennsylvania, Washington

SLGC Holdings, Inc.

   Delaware    None

SL Surface Technologies, Inc.

   New Jersey    None

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

SL Power Electronics Ltd.

   United Kingdom    None

Industrias SL, S.A. de C.V.

   Mexico    None

Condor Power Supplies de Mexico, S.A. de C.V.

   Mexico    None

SL Xianghe Power Electronics Corp.

   China    None

SL Shanghai Power Electronics Corp.

   China    None

SL Shanghai International Trading Corp.

   China    None

Cedro de Mexico, S.A. de C.V.

   Mexico    None

TPE de Mexico, S. de R.L. De C.V.

   Mexico    None

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

SCHEDULE 6.1.2

SUBSIDIARIES

 

Company

   Authorized Shares      Shares Issued and Outstanding     

Holder and % of Equity Interest

SL Delaware, Inc.

     1,000         1,000      

SL Industries, Inc.

100%

SL Delaware Holdings, Inc.

     1,000         1,000      

SL Industries, Inc.

100%

MTE Corporation

     50,000         1,746 2/3      

SL Delaware Holdings, Inc.

100%

RFL Electronics Inc.

     1,000         1,000      

SL Delaware Holdings, Inc.

100%

SL Montevideo Technology, Inc.

     100         1      

SL Delaware Holdings, Inc.

100%

Cedar Corporation

     25,000         25,000      

SL Montevideo Technology, Inc.

100%

Teal Electronics Corporation

     1,000         100      

SL Delaware Holdings, Inc.

100%

Mex Holdings LLC

     N/A         N/A      

Teal Electronics Corporation

100%

SL Power Electronics Corporation

     3,000         1,000      

SL Delaware Holdings, Inc.

100%

SLGC Holdings, Inc.

     3,000         1,000      

SL Delaware Holdings, Inc.

100%

SL Surface Technologies, Inc.

     2,500         2,500      

SLGC Holdings, Inc.

100%

SL Power Electronics Ltd.

     50,000         1,000      

SL Power Electronics Corporation

100%

Industrias SL, S.A. de C.V.

     100         100      

SL Power Electronics Corporation

99%.

SL Delaware Holdings, Inc.

1%

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

Condor Power Supplies de Mexico, S.A. de C.V.

     5,000         5,000      

SL Power Electronics Corporation

99%.

SL Industries, Inc.

1%

SL Xianghe Power Electronics Corp.

     386,065         386,065      

SL Power Electronics Corporation

100%

SL Shanghai Power Electronics Corp.

     39,656         39,656      

SL Power Electronics Corporation

100%

SL Shanghai International Trading Corp.

     39,648         39,648      

SL Power Electronics Corporation

100%

Cedro de Mexico, S.A. de C.V.

     5,000         5,000      

Cedar Corporation

99.98%

SL Delaware Holdings, Inc.

.02%

TPE de Mexico, S. de R.L. de C.V.

     3,000         3,000      

Teal Electronics Corporation

99%

MEX Holdings LLC

1%

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

SCHEDULE 6.1.4

REQUIRED CONSENTS AND FILINGS

Filing of the UCC financing statements, and filings relating to the perfection
of security interests in intellectual property including tradenames, copyrights
and patents.

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

SCHEDULE 6.1.5

LITIGATION

China

The Company has been and is conducting an investigation to determine whether
certain employees of SL Xianghe Power Electronics Corporation, SL Shanghai Power
Electronics Corporation and SL Shanghai International Trading Corporation, three
of the Company’s indirect wholly-owned subsidiaries incorporated and operating
exclusively in China, may have improperly provided gifts and entertainment to
government officials (the “China Investigation”). Based upon the China
Investigation, which is nearing completion, the estimate of the amounts of such
gifts and entertainment, as uncovered by such investigation, does not appear to
be material to the Company’s financial statements. There can be no assurance,
however, that when the investigation is completed, the actual amounts will not
be in excess of what is currently estimated. Such estimate does not take into
account the costs to the Company of the China Investigation or any other
additional costs.

The China Investigation includes determining whether there were any violations
of laws, including the U.S. Foreign Corrupt Practices Act. The Company’s outside
counsel has contacted the DOJ and the Securities and Exchange Commission (the
“SEC”) voluntarily to disclose that the Company was conducting an internal
investigation, and agreed to cooperate fully and update the DOJ and SEC
periodically on further developments. The Company’s counsel has done so, and the
Company has continued to cooperate fully with the DOJ and the SEC.

The Company has retained outside counsel and forensic accountants to assist in
the China Investigation and the Company cannot predict at this time whether any
regulatory action may be taken or any other adverse consequences may result from
this matter.

Environmental

The matters set forth on Schedule 6.1.14 are incorporated herein by reference.

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

SCHEDULE 6.1.6

MATERIAL ADVERSE CHANGE

The matters set forth on Schedule 6.1.14 are incorporated herein by reference.

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

SCHEDULE 6.1.10

INTELLECTUAL PROPERTY

None

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

SCHEDULE 6.1.14

ENVIRONMENTAL MATTERS

There are three sites on which the Company may incur material environmental
costs in the future as a result of past activities of its former subsidiary,
SurfTech. There are two Company owned sites related to its former subsidiary,
SurfTech. These sites are located in Pennsauken, New Jersey (the “Pennsauken
Site”) and in Camden, New Jersey (the “Camden Site”). There is also a third
site, which is not owned by the Company, referred to as the “Puchack Well Field
Site.” The Puchack Well Field Site and the Pennsauken Site are part of the
Puchack Well Field Superfund Site.

The Company has been and is the subject of administrative actions that arise
from its ownership of SL Surface Technologies, Inc. (“SurfTech”), a wholly-owned
subsidiary, the assets of which were sold in November 2003. SurfTech formerly
operated chrome-plating facilities in Pennsauken Township, New Jersey (the
“Pennsauken Site”) and Camden, New Jersey (the “Camden Site”).

In 2006 the United States Environmental Protection Agency (the “EPA”) named the
Company as a potential responsible party (a “PRP”) in connection with the
remediation of the Puchack Well Field, which has been designated as a Superfund
Site. The EPA has alleged that hazardous substances generated at the Company’s
Pennsauken Site contaminated the Puchack Well Field. As a PRP, the Company is
potentially liable, jointly and severally, for the investigation and remediation
of the Puchack Well Field Superfund Site under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (“CERCLA”).

The EPA is remediating the Puchack Well Field Superfund Site in two separate
operable units. The first operable unit consists of an area of chromium
groundwater contamination in three aquifers that exceeds the selected cleanup
standard (“OU-1”). The second operable unit (“OU-2”) pertains to sites that are
allegedly the sources of contamination for the first operable unit. The EPA
advised the Company in October 2010 that OU-2 includes soil contamination in the
immediate vicinity of the Company’s Pennsauken Site.

In September 2006, the EPA issued a Record of Decision (“ROD”) that selected a
remedy for OU-1 to address the groundwater contamination. The estimated cost of
the EPA selected remedy for OU-1, to be conducted over a five to ten year
timeframe, was approximately $17,600,000, as stated in the ROD. In an October
2010 meeting with the EPA, the EPA informed the Company that the OU-1 remedy
would be implemented in two phases. Prior to the issuance of the EPA’s ROD, the
Company had retained an experienced environmental consulting firm to prepare
technical comments on the EPA’s proposed remediation of the Puchack Well Field
Superfund Site. In those comments, the Company’s consultant, among other things,
identified flaws in the EPA’s conclusions and the factual predicates for certain
of the EPA’s decisions and for the proposed selected remedy.

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

Following the issuance of its ROD for OU-1, in November 2006, the EPA sent
another letter to the Company encouraging the Company to either perform or
finance the remedial actions for OU-1 identified in the EPA’s ROD. In addition
to paying for the OU-1 remediation, the EPA has sought payment of the past costs
that the EPA has allegedly incurred. The Company responded to the EPA that it
was willing to investigate the existence of other PRPs and to undertake the
activities necessary to design a final remediation for the Superfund Site. In
July 2007, the EPA refused the Company’s offer to perform the work necessary to
design the remediation plan without first agreeing to assume responsibility for
the full remediation of the Superfund Site. The EPA did encourage the Company to
investigate the existence of other PRPs and to submit evidence thereof, if
appropriate. In January 2008, the Company submitted to the EPA evidence
demonstrating the existence of several other PRPs.

In June 2011, the EPA announced a proposed plan for “cleaning up the soil” at
OU-2. The remedy proposed by the EPA is “Geochemical Fixation.” This remedy
involves applying a chemical reductant to the contaminated soil to reduce
hexavalent chromium by converting it to immobilized trivalent chromium. The
EPA’s estimated cost for this remedy is $20,700,000 over seven years. The public
comment period for the proposed plan expired on July 27, 2011. On September 26,
2011 the EPA issued a ROD selecting the Geochemical Fixation remedy. This remedy
involves mixing a reducing agent to treat soils containing concentrations of
hexavalent chromium greater than 20 parts per million. The remedy also requires
post-remediation sampling, site restoration and implementing a groundwater
sampling and analysis program. The Company intends to have its environmental
consultants play an active role in the remediation design.

The Company has reached an agreement in principle with the DOJ related to its
liability for both OU-1 and OU-2. The Company has agreed in principle to perform
the remediation for OU-2. Also, the Company has agreed in principle to pay a
fixed sum for the EPA’s past cost for OU-2 and a portion of the EPA’s past cost
for OU-1. The payments are to be made annually in four equal payments. The first
payment plus interest is to be made within 30 days of entry of the Consent
Decree. Each of the next three payments plus interest is to be made on the
anniversary date of the first payment. The Company has also agreed in principle
to pay the EPA’s costs for oversight of the OU-2 remediation. This agreement is
subject to the approval of both the DOJ and EPA’s management who are authorized
to settle this matter. Also, the proposed agreement will be subject to a public
comment period and finally must be approved by the Federal District Court. The
Company, in consultation with its consultants and legal counsel, are working on
a Statement of Work (“SOW”) for the implementation of the remedy selected in the
September 26, 2011 ROD for OU-2. The SOW will be incorporated into the Consent
Decree and will be an enforceable part of the Consent Decree.

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

With respect to the Camden Site, the Company has reported soil contamination and
a groundwater contamination plume emanating from the site. Delineation of the
soil and groundwater contamination is substantially complete. In the third
quarter of 2009, pursuant to an Interim Response Action (“IRA”) Workplan
approved by the New Jersey Department of Environmental Protection (“NJDEP”), the
Company completed building demolition and excavated and disposed of some of the
contaminated soil underlying the building’s foundation. Treatability studies for
in-situ remediation of the remaining unsaturated contaminated soil were
conducted in 2009. Based upon the treatability study results, our environmental
consultants prepared an IRA Workplan Addendum (“IRAWA”) to implement a Phase I
Pilot Study (“PIPS”), which involved injecting neutralizing chemicals into the
unsaturated soil. The NJDEP approved the IRAWA, and the PIPS was implemented in
November 2010. As required by the IRAWA, our consultants collected
post-injection data for assessment of the overall success of the PIPS. Our
consultants completed the assessment of the PIPS and indicated that the PIPS can
be implemented as a full scale soil remedy to treat unsaturated contaminated
soil. A Remedial Action Workplan for soils (“RAWP”) is being developed. The RAWP
will select the PIPS remedy as the site wide remedy for unsaturated soils, along
with demolition and proper disposal of the former concrete building slab and
targeted excavation and disposal of impacted soil immediately underlying the
slab. Additionally, the RAWP will address a small area of impacted soil off the
property. The RAWP will be submitted to the NJDEP, by the Licensed Site
Remediation Professional (“LSRP”) for the site. The RAWP is scheduled to be
implemented in 2013. Also, the Company’s environmental consultants finalized an
IRA Workplan Addendum II (“IRAWA II”) to implement a Phase II Pilot Study
(“PIIPS”) to treat on-site contaminated groundwater. The IRAWA II was submitted
to the NJDEP in May 2011. It proposed multiple sub-surface injections of a
food-grade product, into the groundwater at the down gradient property boundary,
to create a “bio-barrier.” The PIIPS would assess the ability to treat
contaminated groundwater as it moves through the bio-barrier. The IRAWA II also
required the collection of groundwater samples to assess the performance of the
PIIPS. Due to the NJDEP’s transition into the LSRP Program, the NJDEP did not
comment on the IRAWA II and permit application. The Company’s LSRP believes the
IRAWA II complies with the applicable NJDEP regulations and guidance documents.
The permit application was resubmitted to the NJDEP for approval in June 2012.
Implementation of the PIIPS is scheduled to occur during 2012 and 2013,
depending upon the NJDEP’s approval of the related permit.

The Company is currently participating in environmental assessments and clean-up
at a commercial facility located in Wayne, New Jersey. Contaminated soil and
groundwater has undergone remediation with NJDEP oversight, but contaminants of
concern (“COCs”) in groundwater and surface water, which extend off-site, still
remain above applicable NJDEP remediation standards. Certain COCs have also been
detected in the indoor air of two commercial buildings, located on the property.
One of the buildings (the “Main Building”) was outfitted with a sub-slab
depressurization system as a mitigation measure. The source investigations under
the Main Building were completed in June 2012. Soil and groundwater samples
collected from underneath the Main Building identified COCs in excess of the
NJDEP’s applicable remediation standards. Consequently, a soil contaminant
source remains under the Main Building that is feeding the groundwater
contamination. The Company’s consultants are in the process of assessing
remedial options and that assessment is expected to be completed by the fourth
quarter of 2012. The remedial investigation conducted in the second quarter of
2012 identified a new source of COCs, outside of a second building and two
sub-grade anomalies near the building that need to be further investigated. One
of the anomalies has an appearance of an underground storage tank. Additional
investigations will be required to delineate the source area and identify the
anomalies. A soil remedial action plan will be required in order to remove
contamination that continues to impact groundwater, which likely serves as a
potential source of vapor detected inside the second building. Our consultants
will review data to determine what supplemental remedial action is necessary for
soils, and whether to modify or expand the groundwater remedy that will likely
consist of additional in-situ injections of food grade product into the
groundwater. The Company has engaged a LSRP to oversee the remediation of the
site. The future costs for possible additional remediation are not currently
estimable.

