Exhibit 10.39

 

AMENDED AND RESTATED CREDIT
AGREEMENT

 

DATED AS OF DECEMBER 31, 2007

 

KMG CHEMICALS, INC.,

KMG-BERNUTH, INC., and

KMG ELECTRONIC CHEMICALS, INC.,

 

AS BORROWERS,

 

WACHOVIA BANK, NATIONAL ASSOCIATION,

 

AS AGENT AND COLLATERAL AGENT,

 

and

 

THE LENDERS IDENTIFIED HEREIN

 

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Table of Contents

 

 

 

Page

Article I

 

 

1.

DEFINITIONS AND GENERAL PROVISIONS

1

 

1.1

Intercreditor Agreement

1

 

1.2

Defined Terms

1

 

1.3

Accounting Terms

35

 

1.4

UCC Terms

35

 

1.5

Construction of Terms

35

 

1.6

Computation of Time Periods

35

 

1.7

Computation of ABR Margin, LIBOR Margin, Unused Fee Percentage and Financial
Covenants

35

 

1.8

Reference to Borrowers and Borrower Parties

36

 

1.9

Reference to Lenders and Lender Parties

36

 

1.10

Joint and Several Liability of Borrowers

37

 

1.11

Lender Party Swap Documents

39

 

1.12

Lien Granted For Lender Party Swap Obligations

39

Article II

 

39

2.

THE REVOLVING LOAN

39

 

2.1

General Terms

39

 

2.2

Disbursement of the Revolving Loan

39

 

2.3

The Revolving Notes

40

 

2.4

Interest Rate

40

 

2.5

Payments of Principal and Interest

41

 

2.6

Use of Proceeds of Revolving Loan

41

Article III

 

42

3.

THE SWING LINE LOAN

42

 

3.1

General Terms

42

 

3.2

Disbursement of the Swing Line Loan

42

 

3.3

The Swing Line Note

43

 

3.4

Interest Rate

43

 

3.5

Payments of Principal and Interest

43

 

3.6

Use of Proceeds of Swing Line Loan

44

 

3.7

Failure to Purchase Pro Rata Share of Swing Line Loan Advances

44

Article IV

 

44

4.

LETTERS OF CREDIT

44

 

4.1

Issuance of Letters of Credit

44

 

4.2

Reimbursement and Other Payments

44

 

4.3

Additional Remedies

44

 

4.4

No Liability of Issuing Lender

45

 

4.5

Indemnification

46

 

4.6

Pro Rata Participation, Drawing and Reimbursement With Respect to Letters of
Credit

46

 

4.7

Failure to Purchase Pro Rata Share of Letter of Credit Advances

47

 

4.8

Letter of Credit Reports

47

Article V

 

47

 

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5.

THE TERM LOAN

47

 

5.1

General Terms

47

 

5.2

The Term Notes

47

 

5.3

Interest Rate

48

 

5.4

Payments of Principal and Interest

48

 

5.5

Use of Proceeds of Term Loan

49

Article VI

 

49

6.

PAYMENTS, ADDITIONAL COSTS, ETC.

49

 

6.1

Payment to Agent

49

 

6.2

Late Payments

49

 

6.3

Prepayment

49

 

6.4

Default Rate

50

 

6.5

No Setoff or Deduction

50

 

6.6

Payment on Non-Business Day; Payment Computations

50

 

6.7

Indemnification

50

 

6.8

360-Day Year

51

 

6.9

No Requirement to Actually Obtain Funds

51

 

6.10

Usury Limitation

51

 

6.11

Ratable Sharing

51

Article VII

 

52

7.

CONDITIONS PRECEDENT

52

 

7.1

Documents Required for the Closing

52

 

7.2

Certain Events Required for Closing and for all Advances

54

 

7.3

Legal Matters

55

 

7.4

Election to Make Advances Prior to Satisfaction of Conditions Precedent

55

Article VIII

 

56

8.

COLLATERAL SECURITY

56

 

8.1

Grant of Lien

56

 

8.2

Maintenance of Lien

56

Article IX

 

56

9.

REPRESENTATIONS AND WARRANTIES.

56

 

9.1

Existence

57

 

9.2

Authority

57

 

9.3

Equity Owners and Equity Agreements

57

 

9.4

Name

57

 

9.5

Material Contracts

57

 

9.6

Consents or Approvals

57

 

9.7

Violations or Actions Pending

58

 

9.8

Affiliates

58

 

9.9

Existing Indebtedness

58

 

9.10

Defaults Under Material Contracts

58

 

9.11

Tax Returns

58

 

9.12

Financial Statements

59

 

9.13

Good and Marketable Title

59

 

9.14

Real Property Locations

59

 

9.15

Solvency

59

 

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9.16

ERISA

59

 

9.17

Priority of Liens

59

 

9.18

Patents, Copyrights, Etc.

59

 

9.19

Accuracy of Documents

60

 

9.20

Environmental Matters

60

 

9.21

Condemnation

60

 

9.22

Assigned Agreements

60

 

9.23

Full Disclosure

60

 

9.24

Regulated Industries

61

 

9.25

Insurance

61

 

9.26

Anti-Terrorism Laws

61

 

9.27

Securities Laws

62

 

9.28

Continuing Effectiveness

62

Article X

 

62

10.

BORROWER’S COVENANTS

62

 

10.1

Affirmative Covenants

62

 

10.2

Negative Covenants

66

 

10.3

Financial Covenants

68

 

10.4

Insurance and Insurance Proceeds

69

 

10.5

Borrower’s General Covenants and Agreements Pertaining to the Collateral

70

 

10.6

Collection of Accounts; Segregation of Proceeds, Etc.

71

 

10.7

Collection Methods

72

 

10.8

Verification of Accounts

72

 

10.9

Notice Regarding Disputed Accounts

72

 

10.10

Records, Schedules and Assignments

72

 

10.11

Visitation

72

 

10.12

Use of Tangible Property

73

 

10.13

Collateral Evidenced by Instruments or Documents

73

 

10.14

Maintaining Bank Accounts

73

 

10.15

Filing Fees and Taxes

74

 

10.16

Assigned Agreements

74

 

10.17

Air Products APA Documents

74

 

10.18

Underlying Documentation

74

 

10.19

Further Assurances

74

 

10.20

Post-Closing Matters

75

Article XI

 

75

11.

DEFAULT

75

 

11.1

Events of Default

75

 

11.2

No Advances After Default

77

 

11.3

Acceleration

78

 

11.4

General Remedies

78

 

11.5

Agent’s Additional Rights and Remedies

78

 

11.6

Right of Set-Off

81

 

11.7

No Limitation on Rights and Remedies

81

 

11.8

Repossession of the Collateral; Care and Custody of the Collateral, Etc.

82

 

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11.9

Application of Proceeds

82

 

11.10

Attorney-in-Fact

83

 

11.11

Default Costs

84

Article XII

 

84

12.

THE AGENT

84

 

12.1

Authorization and Action

84

 

12.2

Agent’s Notices, Etc.

86

 

12.3

Agent’s Reliance, Etc.

86

 

12.4

No Reliance on Agent’s Customer Identification Program

87

 

12.5

Wachovia and Affiliates

87

 

12.6

Lender Credit Decision

87

 

12.7

Indemnification

87

 

12.8

Successor Agent

88

 

12.9

No Third Party Beneficiary

88

Article XIII

 

89

13.

MISCELLANEOUS

89

 

13.1

Termination of Collateral Agent’s Lien

89

 

13.2

Construction

89

 

13.3

Indemnity

90

 

13.4

Lender Party’s Consent

90

 

13.5

Enforcement and Waiver by Lender Party

90

 

13.6

No Representation, Assumption, or Duty

90

 

13.7

Expenses of Lender Parties

90

 

13.8

Attorneys’ Fees

90

 

13.9

Exclusiveness

91

 

13.10

WAIVER OF PUNITIVE DAMAGES

91

 

13.11

Waiver and Release by Borrower

91

 

13.12

Limitation on Waiver of Notice, Etc.

91

 

13.13

Additional Costs

92

 

13.14

Illegality and Impossibility

92

 

13.15

Assignments and Participations

92

 

13.16

Binding Effect, Assignment

94

 

13.17

Entire Agreement, Amendments

95

 

13.18

Severability

95

 

13.19

Headings

95

 

13.20

Counterparts

95

 

13.21

Seal

95

Article XIV

 

95

14.

SUBMISSION TO JURISDICTION, GOVERNING LAW AND NOTICES

95

 

14.1

Notices

95

 

14.2

Governing Law

97

 

14.3

SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL, ETC.

97

EXHIBIT A  FORM OF ASSIGNMENT AND ACCEPTANCE

 

EXHIBIT B  FORM OF COLLATERAL REPORT

 

EXHIBIT C  FORM OF COMPLIANCE CERTIFICATE

 

EXHIBIT D  LENDERS' CREDIT PERCENTAGES

 

 

iv

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EXHIBIT E FORM OF NOTICE OF BORROWING

 

EXHIBIT F FORM OF NOTICE OF CONVERSION/CONTINUATION

 

EXHIBIT G FORM OF NOTICE OF FUNDING

 

EXHIBIT H PERMITTED LIENS

 

SCHEDULE 7.2(F)  LITIGATION

 

SCHEDULE 9.3  LIST OF EQUITY OWNERS

 

SCHEDULE 9.4  LIST OF NAMES USED BY BORROWERS AND PERSONS  ACQUIRED IN LAST SIX
YEARS

 

SCHEDULE 9.5  MATERIAL CONTRACTS

 

SCHEDULE 9.8  AFFILIATES

 

SCHEDULE 9.14 LISTING OF REAL PROPERTY

 

SCHEDULE 9.18 INTELLECTUAL PROPERTY

 

SCHEDULE 9.20  ENVIRONMENTAL MATTERS

 

SCHEDULE 10.3(E)  LISTING OF AGREEMENTS CURRENTLY IN EFFECT WITH AFFILIATES AND
PERMITTED POST-CLOSING

 

SCHEDULE 10.20  POST-CLOSING MATTERS

 

 

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AMENDED AND RESTATED CREDIT AGREEMENT

 

THIS AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”) dated as of
December 31, 2007, is made by and among KMG CHEMICALS, INC., a Texas corporation
(“KMG Chemicals”), KMG-BERNUTH, INC., a Delaware corporation (“KMG-Bernuth”),
KMG ELECTRONIC CHEMICALS, INC., a Texas corporation (“KMG ECI”) (KMG Chemicals,
KMG-Bernuth and KMG ECI hereinafter referred to as the “Borrowers”), WACHOVIA
BANK, NATIONAL ASSOCIATION, a national banking association, as Agent (the
“Agent”) and as Collateral Agent (the “Collateral Agent”), those lenders
executing this Agreement as Lenders, and such other lenders as may become a
party hereto (collectively, the “Lenders”).  As used herein, capitalized words
and phrases shall have the meanings ascribed thereto in Section 1.2 of this
Agreement.

 

W I T N E S S E T H:

 

WHEREAS, pursuant to the Existing Credit Agreement, Wachovia has previously
extended certain credit to KMG Chemicals and KMG-Bernuth; and

 

WHEREAS, Borrowers have requested that Lenders extend and continue to extend
certain credit to Borrowers, and Lenders are willing to do so on the condition
that, among other things, Borrowers amend and restate the terms of the Existing
Credit Agreement pursuant to this Agreement; and

 

WHEREAS, subject to the terms and conditions of this Agreement, Lenders have
agreed to extend to Borrowers (i) a revolving loan of up to $35,000,000.00 (with
a sub-limit for standby/trade letters of credit in the amount of $10,000,000.00
and a sub-limit for a swing line loan of up to $5,000,000.00); and (ii) a term
loan of up to $35,000,000.00.

 

NOW, THEREFORE, in consideration of the promises herein contained, and each
intending to be legally bound hereby, the parties hereto agree that the Existing
Credit Agreement is hereby amended in its entirety as follows:

 

ARTICLE I

 

1.             DEFINITIONS AND GENERAL PROVISIONS.

 

1.1           INTERCREDITOR AGREEMENT.  LENDER PARTIES ACKNOWLEDGE THAT
CONCURRENTLY WITH THE EXECUTION OF THIS AGREEMENT, AGENT IS ENTERING INTO THE
INTERCREDITOR AGREEMENT WHICH PROVIDES FOR, AMONG OTHER THINGS, THE AGENT ACTING
AS COLLATERAL AGENT UNDER THE INTERCREDITOR AGREEMENT, AND AGREE THAT BY VIRTUE
OF THEIR EXECUTION OF THIS AGREEMENT, LENDER PARTIES AUTHORIZE AGENT TO ENTER
INTO THE INTERCREDITOR AGREEMENT.  LENDER PARTIES AGREE THAT SO LONG AS THE
INTERCREDITOR AGREEMENT REMAINS IN EFFECT, ANY REFERENCE HEREIN OR IN ANY OTHER
LOAN DOCUMENT TO THE COLLATERAL AGENT SHALL MEAN AGENT ACTING IN ITS CAPACITY AS
COLLATERAL AGENT, AND UPON TERMINATION OF THE INTERCREDITOR AGREEMENT, ANY
REFERENCE HEREIN OR IN ANY OTHER LOAN DOCUMENT TO COLLATERAL AGENT SHALL MEAN
AGENT HEREUNDER.

 

1.2           DEFINED TERMS.  AS USED HEREIN, THE FOLLOWING TERMS SHALL HAVE THE
MEANINGS SET FORTH BELOW (SUCH MEANINGS TO BE EQUALLY APPLICABLE TO THE SINGULAR
AND PLURAL FORMS THEREOF):

 

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“ABR RATE BORROWING” MEANS A BORROWING BEARING INTEREST BASED AT A RATE
DETERMINED BY REFERENCE TO THE ABR RATE.

 

“ABR RATE” MEANS THE HIGHER OF (I) THE RATE OF INTEREST PUBLICLY ANNOUNCED BY
WACHOVIA AS ITS “PRIME RATE”, SUBJECT TO EACH INCREASE OR DECREASE IN SUCH PRIME
RATE, EFFECTIVE AS OF THE FIRST DAY OF THE MONTH AFTER ANY SUCH CHANGE OCCURS,
OR (II) THE FEDERAL FUNDS EFFECTIVE RATE FROM TIME TO TIME PLUS ONE-HALF OF ONE
PERCENT (0.50%).

 

“ABR MARGIN” MEANS (I) UNTIL THE DELIVERY OF THE FIRST COMPLIANCE CERTIFICATE
REQUIRED HEREUNDER AND THE ADJUSTMENT OF THE ABR MARGIN AS PROVIDED HEREIN, ZERO
PERCENT (0.00%), AND (II) THEREAFTER, A PERCENTAGE BASED UPON THE RATIO OF
FUNDED DEBT TO EBITDA OF THE BORROWER CONSOLIDATED GROUP, AS FOLLOWS:

 

Ratio of Funded Debt to EBITDA

 

ABR Margin

 

 

 

 

 

Equal to or greater than 3.0 to 1.0

 

0.75

%

Equal to or greater than 2.5 to 1.0, but less than 3.0 to 1.0

 

0.50

%

Equal to or greater than 2.0 to 1.0, but less than 2.5 to 1.0

 

0.25

%

Equal to or greater than 1.5 to 1.0, but less than 2.0 to 1.0

 

0.00

%

Less than 1.5 to 1.0

 

-0.25

%

 

“ACQUISITION” MEANS ANY ACQUISITION (WHETHER IN A SINGLE TRANSACTION OR SERIES
OF RELATED TRANSACTIONS) OF (I) ANY GOING BUSINESS, OR ALL OR SUBSTANTIALLY ALL
OF THE ASSETS OF ANY PERSON, WHETHER THROUGH PURCHASE, MERGER OR OTHERWISE; OR
(II) EQUITY INTERESTS OF ANY PERSON OF FIVE PERCENT (5%) OR MORE OF THE EQUITY
INTERESTS OR VOTING POWER OF SUCH PERSON.

 

“ADJUSTED ABR RATE” MEANS AN INTEREST RATE EQUAL TO THE SUM OF (I) THE ABR RATE,
PLUS (II) THE ABR MARGIN.

 

“ADJUSTED LIBOR MARKET INDEX RATE” MEANS AN INTEREST RATE EQUAL TO THE SUM OF
(I) THE LIBOR MARKET INDEX RATE, PLUS (II) THE LIBOR MARGIN.

 

“ADJUSTED LIBOR RATE” MEANS, FOR EACH RESPECTIVE LIBOR RATE INTEREST PERIOD, AN
INTEREST RATE EQUAL TO THE SUM OF (I) THE APPLICABLE LIBOR RATE, PLUS (II) THE
LIBOR MARGIN.

 

“ADVANCE” MEANS EACH LOAN OF MONEY OR CREDIT MADE OR EXTENDED TO OR FOR THE
BENEFIT OF BORROWER BY ANY LENDER PARTY PURSUANT TO THIS AGREEMENT.

 

“AFFILIATE” MEANS, WITH RESPECT TO ANY APPLICABLE PERSON, (A) ANY OFFICERS OR
DIRECTORS OF SUCH PERSON, (B) ANY SUBSIDIARY OF SUCH PERSON, OR (C) ANY OTHER
PERSON THAT HAS A RELATIONSHIP WITH THE APPLICABLE PERSON WHEREBY EITHER OF SUCH
PERSONS DIRECTLY OR INDIRECTLY CONTROLS OR IS CONTROLLED BY OR IS UNDER COMMON
CONTROL WITH THE OTHER OF SUCH PERSONS.  THE TERM “CONTROL” MEANS THE
POSSESSION, DIRECTLY OR INDIRECTLY, OF THE POWER, WHETHER OR NOT EXERCISED, TO
DIRECT OR CAUSE THE DIRECTION OF THE MANAGEMENT OR POLICIES OF ANY PERSON,
WHETHER THROUGH OWNERSHIP OF VOTING SECURITIES, BY CONTRACT OR OTHERWISE.

 

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“AGENT” MEANS WACHOVIA, IN ITS CAPACITY AS AGENT HEREUNDER, ITS SUCCESSORS AND
ASSIGNS, AND UNLESS THE CONTEXT MAY CLEARLY REQUIRE TO THE CONTRARY, ANY
REFERENCE TO “AGENT” IN ANY LOAN DOCUMENT SHALL MEAN THE AGENT IN ITS CAPACITY
AS THE AGENT FOR THE LENDERS.

 

“AGENT’S ACCOUNT” MEANS THE ACCOUNT OF AGENT AS ESTABLISHED PURSUANT TO THE
TERMS OF THIS AGREEMENT.

 

“AGREEMENT” MEANS THIS AMENDED AND RESTATED CREDIT AGREEMENT, AS AMENDED OR
SUPPLEMENTED FROM TIME TO TIME.

 

“AIR PRODUCTS APA” MEANS THAT CERTAIN ASSET PURCHASE AGREEMENT DATED AS OF
OCTOBER 19, 2007 BY AND BETWEEN AIR PRODUCTS AND CHEMICALS, INC. AND KMG
CHEMICALS.

 

“Air Products APA Documents” means the Air Products APA and the other documents
and instruments executed by or in favor of any Member of the Borrower
Consolidated Group in connection therewith.

 

“ALTA” means the American Land Title Association.

 

“AMORTIZATION EXPENSE” MEANS THE AMORTIZATION EXPENSE OF AN APPLICABLE PERSON
FOR THE APPLICABLE PERIOD (TO THE EXTENT INCLUDED IN THE COMPUTATION OF NET
INCOME), ACCORDING TO GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.

 

“ANNUALIZED ROLLING PERIOD” MEANS THE PERIOD FROM THE DATE ONE YEAR PRIOR TO THE
APPLICABLE DATE THROUGH THE APPLICABLE DATE.

 

“ANTI-TERRORISM LAWS” MEANS ANY LAWS RELATING TO TERRORISM OR MONEY LAUNDERING,
INCLUDING EXECUTIVE ORDER NO. 13224 AND THE USA PATRIOT ACT.

 

“ASSET DISPOSITION” MEANS ANY SALE, ASSIGNMENT, TRANSFER OR OTHER DISPOSITION OF
ANY ASSETS, BUSINESS UNITS OR OTHER PROPERTIES (INCLUDING ANY INTERESTS IN
PROPERTY OR SECURITIES), EXCLUDING (I) SALES OF INVENTORY IN THE ORDINARY COURSE
OF BUSINESS, AND (II) THE SALE OR EXCHANGE OF USED OR OBSOLETE EQUIPMENT TO THE
EXTENT (X) THE PROCEEDS OF SUCH SALE ARE APPLIED TOWARDS, OR SUCH EQUIPMENT IS
EXCHANGED FOR, SIMILAR REPLACEMENT EQUIPMENT, OR (Y) SUCH EQUIPMENT IS NO LONGER
USEFUL FOR THE OPERATIONS IN THE ORDINARY COURSE OF BUSINESS.

 

“ASSIGNED AGREEMENTS” MEANS ALL LEASES, CONTRACTS, AGREEMENTS, DOCUMENTS,
INSTRUMENTS AND CHATTEL PAPER INCLUDED IN THE COLLATERAL.

 

“Assigned Leases” means all leases presently existing or hereafter made, whether
written or verbal, or any letting of, or agreement for the use or occupancy of,
any part of the Mortgaged Property, and each modification, extension, renewal
and guarantee thereof, including the Rents.

 

“ASSIGNMENT AND ACCEPTANCE” MEANS AN ASSIGNMENT AND ACCEPTANCE ENTERED INTO BY A
LENDER AND AN ELIGIBLE ASSIGNEE, AND ACCEPTED BY AGENT, IN ACCORDANCE WITH
SECTION 13.15 AND IN SUBSTANTIALLY THE FORM OF EXHIBIT “A” HERETO.

 

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“ASSIGNMENT OF CLAIMS ACT” MEANS THE ASSIGNMENT OF CLAIMS ACT, AS AMENDED (31
U.S.C. SECTIONS 3727 ET. SEQ. AND 41 U.S.C. SECTIONS 15 ET. SEQ.).

 

“ATTORNEYS’ FEES” MEANS ATTORNEYS’ FEES ACTUALLY INCURRED AT ORDINARY AND
CUSTOMARY RATES.

 

“AVAILABLE AMOUNT” OF ANY LETTER OF CREDIT MEANS, AT ANY TIME, THE MAXIMUM
AMOUNT AVAILABLE TO BE DRAWN UNDER SUCH LETTER OF CREDIT AT SUCH TIME.

 

“BANKRUPTCY LAW” MEANS TITLE 11, U.S. CODE, OR ANY SIMILAR LAWS OF ANY
JURISDICTION FOR THE RELIEF OF DEBTORS, AND “BANKRUPTCY” MEANS THE COMMENCEMENT
OF ANY CASE OR OTHER ACTION FOR RELIEF UNDER BANKRUPTCY LAW.

 

“BORROWER CONSOLIDATED GROUP” MEANS BORROWERS, KMEX, KMG ITALIA, AND ANY OTHER
PERSON WHO BECOMES A BORROWER HEREUNDER (EACH REFERRED TO SINGULARLY AS A
“MEMBER OF THE BORROWER CONSOLIDATED GROUP”).

 

“BORROWER PARTIES” MEANS BORROWERS AND ANY OTHER PERSON THAT HEREAFTER BECOMES A
PARTY TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY LENDER PARTY SWAP
DOCUMENT, AND WHICH PERSON IS RESPONSIBLE IN WHOLE OR IN PART FOR ANY OF THE
CREDIT AGREEMENT OBLIGATIONS.

 

“BORROWERS” MEANS KMG CHEMICALS, KMG-BERNUTH AND KMG ECI.

 

“BORROWER’S INTEREST” MEANS ALL RIGHT, TITLE AND INTEREST OF BORROWER OF
WHATEVER KIND, NATURE OR DESCRIPTION.

 

“BORROWER’S REPRESENTATIVES” MEANS THE PRESIDENT, CHIEF EXECUTIVE OFFICER, CHIEF
FINANCIAL OFFICER, AND CONTROLLER OF BORROWER, AND ANY OTHER PERSON DESIGNATED
BY BORROWER AS BORROWER’S REPRESENTATIVES UNDER THIS AGREEMENT.

 

“BORROWING” MEANS ANY ABR RATE BORROWING, LIBOR MARKET INDEX RATE BORROWING, OR
LIBOR RATE BORROWING.

 

“BORROWING BASE” MEANS, AT ANY TIME, THE AMOUNT COMPUTED ON THE COLLATERAL
REPORT MOST RECENTLY DELIVERED TO, AND ACCEPTED BY, BANK IN ACCORDANCE WITH THIS
AGREEMENT AND EQUAL TO THE AGGREGATE OF:

 

(A)          eighty percent (80%) of Eligible Accounts, plus

 

(B)           fifty percent (50%) of Eligible Inventory (but not more than
$18,000,000.00).

 

“BUSINESS DAY” MEANS ANY DAY OTHER THAN A SATURDAY, A SUNDAY, A LEGAL HOLIDAY OR
A DAY ON WHICH BANKING INSTITUTIONS ARE AUTHORIZED OR REQUIRED BY LAW OR OTHER
GOVERNMENTAL ACTION TO CLOSE IN CHARLOTTE, NORTH CAROLINA OR NEW YORK, NEW YORK;
PROVIDED THAT IN THE CASE OF LIBOR RATE BORROWINGS SUCH DAY IS ALSO A DAY ON
WHICH DEALINGS BETWEEN BANKS ARE CARRIED ON IN U.S. DOLLAR DEPOSITS IN THE
LONDON INTERBANK MARKET.

 

“CAPITAL EXPENDITURES” MEANS THE SUM OF (I) ALL EXPENDITURES MADE BY A PERSON,
DIRECTLY OR INDIRECTLY FOR EQUIPMENT, FIXED ASSETS, REAL PROPERTY OR
IMPROVEMENTS, OR FOR REPLACEMENTS OR SUBSTITUTIONS THEREFORE OR ADDITIONS
THERETO, THAT SHOULD BE, IN ACCORDANCE WITH GENERALLY

 

4

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ACCEPTED ACCOUNTING PRINCIPLES, REFLECTED AS ADDITIONS TO PROPERTY, PLANT OR
EQUIPMENT ON A BALANCE SHEET OF SUCH PERSON OR WHICH HAVE A USEFUL LIFE OF MORE
THAN ONE YEAR PLUS (II) THE AGGREGATE PRINCIPAL AMOUNT OF ALL INDEBTEDNESS
(INCLUDING CAPITALIZED LEASES) ASSUMED OR INCURRED IN CONNECTION WITH ANY SUCH
EXPENDITURES.

 

“CAPITALIZED LEASE” MEANS A LEASE THAT IS REQUIRED TO BE CAPITALIZED FOR
FINANCIAL REPORTING PURPOSES IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES.

 

“CASH COLLATERAL ACCOUNT” MEANS THE SPECIAL CASH COLLATERAL ACCOUNT ESTABLISHED
PURSUANT TO SECTION 4.3 OF THIS AGREEMENT.

 

“CASH MANAGEMENT AGREEMENT” MEANS ANY AND ALL CASH MANAGEMENT OR SIMILAR
AGREEMENTS ENTERED INTO OR IN EFFECT BETWEEN BORROWER AND AN APPLICABLE LENDER
(AND APPROVED BY AGENT) DURING THE TERM OF THIS AGREEMENT.

 

“CASUALTY OR CONDEMNATION EVENT” MEANS, WITH RESPECT TO ANY PROPERTY OF ANY
MEMBER OF THE BORROWER CONSOLIDATED GROUP, ANY LOSS OF, DAMAGE TO OR
CONDEMNATION OR OTHER TAKING OF, SUCH PROPERTY FOR WHICH ANY MEMBER OF THE
BORROWER CONSOLIDATED GROUP IS ENTITLED TO RECEIVE, OR RECEIVES, INSURANCE
PROCEEDS, CONDEMNATION PROCEEDS OR OTHER SIMILAR PROCEEDS OR AWARDS.

 

“CHANGE IN CONTROL” MEANS AN EVENT OR SERIES OF EVENTS BY WHICH (A) (I) ANY
PERSON OR GROUP OF PERSONS ACTING IN CONCERT OR OTHER GROUP SHALL, AS A RESULT
OF A TENDER OR EXCHANGE OFFER, OPEN MARKET PURCHASES, PRIVATELY NEGOTIATED
PURCHASES OR OTHERWISE, HAVE BECOME, AFTER THE DATE HEREOF, THE “BENEFICIAL
OWNER” (WITHIN THE MEANING OF SUCH TERM UNDER RULE 13D-3 UNDER THE EXCHANGE ACT)
OF EQUITY INTERESTS OF BORROWER REPRESENTING VOTING POWER HAVING THE RIGHT TO
ELECT AT LEAST 50% OF THE MEMBERS OF THE GOVERNING BODY OF BORROWER; OR (II) THE
GOVERNING BODY OF KMG CHEMICALS SHALL CEASE TO CONSIST OF A MAJORITY OF THE
INDIVIDUALS WHO CONSTITUTED THE GOVERNING BODY OF KMG CHEMICALS AS OF THE DATE
HEREOF OR WHO SHALL HAVE BECOME A MEMBER THEREOF SUBSEQUENT TO THE DATE HEREOF
AFTER HAVING BEEN NOMINATED, OR OTHERWISE APPROVED IN WRITING, BY AT LEAST A
MAJORITY OF INDIVIDUALS WHO CONSTITUTE THE GOVERNING BODY OF KMG CHEMICALS AS OF
THE DATE HEREOF; OR (B) BORROWER SHALL CEASE TO OWN AT LEAST 99% OF THE EQUITY
INTERESTS AND VOTING POWER OF KMEX AND KMG ITALIA.

 

“CLOSING” MEANS THE TIME AND PLACE OF ACTUAL EXECUTION AND DELIVERY OF THIS
AGREEMENT, THE NOTES, AND EXCEPT AS WAIVED BY AGENT, THE OTHER DOCUMENTS,
INSTRUMENTS, AND THINGS REQUIRED BY SECTION 7.1 HEREOF.

 

“CLOSING BALANCE SHEET” MEANS AN UNAUDITED BALANCE SHEET OF THE BORROWER
CONSOLIDATED GROUP DATED AS OF THE TIME IMMEDIATELY FOLLOWING THE CLOSING, SUCH
BALANCE SHEET TO BE CALCULATED BASED UPON THE MOST RECENT FINANCIAL STATEMENTS
AVAILABLE TO THE BORROWER, BUT ON A PRO-FORMA BASIS AFTER TAKING INTO ACCOUNT
THE TRANSACTIONS THAT ARE TO OCCUR ON THE DATE OF CLOSING.

 

“CLOSING CERTIFICATES” MEANS CERTIFICATES OF EVEN DATE HEREWITH, SIGNED BY A
DULY AUTHORIZED REPRESENTATIVE OF EACH BORROWER.

 

“COLLATERAL” MEANS ALL OF THE ASSETS OF BORROWERS OF EVERY KIND, NATURE AND
DESCRIPTION, WHEREVER LOCATED, WHETHER NOW OWNED OR HEREAFTER ACQUIRED (OTHER
THAN THE EXCLUDED COLLATERAL AND INTERESTS IN ANY LENDER PARTY SWAP DOCUMENTS),
AND INCLUDING THE FOLLOWING:

 

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(A)          ALL AMOUNTS THAT MAY BE OWING FROM TIME TO TIME BY ANY LENDER PARTY
TO BORROWER IN ANY CAPACITY, INCLUDING, WITHOUT LIMITATION, ANY BALANCE OR SHARE
BELONGING TO BORROWER, OF ANY DEPOSIT ACCOUNTS OR OTHER ACCOUNT WITH ANY LENDER
PARTY;

 

(B)           THE PLEDGED COLLATERAL;

 

(C)           THE MORTGAGED PROPERTY AND THE MORTGAGED PROPERTY DOCUMENTS;

 

(D)          ALL OF BORROWERS’ ASSETS WHICH ARE OR MAY BE SUBJECT TO ARTICLE 9
OF THE UNIFORM COMMERCIAL CODE, TOGETHER WITH ALL REPLACEMENTS THEREFORE,
ADDITIONS AND ACCESSIONS THERETO, AND PROCEEDS (INCLUDING, BUT WITHOUT
LIMITATION, INSURANCE PROCEEDS) AND PRODUCTS THEREOF, INCLUDING, WITHOUT
LIMITATION, THE FOLLOWING:

 

(1)           ACCOUNTS;

 

(2)           CHATTEL PAPER;

 

(3)           COMMERCIAL TORT CLAIMS;

 

(4)           DEPOSIT ACCOUNTS;

 

(5)           DOCUMENTS;

 

(6)           EQUIPMENT;

 

(7)           GENERAL INTANGIBLES;

 

(8)           GOODS;

 

(9)           INSTRUMENTS;

 

(10)         INTELLECTUAL PROPERTY RIGHTS;

 

(11)         INVENTORY;

 

(12)         INVESTMENT PROPERTY;

 

(13)         LETTER-OF-CREDIT RIGHTS;

 

(14)         PAYMENT INTANGIBLES;

 

(15)         SOFTWARE;

 

(16)         SUPPORTING OBLIGATIONS;

 

(17)         RIGHTS AS SELLER OF GOODS AND RIGHTS TO RETURNED OR REPOSSESSED
GOODS;

 

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(18)         ALL EXISTING AND FUTURE LEASES AND USE AGREEMENTS OF PERSONAL
PROPERTY ENTERED INTO BY BORROWER AS LESSOR WITH OTHER PERSONS AS LESSEES,
INCLUDING WITHOUT LIMITATION THE RIGHT TO RECEIVE AND COLLECT ALL RENTALS AND
OTHER MONIES, INCLUDING SECURITY DEPOSITS, AT ANY TIME PAYABLE UNDER SUCH LEASES
AND AGREEMENTS;

 

(19)         ANY EXISTING AND FUTURE LEASES AND USE AGREEMENTS OF PERSONAL
PROPERTY ENTERED INTO BY BORROWER AS LESSEE WITH OTHER PERSONS AS LESSORS,
INCLUDING WITHOUT LIMITATION THE LEASEHOLD INTEREST OF BORROWER IN SUCH
PROPERTY, AND ALL OPTIONS TO PURCHASE SUCH PROPERTY OR TO EXTEND ANY SUCH LEASE
OR AGREEMENT;

 

(20)         FIXTURES;

 

(21)         ALL MONEYS OF BORROWER AND ALL BANK ACCOUNTS, DEPOSIT ACCOUNTS,
LOCK BOXES AND OTHER ACCOUNTS IN WHICH SUCH MONEYS MAY AT ANY TIME BE ON DEPOSIT
OR HELD AND ALL INVESTMENTS OR SECURITIES IN WHICH SUCH MONEYS MAY AT ANY TIME
BE INVESTED AND ALL CERTIFICATES, INSTRUMENTS AND DOCUMENTS FROM TIME TO TIME
REPRESENTING OR EVIDENCING ANY OF THE SAME;

 

(22)         ALL CLAIMS OF BORROWER IN ANY PENDING LITIGATION AND/OR CLAIMS FOR
ANY INSURANCE PROCEEDS;

 

(23)         ALL RECORDS PERTAINING TO ANY OF THE COLLATERAL;

 

(E)           ANY AND ALL OTHER ASSETS OF ANY BORROWER PARTY OF ANY KIND,
NATURE, OR DESCRIPTION AND WHICH ARE INTENDED TO SERVE AS COLLATERAL FOR THE
LOANS UNDER ANY ONE OR MORE OF THE SECURITY DOCUMENTS; AND

 

(F)           ALL INTEREST, DIVIDENDS, PROCEEDS, PRODUCTS, RENTS, ROYALTIES,
ISSUES AND PROFITS OF ANY OF THE PROPERTY DESCRIBED ABOVE, INCLUDING, WITHOUT
LIMITATION, ALL MONIES DUE AND TO BECOME DUE WITH RESPECT TO SUCH PROPERTY,
TOGETHER WITH ALL RIGHT TO RECEIVE THE SAME, AND ALL NOTES, CERTIFICATES OF
DEPOSIT, CHECKS AND OTHER INSTRUMENTS AND PROPERTY FROM TIME TO TIME DELIVERED
TO OR OTHERWISE POSSESSED BY LENDER PARTY FOR OR ON BEHALF OF BORROWER PARTY IN
SUBSTITUTION FOR OR IN ADDITION TO ANY OF SAID PROPERTY.

 

“COLLATERAL AGENT” MEANS WACHOVIA, IN ITS CAPACITY AS COLLATERAL AGENT UNDER THE
INTERCREDITOR AGREEMENT, ITS SUCCESSORS AND ASSIGNS, AND UNLESS THE CONTEXT MAY
CLEARLY REQUIRE TO THE CONTRARY, ANY REFERENCE TO “COLLATERAL AGENT” IN ANY LOAN
DOCUMENT SHALL MEAN THE COLLATERAL AGENT IN ITS CAPACITY AS THE COLLATERAL
AGENT.

 

“COLLATERAL AGENT’S LIEN” MEANS THE LIENS GRANTED TO COLLATERAL AGENT BY ANY
BORROWER PARTY PURSUANT TO THIS AGREEMENT AND THE OTHER SECURITY DOCUMENTS.

 

“COLLATERAL REPORT” MEANS A FULLY COMPLETED AND DULY EXECUTED COLLATERAL REPORT
AND BORROWING BASE CERTIFICATE DELIVERED BY BORROWERS TO AGENT AND IN THE FORM
ATTACHED HERETO AS EXHIBIT “B”.

 

“COMMITMENTS” MEANS THE REVOLVING LOAN COMMITMENT, THE SWING LINE LOAN
COMMITMENT, THE TERM LOAN COMMITMENT, AND THE LETTER OF CREDIT COMMITMENT.

 

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“COMPLIANCE CERTIFICATE” MEANS A FULLY COMPLETED AND DULY EXECUTED CERTIFICATE
DELIVERED BY BORROWERS TO AGENT AND IN THE FORM ATTACHED HERETO AS EXHIBIT “C”.

 

“CONSOLIDATED BASIS” MEANS THE CONSOLIDATION OF THE ASSETS, LIABILITIES, INCOME
AND LOSSES, AS APPLICABLE, OF THE BORROWER CONSOLIDATED GROUP; PROVIDED,
HOWEVER, THAT THERE SHALL BE EXCLUDED:

 

(A)          KMEX IF (I) THE GROSS REVENUES OF KMEX ARISING FROM SALES TO ANY
PERSON OTHER THAN BORROWERS FOR THE TRAILING TWELVE (12) MONTHS EXCEEDS
$2,000,000.00, OR (II) THE EQUITY OWNER’S EQUITY, AS REFLECTED ON KMEX’S BALANCE
SHEET, IS MORE THAN $5,000,000.00; AND

 

(B)           KMG ITALIA IF (I) THE EBIDA OF KMG ITALIA EXCEEDS 15% OF THE EBIDA
OF THE BORROWER CONSOLIDATED GROUP (INCLUDING KMG ITALIA), OR (II) THE TANGIBLE
NET WORTH OF KMG ITALIA EXCEEDS 15% OF THE TANGIBLE NET WORTH OF THE BORROWER
CONSOLIDATED GROUP (INCLUDING KMG ITALIA).

 

“CREDIT AGREEMENT OBLIGATIONS” MEANS THE OBLIGATIONS (INCLUDING OBLIGATIONS OF
PERFORMANCE) AND LIABILITIES OF ANY BORROWER PARTY TO ANY LENDER PARTY UNDER THE
LOAN DOCUMENTS OR ANY LENDER PARTY SWAP DOCUMENTS OF EVERY KIND AND DESCRIPTION
WHATSOEVER, DIRECT OR INDIRECT, ABSOLUTE OR CONTINGENT, DUE OR TO BECOME DUE,
NOW EXISTING OR HEREAFTER INCURRED, CONTRACTED OR ARISING, OR ACQUIRED BY ANY
LENDER PARTY FROM ANY SOURCE, JOINT OR SEVERAL, LIQUIDATED OR UNLIQUIDATED,
REGARDLESS OF HOW THEY ARISE OR BY WHAT AGREEMENT OR INSTRUMENT THEY MAY BE
EVIDENCED OR WHETHER THEY ARE EVIDENCED BY ANY AGREEMENT OR INSTRUMENT, AND
WHETHER INCURRED AS MAKER, ENDORSER, SURETY, GUARANTOR, GENERAL PARTNER, DRAWER,
TORT-FEASOR, INDEMNITOR, ACCOUNT PARTY WITH RESPECT TO A LETTER OF CREDIT OR
OTHERWISE, AND ARISING OUT OF OR INCURRED IN CONNECTION WITH THE LOANS (BUT
SPECIFICALLY EXCLUDING THE PRUDENTIAL OBLIGATIONS), AND ANY AND ALL EXTENSIONS
AND RENEWALS OF ANY OF THE SAME, INCLUDING BUT NOT LIMITED TO THE OBLIGATION:

 

(A)          TO PAY THE PRINCIPAL OF AND INTEREST ON THE NOTES IN ACCORDANCE
WITH THE RESPECTIVE TERMS THEREOF OR HEREOF, INCLUDING ANY AND ALL EXTENSIONS,
MODIFICATIONS, AND RENEWALS THEREOF AND SUBSTITUTIONS THEREFORE;

 

(B)           TO PAY, REPAY OR REIMBURSE THE LENDER PARTIES FOR ALL AMOUNTS
OWING HEREUNDER OR UNDER ANY OF THE OTHER LOAN DOCUMENTS, INCLUDING THE
REIMBURSEMENT OBLIGATION AND ALL INDEMNIFIED LOSSES AND DEFAULT COSTS;

 

(C)           TO PAY, REPAY OR REIMBURSE TO LENDER PARTIES THE LENDER PARTY SWAP
OBLIGATIONS; AND

 

(D)          TO REIMBURSE LENDER PARTIES, ON DEMAND, FOR ALL OF LENDER PARTIES’
EXPENSES AND COSTS, INCLUDING ATTORNEYS’ FEES AND EXPENSES OF LENDER PARTIES’
COUNSEL, IN CONNECTION WITH THE PREPARATION, ADMINISTRATION, AMENDMENT,
MODIFICATION, OR ENFORCEMENT OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS,
INCLUDING, WITHOUT LIMITATION, ANY PROCEEDING BROUGHT OR THREATENED TO ENFORCE
PAYMENT OF ANY OF THE OBLIGATIONS REFERRED TO IN THE FOREGOING PARAGRAPHS (A),
(B) AND (C).

 

“CREDIT PERCENTAGE” MEANS, WITH RESPECT TO EACH LENDER, A PERCENTAGE BASED ON A
FRACTION, THE NUMERATOR OF WHICH SHALL BE THE AGGREGATE PRINCIPAL AMOUNT OF
REVOLVING LOAN ADVANCES

 

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AND TERM LOAN ADVANCES OUTSTANDING AT A PARTICULAR TIME AND OWING TO SUCH LENDER
AT SUCH TIME, AND THE DENOMINATOR OF WHICH SHALL BE THE AGGREGATE PRINCIPAL
AMOUNT OF ALL REVOLVING LOAN ADVANCES AND TERM LOAN ADVANCES OUTSTANDING AT SUCH
TIME AND OWING TO ALL THE LENDERS AT SUCH TIME; PROVIDED THAT IN CALCULATING
SUCH PERCENTAGE, THE AGGREGATE PRINCIPAL AMOUNT OF SWING LINE LOAN ADVANCES
OWING TO THE SWING LINE LENDER, THE AVAILABLE AMOUNT OF THE LETTERS OF CREDIT,
AND THE AGGREGATE AMOUNT OF LETTER OF CREDIT ADVANCES OWING TO ISSUING LENDER
SHALL, AT SUCH TIME, BE CONSIDERED TO BE OWED TO THE REVOLVING LOAN LENDERS THAT
PURCHASE (OR ARE OBLIGATED TO PURCHASE) SWING LINE LOAN ADVANCES AND LETTER OF
CREDIT ADVANCES FROM THE SWING LINE LENDER AND ISSUING LENDER UNDER THE TERMS OF
THIS AGREEMENT (THE CREDIT PERCENTAGES OF THE LENDERS AS OF THE DATE HEREOF
BEING AS SET FORTH ON THE ATTACHED EXHIBIT “D”).

 

“CURRENT MATURITIES OF LONG-TERM INDEBTEDNESS” MEANS ALL PAYMENTS IN RESPECT OF
LONG-TERM INDEBTEDNESS THAT ARE REQUIRED TO BE MADE WITHIN ONE YEAR FROM THE
DATE OF DETERMINATION, WHETHER OR NOT THE OBLIGATION TO MAKE SUCH PAYMENTS WOULD
CONSTITUTE A CURRENT LIABILITY OF THE APPLICABLE PERSON UNDER GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES, EXCLUDING, HOWEVER, ANY SUCH PAYMENT REQUIRED TO BE MADE
ON THE ULTIMATE MATURITY DATE OF SUCH INDEBTEDNESS.

 

“DEFAULT” MEANS THE OCCURRENCE OF AN EVENT DESCRIBED IN SECTION 11.1 HEREOF
REGARDLESS OF WHETHER THERE SHALL HAVE OCCURRED ANY PASSAGE OF TIME OR GIVING OF
NOTICE THAT WOULD BE NECESSARY IN ORDER TO CONSTITUTE SUCH EVENT AS AN EVENT OF
DEFAULT.

 

“DEFAULT COSTS” MEANS ALL INDEMNIFIED LOSSES INCURRED BY ANY LENDER PARTY BY
REASON OF A DEFAULT.

 

“DEFAULTING LENDER” MEANS ANY LENDER THAT HAS FAILED TO MAKE ANY ADVANCE OR
PURCHASE ITS PRO RATA SHARE OF ANY SWING LINE LOAN ADVANCE OR LETTER OF CREDIT
ADVANCE AS AND WHEN REQUIRED UNDER THE TERMS OF THIS AGREEMENT.

 

“DEFAULT RATE” MEANS A VARIABLE PER ANNUM RATE OF INTEREST EQUAL TO THE LESSER
OF (1) TWO PERCENT (2%) IN EXCESS OF THE HIGHEST INTEREST RATE OTHERWISE PAYABLE
ON ANY LOAN HEREUNDER, OR (2) THE MAXIMUM RATE ALLOWED BY APPLICABLE LAWS.

 

“DEPOSIT ACCOUNTS” MEANS ALL BANK ACCOUNTS AND OTHER DEPOSIT ACCOUNTS AND LOCK
BOXES INCLUDED IN THE COLLATERAL OR ESTABLISHED FOR THE BENEFIT OF ANY LENDER
PARTY PURSUANT TO THE TERMS OF ANY OF THE LOAN DOCUMENTS.

 

“DEPRECIATION EXPENSE” MEANS THE DEPRECIATION EXPENSE OF AN APPLICABLE PERSON
FOR THE APPLICABLE PERIOD (TO THE EXTENT INCLUDED IN THE COMPUTATION OF NET
INCOME), ACCORDING TO GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.

 

“DIVIDENDS” MEANS DIVIDENDS AND OTHER DISTRIBUTIONS TO THE EQUITY OWNERS OF ANY
APPLICABLE PERSON ON ACCOUNT OF OWING AN EQUITY INTEREST.

 

“EBIDA” MEANS, WITH RESPECT TO AN APPLICABLE PERSON FOR THE APPLICABLE PERIOD,
NET INCOME, PLUS THE SUM OF (WITHOUT DUPLICATION) INTEREST EXPENSE, AMORTIZATION
EXPENSE, DEPRECIATION EXPENSE AND ALL OTHER NON-CASH CHARGES, ALL DETERMINED IN
ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.

 

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“EBITDA” MEANS, WITH RESPECT TO AN APPLICABLE PERSON FOR THE APPLICABLE PERIOD,
NET INCOME, PLUS THE SUM OF (WITHOUT DUPLICATION) INTEREST EXPENSE, INCOME TAX
EXPENSE, AMORTIZATION EXPENSE, DEPRECIATION EXPENSE AND ALL OTHER NON-CASH
CHARGES, ALL DETERMINED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES.

 

“ELIGIBLE ACCOUNT” MEANS, AT ANY TIME, AN ACCOUNT OF BORROWER THAT CONFORMS AND
CONTINUES TO CONFORM TO THE FOLLOWING CONDITIONS:

 

(A)          THE ACCOUNT IS PART OF THE COLLATERAL AND COLLATERAL AGENT’S LIEN
HAS BEEN PERFECTED IN ACCORDANCE WITH APPLICABLE LAWS;

 

(B)           ALL REPRESENTATIONS AND WARRANTIES OF BORROWER CONTAINED IN THE
LOAN DOCUMENTS WITH RESPECT TO SUCH ACCOUNT ARE TRUE AND CORRECT IN ALL MATERIAL
RESPECTS;

 

(C)           THE ACCOUNT AROSE FROM A BONA FIDE OUTRIGHT SALE OF GOODS BY
BORROWER OR FROM SERVICES PERFORMED BY BORROWER IN THE ORDINARY COURSE OF
BUSINESS, AND SUCH GOODS HAVE BEEN SHIPPED TO THE APPROPRIATE ACCOUNT DEBTOR OR
ITS DESIGNEES (OR THE SALE HAS OTHERWISE BEEN CONSUMMATED), OR THE SERVICES HAVE
BEEN FULLY PERFORMED FOR THE APPROPRIATE ACCOUNT DEBTOR;

 

(D)          THE ACCOUNT IS BASED UPON AN ENFORCEABLE ORDER OR CONTRACT, WRITTEN
OR ORAL, FOR GOODS SHIPPED OR HELD FOR SERVICES PERFORMED AND THE SAME WERE
SHIPPED, HELD, OR PERFORMED IN ACCORDANCE WITH SUCH ORDER OR CONTRACT;

 

(E)           THE TITLE OF BORROWER TO THE ACCOUNT IS ABSOLUTE AND IS NOT
SUBJECT TO ANY LIEN EXCEPT COLLATERAL AGENT’S LIEN;

 

(F)           THE AMOUNT SHOWN ON THE BOOKS OF BORROWER AND ON ANY INVOICE OR
STATEMENT DELIVERED TO AGENT IS OWING TO BORROWER, LESS ANY PARTIAL PAYMENT THAT
HAS BEEN MADE THEREON BY ANY PERSON;

 

(G)           THE ACCOUNT SHALL BE ELIGIBLE ONLY TO THE EXTENT THAT IT IS NOT
SUBJECT TO ANY CLAIM OF REDUCTION, COUNTERCLAIM, SET OFF, RECOUPMENT, OR ANY
CLAIM FOR CREDITS, ALLOWANCES, OR ADJUSTMENTS BY THE ACCOUNT DEBTOR BECAUSE OF
RETURN, INFERIOR, OR DAMAGED GOODS OR UNSATISFACTORY SERVICES, OR FOR ANY OTHER
REASON;

 

(H)          THE ACCOUNT DEBTOR HAS NOT RETURNED OR REFUSED TO RETAIN, OR
OTHERWISE NOTIFIED BORROWER OF ANY DISPUTE CONCERNING, OR CLAIMED NONCONFORMITY
OF, ANY OF THE GOODS OR SERVICES FROM THE SALE OF WHICH THE ACCOUNT AROSE;

 

(I)            (I) WITH RESPECT TO ANY ACCOUNT GENERATED FROM OTHER THAN SALES
OF ANIMAL HEALTH PESTICIDES OR AGRICULTURAL CHEMICALS, THE ACCOUNT IS DUE AND
PAYABLE NOT MORE THAN THIRTY (30) DAYS FROM THE DATE OF THE INVOICE THEREFOR AND
IS NOT MORE THAN SIXTY (60) DAYS PAST DUE; AND (II) WITH RESPECT TO ANY ACCOUNT
GENERATED FROM SALES OF ANIMAL HEALTH PESTICIDES OR AGRICULTURAL CHEMICALS, THE
ACCOUNT IS DUE AND PAYABLE NOT MORE THAN NINETY (90) DAYS FROM THE DATE OF THE
INVOICE THEREFOR AND IS NOT MORE THAN SIXTY (60) DAYS PAST DUE.

 

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(J)            THE ACCOUNT DOES NOT ARISE OUT OF A CONTRACT WITH, OR ORDER FROM,
A ACCOUNT DEBTOR THAT, BY ITS TERMS, FORBIDS OR MAKES VOID OR UNENFORCEABLE THE
ASSIGNMENT BY BORROWER TO AGENT OF THE ACCOUNT ARISING WITH RESPECT THERETO;

 

(K)          BORROWER HAS NOT RECEIVED ANY NOTE, TRADE ACCEPTANCE, DRAFT OR
OTHER INSTRUMENT WITH RESPECT TO, OR IN PAYMENT OF, THE ACCOUNT NOR ANY CHATTEL
PAPER WITH RESPECT TO THE GOODS GIVING RISE TO THE ACCOUNT, UNLESS, IF ANY SUCH
INSTRUMENT OR CHATTEL PAPER HAS BEEN RECEIVED, BORROWER IMMEDIATELY NOTIFIES
AGENT AND ENDORSES OR ASSIGNS AND DELIVERS THE SAME TO AGENT;

 

(L)           BORROWER HAS NOT RECEIVED ANY NOTICE OF THE DEATH OF THE ACCOUNT
DEBTOR OR A PARTNER THEREOF; NOR OF THE DISSOLUTION, TERMINATION OF EXISTENCE,
INSOLVENCY, BUSINESS FAILURE, APPOINTMENT OF A RECEIVER FOR ANY PART OF THE
PROPERTY OF, ASSIGNMENT FOR THE BENEFIT OF CREDITORS BY, OR THE FILING OF A
PETITION IN BANKRUPTCY, OR THE COMMENCEMENT OF ANY PROCEEDING UNDER ANY
BANKRUPTCY OR INSOLVENCY LAWS BY OR AGAINST, THE ACCOUNT DEBTOR.  UPON RECEIPT
BY BORROWER OF ANY SUCH NOTICE, IT WILL IMMEDIATELY GIVE AGENT WRITTEN ADVICE
THEREOF;

 

(M)         THE ACCOUNT DEBTOR IS NOT A FOREIGN ENTITY;

 

(N)          THE ACCOUNT DEBTOR IS NOT AN AFFILIATE OF BORROWER;

 

(O)          IF TEN PERCENT (10%) OR MORE OF THE ACCOUNTS FROM THE ACCOUNT
DEBTOR DO NOT QUALIFY AS ELIGIBLE ACCOUNTS HEREUNDER (UNLESS THE FAILURE TO
QUALIFY IS SOLELY BECAUSE OF CLAUSE (P) IMMEDIATELY FOLLOWING), NONE OF SUCH
ACCOUNT DEBTOR’S ACCOUNTS QUALIFY AS ELIGIBLE ACCOUNTS;

 

(P)           TO THE EXTENT THAT THE TOTAL ELIGIBLE ACCOUNTS OF (I) ANY ACCOUNT
DEBTOR OTHER THAN INTEL REPRESENT MORE THAN TEN PERCENT (10%) OF THE ELIGIBLE
ACCOUNTS OF BORROWER AT ANY TIME, OR (II) INTEL REPRESENT MORE THAN TWENTY-FIVE
PERCENT (25%) OF THE ELIGIBLE ACCOUNTS OF BORROWER AT ANY TIME, SUCH EXCESS
SHALL BE DEEMED TO NOT QUALIFY AS ELIGIBLE ACCOUNTS; AND

 

(Q)          AGENT HAS NOT DEEMED SUCH ACCOUNT INELIGIBLE BECAUSE OF UNCERTAINTY
ABOUT THE CREDITWORTHINESS OF THE ACCOUNT DEBTOR OR BECAUSE AGENT OTHERWISE
CONSIDERS THE COLLATERAL VALUE THEREOF TO AGENT TO BE IMPAIRED OR ITS ABILITY TO
REALIZE SUCH VALUE TO BE INSECURE.

 

In the event of any dispute under the foregoing criteria about whether an
Account is or has ceased to be an Eligible Account, the decision of Agent, to be
made in Agent’s discretion, shall control.

 

“ELIGIBLE ASSIGNEE” MEANS (I) A LENDER (OR ANY OTHER PERSON THAT HAS A
RELATIONSHIP WITH THE APPLICABLE LENDER WHEREBY LENDER DIRECTLY OR INDIRECTLY
CONTROLS OR IS CONTROLLED BY OR IS UNDER COMMON CONTROL WITH SUCH OTHER
PERSONS); (II) A COMMERCIAL BANK ORGANIZED UNDER THE LAWS OF THE UNITED STATES,
OR ANY STATE THEREOF, AND HAVING COMBINED CAPITAL AND SURPLUS OF AT LEAST
$250,000,000.00; (III) A SAVINGS AND LOAN ASSOCIATION OR SAVINGS BANK ORGANIZED
UNDER THE LAWS OF THE UNITED STATES, OR ANY STATE THEREOF, AND HAVING COMBINED
CAPITAL AND SURPLUS OF AT LEAST $250,000,000.00; (IV) A FINANCE COMPANY,
INSURANCE COMPANY OR OTHER FINANCIAL INSTITUTION OR FUND (WHETHER A CORPORATION,
PARTNERSHIP, TRUST OR OTHER ENTITY) ORGANIZED UNDER THE LAWS OF THE UNITED
STATES, OR ANY STATE THEREOF, THAT IS ENGAGED IN MAKING, PURCHASING OR OTHERWISE
INVESTING

 

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IN COMMERCIAL LOANS IN THE ORDINARY COURSE OF ITS BUSINESS AND HAVING COMBINED
CAPITAL AND SURPLUS OF AT LEAST $250,000,000.00; AND (V) ANY OTHER PERSON
APPROVED BY AGENT AND BORROWER, SUCH APPROVAL NOT TO BE UNREASONABLY WITHHELD OR
DELAYED PROVIDED THAT BORROWER’S CONSENT SHALL NOT BE REQUIRED DURING THE
CONTINUANCE OF ANY DEFAULT); PROVIDED, HOWEVER, THAT IN NO EVENT SHALL ANY
PERSON CONSTITUTE AN ELIGIBLE ASSIGNEE IF AN ASSIGNMENT TO SUCH PERSON IS
PROHIBITED BY APPLICABLE LAWS.

 

“ELIGIBLE INVENTORY” MEANS THE INVENTORY OF BORROWER WHICH IS EITHER RAW
MATERIALS, FINISHED GOODS OR WORK IN PROCESS, VALUED AT THE LESSER OF COST (AS
ESTABLISHED ON THE FIFO METHOD OF ACCOUNTING) OR FAIR MARKET VALUE, PROVIDED,
HOWEVER, THAT AGENT MAY CONSIDER ANY OF THE FOLLOWING CLASSES OF INVENTORY NOT
TO BE ELIGIBLE INVENTORY:

 

(A)          INVENTORY WHICH IS NOT PART OF THE COLLATERAL, OR WHICH IS PART OF
THE COLLATERAL BUT WITH RESPECT TO WHICH COLLATERAL AGENT’S LIEN HAS NOT BEEN
PERFECTED IN ACCORDANCE WITH APPLICABLE LAWS.

 

(B)           INVENTORY WITH RESPECT TO WHICH ANY REPRESENTATION OR WARRANTY
CONTAINED IN ANY OF THE LOAN DOCUMENTS HAS BEEN BREACHED.

