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CREDIT AGREEMENT
 
BY AND AMONG
 
WELLS FARGO CAPITAL FINANCE, LLC,
 
AS ADMINISTRATIVE AGENT, LEAD ARRANGER, BOOK RUNNER
 
THE LENDERS THAT ARE PARTIES HERETO
 
AS THE LENDERS, AND
 
Stillwater Mining Company
 
AS BORROWER

DATED AS OF DECEMBER 23, 2011

 

 
 

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TABLE OF CONTENTS

   
Page
     
1.
DEFINITIONS AND CONSTRUCTION
1
 
1.1
Definitions
1
 
1.2
Accounting Terms
1
 
1.3
Code
1
 
1.4
Construction
1
 
1.5
Time References
2
 
1.6
Schedules and Exhibits
2
       
2.
LOANS AND TERMS OF PAYMENT
2
 
2.1
Revolving Loans
2
 
2.2
[Intentionally Omitted.]
3
 
2.3
Borrowing Procedures and Settlements
3
 
2.4
Payments; Reductions of Commitments; Prepayments
9
 
2.5
Promise to Pay
12
 
2.6
Interest Rates and Letter of Credit Fee:  Rates, Payments, and Calculations
12
 
2.7
Crediting Payments
14
 
2.8
Designated Account
14
 
2.9
Maintenance of Loan Account; Statements of Obligations
14
 
2.10
Fees
14
 
2.11
Letters of Credit
15
 
2.12
LIBOR Option
20
 
2.13
Capital Requirements
22
 
2.14
Accordion
23
       
3.
CONDITIONS; TERM OF AGREEMENT
24
 
3.1
Conditions Precedent to the Initial Extension of Credit
24
 
3.2
Conditions Precedent to all Extensions of Credit
25
 
3.3
Maturity
25
 
3.4
Effect of Maturity
25
 
3.5
Early Termination by Borrower
25
 
3.6
Conditions Subsequent
25
       
4.
REPRESENTATIONS AND WARRANTIES
25
 
4.1
Due Organization and Qualification; Subsidiaries
26
 
4.2
Due Authorization; No Conflict
26
 
4.3
Governmental Consents
27
 
4.4
Binding Obligations; Perfected Liens
27
 
4.5
Title to Assets; No Encumbrances
27
 
4.6
Litigation
27
 
4.7
Compliance with Laws
28
 
4.8
Financial Statements; No Material Adverse Effect
28
 
4.9
Solvency; Fraudulent Transfers
28
 
4.10
Employee Benefits
28
 
4.11
Environmental Condition
28
 
4.12
Complete Disclosure
29

 
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TABLE OF CONTENTS
(continued)

     
Page
         
4.13
Patriot Act
29
 
4.14
Indebtedness
29
 
4.15
Payment of Taxes
29
 
4.16
Margin Stock
29
 
4.17
Governmental Regulation
30
 
4.18
OFAC
30
 
4.19
Employee and Labor Matters
30
 
4.20
Holdco as a Holding Company
30
 
4.21
Leases
30
 
4.22
Eligible Accounts
30
 
4.23
Eligible Inventory
31
 
4.24
Location of Inventory
31
 
4.25
Inventory Records
31
 
4.26
Material Contracts
31
 
4.27
Reclamation Obligations
31
 
4.28
Immaterial Subsidiaries
31
       
5.
AFFIRMATIVE COVENANTS
31
 
5.1
Financial Statements, Reports, Certificates
31
 
5.2
Collateral Reporting
32
 
5.3
Existence
32
 
5.4
Maintenance of Properties
32
 
5.5
Taxes
32
 
5.6
Insurance
32
 
5.7
Inspection
33
 
5.8
Compliance with Laws
33
 
5.9
Environmental
33
 
5.10
Disclosure Updates
33
 
5.11
Formation of Subsidiaries
33
 
5.12
Further Assurances
34
 
5.13
Lender Meetings
34
 
5.14
Location of Inventory
34
 
5.15
Material Contracts
34
       
6.
NEGATIVE COVENANTS
35
 
6.1
Indebtedness
35
 
6.2
Liens
35
 
6.3
Restrictions on Fundamental Changes
35
 
6.4
Disposal of Assets
35
 
6.5
Nature of Business
35
 
6.6
Prepayments and Amendments
36
 
6.7
Restricted Payments
36
 
6.8
Accounting Methods
37
 
6.9
Investments
37
 
6.10
Transactions with Affiliates
37
 
6.11
Use of Proceeds
37
 
6.12
Limitation on Issuance of Equity Interests
38

 
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TABLE OF CONTENTS
(continued)

     
Page
         
6.13
Inventory with Bailees
38
 
6.14
Holdco as a Holding Company
38
       
7.
FINANCIAL COVENANTS
38
 
7.1
Fixed Charge Coverage Ratio
38
 
7.2
Excess Availability
38
       
8.
EVENTS OF DEFAULT
38
 
8.1
Payments
38
 
8.2
Covenants
38
 
8.3
Judgments
39
 
8.4
Voluntary Bankruptcy, etc.
39
 
8.5
Involuntary Bankruptcy, etc.
39
 
8.6
Default Under Other Agreements.
39
 
8.7
Representations, etc.
39
 
8.8
Guaranty.
39
 
8.9
Security Documents.
39
 
8.10
Loan Documents.
40
 
8.11
Change in Control.
40
       
9.
RIGHTS AND REMEDIES
40
 
9.1
Rights and Remedies
40
 
9.2
Remedies Cumulative
40
       
10.
WAIVERS; INDEMNIFICATION
41
 
10.1
Demand; Protest; etc
41
 
10.2
The Lender Group’s Liability for Collateral
41
 
10.3
Indemnification
41
       
11.
NOTICES
42
       
12.
CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER; JUDICIAL REFERENCE PROVISION
42
       
13.
ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS
45
 
13.1
Assignments and Participations
45
 
13.2
Successors
48
       
14.
AMENDMENTS; WAIVERS
48
 
14.1
Amendments and Waivers
48
 
14.2
Replacement of Certain Lenders
49
 
14.3
No Waivers; Cumulative Remedies
50
       
15.
AGENT; THE LENDER GROUP
50
 
15.1
Appointment and Authorization of Agent
50
 
15.2
Delegation of Duties
51
 
15.3
Liability of Agent
51
 
15.4
Reliance by Agent
51
 
15.5
Notice of Default or Event of Default
51

 
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TABLE OF CONTENTS
(continued)

     
Page
                 
15.6
Credit Decision
52
 
15.7
Costs and Expenses; Indemnification
52
 
15.8
Agent in Individual Capacity
53
 
15.9
Successor Agent
53
 
15.10
Lender in Individual Capacity
53
 
15.11
Collateral Matters
54
 
15.12
Restrictions on Actions by Lenders; Sharing of Payments
55
 
15.13
Agency for Perfection
55
 
15.14
Payments by Agent to the Lenders
56
 
15.15
Concerning the Collateral and Related Loan Documents
56
 
15.16
Field Examination Reports; Confidentiality; Disclaimers by Lenders; Other
Reports and Information
56
 
15.17
Several Obligations; No Liability
57
 
15.18
Lead Arranger and Book Runner
57
       
16.
WITHHOLDING TAXES
57
 
16.1
Payments
57
 
16.2
Exemptions
58
 
16.3
Reductions
59
 
16.4
Refunds
59
       
17.
GENERAL PROVISIONS
60
 
17.1
Effectiveness
60
 
17.2
Section Headings
60
 
17.3
Interpretation
60
 
17.4
Severability of Provisions
60
 
17.5
Bank Product Providers
60
 
17.6
Debtor-Creditor Relationship
60
 
17.7
Counterparts; Electronic Execution
61
 
17.8
Revival and Reinstatement of Obligations; Certain Waivers
61
 
17.9
Confidentiality
61
 
17.10
Survival
62
 
17.11
Patriot Act
63
 
17.12
Integration
63

 
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EXHIBITS AND SCHEDULES
 
Exhibit A-1
Form of Assignment and Acceptance
Exhibit B-1
Form of Borrowing Base Certificate
Exhibit C-1
Form of Compliance Certificate
Exhibit L-1
Form of LIBOR Notice
Exhibit P-1
Form of Perfection Certificate
   
Schedule A-1
Agent’s Account
Schedule A-2
Authorized Persons
Schedule B-1
Designated Bailees
Schedule C-1
Commitments
Schedule D-1
Designated Account
Schedule P-1
Permitted Investments
Schedule P-2
Permitted Liens
Schedule R-1
Refining Agreements
Schedule 1.1
Definitions
Schedule 3.1
Conditions Precedent
Schedule 3.6
Conditions Subsequent
Schedule 4.1(b)
Capitalization of Borrower
Schedule 4.1(c)
Capitalization of Borrower’s Subsidiaries
Schedule 4.6
Litigation
Schedule 4.7
Notices Related to Mine Safety
Schedule 4.11
Environmental Matters
Schedule 4.14
Permitted Indebtedness
Schedule 4.24
Location of Inventory
Schedule 5.1
Financial Statements, Reports, Certificates
Schedule 5.2
Collateral Reporting
Schedule 6.5
Nature of Business
Schedule 6.10(g)
Transactions with Affiliates

 

 
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CREDIT AGREEMENT

THIS CREDIT AGREEMENT (this “Agreement”), is entered into as of December 23,
2011, by and among the lenders identified on the signature pages hereof (each of
such lenders, together with its successors and permitted assigns, is referred to
hereinafter as a “Lender”, as that term is hereinafter further defined), WELLS
FARGO CAPITAL FINANCE, LLC, a Delaware limited liability company, as
administrative agent for the Lenders (in such capacity, together with its
successors and assigns in such capacity, “Agent”), WELLS FARGO CAPITAL FINANCE,
LLC, a Delaware limited liability company, as lead arranger (in such capacity,
together with its successors and assigns in such capacity, the “Lead Arranger”),
WELLS FARGO CAPITAL FINANCE, LLC, a Delaware limited liability company, as book
runner (in such capacity, together with its successors and assigns in such
capacity, the “Book Runner”), and STILLWATER MINING COMPANY, a Delaware
corporation (“Borrower”).
 
The parties agree as follows:
 
1.         DEFINITIONS AND CONSTRUCTION.
 
1.1         Definitions.  Capitalized terms used in this Agreement shall have
the meanings specified therefor on Schedule 1.1.
 
1.2         Accounting Terms.  All accounting terms not specifically defined
herein shall be construed in accordance with GAAP; provided, that if Borrower
notifies Agent that Borrower requests an amendment to any provision hereof to
eliminate the effect of any Accounting Change occurring after the Closing Date
or in the application thereof on the operation of such provision (or if Agent
notifies Borrower that the Required Lenders request an amendment to any
provision hereof for such purpose), regardless of whether any such notice is
given before or after such Accounting Change or in the application thereof, then
Agent and Borrower agree that they will negotiate in good faith amendments to
the provisions of this Agreement that are directly affected by such Accounting
Change with the intent of having the respective positions of the Lenders and
Borrower after such Accounting Change conform as nearly as possible to their
respective positions as of the date of this Agreement and, until any such
amendments have been agreed upon and agreed to by the Required Lenders, the
provisions in this Agreement shall be calculated as if no such Accounting Change
had occurred.  When used herein, the term “financial statements” shall include
the notes and schedules thereto.  Whenever the term “Borrower” is used in
respect of a financial covenant or a related definition, it shall be understood
to mean Borrower and its Subsidiaries on a consolidated basis, unless the
context clearly requires otherwise.  Notwithstanding anything to the contrary
contained herein, (a) all financial statements delivered hereunder shall be
prepared, and the financial covenant contained herein shall be calculated,
without giving effect to any election under the Statement of Financial
Accounting Standards No. 159  (or any similar accounting principle) permitting a
Person to value its financial liabilities or Indebtedness at the fair value
thereof, and (b) the term “unqualified opinion” as used herein to refer to
opinions or reports provided by accountants shall mean an opinion or report that
is (i) unqualified, and (ii) does not include any explanation, supplemental
comment, or other comment concerning the ability of the applicable Person to
continue as a going concern or concerning the scope of the audit.
 
1.3         Code.  Any terms used in this Agreement that are defined in the Code
shall be construed and defined as set forth in the Code unless otherwise defined
herein; provided, that to the extent that the Code is used to define any term
herein and such term is defined differently in different Articles of the Code,
the definition of such term contained in Article 9 of the Code shall govern.
 
1.4         Construction.  Unless the context of this Agreement or any other
Loan Document clearly requires otherwise, references to the plural include the
singular, references to the singular include the plural, the terms “includes”
and  “including” are not limiting, and the term “or” has, except where otherwise
indicated, the inclusive meaning represented by the phrase “and/or.”  The words
“hereof,” “herein,” “hereby,” “hereunder,” and similar
 

 
 

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terms in this Agreement or any other Loan Document refer to this Agreement or
such other Loan Document, as the case may be, as a whole and not to any
particular provision of this Agreement or such other Loan Document, as the case
may be.  Section, subsection, clause, schedule, and exhibit references herein
are to this Agreement unless otherwise specified.  Any reference in this
Agreement or in any other Loan Document to any agreement, instrument, or
document shall include all alterations, amendments, changes, extensions,
modifications, renewals, replacements, substitutions, joinders, and supplements,
thereto and thereof, as applicable (subject to any restrictions on such
alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements set forth herein).  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.  Any reference herein or in any other Loan Document to the
satisfaction, repayment, or payment in full of the Obligations shall mean (a)
the payment or repayment in full in immediately available funds of (i) the
principal amount of, and interest accrued and unpaid with respect to, all
outstanding Loans, together with the payment of any premium applicable to the
repayment of the Loans, (ii) all Lender Group Expenses that have accrued and are
unpaid regardless of whether demand has been made therefor, (iii) all fees or
charges that have accrued hereunder or under any other Loan Document (including
the Letter of Credit Fee and the Unused Line Fee) and are unpaid, (b) in the
case of contingent reimbursement obligations with respect to Letters of Credit,
providing Letter of Credit Collateralization, (c) in the case of obligations
with respect to Bank Products (other than Hedge Obligations), providing Bank
Product Collateralization, (d) the receipt by Agent of cash collateral in order
to secure any other contingent Obligations for which a claim or demand for
payment has been made on or prior to such time or in respect of matters or
circumstances known to Agent or a Lender at such time that are reasonably
expected to result in any loss, cost, damage, or expense (including attorneys
fees and legal expenses), such cash collateral to be in such amount as Agent
reasonably determines is appropriate to secure such contingent Obligations, (e)
the payment or repayment in full in immediately available funds of all other
outstanding Obligations (including the payment of any termination amount then
applicable (or which would or could become applicable as a result of the
repayment of the other Obligations) under Hedge Agreements provided by Hedge
Providers) other than (i) Contingent Obligations, (ii) any Bank Product
Obligations (other than Hedge Obligations) that, at such time, are allowed by
the applicable Bank Product Provider to remain outstanding without being
required to be repaid or cash collateralized, and (iii) any Hedge Obligations
that, at such time, are allowed by the applicable Hedge Provider to remain
outstanding without being required to be repaid, and (f) the termination of all
of the Commitments of the Lenders.  Any reference herein to any Person shall be
construed to include such Person’s successors and assigns.  Any requirement of a
writing contained herein or in any other Loan Document shall be satisfied by the
transmission of a Record.
 
1.5         Time References.  Unless the context of this Agreement or any other
Loan Document clearly requires otherwise, all references to time of day refer to
Pacific standard time or Pacific daylight saving time, as in effect in Los
Angeles, California on such day.  For purposes of the computation of a period of
time from a specified date to a later specified date, the word “from” means
“from and including” and the words “to” and “until” each means “to and
including”; provided that, with respect to a computation of fees or interest
payable to Agent or any Lender, such period shall in any event consist of at
least one full day.
 
1.6         Schedules and Exhibits.  All of the schedules and exhibits attached
to this Agreement shall be deemed incorporated herein by reference.
 
2.         LOANS AND TERMS OF PAYMENT.
 
2.1         Revolving Loans.
 
(a)         Subject to the terms and conditions of this Agreement, and during
the term of this Agreement, each Lender agrees (severally, not jointly or
jointly and severally) to make revolving loans (“Revolving Loans”) to Borrower
in an amount at any one time outstanding not to exceed the lesser of:
 
(i)         such Lender’s Commitment, or
 
(ii)         such Lender’s Pro Rata Share of an amount equal to the lesser of:
 

 
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(A)         the amount equal to (1) the Maximum Revolver Amount less (2) the sum
of (x) the Letter of Credit Usage at such time, plus (y) the principal amount of
Swing Loans outstanding at such time, plus (z) the Availability Reserve, and
 
(B)         the amount equal to (1) the Borrowing Base as of such date (based
upon the most recent Borrowing Base Certificate delivered by Borrower to Agent)
less (2) the sum of (x) the Letter of Credit Usage at such time, plus (y) the
principal amount of Swing Loans outstanding at such time, plus (z) the
Availability Reserve.
 
(b)         Amounts borrowed pursuant to this Section 2.1 may be repaid and,
subject to the terms and conditions of this Agreement, reborrowed at any time
during the term of this Agreement.  The outstanding principal amount of the
Revolving Loans, together with interest accrued and unpaid thereon, shall
constitute Obligations and shall be due and payable on the Maturity Date or, if
earlier, on the date on which they are declared due and payable pursuant to the
terms of this Agreement.
 
(c)         Anything to the contrary in this Section 2.1 notwithstanding, Agent
shall have the right (but not the obligation), in the exercise of its Permitted
Discretion, to establish and increase or decrease Receivable Reserves, Inventory
Reserves, and Bank Product Reserves against the Borrowing Base or the Maximum
Revolver Amount.  The amount of any Receivable Reserve, Inventory Reserves, and
Bank Product Reserves established by Agent shall have a reasonable relationship
to the event, condition, other circumstance, or fact that is the basis for such
reserve and shall not be duplicative of any other reserve established and
currently maintained.  Upon establishment or increase in reserves, Agent agrees
to make itself available to discuss the reserve or increase, and Borrower may
take such action as may be required so that the event, condition, circumstance,
or fact that is the basis for such reserve or increase no longer exists, in a
manner and to the extent reasonably satisfactory to Agent in the exercise of its
Permitted Discretion.  In no event shall such opportunity limit the right of
Agent to establish or change such Receivable Reserve, Inventory Reserves, and
Bank Product Reserves, unless Agent shall have determined, in its Permitted
Discretion, that the event, condition, other circumstance, or fact that was the
basis for such Receivable Reserve, Inventory Reserve, and Bank Product Reserve,
or such change no longer exists or has otherwise been adequately addressed by
Borrower.
 
2.2         [Intentionally Omitted.]
 
2.3         Borrowing Procedures and Settlements.
 
(a)         Procedure for Borrowing Revolving Loans.  Each Borrowing shall be
made by a written request by an Authorized Person delivered to Agent and
received by Agent no later than 11:00 a.m. (i) on the Business Day that is the
requested Funding Date in the case of a request for a Swing Loan, and (ii) on
the Business Day that is 1 Business Day prior to the requested Funding Date in
the case of all other requests, specifying (A) the amount of such Borrowing, and
(B) the requested Funding Date (which shall be a Business Day); provided, that
Agent may, in its sole discretion, elect to accept as timely requests that are
received later than 11:00 a.m. on the applicable Business Day.  At Agent’s
election, in lieu of delivering the above-described written request, any
Authorized Person may give Agent telephonic notice of such request by the
required time.  In such circumstances, Borrower agrees that any such telephonic
notice will be confirmed in writing within 24 hours of the giving of such
telephonic notice, but the failure to provide such written confirmation shall
not affect the validity of the request.
 
(b)         Making of Swing Loans.  In the case of a request for a Revolving
Loan and so long as either (i) the aggregate amount of Swing Loans made since
the last Settlement Date, minus all payments or other amounts applied to Swing
Loans since the last Settlement Date, plus the amount of the requested Swing
Loan does not exceed $10,000,000, or (ii) Swing Lender, in its sole discretion,
agrees to make a Swing Loan notwithstanding the foregoing limitation, Swing
Lender shall make a Revolving Loan (any such Revolving Loan made by Swing Lender
pursuant to this Section 2.3(b) being referred to as a “Swing Loan” and all such
Revolving Loans being referred to as “Swing Loans”) available to Borrower on the
Funding Date applicable thereto by transferring immediately available funds in
the amount of such requested Borrowing to the Designated Account. Anything
 

 
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contained herein to the contrary notwithstanding, the Swing Lender may, but
shall not be obligated to, make Swing Loans at any time that one or more Lenders
is a Defaulting Lender.  Each Swing Loan shall be deemed to be a Revolving Loan
hereunder and shall be subject to all the terms and conditions (including
Section 3) applicable to other Revolving Loans, except that all payments
(including interest) on any Swing Loan shall be payable to Swing Lender solely
for its own account.  Subject to the provisions of Section 2.3(d)(ii), Swing
Lender shall not make and shall not be obligated to make any Swing Loan if Swing
Lender has actual knowledge that (i) one or more of the applicable conditions
precedent set forth in Section 3 will not be satisfied on the requested Funding
Date for the applicable Borrowing, or (ii) the requested Borrowing would exceed
the Availability on such Funding Date.  Swing Lender shall not otherwise be
required to determine whether the applicable conditions precedent set forth in
Section 3 have been satisfied on the Funding Date applicable thereto prior to
making any Swing Loan.  The Swing Loans shall be secured by Agent’s Liens,
constitute Revolving Loans and Obligations, and bear interest at the rate
applicable from time to time to Revolving Loans that are Base Rate Loans.
 
(c)         Making of Revolving Loans.
 
(i)         In the event that Swing Lender is not obligated to make a Swing
Loan, then after receipt of a request for a Borrowing pursuant to Section
2.3(a), Agent shall notify the Lenders by telecopy, telephone, email, or other
electronic form of transmission, of the requested Borrowing; such notification
to be sent on the Business Day that is 1 Business Day prior to the requested
Funding Date.  If Agent has notified the Lenders of a requested Borrowing on the
Business Day that is 1 Business Day prior to the Funding Date, then each Lender
shall make the amount of such Lender’s Pro Rata Share of the requested Borrowing
available to Agent in immediately available funds, to Agent’s Account, not later
than 10:00 a.m. on the Business Day that is the requested Funding Date.  After
Agent’s receipt of the proceeds of such Revolving Loans from the Lenders, Agent
shall make the proceeds thereof available to Borrower on the applicable Funding
Date by transferring immediately available funds equal to such proceeds received
by Agent to the Designated Account; provided, that, subject to the provisions of
Section 2.3(d)(ii), no Lender shall have an obligation to make any Revolving
Loan, if (1) one or more of the applicable conditions precedent set forth in
Section 3 will not be satisfied on the requested Funding Date for the applicable
Borrowing unless such condition has been waived, or (2) the requested Borrowing
would exceed the Availability on such Funding Date.
 
(ii)         Unless Agent receives notice from a Lender prior to 9:30 a.m. on
the Business Day that is the requested Funding Date relative to a requested
Borrowing as to which Agent has notified the Lenders of a requested Borrowing
that such Lender will not make available as and when required hereunder to Agent
for the account of Borrower the amount of that Lender’s Pro Rata Share of the
Borrowing, Agent may assume that each Lender has made or will make such amount
available to Agent in immediately available funds on the Funding Date and Agent
may (but shall not be so required), in reliance upon such assumption, make
available to Borrower a corresponding amount.  If, on the requested Funding
Date, any Lender shall not have remitted the full amount that it is required to
make available to Agent in immediately available funds and if Agent has made
available to Borrower such amount on the requested Funding Date, then such
Lender shall make the amount of such Lender’s Pro Rata Share of the requested
Borrowing available to Agent in immediately available funds, to Agent’s Account,
no later than 10:00 a.m. on the Business Day that is the first Business Day
after the requested Funding Date (in which case, the interest accrued on such
Lender’s portion of such Borrowing for the Funding Date shall be for Agent’s
separate account).  If any Lender shall not remit the full amount that it is
required to make available to Agent in immediately available funds as and when
required hereby and if Agent has made available to Borrower such amount, then
that Lender shall be obligated to immediately remit such amount to Agent,
together with interest at the Defaulting Lender Rate for each day until the date
on which such amount is so remitted.  A notice submitted by Agent to any Lender
with respect to amounts owing under this Section 2.3(c)(ii) shall be conclusive,
absent manifest error.  If the amount that a Lender is required to remit is made
available to Agent, then such payment to Agent shall constitute such Lender’s
Revolving Loan for all purposes of this Agreement.  If such amount is not made
available to Agent on the Business Day following the Funding Date, Agent will
notify Borrower of such failure to fund and, upon demand by Agent, Borrower
shall pay such amount to Agent for Agent’s account, together
 

 
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with interest thereon for each day elapsed since the date of such Borrowing, at
a rate per annum equal to the interest rate applicable at the time to the
Revolving Loans composing such Borrowing.
 
(d)         Protective Advances and Optional Overadvances.
 
(i)         Any contrary provision of this Agreement or any other Loan Document
notwithstanding, but subject to Section 2.3(d)(iv), at any time (A) after the
occurrence and during the continuance of a Default or an Event of Default, or
(B) that any of the other applicable conditions precedent set forth in Section 3
are not satisfied, Agent hereby is authorized by Borrower and the Lenders, from
time to time, in Agent’s sole discretion, to make Revolving Loans to, or for the
benefit of, Borrower, on behalf of the Lenders, that Agent, in its Permitted
Discretion, deems necessary or reasonably desirable (1) to preserve or protect
the Collateral, or any portion thereof, or (2) to enhance the likelihood of
repayment of the Obligations (other than the Bank Product Obligations) (the
Revolving Loans described in this Section 2.3(d)(i) shall be referred to as
“Protective Advances”).  Notwithstanding the foregoing, the aggregate amount of
all Protective Advances outstanding at any one time shall not exceed 10% of the
Maximum Revolver Amount.
 
(ii)         Any contrary provision of this Agreement or any other Loan Document
notwithstanding, but subject to Section 2.3(d)(iv), the Lenders hereby authorize
Agent or Swing Lender, as applicable, and either Agent or Swing Lender, as
applicable, may, but is not obligated to, knowingly and intentionally, continue
to make Revolving Loans (including Swing Loans) to Borrower notwithstanding that
an Overadvance exists or would be created thereby, so long as (A) after giving
effect to such Revolving Loans, the outstanding Revolver Usage does not exceed
the Borrowing Base by more than 10% of the Maximum Revolver Amount, and (B)
after giving effect to such Revolving Loans, the outstanding Revolver Usage
(except for and excluding amounts charged to the Loan Account for interest,
fees, or Lender Group Expenses) does not exceed the Maximum Revolver Amount.  In
the event Agent obtains actual knowledge that the Revolver Usage exceeds the
amounts permitted by the immediately foregoing provisions, regardless of the
amount of, or reason for, such excess, Agent shall notify the Lenders as soon as
practicable (and prior to making any (or any additional) intentional
Overadvances (except for and excluding amounts charged to the Loan Account for
interest, fees, or Lender Group Expenses) unless Agent determines that prior
notice would result in imminent harm to the Collateral or its value, in which
case Agent may make such Overadvances and provide notice as promptly as
practicable thereafter), and the Lenders with Commitments thereupon shall,
together with Agent, jointly determine the terms of arrangements that shall be
implemented with Borrower intended to reduce, within a reasonable time, the
outstanding principal amount of the Revolving Loans to Borrower to an amount
permitted by the preceding sentence.  In such circumstances, if any Lender with
a Commitment objects to the proposed terms of reduction or repayment of any
Overadvance, the terms of reduction or repayment thereof shall be implemented
according to the determination of the Required Lenders.  The foregoing
provisions are meant for the benefit of the Lenders and Agent and are not meant
for the benefit of Borrower, which shall continue to be bound by the provisions
of Section 2.4(e).  Each Lender with a Commitment shall be obligated to settle
with Agent as provided in Section 2.3(e) (or Section 2.3(g), as applicable) for
the amount of such Lender’s Pro Rata Share of any unintentional Overadvances by
Agent reported to such Lender, any intentional Overadvances made as permitted
under this Section 2.3(d)(ii), and any Overadvances resulting from the charging
to the Loan Account of interest, fees, or Lender Group Expenses.
 
(iii)         Each Protective Advance and each Overadvance (each, an
“Extraordinary Advance”) shall be deemed to be a Revolving Loan hereunder,
except that no Extraordinary Advance shall be eligible to be a LIBOR Rate Loan
and, prior to Settlement therefor, all payments on the Extraordinary Advances
shall be payable to Agent solely for its own account.  The Extraordinary
Advances shall be repayable on demand, secured by Agent’s Liens, constitute
Obligations hereunder, and bear interest at the rate applicable from time to
time to Revolving Loans that are Base Rate Loans.  The provisions of this
Section 2.3(d) are for the exclusive benefit of Agent, Swing Lender, and the
Lenders and are not intended to benefit Borrower (or any other Loan Party) in
any way.
 

 
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(iv)         Notwithstanding anything contained in this Agreement or any other
Loan Document to the contrary: (A) no Extraordinary Advance may be made by Agent
if such Extraordinary Advance would cause the aggregate principal amount of
Extraordinary Advances outstanding to exceed an amount equal to 10% of the
Maximum Revolver Amount; and (B) to the extent that the making of any
Extraordinary Advance causes the aggregate Revolver Usage to exceed the Maximum
Revolver Amount, such portion of such Extraordinary Advance shall be for Agent’s
sole and separate account and not for the account of any Lender and shall be
entitled to priority in repayment in accordance with Section 2.4(b).
 
(e)         Settlement.  It is agreed that each Lender’s funded portion of the
Revolving Loans is intended by the Lenders to equal, at all times, such Lender’s
Pro Rata Share of the outstanding Revolving Loans.  Such agreement
notwithstanding, Agent, Swing Lender, and the other Lenders agree (which
agreement shall not be for the benefit of Borrower) that in order to facilitate
the administration of this Agreement and the other Loan Documents, settlement
among the Lenders as to the Revolving Loans, the Swing Loans, and the
Extraordinary Advances shall take place on a periodic basis in accordance with
the following provisions:
 
(i)         Agent shall request settlement (“Settlement”) with the Lenders on a
weekly basis, or on a more frequent basis if so determined by Agent in its sole
discretion (1) on behalf of Swing Lender, with respect to the outstanding Swing
Loans, (2) for itself, with respect to the outstanding Extraordinary Advances,
and (3) with respect to Borrower’s or its Subsidiaries’ payments or other
amounts received, as to each by notifying the Lenders by telecopy, telephone, or
other similar form of transmission, of such requested Settlement, no later than
2:00 p.m. on the Business Day immediately prior to the date of such requested
Settlement (the date of such requested Settlement being the “Settlement
Date”).  Such notice of a Settlement Date shall include a summary statement of
the amount of outstanding Revolving Loans, Swing Loans, and Extraordinary
Advances for the period since the prior Settlement Date.  Subject to the terms
and conditions contained herein (including Section 2.3(g)):  (y) if the amount
of the Revolving Loans (including Swing Loans, and Extraordinary Advances) made
by a Lender that is not a Defaulting Lender exceeds such Lender’s Pro Rata Share
of the Revolving Loans (including Swing Loans, and Extraordinary Advances) as of
a Settlement Date, then Agent shall, by no later than 12:00 p.m. on the
Settlement Date, transfer in immediately available funds to a Deposit Account of
such Lender (as such Lender may designate), an amount such that each such Lender
shall, upon receipt of such amount, have as of the Settlement Date, its Pro Rata
Share of the Revolving Loans (including Swing Loans, and Extraordinary
Advances), and (z) if the amount of the Revolving Loans (including Swing Loans,
and Extraordinary Advances) made by a Lender is less than such Lender’s Pro Rata
Share of the Revolving Loans (including Swing Loans, and Extraordinary Advances)
as of a Settlement Date, such Lender shall no later than 12:00 p.m. on the
Settlement Date transfer in immediately available funds to Agent’s Account, an
amount such that each such Lender shall, upon transfer of such amount, have as
of the Settlement Date, its Pro Rata Share of the Revolving Loans (including
Swing Loans and Extraordinary Advances).  Such amounts made available to Agent
under clause (z) of the immediately preceding sentence shall be applied against
the amounts of the applicable Swing Loans or Extraordinary Advances and,
together with the portion of such Swing Loans or Extraordinary Advances
representing Swing Lender’s Pro Rata Share thereof, shall constitute Revolving
Loans of such Lenders.  If any such amount is not made available to Agent by any
Lender on the Settlement Date applicable thereto to the extent required by the
terms hereof, Agent shall be entitled to recover for its account such amount on
demand from such Lender together with interest thereon at the Defaulting Lender
Rate.
 
(ii)         In determining whether a Lender’s balance of the Revolving Loans,
Swing Loans, and Extraordinary Advances is less than, equal to, or greater than
such Lender’s Pro Rata Share of the Revolving Loans, Swing Loans, and
Extraordinary Advances as of a Settlement Date, Agent shall, as part of the
relevant Settlement, apply to such balance the portion of payments actually
received in good funds by Agent with respect to principal, interest, fees
payable by Borrower and allocable to the Lenders hereunder, and proceeds of
Collateral.
 
(iii)         Between Settlement Dates, Agent, to the extent Extraordinary
Advances or Swing Loans are outstanding, may pay over to Agent or Swing Lender,
as applicable, any payments or other amounts received by Agent, that in
accordance with the terms of this Agreement would be applied to the reduction of
the Revolving Loans, for application to the Extraordinary Advances or Swing
Loans.  Between Settlement Dates,
 

 
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Agent, to the extent no Extraordinary Advances or Swing Loans are outstanding,
may pay over to Swing Lender any payments or other amounts received by Agent,
that in accordance with the terms of this Agreement would be applied to the
reduction of the Revolving Loans, for application to Swing Lender’s Pro Rata
Share of the Revolving Loans.  If, as of any Settlement Date, payments or other
amounts of Borrower or its Subsidiaries received since the then immediately
preceding Settlement Date have been applied to Swing Lender’s Pro Rata Share of
the Revolving Loans other than to Swing Loans, as provided for in the previous
sentence, Swing Lender shall pay to Agent for the accounts of the Lenders, and
Agent shall pay to the Lenders (other than a Defaulting Lender if Agent has
implemented the provisions of Section 2.3(g)), to be applied to the outstanding
Revolving Loans of such Lenders, an amount such that each such Lender shall,
upon receipt of such amount, have, as of such Settlement Date, its Pro Rata
Share of the Revolving Loans.  During the period between Settlement Dates, Swing
Lender with respect to Swing Loans, Agent with respect to Extraordinary
Advances, and each Lender with respect to the Revolving Loans other than Swing
Loans and Extraordinary Advances, shall be entitled to interest at the
applicable rate or rates payable under this Agreement on the daily amount of
funds employed by Swing Lender, Agent, or the Lenders, as applicable.
 
(iv)         Anything in this Section 2.3(e) to the contrary notwithstanding, in
the event that a Lender is a Defaulting Lender, Agent shall be entitled to
refrain from remitting settlement amounts to the Defaulting Lender and, instead,
shall be entitled to elect to implement the provisions set forth in Section
2.3(g).
 
(f)         Notation.  Agent, as a non-fiduciary agent for Borrower, shall
maintain a register (the “Register”) on which it will record the Obligations
hereunder, and each Lender assignment and participation. The Register shall
include the names and addresses of Lenders (including all Assignees, successors
and Participants), and the Commitment of, and the principal and interest amounts
of the Obligations, owing to each such Lender, and the interests therein of each
Lender, from time to time.  Each Lender and Borrower shall be provided
reasonable opportunities to inspect the Register from time to time. The Register
shall, absent manifest error, conclusively be presumed to be correct and
accurate, and Borrower and Agent shall treat any registered holder as the
absolute owner of any Obligations held by such holder, as indicated in the
Register, for the purpose of receiving payment of all amounts payable with
respect to such Obligation and for all other purposes.  The Obligations are
registered obligations and the right, title, and interest of any Lender or its
assignees in and to such Obligations shall be transferable only upon notation of
such transfer in the Register. If a Lender sells a participation in any
Obligation, it shall provide the Agent the information described in this
paragraph and permit Borrower to review such information as reasonably necessary
for Borrower to comply with its obligations under this Agreement or under any
applicable legal requirement. This Section 2.3(f) shall be construed so that the
Obligations are at all times maintained in “registered form” within the meaning
of Sections 163(f), 871(h)(2) and 881(c)(2) of the IRC and any related
regulations (and any other relevant or successor provisions of the IRC or such
regulations).
 
(g)         Defaulting Lenders.
 
(i)         Notwithstanding the provisions of Section 2.4(b)(ii), Agent shall
not be obligated to transfer to a Defaulting Lender any payments made by
Borrower to Agent for the Defaulting Lender’s benefit or any proceeds of
Collateral that would otherwise be remitted hereunder to the Defaulting Lender,
and, in the absence of such transfer to the Defaulting Lender, Agent shall
transfer any such payments (A) first, to Swing Lender to the extent of any Swing
Loans that were made by Swing Lender and that were required to be, but were not,
paid by the Defaulting Lender, (B) second, to Issuing Lender, to the extent of
the portion of a Letter of Credit Disbursement that was required to be, but was
not, paid by the Defaulting Lender, (C) third, to each Non-Defaulting Lender
ratably in accordance with their Commitments (but, in each case, only to the
extent that such Defaulting Lender’s portion of a Revolving Loan (or other
funding obligation) was funded by such other Non-Defaulting Lender), (D) to a
suspense account maintained by Agent, the proceeds of which shall be retained by
Agent and may be made available to be re-advanced to or for the benefit of
Borrower (upon the request of Borrower and subject to the conditions set forth
in Section 3.2) as if such Defaulting Lender had made its portion of Revolving
Loans (or other funding obligations) hereunder, and (E) from and after the date
on which the Commitments are cancelled or terminated and all other Obligations
have been paid in full, to such Defaulting Lender in accordance with tier (L) of
 

 
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Section 2.4(b)(ii).  Subject to the foregoing, Agent may hold and, in its
discretion, re-lend to Borrower for the account of such Defaulting Lender the
amount of all such payments received and retained by Agent for the account of
such Defaulting Lender.  Solely for the purposes of voting or consenting to
matters with respect to the Loan Documents (including the calculation of Pro
Rata Share in connection therewith) and for the purpose of calculating the fee
payable under Section 2.10(b), such Defaulting Lender shall be deemed not to be
a “Lender” and such Lender’s Commitment shall be deemed to be zero; provided,
that the foregoing shall not apply to any of the matters governed by Section
14.1(a)(i) through (iii).  The provisions of this Section 2.3(g) shall remain
effective with respect to such Defaulting Lender until the earlier of (y) the
date on which all of the Non-Defaulting Lenders, Agent, Issuing Lender, and
Borrower shall have waived, in writing, the application of this Section 2.3(g)
to such Defaulting Lender, or (z) the date on which such Defaulting Lender makes
payment of all amounts that it was obligated to fund hereunder, pays to Agent
all amounts owing by Defaulting Lender in respect of the amounts that it was
obligated to fund hereunder, and, if requested by Agent, provides adequate
assurance of its ability to perform its future obligations hereunder (on which
earlier date, so long as no Event of Default has occurred and is continuing, any
remaining cash collateral held by Agent pursuant to Section 2.3(g)(ii) shall be
released to Borrower).  The operation of this Section 2.3(g) shall not be
construed to increase or otherwise affect the Commitment of any Lender, to
relieve or excuse the performance by such Defaulting Lender or any other Lender
of its duties and obligations hereunder, or to relieve or excuse the performance
by Borrower of its duties and obligations hereunder to Agent, Issuing Lender, or
to the Lenders other than such Defaulting Lender.  Any failure by a Defaulting
Lender to fund amounts that it was obligated to fund hereunder shall constitute
a material breach by such Defaulting Lender of this Agreement and shall entitle
Borrower, in addition to any other remedies to which it may be entitled, at its
option, upon written notice to Agent, to arrange for a substitute Lender to
assume the Commitment of such Defaulting Lender, such substitute Lender to be
reasonably acceptable to Agent.  In connection with the arrangement of such a
substitute Lender, the Defaulting Lender shall have no right to refuse to be
replaced hereunder, and agrees to execute and deliver a completed form of
Assignment and Acceptance in favor of the substitute Lender (and agrees that it
shall be deemed to have executed and delivered such document if it fails to do
so) subject only to being paid its share of the outstanding Obligations (other
than Bank Product Obligations, but including (1) all interest, fees, and other
amounts that may be due and payable in respect thereof, and (2) an assumption of
its Pro Rata Share of its participation in the Letters of Credit); provided,
that any such assumption of the Commitment of such Defaulting Lender shall not
be deemed to constitute a waiver of any of the Lender Groups’ or Borrower’s
rights or remedies against any such Defaulting Lender arising out of or in
relation to such failure to fund.  In the event of a direct conflict between the
priority provisions of this Section 2.3(g) and any other provision contained in
this Agreement or any other Loan Document, it is the intention of the parties
hereto that such provisions be read together and construed, to the fullest
extent possible, to be in concert with each other.  In the event of any actual,
irreconcilable conflict that cannot be resolved as aforesaid, the terms and
provisions of this Section 2.3(g) shall control and govern.
 
(ii)         If any Swing Loan or Letter of Credit is outstanding at the time
that a Lender becomes a Defaulting Lender then:
 
(A)         such Defaulting Lender’s Swing Loan Exposure and Letter of Credit
Exposure shall be reallocated among the Non-Defaulting Lenders in accordance
with their respective Pro Rata Shares but only to the extent (x) the sum of all
Non-Defaulting Lenders’ Revolving Loan Exposures plus such Defaulting Lender’s
Swing Loan Exposure and Letter of Credit Exposure does not exceed the total of
all Non-Defaulting Lenders’ Commitments and (y) the conditions set forth in
Section 3.2 are satisfied at such time;
 
(B)         if the reallocation described in clause (A) above cannot, or can
only partially, be effected, Borrower shall within one Business Day following
notice by Agent (x) first, prepay such Defaulting Lender’s Swing Loan Exposure
(after giving effect to any partial reallocation pursuant to clause (A) above)
and (y) second, cash collateralize such Defaulting Lender’s Letter of Credit
Exposure (after giving effect to any partial reallocation pursuant to clause (A)
above), pursuant to a cash collateral agreement to be entered into in form and
substance reasonably satisfactory to Agent, for so long as such Letter of Credit
Exposure is outstanding;
 

 
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provided, that Borrower shall not be obligated to cash collateralize any
Defaulting Lender’s Letter of Credit Exposure if such Defaulting Lender is also
the Issuing Lender;
 
(C)         if Borrower cash collateralizes any portion of such Defaulting
Lender’s Letter of Credit Exposure pursuant to this Section 2.3(g)(ii), Borrower
shall not be required to pay any Letter of Credit Fees to Agent for the account
of such Defaulting Lender pursuant to Section 2.6(b) with respect to such cash
collateralized portion of such Defaulting Lender’s Letter of Credit Exposure
during the period such Letter of Credit Exposure is cash collateralized;
 
(D)         to the extent the Letter of Credit Exposure of the Non-Defaulting
Lenders is reallocated pursuant to this Section 2.3(g)(ii), then the Letter of
Credit Fees payable to the Non-Defaulting Lenders pursuant to Section 2.6(b)
shall be adjusted in accordance with such Non-Defaulting Lenders’ Letter of
Credit Exposure;
 
(E)         to the extent any Defaulting Lender’s Letter of Credit Exposure is
neither cash collateralized nor reallocated pursuant to this Section 2.3(g)(ii),
then, without prejudice to any rights or remedies of the Issuing Lender or any
Lender hereunder, all Letter of Credit Fees that would have otherwise been
payable to such Defaulting Lender under Section 2.6(b) with respect to such
portion of such Letter of Credit Exposure shall instead be payable to the
Issuing Lender until such portion of such Defaulting Lender’s Letter of Credit
Exposure is cash collateralized or reallocated;
 
(F)         so long as any Lender is a Defaulting Lender, the Swing Lender shall
not be required to make any Swing Loan and the Issuing Lender shall not be
required to issue, amend, or increase any Letter of Credit, in each case, to the
extent (x) the Defaulting Lender’s Pro Rata Share of such Swing Loans or Letter
of Credit can not be reallocated pursuant to this Section 2.3(g)(ii) or (y) the
Swing Lender or Issuing Lender, as applicable, has not otherwise entered into
arrangements reasonably satisfactory to the Swing Lender or Issuing Lender, as
applicable, and Borrower to eliminate the Swing Lender’s or Issuing Lender’s
risk with respect to the Defaulting Lender’s participation in Swing Loans or
Letters of Credit; and
 
(G)         Agent may release any cash collateral provided by Borrower pursuant
to this Section 2.3(g)(ii) to the Issuing Lender and the Issuing Lender may
apply any such cash collateral to the payment of such Defaulting Lender’s Pro
Rata Share of any Letter of Credit Disbursement that is not reimbursed by
Borrower pursuant to Section 2.11(a).
 
(h)         Independent Obligations.  All Revolving Loans (other than Swing
Loans and Extraordinary Advances) shall be made by the Lenders contemporaneously
and in accordance with their Pro Rata Shares.  It is understood that (i) no
Lender shall be responsible for any failure by any other Lender to perform its
obligation to make any Revolving Loan (or other extension of credit) hereunder,
nor shall any Commitment of any Lender be increased or decreased as a result of
any failure by any other Lender to perform its obligations hereunder, and (ii)
no failure by any Lender to perform its obligations hereunder shall excuse any
other Lender from its obligations hereunder.
 
2.4         Payments; Reductions of Commitments; Prepayments.
 
(a)         Payments by Borrower.
 
(i)         Except as otherwise expressly provided herein, all payments by
Borrower shall be made to Agent’s Account for the account of the Lender Group
and shall be made in immediately available funds, no later than 1:30 p.m. on the
date specified herein.  Any payment received by Agent later than 1:30 p.m. shall
be deemed to have been received (unless Agent, in its sole discretion, elects to
credit it on the date received) on the following Business Day and any applicable
interest or fee shall continue to accrue until such following Business Day.
 

 
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(ii)         Unless Agent receives notice from Borrower prior to the date on
which any payment is due to the Lenders that Borrower will not make such payment
in full as and when required, Agent may assume that Borrower has made (or will
make) such payment in full to Agent on such date in immediately available funds
and Agent may (but shall not be so required), in reliance upon such assumption,
distribute to each Lender on such due date an amount equal to the amount then
due such Lender.  If and to the extent Borrower does not make such payment in
full to Agent on the date when due, each Lender severally shall repay to Agent
on demand such amount distributed to such Lender, together with interest thereon
at the Defaulting Lender Rate for each day from the date such amount is
distributed to such Lender until the date repaid.
 