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

The Company has reported soil and groundwater contamination at the facility of
SL-MTI located on its property in Montevideo, Minnesota. An analysis of the
contamination has been completed and a remediation plan has been implemented at
the site pursuant to the remedial action plan approved by the Minnesota
Pollution Control Agency. The remaining steps under this plan are the monitoring
of samples.

Westville, NJ

The Former SL Waber Facility is located in Westville, New Jersey. The property
was previously owned by SL Industries, and operated by SL Waber, a subsidiary of
SL Industries. SL Waber ceased operations; SL Industries subdivided the
property, and sold a portion of the property to a knitting company in 1998. SL
Industries remains the owner of a small undeveloped portion of the property. SL
Industries is under an Administrative Consent Order/Remediation Agreement with
the New Jersey Department of Environmental Protection (“NJDEP”) to remediate the
property. Under NJDEP guidelines, the contaminates of concern (“COC’s”) exceeded
certain screening levels. Annual groundwater sampling was completed in May, 2011
on the property. Analytical results confirmed that COC’s for the property remain
above applicable NJDEP standards. Vapor sampling was completed and a “Vapor
Intrusion Update Report” was sent to the NJDEP. In the report the Company’s
consultants indicated that there are two areas of elevated vapors of concern
(“VOC”) concentrations beneath one of the building’s floor located on the
property .Soil samples collected from underneath the building confirmed that a
soil source is present and that another one may be present. The remedial
investigation of the property had been completed by May 2012 per statutory
mandate. The Company’s consultants are assessing soil and groundwater remedial
options. This assessment will be important to determine if supplemental
injections into the groundwater are necessary to “kick start” the biodegradation
process which was performed several years ago. A Licensed Site Responsible
Person (“LSRP”) has been selected for this site who is an individual from the
Company’s current consulting firm.

Swope Superfund Site

The Company has a minor liability for this site, approximately 0.49% for
liabilities related to remediation and other administrative costs .Expenses for
the past several years have been minor. The Company has accrued $45,000 relate
the Swope site.

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

SCHEDULE 8.1.3

INSURANCE REQUIREMENTS RELATING TO THE COLLATERAL

COVENANTS:

At the request of the Administrative Agent, the Loan Parties shall deliver to
the Administrative Agent and each of the Lenders (x) on the Closing Date and
annually thereafter an original certificate of insurance signed by the Loan
Parties’ independent insurance broker describing and certifying as to the
existence of the insurance on the Collateral required to be maintained by this
Agreement and the other Loan Documents, together with a copy of the endorsement
described in the next sentence attached to such certificate, and (y) from time
to time a summary schedule indicating all insurance then in force with respect
to each of the Loan Parties. Such policies of insurance shall contain special
endorsements which include the provisions set forth below or are otherwise in
form acceptable to the Administrative Agent in its discretion. The applicable
Loan Parties shall notify the Administrative Agent promptly of any occurrence
causing a material loss or decline in value of the Collateral and the estimated
(or actual, if available) amount of such loss or decline. Any monies received by
the Administrative Agent constituting insurance proceeds may, at the option of
the Administrative Agent, (i) in the case of property insurance proceeds
received during the existence of an Event of Default, be applied by the
Administrative Agent to the payment of the Obligations in accordance with the
terms of the Credit Agreement, (ii) for losses of less than $500,000 received at
such time as no Event of Default or Potential Default exists, be disbursed by
the Administrative Agent to the applicable Loan Parties, and (iii) for losses
equal to or greater than $500,000 received at such time as no Event of Default
or Potential Default exists, be disbursed by the Administrative Agent to the
applicable Loan Parties on such terms as are deemed appropriate by the
Administrative Agent for the repair, restoration and/or replacement of
Collateral and other property in respect of which such proceeds were received.

ENDORSEMENT:

(i) specify the Administrative Agent as an additional insured, mortgagee and
lender loss payee as its interests may appear,

(ii) with respect to all property insurance policies, provide that the interest
of the Lenders shall be insured regardless of any breach or violation by the
applicable Loan Parties of any warranties, declarations or conditions contained
in such policies or any action or inaction of the applicable Loan Parties or
others insured under such policies, except that the insurer shall not be
obligated to maintain the insurance if the breach consists of non-payment of
premiums which continues for 30 days after written notice to Administrative
Agent,

(iii) provide a waiver of any right of the insurers to set off or counterclaim
or any other deduction, whether by attachment or otherwise,

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

(iv) provide that any and all rights of subrogation which the insurers may have
or acquire against the Loan Parties shall be, at all times and in all respects,
junior and subordinate to the prior Payment In Full of the Indebtedness
hereunder and that no insurer shall exercise or assert any right of subrogation
until such time as the Indebtedness hereunder has been paid in full and the
Commitments have terminated,

(v) provide that no cancellation of such policies for any reason (including
non-payment of premium) nor any change therein shall be effective until at least
thirty (30) days after receipt by the Administrative Agent of written notice of
such cancellation or change,

(vi) be primary without right of contribution of any other insurance carried by
or on behalf of any additional insureds with respect to their respective
interests in the Collateral, and

(vii) provide that inasmuch as the policy covers more than one insured, all
terms, conditions, insuring agreements and endorsements (except limits of
liability) shall operate as if there were a separate policy covering each
insured.

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

SCHEDULE 8.2.1

PERMITTED INDEBTEDNESS

 

1. Indebtedness related to foreign currency forward contracts used to hedge
foreign currency risk.*

 

2. Indebtedness related to Copper Purchase Agreements. As of June 30, 2012,
inventory purchase agreements for copper totaled $1,193,000.*

 

3. Operating leases as and to the extent permitted under Section 8.2.14.*

 

4. Letter of Credit issued by Bank of America, N.A., held by Royal
Bank of Canada on behalf of SL Industries, Inc.

 

5. Letter of Credit issued by Bank of America, N.A., held by Kevin O’Reilley,
Trustee of E2S Trust, on behalf of SL Power Electronics Corporation.

 

* Amounts related to these arrangements fluctuate.

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

SCHEDULE 9.1.6

FINAL JUDGMENTS/ORDERS

Any final judgments or orders arising out of or related to the matters set forth
on Schedule 6.1.5 are incorporated herein by reference.

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

EXHIBIT 1.1(A)

ASSIGNMENT AND ASSUMPTION AGREEMENT

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

EXHIBIT 1.1(A)

ASSIGNMENT AND ASSUMPTION AGREEMENT

THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (the “Assignment”) is dated as of the
Effective Date set forth below and is entered into by and between
                                                                          (the
“Assignor”) and                                          
                                (the “Assignee”). Capitalized terms used but not
defined herein shall have the meanings given to them in the Credit Agreement
identified below (as amended, the “Credit Agreement”), receipt of a copy of
which is hereby acknowledged by each Assignee. The Standard Terms and Conditions
set forth in Annex 1 are hereby agreed to and incorporated herein by reference
and made a part of this Assignment as if set forth herein in full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to each Assignee, and each Assignee hereby irrevocably purchases and assumes
from the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below, the interest in and to all of the
Assignor’s rights and obligations under the Credit Agreement and any other
documents or instruments delivered pursuant thereto that represents the amount
and percentage interests identified below each Assignee’s name on the signature
pages hereto, of all of the Assignor’s outstanding rights and obligations under
the respective facilities identified on the signature pages hereto (including,
to the extent included in any such facilities, letters of credit and swingline
loans) (each an “Assigned Interest” and collectively the “Assigned Interests”).
Such sale and assignment is without recourse to the Assignor and, except as
expressly provided in this Assignment, without representation or warranty by the
Assignor.

 

1.    Assignor:   

 

2.    Assignee:   

 

      [and is an Affiliate/Approved Fund of [identify Lender]1] 3.   
Borrower(s):    SL Industries, Inc., a New Jersey corporation, SL Power
Electronics Corporation, a Delaware corporation, SL Montevideo Technology, Inc.,
a Minnesota corporation, RFL Electronics Inc., a Delaware corporation, Teal
Electronics Corporation, a California corporation, MTE Corporation, a Wisconsin
corporation, SL Delaware, Inc., a Delaware corporation, SL Delaware Holdings,
Inc., a Delaware corporation, Cedar Corporation, a Nevada corporation, Mex
Holdings LLC, a Delaware limited liability company, SLGC Holdings, Inc., a
Delaware corporation and SL Surface Technologies, Inc., a New Jersey corporation
     

 

 

1 

Select as applicable.

 

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

4.    Administrative Agent:    PNC Bank, National Association, as the
administrative agent under the Credit Agreement 5.    Credit Agreement:    The
Credit Agreement dated             , 2012 by and among Borrowers, the Lenders
parties thereto, PNC Bank, National Association, as Administrative Agent, and
the Guarantors now or hereafter party thereto, as the same may be amended,
restated or supplemented from time to time. 6.    Assigned Interest:   

 

Facility Assigned

   Aggregate
Amount of
Commitment/
Loans for all
Lenders      Amount of
Commitment/
Loans
Assigned      Percentage
Assigned of
Commitment/
Loans2      CUSIP
Number

Revolving Credit Commitment

   $         $           %      

7. [Trade Date:                      ]3

8. Effective Date:             , 20        [TO BE INSERTED BY ADMINISTRATIVE
AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE
REGISTER THEREFOR.]4

[SIGNATURE PAGES FOLLOW]

 

 

2 

Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of
all Lenders thereunder.

3 

To be completed if the Assignor and the Assignee intend that the minimum
assignment amount is to be determined as of the Trade Date.

4 

Assignor shall pay a fee of $3,500 to the Administrative Agent in connection
with the Assignment and Assumption.

 

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

[SIGNATURE PAGE—ASSIGNMENT AND ASSUMPTION AGREEMENT]

The terms set forth in this Assignment are hereby agreed to:

 

ASSIGNOR

 

[NAME OF ASSIGNOR]

By:     Name:     Title:    

 

ASSIGNEE

 

[NAME OF ASSIGNEE]

By:     Name:     Title:    

 

Consented to and Accepted:

 

PNC BANK, NATIONAL ASSOCIATION,

as Administrative Agent

By:     Name:     Title:    

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

[Consented to:]5

 

BORROWER

 

[NAME]

By:     Name:     Title:    

 

GUARANTORS

 

[NAME]

By:     Name:     Title:    

 

 

5 

To be added only if the consent of the Borrower is required by the terms of the
Credit Agreement.

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

ANNEX 1

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION AGREEMENT

1. Representations and Warranties.

1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal
and beneficial owner of the Assigned Interests, (ii) the Assigned Interests are
free and clear of any lien, encumbrance or other adverse claim and (iii) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and to consummate the transactions contemplated hereby;
and (b) assumes no responsibility with respect to (i) any statements, warranties
or representations made in or in connection with any Loan Document, (ii) the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Credit Agreement or any other instrument or document delivered pursuant
thereto, other than this Assignment (herein collectively the “Loan Documents”),
or any collateral thereunder, (iii) the financial condition of the Borrower, any
of its Subsidiaries or Affiliates or any other Person obligated in respect of
any Loan Document or (iv) the performance or observance by the Borrower, any of
its Subsidiaries or Affiliates or any other Person of any of their respective
obligations under any Loan Document.

1.2 Assignee. Each Assignee severally (a) represents and warrants that (i) it
has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and to consummate the transactions contemplated hereby
and to become a Lender under the Credit Agreement, (ii) it meets all
requirements, if any, of an eligible assignee under the Credit Agreement,
(iii) from and after the Effective Date, it shall be bound by the provisions of
the Credit Agreement and, to the extent of its Assigned Interests, shall have
the obligations of a Lender thereunder, (iv) it has received a copy of the
Credit Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 6.1.6 thereof, as applicable, and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and to purchase its Assigned
Interests on the basis of which it has made such analysis and decision, and
(v) if such Assignee is not incorporated or organized under the laws of the
United States of America or any State thereof, attached to the Assignment is any
documentation required to be delivered by it pursuant to the terms of the Credit
Agreement, duly completed and executed by such Assignee; and (b) agrees that
(i) it will, independently and without reliance on the Administrative Agent, the
Assignor or any other Lender, 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 Loan Documents, and (ii) it will perform
in accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender.

2. Payments. From and after the Effective Date, the Administrative Agent shall
make all payments in respect of each Assignee’s Assigned Interests (including
payments of principal, interest, fees and other amounts) to the Assignor for
amounts which have accrued to but excluding the Effective Date and to the
respective Assignee for amounts which have accrued from and after the Effective
Date.

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

3. General Provisions. This Assignment shall be binding upon, and inure to the
benefit of, the parties hereto and their respective successors and assigns. This
Assignment may be executed in any number of counterparts, which together shall
constitute one instrument. Delivery of an executed counterpart of a signature
page of this Assignment by telecopy shall be effective as delivery of a manually
executed counterpart of this Assignment. This Assignment shall be governed by,
and construed in accordance with, the laws of the State of New York.

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

EXHIBIT 1.1(G)(1)

GUARANTOR JOINDER

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

EXHIBIT 1.1(G)(1)

FORM OF

GUARANTOR JOINDER AND ASSUMPTION AGREEMENT

THIS GUARANTOR JOINDER AND ASSUMPTION AGREEMENT is made as of             ,
20    , by                                 , a
            [corporation/partnership/limited liability company] (the “New
Guarantor”).

