EXHIBIT 10.1

 

 

 

 

LOGO [g107138ex10_1covpg1.jpg]

CREDIT AGREEMENT

dated as of

December 2, 2015

among

Graham Corporation,

the Loan Parties Party Hereto,

The Lenders Party Hereto

and

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

 

 

J.P. MORGAN SECURITIES LLC,

as Sole Bookrunner and Sole Lead Arranger

 

 

 

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TABLE OF CONTENTS

 

         Page  

ARTICLE I.  Definitions

     1   

SECTION 1.01.  Defined Terms

     1   

SECTION 1.02.  Classification of Loans and Borrowings

     23   

SECTION 1.03.  Terms Generally

     23   

SECTION 1.04.  Accounting Terms; GAAP

     24   

SECTION 1.05.  Pro Forma Adjustments for Acquisitions and Dispositions

     24   

SECTION 1.06.  Status of Obligations

     24   

ARTICLE II.  The Credits

     25   

SECTION 2.01.  Revolving Commitments

     25   

SECTION 2.02.  Loans and Borrowings

     25   

SECTION 2.03.  Requests for Borrowings

     26   

SECTION 2.05.  Swingline Loans

     26   

SECTION 2.06.  Letters of Credit

     27   

SECTION 2.07.  Funding of Borrowings

     33   

SECTION 2.08.  Interest Elections

     33   

SECTION 2.09.  Termination and Reduction of Commitments; Increase in Revolving
Commitments

     34   

SECTION 2.10.  Repayment and Amortization of Loans; Evidence of Debt

     36   

SECTION 2.11.  Prepayment of Loans

     37   

SECTION 2.12.  Fees

     38   

SECTION 2.13.  Interest

     39   

SECTION 2.14.  Alternate Rate of Interest

     40   

SECTION 2.15.  Increased Costs

     40   

SECTION 2.16.  Break Funding Payments

     41   

SECTION 2.17.  Taxes

     42   

SECTION 2.18.  Payments Generally; Allocation of Proceeds; Sharing of Set-offs

     45   

SECTION 2.19.  Mitigation Obligations; Replacement of Lenders

     47   

SECTION 2.20.  Defaulting Lenders

     48   

SECTION 2.21.  Returned Payments

     49   

SECTION 2.22.  Banking Services and Swap Agreements

     50   

ARTICLE III.  Representations and Warranties

     50   

SECTION 3.01.  Organization; Powers

     50   

SECTION 3.02.  Authorization; Enforceability

     50   

SECTION 3.03.  Governmental Approvals; No Conflicts

     50   

SECTION 3.04.  Financial Condition; No Material Adverse Change

     51   

SECTION 3.05.  Properties

     51   

SECTION 3.06.  Litigation and Environmental Matters

     51   

SECTION 3.07.  Compliance with Laws and Agreements; No Default

     52   

SECTION 3.08.  Investment Company Status

     52   

SECTION 3.09.  Taxes

     52   

SECTION 3.10.  ERISA

     52   

SECTION 3.11.  Disclosure

     52   

SECTION 3.12.  Material Agreements

     52   

SECTION 3.13.  Solvency

     53   

SECTION 3.14.  Insurance

     53   

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SECTION 3.15.  Capitalization and Subsidiaries

     53   

SECTION 3.16.  Security Interest in Collateral

     53   

SECTION 3.17.  Employment Matters

     53   

SECTION 3.18.  Federal Reserve Regulations

     54   

SECTION 3.19.  Use of Proceeds

     54   

SECTION 3.20.  No Burdensome Restrictions

     54   

SECTION 3.21.  Anti-Corruption Laws and Sanctions

     54   

ARTICLE IV.  Conditions

     54   

SECTION 4.01.  Effective Date

     54   

SECTION 4.02.  Each Credit Event

     56   

ARTICLE V.  Affirmative Covenants

     57   

SECTION 5.01.  Financial Statements; Borrowing Base and Other Information

     57   

SECTION 5.02.  Notices of Material Events

     59   

SECTION 5.03.  Existence; Conduct of Business

     59   

SECTION 5.04.  Payment of Obligations

     60   

SECTION 5.05.  Maintenance of Properties

     60   

SECTION 5.06.  Books and Records; Inspection Rights

     60   

SECTION 5.07.  Compliance with Laws and Material Contractual Obligations

     60   

SECTION 5.08.  Use of Proceeds

     60   

SECTION 5.09.  Accuracy of Information

     61   

SECTION 5.10.  Insurance

     61   

SECTION 5.11.  Appraisals

     61   

SECTION 5.12.  Casualty and Condemnation

     61   

SECTION 5.13.  Depository Banks

     62   

SECTION 5.14.  Additional Collateral; Further Assurances

     62   

SECTION 5.15.  Post-Closing Covenants

     63   

ARTICLE VI.  Negative Covenants

     63   

SECTION 6.01.  Indebtedness

     63   

SECTION 6.02.  Liens

     65   

SECTION 6.03.  Fundamental Changes

     66   

SECTION 6.04.  Investments, Loans, Advances, Guarantees and Acquisitions

     66   

SECTION 6.05.  Asset Sales

     67   

SECTION 6.06.  Sale and Leaseback Transactions

     68   

SECTION 6.07.  Swap Agreements

     68   

SECTION 6.08.  Restricted Payments; Certain Payments of Indebtedness

     68   

SECTION 6.09.  Transactions with Affiliates

     69   

SECTION 6.10.  Restrictive Agreements

     69   

SECTION 6.11.  Amendment of Material Documents

     70   

SECTION 6.12.  Financial Covenants

     70   

ARTICLE VII.  Events of Default

     70   

ARTICLE VIII.  The Administrative Agent

     73   

SECTION 8.01.  Appointment

     73   

SECTION 8.02.  Rights as a Lender

     73   

SECTION 8.03.  Duties and Obligations

     73   

SECTION 8.04.  Reliance

     74   

SECTION 8.05.  Actions through Sub-Agents

     74   

SECTION 8.06.  Resignation

     74   

SECTION 8.07.  Non-Reliance

     75   

SECTION 8.08.  Not Partners or Co-Venturers; Administrative Agent as
Representative of the Secured Parties

     76   

 

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ARTICLE IX.  Miscellaneous

     76   

SECTION 9.01.  Notices

     76   

SECTION 9.02.  Waivers; Amendments

     78   

SECTION 9.03.  Expenses; Indemnity; Damage Waiver

     80   

SECTION 9.04.  Successors and Assigns

     82   

SECTION 9.05.  Survival

     86   

SECTION 9.06.  Counterparts; Integration; Effectiveness; Electronic Execution

     86   

SECTION 9.07.  Severability

     86   

SECTION 9.08.  Right of Setoff

     87   

SECTION 9.09.  Governing Law; Jurisdiction; Consent to Service of Process

     87   

SECTION 9.10.  WAIVER OF JURY TRIAL

     87   

SECTION 9.11.  Headings

     88   

SECTION 9.12.  Confidentiality

     88   

SECTION 9.13.  Several Obligations; Nonreliance; Violation of Law

     89   

SECTION 9.14.  USA PATRIOT Act

     89   

SECTION 9.15.  Disclosure

     89   

SECTION 9.16.  Appointment for Perfection

     89   

SECTION 9.17.  Interest Rate Limitation

     89   

SECTION 9.18.  Marketing Consent

     90   

ARTICLE X.  Loan Guaranty

     90   

SECTION 10.01.  Guaranty

     90   

SECTION 10.02.  Guaranty of Payment

     90   

SECTION 10.03.  No Discharge or Diminishment of Loan Guaranty

     90   

SECTION 10.04.  Defenses Waived

     91   

SECTION 10.05.  Rights of Subrogation

     91   

SECTION 10.06.  Reinstatement; Stay of Acceleration

     91   

SECTION 10.07.  Information

     92   

SECTION 10.08.  Termination

     92   

SECTION 10.09.  Taxes

     92   

SECTION 10.10.  Maximum Liability

     92   

SECTION 10.11.  Contribution

     92   

SECTION 10.12.  Liability Cumulative

     93   

SECTION 10.13.  Keepwell

     93   

SCHEDULES:

 

Commitment Schedule

Schedule 3.05 – Properties, etc.

Schedule 3.06 – Disclosed Matters

Schedule 3.14 – Insurance

Schedule 3.15 – Capitalization and Subsidiaries

Schedule 5.13 – Existing Standby Letters of Credit

Schedule 6.01 – Existing Indebtedness

Schedule 6.02 – Existing Liens

Schedule 6.04 – Existing Investments

Schedule 6.10 – Existing Restrictions

EXHIBITS:

 

Exhibit A – Assignment and Assumption

 

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Exhibit B – Opinion of Counsel for the Loan Parties

Exhibit C-1 – U.S.

 

Tax Compliance Certificate (For Foreign Lenders That Are Not Partnerships For
U.S. Federal Income Tax Purposes)

Exhibit C-2 – U.S.

 

Tax Compliance Certificate (For Foreign Participants That Are Not Partnerships
For U.S. Federal Income Tax Purposes)

Exhibit C-3 – U.S.

 

Tax Compliance Certificate (For Foreign Participants That Are Partnerships For
U.S. Federal Income Tax Purposes)

Exhibit C-4 – U.S.

 

Tax Compliance Certificate (For Foreign Lenders That Are Partnerships For U.S.
Federal Income Tax Purposes)

Exhibit D – Compliance Certificate

Exhibit E – Joinder Agreement

 

iv

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CREDIT AGREEMENT dated as of December 2, 2015 (as it may be amended or modified
from time to time, this “Agreement”), among Graham Corporation, a Delaware
corporation, as Borrower, the other Loan Parties party hereto, the Lenders party
hereto, and JPMORGAN CHASE BANK, N.A., as Administrative Agent.

The parties hereto agree as follows:

ARTICLE I

Definitions

SECTION 1.01. Defined Terms. As used in this Agreement, the following terms have
the meanings specified below:

“Account” has the meaning assigned to such term in the Security Agreement.

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

“Acquisition” means the purchase by a Loan Party of all or substantially all of
the assets or Equity Interests of a Person or division or line of business of a
Person.

“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any
Interest Period or for any CBFR Borrowing, an interest rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for
such Interest Period multiplied by (b) the Statutory Reserve Rate.

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

“Administrative Agent” means JPMorgan Chase Bank, N.A., in its capacity as
administrative agent for the Lenders hereunder.

“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.

“Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the specified Person.

“Agency Site” means the Electronic System established by the Administrative
Agent to administer this Agreement.

“Aggregate Credit Exposure” means, at any time, the aggregate Credit Exposure of
all the Lenders at such time.

“Aggregate Revolving Exposure” means, at any time, the aggregate Revolving
Exposure of all the Lenders at such time (with the Swingline Exposure of each
Lender calculated assuming that all of the Lenders have funded their
participations in all Swingline Loans outstanding at such time).

 

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

“Applicable LC Rate” means, for any day, with respect to the outstanding undrawn
amount of each Letter of Credit, payable quarterly in arrears, the applicable
rate per annum set forth below under the caption “Applicable LC Rate Not Cash
Collateralized” or “Applicable LC Rate Cash/Cash Equivalents Collateralized”, as
the case may be, based upon the Borrower’s Funded Indebtedness to EBITDA Ratio
as of the most recent determination date, provided that until the delivery to
the Administrative Agent, pursuant to Section 5.01, of the Borrower’s
consolidated financial information for the Borrower’s first fiscal quarter
ending after the Effective Date, the “Applicable LC Rate” shall be the
applicable rates per annum set forth below in Category 1:

 

Funded Indebtedness

to EBITDA

Ratio

  

Applicable LC

Rate Not Cash

Collateralized

  

Applicable LC

Rate Cash/Cash

Equivalents

Collateralized

Category 1

> 3.00 to 1.0

   120 bps    40 bps

Category 2

< 3.00 to 1.0 but

> 2.00 to 1.0

   95 bps    40 bps

Category 3

< 2.00 to 1.0 but

> 1.00 to 1.0

   80 bps    40 bps

Category 4

< 1.00 to 1.0

   70 bps    40 bps

“Applicable Percentage” means, at any time with respect to any Lender, a
percentage equal to a fraction the numerator of which is such Lender’s Revolving
Commitment at such time and the denominator of which is the aggregate Revolving
Commitments at such time (provided that, if the Revolving Commitments have
terminated or expired, the Applicable Percentages shall be determined based upon
such Lender’s share of the Aggregate Revolving Exposure at such time); provided
that, in accordance with Section 2.20, so long as any Lender shall be a
Defaulting Lender, such Defaulting Lender’s Commitment shall be disregarded in
the calculations above.

“Applicable Rate” means, for any day, with respect to any Loan, or with respect
to the Commitment Fees payable hereunder, as the case may be, the applicable
rate per annum set forth below under the caption “Revolving Commitment CBFR
Spread”, “Revolving Commitment Spread” or “Commitment Fee”, as the case may be,
based upon the Borrower’s Funded Indebtedness to EBITDA Ratio as of the most
recent determination date, provided that until the delivery to the
Administrative Agent, pursuant to Section 5.01, of the Borrower’s consolidated
financial information for the Borrower’s first fiscal quarter ending after the
Effective Date, the “Applicable Rate” shall be the applicable rates per annum
set forth below in Category 1:

 

Funded Indebtedness

to EBITDA

Ratio

  

Revolving

Commitment

CBFR Spread

  

Revolving

Commitment

LIBOR Spread

 

  

Commitment

Fee

Category 1

> 3.00 to 1.0

   0    175 bps    30 bps

Category 2

< 3.00 to 1.0 but

> 2.00 to 1.0

   0    150 bps    25 bps

Category 3

< 2.00 to 1.0 but

> 1.00 to 1.0

   0    120 bps    20 bps

Category 4

< 1.00 to 1.0

   0    95 bps    20 bps

 

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For purposes of the foregoing, (a) the Applicable Rate shall be determined as of
the end of each fiscal quarter of the Borrower, based upon the Borrower’s annual
or quarterly consolidated financial statements delivered pursuant to
Section 5.01 and (b) each change in the Applicable Rate resulting from a change
in the Funded Indebtedness to EBITDA Ratio shall be effective during the period
commencing on and including the date of delivery to the Administrative Agent of
such consolidated financial statements indicating such change and ending on the
date immediately preceding the effective date of the next such change, provided
that (A) at any time that an Event of Default has occurred and is continuing or
(B) at the option of the Administrative Agent or at the request of the Required
Lenders, if the Borrower fails to deliver the annual or quarterly consolidated
financial statements required to be delivered by it pursuant to Section 5.01,
the Funded Indebtedness to EBITDA Ratio shall be deemed to be in Category 1
during the period from the expiration of the time for delivery thereof until
such consolidated financial statements are delivered.

If at any time the Administrative Agent determines that the financial statements
upon which the Applicable Rate was determined were incorrect (whether based on a
restatement, fraud or otherwise), the Borrower shall be required to
retroactively pay any additional amount that the Borrower would have been
required to pay if such financial statements had been accurate at the time they
were delivered.

“Approved Fund” has the meaning assigned to the term in Section 9.04(b).

“Assignment and Assumption” means an assignment and assumption agreement entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.04), and accepted by the Administrative Agent, in the form
of Exhibit A or any other form approved by the Administrative Agent.

“Availability” means, at any time, an amount equal to (a) the aggregate
Revolving Commitments minus (b) the Aggregate Revolving Exposure (calculated,
with respect to any Defaulting Lender, as if such Defaulting Lender had funded
its Applicable Percentage of all outstanding Borrowings).

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

“Bank Guarantee” means a Guarantee issued by an Issuing Bank.

“Bank Guarantee Exposure” means, at any time, the aggregate amount of any and
all outstanding Bank Guarantees.

“Bank Guarantee Payment” means any payment made by an Issuing Bank pursuant to a
Bank Guarantee.

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

 

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“Banking Services Obligations” means any and all obligations of the Loan Parties
or their Subsidiaries, whether absolute or contingent and howsoever and
whensoever created, arising, evidenced or acquired (including all renewals,
extensions and modifications thereof and substitutions therefor) in connection
with Banking Services.

“Bankruptcy Event” means, with respect to any Person, when such Person becomes
the subject of a bankruptcy or insolvency proceeding, or has had a receiver,
conservator, trustee, administrator, custodian, assignee for the benefit of
creditors or similar Person charged with the reorganization or liquidation of
its business, appointed for it, or, in the good faith exercise of the business
judgment of the Administrative Agent, has taken any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any such proceeding
or appointment, provided that a Bankruptcy Event shall not result solely by
virtue of any ownership interest, or the acquisition of any ownership interest,
in such Person by a Governmental Authority or instrumentality thereof, unless
such ownership interest results in or provides such Person with immunity from
the jurisdiction of courts within the U.S. or from the enforcement of judgments
or writs of attachment on its assets or permits such Person (or such
Governmental Authority or instrumentality) to reject, repudiate, disavow or
disaffirm any contracts or agreements made by such Person.

“Beneficial Owner” means, with respect to any U.S. federal withholding Tax, the
beneficial owner, for U.S. federal income tax purposes, to whom such Tax
relates.

“Board” means the Board of Governors of the Federal Reserve System of the U.S.

“Borrower” means Graham Corporation, a Delaware corporation.

“Borrowing” means any (a) Revolving Loans of the same Type, made, converted or
continued on the same date and, in the case of Eurodollar Loans, as to which a
single Interest Period is in effect or (b) a Swingline Loan.

“Borrowing Request” means a request by the Borrower for a Borrowing in
accordance with Section 2.03.

“Burdensome Restrictions” means any consensual encumbrance or restriction of the
type described in clause (a) or (b) of Section 6.10.

“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed; provided that, when used in connection with a Eurodollar Loan,
the term “Business Day” shall also exclude any day on which banks are not open
for general business in London.

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

“Capital Lease Obligations” of any Person means the obligations of such Person
to pay rent or other amounts under any lease of (or other arrangement conveying
the right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
a balance sheet of such Person under GAAP, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP.

 

4

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

“CBFR”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, bear interest at a rate determined
by reference to the CB Floating Rate.

“Change in Control” means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the SEC
thereunder as in effect on the date hereof) of Equity Interests representing
more than 30% of the aggregate ordinary voting power represented by the issued
and outstanding Equity Interests of the Borrower; (b) occupation of a majority
of the seats (other than vacant seats) on the board of directors of the Borrower
by Persons who were neither (i) nominated by the board of directors of the
Borrower nor (ii) appointed by directors so nominated.

“Change in Law” means the occurrence after the date of this Agreement (or, with
respect to any Lender, such later date on which such Lender becomes a party to
this Agreement) of any of the following: (a) the adoption of or taking effect of
any law, rule, regulation or treaty, (b) any change in any law, rule, regulation
or treaty or in the administration, interpretation or application thereof by any
Governmental Authority or (c) compliance by any Lender or the Issuing Bank (or,
for purposes of Section 2.15(b), by any lending office of such Lender or by such
Lender’s or the Issuing Bank’s holding company, if any) with any request,
guideline, requirement or directive (whether or not having the force of law) of
any Governmental Authority made or issued after the date of this Agreement;
provided that, notwithstanding anything herein to the contrary, (x) the
Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests,
rules, guidelines, requirements or directives thereunder or issued in connection
therewith or in the implementation thereof, and (y) all requests, rules,
guidelines, requirements or directives promulgated by the Bank for International
Settlements, the Basel Committee on Banking Supervision (or any successor or
similar authority) or the U.S. or foreign regulatory authorities, in each case
pursuant to Basel III, shall in each case be deemed to be a “Change in Law”,
regardless of the date enacted, adopted, issued or implemented.

“Charges” has the meaning assigned to such term in Section 9.17.

“Chase” means JPMorgan Chase Bank, N.A., a national banking association, in its
individual capacity, and its successors.

“Class”, when used in reference to (a) any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are Revolving Loans or
Swingline Loans, and (b) any Lender, refers to whether such Lender has a Loan or
Commitment of a particular Class.

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

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

 

5

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“Collateral Access Agreement” has the meaning assigned to such term in the
Security Agreement.

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

“Commercial LC Exposure” means, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding commercial (or documentary) Letters of Credit
plus (b) the aggregate amount of all LC Disbursements relating to commercial
Letters of Credit that have not yet been reimbursed by or on behalf of the
Borrower. The Commercial LC Exposure of any Revolving Lender at any time shall
be its Applicable Percentage of the aggregate Commercial LC Exposure at such
time.

“Commitment” means, with respect to each Lender, such Lender’s Revolving
Commitment. The initial amount of each Lender’s Commitment is set forth on the
Commitment Schedule, or in the Assignment and Assumption pursuant to which such
Lender shall have assumed its Commitment, as applicable.

“Commitment Fees” means the fees to be paid by the Borrower to the
Administrative Agent in accordance with Section 2.12(a).

“Commitment Schedule” means the Schedule attached hereto identified as such.

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et
seq.), as amended from time to time, and any successor statute.

“Communications” has the meaning assigned to such term in Section 9.01(d).

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

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

“Credit Exposure” means, as to any Lender at any time, such Lender’s Revolving
Exposure at such time.

“Credit Party” means the Administrative Agent, the Issuing Bank, the Swingline
Lender or any other Lender.

“Default” means any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.

 

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“Defaulting Lender” means any Lender that (a) has failed, within two Business
Days of the date required to be funded or paid, to (i) fund any portion of its
Loans, (ii) fund any portion of its participations in Letters of Credit or
Swingline Loans or (iii) pay over to any Credit Party any other amount required
to be paid by it hereunder, unless, in the case of clause (i) above, such Lender
notifies the Administrative Agent in writing that such failure is the result of
such Lender’s good faith determination that a condition precedent to funding
(specifically identified and including the particular default, if any) has not
been satisfied, (b) has notified the Borrower or any Credit Party in writing, or
has made a public statement to the effect, that it does not intend or expect to
comply with any of its funding obligations under this Agreement (unless such
writing or public statement indicates that such position is based on such
Lender’s good faith determination that a condition precedent (specifically
identified and including the particular default, if any) to funding a Loan under
this Agreement cannot be satisfied) or generally under other agreements in which
it commits to extend credit, (c) has failed, within three Business Days after
request by a Credit Party, acting in good faith, to provide a certification in
writing from an authorized officer of such Lender that it will comply with its
obligations (and is financially able to meet such obligations) to fund
prospective Loans and participations in then outstanding Letters of Credit and
Swingline Loans under this Agreement, provided that such Lender shall cease to
be a Defaulting Lender pursuant to this clause (c) upon such Credit Party’s
receipt of such certification in form and substance satisfactory to it and the
Administrative Agent, or (d) has become the subject of a Bankruptcy Event.

“Disclosed Matters” means the actions, suits, proceedings and environmental
matters disclosed in Schedule 3.06.

“Document” has the meaning assigned to such term in the Security Agreement.

“dollars” or “$” refers to lawful money of the U.S.

“Domestic Subsidiary” means any Subsidiary that is organized under the Laws of
any state of the United States or the District of Columbia.

“EBIT” means, for any period, Net Income for such period plus (a) without
duplication and to the extent deducted in determining Net Income for such
period, the sum of (i) Interest Expense for such period, (ii) income tax expense
for such period net of tax refunds, (iii) any extraordinary non-cash charges for
such period and (iv) any other non-cash charges for such period (but excluding
any non-cash charge in respect of an item that was included in Net Income in a
prior period and any non-cash charge that relates to the write-down or write-off
of inventory), minus (b) without duplication and to the extent included in Net
Income, (i) any cash payments made during such period in respect of non-cash
charges described in clause (a)(v) taken in a prior period and (ii) any
extraordinary gains and any non-cash items of income for such period, all
calculated for the Borrower and its Subsidiaries on a consolidated basis in
accordance with GAAP.

“EBITDA” means, for any period, Net Income for such period plus (a) without
duplication and to the extent deducted in determining Net Income for such
period, the sum of (i) Interest Expense for such period, (ii) income tax expense
for such period net of tax refunds, (iii) all amounts attributable to
depreciation and amortization expense for such period, (iv) any extraordinary
non-cash charges for such period and (v) any other non-cash charges for such
period (but excluding any non-cash charge in respect of an item that was
included in Net Income in a prior period and any non-cash charge that relates to
the write-down or write-off of inventory), minus (b) without duplication and to
the extent included in Net Income, (i) any cash payments made during such period
in respect of non-cash charges described in clause (a)(v) taken in a prior
period and (ii) any extraordinary gains and any non-cash items of income for
such period, all calculated for the Borrower and its Subsidiaries on a
consolidated basis in accordance with GAAP.

 

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

“Effective Date” means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).

“Electronic Signature” means an electronic sound, symbol, or process attached
to, or associated with, a contract or other record and adopted by a Person with
the intent to sign, authenticate or accept such contract or record.

“Electronic System” means any electronic system, including e-mail, e-fax,
Intralinks®, ClearPar®, Debt Domain, Syndtrak and any other Internet or
extranet-based site, whether such electronic system is owned, operated or hosted
by the Administrative Agent and the Issuing Bank and any of its respective
Related Parties or any other Person, providing for access to data protected by
passcodes or other security system.

“Environmental Laws” means all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to the environment, preservation or reclamation of natural resources, the
management, Release or threatened Release of any Hazardous Material or to health
and safety matters.

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

“Equipment” has the meaning assigned to such term in the Security Agreement.

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

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.

“ERISA Affiliate” means any trade or business (whether or not incorporated)
that, together with the Borrower, is treated as a single employer under
Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of
ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of
ERISA or the regulations issued thereunder, with respect to a Plan (other than
an event for which the 30-day notice

 

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period is waived); (b) the failure to satisfy the “minimum funding standard” (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(c) of the Code or Section 302(c)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by the Borrower or any ERISA Affiliate
of any liability under Title IV of ERISA as a result of the termination of any
Plan; (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a
plan administrator of any notice indicating an intention to terminate any Plan
or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by
the Borrower or any ERISA Affiliate of any liability with respect to the
withdrawal or partial withdrawal of the Borrower or any ERISA Affiliate from any
Plan or Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA
Affiliate of any notice, or the receipt by any Multiemployer Plan from the
Borrower or any ERISA Affiliate of any notice, concerning the imposition upon
the Borrower or any ERISA Affiliate of Withdrawal Liability or a determination
that a Multiemployer Plan is, or is expected to be, insolvent or in
reorganization, within the meaning of Title IV of ERISA.

“ES Acquisition Subsidiary” means ES Acquisition Corp., a Delaware corporation.

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

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

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

“Excluded Taxes” means any of the following Taxes imposed on or with respect to
a Recipient or required to be withheld or deducted from a payment to a
Recipient: (a) Taxes imposed on or measured by net income (however denominated),
franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result
of such Recipient being organized under the laws of, or having its principal
office or, in the case of any Lender, its applicable lending office located in,
the jurisdiction imposing such Tax (or any political subdivision thereof) or
(ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal
withholding Taxes imposed on amounts payable to or for the account of such
Lender with respect to an applicable interest in a Loan, Letter of Credit or
Commitment pursuant to a law in effect on the date on which (i) such Lender
acquires such interest in the Loan, Letter of Credit or Commitment (other than
pursuant to an assignment request by the Borrower under Section 2.19(b)) or
(ii) such Lender changes its lending office, except in each case to the extent
that, pursuant to Section 2.17, amounts with respect to such Taxes were payable
either to such Lender’s assignor immediately before such Lender acquired the
applicable interest in a Loan, Letter of Credit or Commitment or to such Lender
immediately before it changed its lending office, (c) Taxes attributable to such
Recipient’s failure to comply with Section 2.17(f) and (d) any U.S. federal
withholding Taxes imposed under FATCA.

“FATCA” means Sections 1471 through 1474 of the Code as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future
regulations or official interpretations thereof and any agreement entered into
pursuant to Section 1471(b)(1) of the Code.

 

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“Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average (rounded upwards, if necessary, to
the next 1/100 of 1%) of the quotations for such day for such transactions
received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by it; provided, that, if the Federal Funds
Effective Rate shall be less than zero, such rate shall be deemed to be zero for
purposes of this Agreement.

“Financial Officer” means the chief financial officer, principal accounting
officer, treasurer or controller of the Borrower.

“Financial Statements” has the meaning assigned to such term in Section 5.01.

“Fixtures” has the meaning assigned to such term in the Security Agreement.

“Foreign Lender” means (a) if the Borrower is a U.S. Person, a Lender that is
not a U.S. Person, and (b) if the Borrower is not a U.S. Person, a Lender that
is resident or organized under the laws of a jurisdiction other than that in
which the Borrower is resident for tax purposes.

“Foreign Subsidiary” means any Subsidiary which is not a Domestic Subsidiary.

“Funded Indebtedness” means, all outstanding Indebtedness for borrowed money and
other interest-bearing liabilities, including current and long term
Indebtedness.

“Funded Indebtedness to EBITDA Ratio” means, at any date, the ratio of
(a) Funded Indebtedness for such date to (b) EBITDA for the period of four
fiscal quarters ended on or most recently prior to such date.

“Funding Account” has the meaning assigned to such term in Section 4.01(h).

“GAAP” means generally accepted accounting principles in the U.S.

“Governmental Authority” means the government of the U.S., any other nation or
any political subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.

“Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the “primary obligor”) in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.

 

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“Guaranteed Obligations” has the meaning assigned to such term in Section 10.01.

“Guarantors” means all Loan Guarantors and all non-Loan Parties who have
delivered an Obligation Guaranty, and the term “Guarantor” means each or any one
of them individually.

“Hazardous Materials” means: (a) any substance, material, or waste that is
included within the definitions of “hazardous substances,” “hazardous
materials,” “hazardous waste,” “toxic substances,” “toxic materials,” “toxic
waste,” or words of similar import in any Environmental Law; (b) those
substances listed as hazardous substances by the United States Department of
Transportation (or any successor agency) (49 C.F.R. 172.101 and amendments
thereto) or by the Environmental Protection Agency (or any successor agency) (40
C.F.R. Part 302 and amendments thereto); and (c) any substance, material, or
waste that is petroleum, petroleum-related, or a petroleum by-product, asbestos
or asbestos-containing material, polychlorinated biphenyls, flammable,
explosive, radioactive, freon gas, radon, or a pesticide, herbicide, or any
other agricultural chemical.

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

“Inactive Subsidiary” means Graham Indonesia, Inc., a Delaware corporation.

“Indebtedness” of any Person means, without duplication, (a) all obligations of
such Person for borrowed money or with respect to deposits or advances of any
kind, (b) all obligations of such Person evidenced by bonds, debentures, notes
or similar instruments, (c) all obligations of such Person upon which interest
charges are customarily paid, (d) all obligations of such Person under
conditional sale or other title retention agreements relating to property
acquired by such Person, (e) all obligations of such Person in respect of the
deferred purchase price of property or services (excluding current accounts
payable incurred in the ordinary course of business), (f) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Indebtedness secured thereby has
been assumed, (g) all Guarantees by such Person of Indebtedness of others,
(h) all Capital Lease Obligations of such Person, (i) all obligations,
contingent or otherwise, of such Person as an account party in respect of
letters of credit and letters of guaranty, (j) all obligations, contingent or
otherwise, of such Person in respect of bankers’ acceptances, (k) obligations
under any liquidated earn-out, (l) any other Off-Balance Sheet Liability and
(m) obligations, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all Swap
Agreements, and (ii) any and all cancellations, buy backs, reversals,
terminations or assignments of any Swap Agreement transaction. The Indebtedness
of any Person shall include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent such Person
is liable therefor as a result of such Person’s ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor.

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any obligation of any Loan
Party under any Loan Document and (b) to the extent not otherwise described in
the foregoing clause (a), Other Taxes.

“Indemnitee” has the meaning assigned to such term in Section 9.03(b).

 

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“Ineligible Institution” has the meaning assigned to such term in
Section 9.04(b).

“Information” has the meaning assigned to such term in Section 9.12.

“Interest Coverage Ratio” means, for any period, the ratio of (a) EBIT for such
period to (b) Interest Expense for such period.

“Interest Expense” means, with reference to any period, total interest expense
(including that attributable to Capital Lease Obligations) of the Borrower and
its Subsidiaries for such period with respect to all outstanding Indebtedness of
the Borrower and its Subsidiaries (including all commissions, discounts and
other fees and charges owed with respect to letters of credit and bankers’
acceptances and net costs under Swap Agreements in respect of interest rates, to
the extent such net costs are allocable to such period in accordance with GAAP),
calculated for the Borrower and its Subsidiaries on a consolidated basis for
such period in accordance with GAAP.

“Interest Election Request” means a request by the Borrower to convert or
continue a Revolving Borrowing in accordance with Section 2.08.

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

“Interest Period” means with respect to any Eurodollar Borrowing, the period
commencing on the date of such Eurodollar Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, or three
months thereafter, as the Borrower may elect; provided that (i) if any Interest
Period would end on a day other than a Business Day, such Interest Period shall
be extended to the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day and (ii) any Interest Period
that commences on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the last calendar month of
such Interest Period) shall end on the last Business Day of the last calendar
month of such Interest Period. For purposes hereof, the date of a Borrowing
initially shall be the date on which such Borrowing is made and thereafter, in
the case of a Revolving Borrowing, shall be the effective date of the most
recent conversion or continuation of such Borrowing.

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

“Inventory” has the meaning assigned to such term in the Security Agreement.

“IRS” means the United States Internal Revenue Service.

 

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“Issuing Bank” means, individually and collectively, each of Chase, in its
capacity as the issuer of Letters of Credit hereunder, and any other Revolving
Lender from time to time designated by the Borrower as an Issuing Bank, with the
consent of such Revolving Lender and the Administrative Agent, and their
respective successors in such capacity as provided in Section 2.06(i). Any
Issuing Bank may, in its discretion, arrange for one or more Letters of Credit
to be issued by its Affiliates, in which case the term “Issuing Bank” shall
include any such Affiliate with respect to Letters of Credit issued by such
Affiliate (it being agreed that such Issuing Bank shall, or shall cause such
Affiliate to, comply with the requirements of Section 2.06 with respect to such
Letters of Credit). At any time there is more than one Issuing Bank, all
singular references to the Issuing Bank shall mean any Issuing Bank, either
Issuing Bank, each Issuing Bank, the Issuing Bank that has issued the applicable
Letter of Credit, or both (or all) Issuing Banks, as the context may require.

“Issuing Bank Sublimits” means, as of the Effective Date, (i) $25,000,000 in the
case of Chase, and (ii) such amount as shall be designated to the Administrative
Agent and the Borrower in writing by an Issuing Bank; provided that any Issuing
Bank shall be permitted at any time to increase or reduce its Issuing Bank
Sublimit upon providing five (5) days’ prior written notice thereof to the
Administrative Agent and the Borrower.

“Joinder Agreement” means a Joinder Agreement in substantially the form of
Exhibit E.

“LC Collateral Account” has the meaning assigned to such term in
Section 2.06(j).

“LC Disbursement” means any payment made by an Issuing Bank pursuant to a Letter
of Credit.

“LC Exposure” means, at any time, the sum of the Commercial LC Exposure, the
Standby LC Exposure and the Bank Guarantee Exposure at such time. The LC
Exposure of any Revolving Lender at any time shall be its Applicable Percentage
of the aggregate LC Exposure at such time.

“Lenders” means the Persons listed on the Commitment Schedule and any other
Person that shall have become a Lender hereunder pursuant to (i) Section 2.09 or
(ii) an Assignment and Assumption, other than any such Person that ceases to be
a Lender hereunder pursuant to an Assignment and Assumption. Unless the context
otherwise requires, the term “Lenders” includes the Swingline Lender and the
Issuing Bank.

“Letters of Credit” means the letters of credit issued pursuant to this
Agreement, and the term “Letter of Credit” means any one of them or each of them
singularly, as the context may require.

“LIBO Rate” means, with respect to any Eurodollar Borrowing for any applicable
Interest Period or for any CBFR Borrowing, the London interbank offered rate as
administered by ICE Benchmark Administration (or any other Person that takes
over the administration of such rate for Dollars) for a period equal in length
to such Interest Period as displayed on pages LIBOR01 or LIBOR02 of the Reuters
screen that displays such rate or, in the event such rate does not appear on a
Reuters page or screen, on any successor or substitute page on such screen that
displays such rate, or on the appropriate page of such other information service
that publishes such rate from time to time as shall be selected by the
Administrative Agent in its reasonable discretion (in each case, the “LIBO
Screen Rate”) at approximately 11:00 a.m., London time, two (2) Business Days
prior to the commencement of such Interest Period; provided that, (x) if the
LIBO Screen Rate shall be less than zero, such rate shall be deemed to be zero
for the purposes of this Agreement and (y) if the LIBO Screen Rate shall not be
available at such time for a period equal in length to such Interest Period (an
“Impacted Interest Period”), then the LIBO Rate shall be the Interpolated Rate
at such time, subject to Section 2.14 in the event that

 

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the Administrative Agent shall conclude that it shall not be possible to
determine such Interpolated Rate (which conclusion shall be conclusive and
binding absent manifest error); provided further, that, if any Interpolated Rate
shall be less than zero, such rate shall be deemed to be zero for purposes of
this Agreement. Notwithstanding the above, to the extent that “LIBO Rate” or
“Adjusted LIBO Rate” is used in connection with a CBFR Borrowing, such rate
shall be determined as modified by the definition of Adjusted One Month LIBOR
Rate.

