Exhibit 10.1

 

FINANCING AGREEMENT

 

Financing Agreement, dated as of January 31, 2005, by and among Oglebay Norton
Company, an Ohio corporation (the “Parent”), Erie Navigation Company, a
Pennsylvania corporation (“Erie Navigation”), Erie Sand and Gravel Company, a
Pennsylvania corporation (“Erie Sand and Gravel”), Erie Sand Steamship Co., a
Delaware corporation (“Erie Steamship”), Global Stone Chemstone Corporation, a
Delaware corporation (“GS Chemstone”), Global Stone Filler Products, Inc., a
Delaware corporation (“GS Filler”), Global Stone James River, Inc., a Delaware
corporation (“GS James River”), Global Stone PenRoc LP, a Pennsylvania limited
partnership (“GS PenRoc”), Global Stone Portage, LLC, an Indiana limited
partnership (“GS Portage”), Global Stone St. Clair Inc., a Delaware corporation
(“GS St. Clair”), Global Stone Tenn Luttrell Company, a Delaware corporation
(“GS Tenn Luttrell”), Michigan Limestone Operations, Inc., a Michigan
corporation (“Michigan Limestone”), Mountfort Terminal, Ltd., a Pennsylvania
corporation (“Mountfort”), Oglebay Norton Industrial Sands, Inc., a California
corporation (“ON Industrial Sands”), Oglebay Norton Marine Services Company,
L.L.C., a Delaware limited liability company (“Marine Services”), Oglebay Norton
Specialty Minerals, Inc., an Ohio corporation (“ON Specialty”), Oglebay Norton
Terminals, Inc., an Ohio corporation (“ON Terminals”), Texas Mining, LP, a
Delaware limited partnership (“Texas Mining” and together with the Parent, Erie
Navigation, Erie Sand and Gravel, Erie Steamship, GS Chemstone, GS Filler, GS
James River, GS PenRoc, GS Portage, GS St. Clair, GS Tenn Luttrell, Michigan
Limestone, Mountfort, ON Industrial Sands, Marine Services, ON Specialty and ON
Terminals, each a “Borrower” and collectively, the “Borrowers”), each subsidiary
of the Parent listed as a “Guarantor” on the signature pages hereto (each a
“Guarantor” and collectively, the “Guarantors”), the lenders from time to time
party hereto (each a “Lender” and collectively, the ”Lenders”), Silver Point
Finance, LLC, a Delaware limited liability company (“Silver Point”), as
collateral agent and syndication agent for the Lenders and as lead arranger (in
such capacities, together with its successors and assigns in such capacities, if
any, the ”Collateral Agent”), Wells Fargo Foothill, Inc., a California
corporation (“Foothill”), as administrative agent for the Lenders (in such
capacity, together with its successors and assigns in such capacity, if any, the
“Administrative Agent” and together with the Collateral Agent, each an “Agent”
and collectively, the “Agents”), and JPMorgan Chase Bank and Bank of America,
N.A., each as a documentation agent for the Lenders (in such capacity, together
with their respective successors and assigns in such capacity, if any, each a
“Documentation Agent” and collectively, the “Documentation Agents”).

 

RECITALS

 

WHEREAS, the Borrowers and the Guarantors commenced cases (the “Chapter 11
Cases”) under Chapter 11 of Title 11 of the Bankruptcy Code in the United States
Bankruptcy Court for the District of Delaware ( the “Bankruptcy Court”), and the
Borrowers and the Guarantors are emerging from bankruptcy pursuant to that
certain Second Amended Joint Plan of Reorganization of Debtors and Debtors in
Possession, dated July 30, 2004, filed by the Borrowers and the Guarantors with
the Bankruptcy Court in the Chapter 11 Cases (the “Plan of Reorganization”, a
copy of which is attached hereto as Exhibit F-2); and

 

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WHEREAS, the Borrowers and the Guarantors have asked the Lenders to make loans
and advances to the Borrowers consisting of (a) a term loan A facility in an
aggregate principal amount of $105,000,000, (b) a term loan B facility in an
aggregate principal amount of $150,000,000, and (c) a revolving credit facility
in an aggregate principal amount not to exceed $55,000,000 at any time
outstanding (which amount shall be increased to $65,000,000 from March 1, 2005
through September 30, 2005), which revolving credit facility will include a
letter of credit subfacility for the issuance of letters of credit. The Lenders
have severally, and not jointly, agreed to extend such credit to the Borrowers
subject to the terms and conditions hereinafter set forth.

 

NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained herein, the parties hereto agree as follows:

 

ARTICLE I

 

DEFINITIONS; CERTAIN TERMS

 

Section 1.01 Definitions. As used in this Agreement, the following terms shall
have the respective meanings indicated below, such meanings to be applicable
equally to both the singular and plural forms of such terms:

 

“Account Debtor” means each debtor, customer or obligor in any way obligated on
or in connection with any Account.

 

“Account” means an “account” (as such term is defined in Article 9 of the
Uniform Commercial Code), and any and all supporting obligations in respect
thereof.

 

“Acquired Indebtedness” means Indebtedness of a Person existing at the time such
Person becomes a Loan Party or assumed in connection with a Permitted
Acquisition of assets or Capital Stock of such Person, which Indebtedness was
not incurred in connection with, or in anticipation of, such Permitted
Acquisition.

 

“Acquisition” means (a) any Stock Acquisition or (b) any Asset Acquisition.

 

“Action” has the meaning specified therefor in Section 13.12.

 

“Administrative Agent” has the meaning specified therefor in the preamble
hereto.

 

“Administrative Agent’s Account” means an account at a bank designated by the
Administrative Agent from time to time as the account into which the Loan
Parties shall make all payments to the Administrative Agent for the benefit of
the Agents and the Lenders under this Agreement and the other Loan Documents.

 

“Administrative Borrower” has the meaning specified therefor in Section 13.21.

 

“Affiliate” means, with respect to any Person, any other Person that directly or
indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with, such Person. For purposes of this definition,
“control” of a Person means the power,

 

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directly or indirectly, either to (i) vote 10% or more of the Capital Stock
having ordinary voting power for the election of directors of such Person or
(ii) direct or cause the direction of the management and policies of such Person
whether by contract or otherwise. Notwithstanding anything herein to the
contrary, in no event shall any Agent or any Lender be considered an “Affiliate”
of any Loan Party.

 

“After Acquired Property” has the meaning specified therefor in Section 8.01(n).

 

“Agent” and “Agents” have the respective meanings specified therefor in the
preamble hereto.

 

“Agent Advances” has the meaning specified therefor in Section 11.08(a).

 

“Agreement” means this Financing Agreement, including all amendments,
modifications and supplements and any exhibits or schedules to any of the
foregoing, and shall refer to the Agreement as the same may be in effect at the
time such reference becomes operative.

 

“Applicable Prepayment Premium” means, as of any date of determination, (i) with
respect to Revolving Loans, an amount equal to (a) during the period of time
from and after the date that is the first anniversary of the Effective Date up
to the date that is the second anniversary of the Effective Date, 3.0% times the
amount of the reduction in the Total Revolving Credit Commitment, (b) during the
period of time from and after the date that is the second anniversary of the
Effective Date up to the date that is the third anniversary of the Effective
Date, 2.0% times the amount of the reduction in the Total Revolving Credit
Commitment, and (c) during the period of time from and after the date that is
the third anniversary of the Effective Date up to the date that is the fourth
anniversary of the Effective Date, 1.0% times the amount of the reduction in the
Total Revolving Credit Commitment, (ii) with respect to the Term Loan A, an
amount equal to (a) during the period of time from and after the date that is
the first anniversary of the Effective Date up to the date that is the second
anniversary of the Effective Date, 3.0% times the portion of the Term Loan A
that is prepaid, (b) during the period of time from and after the date that is
the second anniversary of the Effective Date up to the date that is the third
anniversary of the Effective Date, 2.0% times the portion of the Term Loan A
that is prepaid, and (c) during the period of time from and after the date that
is the third anniversary of the Effective Date up to the date that is the fourth
anniversary of the Effective Date, 1.0% times the portion of the Term Loan A
that is prepaid, and (iii) with respect to the Term Loan B, an amount equal to
(a) during the period of time from and after the date that is the first
anniversary of the Effective Date up to the date that is the second anniversary
of the Effective Date, 6.0% times the portion of the Term Loan B that is
prepaid, (b) during the period of time from and after the date that is the
second anniversary of the Effective Date up to the date that is the third
anniversary of the Effective Date, 5.0% times the portion of the Term Loan B
that is prepaid, (c) during the period of time from and after the date that is
the third anniversary of the Effective Date up to the date that is the fourth
anniversary of the Effective Date, 4.0% times the portion of the Term Loan B
that is prepaid, and (d) during the period of time from and after the date that
is the fourth anniversary of the Effective Date up to the Maturity Date, 2.0%
times the portion of the Term Loan B that is prepaid.

 

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“As-Extracted Collateral” means any “as-extracted collateral,” as such term is
defined in the UCC, now owned or hereafter acquired by any Loan Party or in
which any Loan Party now has or hereafter acquires any rights and wherever
located.

 

“Asset Acquisition” means any purchase or other acquisition by a Borrower of all
or substantially all of the assets of any other Person or any line of business
or division of such Person.

 

“Assignment and Acceptance” means an assignment and acceptance entered into by
an assigning Lender and an assignee, and accepted by the Collateral Agent, in
accordance with Section 13.07 hereof and substantially in the form of Exhibit E
hereto or such other form acceptable to the Collateral Agent.

 

“Assignment of Pool Agreement” means a collateral assignment executed by a Loan
Party in favor of the Collateral Agent, for the benefit of the Agents and the
Lenders, pursuant to which such Loan Party assigns its rights under the Pool
Agreement, in form and substance satisfactory to each Agent.

 

“Authorized Officer” means, with respect to any Person, the chief executive
officer, chief financial officer or general counsel of such Person.

 

“Availability” means, at any time, an amount equal to (i) the lesser of (A) the
Borrowing Base and (B) the Total Revolving Credit Commitment, minus (ii) such
reserves (without duplication of any other reserves instituted pursuant to this
Agreement) as the Administrative Agent may impose in the exercise of its
Permitted Discretion, provided that, the Administrative Agent shall provide
prompt subsequent notice after imposing any such reserves, provided further
that, the failure to timely provide such notice shall not affect the validity of
the imposition of such reserve.

 

“Banking Services” means each and any of the following bank services provided by
any Agent or any Lender or any of their respective Affiliates: (a) commercial
credit cards, (b) stored value cards, and (c) treasury management services
(including, without limitation, controlled disbursement, automated clearinghouse
transactions, return items, overdrafts and interstate depository network
services).

 

“Banking Services Obligations” means any and all obligations of any Loan Party,
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 Code” means the United States Bankruptcy Code (11 U.S.C. § 101, et
seq.), as amended, and any successor statute.

 

“Bankruptcy Court” has the meaning specified therefor in the recitals hereto.

 

“Benefit Plan” has the meaning specified therefor in Section 7.01(i).

 

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“Board” means the Board of Governors of the Federal Reserve System of the United
States.

 

“Board of Directors” means, with respect to any Person, the board of directors
(or comparable managers) of such Person or any committee thereof duly authorized
to act on behalf of the board.

 

“Book Value” means, with respect to any Inventory of any Person, the lower of
(i) ”first-in, first-out” value (as reflected in the general ledger of such
Person after customary reserves established by such Person in good faith and in
accordance with GAAP) and (ii) market value, in each case, determined in
accordance with GAAP.

 

“Borrowers” has the meaning specified therefor in the preamble hereto.

 

“Borrowing Base” means, at any time, the sum of (i) 85% of the value of the Net
Amount of Eligible Accounts not subject to the Pool Agreement at such time,
plus, during a Seasonal Pool Accounts Period, 60% of the value of the Net Amount
of Eligible Accounts subject to the Pool Agreement at such time, less the
amount, if any, of the Dilution Reserve plus (ii) the least of (A) 65% of the
Book Value of the Eligible Inventory at such time, (B) 85% of the Net Orderly
Liquidation Percentage times the Book Value of the Eligible Inventory at such
time, and (C) $25,000,000.

 

“Borrowing Base Certificate” means a certificate signed by an Authorized
Officer, the Assistant Treasurer or the Vice President of Finance and Accounting
of the Administrative Borrower and setting forth the calculation of the
Borrowing Base in compliance with Section 8.01(a)(vi), substantially in the form
of Exhibit C.

 

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required to close, provided
that, with respect to the borrowing, payment or continuation of, or
determination of interest rate on, LIBOR Rate Loans, Business Day shall mean any
Business Day which dealings in Dollars may be carried on in the interbank
eurodollar markets in New York City and London.

 

“Capital Expenditures” means, with respect to any Person for any period, the
aggregate of all expenditures by such Person and its Subsidiaries during such
period that in accordance with GAAP are or should be included in “property,
plant and equipment” or in a similar fixed asset account on its balance sheet,
whether such expenditures are paid in cash or financed and including all
Capitalized Lease Obligations paid or payable during such period; provided, that
the term “Capital Expenditure” shall not include (a) expenditures made in
connection with the replacement, substitution or restoration of assets or the
purchase of any other assets used or useful in the business of such Person (i)
to the extent permitted by this Agreement to be financed from insurance proceeds
paid on account of the loss of or damage to the assets of any such Person or its
Subsidiaries, (ii) to the extent permitted by this Agreement to be financed with
the proceeds of asset sales, or (iii) with awards of compensation arising from
the taking by eminent domain or condemnation of the assets of any such Person or
its Subsidiaries, and (b) the purchase price of equipment that is purchased
simultaneously with the trade-in of existing equipment to the

 

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extent that the gross amount of such purchase price is reduced by the credit
granted by the seller of such equipment for the equipment being traded in at
such time.

 

“Capital Guideline” means any law, rule, regulation, policy, guideline or
directive (whether or not having the force of law and whether or not the failure
to comply therewith would be unlawful) of any central bank or Governmental
Authority (i) regarding capital adequacy, capital ratios, capital requirements,
the calculation of a bank’s capital or similar matters, or (ii) affecting the
amount of capital required to be obtained or maintained by any Lender, any
Person controlling any Lender, or the L/C Issuer or the manner in which any
Lender, any Person controlling any Lender, or the L/C Issuer allocates capital
to any of its contingent liabilities (including letters of credit), advances,
acceptances, commitments, assets or liabilities.

 

“Capital Stock” means (i) with respect to any Person that is a corporation, any
and all shares, options, warrants, interests, participations or other
equivalents (however designated and whether or not voting) of corporate stock,
and (ii) with respect to any Person that is not a corporation, any and all
partnership, membership or other equity interests of such Person, in each case,
whether voting or nonvoting, including common stock, preferred stock or any
other “equity security” (as such term is defined in Rule 3a11-1 of the General
Rules and Regulations promulgated by the Securities and Exchange Commission
under the Securities Exchange Act of 1934).

 

“Capitalized Lease” means, with respect to any Person, any lease of real or
personal property by such Person as lessee which is (i) required under GAAP to
be capitalized on the balance sheet of such Person or (ii) a transaction of a
type commonly known as a “synthetic lease” (i.e., a lease transaction that is
treated as an operating lease for accounting purposes but with respect to which
payments of rent are intended to be treated as payments of principal and
interest on a loan for Federal income tax purposes).

 

“Capitalized Lease Obligations” means, with respect to any Person, obligations
of such Person and its Subsidiaries under Capitalized Leases, and, for purposes
hereof, the amount of any such obligation shall be the capitalized amount
thereof determined in accordance with GAAP.

 

“Cash Management Accounts” means those bank accounts of each Loan Party
identified as such on Schedule 7.01(u), and any other bank accounts designated
as such from time to time by Administrative Borrower with the prior written
consent of the Administrative Agent.

 

“Cash Management Agreements” means those certain cash management service
agreements, in form and substance satisfactory to the Administrative Agent and
the Collateral Agent, each of which is among the applicable Loan Party, the
Administrative Agent and one of the Cash Management Banks.

 

“Cash Management Bank” means each bank listed on Schedule 7.01(u) at which a
Cash Management Account is maintained.

 

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“Change of Control” means each occurrence after the Effective Date of any of the
following:

 

(a) the acquisition, directly or indirectly, by any person or group (within the
meaning of Section 13(d)(3) of the Exchange Act) of beneficial ownership of more
than 33% of the aggregate outstanding voting power and economic rights of the
Capital Stock of the Parent;

 

(b) the Parent shall cease to have beneficial ownership (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of 100% of the aggregate
voting power and economic rights of the Capital Stock of each other Loan Party
(except for Dispositions permitted pursuant to Section 8.02(c) of this
Agreement), free and clear of all Liens (other than any Liens granted under the
Loan Documents and Permitted Liens); or

 

(c) (i) any Loan Party consolidates with or merges into another entity or
conveys, transfers or leases all or substantially all of its property and assets
to another Person other than another Loan Party, or (ii) any entity consolidates
or amalgamates with or merges into any Loan Party in a transaction pursuant to
which the outstanding voting Capital Stock of such Loan Party is reclassified or
changed into or exchanged for cash, securities or other property, other than any
such transaction described in this clause (ii) in which either (A) in the case
of any such transaction involving the Parent, no person or group (within the
meaning of Section 13(d)(3) of the Exchange Act) has, directly or indirectly,
acquired beneficial ownership of more than 33% of the aggregate outstanding
voting Capital Stock of the Parent or (B) in the case of any such transaction
involving a Loan Party other than the Parent, the Parent has beneficial
ownership, directly or indirectly, of 100% of the aggregate voting power of all
Capital Stock of the resulting, surviving or transferee entity.

 

“Chapter 11 Cases” has the meaning specified therefor in the recitals hereto.

 

“Collateral” means all of the property and assets and all interests therein and
proceeds thereof now owned or hereafter acquired by any Person upon which a Lien
is granted or purported to be granted by such Person as security for all or any
part of the Obligations.

 

“Collateral Agent” has the meaning specified therefor in the preamble hereto.

 

“Collections” means all cash, checks, notes, instruments and other items of
payment (including insurance proceeds, proceeds of cash sales, rental proceeds
and tax refunds) of the Loan Parties.

 

“Concentration Account” means Account Number 359681132783 maintained by the Loan
Parties at KeyBank National Association or such other bank account(s) as the
Administrative Borrower (with the prior written consent of the Administrative
Agent) may designate from time to time, into which cash received in the Cash
Management Accounts is wired as provided in Section 9.01.

 

“Concentration Account Agreement” means a control agreement among any Loan
Party, the Concentration Account Bank and the Administrative Agent, in form and
substance satisfactory to the Collateral Agent and the Administrative Agent,
applicable to the Concentration Account.

 

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“Concentration Account Bank” means KeyBank National Association, or such other
Person or Persons as the Administrative Borrower (with the prior written consent
of the Administrative Agent) may designate from time to time.

 

“Confirmation Order” means the order of the Bankruptcy Court with respect to the
Borrowers and the Guarantors, confirming the Plan of Reorganization, entered
November 17, 2004 by the Bankruptcy Court in the Chapter 11 Cases, substantially
in the form of Exhibit F-1 hereto, as the same may be amended, modified or
supplemented from time to time with the express written consent of the Agents,
the Required Lenders and the Borrowers.

 

“Consolidated EBITDA” means, with respect to any Person for any period, the sum
of (a) the net income (loss) of such Person and its Subsidiaries for such
period, determined on a consolidated basis and in accordance with GAAP, but
excluding from the determination thereof (without duplication) (i) (A) any
extraordinary or non-recurring non-cash gains or non-cash losses, (B) any
extraordinary or non-recurring cash gains in an aggregate amount not to exceed
$4,000,000, (C) any extraordinary or non-recurring cash losses in an aggregate
amount not to exceed $2,000,000, or (D) gains or losses from Dispositions, (ii)
non-cash restructuring charges and cash restructuring charges related to
professional and advisory fees in connection with the Chapter 11 Cases, the
transactions contemplated by this Agreement, the Plan of Reorganization and the
Confirmation Order, and (iii) effects of discontinued operations and (b) without
duplication, the sum of the following amounts of such Person and its
Subsidiaries for such period to the extent deducted in clause (a) above with
respect to such Person and its Subsidiaries for such period: (i) interest
expense, (ii) income tax expense, (iii) depreciation expense, (iv) amortization
expense, (v) non-cash depletion, (vi) non-cash accretion, (vii) non-cash
expenses arising from the grant of stock options and other management
compensation, and (viii) non-cash charges arising solely from the implementation
of fresh start accounting by the Parent and its Subsidiaries in connection with
their emergence from the Chapter 11 Cases, in the case of clauses (b)(i) through
(b)(viii) above, as determined on a consolidated basis.

 

“Contingent Obligation” means, with respect to any Person, any obligation of
such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations (“primary obligations”) of any other Person (the
”primary obligor”) in any manner, whether directly or indirectly, including,
without limitation, (i) the direct or indirect guaranty, endorsement (other than
for collection or deposit in the ordinary course of business), co-making,
discounting with recourse or sale with recourse by such Person of the obligation
of a primary obligor, (ii) the obligation to make take-or-pay or similar
payments, if required, regardless of nonperformance by any other party or
parties to an agreement, (iii) any obligation of such Person, whether or not
contingent, (A) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (B) to advance or supply
funds (1) for the purchase or payment of any such primary obligation or (2) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (C) to purchase
property, assets, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (D) otherwise to assure or hold
harmless the holder of such primary obligation against loss in respect thereof;
provided, however, that the term “Contingent Obligation” shall not include (x)
customary indemnification obligations which are (I) provided in the ordinary
course to the directors, officers, employees, agents, independent

 

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contractors or service providers of the Parent or any of its Subsidiaries or
(II) in connection with the sale or disposition of property, and (y) any product
warranties extended in the ordinary course of business. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation with respect to which such
Contingent Obligation is made (or, if less, the maximum amount of such primary
obligation for which such Person may be liable pursuant to the terms of the
instrument evidencing such Contingent Obligation) or, if not stated or
determinable, the maximum reasonably anticipated liability with respect thereto,
as determined by such Person in good faith.

 

“Contribution Agreement” means the Contribution Agreement, dated as of the
Effective Date, duly executed by each Borrower, substantially in the form of
Exhibit D.

 

“Current Value” has the meaning specified therefor in Section 8.01(n).

 

“Default” means an event which, with the giving of notice or the lapse of time
or both, would constitute an Event of Default.

 

“Designated Borrower” means the Borrowers other than Erie Navigation and Erie
Steamship.

 

“Designated Entity” has the meaning specified therefor in Section 11.11.

 

“Dilution” means, as of any date of determination, a percentage, based upon the
experience of the immediately prior twelve-month period, that is the result of
dividing the Dollar amount of (a) bad debt write-downs, discounts, advertising
allowances, credits, or other dilutive items with respect to the Accounts during
such period, by (b) the Loan Parties’ gross billings during such period.

 

“Dilution Reserve” means, as of any date of determination, an amount sufficient
to reduce the advance rate against Eligible Accounts by one percentage point for
each percentage point by which Dilution is in excess of 5.0%.

 

“Disbursement Letter” means a disbursement of proceeds letter, dated on or about
the Effective Date, among the Agents, the Lenders, the Existing DIP Agents, the
Existing DIP Lenders and the Loan Parties, in form and substance satisfactory to
the Agents.

 

“Disposition” means any transaction, or series of related transactions, pursuant
to which any Person or any of its Subsidiaries sells, assigns, transfers or
otherwise disposes of any property or assets (whether now owned or hereafter
acquired) to any other Person, in each case, whether or not the consideration
therefor consists of cash, securities or other assets owned by the acquiring
Person, excluding any (a) sales of Inventory in the ordinary course of business
on ordinary business terms and (b) exchanges of Permitted Investments for other
Permitted Investments.

 

“Documentation Agent” has the meaning specified therefor in the preamble hereto.

 

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“Dollar,” “Dollars” and the symbol “$” each means lawful money of the United
States of America.

 

“EBITDA Excess Amount” has the meaning specified therefor in Section 8.02(g).

 

“Effective Date” has the meaning specified therefor in Section 6.01.

 

“Eligible Accounts” means the Accounts of a Designated Borrower which are, and
at all times continue to be, acceptable to the Administrative Agent in the
exercise of its Permitted Discretion. In general, an Account may be deemed to be
eligible if: (i) no return, rejection, repossession or dispute has occurred with
respect to such Account, the Account Debtor has not asserted any setoff, defense
or counterclaim with respect to such Account, and there has not occurred any
extension of the time for payment with respect to such Account beyond 30 days
(subject to clause (iv) below) without the consent of the Administrative Agent,
provided that, in the case of any dispute, setoff, defense or counterclaim with
respect to an Account, the portion of such Account not subject to such dispute,
setoff, defense or counterclaim will not, in the Administrative Agent’s
Permitted Discretion, be ineligible solely by reason of this clause (i); (ii)
such Account is lawfully owned by a Designated Borrower free and clear of any
Lien other than in favor of the Collateral Agent for the benefit of the Agents
and the Lenders and otherwise continues to be in full conformity with all
representations and warranties made by a Designated Borrower to the Agents and
the Lenders with respect thereto in the Loan Documents; (iii) such Account is
unconditionally payable in Dollars within 90 days from the original invoice date
and is not evidenced by a promissory note, chattel paper or any other instrument
or other document; (iv) no more than 60 days have elapsed from the original
invoice due date and no more than 90 days have elapsed from the original invoice
date with respect to such Account; (v) such Account is not due from an Affiliate
of a Loan Party; (vi) such Account does not arise from a sale to any director,
officer, other employee or Affiliate of any Loan Party, or to any entity that
has any common officer with any Loan Party and otherwise does not constitute an
obligation of the United States or any other Governmental Authority (unless all
steps required by the Administrative Agent in connection therewith, including
notice to the United States Government under the Federal Assignment of Claims
Act or any action under any state statute comparable to the Federal Assignment
of Claims Act, have been duly taken in a manner satisfactory to the
Administrative Agent); (vii) the Account Debtor (or the applicable office of the
Account Debtor) with respect to such Account is located in the United States or
Canada (subject to clause (xx) below), unless (A) such Account is supported by a
letter of credit or other similar obligation satisfactory to the Administrative
Agent, (B) the original of such letter of credit has been delivered to the
Administrative Agent and (C) the proceeds of such letter of credit have been
assigned to the Administrative Agent, for the benefit of the Agents and the
Lenders, or naming the Administrative Agent, for the benefit of the Agents and
the Lenders, as transferee beneficiary thereunder; (viii) the Account Debtor
with respect to such Account is not also a supplier to or creditor of a Loan
Party, unless such Account Debtor has executed a no-offset letter satisfactory
to the Administrative Agent; (ix) not more than 50% of the aggregate amount of
all Accounts of the Account Debtor with respect to such Account have remained
unpaid 60 days past the original invoice due date or 90 days past the original
invoice date or are otherwise not Eligible Accounts; (x) such Account is not a
pre-petition Account from an Account Debtor that (A) has filed a petition for
bankruptcy or any other relief under the Bankruptcy Code or any other law
relating to bankruptcy, insolvency, reorganization or relief of debtors, made an
assignment for the benefit

 

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of creditors, had filed against it any petition or other application for relief
under the Bankruptcy Code or any such other law, (B) has failed, suspended
business operations, become insolvent or called a meeting of its creditors for
the purpose of obtaining any financial concession or accommodation or (C) has
had or suffered to be appointed a receiver or a trustee for all or a significant
portion of its assets or affairs; (xi) such Accounts are not subject to
collection by an outside claims processor; (xii) the otherwise Eligible Accounts
of any Account Debtor and its Affiliates do not exceed 10% of all Eligible
Accounts, provided, that such percentage as applied to a particular Account
Debtor and its Affiliates are subject to reduction by the Administrative Agent
in its Permitted Discretion if the creditworthiness of such Account Debtor
deteriorates in any material respect and provided, further that, the
Administrative Agent in its Permitted Discretion may increase such percentage
for up to two Account Debtors at any time in a percentage for each such Account
Debtor not to exceed 15%, it being acknowledged that, notwithstanding the
foregoing, with respect to Accounts subject to the Pool Agreement in accordance
with subclause (xvii) below, such percentage shall not exceed (A) 15% for the
period of March 15 through May 31 of each year, (B) 20% for the period of June 1
through August 31 of each year and (C) 15% for the period of September 1 through
September 30 of each year; (xiii) such Account does not arise in a transaction
wherein goods are placed on consignment or are sold pursuant to a guaranteed
sale, a sale or return, a sale on approval, a bill and hold, or any other terms
by reason of which the payment by the Account Debtor may be conditional; (xiv)
such Account is not from an Account Debtor that is located in a state or
jurisdiction (e.g. New Jersey, Minnesota and West Virginia) that requires, as a
condition to access to the courts of such jurisdiction, that a creditor qualify
to transact business, file a business activities report or other report or form,
or take one or more other actions, unless the applicable Designated Borrower has
so qualified, filed such reports or forms, or taken such actions (and, in each
case, paid any required fees or other charges), except to the extent such
Designated Borrower may qualify subsequently as a foreign entity authorized to
transact business in such state or jurisdiction and gain access to such courts,
without incurring any cost or penalty viewed by the Administrative Agent to be
significant in amount, and such later qualification cures any inability to
access such courts to enforce payment of such Account; (xv) such Accounts arise
from the sale of goods or the performance of services by a Designated Borrower
in the ordinary course of its business and with respect to which (A) the goods
giving rise to such Accounts have been shipped and billed to the Account Debtor
or (B) the services giving rise to such Account have been performed and billed
to the Account Debtor; (xvi) such Accounts do not represent a right to receive
progress payments and other advance billings that are due prior to the
completion of performance by the applicable Designated Borrower of the subject
contract for goods or services; (xvii) if such Accounts are subject to the Pool
Agreement, the Administrative Agent shall have received an executed Assignment
of Pool Agreement, such Assignment of Pool Agreement shall be in full force and
effect, and in no event shall the amount of Accounts subject to the Pool
Agreement included in Eligible Accounts exceed $10,000,000; (xviii) Accounts
that are not otherwise unacceptable to the Administrative Agent in its Permitted
Discretion; (xix) the Administrative Agent is, and continues to be, satisfied
with the credit standing of the Account Debtor in relation to the amount of
credit extended and the Administrative Agent believes, in its Permitted
Discretion, that the prospect of collection of such Account is not impaired by
reason of such Account Debtor’s financial condition; and (xx) such Accounts are
payable in Dollars. Accounts that are purchased in connection with a Permitted
Acquisition or Accounts owned by a Person that is acquired in connection with a
Permitted Acquisition shall not be deemed Eligible

 

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Accounts until Administrative Agent has conducted and is satisfied in its
Permitted Discretion with the results of a review and audit of such Accounts.
Eligible Accounts shall be calculated net of customer deposits and unapplied
cash remitted to any of the Designated Borrowers.

 

“Eligible Inventory” means all finished goods, work-in-process and raw materials
constituting As-Extracted Collateral of a Designated Borrower that meets all of
the following specifications, provided that such specifications may be fixed and
revised from time to time by the Administrative Agent in the exercise of its
Permitted Discretion, provided further that, Administrative Agent shall provide
Administrative Borrower with prompt subsequent notice of any change to such
specifications (it being understood that the failure to provide such notice in a
timely manner shall have no affect on whether any such Inventory shall
constitute Eligible Inventory): (i) such Inventory is lawfully owned by a
Designated Borrower free and clear of any existing Lien other than in favor of
the Collateral Agent for the benefit of the Agents and the Lenders and otherwise
continues to be in full conformity with all representations and warranties made
by a Designated Borrower to the Agents and the Lenders with respect thereto in
the Loan Documents; (ii) such Inventory is not held on consignment and may be
lawfully sold; (iii) a Designated Borrower has the right to grant Liens on such
Inventory; (iv) such Inventory arose or was acquired in the ordinary course of
the business of a Designated Borrower and does not represent damaged, obsolete
or unsaleable goods; (v) no Account or document of title has been created or
issued with respect to such Inventory; (vi) such Inventory is located in one of
the locations in one of the continental United States that is either (A) owned
by a Designated Borrower or (B) listed on Schedule 7.01(bb) or such other
locations in the continental United States as the Agents may approve in writing
from time to time and in the case of this subclause (B), either (I) (x) it is
subject to a landlord waiver or collateral access agreement, each in form and
substance satisfactory to the Agents, executed by the lessor, or other third
party, as the case may be, and (y) it is segregated or otherwise separately
identifiable from goods of others, if any, stored on the premises or (II) the
Administrative Agent has established a rent reserve in an amount satisfactory to
the Administrative Agent with respect to such location; (vii) such Inventory
does not consist of goods returned or rejected by a Loan Party’s customers
(other than goods that are undamaged and resaleable in the normal course of
business); (viii) such Inventory is not in-transit (except between locations
specified on Schedule 7.01(bb)); (ix) such Inventory does not consist of goods
that are slow moving, work-in-process, supplies or goods that constitute spare
parts, packaging and shipping materials, bill and hold goods or defective goods;
(x) such Inventory does not consist of Hazardous Materials or goods that can be
transported or sold only with licenses that are not readily available; (xi) such
Inventory is covered by casualty insurance reasonably acceptable to the
Administrative Agent; (xii) such Inventory is not excess, obsolete, shopworn,
seconds, damaged or unfit for sale; (xiii) such Inventory is located at a site
with an aggregate Book Value of Eligible Inventory in excess of $100,000 at such
site; (xiv) such Inventory is of a type held for sale in the ordinary course of
business of the Designated Borrower; and (xv) if such Inventory was previously
included in Eligible Inventory, such Inventory is not otherwise unacceptable to
the Administrative Agent in the exercise of its Permitted Discretion as a result
of a change in the nature or quality of such Inventory, including the results of
any audit or appraisal, provided that, in the case of this clause (xv), the
Administrative Agent shall provide the Administrative Borrower with prompt
subsequent notice if any such Inventory becomes unacceptable to the
Administrative Agent in the exercise of its Permitted Discretion (it being
understood that the failure to provide such notice in a timely manner shall have
no affect on whether any such Inventory shall constitute Eligible Inventory).

 

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Inventory that is purchased in connection with Permitted Acquisition or
Inventory owned by a Person that is acquired in connection with a Permitted
Acquisition shall not be deemed Eligible Inventory until Administrative Agent
has conducted and is satisfied in its Permitted Discretion with the results of a
review, audit, inspection and appraisal of such Inventory.

 

“Eligible Vessels” means each of the Vessels other than the Vessels known as
“David Z. Norton” and “Wolverine”.

 

“Employee Plan” means an employee benefit plan (other than a Multiemployer Plan)
covered by Title IV of ERISA and maintained (or that was maintained at any time
during the six (6) calendar years preceding the date of any borrowing hereunder)
for employees of any Loan Party or any of its ERISA Affiliates or was
contributed to or was required to be contributed to by a Loan Party or any of
its ERISA Affiliates.

 

“Environmental Actions” means any complaint, summons, citation, notice of
violation, directive, order, claim, litigation, investigation, judicial or
administrative proceeding, judgment, letter or other written communication from
any Person or Governmental Authority involving violations of Environmental Laws
or Releases of Hazardous Materials (i) from any assets, properties or businesses
owned or operated by any Loan Party or any of its Subsidiaries or any corporate
predecessor; or (ii) onto any facilities which received Hazardous Materials
generated by any Loan Party or any of its Subsidiaries or any corporate
predecessor.

 

“Environmental Laws” means the Comprehensive Environmental Response,
Compensation and Liability Act (“CERCLA”), 42 U.S.C. 9601 et seq., as amended;
the Resource Conservation and Recovery Act (“RCRA”), 42 U.S.C. 6901 et seq., as
amended; the Clean Air Act (“CAA”), 42 U.S.C. 7401 et seq., as amended; the
Clean Water Act (“CWA”), 33 U.S.C. 1251 et seq., as amended; the Occupational
Safety and Health Act (“OSHA”), 29 U.S.C. 655 et seq., as amended; the Federal
Mine Safety & Health Act of 1977 (“MSHA”), 30 U.S.C. 801 et seq., as amended;
Toxic Substances Control Act (“TSCA”), 15 U.S.C. 2601 et seq., as amended;
Hazardous Materials Transportation Act, 49 U.S.C. 5101 et seq., as amended; the
Federal Insecticide, Fungicide, and Rodenticide Act (“FIFRA”), 7 U.S.C. 136-136y
et seq., as amended; the Emergency Planning and Community Right-to-Know Act of
1986 (Title III of SARA or “EPCRA”); 42 U.S.C. 11001, et seq., as amended, and
any other foreign, federal, state, local or municipal laws, statutes,
regulations, guidance documents, rules having the force of law or ordinances
imposing liability or establishing standards of conduct for the Release or
Handling of Hazardous Materials and the protection of the health, safety and the
environment.

 

“Environmental Liabilities and Costs” means any monetary obligations, losses,
liabilities (including strict liability), damages, punitive damages,
consequential damages, treble damages, costs and expenses (including all
reasonable out-of-pocket fees, disbursements and expenses of counsel,
out-of-pocket expert and consulting fees and out-of-pocket costs for
environmental site assessments, remedial investigation and feasibility studies),
fines, penalties, sanctions and interest incurred as a result of any
Environmental Action brought by any Governmental Authority, Person or any third
party which relate to any violations of Environmental Laws, Handling of
Hazardous Materials, Remedial Actions, Releases or threatened Releases of
Hazardous Materials from or onto (i) any property presently or formerly owned by
any Loan Party or any of its Subsidiaries or a corporate predecessor, or (ii)
any facility

 

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that received Hazardous Materials that were generated or Handled by any Loan
Party or any of its Subsidiaries or a corporate predecessor.

 

“Environmental Lien” means any Lien in favor of any Governmental Authority for
Environmental Liabilities and Costs.

 

“Environmental Permits” means any permits, licenses, certificates, exemptions,
authorizations, registrations or approvals required by any Governmental
Authority or under Environmental Laws.

 

“Equipment” means all of each Loan Party’s now owned or hereafter acquired
right, title, and interest with respect to equipment, machinery, machine tools,
motors, furniture, furnishings, fixtures, vehicles (including motor vehicles),
tools, parts, goods (other than consumer goods, farm products, or Inventory),
wherever located, including all attachments, accessories, accessions,
replacements, substitutions, additions, and improvements to any of the
foregoing.

 

“Erie Navigation” has the meaning specified therefore in the preamble hereto.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and any successor statute of similar import, and regulations thereunder, in each
case, as in effect from time to time. References to sections of ERISA shall be
construed also to refer to any successor sections.

 

“ERISA Affiliate” means, with respect to any Person, any trade or business
(whether or not incorporated) which is a member of a group of which such Person
is a member and which would be deemed to be a “controlled group” within the
meaning of Sections 414(b), (c), (m) and (o) of the Internal Revenue Code.

 

“Event of Default” means any of the events set forth in Section 10.01.

 

“Excess Amount” has the meaning specified therefor in Section 8.02(g).

 

“Excess Availability” means, at any time, the difference between (i)
Availability and (ii) the sum of (A) the aggregate outstanding principal amount
of all Revolving Loans, and (B) the then outstanding Letter of Credit
Obligations.

 

“Excess Cash Flow” means, with respect to any Person for any period, (i)
Consolidated EBITDA of such Person and its Subsidiaries, for such period, less
(ii) the sum of (A) all scheduled, voluntary and mandatory cash principal
payments on the Loans made during such period (but, in the case of the Revolving
Loans, only to the extent that the Total Revolving Credit Commitment is
permanently reduced by the amount of such payments), and all cash principal
payments on other Indebtedness of such Person or any of its Subsidiaries during
such period to the extent such other Indebtedness is permitted to be incurred,
and such payments are permitted to be made, under this Agreement, (B) the cash
portion of Capital Expenditures made by such Person and its Subsidiaries during
such period to the extent permitted to be made under this Agreement, (C) in the
case of the Parent, dividends paid by the Parent in cash on the Preferred Stock
during such period, to the extent permitted to be paid under this Agreement, (D)

 

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in the case of the Parent, the MLO Payments, (E) income tax expense of such
Person and its Subsidiaries to the extent paid in cash during such period, and
(F) interest expense of such Person and its Subsidiaries to the extent paid in
cash during such period, plus (iii) foreign, United States, state or local tax
refunds received by such Person or any of its Subsidiaries during such period.

 

“Excess Cash Flow Payment” has the meaning specified therefor in Section
2.05(c)(ii).

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Excluded Equity Proceeds” means the Net Cash Proceeds received by any Loan
Party or any of its Subsidiaries arising from the sale or issuance by the Parent
of any shares of its Capital Stock that are not required to be used to prepay
the Loans pursuant to Section 2.05(c)(vi)(B).

 

“Existing DIP Agents” means Foothill, in its capacity as the administrative
agent to the Existing DIP Lenders, and Silver Point, in its capacity as the
collateral agent, syndication agent and lead arranger to the Existing DIP
Lenders.

 

“Existing DIP Credit Agreement” means the Financing Agreement, dated as of July
13, 2004, among the Existing DIP Loan Parties, the Existing DIP Lenders, the
Existing DIP Agents, and JPMorgan Chase Bank and Bank of America, N.A., in their
capacities as documentation agents to the Existing DIP Lenders, as the same has
been amended prior to the date hereof.

 

“Existing DIP Credit Facility” means the facility provided pursuant to the
Existing DIP Credit Agreement.

 

“Existing DIP Lenders” means the lenders party to the Existing DIP Credit
Agreement.

 

“Existing DIP Loan Parties” means the borrowers and guarantors party to the
Existing DIP Credit Agreement.

 

“Existing Letters of Credit” has the meaning specified therefor in Section
3.03(d).

 

“Extraordinary Receipts” means any cash received by the Borrowers or any of
their Subsidiaries outside of the ordinary course of business (and not
consisting of proceeds described in Section 2.05(c)(v)), including, without
limitation, (i) pension plan reversions, (ii) proceeds of insurance but
excluding insurance proceeds (A) designated for payments of claims and defense
costs arising from personal injury claims, (B) received from run-off estates or
(C) received in exchange for policy limits for the purpose of providing
liquidation, (iii) judgments, proceeds of settlements or other consideration of
any kind in connection with any cause of action, (iv) condemnation awards (and
payments in lieu thereof), (v) indemnity payments and (vi) any purchase price
adjustment received in connection with any purchase agreement, provided that the
term “Extraordinary Receipts” shall not include (x) foreign, United States,
state or local tax refunds and (y) any cash received by the Borrowers or any of
their Subsidiaries

 

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outside of the ordinary course of business with respect to which such Person has
a corresponding bona-fide obligation to pay such cash to a non-affiliated
Person.

 

“Facility” means each parcel of real property identified as a “Facility” on
Schedule 7.01(o) that is owned or leased by a Loan Party on the Effective Date,
including, without limitation, the land on which such facility is located, all
buildings and other improvements thereon, and all fixtures located at or used in
connection with such facility, all whether now or hereafter existing.

 

“Federal Funds Rate” means, for any period, a fluctuating interest rate per
annum equal to, for each day during such period, the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of the
quotations for such day on such transactions received by the Administrative
Agent from three Federal funds brokers of recognized standing selected by it.

 

“Fee Letter” means the Fee Letter, dated as of the Effective Date, addressed to
the Collateral Agent and the Administrative Agent.

 

“Financial Statements” means (i) the audited consolidated balance sheet of the
Parent and its Subsidiaries for the Fiscal Year ended December 31, 2003, and the
related consolidated statement of operations, shareholders’ equity and cash
flows for the Fiscal Year then ended and (ii) the unaudited consolidated balance
sheet of the Parent and its Subsidiaries for the eleven-month period ended
November 30, 2004, and the related consolidated statement of operations and cash
flow for the period then ended.

 

“First Preferred Ship Mortgages” means the first preferred ship mortgages, in
form and substance reasonably satisfactory to the Agents, executed and delivered
by a Borrower to the Collateral Agent with respect to each of the Eligible
Vessels.

 

“Fiscal Year” means the fiscal year of the Parent and its Subsidiaries ending on
December 31 of each year.

 

“Fixed Charge Coverage Ratio” means, with respect to any Person for any period,
the ratio of (i) Consolidated EBITDA of such Person and its Subsidiaries for
such period, to (ii) the sum of (A) all principal of Indebtedness of such Person
and its Subsidiaries scheduled to be paid or prepaid during such period to the
extent there is an equivalent permanent reduction in the commitments thereunder,
plus (B) interest expense paid or payable in cash by such Person and its
Subsidiaries for such period, plus (C) income taxes paid or payable by such
Person and its Subsidiaries during such period, plus (D) cash dividends or
distributions paid by such Person and its Subsidiaries (other than, in the case
of any Loan Party, dividends or distributions paid by such Loan Party to any
other Loan Party) during such period, plus (E) MLO Payments made by such Person
and its Subsidiaries during such period. In determining the Fixed Charge
Coverage Ratio for a particular period pro forma effect will be given to: (1)
the incurrence, repayment or retirement of any Indebtedness by such Person and
its Subsidiaries since the first day of such period as if such Indebtedness was
incurred, repaid or retired on the first day of such period and

 

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(2) the acquisition (whether by purchase, merger or otherwise) or disposition
(whether by sale, merger or otherwise) of any property or assets acquired or
disposed of by such Person and its Subsidiaries since the first day of such
period, as if such acquisition or disposition occurred on the first day of such
period.

 

“Foothill” has the meaning specified therefor in the preamble hereto.

 

“GAAP” means generally accepted accounting principles in effect from time to
time in the United States, applied on a basis consistent with that used by the
Borrowers in the Financial Statements, provided that for the purpose of Section
8.03 hereof and the definitions used therein, “GAAP” shall mean generally
accepted accounting principles in effect on the date hereof and consistent with
those used in the preparation of the Financial Statements.

 

“Governmental Authority” means any nation or government, any federal, state,
city, town, municipality, county, local or other political subdivision thereof
or thereto and any department, commission, board, bureau, instrumentality,
agency or other entity exercising executive, legislative, judicial, taxing,
regulatory or administrative powers or functions of or pertaining to government
applicable to the assets or operations of any Loan Party.

 

“Guaranteed Obligations” has the meaning specified therefor in Section 12.01.

 

“Guarantor” means (i) each Subsidiary of the Parent listed as a “Guarantor” on
the signature pages hereto, and (ii) each other Person which guarantees,
pursuant to Section 8.01(b)or otherwise, all or any part of the Obligations.

 

“Guaranty” means (i) the guaranty of each Guarantor party hereto contained in
ARTICLE XII hereof, and (ii) each guaranty substantially in the form of Exhibit
A, made by any other Guarantor in favor of the Agents and the Lenders pursuant
to Section 8.01(b) or otherwise.

 

“Handle” means any manner of generating, accumulating, storing, treating,
disposing of, transporting, transferring, labeling, handling, manufacturing or
using, as any of such terms may further be defined in any Environmental Law, any
Hazardous Materials.

 

“Hazardous Material” means (a) any element, compound or chemical that is defined
or regulated as a contaminant, pollutant, toxic pollutant, toxic or hazardous
substance, extremely hazardous substance or hazardous waste or special waste
under Environmental Laws or which is present in the environment in such quantity
or state that it contravenes any Environmental Law; (b) petroleum and its
refined products; (c) polychlorinated biphenyls; (d) any substance exhibiting a
hazardous waste characteristic, including, without limitation, corrosivity,
ignitability, toxicity or reactivity as well as any radioactive or explosive
materials; and (e) any asbestos containing materials.

 

“Hedging Agreement” means any interest rate, foreign currency, commodity or
equity swap, collar, cap, floor or forward rate agreement, or other agreement or
arrangement designed to protect against fluctuations in interest rates or
currency, commodity or equity values (including, without limitation, any option
with respect to any of the foregoing and any combination of the foregoing
agreements or arrangements), and any confirmation executed in connection with
any such agreement or arrangement.

 

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“Highest Lawful Rate” means, with respect to any Agent or any Lender, the
maximum non-usurious interest rate, if any, that at any time or from time to
time may be contracted for, taken, reserved, charged or received on the
Obligations under laws applicable to such Agent or such Lender which are
currently in effect or, to the extent allowed by law, under such applicable laws
which may hereafter be in effect and which allow a higher maximum non-usurious
interest rate than applicable laws now allow.

 

“Indebtedness” means, with respect to any Person, without duplication, (i) all
indebtedness of such Person for borrowed money; (ii) all obligations of such
Person for the deferred purchase price of property or services, including
earn-outs (other than (x) trade payables or other accounts payable incurred in
the ordinary course of such Person’s business and not outstanding for more than
60 days past the original due date, and (y) up to $2,500,000 of trade payables
or other accounts payable incurred in the ordinary course of such Person’s
business and outstanding for more than 60 days past the original due date
(including such amounts in dispute)); (iii) all obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments or upon which
interest payments are customarily made; (iv) all reimbursement, payment or other
obligations and liabilities of such Person created or arising under any
conditional sales or other title retention agreement with respect to property
used and/or acquired by such Person, even though the rights and remedies of the
lessor, seller and/or lender thereunder may be limited to repossession or sale
of such property; (v) the principal portion of all Capitalized Lease Obligations
of such Person; (vi) all obligations and liabilities, contingent or otherwise,
of such Person, in respect of letters of credit, acceptances and similar
facilities; (vii) all net obligations and liabilities, calculated in accordance
with accepted practice, of such Person under Hedging Agreements; (viii) all
Contingent Obligations; and (ix) all obligations referred to in clauses (i)
through (viii) of this definition of another Person secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) a Lien upon property owned by such Person, even though such
Person has not assumed or become liable for the payment of such Indebtedness.
The Indebtedness of any Person shall include the Indebtedness of any partnership
of or joint venture in which such Person is a general partner or a joint
venturer to the extent such Person is liable for such Indebtedness.

 

“Indemnified Matters” has the meaning specified therefor in Section 13.15.

 

“Indemnitees” has the meaning specified therefor in Section 13.15.

 

“Insolvency Proceeding” means any proceeding commenced by or against any Person
under any provision of the Bankruptcy Code or under any other bankruptcy or
insolvency law, assignments for the benefit of creditors, formal or informal
moratoria, compositions, or extensions generally with creditors, or proceedings
seeking reorganization, arrangement, or other similar relief.

 

“Intercompany Obligations” has the meaning specified therefor in Section 12.06.

 

“Interest Period” means, with respect to any LIBOR Rate Loan, the period
commencing on the borrowing date or the date of any continuation of such LIBOR
Rate Loan, as the case may be, and ending one, two or three months thereafter,
in each case as selected by the Administrative Borrower in the applicable notice
given to the Administrative Agent pursuant to

 

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Sections 2.02 or 2.11 hereof, provided that (i) any Interest Period that would
otherwise end on a day that is not a Business Day shall be extended to the next
succeeding Business Day, unless such Business Day falls in another calendar
month, in which case such Interest Period shall end on the next preceding
Business Day and (ii) no Interest Period for any LIBOR Rate Loan shall end after
the Maturity Date.

 

“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended, (or
any successor statute thereto) and the regulations thereunder.

 

“Inventory” means “inventory” (as such term is defined in Article 9 of the
Uniform Commercial Code).

 

“L/C Issuer” means Wells Fargo, or such other bank as the Administrative Agent
may select in its sole and absolute discretion after consulting with the
Administrative Borrower.

 

“L/C Subfacility” means that portion of the Total Revolving Credit Commitment
equal to $20,000,000.

 

“Lease” means any lease of real property to which any Loan Party or any of its
Subsidiaries is a party as lessor or lessee.

 

“Lender” and “Lenders” have the respective meanings specified therefor in the
preamble hereto.

 

“Letter of Credit Accommodations” has the meaning specified therefor in Section
3.01(a) .

 

“Letter of Credit Application” has the meaning specified therefor in Section
3.01(a).

 

“Letter of Credit Collateral Account” means a deposit account (which may be
non-interest bearing and may contain funds of the Administrative Agent) with a
bank acceptable to the Administrative Agent, which account shall be under the
sole dominion and control of the Collateral Agent or the Administrative Agent
and subject to a perfected, first priority security interest in favor of the
Collateral Agent or the Administrative Agent, for the benefit of the Agents and
the Lenders.

 

“Letter of Credit Fees” have the meaning specified therefor in Section
3.03(b)(i).

 

“Letter of Credit Guaranty” means one or more guaranties, indemnities,
participations or arrangements by the Administrative Agent in favor of the L/C
Issuer pursuant to which the Administrative Agent guarantees or otherwise is
liable for the Borrowers’ obligations to the L/C Issuer or guarantees or relates
to the Borrowers’ obligations to the L/C Issuer under a reimbursement agreement,
Letter of Credit Application or other document in respect of any Letter of
Credit Accommodation.

 

“Letter of Credit Obligations” means, at any time and without duplication, the
sum of (i) the Reimbursement Obligations at such time, plus (ii) all amounts for
which the

 

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Administrative Agent may be liable with respect to Letter of Credit
Accommodations outstanding at such time, plus (iii) all amounts for which the
Administrative Agent may be liable to the L/C Issuer pursuant to any Letter of
Credit Guaranty.

 

“Liabilities” has the meaning specified therefor in Section 2.07.

 

“LIBOR” means the rate per annum, determined by the Administrative Agent in
accordance with its customary procedures, and utilizing Bloomberg Reporting
Service or, if Bloomberg Reporting Service is unavailable, such other electronic
or other quotation sources as it considers appropriate (rounded upwards, if
necessary, to the next 1/100%), to be the rate at which Dollar deposits (for
delivery on the first day of the requested Interest Period) are offered to major
banks in the London interbank market 2 Business Days prior to the commencement
of the requested Interest Period, for a term and in an amount comparable to the
Interest Period and the amount of the LIBOR Rate Loan requested (whether as an
initial LIBOR Rate Loan or as a continuation of a LIBOR Rate Loan or as a
conversion of a Reference Rate Loan to a LIBOR Rate Loan) by the Administrative
Borrower in accordance with this Agreement, which determination shall be
conclusive in the absence of manifest error.

 

“LIBOR Rate” means, for each Interest Period for each LIBOR Rate Loan, the rate
per annum determined by the Administrative Agent (rounded upwards if necessary,
to the next 1/100%) by dividing (a) LIBOR for such Interest Period by (b) 100%
minus the Reserve Percentage. The LIBOR Rate shall be adjusted on and as of the
effective day of any change in the Reserve Percentage.

 

“LIBOR Rate Loan” means a Loan bearing interest calculated based upon the LIBOR
Rate.

 

“Lien” means any mortgage, deed of trust, pledge, lien (statutory or otherwise),
security interest, charge or other encumbrance or security or preferential
arrangement of any nature, including, without limitation, any conditional sale
or title retention arrangement, any Capitalized Lease and any assignment,
deposit arrangement or financing lease intended as, or having the effect of,
security.

 

“Loan” means a loan made by a Lender to the Borrowers pursuant to Section 2.02,
and includes, without limitation, the Revolving Loans, the Term Loan A and the
Term Loan B.

 

“Loan Account” means an account maintained hereunder by the Administrative Agent
on its books of account at the Payment Office, and with respect to the
Borrowers, in which the Borrowers will be charged with all Loans made to, and
all other Obligations incurred by, the Borrowers, and may include sub-accounts
for each of the Revolving Loans, the Term Loan A and the Term Loan B.

 

“Loan Document” means this Agreement, any Guaranty, any Security Agreement, any
Pledge Agreement, any Mortgage, the Contribution Agreement, any First Preferred
Ship Mortgage, any Second Preferred Ship Mortgage, any Cash Management
Agreement, any Concentration Account Agreement, the Fee Letter, the Disbursement
Letter, any promissory notes made by the Borrowers in favor of any Lender, any
Letter of Credit Application and any other agreement, instrument, and other
document executed and delivered pursuant hereto or

 

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thereto or otherwise evidencing or securing any Loan, any Letter of Credit
Obligation or any other Obligation.

 

“Loan Party” means any Borrower and any Guarantor.

 

“Local Bank Accounts” means each bank account of each Loan Party identified
under the heading “Local Bank Account” on Schedule 7.01(u) hereto.

 

“Management Stock Plan” means the 2005 Management Stock Plan of the Parent,
implemented as of the effective date of the Plan of Reorganization.

 

“Marine Services” has the meaning specified therefor in the preamble hereto.

 

“Material Adverse Effect” means a material adverse effect on any of (i) the
operations, business, assets, properties or condition (financial or otherwise)
of the Loan Parties taken as a whole, (ii) the ability of any Loan Party to
perform any of its material obligations under any Loan Document to which it is a
party, (iii) the legality, validity or enforceability of this Agreement or any
other Loan Document, (iv) the rights and remedies of any Agent or any Lender
under any Loan Document, or (v) the validity, perfection or priority of a Lien
in favor of the Collateral Agent for the benefit of the Agents and the Lenders
on any of the Collateral with an aggregate fair market value in excess of
$1,000,000.

 

“Material Contract” means, (i) with respect to any Loan Party, (A) each contract
or agreement to which such Loan Party is a party involving aggregate
consideration payable to or by such Loan Party of $5,000,000 or more in any
calendar year (other than purchase orders in the ordinary course of the business
of such Loan Party and other than contracts that by their terms may be
terminated by such Loan Party in the ordinary course of its business upon less
than 60 days’ notice without penalty or premium) and (B) all other contracts or
agreements material to the business, operations, condition (financial or
otherwise), performance or properties of the Loan Parties taken as a whole,
provided that the term “Material Contract” shall not include any Benefit Plan.

 

“Maturity Date” means January 31, 2010 or such earlier date on which all Loans
shall become due and payable in accordance with the terms of this Agreement and
the other Loan Documents.

 

“Mica Business” means the Loan Parties’ mica mining and processing business.

 

“MLO Amendment” means the Amendment No. 1 to the MLO Contract, dated on or about
the date hereof, by and among the Parent, Johnson Mining Inc., The Cary Mining
Company Inc., Michigan Minerals Associates, Inc. and Michigan Limestone
Operations, Inc.

 

“MLO Contract” means the Interest Purchase Agreement, dated as of April 14,
2000, by and among the Parent and Johnson Mining Inc., The Cary Mining Company
Inc., Michigan Minerals Associates, Inc. and Michigan Limestone Operations
Limited Partnership, as the same may have been amended or modified on or prior
to the Effective Date, and as amended by the MLO Amendment and as further
amended or otherwise modified in accordance with the terms hereof.

 

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“MLO Guaranty” means the Guaranty, dated on or about the date hereof, made by
certain Subsidiaries of the Parent in favor of Johnson Mining Inc., The Cary
Mining Company Inc. and Michigan Minerals Associates, Inc. and executed in
connection with the MLO Contract.

 

“MLO Payments” means earn-out payments made pursuant to the MLO Contract, as in
effect on the Effective Date.

 

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

 

“Mortgage” means a mortgage (including, without limitation, a leasehold
mortgage), deed of trust or deed to secure debt, in form and substance
reasonably satisfactory to the Agents, made by a Loan Party in favor of the
Collateral Agent for the benefit of the Agents and the Lenders, securing the
Obligations and delivered to the Collateral Agent pursuant to Section 6.02(e),
Section 6.01(e)(iii), Section 8.01(b), Section 8.01(n) or otherwise.

 

“Multiemployer Plan” means a “multiemployer plan” as defined in Section
4001(a)(3) of ERISA to which any Loan Party or any of its ERISA Affiliates has
contributed to, or has been obligated to contribute, at any time during the
preceding six (6) years.

 

“Net Amount of Eligible Accounts” means the aggregate unpaid invoice amount of
Eligible Accounts less, without duplication, sales, excise or similar taxes,
returns, discounts, chargebacks, claims, advance payments, credits and
allowances of any nature at any time issued, owing, granted, outstanding,
available or claimed with respect to such Eligible Accounts.

 

“Net Cash Proceeds” means, (i) with respect to any Disposition by any Person or
any of its Subsidiaries, the amount of cash received (directly or indirectly)
from time to time (whether as initial consideration or through the payment or
disposition of deferred consideration) by or on behalf of such Person or such
Subsidiary, in connection therewith after deducting therefrom only (A) the
amount of any Indebtedness secured by any Lien permitted by Section 8.02(a) on
any asset (other than Indebtedness assumed by the purchaser of such asset) which
is required to be, and is, repaid in connection with such Disposition (other
than Indebtedness under this Agreement), (B) expenses related thereto incurred
by such Person or such Subsidiary in connection therewith, (C) transfer taxes
paid to any taxing authorities by such Person or such Subsidiary in connection
therewith, (D) net income taxes to be paid or reasonably expected to be paid in
connection with such Disposition (after taking into account any tax credits or
deductions directly arising from or as a result of such Disposition and any tax
sharing arrangements), and (E) any reserves for adjustments in respect of the
sale price of such assets and for future liabilities established in accordance
with GAAP and (ii) with respect to the issuance or incurrence of any
Indebtedness by any Person or any of its Subsidiaries, or the sale or issuance
by any Person or any of its Subsidiaries of any shares of its Capital Stock, the
aggregate amount of cash received (directly or indirectly) from time to time
(whether as initial consideration or through the payment or disposition of
deferred consideration) by or on behalf of such Person or such Subsidiary in
connection therewith, after deducting therefrom only (A) expenses related
thereto incurred by such Person or such Subsidiary in connection therewith, (B)
transfer taxes paid by such Person or such Subsidiary in connection therewith
and (C) net income taxes to be paid in connection therewith (after taking into
account any tax credits or deductions and any tax sharing arrangements); in the
case of each of clauses (i) and (ii) above, to the extent, but only to

 

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the extent, that the amounts so deducted are (x) actually paid to a Person that,
except in the case of out-of-pocket expenses, is not an Affiliate of such Person
or any of its Subsidiaries and (y) properly attributable to such transaction or
to the asset that is the subject thereof.

 

“Net Orderly Liquidation Percentage” means the percentage of the Book Value of
the Designated Borrowers’ Eligible Inventory that is estimated to be recoverable
by the Administrative Agent in an orderly liquidation of such Eligible
Inventory, net of all of the expenses of such liquidation, such percentage to be
as determined from time to time by a qualified appraisal company selected by the
Administrative Agent in its reasonable credit judgment.

 

“New Lending Office” has the meaning specified therefor in Section 2.08(d).

 

“Non-U.S. Lender” has the meaning specified therefor in Section 2.08(d).

 

“Notice of Borrowing” has the meaning specified therefor in Section 2.02(a).

 

“Obligations” means all present and future indebtedness, obligations, and
liabilities of each Loan Party to the Agents and the Lenders, whether or not the
right of payment in respect of such claim is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, disputed, undisputed, legal,
equitable, secured, unsecured, and whether or not such claim is discharged,
stayed or otherwise affected by any proceeding referred to in Section 10.01,
which arise under, out of, or in connection with, this Agreement, any other Loan
Document, the Letter of Credit Accommodations, or any other document made,
delivered or given in connection herewith or therewith. Without limiting the
generality of the foregoing, the Obligations of each Loan Party under the Loan
Documents include (a) the obligation to pay principal, interest (including any
interest that, but for the provisions of the Bankruptcy Code, would have
accrued), the Applicable Prepayment Premium, charges, reasonable expenses, fees
(including any fees that, but for the provisions of the Bankruptcy Code, would
have accrued), attorneys’ fees and disbursements, indemnities and other amounts
payable by such Person under the Loan Documents, (b) the obligation of such
Person to reimburse any amount in respect of any of the foregoing that any Agent
or any Lender (in its sole discretion) may, in accordance with the terms of this
Agreement, elect to pay or advance on behalf of such Person and (c) all Banking
Services Obligations. Any reference in this Agreement or in the Loan Documents
to the Obligations shall include all amendments, changes, extensions,
modifications, renewals, replacements, substitutions and supplements thereto and
thereof, as applicable, both prior and subsequent to any Insolvency Proceeding.

 

“Operating Lease Obligations” means all obligations for the payment of rent for
any real or personal property under leases or agreements to lease, other than
Capitalized Lease Obligations.

 

“Other Taxes” has the meaning specified therefor in Section 2.08(b).

 

“Overadvance” has the meaning specified therefor in Section 2.05(c)(i).

 

“Paid in Full” means (i) the Total Commitments shall have been terminated, (ii)
all principal of the Loans, interest thereon and all other Obligations shall
have been paid in

 

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full in cash (other than contingent obligations or indemnification obligations
for which no claim has been asserted) (and specifically including interest, fees
and expenses accrued after, or which would be accrued but for, the commencement
of any Insolvency Proceeding), and (iii) the Administrative Agent shall have
received cash collateral (or, at the Administrative Agent’s option, a letter of
credit issued for the account of the Borrowers and at the Borrowers’ expense in
form and substance reasonably satisfactory to the Administrative Agent, by an
issuer reasonably acceptable to the Administrative Agent and payable to the
Administrative Agent as beneficiary) in such amounts as the Administrative Agent
determines are reasonably necessary to secure the Administrative Agent and the
Lenders from loss, cost, damage or expense, including reasonable attorneys’ fees
and expenses, in connection with outstanding Letter of Credit Accommodations and
checks, remittances or other similar payments provisionally credited to the
Obligations and/or as to which the Administrative Agent or any Lender has not
yet received final payment in full and in cash, whether or not any of the
foregoing would be or is allowed or disallowed in whole or in party in any
Insolvency Proceeding. All Letter of Credit Accommodations shall be cash
collateralized (or supported by a letter of credit as described in the preceding
sentence) by an amount equal to one hundred five percent (105%) of the face
amount of the Letter of Credit Accommodations then existing.

 

“Participant Register” has the meaning specified therefor in Section
13.07(b)(v).

 

“Payment Office” means the Administrative Agent’s office located at One Boston
Place, Suite 1800, Boston, Massachusetts 02108, or at such other office or
offices of the Administrative Agent as may be designated in writing from time to
time by the Administrative Agent to the other Agents and the Administrative
Borrower.

 

“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.

 

“Permitted Acquisition” means an Acquisition consummated by a Borrower, provided
that each of the following conditions are satisfied:

 

(a) no Default or Event of Default shall exist immediately prior to or shall
have occurred and be continuing or would result from the consummation of the
proposed Acquisition;

 

(b) (i) the assets being acquired are useful in the business of the Borrowers
and are located within the United States or, subject to Section 8.02(w), Canada
and/or Mexico, or (ii) the Person whose Capital Stock is being acquired is
engaged in the same line of business of the Borrowers and is organized within
the United States, as applicable;

 

(c) the Parent has provided the Agents with written confirmation, supported by
reasonably detailed calculations, that on a pro forma basis, created by adding
the historical combined financial statements of the Parent (including the
combined financial statements of any other Person or assets that were the
subject of a prior Permitted Acquisition during the relevant period) to the
historical consolidated financial statements of the Person to be acquired (or
the historical financial statements related to the assets to be acquired)
pursuant to the proposed Acquisition (adjusted to eliminate expense items that
would not have been incurred and include

 

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income items that would have been recognized, in each case, if the combination
had been accomplished at the beginning of the relevant period; such eliminations
and inclusions to be mutually agreed upon by the Parent and the Agents), the
Parent and its Subsidiaries would have been in compliance with the financial
covenants set forth in Section 8.03 hereof for the 12 months ending as of the
fiscal quarter of Parent ended immediately prior to the proposed date of
consummation of such proposed Acquisition for which there are available
financial statements;

 

(d) in the case of an Asset Acquisition, the assets are being acquired by a
Borrower, and the applicable Borrower shall have executed and delivered or
authorized, as applicable, any and all security agreements, financing
statements, fixture filings, and other documentation reasonably requested by the
Collateral Agent in order to include the newly acquired assets within the
collateral hypothecated under the Loan Documents;

 

(e) in the case of a Stock Acquisition, (i) the Capital Stock is being acquired
in such Acquisition directly by a Borrower, (ii) the relevant Borrower shall
have executed and delivered a pledge agreement with respect to the Capital Stock
being acquired and shall have delivered to the Collateral Agent possession of
the original Capital Stock certificates representing all of the issued and
outstanding shares of Capital Stock of such acquired Person, together with stock
powers with respect thereto endorsed in blank, and (iii) the relevant Borrower
shall have caused such acquired Person to execute and deliver a joinder to
either this Agreement as a Borrower or a Guarantor and/or a Guaranty (in the
sole discretion of Collateral Agent) in order to make such Person a party hereto
or thereto, together with any and all security agreements, financing statements,
fixture filings, and other documentation reasonably requested by any Agent in
order to cause such acquired Person to be obligated with respect to the
Obligations and to include the assets of the acquired Person within the
collateral hypothecated under the Loan Documents;

 

(f) any Indebtedness or Liens assumed in connection with such Acquisition
constitute Permitted Indebtedness or Permitted Liens, respectively, and (i) no
additional Indebtedness or other liabilities shall be incurred, assumed or
otherwise be reflected on a consolidated balance sheet of the Parent and its
Subsidiaries after giving effect to such Acquisition, and (ii) if any property
is subject to any Lien that is not a Permitted Lien, then concurrently with such
Acquisition such Lien shall be released;

 

(g) such Acquisition shall be consensual and shall have been approved by the
board of directors of the Person whose Capital Stock or assets are proposed to
be acquired and shall not have been preceded by an unsolicited tender offer for
such Capital Stock by, or proxy contest initiated by, the Parent or any of its
Subsidiaries;

 

(h) the Parent shall have delivered (i) projections for the Person whose Capital
Stock or assets are proposed to be acquired, and (ii) updated pro forma
Projections for the Parent and its Subsidiaries evidencing compliance on a pro
forma basis with Section 8.03 hereof for the 12 calendar months following the
date of such Acquisition (on a quarter-by-quarter basis), in form and content
reasonably acceptable to the Agents;

 

(i) Borrowers shall have Excess Availability that equals or exceeds $10,000,000,
both immediately prior to and immediately after giving effect to such
Acquisition;

 

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(j) the Collateral Agent shall be satisfied that all actions necessary to
perfect Collateral Agent’s Liens in the assets or Capital Stock being purchased
in connection with such Acquisition have been taken;

 

(k) the Parent shall have provided each Agent with prior written notice (which
notice shall not be less than 15 days prior to the closing date of such
Acquisition and which notice shall include, without limitation, a reasonably
detailed description of such Acquisition) of such Acquisition, together with
copies of all financial information, financial analysis, documentation and other
information and documentation relating to such acquisition as any Agent shall
reasonably request;

 

(l) on or prior to the date of such Acquisition, each Agent shall have received
copies of the acquisition agreement, related contracts and instruments and all
opinions, certificates, lien search results and other documents reasonably
requested by any Agent, which shall be reasonably satisfactory to each Agent;

 

(m) prior to or concurrently with the closing of such Acquisition, an Authorized
Officer, the Assistant Treasurer or the Vice President of Finance and Accounting
of the Parent shall have delivered to each Agent a certificate as to each of the
items set for in the foregoing clauses (a), (b), (c), (h), and (i); and

 

(n) the Purchase Price for all Permitted Acquisitions shall not exceed
$15,000,000 in the aggregate.

 

“Permitted Discretion” means a determination made in good faith and in the
exercise of reasonable (from the perspective of a secured asset-based lender)
credit judgment.

 

“Permitted Dispositions” means the asset sales described on Schedule 8.02(c).

 

“Permitted Indebtedness” means:

 

(a) any Indebtedness owing to any Agent and any Lender under this Agreement
and/or the other Loan Documents;

 

(b) any Indebtedness set forth on Schedule 8.02(b) and the extension of
maturity, refinancing or modification of the terms thereof; provided, however,
that (i) after giving effect to such extension, refinancing or modification, the
principal amount of, and the rate of interest applicable to, such Indebtedness
is not greater than the principal amount of, and the rate of interest applicable
to, the Indebtedness outstanding immediately prior to such extension,
refinancing or modification, (ii) such extension, refinancing or modification is
otherwise pursuant to terms (other than immaterial terms) that are not less
favorable to the Loan Parties and the Lenders than the terms of the Indebtedness
being extended, refinanced or modified, and (iii) the obligors obligated under
such Indebtedness were obligated under the Indebtedness being extended,
refinanced or modified;

 

(c) Indebtedness evidenced by Capitalized Lease Obligations entered into after
the Effective Date in order to finance Capital Expenditures made by the Loan
Parties in accordance with the provisions of Section 8.02(g), which
Indebtedness, when aggregated with the

 

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principal amount of all Indebtedness incurred under this clause (c) and clause
(d) of this definition, does not exceed $15,000,000 at any time outstanding;

 

(d) Indebtedness secured by a Lien permitted by clause (e) of the definition of
“Permitted Liens”;

 

(e) Indebtedness permitted under Section 8.02(e);

 

(f) Indebtedness of any Loan Party to another Loan Party;

 

(g) unsecured Indebtedness under any Hedging Agreement of any Loan Party entered
into in the ordinary course of business and not for speculative purposes;

 

(h) Indebtedness of any Loan Party in connection with the financing of insurance
premiums incurred in the ordinary course of business;

 

(i) other unsecured Indebtedness of the Loan Parties in an aggregate principal
amount outstanding at any time not exceeding $1,000,000;

 

(j) Indebtedness of any Loan Party pursuant to its obligations under the MLO
Contract;

 

(k) Indebtedness arising under the Vessel Term Loan;

 

(l) Indebtedness (excluding Indebtedness for borrowed money) not to exceed
$1,000,000 in the aggregate outstanding at any time incurred in connection with
the maintenance of deposit accounts with, and the provision of cash management
services by, KeyBank National Association in the ordinary course of business;

 

(m) (i) Indebtedness in respect of performance and surety bonds incurred in the
ordinary course of business and consistent with past practice to the extent such
Indebtedness is fully supported by a Letter of Credit Accommodation, and (ii) in
addition to that provided in subclause (i) of this clause (m), Indebtedness not
to exceed $3,000,000 in the aggregate outstanding at any time in respect of
performance and surety bonds incurred in the ordinary course of business and
consistent with past practice; and

 

(n) Acquired Indebtedness incurred in connection with Permitted Acquisitions in
an aggregate principal amount for all Permitted Acquisitions not to exceed
$10,000,000.

 

“Permitted Investments” means (i) marketable direct obligations issued or
unconditionally guaranteed by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case, maturing within six months from the date of acquisition thereof; (ii)
commercial paper, maturing not more than 270 days after the date of issue rated
P-1 by Moody’s or A-1 by Standard & Poor’s; (iii) certificates of deposit
maturing not more than 270 days after the date of issue, issued by commercial
banking institutions and money market or demand deposit accounts maintained at
commercial banking institutions, each of which is a member of the Federal
Reserve System and

 

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has a combined capital and surplus and undivided profits of not less than
$500,000,000; (iv) repurchase agreements having maturities of not more than 90
days from the date of acquisition which are entered into with major money center
banks included in the commercial banking institutions described in clause (iii)
above and which are secured by readily marketable direct obligations of the
United States Government or any agency thereof, (v) money market accounts
maintained with mutual funds having assets in excess of $2,500,000,000; and (vi)
tax exempt securities rated A or better by Moody’s or A+ or better by Standard &
Poor’s.

 

“Permitted Liens” means:

 

(a) Liens securing the Obligations;

 

(b) Liens for taxes, assessments and governmental charges the payment of which
is not required under Section 8.01(c);

 

(c) Liens imposed by law, such as carriers’, warehousemen’s, mechanics’,
materialmen’s and other similar Liens arising in the ordinary course of business
and securing obligations (other than Indebtedness for borrowed money) that are
not overdue by more than 30 days or are being contested in good faith and by
appropriate proceedings promptly initiated and diligently conducted, and a
reserve or other appropriate provision, if any, as shall be required by GAAP
shall have been made therefor;

 

(d) Liens existing on the Effective Date, (i) as described on Schedule 8.02(a),
but not the extension of coverage thereof to other property or the extension of
maturity, refinancing or other modification of the terms thereof or the increase
of the Indebtedness secured thereby and (ii) securing indebtedness in an amount
not in excess of $1,000,000 in the aggregate;

 

(e) (i) purchase money Liens on equipment acquired or held by any Loan Party or
any of its Subsidiaries after the Effective Date in the ordinary course of its
business to secure the purchase price of such equipment or Indebtedness incurred
solely for the purpose of financing the acquisition of such equipment or (ii)
Liens existing on such equipment at the time of its acquisition; provided,
however, that (A) no such Lien shall extend to or cover any other property of
any Loan Party or any of its Subsidiaries and (B) the aggregate principal amount
of Indebtedness secured by any or all such Liens shall not exceed at any one
time outstanding $5,000,000;

 

(f) deposits and pledges of cash securing (i) obligations incurred in respect of
workers’ compensation, unemployment insurance or other forms of governmental
insurance or benefits, (ii) the performance of bids, tenders, leases, contracts
(other than for the payment of money) and statutory obligations, (iii)
obligations on surety, appeal or reclamation bonds, but only to the extent such
deposits or pledges are incurred or otherwise arise in the ordinary course of
business and secure obligations not past due, or (iv) obligations to any utility
company or other Person in a similar line of business made in the ordinary
course of business and securing obligations not past due;

 

(g) (i) easements, zoning restrictions and similar encumbrances on real
property, irregularities in the title thereto and other matters of record or
revealed in the commitments for title insurance provided to the Collateral Agent
or its counsel prior to the

 

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Effective Date, so long as the foregoing do not (x) secure obligations for the
payment of money or (y) materially impair the value of such property or its use
by any Loan Party or any of its Subsidiaries in the normal conduct of such
Person’s business, (ii) Liens of landlords arising under real property leases of
any Loan Party or any of its Subsidiaries to the extent such Liens arise in the
ordinary course of business and do not secure any past due obligation for the
payment of money, or (iii) with respect to Leases where any Loan Party or any of
its Subsidiaries is a tenant, any Liens on the landlords’ interests in the real
property or such Leases;

 

(h) Liens securing Indebtedness permitted by subsection (c) of the definition of
Permitted Indebtedness;

 

(i) Liens securing Acquired Indebtedness that is permitted pursuant to clause
(n) of the definition of Permitted Indebtedness so long as such Liens attach
only to the property so acquired and do not extend to or cover any other
property of any Loan Party or any of its Subsidiaries;

 

(j) Liens on the Vessels known as “David Z. Norton” and “Wolverine” in order to
secure the Indebtedness arising under the Vessel Term Loan;

 

(k) Liens on unearned insurance premiums and returned insurance premiums
securing the Indebtedness incurred in connection with the financing of insurance
premiums permitted by clause (h) of the definition of “Permitted Indebtedness;

 

(l) Intentionally Omitted;

 

(m) Liens in favor of KeyBank National Association on the investments permitted
under Section 8.02(e)(xi), provided that such Liens are on investments in an
aggregate principal amount (and excluding any accretion in value or interest)
not exceeding $1,000,000 at any time outstanding; and

 

(n) the filing of UCC financing statements in connection with the sale by a Loan
Party of Accounts permitted to be sold under this Agreement, which financing
statements name the purchaser of such Accounts as the secured party.

 

“Person” means an individual, corporation, limited liability company,
partnership, association, joint-stock company, trust, unincorporated
organization, joint venture or other enterprise or entity or Governmental
Authority.

 

“Plan” means any Employee Plan or Multiemployer Plan.

 

“Plan of Reorganization” has the meaning specified therefor in the recitals
hereto.

 

“Pledge Agreement” means a Pledge and Security Agreement made by a Loan Party in
favor of the Collateral Agent for the benefit of the Agents and the Lenders,
substantially in the form of Exhibit G, securing the Obligations and delivered
to the Collateral Agent.

 

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“Pool Agreement” means the Pool Agreement, dated as of January 3, 2002, and
amended and restated on April 1, 2002, by and among Oglebay Marine Services,
American Steamship Company and United Shipping Alliance, LLC.

 

“Post-Default As-Extracted Collateral” shall mean, all As-Extracted Collateral
which is extracted on and after the date which is five (5) Business Days after
the Agents have received a written notice from the Required Term A Lenders that
(A) an Event of Default has occurred and is continuing and (B) the Term Loan A
has been accelerated or is otherwise due.

 

“Post-Default Collateral” shall mean (i) all Post-Default As-Extracted
Collateral and (ii) all Accounts, Inventory and Revolving Loan Intangibles
evidencing or arising from Post-Default As-Extracted Collateral and all Proceeds
of each of the foregoing.

 

“Post-Default Rate” means a rate of interest per annum equal to the rate of
interest otherwise in effect from time to time pursuant to the terms of this
Agreement plus 2.0%, or, if a rate of interest is not otherwise in effect, the
greater of (i) Reference Rate plus 11.75% and (ii) 16.25%.

 

“Preferred Stock” means the Preferred Stock, $0.01 par value per share, of the
Parent.

 

“Pre-Petition Rent Arrearages” has the meaning specified therefor in Section
7.01(o).

 

“Proceeds” means (a) all “proceeds” (as defined in Article 9 of the Uniform
Commercial Code) with respect to the Collateral and (b) whatever is recoverable
or recovered when any Collateral is sold, exchanged, collected, or disposed of,
whether voluntarily or involuntarily.

 

“Projected Consolidated EBITDA” means the Consolidated EBITDA of the Parent and
its Subsidiaries for the period of four (4) consecutive fiscal quarters for
which the last quarter ends on a date set forth on Schedule 8.02(g) set forth
opposite such date.

 

“Pro Rata Share” means:

 

(a) with respect to a Lender’s obligation to make Revolving Loans and receive
payments of interest, fees, and principal with respect thereto, the percentage
obtained by dividing (i) such Lender’s Revolving Credit Commitment, by (ii) the
Total Revolving Credit Commitment, provided, that, if the Total Revolving Credit
Commitment has been reduced to zero, the numerator shall be the aggregate unpaid
principal amount of such Lender’s Loans and its interest in the Letter of Credit
Obligations and the denominator shall be the aggregate unpaid principal amount
of all Revolving Loans and Letter of Credit Obligations,

 

(b) with respect to a Lender’s obligation to make a Term Loan A and receive
payments of interest, fees, and principal with respect thereto, the percentage
obtained by dividing (i) such Lender’s Term Loan A Commitment, by (ii) the Total
Term Loan A Commitment, provided, that, if the Total Term Loan A Commitment has
been reduced to zero, the numerator

 

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shall be the aggregate unpaid principal amount of such Lender’s Term Loan A and
the denominator shall be the aggregate unpaid principal amount of the Term Loan
A,

 

(c) with respect to a Lender’s obligation to make a Term Loan B and receive
payments of interest, fees, and principal with respect thereto, the percentage
obtained by dividing (i) such Lender’s Term Loan B Commitment, by (ii) the Total
Term Loan B Commitment, provided, that, if the Total Term Loan B Commitment has
been reduced to zero, the numerator shall be the aggregate unpaid principal
amount of such Lender’s Term Loan B and the denominator shall be the aggregate
unpaid principal amount of the Term Loan B, and

 

(d) with respect to all other matters (including, without limitation, the
indemnification obligations arising under Section 11.05), the percentage
obtained by dividing (i) the sum of such Lender’s Revolving Credit Commitment,
Term Loan A Commitment and Term Loan B Commitment, by (ii) the sum of the Total
Revolving Credit Commitment, the Total Term Loan A Commitment and the Total Term
Loan B Commitment, provided, that, if any of such Lender’s Revolving Credit
Commitment, Term Loan A Commitment and Term Loan B Commitment shall have been
reduced to zero, such Lender’s Revolving Credit Commitment, Term Loan A
Commitment and Term Loan B Commitment, as the case may be, shall be deemed to be
the aggregate unpaid principal amount of such Lender’s Revolving Loans
(including Agent Advances), Term Loan A or Term Loan B, as the case may be, and
its interest in the Letter of Credit Obligations, and if any of the Total
Revolving Credit Commitment, the Total Term Loan A Commitment or the Total Term
Loan B Commitment shall have been reduced to zero, the Total Revolving Credit
Commitment, the Total Term Loan A Commitment or the Total Term Loan B
Commitment, as the case may be, shall be deemed to be the aggregate unpaid
principal amount of all Revolving Loans (including Agent Advances), the Term
Loan A and the Term Loan B and Letter of Credit Obligations.

 

“Purchase Price” means, with respect to any Permitted Acquisition, an amount
equal to the sum of (i) the aggregate consideration, whether cash, property or
securities (including, without limitation, the fair market value of any Capital
Stock of any Loan Party issued in connection with such Permitted Acquisition),
paid or delivered by a Loan Party in connection with such Permitted Acquisition,
plus (ii) the aggregate amount of all Acquired Indebtedness assumed in
connection with such Permitted Acquisition.

 

“Rating Agencies” has the meaning specified therefor in Section 2.07.

 

“Receivables” means all of the following now owned or hereafter arising or
acquired property of each Loan Party: (i) all Accounts; (ii) all interest, fees,
late charges, penalties, collection fees and other amounts due or to become due
or otherwise payable in connection with any Account; (iii) all payment
intangibles of such Loan Party; (iv) letters of credit, indemnities, guarantees,
security or other deposits and proceeds thereof issued payable to any Loan Party
or otherwise in favor of or delivered to any Loan Party in connection with any
Account; or (v) all other accounts, contract rights, chattel paper, instruments,
notes, general intangibles and other forms of obligations owing to any Loan
Party, whether from the sale and lease of goods or other property, licensing of
any property (including intellectual property or other general intangibles),
rendition of services or from loans or advances by any Loan Party or to or for
the benefit of any third person (including loans or advances to any Affiliates
or

 

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Subsidiaries of any Loan Party) or otherwise associated with any Accounts,
Inventory or general intangibles of any Loan Party (including, without
limitation, choses in action, causes of action, tax refunds, tax refund claims,
any funds which may become payable to any Loan Party in connection with the
termination of any Plan or other employee benefit plan and any other amounts
payable to any Loan Party from any Plan or other employee benefit plan, rights
and claims against carriers and shippers, rights to indemnification, business
interruption insurance and proceeds thereof, casualty or any similar types of
insurance and any proceeds thereof and proceeds of insurance covering the lives
of employees on which any Loan Party is a beneficiary).

 

“Reference Rate” means, the rate of interest announced, from time to time,
within Wells Fargo at its principal office in San Francisco as its “prime rate”,
with the understanding that the “prime rate” is one of Wells Fargo’s base rates
(not necessarily the lowest of such rates) and serves as the basis upon which
effective rates of interest are calculated for those loans making reference
thereto and is evidenced by the recording thereof after its announcement in such
internal publications as Wells Fargo may designate.

 

“Reference Rate Loan” means a Loan bearing interest calculated based upon the
Reference Rate.

 

“Register” has the meaning specified therefor in Section 13.07(b)(ii).

 

“Registered Loan” has the meaning specified therefor in Section 13.07(b)(ii).

 

“Regulation T”, “Regulation U” and “Regulation X” mean, respectively,
Regulations T, U and X of the Board or any successor, as the same may be amended
or supplemented from time to time.

 

“Reimbursement Obligations” means the obligation of the Borrowers to reimburse
the Administrative Agent or any Lender for amounts payable by the Administrative
Agent or any Lender under a Letter of Credit Guaranty in respect of any drawing
made under any letter of credit issued in connection therewith, together with
interest thereon as provided in Section 2.04.

 

“Related Assignee Assignment” has the meaning specified therefor in Section
13.07(b).

 

“Related Assignment” has the meaning specified therefor in Section 13.07(b).

 

“Related Assignor Assignment” has the meaning specified therefor in Section
13.07(b).

 

“Related Fund” means, (a) with respect to any Lender, any Affiliate (other than
individuals) of such Lender, including, without limitation, a fund or account
managed by such Lender or an Affiliate of such Lender or its investment manager,
(b) with respect to Silver Point, (i) any Affiliate (other than individuals) of
Silver Point, including, without limitation, a fund or account managed by Silver
Point or an Affiliate of Silver Point or its investment manager, or (ii) any
Designated Entity, and (c) with respect to any Designated Entity, Silver Point
or any other Designated Entity.

 

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“Release” means any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, seeping, migrating, dumping or
disposing of any Hazardous Material (including the abandonment or discarding of
barrels, containers and other closed receptacles containing any Hazardous
Material) into the indoor or outdoor environment, including, without limitation,
the movement of Hazardous Materials through or in the ambient air, soil, surface
or ground water, or property.

 

“Remedial Action” means all actions taken to (i) clean up, remove, remediate,
contain, treat, monitor, assess, evaluate or in any other way address Hazardous
Materials in the indoor or outdoor environment; (ii) prevent or minimize a
Release or threatened Release of Hazardous Materials so they do not migrate or
endanger or threaten to endanger public health or welfare or the indoor or
outdoor environment; (iii) perform pre-remedial studies and investigations and
post-remedial operation and maintenance activities; or (iv) perform any other
actions authorized by 42 U.S.C. § 9601.

 

“Reportable Event” means an event described in Section 4043 of ERISA (other than
any event for which the provision for 30-days’ notice to the PBGC is waived
under the regulations promulgated under such Section).

 

“Required Lenders” means, at any time, the Required Revolving Loan Lenders, the
Required Term A Lenders and the Required Term B Lenders.

 

“Required Revolving Loan Lenders” means the Revolving Loan Lenders whose
aggregate Pro Rata Shares (calculated under clause (a) of such definition) equal
or exceed 50.1%.

 

“Required Term A Lenders” means the Term Loan A Lenders whose aggregate Pro Rata
Shares (calculated under clause (b) of such definition) equal or exceed 50.1%.

 

“Required Term B Lenders” means the Term Loan B Lenders whose aggregate Pro Rata
Shares (calculated under clause (c) of such definition) equal or exceed 50.1%.

 

“Reserve Percentage” means, on any day, for any Lender, the maximum percentage
prescribed by the Board (or any successor Governmental Authority) for
determining the reserve requirements (including any basic, supplemental,
marginal, or emergency reserves) that are in effect on such date with respect to
eurocurrency funding (currently referred to as “eurocurrency liabilities”) of
that Lender, but so long as such Lender is not required or directed under
applicable regulations to maintain such reserves, the Reserve Percentage shall
be zero.

 

“Revolver Priority Collateral” means (a) Inventory, (b) As-Extracted Collateral,
(c) Accounts that arise from the sale, leasing, licensing, assignment or other
disposition of Inventory or As-Extracted Collateral or the rendition of
services, (d) Revolving Loan Intangibles, (e) Revolving Loan Records, and (f)
all Proceeds and products (whether tangible or intangible) of the foregoing,
including Proceeds of insurance covering any or all of the foregoing, in each
case to the extent they relate to clauses (a) through (e) above, provided, that,
Revolver Priority Collateral shall not include Post-Default Collateral.

 

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“Revolver Priority Collateral Proceeds” means the Proceeds of Revolver Priority
Collateral.

 

“Revolving Credit Commitment” means, with respect to each Lender, the commitment
of such Lender to make Revolving Loans to the Borrowers in the amount set forth
opposite such Lender’s name in Schedule 1.01(A) hereto, as such amount may be
increased, terminated or reduced from time to time in accordance with the terms
of this Agreement.

 

“Revolving Credit Commitment Increase” has the meaning specified therefor in
Section 2.01(c).

 

“Revolving Credit Commitment Increase Period” has the meaning specified therefor
in Section 2.01(c).

 

“Revolving Loan” means a loan made by a Lender to the Borrowers pursuant to
Section 2.01(a)(i).

 

“Revolving Loan Intangibles” means any of any Borrower’s or any of any Loan
Party’s now owned or hereafter acquired contracts, contract rights, licenses,
customer lists and other general intangibles relating to the Accounts, the
Inventory and As-Extracted Collateral, including, without limitation, contract
rights which evidence or support Accounts, choses in action or causes of actions
or claims arising out of Accounts or with respect to Inventory or As-Extracted
Collateral, federal, state, provincial and local sales or value added tax
(including, without limitation, goods and service tax) refund claims of any
kind, agreements or arrangements with sales agents, distributors or the like
and/or consignees, warehouses or other third persons in possession of any of the
Inventory, As-Extracted Collateral, the Cash Management Accounts and
Concentration Accounts (except to the extent of identifiable Term Priority
Collateral Proceeds), letters of credit and letter of credit rights supporting
payment of any Accounts or other obligations included within the Revolver
Priority Collateral, documents which evidence rights to Inventory, instruments
evidencing payment of any Accounts or other obligation included in the other
Revolver Priority Collateral and guaranty or warranty claims with respect to
Accounts or Inventory.

 

“Revolving Loan Lender” means a Lender with a Revolving Credit Commitment, a
Revolving Loan or a Letter of Credit Obligation.

 

“Revolving Loan Records” means, to the extent relating to the other Revolver
Priority Collateral or any account debtor or other person obligated on or in
connection with any of the Accounts, all of each Borrower’s and all of each
other Loan Party’s present and future books of account of every kind or nature,
purchase and sale agreements, invoices, ledger cards, bills of lading and other
shipping evidence, statements, correspondence, memoranda, credit files and other
data, together with the tapes, disks, diskettes and other data and software
storage media and devices, file cabinets or containers in or on which the
foregoing are stored (including any rights of Borrowers and the other Loan
Parties with respect to the foregoing maintained with or by any other person).

 

“Seasonal Pool Accounts Period” means the period commencing March 15 and ending
September 30 of each year.

 

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“SEC” means the Securities and Exchange Commission or any other similar or
successor agency of the Federal government administering the Securities Act.

 

“Second Preferred Ship Mortgages” means the second preferred ship mortgages, in
form and substance reasonably satisfactory to the Agents, executed and delivered
by a Borrower to the Collateral Agent with respect to each Vessel that is not an
Eligible Vessel.

 

“Securities Act” means the Securities Act of 1933, as amended, or any similar
Federal statute, and the rules and regulations of the SEC thereunder, all as the
same shall be in effect from time to time.

 

“Securitization” has the meaning specified therefor in Section 2.07.

 

“Securitization Parties” has the meaning specified therefor in Section 2.07.

 

“Security Agreement” means a Security Agreement made by the Loan Parties in
favor of the Collateral Agent for the benefit of the Agents and the Lenders,
substantially in the form of Exhibit H hereto, securing the Obligations and
delivered to the Collateral Agent.

 

“Senior Secured Noteholders” means the Persons from time to time holding the
Senior Secured Notes.

 

“Senior Secured Note Indenture” means the Senior Secured Note Purchase
Agreement, dated as of October 25, 2002, by and between the Parent, as the
issuer, certain of the Parent’s subsidiaries, as guarantors, and the Senior
Secured Noteholders, as purchasers, as the same has been amended prior to the
date hereof and as it may from time to time be amended, restated or otherwise
modified in accordance with the terms hereof, which Senior Secured Note
Indenture has been reinstated pursuant to the Plan of Reorganization.

 

“Senior Secured Notes” means the Senior Secured Notes, due October 25, 2008,
issued by the Parent to the Senior Secured Noteholders pursuant to the Senior
Secured Note Indenture, in the aggregate original principal amount of
$75,000,000, which Senior Secured Notes have been reinstated pursuant to the
Plan of Reorganization.

 

“Senior Secured Notes Redemption” means the redemption of the Senior Secured
Notes on the Effective Date with the net proceeds of the issuance of the
Preferred Stock, and to the extent necessary, available cash of the Borrowers
and/or the Revolving Loans in accordance with the Plan of Reorganization.

 

“Settlement Period” has the meaning specified therefor in Section 2.02(d)(i).

 

“Significant Subsidiary” means each Subsidiary of the Parent (other than Marine
Services Company) that:

 

(a) accounted for at least 5% of consolidated revenues of the Parent and its
Subsidiaries or 5% of consolidated earnings of the Parent and its Subsidiaries
before interest and taxes, in each case for the fiscal quarter of the Parent
ending on the last day of the last fiscal quarter of the Parent immediately
preceding the date as of which any such determination is made; or

 

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(b) has assets which represent at least 5% of the consolidated assets of the
Parent and its Subsidiaries as at the last day of the last fiscal quarter of the
Parent immediately preceding the date as of which any such determination is
made.

 

“Silver Point” has the meaning specified therefor in the preamble hereto.

 

“Solvent” means, with respect to any Person on a particular date, that on such
date (i) the fair value of the property of such Person is not less than the
total amount of the liabilities of such Person, (ii) the present fair salable
value of the assets of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its existing debts as
they become absolute and matured, (iii) such Person is able to realize upon its
assets and pay its debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business, (iv) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person’s ability to pay as such debts and liabilities
mature, and (v) such Person is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such Person’s
property would constitute unreasonably small capital.

 

“Standard & Poor’s” means Standard & Poor’s Ratings Services, a division of The
McGraw-Hill Companies, Inc. and any successor thereto.

 

“Stock Acquisition” means the purchase or other acquisition by a Borrower of all
of the Capital Stock (by merger, stock purchase or otherwise) of any other
Person.

 

“Subsidiary” means, with respect to any Person at any date, any corporation,
limited or general partnership, limited liability company, trust, estate,
association, joint venture or other business entity (i) the accounts of which
would be consolidated with those of such Person in such Person’s consolidated
financial statements if such financial statements were prepared in accordance
with GAAP or (ii) of which more than 50% of (A) the outstanding Capital Stock
having (in the absence of contingencies) ordinary voting power to elect a
majority of the board of directors or other managing body of such Person, (B) in
the case of a partnership or limited liability company, the interest in the
capital or profits of such partnership or limited liability company or (C) in
the case of a trust, estate, association, joint venture or other entity, the
beneficial interest in such trust, estate, association or other entity business
is, at the time of determination, owned or controlled directly or indirectly
through one or more intermediaries, by such Person.

 

“Term Loan A” means, collectively, the loans made by the Term Loan A Lenders to
the Borrowers on the Effective Date pursuant to Section 2.01(a)(ii).

 

“Term Loan A Commitment” means with respect to each Term Loan A Lender, the
commitment of such Lender to make a Term Loan A to the Borrowers in the amount
set forth in Schedule 1.01(A) hereto, as such amount may be terminated or
reduced from time to time in accordance with the terms of this Agreement.

 

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“Term Loan A Lender” means a Lender with a Term Loan A Commitment (or a Lender
that holds all or any portion of the unpaid principal amount of the Term Loan
A).

 

“Term Loan B” means, collectively, the loans made by the Term Loan B Lenders to
the Borrowers on the Effective Date pursuant to Section 2.01(a)(iii).

 

“Term Loan B Commitment” means with respect to each Term Loan B Lender, the
commitment of such Lender to make a Term Loan B to the Borrowers in the amount
set forth opposite such Lender’s name in Schedule 1.01(A) hereto, as such amount
may be terminated or reduced from time to time in accordance with the terms of
this Agreement.

 

“Term Loan B Lender” means a Lender with a Term Loan B Commitment (or a Lender
that holds all or any portion of the unpaid principal amount of the Term Loan
B).

 

“Term Loans” means, collectively, the Term Loan A and the Term Loan B.

 

“Term Priority Collateral” means all Collateral other than Revolver Priority
Collateral.

 

“Term Priority Collateral Proceeds” means the Proceeds of Term Priority
Collateral.

 

“Termination Event” means (i) a Reportable Event with respect to any Employee
Plan, (ii) any event that causes any Loan Party or any of its ERISA Affiliates
to incur liability under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064,
4069, 4201, 4204 or 4212 of ERISA or Section 4971 or 4975 of the Internal
Revenue Code, (iii) the filing of a notice of intent to terminate an Employee
Plan or the treatment of an Employee Plan amendment as a termination under
Section 4041 of ERISA, (iv) the institution of proceedings by the PBGC to
terminate an Employee Plan, or (v) any other event or condition which might
reasonably constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Employee Plan.

 

“Title Insurance Policy” means a mortgagee’s loan policy, in form and substance
satisfactory to the Agents, together with all endorsements made from time to
time thereto, issued by or on behalf of a title insurance company satisfactory
to the Agents, insuring the Lien created by a Mortgage in an amount and on terms
satisfactory to the Agents, delivered to the Collateral Agent.

 

“Total Commitment” means the sum of the Total Revolving Credit Commitment, the
Total Term Loan A Commitment and the Total Term Loan B Commitment.

 

“Total Revolving Credit Commitment” means the sum of the amounts of the Lenders’
Revolving Credit Commitments.

 

“Total Term Loan A Commitment” means the sum of the amounts of the Lenders’ Term
Loan A Commitments.

 

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“Total Term Loan B Commitment” means the sum of the amounts of the Lenders’ Term
Loan B Commitments.

 

“Transferee” has the meaning specified therefor in Section 2.08(a).

 

“Uniform Commercial Code” has the meaning specified therefor in Section 1.03.

 

“Unused Line Fee” has the meaning specified therefor in Section 2.06(a).

 

“Vessels” means each of the vessels listed on Schedule V-1 hereto and each other
Vessel owned by any Borrower, in each case together with all engines, boilers,
machinery, masts, anchors, cables, rigging, tackle, apparel, furniture, boats,
chains, equipment and all other appurtenances to such vessels whether aboard or
removed from such vessels, together with any and all additions, improvements
and/or replacements which may hereafter be made to, on or in such vessels or any
part thereof.

 

“Vessel Term Loan” means the loan made pursuant to the Vessel Term Loan
Agreement.

 

“Vessel Term Loan Agreement” means, collectively, (a) the Credit Agreement,
dated as of July 14, 1997, by and among ON Marine Services Co. and Marine
Services, as borrowers, and National City Bank, as lenders and (b) all security
agreements and instruments related to the document identified in clause (a), in
each case, as the same may have been amended or modified on or prior to the
Effective Date and as amended or otherwise modified from time to time in
accordance with the terms hereof.

 

“WARN” has the meaning specified therefor in Section 7.01(y).

 

“Warrant Issuance” means the issuance of warrants by the Parent to purchase
Capital Stock of the Parent, provided that such issuance and the receipt by the
Parent of all Net Cash Proceeds in connection therewith shall occur within 60
days of the Effective Date.

 

“Wells Fargo” means Wells Fargo Bank, National Association, a national banking
association.

 

Section 1.02 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 “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,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person’s successors and
assigns, (c) 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, (d) all references herein to Articles,
Sections, Exhibits and

 

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Schedules shall be construed to refer to Articles and Sections of, and Exhibits
and Schedules to, this Agreement and (e) the words “asset” and “property” shall
be construed to have the same meaning and effect and to refer to any right or
interest in or to assets and properties of any kind whatsoever, whether real,
personal or mixed and whether tangible or intangible. References in this
Agreement to “determination” by any Agent (unless the standard is otherwise
expressly specified in this Agreement) include good faith estimates by such
Agent (in the case of quantitative determinations) and good faith beliefs by
such Agent (in the case of qualitative determinations).

 

Section 1.03 Accounting and Other Terms. Unless otherwise expressly provided
herein, each accounting term used herein shall have the meaning given it under
GAAP applied on a basis consistent with those used in preparing the Financial
Statements. All terms used in this Agreement which are defined in Article 8 or
Article 9 of the Uniform Commercial Code as in effect from time to time in the
State of New York (the “Uniform Commercial Code”) and which are not otherwise
defined herein shall have the same meanings herein as set forth therein,
provided that terms used herein which are defined in the Uniform Commercial Code
as in effect in the State of New York on the date hereof shall continue to have
the same meaning notwithstanding any replacement or amendment of such statute
except as any Agent may otherwise determine.

 

Section 1.04 Time References. Unless otherwise indicated herein, all references
to time of day refer to Eastern Standard Time or Eastern daylight saving time,
as in effect in New York City on such day. For purposes of the computation of a
period of time from a specified date to a later specified date, the word “from”
means “from and including” and the words “to” and “until” each means “to but
excluding”; provided, however, that with respect to a computation of fees or
interest payable to any Agent, any Lender or the L/C Issuer, such period shall
in any event consist of at least one full day.

 

ARTICLE II

 

THE LOANS

 

Section 2.01 Commitments. (a) Subject to the terms and conditions and relying
upon the representations and warranties herein set forth:

 

(i) each Revolving Loan Lender severally agrees to make Revolving Loans to the
Borrowers at any time and from time to time from the Effective Date to the
Maturity Date, or until the earlier reduction of its Revolving Credit Commitment
to zero in accordance with the terms hereof, in an aggregate principal amount of
Revolving Loans at any time outstanding not to exceed the amount of such
Lender’s Revolving Credit Commitment;

 

(ii) each Term Loan A Lender severally agrees to make a Term Loan A to the
Borrowers on the Effective Date in an aggregate principal amount not to exceed
the amount of such Lender’s Term Loan A Commitment; and

 

(iii) each Term Loan B Lender severally agrees to make a Term Loan B to the
Borrowers on the Effective Date in an aggregate principal amount not to exceed
the amount of such Lender’s Term Loan B Commitment.

 

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(b) Notwithstanding the foregoing,

 

(i) the aggregate principal amount of Revolving Loans outstanding at any time to
the Borrowers shall not exceed the difference between (A) the then current
Availability, and (B) the aggregate Letter of Credit Obligations;

 

(ii) the Total Revolving Credit Commitment and the Revolving Credit Commitment
of each Lender shall automatically and permanently be reduced to zero on the
Maturity Date;

 

(iii) within the foregoing limits, the Borrowers may borrow, repay and reborrow
Revolving Loans, on or after the Effective Date and prior to the Maturity Date,
subject to the terms, provisions and limitations set forth herein; and

 

(iv) any principal amount of the Term Loan A or the Term Loan B which is repaid
or prepaid may not be reborrowed.

 

(c) The Total Revolving Credit Commitment shall be increased from $55,000,000 to
$65,000,000 (and each Revolving Loan Lender’s Revolving Credit Commitment shall
be increased by its Pro Rata Share (as defined in clause (a) thereof)) (the
“Revolving Credit Commitment Increase”) during the period commencing on March 1,
2005 and ending on September 30, 2005 (the “Revolving Credit Commitment Increase
Period”).

 

Section 2.02 Making the Loans. (a) The Administrative Borrower shall give the
Administrative Agent prior written notice in substantially the form of Exhibit B
hereto (a “Notice of Borrowing”), not later than 12:00 noon (New York City time)
on the date of the proposed Loan (or such shorter period as the Administrative
Agent is willing to accommodate from time to time, provided, that such Notice of
Borrowing shall be received by the Administrative Agent, (x) in the case of a
borrowing consisting of a Reference Rate Loan, not later than 12:00 noon (New
York City time) on the borrowing date of the proposed Reference Rate Loan, and
(y) in the case of a borrowing consisting of LIBOR Rate Loans, not later than
12:00 noon (New York City time) on a date that is two (2) Business Days prior to
the proposed borrowing). Such Notice of Borrowing shall be irrevocable and shall
specify (i) the principal amount of the proposed Loan, which, in the case of the
Term Loan A, shall fully utilize the Total Term Loan A Commitment on the
Effective Date, and in the case of the Term Loan B, shall fully utilize the
Total Term Loan B Commitment on the Effective Date, (ii) whether such Loan is
requested to be a Reference Rate Loan or a LIBOR Rate Loan and, in the case of a
LIBOR Rate Loan, the initial Interest Period with respect thereto, (iii) the use
of the proceeds of such proposed Loan, (iv) the proposed borrowing date, which
must be a Business Day, and with respect to the Term Loan A and the Term Loan B,
must be the Effective Date, and (v) whether the Loan is a Revolving Loan, Term
Loan A or Term Loan B. The Administrative Agent and the Lenders may act without
liability upon the basis of written or telecopied notice believed by the
Administrative Agent in good faith to be from the Administrative Borrower (or
from any Authorized Officer, the Assistant Treasurer or the Vice President of
Finance and Accounting thereof designated in writing purportedly from the
Administrative Borrower to the Administrative Agent). The Administrative Agent
and each Lender shall be entitled to rely conclusively on any Authorized
Officer’s authority to request a Loan on behalf of the Borrowers

 

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until the Administrative Agent receives written notice to the contrary. The
Administrative Agent and the Lenders shall have no duty to verify the
authenticity of the signature appearing on any written Notice of Borrowing.

 

(b) Each Notice of Borrowing pursuant to this Section 2.02 shall be irrevocable
and the Borrowers shall be bound to make a borrowing in accordance therewith. In
the case of the Revolving Loans, (i) each Reference Rate Loan shall be made in a
minimum amount of $200,000 and shall be in an integral multiple of $100,000 and
(ii) each LIBOR Rate Loan shall be made in a minimum amount of $1,000,000 and in
integral multiples of $500,000 in excess thereof. In the case of the Term Loan A
and the Term Loan B, (i) each Reference Rate Loan shall be made in a minimum
amount of $1,000,000 and shall be in an integral multiple of $500,000 and (ii)
each LIBOR Rate Loan shall be made in a minimum amount of $1,000,000 and in
integral multiples of $500,000 in excess thereof. No more than ten (10) Interest
Periods in the aggregate for the Borrowers may exist at any one time.

 

(c) (i) Except as otherwise provided in this subsection 2.02(c), all Loans under
this Agreement shall be made by the Lenders simultaneously and proportionately
to their Pro Rata Shares of the Total Revolving Credit Commitment, the Total
Term Loan A Commitment or the Total Term Loan B Commitment, as the case may be,
it being understood that no Lender shall be responsible for any default by any
other Lender in that other Lender’s obligations to make a Loan requested
hereunder, nor shall the commitment of any Lender be increased or decreased as a
result of the default by any other Lender in that other Lender’s obligation to
make a Loan requested hereunder, and each Lender shall be obligated to make the
Loans required to be made by it by the terms of this Agreement regardless of the
failure by any other Lender.

 

(ii) Notwithstanding any other provision of this Agreement, and in order to
reduce the number of fund transfers among the Borrowers, the Agents and the
Lenders, the Borrowers, the Agents and the Lenders agree that the Administrative
Agent may (but shall not be obligated to), and the Borrowers and the Lenders
hereby irrevocably authorize the Administrative Agent to, fund, on behalf of the
Revolving Loan Lenders, Revolving Loans pursuant to Section 2.01, subject to the
procedures for settlement set forth in subsection 2.02(d); provided, however,
that (a) the Administrative Agent shall in no event fund any such Revolving
Loans if the Administrative Agent shall have received written notice from the
Collateral Agent or the Required Revolving Loan Lenders on the Business Day
prior to the date of the proposed Revolving Loan that one or more of the
conditions precedent contained in Section 6.02 will not be satisfied at the time
of the proposed Revolving Loan, and (b) the Administrative Agent shall not
otherwise be required to determine that, or take notice whether, the conditions
precedent in Section 6.02 have been satisfied. If either (x) the Administrative
Borrower gives a Notice of Borrowing requesting a Revolving Loan that is a LIBOR
Rate Loan or (y) the Administrative Agent elects not to fund a requested
Revolving Loan that is a Reference Rate Loan on behalf of the Revolving Loan
Lenders, then promptly after receipt of the Notice of Borrowing requesting such
Revolving Loan, the Administrative Agent shall notify each Revolving Loan Lender
of the specifics of the requested Revolving Loan and that it will not fund the
requested Revolving Loan on behalf of the Revolving Loan Lenders. If the
Administrative Agent notifies the Revolving Loan Lenders that it will not fund a
requested Revolving Loan on behalf of the Revolving Loan Lenders, each Revolving
Loan Lender shall make its Pro Rata Share of the Revolving Loan available to the
Administrative Agent, in immediately available funds, in the Administrative

 

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Agent’s Account no later than 2:00 p.m. (New York City time) (provided that the
Administrative Agent requests payment from such Revolving Loan Lender not later
than 1:00 p.m. (New York City time)) (1) on the date of the proposed Revolving
Loan in the case of a Reference Rate Loan and (2) one day prior to the date of
the proposed Revolving Loan, in the case of a LIBOR Rate Loan. The
Administrative Agent will make the proceeds of such Revolving Loans available to
the Borrowers on the day of the proposed Revolving Loan by causing an amount, in
immediately available funds, equal to the proceeds of all such Revolving Loans
received by the Administrative Agent in the Administrative Agent’s Account or
the amount funded by the Administrative Agent on behalf of the Revolving Loan
Lenders to be deposited in an account designated by the Administrative Borrower.

 

(iii) If the Administrative Agent has notified the Revolving Loan Lenders that
the Administrative Agent, on behalf of such Revolving Loan Lenders, will not
fund a particular Revolving Loan pursuant to subsection 2.02(c)(ii), the
Administrative Agent may assume that each such Revolving Loan Lender has made
such amount available to the Administrative Agent on such day and the
Administrative Agent, in its sole discretion, may, but shall not be obligated
to, cause a corresponding amount to be made available to the Borrowers on such
day. If the Administrative Agent makes such corresponding amount available to
the Borrowers and such corresponding amount is not in fact made available to the
Administrative Agent by any such Revolving Loan Lender, the Administrative Agent
shall be entitled to recover such corresponding amount on demand from such
Revolving Loan Lender together with interest thereon, for each day from the date
such payment was due until the date such amount is paid to the Administrative
Agent, at the Federal Funds Rate for three Business Days and thereafter at the
Reference Rate. During the period in which such Revolving Loan Lender has not
paid such corresponding amount to the Administrative Agent, notwithstanding
anything to the contrary contained in this Agreement or any other Loan Document,
the amount so advanced by the Administrative Agent to the Borrowers shall, for
all purposes hereof, be a Revolving Loan made by the Administrative Agent for
its own account. Upon any such failure, the Borrowers shall, upon demand by the
Administrative Agent, repay such amount to the Administrative Agent for its own
account.

 

(iv) Nothing in this subsection 2.02(c) shall be deemed to relieve any Lender
from its obligations to fulfill its Revolving Credit Commitment hereunder or to
prejudice any rights that the Agents or the Borrowers may have against any
Lender as a result of any default by such Lender hereunder.

 

(d) (i) With respect to each Revolving Loan that is a LIBOR Rate Loan, on the
first and the last date of each Interest Period, and with respect to all periods
for which the Administrative Agent, on behalf of the Lenders, has funded
Revolving Loans that are Reference Rate Loans pursuant to subsection 2.02(c), on
Friday of each week, or if the applicable Friday is not a Business Day, then on
the following Business Day, or such shorter period as the Administrative Agent
may from time to time select (any such Interest Period, week or shorter period
being herein called a “Settlement Period”), the Administrative Agent shall
notify each Revolving Loan Lender of the unpaid principal amount of the Loans
outstanding as of the last day of each such Settlement Period. In the event that
such amount is greater than the unpaid principal amount of the Revolving Loans
outstanding on the last day of the Settlement Period immediately preceding such
Settlement Period (or, if there has been no preceding Settlement Period, the
amount

 

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of the Revolving Loans made on the date of such Revolving Loan Lender’s initial
funding), each Revolving Loan Lender shall promptly (and in any event not later
than 3:00 p.m. (New York City time) if the Administrative Agent requests payment
from such Lender not later than 12:00 noon (New York City time) on such day)
make available to the Administrative Agent its Pro Rata Share of the difference
in immediately available funds. In the event that such amount is less than such
unpaid principal amount, the Administrative Agent shall promptly pay over to
each Revolving Loan Lender its Pro Rata Share of the difference in immediately
available funds. In addition, if the Administrative Agent shall so request at
any time when a Default or an Event of Default shall have occurred and be
continuing, or any other event shall have occurred as a result of which the
Administrative Agent shall determine that it is desirable to present claims
against the Borrowers for repayment, each Revolving Loan Lender shall promptly
remit to the Administrative Agent or, as the case may be, the Administrative
Agent shall promptly remit to each Revolving Loan Lender, sufficient funds to
adjust the interests of the Revolving Loan Lenders in the then outstanding
Revolving Loans to such an extent that, after giving effect to such adjustment,
each such Revolving Loan Lender’s interest in the then outstanding Revolving
Loans will be equal to its Pro Rata Share thereof. The obligations of the
Administrative Agent and each Revolving Loan Lender under this subsection
2.02(d) shall be absolute and unconditional. Each Revolving Loan Lender shall
only be entitled to receive interest on its Pro Rata Share of the Revolving
Loans which have been funded by such Revolving Loan Lender.

 

(ii) In the event that any Revolving Loan Lender fails to make any payment
required to be made by it pursuant to subsection 2.02(d)(i), the Administrative
Agent shall be entitled to recover such corresponding amount on demand from such
Revolving Loan Lender together with interest thereon, for each day from the date
such payment was due until the date such amount is paid to the Administrative
Agent, at the Federal Funds Rate for three Business Days and thereafter at the
Reference Rate. During the period in which such Revolving Loan Lender has not
paid such corresponding amount to the Administrative Agent, notwithstanding
anything to the contrary contained in this Agreement or any other Loan Document,
the amount so advanced by the Administrative Agent to the Borrowers shall, for
all purposes hereof, be a Revolving Loan made by the Administrative Agent for
its own account. Upon any such failure by a Revolving Loan Lender to pay the
Administrative Agent, the Borrowers shall, upon demand by the Administrative
Agent, repay such amount to the Administrative Agent for its own account.
Nothing in this subsection 2.02(d)(ii) shall be deemed to relieve any Revolving
Loan Lender from its obligation to fulfill its Revolving Credit Commitment
hereunder or to prejudice any rights that the Administrative Agent or the
Borrowers may have against any Revolving Loan Lender as a result of any default
by such Revolving Loan Lender hereunder.

 

Section 2.03 Repayment of Loans; Evidence of Debt. (a) The outstanding principal
of all Revolving Loans shall be due and payable in full on the Maturity Date.

 

(b) The outstanding principal of the Term Loan A shall be repayable in
consecutive monthly installments, on the last day of each calendar month,
commencing on January 31, 2006 and ending on the Maturity Date, consisting of
(i) forty-seven (47) installments, each in an amount equal to $875,000 and (ii)
one (1) installment on the Maturity Date, in an amount equal to $63,875,000;
provided, however, that the last such installment shall be in the amount
necessary to repay in full the unpaid principal amount of the Term Loan A.

 

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(c) The outstanding principal of the Term Loan B shall be due and payable in
full on the Maturity Date.

 

(d) Each Lender shall maintain in accordance with its usual practice an account
or accounts evidencing the Indebtedness of the Borrowers 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.

 

(e) The Administrative Agent shall maintain accounts in which it shall record
(i) the amount of each Loan made hereunder, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrowers 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.

 

(f) The entries made in the accounts maintained pursuant to paragraph (d) or (e)
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 Borrowers to repay the Loans in
accordance with the terms of this Agreement.

 

(g) Any Lender may request that Loans made by it be evidenced by a promissory
note. In such event, the Borrowers shall 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) in a form furnished by the
Collateral Agent and reasonably acceptable to the Administrative Borrower.
Thereafter, the Loans evidenced by such promissory note and interest thereon
shall at all times (including after assignment pursuant to Section 13.07) 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 2.04 Interest. (a) Revolving Loans. Subject to the terms of this
Agreement, at the option of the Administrative Borrower, each Revolving Loan
shall be either a Reference Rate Loan or a LIBOR Rate Loan. Each Revolving Loan
that is a (i) Reference Rate Loan shall bear interest on the principal amount
thereof from time to time outstanding at a rate per annum equal to the greater
of (A) the Reference Rate plus 1.00% and (B) 5.50% and (ii) LIBOR Rate Loan
shall bear interest on the principal amount thereof from time to time
outstanding, from the date of such Loan until such principal amount becomes due,
at a rate per annum equal to the greater of (A) the LIBOR Rate for the Interest
Period in effect for such Revolving Loan plus 3.50% and (B) 5.50%.

 

(b) Term Loan A. Subject to the terms of this Agreement, at the option of the
Administrative Borrower, the Term Loan A shall be either a Reference Rate Loan
or a LIBOR Rate Loan. The Term Loan A shall bear interest on the principal
amount thereof from time to time outstanding at a rate per annum equal to (A) in
the case of a Reference Rate Loan, the greater of (x) the Reference Rate plus
1.50% and (y) 6.00% and (B) in the case of a LIBOR Rate Loan, the greater of (x)
the LIBOR Rate for the Interest Period in effect for the Term Loan A plus 4.00%
and (y) 6.00%.

 

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(c) Term Loan B. Subject to the terms of this Agreement, at the option of the
Administrative Borrower, the Term Loan B shall be either a Reference Rate Loan
or a LIBOR Rate Loan. The Term Loan B shall bear interest on the principal
amount thereof from time to time outstanding at a rate per annum equal to (A) in
the case of a Reference Rate Loan, the greater of (x) the Reference Rate plus
9.75% and (y) 14.25% and (B) in the case of a LIBOR Rate Loan, the greater of
(x) the LIBOR Rate for the Interest Period in effect for the Term Loan B plus
10.25% and (y) 12.25%.

 

(d) Default Interest. To the extent permitted by law, upon the occurrence and
during the continuance of an Event of Default and, at the request of the
Required Revolving Loan Lenders with respect to the Revolving Loans and
Reimbursement Obligations, at the request of the Required Term A Lenders with
respect to the Term Loan A and at the request of the Required Term B Lenders
with respect to the Term Loan B, the principal of, and all accrued and unpaid
interest on, the applicable Loans (and, if applicable, outstanding Reimbursement
Obligations), fees, indemnities or any other Obligations with respect to the
applicable Loans of the Loan Parties under this Agreement and the other Loan
Documents, shall bear interest, from the date such Event of Default occurred
until the date such Event of Default is cured or waived in writing in accordance
herewith, at a rate per annum equal at all times to the Post-Default Rate.

 

(e) Interest Payment. Interest on each Loan shall be payable monthly, in
arrears, on the first day of each month, commencing on the first day of the
month following the month in which such Loan is made and at maturity (whether
upon demand, by acceleration or otherwise). Interest at the Post-Default Rate
shall be payable on demand. The Borrowers hereby authorize the Administrative
Agent to, and the Administrative Agent may, from time to time, charge the Loan
Account pursuant to Section 5.02 with the amount of any interest payment due
hereunder.

 

(f) General. All interest shall be computed on the basis of a year of 360 days
for the actual number of days, including the first day but excluding the last
day, elapsed.

 

Section 2.05 Reduction of Commitment; Prepayment of Loans.

 

(a) Reduction of Commitments.

 

(i) (A) The Total Revolving Credit Commitment and the Revolving Credit
Commitment of each Lender shall terminate on the Maturity Date. The Borrowers
may, subject to the payment of the Applicable Prepayment Premium, if any,
payable in connection with such reduction of the Total Revolving Credit
Commitment, reduce the Total Revolving Credit Commitment to an amount (which may
be zero) not less than the sum of (A) the aggregate unpaid principal amount of
all Revolving Loans then outstanding, (B) the aggregate principal amount of all
Revolving Loans not yet made as to which a Notice of Borrowing has been given by
the Administrative Borrower under Section 2.02, (C) the Letter of Credit
Obligations at such time, (D) the stated amount of all Letter of Credit
Accommodations not yet issued as to which a request has been made and not
withdrawn, and (E) any reserves established pursuant to clause (ii) of the
definition of “Availability” and pursuant to the definition of “Borrowing Base”.

 

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(B) The Total Term Loan A Commitment and the Total Term Loan B Commitment shall
each terminate after the Term Loan A and the Term Loan B have been made to the
Borrowers, which shall not be later than the close of business on the Effective
Date.

 

(ii) Each such voluntary reduction of the Total Revolving Credit Commitment
pursuant to Section 2.05(a)(i)(A) shall be in an amount which is an integral
multiple of $2,500,000 (unless the Total Revolving Credit Commitment in effect
immediately prior to such reduction is less than $2,500,000), shall be made by
providing not less than five (5) Business Days’ prior written notice to the
Administrative Agent and the Collateral Agent and shall be irrevocable. Once
reduced, the Total Revolving Credit Commitment may not be increased. Each such
reduction of the Total Revolving Credit Commitment shall reduce the applicable
Commitment of each Revolving Loan Lender holding such commitment proportionately
in accordance with its Pro Rata Share thereof.

 

(b) Optional Prepayment.

 

(i) Revolving Loans. The Borrowers may, at any time, prepay without penalty or
premium the principal of any Revolving Loan, in whole or in part. Each voluntary
prepayment made pursuant to this clause (b)(i) made in connection with a
reduction of the Total Revolving Credit Commitment pursuant to clause (a)(i)
above shall be accompanied by the payment of the Applicable Prepayment Premium,
if any, payable in connection with such reduction of the Total Revolving Credit
Commitment.

 

(ii) Term Loans. (A) The Borrowers may, upon at least three (3) Business Days’
prior written notice to the Administrative Agent and the Collateral Agent,
prepay the principal of the Term Loan A or the Term Loan B, in whole or in part;
provided, that, notwithstanding the foregoing, except in connection with the
repayment in full of all of the Obligations, the Borrowers may not voluntarily
prepay all or any portion of (A) the Term Loan A if immediately after giving
effect to such prepayment, Excess Availability would be less than $30,000,000
and (B) the Term Loan B if (x) immediately after giving effect to such
prepayment, Excess Availability would be less than $30,000,000, (y) immediately
before or immediately after giving effect to such prepayment, an Event of
Default shall have occurred and be continuing, or (z) after giving effect to any
payment of the Term Loan A made at the time of such prepayment, the aggregate
principal amount outstanding under the Term Loan A is in excess of $80,000,000.
Each prepayment made pursuant to this clause (b)(ii) shall be accompanied by the
payment of (1) accrued interest to the date of such payment on the amount
prepaid and (2) the Applicable Prepayment Premium, if any, payable in connection
with such prepayment of the Term Loan A or Term Loan B, as applicable. Each
prepayment of the Term Loan A made pursuant to this clause (b)(ii) shall be
applied against the remaining installments of principal due on the Term Loan A
in the inverse order of maturity.

 

(iii) Prepayment In Full. The Borrowers may, upon at least five (5) Business
Days prior written notice by the Administrative Borrower to the Administrative
Agent and the Collateral Agent, terminate this Agreement by paying to the
Administrative Agent, in cash, the Obligations (including either (A) providing
cash collateral to be held by the Administrative Agent in an amount equal to
105% of the aggregate undrawn amount of all

 

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outstanding Letter of Credit Accommodations or (B) causing the original Letter
of Credit Accommodations to be returned to the Administrative Agent), in full,
together with the Applicable Prepayment Premium, if any. If the Administrative
Borrower has sent a notice of termination pursuant to this clause (iii), then
the Lenders’ obligations to extend credit hereunder shall terminate and the
Borrowers shall be obligated to repay the Obligations (including either (A)
providing cash collateral to be held by the Administrative Agent in an amount
equal to 105% of the aggregate undrawn amount of all outstanding Letter of
Credit Accommodations or (B) causing the original Letter of Credit
Accommodations to be returned to the Administrative Agent), in full, together
with the Applicable Prepayment Premium, if any, on the date set forth as the
date of termination of this Agreement in such notice.

 

(c) Mandatory Prepayment.

 

(i) (A) The Borrowers will, at any time, immediately prepay the Revolving Loans
when the aggregate principal amount of all Revolving Loans plus the outstanding
amount of all Letter of Credit Obligations exceeds the Availability (such excess
amount, an “Overadvance”), to the full extent of such excess; provided that if
the Overadvance exists solely as result of the Administrative Agent imposing a
reserve against the Borrowing Base or the Total Revolving Credit Commitment, the
Borrowers shall have three days from the date of such Overadvance to repay the
Revolving Loans to the full extent of such excess. On each day that any
Revolving Loans or Letter of Credit Obligations are outstanding, the Borrowers
shall hereby be deemed to represent and warrant to the Agents and the Lenders
that the Borrowing Base calculated as of such day equals or exceeds the
aggregate principal amount of all Revolving Loans and Letter of Credit
Obligations outstanding on such day.

 

(B) If at any time after the Borrowers have complied with the first sentence of
paragraph (A) of this Section 2.05(c)(i), the aggregate Letter of Credit
Obligations is greater than the then current Availability, the Borrowers shall
provide cash collateral to the Administrative Agent in an amount equal to 105%
of such excess, which cash collateral shall be deposited in the Letter of Credit
Collateral Account and, provided that no Event of Default shall have occurred
and be continuing, returned to the Borrowers, at such time as the aggregate
Letter of Credit Obligations plus the aggregate principal amount of all
outstanding Revolving Loans no longer exceeds the then current Availability.

 

(ii) Within ten (10) days of delivery to the Agents and the Lenders of audited
annual financial statements pursuant to Section 8.01(a)(ii), commencing with the
delivery to the Agents and the Lenders of the financial statements for the
Fiscal Year ended December 31, 2006 or, if such financial statements are not
delivered to the Agents and the Lenders on the date such statements are required
to be delivered pursuant to Section 8.01(a)(ii), ten (10) days after the date
such statements are required to be delivered to the Agents and the Lenders
pursuant to Section 8.01(a)(ii), the Borrowers shall prepay the outstanding
principal amount of the Loans in an amount equal to 75% of the Excess Cash Flow
of the Parent and its Subsidiaries for such Fiscal Year (an “Excess Cash Flow
Payment”), provided that, if (x) the Fixed Charge Coverage Ratio of the Parent
and its Subsidiaries for the period of four (4) consecutive fiscal quarters
ended on the last day of such Fiscal Year is greater than 2.00 to 1.00 (as
demonstrated in the certificate delivered pursuant to Section 8.01(a)(iv) with
respect to such Fiscal Year), and (y) the Borrowers have made at least one
Excess Cash Flow Payment in an amount equal to 75% of

 

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the Excess Cash Flow of the Parent and its Subsidiaries for any prior Fiscal
Year, the Borrowers shall only be obligated to prepay the outstanding principal
amount of the Loans in an amount equal to 50% of the Excess Cash Flow of the
Parent and its Subsidiaries for such Fiscal Year. Any payments required to be
made under this subsection (ii) shall be applied (A) in the absence of a
continuing Event of Default, as provided for in Section 2.05(d) and (B) during
the existence of an Event of Default, in accordance with Section 5.04(b).

 

(iii) The Borrowers will immediately prepay the outstanding principal amount of
the Term Loan A and the Term Loan B in the event that the Total Revolving Credit
Commitment is terminated for any reason, provided that, if there are
insufficient funds to make all payments required to be made under this Section
2.05(c)(iii) in full, any payments required to be made under this Section
2.05(c)(iii) shall be applied in accordance with Section 5.04(b).

 

(iv) The Administrative Agent shall on each Business Day apply all funds
transferred to or deposited in the Administrative Agent’s Account, to the
payment, in whole or in part, of the outstanding principal amount of the
Revolving Loans; provided, that, such funds shall be applied to the outstanding
principal amount of the Term Loan A and/or the Term Loan B (A) in the absence of
a continuing Event of Default, to the extent such application is specifically
provided for in Section 2.05(d), and (B) during the existence of an Event of
Default, in accordance with Section 5.04(b).

 

(v) Subject to the provisions of clause (viii) below, no later than the third
Business Day after any such Net Cash Proceeds are received, upon any Disposition
by any Loan Party or its Subsidiaries, the Borrowers shall prepay the Loans in
an amount equal to 100% (or 50% in the case of a Disposition of the Mica
Business) of the Net Cash Proceeds received by such Person in connection with
such Disposition, to the extent such Net Cash Proceeds together with the
aggregate amount of all Net Cash Proceeds received in such Fiscal Year in
connection with all other Dispositions and the aggregate amount of all
Extraordinary Receipts, net of any reasonable expenses incurred in collecting
such Extraordinary Receipts, consisting of insurance proceeds and condemnation
awards received in such Fiscal Year exceed $500,000 in the aggregate. Nothing
contained in this subsection (v) shall permit any Loan Party or any of its
Subsidiaries to make a Disposition of any property other than in accordance with
Section 8.02(c). Any payments required to be made under this subsection (v)
shall be applied (A) in the absence of a continuing Event of Default, as
provided for in Section 2.05(d) and (B) during the existence of an Event of
Default, in accordance with Section 5.04(b).

 

(vi) Upon (A) the issuance or incurrence by any Loan Party or any of its
Subsidiaries of any Indebtedness (other than Permitted Indebtedness), the
Borrowers shall prepay the outstanding amount of the Loans in an amount equal to
100% of the Net Cash Proceeds received by such Person in connection therewith
and (B) the sale or issuance by any Loan Party or any of its Subsidiaries of any
shares of its Capital Stock, the Borrowers shall prepay the outstanding amount
of the Loans in an amount equal to 75% of the Net Cash Proceeds received by such
Person in connection therewith (or in the case of a Warrant Issuance, 100% of
the Net Cash Proceeds received by such Person in connection therewith);
provided, that in the case of this clause (B), (I) except in connection with a
Warrant Issuance, if the Fixed Charge Coverage Ratio of the Parent and its
Subsidiaries for the period of four (4) consecutive fiscal

 

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quarters ended immediately prior to such sale or issuance for which there are
available financial statements is greater than 2.00 to 1.00 (as demonstrated in
the certificate delivered pursuant to Section 8.01(a)(iv) with respect to the
fiscal quarter immediately preceding such date), the Borrowers shall only be
obligated to prepay the outstanding principal amount of the Loans in an amount
equal to 50% of the Net Cash Proceeds received by such Person in connection with
such sale or issuance, and (II) no prepayment shall be due with respect to
proceeds from the issuance of Preferred Stock by the Parent in connection with
the Senior Secured Notes Redemption. The provisions of this subsection (vi)
shall not be deemed to be implied consent to any such issuance, incurrence or
sale otherwise prohibited by the terms and conditions of this Agreement. Any
payments required to be made under this subsection (vi) shall be applied (x) in
the absence of a continuing Event of Default, as provided for in Section 2.05(d)
and (y) during the existence of an Event of Default, in accordance with Section
5.04(b).

 

(vii) Subject to the provisions of clause (viii) below, no later than the third
Business Day after the receipt by any Loan Party or any of its Subsidiaries of
any Extraordinary Receipts, the Borrowers shall prepay the outstanding principal
of the Loans in an amount equal to 100% of such Extraordinary Receipts, net of
any reasonable expenses incurred in collecting such Extraordinary Receipts, to
the extent such Extraordinary Receipts together with the aggregate amount of all
other Extraordinary Receipts (net of any reasonable expenses incurred in
collecting such Extraordinary Receipts) received in such Fiscal Year and the
aggregate amount of all Net Cash Proceeds received in such Fiscal Year in
connection with Dispositions (or, in the case of a Disposition of the Mica
Business, 50% of all Net Cash Proceeds received in such Fiscal Year from such
Disposition) exceeds $1,000,000 in the aggregate in such Fiscal Year. Any
payments required to be made under this subsection (vii) shall be applied (A) in
the absence of a continuing Event of Default, as provided for in Section 2.05(d)
and (B) during the existence of an Event of Default, in accordance with Section
5.04(b).

 

(viii) Notwithstanding the foregoing, with respect to Net Cash Proceeds that the
Borrowers are required to prepay in connection with a Disposition under Section
2.05(c)(v) or with respect to Extraordinary Receipts, net of any reasonable
expenses incurred in collecting such Extraordinary Receipts, that the Borrowers
are required to prepay in connection with the receipt of Extraordinary Receipts
pursuant to Section 2.05(c)(vii), up to $10,000,000 in the aggregate of the Net
Cash Proceeds from such Disposition and such Extraordinary Receipts, as the case
may be, received by any Loan Party or any of its Subsidiaries in connection
therewith shall not be required to be applied to the prepayment of the Loans on
such date to the extent such proceeds are reinvested in or otherwise used to
replace, repair or restore the properties or assets used in such Loan Party’s
business, provided that, (w) such proceeds shall be used by a Loan Party to
reinvest in, or otherwise replace, repair or restore, properties or assets
constituting (A) Revolver Priority Collateral if the property or assets disposed
or subject to casualty or condemnation constituted Revolver Priority Collateral,
(B) Term Priority Collateral if the property or assets disposed or subject to
casualty or condemnation constituted Term Priority Collateral, (C) property,
plant or equipment if the receipt of Net Cash Proceeds or Extraordinary Receipts
did not arise from a disposition or a casualty or condemnation of any property
or assets, (x) no Default or Event of Default has occurred and is continuing on
the date such Person receives such Net Cash Proceeds or such Extraordinary
Receipts, (y) the Administrative Borrower delivers a certificate to the Agents
within 5 days after such Disposition or 10 days after the date of such loss,
destruction or taking, as the case may be,

 

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stating that such proceeds shall be used to reinvest in, or otherwise replace,
repair or restore any such properties or assets to be used in such Loan Party’s
or any of its Subsidiaries’ business within a period specified in such
certificate not to exceed 180 days after the receipt of such proceeds (which
certificate shall set forth estimates of the proceeds to be so expended) and (z)
such proceeds are deposited in an account subject to the sole dominion and
control of the Administrative Agent; and if all or any portion of such proceeds
not so applied to the prepayment of the Loans are not used in accordance with
the preceding sentence within the period specified in the relevant certificate
furnished pursuant hereto or there shall occur a Default or Event of Default,
such remaining portion shall be applied to the Loans as required by Section
2.05(c)(v) or Section 2.05(c)(vii), as applicable, on the last day of such
specified period or immediately, in the case of a Default or Event of Default.
If the Borrowers are not permitted to reinvest or utilize such Net Cash Proceeds
or such Extraordinary Receipts in accordance with this clause (viii) as a result
of the existence of a Default, at the election of the Administrative Borrower,
such Net Cash Proceeds or Extraordinary Receipts shall be deposited in an
account subject to the sole dominion and control of the Administrative Agent
until the earlier of (I) the date on which such Default is cured or waived in
writing in accordance with the terms of this Agreement, in which case such
amounts may be reinvested or utilized in accordance with this clause (viii) and
(II) the date on which an Event of Default shall occur, in which case such Net
Cash Proceeds and Extraordinary Receipts shall be applied to the Loans in
accordance with Section 5.04(b) on such date.

 

(d) Application of Payments. At any time in the absence of a continuing Event of
Default, the prepayments required under Section 2.05(c) shall be applied as
follows:

 

(i) the proceeds from any prepayment pursuant to (x) any Disposition of any
Revolver Priority Collateral, (y) any Extraordinary Receipts consisting of
insurance policy or condemnation award with respect to Revolver Priority
Collateral or (z) any Extraordinary Receipts consisting of a judgment, proceeds
of settlement or other consideration in connection with a cause of action, in
each case of this subclause (z), which amount is received as compensation for a
loss of revenue or income shall be applied (A) first, to the Revolving Loans
until paid in full, (B) second, to the Term Loan A until paid in full, and (C)
third, to the Term Loan B until paid in full;

 

(ii) the proceeds from any prepayment pursuant to any Disposition of any Term
Priority Collateral or any Extraordinary Receipts consisting of insurance policy
or condemnation award with respect to Term Priority Collateral shall be applied
(A) first, to the Term Loan A until paid in full, (B) second, to the Term Loan B
until paid in full, and (C) third, to the Revolving Loans until paid in full;

 

(iii) the proceeds from any prepayment pursuant to a Disposition of all or
substantially all of the assets or Capital Stock of any Person or any insurance
which Disposition or proceeds of insurance includes both (x) Revolver Priority
Collateral and (y) Term Priority Collateral, shall be applied as follows: (A) an
amount equal to the book value of such Accounts and Inventory disposed of or in
respect of which such insurance proceeds are collected constituting Revolver
Priority Collateral (determined at the time of such Disposition or event
resulting in such insurance proceeds) shall be applied to the Revolving

 

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Loans until paid in full, and (B) the remaining proceeds shall be applied (1)
first, to the Term Loan A until paid in full, (2) second, to the Term Loan B
until paid in full, and (3) third, to the Revolving Loans until paid in full;
and

 

(iv) the proceeds from any prepayment event set forth in Section 2.05(c)(ii),
Section 2.05(c)(vi) or Section 2.05(c)(vii) (other than proceeds from any
Extraordinary Receipts consisting of (x) insurance policy or condemnation award
with respect to Revolver Priority Collateral or (y) a judgment, proceeds of
settlement or other consideration in connection with a cause of action, in each
case of this subclause (y), which amount is received as compensation for a loss
of revenue or income) shall be applied, (A) first, to the Term Loan A until paid
in full, (B) second, to the Term Loan B until paid in full, and (C) third, to
the Revolving Loans until paid in full, provided that, notwithstanding the
foregoing, in the case of a Warrant Issuance, up to $5,775,000 of the Net Cash
Proceeds received by the Parent or any of its Subsidiaries, may be applied
solely to the Revolving Loans until paid in full.

 

Notwithstanding the foregoing, (x) after the occurrence and during the
continuance of an Event of Default, prepayments required under Section 2.05(c)
shall be applied in the manner set forth in Section 5.04(b), unless the
Administrative Agent has not elected to, or has not been directed to, apply
payments and other Proceeds of Collateral in accordance with Section 5.04(b) and
no acceleration of the Loans has occurred, in which case prepayments required
under Section 2.05(c) shall be applied in the manner set forth in this Section
2.05(d), and (y) after the application of proceeds to the Term Loan A as set
forth in this Section, except in connection with the repayment in full of all of
the Obligations, the Borrowers may not prepay all or any portion of the Term
Loan B if immediately after giving effect to such prepayment, Excess
Availability would be less than $20,000,000, such remaining proceeds shall be
applied to the Revolving Loans, provided, that, (1) concurrently with the
application of proceeds to the Revolving Loans in accordance with clause (y)
above, the Administrative Agent shall establish and maintain a corresponding
reserve against the Availability in an amount equal to the amount that would
have otherwise been applied to the prepayment of the Term Loan B, and (2) the
amount that is so applied to the Revolving Loans shall be applied to the
prepayment of the Term Loan B, and the corresponding reserve against the
Availability shall be released, at such time as Excess Availability is greater
than or equal to $20,000,000 both immediately before and immediately after
giving effect to such prepayment of the Term Loan B.

 

(e) Interest, Fees and Expenses. Any prepayment made pursuant to this Section
2.05 (other than prepayments made pursuant to paragraphs (c)(i) and (c)(iv) of
this Section 2.05) shall be accompanied by (i) accrued interest on the principal
amount being prepaid to the date of prepayment, (ii) if such prepayment would
reduce the outstanding principal amount of the Revolving Loans, the Term Loan A
or the Term Loan B to zero (in the case of the Revolving Loans, at a time when
the Total Revolving Credit Commitment has been terminated), such prepayment
shall be accompanied by the payment of (A) all fees accrued on the Loans that
have been reduced to zero to such date pursuant to Section 2.06 and (B) all
costs and expenses payable pursuant to the terms of Section 13.04 of this
Agreement by the Borrowers to the Lender that held the Loans that have been
reduced to zero for which an invoice has been presented to the Administrative
Borrower and the Administrative Agent, and (iii) in the case of any prepayment
made pursuant to Sections 2.05(a)(i), 2.05(b)(ii), 2.05(c)(iii), 2.05(c)(v)
(subject to the immediately following sentence) or 2.05(c)(vi), the Applicable
Prepayment Premium, if any. Notwithstanding

 

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anything to the contrary, any prepayment of the Term Loan A up to $26,250,000 in
the aggregate and of the Term Loan B up to $37,500,000 in the aggregate and any
reduction of the Total Revolving Credit Commitment in an aggregate amount up to
$13,750,000, in each case, made pursuant to Section 2.05(c)(v), shall not
require the payment of the Applicable Prepayment Premium. Each prepayment of the
Term Loan A made pursuant to Sections 2.05(c) and 2.05(d) shall be applied
against the remaining installments of principal of the Term Loan A in the
inverse order of maturity.

 

(f) Cumulative Prepayments. Except as otherwise expressly provided in this
Section 2.05, payments with respect to any subsection of this Section 2.05 are
in addition to payments made or required to be made under any other subsection
of this Section 2.05.

 

Section 2.06 Fees.

 

(a) Unused Line Fee. From and after the Effective Date and until the Maturity
Date, the Borrowers shall pay to the Administrative Agent for the account of the
Lenders that have a Revolving Credit Commitment, in accordance with their Pro
Rata Shares, an unused line fee (the “Unused Line Fee”), which shall accrue at
the rate per annum of 0.50% on the excess, if any, of the Total Revolving Credit
Commitment over the sum of the average principal amount of all Revolving Loans
and Letter of Credit Obligations outstanding from time to time and shall be
payable monthly in arrears commencing on the first day of the month immediately
following the Effective Date.

 

(b) Fee Letter. From and after the Effective Date, the Borrowers shall pay to
the Administrative Agent, for the account of the Agents and the Lenders, in
accordance with a written agreement among the Agents and the Lenders, the fees
specified in the Fee Letter, at the times specified for payment therein.

 

Section 2.07 Securitization. The Loan Parties hereby acknowledge that the
Lenders and their Affiliates may sell or securitize the Loans (a
“Securitization”) through the pledge of the Loans as collateral security for
loans to the Lenders or their Affiliates or through the sale of the Loans or the
issuance of direct or indirect interests in the Loans, which loans to the
Lenders or their Affiliates or direct or indirect interests may be rated by
Moody’s, Standard & Poor’s or one or more other rating agencies (the “Rating
Agencies”). The Loan Parties shall cooperate with the Lenders and their
Affiliates to effect the Securitization including, without limitation, by (a)
amending this Agreement and the other Loan Documents, and executing such
additional documents, as reasonably requested by the Lenders in connection with
the Securitization, provided that (i) any such amendment or additional
documentation does not impose material additional costs on the Loan Parties and
(ii) any such amendment or additional documentation does not materially
adversely affect the rights, or materially increase the obligations, of the Loan
Parties under the Loan Documents or change or affect in a manner adverse to the
Loan Parties the financial terms of the Loans, (b) providing such information as
may be reasonably requested by the Lenders in connection with the rating of the
Loans or the Securitization, and (c) providing in connection with any rating of
the Loans a certificate (i) agreeing to indemnify the Lenders and their
Affiliates, any of the Rating Agencies, or any party providing credit support or
otherwise participating in the Securitization (collectively, the “Securitization
Parties”) for any losses, claims, damages or liabilities (the “Liabilities”) to
which

 

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the Lenders, their Affiliates or such Securitization Parties may become subject
insofar as the Liabilities arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in any Loan Document
or in any writing delivered by or on behalf of any Loan Party to the Lenders in
connection with any Loan Document or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein, or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, and such indemnity
shall survive any transfer by the Lenders or their successors or assigns of the
Loans and (ii) agreeing to reimburse the Lenders and their Affiliates for any
legal or other expenses reasonably incurred by such Persons in connection with
defending the Liabilities.

 

Section 2.08 Taxes. (a) Any and all payments by any Loan Party hereunder or
under any other Loan Document shall be made free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding (i)
taxes imposed on (or measured by) the net income of any Lender, any Agent or the
L/C Issuer (or any transferee or assignee thereof, including a participation
holder (any such entity, a “Transferee”)) by the United States of America or by
the jurisdiction in which such Lender, such Agent or the L/C Issuer is organized
or has its principal lending office or (ii) any branch profits taxes imposed by
the United States of America (all such nonexcluded taxes, levies, imposts,
deductions, charges withholdings and liabilities, collectively or individually,
“Taxes”). If any Loan Party shall be required to deduct any Taxes from or in
respect of any sum payable hereunder to any Lender, any Agent or the L/C Issuer
(or any Transferee), (A) the sum payable shall be increased by the amount (an
“additional amount”) necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
2.08) such Lender, such Agent or the L/C Issuer (or such Transferee) shall
receive an amount equal to the sum it would have received had no such deductions
been made, (B) such Loan Party shall make such deductions and (C) such Loan
Party shall pay the full amount deducted to the relevant Governmental Authority
in accordance with applicable law.

 

(b) In addition, each Loan Party agrees to pay to the relevant Governmental
Authority in accordance with applicable law any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies that arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement, the
Letter of Credit Accommodations or any other Loan Document (“Other Taxes”). Each
Loan Party shall deliver to each Lender, each Agent and the L/C Issuer official
receipts in respect of any Taxes or Other Taxes payable hereunder promptly after
payment of such Taxes or Other Taxes.

 

(c) The Loan Parties hereby, jointly and severally, indemnify and agree to hold
each Lender, each Agent and the L/C Issuer harmless from and against Taxes and
Other Taxes (including, without limitation, Taxes and Other Taxes imposed on any
amounts payable under this Section 2.08) paid by such Lender, such Agent or the
L/C Issuer (or such Transferee), whether or not such Taxes or Other Taxes were
correctly or legally asserted. Such indemnification shall be paid within 10 days
from the date on which any such Lender, any such Agent or the L/C Issuer makes
written demand therefor specifying in reasonable detail the nature and amount of
such Taxes or Other Taxes.

 

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(d) Each Lender (or Transferee) that is organized under the laws of a
jurisdiction other than the United States, any State thereof or the District of
Columbia (a “Non-U.S. Lender”) shall deliver to the Administrative Borrower and
the Agents two properly completed and duly executed copies of either U.S.
Internal Revenue Service Form W-8BEN or Form W-8ECI, or, in the case of a
Non-U.S. Lender claiming exemption from U.S. Federal withholding tax under
Section 871(h) or 881(c) of the Internal Revenue Code with respect to payments
of “portfolio interest”, a Form W-8BEN, or any subsequent versions thereof or
successors thereto (and, if such Non-U.S. Lender delivers a Form W-8, a
certificate representing that such Non-U.S. Lender is not a bank for purposes of
Section 881(c) of the Internal Revenue Code, is not a 10-percent shareholder
(within the meaning of Section 871(h)(3)(B) of the Internal Revenue Code) of any
Borrower and is not a controlled foreign corporation related to any Borrower
(within the meaning of Section 864(d)(4) of the Internal Revenue Code)), in each
case claiming complete exemption from U.S. Federal withholding tax on payments
by the Loan Parties under this Agreement. Such forms shall be delivered by each
Non-U.S. Lender on or before the date it becomes a party to this Agreement (or,
in the case of a Transferee that is a participation holder, on or before the
date such participation holder becomes a Transferee hereunder) and on or before
the date, if any, such Non-U.S. Lender changes its applicable lending office by
designating a different lending office (a “New Lending Office”). In addition,
each Non-U.S. Lender shall deliver such forms within 20 days after receipt of a
written request therefor from the Administrative Borrower or any Agent.
Notwithstanding any other provision of this Section 2.08, a Non-U.S. Lender
shall not be required to deliver after the date hereof any form pursuant to this
Section 2.08 that such Non-U.S. Lender is not legally able to deliver.

 

(e) The Loan Parties shall not be required to indemnify any Non-U.S. Lender, or
pay any additional amounts to any Non-U.S. Lender, in respect of United States
Federal withholding tax pursuant to this Agreement to the extent that (i) the
obligation to withhold amounts with respect to United States Federal withholding
tax existed on the date such Non-U.S. Lender became a party to this Agreement
(or, in the case of a Transferee that is a participation holder, on the date
such participation holder became a Transferee hereunder) or, with respect to
payments to a New Lending Office, the date such Non-U.S. Lender designated such
New Lending Office with respect to a Loan; provided, however, that this clause
(i) shall not apply to the extent the indemnity payment or additional amounts
any Transferee, or any Lender (or Transferee) through a New Lending Office,
would be entitled to receive (without regard to this clause (i)) do not exceed
the indemnity payment or additional amounts that the Person making the
assignment, participation or transfer to such Transferee, or such Lender (or
Transferee) making the designation of such New Lending Office, would have been
entitled to receive in the absence of such assignment, participation, transfer
or designation, (ii) the obligation to pay such additional amounts would not
have arisen but for a failure by such Non-U.S. Lender to comply with the
provisions of paragraph (d) above or (iii) the obligation to pay such additional
amounts does not result from a change in applicable tax law (including, without
limitation, applicable judicial decisions, statutes, regulations or other
administrative interpretations) occurring after the date hereof.

 

(f) Any Lender, any Agent or the L/C Issuer (or Transferee) claiming any
indemnity payment or additional payment amounts payable pursuant to this Section
2.08 shall (subject to legal and regulatory restrictions) file any certificate
or document reasonably requested in writing by the Administrative Borrower or
change the jurisdiction of its applicable lending office if the making of such a
filing or change would avoid the need for or reduce the amount of

 

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any such indemnity payment or additional amount which may thereafter accrue,
would not require such Lender, such Agent or the L/C Issuer (or Transferee) to
disclose any information such Lender, such Agent or the L/C Issuer (or
Transferee) deems confidential and would not, in the sole determination of such
Lender, such Agent or the L/C Issuer (or Transferee), be otherwise
disadvantageous to such Lender, such Agent or the L/C Issuer (or Transferee).

 

(g) If any Lender, any Agent or the L/C Issuer (or a Transferee) shall become
aware that it is entitled to claim a refund from a Governmental Authority in
respect of Taxes or Other Taxes with respect to which any Loan Party has paid
additional amounts, pursuant to this Section 2.08, it shall promptly notify the
Administrative Borrower of the availability of such refund claim and shall,
within 30 days after receipt of a request by the Administrative Borrower, make a
claim to such Governmental Authority for such refund at the Loan Parties’
expense. If any Lender, any Agent or the L/C Issuer (or Transferee) receives a
refund (including pursuant to a claim for refund made pursuant to the preceding
sentence) in respect of any Taxes or Other Taxes with respect to which any Loan
Party has paid additional amounts pursuant to this Section 2.08, it shall within
30 days from the date of such receipt pay over such refund to the Administrative
Borrower, net of all out-of-pocket expenses of such Lender, such Agent or the
L/C Issuer (or Transferee).

 

(h) The obligations of the Loan Parties and Lenders under this Section 2.08
shall survive the termination of this Agreement and the payment of the Loans and
all other amounts payable hereunder.

 

Section 2.09 LIBOR Not Determinable; Illegality or Impropriety. (a) In the
event, and on each occasion, that on or before the day on which LIBOR is to be
determined for a borrowing that is to include LIBOR Rate Loans, the
Administrative Agent has determined in good faith that, or has been advised by
the Collateral Agent or the Required Lenders that, (i) LIBOR cannot be
reasonably determined for any reason, (ii) LIBOR will not adequately and fairly
reflect the cost of maintaining LIBOR Rate Loans or (iii) Dollar deposits in the
principal amount of the applicable LIBOR Rate Loans are not available in the
interbank eurodollar market where the eurodollar and foreign currency and
exchange operations in respect of the Lenders’ LIBOR Rate Loans are then being
conducted, the Administrative Agent shall, as soon as practicable thereafter,
give written notice of such determination to the Administrative Borrower and the
other Lenders. In the event of any such determination, any request by the
Administrative Borrower for a LIBOR Rate Loan pursuant to Section 2.02 shall,
until, (i) in the case of such a determination by the Collateral Agent or the
Required Lenders, the Administrative Agent has been advised by the Collateral
Agent or the Required Lenders and the Administrative Agent has so advised the
Administrative Borrower that, or (ii) in the case of a determination by the
Administrative Agent, the Administrative Agent has advised the Administrative
Borrower and the other Lenders that, the circumstances giving rise to such
notice no longer exist, be deemed to be a request for a Reference Rate Loan.
Each determination by the Administrative Agent, the Collateral Agent and/or the
Required Lenders hereunder shall be conclusive and binding absent manifest
error.

 

(b) In the event that it shall be unlawful or improper for any Lender to make,
maintain or fund any LIBOR Rate Loan as contemplated by this Agreement, then
such Lender shall forthwith give notice thereof to the Administrative Agent and
the Administrative

 

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Borrower describing such illegality or impropriety in reasonable detail.
Effective immediately upon the giving of such notice, the obligation of such
Lender to make LIBOR Rate Loans shall be suspended for the duration of such
illegality or impropriety and, if and when such illegality or impropriety ceases
to exist, such suspension shall cease, and such Lender shall notify the
Administrative Agent and the Administrative Borrower. If any such change shall
make it unlawful or improper for any Lender to maintain any outstanding LIBOR
Rate Loan as a LIBOR Rate Loan, such Lender shall, upon the happening of such
event, notify the Administrative Agent and the Administrative Borrower, and the
Borrowers shall immediately, or if permitted by applicable law, rule,
regulation, order, decree, interpretation, request or directive, at the end of
the then current Interest Period for such LIBOR Rate Loan, convert each such
LIBOR Rate Loan into a Reference Rate Loan.

 

Section 2.10 Indemnity. (a) The Loan Parties hereby jointly and severally
indemnify each Lender against any loss or expense that such Lender actually
sustains or incurs (including, without limitation, any loss or expense incurred
by reason of the liquidation or reemployment of deposits or other funds acquired
by such Lender to fund or maintain any LIBOR Rate Loan, and including loss of
anticipated profits) as a consequence of (i) any failure by the Loan Parties to
fulfill on the date of any borrowing hereunder the applicable conditions set
forth in Article VI, (ii) any failure by the Borrowers to borrow any LIBOR Rate
Loan hereunder, to convert any Reference Rate Loan into a LIBOR Rate Loan or to
continue a LIBOR Rate Loan as such after notice of such borrowing, conversion or
continuation has been given pursuant to Section 2.02 or 2.11 hereof, (iii) any
payment, prepayment (mandatory or optional) or conversion of a LIBOR Rate Loan
required by any provision of this Agreement or otherwise made on a date other
than the last day of the Interest Period applicable thereto, (iv) any default in
payment or prepayment of the principal amount of any LIBOR Rate Loan or any part
thereof or interest accrued thereon, as and when due and payable (at the due
date thereof, by notice of prepayment or otherwise), or (v) the occurrence of
any Event of Default, including, in each such case, any loss (including, without
limitation, loss of anticipated profits) or reasonable expense sustained or
incurred in liquidating or employing deposits from third parties acquired to
effect or maintain such Loan or any part thereof as a LIBOR Rate Loan. Such loss
or reasonable expense shall include but not be limited to an amount equal to the
excess, if any, as reasonably determined by such Lender, of (i) its cost of
obtaining the funds for the Loan being paid or prepaid or converted or continued
or not borrowed or converted or continued (based on LIBOR applicable thereto)
for the period from the date of such payment, prepayment, conversion,
continuation or failure to borrow, convert or continue on the last day of the
Interest Period for such Loan (or, in the case of a failure to borrow, convert
or continue, the last day of the Interest Period for such Loan that would have
commenced on the date of such failure to borrow, convert or continue) over (ii)
the amount of interest (as reasonably determined by such Lender) that would be
realized by such Lender in re-employing the funds so paid, prepaid, converted or
continued or not borrowed, converted or continued for such Interest Period. A
certificate of any Lender setting forth in reasonable detail any amount or
amounts that such Lender is entitled to receive pursuant to this Section 2.10
and the basis for the determination of such amount or amounts shall be delivered
to the Borrowers and shall be conclusive and binding absent manifest error.

 

(b) Notwithstanding paragraph (a) of this Section 2.10, the Administrative Agent
will use reasonable efforts to minimize or reduce any such loss or expense

 

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resulting from the mandatory prepayments required by Section 2.05(c) of this
Agreement by applying all payments and prepayments to Reference Rate Loans prior
to any application of payments to LIBOR Rate Loans, provided that nothing in
this Section 2.10(b) shall affect the order of application of payments as set
forth in Section 2.05(d) or Section 5.04(b), as applicable.

 

Section 2.11 Continuation and Conversion of Loans. Subject to Section 2.09
hereof, the Borrowers shall have the right, at any time, on two (2) Business
Days prior irrevocable written notice by the Administrative Borrower to the
Administrative Agent, to continue any LIBOR Rate Loan, or any portion thereof,
into a subsequent Interest Period or to convert any Reference Rate Loan or
portion thereof into a LIBOR Rate Loan, or on one (1) Business Day prior
irrevocable written notice to the Administrative Agent, to convert any LIBOR
Rate Loan or portion thereof into a Reference Rate Loan, subject to the
following:

 

(a) no LIBOR Rate Loan may be continued as such and no Reference Rate Loan may
be converted into a LIBOR Rate Loan, when any Event of Default shall have
occurred and be continuing at such time,

 

(b) in the case of a continuation of a LIBOR Rate Loan as such or a conversion
of a Reference Rate Loan into a LIBOR Rate Loan, the aggregate principal amount
of such LIBOR Rate Loan shall not be less than $1,000,000 and in multiples of
$500,000 if in excess thereof;

 

(c) any portion of a Loan maturing or required to be repaid in less than one
month may not be converted into or continued as a LIBOR Rate Loan; and

 

(d) if any conversion of a LIBOR Rate Loan shall be effected on a day other than
the last day of an Interest Period, the Borrowers shall reimburse each Lender on
demand for any loss incurred or to be incurred or to be incurred by it in the
reemployment of the funds released by such conversion as provided in Section
2.10 hereof.

 

In the event that the Administrative Borrower shall not give notice to continue
any LIBOR Rate Loan into a subsequent Interest Period, such Loan shall
automatically become a Reference Rate Loan at the expiration of the then current
Interest Period.

 

ARTICLE III

 

LETTER OF CREDIT ACCOMMODATIONS

 

Section 3.01 Letter of Credit Guaranty.

 

(a) In order to assist the Borrowers in establishing or opening letters of
credit (each, a “Letter of Credit Accommodation”), which shall not have
expiration dates later than the date that is five (5) days prior to the Maturity
Date (or such later date as may be agreed to by the Agents, the L/C Issuer and
the Required Lenders), with the L/C Issuer, the Borrowers have requested the
Administrative Agent to join in the applications for such Letter of Credit
Accommodations and/or guarantee payment or performance of such Letter of Credit
Accommodations and any drafts thereunder through the issuance of a Letter of
Credit Guaranty, thereby lending the Administrative Agent’s credit to that of
the Borrowers, and the Administrative

 

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Agent has agreed to do so. These arrangements shall be coordinated by the
Administrative Agent, subject to the terms and conditions set forth below. The
Administrative Agent shall not be required to be the issuer of any Letter of
Credit Accommodation. The Administrative Borrower will be the account party for
the application of each Letter of Credit Accommodation, which shall be in form
and substance satisfactory to the Administrative Agent and the L/C Issuer or on
a computer transmission system approved by the Administrative Agent and the L/C
Issuer, or such other written form or computer transmission system as may from
time to time be approved by the Administrative Agent and the L/C Issuer, and
shall be duly completed in a manner and at a time reasonably acceptable to the
Administrative Agent, together with such other certificates, agreements,
documents and other papers and information as the Administrative Agent and the
L/C Issuer may reasonably request, which shall include, without limitation, the
requested date of issuance and the name and address of the beneficiary (the
“Letter of Credit Application”). In the event of any conflict between the terms
of any Letter of Credit Application and this Agreement, for purposes of this
Agreement, the terms of this Agreement shall control.

 

(b) The aggregate Letter of Credit Obligations shall not at any time exceed the
lower of (i) the difference between (A) the Availability and (B) the aggregate
principal amount of all Revolving Loans then outstanding, and (ii) the L/C
Subfacility. In addition, the terms and conditions of all Letter of Credit
Accommodations and all changes or modifications thereof by the Borrowers and/or
the L/C Issuer shall in all respects be subject to the prior approval of the
Administrative Agent in its Permitted Discretion; provided, however, that (i)
the expiry date of all Letter of Credit Accommodations shall be no later than
five (5) Business Days prior to the Maturity Date (or such later date as may be
agreed to by the Agents, the L/C Issuer and the Required Lenders), (ii) no more
than thirty (30) Letters of Credit Accommodations may be outstanding at any
time, and (iii) the Letter of Credit Accommodations and all documentation
connection therewith shall be in form and substance reasonably satisfactory to
the Administrative Agent and the L/C Issuer.

 

(c) If the Administrative Agent is obligated to advance funds under a Letter of
Credit Guaranty or in connection with a Letter of Credit Accommodation, the
Administrative Agent may immediately reimburse such disbursement by charging the
Loan Account as set forth below. In the event that the Administrative Agent does
not charge the Loan Account, the Borrowers shall, upon demand by the
Administrative Agent, immediately reimburse such disbursement to the
Administrative Agent by paying to it an amount equal to such disbursement not
later than 12:00 noon (New York City time) on the date that such disbursement is
made, if the Administrative Borrower shall have received written or telephone
notice of such disbursement prior to 11:00 a.m. (New York City time) on such
date, or, if such notice has not been received by the Administrative Borrower
prior to such time on such date, then no later than 12:00 noon (New York City
time) on the Business Day that the Administrative Borrower receives such notice,
if such notice is received prior to 11:00 a.m. (New York City time) on the date
of receipt. In the absence of such reimbursement, the Administrative Agent shall
have the right, without notice to the Borrowers, to charge the Loan Account with
the amount of such disbursement and the Administrative Agent shall have the
right, without notice to the Borrowers, to charge the Loan Account with the
amount of any and all other Indebtedness, liabilities and obligations of any
kind (including indemnification for breakage costs, capital adequacy and reserve
requirement charges) incurred by the Administrative Agent or the Revolving Loan
Lenders under the Letter of Credit Guaranty or incurred by the L/C Issuer with
respect to a Letter of Credit

 

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Accommodation at the earlier of (i) payment by the Administrative Agent or the
Revolving Loan Lenders under the Letter of Credit Guaranty or (ii) the
occurrence of any Default or Event of Default. Any amount charged to the Loan
Account shall be deemed a Revolving Loan hereunder made by the Revolving Loan
Lenders to the Borrowers, funded by the Administrative Agent on behalf of the
Revolving Loan Lenders and subject to Section 2.02. Any charges, fees,
commissions, costs and expenses charged to the Administrative Agent for the
Borrowers’ account by the L/C Issuer in connection with or arising out of Letter
of Credit Accommodations or transactions relating thereto will be charged to the
Loan Account in full when charged to or paid by the Administrative Agent and,
when charged, shall be conclusive on the Borrowers absent manifest error. Each
of the Revolving Loan Lenders and each Borrower agrees that the Administrative
Agent shall have the right to make such charges regardless of whether any
Default or Event of Default shall have occurred and be continuing or whether any
of the conditions precedent in Section 6.01(j) have been satisfied. If any such
reimbursement of disbursements made by the Administrative Agent is not made by
the Administrative Agent by charging the Loan Account and the Administrative
Borrower requests and the Borrowers are entitled to obtain a Revolving Loan to
reimburse such disbursements on the date such reimbursement is due, such
reimbursement shall be made no later than the time that the Administrative Agent
makes the proceeds of the Revolving Loan available to the Borrowers.

 

(d) Each Loan Party understands that the Letter of Credit Guaranties may require
the Administrative Agent and/or the Lenders to indemnify the L/C Issuer for
certain costs or liabilities arising out of claims by any Borrower against such
L/C Issuer. Each Loan Party unconditionally indemnifies each Agent and each
Lender and holds each Agent and each Lender harmless from any and all loss,
claim or liability incurred by any Agent or any Lender arising from any
transaction or occurrences relating to Letter of Credit Accommodations, any
drafts or acceptances thereunder, the Collateral relating thereof, and all
Obligations in respect thereto, including any such loss or claim due to any
action taken by the L/C Issuer, other than for any such loss, claim or liability
arising out of the gross negligence or willful misconduct of the L/C Issuer, any
Agent or any Lender as determined by a final judgment of a court of competent
jurisdiction. Each Loan Party further agrees to hold each Agent and each Lender
harmless from any errors of omission, negligence, or misconduct (but not gross
negligence or willful misconduct, as finally determined by a court of competent
jurisdiction) by the L/C Issuer. Each Borrower agrees to be bound by the L/C
Issuer’s regulations and interpretations of any Letter of Credit Accommodation
that is the subject of a Letter of Credit Guaranty and opened to or for any
Borrower’s account or by the Administrative Agent’s interpretations of any
Letter of Credit Accommodation issued for any Borrower’s account, even though
such interpretation may be different from such Borrower’s own, and each Borrower
understands and agrees that the Lenders, the Agents and the L/C Issuer shall not
be liable for any error, negligence, or mistake, whether of omission or
commission, in following each such Borrower’s instructions or those contained in
the Letter of Credit Accommodation or any modifications, amendments, or
supplements thereto. Each Loan Party’s unconditional obligations to each Agent,
each Lender and the L/C Issuer with respect to Letter of Credit Accommodations
hereunder shall not be modified or diminished for any reason or in any manner
whatsoever, other than as a result of such Agent’s, such Lender’s or the L/C
Issuer’s gross negligence or willful misconduct as determined by a final
judgment of a court of competent jurisdiction. Each Loan Party agrees that any
charges incurred by the Administrative Agent or the L/C Issuer for such Loan
Party’s account hereunder may be charged to the Loan Account.

 

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(e) Upon any payments made to the L/C Issuer under the Letter of Credit
Guaranty, the Administrative Agent or the Revolving Loan Lenders, as the case
may be, shall, without prejudice to their rights under this Agreement (including
that such unreimbursed amounts shall constitute Revolving Loans hereunder),
acquire by subrogation, any rights, remedies, duties or obligations granted or
undertaken by any Borrower in favor of the L/C Issuer in any application for
Letter of Credit Accommodations, any standing agreement relating to Letter of
Credit Accommodations or otherwise, all of which shall be deemed to have been
granted to the Administrative Agent and the Revolving Loan Lenders and apply in
all respects to the Administrative Agent and the Revolving Loan Lenders and
shall be in addition to any rights, remedies, duties or obligations contained
herein.

 

Section 3.02 Participations.

 

(a) Immediately upon issuance by the L/C Issuer of any Letter of Credit
Accommodation pursuant to this Agreement, each Revolving Loan Lender shall be
deemed to have irrevocably and unconditionally purchased and received from the
Administrative Agent, without recourse or warranty, an undivided interest and
participation, to the extent of such Revolving Loan Lender’s Pro Rata Share, in
all obligations of the Administrative Agent in such Letter of Credit
Accommodation including, without limitation, all Reimbursement Obligations of
the Borrowers with respect thereto pursuant to the Letter of Credit Guaranty or
otherwise.

 

(b) In the event that the Administrative Agent makes any payment in respect of
the Letter of Credit Guaranty and the Borrowers shall not have repaid such
amounts to the Administrative Agent, the Administrative Agent shall charge the
Loan Account in the amount of the Reimbursement Obligation, in accordance with
Section 3.01(c) and Section 5.02 of this Agreement.

 

(c) The obligations of a Revolving Loan Lender to make payments to the
Administrative Agent for the account of the Administrative Agent, the Revolving
Loan Lenders or the L/C Issuer with respect to a Letter of Credit Accommodation
shall be irrevocable, without any qualification or exception whatsoever and
shall be made in accordance with the terms and conditions of this Agreement
under all circumstances, including, without limitation, any of the following
circumstances:

 

(i) any lack of validity or enforceability of this Agreement or any of the other
Loan Documents;

 

(ii) the existence of any claim, setoff, defense or other right which any
Borrower or any other Loan Party may have at any time against a beneficiary
named in such Letter of Credit Accommodation or any transferee of such Letter of
Credit Accommodation (or any Person for whom any such transferee may be acting),
any Agent, any Lender, or any other Person, whether in connection with this
Agreement, such Letter of Credit Accommodation, the transactions contemplated
herein or any unrelated transactions (including any underlying transactions
between any Borrower or any other Loan Party or any other party and the
beneficiary named in such Letter of Credit Accommodation);

 

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(iii) any draft, certificate or any other document presented under such Letter
of Credit Accommodation proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect;

 

(iv) the surrender or impairment of any security for the performance or
observance of any of the terms of any of the Loan Documents;

 

(v) any failure by any Agent to provide any notices required pursuant to this
Agreement relating to such Letter of Credit Accommodation;

 

(vi) any payment by the L/C Issuer under such Letter of Credit Accommodation
against presentation of a draft or certificate which does not comply with the
terms of such Letter of Credit Accommodation; or

 

(vii) the occurrence of any Default or Event of Default.

 

Section 3.03 Letter of Credit Accommodations.

 

(a) The Administrative Borrower on behalf of the Borrowers may, upon reasonable
notice in advance of such issuance but, in any event, not later than 12:00 noon,
New York City time, at least two (2) Business Days in advance of the issuance
thereof, request the Administrative Agent to assist the Borrowers in
establishing or opening a Letter of Credit Accommodation by delivering to the
Administrative Agent, with a copy to the L/C Issuer, a Letter of Credit
Application, together with any necessary related documents. The Administrative
Agent shall not provide support, pursuant to the Letter of Credit Guaranty, if
the Administrative Agent shall have received written notice from the Collateral
Agent or the Required Revolving Loan Lenders on the Business Day immediately
preceding the proposed issuance date for such Letter of Credit Accommodation
that one or more of the conditions precedent in Section 6.02 will not have been
satisfied on such date, and the Administrative Agent shall not otherwise be
required to determine that, or take notice whether, the conditions precedent set
forth in Section 6.02 have been satisfied.

 

(b) (i) The Borrowers shall pay to the Administrative Agent for the account of
the Lenders (A) for any Letter of Credit Accommodation issued hereunder, a
non-refundable fee equal to 3.50% per annum of the stated amount of such Letter
of Credit Accommodation, payable monthly in arrears after the date such Letter
of Credit Accommodation is issued and (B) for any amendment to an existing
Letter of Credit Accommodation that increases the stated amount of such Letter
of Credit Accommodation, a non-refundable fee equal to 3.50% per annum of the
increase in the stated amount of such Letter of Credit Accommodation, payable
monthly in arrears after the date of such increase (the “Letter of Credit
Fees”); provided, that, the Administrative Agent may, and upon the written
direction of the Required Revolving Loan Lenders shall, require the Borrowers to
pay the Administrative Agent such Letter of Credit Fee, at a rate equal to 2.0%
plus the per annum rate otherwise applicable thereto on such daily outstanding
balance for the period from and after the date of the occurrence of an Event of
Default for so long as such Event of Default is continuing as determined by the
Collateral Agent and the Administrative Agent.

 

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(ii) L/C Issuer Charges. The Borrowers shall pay to the Administrative Agent any
and all customary charges assessed by the L/C Issuer in connection with the
issuance, administration, amendment, payment or cancellation of Letter of Credit
Accommodations.

 

(c) Charges to the Loan Account. Each Borrower hereby authorizes the
Administrative Agent to, and the Administrative Agent may, from time to time,
charge the Loan Account pursuant to Section 3.01(c) and Section 5.02 of this
Agreement with the amount of any Letter of Credit Accommodation fees or charges
due under this Section 3.03.

 

(d) Existing Letters of Credit. Schedule 3.03(d) hereto contains a list of all
letters of credit outstanding immediately preceding the Effective Date pursuant
to the Existing DIP Credit Agreement. For the period from and after the
Effective Date, each such letter of credit set forth on Schedule 3.03(d),
including any extension or renewal thereof that remains outstanding on the
Effective Date shall constitute a “Letter of Credit Accommodation” issued for
the account of the Borrowers, as the case may be, for all purposes of this
Agreement, including, without limitation, calculations of Availability, the
Borrowing Base, Letter of Credit Fees, Letter of Credit Obligations and
Reimbursement Obligations.

 

ARTICLE IV

 

[Intentionally Omitted.]

 

ARTICLE V

 

FEES, PAYMENTS AND OTHER COMPENSATION

 

Section 5.01 Audit and Collateral Monitoring Fees. Each Borrower acknowledges
that pursuant to Section 8.01(f), representatives of the Agents (accompanied by
representatives of any Lender that wishes to participate) may visit any or all
of the Loan Parties and/or conduct audits, inspections, valuations and/or field
examinations of any or all of the Loan Parties at any time and from time to time
in a manner so as not to unduly disrupt the business of the Loan Parties. The
Borrowers agrees to pay (a) $750 per day per examiner plus the examiner’s
out-of-pocket costs and reasonable expenses incurred in connection with all such
visits, audits, inspections, valuations and field examinations and (b) the
out-of-pocket cost of all visits, audits, inspections, valuations and field
examinations conducted by a third party on behalf of the Agents; provided, that,
in the absence of an Event of Default, the Borrowers shall not be obligated to
pay for more than four field examinations in any 12 month period; provided,
however, that after the occurrence and during the continuance of an Event of
Default, the Borrowers shall pay for all field examinations. Upon the request of
the Administrative Borrower, the Administrative Agent shall provide the
Administrative Borrower with a reasonably detailed report of any expenses or
costs referred to in this Section 5.01, provided that Administrative Agent shall
have the right to charge the Loan Account prior to giving such invoice to the
Administrative Borrower.

 

Section 5.02 Payments; Computations and Statements. (a) The Borrowers will make
each payment under this Agreement not later than 12:00 noon (New York City time)
on the

 

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day when due, in lawful money of the United States of America and in immediately
available funds, to the Administrative Agent’s Account. All payments received by
the Administrative Agent after 12:00 noon (New York City time) on any Business
Day will be credited to the Loan Account on the next succeeding Business Day.
All payments shall be made by the Borrowers without set-off, counterclaim,
deduction or other defense to the Agents and the Lenders. Except as provided in
Section 2.02(c), after receipt, the Administrative Agent will promptly
thereafter cause to be distributed like funds relating to the payment of
principal ratably to the Lenders in accordance with their Pro Rata Shares and
like funds relating to the payment of any other amount payable to any Lender to
such Lender, in each case to be applied in accordance with the terms of this
Agreement, provided that the Administrative Agent will cause to be distributed
all interest and fees received from or for the account of the Borrowers not less
than once each month and in any event promptly after receipt thereof. The
Lenders and the Borrowers hereby authorize the Administrative Agent to, and the
Administrative Agent may, from time to time, charge the Loan Account of the
Borrowers with any amount due and payable (and unpaid) by the Borrowers under
any Loan Document. Each of the Lenders and each Borrower agrees that the
Administrative Agent shall have the right to make such charges whether or not
any Default or Event of Default shall have occurred and be continuing or whether
any of the conditions precedent in Section 6.02 have been satisfied. Any amount
charged to the Loan Account of the Borrowers shall be deemed a Revolving Loan
hereunder made by the Revolving Loan Lenders to the Borrowers, funded by the
Administrative Agent on behalf of the Lenders and subject to Section 2.02(c).
The Lenders and the Borrowers confirm that any charges which the Administrative
Agent may so make to the Loan Account of the Borrowers as herein provided will
be made as an accommodation to the Borrowers and solely at the Administrative
Agent’s discretion, provided that the Administrative Agent shall, from time to
time upon the request of the Collateral Agent, charge the Loan Account of the
Borrowers with any amount due and payable (and unpaid) under any Loan Document.
Whenever any payment to be made under any such Loan Document shall be stated to
be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day and such extension of time shall in such case be
included in the computation of interest or fees, as the case may be. All
computations of fees shall be made by the Administrative Agent on the basis of a
year of 360 days for the actual number of days (including the first day but
excluding the last day) occurring in the period for which such fees are payable.
Each determination by the Administrative Agent of an interest rate or fees
hereunder shall be conclusive and binding for all purposes in the absence of
manifest error.

 

(b) The Administrative Agent shall provide the Administrative Borrower, promptly
after the end of each calendar month, an accounting (in the form from time to
time used by the Administrative Agent) of the Loan Account of the Borrowers
during such month, including the amount of any charges to the Loan Account made
during such month on account of fees, commissions, expenses and other
Obligations. All entries on any such statement shall be presumed to be correct
and, thirty (30) days after the same is sent, shall be final and conclusive
absent manifest error.

 

Section 5.03 Sharing of Payments, Etc. Except as provided in Section 2.02(c), if
any Lender shall obtain any payment (whether voluntary, involuntary, through the
exercise of any right of set-off, or otherwise) on account of any Obligation in
excess of its share of payments in accordance with the terms of this Agreement,
such Lender shall forthwith purchase from the

 

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other Lenders such participations in such similar obligations held by them as
shall be necessary to cause such purchasing Lender to share the excess payment
with the other Lenders in accordance with and to the extent required by the
terms of this Agreement; provided, however, that if all or any portion of such
excess payment is thereafter recovered from such purchasing Lender, such
purchase from each Lender shall be rescinded and such Lender shall repay to the
purchasing Lender the purchase price to the extent of such recovery together
with an amount equal to such Lender’s ratable share (according to the proportion
of (a) the amount of such Lender’s required repayment to (b) the total amount so
recovered from the purchasing Lender of any interest or other amount paid by the
purchasing Lender in respect of the total amount so recovered). Each Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section 5.03 may, to the fullest extent permitted by law,
exercise all of its rights (including the Lender’s right of set-off) with
respect to such participation as fully as if such Lender were the direct
creditor of the Borrowers in the amount of such participation.

 

Section 5.04 Apportionment of Payments. Subject to Section 2.02(c):

 

(a) All payments of principal and interest in respect of outstanding Loans, all
payments in respect of the Letter of Credit Obligations, all payments of fees
(other than the fees set forth in Section 2.06 hereof and the Fee Letter, the
Letter of Credit Fees provided for in Section 3.03(b) and the audit and
collateral monitoring fee provided for in Section 5.01) and all other payments
in respect of any other Obligations, shall be allocated by the Administrative
Agent among such of the Lenders as are entitled thereto, in proportion to their
respective Pro Rata Shares or otherwise as provided herein or, in respect of
payments not made on account of Loans or Letter of Credit Obligations, as
designated by the Person making payment when the payment is made.

 

(b) After the occurrence and during the continuance of an Event of Default, the
Administrative Agent may, and upon the direction of the Required Revolving Loan
Lenders, the Required Term A Lenders or the Required Term B Lenders, or after an
acceleration of all or a portion of the Loans, the Administrative Agent shall,
apply all payments in respect of any Obligations and all proceeds of the
Collateral as follows:

 

(i) except to the extent provided in clause (iii) below, with respect to
Revolver Priority Collateral Proceeds and payments made using Revolver Priority
Collateral Proceeds, (A) first, ratably to pay the Obligations in respect of any
fees (including any fees or charges assessed by the L/C Issuer), expense
reimbursements, indemnities and other amounts then due to the Agents or the L/C
Issuer until paid in full; (B) second, ratably to pay the Obligations in respect
of any fees (excluding any Applicable Prepayment Premium) (including Letter of
Credit Fees payable to the Revolving Loan Lenders), expense reimbursements and
indemnities then due to the Revolving Loan Lenders until paid in full; (C)
third, ratably to pay interest due in respect of the Agent Advances until paid
in full; (D) fourth, ratably to pay principal of the Agent Advances until paid
in full; (E) fifth, ratably to pay interest due in respect of the Revolving
Loans and Letter of Credit Obligations until paid in full; (F) sixth, ratably to
pay principal of the Revolving Loans and Letter of Credit Obligations (or, to
the extent such Letter of Credit Obligations are contingent, to provide cash
collateral in an amount equal to 105% of such Letter of Credit Obligations)
until paid in full; (G) seventh, ratably to pay the Obligations in respect of
any fees (excluding any Applicable Prepayment Premium), expense reimbursements
and indemnities then due to the Term Loan A Lenders until paid in full; (H)

 

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eighth, ratably to pay interest due in respect of the Term Loan A until paid in
full; (I) ninth, ratably to pay principal of the Term Loan A until paid in full;
(J) tenth, ratably to pay the Obligations in respect of any fees (excluding any
Applicable Prepayment Premium), expense reimbursements and indemnities then due
to the Term Loan B Lenders until paid in full; (K) eleventh, ratably to pay
interest due in respect of the Term Loan B until paid in full; (L) twelfth,
ratably to pay principal of the Term Loan B until paid in full; (M) thirteenth,
ratably to pay any Applicable Prepayment Premium then due and payable in respect
of the Revolving Credit Commitment until paid in full, (N) fourteenth, ratably
to pay any Applicable Prepayment Premium then due and payable in respect of the
Term Loan A until paid in full, (O) fifteenth, ratably to pay any Applicable
Prepayment Premium then due and payable in respect of the Term Loan B until paid
in full, and (P) sixteenth, to the ratable payment of all other Obligations
(including, without limitation, Bank Services Obligations) then due and payable
until paid in full; and

 

(ii) except to the extent provided in clause (iii) below, with respect to Term
Priority Collateral Proceeds and payments made using Term Priority Collateral
Proceeds, (A) first, ratably to pay the Obligations in respect of any fees,
expense reimbursements, indemnities and other amounts then due to the Agents
until paid in full; (B) second, ratably to pay the Obligations in respect of any
fees (excluding any Applicable Prepayment Premium), expense reimbursements and
indemnities then due to the Term Loan A Lenders until paid in full; (C) third,
ratably to pay interest due in respect of the Agent Advances until paid in full;
(D) fourth, ratably to pay principal of the Agent Advances until paid in full;
(E) fifth, ratably to pay interest due in respect of the Term Loan A until paid
in full; (F) sixth, ratably to pay principal of the Term Loan A until paid in
full; (G) seventh, ratably to pay the Obligations in respect of any fees
(excluding any Applicable Prepayment Premium) (including Letter of Credit Fees
and charges assessed in connection with any Letter of Credit Accommodations)
payable to the Revolving Loan Lenders), expense reimbursements and indemnities
then due to the Revolving Loan Lenders until paid in full; (H) eighth, ratably
to pay interest due in respect of the Revolving Loans and Letter of Credit
Obligations until paid in full; (I) ninth, ratably to pay principal of the
Revolving Loans and Letter of Credit Obligations (or, to the extent such Letter
of Credit Obligations are contingent, to provide cash collateral in an amount
equal to 105% of such Letter of Credit Obligations) until paid in full; (J)
tenth, ratably to pay the Obligations in respect of any fees (excluding any
Applicable Prepayment Premium), expense reimbursements and indemnities then due
to the Term Loan B Lenders until paid in full; (K) eleventh, ratably to pay
interest due in respect of the Term Loan B until paid in full; (L) twelfth,
ratably to pay principal of the Term Loan B until paid in full; (M) thirteenth,
ratably to pay any Applicable Prepayment Premium then due and payable in respect
of the Term Loan A until paid in full, (N) fourteenth, ratably to pay any
Applicable Prepayment Premium then due and payable in respect of the Revolving
Credit Commitment until paid in full, (O) fifteenth, ratably to pay any
Applicable Prepayment Premium then due and payable in respect of the Term Loan B
until paid in full, and (P) sixteenth, to the ratable payment of all other
Obligations (including, without limitation, Bank Services Obligations) then due
and payable until paid in full.

 

(iii) with respect to the Proceeds of any Disposition of all or substantially
all of the assets or Capital Stock of any Person or any insurance which
Disposition or proceeds of insurance includes both (x) Revolver Priority
Collateral and (y) Term Priority Collateral, such Proceeds and payments using
such Proceeds shall be applied as follows: (A)

 

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first, ratably to pay the Obligations in respect of any fees (including any fees
or charges assessed by the L/C Issuer), expense reimbursements, indemnities and
other amounts then due to the Agents or the L/C Issuer until paid in full; (B)
second, ratably to pay interest due in respect of the Agent Advances until paid
in full; (C) third, ratably to pay principal of the Agent Advances until paid in
full; (D) fourth, an amount equal to the book value of such Accounts and
Inventory disposed of or in respect of which such insurance proceeds are
collected constituting Revolver Priority Collateral (determined at the time of
such Disposition or event resulting in such insurance proceeds) shall be applied
ratably in accordance with (1) first, clause (B) of Section 5.04(b)(i) until
paid in full and (2) second, clauses (E) through (P) of Section 5.04(b)(i) until
paid in full; and (E) fifth, the remaining Proceeds shall be applied ratably in
accordance with (1) first, clause (B) of Section 5.04(b)(ii) until paid in full
and (2) second, clauses (E) through (P) of Section 5.04(b)(ii) until paid in
full.

 

(c) In each instance, so long as no Event of Default has occurred and is
continuing and the Administrative Agent has not elected to or has not been
directed to apply payments and other Proceeds of Collateral in accordance with
Section 5.04(b) and no acceleration of all or a portion of the Loans has
occurred, Section 5.04(b) shall not be deemed to apply to any payment by the
Borrowers specified by the Administrative Borrower to the Administrative Agent
to be for the payment of the principal of or interest on the Term Loan A or the
Term Loan B or other related Obligations then due and payable under any
provision of this Agreement or the payment of all or part of the principal of
the Term Loan A or the Term Loan B in accordance with the terms and conditions
of Section 2.05(d).

 

(d) For the purposes of (i) Section 5.04(b) (other than clauses (P) of Sections
5.04(b)(i) and 5.04(b)(ii) and clause (P) of those sections as incorporated into
Section 5.04(b)(iii)), “paid in full” means payment in cash of all amounts owing
under the Loan Documents according to the terms thereof, including loan fees,
service fees, professional fees, interest, default interest, interest on
interest, expense reimbursements and indemnity payments then due and payable,
whether or not any of the foregoing would be or is allowed or disallowed in
whole or in part in any Insolvency Proceeding, provided, that, “paid in full”
shall exclude default or overdue interest (but not any other interest), loan
fees, service fees, professional fees, expense reimbursements, or other fees and
expenses, each arising from or related to a default to the extent disallowed in
any Insolvency Proceeding, and (ii) clauses (P) of Sections 5.04(b)(i) and
5.04(b)(ii) and clause (P) of those sections as incorporated in Section
5.04(b)(iii), “paid in full” means payment in cash of all amounts owing under
the Loan Documents according to the terms thereof, including loan fees, service
fees, professional fees, interest, default interest, interest on interest,
expense reimbursements and indemnity payments then due and payable whether or
not any of the foregoing would be or is allowed or disallowed in whole or in
part in any Insolvency Proceeding.

 

Section 5.05 Increased Costs and Reduced Return. (a) If any Lender, any Agent or
the L/C Issuer shall have determined that the adoption or implementation of, or
any change in, any law, rule, treaty or regulation, or any policy, guideline or
directive of, or any change in, the interpretation or administration thereof by,
any court, central bank or other administrative or Governmental Authority, or
compliance by any Lender, any Agent or the L/C Issuer or any Person controlling
any such Lender, any such Agent or the L/C Issuer with any directive of, or
guideline from, any central bank or other Governmental Authority or the
introduction of, or change in, any accounting principles applicable to any
Lender, any Agent or

 

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the L/C Issuer or any Person controlling any such Lender, any such Agent or the
L/C Issuer (in each case, whether or not having the force of law), shall (i)
subject any Lender, any Agent or the L/C Issuer, or any Person controlling any
such Lender, any such Agent or the L/C Issuer to any tax, duty or other charge
with respect to this Agreement or any Loan made by such Lender or such Agent or
any Letter of Credit Accommodation issued by the L/C Issuer, or change the basis
of taxation of payments to any Lender, any Agent or the L/C Issuer or any Person
controlling any such Lender, any such Agent or the L/C Issuer of any amounts
payable hereunder (except for taxes on the overall net income of any Lender, any
Agent or the L/C Issuer or any Person controlling any such Lender, any such
Agent or the L/C Issuer), (ii) impose, modify or deem applicable any reserve,
special deposit or similar requirement against any Loan, any Letter of Credit
Accommodation or against assets of or held by, or deposits with or for the
account of, or credit extended by, any Lender, any Agent or the L/C Issuer or
any Person controlling any such Lender, any such Agent or the L/C Issuer or
(iii) impose on any Lender, any Agent or the L/C Issuer or any Person
controlling any such Lender, any such Agent or the L/C Issuer any other
condition regarding this Agreement or any Loan or Letter of Credit
Accommodation, and the result of any event referred to in clauses (i), (ii) or
(iii) above shall be to increase the cost to any Lender, any Agent or the L/C
Issuer of making any Loan, issuing, guaranteeing or participating in any Letter
of Credit Accommodation, or agreeing to make any Loan or issue, guaranty or
participate in any Letter of Credit Accommodation, or to reduce any amount
received or receivable by any Lender, any Agent or the L/C Issuer hereunder,
then, upon demand by any such Lender, any such Agent or the L/C Issuer, the
Borrowers shall pay to such Lender, such Agent or the L/C Issuer such additional
amounts as will compensate such Lender, such Agent or the L/C Issuer for such
increased costs or reductions in amount; provided, that the Borrowers shall not
be required to compensate any Lender, any Agent or the L/C Issuer for any
amounts incurred more than 180 days prior to the date such Person notifies the
Administrative Borrower that it intends to claim such compensation therefor.

 

(b) If any Lender, any Agent or the L/C Issuer shall have determined that any
Capital Guideline or the adoption or implementation of, or any change in, any
Capital Guideline by the Governmental Authority charged with the interpretation
or administration thereof, or compliance by any Lender, any Agent or the L/C
Issuer or any Person controlling such Lender, such Agent or the L/C Issuer with
any Capital Guideline or with any request or directive of any such Governmental
Authority with respect to any Capital Guideline, or the implementation of, or
any change in, any applicable accounting principles (in each case, whether or
not having the force of law), either (i) affects or would affect the amount of
capital required or expected to be maintained by any Lender, any Agent or the
L/C Issuer or any Person controlling such Lender, such Agent or the L/C Issuer,
and any Lender, any Agent or the L/C Issuer determines that the amount of such
capital is increased as a direct or indirect consequence of any Loans made or
maintained, Letter of Credit Accommodations issued or any guaranty or
participation with respect thereto, any Lender’s, any Agent’s or the L/C
Issuer’s or any such other controlling Person’s other obligations hereunder, or
(ii) has or would have the effect of reducing the rate of return on any
Lender’s, any Agent’s or the L/C Issuer’s any such other controlling Person’s
capital to a level below that which such Lender, such Agent or the L/C Issuer or
such controlling Person could have achieved but for such circumstances as a
consequence of any Loans made or maintained, Letter of Credit Accommodations
issued, or any guaranty or participation with respect thereto or any agreement
to make Loans, to issue Letter of Credit Accommodations or such Lender’s, such
Agent’s or the L/C Issuer’s or such other controlling Person’s other obligations
hereunder (in each

 

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case, taking into consideration, such Lender’s, such Agent’s or the L/C Issuer’s
or such other controlling Person’s policies with respect to capital adequacy),
then, upon demand by any Lender, any Agent or the L/C Issuer, the Borrowers
shall pay to such Lender, such Agent or the L/C Issuer from time to time such
additional amounts as will compensate such Lender, such Agent or the L/C Issuer
for such cost of maintaining such increased capital or such reduction in the
rate of return on such Lender’s, such Agent’s or the L/C Issuer’s or such other
controlling Person’s capital; provided, that the Borrowers shall not be required
to compensate any Lender, any Agent or the L/C Issuer for any amounts incurred
more than 180 days prior to the date such Person notifies the Administrative
Borrower that it intends to claim such compensation therefor.

 

(c) All amounts payable under this Section 5.05 shall bear interest from the
date that is ten (10) Business Days after the date of demand by any Lender, any
Agent or the L/C Issuer until payment in full to such Lender, such Agent or the
L/C Issuer at the Reference Rate. A certificate of such Lender, such Agent or
the L/C Issuer claiming compensation under this Section 5.05, specifying the
event herein above described and the nature of such event shall be submitted by
such Lender, such Agent or the L/C Issuer to the Administrative Borrower,
setting forth the additional amount due and an explanation of the calculation
thereof, and such Lender’s, such Agent’s or the L/C Issuer’s reasons for
invoking the provisions of this Section 5.05, and shall be final and conclusive
absent manifest error.

 

Section 5.06 Joint and Several Liability of the Borrowers. (a) Notwithstanding
anything in this Agreement or any other Loan Document to the contrary, each of
the Borrowers hereby accepts joint and several liability hereunder and under the
other Loan Documents in consideration of the financial accommodations to be
provided by the Agents and the Lenders under this Agreement and the other Loan
Documents, for the mutual benefit, directly and indirectly, of each of the
Borrowers and in consideration of the undertakings of the other Borrowers to
accept joint and several liability for the Obligations. Each of the Borrowers,
jointly and severally, hereby irrevocably and unconditionally accepts, not
merely as a surety but also as a co-debtor, joint and several liability with the
other Borrowers, with respect to the payment and performance of all of the
Obligations (including, without limitation, any Obligations arising under this
Section 5.06), it being the intention of the parties hereto that all of the
Obligations shall be the joint and several obligations of each of the Borrowers
without preferences or distinction among them. If and to the extent that any of
the Borrowers shall fail to make any payment with respect to any of the
Obligations as and when due or to perform any of the Obligations in accordance
with the terms thereof, then in each such event, the other Borrowers will make
such payment with respect to, or perform, such Obligation. Subject to the terms
and conditions hereof, the Obligations of each of the Borrowers under the
provisions of this Section 5.06 constitute the absolute and unconditional, full
recourse Obligations of each of the Borrowers, enforceable against each such
Person to the full extent of its properties and assets, irrespective of the
validity, regularity or enforceability of this Agreement, the other Loan
Documents or any other circumstances whatsoever.

 

(b) The provisions of this Section 5.06 are made for the benefit of the Agents,
the Lenders and their successors and assigns, and may be enforced by them from
time to time against any or all of the Borrowers as often as occasion therefor
may arise and without requirement on the part of the Agents, the Lenders or such
successors or assigns first to marshal any of its or their claims or to exercise
any of its or their rights against any of the other Borrowers

 

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or to exhaust any remedies available to it or them against any of the other
Borrowers or to resort to any other source or means of obtaining payment of any
of the Obligations hereunder or to elect any other remedy. The provisions of
this Section 5.06 shall remain in effect until all of the Obligations shall have
been paid in full or otherwise fully satisfied.

 

(c) Each of the Borrowers hereby agrees that it will not enforce any of its
rights of contribution or subrogation against the other Borrowers with respect
to any liability incurred by it hereunder or under any of the other Loan
Documents, any payments made by it to the Agents or the Lenders with respect to
any of the Obligations or any Collateral, until such time as all of the
Obligations have been paid in full in cash. Any claim which any Borrower may
have against any other Borrower with respect to any payments to the Agents or
the Lenders hereunder or under any other Loan Documents are hereby expressly
made subordinate and junior in right of payment, without limitation as to any
increases in the Obligations arising hereunder or thereunder, to the prior
payment in full in cash of the Obligations.

 

ARTICLE VI

 

CONDITIONS TO LOANS

 

Section 6.01 Conditions Precedent to Effectiveness. This Agreement shall become
effective as of the Business Day (the “Effective Date”) when each of the
following conditions precedent shall have been satisfied in a manner
satisfactory to the Administrative Agent and the Collateral Agent:

 

(a) Confirmation Order; Plan of Reorganization. (i) The Confirmation Order shall
have been entered by the Bankruptcy Court, (ii) the Administrative Agent and
Collateral Agent shall have received a copy of the Confirmation Order and Plan
of Reorganization, certified as true, correct and complete by the clerk of the
Bankruptcy Court and an Authorized Officer of the Administrative Borrower, (iii)
the Confirmation Order and the Plan of Reorganization shall each be in full
force and effect and shall not have been reversed, modified, amended, stayed,
vacated or subject to appeal absent prior written consent of the Agents, the
Required Lenders and the Borrowers, (iv) all conditions precedent to the
effectiveness of the Plan of Reorganization shall have been satisfied (or duly
waived with the prior written consent of the Agents and the Required Lenders),
including, without limitation, the requirement that the Borrowers receive
proceeds equal to or in excess of $85,000,000 from the issuance of Preferred
Stock, (v) the Agents shall be satisfied that the Bankruptcy Court’s retention
of jurisdiction under the Confirmation Order will not govern the enforcement of
the Loan Documents, (vi) the MLO Contract, the MLO Amendment, and the MLO
Guaranty, each in form and substance satisfactory to the Agents, shall have been
duly executed by the parties thereto, and (vii) the Plan of Reorganization shall
have become effective in accordance with its terms.

 

(b) Payment of Fees, Etc. The Borrowers shall have paid on or before the date of
this Agreement all fees, costs, expenses and taxes then payable pursuant to
Section 2.06, the Fee Letter and Section 13.04.

 

(c) Representations and Warranties; No Event of Default. The following
statements shall be true and correct: (i) the representations and warranties
contained in

 

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ARTICLE VII and in each other Loan Document, certificate or other writing
delivered to any Agent, any Lender or the L/C Issuer pursuant hereto or thereto
on or prior to the Effective Date are true and correct on and as of the
Effective Date as though made on and as of such date and (ii) no Default or
Event of Default shall have occurred and be continuing on the Effective Date or
would result from this Agreement or the other Loan Documents becoming effective
in accordance with its or their respective terms.

 

(d) Legality. The making of the initial Loans or the issuance of any Letter of
Credit Accommodations shall not contravene any law, rule or regulation
applicable to any Agent, any Lender or the L/C Issuer.

 

(e) Delivery of Documents. The Agents shall have received on or before the
Effective Date the following, each in form and substance satisfactory to the
Agents and, unless indicated otherwise, dated the Effective Date:

 

(i) a Security Agreement, duly executed by each Loan Party;

 

(ii) a Pledge Agreement, duly executed by each Loan Party, together with the
original stock certificates representing all of the voting Capital Stock of the
Loan Parties’ Subsidiaries and all intercompany promissory notes and other
promissory notes made in favor of one or more of the Loan Parties, accompanied
by undated stock powers executed in blank and other proper instruments of
transfer;

 

(iii) a Mortgage (including, without limitation, leasehold mortgages), duly
executed by the applicable Loan Party, with respect to each of the Facilities
(except for those Facilities that are not required to be mortgaged as identified
on Schedule 7.01(o), together with evidence of the recording of the Mortgage in
such office or offices as may be necessary or, in the opinion of the Collateral
Agent, desirable to perfect the Lien purported to be created thereby or to
otherwise protect the rights of the Collateral Agent and the Lenders thereunder
(or, if such recording shall occur following the Effective Date, the issuance of
a Title Insurance Policy with respect to such Mortgage that provides the
Collateral Agent with “gap” coverage with respect to the recording of such
Mortgage); provided, however, that the Collateral Agent will not record a
Mortgage with respect to the Facilities located in Velarde, New Mexico and Kings
Mountain, North Carolina, provided further that, the Collateral Agent may, in
the exercise of its sole discretion, record a Mortgage on such Facilities
(subject to obtaining any required landlord consent as reasonably determined by
the Collateral Agent) upon the earlier of (a) the occurrence of an Event of
Default, and (b) 90 days after the Effective Date, in each case if such Facility
has not been sold in accordance with the terms of this Agreement on or prior to
such date;

 

(iv) a Title Insurance Policy with respect to each of the Mortgages required to
be delivered in accordance with clause (iii) above, dated as of the Effective
Date (other than for the Facilities located in Velarde, New Mexico and Kings
Mountain, North Carolina);

 

(v) the Fee Letter, duly executed by the Borrowers;

 

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(vi) appropriate financing statements on UCC-1 duly filed in such office or
offices as may be necessary or, in the opinion of the Collateral Agent,
desirable to perfect the security interests purported to be created by each
Security Agreement, each Pledge Agreement and each Mortgage;

 

(vii) certified copies of request for copies of information on Form UCC-11,
listing all effective financing statements which name as debtor any Loan Party
and which are filed in the offices referred to in paragraph (vi) above, together
with copies of such financing statements, none of which, except as otherwise
agreed in writing by the Collateral Agent, shall cover any of the Collateral and
the results of searches for any tax Lien and judgment Lien filed against such
Person or its property, which results, except as otherwise agreed to in writing
by the Collateral Agent, shall not show any such Liens other than Permitted
Liens;

 

(viii) a copy of the resolutions of each Loan Party, certified as of the
Effective Date by a Secretary or an Assistant Secretary thereof, authorizing (A)
the borrowings hereunder and the transactions contemplated by the Loan Documents
to which such Loan Party is or will be a party, and (B) the execution, delivery
and performance by such Loan Party of each Loan Document to which such Loan
Party is or will be a party and the execution and delivery of the other
documents to be delivered by such Person in connection herewith and therewith;

 

(ix) a certificate of a Secretary or an Assistant Secretary of each Loan Party,
certifying the names and true signatures of the representatives of such Loan
Party authorized to sign each Loan Document to which such Loan Party is or will
be a party and the other documents to be executed and delivered by such Loan
Party in connection herewith and therewith, together with evidence of the
incumbency of such authorized officers;

 

(x) a certificate of the appropriate official(s) of the state or other
applicable jurisdiction of organization of each Loan Party certifying as to the
subsistence in good standing of, and except as otherwise provided on Schedule
6.01(e)(x), the payment of taxes by, such Loan Party in such state or other
applicable jurisdiction and certified as of a recent date not more than 35 days
prior to the Effective Date, together, if requested by any Agent, with
confirmation by telephone or telecopy (where available) on the Effective Date
from such official(s) as to such matters;

 

(xi) except as otherwise provided on Schedule 6.01(e)(xi), a certificate of the
appropriate official(s) of the state or other applicable jurisdiction of each
state of foreign qualification of each Borrower and Oglebay Norton Management
Company certifying as to the subsistence in good standing of, and the payment of
taxes by, such Loan Party in such states or other applicable jurisdiction and
certified as of a recent date not more than 35 days prior to the Effective Date,
together, if requested by any Agent, with confirmation by telephone or telecopy
(where available) on the Effective Date from such official(s) as to such
matters;

 

(xii) to the extent required by any Agent, a true and complete copy of the
charter, certificate of formation, certificate of limited partnership or other
publicly filed organizational document of each Loan Party certified as of a
recent date by an appropriate official of the state of organization of such Loan
Party which shall set forth the same complete

 

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name of such Loan Party as is set forth herein and the organizational number of
such Loan Party, if an organizational number is issued in such jurisdiction
certified as of the Effective Date by a Secretary or an Assistant Secretary of
such Loan Party or a certificate of a Secretary or an Assistant Secretary of
such Loan Party certifying that such documents delivered to the Existing DIP
Agents pursuant to the Existing DIP Credit Agreement remain in full force and
effect and have not been amended or otherwise modified and to the extent any
such documents are being amended on the Effective Date, a certificate of a
Secretary or an Assistant Secretary of such Loan Party certifying that such
documents, in the form attached to such certificate, will be filed on the
Effective Date with the appropriate office of the state of organization of such
Loan Party and certifying as to such other matters that any Agent may reasonably
request;

 

(xiii) to the extent required by any Agent, a copy of the charter and by-laws,
limited liability company agreement, operating agreement, agreement of limited
partnership or other organizational document of each Loan Party, together with
all amendments thereto, certified as of the Effective Date by a Secretary or an
Assistant Secretary of such Loan Party or a certificate of a Secretary or an
Assistant Secretary of such Loan Party certifying that such documents delivered
to the Existing DIP Agents pursuant to the Existing DIP Credit Agreement remain
in full force and effect and have not been amended or otherwise modified;

 

(xiv) an opinion of (A) Jones Day, counsel to the Loan Parties, (B) Jaffe Rait
Heuer & Weiss, P.C., Michigan counsel to the Loan Parties, (C) Tabbert Hahn
Earnest & Weddle LLP, Indiana counsel to the Loan Parties, and (D) Thompson Hine
LLP with respect to the First Preferred Ship Mortgages and Second Preferred Ship
Mortgages, in each case as to such matters as the Agents may reasonably request
(provided, however, that enforceability opinions with respect to the Mortgages
shall be required only as to any Mortgages on Facilities located in Georgia,
Ohio and Pennsylvania);

 

(xv) a certificate of an Authorized Officer of each Loan Party, certifying as to
the matters set forth in subsection (c) of this Section 6.01;

 

(xvi) a copy of the Financial Statements and the financial projections described
in Section 7.01(g)(i) and 7.01(g)(ii) hereof, respectively, certified as of the
Effective Date as true and correct by an Authorized Officer of the
Administrative Borrower, which certification, in the case of the financial
projections, shall certify that such projections have been prepared in good
faith based on assumptions believed by the Administrative Borrower to be
reasonable at the time prepared;

 

(xvii) evidence of the insurance coverage required by Section 7.01(s), with such
endorsements as to the additional insureds or loss payees thereunder as the
Agents may request and providing that such policy may be terminated or canceled
(by the insurer or the insured thereunder) only upon 30 days’ prior written
notice to the Collateral Agent and each such named insured or loss payee,
together with evidence of the payment of all premiums due in respect thereof for
such period as the Agents may request;

 

(xviii) a certificate of a Secretary or an Assistant Secretary of each Borrower,
certifying the names and true signatures of the persons that are authorized to
provide

 

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Notices of Borrowing (in the case of the Administrative Borrower) and all other
notices under this Agreement and the other Loan Documents;

 

(xix) a Borrowing Base Certificate, dated as of December 31, 2004, supported by
schedules showing the derivation thereof and containing such detail and other
information as any Agent may request;

 

(xx) duly executed Cash Management Agreements and similar agreements and other
documents, each in form and substance satisfactory to the Agents, as the Agents
may require with respect to the Borrowers’ cash management system, including
without limitation, a duly executed Cash Management Agreement and Concentration
Account Agreement, as the case may be, with respect to (x) account number
101080630 maintained by the Borrowers at KeyBank National Association, (y)
account number 359681132783 maintained by the Borrowers at KeyBank National
Association and (z) lockbox account numbers 74135, 74747, 74435, 74518, 71001,
74755, 74598, 74754, 74762, 901920, 711398, 711427, 711415, 711537, 711417,
711541, 711419, 711739, and 711423;

 

(xxi) the First Preferred Ship Mortgages and the Second Preferred Ship
Mortgages, dated as of the Effective Date, together with U.S. Coast Guard
documentation, records and abstracts showing that the Vessels are free and clear
of all Liens other than Permitted Liens as well as current U.S. Coast Guard
certification for each Vessel;

 

(xxii) copies of each written Material Contract (including, without limitation,
the Vessel Term Loan Agreement, the MLO Contract, the MLO Amendment and the MLO
Guaranty), certified as true, complete and correct copies thereof by an
Authorized Officer of the Administrative Borrower;

 

(xxiii) a termination and release agreement with respect to each of the Existing
DIP Credit Facility and all related documents, duly executed by the Loan Parties
and the Existing DIP Agents and the Existing DIP Lenders, as applicable,
together with evidence of payment in full of the Loan Parties’ obligations under
the Existing DIP Credit Facility, including, without limitation, satisfactory
arrangements with respect to the release of Liens by the Existing DIP Agents and
the Existing DIP Lenders and UCC-3 termination statements for all UCC-1
financing statements filed by the Existing DIP Agents covering any portion of
the Collateral;

 

(xxiv) (A) evidence that a first-priority perfected Lien on the assets that are
the subject of the Pool Agreement has been (x) granted in favor of Oglebay
Marine Services and (y) assigned to the Collateral Agent for the benefit of the
Lenders, and (B) documentation, duly executed and in form and substance
satisfactory to the Agents, governing allocation of funds and other
intercreditor arrangements between the parties to the Pool Agreement, as the
Agents may require in their Permitted Discretion in connection with clause (A)
above;

 

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(xxv) the Contribution Agreement, duly executed by the Loan Parties; and

 

(xxvi) the Disbursement Letter, duly executed by each party thereto;

 

(xxvii) a letter executed by each Loan Party authorizing the Collateral Agent to
file UCC financing statements in such office or offices as may be necessary or,
in the opinion of the Collateral Agent, desirable, to perfect the security
interests purported to be created by the applicable Loan Documents; and

 

(xxviii) such other agreements, instruments, approvals, opinions and other
documents, each satisfactory to the Agents in form and substance, as any Agent
may reasonably request a reasonable time prior to the Effective Date.

 

(f) Material Adverse Effect. The Agents shall have determined, in their sole
judgment and after giving effect to the Plan of Reorganization and the
transactions contemplated hereby and by the other Loan Documents, that no event
or development shall have occurred since September 30, 2004, which could
reasonably be expected to have a Material Adverse Effect.

 

(g) Approvals. All consents, authorizations and approvals of, and filings and
registrations with, and all other actions in respect of, any Governmental
Authority or other Person required in connection with the making of the Loans
shall have been obtained and shall be in full force and effect.

 

(h) Excess Availability. After giving effect to the Loans to be made on the
Effective Date and the Letters of Credit to be issued on the Effective Date, the
repayment of the Indebtedness under the Existing DIP Credit Facility and the
payment of all fees and expenses related thereto, Excess Availability shall not
be less than $15,000,000. The Administrative Borrower shall deliver to the
Agents a certificate of the chief financial officer of the Administrative
Borrower certifying as to the matters set forth above and containing the
calculation of Excess Availability.

 

(i) Proceedings; Receipt of Documents. All proceedings in connection with the
making of the initial Loans or the issuance of the initial Letter of Credit
Accommodations and the other transactions contemplated by this Agreement and the
other Loan Documents, and all documents incidental hereto and thereto, shall be
satisfactory to each Agent and its counsel, and each Agent and such counsel
shall have received all such information and such counterpart originals or
certified or other copies of such documents as each Agent or such counsel may
reasonably request.

 

(j) Liens; Priority. The Agents shall be satisfied that the Collateral Agent has
been granted, and holds, for the benefit of the Lenders, a perfected, first
priority Lien on and security interest in all of the Collateral, subject only to
Permitted Liens. The Agents shall receive UCC, tax and judgment Lien searches,
searches and title abstracts with respect to the Vessels, Title Insurance
Policies as described in Section 6.01(e)(iv), and other appropriate evidence,
evidencing the absence of any Liens or mortgages on the Collateral, except
Permitted Liens.

 

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(k) Senior Secured Notes Redemption. The Senior Secured Notes Redemption shall
have occurred or occur simultaneously. The Agents shall have received evidence
of the payment in full of the Loan Parties’ obligations under and in connection
with the Senior Secured Notes, including, without limitation, satisfactory
arrangements with respect to the release of Liens (including, without
limitation, Liens on the Vessels) in favor of the Senior Secured Noteholders and
the collateral agent for the Senior Secured Noteholders and UCC termination
statements for all UCC financing statements filed by the Senior Secured
Noteholders or the collateral agent for the Senior Secured Noteholders covering
any portion of the Collateral.

 

Section 6.02 Conditions Precedent to All Loans and Letter of Credit
Accommodations. The obligation of any Agent or any Lender to make any Loan or of
the Administrative Agent to assist the Borrowers in establishing or opening any
Letter of Credit Accommodation on or after the Effective Date is subject to the
fulfillment, in a manner satisfactory to the Administrative Agent, of each of
the following conditions precedent:

 

(a) Payment of Fees, Etc. The Borrowers shall have paid all fees, costs,
expenses and taxes then payable by the Borrowers pursuant to this Agreement and
the other Loan Documents, including, without limitation, Section 2.06 and
Section 13.04 hereof.

 

(b) Representations and Warranties; No Event of Default. The following
statements shall be true and correct, and the submission by the Administrative
Borrower to the Administrative Agent of a Notice of Borrowing with respect to
each such Loan, and the Borrowers’ acceptance of the proceeds of such Loan, and
the issuance of each Letter of Credit Accommodation, shall each be deemed to be
a representation and warranty by each Loan Party on the date of such Loan or the
date of issuance of such Letter of Credit Accommodation that: (i) the
representations and warranties contained in ARTICLE VII and in each other Loan
Document, certificate or other writing delivered to any Agent or any Lender
pursuant hereto or thereto on or prior to the date of such Loan or such Letter
of Credit Accommodation are true and correct on and as of such date as though
made on and as of such date (except with respect to such representations and
warranties that relate to a specified date, in which case, such representations
and warranties shall be true and correct on and as of such specified date), (ii)
at the time of and after giving effect to the making of such Loan and the
application of the proceeds thereof or at the time of issuance of such Letter of
Credit Accommodation, no Default or Event of Default has occurred and is
continuing or would result from the making of the Loan to be made, or the
issuance of such Letter of Credit Accommodation to be issued, on such date and
(iii) the conditions set forth in this Section 6.03 have been satisfied as of
the date of such request.

 

(c) Legality. The making of such Loan or the issuance of such Letter of Credit
Accommodation shall not contravene any law, rule or regulation applicable to any
Agent, any Lender or the L/C Issuer.

 

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(d) Notices. The Administrative Agent shall have received a Notice of Borrowing
pursuant to Section 2.02 hereof and a signed Borrowing Base Certificate dated as
of the most recent date required for delivery.

 

(e) Delivery of Documents. The Administrative Agent and the Collateral Agent
shall have received such other agreements, instruments, approvals, opinions and
other documents, each in form and substance satisfactory to such Agents, as any
such Agent may reasonably request.

 

(f) Proceedings; Receipt of Documents. All proceedings in connection with the
making of such Loan or the issuance of such Letter of Credit Accommodation and
the other transactions contemplated by this Agreement and the other Loan
Documents, and all documents incidental hereto and thereto, shall be
satisfactory to the Administrative Agent and the Collateral Agent and their
counsel, and the Administrative Agent and the Collateral Agent and such counsel
shall have received all such information and such counterpart originals or
certified or other copies of such documents, in form and substance satisfactory
to the Administrative Agent and the Collateral Agent, as such Agents or such
counsel may reasonably request.

 

ARTICLE VII

 

REPRESENTATIONS AND WARRANTIES

 

Section 7.01 Representations and Warranties. Each Loan Party hereby represents
and warrants to the Agents, the Lenders and the L/C Issuer as follows:

 

(a) Organization, Good Standing, Etc. Each Loan Party (i) is a corporation,
limited liability company or limited partnership duly organized, validly
existing and in good standing under the laws of the state, province or other
applicable jurisdiction of its organization, (ii) subject to the entry and the
terms of the Confirmation Order, has all requisite power and authority to
conduct its business as now conducted and as presently contemplated and, in the
case of the Borrowers, to make the borrowings hereunder, and to execute and
deliver each Loan Document to which it is a party, and to consummate the
transactions contemplated thereby, and (iii) is duly qualified to do business
and is in good standing in each jurisdiction in which the character of the
properties owned or leased by it or in which the transaction of its business
makes such qualification necessary except to the extent that the failure to be
so qualified could not reasonably be expected to have a Material Adverse Effect.

 

(b) Authorization, Etc. The execution, delivery and performance by each Loan
Party of each Loan Document to which it is or will be a party, (i) have been
duly authorized by all necessary corporate, limited liability company or limited
partnership action, (ii) do not and will not contravene its charter or by-laws,
its limited liability company or operating agreement or its certificate of
partnership or partnership agreement, as applicable, any applicable law or any
contractual restriction binding on or otherwise affecting it or any of its
properties, or any order or decree of any court or Governmental Authority
(including, without limitation, the Plan of Reorganization or the Confirmation
Order), (iii) do not and will not result in or require the creation of any Lien
(other than pursuant to any Loan Document) upon or with respect to any of its
material properties, and (iv) do not and will not result in any material
default, noncompliance,

 

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suspension, revocation, impairment, forfeiture or nonrenewal of any material
permit, license, authorization or approval applicable to its operations or any
of its properties.

 

(c) Governmental Approvals. Except for the entry of the Confirmation Order, no
authorization or approval or other action by, and no notice to or filing with,
any Governmental Authority is required in connection with the due execution,
delivery and performance by any Loan Party of any Loan Document to which it is
or will be a party.

 

(d) Execution and Binding Effect. Subject to the entry of, and the terms of the
Confirmation Order, this Agreement and each of the other Loan Documents, when
delivered hereunder, is or will be, duly and validly executed and delivered by
each of the Loan Parties which is a party hereto or thereto and constitutes (or
will constitute, in the case of such documents executed and delivered after the
Effective Date) the legal, valid and binding obligations of each of the Loan
Parties which is a party hereto or thereto, enforceable in accordance with the
terms hereof or thereof.

 

(e) Subsidiaries. Schedule 7.01(e) is, as of the date hereof, a complete and
correct description of the name, jurisdiction of organization and ownership of
the outstanding Capital Stock of the Subsidiaries of the Parent in existence on
the date hereof. All of the issued and outstanding shares of Capital Stock of
such Subsidiaries have been validly issued and are fully paid and nonassessable,
and the holders thereof are not entitled to any preemptive, first refusal or
other similar rights. Except as indicated on Schedule 7.01(e), on the Effective
Date all such Capital Stock is owned by the Parent or one or more of its
wholly-owned Subsidiaries, free and clear of all Liens. Except as set forth on
Schedule 7.01(e), as of the Effective Date, there are no outstanding debt or
equity securities of the Parent or any of its Subsidiaries and no outstanding
obligations of the Parent or any of its Subsidiaries convertible into or
exchangeable for, or warrants, options or other rights for the purchase or
acquisition from the Parent or any of its Subsidiaries, or other obligations of
any Subsidiary to issue, directly or indirectly, any shares of Capital Stock of
any Subsidiary of the Parent.

 

(f) Litigation; Commercial Tort Claims. As of the Effective Date, there is no
pending, or threatened in writing, action, suit, proceeding, claim, demand or
litigation, or group of actions, suits, proceedings, claims, demands or
litigations involving similar fact patterns, taken as a whole, affecting any
Loan Party or its properties before any court or other Governmental Authority or
any arbitrator that would reasonably be expected, after taking into account
anticipated insurance recoveries, to result in a judgment, settlement, or other
payment by any one or more of the Loan Parties or their Subsidiaries in excess
of $500,000, except as set forth on Schedule 7.01(f). There is no pending or, to
the best knowledge of any Loan Party, threatened action, suit, proceeding,
claim, demand or litigation, or group of actions, suits, proceedings, claims,
demands or litigations affecting any Loan Party or its properties before any
court or other Governmental Authority or any arbitrator (including, without
limitation, those matters set forth on Schedule 7.01(f)) that (i) if adversely
determined, would reasonably be expected to have a Material Adverse Effect or
(ii) relates to this Agreement or any other Loan Document or any transaction
contemplated hereby or thereby. As of the Effective Date, other than as set
forth on Schedule 7.01(f), none of the Loan Parties holds any commercial tort
claims in respect of which a claim has been filed in a court of law.

 

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(g) Financial Condition.

 

(i) The Financial Statements, copies of which have been delivered to each Agent
and each Lender, fairly present, in all material respects, the consolidated
financial condition of the Parent and its Subsidiaries as at the respective
dates thereof and the consolidated results of operations of the Parent and its
Subsidiaries for the fiscal periods ended on such respective dates, all in
accordance with GAAP, other than with respect to interim Financial Statements,
year end audit adjustments and the absence of footnotes, and since September 30,
2004, no event or development has occurred that has had or could reasonably be
expected to have a Material Adverse Effect.

 

(ii) The Parent has, on or before the Effective Date, furnished to each Agent
and each Lender projected balance sheets, income statements and statements of
cash flows of the Parent and its Subsidiaries for the period from the Effective
Date through December 31, 2008, which projected financial statements shall be
updated from time to time pursuant Section 8.01(a)(vii). Such projections, as so
updated, shall have been prepared in good faith by the Parent, and shall have
been based on assumptions believed by the Parent to be reasonable at the time
prepared.

 

(h) Compliance with Law, Etc. No Loan Party is in violation of its
organizational documents, any law, rule, regulation, judgment or order of any
Governmental Authority applicable to it or any of its property or assets, any
term of the Plan of Reorganization or the Confirmation Order, or any material
term of any material agreement or instrument (including, without limitation, any
Material Contract) binding on or otherwise affecting it or any of its
properties, except to the extent that any such violation of law, rule,
regulation, judgment, order or agreement or instrument would not be reasonably
expected to result in a Material Adverse Effect. No Default or Event of Default
has occurred and is continuing.

 

(i) ERISA. (i) Each “employee benefit plan” (within the meaning of Section 3(3)
of ERISA) maintained (or that was maintained at any time during the six (6)
calendar years preceding the date of any borrowing hereunder) for employees of
any Loan Party or any of its ERISA Affiliates or was contributed to or was
required to be contributed to by a Loan Party or any of its ERISA Affiliates
(“Benefit Plan”) is in compliance in all material respects with ERISA and the
Internal Revenue Code; provided, however, that no Loan Party represents or
warrants that any Multiemployer Plan is in compliance with ERISA and the
Internal Revenue Code, (ii) no Termination Event has occurred nor is reasonably
expected to occur with respect to any Employee Plan, (iii) the most recent
annual report (Form 5500 Series) with respect to each Employee Plan, including
any required Schedule B (Actuarial Information) thereto, copies of which have
been filed with the Internal Revenue Service and delivered to the Agents, is
complete and correct in all material respects and fairly presents the funding
status of such Employee Plan, and since the date of such report there has been
no material adverse change in such funding status, (iv) copies of each agreement
entered into with the PBGC, the U.S. Department of Labor or the Internal Revenue
Service with respect to any Employee Plan have been delivered to the Agents, (v)
no Employee Plan had an accumulated or waived funding deficiency or permitted
decrease which would create a deficiency in its funding standard account or has
applied for an extension of any amortization period within the meaning of
Section 412 of the Internal Revenue Code at any time during the previous 60
months, and (vi) no Lien imposed under the Internal Revenue Code or ERISA exists

 

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or is reasonably likely to arise on account of any Employee Plan within the
meaning of Section 412 of the Internal Revenue Code or Section 4068 of ERISA.
Each Benefit Plan that is intended to qualify under Section 401(a) of the
Internal Revenue Code has received a favorable determination letter from the
Internal Revenue Service or an application for such a letter is currently being
processed by the Internal Revenue Service with respect thereto and, to the best
knowledge of any Loan Party, nothing has occurred which would prevent, or cause
the loss of, such qualification. No Loan Party or any of its ERISA Affiliates
has incurred any withdrawal liability with respect to any Multiemployer Plan
which could reasonably be expected to result in a Material Adverse Effect, or
has knowledge of any facts indicating that it or any of its ERISA Affiliates is
reasonably likely in the future to incur any such withdrawal liability. No Loan
Party or any of its ERISA Affiliates or any fiduciary of any Benefit Plan has
(without curing such defect prior to the Effective Date) (A) engaged in a
nonexempt prohibited transaction described in Sections 406 of ERISA or 4975 of
the Internal Revenue Code, (B) failed to pay any required installment or other
payment required under Section 412 of the Internal Revenue Code on or before the
due date for such required installment or payment, (C) engaged in a transaction
within the meaning of Section 4069 of ERISA or (D) incurred any liability to the
PBGC which remains outstanding other than the payment of premiums, and there are
no premium payments which have become due which are unpaid. Except as set forth
on Schedule 7.01(i), there are no pending or, to the best knowledge of any Loan
Party, threatened claims, actions, proceedings or lawsuits (other than claims
for benefits in the normal course) asserted or instituted against (x) any
Benefit Plan or its assets, (y) any fiduciary with respect to any Benefit Plan,
or (z) any Loan Party or any of its ERISA Affiliates with respect to any Benefit
Plan. Except as set forth on Schedule 7.01(i) and except as required by Section
4980B of the Internal Revenue Code, no Loan Party or any of its ERISA Affiliates
maintains an employee welfare benefit plan (as defined in Section 3(1) of ERISA)
which provides health or welfare benefits (through the purchase of insurance or
otherwise) for any retired or former employee of any Loan Party or any of its
ERISA Affiliates or coverage after a participant’s termination of employment.

 

(j) Taxes, Etc. All federal and foreign and all material state and local tax
returns and other material reports required by applicable law to be filed by any
Loan Party have been filed, or extensions have been obtained, and all taxes,
assessments and other governmental charges imposed upon any Loan Party or any
property of any Loan Party and which have become due and payable on or prior to
the date hereof have been paid, except to the extent contested in good faith by
proper proceedings which stay the imposition of any penalty, fine or Lien
resulting from the non-payment thereof and with respect to which adequate
reserves have been set aside for the payment thereof in accordance with GAAP.

 

(k) Regulations T, U and X. No Loan Party is or will be engaged in the business
of extending credit for the purpose of purchasing or carrying margin stock
(within the meaning of Regulation T, U or X), and no proceeds of any Loan will
be used to purchase or carry any margin stock or to extend credit to others for
the purpose of purchasing or carrying any margin stock.

 

(l) Nature of Business. No Loan Party is engaged in any business other than as
described in the Parent’s Form 10-K filed on March 29, 2004 with the SEC or a
business reasonably related thereto.

 

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(m) Adverse Agreements, Etc. No Loan Party is a party to any agreement or
instrument, or subject to any charter, limited liability company agreement,
partnership agreement or other corporate, partnership or limited liability
company restriction or any judgment, order, regulation, ruling or other
requirement of a court or other Governmental Authority, which has, or in the
future could reasonably be expected to have, a Material Adverse Effect.

 

(n) Permits, Etc. Each Loan Party has, and is in compliance with, all permits,
licenses, authorizations, approvals, entitlements and accreditations required
for such Person lawfully to own, lease, manage or operate, or to acquire, each
business currently owned, leased, managed or operated, or to be acquired, by
such Person (including, without limitation, any certificates of occupancy for
buildings owned or occupied by any Loan Party), which if not obtained or
complied with, could reasonably be expected to have a Material Adverse Effect.
No condition exists or event has occurred which results in, or with the giving
of notice or lapse of time or both, would result in, the suspension, revocation,
impairment, forfeiture or non-renewal of any such permit, license,
authorization, approval, entitlement or accreditation, and there is no claim
that any thereof is not in full force and effect, except, to the extent any such
condition, event or claim could not reasonably be expected to have a Material
Adverse Effect. All Vessel certificates, licenses, permits and/or other
operating documents for the Vessels are up-to-date.

 

(o) Properties. (i) Each Loan Party has good and marketable title to, valid and
subsisting leasehold interests in, or valid and subsisting licenses to use, all
property and assets material to its business, free and clear of all Liens,
except Permitted Liens. All such properties and assets are in good working order
and condition, ordinary wear and tear excepted.

 

(ii) All leased or owned facilities of each Loan Party that are material to the
business of such Loan Party are set forth on Schedule 7.01(o). Schedule 7.01(o)
describes with particularity each of the fee and leasehold components of each
such Facility. As of the Effective Date, each Loan Party has a valid and
subsisting leasehold interest in each Lease described on Schedule 7.01(o) to
which it is a party. As of the Effective Date, Schedule 7.01(o) accurately
identifies each of the current lessors and lessees with respect to each Lease
listed on such schedule. Each such Lease is valid, binding and enforceable in
accordance with its terms in all material respects and, to the knowledge of each
Borrower, is in full force and effect. The Loan Parties have delivered to
Collateral Agent, true, correct and complete copies of each such Lease. No
consent or approval of any landlord or other third party in connection with any
such Lease is necessary for any Loan Party to enter into and execute the Loan
Documents to which it is a party, except for such consents or approvals which
have been obtained. No Loan Party has any knowledge that any other party to any
such Lease is in default of its material obligations thereunder, and no Loan
Party (or any other party to any such Lease) has at any time delivered or
received any notice of default which remains uncured under any such Lease and,
as of the Effective Date, no event has occurred which, with the giving of notice
or the passage of time or both, would constitute a default under any such Lease
(except for the failure to pay pre-petition rent arrearages under certain Leases
for the period prior to the commencement of the Chapter 11 Cases (the
“Pre-Petition Rent Arrearages”) to the extent such Pre-Petition Rent Arrearages
are paid within 60 days of the Effective Date).

 

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(p) Full Disclosure. Each Loan Party has disclosed to the Agents all agreements,
instruments and corporate or other restrictions to which it is subject, and all
other matters known to it on the Effective Date, that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.
None of the other written reports, financial statements, certificates or other
written information furnished by or on behalf of any Loan Party to the Agents in
connection with the negotiation of this Agreement or delivered hereunder (as
modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which it
was made, not misleading; provided that, with respect to projected financial
information, each Loan Party represents only that such information was prepared
in good faith based upon assumptions believed to be reasonable at the time
prepared. As of the Effective Date, there is no contingent liability or fact
that could reasonably be expected to have a Material Adverse Effect which has
not been set forth in a footnote included in the Financial Statements or a
Schedule hereto.

 

(q) Operating Lease Obligations. On the Effective Date, the aggregate amount of
annual payments on all of the Loan Parties’ Operating Lease Obligations is not
in excess of $15,000,000.

 

(r) Environmental Matters. Except as set forth on Schedule 7.01(r), (i) the
operations of each Loan Party are in material compliance with all Environmental
Laws; (ii) there has been no Release at any of the properties owned or operated
by any Loan Party or a predecessor in interest, or at any disposal or treatment
facility which received Hazardous Materials generated by any Loan Party or any
predecessor in interest which could have a Material Adverse Effect; (iii) no
Environmental Action has been asserted against any Loan Party or any predecessor
in interest nor does any Loan Party have knowledge or notice of any threatened
or pending Environmental Action against any Loan Party or any predecessor in
interest which could have a Material Adverse Effect; (iv) no Environmental
Actions have been asserted against any facilities that may have received
Hazardous Materials generated by any Loan Party or any predecessor in interest
which could have a Material Adverse Effect; (v) no property now or formerly
owned or operated by a Loan Party has been used as a treatment or disposal site
for any Hazardous Material; (vi) no Loan Party has failed to report to the
proper Governmental Authority any Release which is required to be so reported by
any Environmental Laws which could have a Material Adverse Effect; (vii) each
Loan Party holds all licenses, permits and approvals required under any
Environmental Laws in connection with the operation of the business carried on
by it, except for such licenses, permits and approvals as to which a Loan
Party’s failure to maintain or comply with could not have a Material Adverse
Effect; and (viii) no Loan Party has received any notification pursuant to any
Environmental Laws that (A) any work, repairs, construction or Capital
Expenditures are required to be made in respect as a condition of continued
compliance with any Environmental Laws, or any license, permit or approval
issued pursuant thereto or (B) any license, permit or approval referred to above
is about to be reviewed, made, subject to limitations or conditions, revoked,
withdrawn or terminated, in each case, except as could not have a Material
Adverse Effect.

 

(s) Insurance. Each Loan Party keeps its property adequately insured and
maintains (i) insurance to such extent and against such risks, including fire,
as is customary for companies in the same or similar businesses, (ii) workmen’s
compensation insurance in the amount

 

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required by applicable law, (iii) public liability insurance, which shall
include product liability insurance, in the amount customary with companies in
the same or similar business against claims for personal injury or death on
properties owned, occupied or controlled by it, and (iv) such other insurance as
may be required by law or as may be reasonably required by any Agent (including,
without limitation, against larceny, embezzlement or other criminal
misappropriation). Schedule 7.01(s) sets forth a list of all insurance
maintained by each Loan Party on the Effective Date.

 

(t) Use of Proceeds. The proceeds of the Loans shall be used (i) to repay the
Existing DIP Credit Facility, (ii) to pay fees and expenses in connection with
the transactions contemplated hereby, (iii) to fund working capital of the
Borrowers and the Guarantors, (iv) to the extent necessary after giving effect
to the application of the net proceeds from the issuance of the Preferred Stock
and available cash of the Borrowers, to effect the Senior Secured Notes
Redemption, and (v) for other general corporate purposes. The Letter of Credit
Accommodations will be used for general corporate and working capital purposes.

 

(u) Location of Bank Accounts. Schedule 7.01(u) sets forth a complete and
accurate list, as of the Effective Date, of all deposit, checking and other bank
accounts, all securities and other accounts maintained with any broker dealer
and all other similar accounts maintained by each Loan Party, together with a
description thereof (i.e., the bank or broker dealer at which such deposit or
other account is maintained and the account number and the purpose thereof).

 

(v) Intellectual Property. Except as set forth on Schedule 7.01(v), each Loan
Party owns or licenses or otherwise has the right to use all licenses, service
marks, tradenames, patents, patent applications, trademarks, trademark
applications, copyrights, copyright applications and other intellectual property
rights that are necessary for the operation of its business, without
infringement or conflict with the rights of any other Person with respect
thereto, except for such infringements and conflicts which, individually or in
the aggregate, could not reasonably be expected to have a Material Adverse
Effect. Set forth on Schedule 7.01(v) is a complete and accurate list as of the
Effective Date of all such licenses (other than commercial software licenses
generally available to the public), tradenames, patents, patent applications,
registered trademarks and service marks, trademark and service mark
applications, registered copyrights, copyright applications, internet domain
names and other intellectual property rights of each Loan Party, in each case,
to the extent such intellectual property rights or other rights are necessary
for the operation of its business. No slogan or other advertising device,
product, process, method, substance, part or other material now employed by any
Loan Party infringes upon or conflicts with any rights owned by any other
Person, and no claim or litigation regarding any of the foregoing is pending or
threatened, except for such infringements and conflicts which could not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.

 

(w) Material Contracts. Set forth on Schedule 7.01(w) is a complete and accurate
list as of the Effective Date of all Material Contracts of each Loan Party,
showing any material amendments and modifications thereto. As of the Effective
Date, each such Material Contract (i) is in full force and effect and is binding
upon and enforceable against each Loan Party that is a party thereto and, to the
best knowledge of such Loan Party, all other parties thereto in accordance with
its terms, (ii) has not been otherwise amended or modified, and (iii) is not in

 

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default due to the action of any Loan Party or, to the knowledge of any Loan
Party, any other party thereto.

 

(x) Holding Company and Investment Company Acts. None of the Loan Parties is (i)
a “holding company” or a “subsidiary company” of a “holding company” or an
“affiliate” of a “holding company”, as such terms are defined in the Public
Utility Holding Company Act of 1935, as amended, or (ii) an “investment company”
or an “affiliated person” or “promoter” of, or “principal underwriter” of or
for, an “investment company”, as such terms are defined in the Investment
Company Act of 1940, as amended.

 

(y) Employee and Labor Matters. Except as set forth on Schedule 7.01(y), there
is (i) no unfair labor practice complaint pending or, to the best knowledge of
any Loan Party, threatened against any Loan Party before any Governmental
Authority and no grievance that would be material to the business of any Loan
Party or arbitration proceeding pending or, to the best knowledge of any Loan
Party, threatened against any Loan Party which arises out of or under any
collective bargaining agreement, (ii) no strike, labor dispute, slowdown,
stoppage or similar action or grievance pending or, to the best knowledge of any
Loan Party, threatened against any Loan Party (that would be material to the
business of any Loan Party) and (iii) to the knowledge of any Loan Party, no
union representation question existing with respect to the employees of any Loan
Party and no union organizing activity taking place with respect to any of the
employees of any Loan Party. Except as set forth on Schedule 7.01(y), no Loan
Party or any of its ERISA Affiliates has incurred any liability or obligation
under the Worker Adjustment and Retraining Notification Act (“WARN”) or similar
state or foreign law, which remains unpaid or unsatisfied. Except as set forth
on Schedule 7.01(y), the hours worked and payments made to employees of any Loan
Party have not been in violation of the Fair Labor Standards Act or any other
applicable legal requirements other than violations of immaterial obligations of
any Loan Party resulting in immaterial liabilities incurred by any Loan Party.
All material payments due from any Loan Party 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.

 

(z) Customers and Suppliers. Except as set forth on Schedule 7.01(z), there
exists no actual or threatened termination, cancellation or limitation of, or
modification to or change in, the business relationship between (i) any Loan
Party, on the one hand, and any customer or any group thereof, on the other
hand, whose agreements with any Loan Party are individually or in the aggregate
material to the business or operations of such Loan Party, or (ii) any Loan
Party, on the one hand, and any material supplier thereof, on the other hand,
which, in any such case, could reasonably be expected to have a Material Adverse
Effect; and there exists no present state of facts or circumstances that could
give rise to or result in any such termination, cancellation, limitation,
modification or change.

 

(aa) Name; Jurisdiction of Organization; Organizational ID Number; Chief Place
of Business; Chief Executive Office; FEIN. Schedule 7.01(aa) sets forth a
complete and accurate list as of the date hereof of (i) the exact legal name of
each Loan Party, (ii) the jurisdiction of organization of each Loan Party, (iii)
the organizational identification number of each Loan Party (or indicates that
such Loan Party has no organizational identification number), (iv) each place of
business of each Loan Party, (v) the chief executive office of each Loan Party
and (vi) the federal employer identification number of each Loan Party.

 

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(bb) Locations of Collateral. There is no location at which any Loan Party has
any Collateral (except for Inventory in transit and consignment Inventory in an
aggregate amount not to exceed $6,000,000 at any time) with an aggregate Book
Value in excess of $100,000 other than (i) those locations listed on Schedule
7.01(bb) and (ii) any other locations approved in writing by the Agents from
time to time. Schedule 7.01(bb) hereto contains a true, correct and complete
list, as of the Effective Date, of the legal names and addresses of each
warehouse at which Collateral of each Loan Party is stored. None of the receipts
received by any Loan Party from any warehouse states that the goods covered
thereby are to be delivered to bearer or to the order of a named Person or to a
named Person and such named Person’s assigns.

 

(cc) Bankruptcy Matters. The Confirmation Order is a “Final Order” (as such term
is defined in the Plan of Reorganization); no motion, request or application
seeking relief from or revocation of the Confirmation Order has been filed under
Rule 59 or 60 of the Federal Rules of Civil Procedure, or any analogous Federal
Rule of Bankruptcy Procedure, or under 11 U.S.C. § 1144; and, but for the
occurrence of the funding of the Loans on the Effective Date all conditions
precedent to the occurrence of the “Effective Date” (as such term is defined in
the Plan of Reorganization) have occurred or will occur concurrently with the
funding of the Loans on the Effective Date.

 

(dd) Security Interests. Each Security Agreement creates in favor of the
Collateral Agent, for the benefit of the Agents and the Lenders, a valid and
enforceable security interest in the Collateral secured thereby. Upon the filing
of the UCC-1 financing statements described in Section 6.01(e)(vi), the
recording of the Mortgages in such office or offices as may be necessary or, in
the opinion of the Agents, desirable to create and perfect a valid and
enforceable first priority lien on the property purported to be covered thereby,
and the recording of the Collateral Assignments for Security referred to in each
Security Agreement in the United States Patent and Trademark Office and the
United States Copyright Office, as applicable, such security interests in and
Liens on the Collateral granted thereby shall be perfected, first priority
security interests, and no further recordings or filings are or will be required
in connection with the creation, perfection or enforcement of such security
interests and Liens, other than (i) the filing of continuation statements and
the recording of the Mortgages, in each case in accordance with applicable law
and (ii) the recording of the Collateral Assignments for Security pursuant to
each Security Agreement in the United States Patent and Trademark Office and the
United States Copyright Office, as applicable, with respect to after-acquired
U.S. patent and trademark applications and registrations and U.S. copyrights.

 

(ee) Solvency. After giving effect to the transactions contemplated by this
Agreement and the other Loan Documents and before and after giving effect to
each Loan and Letter of Credit, the Loan Parties on a consolidated basis are
Solvent.

 

(ff) Schedules. All of the information which is required to be scheduled to this
Agreement is set forth on the Schedules attached hereto (in the manner described
in the Section of this Agreement corresponding to such Schedule), is correct and
accurate and does not omit to state any information material thereto.

 

(gg) Guarantors. Except as set forth on Schedule 7.01(gg) and for their guaranty
of the Obligations, the Guarantors do not (i) engage in any operating
businesses, (ii) have

 

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any assets in excess of $1,000,000 in the aggregate, and/or (iii) have any
liabilities or obligations in excess of $1,000,000 in the aggregate.

 

(hh) Vessels. As of the Effective Date, no Loan Party owns any Vessels other
than the Vessels set forth on Schedule V-1.

 

ARTICLE VIII

 

COVENANTS OF THE LOAN PARTIES

 

Section 8.01 Affirmative Covenants. So long as any principal of or interest on
any Loan, Letter of Credit Obligation or any other Obligation (whether or not
due), other than indemnification obligations for which no claim has been
asserted, shall remain unpaid or any Lender shall have any Revolving Credit
Commitment, Term Loan A Commitment or Term Loan B Commitment hereunder, each
Loan Party will, unless the Required Lenders shall otherwise consent in writing:

 

(a) Reporting Requirements. Furnish to each Agent and each Lender:

 

(i) upon the earlier of (A) the public filing with the SEC of the Parent’s SEC
Form 10-Q and (B) 45 days after the end of each fiscal quarter of the Parent and
its Subsidiaries, commencing with the fiscal quarter of the Parent and its
Subsidiaries ending December 31, 2004, consolidated and consolidating balance
sheets, consolidated and consolidating statements of operations and consolidated
and consolidating statements of cash flows of the Parent and its Subsidiaries,
as at the end of such quarter, and for the period commencing at the end of the
immediately preceding Fiscal Year and ending with the end of such quarter,
setting forth in each case in comparative form the figures for the corresponding
date or period of the immediately preceding Fiscal Year, all in reasonable
detail and certified by an Authorized Officer of the Parent as fairly
presenting, in all material respects, the financial position of the Parent and
its Subsidiaries as of the end of such quarter and the results of operations and
cash flows of the Parent and its Subsidiaries for such quarter, in accordance
with GAAP applied in a manner consistent with that of the most recent audited
financial statements of the Parent and its Subsidiaries furnished to the Agents
and the Lenders, subject to normal year-end audit adjustments and the absence of
footnotes;

 

(ii) upon the earlier of (A) the public filing with the SEC of the Parent’s SEC
Form 10-K and (B) 90 days after the end of each Fiscal Year of the Parent and
its Subsidiaries, consolidated and consolidating balance sheets, consolidated
and consolidating statements of operations and retained earnings and
consolidated and consolidating statements of cash flows of the Parent and its
Subsidiaries as at the end of such Fiscal Year, setting forth in each case in
comparative form the corresponding figures for the immediately preceding Fiscal
Year, all in reasonable detail and prepared in accordance with GAAP, and in the
case of the Parent and its Subsidiaries, accompanied by a report and an opinion,
prepared in accordance with generally accepted auditing standards, of
independent certified public accountants of recognized standing selected by the
Parent and satisfactory to the Administrative Agent and the Collateral Agent
(which opinion shall be without (I) any qualification or exception as to the
scope of such audit, or (II) any qualification which relates to the treatment or
classification of any item and

 

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which, as a condition to the removal of such qualification, would require an
adjustment to such item, the effect of which would be to cause any noncompliance
with the provisions of Section 8.03), together with a written statement of such
accountants (1) to the effect that, in making the examination necessary for
their certification of such financial statements, they have not obtained any
knowledge of the existence of an Event of Default or a Default and (2) if such
accountants shall have obtained any knowledge of the existence of an Event of
Default or such Default, describing the nature thereof;

 

(iii) as soon as available, and in any event within 30 days after the end of
each fiscal month of the Parent and its Subsidiaries commencing with the fiscal
month of the Parent and its Subsidiaries ending December 31, 2004, internally
prepared consolidated and consolidating balance sheets, consolidated and
consolidating statements of operations and consolidated and consolidating
statements of cash flows as at the end of such fiscal month, and for the period
commencing at the end of the immediately preceding Fiscal Year (commencing with
the Fiscal Year ended 2005) and ending with the end of such fiscal month, all in
reasonable detail and certified by an Authorized Officer of the Parent as fairly
presenting, in all material respects, the financial position of the Parent and
its Subsidiaries, as at the end of such fiscal month and the results of
operations and cash flows of the Parent and its Subsidiaries, each for such
fiscal month, in accordance with GAAP applied in a manner consistent with that
of the most recent audited financial statements furnished to the Agents and the
Lenders, subject to normal quarterly or year-end adjustments, including audit
adjustments and the absence of footnotes;

 

(iv) simultaneously with the delivery of the financial statements of the Parent
and its Subsidiaries required by clauses (i), (ii) and (iii) of this Section
8.01(a), a certificate of an Authorized Officer of the Parent (I) stating that
such Authorized Officer has reviewed the provisions of this Agreement and the
other Loan Documents and has made or caused to be made under his or her
supervision a review of the condition and operations of the Parent and its
Subsidiaries during the period covered by such financial statements with a view
to determining whether the Parent and its Subsidiaries were in compliance with
all of the provisions of this Agreement and such Loan Documents at the times
such compliance is required hereby and thereby, and that such review has not
disclosed, and such Authorized Officer has no knowledge of, the existence during
such period of an Event of Default or Default or, if an Event of Default or
Default existed, describing the nature and period of existence thereof and the
action which the Parent and its Subsidiaries propose to take or have taken with
respect thereto, and (II) commencing on the first date on which financial
covenants are tested under Section 8.03, attaching a schedule showing the
calculations described in Section 8.03;

 

(v) [Intentionally Omitted];

 

(vi) a Borrowing Base Certificate, as soon as available and in any event not
later than the fifteenth calendar day of each fiscal month commencing with
January 2005, supported by schedules showing the derivation thereof and
containing such detail and other information as any Agent may request from time
to time, provided that (x) the Borrowing Base set forth in the Borrowing Base
Certificate shall be effective from and including the date such Borrowing Base
Certificate is received by the Agents but not including the date on which a
subsequent Borrowing Base Certificate is received by the Agents, unless the

 

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Administrative Agent, in its Permitted Discretion, disputes the eligibility of
any property included in the calculation of the Borrowing Base or the valuation
thereof by notice of such dispute to the Administrative Borrower and (y) in the
event of any dispute about the eligibility of any property included in the
calculation of the Borrowing Base or the valuation thereof, the Administrative
Agent’s good faith judgment shall control;

 

(vii) as soon as available and in any event not later than 45 days after the end
of each Fiscal Year (provided, however, with respect to the Fiscal Year ended
December 31, 2004, not later than March 31, 2005), financial projections,
supplementing and superseding the financial projections referred to in Section
7.01(g)(ii), in form and substance satisfactory to the Agents, for the current
Fiscal Year for the Parent and its Subsidiaries, such financial projections to
be prepared on a reasonable basis and in good faith, and to be based on
assumptions believed by the Parent to be reasonable at the time prepared and
from the best information available to the Parent at the time prepared;

 

(viii) promptly after submission to any Governmental Authority, all documents
and information furnished to such Governmental Authority in connection with any
investigation of any Loan Party (unless, in the written opinion of counsel of
such Loan Party, such disclosure would be unlawful) other than routine or
non-material inquiries by such Governmental Authority;

 

(ix) as soon as possible, and in any event within (A) 3 Business Days after the
occurrence of an Event of Default or the occurrence of any event or development
that could reasonably be expected to have a Material Adverse Effect and (B) 5
Business Days after the occurrence of a Default, the written statement of an
Authorized Officer of the Parent setting forth the details of such Event of
Default or Default or such other event or development and the action which the
affected Loan Party proposes to take with respect thereto;

 

(x) (A) as soon as possible and in any event within 15 days after any Loan Party
or any ERISA Affiliate thereof knows or has reason to know that (1) any
Reportable Event with respect to any Employee Plan has occurred, (2) any other
Termination Event with respect to any Employee Plan has occurred, or (3) an
accumulated funding deficiency has been incurred or an application has been made
to the Secretary of the Treasury for a waiver or modification of the minimum
funding standard (including installment payments) or an extension of any
amortization period under Section 412 of the Internal Revenue Code with respect
to an Employee Plan, a statement of an Authorized Officer of the Parent setting
forth the details of such occurrence and the action, if any, which such Loan
Party or such ERISA Affiliate proposes to take with respect thereto, (B)
promptly and in any event within five days after receipt thereof by any Loan
Party or any ERISA Affiliate thereof from the PBGC, copies of each notice
received by any Loan Party or any ERISA Affiliate thereof of the PBGC’s
intention to terminate any Plan or to have a trustee appointed to administer any
Plan, (C) promptly and in any event within 10 days after the filing thereof with
the Internal Revenue Service if requested by any Agent, copies of each Schedule
B (Actuarial Information) to the annual report (Form 5500 Series) with respect
to each Employee Plan and Multiemployer Plan, (D) promptly and in any event
within 10 days after any Loan Party or any ERISA Affiliate thereof knows or has
reason to know that a required installment within the meaning of Section 412 of
the Internal Revenue Code has not been made when due with respect to an Employee
Plan, (E) promptly and in any

 

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event within 3 days after receipt thereof by any Loan Party or any ERISA
Affiliate thereof from a sponsor of a Multiemployer Plan or from the PBGC, a
copy of each notice received by any Loan Party or any ERISA Affiliate thereof
concerning the imposition or amount of withdrawal liability under Section 4202
of ERISA or indicating that such Multiemployer Plan may enter reorganization
status under Section 4241 of ERISA, and (F) promptly and in any event within 10
days after any Loan Party or any ERISA Affiliate thereof sends notice of a plant
closing or mass layoff (as defined in WARN) to employees, copies of each such
notice sent by such Loan Party or such ERISA Affiliate thereof;

 

(xi) promptly after the commencement thereof but in any event not later than 7
Business Days after the earlier of (A) service of process with respect thereto
on any Loan Party, or (B) the obtaining of knowledge thereof by any Loan Party,
notice of each action, suit or proceeding before any court or other Governmental
Authority or other regulatory body or any arbitrator which could reasonably be
expected to have a Material Adverse Effect;

 

(xii) as soon as possible and in any event within 10 Business Days after
execution, receipt or delivery thereof, copies of any material notices that any
Loan Party executes or receives in connection with any Material Contract;

 

(xiii) as soon as possible and in any event within 10 Business Days after
execution, receipt or delivery thereof, copies of any material notices that any
Loan Party executes or receives in connection with any sale or other Disposition
of the Capital Stock of, or all or substantially all of the assets of, any Loan
Party;

 

(xiv) promptly, and in any event within 10 Business Days after the sending or
filing thereof, copies of all statements, reports and other information any Loan
Party sends to any holders of its Indebtedness or its securities or files with
the SEC or any national (domestic or foreign) securities exchange;

 

(xv) promptly, and in any event within 10 Business Days upon receipt thereof,
copies of all financial reports (including, without limitation, management
letters), if any, submitted to any Loan Party by its auditors in connection with
any annual or interim audit of the books thereof (other than internal audit
reports prepared by an independent third party performing in-house audit
functions); and

 

(xvi) promptly upon request, such other information concerning the condition or
operations, financial or otherwise, of any Loan Party as any Agent may from time
to time may reasonably request.

 

Each Loan Party agrees that their independent certified public accountants are
authorized to communicate with the Agents and to release to the Agents whatever
financial information concerning the Loan Parties that the Agents reasonably may
request, provided, that no Loan Party shall be required to waive the right to
assert a confidential relationship, if any, it may have with any accounting firm
or service bureau in connection with any information requested by any Agent
pursuant to or in accordance with this Agreement. Each Loan Party agrees that
any Agent may contact directly any such accounting firm or service bureau in
order to obtain such

 

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information, provided that, so long as no Event of Default shall then exist,
such Agent shall provide Administrative Borrower with prior written notice.

 

(b) Additional Guaranties and Collateral Security. Cause:

 

(i) each Subsidiary of any Loan Party not in existence on the Effective Date, to
execute and deliver to the Agents promptly and in any event within 10 Business
Days after the formation or acquisition or change in status thereof (A) a
Guaranty guaranteeing the Obligations, (B) a Security Agreement, (C) if such
Subsidiary has any Subsidiaries, a Pledge Agreement, if required by the Agents,
together with (x) certificates evidencing all of the Capital Stock of any Person
directly owned by such Subsidiary, (y) undated stock powers executed in blank
with signature guaranteed, and (z) such opinion of counsel and such approving
certificate of such Subsidiary as the Agents may reasonably request in respect
of complying with any legend on any such certificate or any other matter
relating to such shares, (D) one or more Mortgages creating on the real property
of such Subsidiary a perfected, first priority Lien on such real property, a
Title Insurance Policy covering such real property, if available or if
customarily obtained for similar real property, a current ALTA survey thereof
and a surveyor’s certificate, each in form and substance satisfactory to the
Collateral Agent, together with such other agreements, instruments and documents
as the Agents may require whether comparable to the documents required under
Section 8.01(n) or otherwise, and (E) such other agreements, instruments,
approvals, legal opinions or other documents reasonably requested by the Agents
in order to create, perfect, establish the first priority of or otherwise
protect any Lien purported to be covered by any such security agreement, pledge
agreement, or Mortgage or otherwise to effect the intent that such Subsidiary
shall become bound by all of the terms, covenants and agreements contained in
the Loan Documents and that all property and assets of such Subsidiary shall
become Collateral for the Obligations; and

 

(ii) each owner of the Capital Stock of any such Subsidiary to execute and
deliver promptly and in any event within 10 Business Days after the formation or
acquisition of such Subsidiary a Pledge Agreement, together with (A)
certificates evidencing all of the Capital Stock of such Subsidiary, (B) undated
stock powers or other appropriate instruments of assignment executed in blank
with signature guaranteed, (C) such opinion of counsel and such approving
certificate of such Subsidiary as the Agents may reasonably request in respect
of complying with any legend on any such certificate or any other matter
relating to such shares and (D) such other agreements, instruments, approvals,
legal opinions or other documents requested by the Agents.

 

(c) Compliance with Laws, Etc. Comply, and cause each of its Subsidiaries to
comply, in all material respects with all applicable material laws, rules,
regulations and orders (including, without limitation, all Environmental Laws,
the Plan of Reorganization and the Confirmation Order), such compliance to
include, without limitation, (i) paying before the same become delinquent all
taxes, assessments and governmental charges or levies imposed upon it or upon
its income or profits or upon any of its properties, and (ii) paying all lawful
claims which if unpaid might become a Lien or charge upon any of its properties,
except to the extent contested in good faith by proper proceedings which stay
the imposition of any penalty, fine or Lien resulting from the non-payment
thereof and with respect to which adequate reserves have been set aside for the
payment thereof in accordance with GAAP, other than, in the case of clauses (i)
and (ii) above,

 

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taxes, assessments and governmental charges and levies and other claims the
aggregate amount of which does not at any time exceed $250,000.

 

(d) Preservation of Existence, Etc. Maintain and preserve, and cause each of its
Significant Subsidiaries to maintain and preserve, its existence, rights and
privileges, and become or remain, and cause each of its Subsidiaries to become
or remain, duly qualified and in good standing in each jurisdiction in which the
character of the properties owned or leased by it or in which the transaction of
its material business makes such qualification necessary.

 

(e) Keeping of Records and Books of Account. Keep, and cause each of its
Subsidiaries to keep, adequate records and books of account, with complete
entries made to permit the preparation of financial statements in accordance
with GAAP.

 

(f) Inspection Rights. Permit, and cause each of its Subsidiaries to permit, the
agents and representatives of any Agent (accompanied, at their own expense, by
representatives of any Lender that wishes to participate) at any time and from
time to time (but without undue disruption of the business of the Loan Parties)
during normal business hours and, in the absence of a continuing Event of
Default, with prior notice to the Administrative Borrower, in each case at the
expense of the Parent, to examine and make copies of and abstracts from its
records and books of account, to visit and inspect its properties, to verify
materials, leases, notes, accounts receivable, deposit accounts and its other
assets, to conduct audits, physical counts, valuations, appraisals (and, after
the occurrence and during the continuance of an Event of Default in which all or
any portion of the Loans have been declared due and payable in accordance with
Section 10.01 hereof, a Phase I Environmental Site Assessment and, if requested
by any Agent based upon the results of any such Phase I Environmental Site
Assessment, a Phase II Environmental Site Assessment) or examinations and to
discuss its affairs, finances and accounts with any of its Authorized Officers
(or, with the consent of any Authorized Officer, such consent not to be
unreasonably withheld or delayed, such other officers or employees as any Agent
may reasonably request) or independent accountants. In furtherance of the
foregoing, each Loan Party hereby authorizes its independent accountants, and
the independent accountants of each of its Subsidiaries to discuss the affairs,
finances and accounts of such Person (independently or together with
representatives of such Person) with the agents and representatives of any Agent
in accordance with this Section 8.01(f), provided that, so long as no Event of
Default shall have occurred and be continuing, such Agent shall provide prior
written notice to the Administrative Borrower.

 

(g) Maintenance of Properties, Etc. Maintain and preserve, and cause each of its
Subsidiaries to maintain and preserve, all of its properties which are necessary
or used in the proper conduct of its business in good working order and
condition, ordinary wear and tear excepted, and comply, and cause each of its
Subsidiaries to comply, at all times with the provisions of all material leases
to which it is a party as lessee or under which it occupies property, so as to
prevent any loss or forfeiture thereof or thereunder.

 

(h) Maintenance of Insurance. Maintain, and cause each of its Subsidiaries to
maintain, insurance with responsible and reputable insurance companies or
associations (including, without limitation, comprehensive general liability,
hazard, rent, property and business interruption insurance) with respect to its
properties (including all real properties

 

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leased or owned by it) and business, in such amounts and covering such risks as
is required by any Governmental Authority having jurisdiction with respect
thereto or as is carried generally in accordance with sound business practice by
companies in similar businesses similarly situated and in any event in amount,
adequacy and scope reasonably satisfactory to the Agents, and shall not be less
than the adequacy and scope than the insurance maintained by the Borrowers and
their Subsidiaries on the Effective Date. All policies covering the Collateral
are to be made payable to the Collateral Agent for the benefit of the Agents and
the Lenders, as its interests may appear, in case of loss, under a standard
non-contributory “lender” or “secured party” clause, provided, that, in the
absence of a continuing Event of Default, insurance payments of less than
$500,000 in any Fiscal Year may be paid directly to the Borrowers and their
Subsidiaries. All certificates of insurance are to be delivered to the Agents
and the policies are to be premium prepaid, with the loss payable and additional
insured endorsement in favor of the Collateral Agent and such other Persons as
the Collateral Agent may designate from time to time, and shall provide for not
less than 30 days’ prior written notice to the Collateral Agent of the exercise
of any right of cancellation. The proceeds of such insurance shall be delivered
by the Collateral Agent to the Administrative Agent to be applied in accordance
with the terms of Sections 2.05 or 5.04 of this Agreement, as applicable. If any
Loan Party or any of its Subsidiaries fails to maintain such insurance, any
Agent may arrange for such insurance, but at the Borrowers’ expense and without
any responsibility on Agents’ part for obtaining the insurance, the solvency of
the insurance companies, the adequacy of the coverage, or the collection of
claims. Upon the occurrence and during the continuance of an Event of Default,
the Collateral Agent shall have the sole right, in the name of the Agents and
the Lenders, any Loan Party and its Subsidiaries, to file claims under any
insurance policies, to receive, receipt and give acquittance for any payments
that may be payable thereunder, and to execute any and all endorsements,
receipts, releases, assignments, reassignments or other documents that may be
necessary to effect the collection, compromise or settlement of any claims under
any such insurance policies.

 

(i) Obtaining of Permits, Etc. Obtain, maintain and preserve, and cause each of
its Subsidiaries to obtain, maintain and preserve, and take all necessary action
to timely renew, all permits, licenses, authorizations, approvals, entitlements
and accreditations which are necessary in the proper conduct of its business.

 

(j) Environmental. (i) Keep any property either owned or operated by it or any
of its Subsidiaries free of any Environmental Liens; (ii) comply, and cause each
of its Subsidiaries to comply, in all material respects with Environmental Laws
and provide to the Agents any documentation of such compliance which any Agent
may reasonably request; (iii) provide the Agents written notice within ten (10)
days of any Release of a Hazardous Material in excess of any legal or otherwise
permissible quantity from or onto property owned or operated by it or any of its
Subsidiaries and take any Remedial Actions required under Environmental Laws;
(iv) promptly, and in any event before any Governmental Authority exercises its
statutory right to file an Environmental Lien, pay or reimburse any monetary
obligations, losses, liabilities, damages or costs and expenses incurred by any
Governmental Authority as a result of any Remedial Action performed at the
Facilities operated by any Loan Party; (v) provide the Agents with written
notice within ten (10) days of the receipt of any of the following: (A) notice
that an Environmental Lien has been filed against any property of any Loan Party
or any of its Subsidiaries; (B) commencement of any Environmental Action (other
than notices of violation or citations that are provided for in (C)) or notice
that an Environmental Action (other than notices of violation or

 

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citations that are provided for in (C)) will be filed against any Loan Party or
any of its Subsidiaries; (C) notice of a violation, citation or other
administrative order which could cause any of the Loan Parties to incur more
than $1,000,000 individually or $5,000,000 in the aggregate; and (D) written or
oral notification that a Governmental Authority has incurred over $1,000,000 in
monetary obligations, losses, liabilities, damages or costs and expenses as a
result of any Remedial Action performed at any Facility operated by the Loan
Parties; (vi) defend, indemnify and hold harmless the Agents and the Lenders and
their transferees, and their respective employees, agents, officers and
directors, from and against any claims, demands, penalties, fines, liabilities,
settlements, damages, costs or expenses (including, without limitation, attorney
and consultant fees, investigation and laboratory fees, court costs and
litigation expenses) arising out of (A) the Handling, presence, disposal,
Release or threatened Release of any Hazardous Materials on, under, in,
originating or emanating from any property at any time owned or operated by any
Loan Party or any of its Subsidiaries (or its predecessors in interest or
title), (B) any personal injury (including wrongful death) or property damage
(real or personal) arising out of or related to the presence, Handling, or
Release of such Hazardous Materials, (C) any request for information,
investigation, lawsuit brought or threatened, settlement reached or order by a
Governmental Authority relating to the presence, Handling, or Release of such
Hazardous Materials, (D) any violation of any Environmental Law and/or (E) any
Environmental Action filed against any Agent or any Lender; (vii) maintain and
preserve all Environmental Permits necessary to operate, use or occupy each of
the Loan Parties’ material businesses, Facilities, operations, properties and
assets; (viii) maintain and comply with all financial assurance requirements
under RCRA and any similar Environmental Law, as specifically set forth but not
limited to 40 C.F.R. 264 and 265, necessary to operate, use or occupy each of
the Loan Parties’ businesses, Facilities, operations, properties and assets;
(ix) comply with all applicable writs, orders, consent decrees, judgments,
injunctions, written communications by any Governmental Authority, decrees,
informational requests or demands issued pursuant to, or arising under, any
Environmental Laws; (x) provide the Agents with prompt written notice in the
event the Loan Parties are required to spend more than $1,000,000 individually
or $5,000,000 in the aggregate to comply with any Environmental Laws that have
been promulgated and enacted by a Governmental Authority throughout the term of
this Agreement; and (xi) file and submit truthful and complete representations,
including, without limitation, applications, warranty statements and
accompanying materials provided in support of such representations, submitted by
the Loan Parties to obtain insurance.

 

Without limiting the generality of the foregoing, whenever the Agents reasonably
determine that there is non-compliance, or any condition which requires any
action by or on behalf of any Loan Party in order to avoid any material
non-compliance, with any Environmental Law which could result in the imposition
of substantial fines or penalties or otherwise materially and adversely affect
the business, assets or prospects of the Loan Parties on a consolidated basis,
the Loan Parties shall, at any Agent’s request and Borrowers’ expense: (i) cause
an independent environmental engineer acceptable to such Agent to conduct such
assessments, investigations or tests of the site where any Loan Party’s
non-compliance or alleged non-compliance with such Environmental Laws has
occurred as to such non-compliance and prepare and deliver to the Agents a
report as to such non-compliance setting forth the results of such tests, a
proposed plan for responding to any environmental problems described therein,
and an estimate of the costs thereof and (ii) provide to the Agents a
supplemental report of such engineer whenever the scope of such non-compliance,
or the applicable Loan Party’s response thereto or the estimated costs thereof,
shall change in any material respect.

 

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The Loan Parties acknowledge and agree that neither the Loan Documents or the
actions of any Agent or any Lender pursuant thereto shall operate or be deemed
(i) to place upon any Agent or any Lender any responsibility for the operation,
control, care, service, management, maintenance or repair of property or
facilities of the Loan Parties (except in cases where an Agent or Lender has
taken possession or control of any property, either through foreclosure or
alternative legal means) or (ii) to make any Agent or any Lender the “owner” or
“operator” of any property or facilities of the Loan Parties or a “responsible
party” within the meaning of applicable Environmental Laws. The indemnification
provisions of this Section 8.01(j) shall survive the repayment of the
Obligations and discharge of any Liens granted under the Loan Documents.

 

(k) Further Assurances. Take such action and execute, acknowledge and deliver,
and cause each of its Subsidiaries to take such action and execute, acknowledge
and deliver, at its sole cost and expense, such agreements, instruments or other
documents as the Administrative Agent or the Collateral Agent may reasonably
require from time to time in order (i) to carry out more effectively the
purposes of this Agreement and the other Loan Documents, (ii) to subject to
valid and perfected, first priority Liens any of the Collateral or any other
property of any Loan Party and its Subsidiaries, (iii) to establish and maintain
the validity and effectiveness of any of the Loan Documents and the validity,
perfection and priority of the Liens intended to be created thereby, and (iv) to
better assure, convey, grant, assign, transfer and confirm unto each Agent, each
Lender and the L/C Issuer the rights now or hereafter intended to be granted to
it under this Agreement or any other Loan Document. In furtherance of the
foregoing, to the maximum extent permitted by applicable law each Loan Party (i)
authorizes the Administrative Agent and the Collateral Agent to execute any such
agreements, instruments or other documents in such Loan Party’s name and to file
such agreements, instruments or other documents in any appropriate filing
office, (ii) authorizes the Collateral Agent to file any financing statement
required hereunder or under any other Loan Document, and any continuation
statement or amendment with respect thereto, in any appropriate filing office
without the signature of such Loan Party (including, without limitation, any
such financing statements that indicate the Collateral as “all assets” or words
of similar import), and (iii) ratifies the filing of any financing statement,
and any continuation statement or amendment with respect thereto, filed without
the signature of such Loan Party prior to the date hereof.

 

(l) Change in Collateral; Collateral Records. (i) Give the Collateral Agent not
less than 10 Business Days’ prior written notice of any change in the location
of any Collateral with a book value in excess of $500,000 (when aggregated with
all other Collateral at the same location), and, in the case of the relocation
of Equipment for purposes of repairs in the ordinary course of business, prompt
(but in any event no more than 5 Business Days’) written notice after such
relocation of Equipment with a Book Value in excess of $500,000 (when aggregated
with all other Collateral at the same location), in each case, other than to
locations set forth on Schedule 7.01(bb) or with respect to which the Collateral
Agent has filed financing statements and otherwise fully perfected its Liens
thereon, (ii) advise the Agents promptly, in sufficient detail, of any material
adverse change relating to the type, quantity or quality of the Collateral or
the Lien granted thereon, and (iii) execute and deliver, and cause each of its
Subsidiaries to execute and deliver, to the Agents for the benefit of the Agents
and the Lenders from time to time, solely for convenience in maintaining a
record of Collateral, such written

 

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statements and schedules as the Agents may reasonably require, designating,
identifying or describing the Collateral.

 

(m) Landlord Waivers; Collateral Access Agreements. (i) At any time any
Collateral with a book value in excess of $5,000,000 (when aggregated with all
other Collateral at the same location) is located on any real property of a Loan
Party that is acquired after the Effective Date which is not owned by a Loan
Party and (ii) at any time that the book value of the Collateral located on any
real property of a Loan Party that is existing on the Effective Date which is
not owned by a Loan Party and with respect to which such Loan Party was not
required to deliver a written landlord waiver, collateral access agreement or
similar agreement pursuant to Section 6.01(e)(xxiv) on the Effective Date
exceeds the book value of the Collateral located on any such real property on
the Effective Date by more than $2,500,000 (when aggregated with all other
Collateral at the same location), obtain (or in the case of clause (ii) above,
exercise commercially reasonable efforts to obtain) written landlord waivers,
collateral access agreements or similar agreements, in form and substance
reasonably satisfactory to the Agents; provided, that (x) in the event the Loan
Parties are unable to obtain any such written subordination or waiver the
Administrative Agent may in its reasonable discretion (or shall, if requested by
the Collateral Agent) establish such reserves as it deems necessary with respect
to any such Collateral and (y) no Loan Party shall be required to obtain written
subordinations or waivers for any real property in which a Loan Party leases the
subterranean mineral rights but owns in fee the surface rights to the real
property in which such leased subterranean minerals are located.

 

(n) After Acquired Real Property. Upon the acquisition by it or any of its
Subsidiaries after the date hereof of any fee interest or any leasehold interest
(other than leases for office space) in any real property (wherever located)
(each such interest being an “After Acquired Property”) (x) with a Current Value
(as defined below) in excess of $500,000 in the case of a fee interest, or (y)
requiring the payment of annual rent exceeding $75,000 the aggregate in the case
of such leasehold interest, promptly so notify the Agents, setting forth with
specificity a description of the interest acquired, the location of the real
property, any structures or improvements thereon and either an appraisal or such
Loan Party’s good-faith estimate of the current value of such real property (the
”Current Value”). The Collateral Agent shall notify such Loan Party whether it
intends to require a Mortgage (and in the case of a leasehold interest, a
landlord waiver pursuant to Section 8.01(m) above) and the other documents
referred to below. Upon receipt of such notice requesting a Mortgage and any
other documents referred to below, the Person which has acquired such After
Acquired Property shall, to the extent requested by the Collateral Agent,
promptly furnish to the Agents the following, each in form and substance
satisfactory to the Agents: (i) a Mortgage with respect to such real property
and related assets located at the After Acquired Property, each duly executed by
such Person and in recordable form, (ii) evidence of the recording of the
Mortgage referred to in clause (i) above in such office or offices as may be
necessary or, in the opinion of the Agents, desirable to create and perfect a
valid and enforceable first priority lien on the property purported to be
covered thereby or to otherwise protect the rights of the Agents and the Lenders
thereunder, (iii) a Title Insurance Policy, (iv) if available or if customarily
obtained for similar real property, a survey of such real property, certified to
the Collateral Agent and to the issuer of the Title Insurance Policy by a
licensed professional surveyor reasonably satisfactory to the Collateral Agent,
(v) if available or if customarily obtained for similar real property, Phase I
Environmental Site Assessments with respect to such real property, certified to
the Collateral Agent by a company reasonably

 

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satisfactory to the Agents, (vi) in the case of a leasehold interest, a
certified copy of the lease between the landlord and such Person with respect to
such real property in which such Person has a leasehold interest and an
attornment and nondisturbance agreement between the landlord (and any fee
mortagee) with respect to such real property and the Collateral Agent, and (vii)
such other documents or instruments (including guarantees and opinions of
counsel) as the Agents may reasonably require. The Parent shall pay all fees and
expenses, including reasonable attorneys’ fees and expenses, in connection with
each Loan Party’s obligations under this Section 8.01(n).

 

(o) Fiscal Year. Cause the Fiscal Year of the Parent and its Subsidiaries to end
on December 31 of each calendar year unless the Administrative Agent and the
Collateral Agent consent to a change in such Fiscal Year (and appropriate
related changes to this Agreement).

 

(p) Use of Proceeds. Use the proceeds of the Loans and the Letters of Credit
Accommodations in accordance with Section 7.01(t).

 

(q) Vessel Covenants. (i) Maintain a current U.S. Coast Guard certification for
each Vessel (to the extent such Vessel is in active service), (ii) comply with
(A) all U.S. Coast Guard requirements for the type of service the Vessels are
engaged in, (B) all manning requirements, and (C) all requirements of the
protection and indemnity and hull underwriters as is necessary to ensure full
insurance coverage and (iii) promptly, satisfy all maritime Liens, other than
Permitted Liens.

 

(r) Leases. Exercise each individual option, if any, to renew or extend the term
of any Lease upon demand by any Agent made at any time within one (1) year prior
to the last day upon which any such option may be exercised, and each individual
Loan Party hereby expressly authorizes and appoints the Collateral Agent its
attorney-in-fact to exercise any such option in the name of and upon behalf of
such Loan Party, which power of attorney shall be irrevocable and shall be
deemed to be coupled with an interest; provided, however, that such Loan Party
shall not be obligated to exercise any option to renew or extend the term of any
Lease, and Collateral Agent shall not have any right to exercise any such option
in the name or on behalf of such Loan Party, unless the failure to do so will
have a Material Adverse Effect. If either Agent shall determine, in its
Permitted Discretion, that the failure to exercise any such renewal or extension
option has resulted or will result in a Material Adverse Effect, the Collateral
Agent shall have the right, at its option, to take any or all of the actions
afforded to the Collateral Agent, on behalf of the Lenders, under this Agreement
or under applicable law, including, without limitation, the right to exercise
any such renewal or extension option in the name and on behalf of the applicable
Loan Party. For purposes of this Section 8.01(r), any Loan Party’s failure to
renew or extend any Lease shall not be deemed to result in a Material Adverse
Effect solely by virtue of the fact that such non-renewal or non-extension will,
by definition, cause the applicable Lease to expire, thereby terminating the
Mortgage on such Lease and making it impossible for such Loan Party to continue
to perform its obligations with respect to such Lease under the applicable Loan
Documents. Notwithstanding anything set forth herein to the contrary, each Loan
Party shall be obligated to renew or extend any Lease which is identified as a
“material lease” on Schedule 7.01(o), unless such Loan Party obtains the prior
written consent of the Collateral Agent in its Permitted Discretion to such Loan
Party’s proposed non-renewal or non-extension of the Lease in question.

 

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(s) Post-Closing Covenants. (i) If Collateral Agent records a Mortgage on either
the Facility located in Velarde, New Mexico or Kings Mountain, North Carolina in
accordance with Section 6.01(e)(iii) hereof, promptly, but in any event within
10 days after any Agent requests, deliver each of the following, each in form
and substance satisfactory to the Agents: (A) a Title Insurance Policy, and (B)
such other documents or instruments (including guarantees and opinions of
counsel, but not opinions as to the enforceability of the Mortgages) as the
Agents may reasonably require; and

 

(ii) With respect to any Loan Party that amended its charter, certificate of
formation, certificate of limited partnership or other publicly filed
organizational document on the Effective Date as contemplated by Section
6.01(e)(xii), deliver to each Agent, a true and complete copy of the charter,
certificate of formation, certificate of limited partnership or other publicly
filed organizational document of such Loan Party certified by an appropriate
official of the state of organization of such Loan Party within 30 days (or 60
days in the case of any Loan Party formed under the laws of the Commonwealth of
Pennsylvania) after the Effective Date, together with a certificate of a
Secretary or an Assistant Secretary of such Loan Party certifying that such
document is in the same form as the document delivered to the Agents on the
Effective Date and attached to the certificate of Secretary or Assistant
Secretary of such Loan Party referred to in Section 6.01(e)(xii);

 

(iii) Use its best efforts to deliver to the Collateral Agent, as soon as
possible, but in any event within 45 days following the Effective Date (such
date, the “Release Deadline”), mortgage releases with respect to each mortgage
filed against any Facility or any Vessel to secure the payment of the Senior
Secured Notes, executed by the Senior Secured Noteholders and/or the collateral
agent for such Senior Secured Noteholders, as necessary to release such
mortgages, which releases shall be in form and substance satisfactory to the
Collateral Agent; provided, that if such releases are not delivered to the
Collateral Agent on or prior to the Release Deadline, no Event of Default shall
occur under this clause (iii) if, on the Release Deadline, the Loan Parties
file, and thereafter diligently and in good faith prosecute, a motion with the
Bankruptcy Court, satisfactory in form and substance to the Collateral Agent,
seeking to compel each Senior Secured Noteholder and/or the collateral agent for
such Senior Secured Noteholders, as necessary, to deliver to the Collateral
Agent (to the extent not previously so delivered), such releases and/or any
other documentation necessary to release all of the mortgages filed against the
Facilities and the Vessels to secure the payment of the Senior Secured Notes;

 

(iv) Use its best efforts to deliver to the Collateral Agent, as soon as
possible, but in any event, not later than ten (10) days following the Effective
Date, landlord waivers, collateral access agreements or similar agreements with
respect to the following leased properties of the Loan Parties: (A) the
headquarters property located at North Point Tower, Cleveland Ohio 44114, (B)
the port facility located in Portage, Indiana 46368-1379, (C) the port facility
located in Erie, Pennsylvania 16512-0179 , (D) the property located at 684
Parkway Drive, Buchanan, Virginia 24066, and (E) the property located at 486
Clinch Valley Road, Luttrell, Tennessee 37779, each of which agreements shall be
in form and substance satisfactory to the Collateral Agent;

 

(v) Within 60 days of the Effective Date, pay all Pre-Petition Rent Arrearages,
and deliver to each Agent a certificate of an Authorized Officer, the Assistant
Treasurer or the Vice President of Finance and Accounting of the Parent, in form
and substance reasonably satisfactory to the Agents, stating that all such
Pre-Petition Rent Arrearages have been paid in full within 60 days of the
Effective Date; and

 

(vi) Within 65 days of the Effective Date, deliver amendments or
acknowledgements to each Cash Management Agreement (other than those Cash
Management Agreements to which KeyBank National Association is the Cash
Management Bank), executed by the applicable Cash Management Bank, as to such
matters as reasonably determined by, and in form and substance reasonably
satisfactory to, each Agent.

 

Section 8.02 Negative Covenants. So long as any principal of or interest on any
Loan, Letter of Credit Obligation or any other Obligation (whether or not due),
other than indemnification obligations for which no claim has been asserted,
shall remain unpaid or any Lender shall have any Revolving Credit Commitment,
Term Loan A Commitment or Term Loan B Commitment hereunder, each Loan Party
shall not, unless the Required Lenders shall otherwise consent in writing:

 

(a) Liens, Etc. Create, incur, assume or suffer to exist, or permit any of its
Subsidiaries to create, incur, assume or suffer to exist, any Lien upon or with
respect to any of its properties, whether now owned or hereafter acquired; file
or suffer to exist under the Uniform Commercial Code or any similar law or
statute of any jurisdiction, a financing statement (or the equivalent thereof)
that names it or any of its Subsidiaries as debtor; sign or suffer to exist any
security agreement authorizing any secured party thereunder to file such
financing statement (or the equivalent thereof); sell any of its property or
assets subject to an understanding or agreement, contingent or otherwise, to
repurchase such property or assets (including sales of Accounts) with

 

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recourse to it or any of its Subsidiaries or assign or otherwise transfer, or
permit any of its Subsidiaries to assign or otherwise transfer, any account or
other right to receive income; other than, as to all of the above, Permitted
Liens.

 

(b) Indebtedness. Create, incur, assume, guarantee or suffer to exist, or
otherwise become or remain liable with respect to, or permit any of its
Subsidiaries to create, incur, assume, guarantee or suffer to exist or otherwise
become or remain liable with respect to, any Indebtedness other than Permitted
Indebtedness.

 

(c) Fundamental Changes; Dispositions. Wind-up, liquidate or dissolve, or merge,
consolidate or amalgamate with any Person, or convey, sell, lease or sublease,
transfer or otherwise dispose of, whether in one transaction or a series of
related transactions, all or any part of its business, property or assets,
whether now owned or hereafter acquired (or agree to do any of the foregoing),
or purchase or otherwise acquire, whether in one transaction or a series of
related transactions, all or substantially all of the assets of any Person (or
any division thereof) (or agree to do any of the foregoing), or permit any of
its Subsidiaries to do any of the foregoing; provided, however, that:

 

(i) any Loan Party and its Subsidiaries may (A) sell Inventory in the ordinary
course of business, (B) dispose of obsolete or worn-out equipment or equipment
no longer used in the ordinary course of business, (C) sell or otherwise dispose
of other property or assets in an aggregate amount not less than the fair market
value of such property or assets (in each case, for consideration comprised of
at least 75% cash), (D) enter into licensing arrangements entered into in the
ordinary course of business, and (E) sell or otherwise dispose of its properties
or assets to any other Loan Party; provided that the Net Cash Proceeds of such
Dispositions (w) in the case of clause (B) above, does not exceed $2,000,000 in
the aggregate in any Fiscal Year, (x) in the case of clause (C) above, does not
exceed $1,000,000 in the aggregate in any Fiscal Year, (y) in all cases, are
paid to the Administrative Agent for the benefit of the Lenders pursuant to the
terms of Section 2.05(c), and (z) in the event that any Revolver Priority
Collateral associated with the Mica Business is not sold in connection with any
sale of the Mica Business, such Revolver Priority Collateral shall be deemed to
be ineligible for Availability purposes by the Administrative Agent in its
Permitted Discretion;

 

(ii) any Loan Party may be merged into another Loan Party, or may be
consolidated with another Loan Party, so long as (A) if any Borrower is one of
the parties to any such merger, a Borrower shall be the sole surviving entity of
such merger, (B) no other provision of this Agreement would be violated thereby,
(C) such Loan Party gives the Agents at least 15 days’ prior written notice of
such merger or consolidation, (E) no Default or Event of Default shall have
occurred and be continuing either before or after giving effect to such
transaction, and (E) the Agents’ and the Lenders’ rights in any Collateral,
including, without limitation, the existence, perfection and priority of any
Lien thereon, are not adversely affected by such merger or consolidation;

 

(iii) any Subsidiary that is not a Significant Subsidiary may wind-up its
business and operations, liquidate or dissolve so long as (A) no other provision
of this Agreement would be violated thereby, and (B) no Default or Event of
Default shall have occurred and be continuing either before or after giving
effect to such transaction;

 

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(iv) the Loan Parties may make asset sales constituting Permitted Dispositions,
provided that (A) except with respect to the sale of the Mica Business of the
Loan Parties as described on Schedule 8.02(c) hereto, no such asset shall be
sold for less than 100% of its appraised value set forth on the most recent
appraisal obtained by the Agents (for consideration comprised of at least 75%
cash), (B) with respect to the sale of the Mica Business as described on
Schedule 8.02(c) hereto, (x) the terms of such sale shall be subject to the
approval of the Parent’s Board of Directors and (y) such assets shall not be
sold for consideration comprised of less than 75% cash, and (C) the Net Cash
Proceeds of the Dispositions described in clauses (A) and (B) above are paid to
the Administrative Agent for the benefit of the Lenders to the extent required
pursuant to the terms of Section 2.05(c); and

 

(v) the Borrowers may enter into Permitted Acquisitions.

 

(d) Change in Nature of Business. Make, or permit any of its Subsidiaries to
make, any change in the nature of its business as described in Section 7.01(l).

 

(e) Loans, Advances, Investments, Etc. Make or commit or agree to make any loan,
advance, guarantee of obligations, other extension of credit or capital
contributions to, or hold or invest in or commit or agree to hold or invest in,
or purchase or otherwise acquire or commit or agree to purchase or otherwise
acquire any shares of the Capital Stock, bonds, notes, debentures or other
securities of, or make or commit or agree to make any other investment in, any
other Person, or purchase or own any futures contract or otherwise become liable
for the purchase or sale of currency or other commodities at a future date in
the nature of a futures contract, or permit any of its Subsidiaries to do any of
the foregoing, except for:

 

(i) investments existing on the date hereof, as set forth on Schedule 8.02(e)
hereto, but not any increase in the amount thereof (other than accretion in
value) as set forth in such Schedule or any other modification of the terms
thereof,

 

(ii) loans and advances to any Loan Party,

 

(iii) Permitted Investments, provided that (A) the Collateral Agent has a first
priority perfected Lien in such Permitted Investments, and (B) if at the time
any Permitted Investment is made, there are outstanding Revolving Loans, then
the aggregate initial value of any Permitted Investment may not exceed
$1,000,000.

 

(iv) Hedging Agreements entered into in the ordinary course of business and not
for speculative purposes,

 

(v) loans and advances to employees of the Loan Parties in the ordinary course
of business and not exceeding in the aggregate amount at any one time
outstanding $500,000,

 

(vi) investments received in connection with an Insolvency Proceeding of any
supplier, customer or other Person having an obligation in favor of any Loan
Party as a result of a settlement of delinquent obligations of, or other
disputes with, such customer, supplier or such other Person arising in the
ordinary course of business,

 

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(vii) (A) investments not constituting loans or advances by any Loan Party in
any other Loan Party and (B) investments constituting loans or advances by any
Borrower in any other Borrower, provided that, such loans or advances shall be
evidenced by a promissory note, in form and substance satisfactory to Collateral
Agent, which shall be pledged and delivered to the Collateral Agent (together
with an allonge duly executed in blank by the obligee on such note) and the
Indebtedness evidenced by such promissory note shall be expressly subject to
Section 12.06 of this Agreement;

 

(viii) investments permitted under clause (f) of the definition of “Permitted
Indebtedness”,

 

(ix) investments in deposit accounts in the ordinary course of business,

 

(x) security deposits required by utility companies or other Persons in a
similar line of business made in the ordinary course of business,

 

(xi) investments in an aggregate amount not in excess of $1,000,000 maintained
at Key Bank National Association in connection with the deposit accounts
maintained with, and the cash management services provided by, Key Bank National
Association, and

 

(xii) Permitted Acquisitions.

 

(f) Lease Obligations. Create, incur or suffer to exist, or permit any of its
Subsidiaries to create, incur or suffer to exist, any obligations as lessee (i)
for the payment of rent for any real or personal property in connection with any
sale and leaseback transaction, or (ii) for the payment of rent for any real or
personal property under leases or agreements to lease other than (A) Capitalized
Lease Obligations which would not cause the aggregate amount of all obligations
under Capitalized Leases entered into after the Effective Date owing by all Loan
Parties and their Subsidiaries in any Fiscal Year to exceed the amounts set
forth in subsection (g) of this Section 8.02, and (B) Operating Lease
Obligations which would not cause the aggregate annual payments of all Operating
Lease Obligations (I) with respect to leases entered into after Effective Date
owing by all Loan Parties and their Subsidiaries to exceed $7,500,000 in any
Fiscal Year and (II) with respect to leases whether entered into before or after
the Effective Date owing by all Loan Parties and their Subsidiaries to exceed
$18,500,000 at any time outstanding.

 

(g) Capital Expenditures. For each Fiscal Year set forth below, make or commit
or agree to make, or permit any of its Subsidiaries to make or commit or agree
to make, any Capital Expenditure (by purchase or Capitalized Lease) that would
cause the aggregate amount of all such Capital Expenditures arising from
purchases made or Capitalized Leases entered into by the Loan Parties and their
Subsidiaries in such Fiscal Year to exceed the exceed the amount set forth below
corresponding to such Fiscal Year:

 

Month

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

   Amount

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

Fiscal Year 2005 and each Fiscal Year thereafter

   $ 22,500,000

 

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; provided, that (i) if at the end of any Fiscal Year set forth above, the
amount specified above for Capital Expenditures during such Fiscal Year exceeds
the aggregate amount of Capital Expenditures actually made or incurred by the
Borrowers or any of their Subsidiaries on a consolidated basis during such
Fiscal Year (the amount of such excess being referred to herein as the “Excess
Amount”), the Loan Parties shall be entitled to make additional Capital
Expenditures in any succeeding Fiscal Year in an aggregate amount equal to the
lesser of (A) 50% of such Excess Amount and (B) $3,000,000 and (ii) Capital
Expenditures made pursuant to this Section 8.02(g) during any Fiscal Year shall
be deemed made first, in respect of amounts permitted for such Fiscal Year as
provided above (without giving effect to amounts carried over from any prior
Fiscal Year pursuant to clause (i) above) and second, in respect of the Excess
Amount carried over from any prior Fiscal Year pursuant to clause (i) above. If
at the end of any Fiscal Year set forth above, the Consolidated EBITDA of the
Parent and its Subsidiaries for the immediately preceding twelve month period
ended on the last day of such Fiscal Year exceeds the Projected Consolidated
EBITDA of the Parent and its Subsidiaries for the immediately preceding twelve
month period ended on the last day of such Fiscal Year (the amount of such
excess being referred to herein as the “EBITDA Excess Amount”), then the Loan
Parties shall be entitled to make additional Capital Expenditures in the next
succeeding Fiscal Year in an aggregate amount equal to the lesser of (x) 25% of
such EBITDA Excess Amount and (y) $3,000,000, provided that, notwithstanding the
foregoing, Capital Expenditures made pursuant to this Section 8.02(g) during any
Fiscal Year shall be deemed made first, in respect of amounts permitted for such
Fiscal Year as provided above (without giving effect to (I) amounts carried over
from any prior Fiscal Year pursuant to clause (i) above or (II) any increases in
the amounts specified above in respect of the EBITDA Excess Amount), second, in
respect of the Excess Amount carried over from any prior Fiscal Year pursuant to
clause (i) above, and third, in respect of the EBITDA Excess Amount for such
Fiscal Year.

 

(h) Restricted Payments. (i) Declare or pay any dividend or other distribution,
direct or indirect, on account of any Capital Stock of any Loan Party or any of
its Subsidiaries, now or hereafter outstanding, (ii) make any repurchase,
redemption, retirement, defeasance, sinking fund or similar payment, purchase or
other acquisition for value, direct or indirect, of any Capital Stock of any
Loan Party or any direct or indirect parent of any Loan Party, now or hereafter
outstanding, (iii) make any payment to retire, or to obtain the surrender of,
any outstanding warrants, options or other rights for the purchase or
acquisition of shares of any class of Capital Stock of any Loan Party, now or
hereafter outstanding, (iv) return any Capital Stock to any shareholders or
other equity holders of any Loan Party or any of its Subsidiaries, or make any
other distribution of property, assets, shares of Capital Stock, warrants,
rights, options, obligations or securities thereto as such or (v) pay any
management fees or any other fees or expenses (including the reimbursement
thereof by any Loan Party or any of its Subsidiaries) pursuant to any
management, consulting or other services agreement to any of the shareholders or
other equityholders of any Loan Party or any of its Subsidiaries or other
Affiliates, or to any other Subsidiaries or Affiliates of any Loan Party;
provided, however,

 

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(w) dividends or other distributions may be made to any Loan Party by any other
Loan Party;

 

(x) Parent may issue Capital Stock to employees and managers in connection with
the exercise of their stock options in accordance with the terms and provisions
of the Management Stock Plan;

 

(y) Parent may pay cash dividends on the Preferred Stock, provided that, (A)
such dividends are paid not earlier than the third anniversary after the
Effective Date, (B) immediately before and immediately after giving effect to
such payment, no Default or Event of Default shall exist, (C) immediately before
and immediately after giving effect to such payment, Borrowers shall have Excess
Availability of at least $20,000,000, (D) the Fixed Charge Coverage Ratio of the
Parent and its Subsidiaries (I) for the period of four (4) consecutive fiscal
quarters ended immediately prior to the date of such payment for which there are
available financial statements and (II) on a pro forma basis for the period of
four (4) consecutive fiscal quarters ending immediately after the date of such
payment, in each case, is greater than 3.00 to 1.00, and (E) the Agents have
received a certificate, in form and substance reasonably satisfactory to the
Agents, signed by the chief financial officer, the Assistant Treasurer or the
Vice President of Finance and Accounting of the Parent, certifying as to the
matters set forth in subclause (D) of this clause (y) and setting forth in
reasonable detail the calculations required to establish compliance therewith;
and

 

(z) the Parent may repurchase the Preferred Stock in an amount equal to the
unused portion of the Excluded Equity Proceeds, provided that (A) immediately
before and immediately after giving effect to such payment, no Default or Event
of Default shall exist, (B) immediately before and immediately after giving
effect to such payment, Borrowers shall have Excess Availability of at least
$20,000,000, and (C) the Borrowers have first made all prepayments of the Loans
required under Section 2.05(c)(vi)(B).

 

(i) Federal Reserve Regulations. Permit any Loan or the proceeds of any Loan
under this Agreement to be used for any purpose that would cause such Loan to be
a margin loan under the provisions of Regulation T, U or X of the Board.

 

(j) Transactions with Affiliates. Enter into, renew, extend or be a party to, or
permit any of its Subsidiaries to enter into, renew, extend or be a party to,
any transaction or series of related transactions (including, without
limitation, the purchase, sale, lease, transfer or exchange of property or
assets of any kind or the rendering of services of any kind) with any Affiliate,
except (i) in the ordinary course of business in a manner and to an extent
consistent with past practice and necessary or desirable for the prudent
operation of its business, for fair consideration and on terms no less favorable
to it or its Subsidiaries than would be obtainable in a comparable arm’s length
transaction with a Person that is not an Affiliate thereof, (ii) transactions
with another Loan Party, and (iii) transactions permitted by Section 8.02(e).

 

(k) Modifications of Indebtedness, Organizational Documents and Certain Other
Agreements; Etc. (i) Amend, modify or otherwise change (or permit the amendment,
modification or other change in any manner of) any of the provisions of any of
its or its Subsidiaries’ Indebtedness or of any instrument or agreement
(including, without limitation, any

 

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purchase agreement, indenture, loan agreement or security agreement) relating to
any such Indebtedness (including, without limitation, the Vessel Term Loan
Agreement and the MLO Contract) if such amendment, modification or change would
shorten the final maturity or average life to maturity of, or require any
payment to be made earlier than the date originally scheduled on, such
Indebtedness, would increase the interest rate applicable to such Indebtedness,
would change the subordination provision, if any, of such Indebtedness, or would
otherwise be adverse to the Lenders or the issuer of such Indebtedness in any
respect, (ii) except for the Obligations, make any voluntary or optional
payment, prepayment, redemption, defeasance, sinking fund payment or other
acquisition for value of any of its or its Subsidiaries’ Indebtedness
(including, without limitation, by way of depositing money or securities with
the trustee therefor before the date required for the purpose of paying any
portion of such Indebtedness when due), or refund, refinance, replace or
exchange any other Indebtedness for any such Indebtedness (except to the extent
such Indebtedness is otherwise expressly permitted by the definition of
“Permitted Indebtedness”), or make any payment, prepayment, redemption,
defeasance, sinking fund payment or repurchase of any outstanding Indebtedness
as a result of any asset sale, change of control, issuance and sale of debt or
equity securities or similar event, or make any payment in respect of the MLO
Contract or the MLO Guaranty, except as expressly permitted by the subordination
terms contained therein on the Effective Date (or as such subordination
provisions are amended from time to time in accordance with the terms thereof as
in effect on the Effective Date), or give any notice with respect to any of the
foregoing; provided, however, that (A) payments may be made solely on the
Effective Date with respect to the Indebtedness evidenced by the Senior Secured
Notes in accordance with the Senior Secured Notes Redemption and (B) so long as
both before and after giving effect to such payment, no Default or Event of
Default shall exist, the Borrowers may prepay the outstanding principal amount
of the Vessel Term Loan in an amount equal to the unused portion of the Excluded
Equity Proceeds after first making all payments of the Loans required under
Section 2.05(c)(vi)(B), (iii) except as permitted by Section 8.02(c), amend,
modify or otherwise change its name, jurisdiction of organization,
organizational identification number or FEIN or (iv) amend, modify or otherwise
change its certificate of incorporation or bylaws (or other similar
organizational documents), including, without limitation, by the filing or
modification of any certificate of designation, or any agreement or arrangement
entered into by it, with respect to any of its Capital Stock (including any
shareholders’ agreement), or enter into any new agreement with respect to any of
its Capital Stock, except any such amendments, modifications or changes or any
such new agreements or arrangements pursuant to this clause (iv) that either
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect (it being understood that if any Loan Party that is a
partnership or a limited liability company, or any Loan Party with any
Subsidiary that is a partnership or a limited liability company, amends or
modifies its organizational documents to cause such partnership interests or
membership interests to (A) be dealt in or traded on securities exchanges or in
securities markets, (B) become a security for purposes of Article 8 of any
relevant Uniform Commercial Code, (C) become an investment company security
within the meaning of Section 8-103 of any relevant Uniform Commercial Code or
(D) be evidenced by a certificate, such amendment or modification shall be
deemed to reasonably be expected to have a Material Adverse Effect).

 

(1) Investment Company Act of 1940. Engage in any business, enter into any
transaction, use any securities or take any other action or permit any of its
Subsidiaries to do any of the foregoing, that would cause it or any of its
Subsidiaries to become subject to the registration requirements of the
Investment Company Act of 1940, as amended, by virtue of being

 

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an “investment company” or a company “controlled” by an “investment company” not
entitled to an exemption within the meaning of such Act.

 

(m) Compromise of Accounts. Compromise or adjust any Account (or extend the time
of payment thereof) or grant any discounts, allowances or credits or permit any
of its Subsidiaries to do so other than in the ordinary course of its business
consistent with historical practices, provided, however, in no event shall all
such discounts, allowances and credits exceed $500,000 in any Fiscal Year and no
such extension of the time for payment extend beyond 30 days from the original
due date thereof, in each case without the prior written consent of the
Administrative Agent.

 

(n) ERISA. (i) Engage, or permit any ERISA Affiliate to engage, in any
transaction described in Section 4069 of ERISA; (ii) engage, or permit any ERISA
Affiliate to engage, in any prohibited transaction described in Section 406 of
ERISA or 4975 of the Internal Revenue Code for which a statutory or class
exemption is not available or a private exemption has not previously been
obtained from the U.S. Department of Labor; (iii) adopt or permit any ERISA
Affiliate to adopt any employee welfare benefit plan within the meaning of
Section 3(1) of ERISA which provides benefits to employees after termination of
employment other than as required by Section 601 of ERISA or applicable law;
(iv) fail to make any contribution or payment in excess of $1,000,000 to any
Multiemployer Plan which it or any ERISA Affiliate may be required to make under
any agreement relating to such Multiemployer Plan, or any law pertaining
thereto; or (v) fail, or permit any ERISA Affiliate to fail, to pay any required
installment or any other payment required under Section 412 of the Internal
Revenue Code on or before the due date for such installment or other payment.

 

(o) Environmental. Permit the Handling or Release of Hazardous Materials at any
property owned or leased by it or any of its Subsidiaries, except in compliance
in all material respects with Environmental Laws and so long as such Handling or
Release disposal of Hazardous Materials does not result in a Material Adverse
Effect.

 

(p) Certain Agreements. Agree to any material amendment or other material change
to or material waiver of any of its rights under any Material Contract if such
amendment, change or waiver would (i) have an adverse effect on the Collateral
or on Collateral Agent’s rights in any of the Collateral or (ii) otherwise be
adverse to the Agents or the Lenders.

 

(q) Maritime Industry Standards. (i) Permit any Vessel to be used for any
illegal purpose or to commence or continue a voyage in unseaworthy condition,
(ii) permit any charterer of any Vessel to operate any Vessel out of a port
other than a United States port, or (iii) remove any Vessel from the United
States.

 

(r) Cancellation of Indebtedness. Cancel any claim or debt owing to it, except
for reasonable consideration negotiated on an arm’s length basis and in the
ordinary course of its business consistent with past practices.

 

(s) No Impairment of Intercompany Transfers. Directly or indirectly enter into
or become bound by any agreement, instrument, indenture or other obligation
(other than this Agreement and the other Loan Documents) that could directly or
indirectly restrict, prohibit or

 

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require the consent of any Person with respect to the payment of dividends or
distributions or the making or repayment of intercompany loans by a Subsidiary
of any Loan Party to any Loan Party or between Loan Parties.

 

(t) Limitations on Dividends and Other Payment Restrictions Affecting
Subsidiaries. Create or otherwise cause, incur, assume, suffer or permit to
exist or become effective any consensual encumbrance or restriction of any kind
on the ability of any Subsidiary of any Loan Party (i) to pay dividends or to
make any other distribution on any shares of Capital Stock of such Subsidiary
owned by any Loan Party or any of its Subsidiaries, (ii) to pay or prepay or to
subordinate any Indebtedness owed to any Loan Party or any of its Subsidiaries,
(iii) to make loans or advances to any Loan Party or any of its Subsidiaries or
(iv) to transfer any of its property or assets to any Loan Party or any of its
Subsidiaries, or permit any of its Subsidiaries to do any of the foregoing;
provided, however, that nothing in any of clauses (i) through (iv) of this
Section 8.02(t) shall prohibit or restrict compliance with:

 

(A) this Agreement and the other Loan Documents;

 

(B) any applicable law, rule or regulation (including, without limitation,
applicable currency control laws and applicable state corporate statutes
restricting the payment of dividends in certain circumstances);

 

(C) in the case of clause (iv) above, any agreement setting forth customary
restrictions on the subletting, assignment or transfer of any property or asset
that is a lease, license, conveyance or contract of similar property or assets;
or

 

(D) in the case of clause (iv) above, any agreement, instrument or other
document evidencing a Permitted Lien from restricting on customary terms the
transfer of any property or assets subject thereto.

 

(u) Limitation on Issuance of Capital Stock. Issue or sell or enter into any
agreement or arrangement for the issuance and sale of, or permit any of its
Subsidiaries to issue or sell or enter into any agreement or arrangement for the
issuance and sale of, any shares of its Capital Stock, any securities
convertible into or exchangeable for its Capital Stock or any warrants;
provided, however, that the Parent may issue Capital Stock so long as the Net
Cash Proceeds are applied in accordance with Section 2.05(c)(vi) hereof.

 

(v) Senior Secured Notes Redemption. Use, transfer, or apply any of the proceeds
from the issuance and sale of the Preferred Stock on the Effective Date for any
purpose other than the payment of Indebtedness evidenced by the Senior Secured
Notes and the payment of fees and expenses in connection with the Senior Secured
Notes Redemption.

 

(w) Location of Assets. Maintain, or permit any of their Subsidiaries to
maintain, assets outside of the United States, provided that up to 5% of the
consolidated assets of the Parent and its Subsidiaries in the aggregate may be
maintained in Canada and Mexico.

 

Section 8.03 Financial Covenants. So long as any principal of or interest on any
Loan, any reimbursement obligation with respect to any Letter of Credit or any
other Obligation (whether or not due) shall remain unpaid or any Lender shall
have any Revolving Credit

 

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Commitment, Term Loan A Commitment or Term Loan B Commitment hereunder, each
Loan Party shall not, unless the Required Lenders shall otherwise consent in
writing:

 

(a) Consolidated EBITDA. Permit Consolidated EBITDA of the Parent and its
Subsidiaries for each period of four (4) consecutive fiscal quarters of the
Parent and its Subsidiaries for which the last quarter ends on a date set forth
below to be less than the applicable amount set forth opposite such date:

 

Fiscal Quarter End

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

  

Consolidated

EBITDA

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

March 31, 2005

   $ 47,000,000

June 30, 2005

   $ 47,500,000

September 30, 2005

   $ 48,000,000

December 31, 2005

   $ 48,500,000

March 31, 2006

   $ 48,500,000

June 30, 2006

   $ 49,500,000

September 30, 2006

   $ 51,000,000

December 31, 2006

   $ 51,500,000

March 31, 2007

   $ 51,500,000

June 30, 2007

   $ 53,000,000

September 30, 2007

   $ 54,000,000

December 31, 2007

   $ 55,000,000

March 31, 2008

   $ 55,000,000

June 30, 2008

   $ 56,000,000

September 30, 2008

   $ 57,500,000

December 31, 2008 and each fiscal quarter thereafter

   $ 58,000,000

 

(b) Excess Availability. Permit Excess Availability to be less than $5,000,000
at any time.

 

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(c) Minimum Fixed Charge Coverage Ratio. Permit the Fixed Charge Coverage Ratio
of the Parent and its Subsidiaries for each period of four (4) consecutive
fiscal quarters of the Parent and its Subsidiaries for which the last quarter
ends on a date set forth below to be less than the ratio set forth opposite such
date:

 

Fiscal Quarter End

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

   Ratio

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

March 31, 2005

   1.50 to 1.00

June 30, 2005

   1.50 to 1.00

September 30, 2005

   1.50 to 1.00

December 31, 2005

   1.50 to 1.00

March 31, 2006

   1.40 to 1.00

June 30, 2006

   1.35 to 1.00

September 30, 2006

   1.30 to 1.00

December 31, 2006

   1.25 to 1.00

March 31, 2007

   1.25 to 1.00

June 30, 2007

   1.30 to 1.00

September 30, 2007

   1.35 to 1.00

December 31, 2007

   1.35 to 1.00

March 31, 2008, and each fiscal quarter thereafter

   1.40 to 1.00

 

ARTICLE IX

 

MANAGEMENT, COLLECTION AND STATUS OF

ACCOUNTS AND OTHER COLLATERAL

 

Section 9.01 Cash Management. (a) As of the Effective Date, the Loan Parties
shall (i) cause all cash and all proceeds from accounts receivable and the sale
of Inventory constituting Revolver Priority Collateral Proceeds to be deposited
into the Cash Management Accounts that are deposit accounts in the ordinary
course of business of the Loan Parties consistent with past practice, (ii) cause
all funds in such Cash Management Accounts that are deposit accounts to be
transferred into the Cash Concentration Account in accordance with

 

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Section 9.01(g) below, (iii) cause all cash deposited in the Cash Concentration
Account to be sent by wire transfer to the Administrative Agent’s Account on a
daily basis, (iv) instruct the Administrative Agent to cause all funds
transferred to the Administrative Agent’s Account to be credited to the Loan
Account and applied to reduce the Obligations outstanding from time to time, and
(v) take all such actions as the Administrative Agent deems necessary or
advisable to send all remittances with respect to, or other Proceeds of,
Revolver Priority Collateral to the Administrative Agent’s Account to be applied
to the Obligations, and (vi) have executed and delivered to the Administrative
Agent (A) a Cash Management Agreement with respect to each Cash Management
Account, (B) a Concentration Account Agreement with respect to the Cash
Concentration Account, and (C) any similar agreements that may be reasonably
required by the Administrative Agent to establish the full cash dominion
described above. Upon receipt by any Loan Party of collections of cash and any
proceeds of Collateral, the Loan Parties shall immediately deposit all such
payments into the Cash Concentration Account, Cash Management Accounts, or any
deposit account or other bank account under the dominion and control of the
Administrative Agent.

 

(b) After the occurrence and during the continuance of an Event of Default, each
Agent may send a notice of assignment and/or notice of the Lenders’ security
interest to any and all Account Debtors or third parties holding or otherwise
concerned with any of the Collateral; provided that such notice shall direct
that any proceeds of such Collateral be paid directly to the Administrative
Agent, for the benefit of Agents and Lenders, and thereafter the Collateral
Agent shall have the sole right to collect the Accounts and cause all payments
to be made to the Administrative Agent to be deposited in the Administrative
Agent’s Account and/or take possession of the Collateral and the books and
records relating thereto. The Loan Parties shall not, without prior written
consent of the Agents, grant any extension of time of payment of any Account,
compromise or settle any Account for less than the full amount thereof, release,
in whole or in part, any Person or property liable for the payment thereof, or
allow any credit or discount whatsoever thereon, except, in the absence of a
continuing Event of Default, as permitted by Section 8.02(m).

 

(c) Each Loan Party hereby appoints each Agent or its designee on behalf of such
Agent as the Loan Parties’ attorney-in-fact with power exercisable during the
continuance of an Event of Default to endorse any Loan Party’s name upon any
notes, acceptances, checks, drafts, money orders or other evidences of payment
relating to the Accounts, to sign any Loan Party’s name on any invoice or bill
of lading relating to any of the Accounts, drafts against Account Debtors with
respect to Accounts, assignments and verifications of Accounts and notices to
Account Debtors with respect to Accounts, to send verification of Accounts, and
to notify the Postal Service authorities to change the address for delivery of
mail addressed to any Loan Party to such address as such Agent may designate and
to do all other acts and things necessary to carry out this Agreement. All acts
of said attorney or designee are hereby ratified and approved, and said attorney
or designee shall not be liable for any acts of omission or commission (other
than acts of omission or commission constituting gross negligence or willful
misconduct as determined by a final judgment of a court of competent
jurisdiction), or for any error of judgment or mistake of fact or law; this
power being coupled with an interest is irrevocable until all of the Loans,
Letter of Credit Obligations and other Obligations under the Loan Documents are
Paid in Full and all of the Loan Documents are terminated.

 

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(d) Nothing herein contained shall be construed to constitute any Agent as agent
of any Loan Party for any purpose whatsoever, and the Agents shall not be
responsible or liable for any shortage, discrepancy, damage, loss or destruction
of any part of the Collateral wherever the same may be located and regardless of
the cause thereof (other than from acts of omission or commission constituting
gross negligence or willful misconduct as determined by a final judgment of a
court of competent jurisdiction). The Agents and the Lenders shall not, under
any circumstance or in any event whatsoever, have any liability for any error or
omission or delay of any kind occurring in the settlement, collection or payment
of any of the Accounts or any instrument received in payment thereof or for any
damage resulting therefrom (other than acts of omission or commission
constituting gross negligence or willful misconduct as determined by a final
judgment of a court of competent jurisdiction). The Agents, by anything herein
or in any assignment or otherwise, do not assume any of the obligations under
any contract or agreement assigned to any Agent and shall not be responsible in
any way for the performance by any Loan Party of any of the terms and conditions
thereof.

 

(e) If any Account includes a charge for any tax payable to any Governmental
Authority, each Agent is hereby authorized (but in no event obligated) in its
discretion to pay the amount thereof to the proper taxing authority for the Loan
Parties’ account and to charge the Loan Parties therefor. The Administrative
Borrower shall notify the Administrative Agent if any Account includes any taxes
due to any such Governmental Authority and, in the absence of such notice, the
Administrative Agent shall have the right to retain the full proceeds of such
Account and shall not be liable for any taxes that may be due by reason of the
sale and delivery creating such Account.

 

(f) Notwithstanding any other terms set forth in the Loan Documents, the rights
and remedies of the Agents and the Lenders herein provided, and the obligations
of the Loan Parties set forth herein, are cumulative of, may be exercised singly
or concurrently with, and are not exclusive of, any other rights, remedies or
obligations set forth in any other Loan Document or as provided by law.

 

(g) With respect to each Cash Management Account identified as a deposit account
on Schedule 7.01(u), on the last Business Day of each month that the balance in
any such account exceeds $5,000, the applicable Loan Party shall initiate a
federal funds wire transfer of the balance of all available funds on deposit in
such account in excess of $5,000 on such Business Day to the Concentration
Account; provided, however, that any time such transfer would be in an amount of
less than $1,000, such transfer shall be made only upon the written request of
the Administrative Agent. No Loan Party shall at any time maintain a balance in
excess of $50,000 for a period exceeding three consecutive days located in an
account at a bank or financial institution other than a Cash Management Account
or a Concentration Account. Without limiting the foregoing, the aggregate amount
of funds maintained by Loan Parties in Local Bank Accounts shall not exceed
$500,000 at any time.

 

Section 9.02 Collateral Custodian. Upon the occurrence and during the
continuance of any Event of Default, the Collateral Agent may at any time and
from time to time employ and maintain on the premises of any Loan Party a
custodian reasonably acceptable to the Agents who shall have full authority to
do all acts necessary to protect the Agents’ and the Lenders’ interests. Each
Loan Party hereby agrees to, and to cause its Subsidiaries to, cooperate

 

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with any such custodian and to do whatever the Collateral Agent may reasonably
request to preserve the Collateral. All reasonable costs and expenses incurred
by the Collateral Agent by reason of the employment of the custodian shall be
the responsibility of the Borrowers and charged to the Loan Account.

 

Section 9.03 Collateral Reporting.

 

(a) The Borrowers shall provide the Administrative Agent with the following
documents in form and detail satisfactory to the Administrative Agent:

 

(i) as reasonably required by the Administrative Agent, schedules of sales made,
credits issued and cash received;

 

(ii) as soon as possible after the end of each fiscal month of the Parent (but
in any event not later than the fifteenth day of the succeeding fiscal month of
the Parent), on a monthly basis or more frequently as the Administrative Agent
may request: (A) perpetual inventory reports, (B) inventory reports by location
and category (and including the amounts of Inventory, the value thereof at any
leased locations and at premises of warehouses, processors or other third
parties and detail of all additions and reductions (cash and non-cash) with
respect to inventory), (C) agings of Accounts (together with a reconciliation to
the previous month’s aging and general ledger), (D) agings of accounts payable
(and including information indicating the amounts owing to owners and lessors of
leased premises, warehouses, processors and other third parties from time to
time in possession of any Collateral) and (E) a report setting forth all issued
and outstanding letters of credit, in each case certified by an Authorized
Officer, the Assistant Treasurer or the Vice President of Finance and Accounting
of the Parent as being accurate and complete;

 

(iii) as soon as possible after the end of each fiscal month of the Parent (but
in any event not later than the thirtieth day of the succeeding fiscal month) or
more frequently as the Administrative Agent may request: (A) a reconciliation of
the aging Accounts trial balance of the Loan Parties to the most recent
Borrowing Base Certificate, general ledger and monthly financial statements
delivered pursuant to Section 8.01(a), in each case accompanied by such
supporting detail and documentation as may be requested by the Administrative
Agent, (B) a monthly reconciliation of the perpetual Inventory by locations of
the Loan Parties to the most recent Borrowing Base Certificate, general ledger
and monthly financial statements delivered pursuant to Section 8.01(a), in each
case accompanied by such supporting detail and documentation as may be requested
by the Administrative Agent, and (C) an aging accounts payable and a
reconciliation of that accounts payable aging to the Parent’s general ledger and
monthly financial statements delivered pursuant to Section 8.01(a), in each case
accompanied by such supporting detail and documentation as may be requested by
the Administrative Agent;

 

(iv) on Tuesday of each week as of the Friday of the immediately preceding week
(or the first Tuesday following any week that includes the last day of a
calendar month) or at such more frequent intervals as any Agent may reasonably
request from time to time, (i) collateral reports with respect to the Borrowers
including all additions (supported by invoice registers and/or debt memo
registers) and reductions (supported by cash

 

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receipts journal and credit memo journal) with respect to Accounts of the Loan
Parties and (ii) a Borrowing Base Certificate referred to in Section 8.01(a)(vi)
in each case accompanied by such supporting detail and documentation as may be
requested by any Agent;

 

(v) upon the Administrative Agent’s reasonable request, (A) copies of customer
statements, purchase orders, sales invoices, credit memos, remittance advices
and reports, and copies of deposit slips and bank statements, (B) copies of
shipping and delivery documents, and (C) copies of purchase orders, invoices and
delivery documents for Inventory and Equipment acquired by any Borrower or any
Guarantor; and

 

(vi) such other reports as to the portion of the Collateral comprised of
Inventory and Accounts as the Administrative Agent shall reasonably request from
time to time.

 

(b) If any Loan Party’s records or reports of the Collateral are prepared or
maintained by an accounting service, contractor, shipper or other agent, such
Loan Party hereby irrevocably authorizes such service, contractor, shipper or
agent to deliver such records, reports, and related documents to the
Administrative Agent and to follow the Administrative Agent’s instructions with
respect to further services at any time that an Event of Default has occurred
and is continuing.

 

Section 9.04 Accounts Covenants.

 

(a) The Administrative Borrower shall notify the Administrative Agent promptly
of: (i) any material delay in any Loan Party’s performance of any of its
material obligations to any Account Debtor or the assertion of any material
claims, offsets, defenses or counterclaims by any Account Debtor, or any
material disputes with Account Debtors, or any settlement, adjustment or
compromise thereof, (ii) all material adverse information known to any Borrower
or any Guarantor relating to the financial condition of any Account Debtor to
the extent the aggregate outstanding amount of Accounts of such Account Debtor
exceeds $250,000 and (iii) any event or circumstance which, to the best of any
Loan Party’s knowledge, would cause the Administrative Agent to consider any
then existing Accounts as no longer constituting Eligible Accounts. No credit,
discount, allowance or extension or agreement for any of the foregoing shall be
granted to any Account Debtor without the Administrative Agent’s consent, except
in the ordinary course of a Loan Party’s business in accordance with past
practices and policies. Subject to Section 8.02(m), as long as no Event of
Default has occurred and is continuing, Loan Parties may settle, adjust or
compromise any claim, offset, counterclaim or dispute with any Account Debtor.
At any time that an Event of Default has occurred and is continuing, the
Administrative Agent shall, at its option, have the exclusive right to settle,
adjust or compromise any claim, offset, counterclaim or dispute with Account
Debtors or grant any credits, discounts or allowances.

 

(b) With respect to each Account: (i) the amounts shown on any invoice delivered
to the Administrative Agent or schedule thereof delivered to the Administrative
Agent shall be true and complete, (ii) no payments shall be made thereon except
payments immediately delivered to the Administrative Agent pursuant to the terms
of this Agreement, (iii) no credit, discount, allowance or extension or
agreement for any of the foregoing shall be granted to any Account Debtor except
as reported to the Administrative Agent in accordance with this

 

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Agreement and except for credits, discounts, allowances or extensions made or
given in the ordinary course of each Loan Party’s business in accordance with
past practices and policies previously disclosed to the Administrative Agent,
(iv) there shall be no setoffs, deductions, contras, defenses, counterclaims or
disputes existing or asserted with respect thereto except as reported to the
Administrative Agent in accordance with the terms of this Agreement, and (v)
none of the transactions giving rise thereto will violate any applicable
foreign, Federal, state or local laws or regulations, all documentation relating
thereto will be legally sufficient under such laws and regulations and all such
documentation will be legally enforceable in accordance with its terms.

 

(c) The Administrative Agent shall have the right at any time or times, in the
Administrative Agent’s name or in the name of a nominee of the Administrative
Agent, to verify the validity, amount or any other matter relating to any
Receivables, Inventory or Accounts, by mail, telephone, facsimile transmission
or otherwise.

 

Section 9.05 Inventory Covenants. With respect to the Inventory (other than
consignment Inventory and supplies): (a) each Loan Party shall at all times
maintain inventory records reasonably satisfactory to the Administrative Agent,
keeping correct and accurate records itemizing and describing the kind, type,
quality and quantity of Inventory, such Loan Party’s cost therefor and daily
withdrawals therefrom and additions thereto; (b) Loan Parties shall conduct a
physical count of the Inventory (i) at any time any Agent may request (provided
that (x) any Agent shall make such request no more frequently than once in any
calendar year and (y) prior to conducting such physical count of the Inventory,
such Agent making such request shall consult with the Parent as to the
methodology and survey) and (ii) at any time any Agent may request on or after
an Event of Default, and in each case promptly following such physical inventory
count shall supply any Agent with a report in the form and with such specificity
as may be satisfactory to such Agent concerning such physical count; (c) the
Loan Parties shall not remove any Inventory from the locations set forth or
permitted herein, without the prior written consent of the Administrative Agent
and the Collateral Agent, except (i) for sales of Inventory in the ordinary
course of its business, (ii) to move Inventory directly from one location set
forth on Schedule 7.01(bb) or permitted herein to another such location, and
(iii) for Inventory shipped from the manufacturer thereof to such Loan Party
which is in transit to the locations set forth or permitted herein; (d) upon the
Administrative Agent’s request, the Borrowers shall, at their expense, but at
any time or times as the Administrative Agent may request on or after an Event
of Default, deliver or cause to be delivered to the Administrative Agent written
appraisals as to the Inventory in form, scope and methodology acceptable to the
Administrative Agent and by an appraiser acceptable to the Administrative Agent,
addressed to Agents and Lenders and upon which Agents and Lenders are expressly
permitted to rely; (e) the Loan Parties shall produce, use, store and maintain
the Inventory with all reasonable care and caution and in accordance with
applicable standards of any insurance and in conformity with applicable laws
(including the requirements of the Federal Fair Labor Standards Act of 1938, as
amended and all rules, regulations and orders related thereto); (f) none of the
Inventory or other Collateral constitutes farm products or the proceeds thereof;
(g) each Loan Party assumes all responsibility and liability arising from or
relating to the production, use, sale or other disposition of the Inventory; (h)
the Loan Parties shall not sell Inventory to any customer on approval, or any
other basis which entitles the customer to return or may obligate any Loan Party
to repurchase such Inventory; (i) the Loan Parties shall keep the Inventory in
good and marketable condition; and (j) the Loan Parties shall not, without prior
written notice to the Administrative Agent or the

 

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specific identification of such Inventory in a report with respect thereto
provided by the Borrower to the Administrative Agent pursuant to Section 9.03(a)
hereof, acquire or accept any Inventory on consignment or approval.

 

ARTICLE X

 

EVENTS OF DEFAULT

 

Section 10.01 Events of Default. If any of the following Events of Default shall
occur and be continuing:

 

(a) the Borrowers shall fail to pay (i) any principal of or interest on any
Loan, any Reimbursement Obligation, any Agent Advance when due (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise) or
(ii) any fee, indemnity or other amount payable under this Agreement or any
other Loan Document within three (3) days of the due date thereof (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise);

 

(b) any representation or warranty made or deemed made by or on behalf of any
Loan Party or by any officer of the foregoing under or in connection with any
Loan Document or under or in connection with any report, certificate, or other
document delivered to any Agent, any Lender or the L/C Issuer pursuant to any
Loan Document shall have been incorrect in any material respect when made or
deemed made;

 

(c) any Loan Party shall fail to perform or comply with any covenant or
agreement contained in (i) Sections 8.01(b), (c), (d), (f), (h), (l), (m), (n),
(o), (p) or (q), Section 8.02 or Section 8.03 or ARTICLE IX, or any Loan Party
shall fail to perform or comply (beyond any applicable grace period) with any
covenant or agreement contained in any security agreement related to this
Agreement to which it is a party, any Pledge Agreement to which it is a party or
any Mortgage to which it is a party, (ii) clauses (e), (g), (i), (j) and (k) of
Section 8.01 and such failure, if capable of being remedied, shall remain
unremedied for 10 days, after the earlier of the date a senior officer of any
Loan Party shall become aware of such failure and the date written notice of
such default shall have been given by any Agent to such Loan Party, (iii)
clauses (a)(i), (a)(ii), (a)(iii), (a)(iv), (a)(vii) or (a)(xix) of Section 8.01
and such failure shall remain unremedied for 5 days, (iv) clauses (a)(v),
(a)(x), (a)(xvii) and (a)(xviii) of Section 8.01 and such failure shall remain
unremedied for 3 days, and (v) clauses (a)(vi), (a)(viii), (a)(ix), (a)(xi),
(a)(xii), (a)(xiii), (a)(xiv), (a)(xv) and (a)(xvi) of Section 8.01 and such
failure shall remain unremedied for 1 day;

 

(d) any Loan Party shall fail to perform or comply with any other term, covenant
or agreement contained in any Loan Document to be performed or observed by it
and, except as set forth in subsections (a), (b) and (c) such failure, if
capable of being remedied, shall remain unremedied for 15 days after the earlier
of the date a senior officer of any Loan Party becomes aware of such failure and
the date written notice of such default shall have been given by any Agent to
such Loan Party;

 

(e) any Loan Party (i) shall institute any proceeding or voluntary case seeking
to adjudicate it a bankrupt or insolvent, or seeking dissolution, liquidation,
winding up,

 

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reorganization, arrangement, adjustment, protection, relief or composition of it
or its debts under any law relating to bankruptcy, insolvency, reorganization or
relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar official for any
such Person or for any substantial part of its property, (ii) shall be generally
not paying its debts as such debts become due or shall admit in writing its
inability to pay its debts generally, (iii) shall make a general assignment for
the benefit of creditors, or (iv) shall take any action to authorize or effect
any of the actions set forth above in this subsection (e);

 

(f) any proceeding shall be instituted against any Loan Party seeking to
adjudicate it bankrupt or insolvent, or seeking dissolution, liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee, custodian or other similar official for any such Person or
for any substantial part of its property, and either such proceeding shall
remain undismissed or unstayed for a period of 30 days or any of the actions
sought in such proceeding (including, without limitation, the entry of an order
for relief against any such Person or the appointment of a receiver, trustee,
custodian or other similar official for it or for any substantial part of its
property) shall occur;

 

(g) any provision of any Loan Document shall at any time for any reason (other
than pursuant to the express terms thereof) cease to be valid and binding on or
enforceable against any Loan Party intended to be a party thereto, or the
validity or enforceability thereof shall be contested by any party thereto, or a
proceeding shall be commenced by any Loan Party or any Governmental Authority
having jurisdiction over any of them, seeking to establish the invalidity or
unenforceability thereof, or any Loan Party shall deny in writing that it has
any liability or obligation purported to be created under any Loan Document;

 

(h) the determination of any Loan Party, whether by vote of such Person’s board
of directors or otherwise, to suspend the operation of such Person’s business in
the ordinary course, liquidate all or substantially all of such Person’s assets,
or employ an agent or other third party to conduct any sales of all or
substantially all of such Person’s assets (other than in connection with a
Permitted Disposition);

 

(i) any Mortgage, Security Agreement, Pledge Agreement or any other security
document related to this Agreement after delivery thereof pursuant hereto, shall
for any reason fail or cease to create a valid and perfected and, except to the
extent permitted by the terms hereof or thereof, first priority Lien in favor of
the Collateral Agent for the benefit of the Lenders on Collateral purported to
be covered thereby with an aggregate value in excess of $1,000,000;

 

(j) any bank at which any deposit account, blocked account, or lockbox account
of any Loan Party is maintained shall fail to comply with any of the terms of
any deposit account, blocked account, lockbox account or similar agreement to
which such bank is a party or any securities intermediary, commodity
intermediary or other financial institution at any time in custody, control or
possession of any investment property of any Loan Party shall fail to comply
with any of the terms of any investment property control agreement to which such
Person is a party;

 

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(k) one or more judgments, orders or awards (or any settlement of any claim
that, if breached, could result in a judgment, order or award) for the payment
of money exceeding $5,000,000 in the aggregate shall be rendered against any
Borrower or any of its Subsidiaries and remain unsatisfied and either (i)
enforcement proceedings shall have been commenced by any creditor upon any such
judgment, order, award or settlement, or (ii) there shall be a period of 10
consecutive days after entry thereof during which a stay of enforcement of any
such judgment, order, award or settlement, by reason of a pending appeal or
otherwise, shall not be in effect; provided, however, that any such judgment,
order, award or settlement shall not give rise to an Event of Default under this
subsection (o) if and for so long as (A) the amount of such judgment, order,
award or settlement order is covered by a valid and binding policy of insurance
between the defendant and the insurer covering full payment thereof and (B) such
insurer has been notified, and has not disputed the claim made for payment, of
the amount of such judgment, order, award or settlement;

 

(l) any Borrower or any of its Significant Subsidiaries is enjoined, restrained
or in any way prevented by the order of any court or any Governmental Authority
from conducting all or any material part of its business for more than fifteen
(15) consecutive days which could reasonably be expected to have a Material
Adverse Effect;

 

(m) any material damage to, or loss, theft or destruction of, any Collateral,
whether or not insured, or any strike, lockout, labor dispute, embargo,
condemnation, act of God or public enemy, or other casualty which causes, for
more than fifteen (15) consecutive days, the cessation or substantial
curtailment of revenue producing activities at any facility of any Loan Party,
if any such event or circumstance could reasonably be expected to have a
Material Adverse Effect;

 

(n) any cessation of a substantial part of the business of any Borrower or any
of its Significant Subsidiaries for a period which materially and adversely
affects the ability of such Person to continue its business on a profitable
basis which could reasonably be expected to have a Material Adverse Effect;

 

(o) the loss, suspension or revocation of, or failure to renew, any license or
permit now held or hereafter acquired by any Borrower or any of its Significant
Subsidiaries, if such loss, suspension, revocation or failure to renew could
reasonably be expected to have a Material Adverse Effect;

 

(p) the indictment of any Borrower or any of its Significant Subsidiaries under
any criminal statute, or commencement of criminal or civil proceedings against
any Loan Party, pursuant to which statute or proceedings the penalties or
remedies sought or available include forfeiture to any Governmental Authority of
any material portion of the property of such Person;

 

(q) any Loan Party or any of its ERISA Affiliates shall have made a complete or
partial withdrawal from a Multiemployer Plan, and, as a result of such complete
or partial withdrawal, any Loan Party or any of its ERISA Affiliates incurs a
withdrawal liability in an annual amount exceeding $3,000,000; or a
Multiemployer Plan enters reorganization status under Section 4241 of ERISA,
and, as a result thereof any Loan Party’s or any of its ERISA

 

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Affiliates’ annual contribution requirements with respect to such Multiemployer
Plan increases in an annual amount exceeding $3,000,000;

 

(r) (i) any Termination Event with respect to any Employee Plan shall have
occurred which results in uninsured or unreimbursed liability, after exhausting
all appeals (but not including payment of benefits by the PBGC) exceeding
$1,000,000 or (ii) any of the events under (iii), (iv) or (v) of the definition
of “Termination Event” which could reasonably be expected to result in a
Material Adverse Effect; provided that, with respect to both clause (i) and
(ii), such Termination Event (if correctable) shall not have been corrected;

 

(s) any Borrower or any of its Significant Subsidiaries shall be liable for any
Environmental Liabilities and Costs the payment of which has a Material Adverse
Effect;

 

(t) a Change of Control shall have occurred; or

 

(u) an event or development occurs which has had a Material Adverse Effect;

 

then, and in any such event, the Collateral Agent may, and shall at the request
of the Administrative Agent, the Required Revolving Loan Lenders, the Required
Term A Lenders, or the Required Term B Lenders, by notice to the Administrative
Borrower, (i) terminate or reduce all Revolving Credit Commitments, whereupon
all Revolving Credit Commitments shall immediately be so terminated or reduced,
(ii) declare all or any portion of the Loans then outstanding to be due and
payable, whereupon all or such portion of the aggregate principal of all Loans
and Reimbursement Obligations, all accrued and unpaid interest thereon, all fees
and all other amounts payable under this Agreement and the other Loan Documents
shall become due and payable immediately, without presentment, demand, protest
or further notice of any kind, all of which are hereby expressly waived by each
Loan Party and (iii) exercise any and all of its other rights and remedies under
applicable law, (including, but not limited to, the Uniform Commercial Code),
hereunder and under the other Loan Documents. Upon demand by the Administrative
Agent after the occurrence and during the continuation of any Event of Default,
the Borrowers shall deposit with the Administrative Agent with respect to each
Letter of Credit Accommodation then outstanding cash in an amount equal to 105%
of the greatest amount for which such Letter of Credit Accommodation may be
drawn. Such deposits shall be held by the Administrative Agent in the Letter of
Credit Collateral Account as security for, and to provide for the payment of,
the Letter of Credit Obligations.

 

If during the continuance of an Event of Default the Collateral Agent is
requested to exercise enforcement rights and remedies under clause (iii) of the
preceding paragraph with respect to the Collateral, the Collateral Agent shall
(and is hereby authorized by the Lenders) to commence and diligently pursue in
good faith the exercise of its enforcement rights or remedies against, and take
action to enforce its Liens on, the Collateral so long as Collateral Agent is
permitted to exercise such rights and remedies by the terms of the Loan
Documents and/or under applicable law (including, without limitation, any or all
of the following: solicitation of bids from third parties to conduct the
liquidation of all or a material portion of Collateral, the engagement or
retention of sales brokers, marketing agents, investment bankers, accountants,
appraisers, auctioneers or other third parties for the purposes of valuing,
marketing, promoting,

 

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and selling all or a material portion of the Collateral, the opposition of the
use of cash collateral or sale of assets in any Insolvency Proceeding, the
commencement of any action to foreclose on its Lien on all or any material
portion of the Collateral, notification of account debtors to make payments to
the Administrative Agent or its agents, any action to take possession of all or
any material portion of the Collateral or commencement of any legal proceedings
or actions against or with respect to all or any material portion of the
Collateral), provided that (A) such Event of Default has not been waived or
cured, (B) in the good faith determination of Collateral Agent, exercising such
enforcement rights and remedies is permitted under the terms of the Loan
Documents and applicable law, (C) exercising such enforcement rights and
remedies will not result in any liability of Collateral Agent, the
Administrative Agent or the Lenders to any Loan Party or any other Person, (D)
the Agents shall be entitled to all of the benefits of Section 11.05 of this
Agreement in connection with exercising such enforcement rights and remedies,
and (E) in the case of the Revolver Priority Collateral, the Collateral Agent
shall not be required to exercise such enforcement rights and remedies so long
as the Collateral Agent shall appoint the Administrative Agent as an agent of
the Collateral Agent for purposes of exercising such enforcement rights and
remedies with respect to the Revolver Priority Collateral. Any sale or other
disposition of As-Extracted Collateral of the same type and from the same
location by the Collateral Agent or the Administrative Agent, including
As-Extracted Collateral constituting both Revolver Priority Collateral and Term
Priority Collateral, shall be deemed to be sold or disposed of in the order that
such Collateral was extracted from the ground at such location of the Loan
Parties. All such actions shall be taken by the Collateral Agent or the
Administrative Agent, as applicable, to realize a commercially reasonable value
from the Collateral within a commercially reasonable time.

 

ARTICLE XI

 

AGENTS

 

Section 11.01 Appointment. Each Lender (and each subsequent maker of any Loan by
its making thereof) hereby irrevocably appoints and authorizes the
Administrative Agent and the Collateral Agent to perform the duties of each such
Agent as set forth in this Agreement including: (i) in the case of the
Administrative Agent, to receive on behalf of each Lender any payment of
principal of or interest on the Loans outstanding hereunder and all other
amounts accrued hereunder for the account of the Lenders and paid to such Agent,
and, subject to Section 2.02(c), to distribute promptly to each Lender its Pro
Rata Share of all payments so received; (ii) to distribute to each Lender copies
of all material notices and agreements received by such Agent and not required
to be delivered to each Lender pursuant to the terms of this Agreement, provided
that the Agents shall not have any liability to the Lenders for any Agent’s
inadvertent failure to distribute any such notices or agreements to the Lenders;
(iii) in the case of the Administrative Agent and the Collateral Agent, to
maintain, in accordance with its customary business practices, ledgers and
records reflecting the status of the Obligations, the Loans, and related matters
and to maintain, in accordance with its customary business practices, ledgers
and records reflecting the status of the Collateral and related matters; (iv) in
the case of the Administrative Agent and the Collateral Agent, to execute or
file any and all financing or similar statements or notices, amendments,
renewals, supplements, documents, instruments, proofs of claim, notices and
other written agreements with respect to this Agreement or any other Loan
Document; (v) to make the Loans and Agent Advances, for such Agent or on behalf
of the

 

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applicable Lenders as provided in this Agreement or any other Loan Document;
(vi) to perform, exercise, and enforce any and all other rights and remedies of
the Lenders with respect to the Loan Parties, the Obligations, or otherwise
related to any of same to the extent reasonably incidental to the exercise by
such Agent of the rights and remedies specifically authorized to be exercised by
such Agent by the terms of this Agreement or any other Loan Document; (vii) to
incur and pay such fees necessary or appropriate for the performance and
fulfillment of its functions and powers pursuant to this Agreement or any other
Loan Document; and (viii) in the case of the Administrative Agent and the
Collateral Agent, subject to Section 11.03 of this Agreement, to take such
action as such Agent deems appropriate on its behalf to administer the Loans and
the Loan Documents and to exercise such other powers delegated to such Agent by
the terms hereof or the other Loan Documents (including, without limitation, the
power to give or to refuse to give notices, waivers, consents, approvals and
instructions and the power to make or to refuse to make determinations and
calculations) together with such powers as are reasonably incidental thereto to
carry out the purposes hereof and thereof. As to any matters not expressly
provided for by this Agreement and the other Loan Documents (including, without
limitation, enforcement or collection of the Loans), the Agents shall not be
required to exercise any discretion or take any action, but shall be required to
act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding upon all Lenders and all makers of Loans;
provided, however, that the L/C Issuer shall not be required to refuse to honor
a drawing under any Letter of Credit Accommodation and the Agents shall not be
required to take any action which, in the reasonable opinion of any Agent,
exposes such Agent to liability or which is contrary to this Agreement or any
other Loan Document or applicable law.

 

Section 11.02 Nature of Duties. The Agents shall have no duties or
responsibilities except those expressly set forth in this Agreement or in the
other Loan Documents. The duties of the Agents shall be mechanical and
administrative in nature. The Agents shall not have by reason of this Agreement
or any other Loan Document a fiduciary relationship in respect of any Lender.
Nothing in this Agreement or any other Loan Document, express or implied, is
intended to or shall be construed to impose upon the Agents any obligations in
respect of this Agreement or any other Loan Document except as expressly set
forth herein or therein. Each Lender shall make its own independent
investigation of the financial condition and affairs of the Loan Parties in
connection with the making and the continuance of the Loans hereunder and shall
make its own appraisal of the creditworthiness of the Loan Parties and the value
of the Collateral, and the Agents shall have no duty or responsibility, either
initially or on a continuing basis, to provide any Lender with any credit or
other information with respect thereto, whether coming into their possession
before the initial Loan hereunder or at any time or times thereafter, provided
that, upon the reasonable request of a Lender, each Agent shall provide to such
Lender any documents or reports delivered to such Agent by the Loan Parties
pursuant to the terms of this Agreement or any other Loan Document. If any Agent
seeks the consent or approval of the Required Lenders to the taking or
refraining from taking any action hereunder, such Agent shall send notice
thereof to each Lender. Each Agent shall promptly notify each Lender any time
that the Required Lenders have instructed such Agent to act or refrain from
acting pursuant hereto.

 

Section 11.03 Rights, Exculpation, Etc. The Agents and their directors,
officers, agents or employees shall not be liable for any action taken or
omitted to be taken by them under

 

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or in connection with this Agreement or the other Loan Documents, except for
their own gross negligence or willful misconduct as determined by a final
judgment of a court of competent jurisdiction. Without limiting the generality
of the foregoing, the Agents (i) may treat the payee of any Loan as the owner
thereof until the Agents receive written notice of the assignment or transfer
thereof, pursuant to Section 13.07 hereof, signed by such payee and in form
satisfactory to the Agents; (ii) may consult with legal counsel (including,
without limitation, counsel to any Agent or counsel to the Loan Parties),
independent public accountants, and other experts selected by any of them and
shall not be liable for any action taken or omitted to be taken in good faith by
any of them in accordance with the advice of such counsel or experts; (iii) make
no warranty or representation to any Lender and shall not be responsible to any
Lender for any statements, certificates, warranties or representations made in
or in connection with this Agreement or the other Loan Documents; (iv) shall not
have any duty to ascertain or to inquire as to the performance or observance of
any of the terms, covenants or conditions of this Agreement or the other Loan
Documents on the part of any Person, the existence or possible existence of any
Default or Event of Default, or to inspect the Collateral or other property
(including, without limitation, the books and records) of any Person; (v) shall
not be responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or the other
Loan Documents or any other instrument or document furnished pursuant hereto or
thereto; and (vi) shall not be deemed to have made any representation or
warranty regarding the existence, value or collectibility of the Collateral, the
existence, priority or perfection of the Collateral Agent’s Lien thereon, or any
certificate prepared by any Loan Party in connection therewith, nor shall the
Agents be responsible or liable to the Lenders for any failure to monitor or
maintain any portion of the Collateral. The Agents shall not be liable for any
apportionment or distribution of payments made in good faith pursuant to Section
5.04, and if any such apportionment or distribution is subsequently determined
to have been made in error the sole recourse of any Lender to whom payment was
due but not made, shall be to recover from other Lenders any payment in excess
of the amount which they are determined to be entitled. The Agents may at any
time request instructions from the Lenders with respect to any actions or
approvals which by the terms of this Agreement or of any of the other Loan
Documents the Agents are permitted or required to take or to grant, and if such
instructions are promptly requested, the Agents shall be absolutely entitled to
refrain from taking any action or to withhold any approval under any of the Loan
Documents until they shall have received such instructions from the Required
Lenders. Without limiting the foregoing, no Lender shall have any right of
action whatsoever against any Agent as a result of such Agent acting or
refraining from acting under this Agreement or any of the other Loan Documents
in accordance with the instructions of the Required Lenders.

 

Section 11.04 Reliance. Each Agent shall be entitled to rely upon any written
notices, statements, certificates, orders or other documents or any telephone
message believed by it in good faith to be genuine and correct and to have been
signed, sent or made by the proper Person, and with respect to all matters
pertaining to this Agreement or any of the other Loan Documents and its duties
hereunder or thereunder, upon advice of counsel selected by it.

 

Section 11.05 Indemnification. To the extent that any Agent or the L/C Issuer is
not reimbursed and indemnified by any Loan Party, the Lenders will reimburse and
indemnify such Agent and the L/C Issuer from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses, advances or disbursements of any

 

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kind or nature whatsoever which may be imposed on, incurred by, or asserted
against such Agent or the L/C Issuer in any way relating to or arising out of
this Agreement or any of the other Loan Documents or any action taken or omitted
by such Agent or the L/C Issuer under this Agreement or any of the other Loan
Documents, in proportion to each Lender’s Pro Rata Share, including, without
limitation, advances and disbursements made pursuant to Section 11.08; provided,
however, that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses, advances or disbursements for which there has been a final judicial
determination that such liability resulted from such Agent’s or the L/C Issuer’s
gross negligence or willful misconduct. The obligations of the Lenders under
this Section 11.05 shall survive the payment in full of the Loans and the
termination of this Agreement.

 

Section 11.06 Agents Individually. With respect to its Pro Rata Share of each of
the Revolving Credit Commitment, Term Loan A Commitment and Term Loan B
Commitment hereunder and the Loans made by it, each Agent shall have and may
exercise the same rights and powers hereunder and is subject to the same
obligations and liabilities as and to the extent set forth herein for any other
Lender or maker of a Loan. The terms “Lenders”, “Required Revolving Loan
Lenders”, “Required Term A Lenders”, “Required Term B Lenders”, “Required
Lenders” or any similar terms shall, unless the context clearly otherwise
indicates, include each Agent in its individual capacity as a Lender or one of
the Required Revolving Loan Lenders, the Required Term A Lenders, the Required
Term B Lenders or the Required Lenders. Each Agent and its Affiliates may accept
deposits from, lend money to, and generally engage in any kind of banking, trust
or other business with any Borrower as if it were not acting as an Agent
pursuant hereto without any duty to account to the other Lenders.

 

Section 11.07 Successor Agent. (a) Each Agent may resign from the performance of
all its functions and duties hereunder and under the other Loan Documents at any
time by giving at least thirty (30) Business Days’ prior written notice to the
Administrative Borrower and each Lender. Such resignation shall take effect upon
the acceptance by a successor Agent of appointment pursuant to clauses (b) and
(c) below or as otherwise provided below.

 

(b) Upon any such notice of resignation, the Required Lenders with, in the
absence of a continuing Default or Event of Default, the consent of the
Administrative Borrower, such consent not to be unreasonably withheld or
delayed, shall appoint a successor Agent. Upon the acceptance of any appointment
as Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations under this Agreement and the other Loan Documents. After
any Agent’s resignation hereunder as an Agent, the provisions of this ARTICLE XI
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was an Agent under this Agreement and the other Loan Documents.

 

(c) If a successor Agent shall not have been so appointed within said thirty
(30) Business Day period, the retiring Agent, with the consent of the other
Agents with, in the absence of a continuing Default or Event of Default, the
consent of the Administrative Borrower, such consent not to be unreasonably
withheld or delayed, shall then appoint a successor

 

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Agent who shall serve as an Agent until such time, if any, as the Required
Lenders, with the consent of the other Agents, appoint a successor Agent as
provided above.

 

Section 11.08 Collateral Matters.

 

(a) Subject to the terms of a separate written agreement among the Agents and
the Lenders, the Administrative Agent and the Collateral Agent may from time to
time make such disbursements and advances (“Agent Advances”) which such Agent,
in its reasonable discretion (or during the continuance of an Event of Default,
its sole discretion), deems necessary or desirable to preserve, protect, prepare
for sale or lease or dispose of the Collateral or any portion thereof, to
enhance the likelihood or maximize the amount of repayment by the Borrowers of
the Loans, Letter of Credit Obligations and other Obligations or to pay any
other amount chargeable to the Borrowers pursuant to the terms of this
Agreement, including, without limitation, costs, fees and expenses as described
in Section 13.04. The Agent Advances shall bear interest at the maximum rate set
forth in this Agreement and shall be repayable on demand and be secured by the
Collateral. The Agent Advances shall constitute Obligations hereunder which may
be charged to the Loan Account in accordance with Section 5.02. Any Agent making
an Agent Advance shall notify each Lender and the Administrative Borrower in
writing of each such Agent Advance, which notice shall include a description of
the purpose of such Agent Advance. Without limitation to its obligations
pursuant to Section 11.05, each Lender agrees that it shall make available to
the Agent, making the Agent Advance upon such Agent’s demand, in Dollars in
immediately available funds, the amount equal to such Lender’s Pro Rata Share of
each such Agent Advance. If such funds are not made available to the Agent
making an Agent Advance by such Lender, such Agent shall be entitled to recover
such funds on demand from such Lender, together with interest thereon for each
day from the date such payment was due until the date such amount is paid to
such Agent, at the Federal Funds Rate for three Business Days and thereafter at
the Reference Rate.

 

(b) The Lenders hereby irrevocably authorize the Collateral Agent, at its option
and in its discretion, to release any Lien granted to or held by the Collateral
Agent upon any Collateral upon termination of the Total Commitment and payment
and satisfaction of all Loans, Letter of Credit Obligations, and all other
Obligations which have matured; or constituting property being sold or disposed
of in compliance with the terms of this Agreement and the other Loan Documents
(including, without limitation, the Permitted Dispositions); or constituting
property in which the Loan Parties owned no interest at the time the Lien was
granted or at any time thereafter; or if approved, authorized or ratified in
writing by the Required Lenders. Upon request by the Collateral Agent at any
time, the Lenders will confirm in writing the Collateral Agent’s authority to
release particular types or items of Collateral pursuant to this Section
11.08(b).

 

(c) Without in any manner limiting the Collateral Agent’s authority to act
without any specific or further authorization or consent by the Lenders (as set
forth in Section 11.08(b)), each Lender agrees to confirm in writing, upon
request by the Collateral Agent, the authority to release Collateral conferred
upon the Collateral Agent under Section 11.08(b). Upon receipt by the Collateral
Agent of confirmation from the Lenders of its authority to release any
particular item or types of Collateral, and upon prior written request by any
Loan Party, the Collateral Agent shall (and is hereby irrevocably authorized by
the Lenders to) execute such documents as may be necessary to evidence the
release of the Liens granted to the Collateral Agent for the benefit of the
Agents and the Lenders upon such Collateral; provided, however, that (i) the

 

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Collateral Agent shall not be required to execute any such document on terms
which, in the Collateral Agent’s opinion, would expose the Collateral Agent to
liability or create any obligations or entail any consequence other than the
release of such Liens without recourse or warranty, and (ii) such release shall
not in any manner discharge, affect or impair the Obligations or any Lien upon
(or obligations of any Loan Party in respect of) all interests in the Collateral
retained by any Loan Party.

 

(d) The Collateral Agent shall have no obligation whatsoever to any Lender to
assure that the Collateral exists or is owned by the Loan Parties or is cared
for, protected or insured or has been encumbered or that the Lien granted to the
Collateral Agent pursuant to this Agreement or any other Loan Document has been
properly or sufficiently or lawfully created, perfected, protected or enforced
or is entitled to any particular priority, or to exercise at all or in any
particular manner or under any duty of care, disclosure or fidelity, or to
continue exercising, any of the rights, authorities and powers granted or
available to the Collateral Agent in this Section 11.08 or in any other Loan
Document, it being understood and agreed that in respect of the Collateral, or
any act, omission or event related thereto, the Collateral Agent may act in any
manner it may deem appropriate, in its sole discretion, given the Collateral
Agent’s own interest in the Collateral as one of the Lenders and that the
Collateral Agent shall have no duty or liability whatsoever to any other Lender,
except as otherwise provided herein.

 

Section 11.09 Agency for Perfection. Each Agent and each Lender hereby appoints
each other Agent and each other Lender as agent and bailee for the purpose of
perfecting the security interests in and liens upon the Collateral in assets
which, in accordance with Article 9 of the Uniform Commercial Code, can be
perfected only by possession or control (or where the security interest of a
secured party with possession or control has priority over the security interest
of another secured party) and each Agent and each Lender hereby acknowledges
that it holds possession of or otherwise controls any such Collateral for the
benefit of the Agents and the Lenders as secured party. Should the
Administrative Agent or any Lender obtain possession or control of any such
Collateral, the Administrative Agent or such Lender shall notify the Collateral
Agent thereof, and, promptly upon the Collateral Agent’s request therefor shall
deliver such Collateral to the Collateral Agent or in accordance with the
Collateral Agent’s instructions. In addition, the Collateral Agent shall also
have the power and authority hereunder to appoint such other sub-agents as may
be necessary or required under applicable state law or otherwise to perform its
duties and enforce its rights with respect to the collateral and under the Loan
Documents. Each Loan Party by its execution and delivery of this Agreement
hereby consents to the foregoing.

 

Section 11.10 Actions in Concert. Anything in this Agreement to the contrary
notwithstanding, each Lender hereby agrees with each other Lender that no Lender
shall take any action to protect or enforce its rights arising out of this
Agreement (including exercising any rights of setoff) without first obtaining
the prior written consent of Agents and Required Lenders, it being the intent of
Lenders that any such action to protect or enforce rights under this Agreement
shall be taken in concert and at the direction or with the consent of Agents or
Required Lenders.

 

Section 11.11 Agents and their Affiliates and their Designated Entities. With
respect to the Revolving Credit Commitment and Loans of Foothill hereunder,
Foothill, and with

 

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respect to the Loans of Sea Pines Funding LLC, SPCP Group LLC, SPCP Group III
LLC, Spiret IV Loan Trust 2003-A, TRS THEBE LLC and Bear Sterns Investment
Products, Inc. (each a “Designated Entity” and collectively, the “Designated
Entities”) hereunder, Silver Point, shall have the same rights and powers under
this Agreement and the other Loan Documents as any other Lender and may exercise
the same as though Foothill were not an Agent; and the term “Lender” or
“Lenders” shall, unless otherwise expressly indicated, include Foothill in its
individual capacity, and each Designated Entity in its individual capacity.
Foothill and its Affiliates, and Silver Point, the Designated Entities and their
Affiliates may lend money to, invest in, and generally engage in any kind of
business with, any Loan Party, any of their Affiliates and any Person who may do
business with or own securities of any Loan Party or any such Affiliate, all as
if Foothill, and Silver Point were not Agents and without any duty to account
therefor to Lenders. Foothill and its Affiliates, and Silver Point, the
Designated Entities and their Affiliates may accept fees and other consideration
from any Loan Party for services in connection with this Agreement or otherwise
without having to account for the same to Lenders. Silver Point (directly or
through its Affiliates or designees) has also made loans to the Loan Parties
under the Existing DIP Credit Facility. Each Lender acknowledges the potential
conflict of interest between (i) Foothill as a Lender holding interests in the
Loans, and Foothill as Administrative Agent and (ii) a Designated Entity as a
Lender holding interests in the Loans, and Silver Point as Collateral Agent.

 

ARTICLE XII

 

GUARANTY

 

Section 12.01 Guaranty. Each Guarantor hereby jointly and severally and
unconditionally and irrevocably guarantees the punctual payment when due,
whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise, of all Obligations of each Borrower now or hereafter existing under
any Loan Document, whether for principal, interest, fees, expense reimbursements
(including, without limitation, all interest, fees and expense reimbursements
that accrue after the commencement of any Insolvency Proceeding of any Borrower,
whether or not a claim for post-filing interest, fees or expense reimbursements
are allowed in such Insolvency Proceeding), Letter of Credit Obligations,
Banking Services Obligations, commissions, indemnifications or otherwise (such
obligations, to the extent not paid by the Borrowers, being the ”Guaranteed
Obligations”), and agrees to pay any and all expenses (including reasonable
counsel fees and expenses) incurred by the Agents, the Lenders and the L/C
Issuer in enforcing any rights under the guaranty set forth in this ARTICLE XII.
Without limiting the generality of the foregoing, each Guarantor’s liability
shall extend to all amounts that constitute part of the Guaranteed Obligations
and would be owed by the Borrowers to the Agents, the Lenders and the L/C Issuer
under any Loan Document but for the fact that they are unenforceable or not
allowable due to the existence of an Insolvency Proceeding involving any
Borrower.

 

Section 12.02 Guaranty Absolute. Each Guarantor, jointly and severally,
guarantees that the Guaranteed Obligations will be paid strictly in accordance
with the terms of the Loan Documents, regardless of any law, regulation or order
now or hereafter in effect in any jurisdiction affecting any of such terms or
the rights of the Agents, the Lenders or the L/C Issuer with respect thereto.
Each Guarantor agrees that this ARTICLE XII constitutes a guaranty of

 

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payment when due and not of collection and waives any right to require that any
resort be made by any Agent or any Lender to any Collateral. The obligations of
each Guarantor under this ARTICLE XII are independent of the Guaranteed
Obligations, and a separate action or actions may be brought and prosecuted
against each Guarantor to enforce such obligations, irrespective of whether any
action is brought against any Loan Party or whether any Loan Party is joined in
any such action or actions. The liability of each Guarantor under this ARTICLE
XII shall be irrevocable, absolute and unconditional irrespective of, and each
Guarantor hereby irrevocably waives any defenses it may now or hereafter have in
any way relating to, any or all of the following:

 

(a) any lack of validity or enforceability of any Loan Document or any agreement
or instrument relating thereto;

 

(b) any change in the time, manner or place of payment of, or in any other term
of, all or any of the Guaranteed Obligations, or any other amendment or waiver
of or any consent to departure from any Loan Document, including, without
limitation, any increase in the Guaranteed Obligations resulting from the
extension of additional credit to any Loan Party or otherwise;

 

(c) any taking, exchange, release or non-perfection of any Collateral, or any
taking, release or amendment or waiver of or consent to departure from any other
guaranty, for all or any of the Guaranteed Obligations;

 

(d) the existence of any claim, set-off, defense or other right that the
Guarantors may have at any time against any Person, including, without
limitation, any Agent, any Lender or the L/C Issuer.

 

(e) any change, restructuring or termination of the corporate, limited liability
company or partnership structure or existence of any Loan Party; or

 

(f) any other circumstance (including, without limitation, any statute of
limitations) or any existence of or reliance on any representation by the
Agents, the Lenders or the L/C Issuer that might otherwise constitute a defense
available to, or a discharge of, any Loan Party or any other guarantor or
surety.

 

This ARTICLE XII shall continue to be effective or be reinstated, as the case
may be, if at any time any payment of any of the Guaranteed Obligations is
rescinded or must otherwise be returned by the Agents, the Lenders, the L/C
Issuer or any other Person, all as though such payment had not been made.

 

Section 12.03 Waiver. Each Guarantor hereby waives (i) promptness, diligence,
(ii) notice of acceptance and any other notice with respect to any of the
Guaranteed Obligations and this ARTICLE XII and any requirement that the Agents,
the Lenders or the L/C Issuer exhaust any right or take any action against any
Loan Party or any other Person or any Collateral, (iii) any right to compel or
direct any Agent, any Lender or the L/C Issuer to seek payment or recovery of
any amounts owed under this ARTICLE XII from any one particular fund or source
or to exhaust any right or take any action against any other Loan Party or any
other Person or any Collateral, (iv) any requirement that any Agent, any Lender
or the L/C Issuer

 

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protect, secure, perfect or insure any security interest or Lien or any property
subject thereto or exhaust any right or take any action against any Loan Party
or any other Person or any Collateral, and (v) any other defense available to
the Guarantors. The Guarantors agree that the Agents, the Lenders and the L/C
Issuer shall have no obligation to marshall any assets in favor of the
Guarantors or against, or in payment of, any or all of the Obligations. Each
Guarantor acknowledges that it will receive direct and indirect benefits from
the financing arrangements contemplated herein and that the waiver set forth in
this Section 12.03 is knowingly made in contemplation of such benefits. Each
Guarantor hereby waives any right to revoke this ARTICLE XII, and acknowledges
that this ARTICLE XII is continuing in nature and applies to all Guaranteed
Obligations, whether existing now or in the future.

 

Section 12.04 Continuing Guaranty; Assignments. This ARTICLE XII is a continuing
guaranty and shall (a) remain in full force and effect until the later of the
date on which all of the Guaranteed Obligations and all other amounts payable
under this ARTICLE XII shall have been Paid in Full and the Maturity Date, (b)
be binding upon each Guarantor, its successors and assigns and (c) inure to the
benefit of and be enforceable by the Agents, the Lenders and the L/C Issuer and
their successors, pledgees, transferees and assigns. Without limiting the
generality of the foregoing clause (c), any Lender may pledge, assign or
otherwise transfer all or any portion of its rights and obligations under this
Agreement (including, without limitation, all or any portion of its Revolving
Credit Commitments, Term Loan A Commitments, Term Loan B Commitments, its Loans
and the Letter of Credit Obligations owing to it) to any other Person, and such
other Person shall thereupon become vested with all the benefits in respect
thereof granted to such Lender herein or otherwise, in each case as provided in
Section 13.07.

 

Section 12.05 Subrogation. No Guarantor will exercise any rights that it may now
or hereafter acquire against any Loan Party or any other guarantor that arise
from the existence, payment, performance or enforcement of such Guarantor’s
obligations under this ARTICLE XII, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution or indemnification and any
right to participate in any claim or remedy of the Agents, the Lenders and the
L/C Issuer against any Loan Party or any other guarantor or any Collateral,
whether or not such claim, remedy or right arises in equity or under contract,
statute or common law, including, without limitation, the right to take or
receive from any Loan Party or any other guarantor, directly or indirectly, in
cash or other property or by set-off or in any other manner, payment or security
solely on account of such claim, remedy or right, unless and until all of the
Guaranteed Obligations and all other amounts payable under this ARTICLE XII
shall have been Paid in Full and the Maturity Date shall have occurred. If any
amount shall be paid to any Guarantor in violation of the immediately preceding
sentence at any time prior to the later of the date on which all of the
Guaranteed Obligations and all other amounts payable under this ARTICLE XII
shall have been Paid in Full and the Maturity Date, such amount shall be held in
trust for the benefit of the Agents, the Lenders and the L/C Issuer and shall
forthwith be paid to the Agents, the Lenders and the L/C Issuer to be credited
and applied to the Guaranteed Obligations and all other amounts payable under
this ARTICLE XII, whether matured or unmatured, in accordance with the terms of
this Agreement, or to be held as Collateral for any Guaranteed Obligations or
other amounts payable under this ARTICLE XII thereafter arising. If (i) any
Guarantor shall make payment to the Agents, the Lenders and the L/C Issuer of
all or any part of the Guaranteed Obligations, (ii) all of the Guaranteed
Obligations

 

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and all other amounts payable under this ARTICLE XII shall be Paid in Full and
(iii) the Maturity Date shall have occurred, the Agents, the Lenders and the L/C
Issuer will, at such Guarantor’s request and expense, execute and deliver to
such Guarantor appropriate documents, without recourse and without
representation or warranty, necessary to evidence the transfer by subrogation to
such Guarantor of an interest in the Guaranteed Obligations resulting from such
payment by such Guarantor.

 

Section 12.06 Intercompany Indebtedness. (a) Each Loan Party covenants and
agrees that the payment of any indebtedness and all obligations and liabilities
owing by any Loan Party in favor of any other Loan Party, whether now existing
or hereafter incurred (collectively, the “Intercompany Obligations”) is
subordinated, to the extent and in the manner provided in this Section 12.06, to
the prior payment in full of all Obligations owed or hereafter owing to Agents
and Lenders by the Loan Parties and that such subordination is for the benefit
of each Agent for itself and Lenders.

 

(b) Each Loan Party hereby (i) authorizes Agents on behalf of Lenders to demand
specific performance of the terms of this Section 12.06 at any time when any
Loan Party shall have failed to comply with any provisions of this Section 12.06
which are applicable to it and (ii) irrevocably waives any defense based on the
adequacy of a remedy at law, which might be asserted as a bar to such remedy of
specific performance.

 

(c) Upon any distribution of assets of any Loan Party in any dissolution,
winding up, liquidation or reorganization (whether in bankruptcy, insolvency or
receivership proceedings or upon an assignment for the benefit of creditors or
otherwise):

 

(i) Agents and Lenders shall first be entitled to receive payment in full in
cash of the Obligations before any Loan Party is entitled to receive any payment
on account of the Intercompany Obligations.

 

(ii) Any payment or distribution of assets of any Loan Party of any kind or
character, whether in cash, property or securities, to which any other Loan
Party would be entitled except for the provisions of this Section 12.06(c),
shall be paid by the liquidating trustee or agent or other Person making such
payment or distribution directly to Administrative Agent for the benefit of the
Lenders in the manner set forth herein, to the extent necessary to make payment
in full of all Obligations remaining unpaid after giving effect to any
concurrent payment or distribution or provisions therefor to Administrative
Agent for itself and Lenders

 

(iii) In the event that notwithstanding the foregoing provisions of this Section
12.06(c), any payment or distribution of assets of any Loan Party of any kind or
character, whether in cash, property or securities, shall be received by any
other Loan Party on account of any Intercompany Obligations before all
Obligations are paid in full, such payment or distribution shall be received and
held in trust for and shall be paid over to Administrative Agent for itself and
Lenders for application to the payment of the Obligations until all of the
Obligations shall have been paid in full, after giving effect to any concurrent
payment or distribution or provision therefor to Administrative Agent for itself
and Lenders.

 

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(d) No right of Agents, any Lender or any other present or future holders of the
Obligations to enforce subordination as provided herein shall at any time in any
way be prejudiced or impaired by any act or failure to act on the part of any
Loan Party or by any act or failure to act, in good faith, by any Loan Party, or
by any noncompliance by any Loan Party with the terms of the Intercompany
Obligations, regardless of any knowledge thereof which any Loan Party may have
or be otherwise charged with.

 

ARTICLE XIII

 

MISCELLANEOUS

 

Section 13.01 Notices, Etc. All notices and other communications provided for
hereunder shall be in writing and shall be mailed, telecopied or delivered, if
to any Loan Party, at the following address:

 

Oglebay Norton Company

1001 Lakeside Avenue, 15th Floor

Cleveland, Ohio 44114

Attention: Chief Financial Officer/General Counsel

Telephone: 216-861-8941/216-861-8734

Telecopier: 216-861-2307/216-861-2313

 

with a copy to:

 

Jones Day

North Point

901 Lakeside Avenue

Cleveland, Ohio 44114-1190

Attention: Rachel Rawson, Esq.

Telephone: 216-586-3939

Telecopier: 216-579-0212

 

if to the Administrative Agent, to it at the following address:

 

Wells Fargo Foothill, Inc.

One Boston Place, 18th Floor

Boston, Massachusetts 02108

Attention: Business Finance Division Manager

Telephone: 617-624-4400

Telecopier: 617-523-1697

 

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with a copy to:

 

Otterbourg, Steindler, Houston & Rosen, P.C.

230 Park Avenue

New York, New York 10169

Attention: Richard L. Stehl, Esq.

Telephone: 212-661-9100

Telecopier: 212-682-6104

 

if the Collateral Agent, to it at the following address:

 

Silver Point Finance, LLC

Two Greenwich Plaza, 1st Floor

Greenwich, Connecticut 06830

Attention: David Sawyer

Telephone: 203-618-2699

Telecopier: 203-618-2669

 

in each case, with a copy to:

 

Schulte Roth & Zabel LLP

919 Third Avenue

New York, New York 10022

Attention: Frederic L. Ragucci, Esq.

Telephone: 212-756-2000

Telecopier: 212-593-5955

 

or, as to each party, at such other address as shall be designated by such party
in a written notice to the other parties complying as to delivery with the terms
of this Section 13.01. All such notices and other communications shall be
effective, (i) if mailed (by certified or registered mail, postage prepaid and
return receipt requested), when received or three Business Days after deposited
in the mails, whichever occurs first, (ii) if telecopied, when transmitted and
confirmation received, provided same is on a Business Day and, if not, on the
next Business Day, or (iii) if delivered, upon delivery, provided same is on a
Business Day and, if not, on the next Business Day, except that notices to any
Agent or the L/C Issuer pursuant to ARTICLE II and ARTICLE III shall not be
effective until received by such Agent or the L/C Issuer, as the case may be.

 

Section 13.02 Amendments, Etc. (a) Except as set forth in the succeeding
sentence, no amendment or waiver of any provision of this Agreement, and no
consent to any departure by any Loan Party therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Required Lenders
or by the Agents with the consent of the Required Lenders, and then such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given, provided, however, that no amendment, waiver or consent
shall (i) for any Lender, increase the Revolving Credit Commitment, the Term
Loan A Commitment or the Term Loan B Commitment of such Lender, reduce the
principal of, or interest on, the Loans or the Letter of Credit Obligations
payable to such Lender, reduce the

 

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amount of any fee payable for the account of such Lender, or postpone or extend
any date fixed for any scheduled payment (but not prepayment) of principal of,
or interest or fees on, the Loans or Letter of Credit Obligations payable to
such Lender, in each case without the written consent of the applicable Lender,
(ii) change the percentage of the Revolving Credit Commitments, the Term Loan A
Commitments, the Term Loan B Commitments, or of the aggregate unpaid principal
amount of the Loans that is required for the Lenders or any of them to take any
action hereunder without the written consent of each Lender, (iii) amend the
definition of “Required Revolving Loan Lenders”, “Required Term A Lenders”,
“Required Term B Lenders”, “Required Lenders” or “Pro Rata Share” without the
written consent of each Lender, (iv) release Collateral with an aggregate fair
market value in excess of $2,500,000 in the aggregate since the Effective Date
without the prior written consent of each Lender (except as otherwise provided
in this Agreement and the other Loan Documents), (v) subordinate any Lien
granted in favor of the Collateral Agent for the benefit of the Agents and the
Lenders, or release any Borrower or any Guarantor (except as otherwise provided
in this Agreement), in each case, without the written consent of each Lender or
(vi) amend, modify or waive Sections 5.04(b) or 2.05(d) or this Section 13.02 of
this Agreement without the written consent of each Lender. Notwithstanding the
foregoing, (A) no amendment, waiver or consent shall increase the Total
Revolving Credit Commitment or shall amend the definition of “Total Revolving
Credit Commitment”, in each case without the written consent of each Revolving
Loan Lender, the Required Term A Lenders and the Required Term B Lenders, (B) no
amendment, waiver or consent shall increase the Total Term Loan A Commitment or
the Term Loan A or shall amend the definition of “Total Term Loan A Commitment”,
in each case without the written consent of each Lender, (C) no amendment,
waiver or consent shall increase the Total Term Loan B Commitment or the Term
Loan B by more than $25,000,000, or shall amend the definition of “Total Term
Loan B Commitment” to increase the Total Term Loan B Commitment by more than
$25,000,000, in each case, without the written consent of each Lender, (D) no
amendment, waiver or consent shall, unless in writing and signed by an Agent,
affect the rights or duties of such Agent (but not in its capacity as a Lender)
under this Agreement or the other Loan Documents, (E) no amendment, waiver or
consent shall, unless in writing and signed by the Required Revolving Loan
Lenders, increase the maximum amount of Accounts subject to the Pool Agreement
that may be Eligible Accounts under clause (xvii) of the definition of “Eligible
Accounts”, and (F) no amendment, waiver or consent, unless in writing and signed
by the Required Term A Lenders, the Required Term B Lenders and Revolving Loan
Lenders whose aggregate Pro Rata Shares (calculated under clause (a) of such
definition) equal or exceed 75%, shall be made to (x) Section 8.03(b) or (y) the
definition of “Availability” or “Borrowing Base”.

 

(b) If, in connection with any proposed amendment, waiver or consent requiring
the consent of all Lenders, the consent of the Required Lenders is obtained, but
the consent of other Lenders is not obtained (any such Lender whose consent is
not obtained being referred to as a “Non-Consenting Lender”), then, (i) with
respect to the Term Loans, so long as the Collateral Agent is not a
Non-Consenting Lender, the Collateral Agent shall have the right (but not the
obligation) to, or, at the Administrative Borrower’s request and upon the
consent of the Collateral Agent, the Collateral Agent or an Eligible Assignee
shall, purchase from the Non-Consenting Lenders, and the Non-Consenting Lenders
agree that they shall sell, all the Non-Consenting Lenders’ Term Loans for an
amount equal to the principal balances thereof and all accrued interest and fees
with respect thereto through the date of sale pursuant to Assignment and
Acceptance(s), without premium or discount and (ii) with respect to the
Revolving Loans, so long

 

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as neither Agent is a Non-Consenting Lender, the Agents shall have the right
(but not the obligation) to, or, at the Administrative Borrower’s request and
upon the consent of the Agents, the Agents or an Eligible Assignee shall,
purchase from the Non-Consenting Lenders, and the Non-Consenting Lenders agree
that they shall sell, all the Non-Consenting Lenders’ Revolving Loans for an
amount equal to the principal balances thereof and all accrued interest and fees
with respect thereto through the date of sale pursuant to Assignment and
Acceptance(s), without premium or discount.

 

Section 13.03 No Waiver; Remedies, Etc. No failure on the part of any Agent or
any Lender to exercise, and no delay in exercising, any right hereunder or under
any other Loan Document shall operate as a waiver thereof; nor shall any single
or partial exercise of any right under any Loan Document preclude any other or
further exercise thereof or the exercise of any other right. The rights and
remedies of the Agents and the Lenders provided herein and in the other Loan
Documents are cumulative and are in addition to, and not exclusive of, any
rights or remedies provided by law. The rights of the Agents and the Lenders
under any Loan Document against any party thereto are not conditional or
contingent on any attempt by the Agents and the Lenders to exercise any of their
rights under any other Loan Document against such party or against any other
Person.

 

Section 13.04 Expenses; Taxes; Attorneys’ Fees. The Borrowers will pay on
demand, all costs and expenses incurred by or on behalf of each Agent (and, in
the case of clauses (b) through (m) below, each Lender), regardless of whether
the transactions contemplated hereby are consummated, including, without
limitation, reasonable fees, costs, client charges and expenses of counsel for
each Agent (and, in the case of clauses (b) through (m) below, each Lender),
accounting, due diligence, periodic field audits, physical counts, valuations,
investigations, searches and filings, monitoring of assets, appraisals of
Collateral, title searches and reviewing environmental assessments,
miscellaneous disbursements, examination, travel, lodging and meals (subject, in
the case of costs and expenses in connection with visits, audits, inspections,
valuations and field examinations, to the limitations set forth in Section
5.01), arising from or relating to: (a) the negotiation, preparation, execution,
delivery, performance and administration of this Agreement and the other Loan
Documents (including, without limitation, the preparation of any additional Loan
Documents pursuant to Section 8.01(b) or the review of any of the agreements,
instruments and documents referred to in Section 8.01(f)), (b) any requested
amendments, waivers or consents to this Agreement or the other Loan Documents
whether or not such documents become effective or are given, (c) the
preservation and protection of any of the Agents’ or the Lenders’ rights under
this Agreement or the other Loan Documents, (d) the defense of any claim or
action asserted or brought against any Agent or any Lender by any Person that
arises from or relates to this Agreement, any other Loan Document, the Agents’
or the Lenders’ claims against any Loan Party, or any and all matters in
connection therewith, (e) the commencement or defense of, or intervention or
participation in, any court or judicial proceeding arising from or related to
this Agreement or any other Loan Document, including, without limitation, in
connection with any Insolvency Proceeding related to any Loan Party or the
Collateral, including in any adversary proceeding or contested matter commenced
or continued by, on behalf of, or against any Loan Party or its estate, and any
appeal or review thereof, (f) the filing of any petition, complaint, answer,
motion or other pleading by any Agent or any Lender, or the taking of any action
in respect of the Collateral or other security, in connection with this
Agreement or any other Loan Document, (g) the protection, collection,

 

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lease, sale, taking possession of or liquidation of, any Collateral or other
security in connection with this Agreement or any other Loan Document, (h) any
attempt to enforce any Lien or security interest in any Collateral or other
security in connection with this Agreement or any other Loan Document, (i) any
attempt to collect from any Loan Party, (j) all liabilities and costs arising
from or in connection with the past, present or future operations of any Loan
Party involving any damage to real or personal property or natural resources or
harm or injury alleged to have resulted from any Release of Hazardous Materials
on, upon or into such property, (k) any Environmental Liabilities and Costs
incurred in connection with the investigation, removal, cleanup and/or
remediation of any Hazardous Materials present or arising out of the operations
of any facility of any Loan Party, (l) any Environmental Liabilities and Costs
incurred in connection with any Environmental Lien, or (m) the receipt by any
Agent or any Lender of any advice from professionals with respect to any of the
foregoing. Without limitation of the foregoing or any other provision of any
Loan Document: (x) each Borrower agrees to pay all stamp, document, transfer,
recording or filing taxes or fees and similar impositions now or hereafter
determined by any Agent or any Lender to be payable in connection with this
Agreement or any other Loan Document, and each Borrower agrees to save each
Agent and each Lender harmless from and against any and all present or future
claims, liabilities or losses with respect to or resulting from any omission to
pay or delay in paying any such taxes, fees or impositions, (y) each Borrower
agrees to pay all broker fees that may become due in connection with the
transactions contemplated by this Agreement and the other Loan Documents, and
(z) if any Borrower fails to perform any covenant or agreement contained herein
or in any other Loan Document, any Agent may itself perform or cause performance
of such covenant or agreement, and the expenses of such Agent incurred in
connection therewith shall be reimbursed on demand by the Borrowers.

 

Section 13.05 Right of Set-off. Upon the occurrence and during the continuance
of any Event of Default, any Agent or any Lender may, and is hereby authorized
to, at any time and from time to time, without notice to any Loan Party (any
such notice being expressly waived by the Loan Parties) and to the fullest
extent permitted by law, set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
Indebtedness at any time owing by such Agent or such Lender to or for the credit
or the account of any Loan Party against any and all obligations of the Loan
Parties either now or hereafter existing under any Loan Document, irrespective
of whether or not such Agent or such Lender shall have made any demand hereunder
or thereunder and although such obligations may be contingent or unmatured. Each
Agent and each Lender agrees to notify such Loan Party promptly after any such
set-off and application made by such Agent or such Lender, provided that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of the Agents and the Lenders under this Section 13.05
are in addition to the other rights and remedies (including, without limitation,
other rights of set-off) which the Agents and the Lenders may have under this
Agreement or any other Loan Documents, in law or otherwise.

 

Section 13.06 Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining portions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.

 

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Section 13.07 Assignments and Participations. (a) This Agreement and the other
Loan Documents shall be binding upon and inure to the benefit of each Loan Party
and each Agent and each Lender and their respective successors and assigns;
provided, however, that none of the Loan Parties may assign or transfer any of
its rights hereunder without the prior written consent of each Lender and any
such assignment without the Lenders’ prior written consent shall be null and
void.

 

(b) Each Lender may, (x) with the written consent of the Collateral Agent and,
in the absence of a continuing Event of Default, the Administrative Borrower,
which consent, in each such case, shall not be unreasonably withheld or delayed,
assign to one or more other lenders or other entities all or a portion of its
rights and obligations under this Agreement with respect to all or a portion of
its Term Loan A Commitment and the Term Loan A made by it or its Term Loan B
Commitment and the Term Loan B made by it and (y) with the written consent of
the Collateral Agent, Administrative Agent and, in the absence of a continuing
Event of Default, the Administrative Borrower, which consent, in each such case,
shall not be unreasonably withheld or delayed, assign to one or more other
lenders or other entities all or a portion of its rights and obligations under
this Agreement with respect to all or a portion of its Revolving Credit
Commitment, the Revolving Loans made by it and its Pro Rata Share of Letter of
Credit Obligations; provided, however, that (i) such assignment is in an amount
which is at least $1,000,000 or a multiple of $500,000 in excess thereof (or the
remainder of such Lender’s Revolving Credit Commitment (or if such Lender’s
Revolving Credit Commitment has been reduced to zero, Revolving Loans), Term
Loan A or Term Loan B, as the case may be) (except such minimum amount shall not
apply to an assignment by (A) a Lender to an Affiliate of such Lender or a
Related Fund of such Lender, (B) with any consent otherwise required by this
paragraph, a Lender to a Person and its Affiliates or a Related Fund of such
Person to the extent the aggregate amount assigned to all such Persons is at
least $1,000,000 or a multiple of $500,000 in excess thereof (such assignment, a
“Related Assignee Assignment”) or (C) with any consent otherwise required by
this paragraph, a Lender and such Lender’s Affiliates or Related Funds to a
Person to the extent the aggregate amount assigned by such Lender and its
Affiliates and Related Funds to such Person is at least $1,000,000 or a multiple
of $500,000 in excess thereof (such assignment, a “Related Assignor Assignment”,
and together with a “Related Assignee Assignment”, a “Related Assignment”), (ii)
the parties to each such assignment shall execute and deliver to the Agents, for
their acceptance (to the extent required), an Assignment and Acceptance,
together with any promissory note subject to such assignment and such parties
shall deliver to the Administrative Agent a processing and recordation fee of
$4,000 (except (A) the payment of such fee shall not be required in connection
with an assignment by a Lender to an Affiliate of such Lender or a Related Fund
of such Lender, and (B) such fee shall only be payable once in connection with
any Related Assignment), (iii) no written consent of the Collateral Agent, the
Administrative Agent or the Administrative Borrower shall be required in
connection with any assignment by a Lender to another Lender or an Affiliate of
such assigning Lender or a Related Fund of such assigning Lender. The Borrowers
and the Agents may continue to deal solely and directly with an assigning Lender
in connection with the interest so assigned until such Lender and its assignee
shall have executed and delivered to the Administrative Borrower and the Agents,
and the Agents shall have accepted, an Assignment and Acceptance. Upon such
execution, delivery and acceptance, from and after the effective date specified
in each Assignment and Acceptance, which effective date shall be at least three
Business Days after the delivery thereof to the Collateral Agent (or such
shorter period as shall be agreed to by the Collateral Agent and the parties to
such

 

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assignment), (A) the assignee thereunder shall become a “Lender” hereunder and,
in addition to the rights and obligations hereunder held by it immediately prior
to such effective date, have the rights and obligations hereunder that have been
assigned to it pursuant to such Assignment and Acceptance and (B) the assigning
Lender thereunder shall, to the extent that rights and obligations hereunder
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights and be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all or the remaining portion
of an assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto).

 

(i) By executing and delivering an Assignment and Acceptance, the assigning
Lender and the assignee thereunder confirm to and agree with each other and the
other parties hereto as follows: (A) other than as provided in such Assignment
and Acceptance, the assigning Lender makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or any other Loan
Document or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other Loan Document furnished
pursuant hereto; (B) the assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of any
Loan Party or any of its Subsidiaries or the performance or observance by any
Loan Party of any of its obligations under this Agreement or any other Loan
Document furnished pursuant hereto; (C) such assignee confirms that it has
received a copy of this Agreement and the other Loan Documents, together with
such other documents and information it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance; (D)
such assignee will, independently and without reliance upon the assigning
Lender, any Agent or any Lender and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under this Agreement and the other Loan
Documents; (E) such assignee appoints and authorizes the Agents to take such
action as agents on its behalf and to exercise such powers under this Agreement
and the other Loan Documents as are delegated to the Agents by the terms hereof
and thereof, together with such powers as are reasonably incidental hereto and
thereto; and (F) such assignee agrees that it will perform in accordance with
their terms all of the obligations which by the terms of this Agreement and the
other Loan Documents are required to be performed by it as a Lender.

 

(ii) The Collateral Agent shall send a copy of each Assignment and Acceptance to
the Administrative Agent and the Administrative Agent shall, on behalf of the
Borrowers, maintain, or cause to be maintained at the Payment Office, a copy of
each Assignment and Acceptance delivered to and accepted by it and a register
(the ”Register”) for the recordation of the names and addresses of the Lenders
and the Revolving Credit Commitments of, Term Loan A Commitments of, and Term
Loan B Commitments of, and principal amount of the Loans (the ”Registered
Loans”) and Letter of Credit Obligations owing to each Lender from time to time.
Other than in connection with an assignment by a Lender to an Affiliate of such
Lender or a Related Fund of such Lender, the entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Borrowers, the Agents and the Lenders shall treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Administrative
Borrower and any Lender at any reasonable time and from time to time upon
reasonable prior notice. In the case of any assignment by a Lender to an
Affiliate of such Lender or a Related

 

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Fund of such Lender, and which assignment is not recorded in the Register, the
assigning Lender shall maintain a comparable register to the Register.

 

(iii) Upon its receipt of an Assignment and Acceptance executed by an assigning
Lender and an assignee, together with any promissory notes subject to such
assignment, the Administrative Agent shall, if the applicable Agents consent to
such assignment (to the extent any such Agent’s consent is required) and if such
Assignment and Acceptance has been completed (i) accept such Assignment and
Acceptance and (ii) record the information contained therein in the Register.

 

(iv) A Registered Loan (and the registered note, if any, evidencing the same)
may be assigned or sold in whole or in part only by registration of such
assignment or sale on the Register (and each registered note shall expressly so
provide). Any assignment or sale of all or part of such Registered Loan (and the
registered note, if any, evidencing the same) may be effected only by
registration of such assignment or sale on the Register, together with the
surrender of the registered note, if any, evidencing the same duly endorsed by
(or accompanied by a written instrument of assignment or sale duly executed by)
the holder of such registered note, whereupon, at the request of the designated
assignee(s) or transferee(s), one or more new registered notes in the same
aggregate principal amount shall be issued to the designated assignee(s) or
transferee(s). Prior to the registration of assignment or sale of any Registered
Loan (and the registered note, if any, evidencing the same), the Agents shall
treat the Person in whose name such Registered Loan (and the registered note, if
any, evidencing the same) is registered as the owner thereof for the purpose of
receiving all payments thereon and for all other purposes, notwithstanding
notice to the contrary.

 

(v) In the event that any Lender sells participations in a Registered Loan, such
Lender shall maintain a register on which it enters the name of all participants
in the Registered Loans held by it (the ”Participant Register”). A Registered
Loan (and the registered note, if any, evidencing the same) may be participated
in whole or in part only by registration of such participation on the
Participant Register (and each registered note shall expressly so provide). Any
participation of such Registered Loan (and the registered note, if any,
evidencing the same) may be effected only by the registration of such
participation on the Participant Register.

 

(vi) Any foreign Person who purchases or is assigned or participates in any
portion of such Registered Loan shall provide the Agents and the Lender with a
completed Internal Revenue Service Form W-8BEN (Certificate of Foreign Status)
or a substantially similar form for such purchaser, participant or any other
affiliate who is a holder of beneficial interests in the Registered Loan.

 

(c) Each Lender may sell participations to one or more banks or other entities
in or to all or a portion of its rights and obligations under this Agreement and
the other Loan Documents (including, without limitation, all or a portion of its
Revolving Credit Commitments, the Loans made by it and its Pro Rata Share of the
Letter of Credit Obligations); provided, that (i) such Lender’s obligations
under this Agreement (including without limitation, its Commitments hereunder)
and the other Loan Documents shall remain unchanged; (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations,

 

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and the Borrowers, the Agents 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 and the other Loan Documents; and (iii) a
participant shall not be entitled to require such Lender to take or omit to take
any action hereunder except (A) action directly effecting an extension of the
maturity dates or decrease in the outstanding principal amount of the Loans or
Letter of Credit Obligations, (B) action directly effecting an extension of the
scheduled due dates or a decrease in the rate of interest payable on the Loans
or the fees payable under this Agreement, or (C) actions directly effecting a
release of all or a substantial portion of the Collateral or any Loan Party
(except as set forth in Section 11.08 of this Agreement or any other Loan
Document). The Loan Parties agree that each participant shall be entitled to the
benefits of Section 2.07 and Section 5.05 of this Agreement with respect to its
participation in any portion of the Revolving Credit Commitments and the Loans
as if it were a Lender; provided, however, that the amount of any such benefit
shall be limited to the amount that would otherwise be payable to the Lender
selling the participation with respect to the portion of the Loan in which the
participation was so sold.

 

Section 13.08 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which shall be deemed to be an original, but all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of
this Agreement by telecopier shall be equally as effective as delivery of an
original executed counterpart of this Agreement. Any party delivering an
executed counterpart of this Agreement by telecopier also shall deliver an
original executed counterpart of this Agreement but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability, and
binding effect of this Agreement. The foregoing shall apply to each other Loan
Document mutatis mutandis.

 

Section 13.09 GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK
EXCEPT AS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT
OF SUCH OTHER LOAN DOCUMENT.

 

Section 13.10 CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE. ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK IN THE COUNTY OF NEW YORK
OR OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK,
AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH LOAN PARTY HEREBY
IRREVOCABLY ACCEPTS IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY,
THE JURISDICTION OF THE AFORESAID COURTS. EACH LOAN PARTY HEREBY IRREVOCABLY
APPOINTS CT CORPORATION AS ITS AGENT FOR SERVICE OF PROCESS IN RESPECT OF ANY
SUCH ACTION OR PROCEEDING AND FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS AND IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO THE ADMINISTRATIVE BORROWER AT ITS ADDRESS FOR NOTICES AS
SET FORTH IN SECTION 13.01 AND TO CT CORPORATION

 

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AT 111 EIGHTH AVENUE, NEW YORK, NEW YORK 10011, SUCH SERVICE TO BECOME EFFECTIVE
TEN (10) DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE
AGENTS AND THE LENDERS TO SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY LOAN PARTY
IN ANY OTHER JURISDICTION. EACH LOAN PARTY HEREBY EXPRESSLY AND IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE JURISDICTION OR LAYING OF VENUE OF ANY SUCH LITIGATION
BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH
LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT ANY
LOAN PARTY HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY
COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT
PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO
ITSELF OR ITS PROPERTY, EACH LOAN PARTY HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY
IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.

 

Section 13.11 WAIVER OF JURY TRIAL, ETC. EACH LOAN PARTY, EACH AGENT AND EACH
LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS, OR UNDER ANY AMENDMENT, WAIVER, CONSENT, INSTRUMENT, DOCUMENT OR
OTHER AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED IN CONNECTION
THEREWITH, OR ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN CONNECTION
WITH THIS AGREEMENT, AND AGREES THAT ANY SUCH ACTION, PROCEEDINGS OR
COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. EACH LOAN
PARTY CERTIFIES THAT NO OFFICER, REPRESENTATIVE, AGENT OR ATTORNEY OF ANY AGENT
OR ANY LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT ANY AGENT OR ANY
LENDER WOULD NOT, IN THE EVENT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK
TO ENFORCE THE FOREGOING WAIVERS. EACH LOAN PARTY HEREBY ACKNOWLEDGES THAT THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENTS AND THE LENDERS ENTERING INTO
THIS AGREEMENT.

 

Section 13.12 Consent by the Agents and Lenders. Except as otherwise expressly
set forth herein to the contrary, if the consent, approval, satisfaction,
determination, judgment, acceptance or similar action (an “Action”) of any Agent
or any Lender shall be permitted or required pursuant to any provision hereof or
any provision of any other agreement to which any Loan Party is a party and to
which any Agent or any Lender has succeeded thereto, such Action shall be
required to be in writing and may be withheld or denied by such Agent or such
Lender, in its sole discretion, with or without any reason, and without being
subject to question or challenge on the grounds that such Action was not taken
in good faith.

 

Section 13.13 No Party Deemed Drafter. Each of the parties hereto agrees that no
party hereto shall be deemed to be the drafter of this Agreement.

 

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Section 13.14 Reinstatement; Certain Payments. If any claim is ever made upon
any Agent, any Lender or the L/C Issuer for repayment or recovery of any amount
or amounts received by such Agent, such Lender or the L/C Issuer in payment or
on account of any of the Obligations, such Agent, such Lender or the L/C Issuer
shall give prompt notice of such claim to each other Agent and Lender and the
Administrative Borrower, and if such Agent, such Lender or the L/C Issuer repays
all or part of such amount by reason of (i) any judgment, decree or order of any
court or administrative body having jurisdiction over such Agent, such Lender or
the L/C Issuer or any of its property, or (ii) any good faith settlement or
compromise of any such claim effected by such Agent, such Lender or the L/C
Issuer with any such claimant, then and in such event each Loan Party agrees
that (A) any such judgment, decree, order, settlement or compromise shall be
binding upon it notwithstanding the cancellation of any Indebtedness hereunder
or under the other Loan Documents or the termination of this Agreement or the
other Loan Documents, and (B) it shall be and remain liable to such Agent, such
Lender or the L/C Issuer hereunder for the amount so repaid or recovered to the
same extent as if such amount had never originally been received by such Agent,
such Lender or the L/C Issuer.

 

Section 13.15 Indemnification.

 

(a) General Indemnity. In addition to each Loan Party’s other Obligations under
this Agreement, each Loan Party agrees to, jointly and severally, defend,
protect, indemnify and hold harmless each Agent, each Lender and the L/C Issuer
and all of their respective officers, directors, members, partners, employees,
attorneys, consultants and agents (collectively called the ”Indemnitees”) from
and against any and all losses, damages, liabilities, obligations, penalties,
fees, reasonable costs and expenses (including, without limitation, reasonable
attorneys’ fees, costs and expenses) incurred by such Indemnitees, whether prior
to or from and after the Effective Date, whether direct, indirect or
consequential, as a result of or arising from or relating to or in connection
with any of the following: (i) the negotiation, preparation, execution or
performance or enforcement of this Agreement, any other Loan Document or of any
other document executed in connection with the transactions contemplated by this
Agreement, (ii) any Agent’s or any Lender’s furnishing of funds to the Borrowers
or the L/C Issuer’s issuing of Letter of Credit Accommodations for the account
of the Borrowers under this Agreement or the other Loan Documents, including,
without limitation, the management of any such Loans or the Letter of Credit
Obligations, (iii) any matter relating to the financing transactions
contemplated by this Agreement or the other Loan Documents or by any document
executed in connection with the transactions contemplated by this Agreement or
the other Loan Documents, or (iv) any claim, litigation, investigation or
proceeding relating to any of the foregoing, whether or not any Indemnitee is a
party thereto (collectively, the ”Indemnified Matters”); provided, however, that
the Loan Parties shall not have any obligation under this subsection (a) for any
Indemnified Matter (x) to any Indemnitee caused by the gross negligence or
willful misconduct of such Indemnitee, as determined by a final judgment of a
court of competent jurisdiction or (y) to any Lender or its Indemnitees arising
directly from any action solely between or among the Lenders.

 

(b) Environmental Indemnity. Without limiting Section 13.15(a) hereof, each Loan
Party agrees to, jointly and severally, defend, indemnify, and hold harmless the
Indemnitees against any and all Environmental Liabilities and Costs and all
other claims, demands, penalties, fines, liability (including strict liability),
losses, damages, costs and expenses (including without limitation, reasonable
legal fees and expenses, consultant fees and laboratory fees), arising

 

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out of (i) any Releases or threatened Releases (x) at any property presently or
formerly owned or operated by any Loan Party or any Subsidiary of any Loan
Party, or any corporate predecessor, or (y) of any Hazardous Materials Handled
by any Loan Party or any Subsidiary of any Loan Party, or any corporate
predecessor; (ii) any violations of Environmental Laws; (iii) any Environmental
Action relating to any Loan Party or any Subsidiary of any Loan Party, or any
corporate predecessor; (iv) any personal injury (including wrongful death) or
property damage (real or personal) arising out of exposure to Hazardous
Materials Handled by any Loan Party or any Subsidiary of any Loan Party, or any
corporate predecessor; and (v) any breach of any warranty or representation
regarding environmental matters made by the Loan Parties in Section 7.01(r) or
the breach of any covenant made by the Loan Parties in Section 8.01(j).
Notwithstanding the foregoing, the Loan Parties shall not have any obligation to
any Indemnitee under this subsection (b) regarding any and all Environmental
Liabilities and Costs and all other claims, demands, penalties, fines,
liabilities, losses, damages, costs and expenses (including, without limitation,
reasonable legal fees and expenses, consultant fees and laboratory fees) covered
hereunder which is caused by the gross negligence or willful misconduct of such
Indemnitee, as determined by a final judgment of a court of competent
jurisdiction.

 

(c) The indemnification for all of the foregoing losses, damages, fees, costs
and expenses of the Indemnitees are chargeable against the Loan Account. To the
extent that the undertaking to indemnify, pay and hold harmless set forth in
this Section 13.15 may be unenforceable because it is violative of any law or
public policy, each Loan Party shall, jointly and severally, contribute the
maximum portion which it is permitted to pay and satisfy under applicable law,
to the payment and satisfaction of all Indemnified Matters incurred by the
Indemnitees. The indemnities set forth in this Section 13.15 shall survive the
repayment of the Obligations and discharge of any Liens granted under the Loan
Documents.

 

Section 13.16 Records. The unpaid principal of and interest on the Loans, the
interest rate or rates applicable to such unpaid principal and interest, the
duration of such applicability, the Revolving Credit Commitments, the Term Loan
A Commitments, the Term Loan B Commitments, the Applicable Prepayment Premium,
and the accrued and unpaid fees payable pursuant to the terms hereof and the Fee
Letter, shall at all times be ascertained from the records of the Agents, which
shall be conclusive and binding absent manifest error.

 

Section 13.17 Binding Effect. This Agreement shall become effective when it
shall have been executed by each Loan Party, each Agent and each Lender and when
the conditions precedent set forth in Section 6.01 hereof have been satisfied or
waived in writing by the Agents, and thereafter shall be binding upon and inure
to the benefit of each Loan Party, each Agent and each Lender, and their
respective successors and assigns, except that the Loan Parties shall not have
the right to assign their rights hereunder or any interest herein without the
prior written consent of each Lender, and any assignment by any Lender shall be
governed by Section 13.07 hereof.

 

Section 13.18 Interest. It is the intention of the parties hereto that each
Agent and each Lender shall conform strictly to usury laws applicable to it.
Accordingly, if the transactions contemplated hereby or by any other Loan
Document would be usurious as to any Agent or any Lender under laws applicable
to it (including the laws of the United States of America and the State of New
York or any other jurisdiction whose laws may be mandatorily

 

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applicable to such Agent or such Lender notwithstanding the other provisions of
this Agreement), then, in that event, notwithstanding anything to the contrary
in this Agreement or any other Loan Document or any agreement entered into in
connection with or as security for the Obligations, it is agreed as follows: (i)
the aggregate of all consideration which constitutes interest under law
applicable to any Agent or any Lender that is contracted for, taken, reserved,
charged or received by such Agent or such Lender under this Agreement or any
other Loan Document or agreements or otherwise in connection with the
Obligations shall under no circumstances exceed the maximum amount allowed by
such applicable law, any excess shall be canceled automatically and if
theretofore paid shall be credited by such Agent or such Lender on the principal
amount of the Obligations (or, to the extent that the principal amount of the
Obligations shall have been or would thereby be Paid in Full, refunded by such
Agent or such Lender, as applicable, to the Borrowers); and (ii) in the event
that the maturity of the Obligations is accelerated by reason of any Event of
Default under this Agreement or otherwise, or in the event of any required or
permitted prepayment, then such consideration that constitutes interest under
law applicable to any Agent or any Lender may never include more than the
maximum amount allowed by such applicable law, and excess interest, if any,
provided for in this Agreement or otherwise shall be canceled automatically by
such Agent or such Lender, as applicable, as of the date of such acceleration or
prepayment and, if theretofore paid, shall be credited by such Agent or such
Lender, as applicable, on the principal amount of the Obligations (or, to the
extent that the principal amount of the Obligations shall have been or would
thereby be Paid in Full, refunded by such Agent or such Lender to the
Borrowers). All sums paid or agreed to be paid to any Agent or any Lender for
the use, forbearance or detention of sums due hereunder shall, to the extent
permitted by law applicable to such Agent or such Lender, be amortized,
prorated, allocated and spread throughout the full term of the Loans until
payment in full so that the rate or amount of interest on account of any Loans
hereunder does not exceed the maximum amount allowed by such applicable law. If
at any time and from time to time (x) the amount of interest payable to any
Agent or any Lender on any date shall be computed at the Highest Lawful Rate
applicable to such Agent or such Lender pursuant to this Section 13.18 and (y)
in respect of any subsequent interest computation period the amount of interest
otherwise payable to such Agent or such Lender would be less than the amount of
interest payable to such Agent or such Lender computed at the Highest Lawful
Rate applicable to such Agent or such Lender, then the amount of interest
payable to such Agent or such Lender in respect of such subsequent interest
computation period shall continue to be computed at the Highest Lawful Rate
applicable to such Agent or such Lender until the total amount of interest
payable to such Agent or such Lender shall equal the total amount of interest
which would have been payable to such Agent or such Lender if the total amount
of interest had been computed without giving effect to this Section 13.18.

 

For purposes of this Section 13.18, the term “applicable law” shall mean that
law in effect from time to time and applicable to the loan transaction between
the Borrowers, on the one hand, and the Agents and the Lenders, on the other,
that lawfully permits the charging and collection of the highest permissible,
lawful non-usurious rate of interest on such loan transaction and this
Agreement, including laws of the State of New York and, to the extent
controlling, laws of the United States of America.

 

The right to accelerate the maturity of the Obligations does not include the
right to accelerate any interest that has not accrued as of the date of
acceleration.

 

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Section 13.19 Confidentiality. Each Agent and each Lender agrees (on behalf of
itself and each of its affiliates, directors, officers, employees and
representatives) to use reasonable precautions to keep confidential, in
accordance with its customary procedures for handling confidential information
of this nature and in accordance with safe and sound practices of comparable
commercial finance companies, any non-public information supplied to it by the
Loan Parties on and after the Effective Date pursuant to this Agreement or the
other Loan Documents which is identified in writing by the Loan Parties as being
confidential at the time the same is delivered to such Person (and which at the
time is not, and does not thereafter become, publicly available or available to
such Person from another source not known to be subject to a confidentiality
obligation to such Person not to disclose such information), provided that
nothing herein shall limit the disclosure of any such information (i) to the
extent required by statute, rule, regulation or judicial process, (ii) to
Affiliates of any Agent or Lender or to counsel for any Agent or any Lender,
(iii) to examiners, auditors, accountants or Securitization Parties, (iv) in
connection with any litigation to which any Agent or any Lender is a party or
(v) to any assignee or participant (or prospective assignee or participant) so
long as such assignee or participant (or prospective assignee or participant)
first agrees, in writing, to be bound by confidentiality provisions similar in
substance to this Section 13.19. Each Agent and each Lender agrees that, upon
receipt of a request or identification of the requirement for disclosure
pursuant to clause (iv) hereof, it will make reasonable efforts to keep the Loan
Parties informed of such request or identification; provided that each Loan
Party acknowledges that (x) each Agent and each Lender may make disclosure as
required or requested by any Governmental Authority or representative thereof
and that each Agent and each Lender may be subject to review by Securitization
Parties or other regulatory agencies and may be required to provide to, or
otherwise make available for review by, the representatives of such parties or
agencies any such non-public information, and (y) the provisions of this Section
13.19 shall not apply to the federal tax structure or federal tax treatment of
such transactions, and each party hereto (and any employee, representative, or
agent of any party hereto) may disclose to any and all Persons, without
limitation, the federal tax structure and federal tax treatment of such
transactions (including all written materials related to such tax structure and
tax treatment), the intent of which is to cause the transactions contemplated
hereby not to be treated as having been offered under conditions of
confidentiality for purposes of Section 1.6011-4(b)(3) (or any successor
provision) of the Treasury Regulations promulgated under Section 6011 of the
Internal Revenue Code, and shall be construed in a manner consistent with such
purpose.

 

Section 13.20 Integration. This Agreement, together with the other Loan
Documents, reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof.

 

Section 13.21 The Parent as Agent for Borrowers. Each Borrower hereby
irrevocably appoints the Parent as the borrowing agent and attorney-in-fact for
the Borrowers (the “Administrative Borrower”) which appointment shall remain in
full force and effect unless and until the Agents shall have received prior
written notice signed by all of the Borrowers that such appointment has been
revoked and that another Borrower has been appointed Administrative Borrower.
Each Borrower hereby irrevocably appoints and authorizes the Administrative
Borrower (i) to provide to the Agents and receive from the Agents all notices
with respect to Loans obtained for the benefit of any Borrower and all other
notices and

 

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instructions under this Agreement and (ii) to take such action as the
Administrative Borrower deems appropriate on its behalf to obtain Loans and to
exercise such other powers as are reasonably incidental thereto to carry out the
purposes of this Agreement. It is understood that the handling of the Loan
Account and Collateral of the Borrowers in a combined fashion, as more fully set
forth herein, is done solely as an accommodation to the Borrowers in order to
utilize the collective borrowing powers of the Borrowers in the most efficient
and economical manner and at their request, and that neither the Agents nor the
Lenders shall incur liability to the Borrowers as a result hereof. Each of the
Borrowers expects to derive benefit, directly or indirectly, from the handling
of the Loan Account and the Collateral in a combined fashion since the
successful operation of each Borrower is dependent on the continued successful
performance of the integrated group. To induce the Agents and the Lenders to do
so, and in consideration thereof, each of the Borrowers hereby jointly and
severally agrees to indemnify the Indemnitees and hold the Indemnitees harmless
against any and all liability, expense, loss or claim of damage or injury, made
against such Indemnitee by any of the Borrowers or by any third party whosoever,
arising from or incurred by reason of (a) the handling of the Loan Account and
Collateral of the Borrowers as herein provided, (b) the Agents and the Lenders
relying on any instructions of the Administrative Borrower, or (c) any other
action taken by any Agent or any Lender hereunder or under the other Loan
Documents.

 

Section 13.22 Press Releases and Related Matters. Each Loan Party executing this
Agreement agrees that neither it nor its Affiliates will in the future issue any
press releases or other public disclosure (other than disclosures filed with the
Bankruptcy Court) using the name of Silver Point or its affiliates or referring
to this Agreement or the other Loan Documents without at least 2 Business Days’
prior notice to Silver Point and without the prior written consent of Silver
Point, unless (and only to the extent that) such Loan Party or Affiliate is
required to do so under law and then, in any event, such Loan Party or Affiliate
will consult with Silver Point before issuing such press release or other public
disclosure. Each Loan Party consents to the publication by any Agent or any
Lender of a tombstone or similar advertising material relating to the financing
transactions contemplated by this Agreement. Agents reserve the right to provide
to industry trade organizations information necessary and customary for
inclusion in league table measurements.

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

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

 

       

BORROWERS:

       

OGLEBAY NORTON COMPANY

ERIE NAVIGATION COMPANY

ERIE SAND AND GRAVEL COMPANY

ERIE SAND STEAMSHIP CO.

GLOBAL STONE CHEMSTONE CORPORATION

GLOBAL STONE FILLER PRODUCTS, INC.

GLOBAL STONE JAMES RIVER, INC.

GLOBAL STONE PORTAGE, LLC

GLOBAL STONE ST. CLAIR INC.

GLOBAL STONE TENN LUTTRELL COMPANY

MICHIGAN LIMESTONE OPERATIONS, INC.

MOUNTFORT TERMINAL, LTD.

OGLEBAY NORTON INDUSTRIAL SANDS, INC.

OGLEBAY NORTON MARINE SERVICES COMPANY, L.L.C.

OGLEBAY NORTON SPECIALTY MINERALS, INC.

OGLEBAY NORTON TERMINALS, INC.

            By:  

/s/ Julie A. Boland

               

Name: Julie A. Boland

               

Title:    In her capacity as Vice President, Chief Financial Officer and
Treasurer for Oglebay Norton Company and as Vice President and Treasurer for
each other entity above

 

            GLOBAL STONE PENROC, LP             By:  

GS PC Inc.,

               

its general partner

            By:  

/s/ Julie A. Boland

               

Name: Julie A. Boland

               

Title: Vice President and Treasurer

 

            TEXAS MINING, LP             By:  

ONTEX, Inc.

               

its general partner

            By:  

/s/ Julie A. Boland

               

Name: Julie A. Boland

               

Title: Vice President and Treasurer

 

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

       

GUARANTORS:

       

GLOBAL STONE CORPORATION

GLOBAL STONE MANAGEMENT COMPANY

GS LIME COMPANY

GS PC INC.

OGLEBAY NORTON ENGINEERED MATERIALS, INC.

OGLEBAY NORTON MANAGEMENT COMPANY

OGLEBAY NORTON MARINE MANAGEMENT COMPANY, L.L.C.

OGLEBAY NORTON MINERALS, INC.

ON COAST PETROLEUM COMPANY

ON MARINE SERVICES COMPANY

ONCO INVESTMENT COMPANY

ONCO WVA, INC.

ONMS MANAGEMENT COMPANY, LLC

ONTEX, INC.

SAGINAW MINING COMPANY

            By:  

/s/ Julie A. Boland

               

Name: Julie A. Boland

               

Title: Vice President and Treasurer

 

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COLLATERAL AGENT:

SILVER POINT FINANCE, LLC

By:  

/s/ Thomas J. Steiglehner

   

Name: Thomas J. Steiglehner

   

Title: Authorized Signatory

 

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ADMINISTRATIVE AGENT AND LENDER:

WELLS FARGO FOOTHILL, INC.

By:  

/s/ David J. Sanchez

   

Name: David J. Sanchez

   

Title: Vice President

 

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DOCUMENTATION AGENTS AND LENDERS:

BANK OF AMERICA, N.A.

By:  

/s/ Jang S. Kim

   

Name: Jang S. Kim

   

Title: Vice President

JPMORGAN CHASE BANK

By:  

/s/ John P. Freeman

   

Name: John P. Freeman

   

Title: Vice President

 

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

LENDER:

BEAR STEARNS INVESTMENT PRODUCTS INC. By:  

/s/ Jonathan Weiss

   

Name:  Jonathan Weiss

   

Title:  Authorized Signatory

LENDER:

GOLDMAN SACHS CREDIT PARTNERS L.P.

By:  

/s/ Buckley Ratchford

   

Name:  Buckley Ratchford

   

Title:  Managing Director

LENDER:

LIMESTONE INVESTORS, L.L.C.

By:  

Farallon Capital Management, L.L.C.

its General Manager

By:  

/s/ Raj Patel

   

Name:  Raj Patel

   

Title:  Managing Member

LENDER:

MORGAN STANLEY SENIOR FUNDING, INC.

By:  

/s/ Dan M. Allen

   

Name:  Dan M. Allen

   

Title:  Vice President

LENDER:

SPIRET IV LOAN TRUST 2003-A

By:  

WILMINGTON TRUST COMPANY, not in

its individual capacity but solely as trustee

By:  

/s/ Rachael L. Simpson

   

Name:  Rachael L. Simpson

   

Title:  Financial Services Officer

LENDER:

TRS THEBE LLC

By:  

/s/ Alice L. Wagner

   

Name:  Alice L. Wagner

   

Title:  Vice President

LENDER:

OAK HILL CREDIT ALPHA FUND

              (OFFSHORE), LTD.

By:  

/s/ Scott D. Krase

   

Name:  Scott D. Krase

   

Title:  Authorized Signatory

LENDER:

OAK HILL CREDIT ALPHA FUND, LP

By:  

Oak Hill Credit Alpha GenPar, L.P.,

its General Partner

By:  

Oak Hill Credit Alpha MGP, LLC,

its General Partner

By:  

/s/ Scott D. Krase

   

Name:  Scott D. Krase

   

Title:  Authorized Signatory

LENDER:

OAK HILL SECURITIES FUND, L.P.

By:  

Oak Hill Securities GenPar, L.P.

its General Partner

By:  

Oak Hill Securities MGP, Inc.,

its General Partner

By:  

/s/ Scott D. Krase

   

Name:  Scott D. Krase

   

Title:  Authorized Signatory

LENDER:

OAK HILL SECURITIES FUND II, L.P.

By:  

Oak Hill Securities GenPar II, L.P.,

its General Partner

By:  

Oak Hill Securities MGP II, Inc.,

its General Partner

By:  

/s/ Scott D. Krase

   

Name:  Scott D. Krase

   

Title:  Authorized Signatory

LENDER:

CITIBANK, N.A.

By:  

/s/ Jason Trala

   

Name:  Jason Trala

   

Title:  Attorney-in-Fact

LENDER:

SHEPHERD INVESTMENTS INTERNATIONAL, LTD

By:  

/s/ Daniel J. McNaly

   

Name:  Daniel J. McNaly

   

Title:  Associate General Counsel

LENDER:

STARK TRADING

By:  

/s/ Daniel J. McNaly

   

Name:  Daniel J. McNaly

   

Title:  Associate General Counsel

LENDER:

GOLDENTREE LOAN OPPORTUNITIES I, LIMITED

By:  

GoldenTree Asset Management, L.P.

By:  

/s/ Thomas H. Shandell

   

Name:  Thomas H. Shandell

   

Title:  Partner

LENDER:

GOLDENTREE LOAN OPPORTUNITIES II, LIMITED

By:   GoldenTree Asset Management, L.P. By:  

/s/ Thomas H. Shandell

   

Name:  Thomas H. Shandell

   

Title:  Partner

LENDER:

BLACK DIAMOND INTERNATIONAL FUNDING, LTD

By:  

/s/ Alan Corkish

   

Name:  Alan Corkish

   

Title:  Director

LENDER:

BDC FINANCE L.L.C.

By:  

/s/ James J. Zenni, Jr.

   

Name:  James J. Zenni, Jr.

   

Title:  Director

LENDER:

COOKSMILL

By:  

/s/ John R.M. Campbell

   

Name:  John R.M. Campbell

   

Title:  Authorized Signatory

LENDER:

QP SFM CAPITAL HOLDINGS LIMITED

By:  

/s/ Jodye M. Anzalotta

   

Name:  Jodye M. Anzalotta

   

Title:  Attorney-in-Fact

LENDER:

ROYAL BANK OF CANADA

By:  

/s/ Suzanne Kaicher

   

Name:  Suzanne Kaicher

   

Title:  Attorney-in-Fact

LENDER:

SUNRISE PARTNERS LIMITED PARTNERSHIP

By:  

/s/ Michael J. Bemer

   

Name:  Michael J. Bemer

   

Title: Vice President

LENDER:

SPF CDO I

By:  

/s/ Edward A. Melo

   

Name:  Edward A. Melo

   

Title:  Authorized Signatory

LENDER:

FIELD POINT I, LTD.

By:  

/s/ Jeffrey A. Gelfand

   

Name:  Jeffrey A. Gelfand

   

Title:  Authorized Signatory

LENDER:

FIELD POINT II, LTD.

By:  

/s/ Jeffrey A. Gelfand

   

Name:  Jeffrey A. Gelfand

   

Title:  Authorized Signatory

 

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FINANCING AGREEMENT

 

Dated as of January 31, 2005,

 

by and among

 

OGLEBAY NORTON COMPANY

 

and

 

CERTAIN SUBSIDIARIES OF OGLEBAY NORTON COMPANY,

as Borrowers,

 

CERTAIN SUBSIDIARIES OF OGLEBAY NORTON COMPANY LISTED AS

GUARANTORS ON THE SIGNATURE PAGES HERETO,

as Guarantors,

 

THE LENDERS FROM TIME TO TIME PARTY HERETO,

as Lenders,

 

WELLS FARGO FOOTHILL, INC.,

as Administrative Agent,

 

JPMORGAN CHASE BANK and BANK OF AMERICA, N.A.,

as Documentation Agents,

 

and

 

SILVER POINT FINANCE, LLC,

as Collateral Agent, Syndication Agent and Lead Arranger

 

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

 

TABLE OF CONTENTS

 

          Page

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

ARTICLE I DEFINITIONS; CERTAIN TERMS    2

Section 1.01

   Definitions    2

Section 1.02

   Terms Generally    38

Section 1.03

   Accounting and Other Terms    39

Section 1.04

   Time References    39 ARTICLE II THE LOANS    39

Section 2.01

   Commitments    39

Section 2.02

   Making the Loans    40

Section 2.03

   Repayment of Loans; Evidence of Debt    43

Section 2.04

   Interest    44

Section 2.05

   Reduction of Commitment; Prepayment of Loans    45

Section 2.06

   Fees.    52

Section 2.07

   Securitization    52

Section 2.08

   Taxes    53

Section 2.09

   LIBOR Not Determinable; Illegality or Impropriety    55

Section 2.10

   Indemnity    56

Section 2.11

   Continuation and Conversion of Loans    57 ARTICLE III LETTER OF CREDIT
ACCOMMODATIONS    57

Section 3.01

   Letter of Credit Guaranty    57

Section 3.02

   Participations    60

Section 3.03

   Letter of Credit Accommodations    61 ARTICLE IV [Intentionally Omitted.]   
62 ARTICLE V FEES, PAYMENTS AND OTHER COMPENSATION    62

Section 5.01

   Audit and Collateral Monitoring Fees    62

Section 5.02

   Payments; Computations and Statements    62

Section 5.03

   Sharing of Payments, Etc    63

Section 5.04

   Apportionment of Payments    64

Section 5.05

   Increased Costs and Reduced Return    66

Section 5.06

   Joint and Several Liability of the Borrowers    68 ARTICLE VI CONDITIONS TO
LOANS    69

Section 6.01

   Conditions Precedent to Effectiveness    69

Section 6.02

   Conditions Precedent to All Loans and Letter of Credit Accommodations    75
ARTICLE VII REPRESENTATIONS AND WARRANTIES    76

Section 7.01

   Representations and Warranties    76

 

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ARTICLE VIII COVENANTS OF THE LOAN PARTIES

   85

Section 8.01

   Affirmative Covenants    85

Section 8.02

   Negative Covenants    97

Section 8.03

   Financial Covenants    105 ARTICLE IX MANAGEMENT, COLLECTION AND STATUS OF
ACCOUNTS AND OTHER COLLATERAL    107

Section 9.01

   Cash Management    107

Section 9.02

   Collateral Custodian    109

Section 9.03

   Collateral Reporting    109

Section 9.04

   Accounts Covenants    111

Section 9.05

   Inventory Covenants    111 ARTICLE X EVENTS OF DEFAULT    112

Section 10.01

   Events of Default    112 ARTICLE XI AGENTS    117

Section 11.01

   Appointment    117

Section 11.02

   Nature of Duties    118

Section 11.03

   Rights, Exculpation, Etc    118

Section 11.04

   Reliance    119

Section 11.05

   Indemnification    119

Section 11.06

   Agents Individually    119

Section 11.07

   Successor Agent    120

Section 11.08

   Collateral Matters    120

Section 11.09

   Agency for Perfection    122

Section 11.10

   Actions in Concert    122

Section 11.11

   Agents and their Affiliates and their Designated Entities    122 ARTICLE XII
GUARANTY    123

Section 12.01

   Guaranty    123

Section 12.02

   Guaranty Absolute    123

Section 12.03

   Waiver    124

Section 12.04

   Continuing Guaranty; Assignments    124

Section 12.05

   Subrogation    125

Section 12.06

   Intercompany Indebtedness    125 ARTICLE XIII MISCELLANEOUS    127

Section 13.01

   Notices, Etc    127

Section 13.02

   Amendments, Etc    128

Section 13.03

   No Waiver; Remedies, Etc    130

Section 13.04

   Expenses; Taxes; Attorneys’ Fees    130

Section 13.05

   Right of Set-off    131

Section 13.06

   Severability    131

Section 13.07

   Assignments and Participations    131

Section 13.08

   Counterparts    135

Section 13.09

   GOVERNING LAW    135

 

- ii -

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Section 13.10

   CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE    135

Section 13.11

   WAIVER OF JURY TRIAL, ETC    136

Section 13.12

   Consent by the Agents and Lenders    136

Section 13.13

   No Party Deemed Drafter    136

Section 13.14

   Reinstatement; Certain Payments    136

Section 13.15

   Indemnification    137

Section 13.16

   Records    138

Section 13.17

   Binding Effect    138

Section 13.18

   Interest    138

Section 13.19

   Confidentiality    139

Section 13.20

   Integration    140

Section 13.21

   The Parent as Agent for Borrowers    140

Section 13.22

   Press Releases and Related Matters    141

 

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SCHEDULES AND EXHIBITS

 

Schedule 1.01(A)

   Lenders and Lenders’ Commitments

Schedule V-1

   Vessels

Schedule 3.03(d)

   Existing Letters of Credit

Schedule 6.01(e)(x)

   Tax Status

Schedule 6.01(e)(xi)

   Foreign Qualification Status

Schedule 7.01(e)

   Subsidiaries

Schedule 7.01(f)

   Litigation; Commercial Tort Claims

Schedule 7.01(i)

   ERISA

Schedule 7.01(o)

   Real Property

Schedule 7.01(r)

   Environmental Matters

Schedule 7.01(s)

   Insurance

Schedule 7.01(u)

   Bank Accounts

Schedule 7.01(v)

   Intellectual Property

Schedule 7.01(w)

   Material Contracts

Schedule 7.01(y)

   Employee and Labor Matters

Schedule 7.01(z)

   Customers and Suppliers

Schedule 7.01(aa)

   Name; Jurisdiction of Organization; Organizational ID Number; Chief Place of
Business; Chief Executive Office; FEIN

Schedule 7.01(bb)

   Collateral Locations

Schedule 7.01(gg)

   Guarantors

Schedule 8.02(a)

   Existing Liens

Schedule 8.02(b)

   Existing Indebtedness

Schedule 8.02(c)

   Permitted Dispositions

Schedule 8.02(e)

   Existing Investments

Schedule 8.02(g)

   Projected Consolidated EBITDA

Exhibit A

   Form of Guaranty

Exhibit B

   Form of Notice of Borrowing

Exhibit C

   Form of Borrowing Base Certificate

Exhibit D

   Form of Contribution Agreement

Exhibit E

   Form of Assignment and Acceptance

Exhibit F-1

   Form of Confirmation Order

Exhibit F-2

   Plan of Reorganization

Exhibit G

   Form of Pledge Agreement

Exhibit H

   Form of Security Agreement

 

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