(b)         Apportionment and Application.
 
(i)         So long as no Application Event has occurred and is continuing and
except as otherwise provided herein with respect to Defaulting Lenders, all
principal and interest payments received by Agent shall be apportioned ratably
among the Lenders (according to the unpaid principal balance of the Obligations
to which such payments relate held by each Lender) and all payments of fees and
expenses received by Agent (other than fees or expenses that are for Agent’s
separate account or for the separate account of Issuing Lender) shall be
apportioned ratably among the Lenders having a Pro Rata Share of the type of
Commitment or Obligation to which a particular fee or expense relates.  Subject
to Section 2.4(b)(iv) and Section 2.4(e), all payments to be made hereunder by
Borrower shall be remitted to Agent and all such payments, and all proceeds of
Collateral received by Agent, shall be applied, so long as no Application Event
has occurred and is continuing and except as otherwise provided herein with
respect to Defaulting Lenders, to reduce the balance of the Revolving Loans
outstanding and, thereafter, to Borrower (to be wired to the Designated Account)
or such other Person entitled thereto under applicable law.
 
(ii)         At any time that an Application Event has occurred and is
continuing and except as otherwise provided herein with respect to Defaulting
Lenders, all payments remitted to Agent and all proceeds of Collateral received
by Agent shall be applied as follows:
 
(A)         first, to pay any Lender Group Expenses (including cost or expense
reimbursements) or indemnities then due to Agent under the Loan Documents, until
paid in full,
 
(B)         second, to pay any fees or premiums then due to Agent under the Loan
Documents until paid in full,
 
(C)         third, to pay interest due in respect of all Protective Advances
until paid in full,
 
(D)         fourth, to pay the principal of all Protective Advances until paid
in full,
 
(E)         fifth, ratably, to pay any Lender Group Expenses (including cost or
expense reimbursements) or indemnities then due to any of the Lenders under the
Loan Documents, until paid in full,
 
(F)         sixth, ratably, to pay any fees or premiums then due to any of the
Lenders under the Loan Documents until paid in full,
 
(G)         seventh, to pay interest accrued in respect of the Swing Loans until
paid in full,
 
(H)         eighth, to pay the principal of all Swing Loans until paid in full,
 
(I)         ninth, ratably, to pay interest accrued in respect of the Revolving
Loans (other than Protective Advances) until paid in full,
 

 
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(J)         tenth, ratably
 
i.         to pay the principal of all Revolving Loans until paid in full,
 
ii.         to Agent, to be held by Agent, for the benefit of Issuing Lender
(and for the ratable benefit of each of the Lenders that have an obligation to
pay to Agent, for the account of Issuing Lender, a share of each Letter of
Credit Disbursement), as cash collateral in an amount up to 105% of the Letter
of Credit Usage (to the extent permitted by applicable law, such cash collateral
shall be applied to the reimbursement of any Letter of Credit Disbursement as
and when such disbursement occurs and, if a Letter of Credit expires undrawn,
the cash collateral held by Agent in respect of such Letter of Credit shall, to
the extent permitted by applicable law, be reapplied pursuant to this Section
2.4(b)(ii), beginning with tier (A) hereof),
 
iii.         ratably, up to the lesser of (y) the amount (after taking into
account any amounts previously paid pursuant to this clause iii. during the
continuation of the applicable Application Event) of the most recently
established Bank Product Reserve, and (z) $10,000,000 in the aggregate (after
taking into account any amounts previously paid pursuant to this clause iii.
during the continuation of the applicable Application Event), to (I) the Bank
Product Providers based upon amounts then certified by the applicable Bank
Product Provider to Agent (in form and substance satisfactory to Agent) to be
due and payable to such Bank Product Providers on account of Bank Product
Obligations, and (II) with any balance to be paid to Agent, to be held by Agent,
for the ratable benefit of the Bank Product Providers, as cash collateral (which
cash collateral may be released by Agent to the applicable Bank Product Provider
and applied by such Bank Product Provider to the payment or reimbursement of any
amounts due and payable with respect to Bank Product Obligations owed to the
applicable Bank Product Provider as and when such amounts first become due and
payable and, if and at such time as all such Bank Product Obligations are paid
or otherwise satisfied in full, the cash collateral held by Agent in respect of
such Bank Product Obligations shall be reapplied pursuant to this Section
2.4(b)(ii), beginning with tier (A) hereof,
 
(K)         eleventh, to pay any other Obligations other than Obligations owed
to Defaulting Lenders (including being paid, ratably, to the Bank Product
Providers on account of all amounts then due and payable in respect of Bank
Product Obligations, with any balance to be paid to Agent, to be held by Agent,
for the ratable benefit of the Bank Product Providers, as cash collateral (which
cash collateral may be released by Agent to the applicable Bank Product Provider
and applied by such Bank Product Provider to the payment or reimbursement of any
amounts due and payable with respect to Bank Product Obligations owed to the
applicable Bank Product Provider as and when such amounts first become due and
payable and, if and at such time as all such Bank Product Obligations are paid
or otherwise satisfied in full, the cash collateral held by Agent in respect of
such Bank Product Obligations shall be reapplied pursuant to this Section
2.4(b)(ii), beginning with tier (A) hereof),
 
(L)         twelfth, ratably to pay any Obligations owed to Defaulting Lenders;
and
 
(M)         thirteenth, to Borrower (to be wired to the Designated Account) or
such other Person entitled thereto under applicable law.
 
(iii)         Agent promptly shall distribute to each Lender, pursuant to the
applicable wire instructions received from each Lender in writing, such funds as
it may be entitled to receive, subject to a Settlement delay as provided in
Section 2.3(e).
 
(iv)         In each instance, so long as no Application Event has occurred and
is continuing, Section 2.4(b)(i) shall not apply to any payment made by Borrower
to Agent and specified by Borrower to be for the payment of specific Obligations
then due and payable (or prepayable) under any provision of this Agreement or
any other Loan Document.
 

 
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(v)         For purposes of Section 2.4(b)(ii), “paid in full” of a type of
Obligation means payment in cash or immediately available funds of all amounts
owing on account of such type of Obligation, including interest accrued after
the commencement of any Insolvency Proceeding, default interest, interest on
interest, and expense reimbursements, irrespective of whether any of the
foregoing would be or is allowed or disallowed in whole or in part in any
Insolvency Proceeding.
 
(vi)         In the event of a direct conflict between the priority provisions
of this Section 2.4 and any other provision contained in this Agreement or any
other Loan Document, it is the intention of the parties hereto that such
provisions be read together and construed, to the fullest extent possible, to be
in concert with each other.  In the event of any actual, irreconcilable conflict
that cannot be resolved as aforesaid, if the conflict relates to the provisions
of Section 2.3(g) and this Section 2.4, then the provisions of Section 2.3(g)
shall control and govern, and if otherwise, then the terms and provisions of
this Section 2.4 shall control and govern.
 
(c)         Reduction of Commitments.  The Commitments shall terminate on the
Maturity Date.  Borrower may reduce the Commitments, without premium or penalty,
to an amount (which may be zero) not less than the sum of (A) the Revolver Usage
as of such date, plus (B) the principal amount of all Revolving Loans not yet
made as to which a request has been given by Borrower under Section 2.3(a), plus
(C) the amount of all Letters of Credit not yet issued as to which a request has
been given by Borrower pursuant to Section 2.11(a).  Each such reduction shall
be in an amount which is not less than $5,000,000 (unless the Commitments are
being reduced to zero and the amount of the Commitments in effect immediately
prior to such reduction are less than $5,000,000), shall be made by providing
not less than 3 Business Days prior written notice to Agent, and shall be
irrevocable; provided, that a notice of termination of Commitments delivered by
Borrower may state that such notice is conditioned upon the effectiveness of
other credit facilities, in which case such notice may be revoked by Borrower
(by notice to Agent on or prior to the specified effective date) if such
condition is not satisfied; provided, further, that in no event may a notice of
termination be revoked on more than one occasion during the term if this
Agreement.  Once reduced, the Commitments may not be increased except in
accordance with Section 2.14.  Each such reduction of the Commitments shall
reduce the Commitments of each Lender proportionately in accordance with its
ratable share thereof.
 
(d)         Optional Prepayments.  Borrower may prepay the principal of any
Revolving Loan at any time in whole or in part, without premium or penalty.
 
(e)         Mandatory Prepayments. If, at any time, (A) the Revolver Usage on
such date exceeds (B) the Borrowing Base reflected in the Borrowing Base
Certificate most recently delivered by Borrower to Agent, then Borrower shall
promptly, but in any event, within 1 Business Day prepay the Obligations in
accordance with Section 2.4(f) in an aggregate amount equal to the amount of
such excess.
 
(f)         Application of Payments.  Each prepayment pursuant to
Section 2.4(e) shall, (A) so long as no Application Event shall have occurred
and be continuing, be applied, first, to the outstanding principal amount of the
Revolving Loans until paid in full, and second, to cash collateralize the
Letters of Credit in an amount equal to 105% of the then outstanding Letter of
Credit Usage, and (B) if an Application Event shall have occurred and be
continuing, be applied in the manner set forth in Section 2.4(b)(ii).
 
2.5         Promise to Pay.  Borrower agrees to pay the Lender Group Expenses on
the date when demand therefor is made by Agent; provided, that so long as no
Event of Default has occurred and is continuing, such payment shall be made on
or before the date that is three (3) Business Days after the date when demand
for payment of such Lender Group Expenses is made by Agent.  Borrower promises
to pay all of the Obligations (including principal, interest, premiums, if any,
fees, costs, and expenses (including Lender Group Expenses)) in full on the
Maturity Date or, if earlier, on the date on which the Obligations (other than
the Bank Product Obligations) become due and payable pursuant to the terms of
this Agreement.  Borrower agrees that its obligations contained in the first
sentence of this Section 2.5 shall survive payment or satisfaction in full of
all other Obligations.  
 

 
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2.6         Interest Rates and Letter of Credit Fee:  Rates, Payments, and
Calculations.
 
(a)         Interest Rates.  Except as provided in Section 2.6(c), all
Obligations (except for undrawn Letters of Credit) that have been charged to the
Loan Account pursuant to the terms hereof shall bear interest as follows:
 
(i)         if the relevant Obligation is a LIBOR Rate Loan, at a per annum rate
equal to the LIBOR Rate plus the LIBOR Rate Margin, and
 
(ii)         otherwise, at a per annum rate equal to the Base Rate plus the Base
Rate Margin.
 
(b)         Letter of Credit Fee.  Borrower shall pay Agent (for the ratable
benefit of the Lenders), a Letter of Credit fee (the “Letter of Credit Fee”)
(which fee shall be in addition to the fees, charges, commissions, and costs set
forth in Section 2.11(j)) that shall accrue at a per annum rate equal to the
LIBOR Rate Margin times the undrawn amount of all outstanding Letters of Credit.
 
(c)          Default Rate.  Upon the occurrence and during the continuation of
an Event of Default and at the election of Agent or the Required Lenders,
 
(i)         all Obligations (except for undrawn Letters of Credit) that have
been charged to the Loan Account pursuant to the terms hereof shall bear
interest at a per annum rate equal to 2 percentage points above the per annum
rate otherwise applicable thereunder, and
 
(ii)         the Letter of Credit Fee shall be increased to 2 percentage points
above the per annum rate otherwise applicable hereunder.
 
(d)         Payment.  Except to the extent provided to the contrary in Section
2.10 or Section 2.12(a), (i) all interest, all Letter of Credit Fees, and all
other fees payable hereunder or under any of the other Loan Documents shall be
due and payable, in arrears, on the first day of each month and (ii) all costs
and expenses payable hereunder or under any of the other Loan Documents, and all
Lender Group Expenses shall be due and payable the date on which demand therefor
is made by Agent; provided, that so long as no Event of Default has occurred and
is continuing, such payment shall be made on or before the date that is three
(3) Business Days after the date when demand for payment of such Lender Group
Expenses is made by Agent.  Borrower hereby authorizes Agent, from time to time
without prior notice to Borrower, to charge to the Loan Account (A) on the first
day of each month, all interest accrued during the prior month on the Revolving
Loans hereunder, (B) on the first day of each month, all Letter of Credit Fees
accrued or chargeable hereunder during the prior month, (C) on the first day of
each month, the Unused Line Fee accrued during the prior month pursuant to
Section 2.10(b), (D) if Borrower does not pay any such Lender Group Expenses
within 3 Business Days of the date of Borrower’s receipt of written notice
thereof, all Lender Group Expenses payable pursuant to this Agreement or any
other Loan Document, (E) as and when due and payable, all other fees payable
hereunder or under any of the other Loan Documents, (F) as and when incurred or
accrued, all fees and costs provided for in Section 2.10 (a), and (G) as and
when due and payable all other payment obligations payable under any Loan
Document or any Bank Product Agreement (including any amounts due and payable to
the Bank Product Providers in respect of Bank Products); provided, that if such
amounts are not paid and, instead, are charged to the Loan Account, they shall
be charged thereto as of the day on which the item was first due and payable or
incurred or accrued without regard to the applicable delay and such amounts
shall accrue interest from such original date; provided further, that the
applicable delays set forth in the foregoing clause (D) shall not be applicable
(and Agent shall be entitled to immediately charge to the Loan Account) at any
time that an Event of Default has occurred and is continuing.  All amounts
(including interest, fees, costs, expenses, Lender Group Expenses, or other
amounts payable hereunder or under any other Loan Document or under any Bank
Product Agreement) charged to the Loan Account shall constitute Revolving Loans
hereunder, shall constitute Obligations hereunder, and shall initially accrue
interest at the rate then applicable to Revolving Loans that are Base Rate Loans
(unless and until converted into LIBOR Rate Loans in accordance with the terms
of this Agreement).
 

 
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(e)         Computation.  Interest shall be calculated on the basis of a 360 day
year and actual days elapsed, other than for Base Rate Loans which shall be
calculated on the basis of 365 or 366 day year, as applicable, and actual days
elapsed.  In the event the Base Rate is changed from time to time hereafter, the
rates of interest hereunder based upon the Base Rate automatically and
immediately shall be increased or decreased by an amount equal to such change in
the Base Rate.
 
(f)         Intent to Limit Charges to Maximum Lawful Rate.  In no event shall
the interest rate or rates payable under this Agreement, plus any other amounts
paid in connection herewith, exceed the highest rate permissible under any law
that a court of competent jurisdiction shall, in a final determination, deem
applicable.  Borrower and the Lender Group, in executing and delivering this
Agreement, intend legally to agree upon the rate or rates of interest and manner
of payment stated within it; provided, that, anything contained herein to the
contrary notwithstanding, if such rate or rates of interest or manner of payment
exceeds the maximum allowable under applicable law, then, ipso facto, as of the
date of this Agreement, Borrower is and shall be liable only for the payment of
such maximum amount as is allowed by law, and payment received from Borrower in
excess of such legal maximum, whenever received, shall be applied to reduce the
principal balance of the Obligations to the extent of such excess.
 
2.7         Crediting Payments.  The receipt of any payment item by Agent shall
not be required to be considered a payment on account unless such payment item
is a wire transfer of immediately available federal funds made to Agent’s
Account or unless and until such payment item is honored when presented for
payment.  Should any payment item not be honored when presented for payment,
then Borrower shall be deemed not to have made such payment and interest shall
be calculated accordingly.  Anything to the contrary contained herein
notwithstanding, any payment item shall be deemed received by Agent only if it
is received into Agent’s Account on a Business Day on or before 1:30 p.m.  If
any payment item is received into Agent’s Account on a non-Business Day or after
1:30 p.m. on a Business Day (unless Agent, in its sole discretion, elects to
credit it on the date received), it shall be deemed to have been received by
Agent as of the opening of business on the immediately following Business Day.
 
2.8         Designated Account.  Agent is authorized to make the Revolving
Loans, and Issuing Lender is authorized to issue the Letters of Credit, under
this Agreement based upon telephonic or other instructions received from anyone
purporting to be an Authorized Person or, without instructions, if made in
accordance with the provisions of Section 2.6(d).  Borrower agrees to establish
and maintain the Designated Account with the Designated Account Bank for the
purpose of receiving the proceeds of the Revolving Loans requested by Borrower
and made by Agent or the Lenders hereunder.  Unless otherwise agreed by Agent
and Borrower, any Revolving Loan or Swing Loan requested by Borrower and made by
Agent or the Lenders hereunder shall be made to the Designated Account.
 
2.9         Maintenance of Loan Account; Statements of Obligations.  Agent shall
maintain an account on its books in the name of Borrower (the “Loan Account”) on
which Borrower will be charged with all Revolving Loans (including Extraordinary
Advances and Swing Loans) made by Agent, Swing Lender, or the Lenders to
Borrower or for Borrower’s account, the Letters of Credit issued or arranged by
Issuing Lender for Borrower’s account, and with all other payment Obligations
hereunder or under the other Loan Documents, including, accrued interest, fees
and expenses, and Lender Group Expenses.  In accordance with Section 2.7, the
Loan Account will be credited with all payments received by Agent from Borrower
or for Borrower’s account.  Agent shall make available to Borrower monthly
statements regarding the Loan Account, including the principal amount of the
Revolving Loans, interest accrued hereunder, fees accrued or charged hereunder
or under the other Loan Documents, and a summary itemization of all charges and
expenses constituting Lender Group Expenses accrued hereunder or under the other
Loan Documents, and each such statement, absent manifest error, shall be
conclusively presumed to be correct and accurate and constitute an account
stated between Borrower and the Lender Group unless, within 30 days after Agent
first makes such a statement available to Borrower, Borrower shall deliver to
Agent written objection thereto describing the error or errors contained in such
statement.
 
2.10         Fees.
 

 
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(a)         Agent Fees.  Borrower shall pay to Agent, for the account of Agent,
as and when due and payable under the terms of the Fee Letter, the fees set
forth in the Fee Letter.
 
(b)         Unused Line Fee.  Borrower shall pay to Agent, for the ratable
account of the Lenders, on the first day of each month from and after the
Closing Date up to the first day of the month prior to the date on which the
Obligations are paid in full and on the date on which the Obligations are paid
in full, an unused line fee (the “Unused Line Fee”) in an amount equal to the
result of (i) the average amount of the aggregate amount of the Commitments
during the immediately preceding month (or portion thereof), less (ii) the
average amount of the Revolver Usage during the immediately preceding month (or
portion thereof), multiplied by (iii) a rate for that month per annum equal to
the Applicable Unused Line Fee Percentage.
 
(c)         Field Examination and Other Fees.  Borrower shall pay to Agent,
field examination, appraisal, and valuation fees and charges, as and when
incurred or chargeable, as follows (i) a fee of $1,000 per day, per examiner,
plus reasonable documented out-of-pocket expenses (including travel, meals, and
lodging) for each field examination of the Loan Parties performed by personnel
employed by Agent, (ii) if implemented, a fee of $1,000 per day, per applicable
individual, plus reasonable documented out-of-pocket expenses for the
establishment of electronic collateral reporting and (iii) the fees or charges
paid or incurred by Agent (but, in any event, no less than a charge of $1,000
per day, per Person, plus reasonable documented out-of-pocket expenses
(including travel, meals, and lodging)) if it elects to employ the services of
one or more third Persons to perform field examinations of Loan Parties, to
appraise the Collateral, or any portion thereof, or to assess Loan Parties’
business valuation; provided, that so long as no Event of Default shall have
occurred and be continuing, Borrower shall not be obligated to reimburse Agent
for more than 2 field examinations during any calendar year, or (i) if Excess
Availability is greater than $50,000,000 at all times during the prior 90 days,
more than 1 appraisal of the Collateral during any calendar year or (ii)
otherwise, more than 2 appraisals of the Collateral during any calendar year.
 
2.11         Letters of Credit.
 
(a)         Subject to the terms and conditions of this Agreement, upon the
request of Borrower made in accordance herewith, Issuing Lender agrees to issue,
or to cause an Underlying Issuer (including, as Issuing Lender’s agent) to
issue, a requested Letter of Credit for the account of Borrower.  If Issuing
Lender, at its option, elects to cause an Underlying Issuer to issue a requested
Letter of Credit, then Issuing Lender agrees that it will enter into
arrangements relative to the reimbursement of such Underlying Issuer (which may
include, among other means, by becoming an applicant with respect to such Letter
of Credit or entering into undertakings or other arrangements that provide for
reimbursement of such Underlying Issuer with respect to such drawings under
Letter of Credit; each such obligation or undertaking, irrespective of whether
in writing, a “Reimbursement Undertaking”) with respect to Letters of Credit
issued by such Underlying Issuer for the account of Borrower.  By submitting a
request to Issuing Lender for the issuance of a Letter of Credit, Borrower shall
be deemed to have requested that (i) Issuing Lender issue or (ii) an Underlying
Issuer issue the requested Letter of Credit (and, in such case, to have
requested Issuing Lender to issue a Reimbursement Undertaking with respect to
such requested Letter of Credit).  Borrower acknowledges and agrees that
Borrower is and shall be deemed to be an applicant (within the meaning of
Section 5-102(a)(2) of the Code) with respect to each Underlying Letter of
Credit.  Each request for the issuance of a Letter of Credit, or the amendment,
renewal, or extension of any outstanding Letter of Credit, shall be made in
writing by an Authorized Person and delivered to Issuing Lender via hand
delivery, telefacsimile, or other electronic method of transmission reasonably
in advance of the requested date of issuance, amendment, renewal, or
extension.  Each such request shall be in form and substance reasonably
satisfactory to Issuing Lender and (i) shall specify (A) the amount of such
Letter of Credit, (B) the date of issuance, amendment, renewal, or extension of
such Letter of Credit, (C) the proposed expiration date of such Letter of
Credit, (D) the name and address of the beneficiary of the Letter of Credit, and
(E) such other information (including, the conditions to drawing, and, in the
case of an amendment, renewal, or extension, identification of the Letter of
Credit to be so amended, renewed, or extended) as shall be necessary to prepare,
amend, renew, or extend such Letter of Credit, and (ii) shall be accompanied by
such Issuer Documents as Agent, Issuing Lender or Underlying Issuer may
reasonably request or require, to the extent that such requests or requirements
are consistent with the Issuer Documents that Issuing Lender or Underlying
Issuer generally requests for Letters of Credit in similar
circumstances.  Anything contained
 

 
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herein to the contrary notwithstanding, Issuing Lender may, but shall not be
obligated to, issue or cause the issuance of a Letter of Credit or to issue a
Reimbursement Undertaking in respect of an Underlying Letter of Credit, in
either case, that supports the obligations of Borrower or its Subsidiaries in
respect of (A) a lease of real property, or (B) an employment contract.
 
(b)         Issuing Lender shall have no obligation to issue a Letter of Credit
or a Reimbursement Undertaking in respect of an Underlying Letter of Credit, in
either case, if any of the following would result after giving effect to the
requested issuance:
 
(i)         the Letter of Credit Usage would exceed $60,000,000, or
 
(ii)        the Letter of Credit Usage would exceed the Maximum Revolver Amount
less the outstanding amount of Revolving Loans (including Swing Loans), or
 
(iii)       the Letter of Credit Usage would exceed the Borrowing Base at such
time less the outstanding principal balance of the Revolving Loans (inclusive of
Swing Loans) at such time.
 
(c)         In the event there is a Defaulting Lender as of the date of any
request for the issuance of a Letter of Credit, the Issuing Lender shall not be
required to issue or arrange for such Letter of Credit to the extent (x) the
Defaulting Lender’s Letter of Credit Exposure with respect to such Letter of
Credit may not be reallocated pursuant to Section 2.3(g)(ii) or (y) the Issuing
Lender has not otherwise entered into arrangements reasonably satisfactory to it
and Borrower to eliminate the Issuing Lender’s risk with respect to the
participation in such Letter of Credit of the Defaulting Lender, which
arrangements may include Borrower cash collateralizing such Defaulting Lender’s
Letter of Credit Exposure in accordance with Section 2.3(g)(ii).  Additionally,
Issuing Lender shall have no obligation to issue a Letter of Credit or a
Reimbursement Undertaking in respect of an Underlying Letter of Credit, in
either case, if (I) any order, judgment, or decree of any Governmental Authority
or arbitrator shall, by its terms, purport to enjoin or restrain Issuing Lender
from issuing such Letter of Credit or Reimbursement Undertaking or Underlying
Issuer from issuing such Letter of Credit, or any law applicable to Issuing
Lender or Underlying Issuer or any request or directive (whether or not having
the force of law) from any Governmental Authority with jurisdiction over Issuing
Lender or Underlying Issuer shall prohibit or request that Issuing Lender or
Underlying Issuer refrain from the issuance of letters of credit generally or
such Letter of Credit or Reimbursement Undertaking (as applicable) in
particular, or (II) the issuance of such Letter of Credit would violate one or
more policies of Issuing Lender or Underlying Issuer applicable to letters of
credit generally.
 
(d)         Any Issuing Lender (other than Wells Fargo or any of its Affiliates)
shall notify Agent in writing no later than the Business Day immediately
following the Business Day on which such Issuing Lender issued any Letter of
Credit; provided that (y) until Agent advises any such Issuing Lender that the
provisions of Section 3.2 are not satisfied, or (z) the aggregate amount of the
Letters of Credit issued in any such week exceeds such amount as shall be agreed
by Agent and such Issuing Lender, such Issuing Lender shall be required to so
notify Agent in writing only once each week of the Letters of Credit issued by
such Issuing Lender during the immediately preceding week as well as the daily
amounts outstanding for the prior week, such notice to be furnished on such day
of the week as Agent and such Issuing Lender may agree.  Each Letter of Credit
shall be in form and substance reasonably acceptable to Issuing Lender,
including the requirement that the amounts payable thereunder must be payable in
Dollars.  If Issuing Lender makes a payment under a Letter of Credit or an
Underlying Issuer makes a payment under an Underlying Letter of Credit, Borrower
shall pay to Agent an amount equal to the applicable Letter of Credit
Disbursement on the date such Letter of Credit Disbursement is made and, in the
absence of such payment, the amount of the Letter of Credit Disbursement
immediately and automatically shall be deemed to be a Revolving Loan hereunder
(notwithstanding any failure to satisfy any condition precedent set forth in
Section 3) and, initially, shall bear interest at the rate then applicable to
Revolving Loans that are Base Rate Loans. If a Letter of Credit Disbursement is
deemed to be a Revolving Loan hereunder, Borrower’s obligation to pay the amount
of such Letter of Credit Disbursement to Issuing Lender shall be automatically
converted into an obligation to pay the resulting Revolving Loan.  Promptly
following receipt by Agent of any payment from Borrower pursuant to this
paragraph, Agent shall distribute such payment to Issuing Lender or, to the
extent that
 

 
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Lenders have made payments pursuant to Section 2.11(e) to reimburse Issuing
Lender, then to such Lenders and Issuing Lender as their interests may appear.
 
(e)         Promptly following receipt of a notice of a Letter of Credit
Disbursement pursuant to Section 2.11(a), each Lender agrees to fund its Pro
Rata Share of any Revolving Loan deemed made pursuant to Section 2.11(a) on the
same terms and conditions as if Borrower had requested the amount thereof as a
Revolving Loan and Agent shall promptly pay to Issuing Lender the amounts so
received by it from the Lenders.  By the issuance of a Letter of Credit or a
Reimbursement Undertaking (or an amendment, renewal, or extension of a Letter of
Credit or a Reimbursement Undertaking) and without any further action on the
part of Issuing Lender or the Lenders, Issuing Lender shall be deemed to have
granted to each Lender, and each Lender shall be deemed to have purchased, a
participation in each Letter of Credit issued by Issuing Lender and each
Reimbursement Undertaking, in an amount equal to its Pro Rata Share of such
Letter of Credit or Reimbursement Undertaking, and each such Lender agrees to
pay to Agent, for the account of Issuing Lender, such Lender’s Pro Rata Share of
any Letter of Credit Disbursement made by Issuing Lender or an Underlying Issuer
under the applicable Letter of Credit.  In consideration and in furtherance of
the foregoing, each Lender hereby absolutely and unconditionally agrees to pay
to Agent, for the account of Issuing Lender, such Lender’s Pro Rata Share of
each Letter of Credit Disbursement made by Issuing Lender or an Underlying
Issuer and not reimbursed by Borrower on the date due as provided in Section
2.11(a), or of any reimbursement payment this is required to be refunded (or
that Agent or Issuing Lender elects, based upon the advice of counsel, to
refund) to Borrower for any reason.  Each Lender acknowledges and agrees that
its obligation to deliver to Agent, for the account of Issuing Lender, an amount
equal to its respective Pro Rata Share of each Letter of Credit Disbursement
pursuant to this Section 2.11(e) shall be absolute and unconditional and such
remittance shall be made notwithstanding the occurrence or continuation of an
Event of Default or Default or the failure to satisfy any condition set forth in
Section 3.  If any such Lender fails to make available to Agent the amount of
such Lender’s Pro Rata Share of a Letter of Credit Disbursement as provided in
this Section, such Lender shall be deemed to be a Defaulting Lender and Agent
(for the account of Issuing Lender) shall be entitled to recover such amount on
demand from such Lender together with interest thereon at the Defaulting Lender
Rate until paid in full.
 
(f)         Borrower hereby agrees to indemnify, save, defend, and hold the
Lender Group and each Underlying Issuer harmless from any damage, loss, cost,
expense, or liability (other than Taxes, which shall be governed solely and
exclusively by Section 16), and reasonable and documented attorneys fees and
expenses incurred by Issuing Lender, any other member of the Lender Group, or
any Underlying Issuer arising out of or in connection with any Reimbursement
Undertaking or any Letter of Credit; provided, that Borrower shall not be
obligated hereunder to indemnify the Lender Group or any Underlying Issuer for
any loss, cost, expense, or liability that a court of competent jurisdiction
finally determines to have resulted from the gross negligence or willful
misconduct of Issuing Lender, any other member of the Lender Group, or any
Underlying Issuer.  Borrower agrees to be bound by the Underlying Issuer’s
regulations and interpretations of any Letter of Credit or by Issuing Lender’s
interpretations of any Reimbursement Undertaking even though this interpretation
may be different from Borrower’s own.  Borrower understands that the
Reimbursement Undertakings may require Issuing Lender to indemnify the
Underlying Issuer for certain costs or liabilities arising out of claims by
Borrower against such Underlying Issuer.  Borrower hereby agrees to indemnify,
save, defend, and hold Issuing Lender and the other members of the Lender Group
harmless with respect to any loss, cost, expense (including reasonable and
documented attorneys fees and expenses), or liability (other than Taxes, which
shall be governed solely and exclusively by Section 16) incurred by them as a
result of Issuing Lender’s indemnification of an Underlying Issuer; provided,
that Borrower shall not be obligated hereunder to indemnify for any such loss,
cost, expense, or liability that a court of competent jurisdiction finally
determines to have resulted from the gross negligence or willful misconduct of
Issuing Lender or any other member of the Lender Group.
 
(g)         Each Lender and Borrower agree that, in paying any drawing under a
Letter of Credit, neither Issuing Lender nor any Underlying Issuer (as
applicable) shall have any responsibility to obtain any document (other than any
sight draft, certificates and documents expressly required by the Letter of
Credit or the Underlying Letter of Credit (as applicable)) or to ascertain or
inquire as to the validity or accuracy of any such

 
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document or the authority of the Person executing or delivering any such
document.  None of Issuing Lender, any Underlying Issuer, Agent, any of the
Lender-Related Persons or Agent-Related Persons, nor any correspondent,
participant or assignee of Issuing Lender shall be liable to any Lender or any
Loan Party for (i) any action taken or omitted in connection herewith at the
request or with the approval of the Lenders or the Required Lenders, as
applicable; (ii) any action taken or omitted in the absence of gross negligence
or willful misconduct; (iii) any error, omission, interruption, loss or delay in
transmission or delivery of any draft, notice or other communication under or
relating to any Letter of Credit or any error in interpretation of technical
terms; or (iv) the due execution, effectiveness, validity or enforceability of
any document or instrument related to any Letter of Credit or Issuer
Document.  Borrower hereby assumes all risks of the acts or omissions of any
beneficiary or transferee with respect to its use of any Letter of Credit;
provided, that this assumption is not intended to, and shall not, preclude
Borrower from pursuing such rights and remedies as it may have against the
beneficiary or transferee at law or under any other agreement.  None of Issuing
Lender, any Underlying Issuer, Agent, any of the Lender-Related Persons or
Agent-Related Persons, nor any correspondent, participant or assignee of Issuing
Lender or any Underlying Issuer shall be liable or responsible for any of the
matters described in clauses (i) through (vi) of Section 2.11(h) or for any
action, neglect or omission under or in connection with any Letter of Credit or
Issuer Document, including in connection with the issuance or any amendment of
any Letter of Credit, the failure to issue or amend any Letter of Credit, the
honoring or dishonoring of any demand under any Letter of Credit, or the
following of Borrower’s instructions or those contained in the Letter of Credit
or any modifications, amendments, or supplements thereto, and such action or
neglect or omission will bind Borrower.  In furtherance and not in limitation of
the foregoing, Issuing Lender and each Underlying Issuer may accept documents
that appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary (or
Issuing Lender and any Underlying Issuer may refuse to accept and make payment
upon such documents if such documents are not in strict compliance with the
terms of such Letter of Credit and may disregard any requirement in a Letter of
Credit that notice of dishonor be given in a particular manner and any
requirement that presentation be made at a particular place or by a particular
time of day), and neither Issuing Lender nor any Underlying Issuer shall be
responsible for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a 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.  Neither Issuing Lender nor any
Underlying Issuer shall be responsible for the wording of any Letter of Credit
(including any drawing conditions or any terms or conditions that are
ineffective, ambiguous, inconsistent, unduly complicated or reasonably
impossible to satisfy), notwithstanding any assistance Issuing Lender or any
Underlying Issuer may provide to Borrower with drafting or recommending text for
any letter of credit application or with the structuring of any transaction
related to any Letter of Credit, and Borrower hereby acknowledges and agrees
that any such assistance will not constitute legal or other advice by Issuing
Lender or any Underlying Issuer or any representation or warranty by Issuing
Lender or any Underlying Issuer that any such wording or such Letter of Credit
will be effective.  Without limiting the foregoing, Issuing Lender or any
Underlying Issuer may, as it deems appropriate, use in any Letter of Credit any
portion of the language prepared by Borrower and contained in the letter of
credit application relative to drawings under such Letter of Credit.  Borrower
hereby acknowledges and agrees that neither any Underlying Issuer nor any member
of the Lender Group shall be responsible for delays, errors, or omissions
resulting from the malfunction of equipment in connection with any Letter of
Credit.
 
(h)         The obligation of Borrower to reimburse Issuing Lender for each
drawing under each Letter of Credit shall be absolute, unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances, including the following:
 
(i)         any lack of validity or enforceability of such Letter of Credit,
this Agreement, or any other Loan Document,
 
(ii)         the existence of any claim, counterclaim, setoff, defense or other
right that Borrower or any of its Subsidiaries may have at any time against any
beneficiary or any transferee of such Letter of Credit (or any Person for whom
any such beneficiary or any such transferee may be acting), Issuing Lender or
any
 

 
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other Person, whether in connection with this Agreement, the transactions
contemplated hereby or by such Letter of Credit or any agreement or instrument
relating thereto, or any unrelated transaction,
 
(iii)         any draft, demand, certificate or other document presented under
such Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect, or any loss or delay in the transmission or otherwise of any document
required in order to make a drawing under such Letter of Credit,
 
(iv)         any payment by Issuing Lender under such Letter of Credit against
presentation of a draft or certificate that does not substantially or strictly
comply with the terms of such Letter of Credit (including, without limitation,
any requirement that presentation be made at a particular place or by a
particular time of day), or any payment made by Issuing Lender under such Letter
of Credit to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any beneficiary or any
transferee of such Letter of Credit,
 
(v)         any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including any other circumstance that might
otherwise constitute a defense available to, or discharge of, Borrower or any of
its Subsidiaries, or
 
(vi)         the fact that any Default or Event of Default shall have occurred
and be continuing.
 
(i)         Borrower hereby authorizes and directs any Underlying Issuer to
deliver to Issuing Lender all instruments, documents, and other writings and
property received by such Underlying Issuer pursuant to such Underlying Letter
of Credit and to accept and rely upon Issuing Lender’s instructions with respect
to all matters arising in connection with such Underlying Letter of Credit and
the related application.
 
(j)         Borrower acknowledges and agrees that any and all fees, charges,
costs, or commissions in effect from time to time, of Issuing Lender relating to
Letters of Credit or incurred by Issuing Lender relating to Underlying Letters
of Credit, upon the issuance of any Letter of Credit, upon the payment or
negotiation of any drawing under any Letter of Credit, or upon the occurrence of
any other activity with respect to any Letter of Credit (including the transfer,
amendment, or cancellation of any Letter of Credit), together with any and all
fronting fees in effect from time to time related to Letters of Credit, shall be
Lender Group Expenses for purposes of this Agreement and shall be reimbursable
promptly, but in any event, within 3 Business Days after the date on which such
fees, charges, costs, or commissions are first incurred or accrued by Borrower
to Agent for the account of Issuing Lender; it being acknowledged and agreed by
Borrower that, as of the Closing Date, Issuing Lender is entitled to charge
Borrower a fronting fee of 0.125% per annum times the undrawn amount of each
Underlying Letter of Credit and that such fronting fee may be changed from time
to time as mutually agreed by the Issuing Lender and Borrower.
 
(k)         Except with respect to Taxes (which shall be governed solely and
exclusively by Section 16), if by reason of (i) any change after the Closing
Date in any applicable law, treaty, rule, or regulation or any change in the
interpretation or application thereof by any Governmental Authority, or (ii)
compliance by Issuing Lender, any other member of the Lender Group, or
Underlying Issuer with any direction, request, or requirement (irrespective of
whether having the force of law) of any Governmental Authority or monetary
authority including, Regulation D of the Board of Governors as from time to time
in effect (and any successor thereto):
 
(i)         any reserve, deposit, or similar requirement is or shall be imposed
or modified in respect of any Letter of Credit issued or caused to be issued
hereunder or hereby, or
 
(ii)         there shall be imposed on Issuing Lender, any other member of the
Lender Group, or Underlying Issuer any other condition regarding any Letter of
Credit or Reimbursement Undertaking,
 

 
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and the result of the foregoing is to increase, directly or indirectly, the cost
to Issuing Lender, any other member of the Lender Group, or an Underlying Issuer
of issuing, making, participating in, or maintaining any Reimbursement
Undertaking or Letter of Credit or to reduce the amount receivable in respect
thereof, then, and in any such case, Agent may, at any time within a reasonable
period after the additional cost is incurred or the amount received is reduced,
notify Borrower, and Borrower shall pay within 30 days after receipt of demand
therefor, such amounts as Agent may specify to be necessary to compensate
Issuing Lender, any other member of the Lender Group, or an Underlying Issuer
for such additional cost or reduced receipt, together with interest on such
amount from the date of such demand until payment in full thereof at the rate
then applicable to Base Rate Loans hereunder; provided, that (A) Borrower shall
not be required to provide any compensation pursuant to this Section 2.11(k) for
any such amounts incurred more than 180 days prior to the date on which the
demand for payment of such amounts is first made to Borrower, and (B) if an
event or circumstance giving rise to such amounts is retroactive, then the
180-day period referred to above shall be extended to include the period of
retroactive effect thereof.  The determination by Agent of any amount due
pursuant to this Section 2.11(k), as set forth in a certificate setting forth
the calculation thereof in reasonable detail, shall, in the absence of manifest
or demonstrable error, be final and conclusive and binding on all of the parties
hereto.
 
(l)         Unless otherwise expressly agreed by Issuing Lender and Borrower
when a Letter of Credit is issued, (i) the rules of the ISP and the UCP 600
shall apply to each standby Letter of Credit, and (ii) the rules of the UCP 600
shall apply to each commercial Letter of Credit.
 
(m)         In the event of a direct conflict between the provisions of this
Section 2.11 and any provision contained in any Issuer Document, it is the
intention of the parties hereto that such provisions be read together and
construed, to the fullest extent possible, to be in concert with each other.  In
the event of any actual, irreconcilable conflict that cannot be resolved as
aforesaid, the terms and provisions of this Section 2.11 shall control and
govern.
 
2.12         LIBOR Option.
 
(a)         Interest and Interest Payment Dates.  In lieu of having interest
charged at the rate based upon the Base Rate, Borrower shall have the option,
subject to Section 2.12(b) below (the “LIBOR Option”) to have interest on all or
a portion of the Revolving Loans be charged (whether at the time when made
(unless otherwise provided herein), upon conversion from a Base Rate Loan to a
LIBOR Rate Loan, or upon continuation of a LIBOR Rate Loan as a LIBOR Rate Loan)
at a rate of interest based upon the LIBOR Rate.  Interest on LIBOR Rate Loans
shall be payable on the earliest of (i) the last day of the Interest Period
applicable thereto; provided, that, subject to the following clauses (ii) and
(iii), in the case of any Interest Period greater than 3 months in duration,
interest shall be payable at 3 month intervals after the commencement of the
applicable Interest Period and on the last day of such Interest Period), (ii)
the date on which all or any portion of the Obligations are accelerated pursuant
to the terms hereof, or (iii) the date on which this Agreement is terminated
pursuant to the terms hereof.  On the last day of each applicable Interest
Period, unless Borrower properly has exercised the LIBOR Option with respect
thereto, the interest rate applicable to such LIBOR Rate Loan automatically
shall convert to the rate of interest then applicable to Base Rate Loans of the
same type hereunder.  At any time that an Event of Default has occurred and is
continuing, Borrower no longer shall have the option to request that Revolving
Loans bear interest at a rate based upon the LIBOR Rate.
 
(b)         LIBOR Election.
 
(i)         Borrower may, at any time and from time to time, so long as no Event
of Default has occurred and is continuing, elect to exercise the LIBOR Option by
notifying Agent prior to 11:00 a.m. at least 3 Business Days prior to the
commencement of the proposed Interest Period (the “LIBOR Deadline”).  Notice of
Borrower’s election of the LIBOR Option for a permitted portion of the Revolving
Loans and an Interest Period pursuant to this Section shall be made by delivery
to Agent of a LIBOR Notice received by Agent before the LIBOR Deadline, or by
telephonic notice received by Agent before the LIBOR Deadline (to be confirmed
by
 

 
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delivery to Agent of a LIBOR Notice received by Agent prior to 5:00 p.m. on the
same day).  Promptly upon its receipt of each such LIBOR Notice, Agent shall
provide a copy thereof to each of the Affected Lenders.
 
(ii)         Each LIBOR Notice shall be irrevocable and binding on Borrower.  In
connection with each LIBOR Rate Loan, Borrower shall indemnify, defend, and hold
Agent and the Lenders harmless against any loss, cost, or expense (other than
Taxes, which shall be governed solely and exclusively by Section 16) actually
incurred by Agent or any Lender as a result of (A) the payment of any principal
of any LIBOR Rate Loan other than on the last day of an Interest Period
applicable thereto (including as a result of an Event of Default), (B) the
conversion of any LIBOR Rate Loan other than on the last day of the Interest
Period applicable thereto, or (C) the failure to borrow, convert, continue or
prepay any LIBOR Rate Loan on the date specified in any LIBOR Notice delivered
pursuant hereto (such losses, costs, or expenses, “Funding Losses”).  A
certificate of Agent or a Lender delivered to Borrower setting forth in
reasonable detail any amount or amounts that Agent or such Lender is entitled to
receive pursuant to this Section 2.12 shall be conclusive absent manifest
error.  Borrower shall pay such amount to Agent or the Lender, as applicable,
within 30 days of the date of its receipt of such certificate.  If a payment of
a LIBOR Rate Loan on a day other than the last day of the applicable Interest
Period would result in a Funding Loss, Agent may, in its sole discretion at the
request of Borrower, hold the amount of such payment as cash collateral in
support of the Obligations until the last day of such Interest Period and apply
such amounts to the payment of the applicable LIBOR Rate Loan on such last day,
it being agreed that Agent has no obligation to so defer the application of
payments to any LIBOR Rate Loan and that, in the event that Agent does not defer
such application, Borrower shall be obligated to pay any resulting Funding
Losses.
 
(iii)         Unless Agent, in its sole discretion, agrees otherwise, Borrower
shall have not more than 5 LIBOR Rate Loans in effect at any given
time.  Borrower only may exercise the LIBOR Option for proposed LIBOR Rate Loans
of at least $1,000,000.
 
(c)         Conversion.  Borrower may convert LIBOR Rate Loans to Base Rate
Loans at any time; provided, that in the event that LIBOR Rate Loans are
converted or prepaid on any date that is not the last day of the Interest Period
applicable thereto, including as a result of any prepayment through the required
application by Agent of any payments or proceeds of Collateral in accordance
with Section 2.4(b) or for any other reason, including early termination of the
term of this Agreement or acceleration of all or any portion of the Obligations
pursuant to the terms hereof, Borrower shall indemnify, defend, and hold Agent
and the Lenders and their Participants harmless against any and all Funding
Losses in accordance with Section 2.12 (b)(ii).
 
(d)         Special Provisions Applicable to LIBOR Rate.
 
(i)         The LIBOR Rate may be adjusted by Agent with respect to any Lender
on a prospective basis to take into account any additional or increased costs to
such Lender of maintaining or obtaining any eurodollar deposits or increased
costs, in each case, due to changes in applicable law (other than changes in
laws relative to Taxes, which shall be governed solely and exclusively by
Section 16) occurring subsequent to the commencement of the then applicable
Interest Period, and changes in the reserve requirements imposed by the Board of
Governors, which additional or increased costs would increase the cost of
funding or maintaining loans bearing interest at the LIBOR Rate.  In any such
event, the Affected Lender shall give Borrower and Agent notice of such a
determination and adjustment and Agent promptly shall transmit the notice to
each other Lender and, upon its receipt of the notice from the Affected
Lender,  Borrower may, by notice to such Affected Lender (A) require such Lender
to furnish to Borrower a statement setting forth in reasonable detail the basis
for adjusting such LIBOR Rate and the method for determining the amount of such
adjustment, or (B) repay the LIBOR Rate Loans of such Lender with respect to
which such adjustment is made (together with any amounts due under Section
2.12(b)(ii)).
 