Background

Reference is made to (i) the Credit Agreement, dated as of             , 2012,
as the same may be amended, restated, supplemented or modified from time to time
(the “Credit Agreement”), by and among SL Industries, Inc., a New Jersey
corporation, SL Power Electronics Corporation, a Delaware corporation, SL
Montevideo Technology, Inc., a Minnesota corporation, RFL Electronics Inc., a
Delaware corporation, Teal Electronics Corporation, a California corporation,
MTE Corporation, a Wisconsin corporation, SL Delaware, Inc., a Delaware
corporation, SL Delaware Holdings, Inc., a Delaware corporation, Cedar
Corporation, a Nevada corporation, Mex Holdings LLC, a Delaware limited
liability company, SLGC Holdings, Inc., a Delaware corporation and SL Surface
Technologies, Inc., a New Jersey corporation (collectively, the “Borrower”),
each of the Guarantors now or hereafter party thereto, the Lenders now or
hereafter party thereto (the “Lenders”) and PNC Bank, National Association, in
its capacity as agent for the Lenders (in such capacity, the “Agent”), (ii) the
Continuing Agreement of Guaranty and Suretyship (Subsidiary), dated as of
            , 2012 as the same may be amended, restated, supplemented or
modified from time to time (the “Guaranty”) of Guarantors given to the Agent as
agent for the Lenders, (iii) the Security Agreement, dated as of             ,
2012 as the same may be amended, restated, supplemented or modified from time to
time (the “Security Agreement”) among the Loan Parties and the Agent as agent
for the Lenders, (iv) the Pledge Agreement, dated as of             , 2012, as
the same may be amended, restated, supplemented or modified from time to time
(the “Pledge Agreement”) made by certain Loan Parties party thereto in favor of
the Agent, (v) Patent, Trademark and Copyright Security Agreement, dated as of
            , 2012, as the same may be amended, restated, supplemented or
modified from time to time (the “Patent, Trademark and Copyright Security
Agreement”) among certain Loan Parties party thereto and the Agent for the
benefit of the Lenders and (vi) the other Loan Documents referred to in the
Credit Agreement, as the same may be amended, restated, supplemented or modified
from time to time (the “Loan Documents”).

 

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

Agreement

Capitalized terms defined in the Credit Agreement are used herein as defined
therein.

New Guarantor hereby becomes a Guarantor under the terms of the Credit Agreement
and in consideration of the value of the synergistic and other benefits received
by New Guarantor as a result of being or becoming affiliated with the Borrower
and the Guarantors, New Guarantor hereby agrees that effective as of the date
hereof it hereby is, and shall be deemed to be, and assumes the obligations of,
a “Loan Party” and a “Guarantor”, jointly and severally under the Credit
Agreement, a “Guarantor,” jointly and severally with the existing Guarantors
under the Guaranty, a “Debtor” jointly and severally under the Security
Agreement, a “Pledgor” jointly and severally under the Pledge Agreement and the
Patent, Trademark and Copyright Security Agreement and a Loan Party or
Guarantor, as the case may be, under each of the other Loan Documents to which
the Loan Parties or Guarantors are a party; and, New Guarantor hereby agrees
that from the date hereof and so long as any Loan or any Commitment of any
Lender shall remain outstanding and until the payment in full of the Loans and
the Notes, the expiration of all Letters of Credit, and the performance of all
other obligations of the Loan Parties under the Loan Documents, New Guarantor
shall perform, comply with, and be subject to and bound by each of the terms and
provisions of the Credit Agreement, Guaranty, Security Agreement, Pledge
Agreement, Patent, Trademark and Copyright Security Agreement and each of the
other Loan Documents jointly and severally with the existing parties thereto.
Without limiting the generality of the foregoing, New Guarantor hereby
represents and warrants that (i) each of the representations and warranties set
forth in Section 6 of the Credit Agreement applicable to a Loan Party is true
and correct as to New Guarantor on and as of the date hereof and (ii) New
Guarantor has heretofore received a true and correct copy of the Credit
Agreement, Guaranty, Security Agreement, Pledge Agreement, Patent, Trademark and
Copyright Security Agreement and each of the other Loan Documents (including any
modifications thereof or supplements or waivers thereto) in effect on the date
hereof.

New Guarantor hereby makes, affirms, and ratifies in favor of the Lenders and
the Agent the Credit Agreement, Guaranty, Security Agreement, Pledge Agreement,
Intercompany Subordination Agreement, Patent, Trademark and Copyright Security
Agreement and each of the other Loan Documents given by the Guarantors to the
Agent and any of the Lenders.

New Guarantor is simultaneously delivering to the Agent the documents, together
with this Guarantor Joinder and Assumption Agreement, required under Sections
7.1 [First Loans and Letters of Credit] and 8.2.9 [Subsidiaries, Partnership and
Join Ventures].

In furtherance of the foregoing, New Guarantor shall execute and deliver or
cause to be executed and delivered at any time and from time to time such
further instruments and documents and do or cause to be done such further acts
as may be reasonably necessary in the reasonable opinion of Agent to carry out
more effectively the provisions and purposes of this Guarantor Joinder and
Assumption Agreement and the other Loan Documents.

New Guarantor acknowledges and agrees that a telecopy transmission to the Agent
or any Lender of signature pages hereof purporting to be signed on behalf of New
Guarantor shall constitute effective and binding execution and delivery hereof
by New Guarantor.

[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]

 

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

[SIGNATURE PAGE 1 OF 1 OF GUARANTOR JOINDER AND ASSUMPTION AGREEMENT]

NEW GUARANTOR SHALL CAUSE BORROWER TO PROVIDE SUCH ADDITIONAL DOCUMENTS AS
REQUIRED BY SECTION 8.2.9 OF THE CREDIT AGREEMENT.

IN WITNESS WHEREOF, and intending to be legally bound hereby, the New Guarantor
has duly executed this Guarantor Joinder and Assumption Agreement and delivered
the same to the Agent for the benefit of the Lenders, as of the date and year
first above written with the intention that this Guarantor Joinder and
Assumption Agreement constitute a sealed instrument.

 

ATTEST:    

 

      By:       (SEAL) Name:         Name:     Title:         Title:    

Acknowledged and accepted:

PNC BANK, NATIONAL ASSOCIATION, as Agent

 

By:       Name:       Title:    

 

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

EXHIBIT 1.1(G)(2)

GUARANTY AGREEMENT

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

CONTINUING AGREEMENT OF GUARANTY AND SURETYSHIP

This Continuing Agreement of Guaranty and Suretyship (the “Guaranty”), dated as
of this             day of August             , 2012, is jointly and severally
given by each of the undersigned and each of the other Persons which become
Guarantors hereunder from time to time (each a “Guarantor” and collectively the
“Guarantors”) in favor of PNC BANK, NATIONAL ASSOCIATION, as agent for the
Lenders (the “Agent”) in connection with that Credit Agreement, dated as of the
date hereof, by and among SL INDUSTRIES, INC., a New Jersey corporation, SL
POWER ELECTRONICS CORPORATION, a Delaware corporation, SL MONTEVIDEO TECHNOLOGY,
INC., a Minnesota corporation, RFL ELECTRONICS INC., a Delaware corporation,
TEAL ELECTRONICS CORPORATION, a California corporation, MTE CORPORATION, a
Wisconsin corporation, SL DELAWARE, INC., a Delaware corporation, SL DELAWARE
HOLDINGS, INC., a Delaware corporation, CEDAR CORPORATION, a Nevada corporation,
MEX HOLDINGS LLC, a Delaware limited liability company, SLGC HOLDINGS, INC., a
Delaware corporation and SL SURFACE TECHNOLOGIES, INC., a New Jersey corporation
(each a “Borrower” and collectively the “Borrowers”), the Guarantors now or
hereafter party thereto, the Agent, and the Lenders now or hereafter party
thereto (the “Lenders”) (as amended, restated, modified, or supplemented from
time to time hereafter, the “Credit Agreement”). Capitalized terms not otherwise
defined herein shall have the respective meanings ascribed to them by the Credit
Agreement and the rules of construction set forth in Section 1.2 [Construction]
of the Credit Agreement shall apply to this Guaranty.

1. Guarantied Obligations. To induce the Agent and the Lenders to make loans and
grant other financial accommodations to the Borrower under the Credit Agreement,
each Guarantor hereby jointly and severally unconditionally, and irrevocably,
guaranties to the Agent, each Lender and any Lender Provided Interest Rate Hedge
(each an “IRH Provider”); and becomes surety, as though it was a primary obligor
for, the full and punctual payment and performance when due (whether on demand,
at stated maturity, by acceleration, or otherwise and including any amounts
which would become due but for the operation of an automatic stay under the
United States Bankruptcy Code or any similar laws of any country or
jurisdiction) of all Obligations, including, without limiting the generality of
the foregoing, all obligations, liabilities, and indebtedness from time to time
of the Borrower or any other Guarantor to the Agent or any of the Lenders or any
Affiliate of any Lender under or in connection with the Credit Agreement or any
other Loan Document, whether for principal, interest, fees, indemnities,
expenses, or otherwise, and all refinancings or refundings thereof, whether such
obligations, liabilities, or indebtedness are direct or indirect, secured or
unsecured, joint or several, absolute or contingent, due or to become due,
whether for payment or performance, now existing or hereafter arising (and
including obligations, liabilities, and indebtedness arising or accruing after
the commencement of any bankruptcy, insolvency, reorganization, or similar
proceeding with respect to the Borrower or any Guarantor or which would have
arisen or accrued but for the commencement of such proceeding, even if the claim
for such obligation, liability, or indebtedness is not enforceable or allowable
in such proceeding, and including all Obligations, liabilities, and indebtedness
arising from any extensions of credit under or in connection with the

 

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

Loan Documents from time to time, regardless whether any such extensions of
credit are in excess of the amount committed under or contemplated by the Loan
Documents or are made in circumstances in which any condition to extension of
credit is not satisfied) (all of the foregoing obligations, liabilities and
indebtedness are referred to herein collectively as the “Guarantied Obligations”
and each as a “Guarantied Obligation”). Without limitation of the foregoing, any
of the Guarantied Obligations shall be and remain Guarantied Obligations
entitled to the benefit of this Guaranty if the Agent or any of the Lenders (or
any one or more assignees or transferees thereof) from time to time assign or
otherwise transfer all or any portion of their respective rights and obligations
under the Loan Documents, or any other Guarantied Obligations, to any other
Person in accordance with the terms of the Credit Agreement. In furtherance of
the foregoing, each Guarantor jointly and severally agrees as follows.

2. Guaranty. Each Guarantor hereby jointly and severally promises to pay and
perform all such Guarantied Obligations when due and payable immediately upon
demand of the Agent and the Lenders or any one or more of them. All payments
made hereunder shall be made by each Guarantor in immediately available funds in
United States Dollars and shall be made without setoff, counterclaim,
withholding, or other deduction of any nature.

3. Obligations Absolute. The obligations of the Guarantors hereunder shall not
be discharged or impaired or otherwise diminished by the failure, default,
omission, or delay, willful or otherwise, by any Lender, the Agent, or any
Borrower or any other obligor on any of the Guarantied Obligations, or by any
other act or thing or omission or delay to do any other act or thing which may
or might in any manner or to any extent vary the risk of any Guarantor or would
otherwise operate as a discharge of any Guarantor as a matter of law or equity,
except for, and to the extent of, indefeasible payment and performance in full
of the Guarantied Obligations. Each of the Guarantors agrees that the Guarantied
Obligations will be paid and performed strictly in accordance with the terms of
the Loan Documents. Without limiting the generality of the foregoing, each
Guarantor hereby consents to, at any time and from time to time, and the joint
and several obligations of each Guarantor hereunder shall not be diminished,
terminated, or otherwise similarly affected by any of the following:

(a) Any lack of genuineness, legality, validity, enforceability or allowability
(in a bankruptcy, insolvency, reorganization or similar proceeding, or
otherwise), or any avoidance or subordination, in whole or in part, of any Loan
Document or any of the Guarantied Obligations and regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction affecting any
of the Guarantied Obligations, any of the terms of the Loan Documents, or any
rights of the Agent or the Lenders or any other Person with respect thereto;

(b) Any increase, decrease, or change in the amount, nature, type or purpose of
any of, or any release, surrender, exchange, compromise or settlement of any of
the Guarantied Obligations (whether or not contemplated by the Loan Documents as
presently constituted); any change in the time, manner, method, or place of
payment or performance of, or in any other term of, any of the Guarantied
Obligations; any execution or delivery of any additional Loan Documents; or any
amendment, modification or supplement to, or refinancing or refunding of, any
Loan Document or any of the Guarantied Obligations;

 

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

(c) Any failure to assert any breach of or default under any Loan Document or
any of the Guarantied Obligations; any extensions of credit in excess of the
amount committed under or contemplated by the Loan Documents, or in
circumstances in which any condition to such extensions of credit has not been
satisfied; any other exercise or non-exercise, or any other failure, omission,
breach, default, delay, or wrongful action in connection with any exercise or
non-exercise, of any right or remedy against the Borrower or any other Person
under or in connection with any Loan Document or any of the Guarantied
Obligations; any refusal of payment or performance of any of the Guarantied
Obligations, whether or not with any reservation of rights against any
Guarantor; or any application of collections (including but not limited to
collections resulting from realization upon any direct or indirect security for
the Guarantied Obligations) to other obligations, if any, not entitled to the
benefits of this Guaranty, in preference to Guarantied Obligations entitled to
the benefits of this Guaranty, or if any collections are applied to Guarantied
Obligations, any application to particular Guarantied Obligations;

(d) Any taking, exchange, amendment, modification, waiver, supplement,
termination, subordination, compromise, release, surrender, loss, or impairment
of, or any failure to protect, perfect, or preserve the value of, or any
enforcement of, realization upon, or exercise of rights, or remedies under or in
connection with, or any failure, omission, breach, default, delay, or wrongful
action by the Agent or the Lenders, or any of them, or any other Person in
connection with the enforcement of, realization upon, or exercise of rights or
remedies under or in connection with, or, any other action or inaction by any of
the Agent or the Lenders, or any of them, or any other Person in respect of, any
direct or indirect security for any of the Guarantied Obligations. As used in
this Guaranty, “direct or indirect security” for the Guarantied Obligations, and
similar phrases, includes any collateral security, guaranty, suretyship, letter
of credit, capital maintenance agreement, put option, subordination agreement,
or other right or arrangement of any nature providing direct or indirect
assurance of payment or performance of any of the Guarantied Obligations, made
by or on behalf of any Person;

(e) Any merger, consolidation, liquidation, dissolution, winding-up, charter
revocation, or forfeiture, or other change in, restructuring or termination of
the corporate structure or existence of, the Borrower or any other Person; any
bankruptcy, insolvency, reorganization or similar proceeding with respect to the
Borrower or any other Person; or any action taken or election made by the Agent
or the Lenders, or any of them (including but not limited to any election under
Section 1111(b)(2) of the United States Bankruptcy Code), the Borrower, or any
other Person in connection with any such proceeding;

(f) Any defense, setoff, or counterclaim which may at any time be available to
or be asserted by the Borrower or any other person with respect to any Loan
Document or any of the Guarantied Obligations, other than, and to the extent of,
indefeasible payment and performance in full of the Guarantied Obligations; or
any discharge by operation of law or release of the Borrower or any other Person
from the performance or observance of any Loan Document or any of the Guarantied
Obligations; or

 

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

(g) Any other event or circumstance, whether similar or dissimilar to the
foregoing, and whether known or unknown, which might otherwise constitute a
defense available to, or limit the liability of, any Guarantor, a guarantor or a
surety, excepting only full, strict, and indefeasible payment and performance of
the Guarantied Obligations in full.