“LIBO Screen Rate” has the meaning assigned to such term in the definition of
“LIBO Rate”.

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of
such asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.

“Loan Documents” means, collectively, this Agreement, each promissory note
issued pursuant to this Agreement, any Letter of Credit applications, each
Collateral Document, the Loan Guaranty, any Obligation Guaranty, any Guaranty
now or hereafter executed by any Loan Party for the benefit of the
Administrative Agent with respect to the obligations of any Subsidiary and each
other agreement, instrument, document and certificate identified in Section 4.01
executed and delivered to, or in favor of, the Administrative Agent or any
Lender and including each other pledge, power of attorney, consent, assignment,
contract, notice, letter of credit agreement and each other written matter
whether heretofore, now or hereafter executed by or on behalf of any Loan Party,
or any employee of any Loan Party, and delivered to the Administrative Agent or
any Lender in connection with this Agreement or the transactions contemplated
hereby. Any reference in this Agreement or any other Loan Document to a Loan
Document shall include all appendices, exhibits or schedules thereto, and all
amendments, restatements, supplements or other modifications thereto, and shall
refer to this Agreement or such Loan Document as the same may be in effect at
any and all times such reference becomes operative.

“Loan Guarantor” means each Loan Party.

“Loan Guaranty” means Article X of this Agreement.

“Loan Parties” means, collectively, the Borrower, the Borrower’s Domestic
Subsidiaries and any other Person who becomes a party to this Agreement pursuant
to a Joinder Agreement and their successors and assigns, and the term “Loan
Party” shall mean any one of them or all of them individually, as the context
may require.

“Loans” means the loans and advances made by the Lenders pursuant to this
Agreement, including Swingline Loans.

“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, operations, prospects or condition, financial or otherwise, of the
Borrower and its Subsidiaries taken as a whole, (b) the ability of any Loan
Party to perform any of its obligations under the Loan Documents to which it is
a party, (c) the Collateral, or the Administrative Agent’s Liens (on behalf of
itself and the other Secured Parties) on the Collateral or the priority of such
Liens, or (d) the rights of or benefits available to the Administrative Agent,
the Issuing Bank or the Lenders under any of the Loan Documents.

“Material Indebtedness” means Indebtedness (other than the Loans and Letters of
Credit), or obligations in respect of one or more Swap Agreements, of any one or
more of the Loan Parties in an

 

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aggregate principal amount exceeding $1,000,000. For purposes of determining
Material Indebtedness, the “principal amount” of the obligations of any Loan
Party in respect of any Swap Agreement at any time shall be the maximum
aggregate amount (giving effect to any netting agreements) that such Loan Party
would be required to pay if such Swap Agreement were terminated at such time.

“Maximum Rate” has the meaning assigned to such term in Section 9.17.

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

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

“Net Income” means, for any period, the consolidated net income (or loss)
determined for the Borrower and its Subsidiaries, on a consolidated basis in
accordance with GAAP; provided that there shall be excluded (a) the income (or
deficit) of any Person accrued prior to the date it becomes a Subsidiary or is
merged into or consolidated with the Borrower or any Subsidiary, (b) the income
(or deficit) of any Person (other than a Subsidiary) in which the Borrower or
any Subsidiary has an ownership interest, except to the extent that any such
income is actually received by the Borrower or such Subsidiary in the form of
dividends or similar distributions and (c) the undistributed earnings of any
Subsidiary, to the extent that the declaration or payment of dividends or
similar distributions by such Subsidiary is not at the time permitted by the
terms of any contractual obligation (other than under any Loan Document) or
Requirement of Law applicable to such Subsidiary.

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

“Non-Consenting Lender” has the meaning assigned to such term in
Section 9.02(d).

“Non-U.S. Lender” means a Lender that is not a U.S. Person.

“Obligated Party” has the meaning assigned to such term in Section 10.02.

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

“Obligations” means all unpaid principal of and accrued and unpaid interest on
the Loans, all LC Exposure, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations and indebtedness (including
interest and fees accruing during the pendency of any bankruptcy,

 

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insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding), obligations and liabilities of any of
the Loan Parties to any of the Lenders, the Administrative Agent, the Issuing
Bank or any indemnified party, individually or collectively, existing on the
Effective Date or arising thereafter, direct or indirect, joint or several,
absolute or contingent, matured or unmatured, liquidated or unliquidated,
secured or unsecured, arising by contract, operation of law or otherwise,
arising or incurred under this Agreement or any of the other Loan Documents or
in respect of any of the Loans made or reimbursement or other obligations
incurred or any of the Letters of Credit or other instruments at any time
evidencing any thereof.

“OFAC” means the Office of Foreign Assets Control of the United States
Department of the Treasury.

“Off-Balance Sheet Liability” of a Person means (a) any repurchase obligation or
liability of such Person with respect to accounts or notes receivable sold by
such Person, (b) any indebtedness, liability or obligation under any so-called
“synthetic lease” transaction entered into by such Person, or (c) any
indebtedness, liability or obligation arising with respect to any other
transaction which is the functional equivalent of or takes the place of
borrowing but which does not constitute a liability on the balance sheet of such
Person (other than operating leases).

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as
a result of a present or former connection between such Recipient and the
jurisdiction imposing such Taxes (other than a connection arising from such
Recipient having executed, delivered, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, engaged in any other transaction pursuant to, or enforced, any
Loan Document), or sold or assigned an interest in any Loan, Letter of Credit,
or any Loan Document.

“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Loan Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment (other than an assignment
made pursuant to Section 2.19).

“Parent” means, with respect to any Lender, any Person as to which such Lender
is, directly or indirectly, a subsidiary.

“Participant” has the meaning assigned to such term in Section 9.04(c).

“Participant Register” has the meaning assigned to such term in Section 9.04(c).

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

“Permitted Acquisitions” means any Acquisition by any Loan Party where:

(a)        the business or division acquired is for use, or the Person acquired
is engaged, in businesses which are similar or related to the businesses engaged
in by the Borrower on the date of this Agreement or are otherwise reasonably
incidental or complementary thereto;

(b)        immediately before and after giving effect to such Acquisition, no
Default or Event of Default shall exist;

 

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(c)        immediately before such Acquisition, the Borrower’s Funded
Indebtedness to EBITDA Ratio on a pro forma basis after giving effect to such
acquisition(s) is equal to or less than 3.0 to 1.0;

(d)        if a new Subsidiary is formed or acquired as a result of or in
connection with the Acquisition, the Borrower shall have complied with the
requirements of Article IV and Section 5.14, as applicable.

“Permitted Encumbrances” means:

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

(b)  carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other
like Liens imposed by law, arising in the ordinary course of business and
securing obligations that are not overdue by more than thirty (30) days or are
being contested in compliance with Section 5.04;

(c)  pledges and deposits made in the ordinary course of business in compliance
with workers’ compensation, unemployment insurance and other social security
laws or regulations;

(d)  deposits to secure the performance of bids, trade contracts, leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature, in each case in the ordinary course of business;

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

(f)  easements, zoning restrictions, rights-of-way and similar encumbrances on
real property imposed by law or arising in the ordinary course of business that
do not secure any monetary obligations and do not materially detract from the
value of the affected property or interfere with the ordinary conduct of
business of the Borrower or any Subsidiary;

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

“Permitted Investments” means:

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

(b)  investments in commercial paper maturing within 270 days from the date of
acquisition thereof and having, at such date of acquisition, the highest credit
rating obtainable from S&P or from Moody’s;

(c)  investments in certificates of deposit, bankers’ acceptances and time
deposits maturing within 180 days from the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit accounts issued or
offered by, any domestic office of any commercial bank organized under the laws
of the U.S. or any state thereof which has a combined capital and surplus and
undivided profits of not less than $500,000,000;

 

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(d)  fully collateralized repurchase agreements with a term of not more than 30
days for securities described in clause (a) above and entered into with a
financial institution satisfying the criteria described in clause (c) above; and

(e)  money market funds that (i) comply with the criteria set forth in
Securities and Exchange Commission Rule 2a-7 under the Investment Company Act of
1940, (ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio
assets of at least $5,000,000,000.

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

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

“Platform” means Debt Domain, Intralinks, Syndtrak or a substantially similar
electronic transmission system.

“Prepayment Event” means:

(a)  any sale, transfer or other disposition (including pursuant to a sale and
leaseback transaction) of any property or asset of any Loan Party or any
Subsidiary, other than dispositions described in Sections 6.05(a) or 6.05(b); or

(b)  any casualty or other insured damage to, or any taking under power of
eminent domain or by condemnation or similar proceeding of, any property or
asset of any Loan Party or any Subsidiary with a fair value immediately prior to
such event equal to or greater than $100,000; or

(c)  the issuance by the Borrower of any Equity Interests, or the receipt by the
Borrower of any capital contribution; or

(d)  the incurrence by any Loan Party or any Subsidiary of any Indebtedness,
other than Indebtedness permitted under Section 6.01.

“Prime Rate” means the rate of interest per annum publicly announced from time
to time by Chase as its prime rate in effect at its principal offices in New
York City. Each change in the Prime Rate shall be effective from and including
the date such change is publicly announced as being effective.

“Projections” has the meaning assigned to such term in Section 5.01(e).

“Public-Sider” means a Lender whose representatives may trade in securities of
the Borrower or its controlling person or any of its Subsidiaries while in
possession of the financial statements provided by the Borrower under the terms
of this Agreement.

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

 

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“Real Property” means all real property that was, is now or may hereafter be
owned, occupied or otherwise controlled by any Loan Party pursuant to any
contract of sale, lease or other conveyance of any legal interest in any real
property to any Loan Party.

“Recipient” means, as applicable, (a) the Administrative Agent, (b) any Lender
and (c) any Issuing Bank, or any combination thereof (as the context requires).

“Refinance Indebtedness” has the meaning assigned to such term in
Section 6.01(f).

“Register” has the meaning assigned to such term in Section 9.04(b).

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

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

“Report” means reports prepared by the Administrative Agent or another Person
showing the results of appraisals, field examinations or audits pertaining to
the Borrower’s assets from information furnished by or on behalf of the
Borrower, after the Administrative Agent has exercised its rights of inspection
pursuant to this Agreement, which Reports may be distributed to the Lenders by
the Administrative Agent.

“Required Lenders” means, at any time, Lenders (other than Defaulting Lenders)
having Credit Exposure and unused Commitments representing at least 66.6% of the
sum of the Aggregate Credit Exposure and unused Commitments at such time if
there are more than three Lenders at such time, and 66.6% of the sum of the
Aggregate Credit Exposure and unused Commitments at such time if there are not
more than three Lenders at such time; provided that, as long as there are only
two Lenders, Required Lenders shall mean both Lenders; provided further that,
for purposes of declaring the Loans to be due and payable pursuant to
Article VII, and for all purposes after the Loans become due and payable
pursuant to Article VII or the Commitments expire or terminate, then, as to each
Lender, clause (a) of the definition of Swingline Exposure shall only be
applicable for purposes of determining its Revolving Exposure to the extent such
Lender shall have funded its participation in the outstanding Swingline Loans.

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

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

 

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“Revolving Commitment” means, with respect to each Lender, the commitment, if
any, of such Lender to make Revolving Loans and to acquire participations in
Letters of Credit and Swingline Loans hereunder, expressed as an amount
representing the maximum aggregate permitted amount of such Lender’s Revolving
Exposure hereunder, as such commitment may be reduced or increased from time to
time pursuant to (a) Section 2.09 and (b) assignments by or to such Lender
pursuant to Section 9.04. The initial amount of each Lender’s Revolving
Commitment is set forth on the Commitment Schedule, or in the Assignment and
Assumption pursuant to which such Lender shall have assumed its Revolving
Commitment, as applicable. The initial aggregate amount of the Lenders’
Revolving Commitments is $25,000,000.00.

“Revolving Credit Maturity Date” means December 2, 2020 (if the same is a
Business Day, or if not then the immediately next succeeding Business Day), or
any earlier date on which the Revolving Commitments are reduced to zero or
otherwise terminated pursuant to the terms hereof.

“Revolving Exposure” means, with respect to any Lender, at any time, the sum of
the aggregate outstanding principal amount of such Lender’s Revolving Loans and
its LC Exposure and its Swingline Exposure at such time.

“Revolving Lender” means, as of any date of determination, a Lender with a
Revolving Commitment or, if the Revolving Commitments have terminated or
expired, a Lender with Revolving Exposure.

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

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

“Sale and Leaseback Transaction” has the meaning assigned to such term in
Section 6.06.

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

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

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

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

 

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

“Secured Parties” means (a) the Lenders, (b) the Administrative Agent, (c) each
Issuing Bank, (d) each provider of Banking Services, to the extent the Banking
Services Obligations in respect thereof constitute Secured Obligations, (e) each
counterparty to any Swap Agreement, to the extent the obligations thereunder
constitute Secured Obligations, (f) the beneficiaries of each indemnification
obligation undertaken by any Loan Party under any Loan Document and (g) the
successors and assigns of each of the foregoing.

“Security Agreement” means that certain Pledge and Security Agreement (including
any and all supplements thereto), dated as of the date hereof, among the Loan
Parties and the Administrative Agent, for the benefit of the Administrative
Agent and the other Secured Parties, and any other pledge or security agreement
entered into, after the date of this Agreement by any other Loan Party (as
required by this Agreement or any other Loan Document) or any other Person for
the benefit of the Administrative Agent and the other Secured Parties, as the
same may be amended, restated, supplemented or otherwise modified from time to
time.

“Standby LC Exposure” means, at any time, the sum of (a) the aggregate undrawn
amount of all standby Letters of Credit outstanding at such time plus (b) the
aggregate amount of all LC Disbursements relating to standby Letters of Credit
that have not yet been reimbursed by or on behalf of the Borrower at such time.
The Standby LC Exposure of any Revolving Lender at any time shall be its
Applicable Percentage of the aggregate Standby LC Exposure at such time.

“Statement” has the meaning assigned to such term in Section 2.18(g).

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentage (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as “Eurocurrency Liabilities” in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D of the
Board. Eurodollar Loans shall be deemed to constitute eurocurrency funding and
to be subject to such reserve requirements without benefit of or credit for
proration, exemptions or offsets that may be available from time to time to any
Lender under such Regulation D of the Board or any comparable regulation. The
Statutory Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.

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

“subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which would be consolidated with those of the parent in the
parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting

 

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power or, in the case of a partnership, more than 50% of the general partnership
interests are, as of such date, owned, controlled or held, or (b) that is, as of
such date, otherwise Controlled, by the parent or one or more subsidiaries of
the parent or by the parent and one or more subsidiaries of the parent.

“Subsidiary” means any direct or indirect subsidiary of the Borrower or of any
other Loan Party, as applicable. Notwithstanding anything contained herein to
the contrary, neither the Inactive Subsidiary nor the ES Acquisition Subsidiary
shall be deemed a “Subsidiary” for purposes of this Agreement and the other Loan
Documents.

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

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

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

“Swingline Commitment” means the amount set forth opposite Chase’s name on the
Commitment Schedule as Swingline Commitment.

“Swingline Exposure” means, at any time, the aggregate principal amount of all
Swingline Loans outstanding at such time. The Swingline Exposure of any
Revolving Lender at any time shall be the sum of (a) its Applicable Percentage
of the total Swingline Exposure at such time other than with respect to any
Swingline Loans made by such Revolving Lender in its capacity as the Swingline
Lender and (b) the principal amount of all Swingline Loans made by such
Revolving Lender in its capacity as the Swingline Lender outstanding at such
time (less the amount of participations funded by the other Lenders in such
Swingline Loans).

“Swingline Lender” means Chase, in its capacity as lender of Swingline Loans
hereunder. Any consent required of the Administrative Agent or the Issuing Bank
shall be deemed to be required of the Swingline Lender and any consent given by
Chase in its capacity as Administrative Agent or Issuing Bank shall be deemed
given by Chase in its capacity as Swingline Lender as well.

“Swingline Loan” means a Loan made pursuant to Section 2.05.

“Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, withholdings (including backup withholding), assessments, fees or
other charges imposed by any Governmental Authority, including any interest,
additions to tax or penalties applicable thereto.

 

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“Transactions” means the execution, delivery and performance by the Borrower of
this Agreement and the other Loan Documents, the borrowing of Loans and other
credit extensions, the use of the proceeds thereof and the issuance of Letters
of Credit hereunder.

“Type”, when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBO Rate or the CB Floating Rate.

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

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

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

“U.S. Person” means a “United States person” within the meaning of
Section 7701(a)(30) of the Code.

“U.S. Tax Compliance Certificate” has the meaning assigned to such term in
Section 2.17(f)(ii)(B)(3).

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

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.

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

SECTION 1.03.  Terms Generally.  The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including” shall
be deemed to be followed by the phrase “without limitation”. The word “law”
shall be construed as referring to all statutes, rules, regulations, codes and
other laws (including official rulings and interpretations thereunder having the
force of law or with which affected Persons customarily comply) and all
judgments, orders and decrees of all Governmental Authorities. The word “will”
shall be construed to have the same meaning and effect as the word “shall”.
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
restated, supplemented or otherwise modified (subject to any restrictions on
such amendments, restatements, supplements or modifications set forth herein),
(b) any definition of or reference to any

 

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statute, rule or regulation shall be construed as referring thereto as from time
to time amended, supplemented or otherwise modified (including by succession of
comparable successor laws), (c) any reference herein to any Person shall be
construed to include such Person’s successors and assigns (subject to any
restrictions on assignments set forth herein) and, in the case of any
Governmental Authority, any other Governmental Authority that shall have
succeeded to any or all functions thereof, (d) the words “herein”, “hereof” and
“hereunder”, and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (e) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement, (f) any reference in any definition to the phrase “at any time”
or “for any period” shall refer to the same time or period for all calculations
or determinations within such definition, and (g) the words “asset” and
“property” shall be construed to have the same meaning and effect and to refer
to any and all tangible and intangible assets and properties, including cash,
securities, accounts and contract rights.

SECTION 1.04  Accounting Terms; GAAP.  Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided that, if after
the date hereof there occurs any change in GAAP or in the application thereof on
the operation of any provision hereof and the Borrower notifies the
Administrative Agent that the Borrower requests an amendment to any provision
hereof to eliminate the effect of such change in GAAP or in the application
thereof (or if the Administrative Agent notifies the Borrower that the Required
Lenders request an amendment to any provision hereof for such purpose),
regardless of whether any such notice is given before or after such change in
GAAP or in the application thereof, then such provision shall be interpreted on
the basis of GAAP as in effect and applied immediately before such change shall
have become effective until such notice shall have been withdrawn or such
provision amended in accordance herewith. Notwithstanding any other provision
contained herein, all terms of an accounting or financial nature used herein
shall be construed, and all computations of amounts and ratios referred to
herein shall be made (i) without giving effect to any election under Financial
Accounting Standards Board Accounting Standards Codification 825-10-25 (or any
other Accounting Standards Codification or Financial Accounting Standard having
a similar result or effect) to value any Indebtedness or other liabilities of
any Loan Party at “fair value”, as defined therein and (ii) without giving
effect to any treatment of Indebtedness in respect of convertible debt
instruments under Financial Accounting Standards Board Accounting Standards
Codification 470-20 (or any other Accounting Standards Codification or Financial
Accounting Standard having a similar result or effect) to value any such
Indebtedness in a reduced or bifurcated manner as described therein, and such
Indebtedness shall at all times be valued at the full stated principal amount
thereof.

SECTION 1.05.  Pro Forma Adjustments for Acquisitions and Dispositions.  To the
extent the Borrower or any Subsidiary makes any Acquisition permitted pursuant
to Section 6.04 or disposition of assets outside the ordinary course of business
permitted by Section 6.05 during the period of four fiscal quarters of the
Borrower most recently ended, the financial covenants set forth in Section 6.12
shall be calculated after giving pro forma effect thereto (including pro forma
adjustments arising out of events which are directly attributable to the
acquisition or the disposition of assets, are factually supportable and are
expected to have a continuing impact, in each case as determined on a basis
consistent with Article 11 of Regulation S-X of the Securities Act of 1933, as
amended, as interpreted by the SEC, and as certified by a Financial Officer), as
if such acquisition or such disposition (and any related incurrence, repayment
or assumption of Indebtedness) had occurred in the first day of such
four-quarter period.

SECTION 1.06. Status of Obligations.  In the event that the Borrower or any
other Loan Party shall at any time issue or have outstanding any Subordinated
Indebtedness, the Borrower shall take or cause such other Loan Party to take all
such actions as shall be necessary to cause the Secured Obligations to
constitute senior indebtedness (however denominated) in respect of such
Subordinated Indebtedness

 

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and to enable the Administrative Agent and the Lenders to have and exercise any
payment blockage or other remedies available or potentially available to holders
of senior indebtedness under the terms of such Subordinated Indebtedness.
Without limiting the foregoing, the Secured Obligations are hereby designated as
“senior indebtedness” and as “designated senior indebtedness” and words of
similar import under and in respect of any indenture or other agreement or
instrument under which such Subordinated Indebtedness is outstanding and are
further given all such other designations as shall be required under the terms
of any such Subordinated Indebtedness in order that the Lenders may have and
exercise any payment blockage or other remedies available or potentially
available to holders of senior indebtedness under the terms of such Subordinated
Indebtedness.

ARTICLE II

The Credits

SECTION 2.01.  Revolving Commitments.  Subject to the terms and conditions set
forth herein, each Lender severally (and not jointly) agrees to make Revolving
Loans in dollars to the Borrower from time to time during the Availability
Period in an aggregate principal amount that will not result (after giving
effect to any application of proceeds of such Borrowing pursuant to
Section 2.10(a)) in (i) such Lender’s Revolving Exposure exceeding such Lender’s
Revolving Commitment or (ii) the Aggregate Revolving Exposure exceeding the
aggregate Revolving Commitments. Within the foregoing limits and subject to the
terms and conditions set forth herein, the Borrower may borrow, prepay and
reborrow Revolving Loans.

SECTION 2.02.  Loans and Borrowings.

(a)  Each Loan (other than a Swingline Loan) shall be made as part of a
Borrowing consisting of Loans of the same Class and Type made by the Lenders
ratably in accordance with their respective Commitments of the applicable Class.
The failure of any Lender to make any Loan required to be made by it shall not
relieve any other Lender of its obligations hereunder; provided that the
Commitments of the Lenders are several and no Lender shall be responsible for
any other Lender’s failure to make Loans as required. Any Swingline Loan shall
be made in accordance with the procedures set forth in Section 2.05.

(b)  Subject to Section 2.14, each Revolving Borrowing shall be comprised
entirely of CBFR Loans or Eurodollar Loans as the Borrower may request in
accordance herewith, provided that all Revolving Borrowings made on the
Effective Date must be made as CBFR Borrowings but may be converted into
Eurodollar Borrowings in accordance with Section 2.08. Each Swingline Loan shall
be a CBFR Loan. Each Lender at its option may make any Eurodollar Loan by
causing any domestic or foreign branch or Affiliate of such Lender to make such
Loan (and in the case of an Affiliate, the provisions of Sections 2.14, 2.15,
2.16 and 2.17 shall apply to such Affiliate to the same extent as to such
Lender); provided that any exercise of such option shall not affect the
obligation of the Borrower to repay such Loan in accordance with the terms of
this Agreement.

(c)    At the commencement of each Interest Period for any Eurodollar Revolving
Borrowing, such Borrowing shall be in an aggregate amount that is an integral
multiple of $100,000 and not less than $500,000. At the time that each CBFR
Borrowing is made, such Borrowing shall be in an aggregate amount that is an
integral multiple of $50,000 and not less than $250,000; provided that a CBFR
Revolving Borrowing may be in an aggregate amount that is equal to the entire
unused balance of the total Revolving Commitments or that is required to finance
the reimbursement of an LC Disbursement as contemplated by Section 2.06(e). Each
Swingline Loan shall be in an amount that is an integral multiple of $100,000
and not less than $100,000. Borrowings of more than one Type and Class may be
outstanding at the same time; provided that there shall not at any time be more
than a total of 5 Eurodollar Borrowings outstanding.

(d)  Notwithstanding any other provision of this Agreement, the Borrower shall
not be entitled to request, or to elect to convert or continue, any Borrowing if
the Interest Period requested with respect thereto would end after the Revolving
Credit Maturity Date.

 

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SECTION 2.03.  Requests for Borrowings.  To request a Borrowing, the Borrower
shall notify the Administrative Agent of such request either in writing
(delivered by hand or fax) in a form approved by the Administrative Agent and
signed by the Borrower or by telephone (a) in the case of a Eurodollar
Borrowing, not later than 10:00 a.m., New York time, three Business Days before
the date of the proposed Borrowing or (b) in the case of a CBFR Revolving
Borrowing, not later than noon, New York time, on the date of the proposed
Borrowing; provided that any such notice of a CBFR Revolving Borrowing to
finance the reimbursement of an LC Disbursement as contemplated by
Section 2.06(e) may be given not later than 9:00 a.m., New York time, on the
date of the proposed Borrowing. Each such telephonic Borrowing Request shall be
irrevocable and shall be confirmed promptly by hand delivery or fax to the
Administrative Agent of a written Borrowing Request in a form approved by the
Administrative Agent and signed by the Borrower. Each such telephonic and
written Borrowing Request shall specify the following information in compliance
with Section 2.01:

 

  (i)

the Class of Borrowing, the aggregate amount of the requested Borrowing, and a
breakdown of the separate wires comprising such Borrowing;

 

  (ii)

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

 

  (iii)

whether such Borrowing is to be a CBFR Revolving Borrowing or a Eurodollar
Revolving Borrowing; and

 

  (iv)

in the case of a Eurodollar Revolving Borrowing, the initial Interest Period to
be applicable thereto, which shall be a period contemplated by the definition of
the term “Interest Period.”

If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be a CBFR Revolving Borrowing. If no Interest Period is
specified with respect to any requested Eurodollar Revolving Borrowing, then the
Borrower shall be deemed to have selected an Interest Period of one month’s
duration. Promptly following receipt of a Borrowing Request in accordance with
this Section, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender’s Loan to be made as part of the
requested Borrowing.

SECTION 2.04.  Intentionally Omitted

SECTION 2.05.  Swingline Loans.

(a)        Subject to the terms and conditions set forth herein, from time to
time during the Availability Period, the Swingline Lender may in its discretion
make Swingline Loans to the Borrower, in an aggregate principal amount at any
time outstanding that will not result in (i) the aggregate principal amount of
outstanding Swingline Loans exceeding the Swingline Lender’s Swingline
Commitment, (ii) the Swingline Lender’s Revolving Exposure exceeding its
Revolving Commitment, or (iii) the Aggregate Revolving Exposure exceeding the
aggregate Revolving Commitments; provided that the Swingline Lender shall not be
required to make a Swingline Loan to refinance an outstanding Swingline Loan.
Within the foregoing limits and subject to the terms and conditions set forth
herein, the Borrower may

 

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borrow, prepay and reborrow Swingline Loans. To request a Swingline Loan, the
Borrower shall notify the Administrative Agent of such request by telephone
(confirmed by fax), not later than noon, New York time, on the day of a proposed
Swingline Loan. Each such notice shall be irrevocable and shall specify the
requested date (which shall be a Business Day) and amount of the requested
Swingline Loan. The Administrative Agent will promptly advise the Swingline
Lender of any such notice received from the Borrower. The Swingline Lender shall
make each Swingline Loan available to the Borrower by means of a credit to the
Funding Account(s) (or, in the case of a Swingline Loan made to finance the
reimbursement of an LC Disbursement as provided in Section 2.06(e), by
remittance to the Issuing Bank, and in the case of repayment of another Loan or
fees or expenses as provided by Section 2.18(c), by remittance to the
Administrative Agent to be distributed to the Lenders) by 2:00 p.m., New York
time, on the requested date of such Swingline Loan.

(b)        The Swingline Lender may by written notice given to the
Administrative Agent require the Revolving Lenders to acquire participations on
such Business Day in all or a portion of the Swingline Loans outstanding. Such
notice shall specify the aggregate amount of Swingline Loans in which the
Revolving Lenders will participate. Promptly upon receipt of such notice, the
Administrative Agent will give notice thereof to each Revolving Lender,
specifying in such notice such Lender’s Applicable Percentage of such Swingline
Loan or Loans. Each Revolving Lender hereby absolutely and unconditionally
agrees, promptly upon receipt of such notice from the Administrative Agent (and
in any event, if such notice is received by 11:00 a.m., New York time, on a
Business Day no later than 4:00 p.m., New York time on such Business Day and if
received after 11:00 a.m., New York time, “on a Business Day” shall mean no
later than 9:00 a.m. New York time on the immediately succeeding Business Day),
to pay to the Administrative Agent, for the account of the Swingline Lender,
such Lender’s Applicable Percentage of such Swingline Loan or Loans. Each
Revolving Lender acknowledges and agrees that its obligation to acquire
participations in Swingline Loans pursuant to this paragraph is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or reduction or
termination of the Revolving Commitments, and that each such payment shall be
made without any offset, abatement, withholding or reduction whatsoever. Each
Revolving Lender shall comply with its obligation under this paragraph by wire
transfer of immediately available funds, in the same manner as provided in
Section 2.07 with respect to Loans made by such Lender (and Section 2.07 shall
apply, mutatis mutandis, to the payment obligations of the Lenders), and the
Administrative Agent shall promptly pay to the Swingline Lender the amounts so
received by it from the Revolving Lenders. The Administrative Agent shall notify
the Borrower of any participations in any Swingline Loan acquired pursuant to
this paragraph, and thereafter payments in respect of such Swingline Loan shall
be made to the Administrative Agent and not to the Swingline Lender. Any amounts
received by the Swingline Lender from the Borrower (or other party on behalf of
the Borrower) in respect of a Swingline Loan after receipt by the Swingline
Lender of the proceeds of a sale of participations therein shall be promptly
remitted to the Administrative Agent; any such amounts received by the
Administrative Agent shall be promptly remitted by the Administrative Agent to
the Revolving Lenders that shall have made their payments pursuant to this
paragraph and to the Swingline Lender, as their interests may appear; provided
that any such payment so remitted shall be repaid to the Swingline Lender or to
the Administrative Agent, as applicable, if and to the extent such payment is
required to be refunded to the Borrower for any reason. The purchase of
participations in a Swingline Loan pursuant to this paragraph shall not relieve
the Borrower of any default in the payment thereof.

SECTION 2.06.  Letters of Credit and Bank Guarantees.

(a)        General.  Subject to the terms and conditions set forth herein, the
Borrower may request the issuance of Letters of Credit or Bank Guarantees (or
the amendment, renewal or extension of an outstanding Letter of Credit or Bank
Guarantee), as the applicant thereof for the support of its or its Subsidiaries’
obligations, in a form reasonably acceptable to the Administrative Agent and the
Issuing

 

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Bank, at any time and from time to time during the Availability Period and the
Issuing Bank may, but shall have no obligation, to issue such requested Letters
of Credit or Bank Guarantees (or to amend, renew or extend such outstanding
Letter of Credit or Bank Guarantee) pursuant to this Agreement. In the event of
any inconsistency between the terms and conditions of this Agreement and the
terms and conditions of any form of letter of credit application or other
agreement submitted by the Borrower to, or entered into by the Borrower with,
the Issuing Bank relating to any Letter of Credit or Bank Guarantee, the terms
and conditions of this Agreement shall control. The Borrower unconditionally and
irrevocably agrees that, in connection with any Letter of Credit or Bank
Guarantee issued for the support of any Subsidiary’s obligations as provided in
the first sentence of this paragraph, the Borrower will be fully responsible for
the reimbursement of LC Disbursements or Bank Guarantee Payments in accordance
with the terms hereof, the payment of interest thereon and the payment of fees
due under Section 2.12(b) to the same extent as if it were the sole account
party in respect of such Letter of Credit or Bank Guarantee (the Borrower hereby
irrevocably waiving any defenses to the fullest extent permitted by law, that
might otherwise be available to it as a guarantor or surety of the obligations
of such Subsidiary that is an account party in respect of any such Letter of
Credit Bank Guarantee). Notwithstanding anything herein to the contrary, the
Issuing Bank shall have no obligation hereunder to issue, and shall not issue,
any Letter of Credit or Bank Guarantee (i) the proceeds of which would be made
available to any Person (A) to fund any activity or business of or with any
Sanctioned Person, or in any country or territory that, at the time of such
funding, is the subject of any Sanctions or (B) in any manner that would result
in a violation of any Sanctions by any party to this Agreement, (ii) if any
order, judgment or decree of any Governmental Authority or arbitrator shall by
its terms purport to enjoin or restrain the Issuing Bank from issuing such
Letter of Credit or Bank Guarantee, or any Requirement of Law relating to the
Issuing Bank or any request or directive (whether or not having the force of
law) from any Governmental Authority with jurisdiction over the Issuing Bank
shall prohibit, or request that the Issuing Bank refrain from, the issuance of
letters of credit generally or such Letter of Credit or Bank Guarantee in
particular or shall impose upon the Issuing Bank with respect to such Letter of
Credit or Bank Guarantee any restriction, reserve or capital requirement (for
which the Issuing Bank is not otherwise compensated hereunder) not in effect on
the Effective Date, or shall impose upon the Issuing Bank any unreimbursed loss,
cost or expense which was not applicable on the Effective Date and which the
Issuing Bank in good faith deems material to it, or (iii) if the issuance of
such Letter of Credit or Bank Guarantee would violate one or more policies of
the Issuing Bank applicable to letters of credit generally; provided that,
notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street
Reform and Consumer Protection Act and all requests, rules, guidelines,
requirements or directives thereunder or issued in connection therewith or in
the implementation thereof, and (y) all requests, rules, guidelines,
requirements or directives promulgated by the Bank for International
Settlements, the Basel Committee on Banking Supervision (or any successor or
similar authority) or the United States or foreign regulatory authorities, in
each case pursuant to Basel III, shall in each case be deemed not to be in
effect on the Effective Date for purposes of clause (ii) above, regardless of
the date enacted, adopted, issued or implemented.

(b)        Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions.    To request the issuance of a Letter of Credit or Bank Guarantee
(or the amendment, renewal or extension of an outstanding Letter of Credit or
Bank Guarantee), the Borrower shall hand deliver or fax (or transmit by
electronic communication, if arrangements for doing so have been approved by the
Issuing Bank) to the Issuing Bank and the Administrative Agent (reasonably in
advance of the requested date of issuance, amendment, renewal or extension, but
in any event no less than three Business Days) a notice requesting the issuance
of a Letter of Credit or Bank Guarantee, or identifying the Letter of Credit or
Bank Guarantee to be amended, renewed or extended, and specifying the date of
issuance, amendment, renewal or extension (which shall be a Business Day), the
date on which such Letter of Credit or Bank Guarantee is to expire (which shall
comply with paragraph (c) of this Section), the amount of such Letter of Credit
or Bank Guarantee, the name and address of the beneficiary thereof, and such
other information as shall be necessary to prepare, amend, renew or extend such
Letter of Credit or Bank Guarantee. If requested by

 

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the Issuing Bank, the Borrower also shall submit a bank guarantee or letter of
credit application on the Issuing Bank’s standard form in connection with any
request for a Letter of Credit or Bank Guarantee. A Letter of Credit or Bank
Guarantee shall be issued, amended, renewed or extended only if (and upon
issuance, amendment, renewal or extension of each Letter of Credit or Bank
Guarantee the Borrower shall be deemed to represent and warrant that), after
giving effect to such issuance, amendment, renewal or extension (i) the
aggregate LC Exposure shall not exceed $25,000,000, (ii) the aggregate Standby
LC Exposure shall not exceed $25,000,000, (iii) the aggregate Commercial LC
Exposure shall not exceed $10,000,000, (iv) no Revolving Lender’s Revolving
Exposure shall exceed its Revolving Commitment and (v) the Aggregate Revolving
Exposure shall not exceed the aggregate Revolving Commitments. No Letter of
Credit or Bank Guarantee may be renewed within six months of the Revolving
Credit Maturity Date, as the same may be extended from time to time unless cash
collateralized in accordance with Section 2.06(j). Notwithstanding the foregoing
or anything to the contrary contained herein, no Issuing Bank shall be obligated
to issue or modify any Letter of Credit or Bank Guarantee if, immediately after
giving effect thereto, the outstanding LC Exposure in respect of all Letters of
Credit or Bank Guarantee issued by such Person and its Affiliates would exceed
such Issuing Bank’s Issuing Bank Sublimit. Without limiting the foregoing and
without affecting the limitations contained herein, it is understood and agreed
that the Borrower may from time to time request that an Issuing Bank issue
Letters of Credit or Bank Guarantee in excess of its individual Issuing Bank
Sublimit in effect at the time of such request, and each Issuing Bank agrees to
consider any such request in good faith. Any Letter of Credit or Bank Guarantee
so issued by an Issuing Bank in excess of its individual Issuing Bank Sublimit
then in effect shall nonetheless constitute a Letter of Credit or Bank Guarantee
for all purposes of the Credit Agreement, and shall not affect the Issuing Bank
Sublimit of any other Issuing Bank, subject to the limitations on the aggregate
LC Exposure set forth in clause (i) of this Section 2.06(b).