(ii)         In the event that any change in market conditions or any law,
regulation, treaty, or directive, or any change therein or in the interpretation
or application thereof, shall at any time after the date hereof, in the
reasonable opinion of any Lender, make it unlawful or impractical for such
Lender to fund or maintain LIBOR Rate Loans or to continue such funding or
maintaining, or to determine or charge interest rates at the
 

 
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LIBOR Rate, such Lender shall give notice of such changed circumstances to Agent
and Borrower and Agent promptly shall transmit the notice to each other Lender
and (y) in the case of any LIBOR Rate Loans of such Lender that are outstanding,
the date specified in such Lender’s notice shall be deemed to be the last day of
the Interest Period of such LIBOR Rate Loans, and interest upon the LIBOR Rate
Loans of such Lender thereafter shall accrue interest at the rate then
applicable to Base Rate Loans, and (z) Borrower shall not be entitled to elect
the LIBOR Option until such Lender determines that it would no longer be
unlawful or impractical to do so.
 
(e)         No Requirement of Matched Funding.  Anything to the contrary
contained herein notwithstanding, neither Agent, nor any Lender, nor any of
their Participants, is required actually to acquire eurodollar deposits to fund
or otherwise match fund any Obligation as to which interest accrues at the LIBOR
Rate.
 
2.13         Capital Requirements.
 
(a)         Except with respect to Taxes (which shall be governed solely and
exclusively by Section 16), if, after the date hereof, any Lender determines
that (i) the adoption of or change in any law, rule, regulation or guideline
regarding capital or reserve requirements for banks or bank holding companies,
or any change in the interpretation, implementation, or application thereof by
any Governmental Authority charged with the administration thereof, or (ii)
compliance by such Lender or its parent bank holding company with any guideline,
request or directive of any such entity regarding capital adequacy (whether or
not having the force of law), has the effect of reducing the return on such
Lender’s or such holding company’s capital as a consequence of such Lender’s
Commitments hereunder to a level below that which such Lender or such holding
company could have achieved but for such adoption, change, or compliance (taking
into consideration such Lender’s or such holding company’s then existing
policies with respect to capital adequacy and assuming the full utilization of
such entity’s capital) by any amount deemed by such Lender to be material, then
such Lender may notify Borrower and Agent thereof.  Following receipt of such
notice, Borrower agrees to pay such Lender on demand the amount of such
reduction of return of capital as and when such reduction is determined, payable
within 30 days after presentation by such Lender of a statement in the amount
and setting forth in reasonable detail such Lender’s calculation thereof and the
assumptions upon which such calculation was based (which statement shall be
deemed true and correct absent manifest error).  In determining such amount,
such Lender may use any reasonable averaging and attribution methods.  Failure
or delay on the part of any Lender to demand compensation pursuant to this
Section shall not constitute a waiver of such Lender’s right to demand such
compensation; provided that Borrower shall not be required to compensate a
Lender pursuant to this Section for any reductions in return incurred more than
180 days prior to the date that such Lender notifies Borrower of such law, rule,
regulation or guideline giving rise to such reductions and of such Lender’s
intention to claim compensation therefor; provided further that if such claim
arises by reason of the adoption of or change in any law, rule, regulation or
guideline that is retroactive, then the 180-day period referred to above shall
be extended to include the period of retroactive effect thereof.
 
(b)         If any Lender requests additional or increased costs referred to in
Section 2.12(d)(i) or amounts under Section 2.11(k) or Section 2.13(a) or sends
a notice under Section 2.12(d)(ii) relative to changed circumstances (any such
Lender, an “Affected Lender”), then such Affected Lender shall use reasonable
efforts to promptly designate a different one of its lending offices or to
assign its rights and obligations hereunder to another of its offices or
branches, if (i) in the reasonable judgment of such Affected Lender, such
designation or assignment would eliminate or reduce amounts payable pursuant to
Section 2.12(d)(i), Section 2.11(k) or Section 2.13(a), as applicable, or would
eliminate the illegality or impracticality of funding or maintaining LIBOR Rate
Loans and (ii) in the reasonable judgment of such Affected Lender, such
designation or assignment would not subject it to any material unreimbursed cost
or expense and would not otherwise be materially disadvantageous to
it.  Borrower agrees to pay all reasonable out-of-pocket costs and expenses
incurred by such Affected Lender in connection with any such designation or
assignment.  If, after such reasonable efforts, such Affected Lender does not so
designate a different one of its lending offices or assign its rights to another
of its offices or branches so as to eliminate Borrower’s obligation to pay any
future amounts to such Affected Lender pursuant to Section 2.12(d)(i), Section
2.11(k) or Section 2.13(a), as applicable, or to enable Borrower to obtain LIBOR
Rate Loans, then Borrower (without prejudice to any amounts then due to such
Affected Lender under Section 2.12(d)(i), Section 2.11(k) or
 

 
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Section 2.13(a), as applicable) may, unless prior to the effective date of any
such assignment the Affected Lender withdraws its request for such additional
amounts under Section 2.12(d)(i), Section 2.11(k) or Section 2.13(a), as
applicable, or indicates that it is no longer unlawful or impractical to fund or
maintain LIBOR Rate Loans, may seek a substitute Lender reasonably acceptable to
Agent to purchase the Obligations owed to such Affected Lender and such Affected
Lender’s Commitments hereunder (a “Replacement Lender”), and if such Replacement
Lender agrees to such purchase, such Affected Lender shall assign to the
Replacement Lender its Obligations and Commitments, pursuant to an Assignment
and Acceptance Agreement, and upon such purchase by the Replacement Lender, such
Replacement Lender shall be deemed to be a “Lender” for purposes of this
Agreement and such Affected Lender shall cease to be a “Lender” for purposes of
this Agreement.
 
(c)         Notwithstanding anything herein to the contrary, the issuance of any
rules, regulations or directions under the Dodd-Frank Wall Street Reform and
Consumer Protection Act and all requests, rules, guidelines or directives
thereunder or issued in connection therewith after the date of this Agreement
shall be deemed to be a change in law, rule, regulation or guideline for
purposes of Sections 2.12 and 2.13 and the protection of Sections 2.12 and 2.13
shall be available to each Lender and Issuing Lender regardless of any possible
contention of the invalidity or inapplicability of the law, rule, regulation,
guideline or other change or condition which shall have occurred or been
imposed, so long as it shall be customary for lenders or issuing banks affected
thereby to comply therewith.  Notwithstanding any other provision herein, no
Lender or Issuing Lender shall demand compensation pursuant to this Section 2.13
if it shall not at the time be the general policy or practice of such Lender or
Issuing Lender (as the case may be) to demand such compensation in similar
circumstances under comparable provisions of other credit agreements, if any.
 
2.14         Accordion.
 
(a)         At any time during the period from and after the date on which the
Primary Syndication has been completed, at the option of Borrower (but subject
to the conditions set forth in clause (b) below), the Commitments and the
Maximum Revolver Amount may be increased by an amount in the aggregate for all
such increases of the Commitments and the Maximum Revolver Amount not to exceed
the Available Increase Amount (each such increase, an “Increase”).  Agent shall
invite each Lender to increase its Commitments (for the avoidance of doubt, no
Lender shall have any obligation whatsoever to provide or consider providing any
requested Increase and may refuse to provide any request to provide any
requested Increase for any reason or no reason at all) in connection with a
proposed Increase at the interest margin proposed by Borrower, and if sufficient
Lenders do not agree to increase their Commitments in connection with such
proposed Increase, then Agent or Borrower may invite any prospective lender who
is reasonably satisfactory to Agent and Borrower to become a Lender in
connection with a proposed Increase.  Any Increase shall be in an amount of at
least $10,000,000 and integral multiples of $5,000,000 in excess thereof.  In no
event may the Commitments and the Maximum Revolver Amount be increased pursuant
to this Section 2.14 on more than 2 occasions in the aggregate for all such
Increases.  Additionally, for the avoidance of doubt, it is understood and
agreed that in no event shall the aggregate amount of the Increases to the
Commitments exceed $25,000,000.
 
(b)         Each of the following shall be conditions precedent to any Increase
of the Commitments and the Maximum Revolver Amount:
 
(i)         Agent or Borrower have obtained the commitment of one or more
Lenders (or other prospective lenders) reasonably satisfactory to Agent and
Borrower to provide the applicable Increase and any such Lenders (or prospective
lenders), Borrower, and Agent have signed a joinder agreement to this Agreement
(an “Increase Joinder”), in form and substance reasonably satisfactory to Agent,
to which such Lenders (or prospective lenders), Borrower, and Agent are party,
 
(ii)         each of the conditions precedent set forth in Section 3.2 are
satisfied,
 
(iii)         Borrower has delivered to Agent updated pro forma Projections
(after giving effect to the applicable Increase) for Loan Parties evidencing
compliance on a pro forma basis with Section 7 for the 12
 

 
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months (on a month-by-month basis) immediately following the proposed date of
the applicable Increase (calculated as if a Financial Covenant Trigger Period is
then in effect),
 
(iv)         Borrower shall have reached agreement with the Lenders (or
prospective lenders) agreeing to the increased Commitments with respect to the
interest margins applicable to Revolving Loans to be made pursuant to the
increased Commitments (which interest margins may be with respect to Revolving
Loans made pursuant to the increased Commitments, higher than, equal to, or less
than the interest margins applicable to Revolving Loans set forth in this
Agreement immediately prior to the date of the increased Commitments (the date
of the effectiveness of the increased Commitments and the Maximum Revolver
Amount, the “Increase Date”)) and shall have communicated the amount of such
interest margins to Agent.  Any Increase Joinder may, with the consent of Agent,
Borrower and the Lenders or prospective lenders agreeing to the proposed
Increase, effect such amendments to this Agreement and the other Loan Documents
as may be necessary or appropriate to effectuate the provisions of this Section
2.14 (including any amendment necessary to effectuate the interest margins for
the Revolving Loans to be made pursuant to the increased Commitments).  Anything
to the contrary contained herein notwithstanding, if the interest margin that is
to be applicable to the Revolving Loans to be made pursuant to the increased
Commitments are higher than the interest margin applicable to the Revolving
Loans immediately prior to the applicable Increase Date (the amount by which the
interest margin is higher, the “Excess”), then the interest margin applicable to
the Revolving Loans immediately prior to the Increase Date shall be increased by
the amount of the Excess, effective on the applicable Increase Date, and without
the necessity of any action by any party hereto,
 
(v)         Agent has received payment in full of the fee that is payable to
Agent pursuant to the Fee Letter in connection with such Increase, and
 
(vi)         except as described in the foregoing clause (iv), the terms and
conditions with respect to the Increase shall be same as those which were in
effect immediately prior to giving effect to such Increase.
 
(c)         Unless otherwise specifically provided herein, all references in
this Agreement and any other Loan Document to Revolving Loans shall be deemed,
unless the context otherwise requires, to include Revolving Loans made pursuant
to the increased Commitments and Maximum Revolver Amount pursuant to this
Section 2.14.
 
(d)         Each of the Lenders having a Commitment prior to the Increase Date
(the “Pre-Increase Lenders”) shall assign to any Lender which is acquiring a new
or additional Commitment on the Increase Date (the “Post-Increase Lenders”), and
such Post-Increase Lenders shall purchase from each Pre-Increase Lender, at the
principal amount thereof, such interests in the Revolving Loans and
participation interests in Letters of Credit on such Increase Date as shall be
necessary in order that, after giving effect to all such assignments and
purchases, such Revolving Loans and participation interests in Letters of Credit
will be held by Pre-Increase Lenders and Post-Increase Lenders ratably in
accordance with their Pro Rata Share after giving effect to such increased
Commitments.
 
(e)         The Revolving Loans, Commitments, and Maximum Revolver Amount
established pursuant to this Section 2.14 shall constitute Revolving Loans,
Commitments, and Maximum Revolver Amount under, and shall be entitled to all the
benefits afforded by, this Agreement and the other Loan Documents, and shall,
without limiting the foregoing, benefit equally and ratably from any guarantees
and the security interests created by the Loan Documents.  Borrower shall take
any actions reasonably required by Agent to ensure and demonstrate that the
Liens and security interests granted by the Loan Documents continue to be
perfected under the Code or otherwise after giving effect to the establishment
of any such new Commitments and Maximum Revolver Amount.
 
(f)         If, following Borrower’s request for an Increase pursuant to this
Section 2.14, a Lender assigns (or is in discussions with another Person
regarding a proposed assignment) all or a portion of its Obligations, and
delegates (or is in discussions with another Person regarding a proposed
delegation) of all of its
 

 
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Commitments, such Lender shall be entitled to consummate such assignment and
delegation without any obligation to allocate any portion thereof to the
requested Increase.
 
3.         CONDITIONS; TERM OF AGREEMENT.
 
3.1         Conditions Precedent to the Initial Extension of Credit.  The
obligation of each Lender to make the initial extensions of credit provided for
hereunder is subject to the fulfillment, to the satisfaction of Agent and each
Lender, of each of the conditions precedent set forth on Schedule 3.1 (the
making of such initial extensions of credit by a Lender being conclusively
deemed to be its satisfaction or waiver of the conditions precedent).
 
3.2         Conditions Precedent to all Extensions of Credit.  The obligation of
the Lender Group (or any member thereof) to make any Revolving Loans hereunder
(or to extend any other credit hereunder) at any time shall be subject to the
following conditions precedent:
 
(a)         the representations and warranties of Borrower or its Subsidiaries
contained in this Agreement or in the other Loan Documents shall be true and
correct in all material respects (except that such materiality qualifier shall
not be applicable to any representations and warranties that already are
qualified or modified by materiality in the text thereof) on and as of the date
of such extension of credit, as though made on and as of such date (except to
the extent that such representations and warranties relate solely to an earlier
date, in which case such representations and warranties shall be true and
correct in all material respects (except that such materiality qualifier shall
not be applicable to any representations and warranties that already are
qualified or modified by materiality in the text thereof) as of such earlier
date); and
 
(b)         no Default or Event of Default shall have occurred and be continuing
on the date of such extension of credit, nor shall either result from the making
thereof.
 
3.3         Maturity.  This Agreement shall continue in full force and effect
for a term ending on the Maturity Date.
 
3.4         Effect of Maturity.  On the Maturity Date, all commitments of the
Lender Group to provide additional credit hereunder shall automatically be
terminated and all of the Obligations (other than Contingent Obligations)
immediately shall become due and payable without notice or demand and Borrower
shall be required to repay all of the Obligations (other than Contingent
Obligations) in full.  No termination of the obligations of the Lender Group
(other than payment in full of the Obligations and termination of the
Commitments) shall relieve or discharge any Loan Party of its duties,
obligations, or covenants hereunder or under any other Loan Document and Agent’s
Liens in the Collateral shall continue to secure the Obligations and shall
remain in effect until all Obligations have been paid in full and the
Commitments have been terminated.  When all of the Obligations have been paid in
full and the Lender Group’s obligations to provide additional credit under the
Loan Documents have been terminated irrevocably, Agent will, at Borrower’s sole
expense, execute and deliver any termination statements, lien releases,
discharges of security interests, and other similar discharge or release
documents (and, if applicable, in recordable form) as are reasonably necessary
to release, as of record, Agent’s Liens and all notices of security interests
and liens previously filed by Agent.
 
3.5         Early Termination by Borrower.  Borrower has the option, at any time
upon 5 Business Days prior written notice to Agent, to terminate this Agreement
and terminate the Commitments hereunder by repaying to Agent all of the
Obligations in full.  The foregoing notwithstanding, (a) Borrower may rescind
termination notices relative to proposed payments in full of the Obligations
with the proceeds of third party Indebtedness if the closing for such issuance
or incurrence does not happen on or before the date of the proposed termination
(in which case, a new notice shall be required to be sent in connection with any
subsequent termination), and (b) Borrower may extend the date of termination at
any time with the consent of Agent (which consent shall not be unreasonably
withheld or delayed).
 

 
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3.6         Conditions Subsequent.  The obligation of the Lender Group (or any
member thereof) to continue to make Revolving Loans (or otherwise extend credit
hereunder) is subject to the fulfillment, on or before the date applicable
thereto, of the conditions subsequent set forth on Schedule 3.6 (the failure by
Borrower to so perform or cause to be performed such conditions subsequent as
and when required by the terms thereof (unless such date is extended, in
writing, by Agent, which Agent may do without obtaining the consent of the other
members of the Lender Group), shall constitute an Event of Default).
 
4.         REPRESENTATIONS AND WARRANTIES.
 
In order to induce the Lender Group to enter into this Agreement, Borrower makes
the following representations and warranties to the Lender Group which shall be
true, correct, and complete, in all material respects (except that such
materiality qualifier shall not be applicable to any representations and
warranties that already are qualified or modified by materiality in the text
thereof), as of the Closing Date, and shall be true, correct, and complete, in
all material respects (except that such materiality qualifier shall not be
applicable to any representations and warranties that already are qualified or
modified by materiality in the text thereof), as of the date of the making of
each Revolving Loan (or other extension of credit) made thereafter, as though
made on and as of the date of such Revolving Loan (or other extension of credit)
(except to the extent that such representations and warranties relate solely to
an earlier date, in which case such representations and warranties shall be true
and correct in all material respects (except that such materiality qualifier
shall not be applicable to any representations and warranties that already are
qualified or modified by materiality in the text thereof) as of such earlier
date) and such representations and warranties shall survive the execution and
delivery of this Agreement:
 
4.1         Due Organization and Qualification; Subsidiaries.
 
(a)         Each Loan Party (i) is duly organized and existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization, (ii) is qualified to do business in any state where the failure to
be so qualified could reasonably be expected to result in a Material Adverse
Effect, and (iii) has all requisite power and authority to own and operate its
properties, to carry on its business as now conducted and as proposed to be
conducted, to enter into the Loan Documents to which it is a party and to carry
out the transactions contemplated thereby.
 
(b)         Set forth on Schedule 4.1(b) (as such Schedule may be updated from
time to time to reflect changes resulting from transactions permitted under this
Agreement) is a complete and accurate description of the authorized Equity
Interest of Borrower, by class, and, as of the Closing Date, a description of
the number of shares of each such class that are issued and outstanding.
 
(c)         Set forth on Schedule 4.1(c) (as such Schedule may be updated from
time to time to reflect changes resulting from transactions permitted under this
Agreement), is a complete and accurate list of the Loan Parties’ direct and
indirect Subsidiaries, showing: (i) the number of shares of each class of common
and preferred Equity Interests authorized for each of such Subsidiaries, and
(ii) the number and the percentage of the outstanding shares of each such class
owned directly or indirectly by Borrower.  All of the outstanding Equity
Interest of each such Subsidiary has been validly issued and is fully paid and
non-assessable.
 
(d)         Except as set forth on Schedule 4.1(c), there are no subscriptions,
options, warrants, or calls relating to any shares of Borrower’s or its Domestic
Subsidiaries’ Equity Interest, including any right of conversion or exchange
under any outstanding security or other instrument.  Borrower is not subject to
any obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of its Equity Interest or any security convertible into or
exchangeable for any of its Equity Interest.
 

 
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4.2         Due Authorization; No Conflict.
 
(a)         As to each Loan Party, the execution, delivery, and performance by
such Loan Party of the Loan Documents to which it is a party have been duly
authorized by all necessary action on the part of such Loan Party.
 
(b)         As to each Loan Party, the execution, delivery, and performance by
such Loan Party of the Loan Documents to which it is a party do not and will not
(i) violate any material provision of federal, state, or local law or regulation
applicable to any Loan Party or its Subsidiaries, the Governing Documents of any
Loan Party or its Subsidiaries, or any order, judgment, or decree of any court
or other Governmental Authority binding on any Loan Party or its Subsidiaries,
(ii) conflict with, result in a breach of, or constitute (with due notice or
lapse of time or both) a default under any Material Contract of any Loan Party
(except those as to which waivers or consents have been obtained) where any such
conflict, breach or default could individually or in the aggregate reasonably be
expected to have a Material Adverse Effect, (iii) result in or require the
creation or imposition of any Lien of any nature whatsoever upon any assets of
any Loan Party, other than Permitted Liens, or (iv) require any approval of any
holder of Equity Interest of a Loan Party or any approval or consent of any
Person under any Material Contract of any Loan Party, other than consents or
approvals that have been obtained and that are still in force and effect and
except, in the case of Material Contracts, for consents or approvals, the
failure to obtain could not individually or in the aggregate reasonably be
expected to cause a Material Adverse Effect.
 
4.3         Governmental Consents.  The execution, delivery, and performance by
each Loan Party of the Loan Documents to which such Loan Party is a party and
the consummation of the transactions contemplated by the Loan Documents do not
and will not require any registration with, consent, or approval of, or notice
to, or other action with or by, any Governmental Authority, other than
registrations, consents, approvals, notices, or other actions that have been
obtained and that are still in force and effect and except for filings and
recordings with respect to the Collateral to be made, or otherwise delivered to
Agent for filing or recordation, as of the Closing Date (or, if later, as
specified in Schedule 3.6 or as required pursuant to the Guaranty and Security
Agreement).
 
4.4         Binding Obligations; Perfected Liens.
 
(a)         Each Loan Document has been duly executed and delivered by each Loan
Party that is a party thereto and is the legally valid and binding obligation of
such Loan Party, enforceable against such Loan Party in accordance with its
respective terms, except as enforcement may be limited by equitable principles
(whether enforcement is sought in equity or at law) or by bankruptcy,
insolvency, reorganization, moratorium, or similar laws relating to or limiting
creditors’ rights generally.
 
(b)         Agent’s Liens are (other than with respect to the Excluded
Collateral) validly created, perfected (other than (i) money, (ii)
letter-of-credit rights (other than supporting obligations, (iii) commercial
tort claims (other than those that, by the terms of the Guaranty and Security
Agreement, are required to be perfected), and (v) any Deposit Accounts and
Securities Accounts (other than Deposit Accounts that constitute Excluded
Collateral (as such term is defined in the Guaranty and Security Agreement)) not
subject to a Control Agreement as permitted by Section 7(c) of the Guaranty and
Security Agreement, and subject only to the filing of financing statements, in
each case, in the appropriate filing offices), and first priority Liens, subject
only to Permitted Liens which are non-consensual Permitted Liens.
 
4.5         Title to Assets; No Encumbrances.  Each of the Loan Parties and its
Subsidiaries has (a) good, marketable and legal title to (in the case of fee
interests in real property, other than unpatented mining and millsite claims),
(b) valid leasehold interests in (in the case of leasehold interests in real or
personal property), and (c) good and marketable title to or a license or other
right of use (in the case of all other personal property), all of their
respective assets reflected in their most recent financial statements delivered
pursuant to Section 5.1, in each case except for assets disposed of since the
date of such financial statements to the extent permitted hereby and except for
minor defects in title to property that do not materially interfere with its
ability to conduct its business as currently conducted or to use such property
for their intended purposes, which, in the aggregate, represent all assets
 

 
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material to the conduct of business of the Loan Parties and their respective
Subsidiaries.  After giving effect to the transactions contemplated hereby, all
of such assets are free and clear of Liens except for Permitted Liens.
 
4.6         Litigation.
 
(a)         There are no actions, suits, or proceedings pending or, to the
knowledge of Borrower threatened in writing against a Loan Party or any of its
Subsidiaries that either individually or in the aggregate could reasonably be
expected to result in a Material Adverse Effect.
 
(b)         Schedule 4.6 sets forth a complete and accurate description, with
respect to each of the actions, suits, or proceedings with asserted liabilities
in excess of, or that could reasonably be expected to result in liabilities in
excess of, $500,000 that, as of the Closing Date, is pending or, to the
knowledge of Borrower threatened against a Loan Party or any of its
Subsidiaries, of (i) the parties to such actions, suits, or proceedings, (ii)
the nature of the dispute that is the subject of such actions, suits, or
proceedings, (iii) the procedural status, as of the Closing Date, with respect
to such actions, suits, or proceedings, and (iv) whether any liability of the
Loan Parties and their Subsidiaries in connection with such actions, suits, or
proceedings is covered by insurance.
 
4.7         Compliance with Laws.  No Loan Party nor any of its Subsidiaries
(a) is in violation of any applicable laws, rules, regulations, executive
orders, or codes (including Environmental Laws, Mining Permits and MSHA) that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect, or (b) is subject to or in default with respect to any
final judgments, writs, injunctions, decrees, rules or regulations of any court
or any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect.  Schedule 4.7 sets forth a complete and accurate list
and description with respect to each notice received by Borrower or any of its
Affiliates with respect to violation(s) of safety or health regulations
applicable to Borrower or any of its Subsidiaries which could reasonably be
expected to result in a fine or cost of corrective action in excess of $500,000
in the aggregate at any one time outstanding and any corrective actions taken in
response thereto.
 
4.8         Financial Statements; No Material Adverse Effect.  All historical
financial statements relating to the Loan Parties and their Subsidiaries that
have been delivered by Borrower to Agent have been prepared in accordance with
GAAP (except, in the case of unaudited financial statements, for the lack of
footnotes and being subject to year-end audit adjustments) and present fairly in
all material respects, the consolidated financial condition as of the date
thereof and results of operations for the period then ended of the Loan Parties
and their Subsidiaries.  All historical financial statements relating to the
Loan Parties (exclusive of their other Subsidiaries) that have been delivered by
Borrower to Agent have been prepared in accordance with GAAP (except, in the
case of unaudited financial statements, for the lack of footnotes and being
subject to year-end audit adjustments) and present fairly in all material
respects, the financial condition as of the date thereof and results of
operations for the period then ended of the Loan Parties (exclusive of their
other Subsidiaries).  Since September 30, 2011, no event, circumstance, or
change has occurred that has or could reasonably be expected to result in a
Material Adverse Effect with respect to the Loan Parties.
 
4.9         Solvency; Fraudulent Transfers.
 
(a)         The Loan Parties, taken as a whole, are Solvent.
 
(b)         No transfer of property is being made by any Loan Party and no
obligation is being incurred by any Loan Party in connection with the
transactions contemplated by this Agreement or the other Loan Documents with the
intent to hinder, delay, or defraud either present or future creditors of such
Loan Party.
 
4.10         Employee Benefits.  No Loan Party, none of their Subsidiaries, nor
any of their ERISA Affiliates maintains or contributes to any Benefit Plan.
 

 
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4.11         Environmental Condition.  Except as set forth on Schedule 4.11, (a)
to Borrower’s knowledge, no Loan Party’s nor any of its Subsidiaries’ properties
or assets has ever been used by a Loan Party, its Subsidiaries, or by previous
owners or operators in the disposal of, or to produce, store, handle, treat,
release, or transport, any Hazardous Materials, where such disposal, production,
storage, handling, treatment, release or transport was in violation, in any
material respect, of any applicable Environmental Law that could reasonably be
expected to result in liabilities in excess of $10,000,000, (b) to Borrower’s
knowledge no Loan Party’s nor any of its Subsidiaries’ properties or assets has
ever been designated or identified in any manner pursuant to any environmental
protection statute as a Hazardous Materials disposal site, (c) no Loan Party nor
any of its Subsidiaries has received notice that a Lien arising under any
Environmental Law has attached to any revenues or to any real property owned or
operated by a Loan Party or its Subsidiaries, except to the extent that
aggregate amount of obligations secured by such Liens does not exceed $5,000,000
in the aggregate, and (d) no Loan Party nor any of its Subsidiaries nor any of
their respective facilities or operations is subject to any outstanding written
order, consent decree, or settlement agreement with any Person relating to any
Environmental Law or Environmental Liability that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.
 
4.12         Complete Disclosure.  All factual information taken as a whole
(other than forward-looking information, projections, information of a general
economic nature, and general information about Borrower’s industry) furnished by
or on behalf of a Loan Party or its Subsidiaries in writing to Agent or any
Lender (including all information contained in the Schedules hereto or in the
other Loan Documents) for purposes of or in connection with this Agreement or
the other Loan Documents, and all other such factual information taken as a
whole (other than forward-looking information and projections, information of a
general economic nature, and general information about Borrower’s industry)
hereafter furnished by or on behalf of a Loan Party or its Subsidiaries in
writing to Agent or any Lender will be, true and accurate, in all material
respects, on the date as of which such information is dated or certified and not
incomplete by omitting to state any fact necessary to make such information
(taken as a whole) not misleading in any material respect at such time in light
of the circumstances under which such information was provided.  The Projections
delivered to Agent on October 25, 2011 represent, and as of the date on which
any other Projections are delivered to Agent, such additional Projections
represent, Borrower’s good faith estimate, on the date such Projections are
delivered, of the Loan Parties’ future performance for the periods covered
thereby based upon assumptions believed by Borrower to be reasonable at the time
of the delivery thereof to Agent (it being understood that such Projections are
subject to significant uncertainties and contingencies, many of which are beyond
the control of the Loan Parties and their Subsidiaries, and no assurances can be
given that such Projections will be realized, and although reflecting Borrower’s
good faith estimate, such Projections are not to be viewed as facts, and that
actual results during the period or periods covered by the Projections may
differ materially from such Projections).
 
4.13         Patriot Act.  To the extent applicable, each Loan Party is in
compliance, in all material respects, with the (a) Trading with the Enemy Act,
as amended, and each of the foreign assets control regulations of the United
States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any
other enabling legislation or executive order relating thereto, and (b) Uniting
and Strengthening America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism (USA Patriot Act of 2001) (the “Patriot Act”).  No part
of the proceeds of the loans made hereunder will be used by any Loan Party or
any of their Affiliates, directly or indirectly, for any payments to any
governmental official or employee, political party, official of a political
party, candidate for political office, or anyone else acting in an official
capacity, in order to obtain, retain or direct business or obtain any improper
advantage, in violation of the United States Foreign Corrupt Practices Act of
1977, as amended.
 
4.14         Indebtedness.  Set forth on Schedule 4.14 is a true and complete
list of all Indebtedness of each Loan Party and each of its Subsidiaries with a
principal balance of more than $2,000,000 outstanding immediately prior to the
Closing Date that is to remain outstanding immediately after giving effect to
the closing hereunder on the Closing Date and such Schedule accurately sets
forth the aggregate principal amount of such Indebtedness as of the Closing
Date.
 

 
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4.15         Payment of Taxes.  Except as otherwise permitted under Section 5.5,
all Tax returns and reports of each Loan Party and its Subsidiaries required to
be filed by any of them have been timely filed (taking into account valid
extensions), and all Taxes shown on such tax returns to be due and payable have
been paid when due and payable (taking into account valid extensions), other
than Taxes that are the subject of a Permitted Protest.  Each Loan Party and
each of its Subsidiaries have made adequate provision in accordance with GAAP
for all taxes not yet due and payable.  Borrower knows of no proposed tax
assessment against a Loan Party or any of its Subsidiaries that is not being
actively contested by such Loan Party or such Subsidiary diligently, in good
faith, and by appropriate proceedings; provided such reserves or other
appropriate provisions, if any, as shall be required in conformity with GAAP
shall have been made or provided therefor.
 
4.16         Margin Stock.  No Loan Party nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock.  No part of
the proceeds of the loans made to Borrower will be used to purchase or carry any
Margin Stock or to extend credit to others for the purpose of purchasing or
carrying any Margin Stock or for any purpose that violates the provisions of
Regulation T, U or X of the Board of Governors.
 
4.17         Governmental Regulation.  No Loan Party nor any of its Subsidiaries
is subject to regulation under the Federal Power Act or the Investment Company
Act of 1940 or under any other federal or state statute or regulation which may
limit its ability to incur Indebtedness or which may otherwise render all or any
portion of the Obligations unenforceable.  No Loan Party nor any of its
Subsidiaries is a “registered investment company” or a company “controlled” by a
“registered investment company” or a “principal underwriter” of a “registered
investment company” as such terms are defined in the Investment Company Act of
1940.
 
4.18         OFAC.  No Loan Party nor any of its Subsidiaries is in violation of
any of the country or list based economic and trade sanctions administered and
enforced by OFAC.  No Loan Party nor any of its Subsidiaries (a) is a Sanctioned
Person or a Sanctioned Entity, (b) has its assets located in Sanctioned
Entities, or (c) derives revenues from investments in, or transactions with
Sanctioned Persons or Sanctioned Entities.  No proceeds of any loan made
hereunder will be used to fund any operations in, finance any investments or
activities in, or make any payments to, a Sanctioned Person or a Sanctioned
Entity.
 
4.19         Employee and Labor Matters.  There is (i) no unfair labor practice
complaint pending or, to the knowledge of Borrower, threatened against Borrower
or its Subsidiaries before any Governmental Authority and no grievance or
arbitration proceeding pending or threatened against Borrower or its
Subsidiaries which arises out of or under any collective bargaining agreement
and that could reasonably be expected to result in a material liability, (ii) no
strike, labor dispute, slowdown, stoppage or similar action or grievance pending
or threatened in writing against Borrower or its Subsidiaries that could
reasonably be expected to result in a material liability, or (iii) other than
with respect to unions as to which there is a collective bargaining agreement in
place with Borrower or one of its Subsidiaries, to the knowledge of Borrower no
union representation question existing with respect to the employees of Borrower
or its Subsidiaries and no union organizing activity taking place with respect
to any of the employees of Borrower or its Subsidiaries.  None of Borrower or
its Subsidiaries has incurred any liability or obligation under the Worker
Adjustment and Retraining Notification Act or similar state law, which remains
unpaid or unsatisfied.  The hours worked and payments made to employees of
Borrower or its Subsidiaries have not been in violation of the Fair Labor
Standards Act or any other applicable legal requirements, except to the extent
such violations could not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect.  All material payments due from
Borrower or its Subsidiaries on account of wages and employee health and welfare
insurance and other benefits have been paid or accrued as a liability on the
books of Borrower, except where the failure to do so could not, individually or
in the aggregate, reasonably be expected to result in a Material Adverse Effect.
 
4.20         Holdco as a Holding Company. Holdco is a holding company and does
not have any material liabilities (other than liabilities arising under the Loan
Documents), own any material assets (other than the Equity Interests of its
Subsidiaries) or engage in any operations or business (other than the ownership
of the Equity Interests of its Subsidiaries).
 

 
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4.21         Leases.  Each Loan Party and its Subsidiaries enjoy peaceful and
undisturbed possession under all leases material to their business and to which
they are parties or under which they are operating, and, subject to Permitted
Protests, all of such material leases are valid and subsisting and no material
default by the applicable Loan Party or its Subsidiaries exists under any of
them.
 
4.22         Eligible Accounts.  As to each Account that is identified by
Borrower as an Eligible Account in a Borrowing Base Certificate submitted to
Agent, such Account is (a) a bona fide existing payment obligation of the
applicable Account Debtor created by the sale and delivery of Inventory or the
rendition of services to such Account Debtor in the ordinary course of
Borrower’s business, (b) owed to Borrower without any known defenses, disputes,
offsets, counterclaims, or rights of return or cancellation, other than as is
consistent with the Loan Parties’ historic return, refund, credit, cancellation
or exchange policies, and (c) not excluded as ineligible by virtue of one or
more of the excluding criteria (other than any Agent-discretionary criteria) set
forth in the definition of Eligible Accounts.
 
4.23         Eligible Inventory.  As to each item of Inventory that is
identified by Borrower as Eligible Inventory in a Borrowing Base Certificate
submitted to Agent, such Inventory is (a) of good and merchantable quality, free
from known defects, and (b) not excluded as ineligible by virtue of one or more
of the excluding criteria (other than any Agent-discretionary criteria) set
forth in the definition of Eligible Inventory.
 
4.24         Location of Inventory.  The Inventory of the Loan Parties is not
stored with a bailee, warehouseman, Refiner or similar party and is located only
at, or in transit between, the locations identified on Schedule 4.24 (as such
Schedule may be updated pursuant to Section 5.14); provided, however, that
Inventory of Borrower and its Subsidiaries may be stored with a bailee,
warehouseman, Refiner or other similar party at a location set forth on Schedule
4.24 (as such Schedule may be updated pursuant to Section 5.14) if (a) such
bailee, warehouseman, Refiner or other similar party (other than Johnson Matthey
Inc.) has entered into a Bailee Agreement with Agent (or in the case of Johnson
Matthey Inc., Borrower and Johnson Matthey Inc. have entered into a Bailee
Agreement with Agent on or before March 31, 2012 (or such later date as may be
agreed to by Agent in writing in its sole discretion)) and (b) such bailee,
warehouseman, Refiner or other similar party is a Designated Bailee.
 
4.25         Inventory Records.  Each Loan Party keeps materially correct and
materially accurate records itemizing and describing the type, quality, and
quantity of its and its Subsidiaries’ Inventory and the book value thereof.
 
4.26         Material Contracts.  Except for matters which, either individually
or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect, each Material Contract (other than (x) those that have expired
at the end of their normal terms and (y) the Refining Agreements which are
governed by the following sentence) (a) is in full force and effect, and (b) is
not in default due to the action or inaction of the applicable Loan Party.  Each
Refining Agreement (other than those that have expired at the end of their
normal terms) (a) is in full force and effect and is binding upon and
enforceable against the applicable Loan Party or its Subsidiary and, to
Borrower’s knowledge, each other Person that is a party thereto in accordance
with its terms, (b) has not been otherwise amended or modified (other than
amendments or modifications permitted by Section 6.6(b)), and (c) is not in
default due to the action or inaction of the applicable Loan Party.
 
4.27         Reclamation Obligations.  Borrower and each of its Subsidiaries are
in compliance, in all material respects, with the reclamation obligations of
Borrower or such Subsidiary created by applicable law, including material
placement, stabilizing, capping, regrading, placing cover soils, revegetation,
and maintenance, as applicable.  Borrower and each of its Subsidiaries have made
adequate provision for all such reclamation obligations.
 
4.28         Immaterial Subsidiaries.  Each of the Subsidiaries that have been
designated or identified as an Immaterial Subsidiary satisfies the criteria set
forth under the definition thereof.
 

 
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5.         AFFIRMATIVE COVENANTS.
 
Borrower covenants and agrees that, until termination of all of the Commitments
and payment in full of the Obligations:
 
5.1         Financial Statements, Reports, Certificates.  Borrower (a) will
deliver to Agent each of the financial statements, reports, and other items set
forth on Schedule 5.1 no later than the times specified therein, (b) agrees that
no Domestic Subsidiary of a Loan Party will have a fiscal year different from
that of Borrower, except for any Subsidiary (other than a Foreign Subsidiary)
acquired after the Closing Date, in which case Borrower shall cause such
Subsidiary to have the same fiscal year as the Borrower as soon as reasonably
practicable after the date of acquisition thereof, (c) agrees to maintain a
system of accounting that enables Borrower to produce financial statements in
accordance with GAAP, and (d) agrees that it will, and will cause each other
Loan Party to, (i) keep a reporting system that shows all additions, sales,
claims, returns, and allowances with respect to its and its Domestic
Subsidiaries’ sales, and (ii) maintain its billing systems and practices
substantially as in effect as of the Closing Date and shall only make material
modifications thereto with notice to, and with the consent of, Agent (such
consent not to be unreasonably withheld or delayed); provided, that no such
consent shall be required for such changes or modifications that do not have the
result of changing the underlying information contained in, or frequency and
timing of delivery of, any reports required to be delivered under the Loan
Documents.
 
5.2         Collateral Reporting.  Borrower (a) will deliver to Agent each of
the reports set forth on Schedule 5.2 at the times specified therein, and (b)
agrees to use commercially reasonable efforts in cooperation with Agent to
facilitate and implement a system of electronic collateral reporting in order to
provide electronic reporting of each of the items set forth on such Schedule.
 
5.3         Existence.  Except as otherwise permitted under Section 6.3 or
Section 6.4, Borrower will, and will cause each the other Loan Parties to, at
all times preserve and keep in full force and effect such Person’s valid
existence and good standing in its jurisdiction of organization and, except as
could not reasonably be expected to result in a Material Adverse Effect, good
standing with respect to all other jurisdictions in which it is qualified to do
business and any rights, franchises, permits, licenses, accreditations,
authorizations, or other approvals material to their businesses.
 
5.4         Maintenance of Properties.  Borrower will, and will cause each of
its Subsidiaries to, maintain and preserve all of its assets that are necessary
or useful in the proper conduct of its business in good working order and
condition, ordinary wear, tear, casualty, and condemnation and Permitted
Dispositions excepted (and except where the failure to so maintain and preserve
assets could not reasonably be expected to result in a Material Adverse Effect).
 
5.5         Taxes.  Borrower will, and will cause each of its Subsidiaries to,
pay (or cause to be paid) in full before delinquency or before the expiration of
any extension period all material governmental assessments and taxes imposed,
levied, or assessed against it, or any of its assets or in respect of any of its
income, businesses, or franchises, except (a) to the extent that the validity of
such governmental assessment or tax is the subject of a Permitted Protest or (b)
to the extent that all such unpaid governmental assessments and taxes that are
not described above in clause (a) do not exceed $1,000,000 in the aggregate and
do not impair the enforceability, validity, or priority of any of Agent’s Liens.
 
5.6         Insurance.  Borrower will, and will cause each of its Subsidiaries
to, at Borrower’s expense, (a) maintain insurance respecting each of Borrower’s
and its Subsidiaries’ assets wherever located, covering liabilities, losses or
damage by fire, theft, explosion and such other hazards and risks as ordinarily
are insured against by other Persons engaged in the same or similar businesses
and similarly situated and located.  All such policies of insurance shall be
with financially sound and reputable insurance companies reasonably acceptable
to Agent (it being agreed that, as of the Closing Date, the Borrower’s existing
insurance providers, as disclosed to Agent on or before the Closing Date, are
acceptable to Agent) and in such amounts as is carried generally in accordance
with sound business practice by companies in similar businesses similarly
situated and located and, in any event, in amount, adequacy, and scope
reasonably satisfactory to Agent (it being agreed that the amount, adequacy, and
scope of the policies of insurance of Borrower in effect as of the Closing Date
are satisfactory to Agent).  All property insurance
 

 
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policies covering the Collateral are to be made payable to Agent for the benefit
of Agent and the Lenders, as their interests may appear, in case of loss,
pursuant to a standard loss payable endorsement with a standard non contributory
“lender” or “secured party” clause and are to contain such other provisions as
Agent may reasonably require to protect the Lenders’ interest in the Collateral
and to any payments to be made under such policies.  All certificates of
property and general liability insurance are to be delivered to Agent, with the
loss payable (but only in respect of Collateral) and additional insured
endorsements in favor of Agent and shall provide for not less than 30 days (10
days in the case of non-payment) prior written notice to Agent of the exercise
of any right of cancellation.  If Borrower or a Loan Party fails to maintain
such insurance, Agent may, after providing 5 days prior notice to Borrower,
arrange for such insurance, but at Borrower’s expense and without any
responsibility on Agent’s part for obtaining the insurance, the solvency of the
insurance companies, the adequacy of the coverage, or the collection of
claims.  Borrower shall give Agent prompt notice of any loss exceeding
$2,500,000 covered by its or its Subsidiaries’ casualty or business interruption
insurance.  Upon the occurrence and during the continuance of an Event of
Default, Agent shall have the sole right to file claims under any property and
general liability insurance policies in respect of the Collateral, to receive,
receipt and give acquittance for any payments that may be payable thereunder,
and to execute any and all endorsements, receipts, releases, assignments,
reassignments or other documents that may be necessary to effect the collection,
compromise or settlement of any claims under any such insurance policies.
 
5.7         Inspection.
 
(a)         Borrower will, and will cause each of the other Loan Parties to,
permit Agent, any Lender, and each of their respective duly authorized
representatives or agents to visit any of the Loan Parties’ properties and
inspect any of the Loan Parties’ assets or books and records, to examine and
make copies of its books and records, and to discuss its affairs, finances, and
accounts with, and to be advised as to the same by, its officers and employees
(provided an authorized representative of Borrower shall be allowed to be
present) at such mutually convenient times and at reasonable times and intervals
as Agent or any Lender, as applicable, may designate and, so long as no Default
or Event of Default has occurred and is continuing, with reasonable prior notice
to Borrower and during regular business hours.
 
(b)         Borrower will, and will cause each of the Loan Parties to, permit
Agent and each of its duly authorized representatives or agents to conduct
appraisals at such mutually convenient times and at reasonable times and
intervals as Agent may designate.
 
5.8         Compliance with Laws.  Borrower will, and will cause each of its
Subsidiaries to, comply with the requirements of all applicable laws, rules,
regulations, and orders of any Governmental Authority, including without
limitation the Mining Permits, other than laws, rules, regulations, and orders
the non-compliance with which, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
 
5.9         Environmental.  Borrower will, and will cause each of its
Subsidiaries to,
 
(a)         Keep any property either owned or operated by Borrower or its
Subsidiaries free of any Environmental Liens or post bonds or other financial
assurances sufficient to satisfy the obligations or liability evidenced by such
Environmental Liens,
 
(b)         Comply, in all material respects, with Environmental Laws and
provide to Agent documentation of such compliance which Agent reasonably
requests, except where such non-compliance could not reasonably be expected to
result in liabilities in excess of $10,000,000,
 
(c)         Promptly notify Agent of any release of which Borrower has knowledge
of a Hazardous Material in any reportable quantity from or onto property owned
or operated by Borrower or its Subsidiaries and take any Remedial Actions
required to abate said release or otherwise to come into compliance, in all
material respects, with applicable Environmental Law, except where such release
could not reasonably be expected to result in liabilities in excess of
$5,000,000, and
 

 
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(d)         Promptly, but in any event within 5 Business Days of its receipt
thereof, provide Agent with written notice of any of the following:  (i) notice
that an Environmental Lien has been filed against any of the real or personal
property of Borrower or its Subsidiaries and (ii) commencement of any
Environmental Action or written notice that an Environmental Action will be
filed against Borrower or its Subsidiaries.
 
5.10         Disclosure Updates.  Borrower will, promptly and in no event later
than 5 Business Days after obtaining knowledge thereof, notify Agent if any
written information, exhibit, or report (other than any information of a general
economic nature and general information about the Borrower’s industry) furnished
to Agent or the Lenders contained, at the time it was furnished, any untrue
statement of a material fact or omitted to state any material fact necessary to
make the statements contained therein (taken as a whole) not misleading in light
of the circumstances in which made (it being understood that with respect to
projections and other forward looking statements, the same are subject to the
proviso in the last sentence in Section 4.12).  The foregoing to the contrary
notwithstanding, any notification pursuant to the foregoing provision will not
cure or remedy the effect of the prior untrue statement of a material fact or
omission of any material fact nor shall any such notification have the effect of
amending or modifying this Agreement or any of the Schedules hereto.
 
5.11         Formation of Subsidiaries.  Borrower will, at the time that any
Loan Party forms any direct or indirect wholly owned Domestic Subsidiary (other
than an Immaterial Subsidiary) or acquires any direct or indirect wholly owned
Domestic Subsidiary (other than an Immaterial Subsidiary) after the Closing
Date, within 30 days of such formation or acquisition (or such later date as
permitted by Agent in its sole discretion) (a) cause such Domestic Subsidiary to
provide to Agent a joinder to the Guaranty and Security Agreement, together with
such other security agreements, as well as appropriate financing statements, all
in form and substance reasonably satisfactory to Agent (including being
sufficient to grant Agent a first priority Lien (subject to Permitted Liens) in
and to the assets of such newly formed or acquired Domestic Subsidiary that
would constitute a portion of the Collateral), and (b) provide to Agent all
other documentation, including one or more opinions of counsel reasonably
satisfactory to Agent, which, in its opinion, is appropriate with respect to the
execution and delivery of the applicable documentation referred to above.  Any
document, agreement, or instrument executed or issued pursuant to this Section
5.11 shall constitute a Loan Document.
 