4. Waivers, etc. Each of the Guarantors hereby waives any defense to or
limitation on its obligations under this Guaranty (other than, and to the extent
of, the defense of prior indefeasible payment in full of the Guarantied
Obligations) arising out of or based on any event or circumstance referred to in
Section 3 hereof. Without limitation and to the fullest extent permitted by
applicable law, each Guarantor waives each of the following:

(a) All notices, disclosures and demand of any nature which otherwise might be
required from time to time to preserve intact any rights against any Guarantor,
including the following: any notice of any event or circumstance described in
Section 3 hereof; any notice required by any law, regulation or order now or
hereafter in effect in any jurisdiction; any notice of nonpayment,
nonperformance, dishonor, or protest under any Loan Document or any of the
Guarantied Obligations; any notice of the incurrence of any Guarantied
Obligation; any notice of any default or any failure on the part of the Borrower
or any other Person to comply with any Loan Document or any of the Guarantied
Obligations or any direct or indirect security for any of the Guarantied
Obligations; and any notice of any information pertaining to the business,
operations, condition (financial or otherwise) or prospects of the Borrower or
any other Person;

(b) Any right to any marshalling of assets, to the filing of any claim against
the Borrower or any other Person in the event of any bankruptcy, insolvency,
reorganization or similar proceeding, or to the exercise against the Borrower or
any other Person of any other right or remedy under or in connection with any
Loan Document or any of the Guarantied Obligations or any direct or indirect
security for any of the Guarantied Obligations; any requirement of promptness or
diligence on the part of the Agent or the Lenders, or any of them, or any other
Person; any requirement to exhaust any remedies under or in connection with, or
to mitigate the damages resulting from default under, any Loan Document or any
of the Guarantied Obligations or any direct or indirect security for any of the
Guarantied Obligations; any benefit of any statute of limitations; and any
requirement of acceptance of this Guaranty or any other Loan Document, and any
requirement that any Guarantor receive notice of any such acceptance;

(c) Any defense or other right arising by reason of any law now or hereafter in
effect in any jurisdiction pertaining to election of remedies (including but not
limited to anti-deficiency laws, “one action” laws or the like), or by reason of
any election of remedies or other action or inaction by the Agent or the
Lenders, or any of them (including but not limited to commencement or completion
of any judicial proceeding or nonjudicial sale or other action in respect of
collateral security for any of the Guarantied Obligations), which results in
denial or impairment of the right of the Agent or the Lenders, or any of them,
to seek a deficiency against the Borrower or any other Person or which otherwise
discharges or impairs any of the Guarantied Obligations; and

(d) Any and all defenses it may now or hereafter have based on principles of
suretyship, impairment of collateral, or the like.

 

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

5. Reinstatement. This Guaranty is a continuing obligation of the Guarantors and
shall remain in full force and effect notwithstanding that no Guarantied
Obligations may be outstanding from time to time and notwithstanding any other
event or circumstance. Upon termination of all Commitments, the expiration of
all Letters of Credit and indefeasible payment in full of all Guarantied
Obligations, this Guaranty shall terminate; provided, however, that this
Guaranty shall continue to be effective or be reinstated, as the case may be,
any time any payment of any of the Guarantied Obligations is rescinded,
recouped, avoided, or must otherwise be returned or released by any Lender or
Agent upon or during the insolvency, bankruptcy, or reorganization of, or any
similar proceeding affecting, the Borrower or for any other reason whatsoever,
all as though such payment had not been made and was due and owing.

6. Subrogation. Each Guarantor waives and agrees it will not exercise any rights
against Borrower or any other Guarantor arising in connection with, or any
Collateral securing, the Guarantied Obligations (including rights of
subrogation, contribution, and the like) until the Guarantied Obligations have
been indefeasibly paid in full, and all Commitments have been terminated and all
Letters of Credit have expired. If any amount shall be paid to any Guarantor by
or on behalf of the Borrower or any other Guarantor by virtue of any right of
subrogation, contribution, or the like, such amount shall be deemed to have been
paid to such Guarantor for the benefit of, and shall be held in trust for the
benefit of, the Agent and the Lenders and shall forthwith be paid to the Agent
to be credited and applied upon the Guarantied Obligations, whether matured or
unmatured, in accordance with the terms of the Credit Agreement.

7. No Stay. Without limitation of any other provision of this Guaranty, if any
declaration of default or acceleration or other exercise or condition to
exercise of rights or remedies under or with respect to any Guarantied
Obligation shall at any time be stayed, enjoined, or prevented for any reason
(including but not limited to stay or injunction resulting from the pendency
against the Borrower or any other Person of a bankruptcy, insolvency,
reorganization or similar proceeding), the Guarantors agree that, for the
purposes of this Guaranty and their obligations hereunder, the Guarantied
Obligations shall be deemed to have been declared in default or accelerated, and
such other exercise or conditions to exercise shall be deemed to have been taken
or met.

8. Taxes.

(a) No Deductions. All payments made by any Guarantor under any of the Loan
Documents shall be made free and clear of and without deduction for any present
or future taxes, levies, imposts, deductions, charges, or withholdings, and all
liabilities with respect thereto, excluding taxes imposed on the net income of
any Lender and all income and franchise taxes of the United States applicable to
any Lender (all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings, and liabilities being hereinafter referred to as “Taxes”). If any
Guarantor shall be required by law to deduct any Taxes from or in respect of any
sum payable under any of the Loan Documents, (i) the sum payable shall be
increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this
Subsection (a) such Lender receives an amount equal to the sum it would have
received had no such deductions been made, (ii) such Guarantor shall make such
deductions and (iii) such Guarantor shall timely pay the full amount deducted to
the relevant tax authority or other authority in accordance with applicable law.

 

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

(b) Stamp Taxes. In addition, each Guarantor agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges, or
similar levies which arise from any payment made hereunder or from the
execution, delivery, or registration of, or otherwise with respect to, any of
the Loan Documents (hereinafter referred to as “Other Taxes”).

(c) Indemnification for Taxes Paid by any Lender. Each Guarantor shall indemnify
each Lender for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Subsection) paid by any Lender and any liability (including
penalties, interest, and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted.
This indemnification shall be made within thirty (30) days from the date a
Lender makes written demand therefor.

(d) Certificate. Within thirty (30) days after the date of any payment of any
Taxes by any Guarantor, such Guarantor shall furnish to each Lender, the
original or a certified copy of a receipt evidencing payment thereof. If no
Taxes are payable in respect of any payment by such Guarantor, such Guarantor
shall, if so requested by a Lender, provide a certificate of an officer of such
Guarantor to that effect.

9. Judgment Currency.

(a) If for the purposes of obtaining judgment in any court it is necessary to
convert a sum due under any of the Loan Documents in any currency (the “Original
Currency”) into another currency (the “Other Currency”), each Guarantor hereby
agrees, to the fullest extent permitted by law, that the rate of exchange used
shall be that at which in accordance with normal banking procedures each Lender
could purchase the Original Currency with the Other Currency after any premium
and costs of exchange on the Business Day preceding that on which final judgment
is given.

(b) The obligation of each Guarantor in respect of any sum due from such
Guarantor to any Lender under any of the Loan Documents shall, notwithstanding
any judgment in an Other Currency, whether pursuant to a judgment or otherwise,
be discharged only to the extent that, on the business day (being a day on which
it is open for business at its principal office in the United States) following
receipt by any Lender of any sum adjudged to be so due in such Other Currency,
such Lender may in accordance with normal banking procedures purchase the
Original Currency with such Other Currency. If the amount of the Original
Currency so purchased is less than the sum originally due to such Lender in the
Original Currency, each Guarantor agrees, as a separate obligation and
notwithstanding any such judgment or payment, to indemnify such Lender against
such loss.

 

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

10. Notices. Each Guarantor agrees that all notices, statements, requests,
demands and other communications under this Guaranty shall be given to such
Guarantor at the address set forth on a Schedule to, or in a Guarantor Joinder
and Assumption Agreement given under, the Credit Agreement and in the manner
provided in Section 11.5 of the Credit Agreement. The Agent and the Lenders may
rely on any notice (whether or not made in a manner contemplated by this
Guaranty) purportedly made by or on behalf of a Guarantor, and the Agent and the
Lenders shall have no duty to verify the identity or authority of the Person
giving such notice.

11. Counterparts; Telecopy Signatures. This Guaranty may be executed in any
number of counterparts, each of which, when so executed, shall be deemed an
original, but all such counterparts shall together constitute but one and the
same instrument. Each Guarantor acknowledges and agrees that a telecopy or
electronic transmission to Agent or any Lender of signature pages hereof
purporting to be signed on behalf of any Guarantor shall constitute effective
and binding execution and delivery hereof by such Guarantor.

12. Setoff, Default Payments by Borrower.

(a) In the event that at any time any obligation of the Guarantors now or
hereafter existing under this Guaranty shall have become due and payable, the
Agent and the Lenders, or any of them, shall have the right from time to time,
without notice to such Guarantor, to set off against and apply to such due and
payable amount any obligation of any nature of any Lender or the Agent, or any
subsidiary or affiliate of any Lender or Agent, to any Guarantor, including but
not limited to all deposits (whether time or demand, general or special,
provisionally credited or finally credited, however evidenced) now or hereafter
maintained by any Guarantor with the Agent or any Lender or any IRH Provider.
Such right shall be absolute and unconditional in all circumstances and, without
limitation, shall exist whether or not the Agent or the Lenders, or any of them,
shall have given any notice or made any demand under this Guaranty or under such
obligation to the Guarantor, whether such obligation to the Guarantor is
absolute or contingent, matured or unmatured (it being agreed that the Agent and
the Lenders, or any of them, may deem such obligation to be then due and payable
at the time of such setoff), and regardless of the existence or adequacy of any
collateral, guaranty, or other direct or indirect security or right or remedy
available to the Agent or any of the Lenders. The rights of the Agent and the
Lenders under this Section are in addition to such other rights and remedies
(including, without limitation, other rights of setoff and banker’s lien) which
the Agent and the Lenders, or any of them, may have, and nothing in this
Guaranty or in any other Loan Document shall be deemed a waiver of or
restriction on the right of setoff or banker’s lien of the Agent and the
Lenders, or any of them. Each of the Guarantors hereby agrees that, to the
fullest extent permitted by law, any affiliate or subsidiary of the Agent or any
of the Lenders and any holder of a participation in any obligation of any
Guarantor under this Guaranty, shall have the same rights of setoff as the Agent
and the Lenders as provided in this Section (regardless of whether such
affiliate or participant otherwise would be deemed a creditor of the Guarantor).

(b) Upon the occurrence and during the continuation of any default under any
Guarantied Obligation beyond any applicable cure or grace period, if any amount
shall be paid to any Guarantor by or for the account of Borrower, such amount
shall be held in trust for the benefit of each Lender and Agent and shall
forthwith be paid to the Agent to be credited and applied to the Guarantied
Obligations when due and payable.

 

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

13. Construction. The sections and other headings contained in this Guaranty are
for reference purposes only and shall not affect interpretation of this Guaranty
in any respect. This Guaranty has been fully negotiated between the applicable
parties, each party having the benefit of legal counsel, and accordingly neither
any doctrine of construction of guaranties or suretyships in favor of the
guarantor or surety, nor any doctrine of construction of ambiguities in
agreement or instruments against the party controlling the drafting thereof,
shall apply to this Guaranty.

14. Successors and Assigns. This Guaranty shall be binding upon each Guarantor,
its successors and assigns, and shall inure to the benefit of and be enforceable
by the Agent and the Lenders, or any of them, and their successors and permitted
assigns provided, however, that no Guarantor may assign or transfer any of its
rights or obligations hereunder or any interest herein and any such purported
assignment or transfer shall be null and void. Without limitation of the
foregoing, the Agent and the Lenders, or any of them (and any successive
assignee or transferee), from time to time may assign or otherwise transfer all
or any portion of its rights or obligations under the Loan Documents (including
all or any portion of any commitment to extend credit), or any other Guarantied
Obligations, to any other person and such Guarantied Obligations (including any
Guarantied Obligations resulting from extension of credit by such other Person
under or in connection with the Loan Documents) shall be and remain Guarantied
Obligations entitled to the benefit of this Guaranty, and to the extent of its
interest in such Guarantied Obligations such other Person shall be vested with
all the benefits in respect thereof granted to the Agent and the Lenders in this
Guaranty or otherwise.

15. Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.

(a) Governing Law. This Guaranty shall be governed by, construed, and enforced
in accordance with the internal laws of the State of New York, without regard to
conflict of laws principles.