(c)        Expiration Date.  Except as permitted by Section 2.06(b), each Letter
of Credit or Bank Guarantee shall expire (or be subject to termination or
non-renewal by notice from the Issuing Bank to the beneficiary thereof) at or
prior to the close of business on the date five (5) years after the date of the
issuance of such Letter of Credit or Bank Guarantee (or, in the case of any
renewal or extension thereof, including, without limitation, any automatic
renewal provision, one year after such renewal or extension); provided, however,
that (i) the LC Exposure relating to Letters of Credit and Bank Guarantees with
a maturity date beyond the Revolving Credit Maturity Date shall not exceed
$7,500,000 at any time and (ii) the Borrower shall deposit cash collateral in
the LC Collateral Account in an amount sufficient to fully cash collateralize,
in accordance with and when required by Section 2.06(j), all outstanding Letters
of Credit and Bank Guarantees with a maturity date beyond the Revolving Credit
Maturity Date.

(d)        Participations.    By the issuance of a Letter of Credit or Bank
Guarantee (or an amendment to a Letter of Credit or Bank Guarantee increasing
the amount thereof) and without any further action on the part of the Issuing
Bank or the Revolving Lenders, the Issuing Bank hereby grants to each Revolving
Lender, and each Revolving Lender hereby acquires from the Issuing Bank, a
participation in such Letter of Credit or Bank Guarantee equal to such Lender’s
Applicable Percentage of the aggregate amount available to be drawn under such
Letter of Credit or Bank Guarantee. In consideration and in furtherance of the
foregoing, each Revolving Lender hereby absolutely and unconditionally agrees to
pay to the Administrative Agent, for the account of the Issuing Bank, such
Lender’s Applicable Percentage of each LC Disbursement and Bank Guarantee
Payment made by the Issuing Bank and not reimbursed by the Borrower on the date
due as provided in paragraph (e) of this Section, or of any reimbursement
payment required to be refunded to the Borrower for any reason. Each Revolving
Lender acknowledges and agrees that its obligation to acquire participations
pursuant to this paragraph in respect of Letters of Credit or Bank Guarantees is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including any amendment, renewal or extension of any Letter of
Credit or Bank Guarantee or the occurrence and continuance of a Default or
reduction or termination of the Commitments, and that each such payment shall be
made without any offset, abatement, withholding or reduction whatsoever.

 

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(e)        Reimbursement.    If the Issuing Bank shall make any LC Disbursement
or Bank Guarantee Payment in respect of a Letter of Credit or Bank Guarantee,
respectively, the Borrower shall reimburse such LC Disbursement or Bank
Guarantee Payment by paying to the Administrative Agent an amount equal to such
LC Disbursement or Bank Guarantee Payment not later than 11:00 a.m., New York
time, on (i) the Business Day that the Borrower receives notice of such LC
Disbursement or Bank Guarantee Payment, as applicable, if such notice is
received prior to 9:00 a.m., New York time, on the day of receipt, or (ii) the
Business Day immediately following the day that the Borrower receives such
notice, if such notice is received after 9:00 a.m., New York time, on the day of
receipt; provided that the Borrower may, subject to the conditions to borrowing
set forth herein, request in accordance with Section 2.03 or 2.05 that such
payment be financed with a CBFR Revolving Borrowing or Swingline Loan in an
equivalent amount and, to the extent so financed, the Borrower’s obligation to
make such payment shall be discharged and replaced by the resulting CBFR
Revolving Borrowing or Swingline Loan. If the Borrower fails to make such
payment when due, the Administrative Agent shall notify each Revolving Lender of
the applicable LC Disbursement or Bank Guarantee Payment, the payment then due
from the Borrower in respect thereof, and such Lender’s Applicable Percentage
thereof. Promptly following receipt of such notice, each Revolving Lender shall
pay to the Administrative Agent its Applicable Percentage of the payment then
due from the Borrower, in the same manner as provided in Section 2.07 with
respect to Loans made by such Lender (and Section 2.07 shall apply, mutatis
mutandis, to the payment obligations of the Revolving Lenders), and the
Administrative Agent shall promptly pay to the Issuing Bank the amounts so
received by it from the Revolving Lenders. Promptly following receipt by the
Administrative Agent of any payment from the Borrower pursuant to this
paragraph, the Administrative Agent shall distribute such payment to the Issuing
Bank or, to the extent that Revolving Lenders have made payments pursuant to
this paragraph to reimburse the Issuing Bank, then to such Lenders and the
Issuing Bank, as their interests may appear. Any payment made by a Revolving
Lender pursuant to this paragraph to reimburse the Issuing Bank for any LC
Disbursement or Bank Guarantee Payment (other than the funding of CBFR Revolving
Loans or a Swingline Loan as contemplated above) shall not constitute a Loan and
shall not relieve the Borrower of its obligation to reimburse such LC
Disbursement or Bank Guarantee Payment.

(f)        Obligations Absolute.        The Borrower’s obligation to reimburse
LC Disbursements or Bank Guarantee Payment as provided in paragraph (e) of this
Section shall be absolute, unconditional and irrevocable, and shall be performed
strictly in accordance with the terms of this Agreement under any and all
circumstances whatsoever and irrespective of (i) any lack of validity or
enforceability of any Letter of Credit or Bank Guarantee or this Agreement, or
any term or provision therein or herein, (ii) any draft or other document
presented under a Letter of Credit or Bank Guarantee proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) any payment by the Issuing Bank under a Letter
of Credit or Bank Guarantee against presentation of a draft or other document
that does not comply with the terms of such Letter of Credit or Bank Guarantee,
or (iv) any other event or circumstance whatsoever, whether or not similar to
any of the foregoing, that might, but for the provisions of this Section,
constitute a legal or equitable discharge of, or provide a right of setoff
against, the Borrower’s obligations hereunder. None of the Administrative Agent,
the Revolving Lenders or the Issuing Bank, or any of their Related Parties,
shall have any liability or responsibility by reason of or in connection with
the issuance or transfer of any Letter of Credit or Bank Guarantee, or any
payment or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit or Bank Guarantee
(including any document required to make a drawing or payment thereunder), any
error in interpretation of technical terms or any consequence arising from

 

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causes beyond the control of the Issuing Bank; provided that the foregoing shall
not be construed to excuse the Issuing Bank from liability to the Borrower to
the extent of any direct damages (as opposed to special, indirect, consequential
or punitive damages, claims in respect of which are hereby waived by the
Borrower to the extent permitted by applicable law) suffered by the Borrower
that are caused by the Issuing Bank’s failure to exercise care when determining
whether drafts and other documents presented under a Letter of Credit or Bank
Guarantee comply with the terms thereof. The parties hereto expressly agree
that, in the absence of gross negligence or willful misconduct on the part of
the Issuing Bank (as finally determined by a court of competent jurisdiction),
the Issuing Bank shall be deemed to have exercised care in each such
determination. In furtherance of the foregoing and without limiting the
generality thereof, the parties agree that, with respect to documents presented
which appear on their face to be in substantial compliance with the terms of a
Letter of Credit or Bank Guarantee, the Issuing Bank may, in its sole
discretion, either accept and make payment upon such documents without
responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit or Bank Guarantee.

(g)        Disbursement Procedures.    The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit or Bank Guarantee. The Issuing Bank
shall promptly notify the Administrative Agent and the Borrower by telephone
(confirmed by fax) of such demand for payment and whether the Issuing Bank has
made or will make an LC Disbursement or Bank Guarantee Payment thereunder;
provided that any failure to give or delay in giving such notice shall not
relieve the Borrower of its obligation to reimburse the Issuing Bank and the
Revolving Lenders with respect to any such LC Disbursement or Bank Guarantee
Payment.

(h)        Interim Interest.    If the Issuing Bank shall make any LC
Disbursement or Bank Guarantee Payment, then, unless the Borrower shall
reimburse such LC Disbursement or Bank Guarantee Payment in full on the date
such LC Disbursement or Bank Guarantee Payment is made, the unpaid amount
thereof shall bear interest, for each day from and including the date such LC
Disbursement or Bank Guarantee Payment is made to but excluding the date that
the Borrower reimburses such LC Disbursement or Bank Guarantee Payment, at the
rate per annum then applicable to CBFR Revolving Loans and such interest shall
be due and payable on the date when such reimbursement is due; provided that, if
the Borrower fails to reimburse such LC Disbursement or Bank Guarantee Payment
when due pursuant to paragraph (e) of this Section, then Section 2.13(c) shall
apply. Interest accrued pursuant to this paragraph shall be for the account of
the Issuing Bank, except that interest accrued on and after the date of payment
by any Revolving Lender pursuant to paragraph (e) of this Section to reimburse
the Issuing Bank shall be for the account of such Lender to the extent of such
payment.

(i)        Replacement of the Issuing Bank.    The Issuing Bank may be replaced
at any time by written agreement among the Borrower, the Administrative Agent,
the replaced Issuing Bank and the successor Issuing Bank. The Administrative
Agent shall notify the Revolving Lenders of any such replacement of the Issuing
Bank. At the time any such replacement shall become effective, the Borrower
shall pay all unpaid fees accrued for the account of the replaced Issuing Bank
pursuant to Section 2.12(b). From and after the effective date of any such
replacement, (i) the successor Issuing Bank shall have all the rights and
obligations of the Issuing Bank under this Agreement with respect to Letters of
Credit or Bank Guarantees to be issued thereafter and (ii) references herein to
the term “Issuing Bank” shall be deemed to refer to such successor or to any
previous Issuing Bank, or to such successor and all previous Issuing Banks, as
the context shall require. After the replacement of an Issuing Bank hereunder,
the replaced Issuing Bank shall remain a party hereto and shall continue to have
all the rights and obligations of an Issuing Bank under this Agreement with
respect to Letters of Credit or Bank Guarantees then outstanding and issued by
it prior to such replacement, but shall not be required to issue additional
Letters of Credit or Bank Guarantees.

 

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(j)        Cash Collateralization.

(i)        The Borrower may, at its option, deposit cash collateral with respect
to any Letter of Credit or Bank Guarantee issued hereunder by depositing such
cash collateral in the LC Collateral Account (defined below).

(ii)        If (A) any Letter of Credit or Bank Guarantee is outstanding on any
date that is fourteen (14) Business Days prior to the Revolving Credit Maturity
Date, as the same may be extended from time to time, then with respect to each
such Letter of Credit or Bank Guarantee the Borrower shall immediately deposit
in an account with the Administrative Agent, in the name of the Administrative
Agent and for the benefit of the Revolving Lenders (the “LC Collateral
Account”), an amount in cash equal to 100% of the amount of each such Letter of
Credit or Bank Guarantee as of such date plus accrued and unpaid interest
thereon or (B) any Default shall occur and be continuing, then on the Business
Day that the Borrower receives notice from the Administrative Agent or the
Required Lenders (or, if the maturity of the Loans has been accelerated,
Revolving Lenders with LC Exposure representing greater than 66.6% of the
aggregate LC Exposure) demanding the deposit of cash collateral pursuant to this
paragraph, the Borrower shall deposit in an LC Collateral Account, an amount in
cash equal to 100% of the amount of the LC Exposure as of such date plus accrued
and unpaid interest thereon; provided that the obligation to deposit such cash
collateral pursuant to clause (B) shall become effective immediately, and such
deposit shall become immediately due and payable, without demand or other notice
of any kind, upon the occurrence of any Event of Default with respect to the
Borrower described in clause (h) or (i) of Article VII. The Borrower also shall
deposit cash collateral in accordance with this paragraph as and to the extent
required by Section 2.6, 2.11(b) or 2.20. Each such deposit shall be held by the
Administrative Agent as collateral for the payment and performance of the
Secured Obligations. The Administrative Agent shall have exclusive dominion and
control, including the exclusive right of withdrawal, over the LC Collateral
Account and the Borrower hereby grants the Administrative Agent a security
interest in the LC Collateral Account and all moneys or other assets on deposit
therein or credited thereto. Other than any interest earned on the investment of
such deposits, which investments shall be made at the option and sole discretion
of the Administrative Agent and at the Borrower’s risk and expense, such
deposits shall not bear interest. Interest or profits, if any, on such
investments shall accumulate in such account. Moneys in such account shall be
applied by the Administrative Agent to reimburse the Issuing Bank for LC
Disbursements or Bank Guarantee Payments for which it has not been reimbursed
and, to the extent not so applied, shall be held for the satisfaction of the
reimbursement obligations of the Borrower for the LC Exposure at such time or,
if the maturity of the Loans has been accelerated (but subject to the consent of
Revolving Lenders with LC Exposure representing greater than 66.6% of the
aggregate LC Exposure), be applied to satisfy other Secured Obligations. If the
Borrower is required to provide an amount of cash collateral hereunder as a
result of the occurrence of a Default, such amount (to the extent not applied as
aforesaid) shall be returned to the Borrower within three (3) Business Days
after all such Defaults have been cured or waived as confirmed in writing by the
Administrative Agent.

(k)        Issuing Bank Reports to the Administrative Agent.    Unless otherwise
agreed by the Administrative Agent, each Issuing Bank shall, in addition to its
notification obligations set forth elsewhere in this Section, report in writing
to the Administrative Agent (i) periodic activity (for such period or recurrent
periods as shall be requested by the Administrative Agent) in respect of Letters
of Credit and Bank Guarantees issued by such Issuing Bank, including all
issuances, extensions, amendments and renewals, all expirations and cancelations
and all disbursements and reimbursements, (ii) reasonably prior to the time that
such Issuing Bank issues, amends, renews or extends any Letter of

 

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Credit or Bank Guarantee, the date of such issuance, amendment, renewal or
extension, and the stated amount of the Letters of Credit or Bank Guarantees
issued, amended, renewed or extended by it and outstanding after giving effect
to such issuance, amendment, renewal or extension (and whether the amounts
thereof shall have changed), (iii) on each Business Day on which such Issuing
Bank makes any LC Disbursement or Bank Guarantee Payment, the date and amount of
such LC Disbursement or Bank Guarantee Payment, (iv) on any Business Day on
which the Borrower fails to reimburse an LC Disbursement or Bank Guarantee
Payment required to be reimbursed to such Issuing Bank on such day, the date of
such failure and the amount of such LC Disbursement or Bank Guarantee Payment,
and (v) on any other Business Day, such other information as the Administrative
Agent shall reasonably request as to the Letters of Credit or Bank Guarantees
issued by such Issuing Bank.

(l)        LC Exposure Determination.    For all purposes of this Agreement, the
amount of a Letter of Credit or Bank Guarantee that, by its terms or the terms
of any document related thereto, provides for one or more automatic increases in
the stated amount thereof shall be deemed to be the maximum stated amount of
such Letter of Credit or Bank Guarantee after giving effect to all such
increases, whether or not such maximum stated amount is in effect at the time of
determination.

SECTION 2.07.  Funding of Borrowings.

(a)        Each Lender shall make each Loan to be made by such Lender hereunder
on the proposed date thereof by wire transfer of immediately available funds by
1:00 p.m., New York time, to the account of the Administrative Agent most
recently designated by it for such purpose by notice to the Lenders in an amount
equal to such Lender’s Applicable Percentage; provided that Swingline Loans
shall be made as provided in Section 2.05. The Administrative Agent will make
such Loans available to the Borrower by promptly crediting the amounts so
received, in like funds, to the Funding Account(s); provided that CBFR Revolving
Loans made to finance the reimbursement of an LC Disbursement as provided in
Section 2.06(e) shall be remitted by the Administrative Agent to the Issuing
Bank.

(b)        Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender’s share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Administrative Agent, then the
applicable Lender and the Borrower severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount with interest thereon, for
each day from and including the date such amount is made available to the
Borrower to but excluding the date of payment to the Administrative Agent, at
(i) in the case of such Lender, the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation or (ii) in the case of the Borrower,
the interest rate applicable to CBFR Revolving Loans. If such Lender pays such
amount to the Administrative Agent, then such amount shall constitute such
Lender’s Loan included in such Borrowing.

SECTION 2.08.  Interest Elections.

(a) Each Borrowing initially shall be of the Type specified in the applicable
Borrowing Request and, in the case of a Eurodollar Borrowing, shall have an
initial Interest Period as specified in such Borrowing Request. Thereafter, the
Borrower may elect to convert such Borrowing to a different Type or to continue
such Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest
Periods therefor, all as provided in this Section. The Borrower may elect
different options with respect to different portions of the affected Borrowing,
in which case each such portion shall be allocated ratably

 

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among the Lenders holding the Loans comprising such Borrowing, and the Loans
comprising each such portion shall be considered a separate Borrowing. This
Section shall not apply to Swingline Borrowings, which may not be converted or
continued.

(b)    To make an election pursuant to this Section, the Borrower shall notify
the Administrative Agent of such election by telephone or in writing by the time
that a Borrowing Request would be required under Section 2.03 if the Borrower
were requesting a Borrowing of the Type resulting from such election to be made
on the effective date of such election. Each such Interest Election Request
shall be irrevocable. Each such telephonic Interest Election Request shall be
confirmed promptly by hand delivery or fax to the Administrative Agent of a
written Interest Election Request in a form approved by the Administrative Agent
and signed by the Borrower.

(c)  Each telephonic and written Interest Election Request shall specify the
following information in compliance with Section 2.02:

(i)   the Borrowing to which such Interest Election Request applies and, if
different options are being elected with respect to different portions thereof,
the portions thereof to be allocated to each resulting Borrowing (in which case
the information to be specified pursuant to clauses (iii) and (iv) below shall
be specified for each resulting Borrowing);

(ii)  the effective date of the election made pursuant to such Interest Election
Request, which shall be a Business Day;

(iii)    whether the resulting Borrowing is to be a CBFR Borrowing or a
Eurodollar Borrowing; and

(iv)    if the resulting Borrowing is a Eurodollar Borrowing, the Interest
Period to be applicable thereto after giving effect to such election, which
shall be a period contemplated by the definition of the term “Interest Period”.

If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month’s duration.

(d)  Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the applicable Class of the
details thereof and of such Lender’s portion of each resulting Borrowing.

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

SECTION 2.09.    Termination and Reduction of Commitments; Increase in Revolving
Commitments.

(a)  Unless previously terminated, all the Revolving Commitments shall terminate
on the Revolving Credit Maturity Date.

 

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(b)  The Borrower may at any time terminate the Revolving Commitments upon
(i) the payment in full of all outstanding Revolving Loans and LC Disbursements,
together with accrued and unpaid interest thereon, (ii) the cancellation and
return of all outstanding Letters of Credit (or alternatively, with respect to
each such Letter of Credit, the furnishing to the Administrative Agent of a cash
deposit (or at the discretion of the Administrative Agent a backup standby
letter of credit satisfactory to the Administrative Agent and the Issuing Bank)
in an amount equal to 100% of the LC Exposure as of such date), (iii) the
payment in full of the accrued and unpaid fees, and (iv) the payment in full of
all reimbursable expenses and other Obligations together with accrued and unpaid
interest thereon.

(c)  The Borrower may from time to time reduce the Revolving Commitments;
provided that (i) each reduction of the Revolving Commitments shall be in an
amount that is an integral multiple of $1,000,000 and not less than $5,000,000
and (ii) the Borrower shall not terminate or reduce the Revolving Commitments
if, after giving effect to any concurrent prepayment of the Revolving Loans in
accordance with Section 2.11, the Aggregate Revolving Exposure would exceed the
aggregate Revolving Commitments.

(d)  The Borrower shall notify the Administrative Agent of any election to
terminate or reduce the Revolving Commitments under paragraph (b) or (c) of this
Section at least three (3) Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by the
Borrower pursuant to this Section shall be irrevocable; provided that a notice
of termination of the Revolving Commitments delivered by the Borrower may state
that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by the Borrower (by notice
to the Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of the Revolving
Commitments shall be permanent. Each reduction of the Commitments shall be made
ratably among the Lenders in accordance with their respective Revolving
Commitments.

(e)  The Borrower shall have the right to increase the Revolving Commitments by
obtaining additional Revolving Commitments, either from one or more of the
Lenders or another lending institution, provided that (i) any such request for
an increase shall be in a minimum amount of $5,000,000 and, if in excess
thereof, in increments of $1,000,000, (ii) the Borrower may make a maximum of
two (2) such requests, (iii) after giving effect thereto, the sum of the total
of the additional Commitments does not exceed $25,000,000, (iv) the
Administrative Agent, the Swingline Lender and the Issuing Bank have approved
the identity of any such new Lender, such approvals not to be unreasonably
withheld, (v) any such new Lender assumes all of the rights and obligations of a
“Lender” hereunder, and (vi) the procedures described in Section 2.09(f) below
have been satisfied. Nothing contained in this Section 2.09 shall constitute, or
otherwise be deemed to be, a commitment on the part of any Lender to increase
its Commitment hereunder at any time.

(f)  Any amendment hereto for such an increase or addition shall be in form and
substance satisfactory to the Administrative Agent and shall only require the
written signatures of the Administrative Agent, the Borrower and each Lender
being added or increasing its Commitment, subject only to the approval of all
Lenders if any such increase or addition would cause the Revolving Commitments
to exceed $50,000,000. As a condition precedent to such an increase or addition,
the Borrower shall deliver to the Administrative Agent (i) a certificate of each
Loan Party signed by an authorized officer of such Loan Party (A) certifying and
attaching the resolutions adopted by such Loan Party approving or consenting to
such increase, and (B) in the case of the Borrower, certifying that, before and
after giving effect to such increase or addition, (1) the representations and
warranties contained in Article III and the other Loan Documents are true and
correct, except to the extent that such

 

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representations and warranties specifically refer to an earlier date, in which
case they are true and correct as of such earlier date, (2) no Default exists
and (3) the Borrower is in compliance (on a pro forma basis) with the covenants
contained in Section 6.12, and (ii) legal opinions and documents consistent with
those delivered on the Effective Date, to the extent requested by the
Administrative Agent.

(g)        On the effective date of any such increase or addition, (i) any
Lender increasing (or, in the case of any newly added Lender, extending) its
Revolving Commitment shall make available to the Administrative Agent such
amounts in immediately available funds as the Administrative Agent shall
determine, for the benefit of the other Lenders, as being required in order to
cause, after giving effect to such increase or addition and the use of such
amounts to make payments to such other Lenders, each Lender’s portion of the
outstanding Revolving Loans of all the Lenders to equal its revised Applicable
Percentage of such outstanding Revolving Loans, and the Administrative Agent
shall make such other adjustments among the Lenders with respect to the
Revolving Loans then outstanding and amounts of principal, interest, Commitment
Fees and other amounts paid or payable with respect thereto as shall be
necessary, in the opinion of the Administrative Agent, in order to effect such
reallocation and (ii) the Borrower shall be deemed to have repaid and reborrowed
all outstanding Revolving Loans as of the date of any increase (or addition) in
the Revolving Commitments (with such reborrowing to consist of the Types of
Revolving Loans, with related Interest Periods if applicable, specified in a
notice delivered by the Borrower, in accordance with the requirements of
Section 2.03). The deemed payments made pursuant to clause (ii) of the
immediately preceding sentence shall be accompanied by payment of all accrued
interest on the amount prepaid and, in respect of each Eurodollar Loan, shall be
subject to indemnification by the Borrower pursuant to the provisions of
Section 2.16 if the deemed payment occurs other than on the last day of the
related Interest Periods. Within a reasonable time after the effective date of
any increase or addition, the Administrative Agent shall, and is hereby
authorized and directed to, revise the Commitment Schedule to reflect such
increase or addition and shall distribute such revised Commitment Schedule to
each of the Lenders and the Borrower, whereupon such revised Commitment Schedule
shall replace the old Commitment Schedule and become part of this Agreement.

SECTION 2.10.   Repayment and Amortization of Loans; Evidence of Debt.

(a)        The Borrower hereby unconditionally promises to pay (i) to the
Administrative Agent for the account of each Revolving Lender the then unpaid
principal amount of each Revolving Loan on the Revolving Credit Maturity Date,
and (ii) to the Swingline Lender the then unpaid principal amount of each
Swingline Loan on the earlier of the Revolving Credit Maturity Date and the
fifth Business Day after such Swingline Loan is made; provided that on each date
that a Revolving Loan is made, the Borrower shall repay all Swingline Loans then
outstanding and the proceeds of any such Revolving Loan shall be applied by the
Administrative Agent to repay any Swingline Loans outstanding.

(b)  Each Lender shall maintain in accordance with its usual practice an account
or accounts evidencing the Indebtedness of the Borrower to such Lender resulting
from each Loan made by such Lender, including the amounts of principal and
interest payable and paid to such Lender from time to time hereunder.

(c)  The Administrative Agent shall maintain accounts in which it shall record
(i) the amount of each Loan made hereunder, the Class and Type thereof and the
Interest Period applicable thereto, if any, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder for the account of the Lenders and each Lender’s share thereof.

 

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(d)  The entries made in the accounts maintained pursuant to paragraph (b) or
(c) of this Section shall be prima facie evidence of the existence and amounts
of the obligations recorded therein; provided that the failure of any Lender or
the Administrative Agent to maintain such accounts or any error therein shall
not in any manner affect the obligation of the Borrower to repay the Loans in
accordance with the terms of this Agreement.

(e)  Any Lender may request that Loans made by it be evidenced by a promissory
note. In such event, the Borrower shall prepare, execute and deliver to such
Lender a promissory note payable to the order of such Lender (or, if requested
by such Lender, to such Lender and its registered assigns) and in a form
approved by the Administrative Agent. Thereafter, the Loans evidenced by such
promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 9.04) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).

SECTION 2.11.  Prepayment of Loans.

(a)  The Borrower shall have the right at any time and from time to time to
prepay any Borrowing in whole or in part, subject to prior notice in accordance
with paragraph (e) of this Section and, if applicable, payment of any break
funding expenses under Section 2.16.

(b)  In the event and on such occasion that the Aggregate Revolving Exposure
exceeds the aggregate Revolving Commitments, the Borrower shall prepay the
Revolving Loans, LC Exposure and/or Swingline Loans (or, if no such Borrowings
are outstanding, deposit cash collateral in the LC Collateral Account in an
aggregate amount equal to such excess, in accordance with Section 2.06(j)).

(c)  In the event and on each occasion that any Net Proceeds are received by or
on behalf of any Loan Party or any Subsidiary in respect of any Prepayment
Event, the Borrower shall, immediately after such Net Proceeds are received by
any Loan Party or Subsidiary, prepay the Obligations and cash collateralize the
LC Exposure as set forth in Section 2.11(d) below in an aggregate amount equal
to 100% of such Net Proceeds, provided that, in the case of any event described
in clause (a) or (b) of the definition of the term “Prepayment Event”, if the
Borrower shall deliver to the Administrative Agent a certificate of a Financial
Officer to the effect that the Loan Parties intend to apply the Net Proceeds
from such event (or a portion thereof specified in such certificate), within
90 days after receipt of such Net Proceeds, to acquire (or replace or rebuild)
real property, equipment or other tangible assets (excluding inventory) to be
used in the business of the Loan Parties, and certifying that no Default has
occurred and is continuing, then no prepayment shall be required pursuant to
this paragraph in respect of the Net Proceeds specified in such certificate,
provided that to the extent of any such Net Proceeds that have not been so
applied by the end of such 90-day period, a prepayment shall be required at such
time in an amount equal to such Net Proceeds that have not been so applied;
provided further that the Borrower shall not be permitted to make elections to
use Net Proceeds to acquire (or replace or rebuild) real property, equipment or
other tangible assets (excluding inventory) with respect to Net Proceeds in any
fiscal year in an aggregate amount in excess of $1,000,000.

(d)  All prepayments required to be made pursuant to Section 2.11(c) shall be
applied, first to prepay the Revolving Loans (including Swingline Loans) without
a corresponding reduction in the Revolving Commitments and second if a request
has been made pursuant to Section 2.06(j), to cash collateralize outstanding LC
Exposure.

(e)  The Borrower shall notify the Administrative Agent (and, in the case of
prepayment of a Swingline Loan, the Swingline Lender) by telephone (confirmed by
fax) of any prepayment under this Section: (i) in the case of prepayment of a
Eurodollar Borrowing, not later than 10:00 a.m., New

 

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York time, three (3) Business Days before the date of prepayment, (ii) in the
case of prepayment of a CBFR Borrowing, not later than 10:00 a.m., New York
time, one (1) Business Day before the date of prepayment or (iii) in the case of
prepayment of a Swingline Loan, not later than 11:00 a.m., New York time, on the
date of prepayment. Each such notice shall be irrevocable and shall specify the
prepayment date and the principal amount of each Borrowing or portion thereof to
be prepaid; provided that if a notice of prepayment is given in connection with
a conditional notice of termination of the Revolving Commitments as contemplated
by Section 2.09, then such notice of prepayment may be revoked if such notice of
termination is revoked in accordance with Section 2.09. Promptly following
receipt of any such notice, the Administrative Agent shall advise the Lenders of
the contents thereof. Each partial prepayment of any Revolving Borrowing shall
be in an amount that would be permitted in the case of an advance of a Borrowing
of the same Type as provided in Section 2.02, except as necessary to apply fully
the required amount of a mandatory prepayment. Each prepayment of a Borrowing
shall be applied ratably to the Loans included in the prepaid Borrowing.
Prepayments shall be accompanied by (i) accrued interest to the extent required
by Section 2.13 and (ii) break funding payments pursuant to Section 2.16.

SECTION 2.12.  Fees.

(a)  The Borrower agrees to pay to the Administrative Agent a Commitment Fee for
the account of each Revolving Lender, which shall accrue at the Applicable Rate
on the daily amount of the undrawn portion of the Revolving Commitment of such
Lender during the period from and including the Effective Date to but excluding
the date on which the Lenders’ Revolving Commitments terminate; it being
understood that the LC Exposure of a Lender shall be included in the drawn
portion of the Revolving Commitment of such Lender for purposes of calculating
the Commitment Fees. Accrued Commitment Fees shall be payable in arrears on the
last day of March, June, September and December of each year and on the date on
which the Revolving Commitments terminate, commencing on the first such date to
occur after the date hereof. All Commitment Fees shall be computed on the basis
of a year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).

(b)  The Borrower agrees to pay (i) to the Administrative Agent for the account
of each Revolving Lender a participation fee with respect to its participations
in Letters of Credit, which shall accrue at the Applicable LC Rate on the daily
amount of such Lender’s LC Exposure (excluding any portion thereof attributable
to unreimbursed LC Disbursements) during the period from and including the
Effective Date to but excluding the later of the date on which such Lender’s
Revolving Commitment terminates and the date on which such Lender ceases to have
any LC Exposure, and (ii) to the Issuing Bank a fronting fee, which shall accrue
at the rate of 0.25% per annum on the daily amount of the LC Exposure
attributable to Letters of Credit issued by such Issuing Bank (excluding any
portion thereof attributable to unreimbursed LC Disbursements) during the period
from and including the Effective Date to but excluding the later of the date of
termination of the Commitments and the date on which there ceases to be any LC
Exposure, as well as the Issuing Bank’s standard fees and commissions with
respect to the issuance, amendment, cancellation, negotiation, transfer,
presentment, renewal or extension of any Letter of Credit or processing of
drawings thereunder; provided, however, that the Borrower shall not be
responsible for any fronting fees under clause (ii) above during any periods
which Chase is the only Lender under this Agreement. Participation fees and
fronting fees accrued through and including the last day of March, June,
September and December of each year shall be payable on the third Business Day
following such last day, commencing on the first such date to occur after the
Effective Date; provided that all such fees shall be payable on the date on
which the Revolving Commitments terminate and any such fees accruing after the
date on which the Revolving Commitments terminate shall be payable on demand.
Any other fees payable to the Issuing Bank pursuant to this paragraph shall be
payable within ten (10) days after demand. All participation fees and fronting
fees shall be computed on the basis of a year of 360 days and shall be payable
for the actual number of days elapsed (including the first day but excluding the
last day).

 

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(c)  To the extent permitted by law, the Borrower agrees to pay a late fee in an
amount not to exceed four percent (4%) of any payment that is more than fifteen
(15) days late. The imposition and payment of a late fee shall not constitute a
waiver by the Administrative Agent’s rights with respect to any such Default in
connection with any such late payment.

(d)  The Borrower agrees to pay to the Administrative Agent, for its own
account, fees payable in the amounts and at the times separately agreed upon
between the Borrower and the Administrative Agent.

(e)  All fees payable hereunder shall be paid on the dates due, in immediately
available funds, to the Administrative Agent (or to the Issuing Bank, in the
case of fees payable to it) for distribution, in the case of Commitment Fees and
participation fees, to the Lenders entitled thereto. Fees paid shall not be
refundable under any circumstances.

SECTION 2.13.  Interest.

(a)  The Loans comprising each CBFR Borrowing (including each Swingline Loan)
shall bear interest at the CB Floating Rate plus the Applicable Rate.

(b)  The Loans comprising each Eurodollar Borrowing shall bear interest at the
Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the
Applicable Rate.

(c) Notwithstanding the foregoing, during the occurrence and continuance of an
Event of Default, the Administrative Agent or the Required Lenders may, at their
option, by notice to the Borrower (which notice may be revoked at the option of
the Required Lenders notwithstanding any provision of Section 9.02 requiring the
consent of “each Lender affected thereby” for reductions in interest rates),
declare that (i) all Loans shall bear interest at 4% plus the rate otherwise
applicable to such Loans as provided in the preceding paragraphs of this Section
or (ii) in the case of any other amount outstanding hereunder, such amount shall
accrue at 4% plus the rate applicable to such fee or other obligation as
provided hereunder.

(d)  Accrued interest on each Loan (for CBFR Loans, accrued through the last day
of the prior calendar month) shall be payable in arrears on each Interest
Payment Date for such Loan and, in the case of Revolving Loans, upon termination
of the Revolving Commitments; provided that (i) interest accrued pursuant to
paragraph (c) of this Section shall be payable on demand, (ii) in the event of
any repayment or prepayment of any Loan (other than a prepayment of a CBFR
Revolving Loan prior to the end of the Availability Period), accrued interest on
the principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment and (iii) in the event of any conversion of any
Eurodollar Loan prior to the end of the current Interest Period therefor,
accrued interest on such Loan shall be payable on the effective date of such
conversion.

(e)  All interest hereunder shall be computed on the basis of a year of 360
days, except that interest computed by reference to the CB Floating Rate shall
be computed on the basis of a year of 365 days (or 366 days in a leap year), and
in each case shall be payable for the actual number of days elapsed (including
the first day but excluding the last day). The applicable CB Floating Rate,
Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent,
and such determination shall be conclusive absent manifest error.

 

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SECTION 2.14.  Alternate Rate of Interest. If prior to the commencement of any
Interest Period for a Eurodollar Borrowing:

(a)        the Administrative Agent determines (which determination shall be
conclusive and binding absent manifest error) that adequate and reasonable means
do not exist for ascertaining (including, without limitation, by means of an
Interpolated Rate) the Adjusted LIBO Rate or the LIBO Rate, as applicable, for
such Interest Period; or

(b)        the Administrative Agent is advised by the Required Lenders that the
Adjusted LIBO Rate or the LIBO Rate, as applicable, for the applicable Interest
Period will not adequately and fairly reflect the cost to such Lenders (or
Lender) of making or maintaining their Loans included in such Borrowing for such
Interest Period.

then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by electronic communication as provided in Section 9.01 as promptly as
practicable thereafter and, until the Administrative Agent notifies the Borrower
and the Lenders that the circumstances giving rise to such notice no longer
exist, (i) any Interest Election Request that requests the conversion of any
Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing shall
be ineffective and any such Eurodollar Borrowing shall be repaid on the last day
of the then current Interest Period applicable thereto, and (ii) if any
Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made
as a CBFR Borrowing.

SECTION 2.15.  Increased Costs. (a) If any Change in Law shall:

(i)  impose, modify or deem applicable any reserve, special deposit, liquidity
or similar requirement (including any compulsory loan requirement, insurance
charge or other assessment) against assets of, deposits with or for the account
of, or credit extended by, any Lender (except any such reserve requirement
reflected in the Adjusted LIBO Rate) or the Issuing Bank; or

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

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

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

(b)  If any Lender or the Issuing Bank determines that any Change in Law
regarding capital or liquidity requirements has or would have the effect of
reducing the rate of return on such Lender’s or the Issuing Bank’s capital or on
the capital of such Lender’s or the Issuing Bank’s holding

 

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company, if any, as a consequence of this Agreement, the Commitments of or the
Loans made by, or participations in Letters of Credit or Swingline Loans held
by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level
below that which such Lender or the Issuing Bank or such Lender’s or the Issuing
Bank’s holding company could have achieved but for such Change in Law (taking
into consideration such Lender’s or the Issuing Bank’s policies and the policies
of such Lender’s or the Issuing Bank’s holding company with respect to capital
adequacy and liquidity), then from time to time the Borrower will pay to such
Lender or the Issuing Bank, as the case may be, such additional amount or
amounts as will compensate such Lender or the Issuing Bank or such Lender’s or
the Issuing Bank’s holding company for any such reduction suffered.