5.12         Further Assurances.  Borrower will, and will cause each of the
other Loan Parties to, at any time upon the reasonable request of Agent, execute
or deliver to Agent any and all financing statements, security agreements,
assignments, opinions of counsel, and all other documents (the “Additional
Documents”) that Agent may reasonably request in form and substance reasonably
satisfactory to Agent, to create, perfect, and continue perfected or to better
perfect Agent’s Liens in all of the assets of Borrower and its Domestic
Subsidiaries (whether now owned or hereafter arising or acquired, tangible or
intangible, but excluding Excluded Collateral) that constitute a portion of the
Collateral, and in order to fully consummate all of the transactions
contemplated hereby and under the other Loan Documents.  To the maximum extent
permitted by applicable law, if Borrower or any other Loan Party refuses or
fails to execute or deliver any reasonably requested Additional Documents within
a reasonable period of time following the request to do so, Borrower and each
other Loan Party hereby authorizes Agent to execute any such Additional
Documents in the applicable Loan Party’s name and authorizes Agent to file such
executed Additional Documents in any appropriate filing office.  In furtherance
of, and not in limitation of, the foregoing, each Loan Party shall take such
actions as Agent may reasonably request from time to time to ensure that the
Obligations are guarantied by the Guarantors and are secured by substantially
all of the assets of Borrower and its Domestic Subsidiaries that constitute a
portion of the Collateral.
 
5.13         Lender Meetings.  Borrower will, within 120 days after the close of
each fiscal year of Borrower, at the request of Agent or of the Required Lenders
and upon reasonable prior notice, hold a meeting (at a mutually agreeable
location and time, and by meeting or conference call as mutually agreed, by
Agent and Borrower) with all Lenders who choose to attend such meeting at which
meeting shall be reviewed the financial results of the previous fiscal year and
the financial condition of Borrower and its Subsidiaries and the projections
presented for the current fiscal year of Borrower.
 

 
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5.14         Location of Inventory.  Borrower will, and will cause each of the
other Loan Parties to, keep its Inventory only at the locations identified on
Schedule 4.24, and their chief executive offices only at the locations
identified on Schedule 3 of the Guaranty and Security Agreement); provided, that
Borrower may amend Schedule 4.24 or Schedule 3 of the Guaranty and Security
Agreement so long as (a) such amendment occurs by written notice to Agent not
less than 5 days (unless otherwise waived by Agent) prior to the date on which
such Inventory is moved to such new location or such chief executive office is
relocated, (b) prior to (i) the relocation of such Inventory, Borrower delivers
to Agent a Collateral Access Agreement or a Bailee Agreement, as may be
requested by Agent with respect to the Inventory at such new location, or (ii)
the relocation of its chief executive office, Borrower delivers to Agent a
Collateral Access Agreement with respect to such new location, in each case duly
executed and delivered by each party thereto, (c) such new location is within
the continental United States, and (d) with respect to Inventory that is stored
with a bailee, warehouseman, Refiner or other similar party, such new location
is owned or operated by a Designated Bailee; provided, further that, Borrower
shall not keep its Inventory at a Johnson Matthey Location after March 31, 2012
(or such later date as may be agreed to by Agent in writing in its sole
discretion) if Borrower and Johnson Matthey Inc. have not entered into a Bailee
Agreement with Agent.
 
5.15         Material Contracts.  Contemporaneously with the delivery of each
Compliance Certificate pursuant to Section 5.1, Borrower will provide Agent with
copies of (a) each Material Contract, other than those described in clause (c)
in the definition thereof, entered into since the delivery of the previous
Compliance Certificate and (b) each material amendment or modification of any
Material Contract, other than those described in clause (c) in the definition
thereof, entered into since the delivery of the previous Compliance Certificate.
 
6.         NEGATIVE COVENANTS.
 
 Borrower covenants and agrees that, until termination of all of the Commitments
and payment in full of the Obligations:
 
6.1         Indebtedness.  Borrower will not, and will not permit any of its
Subsidiaries to create, incur, assume, suffer to exist, guarantee, or otherwise
become or remain, directly or indirectly, liable with respect to any
Indebtedness, except for Permitted Indebtedness.
 
6.2        Liens.  Borrower will not, and will not permit any of its
Subsidiaries to create, incur, assume, or suffer to exist, directly or
indirectly, any Lien on or with respect to any of its assets, of any kind,
whether now owned or hereafter acquired, or any income or profits therefrom,
except for Permitted Liens.
 
6.3         Restrictions on Fundamental Changes.
 
(a)         Borrower will not, and will not permit any of its Subsidiaries to,
 
(i)         Other than in order to consummate a Permitted Acquisition, enter
into any merger, consolidation, reorganization, or recapitalization, or
reclassify its Equity Interests, except for (i) any merger between Loan Parties,
provided, that Borrower must be the surviving entity of any such merger to which
it is a party, (ii) any merger between a Loan Party and a Subsidiary of such
Loan Party that is not a Loan Party so long as such Loan Party is the surviving
entity of any such merger, (iii) any merger between Subsidiaries of Borrower
that are not Loan Parties, and (iv) any reorganization or recapitalization of a
Non-Loan Party,
 
(ii)         liquidate, wind up, or dissolve itself (or suffer any liquidation
or dissolution), except for (i) the liquidation or dissolution of Immaterial
Subsidiaries of Borrower, (ii) the liquidation or dissolution of a Loan Party
(other than Borrower) or any of its wholly-owned Subsidiaries so long as all of
the assets (including any interest in any Equity Interests) of such liquidating
or dissolving Loan Party or Subsidiary are transferred to a Loan Party that is
not liquidating or dissolving at such time, or (iii) the liquidation or
dissolution of a Subsidiary of Borrower that is not a Loan Party (other than any
such Subsidiary the Equity Interests of which (or any portion thereof) is
subject to a Lien in favor of Agent) so long as all of the assets of such
liquidating or dissolving Subsidiary are transferred to a Subsidiary of Borrower
that is not liquidating or dissolving; provided, for
 

 
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the avoidance of doubt, nothing in this Section 6.3(a) shall be construed to
prohibit or restrict Borrower or any of its Subsidiaries from making any
Permitted Investment or Permitted Disposition, or
 
(b)         Borrower will not, and will not permit any of the other Loan Parties
to, suspend or cease operating a substantial portion of its or their business,
except as permitted pursuant to clauses (i) or (ii) above or in connection with
a transaction permitted under Section 6.4.
 
6.4         Disposal of Assets.  Other than Permitted Dispositions or
transactions expressly permitted by Sections 6.3 or 6.9, Borrower will not, and
will not permit any of its Subsidiaries to convey, sell, lease, license, assign,
transfer, or otherwise dispose of (or enter into an agreement to convey, sell,
lease, license, assign, transfer, or otherwise dispose of) any of its or their
assets; provided that Borrower may enter into an agreement to sell all of the
assets of Borrower and its Subsidiaries so long as (a) such agreement requires
that net cash proceeds from such sale repay all of the Obligations in full; (b)
Agent receives written notice of such agreement promptly (and in any event
within 5 days of execution thereof) of Borrower entering into such agreement;
and (c) the Obligations are paid in full in accordance with the terms of this
Agreement (including Section 3.5) and any other Loan Documents.
 
6.5         Nature of Business.  Borrower will not, and will not permit any of
its Subsidiaries to make any change in the nature of its or their business as
described in Schedule 6.5 or acquire any properties or assets that are not
reasonably related to the conduct of such business activities; provided, that
the foregoing shall not prevent Borrower and its Subsidiaries from engaging in
any business that is reasonably related or ancillary to its or their business.
 
6.6         Prepayments and Amendments.  Borrower will not, and will not permit
any of its Subsidiaries to,
 
(a)         Except in connection with Refinancing Indebtedness permitted by
Section 6.1 and except with respect to payments made at a time when the Payment
Conditions have been satisfied,
 
(i)         optionally prepay, redeem, defease, purchase, or otherwise acquire
any Indebtedness of Borrower or its Subsidiaries (it being understood that
payments of regularly scheduled principal and interest and mandatory prepayments
of principal and interest shall be permitted), other than (A) the Obligations in
accordance with this Agreement, and (B) Permitted Intercompany Advances, or
 
(ii)         make any payment on account of Indebtedness that has been
contractually subordinated in right of payment to the Obligations if such
payment is not permitted at such time under the subordination terms and
conditions, or
 
(b)         Directly or indirectly, amend, modify, or change any of the terms or
provisions of
 
(i)         any agreement, instrument, document, indenture, or other writing
evidencing  or concerning Permitted Indebtedness other than (A) the Obligations
in accordance with this Agreement, (B) Permitted Intercompany Advances, (C)
Indebtedness permitted under clauses (c), (d), (e), (h), (j), (k), (n), (p), (q)
and (r) of the definition of Permitted Indebtedness, (D) Indebtedness permitted
under clauses (l), (m), (s) and (t) of the definition of Permitted Indebtedness
so long as such proposed amendment, modification, or change is reasonably
acceptable to Agent, or
 
(ii)         any Refining Agreement without the prior written consent of Agent
except to the extent that such amendment, modification, or change could not,
individually or in the aggregate, reasonably be expected to be materially
adverse to the interests of the Lenders, or
 
(iii)         the Governing Documents of any Loan Party or any of its
Subsidiaries if the effect thereof, either individually or in the aggregate,
could reasonably be expected to be materially adverse to the interests of the
Lenders.
 

 
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6.7         Restricted Payments.  Borrower will not, and will not permit any of
its Subsidiaries to make any Restricted Payment; provided, that, so long as it
is permitted by law, and so long as no Default or Event of Default shall have
occurred and be continuing or would result therefrom,
 
(a)         Borrower may make distributions to former employees, officers, or
directors of Borrower (or any spouses, ex-spouses, or estates of any of the
foregoing) on account of redemptions of Equity Interests of Borrower held by
such Persons, provided, that the aggregate amount of such redemptions made by
Borrower during the term of this Agreement plus the amount of Indebtedness
outstanding under clause (l) of the definition of Permitted Indebtedness, does
not exceed $5,000,000 in the aggregate,
 
(b)         Borrower may make distributions to former employees, officers, or
directors of Borrower (or any spouses, ex-spouses, or estates of any of the
foregoing), solely in the form of forgiveness of Indebtedness of such Persons
owing to Borrower on account of repurchases of the Equity Interests of Borrower
held by such Persons; provided that such Indebtedness was incurred by such
Persons solely to acquire Equity Interests of Borrower,
 
(c)         (i) a Subsidiary of Borrower may make Restricted Payments to a Loan
Party and (ii) a Non-Loan Party may make Restricted Payments to a Non-Loan
Party,
 
(d)         Restricted Payments not otherwise permitted hereunder so long as
when added to the aggregate amount of all Restricted Payments made pursuant to
this clause (d) during the fiscal year in which such Restricted Payment is made,
does not exceed $5,000,000 in the aggregate, and
 
(e)         Borrower or its Subsidiaries may make additional Restricted
Payments; provided, that each of the Payment Conditions are satisfied after
giving effect to such proposed Restricted Payment.
 
6.8         Accounting Methods.  Borrower will not, and will not permit any of
the other Loan Parties to modify or change its fiscal year or its method of
accounting (other than as may be required to conform to GAAP), without the prior
consent of Agent.
 
6.9         Investments.  Borrower will not, and will not permit any of its
Subsidiaries to, directly or indirectly, make or acquire any Investment or incur
any liabilities (including contingent obligations) for or in connection with any
Investment except for Permitted Investments.
 
6.10         Transactions with Affiliates.  Borrower will not, and will not
permit any other Loan Party to, directly or indirectly, enter into or permit to
exist any transaction with any Affiliate of any Loan Party except for:
 
(a)         transactions (other than the payment of management, consulting,
monitoring, or advisory fees) between the Loan Parties, on the one hand, and any
Affiliate of any of the Loan Parties, on the other hand, so long as such
transactions (i) are fully disclosed to Agent prior to the consummation thereof,
if they involve one or more payments by the Loan Parties in excess of $2,500,000
for any single transaction or series of related transactions, and (ii) are no
less favorable, taken as a whole, to the applicable Loan Parties, than would be
obtained in an arm’s length transaction with a non-Affiliate,
 
(b)         so long as it has been approved by Borrower’s or its applicable
Subsidiary’s board of directors (or comparable governing body) in accordance
with applicable law, any indemnity provided for the benefit of directors (or
comparable managers) of Borrower or its applicable Subsidiary,
 
(c)         so long as it has been approved by Borrower’s or its applicable
Subsidiary’s board of directors (or comparable governing body) in accordance
with applicable law, the payment of reasonable compensation, severance, or
employee benefit arrangements to employees, officers, and outside directors of
Borrower and its Subsidiaries in the ordinary course of business and consistent
with industry practice,
 

 
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(d)         transactions permitted by Section 6.3 or Section 6.7, or any
Permitted Intercompany Advance,
 
(e)         transactions between any Loan Parties,
 
(f)         transactions between Subsidiaries of Loan Parties that are Non-Loan
Parties,
 
(g)         prior to January 2, 2012, any transactions fully in existence as of
the Closing Date, and from and after January 2, 2012, any agreement, instrument
or arrangement as in effect as of the Closing Date and identified on Schedule
6.10(g) (which Schedule may be updated once on or before January 2, 2012, with
the prior written consent of Agent, in its discretion) or any amendment thereto
(so long as such amendment is not materially less favorable, taken as a whole,
than the applicable agreement, instrument or arrangement, as in effect on the
date of the Closing Date), and
 
(h)         loans or advances to employees in the ordinary course of business
permitted under clause (j) of the definition of “Permitted Investments”.
 
6.11         Use of Proceeds.  Borrower will not, and will not permit any of its
Subsidiaries to use the proceeds of any loan made hereunder for any purpose
other than (a) on the Closing Date, to pay the fees, costs, and expenses
incurred in connection with this Agreement, the other Loan Documents, and the
transactions contemplated hereby and thereby, and (b) thereafter, consistent
with the terms and conditions hereof, for their lawful and general corporate
purposes (provided that no part of the proceeds of the loans made to Borrower
will be used to purchase or carry any such Margin Stock or to extend credit to
others for the purpose of purchasing or carrying any such Margin Stock or for
any purpose that violates the provisions of Regulation T, U or X of the Board of
Governors).
 
6.12         Limitation on Issuance of Equity Interests.  Borrower will not, and
will not permit any of its Subsidiaries to issue or sell or enter into any
agreement or arrangement for the issuance or sale of any of its Equity
Interests, except for (a) the issuance or sale of Qualified Equity Interests by
Borrower, (b) Equity Interests of a Loan Party to another Loan Party, (c) Equity
Interests of a Non-Loan Party to another Non-Loan Party, (d) Equity Interest of
a Non-Loan Party to a Loan Party so long as the acquisition of such Equity
Interest by a Loan Party constitutes a Permitted Investment, and (e) any
Permitted Disposition described under clauses (j), (p) and (q) of the definition
thereof.
 
6.13         Inventory with Bailees.  Borrower will not, and will not permit any
of the other Loan Parties to store its Inventory at any time with a bailee,
warehouseman, Refiner or similar party; provided, however, that Inventory of
Loan Parties may be stored with a bailee, warehouseman, Refiner or other similar
party if (a) such bailee, warehouseman, or other similar party and the
applicable Loan Party have entered into a Bailee Agreement with Agent and (b)
such bailee, warehouseman, Refiner or other similar party is a Designated
Bailee.
 
6.14         Holdco as a Holding Company.  Borrower will not permit Holdco to
incur any liabilities, own or acquire any assets (other than the Equity
Interests its Subsidiaries) or engage in any operations or business.
 
7.         FINANCIAL COVENANTS.
 
7.1         Fixed Charge Coverage Ratio.  Borrower covenants and agrees that,
until termination of all of the Commitments and payment in full of the
Obligations, commencing on the date on which a Financial Covenant Trigger Period
begins and measured as of the end of the fiscal month immediately preceding the
date on which a Financial Covenant Trigger Period begins and as of each fiscal
month end thereafter during such Financial Covenant Trigger Period, the Loan
Parties will have a Fixed Charge Coverage Ratio, measured on a month-end basis,
of at least 1.0:1.0.
 
7.2         Excess Availability.  Borrower covenants and agrees that, until the
date on which the Primary Syndication has been completed,  Borrower shall at all
times have Excess Availability of at least $20,000,000.
 

 
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8.         EVENTS OF DEFAULT.
 
Any one or more of the following events shall constitute an event of default
(each, an “Event of Default”) under this Agreement:
 
8.1         Payments.  If Borrower fails to pay when due and payable in
accordance with the terms thereof, (a) all or any portion of the Obligations
consisting of interest, fees, or charges due the Lender Group, reimbursement of
Lender Group Expenses, or other amounts (other than any portion thereof
constituting principal) constituting Obligations (including any portion thereof
that accrues after the commencement of an Insolvency Proceeding, regardless of
whether allowed or allowable in whole or in part as a claim in any such
Insolvency Proceeding), and such failure continues for a period of 3 Business
Days, (b) all or any portion of the principal of the Loans, or (c) any amount
payable to Issuing Lender in reimbursement of any drawing under a Letter of
Credit;
 
8.2         Covenants.  If any Loan Party or any of its Subsidiaries:
 
(a)         fails to perform or observe any covenant or other agreement
contained in any of (i) Sections 3.6, 5.1, 5.2, 5.3 (solely if Borrower is not
in good standing in its jurisdiction of organization), 5.6, 5.7 (solely if
Borrower refuses to allow Agent or its representatives or agents to visit
Borrower’s properties, inspect its assets or books or records, examine and make
copies of its books and records, or discuss Borrower’s affairs, finances, and
accounts with officers and employees of Borrower), 5.10, 5.11, 5.13, 5.14, or
5.15 of this Agreement, (ii) Sections 6 of this Agreement, (iii) Section 7 of
this Agreement, or (iv) Section 7 of the Guaranty and Security Agreement;
 
(b)         fails to perform or observe any covenant or other agreement
contained in any of Sections 5.3 (other than if Borrower is not in good standing
in its jurisdiction of organization), 5.4, 5.5, 5.8, and 5.12 of this Agreement
and such failure continues for a period of 15 days after the earlier of (i) the
date on which such failure shall first become known to any officer of Borrower
or (ii) the date on which written notice thereof is given to Borrower by Agent;
or
 
(c)         fails to perform or observe any covenant or other agreement
contained in this Agreement, or in any of the other Loan Documents, in each
case, other than any such covenant or agreement that is the subject of another
provision of this Section 8 (in which event such other provision of this Section
8 shall govern), and such failure continues for a period of 30 days after the
earlier of (i) the date on which such failure shall first become known to any
officer of Borrower or (ii) the date on which written notice thereof is given to
Borrower by Agent;
 
8.3         Judgments.  If one or more judgments, orders, or awards for the
payment of money involving an aggregate amount of $5,000,000, or more (except to
the extent fully covered (other than to the extent of customary deductibles) by
insurance pursuant to which the insurer has not denied coverage) is entered or
filed against a Loan Party or any of its Subsidiaries, or with respect to any of
their respective assets, and either (a) there is a period of 30 consecutive days
at any time after the entry of any such judgment, order, or award during which
(1) the same is not discharged, satisfied, vacated, or bonded pending appeal, or
(2) a stay of enforcement thereof is not in effect, or (b) enforcement
proceedings are commenced upon such judgment, order, or award;
 
8.4         Voluntary Bankruptcy, etc.  If an Insolvency Proceeding is commenced
by a Loan Party or any of its Subsidiaries;
 
8.5         Involuntary Bankruptcy, etc.  If an Insolvency Proceeding is
commenced against a Loan Party or any of its Subsidiaries and any of the
following events occur: (a) such Loan Party or such Subsidiary consents to the
institution of such Insolvency Proceeding against it, (b) the petition
commencing the Insolvency Proceeding is not timely controverted, (c) the
petition commencing the Insolvency Proceeding is not dismissed within 60
calendar days of the date of the filing thereof, (d) an interim trustee is
appointed to take possession of all or any substantial portion of the properties
or assets of, or to operate all or any substantial portion of the business of,
such Loan Party or its Subsidiary, or (e) an order for relief shall have been
issued or entered therein;
 

 
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8.6         Default Under Other Agreements.  If there is (a) a default, other
than a default in respect of Non-Recourse Indebtedness by a Non-Recourse
Subsidiary, in one or more agreements to which a Loan Party or any of its
Subsidiaries is a party with one or more third Persons relative to a Loan
Party’s or any of its Subsidiaries’ Indebtedness involving an aggregate amount
of $10,000,000 or more, and such default (i) occurs at the final maturity of the
obligations thereunder, or (ii) results in a right by such third Person,
irrespective of whether exercised, to accelerate the maturity of such Loan
Party’s or its Subsidiary’s obligations thereunder, or (b) a default under one
or more of the Refining Agreements and all applicable cure periods, if any, have
lapsed;
 
8.7         Representations, etc.  If any warranty, representation, certificate,
statement, or Record made herein or in any other Loan Document or delivered in
writing to Agent or any Lender in connection with this Agreement or any other
Loan Document proves to be untrue in any material respect (except that such
materiality qualifier shall not be applicable to any representations and
warranties that already are qualified or modified by materiality in the text
thereof) as of the date of issuance or making or deemed making thereof;
 
8.8         Guaranty.  If the obligation of any Guarantor under the guaranty
contained in the Guaranty and Security Agreement is limited or terminated by
operation of law or by such Guarantor (other than in accordance with the terms
of this Agreement);
 
8.9         Security Documents.  If Guaranty and Security Agreement or any other
Loan Document that purports to create a Lien, shall, for any reason, fail or
cease to create a valid and perfected and, except to the extent of Permitted
Liens which are non-consensual Permitted Liens, permitted purchase money Liens
or the interests of lessors under Capital Leases, first priority Lien on the
Collateral covered thereby, except (a) as a result of a disposition of the
applicable Collateral in a transaction permitted under this Agreement, (b) with
respect to Collateral the aggregate value of which, for all such Collateral,
does not exceed at any time, $500,000, or (c) as the result of an action or
failure to act on the part of Agent;
 
8.10         Loan Documents.  The validity or enforceability of any Loan
Document shall at any time for any reason  (other than solely as the result of
an action or failure to act on the part of Agent) be declared to be null and
void, or a proceeding shall be commenced by a Loan Party or its Subsidiaries, or
by any Governmental Authority having jurisdiction over a Loan Party or its
Subsidiaries, seeking to establish the invalidity or unenforceability thereof,
or a Loan Party or its Subsidiaries shall deny that such Loan Party or its
Subsidiaries has any liability or obligation purported to be created under any
Loan Document; or
 
8.11         Change in Control.  A Change in Control shall occur, whether
directly or indirectly.
 
9.         RIGHTS AND REMEDIES.
 
9.1         Rights and Remedies.  Upon the occurrence and during the
continuation of an Event of Default, Agent may, and, at the instruction of the
Required Lenders, shall (in each case under clauses (a) or (b) by written notice
to Borrower), in addition to any other rights or remedies provided for hereunder
or under any other Loan Document or by applicable law, do any one or more of the
following:
 
(a)         (i) declare the principal of, and any and all accrued and unpaid
interest and fees in respect of, the Loans and all other Obligations (other than
the Bank Product Obligations), whether evidenced by this Agreement or by any of
the other Loan Documents to be immediately due and payable, whereupon the same
shall become and be immediately due and payable and Borrower shall be obligated
to repay all of such Obligations in full, without presentment, demand, protest,
or further notice or other requirements of any kind, all of which are hereby
expressly waived by Borrower, (ii) terminate any Letter of Credit that may be
terminated in accordance with its terms, and (iii) direct Borrower to provide
(and Borrower agrees that upon receipt of such notice it will provide) Letter of
Credit Collateralization to Agent to be held as security for Borrower’s
reimbursement obligations for drawings that may subsequently occur under issued
and outstanding Letters of Credit;
 

 
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(b)         declare the Commitments terminated, whereupon the Commitments shall
immediately be terminated together with (i) any obligation of any Lender to make
Revolving Loans, (ii) the obligation of the Swing Lender to make Swing Loans,
and (iii) the obligation of Issuing Lender to issue Letters of Credit; and
 
(c)         exercise all other rights and remedies available to Agent or the
Lenders under the Loan Documents, under applicable law, or in equity.
 
The foregoing to the contrary notwithstanding, upon the occurrence of any Event
of Default described in Section 8.4 or Section 8.5, in addition to the remedies
set forth above, without any notice to Borrower or any other Person or any act
by the Lender Group, the Commitments shall automatically terminate and the
Obligations (other than the Bank Product Obligations), inclusive of the
principal of, and any and all accrued and unpaid interest and fees in respect
of, the Loans and all other Obligations (other than the Bank Product
Obligations), whether evidenced by this Agreement or by any of the other Loan
Documents, shall automatically become and be immediately due and payable and
Borrower shall automatically be obligated to repay all of such Obligations in
full (including Borrower being obligated to provide (and Borrower agrees that it
will provide) (1) Letter of Credit Collateralization to Agent to be held as
security for Borrower’s reimbursement obligations in respect of drawings that
may subsequently occur under issued and outstanding Letters of Credit and (2)
Bank Product Collateralization to be held as security for Borrower’s or its
Subsidiaries’ obligations in respect of outstanding Bank Products), without
presentment, demand, protest, or notice or other requirements of any kind, all
of are expressly waived by Borrower.
 
9.2         Remedies Cumulative.  The rights and remedies of the Lender Group
under this Agreement, the other Loan Documents, and all other agreements shall
be cumulative.  The Lender Group shall have all other rights and remedies not
inconsistent herewith as provided under the Code, by law, or in equity.  No
exercise by the Lender Group of one right or remedy shall be deemed an election,
and no waiver by the Lender Group of any Event of Default shall be deemed a
continuing waiver.  No delay by the Lender Group shall constitute a waiver,
election, or acquiescence by it.
 
10.         WAIVERS; INDEMNIFICATION.
 
10.1         Demand; Protest; etc.  Borrower waives demand, protest, notice of
protest, notice of default or dishonor, notice of payment and nonpayment,
nonpayment at maturity, release, compromise, settlement, extension, or renewal
of documents, instruments, chattel paper, and guarantees at any time held by the
Lender Group on which Borrower may in any way be liable.
 
10.2         The Lender Group’s Liability for Collateral.  Borrower hereby
agrees that:  (a) so long as Agent complies with its obligations, if any, under
the Code, the Lender Group shall not in any way or manner be liable or
responsible for:  (i) the safekeeping of the Collateral, (ii) any loss or damage
thereto occurring or arising in any manner or fashion from any cause, (iii) any
diminution in the value thereof, or (iv) any act or default of any carrier,
warehouseman, bailee, forwarding agency, or other Person, and (b) all risk of
loss, damage, or destruction of the Collateral shall be borne by Borrower.
 
10.3         Indemnification.  Borrower shall pay, indemnify, defend, and hold
the Agent-Related Persons, the Lender-Related Persons, and each Participant
(each, an “Indemnified Person”) harmless (to the fullest extent permitted by
law) from and against any and all claims, demands, suits, actions,
investigations, proceedings, liabilities, fines, costs, penalties, and damages,
and all reasonable, documented, out-of-pocket fees and disbursements of one
external legal counsel for all such Indemnified Persons and, if necessary, one
firm of local counsel in each applicable jurisdiction (which may include one
firm of special counsel acting in multiple jurisdictions) (and in the case of an
actual conflict of interest among any one or more Indemnified Persons, one
additional counsel for each group of similarly-situated Indemnified Persons),
experts, or consultants and all other costs and expenses actually incurred in
connection therewith or in connection with the enforcement of this
indemnification (as and when they are incurred and irrespective of whether suit
is brought), at any time asserted against, imposed upon, or incurred by any of
them (a) in connection with or as a result of or related to the execution and
delivery (provided that Borrower shall not be liable for costs and expenses
(including attorneys fees) of any
 

 
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Lender (other than WFCF) incurred in advising, structuring, drafting, reviewing,
administering or syndicating the Loan Documents), enforcement, performance, or
administration (including any restructuring or workout with respect hereto) of
this Agreement, any of the other Loan Documents, or the transactions
contemplated hereby or thereby or the monitoring of Borrower’s and its
Subsidiaries’ compliance with the terms of the Loan Documents (provided, that
the indemnification in this clause (a) shall not extend to (i) disputes solely
between or among the Lenders, (ii) disputes solely between or among the Lenders
and their respective Affiliates; it being understood and agreed that the
indemnification in this clause (a) shall extend to Agent (but not the Lenders)
relative to disputes between or among Agent on the one hand, and one or more
Lenders, or one or more of their Affiliates, on the other hand, or (iii) any
Taxes or any costs attributable to Taxes, which shall be governed solely and
exclusively by Section 16), (b) with respect to any investigation, litigation,
or proceeding related to this Agreement, any other Loan Document, or the use of
the proceeds of the credit provided hereunder (irrespective of whether any
Indemnified Person is a party thereto), or any act, omission, event, or
circumstance in any manner related thereto, and (c) in connection with or
arising out of any presence or release of Hazardous Materials at, on, under, to
or from any assets or properties owned, leased or operated by Borrower or any of
its Subsidiaries or any Environmental Actions, Environmental Liabilities or
Remedial Actions related in any way to any such assets or properties of Borrower
or any of its Subsidiaries (each and all of the foregoing, the “Indemnified
Liabilities”).  The foregoing to the contrary notwithstanding, Borrower shall
have no obligation (i) to any Indemnified Person under this Section 10.3 with
respect to any Indemnified Liability that a court of competent jurisdiction
finally determines to have resulted from the gross negligence or willful
misconduct of such Indemnified Person or its officers, directors, employees,
attorneys, or agents or (ii) with respect to Taxes (and amounts relating
thereto), the indemnification for which shall be governed solely and exclusively
by Section 16.  This provision shall survive the termination of this Agreement
and the repayment in full of the Obligations.  If any Indemnified Person makes
any payment to any other Indemnified Person with respect to an Indemnified
Liability as to which Borrower was required to indemnify the Indemnified Person
receiving such payment, the Indemnified Person making such payment is entitled
to be indemnified and reimbursed by Borrower with respect thereto.  WITHOUT
LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO EACH INDEMNIFIED PERSON WITH
RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE OR IN PART ARE CAUSED BY OR
ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH INDEMNIFIED PERSON OR OF ANY
OTHER PERSON.
 
11.         NOTICES.
 
Unless otherwise provided in this Agreement, all notices or demands relating to
this Agreement or any other Loan Document shall be in writing and (except for
financial statements and other informational documents which may be sent by
first-class mail, postage prepaid) shall be personally delivered or sent by
registered or certified mail (postage prepaid, return receipt requested),
overnight courier, electronic mail (at such email addresses as a party may
designate in accordance herewith), or telefacsimile.  In the case of notices or
demands to Borrower or Agent, as the case may be, they shall be sent to the
respective address set forth below:
 

 
If to Borrower:
STILLWATER MINING COMPANY
   
1321 Discovery Drive
   
Billings, MT 59102
   
Attn: Mr. Gregory A. Wing, CFO
   
Fax No.: (406) 373-8723
       
with copies to:
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
   
Four Times Square
   
New York, NY 10036
   
Attn:  Robert A. Copen
   
Fax No.:  (917) 777-3536

 
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If to Agent:
WELLS FARGO CAPITAL FINANCE, LLC
   
2450 Colorado Avenue
   
Suite 3000 West
   
Santa Monica, CA 90404
   
Attn:  Business Finance Division Manager
       
with copies to:
PAUL HASTINGS LLP
   
515 South Flower Street, 25th Floor
   
Los Angeles, CA 90071
   
Attn:  Peter Burke
   
Fax No.:  (213) 996-3338

 
Any party hereto may change the address at which they are to receive notices
hereunder, by notice in writing in the foregoing manner given to the other
party.  All notices or demands sent in accordance with this Section 11, shall be
deemed received on the earlier of the date of actual receipt or 3 Business Days
after the deposit thereof in the mail; provided, that (a) notices sent by
overnight courier service shall be deemed to have been given when received, (b)
notices by facsimile 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) and (c) notices by electronic mail shall be deemed received upon the
sender's receipt of an acknowledgment from the intended recipient (such as by
the "return receipt requested" function, as available, return email or other
written acknowledgment).
 
12.         CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER; JUDICIAL REFERENCE
PROVISION.
 
(a)         THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS
EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH
OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF
AND THEREOF, THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL
MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO, AND ANY
CLAIMS, CONTROVERSIES OR DISPUTES ARISING HEREUNDER OR THEREUNDER OR RELATED
HERETO OR THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
 
(b)         THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN
CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND
LITIGATED ONLY IN THE STATE AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK; PROVIDED,
THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY
BE BROUGHT, AT AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT
ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE
FOUND.  BORROWER AND EACH MEMBER OF THE LENDER GROUP WAIVE, TO THE EXTENT
PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE
OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS
BROUGHT IN ACCORDANCE WITH THIS SECTION 12(b).
 
(c)         TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, BORROWER AND EACH
MEMBER OF THE LENDER GROUP HEREBY WAIVE THEIR RESPECTIVE RIGHTS, IF ANY, TO A
JURY TRIAL OF ANY CLAIM, CONTROVERSY, DISPUTE OR
 

 
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CAUSE OF ACTION DIRECTLY OR INDIRECTLY BASED UPON OR ARISING OUT OF ANY OF THE
LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS (EACH A "CLAIM").  BORROWER AND EACH MEMBER OF THE LENDER GROUP
REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY
WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  IN THE
EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT
TO A TRIAL BY THE COURT.
 
(d)         THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMIT TO THE
EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF
NEW YORK AND THE STATE OF NEW YORK, IN ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO ANY LOAN DOCUMENTS, OR FOR RECOGNITION OR ENFORCEMENT OF ANY
JUDGMENT.  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 ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY
RIGHT THAT AGENT MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST ANY LOAN PARTY OR ITS
PROPERTIES IN THE COURTS OF ANY JURISDICTION.
 
(e)         EACH PARTY HERETO AGREES THAT SUCH PARTY WILL NOT MAKE ANY CLAIM BY
SUCH PARTY TO THIS AGREEMENT AGAINST ANY OTHER PARTY, OR ANY AFFILIATE,
DIRECTOR, OFFICER, EMPLOYEE, COUNSEL, REPRESENTATIVE, AGENT, OR ATTORNEY-IN-FACT
OF ANY OF THEM FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL, OR PUNITIVE DAMAGES IN
RESPECT OF ANY CLAIM FOR BREACH OF CONTRACT OR ANY OTHER THEORY OF LIABILITY
ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT, OR ANY ACT, OMISSION, OR EVENT OCCURRING IN CONNECTION
THEREWITH, AND EACH PARTY HERETO HEREBY WAIVES, RELEASES, AND AGREES NOT TO SUE
UPON ANY CLAIM FOR SUCH DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN
OR SUSPECTED TO EXIST IN ITS FAVOR.
 
(f)         IN THE EVENT ANY LEGAL PROCEEDING IS FILED IN A STATE COURT OF THE
STATE OF CALIFORNIA (THE "COURT") BY OR AGAINST ANY PARTY HERETO IN CONNECTION
WITH ANY CLAIM AND THE WAIVER SET FORTH IN CLAUSE (C) ABOVE IS NOT ENFORCEABLE
IN SUCH PROCEEDING, THE PARTIES HERETO AGREE AS FOLLOWS:
 
(i)         WITH THE EXCEPTION OF THE MATTERS SPECIFIED IN SUBCLAUSE (ii) BELOW,
ANY CLAIM SHALL BE DETERMINED BY A GENERAL REFERENCE PROCEEDING IN ACCORDANCE
WITH THE PROVISIONS OF CALIFORNIA CODE OF CIVIL PROCEDURE SECTIONS 638 THROUGH
645.1.  THE PARTIES INTEND THIS AGREEMENT REGARDING GENERAL REFERENCE
PROCEEDINGS TO BE SPECIFICALLY ENFORCEABLE.  VENUE FOR THE REFERENCE PROCEEDING
SHALL BE IN THE COUNTY OF LOS ANGELES, CALIFORNIA.
 
(ii)         THE FOLLOWING MATTERS SHALL NOT BE SUBJECT TO A GENERAL REFERENCE
PROCEEDING: (A) NON-JUDICIAL FORECLOSURE OF ANY SECURITY INTERESTS IN REAL OR
PERSONAL PROPERTY, (B) EXERCISE OF SELF-HELP REMEDIES (INCLUDING SET-OFF OR
RECOUPMENT), (C) APPOINTMENT OF A RECEIVER, AND (D) TEMPORARY, PROVISIONAL, OR
ANCILLARY REMEDIES (INCLUDING WRITS OF ATTACHMENT, WRITS OF POSSESSION,
TEMPORARY RESTRAINING ORDERS, OR
 
 
 
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PRELIMINARY INJUNCTIONS).  THIS CLAUSE (F) DOES NOT LIMIT THE RIGHT OF ANY PARTY
TO EXERCISE OR OPPOSE ANY OF THE RIGHTS AND REMEDIES DESCRIBED IN CLAUSES (A) -
(D) AND ANY SUCH EXERCISE OR OPPOSITION DOES NOT WAIVE THE RIGHT OF ANY PARTY TO
PARTICIPATE IN A REFERENCE PROCEEDING PURSUANT TO THIS CLAUSE (F) WITH RESPECT
TO ANY OTHER MATTER.
 
(iii)         UPON THE WRITTEN REQUEST OF ANY PARTY, THE PARTIES SHALL SELECT A
SINGLE REFEREE, WHO SHALL BE A RETIRED JUDGE OR JUSTICE.  IF THE PARTIES DO NOT
AGREE UPON A REFEREE WITHIN 10 DAYS OF SUCH WRITTEN REQUEST, THEN, ANY PARTY
SHALL HAVE THE RIGHT TO REQUEST THE COURT TO APPOINT A REFEREE PURSUANT TO
CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 640(B).  THE REFEREE SHALL BE
APPOINTED TO SIT WITH ALL OF THE POWERS PROVIDED BY LAW.  PENDING APPOINTMENT OF
THE REFEREE, THE COURT SHALL HAVE THE POWER TO ISSUE TEMPORARY OR PROVISIONAL
REMEDIES.
 
(iv)         EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE REFEREE SHALL
DETERMINE THE MANNER IN WHICH THE REFERENCE PROCEEDING IS CONDUCTED INCLUDING
THE TIME AND PLACE OF HEARINGS, THE ORDER OF PRESENTATION OF EVIDENCE, AND ALL
OTHER QUESTIONS THAT ARISE WITH RESPECT TO THE COURSE OF THE REFERENCE
PROCEEDING.  ALL PROCEEDINGS AND HEARINGS CONDUCTED BEFORE THE REFEREE, EXCEPT
FOR TRIAL, SHALL BE CONDUCTED WITHOUT A COURT REPORTER, EXCEPT WHEN ANY PARTY SO
REQUESTS A COURT REPORTER AND A TRANSCRIPT IS ORDERED, A COURT REPORTER SHALL BE
USED AND THE REFEREE SHALL BE PROVIDED A COURTESY COPY OF THE TRANSCRIPT.  THE
PARTY MAKING SUCH REQUEST SHALL HAVE THE OBLIGATION TO ARRANGE FOR AND PAY THE
COSTS OF THE COURT REPORTER. HOWEVER, SUCH COSTS SHALL BE REIMBURSED BY THE
OTHER PARTY (OR PARTIES) IF THE PARTY INCURRING SUCH COSTS ULTIMATELY PREVAILS
IN THE REFERENCE PROCEEDING, AS DETERMINED BY THE REFEREE. THE REFEREE’S FEES
SHALL LIKEWISE BE BORNE BY THE PARTY (OR PARTIES) WHICH DOES NOT PREVAIL, AS
DETERMINED BY THE REFEREE.
 
(v)         THE REFEREE MAY REQUIRE ONE OR MORE PREHEARING CONFERENCES.  THE
PARTIES HERETO SHALL BE ENTITLED TO DISCOVERY, AND THE REFEREE SHALL OVERSEE
DISCOVERY IN ACCORDANCE WITH THE RULES OF DISCOVERY, AND SHALL ENFORCE ALL
DISCOVERY ORDERS IN THE SAME MANNER AS ANY TRIAL COURT JUDGE IN PROCEEDINGS AT
LAW IN THE STATE OF CALIFORNIA.
 
(vi)         THE REFEREE SHALL APPLY THE RULES OF EVIDENCE APPLICABLE TO
PROCEEDINGS AT LAW IN THE STATE OF CALIFORNIA AND SHALL DETERMINE ALL ISSUES IN
ACCORDANCE WITH CALIFORNIA SUBSTANTIVE AND PROCEDURAL LAW.  THE REFEREE SHALL BE
EMPOWERED TO ENTER EQUITABLE AS WELL AS LEGAL RELIEF AND RULE ON ANY MOTION
WHICH WOULD BE AUTHORIZED IN A TRIAL, INCLUDING DISPOSITIVE MOTIONS SUCH AS
MOTIONS FOR DEFAULT JUDGMENT OR SUMMARY JUDGMENT.  THE REFEREE SHALL REPORT HIS
OR HER DECISIONS (INCLUDING ANY DECISIONS RELATED TO SPECIFIC ISSUES AND THE
REFEREE’S ULTIMATE DECISION AS TO THE ENTIRE CASE), WHICH REPORT SHALL ALSO
INCLUDE FINDINGS OF FACT AND CONCLUSIONS OF LAW.  THE REFEREE SHALL ISSUE AN
ULTIMATE DECISION AND PURSUANT TO CALIFORNIA CODE OF CIVIL PROCEDURE, SECTION
644, THE REFEREE’S ULTIMATE DECISION MUST STAND AS THE DECISION OF THE COURT,
AND UPON FILING OF THE STATEMENT OF DECISION WITH THE CLERK OF THE COURT,
JUDGMENT MAY BE ENTERED THEREON IN THE SAME MANNER AS IF THE ACTION HAD BEEN
TRIED BY THE COURT.  THE FINAL JUDGMENT OR ORDER FROM ANY APPEALABLE DECISION OR
ORDER
 

 
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ENTERED BY THE REFEREE SHALL BE FULLY APPEALABLE AS IF IT HAS BEEN ENTERED BY
THE COURT.
 
(vii)         THE PARTIES RECOGNIZE AND AGREE THAT ALL CLAIMS RESOLVED IN A
GENERAL REFERENCE PROCEEDING PURSUANT HERETO WILL BE DECIDED BY A REFEREE AND
NOT BY A JURY.  AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH
COUNSEL OF THEIR OWN CHOICE, EACH PARTY HERETO KNOWINGLY AND VOLUNTARILY AND FOR
THEIR MUTUAL BENEFIT AGREES THAT THIS REFERENCE PROVISION SHALL APPLY CONSISTENT
WITH THE FOREGOING PROVISIONS OF THIS SECTION 12, TO ANY DISPUTE BETWEEN THEM
THAT ARISES OUT OF OR IS RELATED TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS.
 
13.         ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.
 
13.1       Assignments and Participations.
 
(a)         (i)  Subject to the conditions set forth in clause (a)(ii) below,
any Lender may assign and delegate all or any portion of its rights and duties
under the Loan Documents (including the Obligations owed to it and its
Commitments) to one or more assignees (each, an “Assignee”), with the prior
written consent (such consent not be unreasonably withheld or delayed) of:
       
            (A)         Borrower; provided, that no consent of Borrower shall be
required (1) if an Event of Default has occurred and is continuing, or (2) in
connection with an assignment to a Person that is a Lender or an Affiliate
(other than natural persons) of a Lender, or an a Related Fund; provided
further, that Borrower shall be deemed to have consented to a proposed
assignment unless it objects thereto by written notice to Agent within 5
Business Days after having received notice thereof; and
 
            (B)         Agent, Swing Lender, and Issuing Lender.
 
(ii)         Assignments shall be subject to the following additional
conditions:
 
            (A)         no assignment may be made (i) so long as no Event of
Default has occurred and is continuing, to a Disqualified Lender, or (ii) to a
natural person,
 
            (B)         no assignment may be made to a Loan Party or an
Affiliate of a Loan Party,
 
            (C)         the amount of the Commitments and the other rights and
obligations of the assigning Lender hereunder and under the other Loan Documents
subject to each such assignment (determined as of the date the Assignment and
Acceptance with respect to such assignment is delivered to Agent) shall be in a
minimum amount (unless waived by Agent) of $5,000,000 (except such minimum
amount shall not apply to (I) an assignment or delegation by any Lender to any
other Lender, an Affiliate of any Lender, or a Related Fund of such Lender or
(II) a group of new Lenders, each of which is an Affiliate of each other or a
Related Fund of such new Lender to the extent that the aggregate amount to be
assigned to all such new Lenders is at least $5,000,000);
 
            (D)         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;
 
            (E)         the parties to each assignment shall execute and deliver
to Agent and Borrower an Assignment and Acceptance; provided, that Borrower and
Agent may continue to deal solely and directly with the assigning Lender in
connection with the interest so assigned to an Assignee until written notice of
such assignment, together with payment instructions, addresses, and related
information with respect to the Assignee, have been given to Borrower and Agent
by such Lender and the Assignee;
 

 
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            (F)         unless waived by Agent, the assigning Lender or Assignee
has paid to Agent, for Agent’s separate account, a processing fee in the amount
of $3,500; and
 
            (G)         the assignee, if it is not a Lender, shall deliver to
Agent an Administrative Questionnaire in a form approved by Agent (the
“Administrative Questionnaire”).
 
(b)         From and after the date that Agent  and Borrower receive the
executed Assignment and Acceptance and, if applicable, payment of the required
processing fee, (i) the Assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, shall be a “Lender” and shall have the rights
and obligations of a Lender under the Loan Documents, and (ii) the assigning
Lender shall, to the extent that rights and obligations hereunder and under the
other Loan Documents have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights (except with respect to Section 10.3) and be
released from any future obligations under this Agreement (and in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender’s rights and obligations under this Agreement and the other Loan
Documents, such Lender shall cease to be a party hereto and thereto); provided,
that nothing contained herein shall release any assigning Lender from
obligations that survive the termination of this Agreement, including such
assigning Lender’s obligations under Section 15 and Section 17.9(a).
 