(b) Certain Waivers. Each Guarantor hereby irrevocably:

(i) Certain Waivers; Submission to Jurisdiction. EACH GUARANTOR HEREBY
IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE
NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE COMMONWEALTH OF PENNSYLVANIA
SITTING IN PHILADELPHIA COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE
EASTERN DISTRICT OF PENNSYLVANIA, AND ANY APPELLATE COURT FROM ANY THEREOF, IN
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY OR ANY
OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH
GUARANTOR IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF
ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH PENNSYLVANIA
STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH
FEDERAL COURT. EACH GUARANTOR AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE

 

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

JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN
ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE AGENT, ANY LENDER OR THE
ISSUING LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO
THIS GUARANTY OR ANY OTHER LOAN DOCUMENT AGAINST ANY GUARANTOR OR ANY OTHER LOAN
PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION. EACH GUARANTOR WAIVES
PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH
SERVICE OF PROCESS BE MADE BY CERTIFIED OR REGISTERED MAIL DIRECTED TO THE
BORROWER AT THE ADDRESS PROVIDED IN THE CREDIT AGREEMENT AND SERVICE SO MADE
SHALL BE DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT THEREOF. EACH GUARANTOR
WAIVES ANY OBJECTION TO JURISDICTION AND VENUE OF ANY ACTION INSTITUTED AGAINST
IT AS PROVIDED HEREIN AND AGREES NOT TO ASSERT ANY DEFENSE BASED ON LACK OF
JURISDICTION OR VENUE.

(ii) Waives any objection to jurisdiction and venue of any action instituted
against it as provided herein and agrees not to assert any defense based on lack
of jurisdiction or venue; and

(iii) WAIVES TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING, OR COUNTERCLAIM OF
ANY KIND ARISING OUT OF OR RELATED TO THIS GUARANTY, THE CREDIT AGREEMENT, OR
ANY OTHER LOAN DOCUMENT TO THE FULLEST EXTENT PERMITTED BY LAW.

16. Severability; Modification to Conform to Law.

(a) It is the intention of the parties that this Guaranty be enforceable to the
fullest extent permissible under applicable law, but that the unenforceability
(or modification to conform to such law) of any provision or provisions hereof
shall not render unenforceable, or impair, the remainder hereof. If any
provision in this Guaranty shall be held invalid or unenforceable in whole or in
part in any jurisdiction, this Guaranty shall, as to such jurisdiction, be
deemed amended to modify or delete, as necessary, the offending provision or
provisions and to alter the bounds thereof in order to render it or them valid
and enforceable to the maximum extent permitted by applicable law, without in
any manner affecting the validity or enforceability of such provision or
provisions in any other jurisdiction or the remaining provisions hereof in any
jurisdiction.

(b) Without limitation of the preceding subsection (a), to the extent that
applicable law (including applicable laws pertaining to fraudulent conveyance or
fraudulent or preferential transfer) otherwise would render the full amount of
the Guarantor’s obligations hereunder invalid, voidable, or unenforceable on
account of the amount of a Guarantor’s aggregate liability under this Guaranty,
then, notwithstanding any other provision of this Guaranty to the contrary, the
aggregate amount of such liability shall, without any further action by the
Agent or any of the Lenders or such Guarantor or any other Person, be
automatically limited and reduced to the highest amount which is valid and
enforceable as determined in such action or proceeding, which (without limiting
the generality of the foregoing) may be an amount which is equal to the greater
of:

 

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

(i) the fair consideration actually received by such Guarantor under the terms
and as a result of the Loan Documents and the value of the benefits described in
Section 16(b) hereof, including (and to the extent not inconsistent with
applicable federal and state laws affecting the enforceability of guaranties)
distributions, commitments, and advances made to or for the benefit of such
Guarantor with the proceeds of any credit extended under the Loan Documents, or

(ii) the excess of (1) the amount of the fair value of the assets of such
Guarantor as of the date of this Guaranty as determined in accordance with
applicable federal and state laws governing determinations of the insolvency of
debtors as in effect on the date hereof, over (2) the amount of all liabilities
of such Guarantor as of the date of this Guaranty, also as determined on the
basis of applicable federal and state laws governing the insolvency of debtors
as in effect on the date hereof.

(c) Notwithstanding anything to the contrary in this Section or elsewhere in
this Guaranty, this Guaranty shall be presumptively valid and enforceable to its
full extent in accordance with its terms, as if this Section (and references
elsewhere in this Guaranty to enforceability to the fullest extent permitted by
law) were not a part of this Guaranty, and in any related litigation the burden
of proof shall be on the party asserting the invalidity or unenforceability of
any provision hereof or asserting any limitation on any Guarantor’s obligations
hereunder as to each element of such assertion.

17. Additional Guarantors. At any time after the initial execution and delivery
of this Guaranty to the Agent and the Lenders, additional Persons may become
parties to this Guaranty and thereby acquire the duties and rights of being
Guarantors hereunder by executing and delivering to the Agent and the Lenders a
Guarantor Joinder and Assumption Agreement pursuant to the Credit Agreement. No
notice of the addition of any Guarantor shall be required to be given to any
pre-existing Guarantor and each Guarantor hereby consents thereto and each
pre-existing Guarantor’s obligations shall continue hereunder undiminished.

18. Joint and Several Obligations. The obligations and additional liabilities of
the Guarantors under this Agreement are joint and several obligations of the
Guarantors, and each Guarantor hereby waives to the full extent permitted by law
any defense it may otherwise have to the payment and performance of the
Obligations that its liability hereunder is limited and not joint and several.
Each Guarantor acknowledges and agrees that the foregoing waivers and those set
forth below serve as a material inducement to the agreement of the Agent and the
Lenders to make the Loans, and that the Agent and the Lenders are relying on
each specific waiver and all such waivers in entering into this Guaranty. The
undertakings of each Guarantor hereunder secure the obligations of itself and
the other Guarantors. The Agent and the Lenders, or any of them, may, in their
sole discretion, elect to enforce this Guaranty against any Guarantor without
any duty or responsibility to pursue any other Guarantor and such an election by
the Agent and the Lenders, or any of them, shall not be a defense to any action
the Agent and the Lenders, or any of them, may elect to take against any
Guarantor. Each of the Lenders and Agent hereby reserve all rights against each
Guarantor.

 

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

19. Receipt of Credit Agreement, Other Loan Documents, Benefits.

(a) Each Guarantor hereby acknowledges that it has received a copy of the Credit
Agreement and the other Loan Documents and each Guarantor certifies that the
representations and warranties made therein with respect to such Guarantor are
true and correct. Further, each Guarantor acknowledges and agrees to perform,
comply with, and be bound by all of the applicable provisions of the Credit
Agreement and the other Loan Documents.

(b) Each Guarantor hereby acknowledges, represents, and warrants that it
receives synergistic benefits by virtue of its affiliation with Borrower and the
other Guarantors and that it will receive direct and indirect benefits from the
financing arrangements contemplated by the Credit Agreement and that such
benefits, together with the rights of contribution and subrogation that may
arise in connection herewith are a reasonably equivalent exchange of value in
return for providing this Guaranty.

20. Miscellaneous. (a) Generality of Certain Terms. As used in this Guaranty,
the terms “hereof,” “herein,” and terms of similar import refer to this Guaranty
as a whole and not to any particular term or provision; the term “including,” as
used herein, is not a term of limitation and means “including without
limitation.” (b) Amendments, Waivers. No amendment to or waiver of any provision
of this Guaranty, and no consent to any departure by any Guarantor herefrom,
shall in any event be effective unless in a writing manually signed by or on
behalf of the Agent and the Lenders. Any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given. No delay or failure of the Agent or the Lenders, or any of them, in
exercising any right or remedy under this Guaranty shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right or remedy
preclude any other or further exercise thereof or the exercise of any other
right or remedy. The rights and remedies of the Agent and the Lenders under this
Guaranty are cumulative and not exclusive of any other rights or remedies
available hereunder, under any other agreement or instrument, by law, or
otherwise. (c) Telecommunications. Each Lender and Agent shall be entitled to
rely on the authority of any individual making any telecopy or telephonic
notice, request, or signature without the necessity of receipt of any
verification thereof. (d) Expenses. Each Guarantor unconditionally agrees to pay
all costs and expenses, including reasonable attorney’s fees incurred by the
Agent or any of the Lenders in enforcing this Guaranty against any Guarantor and
each Guarantor shall pay and indemnify each Lender and Agent for, and hold it
harmless from and against, any and all obligations, liabilities, losses,
damages, costs, expenses (including disbursements and reasonable legal fees of
counsel to any Lender or Agent), penalties, judgments, suits, actions, claims,
and disbursements imposed on, asserted against, or incurred by any Lender or
Agent (A) relating to the preparation, negotiation, execution, administration,
or enforcement of or collection under this Guaranty or any document, instrument,
or agreement relating to any of the Obligations, including in any bankruptcy,
insolvency, or similar proceeding in any jurisdiction or political subdivision
thereof; (B) relating to any amendment, modification, waiver, or consent
hereunder or relating to any telecopy or telephonic transmission purporting to
be by any Guarantor or Borrower; (C) in any way relating to or arising out of
this Guaranty, or

 

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

any document, instrument, or agreement relating to any of the Guarantied
Obligations, or any action taken or omitted to be taken by any Lender or Agent
hereunder, and including those arising directly or indirectly from the violation
or asserted violation by any Guarantor or Borrower or Agent or any Lender of any
law, rule, regulation, judgment, order, or the like of any jurisdiction or
political subdivision thereof (including those relating to environmental
protection, health, labor, importing, exporting, or safety) and regardless of
whether asserted by any governmental entity or any other Person. (e) Prior
Understandings. This Guaranty and the Credit Agreement constitute the entire
agreement of the parties hereto with respect to the subject matter hereof and
supersede any and all other prior and contemporaneous understandings and
agreements. (f) Survival. All representations and warranties of the Guarantors
made in connection with this Guaranty shall survive, and shall not be waived by,
the execution and delivery of this Guaranty, any investigation by or knowledge
of the Agent and the Lenders, or any of them, any extension of credit, or any
other event or circumstance whatsoever.

[SIGNATURE PAGE FOLLOWS]

 

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

[SIGNATURE PAGE 1 OF 2 OF CONTINUING AGREEMENT

OF GUARANTY AND SURETYSHIP]

IN WITNESS WHEREOF, each Guarantor intending to be legally bound, has executed
this Guaranty as of the date first above written with the intention that this
Guaranty shall constitute a sealed instrument.

 

SL POWER ELECTRONICS LTD.     By:                             
                                         
                                                (SEAL)  
Name:                                                                       
                                           Title:                            
                                         
                                              INDUSTRIAS SL, S.A. DE C.V.    
By:                                                                       
                                                (SEAL)  
Name:                                                                       
                                           Title:                            
                                         
                                              CONDOR POWER SUPPLIES DE MEXICO,
S.A. DE C.V.     By:                             
                                         
                                                (SEAL)  
Name:                                                                       
                                           Title:                            
                                         
                                              SL XIANGHE POWER ELECTRONICS CORP.
    By:                                                                       
                                                (SEAL)  
Name:                                                                       
                                           Title:                            
                                         
                                              SL SHANGHAI POWER ELECTRONICS
CORP.     By:                             
                                         
                                                (SEAL)  
Name:                                                                       
                                           Title:                            
                                         
                                              SL SHANGHAI INTERNATIONAL TRADING
CORP.     By:                             
                                         
                                                (SEAL)  
Name:                                                                       
                                           Title:                            
                                         
                                             

 

 

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

[SIGNATURE PAGE 2 OF 2 OF CONTINUING AGREEMENT

OF GUARANTY AND SURETYSHIP]

 

CEDRO DE MEXICO, S.A. DE C.V.     By:                             
                                         
                                                (SEAL)  
Name:                                                                       
                                           Title:                            
                                         
                                              TPE DE MEXICO, S. DE R.L. DE C.V.
    By:                                                                       
                                                (SEAL)  
Name:                                                                       
                                           Title:                            
                                         
                                             

 

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

EXHIBIT 1.1(I)(2)

INTERCOMPANY SUBORDINATION AGREEMENT

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

EXHIBIT 1.1(I)(2)

FORM OF

INTERCOMPANY SUBORDINATION AGREEMENT

THIS INTERCOMPANY SUBORDINATION AGREEMENT is dated as of             , 2012 and
is made by and among the entities listed on the signature page hereto and each
Person who hereafter becomes a Guarantor under the Credit Agreement (defined
below) (subsequently joining this agreement) (each being individually referred
to herein as a “Company” and collectively as the “Companies”).

WITNESSETH THAT:

WHEREAS, each capitalized term used herein shall, unless otherwise defined
herein, have the meaning specified in that certain Credit Agreement dated as of
even date herewith (as it may be hereafter amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”) by and among SL
Industries, Inc., a New Jersey corporation, SL Power Electronics Corporation, a
Delaware corporation, SL Montevideo Technology, Inc., a Minnesota corporation,
RFL Electronics Inc., a Delaware corporation, Teal Electronics Corporation, a
California corporation, MTE Corporation, a Wisconsin corporation, SL Delaware,
Inc., a Delaware corporation, SL Delaware Holdings, Inc., a Delaware
corporation, Cedar Corporation, a Nevada corporation, Mex Holdings LLC, a
Delaware limited liability company, SLGC Holdings, Inc., a Delaware corporation
and SL Surface Technologies, Inc., a New Jersey corporation (collectively, the
“Borrower”), the Guarantors now or hereafter party thereto, the Lenders now or
hereafter party thereto (the “Lenders”) and PNC Bank, National Association, as
agent (the “Agent”) for the Lenders; and

WHEREAS, pursuant to the Credit Agreement and the other Loan Documents referred
to and defined in the Credit Agreement, the Lenders intend to make Loans to the
Borrower; and

WHEREAS, the Companies are or may become indebted to each other (the
Indebtedness of each of the Companies to any other Company, now existing or
hereafter incurred (whether created directly or acquired by assignment or
otherwise), and interest and premiums, if any, thereon and other amounts payable
in respect thereof are hereinafter collectively referred to as the “Intercompany
Indebtedness”); and

WHEREAS, the obligations of the Lenders to maintain the Commitments and make
Loans to the Borrower from time to time are subject to the condition, among
others, that the Companies subordinate the Intercompany Indebtedness to the
Obligations of the Borrower or any other Company to the Agent or the Lenders
pursuant to the Credit Agreement, the other Loan Documents or any
Lender-Provided Interest Rate Hedge (collectively, the “Senior Debt”) in the
manner set forth herein.