(c)  A certificate of a Lender or the Issuing Bank setting forth the amount or
amounts necessary to compensate such Lender or the Issuing Bank or its holding
company, as the case may be, as specified in paragraph (a) or (b) of this
Section shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender or the Issuing Bank, as the
case may be, the amount shown as due on any such certificate within ten
(10) days after receipt thereof.

(d)    Failure or delay on the part of any Lender or the Issuing Bank to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender’s or the Issuing Bank’s right to demand such compensation; provided that
the Borrower shall not be required to compensate a Lender or the Issuing Bank
pursuant to this Section for any increased costs or reductions incurred more
than 270 days prior to the date that such Lender or the Issuing Bank, as the
case may be, notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender’s or the Issuing Bank’s
intention to claim compensation therefor; provided further that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 270-day period referred to above shall be extended to include the period of
retroactive effect thereof.

SECTION 2.16.    Break Funding Payments.    In the event of (a) the payment of
any principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default or as a
result of any prepayment pursuant to Section 2.11), (b) the conversion of any
Eurodollar Loan other than on the last day of the Interest Period applicable
thereto, (c) the failure to borrow, convert, continue or prepay any Eurodollar
Loan on the date specified in any notice delivered pursuant hereto (regardless
of whether such notice may be revoked under Section 2.09(d) and is revoked in
accordance therewith), or (d) the assignment of any Eurodollar Loan other than
on the last day of the Interest Period applicable thereto as a result of a
request by the Borrower pursuant to Section 2.19 or 9.02(d), then, in any such
event, the Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event. In the case of a Eurodollar Loan, such loss, cost or
expense to any Lender shall be deemed to include an amount determined by such
Lender to be the excess, if any, of (i) the amount of interest which would have
accrued on the principal amount of such Eurodollar Loan had such event not
occurred, at the Adjusted LIBO Rate that would have been applicable to such
Eurodollar Loan, for the period from the date of such event to the last day of
the then current Interest Period therefor (or, in the case of a failure to
borrow, convert or continue, for the period that would have been the Interest
Period for such Eurodollar Loan), over (ii) the amount of interest which would
accrue on such principal amount for such period at the interest rate which such
Lender would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the eurodollar
market. A certificate of any Lender setting forth any amount or amounts that
such Lender is entitled to receive pursuant to this Section shall be delivered
to the Borrower and shall be conclusive absent manifest error. The Borrower
shall pay such Lender the amount shown as due on any such certificate within ten
(10) days after receipt thereof.

 

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SECTION 2.17.  Taxes.

(a)  Withholding Taxes; Gross-Up; Payments Free of Taxes.  Any and all payments
by or on account of any obligation of any Loan Party under any Loan Document
shall be made without deduction or withholding for any Taxes, except as required
by applicable law. If any applicable law (as determined in the good faith
discretion of an applicable withholding agent) requires the deduction or
withholding of any Tax from any such payment by a withholding agent, then the
applicable withholding agent shall be entitled to make such deduction or
withholding and shall timely pay the full amount deducted or withheld to the
relevant Governmental Authority in accordance with applicable law and, if such
Tax is an Indemnified Tax, then the sum payable by the applicable Loan Party
shall be increased as necessary so that after such deduction or withholding has
been made (including such deductions and withholdings applicable to additional
sums payable under this Section 2.17), the applicable Recipient receives an
amount equal to the sum it would have received had no such deduction or
withholding been made.

(b)  Payment of Other Taxes by Loan Parties.  The Loan Parties shall timely pay
to the relevant Governmental Authority in accordance with applicable law, or at
the option of the Administrative Agent timely reimburse it for, Other Taxes.

(c)  Evidence of Payment.  As soon as practicable after any payment of Taxes by
any Loan Party to a Governmental Authority pursuant to this Section 2.17, such
Loan Party shall deliver to the Administrative Agent the original or a certified
copy of a receipt issued by such Governmental Authority evidencing such payment,
a copy of the return reporting such payment, or other evidence of such payment
reasonably satisfactory to the Administrative Agent.

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

(e)    Indemnification by the Lenders.    Each Lender shall severally indemnify
the Administrative Agent, within ten (10) days after demand therefor, for
(i) any Indemnified Taxes attributable to such Lender (but only to the extent
that any Loan Party has not already indemnified the Administrative Agent for
such Indemnified Taxes and without limiting the obligation of the Loan Parties
to do so), (ii) any Taxes attributable to such Lender’s failure to comply with
the provisions of Section 9.04(c) relating to the maintenance of a Participant
Register and (iii) any Excluded Taxes attributable to such Lender, in each case,
that are payable or paid by the Administrative Agent in connection with any Loan
Document, and any reasonable expenses arising therefrom or with respect thereto,
whether or not such Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority. A certificate as to the amount of such payment
or liability delivered to any Lender by the Administrative Agent shall be
conclusive absent manifest error. Each Lender hereby authorizes the
Administrative Agent to set off and apply any and all amounts at any time owing
to such Lender under any Loan Document or otherwise payable by the
Administrative Agent to such Lender from any other source against any amount due
to the Administrative Agent under this paragraph (e).

 

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(f)   Status of Lenders.

(i) Any Lender that is entitled to an exemption from or reduction of withholding
Tax with respect to payments made under any Loan Document shall deliver to the
Borrower and the Administrative Agent, at the time or times reasonably requested
by the Borrower or the Administrative Agent, such properly completed and
executed documentation reasonably requested by the Borrower or the
Administrative Agent as will permit such payments to be made without withholding
or at a reduced rate of withholding. In addition, any Lender, if reasonably
requested by the Borrower or the Administrative Agent, shall deliver such other
documentation prescribed by applicable law or reasonably requested by the
Borrower or the Administrative Agent as will enable the Borrower or the
Administrative Agent to determine whether or not such Lender is subject to
backup withholding or information reporting requirements. Notwithstanding
anything to the contrary in the preceding two sentences, the completion,
execution and submission of such documentation (other than such documentation
set forth in Section 2.17(f)(ii)(A), (ii)(B) and (ii)(D) below) shall not be
required if in the Lender’s reasonable judgment such completion, execution or
submission would subject such Lender to any material unreimbursed cost or
expense or would materially prejudice the legal or commercial position of such
Lender.

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

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

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

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

(2) in the case of a Foreign Lender claiming that its extension of credit will
generate U.S. effectively connected income, executed originals of IRS Form
W-8ECI;

(3) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Code, (x) a certificate
substantially in the form of Exhibit C-1 to the effect that such Foreign Lender
is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10
percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B)
of the Code, or a “controlled foreign corporation” described in
Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and
(y) executed originals of IRS Form W-8BEN; or

 

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(4) to the extent a Foreign Lender is not the Beneficial Owner, executed
originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, a
U.S. Tax Compliance Certificate substantially in the form of Exhibit C-2 or
Exhibit C-3, IRS Form W-9, and/or other certification documents from each
Beneficial Owner, as applicable; provided that if the Foreign Lender is a
partnership and one or more direct or indirect partners of such Foreign Lender
are claiming the portfolio interest exemption, such Foreign Lender may provide a
U.S. Tax Compliance Certificate substantially in the form of Exhibit C-4 on
behalf of each such direct and indirect partner;

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

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

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

(g)    Treatment of Certain Refunds.    If any party determines, in its sole
discretion exercised in good faith, that it has received a refund of any Taxes
as to which it has been indemnified pursuant to this Section 2.17 (including by
the payment of additional amounts pursuant to this Section 2.17), it shall pay
to the indemnifying party an amount equal to such refund (but only to the extent
of indemnity payments made under this Section 2.17 with respect to the Taxes
giving rise to such refund), net of all out-of-pocket expenses (including Taxes)
of such indemnified party and without interest (other than any interest paid by
the relevant Governmental Authority with respect to such refund). Such
indemnifying party, upon the request of such indemnified party, shall repay to
such indemnified party the amount paid over pursuant to this paragraph (g) (plus
any penalties, interest or other charges imposed by the relevant Governmental
Authority) in the event that such indemnified party is required to repay such
refund to such Governmental Authority. Notwithstanding anything to the contrary
in this paragraph (g), in no event will the indemnified party be required to pay
any amount to an indemnifying party pursuant to this paragraph (g) the payment
of which would place the indemnified party in a less favorable net after-Tax
position than the indemnified party would have been in if the Tax subject to
indemnification and

 

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giving rise to such refund had not been deducted, withheld or otherwise imposed
and the indemnification payments or additional amounts giving rise to such
refund had never been paid. This paragraph (g) shall not be construed to require
any indemnified party to make available its Tax returns (or any other
information relating to its Taxes that it deems confidential) to the
indemnifying party or any other Person.

(h)  Survival.   Each party’s obligations under this Section 2.17 shall survive
the resignation or replacement of the Administrative Agent or any assignment of
rights by, or the replacement of, a Lender, the termination of the Commitments
and the repayment, satisfaction or discharge of all obligations under any Loan
Document.

(i)  Defined Terms.    For purposes of this Section 2.17, the term “applicable
law” includes FATCA.

SECTION 2.18.  Payments Generally; Allocation of Proceeds; Sharing of Set-offs.

(a)        The Borrower shall make each payment required to be made by it
hereunder (whether of principal, interest, fees or reimbursement of LC
Disbursements, or of amounts payable under Sections 2.15, 2.16 or 2.17, or
otherwise) prior to 2:00 p.m., New York time, on the date when due, in
immediately available funds, without set-off or counterclaim. Any amounts
received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at One Chase Square,
11th Floor, Rochester, NY 14643-0001, except payments to be made directly to the
Issuing Bank or Swingline Lender as expressly provided herein and except that
payments pursuant to Sections 2.15, 2.16, 2.17 and 9.03 shall be made directly
to the Persons entitled thereto. The Administrative Agent shall distribute any
such payments received by it for the account of any other Person to the
appropriate recipient promptly following receipt thereof. If any payment
hereunder shall be due on a day that is not a Business Day, the date for payment
shall be extended to the next succeeding Business Day, and, in the case of any
payment accruing interest, interest thereon shall be payable for the period of
such extension. All payments hereunder shall be made in dollars.

(b)        Any proceeds of Collateral received by the Administrative Agent
(i) not constituting either (A) a specific payment of principal, interest, fees
or other sum payable under the Loan Documents (which shall be applied as
specified by the Borrower), or (B) a mandatory prepayment (which shall be
applied in accordance with Section 2.11) or (ii) after an Event of Default has
occurred and is continuing and the Administrative Agent so elects or the
Required Lenders so direct, shall be applied ratably first, to pay any fees,
indemnities, or expense reimbursements including amounts then due to the
Administrative Agent, the Swingline Lender and the Issuing Bank from the
Borrower (other than in connection with Banking Services Obligations or Swap
Agreement Obligations), second, to pay any fees or expense reimbursements then
due to the Lenders from the Borrower (other than in connection with Banking
Services Obligations or Swap Agreement Obligations), third, to pay interest then
due and payable on the Loans ratably, fourth, to prepay principal on the Loans
and unreimbursed LC Disbursements and to pay any amounts owing with respect to
Swap Agreement Obligations up to and including the amount most recently provided
to the Administrative Agent pursuant to Section 2.22, ratably, fifth, to pay an
amount to the Administrative Agent equal to one hundred percent (100%) of the
aggregate LC Exposure, to be held as cash collateral for such Obligations, and
sixth, to the payment of any amounts owing in respect of Banking Services
Obligations up to and including the amount most recently provided to the
Administrative Agent pursuant to Section 2.22, and seventh, to the payment of
any other Secured Obligation due to the Administrative Agent or any Lender from
the Borrower or any other Loan Party. Notwithstanding anything to the contrary
contained in this Agreement, unless so directed by the Borrower, or unless a
Default is in existence, neither the Administrative Agent nor any

 

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Lender shall apply any payment which it receives to any Eurodollar Loan of a
Class, except (i) on the expiration date of the Interest Period applicable
thereto, or (ii) in the event, and only to the extent, that there are no
outstanding CBFR Loans of the same Class and, in any such event, the Borrower
shall pay the break funding payment required in accordance with Section 2.16.
The Administrative Agent and the Lenders shall have the continuing and exclusive
right to apply and reverse and reapply any and all such proceeds and payments to
any portion of the Secured Obligations.

Notwithstanding the foregoing, Secured Obligations arising under Banking
Services Obligations or Swap Agreement Obligations shall be excluded from the
application described above and paid in clause seventh if the Administrative
Agent has not received written notice thereof, together with such supporting
documentation as the Administrative Agent may have reasonably requested from the
applicable provider of such Banking Services or Swap Agreements.

(c)        At the election of the Administrative Agent, all payments of
principal, interest, LC Disbursements, fees, premiums, reimbursable expenses
(including, without limitation, all reimbursement for fees, costs and expenses
pursuant to Section 9.03), and other sums payable under the Loan Documents, may
be paid from the proceeds of Borrowings made hereunder, whether made following a
request by the Borrower pursuant to Section 2.03 or 2.05 or a deemed request as
provided in this Section or may be deducted from any deposit account of the
Borrower maintained with the Administrative Agent. The Borrower hereby
irrevocably authorizes (i) the Administrative Agent to make a Borrowing for the
purpose of paying each payment of principal, interest and fees as it becomes due
hereunder or any other amount due under the Loan Documents and agrees that all
such amounts charged shall constitute Loans (including Swingline Loans), and
that all such Borrowings shall be deemed to have been requested pursuant to
Sections 2.03 or 2.05, as applicable, and (ii) the Administrative Agent to
charge any deposit account of the Borrower maintained with the Administrative
Agent for each payment of principal, interest and fees as it becomes due
hereunder or any other amount due under the Loan Documents.

(d)        If, except as otherwise expressly provided herein, any Lender shall,
by exercising any right of set-off or counterclaim or otherwise, obtain payment
in respect of any principal of or interest on any of its Loans or participations
in LC Disbursements resulting in such Lender receiving payment of a greater
proportion of the aggregate amount of its Loans and participations in LC
Disbursements and Swingline Loans and accrued interest thereon than the
proportion received by any other similarly situated Lender, then the Lender
receiving such greater proportion shall purchase (for cash at face value)
participations in the Loans and participations in LC Disbursements and Swingline
Loans of other Lenders to the extent necessary so that the benefit of all such
payments shall be shared by all such Lenders ratably in accordance with the
aggregate amount of principal of and accrued interest on their respective Loans
and participations in LC Disbursements and Swingline Loans; provided that (i) if
any such participations are purchased and all or any portion of the payment
giving rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this paragraph shall not be construed to apply to any
payment made by the Borrower pursuant to and in accordance with the express
terms of this Agreement or any payment obtained by a Lender as consideration for
the assignment or sale of a participation in any of its Loans or participations
in LC Disbursements or Swingline Loans to any assignee or participant, other
than to the Borrower or any Subsidiary or Affiliate thereof (as to which the
provisions of this paragraph shall apply). The Borrower consents to the
foregoing and agrees, to the extent it may effectively do so under applicable
law, that any Lender acquiring a participation pursuant to the foregoing
arrangements may exercise against the Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Borrower in the amount of such participation.

 

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

(f)        If any Lender shall fail to make any payment required to be made by
it hereunder, then the Administrative Agent may, in its discretion
(notwithstanding any contrary provision hereof), (i) apply any amounts
thereafter received by the Administrative Agent for the account of such Lender
to satisfy such Lender’s obligations hereunder until all such unsatisfied
obligations are fully paid and/or (ii) hold any such amounts in a segregated
account as cash collateral for, and application to, any future funding
obligations of such Lender hereunder. Application of amounts pursuant to (i) and
(ii) above shall be made in such order as may be determined by the
Administrative Agent in its discretion.

(g)        The Administrative Agent may from time to time provide the Borrower
with account statements or invoices with respect to any of the Secured
Obligations (the “Statements”). The Administrative Agent is under no duty or
obligation to provide Statements, which, if provided, will be solely for the
Borrower’s convenience. Statements may contain estimates of the amounts owed
during the relevant billing period, whether of principal, interest, fees or
other Secured Obligations. If the Borrower pays the full amount indicated on a
Statement on or before the due date indicated on such Statement, the Borrower
shall not be in default of payment with respect to the billing period indicated
on such Statement; provided, that acceptance by the Administrative Agent, on
behalf of the Lenders, of any payment that is less than the total amount
actually due at that time (including but not limited to any past due amounts)
shall not constitute a waiver of the Administrative Agent’s or the Lenders’
right to receive payment in full at another time.

SECTION 2.19.  Mitigation Obligations; Replacement of Lenders.

(a)        If any Lender requests compensation under Section 2.15, or if the
Borrower is required to pay any Indemnified Taxes or additional amounts to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 2.17, then such Lender shall use reasonable efforts to designate a
different lending office for funding or booking its Loans hereunder or to assign
its rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of such Lender, such designation or assignment
(i) would eliminate or reduce amounts payable pursuant to Sections 2.15 or 2.17,
as the case may be, in the future and (ii) would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender. The Borrower hereby agrees to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment.

(b)    If any Lender requests compensation under Section 2.15, or if the
Borrower is required to pay any Indemnified Taxes or additional amounts to any
Lender or any Governmental Authority for the account of any Lender) pursuant to
Section 2.17, or if any Lender becomes a Defaulting Lender, then the Borrower
may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights (other than its existing

 

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rights to payments pursuant to Sections 2.15 or 2.17) and obligations under this
Agreement and other Loan Documents to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (i) the Borrower shall have received the prior
written consent of the Administrative Agent (and in circumstances where its
consent would be required under Section 9.04, the Issuing Bank and the Swingline
Lender), which consent shall not unreasonably be withheld, (ii) such Lender
shall have received payment of an amount equal to the outstanding principal of
its Loans and funded participations in LC Disbursements and Swingline Loans,
accrued interest thereon, accrued fees and all other amounts payable to it
hereunder, from the assignee (to the extent of such outstanding principal and
accrued interest and fees) or the Borrower (in the case of all other amounts)
and (iii) in the case of any such assignment resulting from a claim for
compensation under Section 2.15 or payments required to be made pursuant to
Section 2.17, such assignment will result in a reduction in such compensation or
payments. A Lender shall not be required to make any such assignment and
delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Borrower to require such assignment
and delegation cease to apply.

SECTION 2.20.  Defaulting Lenders.

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

(a)        fees shall cease to accrue on the unfunded portion of the Revolving
Commitment of such Defaulting Lender pursuant to Section 2.12(a);

(b)        such Defaulting Lender shall not have the right to vote on any issue
on which voting is required (other than to the extent expressly provided in
Section 9.02(b)) and the Commitment and Revolving Exposure of such Defaulting
Lender shall not be included in determining whether the Required Lenders have
taken or may take any action hereunder or under any other Loan Document;
provided that, except as otherwise provided in Section 9.02, this clause
(b) shall not apply to the vote of a Defaulting Lender in the case of an
amendment, waiver or other modification requiring the consent of such Lender or
each Lender directly affected thereby;

(c)        if any Swingline Exposure or LC Exposure exists at the time such
Lender becomes a Defaulting Lender then:

(i)        all or any part of the Swingline Exposure and LC Exposure of such
Defaulting Lender (other than the portion of such Swingline Exposure referred to
in clause (b) of the definition of such term) shall be reallocated among the
non-Defaulting Lenders in accordance with their respective Applicable
Percentages but only (x) to the extent that the conditions set forth in
Section 4.02 are satisfied at the time of such reallocation (and, unless the
Borrower shall have otherwise notified the Administrative Agent at such time,
the Borrower shall be deemed to have represented and warranted that such
conditions are satisfied at such time) and (y) to the extent that such
reallocation does not, as to any non-Defaulting Lender, cause such
non-Defaulting Lender’s Revolving Exposure to exceed its Revolving Commitment;

(ii)       if the reallocation described in clause (i) above cannot, or can only
partially, be effected, the Borrower shall within one (1) Business Day following
notice by the Administrative Agent (x) first, prepay such Swingline Exposure and
(y) second, cash collateralize, for the benefit of the Issuing Bank, the
Borrower’s obligations corresponding to such Defaulting Lender’s LC Exposure
(after giving effect to any partial reallocation pursuant to clause (i) above)
in accordance with the procedures set forth in Section 2.06(j) for so long as
such LC Exposure is outstanding;

 

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(iii)      if the Borrower cash collateralizes any portion of such Defaulting
Lender’s LC Exposure pursuant to clause (ii) above, the Borrower shall not be
required to pay any fees to such Defaulting Lender pursuant to Section 2.12(b)
with respect to such Defaulting Lender’s LC Exposure during the period such
Defaulting Lender’s LC Exposure is cash collateralized;

(iv)      if the LC Exposure of the non-Defaulting Lenders is reallocated
pursuant to clause (i) above, then the fees payable to the Lenders pursuant to
Sections 2.12(a) and 2.12(b) shall be adjusted in accordance with such
non-Defaulting Lenders’ Applicable Percentages; and

(v)      if all or any portion of such Defaulting Lender’s LC Exposure is
neither reallocated nor cash collateralized pursuant to clause (i) or
(ii) above, then, without prejudice to any rights or remedies of the Issuing
Bank or any other Lender hereunder, all letter of credit fees payable under
Section 2.12(b) with respect to such Defaulting Lender’s LC Exposure shall be
payable to the Issuing Bank until and to the extent that such LC Exposure is
reallocated and/or cash collateralized; and

(d)        so long as such Lender is a Defaulting Lender, the Swingline Lender
shall not be required to fund any Swingline Loan and the Issuing Bank shall not
be required to issue, amend, renew, extend or increase any Letter of Credit,
unless it is satisfied that the related exposure and such Defaulting Lender’s
then outstanding LC Exposure will be 100% covered by the Commitments of the
non-Defaulting Lenders and/or cash collateral will be provided by the Borrower
in accordance with Section 2.20(c), and Swingline Exposure related to any such
newly made Swingline Loan or LC Exposure related to any newly issued or
increased Letter of Credit shall be allocated among non-Defaulting Lenders in a
manner consistent with Section 2.20(c)(i) (and such Defaulting Lender shall not
participate therein).

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

In the event that each of the Administrative Agent, the Borrower, the Swingline
Lender and the Issuing Bank agrees that a Defaulting Lender has adequately
remedied all matters that caused such Lender to be a Defaulting Lender, then the
Swingline Exposure and LC Exposure of the Lenders shall be readjusted to reflect
the inclusion of such Lender’s Revolving Commitment and on the date of such
readjustment such Lender shall purchase at par such of the Loans of the other
Lenders (other than Swingline Loans) as the Administrative Agent shall determine
may be necessary in order for such Lender to hold such Loans in accordance with
its Applicable Percentage.

SECTION 2.21.  Returned Payments.  If, after receipt of any payment which is
applied to the payment of all or any part of the Obligations (including a
payment effected through exercise of a right of setoff), the Administrative
Agent or any Lender is for any reason compelled to surrender such payment or
proceeds to any Person because such payment or application of proceeds is
invalidated, declared fraudulent, set aside, determined to be void or voidable
as a preference, impermissible setoff, or a diversion of trust funds, or for any
other reason (including pursuant to any settlement entered into by the
Administrative Agent or such Lender in its discretion), then the Obligations or
part thereof intended to be satisfied shall be revived and continued and this
Agreement shall continue in full force as if such payment

 

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or proceeds had not been received by the Administrative Agent or such Lender.
The provisions of this Section 2.21 shall be and remain effective
notwithstanding any contrary action which may have been taken by the
Administrative Agent or any Lender in reliance upon such payment or application
of proceeds. The provisions of this Section 2.21 shall survive the termination
of this Agreement.

SECTION 2.22.    Banking Services and Swap Agreements.    Each Lender or
Affiliate thereof providing Banking Services for, or having Swap Agreements
with, any Loan Party or any Subsidiary or Affiliate of a Loan Party shall
deliver to the Administrative Agent, promptly after entering into such Banking
Services or Swap Agreements, written notice setting forth the aggregate amount
of all Banking Services Obligations and Swap Agreement Obligations of such Loan
Party or Subsidiary or Affiliate thereof to such Lender or Affiliate (whether
matured or unmatured, absolute or contingent). In furtherance of that
requirement, each such Lender or Affiliate thereof shall furnish the
Administrative Agent, following the end of each calendar month, a summary of the
amounts due or to become due in respect of such Banking Services Obligations and
Swap Agreement Obligations. The most recent information provided to the
Administrative Agent shall be used in determining which tier of the waterfall,
contained in Section 2.18(b), such Banking Services Obligations and/or Swap
Agreement Obligations will be placed.

ARTICLE III

Representations and Warranties

Each Loan Party represents and warrants to the Lenders that (and where
applicable, agrees):

SECTION 3.01.    Organization; Powers.    Each Loan Party and each Subsidiary is
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, has all requisite power and authority to carry
on its business as now conducted and, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, is qualified to do business in, and is in good
standing in, every jurisdiction where such qualification is required.

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

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

 

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SECTION 3.04.  Financial Condition; No Material Adverse Change.

(a)  The Borrower has heretofore furnished to the Lenders its consolidated
balance sheet and statements of income, stockholders equity and cash flows
(i) as of and for the fiscal year ended March 31, 2015, reported on by
Deloitte & Touche LLP, independent public accountants, and (ii) as of and for
the fiscal quarter and the portion of the fiscal year ended September 30, 2015,
certified by its Financial Officer. Such financial statements present fairly, in
all material respects, the financial position and results of operations and cash
flows of the Borrower and its consolidated Subsidiaries as of such dates and for
such periods in accordance with GAAP, subject to normal year-end audit
adjustments all of which, when taken as a whole, would not be materially adverse
and the absence of footnotes in the case of the statements referred to in clause
(ii) above.

(b)  No event, change or condition has occurred that has had, or could
reasonably be expected to have, a Material Adverse Effect, since March 31, 2015.

SECTION 3.05.  Properties.

(a)  As of the date of this Agreement, Schedule 3.05 sets forth the address of
each parcel of real property that is owned or leased by any Loan Party. Each of
such leases and subleases is valid and enforceable in accordance with its terms
and is in full force and effect, and no default by any party to any such lease
or sublease exists. Each of the Loan Parties and each Subsidiary has good and
indefeasible title to, or valid leasehold interests in, all of its real and
personal property, free of all Liens other than those permitted by Section 6.02.

(b)  Each Loan Party and each Subsidiary owns, or is licensed to use, all
trademarks, tradenames, copyrights, patents and other intellectual property
necessary to its business as currently conducted, a correct and complete list of
which, as of the date of this Agreement, is set forth on Schedule 3.05, and the
use thereof by each Loan Party and each Subsidiary does not infringe in any
material respect upon the rights of any other Person, and each Loan Party’s and
each Subsidiary’s rights thereto are not subject to any licensing agreement or
similar arrangement.

SECTION 3.06.  Litigation and Environmental Matters.

(a)    There are no actions, suits or proceedings by or before any arbitrator or
Governmental Authority pending against or, to the knowledge of any Loan Party,
threatened against or affecting any Loan Party or any Subsidiary (i) as to which
there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect (other than the Disclosed
Matters set forth on Schedule 3.06) or (ii) that involve any Loan Document or
the Transactions.

(b)  Except for the Disclosed Matters, (i) no Loan Party or any Subsidiary has
received notice of any claim with respect to any Environmental Liability and
(ii) except with respect to any other matters that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect, no Loan Party or any Subsidiary (A) has failed to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or
other approval required under any Environmental Law (B) has become subject to
any Environmental Liability, (C) has received notice of any claim with respect
to any Environmental Liability or (D) knows of any basis for any material
Environmental Liability.

(c)  Since the date of this Agreement, there has been no change in the status of
the Disclosed Matters that, individually or in the aggregate, has resulted in,
or materially increased the likelihood of, a Material Adverse Effect.

 

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SECTION 3.07.  Compliance with Laws and Agreements; No Default.  Except where
the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, each Loan Party and each
Subsidiary is in compliance with (i) all Requirements of Law applicable to it or
its property and (ii) all indentures, agreements and other instruments binding
upon it or its property. No Default has occurred and is continuing.

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

SECTION 3.09.  Taxes.  Each Loan Party and each Subsidiary has timely filed or
caused to be filed all Tax returns and reports required to have been filed and
has paid or caused to be paid all Taxes required to have been paid by it, except
(a) Taxes that are being contested in good faith by appropriate proceedings and
for which such Loan Party or such Subsidiary, as applicable, has set aside on
its books adequate reserves or (b) to the extent that the failure to do so could
not be expected to result in a Material Adverse Effect. No tax liens have been
filed and no claims are being asserted with respect to any such taxes.

SECTION 3.10.    ERISA.  No ERISA Event has occurred or is reasonably expected
to occur that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed by more
than $1,000,000.00 the fair market value of the assets of all Plans.

SECTION 3.11.      Disclosure.    The Loan Parties have disclosed to the Lenders
all agreements, instruments and corporate or other restrictions to which any
Loan Party or any Subsidiary is subject, and all other matters known to it,
that, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect. None of the reports, financial statements,
certificates or other information furnished by or on behalf of any Loan Party or
any Subsidiary to the Administrative Agent or any Lender in connection with the
negotiation of this Agreement or any other Loan Document (as modified or
supplemented by other information so furnished) contains any material
misstatement of fact and the reports, financial statements, certificates and
other information furnished by or on behalf of any Loan Party or any Subsidiary
to the Administrative Agent and the Lenders in connection with the negotiation
of this Agreement and the other Loan Documents (as modified or supplemented by
other information so furnished), taken as a whole, do not omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that, with
respect to projected financial information, the Loan Parties represent only that
such information was prepared in good faith based upon assumptions believed to
be reasonable at the time delivered and, if such projected financial information
was delivered prior to the Effective Date, as of the Effective Date.

SECTION 3.12.  Material Agreements. No Loan Party or any Subsidiary is in
default in the performance, observance or fulfillment of any of the material
obligations, covenants or conditions contained in (i) any material agreement to
which it is a party or (ii) any agreement or instrument evidencing or governing
Indebtedness.

 

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SECTION 3.13.  Solvency.  (a)  Immediately after the consummation of the
Transactions to occur on the Effective Date, (i) the fair value of the assets of
each Loan Party, at a fair valuation, will exceed its debts and liabilities,
subordinated, contingent or otherwise; (ii) the present fair saleable value of
the property of each Loan Party, calculated on a going concern basis, will be
greater than the amount that will be required to pay the probable liability of
its debts and other liabilities, subordinated, contingent or otherwise, as such
debts and other liabilities become absolute and matured; (iii) each Loan Party
will be able to pay its debts and liabilities, subordinated, contingent or
otherwise, as such debts and liabilities become absolute and matured; and
(iv) no Loan Party will have unreasonably small capital with which to conduct
the business in which it is engaged as such business is now conducted and is
proposed to be conducted after the Effective Date.

(b)        No Loan Party intends to, nor will permit any Subsidiary to, and no
Loan Party believes that it or any Subsidiary will, incur debts beyond its
ability to pay such debts as they mature, taking into account the timing of and
amounts of cash to be received by it or any such Subsidiary and the timing of
the amounts of cash to be payable on or in respect of its Indebtedness or the
Indebtedness of any such Subsidiary.

SECTION 3.14.    Insurance.    Schedule 3.14 sets forth a description of all
insurance maintained by or on behalf of the Loan Parties and their Subsidiaries
as of the Effective Date. As of the Effective Date, all premiums in respect of
such insurance have been paid. The Loan Parties believe that the insurance
maintained by or on behalf of the Loan Parties and their Subsidiaries is
adequate and is customary for companies engaged in the same or similar
businesses operating in the same or similar locations.

SECTION 3.15.  Capitalization and Subsidiaries.   Schedule 3.15 sets forth (a) a
correct and complete list of the name and relationship to the Borrower of each
Subsidiary, (b) a true and complete listing of each class of each Subsidiary’s
authorized Equity Interests, of which all of such issued Equity Interests are
validly issued, outstanding, fully paid and non-assessable, and owned
beneficially and of record by the Persons identified on Schedule 3.15, and
(c) the type of entity of the Borrower and each Subsidiary. All of the issued
and outstanding Equity Interests owned by any Loan Party have been (to the
extent such concepts are relevant with respect to such ownership interests) duly
authorized and issued and are fully paid and non-assessable.

SECTION 3.16.  Security Interest in Collateral.  The provisions of this
Agreement and the other Loan Documents create legal and valid Liens on all the
Collateral in favor of the Administrative Agent, for the benefit of the Secured
Parties, and such Liens constitute perfected and continuing Liens on the
Collateral, securing the Secured Obligations, enforceable against the applicable
Loan Party and all third parties, and having priority over all other Liens on
the Collateral except in the case of (a) Permitted Encumbrances, to the extent
any such Permitted Encumbrances would have priority over the Liens in favor of
the Administrative Agent pursuant to any applicable law or agreement and
(b) Liens perfected only by possession (including possession of any certificate
of title), to the extent the Administrative Agent has not obtained or does not
maintain possession of such Collateral.

SECTION 3.17.  Employment Matters.    As of the Effective Date, there are no
strikes, lockouts or slowdowns against any Loan Party or any Subsidiary pending
or, to the knowledge of any Loan Party, threatened. The hours worked by and
payments made to employees of the Loan Parties and their Subsidiaries have not
been in violation of the Fair Labor Standards Act or any other applicable
federal, state, local or foreign law dealing with such matters. All payments due
from any Loan Party or any Subsidiary, or for which any claim may be made
against any Loan Party or any Subsidiary, on account of wages and employee
health and welfare insurance and other benefits, have been paid or accrued as a
liability on the books of such Loan Party or such Subsidiary.

 

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SECTION 3.18.      Federal Reserve Regulations.  No part of the proceeds of any
Loan or Letter of Credit has been used or will be used, whether directly or
indirectly, for any purpose that entails a violation of any of the Regulations
of the Board, including Regulations T, U and X.

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

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

SECTION 3.21.  Anti-Corruption Laws and Sanctions.  Each Loan Party has
implemented and maintains in effect policies and procedures designed to ensure
compliance by such Loan Party, its Subsidiaries and their respective directors,
officers, employees and agents with Anti-Corruption Laws and applicable
Sanctions, and such Loan Party, its Subsidiaries and their respective officers
and employees and to the knowledge of such Loan Party its directors and agents,
are in compliance with Anti-Corruption Laws and applicable Sanctions in all
material respects. None of (a) any Loan Party, any Subsidiary or any of their
respective directors, officers or employees, or (b) to the knowledge of any such
Loan Party or Subsidiary, any agent of such Loan Party or any Subsidiary that
will act in any capacity in connection with or benefit from the credit facility
established hereby, is a Sanctioned Person. No Borrowing or Letter of Credit,
use of proceeds, Transaction or other transaction contemplated by this Agreement
or the other Loan Documents will violate Anti-Corruption Laws or applicable
Sanctions.

ARTICLE IV

Conditions

SECTION 4.01.    Effective Date.    The obligations of the Lenders to make Loans
and of the Issuing Bank to issue Letters of Credit hereunder shall not become
effective until the date on which each of the following conditions is satisfied
(or waived in accordance with Section 9.02):

(a)  Credit Agreement and Loan Documents.    The Administrative Agent (or its
counsel) shall have received (i) from each party hereto either (A) a counterpart
of this Agreement signed on behalf of such party or (B) written evidence
satisfactory to the Administrative Agent (which may include fax or other
electronic transmission of a signed signature page of this Agreement) that such
party has signed a counterpart of this Agreement and (ii) duly executed copies
of the Loan Documents and such other certificates, documents, instruments and
agreements as the Administrative Agent shall reasonably request in connection
with the transactions contemplated by this Agreement and the other Loan
Documents, including any promissory notes requested by a Lender pursuant to
Section 2.10 payable to the order of each such requesting Lender and a written
opinion of the Loan Parties’ counsel, addressed to the Administrative Agent, the
Issuing Bank and the Lenders in substantially the form of Exhibit B.

(b)  Financial Statements and Projections.    The Lenders shall have received
(i) audited consolidated financial statements of the Borrower and its
Subsidiaries for the fiscal years ended March 31, 2013 and March 31, 2014,
(ii) unaudited interim consolidated financial statements of the Borrower and its
Subsidiaries for each fiscal quarter ended after the date of the latest
applicable financial statements delivered pursuant to clause (i) of this
paragraph as to which such financial statements are available, and such
financial statements shall not, in the reasonable judgment of the Administrative
Agent, reflect any material adverse change in the consolidated financial
condition of the Borrower and its Subsidiaries as reflected in the audited,
consolidated financial statements described in clause (i) of this paragraph and
(ii) satisfactory Projections through the fiscal year ending March 31, 2017.