 

(C)           INVENTORY CONSISTING OF “PERISHABLE AGRICULTURAL COMMODITIES”
WITHIN THE MEANING OF THE PERISHABLE AGRICULTURAL COMMODITIES ACT OF 1930, AS
AMENDED, AND THE REGULATIONS THEREUNDER, OR ON WHICH A LIEN HAS ARISEN OR MAY
ARISE IN FAVOR OF AGRICULTURAL PRODUCERS UNDER COMPARABLE STATE OR LOCAL LAWS;

 

(D)          INVENTORY LOCATED ON LEASEHOLDS IF THE VALUE OF INVENTORY AT ANY
PARTICULAR LEASEHOLD LOCATION IS MORE THAN $500,000.00, IF THE LESSOR HAS NOT
ENTERED INTO A CONSENT AND AGREEMENT PROVIDING AGENT WITH THE RIGHT TO RECEIVE
NOTICE OF DEFAULT, THE RIGHT TO REPOSSESS SUCH INVENTORY AT ANY TIME, AND SUCH
OTHER RIGHTS AS MAY BE REQUIRED BY AGENT;

 

(E)           INVENTORY TO WHICH THE TITLE OF BORROWER IS NOT ABSOLUTE, OR WHICH
IS SUBJECT TO ANY PRIOR LIEN, EXCEPT COLLATERAL AGENT’S LIEN;

 

(F)           INVENTORY THAT IS OBSOLETE, UNUSABLE OR OTHERWISE UNAVAILABLE FOR
SALE;

 

(G)           INVENTORY CONSISTING OF PROMOTIONAL, MARKETING, PACKAGING OR
SHIPPING MATERIALS AND SUPPLIES;

 

(H)          INVENTORY THAT FAILS TO MEET, IN ALL MATERIAL RESPECTS, ALL
STANDARDS IMPOSED BY ANY GOVERNMENTAL AGENCY, OR DEPARTMENT OR DIVISION THEREOF,
HAVING REGULATORY AUTHORITY OVER SUCH INVENTORY OR ITS USE AND SALE;

 

(I)            INVENTORY THAT IS SUBJECT TO ANY LICENSING, PATENT, ROYALTY,
TRADEMARK, TRADE NAME OR COPYRIGHT AGREEMENT WITH ANY THIRD PERSON FROM WHOM
BORROWER HAS RECEIVED NOTICE OF A DISPUTE IN RESPECT OF ANY SUCH AGREEMENT;

 

(J)            INVENTORY LOCATED OUTSIDE THE UNITED STATES (EXCEPT AS MAY BE
APPROVED BY AGENT IN ITS DISCRETION);

 

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(K)          INVENTORY WITH A VALUE AT ANY PARTICULAR LOCATION OF MORE THAN
$500,000.00 THAT IS NOT IN THE POSSESSION OF OR UNDER THE SOLE CONTROL OF
BORROWER, UNLESS ALL PERSONS EXERCISING DOMINION OR CONTROL OVER SUCH INVENTORY
SHALL HAVE ENTERED INTO SUCH AGREEMENTS AS MAY BE REQUIRED BY AGENT, INCLUDING
AGREEMENTS PROVIDING FOR THE RIGHT OF AGENT TO REPOSSESS SUCH INVENTORY AT ANY
TIME AND SUCH OTHER RIGHTS AS MAY BE REQUIRED BY AGENT;

 

(L)           INVENTORY IN TRANSIT (UNLESS OTHERWISE DETERMINED TO BE ELIGIBLE
BY AGENT IN ITS DISCRETION AFTER A REQUEST FOR SUCH DETERMINATION FROM
BORROWER); AND

 

(M)         INVENTORY RETURNED OR REPOSSESSED BY ACCOUNT DEBTORS OTHER THAN
INVENTORY THAT IS RESALABLE IN BORROWER’S ORDINARY COURSE OF BUSINESS.

 

Additionally, Agent may exclude from Eligible Inventory all or a proportionate
part of any particular portion of Borrower’s Inventory which Agent deems
ineligible because its market value has declined or because Agent otherwise
considers the collateral value thereof to Agent to be impaired or its ability to
realize such value to be insecure.

 

“ENVIRONMENTAL LAWS” MEANS ALL LAWS OF ANY JURISDICTION RELATING TO THE
GOVERNANCE OR PROTECTION OF THE ENVIRONMENT, INCLUDING WITHOUT LIMITATION, THE
COMPREHENSIVE ENVIRONMENTAL RESPONSE COMPENSATION AND LIABILITY ACT OF 1980
(“CERCLA”), AS AMENDED (42 U.S.C. SECTIONS 9601, ET SEQ.), THE HAZARDOUS
MATERIALS TRANSPORTATION ACT, AS AMENDED (49 U.S.C. SECTIONS 1801, ET SEQ.), THE
RESOURCE CONSERVATION AND RECOVERY ACT (“RCRA”), AS AMENDED (42 U.S.C. SECTIONS
6901, ET SEQ.), THE CLEAN WATER ACT, AS AMENDED (42 U.S.C. SECTIONS 7401, ET
SEQ.), THE TOXIC SUBSTANCES CONTROL ACT, AS AMENDED (15 U.S.C. SECTIONS 2601, ET
SEQ.).

 

“EQUITY AGREEMENTS” MEANS ANY AND ALL AGREEMENTS OF WHATEVER KIND BY, BETWEEN
AND AMONG BORROWER AND THE EQUITY OWNERS OF BORROWER, AND RELATING TO BORROWER’S
EQUITY INTERESTS.

 

“EQUITY INTERESTS” MEANS ANY AND ALL OWNERSHIP OR OTHER EQUITABLE INTERESTS IN
THE APPLICABLE PERSON, INCLUDING ANY INTEREST REPRESENTED BY ANY CAPITAL STOCK,
MEMBERSHIP INTEREST, PARTNERSHIP INTEREST OR SIMILAR INTEREST, BUT SPECIFICALLY
EXCLUDING ANY INTEREST OF ANY PERSON SOLELY AS A CREDITOR OF THE APPLICABLE
PERSON.

 

“EQUITY OWNER” MEANS ANY PERSON OWNING AN EQUITY INTEREST.

 

“EQUITY OWNERS’ EQUITY” MEANS, AT ANY TIME, THE SUM OF THE FOLLOWING ACCOUNTS
SET FORTH IN A BALANCE SHEET OF AN APPLICABLE PERSON, ADJUSTED TO U.S. DOLLARS
BY MEANS OF APPLICABLE FOREIGN CURRENCY EXCHANGE RATES AND PREPARED IN
ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES:

 

(A)          THE PAR OR STATED VALUE OF ALL OUTSTANDING EQUITY INTERESTS;

 

(B)           CAPITAL SURPLUS; AND

 

(C)           RETAINED EARNINGS.

 

13

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“ERISA” MEANS THE FEDERAL EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED AND IN EFFECT FROM TIME TO TIME, AND THE REGULATIONS AND PUBLISHED
INTERPRETATIONS THEREOF.

 

“ERISA AFFILIATE” MEANS ANY PERSON THAT WOULD BE DEEMED TO BE UNDER “COMMON
CONTROL” WITH, OR A MEMBER OF THE SAME “CONTROLLED GROUP” AS, BORROWER OR ANY OF
ITS SUBSIDIARIES, WITHIN THE MEANING OF THE INTERNAL REVENUE CODE (AS APPLICABLE
TO PLANS) OR ERISA.

 

“ERISA EVENT” MEANS ANY OF THE FOLLOWING WITH RESPECT TO A PLAN: (I) A
REPORTABLE EVENT, (II) A COMPLETE OR PARTIAL WITHDRAWAL BY BORROWER OR ANY ERISA
AFFILIATE FROM A PLAN THAT RESULTS IN LIABILITY UNDER ERISA, OR THE RECEIPT BY
BORROWER OR ANY ERISA AFFILIATE OF NOTICE FROM A MULTIEMPLOYER PLAN THAT IT IS
IN REORGANIZATION OR INSOLVENCY PURSUANT TO ERISA OR THAT IT INTENDS TO
TERMINATE OR HAS TERMINATED UNDER ERISA, (III) THE DISTRIBUTION BY BORROWER OR
ANY ERISA AFFILIATE UNDER ERISA OF A NOTICE OF INTENT TO TERMINATE ANY PLAN OR
THE TAKING OF ANY ACTION TO TERMINATE ANY PLAN, (IV) THE COMMENCEMENT OF
PROCEEDINGS BY THE PBGC UNDER ERISA FOR THE TERMINATION OF, OR THE APPOINTMENT
OF A TRUSTEE TO ADMINISTER, ANY PLAN, OR THE RECEIPT BY BORROWER OR ANY ERISA
AFFILIATE OF A NOTICE FROM ANY MULTIEMPLOYER PLAN THAT SUCH ACTION HAS BEEN
TAKEN BY THE PBGC WITH RESPECT TO SUCH MULTIEMPLOYER PLAN, (V) THE INSTITUTION
OF A PROCEEDING BY ANY FIDUCIARY OF ANY MULTIEMPLOYER PLAN AGAINST BORROWER OR
ANY ERISA AFFILIATE TO ENFORCE SECTION 515 OF ERISA, WHICH IS NOT DISMISSED
WITHIN THIRTY (30) DAYS, (VI) THE IMPOSITION UPON BORROWER OR ANY ERISA
AFFILIATE OF ANY LIABILITY UNDER TITLE IV OF ERISA, OTHER THAN FOR PBGC PREMIUMS
DUE BUT NOT DELINQUENT UNDER ERISA, OR THE IMPOSITION OR THREATENED IMPOSITION
OF ANY LIEN UPON ANY ASSETS OF BORROWER OR ANY ERISA AFFILIATE AS A RESULT OF
ANY ALLEGED FAILURE TO COMPLY WITH THE INTERNAL REVENUE CODE OR ERISA IN RESPECT
OF ANY PLAN, (VII) THE ENGAGING IN OR OTHERWISE BECOMING LIABLE FOR A NONEXEMPT
PROHIBITED TRANSACTION BY BORROWER OR ANY ERISA AFFILIATE, (VIII) A VIOLATION OF
THE APPLICABLE REQUIREMENTS OF SECTION 404 OR 405 OF ERISA OR THE EXCLUSIVE
BENEFIT RULE UNDER SECTION 401(A) OF THE INTERNAL REVENUE CODE BY ANY FIDUCIARY
OF ANY PLAN FOR WHICH BORROWER OR ANY OF ITS ERISA AFFILIATES MAY BE DIRECTLY OR
INDIRECTLY LIABLE, OR (IX) THE ADOPTION OF AN AMENDMENT TO ANY PLAN THAT,
PURSUANT TO THE INTERNAL REVENUE CODE OR ERISA, WOULD RESULT IN THE LOSS OF A
TAX-EXEMPT STATUS OF THE TRUST OF WHICH SUCH PLAN IS A PART OF, AND BORROWER OR
AN ERISA AFFILIATE FAILS TO TIMELY PROVIDE SECURITY TO SUCH PLAN IN ACCORDANCE
WITH THE PROVISIONS OF ERISA.

 

“EVENT OF DEFAULT” MEANS THE OCCURRENCE OF AN EVENT DESCRIBED IN SECTION 11.1
HEREOF PROVIDED THAT THERE SHALL HAVE OCCURRED ANY PASSAGE OF TIME OR GIVING OF
NOTICE THAT WOULD BE NECESSARY IN ORDER TO CONSTITUTE SUCH EVENT AS AN EVENT OF
DEFAULT UNDER SECTION 11.1.

 

“EXCLUDED COLLATERAL” (I) ASSETS OF BORROWER TO THE EXTENT THE ASSIGNMENT
THEREOF IS RESTRICTED BY A CONTRACT OR APPLICABLE LAW AND WOULD NOT OTHERWISE BE
PERMITTED BY SECTION 9-408 OF THE UCC; (II) BORROWER’S REAL PROPERTY LOCATED IN
TUSCALOOSA, ALABAMA; (III) BORROWER’S INTEREST IN ANY LEASED REAL PROPERTY;
(IV) UNTIL SUCH TIME AS BORROWER SHALL HAVE EXECUTED AND DELIVERED THE PATENT
AND TRADEMARK SECURITY AGREEMENT AS PROVIDED FOR IN SECTION 9.18 OF THIS
AGREEMENT, BORROWER’S PATENTS, TRADEMARKS, TRADE NAMES, SERVICE MARKS AND
COPYRIGHTS, AND ALL APPLICATIONS THEREFOR AND LICENSES THEREOF (PROVIDED THAT NO
SUCH ASSETS SHALL BE EXCLUDED TO THE EXTENT THAT A LIEN IN SUCH ASSETS MAY BE
PERFECTED UNDER THE UNIFORM COMMERCIAL CODE OF AN APPLICABLE STATE
JURISDICTION); AND (V) THE EQUITY INTERESTS OF KMEX AND KMG ITALIA TO THE EXTENT
THAT THE SAME ARE NOT INCLUDED AS PART OF THE PLEDGED COLLATERAL.

 

14

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“EXECUTIVE ORDER NO. 13224” MEANS EXECUTIVE ORDER NO. 13224 ON TERRORIST
FINANCING, EFFECTIVE SEPTEMBER 24, 2001, AS THE SAME HAS BEEN, OR SHALL
HEREAFTER BE, RENEWED, EXTENDED, AMENDED OR REPLACED.

 

“EXISTING CREDIT AGREEMENT” MEANS THAT CERTAIN CREDIT AGREEMENT DATED AS OF
MAY 16, 2007 AMONG KMG CHEMICALS, KMG-BERNUTH AND WACHOVIA, AS AMENDED FROM TIME
TO TIME.

 

“EXISTING INDEBTEDNESS” MEANS INDEBTEDNESS OF THE BORROWER CONSOLIDATED GROUP
(I) AS REFLECTED ON THE MOST RECENT FINANCIAL STATEMENTS OR THE CLOSING BALANCE
SHEET, AND WHICH INDEBTEDNESS IS NOT BEING PAID OR DEFEASED WITH THE PROCEEDS OF
THE LOANS AT CLOSING; AND (II) INCURRED IN THE ORDINARY COURSE OF BUSINESS OF A
MEMBER OF THE BORROWER CONSOLIDATED GROUP SUBSEQUENT TO THE DATE OF THE MOST
RECENT FINANCIAL STATEMENTS, AND WHICH INDEBTEDNESS IS NOT FOR BORROWED MONEY.

 

“EXISTING INVESTMENTS” MEANS INVESTMENTS OF THE BORROWER CONSOLIDATED GROUP
(I) AS REFLECTED ON THE MOST RECENT FINANCIAL STATEMENTS OR THE CLOSING BALANCE
SHEET; AND (II) MADE SUBSEQUENT TO THE DATE OF THE MOST RECENT FINANCIAL
STATEMENTS, AND WHICH INVESTMENTS WOULD OTHERWISE BE PERMITTED INVESTMENTS.

 

“EXTRAORDINARY RECEIPT” MEANS ANY CONSIDERATION RECEIVED BY OR PAID TO OR FOR
THE ACCOUNT OF AN APPLICABLE PERSON NOT IN THE ORDINARY COURSE OF BUSINESS,
INCLUDING, WITHOUT LIMITATION, PROCEEDS FROM DISPOSITIONS OF ASSETS OUTSIDE THE
ORDINARY COURSE OF BUSINESS, TAX REFUNDS, PENSION PLAN REVERSIONS, PROCEEDS OF
INSURANCE (OTHER THAN PROCEEDS OF BUSINESS INTERRUPTION INSURANCE TO THE EXTENT
SUCH PROCEEDS CONSTITUTE COMPENSATION FOR LOST EARNINGS), CONDEMNATION AWARDS
(AND PAYMENTS IN LIEU THEREOF) AND INDEMNITY PAYMENTS.

 

“FEDERAL FUNDS RATE” MEANS, FOR ANY PERIOD, A FLUCTUATING PER ANNUM INTEREST
RATE (ROUNDED UPWARDS, IF NECESSARY, TO THE NEAREST 1/100 OF ONE PERCENTAGE
POINT) EQUAL FOR EACH DAY DURING SUCH PERIOD TO 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 FOR SUCH DAY (OR,
IF SUCH DAY IS NOT A BUSINESS DAY, FOR THE NEXT PRECEDING BUSINESS DAY) BY THE
FEDERAL RESERVE BANK OF NEW YORK, OR IF SUCH RATE IS NOT SO PUBLISHED FOR ANY
DAY THAT 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 AGENT.

 

“FEES” MEANS THE LETTER OF CREDIT FACILITY FEE, THE UNUSED FEE, AND THE FEES
OWING UNDER THE WACHOVIA FEE LETTER.

 

“FINANCIAL STATEMENTS” MEANS THE MOST RECENT FINANCIAL STATEMENTS AND THE INCOME
STATEMENTS, BALANCE SHEETS AND OTHER FINANCIAL STATEMENTS REQUIRED TO BE
DELIVERED BY BORROWERS IN ACCORDANCE WITH THIS AGREEMENT.

 

“FINANCING STATEMENTS” MEANS THE UCC-1 FINANCING STATEMENTS (INCLUDING ANY
AMENDMENTS AND CONTINUATIONS) AND UCC-3 FINANCING STATEMENTS REQUIRED HEREUNDER
OR UNDER ANY OTHER SECURITY DOCUMENT.

 

“FISCAL YEAR” MEANS A TWELVE-MONTH PERIOD OF TIME COMMENCING ON THE FIRST DAY OF
AUGUST.

 

15

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“FISCAL YEAR-END” MEANS THE END OF EACH FISCAL YEAR.

 

“FIXED CHARGE COVERAGE” MEANS THE QUOTIENT WHICH IS OBTAINED BY DIVIDING (I) THE
SUM OF EBIDA FOR THE 12-MONTH PERIOD PRECEDING THE APPLICABLE DATE, PLUS THE
LEASE AND RENTAL EXPENSE FOR THE 12-MONTH PERIOD PRECEDING THE APPLICABLE DATE,
LESS DIVIDENDS FOR THE 12-MONTH PERIOD PRECEDING THE APPLICABLE DATE, BY
(II) THE SUM OF THE CURRENT MATURITIES OF LONG-TERM INDEBTEDNESS AS OF THE
APPLICABLE DATE, PLUS THE INTEREST EXPENSE AND LEASE AND RENTAL EXPENSE FOR THE
12-MONTH PERIOD PRECEDING THE APPLICABLE DATE.

 

“Foreign Subsidiary” means a Subsidiary that is organized under the Laws of a
Jurisdiction other than the United States of America or any state thereof or the
District of Columbia.

 

“FUNDED DEBT” MEANS, AS OF AN APPLICABLE TIME, WITHOUT DUPLICATION, (A) ALL OF
THE INDEBTEDNESS OF THE APPLICABLE PERSON WHICH IS INDEBTEDNESS (I) FOR BORROWED
MONEY, OR (II) IN RESPECT OF ANY CAPITALIZED LEASE OR THE DEFERRED PURCHASE
PRICE OF PROPERTY, WHETHER OR NOT INTEREST-BEARING AND WHETHER OR NOT, IN
ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, CLASSIFIED AS A
CURRENT LIABILITY OR LONG-TERM INDEBTEDNESS AT SUCH DATE, AND WHETHER SECURED OR
UNSECURED, EXCLUDING, HOWEVER, (B) INDEBTEDNESS THAT IS ACCOUNTS PAYABLE AND
ACCRUED EXPENSES AND OTHER SIMILAR CURRENT LIABILITIES INCURRED IN SUCH PERSON’S
ORDINARY COURSE OF BUSINESS.

 

“GENERALLY ACCEPTED ACCOUNTING PRINCIPLES” MEANS GENERALLY ACCEPTED PRINCIPLES
OF ACCOUNTING IN EFFECT FROM TIME TO TIME IN THE UNITED STATES APPLIED IN A
MANNER CONSISTENT WITH THOSE USED IN PREPARING SUCH FINANCIAL STATEMENTS AS HAVE
HERETOFORE BEEN FURNISHED TO AGENT BY THE APPLICABLE PERSON.

 

“GOVERNING BODY” MEANS THE BOARD OF DIRECTORS OF A PERSON (OR ANY PERSON OR
GROUP OF PERSONS EXERCISING SIMILAR AUTHORITY).

 

“GOVERNMENTAL APPROVALS” MEANS ALL AUTHORIZATIONS, CONSENTS, APPROVALS, LICENSES
AND EXEMPTIONS OF, REGISTRATIONS AND FILINGS WITH, AND REPORTS TO, ANY
GOVERNMENTAL AUTHORITY.

 

“GOVERNMENTAL AUTHORITY” MEANS ANY NATION OR GOVERNMENT AND ANY POLITICAL
SUBDIVISION THEREOF, AND ANY ENTITY EXERCISING EXECUTIVE, LEGISLATIVE, JUDICIAL,
REGULATORY, OR ADMINISTRATIVE FUNCTIONS OF OR PERTAINING THERETO, WHICH HAS OR
ASSERTS JURISDICTION OVER LENDER PARTY, BORROWER, OR ANY PROPERTY OF ANY OF
THEM.

 

“HAZARDOUS MATERIALS” AND “HAZARDOUS SUBSTANCES” MEANS “HAZARDOUS MATERIALS” AND
“HAZARDOUS SUBSTANCES” AS DEFINED UNDER ANY APPLICABLE ENVIRONMENTAL LAW.

 

“IMPROVEMENTS” MEANS THE “IMPROVEMENTS” AS DEFINED IN THE MORTGAGES.

 

“INCOME TAX EXPENSE” MEANS THE INCOME TAX EXPENSE OF AN APPLICABLE PERSON FOR
THE APPLICABLE PERIOD (TO THE EXTENT INCLUDED IN THE COMPUTATION OF NET INCOME),
DETERMINED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.

 

16

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“INDEBTEDNESS” MEANS, WITH RESPECT TO ANY PERSON, ALL ITEMS OF INDEBTEDNESS,
OBLIGATION OR LIABILITY, WHETHER MATURED OR UNMATURED, LIQUIDATED OR
UNLIQUIDATED, DIRECT OR CONTINGENT, JOINT OR SEVERAL, INCLUDING, BUT WITHOUT
LIMITATION OR DUPLICATION:

 

(A)          ALL OBLIGATIONS OF SUCH PERSON FOR BORROWED MONEY;

 

(B)           ALL OBLIGATIONS OF SUCH PERSON EVIDENCED BY BONDS, DEBENTURES,
NOTES OR SIMILAR INSTRUMENTS, OR UPON WHICH INTEREST PAYMENTS ARE CUSTOMARILY
MADE;

 

(C)           ALL INDEBTEDNESS GUARANTEED, DIRECTLY OR INDIRECTLY, IN ANY
MANNER, OR ENDORSED (OTHER THAN FOR COLLECTION OR DEPOSIT IN THE ORDINARY COURSE
OF BUSINESS) OR DISCOUNTED WITH RECOURSE;

 

(D)          ALL INDEBTEDNESS IN EFFECT GUARANTEED, DIRECTLY OR INDIRECTLY,
THROUGH AGREEMENTS, CONTINGENT OR OTHERWISE:

 

(1)           TO PURCHASE SUCH INDEBTEDNESS; OR

 

(2)           TO PURCHASE, SELL OR LEASE (AS LESSEE OR LESSOR) PROPERTY,
PRODUCTS, MATERIALS OR SUPPLIES OR TO PURCHASE OR SELL SERVICES, PRIMARILY FOR
THE PURPOSE OF ENABLING THE DEBTOR TO MAKE PAYMENT OF SUCH INDEBTEDNESS OR TO
ASSURE THE OWNER OF THE INDEBTEDNESS AGAINST LOSS; OR

 

(3)           TO SUPPLY FUNDS TO OR IN ANY OTHER MANNER INVEST IN THE DEBTOR;

 

(E)           ALL INDEBTEDNESS SECURED BY (OR WHICH THE HOLDER OF SUCH
INDEBTEDNESS HAS A RIGHT, CONTINGENT OR OTHERWISE, TO BE SECURED BY) ANY LIEN
UPON PROPERTY OWNED OR ACQUIRED SUBJECT THERETO, WHETHER OR NOT THE LIABILITIES
SECURED THEREBY HAVE BEEN ASSUMED; AND

 

(F)           ALL INDEBTEDNESS INCURRED AS THE LESSEE OF GOODS OR SERVICES UNDER
LEASES THAT, IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, SHOULD
BE REFLECTED ON THE LESSEE’S BALANCE SHEET.

 

“INDEMNIFIED LOSSES” MEANS ALL DAMAGES, DUES, PENALTIES, FINES, COSTS, AMOUNTS
PAID IN SETTLEMENT, TAXES, LOSSES, EXPENSES, AND FEES, INCLUDING COURT COSTS AND
ATTORNEYS’ FEES AND EXPENSES.

 

“INTERCREDITOR AGREEMENT” MEANS THAT CERTAIN INTERCREDITOR AND COLLATERAL AGENCY
AGREEMENT OF EVEN DATE HEREWITH AMONG LENDERS, AGENT, THE PRUDENTIAL NOTE
HOLDERS AND COLLATERAL AGENT, AS AMENDED FROM TIME TO TIME.

 

“INTEREST EXPENSE” MEANS THE INTEREST EXPENSE OF AN APPLICABLE PERSON FOR THE
APPLICABLE PERIOD (TO THE EXTENT INCLUDED IN THE COMPUTATION OF NET INCOME),
DETERMINED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.

 

“INTEREST PAYMENT DUE DATE” MEANS (I) WITH RESPECT TO ANY PAYMENT OF INTEREST
ACCRUING AT THE ADJUSTED LIBOR MARKET INDEX RATE OR THE ADJUSTED ABR RATE, THE
LAST DAY OF EACH CALENDAR MONTH DURING THE TERM OF THIS AGREEMENT; AND (II) WITH
RESPECT TO ANY PAYMENT OF

 

17

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INTEREST ACCRUING ON ANY LIBOR RATE BORROWING, THE DATE OF EXPIRATION OF THE
APPLICABLE LIBOR RATE INTEREST PERIOD.

 

“INTEREST RATE” MEANS THE ACTUAL INTEREST RATE AT WHICH ALL OR ANY PORTION OF
THE OUTSTANDING PRINCIPAL AMOUNT OF A NOTE BEARS INTEREST FROM TIME TO TIME
DURING THE TERM OF SUCH NOTE.

 

“INVESTMENT” MEANS ANY LOAN OR ADVANCE TO ANY PERSON, ANY PURCHASE OR OTHER
ACQUISITION OF ANY CAPITAL STOCK OR OTHER OWNERSHIP OR PROFIT INTEREST,
WARRANTS, RIGHTS, OPTIONS, OBLIGATIONS OR OTHER SECURITIES OF SUCH PERSON, ANY
CAPITAL CONTRIBUTION TO SUCH PERSON OR ANY OTHER INVESTMENT IN SUCH PERSON.

 

“ISSUING LENDER” MEANS WACHOVIA AND ANY OTHER PERSON THAT BECOMES THE ISSUING
LENDER WITH RESPECT TO A LETTER OF CREDIT PURSUANT TO THE TERMS OF THIS
AGREEMENT.

 

“JURISDICTION” MEANS EACH AND EVERY NATION OR ANY POLITICAL SUBDIVISION THEREOF.

 

“KMEX” MEANS KMG DE MEXICO S.A. DE C.V., ORGANIZED UNDER THE LAWS OF MEXICO.

 

“KMEX PLANT” MEANS THE OPERATING FACILITY OWNED BY KMEX AND LOCATED IN
MATAMORAS, MEXICO.

 

“KMG-BERNUTH” MEANS KMG-BERNUTH, INC., A DELAWARE CORPORATION.

 

“KMG CHEMICALS” MEANS KMG CHEMICALS, INC., A TEXAS CORPORATION.

 

“KMG ECI” MEANS KMG ELECTRONIC CHEMICALS, INC., A TEXAS CORPORATION.

 

“KMG ITALIA” MEANS KMG ITALIA S.R.L., A COMPANY DULY ORGANIZED AND EXISTING
UNDER THE LAWS OF ITALY.

 

“LAND” MEANS THE “LAND” AS DEFINED IN THE MORTGAGES.

 

“LAWS” MEANS EACH AND ALL LAWS, TREATIES, ORDINANCES, STATUTES, RULES,
REGULATIONS, ORDERS, INJUNCTIONS, WRITS OR DECREES OF ANY GOVERNMENTAL
AUTHORITY, OR ANY COURT OR SIMILAR ENTITY ESTABLISHED BY ANY GOVERNMENTAL
AUTHORITY, WHETHER NOW IN EFFECT OR HEREAFTER ENACTED.

 

“LEASE AND RENTAL EXPENSE” MEANS THE LEASE AND RENTAL EXPENSE OF AN APPLICABLE
PERSON FOR THE APPLICABLE PERIOD (TO THE EXTENT INCLUDED IN THE COMPUTATION OF
NET INCOME), DETERMINED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES.

 

“LENDER PARTIES” MEANS AGENT, COLLATERAL AGENT, LENDERS, SWING LINE LENDER,
ISSUING LENDER AND ANY LENDER PARTY (OR AN AFFILIATE OF A LENDER PARTY) THAT IS
NOW OR HEREAFTER BECOMES A PARTY TO ANY LENDER PARTY SWAP DOCUMENT.

 

“LENDER PARTY SWAP DOCUMENTS” MEANS ANY SWAP DOCUMENTS ENTERED INTO BETWEEN ANY
BORROWER PARTY AND ANY LENDER PARTY AND RELATING TO THE LOANS, AND WHICH SWAP
DOCUMENTS ARE APPROVED BY AGENT.

 

18

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“LENDER PARTY SWAP OBLIGATIONS” MEANS THE OBLIGATIONS (INCLUDING OBLIGATIONS OF
PERFORMANCE) AND LIABILITIES OF ANY BORROWER PARTY TO ANY LENDER PARTY OF EVERY
KIND AND DESCRIPTION WHATSOEVER, DIRECT OR INDIRECT, ABSOLUTE OR CONTINGENT, DUE
OR TO BECOME DUE, NOW EXISTING OR HEREAFTER INCURRED, CONTRACTED OR ARISING, OR
ACQUIRED BY LENDER PARTY FROM ANY SOURCE, JOINT OR SEVERAL, LIQUIDATED OR
UNLIQUIDATED, REGARDLESS OF HOW THEY ARISE OR BY WHAT AGREEMENT OR INSTRUMENT
THEY MAY BE EVIDENCED OR WHETHER THEY ARE EVIDENCED BY ANY AGREEMENT OR
INSTRUMENT, AND WHETHER INCURRED AS COUNTERPARTY, MAKER, ENDORSER, SURETY,
GUARANTOR, GENERAL PARTNER, DRAWER, TORT-FEASOR, INDEMNITOR, ACCOUNT PARTY WITH
RESPECT TO A LETTER OF CREDIT OR OTHERWISE, AND ARISING OUT OF, INCURRED
PURSUANT TO OR IN CONNECTION WITH ANY LENDER PARTY SWAP DOCUMENT, AND ANY AND
ALL EXTENSIONS AND RENEWALS OF ANY OF THE SAME.

 

“LENDERS” MEANS THOSE LENDERS EXECUTING THIS AGREEMENT AS LENDERS, AND ANY OTHER
PERSON THAT SHALL BECOME A LENDER HEREUNDER PURSUANT TO THE TERMS HEREOF.

 

“LETTER OF CREDIT” MEANS EACH LETTER OF CREDIT ISSUED PURSUANT TO SECTION 4.1 OF
THIS AGREEMENT.

 

“LETTER OF CREDIT ADVANCES” MEANS ALL AMOUNTS OWING TO ISSUING LENDER UNDER ANY
LETTER OF CREDIT AGREEMENT, INCLUDING, WITHOUT LIMITATION, ALL DRAFTS PAID BY
ISSUING LENDER UNDER ANY LETTER OF CREDIT AND WITH RESPECT TO WHICH AND TO THE
EXTENT THAT ISSUING LENDER HAS NOT BEEN REIMBURSED, AND ALL AMOUNTS OWING TO
LENDERS WHO PURCHASE THEIR PRO RATA SHARE OF LETTER OF CREDIT ADVANCES IN
ACCORDANCE WITH THIS AGREEMENT.

 

“LETTER OF CREDIT AGREEMENT” MEANS THIS AGREEMENT AND ANY OTHER AGREEMENT OF
BORROWER WITH ISSUING LENDER AND RELATING TO BORROWER’S OBLIGATION TO REIMBURSE
ISSUING LENDER WITH RESPECT TO AMOUNTS PAID UNDER ANY LETTER OF CREDIT OR THE
GRANTING OF A LIEN TO AGENT TO SECURE ANY SUCH OBLIGATION, TOGETHER WITH ANY AND
ALL EXTENSIONS, REVISIONS, MODIFICATIONS OR AMENDMENTS AT ANY TIME MADE THERETO.

 

“LETTER OF CREDIT COMMITMENT” MEANS THE LESSER OF (I) TEN MILLION AND 00/100
DOLLARS ($10,000,000.00); OR (II) THE UNUSED REVOLVING LOAN COMMITMENT.

 

“LETTER OF CREDIT FACILITY FEE” MEANS AN ANNUAL FEE PAYABLE BY BORROWERS TO
ISSUING LENDER WITH RESPECT TO EACH LETTER OF CREDIT, IN AN AMOUNT EQUAL TO
(I) THE STATED AMOUNT OF SUCH LETTER OF CREDIT, MULTIPLIED BY (II) THE LIBOR
MARGIN AT THE TIME OF ISSUANCE OR RENEWAL (AS APPLICABLE) OF SUCH LETTER OF
CREDIT (BUT NOT LESS THAN $500.00), SUCH FEE TO BE PAYABLE UPON THE ISSUANCE OF
SUCH LETTER OF CREDIT AND UPON EACH ANNIVERSARY DATE OF THE ISSUANCE OF SUCH
LETTER OF CREDIT, SO LONG AS THE SAME IS OUTSTANDING.

 

“LIABILITIES” MEANS ALL INDEBTEDNESS THAT, IN ACCORDANCE WITH GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES, SHOULD BE CLASSIFIED AS LIABILITIES ON A BALANCE SHEET OF
A PERSON.

 

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“LIBOR MARGIN” MEANS (I) UNTIL THE DELIVERY OF THE FIRST COMPLIANCE CERTIFICATE
REQUIRED HEREUNDER AND THE ADJUSTMENT OF THE LIBOR MARGIN AS PROVIDED HEREIN,
TWO AND ONE-QUARTER PERCENT (2.25%), AND (II) THEREAFTER, A PERCENTAGE BASED
UPON THE RATIO OF FUNDED DEBT TO EBITDA OF THE BORROWER CONSOLIDATED GROUP, AS
FOLLOWS:

 

Ratio of Funded Debt to EBITDA

 

LIBOR Margin

 

 

 

 

 

Equal to or greater than 3.0 to 1.0

 

2.75

%

Equal to or greater than 2.5 to 1.0, but less than 3.0 to 1.0

 

2.50

%

Equal to or greater than 2.0 to 1.0, but less than 2.5 to 1.0

 

2.25

%

Equal to or greater than 1.5 to 1.0, but less than 2.0 to 1.0

 

2.00

%

Less than 1.5 to 1.0

 

1.75

%

 

“LIBOR MARKET INDEX RATE” MEANS, FOR ANY DAY, THE RATE FOR 1 MONTH U.S. DOLLAR
DEPOSITS AS REPORTED ON REUTERS SCREEN LIBOR01 PAGE (OR ANY SUCCESSOR PAGE) AS
OF APPROXIMATELY 11:00 A.M., LONDON TIME, ON SUCH DAY, OR IF SUCH DAY IS NOT A
LONDON BUSINESS DAY, THEN THE IMMEDIATELY PRECEDING LONDON BUSINESS DAY (OR IF
NOT SO REPORTED, THEN AS DETERMINED BY AGENT FROM ANOTHER RECOGNIZED SOURCE OR
INTERBANK QUOTATION).

 

“LIBOR MARKET INDEX RATE BORROWING” MEANS A BORROWING BEARING INTEREST BASED AT
A RATE DETERMINED BY REFERENCE TO THE LIBOR MARKET INDEX RATE.

 

“LIBOR RATE” MEANS, FOR THE APPLICABLE LIBOR RATE INTEREST PERIOD FOR EACH LIBOR
RATE BORROWING COMPRISING PART OF THE SAME BORROWING (INCLUDING CONVERSIONS,
EXTENSIONS AND RENEWALS), A PER ANNUM INTEREST RATE DETERMINED PURSUANT TO THE
FOLLOWING FORMULA:

 

LIBOR Rate =

 

London Interbank Offered Rate

 

 

1 - LIBOR Reserve Percentage

 

“LIBOR RATE BORROWING” MEANS A BORROWING BEARING INTEREST BASED AT A RATE
DETERMINED BY REFERENCE TO THE LIBOR RATE, EACH SUCH BORROWING TO BE IN THE
PRINCIPAL AMOUNT OF AT LEAST $200,000.00 OR ANY LARGER AMOUNT WHICH IS AN EVEN
MULTIPLE OF $100,000.00.

 

“LIBOR RATE INTEREST PERIOD” MEANS, AS TO EACH LIBOR RATE BORROWING, A PERIOD OF
ONE MONTH, TWO MONTHS OR THREE MONTHS, AS SELECTED PURSUANT TO A NOTICE OF
BORROWING OR A NOTICE OF CONVERSION/CONTINUATION, COMMENCING ON THE DATE OF THE
BORROWING (INCLUDING CONTINUATIONS, CONVERSIONS AND EXTENSIONS THEREOF);
PROVIDED, HOWEVER, (I) IF ANY LIBOR RATE INTEREST PERIOD WOULD END ON A DAY
WHICH IS NOT A BUSINESS DAY, SUCH LIBOR RATE INTEREST PERIOD SHALL BE EXTENDED
TO THE NEXT SUCCEEDING BUSINESS DAY (EXCEPT THAT WHERE THE NEXT SUCCEEDING
BUSINESS DAY FALLS IN THE NEXT SUCCEEDING CALENDAR MONTH, THEN ON THE NEXT
PRECEDING BUSINESS DAY), (II) NO LIBOR RATE INTEREST PERIOD SHALL EXTEND BEYOND
THE MATURITY DATE OF THE APPLICABLE LOAN, AND (III) ANY LIBOR RATE INTEREST
PERIOD WITH RESPECT TO A LIBOR RATE BORROWING 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 LIBOR RATE INTEREST
PERIOD) SHALL END ON THE LAST BUSINESS DAY OF THE RELEVANT CALENDAR MONTH AT THE
END OF SUCH LIBOR RATE INTEREST PERIOD.

 

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“LIBOR RESERVE PERCENTAGE” MEANS FOR ANY DAY, THAT PERCENTAGE (EXPRESSED AS A
DECIMAL) WHICH IS IN EFFECT FROM TIME TO TIME UNDER REGULATION D OF THE BOARD OF
GOVERNORS OF THE FEDERAL RESERVE SYSTEM (OR ANY SUCCESSOR), AS SUCH REGULATION
MAY BE AMENDED FROM TIME TO TIME OR ANY SUCCESSOR REGULATION, AS THE MAXIMUM
RESERVE REQUIREMENT (INCLUDING, WITHOUT LIMITATION, ANY BASIC, SUPPLEMENTAL,
EMERGENCY, SPECIAL, OR MARGINAL RESERVES) APPLICABLE WITH RESPECT TO
EUROCURRENCY LIABILITIES AS THAT TERM IS DEFINED IN REGULATION D (OR AGAINST ANY
OTHER CATEGORY OF LIABILITIES THAT INCLUDES DEPOSITS BY REFERENCE TO WHICH THE
INTEREST RATE OF LIBOR RATE BORROWINGS IS DETERMINED), WHETHER OR NOT LENDER
PARTY HAS ANY EUROCURRENCY LIABILITIES SUBJECT TO SUCH RESERVE REQUIREMENT AT
THAT TIME.  LIBOR RATE BORROWINGS SHALL BE DEEMED TO CONSTITUTE EUROCURRENCY
LIABILITIES AND AS SUCH SHALL BE DEEMED SUBJECT TO RESERVE REQUIREMENTS WITHOUT
BENEFITS OF CREDITS FOR PRORATION, EXCEPTIONS OR OFFSETS THAT MAY BE AVAILABLE
FROM TIME TO TIME TO LENDER PARTY.  THE LIBOR RATE SHALL BE ADJUSTED
AUTOMATICALLY ON AND AS OF THE EFFECTIVE DATE OF ANY CHANGE IN THE LIBOR RESERVE
PERCENTAGE.

 

“LIEN” MEANS ANY MORTGAGE, PLEDGE, ENCUMBRANCE, CHARGE, SECURITY INTEREST, LIEN,
ASSIGNMENT OR OTHER ENCUMBRANCE, INCLUDING ANY CONDITIONAL SALE AGREEMENT OR
OTHER TITLE RETENTION AGREEMENT.

 

“LIQUID ASSETS” MEANS, AS OF AN APPLICABLE TIME, THE FOLLOWING, SO LONG AS THE
SAME IS NOT SUBJECT TO ANY LIEN (OTHER THAN COLLATERAL AGENT’S LIEN) NOR SUBJECT
TO ANY RESTRICTION ON TRANSFERABILITY, WHETHER IMPOSED UNDER APPLICABLE LAW, BY
AGREEMENT, OR OTHERWISE: (I) MARKETABLE DIRECT OBLIGATIONS ISSUED BY, OR
UNCONDITIONALLY GUARANTEED BY, THE UNITED STATES GOVERNMENT OR ISSUED BY ANY
AGENCY THEREOF AND BACKED BY THE FULL FAITH AND CREDIT OF THE UNITED STATES, IN
EACH CASE MATURING WITHIN ONE YEAR FROM THE APPLICABLE TIME; (II) CERTIFICATES
OF DEPOSIT AND TIME DEPOSITS HAVING MATURITIES OF SIX MONTHS OR LESS FROM THE
APPLICABLE TIME AND ISSUED BY ANY COMMERCIAL BANK ORGANIZED UNDER THE LAWS OF
THE UNITED STATES OF AMERICA OR ANY STATE THEREOF HAVING COMBINED CAPITAL AND
SURPLUS OF NOT LESS THAN $500,000,000; (III) COMMERCIAL PAPER OF AN ISSUER RATED
AT LEAST A-1 BY STANDARD & POOR’S RATINGS SERVICES (“S&P”) OR P-1 BY MOODY’S
INVESTOR’S SERVICE, INC. (“MOODY’S”), OR CARRYING AN EQUIVALENT RATING BY A
NATIONALLY RECOGNIZED RATING AGENCY, IF BOTH OF THE TWO NAMED RATING AGENCIES
CEASE PUBLISHING RATINGS OF COMMERCIAL PAPER ISSUERS GENERALLY, AND MATURING
WITHIN SIX MONTHS FROM THE APPLICABLE TIME; (IV) SECURITIES WITH MATURITIES OF
ONE YEAR OR LESS FROM THE APPLICABLE TIME AND ISSUED OR FULLY GUARANTEED BY ANY
STATE, COMMONWEALTH OR TERRITORY OF THE UNITED STATES, BY ANY POLITICAL
SUBDIVISION OR TAXING AUTHORITY OF ANY SUCH STATE, COMMONWEALTH OR TERRITORY OR
BY ANY FOREIGN GOVERNMENT, THE SECURITIES OF WHICH STATE, COMMONWEALTH,
TERRITORY, POLITICAL SUBDIVISION, TAXING AUTHORITY OR FOREIGN GOVERNMENT (AS THE
CASE MAY BE) ARE RATED AT LEAST A BY S&P OR A BY MOODY’S; (V) SECURITIES WITH
MATURITIES OF SIX MONTHS OR LESS FROM THE APPLICABLE TIME AND BACKED BY STANDBY
LETTERS OF CREDIT BY LENDER OR ANY COMMERCIAL BANK SATISFYING THE REQUIREMENTS
OF CLAUSE (II) OF THIS DEFINITION; (VI) SHARES OF MONEY MARKET MUTUAL OR SIMILAR
FUNDS WHICH INVEST EXCLUSIVELY IN ASSETS SATISFYING THE REQUIREMENTS OF CLAUSES
(I) THROUGH (III) OF THIS DEFINITION; AND (VII) PUBLICLY TRADED SECURITIES
LISTED ON A NATIONALLY RECOGNIZED SECURITIES EXCHANGE IN THE UNITED STATES.

 

“LOAN DOCUMENTS” MEANS THIS AGREEMENT, THE NOTES, THE SECURITY DOCUMENTS, THE
LETTER OF CREDIT AGREEMENTS, THE CLOSING CERTIFICATES, AND ANY AND ALL OTHER
AGREEMENTS, DOCUMENTS AND INSTRUMENTS OF ANY KIND EXECUTED OR DELIVERED IN
CONNECTION WITH, OR EVIDENCING, SECURING, GUARANTEEING OR RELATING TO, THE
LOANS, WHETHER HERETOFORE, SIMULTANEOUSLY HEREWITH OR HEREAFTER

 

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DELIVERED, TOGETHER WITH ANY AND ALL EXTENSIONS, REVISIONS, MODIFICATIONS OR
AMENDMENTS AT ANY TIME MADE TO ANY OF THE FOREGOING (BUT SPECIFICALLY EXCLUDING
ANY LENDER PARTY SWAP DOCUMENTS).

 

“LOANS” MEANS THE REVOLVING LOAN, THE SWING LINE LOAN, THE TERM LOAN, AND THE
LETTERS OF CREDIT.

 

“LONDON INTERBANK OFFERED RATE” MEANS, FOR ANY LIBOR RATE BORROWING FOR ANY
LIBOR RATE INTEREST PERIOD THEREFOR, EITHER (A) THE RATE OF INTEREST PER ANNUM
DETERMINED BY AGENT (ROUNDED UPWARD TO THE NEAREST 1/100 OF 1%) APPEARING ON THE
REUTERS SCREEN LIBOR01 (OR ANY SUCCESSOR PAGE) AS THE LONDON INTERBANK OFFERED
RATE FOR DEPOSITS IN DOLLARS AT APPROXIMATELY 11:00 A.M. (LONDON TIME), ON THE
SECOND FULL BUSINESS DAY PRECEDING THE FIRST DAY OF SUCH LIBOR RATE INTEREST
PERIOD, AND IN AN AMOUNT APPROXIMATELY EQUAL TO THE AMOUNT OF THE LIBOR RATE
BORROWING AND FOR A PERIOD APPROXIMATELY EQUAL TO SUCH LIBOR RATE INTEREST
PERIOD, (B) IF SUCH RATE IS FOR ANY REASON NOT AVAILABLE, THE RATE OF INTEREST
PER ANNUM DETERMINED BY AGENT (ROUNDED UPWARD TO THE NEAREST 1/100 OF 1%)
APPEARING ON REUTERS SCREEN LIBO PAGE AS THE LONDON INTERBANK OFFERED RATE FOR
DEPOSITS IN DOLLARS AT APPROXIMATELY 11:00 A.M. (LONDON TIME), ON THE SECOND
FULL BUSINESS DAY PRECEDING THE FIRST DAY OF SUCH LIBOR RATE INTEREST PERIOD,
AND IN AN AMOUNT APPROXIMATELY EQUAL TO THE AMOUNT OF THE LIBOR RATE BORROWING
AND FOR A PERIOD APPROXIMATELY EQUAL TO SUCH LIBOR RATE INTEREST PERIOD
(PROVIDED, HOWEVER, IF MORE THAN ONE RATE IS SPECIFIED ON REUTERS SCREEN LIBO
PAGE, THE APPLICABLE RATE SHALL BE THE ARITHMETIC MEAN OF ALL SUCH RATES
(ROUNDED UPWARDS, IF NECESSARY TO THE NEAREST 1/100 OF 1%)), OR (C) IF NEITHER
OF SUCH RATES IS FOR ANY REASON AVAILABLE, THE RATE PER ANNUM EQUAL TO THE RATE
AT WHICH AGENT OR ITS DESIGNEE IS OFFERED DEPOSITS IN DOLLARS AT OR ABOUT
11:00 A.M. (LONDON TIME), TWO BUSINESS DAYS PRIOR TO THE BEGINNING OF SUCH LIBOR
RATE INTEREST PERIOD IN THE INTERBANK EURODOLLAR MARKET WHERE THE EURODOLLAR AND
EXCHANGE OPERATIONS IN RESPECT OF ITS LIBOR RATE BORROWINGS ARE THEN BEING
CONDUCTED FOR SETTLEMENT IN IMMEDIATELY AVAILABLE FUNDS, FOR DELIVERY ON THE
FIRST DAY OF SUCH LIBOR RATE INTEREST PERIOD FOR THE NUMBER OF DAYS COMPRISED
THEREIN, AND IN AN AMOUNT COMPARABLE TO THE AMOUNT OF THE LIBOR RATE BORROWING
TO BE OUTSTANDING DURING SUCH LIBOR RATE INTEREST PERIOD.

 

“LONG-TERM INDEBTEDNESS” MEANS AT ANY DATE ANY INDEBTEDNESS WHICH MATURES (OR
THE MATURITY OF WHICH MAY AT THE OPTION OF THE APPLICABLE PERSON BE EXTENDED
SUCH THAT IT MATURES) MORE THAN ONE YEAR AFTER SUCH DATE.

 

“MATERIAL ADVERSE CHANGE” MEANS THE OCCURRENCE OF AN EVENT GIVING RISE TO A
MATERIAL ADVERSE EFFECT.

 

“MATERIAL ADVERSE EFFECT” MEANS A MATERIAL ADVERSE EFFECT ON (A) THE BUSINESS,
FINANCIAL CONDITION, OPERATIONS OR PROPERTIES OF ANY BORROWER PARTY; (B) THE
RIGHTS AND REMEDIES OF LENDER PARTY UNDER ANY LOAN DOCUMENT, (C) THE ABILITY OF
ANY BORROWER PARTY TO PERFORM ITS OBLIGATIONS UNDER ANY LOAN DOCUMENT TO WHICH
IT IS OR IS TO BE A PARTY, OR (D) THE PRIORITY OF COLLATERAL AGENT’S LIEN.

 

“MATERIAL CONTRACT” MEANS ANY CONTRACT OR AGREEMENT (OTHER THAN CONTRACTS OR
AGREEMENTS WITH RESPECT TO ASSET ACQUISITIONS) TO WHICH BORROWER IS A PARTY, BY
WHICH BORROWER OR ITS PROPERTIES ARE BOUND, OR TO WHICH BORROWER IS SUBJECT AND
WHICH CONTRACT OR AGREEMENT (I) 

 

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PURSUANT TO ITS TERMS PROVIDES FOR PAYMENTS OR RECEIPTS BY BORROWER WHICH MIGHT
REASONABLY BE EXPECTED TO EXCEED $5,000,000.00 DURING ANY FISCAL YEAR; OR
(II) IF ON ACCOUNT OF ANY BREACH OR TERMINATION THEREOF, WOULD REASONABLY BE
EXPECTED TO CAUSE A MATERIAL ADVERSE EFFECT.

 

“MORTGAGED PROPERTY” MEANS THE “MORTGAGED PROPERTY” AS DEFINED IN THE MORTGAGES.

 

“MORTGAGED PROPERTY DOCUMENTS” MEANS (I) THE ASSIGNED LEASES; (II) ANY AND ALL
OTHER AGREEMENTS ENTERED INTO BY BORROWER WITH ANY PERSON RELATING TO THE
MORTGAGED PROPERTY; (III) ANY AND ALL GOVERNMENTAL APPROVALS WITH RESPECT TO THE
MORTGAGED PROPERTY; AND (IV) ANY AND ALL OPERATING, SERVICE, SUPPLY, AND
MAINTENANCE CONTRACTS WITH RESPECT TO THE MORTGAGED PROPERTY.

 

“MORTGAGES” MEANS (I) THAT CERTAIN DEED OF TRUST AND SECURITY AGREEMENT OF EVEN
DATE HEREWITH EXECUTED BY KMG ECI IN FAVOR OF COLLATERAL AGENT, WITH RESPECT TO
THE MORTGAGED PROPERTY LOCATED IN PUEBLO COUNTY, COLORADO; AND (II) THAT CERTAIN
MORTGAGE AND SECURITY AGREEMENT OF EVEN DATE HEREWITH EXECUTED BY KMG-BERNUTH IN
FAVOR OF COLLATERAL AGENT, WITH RESPECT TO THE MORTGAGED PROPERTY LOCATED IN
DONIPHAN COUNTY, KANSAS, AND INCLUDES ANY AND ALL EXTENSIONS, REVISIONS,
MODIFICATIONS OR AMENDMENTS AT ANY TIME MADE TO ANY OF THE FOREGOING.

 

“MOST RECENT FINANCIAL STATEMENTS” MEANS THE AUDITED BALANCE SHEET AND INCOME
STATEMENT OF BORROWERS DATED AS OF JULY 31, 2007, AS SUPPLEMENTED BY
MANAGEMENT-PREPARED FINANCIAL STATEMENTS DATED AS OF EACH QUARTER-END THROUGH
THE QUARTER-END OF OCTOBER 31, 2007.

 

“NET CASH PROCEEDS” MEANS (I) IN THE CASE OF ANY CASUALTY OR CONDEMNATION EVENT,
THE AGGREGATE CASH PROCEEDS OF INSURANCE, CONDEMNATION AWARDS AND OTHER
COMPENSATION RECEIVED BY BORROWER IN RESPECT OF SUCH CASUALTY OR CONDEMNATION
EVENT LESS (X) REASONABLE FEES AND EXPENSES INCURRED BY BORROWER IN CONNECTION
THEREWITH, (Y) CONTRACTUALLY REQUIRED REPAYMENTS OF INDEBTEDNESS TO THE EXTENT
SECURED BY LIENS ON THE PROPERTY SUBJECT TO SUCH CASUALTY OR CONDEMNATION EVENT,
AND (Z) ANY INCOME OR TRANSFER TAXES PAID OR PAYABLE BY BORROWER AS A RESULT OF
SUCH CASUALTY OR CONDEMNATION EVENT; AND (II) IN THE CASE OF ANY ASSET
DISPOSITION, THE AGGREGATE CASH PAYMENTS RECEIVED BY BORROWER IN CONNECTION
THEREWITH, LESS (X) REASONABLE FEES AND EXPENSES INCURRED BY BORROWER IN
CONNECTION THEREWITH, (Y) INDEBTEDNESS TO THE EXTENT THE AMOUNT THEREOF IS
SECURED BY A LIEN ON THE PROPERTY THAT IS THE SUBJECT OF SUCH ASSET DISPOSITION
AND THE TRANSFEREE OF (OR HOLDER OF THE LIEN ON) SUCH PROPERTY REQUIRES THAT
SUCH INDEBTEDNESS BE REPAID AS A CONDITION TO SUCH ASSET DISPOSITION, AND
(Z) ANY INCOME OR TRANSFER TAXES PAID OR PAYABLE BY BORROWER AS A RESULT OF SUCH
ASSET DISPOSITION.

 

“NET INCOME” MEANS THE NET INCOME OF AN APPLICABLE PERSON FOR THE APPLICABLE
PERIOD AS DETERMINED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES, BUT EXCLUDING FOR PURPOSES OF DETERMINING ANY FINANCIAL RATIOS UNDER
THIS AGREEMENT, ALL EXTRAORDINARY RECEIPTS AND ANY INCOME TAX EXPENSE ON SUCH
EXTRAORDINARY RECEIPTS AND ANY TAX DEDUCTIONS OR CREDITS ON ACCOUNT OF SUCH
EXTRAORDINARY RECEIPTS.

 

“NOTES” MEANS THE REVOLVING NOTES, THE SWING LINE NOTE, AND THE TERM NOTES.

 

“NOTICE OF BORROWING” MEANS A NOTICE FROM A BORROWER’S REPRESENTATIVE IN FORM
AND SUBSTANCE SATISFACTORY TO AGENT (AND, IN THE CASE OF A SWING LINE LOAN
ADVANCE, IN FORM AND SUBSTANCE SATISFACTORY TO SWING LINE LENDER), TO BE MADE BY
TELEPHONE AND CONFIRMED IN WRITING, SPECIFYING THEREIN THE INFORMATION AS MAY BE
REASONABLY REQUIRED BY AGENT (AND, IN THE CASE OF A

 

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SWING LINE LOAN ADVANCE, AS MAY BE REASONABLY REQUIRED BY SWING LINE LENDER)
WITH RESPECT TO ANY BORROWING UNDER THIS AGREEMENT, SUCH NOTICE OF BORROWING TO
BE SUBSTANTIALLY IN THE FORM ATTACHED HERETO AS EXHIBIT “E”.

 

“NOTICE OF CONVERSION/CONTINUATION” MEANS A NOTICE FROM A BORROWER’S
REPRESENTATIVE IN FORM AND SUBSTANCE SATISFACTORY TO AGENT, SUCH NOTICE OF
CONVERSION/CONTINUATION TO BE SUBSTANTIALLY IN THE FORM ATTACHED HERETO AS
EXHIBIT “F”.

 

“NOTICE OF FUNDING” MEANS A NOTICE FROM AGENT TO REVOLVING LOAN LENDERS, TO BE
MADE BY TELEPHONE AND CONFIRMED IN WRITING, SPECIFYING THEREIN THE INFORMATION
AS MAY BE REASONABLY REQUIRED BY REVOLVING LOAN LENDERS WITH RESPECT TO ANY
REVOLVING LOAN BORROWING UNDER THIS AGREEMENT, SUCH NOTICE OF FUNDING TO BE
SUBSTANTIALLY IN THE FORM ATTACHED HERETO AS EXHIBIT “G”.

 

“NOTICE OF ISSUANCE” MEANS A NOTICE FROM BORROWER TO AGENT AND ISSUING LENDER TO
BE MADE BY TELEPHONE AND CONFIRMED IN WRITING, SPECIFYING THEREIN THE
INFORMATION AS MAY BE REASONABLY REQUIRED BY AGENT AND ISSUING LENDER WITH
RESPECT TO THE ISSUANCE OF ANY LETTER OF CREDIT UNDER THIS AGREEMENT.

 

“ORDINARY COURSE OF BUSINESS” MEANS AN ACTION TAKEN BY A PERSON ONLY IF:

 

(A)          SUCH ACTION IS CONSISTENT WITH THE PAST PRACTICES OF SUCH PERSON
AND IS TAKEN IN THE ORDINARY COURSE OF THE NORMAL DAY-TO-DAY OPERATIONS OF SUCH
PERSON; AND

 

(B)           SUCH ACTION IS NOT REQUIRED TO BE AUTHORIZED BY THE GOVERNING BODY
OF SUCH PERSON UNDER APPLICABLE LAWS.

 

“ORGANIZATIONAL DOCUMENTS” MEANS (I) THE ARTICLES OF INCORPORATION AND THE
BYLAWS OF A CORPORATION, (II) THE PARTNERSHIP AGREEMENT AND ANY STATEMENT OF
PARTNERSHIP OF A GENERAL PARTNERSHIP, (III) THE LIMITED PARTNERSHIP AGREEMENT
AND THE CERTIFICATE OF LIMITED PARTNERSHIP OF A LIMITED PARTNERSHIP, (IV) THE
ARTICLES OF ORGANIZATION AND THE OPERATING AGREEMENT OF A LIMITED LIABILITY
COMPANY, (V) ANY CHARTER OR SIMILAR DOCUMENT ADOPTED OR FILED IN CONNECTION WITH
THE CREATION, FORMATION, OR ORGANIZATION OF A PERSON, AND (VI) ANY AMENDMENT TO
ANY OF THE FOREGOING.

 

“PERMITTED ACQUISITION” MEANS:

 

(A)          THE ACQUISITION BEING MADE PURSUANT TO THE AIR PRODUCTS APA
DOCUMENTS;

 

(B)           ANY ACQUISITION IF THE TOTAL CONSIDERATION PAID OR PAYABLE IS LESS
THAN $15,000,000.00 AND IF (I) BORROWER GIVES AGENT NOT LESS THAN TEN (10) DAYS
PRIOR WRITTEN NOTICE OF SUCH ACQUISITION; (II) NO LATER THAN THIRTY (30) DAYS
AFTER THE ACQUISITION, BORROWER SHALL HAVE EXECUTED AND DELIVERED SUCH
DOCUMENTATION (IF ANY) AS MAY BE REQUIRED BY AGENT SO THAT COLLATERAL AGENT
SHALL HAVE A FIRST LIEN WITH RESPECT TO ANY ASSETS ACQUIRED IN CONNECTION WITH
SUCH ACQUISITION (OTHER THAN REAL PROPERTY); AND (III) NO DEFAULT SHALL HAVE
OCCURRED AND BE CONTINUING AT THE TIME OF THE CONSUMMATION OF SUCH ACQUISITION
OR WOULD EXIST IMMEDIATELY AFTER SUCH ACQUISITION;

 

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(C)           ANY ACQUISITION MADE BY ANY BORROWER IF THE TOTAL CONSIDERATION
PAID OR PAYABLE IS EQUAL TO OR GREATER THAN $15,000,000.00 AND IF (I) BORROWER
GIVES AGENT NOT LESS THAN THIRTY (30) DAYS PRIOR WRITTEN NOTICE OF SUCH
ACQUISITION, WHICH WRITTEN NOTICE SHALL BE ACCOMPANIED BY A PRO-FORMA COMPLIANCE
CERTIFICATE DEMONSTRATING THAT, ON A PRO-FORMA BASIS, AFTER GIVING EFFECT TO THE
ACQUISITION, SUCH ACQUISITION WOULD NOT GIVE RISE TO A DEFAULT AS OF THE
CONSUMMATION OF THE ACQUISITION, OR DURING THE ONE-YEAR PERIOD FOLLOWING THE
CONSUMMATION OF SUCH ACQUISITION; (II) AGENT CONSENTS TO SUCH ACQUISITION (AND
IN GRANTING OR DENYING SUCH CONSENT, AGENT MAY CONSIDER, AMONG OTHER THINGS,
WHETHER (X) THE BUSINESS ACQUIRED IS A PERMITTED LINE OF BUSINESS;
(Y) IMMEDIATELY AFTER THE ACQUISITION, THE BUSINESS SO ACQUIRED (AND THE ASSETS
CONSTITUTING SUCH BUSINESS) SHALL BE OWNED AND OPERATED BY BORROWER;
(Z) IMMEDIATELY AFTER THE ACQUISITION, BORROWER SHALL HAVE EXECUTED AND
DELIVERED SUCH DOCUMENTATION (IF ANY) AS MAY BE REQUIRED BY AGENT SO THAT
COLLATERAL AGENT SHALL HAVE A FIRST LIEN WITH RESPECT TO ANY ASSETS ACQUIRED IN
CONNECTION WITH SUCH ACQUISITION (OTHER THAN REAL PROPERTY WITH A VALUE OF LESS
THAN $1,000,000.00); AND PROVIDED THAT IN ANY EVENT AGENT MAY WITHHOLD SUCH
CONSENT IF ANY DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING AT THE TIME OF THE
CONSUMMATION OF SUCH ACQUISITION OR WOULD EXIST IMMEDIATELY AFTER SUCH
ACQUISITION; AND

 

(D)          ANY ACQUISITION MADE BY ANY MEMBER OF THE BORROWER CONSOLIDATED
GROUP (OTHER THAN A BORROWER), WHETHER IN A SINGLE TRANSACTION OR A SERIES OF
RELATED TRANSACTIONS, IF THE TOTAL CONSIDERATION PAID OR PAYABLE IS EQUAL TO OR
GREATER THAN $15,000,000.00 AND IF (I) BORROWER GIVES AGENT NOT LESS THAN THIRTY
(30) DAYS PRIOR WRITTEN NOTICE OF SUCH ACQUISITION, WHICH WRITTEN NOTICE SHALL
BE ACCOMPANIED BY A PRO-FORMA COMPLIANCE CERTIFICATE DEMONSTRATING THAT, ON A
PRO-FORMA BASIS, AFTER GIVING EFFECT TO THE ACQUISITION, SUCH ACQUISITION WOULD
NOT GIVE RISE TO A DEFAULT AS OF THE CONSUMMATION OF THE ACQUISITION, OR DURING
THE ONE-YEAR PERIOD FOLLOWING THE CONSUMMATION OF SUCH ACQUISITION; AND
(II) AGENT CONSENTS TO SUCH ACQUISITION (AND IN GRANTING OR DENYING SUCH
CONSENT, AGENT MAY CONSIDER, AMONG OTHER THINGS, WHETHER THE BUSINESS ACQUIRED
IS A PERMITTED LINE OF BUSINESS); AND PROVIDED THAT IN ANY EVENT AGENT MAY
WITHHOLD SUCH CONSENT IF ANY DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING AT
THE TIME OF THE CONSUMMATION OF SUCH ACQUISITION OR WOULD EXIST IMMEDIATELY
AFTER SUCH ACQUISITION.