NOW, THEREFORE, intending to be legally bound hereby, the parties hereto
covenant and agree as follows:

1. Intercompany Indebtedness subordinated to Senior Debt. The recitals set forth
above are hereby incorporated by reference. All Intercompany Indebtedness shall
be subordinate and subject in right of payment to the prior indefeasible payment
in full of all Senior Debt pursuant to the provisions contained herein.

 

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

2. Payment Over of Proceeds Upon Dissolution, Etc. Upon any distribution of
assets of any Company in the event of (a) any insolvency or bankruptcy case or
proceeding, or any receivership, liquidation, reorganization or other similar
case or proceeding in connection therewith, relative to any such Company or to
its creditors, as such, or to its assets, or (b) any liquidation, dissolution or
other winding up of any such Company, whether voluntary or involuntary and
whether or not involving insolvency or bankruptcy, or (c) any assignment for the
benefit of creditors or any marshalling of assets and liabilities of any such
Company (a Company distributing assets as set forth herein being referred to in
such capacity as a “Distributing Company”), then and in any such event, the
Agent shall be entitled to receive, for the benefit of the Agent and the Lenders
as their respective interests may appear, indefeasible payment in full of all
amounts due or to become due (whether or not an Event of Default has occurred
under the terms of the Loan Documents or the Senior Debt has been declared due
and payable prior to the date on which it would otherwise have become due and
payable) on or in respect of any and all Senior Debt before the holder of any
Intercompany Indebtedness owed by the Distributing Company is entitled to
receive any payment on account of the principal of or interest on such
Intercompany Indebtedness, and to that end, the Agent shall be entitled to
receive, for application to the payment of the Senior Debt, any payment or
distribution of any kind or character, whether in cash, property or securities,
which may be payable or deliverable in respect of the Intercompany Indebtedness
owed by the Distributing Company in any such case, proceeding, dissolution,
liquidation or other winding up event.

3. No Commencement of Any Proceeding. Each Company agrees that, so long as the
Senior Debt shall remain unpaid, it will not commence, or join with any creditor
other than the Lenders and the Agent in commencing, any proceeding referred to
in Section 2 hereof against any other Company which owes it any Intercompany
Indebtedness.

4. Prior Payment of Senior Debt Upon Acceleration of Intercompany Indebtedness.
If any portion of the Intercompany Indebtedness owed by any Company becomes or
is declared due and payable before its stated maturity, then and in such event
the Agent and the Lenders shall be entitled to receive indefeasible payment in
full of all amounts due and to become due on or in respect of the Senior Debt
(whether or not an Event of Default has occurred under the terms of the Loan
Documents or the Senior Debt has been declared due and payable prior to the date
on which it would otherwise have become due and payable) before the holder of
any such Intercompany Indebtedness is entitled to receive any payment thereon.

5. No Payment When Senior Debt in Default. If any Event of Default shall have
occurred and be continuing, or such an Event of Default or Potential Default
would result from or exist after giving effect to a payment with respect to any
portion of the Intercompany Indebtedness, unless the Required Lenders shall have
consented to or waived the same, so long as any of the Senior Debt shall remain
outstanding, no payment shall be made by any Company owing such Intercompany
Indebtedness on account of principal or interest on any portion of the
Intercompany Indebtedness.

 

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

6. Payment Permitted if No Default. Nothing contained in this Agreement shall
prevent any of the Companies, at any time except during the pendency of any of
the conditions described in Sections 2, 4 and 5, from making payments at any
time of principal of or interest on any portion of the Intercompany
Indebtedness, or the retention thereof by any of the Companies of any money
deposited with them for the payment of or on account of the principal of or
interest on the Intercompany Indebtedness.

7. Receipt of Prohibited Payments. If, notwithstanding the foregoing provisions
of Sections 2, 4, 5 and 6, a Company which is owed Intercompany Indebtedness by
a Distributing Company shall have received any payment or distribution of assets
from the Distributing Company of any kind or character, whether in cash,
property or securities, then and in such event such payment or distribution
shall be held in trust for the benefit of the Agent and the Lenders as their
respective interests may appear, shall be segregated from other funds and
property held by such Company, and shall be forthwith paid over to the Agent in
the same form as so received (with any necessary endorsement) to be applied (in
the case of cash) to or held as collateral (in the case of noncash property or
securities) for the payment or prepayment of the Senior Debt in accordance with
the terms of the Credit Agreement.

8. Rights of Subrogation. Each Company agrees that no payment or distribution to
the Agent or the Lenders pursuant to the provisions of this Agreement shall
entitle it to exercise any rights of subrogation in respect thereof until the
Senior Debt shall have been indefeasibly paid in full and the Commitments shall
have terminated and the Letters of Credit have expired.

9. Instruments Evidencing Intercompany Indebtedness. Each Company shall cause
each instrument which now or hereafter evidences all or a portion of the
Intercompany Indebtedness to be conspicuously marked as follows:

“This instrument is subject to the terms of an Intercompany Subordination
Agreement dated as of             , 2012 in favor of PNC BANK, NATIONAL
ASSOCIATION, as Agent for the Lenders referred to therein, which Intercompany
Subordination Agreement is incorporated herein by reference. Notwithstanding any
contrary statement contained in the within instrument, no payment on account of
the principal thereof or interest thereon shall become due or payable except in
accordance with the express terms of said Intercompany Subordination Agreement.”

Each Company will further mark its books of account in such a manner as shall be
effective to give proper notice of the effect of this Agreement.

10. Agreement Solely to Define Relative Rights. The purpose of this Agreement is
solely to define the relative rights of the Companies, on the one hand, and the
Agent and the Lenders, on the other hand. Nothing contained in this Agreement is
intended to or shall impair, as between any of the Companies and their creditors
other than the Agent and the Lenders, the obligation of the Companies to each
other to pay the principal of and interest on the Intercompany Indebtedness as
and when the same shall become due and payable in accordance with its terms, or
is intended to or shall affect the relative rights among the Companies and their
creditors other than the Agent and the Lenders, nor shall anything herein
prevent any of the Companies from exercising all remedies otherwise permitted by
applicable Law upon default under any agreement pursuant to which the
Intercompany Indebtedness is created, subject to the rights, if any, under this
Agreement of the Agent and the Lenders to receive cash, property or securities
otherwise payable or deliverable with respect to the Intercompany Indebtedness.

 

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

11. No Implied Waivers of Subordination. No right of the Agent or any Lender to
enforce subordination, as herein provided, shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of any Company
or by any act or failure to act by the Agent or any Lender, or by any
non-compliance by any Company with the terms, provisions and covenants of any
agreement pursuant to which the Intercompany Indebtedness is created, regardless
of any knowledge thereof with which the Agent or any Lender may have or be
otherwise charged. Each Company by its acceptance hereof shall agree that, so
long as there is Senior Debt outstanding or Commitments in effect under the
Credit Agreement, such Company shall not agree to sell, assign, pledge, encumber
or otherwise dispose of, or agree to compromise, the obligations of the other
Companies with respect to their Intercompany Indebtedness, other than by means
of payment of such Intercompany Indebtedness according to its terms, without the
prior written consent of the Agent.

Without in any way limiting the generality of the foregoing paragraph, the Agent
or any of the Lenders may, at any time and from time to time, without the
consent of or notice to the Companies, without incurring responsibility to the
Companies and without impairing or releasing the subordination provided in this
Agreement or the obligations hereunder of the Companies to the Agent and the
Lenders, do any one or more of the following: (i) change the manner, place or
terms of payment, or extend the time of payment, renew or alter the Senior Debt
or otherwise amend or supplement the Senior Debt or the Loan Documents;
(ii) sell, exchange, release or otherwise deal with any property pledged,
mortgaged or otherwise securing the Senior Debt; (iii) release any person liable
in any manner for the payment or collection of the Senior Debt; and
(iv) exercise or refrain from exercising any rights against any of the Companies
and any other person.

12. Additional Subsidiaries. The Companies covenant and agree that they shall
cause Subsidiaries created or acquired after the date of this Agreement, and any
other Subsidiaries required to join this Agreement pursuant to Section 8.2.9
[Subsidiaries, Partnerships and Joint Ventures] or otherwise under the Credit
Agreement, to execute a Guarantor Joinder in substantially the form of
Exhibit 1.1(G)(1) to the Credit Agreement, whereby such Subsidiary joins this
Agreement and subordinates all Indebtedness owed to any such Subsidiary by any
of the Companies or other Subsidiaries hereafter created or acquired to the
Senior Debt.

13. Continuing Force and Effect. This Agreement shall continue in force for so
long as any portion of the Senior Debt remains unpaid and any Commitments or
Letters of Credit under the Credit Agreement remain outstanding, it being
contemplated that this Agreement be of a continuing nature.

14. Modification, Amendments or Waivers. Any and all agreements amending or
changing any provision of this Agreement or the rights of the Agent or the
Lenders hereunder, and any and all waivers or consents to Events of Default or
other departures from the due performance of the Companies hereunder, shall be
made only by written agreement, waiver or consent signed by the Agent, acting on
behalf of all the Lenders, with the written consent of the Required Lenders, any
such agreement, waiver or consent made with such written consent being effective
to bind all the Lenders.

 

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

15. Expenses. The Companies unconditionally and jointly and severally agree upon
demand to pay to the Agent and the Lenders the amount of any and all
out-of-pocket costs, expenses and disbursements, including reasonable fees and
expenses of counsel (including the allocated costs of staff counsel) for which
reimbursement is customarily obtained, which the Agent or any of the Lenders may
incur in connection with (a) the administration of this Agreement, (b) the
exercise or enforcement of any of the rights of the Agent or the Lenders
hereunder, or (c) the failure by the Companies to perform or observe any of the
provisions hereof.

16. Severability. The provisions of this Agreement are intended to be severable.
If any provision of this Agreement shall be held invalid or unenforceable in
whole or in part in any jurisdiction, such provision shall, as to such
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without in any manner affecting the validity or enforceability
thereof in any other jurisdiction or the remaining provisions hereof in any
jurisdiction.

17. Governing Law. This Agreement shall be a contract under the internal laws of
the State of New York and for all purposes shall be construed in accordance with
the internal laws of the State of New York without giving effect to its
principles of conflict of laws.

18. Successors and Assigns. This Agreement shall inure to the benefit of the
Agent and the Lenders and their respective successors and assigns, and the
obligations of the Companies shall be binding upon their respective successors
and permitted assigns, provided, that no company may assign or transfer its
rights or obligations hereunder or any interest herein and any such purported
assignment or transfer shall be null and void. The duties and obligations of the
Companies may not be delegated or transferred by the Companies without the
written consent of the Required Lenders and any such delegation or transfer
without such consent shall be null and void. Except to the extent otherwise
required by the context of this Agreement, the word “Lenders” when used herein
shall include, without limitation, any holder of a Note or an assignment of
rights therein originally issued to a Lender under the Credit Agreement, and
each such holder of a Note or assignment shall have the benefits of this
Agreement to the same extent as if such holder had originally been a Lender
under the Credit Agreement.

19. Joint and Several Obligations. Each of the obligations of each and every
Company under this Agreement is joint and several. The Agent and the Lenders, or
any of them, may, in their sole discretion, elect to enforce this Agreement
against any Company without any duty or responsibility to pursue any other
Company and such an election by the Agent and the Lenders, or any of them, shall
not be a defense to any action the Agent and the Lenders, or any of them, may
elect to take against any Company. Each of the Lenders and Agent hereby reserve
all right against each Company.

20. Counterparts. This Agreement may be executed in any number of counterparts
and by the different parties hereto on separate counterparts, each of which,
when executed and delivered, shall be deemed an original, but all such
counterparts shall constitute but one and the same instrument.

 

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

21. Attorneys-in-Fact. Each of the Companies hereby authorizes and empowers the
Agent, at its election and in the name of either itself, for the benefit of the
Agent and the Lenders as their respective interests may appear, or in the name
of each such Company as is owed Intercompany Indebtedness, to execute and file
proofs and documents and take any other action the Agent may deem advisable to
completely protect the Agent’s and the Lenders’ interests in the Intercompany
Indebtedness and their right of enforcement thereof, and to that end each of the
Companies hereby irrevocably makes, constitutes and appoints the Agent, its
officers, employees and agents, or any of them, with full power of substitution,
as the true and lawful attorney-in-fact and agent of such Company, and with full
power for such Company, and in the name, place and stead of such Company for the
purpose of carrying out the provisions of this Agreement, and taking any action
and executing, delivering, filing and recording any instruments which the Agent
may deem necessary or advisable to accomplish the purposes hereof, which power
of attorney, being given for security, is coupled with an interest and is
irrevocable. Each Company hereby ratifies and confirms, and agrees to ratify and
confirm, all action taken by the Agent, its officers, employees or agents
pursuant to the foregoing power of attorney.

22. Application of Payments. In the event any payments are received by the Agent
under the terms of this Agreement for application to the Senior Debt at any time
when the Senior Debt has not been declared due and payable and prior to the date
on which it would otherwise become due and payable, such payment shall
constitute a voluntary prepayment of the Senior Debt for all purposes under the
Credit Agreement.

23. Remedies. In the event of a breach by any of the Companies in the
performance of any of the terms of this Agreement, the Agent, on behalf of the
Lenders, may demand specific performance of this Agreement and seek injunctive
relief and may exercise any other remedy available at law or in equity, it being
recognized that the remedies of the Agent on behalf of the Lenders at law may
not fully compensate the Agent on behalf of the Lenders for the damages they may
suffer in the event of a breach hereof.

24. Consent to Jurisdiction; Waiver of Jury Trial. Each of the Companies hereby
irrevocably consents to the non-exclusive jurisdiction of the courts of the
Commonwealth of Pennsylvania sitting in Philadelphia County and of the United
States District Court of the Eastern District of Pennsylvania, and any appellate
court from any thereof, waives personal service of any and all process upon it
and consents that all such service of process be made by certified or registered
mail directed to the Companies at the addresses set forth or referred to in
Section 24 hereof and service so made shall be deemed to be completed upon
actual receipt thereof. Each of the Companies waives any objection to
jurisdiction and venue of any action instituted against it as provided herein
and agrees not to assert any defense based on lack of jurisdiction or venue, AND
EACH OF THE COMPANIES WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT TO THE FULL EXTENT PERMITTED BY LAW.