 

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(c)      Closing Certificates; Certified Certificate of Incorporation; Good
Standing Certificates.  The Administrative Agent shall have received (i) a
certificate of each Loan Party, dated the Effective Date and executed by its
Secretary or Assistant Secretary, which shall (A) certify the resolutions of its
Board of Directors, members or other body authorizing the execution, delivery
and performance of the Loan Documents to which it is a party, (B) identify by
name and title and bear the signatures of the officers of such Loan Party
authorized to sign the Loan Documents to which it is a party and, in the case of
the Borrower, its Financial Officers, and (C) contain appropriate attachments,
including the charter, articles or certificate of organization or incorporation
of each Loan Party certified by the relevant authority of the jurisdiction of
organization of such Loan Party and a true and correct copy of its bylaws or
operating, management or partnership agreement, or other organizational or
governing documents, and (ii) a long form good standing certificate for each
Loan Party from its jurisdiction of organization.

(d)  No Default Certificate.  The Administrative Agent shall have received a
certificate, signed by the Financial Officer of the Borrower and each other Loan
Party, dated as of the Effective Date (i) stating that no Default has occurred
and is continuing and (ii) stating that the representations and warranties
contained in the Loan Documents are true and correct as of such date.

(e)  Fees.  The Lenders and the Administrative Agent shall have received all
fees required to be paid, and all expenses required to be reimbursed for which
invoices have been presented (including the reasonable fees and expenses of
legal counsel), on or before the Effective Date. All such amounts will be paid
with proceeds of Loans made on the Effective Date and will be reflected in the
funding instructions given by the Borrower to the Administrative Agent on or
before the Effective Date.

(f)  Lien Searches.  The Administrative Agent shall have received the results of
a recent lien search in the jurisdiction of organization of each Loan Party and
each jurisdiction where assets of the Loan Parties are located, and such search
shall reveal no Liens on any of the assets of the Loan Parties except for liens
permitted by Section 6.02 or discharged on or prior to the Effective Date
pursuant to a pay-off letter or other documentation satisfactory to the
Administrative Agent.

(g)  Pay-Off Letter.  The Administrative Agent shall have received satisfactory
pay-off letters for all existing Indebtedness required to be repaid and which
confirms that all Liens upon any of the property of the Loan Parties
constituting Collateral will be terminated concurrently with such payment and
all letters of credit issued or guaranteed as part of such Indebtedness shall
have been cash collateralized or supported by a Letter of Credit.

(h)  Funding Account.  The Administrative Agent shall have received a notice
setting forth the deposit account of the Borrower (the “Funding Account”) to
which the Administrative Agent is authorized by the Borrower to transfer the
proceeds of any Borrowings requested or authorized pursuant to this Agreement.

(i)  Collateral Access and Control Agreements.  The Administrative Agent shall
have received each of a Collateral Access Agreement required to be provided
pursuant to Section 4.13 of the Security Agreement.

(j)  Solvency.  The Administrative Agent shall have received a solvency
certificate signed by a Financial Officer dated the Effective Date in form and
substance reasonably satisfactory to the Administrative Agent.

 

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(k)  Pledged Equity Interests; Stock Powers; Pledged Notes.  The Administrative
Agent shall have received (i) the certificates representing the Equity Interests
pledged pursuant to the Security Agreement, together with an undated stock power
for each such certificate executed in blank by a duly authorized officer of the
pledgor thereof and (ii) each promissory note (if any) pledged to the
Administrative Agent pursuant to the Security Agreement endorsed (without
recourse) in blank (or accompanied by an executed transfer form in blank) by the
pledgor thereof.

(l)    Filings, Registrations and Recordings.    Each document (including any
Uniform Commercial Code financing statement) required by the Collateral
Documents or under law or reasonably requested by the Administrative Agent to be
filed, registered or recorded in order to create in favor of the Administrative
Agent, for the benefit of the Secured Parties, a perfected Lien on the
Collateral described therein, prior and superior in right to any other Person
(other than with respect to Liens expressly permitted by Section 6.02), shall be
in proper form for filing, registration or recordation.

(m)  Insurance.    The Administrative Agent shall have received evidence of
insurance coverage in form, scope, and substance reasonably satisfactory to the
Administrative Agent and otherwise in compliance with the terms of Section 5.10
of this Agreement and Section 4.12 of the Security Agreement.

(n)  Letter of Credit Application.    The Administrative Agent shall have
received a properly completed letter of credit application (whether standalone
or pursuant to a master agreement, as applicable, and whether electronic or on
the Issuing Bank’s trade paper) if the issuance of a Letter of Credit will be
required on the Effective Date.

(o)  Legal Due Diligence. The Administrative Agent and its counsel shall have
completed all legal due diligence, the results of which shall be satisfactory to
Administrative Agent in its sole discretion.

(p)  USA PATRIOT Act, Etc.  The Administrative Agent and Lenders shall have
received all documentation and other information required by bank regulatory
authorities under applicable “know your customer” and anti-money laundering
rules and regulations, including USA PATRIOT Act, and a properly completed and
signed IRS Form W-8 or W-9, as applicable, for each Loan Party.

(q)      Other Documents.    The Administrative Agent shall have received such
other documents as the Administrative Agent, the Issuing Bank, any Lender or
their respective counsel may have reasonably requested.

SECTION 4.02.      Each Credit Event.    The obligation of each Lender to make a
Loan on the occasion of any Borrowing, and of the Issuing Bank to issue, amend,
renew or extend any Letter of Credit, is subject to the satisfaction of the
following conditions:

(a)    The representations and warranties of the Loan Parties set forth in the
Loan Documents shall be true and correct in all material respects with the same
effect as though made on and as of the date of such Borrowing or the date of
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable (it being understood and agreed that any representation or warranty
which by its terms is made as of a specified date shall be required to be true
and correct in all material respects only as of such specified date, and that
any representation or warranty which is subject to any materiality qualifier
shall be required to be true and correct in all respects).

 

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(b)        At the time of and immediately after giving effect to such Borrowing
or the issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, no Default shall have occurred and be continuing.

(c)    After giving effect to any Borrowing or the issuance, amendment, renewal
or extension of any Letter of Credit, Availability shall not be less than zero.

(d)    No event shall have occurred and no condition shall exist which has or
could be reasonably expected to have a Material Adverse Effect.

Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in paragraphs (a), (b),
(c) and (d) of this Section.

Notwithstanding the failure to satisfy the conditions precedent set forth in
paragraphs (a), (b), (c) or (d) of this Section, unless otherwise directed by
the Required Lenders, the Administrative Agent may, but shall have no obligation
to, continue to make Loans and an Issuing Bank may, but shall have no obligation
to, issue, amend, renew or extend, or cause to be issued, amended, renewed or
extended, any Letter of Credit for the ratable account and risk of Lenders from
time to time if the Administrative Agent believes that making such Loans or
issuing, amending, renewing or extending, or causing the issuance, amendment,
renewal or extension of, any such Letter of Credit is in the best interests of
the Lenders.

ARTICLE V

Affirmative Covenants

Until the Commitments shall have expired or been terminated and the principal of
and interest on each Loan and all fees payable hereunder shall have been paid in
full and all Letters of Credit shall have expired or terminated, in each case
without any pending draw, and all LC Disbursements shall have been reimbursed,
each Loan Party executing this Agreement covenants and agrees, jointly and
severally with all of the other Loan Parties, with the Lenders that:

SECTION 5.01.  Financial Statements and Other Information.  The Borrower will
furnish to the Administrative Agent and each Lender:

(a) within ninety (90) days after the end of each fiscal year of the Borrower,
its audited consolidated balance sheet and related statements of operations,
stockholders’ equity and cash flows as of the end of and for such year, setting
forth in each case in comparative form the figures for the previous fiscal year,
all reported on by independent public accountants of recognized national
standing or otherwise acceptable to the Required Lenders (without a “going
concern” or like qualification, commentary or exception, and without any
qualification or exception as to the scope of such audit) to the effect that
such consolidated financial statements present fairly in all material respects
the financial condition and results of operations of the Borrower and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, accompanied by any management letter prepared by such
accountants;

(b) within forty-five (45) days after the end of each of the first three fiscal
quarters of the Borrower, its consolidated balance sheet and related statements
of operations, stockholders’ equity and cash flows as of the end of and for such
fiscal quarter and the then elapsed portion of such fiscal year, setting forth
in each case in comparative form the figures for the corresponding period or
periods of (or, in the case of the balance sheet, as of the end of) the previous
fiscal year,

 

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all certified by a Financial Officer as presenting fairly in all material
respects the financial condition and results of operations of the Borrower and
its consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and the
absence of footnotes;

(c)  The Borrower represents and warrants that it, its controlling Person and
any Subsidiary, in each case, if any, either (i) has no registered or publicly
traded securities outstanding, or (ii) files its financial statements with the
SEC and/or makes its financial statements available to potential holders of its
144A securities, and, accordingly, the Borrower hereby (i) authorizes the
Administrative Agent to make the financial statements to be provided under
Section 5.01(a) and (b) above (collectively or individually, as the context
requires, the “Financial Statements”), along with the Loan Documents, available
to Public-Siders and (ii) agrees that at the time such Financial Statements are
provided hereunder, they shall already have been made available to holders of
its securities. The Borrower will not request that any other material be posted
to Public-Siders without expressly representing and warranting to the
Administrative Agent in writing that such materials do not constitute material
non-public information within the meaning of the federal securities laws or that
the Borrower has no outstanding publicly traded securities, including 144A
securities. In no event shall the Administrative Agent post compliance
certificates or budgets to Public-Siders.

(d) concurrently with any delivery of the Financial Statements under clause
(a) or (b) above, a certificate of a Financial Officer in substantially the form
of Exhibit D (i) certifying, in the case of the Financial Statements delivered
under clause (b) above, as presenting fairly in all material respects the
financial condition and results of operations of the Borrower and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and the
absence of footnotes, (ii) certifying as to whether a Default has occurred and,
if a Default has occurred, specifying the details thereof and any action taken
or proposed to be taken with respect thereto, (iii) setting forth reasonably
detailed calculations demonstrating compliance with Section 6.12 and
(iv) stating whether any change in GAAP or in the application thereof has
occurred since the date of the audited financial statements referred to in
Section 3.04 and, if any such change has occurred, specifying the effect of such
change on the Financial Statements accompanying such certificate;

(e)  as soon as available, but in any event no later than sixty (60) days after
the end of each fiscal year of the Borrower, a copy of the plan and forecast
(including a projected consolidated and consolidating balance sheet, income
statement and cash flow statement) of the Borrower for each month of the
upcoming fiscal year (the “Projections”) in form reasonably satisfactory to the
Administrative Agent;

(f) promptly after the same become publicly available, copies of all periodic
and other reports, proxy statements and other materials filed by any Loan Party
or any Subsidiary with the SEC, or any Governmental Authority succeeding to any
or all of the functions of the SEC, or with any national securities exchange, or
distributed by the Borrower to its shareholders generally, as the case may be;

(g)  promptly following any request therefor, such other information regarding
the operations, material changes in ownership of Equity Interests, business
affairs and financial condition of any Loan Party or any Subsidiary, or
compliance with the terms of this Agreement, as the Administrative Agent or any
Lender may reasonably request; and

 

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(h) promptly after any request therefor by the Administrative Agent or any
Lender, copies of (i) any documents described in Section 101(k)(1) of ERISA that
the Borrower or any ERISA Affiliate may request with respect to any
Multiemployer Plan and (ii) any notices described in Section 101(l)(1) of ERISA
that the Borrower or any ERISA Affiliate may request with respect to any
Multiemployer Plan; provided that if the Borrower or any ERISA Affiliate has not
requested such documents or notices from the administrator or sponsor of the
applicable Multiemployer Plan, the Borrower or the applicable ERISA Affiliate
shall promptly make a request for such documents and notices from such
administrator or sponsor and shall provide copies of such documents and notices
promptly after receipt thereof.

SECTION 5.02.      Notices of Material Events.      The Borrower will furnish to
the Administrative Agent and each Lender prompt (but in any event within any
time period that may be specified below) written notice of the following:

(a) the occurrence of any Default;

(b)  receipt of any notice of any investigation by a Governmental Authority or
any litigation or proceeding commenced or threatened against any Loan Party or
any Subsidiary that (i) seeks damages in excess of $100,000, (ii) seeks
injunctive relief, (iii) is asserted or instituted against any Plan, its
fiduciaries or its assets (excluding (A) benefit claims being contested through
internal or external administrative review procedures provided that all such
claims, taken together, do not claim in excess of $250,000 and (B) claims not
described in clause (A) claiming less than $100,000 individually provided that
all such claims, taken together, claim less than $250,000) seeking aggregate
amounts in excess of $250,000, (iv) alleges criminal misconduct by any Loan
Party or any Subsidiary, (v) alleges the violation of, or seeks to impose
remedies under, any Environmental Law or related Requirement of Law, or seeks to
impose material Environmental Liability, (vi) asserts liability on the part of
any Loan Party or any Subsidiary in excess of $100,000 in respect of any tax,
fee, assessment, or other governmental charge, or (vii) involves any product
recall;

(c) the occurrence of any ERISA Event that, alone or together with any other
ERISA Events that have occurred, could reasonably be expected to result in
liability of the Loan Parties and their Subsidiaries in an aggregate amount
exceeding $100,000;

(d) within two (2) Business Days after the occurrence thereof, any Loan Party
entering into a Swap Agreement or an amendment to a Swap Agreement, together
with copies of all agreements evidencing such Swap Agreement or amendment; and

(e) any other development that results in, or could reasonably be expected to
result in, a Material Adverse Effect.

Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.

SECTION 5.03.    Existence; Conduct of Business.  Each Loan Party will, and will
cause each Subsidiary to, (a) do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its legal existence and the
rights, qualifications, licenses, permits, franchises, governmental
authorizations, intellectual property rights, licenses and permits material to
the conduct of its business, and maintain all requisite authority to conduct its
business in each jurisdiction in which its business is conducted; provided that
the foregoing shall not prohibit any merger, consolidation,

 

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liquidation or dissolution permitted under Section 6.03 and (b) carry on and
conduct its business in substantially the same manner and in substantially the
same fields of enterprise as it is presently conducted.

SECTION 5.04.    Payment of Obligations.    Each Loan Party will, and will cause
each Subsidiary to, pay or discharge all Material Indebtedness and all other
material liabilities and obligations, including Taxes, before the same shall
become delinquent or in default, except where (a) the validity or amount thereof
is being contested in good faith by appropriate proceedings, (b) such Loan Party
has set aside on its books adequate reserves with respect thereto in accordance
with GAAP and (c) the failure to make payment pending such contest could not
reasonably be expected to result in a Material Adverse Effect; provided,
however, that each Loan Party will, and will cause each Subsidiary to, remit
withholding taxes and other payroll taxes to appropriate Governmental
Authorities as and when claimed to be due, notwithstanding the foregoing
exceptions.

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

SECTION 5.06.    Books and Records; Inspection Rights.    Each Loan Party will,
and will cause each Subsidiary to, (a) keep proper books of record and account
in which full, true and correct entries are made of all dealings and
transactions in relation to its business and activities and (b) permit any
representatives designated by the Administrative Agent or any Lender (including
employees of the Administrative Agent, any Lender or any consultants,
accountants, lawyers, agents and appraisers retained by the Administrative
Agent), during regular business hours and upon reasonable prior notice, to visit
and inspect its properties, conduct at the Loan Party’s premises field
examinations of the Loan Party’s assets, liabilities, books and records,
including examining and making extracts from its books and records,
environmental assessment reports and Phase I and/or other non-invasive studies,
surveys or audits, and to discuss its affairs, finances and condition with its
officers and independent accountants, all at such reasonable times and as often
as reasonably requested. The Loan Parties acknowledge that the Administrative
Agent, after exercising its rights of inspection, may prepare and distribute to
the Lenders certain Reports pertaining to the Loan Parties’ assets for internal
use by the Administrative Agent and the Lenders.

SECTION 5.07.    Compliance with Laws and Material Contractual
Obligations.    Each Loan Party will, and will cause each Subsidiary to,
(i) comply in all material respects with each Requirement of Law applicable to
it or its property (including without limitation Environmental Laws) and
(ii) perform in all material respects its obligations under material agreements
to which it is a party. Each Loan Party will maintain in effect and enforce
policies and procedures designed to ensure compliance by such Loan Party, its
Subsidiaries and their respective directors, officers, employees and agents with
Anti-Corruption Laws and applicable Sanctions.

SECTION 5.08.  Use of Proceeds.

(a)        The proceeds of the Loans and the Letters of Credit will be used only
(i) for general corporate purposes, including capital expenditures, and (ii) to
finance Acquisitions permitted by Section 6.04. No part of the proceeds of any
Loan and no Letter of Credit will be used, whether directly or indirectly, for
any purpose that entails a violation of any of the Regulations of the Board,
including Regulations T, U and X.

(b)        The Borrower will not request any Borrowing or Letter of Credit, and
the Borrower shall not use, and shall procure that its Subsidiaries and its or
their respective directors, officers,

 

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employees and agents shall not use, the proceeds of any Borrowing or Letter of
Credit (i) in furtherance of an offer, payment, promise to pay, or authorization
of the payment or giving of money, or anything else of value, to any Person in
violation of any Anti-Corruption Laws, (ii) for the purpose of funding,
financing or facilitating any activities, business or transaction of or with any
Sanctioned Person, or in any Sanctioned Country, (iii) in any manner that would
result in the violation of any Sanctions applicable to any party hereto, or
(iv) in furtherance of, directly or indirectly, any transaction or series of
transactions to acquire a controlling interest in any publicly-traded company
unless the Administrative Agent provides written consent thereto.

SECTION 5.09.    Accuracy of Information.    The Loan Parties will ensure that
any information, including financial statements or other documents, furnished to
the Administrative Agent or the Lenders in connection with this Agreement or any
other Loan Document or any amendment or modification hereof or thereof or waiver
hereunder or thereunder contains no material misstatement of fact and that such
information, taken as a whole, does not omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and the furnishing of such
information shall be deemed to be a representation and warranty by the Borrower
on the date thereof as to the matters specified in this Section 5.09; provided
that, with respect to the Projections, the Loan Parties will cause the
Projections to be prepared in good faith based upon assumptions believed to be
reasonable at the time.

SECTION 5.10.    Insurance. Each Loan Party will, and will cause each Subsidiary
to, maintain with financially sound and reputable carriers having a financial
strength rating of at least A- by A.M. Best Company (a) insurance in such
amounts (with no greater risk retention) and against such risks (including loss
or damage by fire and loss in transit; theft, burglary, pilferage, larceny,
embezzlement, and other criminal activities; business interruption; and general
liability) and such other hazards, as is customarily maintained by companies of
established repute engaged in the same or similar businesses operating in the
same or similar locations and (b) all insurance required pursuant to the
Collateral Documents. The Borrower will furnish to the Lenders, upon request of
the Administrative Agent, but no less frequently than annually, information in
reasonable detail as to the insurance so maintained.

SECTION 5.11.    Appraisals.  At any time that the Administrative Agent
requests, but no more than once per year (other than after the occurrence and
during the continuance of an Event of Default), and at the expense of the
Administrative Agent, the Borrower will, and will cause each Subsidiary to,
provide the Administrative Agent with appraisals or updates thereof of their
Inventory, Equipment and real property from an appraiser selected and engaged by
the Administrative Agent, and prepared on a basis satisfactory to the
Administrative Agent, such appraisals and updates to include, without
limitation, information required by any applicable Requirement of Law; provided,
however, that upon the occurrence and during the continuance of an Event of
Default, the Borrower shall, at its sole expense, provide such appraisals and/or
updates as the Administrative Agent may, in its sole discretion, request.

SECTION 5.12.      Casualty and Condemnation.      The Borrower (a) will furnish
to the Administrative Agent and the Lenders prompt written notice of any
casualty or other insured damage to any material portion of the Collateral or
the commencement of any action or proceeding for the taking of any material
portion of the Collateral or interest therein under power of eminent domain or
by condemnation or similar proceeding and (b) will ensure that the Net Proceeds
of any such event (whether in the form of insurance proceeds, condemnation
awards or otherwise) are collected and applied in accordance with the applicable
provisions of this Agreement and the Collateral Documents

 

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SECTION 5.13. Depository Banks. The Borrower and each Subsidiary will maintain
the Administrative Agent as its principal depository bank, including for the
maintenance of operating, administrative, cash management, collection activity,
and other deposit accounts for the conduct of its business. Notwithstanding the
foregoing, the Borrower and each Subsidiary may continue (i) to open and
maintain certificates of deposit with Bank of America, N.A. or any other
financial institution, (ii) to maintain the money market deposit accounts with
Bank of America, N.A. existing on the date hereof (collectively, the “Pledged
Accounts”), which such Pledged Accounts may be pledged to secure, and only to
secure, Existing SBLCs but only so long as any Existing SBLC remains
outstanding, (iii) to maintain in effect any standby letters of credit existing
on the date hereof and listed on Schedule 5.13, as the same may be renewed or
extended, but not increased, from time to time (collectively, the “Existing
SBLCs”).

SECTION 5.14.  Additional Collateral; Further Assurances.

(a)    Subject to applicable Requirements of Law, each Loan Party will cause
each of its Domestic Subsidiaries formed or acquired after the date of this
Agreement to become a Loan Party by executing a Joinder Agreement. Upon
execution and delivery thereof, each such Person (i) shall automatically become
a Loan Guarantor hereunder and thereupon shall have all of the rights, benefits,
duties, and obligations in such capacity under the Loan Documents and (ii) will
grant Liens to the Administrative Agent, for the benefit of the Administrative
Agent and the other Secured Parties, in any property of such Loan Party which
constitutes Collateral, including any parcel of real property located in the
U.S. owned by any Loan Party.

(b)  Each Loan Party will cause (i) 100% of the issued and outstanding Equity
Interests of each of its Domestic Subsidiaries and (ii) 65% (or such greater
percentage that, due to a change in applicable law after the date hereof,
(1) could not reasonably be expected to cause the undistributed earnings of such
foreign Subsidiary as determined for U.S. federal income tax purposes to be
treated as a deemed dividend to such foreign Subsidiary’s U.S. parent and
(2) could not reasonably be expected to cause any material adverse tax
consequences) of the issued and outstanding Equity Interests entitled to vote
(within the meaning of Treas. Reg. Section 1.956-2(c)(2)) and 100% of the issued
and outstanding Equity Interests not entitled to vote (within the meaning of
Treas. Reg. Section 1.956-2(c)(2)) in each Foreign Subsidiary directly owned by
the Borrower or by any Domestic Subsidiary to be subject at all times to a first
priority, perfected Lien in favor of the Administrative Agent for the benefit of
the Administrative Agent and the other Secured Parties, pursuant to the terms
and conditions of the Loan Documents or other security documents as the
Administrative Agent shall reasonably request.

(c)  Without limiting the foregoing, each Loan Party will, and will cause each
Subsidiary to, execute and deliver, or cause to be executed and delivered, to
the Administrative Agent such documents, agreements and instruments, and will
take or cause to be taken such further actions (including the filing and
recording of financing statements, fixture filings, mortgages, deeds of trust
and other documents and such other actions or deliveries of the type required by
Section 4.01, as applicable), which may be required by any Requirement of Law or
which the Administrative Agent may, from time to time, reasonably request to
carry out the terms and conditions of this Agreement and the other Loan
Documents and to ensure perfection and priority of the Liens created or intended
to be created by the Collateral Documents, all at the expense of the Loan
Parties. Notwithstanding the foregoing, at any time after an Event of Default
has occurred, each Loan Party will, upon the request of the Administrative
Agent, cause each Foreign Subsidiary to become a Loan Party and a Loan Guarantor
and to grant Liens to the Administrative Agent on its assets and have the
balance of its Equity Interests pledged to the Administrative Agent.

(d)    If any material assets (including any real property or improvements
thereto or any interest therein) are acquired by any Loan Party after the
Effective Date (other than assets constituting

 

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Collateral under the Security Agreement that become subject to the Lien under
the Security Agreement upon acquisition thereof), the Borrower will (i) notify
the Administrative Agent and the Lenders thereof, and, if requested by the
Administrative Agent or the Required Lenders, cause such assets to be subjected
to a Lien securing the Secured Obligations and (ii) take, and cause each
applicable Loan Party to take, such actions as shall be necessary or reasonably
requested by the Administrative Agent to grant and perfect such Liens, including
actions described in paragraph (c) of this Section, all at the expense of the
Loan Parties.

SECTION 5.15.  Post-Closing Covenants.

(a)        The Borrower shall (i) cause the Inactive Subsidiary to transfer any
and all of its assets to the Borrower and be dissolved and (ii) provide the
Administrative Agent with a copy of the Certificate of Dissolution for the
Borrower, stamped as filed by the Delaware Secretary of State, each within
ninety (90) days after the Effective Date. The Borrower shall not and shall not
permit any Person to capitalize the Inactive Subsidiary or otherwise allow the
Inactive Subsidiary to conduct any business prior to such dissolution.

(b)        The Borrower shall (i) cause the ES Acquisition Subsidiary to merge
with and into the Borrower pursuant to Section 253 of the Delaware General
Corporation Law and (ii) provide Borrower with a copy of the Certificate of
Ownership and Merger, stamped as filed by the Delaware Secretary of State, each
within ninety (90) days after the Effective Date. The Borrower shall not and
shall not permit any Person to capitalize the ES Acquisition Subsidiary or
otherwise allow the ES Acquisition Subsidiary to conduct any business prior to
such merger.

(c)        The Borrower shall, within thirty (30) days after the Effective Date,
provide the Administrative Agent a Collateral Access Agreement with respect to
its facilities located at 3123 John Conley Drive, Lapeer, Michigan 48446
executed by the landlord and tenant thereof.

(d)        The Borrower shall, within three (3) Business Days after the
Effective Date, deliver to the Administrative Agent or its counsel the
originally executed stock certificate(s) of Energy Steel & Supply Co.

ARTICLE VI

Negative Covenants

Until the Commitments shall have expired or been terminated and the principal of
and interest on each Loan and all fees, expenses and other amounts payable under
any Loan Document shall have been paid in full and all Letters of Credit shall
have expired or terminated, in each case without any pending draw, and all LC
Disbursements shall have been reimbursed, each Loan Party executing this
Agreement covenants and agrees, jointly and severally with all of the other Loan
Parties, with the Lenders that:

SECTION 6.01.  Indebtedness.  No Loan Party will, nor will it permit any
Subsidiary to, create, incur, assume or suffer to exist any Indebtedness,
except:

(a)  the Secured Obligations;

(b)    Indebtedness existing on the date hereof and set forth in Schedule 6.01
and any extensions, renewals, refinancings and replacements of any such
Indebtedness in accordance with clause (f) hereof;

 

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(c)    Indebtedness of the Borrower to any Subsidiary and of any Subsidiary to
the Borrower or any other Subsidiary, provided that (i) Indebtedness of any
Subsidiary that is not a Loan Party to the Borrower or any other Loan Party
shall be subject to Section 6.04 and (ii) Indebtedness of any Loan Party to any
Subsidiary that is not a Loan Party shall be subordinated to the Secured
Obligations on terms reasonably satisfactory to the Administrative Agent;

(d)  Guarantees by the Borrower of Indebtedness of any Subsidiary and by any
Subsidiary of Indebtedness of the Borrower or any other Subsidiary, provided
that (i) the Indebtedness so Guaranteed is permitted by this Section 6.01,
(ii) Guarantees by the Borrower or any other Loan Party of Indebtedness of any
Subsidiary that is not a Loan Party shall be subject to Section 6.04 and
(iii) Guarantees permitted under this clause (d) shall be subordinated to the
Secured Obligations on the same terms as the Indebtedness so Guaranteed is
subordinated to the Secured Obligations;

(e)      Indebtedness of the Borrower or any Subsidiary (i) incurred to finance
the acquisition, construction or improvement of any fixed or capital assets
(whether or not constituting purchase money Indebtedness), including Capital
Lease Obligations and any Indebtedness assumed in connection with the
acquisition of any such assets or secured by a Lien on any such assets prior to
the acquisition thereof, and extensions, renewals and replacements of any such
Indebtedness in accordance with clause (f) below; provided that such
Indebtedness described in clause (i) is incurred prior to or within 90 days
after such acquisition or the completion of such construction or improvement,
and (ii) other unsecured Indebtedness at any time outstanding; provided further,
however, that the aggregate principal amount of Indebtedness permitted by this
clause (e), together with any Refinance Indebtedness in respect thereof
permitted by clause (f) below, shall not exceed $1,000,000 at any time
outstanding;

(f)    Indebtedness which represents extensions, renewals, refinancing or
replacements (such Indebtedness being so extended, renewed, refinanced or
replaced being referred to herein as the “Refinance Indebtedness”) of any of the
Indebtedness described in clauses (b) and (e) and (i) hereof (such Indebtedness
being referred to herein as the “Original Indebtedness”); provided that (i) such
Refinance Indebtedness does not increase the principal amount or interest rate
of the Original Indebtedness, (ii) any Liens securing such Refinance
Indebtedness are not extended to any additional property of any Loan Party or
any Subsidiary, (iii) no Loan Party or any Subsidiary that is not originally
obligated with respect to repayment of such Original Indebtedness is required to
become obligated with respect to such Refinance Indebtedness, (iv) such
Refinance Indebtedness does not result in a shortening of the average weighted
maturity of such Original Indebtedness, (v) the terms of such Refinance
Indebtedness are not less favorable to the obligor thereunder than the original
terms of such Original Indebtedness and (vi) if such Original Indebtedness was
subordinated in right of payment to the Secured Obligations, then the terms and
conditions of such Refinance Indebtedness must include subordination terms and
conditions that are at least as favorable to the Administrative Agent and the
Lenders as those that were applicable to such Original Indebtedness;

(g)  Indebtedness owed to any Person providing workers’ compensation, health,
disability or other employee benefits or property, casualty or liability
insurance, pursuant to reimbursement or indemnification obligations to such
Person, in each case incurred in the ordinary course of business;

(h)  Indebtedness of any Loan Party in respect of performance bonds, bid bonds,
appeal bonds, surety bonds and similar obligations, in each case provided in the
ordinary course of business;

(i) Indebtedness of any Person that becomes a Subsidiary after the date hereof;
provided that (x) such Indebtedness exists at the time such Person becomes a
Subsidiary and is not created in contemplation of or in connection with such
Person becoming a Subsidiary and (y) the aggregate principal amount of
Indebtedness permitted by this clause (i) together with any Refinance
Indebtedness in respect thereof permitted by clause (f) above, shall not exceed
$1,000,000 at any time outstanding; and

(j)    Indebtedness of any Loan Party in connection with the reimbursement
obligations with respect to the Existing SBLCs not in excess of the aggregate
amount of such Existing SBLCs on the date hereof plus any fees incurred in
connection with the collection thereof (collectively, the “Existing
Reimbursement Obligations”).

 

 

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SECTION 6.02.  Liens.   No Loan Party will, nor will it permit any Subsidiary
to, create, incur, assume or permit to exist any Lien on any property (including
any Real Property) or asset now owned or hereafter acquired by it, or assign or
sell any income or revenues (including Accounts) or rights in respect of any
thereof, except:

(a) Liens created pursuant to any Loan Document;

(b) Permitted Encumbrances;

(c) any Lien on any property or asset of the Borrower or any Subsidiary existing
on the date hereof and set forth in Schedule 6.02; provided that (i) such Lien
shall not apply to any other property or asset of the Borrower or any Subsidiary
and (ii) such Lien shall secure only those obligations which it secures on the
date hereof and extensions, renewals and replacements thereof that do not
increase the outstanding principal amount thereof;

(d) Liens on fixed or capital assets acquired, constructed or improved by the
Borrower or any Subsidiary; provided that (i) such Liens secure Indebtedness
permitted by clause (e) of Section 6.01, (ii) such Liens and the Indebtedness
secured thereby are incurred prior to or within 90 days after such acquisition
or the completion of such construction or improvement, (iii) the Indebtedness
secured thereby does not exceed the cost of acquiring, constructing or improving
such fixed or capital assets and (iv) such Liens shall not apply to any other
property or assets of the Borrower or any Subsidiary;

(e) any Lien existing on any property or asset (other than Accounts and
Inventory) prior to the acquisition thereof by the Borrower or any Subsidiary or
existing on any property or asset (other than Accounts and Inventory) of any
Person that becomes a Loan Party after the date hereof prior to the time such
Person becomes a Loan Party; provided that (i) such Lien is not created in
contemplation of or in connection with such acquisition or such Person becoming
a Loan Party, as the case may be, (ii) such Lien shall not apply to any other
property or assets of the Loan Party and (iii) such Lien shall secure only those
obligations which it secures on the date of such acquisition or the date such
Person becomes a Loan Party, as the case may be, and extensions, renewals and
replacements thereof that do not increase the outstanding principal amount
thereof;

(f)  Liens of a collecting bank arising in the ordinary course of business under
Section 4-208 of the UCC in effect in the relevant jurisdiction covering only
the items being collected upon;

(g)  Liens arising out of Sale and Leaseback Transactions permitted by
Section 6.06;

(h)  Liens granted by a Subsidiary that is not a Loan Party in favor of the
Borrower or another Loan Party in respect of Indebtedness owed by such
Subsidiary; and

(i)  Liens on the Pledged Accounts to secure the Existing Reimbursement
Obligations.

 

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SECTION 6.03.  Fundamental Changes.

(a)  No Loan Party will, nor will it permit any Subsidiary to, merge into or
consolidate with any other Person, or permit any other Person to merge into or
consolidate with it, or liquidate or dissolve, except that, if at the time
thereof and immediately after giving effect thereto no Event of Default shall
have occurred and be continuing, (i) any Subsidiary of the Borrower may merge
into the Borrower in a transaction in which the Borrower is the surviving
entity, (ii) any Loan Party (other than the Borrower) may merge into any other
Loan Party in a transaction in which the surviving entity is a Loan Party and
(iii) any Subsidiary that is not a Loan Party may liquidate or dissolve if the
Borrower determines in good faith that such liquidation or dissolution is in the
best interests of the Borrower and is not materially disadvantageous to the
Lenders; provided that any such merger involving a Person that is not a wholly
owned Subsidiary immediately prior to such merger shall not be permitted unless
also permitted by Section 6.04.

(b)  No Loan Party will, nor will it permit any Subsidiary to, engage in any
business other than businesses of the type conducted by the Borrower and its
Subsidiaries on the date hereof and businesses reasonably related thereto.

(c) No Loan Party will, nor will it permit any Subsidiary to change its fiscal
year or any fiscal quarter from the basis in effect on the Effective Date.

(d) No Loan Party will change the accounting basis upon which its financial
statements are prepared.

(e) No Loan Party will change the tax filing elections it has made under the
Code.