(c)         By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the Assignee thereunder confirm to and agree
with each other and the other parties hereto as follows:  (i) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other Loan Document furnished
pursuant hereto, (ii) such assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of
Borrower or the performance or observance by Borrower of any of its obligations
under this Agreement or any other Loan Document furnished pursuant hereto, (iii)
such Assignee confirms that it has received a copy of this Agreement, together
with such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into such Assignment and
Acceptance, (iv) such Assignee will, independently and without reliance upon
Agent, such assigning Lender 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 this Agreement, (v)
such Assignee appoints and authorizes Agent to take such actions and to exercise
such powers under this Agreement and the other Loan Documents as are delegated
to Agent, by the terms hereof and thereof, together with such powers as are
reasonably incidental thereto, and (vi) such Assignee agrees that it will
perform all of the obligations which by the terms of this Agreement are required
to be performed by it as a Lender.
 
(d)         Immediately upon Agent’s receipt of the required processing fee, if
applicable, and delivery of notice to the assigning Lender pursuant to Section
13.1(b), this Agreement shall be deemed to be amended to the extent, but only to
the extent, necessary to reflect the addition of the Assignee and the resulting
adjustment of the Commitments arising therefrom.  The Commitment allocated to
each Assignee shall reduce such Commitments of the assigning Lender pro tanto.
 
(e)         Any Lender may at any time sell to one or more commercial banks,
financial institutions, or other Persons (a “Participant”) participating
interests in all or any portion of its Obligations, its Commitment, and the
other rights and interests of that Lender (the “Originating Lender”) hereunder
and under the other Loan Documents; provided, that (i) the Originating Lender
shall remain a “Lender” for all purposes of this Agreement and the other Loan
Documents and the Participant receiving the participating interest in the
Obligations, the Commitments, and the other rights and interests of the
Originating Lender hereunder shall not constitute a “Lender” hereunder or under
the other Loan Documents and the Originating Lender’s obligations under this
Agreement shall remain unchanged, (ii) the Originating Lender shall remain
solely responsible for the performance of such obligations, (iii) Borrower,
Agent, and the Lenders shall continue to deal solely and directly with the
Originating
 

 
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Lender in connection with the Originating Lender’s rights and obligations under
this Agreement and the other Loan Documents, (iv) no Lender shall transfer or
grant any participating interest under which the Participant has the right to
approve any amendment to, or any consent or waiver with respect to, this
Agreement or any other Loan Document, except to the extent such amendment to, or
consent or waiver with respect to this Agreement or of any other Loan Document
would (A) extend the final maturity date of the Obligations hereunder in which
such Participant is participating, (B) reduce the interest rate applicable to
the Obligations hereunder in which such Participant is participating,
(C) release all or substantially all of the Collateral or guaranties (except to
the extent expressly provided herein or in any of the Loan Documents) supporting
the Obligations hereunder in which such Participant is participating, (D)
postpone the payment of, or reduce the amount of, the interest or fees payable
to such Participant through such Lender (other than a waiver of default
interest), or (E) decreases the amount or postpones the due dates of scheduled
principal repayments or prepayments or premiums payable to such Participant
through such Lender, (v) no participation shall be sold to a natural person,
(vi) no participation shall be sold to a Loan Party or an Affiliate of a Loan
Party, and (vii) all amounts payable by Borrower hereunder shall be determined
as if such Lender had not sold such participation, except that, if amounts
outstanding under this Agreement are due and unpaid, or shall have been declared
or shall have become due and payable upon the occurrence of an Event of Default,
each Participant shall be deemed to have the right of set off in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement.  The rights of any Participant only shall be
derivative through the Originating Lender with whom such Participant
participates and no Participant shall have any rights under this Agreement or
the other Loan Documents or any direct rights as to the other Lenders, Agent,
Borrower, the Collateral, or otherwise in respect of the Obligations.  No
Participant shall have the right to participate directly in the making of
decisions by the Lenders among themselves.
 
(f)         In connection with any such assignment or participation or proposed
assignment or participation or any grant of a security interest in, or pledge
of, its rights under and interest in this Agreement, a Lender may, subject to
the provisions of Section 17.9,  disclose all documents and information which it
now or hereafter may have relating to Borrower and its Subsidiaries and their
respective businesses.
 
(g)         Any other provision in this Agreement notwithstanding, any Lender
may at any time create a security interest in, or pledge, all or any portion of
its rights under and interest in this Agreement in favor of any Federal Reserve
Bank in accordance with Regulation A of the Federal Reserve Bank or U.S.
Treasury Regulation 31 CFR §203.24, and such Federal Reserve Bank may enforce
such pledge or security interest in any manner permitted under applicable law.
 
13.2         Successors.  This Agreement shall bind and inure to the benefit of
the respective successors and assigns of each of the parties; provided, that
Borrower may not assign this Agreement or any rights or duties hereunder without
the Lenders’ prior written consent and any prohibited assignment shall be
absolutely void ab initio.  No consent to assignment by the Lenders shall
release Borrower from its Obligations.  A Lender may assign this Agreement and
the other Loan Documents and its rights and duties hereunder and thereunder
pursuant to Section 13.1 and, except as expressly required pursuant to Section
13.1, no consent or approval by Borrower is required in connection with any such
assignment.
 
14.         AMENDMENTS; WAIVERS.
 
14.1         Amendments and Waivers.
 
(a)         No amendment, waiver or other modification of any provision of this
Agreement or any other Loan Document (other than Bank Product Agreements or the
Fee Letter), and no consent with respect to any departure by Borrower therefrom,
shall be effective unless the same shall be in writing and signed by the
Required Lenders (or by Agent at the written request of the Required Lenders)
and the Loan Parties that are party thereto and then any such waiver or consent
shall be effective, but only in the specific instance and for the specific
purpose for which given; provided, that no such waiver, amendment, or consent
shall, unless in writing and signed by all of the Lenders directly affected
thereby and all of the Loan Parties that are party thereto, do any of the
following:
 

 
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(i)         increase the amount of or extend the expiration date of any
Commitment of any Lender or amend, modify, or eliminate the last sentence of
Section 2.4(c),
 
(ii)         postpone or delay any date fixed by this Agreement or any other
Loan Document for any payment of principal, interest, fees, or other amounts due
hereunder or under any other Loan Document,
 
(iii)         reduce the principal of, or the rate of interest on, any loan or
other extension of credit hereunder, or reduce any fees or other amounts payable
hereunder or under any other Loan Document (except (y) in connection with the
waiver of applicability of Section 2.6(c) (which waiver shall be effective with
the written consent of the Required Lenders), and (z) that any amendment or
modification of defined terms used in the financial covenant in this Agreement
shall not constitute a reduction in the rate of interest or a reduction of fees
for purposes of this clause (iii)),
 
(iv)         amend, modify, or eliminate this Section or any provision of this
Agreement providing for consent or other action by all Lenders,
 
(v)         amend, modify, or eliminate Section 3.1 or 3.2,
 
(vi)         amend, modify, or eliminate Section 15.11,
 
(vii)         other than as permitted by Section 15.11, release Agent’s Lien in
and to any of the Collateral,
 
(viii)         amend, modify, or eliminate the definitions of “Required Lenders”
or “Pro Rata Share”,
 
(ix)         contractually subordinate any of Agent’s Liens,
 
(x)         other than in connection with a merger, liquidation, dissolution or
sale of such Person expressly permitted by the terms hereof or the other Loan
Documents, release Borrower or any Guarantor from any obligation for the payment
of money or consent to the assignment or transfer by Borrower or any Guarantor
of any of its rights or duties under this Agreement or the other Loan Documents,
or
 
(xi)         amend, modify, or eliminate any of the provisions of Section
2.4(b)(i) or (ii) or Section 2.4(e) or (f).
 
(b)         No amendment, waiver, modification, or consent shall amend, modify,
waive, or eliminate,
 
(i)         the definition of, or any of the terms or provisions of, the Fee
Letter, without the written consent of Agent and Borrower (and shall not require
the written consent of any of the Lenders),
 
(ii)         any provision of Section 15 pertaining to Agent, or any other
rights or duties of Agent under this Agreement or the other Loan Documents,
without the written consent of Agent, Borrower, and the Required Lenders,
 
(c)         No amendment, waiver, modification, elimination, or consent shall
amend, without written consent of Agent, Borrower and the Supermajority Lenders,
modify, or eliminate the definition of Borrowing Base or any of the defined
terms (including the definitions of Eligible Accounts and Eligible Inventory)
that are used in such definition to the extent that any such change results in
more credit being made available to Borrower based upon the Borrowing Base, but
not otherwise, or the definition of Maximum Revolver Amount, or change Section
2.1(c),
 
(d)         No amendment, waiver, modification, elimination, or consent shall
amend, modify, or waive any provision of this Agreement or the other Loan
Documents pertaining to Issuing Lender, or any other
 

 
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rights or duties of Issuing Lender or Underlying Issuer under this Agreement or
the other Loan Documents, without the written consent of Issuing Lender, Agent,
Borrower, and the Required Lenders,
 
(e)         No amendment, waiver, modification, elimination, or consent shall
amend, modify, or waive any provision of this Agreement or the other Loan
Documents pertaining to Swing Lender, or any other rights or duties of Swing
Lender under this Agreement or the other Loan Documents, without the written
consent of Swing Lender, Agent, Borrower, and the Required Lenders,
 
(f)         Anything in this Section 14.1 to the contrary notwithstanding, (i)
any amendment, modification, elimination, waiver, consent, termination, or
release of, or with respect to, any provision of this Agreement or any other
Loan Document that relates only to the relationship of the Lender Group among
themselves, and that does not affect the rights or obligations of Borrower,
shall not require consent by or the agreement of any Loan Party, and (ii) any
amendment, waiver, modification, elimination, or consent of or with respect to
any provision of this Agreement or any other Loan Document may be entered into
without the consent of, or over the objection of, any Defaulting Lender.
 
14.2         Replacement of Certain Lenders.
 
(a)         If (i) any action to be taken by the Lender Group or Agent hereunder
requires the consent, authorization, or agreement of all Lenders or all Lenders
affected thereby and if such action has received the consent, authorization, or
agreement of the Required Lenders but not of all Lenders or all Lenders affected
thereby, or (ii) any Lender makes a claim for compensation under Section 16,
then Borrower or Agent, upon at least 5 Business Days prior irrevocable notice,
may permanently replace any Lender that failed to give its consent,
authorization, or agreement (a “Non-Consenting Lender”) or any Lender that made
a claim for compensation (a “Tax Lender”) with one or more Replacement Lenders,
and the Non-Consenting Lender or Tax Lender, as applicable, shall have no right
to refuse to be replaced hereunder.  Such notice to replace the Non-Consenting
Lender or Tax Lender, as applicable, shall specify an effective date for such
replacement, which date shall not be later than 15 Business Days after the date
such notice is given.
 
(b)         Prior to the effective date of such replacement, the Non-Consenting
Lender or Tax Lender, as applicable, and each Replacement Lender shall execute
and deliver an Assignment and Acceptance, subject only to the Non-Consenting
Lender or Tax Lender, as applicable, being repaid in full its share of the
outstanding Obligations (without any premium or penalty of any kind whatsoever,
but including (i) all interest, fees and other amounts that may be due in
payable in respect thereof, and (ii) an assumption of its Pro Rata Share of
participations in the Letters of Credit).  If the Non-Consenting Lender or Tax
Lender, as applicable, shall refuse or fail to execute and deliver any such
Assignment and Acceptance prior to the effective date of such replacement, Agent
may, but shall not be required to, execute and deliver such Assignment and
Acceptance in the name or and on behalf of the Non-Consenting Lender or Tax
Lender, as applicable, and irrespective of whether Agent executes and delivers
such Assignment and Acceptance, the Non-Consenting Lender or Tax Lender, as
applicable, shall be deemed to have executed and delivered such Assignment and
Acceptance.  The replacement of any Non-Consenting Lender or Tax Lender, as
applicable, shall be made in accordance with the terms of Section 13.1.  Until
such time as one or more Replacement Lenders shall have acquired all of the
Obligations, the Commitments, and the other rights and obligations of the
Non-Consenting Lender or Tax Lender, as applicable, hereunder and under the
other Loan Documents, the Non-Consenting Lender or Tax Lender, as applicable,
shall remain obligated to make the Non-Consenting Lender’s or Tax Lender’s, as
applicable, Pro Rata Share of Revolving Loans and to purchase a participation in
each Letter of Credit, in an amount equal to its Pro Rata Share of
participations in such Letters of Credit.
 
14.3         No Waivers; Cumulative Remedies.  No failure by Agent or any Lender
to exercise any right, remedy, or option under this Agreement or any other Loan
Document, or delay by Agent or any Lender in exercising the same, will operate
as a waiver thereof.  No waiver by Agent or any Lender will be effective unless
it is in writing, and then only to the extent specifically stated.  No waiver by
Agent or any Lender on any occasion shall affect or diminish Agent’s and each
Lender’s rights thereafter to require strict performance by Borrower of
 

 
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any provision of this Agreement.  Agent’s and each Lender’s rights under this
Agreement and the other Loan Documents will be cumulative and not exclusive of
any other right or remedy that Agent or any Lender may have.
 
15.         AGENT; THE LENDER GROUP.
 
15.1         Appointment and Authorization of Agent.  Each Lender hereby
designates and appoints WFCF as its agent under this Agreement and the other
Loan Documents and each Lender hereby irrevocably authorizes (and by entering
into a Bank Product Agreement, each Bank Product Provider shall be deemed to
designate, appoint, and authorize) Agent to execute and deliver each of the
other Loan Documents on its behalf and to take such other action on its behalf
under the provisions of this Agreement and each other Loan Document and to
exercise such powers and perform such duties as are expressly delegated to Agent
by the terms of this Agreement or any other Loan Document, together with such
powers as are reasonably incidental thereto.  Agent agrees to act as agent for
and on behalf of the Lenders (and the Bank Product Providers) on the conditions
contained in this Section 15.  Any provision to the contrary contained elsewhere
in this Agreement or in any other Loan Document notwithstanding, Agent shall not
have any duties or responsibilities, except those expressly set forth herein or
in the other Loan Documents, nor shall Agent have or be deemed to have any
fiduciary relationship with any Lender (or Bank Product Provider), and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against Agent.  Without limiting the generality of the
foregoing, the use of the term “agent” in this Agreement or the other Loan
Documents with reference to Agent is not intended to connote any fiduciary or
other implied (or express) obligations arising under agency doctrine of any
applicable law.  Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only a representative relationship between
independent contracting parties.  Each Lender hereby further authorizes (and by
entering into a Bank Product Agreement, each Bank Product Provider shall be
deemed to authorize) Agent to act as the secured party under each of the Loan
Documents that create a Lien on any item of Collateral.  Except as expressly
otherwise provided in this Agreement, Agent shall have and may use its sole
discretion with respect to exercising or refraining from exercising any
discretionary rights or taking or refraining from taking any actions that Agent
expressly is entitled to take or assert under or pursuant to this Agreement and
the other Loan Documents.  Without limiting the generality of the foregoing, or
of any other provision of the Loan Documents that provides rights or powers to
Agent, Lenders agree that Agent shall have the right to exercise the following
powers as long as this Agreement remains in effect:  (a) maintain, in accordance
with its customary business practices, ledgers and records reflecting the status
of the Obligations, the Collateral, payments and proceeds of Collateral, and
related matters, (b) execute or file any and all financing or similar statements
or notices, amendments, renewals, supplements, documents, instruments, proofs of
claim, notices and other written agreements with respect to the Loan Documents,
(c) make Revolving Loans, for itself or on behalf of Lenders, as provided in the
Loan Documents, (d) exclusively receive, apply, and distribute payments and
proceeds of the Collateral as provided in the Loan Documents, (e) open and
maintain such bank accounts and cash management arrangements as Agent deems
necessary and appropriate in accordance with the Loan Documents for the
foregoing purposes, (f) perform, exercise, and enforce any and all other rights
and remedies of the Lender Group with respect to Borrower or its Subsidiaries,
the Obligations, the Collateral, or otherwise related to any of same as provided
in the Loan Documents, and (g) incur and pay such Lender Group Expenses as Agent
may deem necessary or appropriate for the performance and fulfillment of its
functions and powers pursuant to the Loan Documents.
 
15.2         Delegation of Duties.  Agent may execute any of its duties under
this Agreement or any other Loan Document by or through agents, employees or
attorneys in fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties.  Agent shall not be responsible for the
negligence or misconduct of any agent or attorney in fact that it selects as
long as such selection was made without gross negligence or willful misconduct.
 
15.3         Liability of Agent.  None of the Agent-Related Persons shall (a) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (b) be responsible in any manner to any of the Lenders (or Bank Product
Providers) for any recital, statement, representation or
 

 
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warranty made by Borrower or any of its Subsidiaries or Affiliates, or any
officer or director thereof, contained in this Agreement or in any other Loan
Document, or in any certificate, report, statement or other document referred to
or provided for in, or received by Agent under or in connection with, this
Agreement or any other Loan Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document, or for any failure of Borrower or its Subsidiaries or any other party
to any Loan Document to perform its obligations hereunder or thereunder.  No
Agent-Related Person shall be under any obligation to any Lenders (or Bank
Product Providers) to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the books and records or
properties of Borrower or its Subsidiaries.
 
15.4         Reliance by Agent.  Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, telefacsimile or other electronic
method of transmission, telex or telephone message, statement or other document
or conversation believed by it to be genuine and correct and to have been
signed, sent, or made by the proper Person or Persons, and upon advice and
statements of legal counsel (including counsel to Borrower or counsel to any
Lender), independent accountants and other experts selected by Agent.  Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless Agent shall first receive such
advice or concurrence of the Lenders as it deems appropriate and until such
instructions are received, Agent shall act, or refrain from acting, as it deems
advisable.  If Agent so requests, it shall first be indemnified to its
reasonable satisfaction by the Lenders (and, if it so elects, the Bank Product
Providers) against any and all liability and expense that may be incurred by it
by reason of taking or continuing to take any such action.  Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement or any other Loan Document in accordance with a request or consent of
the Required Lenders and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Lenders (and Bank Product
Providers).
 
15.5         Notice of Default or Event of Default.  Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of
Default, except with respect to defaults in the payment of principal, interest,
fees, and expenses required to be paid to Agent for the account of the Lenders
and, except with respect to Events of Default of which Agent has actual
knowledge, unless Agent shall have received written notice from a Lender or
Borrower referring to this Agreement, describing such Default or Event of
Default, and stating that such notice is a “notice of default.”  Agent promptly
will notify the Lenders of its receipt of any such notice or of any Event of
Default of which Agent has actual knowledge.  If any Lender obtains actual
knowledge of any Event of Default, such Lender promptly shall notify the other
Lenders and Agent of such Event of Default.  Each Lender shall be solely
responsible for giving any notices to its Participants, if any.  Subject to
Section 15.4, Agent shall take such action with respect to such Default or Event
of Default as may be requested by the Required Lenders in accordance with
Section 9; provided, that unless and until Agent has received any such request,
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable.
 
15.6         Credit Decision.  Each Lender (and Bank Product Provider)
acknowledges that none of the Agent-Related Persons has made any representation
or warranty to it, and that no act by Agent hereinafter taken, including any
review of the affairs of Borrower and its Subsidiaries or Affiliates, shall be
deemed to constitute any representation or warranty by any Agent-Related Person
to any Lender (or Bank Product Provider).  Each Lender represents (and by
entering into a Bank Product Agreement, each Bank Product Provider shall be
deemed to represent) to Agent that it has, independently and without reliance
upon any Agent-Related Person and based on such due diligence, documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial and
other condition and creditworthiness of Borrower or any other Person party to a
Loan Document, and all applicable bank regulatory laws relating to the
transactions contemplated hereby, and made its own decision to enter into this
Agreement and to extend credit to Borrower.  Each Lender also represents (and by
entering into a Bank Product Agreement, each Bank Product Provider shall be
deemed to represent) that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its

 
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own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of Borrower or any other Person party to a Loan
Document.  Except for notices, reports, and other documents expressly herein
required to be furnished to the Lenders by Agent, Agent shall not have any duty
or responsibility to provide any Lender (or Bank Product Provider) with any
credit or other information concerning the business, prospects, operations,
property, financial and other condition or creditworthiness of Borrower or any
other Person party to a Loan Document that may come into the possession of any
of the Agent-Related Persons.  Each Lender acknowledges (and by entering into a
Bank Product Agreement, each Bank Product Provider shall be deemed to
acknowledge) that Agent does not have any duty or responsibility, either
initially or on a continuing basis (except to the extent, if any, that is
expressly specified herein) to provide such Lender (or Bank Product Provider)
with any credit or other information with respect to Borrower, its Affiliates or
any of their respective business, legal, financial or other affairs, and
irrespective of whether such information came into Agent's or its Affiliates’ or
representatives’ possession before or after the date on which such Lender became
a party to this Agreement (or such Bank Product Provider entered into a Bank
Product Agreement).
 
15.7         Costs and Expenses; Indemnification.  Agent may incur and pay
Lender Group Expenses to the extent Agent reasonably deems necessary or
appropriate for the performance and fulfillment of its functions, powers, and
obligations pursuant to the Loan Documents, including court costs, attorneys
fees and expenses, fees and expenses of financial accountants, advisors,
consultants, and appraisers, costs of collection by outside collection agencies,
auctioneer fees and expenses, and costs of security guards or insurance premiums
paid to maintain the Collateral, whether or not Borrower is obligated to
reimburse Agent or Lenders for such expenses pursuant to this Agreement or
otherwise.  Agent is authorized and directed to deduct and retain sufficient
amounts from payments or proceeds of the Collateral received by Agent to
reimburse Agent for such out-of-pocket costs and expenses prior to the
distribution of any amounts to Lenders (or Bank Product Providers).  In the
event Agent is not reimbursed for such costs and expenses by Borrower or its
Subsidiaries, each Lender hereby agrees that it is and shall be obligated to pay
to Agent such Lender’s ratable portion thereof.  Whether or not the transactions
contemplated hereby are consummated, each of the Lenders, on a ratable basis,
shall indemnify and defend the Agent-Related Persons (to the extent not
reimbursed by or on behalf of Borrower and without limiting the obligation of
Borrower to do so) from and against any and all Indemnified Liabilities;
provided, that no Lender shall be liable for the payment to any Agent-Related
Person of any portion of such Indemnified Liabilities resulting solely from such
Person’s gross negligence or willful misconduct nor shall any Lender be liable
for the obligations of any Defaulting Lender in failing to make a Revolving Loan
or other extension of credit hereunder.  Without limitation of the foregoing,
each Lender shall reimburse Agent upon demand for such Lender’s ratable share of
any costs or out of pocket expenses (including attorneys, accountants, advisors,
and consultants fees and expenses) incurred by Agent in connection with the
preparation, execution, delivery, administration, modification, amendment, or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement
or any other Loan Document to the extent that Agent is not reimbursed for such
expenses by or on behalf of Borrower.  The undertaking in this Section shall
survive the payment of all Obligations hereunder and the resignation or
replacement of Agent.
 
15.8         Agent in Individual Capacity.  WFCF and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
provide Bank Products to, acquire Equity Interests in, and generally engage in
any kind of banking, trust, financial advisory, underwriting, or other business
with Borrower and its Subsidiaries and Affiliates and any other Person party to
any Loan Document as though WFCF were not Agent hereunder, and, in each case,
without notice to or consent of the other members of the Lender Group.  The
other members of the Lender Group acknowledge (and by entering into a Bank
Product Agreement, each Bank Product Provider shall be deemed to acknowledge)
that, pursuant to such activities, WFCF or its Affiliates may receive
information regarding Borrower or its Affiliates or any other Person party to
any Loan Documents that is subject to confidentiality obligations in favor of
Borrower or such other Person and that prohibit the disclosure of such
information to the Lenders (or Bank Product Providers), and the Lenders
acknowledge (and by entering into a Bank Product Agreement, each Bank Product
Provider shall be deemed to acknowledge) that, in such circumstances (and
 

 
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in the absence of a waiver of such confidentiality obligations, which waiver
Agent will use its reasonable best efforts to obtain), Agent shall not be under
any obligation to provide such information to them.  The terms “Lender” and
“Lenders” include WFCF in its individual capacity.
 
15.9         Successor Agent.  Agent may resign as Agent upon 30 days (10 days
if an Event of Default has occurred and is continuing) prior written notice to
the Lenders (unless such notice is waived by the Required Lenders) and Borrower
(unless such notice is waived by Borrower) and without any notice to the Bank
Product Providers.  If Agent resigns under this Agreement, the Required Lenders
shall be entitled, with (so long as no Event of Default has occurred and is
continuing) the consent of Borrower (such consent not to be unreasonably
withheld, delayed, or conditioned), appoint a successor Agent for the Lenders
(and the Bank Product Providers).  If, at the time that Agent’s resignation is
effective, it is acting as Issuing Lender or the Swing Lender, such resignation
shall also operate to effectuate its resignation as Issuing Lender or the Swing
Lender, as applicable, and it shall automatically be relieved of any further
obligation to issue Letters of Credit, to cause the Underlying Issuer to issue
Letters of Credit, or to make Swing Loans.  If no successor Agent is appointed
prior to the effective date of the resignation of Agent, Agent may appoint,
after consulting with the Lenders and Borrower, a successor Agent.  If Agent has
materially breached or failed to perform any material provision of this
Agreement or of applicable law, or if any Insolvency Proceeding is commenced
against Agent, the Required Lenders may agree in writing to remove and replace
Agent with a successor Agent from among the Lenders with (so long as no Event of
Default has occurred and is continuing) the consent of Borrower (such consent
not to be unreasonably withheld, delayed, or conditioned).  In any such event,
upon the acceptance of its appointment as successor Agent hereunder, such
successor Agent shall succeed to all the rights, powers, and duties of the
retiring Agent and the term “Agent” shall mean such successor Agent and the
retiring Agent’s appointment, powers, and duties as Agent shall be
terminated.  After any retiring Agent’s resignation hereunder as Agent, the
provisions of this Section 15 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent under this Agreement.  If no
successor Agent has accepted appointment as Agent by the date which is 30 days
following a retiring Agent’s notice of resignation, the retiring Agent’s
resignation shall nevertheless thereupon become effective and the Lenders shall
perform all of the duties of Agent hereunder until such time, if any, as the
Lenders appoint a successor Agent as provided for above.
 
15.10         Lender in Individual Capacity.  Any Lender and its respective
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, provide Bank Products to, acquire Equity Interests in and
generally engage in any kind of banking, trust, financial advisory,
underwriting, or other business with Borrower and its Subsidiaries and
Affiliates and any other Person party to any Loan Documents as though such
Lender were not a Lender hereunder without notice to or consent of the other
members of the Lender Group (or the Bank Product Providers).  The other members
of the Lender Group acknowledge (and by entering into a Bank Product Agreement,
each Bank Product Provider shall be deemed to acknowledge) that, pursuant to
such activities, such Lender and its respective Affiliates may receive
information regarding Borrower or its Affiliates or any other Person party to
any Loan Documents that is subject to confidentiality obligations in favor of
Borrower or such other Person and that prohibit the disclosure of such
information to the Lenders, and the Lenders acknowledge (and by entering into a
Bank Product Agreement, each Bank Product Provider shall be deemed to
acknowledge) that, in such circumstances (and in the absence of a waiver of such
confidentiality obligations, which waiver such Lender will use its reasonable
best efforts to obtain), such Lender shall not be under any obligation to
provide such information to them.
 
15.11         Collateral Matters.
 
(a)         The Lenders hereby irrevocably authorize (and by entering into a
Bank Product Agreement, each Bank Product Provider shall be deemed to authorize)
Agent to release any Lien on any Collateral (i) upon the termination of the
Commitments and payment in full by Borrower of all of the Obligations, (ii)
constituting property being sold or disposed of if a release is required or
desirable in connection therewith and if Borrower certifies to Agent that the
sale or disposition is permitted under Section 6.4 (and Agent may rely
conclusively on any such certificate, without further inquiry), (iii)
constituting property in which Borrower or its Subsidiaries owned no interest at
the time Agent’s Lien was granted nor at any time thereafter, or
(iv) constituting
 

 
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property leased to Borrower or its Subsidiaries under a lease that has expired
or is terminated in a transaction permitted under this Agreement.  The Loan
Parties and the Lenders hereby irrevocably authorize (and by entering into a
Bank Product Agreement, each Bank Product Provider shall be deemed to authorize)
Agent, based upon the instruction of the Required Lenders, to (a) consent to,
credit bid or purchase (either directly or through one or more acquisition
vehicles) all or any portion of the Collateral at any sale thereof conducted
under the provisions of the Bankruptcy Code, including under Section 363 of the
Bankruptcy Code, (b) credit bid or purchase (either directly or through one or
more acquisition vehicles) all or any portion of the Collateral at any sale or
other disposition thereof conducted under the provisions of the Code, including
pursuant to Sections 9-610 or 9-620 of the Code, or (c) credit bid or purchase
(either directly or through one or more acquisition vehicles) all or any portion
of the Collateral at any other sale or foreclosure conducted by Agent (whether
by judicial action or otherwise) in accordance with applicable law.  In
connection with any such credit bid or purchase, (i) the Obligations owed to the
Lenders and the Bank Product Providers shall be entitled to be, and shall be,
credit bid on a ratable basis (with Obligations with respect to contingent or
unliquidated claims being estimated for such purpose if the fixing or
liquidation thereof would not unduly delay the ability of Agent to credit bid or
purchase at such sale or other disposition of the Collateral and, if such claims
cannot be estimated without unduly delaying the ability of Agent to credit bid,
then such claims shall be disregarded, not credit bid, and not entitled to any
interest in the asset or assets purchased by means of such credit bid) and the
Lenders and the Bank Product Providers whose Obligations are credit bid shall be
entitled to receive interests (ratably based upon the proportion of their
Obligations credit bid in relation to the aggregate amount of Obligations so
credit bid) in the asset or assets so purchased (or in the Equity Interests of
the acquisition vehicle or vehicles that are used to consummate such purchase),
and (ii) Agent, based upon the instruction of the Required Lenders, may accept
non-cash consideration, including debt and equity securities issued by such
acquisition vehicle or vehicles and in connection therewith Agent may reduce the
Obligations owed to the Lenders and the Bank Product Providers (ratably based
upon the proportion of their Obligations credit bid in relation to the aggregate
amount of Obligations so credit bid) based upon the value of such non-cash
consideration.  Except as provided above, Agent will not execute and deliver a
release of any Lien on any Collateral without the prior written authorization of
(y) if the release is of all or substantially all of the Collateral, all of the
Lenders (without requiring the authorization of the Bank Product Providers), or
(z) otherwise, the Required Lenders (without requiring the authorization of the
Bank Product Providers).  Upon request by Agent or Borrower at any time, the
Lenders will (and if so requested, the Bank Product Providers will) confirm in
writing Agent’s authority to release any such Liens on particular types or items
of Collateral pursuant to this Section 15.11; provided, that (1) Agent shall not
be required to execute any document necessary to evidence such release on terms
that, in Agent’s opinion, would expose Agent to liability or create any
obligation or entail any consequence other than the release of such Lien without
recourse, representation, or warranty, and (2) such release shall not in any
manner discharge, affect, or impair the Obligations or any Liens (other than
those expressly being released) upon (or obligations of Borrower in respect of)
all interests retained by Borrower, including, the proceeds of any sale, all of
which shall continue to constitute part of the Collateral.  The Lenders further
hereby irrevocably authorize (and by entering into a Bank Product Agreement,
each Bank Product Provider shall be deemed to authorize) Agent, at its option
and in its sole discretion, to subordinate any Lien granted to or held by Agent
under any Loan Document to the holder of any Permitted Lien on such property if
such Permitted Lien secures Permitted Purchase Money Indebtedness.
 
(b)         Agent shall have no obligation whatsoever to any of the Lenders (or
the Bank Product Providers) to assure that the Collateral exists or is owned by
Borrower or its Subsidiaries or is cared for, protected, or insured or has been
encumbered, or that Agent’s Liens have been properly or sufficiently or lawfully
created, perfected, protected, or enforced or are entitled to any particular
priority, or that any particular items of Collateral meet the eligibility
criteria applicable in respect thereof or whether to impose, maintain, reduce,
or eliminate any particular reserve hereunder or whether the amount of any such
reserve is appropriate or not, or to exercise at all or in any particular manner
or under any duty of care, disclosure or fidelity, or to continue exercising,
any of the rights, authorities and powers granted or available to Agent pursuant
to any of the Loan Documents, it being understood and agreed that in respect of
the Collateral, or any act, omission, or event related thereto, subject to the
terms and conditions contained herein, Agent may act in any manner it may deem
appropriate, in its sole discretion given Agent’s own interest in the Collateral
in its capacity as one of the Lenders and that Agent shall have no other
 

 
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duty or liability whatsoever to any Lender (or Bank Product Provider) as to any
of the foregoing, except as otherwise provided herein.
 
15.12         Restrictions on Actions by Lenders; Sharing of Payments.
 
(a)         Each of the Lenders agrees that it shall not, without the express
written consent of Agent, and that it shall, to the extent it is lawfully
entitled to do so, upon the written request of Agent, set off against the
Obligations, any amounts owing by such Lender to Borrower or its Subsidiaries or
any deposit accounts of Borrower or its Subsidiaries now or hereafter maintained
with such Lender.  Each of the Lenders further agrees that it shall not, unless
specifically requested to do so in writing by Agent, take or cause to be taken
any action, including, the commencement of any legal or equitable proceedings to
enforce any Loan Document against Borrower or any Guarantor or to foreclose any
Lien on, or otherwise enforce any security interest in, any of the Collateral.
 
(b)         If, at any time or times any Lender shall receive (i) by payment,
foreclosure, setoff, or otherwise, any proceeds of Collateral or any payments
with respect to the Obligations, except for any such proceeds or payments
received by such Lender from Agent pursuant to the terms of this Agreement, or
(ii) payments from Agent in excess of such Lender’s Pro Rata Share of all such
distributions by Agent, such Lender promptly shall (A) turn the same over to
Agent, in kind, and with such endorsements as may be required to negotiate the
same to Agent, or in immediately available funds, as applicable, for the account
of all of the Lenders and for application to the Obligations in accordance with
the applicable provisions of this Agreement, or (B) purchase, without recourse
or warranty, an undivided interest and participation in the Obligations owed to
the other Lenders so that such excess payment received shall be applied ratably
as among the Lenders in accordance with their Pro Rata Shares; provided, that to
the extent that such excess payment received by the purchasing party is
thereafter recovered from it, those purchases of participations shall be
rescinded in whole or in part, as applicable, and the applicable portion of the
purchase price paid therefor shall be returned to such purchasing party, but
without interest except to the extent that such purchasing party is required to
pay interest in connection with the recovery of the excess payment.
 
15.13         Agency for Perfection.  Agent hereby appoints each other Lender
(and each Bank Product Provider) as its agent (and each Lender hereby accepts
(and by entering into a Bank Product Agreement, each Bank Product Provider shall
be deemed to accept) such appointment) for the purpose of perfecting Agent’s
Liens in assets which, in accordance with Article 8 or Article 9, as applicable,
of the Code can be perfected by possession or control.  Should any Lender obtain
possession or control of any such Collateral, such Lender shall notify Agent
thereof, and, promptly upon Agent’s request therefor shall deliver possession or
control of such Collateral to Agent or in accordance with Agent’s instructions.
 
15.14         Payments by Agent to the Lenders.  All payments to be made by
Agent to the Lenders (or Bank Product Providers) shall be made by bank wire
transfer of immediately available funds pursuant to such wire transfer
instructions as each party may designate for itself by written notice to
Agent.  Concurrently with each such payment, Agent shall identify whether such
payment (or any portion thereof) represents principal, premium, fees, or
interest of the Obligations.
 
15.15         Concerning the Collateral and Related Loan Documents.  Each member
of the Lender Group authorizes and directs Agent to enter into this Agreement
and the other Loan Documents.  Each member of the Lender Group agrees (and by
entering into a Bank Product Agreement, each Bank Product Provider shall be
deemed to agree) that any action taken by Agent in accordance with the terms of
this Agreement or the other Loan Documents relating to the Collateral and the
exercise by Agent of its powers set forth therein or herein, together with such
other powers that are reasonably incidental thereto, shall be binding upon all
of the Lenders (and such Bank Product Provider).
 
15.16         Field Examination Reports; Confidentiality; Disclaimers by
Lenders; Other Reports and Information.  By becoming a party to this Agreement,
each Lender:
 

 
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(a)         is deemed to have requested that Agent furnish such Lender, promptly
after it becomes available, a copy of each field examination report respecting
Borrower or its Subsidiaries (each, a “Report”) prepared by or at the request of
Agent, and Agent shall so furnish each Lender with such Reports,
 
(b)         expressly agrees and acknowledges that Agent does not (i) make any
representation or warranty as to the accuracy of any Report, and (ii) shall not
be liable for any information contained in any Report,
 
(c)         expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that Agent or other party performing any
field examination will inspect only specific information regarding Borrower and
its Subsidiaries and will rely significantly upon Borrower’s and its
Subsidiaries’ books and records, as well as on representations of Borrower’s
personnel,
 
(d)         agrees to keep all Reports and other material, non-public
information regarding Borrower and its Subsidiaries and their operations,
assets, and existing and contemplated business plans in a confidential manner in
accordance with Section 17.9, and
 
(e)         without limiting the generality of any other indemnification
provision contained in this Agreement, agrees:  (i) to hold Agent and any other
Lender preparing a Report harmless from any action the indemnifying Lender may
take or fail to take or any conclusion the indemnifying Lender may reach or draw
from any Report in connection with any loans or other credit accommodations that
the indemnifying Lender has made or may make to Borrower, or the indemnifying
Lender’s participation in, or the indemnifying Lender’s purchase of, a loan or
loans of Borrower, and (ii) to pay and protect, and indemnify, defend and hold
Agent, and any such other Lender preparing a Report harmless from and against,
the claims, actions, proceedings, damages, costs, expenses, and other amounts
(including, attorneys fees and costs) incurred by Agent and any such other
Lender preparing a Report as the direct or indirect result of any third parties
who might obtain all or part of any Report through the indemnifying Lender.
 
(f)         In addition to the foregoing,  (x) any Lender may from time to time
request of Agent in writing that Agent provide to such Lender a copy of any
report or document provided by Borrower or its Subsidiaries to Agent that has
not been contemporaneously provided by Borrower or such Subsidiary to such
Lender, and, upon receipt of such request, Agent promptly shall provide a copy
of same to such Lender, (y) to the extent that Agent is entitled, under any
provision of the Loan Documents, to request additional reports or information
from Borrower or its Subsidiaries, any Lender may, from time to time, reasonably
request Agent to exercise such right as specified in such Lender’s notice to
Agent, whereupon Agent promptly shall request of Borrower the additional reports
or information reasonably specified by such Lender, and, upon receipt thereof
from Borrower or such Subsidiary, Agent promptly shall provide a copy of same to
such Lender, and (z) any time that Agent renders to Borrower a statement
regarding the Loan Account, Agent shall send a copy of such statement to each
Lender.
 
15.17         Several Obligations; No Liability.  Notwithstanding that certain
of the Loan Documents now or hereafter may have been or will be executed only by
or in favor of Agent in its capacity as such, and not by or in favor of the
Lenders, any and all obligations on the part of Agent (if any) to make any
credit available hereunder shall constitute the several (and not joint)
obligations of the respective Lenders on a ratable basis, according to their
respective Commitments, to make an amount of such credit not to exceed, in
principal amount, at any one time outstanding, the amount of their respective
Commitments.  Nothing contained herein shall confer upon any Lender any interest
in, or subject any Lender to any liability for, or in respect of, the business,
assets, profits, losses, or liabilities of any other Lender.  Each Lender shall
be solely responsible for notifying its Participants of any matters relating to
the Loan Documents to the extent any such notice may be required, and no Lender
shall have any obligation, duty, or liability to any Participant of any other
Lender.  Except as provided in Section 15.7, no member of the Lender Group shall
have any liability for the acts of any other member of the Lender Group.  No
Lender shall be responsible to Borrower or any other Person for any failure by
any other Lender (or Bank Product Provider) to fulfill its obligations to make
credit available hereunder, nor to advance for such Lender (or Bank Product
Provider)
 

 
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or on its behalf, nor to take any other action on behalf of such Lender (or Bank
Product Provider) hereunder or in connection with the financing contemplated
herein.
 
15.18         Lead Arranger and Book Runner.  Each of the Lead Arranger and Book
Runner, in such capacities, shall not have any right, power, obligation,
liability, responsibility, or duty under this Agreement other than those
applicable to it in its capacity as a Lender, as Agent, as Swing Lender, or as
Issuing Lender.  Without limiting the foregoing, each of the Lead Arranger and
Book Runner, in such capacities, shall not have or be deemed to have any
fiduciary relationship with any Lender or any Loan Party.  Each Lender, Agent,
Swing Lender, Issuing Lender, and each Loan Party acknowledges that it has not
relied, and will not rely, on the Lead Arranger and Book Runner in deciding to
enter into this Agreement or in taking or not taking action hereunder.  Each of
the Lead Arranger and Book Runner, in such capacities, shall be entitled to
resign at any time by giving notice to Agent and Borrower.
 
16.         WITHHOLDING TAXES.
 
16.1         Payments. All payments made by Borrower hereunder or under any note
or other Loan Document will (except to the extent required by law) be made
without setoff, counterclaim, or other defense.
 
(a)         In addition, all such payments will be made free and clear of, and
without deduction or withholding for, any present or future Indemnified Taxes,
except to the extent required by law.
 
(b)         In the event any deduction or withholding of Indemnified Taxes is
required, Borrower shall comply with the next sentence of this Section 16.1.  If
any Indemnified Taxes are so levied or imposed, Borrower agrees to pay the full
amount of such Indemnified Taxes and such additional amounts as may be necessary
so that every payment of all amounts due under this Agreement, any note, or Loan
Document, including any amount paid pursuant to this Section 16.1 after
withholding or deduction for or on account of any Indemnified Taxes, will not be
less than the amount that would be required to be paid hereunder in the absence
of such deduction or withholding; provided, that Borrower shall not be required
to increase any such amounts to the extent that the increase in such amount
payable results from Agent’s or such Lender’s own willful misconduct or gross
negligence (as finally determined by a court of competent
jurisdiction).  Borrower will furnish to Agent as promptly as possible after the
date the payment of any Indemnified Tax is due pursuant to applicable law,
certified copies of tax receipts or other evidence of payment reasonably
satisfactory) evidencing such payment by Borrower.
 
(c)         Borrower agrees to pay any present or future stamp, documentary or
similar or related Taxes that arise from the execution and delivery of the Loan
Documents, and any consents, waivers, amendments and enforcement of rights under
the Loan Documents, excluding, however, any such Taxes imposed as a result of
any assignment or participation.
 
16.2         Exemptions.
 
(a)         Each Lender agrees to deliver to Borrower (with a copy to Agent)
such properly completed and executed forms, certificates or other evidence to
the extent prescribed by applicable Tax laws or by any Governmental Authority
and such other reasonably requested information as will permit Borrower and
Agent to determine (x) whether or not payments made hereunder or under any other
Loan Document are subject to deduction or withholding of Taxes, (y) if
applicable, the required rate of withholding or deduction of any Tax, and (z)
such Lender’s entitlement to any available exemption from, or reduction of, such
Taxes in respect of all payments to be made to such Lender pursuant to this
Agreement or any other Loan Document or otherwise to establish such Lender’s
status for withholding Tax purposes in the applicable jurisdiction.  Without
limiting the generality of the foregoing, as long as Borrower is engaged in the
conduct of a trade or business in, or is created or organized in or under the
laws of, the United States of America or any political subdivision thereof, each
Lender and Participant shall deliver to Borrower and Agent (or, in the case of a
Participant to the Lender granting the participation):
 

 
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(i)         if such Lender or Participant is entitled to claim an exemption from
United States withholding tax pursuant to the portfolio interest exception, (A)
a statement of the Lender or Participant, signed under penalty of perjury, that
it is not a (I) a “bank” as described in Section 881(c)(3)(A) of the IRC, (II) a
10% shareholder of Borrower (within the meaning of Section 871(h)(3)(B) of the
IRC), or (III) a controlled foreign corporation related to Borrower within the
meaning of Section 864(d)(4) of the IRC, and (B) two (2) properly completed and
executed copies of IRS Form W-8BEN or Form W-8IMY (with proper attachments);
 
(ii)         if such Lender or Participant is entitled to claim an exemption
from, or a reduction of, withholding tax under a United States tax treaty, two
(2) properly completed and executed copies of IRS Form W-8BEN;
 
(iii)         if such Lender or Participant is entitled  to claim that interest
paid under this Agreement is exempt from United States withholding tax because
it is effectively connected with a United States trade or business of such
Lender, two (2) properly completed and executed copies of IRS Form W-8ECI;
 
(iv)         if such Lender or Participant is entitled to claim that interest
paid under this Agreement is exempt from United States withholding tax because
such Lender or Participant serves as an intermediary, two (2) properly completed
and executed copies of IRS Form W-8IMY (with proper attachments); or
 
(v)         two (2) properly completed and executed copies of any other form or
forms, including IRS Form W-9, as may be required under the IRC or other laws of
the United States as a condition to exemption from United States withholding or
backup withholding tax.
 
(b)         [Intentionally omitted.]
 
(c)         Each Lender or Participant shall deliver to Borrower and Agent (or
in the case of a Participant, to the Lender granting the participation) such
forms, certificates and other evidence required under this Section 16.2 at the
following times: (i) upon becoming a party to this Agreement or acquiring its
interest therein, (ii) upon a change of law or circumstances requiring a new or
additional form, certificate or other evidence, (iii) upon the expiration of a
previously delivered form, certificate or other evidence, and (iv) when
reasonably requested by Borrower.  Each Lender or Participant shall promptly
notify Borrower and Agent (or, in the case of a Participant, to the Lender
granting the participation) of any change in circumstances which would modify or
render invalid any claimed exemption or reduction.
 
(d)         If a Lender or Participant claims exemption from, or reduction of,
withholding tax and such Lender or Participant sells, assigns, grants a
participation in, or otherwise transfers all or part of the Obligations of
Borrower to such Lender or Participant, such Lender or Participant agrees to
notify Borrower and Agent (or, in the case of a sale of a participation
interest, to the Lender granting the participation only) of  the percentage
amount in which it is no longer the beneficial owner of Obligations of Borrower
to such Lender or Participant.  To the extent of such percentage amount,
Borrower and Agent will treat such Lender’s or such Participant’s documentation
provided pursuant to Section 16.2(a) as no longer valid.  With respect to such
percentage amount, such Participant or Assignee shall provide new documentation,
pursuant to Section 16.2(a).  Borrower agrees that each Participant shall be
entitled to the benefits of this Section 16 with respect to its participation in
any portion of the Commitments and the Obligations so long as such Participant
complies with the obligations set forth in this Section 16 with respect thereto.
 
16.3         Reductions.
 
(a)         If a Lender or a Participant is entitled to a reduction in the
applicable withholding tax, Borrower and Agent (or, in the case of a
Participant, to the Lender granting the participation) may withhold from any
payment to such Lender or such Participant an amount equivalent to the
applicable withholding tax after taking into account such reduction.  If the
forms or other documentation required by Section 16.2(a) are not delivered to
Borrower and Agent (or, in the case of a Participant, to the Lender granting the
participation), then Borrower and
 

 
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Agent (or, in the case of a Participant, to the Lender granting the
participation) may withhold from any payment to such Lender or such Participant
not providing such forms or other documentation an amount equivalent to the
applicable withholding tax.
 
(b)         If the IRS or any other Governmental Authority of the United States
or other jurisdiction asserts a claim that Agent (or, in the case of a
Participant, to the Lender granting the participation) did not properly withhold
tax from amounts paid to or for the account of any Lender or any Participant due
to a failure on the part of the Lender or any Participant (because the
appropriate form was not delivered, was not properly executed, or because such
Lender failed to notify Agent (or such Participant failed to notify the Lender
granting the participation) of a change in circumstances which rendered the
exemption from, or reduction of, withholding tax ineffective, or for any other
reason) such Lender shall indemnify and hold Agent harmless (or, in the case of
a Participant, such Participant shall indemnify and hold the Lender granting the
participation harmless) for all amounts paid, directly or indirectly, by Agent
(or, in the case of a Participant, to the Lender granting the participation), as
tax or otherwise, including penalties and interest, and including any taxes
imposed by any jurisdiction on the amounts payable to Agent (or, in the case of
a Participant, to the Lender granting the participation only) under this Section
16, together with all costs and expenses (including attorneys fees and
expenses).  The obligation of the Lenders and the Participants under this
subsection shall survive the payment of all Obligations and the resignation or
replacement of Agent.
 
16.4         Refunds.  If Agent or a Lender determines, in its sole discretion
exercised in good faith, that it has received a refund of any Indemnified Taxes
(or realized a credit of any Indemnified Taxes) to which Borrower has paid
additional amounts pursuant to this Section 16, it shall promptly pay over an
amount equal to such refund or credit, as applicable, to Borrower (but only to
the extent of payments made, or additional amounts paid, by Borrower under this
Section 16 with respect to Indemnified Taxes giving rise to such a refund), net
of all reasonable out-of-pocket expenses of Agent or such Lender in obtaining
such refund or credit, as applicable, and without interest (other than any
interest paid by the applicable Governmental Authority with respect to such a
refund or credit).  Borrower, upon the request of Agent or such Lender, agrees
to repay the amount paid over to Borrower (plus any penalties, interest or other
charges, imposed by the applicable Governmental Authority, other than such
penalties, interest or other charges imposed as a result of the willful
misconduct or gross negligence of Agent hereunder) to Agent or such Lender in
the event Agent or such Lender is required to repay such refund or credit to
such Governmental Authority.  Notwithstanding anything in this Agreement to the
contrary, this Section 16 shall not be construed to require Agent or any Lender
to make available its tax returns (or any other information which it deems
confidential) to Borrower or any other Person.
 
17.         GENERAL PROVISIONS.
 
17.1         Effectiveness.  This Agreement shall be binding and deemed
effective when executed by Borrower, Agent, and each Lender whose signature is
provided for on the signature pages hereof.
 
17.2         Section Headings.  Headings and numbers have been set forth herein
for convenience only.  Unless the contrary is compelled by the context,
everything contained in each Section applies equally to this entire Agreement.
 
17.3         Interpretation.  Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed against the Lender Group or Borrower,
whether under any rule of construction or otherwise.  On the contrary, this
Agreement has been reviewed by all parties and shall be construed and
interpreted according to the ordinary meaning of the words used so as to
accomplish fairly the purposes and intentions of all parties hereto.
 
17.4         Severability of Provisions.  Each provision of this Agreement shall
be severable from every other provision of this Agreement for the purpose of
determining the legal enforceability of any specific provision.
 
17.5         Bank Product Providers.  Each Bank Product Provider shall be deemed
a third party beneficiary hereof and of the provisions of the other Loan
Documents for purposes of any reference in a Loan Document to the
 

 
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parties for whom Agent is acting.  Agent hereby agrees to act as agent for such
Bank Product Providers and, by virtue of entering into a Bank Product Agreement,
the applicable Bank Product Provider shall be automatically deemed to have
appointed Agent as its agent and to have accepted the benefits of the Loan
Documents; it being understood and agreed that the rights and benefits of each
Bank Product Provider under the Loan Documents consist exclusively of such Bank
Product Provider’s being a beneficiary of the Liens and security interests (and,
if applicable, guarantees) granted to Agent and the right to share in payments
and collections out of the Collateral as more fully set forth herein. In
addition, each Bank Product Provider, by virtue of entering into a Bank Product
Agreement, shall be automatically deemed to have agreed that Agent shall have
the right, but shall have no obligation, to establish, maintain, relax, or
release reserves in respect of the Bank Product Obligations and that if reserves
are established there is no obligation on the part of Agent to determine or
insure whether the amount of any such reserve is appropriate or not.  In
connection with any such distribution of payments or proceeds of Collateral,
Agent shall be entitled to assume no amounts are due or owing to any Bank
Product Provider unless such Bank Product Provider has provided a written
certification (setting forth a reasonably detailed calculation) to Agent as to
the amounts that are due and owing to it and such written certification is
received by Agent a reasonable period of time prior to the making of such
distribution.  Agent shall have no obligation to calculate the amount due and
payable with respect to any Bank Products, but may rely upon the written
certification of the amount due and payable from the applicable Bank Product
Provider.  In the absence of an updated certification, Agent shall be entitled
to assume that the amount due and payable to the applicable Bank Product
Provider is the amount last certified to Agent by such Bank Product Provider as
being due and payable (less any distributions made to such Bank Product Provider
on account thereof).  Borrower may obtain Bank Products from any Bank Product
Provider, although Borrower is not required to do so.  Borrower acknowledges and
agrees that no Bank Product Provider has committed to provide any Bank Products
and that the providing of Bank Products by any Bank Product Provider is in the
sole and absolute discretion of such Bank Product Provider.  Notwithstanding
anything to the contrary in this Agreement or any other Loan Document, no
provider or holder of any Bank Product shall have any voting or approval rights
hereunder (or be deemed a Lender) solely by virtue of its status as the provider
or holder of such agreements or products or the Obligations owing thereunder,
nor shall the consent of any such provider or holder be required (other than in
their capacities as Lenders, to the extent applicable) for any matter hereunder
or under any of the other Loan Documents, including as to any matter relating to
the Collateral or the release of Collateral or Guarantors. 
 
17.6         Debtor-Creditor Relationship.  The relationship between the Lenders
and Agent, on the one hand, and the Loan Parties, on the other hand, is solely
that of creditor and debtor.  No member of the Lender Group has (or shall be
deemed to have) any fiduciary relationship or duty to any Loan Party arising out
of or in connection with the Loan Documents or the transactions contemplated
thereby, and there is no agency or joint venture relationship between the
members of the Lender Group, on the one hand, and the Loan Parties, on the other
hand, by virtue of any Loan Document or any transaction contemplated therein.
 
17.7         Counterparts; Electronic Execution.  This Agreement may be executed
in any number of counterparts and by different parties on separate counterparts,
each of which, when executed and delivered, shall be deemed to be an original,
and all of which, when taken together, shall constitute but one and the same
Agreement.  Delivery of an executed counterpart of this Agreement by
telefacsimile or other electronic method of transmission shall be equally as
effective as delivery of an original executed counterpart of this
Agreement.  Any party delivering an executed counterpart of this Agreement by
telefacsimile or other electronic method of transmission also shall deliver an
original executed counterpart of this Agreement but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability, and
binding effect of this Agreement.  The foregoing shall apply to each other Loan
Document mutatis mutandis.
 
17.8         Revival and Reinstatement of Obligations; Certain Waivers.  If the
incurrence or payment of the Obligations by Borrower or Guarantor or the
transfer to the Lender Group of any property should for any reason subsequently
be asserted, or declared, to be void or voidable under any state or federal law
relating to creditors’ rights, including provisions of the Bankruptcy Code
relating to fraudulent conveyances, preferences, or other voidable or
recoverable payments of money or transfers of property (each, a “Voidable
Transfer”), and if the
 

 
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Lender Group is required to repay or restore, in whole or in part, any such
Voidable Transfer, or elects to do so upon the advice of counsel, then, as to
any such Voidable Transfer, or the amount thereof that the Lender Group is
required or elects to repay or restore, and as to all reasonable costs,
expenses, and attorneys fees of the Lender Group related thereto, the liability
of Borrower or Guarantor automatically shall be revived, reinstated, and
restored and shall exist as though such Voidable Transfer had never been made.
 
17.9         Confidentiality.
 
(a)         Agent and Lenders each individually (and not jointly or jointly and
severally) agree that material, non-public information regarding Borrower and
its Subsidiaries, their operations, assets, and existing and contemplated
business plans (“Confidential Information”) shall be treated by Agent and the
Lenders in a confidential manner, and shall not be disclosed by Agent and the
Lenders to Persons who are not parties to this Agreement, except:  (i) to
attorneys for and other advisors, accountants, auditors, and consultants to any
member of the Lender Group  and to employees, directors and officers of any
member of the Lender Group (the Persons in this clause (i), “Lender Group
Representatives”) on a “need to know” basis in connection with this Agreement
and the transactions contemplated hereby and on a confidential basis, (ii) to
Subsidiaries and Affiliates of any member of the Lender Group (including the
Bank Product Providers), provided that any such Subsidiary or Affiliate shall
have agreed to receive such information hereunder subject to the terms of this
Section 17.9, (iii) as may be required by regulatory authorities purporting to
have legal authority to regulate the business and operations of such member of
the Lender Group or its Affiliates so long as such authorities are informed of
the confidential nature of such information, (iv) as may be required by statute,
decision, or judicial or administrative order, rule, or regulation; provided
that (x) prior to any disclosure under this clause (iv), the disclosing party
shall provide Borrower with prior notice thereof, to the extent that it is
practicable to do so and to the extent that the disclosing party is permitted to
provide such prior notice to Borrower pursuant to the terms of the applicable
statute, decision, or judicial or administrative order, rule, or regulation and
(y) any disclosure under this clause (iv) shall be limited to the portion of the
Confidential Information as may be required by such statute, decision, or
judicial or administrative order, rule, or regulation, (v) as may be agreed to
in advance in writing by Borrower, (vi) as requested or required by any
Governmental Authority pursuant to any subpoena or other legal process,
provided, that, (x) prior to any disclosure under this clause (vi) the
disclosing party shall provide Borrower with prior written notice thereof, to
the extent that it is practicable to do so and to the extent that the disclosing
party is permitted to provide such prior written notice to Borrower pursuant to
the terms of the subpoena or other legal process and (y) any disclosure under
this clause (vi) shall be limited to the portion of the Confidential Information
as may be required by such Governmental Authority pursuant to such subpoena or
other legal process, (vii) as to any such information that is or becomes
generally available to the public (other than as a result of prohibited
disclosure by Agent or the Lenders or the Lender Group Representatives), (viii)
in connection with any assignment, participation  or pledge of any Lender’s
interest under this Agreement, provided that prior to receipt of Confidential
Information any such assignee, participant, or pledgee shall have agreed in
writing to receive such Confidential Information hereunder subject to the terms
of this Section, (ix) in connection with any litigation or other adversary
proceeding involving parties hereto which such litigation or adversary
proceeding involves claims related to the rights or duties of such parties under
this Agreement or the other Loan Documents; provided, that, prior to any
disclosure to any Person (other than any Loan Party, Agent, any Lender, any of
their respective Affiliates, or their respective counsel) under this clause (ix)
with respect to litigation involving any Person (other than Borrower, Agent, any
Lender, any of their respective Affiliates, or their respective counsel), the
disclosing party shall provide Borrower with prior written notice thereof, and
(x) in connection with, and to the extent reasonably necessary for, the exercise
of any secured creditor remedy under this Agreement or under any other Loan
Document.  Said authorization to disclose pursuant to clauses (i), (ii), (vii),
(viii), (ix) and (x) is subject to any federal or state securities laws that
reasonably require the parties to keep some or all aspects of the transaction
contemplated herein confidential, to the extent that Borrower has provided Agent
prior written notice of such requirement with respect to a portion of the
Confidential Information.  Furthermore, nothing in this Section 17.9 shall be
construed as a waiver of any applicable attorney client privilege or any duty of
confidentiality on the part of any attorney or accountant under any code of
professional conduct that, in each case, relates to communications with respect
to transactions contemplated herein or the execution thereof.
 

 
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(b)         Anything in this Agreement to the contrary notwithstanding, Agent
may disclose information concerning the terms and conditions of this Agreement
and the other Loan Documents to loan syndication and pricing reporting services
or in its marketing or promotional materials, with such information to consist
of deal terms and other information customarily found in such publications or
marketing or promotional materials and, with the consent of Borrower (such
consent not to be unreasonably withheld, delayed or conditioned), in connection
with the foregoing, may otherwise use the name, logos, and other insignia of
Borrower or the other Loan Parties and the Commitments provided hereunder in any
“tombstone” or other advertisements, on its website or in other marketing
materials of Agent.
 
(c)         The Loan Parties hereby acknowledge that Agent or its Affiliates may
make available to the Lenders materials or information provided by or on behalf
of Borrower hereunder (collectively, “Borrower Materials”) by posting Borrower
Materials on IntraLinks, SyndTrak or another similar electronic system (the
“Platform”) and certain of the Lenders may be “public-side” Lenders (i.e.,
Lenders that do not wish to receive material non-public information with respect
to the Loan Parties or their securities) (each, a “Public Lender”).  The Loan
Parties shall be deemed to have authorized Agent and its Affiliates and the
Lenders to treat Borrower Materials marked “PUBLIC” or otherwise at any time
filed with the SEC as not containing any material non-public information with
respect to the Loan Parties or their securities for purposes of United States
federal and state securities laws.  All Borrower Materials marked “PUBLIC” are
permitted to be made available through a portion of the Platform designated as
“Public Investor” (or another similar term).  Agent and its Affiliates and the
Lenders shall be entitled to treat any Borrower Materials that are not marked
“PUBLIC” or that are not at any time filed with the SEC as being suitable only
for posting on a portion of the Platform not marked as “Public Investor” (or
such other similar term).
 
17.10         Survival.  All representations and warranties made by the Loan
Parties in the Loan Documents and in the certificates or other instru­ments
delivered in connection with or pursuant to this Agreement or any other Loan
Document shall be considered to have been relied upon by the other parties
hereto and shall survive the execution and delivery of the Loan Documents and
the making of any Loans and issuance of any Letters of Credit, regardless of any
investigation made by any such other party or on its behalf and notwithstanding
that Agent, Issuing Lender, or any Lender may have had notice or knowledge of
any Default or Event of Default or incorrect representation or warranty at the
time any credit is extended hereunder, and shall continue in full force and
effect as long as the principal of, or any accrued interest on, any Loan or any
fee or any other amount payable under this Agreement is outstand­ing or unpaid
or any Letter of Credit is outstanding and so long as the Commitments have not
expired or been terminated.
 
17.11         Patriot Act.  Each Lender that is subject to the requirements of
the Patriot Act hereby notifies Borrower that pursuant to the requirements of
the Act, it is required to obtain, verify and record information that identifies
Borrower, which information includes the name and address of Borrower and other
information that will allow such Lender to identify Borrower in accordance with
the Patriot Act.  In addition, if Agent is required by law or regulation or
internal policies to do so, it shall have the right to periodically conduct (a)
Patriot Act searches, OFAC/PEP searches, and customary individual background
checks for the Loan Parties and (b) OFAC/PEP searches and customary
individual  background checks for the Loan Parties’ senior management and key
principals, and Borrower agrees to cooperate in respect of the conduct of such
searches and further agrees that the reasonable, documented out-of-pocket costs
and charges for such searches shall constitute Lender Group Expenses hereunder
and be for the account of Borrower.
 
 
 
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17.12         Integration.  This Agreement, together with the other Loan
Documents, reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof.  The foregoing to
the contrary notwithstanding, all Bank Product Agreements, if any, are
independent agreements governed by the written provisions of such Bank Product
Agreements, which will remain in full force and effect, unaffected by any
repayment, prepayments, acceleration, reduction, increase, or change in the
terms of any credit extended hereunder, except as otherwise expressly provided
in such Bank Product Agreement.
 
[Signature pages to follow.]

 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered as of the date first above written.
 
BORROWER:
STILLWATER MINING COMPANY,
a Delaware corporation
         
By:
/s/ Francis R. McAllister
 
Name:
Francis R. McAllister
 
Title:
Chief Executive Officer
       

 
 
 
[SIGNATURE PAGE TO CREDIT AGREEMENT]

 
 

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WELLS FARGO CAPITAL FINANCE, LLC,
a Delaware limited liability company, as Agent, as Lead Arranger, as Book
Runner, and as a Lender
         
By:
/s/ Peter Possemato
 
Name:
Peter Possemato
   
Its Authorized Signatory
     

 
 
 
[SIGNATURE PAGE TO CREDIT AGREEMENT]

 
 

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Schedule 1.1
 
As used in the Agreement, the following terms shall have the following
definitions:
 
“Account” means an account (as that term is defined in the Code).
 
“Account Debtor” means any Person who is obligated on an Account, chattel paper,
or a general intangible.
 
“Accounting Changes” means changes in accounting principles required by the
promulgation of any rule, regulation, pronouncement or opinion by the Financial
Accounting Standards Board of the American Institute of Certified Public
Accountants (or successor thereto or any agency with similar functions).
 
“Acquired Indebtedness” means Indebtedness of a Person whose assets or Equity
Interests are acquired by Borrower or any of its Subsidiaries in a Permitted
Acquisition; provided, that such Indebtedness (a) is either purchase money
Indebtedness or a Capital Lease with respect to Equipment or mortgage financing
with respect to real property, (b) was in existence prior to the date of such
Permitted Acquisition, and (c) was not incurred in connection with, or in
contemplation of, such Permitted Acquisition.
 
“Acquisition” means (a) the purchase or other acquisition by a Person or its
Subsidiaries of all or substantially all of the assets of (or any division or
business line of) any other Person, or (b) the purchase or other acquisition
(whether by means of a merger, consolidation, or otherwise) by a Person or its
Subsidiaries of all of the Equity Interests of any other Person.
 
“Acquisition Agreement” means a purchase agreement, acquisition agreement, or
other agreement evidencing the transactions contemplated by a Permitted
Acquisition.
 
“Additional Documents” has the meaning specified therefor in Section 5.12 of the
Agreement.
 
“Administrative Questionnaire” has the meaning specified therefor in Section
13.1(a)(ii)(G).
 
“Affected Lender” has the meaning specified therefor in Section 2.13(b) of the
Agreement.
 
“Affiliate” means, as applied to any Person, any other Person who controls, is
controlled by, or is under common control with, such Person.  For purposes of
this definition, “control” means the possession, directly or indirectly through
one or more intermediaries, of the power to direct the management and policies
of a Person, whether through the ownership of Equity Interests, by contract, or
otherwise; provided, that, for purposes of the definition of Eligible Accounts
and Section 6.10 of the Agreement: (a) any Person which owns directly or
indirectly 10% or more of the Equity Interests having ordinary voting power for
the election of directors or other members of the governing body of a Person or
10% or more of the partnership or other ownership interests of a Person (other
than as a limited partner of such Person) shall be deemed an Affiliate of such
Person, (b) each director (or comparable manager) of a Person shall be deemed to
be an Affiliate of such Person, and (c) each partnership in which a Person is a
general partner shall be deemed an Affiliate of such Person.
 
“Agent” has the meaning specified therefor in the preamble to the Agreement.
 
“Agent-Related Persons” means Agent, together with its Affiliates, officers,
directors, employees, attorneys, and agents.
 

 
 

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“Agent’s Account” means the Deposit Account of Agent identified on Schedule A-1
(or such other Deposit Account of Agent that has been designated as such, in
writing, by Agent to Borrower and the Lenders).
 
“Agent’s Liens” means the Liens granted by Borrower or its Subsidiaries to Agent
under the Loan Documents and securing the Obligations.
 
“Agreement” means the Credit Agreement to which this Schedule 1.1 is attached.
 
“Altar Project” means the development of the copper, gold and associated
minerals porphyry project of Peregrine Metals Ltd. located near the Altar land
position in or near the San Juan province of Argentina.
 
“Altar Project Payment Conditions” means, with respect to any Designated Altar
Project Transaction, each of the following conditions:
 
(a) no Default or Event of Default has occurred and is continuing or would
immediately result from the consummation of the Designated Altar Project
Transaction,
 
(b) Borrower and its Subsidiaries shall be in compliance with Section 7 of the
Agreement (calculated as if a Financial Covenant Trigger Period is then in
effect), on a pro forma basis after giving effect to such Designated Altar
Project Transaction and the payment of all amounts (including fees and expenses)
owing in connection therewith,
 
(c) Borrower has Excess Availability on the date of such Designated Altar
Project Transaction, and after giving effect thereto, that is greater than
$35,000,000, and
 
(d)  (i) Borrower directly or indirectly owns more than 50% of the Equity
Interests of each of SCLLC and each of its now owned and hereinafter acquired
Subsidiaries and (ii) neither SCLLC nor any of its now or hereinafter acquired
Subsidiaries shall have sold or otherwise disposed of more than 50% by value
of their now owned and hereinafter acquired assets.
 
“Applicable Margin” means, as of any date of determination and with respect to
Base Rate Loans or LIBOR Rate Loans, as applicable, the applicable margin set
forth in the following table that corresponds to the Average Excess Availability
of Borrower for the most recently completed fiscal quarter; provided, that for
the period from the Closing Date through and including March 31, 2012, the
Applicable Margin shall be set at the margin in the row styled “Level II”:
 
 
Level
 
Average Excess Availability
 
Applicable Margin Relative to Base Rate Loans (the “Base Rate Margin”)
 
 
Applicable Margin Relative to LIBOR Rate Loans (the “LIBOR Rate Margin”)
 
I
 
< 33% of the Maximum Revolver Amount
 
1.75 percentage points
 
 
2.75 percentage points

 
2

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II
 
< 66% of the Maximum Revolver Amount and > 33% of the Maximum Revolver Amount
 
 
1.50 percentage points
 
2.50 percentage points
 
III
 
>  66% of the Maximum Revolver Amount
 
1.25 percentage points
 
2.25 percentage points
 

The Applicable Margin shall be re-determined as of the first day of each fiscal
quarter of Borrower.
 
“Applicable Unused Line Fee Percentage” means, as of any date of determination,
the applicable percentage set forth in the following table that corresponds to
the percentage represented by the result of (a) the difference between (i) the
average daily amount of the Maximum Revolver Amount during the most recently
completed month minus (ii) the Average Revolver Usage of Borrower for the most
recently completed month as determined by Agent in its Permitted Discretion,
divided by (b) the average daily amount of the Maximum Revolver Amount during
the most recently completed month; provided, that for the period from the
Closing Date through and including March 31, 2012, the Applicable Unused Line
Fee Percentage shall be set at the rate in the row styled “Level II”:
 
 
Level
 
 
Unused Percentage of the Maximum Revolver Amount
 
Applicable Unused Line Fee Percentage
 
I
 
 
< 50%
 
0.375 percentage points
 
II
 
 
≥ 50%
 
0.50 percentage points

The Applicable Unused Line Fee Percentage shall be re-determined on the first
date of each month by Agent.

“Application Event” means the occurrence of (a) a failure by Borrower to repay
all of the Obligations (other than Contingent Obligations) in full on the
Maturity Date, or (b) an Event of Default and the election by Agent or the
Required Lenders to require that payments and proceeds of Collateral be applied
pursuant to Section 2.4(b)(ii) of the Agreement.
 
“Assignee” has the meaning specified therefor in Section 13.1(a)(i) of the
Agreement.
 
“Assignment and Acceptance” means an Assignment and Acceptance Agreement
substantially in the form of Exhibit A-1 to the Agreement.
 
“Authorized Person” means any one of the individuals identified on Schedule A-2
to the Agreement, as such schedule is updated from time to time by written
notice from Borrower to Agent.
 
“Availability” means, as of any date of determination, the amount that Borrower
is entitled to borrow as Revolving Loans under Section 2.1 of the Agreement
(after giving effect to the then outstanding Revolver Usage).
 

 
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“Availability Reserve” means (a) $0, from and including the Closing Date through
and including December 13, 2012 and (b) $50,000,000, from and including December
14, 2012 through and including March 15, 2013; provided, however, that from and
after the date when all of the Indebtedness evidenced by the Notes has been
refinanced with the proceeds of Refinancing Indebtedness in respect thereof that
does not require any payments in cash to be made on or before the date that is
91 days after the Maturity Date, the Availability Reserve shall be reduced to
$0.
 
“Available Increase Amount” means, as of any date of determination, an amount
equal to the result of (a) $25,000,000 minus (b) the aggregate principal amount
of Increases to the Commitments previously made pursuant to Section 2.14 of the
Agreement.
 
“Average Excess Availability” means, with respect to any period, the sum of the
aggregate amount of Excess Availability for each Business Day in such period
(calculated as of the end of each respective Business Day) divided by the number
of Business Days in such period.
 
“Average Revolver Usage” means, with respect to any period, the sum of the
aggregate amount of Revolver Usage for each Business Day in such period
(calculated as of the end of each respective Business Day) divided by the number
of Business Days in such period.
 
“Bailee Agreement” means a bailee agreement, in form and substance satisfactory
to Agent, duly executed by the applicable bailee, warehouseman, Refiner, or
other similar party and Agent.
 
“Bank Product” means any one or more of the following financial products or
accommodations extended to Borrower or its Subsidiaries by a Bank Product
Provider:  (a) credit cards (including commercial credit cards (including
so-called “procurement cards” or “P-cards”)), (b) credit card processing
services, (c) debit cards, (d) stored value cards, (e) Cash Management Services,
or (f) transactions under Hedge Agreements.
 
“Bank Product Agreements” means those agreements entered into from time to time
by Borrower or its Subsidiaries with a Bank Product Provider in connection with
the obtaining of any of the Bank Products.
 
“Bank Product Collateralization” means providing cash collateral (pursuant to
documentation reasonably satisfactory to Agent) to be held by Agent for the
benefit of the Bank Product Providers (other than the Hedge Providers) in an
amount determined by Agent as sufficient to satisfy the reasonably estimated
credit exposure with respect to the then existing Bank Product Obligations
(other than Hedge Obligations).
 
“Bank Product Obligations” means (a) all obligations, liabilities, reimbursement
obligations, fees, or expenses owing by Borrower or its Subsidiaries to any Bank
Product Provider pursuant to or evidenced by a Bank Product Agreement and
irrespective of whether for the payment of money, whether direct or indirect,
absolute or contingent, due or to become due, now existing or hereafter arising,
(b) all Hedge Obligations, and (c) all amounts that Agent or any Lender is
obligated to pay to a Bank Product Provider as a result of Agent or such Lender
purchasing participations from, or executing guarantees or indemnities or
reimbursement obligations to, a Bank Product Provider with respect to the Bank
Products provided by such Bank Product Provider to Borrower or its Subsidiaries;
provided, in order for any item described in clauses (a) (b), or (c) above, as
applicable, to constitute “Bank Product Obligations”, if the applicable Bank
Product Provider is any Person other than Wells Fargo or its Affiliates, then
the applicable Bank Product must have been provided on or after the Closing Date
and Agent shall have received a Bank Product Provider Agreement within 10 days
after the date of the provision of the applicable Bank Product to Borrower or
its Subsidiaries.
 

 
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“Bank Product Provider” means any Lender or any of its Affiliates; provided,
that no such Person (other than Wells Fargo or its Affiliates) shall constitute
a Bank Product Provider with respect to a Bank Product unless and until Agent
shall have received a Bank Product Provider Agreement from such Person and with
respect to the applicable Bank Product within 10 days after the provision of
such Bank Product to Borrower or its Subsidiaries; provided, further, that if,
at any time, a Lender ceases to be a Lender under the Agreement, then, from and
after the date on which it ceases to be a Lender thereunder, neither it nor any
of its Affiliates shall constitute Bank Product Providers and the obligations
with respect to Bank Products provided by such former Lender or any of its
Affiliates shall no longer constitute Bank Product Obligations.
 
“Bank Product Provider Agreement” means (a) in the case of a Bank Product
Provider other than Wells Fargo or one of its Affiliates, an agreement in
substantially the form attached hereto as Exhibit B-2 to the Agreement, in form
and substance satisfactory to Agent, duly executed by the applicable Bank
Product Provider, Borrower, and Agent, and (b) in the case of Wells Fargo or one
of its Affiliates, an agreement between such Bank Product Provider and Agent in
form and substance satisfactory to Agent.
 
“Bank Product Reserves” means, as of any date of determination, those dollar
amount of reserves that Agent reasonably deems necessary or reasonably
appropriate to establish (based upon the Bank Product Providers’ determination
of the liabilities and obligations of Borrower and its Subsidiaries in respect
of Bank Product Obligations) in respect of Bank Products then provided or
outstanding.
 
“Bankruptcy Code” means title 11 of the United States Code, as in effect from
time to time.
 
“Base Rate” means the greatest of (a) the Federal Funds Rate plus ½%, (b) the
LIBOR Rate (which rate shall be calculated based upon an Interest Period of 3
months and shall be determined on a daily basis), plus 1 percentage point, and
(c) the rate of interest announced, from time to time, within Wells Fargo at its
principal office in San Francisco as its “prime rate”, with the understanding
that the “prime rate” is one of Wells Fargo’s base rates (not necessarily the
lowest of such rates) and serves as the basis upon which effective rates of
interest are calculated for those loans making reference thereto and is
evidenced by the recording thereof after its announcement in such internal
publications as Wells Fargo may designate.
 
“Base Rate Loan” means each portion of the Revolving Loans that bears interest
at a rate determined by reference to the Base Rate.
 
“Base Rate Margin” has the meaning set forth in the definition of Applicable
Margin.
 
“Benefit Plan” means a “defined benefit plan” (as defined in Section 3(35) of
ERISA) for which Borrower or any of its Subsidiaries or ERISA Affiliates has
been an “employer” (as defined in Section 3(5) of ERISA) within the past six
years.
 
“Board of Directors” means, as to any Person, the board of directors (or
comparable managers) of such Person, or any committee thereof duly authorized to
act on behalf of the board of directors (or comparable managers).
 
“Board of Governors” means the Board of Governors of the Federal Reserve System
of the United States (or any successor).
 
“Book Runner” has the meaning set forth in the preamble to the Agreement.
 
“Borrower” has the meaning specified therefor in the preamble to the Agreement.
 

 
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“Borrower Materials” has the meaning specified therefor in Section 17.9(c) of
the Agreement.
 
“Borrowing” means a borrowing consisting of Revolving Loans made on the same day
by the Lenders (or Agent on behalf thereof), or by Swing Lender in the case of a
Swing Loan, or by Agent in the case of an Extraordinary Advance.
 
“Borrowing Base” means, as of any date of determination, the result of:
 
(a)           85% of the amount of Eligible Accounts, less the amount, if any,
of the Dilution Reserve, plus
 
(b)           the lower of (A) the product of 70% multiplied by the value
(calculated at the lower of cost or market on a basis consistent with Borrower’s
historical accounting practices) by Classification of Eligible Inventory at such
time, and (B) the product of 85% multiplied by the Net Recovery Percentage by
Classification of Eligible Inventory identified in the most recent inventory
appraisal ordered and obtained by Agent multiplied by the value (calculated at
the lower of cost or market on a basis consistent with the Borrower’s historical
accounting practices) of Eligible Inventory (such determination may be made as
to different categories of Eligible Inventory based upon the Net Recovery
Percentage applicable to such categories) at such time, minus
 
(c)           the aggregate amount of reserves, if any, established by Agent in
its Permitted Discretion pursuant to Section 2.1(c) of the Agreement.
 
            “Borrowing Base Certificate” means a certificate in the form of
Exhibit B-1.
 
“Business Day” means any day that is not a Saturday, Sunday, or other day on
which banks are authorized or required to close in the state of New York, except
that, if a determination of a Business Day shall relate to a LIBOR Rate Loan,
the term “Business Day” also shall exclude any day on which banks are closed for
dealings in Dollar deposits in the London interbank market.
 
            “Capital Expenditures” means, for any period, the amount of all
expenditures by the Loan Parties during such period that are capital
expenditures as determined in accordance with GAAP, whether such expenditures
are paid in cash or financed, but excluding, without duplication (a)
expenditures made to restore, replace or rebuild property to the condition of
such property immediately prior to any damage, loss, destruction or condemnation
of such property, to the extent such expenditure is made with insurance
proceeds, condemnation awards or damage recovery proceeds relating to any such
damage, loss, destruction or condemnation, (b) expenditures financed solely with
net cash proceeds from the issuance of any Equity Interests, (c) with respect to
the purchase price of assets that are purchased substantially contemporaneously
with the trade-in of existing assets during such period, the amount that the
gross amount of such purchase price is reduced by the credit granted by the
seller of such assets for the assets being traded in at such time, (d)
expenditures made during such period to consummate one or more Permitted
Acquisitions, and (e) expenditures during such period that are reimbursed by a
third Person (excluding Borrower or any of its Affiliates).

“Capitalized Lease Obligation” means that portion of the obligations under a
Capital Lease that is required to be capitalized in accordance with GAAP.
 
“Capital Lease” means a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP.
 

 
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“Cash Equivalents” means (1) (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States or issued by any agency thereof
and backed by the full faith and credit of the United States, in each case
maturing within 1 year from the date of acquisition thereof, (b) marketable
direct obligations issued or fully guaranteed by any state of the United States
or any political subdivision of any such state or any public instrumentality
thereof maturing within 1 year from the date of acquisition thereof and, at the
time of acquisition, having one of the two highest ratings obtainable from
either Standard & Poor’s Rating Group (“S&P”) or Moody’s Investors Service, Inc.
(“Moody’s”), (c) commercial paper maturing no more than 270 days from the date
of creation thereof and, at the time of acquisition, having a rating of at least
A-1 from S&P or at least P-1 from Moody’s, (d) certificates of deposit, time
deposits, overnight bank deposits or bankers’ acceptances maturing within 1 year
from the date of acquisition thereof issued by any bank organized under the laws
of the United States or any state thereof or the District of Columbia or any
United States branch of a foreign bank having at the date of acquisition thereof
combined capital and surplus of not less than $500,000,000, (e) Deposit Accounts
maintained with (collectively, the “Specified Institutions”) (i) any bank that
satisfies the criteria described in clause (d) above, or (ii) any other bank
organized under the laws of the United States or any state thereof so long as
the full amount maintained with any such other bank is insured by the Federal
Deposit Insurance Corporation, (f) repurchase obligations of any commercial bank
satisfying the requirements of clause (d) of this definition or recognized
securities dealer having combined capital and surplus of not less than
$500,000,000, having a term of not more than seven days, with respect to
securities satisfying the criteria in clauses (a) or (d) above, (g) debt
securities with maturities of six months or less from the date of acquisition
backed by standby letters of credit issued by any commercial bank satisfying the
criteria described in clause (d) above, (h) Investments in money market funds
substantially all of whose assets are invested in the types of assets described
in clauses (a) through (g) above and (i) Securities Accounts maintained with
Specified Institutions in which all of the assets therein are Investments in the
types of assets described in clauses (a) through (g) above and (2) other
investments specified in Borrower’s Investment Guidelines.
 
“Cash Management Services” means any cash management or related services
including treasury, depository, return items, overdraft, controlled
disbursement, merchant store value cards, e-payables services, electronic funds
transfer, interstate depository network, automatic clearing house transfer
(including the Automated Clearing House processing of electronic funds transfers
through the direct Federal Reserve Fedline system) and other cash management
arrangements.
 
“CFC” means a controlled foreign corporation (as that term is defined in the
IRC).
 
“Change in Control” means any of the following events:
 
(a)  any “person” or “group” (as such terms are used in Section 13(d) and 14(d)
of the Exchange Act), is or becomes the “beneficial owner” (as defined in Rules
13d-3 and 13d-5 under the Exchange Act, except that a person shall be deemed to
have “beneficial ownership” of all securities that such person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of Equity Interests of Borrower (or other
securities convertible into such Equity Interests) representing 35% or more of
the combined voting power of all Equity Interests of Borrower entitled (without
regard to the occurrence of any contingency) to vote for the election of members
of the Board of Directors of Borrower;
 
 (b)  any Person or two or more Persons acting in concert, shall have acquired
by contract or otherwise, or shall have entered into a contract or arrangement,
except to the extent that such contract or agreement includes as a condition to
its effectiveness that the Obligations under the Agreement be paid in full,
that, upon consummation thereof, will result in its or their acquisition of the
power to exercise, directly or indirectly, a controlling influence over the
management or policies of Borrower or control over
 

 
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the Equity Interests of such Person entitled to vote for members of the Board of
Directors of Borrower on a fully-diluted basis (and taking into account all such
Equity Interests that such Person or group has the right to acquire pursuant to
any option right) representing 35% or more of the combined voting power of such
Equity Interests; or
 
(c)  during any period of 24 consecutive months commencing on or after the
Closing Date, the occurrence of a change in the composition of the Board of
Directors of Borrower such that a majority of the members of such Board of
Directors are not Continuing Directors;
 
(d)  Borrower fails to own and control, directly or indirectly, 100% of the
Equity Interests of each other Loan Party; and
 
(e)  the occurrence of any “Change in Control” as defined in the Indenture.
 
“Classification” means Collateral classification in accordance with the
historical accounting practices of the Borrower of cost or market value based on
the stage of production, including work in process (smelter), recycling work in
process, and spare parts and other supplies stored in a warehouse.
 
“Closing Date” means December 23, 2011.
 
“Code” means New York Uniform Commercial Code, as in effect from time to time.
 
“Collateral” means all assets and interests in assets and proceeds thereof now
owned or hereafter acquired by a Loan Party in or upon which a Lien is granted
by such Person in favor of Agent or the Lenders under any of the Loan Documents.
 
“Collateral Access Agreement” means a landlord waiver, bailee letter, or
acknowledgement agreement of any lessor, warehouseman, processor, consignee, or
other Person in possession of, having a Lien upon, or having rights or interests
in a Loan Party's books and records, Equipment, or Inventory, in each case, in
form and substance reasonably satisfactory to Agent.
 
“Commitment” means, with respect to each Lender, its Commitment and, with
respect to all Lenders, their Commitments, in each case as such Dollar amounts
are set forth beside such Lender’s name under the applicable heading on Schedule
C-1 to the Agreement or in the Assignment and Acceptance pursuant to which such
Lender became a Lender under the Agreement, as such amounts may be reduced or
increased from time to time pursuant to assignments made in accordance with the
provisions of Section 13.1 of the Agreement.
 
“Commodity Hedge Agreement” means (a) any swap, cap, collar, floor, future,
option, forward or derivative, in respect of one or more commodities, any
physical or financial commodity contract or agreement or other transportation
agreement, storage agreement, netting agreement or similar agreement, (b) any
combination of these transactions and (c) any other commodity hedge agreement
entered into by the Borrower or its Subsidiaries, in each case with respect to,
or involving, the purchase, sale, exchange, lease or hedge of any commodity,
price or price indices for any such commodity or services or any other similar
derivative agreements, entered into in order to manage fluctuations in the price
or availability to the Borrower or any of its Subsidiaries of any
commodity.  For purposes of this definition “commodity” means any tangible or
intangible metal and metals-related commodity of any type or description and
waste products or by-products thereof.
 
 “Compliance Certificate” means a certificate substantially in the form of
Exhibit C-1 to the Agreement delivered by the chief financial officer of
Borrower to Agent.
 

 
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“Confidential Information” has the meaning specified therefor in Section 17.9(a)
of the Agreement.
 
“Contingent Obligations” means the Obligations of Borrower with respect to Taxes
pursuant to Section 16 of the Agreement and other contingent indemnification
Obligations, in respect of which no assertion of liability or no claim or demand
for payment, in each case, in writing, has been made on or before such time.
 
“Continuing Director” means (a) any member of the Board of Directors who was a
director (or comparable manager) of Borrower on the Closing Date, and (b) any
individual who becomes a member of the Board of Directors after the Closing Date
if such individual was approved, appointed or nominated for election to the
Board of Directors by a majority of the Continuing Directors, but excluding any
such individual originally proposed for election in opposition to the Board of
Directors in office at the Closing Date in an actual or threatened election
contest relating to the election of the directors (or comparable managers) of
Borrower and whose initial assumption of office resulted from such contest or
the settlement thereof.
 
“Control Agreement” means a control agreement, in form and substance reasonably
satisfactory to Agent, executed and delivered by a Loan Party, Agent, and the
applicable securities intermediary (with respect to a Securities Account) or
bank (with respect to a Deposit Account).
 
“Default” means an event, condition, or default that, with the giving of notice,
the passage of time, or both, would be an Event of Default.
 
“Defaulting Lender” means any Lender that (a) has failed to fund any amounts
required to be funded by it under the Agreement within 1 Business Day of the
date that it is required to do so under the Agreement (including the failure to
make available to Agent amounts required pursuant to a Settlement or to make a
required payment in connection with a Letter of Credit Disbursement), (b)
notified the Borrower, Agent, or any Lender in writing that it does not intend
to comply with all or any portion of its funding obligations under the
Agreement, (c) has made a public statement to the effect that it does not intend
to comply with its funding obligations under the Agreement or under other
agreements generally (as reasonably determined by Agent) under which it has
committed to extend credit, (d) failed, within 1 Business Day after written
request by Agent, to confirm that it will comply with the terms of the Agreement
relating to its obligations to fund any amounts required to be funded by it
under the Agreement, (e) otherwise failed to pay over to Agent or any other
Lender any other amount required to be paid by it under the Agreement within 1
Business Day of the date that it is required to do so under the Agreement, or
(f) (i) becomes or is insolvent or has a parent company that has become or is
insolvent or (ii) becomes the subject of an Insolvency Proceeding, or has had a
receiver, conservator, trustee, or custodian or appointed for it, or has taken
any action in furtherance of, or indicating its consent to, approval of or
acquiescence in any such proceeding or appointment or has a parent company that
has become the subject of an Insolvency Proceeding, or has had a receiver,
conservator, trustee, or custodian appointed for it, or has taken any action in
furtherance of, or indicating its consent to, approval of or acquiescence in any
such proceeding or appointment.
 
“Defaulting Lender Rate” means (a) for the first 3 days from and after the date
the relevant payment is due, the Base Rate, and (b) thereafter, the interest
rate then applicable to Revolving Loans that are Base Rate Loans (inclusive of
the Base Rate Margin applicable thereto).
 
“Deposit Account” means any deposit account (as that term is defined in the
Code).
 

 
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“Designated Account” means the Deposit Account of Borrower identified on
Schedule D-1 to the Agreement (or such other Deposit Account of Borrower located
at Designated Account Bank that has been designated as such, in writing, by
Borrower to Agent).
 
“Designated Account Bank” has the meaning specified therefor in Schedule D-1 to
the Agreement (or such other bank that is located within the United States that
has been designated as such, in writing, by Borrower to Agent).
 
            “Designated Bailee” means (a) each Person set forth on Schedule B-1
to the Agreement and (b) each other Person consented to by Agent in writing in
Agent’s discretion.

            “Designated Altar Project Transaction” means the Investment by
Borrower of up to $25,000,000 per year in SCLLC or its Subsidiaries with respect
to the Altar Project.

            “Designated Marathon Project Transaction” means the Investment by
Borrower of up to $25,000,000 per year in SCI or its Subsidiaries with respect
to the Marathon Project.

            “Designated Transaction” means (a) any Restricted Payment, (b) any
prepayment of Permitted Indebtedness, (c) any Permitted Investment described in
clause (t) of the definition thereof, or (d) other than a Designated Altar
Project Transaction or a Designated Marathon Project Transaction, any other
event or series of events whereby funds or other property are transferred from a
Loan Party to a Subsidiary or other Affiliate of a Loan Party that is not a Loan
Party.

            “Dilution” means, as of any date of determination, a percentage,
based upon the experience of the immediately prior 12 months, that is the result
of dividing the Dollar amount of (a) bad debt write-downs, discounts,
advertising allowances, credits, or other dilutive items with respect to
Borrower's Accounts during such period, by (b) Borrower’s billings with respect
to Accounts during such period.
 
“Dilution Reserve” means, as of any date of determination, an amount sufficient
to reduce the advance rate against Eligible Accounts by 1 percentage point for
each percentage point by which Dilution is in excess of 5%.
 
“Disqualified Equity Interests” shall mean any Equity Interest that, by its
terms (or by the terms of any security or other Equity Interests into which it
is convertible or for which it is exchangeable), or upon the happening of any
event or condition (a) matures or is mandatorily redeemable (other than solely
for Qualified Equity Interests), pursuant to a sinking fund obligation or
otherwise (except as a result of a change of control or asset sale so long as
any rights of the holders thereof upon the occurrence of a change of control or
asset sale event shall be subject to the prior repayment in full of the Loans
and all other Obligations that are accrued and payable and the termination of
the Commitments), (b) is redeemable at the option of the holder thereof (other
than solely for Qualified Equity Interests), in whole or in part, (c) provides
for the scheduled payments of dividends in cash, or (d) is or becomes
convertible into or exchangeable for Indebtedness or any other Equity Interests
that would constitute Disqualified Equity Interests, in each case, prior to the
date that is 180 days after the Maturity Date.
 
“Disqualified Lender” shall mean the Persons identified in writing to Agent by
Borrower on or prior to the Closing Date, which list of Persons is consented to
in writing by Agent (such consent not to be unreasonably withheld or delayed).
 
“Dollars” or “$” means United States dollars.

 
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“Domestic Subsidiary” means any Subsidiary of Borrower organized under the laws
of any state of the United States or the District of Columbia.
 
“Earn-Outs” shall mean unsecured liabilities of a Loan Party arising under an
agreement to make any deferred payment as a part of the Purchase Price for a
Permitted Acquisition, including performance bonuses or consulting payments in
any related services, employment or similar agreement, in an amount that is
subject to or contingent upon the revenues, income, cash flow or profits (or the
like) of the underlying target.
 