Each Company hereby agrees to receive service of copies of the summons and
complaint and any other process which may be served in any action or proceeding
by mail or delivery of a copy of such process to any of the Companies at the
Companies’ address. Each Company agrees that a final judgment in any such action
or proceeding shall be conclusive and may be enforced in other jurisdictions (or
any political subdivision thereof) by suit on the judgment or in any other
manner provided by law.

 

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

25. EXCEPT AS PROHIBITED BY LAW, EACH COMPANY, THE AGENT AND THE LENDERS HEREBY
WAIVE TRIAL BY A JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY
KIND ARISING OUT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE COLLATERAL
TO THE FULLEST EXTENT PERMITTED BY LAW.

26. Notices. All notices, statements, requests and demands and other
communications given to or made upon the Companies, the Agent or the Lenders in
accordance with the provisions of this Agreement shall be given or made as
provided in Section 11.5 [Notices; Effectiveness; Electronic Communications] of
the Credit Agreement.

27. Rules of Construction. The rules of construction set forth in Section 1.2
[Construction] of the Credit Agreement shall apply to this Agreement.

[SIGNATURES APPEAR ON THE FOLLOWING PAGE]

 

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

[SIGNATURE PAGE 1 OF 1 TO INTERCOMPANY SUBORDINATION AGREEMENT]

WITNESS the due execution hereof as of the day and year first above written.

BORROWER:

 

SL INDUSTRIES, INC. By:    

 

Name:    

 

Title:    

 

SL DELAWARE, INC. By:    

 

Name:    

 

Title:    

 

SL DELAWARE HOLDINGS, INC. By:    

 

Name:    

 

Title:    

 

TEAL ELECTRONICS CORPORATION By:    

 

Name:    

 

Title:    

 

RFL ELECTRONICS INC. By:    

 

Name:    

 

Title:    

 

SL MONTEVIDEO TECHNOLOGY, INC. By:    

 

Name:    

 

Title:    

 

SL SURFACE TECHNOLOGIES, INC. By:    

 

Name:    

 

Title:    

 

 

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

CEDAR CORPORATION By:    

 

Name:    

 

Title:    

 

MTE CORPORATION By:    

 

Name:    

 

Title:    

 

MEX HOLDINGS LLC By:    

 

Name:    

 

Title:    

 

SL POWER ELECTRONICS COPORATION By:    

 

Name:    

 

Title:    

 

SLGC HOLDINGS, INC. By:    

 

Name:    

 

Title:    

 

GUARANTORS: SL POWER ELECTRONICS LTD. By:    

 

Name:    

 

Title:    

 

INDUSTRIAS SL, S.A. DE C.V. By:    

 

Name:    

 

Title:    

 

 

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

CONDOR POWER SUPPLIES DE MEXICO, S.A. DE C.V. By:    

 

Name:    

 

Title:    

 

SL XIANGHE POWER ELECTRONICS CORP. By:    

 

Name:    

 

Title:    

 

SL SHANGHAI POWER ELECTRONICS CORP. By:    

 

Name:    

 

Title:    

 

SL SHANGHAI INTERNATIONAL TRADING CORP. By:    

 

Name:    

 

Title:    

 

CEDRO DE MEXICO, S.A. DE C.V. By:    

 

Name:    

 

Title:    

 

TPE DE MEXICO, S. DE R.L. DE C.V. By:    

 

Name:    

 

Title:    

 

 

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

EXHIBIT 1.1(N)(1)

REVOLVING CREDIT NOTE

 

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

REVOLVING CREDIT NOTE

 

$40,000,000    Pittsburgh, Pennsylvania    August 9, 2012

FOR VALUE RECEIVED, the undersigned, SL INDUSTRIES, INC., a New Jersey
corporation and each of the entities listed as a Borrower on the signature pages
hereto (herein called the “Borrower”), hereby promises to pay to the order of
PNC BANK, NATIONAL ASSOCIATION (the “Lender”), the lesser of (i) the principal
sum of Forty Million Dollars (US$40,000,000), or (ii) the aggregate unpaid
principal balance of all Revolving Credit Loans made by the Lender to the
Borrower pursuant to the Credit Agreement, dated as of August 9, 2012, among the
Borrower, the Guarantors now or hereafter party thereto, the Lenders now or
hereafter party thereto, and PNC BANK, NATIONAL ASSOCIATION, as Administrative
Agent (hereinafter referred to in such capacity as the “Agent”) (as amended,
restated, modified, or supplemented from time to time, the “Credit Agreement”),
payable by 12:00 noon on the Expiration Date, together with interest on the
unpaid principal balance hereof from time to time outstanding from the date
hereof at the rate or rates per annum specified by the Borrower pursuant to, or
as otherwise provided in, the Credit Agreement.

Interest on the unpaid principal balance hereof from time to time outstanding
from the date hereof will be payable at the times provided for in the Credit
Agreement. Upon the occurrence and during the continuation of an Event of
Default, the Borrower shall pay interest on the entire principal amount of the
then outstanding Revolving Credit Loans evidenced by this Revolving Credit Note
(this “Note”) and all other obligations due and payable to the Lender pursuant
to the Credit Agreement and the other Loan Documents at a rate per annum as set
forth in Section 4.3 [Interest After Default] of the Credit Agreement. Such
interest rate will accrue before and after any judgment has been entered.

Subject to the provisions of the Credit Agreement, payments of both principal
and interest shall be made without setoff, counterclaim, or other deduction of
any nature at the office of the Agent located at Commercial Loan Operations,
P.O. Box 747046, Pittsburgh, Pennsylvania 15274-7046, unless otherwise directed
in writing by the holder hereof, in lawful money of the United States of America
in immediately available funds.

This Note is one of the revolving credit Notes referred to in, and is entitled
to the benefits of, the Credit Agreement and other Loan Documents, including the
representations, warranties, covenants, conditions, security interests, and
Liens contained or granted therein. The Credit Agreement among other things
contains provisions for acceleration of the maturity hereof upon the happening
of certain stated events and also for prepayment, in certain circumstances, on
account of principal hereof prior to maturity upon the terms and conditions
therein specified. The Borrower waives presentment, demand, notice, protest and
all other demands and notices in connection with the delivery, acceptance,
performance, default or enforcement of this Note and the Credit Agreement.

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

This Note shall bind the Borrower and its successors and assigns, and the
benefits hereof shall inure to the benefit of the Lender and its successors and
assigns. All references herein to the “Borrower” and the “Lender” shall be
deemed to apply to the Borrower and the Lender, respectively, and their
respective successors and assigns as permitted under the Credit Agreement.

This Note and any other documents delivered in connection herewith and the
rights and obligations of the parties hereto and thereto shall for all purposes
be governed by and construed and enforced in accordance with the internal laws
of the State of New York without giving effect to its conflicts of law
principles.

All capitalized terms used herein shall, unless otherwise defined herein, have
the same meanings given to such terms in the Credit Agreement.

[SIGNATURES APPEAR ON FOLLOWING PAGE]

 

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

IN WITNESS WHEREOF, and intending to be legally bound hereby, the undersigned
has executed this Note by its duly authorized officer with the intention that it
constitute a sealed instrument.

 

BORROWERS:     SL INDUSTRIES, INC.     By:         Name:       Title:      

SL DELAWARE, INC.

SL DELAWARE HOLDINGS, INC.

TEAL ELECTRONICS CORPORATION

RFL ELECTRONICS INC.

SL MONTEVIDEO TECHNOLOGY, INC.

SL SURFACE TECHNOLOGIES, INC.

CEDAR CORPORATION

MTE CORPORATION

MEX HOLDINGS LLC

SL POWER ELECTRONICS CORPORATION

SLGC HOLDINGS, INC.

    By:         Name:       Title:  

 

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

EXHIBIT 2.5

LENDER JOINDER

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

EXHIBIT 2.5

FORM OF

LENDER JOINDER AND ASSUMPTION AGREEMENT

This Lender Joinder and Assumption Agreement (the “Joinder”) is made as of
            , 20            (the “Effective Date”) by             , (the “New
Commitment Provider”).

Background

Reference is made to the Credit Agreement dated as of             , 2012 among
SL Industries, Inc., a New Jersey corporation, SL Power Electronics Corporation,
a Delaware corporation, SL Montevideo Technology, Inc., a Minnesota corporation,
RFL Electronics Inc., a Delaware corporation, Teal Electronics Corporation, a
California corporation, MTE Corporation, a Wisconsin corporation, SL Delaware,
Inc., a Delaware corporation, SL Delaware Holdings, Inc., a Delaware
corporation, Cedar Corporation, a Nevada corporation, Mex Holdings LLC, a
Delaware limited liability company, SLGC Holdings, Inc., a Delaware corporation
and SL Surface Technologies, Inc., a New Jersey corporation (collectively, the
“Borrower”), the Lenders now or hereafter party thereto and PNC BANK, NATIONAL
ASSOCIATION, as agent (the “Agent”) (as the same has been and may hereafter be
modified, supplemented, amended or restated the “Agreement”). Capitalized terms
defined in the Agreement are used herein as defined therein.

Agreement

In consideration of the Lenders’ permitting the New Commitment Provider to
become a Lender under the Agreement, the New Commitment Provider agrees that
effective as of the Effective Date it shall become, and shall be deemed to be, a
Lender under the Agreement and each of the other Loan Documents and agrees that
from the Effective Date and so long as the New Commitment Provider remains a
party to the Agreement, such New Commitment Provider shall assume the
obligations of a Lender under and perform, comply with and be bound by each of
the provisions of the Agreement which are stated to apply to a Lender and shall
be entitled to the benefits, rights and remedies set forth therein and in each
of the other Loan Documents. The New Commitment Provider hereby acknowledges
that it has heretofore received a true and correct copy of the Agreement
(including any modifications thereof or supplements or waivers thereto) as in
effect on the Effective Date and the executed original of its Note dated the
Effective Date issued by the Borrower under the Agreement in the face amount of
$            .

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

The Commitments and Ratable Shares of the New Commitment Provider and each of
the other Lenders are as set forth on Schedule 1.1(B) to the Agreement. Schedule
1.1(B) to the Agreement is being amended and restated effective as of the
Effective Date hereof to read as set forth on Schedule 1.1(B) hereto. Schedule 1
hereto lists as of the date hereof the amount of Loans under each outstanding
Borrowing Tranche. Notwithstanding the foregoing on the date hereof, the
Borrower shall repay all outstanding Loans to which either the Base Rate Option
or the LIBOR RateOption applies and simultaneously reborrow a like amount of
Loans under each such Interest Rate Option from the Lenders (including the New
Commitment Provider) according to the Ratable Shares set forth on attached
Schedule 1.1(B) and shall be subject to breakage fees and other indemnities
provided in Section 5.10 [Indemnity].

The New Commitment Provider is executing and delivering this Joinder as of the
Effective Date and acknowledges that it shall: (A) share ratably in all Loans
subject to the Base Rate Option borrowed by the Borrower on and after the
Effective Date; and (B) participate in all new Loans subject to the LIBOR Option
borrowed by the Borrower on and after the Effective Date according to its
Ratable Share.

[SIGNATURE PAGE FOLLOWS]

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

[SIGNATURE PAGE TO LENDER JOINDER AND ASSUMPTION AGREEMENT]

IN WITNESS WHEREOF, the New Commitment Provider has duly executed and delivered
this Joinder as of the Effective Date.

 

[NEW COMMITMENT PROVIDER] By:     Name:       Title:    

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

[ACKNOWLEDGEMENT TO LENDER JOINDER AND ASSUMPTION AGREEMENT]

 

ACKNOWLEDGED:

 

PNC BANK, NATIONAL ASSOCIATION,

as Agent

By:     Name:     Title:    

BORROWER:

 

SL INDUSTRIES, INC.

By:     Name:     Title:    

SL DELAWARE, INC.

By:     Name:     Title:    

SL DELAWARE HOLDINGS, INC.

By:     Name:     Title:    

TEAL ELECTRONICS CORPORATION

By:     Name:     Title:    

RFL ELECTRONICS INC.

By:     Name:     Title:    

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

SL MONTEVIDEO TECHNOLOGY, INC. By:     Name:     Title:    

SL SURFACE TECHNOLOGIES, INC.

By:     Name:     Title:    

CEDAR CORPORATION

By:     Name:     Title:    

MTE CORPORATION

By:     Name:     Title:    

MEX HOLDINGS LLC

By:     Name:     Title:    

 

SL POWER ELECTRONICS COPORATION

By:     Name:     Title:    

SLGC HOLDINGS, INC.

By:     Name:     Title:    

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

SCHEDULE 1.1(B)

COMMITMENTS OF LENDERS

Attached Schedule 1.1(B)

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

SCHEDULE 1

OUTSTANDING TRANCHES

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

EXHIBIT 2.5.1

LOAN REQUEST

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

EXHIBIT 2.5.1

FORM OF

LOAN REQUEST

 

TO:   

PNC Bank, National Association, as Agent

PNC Harborside

Commercial Loan Administration C3-C411-04-1

One East Pratt Street, 4th Floor W

Baltimore MD 21202

Telephone No.: 410-237-5283

Telecopier No.: 410-237-5256

Attention: Nancy Norris, Loan Support Analyst II, Baltimore Hub

FROM:   

 

RE:    Credit Agreement (as it may be amended, restated, modified or
supplemented, the “Agreement”) dated as of             , 2012 by and among SL
Industries, Inc., a New Jersey corporation, SL Power Electronics Corporation, a
Delaware corporation, SL Montevideo Technology, Inc., a Minnesota corporation,
RFL Electronics Inc., a Delaware corporation, Teal Electronics Corporation, a
California corporation, MTE Corporation, a Wisconsin corporation, SL Delaware,
Inc., a Delaware corporation, SL Delaware Holdings, Inc., a Delaware
corporation, Cedar Corporation, a Nevada corporation, Mex Holdings LLC, a
Delaware limited liability company, SLGC Holdings, Inc., a Delaware corporation
and SL Surface Technologies, Inc., a New Jersey corporation, the Guarantors
party thereto, the Lenders party thereto and PNC Bank, National Association, as
Agent for the Lenders (the “Agent”)

Capitalized terms not otherwise defined herein shall have the respective
meanings ascribed to them by the Agreement.