SECTION 6.04.  Investments, Loans, Advances, Guarantees and Acquisitions.  No
Loan Party will, nor will it permit any Subsidiary to, form any subsidiary after
the Effective Date, or purchase, hold or acquire (including pursuant to any
merger with any Person that was not a Loan Party and a wholly owned Subsidiary
prior to such merger) any Equity Interests, evidences of indebtedness or other
securities (including any option, warrant or other right to acquire any of the
foregoing) of, make or permit to exist any loans or advances to, Guarantee any
obligations of, or make or permit to exist any investment or any other interest
in, any other Person, or purchase or otherwise acquire (in one transaction or a
series of transactions) any assets of any other Person constituting a business
unit (whether through purchase of assets, merger or otherwise), except:

(a)  Permitted Investments, subject to control agreements in favor of the
Administrative Agent for the benefit of the Secured Parties or otherwise subject
to a perfected security interest in favor of the Administrative Agent for the
benefit of the Secured Parties;

(b) investments in existence on the date hereof and described in Schedule 6.04;

(c)  investments by the Borrower and the Subsidiaries in Equity Interests in
their respective Subsidiaries, provided that (i) any such Equity Interests held
by a Loan Party shall be pledged pursuant to the Security Agreement (subject to
the limitations applicable to Equity Interests of a Foreign Subsidiary referred
to in Section 5.14) and (ii) the aggregate amount of investments by Loan Parties
in Subsidiaries that are not Loan Parties (together with outstanding
intercompany loans permitted under Section 6.04(d) and outstanding Guarantees
permitted under Section 6.04(e)) shall not exceed $1,000,000 at any time
outstanding (in each case determined without regard to any write-downs or
write-offs);

 

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(d)  loans or advances made by any Loan Party to any Subsidiary and made by any
Subsidiary to a Loan Party or any other Subsidiary, provided that (i) any such
loans and advances made by a Loan Party shall be evidenced by a promissory note
pledged pursuant to the Security Agreement and (ii) the amount of such loans and
advances made by Loan Parties to Subsidiaries that are not Loan Parties
(together with outstanding investments permitted under Section 6.04(c) and
outstanding Guarantees permitted under Section 6.04(e)) shall not exceed
$1,000,000 at any time outstanding (in each case determined without regard to
any write-downs or write-offs); provided, however, that, notwithstanding
anything to the contrary in this Section 6.04(d), the Borrower may make
investments in and loans to Borrower’s Wholly Owned Foreign Enterprise
Subsidiary (the “WOFE”) formed in China, which such investments and loans shall
not exceed an aggregate amount of $2,500,000 outstanding at any one time;

(e)  Guarantees constituting Indebtedness permitted by Section 6.01, provided
that the aggregate principal amount of Indebtedness of Subsidiaries that are not
Loan Parties that is Guaranteed by any Loan Party (together with outstanding
investments permitted under clause (ii) to the proviso to Section 6.04(c) and
outstanding intercompany loans permitted under clause (ii) to the proviso to
Section 6.04(d)) shall not exceed $1,000,000 at any time outstanding (in each
case determined without regard to any write-downs or write-offs);

(f) loans or advances made by a Loan Party to its employees on an arms-length
basis in the ordinary course of business consistent with past practices for
travel and entertainment expenses, relocation costs and similar purposes up to a
maximum of $250,000 in the aggregate at any one time outstanding;

(g) notes payable, or stock or other securities issued by Account Debtors to a
Loan Party pursuant to negotiated agreements with respect to settlement of such
Account Debtor’s Accounts in the ordinary course of business, consistent with
past practices;

(h)  investments in the form of Swap Agreements permitted by Section 6.07;

(i)   investments of any Person existing at the time such Person becomes a
Subsidiary of the Borrower or consolidates or merges with the Borrower or any
Subsidiary (including in connection with a permitted acquisition), so long as
such investments were not made in contemplation of such Person becoming a
Subsidiary or of such merger;

(j)    investments received in connection with the disposition of assets
permitted by Section 6.05;

(k)  investments constituting deposits described in clauses (c) and (d) of the
definition of the term “Permitted Encumbrances”;

(l)  Permitted Acquisitions; and

(m)    Investments not otherwise permitted under this Section 6.04 in an amount
not to exceed $250,000 in the aggregate any time outstanding.

SECTION 6.05.  Asset Sales.    No Loan Party will, nor will it permit any
Subsidiary to, sell, transfer, lease or otherwise dispose of any asset,
including any Equity Interest owned by it, nor will the Borrower permit any
Subsidiary to issue any additional Equity Interest in such Subsidiary (other
than to the Borrower or another Subsidiary in compliance with Section 6.04),
except:

(a)  sales, transfers and dispositions of (i) Inventory in the ordinary course
of business and (ii) used, obsolete, worn out or surplus Equipment or property
in the ordinary course of business;

 

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(b)    sales, transfers and dispositions of assets to the Borrower or any
Domestic Subsidiary, provided that any such sales, transfers or dispositions
involving a Domestic Subsidiary that is not a Loan Party shall be made in
compliance with Section 6.09;

(c)    sales, transfers and dispositions of Accounts (excluding sales or
dispositions in a factoring arrangement) in connection with the compromise,
settlement or collection thereof;

(d)    sales, transfers and dispositions of Permitted Investments and other
investments permitted by clauses (i) and (k) of Section 6.04;

(e)  Sale and Leaseback Transactions permitted by Section 6.06;

(f)    dispositions resulting from any casualty or other insured damage to, or
any taking under power of eminent domain or by condemnation or similar
proceeding of, any property or asset of the Borrower or any Subsidiary; and

(g)    sales, transfers and other dispositions of assets (other than Equity
Interests in a Subsidiary unless all Equity Interests in such Subsidiary are
sold) that are not permitted by any other clause of this Section, provided that
the aggregate fair market value of all assets sold, transferred or otherwise
disposed of in reliance upon this paragraph (g) shall not exceed $250,000 during
any fiscal year of the Borrower.

SECTION 6.06.  Sale and Leaseback Transactions.  No Loan Party will, nor will it
permit any Subsidiary to, enter into any arrangement, directly or indirectly,
whereby it shall sell or transfer any property, real or personal, used or useful
in its business, whether now owned or hereafter acquired, and thereafter rent or
lease such property or other property that it intends to use for substantially
the same purpose or purposes as the property sold or transferred (a “Sale and
Leaseback Transaction”), except for any such sale of any fixed or capital assets
by the Borrower or any Subsidiary that is made for cash consideration in an
amount not less than the fair value of such fixed or capital asset and is
consummated within 90 days after the Borrower or such Subsidiary acquires or
completes the construction of such fixed or capital asset.

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

SECTION 6.08.  Restricted Payments; Certain Payments of Indebtedness.

(a)  No Loan Party will, nor will it permit any Subsidiary to, declare or make,
or agree to declare or make, directly or indirectly, any Restricted Payment, or
incur any obligation (contingent or

 

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otherwise) to do so, except (i) the Borrower may declare and pay dividends with
respect to its common stock payable solely in additional shares of its common
stock, and, with respect to its preferred stock, payable solely in additional
shares of such preferred stock or in shares of its common stock,
(ii) Subsidiaries may declare and pay dividends ratably with respect to their
Equity Interests, and (iii) so long as no Event of Default has occurred and is
continuing or would result after giving effect to any distribution pursuant to
this paragraph (a), the Borrower may make unlimited dividends, redemptions of
its Equity Interests, distributions and withdrawals to its owners; provided,
however, that if the Borrower’s Funded Indebtedness to EBITDA Ratio as of the
last day of the most recent fiscal quarter of the Borrower then ended is greater
than 2.0 to 1.0, calculated pursuant to Section 6.12, any dividends,
redemptions, distributions or withdrawals permitted pursuant to this subsection
(iii) shall not exceed twenty five percent (25%) of Net Income of the Borrower
for the four (4) fiscal quarters ending on the last day of the most recent
fiscal quarter of the Borrower then ended.

(b)    No Loan Party will, nor will it permit any Subsidiary to, make or agree
to pay or make, directly or indirectly, any payment or other distribution
(whether in cash, securities or other property) of or in respect of principal of
or interest on any Indebtedness, or any payment or other distribution (whether
in cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any Indebtedness, except:

(i)  payment of Indebtedness created under the Loan Documents;

(ii)    payment of regularly scheduled interest and principal payments as and
when due in respect of any Indebtedness permitted under Section 6.01, other than
payments in respect of the Subordinated Indebtedness prohibited by the
subordination provisions thereof;

(iii)  refinancings of Indebtedness to the extent permitted by Section 6.01; and

(iv)    payment of secured Indebtedness that becomes due as a result of the
voluntary sale or transfer of the property or assets securing such Indebtedness
to the extent such sale or transfer is permitted by the terms of Section 6.05.

SECTION 6.09.  Transactions with Affiliates.  No Loan Party will, nor will it
permit any Subsidiary to, sell, lease or otherwise transfer any property or
assets to, or purchase, lease or otherwise acquire any property or assets from,
or otherwise engage in any other transactions with, any of its Affiliates,
except (a) transactions that (i) are in the ordinary course of business and
(ii) are at prices and on terms and conditions not less favorable to such Loan
Party or such Subsidiary than could be obtained on an arm’s-length basis from
unrelated third parties, (b) transactions between or among the Loan Parties not
involving any other Affiliate, (c) any investment permitted by Sections 6.04(c)
or 6.04(d), (d) any Indebtedness permitted under Section 6.01(c), (e) any
Restricted Payment permitted by Section 6.08, (f) loans or advances to employees
permitted under Section 6.04(f), (g) the payment of reasonable fees to directors
of the Borrower or any Subsidiary who are not employees of the Borrower or any
Subsidiary, and compensation and employee benefit arrangements paid to, and
indemnities provided for the benefit of, directors, officers or employees of the
Borrower or its Subsidiaries in the ordinary course of business, and (h) any
issuances of securities or other payments, awards or grants in cash, securities
or otherwise pursuant to, or the funding of, employment agreements, stock
options and stock ownership plans approved by the Borrower’s board of directors.

SECTION 6.10.    Restrictive Agreements.    No Loan Party will, nor will it
permit any Subsidiary to, directly or indirectly enter into, incur or permit to
exist any agreement or other arrangement that prohibits, restricts or imposes
any condition upon (a) the ability of such Loan Party or any Subsidiary

 

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to create, incur or permit to exist any Lien upon any of its property or assets,
or (b) the ability of any Subsidiary to pay dividends or other distributions
with respect to any Equity Interests or to make or repay loans or advances to
the Borrower or any other Subsidiary or to Guarantee Indebtedness of the
Borrower or any other Subsidiary; provided that (i) the foregoing shall not
apply to restrictions and conditions imposed by any Requirement of Law or by any
Loan Document, (ii) the foregoing shall not apply to restrictions and conditions
existing on the date hereof identified on Schedule 6.10 (but shall apply to any
extension or renewal of, or any amendment or modification expanding the scope
of, any such restriction or condition), (iii) the foregoing shall not apply to
customary restrictions and conditions contained in agreements relating to the
sale of a Subsidiary pending such sale, provided such restrictions and
conditions apply only to the Subsidiary that is to be sold and such sale is
permitted hereunder, (iv) clause (a) of the foregoing shall not apply to
restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness and (v) clause
(a) of the foregoing shall not apply to customary provisions in leases and other
contracts restricting the assignment thereof.

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

SECTION 6.12. Financial Covenants.

(a)        Funded Indebtedness to EBITDA Ratio.    The Borrower will not permit
its Funded Indebtedness to EBITDA Ratio, on the last day of any fiscal quarter,
to exceed 3.5 to 1.0. The Funded Indebtedness to EBITDA Ratio shall be
calculated on a trailing twelve (12) month basis and tested on the last day of
each fiscal quarter commencing with the calendar quarter ending December 31,
2015.

(b)        Interest Coverage Ratio.    The Borrower will not permit the Interest
Coverage Ratio, for any period of four consecutive fiscal quarters ending on the
last day of any fiscal quarter, to be less than 4.0 to 1.0. The Interest
Coverage Ratio shall be calculated on a trailing twelve (12) month basis and
tested on the last day of each calendar quarter commencing with the calendar
quarter ending December 31, 2015.

ARTICLE VII

Events of Default

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

(a)  the Borrower shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise;

(b) the Borrower shall fail to pay any interest on any Loan or any fee or any
other amount (other than an amount referred to in clause (a) of this Article)
payable under this Agreement or any other Loan Document, when and as the same
shall become due and payable, and such failure shall continue unremedied for a
period of five (5) days;

 

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(c) any representation or warranty made or deemed made by or on behalf of any
Loan Party or any Subsidiary in, or in connection with, this Agreement or any
other Loan Document or any amendment or modification hereof or thereof or waiver
hereunder or thereunder, or in any report, certificate, financial statement or
other document furnished pursuant to or in connection with this Agreement or any
other Loan Document or any amendment or modification hereof or thereof or waiver
hereunder or thereunder, shall prove to have been materially incorrect when made
or deemed made;

(d) any Loan Party shall fail to observe or perform any covenant, condition or
agreement contained in Section 5.02(a), 5.03 (with respect to a Loan Party’s
existence) or 5.08 or in Article VI;

(e) any Loan Party shall fail to observe or perform any covenant, condition or
agreement contained in this Agreement or any other Loan Document (other than
those specified in clause (a), (b) or (d)), and such failure shall continue
unremedied for a period of (i) 5 days after the earlier of any Loan Party’s
knowledge of such breach or notice thereof from the Administrative Agent (which
notice will be given at the request of any Lender) if such breach relates to
terms or provisions of Section 5.01, 5.02 (other than Section 5.02(a)), 5.03
through 5.07, 5.10, 5.11 or 5.13 of this Agreement or (ii) 15 days after the
earlier of any Loan Party’s knowledge of such breach or notice thereof from the
Administrative Agent (which notice will be given at the request of any Lender)
if such breach relates to terms or provisions of any other Section of this
Agreement or of any other Loan Document;

(f) any Loan Party or any Subsidiary shall fail to make any payment (whether of
principal or interest and regardless of amount) in respect of any Material
Indebtedness, when and as the same shall become due and payable;

(g) any event or condition occurs that results in any Material Indebtedness
becoming due prior to its scheduled maturity or that enables or permits (with or
without the giving of notice, the lapse of time or both) the holder or holders
of any Material Indebtedness or any trustee or agent on its or their behalf to
cause any Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity;
provided that this clause (g) shall not apply to secured Indebtedness that
becomes due as a result of the voluntary sale or transfer of the property or
assets securing such Indebtedness to the extent such sale or transfer is
permitted by the terms of Section 6.05;

(h) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of a Loan Party or Subsidiary or its debts, or of a substantial part of
its assets, under any federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for any Loan Party or any Subsidiary or for a substantial part of its assets,
and, in any such case, such proceeding or petition shall continue undismissed
for sixty (60) days or an order or decree approving or ordering any of the
foregoing shall be entered;

(i) any Loan Party or any Subsidiary shall (i) voluntarily commence any
proceeding or file any petition seeking liquidation, reorganization or other
relief under any federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect, (ii) consent to the institution of,
or fail to contest in a timely and appropriate manner, any proceeding or
petition described in clause (h) of this Article, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for such Loan Party or Subsidiary of any Loan Party or for a
substantial part of its assets, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make a
general assignment for the benefit of creditors or (vi) take any action for the
purpose of effecting any of the foregoing;

 

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(j) any Loan Party or any Subsidiary shall become unable, admit in writing its
inability, or publicly declare its intention not to, or fail generally, to pay
its debts as they become due;

(k) one or more judgments for the payment of money in an aggregate amount in
excess of $500,000 shall be rendered against any Loan Party, any Subsidiary or
any combination thereof and the same shall remain undischarged for a period of
thirty (30) consecutive days during which execution shall not be effectively
stayed, or any action shall be legally taken by a judgment creditor to attach or
levy upon any assets of any Loan Party or any Subsidiary to enforce any such
judgment or any Loan Party or any Subsidiary shall fail within thirty (30) days
to discharge one or more non-monetary judgments or orders which, individually or
in the aggregate, could reasonably be expected to have a Material Adverse
Effect, which judgments or orders, in any such case, are not stayed on appeal
and being appropriately contested in good faith by proper proceedings diligently
pursued;

(l) an ERISA Event shall have occurred that, in the business judgment of the
Required Lenders, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to result in a Material Adverse Effect;

(m) a Change in Control shall occur;

(n) the Loan Guaranty or any Obligation Guaranty shall fail to remain in full
force or effect or any action shall be taken to discontinue or to assert the
invalidity or unenforceability of the Loan Guaranty or any Obligation Guaranty,
or any Loan Guarantor shall fail to comply with any of the terms or provisions
of the Loan Guaranty or any Obligation Guaranty to which it is a party, or any
Loan Guarantor shall deny that it has any further liability under the Loan
Guaranty or any Obligation Guaranty to which it is a party, or shall give notice
to such effect, including, but not limited to notice of termination delivered
pursuant to Section 10.08 or any notice of termination delivered pursuant to the
terms of any Obligation Guaranty;

(o)  except as permitted by the terms of any Collateral Document, (i) any
Collateral Document shall for any reason fail to create a valid security
interest in any Collateral purported to be covered thereby, or (ii) any Lien
securing any Secured Obligation shall cease to be a perfected, first priority
Lien;

(p) any Collateral Document shall fail to remain in full force or effect or any
action shall be taken to discontinue or to assert the invalidity or
unenforceability of any Collateral Document;

(q) any material provision of any Loan Document for any reason ceases to be
valid, binding and enforceable in accordance with its terms (or any Loan Party
shall challenge the enforceability of any Loan Document or shall assert in
writing, or engage in any action or inaction that evidences its assertion, that
any provision of any of the Loan Documents has ceased to be or otherwise is not
valid, binding and enforceable in accordance with its terms); or

(r) any Loan Party is criminally indicted or convicted under any law that may
reasonably be expected to lead to a forfeiture of any property of such Loan
Party having a fair market value in excess of $250,000;

then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower, take either or
both of the following actions, at the same or different times: (i) terminate the
Commitments, whereupon the Commitments shall terminate immediately, and
(ii) declare the Loans then outstanding to be due and

 

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payable in whole (or in part, but ratably as among the Classes of Loans and the
Loans of each Class at the time outstanding, in which case any principal not so
declared to be due and payable may thereafter be declared to be due and
payable), whereupon the principal of the Loans so declared to be due and
payable, together with accrued interest thereon and all fees and other
obligations of the Borrower accrued hereunder, shall become due and payable
immediately, in each case without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Borrower; and in the case of
any event with respect to the Borrower described in clause (h) or (i) of this
Article, the Commitments shall automatically terminate and the principal of the
Loans then outstanding, together with accrued interest thereon and all fees and
other obligations of the Borrower accrued hereunder, shall automatically become
due and payable, in each case without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower. Upon the
occurrence and during the continuance of an Event of Default, the Administrative
Agent may, and at the request of the Required Lenders shall, increase the rate
of interest applicable to the Loans and other Obligations as set forth in this
Agreement and exercise any rights and remedies provided to the Administrative
Agent under the Loan Documents or at law or equity, including all remedies
provided under the UCC.

ARTICLE VIII

The Administrative Agent

SECTION 8.01.  Appointment.  Each of the Lenders, on behalf of itself and any of
its Affiliates that are Secured Parties and the Issuing Bank hereby irrevocably
appoints the Administrative Agent as its agent and authorizes the Administrative
Agent to take such actions on its behalf, including execution of the other Loan
Documents, and to exercise such powers as are delegated to the Administrative
Agent by the terms of the Loan Documents, together with such actions and powers
as are reasonably incidental thereto. In addition, to the extent required under
the laws of any jurisdiction other than the U.S., each of the Lenders and the
Issuing Bank hereby grants to the Administrative Agent any required powers of
attorney to execute any Collateral Document governed by the laws of such
jurisdiction on such Lender’s or Issuing Bank’s behalf. The provisions of this
Article are solely for the benefit of the Administrative Agent and the Lenders
(including the Swingline Lender and the Issuing Bank), and the Loan Parties
shall not have rights as a third party beneficiary of any of such provisions. It
is understood and agreed that the use of the term “agent” as used herein or in
any other Loan Documents (or any similar term) with reference to the
Administrative Agent is not intended to connote any fiduciary or other implied
(or express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used as a matter of market custom, and is intended to
create or reflect only an administrative relationship between independent
contracting parties.

SECTION 8.02.  Rights as a Lender.  The bank serving as the Administrative Agent
hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as though it were not the
Administrative Agent, and such bank and its Affiliates may accept deposits from,
lend money to and generally engage in any kind of business with any Loan Party
or any Subsidiary or any Affiliate thereof as if it were not the Administrative
Agent hereunder.

SECTION 8.03.  Duties and Obligations.  The Administrative Agent shall not have
any duties or obligations except those expressly set forth in the Loan
Documents. Without limiting the generality of the foregoing, (a) the
Administrative Agent shall not be subject to any fiduciary or other implied
duties, regardless of whether a Default has occurred and is continuing, (b) the
Administrative Agent shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated by the Loan Documents that the Administrative Agent is
required to exercise as directed in writing by the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 9.02), and, (c) except

 

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as expressly set forth in the Loan Documents, the Administrative Agent shall not
have any duty to disclose, and shall not be liable for the failure to disclose,
any information relating to any Loan Party or any Subsidiary that is
communicated to or obtained by the bank serving as Administrative Agent or any
of its Affiliates in any capacity. The Administrative Agent shall not be liable
for any action taken or not taken by it with the consent or at the request of
the Required Lenders (or such other number or percentage of the Lenders as shall
be necessary under the circumstances as provided in Section 9.02) or in the
absence of its own gross negligence or willful misconduct as determined by a
final nonappealable judgment of a court of competent jurisdiction. The
Administrative Agent shall be deemed not to have knowledge of any Default unless
and until written notice thereof is given to the Administrative Agent by the
Borrower or a Lender, and the Administrative Agent shall not be responsible for
or have any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with any Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or in
connection with any Loan Document, (iii) the performance or observance of any of
the covenants, agreements or other terms or conditions set forth in any Loan
Document, (iv) the validity, enforceability, effectiveness or genuineness of any
Loan Document or any other agreement, instrument or document, (v) the creation,
perfection or priority of Liens on the Collateral or the existence of the
Collateral, or (vi) the satisfaction of any condition set forth in Article IV or
elsewhere in any Loan Document, other than to confirm receipt of items expressly
required to be delivered to the Administrative Agent.

SECTION 8.04.  Reliance.  The Administrative Agent shall be entitled to rely
upon, and shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or by
telephone and believed by it to be made by the proper Person, and shall not
incur any liability for relying thereon. The Administrative Agent may consult
with legal counsel (who may be counsel for the Borrower), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.

SECTION 8.05.  Actions through Sub-Agents.  The Administrative Agent may perform
any and all of its duties and exercise its rights and powers by or through any
one or more sub-agents appointed by the Administrative Agent. The Administrative
Agent and any such sub-agent may perform any and all of its duties and exercise
its rights and powers through their respective Related Parties. The exculpatory
provisions of the preceding paragraphs shall apply to any such sub-agent and to
the Related Parties of the Administrative Agent and any such sub-agent, and
shall apply to their respective activities in connection with the syndication of
the credit facilities provided for herein as well as activities as the
Administrative Agent.

SECTION 8.06.  Resignation.  Subject to the appointment and acceptance of a
successor Administrative Agent as provided in this paragraph, the Administrative
Agent may resign at any time by notifying the Lenders, the Issuing Bank and the
Borrower. Upon any such resignation, the Required Lenders shall have the right,
in consultation with the Borrower, to appoint a successor. If no successor shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within thirty (30) days after the retiring Administrative Agent
gives notice of its resignation, then the retiring Administrative Agent may, on
behalf of the Lenders and the Issuing Bank, appoint a successor Administrative
Agent which shall be a bank with an office in New York, New York, or an
Affiliate of any such bank. Upon the acceptance of its appointment as
Administrative Agent hereunder by its successor, such successor shall succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder and under the other Loan
Documents. The fees payable by the Borrower to a successor Administrative Agent
shall be the same as those payable to its predecessor, unless otherwise agreed
by the Borrower and such successor. Notwithstanding the foregoing, in the event
no successor

 

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Administrative Agent shall have been so appointed and shall have accepted such
appointment within thirty (30) days after the retiring Administrative Agent
gives notice of its intent to resign, the retiring Administrative Agent may give
notice of the effectiveness of its resignation to the Lenders, the Issuing Banks
and the Borrower, whereupon, on the date of effectiveness of such resignation
stated in such notice, (a) the retiring Administrative Agent shall be discharged
from its duties and obligations hereunder and under the other Loan Documents,
provided that, solely for purposes of maintaining any security interest granted
to the Administrative Agent under any Collateral Document for the benefit of the
Secured Parties, the retiring Administrative Agent shall continue to be vested
with such security interest as collateral agent for the benefit of the Secured
Parties and, in the case of any Collateral in the possession of the
Administrative Agent, shall continue to hold such Collateral, in each case until
such time as a successor Administrative Agent is appointed and accepts such
appointment in accordance with this paragraph (it being understood and agreed
that the retiring Administrative Agent shall have no duty or obligation to take
any further action under any Collateral Document, including any action required
to maintain the perfection of any such security interest), and (b) the Required
Lenders shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, provided that
(i) all payments required to be made hereunder or under any other Loan Document
to the Administrative Agent for the account of any Person other than the
Administrative Agent shall be made directly to such Person and (ii) all notices
and other communications required or contemplated to be given or made to the
Administrative Agent shall also directly be given or made to each Lender and
each Issuing Bank. Following the effectiveness of the Administrative Agent’s
resignation from its capacity as such, the provisions of this Article,
Section 2.17(d) and Section 9.03, as well as any exculpatory, reimbursement and
indemnification provisions set forth in any other Loan Document, shall continue
in effect for the benefit of such retiring Administrative Agent, its sub-agents
and their respective Related Parties in respect of any actions taken or omitted
to be taken by any of them while it was acting as Administrative Agent and in
respect of the matters referred to in the proviso under clause (a) above.

SECTION 8.07.  Non-Reliance.

(a)  Each Lender acknowledges and agrees that the extensions of credit made
hereunder are commercial loans and letters of credit and not investments in a
business enterprise or securities. Each Lender further represents that it is
engaged in making, acquiring or holding commercial loans in the ordinary course
of its business and has, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement as a Lender, and to make, acquire or hold
Loans hereunder. Each Lender shall, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information (which may contain material, non-public information within the
meaning of the U.S. securities laws concerning the Borrower and its Affiliates)
as it shall from time to time deem appropriate, continue to make its own
decisions in taking or not taking action under or based upon this Agreement, any
other Loan Document, any related agreement or any document furnished hereunder
or thereunder and in deciding whether or to the extent to which it will continue
as a Lender or assign or otherwise transfer its rights, interests and
obligations hereunder.

(b)  Each Lender hereby agrees that (i) it has requested a copy of each Report
prepared by or on behalf of the Administrative Agent; (ii) the Administrative
Agent (A) makes no representation or warranty, express or implied, as to the
completeness or accuracy of any Report or any of the information contained
therein or any inaccuracy or omission contained in or relating to a Report and
(B) shall not be liable for any information contained in any Report; (iii) the
Reports are not comprehensive audits or examinations, and that any Person
performing any field examination will inspect only specific information
regarding the Loan Parties and will rely significantly upon the Loan Parties’
books and records, as well as on representations of the Loan Parties’ personnel
and that the Administrative Agent undertakes no obligation to update, correct or
supplement the Reports; (iv) it will keep all Reports

 

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confidential and strictly for its internal use, not share the Report with any
Loan Party or any other Person except as otherwise permitted pursuant to this
Agreement; and (v) without limiting the generality of any other indemnification
provision contained in this Agreement, (A) it will hold the Administrative Agent
and any such other Person preparing a Report harmless from any action the
indemnifying Lender may take or conclusion the indemnifying Lender may reach or
draw from any Report in connection with any extension of credit that the
indemnifying Lender has made or may make to the Borrower, or the indemnifying
Lender’s participation in, or the indemnifying Lender’s purchase of, a Loan or
Loans; and (B) it will pay and protect, and indemnify, defend, and hold the
Administrative Agent and any such other Person preparing a Report harmless from
and against, the claims, actions, proceedings, damages, costs, expenses, and
other amounts (including reasonable attorneys’ fees) incurred by the
Administrative Agent or any such other Person as the direct or indirect result
of any third parties who might obtain all or part of any Report through the
indemnifying Lender.

 

SECTION 8.08.  Not Partners or Co-Venturers; Administrative Agent as
Representative of the Secured Parties.

(a)        The Lenders are not partners or co-venturers, and no Lender shall be
liable for the acts or omissions of, or (except as otherwise set forth herein in
case of the Administrative Agent) authorized to act for, any other Lender. The
Administrative Agent shall have the exclusive right on behalf of the Lenders to
enforce the payment of the principal of and interest on any Loan after the date
such principal or interest has become due and payable pursuant to the terms of
this Agreement.

(b)        In its capacity, the Administrative Agent is a “representative” of
the Secured Parties within the meaning of the term “secured party” as defined in
the UCC. Each Lender authorizes the Administrative Agent to enter into each of
the Collateral Documents to which it is a party and to take all action
contemplated by such documents. Each Lender agrees that no Secured Party (other
than the Administrative Agent) shall have the right individually to seek to
realize upon the security granted by any Collateral Document, it being
understood and agreed that such rights and remedies may be exercised solely by
the Administrative Agent for the benefit of the Secured Parties upon the terms
of the Collateral Documents. In the event that any Collateral is hereafter
pledged by any Person as collateral security for the Secured Obligations, the
Administrative Agent is hereby authorized, and hereby granted a power of
attorney, to execute and deliver on behalf of the Secured Parties any Loan
Documents necessary or appropriate to grant and perfect a Lien on such
Collateral in favor of the Administrative Agent on behalf of the Secured
Parties.

ARTICLE IX

Miscellaneous

SECTION 9.01.  Notices.

(a) Except in the case of notices and other communications expressly permitted
to be given by telephone or Electronic Systems (and subject in each case to
paragraph (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by fax, as follows:

 

  (i)

if to any Loan Party, to it in care of the Borrower at:

Graham Corporation

20 Florence Avenue

Batavia, New York 14020

Attention: Jeffrey Glajch

Fax No: (585) 815-2003

 

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With a copy to:

Harter Secrest & Emery LLP

1600 Bausch & Lomb Place

Rochester, New York 14606

Attention: Daniel Kinel, Esq.

Fax No: (585) 232-2152

 

  (ii)

if to the Administrative Agent, the Swingline Lender, or the Issuing Bank, to
JPMorgan Chase Bank, N.A. at:

JPMorgan Chase Bank, N.A.

One Chase Square, 11th Floor

Rochester, NY 14643

Attention: Kathleen McCarney

Email: Kathleen.mccarney@chase.com

Phone: (585) 797-0174

Fax No.: (585) 797-1880

With a copy to:

JPMorgan Chase Bank, N.A.

One Chase Square, 11th Floor

Rochester, NY 14643

Attention: Philip M. Hendrix

Email: Philip.m.hendrix@chase.com

Phone: (585) 797-0172

Fax No.: (585) 797-1880

 

  (iii)

if to any other Lender, to it at its address or fax number set forth in its
Administrative Questionnaire.

All such notices and other communications (i) sent by hand or overnight courier
service, or mailed by certified or registered mail shall be deemed to have been
given when received, (ii) sent by fax shall be deemed to have been given when
sent, provided that if not given during normal business hours for the recipient,
such notice or communication shall be deemed to have been given at the opening
of business on the next Business Day of the recipient, or (iii) delivered
through Electronic Systems to the extent provided in paragraph (b) below shall
be effective as provided in such paragraph.

(b)   Notices and other communications to the Lenders hereunder may be delivered
or furnished by Electronic Systems pursuant to procedures approved by the
Administrative Agent; provided that the foregoing shall not apply to notices
pursuant to Article II or to compliance and no Default certificates delivered
pursuant to Section 5.01(d) unless otherwise agreed by the Administrative Agent
and the applicable Lender. Each of the Administrative Agent and the Borrower (on
behalf of the Loan Parties) may, in its discretion, agree to accept notices and
other communications to it hereunder by Electronic Systems pursuant to
procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications. Unless the Administrative Agent
otherwise

 

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proscribes, all such notices and other communications (i) sent to an e-mail
address shall be deemed received upon the sender’s receipt of an acknowledgement
from the intended recipient (such as by the “return receipt requested” function,
as available, return e-mail or other written acknowledgement), provided that if
not given during the normal business hours of the recipient, such notice or
communication shall be deemed to have been given at the opening of business on
the next Business Day for the recipient, and, (ii) except for notices sent to
any Loan Party, posted to an Internet or intranet website shall be deemed
received upon the deemed receipt by the intended recipient, at its e-mail
address as described in the foregoing clause (i), of notification that such
notice or communication is available and identifying the website address
therefor; provided that, for both clauses (i) and (ii) above, if such notice,
e-mail or other communication is not sent during the normal business hours of
the recipient, such notice or communication shall be deemed to have been sent at
the opening of business on the next Business Day of the recipient.

(c)   Any party hereto may change its address, facsimile number or e-mail
address for notices and other communications hereunder by notice to the other
parties hereto.

(d)  Electronic Systems.

(i)        Each Loan Party agrees that the Administrative Agent may, but shall
not be obligated to, make Communications (as defined below) available to the
Issuing Bank and the other Lenders by posting the Communications on Debt Domain,
Intralinks, Syndtrak, ClearPar or a substantially similar Electronic System.

(ii)        Any Electronic System used by the Administrative Agent is provided
“as is” and “as available.” The Agent Parties (as defined below) do not warrant
the adequacy of such Electronic Systems and expressly disclaim liability for
errors or omissions in the Communications. No warranty of any kind, express,
implied or statutory, including any warranty of merchantability, fitness for a
particular purpose, non-infringement of third-party rights or freedom from
viruses or other code defects, is made by any Agent Party in connection with the
Communications or any Electronic System. In no event shall the Administrative
Agent or any of its Related Parties (collectively, the “Agent Parties”) have any
liability to the Borrower or the other Loan Parties, any Lender, the Issuing
Bank or any other Person or entity for damages of any kind, including direct or
indirect, special, incidental or consequential damages, losses or expenses
(whether in tort, contract or otherwise) arising out of the Borrower’s, any Loan
Party’s or the Administrative Agent’s transmission of communications through an
Electronic System. “Communications” means, collectively, any notice, demand,
communication, information, document or other material provided by or on behalf
of any Loan Party pursuant to any Loan Document or the transactions contemplated
therein which is distributed by the Administrative Agent, any Lender or the
Issuing Bank by means of electronic communications pursuant to this Section,
including through an Electronic System.

SECTION 9.02.  Waivers; Amendments.

(a)  No failure or delay by the Administrative Agent, the Issuing Bank or any
Lender in exercising any right or power hereunder or under any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of
the Administrative Agent, the Issuing Bank and the Lenders hereunder and under
any other Loan Document are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision of any Loan
Document or consent to any departure by any Loan Party therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) of this
Section, and then such waiver or consent shall

 

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be effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether the Administrative Agent, any Lender or the
Issuing Bank may have had notice or knowledge of such Default at the time.

(b)         Neither this Agreement nor any other Loan Document nor any provision
hereof or thereof may be waived, amended or modified except (i) in the case of
this Agreement, pursuant to an agreement or agreements in writing entered into
by the Borrower and the Required Lenders or (ii) in the case of any other Loan
Document, pursuant to an agreement or agreements in writing entered into by the
Administrative Agent and the Loan Party or Loan Parties that are parties
thereto, with the consent of the Required Lenders; provided that no such
agreement shall (A) increase the Commitment of any Lender without the written
consent of such Lender (including any such Lender that is a Defaulting Lender),
(B) reduce or forgive the principal amount of any Loan or LC Disbursement or
reduce the rate of interest thereon, or reduce or forgive any interest or fees
payable hereunder, without the written consent of each Lender (including any
such Lender that is a Defaulting Lender) affected thereby, (C) postpone any
scheduled date of payment of the principal amount of any Loan or LC
Disbursement, or any date for the payment of any interest, fees or other
Obligations payable hereunder, or reduce the amount of, waive or excuse any such
payment, or postpone the scheduled date of expiration of any Commitment, without
the written consent of each Lender (including any such Lender that is a
Defaulting Lender) affected thereby, (D) change Section 2.18(b) or (d) in a
manner that would alter the manner in which payments are shared, without the
written consent of each Lender (other than any Defaulting Lender), (E) change
any of the provisions of this Section or the definition of “Required Lenders” or
any other provision of any Loan Document specifying the number or percentage of
Lenders (or Lenders of any Class) required to waive, amend or modify any rights
thereunder or make any determination or grant any consent thereunder, without
the written consent of each Lender (other than any Defaulting Lender) directly
affected thereby, (F) change Section 2.20, without the consent of each Lender
(other than any Defaulting Lender), (G) release any Guarantor from its
obligation under its Loan Guaranty or any Obligation Guaranty (except as
otherwise permitted herein or in the other Loan Documents), without the written
consent of each Lender (other than any Defaulting Lender), or (H) except as
provided in clause (c) of this Section or in any Collateral Document, release
all or substantially all of the Collateral without the written consent of each
Lender (other than any Defaulting Lender); provided further that no such
agreement shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent, the Swingline Lender or the Issuing Bank hereunder without
the prior written consent of the Administrative Agent, the Swingline Lender or
the Issuing Bank, as the case may be (it being understood that any amendment to
Section 2.20 shall require the consent of the Administrative Agent, the
Swingline Lender and the Issuing Bank). The Administrative Agent may also amend
the Commitment Schedule to reflect assignments entered into pursuant to
Section 9.04. Any amendment, waiver or other modification of this Agreement or
any other Loan Document that by its terms affects the rights or duties under
this Agreement of the Lenders of one or more Classes (but not the Lenders of any
other Class), may be effected by an agreement or agreements in writing entered
into by the Borrower and the requisite number or percentage in interest of each
affected Class of Lenders that would be required to consent thereto under this
Section if such Class of Lenders were the only Class of Lenders hereunder at the
time.

(c)         The Lenders and the Issuing Bank hereby irrevocably authorize the
Administrative Agent, at its option and in its sole discretion, to release any
Liens granted to the Administrative Agent by the Loan Parties on any Collateral
(i) upon the termination of all of the Commitments, payment and satisfaction in
full of all Secured Obligations (other than Unliquidated Obligations), and the
cash collateralization of all Unliquidated Obligations in a manner satisfactory
to each affected Lender, (ii) constituting property being sold or disposed of if
the Loan Party disposing of such property certifies to the Administrative Agent
that the sale or disposition is made in compliance with the terms of this
Agreement (and the Administrative Agent may rely conclusively on any such
certificate,

 

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without further inquiry), and to the extent that the property being sold or
disposed of constitutes 100% of the Equity Interests of a Subsidiary, the
Administrative Agent is authorized to release any Loan Guaranty or Obligation
Guaranty provided by such Subsidiary, (iii) constituting property leased to a
Loan Party under a lease which has expired or been terminated in a transaction
permitted under this Agreement, or (iv) as required to effect any sale or other
disposition of such Collateral in connection with any exercise of remedies of
the Administrative Agent and the Lenders pursuant to Article VII. Except as
provided in the preceding sentence, the Administrative Agent will not release
any Liens on Collateral without the prior written authorization of the Required
Lenders; provided that the Administrative Agent may, in its discretion, release
its Liens on Collateral that the Administrative Agent determines, in its sole
discretion, not to be a material portion of the Collateral during any calendar
year without the prior written authorization of the Required Lenders (it being
agreed that the Administrative Agent may rely conclusively on one or more
certificates of the Borrower as to the value of any Collateral to be so
released, without further inquiry). Any such release shall not in any manner
discharge, affect, or impair the Obligations or any Liens (other than those
expressly being released) upon (or obligations of the Loan Parties in respect
of) all interests retained by the Loan Parties, including the proceeds of any
sale, all of which shall continue to constitute part of the Collateral. Any
execution and delivery by the Administrative Agent of documents in connection
with any such release shall be without recourse to or warranty by the
Administrative Agent.

(d)         If, in connection with any proposed amendment, waiver or consent
requiring the consent of “each Lender” or “each Lender affected thereby,” the
consent of the Required Lenders is obtained, but the consent of other necessary
Lenders is not obtained (any such Lender whose consent is necessary but has not
been obtained being referred to herein as a “Non-Consenting Lender”), then the
Borrower may elect to replace a Non-Consenting Lender as a Lender party to this
Agreement, provided that, concurrently with such replacement, (i) another bank
or other entity which is reasonably satisfactory to the Borrower, the
Administrative Agent and the Issuing Bank shall agree, as of such date, to
purchase for cash the Loans and other Obligations due to the Non-Consenting
Lender pursuant to an Assignment and Assumption and to become a Lender for all
purposes under this Agreement and to assume all obligations of the
Non-Consenting Lender to be terminated as of such date and to comply with the
requirements of clause (b) of Section 9.04, and (ii) the Borrower shall pay to
such Non-Consenting Lender in same day funds on the day of such replacement
(1) all interest, fees and other amounts then accrued but unpaid to such
Non-Consenting Lender by the Borrower hereunder to and including the date of
termination, including without limitation payments due to such Non-Consenting
Lender under Sections 2.15 and 2.17, and (2) an amount, if any, equal to the
payment which would have been due to such Lender on the day of such replacement
under Section 2.16 had the Loans of such Non-Consenting Lender been prepaid on
such date rather than sold to the replacement Lender.

(e)         Notwithstanding anything to the contrary herein the Administrative
Agent may, with the consent of the Borrower only, amend, modify or supplement
this Agreement or any of the other Loan Documents to cure any ambiguity,
omission, mistake, defect or inconsistency.

SECTION 9.03.   Expenses; Indemnity; Damage Waiver.

(a)  The Loan Parties, jointly and severally, shall pay all (i) reasonable
out-of-pocket expenses incurred by the Administrative Agent and its Affiliates,
including the reasonable fees, charges and disbursements of counsel for the
Administrative Agent, in connection with the syndication and distribution
(including, without limitation, via the internet or through an Electronic
System) of the credit facilities provided for herein, the preparation and
administration of the Loan Documents and any amendments, modifications or
waivers of the provisions of the Loan Documents (whether or not the transactions
contemplated hereby or thereby shall be consummated), (ii) reasonable
out-of-pocket expenses incurred by the Issuing Bank in connection with the
issuance, amendment, renewal or extension

 

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of any Letter of Credit or any demand for payment thereunder and
(iii) out-of-pocket expenses incurred by the Administrative Agent, the Issuing
Bank or any Lender, including the fees, charges and disbursements of any counsel
for the Administrative Agent, the Issuing Bank or any Lender, in connection with
the enforcement, collection or protection of its rights in connection with the
Loan Documents, including its rights under this Section, or in connection with
the Loans made or Letters of Credit issued hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit. Expenses being
reimbursed by the Loan Parties under this Section include, without limiting the
generality of the foregoing, fees, costs and expenses incurred in connection
with:

(A)        appraisals and insurance reviews;

(B)        field examinations and the preparation of Reports based on the fees
charged by a third party retained by the Administrative Agent or the internally
allocated fees for each Person employed by the Administrative Agent with respect
to each field examination;

(C)        background checks regarding senior management and/or key investors,
as deemed necessary or appropriate in the sole discretion of the Administrative
Agent;

(D)        Taxes, fees and other charges for (i) lien searches and (ii) filing
financing statements and continuations, and other actions to perfect, protect,
and continue the Administrative Agent’s Liens;

(E)        sums paid or incurred to take any action required of any Loan Party
under the Loan Documents that such Loan Party fails to pay or take; and

(F)        forwarding loan proceeds, collecting checks and other items of
payment, and establishing and maintaining the accounts and lock boxes, and costs
and expenses of preserving and protecting the Collateral.

All of the foregoing fees, costs and expenses may be charged to the Borrower as
Revolving Loans or to another deposit account, all as described in
Section 2.18(c).

(b)        The Loan Parties, jointly and severally, shall indemnify the
Administrative Agent, the Issuing Bank and each Lender, and each Related Party
of any of the foregoing Persons (each such Person being called an “Indemnitee”)
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, penalties, incremental taxes, liabilities and related expenses,
including the fees, charges and disbursements of any counsel for any Indemnitee,
incurred by or asserted against any Indemnitee arising out of, in connection
with, or as a result of (i) the execution or delivery of the Loan Documents or
any agreement or instrument contemplated thereby, the performance by the parties
hereto of their respective obligations thereunder or the consummation of the
Transactions or any other transactions contemplated hereby, (ii) any Loan or
Letter of Credit or the use of the proceeds therefrom (including any refusal by
the Issuing Bank to honor a demand for payment under a Letter of Credit if the
documents presented in connection with such demand do not strictly comply with
the terms of such Letter of Credit), (iii) any actual or alleged presence or
Release of Hazardous Materials on or from any property owned or operated by a
Loan Party or a Subsidiary, or any Environmental Liability related in any way to
a Loan Party or a Subsidiary, (iv) the failure of a Loan Party to deliver to the
Administrative Agent the required receipts or other required documentary
evidence with respect to a payment made by such Loan Party for Taxes pursuant to
Section 2.17, or (v) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether or not such claim,
litigation, investigation or proceeding is brought by any Loan Party or their
respective equity holders, Affiliates, creditors or any

 

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other third Person and whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, penalties, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee. This Section 9.03(b) shall not apply with respect to Taxes
other than any Taxes that represent losses or damages arising from any non-Tax
claim.

(c)  To the extent that any Loan Party fails to pay any amount required to be
paid by it to the Administrative Agent (or any sub-agent thereof), the Swingline
Lender or the Issuing Bank (or any Related Party of any of the foregoing) under
paragraph (a) or (b) of this Section, each Lender severally agrees to pay to the
Administrative Agent, the Swingline Lender or the Issuing Bank (or any Related
Party of any of the foregoing), as the case may be, such Lender’s Applicable
Percentage (determined as of the time that the applicable unreimbursed expense
or indemnity payment is sought) of such unpaid amount (it being understood that
the Borrower’s failure to pay any such amount shall not relieve the Borrower of
any default in the payment thereof); provided that the unreimbursed expense or
indemnified loss, claim, damage, penalty, liability or related expense, as the
case may be, was incurred by or asserted against the Administrative Agent, the
Swingline Lender or the Issuing Bank in its capacity as such.

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

(e)  All amounts due under this Section shall be payable promptly after written
demand therefor.

SECTION 9.04.  Successors and Assigns.

(a)  The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby (including any Affiliate of the Issuing Bank that issues any
Letter of Credit), except that (i) the Borrower may not assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of each Lender (and any attempted assignment or transfer by the Borrower
without such consent shall be null and void) and (ii) no Lender may assign or
otherwise transfer its rights or obligations hereunder except in accordance with
this Section. Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby (including any Affiliate of
the Issuing Bank that issues any Letter of Credit), Participants (to the extent
provided in paragraph (c) of this Section) and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent,
the Issuing Bank and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.

(b)(i)    Subject to the conditions set forth in paragraph (b)(ii) below, any
Lender may assign to one or more Persons (other than an Ineligible Institution)
all or a portion of its rights and obligations under this Agreement (including
all or a portion of its Commitment, participations in Letters of Credit and the
Loans at the time owing to it) with the prior written consent (such consent not
to be unreasonably withheld) of:

(A)        the Borrower, provided that the Borrower shall be deemed to have
consented to any such assignment unless it shall object thereto by written
notice to the Administrative Agent within five (5) Business Days after having
received notice thereof, and provided further that no consent of the Borrower
shall be required for an assignment to a Lender, an Affiliate of a Lender, an
Approved Fund or, if an Event of Default has occurred and is continuing, any
other assignee;

 

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(B)        the Administrative Agent;

(C)        the Issuing Bank; and

(D)        the Swingline Lender.

Notwithstanding the foregoing, Chase, in its capacity as a Lender hereunder,
shall at all times maintain at least 66.6% of the Aggregate Credit Exposure, as
the same may be increased or decreased from time to time.

(ii)        Assignments shall be subject to the following additional conditions:

(A)        except in the case of an assignment to a Lender or an Affiliate of a
Lender or an Approved Fund or an assignment of the entire remaining amount of
the assigning Lender’s Commitment or Loans of any Class, the amount of the
Commitment or Loans of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Assumption with respect to such
assignment is delivered to the Administrative Agent) shall not be less than
$5,000,000 unless each of the Borrower and the Administrative Agent otherwise
consent, provided that no such consent of the Borrower shall be required if an
Event of Default has occurred and is continuing;

(B)        each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender’s rights and obligations under
this Agreement;

(C)        the parties to each assignment shall execute and deliver to the
Administrative Agent (x) an Assignment and Assumption or (y) to the extent
applicable, an agreement incorporating an Assignment and Assumption by reference
pursuant to a Platform as to which the Administrative Agent and the parties to
the Assignment and Assumption are participants, together with a processing and
recordation fee of $3,500; and

(D)        the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire in which the assignee
designates one or more credit contacts to whom all syndicate-level information
(which may contain material non-public information about the Borrower, the other
Loan Parties and their Related Parties or their respective securities) will be
made available and who may receive such information in accordance with the
assignee’s compliance procedures and applicable laws, including federal and
state securities laws.

 

 

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For the purposes of this Section 9.04(b), the terms “Approved Fund” and
“Ineligible Institution” have the following meanings:

“Approved Fund” means any Person (other than a natural person) that is engaged
in making, purchasing, holding or investing in bank loans and similar extensions
of credit in the ordinary course of its business and that is administered or
managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an
Affiliate of an entity that administers or manages a Lender.

“Ineligible Institution” means a (a) natural person, (b) a Defaulting Lender or
its Parent, (c) holding company, investment vehicle or trust for, or owned and
operated for the primary benefit of, a natural person or relative(s) thereof;
provided that, such holding company, investment vehicle or trust shall not
constitute an Ineligible Institution if it (x) has not been established for the
primary purpose of acquiring any Loans or Commitments, (y) is managed by a
professional advisor, who is not such natural person or a relative thereof,
having significant experience in the business of making or purchasing commercial
loans, and (z) has assets greater than $25,000,000 and a significant part of its
activities consist of making or purchasing commercial loans and similar
extensions of credit in the ordinary course of its business; provided that upon
the occurrence of an Event of Default, any Person (other than a Lender) shall be
an Ineligible Institution if after giving effect to any proposed assignment to
such Person, such Person would hold more than 25% of the then outstanding
Aggregate Credit Exposure or Commitments, as the case may be or (d) a Loan Party
or a Subsidiary or other Affiliate of a Loan Party.

(iii)        Subject to acceptance and recording thereof pursuant to
paragraph (b)(iv) of this Section, from and after the effective date specified
in each Assignment and Assumption, the assignee thereunder shall be a party
hereto and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Assumption, be released from its obligations
under this Agreement (and, in the case of an Assignment and Assumption covering
all of the assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.15, 2.16, 2.17 and 9.03). Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this Section 9.04 shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance with
paragraph (c) of this Section.

(iv)        The Administrative Agent, acting for this purpose as a non-fiduciary
agent of the Borrower, shall maintain at one of its offices a copy of each
Assignment and Assumption delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Commitment of, and principal
amount of the Loans and LC Disbursements owing to, each Lender pursuant to the
terms hereof from time to time (the “Register”). The entries in the Register
shall be conclusive, and the Borrower, the Administrative Agent, the Issuing
Bank and the Lenders shall treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower, the Issuing Bank and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.

(v)        Upon its receipt of (x) a duly completed Assignment and Assumption
executed by an assigning Lender and an assignee or (y) to the extent applicable,
an agreement incorporating an Assignment and Assumption by reference pursuant to
a Platform as to which the Administrative Agent and the parties to the
Assignment and Assumption are participants, the assignee’s completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Administrative Agent shall accept such Assignment and
Assumption and record the information contained therein in the Register;
provided that if either the assigning Lender or the assignee shall have failed
to make any payment required to be made by it pursuant to Section 2.05, 2.06(d)
or (e), 2.07(b), 2.18(d) or 9.03(c), the Administrative Agent shall have

 

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no obligation to accept such Assignment and Assumption and record the
information therein in the Register unless and until such payment shall have
been made in full, together with all accrued interest thereon. No assignment
shall be effective for purposes of this Agreement unless it has been recorded in
the Register as provided in this paragraph.

(c)  Any Lender may, without the consent of the Borrower, the Administrative
Agent, the Swingline Lender or the Issuing Bank, sell participations to one or
more banks or other entities (a “Participant”), other than an Ineligible
Institution, in all or a portion of such Lender’s rights and obligations under
this Agreement (including all or a portion of its Commitment and the Loans owing
to it); provided that (i) such Lender’s obligations under this Agreement shall
remain unchanged; (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations; and (iii) the Borrower,
the Administrative Agent, the Issuing Bank and the other Lenders shall continue
to deal solely and directly with such Lender in connection with such Lender’s
rights and obligations under this Agreement. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement; provided
that such agreement or instrument may provide that such Lender will not, without
the consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 9.02(b) that affects such Participant.
The Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.15, 2.16 and 2.17 (subject to the requirements and limitations
therein, including the requirements under Sections 2.17(f) and (g) (it being
understood that the documentation required under Section 2.17(f) shall be
delivered to the participating Lender and the information and documentation
required under Section 2.17(g) will be delivered to the Borrower and the
Administrative Agent)) to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section;
provided that such Participant (A) agrees to be subject to the provisions of
Sections 2.18 and 2.19 as if it were an assignee under paragraph (b) of this
Section; and (B) shall not be entitled to receive any greater payment under
Sections 2.15 or 2.17 with respect to any participation than its participating
Lender would have been entitled to receive, except to the extent such
entitlement to receive a greater payment results from a Change in Law that
occurs after the Participant acquired the applicable participation.

Each Lender that sells a participation agrees, at the Borrower’s request and
expense, to use reasonable efforts to cooperate with the Borrower to effectuate
the provisions of Section 2.19(b) with respect to any Participant. To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 9.08 as though it were a Lender, provided such Participant agrees to be
subject to Section 2.18(d) as though it were a Lender. Each Lender that sells a
participation shall, acting solely for this purpose as an agent of the Borrower,
maintain a register on which it enters the name and address of each Participant
and the principal amounts (and stated interest) of each Participant’s interest
in the Loans or other obligations under this Agreement or any other Loan
Document (the “Participant Register”); provided that no Lender shall have any
obligation to disclose all or any portion of the Participant Register (including
the identity of any Participant or any information relating to a Participant’s
interest in any Commitments, Loans, Letters of Credit or its other obligations
under any Loan Document) to any Person except to the extent that such disclosure
is necessary to establish that such Commitment, Loan, Letter of Credit or other
obligation is in registered form under Section 5f.103-1(c) of the United States
Treasury Regulations. The entries in the Participant Register shall be
conclusive absent manifest error, and such Lender shall treat each Person whose
name is recorded in the Participant Register as the owner of such participation
for all purposes of this Agreement notwithstanding any notice to the contrary.
For the avoidance of doubt, the Administrative Agent (in its capacity as
Administrative Agent) shall have no responsibility for maintaining a Participant
Register.

(d)        Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including without limitation any pledge

 

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or assignment to secure obligations to a Federal Reserve Bank, and this Section
shall not apply to any such pledge or assignment of a security interest;
provided that no such pledge or assignment of a security interest shall release
a Lender from any of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.

SECTION 9.05.    Survival.    All covenants, agreements, representations and
warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement or any other Loan Document shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of the Loan Documents and the making of any Loans and issuance of any
Letters of Credit, regardless of any investigation made by any such other party
or on its behalf and notwithstanding that the Administrative Agent, the Issuing
Bank or any Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid or any Letter of Credit is outstanding and
so long as the Commitments have not expired or terminated. The provisions of
Sections 2.15, 2.16, 2.17 and 9.03 and Article VIII shall survive and remain in
full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans, the expiration or termination
of the Letters of Credit and the Commitments or the termination of this
Agreement or any other Loan Document or any provision hereof or thereof.

SECTION 9.06.  Counterparts; Integration; Effectiveness; Electronic Execution.

(a) This Agreement may be executed in counterparts (and by different parties
hereto on different counterparts), each of which shall constitute an original,
but all of which when taken together shall constitute a single contract. This
Agreement, the other Loan Documents and any separate letter agreements with
respect to fees payable to the Administrative Agent constitute the entire
contract among the parties relating to the subject matter hereof and supersede
any and all previous agreements and understandings, oral or written, relating to
the subject matter hereof. Except as provided in Section 4.01, this Agreement
shall become effective when it shall have been executed by the Administrative
Agent and when the Administrative Agent shall have received counterparts hereof
which, when taken together, bear the signatures of each of the other parties
hereto, and thereafter shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.

(b)    Delivery of an executed counterpart of a signature page of this Agreement
by telecopy, emailed pdf. or any other electronic means that reproduces an image
of the actual executed signature page shall be effective as delivery of a
manually executed counterpart of this Agreement. The words “execution,”
“signed,” “signature,” “delivery,” and words of like import in or relating to
any document to be signed in connection with this Agreement and the transactions
contemplated hereby or thereby shall be deemed to include Electronic Signatures,
deliveries or the keeping of records in electronic form, each of which shall be
of the same legal effect, validity or enforceability as a manually executed
signature, physical delivery thereof or the use of a paper-based recordkeeping
system, as the case may be, to the extent and as provided for in any applicable
law, including the Federal Electronic Signatures in Global and National Commerce
Act, the New York State Electronic Signatures and Records Act, or any other
similar state laws based on the Uniform Electronic Transactions Act.

SECTION 9.07.  Severability.  Any provision of any Loan Document held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions thereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.

 

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SECTION 9.08.  Right of Setoff.  To the fullest extent permitted by law, if an
Event of Default shall have occurred and be continuing, each Lender and each of
its Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other obligations at any time owing by such Lender or Affiliate to or for the
credit or the account of any Loan Party against any of and all the Secured
Obligations held by such Lender, irrespective of whether or not such Lender
shall have made any demand under the Loan Documents and although such
obligations may be unmatured. The applicable Lender shall notify the Borrower
and the Administrative Agent of such set-off or application, provided that any
failure to give or any delay in giving such notice shall not affect the validity
of any such set-off or application under this Section. The rights of each Lender
under this Section are in addition to other rights and remedies (including other
rights of setoff) which such Lender may have.

SECTION 9.09.  Governing Law; Jurisdiction; Consent to Service of Process.

(a)  The Loan Documents (other than those containing a contrary express choice
of law provision) shall be governed by and construed in accordance with the
internal laws (and not the law of conflicts) of the State of New York, but
giving effect to federal laws applicable to national banks.

(b)  Each Loan Party hereby irrevocably and unconditionally submits, for itself
and its property, to the exclusive jurisdiction of any U.S. federal or New York
state court sitting in New York, New York in any action or proceeding arising
out of or relating to any Loan Documents, or for recognition or enforcement of
any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such state court or, to the extent
permitted by law, in such federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement or any other Loan Document shall
affect any right that the Administrative Agent, the Issuing Bank or any Lender
may otherwise have to bring any action or proceeding relating to this Agreement
or any other Loan Document against any Loan Party or its properties in the
courts of any jurisdiction.

(c)  Each Loan Party hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or any other Loan Document in any
court referred to in paragraph (b) of this Section. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.

(d)  Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 9.01. Nothing in this Agreement or
any other Loan Document will affect the right of any party to this Agreement to
serve process in any other manner permitted by law.

SECTION 9.10.    WAIVER OF JURY TRIAL.    EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE OR OTHER AGENT
(INCLUDING ANY ATTORNEY) OF ANY OTHER

 

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PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.

SECTION 9.11.  Headings.  Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

SECTION 9.12.  Confidentiality.  Each of the Administrative Agent, the Issuing
Bank and the Lenders agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (a) to its and its
Affiliates’ directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any Governmental Authority (including any self-regulatory
authority, such as the National Association of Insurance Commissioners), (c) to
the extent required by any Requirement of Law or by any subpoena or similar
legal process, (d) to any other party to this Agreement, (e) in connection with
the exercise of any remedies hereunder or under any other Loan Document or any
suit, action or proceeding relating to this Agreement or any other Loan Document
or the enforcement of rights hereunder or thereunder, (f) subject to an
agreement containing provisions substantially the same as those of this Section,
to (x) any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement or (y) any
actual or prospective counterparty (or its advisors) to any swap or derivative
transaction relating to the Loan Parties and their obligations, (g) with the
consent of the Borrower or (h) to the extent such Information (x) becomes
publicly available other than as a result of a breach of this Section or
(y) becomes available to the Administrative Agent, the Issuing Bank or any
Lender on a non-confidential basis from a source other than the Borrower. For
the purposes of this Section, “Information” means all information received from
the Borrower relating to the Borrower or its business, other than any such
information that is available to the Administrative Agent, the Issuing Bank or
any Lender on a non-confidential basis prior to disclosure by the Borrower and
other than information pertaining to this Agreement routinely provided by
arrangers to data service providers, including league table providers, that
serve the lending industry; provided that, in the case of information received
from the Borrower after the date hereof, such information is clearly identified
at the time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.

EACH LENDER ACKNOWLEDGES THAT INFORMATION (AS DEFINED IN THIS SECTION 9.12)
FURNISHED TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC
INFORMATION CONCERNING THE BORROWER, THE OTHER LOAN PARTIES AND THEIR RELATED
PARTIES OR THEIR RESPECTIVE SECURITIES, AND CONFIRMS THAT IT HAS DEVELOPED
COMPLIANCE PROCEDURES REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION AND
THAT IT WILL HANDLE SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH
THOSE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES
LAWS.

ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS, FURNISHED BY THE
BORROWER OR THE ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE COURSE OF
ADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE-

 

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LEVEL INFORMATION, WHICH MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE
BORROWER, THE LOAN PARTIES AND THEIR RELATED PARTIES OR THEIR RESPECTIVE
SECURITIES. ACCORDINGLY, EACH LENDER REPRESENTS TO THE BORROWER AND THE
ADMINISTRATIVE AGENT THAT IT HAS IDENTIFIED IN ITS ADMINISTRATIVE QUESTIONNAIRE
A CREDIT CONTACT WHO MAY RECEIVE INFORMATION THAT MAY CONTAIN MATERIAL
NON-PUBLIC INFORMATION IN ACCORDANCE WITH ITS COMPLIANCE PROCEDURES AND
APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.

SECTION 9.13. Several Obligations; Nonreliance; Violation of Law.    The
respective obligations of the Lenders hereunder are several and not joint and
the failure of any Lender to make any Loan or perform any of its obligations
hereunder shall not relieve any other Lender from any of its obligations
hereunder. Each Lender hereby represents that it is not relying on or looking to
any margin stock (as defined in Regulation U of the Board) for the repayment of
the Borrowings provided for herein. Anything contained in this Agreement to the
contrary notwithstanding, neither the Issuing Bank nor any Lender shall be
obligated to extend credit to the Borrower in violation of any Requirement of
Law.

SECTION 9.14.  USA PATRIOT Act.  Each Lender that is subject to the requirements
of the USA PATRIOT Act hereby notifies each Loan Party that pursuant to the
requirements of the USA PATRIOT Act, it is required to obtain, verify and record
information that identifies such Loan Party, which information includes the name
and address of such Loan Party and other information that will allow such Lender
to identify such Loan Party in accordance with the USA PATRIOT Act.

SECTION 9.15.  Disclosure. Each Loan Party, each Lender and the Issuing Bank
hereby acknowledges and agrees that the Administrative Agent and/or its
Affiliates from time to time may hold investments in, make other loans to or
have other relationships with, any of the Loan Parties and their respective
Affiliates.

SECTION 9.16.  Appointment for Perfection.  Each Lender hereby appoints each
other Lender as its agent for the purpose of perfecting Liens, for the benefit
of the Administrative Agent and the Secured Parties, in assets which, in
accordance with Article 9 of the UCC or any other applicable law can be
perfected only by possession or control. Should any Lender (other than the
Administrative Agent) obtain possession or control of any such Collateral, such
Lender shall notify the Administrative Agent thereof, and, promptly upon the
Administrative Agent’s request therefor shall deliver such Collateral to the
Administrative Agent or otherwise deal with such Collateral in accordance with
the Administrative Agent’s instructions.

SECTION 9.17.    Interest Rate Limitation.    Notwithstanding anything herein to
the contrary, if at any time the interest rate applicable to any Loan, together
with all fees, charges and other amounts which are treated as interest on such
Loan under applicable law (collectively the “Charges”), shall exceed the maximum
lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken,
received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.

 

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SECTION 9.18.    Marketing Consent.    The Borrower hereby authorizes Chase and
its affiliates (including without limitation JPMorgan Securities LLC)
(collectively, the “Chase Parties”), at their respective sole expense, but with
the prior approval of the Borrower, which shall not be unreasonably withheld or
delayed, to publish such tombstones and give such other publicity to this
Agreement as each may from time to time determine in its sole discretion. The
foregoing authorization shall remain in effect unless the Borrower notifies
Chase in writing that such authorization is revoked.

ARTICLE X

Loan Guaranty

SECTION 10.01.  Guaranty.  Each Loan Guarantor (other than those that have
delivered a separate Guaranty) hereby agrees that it is jointly and severally
liable for, and, as a primary obligor and not merely as surety, absolutely,
unconditionally and irrevocably guarantees to the Secured Parties, the prompt
payment when due, whether at stated maturity, upon acceleration or otherwise,
and at all times thereafter, of the Secured Obligations and all costs and
expenses including, without limitation, all court costs and reasonable
attorneys’ and paralegals’ fees (including allocated costs of in-house counsel
and paralegals) and expenses paid or incurred by the Administrative Agent, the
Issuing Bank and the Lenders in endeavoring to collect all or any part of the
Secured Obligations from, or in prosecuting any action against, the Borrower,
any Loan Guarantor or any other guarantor of all or any part of the Secured
Obligations (such costs and expenses, together with the Secured Obligations,
collectively the “Guaranteed Obligations”); provided, however, that the
definition of “Guaranteed Obligations” shall not create any guarantee by any
Loan Guarantor of (or grant of security interest by any Loan Guarantor to
support, as applicable) any Excluded Swap Obligations of such Loan Guarantor for
purposes of determining any obligations of any Loan Guarantor). Each Loan
Guarantor further agrees that the Guaranteed Obligations may be extended or
renewed in whole or in part without notice to or further assent from it, and
that it remains bound upon its guarantee notwithstanding any such extension or
renewal. All terms of this Loan Guaranty apply to and may be enforced by or on
behalf of any domestic or foreign branch or Affiliate of any Lender that
extended any portion of the Guaranteed Obligations.

SECTION 10.02.  Guaranty of Payment.  This Loan Guaranty is a guaranty of
payment and not of collection. Each Loan Guarantor waives any right to require
the Administrative Agent, the Issuing Bank or any Lender to sue the Borrower,
any Loan Guarantor, any other guarantor of, or any other Person obligated for
all or any part of the Guaranteed Obligations (each, an “Obligated Party”), or
otherwise to enforce its payment against any collateral securing all or any part
of the Guaranteed Obligations.

SECTION 10.03.  No Discharge or Diminishment of Loan Guaranty.

(a) Except as otherwise provided for herein, the obligations of each Loan
Guarantor hereunder are unconditional and absolute and not subject to any
reduction, limitation, impairment or termination for any reason (other than the
indefeasible payment in full in cash of the Guaranteed Obligations), including:
(i) any claim of waiver, release, extension, renewal, settlement, surrender,
alteration, or compromise of any of the Guaranteed Obligations, by operation of
law or otherwise; (ii) any change in the corporate existence, structure or
ownership of the Borrower or any other Obligated Party liable for any of the
Guaranteed Obligations; (iii) any insolvency, bankruptcy, reorganization or
other similar proceeding affecting any Obligated Party, or their assets or any
resulting release or discharge of any obligation of any Obligated Party; or
(iv) the existence of any claim, setoff or other rights which any Loan Guarantor
may have at any time against any Obligated Party, the Administrative Agent, the
Issuing Bank, any Lender, or any other Person, whether in connection herewith or
in any unrelated transactions.

 

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(b)        The obligations of each Loan Guarantor hereunder are not subject to
any defense or setoff, counterclaim, recoupment, or termination whatsoever by
reason of the invalidity, illegality, or unenforceability of any of the
Guaranteed Obligations or otherwise, or any provision of applicable law or
regulation purporting to prohibit payment by any Obligated Party, of the
Guaranteed Obligations or any part thereof.

(c)        Further, the obligations of any Loan Guarantor hereunder are not
discharged or impaired or otherwise affected by: (i) the failure of the
Administrative Agent, the Issuing Bank or any Lender to assert any claim or
demand or to enforce any remedy with respect to all or any part of the
Guaranteed Obligations; (ii) any waiver or modification of or supplement to any
provision of any agreement relating to the Guaranteed Obligations; (iii) any
release, non-perfection, or invalidity of any indirect or direct security for
the obligations of the Borrower for all or any part of the Guaranteed
Obligations or any obligations of any other Obligated Party liable for any of
the Guaranteed Obligations; (iv) any action or failure to act by the
Administrative Agent, the Issuing Bank or any Lender with respect to any
collateral securing any part of the Guaranteed Obligations; or (v) any default,
failure or delay, willful or otherwise, in the payment or performance of any of
the Guaranteed Obligations, or any other circumstance, act, omission or delay
that might in any manner or to any extent vary the risk of such Loan Guarantor
or that would otherwise operate as a discharge of any Loan Guarantor as a matter
of law or equity (other than the indefeasible payment in full in cash of the
Guaranteed Obligations).

SECTION 10.04.  Defenses Waived.  To the fullest extent permitted by applicable
law, each Loan Guarantor hereby waives any defense based on or arising out of
any defense of the Borrower or any Loan Guarantor or the unenforceability of all
or any part of the Guaranteed Obligations from any cause, or the cessation from
any cause of the liability of the Borrower, any Loan Guarantor or any other
Obligated Party, other than the indefeasible payment in full in cash of the
Guaranteed Obligations. Without limiting the generality of the foregoing, each
Loan Guarantor irrevocably waives acceptance hereof, presentment, demand,
protest and, to the fullest extent permitted by law, any notice not provided for
herein, as well as any requirement that at any time any action be taken by any
Person against any Obligated Party, or any other Person. Each Loan Guarantor
confirms that it is not a surety under any state law and shall not raise any
such law as a defense to its obligations hereunder. The Administrative Agent
may, at its election, foreclose on any Collateral held by it by one or more
judicial or nonjudicial sales, accept an assignment of any such Collateral in
lieu of foreclosure or otherwise act or fail to act with respect to any
collateral securing all or a part of the Guaranteed Obligations, compromise or
adjust any part of the Guaranteed Obligations, make any other accommodation with
any Obligated Party or exercise any other right or remedy available to it
against any Obligated Party, without affecting or impairing in any way the
liability of such Loan Guarantor under this Loan Guaranty, except to the extent
the Guaranteed Obligations have been fully and indefeasibly paid in cash. To the
fullest extent permitted by applicable law, each Loan Guarantor waives any
defense arising out of any such election even though that election may operate,
pursuant to applicable law, to impair or extinguish any right of reimbursement
or subrogation or other right or remedy of any Loan Guarantor against any
Obligated Party or any security.

SECTION 10.05.  Rights of Subrogation.  No Loan Guarantor will assert any right,
claim or cause of action, including, without limitation, a claim of subrogation,
contribution or indemnification that it has against any Obligated Party, or any
collateral, until the indefeasible payment in full in cash of the Obligations.

SECTION 10.06.  Reinstatement; Stay of Acceleration.  If at any time any payment
of any portion of the Guaranteed Obligations (including a payment effected
through exercise of a right of setoff) is rescinded, or must otherwise be
restored or returned upon the insolvency, bankruptcy or reorganization of the
Borrower or otherwise (including pursuant to any settlement entered into by a
Secured Party in its discretion), each Loan Guarantor’s obligations under this
Loan Guaranty with respect to that payment shall

 

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be reinstated at such time as though the payment had not been made and whether
or not the Administrative Agent, the Issuing Bank and the Lenders are in
possession of this Loan Guaranty. If acceleration of the time for payment of any
of the Guaranteed Obligations is stayed upon the insolvency, bankruptcy or
reorganization of the Borrower, all such amounts otherwise subject to
acceleration under the terms of any agreement relating to the Guaranteed
Obligations shall nonetheless be payable by the Loan Guarantors forthwith on
demand by the Administrative Agent.

SECTION 10.07.    Information.    Each Loan Guarantor assumes all responsibility
for being and keeping itself informed of the Borrower’s financial condition and
assets, and of all other circumstances bearing upon the risk of nonpayment of
the Guaranteed Obligations and the nature, scope and extent of the risks that
each Loan Guarantor assumes and incurs under this Loan Guaranty, and agrees that
none of the Administrative Agent, the Issuing Bank or any Lender shall have any
duty to advise any Loan Guarantor of information known to it regarding those
circumstances or risks.

SECTION 10.08.  Termination.  Each of the Lenders and the Issuing Bank may
continue to make loans or extend credit to the Borrower based on this Loan
Guaranty until five (5) days after it receives written notice of termination
from any Loan Guarantor. Notwithstanding receipt of any such notice, each Loan
Guarantor will continue to be liable to the Lenders for any Guaranteed
Obligations created, assumed or committed to prior to the fifth day after
receipt of the notice, and all subsequent renewals, extensions, modifications
and amendments with respect to, or substitutions for, all or any part of such
Guaranteed Obligations. Nothing in this Section 10.08 shall be deemed to
constitute a waiver of, or eliminate, limit, reduce or otherwise impair any
rights or remedies the Administrative Agent or any Lender may have in respect
of, any Default or Event of Default that shall exist under Article VII hereof as
a result of any such notice of termination.

SECTION 10.09.  Taxes.  Each payment of the Guaranteed Obligations will be made
by each Loan Guarantor without withholding for any Taxes, unless such
withholding is required by law. If any Loan Guarantor determines, in its sole
discretion exercised in good faith, that it is so required to withhold Taxes,
then such Loan Guarantor may so withhold and shall timely pay the full amount of
withheld Taxes to the relevant Governmental Authority in accordance with
applicable law. If such Taxes are Indemnified Taxes, then the amount payable by
such Loan Guarantor shall be increased as necessary so that, net of such
withholding (including such withholding applicable to additional amounts payable
under this Section), the Administrative Agent, Lender or Issuing Bank (as the
case may be) receives the amount it would have received had no such withholding
been made.

SECTION 10.10.  Maximum Liability.  Notwithstanding any other provision of this
Loan Guaranty, the amount guaranteed by each Loan Guarantor hereunder shall be
limited to the extent, if any, required so that its obligations hereunder shall
not be subject to avoidance under Section 548 of the Bankruptcy Code or under
any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent
Conveyance Act or similar statute or common law. In determining the limitations,
if any, on the amount of any Loan Guarantor’s obligations hereunder pursuant to
the preceding sentence, it is the intention of the parties hereto that any
rights of subrogation, indemnification or contribution which such Loan Guarantor
may have under this Loan Guaranty, any other agreement or applicable law shall
be taken into account.

SECTION 10.11.  Contribution.

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

 

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“Allocable Amount” (as defined below) (as determined immediately prior to such
Guarantor Payment) bore to the aggregate Allocable Amounts of each of the Loan
Guarantors as determined immediately prior to the making of such Guarantor
Payment, then, following payment in full of the Guarantor Payment and the
Guaranteed Obligations (other than Unliquidated Obligations that have not yet
arisen), and all Commitments and Letters of Credit have terminated or expired
or, in the case of all Letters of Credit, are fully collateralized on terms
reasonably acceptable to the Administrative Agent and the Issuing Bank, and this
Agreement, the Swap Agreement Obligations and the Banking Services Obligations
have terminated, such Loan Guarantor shall be entitled to receive contribution
and indemnification payments from, and be reimbursed by, each other Loan
Guarantor for the amount of such excess, pro rata based upon their respective
Allocable Amounts in effect immediately prior to such Guarantor Payment.

(b)        As of any date of determination, the “Allocable Amount” of any Loan
Guarantor shall be equal to the excess of the fair saleable value of the
property of such Loan Guarantor over the total liabilities of such Loan
Guarantor (including the maximum amount reasonably expected to become due in
respect of contingent liabilities, calculated, without duplication, assuming
each other Loan Guarantor that is also liable for such contingent liability pays
its ratable share thereof), giving effect to all payments made by other Loan
Guarantors as of such date in a manner to maximize the amount of such
contributions.

(c)        This Section 10.11 is intended only to define the relative rights of
the Loan Guarantors, and nothing set forth in this Section 10.11 is intended to
or shall impair the obligations of the Loan Guarantors, jointly and severally,
to pay any amounts as and when the same shall become due and payable in
accordance with the terms of this Loan Guaranty.

(d)        The parties hereto acknowledge that the rights of contribution and
indemnification hereunder shall constitute assets of the Loan Guarantor or Loan
Guarantors to which such contribution and indemnification is owing.

(e)        The rights of the indemnifying Loan Guarantors against other Loan
Guarantors under this Section 10.11 shall be exercisable upon the full and
payment of the Guaranteed Obligations (other than Unliquidated Obligations that
have not yet arisen) and the termination or expiry (or, in the case of all
Letters of Credit, full cash collateralization), on terms reasonably acceptable
to the Administrative Agent and the Issuing Bank, of the Commitments and all
Letters of Credit issued hereunder and the termination of this Agreement, the
Swap Agreement Obligations and the Banking Services Obligations; provided
however, that if a reinstatement shall occur pursuant to Section 10.06 hereof,
the Loan Guarantors shall cease exercising any and all remedies unless and until
the Guaranteed Obligations shall again be paid in full.

SECTION 10.12.    Liability Cumulative.    The liability of each Loan Party as a
Loan Guarantor under this Article X is in addition to and shall be cumulative
with all liabilities of each Loan Party to the Administrative Agent, the Issuing
Bank and the Lenders under this Agreement and the other Loan Documents to which
such Loan Party is a party or in respect of any obligations or liabilities of
the other Loan Parties, without any limitation as to amount, unless the
instrument or agreement evidencing or creating such other liability specifically
provides to the contrary.

SECTION 10.13.    Keepwell.        Each Qualified ECP Guarantor hereby jointly
and severally absolutely, unconditionally and irrevocably undertakes to provide
such funds or other support as may be needed from time to time by each other
Guarantor to honor all of its obligations under this Guarantee in respect of a
Swap Obligation (provided, however, that each Qualified ECP Guarantor shall only
be liable under this Section 10.13 for the maximum amount of such liability that
can be hereby incurred without rendering its obligations under this
Section 10.13 or otherwise under this Loan Guaranty voidable under applicable
law relating to fraudulent conveyance or fraudulent transfer, and not for any
greater amount). Except as otherwise provided herein, the obligations of each
Qualified ECP Guarantor under this Section 10.13

 

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shall remain in full force and effect until the termination of all Swap
Obligations. Each Qualified ECP Guarantor intends that this Section 10.13
constitute, and this Section 10.13 shall be deemed to constitute, a “keepwell,
support, or other agreement” for the benefit of each other Loan Party for all
purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

 

[Signature Page Follows]

 

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

 

GRAHAM CORPORATION, a Delaware corporation By: /s/ Jeffrey Glajch Name: Jeffrey
Glajch Title: Chief Financial Officer ENERGY STEEL & SUPPLY CO., a Michigan
corporation By: /s/ Jeffrey Glajch Name: Jeffrey Glajch Title: Chief Financial
Officer JPMORGAN CHASE BANK, N.A., individually, and as Administrative Agent,
Swingline Lender and Issuing Bank By: /s/ Philip M. Hendrix Name: Philip M.
Hendrix Title: Vice President and Authorized Officer

 

95

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COMMITMENT SCHEDULE

 

Lender   

Revolving

Commitment

  

Swingline

Commitment

   Commitment

JPMorgan Chase Bank, N.A.

  

$25,000,000.00

 

  

$5,000,000

 

  

$25,000,000.00

 

Total

  

$25,000,000.00

 

  

$5,000,000

 

  

$25,000,000.00

 

 

Commitment Schedule

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

SCHEDULE 3.05

Properties, etc.

SCHEDULE 3.06

Disclosed Matters

SCHEDULE 3.14

Insurance

SCHEDULE 3.15

Capitalization and Subsidiaries

SCHEDULE 5.13

Existing Standby Letters of Credit

SCHEDULE 6.01

Existing Indebtedness

SCHEDULE 6.02

Existing Liens

SCHEDULE 6.04

Existing Investments

SCHEDULE 6.10

Existing Restrictions

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

SCHEDULE 3.05

Properties, etc.

Owned and Leased Real Property -- See following.

Intellectual Property Rights --

PATENTS

 

Name of Grantor   Patent Description   Patent Number   Issue Date Graham
Corporation   Instantaneous Water Heater   7140378   11-28-2006 Graham
Corporation   Apparatus For Removing Ammonia And Carbon Dioxide Gases From A
Steam   5772709   06-30-1998

TRADEMARKS

 

Name of Grantor     Trademark  

     Registration      

Date

   Registration Number           Country     Graham Corporation     GRAHAM  
11/18/1997   2,113,725   US Graham Corporation     LOGO
[g107138ex10_1scpg2a.jpg]   12/23/1997   2,123,101   US Graham Corporation    
LOGO [g107138ex10_1scpg2b.jpg]   11/20/2007   3,339,668   US Graham
Corporation     GRAHAM PRECISION PUMPS   7/7/1998   2,171,065   US Graham
Corporation     GRAHAM VACUUM AND HEAT TRANSFER   7/7/1998   2,171,070   US
Graham Corporation     HELIFLOW   4/8/2003   2,704,853   US Graham Corporation  
  MICROMAX   6/17/2008   3,450,764   US Graham Corporation     MICROMIX  
11/18/1958   669,905   US Graham Corporation     SEALCOOL   8/8/2000   2,375,893
  US Graham Corporation     ULTRAHEAT   10/23/2007   3,319,469   US Graham
Corporation     VACADEMICS   9/24/2002   2,626,331   US Graham Corporation    
VACWORKS   11/30/1999   2,296,884   US Graham Corporation     G Logo  
10/06/2006   004596011   CTM Graham Corporation     GRAHAM   000486845  
01/16/200   CTM Graham Corporation     GRAHAM   004586467   11/27/2006   CTM
Graham Corporation     GRAHAM & DESIGN   000486852   3/3/1997   CTM Graham
Corporation     GRAHAM ENGINEERING ANSWERS & DESIGN (Class 07)   5288202  
4/14/2006   CN Graham Corporation     GRAHAM ENGINEERING ANSWERS & DESIGN
(Class 37)   5288203   4/14/2006   CN

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

Graham Corporation     GRAHAM ENGINEERING ANSWERS & DESIGN (Class 40)   5288204
  4/14/2006   CN Graham Corporation     GRAHAM ENGINEERING ANSWERS & DESIGN
(Class 42)   5288205   4/14/2006   CN Graham Corporation     GRAHAM ENGINEERING
& DESIGN   005290275   8/23/2007   CTM Graham Corporation     GRAHAM ENGINEERING
ANSWERS & DESIGN   1502414   11/08/2006   IN Graham Corporation    
GRAHAM ENGINEERING ANSWERS & DESIGN (Class 07)   992949   07/23/2007   MX Graham
Corporation     GRAHAM ENGINEERING ANSWERS & DESIGN (Class 37)   971079  
01/30/2007   MX Graham Corporation     GRAHAM ENGINEERING ANSWERS & DESIGN
(Class 40)   971080   01/30/2007   MX Graham Corporation     GRAHAM ENGINEERING
ANSWERS & DESIGN (Class 42)   971081   01/30/2007   MX Graham Corporation    
GRAHAM ENGINEERING ANSWERS & DESIGN (Class 11)   848887   04/17/2007   MX Graham
Corporation     GRAHAM VACUUM AND HEAT TRANSFER & DESIGN (Class 07)   5288206  
04/14/2006   CN Graham Corporation     GRAHAM VACUUM AND HEAT TRANSFER & DESIGN
(Class 37)   5288207   04/14/2006   CN Graham Corporation     GRAHAM VACUUM AND
HEAT TRANSFER & DESIGN (Class 40)   5288208   04/14/2006   CN Graham
Corporation     GRAHAM VACUUM AND HEAT TRANSFER & DESIGN (Class 42)   5288209  
04/14/2006   CN Graham Corporation     GVHT (Class 07)   5288210   04/14/2006  
CN Graham Corporation     GVHT (Class 37)   5288211   04/14/2006   CN Graham
Corporation     GVHT (Class 40)   5288186   04/14/2006   CN Graham Corporation  
  GVHT (Class 42)   5288187   04/14/2006   CN Graham Corporation     GVHT (Class
11)   5882574   02/01/2007   CN Graham Corporation     HELIFLOW   736590  
12/01/2003   BX Graham Corporation     HELIFLOW   TMA169350   05/22/1970   CA
Graham Corporation     HELIFLOW   977506   07/27/1987   DE Graham Corporation  
  HELIFLOW   226805   01/08/2003   IE Graham Corporation     HELIFLOW   2320120
  01/08/2003   UK Graham Corporation     MICROMAX   TMA631,364   01/27/2005   CA
Graham Corporation     MICROMIX   TMA169351   05/22/1970   CA

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

COPYRIGHTS

 

Name of Grantor    Copyright    Registration Date    Registration Number Energy
Steel & Supply Co.    The Duke of Nuke    1-9-1989    VA0000363219            
    

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

SCHEDULE 3.05

Properties, etc.

 

OWNED – Batavia, NY 14020

16-24 Florence Avenue

   Manufacturing and Office 6 Cedar Street    Manufacturing 28 Cedar Street   
Land 4-12 Howard Street    Manufacturing 113 Harvester Avenue    Land 16 Howard
Street    Land 111 Harvester Avenue    Land 2 Howard Street    Land 3 Howard
Street    Land 119 Harvester Avenue    Land 121 Harvester Avenue    Land 114-A
Harvester Avenue    Land 114-B Harvester Avenue    Land 114-C Harvester Avenue
   Land 19 Florence Avenue    Land 9-31 Howard Street    Manufacturing 33-37
Howard Street    Manufacturing 60 Evans Street    Land 33 Harvester Avenue   
Land 6 Florence Avenue    Land 623 E. Main Street    Land

 

 

LEASED   

3123 John Conley Drive

Lapeer, Ml 48446

   Manufacturing and Office

333 N. Sam Houston Parkway E, Suite 850

Houston, TX 77060

   Office

Suite 601, 23-B Harmony Times Square

Huachi Street, Suzhou Industrial Park

Suzhou 215028, PR China

   Office

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

SCHEDULE 3.06

Disclosed Matters

None.

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

SCHEDULE 3.14

Insurance

See following.

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

           

 

For:

 

 

Graham Corporation

   

 

M & T Insurance Agency, Inc.

      Attn:  Jeffrey Glajch     285 Delaware Avenue, Ste 4000       20 Florence
Avenue     Buffalo, NY 14202      

Batavia, NY 14020

 

   

716-853-7960

 

           

 

  Commercial Package       Great Northern     Insurance Co.    35879559       
   04/01/15        04/01/16      Property                       

Premise 1, Buildings 1-13

20 Florence Ave.

Batavia, NY 14020

                      

Premise 2, Building 1

333 N. Sam Houston Parkway E.

Suite 850

Houston, TX 77060

                      

Premise 3, Building 1

3123 John Conley Dr.

Lapeer, Ml 48446

                      

Premise 4, Building 1

23-B Harmony Times Square

Suite 601, Huachi Street

Suzhou Industrial Park

Suzhou, 215028

Peoples Republic - China

                       Blanket Building & Contents    57,503,622               
     (Premises 1 & 4 only)                        Coinsurance (Agreed Value)   
100%                    

Replacement Cost

Special Form Cause of Loss

                       Deductible    25,000                     Blanket Business
Income &    19,571,429                    

Extra Expense

 (Premises 1 & 3 only)

                       Coinsurance (Agreed Value)    100%                    

Special Form Cause of Loss

Deductible

   24 hours                  

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

           

 

For:

 

 

Graham Corporation

   

 

M & T Insurance Agency, Inc.

      Attn:  Jeffrey Glajch     285 Delaware Avenue, Ste 4000       20 Florence
Avenue     Buffalo, NY 14202      

Batavia, NY 14020

 

   

716-853-7960

 

           

 

 

  Premise 2, Building 1                        Business Personal Property   
26,100                     Coinsurance    100%                     Replacement
Cost                        Special Form Cause of Loss                       
Deductible    25,000                     Business Income/Extra Expense   
1,428,571                     Coinsurance    100%                     Special
Form Cause of Loss                        Deductible    24 hours               
     Premise 4, Building 1                        Business Personal Property   
20,000                     Deductible    2,500                     Flood:      
                

 

Premise 1 & 3

                       Premises Annual Aggregate    25,000,000                  
  Per Occurrence Limit    25,000,000                     Property Damage
Deductible    50,000                     Waiting Period    48 hours            
        Wind/Hail/Hurricane:                       

 

Premise 2

                       Property Damage Deductible    2%                    
Property Damage Minimum                        Dollar Deductible    25,000      
              Waiting Period    72 hours                     Earthquake:      
                

 

Premise 1, 2, & 3

                       Premises Annual Aggregate    25,000,000                  
  Per Occurrence Limit    25,000,000                     Property Deductible   
50,000                     Waiting Period    48 hours                    
Equipment Breakdown    Included                     Business Income/Extra
Expense    3x ADV                     Property Damage Deductible    25,000      
           

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

           

 

For:

 

 

Graham Corporation

   

 

M & T Insurance Agency, Inc.

      Attn:  Jeffrey Glajch     285 Delaware Avenue, Ste 4000       20 Florence
Avenue     Buffalo, NY 14202      

Batavia, NY 14020

 

   

716-853-7960

 

           

 

 

  International Coverage                        Liability Global Extension      
                 Endorsement                        Automobile:               
        Hired & Non-Owned Autos:                        Bodily Injury & Property
Damage    1,000,000                     Auto Medical Payments    10,000         
           Workers’ Compensation:                        International
Voluntary –    State of Hire                     International Executive      
                 Employees                        Employers Liability:         
              Bodily Injury by Accident                        Each Accident   
1,000,000                     Bodily Injury by Disease                       
Aggregate    1,000,000                     Bodily Injury by Disease            
           Each Employee    1,000,000                     Repatriation Expenses
                       Each Employee    250,000                     Aggregate   
500,000                     Blanket Accident:                        Refer to
policy for coverages and limits                        Refer to policy for
additional coverages, extensions and exclusions   General Liability      
Great Northern     Insurance Co.    35879559           04/01/15        04/01/16
     Occurrence                        General Aggregate    2,000,000         
           Products/Completed Oper. Aggr.    2,000,000                    
Personal & Advertising Injury    1,000,000                     Each Occurrence
   1,000,000                     Damage to Rented Premises    1,000,000         
           Medical Expense (Any One Person)    10,000                  

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

           

 

For:

 

 

Graham Corporation

   

 

M & T Insurance Agency, Inc.

      Attn:  Jeffrey Glajch     285 Delaware Avenue, Ste 4000       20 Florence
Avenue     Buffalo, NY 14202      

Batavia, NY 14020

 

    716-853-7960            

 

 

 

Employee Benefits Errors or             Omissions (Claims Made)             Each
Claim Limit   1,000,000           Aggregate Limit   1,000,000          
Deductible – each claim   1,000           Retroactive Date: 04/01/10            
Refer to policy for additional coverages, extensions and exclusions     

 

Business Auto

    

 

Sentinel Ins Co Ltd

 

 

  01UENT09826

 

 

    04/01/15  

  

 

04/01/16

 

Liability – including Hired and Non-Owned Autos

            Combined Single Limit   1,000,000           Personal Injury
Protection –   50,000           Per Person Limit             Additional Personal
Injury   100,000           Protection             Medical Payments Each Person  
10,000           Supplementary Uninsured/   1,000,000           Underinsured
Motorists –             Combined Single Limit             Primary Hired Car
Physical   50,000 or ACV           Damage               Comprehensive Deductible
  500             Collision Deductible   500          

 

Broad Form Auto endorsement

           

Refer to policy for all coverage extensions and exclusions

* See Attached Vehicle Schedule

 

   Excess and Umbrella     

Federal

Insurance

Company

    79872747   04/01/15       04/01/16 Excess Coverage Other   10,000,000       
   Aggregate Limit (as applicable)             Umbrella Aggregate Limit  
10,000,000           Products Completed Operations   10,000,000          
Aggregate Limit             Advertising Injury and Personal   10,000,000       
   Injury Aggregate Limit             Each Occurrence Limit   10,000,000       
  

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

           

 

For:

 

 

Graham Corporation

   

 

M & T Insurance Agency, Inc.

      Attn:  Jeffrey Glajch     285 Delaware Avenue, Ste 4000       20 Florence
Avenue     Buffalo, NY 14202      

Batavia, NY 14020

 

    716-853-7960            

 

 

Refer to policy for exclusions

 

           Excess Liability     St Paul Fire & Marine Ins. Co.  
ZUP-10N83869-15-NF       04/01/15      04/01/16 Each Loss Limit   10,000,000    
     Aggregate Limit   10,000,000          Refer to policy for all exclusions  
        

 

Ocean Cargo

   

 

AGCS Marine Insurance

 

 

OC95186000

 

 

    04/01/15  

  

 

04/01/16

Any One Vessel or connecting conveyance or in any one place at any one time  
500,000          Any One Aircraft or connecting conveyance   500,000         
Any one metal barge or any one tow (other than as a connecting conveyance)  
250,000         

 

Any one package shipped by government or private mail or parcel post or parcel
delivery service

  5,000          Deductible   1,000          Refer to policy for all exclusions
          

 

Workers Compensation

   

 

Great American Alliance Ins Co.

 

 

WC170896504

 

 

    05/01/15  

  

 

05/01/16

Named States: NY, TX, Ml Employer’s Liability

Each Accident

  1,000,000          Disease Policy Limit   1,000,000          Disease Each
Employee   1,000,000         

 

Deductible Limits:

Per Accident Limit (specific)

  250,000          Allocated Loss Adjustment   Included         

Expense

Minimum Aggregate Limit

  752,000         

 

* See Attached Rating Information

          

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

           

 

For:

 

 

Graham Corporation

   

 

M & T Insurance Agency, Inc.

      Attn:  Jeffrey Glajch     285 Delaware Avenue, Ste 4000       20 Florence
Avenue     Buffalo, NY 14202      

Batavia, NY 14020

 

   

716-853-7960

 

           

 

 

 

Public Liability – Graham     Chubb Indemnity     93518932       10/03/14     
10/03/15 Vacuum & Heat Transfer     Insurance Co.        Technology           

 

Limit of Indemnity

 

 

1,000,000

        

 

Jurisdiction: within the territory of P.R. China only

 

    

Errors & Omissions

Liability

    Hudson Ins. Co.     ELP212429       04/21/15    04/21/16

 

Limit - each glitch

 

 

1,000,000

        

 

Limit – aggregate

 

 

1,000,000

        

 

Retention – each glitch

 

Retroactive date: 04/21/2014

 

 

50,000

        

 

Contract specific

endorsement: Contract 0009- CON-GRM-36-62-0001 dated 8/2/2013 with Abeinsa
Abener Teyma General Partnership.

 

Purchase Order NG-OEC-019 dated 3/16/15 with Orascom E&C USA, Inc.

          

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

           

 

For:

 

 

Graham Corporation

   

 

M & T Insurance Agency, Inc.

      Attn:  Jeffrey Glajch     285 Delaware Avenue, Ste 4000       20 Florence
Avenue     Buffalo, NY 14202      

Batavia, NY 14020

 

   

716-853-7960

 

   

Business Automobile - Vehicle Schedule    Policy No. 01UENTO9826

 

           

 

 

001   2002   Mitsubishi   Forklift   AF33A50013   Batavia, NY    7996   X      
002   1973   Trojan   Forklift   201039   Batavia, NY    7996   X       003  
1979   Caterpillar   Forklift   87M02297   Batavia, NY    7996   X       004  
2008   Chev   2500   1GCHC24K68E123351   Batavia, NY    03499   X     500   500
005   2006   Chev   Silverado   1GCHK24U86E126950   Lapeer, M    01499   X    
500   500 006   1995   Ford   F700   1FDNF70J6SVA82906   Lapeer, Ml    31499   X
      007   2001   Ford   Super Duty   1FDXE45S01HA47853   Lapeer, Ml    21499  
X       008   1996   Dodge   Pickup   1B7HF16Z7TS584662   Lapeer, Ml    01499  
X       009   2011   Linde   H80D   H2X396B00720   Batavia, NY    7996   X      
010   2012   Chev   Silverado   1GCNCPEX1CZ209484   Batavia, NY    03499   X    
500   500 011   2012   Linde   Forklift   H2X396C01043   Batavia, NY    7996   X
      012   2012   Unde   Forklift   H2X394C02480   Batavia, NY    7996   X    
  013   2012   Hyster   Forklift   L177V11121K   Batavia, NY    7996   X      
014   2012   Hyster   Forklift   L177V11122K   Batavia, NY    7996   X      

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

           

 

For:

 

 

Graham Corporation

   

 

M & T Insurance Agency, Inc.

      Attn:  Jeffrey Glajch     285 Delaware Avenue, Ste 4000       20 Florence
Avenue     Buffalo, NY 14202      

Batavia, NY 14020

 

   

716-853-7960

 

   

Workers Compensation - Rating            Policy No. WC170896503

Information

 

           

 

 

20 Florence Ave.   3632        Machine Shop NOC      11,510,000           5.02
     Batavia, NY                      8742        Salespersons - outside     
573,100           .49        8809        Executive Officers NOC      395,200   
       .24        8810        Clerical Office Employees NOC      9,425,000   
       .23                         16630 Imperial Valley Dr.   8742       
Salespersons - outside      602,200           .41      Houston, TX            
         8810        Clerical Office Employees NOC      50,000           .25   
                     3123 John Conley Dr.   8810        Clerical Office
Employees NOC      1,947,800           .16      Lapeer, Ml                     
7215        Iron or Steel Merchant - drivers      37,100           13.54       
4511        Analytical Laboratories - Research      455,700           .55       
3365        Welding or Cutting NOC      614,100           5.80        3632     
  Machine Shop NOC      198,400           4.04        8742       
Salesperson-outside      474,600           .34     

 

 

THIS SUMMARY IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS TO
THE INSURED. THIS SUMMARY DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED
BY THE POLICIES. IT IS STRONGLY RECOMMENDED THAT EACH POLICY BE THOROUGHLY
REVIEWED.

 

 

Account Executive

 

   Kevin Weber    716-651-4253

Client Service Consultant

 

   Linda Sim    716-651-4243

Assistant Account Manager

 

   Erin Walls    716-651-4219

Claims Representative

 

   Jessica Stankiewicz    716-651-4270

Claims Manager

 

   Marlene Szretter    716-651-4249

Commercial Lines Manager

 

   Ruth Gustafson-Hare    716-651-4216

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

SUMMARY OF INSURANCE

 

  

Prepared:    10/23/15                   Page 1

 

For:   Graham Corporation    M & T Insurance Agency, Inc.     20 Florence Avenue
   285 Delaware Avenue, Suite 4000    

Batavia, NY 14020

585-343-2216

  

Buffalo, NY 14202

800-716-8314

Coverage   Amount   Company   Policy No   Eff   Exp                            
    

 

Directors and Officers Liability

        Illinois National Insurance   Company (Chartis)  
        01-137-47-11             04/01/15       04/01/16      

Claims Made

                                             

Named Insured:

                       

Graham Corporation

                                             

Aggregate Limit of Liability

  $15,000,000                                          

Directors and Officers Liability Deductibles:

                   

Non-Indemnified

    $5,000/$50,000                      

Indemnified

  $125,000                

Security Claims (Entity)

  $500,000                    

Aggregate Tie In Limit of Liability to EPL Policy #02-778-27-59 and Fiduciary
Policy #01-137-72-43

                                             

A-Side Directors and Officers Liability

      Federal Insurance Company (Chubb)   8223-5692   04/01/15   04/01/16      
                         

Claims Made

                                             

Named Insured:

                   

Graham Corporation

                                             

Aggregate Limit of Liability

  $10,000,000                                          

Employment Practices Liability

      National Union Fire Insurance Company of Pittsburgh, PA (Chartis)  
01-137-74-16   04/01/15   04/01/16                            

Claims Made

                                             

Named Insured:

                       

Graham Corporation

                                             

Aggregate Tie In Limit of Liability Under the Directors and Officers Liability
Policy #01-137-47-11

  $5,000,000                                          

Employment Practices Liability Deductible

  $75,000                                          

Fiduciary Liability

      Illinois National Insurance Company (Chartis)   01-137-72-43   04/01/15  
04/01/16                                

Claims Made

                                             

Named Insured:

                   

Graham Corporation

                                             

Aggregate Tie In Limit of Liability Under the Directors and Officers Liability
Policy #01-137-47-11

  $5,000,000                                          

Fiduciary Liability Deductible

  $100,000                                              

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

Voluntary Compliance Loss Sublimit

   $250,000                        

Section 502(c) Penalties Sublimit

   $250,000                        

Pension Protection Act Penalties Sublimit

   $250,000                        

HIPAA Penalties Sublimit

       $1,500,000                            

Healthcare Reform Penalties Sublimit

   $250,000                        

Section 4975 Penalties Sublimit

   $250,000                        

Pension Crisis Fund Sublimit

   $100,000                                                       

Commercial Crime Coverage

              Federal Insurance             Company (Chubb)         
    8207-3264        09/01/15      09/01/16                                     

Named Insured:

                            

Graham Corporation and its Subsidiaries

                                                           

Employee Theft Coverage

   $1,500,000                        

Deductible

   $10,000                        

Premises Coverage

   $1,000,000                        

Deductible

   $10,000                        

In Transit Coverage

   $1,000,000                        

Deductible

   $10,000                        

Forgery Coverage

   $1,000,000                        

Deductible

   $10,000                        

Computer Fraud Coverage

   $1,000,000                        

Deductible

   $10,000                        

Funds Transfer Fraud Coverage

   $1,000,000                        

Deductible

   $10,000                        

Money Orders & Counterfeit Fraud Coverage

   $50,000                        

Deductible

   $10,000                        

Credit Card Fraud Coverage

   $50,000                        

Deductible

   $10,000                        

Expense Coverage

   $250,000                        

Deductible

   $10,000                        

Telephone Fraud Coverage

   $100,000                        

Deductible

   $10,000                        

ERISA Coverage

   See Policy                        

Deductible

   $0                                                       

Kidnap & Ransom Coverage

              Federal Insurance             Company (Chubb)          8211-5877
   04/01/15      04/01/18                                     

Named Insured:

                            

Graham Corporation

                            

Energy Steel & Supply Co.

                            

ES Acquisition, Corp.

                            

All Subsidiaries Covered By Endorsement

                                                           

Kidnap/Ransom and Extortion Coverage

   $5,000,000                        

Delivery Coverage

   $5,000,000                        

Expense Coverage

   $5,000,000                        

Legal Liability Coverage

   $5,000,000                        

Political Threat and Wrongful Detention Coverage

   $5,000,000                        

Threat Response Expense Coverage

   $5,000,000                        

Business Income / 6 Hours

   $5,000,000                        

Deductible

   $0                                                       

THIS SUMMARY IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS
UPON THE

INSURED. THIS SUMMARY DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY
THE

POLICIES. IT IS STRONGLY RECOMMENDED THAT EACH POLICY BE THOROUGHLY REVIEWED.

 

  Account Executive:   Kevin Weber   716-651-4253       Account Manager:   Linda
Sim   716-651-4243       Claims Manager:   Marlene Szretter   716-651-4249      
Surety Manager:   Joe Riggie   716-651-4239    

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

SCHEDULE 3.15

Capitalization and Subsidiaries

Borrower:

Graham Corporation -- Delaware corporation

Common stock, par value $0.10 per share -- 10,138,983 shares outstanding to 148
holders of record (as of 5/22/15)

 

Subsidiaries:

Energy Steel & Supply Co. -- Michigan corporation

Common stock, no par value -- 9,000 shares of common stock outstanding owned by
Graham Corporation

Graham Vacuum and Heat Transfer and Technology (Suzhou) Co., Ltd. -- limited
liability company organized under the laws of the People’s Republic of China --

Wholly-owned by Graham Corporation -- equity interests are uncertificated

Inactive Subsidiary:

Graham Indonesia, Inc. -- Delaware corporation

Wholly-owned by Graham Corporation; to be dissolved

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

SCHEDULE 5.13

Existing Standby Letters of Credit

See following.

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

OUTSTANDING LETTERS OF CREDIT ISSUED BY BANK OF AMERICA, N.A.

 

        Issue Date                       Beneficiary  (abbreviated)            
    Outstanding Amount ($)   5/7/2012   GREAT AMERICAN INSUR   430,000.00
7/18/2012   FUJI ELECTRIC CORP.   17,851.30 1/7/2013   TOYO ENGINEERING KOR  
37,200.00 3/26/2013   NUKLEARNA ELEKTRARNA   414,426.00 6/14/2013   DAELIM
INDUSTRIAL CO   801,190.90 6/25/2013   DAELIM INDUSTRIAL CO   60,168.40 7/2/2013
  TECNICAS REUNIDAS, S   427,516.90 10/31/2013   BANK OF AMERICA   115,339.30
3/27/2014   TR CANADA, INC.   584,910.00 5/2/2014   ABEINSA ABENER TEYMA  
79,270.00 9/9/2014   UHDE SHEDDEN (AUSTRA   16,621.50 9/29/2014   SAMSUNG
ENGINEERING   27,000.00 10/1/2014   TECNIMONT SPA   251,250.00 11/5/2014  
QUANTA POWER GENERAT   142,950.00 2/10/2015   THYSSENKRUPP INDUSTR   72,130.70
2/10/2015   THYSSENKRUPP INDUSTR   39,757.60 3/2/2015   JGSK JOINT-VENTURE,  
1,120,000.00 3/16/15   CNOOC ZHONGJIE PETROCHEMICAL CO.   110,500.00 4/29/15  
THYSSENKRUPP INDUSTRIAL SOLUTIONS   74,397.70 5/29/2015   CNOOC OIL & PETROCHE  
3,800.00 7/3/2015   THYSSENKRUPP INDUSTR   427,256.80 7/17/2015   PTT GLOBAL
CHEMICAL   133,834.70 7/16/2015   TOYO U.S.A. INC.   677,400.00 7/28/2015  
PEMEX PETROQUIMICA   31,698.70 7/28/2015   PEMEX PETROQUIMICA   237,740.25*
7/30/2015   MHI COMPRESSOR INTER   423,187.70 8/4/2015   THYSSENKRUPP INDUSTR  
177,568.00 9/3/2015   ORASCOM E & C USA IN   5,489.10 9/10/2015   MHI COMPRESSOR
INTER   504,655.40 9/30/2015   SK ENGINEERING & CON   636,367.20 10/27/2015  
HYUNDAI ENGINEERING   92,500.00 10/27/2015   HYUNDAI ENGINEERING   92,500.00
11/6/2105   SAMSUNG ENGINEERING   246,537.00 11/13/2015   ENAP REFINERIAS S.A.  
212,500.00 11/13/2015   ENAP REFINERIAS S.A.   217,840.00

*  The face amount of this letter of credit on the Closing Date is $79,246.75.
This letter of credit will be amended shortly after or contemporaneously with
the Closing Date to reflect the face amount listed in the Schedule.

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

Outstanding standby DCs | HSBCnet

 

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NOT CASH COLLATERALIZED

  

 

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Pending standby DCs        

 

          Outstanding         standby DCs           

    Outstanding

    standby DC claims

 

  Standby DC account information    Outstanding standby DCs   
Outstanding standby DCs summary      

Help

 

 

 

 

Location / Institution

  United States - HSBC Bank USA NA

Account

  GRAHAM CORPORATION IMP 504-082801-750

Category

  Outstanding standby DCs

Currency subtotals

  USD              1,257,322.42    @    1.0000000

Total (LCY)

  USD              1,257,322.42

Please note that the above exchange rate is for Indication only.

 

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Expiry date or range (dd/mm/yyyy)

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Outstanding standby DCs GRAHAM CORPORATION IMP 504-082801-750  

Standby DC

number

  Beneficiary name   CCY   

Outstanding    

amount    

   Expiry date (dd/mm/yyyy)   Status    

 

SDCMTN567144

 

 

HSBC BANK PLC SUCURSAL EN ESPANA.

 

USD

  

96,092.80

  

04/01/2017

 

Issued

 

SDCMTN567149

 

HSBC BANK PLC SUCURSAL EN ESPANA.

 

USD

  

854,998.00

  

15/06/2016

 

Issued

 

SDCMTN567210

 

HSBC BANK PLC

 

USD

  

213,749.50

  

26/05/2019

 

Issued

 

SDCMTN567498

 

HSBC BANK PLC

 

USD

  

7,889.00

  

30/01/2019

 

Issued

 

SDCMTN567569

 

FACILITY USE ONLY

 

USD

  

0.01

  

31/12/2015

 

Issued

 

SDCMTN567587

 

HSBC BANK PLC

 

USD

  

1,472.56

  

04/01/2017

 

Issued

 

SDCMTN567589

 

HSBC BANK PLC

 

USD

  

12,985.76

  

03/12/2016

 

Issued

 

SDCMTN567591

 

HSBC BANK PLC

 

USD

  

8,287.29

  

24/11/2016

 

Issued

 

SDCMTN567709

 

HSBC BANK PLC

 

USD

  

61,847.50

  

23/03/2016

 

Issued

 

 Note:

 Issued = Action completed from bank

 Submitted = Application submitted to bank

 Am/In transit = Amendment in transit

 Am/Incomplete = Amendment incomplete

 Am/Pend check = Amendment pending check

 Am/Pend auth = Amendment pending authorisation

 Am/Pend 2nd = Amendment pending 2nd authorisation

 Am/Pend 3rd = Amendment pending 3rd authorisation

 Am/Pend repair = Amendment pending repair

 Am/Submitted = Amendment submitted to bank

 Can/In transit = Cancellation in transit

 Can/Pend check = Cancellation pending check

 Can/Pend auth = Cancellation pending authorisation

 Can/Pend 2nd = Cancellation pending 2nd authorisation

 Can/Pend 3rd = Cancellation pending 3rd authorisation

 Can/Submitted = Cancellation submitted to bank

 Can/Pend repair = Cancellation pending repair

 Can/Incomplete = Cancellation incomplete

 

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

SCHEDULE 6.01

Existing Indebtedness

1.  Unsecured line of credit with HSBC, N.A. -- up to $5,000,000 in principal
amount

$ 1,257,322.42 face amount of letters of credit outstanding as of Closing Date

2.  Existing Standby letters of credit listed on Schedule 5.13

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

SCHEDULE 6.02

Existing Liens

Cash collateralization of standby letters of credit issued by Bank of America,
NA and listed on Schedule 5.13, at Bank of America Deposit Account Number
483037479292.

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

SCHEDULE 6.04

Existing Investments

See following list of certificates of deposit maintained with Bank of America,
N.A., each of which has/had a maturity beyond 180 days after acquisition
thereof.

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

         INVESTMENT             MATURITY/            AMOUNT     CALL DATE  

CD

     3,000,000.00           1/13/2016   

CD

     3,000,000.00           12/14/2015   

CD

     3,000,000.00           2/10/2016   

CD

     3,000,000.00           3/10/2016   

CD

     3,000,000.00           4/11/2016   

CD

     3,000,000.00           5/11/2016   

CD

     3,000,000.00           6/10/2016   

CD

     3,000,000.00           7/5/2016   

CD

     3,000,000.00           8/10/2016   

CD

     3,000,000.00           9/8/2016   

CD

     1,500,000.00           9/8/2016   

CD

     1,500,000.00           10/7/2016   

CD

     1,500,000.00           10/7/2016   

CD

     1,500,000.00           10/17/2016   

CD

     3,000,000.00           11/10/2016         39,000,000.00        

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

SCHEDULE 6.10

Existing Restrictions

None.