“EBITDA” means, with respect to any fiscal period:
 
(a)  Loan Parties’ net earnings (or loss),
 
minus
 
 (b)  without duplication, the sum of the following amounts of Loan Parties for
such period to the extent included in determining net earnings (or loss) for
such period:
 
(i)    any extraordinary, unusual, or non-recurring gains,
 
(ii)    interest income,
 
(iii)    exchange, translation or performance gains relating to any hedging
transactions or foreign currency fluctuations, and
 
(iv)    income arising by reason of the application of FAS 141R,
 
plus
 
  (c)  without duplication, the sum of the following amounts of Loan Parties for
such period to the extent included in determining net earnings (or loss) for
such period:
 
(i)     any extraordinary, unusual, or non-recurring non-cash losses,
 
(ii)     Interest Expense,
 
(iii)     tax expense based on income, profits or capital, including federal,
foreign, state, franchise and similar taxes (and for the avoidance of doubt,
specifically excluding any sales taxes or any other taxes held in trust for a
Governmental Authority),
 
(iv)     depreciation, depletion and amortization for such period,
 
(v)     with respect to any Permitted Acquisition by any Loan Party after the
Closing Date, costs, fees, charges, or expenses consisting of out-of-pocket
expenses owed by Loan Parties to any Person for services performed by such
Person in connection with such Permitted Acquisition incurred within 180 days of
the consummation of such Permitted Acquisition, up to an aggregate amount (for
all such items in this clause (v)) for such Permitted Acquisition not to exceed
the greater of (1) $10,000,000 and (2) 3% of the Purchase Price of such
Permitted Acquisition,
 
(vi)     with respect to any Permitted Acquisitions by any Loan Party after the
Closing Date: (1) purchase accounting adjustments, including, without
limitation, a dollar for dollar adjustment for that portion of revenue that
would have been recorded in the relevant period had the
 

 
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balance of deferred revenue (unearned income) recorded on the closing balance
sheet and before application of purchase accounting not been adjusted downward
to fair value to be recorded on the opening balance sheet in accordance with
GAAP purchase accounting rules; and (2) non-cash adjustments in accordance with
GAAP purchase accounting rules under FASB Statement No. 141 and EITF Issue No.
01-3, in the event that such an adjustment is required by Borrower’s independent
auditors, in each case, as determined in accordance with GAAP,
 
(vii)     fees, costs, charges and expenses, in respect of Earn-Outs incurred in
connection with any Permitted Acquisition by any Loan Party to the extent
permitted to be incurred under the Agreement that are required by the
application of FAS 141R to be and are expensed by Loan Parties,
 
(viii)     non-cash compensation expense (including deferred non-cash
compensation expense), or other non-cash expenses or charges, arising from the
sale or issuance of Equity Interests, the granting of stock options, and the
granting of stock appreciation rights and similar arrangements (including any
repricing, amendment, modification, substitution, or change of any such Equity
Interests, stock option, stock appreciation rights, or similar arrangements)
minus the amount of any such expenses or charges when paid in cash to the extent
not deducted in the computation of net earnings (or loss),
 
(ix)     one time restructuring charges of up to $7,500,000 in any Reference
Period,
 
(x)     non-cash exchange, translation, or performance losses relating to any
hedging transactions or foreign currency fluctuations,
 
(xi)     non-cash losses on sales of fixed assets or write-downs of fixed or
intangible assets,
 
(xii)     any amortization of debt discount, premium and deferred financing
costs, including non-cash expense or loss associated with the early retirement
or extinguishment of debt,
 
(xiii)     non-cash loss on modification of debt, and
 
(xiv)     non-cash charges resulting from the application of purchase
accounting,
 
in each case, determined on a consolidated basis in accordance with GAAP.
 
For the purposes of calculating EBITDA for any period of 4 consecutive fiscal
quarters (each, a “Reference Period”), if at any time during such Reference
Period (and after the Closing Date), any Loan Party shall have made a Permitted
Acquisition, EBITDA for such Reference Period shall be calculated after giving
pro forma effect thereto (including pro forma adjustments arising out of events
which are directly attributable to such Permitted Acquisition, are factually
supportable, and are expected to have a continuing impact, in each case to be
mutually and reasonably agreed upon by Borrower and Agent or in such other
manner reasonably acceptable to Agent as if any such Permitted Acquisition or
adjustment occurred on the first day of such Reference Period.
 
 “Eligible Accounts” means those Accounts created by a Loan Party in the
ordinary course of its business, that arise out of Borrower’s sale of goods or
rendition of services, that comply with each of the representations and
warranties respecting Eligible Accounts made in the Loan Documents, and that are
not excluded as ineligible by virtue of one or more of the excluding criteria
set forth below; provided, that such criteria may be revised from time to time
by Agent in Agent’s Permitted Discretion to address the results of any field
examination performed by (or on behalf of) Agent from time to time after the
Closing
 

 
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Date.  In determining the amount to be included, Eligible Accounts shall be
calculated net of customer deposits, unapplied cash, discounts, credits,
allowances, and rebates.  Eligible Accounts shall not include the following:
 
(a)     Accounts that the Account Debtor has failed to pay within 90 days of
original invoice date, 60 days past due, or Accounts with selling terms of more
than 60 days,
 
(b)      Accounts owed by an Account Debtor (or its Affiliates) where 50% or
more of all Accounts owed by that Account Debtor (or its Affiliates) are deemed
ineligible under clause (a) above,
 
(c)      Accounts with respect to which the Account Debtor is an Affiliate of
Borrower or an employee or agent of Borrower or any Affiliate of Borrower,
 
(d)      Accounts arising in a transaction wherein goods are placed on
consignment or are sold pursuant to a guaranteed sale, a sale or return, a sale
on approval, a bill and hold, or any other terms by reason of which the payment
by the Account Debtor may be conditional; provided, that the foregoing shall not
include credit to a Loan Party’s account or pool account pursuant to the terms
of a Refining Agreement, in each case which is given with respect to platinum
group metals or any other precious metals of a Loan Party,
 
(e)      Accounts that are not payable in Dollars,
 
(f)      Accounts with respect to which the Account Debtor either (i) does not
maintain its chief executive office in the United States, or (ii) is not
organized under the laws of the United States or any state thereof, or (iii) is
the government of any foreign country or sovereign state, or of any state,
province, municipality, or other political subdivision thereof, or of any
department, agency, public corporation, or other instrumentality thereof, unless
(A) the Account is supported by an irrevocable letter of credit reasonably
satisfactory to Agent (as to form, substance, and issuer or domestic confirming
bank) that has been delivered to Agent and is directly drawable by Agent, or (B)
the Account is covered by credit insurance in form, substance, and amount, and
by an insurer, reasonably satisfactory to Agent,
 
(g)      Accounts with respect to which the Account Debtor is either (i) the
United States or any department, agency, or instrumentality of the United States
(exclusive, however, of Accounts with respect to which Borrower has complied, to
the reasonable satisfaction of Agent, with the Assignment of Claims Act, 31 USC
§3727), or (ii) any state of the United States,
 
(h)      Accounts with respect to which the Account Debtor is a creditor of
Borrower, has or has asserted a right of recoupment or setoff, or has disputed
its obligation to pay all or any portion of the Account, to the extent of such
claim, right of recoupment or setoff, or dispute,
 
(i)      Accounts with respect to an Account Debtor whose total obligations
owing to Borrower exceed 10% (such percentage, as applied to a particular
Account Debtor, being subject to reduction by Agent in its Permitted Discretion
if the creditworthiness of such Account Debtor deteriorates) of all Eligible
Accounts to the extent of the obligations owing by such Account Debtor in excess
of such percentage; provided, that, in each case, the amount of Eligible
Accounts that are excluded because they exceed the foregoing percentage shall be
determined by Agent based on all of the otherwise Eligible Accounts prior to
giving effect to any eliminations based upon the foregoing concentration limit;
provided further, that (i) so long as Borrower’s Excess Availability is greater
than $45,000,000, the foregoing percentage shall be (1) 15% in respect of
Umicore (or its Affiliates), and (2) 100% in respect of Ford Motor Company (or
its Affiliates), General Motors Company (or its Affiliates), BASF Corporation
(or its Affiliates), Mitsubishi International Corporation (or its Affiliates),
Auramet Trading LLC (or its
 

 
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Affiliates), and Mitsui & Co. (U.S.A.), Inc. (or its Affiliates), and (ii) that
so long as Borrower’s Excess Availability is less than or equal to $45,000,000,
the foregoing percentage shall be (1) 15% in respect of Umicore (or its
Affiliates), and (2) 50% in respect of Ford Motor Company (or its Affiliates),
General Motors Company (or its Affiliates), BASF Corporation (or its
Affiliates), Mitsubishi International Corporation (or its Affiliates), and
Mitsui & Co. (U.S.A.), Inc. (or its Affiliates),
 
(j)    Accounts with respect to which the Account Debtor is subject to an
Insolvency Proceeding, is not Solvent, has gone out of business, or as to which
Borrower has received notice of an imminent Insolvency Proceeding or a material
impairment of the financial condition of such Account Debtor,
 
(k)    Accounts, the collection of which, Agent, in its Permitted Discretion,
believes to be doubtful, including by reason of the Account Debtor’s financial
condition,
 
(l)     Accounts that are not subject to a valid and perfected first priority
Agent’s Lien,
 
(m)     Accounts with respect to which (i) the goods giving rise to such Account
have not been shipped and billed to the Account Debtor, or (ii) the services
giving rise to such Account have not been performed and billed to the Account
Debtor,
 
(n)     Accounts with respect to which the Account Debtor is a Sanctioned Person
or Sanctioned Entity,
 
(o)     Accounts that represent the right to receive progress payments or other
advance billings that are due prior to the completion of performance by Borrower
of the subject contract for goods or services, or
 
(p)     Accounts owned by a target acquired in connection with a Permitted
Acquisition, until the completion of an appraisal and field examination with
respect to such target, in each case, reasonably satisfactory to Agent (which
appraisal and field examination may be conducted prior to the closing of such
Permitted Acquisition).
 
“Eligible Inventory” means Inventory of a Loan Party consisting of palladium,
platinum, rhodium (solely from spent recycling material), spare parts, and other
consumable materials located in warehouses, that complies with each of the
representations and warranties respecting Eligible Inventory made in the Loan
Documents, and that is not excluded as ineligible by virtue of one or more of
the excluding criteria set forth below; provided, that such criteria may be
revised from time to time by Agent in Agent’s Permitted Discretion to address
the results of any field examination or appraisal performed by Agent from time
to time after the Closing Date.  In determining the amount to be so included,
Inventory shall be valued at the lower of cost or market on a basis consistent
with Borrower’s historical accounting practices.  An item of Inventory shall not
be included in Eligible Inventory if:
 
(a)     Borrower does not have good, valid, and marketable title thereto,
 
(b)     Borrower does not have actual and exclusive possession thereof (either
directly or through a bailee or agent of Borrower),
 
(c)     it is not located at one of the locations in the continental United
States set forth on Schedule 4.24 to the Agreement (or in-transit from one such
location to another such location),
 

 
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(d)     it is in-transit to or from a location of Borrower (other than
in-transit from one location set forth on Schedule 4.24 to the Agreement to
another location set forth on Schedule 4.24 to the Agreement),
 
(e)     it is located on real property leased by Borrower, in a contract
warehouse or at any other location which is not owned by Borrower, in each case,
unless it is subject to a Collateral Access Agreement or a Bailee Agreement
executed by the lessor, warehouseman or other owner of such location; provided
that Inventory located at a Johnson Matthey Location shall not be excluded from
Eligible Inventory pursuant to this clause (e) prior to January 16, 2012 (or
such later date as may be agreed to by Agent in writing in its sole discretion),
based solely on the failure of Borrower and Johnson Matthey Inc. to enter into a
Bailee Agreement with Agent; provided further, that anytime after January 16,
2012 (or such later date as may be agreed to by Agent in writing in its sole
discretion), the failure of Borrower and Johnson Matthey Inc. to enter into a
Bailee Agreement with Agent with respect to the Johnson Matthey Locations shall
cause all Inventory that at such time is maintained at one of the Johnson
Matthey Locations to be excluded from Eligible Inventory.
 
(f)     it is the subject of a bill of lading or other document of title,
 
(g)     it is not subject to a valid and perfected first priority Agent’s Lien,
 
(h)     it consists of goods returned or rejected by Borrower’s customers,
 
(i)     it consists of goods that are obsolete or slow moving, restrictive or
custom items, work-in-process concentrate, raw materials, reserves, unmined ore,
mined ore, or goods that constitute packaging and shipping materials, bill and
hold goods, defective goods, “seconds,” tolled Inventory, or Inventory acquired
on consignment,
 
(j)     it is subject to third party trademark, licensing or other proprietary
rights, unless Agent is satisfied that such Inventory can be freely sold by
Agent on and after the occurrence of an Event of Default despite such third
party rights, or
 
(k)     it was acquired in connection with a Permitted Acquisition, until the
completion of an appraisal and field examination of such Inventory, in each
case, reasonably satisfactory to Agent (which appraisal and field examination
may be conducted prior to the closing of such Permitted Acquisition).
 
“Environmental Action” means any written complaint, summons, citation, notice,
directive, order, claim, litigation, investigation, judicial or administrative
proceeding, judgment, letter, or other written communication from any
Governmental Authority, or any third party involving violations of Environmental
Laws or releases of Hazardous Materials (a) from any assets, properties, or
businesses of any Borrower, any Subsidiary of a Borrower, or any of their
predecessors in interest, (b) from adjoining properties or businesses, or (c)
from or onto any facilities which received Hazardous Materials generated by any
Borrower, any Subsidiary of a Borrower, or any of their predecessors in
interest.
 
“Environmental Law” means any applicable federal, state, provincial, foreign or
local statute, law, rule, regulation, ordinance, code, binding and enforceable
guideline, binding and enforceable written policy, or rule of common law now or
hereafter in effect and in each case as amended, or any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, in each case, to the extent binding on
Borrower or its Subsidiaries, relating to the environment, the effect of the
environment on employee health, or Hazardous Materials, in each case as amended
from time to time.
 

 
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“Environmental Liabilities” means all liabilities, monetary obligations, losses,
damages, costs and expenses (including all reasonable fees, disbursements and
expenses of counsel, experts, or consultants, and costs of investigation and
feasibility studies), fines, penalties, sanctions, and interest incurred as a
result of any claim or demand, or Remedial Action required, by any Governmental
Authority or any third party, and which relate to any Environmental Action.
 
“Environmental Lien” means any Lien in favor of any Governmental Authority for
Environmental Liabilities.
 
“Equipment” means equipment (as that term is defined in the Code).
 
“Equity Interest” means, with respect to a Person, all of the shares, options,
warrants, interests, participations, or other equivalents (regardless of how
designated) of or in such Person, whether voting or nonvoting, including capital
stock (or other ownership or profit interests or units), preferred stock, or any
other “equity security” (as such term is defined in Rule 3a11-1 of the General
Rules and Regulations promulgated by the SEC under the Exchange Act).
 
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and any successor statute thereto.
 
“ERISA Affiliate” means (a) any Person subject to ERISA whose employees are
treated as employed by the same employer as the employees of Borrower or its
Subsidiaries under IRC Section 414(b), (b) any trade or business subject to
ERISA whose employees are treated as employed by the same employer as the
employees of Borrower or its Subsidiaries under IRC Section 414(c), (c) solely
for purposes of Section 302 of ERISA and Section 412 of the IRC, any
organization subject to ERISA that is a member of an affiliated service group of
which Borrower or any of its Subsidiaries is a member under IRC Section 414(m),
or (d) solely for purposes of Section 302 of ERISA and Section 412 of the IRC,
any Person subject to ERISA that is a party to an arrangement with Borrower or
any of its Subsidiaries and whose employees are aggregated with the employees of
Borrower or its Subsidiaries under IRC Section 414(o).
 
“Event of Default” has the meaning specified therefor in Section 8 of the
Agreement.
 
“Excess” has the meaning specified therefor in Section 2.14(b)(iv) of the
Agreement.
 
“Excess Availability” means, as of any date of determination, the amount equal
to Availability minus the aggregate amount, if any, of all trade payables of the
Loan Parties that are more than 90 days past due except to the extent being
disputed in good faith.
 
“Exchange Act” means the Securities Exchange Act of 1934, as in effect from time
to time.
 
“Excluded Collateral” has the meaning specified therefor in the Guaranty and
Security Agreement.
 
“Excluded Taxes” means, with respect to a Lender or any other recipient of any
payment to be made under or on account of the Indebtedness, (i) any Tax imposed
on (or measured by) its net income or net profits (including any branch profits
taxes) or a Tax imposed on the total asset value or total overall financial
leverage, in each case imposed by the United States, or by the jurisdiction (or
by any political subdivision or taxing authority thereof) in which such
recipient is organized, in which its principal office (or, in the case of a
Lender, its applicable lending office) is located or in which it or its
principal office (or, in the case of a Lender, its applicable lending office) is
otherwise doing business in each case as a
 

 
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result of a present or former connection between such recipient and the
jurisdiction or taxing authority imposing the tax (other than any such
connection arising solely from such recipient having executed, delivered or
performed its obligations or received payment under, or enforced its rights or
remedies under the Agreement or any other Loan Document); (ii) Taxes resulting
from a recipient's failure to comply with the requirements of Section 16.2 of
the Agreement, (iii) any United States federal withholding taxes that would be
imposed on amounts payable to a Foreign Lender based upon the applicable
withholding rate in effect at the time such Foreign Lender becomes a party to
the Agreement (or designates a new lending office), and (v) any United States
federal withholding Tax imposed as a result of the failure by such recipient,
any other legal or beneficial holder or any foreign financial institution
through which payments on the Indebtedness are made, to satisfy the applicable
reporting requirements set forth in FATCA, except that Taxes shall include (A)
any amount that such Foreign Lender (or its assignor, if any) was previously
entitled to receive pursuant to Section 16.1 of the Agreement, if any, with
respect to such withholding tax at the time such Foreign Lender becomes a party
to the Agreement (or designates a new lending office), and (B) additional United
States federal withholding taxes that may be imposed after the time such Foreign
Lender becomes a party to the Agreement (or designates a new lending office), as
a result of a change in law, rule, regulation, order or other decision with
respect to any of the foregoing by any Governmental Authority.
 
“Extraordinary Advance” has the meaning specified therefor in Section
2.3(d)(iii) of the Agreement.
 
“FATCA” means Sections 1471 through 1474 of the IRC (as currently enacted) or
any similar amended or successor version thereof and any regulations promulgated
thereunder or administrative interpretations thereof.
 
“Fee Letter” means that certain fee letter, dated as of even date with the
Agreement, between Borrower and Agent, in form and substance reasonably
satisfactory to Agent.
 
“Federal Funds Rate” means, for any period, a fluctuating interest rate per
annum equal to, for each day during such period, the weighted average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of the
quotations for such day on such transactions received by Agent from three
federal funds brokers of recognized standing selected by it.
 
“Financial Covenant Trigger Period” means a period which shall commence on any
date on which (a) an Event of Default has occurred and is continuing or (b)
Excess Availability is less than the Threshold Amount at any time and shall
continue until the date when both:
 
(a) no Event of Default is continuing, and
 
(b) Borrower’s Excess Availability is greater than or equal to the Threshold
Amount for a period of 30 consecutive days.
 
“Fixed Charges” means, with respect to any fiscal period and with respect to the
Loan Parties determined in accordance with GAAP, the sum, without duplication,
of (a) Interest Expense accrued net of interest income and other cash offsets to
Interest Expense) (other than interest paid-in-kind, amortization of financing
fees, and other non-cash Interest Expense) during such period, (b) scheduled
principal payments in respect of Indebtedness that are required to be paid
during such period, (c) all federal, state, and local income taxes accrued
during such period, (d) (i) solely for the purposes of determining compliance
with the Payment Conditions, the amount of all payments made in respect of any
 

 
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Designated Transaction, (ii) solely for the purposes of determining compliance
with the Altar Project Payment Conditions, the amount of all payments made in
respect of any Designated Altar Project Transaction, and (iii) solely for the
purposes of determining compliance with the Marathon Project Payment Conditions,
the amount of all payments made in respect of any Designated Marathon Project
Transaction, in each case, whether in cash or other property, other than common
Equity Interest, during such period, (e) solely for the purposes of determining
compliance with clause (c) of the definition of “Permitted Acquisition”, the
amount of all payments made in respect of any Permitted Acquisition (whether in
cash or other property, other than common Equity Interest) during such period,
(f) solely for the purposes of determining compliance with clause (d)(ii) of the
definition of “Permitted Intercompany Advances”, the amount of all loans made by
a Loan Party to a Non-Loan Party, and (g) any payments made by a Loan Party in
respect of a completion undertaking described in clause (C) of the definition of
Non-Recourse Indebtedness.
 
“Fixed Charge Coverage Ratio” means, with respect to the Loan Parties for any
period, the ratio of (a) EBITDA for such period minus Capital Expenditures made
(to the extent not already incurred in a prior period) or incurred during such
period, to (b) Fixed Charges for such period.
 
“Foreign Lender” means any Lender or Participant that is not a United States
person within the meaning of IRC section 7701(a)(30).
 
“Foreign Subsidiary” means any Subsidiary of Borrower that is not organized
under the laws of any state of the United States or the District of Columbia.
 
“Funding Date” means the date on which a Borrowing occurs.
 
“Funding Losses” has the meaning specified therefor in Section 2.12(b)(ii) of
the Agreement.
 
“GAAP” means generally accepted accounting principles as in effect from time to
time in the United States, consistently applied.
 
“Governing Documents” means, with respect to any Person, the certificate or
articles of incorporation, by-laws, or other organizational documents of such
Person.
 
“Governmental Authority” means any federal, state, local, or other governmental
or administrative body, instrumentality, board, department, or agency or any
court, tribunal, administrative hearing body, arbitration panel, commission, or
other similar dispute-resolving panel or body.
 
“Guarantor” means (a) Stillwater Metals Company Inc., a Montana corporation, and
(b) each other Person that becomes a guarantor after the Closing Date pursuant
to Section 5.11 of the Agreement.
 
“Guaranty and Security Agreement” means that certain guaranty and security
agreement, dated as of even date with the Agreement, in form and substance
reasonably satisfactory to Agent, executed and delivered by Borrower and each of
the Guarantors to Agent.
 
“Hazardous Materials” means (a) substances that are defined or listed in, or
otherwise classified pursuant to, any applicable laws or regulations as
“hazardous substances,” “hazardous materials,” “hazardous wastes,” “toxic
substances,” or any other formulation intended to define, list, or classify
substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, reproductive toxicity, or “EP
toxicity”, (b) oil, petroleum, or petroleum derived substances, natural gas,
natural gas liquids, synthetic gas, drilling fluids, produced waters, and other
wastes associated with the exploration, development, or production of crude oil,
natural gas, or geothermal resources, (c) any
 

 
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flammable substances or explosives or any radioactive materials, and (d)
asbestos in any form or electrical equipment that contains any oil or dielectric
fluid containing levels of polychlorinated biphenyls in excess of 50 parts per
million.
 
“Hedge Agreement” means a “swap agreement” as that term is defined in Section
101(53B)(A) of the Bankruptcy Code.
 
“Hedge Obligations” means any and all obligations or liabilities, whether
absolute or contingent, due or to become due, now existing or hereafter arising,
of Borrower or its Subsidiaries arising under, owing pursuant to, or existing in
respect of Hedge Agreements entered into with one or more of the Hedge
Providers.
 
“Hedge Provider” means any Lender or any of its Affiliates; provided, that no
such Person (other than Wells Fargo or its Affiliates) shall constitute a Hedge
Provider unless and until Agent shall have received a Bank Product Provider
Agreement from such Person and with respect to the applicable Hedge Agreement
within 10 days after the execution and delivery of such Hedge Agreement with
Borrower or its Subsidiaries; provided further, that if, at any time, a Lender
ceases to be a Lender under the Agreement, then, from and after the date on
which it ceases to be a Lender thereunder, neither it nor any of its Affiliates
shall constitute Hedge Providers and the obligations with respect to Hedge
Agreements entered into with such former Lender or any of its Affiliates shall
no longer constitute Hedge Obligations.
 
“Holdco” means SCLLC.
 
“Immaterial Subsidiary” means a direct or indirect Subsidiary of Borrower with
respect to which each of the following is satisfied: (a) the aggregate net sales
of such Subsidiary are less than $5,000,000 for the period of 12 months most
recently ended prior to such Subsidiary being designated an Immaterial
Subsidiary, (b) the book value of the tangible assets of such Subsidiary is less
than $5,000,000, (c) after giving pro forma effect to the designation of such
Subsidiary as an Immaterial Subsidiary, (i) the aggregate net sales of all
Subsidiaries of Borrower that are not Guarantors for the 12 months most recently
ended prior to such designation do not exceed $10,000,000 and (ii) the aggregate
book value of the tangible assets of all Subsidiaries of Borrower that are not
Guarantors does not exceed $10,000,000, (d) Borrower has designated such
Subsidiary as an Immaterial Subsidiary under the Agreement and Borrower has
provided written notice to Agent in reasonable detail of such designation within
5 days prior to designation thereof, (e) such Subsidiary does not own any Equity
Interest or hold any Lien on any property of a Loan Party and (f) such
Subsidiary has never been a Loan Party after being an Immaterial Subsidiary.  It
being acknowledged and agreed that, as of the Closing Date, the only entity
designated as meeting the criteria set forth above is Palladium Alliance
International Inc., a Delaware corporation.
 
“Increase” has the meaning specified therefor in Section 2.14(a).
 
“Increase Date” has the meaning specified therefor in Section 2.14(b)(iv).
 
“Increase Joinder” has the meaning specified therefor in Section 2.14(b)(i).
 
“Indebtedness” as to any Person means (a) all obligations of such Person for
borrowed money, (b) all obligations of such Person evidenced by bonds,
debentures, notes, or other similar instruments and all reimbursement or other
obligations in respect of letters of credit, bankers acceptances, or other
financial products, (c) all obligations of such Person as a lessee under Capital
Leases, (d) all obligations or liabilities of others secured by a Lien on any
asset of such Person, irrespective of whether such obligation or liability is
assumed, (e) all obligations of such Person to pay the deferred purchase price
of assets (other than trade payables incurred in the ordinary course of business
and repayable in accordance with

 
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customary trade practices and, for the avoidance of doubt, other than royalty
payments payable in the ordinary course of business in respect of non-exclusive
licenses), (f) all monetary obligations of such Person owing under Hedge
Agreements (which amount shall be calculated based on the amount that would be
payable by such Person if the Hedge Agreement were terminated on the date of
determination), (g) any Disqualified Equity Interests of such Person, and (h)
any obligation of such Person guaranteeing or intended to guarantee (whether
directly or indirectly guaranteed, endorsed, co-made, discounted, or sold with
recourse) any obligation of any other Person that constitutes Indebtedness under
any of clauses (a) through (g) above.  For purposes of this definition, (i) the
amount of any Indebtedness represented by a guaranty or other similar instrument
shall be the lesser of the principal amount of the obligations guaranteed and
still outstanding and the maximum amount for which the guaranteeing Person may
be liable pursuant to the terms of the instrument embodying such Indebtedness,
and (ii) the amount of any Indebtedness which is limited or is non-recourse to a
Person or for which recourse is limited to an identified asset shall be valued
at the lesser of (A) if applicable, the limited amount of such obligations, and
(B) if applicable, the fair market value of such assets securing such
obligation.
 
“Indemnified Liabilities” has the meaning specified therefor in Section 10.3 of
the Agreement.
 
“Indemnified Person” has the meaning specified therefor in Section 10.3 of the
Agreement.
 
“Indemnified Taxes” means, any Taxes other than Excluded Taxes.
 
“Indenture” means that certain Indenture, dated as of March 12, 2008, governing
the 1.875% convertible senior notes due 2028, by and among Borrower, as Issuer,
Law Debenture Trust Company of New York, as Trustee, and Deutsche Bank Trust
Company Americas, as Registrar, Conversion Agent and Paying Agent.
 
“Insolvency Proceeding” means any proceeding commenced by or against any Person
under any provision of the Bankruptcy Code or under any other state or federal
bankruptcy or insolvency law, assignments for the benefit of creditors, formal
or informal moratoria, compositions, extensions generally with creditors, or
proceedings seeking reorganization, arrangement, or other similar relief.
 
“Intercompany Subordination Agreement” means that certain intercompany
subordination agreement, dated as of even date with the Agreement, executed and
delivered by Borrower, each of its Subsidiaries, and Agent, the form and
substance of which is reasonably satisfactory to Agent.
 
“Interest Expense” means, for any period, the aggregate of the interest expense
of Loan Parties for such period, determined on a consolidated basis in
accordance with GAAP.
 
“Interest Period” means, with respect to each LIBOR Rate Loan, a period
commencing on the date of the making of such LIBOR Rate Loan (or the
continuation of a LIBOR Rate Loan or the conversion of a Base Rate Loan to a
LIBOR Rate Loan) and ending 1, 2, or 3 months thereafter, and 6 or 12 months
thereafter, if available to, and consented to by, each Lender; provided, that
(a) interest shall accrue at the applicable rate based upon the LIBOR Rate from
and including the first day of each Interest Period to, but excluding, the day
on which any Interest Period expires, (b) any Interest Period that would end on
a day that is not a Business Day shall be extended to the next succeeding
Business Day unless such Business Day falls in another calendar month, in which
case such Interest Period shall end on the next preceding Business Day, (c) with
respect to an Interest Period that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period), the Interest Period shall
end on the last Business Day of the calendar month that is 1, 2, or 3 months
after (or 6 or 12 months after, if available to, and consented by, each
 

 
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Lender) the date on which the Interest Period began, as applicable, and (d)
Borrower may not elect an Interest Period which will end after the Maturity
Date.
 
“Inventory” means inventory (as that term is defined in the Code).
 
“Inventory Reserves” means, as of any date of determination, (a) Landlord
Reserves, and (b) those reserves that Agent deems necessary or appropriate, in
its Permitted Discretion and subject to Section 2.1(c), to establish and
maintain (including reserves for slow moving Inventory and Inventory shrinkage)
with respect to Eligible Inventory or the Maximum Revolver Amount, including
reserves with respect to (i) sums that Borrower or its Subsidiaries are required
to pay under any Section of the Agreement or any other Loan Document (such as
taxes, assessments, insurance premiums, or, in the case of leased assets, rents
or other amounts payable under such leases) and has failed to pay, (ii) amounts
owing by Borrower or its Subsidiaries to any Person to the extent secured by a
Lien on, or any trust over, any of the Collateral (other than a Permitted Lien),
which Lien or trust, in the Permitted Discretion of Agent likely would have a
priority superior to the Agent’s Liens (such as Liens in favor of landlords,
warehousemen, carriers, mechanics, materialmen, laborers, or suppliers, or Liens
for ad valorem, excise, sales, or other taxes where given priority under
applicable law) in and to such item of the Collateral), (iii) taxes and tax
assessments, (iv) mark-to-market rights with respect to changes in the value of
Inventory based on changes in price, and (v) royalty payments on account of
Borrower’s obligations to the applicable owner of the applicable mineral
reserves.
 
“Investment” means, with respect to any Person, any investment by such Person in
any other Person (including Affiliates) in the form of loans, guarantees,
advances, capital contributions (excluding (a) commission, travel, moving
expenses, and other similar advances, including as part of a recruitment or
retention plan, to officers and employees of such Person made in the ordinary
course of business, and (b) bona fide accounts receivable arising in the
ordinary course of business), or acquisitions of Indebtedness, Equity Interests,
or all or substantially all of the assets of such other Person (or of any
division or business line of such other Person), and any other items that are or
would be classified as investments on a balance sheet prepared in accordance
with GAAP.  The amount of any Investment shall be the original cost of such
Investment plus the cost of all additions thereto, without any adjustment for
increases or decreases in value, or write-ups, write-downs, or write-offs with
respect to such Investment.
 
“Investment Guidelines” means the document setting forth the Borrower’s
investment guidelines which have been approved by the Board of Directors of the
Borrower as of July 26, 2010, which has been provided to Agent on or before the
Closing Date.
 
“IRC” means the Internal Revenue Code of 1986, as amended from time to time and
any successor statute thereof.
 
“ISP” means, with respect to any Letter of Credit, the “International Standby
Practices 1998” published by the Institute of International Banking Law &
Practice (or such later version thereof as may be in effect at the time of
issuance).
 
“Issuer Document” means, with respect to any Letter of Credit, a letter of
credit application, a letter of credit agreement, or any other document,
agreement or instrument entered into (or to be entered into) by Borrower in
favor of Issuing Lender or Underlying Issuer and relating to such Letter of
Credit.
 
“Issuing Lender” means WFCF or any other Lender that, at the request of Borrower
and with the consent of Agent, agrees, in such Lender’s sole discretion, to
become an Issuing Lender for the purpose of issuing Letters of Credit or
Reimbursement Undertakings pursuant to Section 2.11 of the Agreement and Issuing
Lender shall be a Lender.
 

 
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“Johnson Matthey Location” means the premises owned or operated by the Chemical
Catalyst and Refining Division of Johnson Matthey Inc., a Pennsylvania
corporation, which are located at 2001 Nolte Drive, West Deptford, NJ 08066 and
1401 King Road, West Chester, Pennsylvania  19380.
 
“Landlord Reserve” means, as to each location at which Borrower has Inventory or
books and records located and as to which a Collateral Access Agreement or a
Bailee Agreement, as applicable, has not been received by Agent, a reserve in an
amount equal to (a) in the case of a leased premises, the greater of (i) the
number of months rent for which the landlord will have, under applicable law, a
Lien in the Inventory of Borrower to secure the payment of rent or other amounts
under the lease relative to such location, or (ii) 3 months rent under the lease
relative to such location, or (b) in the case of a premises owned or operated by
a bailee, warehouseman, Refiner, or other similar party, the amount of fees or
other compensation that was be payable by the Loan Parties to such Refiner
during the preceding three months.
 
“Lead Arranger” has the meaning set forth in the preamble to the Agreement.
 
“Lender” has the meaning set forth in the preamble to the Agreement, shall
include Issuing Lender and the Swing Lender, and shall also include any other
Person made a party to the Agreement pursuant to the provisions of Section 13.1
of the Agreement and “Lenders” means each of the Lenders or any one or more of
them.
 
“Lender Group” means each of the Lenders (including Issuing Lender and the Swing
Lender) and Agent, or any one or more of them.
 
“Lender Group Expenses” means all (a) costs or expenses (including taxes and
insurance premiums) required to be paid by Borrower or its Subsidiaries under
any of the Loan Documents that are paid, advanced, or incurred by the Lender
Group, (b) documented out-of-pocket fees or charges paid or incurred by Agent in
connection with the Lender Group’s transactions with Borrower or its
Subsidiaries under any of the Loan Documents, including, fees or charges for
background checks, OFAC/PEP searches, photocopying, notarization, couriers and
messengers, telecommunication, public record searches, filing fees, recording
fees, publication, appraisal (including periodic collateral appraisals or
business valuations to the extent of the fees and charges (and up to the amount
of any limitation) contained in the Agreement or the Fee Letter), real estate
surveys, real estate title policies and endorsements, and environmental audits,
(c) Agent's customary fees and charges (as adjusted from time to time) with
respect to the disbursement of funds (or the receipt of funds) to or for the
account of Borrower (whether by wire transfer or otherwise), together with any
out-of-pocket costs and expenses incurred in connection therewith, (d) customary
charges imposed or incurred by Agent resulting from the dishonor of checks
payable by or to any Loan Party, (e) reasonable documented out-of-pocket costs
and expenses paid or incurred by the Lender Group to correct any default or
enforce any provision of the Loan Documents, or during the continuance of an
Event of Default, in gaining possession of, maintaining, handling, preserving,
storing, shipping, selling, preparing for sale, or advertising to sell the
Collateral, or any portion thereof, irrespective of whether a sale is
consummated, (f) field examination, appraisal, and valuation fees and expenses
of Agent related to any field examinations, appraisals, or valuation to the
extent of the fees and charges (and up to the amount of any limitation) provided
in Section 2.10 of the Agreement, (g) Agent’s reasonable costs and expenses
(including reasonable documented attorneys fees and expenses) relative to third
party claims or any other lawsuit or adverse proceeding paid or incurred by the
Lender Group whether in enforcing or defending the Loan Documents or otherwise
in connection with the transactions contemplated by the Loan Documents, Agent’s
Liens in and to the Collateral, or the Lender Group’s relationship with Borrower
or any of its Subsidiaries, (h) Agent’s reasonable documented costs and expenses
(including reasonable documented attorneys fees and due diligence expenses)
incurred in advising, structuring, drafting, reviewing, administering (including
travel, meals, and lodging),
 

 
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syndicating (including reasonable costs and expenses relative to CUSIP,
DXSyndicate™, SyndTrak or other communication costs incurred in connection with
a syndication of the loan facilities), or amending, waiving, or modifying the
Loan Documents, (i) Agent’s and each Lender’s reasonable documented costs and
expenses (including reasonable documented attorneys, accountants, consultants,
and other advisors fees and expenses) incurred in terminating, enforcing
(including attorneys, accountants, consultants, and other advisors fees and
expenses incurred in connection with a “workout,” a “restructuring,” or an
Insolvency Proceeding concerning Borrower or any of its Subsidiaries or in
exercising rights or remedies under the Loan Documents), or defending the Loan
Documents, irrespective of whether a lawsuit or other adverse proceeding is
brought, or in taking any enforcement action or any Remedial Action with respect
to the Collateral, and (j) the fees, charges, commissions and costs provided for
in Section 2.11(j) of the Agreement (including any fronting fees) and all other
fees, charges, commissions, costs and expenses for amendments, renewals,
extensions, transfers, or drawings from time to time incurred or charged by the
Underlying Issuer or by Issuing Lender in respect of Letters of Credit and
out-of-pocket fees, costs, and expenses incurred or charged by the Underlying
Issuer or Issuing Lender in connection with the issuance, amendment, renewal,
extension, or transfer of, or drawing under, any Letter of Credit or any demand
for payment thereunder.
 
“Lender Group Representatives” has the meaning specified therefor in Section
17.9(a) of the Agreement.
 
“Lender-Related Person” means, with respect to any Lender, such Lender, together
with such Lender’s Affiliates, officers, directors, employees, attorneys, and
agents.
 
“Letter of Credit” means a letter of credit (as that term is defined in the
Code) issued by Issuing Lender or a letter of credit (as that term is defined in
the Code) issued by Underlying Issuer, as the context requires.
 
“Letter of Credit Collateralization” means either (a) providing cash collateral
(pursuant to documentation reasonably satisfactory to Agent, including
provisions that specify that the Letter of Credit Fees and all fees, charges and
commissions provided for in Section 2.11(j) of the Agreement (including any
fronting fees) will continue to accrue while the Letters of Credit are
outstanding) to be held by Agent for the benefit of the Lenders in an amount
equal to 103% of the then existing Letter of Credit Usage, (b) delivering to
Agent documentation executed by all beneficiaries under the Letters of Credit,
in form and substance reasonably satisfactory to Agent and Issuing Lender,
terminating all of such beneficiaries’ rights under the Letters of Credit, or
(c) providing Agent with a standby letter of credit, in form and substance
reasonably satisfactory to Agent, from a commercial bank acceptable to Agent (in
its sole discretion) in an amount equal to 103% of the then existing Letter of
Credit Usage (it being understood that the Letter of Credit Fee and all fronting
fees set forth in the Agreement will continue to accrue while the Letters of
Credit are outstanding and that any such fees that accrue must be an amount that
can be drawn under any such standby letter of credit).
 
“Letter of Credit Disbursement” means a payment made by Issuing Lender or
Underlying Issuer pursuant to a Letter of Credit.
 
“Letter of Credit Exposure” means, as of any date of determination with respect
to any Lender, such Lender’s Pro Rata Share of the Letter of Credit Usage on
such date.
 
“Letter of Credit Fee” has the meaning specified therefor in Section 2.6(b) of
the Agreement.
 
“Letter of Credit Usage” means, as of any date of determination, the aggregate
undrawn amount of all outstanding Letters of Credit.
 

 
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“LIBOR Deadline” has the meaning specified therefor in Section 2.12(b)(i) of the
Agreement.
 
“LIBOR Notice” means a written notice in the form of Exhibit L-1.
 
“LIBOR Option” has the meaning specified therefor in Section 2.12(a) of the
Agreement.
 
“LIBOR Rate” means the greater of the rate per annum rate appearing on
Macro*World’s (www.mworld.com; the “Service”) Page BBA LIBOR - USD (or on any
successor or substitute page of such Service, or any successor to or substitute
for such Service) 2 Business Days prior to the commencement of the requested
Interest Period, for a term, and in an amount, comparable to the Interest Period
and the amount of the LIBOR Rate Loan requested (whether as an initial LIBOR
Rate Loan or as a continuation of a LIBOR Rate Loan or as a conversion of a Base
Rate Loan to a LIBOR Rate Loan) by Borrower in accordance with the Agreement
(and, if any such rate is below zero, the LIBOR Rate shall be deemed to be
zero), which determination shall be made by Agent and shall be conclusive in the
absence of manifest error.
 
“LIBOR Rate Loan” means each portion of a Revolving Loan that bears interest at
a rate determined by reference to the LIBOR Rate.
 
“LIBOR Rate Margin” has the meaning set forth in the definition of Applicable
Margin.
 
“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment,
charge, deposit arrangement, encumbrance, easement, lien (statutory or other),
security interest, or other security arrangement and any other preference,
priority, or preferential arrangement of any kind or nature whatsoever,
including any conditional sale contract or other title retention agreement, the
interest of a lessor under a Capital Lease and any synthetic or other financing
lease having substantially the same economic effect as any of the foregoing.
 
“Loan” shall mean any Revolving Loan, Swing Loan, or Extraordinary Advance made
(or to be made) hereunder.
 
“Loan Account” has the meaning specified therefor in Section 2.9 of the
Agreement.
 
“Loan Documents” means the Agreement, the Control Agreements, any Borrowing Base
Certificate, the Fee Letter, the Guaranty and Security Agreement, the
Intercompany Subordination Agreement, any Issuer Documents, the Letters of
Credit, the Syndication Letter, any note or notes executed by Borrower in
connection with the Agreement and payable to any member of the Lender Group, and
any other instrument or agreement entered into, now or in the future, by
Borrower or any of its Subsidiaries and any member of the Lender Group in
connection with the Agreement.
 
“Loan Party” means Borrower or any Guarantor.
 
“Marathon Project” means the development of the mine formerly owned by Marathon
PGM Corporation located in Ontario near the north shore of Lake Superior.
 
“Marathon Project Payment Conditions” means, with respect to any Designated
Marathon Project Transaction, each of the following conditions:
 

 
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(a) no Default or Event of Default has occurred and is continuing or would
immediately result from the consummation of the Designated Marathon Project
Transaction,
 
(b) Borrower and its Subsidiaries shall be in compliance with Section 7 of the
Agreement (calculated as if a Financial Covenant Trigger Period is then in
effect), on a pro forma basis after giving effect to such Designated Marathon
Project Transaction and the payment of all amounts (including fees and expenses)
owing in connection therewith,
 
(c) Borrower has Excess Availability on the date of such Designated Marathon
Project Transaction, and after giving effect thereto, that is greater than
$35,000,000, and
 
(d)  (i) Borrower directly or indirectly owns more than 50% of the Equity
Interests of each of SCI and each of its now owned and hereinafter acquired
Subsidiaries and (ii) neither SCI nor any of its now or hereinafter acquired
Subsidiaries shall have sold or otherwise disposed of more than 50% by value of
their now owned and hereinafter acquired assets.
 
“Margin Stock” as defined in Regulation U of the Board of Governors as in effect
from time to time.
 
“Material Adverse Effect” means (a) a material adverse effect in the business,
operations, results of operations, assets, liabilities or financial condition of
the Loan Parties, taken as a whole, (b) a material impairment of the Loan
Parties’ ability to perform their obligations under the Loan Documents to which
they are parties or of the Lender Group’s ability to enforce the Obligations or
realize upon the Collateral (other than as a result of as a result of an action
taken or not taken that is solely in the control of Agent), or (c) a material
impairment of the enforceability or priority of Agent’s Liens with respect to
all or a material portion of the Collateral as a result of an action or failure
to act on the part of the Loan Parties.
 
“Material Contract” means (a) each Refining Agreement, (b) each palladium or
platinum, as applicable, supply agreement in effect as of the Closing Date
with General Motors LLC, Tiffany and Company, Ford Motor Company, BASF
Corporation and Johnson Matthey Inc., and (c) to the extent not included in the
foregoing clause (b), each contract or agreement to which such Person or any of
its Subsidiaries is a party involving aggregate consideration payable to or by
such Person or such Subsidiary during any three month period that is equal to at
least 10% of the aggregate revenues of Borrower and its Subsidiaries over such 3
month period (other than purchase orders in the ordinary course of the business
of such Person or such Subsidiary and other than contracts that by their terms
may be terminated by such Person or Subsidiary in the ordinary course of its
business upon less than 60 days notice without penalty or premium).
 
“Maturity Date” means December 23, 2016.
 
“Maximum Revolver Amount” means $100,000,000, increased by the amount of
Increases made in accordance with Section 2.14 of the Agreement.
 
“Mining Permit” means any permit or authorization issued or granted by any
local, state, or federal government body or agency with respect to Borrower and
its Subsidiaries mining, reclamation, and other operational purposes.
 
“MSHA” means the Federal Mine Safety & Health Act of 1977, Public Law 91-1733,
as amended by Public Law 95-165.
 

 
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“Moody’s” has the meaning specified therefor in the definition of Cash
Equivalents.
 
“Net Recovery Percentage” means, as of any date of determination, the percentage
of the book value of Borrower’s Inventory by Classification that is estimated to
be recoverable in an orderly liquidation of such Inventory net of all associated
costs and expenses of such liquidation, such percentage to be as specified in
the most recent appraisal received by Agent from an appraisal company selected
by Agent.
 
“Non-Consenting Lender” has the meaning specified therefor in Section 14.2(a) of
the Agreement.
 
“Non-Defaulting Lender” means each Lender other than a Defaulting Lender.
 
“Non-Loan Party” means any Subsidiary of Borrower that is not a Loan Party.
 
“Non-Recourse Indebtedness” means Indebtedness  (a) in respect of which no Loan
Party (i) is directly or indirectly obligated to pay, (ii) provides any
undertaking, agreement or instrument that would constitute Indebtedness or (iii)
is directly or indirectly liable as a guarantor or otherwise; and (b) in respect
of which the holders thereof have agreed in writing that they shall have no
recourse against the Collateral or the property of any Loan Party; provided
that, the foregoing restrictions shall not prohibit (A) a Loan Party from
pledging its Equity Interests in a Non-Recourse Subsidiary to secure any such
Indebtedness so long as any recourse in respect of such pledge is contractually
limited solely to such Equity Interests and the assets of such Non-Recourse
Subsidiary, (B) a Loan Party from entering into an equity contribution agreement
pursuant to which such Loan Party is bound to make cash equity contributions to
such Non-Recourse Subsidiary so long as each such equity contribution, both at
the time such equity contribution agreement is entered into and at the such
equity contribution is made, constitutes a Permitted Investment, and (C) a
customary completion undertaking (including guarantees of the obligations of the
engineering, procurement and construction contractor in respect of any project
being built by or for such Non-Recourse Subsidiary) so long as (i) no such
undertaking is a direct guarantee of the repayment of such Indebtedness and (ii)
such undertaking is reasonably acceptable to Agent.
 
“Non-Recourse Subsidiary” means a Subsidiary of the Borrower or any other Loan
Party that is a Non-Loan Party and has been designated by the Borrower as a
Non-Recourse Subsidiary.
 
“Notes” means those certain 1.875% convertible senior notes due 2028 which are
issued pursuant to the Indenture.
 
“Obligations” means (a) all loans (including the Revolving Loans (inclusive of
Extraordinary Advances and Swing Loans)), debts, principal, interest (including
any interest that accrues after the commencement of an Insolvency Proceeding,
regardless of whether allowed or allowable in whole or in part as a claim in any
such Insolvency Proceeding), reimbursement or indemnification obligations with
respect to Reimbursement Undertakings or with respect to Letters of Credit
(irrespective of whether contingent), premiums, liabilities (including all
amounts charged to the Loan Account pursuant to the Agreement), obligations
(including indemnification obligations), fees (including the fees provided for
in the Fee Letter), Lender Group Expenses (including any fees or expenses that
accrue after the commencement of an Insolvency Proceeding, regardless of whether
allowed or allowable in whole or in part as a claim in any such Insolvency
Proceeding), guaranties, and all covenants and duties of any other kind and
description owing by any Loan Party arising out of, under, pursuant to, in
connection with, or evidenced by the Agreement or any of the other Loan
Documents and irrespective of whether for the payment of money, whether direct
or indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, and including all interest not paid when due and all other
expenses or other amounts

 
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that Borrower is required to pay or reimburse by the Loan Documents or by law or
otherwise in connection with the Loan Documents, (b) all debts, liabilities, or
obligations (including reimbursement obligations, irrespective of whether
contingent) owing by Borrower or any other Loan Party to an Underlying Issuer
now or hereafter arising from or in respect of any Underlying Letters of Credit,
and (c) all Bank Product Obligations.  Without limiting the generality of the
foregoing, the Obligations of Borrower under the Loan Documents include the
obligation to pay (i) the principal of the Revolving Loans, (ii) interest
accrued on the Revolving Loans, (iii) the amount necessary to reimburse Issuing
Lender for amounts paid or payable pursuant to Letters of Credit or
Reimbursement Undertakings and the amount necessary to reimburse Underlying
Issuer for amounts paid or payable pursuant to Letters of Credit, (iv) Letter of
Credit commissions, charges, expenses, and fees, (v) Lender Group Expenses, (vi)
fees payable under the Agreement or any of the other Loan Documents, and (vii)
indemnities and other amounts payable by any Loan Party under any Loan
Document.  Any reference in the Agreement or in the Loan Documents to the
Obligations shall include all or any portion thereof and any extensions,
modifications, renewals, or alterations thereof, both prior and subsequent to
any Insolvency Proceeding.
 
“OFAC” means The Office of Foreign Assets Control of the U.S. Department of the
Treasury.
 
“Originating Lender” has the meaning specified therefor in Section 13.1(e) of
the Agreement.
 
“Overadvance” means, as of any date of determination, that the Revolver Usage is
greater than any of the limitations set forth in Section 2.1 or Section 2.11.
 
“Participant” has the meaning specified therefor in Section 13.1(e) of the
Agreement.
 
“Patriot Act” has the meaning specified therefor in Section 4.13 of the
Agreement.

“Payment Conditions” means, with respect to any Designated Transaction, each of
the following conditions:

(a) no Default or Event of Default has occurred and is continuing or would
immediately result from the consummation of the Designated Transaction,

(b) Borrower and its Subsidiaries shall be in compliance with Section 7 of the
Agreement (calculated as if a Financial Covenant Trigger Period is then in
effect), on a pro forma basis after giving effect to such Designated Transaction
and the payment of all amounts (including fees and expenses) owing in connection
therewith, and

(c) Borrower has Excess Availability on the date of such Designated Transaction,
and after giving effect thereto, that is greater than 40,000,000.

“Perfection Certificate” means a certificate in the form of Exhibit P-1.
 
“Permitted Acquisition” means any Acquisition so long as:
 
(a)  no Default or Event of Default shall have occurred and be continuing or
would result from the consummation of the proposed Acquisition and the proposed
Acquisition is consensual,
 
(b)  no Indebtedness will be incurred, assumed, or would exist with respect to
Borrower or its Subsidiaries as a result of such Acquisition, other than
Indebtedness permitted under clauses (f), (g), (m), (t) or (u) of the definition
of Permitted Indebtedness and no Liens will be incurred, assumed, or would
 

 
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exist with respect to the assets of Borrower or its Subsidiaries as a result or
such Acquisition other than Permitted Liens,
 
(c)  Borrower has provided Agent with written confirmation, supported by
reasonably detailed calculations, that on a pro forma basis (including pro forma
adjustments arising out of events which are directly attributable to such
proposed Acquisition, are factually supportable, and are expected to have a
continuing impact, in each case, determined as if the combination had been
accomplished at the beginning of the relevant period; such eliminations and
inclusions to be mutually agreed upon by Borrower and Agent) created by adding
the historical combined financial statements of Borrower (including the combined
financial statements of any other Person or assets that were the subject of a
prior Permitted Acquisition during the relevant period) to the historical
consolidated financial statements of the Person to be acquired (or the
historical financial statements related to the assets to be acquired) pursuant
to the proposed Acquisition, Borrower and its Subsidiaries (i) would have been
in compliance with the financial covenants in Section 7 of the Agreement for the
12 month period ended immediately prior to the proposed date of consummation of
such proposed Acquisition as though a Financial Covenant Trigger Period was in
effect during such period, and (ii) are projected to be in compliance with the
financial covenants in Section 7 of the Agreement as of the end of each month
during the 12 month period ended one year after the proposed date of
consummation of such proposed Acquisition, as though a Financial Covenant
Trigger Period was in effect during such period,
 
(d)  Borrower has provided Agent with its due diligence package relative to the
proposed Acquisition, including forecasted balance sheets, profit and loss
statements, and cash flow statements of the Person or assets to be acquired, all
prepared on a basis consistent with such Person’s (or assets’) historical
financial statements, together with appropriate supporting details and a
statement of underlying assumptions for the 1 year period following the date of
the proposed Acquisition, on a quarter by quarter basis), in form and substance
(including as to scope and underlying assumptions) reasonably satisfactory to
Agent,
 
(e)  Borrower has provided Agent with written notice of the proposed Acquisition
at least 15 Business Days prior to the anticipated closing date of the proposed
Acquisition and, not later than 5 Business Days prior to the anticipated closing
date of the proposed Acquisition, copies of the Acquisition Agreement and other
material documents relative to the proposed Acquisition, which Acquisition
Agreement and material documents must be reasonably acceptable to Agent,
 
(f)  the assets being acquired (other than a de minimis amount of assets in
relation to Borrower’s and its Subsidiaries’ total assets), or the Person whose
Equity Interests are being acquired, are useful in or engaged in, as applicable,
the business of Borrower and its Subsidiaries or a business reasonably related
thereto,
 
(g) if the subject assets or Equity Interests, as applicable, are being acquired
directly by a Borrower or one of its Subsidiaries that is a Loan Party, then
Borrower or the applicable Loan Party shall have complied with Section 5.11 or
5.12 of the Agreement, as applicable, of the Agreement and, in the case of an
acquisition of Equity Interests, Borrower or the applicable Loan Party shall
have demonstrated to Agent that the new Loan Parties have received consideration
sufficient to make the joinder documents binding and enforceable against such
new Loan Parties, and
 
(h) Borrower has Excess Availability on the date of such Acquisition, and after
giving effect thereto (including any purchase price adjustments and other
payments required to be made), of more than $40,000,000.
 

 
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“Permitted Discretion” means a determination made in good faith in the exercise
of reasonable (from the perspective of a secured asset-based lender) business
judgment.
 
“Permitted Dispositions” means:
 
(a) sales, abandonment, or other dispositions of Equipment that is substantially
worn, damaged, uneconomic, unnecessary or obsolete or no longer used or useful
in the ordinary course of business and leases or subleases of real property not
useful in the conduct of the business of Borrower and its Subsidiaries,
 
(b) sales of Inventory to buyers in the ordinary course of business,
 
(c) the use or transfer of money or Cash Equivalents in a manner that is not
prohibited by the terms of the Agreement or the other Loan Documents,
 
(d) the licensing of patents, trademarks, copyrights, and other intellectual
property rights in the ordinary course of business,
 
(e) the granting of Permitted Liens,
 
(f) the sale or discount, in each case without recourse, of accounts receivable
arising in the ordinary course of business, but only in connection with the
compromise or collection thereof,
 
(g) any involuntary loss, damage or destruction of property,
 
(h) any involuntary condemnation, seizure or taking, by exercise of the power of
eminent domain or otherwise, or confiscation or requisition of use of property,
 
(i) the leasing or subleasing of assets of Borrower or its Subsidiaries in the
ordinary course of business,
 
(j) (i) the sale or issuance of Equity Interests (other than Disqualified Equity
Interests) of Borrower, (ii) the sale or issuance of Equity Interests of any
Loan Party to any other Loan Party, (iii) the sale or issuance of Equity
Interests of any Non-Loan Party to any Non-Loan Party, and (iv) the sale or
issuance of Equity Interests of any Non-Loan Party to any Loan Party in
connection with a Permitted Investment by such Loan Party,
 
(k) (i) the lapse of registered patents, trademarks, copyrights and other
intellectual property of Borrower and its Subsidiaries to the extent not
economically desirable in the conduct of their business or (ii) the abandonment
of patents, trademarks, copyrights, or other intellectual property rights so
long as under clause (i), generating such lapse is not materially adverse to the
interests of the Lender Group,
 
(l)  the making of Restricted Payments that are expressly permitted to be made
pursuant to the Agreement,
 
(m)  the making of Permitted Investments,
 
(n) so long as no Event of Default has occurred and is continuing or would
immediately result therefrom, transfers of assets (i) from Borrower or any of
its Subsidiaries to a Loan Party, and (ii) from any Non-Loan Party to any other
Subsidiary of Borrower,
 

 
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(o) dispositions of assets acquired by Borrower and its Subsidiaries pursuant to
a Permitted Acquisition consummated within 12 months of the date of the proposed
disposition so long as (i) the consideration received for the assets to be so
disposed is at least equal to the fair market value of such assets, (ii) the
assets to be so disposed are not necessary or economically desirable in
connection with the business of Borrower and its Subsidiaries, and (iii) the
assets to be so disposed are readily identifiable as assets acquired pursuant to
the subject Permitted Acquisition,
 
(p)  a sale or contribution of an interest in all or a portion of the Marathon
Project via a sale, contribution or issuance of Equity Interests of SCI or any
of its Subsidiaries or any of the assets of SCI or any of SCI’s Subsidiaries
(including contribution of Equity Interests, assets or property of SCI or any of
its Subsidiaries into a joint venture),
 
(q)  a sale or contribution of an interest in all or a portion of the Altar
Project via a sale, contribution or issuance of Equity Interests of SCLLC or any
of its Subsidiaries or any of the assets of SCLLC or any of SCLLC’s Subsidiaries
(including contribution of Equity Interests, assets or property of SCLLC or any
of its Subsidiaries into a joint venture), and
 
(r)  sales or dispositions of assets (other than Accounts, Inventory, Equity
Interests of Subsidiaries of Borrower which are Loan Parties) not otherwise
permitted in clauses (a) through (q) above so long as made at fair market value
and the aggregate fair market value of all assets disposed of in fiscal year
(including the proposed disposition) would not exceed $5,000,000.
 
“Permitted Indebtedness” means:
 
(a) Indebtedness evidenced by the Agreement or the other Loan Documents, as well
as Indebtedness owed to Underlying Issuers with respect to Underlying Letters of
Credit,
 
(b) Indebtedness set forth on Schedule 4.14 to the Agreement and any Refinancing
Indebtedness in respect of such Indebtedness,
 
(c) Permitted Purchase Money Indebtedness and any Refinancing Indebtedness in
respect of such Indebtedness,
 
(d) endorsement of instruments or other payment items for deposit,
 
(e) Indebtedness consisting of (i) unsecured guarantees arising with respect to
customary indemnification obligations to purchasers in connection with Permitted
Dispositions; and (ii) unsecured guarantees with respect to Indebtedness of
Borrower or one of its Subsidiaries, to the extent that the Person that is
obligated under such guaranty could have incurred such underlying Indebtedness,
 
(f) unsecured Indebtedness of Borrower that is incurred on the date of the
consummation of a Permitted Acquisition solely for the purpose of consummating
such Permitted Acquisition so long as (i) no Event of Default has occurred and
is continuing or would result therefrom, (ii) such unsecured Indebtedness is not
incurred for working capital purposes, (iii) such unsecured Indebtedness does
not mature prior to the date that is 6 months after the Maturity Date, (iv) such
unsecured Indebtedness does not amortize until 6 months after the Maturity Date,
(v) such unsecured Indebtedness does not provide for the payment of interest
thereon in cash or Cash Equivalents prior to the date that is 6 months after the
Maturity Date, and (vi) such Indebtedness is subordinated in right of payment to
the Obligations on terms and conditions reasonably satisfactory to Agent,
 
(g) Acquired Indebtedness in an amount not to exceed $15,000,000 outstanding at
any one time,
 

 
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(h) Indebtedness incurred in the ordinary course of business under performance,
surety, bid, statutory, or appeal bonds,
 
(i) Indebtedness owed to any Person providing property, casualty, liability, or
other insurance to Borrower or any of its Subsidiaries, so long as the amount of
such Indebtedness is not in excess of the amount of the unpaid cost of, and
shall be incurred only to defer the cost of, such insurance for the year in
which such Indebtedness is incurred and such Indebtedness is outstanding only
during such year,
 
(j) the incurrence by Borrower or its Subsidiaries of Indebtedness under Hedge
Agreements (including, for the avoidance of doubt, Commodity Hedge Agreements)
that are incurred for the bona fide purpose of hedging the interest rate,
commodity, or foreign currency risks associated with Borrower’s and its
Subsidiaries’ operations or for the purpose of purchasing commodities in the
ordinary course of business in connection with Borrower’s and its Subsidiaries’
operations and, in each case, not for speculative purposes,
 
(k) Indebtedness incurred in the ordinary course of business in respect of
credit cards, credit card processing services, debit cards, stored value cards,
purchase cards (including so-called “procurement cards” or “P-cards”), or Cash
Management Services,
 
(l) unsecured Indebtedness of Borrower owing to former employees, officers, or
directors (or any spouses, ex-spouses, or estates of any of the foregoing)
incurred in connection with the repurchase by Borrower of the Equity Interests
of Borrower that has been issued to such Persons, so long as (i) no Default or
Event of Default has occurred and is continuing or would result from the
incurrence of such Indebtedness, (ii) the aggregate amount of all such
Indebtedness outstanding at any one time plus the aggregate amount of
redemptions made by Borrower during the term of the Agreement pursuant to
Section 6.7(a) of the Agreement, does not exceed $1,000,000 in the aggregate,
and (iii) such Indebtedness is subordinated to the Obligations on terms and
conditions reasonably acceptable to Agent,
 
 (m)  unsecured Indebtedness owing to sellers of assets or Equity Interests to a
Loan Party that is incurred by the applicable Loan Party in connection with the
consummation of one or more Permitted Acquisitions so long as (i) the aggregate
principal amount for all such unsecured Indebtedness does not exceed $10,000,000
at any one time outstanding, (ii) is subordinated to the Obligations on terms
and conditions reasonably acceptable to Agent, and (iii) is otherwise on terms
and conditions (including all economic terms and the absence of covenants)
reasonably acceptable to Agent,
 
(n)  contingent liabilities in respect of any indemnification obligation,
adjustment of purchase price, non-compete, or similar obligation of Borrower or
the applicable Loan Party incurred in connection with the consummation of one or
more Permitted Acquisitions,
 
(o)  Indebtedness composing Permitted Investments,
 
(p)  Indebtedness in respect of workers’ compensation claims, unemployment or
other insurance or self-insurance obligations, health, disability or other
benefits to employees or former employees and their families in the ordinary
course of business,
 
(q)  unsecured Indebtedness incurred in respect of netting services, overdraft
protection, and other like services, in each case, incurred in the ordinary
course of business,
 
(r)  to the extent constituting Indebtedness, obligations in respect of bankers’
acceptances, tender, bid, judgment, appeal, performance or governmental contract
bonds and completion guarantees, surety, standby letters of credit and warranty
and contractual service obligations of a like nature, trade letters of
 

 
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credit and documentary letters of credit and similar bonds or guarantees
provided in the ordinary course of business in an aggregate amount not to exceed
$2,500,000,
 
(s)  unsecured Indebtedness of Borrower or its Subsidiaries in respect of
Earn-Outs owing to sellers of assets or Equity Interests to Borrower or its
Subsidiaries that is incurred in connection with the consummation of one or more
Permitted Acquisitions so long as such unsecured Indebtedness is on terms and
conditions reasonably acceptable to Agent,
 
(t)  Non-Recourse Indebtedness of any Non-Recourse Subsidiary, so long as (i) no
Default or Event of Default has occurred and is continuing or would result from
the incurrence of such Indebtedness, (ii) Borrower has Excess Availability on
the date of incurrence of such Indebtedness, after giving effect thereto, of
more than $40,000,000, and (iii) Borrower has delivered to Agent updated pro
forma Projections (after giving effect to such Indebtedness) for the Loan
Parties evidencing compliance on a pro forma basis with Section 7 for the 12
months (on a month-by-month basis) immediately following the proposed date for
the incurrence of such Indebtedness (calculated as if a Financial Covenant
Trigger Period is then in effect),
 
 (u)  unsecured Indebtedness in an aggregate principal outstanding amount not to
exceed $300,000,000 at any time outstanding for all Loan Parties, so long as (i)
no Default or Event of Default has occurred and is continuing or would result
from the incurrence of such Indebtedness, (ii) Borrower has Excess Availability
on the date of incurrence of such Indebtedness, after giving effect thereto, of
more than $40,000,000, and (iii) such Loan Party has delivered to Agent updated
pro forma Projections (after giving effect to such Indebtedness) for the Loan
Parties evidencing compliance on a pro forma basis with Section 7 for the 12
months (on a month-by-month basis) immediately following the proposed date for
the incurrence of such Indebtedness (calculated as if a Financial Covenant
Trigger Period is then in effect),
 
(v)  accrual of interest, accretion or amortization of original issue discount,
or the payment of interest in kind, in each case, on Indebtedness that otherwise
constitutes Permitted Indebtedness, and
 
(w)   any other unsecured Indebtedness incurred by Borrower or any of its
Subsidiaries in an aggregate outstanding amount not to exceed $20,000,000 at any
one time.
 
“Permitted Intercompany Advances” means loans made by (a) a Loan Party to
another Loan Party, (b) a Non-Loan Party to another Non-Loan Party, (c) a
Non-Loan Party to a Loan Party, so long as the parties thereto are party to the
Intercompany Subordination Agreement, and (d) a Loan Party to a Non-Loan Party
(other than a Designated Altar Project Transaction or a Designated Marathon
Project Transaction), so long as (i) at the time of the making of such loan, no
Event of Default has occurred and is continuing or would result therefrom, (ii)
Borrower and its Subsidiaries shall be in compliance with Section 7 of the
Agreement (determined as if a Financial Covenant Trigger Period is then in
effect), on a pro forma basis after giving effect to the incurrence of such
loan, and (iii) Borrower has Excess Availability on the date of such loan, after
giving effect thereto, shall be greater than $40,000,000.
 
“Permitted Investments” means:
 
(a) Investments in cash and Cash Equivalents,
 
(b) Investments in negotiable instruments deposited or to be deposited for
collection in the ordinary course of business,
 

 
 
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(c) advances made in connection with purchases of goods or services in the
ordinary course of business,
 
(d) Investments received in settlement of amounts due to any Loan Party or any
of its Subsidiaries effected in the ordinary course of business or owing to any
Loan Party or any of its Subsidiaries as a result of Insolvency Proceedings
involving an Account Debtor or upon the foreclosure or enforcement of any Lien
in favor of a Loan Party or its Subsidiaries,
 
(e) Investments owned by any Loan Party or any of its Subsidiaries on the
Closing Date and set forth on Schedule P-1 to the Agreement,
 
(f) guarantees permitted under the definition of Permitted Indebtedness,
 
(g) Permitted Intercompany Advances,
 
(h) Equity Interests or other securities acquired in connection with the
satisfaction or enforcement of Indebtedness or claims due or owing to a Loan
Party or its Subsidiaries (in bankruptcy of customers or suppliers or otherwise
outside the ordinary course of business) or as security for any such
Indebtedness or claims,
 
(i) deposits of cash made in the ordinary course of business to secure
performance of operating leases,
 
(j) (i) non-cash loans and advances to employees, officers, and directors of
Borrower or any of its Subsidiaries for the purpose of purchasing Equity
Interests in Borrower so long as the proceeds of such loans are used in their
entirety to purchase such Equity Interests in Borrower, (ii) loans and advances
for payroll, business-related travel, and similar advances to cover matters that
are expected at the time of such advances to be ultimately treated as expenses
for accounting purposes, to employees and officers of Borrower or any of its
Subsidiaries in the ordinary course of business and in an aggregate amount
together with any loans or advances described in the following clause (iii) not
to exceed $2,000,000 at any one time outstanding, and (iii) loans and advances
to employees and officers of Borrower or any of its Subsidiaries in the ordinary
course of business for any other business purpose and in an aggregate amount
together with any loans or advances described in the foregoing clause (ii) not
to exceed $2,000,000 at any one time outstanding,
 
(k) Permitted Acquisitions,
 
(l) Investments in the form of capital contributions and the acquisition of
Equity Interests made by any Loan Party in any other Loan Party (other than
capital contributions to or the acquisition of Equity Interests of Borrower),
 
(m) Investments resulting from entering into (i) Bank Product Agreements, or
(ii) agreements relative to Indebtedness that is permitted under clause (j) of
the definition of Permitted Indebtedness,
 
(n)  equity Investments by any Loan Party in any Subsidiary of such Loan Party
which is required by law to maintain a minimum net capital requirement or as may
be otherwise required by applicable law,
 
(o) Investments held by a Person acquired in a Permitted Acquisition to the
extent that such Investments were not made in contemplation of or in connection
with such Permitted Acquisition and were in existence on the date of such
Permitted Acquisition,
 
 
 
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(p)  any Investments received in compromise or resolution of litigation,
arbitration or other disputes,
 
(q)  Investments resulting from Hedge Obligations (including, for the avoidance
of doubt, Commodity Hedge Agreements),
 
(r)  prepaid expenses, and lease, utility, workers’ compensation and other
deposits, if created, acquired or entered into in the ordinary course of
business,
 
(s)  so long as no Default or Event of Default has occurred and is continuing or
would result therefrom, any other Investments in an aggregate amount not to
exceed $2,500,000 during the term of the Agreement,
 
 (t)  other Investments, if the Payment Conditions with respect thereto have
been satisfied after giving effect to such Investment, or if such other
Investments constitute (i) a Designated Altar Project Transaction, the Altar
Project Payment Conditions with respect thereto have been satisfied after giving
effect to such Designated Altar Project Transaction or (ii) a Designated
Marathon Project Transaction, the Marathon Project Payment Conditions with
respect thereto have been satisfied after giving effect to such Designated
Marathon Project Transaction and
 
(u)  Investments in the form of the contribution of Equity Interests or property
of either (i) SCI or any of its Subsidiaries into a joint venture formed for the
purpose of completing the Marathon Project or (ii) SCLLC or any of its
Subsidiaries into a joint venture formed for the purpose of completing the Altar
Project.
 
“Permitted Liens” means
 
(a) Liens granted to, or for the benefit of, Agent to secure the Obligations,
 
(b) Liens for unpaid Taxes, assessments, or other governmental charges or levies
that either (i) are not yet delinquent, or (ii) do not have priority over
Agent’s Liens and the underlying taxes, assessments, or charges or levies are
the subject of Permitted Protests,
 
(c) judgment Liens arising solely as a result of the existence of judgments,
orders, or awards that do not constitute an Event of Default under Section 8.3
of the Agreement,
 
(d) Liens set forth on Schedule P-2 to the Agreement; provided, that to qualify
as a Permitted Lien, any such Lien described on Schedule P-2 to the Agreement
shall only secure the Indebtedness that it secures on the Closing Date and any
Refinancing Indebtedness in respect thereof,
 
(e) the interests of lessors and sub-lessors under operating leases and
non-exclusive licensors under license agreements or in the property being leased
or licensed,
 
(f) purchase money Liens or the interests of lessors under Capital Leases to the
extent that such Liens or interests secure Permitted Purchase Money Indebtedness
and so long as (i) such Lien attaches only to the asset purchased or acquired
and the proceeds thereof, and (ii) such Lien only secures the Indebtedness that
was incurred to acquire the asset purchased or acquired or any Refinancing
Indebtedness in respect thereof,
 
(g) Liens arising by operation of law in favor of warehousemen, landlords,
carriers, mechanics, materialmen, laborers, or suppliers, incurred in the
ordinary course of business and not in connection with
 

 
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the borrowing of money, and which Liens either (i) are for sums not yet
delinquent, or (ii) are the subject of Permitted Protests,
 
(h) Liens on amounts deposited to secure Borrower’s and its Subsidiaries
obligations in connection with worker’s compensation or other unemployment
insurance,
 
(i) Liens on assets of Non-Loan Parties to secure the performance of tenders,
completion guarantees, statutory obligations, surety, environmental or appeal
bonds, bids, leases, government contracts, performance bonds or other
obligations of a like nature incurred in the ordinary course of business,
 
(j) with respect to any real property, easements, rights of way, and zoning
restrictions that do not materially interfere with or impair the use or
operation thereof,
 
(k) licenses of patents, trademarks, copyrights, and other intellectual property
rights in the ordinary course of business,
 
(l) Liens that are replacements of Permitted Liens to the extent that the
original Indebtedness is the subject of permitted Refinancing Indebtedness and
so long as the replacement Liens only encumber those assets that secured the
original Indebtedness,
 
(m) rights of setoff or bankers’ liens and other Liens upon Deposit Accounts,
securities accounts or commodities accounts in favor of banks or other
depository intermediary or brokerage institutions, solely to the extent incurred
(i) in connection with the maintenance of such Deposit Accounts securities
accounts or commodities accounts in the ordinary course of business or (ii) in
respect of Bank Products provided by a Bank Product Provider,
 
(n) Liens granted in the ordinary course of business on the unearned portion of
insurance premiums securing the financing of insurance premiums to the extent
the financing is permitted under the definition of Permitted Indebtedness,
 
(o) Liens in favor of customs and revenue authorities arising as a matter of law
to secure payment of customs duties in connection with the importation of goods,
 
(p) Liens solely on any cash earnest money deposits made by Borrower or any of
its Subsidiaries in connection with any letter of intent or purchase agreement
with respect to a Permitted Acquisition,
 
(q) Liens assumed by Borrower or its Subsidiaries in connection with a Permitted
Acquisition that secure Acquired Indebtedness, and
 
(r) Liens on amounts deposited to secure Indebtedness in respect of letters of
credit issued by U.S. Bank on behalf of a Loan Party prior to the Closing Date,
 
(s)  Liens granted on the assets of any Non-Loan Party to secure Indebtedness
described in clause (t) of the definition of Permitted Indebtedness, so long as
(i) no Default or Event of Default has occurred and is continuing or would
result from the incurrence of such Indebtedness, (ii) Borrower has Excess
Availability on the date of incurrence of such Indebtedness, after giving effect
thereto, of more than $40,000,000, and (iii) Borrower has delivered to Agent
updated pro forma Projections (after giving effect to such Indebtedness) for the
Loan Parties evidencing compliance on a pro forma basis with Section 7 for the
12 months (on a month-by-month basis) immediately following the proposed date
for the incurrence of such Indebtedness (calculated as if a Financial Covenant
Trigger Period is then in effect),
 

 
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(t)  to the extent constituting Liens, options, put and call arrangements,
rights of first refusal and similar rights relating to Permitted Investments,
 
(u)  Liens arising from precautionary UCC financing statement filings regarding
operating leases entered into by the Loan Parties or any of their Subsidiaries
in the ordinary course of business or other precautionary UCC financing
statement filings,
 
(v)  Liens on cash collateral in an aggregate amount not to exceed $2,500,000 in
favor of providers under Commodity Hedge Agreements to secure Indebtedness
evidenced by such Commodity Hedge Agreements, and
 
(w) other Liens granted on assets not included in the Collateral which do not
secure Indebtedness for borrowed money or letters of credit and as to which the
aggregate amount of the obligations secured thereby does not exceed $5,000,000.
 
“Permitted Protest” means the right of Borrower or any of its Subsidiaries to
protest any Lien (other than any Lien that secures the Obligations), taxes
(other than payroll taxes or taxes that are the subject of a United States
federal tax lien), or rental payment, provided that (a) a reserve with respect
to such obligation is established on Borrower’s or its Subsidiaries’ books and
records in such amount as is required under GAAP, (b) any such protest is
instituted promptly and prosecuted diligently by Borrower or its Subsidiary, as
applicable, in good faith, and (c) Agent is satisfied that, while any such
protest is pending, there will be no impairment of the enforceability, validity,
or priority of any of Agent’s Liens.
 
“Permitted Purchase Money Indebtedness” means, as of any date of determination,
Indebtedness (other than the Obligations, but including Capitalized Lease
Obligations), incurred after the Closing Date and at the time of, or within 20
days after, the acquisition of any fixed assets for the purpose of financing all
or any part of the acquisition cost thereof, in an aggregate principal amount
outstanding at any one time not in excess of $20,000,000.
 
“Person” means natural persons, corporations, limited liability companies,
limited partnerships, general partnerships, limited liability partnerships,
joint ventures, trusts, land trusts, business trusts, or other organizations,
irrespective of whether they are legal entities, and governments and agencies
and political subdivisions thereof.
 
“Platform” has the meaning specified therefor in Section 17.9(c) of the
Agreement.
 
“Post-Increase Lenders” has the meaning specified therefor in Section 2.14(d) of
the Agreement.
 
“Pre-Increase Revolver Lenders” has the meaning specified therefor in Section
2.14(d) of this Agreement.
 
“Primary Syndication” has the meaning ascribed thereto in the Fee Letter.
 
“Projections” means Borrower’s forecasted (a) balance sheets, (b) profit and
loss statements, and (c) cash flow statements, all prepared on a basis
consistent with Borrower’s historical financial statements, together with
appropriate supporting details and a statement of underlying assumptions.
 
“Pro Rata Share” means, as of any date of determination:
 
(a)  with respect to a Lender’s obligation to make all or a portion of the
Revolving Loans, with respect to such Lender’s right to receive payments of
interest, fees, and principal with respect to the

 
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Revolving Loans, and with respect to all other computations and other matters
related to the Commitments or the Revolving Loans, the percentage obtained by
dividing (i) the Revolving Loan Exposure of such Lender by (ii) the aggregate
Revolving Loan Exposure of all Lenders,
 
(b)  with respect to a Lender’s obligation to participate in the Letters of
Credit, with respect to such Lender’s obligation to reimburse Issuing Lender,
and with respect to such Lender’s right to receive payments of Letter of Credit
Fees, and with respect to all other computations and other matters related to
the Letters of Credit, the percentage obtained by dividing (i) the Revolving
Loan Exposure of such Lender by (ii) the aggregate Revolving Loan Exposure of
all Lenders; provided, that if all of the Revolving Loans have been repaid in
full and all Commitments have been terminated, but Letters of Credit remain
outstanding, Pro Rata Share under this clause shall be determined as if the
Commitments had not been terminated and based upon the Commitments as they
existed immediately prior to their termination, and
 
(d)  with respect to all other matters and for all other matters as to a
particular Lender (including the indemnification obligations arising under
Section 15.7 of the Agreement), the percentage obtained by dividing (i) the
Revolving Loan Exposure of such Lender by (ii) the aggregate Revolving Loan
Exposure of all Lenders, in any such case as the applicable percentage may be
adjusted by assignments permitted pursuant to Section 13.1; provided, that if
all of the Loans have been repaid in full, all Letters of Credit have been made
the subject of Letter of Credit Collateralization, and all Commitments have been
terminated, Pro Rata Share under this clause shall be determined as if the
Revolving Loan Exposures had not been repaid, collateralized, or terminated and
shall be based upon the Revolving Loan Exposures as they existed immediately
prior to their repayment, collateralization, or termination.
 
“Protective Advances” has the meaning specified therefor in Section 2.3(d)(i) of
the Agreement.
 
“Public Lender” has the meaning specified therefor in Section 17.9(c) of the
Agreement.
 
“Purchase Price” means, with respect to any Acquisition, an amount equal to the
aggregate consideration, whether cash, property or securities (including the
fair market value of any Equity Interests of Borrower issued in connection with
such Acquisition and including the maximum amount of Earn-Outs), paid or
delivered by Borrower or one of its Subsidiaries in connection with such
Acquisition (whether paid at the closing thereof or payable thereafter and
whether fixed or contingent), but excluding therefrom (a) any cash of the seller
and its Affiliates used to fund any portion of such consideration and (b) any
cash or Cash Equivalents acquired in connection with such Acquisition.
 
“Qualified Cash” means, as of any date of determination, the amount of
unrestricted cash and Cash Equivalents of Borrower and its Subsidiaries that is
in Deposit Accounts or in Securities Accounts, or any combination thereof, and
which such Deposit Account or Securities Account is the subject of a Control
Agreement and is maintained by a branch office of the bank or securities
intermediary located within the United States.
 
“Qualified Equity Interest” means and refers to any Equity Interests issued by
Borrower (and not by one or more of its Subsidiaries) that is not a Disqualified
Equity Interest.
 
“Receivable Reserves” means, as of any date of determination, those reserves
that Agent deems necessary or appropriate, in its Permitted Discretion and
subject to Section 2.1(c), to establish and maintain (including reserves for
rebates, discounts, warranty claims, and returns) with respect to the Eligible
Accounts or the Maximum Revolver Amount, including reserves with respect to (i)
sums that Borrower or its Subsidiaries are required to pay under any Section of
the Agreement or any other Loan Document (such as taxes, assessments, insurance
premiums, or, in the case of leased assets, rents or other
 

 
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amounts payable under such leases) and has failed to pay, (ii) amounts owing by
Borrower or its Subsidiaries to any Person to the extent secured by a Lien on,
or any trust over, any of the Collateral (other than a Permitted Lien), which
Lien or trust, in the Permitted Discretion of Agent likely would have a priority
superior to the Agent’s Liens (such as Liens in favor of landlords,
warehousemen, carriers, mechanics, materialmen, laborers, or suppliers, or Liens
for ad valorem, excise, sales, or other taxes where given priority under
applicable law) in and to such item of the Collateral), (iii) taxes and tax
assessments, and (iv) mineral rights with respect to Borrower’s obligations to
the owner of the mineral reserves.
 
“Record” means information that is inscribed on a tangible medium or that is
stored in an electronic or other medium and is retrievable in perceivable form.
 
“Reference Period” has the meaning set forth in the definition of EBITDA.
 
“Refinancing Indebtedness” means refinancings, renewals, or extensions of
Indebtedness so long as:
 
(a) such refinancings, renewals, or extensions do not result in an increase in
the principal amount of the Indebtedness so refinanced, renewed, or extended,
other than by the amount of premiums paid thereon and the fees and expenses
incurred in connection therewith and by the amount of unfunded commitments with
respect thereto,
 
(b) such refinancings, renewals, or extensions do not result in a shortening of
the average weighted maturity (measured as of the refinancing, renewal, or
extension) of the Indebtedness so refinanced, renewed, or extended, nor are they
on terms or conditions that, taken as a whole, are materially less favorable to
the interests of the Lenders than those of the Indebtedness being refinanced,
renewed, replaced, exchanged or extended,
 
(c) if the Indebtedness that is refinanced, renewed, or extended was
subordinated in right of payment to the Obligations, then the terms and
conditions of the refinancing, renewal, or extension must include subordination
terms and conditions that are at least as favorable to the Lender Group as those
that were applicable to the refinanced, renewed, or extended Indebtedness, and
 
(d) the Indebtedness that is refinanced, renewed, or extended is not recourse to
any Person that is liable on account of the Obligations other than those Persons
which were obligated with respect to the Indebtedness that was refinanced,
renewed, or extended.
 
“Refiner” means any of (a) Chemical Catalyst and Refining Division of Johnson
Matthey Inc., a Pennsylvania corporation, (b) Heraeus Metal Processing, LLC, a
Delaware limited liability company, or (c) any other Person that is in the
business of refining mined ore or any other materials containing platinum group
metals or any other precious metals.
 
“Refining Agreements” means (a) each contract or agreement set forth on Schedule
R-1 to the Agreement, and (b) each other contract or agreement, by and between
any Loan Party and a Refiner, pursuant to which the Refiner agrees to process
the mineral ore or any other materials containing platinum group metals or any
other precious metals of such Loan Party.
 
“Register” has the meaning specified therefor in Section 2.3(f) of the
Agreement.
 
“Reimbursement Undertaking” has the meaning specified therefor in Section
2.11(a) of the Agreement.
 

 
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“Related Fund” means any Person (other than a natural person) that is engaged in
making, purchasing, holding or investing in bank loans and similar extensions of
credit in the ordinary course and that is administered, advised or managed by
(a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of
an entity that administers, advises or manages a Lender.
 
“Remedial Action” means all actions taken to (a) clean up, remove, remediate,
contain, treat, monitor, assess, evaluate, or in any way address Hazardous
Materials in the indoor or outdoor environment, (b) prevent or minimize a
release or threatened release of Hazardous Materials so they do not migrate or
endanger or threaten to endanger public health or welfare or the indoor or
outdoor environment, (c) restore or reclaim natural resources or the
environment, (d) perform any pre-remedial studies, investigations, or
post-remedial operation and maintenance activities, or (e) conduct any other
actions with respect to Hazardous Materials required by Environmental Laws.
 
“Replacement Lender” has the meaning specified therefor in Section 2.13(b) of
the Agreement.
 
“Report” has the meaning specified therefor in Section 15.16 of the Agreement.
 
“Required Availability” means Excess Availability exceeds $50,000,000.
 
“Required Lenders” means, at any time, Lenders having or holding more than 50%
of the aggregate Revolving Loan Exposure of all Lenders; provided, that (i) the
Revolving Loan Exposure of any Defaulting Lender shall be disregarded in the
determination of the Required Lenders, and (ii) at any time there are 2 or more
Lenders, “Required Lenders” must include at least 2 Lenders (who are not
Affiliates of one another).
 
“Restricted Payment” means to (a) declare or pay any dividend or make any other
payment or distribution, directly or indirectly, on account of Equity Interests
issued by Borrower (including any payment in connection with any merger or
consolidation involving Borrower) or to the direct or indirect holders of Equity
Interests issued by Borrower in their capacity as such (other than dividends or
distributions payable in Qualified Equity Interests issued by Borrower, or (b)
purchase, redeem, make any sinking fund or similar payment, or otherwise acquire
or retire for value (including in connection with any merger or consolidation
involving Borrower) any Equity Interests issued by Borrower, (c) make any
payment to retire, or to obtain the surrender of, any outstanding warrants,
options, or other rights to acquire Equity Interests of Borrower now or
hereafter outstanding, and (d) make, or cause or suffer to permit any of
Borrower’s Subsidiaries to make, any payment or prepayment of principal of,
premium, if any, or interest on, or redemption, purchase, retirement, defeasance
(including in-substance or legal defeasance), sinking fund or similar payment
with respect to, any Subordinated Indebtedness; provided, that in no event shall
(x) any exchange of Qualified Equity Interests by a Loan Party for other
Qualified Equity Interests issued by such Loan Party, or (y) any repayment in
respect of any Permitted Indebtedness that is otherwise permitted hereunder be
deemed a Restricted Payment (other than as set forth in clause (d) hereof).
 
“Revolver Usage” means, as of any date of determination, the sum of (a) the
amount of outstanding Revolving Loans (inclusive of Swing Loans and Protective
Advances), plus (b) the amount of the Letter of Credit Usage.
 
“Revolving Loan Exposure” means, with respect to any Lender, means, as of any
date of determination (a) prior to the termination of the Commitments, the
amount of such Lender’s Commitment, and (b) after the termination of the
Commitments, the aggregate outstanding principal amount of the Revolving Loans
of such Lender.
 

 
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“Revolving Loans” has the meaning specified therefor in Section 2.1(a) of the
Agreement.
 
“Sanctioned Entity” means (a) a country or a government of a country, (b) an
agency of the government of a country, (c) an organization directly or
indirectly controlled by a country or its government, (d) a Person resident in
or determined to be resident in a country, in each case, that is subject to a
country sanctions program administered and enforced by OFAC.
 
“Sanctioned Person” means a person named on the list of Specially Designated
Nationals maintained by OFAC.
 
“S&P” has the meaning specified therefor in the definition of Cash Equivalents.
 
“SCI” means Stillwater Canada Inc., an Ontario corporation.
 
“SCLLC” mean Stillwater Canada, LLC, a Delaware limited liability company.
 
“SEC” means the United States Securities and Exchange Commission and any
successor thereto.
 
“Securities Account” means a securities account (as that term is defined in the
Code).
 
“Securities Act” means the Securities Act of 1933, as amended from time to time,
and any successor statute.
 
“Settlement” has the meaning specified therefor in Section 2.3(e)(i) of the
Agreement.
 
“Settlement Date” has the meaning specified therefor in Section 2.3(e)(i) of the
Agreement.
 
“Solvent” means, with respect to any Person as of any date of determination,
that (a) at fair valuations, the sum of such Person’s debts (including
contingent liabilities) is less than all of such Person’s assets, (b) such
Person is not engaged or about to engage in a business or transaction for which
the remaining assets of such Person are unreasonably small in relation to the
business or transaction or for which the property remaining with such Person is
an unreasonably small capital, and (c) such Person has not incurred and does not
intend to incur, or reasonably believe that it will incur, debts beyond its
ability to pay such debts as they become due (whether at maturity or otherwise),
and (d) such Person is “solvent” or not “insolvent”, as applicable within the
meaning given those terms and similar terms under applicable laws relating to
fraudulent transfers and conveyances.  For purposes of this definition, the
amount of any contingent liability at any time shall be computed as the amount
that, in light of all of the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability (irrespective of whether such contingent liabilities meet the
criteria for accrual under Statement of Financial Accounting Standard No. 5).
 
“Specified Institutions” has the meaning specified therefor in the definition of
“Cash Equivalents”.
 
“Subordinated Indebtedness” means any unsecured Indebtedness of Borrower or its
Subsidiaries incurred from time to time that is subordinated in right of payment
to the Obligations and that (a) is only guaranteed by the Loan Parties, (b) is
not subject to scheduled amortization, redemption, sinking fund or similar
payment and does not have a final maturity, in each case, on or before the date
that is six months after the Maturity Date, (c) does not include (i) any
financial covenants that is more restrictive or onerous on any Loan Party in any
material respect than any comparable covenant in the Agreement or (ii) any
 

 
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covenant (other than financial covenants) or agreement when taken as a whole,
that is more restrictive or onerous on any Loan Party in any material respect
than any comparable covenant in the Agreement, and (d) contains customary
subordination (including customary payment blocks during a payment default under
any “senior debt” designated thereunder) and turnover provisions and shall be
limited to cross-payment default and cross-acceleration to other “senior debt”
designated thereunder.
 
“Subsidiary” of a Person means a corporation, partnership, limited liability
company, or other entity in which that Person directly or indirectly owns or
controls the Equity Interests having ordinary voting power to elect a majority
of the Board of Directors of such corporation, partnership, limited liability
company, or other entity.
 
“Supermajority Lenders” means, at any time, Lenders having or holding more than
66 2/3% of the aggregate Revolving Loan Exposure of all Lenders; provided, that
(i) the Revolving Loan Exposure of any Defaulting Lender shall be disregarded in
the determination of the Required Lenders and (ii) at any time there are 2 or
more Lenders, “Supermajority Lenders” must include at least 2 Lenders (who are
not Affiliates of one another).
 
“Swing Lender” means WFCF or any other Lender that, at the request of Borrower
and with the consent of Agent agrees, in such Lender’s sole discretion, to
become the Swing Lender under Section 2.3(b) of the Agreement.
 
“Swing Loan” has the meaning specified therefor in Section 2.3(b) of the
Agreement.
 
“Swing Loan Exposure” means, as of any date of determination with respect to any
Lender, such Lender’s Pro Rata Share of the Swing Loans on such date.
 
“Syndication Letter” means that certain syndication letter, by and between
Borrower and Agent, which is in form and substance reasonably satisfactory to
Agent.
 
“Taxes” means any taxes, levies, imposts, duties, fees, assessments or other
charges of whatever nature now or hereafter imposed by any jurisdiction or by
any political subdivision or taxing authority thereof or therein, and all
interest, penalties and other additions hereto.
 
“Tax Lender” has the meaning specified therefor in Section 14.2(a) of the
Agreement.
 
“Threshold Amount” means the greater of $30,000,000 or 30% of the Maximum
Revolver Amount.
 
“UCP 600” means the rules of the Uniform Customs and Practice for Documentary
Credits, as most recently published by the International Chamber of Commerce and
in effect as of July 1, 2007 (or such later version thereof as may be in effect
at the time of issuance).
 
“Underlying Issuer” means Wells Fargo or one of its Affiliates.
 
“Underlying Letter of Credit” means a Letter of Credit that has been issued by
an Underlying Issuer.
 
“United States” means the United States of America.
 
“Unused Line Fee” has the meaning specified therefor in Section 2.10(b) of the
Agreement.
 

 
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“Voidable Transfer” has the meaning specified therefor in Section 17.8 of the
Agreement.
 
“Wells Fargo” means Wells Fargo Bank, National Association, a national banking
association.
 
“WFCF” means Wells Fargo Capital Finance, LLC, a Delaware limited liability
company.

 
 
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