 

“PERMITTED INDEBTEDNESS” MEANS:

 

(A)          THE CREDIT AGREEMENT OBLIGATIONS;

 

(B)           THE PRUDENTIAL OBLIGATIONS;

 

(C)           THE EXISTING INDEBTEDNESS;

 

(D)          ANY INDEBTEDNESS ARISING UNDER ANY SWAP DOCUMENT ENTERED INTO AS A
RESULT OF THE COMPLIANCE WITH ANY AFFIRMATIVE COVENANT OF ANY BORROWER PARTY SET
FORTH IN ANY LOAN DOCUMENT;

 

(E)           INDEBTEDNESS INCURRED IN THE ORDINARY COURSE OF BUSINESS OF THE
BORROWER CONSOLIDATED GROUP AND NOT INCURRED THROUGH THE BORROWING OF MONEY,
PROVIDED THAT SUCH INDEBTEDNESS IS EITHER UNSECURED INDEBTEDNESS OR INDEBTEDNESS
SECURED BY A PERMITTED LIEN;

 

(F)           INDEBTEDNESS OF ANY MEMBER OF THE BORROWER CONSOLIDATED GROUP OWED
(I) TO ANY MEMBER OF THE BORROWER CONSOLIDATED GROUP (OTHER THAN BORROWER) AND
(II) TO

 

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BORROWER SO LONG AS THE SAME CONSTITUTES A PERMITTED INVESTMENT BY BORROWER
UNDER CLAUSE (II) OF CLAUSE (F) OF THE DEFINITION OF PERMITTED INVESTMENT; AND

 

(G)           INDEBTEDNESS (OTHER THAN INDEBTEDNESS SPECIFIED IN CLAUSES
(A) THROUGH (F) ABOVE) INCURRED BY ANY MEMBER OF THE BORROWER CONSOLIDATED GROUP
IN AN AGGREGATE AMOUNT NOT TO EXCEED $15,000,000 AT ANY TIME OUTSTANDING.

 

“PERMITTED INVESTMENTS” MEANS:

 

(A)          LIQUID ASSETS;

 

(B)           PURCHASES AND ACQUISITIONS OF INVENTORY, SUPPLIES, MATERIALS AND
EQUIPMENT IN THE ORDINARY COURSE OF BUSINESS;

 

(C)           INVESTMENTS CONSISTING OF LOANS AND ADVANCES TO EMPLOYEES FOR
REASONABLE TRAVEL, RELOCATION AND BUSINESS EXPENSES IN THE ORDINARY COURSE OF
BUSINESS OR PREPAID EXPENSES INCURRED IN THE ORDINARY COURSE OF BUSINESS;

 

(D)          WITHOUT DUPLICATION, INVESTMENTS CONSISTING OF PERMITTED
INDEBTEDNESS AND PERMITTED ACQUISITIONS;

 

(E)           EXISTING INVESTMENTS;

 

(F)           INVESTMENTS MADE BY A MEMBER OF THE BORROWER CONSOLIDATED GROUP
(I) IN BORROWER AND (II) IN ANY MEMBER OF THE BORROWER CONSOLIDATED GROUP (OTHER
THAN BORROWER), PROVIDED THAT THE SUM OF (X) THE AGGREGATE AMOUNT OF INVESTMENTS
MADE PURSUANT TO THIS CLAUSE (II) PLUS (Y) THE AGGREGATE VALUE OF ASSETS
TRANSFERRED TO MEMBERS OF THE BORROWER CONSOLIDATED GROUP (OTHER THAN BORROWER)
PURSUANT TO CLAUSE (II) OF CLAUSE (G) OF THE DEFINITION OF PERMITTED TRANSFERS
OF ASSETS IS EQUAL TO OR LESS THAN $5,000,000;

 

(G)           INVESTMENTS (OTHER THAN INVESTMENTS SPECIFIED IN CLAUSES
(A) THROUGH (F) ABOVE) IN AN AGGREGATE AMOUNT THAT SHALL NOT EXCEED
$15,000,000.00; AND

 

(H)          ANY OTHER INVESTMENTS THAT MAY BE APPROVED IN WRITING BY AGENT FROM
TIME TO TIME (INCLUDING, WITHOUT LIMITATION, ANY APPROVAL OF AN INVESTMENT
POLICY ESTABLISHED BY BORROWER).

 

“PERMITTED LIENS” MEANS:

 

(A)          COLLATERAL AGENT’S LIEN;

 

(B)           LIENS, IF ANY, AS REFLECTED ON THE TITLE INSURANCE POLICIES;

 

(C)           THOSE LIENS IDENTIFIED ON THE ATTACHED EXHIBIT “H”;

 

(D)          THE FOLLOWING LIENS, IF THE GRANTING OF SUCH LIEN OR THE ATTACHMENT
OF SUCH LIEN TO THE COLLATERAL (I) DOES NOT OTHERWISE CONSTITUTE A DEFAULT UNDER
THE TERMS OF THIS AGREEMENT, AND (II) DOES NOT GIVE RISE TO A MATERIAL ADVERSE
CHANGE:

 

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(1)           IF THE VALIDITY OR AMOUNT THEREOF IS BEING CONTESTED IN GOOD FAITH
BY APPROPRIATE AND LAWFUL PROCEEDINGS, SO LONG AS LEVY AND EXECUTION THEREON
HAVE BEEN STAYED AND CONTINUE TO BE STAYED, AND WITH RESPECT TO WHICH ADEQUATE
RESERVES OR OTHER APPROPRIATE PROVISIONS ARE BEING MAINTAINED TO THE EXTENT
REQUIRED BY GENERALLY ACCEPTED ACCOUNTING PRINCIPLES:

 

(a)           Liens for taxes, assessments or charges due and payable and
subject to interest or penalty;

 

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

 

(c)           Liens of mechanics, materialmen, warehousemen, carriers, or other
like Liens; and

 

(d)           Adverse judgments on appeal;

 

(2)           PLEDGES OR DEPOSITS MADE IN THE ORDINARY COURSE OF BUSINESS TO
SECURE PAYMENT OF WORKMEN’S COMPENSATION, OR TO PARTICIPATE IN ANY FUND IN
CONNECTION WITH WORKMEN’S COMPENSATION, UNEMPLOYMENT INSURANCE, OLD-AGE PENSIONS
OR OTHER SOCIAL SECURITY PROGRAMS;

 

(3)           GOOD FAITH PLEDGES OR DEPOSITS MADE IN THE ORDINARY COURSE OF
BUSINESS TO SECURE PERFORMANCE OF BIDS, TENDERS, CONTRACTS (OTHER THAN FOR THE
REPAYMENT OF BORROWED MONEY) OR LEASES, NOT IN EXCESS OF TEN PERCENT (10%) OF
THE AGGREGATE AMOUNT DUE THEREUNDER, OR TO SECURE STATUTORY OBLIGATIONS, OR
SURETY, APPEAL, INDEMNITY, PERFORMANCE, PAYMENT, BID OR OTHER SIMILAR BONDS
REQUIRED IN THE ORDINARY COURSE OF BUSINESS; AND

 

(4)           PURCHASE MONEY SECURITY INTERESTS GRANTED IN THE ORDINARY COURSE
OF BUSINESS TO SECURE NOT MORE THAN ONE HUNDRED PERCENT (100%) OF THE PURCHASE
PRICE OF ASSETS; AND

 

(E)           EASEMENTS OVER THE MORTGAGED PROPERTY ARISING BY REASON OF ZONING
RESTRICTIONS, EASEMENTS, LICENSES, RESERVATIONS, COVENANTS, RIGHTS-OF-WAY,
UTILITY EASEMENTS, BUILDING RESTRICTIONS AND OTHER SIMILAR ENCUMBRANCES ON THE
USE OF REAL PROPERTY WHICH DO NOT MATERIALLY DETRACT FROM THE VALUE OF SUCH
MORTGAGED PROPERTY OR INTERFERE WITH THE ORDINARY CONDUCT OF THE BUSINESS
CONDUCTED AND PROPOSED TO BE CONDUCTED AT SUCH MORTGAGED PROPERTY.

 

“PERMITTED LINE OF BUSINESS” MEANS THE BUSINESS ENGAGED IN BY BORROWER AS OF THE
DATE OF THIS AGREEMENT, AND BUSINESSES REASONABLY ANCILLARY THERETO.

 

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“PERMITTED TRANSFERS OF ASSETS” MEANS:

 

(A)          SALES OF INVENTORY IN THE ORDINARY COURSE OF BUSINESS;

 

(B)           THE SALE OR EXCHANGE OF USED OR OBSOLETE EQUIPMENT TO THE EXTENT
(I) THE PROCEEDS OF SUCH SALE ARE APPLIED TOWARDS, OR SUCH EQUIPMENT IS
EXCHANGED FOR, SIMILAR REPLACEMENT EQUIPMENT, OR (II) SUCH EQUIPMENT IS NO
LONGER NECESSARY FOR THE OPERATIONS OF BORROWER IN THE ORDINARY COURSE OF
BUSINESS;

 

(C)           THE SALE OR DISPOSITION OF ASSETS OUTSIDE THE ORDINARY COURSE OF
BUSINESS, PROVIDED THAT (I) THE AGGREGATE VALUE OF ASSETS SOLD OR DISPOSED OF
PURSUANT TO THIS CLAUSE (C) IN ANY FISCAL YEAR SHALL NOT EXCEED $5,000,000.00,
(II) THE AGGREGATE VALUE OF ASSETS SOLD OR DISPOSED OF PURSUANT TO THIS CLAUSE
(C) ON OR AFTER THE DATE OF CLOSING SHALL NOT EXCEED $10,000,000.00, AND
(III) IMMEDIATELY PRIOR TO SUCH SALE OR DISPOSITION, AND AFTER GIVING EFFECT TO
SUCH SALE OR DISPOSITION, NO DEFAULT OR EVENT OF DEFAULT WOULD EXIST;

 

(D)          ANY TRANSFER ARISING FROM THE TERMINATION OF ANY SWAP DOCUMENT, IF
SUCH TERMINATION DOES NOT GIVE RISE TO A DEFAULT;

 

(E)           DIVIDENDS IF IMMEDIATELY PRIOR AND SUBSEQUENT TO THE PAYMENT OF
ANY SUCH DIVIDEND, NO DEFAULT WOULD EXIST;

 

(F)           ANY TRANSFER OF ASSETS BY A MEMBER OF THE BORROWER CONSOLIDATED
GROUP (I) TO BORROWER, SO LONG AS SUCH TRANSFER OF ASSETS WOULD NOT OTHERWISE
GIVE RISE TO A DEFAULT, AND (II) TO A MEMBER OF THE BORROWER CONSOLIDATED GROUP
(OTHER THAN BORROWER), SO LONG AS SUCH TRANSFER OF ASSETS WOULD NOT OTHERWISE
GIVE RISE TO A DEFAULT, PROVIDED THAT THE SUM OF (X) THE AGGREGATE VALUE OF
ASSETS TRANSFERRED TO MEMBERS OF THE BORROWER CONSOLIDATED GROUP (OTHER THAN
BORROWER) PURSUANT TO THIS CLAUSE (II) PLUS (Y) THE AMOUNT OF INVESTMENTS MADE
PURSUANT TO CLAUSE (II) OF CLAUSE (F) OF PERMITTED INVESTMENTS IS EQUAL TO OR
LESS THAN $5,000,000; AND

 

(G)           THE LEASE OF A PORTION OF THE MORTGAGED PROPERTY LOCATED IN
DONIPHAN COUNTY, KANSAS, PURSUANT TO THAT CERTAIN LEASE DATED AS OF FEBRUARY 22,
2006 BETWEEN KMG-BERNUTH, AS LESSOR, AND BOEHRINGER INGELHEIM VETMEDICA, INC.,
AS LESSEE, AS AMENDED FROM TIME TO TIME.

 

“PERSON” MEANS ANY INDIVIDUAL, CORPORATION, PARTNERSHIP, LIMITED PARTNERSHIP,
LIMITED LIABILITY COMPANY, ASSOCIATION, JOINT-STOCK COMPANY, TRUST,
UNINCORPORATED ORGANIZATION, JOINT VENTURE, COURT OR GOVERNMENTAL AUTHORITY.

 

“PETROLEUM PRODUCTS” MEANS “PETROLEUM PRODUCTS” AS DEFINED UNDER ANY APPLICABLE
ENVIRONMENTAL LAW.

 

“PLACE FOR PAYMENT” MEANS A PLACE FOR PAYMENT AS FROM TIME TO TIME DESIGNATED BY
AGENT, WHICH PLACE FOR PAYMENT CURRENTLY IS AT THE ADDRESS OF AGENT AS
HEREINAFTER PROVIDED FOR WITH RESPECT TO NOTICES.

 

“PLANS” MEANS ALL SINGLE EMPLOYER PLANS AND MULTIPLE EMPLOYER PLANS, BOTH AS
DEFINED IN ERISA.

 

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“PLEDGE AGREEMENT” MEANS THAT CERTAIN AMENDED AND RESTATED PLEDGE AGREEMENT OF
EVEN DATE HEREWITH FROM BORROWERS TO COLLATERAL AGENT, TOGETHER WITH ANY AND ALL
EXTENSIONS, REVISIONS, MODIFICATIONS OR AMENDMENTS AT ANY TIME MADE THERETO.

 

“PLEDGED COLLATERAL” MEANS THE “PLEDGED COLLATERAL” AS DEFINED IN THE PLEDGE
AGREEMENT.

 

“PRINCIPAL PAYMENT DUE DATE” MEANS, WITH RESPECT TO ANY PAYMENT OF PRINCIPAL ON
ANY LOAN (OTHER THAN THE REVOLVING LOAN), THE LAST DAY OF EACH CALENDAR MONTH
DURING THE TERM OF THIS AGREEMENT.

 

“PROHIBITED TRANSACTION” MEANS A “PROHIBITED TRANSACTION” AS DEFINED IN ERISA.

 

“PRO RATA” OR “PRO RATA SHARE” OF ANY AMOUNT MEANS, WITH RESPECT TO ANY LENDER
AT ANY TIME (A) WHEN REFERRING TO THE ADVANCES, THE LOANS OR THE LENDERS, THE
PRODUCT OF SUCH AMOUNT TIMES SUCH LENDER’S CREDIT PERCENTAGE; (B) WHEN REFERRING
TO REVOLVING LOAN ADVANCES, REVOLVING LOAN BORROWINGS, THE REVOLVING LOAN, OR
THE REVOLVING LOAN LENDERS, THE PRODUCT OF SUCH AMOUNT TIMES SUCH REVOLVING LOAN
LENDER’S REVOLVING LOAN CREDIT PERCENTAGE; (C) WHEN REFERRING TO TERM LOAN
ADVANCES, TERM LOAN BORROWINGS, THE TERM LOAN, OR THE TERM LOAN LENDERS, THE
PRODUCT OF SUCH AMOUNT TIMES SUCH TERM LOAN LENDER’S TERM LOAN CREDIT
PERCENTAGE; AND (D) WHEN REFERRING TO LETTER OF CREDIT ADVANCES OR THE AVAILABLE
AMOUNT OF THE LETTERS OF CREDIT, THE PRODUCT OF SUCH AMOUNT TIMES SUCH LENDER’S
REVOLVING LOAN CREDIT PERCENTAGE.

 

“PRUDENTIAL LOAN DOCUMENTS” MEANS THE PRUDENTIAL TERM NOTE AND THE PRUDENTIAL
NOTE AGREEMENT.

 

“PRUDENTIAL NOTE HOLDERS” MEANS THE NOTEHOLDERS UNDER AND AS DEFINED IN THE
INTERCREDITOR AGREEMENT.

 

“PRUDENTIAL NOTE AGREEMENT” MEANS THE NOTE AGREEMENT UNDER AND AS DEFINED IN THE
INTERCREDITOR AGREEMENT.

 

“PRUDENTIAL OBLIGATIONS” MEANS THE “NOTE AGREEMENT OBLIGATIONS” AS DEFINED IN
THE INTERCREDITOR AGREEMENT, INCLUDING, BUT NOT LIMITED TO, THE MAKE WHOLE
AMOUNT (AS DEFINED IN THE PRUDENTIAL LOAN DOCUMENTS), IF ANY.

 

“PRUDENTIAL TERM NOTE” MEANS EACH OF THOSE CERTAIN 7.43% SENIOR SECURED NOTES OF
EVEN DATE HEREWITH, GIVEN BY BORROWERS IN FAVOR OF THE PRUDENTIAL NOTE HOLDERS
IN THE AGGREGATE PRINCIPAL AMOUNT OF $20,000,000.00, AND INCLUDES ANY AMENDMENT
TO OR MODIFICATION OF ANY SUCH NOTE AND ANY PROMISSORY NOTE GIVEN IN EXTENSION
OR RENEWAL OF, OR IN SUBSTITUTION FOR, SUCH NOTE.

 

“PURCHASE ORDER” MEANS A VALID AND BINDING ORDER FOR GOODS TO BE PURCHASED FROM
BORROWER, WHICH ORDER SHALL BE EVIDENCED BY AN EXECUTED PURCHASE ORDER OF THE
RESPECTIVE ACCOUNT DEBTOR.

 

“QUARTER” MEANS A PERIOD OF TIME OF THREE CONSECUTIVE CALENDAR MONTHS.

 

“QUARTER-END” MEANS THE LAST DAY OF EACH OF JANUARY, APRIL, JULY AND OCTOBER.

 

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“REAL PROPERTY” MEANS THE REAL PROPERTY OWNED BY BORROWER OR IN WHICH BORROWER
HAS A LEASEHOLD INTEREST, WHICH REAL PROPERTY IS DESCRIBED ON SCHEDULE 10.13 OF
THIS AGREEMENT.

 

“RECORDS” MEANS CORRESPONDENCE, MEMORANDA, TAPES, DISCS, MICROFILM, MICROFICHE,
PAPERS, BOOKS AND OTHER DOCUMENTS, OR TRANSCRIBED INFORMATION OF ANY TYPE,
WHETHER EXPRESSED IN ORDINARY OR MACHINE LANGUAGE, AND ALL FILING CABINETS AND
OTHER CONTAINERS IN WHICH ANY OF THE FOREGOING IS STORED OR MAINTAINED.

 

“REGULATION “T”, REGULATION “U”, AND REGULATION “X” MEANS REGULATION T,
REGULATION U, AND REGULATION X, RESPECTIVELY, OF THE BOARD OF GOVERNORS OF THE
FEDERAL RESERVE SYSTEM AS NOW OR FROM TIME TO TIME HEREAFTER IN EFFECT AND SHALL
INCLUDE ANY SUCCESSOR OR OTHER REGULATION OR OFFICIAL INTERPRETATION OF SAID
BOARD OF GOVERNORS RELATING TO THE EXTENSION OF CREDIT BY BANKS FOR THE PURPOSE
OF PURCHASING OR CARRYING MARGIN STOCKS APPLICABLE TO MEMBER BANKS OF THE
FEDERAL RESERVE SYSTEM.

 

“REIMBURSEMENT OBLIGATION” MEANS THE OBLIGATION OF BORROWER TO PAY THE AMOUNTS
REQUIRED UNDER SECTION 4.2 OF THIS AGREEMENT.

 

“RENTS” MEANS ALL THE RENTS, ISSUES, AND PROFITS NOW DUE AND WHICH MAY HEREAFTER
BECOME DUE UNDER OR BY VIRTUE OF THE ASSIGNED LEASES, TOGETHER WITH ALL CLAIMS
AND RIGHTS TO THE PAYMENT OF MONEY AT ANY TIME ARISING IN CONNECTION WITH ANY
REJECTION OR BREACH OF ANY OF THE ASSIGNED LEASES UNDER BANKRUPTCY LAW,
INCLUDING WITHOUT LIMITATION, ALL RIGHTS TO RECOVER DAMAGES ARISING OUT OF SUCH
BREACH OR REJECTION, ALL RIGHTS TO CHARGES PAYABLE BY A TENANT OR TRUSTEE IN
RESPECT OF THE LEASED PREMISES FOLLOWING THE ENTRY OF AN ORDER FOR RELIEF UNDER
BANKRUPTCY LAW IN RESPECT OF A TENANT AND ALL RENTALS AND CHARGES OUTSTANDING
UNDER THE ASSIGNED LEASES AS OF THE DATE OF ENTRY OF SUCH ORDER FOR RELIEF.

 

“REPORTABLE EVENT” MEANS A “REPORTABLE EVENT” AS DEFINED IN ERISA, BUT EXCLUDING
EVENTS FOR WHICH REPORTING HAS BEEN WAIVED.

 

“REQUIRED ENDORSEMENTS” MEANS ANY ENDORSEMENTS OF ANY TITLE INSURANCE POLICY
REASONABLY REQUIRED BY COLLATERAL AGENT.

 

“REQUIRED LENDERS” MEANS, AT ANY TIME, LENDERS (COLLECTIVELY) HOLDING CREDIT
PERCENTAGES OF AT LEAST SIXTY-SIX AND TWO-THIRDS PERCENT; PROVIDED, HOWEVER,
THAT IN DETERMINING THE FOREGOING, A DEFAULTING LENDER SHALL NOT BE CONSIDERED A
REQUIRED LENDER, AND A DEFAULTING LENDER’S CREDIT PERCENTAGE SHALL BE DEEMED TO
BE ZERO PERCENT (0%).

 

“RESPONSIBLE OFFICER” MEANS, INDIVIDUALLY AND COLLECTIVELY, THE PRESIDENT, CHIEF
EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER OF BORROWER.

 

“REVOLVING LOAN” MEANS THE LOAN WHICH THE REVOLVING LOAN LENDERS HAVE AGREED TO
ADVANCE TO BORROWERS IN ACCORDANCE WITH THE TERMS OF ARTICLE 2 OF THIS
AGREEMENT.

 

“REVOLVING LOAN ADVANCES” MEANS ALL THE ADVANCES OF THE REVOLVING LOAN.

 

“REVOLVING LOAN BORROWING” MEANS A BORROWING CONSISTING OF SIMULTANEOUS
REVOLVING LOAN ADVANCES MADE BY THE REVOLVING LOAN LENDERS.

 

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“REVOLVING LOAN COMMITMENT” MEANS (A) UNTIL APRIL 30, 2008, THIRTY-FIVE MILLION
AND 00/100 DOLLARS ($35,000,000.00); AND (B) THEREAFTER, THE LESSER OF
(I) THIRTY-FIVE MILLION AND 00/100 DOLLARS ($35,000,000.00), OR (II) THE
BORROWING BASE.

 

“REVOLVING LOAN CREDIT PERCENTAGE” MEANS A PERCENTAGE BASED ON A FRACTION, THE
NUMERATOR OF WHICH SHALL BE THE AGGREGATE PRINCIPAL AMOUNT OF REVOLVING LOAN
ADVANCES OUTSTANDING AT A PARTICULAR TIME AND OWING TO A PARTICULAR REVOLVING
LOAN LENDER AT SUCH TIME, AND THE DENOMINATOR OF WHICH SHALL BE THE AGGREGATE
PRINCIPAL AMOUNT OF ALL REVOLVING LOAN ADVANCES OUTSTANDING AT SUCH TIME AND
OWING TO ALL THE REVOLVING LOAN LENDERS AT SUCH TIME; PROVIDED THAT IN
CALCULATING SUCH PERCENTAGE, THE AGGREGATE PRINCIPAL AMOUNT OF SWING LINE LOAN
ADVANCES OWING TO THE SWING LINE LENDER, THE AVAILABLE AMOUNT OF THE LETTERS OF
CREDIT, AND THE AGGREGATE AMOUNT OF LETTER OF CREDIT ADVANCES OWING TO ISSUING
LENDER SHALL, AT SUCH TIME, BE CONSIDERED TO BE OWED TO THE REVOLVING LOAN
LENDERS THAT PURCHASE (OR ARE OBLIGATED TO PURCHASE) SWING LINE LOAN ADVANCES
AND LETTER OF CREDIT ADVANCES FROM THE SWING LINE LENDER AND ISSUING LENDER
UNDER THE TERMS OF THIS AGREEMENT (THE REVOLVING LOAN CREDIT PERCENTAGES OF THE
REVOLVING LOAN LENDERS AS OF THE DATE HEREOF BEING AS SET FORTH ON THE ATTACHED
EXHIBIT “D”).

 

“REVOLVING LOAN LENDERS” MEANS THE REVOLVING LOAN LENDERS IDENTIFIED ON
EXHIBIT “D” ATTACHED TO THIS AGREEMENT, AND ANY OTHER PERSON THAT BECOMES A
REVOLVING LOAN LENDER PURSUANT TO THE TERMS OF THIS AGREEMENT.

 

“REVOLVING LOAN MATURITY DATE” MEANS THE DATE FIVE (5) YEARS FROM THE DATE OF
THIS AGREEMENT (VIZ., DECEMBER 31, 2012).

 

“REVOLVING NOTES” MEANS THOSE CERTAIN REVOLVING NOTES OF EVEN DATE HEREWITH,
GIVEN BY BORROWERS IN FAVOR OF THE REVOLVING LOAN LENDERS IN THE AGGREGATE
PRINCIPAL AMOUNT OF $35,000,000.00, AND INCLUDES ANY AMENDMENT TO OR
MODIFICATION OF ANY SUCH NOTE AND ANY PROMISSORY NOTE GIVEN IN EXTENSION OR
RENEWAL OF, OR IN SUBSTITUTION FOR, SUCH NOTE.

 

“SECURED OBLIGATIONS” MEANS, COLLECTIVELY, THE CREDIT AGREEMENT OBLIGATIONS AND
THE PRUDENTIAL OBLIGATIONS.

 

“SECURITY DOCUMENTS” MEANS ALL DOCUMENTS OR INSTRUMENTS OF ANY KIND EXECUTED OR
DELIVERED IN CONNECTION WITH THE LOANS, WHETHER DELIVERED PRIOR TO, AT, OR AFTER
THE CLOSING, WHEREIN COLLATERAL AGENT IS GRANTED A LIEN IN ANY BORROWER PARTY’S
ASSETS, AND ALL DOCUMENTS AND INSTRUMENTS EXECUTED AND DELIVERED IN CONNECTION
WITH ANY OF THE FOREGOING, TOGETHER WITH ANY AND ALL EXTENSIONS, REVISIONS,
MODIFICATIONS OR AMENDMENTS AT ANY TIME MADE TO ANY OF SUCH DOCUMENTS OR
INSTRUMENTS, INCLUDING BUT NOT LIMITED TO THIS AGREEMENT, THE MORTGAGES, THE
PLEDGE AGREEMENT AND THE FINANCING STATEMENTS.

 

“SOLID WASTES” MEANS “SOLID WASTES” AS DEFINED UNDER ANY APPLICABLE
ENVIRONMENTAL LAW.

 

“SOLVENT” AND “SOLVENCY” MEAN, WITH RESPECT TO ANY PERSON ON A PARTICULAR DATE,
THAT ON SUCH DATE (A) THE FAIR VALUE OF THE PROPERTY OF SUCH PERSON IS GREATER
THAN THE TOTAL AMOUNT OF LIABILITIES, INCLUDING, WITHOUT LIMITATION, CONTINGENT
LIABILITIES, OF SUCH PERSON, (B) THE PRESENT FAIR SALABLE VALUE OF THE ASSETS OF
SUCH PERSON IS NOT LESS THAN THE AMOUNT THAT WILL BE REQUIRED TO PAY

 

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THE PROBABLE LIABILITY OF SUCH PERSON ON ITS DEBTS AS THEY BECOME ABSOLUTE AND
MATURED, (C) SUCH PERSON DOES NOT INTEND TO, AND DOES NOT BELIEVE THAT IT WILL,
INCUR DEBTS OR LIABILITIES BEYOND SUCH PERSON’S ABILITY TO PAY SUCH DEBTS AND
LIABILITIES AS THEY MATURE AND (D) SUCH PERSON IS NOT ENGAGED IN BUSINESS OR A
TRANSACTION, AND IS NOT ABOUT TO ENGAGE IN BUSINESS OR A TRANSACTION, FOR WHICH
SUCH PERSON’S PROPERTY WOULD CONSTITUTE AN UNREASONABLY SMALL CAPITAL.  THE
AMOUNT OF CONTINGENT LIABILITIES AT ANY TIME SHALL BE COMPUTED AS THE AMOUNT
THAT, IN THE LIGHT OF ALL THE FACTS AND CIRCUMSTANCES EXISTING AT SUCH TIME,
REPRESENTS THE AMOUNT THAT IS REASONABLY EXPECTED TO BECOME AN ACTUAL OR MATURED
LIABILITY.

 

“SUBSIDIARY” MEANS, AS TO ANY PERSON (THE “FIRST PERSON”), ANOTHER PERSON (THE
“SECOND PERSON”) WITH RESPECT TO WHICH SUCH FIRST PERSON DIRECTLY OR INDIRECTLY
THROUGH ONE OR MORE INTERMEDIARIES, CONTROLS SUCH SECOND PERSON (AND A FIRST
PERSON SHALL BE DEEMED TO HAVE CONTROL IF SUCH FIRST PERSON, DIRECTLY OR
INDIRECTLY, HAS RIGHTS TO EXERCISE VOTING POWER TO ELECT A MAJORITY OF THE
MEMBERS OF THE GOVERNING BODY OF THE SECOND PERSON).

 

“SWAP DOCUMENTS” MEANS (A) ANY AGREEMENT (INCLUDING TERMS AND CONDITIONS
INCORPORATED BY REFERENCE THEREIN) WHICH IS A RATE SWAP AGREEMENT, BASIS SWAP,
FORWARD RATE AGREEMENT, COMMODITY SWAP, INTEREST RATE OPTION, FORWARD FOREIGN
EXCHANGE AGREEMENT, SPOT FOREIGN EXCHANGE AGREEMENT, RATE CAP AGREEMENT, RATE
FLOOR AGREEMENT, RATE COLLAR AGREEMENT, CURRENCY SWAP AGREEMENT, CROSS-CURRENCY
RATE SWAP AGREEMENT, CURRENCY OPTION, ANY OTHER SIMILAR AGREEMENT (INCLUDING ANY
OPTION TO ENTER INTO ANY OF THE FOREGOING); (B) ANY COMBINATION OF THE
FOREGOING; OR (C) ANY MASTER AGREEMENT FOR ANY OF THE FOREGOING, AS ANY OF THE
FOREGOING MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME.

 

“SWING LINE LENDER” MEANS WACHOVIA.

 

“SWING LINE LOAN” MEANS THE LOAN WHICH THE SWING LINE LENDER HAS AGREED TO
ADVANCE TO BORROWER IN ACCORDANCE WITH THE TERMS OF ARTICLE 3 OF THIS AGREEMENT.

 

“SWING LINE LOAN ADVANCES” MEANS ALL THE ADVANCES OF THE SWING LINE LOAN.

 

“SWING LINE LOAN COMMITMENT” MEANS THE LESSER OF (I) FIVE MILLION AND 00/100
DOLLARS ($5,000,000.00), OR (II) THE UNUSED REVOLVING LOAN COMMITMENT.

 

“SWING LINE LOAN MATURITY DATE” MEANS THE DATE ONE (1) BUSINESS DAY PRIOR TO THE
REVOLVING LOAN MATURITY DATE.

 

“SWING LINE NOTE” MEANS THAT CERTAIN SWING LINE NOTE OF EVEN DATE HEREWITH,
GIVEN BY BORROWERS IN FAVOR OF SWING LINE LENDER IN THE PRINCIPAL AMOUNT OF
$5,000,000.00, AND INCLUDES ANY AMENDMENT TO OR MODIFICATION OF SUCH NOTE AND
ANY PROMISSORY NOTE GIVEN IN EXTENSION OR RENEWAL OF, OR IN SUBSTITUTION FOR,
SUCH NOTE.

 

“TANGIBLE NET WORTH” MEANS, AT ANY TIME WITH RESPECT TO AN APPLICABLE PERSON,
EQUITY OWNER’S EQUITY, LESS THE SUM OF:

 

(A)          ANY SURPLUS RESULTING FROM ANY WRITE-UP OF ASSETS SUBSEQUENT TO THE
DATE OF CLOSING;

 

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(B)           GOODWILL, INCLUDING ANY AMOUNTS, HOWEVER DESIGNATED ON A BALANCE
SHEET OF SUCH PERSON, REPRESENTING THE EXCESS OF THE PURCHASE PRICE PAID FOR
ASSETS OR STOCK ACQUIRED OVER THE VALUE ASSIGNED THERETO;

 

(C)           PATENTS, TRADEMARKS, TRADE NAMES AND COPYRIGHTS;

 

(D)          ANY AMOUNT AT WHICH EQUITY INTERESTS APPEAR AS AN ASSET ON A
BALANCE SHEET OF SUCH PERSON;

 

(E)           LOANS AND ADVANCES TO AFFILIATES, STOCKHOLDERS, DIRECTORS,
OFFICERS OR EMPLOYEES;

 

(F)           DEFERRED EXPENSES (TO THE EXTENT INCLUDED AS AN ASSET ON A BALANCE
SHEET);

 

(G)           INVESTMENTS IN AFFILIATES OF ANY NATURE; AND

 

(H)          ANY OTHER AMOUNT IN RESPECT OF AN INTANGIBLE THAT, IN ACCORDANCE
WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, SHOULD BE CLASSIFIED AS AN ASSET
ON A BALANCE SHEET OF THE APPLICABLE PERSON.

 

“TANGIBLE PROPERTY” MEANS ALL EQUIPMENT, MACHINERY, GOODS, FURNITURE,
FURNISHINGS, FIXTURES, SUPPLIES, TOOLS, MATERIALS, VEHICLES, BOOKS, RECORDS, AND
OTHER TANGIBLE PERSONAL PROPERTY.

 

“TERM LOAN” MEANS THE LOAN WHICH THE TERM LOAN LENDERS HAVE AGREED TO ADVANCE TO
BORROWERS IN ACCORDANCE WITH THE TERMS OF ARTICLE 5 OF THIS AGREEMENT.

 

“TERM LOAN ADVANCES” MEANS ALL THE ADVANCES OF THE TERM LOAN.

 

“TERM LOAN BORROWING” MEANS A BORROWING CONSISTING OF SIMULTANEOUS TERM LOAN
ADVANCES MADE BY THE TERM LOAN LENDERS.

 

“TERM LOAN COMMITMENT” MEANS THIRTY-FIVE MILLION AND 00/100 DOLLARS
($35,000,000.00).

 

“TERM LOAN CREDIT PERCENTAGE” MEANS A PERCENTAGE BASED ON A FRACTION, THE
NUMERATOR OF WHICH SHALL BE THE AGGREGATE PRINCIPAL AMOUNT OF TERM LOAN ADVANCES
OUTSTANDING AT A PARTICULAR TIME AND OWING TO A PARTICULAR TERM LOAN LENDER AT
SUCH TIME, AND THE DENOMINATOR OF WHICH SHALL BE THE AGGREGATE PRINCIPAL AMOUNT
OF ALL TERM LOAN ADVANCES OUTSTANDING AT SUCH TIME AND OWING TO ALL THE TERM
LOAN LENDERS AT SUCH TIME (THE TERM LOAN CREDIT PERCENTAGES OF THE TERM LOAN
LENDERS AS OF THE DATE HEREOF BEING AS SET FORTH ON THE ATTACHED EXHIBIT “D”).

 

“TERM LOAN MATURITY DATE” MEANS THE DATE FIVE (5) YEARS FROM THE DATE OF THIS
AGREEMENT (VIZ., DECEMBER 31, 2012).

 

“TERM NOTES” MEANS THOSE CERTAIN TERM NOTES OF EVEN DATE HEREWITH, GIVEN BY
BORROWERS TO THE TERM LOAN LENDERS IN THE AGGREGATE PRINCIPAL AMOUNT OF
$35,000,000.00, AND INCLUDES ANY AMENDMENT TO OR MODIFICATION OF ANY SUCH NOTE
AND ANY PROMISSORY NOTE GIVEN IN EXTENSION OR RENEWAL OF, OR IN SUBSTITUTION
FOR, SUCH NOTE.

 

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“TERM LOAN LENDERS” MEANS THE TERM LOAN LENDERS IDENTIFIED ON EXHIBIT “D”
ATTACHED TO THIS AGREEMENT, AND ANY OTHER PERSON THAT BECOMES A TERM LOAN LENDER
PURSUANT TO THE TERMS OF THIS AGREEMENT.

 

“Title Insurance Company” means a title insurance company acceptable to Agent in
its reasonable discretion and authorized under applicable Law to issue a Title
Insurance Policy.

 

“Title Insurance Policies” means standard ALTA form title insurance policies
with respect to the Mortgaged Property and acceptable to Collateral Agent in its
discretion, dated the date of Closing, and issued by a Title Insurance Company
to Collateral Agent upon the applicable Mortgaged Property, subject only to
those exceptions and matters of title acceptable to Collateral Agent, in
Collateral Agent’s discretion.

 

“THIRD PERSON” MEANS A PERSON NOT A PARTY TO THIS AGREEMENT.

 

“TRANSITION SERVICES AGREEMENT” MEANS ANY AGREEMENT BETWEEN BORROWER AND AIR
PRODUCTS AND CHEMICALS, INC. RELATING TO THE PROVISION OF ADMINISTRATIVE AND
OTHER SERVICES FOR THE ORDERLY TRANSITION OF THE ASSETS THE SUBJECT OF THE AIR
PRODUCTS APA DOCUMENTS.

 

“UNFUNDED PENSION LIABILITY” MEANS, WITH RESPECT TO ANY PLAN OR MULTIEMPLOYER
PLAN OF ANY APPLICABLE PERSON AS OF AN APPLICABLE DATE, THE EXCESS OF ITS
BENEFIT LIABILITIES UNDER ERISA OVER THE CURRENT VALUE OF ITS ASSETS, AS
DETERMINED BY AGENT.

 

“UNSECURED INDEBTEDNESS” MEANS INDEBTEDNESS NOT SECURED BY ANY LIEN.

 

“UNUSED FEE” MEANS THE FEE PAYABLE BY BORROWERS TO AGENT FOR THE ACCOUNT OF THE
REVOLVING LOAN LENDERS (BASED ON EACH SUCH REVOLVING LOAN LENDER’S PRO RATA
SHARE OF THE REVOLVING LOAN COMMITMENT AT THE APPLICABLE TIME) ON EACH
QUARTER-END, AS DETERMINED BY AGENT AS OF SUCH QUARTER-END IN AN AMOUNT EQUAL TO
(I) THE DAILY AVERAGE OF THE UNUSED REVOLVING LOAN COMMITMENT DURING SUCH
QUARTER, MULTIPLIED BY (II) A PERCENTAGE BASED UPON THE RATIO OF FUNDED DEBT TO
EBITDA OF THE BORROWER CONSOLIDATED GROUP, AS SET FORTH IN THE CHART BELOW,
DIVIDED BY (III) FOUR (4).

 

Ratio of Funded Debt to EBITDA

 

Unused Fee Percentage

 

 

 

 

 

Equal to or greater than 3.0 to 1.0

 

0.25

%

Equal to or greater than 2.5 to 1.0, but less than 3.0 to 1.0

 

0.20

%

Equal to or greater than 2.0 to 1.0, but less than 2.5 to 1.0

 

0.175

%

Equal to or greater than 1.5 to 1.0, but less than 2.0 to 1.0

 

0.15

%

Less than 1.5 to 1.0

 

0.125

%

 

“UNUSED REVOLVING LOAN COMMITMENT” MEANS, AS DETERMINED BY AGENT AT ANY TIME, AN
AMOUNT EQUAL TO (I) THE REVOLVING LOAN COMMITMENT, MINUS (II) THE OUTSTANDING
REVOLVING LOAN ADVANCES, MINUS (III) THE AVAILABLE AMOUNT OF THE LETTERS OF
CREDIT, MINUS (III) ANY OUTSTANDING LETTER OF CREDIT ADVANCES.

 

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“USA PATRIOT ACT” MEANS THE UNITING AND STRENGTHENING AMERICA BY PROVIDING
APPROPRIATE TOOLS REQUIRED TO INTERCEPT AND OBSTRUCT TERRORISM ACT OF 2001, PUB.
L. NO. 107-56, 115 STAT. 272 (2001), AS THE SAME HAS BEEN, OR SHALL HEREAFTER
BE, RENEWED, EXTENDED, AMENDED OR REPLACED.

 

“VOTING POWER” MEANS, WITH RESPECT TO ANY PERSON, THE RIGHT TO VOTE FOR THE
ELECTION OF THE GOVERNING BODY OF SUCH PERSON UNDER ORDINARY CIRCUMSTANCES.

 

“WACHOVIA” MEANS WACHOVIA BANK, NATIONAL ASSOCIATION, A NATIONAL BANKING
ASSOCIATION, ITS SUCCESSORS AND ASSIGNS.

 

“WACHOVIA FEE LETTER” MEANS THAT CERTAIN LETTER DATED NOVEMBER 15, 2007 FROM
WACHOVIA TO KMG CHEMICALS AND KMG-BERNUTH, AND PROVIDING FOR THE PAYMENT OF
CERTAIN FEES AS MORE PARTICULARLY DESCRIBED THEREIN.

 

“WITHOUT NOTICE” MEANS WITHOUT DEMAND OF PERFORMANCE OR OTHER DEMAND,
ADVERTISEMENT, OR NOTICE OF ANY KIND TO OR UPON THE APPLICABLE PERSON, EXCEPT AS
MAY BE REQUIRED UNDER APPLICABLE LAWS OR BY EXPRESS PROVISION OF ANY LOAN
DOCUMENT.

 

1.3           ACCOUNTING TERMS.  ACCOUNTING TERMS USED AND NOT OTHERWISE DEFINED
IN THIS AGREEMENT HAVE THE MEANINGS DETERMINED BY, AND ALL CALCULATIONS WITH
RESPECT TO ACCOUNTING OR FINANCIAL MATTERS UNLESS OTHERWISE PROVIDED HEREIN
SHALL BE COMPUTED IN ACCORDANCE WITH, GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.

 

1.4           UCC TERMS.  AS USED HEREIN, UNLESS THE CONTEXT CLEARLY REQUIRES TO
THE CONTRARY, TERMS NOT SPECIFICALLY DEFINED HEREIN SHALL HAVE THE SAME
RESPECTIVE MEANINGS AS ARE GIVEN TO THOSE TERMS IN THE UNIFORM COMMERCIAL CODE
AS PRESENTLY ADOPTED AND IN EFFECT IN (I) WITH RESPECT TO KMG CHEMICALS AND KMG
ECI, THE STATE OF TEXAS, AND (II) WITH RESPECT TO KMG-BERNUTH, THE STATE OF
DELAWARE (EXCEPT IN CASES AND WITH RESPECT TO COLLATERAL WHEN THE PERFECTION,
THE EFFECT OF PERFECTION OR NONPERFECTION, AND THE PRIORITY OF A LIEN IN THE
COLLATERAL IS GOVERNED BY ANOTHER JURISDICTION, IN WHICH CASE SUCH TERMS SHALL
HAVE THE MEANINGS ATTRIBUTED TO THOSE TERMS UNDER SUCH OTHER JURISDICTION).

 

1.5           CONSTRUCTION OF TERMS.  WHENEVER USED IN THIS AGREEMENT, THE
SINGULAR NUMBER SHALL INCLUDE THE PLURAL AND THE PLURAL THE SINGULAR, PRONOUNS
OF ONE GENDER SHALL INCLUDE ALL GENDERS, USE OF THE TERMS “HEREIN”, “HEREOF”,
AND “HEREUNDER” SHALL BE DEEMED TO BE REFERENCES TO THIS AGREEMENT IN ITS
ENTIRETY UNLESS OTHERWISE SPECIFICALLY PROVIDED, AND THE WORD “DISCRETION” MEANS
IN THE SOLE AND ABSOLUTE DISCRETION OF THE APPLICABLE PERSON(S).

 

1.6           COMPUTATION OF TIME PERIODS.  FOR PURPOSES OF COMPUTATION OF
PERIODS OF TIME HEREUNDER, THE WORD “FROM” MEANS “FROM AND INCLUDING”, THE WORDS
“TO” AND “UNTIL” EACH MEAN “TO BUT EXCLUDING”, AND THE WORD “THROUGH” MEANS
“THROUGH AND INCLUDING”.

 

1.7           COMPUTATION OF ABR MARGIN, LIBOR MARGIN, UNUSED FEE PERCENTAGE AND
FINANCIAL COVENANTS.

 

(A)          FOR PURPOSES OF COMPUTATION OF THE ABR MARGIN, THE LIBOR MARGIN,
THE AMOUNT OF THE UNUSED FEE, AND THE FINANCIAL COVENANTS SET FORTH IN THIS
AGREEMENT, SUCH

 

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COMPUTATION SHALL BE (I) DETERMINED BY AGENT AS OF EACH QUARTER-END, BASED ON
THE COMPLIANCE CERTIFICATE MOST RECENTLY DELIVERED BY BORROWERS IN ACCORDANCE
WITH THE TERMS OF THIS AGREEMENT, (II) DETERMINED ON A CONSOLIDATED BASIS,
(III) BASED ON AN ANNUALIZED ROLLING PERIOD, IF APPLICABLE, AND (IV) EXCLUSIVE
OF ANY AND ALL EXPENSES PAID OR INCURRED BY BORROWER (UP TO A MAXIMUM OF
$1,000,000.00) UNDER ANY TRANSITION SERVICES AGREEMENT.

 

(B)           NOTWITHSTANDING THE FOREGOING OR ANYTHING IN THIS AGREEMENT TO THE
CONTRARY, WITH RESPECT TO ANY ACQUISITION FOR CONSIDERATION IN EXCESS OF
$15,000,000.00 (INCLUDING THE ACQUISITION BEING MADE PURSUANT TO THE AIR
PRODUCTS APA DOCUMENTS), FOR PURPOSES OF COMPUTATION OF THE FINANCIAL COVENANTS
SET FORTH IN THIS AGREEMENT, SUCH COMPUTATION SHALL BE MADE IN GOOD FAITH BY
BORROWER (BUT SUBJECT TO THE APPROVAL OF AGENT) BY TAKING INTO ACCOUNT THE
HISTORICAL RESULTS RELATING TO SUCH ACQUISITION AS FOLLOWS:  (I) FOR THE
QUARTER-END IMMEDIATELY FOLLOWING THE CLOSING OF SUCH ACQUISITION, THE FOREGOING
COMPUTATION SHALL BE MADE BY ADDING THE INCOME AND DEDUCTING THE EXPENSES FOR
THE TWELVE-MONTH PERIOD IMMEDIATELY PRECEDING SUCH QUARTER-END, EXCLUDING THE
DAYS FROM THE DATE OF SUCH ACQUISITION TO SUCH QUARTER-END; (II) FOR THE SECOND
QUARTER-END FOLLOWING THE CLOSING OF SUCH ACQUISITION, THE FOREGOING COMPUTATION
SHALL BE MADE BY ADDING THE INCOME AND DEDUCTING THE EXPENSES FOR THE
TWELVE-MONTH PERIOD IMMEDIATELY PRECEDING SUCH QUARTER-END, EXCLUDING THE DAYS
FROM THE DATE OF SUCH ACQUISITION TO SUCH QUARTER-END; (III) FOR THE THIRD
QUARTER-END FOLLOWING THE CLOSING OF SUCH ACQUISITION, THE FOREGOING COMPUTATION
SHALL BE MADE BY ADDING THE INCOME AND DEDUCTING THE EXPENSES FOR THE
TWELVE-MONTH PERIOD IMMEDIATELY PRECEDING SUCH QUARTER-END, EXCLUDING THE DAYS
FROM THE DATE OF SUCH ACQUISITION TO SUCH QUARTER-END; AND (IV) FOR THE FOURTH
QUARTER-END FOLLOWING THE CLOSING OF SUCH ACQUISITION, THE FOREGOING COMPUTATION
SHALL BE MADE BY ADDING THE INCOME AND DEDUCTING THE EXPENSES FOR THE
TWELVE-MONTH PERIOD IMMEDIATELY PRECEDING SUCH QUARTER-END, EXCLUDING THE DAYS
FROM THE DATE OF SUCH ACQUISITION TO SUCH QUARTER-END.

 

(C)           ANY ADJUSTMENT IN THE ABR MARGIN, THE LIBOR MARGIN OR THE AMOUNT
OF THE UNUSED FEE SHALL BE PROSPECTIVE AND SHALL COMMENCE AS OF THE BUSINESS DAY
THAT THE DELIVERY OF A COMPLIANCE CERTIFICATE BY BORROWERS IS REQUIRED PURSUANT
TO SECTION 10.1(C) OF THIS AGREEMENT (PROVIDED THAT SHOULD BORROWERS FAIL TO
TIMELY DELIVER A REQUIRED COMPLIANCE CERTIFICATE, AGENT AT ITS OPTION MAY ADJUST
THE ABR MARGIN, LIBOR MARGIN AND THE AMOUNT OF THE UNUSED FEE TO THE HIGHEST
APPLICABLE PERCENTAGE).

 

1.8           REFERENCE TO BORROWERS AND BORROWER PARTIES.  ANY REFERENCE IN
THIS AGREEMENT TO (I) “BORROWER” SHALL MEAN EACH AND ANY BORROWER, SINGULARLY;
(II) “BORROWERS” SHALL MEAN ALL OF THE BORROWERS; (III) “BORROWER PARTY” SHALL
MEAN EACH AND ANY BORROWER PARTY, SINGULARLY; AND (IV) “BORROWER PARTIES” SHALL
MEAN ALL OF THE BORROWER PARTIES.

 

1.9           REFERENCE TO LENDERS AND LENDER PARTIES.  ANY REFERENCE IN THIS
AGREEMENT TO (I) “LENDER”, “LENDER PARTY”, “REVOLVING LOAN LENDER” AND “TERM
LOAN LENDER” SHALL MEAN, RESPECTIVELY, EACH AND ANY LENDER, LENDER PARTY,
REVOLVING LOAN LENDER AND TERM LOAN LENDER, SINGULARLY; AND (II) “LENDERS”,
“LENDER PARTIES”, “REVOLVING LOAN LENDERS” AND “TERM LOAN LENDERS” SHALL MEAN,
RESPECTIVELY, ALL LENDERS, LENDER PARTIES, REVOLVING LOAN LENDERS AND TERM LOAN
LENDERS, COLLECTIVELY (AND SHALL INCLUDE ANY PERSON BECOMING A LENDER, LENDER
PARTY, REVOLVING LOAN LENDER OR TERM LOAN LENDER PURSUANT TO AN ASSIGNMENT AND
ACCEPTANCE).  THE OBLIGATIONS AND COMMITMENTS OF EACH LENDER UNDER THIS
AGREEMENT AND THE

 

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OTHER LOAN DOCUMENTS ARE SEVERAL, AND NEITHER AGENT NOR ANY LENDER SHALL BE
RESPONSIBLE FOR THE PERFORMANCE BY THE OTHER LENDERS OF ITS OBLIGATIONS OR
COMMITMENTS HEREUNDER OR THEREUNDER.

 

1.10         JOINT AND SEVERAL LIABILITY OF BORROWERS.

 

(A)          EACH BORROWER IS ACCEPTING JOINT AND SEVERAL LIABILITY HEREUNDER IN
CONSIDERATION OF THE FINANCIAL ACCOMMODATION TO BE PROVIDED BY LENDERS UNDER
THIS AGREEMENT, FOR THE MUTUAL BENEFIT, DIRECTLY AND INDIRECTLY, OF EACH
BORROWER AND IN CONSIDERATION OF THE UNDERTAKINGS OF EACH BORROWER TO ACCEPT
JOINT AND SEVERAL LIABILITY FOR THE OBLIGATIONS OF EACH OTHER BORROWER.

 

(B)           EACH BORROWER JOINTLY AND SEVERALLY IRREVOCABLY AND
UNCONDITIONALLY ACCEPTS, NOT MERELY AS A SURETY BUT ALSO AS A CO-DEBTOR, JOINT
AND SEVERAL LIABILITY WITH THE OTHER BORROWERS WITH RESPECT TO THE PAYMENT AND
PERFORMANCE OF ALL OF THE CREDIT AGREEMENT OBLIGATIONS, IT BEING THE INTENTION
OF THE PARTIES HERETO THAT ALL THE CREDIT AGREEMENT OBLIGATIONS SHALL BE THE
JOINT AND SEVERAL OBLIGATIONS OF EACH AND ALL OF THE BORROWERS WITHOUT
PREFERENCES OR DISTINCTION AMONG THEM.

 

(C)           IF AND TO THE EXTENT THAT ANY BORROWER SHALL FAIL TO MAKE ANY
PAYMENT WITH RESPECT TO ANY OF THE CREDIT AGREEMENT OBLIGATIONS AS AND WHEN DUE
OR TO PERFORM ANY OF THE CREDIT AGREEMENT OBLIGATIONS IN ACCORDANCE WITH THE
TERMS THEREOF, THEN IN EACH SUCH EVENT, THE OTHER BORROWERS WILL MAKE SUCH
PAYMENT WITH RESPECT TO, OR PERFORM, SUCH CREDIT AGREEMENT OBLIGATIONS.

 

(D)          THE OBLIGATIONS OF EACH BORROWER UNDER ANY LOAN DOCUMENT CONSTITUTE
FULL RECOURSE OBLIGATIONS OF SUCH BORROWER, ENFORCEABLE AGAINST IT TO THE FULL
EXTENT OF ITS PROPERTIES AND ASSETS, IRRESPECTIVE OF THE VALIDITY, REGULARITY OR
ENFORCEABILITY OF THIS AGREEMENT OR ANY OTHER CIRCUMSTANCES WHATSOEVER.

 

(E)           EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY LOAN DOCUMENT, EACH
BORROWER HEREBY WAIVES NOTICE OF ACCEPTANCE OF ITS JOINT AND SEVERAL LIABILITY,
NOTICE OF ANY BORROWING MADE UNDER THIS AGREEMENT, NOTICE OF OCCURRENCE OF ANY
DEFAULT OR EVENT OF DEFAULT, OR OF ANY DEMAND FOR ANY PAYMENT UNDER THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, NOTICE OF ANY ACTION AT ANY TIME TAKEN OR
OMITTED BY ANY LENDER PARTY UNDER OR IN RESPECT OF ANY OF THE CREDIT AGREEMENT
OBLIGATIONS, ANY REQUIREMENT OF DILIGENCE AND, GENERALLY, ALL DEMANDS, NOTICE
AND OTHER FORMALITIES OF EVERY KIND IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT.  EACH BORROWER HEREBY ASSENTS TO, AND WAIVES NOTICE OF, ANY
EXTENSION OR POSTPONEMENT OF THE TIME FOR THE PAYMENT OF ANY OF THE CREDIT
AGREEMENT OBLIGATIONS, THE ACCEPTANCE OF ANY PARTIAL PAYMENT THEREON, ANY
WAIVER, CONSENT OR OTHER ACTION OR ACQUIESCENCE BY ANY LENDER PARTY AT ANY TIME
OR TIMES IN RESPECT OF ANY DEFAULT BY ANY BORROWER IN THE PERFORMANCE OR
SATISFACTION OF ANY TERM, COVENANT, CONDITION OR PROVISION OF THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT, ANY AND ALL OTHER INDULGENCES WHATSOEVER BY ANY LENDER
PARTY IN RESPECT OF ANY OF THE CREDIT AGREEMENT OBLIGATIONS, AND THE TAKING,
ADDITION, SUBSTITUTION OR RELEASE, IN WHOLE OR IN PART, AT ANY TIME OR TIMES, OF
ANY SECURITY FOR ANY OF THE CREDIT AGREEMENT OBLIGATIONS OR IN PART, AT ANY TIME
OR TIMES, OF ANY SECURITY FOR ANY OF THE CREDIT AGREEMENT OBLIGATIONS OR THE
ADDITION, SUBSTITUTION OR RELEASE, IN WHOLE OR IN PART, OF ANY BORROWER. 
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EACH BORROWER ASSENTS TO ANY
OTHER ACTION OR

 

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DELAY IN ACTING OR FAILURE TO ACT ON THE PART OF ANY LENDER PARTY, INCLUDING,
WITHOUT LIMITATION, ANY FAILURE STRICTLY OR DILIGENTLY TO ASSERT ANY RIGHT OR TO
PURSUE ANY REMEDY OR TO COMPLY FULLY WITH THE APPLICABLE LAWS OR REGULATIONS
THEREUNDER WHICH MIGHT, BUT FOR THE PROVISIONS OF THIS SECTION, AFFORD GROUNDS
FOR TERMINATING, DISCHARGING OR RELIEVING SUCH BORROWER, IN WHOLE OR IN PART,
FROM ANY OF ITS OBLIGATIONS UNDER THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, IT
BEING THE INTENTION OF EACH BORROWER THAT, SO LONG AS ANY OF THE CREDIT
AGREEMENT OBLIGATIONS REMAIN UNSATISFIED, THE OBLIGATIONS OF SUCH BORROWER UNDER
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL NOT BE DISCHARGED EXCEPT BY
PERFORMANCE AND THEN ONLY TO THE EXTENT OF SUCH PERFORMANCE.  THE OBLIGATIONS OF
EACH BORROWER UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL NOT BE
DIMINISHED OR RENDERED UNENFORCEABLE BY ANY WINDING UP, REORGANIZATION,
ARRANGEMENT, LIQUIDATION, RECONSTRUCTION OR SIMILAR PROCEEDING WITH RESPECT TO
ANY BORROWER PARTY OR ANY LENDER PARTY.  THE JOINT AND SEVERAL LIABILITY OF
BORROWERS HEREUNDER SHALL CONTINUE IN FULL FORCE AND EFFECT NOTWITHSTANDING ANY
ABSORPTION, MERGER, AMALGAMATION OR ANY OTHER CHANGE WHATSOEVER IN THE NAME,
MEMBERSHIP, CONSTITUTION OR PLACE OF FORMATION OF ANY BORROWER PARTY OR ANY
LENDER PARTY.

 

(F)           THE PROVISIONS OF THIS SECTION ARE MADE FOR THE BENEFIT OF LENDER
PARTIES AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS, AND MAY BE ENFORCED FROM
TIME TO TIME AGAINST ANY OF THE BORROWERS AS OFTEN AS OCCASION THEREFOR MAY
ARISE AND WITHOUT REQUIREMENT ON THE PART OF ANY LENDER PARTY FIRST TO MARSHAL
ANY OF ITS CLAIMS OR TO EXERCISE ANY OF ITS RIGHTS AGAINST ANY BORROWER PARTY OR
TO EXHAUST ANY REMEDIES AVAILABLE AGAINST ANY OTHER BORROWER PARTY OR TO RESORT
TO ANY OTHER SOURCE OR MEANS OF OBTAINING PAYMENT OF ANY OF THE CREDIT AGREEMENT
OBLIGATIONS OR TO ELECT ANY OTHER REMEDY.  THE PROVISIONS OF THIS SECTION SHALL
REMAIN IN EFFECT UNTIL ALL THE CREDIT AGREEMENT OBLIGATIONS SHALL HAVE BEEN PAID
IN FULL OR OTHERWISE FULLY SATISFIED.  IF AT ANY TIME, ANY PAYMENT, OR ANY PART
THEREOF, MADE IN RESPECT OF ANY OF THE CREDIT AGREEMENT OBLIGATIONS, IS
RESCINDED OR MUST OTHERWISE BE RESTORED OR RETURNED BY ANY LENDER PARTY UPON THE
INSOLVENCY, BANKRUPTCY OR REORGANIZATION OF ANY BORROWER, OR OTHERWISE, THE
PROVISIONS OF THIS SECTION WILL FORTHWITH BE REINSTATED IN EFFECT, AS THOUGH
SUCH PAYMENT HAD NOT BEEN MADE.

 

(G)           NOTWITHSTANDING ANY PROVISION OF ANY LOAN DOCUMENT, THE LIABILITY
OF EACH BORROWER UNDER THE LOAN DOCUMENTS AS OF ANY DATE SHALL BE LIMITED TO AN
AMOUNT EQUAL TO THE GREATEST AMOUNT THAT WOULD NOT RENDER SUCH BORROWER’S
OBLIGATIONS UNDER THE LOAN DOCUMENTS SUBJECT TO AVOIDANCE, DISCHARGE OR
REDUCTION AS OF SUCH DATE AS A FRAUDULENT TRANSFER OR CONVEYANCE UNDER
APPLICABLE BANKRUPTCY LAWS OR OTHER LAWS, IN EACH INSTANCE AFTER GIVING EFFECT
TO ALL OTHER LIABILITIES OF SUCH BORROWER, CONTINGENT OR OTHERWISE, THAT ARE
RELEVANT UNDER APPLICABLE BANKRUPTCY LAWS OR OTHER LAWS (SPECIFICALLY EXCLUDING,
HOWEVER, ANY LIABILITIES OF SUCH BORROWER TO THE EXTENT THAT SUCH LIABILITIES
WOULD BE DISCHARGED BY PAYMENTS MADE BY SUCH BORROWER HEREUNDER, AND AFTER
GIVING EFFECT TO ANY RIGHTS OF SUBROGATION, CONTRIBUTION, REIMBURSEMENT,
INDEMNITY OR SIMILAR RIGHTS OF SUCH BORROWER PURSUANT TO APPLICABLE LAWS OR
OTHERWISE, INCLUDING ANY AGREEMENT OF SUCH BORROWER WITH ANY OTHER PERSON
PROVIDING FOR AN EQUITABLE ALLOCATION OF SUCH LIABILITY).  EACH BORROWER
ACKNOWLEDGES AND AGREES THAT THE CREDIT AGREEMENT OBLIGATIONS MAY FROM TIME TO
TIME EXCEED THE LIMITATION OF LIABILITY SET FORTH IN THE PRECEDING SENTENCE
WITHOUT DISCHARGING, LIMITING OR OTHERWISE AFFECTING THE OBLIGATIONS OF ANY
BORROWER UNDER THE LOAN DOCUMENTS OR THE RIGHTS AND REMEDIES OF LENDER PARTIES.

 

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1.11         LENDER PARTY SWAP DOCUMENTS.  NOTWITHSTANDING ANY PROVISION OF THIS
AGREEMENT, ANY LOAN DOCUMENT OR ANY LENDER PARTY SWAP DOCUMENT TO THE CONTRARY,
(I) NO COVENANT OR AGREEMENT OF BORROWER PARTY SHALL PROHIBIT BORROWER PARTY
FROM ENTERING INTO ANY LENDER PARTY SWAP DOCUMENT; AND (II) THE RIGHT OF LENDER
PARTIES TO ACCELERATE ANY OF THE CREDIT AGREEMENT OBLIGATIONS SHALL NOT BE
CONSTRUED TO REQUIRE THE TERMINATION OR UNWINDING OF ANY TRANSACTIONS THE
SUBJECT OF ANY LENDER PARTY SWAP DOCUMENTS.

 

1.12         LIEN GRANTED FOR LENDER PARTY SWAP OBLIGATIONS.  TO THE EXTENT THAT
ANY LIEN IS GRANTED TO ANY LENDER PARTY AS SECURITY FOR ANY LENDER PARTY SWAP
OBLIGATION OF ANY BORROWER PARTY TO ANY LENDER PARTY OTHER THAN COLLATERAL
AGENT, THE LIEN SO GRANTED SHALL BE DEEMED TO BE A LIEN GRANTED TO COLLATERAL
AGENT AS SECURITY FOR THE SECURED OBLIGATIONS, WITHOUT THE NECESSITY OF ANY ACT
OR CONSENT OF ANY PERSON.

 

ARTICLE II

 

2.             THE REVOLVING LOAN

 

2.1           GENERAL TERMS.  SUBJECT TO THE TERMS HEREOF, REVOLVING LOAN
LENDERS WILL LEND BORROWERS, FROM TIME TO TIME UNTIL THE REVOLVING LOAN MATURITY
DATE, SUCH AMOUNTS WHICH SHALL NOT EXCEED, IN THE AGGREGATE PRINCIPAL AMOUNT AT
ANY ONE TIME OUTSTANDING THE UNUSED REVOLVING LOAN COMMITMENT, LESS THE
OUTSTANDING SWING LINE LOAN ADVANCES.

 

(A)          EACH REVOLVING LOAN LENDER SEVERALLY AGREES, ON THE TERMS AND
CONDITIONS HEREINAFTER SET FORTH, TO MAKE REVOLVING LOAN ADVANCES TO BORROWERS
FROM TIME TO TIME ON ANY BUSINESS DAY DURING THE PERIOD FROM THE DATE HEREOF
UNTIL THE REVOLVING LOAN MATURITY DATE IN AN AMOUNT FOR EACH SUCH REVOLVING LOAN
ADVANCE NOT TO EXCEED SUCH REVOLVING LOAN LENDER’S PRO RATA SHARE OF THE
APPLICABLE AGGREGATE REVOLVING LOAN BORROWING.  EACH REVOLVING LOAN BORROWING
SHALL BE IN THE AMOUNT OF $100,000.00 OR AN INTEGRAL MULTIPLE OF $50,000.00 IN
EXCESS THEREOF (OTHER THAN A REVOLVING LOAN BORROWING THE PROCEEDS OF WHICH
SHALL BE USED SOLELY TO REPAY OR PREPAY IN FULL OUTSTANDING SWING LINE LOAN
ADVANCES AND A REVOLVING LOAN BORROWING IN AN AMOUNT EQUAL TO THE ENTIRE UNUSED
REVOLVING LOAN COMMITMENT) AND SHALL CONSIST OF REVOLVING LOAN ADVANCES MADE
SIMULTANEOUSLY BY THE REVOLVING LOAN LENDERS PRO RATA.

 

(B)           SUBJECT TO THE TERMS HEREOF, BORROWERS MAY BORROW, REPAY WITHOUT
PENALTY OR PREMIUM, AND REBORROW HEREUNDER, FROM THE DATE OF THIS AGREEMENT
UNTIL THE REVOLVING LOAN MATURITY DATE.  IF AT ANY TIME THE UNPAID PRINCIPAL
BALANCE OF THE REVOLVING LOAN EXCEEDS THE AMOUNT BORROWERS COULD BORROW AT SUCH
TIME AS SET FORTH HEREIN, BORROWERS SHALL IMMEDIATELY UPON DEMAND OF AGENT PAY
OR CAUSE TO BE PAID SUCH AMOUNTS TO AGENT FOR THE ACCOUNT OF THE REVOLVING LOAN
LENDERS (BASED ON EACH REVOLVING LOAN LENDER’S PRO RATA SHARE OF THE REVOLVING
LOAN COMMITMENT AT SUCH TIME), TO THE EXTENT NECESSARY TO REDUCE THE REVOLVING
LOAN TO AN AMOUNT WHICH BORROWERS COULD BORROW AT THAT TIME.

 

2.2           DISBURSEMENT OF THE REVOLVING LOAN.

 

(A)          EXCEPT FOR REVOLVING LOAN BORROWINGS UNDER SECTION 3.2 OF THIS
AGREEMENT AND SUBJECT TO THE TERMS OF ANY OTHER AGREEMENT AMONG AGENT, REVOLVING
LOAN LENDERS AND BORROWERS TO THE CONTRARY, IN ORDER TO OBTAIN A REVOLVING LOAN
BORROWING, A

 

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BORROWER’S REPRESENTATIVE SHALL DELIVER A NOTICE OF BORROWING TO AGENT (I) WITH
RESPECT TO A REVOLVING LOAN BORROWING TO BE MADE AT CLOSING, NOT LATER THAN THE
TIME OF CLOSING, AND (II) WITH RESPECT TO ANY OTHER REVOLVING LOAN BORROWING,
(X) IF THE REVOLVING LOAN BORROWING IS TO ACCRUE INTEREST AT THE ADJUSTED LIBOR
RATE, NO LATER THAN 1:00 P.M. (CHARLOTTE, NORTH CAROLINA TIME) ON A DATE NOT
LESS THAN THREE (3) BUSINESS DAYS PRIOR TO THE DATE SUCH REVOLVING LOAN
BORROWING IS SOUGHT, AND (Y) IF THE REVOLVING LOAN BORROWING IS TO ACCRUE
INTEREST AT THE ADJUSTED LIBOR MARKET INDEX RATE OR THE ADJUSTED ABR RATE, NO
LATER THAN 1:00 P.M. (CHARLOTTE, NORTH CAROLINA TIME) ON A DATE NOT LESS THAN
ONE (1) BUSINESS DAY PRIOR TO THE DATE SUCH REVOLVING LOAN BORROWING IS SOUGHT.

 

(B)           UPON AGENT’S RECEIPT OF A NOTICE OF BORROWING, AGENT SHALL DELIVER
A NOTICE OF FUNDING TO EACH REVOLVING LOAN LENDER BY (X) IF THE APPLICABLE
REVOLVING LOAN BORROWING IS TO ACCRUE INTEREST AT THE ADJUSTED LIBOR RATE,
1:00 P.M. (CHARLOTTE, NORTH CAROLINA TIME) ON A DATE NOT LESS THAN TWO
(2) BUSINESS DAYS PRIOR TO THE DATE THE REVOLVING LOAN BORROWING IS TO BE MADE,
AND (Y) IF THE APPLICABLE REVOLVING LOAN BORROWING IS TO ACCRUE INTEREST AT THE
ADJUSTED LIBOR MARKET INDEX RATE OR THE ADJUSTED ABR RATE, 5:00 P.M. (CHARLOTTE,
NORTH CAROLINA TIME) ON A DATE NOT LESS THAN ONE (1) BUSINESS DAY PRIOR TO THE
DATE THE REVOLVING LOAN BORROWING IS TO BE MADE, AND EACH REVOLVING LOAN LENDER
SHALL, BEFORE 11:00 A.M. (CHARLOTTE, NORTH CAROLINA TIME) ON THE DATE OF SUCH
REVOLVING LOAN BORROWING, MAKE AVAILABLE TO AGENT AT AGENT’S ACCOUNT, IN SAME
DAY FUNDS, SUCH REVOLVING LOAN LENDER’S PRO RATA SHARE OF SUCH REVOLVING LOAN
BORROWING.

 

(C)           AFTER AGENT’S RECEIPT OF SUCH FUNDS AND UPON FULFILLMENT OF ANY
APPLICABLE CONDITIONS SET FORTH IN THIS AGREEMENT, AGENT WILL MAKE SUCH FUNDS
AVAILABLE TO BORROWERS BY CREDITING A BORROWER’S DEPOSIT ACCOUNT WITH WACHOVIA;
PROVIDED, HOWEVER, THAT UPON (I) WRITTEN NOTICE TO AGENT FROM SWING LINE LENDER
GIVEN PRIOR TO THE FUNDING OF THE REVOLVING LOAN BORROWING, AGENT SHALL FIRST
MAKE A PORTION OF SUCH FUNDS EQUAL TO THE AGGREGATE PRINCIPAL AMOUNT OF ANY
SWING LINE LOAN ADVANCES (PLUS INTEREST ACCRUED AND UNPAID THEREON) AVAILABLE TO
THE SWING LINE LENDER (AND, IF APPLICABLE, EACH OTHER LENDER THAT HAS MADE A
SWING LINE LOAN ADVANCE THAT REMAINS OUTSTANDING) FOR REPAYMENT OF SUCH SWING
LINE LOAN ADVANCES; AND (II) WRITTEN NOTICE TO AGENT FROM ISSUING LENDER GIVEN
PRIOR TO THE FUNDING OF THE REVOLVING LOAN BORROWING, AGENT SHALL FIRST MAKE A
PORTION OF SUCH FUNDS EQUAL TO THE AGGREGATE PRINCIPAL AMOUNT OF ANY LETTER OF
CREDIT ADVANCES (PLUS INTEREST ACCRUED AND UNPAID THEREON) AVAILABLE TO ISSUING
LENDER (AND, IF APPLICABLE, EACH OTHER LENDER THAT HAS MADE A LETTER OF CREDIT
ADVANCE THAT REMAINS OUTSTANDING) FOR REPAYMENT OF SUCH LETTER OF CREDIT
ADVANCES.

 

2.3           THE REVOLVING NOTES.  BORROWERS’ OBLIGATION TO REPAY THE REVOLVING
LOAN SHALL BE EVIDENCED BY THE REVOLVING NOTES.

 

2.4           INTEREST RATE.  INTEREST ON THE REVOLVING LOAN SHALL BE CALCULATED
AS FOLLOWS:

 

(A)          EXCEPT AS PROVIDED IN THE IMMEDIATELY SUCCEEDING SUBPARAGRAPHS
(B) AND (C), DURING THE ENTIRE TERM OF THE REVOLVING NOTES, THE OUTSTANDING
PRINCIPAL BALANCE OF THE REVOLVING NOTES SHALL BEAR INTEREST AT THE ADJUSTED
LIBOR MARKET INDEX RATE.

 

(B)           A BORROWER’S REPRESENTATIVE MAY FROM TIME TO TIME DELIVER TO AGENT
A NOTICE OF BORROWING OR A NOTICE OF CONTINUATION/CONVERSION, ELECTING TO HAVE
ALL OR A PORTION OF

 

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THE OUTSTANDING PRINCIPAL BALANCE OF THE REVOLVING LOAN ACCRUE INTEREST BASED ON
THE LIBOR RATE, IN WHICH CASE THE APPLICABLE LIBOR RATE BORROWING SHALL BEAR
INTEREST AT THE ADJUSTED LIBOR RATE DURING THE APPLICABLE LIBOR RATE INTEREST
PERIOD.  FOLLOWING THE EXPIRATION OF ANY APPLICABLE LIBOR RATE INTEREST PERIOD,
IF A BORROWER’S REPRESENTATIVE SHALL NOT HAVE TIMELY AND PROPERLY DELIVERED A
NOTICE OF CONVERSION/CONTINUATION ELECTING A LIBOR RATE INTEREST PERIOD TO
COMMENCE AS OF THE EXPIRATION OF THE APPLICABLE EXPIRING LIBOR RATE INTEREST
PERIOD, THEN THE APPLICABLE LIBOR RATE BORROWING SHALL AUTOMATICALLY BEAR
INTEREST AT THE ADJUSTED LIBOR MARKET INDEX RATE.

 

(C)           A BORROWER’S REPRESENTATIVE MAY FROM TIME TO TIME DELIVER TO AGENT
A NOTICE OF BORROWING OR A NOTICE OF CONTINUATION/CONVERSION, ELECTING TO HAVE
ALL OR A PORTION OF THE OUTSTANDING PRINCIPAL BALANCE OF THE REVOLVING LOAN
ACCRUE INTEREST BASED ON THE ABR RATE, IN WHICH CASE SUCH ABR RATE BORROWING
SHALL BEAR INTEREST AT THE ADJUSTED ABR RATE.  SUCH ABR RATE BORROWING SHALL
CONTINUE TO BEAR INTEREST AT THE ADJUSTED ABR RATE UNTIL SUCH TIME AS A
BORROWER’S REPRESENTATIVE SHALL HAVE DELIVERED TO AGENT A NOTICE OF
CONTINUATION/CONVERSION, ELECTING TO HAVE SUCH ABR BORROWING BEAR INTEREST AT
THE ADJUSTED LIBOR MARKET INDEX RATE OR THE ADJUSTED LIBOR RATE.

 

(D)          NOTWITHSTANDING THE FOREGOING, THERE SHALL NOT BE MORE THAN FOUR
(4) BORROWINGS OUTSTANDING AT ANY TIME WITH RESPECT TO THE REVOLVING LOAN.

 

2.5           PAYMENTS OF PRINCIPAL AND INTEREST.  PRINCIPAL AND INTEREST ON THE
REVOLVING LOAN SHALL BE PAYABLE AS FOLLOWS:

 

(A)          ON THE FIRST INTEREST PAYMENT DUE DATE FOLLOWING THE DATE OF THE
REVOLVING NOTES, AND ON EACH SUCCESSIVE INTEREST PAYMENT DUE DATE THEREAFTER
UNTIL THE ENTIRE INDEBTEDNESS EVIDENCED BY THE REVOLVING NOTES IS PAID IN FULL,
BORROWERS SHALL PAY TO AGENT FOR THE ACCOUNT OF THE REVOLVING LOAN LENDERS
(BASED ON EACH REVOLVING LOAN LENDER’S REVOLVING LOAN CREDIT PERCENTAGE AT SUCH
TIME) ALL ACCRUED AND UNPAID INTEREST ON THE OUTSTANDING PRINCIPAL BALANCE OF
THE REVOLVING NOTES.

 

(B)           IF NOT EARLIER DEMANDED PURSUANT TO SECTION 11.3 HEREOF, THE
OUTSTANDING PRINCIPAL BALANCE OF THE REVOLVING LOAN, TOGETHER WITH ALL ACCRUED
AND UNPAID INTEREST THEREON, SHALL BE DUE AND PAYABLE TO AGENT FOR THE ACCOUNT
OF THE REVOLVING LOAN LENDERS (BASED ON EACH REVOLVING LOAN LENDER’S REVOLVING
LOAN CREDIT PERCENTAGE AT SUCH TIME) ON THE REVOLVING LOAN MATURITY DATE.

 

2.6           USE OF PROCEEDS OF REVOLVING LOAN.  THE PROCEEDS OF THE REVOLVING
LOAN SHALL BE USED TO REFINANCE EXISTING INDEBTEDNESS, TO PURCHASE CERTAIN
ASSETS IN ACCORDANCE WITH THE TERMS OF THE AIR PRODUCTS APA, TO FINANCE
BORROWERS’ GENERAL WORKING CAPITAL NEEDS, TO PAY FEES AND EXPENSES ASSOCIATED
WITH THE CLOSING OF THE LOANS, TO REPAY LETTER OF CREDIT ADVANCES, AND TO REPAY
SWING LINE LOAN ADVANCES.

 

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ARTICLE III

 

3.             THE SWING LINE LOAN.

 

3.1           GENERAL TERMS.

 

(A)          SUBJECT TO THE TERMS HEREOF, SWING LINE LENDER WILL LEND BORROWERS,
FROM TIME TO TIME UNTIL THE SWING LINE LOAN MATURITY DATE, SUCH AMOUNTS WHICH
SHALL NOT EXCEED, IN THE AGGREGATE PRINCIPAL AMOUNT AT ANY ONE TIME OUTSTANDING,
THE SWING LINE LOAN COMMITMENT.

 

(B)           SUBJECT TO THE TERMS HEREOF, BORROWERS MAY BORROW, REPAY WITHOUT
PENALTY OR PREMIUM, AND REBORROW HEREUNDER, FROM THE DATE OF THIS AGREEMENT
UNTIL THE SWING LINE LOAN MATURITY DATE.  IF AT ANY TIME THE UNPAID PRINCIPAL
BALANCE OF THE SWING LINE LOAN EXCEEDS THE AMOUNT BORROWERS COULD BORROW AT SUCH
TIME AS SET FORTH HEREIN, BORROWERS SHALL IMMEDIATELY AND WITHOUT NOTICE PAY OR
CAUSE TO BE PAID SUCH AMOUNTS TO SWING LINE LENDER, TO THE EXTENT NECESSARY TO
REDUCE THE SWING LINE LOAN TO AN AMOUNT WHICH BORROWERS COULD BORROW AT THAT
TIME.

 

3.2           DISBURSEMENT OF THE SWING LINE LOAN.

 

(A)          SWING LINE LENDER WILL CREDIT OR PAY THE PROCEEDS OF EACH SWING
LINE LOAN ADVANCE TO A BORROWER’S DEPOSIT ACCOUNT WITH WACHOVIA, OR IN SUCH
OTHER MANNER AS BORROWERS AND SWING LINE LENDER MAY AGREE.

 

(B)           SUBJECT TO THE TERMS OF ANY OTHER AGREEMENT BETWEEN SWING LINE
LENDER AND BORROWERS TO THE CONTRARY (INCLUDING ANY CASH MANAGEMENT AGREEMENT),
IN ORDER TO OBTAIN A SWING LINE LOAN ADVANCE, A BORROWER’S REPRESENTATIVE SHALL
DELIVER A NOTICE OF BORROWING TO AGENT AND SWING LINE LENDER NOT LATER THAN
1:00 P.M. (CHARLOTTE, NORTH CAROLINA TIME) ON THE BUSINESS DAY SUCH SWING LINE
LOAN ADVANCE IS SOUGHT.  UPON SWING LINE LENDER’S RECEIPT OF SUCH NOTICE OF
BORROWING AND UPON SATISFACTION OF THE TERMS AND CONDITIONS OF THIS AGREEMENT,
SWING LINE LENDER WILL MAKE SUCH FUNDS AVAILABLE TO BORROWERS AS PROVIDED FOR
ABOVE.  NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, BORROWERS
SHALL NOT BE ENTITLED TO RECEIVE NOR SHALL SWING LINE LENDER BE REQUIRED TO
DISBURSE ANY SWING LINE LOAN ADVANCE AFTER THE SWING LINE LOAN MATURITY DATE.

 

(C)           UPON WRITTEN DEMAND BY SWING LINE LENDER TO AGENT (A “SWING LINE
PUT”), EACH REVOLVING LOAN LENDER SHALL PURCHASE FROM SWING LINE LENDER, AND
SWING LINE LENDER SHALL SELL AND ASSIGN (WITHOUT RECOURSE EXCEPT FOR THE
REPRESENTATIONS AND WARRANTIES OF SWING LINE LENDER SET FORTH IN THIS PARAGRAPH)
TO EACH SUCH REVOLVING LOAN LENDER, SUCH REVOLVING LOAN LENDER’S PRO RATA SHARE
OF ANY OUTSTANDING SWING LINE LOAN ADVANCE AS SO DEMANDED BY SWING LINE LENDER,
BY MAKING AVAILABLE FOR THE ACCOUNT OF SWING LINE LENDER, BY DEPOSIT TO AGENT’S
ACCOUNT IN SAME DAY FUNDS, AN AMOUNT EQUAL TO THE PORTION OF THE OUTSTANDING
PRINCIPAL AMOUNT OF SUCH SWING LINE LOAN ADVANCE TO BE PURCHASED BY SUCH
REVOLVING LOAN LENDER ON (I) A BUSINESS DAY ON WHICH NOTICE OF ANY SUCH SWING
LINE PUT IS GIVEN BY AGENT TO REVOLVING LOAN LENDERS, PROVIDED THAT SUCH
NOTIFICATION IS GIVEN BY AGENT NOT LATER THAN 1:00 P.M. (CHARLOTTE, NORTH
CAROLINA TIME) ON SUCH BUSINESS DAY, OR (II) THE FIRST BUSINESS DAY THEREAFTER
IF SUCH NOTIFICATION IS GIVEN BY AGENT LATER THAN 1:00 P.M. (CHARLOTTE, NORTH
CAROLINA TIME).  IF SUCH REVOLVING LOAN LENDER SHALL PAY TO AGENT SUCH AMOUNT
FOR THE ACCOUNT OF SWING

 

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LINE LENDER, SUCH AMOUNT SO PAID IN RESPECT OF PRINCIPAL SHALL CONSTITUTE A
REVOLVING LOAN ADVANCE MADE BY SUCH REVOLVING LOAN LENDER FOR PURPOSES OF THIS
AGREEMENT EVIDENCED BY SUCH REVOLVING LOAN LENDER’S REVOLVING NOTE, AND THE
OUTSTANDING PRINCIPAL BALANCE OF THE SWING LINE LOAN SHALL BE REDUCED BY SUCH
AMOUNT ON SUCH BUSINESS DAY.  BORROWER HEREBY AGREES TO EACH SUCH SALE AND
ASSIGNMENT.  UPON ANY SUCH ASSIGNMENT BY SWING LINE LENDER TO ANY REVOLVING LOAN
LENDER OF A PORTION OF A SWING LINE LOAN ADVANCE, SWING LINE LENDER REPRESENTS
AND WARRANTS TO SUCH REVOLVING LOAN LENDER THAT SWING LINE LENDER IS THE LEGAL
AND BENEFICIAL OWNER OF SUCH INTEREST BEING ASSIGNED BY IT, BUT MAKES NO OTHER
REPRESENTATION OR WARRANTY AND ASSUMES NO RESPONSIBILITY OR LIABILITY WITH
RESPECT TO SUCH SWING LINE LOAN ADVANCE OR THE LOAN DOCUMENTS.  EACH REVOLVING
LOAN LENDER’S OBLIGATION TO PURCHASE ITS PRO RATA SHARE OF AN OUTSTANDING SWING
LINE LOAN ADVANCE PURSUANT TO THIS SECTION 3.2(C) SHALL BE ABSOLUTE AND
UNCONDITIONAL AND SHALL NOT BE AFFECTED BY ANY CIRCUMSTANCE, INCLUDING (A) ANY
SETOFF, COUNTERCLAIM, RECOUPMENT, DEFENSE OR OTHER RIGHT WHICH SUCH REVOLVING
LOAN LENDER MAY HAVE AGAINST SWING LINE LENDER, BORROWER OR ANY OTHER PERSON FOR
ANY REASON WHATSOEVER, (B) THE OCCURRENCE OR CONTINUANCE OF A DEFAULT, OR
(C) THE FAILURE TO SATISFY ANY CONDITION PRECEDENT OF THIS AGREEMENT, OR (D) ANY
OTHER OCCURRENCE, EVENT OR CONDITION, WHETHER OR NOT SIMILAR TO ANY OF THE
FOREGOING.

 

If any Revolving Loan Lender fails to make available to Agent for the account of
Swing Line Lender any amount required to be paid by such Revolving Loan Lender
pursuant to the foregoing provisions of this Article 3 by the time specified in
this Section, Swing Line Lender shall be entitled to recover from such Revolving
Loan Lender (acting through Agent), on demand, such amount with interest thereon
for the period from the date such payment is required to the date on which such
payment is immediately available to Swing Line Lender at a rate per annum equal
to the greater of (i) the Federal Funds Rate, or (ii) the Adjusted LIBOR Market
Index Rate, plus any administrative, processing or similar fees customarily
charged by Swing Line Lender in connection with the foregoing.  A certificate of
Swing Line Lender submitted to any Revolving Loan Lender (through Agent) with
respect to any amounts owing under this paragraph shall be conclusive absent
manifest error.

 

3.3           THE SWING LINE NOTE.  BORROWERS’ OBLIGATION TO REPAY THE SWING
LINE LOAN SHALL BE EVIDENCED BY THE SWING LINE NOTE.

 

3.4           INTEREST RATE.  DURING THE ENTIRE TERM OF THE SWING LINE NOTE, THE
OUTSTANDING PRINCIPAL BALANCE OF THE SWING LINE NOTE SHALL BEAR INTEREST AT THE
ADJUSTED LIBOR MARKET INDEX RATE.

 

3.5           PAYMENTS OF PRINCIPAL AND INTEREST.

 

(A)          ON THE FIRST INTEREST PAYMENT DUE DATE FOLLOWING THE DATE OF THE
SWING LINE NOTE, AND ON EACH SUCCESSIVE INTEREST PAYMENT DUE DATE THEREAFTER
UNTIL THE ENTIRE INDEBTEDNESS EVIDENCED BY THE SWING LINE NOTE IS PAID IN FULL,
BORROWERS SHALL PAY TO AGENT FOR THE ACCOUNT OF SWING LINE LENDER ALL ACCRUED
AND UNPAID INTEREST ON THE OUTSTANDING PRINCIPAL BALANCE OF THE SWING LINE NOTE.

 

(B)           IF NOT EARLIER DEMANDED BY SWING LINE LENDER PURSUANT TO
SECTION 11.3 HEREOF, THE OUTSTANDING PRINCIPAL BALANCE OF THE SWING LINE LOAN,
TOGETHER WITH ALL ACCRUED AND

 

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UNPAID INTEREST THEREON, SHALL BE DUE AND PAYABLE TO AGENT FOR THE ACCOUNT OF
SWING LINE LENDER ON THE SWING LINE LOAN MATURITY DATE.

 

3.6           USE OF PROCEEDS OF SWING LINE LOAN.  THE PROCEEDS OF THE SWING
LINE LOAN SHALL BE USED FOR BORROWERS’ GENERAL SHORT-TERM WORKING CAPITAL AND
GENERAL CORPORATE PURPOSES.

 

3.7           FAILURE TO PURCHASE PRO RATA SHARE OF SWING LINE LOAN ADVANCES. 
THE FAILURE OF ANY REVOLVING LOAN LENDER TO PURCHASE ITS PRO RATA SHARE OF ANY
SWING LINE LOAN ADVANCE AS REQUIRED IN SECTION 3.2(C) SHALL NOT RELIEVE ANY
OTHER REVOLVING LOAN LENDER OF ITS OBLIGATION HEREUNDER TO PURCHASE ITS PRO RATA
SHARE OF SUCH SWING LINE LOAN ADVANCE, BUT NO REVOLVING LOAN LENDER SHALL BE
RESPONSIBLE FOR THE FAILURE OF ANY OTHER REVOLVING LOAN LENDER TO PURCHASE ITS
PRO RATA SHARE OF ANY SWING LINE LOAN ADVANCE.

 

ARTICLE IV

 

4.             LETTERS OF CREDIT

 

4.1           ISSUANCE OF LETTERS OF CREDIT.  SUBJECT TO THE TERMS HEREOF, FROM
TIME TO TIME UNTIL THE REVOLVING LOAN MATURITY DATE, BORROWER MAY REQUEST
ISSUING LENDER TO ISSUE, AND ISSUING LENDER AGREES TO ISSUE, LETTERS OF CREDIT
FOR THE ACCOUNT OF BORROWER FROM TIME TO TIME ON ANY BUSINESS DAY IN AN
AGGREGATE AVAILABLE AMOUNT FOR ALL LETTERS OF CREDIT NOT TO EXCEED AT ANY TIME
THE LETTER OF CREDIT COMMITMENT ON SUCH BUSINESS DAY.  NO LETTER OF CREDIT SHALL
HAVE AN EXPIRATION DATE (INCLUDING ALL RIGHTS OF BORROWER OR THE BENEFICIARY TO
REQUIRE RENEWAL) LATER THAN THE EARLIER OF (I) 30 DAYS BEFORE THE REVOLVING LOAN
MATURITY DATE, OR (II) ONE YEAR AFTER THE DATE OF ISSUANCE THEREOF.  IN ORDER
FOR A LETTER OF CREDIT TO BE ISSUED, A BORROWER’S REPRESENTATIVE SHALL DELIVER A
NOTICE OF ISSUANCE TO AGENT AND ISSUING LENDER NOT LATER THAN 1:00 P.M.
(CHARLOTTE, NORTH CAROLINA TIME) ON A DATE NOT LESS THAN THREE (3) BUSINESS DAYS
PRIOR TO THE DATE THE ISSUANCE OF SUCH LETTER OF CREDIT IS SOUGHT, SUCH NOTICE
OF ISSUANCE TO BE ACCOMPANIED BY THE FORM OF THE LETTER OF CREDIT TO BE ISSUED. 
IF (I) THE REQUESTED FORM OF SUCH LETTER OF CREDIT IS ACCEPTABLE TO ISSUING
LENDER IN ITS DISCRETION, AND (II) IF REQUIRED BY AGENT AND ISSUING LENDER, UPON
EXECUTION AND DELIVERY OF A LETTER OF CREDIT AGREEMENT IN FORM AND SUBSTANCE
SATISFACTORY TO AGENT AND ISSUING LENDER, ISSUING LENDER WILL, SUBJECT TO THE
OTHER TERMS AND CONDITIONS OF THIS AGREEMENT, ISSUE SUCH LETTER OF CREDIT.  IN
THE EVENT AND TO THE EXTENT THAT THE PROVISIONS OF ANY LETTER OF CREDIT
AGREEMENT SHALL CONFLICT WITH THIS AGREEMENT, THE PROVISIONS OF THIS AGREEMENT
SHALL GOVERN.

 

4.2           REIMBURSEMENT AND OTHER PAYMENTS. BORROWERS AGREE TO PAY TO AGENT
IMMEDIATELY UPON DEMAND OF AGENT OR ISSUING LENDER FOR REIMBURSEMENT TO ISSUING
LENDER (I) AT THE TIME WHEN ISSUING LENDER SHALL PAY ANY DRAFT PRESENTED UNDER
ANY LETTER OF CREDIT, A SUM EQUAL TO THE AMOUNT SO PAID UNDER SUCH LETTER OF
CREDIT, PLUS (II) INTEREST ON ANY AMOUNT REMAINING UNPAID BY BORROWERS TO
ISSUING LENDER UNDER CLAUSE (I) ABOVE FROM SUCH TIME UNTIL PAYMENT IN FULL AT AN
INTEREST RATE EQUAL TO (X) UNTIL THE END OF THE BUSINESS DAY NEXT FOLLOWING THE
PAYMENT OF ANY DRAFT, THE ADJUSTED LIBOR MARKET INDEX RATE, AND (Y) THEREAFTER,
THE ADJUSTED LIBOR MARKET INDEX RATE PLUS TWO PERCENT (2.0%).

 

4.3           ADDITIONAL REMEDIES.  IN ADDITION TO ANY RIGHTS AND REMEDIES THE
LENDER PARTIES MAY OTHERWISE HAVE UNDER THIS AGREEMENT, IF (I) ANY DEFAULT SHALL
HAVE OCCURRED, AGENT OR ISSUING LENDER MAY IN THEIR DISCRETION BY NOTICE TO
BORROWERS, DECLARE THE OBLIGATION OF ISSUING

 

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LENDER TO ISSUE ANY LETTER OF CREDIT TO BE TERMINATED, WHEREUPON THE OBLIGATION
OF ISSUING LENDER TO ISSUE ANY LETTER OF CREDIT SHALL FORTHWITH TERMINATE, AND
(II) ANY EVENT OF DEFAULT SHALL HAVE OCCURRED, AGENT MAY MAKE DEMAND UPON
BORROWERS TO, AND FORTHWITH UPON SUCH DEMAND BORROWERS WILL PAY TO AGENT IN SAME
DAY FUNDS AT AGENT’S OFFICE DESIGNATED IN SUCH DEMAND, FOR DEPOSIT IN A SPECIAL
CASH COLLATERAL ACCOUNT TO BE MAINTAINED WITH COLLATERAL AGENT, AN AMOUNT EQUAL
TO THE MAXIMUM AMOUNT THEN AVAILABLE TO BE DRAWN UNDER THE LETTERS OF CREDIT.  
THE CASH COLLATERAL ACCOUNT SHALL BE IN THE NAME OF BORROWERS, BUT UNDER THE
SOLE DOMINION AND CONTROL OF COLLATERAL AGENT, AND SHALL BE HELD AND DISBURSED
AS FOLLOWS:

 

(A)          COLLATERAL AGENT MAY FROM TIME TO TIME INVEST FUNDS ON DEPOSIT IN
THE CASH COLLATERAL ACCOUNT, REINVEST PROCEEDS OF ANY SUCH INVESTMENTS WHICH MAY
MATURE OR BE SOLD, AND INVEST INTEREST OR OTHER INCOME RECEIVED FROM ANY SUCH
INVESTMENTS, AND ALL SUCH INVESTMENTS AND REINVESTMENTS SHALL, FOR PURPOSES OF
THIS AGREEMENT, CONSTITUTE PART OF THE FUNDS HELD IN THE CASH COLLATERAL
ACCOUNT.

 

(B)           IF AT ANY TIME AGENT OR COLLATERAL AGENT DETERMINES THAT ANY FUNDS
HELD IN THE CASH COLLATERAL ACCOUNT ARE SUBJECT TO ANY RIGHT OR CLAIM OF ANY
PERSON OTHER THAN CLAIMS ARISING UNDER THIS AGREEMENT OR THAT THE TOTAL AMOUNT
OF SUCH FUNDS IS LESS THAN THE MAXIMUM AMOUNT AT SUCH TIME AVAILABLE TO BE DRAWN
UNDER THE LETTERS OF CREDIT, BORROWERS WILL, FORTHWITH UPON DEMAND BY AGENT OR
COLLATERAL AGENT, PAY TO COLLATERAL AGENT, AS ADDITIONAL FUNDS TO BE DEPOSITED
AND HELD IN THE CASH COLLATERAL ACCOUNT, AN AMOUNT EQUAL TO THE EXCESS OF
(I) SUCH MAXIMUM AMOUNT AT SUCH TIME AVAILABLE TO BE DRAWN UNDER THE LETTERS OF
CREDIT OVER (II) THE TOTAL AMOUNT OF FUNDS, IF ANY, THEN HELD IN THE CASH
COLLATERAL ACCOUNT WHICH AGENT OR COLLATERAL AGENT DETERMINE TO BE FREE AND
CLEAR OF ANY SUCH RIGHT AND CLAIM.

 

(C)           BORROWER HEREBY ASSIGNS, TRANSFERS AND SETS OVER, AND GRANTS TO
COLLATERAL AGENT A LIEN ON AND UPON, THE CASH COLLATERAL ACCOUNT, INCLUDING ALL
FUNDS HELD IN THE CASH COLLATERAL ACCOUNT FROM TIME TO TIME AND ALL PROCEEDS
THEREOF, AS SECURITY FOR THE SECURED OBLIGATIONS.  BORROWER AGREES THAT, TO THE
EXTENT NOTICE OF SALE OF ANY SECURITIES SHALL BE REQUIRED BY LAW, AT LEAST FIVE
BUSINESS DAYS’ NOTICE TO BORROWER OF THE TIME AND PLACE OF ANY PUBLIC SALE OR
THE TIME AFTER WHICH ANY PRIVATE SALE IS TO BE MADE SHALL CONSTITUTE REASONABLE
NOTIFICATION.  COLLATERAL AGENT MAY ADJOURN ANY PUBLIC OR PRIVATE SALE FROM TIME
TO TIME BY ANNOUNCEMENT AT THE TIME AND PLACE FIXED THEREFOR, AND SUCH SALE MAY,
WITHOUT FURTHER NOTICE, BE MADE AT THE TIME AND PLACE TO WHICH IT MAY BE SO
ADJOURNED.

 

(D)          SUBJECT TO THE PROVISIONS OF THE INTERCREDITOR AGREEMENT,
COLLATERAL AGENT MAY, AT ANY TIME OR FROM TIME TO TIME, APPLY FUNDS FROM TIME TO
TIME HELD IN THE CASH COLLATERAL ACCOUNT TO THE PAYMENT OF (I) ANY REIMBURSEMENT
OBLIGATION, AND (II) UPON TERMINATION OF ALL LETTERS OF CREDIT AND PAYMENT IN
FULL OF ALL THE REIMBURSEMENT OBLIGATION, TO THE OTHER SECURED OBLIGATIONS IN
SUCH ORDER AS COLLATERAL AGENT MAY ELECT.

 

(E)           NEITHER BORROWER NOR ANY PERSON CLAIMING ON BEHALF OF OR THROUGH
BORROWER SHALL HAVE ANY RIGHT TO WITHDRAW ANY OF THE FUNDS HELD IN THE CASH
COLLATERAL ACCOUNT.

 

4.4           NO LIABILITY OF ISSUING LENDER.  BORROWERS ASSUME ALL RISKS OF THE
ACTS OR OMISSIONS OF ANY BENEFICIARY OR TRANSFEREE OF ANY LETTER OF CREDIT WITH
RESPECT TO ITS USE OF SUCH LETTER OF CREDIT. NEITHER ISSUING LENDER NOR ANY OF
ITS OFFICERS OR DIRECTORS SHALL BE LIABLE OR

 

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RESPONSIBLE FOR (A) THE USE THAT MAY BE MADE OF ANY LETTER OF CREDIT OR ANY ACTS
OR OMISSIONS OF ANY BENEFICIARY OR TRANSFEREE IN CONNECTION THEREWITH; (B) THE
VALIDITY, SUFFICIENCY OR GENUINENESS OF DOCUMENTS, OR OF ANY ENDORSEMENT
THEREON, EVEN IF SUCH DOCUMENTS SHOULD PROVE TO BE IN ANY OR ALL RESPECTS
INVALID, INSUFFICIENT, FRAUDULENT OR FORGED; (C) PAYMENT BY ISSUING LENDER
AGAINST PRESENTATION OF DOCUMENTS THAT DO NOT COMPLY WITH THE TERMS OF A LETTER
OF CREDIT, INCLUDING FAILURE OF ANY DOCUMENTS TO BEAR ANY REFERENCE OR ADEQUATE
REFERENCE TO THE LETTER OF CREDIT; OR (D) ANY OTHER CIRCUMSTANCES WHATSOEVER IN
MAKING OR FAILING TO MAKE PAYMENT UNDER ANY LETTER OF CREDIT.  IN FURTHERANCE
AND NOT IN LIMITATION OF THE FOREGOING, ISSUING LENDER 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.

 

4.5           INDEMNIFICATION.  IN ADDITION TO ANY OTHER INDEMNIFICATION
OBLIGATION OF BORROWER UNDER THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT,
BORROWERS HEREBY AGREE TO INDEMNIFY AND HOLD THE LENDER PARTIES HARMLESS FROM
AND AGAINST ANY AND ALL INDEMNIFIED LOSSES WHICH THE LENDER PARTIES MAY INCUR OR
WHICH MAY BE CLAIMED AGAINST THE LENDER PARTIES BY ANY PERSON BY REASON OF OR IN
CONNECTION WITH THE EXECUTION AND DELIVERY OR TRANSFER OF, OR PAYMENT OR FAILURE
TO MAKE LAWFUL PAYMENT UNDER, ANY LETTER OF CREDIT.

 

4.6           PRO RATA PARTICIPATION, DRAWING AND REIMBURSEMENT WITH RESPECT TO
LETTERS OF CREDIT.

 

(A)          WITHOUT ANY FURTHER ACTION ON THE PART OF ANY LENDER PARTY,
EFFECTIVE IMMEDIATELY UPON THE ISSUANCE OF ANY LETTER OF CREDIT ISSUED UNDER
THIS AGREEMENT, ISSUING LENDER WILL BE DEEMED TO HAVE SOLD, TRANSFERRED, AND
ASSIGNED TO EACH REVOLVING LOAN LENDER AT SUCH TIME, AND EACH REVOLVING LOAN
LENDER WILL HAVE BEEN DEEMED TO HAVE PURCHASED AND ACCEPTED FROM ISSUING LENDER,
SUCH REVOLVING LOAN LENDER’S PRO RATA SHARE OF ISSUING LENDER’S INTEREST IN THE
APPLICABLE LETTER OF CREDIT (SUCH PRO RATA SHARE TO BE DETERMINED WITHOUT TAKING
INTO ACCOUNT SUCH REVOLVING LOAN LENDER’S OBLIGATION TO PURCHASE AS PROVIDED IN
THIS SECTION 4.6), WHICH PURCHASE SHALL UNCONDITIONALLY OBLIGATE EACH REVOLVING
LOAN LENDER TO PURCHASE FROM ISSUING LENDER SUCH REVOLVING LOAN LENDER’S PRO
RATA SHARE OF ANY LETTER OF CREDIT ADVANCE IN ACCORDANCE WITH THE PROVISIONS OF
SECTION 4.6(C) BELOW, AND UPON SUCH PURCHASE, SHALL ENTITLE EACH REVOLVING LOAN
LENDER, IN ACCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF THIS AGREEMENT, TO
RECEIVE SUCH REVOLVING LOAN LENDER’S PRO RATA SHARE OF ANY AND ALL PAYMENTS MADE
BY BORROWER WITH RESPECT TO THE APPLICABLE LETTER OF CREDIT AND WHETHER REQUIRED
HEREUNDER OR UNDER ANY LETTER OF CREDIT AGREEMENT.

 

(B)           THE PAYMENT BY ISSUING LENDER OF A DRAFT DRAWN UNDER ANY LETTER OF
CREDIT SHALL CONSTITUTE FOR ALL PURPOSES OF THIS AGREEMENT THE MAKING BY ISSUING
LENDER OF A LETTER OF CREDIT ADVANCE IN THE AMOUNT OF SUCH DRAFT.

 

(C)           UPON WRITTEN DEMAND BY ISSUING LENDER, WITH A COPY OF SUCH DEMAND
TO AGENT, EACH REVOLVING LOAN LENDER SHALL PURCHASE FROM ISSUING LENDER, AND
ISSUING LENDER SHALL SELL AND ASSIGN TO EACH SUCH REVOLVING LOAN LENDER, SUCH
REVOLVING LOAN LENDER’S PRO RATA SHARE OF ANY OUTSTANDING LETTER OF CREDIT
ADVANCE AS OF THE DATE OF SUCH PURCHASE, BY MAKING AVAILABLE TO AGENT FOR THE
ACCOUNT OF ISSUING LENDER, BY DEPOSIT TO THE AGENT’S ACCOUNT, IN SAME DAY FUNDS,
AN AMOUNT EQUAL TO THE PORTION OF THE OUTSTANDING PRINCIPAL AMOUNT OF SUCH
LETTER OF CREDIT ADVANCE TO BE PURCHASED BY SUCH REVOLVING LOAN LENDER.  IF SUCH
REVOLVING

 

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LOAN LENDER SHALL PAY TO AGENT SUCH AMOUNT FOR THE ACCOUNT OF ISSUING LENDER,
SUCH AMOUNT SO PAID IN RESPECT OF PRINCIPAL SHALL CONSTITUTE A REVOLVING LOAN
ADVANCE MADE BY SUCH REVOLVING LOAN LENDER FOR PURPOSES OF THIS AGREEMENT, AND
THE OUTSTANDING AMOUNT OF THE LETTER OF CREDIT ADVANCES SHALL BE REDUCED BY SUCH
AMOUNT.  PROMPTLY AFTER RECEIPT THEREOF, AGENT SHALL TRANSFER SUCH FUNDS TO
ISSUING LENDER.  BORROWER HEREBY AGREES TO EACH SUCH SALE AND ASSIGNMENT.  EACH
REVOLVING LOAN LENDER UNCONDITIONALLY AGREES TO PURCHASE ITS PRO RATA SHARE OF
AN OUTSTANDING LETTER OF CREDIT ADVANCE ON (I) THE BUSINESS DAY ON WHICH DEMAND
THEREFOR IS MADE BY ISSUING LENDER, PROVIDED NOTICE OF SUCH DEMAND IS GIVEN NOT
LATER THAN 11:00 A.M. (CHARLOTTE, NORTH CAROLINA TIME) ON SUCH BUSINESS DAY, OR
(II) THE FIRST BUSINESS DAY NEXT SUCCEEDING SUCH DEMAND IF NOTICE OF SUCH DEMAND
IS GIVEN AFTER SUCH TIME.  UPON ANY SUCH ASSIGNMENT BY ISSUING LENDER TO ANY
REVOLVING LOAN LENDER OF A PORTION OF A LETTER OF CREDIT ADVANCE, ISSUING LENDER
REPRESENTS AND WARRANTS TO SUCH REVOLVING LOAN LENDER THAT ISSUING LENDER IS THE
LEGAL AND BENEFICIAL OWNER OF SUCH INTEREST BEING ASSIGNED BY IT, FREE AND CLEAR
OF ANY LIENS, BUT MAKES NO OTHER REPRESENTATION OR WARRANTY AND ASSUMES NO
RESPONSIBILITY WITH RESPECT TO SUCH LETTER OF CREDIT ADVANCE, THE LOAN DOCUMENTS
OR ANY LENDER PARTY.  IF AND TO THE EXTENT THAT ANY REVOLVING LOAN LENDER SHALL
NOT HAVE SO MADE THE AMOUNT OF SUCH LETTER OF CREDIT ADVANCE AVAILABLE TO THE
AGENT, SUCH REVOLVING LOAN LENDER AGREES TO PAY TO AGENT FORTHWITH ON DEMAND OF
AGENT SUCH AMOUNT TOGETHER WITH INTEREST THEREON, FOR EACH DAY FROM THE DATE OF
DEMAND BY ISSUING LENDER UNTIL THE DATE SUCH AMOUNT IS PAID TO AGENT FOR ITS
ACCOUNT OR THE ACCOUNT OF ISSUING LENDER, AS APPLICABLE, AT A RATE PER ANNUM
EQUAL TO THE GREATER OF (I) THE FEDERAL FUNDS RATE, OR (II) THE ADJUSTED ABR
RATE.

 

4.7           FAILURE TO PURCHASE PRO RATA SHARE OF LETTER OF CREDIT ADVANCES. 
THE FAILURE OF ANY LENDER TO PURCHASE ITS PRO RATA SHARE OF ANY LETTER OF CREDIT
ADVANCE AS REQUIRED IN SECTION 4.6 SHALL NOT RELIEVE ANY OTHER LENDER OF ITS
OBLIGATION HEREUNDER TO PURCHASE ITS PRO RATA SHARE OF SUCH LETTER OF CREDIT
ADVANCE, BUT NO LENDER SHALL BE RESPONSIBLE FOR THE FAILURE OF ANY OTHER LENDER
TO PURCHASE ITS PRO RATA SHARE OF ANY LETTER OF CREDIT ADVANCE.

 

4.8           LETTER OF CREDIT REPORTS.  ISSUING LENDER SHALL FURNISH TO AGENT
AND EACH REVOLVING LOAN LENDER ON REQUEST (SUCH REQUEST TO BE MADE NOT MORE
FREQUENTLY THAN MONTHLY) A WRITTEN REPORT SUMMARIZING ISSUANCE AND EXPIRATION
DATES OF THE LETTERS OF CREDIT ISSUED BY ISSUING LENDER AND DRAWINGS UNDER ALL
LETTERS OF CREDIT.

 

ARTICLE V

 

5.             THE TERM LOAN

 

5.1           GENERAL TERMS.  SUBJECT TO THE TERMS HEREOF, TERM LOAN LENDERS
WILL LEND TO BORROWERS IN A SINGLE TERM LOAN BORROWING AT THE CLOSING, AN AMOUNT
WHICH SHALL NOT EXCEED THE TERM LOAN COMMITMENT, WHICH TERM LOAN BORROWING SHALL
CONSIST OF TERM LOAN ADVANCES MADE SIMULTANEOUSLY BY THE TERM LOAN LENDERS PRO
RATA.

 

5.2           THE TERM NOTES.  BORROWERS’ OBLIGATION TO REPAY THE TERM LOAN
SHALL BE EVIDENCED BY THE TERM NOTES.

 

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5.3           INTEREST RATE.  INTEREST ON THE TERM LOAN SHALL BE CALCULATED AS
FOLLOWS:

 

(A)          EXCEPT AS PROVIDED IN THE IMMEDIATELY SUCCEEDING SUBPARAGRAPHS
(B) AND (C), DURING THE ENTIRE TERM OF THE TERM NOTES, THE OUTSTANDING PRINCIPAL
BALANCE OF THE TERM NOTES SHALL BEAR INTEREST AT THE ADJUSTED LIBOR MARKET INDEX
RATE.

 

(B)           A BORROWER’S REPRESENTATIVE MAY FROM TIME TO TIME DELIVER TO AGENT
A NOTICE OF BORROWING OR A NOTICE OF CONTINUATION/CONVERSION, ELECTING TO HAVE
ALL OR A PORTION OF THE OUTSTANDING PRINCIPAL BALANCE OF THE TERM LOAN ACCRUE
INTEREST BASED ON THE LIBOR RATE, IN WHICH CASE THE APPLICABLE LIBOR RATE
BORROWING SHALL BEAR INTEREST AT THE ADJUSTED LIBOR RATE DURING THE APPLICABLE
LIBOR RATE INTEREST PERIOD.  FOLLOWING THE EXPIRATION OF ANY APPLICABLE LIBOR
RATE INTEREST PERIOD, IF A BORROWER’S REPRESENTATIVE SHALL NOT HAVE TIMELY AND
PROPERLY DELIVERED A NOTICE OF CONVERSION/CONTINUATION ELECTING A LIBOR RATE
INTEREST PERIOD TO COMMENCE AS OF THE EXPIRATION OF THE APPLICABLE EXPIRING
LIBOR RATE INTEREST PERIOD, THEN THE APPLICABLE LIBOR RATE BORROWING SHALL
AUTOMATICALLY BEAR INTEREST AT THE ADJUSTED LIBOR MARKET INDEX RATE.

 

(C)           A BORROWER’S REPRESENTATIVE MAY FROM TIME TO TIME DELIVER TO AGENT
A NOTICE OF BORROWING OR A NOTICE OF CONTINUATION/CONVERSION, ELECTING TO HAVE
ALL OR A PORTION OF THE OUTSTANDING PRINCIPAL BALANCE OF THE TERM LOAN ACCRUE
INTEREST BASED ON THE ABR RATE, IN WHICH CASE SUCH ABR RATE BORROWING SHALL BEAR
INTEREST AT THE ADJUSTED ABR RATE.  SUCH ABR RATE BORROWING SHALL CONTINUE TO
BEAR INTEREST AT THE ADJUSTED ABR RATE UNTIL SUCH TIME AS A BORROWER’S
REPRESENTATIVE SHALL HAVE DELIVERED TO AGENT A NOTICE OF
CONTINUATION/CONVERSION, ELECTING TO HAVE SUCH ABR BORROWING BEAR INTEREST AT
THE ADJUSTED LIBOR MARKET INDEX RATE OR THE ADJUSTED LIBOR RATE.

 

(D)          NOTWITHSTANDING THE FOREGOING, THERE SHALL NOT BE MORE THAN FOUR
(4) BORROWINGS OUTSTANDING AT ANY TIME WITH RESPECT TO THE TERM LOAN.

 

5.4           PAYMENTS OF PRINCIPAL AND INTEREST.  PRINCIPAL AND INTEREST ON THE
TERM LOAN SHALL BE PAYABLE AS FOLLOWS:

 

(A)          ON THE FIRST INTEREST PAYMENT DUE DATE FOLLOWING THE DATE OF THE
TERM NOTES, AND ON EACH SUCCESSIVE INTEREST PAYMENT DUE DATE THEREAFTER UNTIL
THE ENTIRE INDEBTEDNESS EVIDENCED BY THE TERM NOTES IS PAID IN FULL, BORROWERS
SHALL PAY TO AGENT FOR THE ACCOUNT OF THE TERM LOAN LENDERS (BASED ON EACH TERM
LOAN LENDER’S TERM LOAN CREDIT PERCENTAGE AT SUCH TIME) ALL ACCRUED AND UNPAID
INTEREST ON THE OUTSTANDING PRINCIPAL BALANCE OF THE TERM NOTES.

 

(B)           ON THE FIRST PRINCIPAL PAYMENT DUE DATE FOLLOWING THE DATE OF THE
TERM NOTES, AND ON EACH SUCCESSIVE PRINCIPAL PAYMENT DUE DATE THEREAFTER UNTIL
THE ENTIRE INDEBTEDNESS EVIDENCED BY THE TERM NOTES IS PAID IN FULL, BORROWERS
SHALL PAY TO AGENT FOR THE ACCOUNT OF THE TERM LOAN LENDERS (BASED ON EACH TERM
LOAN LENDER’S TERM LOAN CREDIT PERCENTAGE AT SUCH TIME) A PRINCIPAL PAYMENT EACH
IN THE AMOUNT OF (I) ON THE FIRST TWENTY-FOUR (24) PRINCIPAL PAYMENT DUE DATES,
$458,333.33; AND (II) THEREAFTER, $666,667.00.

 

(C)           IF NOT EARLIER DEMANDED PURSUANT TO SECTION 11.3 HEREOF, THE
OUTSTANDING PRINCIPAL BALANCE OF THE TERM LOAN, TOGETHER WITH ALL ACCRUED AND
UNPAID INTEREST THEREON, SHALL

 

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BE DUE AND PAYABLE TO AGENT FOR THE ACCOUNT OF THE TERM LOAN LENDERS (BASED ON
EACH TERM LOAN LENDER’S TERM LOAN CREDIT PERCENTAGE AT SUCH TIME) ON THE TERM
LOAN MATURITY DATE.

 

5.5           USE OF PROCEEDS OF TERM LOAN.  THE PROCEEDS OF THE TERM LOAN SHALL
BE USED TO REFINANCE EXISTING INDEBTEDNESS OF BORROWERS AND TO PURCHASE CERTAIN
ASSETS IN ACCORDANCE WITH THE TERMS OF THE AIR PRODUCTS APA.

 

ARTICLE VI

 

6.             PAYMENTS, ADDITIONAL COSTS, ETC.

 

6.1           PAYMENT TO AGENT.

 

(A)          ALL MONIES PAYABLE TO LENDER PARTIES UNDER THIS AGREEMENT OR UNDER
ANY OTHER LOAN DOCUMENT SHALL BE PAID DIRECTLY TO AGENT IN IMMEDIATELY AVAILABLE
FUNDS AT THE PLACE FOR PAYMENT.  IF AGENT SHALL SEND BORROWERS STATEMENTS OF
AMOUNTS DUE HEREUNDER, SUCH STATEMENTS SHALL BE CONSIDERED CORRECT AND
CONCLUSIVELY BINDING ON BORROWERS UNLESS BORROWER NOTIFIES AGENT TO THE CONTRARY
WITHIN THIRTY (30) DAYS OF ITS RECEIPT OF ANY STATEMENT WHICH IT DEEMS TO BE
INCORRECT.  ALTERNATIVELY, AT ITS DISCRETION, AGENT MAY CHARGE AGAINST ANY
DEPOSIT ACCOUNT OF BORROWER ALL OR ANY PART OF ANY AMOUNT OWED BY BORROWER
HEREUNDER.

 

(B)           ALL PAYMENTS TO BE MADE BY BORROWER HEREUNDER WILL BE MADE TO
AGENT NOT LATER THAN 1:00 P.M. AT THE PLACE FOR PAYMENT.  PAYMENTS RECEIVED
AFTER 1:00 P.M. AT THE PLACE FOR PAYMENT SHALL BE DEEMED TO BE PAYMENTS MADE
PRIOR TO 1:00 P.M. AT THE PLACE FOR PAYMENT ON THE NEXT SUCCEEDING BUSINESS
DAY.  BORROWER HEREBY AUTHORIZES AGENT TO CHARGE ITS ACCOUNTS WITH AGENT IN
ORDER TO CAUSE TIMELY PAYMENT OF AMOUNTS DUE HEREUNDER TO BE MADE.

 

(C)           AT THE TIME OF MAKING EACH SUCH PAYMENT, BORROWER SHALL, SUBJECT
TO THE OTHER TERMS AND CONDITIONS OF THIS AGREEMENT, SPECIFY TO AGENT THE LOAN
OR OTHER OBLIGATION OF BORROWER HEREUNDER TO WHICH SUCH PAYMENT IS TO BE
APPLIED.  IN THE EVENT THAT BORROWER FAILS TO SO SPECIFY THE RELEVANT LOAN OR IF
AN EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING, AGENT MAY APPLY SUCH
PAYMENTS AS IT MAY DETERMINE IN ITS DISCRETION.

 

6.2           LATE PAYMENTS.  IF ANY SCHEDULED PAYMENT, WHETHER PRINCIPAL,
INTEREST OR PRINCIPAL AND INTEREST, IS LATE FIFTEEN (15) DAYS OR MORE, BORROWER
AGREES TO PAY A LATE CHARGE EQUAL TO FIVE PERCENT (5%) OF THE AMOUNT OF THE
PAYMENT WHICH IS LATE, BUT NOT MORE THAN THE LESSER OF $10,000.00 OR THE MAXIMUM
AMOUNT ALLOWED BY APPLICABLE LAWS.  THE FOREGOING PROVISION SHALL NOT BE DEEMED
TO EXCUSE A LATE PAYMENT OR BE DEEMED A WAIVER OF ANY OTHER RIGHTS LENDER
PARTIES MAY HAVE UNDER THIS AGREEMENT, INCLUDING, SUBJECT TO THE TERMS HEREOF,
THE RIGHT TO DECLARE THE ENTIRE UNPAID PRINCIPAL AND INTEREST ON ALL LOANS
IMMEDIATELY DUE AND PAYABLE.

 

6.3           PREPAYMENT.

 

(A)          BORROWER MAY PREPAY OR CAUSE TO BE PREPAID THE PRINCIPAL OF THE
LOANS IN WHOLE OR, FROM TIME TO TIME, IN PART, WITHOUT PREMIUM OR PENALTY;
PROVIDED, HOWEVER, THAT EXCEPT AS MAY BE AGREED BETWEEN BORROWER AND SWING LINE
LENDER WITH RESPECT TO THE SWING LINE LOAN, PARTIAL PREPAYMENTS SHALL BE IN AN
AGGREGATE PRINCIPAL AMOUNT OF NOT LESS THAN $25,000.00 (OR, IF GREATER, IN
INTEGRAL MULTIPLES OF $25,000.00 IN EXCESS THEREOF).

 

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(B)           ALL PARTIAL PREPAYMENTS, WHETHER VOLUNTARY OR MANDATORY, SHALL BE
APPLIED AGAINST PRINCIPAL AND INTEREST AS AGENT MAY DETERMINE IN ITS DISCRETION
(SUBJECT TO THE PROVISIONS OF THE INTERCREDITOR AGREEMENT), PROVIDED THAT NO
PREPAYMENT SHALL ENTITLE BORROWERS TO CEASE MAKING ANY PAYMENT AS OTHERWISE
SCHEDULED HEREUNDER.

 

(C)           NO PREPAYMENT OF ANY LOAN SHALL ALTER THE NOTIONAL AMOUNT OF ANY
TRANSACTION UNDER ANY LENDER PARTY SWAP DOCUMENT OR OTHERWISE AFFECT ANY
BORROWER PARTY’S OBLIGATIONS UNDER ANY LENDER PARTY SWAP DOCUMENTS, WHICH SHALL
REMAIN IN FULL FORCE AND EFFECT NOTWITHSTANDING SUCH PREPAYMENT, SUBJECT TO THE
TERMS OF SUCH LENDER PARTY SWAP DOCUMENTS.

 

6.4           DEFAULT RATE.  NOTWITHSTANDING ANY PROVISION HEREIN OR IN ANY
OTHER LOAN DOCUMENT TO THE CONTRARY, UPON THE OCCURRENCE AND DURING THE
CONTINUANCE OF AN EVENT OF DEFAULT, THE INTEREST RATE PAYABLE ON THE LOANS SHALL
BE THE DEFAULT RATE.

 

6.5           NO SETOFF OR DEDUCTION.  ALL PAYMENTS OF PRINCIPAL OF AND INTEREST
ON THE LOANS AND OTHER AMOUNTS PAYABLE BY BORROWERS HEREUNDER SHALL BE MADE BY
BORROWERS WITHOUT SETOFF OR COUNTERCLAIM, AND, SUBJECT TO THE NEXT SUCCEEDING
SENTENCE, FREE AND CLEAR OF, AND WITHOUT DEDUCTION OR WITHHOLDING FOR, OR ON
ACCOUNT OF, ANY PRESENT OR FUTURE TAXES, LEVIES, IMPOSTS, DUTIES, FEES,
ASSESSMENTS, OR OTHER CHARGES OF WHATEVER NATURE, IMPOSED BY ANY GOVERNMENTAL
AUTHORITY, OR BY ANY DEPARTMENT, AGENCY OR OTHER POLITICAL SUBDIVISION OR TAXING
AUTHORITY.  IF ANY SUCH TAXES, LEVIES, IMPOSTS, DUTIES, FEES, ASSESSMENTS OR
OTHER CHARGES ARE IMPOSED, BORROWERS WILL PAY SUCH ADDITIONAL AMOUNTS AS MAY BE
NECESSARY SO THAT PAYMENT OF PRINCIPAL OF AND INTEREST ON THE LOANS AND OTHER
AMOUNTS PAYABLE HEREUNDER, AFTER WITHHOLDING OR DEDUCTION FOR OR ON ACCOUNT
THEREOF, WILL NOT BE LESS THAN ANY AMOUNT PROVIDED TO BE PAID HEREUNDER AND, IN
ANY SUCH CASE, BORROWERS WILL FURNISH TO AGENT CERTIFIED COPIES OF ALL TAX
RECEIPTS EVIDENCING THE PAYMENT OF SUCH AMOUNTS WITHIN 30 DAYS AFTER THE DATE
ANY SUCH PAYMENT IS DUE PURSUANT TO APPLICABLE LAWS.

 

6.6           PAYMENT ON NON-BUSINESS DAY; PAYMENT COMPUTATIONS.  EXCEPT AS
OTHERWISE PROVIDED IN THIS AGREEMENT TO THE CONTRARY, WHENEVER ANY INSTALLMENT
OF PRINCIPAL OF, OR INTEREST ON, ANY LOAN OR OTHER AMOUNT DUE HEREUNDER BECOMES
DUE AND PAYABLE ON A DAY WHICH IS NOT A BUSINESS DAY, THE MATURITY THEREOF SHALL
BE EXTENDED TO THE NEXT SUCCEEDING BUSINESS DAY (UNLESS SUCH NEXT SUCCEEDING
BUSINESS DAY DOES NOT FALL WITHIN THE SAME CALENDAR MONTH, IN WHICH CASE THE
MATURITY THEREOF SHALL BE SHORTENED TO THE IMMEDIATELY PRECEDING BUSINESS DAY). 
IN THE CASE OF ANY EXTENSION IN THE TIME FOR PAYMENT OF ANY INSTALLMENT OF
PRINCIPAL, INTEREST SHALL BE PAYABLE THEREON AT THE RATE PER ANNUM DETERMINED IN
ACCORDANCE WITH THIS AGREEMENT DURING SUCH EXTENSION.

 

6.7           INDEMNIFICATION.  IF BORROWERS MAKE ANY PAYMENT OF PRINCIPAL WITH
RESPECT TO ANY LIBOR RATE BORROWING ON ANY OTHER DATE THAN THE LAST DAY OF A
LIBOR RATE INTEREST PERIOD APPLICABLE THERETO, OR IF BORROWERS FAIL TO BORROW
ANY LIBOR RATE BORROWING AFTER NOTICE HAS BEEN GIVEN TO AGENT IN ACCORDANCE WITH
THIS AGREEMENT, OR IF BORROWERS FAIL TO MAKE ANY PAYMENT OF PRINCIPAL OR
INTEREST IN RESPECT OF ANY LIBOR RATE BORROWING WHEN DUE, BORROWERS SHALL
REIMBURSE THE APPLICABLE LENDER ON DEMAND FOR ANY RESULTING LOSS OR EXPENSE
INCURRED BY SUCH LENDER, INCLUDING WITHOUT LIMITATION ANY LOSS INCURRED IN
OBTAINING, LIQUIDATING OR EMPLOYING DEPOSITS FROM THIRD PARTIES, WHETHER OR NOT
SUCH LENDER SHALL HAVE FUNDED OR COMMITTED TO FUND SUCH LIBOR RATE BORROWING.  A
STATEMENT AS TO THE AMOUNT OF SUCH LOSS OR

 

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EXPENSE, PREPARED IN GOOD FAITH AND IN REASONABLE DETAIL BY SUCH LENDER AND
SUBMITTED BY SUCH LENDER TO BORROWERS, SHALL BE CONCLUSIVE AND BINDING FOR ALL
PURPOSES ABSENT MANIFEST ERROR IN COMPUTATION.  CALCULATION OF ALL AMOUNTS
PAYABLE TO A LENDER UNDER THIS SECTION SHALL BE MADE AS THOUGH SUCH LENDER SHALL
HAVE ACTUALLY FUNDED OR COMMITTED TO FUND SUCH LIBOR RATE BORROWING THROUGH THE
PURCHASE OF AN UNDERLYING DEPOSIT IN AN AMOUNT EQUAL TO THE AMOUNT OF SUCH LIBOR
RATE BORROWING IN THE RELEVANT MARKET AND HAVING A MATURITY COMPARABLE TO THE
RELATED LIBOR RATE INTEREST PERIOD AND THROUGH THE TRANSFER OF SUCH DEPOSIT TO A
DOMESTIC OFFICE OF SUCH LENDER IN THE UNITED STATES; PROVIDED, HOWEVER, THAT
EACH LENDER MAY FUND SUCH LIBOR RATE BORROWING IN ANY MANNER IT SEES FIT AND THE
FOREGOING ASSUMPTION SHALL BE UTILIZED ONLY FOR THE PURPOSE OF CALCULATION OF
AMOUNTS PAYABLE UNDER THIS SECTION.

 

6.8           360-DAY YEAR.  ALL INTEREST PAYABLE UNDER THE NOTES AND ALL FEES
PAYABLE TO LENDER PARTIES SHALL BE CALCULATED ON THE BASIS OF A 360-DAY YEAR BY
MULTIPLYING THE APPLICABLE AMOUNT BY THE APPLICABLE PER ANNUM RATE, MULTIPLYING
THE PRODUCT THEREOF BY THE ACTUAL NUMBER OF DAYS ELAPSED, AND DIVIDING THE
PRODUCT SO OBTAINED BY 360.

 

6.9           NO REQUIREMENT TO ACTUALLY OBTAIN FUNDS.  NOTWITHSTANDING THE FACT
THAT THE INTEREST RATE PURSUANT TO THE LOANS MAY BE CALCULATED BASED UPON
LENDER’S COST OF FUNDS, BORROWERS AGREE THAT LENDER SHALL NOT BE REQUIRED
ACTUALLY TO OBTAIN FUNDS FROM SUCH SOURCE AT ANY TIME.

 

6.10         USURY LIMITATION.  IF AT ANY TIME THE INTEREST RATE PAYABLE ON THE
LOANS SHALL BE DEEMED BY ANY COMPETENT COURT OF LAW OR ANY GOVERNMENTAL
AUTHORITY TO EXCEED THE MAXIMUM RATE OF INTEREST PERMITTED BY ANY APPLICABLE
LAWS, THEN, FOR SUCH TIME AS THE INTEREST RATE WOULD BE DEEMED EXCESSIVE, ITS
APPLICATION SHALL BE SUSPENDED AND THERE SHALL BE CHARGED INSTEAD THE MAXIMUM
RATE OF INTEREST PERMISSIBLE UNDER SUCH LAWS, AND ANY EXCESS INTEREST ACTUALLY
COLLECTED BY LENDER SHALL BE CREDITED AS A PARTIAL PREPAYMENT OF PRINCIPAL.

 

6.11         RATABLE SHARING.  IF ANY LENDER SHALL OBTAIN ANY PAYMENT OR
REDUCTION (INCLUDING ANY AMOUNTS RECEIVED AS ADEQUATE PROTECTION OF A BANK
ACCOUNT DEPOSIT TREATED AS CASH COLLATERAL UNDER THE BANKRUPTCY CODE) OF ANY
CREDIT AGREEMENT OBLIGATION HEREUNDER (WHETHER VOLUNTARY, INVOLUNTARY, THROUGH
THE EXERCISE OF ANY RIGHT OF SET OFF OR OTHERWISE) IN EXCESS OF ITS PRO RATA
SHARE OF PAYMENTS OR REDUCTIONS ON ACCOUNT OF SUCH CREDIT AGREEMENT OBLIGATIONS
OBTAINED BY ALL OF THE LENDERS, SUCH LENDER SHALL FORTHWITH (I) NOTIFY THE OTHER
LENDERS AND AGENT OF SUCH RECEIPT AND (II) PURCHASE FROM THE OTHER LENDERS SUCH
PARTICIPATIONS IN THE AFFECTED CREDIT AGREEMENT OBLIGATIONS AS SHALL BE
NECESSARY TO CAUSE SUCH PURCHASING LENDER TO SHARE THE EXCESS PAYMENT OR
REDUCTION, NET OF COSTS INCURRED IN CONNECTION THEREWITH, ON A PRO RATA BASIS,
PROVIDED THAT IF ALL OR ANY PORTION OF SUCH EXCESS PAYMENT OR REDUCTION IS
THEREAFTER RECOVERED FROM SUCH PURCHASING LENDER OR ADDITIONAL COSTS ARE
INCURRED, THE PURCHASE SHALL BE RESCINDED AND THE PURCHASE PRICE RESTORED TO THE
EXTENT OF SUCH RECOVERY OR SUCH ADDITIONAL COSTS, BUT WITHOUT INTEREST. 
BORROWER AGREES THAT ANY LENDER SO PURCHASING A PARTICIPATION FROM ANOTHER
LENDER PURSUANT TO THIS SECTION 6.11 MAY, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, EXERCISE ALL OF ITS RIGHTS OF PAYMENT (INCLUDING THE RIGHT OF
SET OFF) WITH RESPECT TO SUCH PARTICIPATION AS FULLY AS IF SUCH LENDER WERE THE
DIRECT CREDITOR OF BORROWER IN THE AMOUNT OF SUCH PARTICIPATION.

 

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ARTICLE VII

 

7.             CONDITIONS PRECEDENT

 

The obligation of Lenders to make the Loans and any Advance hereunder, and the
obligation of Issuing Lender to issue any Letter of Credit, is subject to the
following conditions precedent:

 

7.1           DOCUMENTS REQUIRED FOR THE CLOSING.  PRIOR TO OR CONCURRENTLY WITH
THE CLOSING, THE FOLLOWING INSTRUMENTS AND DOCUMENTS, DULY EXECUTED BY ALL
PROPER PERSONS AND IN FORM AND SUBSTANCE SATISFACTORY TO AGENT AND COLLATERAL
AGENT, SHALL HAVE BEEN DELIVERED TO AGENT:

 

(A)          THIS AGREEMENT;

 

(B)           THE NOTES;

 

(C)           THE INTERCREDITOR AGREEMENT AND COPIES OF THE PRUDENTIAL LOAN
DOCUMENTS;

 

(D)          THE PLEDGE AGREEMENT, TOGETHER WITH THE ORIGINAL STOCK
CERTIFICATES, STOCK POWERS AND OTHER ITEMS REQUIRED TO BE DELIVERED THEREUNDER;

 

(E)           THE MORTGAGES, TOGETHER WITH THE FOLLOWING:

 

(1)           EVIDENCE THAT THE MORTGAGES HAVE BEEN DULY RECORDED IN ALL FILING
OR RECORDING OFFICES THAT COLLATERAL AGENT MAY DEEM NECESSARY OR DESIRABLE IN
ORDER TO CREATE A VALID LIEN ON THE MORTGAGED PROPERTY IN FAVOR OF COLLATERAL
AGENT SUBJECT TO NO OTHER LIENS, AND THAT ALL FILING AND RECORDING TAXES AND
FEES HAVE BEEN PAID;

 

(2)           THE TITLE INSURANCE POLICIES, WITH THE REQUIRED ENDORSEMENTS AND
IN AN AMOUNT ACCEPTABLE TO COLLATERAL AGENT, ISSUED, COINSURED AND REINSURED BY
THE TITLE INSURANCE COMPANIES, INSURING THE MORTGAGES TO BE A VALID LIEN ON THE
MORTGAGED PROPERTY, FREE AND CLEAR OF ALL LIENS (INCLUDING, BUT NOT LIMITED TO,
MECHANICS’ AND MATERIALMEN’S LIENS), EXCEPTING ONLY PERMITTED LIENS AND OTHER
LIENS APPROVED BY COLLATERAL AGENT IN ITS DISCRETION, AND PROVIDING FOR SUCH
OTHER AFFIRMATIVE INSURANCE AND SUCH COINSURANCE AND DIRECT ACCESS REINSURANCE
AS COLLATERAL AGENT MAY DEEM NECESSARY OR DESIRABLE;

 

(3)           SUCH CONSENTS AND AGREEMENTS OF LESSORS, LESSEES, AND OTHER THIRD
PARTIES, AND SUCH ESTOPPEL LETTERS AND OTHER CONFIRMATIONS, AS COLLATERAL AGENT
MAY DEEM NECESSARY OR DESIRABLE;

 

(4)           EVIDENCE THAT ALL OTHER ACTION THAT COLLATERAL AGENT MAY DEEM
NECESSARY OR DESIRABLE IN ORDER TO CREATE A VALID LIEN ON THE MORTGAGED PROPERTY
HAS BEEN TAKEN;

 

(F)           THE CLOSING CERTIFICATES;

 

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(G)           THE FINANCING STATEMENTS, TOGETHER WITH EVIDENCE THAT SUCH
FINANCING STATEMENTS HAVE BEEN DULY RECORDED IN ALL FILING OR RECORDING OFFICES
THAT COLLATERAL AGENT MAY DEEM NECESSARY OR DESIRABLE IN ORDER TO PERFECT
COLLATERAL AGENT’S LIEN ON THE COLLATERAL, AND THAT ALL FILING AND RECORDING
TAXES AND FEES HAVE BEEN PAID;

 

(H)          WITH RESPECT TO EACH BORROWER PARTY (OTHER THAN A BORROWER PARTY
THAT IS AN INDIVIDUAL), A CERTIFICATE OF AN OFFICER OR OTHER REPRESENTATIVE
ACCEPTABLE TO AGENT DATED AS OF THE DATE OF THIS AGREEMENT, CERTIFYING AS TO THE
INCUMBENCY AND SIGNATURES OF THE REPRESENTATIVE(S) OF SUCH BORROWER PARTY
SIGNING, AS APPLICABLE, THIS AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS, AND
EACH OTHER DOCUMENT TO BE DELIVERED PURSUANT HERETO, TOGETHER WITH THE FOLLOWING
DOCUMENTS ATTACHED THERETO:

 

(1)           A COPY OF THE RESOLUTIONS OF SUCH APPLICABLE PERSON’S GOVERNING
BODY AUTHORIZING THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS AGREEMENT, EACH
OF THE LOAN DOCUMENTS, AND EACH OTHER DOCUMENT TO BE DELIVERED PURSUANT HERETO,
AS APPLICABLE;

 

(2)           A COPY, CERTIFIED AS OF THE MOST RECENT DATE PRACTICABLE BY THE
SECRETARY OF STATE (OR SIMILAR GOVERNMENTAL AUTHORITY) OF THE STATE, PROVINCE,
OR OTHER JURISDICTION WHERE SUCH PERSON IS ORGANIZED, OF SUCH PERSON’S
ORGANIZATIONAL DOCUMENTS FILED WITH SUCH SECRETARY OF STATE (OR SIMILAR
GOVERNMENTAL AUTHORITY);

 

(3)           A COPY OF SUCH PERSON’S OTHER ORGANIZATIONAL DOCUMENTS;

 

(I)            A CERTIFICATE, AS OF THE MOST RECENT DATE PRACTICABLE, OF THE
SECRETARY OF STATE (OR SIMILAR APPROPRIATE GOVERNMENTAL AUTHORITY) AND
DEPARTMENT OF REVENUE OR TAXATION (OR SIMILAR APPROPRIATE GOVERNMENTAL
AUTHORITY) OF EACH JURISDICTION IN WHICH EACH BORROWER PARTY (OTHER THAN A
BORROWER PARTY THAT IS AN INDIVIDUAL) IS ORGANIZED AS TO THE EXISTENCE AND GOOD
STANDING OF EACH SUCH PERSON WITHIN SUCH JURISDICTION, AND A CERTIFICATE, AS OF
THE MOST RECENT DATE PRACTICABLE, OF THE SECRETARY OF STATE (OR SIMILAR
APPROPRIATE GOVERNMENTAL AUTHORITY) OF EACH STATE WHERE ANY OF THE COLLATERAL IS
LOCATED AS TO THE QUALIFICATION AND GOOD STANDING OF BORROWER PARTY AS A FOREIGN
ENTITY DOING BUSINESS IN EACH SUCH STATE;

 

(J)            A WRITTEN OPINION OF COUNSEL TO BORROWERS, DATED AS OF THE DATE
OF CLOSING AND ADDRESSED TO LENDER PARTIES, IN FORM AND SUBSTANCE ACCEPTABLE TO
AGENT;

 

(K)          THE MOST RECENT FINANCIAL STATEMENTS AND THE CLOSING BALANCE SHEET,
EACH IN FORM AND SUBSTANCE ACCEPTABLE TO AGENT;

 

(L)           CERTIFICATES, IN FORM AND SUBSTANCE SATISFACTORY TO AGENT,
ATTESTING TO THE SOLVENCY OF BORROWERS AND AFTER GIVING EFFECT TO THE
TRANSACTIONS CONTEMPLATED HEREBY;

 

(M)         UCC-11 REPORTS SHOWING NO LIENS SUPERIOR TO THE COLLATERAL AGENT’S
LIEN, EXCEPT FOR THE PERMITTED LIENS;

 

(N)          AN ALTA FORM SURVEY OF EACH PARCEL OF MORTGAGED PROPERTY, EACH SUCH
SURVEY TO BE IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO COLLATERAL AGENT,
CERTIFIED TO COLLATERAL AGENT AND THE APPLICABLE TITLE INSURANCE COMPANY AND
PREPARED BY A LAND SURVEYOR DULY REGISTERED AND LICENSED IN THE STATE IN WHICH
THE APPLICABLE MORTGAGED PROPERTY IS LOCATED

 

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AND ACCEPTABLE TO COLLATERAL AGENT, SHOWING ALL BUILDINGS AND OTHER
IMPROVEMENTS, THE LOCATION OF ANY EASEMENTS, RIGHTS OF WAY, BUILDING SET BACK
LINES AND OTHER DIMENSIONAL REGULATIONS AND THE ABSENCE OF ENCROACHMENTS, EITHER
BY SUCH IMPROVEMENTS OR ON TO SUCH PROPERTY, AND OTHER DEFECTS, OTHER THAN
ENCROACHMENTS AND OTHER DEFECTS ACCEPTABLE TO COLLATERAL AGENT, AND EITHER
(I) EVIDENCE SATISFACTORY TO COLLATERAL AGENT THAT NONE OF THE MORTGAGED
PROPERTY IS LOCATED IN A FLOOD HAZARD AREA, OR (II) A FLOOD INSURANCE POLICY
SATISFACTORY TO COLLATERAL AGENT;

 

(O)          AN APPRAISAL OF THE EQUIPMENT AND MORTGAGED PROPERTY TO BE OWNED BY
THE BORROWER CONSOLIDATED GROUP AFTER THE CLOSING, MADE AT BORROWER’S EXPENSE,
WHICH MUST BE BY AN APPRAISER ENGAGED AND APPROVED BY AGENT, AND IN FORM AND
SUBSTANCE SATISFACTORY TO AGENT, AND REFLECTING A VALUE OF THE COLLATERAL
SATISFACTORY TO AGENT;

 

(P)           AN ENVIRONMENTAL/HAZARDOUS SUBSTANCES SURVEY AND REPORT WITH
RESPECT TO THE MORTGAGED PROPERTY, AS APPROVED BY COLLATERAL AGENT;

 

(Q)          EXCEPT AS MAY BE WAIVED BY COLLATERAL AGENT, COPIES OF ANY ASSIGNED
LEASES THEN IN EFFECT, TOGETHER WITH ANY GUARANTIES OF SUCH ASSIGNED LEASES AND
ESTOPPEL CERTIFICATES AND SUBORDINATION, ATTORNMENT AND NON-DISTURBANCE
AGREEMENTS WITH RESPECT THERETO, ALL IN FORM AND SUBSTANCE ACCEPTABLE TO
COLLATERAL AGENT;

 

(R)           COPIES OF THE AIR PRODUCTS APA DOCUMENTS, AND EVIDENCE OF THE
CLOSING OF THE PURCHASE AND SALE THE SUBJECT THEREOF;

 

(S)           EVIDENCE SATISFACTORY TO COLLATERAL AGENT THAT BORROWERS HAVE
OBTAINED ALL INSURANCE POLICIES AS REQUIRED UNDER THIS AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS, TOGETHER WITH EVIDENCE SATISFACTORY TO COLLATERAL AGENT
THAT ALL PREMIUMS THEREFORE HAVE BEEN PAID AND THAT ALL SUCH POLICIES ARE IN
FULL FORCE AND EFFECT; AND

 

(T)           RECEIPT AND APPROVAL BY AGENT AND COLLATERAL AGENT OF ALL OTHER
ITEMS REASONABLY REQUIRED TO BE PROVIDED TO AGENT AND COLLATERAL AGENT, AND NOT
OTHERWISE SET FORTH ABOVE.

 

7.2           CERTAIN EVENTS REQUIRED FOR CLOSING AND FOR ALL ADVANCES.  AT THE
TIME OF THE CLOSING AND AT THE TIME OF EACH ADVANCE, AGENT SHALL BE SATISFIED
THAT:

 

(A)          NO DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING;

 

(B)           NO MATERIAL ADVERSE CHANGE SHALL HAVE OCCURRED;

 

(C)           ALL OF THE LOAN DOCUMENTS SHALL HAVE REMAINED IN FULL FORCE AND
EFFECT, AND NO BORROWER PARTY SHALL HAVE QUESTIONED OR CHALLENGED THE
ENFORCEABILITY OF ANY PROVISION OF ANY OF THE LOAN DOCUMENTS;

 

(D)          BORROWERS SHALL HAVE PAID THE FEES AND ALL OTHER FEES, EXPENSES,
COSTS AND OTHER AMOUNTS THEN OWING TO LENDER PARTIES;

 

(E)           ALL INDEBTEDNESS TO BE PREPAID, REDEEMED OR DEFEASED WITH THE
PROCEEDS OF ANY ADVANCE SHALL HAVE BEEN SATISFIED AND EXTINGUISHED
CONTEMPORANEOUSLY THEREWITH;

 

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(F)           THERE SHALL EXIST NO ACTION, SUIT, INVESTIGATION, LITIGATION OR
PROCEEDING AFFECTING ANY BORROWER PARTY PENDING OR THREATENED BEFORE ANY COURT,
GOVERNMENTAL AGENCY OR ARBITRATOR THAT (I) EXCEPT AS SET FORTH ON THE ATTACHED
SCHEDULE 7.2(F), WOULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT,
OR (II) PURPORTS TO AFFECT THE LEGALITY, VALIDITY OR ENFORCEABILITY OF THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED HEREBY;

 

(G)           ALL GOVERNMENTAL APPROVALS NECESSARY IN CONNECTION WITH THE LOAN
DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY SHALL HAVE BEEN
OBTAINED (WITHOUT THE IMPOSITION OF ANY CONDITIONS THAT ARE NOT ACCEPTABLE TO
AGENT) AND SHALL REMAIN IN EFFECT OTHER THAN SUCH GOVERNMENTAL APPROVALS THE
FAILURE TO OBTAIN WHICH SHALL NOT AFFECT THE ENFORCEABILITY, VALIDITY OR BINDING
EFFECT OF ANY OF THE LOAN DOCUMENTS; ALL APPLICABLE WAITING PERIODS SHALL HAVE
EXPIRED WITHOUT ANY ACTION BEING TAKEN BY ANY COMPETENT AUTHORITY; AND NO LAW
SHALL BE APPLICABLE IN THE JUDGMENT OF AGENT THAT RESTRAINS, PREVENTS OR IMPOSES
MATERIALLY ADVERSE CONDITIONS UPON THE LOAN DOCUMENTS AND THE TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY;

 

(H)          BORROWER WILL BE ABLE TO MEET ITS OBLIGATIONS UNDER ALL PLANS, THAT
THE PLANS ARE, IN ALL MATERIAL RESPECTS, FUNDED IN ACCORDANCE WITH THE MINIMUM
STATUTORY REQUIREMENTS, THAT NO MATERIAL “REPORTABLE EVENT” (AS DEFINED IN
ERISA, BUT EXCLUDING EVENTS FOR WHICH REPORTING HAS BEEN WAIVED) HAS OCCURRED AS
TO ANY SUCH PLAN AND THAT NO TERMINATION OF, OR WITHDRAWAL FROM, ANY SUCH PLAN
HAS OCCURRED OR IS CONTEMPLATED THAT COULD RESULT IN A MATERIAL LIABILITY;

 

(I)            THERE SHALL HAVE BEEN DELIVERED TO COLLATERAL AGENT EVIDENCE OF
INSURANCE NAMING COLLATERAL AGENT AS INSURED AND LOSS PAYEE (AS APPLICABLE) WITH
SUCH RESPONSIBLE AND REPUTABLE INSURANCE COMPANIES OR ASSOCIATIONS, AND IN SUCH
AMOUNTS AND COVERING SUCH RISKS, AS IS SATISFACTORY TO COLLATERAL AGENT OR AS
OTHERWISE REQUIRED UNDER ANY LOAN DOCUMENT; AND

 

(J)            THERE SHALL HAVE BEEN DELIVERED TO AGENT THE COLLATERAL REPORTS
AND COMPLIANCE CERTIFICATES AS REQUIRED UNDER THIS AGREEMENT AND REFLECTING
COMPLIANCE WITH THE TERMS OF THIS AGREEMENT.

 

7.3           LEGAL MATTERS.  AT THE TIME OF CLOSING, AND THE DISBURSEMENT OF
EACH ADVANCE, ALL LEGAL MATTERS INCIDENTAL THERETO SHALL BE SATISFACTORY TO
BURR & FORMAN LLP, COUNSEL TO AGENT AND COLLATERAL AGENT.

 

7.4           ELECTION TO MAKE ADVANCES PRIOR TO SATISFACTION OF CONDITIONS
PRECEDENT.  IN THE EVENT LENDER PARTY, AT ITS OPTION, ELECTS TO MAKE ONE OR MORE
ADVANCES PRIOR TO RECEIPT AND APPROVAL OF ALL ITEMS REQUIRED BY THIS ARTICLE,
SUCH ELECTION SHALL NOT CONSTITUTE ANY COMMITMENT OR AGREEMENT OF LENDER PARTY
TO MAKE ANY SUBSEQUENT ADVANCE UNTIL ALL ITEMS REQUIRED BY THIS ARTICLE HAVE
BEEN DELIVERED.

 

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ARTICLE VIII

 

8.             COLLATERAL SECURITY

 

8.1           GRANT OF LIEN.

 

(A)          AS SECURITY FOR THE PROMPT SATISFACTION OF ALL SECURED OBLIGATIONS,
BORROWER HEREBY ASSIGNS, TRANSFERS, AND SETS OVER TO COLLATERAL AGENT ALL OF
BORROWER’S INTEREST IN AND TO, AND GRANTS COLLATERAL AGENT A LIEN ON, UPON AND
IN THE COLLATERAL.

 

(B)           NO SUBMISSION BY BORROWER TO COLLATERAL AGENT OF A SCHEDULE OR
OTHER PARTICULAR IDENTIFICATION OF COLLATERAL SHALL BE NECESSARY TO VEST IN
COLLATERAL AGENT SECURITY TITLE TO AND A SECURITY INTEREST IN EACH AND EVERY
ITEM OF COLLATERAL NOW EXISTING OR HEREAFTER CREATED AND ACQUIRED, BUT RATHER
SUCH TITLE AND SECURITY INTEREST SHALL VEST IN COLLATERAL AGENT IMMEDIATELY UPON
THE CREATION OR ACQUISITION OR ANY ITEM OF COLLATERAL HEREAFTER CREATED OR
ACQUIRED, WITHOUT THE NECESSITY FOR ANY OTHER OR FURTHER ACTION BY BORROWER OR
BY COLLATERAL AGENT.

 

8.2           MAINTENANCE OF LIEN.

 

(A)          BORROWER AUTHORIZES COLLATERAL AGENT TO FILE ONE OR MORE FINANCING
STATEMENTS (INCLUDING INITIAL FINANCIAL STATEMENTS AND CONTINUATION AND
AMENDMENT STATEMENTS) TO PERFECT COLLATERAL AGENT’S LIEN IN THE COLLATERAL
PURSUANT TO THE UNIFORM COMMERCIAL CODE, SUCH FINANCING STATEMENTS TO BE IN FORM
AND SUBSTANCE AS REQUIRED BY COLLATERAL AGENT.

 

(B)           BORROWER HEREBY APPOINTS COLLATERAL AGENT AS ITS ATTORNEY-IN-FACT
(WITHOUT REQUIRING COLLATERAL AGENT TO ACT AS SUCH) TO FILE ANY FINANCING
STATEMENT IN THE NAME OF BORROWER, AND TO PERFORM ALL OTHER ACTS THAT COLLATERAL
AGENT DEEMS APPROPRIATE TO PERFECT AND CONTINUE COLLATERAL AGENT’S LIEN AND TO
PROTECT AND PRESERVE THE COLLATERAL.

 

(C)           IN CONNECTION WITH COLLATERAL AGENT’S LIEN, BORROWER WILL:

 

(1)           EXECUTE AND DELIVER, AND CAUSE TO BE EXECUTED AND DELIVERED, SUCH
DOCUMENTS AND INSTRUMENTS, INCLUDING AMENDMENTS TO THE SECURITY DOCUMENTS AND
FINANCING STATEMENTS (INCLUDING AMENDMENTS THERETO AND CONTINUATION STATEMENTS
THEREOF) IN FORM SATISFACTORY TO COLLATERAL AGENT AS COLLATERAL AGENT, FROM TIME
TO TIME, MAY SPECIFY, AND PAY, OR REIMBURSE COLLATERAL AGENT UPON DEMAND FOR
PAYING, ALL COSTS AND TAXES OF FILING OR RECORDING THE SAME IN SUCH
JURISDICTIONS AS COLLATERAL AGENT MAY DESIGNATE; AND

 

(2)           TAKE SUCH OTHER STEPS AS COLLATERAL AGENT, FROM TIME TO TIME, MAY
DIRECT TO PROTECT, PERFECT, AND MAINTAIN COLLATERAL AGENT’S LIEN.

 

ARTICLE IX

 

9.             REPRESENTATIONS AND WARRANTIES.

 

Each Borrower represents and warrants to Lender Parties (provided that it is
understood that each Borrower is making its representations only on its own
behalf, and only to the extent of

 

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its knowledge with respect to any other Borrower), knowing that Lender Parties
will rely on such representations and warranties as an inducement to make the
Loans, that:

 

9.1           EXISTENCE.  EACH OF KMG CHEMICALS AND KMG ECI IS A DULY ORGANIZED
AND EXISTING TEXAS CORPORATION IN GOOD STANDING, IS DULY QUALIFIED AND IN GOOD
STANDING AS A FOREIGN CORPORATION IN EACH OTHER JURISDICTION WHERE THE FAILURE
TO BE SO QUALIFIED MIGHT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE
EFFECT.  KMG-BERNUTH IS A DULY ORGANIZED AND EXISTING DELAWARE CORPORATION IN
GOOD STANDING, IS DULY QUALIFIED AND IN GOOD STANDING AS A FOREIGN CORPORATION
IN EACH OTHER JURISDICTION WHERE THE FAILURE TO BE SO QUALIFIED MIGHT REASONABLY
BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.  EACH OF KMG CHEMICALS,
KMG-BERNUTH AND KMG ECI HAS FULL POWER AND AUTHORITY TO CONSUMMATE THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.  EACH OTHER MEMBER OF THE BORROWER
CONSOLIDATED GROUP IS DULY ORGANIZED, VALIDLY EXISTING AND IN GOOD STANDING
UNDER THE LAWS OF ITS JURISDICTION OF ORGANIZATION, AND IS DULY QUALIFIED AND IN
GOOD STANDING AS A FOREIGN CORPORATION OR OTHER ENTITY IN EACH OTHER
JURISDICTION WHERE THE FAILURE TO BE SO QUALIFIED MIGHT REASONABLY BE EXPECTED
TO HAVE A MATERIAL ADVERSE EFFECT.

 

9.2           AUTHORITY.  THE EXECUTION, DELIVERY AND PERFORMANCE OF ALL OF THE
LOAN DOCUMENTS HAVE BEEN DULY AUTHORIZED BY ALL REQUISITE ACTION BY EACH
BORROWER PARTY A PARTY THERETO.  ALL OF THE LOAN DOCUMENTS HAVE BEEN DULY
EXECUTED AND DELIVERED AND CONSTITUTE VALID AND BINDING OBLIGATIONS OF EACH
BORROWER PARTY A PARTY THERETO, ENFORCEABLE IN ACCORDANCE WITH THEIR RESPECTIVE
TERMS (EXCEPT AS MAY BE LIMITED BY APPLICABLE BANKRUPTCY LAWS AND OTHER LAWS
AFFECTING THE ENFORCEABILITY OF CREDITORS’ RIGHTS GENERALLY AND PRINCIPLES OF
EQUITY), AND LENDER PARTIES WILL BE ENTITLED TO THE BENEFITS OF ALL OF THE LOAN
DOCUMENTS.

 

9.3           EQUITY OWNERS AND EQUITY AGREEMENTS.  SET FORTH ON SCHEDULE 9.3 IS
A COMPLETE AND ACCURATE LIST OF (I) ALL HOLDERS OF THE EQUITY INTERESTS OF THE
MEMBERS OF THE BORROWER CONSOLIDATED GROUP (OTHER THAN KMG CHEMICALS), SHOWING
AS OF THE CLOSING THE EQUITY INTERESTS OWNED BY EACH EQUITY OWNER, WHICH EQUITY
INTERESTS HAVE BEEN VALIDLY ISSUED, ARE FULLY PAID AND NON-ASSESSABLE, AND ARE
OWNED BY SUCH PERSONS FREE AND CLEAR OF ALL LIENS; AND (II) ALL THE EQUITY
AGREEMENTS.

 

9.4           NAME.  SET FORTH ON SCHEDULE 9.4 IS A COMPLETE AND ACCURATE LIST
OF (I) ALL NAMES UNDER WHICH BORROWERS HAVE DONE BUSINESS IN THE LAST SIX YEARS;
AND (II) THE NAMES OF ALL PERSONS WHOSE ASSETS (X) WERE ACQUIRED IN THE LAST SIX
YEARS BY BORROWER OUTSIDE OF BORROWER’S ORDINARY COURSE OF BUSINESS, (Y) WERE
INCLUDED AS ASSETS OF BORROWERS ON THE MOST RECENT FINANCIAL STATEMENTS WITH A
MARKET VALUE OF MORE THAN $250,000.00, AND (Z) CONSTITUTE PART OF THE
COLLATERAL.

 

9.5           MATERIAL CONTRACTS.  SET FORTH ON SCHEDULE 9.5 IS A COMPLETE AND
ACCURATE LIST OF ALL OF THE MATERIAL CONTRACTS.

 

9.6           CONSENTS OR APPROVALS.

 

(A)          EXCEPT FOR APPROVALS, AUTHORIZATIONS ALREADY OBTAINED AND REMAINING
IN EFFECT, AND NOTICES TO AND FILINGS ALREADY GIVEN AND MADE, NO CONSENT OR
APPROVAL OF ANY THIRD PERSON, AND NO AUTHORIZATION, APPROVAL OR OTHER ACTION BY,
AND NO NOTICE TO OR FILING WITH, ANY GOVERNMENTAL AUTHORITY OR OTHER THIRD
PERSON IS REQUIRED WITH RESPECT TO THE OPERATION OF

 

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BORROWER’S BUSINESS (UNLESS THE FAILURE TO OBTAIN OR FILE SUCH APPROVALS,
AUTHORIZATIONS, NOTICES AND FILINGS WOULD NOT REASONABLY BE EXPECTED TO HAVE A
MATERIAL ADVERSE EFFECT).

 

(B)           NO CONSENT OF ANY THIRD PERSON AND NO AUTHORIZATION, APPROVAL OR
OTHER ACTION BY, AND NO NOTICE TO OR FILING WITH, ANY GOVERNMENTAL AUTHORITY OR
OTHER THIRD PERSON THAT IS REQUIRED HAS NOT BEEN OBTAINED EITHER (I) FOR THE DUE
EXECUTION, DELIVERY, RECORDATION, FILING OR PERFORMANCE BY ANY BORROWER PARTY OF
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR FOR THE CONSUMMATION OF THE
TRANSACTION CONTEMPLATED HEREBY, (II) FOR THE MORTGAGE, PLEDGE, ASSIGNMENT, OR
GRANT BY BORROWER OF COLLATERAL AGENT’S LIEN, (III) FOR THE PERFECTION OR
MAINTENANCE OF COLLATERAL AGENT’S LIEN, EXCEPT FOR THE RECORDING OF THE
MORTGAGES AND THE FINANCING STATEMENTS, OR (IV) FOR THE EXERCISE BY LENDER
PARTIES OF THEIR RIGHTS OR REMEDIES PROVIDED FOR IN THIS AGREEMENT OR IN ANY OF
THE OTHER LOAN DOCUMENTS (EXCEPT AS MAY BE REQUIRED BY APPLICABLE LAWS IN
CONNECTION WITH THE FORECLOSURE AND DISPOSITION OF THE COLLATERAL).  ALL
APPLICABLE WAITING PERIODS, IF ANY, IN CONNECTION WITH THE TRANSACTIONS
CONTEMPLATED HEREBY HAVE EXPIRED WITHOUT ANY ACTION HAVING BEEN TAKEN BY ANY
PERSON RESTRAINING, PREVENTING OR IMPOSING MATERIALLY ADVERSE CONDITIONS UPON
THE RIGHTS OF BORROWER TO ENTER INTO AND PERFORM ITS OBLIGATIONS UNDER THIS
AGREEMENT.

 

9.7           VIOLATIONS OR ACTIONS PENDING.  THERE ARE NO ACTIONS, SUITS, OR
PROCEEDINGS PENDING OR, TO THE BEST OF BORROWER’S KNOWLEDGE, THREATENED, WHICH
MIGHT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT OR WHICH MIGHT
REASONABLY BE EXPECTED TO IMPAIR THE VALUE OF THE COLLATERAL.  NO MEMBER OF THE
BORROWER CONSOLIDATED GROUP IS IN VIOLATION OF ANY AGREEMENT THE VIOLATION OF
WHICH WILL HAVE, OR MIGHT REASONABLY BE EXPECTED TO HAVE, A MATERIAL ADVERSE
EFFECT, AND NO MEMBER OF THE BORROWER CONSOLIDATED GROUP IS IN VIOLATION OF ANY
ORDER, JUDGMENT OR DECREE OF ANY COURT, OR ANY STATUTE OR GOVERNMENTAL
REGULATION TO WHICH SUCH MEMBER OF THE BORROWER CONSOLIDATED GROUP IS SUBJECT
WITH RESPECT TO WHICH THE VIOLATION THEREOF WHICH WILL HAVE, OR MIGHT REASONABLY
BE EXPECTED TO HAVE, A MATERIAL ADVERSE EFFECT.  THE EXECUTION AND PERFORMANCE
OF ANY LOAN DOCUMENT BY BORROWER WILL NOT RESULT IN ANY BREACH OF OR DEFAULT
UNDER ANY MORTGAGE, LEASE, CREDIT OR LOAN AGREEMENT OR ANY OTHER INSTRUMENT
WHICH MAY BIND OR AFFECT BORROWER.

 

9.8           AFFILIATES.  BORROWER HAS NO AFFILIATES (OTHER THAN OFFICERS AND
DIRECTORS) EXCEPT (I) AS DISCLOSED ON THE ATTACHED SCHEDULE 9.8, OR
(II) AFFILIATES WITH A TANGIBLE NET WORTH OF LESS THAN $1,000,000.00.

 

9.9           EXISTING INDEBTEDNESS.  NO MEMBER OF THE BORROWER CONSOLIDATED
GROUP IS IN DEFAULT WITH RESPECT TO ANY OF THE EXISTING INDEBTEDNESS.

 

9.10         DEFAULTS UNDER MATERIAL CONTRACTS.  THERE IS NOT EXISTING ANY
DEFAULT OR EVENT OF DEFAULT UNDER ANY MATERIAL CONTRACT WHICH MIGHT REASONABLY
BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.

 

9.11         TAX RETURNS.  ALL FEDERAL, STATE, LOCAL AND OTHER TAX RETURNS AND
REPORTS OF THE BORROWER CONSOLIDATED GROUP REQUIRED BY LAWS TO HAVE BEEN
COMPLETED AND FILED HAVE BEEN COMPLETED AND DULY FILED, AND ALL TAXES,
ASSESSMENTS AND WITHHOLDINGS SHOWN ON SUCH RETURNS OR BILLED TO A MEMBER OF THE
BORROWER CONSOLIDATED GROUP HAVE BEEN PAID, AND THE BORROWER CONSOLIDATED GROUP
MAINTAINS ADEQUATE PROVISIONS AND ACCRUALS IN RESPECT OF ALL SUCH FEDERAL,

 

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STATE, LOCAL AND OTHER TAXES, ASSESSMENTS AND WITHHOLDINGS.  THERE ARE NO UNPAID
ASSESSMENTS PENDING AGAINST ANY MEMBER OF THE BORROWER CONSOLIDATED GROUP FOR
ANY TAXES OR WITHHOLDINGS, AND BORROWER KNOWS OF NO BASIS THEREFOR.

 

9.12         FINANCIAL STATEMENTS. ALL FINANCIAL STATEMENTS HERETOFORE GIVEN AND
HEREAFTER GIVEN TO LENDER PARTIES ARE AND WILL BE TRUE AND COMPLETE IN ALL
MATERIAL RESPECTS AS OF THEIR RESPECTIVE DATES AND PREPARED IN ACCORDANCE WITH
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, AND FAIRLY REPRESENT AND WILL FAIRLY
REPRESENT THE FINANCIAL CONDITIONS OF THE PERSONS TO WHICH THEY PERTAIN AS OF
THE RESPECTIVE DATES THEREOF, AND UPON DELIVERY TO LENDER PARTIES, NO MATERIAL
ADVERSE CHANGE HAS OR WILL HAVE OCCURRED AFTER THE RESPECTIVE DATE THEREOF,
EXCEPT AS MAY BE DISCLOSED IN WRITING TO BANK.

 

9.13         GOOD AND MARKETABLE TITLE. BORROWER HAS GOOD AND MARKETABLE TITLE
TO ALL OF ITS ASSETS, INCLUDING, WITHOUT LIMITATION, BORROWER’S INTEREST IN THE
COLLATERAL, SUBJECT TO NO LIENS, EXCEPT FOR PERMITTED LIENS.

 

9.14         REAL PROPERTY LOCATIONS.  SET FORTH ON SCHEDULE 9.14 IS A COMPLETE
AND ACCURATE LIST OF THE REAL PROPERTY, SHOWING AS OF THE DATE HEREOF THE STREET
ADDRESS, COUNTY OR OTHER RELEVANT JURISDICTION, STATE, AND RECORD OWNER THEREOF.

 

9.15         SOLVENCY.  BORROWER IS SOLVENT.

 

9.16         ERISA.  EACH PLAN IS AND HAS BEEN ADMINISTERED IN COMPLIANCE IN ALL
MATERIAL RESPECTS WITH ALL APPLICABLE LAWS, INCLUDING WITHOUT LIMITATION, THE
APPLICABLE PROVISIONS OF ERISA AND THE INTERNAL REVENUE CODE.  NO ERISA EVENT
HAS OCCURRED AND IS CONTINUING OR, TO THE KNOWLEDGE OF BORROWER, IS REASONABLY
EXPECTED TO OCCUR WITH RESPECT TO ANY PLAN, IN EITHER CASE THAT WOULD BE
REASONABLY LIKELY, INDIVIDUALLY OR IN THE AGGREGATE, TO HAVE A MATERIAL ADVERSE
EFFECT.   NO PLAN HAS ANY UNFUNDED PENSION LIABILITY, AND NEITHER BORROWER NOR
ANY ERISA AFFILIATE HAS ENGAGED IN A TRANSACTION THAT COULD BE SUBJECT TO
SECTION 4069 OR 4212(C) OF ERISA, IN EITHER INSTANCE WHERE THE SAME WOULD BE
REASONABLY LIKELY, INDIVIDUALLY OR IN THE AGGREGATE, TO HAVE A MATERIAL ADVERSE
EFFECT..

 

9.17         PRIORITY OF LIENS.  COLLATERAL AGENT’S LIEN CONSTITUTES A FIRST
LIEN AGAINST THE COLLATERAL, PRIOR TO ALL OTHER LIENS, INCLUDING THOSE WHICH MAY
HEREAFTER ACCRUE, EXCEPT FOR THE PERMITTED LIENS.

 

9.18         PATENTS, COPYRIGHTS, ETC.  EXCEPT AS DISCLOSED ON SCHEDULE 9.18
(I) BORROWER HAS NO PATENTS, TRADEMARKS, TRADE NAMES, SERVICE MARKS OR
COPYRIGHTS, AND (II) NO COLLATERAL IS SUBJECT TO ANY LICENSE AGREEMENT RELATING
TO PATENTS, TRADEMARKS, TRADE NAMES, SERVICE MARKS, OR COPYRIGHTS, WHICH COULD,
DIRECTLY OR INDIRECTLY, PRECLUDE OR RENDER IMPRACTICABLE THE REALIZATION OF
COLLATERAL AGENT’S LIEN OR MATERIALLY DIMINISH THE VALUE OF SUCH COLLATERAL. 
UPON THE OCCURRENCE OF ANY DEFAULT AND DEMAND OF COLLATERAL AGENT, BORROWER
SHALL PROMPTLY EXECUTE AND DELIVER TO COLLATERAL AGENT A PATENT AND TRADEMARK
SECURITY AGREEMENT IN FORM AND SUBSTANCE AS MAY BE REASONABLY REQUIRED BY
COLLATERAL AGENT, IN ORDER TO GRANT TO COLLATERAL AGENT A LIEN IN ALL OF
BORROWER’S PATENTS, TRADEMARKS, TRADE NAMES, SERVICE MARKS AND COPYRIGHTS, AND
ALL APPLICATIONS THEREFOR AND LICENSES THEREOF.

 

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9.19         ACCURACY OF DOCUMENTS.  ALL DOCUMENTS FURNISHED TO LENDER PARTIES
BY OR ON BEHALF OF ANY BORROWER PARTY AS PART OF OR IN SUPPORT OF THE
APPLICATION FOR THE LOANS OR THE LOAN DOCUMENTS ARE TRUE, CORRECT, COMPLETE AND
ACCURATELY REPRESENT THE MATTERS TO WHICH THEY PERTAIN.

 

9.20         ENVIRONMENTAL MATTERS. EXCEPT AS DISCLOSED ON SCHEDULE 9.20, OR
EXCEPT AS WOULD NOT REASONABLY BE EXPECTED TO GIVE RISE TO A MATERIAL ADVERSE
CHANGE, (A) NO MEMBER OF THE BORROWER CONSOLIDATED GROUP NOR THE MORTGAGED
PROPERTY IS IN MATERIAL VIOLATION OF OR SUBJECT TO ANY EXISTING, PENDING OR
THREATENED INVESTIGATION OR INQUIRY BY ANY GOVERNMENTAL AUTHORITY OR ANY
REMEDIAL OBLIGATIONS UNDER ANY APPLICABLE ENVIRONMENTAL LAWS, AND BORROWER WILL
PROMPTLY NOTIFY AGENT IF ANY RESPONSIBLE OFFICER BECOMES AWARE OF ANY SUCH
INVESTIGATION OR INQUIRY; (B) EXCEPT FOR GOVERNMENTAL APPROVALS ALREADY
OBTAINED, NO MEMBER OF THE BORROWER CONSOLIDATED GROUP HAS OBTAINED OR IS
REQUIRED TO OBTAIN ANY GOVERNMENTAL APPROVALS TO CONSTRUCT, OCCUPY, OPERATE OR
USE ANY BUILDINGS, IMPROVEMENTS, FIXTURES OR EQUIPMENT BY REASON OF ANY
ENVIRONMENTAL LAWS; AND (C) BORROWER COVENANTS AND AGREES THAT IT WILL NOT CAUSE
THERE TO BE ANY MATERIAL VIOLATION OF ANY ENVIRONMENTAL LAW IN CONNECTION WITH
THE DISPOSAL OR RELEASE OF PETROLEUM PRODUCTS, HAZARDOUS SUBSTANCES, HAZARDOUS
MATERIALS OR SOLID WASTES.

 

9.21         CONDEMNATION. THERE ARE NO PROCEEDINGS PENDING, OR, TO THE BEST OF
BORROWER’S KNOWLEDGE, THREATENED, TO EXERCISE ANY POWER OF CONDEMNATION OR
EMINENT DOMAIN, WITH RESPECT TO THE MORTGAGED PROPERTY, OR ANY INTEREST THEREIN,
OR TO ENJOIN OR SIMILARLY PREVENT THE USE OF THE MORTGAGED PROPERTY.

 

9.22         ASSIGNED AGREEMENTS.

 

(A)          BORROWER IS (OR, WITH RESPECT TO ANY ASSIGNED AGREEMENT HEREAFTER
MADE, WILL BE) THE SOLE OWNER AND HOLDER OF BORROWER’S INTEREST IN EACH ASSIGNED
AGREEMENT, AND BORROWER HAS NOT TRANSFERRED OR OTHERWISE ASSIGNED ANY INTEREST
OF BORROWER AS A PARTY TO ANY ASSIGNED AGREEMENT;

 

(B)           EACH OF THE ASSIGNED AGREEMENTS IS (OR, WITH RESPECT TO ANY
ASSIGNED AGREEMENTS HEREAFTER MADE, WILL BE) VALID AND ENFORCEABLE IN ACCORDANCE
WITH ITS RESPECTIVE TERMS, AND IN FULL FORCE AND EFFECT, AND HAS NOT BEEN (OR,
WITH RESPECT TO ANY ASSIGNED AGREEMENTS HEREAFTER MADE, WILL NOT BE) ALTERED,
MODIFIED OR AMENDED IN ANY MANNER WHATSOEVER EXCEPT AS PERMITTED IN THIS
AGREEMENT;

 

(C)           NONE OF THE RENTS HAVE BEEN OR WILL BE ASSIGNED, PLEDGED OR IN ANY
MANNER TRANSFERRED OR HYPOTHECATED, EXCEPT PURSUANT TO THIS AGREEMENT, AND

 

(D)          NONE OF THE RENTS, FOR ANY PERIOD SUBSEQUENT TO THE DATE OF THIS
AGREEMENT, HAS BEEN OR WILL BE COLLECTED MORE THAN THIRTY (30) DAYS IN ADVANCE
OF THE TIME WHEN SUCH RENTS BECOME DUE UNDER THE TERMS OF THE ASSIGNED LEASES.

 

9.23         FULL DISCLOSURE.  ALL MATERIAL FACTUAL INFORMATION HERETOFORE OR
CONTEMPORANEOUSLY FURNISHED TO LENDER PARTIES BY OR ON BEHALF OF THE BORROWER
CONSOLIDATED GROUP FOR PURPOSES OF OR IN CONNECTION WITH THIS AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED HEREBY IS, AND ALL OTHER SUCH FACTUAL INFORMATION
HEREAFTER FURNISHED TO LENDER PARTIES IN WRITING BY OR ON BEHALF OF THE BORROWER
CONSOLIDATED GROUP WILL BE, TRUE AND ACCURATE IN ALL MATERIAL RESPECTS ON THE
DATE AS OF WHICH SUCH INFORMATION IS DATED OR CERTIFIED (OR, IF SUCH INFORMATION
HAS

 

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BEEN AMENDED OR SUPPLEMENTED, ON THE DATE AS OF WHICH ANY SUCH AMENDMENT OR
SUPPLEMENT IS DATE OR CERTIFIED) AND NOT MADE INCOMPLETE BY OMITTING TO STATE A
MATERIAL FACT NECESSARY TO MAKE THE STATEMENTS CONTAINED THEREIN, IN LIGHT OF
THE CIRCUMSTANCES UNDER WHICH SUCH INFORMATION WAS PROVIDED, NOT MATERIALLY
MISLEADING.

 

9.24         REGULATED INDUSTRIES.  BORROWER IS NOT AN “INVESTMENT COMPANY,” A
COMPANY “CONTROLLED” BY AN “INVESTMENT COMPANY,” OR AN “INVESTMENT ADVISOR,”
WITHIN THE MEANING OF THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED.

 

9.25         INSURANCE.  THE ASSETS, PROPERTIES AND BUSINESS OF THE BORROWER
CONSOLIDATED GROUP ARE INSURED AGAINST SUCH HAZARDS AND LIABILITIES, UNDER SUCH
COVERAGES AND IN SUCH AMOUNTS, AS ARE REQUIRED UNDER SECTION 10.4 OF THIS
AGREEMENT.

 

9.26         ANTI-TERRORISM LAWS.

 

(A)          GENERAL.  NEITHER BORROWER NOR ANY AFFILIATE OF BORROWER IS IN
VIOLATION OF ANY ANTI-TERRORISM LAW OR ENGAGES IN OR CONSPIRES TO ENGAGE IN ANY
TRANSACTION THAT EVADES OR AVOIDS, OR HAS THE PURPOSE OF EVADING OR AVOIDING, OR
ATTEMPTS TO VIOLATE, ANY OF THE PROHIBITIONS SET FORTH IN ANY ANTI-TERRORISM
LAW.

 

(B)           EXECUTIVE ORDER NO. 13224.

 

(1)           NEITHER BORROWER NOR ANY AFFILIATE OF BORROWER IS ANY OF THE
FOLLOWING (EACH A “BLOCKED PERSON”):

 

(a)           A Person that is listed in the annex to, or is otherwise subject
to the provisions of, Executive Order No. 13224;

 

(b)           A Person owned or controlled by, or acting for or on behalf of,
any Person that is listed in the annex to, or is otherwise subject to the
provisions of, Executive Order No. 13224;

 

(c)           A Person with which any bank or other financial institution is
prohibited from dealing or otherwise engaging in any transaction by any
Anti-Terrorism Law;

 

(d)           A Person that commits, threatens or conspires to commit or
supports “terrorism” as defined in Executive Order No. 13224;

 

(e)           A Person that is named as a “specially designated national” on the
most current list published by the U.S. Treasury Department Office of Foreign
Asset Control at its official website or any replacement website or other
replacement official publication of such list; or

 

(f)            A Person who is affiliated with a Person listed above.

 

(2)           NEITHER BORROWER NOR ANY AFFILIATE OF BORROWER (I) CONDUCTS ANY
BUSINESS OR ENGAGES IN MAKING OR RECEIVING ANY CONTRIBUTION OF FUNDS, GOODS OR
SERVICES

 

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TO OR FOR THE BENEFIT OF ANY BLOCKED PERSON OR (II) DEALS IN, OR OTHERWISE
ENGAGES IN ANY TRANSACTION RELATING TO, ANY PROPERTY OR INTERESTS IN PROPERTY
BLOCKED PURSUANT TO EXECUTIVE ORDER NO. 13224.

 

9.27         SECURITIES LAWS.  BORROWER HAS FILED AND WILL CONTINUE TO FILE WHEN
AND AS DUE ALL REPORTS REQUIRED UNDER SECTION 15(B) OF THE SECURITIES EXCHANGE
ACT OF 1934 (PROVIDED THAT ANY DELAYED FILING SHALL NOT CONSTITUTE A DEFAULT SO
LONG AS (X) SUCH DELAYED FILING DOES NOT CONTINUE FOR MORE THAN ONE HUNDRED
EIGHTY (180) DAYS, (Y) AGENT IS NOTIFIED OF THE DELAYED FILING WITHIN THIRTY
(30) DAYS OF THE ORIGINAL FILING DUE DATE AND IS PROVIDED A WRITING SETTING
FORTH WITH REASONABLE PARTICULARITY THE REASONS FOR SUCH DELAYED FILING) AND
(Z) IF REQUESTED BY AGENT, BORROWER WILL PROVIDE PERIODIC UPDATES WITH RESPECT
TO THE STATUS OF THE DELAYED FILING.

 

9.28         CONTINUING EFFECTIVENESS.  ALL REPRESENTATIONS AND WARRANTIES
CONTAINED HEREIN SHALL BE DEEMED CONTINUING, CONTINUALLY REPUBLISHED, AND IN
EFFECT AT ALL TIMES WHILE BORROWER REMAINS INDEBTED TO LENDER PARTIES PURSUANT
TO THE LOANS AND SHALL BE DEEMED TO BE INCORPORATED BY REFERENCE AT THE TIME OF
EACH ADVANCE UNLESS BORROWER SPECIFICALLY NOTIFIES AGENT OF ANY CHANGE THEREIN.

 

ARTICLE X

 

10.           BORROWER’S COVENANTS

 

Each Borrower does hereby covenant and agree with each Lender Party that, so
long as any of the Credit Agreement Obligations remain unsatisfied or any
commitments hereunder remain outstanding, such Borrower at all times will comply
or cause to be complied with the following covenants:

 

10.1         AFFIRMATIVE COVENANTS.

 

(A)          BORROWER WILL DULY AND PROMPTLY PAY AND PERFORM ALL OF BORROWER’S
CREDIT AGREEMENT OBLIGATIONS TO LENDER PARTIES ACCORDING TO THE TERMS OF THIS
AGREEMENT, THE OTHER LOAN DOCUMENTS AND THE LENDER PARTY SWAP DOCUMENTS, AND
WILL CAUSE EACH OTHER BORROWER PARTY TO PERFORM SUCH OTHER BORROWER PARTY’S
CREDIT AGREEMENT OBLIGATIONS TO LENDER PARTIES ACCORDING TO THE TERMS OF THIS
AGREEMENT, THE OTHER LOAN DOCUMENTS AND THE LENDER PARTY SWAP DOCUMENTS.

 

(B)           BORROWER WILL USE THE PROCEEDS OF THE LOANS ONLY FOR THE PURPOSES
PERMITTED HEREIN, OR AS REQUIRED LENDERS MAY HAVE OTHERWISE APPROVED FROM TIME
TO TIME; AND BORROWER WILL FURNISH AGENT SUCH EVIDENCE AS IT MAY REASONABLY
REQUIRE WITH RESPECT TO SUCH USES.

 

(C)           BORROWER WILL FURNISH OR CAUSE TO BE FURNISHED TO THE LENDER
PARTIES:

 

(1)           WITHIN FORTY-FIVE DAYS AFTER EACH QUARTER-END (A) AN UNAUDITED
(MANAGEMENT-PREPARED) INCOME STATEMENT OF THE BORROWER CONSOLIDATED GROUP FOR
SUCH QUARTER, AND (B) AN UNAUDITED (MANAGEMENT-PREPARED) BALANCE SHEET OF THE
BORROWER CONSOLIDATED GROUP FOR SUCH QUARTER, ALL IN REASONABLE DETAIL WITH
AGENT HAVING FULL ACCESS TO ALL SUPPORTING SCHEDULES AND COMMENTS, SUCH INCOME
STATEMENTS AND BALANCE

 

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SHEETS TO BE PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES CONSISTENTLY APPLIED BY THE BORROWER CONSOLIDATED GROUP, EXCEPT FOR
ANY INCONSISTENCIES EXPLAINED THEREIN; PROVIDED, HOWEVER, THAT BORROWER
PROVIDING BANK WITH A COPY OF THE FORM 10-Q FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION WITHIN THREE (3) BUSINESS DAYS OF SUCH FILING SHALL SATISFY
THE REQUIREMENTS OF THIS PARAGRAPH (1);

 

(2)           WITHIN ONE HUNDRED TWENTY (120) DAYS AFTER EACH FISCAL YEAR-END
(A) A STATEMENT OF EQUITY OWNERS’ EQUITY FOR THE BORROWER CONSOLIDATED GROUP,
(B) AN INCOME STATEMENT OF THE BORROWER CONSOLIDATED GROUP FOR SUCH FISCAL YEAR,
AND (C) A BALANCE SHEET OF THE BORROWER CONSOLIDATED GROUP AS OF THE END OF SUCH
FISCAL YEAR, ALL IN REASONABLE DETAIL, INCLUDING ALL SUPPORTING SCHEDULES AND
COMMENTS; THE STATEMENTS AND BALANCE SHEETS TO BE AUDITED BY AN INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANT SELECTED BY THE BORROWER CONSOLIDATED GROUP AND
ACCEPTABLE TO AGENT, AND CERTIFIED BY SUCH ACCOUNTANTS TO HAVE BEEN PREPARED IN
ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES CONSISTENTLY APPLIED BY
THE BORROWER CONSOLIDATED GROUP, EXCEPT FOR ANY INCONSISTENCIES EXPLAINED IN
SUCH CERTIFICATE; AND AGENT SHALL HAVE THE RIGHT, FROM TIME TO TIME, TO DISCUSS
ANY MEMBER OF THE BORROWER CONSOLIDATED GROUP’S AFFAIRS DIRECTLY WITH SUCH
PERSON’S ACCOUNTANTS, AND ANY SUCH ACCOUNTANTS ARE AUTHORIZED AND DIRECTED TO
GIVE AGENT ANY INFORMATION AGENT MAY REQUEST AT ANY TIME REGARDING THE FINANCIAL
AFFAIRS OF THE BORROWER CONSOLIDATED GROUP, AND ARE AUTHORIZED AND DIRECTED TO
FURNISH AGENT WITH COPIES OF ANY DOCUMENTS IN THEIR POSSESSION RELATED THERETO;
PROVIDED, HOWEVER, THAT BORROWER PROVIDING BANK WITH A COPY OF THE FORM 10-K
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION WITHIN THREE (3) BUSINESS DAYS
OF SUCH FILING SHALL SATISFY THE REQUIREMENTS OF THIS PARAGRAPH (2);

 

(3)           PROMPTLY AFTER SENDING OR MAKING AVAILABLE OR FILING OF THE SAME,
COPIES OF ALL REPORTS, PROXY STATEMENTS AND FINANCIAL STATEMENTS (IF ANY) THAT
BORROWER SENDS OR MAKES AVAILABLE TO ITS EQUITY OWNERS AND ALL REGISTRATION
STATEMENTS AND REPORTS THAT BORROWER FILES WITH THE SECURITIES AND EXCHANGE
COMMISSION (OR ANY OTHER SIMILAR GOVERNMENTAL AUTHORITY) OR ANY SUCCESSOR
PERSON; AND

 

(4)           WITHIN FORTY-FIVE (45) DAYS AFTER EACH QUARTER-END, A COMPLIANCE
CERTIFICATE; AND

 

(5)           WITHIN FORTY-FIVE (45) DAYS AFTER EACH QUARTER-END BEGINNING THE
QUARTER-END OF APRIL 30, 2008, A COLLATERAL REPORT AS OF SUCH QUARTER-END,
CERTIFIED TO BE CORRECT BY THE PRINCIPAL FINANCIAL OFFICER OF BORROWERS
(TOGETHER WITH A SCHEDULE OF ACCOUNTS AND SCHEDULE OF INVENTORY IF REQUIRED
UNDER SECTION 10.10 OF THIS AGREEMENT).

 

(D)          BORROWER WILL PAY OR CAUSE TO BE PAID WHEN DUE (I) THE FEES AND ALL
OTHER FEES AND EXPENSES OWING TO LENDER PARTIES; AND (II) ALL EXPENSES INVOLVED
IN PERFECTING COLLATERAL AGENT’S LIEN OR THE PRIORITY OF COLLATERAL AGENT’S LIEN
AND ALL OTHER EXPENSES OF LENDER PARTIES RELATED TO THE LOANS, OR THE PROTECTION
AND PRESERVATION OF THE COLLATERAL, OR THE INTERPRETATION, ADMINISTRATION AND
ENFORCEMENT OF ANY PROVISION OF THIS AGREEMENT, OR THE PREPARATION AND
NEGOTIATION OF THIS AGREEMENT, ANY OF THE OTHER LOAN DOCUMENTS, OR AMENDMENTS TO
ANY OF THEM, INCLUDING, WITHOUT LIMITATION, RECORDING FEES AND TAXES, TAX, TITLE
AND LIEN SEARCH CHARGES, AND

 

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ATTORNEYS’ FEES (INCLUDING ATTORNEYS’ FEES AT TRIAL AND ON ANY APPEAL BY
BORROWER OR LENDER PARTY), REAL PROPERTY TAXES AND INSURANCE PREMIUMS.

 

(E)           BORROWER WILL PERMIT AGENT, COLLATERAL AGENT AND THEIR RESPECTIVE
AGENTS TO HAVE ACCESS TO THE COLLATERAL AT REASONABLE TIMES.

 

(F)           AFTER THE OCCURRENCE OF A DEFAULT AND UPON DEMAND OF AGENT OR
COLLATERAL AGENT, BORROWER WILL CAUSE, OR PERMIT AGENT OR COLLATERAL AGENT TO
CAUSE, ALL OR ANY PART OF THE MORTGAGED PROPERTY AND OTHER TANGIBLE PROPERTY
COMPRISING PART OF THE COLLATERAL TO BE APPRAISED (OR REAPPRAISED) AT BORROWER’S
EXPENSE AT ANY TIME (BUT NOT MORE THAN ONCE DURING ANY TWELVE-MONTH PERIOD
EXCEPT (I) AFTER AN EVENT OF DEFAULT, (II) IF REQUIRED ON ACCOUNT OF THE
REQUIREMENTS OF ANY GOVERNMENTAL AUTHORITY OR REGULATORY AUTHORITY, OR (III) IF
AGENT OR COLLATERAL AGENT IN ITS REASONABLE DISCRETION DETERMINES THAT THERE MAY
HAVE BEEN A MATERIAL DIMINUTION IN THE VALUE OF SUCH TANGIBLE PROPERTY).

 

(G)           IF ANY OF THE INFORMATION OR DISCLOSURES PROVIDED ON ANY SCHEDULE
ORIGINALLY ATTACHED HERETO BECOME OUTDATED OR INCORRECT IN ANY MATERIAL RESPECT,
BORROWER SHALL DELIVER TO AGENT AS PART OF A COMPLIANCE CERTIFICATE SUCH
REVISION OR UPDATES TO SUCH SCHEDULE AS MAY BE NECESSARY OR APPROPRIATE TO
UPDATE OR CORRECT SUCH SCHEDULE; PROVIDED, THAT SUCH REVISIONS OR UPDATES TO ANY
SUCH SCHEDULE SHALL ONLY BE DEEMED TO HAVE AMENDED, MODIFIED OR SUPERSEDED SUCH
SCHEDULE AS ORIGINALLY ATTACHED HERETO, AND TO HAVE CURED ANY BREACH OF WARRANTY
OR MISREPRESENTATION RESULTING FROM THE INACCURACY OR INCOMPLETENESS OF ANY SUCH
SCHEDULE IF SUCH REVISIONS OR UPDATES TO SUCH SCHEDULE WOULD NOT OTHERWISE
RESULT IN A SEPARATE AND INDEPENDENT EVENT OF DEFAULT UNDER THE OTHER TERMS AND
PROVISIONS OF THIS AGREEMENT.

 

(H)          BORROWER WILL CERTIFY TO AGENT UPON REQUEST BY AGENT THAT:

 

(1)           BORROWER HAS COMPLIED WITH AND IS IN COMPLIANCE WITH ALL TERMS,
COVENANTS AND CONDITIONS OF THIS AGREEMENT WHICH ARE BINDING UPON IT;

 

(2)           THERE EXISTS NO DEFAULT; OR, IF SUCH IS NOT THE CASE, THAT ONE OR
MORE SPECIFIED DEFAULTS HAVE OCCURRED; AND

 

(3)           THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS AGREEMENT ARE
TRUE WITH THE SAME EFFECT AS THOUGH MADE ON THE DATE OF SUCH CERTIFICATE, EXCEPT
FOR THOSE REPRESENTATIONS AND WARRANTIES WHICH RELATE TO A SPECIFIC DATE.

 

(I)            BORROWER WILL, WHEN REQUESTED SO TO DO, MAKE AVAILABLE FOR
INSPECTION AND AUDIT BY DULY AUTHORIZED REPRESENTATIVES OF AGENT OR COLLATERAL
AGENT ANY OF ITS RECORDS, AND WILL FURNISH AGENT AND COLLATERAL AGENT ANY
INFORMATION REGARDING ITS BUSINESS AFFAIRS AND FINANCIAL CONDITION WITHIN A
REASONABLE TIME AFTER WRITTEN REQUEST THEREFORE.  BORROWER SHALL REIMBURSE AGENT
AND COLLATERAL AGENT FOR ALL COSTS ASSOCIATED WITH SUCH AUDIT IF THE AUDIT
REVEALS A MATERIAL DISCREPANCY IN ANY FINANCIAL REPORT, STATEMENT OR OTHER
DOCUMENT PROVIDED TO LENDER PARTY PURSUANT TO THIS AGREEMENT.

 

(J)            BORROWER WILL KEEP ACCURATE AND COMPLETE RECORDS, CONSISTENT WITH
CUSTOMARY INDUSTRY PRACTICES.

 

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(K)          WITHIN TEN (10) DAYS OF AGENT’S REQUEST THEREFORE, BORROWER WILL
FURNISH OR CAUSE TO BE FURNISHED TO AGENT COPIES OF INCOME TAX RETURNS FILED BY
EACH MEMBER OF THE BORROWER CONSOLIDATED GROUP.

 

(L)           BORROWER WILL PAY WHEN DUE (OR WITHIN APPLICABLE GRACE PERIODS)
ALL INDEBTEDNESS DUE THIRD PARTIES, UNLESS THE FAILURE SO TO PAY SUCH
INDEBTEDNESS WOULD NOT GIVE RISE TO A MATERIAL ADVERSE CHANGE.

 

(M)         BORROWER WILL NOTIFY AGENT AND COLLATERAL AGENT THIRTY (30) DAYS IN
ADVANCE OF ANY CHANGE IN THE JURISDICTION OF ORGANIZATION OF BORROWER, ANY
CHANGE IN THE LOCATION OF ANY PLACE OF BUSINESS OF BORROWER OR OF THE
ESTABLISHMENT OF ANY NEW PLACE OF BUSINESS, OR THE DISCONTINUANCE OF ANY
EXISTING PLACE OF BUSINESS.

 

(N)          BORROWER WILL PROMPTLY NOTIFY AGENT AND COLLATERAL AGENT IN WRITING
IF ANY RESPONSIBLE OFFICER OF BORROWER OBTAINS KNOWLEDGE OF ANY OF THE
FOLLOWING:

 

(1)           THE OCCURRENCE OF ANY DEFAULT OR EVENT OF DEFAULT, TOGETHER WITH A
WRITTEN STATEMENT OF A RESPONSIBLE OFFICER SPECIFYING THE NATURE OF SUCH DEFAULT
OR EVENT OF DEFAULT, THE PERIOD OF EXISTENCE THEREOF AND THE ACTION THAT
BORROWER HAS TAKEN AND PROPOSES TO TAKE WITH RESPECT THERETO;

 

(2)           THE CANCELLATION OR TERMINATION OF ANY MATERIAL CONTRACT (OTHER
THAN UPON THE EXPIRATION OF ITS TERM); AND

 

(3)           ANY DEFAULT OR EVENT OF DEFAULT (AFTER THE EXPIRATION OF ANY
APPLICABLE GRACE AND CURE PERIOD) UNDER ANY AGREEMENT OF ANY BORROWER PARTY WITH
ANY PERSON AND RELATING TO THE BORROWING OF MONEY.

 

(O)          BORROWER WILL COLLECT ITS ACCOUNTS AND SELL ITS INVENTORY ONLY IN
THE ORDINARY COURSE OF BUSINESS (EXCEPT IN CONNECTION WITH PERMITTED TRANSFERS
OF ASSETS).

 

(P)           BORROWER WILL:

 

(1)           FUND ALL ITS PLANS IN ACCORDANCE WITH NO LESS THAN THE MINIMUM
FUNDING STANDARDS OF SECTION 302 OF ERISA;

 

(2)           FURNISH BANK, UPON REQUEST, WITH COPIES OF ALL MATERIAL REPORTS OR
OTHER STATEMENTS FILED WITH THE UNITED STATES DEPARTMENT OF LABOR OR THE
INTERNAL REVENUE SERVICE WITH RESPECT TO ALL SUCH PLANS; AND

 

(3)           PROMPTLY ADVISE AGENT OF THE OCCURRENCE OF ANY REPORTABLE EVENT OR
PROHIBITED TRANSACTION WITH RESPECT TO ANY SUCH PLAN.

 

(Q)          BORROWER WILL NOTIFY AGENT PROMPTLY UPON BORROWER (I) REGISTERING
SECURITIES UNDER SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934 OR
(II) FILING A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933.

 

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10.2         NEGATIVE COVENANTS.

 

(A)          NO BORROWER WILL PERMIT ANY MEMBER OF THE BORROWER CONSOLIDATED
GROUP TO ENGAGE IN ANY BUSINESS OTHER THAN THE PERMITTED LINES OF BUSINESS.

 

(B)           NO BORROWER WILL:

 

(1)           PERMIT ANY MEMBER OF THE BORROWER CONSOLIDATED GROUP TO WIND UP,
LIQUIDATE OR DISSOLVE ITS AFFAIRS OR MERGE OR CONSOLIDATE WITH ANY OTHER PERSON,
EXCEPT THAT THE FOLLOWING SHALL BE PERMITTED: (I) PERMITTED ACQUISITIONS;
(II) PERMITTED TRANSFERS OF ASSETS; (III) ANY SUBSIDIARY OF KMG CHEMICALS (OTHER
THAN BORROWER) MAY MERGE OR CONSOLIDATE WITH OR INTO ANY OTHER SUBSIDIARY OF KMG
CHEMICALS; AND (IV) ANY SUBSIDIARY OF KMG CHEMICALS (OTHER THAN BORROWER) MAY
DISSOLVE, LIQUIDATE OR WIND UP ITS AFFAIRS AT ANY TIME, PROVIDED THAT SUCH
DISSOLUTION, LIQUIDATION OR WINDING UP, AS APPLICABLE, WOULD NOT OTHERWISE GIVE
RISE TO A DEFAULT OR COULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE
EFFECT;

 

(2)           CHANGE (I) ITS LEGAL NAME OR (II) ITS JURISDICTION OF ORGANIZATION
(IN EACH CASE, INCLUDING BY MERGING WITH OR INTO ANY OTHER ENTITY, REORGANIZING,
DISSOLVING, LIQUIDATING, REORGANIZING OR ORGANIZING IN ANY OTHER JURISDICTION),
UNTIL (A) IT SHALL HAVE GIVEN COLLATERAL AGENT NOT LESS THAN 10 BUSINESS DAYS’
PRIOR WRITTEN NOTICE, OR SUCH LESSER NOTICE PERIOD AGREED TO BY COLLATERAL
AGENT, OF ITS INTENTION SO TO DO, CLEARLY DESCRIBING SUCH CHANGE AND PROVIDING
SUCH OTHER INFORMATION IN CONNECTION THEREWITH AS COLLATERAL AGENT MAY
REASONABLY REQUEST AND (B) IT SHALL HAVE TAKEN ALL ACTION REASONABLY
SATISFACTORY TO COLLATERAL AGENT TO MAINTAIN THE PERFECTION AND PRIORITY OF
COLLATERAL AGENT’S LIEN IN THE COLLATERAL, IF APPLICABLE.

 

(C)           NO BORROWER WILL PERMIT ANY MEMBER OF THE BORROWER CONSOLIDATED
GROUP TO SELL, TRANSFER, LEASE OR OTHERWISE DISPOSE OF, OR ENTER INTO ANY
AGREEMENT TO SELL, LEASE, TRANSFER, ASSIGN OR OTHERWISE DISPOSE OF, ALL OR ANY
PART OF ITS ASSETS, INCLUDING, WITHOUT LIMITATION, THE COLLATERAL (OTHER THAN
PERMITTED TRANSFERS OF ASSETS).

 

(D)          NO BORROWER WILL PERMIT ANY MEMBER OF THE BORROWER CONSOLIDATED
GROUP TO CONSUMMATE ANY ACQUISITION (OTHER THAN PERMITTED ACQUISITIONS).

 

(E)           EXCEPT FOR SUBSIDIARIES WITH A TANGIBLE NET WORTH OF LESS THAN
$1,000,000.00 (EACH, AN “IMMATERIAL SUBSIDIARY”), NO BORROWER WILL PERMIT ANY
MEMBER OF THE BORROWER CONSOLIDATED GROUP TO CREATE, ACQUIRE OR OWN ANY
SUBSIDIARY IN CONNECTION WITH AN ACQUISITION OR OTHERWISE, PROVIDED THAT THE SUM
OF THE TANGIBLE NET WORTH OF ALL IMMATERIAL SUBSIDIARIES DOES NOT EXCEED
$5,000,000.

 

(F)           NO BORROWER WILL PERMIT ANY MEMBER OF THE BORROWER CONSOLIDATED
GROUP TO BECOME LIABLE, DIRECTLY OR INDIRECTLY, AS GUARANTOR OR OTHERWISE FOR
ANY OBLIGATION OF ANY OTHER PERSON, PROVIDED THAT A BORROWER MAY GUARANTY
INDEBTEDNESS OF ANY OTHER MEMBER OF THE BORROWER CONSOLIDATED GROUP SO LONG AS
SUCH GUARANTY DOES NOT OTHERWISE GIVE RISE TO A DEFAULT (AND FOR PURPOSES OF
THIS PARAGRAPH (F), SUCH CONTINGENT LIABILITY SHALL BE INCLUDED AS INDEBTEDNESS
OF BORROWER UNLESS THE SAME IS ALREADY REFLECTED AS INDEBTEDNESS ON A
CONSOLIDATED BASIS).

 

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(G)           NO BORROWER WILL PERMIT ANY MEMBER OF THE BORROWER CONSOLIDATED
GROUP TO DIRECTLY OR INDIRECTLY GRANT, MAKE, CREATE, INCUR, ASSUME OR SUFFER TO
EXIST (OR ENTER INTO OR SUFFER TO EXIST ANY AGREEMENT OR RESTRICTION THAT
PROHIBITS OR CONDITIONS THE CREATION, INCURRENCE OR ASSUMPTION OF), ANY LIEN
UPON OR WITH RESPECT TO ANY PART OF THE COLLATERAL, WHETHER NOW OWNED OR
HEREAFTER ACQUIRED, OR AGREE TO DO ANY OF THE FOREGOING, OTHER THAN PERMITTED
LIENS.

 

(H)          NO BORROWER WILL ISSUE, REDEEM, PURCHASE OR RETIRE ANY OF ITS
EQUITY INTERESTS OR GRANT OR ISSUE ANY WARRANT, RIGHT OR OPTION PERTAINING
THERETO OR ANY OTHER SECURITY CONVERTIBLE INTO ANY OF THE FOREGOING, NOR
OTHERWISE PERMIT ANY VOLUNTARY TRANSFER, SALE, REDEMPTION, RETIREMENT, OR OTHER
CHANGE IN THE OWNERSHIP OF ANY EQUITY INTERESTS OF BORROWER BY BORROWER IF THE
SAME WOULD RESULT IN A CHANGE IN CONTROL.

 

(I)            NO BORROWER WILL PERMIT ANY MEMBER OF THE BORROWER CONSOLIDATED
GROUP TO AMEND OR MODIFY IN ANY MATERIAL RESPECT ANY OF ITS ORGANIZATIONAL
DOCUMENTS.

 

(J)            NO BORROWER WILL DIRECTLY OR INDIRECTLY APPLY ANY PART OF THE
PROCEEDS OF ANY LOAN TO THE PURCHASING OR CARRYING OF ANY “MARGIN STOCK” WITHIN
THE MEANING OF REGULATION T, REGULATION U OR REGULATION X, OR ANY REGULATIONS,
INTERPRETATIONS OR RULINGS THEREUNDER.

 

(K)          NO BORROWER WILL PERMIT ANY MEMBER OF THE BORROWER CONSOLIDATED
GROUP TO TREAT, STORE, HANDLE, DISCHARGE, OR DISPOSE OF ANY HAZARDOUS MATERIALS,
PETROLEUM PRODUCTS, OR SOLID WASTES EXCEPT IN MATERIAL COMPLIANCE WITH ALL
ENVIRONMENTAL LAWS OR WHERE ANY SUCH FAILURE IN COMPLIANCE COULD NOT REASONABLY
BE EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT.

 

(L)           NO BORROWER WILL PERMIT ANY MEMBER OF THE BORROWER CONSOLIDATED
GROUP TO (I) CONDUCT ANY BUSINESS OR ENGAGE IN ANY TRANSACTION OR DEALING WITH
ANY BLOCKED PERSON, INCLUDING THE MAKING OR RECEIVING ANY CONTRIBUTION OF FUNDS,
GOODS OR SERVICES TO OR FOR THE BENEFIT OF ANY BLOCKED PERSON; (II) DEAL IN, OR
OTHERWISE ENGAGE IN ANY TRANSACTION RELATING TO, ANY PROPERTY OR INTERESTS IN
PROPERTY BLOCKED PURSUANT TO EXECUTIVE ORDER NO. 13224; OR (III) ENGAGE IN ON
CONSPIRE TO ENGAGE IN ANY TRANSACTION THAT EVADES OR AVOIDS, OR HAS THE PURPOSE
OF EVADING OR AVOIDING, OR ATTEMPTS TO VIOLATE, ANY OF THE PROHIBITIONS SET
FORTH IN EXECUTIVE ORDER NO. 13224 OR THE USA PATRIOT ACT.  BORROWER SHALL
DELIVER TO AGENT ANY CERTIFICATION OR OTHER EVIDENCE REQUESTED FROM TIME TO TIME
BY AGENT, IN ITS DISCRETION, CONFIRMING COMPLIANCE WITH THIS SECTION 10.2(L).

 

(M)         NO BORROWER WILL PERMIT ANY MEMBER OF THE BORROWER CONSOLIDATED
GROUP TO MAKE OR PERMIT ANY MATERIAL CHANGES IN ITS ACCOUNTING POLICIES OR
REPORTING PRACTICES, EXCEPT AS MAY BE PERMITTED OR REQUIRED BY LAW OR GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES.

 

(N)          BORROWER SHALL NOT ALLOW KMEX TO (I) CEASE OPERATIONS OF THE KMEX
PLANT OR SELL, TRANSFER, LEASE OR OTHERWISE DISPOSE OF THE KMEX PLANT, OR
(II) SO LONG AS KMEX’S ASSETS, LIABILITIES, INCOME AND LOSSES ARE INCLUDED
WITHIN THE DEFINITION OF “CONSOLIDATED BASIS”, SELL, TRANSFER, LEASE OR
OTHERWISE DISPOSE OF, OR ENTER INTO ANY AGREEMENT TO SELL, LEASE, TRANSFER,
ASSIGN OR OTHERWISE DISPOSE OF, ALL OR ANY MATERIAL PART OF KMEX’S ASSETS (OTHER
THAN THE KMEX PLANT) EXCEPT IN KMEX’S ORDINARY COURSE OF BUSINESS.

 

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10.3         FINANCIAL COVENANTS.

 

(A)          BORROWERS WILL CAUSE THE BORROWER CONSOLIDATED GROUP TO MAINTAIN AT
ALL TIMES DURING THE TERM OF THIS AGREEMENT:

 

(1)           A FIXED CHARGE COVERAGE OF NOT LESS THAN (I) FROM THE DATE OF THIS
AGREEMENT THROUGH JULY 31, 2008, 1.25 TO 1.0, AND (II) THEREAFTER, 1.5 TO 1.0;

 

(2)           A RATIO OF (I) FUNDED DEBT TO (II) THE SUM OF FUNDED DEBT PLUS
EQUITY OWNERS’ EQUITY OF NOT MORE THAN (X) FROM THE DATE OF THIS AGREEMENT
THROUGH APRIL 30, 2009, 60%, (Y) FROM MAY 1, 2009 THROUGH APRIL 30, 2010, 50%,
AND (Z) THEREAFTER, 45%; AND

 

(3)           A RATIO OF FUNDED DEBT TO EBITDA OF NOT MORE THAN (I) FROM THE
DATE OF THIS AGREEMENT THROUGH OCTOBER 31, 2008, 3.5 TO 1.0, AND
(II) THEREAFTER, 3.0 TO 1.0.

 

(B)           NO BORROWER WILL PERMIT ANY MEMBER OF THE BORROWER CONSOLIDATED
GROUP TO DECLARE OR PAY ANY DIVIDENDS IN AN AMOUNT SUCH THAT SUCH DECLARATION OR
PAYMENT WOULD GIVE RISE TO A DEFAULT ARISING OUT OF THE FAILURE TO MAINTAIN THE
COVENANTS REQUIRED UNDER SECTION 10.3(A).

 

(C)           NO BORROWER WILL PERMIT ANY MEMBER OF THE BORROWER CONSOLIDATED
GROUP TO MAKE ANY INVESTMENT, OTHER THAN PERMITTED INVESTMENTS.

 

(D)          NO BORROWER WILL PERMIT ANY MEMBER OF THE BORROWER CONSOLIDATED
GROUP TO INCUR, CREATE, ASSUME, OR PERMIT TO EXIST ANY INDEBTEDNESS, OTHER THAN
PERMITTED INDEBTEDNESS.

 

(E)           EXCEPT FOR AGREEMENTS REFLECTED IN THE MOST RECENT FINANCIAL
STATEMENTS, AGREEMENTS CURRENTLY IN EFFECT AND LISTED ON SCHEDULE 10.3
(E) ATTACHED HERETO, AGREEMENTS WHICH PROVIDE ONLY FOR EITHER PERMITTED
INVESTMENTS OR PERMITTED INDEBTEDNESS, AND AGREEMENTS BETWEEN OR AMONG MEMBERS
OF THE BORROWER CONSOLIDATED GROUP, NO BORROWER WILL PERMIT ANY MEMBER OF THE
BORROWER CONSOLIDATED GROUP TO ENTER INTO ANY AGREEMENT, TRANSACTION OR SERIES
OF TRANSACTIONS WHERE ANY AFFILIATE OF ANY MEMBER OF THE BORROWER CONSOLIDATED
GROUP IS A PARTY THERETO, (I) EXCEPT IN THE ORDINARY COURSE OF BUSINESS OR
(II) UNLESS THE GOVERNING BODY OF THE APPLICABLE MEMBER OF THE BORROWER
CONSOLIDATED GROUP HAS APPROVED SUCH AGREEMENT OR TRANSACTION.

 

(F)           NO BORROWER WILL PERMIT ANY MEMBER OF THE BORROWER CONSOLIDATED
GROUP TO ENTER INTO ANY AGREEMENT WITH RESPECT TO THE PRUDENTIAL OBLIGATIONS,
NOR ANY OF ITS EXISTING INDEBTEDNESS WHICH IS INDEBTEDNESS FOR BORROWED MONEY,
IF THE EFFECT OF SUCH AGREEMENT IS TO:

 

(1)           INCREASE THE INTEREST RATE ON SUCH INDEBTEDNESS OR PRUDENTIAL
OBLIGATIONS, OR MATERIALLY CHANGE THE COMPUTATION OR COMPONENT OF THE INTEREST
RATE OR YIELD PROVISIONS;

 

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(2)           CHANGE THE DATES UPON WHICH PAYMENTS OF PRINCIPAL, INTEREST OR
OTHER SCHEDULED PAYMENTS ARE DUE ON SUCH INDEBTEDNESS OR PRUDENTIAL OBLIGATIONS
(OTHER THAN TO EXTEND SUCH DATES);

 

(3)           CHANGE ANY DEFAULT OR EVENT OF DEFAULT OR ANY DEFINITION THEREOF
(OTHER THAN TO DELETE OR MAKE LESS RESTRICTIVE ANY DEFAULT PROVISION), OR
SHORTEN ANY GRACE OR CURE PERIOD WITH RESPECT TO SUCH INDEBTEDNESS OR PRUDENTIAL
OBLIGATIONS;

 

(4)           ADD ANY MATERIAL COVENANT WITH RESPECT TO SUCH INDEBTEDNESS OR
PRUDENTIAL OBLIGATIONS;

 

(5)           CHANGE THE REDEMPTION OR PREPAYMENT PROVISIONS OF SUCH
INDEBTEDNESS OR PRUDENTIAL OBLIGATIONS (OTHER THAN TO EXTEND THE DATES THEREFORE
OR TO REDUCE THE PREMIUMS PAYABLE IN CONNECTION THEREWITH); OR

 

(6)           MATERIALLY INCREASE THE OBLIGATIONS OF THE APPLICABLE MEMBER OF
THE BORROWER CONSOLIDATED GROUP (INCLUDING ANY INCREASE IN THE PRINCIPAL AMOUNT
OF ANY SUCH INDEBTEDNESS) OR CONFER ADDITIONAL MATERIAL RIGHTS TO THE HOLDER OF
SUCH INDEBTEDNESS OR PRUDENTIAL OBLIGATIONS IN A MANNER ADVERSE TO ANY MEMBER OF
THE BORROWER CONSOLIDATED GROUP OR LENDER PARTY.

 

(G)           BORROWER SHALL NOT PERMIT THE BORROWER CONSOLIDATED GROUP TO MAKE
CAPITAL EXPENDITURES IN AN AGGREGATE AMOUNT IN EXCESS OF $10,000,000.00 IN ANY
CONSECUTIVE TWELVE-MONTH PERIOD.

 

10.4         INSURANCE AND INSURANCE PROCEEDS.

 

(A)          BORROWER SHALL CAUSE THE ASSETS, PROPERTIES AND BUSINESS OF THE
BORROWER CONSOLIDATED GROUP TO BE INSURED AGAINST SUCH HAZARDS AND LIABILITIES,
UNDER SUCH COVERAGES AND IN SUCH AMOUNTS, AS ARE CUSTOMARILY MAINTAINED BY
PRUDENT COMPANIES SIMILARLY SITUATED AND UNDER POLICIES ISSUED BY INSURERS OF
RECOGNIZED RESPONSIBILITY.  UPON REQUEST OF COLLATERAL AGENT, BORROWER SHALL
PROVIDE (AND SHALL CAUSE THE OTHER MEMBERS OF THE BORROWER CONSOLIDATED GROUP TO
PROVIDE) COLLATERAL AGENT WITH INSURANCE CERTIFICATES AND COPIES OF INSURANCE
POLICIES THEN IN EFFECT (IT BEING AGREED THAT NO MEMBER OF THE BORROWER
CONSOLIDATED GROUP SHALL BE REQUIRED TO MAINTAIN COVERAGES FOR (I) PRODUCTS
LIABILITY INSURANCE ON BORROWERS’ WOOD TREATING PRODUCTS, NOR (II) BUSINESS
INTERRUPTION INSURANCE, EXCEPT FOR THE MORTGAGED PROPERTY LOCATED IN PUEBLO,
COLORADO).

 

(B)           BORROWER SHALL CAUSE (I) EACH GENERAL LIABILITY INSURANCE POLICY
TO NAME COLLATERAL AGENT AS ADDITIONAL INSURED, (II) EACH CASUALTY INSURANCE
POLICY INSURING ANY COLLATERAL TO NAME COLLATERAL AGENT AS LOSS PAYEE (AND WITH
RESPECT TO ANY MORTGAGED PROPERTY, A MORTGAGEE), AND (III) ALL SUCH POLICIES TO
PROVIDE THAT SUCH POLICIES WILL NOT BE CANCELED OR MATERIALLY CHANGED WITHOUT
THIRTY (30) DAYS PRIOR WRITTEN NOTICE TO COLLATERAL AGENT.

 

(C)           ANY NET CASH PROCEEDS PAYABLE UNDER ANY INSURANCE POLICY ON
ACCOUNT OF DAMAGE OR DESTRUCTION TO THE MORTGAGED PROPERTY SHALL BE PAID TO
COLLATERAL AGENT AS A PREPAYMENT OF THE PRINCIPAL INDEBTEDNESS OWING UNDER THE
TERM NOTE; PROVIDED THAT SUCH NET CASH PROCEEDS SHALL BE PAID TO BORROWER SO
LONG AS (1) NO EVENT OF DEFAULT EXISTS AT THE TIME OF

 

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PAYMENT, AND COLLATERAL AGENT DETERMINES IN ITS REASONABLE DISCRETION THAT THE
OCCURRENCE OF SUCH CASUALTY EVENT WOULD NOT REASONABLY BE EXPECTED TO RESULT IN
AN EVENT OF DEFAULT (INCLUDING AN EVENT OF DEFAULT ON ACCOUNT OF LOSS OF INCOME
OCCASIONED BY SUCH CASUALTY EVENT); AND (2) AS SOON AS REASONABLY PRACTICABLE
FOLLOWING THE CASUALTY EVENT, BORROWER PROVIDES EVIDENCE REASONABLY SATISFACTORY
TO COLLATERAL AGENT THAT SUCH NET CASH PROCEEDS WILL BE APPLIED (I) TO THE
REPAIR OR RESTORATION OF THE MORTGAGED PROPERTY SO DAMAGED, OR TO THE
CONSTRUCTION OF A REPLACEMENT FACILITY FOR THE PROPERTY DAMAGED OR CONDEMNED, OR
TO THE EXPANSION OF THE PRODUCTIVE CAPACITY OF AN EXISTING FACILITY IN LIEU
THEREOF (AND, UNLESS WAIVED BY REQUIRED LENDERS, BORROWER SHALL EXECUTE SUCH
DOCUMENTS AND INSTRUMENTS AS MAY BE NECESSARY OR APPROPRIATE IN COLLATERAL
AGENT’S REASONABLE DISCRETION TO CAUSE SUCH REPLACEMENT FACILITY OR EXPANDED
FACILITY TO CONSTITUTE PART OF THE COLLATERAL); OR (II) IF APPROVED BY
COLLATERAL AGENT, TO THE PURCHASE OF OTHER ASSETS TO BE USED IN THE OPERATION OF
THE BUSINESS OF A MEMBER OF THE BORROWER CONSOLIDATED GROUP.

 

10.5         BORROWER’S GENERAL COVENANTS AND AGREEMENTS PERTAINING TO THE
COLLATERAL.  BORROWER COVENANTS AND AGREES THAT:

 

(A)          THE ADDRESSES OF BORROWER’S PRINCIPAL PLACE OF BUSINESS (OR CHIEF
EXECUTIVE OFFICE IF MORE THAN ONE), THE OFFICE WHERE BORROWER KEEPS AND WILL
KEEP BORROWER’S RECORDS, INCLUDING, WITHOUT LIMITATION, THOSE RECORDS CONCERNING
ALL OF BORROWER’S ACCOUNTS AND THE OTHER COLLATERAL, AND THE PLACE OR PLACES AT
WHICH ALL OF BORROWER’S INVENTORY, EQUIPMENT AND OTHER TANGIBLE PROPERTY IS AND
WILL BE LOCATED ARE CORRECTLY SET FORTH ON SCHEDULE 10.5(A); AND BORROWER SHALL
IMMEDIATELY ADVISE AGENT AND COLLATERAL AGENT IN WRITING OF ANY CHANGE IN ANY OF
SAID ADDRESSES.  BORROWER SHALL NOT REMOVE SUCH RECORDS FROM THE PLACE OR PLACES
SET FORTH ON SCHEDULE 10.5(A), NOR SHALL BORROWER KEEP ANY OF SUCH RECORDS AT
ANY OTHER LOCATIONS UNLESS (I) BORROWER GIVES AGENT AND COLLATERAL AGENT AT
LEAST 10 DAYS’ WRITTEN NOTICE THEREOF AND OF THE NEW LOCATION, AND (II) THE NEW
LOCATION IS WITHIN THE CONTINENTAL UNITED STATES OF AMERICA.  BORROWER SHALL
GIVE AGENT AND COLLATERAL AGENT AT LEAST 10 DAYS’ PRIOR WRITTEN NOTICE OF
BORROWER’S OPENING OF ANY NEW OFFICE OR PLACE OF BUSINESS, AND ANY SUCH OFFICE
OR PLACE OF BUSINESS SHALL BE WITHIN THE CONTINENTAL UNITED STATES OF AMERICA.

 

(B)           SUBJECT TO ANY PERMITTED TRANSFERS OF ASSETS, BORROWER IS AND
SHALL REMAIN THE OWNER OF ALL REAL ESTATE ON WHICH ANY OF THE LOCATIONS
DESCRIBED IN SUBPARAGRAPH (A) NEXT ABOVE ARE LOCATED; OR IF NOT, EXCEPT AS
OTHERWISE AGREED TO BY AGENT OR COLLATERAL AGENT, BORROWER HAS HERETOFORE
OBTAINED FROM EACH OWNER OF SAID REAL ESTATE A WRITTEN WAIVER OR SUBORDINATION
(IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO AGENT AND/OR COLLATERAL AGENT)
OF ANY LANDLORD’S LIEN OR OTHER LIEN SAID OWNER MIGHT HAVE WITH RESPECT TO THE
COLLATERAL, AND BORROWER HAS DELIVERED THE SAME TO COLLATERAL AGENT.

 

(C)           UPON REQUEST OF AGENT OR COLLATERAL AGENT, BORROWER SHALL PROMPTLY
DELIVER TO COLLATERAL AGENT THE CERTIFICATES OF TITLE FOR ANY MOTOR VEHICLES NOW
OR HEREAFTER INCLUDED IN THE COLLATERAL THAT ARE SUBJECT TO THE TITLE LAWS OF
ANY STATE OF THE UNITED STATES OF AMERICA OR ANY OTHER JURISDICTION AND SHALL
JOIN WITH COLLATERAL AGENT IN EXECUTING ANY APPLICATIONS AND OTHER DOCUMENTS AND
TAKING ANY OTHER ACTIONS NECESSARY OR DESIRABLE IN COLLATERAL AGENT’S OPINION TO
PERFECT COLLATERAL AGENT’S LIEN IN SUCH VEHICLES.  COLLATERAL AGENT MAY RETAIN
POSSESSION OF SUCH CERTIFICATES OF TITLE UNTIL PAYMENT IN FULL OF ALL THE
SECURED OBLIGATIONS AND/OR UNTIL COLLATERAL AGENT’S LIEN IS TERMINATED.

 

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(D)          AGENT AND COLLATERAL AGENT MAY CORRECT ANY AND ALL PATENT ERRORS IN
ANY FINANCING STATEMENTS FILED IN CONNECTION HEREWITH.

 

(E)           BORROWER SHALL FURNISH TO AGENT AND COLLATERAL AGENT FROM TIME TO
TIME STATEMENTS AND SCHEDULES FURTHER IDENTIFYING AND DESCRIBING THE COLLATERAL
AND SUCH OTHER REPORTS IN CONNECTION WITH THE COLLATERAL AS AGENT OR COLLATERAL
AGENT MAY REQUEST, ALL IN REASONABLE DETAIL.

 

(F)           BORROWER SHALL KEEP AND MAINTAIN AT ITS OWN COST AND EXPENSE
SATISFACTORY AND COMPLETE RECORDS OF THE COLLATERAL, INCLUDING WITHOUT
LIMITATION, A RECORD OF ALL PAYMENTS RECEIVED AND ALL CREDITS GRANTED WITH
RESPECT TO THE COLLATERAL AND ALL OTHER DEALINGS WITH THE COLLATERAL.  UPON
REQUEST OF AGENT OR COLLATERAL AGENT, BORROWER SHALL MAKE PROPER ENTRIES IN ITS
BOOKS DISCLOSING THE ASSIGNMENT OF THE COLLATERAL TO COLLATERAL AGENT, AND
BORROWER SHALL SEGREGATE ITS RECORDS CONCERNING THE COLLATERAL AND MARK THE
COLLATERAL WITH COLLATERAL AGENT’S NAME OR IN SUCH OTHER MANNER AS SHALL BE
SATISFACTORY TO AGENT AND COLLATERAL AGENT.  AFTER THE OCCURRENCE OF AND DURING
THE CONTINUANCE OF ANY DEFAULT, BORROWER SHALL DELIVER AND TURN OVER TO AGENT OR
COLLATERAL AGENT ANY SUCH RECORDS AT ANY TIME ON DEMAND OF AGENT OR COLLATERAL
AGENT.

 

(G)           PROMPTLY UPON WRITTEN REQUEST OF AGENT OR COLLATERAL AGENT,
BORROWER SHALL EXERCISE COMMERCIALLY REASONABLE EFFORTS TO OBTAIN A WAIVER OF
ANY LIEN CLAIMS OR RIGHTS THAT ANY OWNERS OR MORTGAGEES OF ANY REAL ESTATE (OR
OF ANY POSSESSORY INTEREST THEREIN) ON WHICH THE COLLATERAL, OR ANY PART
THEREOF, IS NOW OR HEREAFTER MAY BE LOCATED, MAY HAVE WITH RESPECT TO THE
COLLATERAL, OR SHALL SECURE AN AGREEMENT WHEREIN SUCH PERSONS SUBORDINATE THEIR
RIGHTS, TITLES, INTERESTS AND LIEN CLAIMS TO COLLATERAL AGENT’S LIEN IN, ON AND
UPON THE COLLATERAL.

 

(H)          PROMPTLY UPON WRITTEN REQUEST OF AGENT OR COLLATERAL AGENT,
BORROWER SHALL PROVIDE AGENT AND COLLATERAL AGENT WITH COPIES OF ALL AGREEMENTS
BETWEEN BORROWER AND ANY WAREHOUSE AT WHICH ANY COLLATERAL MAY, FROM TIME TO
TIME, BE KEPT AND ALL LEASE OR SIMILAR AGREEMENTS BETWEEN BORROWER AND ANY OTHER
PERSON, WHETHER BORROWER IS LESSOR OR LESSEE THEREUNDER.

 

(I)            IF ANY ACCOUNT ARISES OUT OF A CONTRACT WITH THE UNITED STATES OF
AMERICA, OR ANY OTHER GOVERNMENTAL AUTHORITY, BORROWER SHALL PROMPTLY NOTIFY
AGENT AND COLLATERAL AGENT THEREOF IN WRITING AND EXECUTE ANY INSTRUMENTS AND
TAKE ANY OTHER ACTION REQUIRED OR REQUESTED BY AGENT OR COLLATERAL AGENT TO
PERFECT COLLATERAL AGENT’S LIEN ON AND RIGHT TO COLLECT SUCH ACCOUNT UNDER THE
PROVISIONS OF THE ASSIGNMENT OF CLAIMS ACT OR OTHER APPLICABLE LAW.

 

(J)            BORROWER SHALL PROMPTLY NOTIFY AGENT AND COLLATERAL AGENT IN
WRITING OF THE INITIATION OF ANY COMMERCIAL TORT CLAIM SEEKING DAMAGES ON BEHALF
OF BORROWER IN EXCESS OF $500,000.00.  BORROWER SHALL EXECUTE AND DELIVER SUCH
STATEMENTS, DOCUMENTS AND NOTICES AND DO AND CAUSE TO BE DONE ALL SUCH THINGS AS
AGENT OR COLLATERAL AGENT MAY REASONABLY DEEM NECESSARY OR APPROPRIATE TO
CREATE, PERFECT AND MAINTAIN COLLATERAL AGENT’S LIEN UPON ANY COMMERCIAL TORT
CLAIM.

 

10.6         COLLECTION OF ACCOUNTS; SEGREGATION OF PROCEEDS, ETC.  BORROWER
COVENANTS AND AGREES THAT, EXCEPT TO THE EXTENT THAT AGENT’S OR COLLATERAL
AGENT’S EXERCISE OF ITS RIGHTS AND REMEDIES HEREUNDER OR UNDER ANY OTHER LOAN
DOCUMENT SHALL PREVENT BORROWER FROM DOING SO,

 

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BORROWER WILL, AT BORROWER’S SOLE EXPENSE, COLLECT FROM THE ACCOUNT DEBTOR ON
EACH ACCOUNT ALL AMOUNTS DUE THEREON AS AND WHEN THE SAME SHALL BECOME DUE; AND
IN THE EVENT OF ANY DEFAULT BY ANY ACCOUNT DEBTOR JUSTIFYING SUCH ACTION,
BORROWER SHALL HAVE THE AUTHORITY, AT BORROWER’S SOLE EXPENSE, TO REPOSSESS ANY
MERCHANDISE COVERED BY ANY SUCH ACCOUNT IN ACCORDANCE WITH THE TERMS THEREOF AND
ANY APPLICABLE LAW AND TO TAKE SUCH OTHER ACTION WITH RESPECT TO ANY SUCH
ACCOUNT OR THE MERCHANDISE COVERED THEREBY AS BORROWER, IN THE ABSENCE OF
INSTRUCTIONS FROM AGENT OR COLLATERAL AGENT, MAY DEEM ADVISABLE.

 

10.7         COLLECTION METHODS.  BORROWER AGREES THAT NO COURT ACTION OR OTHER
LEGAL PROCEEDINGS FOR GARNISHMENT, ATTACHMENT, REPOSSESSION OF PROPERTY,
DETINUE, OR ANY ATTEMPT TO REPOSSESS ANY MERCHANDISE COVERED BY ANY ACCOUNT
OTHER THAN THROUGH LEGAL PROCEEDINGS, SHALL BE DONE OR ATTEMPTED TO BE DONE BY
BORROWER EXCEPT BY OR UNDER THE DIRECTION OF COMPETENT LEGAL COUNSEL.  BORROWER
AGREES TO INDEMNIFY AND HOLD LENDER PARTY HARMLESS FROM ANY LOSS OR LIABILITY OF
ANY KIND OR CHARACTER WHICH MAY BE ASSERTED OR SOUGHT TO BE ASSERTED AGAINST
LENDER PARTY BY VIRTUE OF ANY SUIT FILED, PROCESS ISSUED OR ANY REPOSSESSION OR
ATTEMPTED REPOSSESSION DONE OR ATTEMPTED BY BORROWER OR AT BORROWER’S DIRECTION
OR ANY ENDEAVORS THAT BORROWER MAY MAKE TO COLLECT OR ENFORCE ANY ACCOUNTS OR
REPOSSESS ANY GOODS COVERED BY ANY ACCOUNT.

 

10.8         VERIFICATION OF ACCOUNTS.  BORROWER AGREES THAT ANY OF AGENT’S OR
COLLATERAL AGENT’S OFFICERS, EMPLOYEES OR AGENTS SHALL HAVE THE RIGHT, AT ANY
TIME OR TIMES HEREAFTER, IN AGENT’S OR COLLATERAL AGENT’S NAME OR IN THE NAME OF
BORROWER, TO VERIFY WITH ANY ACCOUNT DEBTOR THE VALIDITY OR AMOUNT OF, OR ANY
OTHER MATTER RELATING TO, ANY ACCOUNTS BY MAIL, TELEPHONE, TELEGRAPH OR
OTHERWISE.

 

10.9         NOTICE REGARDING DISPUTED ACCOUNTS.  BORROWER COVENANTS AND AGREES
THAT IN THE EVENT ANY ELIGIBLE ACCOUNT IS SUBJECT TO A DISPUTE BETWEEN ANY
ACCOUNT DEBTOR AND BORROWER WHERE THE AMOUNT IN CONTROVERSY EXCEEDS $500,000.00,
BORROWER SHALL PROMPTLY PROVIDE AGENT AND COLLATERAL AGENT WITH WRITTEN NOTICE
THEREOF, EXPLAINING IN DETAIL THE REASON FOR THE DISPUTE, ALL CLAIMS RELATED
THERETO AND THE AMOUNT IN CONTROVERSY.

 

10.10       RECORDS, SCHEDULES AND ASSIGNMENTS.  BORROWER COVENANTS AND AGREES
THAT BORROWER SHALL KEEP ACCURATE RECORDS OF BORROWER’S ACCOUNTS AND INVENTORY,
AND SHALL PROMPTLY DELIVER TO AGENT AND/OR COLLATERAL AGENT, WITHIN 15 DAYS
AFTER DEMAND OF AGENT AND/OR COLLATERAL AGENT (I) A DETAILED AGED TRIAL BALANCE,
IN FORM AND SUBSTANCE ACCEPTABLE TO AGENT AND COLLATERAL AGENT, OF ALL
THEN-EXISTING ACCOUNTS (“SCHEDULE OF ACCOUNTS”), (II) A CURRENT SCHEDULE OF
INVENTORY (“SCHEDULE OF INVENTORY”), (III) THE ORIGINAL OR A COPY OF ALL
DOCUMENTS EVIDENCING OR RELATING TO THE ACCOUNTS OR INVENTORY SO SCHEDULED,
(IV) SUCH OTHER INFORMATION RELATING TO THE THEN-EXISTING ACCOUNTS AND INVENTORY
AS AGENT OR COLLATERAL AGENT SHALL REASONABLY REQUEST, AND (V) FORMAL WRITTEN
ASSIGNMENTS OR SCHEDULES SPECIFICALLY DESCRIBING THE ACCOUNTS AND INVENTORY AND
CONFIRMING COLLATERAL AGENT’S LIEN THEREON.

 

10.11       VISITATION.  BORROWER AGREES TO PERMIT REPRESENTATIVES OF AGENT AND
COLLATERAL AGENT FROM TIME TO TIME TO VISIT AND INSPECT THE COLLATERAL, ALL
RECORDS RELATED THERETO, THE PREMISES UPON WHICH ANY OF THE COLLATERAL IS
LOCATED, AND ANY OF THE OTHER OFFICES AND PROPERTIES OF BORROWER; TO EXAMINE THE
ASSETS, BOOKS OF ACCOUNT, AND RECORDS OF BORROWER; TO DISCUSS THE AFFAIRS AND
FINANCES OF BORROWER WITH AND BE ADVISED AS TO THE SAME BY THE OFFICERS THEREOF;
AND

 

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TO VERIFY THE AMOUNT, QUANTITY, VALUE AND CONDITION OF, OR ANY OTHER MATTER
RELATING TO, THE COLLATERAL, ALL AT SUCH REASONABLE TIMES AND INTERVALS AS AGENT
AND COLLATERAL AGENT MAY DESIRE.

 

10.12       USE OF TANGIBLE PROPERTY.  BORROWER COVENANTS AND AGREES (A) TO
COMPLY WITH ALL APPLICABLE LAWS GOVERNING THE USE OF ALL TANGIBLE PROPERTY
(EXCEPT WHERE A FAILURE TO SO COMPLY WITH SUCH LAWS WOULD CAUSE A MATERIAL
ADVERSE EFFECT), (B) TO MAINTAIN ALL TANGIBLE PROPERTY IN GOOD CONDITION AND
REPAIR (NORMAL WEAR AND TEAR EXCEPTED), (C) TO COMPLY WITH THE MATERIAL TERMS OF
ANY LEASE COVERING THE PREMISES WHEREIN ANY TANGIBLE PROPERTY IS LOCATED AND TO
COMPLY WITH ALL MATERIAL REQUIREMENTS OF ANY GOVERNMENTAL AUTHORITY CONCERNING
SUCH PREMISES OR THE CONDUCT OF BUSINESS THEREIN WHERE A FAILURE TO SO COMPLY
WITH SUCH LEASE TERMS OR LAWS WOULD CAUSE A MATERIAL ADVERSE EFFECT; AND (D) NOT
TO LEASE ANY OF THE TANGIBLE PROPERTY TO ANY PERSON OR PERMIT THE SAME TO BE
LEASED OR USED FOR HIRE OTHERWISE THAN PURSUANT TO ANY PERMITTED LIENS.

 

10.13       COLLATERAL EVIDENCED BY INSTRUMENTS OR DOCUMENTS.  BORROWER
COVENANTS AND AGREES THAT UPON BORROWER’S RECEIPT OF ANY COLLATERAL WHICH IS
EVIDENCED OR SECURED BY AN AGREEMENT, INSTRUMENT, DOCUMENT OR CHATTEL PAPER AND
UPON DEMAND OF AGENT OR COLLATERAL AGENT, BORROWER SHALL DELIVER THE ORIGINAL
THEREOF (OR EACH EXECUTED OR ORIGINAL COUNTERPART IF MORE THAN ONE) TO
COLLATERAL AGENT, TOGETHER WITH APPROPRIATE ENDORSEMENTS AND/OR ASSIGNMENTS IN
FORM AND SUBSTANCE ACCEPTABLE TO COLLATERAL AGENT.

 

10.14       MAINTAINING BANK ACCOUNTS.  BORROWER COVENANTS AND AGREES THAT UNTIL
THE TERMINATION OF COLLATERAL AGENT’S LIEN:

 

(A)          EXCEPT FOR BANK ACCOUNTS THAT HAVE AVERAGE MONTHLY COLLECTED
BALANCES OF LESS THAN $100,000.00 (IN THE AGGREGATE), BORROWER SHALL MAINTAIN
ALL OF ITS BANK ACCOUNTS (COLLECTIVELY, THE “BANK ACCOUNTS”), INCLUDING ANY
DEPOSIT ACCOUNTS AND DISBURSEMENT ACCOUNTS, ONLY WITH WACHOVIA  (THE “APPROVED
BANK ACCOUNTS”); PROVIDED HOWEVER, DURING THE PERIOD OF TIME THAT A TRANSITION
SERVICES AGREEMENT IS IN EFFECT, BORROWERS MAY MAINTAIN AND MAKE DEPOSITS TO AND
DISBURSEMENTS FROM THE BANK ACCOUNTS ESTABLISHED AND MAINTAINED THEREUNDER.

 

(B)           UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF A DEFAULT AND
THE DEMAND OF COLLATERAL AGENT, BORROWER SHALL MAINTAIN LOCKBOXES AND BLOCKED
DEPOSIT ACCOUNTS (EACH A “LOCKBOX ACCOUNT”) ONLY WITH WACHOVIA AND WITH OTHER
BANKS (EACH A “LOCKBOX BANK”) THAT HAVE ENTERED INTO LETTER OR OTHER AGREEMENTS
(EACH A “LOCKBOX AGREEMENT”) APPROVED BY AND ACCEPTABLE TO COLLATERAL AGENT IN
ITS DISCRETION.

 

(C)           UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF A DEFAULT AND
THE DEMAND OF COLLATERAL AGENT, BORROWER SHALL PROMPTLY INSTRUCT EACH PERSON
OBLIGATED AT ANY TIME TO MAKE ANY PAYMENT TO BORROWER FOR ANY REASON TO MAKE
SUCH PAYMENT TO A LOCKBOX ACCOUNT, AND SHALL PAY TO COLLATERAL AGENT FOR DEPOSIT
IN AN APPROVED BANK ACCOUNT AS MAY BE FROM TIME TO TIME DESIGNATED BY COLLATERAL
AGENT, AT THE END OF EACH BUSINESS DAY, ALL PROCEEDS OF COLLATERAL AND ALL OTHER
CASH RECEIVED BY IT ON SUCH DAY.

 

(D)          BORROWER SHALL INSTRUCT EACH LOCKBOX BANK TO TRANSFER TO AN
APPROVED BANK ACCOUNT DESIGNATED BY COLLATERAL AGENT, AT THE END OF EACH
BUSINESS DAY, IN SAME DAY FUNDS, AN AMOUNT EQUAL TO THE CREDIT BALANCE OF THE
LOCKBOX ACCOUNT IN SUCH LOCKBOX BANK.

 

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(E)           UPON ANY TERMINATION OF ANY LOCKBOX AGREEMENT OR OTHER AGREEMENT
WITH RESPECT TO THE MAINTENANCE OF A LOCKBOX ACCOUNT BY BORROWER OR ANY LOCKBOX
BANK, BORROWER SHALL IMMEDIATELY NOTIFY ALL PERSONS THAT WERE MAKING PAYMENTS TO
SUCH LOCKBOX ACCOUNT TO MAKE ALL FUTURE PAYMENTS TO ANOTHER LOCKBOX ACCOUNT OR
TO AN APPROVED BANK ACCOUNT DESIGNATED BY COLLATERAL AGENT.  BORROWER AGREES TO
TERMINATE ANY OR ALL LOCKBOX ACCOUNT AND LOCKBOX AGREEMENTS UPON REQUEST BY
COLLATERAL AGENT.

 

10.15       FILING FEES AND TAXES.  BORROWER COVENANTS AND AGREES TO PAY ALL
RECORDING AND FILING FEES, REVENUE STAMPS, TAXES AND OTHER EXPENSES AND CHARGES
PAYABLE IN CONNECTION WITH THE EXECUTION AND DELIVERY TO LENDER PARTIES OF THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS, AND THE RECORDING, FILING, SATISFACTION,
CONTINUATION AND RELEASE OF ANY MORTGAGES, FINANCING STATEMENTS OR OTHER
INSTRUMENTS FILED OR RECORDED IN CONNECTION HEREWITH OR THEREWITH.

 

10.16       ASSIGNED AGREEMENTS.  EXCEPT IN BORROWER’S ORDINARY COURSE OF
BUSINESS, BORROWER COVENANTS AND AGREES THAT IT SHALL NOT (A) CANCEL OR
TERMINATE ANY ASSIGNED AGREEMENT OR CONSENT TO OR ACCEPT ANY CANCELLATION OR
TERMINATION THEREOF; (B) AMEND OR OTHERWISE MODIFY ANY ASSIGNED AGREEMENT OR
GIVE ANY CONSENT, WAIVER OR APPROVAL THEREUNDER; (C) WAIVE ANY DEFAULT OR BREACH
OF ANY ASSIGNED AGREEMENT; OR (D) TAKE ANY OTHER ACTION IN CONNECTION WITH ANY
ASSIGNED AGREEMENT, AND, NOTWITHSTANDING THE FOREGOING, IN EACH CASE WHERE ANY
SUCH ACTION MAY GIVE RISE TO A MATERIAL ADVERSE CHANGE, SUCH ACTION SHALL ONLY
BE TAKEN WITH AGENT’S PRIOR WRITTEN CONSENT.

 

10.17       AIR PRODUCTS APA DOCUMENTS.  BORROWER SHALL (A) OBSERVE AND PERFORM
IN ALL MATERIAL RESPECTS ALL THE OBLIGATIONS IMPOSED UPON BORROWER UNDER THE AIR
PRODUCTS APA DOCUMENTS; (B) PROMPTLY SEND TO AGENT COPIES OF EACH MATERIAL
NOTICE WHICH BORROWER SHALL SEND OR RECEIVE UNDER THE AIR PRODUCTS APA DOCUMENTS
(INCLUDING, BUT NOT LIMITED TO, THE “STATEMENT” AS DEFINED IN SECTION 2.01(A) OF
THE AIR PRODUCTS APA, ANY “NOTICE OF DISAGREEMENT” AS DEFINED IN
SECTION 2.01(B) OF THE AIR PRODUCTS APA, ANY UPDATES TO THE SELLER DISCLOSURE
LETTER AS PROVIDED FOR IN SECTION 5.02(B)(I) OF THE AIR PRODUCTS APA, AND ANY
NOTICE OF TERMINATION AS PROVIDED FOR IN SECTION 8.01(A)(I) OF THE AIR PRODUCTS
APA); (C) ENFORCE THE PERFORMANCE AND OBSERVANCE OF THE MATERIAL PROVISIONS OF
THE AIR PRODUCTS APA DOCUMENTS; (D) NOT ALTER, MODIFY OR CHANGE THE MATERIAL
TERMS OF THE AIR PRODUCTS APA DOCUMENTS, WITHOUT THE PRIOR WRITTEN CONSENT OF
AGENT IN EACH SUCH CASE; AND (E) NOT CANCEL OR TERMINATE ANY MATERIAL AIR
PRODUCTS APA DOCUMENT EXCEPT IN ACCORDANCE WITH ITS TERMS.

 

10.18       UNDERLYING DOCUMENTATION.  BORROWER COVENANTS AND AGREES THAT
BORROWER WILL, AT ANY TIME A DEFAULT EXISTS AND UPON THE REQUEST THEREFOR BY
AGENT OR COLLATERAL AGENT, PROMPTLY DELIVER POSSESSION TO COLLATERAL AGENT OF
ANY OR ALL OF THE MATERIAL CONTRACTS.

 

10.19       FURTHER ASSURANCES.  BORROWER COVENANTS AND AGREES THAT, AT
BORROWER’S COST AND EXPENSE, UPON REQUEST OF AGENT OR COLLATERAL AGENT, BORROWER
SHALL DULY EXECUTE AND DELIVER, OR CAUSE TO BE DULY EXECUTED AND DELIVERED, TO
AGENT AND/OR COLLATERAL AGENT SUCH FURTHER INSTRUMENTS AND DOCUMENTS AND DO AND
CAUSE TO BE DONE SUCH FURTHER ACTS AS MAY BE REASONABLY NECESSARY OR PROPER IN
THE OPINION OF AGENT, COLLATERAL AGENT OR ITS RESPECTIVE COUNSEL TO CARRY OUT
MORE EFFECTIVELY THE PROVISIONS AND PURPOSES OF THIS AGREEMENT.

 

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10.20       POST-CLOSING MATTERS.  BORROWER SHALL SATISFY THE REQUIREMENTS SET
FORTH ON SCHEDULE 10.20 ON OR BEFORE THE DATE SPECIFIED FOR SUCH REQUIREMENTS OR
SUCH LATER DATE TO BE DETERMINED BY THE REQUIRED LENDERS.

 

ARTICLE XI

 

11.           DEFAULT

 

11.1         EVENTS OF DEFAULT.  THE OCCURRENCE OF ANY ONE OR MORE OF THE
FOLLOWING EVENTS SHALL CONSTITUTE AN EVENT OF DEFAULT HEREUNDER:

 

(A)          BORROWER SHALL FAIL TO PAY ANY INSTALLMENT OF PRINCIPAL OR INTEREST
OR FEE OR ANY OTHER AMOUNT PAYABLE UNDER THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT WITHIN THREE (3) DAYS AFTER THE SAME BECOMES DUE.

 

(B)           BORROWER SHALL FAIL TO TIMELY PERFORM THE COVENANTS SET FORTH IN
SECTION 10.1(N), SECTION 10.2(B), SECTION 10.2(C), 10.2(F), SECTION 10.2(G),
SECTION 10.2(H), SECTION 10.3(A), SECTION 10.3(B), SECTION 10.3(C),
SECTION 10.3(D), OR SECTION 10.20.

 

(C)           BORROWER SHALL DEFAULT IN THE PERFORMANCE OF OR COMPLIANCE WITH
ANY TERM CONTAINED HEREIN (OTHER THAN THOSE REFERRED TO IN SECTIONS 11.1(A) OR
(B)) OR IN ANY OTHER LOAN DOCUMENT AND SUCH DEFAULT IS NOT REMEDIED WITHIN 30
DAYS AFTER THE EARLIER OF (I) A RESPONSIBLE OFFICER OBTAINING ACTUAL KNOWLEDGE
OF SUCH DEFAULT AND (II) BORROWER RECEIVING WRITTEN NOTICE OF SUCH DEFAULT FROM
ANY HOLDER OF THE NOTES (ANY SUCH WRITTEN NOTICE TO BE IDENTIFIED AS A “NOTICE
OF DEFAULT” AND TO REFER SPECIFICALLY TO THIS SECTION 11.1(C)); PROVIDED THAT,
WITH RESPECT TO ANY DEFAULT IN THE PERFORMANCE OF OR COMPLIANCE WITH ANY TERM
CONTAINED IN SECTION 10.1(C), SUCH 30 DAY CURE PERIOD SHALL BE EXTENDED FOR UP
TO AN ADDITIONAL 30 DAYS SO LONG AS ON OR BEFORE THE 30TH DAY AFTER SUCH DEFAULT
BORROWER HAS PROVIDED THE HOLDERS OF THE NOTES WITH UNAUDITED FINANCIAL
STATEMENTS OF THE TYPE REQUIRED BY SECTION 10.1(C) AND BORROWER HAS COMMENCED
AND CONTINUES TO DILIGENTLY PURSUE A CURE OF SUCH DEFAULT; PROVIDED, FURTHER,
THAT WITH RESPECT TO ANY DEFAULT IN THE PERFORMANCE OF OR COMPLIANCE WITH ANY
TERM CONTAINED HEREIN (OTHER THAN THOSE REFERRED TO IN SECTIONS 11.1 (A) OR (B))
OR IN ANY OTHER LOAN DOCUMENT RESULTING FROM BORROWER’S FAILURE TO CAUSE ANY
FOREIGN SUBSIDIARY TO COMPLY WITH ANY SUCH TERM, SUCH 30 DAY CURE PERIOD SHALL
BE EXTENDED FOR UP TO AN ADDITIONAL 30 DAYS SO LONG AS SUCH DEFAULT IS CAPABLE
OF BEING CURED AND BORROWER HAS COMMENCED AND CONTINUES TO DILIGENTLY PURSUE A
CURE OF SUCH DEFAULT.

 

(D)          THERE SHALL OCCUR ANY DEFAULT, DEFAULT, EVENT OF DEFAULT, OR EVENT
OF DEFAULT AS DEFINED AND PROVIDED UNDER ANY OTHER LOAN DOCUMENT OR ANY
PRUDENTIAL LOAN DOCUMENT (AFTER THE EXPIRATION OF ANY APPLICABLE GRACE AND CURE
PERIOD).

 

(E)           THERE SHALL OCCUR ANY DEFAULT OR EVENT OF DEFAULT (AFTER THE
EXPIRATION OF ANY APPLICABLE GRACE AND CURE PERIOD) UNDER ANY AGREEMENT OF ANY
BORROWER PARTY WITH ANY PERSON AND RELATING TO THE BORROWING OF MONEY.

 

(F)           THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT SHALL BE CONTESTED BY ANY BORROWER PARTY, AND/OR ANY BORROWER PARTY
SHALL DENY THAT IT HAS ANY OR FURTHER LIABILITY OR OBLIGATION HEREUNDER OR
THEREUNDER.

 

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(G)           ASSIGNMENT OR ATTEMPTED ASSIGNMENT BY BORROWER OF THIS AGREEMENT,
ANY RIGHTS HEREUNDER, OR ANY ADVANCE TO BE MADE HEREUNDER, OR THE CONVEYANCE,
LEASE, MORTGAGE, OR ANY OTHER ALIENATION OR ENCUMBRANCE OF THE COLLATERAL OR ANY
INTEREST THEREIN WITHOUT THE PRIOR WRITTEN CONSENT OF AGENT AND COLLATERAL
AGENT, EXCEPT FOR TRANSFERS PERMITTED HEREUNDER OR UNDER ANY OTHER LOAN
DOCUMENT.

 

(H)          EXCEPT AS OTHERWISE PERMITTED HEREIN, THE TRANSFER OF BORROWER’S
INTEREST IN, OR RIGHTS UNDER, THIS AGREEMENT BY OPERATION OF LAW OR OTHERWISE,
INCLUDING, WITHOUT LIMITATION, SUCH TRANSFER BY BORROWER AS DEBTOR IN POSSESSION
UNDER THE BANKRUPTCY CODE, OR BY A TRUSTEE FOR BORROWER UNDER THE BANKRUPTCY
CODE, TO ANY THIRD PERSON, WHETHER OR NOT THE OBLIGATIONS OF BORROWER UNDER THIS
AGREEMENT ARE ASSUMED BY SUCH THIRD PERSON.

 

(I)            THE INSTITUTION OF A FORECLOSURE OR OTHER POSSESSORY ACTION
AGAINST (I) THE MORTGAGED PROPERTY, OR (II) ANY OF THE COLLATERAL OTHER THAN THE
MORTGAGED PROPERTY, EXCEPT WHERE SUCH ACTION WOULD NOT BE REASONABLY EXPECTED TO
HAVE A MATERIAL ADVERSE EFFECT.

 

(J)            THE DEATH OR DISSOLUTION OF ANY BORROWER PARTY, OR ANY CHANGE IN
CONTROL.

 

(K)          ANY FINANCIAL STATEMENT, REPRESENTATION, WARRANTY OR CERTIFICATE
MADE OR FURNISHED BY ANY BORROWER PARTY TO ANY LENDER PARTY IN CONNECTION WITH
THIS AGREEMENT, OR AS INDUCEMENT TO ANY LENDER PARTY TO ENTER INTO THIS
AGREEMENT, OR IN ANY SEPARATE STATEMENT OR DOCUMENT TO BE DELIVERED HEREUNDER TO
ANY LENDER PARTY, SHALL BE MATERIALLY FALSE, INCORRECT, OR INCOMPLETE WHEN MADE.

 

(L)           THE OCCURRENCE OF ANY EVENT, ACT, CONDITION OR OCCURRENCE OF
WHATEVER NATURE WHEREIN THE LEGALITY, VALIDITY, OR ENFORCEABILITY OF ANY
PROVISION OF ANY LOAN DOCUMENT IS QUESTIONED OR CHALLENGED.

 

(M)         ANY BORROWER PARTY SHALL ADMIT ITS INABILITY TO PAY ITS DEBTS AS
THEY MATURE, OR SHALL MAKE AN ASSIGNMENT FOR THE BENEFIT OF ITSELF OR ANY OF ITS
CREDITORS.

 

(N)          PROCEEDINGS IN BANKRUPTCY, OR FOR REORGANIZATION OF ANY BORROWER
PARTY, OR FOR THE READJUSTMENT OF ANY OF ITS DEBTS, UNDER THE BANKRUPTCY CODE,
AS AMENDED, OR ANY PART THEREOF, OR UNDER ANY OTHER LAWS, WHETHER STATE OR
FEDERAL, FOR THE RELIEF OF DEBTORS, NOW OR HEREAFTER EXISTING, SHALL BE
COMMENCED BY ANY BORROWER PARTY, OR SHALL BE COMMENCED AGAINST ANY BORROWER
PARTY AND SHALL NOT BE DISCHARGED WITHIN SIXTY (60) DAYS OF COMMENCEMENT.

 

(O)          A RECEIVER OR TRUSTEE SHALL BE APPOINTED FOR ANY BORROWER PARTY OR
FOR ANY SUBSTANTIAL PART OF ITS ASSETS, OR ANY PROCEEDINGS SHALL BE INSTITUTED
FOR THE DISSOLUTION OR THE FULL OR PARTIAL LIQUIDATION OF ANY BORROWER PARTY,
AND SUCH RECEIVER OR TRUSTEE SHALL NOT BE DISCHARGED WITHIN THIRTY (30) DAYS OF
HIS APPOINTMENT, OR SUCH PROCEEDINGS SHALL NOT BE DISCHARGED WITHIN SIXTY (60)
DAYS OF ITS COMMENCEMENT, OR ANY BORROWER PARTY SHALL DISCONTINUE BUSINESS OR
MATERIALLY CHANGE THE NATURE OF ITS BUSINESS.

 

(P)           ANY BORROWER PARTY SHALL SUFFER A FINAL JUDGMENT FOR PAYMENT OF
MONEY IN EXCESS OF $1,000,000.00 AND SHALL NOT DISCHARGE THE SAME WITHIN A
PERIOD OF THIRTY (30) DAYS UNLESS, PENDING FURTHER PROCEEDINGS, EXECUTION HAS
NOT BEEN COMMENCED OR IF COMMENCED HAS BEEN EFFECTIVELY STAYED.

 

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(Q)          A JUDGMENT CREDITOR OF ANY BORROWER PARTY SHALL OBTAIN POSSESSION
OF ANY OF THE COLLATERAL WITH AN AGGREGATE VALUE OF MORE THAN $1,000,000.00 BY
ANY MEANS, INCLUDING, WITHOUT LIMITATION, LEVY, DISTRAINT, REPLEVIN OR
SELF-HELP.

 

(R)           (I) ANY MEMBER OF THE BORROWER CONSOLIDATED GROUP SHALL BE IN
DEFAULT (AS PRINCIPAL OR AS GUARANTOR OR OTHER SURETY) IN THE PAYMENT OF ANY
PRINCIPAL OF OR PREMIUM OR MAKE-WHOLE AMOUNT OR INTEREST ON ANY INDEBTEDNESS
THAT IS OUTSTANDING IN AN AGGREGATE PRINCIPAL AMOUNT OF AT LEAST $3,000,000
BEYOND ANY PERIOD OF GRACE PROVIDED WITH RESPECT THERETO, OR (II) ANY MEMBER OF
THE BORROWER CONSOLIDATED GROUP SHALL BE IN DEFAULT IN THE PERFORMANCE OF OR
COMPLIANCE WITH ANY TERM OF ANY EVIDENCE OF ANY INDEBTEDNESS IN AN AGGREGATE
OUTSTANDING PRINCIPAL AMOUNT OF AT LEAST $3,000,000 OR OF ANY MORTGAGE,
INDENTURE OR OTHER AGREEMENT RELATING THERETO OR ANY OTHER CONDITION EXISTS, AND
AS A CONSEQUENCE OF SUCH DEFAULT OR CONDITION SUCH INDEBTEDNESS HAS BECOME, OR
HAS BEEN DECLARED  (OR ONE OR MORE PERSONS ARE ENTITLED TO DECLARE SUCH
INDEBTEDNESS TO BE), DUE AND PAYABLE BEFORE ITS STATED MATURITY OR BEFORE ITS
REGULARLY SCHEDULED DATES OF PAYMENT, OR (III) AS A CONSEQUENCE OF THE
OCCURRENCE OR CONTINUATION OF ANY EVENT OR CONDITION (OTHER THAN THE PASSAGE OF
TIME OR THE RIGHT OF THE HOLDER OF INDEBTEDNESS TO CONVERT SUCH INDEBTEDNESS
INTO EQUITY INTERESTS), (X) ANY MEMBER OF THE BORROWER CONSOLIDATED GROUP HAS
BECOME OBLIGATED TO PURCHASE OR REPAY INDEBTEDNESS BEFORE ITS REGULAR MATURITY
OR BEFORE ITS REGULARLY SCHEDULED DATES OF PAYMENT IN AN AGGREGATE OUTSTANDING
PRINCIPAL AMOUNT OF AT LEAST $3,000,000, OR (Y) ONE OR MORE PERSONS HAVE THE
RIGHT TO REQUIRE ANY MEMBER OF THE BORROWER CONSOLIDATED GROUP SO TO PURCHASE OR
REPAY SUCH INDEBTEDNESS.

 

(S)           THERE SHALL OCCUR ANY CASUALTY OR CONDEMNATION EVENT THAT RESULTS
IN THE LOSS OF VALUE IN THE ASSETS THE SUBJECT OF SUCH CASUALTY OR CONDEMNATION
EVENT(S) (I) IN AN AGGREGATE AMOUNT OF MORE THAN $5,000,000 IN ANY FISCAL YEAR
(AFTER TAKING INTO ACCOUNT ANY INSURANCE OR CONDEMNATION PROCEEDS PAID OR
PAYABLE ON ACCOUNT OF SUCH CASUALTY OR CONDEMNATION EVENT(S)); OR (II) IN AN
AGGREGATE AMOUNT OF MORE THAN $10,000,000.00 SUBSEQUENT TO THE DATE OF THIS
AGREEMENT (AFTER TAKING INTO ACCOUNT ANY INSURANCE OR CONDEMNATION PROCEEDS PAID
OR PAYABLE ON ACCOUNT OF SUCH CASUALTY OR CONDEMNATION EVENT(S)); UNLESS, IN
EACH CASE, WITHIN 30 DAYS AFTER THE OCCURRENCE THEREOF, REQUIRED LENDERS HAVE
AGREED IN WRITING THAT SUCH CASUALTY OR CONDEMNATION EVENT DOES NOT CONSTITUTE
AN EVENT OF DEFAULT.

 

(T)           THERE SHALL OCCUR ANY DEFAULT, EVENT OF DEFAULT OR TERMINATION
EVENT UNDER ANY LENDER PARTY SWAP DOCUMENT FOR WHICH BORROWER PARTY IS A
DEFAULTING PARTY OR AN AFFECTED PARTY.

 

Provided that with respect to each of the foregoing, an Event of Default will be
deemed to have occurred upon the occurrence of the applicable event without
notice being required if Agent or Collateral Agent is prevented from giving
notice by Bankruptcy or other applicable Law.

 

11.2         NO ADVANCES AFTER DEFAULT.  UPON THE OCCURRENCE AND DURING THE
CONTINUANCE OF ANY DEFAULT, AND NOTWITHSTANDING ANY PROVISION CONTAINED HEREIN
OR IN ANY OTHER LOAN DOCUMENT TO THE CONTRARY (I) THE SWING LINE LENDER AND THE
REVOLVING LOAN LENDERS SHALL HAVE THE ABSOLUTE RIGHT TO REFUSE TO MAKE, AND
SHALL BE UNDER NO OBLIGATION TO MAKE, ANY FURTHER SWING LINE LOAN ADVANCES OR
REVOLVING LOAN ADVANCES (OTHER THAN ADVANCES UNDER SECTION 3.2(C)); AND (II) THE
ISSUING LENDER SHALL HAVE THE RIGHT TO REFUSE TO ISSUE ANY LETTERS OF CREDIT.

 

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11.3         ACCELERATION.  ALL CREDIT AGREEMENT OBLIGATIONS SHALL, AT THE
OPTION OF AGENT (OR AT THE WRITTEN DIRECTION TO AGENT FROM THE REQUIRED
LENDERS), BECOME IMMEDIATELY DUE AND PAYABLE, WITHOUT NOTICE, UPON THE
OCCURRENCE OF AN EVENT OF DEFAULT WITHOUT FURTHER ACTION OF ANY KIND.

 

11.4         GENERAL REMEDIES.  UPON THE OCCURRENCE OF ANY EVENT OF DEFAULT,
LENDER PARTIES SHALL HAVE, IN ADDITION TO THE RIGHTS AND REMEDIES GIVEN THEM BY
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, ALL THOSE ALLOWED BY ALL APPLICABLE
LAWS, INCLUDING BUT WITHOUT LIMITATION, THE UNIFORM COMMERCIAL CODE.  WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, AGENT MAY (AND, AT THE WRITTEN
DIRECTION OF THE REQUIRED LENDERS, SHALL) IMMEDIATELY, WITHOUT NOTICE, CAUSE
COLLATERAL AGENT TO SELL AT PUBLIC OR PRIVATE SALE OR OTHERWISE REALIZE UPON,
THE WHOLE OR, FROM TIME TO TIME, ANY PART OF THE COLLATERAL, OR ANY INTEREST
WHICH BORROWER MAY HAVE THEREIN.

 

11.5         AGENT’S ADDITIONAL RIGHTS AND REMEDIES.  UPON THE OCCURRENCE OF ANY
EVENT OF DEFAULT AND EXCEPT AS MAY OTHERWISE BE PROHIBITED OR EXPRESSLY PROVIDED
FOR TO THE CONTRARY UNDER APPLICABLE LAW, IN ADDITION TO ANY RIGHTS OR REMEDIES
LENDER PARTIES MAY OTHERWISE HAVE UNDER THIS AGREEMENT, ANY OTHER LOAN
DOCUMENTS, OR UNDER APPLICABLE LAWS, WITHOUT NOTICE, AGENT SHALL HAVE THE RIGHT
TO (AND, AT THE WRITTEN DIRECTION OF THE REQUIRED LENDERS, SHALL) TAKE ANY OR
ALL OF THE FOLLOWING ACTIONS AT THE SAME OR DIFFERENT TIMES:

 

(A)          TO CANCEL LENDER PARTIES’ OBLIGATIONS ARISING UNDER THIS AGREEMENT;

 

(B)           TO INSTITUTE APPROPRIATE PROCEEDINGS TO SPECIFICALLY ENFORCE
PERFORMANCE OF THE TERMS AND CONDITIONS OF THIS AGREEMENT;

 

(C)           TO CAUSE COLLATERAL AGENT TO TAKE IMMEDIATE POSSESSION OF THE
COLLATERAL;

 

(D)          TO CAUSE COLLATERAL AGENT TO APPOINT OR SEEK APPOINTMENT OF A
RECEIVER, WITHOUT NOTICE AND WITHOUT REGARD TO THE SOLVENCY OF BORROWER OR THE
ADEQUACY OF THE SECURITY, FOR THE PURPOSE OF PRESERVING THE COLLATERAL,
PREVENTING WASTE, AND TO PROTECT ALL RIGHTS ACCRUING TO LENDER PARTIES BY VIRTUE
OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.  ALL EXPENSES INCURRED IN
CONNECTION WITH THE APPOINTMENT OF SUCH RECEIVER, OR IN PROTECTING, PRESERVING,
OR IMPROVING THE COLLATERAL, SHALL BE CHARGED AGAINST BORROWER AND SHALL BE
SECURED BY THE COLLATERAL AGENT’S LIEN;

 

(E)           TO CAUSE COLLATERAL AGENT TO PROCEED TO PERFORM ANY AND ALL OF THE
DUTIES AND OBLIGATIONS AND EXERCISE ALL THE RIGHTS AND REMEDIES OF BORROWER
CONTAINED IN THE ASSIGNED AGREEMENTS AS FULLY AS BORROWER COULD ITSELF;

 

(F)           TO CAUSE COLLATERAL AGENT TO TAKE POSSESSION OF THE MORTGAGED
PROPERTY AND/OR THE RENTS AND HAVE, HOLD, MANAGE, LEASE AND OPERATE THE
MORTGAGED PROPERTY ON SUCH TERMS AND FOR SUCH PERIOD OF TIME AS COLLATERAL AGENT
MAY IN ITS DISCRETION DEEM PROPER, AND, EITHER WITH OR WITHOUT TAKING POSSESSION
OF THE MORTGAGED PROPERTY IN COLLATERAL AGENT’S OWN NAME:

 

(1)           MAKE ANY PAYMENT OR PERFORM ANY ACT WHICH BORROWER HAS FAILED TO
MAKE OR PERFORM, IN SUCH MANNER AND TO SUCH EXTENT AS COLLATERAL AGENT MAY DEEM
NECESSARY TO PROTECT THE SECURITY PROVIDED FOR IN THIS AGREEMENT, OR OTHERWISE,
INCLUDING

 

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WITHOUT LIMITATION, THE RIGHT TO APPEAR IN AND DEFEND ANY ACTION OR PROCEEDING
PURPORTING TO AFFECT THE SECURITY PROVIDED FOR IN THIS AGREEMENT, OR THE RIGHTS
OR POWERS OF COLLATERAL AGENT;

 

(2)           LEASE THE MORTGAGED PROPERTY OR ANY PORTION THEREOF IN SUCH MANNER
AND FOR SUCH RENTS AS COLLATERAL AGENT SHALL DETERMINE IN ITS DISCRETION; OR

 

(3)           DEMAND, SUE FOR, OR OTHERWISE COLLECT AND RECEIVE FROM ALL PERSONS
ALL RENTS, INCLUDING THOSE PAST DUE AND UNPAID, WITH FULL POWER TO MAKE FROM
TIME TO TIME ALL ALTERATIONS, RENOVATIONS, REPAIRS OR REPLACEMENTS OF AND TO THE
MORTGAGED PROPERTY (OR ANY PART THEREOF) AS MAY SEEM PROPER TO COLLATERAL AGENT
AND TO APPLY THE RENTS TO THE PAYMENT OF (IN SUCH ORDER OF PRIORITY AS
COLLATERAL AGENT, IN ITS DISCRETION, MAY DETERMINE):

 

(a)           All expenses of managing the Mortgaged Property, including,
without limitation, the salaries, fees and wages of a managing agent and such
other employees as Collateral Agent may deem necessary or desirable;

 

(b)           All taxes, charges, claims, assessments, water rents, sewer rents,
and any other liens, and premiums for all insurance which Collateral Agent may
deem necessary or desirable, and the cost of all alterations, renovations,
repairs, or replacements, and all expenses incidental to taking and retaining
possession of the Mortgaged Property;

 

(c)           All or any portion of the Loans; and/or

 

(d)           All costs and Attorneys’ Fees incurred in connection therewith.

 

In connection with the foregoing, Borrower hereby authorizes and directs each
party to any Assigned Agreement (other than Borrower), upon receipt from Agent
or Collateral Agent of written notice to the effect that an Event of Default
exists, to perform all of its obligations under the Assigned Agreements as
directed by Collateral Agent, and to continue to do as so directed until
otherwise notified by Collateral Agent.

 

(G)           TO CAUSE COLLATERAL AGENT TO NOTIFY ACCOUNT DEBTORS THAT ACCOUNTS
HAVE BEEN ASSIGNED TO COLLATERAL AGENT, DEMAND AND RECEIVE INFORMATION FROM
ACCOUNT DEBTORS WITH RESPECT TO ACCOUNTS, FORWARD INVOICES TO ACCOUNT DEBTORS
DIRECTING THEM TO MAKE PAYMENTS TO COLLATERAL AGENT, COLLECT ALL ACCOUNTS IN
COLLATERAL AGENT’S OR BORROWER’S NAME AND TAKE CONTROL OF ANY CASH OR NON-CASH
PROCEEDS OF COLLATERAL;

 

(H)          TO CAUSE COLLATERAL AGENT TO ENFORCE PAYMENT OF ANY ACCOUNTS, TO
PROSECUTE ANY ACTION OR PROCEEDING WITH RESPECT TO ACCOUNTS, TO EXTEND THE TIME
OF PAYMENT OF ANY AND ALL ACCOUNTS, TO MAKE ALLOWANCES AND ADJUSTMENTS WITH
RESPECT THERETO AND TO ISSUE CREDITS IN THE NAME OF COLLATERAL AGENT OR
BORROWER;

 

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(I)            TO CAUSE COLLATERAL AGENT TO SETTLE, COMPROMISE, EXTEND, RENEW,
RELEASE, TERMINATE OR DISCHARGE, IN WHOLE OR IN PART, ANY ACCOUNT OR DEAL WITH
THE SAME AS COLLATERAL AGENT MAY DEEM ADVISABLE;

 

(J)            TO CAUSE COLLATERAL AGENT TO REQUIRE BORROWER TO OPEN ALL MAIL
ONLY IN THE PRESENCE OF A REPRESENTATIVE OF COLLATERAL AGENT, WHO MAY TAKE
THEREFROM ANY REMITTANCE ON COLLATERAL;

 

(K)          TO CAUSE COLLATERAL AGENT TO CHARGE, SET-OFF AND OTHERWISE APPLY
ALL OR ANY PART OF THE SECURED OBLIGATIONS AGAINST THE DEPOSIT ACCOUNTS, OR ANY
PART THEREOF;

 

(L)           TO CAUSE COLLATERAL AGENT TO EXERCISE ANY AND ALL RIGHTS AND
REMEDIES OF BORROWER UNDER OR IN CONNECTION WITH ANY ASSIGNED AGREEMENT OR
OTHERWISE IN RESPECT OF THE COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND
ALL RIGHTS OF BORROWER TO DEMAND OR OTHERWISE REQUIRE PAYMENT OF ANY AMOUNT
UNDER, OR PERFORMANCE OF ANY PROVISION OF, ANY ASSIGNED AGREEMENT;

 

(M)         TO CAUSE COLLATERAL AGENT TO ENTER UPON THE PREMISES OF BORROWER OR
ANY OTHER PLACE OR PLACES WHERE THE COLLATERAL IS LOCATED AND KEPT, AND THROUGH
SELF-HELP AND WITHOUT JUDICIAL PROCESS, WITHOUT FIRST OBTAINING A FINAL JUDGMENT
OR GIVING BORROWER NOTICE AND OPPORTUNITY FOR A HEARING ON THE VALIDITY OF
COLLATERAL AGENT’S CLAIM, WITHOUT ANY PRE-SEIZURE HEARING AS A CONDITION TO
REPOSSESSION THROUGH COURT ACTION AND WITHOUT ANY OBLIGATION TO PAY RENT TO
BORROWER, TO REMOVE THE COLLATERAL THEREFROM TO THE PREMISES OF COLLATERAL AGENT
OR OF ANY AGENT OF COLLATERAL AGENT, FOR SUCH TIME AS COLLATERAL AGENT MAY
DESIRE, IN ORDER EFFECTIVELY TO COLLECT OR LIQUIDATE THE COLLATERAL;

 

(N)          TO CAUSE COLLATERAL AGENT TO REQUIRE BORROWER, UPON THE REQUEST OF
COLLATERAL AGENT, TO ASSEMBLE THE INVENTORY, EQUIPMENT AND ANY OTHER PROPERTY
INCLUDED IN THE COLLATERAL AND MAKE IT AVAILABLE TO COLLATERAL AGENT AT PLACES
WHICH COLLATERAL AGENT SHALL SELECT, WHETHER AT BORROWER’S PREMISES OR
ELSEWHERE, AND TO MAKE AVAILABLE TO COLLATERAL AGENT ALL OF BORROWER’S PREMISES
AND FACILITIES FOR THE PURPOSE OF COLLATERAL AGENT’S TAKING POSSESSION OF,
REMOVING OR PUTTING THE INVENTORY AND SUCH OTHER GOODS IN SALABLE FORM;

 

(O)          TO CAUSE COLLATERAL AGENT TO COLLECT, RECEIVE, APPROPRIATE,
REPOSSESS AND REALIZE UPON THE COLLATERAL, OR ANY PART THEREOF, AND TO SELL,
LEASE, ASSIGN, GIVE OPTION OR OPTIONS TO PURCHASE, OR SELL OR OTHERWISE DISPOSE
OF AND DELIVER THE COLLATERAL (OR CONTRACT TO DO SO), OR ANY PART THEREOF, IN
ONE OR MORE PARCELS, AT PUBLIC OR PRIVATE SALE OR SALES, AT ANY EXCHANGE
BROKER’S BOARD OR AT ANY OF COLLATERAL AGENT’S OFFICES OR ELSEWHERE, AT SUCH
PRICES AS COLLATERAL AGENT MAY DEEM BEST, FOR CASH OR ON CREDIT OR FOR FUTURE
DELIVERY WITHOUT ASSUMPTION OF ANY CREDIT RISK.  COLLATERAL AGENT SHALL HAVE THE
RIGHT UPON ANY SUCH PUBLIC SALE OR SALES, AND TO THE EXTENT PERMITTED BY LAW, TO
PURCHASE THE WHOLE OR ANY PART OF THE COLLATERAL SO SOLD, FREE OF ANY RIGHT OR
EQUITY OF REDEMPTION, WHICH EQUITY OF REDEMPTION BORROWER HEREBY RELEASES, AND
BORROWER WAIVES ALL CLAIMS, DAMAGES AND DEMANDS AGAINST COLLATERAL AGENT ARISING
OUT OF THE REPOSSESSION, RETENTION OR SALE OF THE COLLATERAL;

 

(P)           TO CAUSE COLLATERAL AGENT TO USE, AND TO PERMIT ANY PURCHASER OF
ANY OF THE COLLATERAL FROM COLLATERAL AGENT TO USE WITHOUT CHARGE, BORROWER’S
LABELS, GENERAL INTANGIBLES, AND ADVERTISING MATTER OR ANY PROPERTY OF A SIMILAR
NATURE, AS IT PERTAINS TO, OR IS

 

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INCLUDED IN, ANY OF THE COLLATERAL, IN ADVERTISING FOR SALE, PREPARING FOR SALE
AND SELLING ANY COLLATERAL, AND FINISHING THE MANUFACTURE, PROCESSING,
FABRICATION, PACKAGING AND DELIVERY OF THE INVENTORY, AND BORROWER’S RIGHTS
UNDER ALL LICENSES AND ALL FRANCHISE AGREEMENTS SHALL INURE TO COLLATERAL
AGENT’S BENEFIT;

 

(Q)          TO CAUSE COLLATERAL AGENT TO SEND ANY WRITTEN NOTICE TO BORROWER
REQUIRED BY LAW OR THIS AGREEMENT IN THE MANNER SET FORTH IN THIS AGREEMENT; AND
ANY NOTICE SENT BY COLLATERAL AGENT IN SUCH MANNER AT LEAST TEN (10) BUSINESS
DAYS (COUNTING THE DATE OF SENDING) PRIOR TO THE DATE OF A PROPOSED DISPOSITION
OF THE COLLATERAL SHALL BE DEEMED TO BE REASONABLE NOTICE (PROVIDED, HOWEVER,
THAT NOTHING CONTAINED HEREIN SHALL BE DEEMED TO REQUIRE TEN (10) BUSINESS DAYS’
NOTICE IF, UNDER THE APPLICABLE CIRCUMSTANCES, A SHORTER PERIOD OF TIME WOULD BE
ALLOWED UNDER APPLICABLE LAW); AND

 

(R)           TO EXERCISE, AND TO CAUSE COLLATERAL AGENT TO EXERCISE, IN
ADDITION TO ALL OTHER RIGHTS WHICH IT HAS UNDER THIS AGREEMENT OR OTHER
APPLICABLE LAW, ALL OF THE RIGHTS AND REMEDIES OF A SECURED PARTY UPON DEFAULT
UNDER THE UNIFORM COMMERCIAL CODE OR OTHER APPLICABLE LAW.

 

11.6         RIGHT OF SET-OFF.  UPON THE OCCURRENCE OF AND DURING THE
CONTINUANCE OF ANY DEFAULT, LENDER PARTY MAY, AND IS HEREBY AUTHORIZED BY
BORROWER, AT ANY TIME AND FROM TIME TO TIME, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAWS, AND WITHOUT NOTICE TO BORROWER, SET-OFF AND APPLY ANY AND ALL
DEPOSITS (GENERAL OR SPECIAL, TIME OR DEMAND, PROVISIONAL OR FINAL) AT ANY TIME
HELD AND ANY OTHER INDEBTEDNESS AT ANY TIME OWING BY LENDER PARTY TO, OR FOR THE
CREDIT OR THE ACCOUNT OF, BORROWER AGAINST ANY OR ALL OF THE CREDIT AGREEMENT
OBLIGATIONS NOW OR HEREAFTER EXISTING WHETHER OR NOT SUCH CREDIT AGREEMENT
OBLIGATIONS HAVE MATURED AND IRRESPECTIVE OF WHETHER LENDER PARTY HAS EXERCISED
ANY OTHER RIGHTS THAT IT HAS OR MAY HAVE WITH RESPECT TO SUCH CREDIT AGREEMENT
OBLIGATIONS, INCLUDING WITHOUT LIMITATION ANY ACCELERATION RIGHTS.  THE
AFORESAID RIGHT OF SET-OFF MAY BE EXERCISED BY LENDER PARTY AGAINST BORROWER OR
AGAINST ANY TRUSTEE IN BANKRUPTCY, DEBTOR IN POSSESSION, ASSIGNEE FOR THE
BENEFIT OF THE CREDITORS, RECEIVER, OR EXECUTION, JUDGMENT OR ATTACHMENT
CREDITOR OF BORROWER, OR SUCH TRUSTEE IN BANKRUPTCY, DEBTOR IN POSSESSION,
ASSIGNEE FOR THE BENEFIT OF CREDITORS, RECEIVER, OR EXECUTION, JUDGMENT OR
ATTACHMENT CREDITOR, NOTWITHSTANDING THE FACT THAT SUCH RIGHT OF SET-OFF SHALL
NOT HAVE BEEN EXERCISED BY LENDER PARTY PRIOR TO THE MAKING, FILING OR ISSUANCE,
OR SERVICE UPON LENDER PARTY OF, OR OF NOTICE OF, ANY SUCH PETITION; ASSIGNMENT
FOR THE BENEFIT OF CREDITORS; APPOINTMENT OR APPLICATION FOR THE APPOINTMENT OF
A RECEIVER; OR ISSUANCE OF EXECUTION, SUBPOENA, ORDER OR WARRANT.  LENDER PARTY
AGREES TO PROMPTLY NOTIFY BORROWER AFTER ANY SUCH SET-OFF AND APPLICATION,
PROVIDED THAT THE FAILURE TO GIVE SUCH NOTICE SHALL NOT AFFECT THE VALIDITY OF
SUCH SET-OFF AND APPLICATION.  THE RIGHTS OF LENDER PARTY UNDER THIS SECTION ARE
IN ADDITION TO THE OTHER RIGHTS AND REMEDIES (INCLUDING, WITHOUT LIMITATION,
OTHER RIGHTS OF SET-OFF) WHICH LENDER PARTY MAY HAVE.

 

11.7         NO LIMITATION ON RIGHTS AND REMEDIES.  THE ENUMERATION OF THE
POWERS, RIGHTS AND REMEDIES IN THIS ARTICLE SHALL NOT BE CONSTRUED TO LIMIT THE
EXERCISE THEREOF TO SUCH TIME AS AN EVENT OF DEFAULT OCCURS IF, UNDER APPLICABLE
LAW OR ANY OTHER PROVISION OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, LENDER
PARTY HAS ANY OF SUCH POWERS, RIGHTS AND REMEDIES REGARDLESS OF WHETHER AN EVENT
OF DEFAULT HAS OCCURRED, AND ANY LIMITATION CONTAINED HEREIN OR IN ANY OF THE
OTHER LOAN DOCUMENTS AS TO LENDER PARTY’S EXERCISE OF ANY POWER, RIGHT OR REMEDY
FOR A PERIOD OF TIME ONLY DURING THE CONTINUANCE OF AN EVENT OF DEFAULT SHALL
ONLY BE APPLICABLE AT SUCH TIME

 

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AS LENDER PARTY SHALL HAVE ACTUAL KNOWLEDGE THAT SUCH EVENT OF DEFAULT IS NO
LONGER CONTINUING AND FOR A REASONABLE TIME THEREAFTER AS MAY BE NECESSARY FOR
LENDER PARTY TO CEASE THE EXERCISE OF SUCH POWERS, RIGHTS AND REMEDIES (IT BEING
EXPRESSLY UNDERSTOOD AND AGREED THAT UNTIL SUCH TIME AS LENDER PARTY SHALL
OBTAIN SUCH KNOWLEDGE AND AFTER THE EXPIRATION OF SUCH REASONABLE TIME, LENDER
PARTY SHALL HAVE NO LIABILITY WHATSOEVER FOR THE COMMENCEMENT OF OR CONTINUING
EXERCISE OF ANY SUCH POWER, RIGHT OR REMEDY).

 

11.8         REPOSSESSION OF THE COLLATERAL; CARE AND CUSTODY OF THE COLLATERAL,
ETC.  BORROWER AGREES TO GIVE COLLATERAL AGENT NOTICE IN THE MANNER SET FORTH IN
THIS AGREEMENT WITHIN 24 HOURS OF THE TIME OF REPOSSESSION OF THE COLLATERAL, OR
ANY PART THEREOF, BY COLLATERAL AGENT AS TO ANY OTHER PROPERTY OF BORROWER
ALLEGED TO HAVE BEEN LEFT ON, UPON OR IN THE REPOSSESSED COLLATERAL AT THE TIME
OF REPOSSESSION; AND SUCH NOTICE SHALL BE AN EXPRESS CONDITION PRECEDENT TO ANY
ACTION OR SUIT FOR LOSS OR DAMAGES IN CONNECTION THEREWITH.  BORROWER FURTHER
AGREES THAT COLLATERAL AGENT MAY HOLD ANY SUCH PROPERTY OF BORROWER WITHOUT
LIABILITY FOR A REASONABLE TIME AFTER ANY SUCH NOTICE IS RECEIVED, AND THAT
COLLATERAL AGENT WILL HAVE A REASONABLE TIME TO NOTIFY BORROWER AS TO WHERE
BORROWER CAN COLLECT SUCH PROPERTY.  BORROWER AGREES THAT IF COLLATERAL AGENT
SHALL REPOSSESS THE COLLATERAL, OR ANY PART THEREOF, AT A TIME WHEN NO EVENT OF
DEFAULT SHALL HAVE OCCURRED HEREUNDER, AND THE REPOSSESSED COLLATERAL IS
THEREAFTER RETURNED TO BORROWER, THE DAMAGES THEREFOR, IF ANY, SHALL NOT EXCEED
THE FAIR RENTAL VALUE OF THE REPOSSESSED COLLATERAL FOR THE TIME IT WAS IN
COLLATERAL AGENT’S POSSESSION.  BORROWER HEREBY EXPRESSLY AND IRREVOCABLY
CONSENTS TO, AND TO THE EXTENT THAT BORROWER MAY LAWFULLY DO SO, INVITES
COLLATERAL AGENT AND ITS AGENTS TO COME UPON ANY PREMISES ON WHICH THE
COLLATERAL, OR ANY PART THEREOF, IS NOW OR HEREAFTER LOCATED FOR ANY AND ALL
PURPOSES RELATED TO THE COLLATERAL INCLUDING WITHOUT LIMITATION REPOSSESSION OF
THE COLLATERAL, OR ANY PART THEREOF.  TO THE EXTENT THAT BORROWER MAY LAWFULLY
DO SO, BORROWER FURTHER COVENANTS AND WARRANTS THAT (A) ANY ENTRY BY COLLATERAL
AGENT AND ITS AGENTS UPON SUCH PREMISES FOR THE PURPOSE OF REPOSSESSING THE
COLLATERAL, OR ANY PART THEREOF, SHALL NOT BE TRESPASS UPON SUCH PREMISES, AND
(B) ANY SUCH REPOSSESSION SHALL NOT CONSTITUTE CONVERSION OF THE COLLATERAL, OR
ANY PART THEREOF, AND BORROWER FURTHER AGREES TO INDEMNIFY AND HOLD COLLATERAL
AGENT HARMLESS AGAINST, AND HEREBY RELEASES COLLATERAL AGENT FROM ANY ACTIONS,
COSTS, OBLIGATIONS OR EXPENSES ARISING DIRECTLY, INDIRECTLY OR REMOTELY FROM ANY
ATTEMPT TO ENTER SUCH PREMISES AND REPOSSESS THE COLLATERAL, OR ANY PART
THEREOF.  COLLATERAL AGENT SHALL BE DEEMED TO HAVE EXERCISED REASONABLE CARE IN
THE CUSTODY AND PRESERVATION OF THE COLLATERAL IN ITS POSSESSION IF IT TAKES
SUCH REASONABLE ACTIONS FOR THAT PURPOSE AS BORROWER SHALL REQUEST IN WRITING,
BUT COLLATERAL AGENT SHALL HAVE SOLE POWER TO DETERMINE WHETHER SUCH ACTIONS ARE
REASONABLE.  ANY OMISSION TO DO ANY ACT NOT REQUESTED BY BORROWER SHALL NOT BE
DEEMED A FAILURE TO EXERCISE REASONABLE CARE.  BORROWER SHALL AT ALL TIMES BE
RESPONSIBLE FOR THE PRESERVATION OF THE COLLATERAL AND SHALL BE LIABLE FOR ANY
FAILURE TO REALIZE UPON, OR TO EXERCISE ANY RIGHT OR POWER WITH RESPECT TO, THE
COLLATERAL, OR FOR ANY DELAY IN SO DOING, WHETHER OR NOT THE COLLATERAL IS IN
BORROWER’S POSSESSION.

 

11.9         APPLICATION OF PROCEEDS.  EXCEPT AS OTHERWISE EXPRESSLY REQUIRED TO
THE CONTRARY BY APPLICABLE LAW, ANY LOAN DOCUMENT OR THE INTERCREDITOR
AGREEMENT, THE PROCEEDS AND AVAILS OF ANY SALE OF THE COLLATERAL OR THE EXERCISE
OF ANY OF THE RIGHTS AND REMEDIES OF LENDER PARTIES UNDER THIS AGREEMENT SHALL
BE APPLIED BY AGENT (I) FIRST, TO THE PAYMENT OF ALL CHARGES, EXPENSES, COSTS
AND ATTORNEYS’ FEES OWING TO AGENT OR COLLATERAL AGENT HEREUNDER OR UNDER ANY
OTHER LOAN DOCUMENT; (II) SECOND, TO THE PAYMENT OF ALL CHARGES, EXPENSES, COSTS
AND ATTORNEYS’ FEES OWING TO LENDER PARTIES (OTHER THAN AGENT OR COLLATERAL
AGENT) HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT; AND (III) THIRD, TO THE PRO
RATA PAYMENT OF THE OTHER CREDIT AGREEMENT OBLIGATIONS

 

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(BASED ON THE TOTAL AMOUNT OF THE CREDIT AGREEMENT OBLIGATIONS OWING TO LENDER
PARTIES), AND BORROWER SHALL REMAIN LIABLE TO LENDER PARTIES FOR ANY DEFICIENCY.

 

11.10       ATTORNEY-IN-FACT.  BORROWER HEREBY CONSTITUTES AND APPOINTS EACH OF
AGENT AND COLLATERAL AGENT, OR ANY OTHER PERSON WHOM AGENT OR COLLATERAL AGENT
MAY DESIGNATE UPON NOTICE TO BORROWER, AS BORROWER’S ATTORNEY-IN-FACT (SUCH
APPOINTMENT BEING COUPLED WITH AN INTEREST AND BEING IRREVOCABLE UNTIL
COLLATERAL AGENT’S LIEN SHALL HAVE BEEN TERMINATED IN WRITING AS SET FORTH IN
THIS AGREEMENT), AT BORROWER’S SOLE COST AND EXPENSE, TO EXERCISE ANY ONE OR
MORE OF THE FOLLOWING RIGHTS AND POWERS AT ANY TIME AFTER THE OCCURRENCE AND
DURING THE CONTINUANCE OF AN EVENT OF DEFAULT (AND ALL ACTS OF SUCH
ATTORNEY-IN-FACT TAKEN PURSUANT TO THIS SECTION ARE HEREBY RATIFIED AND APPROVED
BY BORROWER, AND SAID ATTORNEY SHALL NOT BE LIABLE FOR ANY ACTS OR OMISSIONS NOR
FOR ANY ERROR OF JUDGMENT OR MISTAKE OF FACT OR LAW):

 

(A)          TO TAKE OR TO BRING, IN THE NAME OF AGENT OR COLLATERAL AGENT OR IN
THE NAME OF BORROWER, ALL STEPS, ACTION, SUITS OR PROCEEDING DEEMED BY AGENT OR
COLLATERAL AGENT NECESSARY OR DESIRABLE TO EFFECT COLLECTION OF THE ACCOUNTS;

 

(B)           TO SETTLE, ADJUST, COMPROMISE, EXTEND, RENEW, DISCHARGE, TERMINATE
OR RELEASE THE ACCOUNTS IN WHOLE OR IN PART;

 

(C)           TO SETTLE, ADJUST OR COMPROMISE ANY LEGAL PROCEEDINGS BROUGHT TO
COLLECT THE ACCOUNTS;

 

(D)          TO NOTIFY ACCOUNT DEBTORS TO MAKE PAYMENTS ON THE ACCOUNTS DIRECTLY
TO COLLATERAL AGENT OR TO A LOCKBOX DESIGNATED BY AGENT OR COLLATERAL AGENT;

 

(E)           TO TRANSMIT TO ACCOUNT DEBTORS NOTICE OF COLLATERAL AGENT’S
INTEREST IN THE ACCOUNTS AND TO DEMAND AND RECEIVE FROM SUCH ACCOUNT DEBTORS AT
ANY TIME, IN THE NAME OF AGENT, COLLATERAL AGENT OR BORROWER, INFORMATION
CONCERNING THE ACCOUNTS AND THE AMOUNTS OWING THEREON;

 

(F)           TO USE BORROWER’S STATIONERY AND SIGN THE NAME OF BORROWER TO
VERIFICATIONS OF THE ACCOUNTS AND NOTICES THEREOF TO ACCOUNT DEBTORS;

 

(G)           TO SELL OR ASSIGN ANY OF THE COLLATERAL UPON SUCH TERMS, FOR SUCH
AMOUNTS AND AT SUCH TIME OR TIMES AS COLLATERAL AGENT DEEMS ADVISABLE, AND TO
EXECUTE ANY BILLS OF SALE OR ASSIGNMENTS IN THE NAME OF BORROWER IN RELATION
THERETO;

 

(H)          TO TAKE CONTROL, IN ANY MANNER, OF ANY ITEM OF PAYMENT ON, OR
PROCEEDS OF, COLLATERAL;

 

(I)            TO PREPARE, FILE AND SIGN BORROWER’S NAME ON ANY PROOF OF CLAIM
IN BANKRUPTCY OR SIMILAR DOCUMENT AGAINST ANY ACCOUNT DEBTOR;

 

(J)            TO PREPARE, FILE AND SIGN BORROWER’S NAME ON ANY NOTICE OF LIEN,
ASSIGNMENT OR SATISFACTION OF LIEN OR SIMILAR DOCUMENT IN CONNECTION WITH THE
COLLATERAL;

 

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(K)          TO SIGN OR ENDORSE THE NAME OF BORROWER UPON ANY CHATTEL PAPER,
DOCUMENT, INSTRUMENT, INVOICE, FREIGHT BILL, BILL OF LADING, WAREHOUSE RECEIPT
OR SIMILAR DOCUMENT OR AGREEMENT RELATING TO THE COLLATERAL;

 

(L)           TO USE THE INFORMATION RECORDED ON OR CONTAINED IN ANY DATA
PROCESSING EQUIPMENT AND COMPUTER HARDWARE AND SOFTWARE RELATING TO THE
COLLATERAL TO WHICH BORROWER HAS ACCESS;

 

(M)         TO ENTER INTO CONTRACTS OR AGREEMENTS FOR THE PROCESSING,
FABRICATION, PACKAGING AND DELIVERY OF THE COLLATERAL AS SAID ATTORNEY-IN-FACT,
AGENT OR COLLATERAL AGENT MAY FROM TIME TO TIME DEEM APPROPRIATE AND CHARGE
BORROWER’S ACCOUNT FOR ANY COSTS THEREBY INCURRED;

 

(N)          TO RECEIVE, TAKE, ENDORSE, ASSIGN AND DELIVER IN AGENT, COLLATERAL
AGENT’S OR BORROWER’S NAME ANY AND ALL CHECKS, NOTES, DRAFTS AND OTHER
INSTRUMENTS;

 

(O)          TO RECEIVE, OPEN AND DISPOSE OF ALL MAIL ADDRESSED TO BORROWER AND
TO NOTIFY POSTAL AUTHORITIES TO CHANGE THE ADDRESS FOR THE DELIVERY THEREOF TO
SUCH ADDRESS AS AGENT OR COLLATERAL AGENT MAY DESIGNATE; AND

 

(P)           TO DO ALL ACTS AND THINGS NECESSARY, IN AGENT’S AND COLLATERAL
AGENT’S DISCRETION, TO FULFILL BORROWER’S OBLIGATIONS UNDER THIS AGREEMENT AND
TO OTHERWISE CARRY OUT THE PURPOSES OF THIS AGREEMENT.

 

11.11       DEFAULT COSTS.  BORROWER HEREBY AGREES TO PAY TO EACH LENDER PARTY
UPON DEMAND ALL DEFAULT COSTS INCURRED BY SUCH LENDER PARTY, WHICH AGREEMENT
SHALL BE A CONTINUING AGREEMENT AND SHALL SURVIVE PAYMENT OF THE LOANS AND
TERMINATION OF THIS AGREEMENT.

 

ARTICLE XII

 

12.           THE AGENT.

 

12.1         AUTHORIZATION AND ACTION.

 

(A)          EACH LENDER HEREBY APPOINTS AND AUTHORIZES AGENT TO TAKE SUCH
ACTION AS AGENT ON ITS BEHALF AND TO EXERCISE SUCH POWERS AND DISCRETION UNDER
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AS ARE DELEGATED TO AGENT BY THE
TERMS HEREOF AND THEREOF, TOGETHER WITH SUCH POWERS AND DISCRETION AS ARE
REASONABLY INCIDENTAL THERETO.  AS TO ANY MATTERS PROVIDED FOR IN THE LOAN
DOCUMENTS AS BEING SUBJECT TO THE CONSENT, DIRECTION OR APPROVAL OF AGENT, SUCH
MATTERS SHALL BE SUBJECT TO THE SOLE DISCRETION OF AGENT, ITS DIRECTORS,
OFFICERS, AGENTS AND EMPLOYEES, WITHOUT THE APPROVAL OF ANY LENDER.  AGENT SHALL
NOT BE REQUIRED TO EXERCISE ANY DISCRETION OR TAKE ANY ACTION, BUT SHALL BE
REQUIRED TO ACT OR TO REFRAIN FROM ACTING (AND SHALL BE FULLY PROTECTED IN SO
ACTING OR REFRAINING FROM ACTING) UPON THE INSTRUCTIONS OF THE REQUIRED LENDERS,
AND SUCH INSTRUCTIONS SHALL BE BINDING UPON ALL LENDER PARTIES AND ALL HOLDERS
OF NOTES.  AGENT SHALL BE ENTITLED TO REQUEST INSTRUCTIONS FROM THE REQUIRED
LENDERS IN EXERCISING ANY DISCRETION OR TAKING ANY ACTION AND SHALL BE FULLY
PROTECTED IN SO ACTING OR REFRAINING FROM ACTING UPON THE INSTRUCTIONS OF THE
REQUIRED LENDERS, AND SUCH INSTRUCTIONS SHALL BE BINDING UPON ALL

 

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LENDER PARTIES AND ALL HOLDERS OF NOTES.  IN NO EVENT SHALL AGENT BE REQUIRED TO
TAKE ANY ACTION THAT AGENT BELIEVES TO BE CONTRARY TO THIS AGREEMENT OR
APPLICABLE LAW.

 

(B)           NOTWITHSTANDING THE PRECEDING, EACH OF THE FOLLOWING SHALL REQUIRE
THE APPROVAL OR CONSENT OF THE REQUIRED LENDERS:

 

(1)           THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE LOAN DOCUMENTS
FOLLOWING AN EVENT OF DEFAULT, PROVIDED THAT ABSENT ANY DIRECTION FROM THE
REQUIRED LENDERS, AGENT MAY EXERCISE ANY RIGHT OR REMEDY UNDER THE LOAN
DOCUMENTS AS AGENT MAY DETERMINE IN GOOD FAITH TO BE NECESSARY OR APPROPRIATE TO
PROTECT THE LENDERS OR THE COLLATERAL;

 

(2)           APPOINTMENT OF A SUCCESSOR AGENT;

 

(3)           APPROVAL OF ANY AMENDMENT OR MODIFICATION OF THIS AGREEMENT OR ANY
OF THE OTHER LOAN DOCUMENTS, OR ISSUANCE OF ANY WAIVER OF ANY PROVISION OF THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS; AND

 

(4)           ANY WAIVER OF ANY DEFAULT OR EVENT OF DEFAULT.

 

(C)           NOTWITHSTANDING THE PRECEDING, EACH OF THE FOLLOWING SHALL REQUIRE
THE APPROVAL OR CONSENT OF ALL THE LENDERS:

 

(1)           ANY EXTENSION OF THE REVOLVING LOAN MATURITY DATE, THE SWING LINE
LOAN MATURITY DATE, OR THE TERM LOAN MATURITY DATE, ANY FORGIVENESS OF ALL OR
ANY PORTION OF THE PRINCIPAL AMOUNT OF ANY LOAN OR ANY ACCRUED INTEREST THEREON,
OR ANY OTHER AMENDMENT OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS WHICH WOULD
REDUCE THE ABR MARGIN, THE LIBOR MARGIN, THE AMOUNT OF THE UNUSED FEE, OR THE
RATE AT WHICH INTEREST, THE LETTER OF CREDIT FACILITY FEE OR THE UNUSED FEE ARE
CALCULATED, OR FORGIVE ANY LETTER OF CREDIT FACILITY FEE OR UNUSED FEE, OR
EXTEND THE TIME OF PAYMENT OF OR OF ANY GRACE OR CURE PERIOD WITH RESPECT TO THE
PAYMENT OF ANY PRINCIPAL, INTEREST, LETTER OF CREDIT FACILITY FEE OR UNUSED FEE;

 

(2)           ANY MODIFICATION OF THE DEFINITION OF “REQUIRED LENDERS” OR ANY
OTHER PROVISION HEREOF SPECIFYING THE NUMBER OR PERCENTAGE OF LENDERS REQUIRED
TO AMEND, WAIVER OR OTHERWISE MODIFY ANY RIGHTS HEREUNDER OR MAKE ANY
DETERMINATION OR GRANT ANY CONSENT HEREUNDER;

 

(3)           ANY INCREASE OF THE AMOUNT OF ANY LOAN OR ANY COMMITMENT;

 

(4)           ANY RELEASE OF COLLATERAL AGENT’S LIEN ON ALL OR ANY MATERIAL
PORTION OF THE COLLATERAL, EXCEPT AS OTHERWISE EXPRESSLY PERMITTED UNDER THE
TERMS OF THE LOAN DOCUMENTS;

 

(5)           ANY RELEASE OF ANY BORROWER PARTY;

 

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(6)           ANY MODIFICATION OF THE INTERCREDITOR AGREEMENT WHICH WOULD HAVE
THE EFFECT OF MATERIALLY REDUCING PAYMENTS PAID OR PAYABLE TO THE LENDER PARTIES
AS SET FORTH IN SECTION 4.3 OF THE INTERCREDITOR AGREEMENT; AND

 

(7)           ANY AMENDMENT OF THE PROVISIONS OF THIS ARTICLE 12.

 

(D)          NOTWITHSTANDING THE PRECEDING, NO AMENDMENT, WAIVER OR CONSENT
SHALL, UNLESS IN WRITING AND SIGNED BY THE SWING LINE LENDER IN ADDITION TO THE
LENDERS REQUIRED ABOVE, AFFECT THE RIGHTS OR DUTIES OF SWING LING LENDER UNDER
THIS AGREEMENT.

 

12.2         AGENT’S NOTICES, ETC.  IN THE EVENT THAT AGENT HAS KNOWLEDGE OF A
DEFAULT OR EVENT OF DEFAULT OR RECEIVES A NOTICE THEREOF FROM A LENDER OR
BORROWER PARTY, AGENT SHALL GIVE PROMPT NOTICE THEREOF TO LENDERS (PROVIDED THAT
AGENT SHALL BE DEEMED TO HAVE KNOWLEDGE ONLY IF THE OFFICERS OF AGENT PRIMARILY
RESPONSIBLE FOR ADMINISTRATION OF THE LOANS HAVE ACTUAL KNOWLEDGE OF SUCH
DEFAULT OR EVENT OF DEFAULT, AND IN NO EVENT SHALL ANY KNOWLEDGE OF A DEFAULT OR
EVENT OF DEFAULT BE IMPUTED TO AGENT).  AGENT MAY, IN ITS DISCRETION, OR SHALL
UPON DIRECTION OF THE REQUIRED LENDERS, GIVE ANY NOTICE PURSUANT TO THIS
AGREEMENT THAT IS NECESSARY FOR COMMENCEMENT OF ANY CURE PERIOD.  AGENT SHALL
TAKE SUCH ACTION WITH RESPECT TO SUCH DEFAULT OR EVENT OF DEFAULT AS SHALL
REASONABLY BE DIRECTED BY THE REQUIRED LENDERS; PROVIDED THAT, UNLESS AND UNTIL
AGENT SHALL HAVE RECEIVED SUCH DIRECTIONS, AGENT MAY (BUT SHALL NOT BE OBLIGATED
TO) TAKE SUCH ACTION, OR REFRAIN FROM TAKING SUCH ACTION, WITH RESPECT TO SUCH
DEFAULT OR EVENT OF DEFAULT AS IT SHALL DEEM ADVISABLE IN THE BEST INTERESTS OF
LENDERS.  LENDERS AGREE THAT ANY ACTIONS TAKEN BY AGENT PURSUANT TO THIS
PARAGRAPH SHALL BE DEEMED A REASONABLE COURSE OF CONDUCT, AND LENDERS HEREBY,
APPROVE, RATIFY AND AFFIRM SUCH ACTIONS.

 

12.3         AGENT’S RELIANCE, ETC.  NEITHER AGENT NOR ANY OF ITS DIRECTORS,
OFFICERS, AGENTS OR EMPLOYEES SHALL BE LIABLE FOR ANY ACTION TAKEN OR OMITTED TO
BE TAKEN UNDER OR IN CONNECTION WITH THE LOAN DOCUMENTS.  WITHOUT LIMITATION OF
THE GENERALITY OF THE FOREGOING, AGENT (A) MAY TREAT THE PAYEE OF ANY NOTE AS
THE HOLDER THEREOF UNTIL AGENT RECEIVES AND ACCEPTS AN ASSIGNMENT AND ACCEPTANCE
ENTERED INTO BY THE LENDER THAT IS THE PAYEE OF SUCH NOTE, AS ASSIGNOR, AND AN
ELIGIBLE ASSIGNEE, AS ASSIGNEE; (B) MAY CONSULT WITH LEGAL COUNSEL (INCLUDING
COUNSEL FOR ANY LENDER PARTY), INDEPENDENT PUBLIC ACCOUNTANTS AND OTHER EXPERTS
SELECTED BY IT AND SHALL NOT BE LIABLE FOR ANY ACTION TAKEN OR OMITTED TO BE
TAKEN IN GOOD FAITH BY IT IN ACCORDANCE WITH THE ADVICE OF SUCH COUNSEL,
ACCOUNTANTS OR EXPERTS; (C) MAKES NO WARRANTY OR REPRESENTATION TO ANY LENDER
AND SHALL NOT BE RESPONSIBLE TO ANY LENDER FOR ANY STATEMENTS, WARRANTIES OR
REPRESENTATIONS (WHETHER WRITTEN OR ORAL) MADE IN OR IN CONNECTION WITH THE LOAN
DOCUMENTS; (D) SHALL NOT HAVE ANY DUTY TO ASCERTAIN OR TO INQUIRE AS TO THE
PERFORMANCE OR OBSERVANCE OF ANY OF THE TERMS, COVENANTS OR CONDITIONS OF ANY
LOAN DOCUMENT ON THE PART OF ANY LENDER PARTY OR TO INSPECT THE PROPERTY
(INCLUDING THE BOOKS AND RECORDS) OF ANY LENDER PARTY; (E) SHALL NOT BE
RESPONSIBLE TO ANY LENDER FOR THE DUE EXECUTION, LEGALITY, VALIDITY,
ENFORCEABILITY, GENUINENESS, SUFFICIENCY OR VALUE OF, OR THE PERFECTION OR
PRIORITY OF ANY LIEN CREATED OR PURPORTED TO BE CREATED UNDER OR IN CONNECTION
WITH, ANY LOAN DOCUMENT OR ANY OTHER INSTRUMENT OR DOCUMENT FURNISHED PURSUANT
THERETO; AND (F) SHALL INCUR NO LIABILITY UNDER OR IN RESPECT OF ANY LOAN
DOCUMENT BY ACTING UPON ANY NOTICE, CONSENT, CERTIFICATE OR OTHER INSTRUMENT OR
WRITING (WHICH MAY BE BY TELEGRAM, TELECOPY OR TELEX) BELIEVED BY IT TO BE
GENUINE AND SIGNED OR SENT BY THE PROPER PERSON.

 

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12.4         NO RELIANCE ON AGENT’S CUSTOMER IDENTIFICATION PROGRAM.  EACH
LENDER ACKNOWLEDGES AND AGREES THAT NEITHER SUCH LENDER, NOR ANY OF ITS
AFFILIATES, PARTICIPANTS, TRANSFEREES OR ASSIGNEES, MAY RELY ON AGENT TO CARRY
OUT SUCH LENDER’S, AFFILIATE’S, PARTICIPANT’S, TRANSFEREE’S OR ASSIGNEE’S
CUSTOMER IDENTIFICATION PROGRAM, OR OTHER OBLIGATIONS REQUIRED OR IMPOSED UNDER
OR PURSUANT TO THE USA PATRIOT ACT OR THE REGULATIONS THEREUNDER, OR ANY OTHER
ANTI-TERRORISM LAW, INCLUDING ANY PROGRAMS INVOLVING ANY OF THE FOLLOWING ITEMS
RELATING TO OR IN CONNECTION WITH BORROWER, ITS AFFILIATES OR ITS AGENTS, THE
LOAN DOCUMENTS OR THE LOANS HEREUNDER:  (1) ANY IDENTITY VERIFICATION
PROCEDURES, (2) ANY RECORDKEEPING, (3) ANY COMPARISONS WITH GOVERNMENT LISTS,
(4) ANY CUSTOMER NOTICES, OR (5) ANY OTHER PROCEDURES REQUIRED UNDER THE
APPLICABLE LAWS.

 

12.5         WACHOVIA AND AFFILIATES.  WITH RESPECT TO ITS COMMITMENTS, THE
ADVANCES MADE BY IT AND THE NOTES ISSUED TO IT, WACHOVIA SHALL HAVE THE SAME
RIGHTS AND POWERS UNDER THE LOAN DOCUMENTS AS ANY OTHER LENDER AND MAY EXERCISE
THE SAME AS THOUGH IT WERE NOT AN AGENT; AND THE TERM “LENDER” SHALL, UNLESS
OTHERWISE EXPRESSLY INDICATED, INCLUDE WACHOVIA IN ITS CAPACITY AS A LENDER
UNDER THIS AGREEMENT.  WACHOVIA AND ITS AFFILIATES MAY ACCEPT DEPOSITS FROM,
LEND MONEY TO, ACT AS TRUSTEE UNDER INDENTURES OF, ACCEPT INVESTMENT BANKING
ENGAGEMENTS FROM AND GENERALLY ENGAGE IN ANY KIND OF BUSINESS WITH, BORROWER AND
ANY OTHER LENDER, ANY OF THEIR RESPECTIVE SUBSIDIARIES AND ANY PERSON WHO MAY DO
BUSINESS WITH OR OWN SECURITIES OF ANY SUCH PERSON, ALL AS IF WACHOVIA WERE NOT
AGENT AND WITHOUT ANY DUTY TO ACCOUNT THEREFOR TO ANY PERSON.

 

12.6         LENDER CREDIT DECISION.  EACH LENDER ACKNOWLEDGES THAT IT HAS,
INDEPENDENTLY AND WITHOUT RELIANCE UPON AGENT OR ANY OTHER LENDER AND BASED ON
THE FINANCIAL STATEMENTS OF BORROWER AND SUCH OTHER DOCUMENTS AND INFORMATION AS
IT HAS DEEMED APPROPRIATE, MADE ITS OWN CREDIT ANALYSIS AND DECISION TO ENTER
INTO THIS AGREEMENT.  EACH LENDER ALSO ACKNOWLEDGES THAT IT WILL, INDEPENDENTLY
AND WITHOUT RELIANCE UPON AGENT 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.

 

12.7         INDEMNIFICATION.

 

(A)          EACH LENDER SEVERALLY AGREES TO INDEMNIFY AGENT (TO THE EXTENT NOT
PROMPTLY REIMBURSED BY BORROWER) FROM AND AGAINST SUCH LENDER’S PRO RATA SHARE
OF ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS,
JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS OF ANY KIND OR NATURE
WHATSOEVER THAT MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST AGENT IN ANY
WAY RELATING TO OR ARISING OUT OF THE LOAN DOCUMENTS OR ANY ACTION TAKEN OR
OMITTED BY AGENT UNDER THE LOAN DOCUMENTS; PROVIDED, HOWEVER, THAT NO LENDER
SHALL BE LIABLE FOR ANY PORTION OF SUCH LIABILITIES, OBLIGATIONS, LOSSES,
DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS
RESULTING FROM AGENT’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.  WITHOUT
LIMITATION OF THE FOREGOING, EACH LENDER AGREES TO REIMBURSE AGENT PROMPTLY UPON
DEMAND FOR ITS PRO RATA SHARE OF ANY COSTS AND EXPENSES (INCLUDING, WITHOUT
LIMITATION, ATTORNEYS’ FEES AND EXPENSES) PAYABLE BY BORROWER UNDER THIS
AGREEMENT, TO THE EXTENT THAT AGENT IS NOT PROMPTLY REIMBURSED FOR SUCH COSTS
AND EXPENSES BY BORROWER.  THE FAILURE OF ANY LENDER TO REIMBURSE AGENT PROMPTLY
UPON DEMAND FOR ITS PRO RATA SHARE OF ANY AMOUNT REQUIRED TO BE PAID BY LENDER
TO AGENT AS PROVIDED HEREIN SHALL NOT RELIEVE ANY OTHER LENDER OF ITS OBLIGATION
HEREUNDER TO REIMBURSE AGENT FOR ITS PRO RATA SHARE OF SUCH AMOUNT, BUT

 

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NO LENDER SHALL BE RESPONSIBLE FOR THE FAILURE OF ANY OTHER LENDER TO REIMBURSE
AGENT FOR SUCH OTHER LENDER’S PRO RATA SHARE OF SUCH AMOUNT.  WITHOUT PREJUDICE
TO THE SURVIVAL OF ANY OTHER AGREEMENT OF ANY LENDER HEREUNDER, THE AGREEMENT
AND OBLIGATIONS OF EACH LENDER CONTAINED IN THIS SECTION SHALL SURVIVE THE
PAYMENT IN FULL OF PRINCIPAL, INTEREST AND ALL OTHER AMOUNTS PAYABLE HEREUNDER
AND UNDER THE OTHER LOAN DOCUMENTS.

 

(B)           EACH LENDER SEVERALLY AGREES TO INDEMNIFY ISSUING LENDER (TO THE
EXTENT NOT PROMPTLY REIMBURSED BY BORROWER) FROM AND AGAINST SUCH LENDER’S PRO
RATA SHARE OF ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES,
ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS OF ANY KIND OR
NATURE WHATSOEVER THAT MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST
ISSUING LENDER IN ANY WAY RELATING TO OR ARISING OUT OF THE LOAN DOCUMENTS OR
ANY ACTION TAKEN OR OMITTED BY ISSUING LENDER UNDER THE LOAN DOCUMENTS.  WITHOUT
LIMITATION OF THE FOREGOING, EACH LENDER AGREES TO REIMBURSE ISSUING LENDER
PROMPTLY UPON DEMAND FOR ITS PRO RATA SHARE OF ANY COSTS AND EXPENSES
(INCLUDING, WITHOUT LIMITATION, ATTORNEYS’ FEES AND EXPENSES) PAYABLE BY
BORROWER UNDER THIS AGREEMENT, TO THE EXTENT THAT ISSUING LENDER IS NOT PROMPTLY
REIMBURSED FOR SUCH COSTS AND EXPENSES BY BORROWER.  THE FAILURE OF ANY LENDER
TO REIMBURSE ISSUING LENDER PROMPTLY UPON DEMAND FOR ITS PRO RATA SHARE OF ANY
AMOUNT REQUIRED TO BE PAID BY THE LENDER PARTIES TO ISSUING LENDER AS PROVIDED
HEREIN SHALL NOT RELIEVE ANY OTHER LENDER OF ITS OBLIGATION HEREUNDER TO
REIMBURSE ISSUING LENDER FOR ITS PRO RATA SHARE OF SUCH AMOUNT, BUT NO LENDER
SHALL BE RESPONSIBLE FOR THE FAILURE OF ANY OTHER LENDER TO REIMBURSE ISSUING
LENDER FOR SUCH OTHER LENDER’S PRO RATA SHARE OF SUCH AMOUNT.  WITHOUT PREJUDICE
TO THE SURVIVAL OF ANY OTHER AGREEMENT OF ANY LENDER HEREUNDER, THE AGREEMENT
AND OBLIGATIONS OF EACH LENDER CONTAINED IN THIS SECTION SHALL SURVIVE THE
PAYMENT IN FULL OF PRINCIPAL, INTEREST AND ALL OTHER AMOUNTS PAYABLE HEREUNDER
AND UNDER THE OTHER LOAN DOCUMENTS.

 

12.8         SUCCESSOR AGENT.  AGENT MAY RESIGN AT ANY TIME BY GIVING WRITTEN
NOTICE THEREOF TO LENDER PARTIES AND BORROWER, AND MAY BE REMOVED AT ANY TIME
WITH OR WITHOUT CAUSE BY THE REQUIRED LENDERS.  UPON ANY SUCH RESIGNATION OR
REMOVAL, THE REQUIRED LENDERS SHALL HAVE THE RIGHT TO APPOINT A SUCCESSOR
AGENT.  IF NO SUCCESSOR AGENT SHALL HAVE BEEN SO APPOINTED BY THE REQUIRED
LENDERS, AND SHALL HAVE ACCEPTED SUCH APPOINTMENT, WITHIN 30 DAYS AFTER THE
RETIRING AGENT’S GIVING OF NOTICE OF RESIGNATION OR THE REQUIRED LENDERS’
REMOVAL OF THE RETIRING AGENT, THEN THE RETIRING AGENT MAY, ON BEHALF OF LENDER
PARTIES, APPOINT A SUCCESSOR AGENT, WHICH SHALL BE A COMMERCIAL BANK ORGANIZED
UNDER THE LAWS OF THE UNITED STATES OR OF ANY STATE THEREOF AND HAVING A
COMBINED CAPITAL AND SURPLUS OF AT LEAST $500,000,000.00.  UPON THE ACCEPTANCE
OF ANY APPOINTMENT AS AGENT HEREUNDER BY A SUCCESSOR AGENT AND UPON THE
EXECUTION AND FILING OR RECORDING OF SUCH FINANCING STATEMENTS, OR AMENDMENTS
THERETO, AND SUCH AMENDMENTS OR SUPPLEMENTS TO THE SECURITY DOCUMENTS, AND SUCH
OTHER INSTRUMENTS OR NOTICES, AS MAY BE NECESSARY OR DESIRABLE, OR AS THE
REQUIRED LENDERS MAY REQUEST, IN ORDER TO CONTINUE THE PERFECTION OF THE LIENS
GRANTED OR PURPORTED TO BE GRANTED BY THE SECURITY DOCUMENTS, SUCH SUCCESSOR
AGENT SHALL SUCCEED TO AND BECOME VESTED WITH ALL THE RIGHTS, POWERS,
DISCRETION, PRIVILEGES AND DUTIES OF THE RETIRING AGENT, AND THE RETIRING AGENT
SHALL BE DISCHARGED FROM ITS DUTIES AND OBLIGATIONS UNDER THE LOAN DOCUMENTS. 
AFTER ANY RETIRING AGENT’S RESIGNATION OR REMOVAL HEREUNDER AS AGENT, THE
PROVISIONS OF THIS ARTICLE 12 SHALL INURE TO ITS BENEFIT AS TO ANY ACTIONS TAKEN
OR OMITTED TO BE TAKEN BY IT WHILE IT WAS AGENT UNDER THIS AGREEMENT.

 

12.9         NO THIRD PARTY BENEFICIARY.  THE PROVISIONS OF THIS ARTICLE 12 ARE
SOLELY FOR THE BENEFIT OF LENDER PARTIES, AND NO PERSON OTHER THAN LENDER
PARTIES IS INTENDED TO BE A BENEFICIARY

 

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OF THE RIGHTS AND OBLIGATIONS OF LENDER PARTIES UNDER THIS ARTICLE 12, AND
LENDER PARTIES SHALL HAVE THE RIGHT TO AMEND OR MODIFY THIS ARTICLE 12 OR WAIVE
ANY REQUIREMENT UNDER THIS ARTICLE 12, WITHOUT THE CONSENT OR APPROVAL OF ANY
OTHER PERSON (EXCEPT LENDER PARTIES SHALL NOTIFY BORROWER AS TO ANY SUCH
AMENDMENT OR MODIFICATION).

 

ARTICLE XIII

 

13.           MISCELLANEOUS

 

13.1         TERMINATION OF COLLATERAL AGENT’S LIEN.  THIS AGREEMENT AND THE
COLLATERAL AGENT’S LIEN WILL NOT BE TERMINATED UNTIL ONE OF COLLATERAL AGENT’S
OFFICERS SIGNS A WRITTEN TERMINATION OR SATISFACTION AGREEMENT TO SUCH EFFECT. 
EVEN IF ALL OF THE SECURED OBLIGATIONS OWING TO LENDER PARTIES AT ANY TIME
SHOULD BE PAID, COLLATERAL AGENT’S LIEN WILL CONTINUE TO SECURE ANY SECURED
OBLIGATIONS OF ANY BORROWER PARTY THEREAFTER ARISING UNTIL THE WRITTEN
TERMINATION OR SATISFACTION AGREEMENT REFERRED TO ABOVE HAS BEEN EXECUTED BY
COLLATERAL AGENT (PROVIDED THAT COLLATERAL AGENT AGREES TO PROMPTLY PROVIDE A
WRITTEN TERMINATION OR SATISFACTION AGREEMENT UPON REQUEST OF BORROWER, PROVIDED
THAT ALL THE SECURED OBLIGATIONS HAVE BEEN FULLY PAID AND PERFORMED AND LENDER
PARTIES HAVE NO OBLIGATION TO MAKE ANY FURTHER ADVANCES, AND THERE IS NOT
EXISTING ANY DEFAULT).  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED FOR IN THIS
AGREEMENT, NO TERMINATION OF THIS AGREEMENT SHALL IN ANY WAY AFFECT OR IMPAIR
THE REPRESENTATIONS, WARRANTIES, AGREEMENTS, COVENANTS, OBLIGATIONS, DUTIES AND
SECURED OBLIGATIONS OF ANY BORROWER PARTY OR THE POWERS, RIGHTS, AND REMEDIES OF
LENDER PARTY UNDER THIS AGREEMENT WITH RESPECT TO ANY TRANSACTION OR EVENT
OCCURRING PRIOR TO SUCH TERMINATION, ALL OF WHICH SHALL SURVIVE SUCH
TERMINATION.  EXCEPT AS MAY OTHERWISE EXPRESSLY BE PROVIDED HEREIN TO THE
CONTRARY, IN NO EVENT SHALL COLLATERAL AGENT BE OBLIGATED TO TERMINATE
COLLATERAL AGENT’S LIEN OR RETURN OR RELEASE THE COLLATERAL OR ANY PORTION
THEREOF TO BORROWER (A) UNTIL PAYMENT IN FULL OF THE SECURED OBLIGATIONS
(INCLUDING TERMINATION OF ALL TRANSACTIONS OUTSTANDING UNDER ANY LENDER PARTY
SWAP DOCUMENTS AND PAYMENT IN FULL OF ALL AMOUNTS PAYABLE THEREUNDER), OR (B) IF
LENDER PARTY IS OBLIGATED TO EXTEND CREDIT TO OR FOR THE BENEFIT OF BORROWER
UNDER THIS AGREEMENT (INCLUDING ANY OBLIGATION THAT MIGHT ARISE ON ACCOUNT OF
ANY LETTER OF CREDIT).

 

13.2         CONSTRUCTION.  THE PROVISIONS OF THIS AGREEMENT SHALL BE IN
ADDITION TO THOSE OF ANY OTHER LOAN DOCUMENT AND ANY GUARANTY, PLEDGE OR
SECURITY AGREEMENT, MORTGAGE, DEED OF TRUST, SECURITY DEED, NOTE OR OTHER
EVIDENCE OF LIABILITY GIVEN BY ANY BORROWER PARTY TO OR FOR THE BENEFIT OF ANY
LENDER PARTY, ALL OF WHICH SHALL BE CONSTRUED AS COMPLEMENTARY TO EACH OTHER,
AND ALL EXISTING LIABILITIES AND OBLIGATIONS OF ANY BORROWER PARTY TO ANY LENDER
PARTY AND ANY LIENS HERETOFORE GRANTED TO OR FOR THE BENEFIT OF ANY LENDER PARTY
SHALL, EXCEPT AND ONLY TO THE EXTENT EXPRESSLY PROVIDED HEREIN TO THE CONTRARY,
REMAIN IN FULL FORCE AND EFFECT, AND SHALL NOT BE RELEASED, IMPAIRED,
DIMINISHED, OR IN ANY OTHER WAY MODIFIED OR AMENDED AS A RESULT OF THE EXECUTION
AND DELIVERY OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR BY THE AGREEMENTS
AND UNDERTAKING OF ANY BORROWER PARTY CONTAINED HEREIN AND THEREIN.  NOTHING
HEREIN CONTAINED SHALL PREVENT ANY LENDER PARTY FROM ENFORCING ANY OR ALL OTHER
NOTES, GUARANTIES, PLEDGES OR SECURITY AGREEMENTS, MORTGAGES, DEEDS OF TRUST, OR
SECURITY DEEDS IN ACCORDANCE WITH THEIR RESPECTIVE TERMS.  IN THE EVENT OF A
CONFLICT BETWEEN ANY OF THE PROVISIONS OF THIS AGREEMENT, THE NOTES, ANY ONE OR
MORE OF THE SECURITY DOCUMENTS OR ANY OTHER LOAN DOCUMENT, THE PROVISIONS MOST
FAVORABLE TO LENDER PARTIES SHALL CONTROL.

 

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13.3         INDEMNITY.  BORROWER HEREBY AGREES TO INDEMNIFY LENDER PARTIES AND
THEIR RESPECTIVE OFFICERS, DIRECTORS, AGENTS, AND ATTORNEYS AGAINST, AND TO HOLD
LENDER PARTIES AND ALL SUCH OTHER PERSONS HARMLESS FROM ALL INDEMNIFIED LOSSES
RESULTING FROM ANY REPRESENTATION OR WARRANTY MADE BY ANY BORROWER PARTY OR ON
ANY BORROWER PARTY’S BEHALF PURSUANT TO THIS AGREEMENT HAVING BEEN FALSE WHEN
MADE, OR RESULTING FROM BORROWER’S BREACH OF ANY OF THE COVENANTS SET FORTH IN
THIS AGREEMENT, WHICH INDEMNIFICATION IS IN ADDITION TO, AND NOT IN DEROGATION
OF, ANY STATUTORY, EQUITABLE, OR COMMON LAW RIGHT OR REMEDY LENDER PARTIES MAY
HAVE FOR BREACH OF REPRESENTATION, WARRANTY, STATEMENT OR COVENANT OR OTHERWISE
MAY HAVE UNDER ANY OF THE LOAN DOCUMENTS.  THIS AGREEMENT OF INDEMNITY SHALL BE
A CONTINUING AGREEMENT AND SHALL SURVIVE PAYMENT OF THE LOANS AND TERMINATION OF
THIS AGREEMENT.

 

13.4         LENDER PARTY’S CONSENT.  EXCEPT WHERE OTHERWISE EXPRESSLY PROVIDED
IN THE LOAN DOCUMENTS, IN ANY INSTANCE WHERE THE APPROVAL, CONSENT, OR THE
EXERCISE OF LENDER PARTY’S JUDGMENT OR DISCRETION IS REQUIRED OR PERMITTED, THE
GRANTING OR DENIAL OF SUCH APPROVAL OR CONSENT AND THE EXERCISE OF SUCH JUDGMENT
OR DISCRETION SHALL BE (A) WITHIN THE SOLE DISCRETION OF LENDER PARTY; AND
(B) DEEMED TO HAVE BEEN GIVEN ONLY BY A SPECIFIC WRITING INTENDED FOR THE
PURPOSE GIVEN AND EXECUTED BY LENDER PARTY.

 

13.5         ENFORCEMENT AND WAIVER BY LENDER PARTY.  LENDER PARTY SHALL HAVE
THE RIGHT AT ALL TIMES TO ENFORCE THE PROVISIONS OF THIS AGREEMENT, THE NOTES,
AND EACH OF OTHER LOAN DOCUMENTS IN STRICT ACCORDANCE WITH THE TERMS HEREOF AND
THEREOF, NOTWITHSTANDING ANY CONDUCT OR CUSTOM ON THE PART OF LENDER PARTY IN
REFRAINING FROM SO DOING AT ANY TIME OR TIMES.  THE FAILURE OF LENDER PARTY AT
ANY TIME OR TIMES TO ENFORCE ITS RIGHTS UNDER SUCH PROVISIONS, STRICTLY IN
ACCORDANCE WITH THE SAME, SHALL NOT BE CONSTRUED AS HAVING CREATED A CUSTOM IN
ANY WAY OR MANNER CONTRARY TO SPECIFIC PROVISIONS OF THIS AGREEMENT OR AS HAVING
IN ANY WAY OR MANNER MODIFIED OR WAIVED THE SAME.  ALL RIGHTS AND REMEDIES OF
LENDER PARTY ARE CUMULATIVE AND THE EXERCISE OF ONE RIGHT OR REMEDY SHALL NOT BE
DEEMED A WAIVER OR RELEASE OF ANY OTHER RIGHT OR REMEDY.

 

13.6         NO REPRESENTATION, ASSUMPTION, OR DUTY.  NOTHING, INCLUDING ANY
ADVANCE OR ACCEPTANCE OF ANY DOCUMENT OR INSTRUMENT, SHALL BE CONSTRUED AS A
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, TO ANY PERSON BY ANY LENDER
PARTY.  ANY INSPECTION OR AUDIT OF THE COLLATERAL OR THE RECORDS OF BORROWER, OR
THE PROCURING OF DOCUMENTS AND FINANCIAL AND OTHER INFORMATION, BY OR ON BEHALF
OF ANY LENDER PARTY SHALL BE FOR LENDER PARTIES’ PROTECTION ONLY, AND SHALL NOT
CONSTITUTE ANY ASSUMPTION OF RESPONSIBILITY BY ANY LENDER PARTY WITH RESPECT
THERETO OR RELIEVE BORROWER OF ANY OF BORROWER’S OBLIGATIONS.

 

13.7         EXPENSES OF LENDER PARTIES.  BORROWER WILL, ON DEMAND, REIMBURSE
LENDER PARTIES FOR ALL EXPENSES INCURRED BY LENDER PARTIES IN CONNECTION WITH
THE CLOSING OF THE LOANS AND THE PREPARATION, NEGOTIATION, AMENDMENT,
MODIFICATION, INTERPRETATION, ADMINISTRATION OR ENFORCEMENT OF THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS AND/OR IN THE COLLECTION OF ANY AMOUNTS OWING FROM
ANY BORROWER PARTY OR ANY OTHER PERSON TO LENDER PARTIES UNDER THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT AND, UNTIL SO PAID, THE AMOUNT OF SUCH EXPENSES SHALL BE
ADDED TO AND BECOME PART OF THE AMOUNT OF THE CREDIT AGREEMENT OBLIGATIONS.

 

13.8         ATTORNEYS’ FEES.  IF AT ANY TIME OR TIMES HEREAFTER LENDER PARTY,
EMPLOYS COUNSEL TO ADVISE OR PROVIDE OTHER REPRESENTATION WITH RESPECT TO THIS
AGREEMENT, ANY LOAN DOCUMENT, OR ANY OTHER AGREEMENT, DOCUMENT OR INSTRUMENT
HERETOFORE, NOW OR HEREAFTER EXECUTED BY ANY

 

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BORROWER PARTY AND DELIVERED TO LENDER PARTY WITH RESPECT TO THE CREDIT
AGREEMENT OBLIGATIONS, OR TO COMMENCE, DEFEND OR INTERVENE, FILE A PETITION,
COMPLAINT, ANSWER, MOTION OR OTHER PLEADINGS OR TO TAKE ANY OTHER ACTION IN OR
WITH RESPECT TO ANY PENDING, THREATENED OR ANTICIPATED SUIT OR PROCEEDING
RELATING TO THIS AGREEMENT, ANY LOAN DOCUMENT, OR ANY OTHER AGREEMENT,
INSTRUMENT OR DOCUMENT HERETOFORE, NOW OR HEREAFTER EXECUTED BY BORROWER PARTY
AND DELIVERED TO LENDER PARTY WITH RESPECT TO THE CREDIT AGREEMENT OBLIGATIONS,
OR TO REPRESENT LENDER PARTY IN ANY LITIGATION WITH RESPECT TO THE AFFAIRS OF
BORROWER PARTY, OR TO ENFORCE ANY RIGHTS OF LENDER PARTY OR OBLIGATIONS OF
BORROWER PARTY OR ANY OTHER PERSON WHICH MAY BE OBLIGATED TO LENDER PARTY BY
VIRTUE OF THIS AGREEMENT, ANY LOAN DOCUMENT, OR ANY OTHER AGREEMENT, DOCUMENT OR
INSTRUMENT HERETOFORE, NOW OR HEREAFTER DELIVERED TO LENDER PARTY BY OR FOR THE
BENEFIT OF BORROWER PARTY WITH RESPECT TO THE CREDIT AGREEMENT OBLIGATIONS, OR
TO COLLECT FROM BORROWER PARTY ANY AMOUNTS OWING HEREUNDER, THEN IN ANY SUCH
EVENT, ALL OF THE ATTORNEYS’ FEES INCURRED BY LENDER PARTY ARISING FROM SUCH
SERVICES AND ANY EXPENSES, COSTS AND CHARGES RELATING THERETO SHALL CONSTITUTE
ADDITIONAL OBLIGATIONS OF BORROWER PAYABLE ON DEMAND AND, UNTIL SO PAID, SHALL
BE ADDED TO AND BECOME PART OF THE CREDIT AGREEMENT OBLIGATIONS.

 

13.9         EXCLUSIVENESS.  THIS AGREEMENT, THE NOTES, THE SECURITY DOCUMENTS,
AND ANY OTHER LOAN DOCUMENTS MADE PURSUANT HERETO ARE MADE FOR THE SOLE
PROTECTION OF BORROWER PARTIES, LENDER PARTIES, AND LENDER PARTIES’ SUCCESSORS
AND ASSIGNS, AND NO OTHER PERSON SHALL HAVE ANY RIGHT OF ACTION HEREUNDER.

 

13.10       WAIVER OF PUNITIVE DAMAGES.  BORROWER AGREES THAT WITH RESPECT TO
ANY CLAIM OF BORROWER ARISING UNDER THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT,
IN NO EVENT SHALL BORROWER HAVE A REMEDY OF, OR SHALL ANY LENDER PARTY BE LIABLE
FOR, INDIRECT, SPECIAL, CONSEQUENTIAL, PUNITIVE OR EXEMPLARY DAMAGES, AND
BORROWER WAIVES ANY RIGHT OR CLAIM TO SUCH DAMAGES BORROWER MAY HAVE OR WHICH
MAY ARISE IN THE FUTURE IN CONNECTION WITH THE LOANS OR THE LOAN DOCUMENTS,
WHETHER THE SAME IS RESOLVED BY ARBITRATION, MEDIATION, JUDICIAL PROCESS OR
OTHERWISE.

 

13.11       WAIVER AND RELEASE BY BORROWER.  BORROWER (A) WAIVES PROTEST OF ALL
COMMERCIAL PAPER AT ANY TIME HELD BY LENDER PARTY ON WHICH BORROWER IS ANY WAY
LIABLE; (B) WAIVES NOTICE OF ACCELERATION AND OF INTENTION TO ACCELERATE;
(C) WAIVES NOTICE AND OPPORTUNITY TO BE HEARD, AFTER ACCELERATION, BEFORE
EXERCISE BY LENDER PARTY OF THE REMEDIES OF SELF-HELP, SET-OFF, OR OF OTHER
SUMMARY PROCEDURES PERMITTED BY ANY APPLICABLE LAWS OR BY ANY AGREEMENT WITH
BORROWER, AND EXCEPT WHERE REQUIRED HEREBY OR BY ANY APPLICABLE LAWS WHICH
REQUIREMENT CANNOT BE WAIVED, NOTICE OF ANY OTHER ACTION TAKEN BY LENDER PARTY;
AND (D) RELEASES LENDER PARTIES AND THEIR RESPECTIVE OFFICERS, ATTORNEYS, AGENTS
AND EMPLOYEES FROM ALL CLAIMS FOR LOSS OR DAMAGE CAUSED BY ANY ACT OR OMISSION
ON THE PART OF ANY OF THEM IN CONNECTION WITH THE CREDIT AGREEMENT OBLIGATIONS,
THE LOAN DOCUMENTS OR THE LENDER PARTY SWAP DOCUMENTS.

 

13.12       LIMITATION ON WAIVER OF NOTICE, ETC.  NOTWITHSTANDING ANY PROVISION
OF THIS AGREEMENT TO THE CONTRARY, TO THE EXTENT THAT ANY APPLICABLE LAW
EXPRESSLY LIMITS ANY WAIVER OF ANY RIGHT CONTAINED HEREIN OR IN ANY OTHER LOAN
DOCUMENT (INCLUDING ANY WAIVER OF ANY NOTICE OR OTHER DEMAND), SUCH WAIVER SHALL
BE INEFFECTIVE TO SUCH EXTENT.

 

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13.13       ADDITIONAL COSTS.  IN THE EVENT THAT ANY APPLICABLE LAW NOW OR
HEREAFTER IN EFFECT AND WHETHER OR NOT PRESENTLY APPLICABLE TO LENDER PARTY, OR
ANY INTERPRETATION OR ADMINISTRATION THEREOF BY ANY GOVERNMENTAL AUTHORITY
CHARGED WITH THE INTERPRETATION OR ADMINISTRATION THEREOF, OR COMPLIANCE BY
LENDER PARTY WITH ANY GUIDELINE, REQUEST OR DIRECTIVE OF ANY SUCH GOVERNMENTAL
AUTHORITY (WHETHER OR NOT HAVING THE FORCE OF LAW), SHALL (I) AFFECT THE BASIS
OF TAXATION OF PAYMENTS TO LENDER PARTY OF ANY AMOUNTS PAYABLE BY BORROWER UNDER
THIS AGREEMENT (OTHER THAN TAXES IMPOSED ON THE OVERALL NET INCOME OF LENDER
PARTY), OR (II) IMPOSE, MODIFY OR DEEM APPLICABLE ANY RESERVE, SPECIAL DEPOSIT
OR SIMILAR REQUIREMENT AGAINST ASSETS OF, DEPOSITS WITH OR FOR THE ACCOUNT OF,
OR CREDIT EXTENDED BY LENDER PARTY, OR (III) IMPOSE ANY OTHER CONDITION WITH
RESPECT TO THIS AGREEMENT, THE NOTES OR THE LOANS, OR (IV) AFFECT THE AMOUNT OF
CAPITAL REQUIRED OR EXPECTED TO BE MAINTAINED BY LENDER PARTY, AND THE RESULT OF
ANY OF THE FOREGOING IS TO INCREASE THE COST TO LENDER PARTY OF MAKING, FUNDING
OR MAINTAINING THE LOANS OR TO REDUCE THE AMOUNT OF ANY AMOUNT RECEIVABLE BY
LENDER PARTY THEREON, THEN BORROWER SHALL PAY TO LENDER PARTY FROM TIME TO TIME,
UPON REQUEST BY LENDER PARTY, ADDITIONAL AMOUNTS SUFFICIENT TO COMPENSATE LENDER
PARTY FOR SUCH INCREASED COST OR REDUCED AMOUNT RECEIVABLE TO THE EXTENT LENDER
PARTY IS NOT COMPENSATED THEREFOR IN THE COMPUTATION OF THE INTEREST RATE
APPLICABLE TO THE LOANS.  A STATEMENT AS TO THE AMOUNT OF SUCH INCREASED COST OR
REDUCED AMOUNT RECEIVABLE, PREPARED IN GOOD FAITH AND IN REASONABLE DETAIL BY
LENDER PARTY AND SUBMITTED BY LENDER PARTY TO BORROWER, SHALL BE CONCLUSIVE AND
BINDING FOR ALL PURPOSES ABSENT MANIFEST ERROR IN COMPUTATION.

 

13.14       ILLEGALITY AND IMPOSSIBILITY.  IN THE EVENT THAT ANY APPLICABLE LAW
NOW OR HEREAFTER IN EFFECT AND WHETHER OR NOT PRESENTLY APPLICABLE TO LENDER
PARTY, OR ANY INTERPRETATION OR ADMINISTRATION THEREOF BY ANY GOVERNMENTAL
AUTHORITY CHARGED WITH THE INTERPRETATION OR ADMINISTRATION THEREOF, OR
COMPLIANCE BY LENDER PARTY WITH ANY GUIDELINE, REQUEST OR DIRECTIVE OF SUCH
GOVERNMENTAL AUTHORITY (WHETHER OR NOT HAVING THE FORCE OF LAW), INCLUDING
WITHOUT LIMITATION EXCHANGE CONTROLS, SHALL MAKE IT UNLAWFUL OR IMPOSSIBLE FOR
LENDER PARTY TO MAINTAIN ANY LOAN UNDER THIS AGREEMENT, BORROWER SHALL UPON
RECEIPT OF REASONABLE NOTICE THEREOF FROM LENDER PARTY REPAY IN FULL THE THEN
OUTSTANDING PRINCIPAL AMOUNT OF SUCH LOAN, TOGETHER WITH ALL ACCRUED INTEREST
THEREON TO THE DATE OF PAYMENT AND ALL AMOUNTS OWING TO LENDER PARTY, (A) ON THE
LAST DAY OF THE THEN CURRENT INTEREST PERIOD APPLICABLE TO SUCH LOAN IF LENDER
PARTY MAY LAWFULLY CONTINUE TO MAINTAIN SUCH LOAN TO SUCH DAY, OR
(B) IMMEDIATELY IF LENDER PARTY MAY NOT CONTINUE TO MAINTAIN SUCH LOAN TO SUCH
DAY.

 

13.15       ASSIGNMENTS AND PARTICIPATIONS.

 

(A)          EACH LENDER MAY ASSIGN TO ONE OR MORE ELIGIBLE ASSIGNEES ALL OR A
PORTION OF ITS RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT (INCLUDING, WITHOUT
LIMITATION, ALL OR A PORTION OF ITS COMMITMENT OR COMMITMENTS, THE ADVANCES
OWING TO IT AND THE NOTE OR NOTES HELD BY IT); PROVIDED, HOWEVER, THAT (I) EACH
SUCH ASSIGNMENT SHALL BE OF A UNIFORM, AND NOT A VARYING, PERCENTAGE OF ALL
RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS;
(II) EXCEPT IN THE CASE OF AN ASSIGNMENT TO A PERSON THAT, IMMEDIATELY PRIOR TO
SUCH ASSIGNMENT, WAS A LENDER OR AN ASSIGNMENT OF ALL OF A LENDER’S RIGHTS AND
OBLIGATIONS UNDER THIS AGREEMENT, THE AMOUNT OF THE COMMITMENT OF THE ASSIGNING
LENDER BEING ASSIGNED PURSUANT TO EACH SUCH ASSIGNMENT (DETERMINED AS OF THE
DATE OF THE ASSIGNMENT AND ACCEPTANCE WITH RESPECT TO SUCH ASSIGNMENT) SHALL IN
NO EVENT BE LESS THAN $1,000,000.00; (III) EACH SUCH ASSIGNMENT SHALL BE TO AN
ELIGIBLE ASSIGNEE; (IV) THE PARTIES TO EACH SUCH ASSIGNMENT SHALL EXECUTE AND
DELIVER TO AGENT, FOR ITS ACCEPTANCE, AN ASSIGNMENT AND ACCEPTANCE, TOGETHER
WITH ANY NOTE OR NOTES SUBJECT TO

 

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SUCH ASSIGNMENT AND A PROCESSING FEE OF $5,000.00; AND (V) UNTIL THE OCCURRENCE
OF A DEFAULT, BORROWERS SHALL APPROVE THE ELIGIBLE ASSIGNEE (SUCH APPROVAL NOT
TO BE UNREASONABLY WITHHELD OR DELAYED).

 

(B)           UPON SUCH EXECUTION, DELIVERY, ACCEPTANCE AND RECORDING, FROM AND
AFTER THE EFFECTIVE DATE SPECIFIED IN SUCH ASSIGNMENT AND ACCEPTANCE, (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, HAVE THE RIGHTS AND OBLIGATIONS OF A LENDER HEREUNDER, AND (II) THE
LENDER ASSIGNOR THEREUNDER SHALL, TO THE EXTENT THAT RIGHTS AND OBLIGATIONS
HEREUNDER HAVE BEEN ASSIGNED BY IT PURSUANT TO SUCH ASSIGNMENT AND ACCEPTANCE,
RELINQUISH ITS RIGHTS AND BE RELEASED FROM ITS 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,
SUCH LENDER SHALL CEASE TO BE A PARTY HERETO).

 

(C)           BY EXECUTING AND DELIVERING AN ASSIGNMENT AND ACCEPTANCE, THE
LENDER ASSIGNOR 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
ANY OTHER LOAN DOCUMENT OR THE EXECUTION, LEGALITY, VALIDITY, ENFORCEABILITY,
GENUINENESS, SUFFICIENCY OR VALUE OF, OR THE PERFECTION OR PRIORITY OF ANY LIEN
CREATED OR PURPORTED TO BE CREATED UNDER OR IN CONNECTION WITH, THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT OR ANY OTHER INSTRUMENT OR DOCUMENT FURNISHED
PURSUANT HERETO OR THERETO; (II) SUCH ASSIGNING LENDER MAKES NO REPRESENTATION
OR WARRANTY AND ASSUMES NO RESPONSIBILITY WITH RESPECT TO THE FINANCIAL
CONDITION OF BORROWER OR ANY OTHER LENDER PARTY OR THE PERFORMANCE OR OBSERVANCE
BY ANY LENDER PARTY OF ANY OF ITS OBLIGATIONS UNDER ANY LOAN DOCUMENT OR ANY
OTHER INSTRUMENT OR DOCUMENT FURNISHED PURSUANT THERETO; (III) SUCH ASSIGNEE
CONFIRMS THAT IT HAS RECEIVED A COPY OF THIS AGREEMENT, TOGETHER WITH COPIES OF
THE FINANCIAL STATEMENTS AND 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 CONFIRMS THAT IT IS AN ELIGIBLE ASSIGNEE;
(VI) SUCH ASSIGNEE APPOINTS AND AUTHORIZES AGENT TO TAKE SUCH ACTION AS AGENT ON
ITS BEHALF AND TO EXERCISE SUCH POWERS AND DISCRETION UNDER THE LOAN DOCUMENTS
AS ARE DELEGATED TO AGENT BY THE TERMS HEREOF, TOGETHER WITH SUCH POWERS AND
DISCRETION AS ARE REASONABLY INCIDENTAL THERETO; AND (VII) SUCH ASSIGNEE AGREES
THAT IT WILL PERFORM IN ACCORDANCE WITH THEIR TERMS ALL OF THE OBLIGATIONS WHICH
BY THE TERMS OF THIS AGREEMENT ARE REQUIRED TO BE PERFORMED BY IT AS A LENDER.

 

(D)          AGENT SHALL MAINTAIN AT ITS PRINCIPAL OFFICE A COPY OF EACH
ASSIGNMENT AND ACCEPTANCE DELIVERED TO AND ACCEPTED BY IT AND A RECORD OF THE
NAMES AND ADDRESSES OF THE LENDER PARTIES AND THE COMMITMENT OF, AND PRINCIPAL
AMOUNT OF THE ADVANCES OWING TO, EACH LENDER FROM TIME TO TIME (THE
“REGISTER”).  THE ENTRIES IN THE REGISTER SHALL BE CONCLUSIVE AND BINDING FOR
ALL PURPOSES, ABSENT MANIFEST ERROR, AND BORROWER, AGENT AND LENDER PARTIES MAY
TREAT EACH PERSON WHOSE NAME IS RECORDED IN THE REGISTER AS A LENDER HEREUNDER
FOR ALL PURPOSES

 

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OF THIS AGREEMENT.  THE REGISTER SHALL BE AVAILABLE FOR INSPECTION BY BORROWER
OR LENDER AT ANY REASONABLE TIME AND FROM TIME TO TIME UPON REASONABLE PRIOR
NOTICE.

 

(E)           UPON ITS RECEIPT OF AN ASSIGNMENT AND ACCEPTANCE EXECUTED BY AN
ASSIGNING LENDER AND AN ASSIGNEE, TOGETHER WITH ANY NOTE OR NOTES SUBJECT TO
SUCH ASSIGNMENT, AGENT SHALL, IF SUCH ASSIGNMENT AND ACCEPTANCE HAS BEEN
COMPLETED AND IS IN SUBSTANTIALLY THE FORM AS REQUIRED BY THIS AGREEMENT,
(I) ACCEPT SUCH ASSIGNMENT AND ACCEPTANCE, (II) RECORD THE INFORMATION CONTAINED
THEREIN IN THE REGISTER AND (III) GIVE PROMPT NOTICE THEREOF TO BORROWER AND
EACH LENDER.  IN THE CASE OF ANY ASSIGNMENT BY LENDER, WITHIN FIVE BUSINESS DAYS
AFTER ITS RECEIPT OF SUCH NOTICE, BORROWER, AT ITS OWN EXPENSE, SHALL EXECUTE
AND DELIVER TO AGENT IN EXCHANGE FOR THE SURRENDERED NOTE OR NOTES A NEW NOTE TO
THE ORDER OF SUCH ELIGIBLE ASSIGNEE IN AN AMOUNT EQUAL TO THE COMMITMENT ASSUMED
BY IT PURSUANT TO SUCH ASSIGNMENT AND ACCEPTANCE AND, IF THE ASSIGNING LENDER
HAS RETAINED A COMMITMENT HEREUNDER, A NEW NOTE TO THE ORDER OF THE ASSIGNING
LENDER IN AN AMOUNT EQUAL TO THE COMMITMENT RETAINED BY IT HEREUNDER.  SUCH NEW
NOTE OR NOTES SHALL BE IN AN AGGREGATE PRINCIPAL AMOUNT EQUAL TO THE AGGREGATE
PRINCIPAL AMOUNT OF SUCH SURRENDERED NOTE OR NOTES, SHALL BE DATED THE EFFECTIVE
DATE OF SUCH ASSIGNMENT AND ACCEPTANCE AND SHALL OTHERWISE BE IN SUBSTANTIALLY
THE FORM OF THE NOTE OR NOTES SO SURRENDERED.

 

(F)           EACH LENDER MAY SELL PARTICIPATIONS TO ONE OR MORE PERSONS (OTHER
THAN ANY LENDER PARTY OR ANY OF ITS AFFILIATES) IN OR TO ALL OR A PORTION OF ITS
RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT (INCLUDING, WITHOUT LIMITATION, ALL
OR A PORTION OF ITS COMMITMENTS, THE ADVANCES OWING TO IT AND THE NOTE OR NOTES
(IF ANY) HELD BY IT); PROVIDED, HOWEVER, THAT (I) SUCH LENDER’S OBLIGATIONS
UNDER THIS AGREEMENT (INCLUDING, WITHOUT LIMITATION, ITS COMMITMENTS) SHALL
REMAIN UNCHANGED; (II) SUCH LENDER SHALL REMAIN SOLELY RESPONSIBLE TO THE OTHER
PARTIES HERETO FOR THE PERFORMANCE OF SUCH OBLIGATIONS; (III) SUCH LENDER SHALL
REMAIN THE HOLDER OF ANY SUCH NOTE FOR ALL PURPOSES OF THIS AGREEMENT;
(IV) BORROWER, AGENT AND THE OTHER LENDER PARTIES SHALL CONTINUE TO DEAL SOLELY
AND DIRECTLY WITH SUCH LENDER IN CONNECTION WITH SUCH LENDER’S RIGHTS AND
OBLIGATIONS UNDER THIS AGREEMENT; (V) NO PARTICIPANT UNDER ANY SUCH
PARTICIPATION SHALL HAVE ANY RIGHT TO APPROVE ANY AMENDMENT OR WAIVER OF ANY
PROVISION OF ANY LOAN DOCUMENT, OR ANY CONSENT TO ANY DEPARTURE BY ANY LENDER
PARTY THEREFROM, EXCEPT TO THE EXTENT THAT SUCH AMENDMENT, WAIVER OR CONSENT
WOULD REDUCE THE PRINCIPAL OF, OR INTEREST ON, THE NOTES OR ANY FEES OR OTHER
AMOUNTS PAYABLE HEREUNDER, IN EACH CASE TO THE EXTENT SUBJECT TO SUCH
PARTICIPATION, POSTPONE ANY DATE FIXED FOR ANY PAYMENT OF PRINCIPAL OF, OR
INTEREST ON, THE NOTES OR ANY FEES OR OTHER AMOUNTS PAYABLE HEREUNDER, IN EACH
CASE TO THE EXTENT SUBJECT TO SUCH PARTICIPATION, OR RELEASE ALL OR
SUBSTANTIALLY ALL OF THE COLLATERAL; AND (VI) UNTIL THE OCCURRENCE OF A DEFAULT,
BORROWERS SHALL APPROVE THE PARTICIPANT (SUCH APPROVAL NOT TO BE UNREASONABLY
WITHHELD OR DELAYED).

 

(G)           ANY LENDER MAY, IN CONNECTION WITH ANY ASSIGNMENT OR PARTICIPATION
OR PROPOSED ASSIGNMENT OR PARTICIPATION PURSUANT TO THIS SECTION, DISCLOSE TO
THE ASSIGNEE OR PARTICIPANT OR PROPOSED ASSIGNEE OR PARTICIPANT, ANY INFORMATION
RELATING TO BORROWER FURNISHED TO SUCH LENDER BY OR ON BEHALF OF ANY BORROWER
PARTY; PROVIDED, HOWEVER, THAT, PRIOR TO ANY SUCH DISCLOSURE, THE ASSIGNEE OR
PARTICIPANT OR PROPOSED ASSIGNEE OR PARTICIPANT SHALL AGREE TO PRESERVE THE
CONFIDENTIALITY OF ANY CONFIDENTIAL INFORMATION RECEIVED BY IT FROM SUCH LENDER.

 

13.16       BINDING EFFECT, ASSIGNMENT.  THIS AGREEMENT SHALL INURE TO THE
BENEFIT OF, AND SHALL BE BINDING UPON, THE RESPECTIVE SUCCESSORS AND PERMITTED
ASSIGNS OF THE PARTIES HERETO. 

 

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BORROWER HAS NO RIGHT TO ASSIGN ANY OF ITS RIGHTS OR OBLIGATIONS HEREUNDER
WITHOUT THE PRIOR WRITTEN CONSENT OF THE LENDER PARTIES.

 

13.17       ENTIRE AGREEMENT, AMENDMENTS.  THIS AGREEMENT, INCLUDING THE
EXHIBITS HERETO, ALL OF WHICH ARE HEREBY INCORPORATED HEREIN BY REFERENCE, AND
THE DOCUMENTS EXECUTED AND DELIVERED PURSUANT HERETO, CONSTITUTE THE ENTIRE
AGREEMENT BETWEEN THE PARTIES, AND MAY BE AMENDED ONLY BY A WRITING SIGNED ON
BEHALF OF EACH PARTY.

 

13.18       SEVERABILITY.  IF ANY PROVISION OF THIS AGREEMENT, THE NOTES, OR ANY
OF THE OTHER LOAN DOCUMENTS SHALL BE HELD INVALID UNDER ANY APPLICABLE LAWS,
SUCH INVALIDITY SHALL NOT AFFECT ANY OTHER PROVISION OF THIS AGREEMENT OR SUCH
OTHER INSTRUMENT OR AGREEMENT THAT CAN BE GIVEN EFFECT WITHOUT THE INVALID
PROVISION, AND, TO THIS END, THE PROVISIONS HEREOF ARE SEVERABLE.

 

13.19       HEADINGS.  THE SECTION AND PARAGRAPH HEADINGS HEREOF ARE INSERTED
FOR CONVENIENCE OF REFERENCE ONLY, AND SHALL NOT ALTER, DEFINE, OR BE USED IN
CONSTRUING THE TEXT OF SUCH SECTIONS AND PARAGRAPHS.

 

13.20       COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED IN ANY NUMBER OF
COUNTERPARTS, EACH OF WHICH SHALL BE DEEMED TO BE AN ORIGINAL, BUT ALL OF WHICH
TOGETHER SHALL CONSTITUTE BUT ONE AND THE SAME INSTRUMENT.

 

13.21       SEAL.  THIS AGREEMENT IS INTENDED TO TAKE EFFECT AS AN INSTRUMENT
UNDER SEAL.

 

ARTICLE XIV

 

14.           SUBMISSION TO JURISDICTION, GOVERNING LAW AND NOTICES

 

14.1         NOTICES.  ANY NOTICES OR CONSENTS REQUIRED OR PERMITTED BY THIS
AGREEMENT SHALL BE IN WRITING AND SHALL BE DEEMED DELIVERED IF DELIVERED IN
PERSON OR IF SENT BY CERTIFIED MAIL, POSTAGE PREPAID, RETURN RECEIPT REQUESTED,
OR BY NATIONALLY RECOGNIZED OVERNIGHT COURIER (SUCH AS FEDERAL EXPRESS), AS
FOLLOWS, UNLESS SUCH ADDRESS IS CHANGED BY WRITTEN NOTICE HEREUNDER:

 

(A)          IF TO BORROWERS:

 

KMG Chemicals, Inc.

10611 Harwin Drive, Suite 402

Houston, Texas  77036-1534

Attention:  Mr. John V. Sobchak

 

KMG-Bernuth, Inc.

10611 Harwin Drive, Suite 402

Houston, Texas  77036-1534

Attention:  Mr. John V. Sobchak

 

KMG Electronic Chemicals, Inc.

10611 Harwin Drive, Suite 402

Houston, Texas  77036-1534

Attention:  Mr. John V. Sobchak

 

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with a copy to:

 

Joseph Vilardo, Esq.

Haynes and Boone, LLP

One Houston Center

1221 McKinney, Suite 2100

Houston, Texas  77010

 

(B)           IF TO WACHOVIA (WHETHER AS A LENDER, AGENT OR COLLATERAL AGENT):

 

Wachovia Bank, National Association

P.O. Box 2554

Birmingham, Alabama  35290

Mail Code:  AL0028

 

with a copy to:

 

Ray D. Gibbons, Esq.

Burr & Forman LLP

420 North 20th Street

Suite 3400

Birmingham, Alabama  35203

 

(C)           IF TO LENDERS (OTHER THAN WACHOVIA):

 

Bank of America, N.A.

700 Louisiana, 7th Floor

Houston, Texas  77002

Attention: Adam Rose

 

The Prudential Insurance Company of America

c/o Prudential Capital Group

2200 Ross Avenue, Suite 4200E

Dallas, Texas  75201

Attention:  Brian N. Thomas

 

Pruco Life Insurance Company

c/o Prudential Capital Group

2200 Ross Avenue, Suite 4200E

Dallas, Texas  75201

Attention:  Brian N. Thomas

 

and with a copy to Agent:

 

Wachovia Bank, National Association

P.O. Box 2554

Birmingham, Alabama  35290

Mail Code:  AL0028

 

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with a copy to:

 

Ray D. Gibbons, Esq.

Burr & Forman LLP

420 North 20th Street

Suite 3400

Birmingham, Alabama  35203

 

14.2         GOVERNING LAW.  THIS AGREEMENT IS ENTERED INTO AND PERFORMABLE IN
JEFFERSON COUNTY, ALABAMA, AND THE SUBSTANTIVE LAWS, WITHOUT GIVING EFFECT TO
PRINCIPLES OF CONFLICT OF LAWS, OF THE UNITED STATES AND THE STATE OF ALABAMA
SHALL GOVERN THE CONSTRUCTION OF THIS AGREEMENT AND THE DOCUMENTS EXECUTED AND
DELIVERED PURSUANT HERETO, AND THE RIGHTS AND REMEDIES OF THE PARTIES HERETO AND
THERETO, EXCEPT TO THE EXTENT THAT THE UNIFORM COMMERCIAL CODE OR OTHER
APPLICABLE LAW REQUIRES THAT THE PERFECTION, THE EFFECT OF PERFECTION OR
NON-PERFECTION, THE PRIORITY OF COLLATERAL AGENT’S LIEN, OR THE ENFORCEMENT OF
CERTAIN OF COLLATERAL AGENT’S REMEDIES WITH RESPECT TO THE COLLATERAL, BE
GOVERNED BY THE LAWS OF ANOTHER JURISDICTION.

 

14.3         SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL, ETC.

 

(A)          BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY:

 

(1)           SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT, OR FOR RECOGNITION AND ENFORCEMENT OF ANY
JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE
COURTS OF THE STATE OF ALABAMA, THE COURTS OF THE UNITED STATES OF AMERICA FOR
THE NORTHERN DISTRICT OF ALABAMA, AND APPELLATE COURTS FROM ANY THEREOF;

 

(2)           CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH
COURTS, AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE
OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR
PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM
THE SAME;

 

(3)           AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING
MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR
ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO BORROWER AT ITS
ADDRESS SET FORTH IN THIS AGREEMENT OR AT SUCH OTHER ADDRESS OF WHICH AGENT
SHALL HAVE BEEN NOTIFIED PURSUANT THERETO; AND

 

(4)           AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT
TO SUE IN ANY OTHER JURISDICTION.

 

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(B)           EACH OF BORROWER AND LENDER PARTY HEREBY:

 

(1)           IRREVOCABLY AND UNCONDITIONALLY WAIVES THE RIGHT TO A TRIAL BY
JURY IN ANY ACTION OR PROCEEDING OR COUNTERCLAIM OF ANY TYPE AS TO ANY MATTER
ARISING DIRECTLY OR INDIRECTLY OUT OF OR WITH RESPECT TO THIS AGREEMENT, THE
NOTES, ANY OF THE OTHER LOAN DOCUMENTS OR ANY OTHER DOCUMENT EXECUTED IN
CONNECTION HEREWITH OR THEREWITH; AND

 

(2)           AGREES THAT ANY OF THEM MAY FILE A COPY OF THIS AGREEMENT WITH ANY
COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED FOR AGREEMENT
AMONG THE PARTIES IRREVOCABLY TO WAIVE TRIAL BY JURY, AND THAT ANY DISPUTE OR
CONTROVERSY OF ANY KIND WHATSOEVER BETWEEN OR AMONG THEM SHALL INSTEAD BE TRIED
IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.

 

* * * * *

 

98

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

 

[SIGNATURE PAGES TO FOLLOW]

 

99

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SIGNATURE PAGES - BORROWERS

 

 

 

KMG CHEMICALS, INC.

 

 

 

 

 

 

 

By:

 

 

Its:

 

 

 

 

 

KMG-BERNUTH, INC.

 

 

 

 

 

 

 

By:

 

 

Its:

 

 

 

 

 

KMG ELECTRONIC CHEMICALS, INC.

 

 

 

 

 

 

 

By:

 

 

Its:

 

 

100

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SIGNATURE PAGE - WACHOVIA

 

 

WACHOVIA BANK, NATIONAL

 

ASSOCIATION,

 

as Agent, Collateral Agent,

 

Lender and Issuing Lender

 

 

 

 

 

 

 

By:

 

 

Its:

 

 

Instructions for Wire Transfers to Agent:

 

Wachovia Bank, National Association

Charlotte, NC

ABA Number:  053 000 219

Account Number:  01459670001944

Account Name:  Agency Svcs Synd Clearing

Payment Details:  KMG Chemicals

 

101

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SIGNATURE PAGE – BANK OF AMERICA

 

 

BANK OF AMERICA, N.A., as a Lender

 

 

 

 

 

 

 

By:

 

 

Its:

 

 

102

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SIGNATURE PAGE – THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

 

 

THE PRUDENTIAL INSURANCE

 

COMPANY OF AMERICA, as a Lender

 

 

 

 

 

 

 

By:

 

 

Its:

 

 

103

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SIGNATURE PAGE – PRUCO LIFE INSURANCE COMPANY

 

 

PRUCO LIFE INSURANCE COMPANY,

 

as a Lender

 

 

 

 

 

 

 

By:

 

 

Its:

 

 

104

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