 

A. Pursuant to Section 2.5 of the Agreement, the undersigned Borrower
irrevocably requests [check one line under 1(a) below and fill in blank space
next to the line as appropriate]:

 

1.(a)    —    A new Revolving Credit Loan OR    —    Renewal of the LIBOR Rate
Option applicable to an outstanding Revolving Credit Loan OR

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

   —    Conversion of the Base Rate Option applicable to an outstanding
Revolving Credit Loan originally made on                     to a Loan to which
the LIBOR Rate Option applies, OR    —    Conversion of the LIBOR Rate Option
applicable to an outstanding Revolving Credit Loan originally made on
            ,         to a Loan to which the Base Rate Option applies.

SUCH NEW, RENEWED OR CONVERTED LOAN SHALL BEAR INTEREST:

[Check one line under 1(b) below and fill in blank spaces in line next to line]:

 

1.(b)(i)—    Under the Base Rate Option. Such Loan shall have a Borrowing Date
of             ,         (which date shall be (i) be the same Business Day as
the Business Day of receipt by the Agent by 10:00 a.m. of this Loan Request for
making a new Revolving Credit Loan to which the Base Rate Option applies, or
(ii) the last day of the preceding LIBOR Rate Interest Period if a Loan to which
the LIBOR Rate Option applies is being converted to a Loan to which the Base
Rate Option applies). OR (ii)—    Under the LIBOR Rate Option. Such Loan shall
have a Borrowing Date of                     (which date shall be (i) three
(3) Business Days subsequent to the Business Day of receipt by the Agent by
10:00 a.m. of this Loan Request for making a new Revolving Credit Loan to which
the LIBOR Rate Option applies, renewing a Loan to which the LIBOR Rate Option
applies, or converting a Loan to which the Base Rate Option applies to a Loan to
which the LIBOR Rate Option applies, or (ii) the same Business Day as the last
day of the preceding Interest Period if a Loan to which the LIBOR Rate Option
applies is being convert to a Loan to which the Base Rate Option applies). 2.   
Such Loan is in the principal amount of U.S. $            or the principal
amount to be renewed or converted is U.S. $             [ for Revolving Credit
Loans under Section 2.5 not to be less than $500,000 and in increments of
$100,000 if in excess of $500,000 for each Borrowing Tranche to which the LIBOR
Rate Option applies and not less than the lesser of $100,000 and in increments
of $10,000 if in excess of $100,000 for each Borrowing Tranche to which the Base
Rate Option applies] 3.   

[Complete blank below if the Borrower is selecting the LIBOR Rate Option]:

Such Loan shall have an Interest Period of one, two, three, or six Months.

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

B. As of the date hereof and the date of making of the above-requested Loan (and
after giving effect thereto): the Borrower has performed and complied with all
covenants and conditions of the Agreement; all of Borrower’s representations and
warranties therein are true and correct (except representations and warranties
which expressly relate solely to an earlier date or time, which representations
and warranties were true and correct on and as of the specific dates or times
referred to therein); no Event of Default or Potential Default has occurred and
is continuing or shall exist; and the making of such Loan shall not contravene
any Law applicable to the Borrower; the making of any Revolving Credit Loan
shall not cause the aggregate Revolving Facility Usage to exceed the Revolving
Credit Commitment.

[SIGNATURE PAGE FOLLOWS]

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

[SIGNATURE PAGE 1 OF 1 TO LOAN REQUEST]

The undersigned certifies to the Agent as to the accuracy of the foregoing.

Date:                     , 20         

 

SL INDUSTRIES, INC. By:    

 

Name:    

 

Title:    

 

SL DELAWARE, INC. By:    

 

Name:    

 

Title:    

 

SL DELAWARE HOLDINGS, INC. By:    

 

Name:    

 

Title:    

 

TEAL ELECTRONICS CORPORATION By:    

 

Name:    

 

Title:    

 

RFL ELECTRONICS INC. By:    

 

Name:    

 

Title:    

 

SL MONTEVIDEO TECHNOLOGY, INC. By:    

 

Name:    

 

Title:    

 

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

SL SURFACE TECHNOLOGIES, INC. By:    

 

Name:    

 

Title:    

 

CEDAR CORPORATION

By:    

 

Name:    

 

Title:    

 

MTE CORPORATION By:    

 

Name:    

 

Title:    

 

MEX HOLDINGS LLC By:    

 

Name:    

 

Title:    

 

SL POWER ELECTRONICS CORPORATION By:    

 

Name:    

 

Title:    

 

SLGC HOLDINGS, INC.

By:    

 

Name:    

 

Title:    

 

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

EXHIBIT 5.9.7(A)

[FORM OF]

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

Reference is hereby made to the Credit Agreement dated as of [            ] (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among [            ], and each lender from time to time party
thereto.

Pursuant to the provisions of Section 5.9 [Taxes] of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record and beneficial owner
of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of
which it is providing this certificate, (ii) it is not a bank within the meaning
of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder
of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and
(iv) it is not a controlled foreign corporation related to the Borrower as
described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Administrative Agent and the Borrower with a
certificate of its non-U.S. Person status on IRS Form W-8BEN. By executing this
certificate, the undersigned agrees that (1) if the information provided on this
certificate changes, the undersigned shall promptly so inform the Borrower and
the Administrative Agent, and (2) the undersigned shall have at all times
furnished the Borrower and the Administrative Agent with a properly completed
and currently effective certificate in either the calendar year in which each
payment is to be made to the undersigned, or in either of the two calendar years
preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

[NAME OF LENDER]

By:

     

Name:

Title:

Date:             , 20[     ]

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

EXHIBIT 5.9.7(B)

[FORM OF]

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

Reference is hereby made to the Credit Agreement dated as of [            ] (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among [            ], and each lender from time to time party
thereto.

Pursuant to the provisions of Section 5.9 [Taxes] of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record and beneficial owner
of the participation in respect of which it is providing this certificate,
(ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code,
(iii) it is not a ten percent shareholder of the Borrower within the meaning of
Section 871(h)(3)(B) of the Code, and (iv) it is not a controlled foreign
corporation related to the Borrower as described in Section 881(c)(3)(C) of the
Code].

The undersigned has furnished its participating Lender with a certificate of its
non-U.S. Person status on IRS Form W-8BEN. By executing this certificate, the
undersigned agrees that (1) if the information provided on this certificate
changes, the undersigned shall promptly so inform such Lender in writing, and
(2) the undersigned shall have at all times furnished such Lender with a
properly completed and currently effective certificate in either the calendar
year in which each payment is to be made to the undersigned, or in either of the
two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

[NAME OF PARTICIPANT]

By:

     

Name:

Title:

Date:             , 20[     ]

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

EXHIBIT 5.9.7(C)

[FORM OF]

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax
Purposes)

Reference is hereby made to the Credit Agreement dated as of [            ] (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among [            ], and each lender from time to time party
thereto.

Pursuant to the provisions of Section 5.9 [Taxes] of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record owner of the
participation in respect of which it is providing this certificate, (ii) its
direct or indirect partners/members are the sole beneficial owners of such
participation, (iii) with respect such participation, neither the undersigned
nor any of its direct or indirect partners/members is a bank extending credit
pursuant to a loan agreement entered into in the ordinary course of its trade or
business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of
its direct or indirect partners/members is a ten percent shareholder of the
Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of
its direct or indirect partners/members is a controlled foreign corporation
related to the Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished its participating Lender with IRS Form W-8IMY
accompanied by one of the following forms from each of its partners/members that
is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or (ii) an
IRS Form W-8IMY accompanied by an IRS Form W-8BEN from each of such
partner’s/member’s beneficial owners that is claiming the portfolio interest
exemption. By executing this certificate, the undersigned agrees that (1) if the
information provided on this certificate changes, the undersigned shall promptly
so inform such Lender and (2) the undersigned shall have at all times furnished
such Lender with a properly completed and currently effective certificate in
either the calendar year in which each payment is to be made to the undersigned,
or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

[NAME OF PARTICIPANT]

By:

     

Name:

Title:

Date:             , 20[     ]

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

EXHIBIT 5.9.7(D)

[FORM OF]

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to the Credit Agreement dated as of [            ] (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among [            ], and each lender from time to time party
thereto.

Pursuant to the provisions of Section 5.9 [Taxes] of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record owner of the Loan(s)
(as well as any Note(s) evidencing such Loan(s)) in respect of which it is
providing this certificate, (ii) its direct or indirect partners/members are the
sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such
Loan(s)), (iii) with respect to the extension of credit pursuant to this Credit
Agreement or any other Loan Document, neither the undersigned nor any of its
direct or indirect partners/members is a bank extending credit pursuant to a
loan agreement entered into in the ordinary course of its trade or business
within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct
or indirect partners/members is a ten percent shareholder of the Borrower within
the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or
indirect partners/members is a controlled foreign corporation related to the
Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Administrative Agent and the Borrower with IRS
Form W-8IMY accompanied by one of the following forms from each of its
partners/members that is claiming the portfolio interest exemption: (i) an IRS
Form W-8BEN or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN from
each of such partner’s/member’s beneficial owners that is claiming the portfolio
interest exemption. By executing this certificate, the undersigned agrees that
(1) if the information provided on this certificate changes, the undersigned
shall promptly so inform the Borrower and the Administrative Agent, and (2) the
undersigned shall have at all times furnished the Borrower and the
Administrative Agent with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to
the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

[NAME OF LENDER]

By:

     

Name:

Title:

Date:             , 20[    ]

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

EXHIBIT 8.3.3

QUARTERLY COMPLIANCE CERTIFICATE

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

PNC Bank, National Association, as

            Administrative Agent

Page 2

EXHIBIT 8.3.3

FORM OF

QUARTERLY COMPLIANCE CERTIFICATE

This certificate is delivered pursuant to Section 8.3.3 of that certain Credit
Agreement dated as of             , 20            (the “Credit Agreement”) by
and among SL Industries, Inc. and certain affiliated entities listed therein as
Borrowers (“Borrowers”), the Lenders from time to time party thereto (the
“Lenders”), the Guarantors from time to time party thereto (the “Guarantors” and
collectively with Borrowers, “Loan Parties”) and PNC Bank, National Association,
as Administrative Agent for the Lenders (the “Administrative Agent”). Unless
otherwise defined herein, terms defined in the Credit Agreement are used herein
with the same meanings.

The undersigned officer,             , the             [President/Chief
Executive Officer/Chief Financial Officer] of the Parent Borrower and the
[President/Chief Executive Officer/Chief Financial Officer/Secretary/Assistant
Secretary] of the Borrowers (other than Parent Borrower), does hereby certify as
of the quarter/year ended             , 20            (the “Report Date”), as
follows:

 

1. Indebtedness. [Section 8.2.1].

 

  (A) As of the Report Date, the aggregate amount of Indebtedness secured by
Purchase Money Security Interests incurred by each of the Loan Parties and each
of their respective Subsidiaries is $            , which amount is in compliance
with Section 8.2.1(iii) of the Credit Agreement.

 

  (B) As of the Report Date, each of the Loan Parties and each of their
respective Subsidiaries has entered into the following Interest Rate Hedges and
each of the following has been approved by the Administrative Agent:

 

 

 

 

 

 

 

  (C) As of the Report Date, the amount of other unsecured Indebtedness is
$            which does not exceed other amounts permitted by Section
8.2.1(vii).

 

2. Loans and Investments. [Section 8.2.4]. As of the Report Date, Loan Parties
are in compliance with Section 8.2.4 of the Credit Agreement.

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

PNC Bank, National Association, as

            Administrative Agent

Page 3

 

3. Capital Expenditures. [Section 8.2.14]. As of the Report Date, the aggregate
amount of payments made by each Loan Party and each of their Subsidiaries on
account of the purchase or lease of any assets which if purchased would
constitute fixed assets or which if leased would constitute a capitalized lease,
is $            , which amount does not exceed $7,000,000, as required by
Section 8.2.14 of the Credit Agreement.

 

4. Fixed Charge Coverage Ratio. [Section 8.2.15]. As of the Report Date, the
Fixed Charge Coverage Ratio is             , which is not less than the Fixed
Charge Coverage Ratio required to be maintained in Section 8.2.15 of the Credit
Agreement.

 

5. Leverage Ratio. [Section 8.2.16]. As of the Report Date, the Leverage Ratio
is             , which is not greater than 3.25: 1.0, as required by
Section 8.2.16 of the Credit Agreement.

 

6. Representations, Warranties and Covenants. The representations and warranties
contained in Section 6 of the Credit Agreement and in the other Loan Documents
are true and correct on and as of the date of this certificate with the same
effect as though such representations and warranties had been made on the date
hereof, and each of the Borrower and the other Loan Parties has performed and
complied with all covenants and conditions of the Credit Agreement and the other
Loan Documents.

 

7. Event of Default or Potential Default. No Event of Default or Potential
Default has occurred and is continuing or exists as of the date hereof.

[SIGNATURES FOLLOW]

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

PNC Bank, National Association, as

            Administrative Agent

Page 1

SIGNATURE PAGE 1 OF 1 TO

QUARTERLY COMPLIANCE CERTIFICATE

IN WITNESS WHEREOF, the undersigned has executed this Certificate this
            day of             , 20            .

 

SL INDUSTRIES, INC. By:     Name:     Title:      

SL DELAWARE, INC.

SL DELAWARE HOLDINGS, INC.

TEAL ELECTRONICS CORPORATION

RFL ELECTRONICS INC.

SL MONTEVIDEO TECHNOLOGY, INC.

SL SURFACE TECHNOLOGIES, INC.

CEDAR CORPORATION

MTE CORPORATION

MEX HOLDINGS LLC

SL POWER ELECTRONICS CORPORATION

SLGC HOLDINGS, INC.

By:     Name:     Title: