EXHIBIT 10.1    

 

AMENDED AND RESTATED
CREDIT AGREEMENT

 

by and among

 

EMPIRE RESOURCES, INC.
as Borrower,

 

[tex10-1logo.jpg]

 

COÖPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A., “RABOBANK
NEDERLAND”, NEW YORK BRANCH,
as Lead Arranger, Agent,

Swing Line Bank and an Issuing Bank

 

and

 

BNP PARIBAS, as Syndication Agent

 

and

 

the banks party hereto

 

June 19, 2014

   

 

 

 

 

Table of Contents

 

    Page       Section 1.  Definitions and Accounting Matters 1       1.01
Certain Defined Terms 1 1.02 Accounting Terms and Determinations 24 (a) GAAP
Consistently Applied 24 (b) No Change to Fiscal Year 24 (c) Financial Covenants
Determined on a Consolidated Basis 25 (d) Terms Generally 25 1.03 Types of Loans
25       Section 2.  Commitments, Loans, Notes and Prepayments 25       2.01
Loans 25 (a) Revolving Loans 25 (b) Intentionally omitted 25 (c) Swing Line
Commitment; Banks’ Participation 26 (d) Repayment of Swing Line Loans; Funding
of Participations 26 2.02 Borrowings 27 2.03 Letters of Credit 27 (a) Letter of
Credit Request Procedure 27 (b) Bank Participation in Letters of Credit 28 (c)
Drawings on Letters of Credit; Reimbursement 28 (d) Borrowing to Fund
Reimbursement 28 (e) Funding of Bank Participation in Letters of Credit 28 (f)
Payments Received by the Issuing Banks 28 (g) (i)  Letter of Credit Fees 29 (h)
Letter of Credit Liability Accounting 29 (i) Conditions to Issuance 29 (j)
Default Interest 30 (k) Modifications to Letters of Credit 30 (l) Company
Indemnification 30 (m) Obligations Absolute 31 (n) Exculpation 31 (o)
Auto-Renewal Letters of Credit 32 (p) Issuance Caps 32 (q) Agent Consent 32 (r)
Successor Issuing Banks 33 (s) UCP; ISP 33 2.04 Intentionally Omitted 33 2.05
Changes of the Commitment 33 (a) Revolving Credit Commitment Termination Date 33
(b) Optional Termination 34 (c) No Reinstatement 34 (d) Increases in Revolving
Loan Commitments 34 2.06 Commitment Fee 35 2.07 Lending Offices 35 2.08 Several
Obligations; Remedies Independent 35

 

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Table of Contents

(continued)

 

    Page       2.09 Evidence of Indebtedness 35 (a) Maintenance of Loan Accounts
by Banks 35 (b) Maintenance of Loan Accounts by the Agent 36 (c) Effect of
Entries 36 (d) Promissory Notes 36 2.10 Optional Prepayments and Conversions or
Continuations of Loans 36 2.11 Mandatory Prepayments 36 (a) Borrowing Base 36
(b) Cover for Letter of Credit Liabilities 37       Section 3.  Payments of
Principal and Interest 37       3.01 Repayment of Loans 37 3.02 Interest 37 (a)
Revolving Loans 37 (b) Swing Line Loans 37 (c) Post Default Interest 38 (d)
Payment of Interest 38       Section 4.  Payments; Computations; Etc 38      
4.01 Payments 38 (a) Payments Generally 38 (b) Payments to the Banks 38 (c)
Payments on a Non-Business Day 38 4.02 Computations 38 4.03 Pro Rata Treatment
39 4.04 Minimum Amounts 39 4.05 Certain Notices 39 4.06 Non-Receipt of Funds by
the Agent 40 4.07 Sharing of Payments, etc 41 (a) Set off 41 (b) Sharing of
Payments on Loan Obligations 41 (c) Sharing of Benefits of Secured Claim 41 4.08
Application of Proceeds of Collateral and Subsidiary Guarantee 41 4.09 Noncash
Proceeds 42 4.10 Return of Proceeds 42 4.11 Notice of Amount of Obligations 42
4.12 Defaulting Banks 43       Section 5.  Yield Protection, Etc 46       5.01
Additional Costs 46 5.02 Inability to Determine Interest Rate 48 5.03 Illegality
48 5.04 Break Funding Compensation 49 5.05 Intentionally omitted 49 5.06 Taxes
49

 

ii

 

 

Table of Contents

(continued)

 

    Page       (a) Payments Free of Taxes 49 (b) Payment of Other Taxes by the
Company 49 (c) Indemnification by the Company 49 (d) Indemnification by the
Banks 50 (e) Evidence of Payments 50 (f) Status of Banks 50       Section
6.  Conditions Precedent 52       6.01 Obligations to Extend Credit 52 (a)
Executed Counterparts 52 (b) Existing Credit Agreement 52 (c) Intercreditor
Agreement 52 (d) Governing Documents 53 (e) Good Standing 53 (f) Officer’s
Certificate 53 (g) Borrowing Base Certificate 53 (h) Opinion of Counsel to the
Company 53 (i) Security Documents 53 (j) Insurance 54 (k) No Material Adverse
Effect 54 (l) Fees and Expenses 54 (m) Subordination Agreement 54 (n) Request to
Honor Oral and Electronic Instructions 54 (o) Other Documents 54 6.02 Initial
and Subsequent Extensions of Credit 54       Section 7.  Representations and
Warranties 55       7.01 Corporate Existence 55 7.02 Financial Condition 55 7.03
Litigation 55 7.04 No Breach 55 7.05 Action 55 7.06 Approvals 56 7.07 Use of
Credit 56 7.08 ERISA 56 7.09 Taxes 56 7.10 Indebtedness and Investments 56 (a)
Indebtedness 56 (b) Investments 56 7.11 True and Complete Disclosure 56 7.12
Subsidiaries 57 7.13 Property 57 7.14 Compliance with Laws and Agreements 57
7.15 Investment Company Status 57 7.16 OFAC Money Laundering Representations 57

 

iii

 

 

Table of Contents

(continued)

 

    Page       7.17 Insurance 58 7.18 Solvency 58 7.19 Intentionally omitted 59
7.20 Security Documents 59 7.21 Environmental Matters 59       Section
8.  Covenants of the Company 60       8.01 Financial Statements, Etc 60 (a)
Quarterly Financial Statements 60 (b) Annual Financial Statements 60 (c) ERISA
60 (d) Borrowing Base Certificate 60 (e) Collateral Audit 61 (f) Shareholder
Material 62 (g) Notice of Default 62 (h) Uncommitted Credit Agreement Documents
62 (i) Other Information 62 8.02 Litigation 62 8.03 Existence, Etc 62 (a)
Existence 62 (b) Compliance with Laws 63 (c) Payment of Obligations 63 (d)
Maintain Property 63 (e) Books and Records 63 (f) Inspection 63 8.04 Insurance
63 8.05 Prohibition of Fundamental Changes 63 8.06 Limitation on Liens 64 8.07
Indebtedness 65 8.08 Investments 66 8.09 Leverage Ratio 67 8.10 Net Working
Capital 67 8.11 No Net Loss 67 8.12 Lines of Business 67 8.13 Dividend Payments
67 8.14 Use of Proceeds 67 8.15 Subordinated Debt 67 8.16 Intentionally omitted
68 8.17 Additional Guarantors; Pledge of Additional Subsidiaries 68 (a)
Subsidiary Guarantee 68 (b) Secured Documents 68 (c) Corporate Authorization 68
8.18 Intentionally omitted 68 8.19 Amendment to Organizational Documents 69 8.20
Capital Expenditures 69

 

iv

 

 

Table of Contents

(continued)

 

    Page       8.21 Transactions with Affiliates 69 8.22 Environmental Laws 69
8.23 Take or Pay Contracts 69 8.24 Limitation on Dividend Clause and Negative
Pledge Clauses 69 8.25 Limitation on Sales and Leasebacks 70 8.26 Accounting
Changes 70 8.27 Borrowing Base 70 8.28 Deposit Accounts 70 8.29 Storage
Facilities 70 8.30 Sanctions 70       Section 9.  Events of Default 71      
9.01 Events of Default 71 (a) Payment Default 71 (b) Cross Default 71 (c)
Representations and Warranties 71 (d) Covenant Defaults 71 (e) Failure to Pay
Debts 71 (f) Voluntary Insolvency Proceedings 72 (g) Involuntary Insolvency
Proceedings 72 (h) Judgment Default 72 (i) ERISA Events 72 (j) Change of Control
72 (k) Security Documents; Basic Documents 73 (l) Subordination Provisions 73
(m) Quad Avenue Loan Agreement 73 (n) Uncommitted Credit Agreement Disclosure 73
9.02 Cover for Contingent Obligations 73       Section 10.  The Agent 74      
10.01 Appointment, Powers and Immunities 74 10.02 Reliance by Agent 74 10.03
Defaults 74 10.04 Rights as a Bank 75 10.05 Indemnification 75 10.06
Non-Reliance on Agent and Other Banks 75 10.07 Failure to Act 76 10.08
Resignation or Removal of Agent 76 10.09 Agency Fee 76 10.10 Consents under
Other Basic Documents 76 10.11 Pendency of Insolvency 76 (a) Filing Claims 77
(b) Collection of Funds 77 10.12 Permitted Release of Collateral 77 (a)
Automatic Release 77

 

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Table of Contents

(continued)

 

    Page       (b) Written Release 77 (c) Other Authorized Release and
Subordination 77 10.13 Powers and Immunities of Fronting Banks 78 10.14
Perfection by Possession and Control; Deposit Accounts 78 10.15 Bank Affiliates
Rights 79 10.16 Other Agents 79 10.17 Intercreditor Agreement 79       Section
11.  Miscellaneous 79       11.01 Waiver 79 11.02 Notices 79 (a) General Address
for Notices 79 (b) Electronic Communications 80 (c) Electronic Transmission
System 80 (d) Communications Through the Platform 80 11.03 Expenses, etc 80
11.04 Amendments, Etc 81 11.05 Successors and Assigns 81 11.06 Assignments and
Participations 83 (a) Assignments by Banks 83 (b) Maintenance of Register by the
Agent 84 (c) Effectiveness of Assignments 84 (d) Participations 84 (e)
Limitations on Rights of Participants 84 (f) Certain Pledges 84 (g) No
Assignments to the Company or Affiliates 85 11.07 Survival 85 11.08 Captions 85
11.09 Counterparts 85 11.10 Governing Law; Submission to Jurisdiction 85 11.11
Waiver of Jury Trial 86 11.12 Severability 86 11.13 Independence of Covenants 86
11.14 PATRIOT ACT PROVISION 86 11.15 No Fiduciary Relationship 86 11.16
Construction 86 11.17 Interest Rate Limitation 86 (a) Limitation to Maximum
Rate; Recapture 86 (b) Cure Provisions 87 11.18 Waiver of Consequential Damages,
etc 87 11.19 Existing Obligations 87 11.20 Acknowledgement of Security Interest
and Basic Documents; Reaffirmation of Account Control Agreements 87 11.21 Basic
Documents 88 11.22 Acknowledgments, Amendment and Restatement 88

 

vi

 

 

Table of Contents

(continued)

 

      Page         EXHIBIT A – Form of Note   EXHIBIT B – Form of Borrowing Base
Certificate   EXHIBIT C – Form of Security Agreement   EXHIBIT D – Form of
Subsidiary Guarantee   EXHIBIT E – Form of Assignment and Assumption   EXHIBIT F
– Form of Increase and New Bank Agreement   EXHIBIT G – Form of Compliance
Certificate   EXHIBIT H – Intentionally omitted   EXHIBIT I – Form of Borrowing
Request   EXHIBIT J – Form of Notice of Prepayment, Conversion and Continuation
  EXHIBIT K – Subordination Terms   EXHIBIT L – Intentionally omitted   EXHIBIT
M — Form of Intercreditor Agreement           SCHEDULE A – Commitments  
SCHEDULE I – Indebtedness   SCHEDULE II – Investments   SCHEDULE III –
Subsidiaries   SCHEDULE IV — Limitations on Dividend Clause and Negative Pledge
Clauses   SCHEDULE V - Credit Insurance  

 

vii

 

 

AMENDED AND RESTATED CREDIT AGREEMENT

 

THIS AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”) is dated as of
June 19, 2014, by and among EMPIRE RESOURCES, INC., a corporation duly organized
and validly existing under the laws of the State of Delaware (the “Company”),
COÖPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A., “RABOBANK NEDERLAND”, NEW
YORK BRANCH (“Rabobank”), as agent for the Secured Parties defined below (in
such capacity, together with its successors in such capacity, the “Agent”), BNP
Paribas, as syndication agent (in such capacity, together with its successors in
such capacity, the “Syndication Agent”) and each of the lenders that is a
signatory hereto identified under the caption “Banks” on the signature pages
hereto (including Rabobank) or that, pursuant to Section 2.05(d) or 11.06(b)
hereof shall become a “Bank” hereunder (individually, a “Bank”, and
collectively, the “Banks”).

 

RECITALS:

 

The Company, certain of the Banks party hereto and the Agent are parties to the
Credit Agreement dated as of April 28, 2011 (as amended, supplemented or
otherwise modified from time to time, the “Existing Credit Agreement”);

 

The Company has requested, and the Banks party hereto have agreed, to amend and
restate the Existing Credit Agreement on, and subject to, the terms and
conditions set forth herein.

 

Therefore, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree that the Existing Credit
Agreement is amended and restated in its entirety as set forth above and as
follows:

 

Section 1.

Definitions and Accounting Matters.

 

1.01         Certain Defined Terms. As used herein, the following terms have the
following meanings (all terms defined in this Section 1.01 or in other
provisions of this Agreement in the singular to have the same meanings when used
in the plural and vice versa):

 

“6900 Quad Avenue, LLC” means 6900 Quad Avenue, LLC, a Delaware limited
liability company.

 

“Account Control Agreement” means each agreement entered into among the Agent,
the Company and a securities intermediary, commodity intermediary or bank, under
which the Agent has been granted “control” over a securities, commodities or
deposit account, as applicable, and the right to issue a notice of exclusive
control upon the occurrence and during the continuance of an Event of Default,
in form and substance reasonably acceptable to the Agent. For the avoidance of
doubt, the agreement set forth in Section 10.14 in respect of Obligor Accounts
shall be an Account Control Agreement.

 

“Act” has the meaning assigned to such term in Section 11.14 hereof.

 

“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Agent which will be prepared by the applicable Bank and
delivered to the Agent.

 

“Advance Date” has the meaning assigned to such term in Section 4.06 hereof.

 

 

 

 

“Affiliate” means as to any Person, any other Person that directly or indirectly
controls, or is under common control with, or is controlled by, such Person and,
if such Person is an individual, any member of the immediate family (including
parents, spouse, children and siblings) of such individual and any trust whose
principal beneficiary is such individual or one or more members of such
immediate family and any Person who is controlled by any such member or trust.
As used in this definition, “control” (including, with its correlative meanings,
“controlled by” and “under common control with”) means possession, directly or
indirectly, of power to direct or cause the direction of management or policies
(whether through ownership of securities or partnership or other ownership
interests, by contract or otherwise), provided that, in any event, any Person
that owns directly or indirectly securities having 5% or more of the voting
power for the election of directors or other governing body of a corporation or
5% or more of the partnership or other ownership interests of any other Person
(other than as a limited partner of such other Person) will be deemed to control
such corporation or other Person. Notwithstanding the foregoing, no individual
shall be an Affiliate solely by reason of his or her being a director, officer
or employee of the Company.

 

“Agent Parties” has the meaning assigned to such term in Section 11.02(c)
hereof.

 

“Agreement” has the meaning assigned to such term in the Preamble hereto.

 

“Anti-Terrorism Laws” has the meaning assigned to such term in Section 7.16
hereof.

 

“Applicable Lending Office” means, for each Bank and for each Type of Loan, the
“Lending Office” of such Bank (or of an affiliate of such Bank) designated from
time to time by such Bank for such Type of Loan as the office by which its Loans
of such Type are to be made and maintained.

 

“Applicable Margin” means (i) eighty-five hundredths of one percent (0.85%) as
it relates to the Base Rate, (ii) two and thirty-five hundredths of one percent
(2.35%) as it relates to the Eurodollar Rate and (iii) with respect to Swing
Line Loans, two and thirty-five hundredths of one percent (2.35%) or such other
percentage agreed to by the Company and the Swing Line Bank from time to time.

 

“Approved Fund” means (a) a CLO (as defined below) and (b) with respect to any
Bank that is a fund which invests in whole or in material part in commercial
bank loans and similar extensions of credit and is administered or managed by
the same investment adviser as such Bank or by an Affiliate of such investment
adviser. As used herein, the term “CLO” means any entity (whether a corporation,
partnership, or trust), other than an entity owned and operated for the primary
benefit of a natural person or relative(s) thereof, that is engaged in making,
purchasing, holding or otherwise investing in whole or in material part in
commercial bank loans and similar extensions of credit in the ordinary course of
its business and is administered or managed by a Bank or an Affiliate of a Bank.

 

“Assignment and Assumption” means an Assignment and Assumption entered into by a
Bank and an assignee (with the consent of any party whose consent is required by
Section 11.05) and accepted by the Agent, substantially in the form of Exhibit E
or any other form approved by the Agent and the Company.

 

“Assignment of Claims Act” means the Federal Assignment of Claims Act of 1940,
as amended from time to time (31 U.S.C. §3723 et seq.), and any similar state or
local laws, as the same now exist or may from time to time hereafter be amended,
modified, recodified or supplemented, together with all rules, regulations or
interpretations related thereto.

 

“Australia” means the Commonwealth of Australia.

 

2

 

 

“Australian Receivables” means, as at any date, the aggregate amount of all
Receivables at such date payable to the Company that would constitute Tier I
Eligible Receivables but for the fact that the principal place of business of
the relevant account debtor is in Australia and/or such Receivables are payable
in lawful money of Australia, provided that in no event shall the aggregate
amount of the Australian Receivables included in the Borrowing Base (after
giving effect to the applicable advance rate) at any time exceed an amount equal
to 10% of the Borrowing Base.

 

“Auto-Renewal Letter of Credit” has the meaning assigned to such term in Section
2.03(o) hereof.

 

“Bank” has the meaning set forth in the introductory paragraph to this
Agreement. Unless the context otherwise requires, the term “Bank” includes each
Fronting Bank.

 

“Bankruptcy Code” means the Federal Bankruptcy Code of 1978, as amended from
time to time.

 

“Base Rate” means for any day, a rate per annum equal to the greatest of (a) the
rate of interest published in The Wall Street Journal as the “prime rate” for
such day and if The Wall Street Journal does not publish such rate on such day
then such rate as most recently published prior to such day, (b) the Federal
Funds Rate in effect on such day plus 1/2 of 1% and (c) the Eurodollar Rate that
would be applicable in respect of a proposed Eurodollar Loan made two days after
such date with an Interest Period of one month, plus 1.00%. Each change in any
interest rate provided for herein based upon the Base Rate resulting from a
change in the Base Rate shall take effect at the time of such change in the Base
Rate.

 

“Base Rate Loans” means Loans that bear interest at rates based upon the Base
Rate.

 

“Basel III” means all regulations, requests, rules, guidelines or directives
promulgated by the Bank for International Settlements, the Basel Committee on
Banking Supervision (or any successor or similar authority) or any United States
or foreign regulatory authorities, in each case pursuant to “Basel III”, as
amended from time to time.

 

“Basic Documents” means, collectively, this Agreement, the Notes, the Letter of
Credit Documents, the Security Documents and all other documentation now or
hereafter executed and/or delivered pursuant to the express terms of any of the
foregoing.

 

“Borrowing Base” means, as at any date, the sum of (a) minus (b) minus (c)
calculated without duplication as of such date where:

 

(a)          equals the sum of:

 

(i)          if and to the extent requested by the Company, 85% of Eligible Net
Liquidating Value of Brokerage Accounts; plus

 

(ii)         90% of the aggregate amount of Tier I Eligible Receivable; plus

 

(iii)        80% of the aggregate amount of Tier II Eligible Receivables; plus

 

(iv)        70% of the aggregate amount of Australian Receivables; plus

 

3

 

 

(v)         80% of the aggregate amount of Eligible Inventory Ordered Under L/C;
plus

 

(vi)        80% of the aggregate amount of Eligible Inventory; plus

 

(vii)       65% of the aggregate amount of Eligible Unsold Inventory; plus

 

(viii)      100% of the aggregate amount of Pledged Cash, and

 

(b)          equals 100% of the aggregate amount of reserves established at any
time and from time to time on or after the Closing Date by the Required Banks,
which reserves are determined by the Required Banks to be necessary to protect
the Banks’ interests, such determination to be made in the Required Banks’
judgment, in good faith and based on information which, in its judgment,
supports such determination. Reserves established under this clause (b) may
include, without limitation, reserves for: (i) past due rent at any location
leased or owned by the Company at which Inventory is located unless a landlord
and/or mortgagee lien waiver or subordination has been obtained, (ii) shipping
costs with respect to any Inventory held by a third party shipping company and
(iii) past due warehouse and other storage charges with respect to any Inventory
held at third party warehouses. Any establishment, reduction or elimination of
reserves under this clause (b) shall be effective on the date the Company
receives Agent’s written notice of the amount thereof, provided that the Agent
shall deliver notice to the Company of any such establishment, reduction or
elimination of reserves under this clause (b) promptly after the Required Banks
make a determination in writing (which shall have been delivered to the Agent)
thereof, and

 

(c)          100% of the amount of Indebtedness secured by Permitted Borrowing
Base Liens, which is past due (after giving effect to any grace period) and
owing.

 

The Borrowing Base shall be determined at any time based on the Borrowing Base
Certificate or Interim Borrowing Base Certificate, as applicable, then most
recently delivered or, if acceptable to the Agent, as otherwise certified by the
Company to the Agent and the Banks, as reduced or increased after giving effect
to any reallocation pursuant to Section 2.3 of the Intercreditor Agreement.
Receivables denominated in a currency other than Dollars shall be reported in
the Borrowing Base based on the U.S. Dollar Equivalent thereof determined as of
the date of the Borrowing Base calculation.

 

“Borrowing Base Certificate” means a certificate of the chief financial officer
or other authorized officer with responsibility for financial matters of the
Company, substantially in the form of Exhibit B hereto and appropriately
completed.

 

“Borrowing Request” has the meaning assigned to such term in Section 2.02
hereof.

 

“Business Day” means (a) any day on which commercial banks are not authorized or
required to close in New York City and (b) if such day relates to a borrowing of
a payment or prepayment of principal of or interest on a Conversion of or into,
or an Interest Period for, a Eurodollar Loan or a notice by the Company with
respect to any such borrowing, payment, prepayment, Conversion or Interest
Period, or the determination of the Eurodollar Rate, any day on which dealings
in Dollar deposits are carried out in the London interbank market.

 

“Capital Expenditures” means, for any period with respect to any Person, all
expenditures made by such Person during such period that, in accordance with
GAAP, should be classified as a capital expenditure including, without
limitation, the aggregate amount of Capital Lease Obligations incurred during
such period, provided that Capital Expenditures shall not include any amount of
insurance proceeds that such Person reinvests in the business of such Person,
including investments in replacement assets.

 

4

 

 

“Capital Lease Obligations” means, for any Person, all obligations of such
Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) Property to the extent such obligations are required
to be classified and accounted for as a capital lease on a balance sheet of such
Person under GAAP, and, for purposes of this Agreement, the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP.

 

“Capital Securities” means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, all
membership interests in a limited liability company, all partnership interests
in a limited partnership, or any and all similar ownership interests in a Person
(other than a corporation, limited liability company or limited partnership) and
any and all warrants, rights or options to purchase any of the foregoing.

 

“Cash Collateral” means cash in Dollars that has been transferred to the
Collateral Account to secure repayment of the Obligations.

 

“Cash Collateralize” means to pledge and deposit with or deliver to the Agent,
for the benefit of the Agent and the Banks, Cash Collateral pursuant to
documentation in form and substance reasonably satisfactory to the Agent.

 

“Closing Date” means the date on which this Agreement becomes effective pursuant
to satisfaction or waiver (pursuant to Section 11.04 hereof) of the conditions
precedent set forth in Section 6.01.

 

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

 

“Collateral” means the property over which a Lien has been granted to the Agent
pursuant to the Security Documents.

 

“Collateral Account” means a segregated collateral account or accounts
maintained by the Agent on behalf of the Secured Parties, which shall be under
the sole dominion and control of, and a first priority perfected lien of
(subject to the terms of the Intercreditor Agreement), the Agent.

 

“Commitment” means, as the context may require, the Revolving Loan Commitment or
the Swing Line Commitment.

 

“Commitment Period” means the period from the Closing Date to but not including
the Revolving Credit Commitment Termination Date, or such earlier date on which
the Commitments shall terminate as provided herein.

 

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

 

“Communications” has the meaning assigned to such term in Section 11.02(a)
hereof.

 

“Company” has the meaning assigned to such term in the preamble hereof.

 

“Compliance Certificate” has the meaning assigned to such term in the last
sentence of Section 8.01 hereof.

 

5

 

 

“Consolidated Current Assets” means, at any time with respect to any Person, all
assets of such Person and its Subsidiaries that, in accordance with GAAP, could
be classified as current assets on a consolidated balance sheet of such Person
and its Subsidiaries (other than investments in and receivables and other
obligations from Subsidiaries, other Affiliates, officers, employees or
directors of such Person).

 

“Consolidated Current Liabilities” means, at any time with respect to any
Person, all liabilities of such Person and its Subsidiaries that, in accordance
with GAAP, could be classified as current liabilities on a consolidated balance
sheet of such Person and its Subsidiaries.

 

“Consolidated Net Income” means, for any period, the net earnings (or loss)
after taxes of the Company and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in conformity with GAAP.

 

“Continue”, “Continuation” and “Continued” shall refer to the continuation
pursuant to Section 2.10 hereof of a Eurodollar Loan from one Interest Period to
the next Interest Period.

 

“Contract Rate” has the meaning assigned to such term in Section 11.17(a)
hereof.

 

“Convert”, “Conversion” and “Converted” shall refer to a conversion pursuant to
Section 2.10 hereof of one Type of Loans into another Type of Loans, which may
be accompanied by the transfer by a Bank (at its sole discretion) of a Loan from
one Applicable Lending Office to another.

 

“Convey” means to convey, sell, lease, assign, transfer or otherwise dispose of
Property. The terms “Conveyance” and “Conveyed” shall have a correlative
meaning.

 

“Credit Exposure” means, at any time, the aggregate principal amount of all
Loans and Letter of Credit Liabilities outstanding at such time. The Credit
Exposure of any Bank at any time shall be the sum of such Bank’s Revolving Loans
and its Fronting Exposure at such time.

 

“Credit Insured Receivable” means the portion of any Receivable which is insured
under a credit insurance policy (a) set forth on Schedule V hereto, including
any extensions or renewals thereof, or (b) that is reasonably acceptable to the
Required Banks (under which (in the case of clauses (a) and (b)) in the event of
non-payment by the applicable account debtor, the credit insurer would be
obligated to pay the unpaid Receivable up to the limits set forth in such policy
subject only to deductibles, co-insurance and the applicable waiting periods
under such policy and no other defenses, set-offs or deductions) issued by a
credit insurer that is reasonably acceptable to the Required Banks, and as to
which the Agent is named as loss payee.

 

“Default” means an Event of Default or any event or circumstance that solely
with the giving of notice or lapse of time or both would become an Event of
Default.

 

6

 

 

“Defaulting Bank” means: (a) a Bank that has defaulted on its obligation to fund
Loans hereunder or make any other payment required hereby for two (2) or more
Business Days unless such Bank notifies the Agent and the Company in writing
that such failure is the result of such Bank’s determination that one or more
conditions precedent to funding (each of which conditions precedent, together
with any applicable Default or Event of Default, shall be specifically
identified in such writing) has not been satisfied; (b) a Bank that has had an
involuntary proceeding commenced or an involuntary petition filed seeking (i)
liquidation, reorganization or other relief in respect of such Bank or its
parent or its or its parent’s debts, or of a substantial part of its or its
parent’s assets, under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar Law now or hereafter in effect or (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for such Bank or its parent or for a substantial part of its or its parent’s
assets; (c) a Bank that shall have or whose parent shall have (i) voluntarily
commenced any proceeding or filed any petition seeking liquidation,
reorganization or other relief under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar Law now or hereafter in effect, (ii)
consented to the institution of, or fail to contest in a timely and appropriate
manner, any proceeding or petition described in clause (b) of this definition,
(iii) applied for or consented to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for it or a substantial
part of its assets, (iv) filed an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) made a general assignment
for the benefit of creditors or (vi) taken any action for the purpose of
effecting any of the foregoing; (d) a Bank that has, for two (2) or more
Business Days, failed to confirm in writing to the Agent, in response to a
written request of the Agent or the Company, that it will comply with its
funding obligations under this Agreement unless such Bank notifies the Agent and
the Company in writing that such failure is the result of such Bank’s
determination that one or more conditions precedent to funding (each of which
conditions precedent, together with any applicable Default or Event of Default,
shall be specifically identified in such writing) has not been satisfied; or (e)
has notified the Agent or the Company, or has made a public statement to the
effect, that it does not intend to comply with its funding obligations under
this Agreement, or has defaulted on its obligation to fund generally under any
other loan agreement, credit agreement or other financing agreement in which it
commits to extend credit (unless such writing or public statement relates to
such Bank’s obligation to fund a Loan hereunder and states that such position is
based on such Bank’s determination that a condition precedent to funding (which
condition precedent, together with any applicable Default or Event of Default,
shall be specifically identified in such writing or public statement) cannot be
satisfied); provided that a Bank shall not be a Defaulting Bank solely by virtue
of the ownership or acquisition of any equity interest in such Bank or any
direct or indirect parent company thereof by a Governmental Authority so long as
such ownership interest does not result in or provide such Bank with immunity
from the jurisdiction of courts within the United States or from the enforcement
of judgments or writs of attachment on its assets or permit such Bank (or such
Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts
or agreements made with such Bank.

 

“Defaulting Bank Period” means any period during which a Bank shall be a
Defaulting Bank.

 

“Deposit Obligations” means all obligations, indebtedness, and liabilities of
the Company or any Subsidiary, or any one of them, to any Bank or any Affiliate
of any Bank arising pursuant to any deposit, lock box, automated clearing house
or cash management arrangements entered into by any Bank or any Affiliate of any
Bank with the Company or any Subsidiary, whether now existing or hereafter
arising, whether direct, indirect, related, unrelated, fixed, contingent,
liquidated, unliquidated, joint, several, or joint and several, including the
obligation, indebtedness, and liabilities of the Company or any Subsidiary, or
any one of them, to repay any credit extended in connection with such
arrangements, interest thereon, and all reasonable fees, costs, and expenses
(including reasonable attorneys’ fees and expenses) provided for in the
documentation executed in connection therewith. The term “Deposit Obligations”
includes any and all post-petition interest and expenses (including attorneys’
fees) whether or not allowed under any bankruptcy, insolvency, or other similar
Law.

 

“Dividend Payment” means dividends (in cash, Property or obligations) on, or
other payments or distributions on account of, or the setting apart of money for
a sinking or other analogous fund for, or the purchase, redemption, retirement
or other acquisition of, any Capital Securities of the Company or any of its
Subsidiaries, but excluding dividends payable solely in shares of common stock
of the Company.

 

7

 

 

“Dodd-Frank Act” means the Dodd-Frank Wall Street Reform and Consumer Protection
Act, Public Law 111-203, as amended from time to time, and all rules,
regulations, requests, guidelines or directives in connection therewith).

 

“Dollars” and “$” means lawful money of the United States of America.

 

“Domestic Subsidiary” has the meaning assigned to such term in Section 8.17.

 

“Eligible Inventory” means, as at any date, the aggregate value of all Inventory
(valued at the lower of cost (as determined using the specific identification
method) or market value in accordance with GAAP) which satisfies each of the
following requirements:

 

(a)          such Inventory is owned by the Company as at such date, free and
clear of all Liens, except for Permitted Borrowing Base Liens and Liens
permitted under Section 8.06(j) hereof,

 

(b)          such Inventory (i) in storage in the United States on the property
of the Borrower, (ii) on an ocean-going vessel bound for the United States of
America, Canada, Latin America or other jurisdiction acceptable to the Agent,
evidenced by either (x) non-negotiable bills of lading the stated consignee of
which is the Company or the Agent or (y) 3/3 on board negotiable bills of lading
that have been issued and duly negotiated to the Agent, or to order and blank
endorsed and in the possession of the Agent, (iii) held at a third party
warehouse located in the United States (reasonably acceptable to the Agent, and
is evidenced by documents of title, whether negotiable or non-negotiable, and
any such negotiable document of title shall have been issued and duly negotiated
to the Company or the Agent or to order, blank endorsed, and in the possession
of the Company or the Agent, and any such non-negotiable document of title shall
have been issued in the name of and delivered to the Company or the Agent,
(iv) held at a location in the United States that is controlled by a third party
(reasonably acceptable to the Agent) engaged in the business of storing goods of
others for hire (of the same type as Inventory) that does not issue either
negotiable or non-negotiable documents of title as long as the goods stored by
such third party on behalf of the Company are readily identifiable to the
Company in a manner reasonably acceptable to the Agent; or (v) in transit in the
United States (under the control of the Company) to or from a warehouse or other
storage facility controlled by the Company or of the type described in clause
(iii) or (iv) of this clause (b),

 

(c)          such Inventory is subject to a perfected first priority Lien in
favor of the Agent, subject to no other Liens other than (x) Permitted Borrowing
Base Liens and (y) the existence of Liens (subordinate to the Agent’s Liens)
permitted under Section 8.06(j) hereof,

 

(d)          such Inventory meets all standards imposed by any Governmental
Authority or agency, department or division thereof having regulatory authority
over such Inventory, its use or sale,

 

(e)          in respect of such Inventory either (i) (A) one or more customers
of the Company has contracted to purchase such Inventory at a predetermined
fixed price under sales contracts entered into by the Company in the ordinary
course of business and (B) upon such delivery an Eligible Receivable will arise
or (ii) such Inventory is hedged by futures contracts (in a manner acceptable to
the Required Banks) in a futures account maintained with a broker acceptable to
the Agent, which is subject to the Agent’s first priority perfected Lien
(subject only to customary setoff rights of the applicable broker) and an
Account Control Agreement,

 

(f)           such Inventory is insured as to casualty loss by an insurance
company acceptable to the Required Banks pursuant to an insurance policy
acceptable to the Required Banks on which the Agent has been named additional
insured and loss payee,

 

8

 

 

(g)          such Inventory is not damaged, obsolete, slow moving or not
currently saleable in the normal course of the Company’s operations,

 

(h)          such Inventory is not Inventory that the Company or the Company’s
customer has returned, has attempted to return, is in the process of returning
or intends to return,

 

(i)          such Inventory has not been shipped or delivered to a customer on
consignment, a sale or return basis, or on the basis of any similar
understanding,

 

(j)          such Inventory was acquired by the Company in the ordinary course
of business from a non-Affiliate;

 

(k)         such Inventory has not given rise to an Eligible Receivable; and

 

(l)          such Inventory is not Inventory the Agent has otherwise deemed
ineligible at any time and from time to time, such determination to be made in
the Agent’s judgment, in good faith and based on information which, in its
judgment, supports such determination;

 

provided that (i) in no event shall the aggregate amount of the Eligible
Inventory included in the Borrowing Base at any time exceed an amount equal to
65% of the Borrowing Base and (ii) if at any time and from time to time the
Agent shall determine a warehouse or storage location unacceptable (in its
reasonable discretion) and the Agent shall deliver notice thereof to the
Company, (x) any Inventory located at such facility on (or received by such
facility within 14 days after) the date of delivery by the Agent of such notice
shall be included as Eligible Inventory (to the extent such Inventory otherwise
qualifies as Eligible Inventory) for not more than 120 days after the date of
delivery of such notice and (y) no Inventory initially received at such facility
after the date which is 14 days after the date of delivery by the Agent of such
notice shall be Eligible Inventory until located at a storage facility
reasonably acceptable to the Agent.

 

“Eligible Inventory Ordered Under L/C” means, as at any date, the aggregate
purchase price payable for Inventory (not otherwise included in the Borrowing
Base): (a) that the Company has contracted to purchase pursuant to a purchase
contract in which the Agent has a first priority perfected Lien (subject to the
terms of the Intercreditor Agreement); (b) the purchase price of which is
supported by a commercial Letter of Credit issued by the applicable Issuing
Bank; (c) that is to be delivered to the Company prior to the Revolving Credit
Commitment Termination Date; and (d) that, upon receipt by the Company and
payment under the Letter of Credit, will constitute Eligible Inventory.

 

“Eligible Net Liquidating Value in Brokerage Accounts” means, as of any date of
determination, the aggregate amount of the “net liquidating value” or “net
equity” (however designated) or amount that would be available for withdrawal
upon closing such accounts and liquidation of all open positions at current
market values as reported in the most recent account statements for the relevant
account in all commodities accounts of the Company held with commodity
intermediaries acceptable to the Agent in which the Agent has been granted a
perfected Lien and which is subject to the execution and delivery of one or more
Account Control Agreements among the Agent, the Company and the applicable
commodity intermediaries and that is free and clear of any other Liens other
than customary Liens in favor of the applicable commodity intermediary securing
obligations arising in connection with the operation of such commodity account
in the ordinary course.

 

“Eligible Receivables” means, as at any date, the aggregate amount of all
Receivables at such date payable to the Company, other than the following
(determined without duplication):

 

9

 

 

(a)          any Receivable payable in a currency other than a Permitted
Currency;

 

(b)          any Receivable due from an account debtor whose principal place of
business is (i) located in Australia or (ii) otherwise not located in the United
States of America, Canada or Latin America and with respect to this clause (ii)
only, which are not: (A) backed by a bank letter of credit naming the Agent as
beneficiary or assigned to the Agent, in the Agent’s possession and acceptable
to the Agent in all respects, such determination to be made in the Agent’s
judgment and in good faith or (B) covered by a foreign receivables insurance
policy acceptable to the Agent (on which the Agent shall have been named
loss-payee), such determination to be made in the Agent’s judgment and in good
faith,

 

(c)          any Receivable owing from an Affiliate of the Company,

 

(d)          any Receivable owing from an account debtor that the Required Banks
(through the Agent) have notified the Company does not have a satisfactory
credit standing (as determined by the Required Banks, such determination to be
made in each of their respective judgments, in good faith and based on
information which, in their respective judgments, supports such determination),

 

(e)          any Receivable that remains unpaid for more than 60 days after the
original due date thereof,

 

(f)          all Receivables of any account debtor if more than 50% of the
aggregate amount of the Receivables owing to the Company from such account
debtor shall at the time have remained unpaid and outstanding for more than 60
days after the original due date thereof,

 

(g)          any Receivable as to which there is any unresolved dispute with the
respective account debtor or which is subject to any offset, counterclaim,
reduction or other claim or defense on the part of the account debtor or to any
claim on the part of the account debtor denying payment liability under such
Receivable (including, without limitation, the amount of all liabilities and
obligations of the Company to the account debtor and mark-to-market losses on
forward, derivative or other contracts with such account debtor) (but only to
the extent of the amount thereof in dispute or the amount subject to offset,
counterclaim, reduction or other claim or defense),

 

(h)          any Receivable evidenced by an Instrument or Chattel Paper (as such
terms are defined in the UCC) not in the possession of the Agent,

 

(i)           any Receivable representing an obligation for goods sold on
consignment, approval or a sale-or-return basis or subject to any other
repurchase or return arrangement,

 

(j)           any Receivable that is payable more than 120 days after the date
of the original invoice therefor, provided that Receivables owing from account
debtors organized or located in Brazil which are payable up to 180 days after
the date of the original invoice therefor shall not be excluded from Eligible
Receivables under this clause (j) so long as such Receivables are Credit Insured
Receivables, provided, further, that additional Receivables that have a due date
of greater than 120 days after the date of the original invoice therefor in an
aggregate amount not to exceed $6,500,000 at any time shall not be excluded from
Eligible Receivables under this clause (j) so long as such Receivables are
Credit Insured Receivables,

 

(k)         any Receivable owed by any Governmental Authority, whether foreign
or domestic (provided, however, that there shall be included in Eligible
Receivables that portion of Receivable owed by such Governmental Authority for
which the Company has provided evidence satisfactory to the Agent (including,
without limitation, that all necessary actions have been taken under any
applicable Assignment of Claims Act) that (i) the Agent has a security interest
in such Receivable and (ii) such Receivable may be enforced by the Agent against
such Governmental Authority),

 

10

 

 

(l)           any Receivable that has arisen in a transaction in which the
Customer’s obligations have been subcontracted to a third party or is assured by
a performance, completion or other bond,

 

(m)         any Receivable with respect to which the Agent does not have a first
priority, perfected Lien on behalf of the Banks (subject only to Permitted
Borrowing Base Liens) or which is subject to any other Lien (other than
Permitted Borrowing Base Liens and Liens (subordinate to the Agent’s Liens)
permitted under Section 8.06(j) hereof),

 

(n)          any Receivable which shall not be the valid, legally enforceable
and binding obligation of the applicable account debtor,

 

(o)          any Receivable not evidenced by an invoice which shall have been
issued to the applicable account debtor,

 

(p)          any Receivable which does not comply in all material respects with
all applicable Laws to which such Receivable and the Company are subject,

 

(q)          any Receivable, the account debtor of which is insolvent or a
debtor under chapter 11 of the United States Bankruptcy Code (a “Chapter 11
Debtor”) or any other proceeding, whether voluntary or involuntary, under any
bankruptcy, reorganization, arrangement, insolvency, adjustment of debt,
dissolution, liquidation or similar law of any jurisdiction, and

 

(r)           any Receivable not arising from the purchase of Inventory in an
arm’s length bona fide transaction conducted in the ordinary course of business
in compliance with all applicable Laws.

 

“Eligible Unsold Inventory” means Inventory which is not Eligible Inventory
that, but for the failure to satisfy clause (e) of the definition of “Eligible
Inventory”, would qualify as Eligible Inventory, valued at the lower of cost (as
determined using the specific identification method) or market in accordance
with GAAP; provided that in no event shall the aggregate amount of such Eligible
Unsold Inventory (including, without limitation, stainless steel) included in
the Borrowing Base at any time exceed $6,500,000 (after giving effect to the
applicable advance rate) and in no event shall the aggregate amount of Eligible
Unsold Inventory included in the Borrowing Base at any time which is stainless
steel exceed $5,000,000 (after giving effect to the applicable advance rate),
plus

 

“Environmental Laws” means any and all legally binding Laws concerning the
environment or the protection of health and safety with respect to exposure to
contamination or pollution in the environment which are in existence now or in
the future and are binding at any time on the Company or any of its Subsidiaries
in the relevant jurisdiction in which the Company or any Subsidiary has been or
is operating (including by the export of its products or its waste to that
jurisdiction).

 

“Environmental Permits” means any permit, license, consent, approval,
registration and other authorization required under any Environmental Law for
the operation of the business of the Company or any of its Subsidiaries
conducted on or from the properties owned or operated by the Company or such
Subsidiary.

 

11

 

 

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

 

“ERISA Affiliate” means any trade or business that is a member of any group of
organizations (i) described in Section 414(b) or (c) of the Code of which the
Company is a member and (ii) solely for purposes of potential liability under
Section 302 of ERISA and Section 412(c) of the Code and the lien created under
Section 303(k) of ERISA and Section 430(k) of the Code, described in
Section 414(m) or (o) of the Code of which the Company is a member.

 

“Eurodollar Base Rate” means, with respect to any Eurodollar Loan for any
Interest Period therefor, the rate of interest per annum equal to the London
interbank offered rate as administered by the ICE Benchmark Administration (or
any other Person that takes over the administration of such rate) for deposits
in Dollars with a term equivalent to such Interest Period as displayed on the
Reuters screen page that displays such rate (currently page LIBOR01) (or, in the
event such rate does not appear on a Reuters page or screen, on the appropriate
page of such other information service that publishes such rate as shall be
selected by the Agent from time to time in its reasonable discretion) as of
11:00 a.m., London time, two (2) Business Days prior to the commencement of such
Interest Period (but in respect of the Eurodollar Rate as that term is used in
the definition of the term “Base Rate”, as of 11:00 a.m., London time, on the
day of determination thereof or if such day is not a Business Day on the
immediately preceding Business Day (the rate determined pursuant to this
sentence, herein the “Page Rate”); provided that in the event that the Page Rate
is not available at such time for any reason, the “Eurodollar Base Rate” for the
purposes of this definition shall instead be the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) offered to Rabobank or one of
its Affiliates at approximately 11:00 a.m. London time (or as soon thereafter as
practicable) two Business Days prior to the first day of such Interest Period
(but in respect of the Eurodollar Rate as that term is used in the definition of
the term “Base Rate”, as of 11:00 a.m., London time, on the day of determination
thereof) or if such day is not a Business Day on the immediately preceding
Business Day by leading banks in the London interbank market of Dollar deposits
in immediately available funds having a term comparable to such Interest Period.

 

“Eurodollar Loans” means Loans that bear interest at rates based on rates
referred to in the definition of “Eurodollar Base Rate” in this Section 1.01.

 

“Eurodollar Rate” means, for any Eurodollar Loan for any Interest Period
therefor, a rate per annum (rounded upwards, if necessary, to the nearest 1/100
of 1%) determined by the Agent to be equal to the Eurodollar Base Rate for such
Loan for such Interest Period divided by 1 minus the Reserve Requirement (if
any) for such Loan for such Interest Period.

 

“Event of Default” has the meaning assigned to such term in Section 9 hereof.

 

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

 

12

 

 

“Excluded Taxes” means, with respect to the Agent, any Bank or any other
recipient of any payment to be made by or on account of any obligation of any
Obligor hereunder: (a) taxes imposed on or measured by its overall net income
(however denominated) by the jurisdiction (or any political subdivision thereof)
under the Laws of which such recipient is organized or in which its principal
office is located or, in the case of any Bank, in which its Applicable Lending
Office is located; (b) any branch profits taxes imposed by the United States of
America or any similar tax imposed by any other jurisdiction in which the
applicable Obligor is located, (c) in the case of a Foreign Bank any withholding
tax that is imposed on amounts payable to such Foreign Bank at the time such
Foreign Bank becomes a party to this Agreement (or designates a new lending
office) or is attributable to such Foreign Bank’s failure (or inability) to
comply with Section 5.06(e), except to the extent that such Foreign Bank’s
assignor (if any) was entitled, at the time of assignment, to receive additional
amounts from the Company with respect to such withholding tax pursuant to
Section 5.06, (d) any backup withholding Tax that is required by the Code to be
withheld from amounts payable to a Bank because of its failure to comply with
Section 5.06 hereof, and (e) any Taxes imposed on any “withholdable payment” as
a result of the failure of a recipient to satisfy the applicable requirements as
set forth in FATCA after December 31, 2012.

 

“Executive Order” has the meaning assigned to such term in Section 7.16 hereof.

 

“Existing Credit Agreement” has the meaning assigned to such term in the first
Recital to this Agreement.

 

“Existing Loan Documents” has the meaning assigned to such term in Section 11.22
hereof.

 

“FATCA” means Sections 1471 through 1474 of the Code, as in effect on the date
hereof, including any amendments made thereto after the date of this Agreement,
and any current or future regulations or official interpretations thereof.

 

“Federal Funds Rate” means, for any day, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) equal to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day, provided that (a) if the day for which such rate is to be determined is not
a Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published on the next
succeeding Business Day and (b) if such rate is not so published for any
Business Day, the average (rounded upwards, if necessary, to the next 1/100 of
1%) of the quotations for such day for such transactions received by Rabobank
from three Federal funds brokers of recognized standing selected by it.

 

“Foreign Bank” means any Bank that is not a “United States person”, as defined
under Section 7701(a)(30) of the Code.

 

“Fronting Banks” means the Swing Line Bank and the Issuing Banks.

 

“Fronting Exposure” means, at any time, the aggregate principal amount of all
Swing Line Loans and Letter of Credit Liabilities outstanding at such time. The
Fronting Exposure of any Bank at any time shall be its Revolving Loan Commitment
Percentage of the total Fronting Exposure at such time.

 

13

 

 

“GAAP” means generally accepted accounting principles in the United States of
America.

 

“Governing Documents” means, with respect to a: (a) corporation, its articles or
certificate of incorporation and bylaws, (b) limited partnership, its
certificate of limited partnership and limited partnership agreement, (c)
limited liability company, its certificate of formation and limited liability
company or operating agreement and (d) any other Person, the other
organizational or governing documents of such Person and, in each case, any
other organizational or governing documents, as applicable.

 

“Governmental Authority” means any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.

 

“Guarantee” means a guarantee, an endorsement, a contingent agreement to
purchase or to furnish funds for the payment or maintenance of, or otherwise to
be or become contingently liable under or with respect to, the Indebtedness,
other obligations, net worth, working capital or earnings of any Person, or a
guarantee of the payment of dividends or other distributions upon the Capital
Securities of any Person, or an agreement to purchase, sell or lease (as lessee
or lessor) Property, products, materials, supplies or services primarily for the
purpose of enabling a debtor to make payment of such debtor’s obligations or an
agreement to assure a creditor against loss, and including causing a bank or
other financial institution to issue a letter of credit or other similar
instrument for the benefit of another Person, but excluding endorsements for
collection or deposit in the ordinary course of business. The terms “Guarantee”
and “Guaranteed” used as a verb has a correlative meaning.

 

“Guarantors” means each Subsidiary of the Company that executes and delivers a
Subsidiary Guarantee.

 

“Hedging Agreement” means any interest rate protection agreement, foreign
currency exchange agreement, commodity price protection agreement or other
interest or currency exchange rate or commodity price hedging arrangement or any
other similar transaction governed by an ISDA Master Agreement.

 

“Hedging Obligations” means all net obligations, indebtedness, and liabilities
of the Company or any Subsidiary, or any one of them, to any Bank or an
Affiliate of a Bank (or any Person which was a Bank or an Affiliate of a Bank at
the time such Person entered into the applicable Hedging Agreement), arising
pursuant to any Hedging Agreements entered into by such Bank, Affiliate or other
Person (while such other Person was a Bank or an Affiliate thereof) with the
Company or any Subsidiary, or any one of them, whether now existing or hereafter
arising, whether direct, indirect, related, unrelated, fixed, contingent,
liquidated, unliquidated, joint, several, or joint and several, including all
fees, costs, and expenses (including attorneys’ fees and expenses) provided for
in such Hedging Agreements. The term “Hedging Obligations” includes any and all
post-petition interest and expenses (including attorneys’ fees) whether or not
allowed under any bankruptcy, insolvency, or other similar Law.

 

“Imbali Facility” means Indebtedness of Imbali Metals Bvba consisting of a
revolving working capital facility provided by ING Belgium S.A./N.V., in a
principal amount not to exceed €10,000,000 at any one time outstanding, and any
extensions, renewals, refinancing and replacements of any such facility that do
not increase the outstanding principal amount thereof or result in an earlier
maturity date thereof.

 

14

 

 

“Imbali Guarantee” means a Guarantee by the Company of the Imbali Facility,
which Guarantee shall be subordinated to the Obligations pursuant to the
Subordination Agreement.

 

“Increase Amount” has the meaning assigned to such term in Section 2.05 hereof.

 

“Increase and New Bank Agreement” means an Increase and New Bank Agreement
substantially in the form of Exhibit F hereto.

 

“Indebtedness” means, for any Person: (a) obligations created, issued or
incurred by such Person for borrowed money (whether by loan, the issuance and
sale of debt securities or the sale of Property to another Person subject to an
understanding or agreement, contingent or otherwise, to repurchase such Property
from such Person), and any other indebtedness of such Person which is evidenced
by a note, bond, debenture or similar instrument; (b) obligations of such Person
to pay the deferred purchase or acquisition price of Property or services, other
than trade accounts payable (other than for borrowed money) arising, and accrued
expenses incurred, in the ordinary course of business so long as such trade
accounts payable are payable within 90 days of the date the respective goods are
delivered or the respective services are rendered; (c) Indebtedness of others
secured by a Lien on the Property of such Person, whether or not the respective
indebtedness so secured has been assumed by such Person; (d) obligations of such
Person in respect of letters of credit or similar instruments issued or accepted
by banks and other financial institutions for account of such Person; (e)
Capital Lease Obligations of such Person; (f) Indebtedness of others Guaranteed
by such Person; (g) obligations under Hedging Agreements; and (h) obligations of
such Person to purchase, redeem, retire, defease or otherwise make any payment
in respect of preferred Capital Securities of such Person. The amount of any
Indebtedness under clause (c) shall be equal to the lesser of (A) the stated
amount of the relevant obligations and (B) the fair market value of the property
subject to the relevant Lien.

 

“Indemnified Taxes” means Taxes other than Excluded Taxes.

 

“Interest Period” means, with respect to any Eurodollar Loan, each period
commencing on the date such Eurodollar Loan is made or Converted from a Base
Rate Loan or the last day of the next preceding Interest Period for such Loan
and ending on the numerically corresponding day in the first week or first,
second or third calendar month thereafter, as the Company may select as provided
in Section 4.05 hereof, except that (i) each Interest Period that commences on
the last Business Day of a calendar month (or on any day for which there is no
numerically corresponding day in the appropriate subsequent calendar month)
shall end on the last Business Day of the appropriate subsequent calendar month
and (ii) no Interest Period shall extend beyond the Revolving Credit Commitment
Termination Date.

 

Notwithstanding the foregoing, each Interest Period that would otherwise end on
a day that is not a Business Day shall end on the next succeeding Business Day
(or, in respect of an Interest Period other than one week, if such next
succeeding Business Day falls in the next succeeding calendar month, on the next
preceding Business Day).

 

“Intercreditor Agreement” means the Intercreditor Agreement dated as of the date
hereof, substantially in the form of Exhibit M hereto, between the Agent and the
Uncommitted Facility Agent, as the same shall be amended, supplemented or
otherwise modified from time to time.

 

“Interim Borrowing Base Certificate” means a report certified by the chief
financial officer or other authorized officer of the Company, substantially in
the form of Exhibit B, with appropriate insertions and schedules, showing the
Borrowing Base as of the date set forth therein after giving effect to the
credit extensions requested in relation to such Interim Borrowing Base
Certificate.

 

15

 

 

“Inventory” means the Company’s semi-finished aluminum and steel products and
aluminum billets and other similar metals products approved by the Required
Banks.

 

“Investment” means, for any Person: (a) the acquisition (whether for cash,
Property, services or securities or otherwise) of capital stock, bonds, notes,
debentures, partnership or other ownership interests or other securities of any
other Person or any agreement to make any such acquisition (including any “short
sale” or any sale of any securities at a time when such securities are not owned
by the Person entering into such sale); (b) the making of any deposit with, or
advance, loan or other extension of credit to, any other Person (including the
purchase of Property from another Person subject to an understanding or
agreement, contingent or otherwise, to resell such Property to such Person), but
excluding any such advance, loan or extension of credit having a term not
exceeding 90 days representing the purchase price of inventory or supplies sold
by such Person in the ordinary course of business; (c) the entering into of any
Guarantee of, or other contingent obligation with respect to, Indebtedness or
other liability of any other Person and (without duplication) any amount
committed to be advanced, loaned or extended to such Person; or (d) the entering
into of any Hedging Agreement.

 

“Investment Grade” means, with respect to any Person as of any date of
determination, the long term senior unsecured non-credit enhanced credit rating
of such Person is BBB- or higher by S&P or Baa3 or higher by Moody’s.

 

“Issuance Cap” means, with respect to the obligation of an Issuing Bank to issue
any Letter of Credit under this Agreement, the maximum permitted aggregate
outstanding amount of Letter of Credit Liabilities attributable to Letters of
Credit issued by such Issuing Bank, as shall be agreed upon by each Issuing
Bank, the Company and the Agent in writing upon any new Issuing Bank becoming an
Issuing Bank, as such agreement may be amended, modified or supplemented from
time to time by the parties thereto. As of the Closing Date, Rabobank has an
Issuance Cap in an amount equal to $75,000,000. The Issuance Cap for Rabobank
shall be reduced, in its sole discretion, by all or any part of the amount of
the Issuance Cap of each new Issuing Bank, on the date such new Issuing Bank
shall become an Issuing Bank.

 

“Issuing Bank” means Rabobank in its capacity as the issuer of Letters of Credit
hereunder, and its successors in such capacity. The Company may, in its
discretion, arrange for one or more Letters of Credit to be issued by any other
Bank, in which case the term Issuing Bank shall include any such Bank with
respect to Letters of Credit issued by such Bank. Each Issuing Bank may, in its
discretion, arrange for one or more Letters of Credit to be issued by Affiliates
of the applicable Issuing Bank, in which case the term Issuing Bank shall
include any such Affiliate with respect to Letters of Credit issued by such
Affiliate, together with its successors and assigns in such capacity.

 

“ISP” means International Standby Practices ISP98, International Chamber of
Commerce Publication No. 590, as from time to time amended, modified and
replaced.

 

“Laws” means, collectively, all international, foreign, Federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, licenses, authorizations and
permits of, and agreements with, any Governmental Authority.

 

“L/C Cap” has the meaning assigned to such term in Section 2.03 hereof.

 

“Letter of Credit” has the meaning assigned to such term in Section 2.03 hereof.

 

16

 

 

“Letter of Credit Documents” means, with respect to any Letter of Credit,
collectively, any application therefor and any other agreements, instruments,
guarantees or other documents (whether general in application or applicable only
to such Letter of Credit) governing or providing for (a) the rights and
obligations of the parties concerned or at risk with respect to such Letter of
Credit or (b) any collateral security for any of such obligations, each as the
same may be amended, supplemented or otherwise modified and in effect from time
to time.

 

“Letter of Credit Interest” means for each Bank, such Bank’s participation
interest (or, in the case of the applicable Issuing Bank, such Issuing Bank’s
retained interest) in the applicable Issuing Bank’s liability under Letters of
Credit and such Bank’s rights and interests in Reimbursement Obligations and
fees, interest and other amounts payable in connection with Letters of Credit
and Reimbursement Obligations.

 

“Letter of Credit Liability” means, without duplication, at any time and in
respect of any Letter of Credit, the sum of (a) the undrawn face amount of such
Letter of Credit plus (b) the aggregate unpaid principal amount of all
Reimbursement Obligations of the Company at such time due and payable in respect
of all drawings made under such Letter of Credit.

 

“Leverage Ratio” means, at any time, the ratio of (a) Total Liabilities at such
time minus the amount of Subordinated Debt at such time to (b) Tangible Net
Worth of the Company at such time.

 

“Lien” means, with respect to any Property, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such Property. For
purposes of this Agreement and the other Basic Documents, a Person shall be
deemed to own subject to a Lien any Property that it has acquired or holds
subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement (other than an
operating lease) relating to such Property.

 

“Loan Obligations” means all obligations, indebtedness, and liabilities of the
Company or any Subsidiary, or any one of them, to the Agent and the Banks
arising pursuant to any of the Basic Documents, whether now existing or
hereafter arising, whether direct, indirect, related, unrelated, fixed,
contingent, liquidated, unliquidated, joint, several, or joint and several,
including the obligation of the Company or any Subsidiary to repay the Loans,
the Letter of Credit Liabilities, interest on the Loans and Letter of Credit
Liabilities, and all reasonable fees, costs, and expenses (including reasonable
attorneys’ fees and expenses) provided for in the Basic Documents. The term
“Loan Obligations” includes any and all post-petition interest and expenses
(including attorneys’ fees) whether or not allowed under any bankruptcy,
insolvency, or other similar Law.

 

“Loans” means, as the context may require, a Revolving Loan or a Swing Line Loan
of any Type.

 

“Margin Stock” means “margin stock” within the meaning of Regulation T or U.

 

“Material Adverse Effect” means a material adverse effect on (a) the Property,
business, operations, financial condition, prospects, liabilities or
capitalization of the Company and its Subsidiaries (on a consolidated basis),
(b) the ability of the Company or any of its Subsidiaries to perform its
obligations under any of the Basic Documents to which it is a party, (c) the
validity or enforceability of any of the Basic Documents, (d) the rights and
remedies of the Banks and the Agent under any of the Basic Documents or (e) the
timely payment of the principal of or interest on the Loans or the Reimbursement
Obligations or other amounts payable in connection therewith.

 

“Material Indebtedness” has the meaning assigned to such term in Section 9.01(b)
hereof.

 

17

 

 

“Materials of Environmental Concern” means any gasoline or petroleum (including
crude oil or any fraction thereof) or petroleum products or any hazardous or
toxic substances, materials or wastes, defined or regulated as such in or under,
or which form the basis of liability under, any Environmental Law, including,
without limitation, asbestos, polychlorinated biphenyls and urea-formaldehyde
insulation, medical waste, radioactive materials and electromagnetic fields.

 

“Maximum Rate” has the meaning assigned to such term in Section 11.17(a) hereof.

 

“Moody’s” means Moody’s Investors Service, Inc., or any successor to its rating
agency business.

 

“Multiemployer Plan” means a “multiemployer plan” as defined in Section
4001(a)(3) of ERISA to which the Company or any ERISA Affiliate makes or is
obligated to make contributions.

 

“Net Working Capital” means as of any date of determination with respect to any
Person, an amount equal to the excess of (i) Consolidated Current Assets of such
Person and its Subsidiaries over (ii) Consolidated Current Liabilities of such
Person and its Subsidiaries as at such date.

 

“New Bank” has the meaning assigned to such term in Section 2.05 hereof.

 

“New Closing Banks” means the undersigned Banks which were not parties to the
Existing Credit Agreement.

 

“Non-Renewal Notice Date” has the meaning assigned to such term in Section
2.03(o) hereof.

 

“Notes” means the promissory notes in substantially the form of Exhibit A hereto
provided for by Section 2.09 hereof and all promissory notes delivered in
substitution or exchange therefor, in each case as the same shall be amended,
supplemented or otherwise modified and in effect from time to time.

 

“Obligations” means all Loan Obligations, the Hedging Obligations and all
Deposit Obligations.

 

“Obligor Accounts” has the meaning assigned to such term in Section 10.14
hereof.

 

“Obligors” means, collectively, the Company and the Guarantors.

 

“OFAC” has the meaning assigned to such term in Section 7.16 hereof.

 

“Other Taxes” means any and all present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies arising from any
payment made hereunder or under any other Basic Document or from the execution,
delivery or enforcement of, or otherwise with respect to, this Agreement or any
other Basic Document.

 

“Participant” has the meaning assigned to such term in Section 11.06(d) hereof.

 

“Payor” has the meaning assigned to such term in Section 4.06 hereof.

 

“PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding
to any or all of its functions under ERISA.

 

18

 

 

“Permitted Borrowing Base Liens” means Liens permitted under clauses (b) and (c)
of Section 8.06 hereof.

 

“Permitted Currency” means Dollars, Canadian dollars, Euros, Australian dollars
and New Zealand dollars, provided, that for purposes of clause (a) of the
definition of “Eligible Receivables”, Permitted Currency shall not include
Australian dollars.

 

“Permitted Investments” means: (a) direct obligations of the United States of
America, or of any agency thereof, or obligations guaranteed as to principal and
interest by the United States of America, or of any agency thereof, in either
case maturing not more than 90 days from the date of acquisition thereof;
(b) certificates of deposit issued by any bank or trust company organized under
the Laws of the United States of America or any state thereof and having
capital, surplus and undivided profits of at least $500,000,000, maturing not
more than 90 days from the date of acquisition thereof; (c) commercial paper
rated A-1 or better or P-1 by S&P or Moody’s, respectively, maturing not more
than 90 days from the date of acquisition thereof; (d) municipal bonds with a
credit rating acceptable to the Required Banks; (e) loans or advances to
employees made in the ordinary course of business in an aggregate principal
amount outstanding at any time not to exceed $100,000; (f) stock, obligations or
securities received in settlement of debts created in the ordinary course of
business and owing to an Obligor or in satisfaction of judgments, including
pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of any trade creditor or customer; (g) consideration
received in connection with any asset sale or other disposition permitted under
this Agreement; (h) any acquisition of assets solely in exchange for the
issuance of Capital Securities of the Company; and (i) all cash held in deposit
accounts subject to an Account Control Agreement.

 

“Person” means any individual, corporation, company, limited liability company,
voluntary association, partnership, joint venture, trust, unincorporated
organization or government (or any agency, instrumentality or political
subdivision thereof).

 

“Platform” has the meaning assigned to such term in Section 11.02(a) hereof.

 

“Plan” means an employee benefit or other plan established or maintained by the
Company or any ERISA Affiliate and that is covered by Section 412 of the Code or
Title IV of ERISA, other than a Multiemployer Plan, or to which the Company or
any ERISA Affiliate contributes or has an obligation to contribute, or in the
case of a multiple employer plan described in Section 4064(a) of ERISA, has made
contributions at any time during the preceding five plan years.

 

“Pledged Cash” means deposit accounts maintained at any bank or trust company
organized or licensed under the Laws of the United States of America or any
state thereof and having capital, surplus and undivided profits of at least
$500,000,000 which are subject to Account Control Agreements in favor of the
Agent and are otherwise subject to a first priority, perfected security interest
in favor of the Agent and are free and clear of liens of third persons (other
than customary netting and setoff rights, bankers’ liens and the like in favor
of such bank or trust company).

 

“Post-Default Rate” means a rate per annum equal to 2% plus the Base Rate as in
effect from time to time plus the Applicable Margin for Base Rate Loans,
provided that, if the amount with respect to which interest at the Post-Default
Rate is payable is principal of a Eurodollar Loan and the due date thereof is a
day other than the last day of the Interest Period therefor, the “Post-Default
Rate” for such principal shall be, for the period from and including such due
date to but excluding the last day of such Interest Period, 2% plus the interest
rate for such Loan as provided in Section 3.02(a)(ii) hereof and, thereafter,
the rate provided for above in this definition.

 

19

 

 

“Principal Shareholders” means Nathan S. Kahn and Sandra R. Kahn.

 

“Property” means any right or interest in or to property of any kind whatsoever,
whether real, personal or mixed and whether tangible or intangible.

 

“Quad Avenue Loan Agreement” means the Loan Agreement dated as of
December 27, 2004 between 6900 Quad Avenue, LLC and JPMorgan Chase Bank, N.A.,
as the same shall be amended, supplemented or otherwise modified and in effect
from time to time.

 

“Quad Avenue Subsidiary” means 6900 Quad Avenue, LLC, unless such Person owns
any property (real or otherwise) other than the approximately 122,000 square
foot warehouse located at 6900 Quad Avenue, Baltimore, Maryland.

 

“Quarterly Dates” means the last Business Day of each March, June, September and
December, the first of which shall be the first such day after the date of this
Agreement.

 

“Rabobank” has the meaning set forth in the introductory paragraph herein.

 

“Receivables” means, as at any date, the unpaid portion of the obligation, as
stated on the respective invoice, of a customer of the Company in respect of
Inventory sold and shipped to such customer, net of any credits, rebates or
offsets owed to such customer and also net of any commissions payable to third
parties (and for purposes hereof, a credit or rebate paid by check or draft of
the Company shall be deemed to be outstanding until such check or draft has been
debited to the account of the Company) and net of any applicable taxes
including, without limitation, sales, excise and similar taxes.

 

“Register” has the meaning set forth in Section 11.06(b) hereof.

 

“Regulations D, T, U and X” means, respectively, Regulations D, T, U and X of
the Board of Governors of the Federal Reserve System (or any successor), as the
same may be modified and supplemented and in effect from time to time.

 

“Regulatory Change” means, with respect to any Bank, any change after the date
of this Agreement in Federal, state or foreign Law or regulations (including
Regulation D) or the adoption or making after such date of any interpretation,
directive or request applying to a class of banks including such Bank of or
under any Federal, state or foreign Law or regulations (whether or not having
the force of Law and whether or not failure to comply therewith would be
unlawful) by any court or governmental or monetary authority charged with the
interpretation or administration thereof. The Dodd-Frank Act, Basel III and all
requests, rules, guidelines, and directives promulgated under any of the
foregoing shall be deemed to be a “Regulatory Change “, regardless of the date
enacted or adopted.

 

“Reimbursement Obligations” means, at any time, the obligations of the Company
then outstanding to reimburse amounts paid by the applicable Issuing Bank in
respect of any drawings under a Letter of Credit.

 

“Relevant Properties” has the meaning assigned to such term in Section 7.12
hereof.

 

“Requested Increase Effective Date” has the meaning assigned to such term in
Section 2.05 hereof.

 

“Required Banks” means Banks having 51% of the aggregate amount of the Revolving
Loan Commitments or, if the Revolving Loan Commitments have terminated, Banks
holding at least 51% of the aggregate amount of the Credit Exposure. If at the
time of the calculation of the Required Banks, one or more Defaulting Banks
exists, the Credit Exposure and unused Revolving Loan Commitments of each
Defaulting Bank shall be excluded from both the numerator and denominator of the
calculation.

 

20

 

 

“Required Payment” has the meaning assigned to such term in Section 4.06 hereof.

 

“Requirement of Law” means, as to any Person, any Law, treaty, rule or
regulation or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.

 

“Reserve Requirement” means the average maximum rate at which reserves
(including any marginal, supplemental or emergency reserves) are required to be
maintained under Regulation D by member banks of the Federal Reserve System in
New York City with deposits exceeding one billion Dollars against “Eurocurrency
liabilities” (as such term is used in Regulation D). Without limiting the effect
of the foregoing, the Reserve Requirement shall include any other reserves
required to be maintained by such member banks by reason of any Regulatory
Change with respect to (i) any category of liabilities that includes deposits by
reference to which the Eurodollar Base Rate is to be determined as provided in
the definition of “Eurodollar Base Rate” in this Section 1.01 or (ii) any
category of extensions of credit or other assets that includes Eurodollar Loans.

 

“Revolving Credit Commitment Termination Date” means June 19, 2017.

 

“Revolving Loan Commitment” means, as to each Bank, the obligation of such Bank
to make Loans and to acquire a participation in Letters of Credit in an
aggregate principal or face amount at any one time outstanding up to but not
exceeding the amount set opposite such Bank’s name under the caption
“Commitment” on Schedule A attached hereto and incorporated herein by reference
(as the same may be reduced or increased from time to time pursuant to Section
2.05 hereof). As of June 19, 2014, the aggregate amount of the Revolving Loan
Commitments is $150,000,000.

 

“Revolving Loan Commitment Percentage” means, with respect to any Bank and
except as set forth in clause (b) below:

 

(a)          the ratio of (i) the amount of the Revolving Loan Commitment of
such Bank to (ii) the aggregate amount of the Revolving Loan Commitments of all
of the Banks; provided that if at the time of the calculation one or more
Defaulting Banks exists, the Revolving Loan Commitment Percentages are subject
to reallocation as provided in Section 4.12, and

 

(b)          with respect to any Bank in respect of any indemnity claim under
Section 10.05 arising out of an action or omission of the Agent under this
Agreement, the ratio of (i) the amount of the Revolving Loan Commitment of such
Bank to (ii) the aggregate amount of the Revolving Loan Commitments of all of
the Banks.

 

If the Revolving Loan Commitments have terminated or expired, the Revolving Loan
Commitment Percentage shall be determined based upon the Revolving Loan
Commitments most recently in effect, giving effect to any assignments.

 

“Revolving Loans” means the Loans provided for in Section 2.01 hereof, which may
be Base Rate Loans and/or Eurodollar Loans.

 

“S&P” means Standard and Poor’s Ratings Services, or any successor to its rating
agency business.

 

21

 

 

“Sanctioned Person” has the meaning assigned to such term in Section 7.16
hereof.

 

“Secured Parties” means the Agent, the Banks and each Affiliate of a Bank who is
owed any portion of the Obligations.

 

“Security Agreement” means the Amended and Restated Security Agreement among the
Company, the Guarantors and the Agent, substantially in the form of Exhibit C
hereto, as the same shall be amended, supplemented or otherwise modified and in
effect from time to time.

 

“Security Documents” means, collectively, the Security Agreement, the Subsidiary
Guarantee, the Share Pledge Agreement, all Uniform Commercial Code financing
statements required by this Agreement and the Security Agreement to be filed
with respect to the security interests in personal Property and fixtures created
pursuant to the Security Agreement, and each other security agreement or other
document executed and delivered pursuant to the Security Agreement and the Share
Pledge Agreement to secure any of the Obligations.

 

“Share Pledge Agreement” means that certain Share Pledge Agreement dated April
28, 2011 between the Company and Rabobank (in its capacities as Agent and as
Uncommitted Facility Agent) pursuant to which the Company pledges 65% of the
Capital Securities issued by Imbali Metals Bvba, as the same shall be amended,
supplemented or otherwise modified and in effect from time to time.

 

“Spot Rate” means, for any Permitted Currency, the exchange rate published by
The Wall Street Journal for the purchase of such Permitted Currency with Dollars
on the date that the foreign exchange computation is made, provided that the
Company may obtain such rate from another agency designated by the Company (and
reasonably acceptable to the Agent) if a foreign exchange rate for such
Permitted Currency is not available from The Wall Street Journal at the time of
determination.

 

“Subordination Agreement” means that certain Subordination Agreement among the
Company, the Agent and the lenders under the Imbali Facility (or an agent on
their behalf) dated as of April 28, 2011, as the same shall be amended,
supplemented or otherwise modified and in effect from time to time.

 

“Subordinated Debt” means unsecured Indebtedness of the Company that is:
(a) provided to the Company substantially on the terms set forth on Exhibit K
hereto or on such other or different terms as shall be acceptable to the
Required Banks in their sole discretion, (b) subordinated to the Obligations on
terms outlined on Exhibit K or on such other or different subordination terms,
as shall be acceptable to the Required Banks in their sole discretion and
(c) not guaranteed by any Obligor unless such guarantee is subordinated to
obligations of such Obligor under the Basic Documents on terms similar to those
outlined on Exhibit K or on such other or different subordination terms, as
shall be acceptable to the Required Banks in their sole discretion. For the
avoidance of doubt, the Indebtedness of the Company under the Imbali Guarantee
shall not constitute Subordinated Debt.

 

“Subsidiary” means, with respect to any Person, any corporation, partnership or
other entity of which at least a majority of the securities or other ownership
interests having by the terms thereof ordinary voting power to elect a majority
of the board of directors or other persons performing similar functions of such
corporation, partnership or other entity (irrespective of whether or not at the
time securities or other ownership interests of any other class or classes of
such corporation, partnership or other entity has or might have voting power by
reason of the happening of any contingency) is at the time directly or
indirectly owned or controlled by such Person or one or more Subsidiaries of
such Person or by such Person and one or more Subsidiaries of such Person.

 

22

 

 

“Subsidiary Guarantee” means the Amended and Restated Subsidiary Guarantee in
favor of the Agent, substantially in the form of Exhibit D hereto as the same
may be amended or otherwise modified from time to time.

 

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

 

“Swing Line Bank” means, subject to the terms of this Agreement, Rabobank.

 

“Swing Line Commitment” has the meaning assigned to such term in Section 2.01(c)
hereof.

 

“Swing Line Loan” has the meaning assigned to such term in Section 2.01(c)
hereof.

 

“Tangible Net Worth” means, as at any date for any Person, the sum for such
Person (determined without duplication in accordance with GAAP), of the
following:

 

(a)          the amount of common stock; plus

 

(b)          the amount of surplus and retained earnings (or, in the case of a
surplus or retained earnings deficit, minus the amount of such deficit); plus

 

(c)          accumulated other comprehensive income; plus

 

(d)          the amount of any Subordinated Debt; minus

 

(e)          the sum of the following: (i) the aggregate amount of Investments
by such Person, other than (x) Investments permitted under Section 8.08(e)
hereof and (y) Permitted Investments plus (ii) to the extent not deducted in the
calculation of Tangible Net Worth under clause (i) above, Investments in and
receivables and other obligations from Subsidiaries, other Affiliates, officers,
employees or directors of such Person plus (iii) the cost of treasury shares and
the book value of all assets that should be classified as intangibles (without
duplication of deductions in respect of items already deducted in arriving at
surplus and retained earnings) but in any event including goodwill, minority
interests, research and development costs, trademarks, trade names, copyrights,
patents and franchises, unamortized debt discount and expense, all reserves and
any write-up in the book value of assets resulting from a revaluation thereof
subsequent to December 31, 2013.

 

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

 

“Tier I Eligible Receivables” means, on any date, all Eligible Receivables that
are: (a) owed by account debtors which are Investment Grade, (b) Credit Insured
Receivables, (c) fully supported by a letter for credit issued by a financial
institution which is Investment Grade or any other financial institution
acceptable to the Required Banks or (d) otherwise approved by the Required Banks
as “Tier I Eligible Receivables”.

 

23

 

 

“Tier II Eligible Receivables” means, on any date, all Eligible Receivables that
are not Tier I Eligible Receivables (including, without limitation, any portion
of Eligible Receivables which, but for such amount being in excess of the
applicable credit insurance limits, would be Tier I Eligible Receivables),
provided, that the aggregate amount of Tier II Eligible Receivables that are not
Credit Insured Receivables, owing from any one account debtor (and its
Affiliates) included in the Borrowing Base at any time shall not exceed
$1,500,000 (per account debtor (and its Affiliates)), unless otherwise approved
by the Required Banks, provided, further, that the aggregate amount of Tier II
Eligible Receivables included in the Borrowing Base at any time shall not exceed
$6,500,000 (after giving effect to the applicable advance rate), unless
otherwise approved by the Required Banks.

 

“Total Liabilities” means, as at any date, the sum, for the Company (determined
without duplication in accordance with GAAP), of the following: (a) all
Indebtedness (including obligations of the Company and its consolidated
Subsidiaries in respect of letters of credit or similar instruments (whether
drawn or undrawn) issued or accepted for account of such Person) and (b) all
other liabilities of the Company and its consolidated Subsidiaries that should
be classified as liabilities on a balance sheet, including all reserves (other
than general contingency reserves), but excluding all deferred taxes and other
deferred items.

 

“Type” has the meaning assigned to such term in Section 1.03 hereof.

 

“UCC” means the Uniform Commercial Code as adopted in the State of New York.

 

“UCP” means the Uniform Customs and Practice for Documentary Credits (2007
Revision), International Chamber of Commerce Publication No. 600, as the same
may be amended from time to time.

 

“Uncommitted Credit Agreement” means the Uncommitted Credit Agreement dated as
of the date hereof among the Borrower, the lenders party thereto and the
Uncommitted Facility Agent, as the same may be amended, supplemented or
otherwise modified and in effect from time to time.

 

“Uncommitted Facility Agent” means Rabobank in its capacity as “Agent” under and
as defined in the Uncommitted Credit Agreement.

 

“U.S. Dollar Equivalent” means, at any time, (a) as to any amount denominated in
Dollars, the amount thereof at such time and (b) as to any amount denominated in
any other Permitted Currency, the equivalent amount in Dollars as determined by
the Company at such time on the basis of the Spot Rate for the purchase of
Dollars with such Permitted Currency on the most recent date of computation
thereof.

 

1.02        Accounting Terms and Determinations.

 

(a)          GAAP Consistently Applied. All calculations made for the purposes
of determining compliance with this Agreement shall (except as otherwise
expressly provided herein) be made by application of GAAP. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP, as in effect from time to time; provided
that, if the Company notifies the Agent that the Company requests an amendment
to any provision hereof to eliminate the effect of any change occurring after
the date hereof in GAAP or in the application thereof on the operation of such
provision, regardless of whether any such notice is given before or after such
change in GAAP or in the application thereof, then such provision shall be
interpreted on the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.

 

(b)          No Change to Fiscal Year. To enable the ready and consistent
determination of compliance with the covenants set forth in Section 8 hereof,
the Company will not change the last day of its fiscal year from December 31 of
each year, or the last days of the first three fiscal quarters in each of its
fiscal years from March 31, June 30 and September 30 of each year, respectively.

 

24

 

 

(c)          Financial Covenants Determined on a Consolidated Basis. Any and all
financial information delivered pursuant to Section 8.01(a) and (b) shall be
prepared on a consolidated basis for the Company and its Subsidiaries except as
otherwise specifically required thereby. Any and all calculations made hereunder
for purposes of determining compliance with the financial covenants set forth in
Sections 8.09 through 8.11 shall be on a consolidated basis for the Company and
its consolidated Subsidiaries.

 

(d)          Terms Generally. 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 other
modifications set forth therein or herein); (b) any reference herein to any
Person shall be construed to include such Person’s permitted 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 Sections, Exhibits
and Schedules shall be construed to refer to Sections of, and Exhibits and
Schedules to, this Agreement; (e) reference herein to any Law or regulation
shall be construed to include any amendment, replacement or other modification
thereto; and (f) terms that are used herein, defined in the UCC and not
otherwise defined herein shall have the meanings provided for in the UCC.

 

1.03        Types of Loans. Loans hereunder are distinguished by “Type”. The
“Type” of a Loan refers to whether such Loan is a Base Rate Loan or a Eurodollar
Loan, each of which constitutes a Type.

 

Section 2.

Commitments, Loans, Notes and Prepayments.

 

2.01        Loans.

 

(a)          Revolving Loans. Each Bank severally agrees, on the terms and
conditions of this Agreement, to make loans to the Company in Dollars during the
Commitment Period in an aggregate principal amount at any one time outstanding
up to but not exceeding the amount of such Bank’s Revolving Loan Commitment as
in effect from time to time; provided that the aggregate amount of all Credit
Exposure at any one time outstanding shall not exceed the lesser of (x) the
aggregate Revolving Loan Commitments as in effect from time to time and (y) the
Borrowing Base. Subject to the terms and conditions of this Agreement, during
the Commitment Period the Company may borrow, repay and reborrow under the
Revolving Loan Commitments by means of Base Rate Loans and Eurodollar Loans and
may Convert one Type of Loan into Loans of another Type (as provided in
Section 2.10 hereof) or Continue Loans of one Type as Loans of the same Type (as
provided in Section 2.10 hereof), provided that no more than ten separate
Interest Periods in respect of Eurodollar Loans may be outstanding at any one
time.

 

(b)          Intentionally omitted.

 

25

 

 

(c)          Swing Line Commitment; Banks’ Participation. Subject to the terms
and conditions of this Agreement, the Revolving Loan Commitments may be
utilized, upon the request of the Company to the Swing Line Bank, in addition to
the Revolving Loans provided for by clause (a) hereof, to make swing line loans
(the “Swing Line Loans”) to the Company in Dollars during the Commitment Period
in an aggregate principal amount at any one time outstanding up to but not
exceeding $10,000,000 (the “Swing Line Commitment”). Subject to the terms and
conditions of this Agreement, during such period the Company may borrow, repay
and reborrow Swing Line Loans, provided that the Swing Line Bank shall not make
a Swing Line Loan to refinance an outstanding Swing Line Loan. The Swing Line
Bank shall not be permitted or required to make Swing Line Loans if, after
giving effect thereto, (i) the aggregate outstanding principal amount of all
Swing Line Loans would exceed the then existing Swing Line Commitment or (ii)
unless otherwise agreed to by the Swing Line Bank, in its sole discretion, the
sum of all Revolving Loans made by the Swing Line Bank plus the Swing Line
Bank’s Revolving Loan Commitment Percentage of the aggregate amount of all Swing
Line Loans and Letter of Credit Liabilities would exceed the Swing Line Bank’s
then existing Revolving Loan Commitment; provided that the aggregate amount of
all Credit Exposure at any one time outstanding shall not exceed the lesser of
(x) the aggregate Revolving Loan Commitments as in effect from time to time and
(y) the Borrowing Base.

 

(d)          Repayment of Swing Line Loans; Funding of Participations. If (i)
any Swing Line Loan shall be outstanding for more than five consecutive Business
Days, (ii) any Swing Line Loan is or will be outstanding on a date when the
Company requests that a Revolving Loan be made, or (iii) any Default shall occur
and be continuing, then each Bank (other than the Swing Line Bank) irrevocably
agrees that it will, at the request of the Swing Line Bank in its sole and
absolute discretion, make a Revolving Loan (which shall initially be funded as a
Base Rate Loan) in an amount equal to such Bank’s Revolving Loan Commitment
Percentage of the aggregate principal amount of all such Swing Line Loans then
outstanding (such outstanding Swing Line Loans hereinafter referred to as the
“Refunded Swing Line Loans”). On or before 2:00 p.m. New York time on the first
Business Day following receipt by each Bank (other than the Swing Line Bank) of
a request to make Revolving Loans as provided in the preceding sentence, each
Bank (other than the Swing Line Bank) shall deposit in an account specified by
the Swing Line Bank the amount so requested in same day funds and such funds
shall be applied by the Swing Line Bank to repay the Refunded Swing Line Loans.
In connection with the Refunded Swing Line Loans, the Swing Line Bank shall be
deemed to have made Revolving Loans in an amount equal to the Swing Line Bank’s
Revolving Loan Commitment Percentage of the aggregate principal amount of the
Refunded Swing Line Loans. Upon the making (or deemed making, in the case of the
Swing Line Bank) of any Revolving Loans pursuant to this paragraph, the amount
so funded shall become an outstanding Revolving Loan and shall no longer be owed
as a Swing Line Loan. All interest payable with respect to any Revolving Loans
made (or deemed made, in the case of the Swing Line Bank) pursuant to this
paragraph shall be appropriately adjusted to reflect the period of time during
which the Swing Line Bank had outstanding Swing Line Loans in respect of which
such Revolving Loans were made. Each Bank’s (other than the Swing Line Bank’s)
obligation to make the Revolving Loans referred to in this paragraph shall be
absolute and unconditional and shall not be affected by any circumstance,
including (i) any set-off, counterclaim, recoupment, defense or other right
which such Bank may have against the Swing Line Bank, any Obligor or any Person
for any reason whatsoever; (ii) the occurrence or continuation of any Default;
(iii) any adverse change in the condition (financial or otherwise) of any
Obligor; (iv) the acceleration or maturity of the Loans or the termination of
any Commitment after the making of any Swing Line Loan; (v) any breach of any
Basic Document by any Person; or (vi) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing; provided, that if as
a result of the occurrence of any Event of Default described in clauses (f) or
(g) of Section 9 with respect to the Company, any Bank shall be prohibited or
stayed from making any such Revolving Loan referred to in this paragraph, the
Swing Line Bank shall be deemed to have sold and transferred to each other Bank
and each such other Bank shall be deemed to have irrevocably and unconditionally
purchased and received from the Swing Line Bank, without recourse or warranty,
an undivided interest and participation, to the extent of such other Bank’s
Revolving Loan Commitment Percentage of the Swing Line Loan so made and each
such Bank shall immediately pay to the Swing Line Bank an amount equal to each
Revolving Loan otherwise required to be made by it pursuant to this Section in
payment for such participation in the related Swing Line Loan purchased by such
Bank pursuant to this clause (d).

 

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2.02        Borrowings. The Company shall give the Agent notice of each
borrowing hereunder pursuant to a Borrowing Request substantially in the form of
Exhibit I hereto as provided in Section 4.05 hereof, provided, however,
notwithstanding Section 11.02(b) hereof, an authorized officer of the Company
may deliver to the Agent an unsigned Borrowing Request by email to
fm.am.SyndicatedLoans@rabobank.com (or such other email as the Agent may direct
in writing) so long as (i) it has been confirmed promptly by Sandra Kahn (or
another authorized officer) by phone and (ii) the Company delivers to the Agent
a duly signed copy thereof within five (5) Business Days of the date such email
is delivered to the Agent, provided, that without limiting the Company’s
obligations under clause (ii) above, if the signed copy shall not be received,
each of the Agent and the Banks shall be authorized to rely on the unsigned
request (with the same force and effect as a signed request). The Agent shall
promptly notify the Banks of the receipt of each Borrowing Request (including,
without limitation, any unsigned request confirmed by phone) received hereunder
on the date of its effective receipt of the same (including, receipt by email
and phone confirmed). On the date specified for each borrowing hereunder of
Revolving Loans, each Bank shall, subject to the terms and conditions of this
Agreement, make available its Revolving Loan Commitment Percentage of the amount
of such borrowing to the Agent by depositing the same, in immediately available
funds, at an account maintained by the Agent not later than 2:00 p.m., New York
time. The amount so received by the Agent shall, subject to the terms and
conditions of this Agreement, be made available to the Company, by depositing
the same, in immediately available funds, in an account of the Company
designated by the Company.

 

2.03        Letters of Credit. Subject to the terms and conditions of this
Agreement, the Revolving Loan Commitments may be utilized, upon the request of
the Company, in addition to the Revolving Loans and Swing Line Loans provided
for by Section 2.01 hereof, by the issuance by the Issuing Banks of letters of
credit (collectively, “Letters of Credit”) for account of the Company, provided
that in no event shall: (i) the aggregate amount of all Credit Exposure exceed
the lesser of (x) the Borrowing Base plus, with respect to any commercial Letter
of Credit to be issued to secure the purchase price of Inventory, 80% of the
cost of such Inventory that will be Eligible Inventory Ordered Under L/C once
such Letter of Credit is issued, and (y) the aggregate amount of the Revolving
Loan Commitments as in effect from time to time, (ii) the outstanding aggregate
amount of all Letter of Credit Liabilities exceed $75,000,000 (the “L/C Cap”),
(iii) the outstanding aggregate amount of all Letter of Credit Liabilities
arising out of standby Letters of Credit exceed $6,500,000, and (iv) the
expiration date of any Letter of Credit extend beyond the Revolving Credit
Commitment Termination Date, provided, that Letters of Credit with respect to
which the Letter of Credit Liabilities in respect thereof are not in excess of
$50,000,000 may be issued that expire after the Revolving Credit Commitment
Termination Date then in effect, but before the date that is ninety (90) days
thereafter.

 

(a)          Letter of Credit Request Procedure. The Company shall give the
Agent at least two Business Days’ irrevocable prior notice (effective upon
receipt) specifying the Business Day (which shall be no later than 30 days
preceding the Revolving Credit Commitment Termination Date) each Letter of
Credit is to be issued, the name of the applicable Issuing Bank, and the account
party or parties therefor and describing in reasonable detail the proposed terms
of such Letter of Credit (including the beneficiary thereof) and the nature of
the transactions or obligations proposed to be supported thereby (including
whether such Letter of Credit is to be a commercial Letter of Credit or a
standby Letter of Credit). Upon receipt by the applicable Issuing Bank of
confirmation from the Agent in writing that the requested Letter of Credit is
permitted in accordance with the terms hereof, such Issuing Bank shall, on the
requested date, issue a Letter Credit for the account of the Company in
accordance with this Agreement.

 

27

 

 

(b)          Bank Participation in Letters of Credit. Upon the issuance of each
Letter of Credit, the applicable Issuing Bank shall be deemed to have sold and
transferred to each other Bank and each such other Bank shall be deemed
irrevocably and unconditionally to have purchased and received from the
applicable Issuing Bank, without recourse or warranty, an undivided interest and
participation, to the extent of such other Bank’s Revolving Loan Commitment
Percentage of the Letter of Credit Liabilities with respect to the Letter of
Credit so issued.

 

(c)          Drawings on Letters of Credit; Reimbursement. Upon receipt from the
beneficiary of any Letter of Credit of any demand for payment under such Letter
of Credit, the applicable Issuing Bank shall promptly notify the Company
(through the Agent) of the amount to be paid by such Issuing Bank as a result of
such demand and the date on which payment is to be made by such Issuing Bank to
such beneficiary in respect of such demand. Notwithstanding the identity of the
account party of any Letter of Credit, the Company hereby unconditionally agrees
to pay and reimburse (including, for the avoidance of doubt, with proceeds of a
Loan as set forth in clause (d) below) the Agent for the account of the
applicable Issuing Bank for the amount of each demand for payment under such
Letter of Credit made in accordance with the terms thereof at or prior to the
date on which payment is to be made by such Issuing Bank to the beneficiary
thereunder in accordance with the terms thereof, without presentment, demand,
protest or other formalities of any kind.

 

(d)          Borrowing to Fund Reimbursement. Forthwith upon its receipt of a
notice referred to in clause (c) of this Section 2.03, the Company shall advise
the Agent whether or not the Company intends to borrow hereunder to finance its
obligation to reimburse the applicable Issuing Bank for the amount of the
related demand for payment and, if it does, submit a notice of such borrowing as
provided in Section 4.05 hereof. In the event that the Company fails to
reimburse the applicable Issuing Bank for a payment under a Letter of Credit by
the date of such payment, the Agent shall give each Bank prompt notice of the
amount of the demand for payment, specifying such Bank’s Revolving Commitment
Percentage of the amount of the related demand for payment.

 

(e)          Funding of Bank Participation in Letters of Credit. Each Bank
(other than the applicable Issuing Bank) shall pay to the Agent for account of
the applicable Issuing Bank in Dollars and in immediately available funds, the
amount of such Bank’s Revolving Commitment Percentage of any payment under a
Letter of Credit upon notice by such Issuing Bank (through the Agent) to such
Bank requesting such payment and specifying such amount. Each such Bank’s
obligation to make such payment to the Agent for account of the applicable
Issuing Bank under this clause (e), and such Issuing Bank’s right to receive the
same, shall be absolute and unconditional and shall not be affected by any
circumstance whatsoever, including the failure of any other Bank to make its
payment under this clause (e), the financial condition of the Company (or any
other account party), the existence of any Default or the termination of any
Commitment. Each such payment to the applicable Issuing Bank shall be made
without any offset, abatement, withholding or reduction whatsoever.

 

(f)           Payments Received by the Issuing Banks. Upon receipt by the
applicable Issuing Bank from or for account of the Company of any payment in
respect of any Reimbursement Obligation or any such interest or other amount
(including by way of setoff or application of proceeds of any collateral
security) such Issuing Bank shall promptly pay to the Agent for account of each
Bank that has funded its participation in such Reimbursement Obligations, such
Bank’s Revolving Commitment Percentage of such payment, each such payment by
such Issuing Bank to be made in the same money and funds in which received by
such Issuing Bank. In the event any payment received by the applicable Issuing
Bank and so paid to the Banks hereunder is rescinded or must otherwise be
returned by such Issuing Bank, each Bank shall, upon the request of such Issuing
Bank (through the Agent), repay to such Issuing Bank (through the Agent) the
amount of such payment paid to such Bank, with interest at the rate specified in
clause (j) of this Section 2.03.

 

28

 

 

(g)          (i)          Letter of Credit Fees. The Company shall pay to the
Agent for the pro rata account of the Banks (other than Defaulting Banks) in
accordance with their respective Revolving Loan Commitment Percentages), the
following fees:

 

(A)         Commercial Letters of Credit. For each commercial Letter of Credit,
a letter of credit fee in an amount equal to 0.125% flat for each 90 day period
or part thereof between the date of issuance and the expiration date thereof, on
the face amount of such Letter of Credit, payable in arrears on each Quarterly
Date;

 

(B)         Standby Letters of Credit. For each standby Letter of Credit, a
letter of credit fee at a rate per annum equal to 2.35% on the average daily
undrawn amount of such standby Letter of Credit during the period from the date
of issuance through and including the date of drawing of the entire amount or
expiration or termination thereof, payable in arrears on each Quarterly Date;

 

provided that such letter of credit commissions with respect to each Letter of
Credit set forth in clauses (A) and (B) above shall be non-refundable and shall
not be less than $500, and

 

(ii)         Letter of Credit Fronting Fees. The Company shall pay to each
Issuing Bank a fronting fee with respect to each Letter of Credit issued by such
Issuing Bank, which shall accrue at the rate or rates per annum separately
agreed upon between the Company and the applicable Issuing Bank on the daily
amount of the Letter of Credit Liabilities (excluding any portion thereof
attributable to unreimbursed Reimbursement Obligations) during the period from
and including the Closing Date to but excluding the later of the date of
termination of the Revolving Loan Commitments and the date on which there ceases
to be any Letter of Credit Liabilities with respect to such Issuing Bank, such
fronting fees accrued through and including each Quarterly Date to be due and
payable on the tenth (10) Business Day following such Quarterly Date, commencing
on the first such date to occur after the Closing Date; provided that all such
fees shall be payable on the date on which the Revolving Loan Commitments
terminate and any such fees accruing after the date on which the Revolving Loan
Commitments terminate shall be payable upon the expiration of the applicable
Letter of Credit or, if earlier, the date on which the Revolving Loan
Commitments terminate.

 

In addition, the Company shall pay to the Agent for account of the applicable
Issuing Bank, such Issuing Bank’s standard fees with respect to the amendment or
negotiation of any Letter of Credit or processing of drawings thereunder. Any
other fees payable to an Issuing Bank pursuant to this paragraph shall be
payable within 10 Business Days after demand.

 

(h)          Letter of Credit Liability Accounting. At the request of any Bank,
the applicable Issuing Bank shall deliver (through the Agent) to such Bank a
notice describing the aggregate amount of all Letters of Credit outstanding at
the end of any month. Upon the request of any Bank from time to time, the
applicable Issuing Bank shall deliver any other information reasonably requested
by such Bank with respect to each Letter of Credit then outstanding.

 

(i)          Conditions to Issuance. (i) The issuance by the Issuing Banks of
each Letter of Credit shall, in addition to the conditions precedent set forth
in Section 6 hereof, be subject to the conditions precedent that: (A) such
Letter of Credit shall be denominated in Dollars, shall state a maximum
liability thereunder and shall be in such form, contain such terms and support
such transactions as shall be satisfactory to the applicable Issuing Bank
consistent with its then current practices and procedures with respect to
letters of credit of the same type, and (B) the Company has executed and
delivered such applications, agreements and other instruments relating to such
Letter of Credit as the applicable Issuing Bank has reasonably requested
consistent with its then current practices and procedures with respect to
letters of credit of the same type, provided that in the event of any conflict
between any such application, agreement or other instrument and the provisions
of this Agreement or any Security Document, the provisions of this Agreement and
the Security Documents shall control.

 

29

 

 

(ii)         Notwithstanding anything herein to the contrary, no Issuing Bank is
under any obligation to issue or provide any Letter of Credit (including any
renewal of an Auto-Renewal Letter of Credit) unless consented to by such Issuing
Bank and the Agent and, in respect of clauses (A) and (B)(x) below, no Letter of
Credit shall be issued or renewed without the consent of all Banks, if (A) any
order, judgment or decree of any Governmental Authority or arbitrator shall by
its terms purport to enjoin or restrain such Issuing Bank from issuing or
providing such Letter of Credit, or (B) any Requirement of Law applicable to
such Issuing Bank or any request or directive (whether or not having the force
of Law) from any Governmental Authority with jurisdiction over such Issuing Bank
shall (x) prohibit, or request that such Issuing Bank refrain from, the issuance
or provision of such type of Letter of Credit generally or such Letter of Credit
in particular, (y) impose upon such Issuing Bank with respect to such Letter of
Credit any restriction, reserve or capital requirement (in each case for which
such Issuing Bank is not otherwise compensated hereunder) not in effect on the
Closing Date at a time when such Issuing Bank is not otherwise issuing letters
of credit for the account of similarly situated customers without additional
compensation or (z) impose upon such Issuing Bank any unreimbursed loss, cost or
expense (in each case for which such Issuing Bank is not otherwise compensated
hereunder) which was not applicable on the Closing Date and which such Issuing
Bank in good faith deems material to it.

 

(j)          Default Interest. To the extent that any Bank shall fail to pay any
amount required to be paid pursuant to clause (e) or (f) of this Section 2.03 on
the due date therefor, such Bank shall pay interest to the applicable Issuing
Bank (through the Agent) on such amount from and including such due date to but
excluding the date such payment is made at the Federal Funds Rate.

 

(k)         Modifications to Letters of Credit. The issuance by the Issuing
Banks of any modification or supplement to any Letter of Credit that increases
the face amount thereof or extends the maturity date thereof shall be subject to
the same conditions applicable under this Section 2.03 to the issuance of new
Letters of Credit (including, without limitation, the confirmation by the Agent
required under clause (a) above), and no such modification or supplement shall
be issued hereunder unless the respective Letter of Credit affected thereby
would have complied with such conditions had it originally been issued hereunder
in such modified or supplemented form.

 

(l)          Company Indemnification. The Company hereby indemnifies and holds
harmless each Bank and the Agent from and against any and all claims, damages,
losses, liabilities, costs or expenses that such Bank or the Agent may incur (or
that may be claimed against such Bank or the Agent by any Person whatsoever) by
reason of or in connection with the execution and delivery or transfer of or
payment or refusal to pay by any Issuing Bank under any Letter of Credit;
provided that the Company shall not be required to indemnify any Issuing Bank or
the Agent for any such claims, damages, losses, liabilities, costs or expenses
to the extent, but only to the extent, caused by (x) the willful misconduct or
gross negligence of the applicable Issuing Bank in determining whether a request
presented under any Letter of Credit complied with the terms of such Letter of
Credit or (y) the applicable Issuing Bank’s failure to pay under any Letter of
Credit after the presentation to it of a request strictly complying with the
terms and conditions of such Letter of Credit or (z) the requirement of any Bank
to pay interest pursuant to Section 2.03(j) hereof. Nothing in this Section 2.03
is intended to limit the other obligations of the Company, any Bank or the Agent
under this Agreement.

 

30

 

 

(m)         Obligations Absolute. The Company’s Reimbursement Obligations shall
be absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability of any
Letter of Credit, or any term or provision therein, (ii) any draft or other
document presented under a Letter of Credit proving to be forged, fraudulent or
invalid in any respect or any statement therein being untrue or inaccurate in
any respect, (iii) payment by the applicable Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
strictly with the terms of such Letter of Credit, (iv) the existence of any
claim, counterclaim, setoff, defense or other right that the Company may have at
any time against any beneficiary or any transferee of any Letter of Credit, the
relevant Issuing Bank or any other Person, whether in connection with this
Agreement, the transactions contemplated hereby or by such Letter of Credit or
any agreement or instrument relating thereto, or any unrelated transaction, and
(v) any other event or circumstance whatsoever, whether or not similar to any of
the foregoing, that might, but for the provisions of this Section, constitute a
legal or equitable discharge of Company’s obligations hereunder. In addition to
the forgoing, the Company hereby assumes all risks of the acts or omissions of
any beneficiary or transferee with respect to its use of any Letter of Credit;
provided, that this assumption is not intended to, and shall not, preclude the
Company’s pursuing such rights and remedies as it may have against the
beneficiary or transferee at law or under any other agreement.

 

(n)          Exculpation. Neither the Agent, the Banks nor the applicable
Issuing Bank, nor any of their respective officers, directors, employees,
attorneys and agents shall have any liability or responsibility by reason of or
in connection with the issuance or transfer of any Letter of Credit by the
applicable Issuing Bank or any payment or failure to make any payment thereunder
(irrespective of any of the circumstances referred to in the preceding clause
(m)), or any error, omission, interruption, loss or delay in transmission or
delivery of any draft, notice or other communication under or relating to any
Letter of Credit (including any document required to make a drawing thereunder),
any error in interpretation of technical terms or any consequence arising from
causes beyond the control of the applicable Issuing Bank; provided that the
foregoing shall not be construed to excuse the applicable Issuing Bank from
liability to the Company to the extent of any direct damages (as opposed to
consequential damages, claims in respect of which are hereby waived by the
Company to the extent permitted by applicable Law) suffered by the Company that
are caused solely by the applicable Issuing Bank’s gross negligence or willful
misconduct when determining whether drafts and other documents presented under a
Letter of Credit comply with the terms thereof. The parties hereto expressly
agree that:

 

(i)          The Issuing Banks may accept documents that appear on their face to
be in substantial compliance with the terms of a Letter of Credit without
responsibility for further investigation, regardless of any notice or
information to the contrary, and may make payment upon presentation of documents
that appear on their face to be in substantial compliance with the terms of such
Letter of Credit;

 

(ii)         The Issuing Banks shall have the right, in their sole discretion,
to decline to accept such documents and to make such payment if such documents
are not in strict compliance with the terms of such Letter of Credit; and

 

(iii)        This sentence shall establish the standard of care to be exercised
by the Issuing Banks when determining whether drafts and other documents
presented under a Letter of Credit comply with the terms thereof (and the
parties hereto hereby waive, to the extent permitted by applicable Law, any
standard of care inconsistent with the foregoing).

 

31

 

 

(o)          Auto-Renewal Letters of Credit. If the Company so requests in any
applicable Letter of Credit request (in accordance with Section 2.03(a) hereof),
the applicable Issuing Bank may, in its sole and absolute discretion, agree to
issue a Letter of Credit that has automatic renewal provisions (each, an
“Auto-Renewal Letter of Credit”), provided that any such Auto-Renewal Letter of
Credit must permit (i) the Company to prevent any such renewal by delivering
written notice thereof to such Issuing Bank not less than five (5) Business Days
prior to the applicable Nonrenewal Notice Date (as defined below) and (ii) such
Issuing Bank to prevent any such renewal at least once during the then current
term of such Letter of Credit by giving prior notice to the beneficiary thereof
not later than a specified date to be agreed upon at the time such Letter of
Credit is issued, which shall occur prior to the date that is thirty (30) days
after the Revolving Credit Commitment Termination Date (the “Nonrenewal Notice
Date”). Unless otherwise directed in writing by the applicable Issuing Bank at
least thirty (30) days prior to the Nonrenewal Notice Date, the Company shall
not be required to make a specific request to such Issuing Bank for any renewal
of an Auto-Renewal Letter of Credit, and such Issuing Bank shall not be required
to provide prior notice to the Company, the Agent or any Bank of any pending
renewal of an Auto-Renewal Letter of Credit. Once an Auto-Renewal Letter of
Credit has been issued, the Company and the Banks shall be deemed to have
authorized the applicable Issuing Bank to permit the renewal of such Letter of
Credit at any time to a date not later than ninety (90) days after the Revolving
Credit Commitment Termination Date (subject to the provisions of Section
2.11(b)(ii) hereof), provided, however, that such Issuing Bank shall have no
obligation to permit any renewal of an Auto-Renewal Letter of Credit if (A) such
Issuing Bank has determined that it would have no obligation at such time to
issue such Letter of Credit in its renewed form under the terms hereof (by
reason of the provisions of Section 2.03(i) or otherwise) or (B) after giving
effect to any such renewal, the expiration date of such Auto-Renewal Letter of
Credit would occur more than ninety (90) days after the Revolving Credit
Commitment Termination Date or the next occurring Nonrenewal Notice Date of such
Auto-Renewal Letter of Credit would occur more than thirty (30) days after the
Revolving Credit Commitment Termination Date; provided, further however, that
the Issuing Bank shall not permit any renewal of an Auto-Renewal Letter of
Credit if it has received notice (in writing) on or before the date that is
three Business Days before the Nonrenewal Notice Date (1) from the Agent that
the Required Banks have elected not to permit such extension or (2) from the
Agent, the Required Banks or the Company that one or more of the applicable
conditions specified in Sections 2.03(i) or Section 6.02 is not then satisfied
or waived in accordance with Section 11.04. For the avoidance of doubt, in no
event shall the issuance or renewal of one or more Auto-Renewal Letters of
Credit cause the cap in the second proviso to the first sentence of Section 2.03
to be exceeded.

 

(p)          Issuance Caps. Notwithstanding anything herein to the contrary, no
Issuing Bank shall be obligated to issue any Letter of Credit if, after giving
effect to the issuance of such Letter of Credit, the aggregate outstanding
Letter of Credit Liabilities attributed to Letter of Credit issued by such
Issuing Bank exceeds such Issuing Bank’s Issuance Cap, provided that subject to
the terms and conditions hereof, each Issuing Bank may issue Letters of Credit
on a discretionary basis during such time as the aggregate outstanding Letter of
Credit Liabilities attributed to Letters of Credit issued by such Issuing Bank
exceeds such Issuing Bank’s Issuance Cap, but the applicable Issuing Bank shall
have no obligation to do so.

 

(q)          Agent Consent. If any Issuing Bank shall issue, extend or amend any
Letter of Credit without obtaining prior consent of the Agent (as provided in
clause (a) above), such Letter of Credit (A) shall for all purposes be deemed to
have been issued by such Issuing Bank solely for its own account and risk and
(B) shall not be considered a Letter of Credit outstanding under this Agreement
(and therefore shall not be included when calculating the Credit Exposure), and
no Bank shall be deemed to have any participation therein, effective as of the
date of such issuance, amendment or extension, as the case may be, unless the
Required Banks expressly consent thereto; provided, however, that to be
considered a Letter of Credit outstanding under this Agreement, the consent of
all Banks shall be required if any such issuance, amendment or extension is not
then permitted hereunder by reason of the provisions of this Section 2.03,
provided further that in the event that such a Letter of Credit shall be issued,
it shall not result in a violation of Section 8.07 hereof or an Event of Default
solely as a result of such issuance.

 

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(r)          Successor Issuing Banks. (i) Any Issuing Bank may resign as an
Issuing Bank upon sixty (60) days prior written notice to the Agent, the Banks
and the Company, provided that (x) any such resignation shall be subject to the
condition that the appointment of a successor pursuant to this Section 2.03(r)
shall have occurred and after giving effect thereto, the aggregate Issuance Caps
shall not be less than the L/C Cap and (y) any resignation by Rabobank shall
only be permitted in connection with (A) Rabobank’s assignment of all of its
right, title and interest in all Loans, Letters of Credit and its other Loan
Obligations to a Person that is not an Affiliate of Rabobank, in accordance with
Section 11.06 hereof and (B) its resignation as Agent. If any Issuing Bank shall
provide notice of its resignation, then the Company may appoint from among the
Banks a successor issuer of Letters of Credit, whereupon, if such Bank shall
accept such appointment (in its sole discretion), such successor issuer shall
succeed to the rights, powers and duties of the resigning Issuing Bank under
this Agreement and the other Basic Documents, and the term “Issuing Bank” shall
include such successor issuer of Letters of Credit effective upon such
appointment. At the time such resignation shall become effective, the Company
shall pay to the resigning Issuing Bank all accrued and unpaid fees payable by
it pursuant to Section 2.03(g). The acceptance of any appointment as an Issuing
Bank hereunder in accordance with this Agreement, shall be evidenced by an
agreement entered into by such successor issuer of Letters of Credit, in a form
satisfactory to the Company and the Agent and, from and after the effective date
of such agreement, such successor issuer of Letters of Credit shall become an
“Issuing Bank” hereunder. After the resignation of any Issuing Bank hereunder,
the resigning Issuing Bank shall remain a party hereto and shall continue to
have all the rights and obligations of an Issuing Bank under this Agreement and
the other Basic Documents with respect to Letters of Credit issued by it prior
to such resignation, but shall not be required to issue additional Letters of
Credit. In connection with any resignation pursuant to this Section 2.03(r), the
Company, the resigning Issuing Bank and the successor issuer of Letters of
Credit shall arrange to have any outstanding Letters of Credit issued or
provided by the resigning Issuing Bank replaced with Letters of Credit issued or
provided by the successor issuer of Letters of Credit. After any resigning
Issuing Bank’s resignation as an Issuing Bank, the provisions of this Agreement
relating to such Issuing Bank shall inure to its benefit as to any actions taken
or omitted to be taken by it (A) while it was an Issuing Bank under this
Agreement or (B) at any time with respect to Letters of Credit issued by it.

 

(ii)         To the extent that there are, at the time of any resignation as set
forth in clause (i) above, any outstanding Letters of Credit, nothing herein
shall be deemed to impact or impair any rights and obligations of any of the
parties hereto with respect to such outstanding Letters of Credit (including,
without limitation, any obligations related to the payment of fees or the
reimbursement or funding of amounts drawn), except that the Company, the
resigning Issuing Bank and the successor issuer of Letters of Credit shall have
the additional obligations regarding outstanding Letters of Credit described in
clause (i) above.

 

(s)          UCP; ISP. Each Letter of Credit (other than each standby Letter of
Credit), except as otherwise herein or therein expressly stated, is subject to
the UCP and to the extent not inconsistent therewith, shall also be subject to
the Uniform Commercial Code of the State of New York, as in effect from time to
time. Each standby Letter of Credit, except as otherwise herein or therein
expressly stated, is subject to ISP and to the extent not inconsistent
therewith, shall also be subject to the Uniform Commercial Code of the State of
New York, as in effect from time to time.

 

2.04        Intentionally Omitted.

 

2.05        Changes of the Commitment.

 

(a)          Revolving Credit Commitment Termination Date. The Commitment shall
be automatically reduced to zero on the Revolving Credit Commitment Termination
Date.

 

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(b)          Optional Termination. The Company has the right at any time or from
time to time (i) subject to the repayment in full of any Loans and Reimbursement
Obligations outstanding and so long as each issued Letter of Credit has expired,
terminated or been fully Cash Collateralized in the manner set forth in Section
2.11(b)(ii) hereof, to terminate the Revolving Loan Commitments and (ii) to
reduce the unused amount of the Revolving Loan Commitments (for which purpose
use of the Commitments shall be deemed to include the aggregate amount of Letter
of Credit Liabilities and Swing Line Loans); provided that (w) the Company shall
give notice of each such termination or reduction as provided in Section 4.05
hereof, (x) each partial reduction shall be in an amount equal to $10,000,000
(or an integral multiple of $10,000,000 in excess thereof), (y) each such
partial reduction shall be applied pro rata to reduce the Revolving Loan
Commitment of each Bank and (z) if the Revolving Loan Commitment shall be
reduced to an amount less than either the Swing Line Commitment or the L/C Cap,
the Swing Line Commitment and/or the L/C Cap, as applicable, shall be
automatically reduced to the amount of the reduced Revolving Loan Commitments.

 

(c)          No Reinstatement. The Revolving Loan Commitment once terminated or
reduced may not be reinstated.

 

(d)          Increases in Revolving Loan Commitments. The Revolving Loan
Commitments may be increased (so long as no Default shall have occurred and be
continuing), with the consent of the Agent, each Fronting Bank (such consent of
each Fronting Bank to be required only in connection with an increase that
involves a New Bank), the Increasing Banks and the Company, at any time and from
time to time, prior to the Revolving Credit Commitment Termination Date in an
aggregate principal amount (for all such increases) of up to $75,000,000 (the
“Maximum Aggregate Increase Amount”) as follows:

 

(i)          The Company may at any time make a written request for such
increase to the Agent, who shall forward a copy of any such request to each of
the Banks. Each request by the Company pursuant to the immediately preceding
sentence shall specify a proposed effective date of such increase which shall
not be less than 45 days after the date of such request (the “Requested Increase
Effective Date”), the aggregate amount of such requested increase in Revolving
Loan Commitments, which shall be in an amount equal to $20,000,000 or, if less,
the unused portion of the Maximum Aggregate Increase Amount (or an incremental
multiple of $5,000,000 in excess thereof) (the “Increase Amount”), and shall
constitute an invitation to each Bank to increase its Revolving Loan Commitment
by a ratable portion of such Increase Amount.

 

(ii)         Each Bank, acting in its sole discretion and with no obligation to
increase its Revolving Loan Commitment pursuant to this Section 2.05(d), shall
by written notice to the Company and the Agent advise the Company and the Agent
whether or not such Bank agrees to all or any portion of such increase in
Revolving Loan Commitment within thirty (30) days (or such lesser number of days
as agreed by the Company and the Agent) after the Company’s request. Any such
Bank may, in its sole discretion, accept all of such ratable increase, a portion
of such increase, or decline to accept any of such increase in Revolving Loan
Commitment. If any Bank shall not have responded affirmatively within such
thirty (30)-day (or lesser, if applicable) period, such Bank shall be deemed to
have rejected the Company’s request for an increase in Revolving Loan Commitment
in full. Promptly following the conclusion of such thirty (30)-day (or lesser,
if applicable) period, the Agent shall notify the Company of the results of such
request to the Banks to so increase the Revolving Loan Commitments by the
Increase Amount.

 

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(iii)        If the aggregate amount of the increases in Revolving Loan
Commitment which the Banks have accepted in accordance with clause (ii) of this
Section 2.05(d) shall be less than the Increase Amount, the Company and the
Agent may offer to such additional Persons as may be agreed by the Company and
the Agent (“New Banks”) the opportunity to make available such amount of new
Revolving Loan Commitments as may be required so that the aggregate increases in
Revolving Loan Commitments by the existing Banks and new Revolving Loan
Commitments by the New Banks shall equal the Increase Amount. The effectiveness
of all such increases in Revolving Loan Commitments are subject to the
satisfaction of the following conditions: (A) each Bank that so elects to
increase its Revolving Loan Commitments (each an “Increasing Bank”), each New
Bank, the Agent, the Issuing Banks, the Swing Line Bank and the Company shall
have executed and delivered an agreement, substantially in the form of Exhibit F
(an “Increase and New Bank Agreement”) and such other documents reasonable
required by the Agent; (B) any fees and other amounts (including, without
limitation, pursuant to Section 11.03) payable by the Company in connection with
such increase shall have been paid; (C) any other amounts then due hereunder
shall have been paid; and (D) delivery to the Agent of a certificate of an
authorized officer of the Company as to the matters set forth in Sections 6.02.

 

(iv)        Upon the Requested Increase Effective Date, Schedule 1.0 of the
Increase and New Bank Agreement, which shall reflect the Revolving Loan
Commitments and Revolving Loan Commitment Percentages of the Banks at such time,
shall be deemed to supersede Schedule A hereto without any further action or
consent of any party, and each Bank that is not increasing its Revolving Loan
Commitment under this Section 2.05(d) hereby agrees to the reallocation of the
Commitments and Revolving Loan Commitment Percentages as set forth in the
applicable Increase and New Bank Agreement (but, for the avoidance of doubt, not
any change in such Bank’s Commitment). The Agent shall cause a copy of such
revised Schedule A to be available to the Issuing Banks and the Banks.

 

2.06        Commitment Fee. The Company shall pay to the Agent for account of
each Bank a commitment fee on the daily average unused portion of the Revolving
Loan Commitment of such Bank (for which purpose (a) the aggregate amount of any
Letter of Credit Liabilities shall be deemed to be a use of the Revolving Loan
Commitment and (b) the aggregate amount of any Swing Line Loans then outstanding
shall not be deemed to be a use of the Revolving Loan Commitment), for the
period from and including the date of this Agreement to but not including the
earlier of the date the Revolving Loan Commitment is terminated and the
Revolving Credit Commitment Termination Date, at a rate per annum equal to
0.50%. Accrued commitment fees shall be payable on each Quarterly Date and on
the earlier of the date the Revolving Loan Commitment is terminated and the
Revolving Credit Commitment Termination Date. For purposes of this paragraph,
the Revolving Loan Commitment of a Defaulting Bank shall be deemed to be fully
utilized for as long as such Bank is a Defaulting Bank.

 

2.07        Lending Offices. The Loans of each Type made by each Bank shall be
made and maintained at such Bank’s Applicable Lending Office for Loans of such
Type.

 

2.08        Several Obligations; Remedies Independent. The failure of any Bank
to make any Loan or other extension of credit to be made by it on the date
specified therefor shall not relieve any other Bank of its obligation to make
its Loan or other extension of credit on such date and no Bank has any
obligation to the Agent or any other Bank for the failure by any such other Bank
to make any Loan or other extension of credit required to be made by such other
Bank. The amounts payable by the Company at any time hereunder and under the
Notes to each Bank shall be a separate and independent debt and each Bank shall
be entitled to protect and enforce its rights arising out of this Agreement and
the Notes, and it shall not be necessary for any other Bank or the Agent to
consent to, or be joined as an additional party in, any proceedings for such
purposes.

 

2.09        Evidence of Indebtedness.

 

(a)          Maintenance of Loan Accounts by Banks. Each Bank shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Company to such Bank resulting from each Loan made by such
Bank, including the amounts of principal and interest payable and paid to such
Bank from time to time hereunder.

 

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(b)          Maintenance of Loan Accounts by the Agent. The Agent shall maintain
accounts in which it shall record: (i) the amount of each Loan made hereunder,
the Type thereof and the Interest Period applicable thereto; (ii) the amount of
any principal or interest due and payable or to become due and payable from the
Company to each Bank hereunder; and (iii) the amount of any sum received by the
Agent hereunder for the account of the Banks and each Bank’s share thereof.

 

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

 

(d)          Promissory Notes. Any Bank may request that Loans made by it be
evidenced by a promissory note substantially in the form of Exhibit A hereto. In
such event, the Company shall prepare, execute and deliver to such Bank a
promissory note payable to the order of such Bank (or, if requested by such
Bank, to such Bank and its registered assigns) and in a form approved by the
Agent. Thereafter, the Loans evidenced by such promissory note and interest
thereon shall at all times (including after assignment pursuant to Section 11.05
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).

 

2.10        Optional Prepayments and Conversions or Continuations of Loans.
Subject to Section 4.04 hereof, the Company has the right to prepay Loans, or to
Convert Loans of one Type into Loans of another Type or Continue Loans of one
Type as Loans of the same Type, at any time or from time to time, in whole or in
part, without premium or penalty, except as may be required by Section 5 hereof,
provided that: (a) the Company shall give the Agent notice of each such
prepayment, Conversion or Continuation pursuant to a Notice of Prepayment,
Conversion or Continuation substantially in the form of Exhibit J hereto and as
provided in Section 4.05 hereof (and, upon the date specified in any such notice
of prepayment, the amount to be prepaid shall become due and payable hereunder);
provided, however, notwithstanding Section 11.02(b) hereof, an authorized
officer of the Company may deliver to the Agent an unsigned Notice of
Prepayment, Conversion or Continuation by email to
fm.am.SyndicatedLoans@rabobank.com (or such other email as the Agent may direct
in writing) so long as the Company delivers to the Agent a signed copy thereof
relating to such notice within five (5) Business Days of the date such email is
delivered to the Agent, provided, that without limiting the Company’s
obligations above, if the signed copy shall not be received, each of the Agent
and the Banks shall be authorized to rely on the unsigned notice (with the same
force and effect as a signed notice); and (b) a Eurodollar Loan may be prepaid
or Converted only on the last day of an Interest Period for such Loan.
Notwithstanding the foregoing, and without limiting the rights and remedies of
the Banks under Section 9 hereof, in the event that any Event of Default exists,
the Agent may (and at the request of the Required Banks shall) suspend the right
of the Company to Convert any Loan into a Eurodollar Loan, or to Continue any
Loan as a Eurodollar Loan, in which event all Eurodollar Loans shall be
Converted (on the last day(s) of the respective Interest Periods therefor) to
Base Rate Loans.

 

2.11        Mandatory Prepayments.

 

(a)          Borrowing Base. Until the Revolving Credit Commitment Termination
Date, the Company shall from time to time prepay the Loans (and/or provide cover
for Letter of Credit Liabilities as specified in clause (b) below) in such
amounts as shall be necessary so that at all times the aggregate outstanding
amount of the Credit Exposure shall not exceed the lesser of the Borrowing Base
and the aggregate amount of the Revolving Loan Commitments, such amount to be
applied, first, to Swing Line Loans outstanding, second, to Revolving Loans
outstanding, subject to the terms of Section 2.3 of the Intercreditor Agreement,
provided, that if after giving effect to Section 2.3 of the Intercreditor
Agreement, a deficiency shall continue to exist, an Event of Default under
Section 9.01(a) hereof shall occur.

 

36

 

 

(b)          Cover for Letter of Credit Liabilities. (i) In the event that the
Company shall be required pursuant to this Section 2.11 to provide cover for
Letter of Credit Liabilities, the Company shall effect the same by depositing
Cash Collateral with the Agent in an amount equal to the required cover amount,
which funds shall be retained by the Agent in the Collateral Account (as
collateral security in the first instance for the Letter of Credit Liabilities)
until such time as the relevant Letters of Credit have been terminated and all
of the Letter of Credit Liabilities in respect thereof paid in full or such time
as such funds are no longer required pursuant to Section 2.11(a) hereof;
provided that no amounts so held shall be released if an Event of Default then
exists.

 

(ii)         The Company shall provide cover for each Letter of Credit with an
expiry date after the Revolving Credit Commitment Termination Date by depositing
Cash Collateral with the Agent on or prior to the date that is five (5) Business
Days prior to the Revolving Credit Commitment Termination Date in an amount
equal to 103% of the face amount of each such Letter of Credit which funds shall
be retained by the Agent in the Collateral Account (as collateral security in
the first instance for the Letter of Credit Liabilities) until such time as the
relevant Letters of Credit have been terminated and all of the Letter of Credit
Liabilities in respect thereof paid in full.

 

Section 3.

Payments of Principal and Interest.

 

3.01        Repayment of Loans. The Company hereby promises to pay to the Agent
for account of each Bank the entire outstanding principal amount of the Loans,
and each Loan shall mature and be due and payable, on the Revolving Credit
Commitment Termination Date.

 

3.02        Interest.

 

(a)          Revolving Loans. The Company hereby promises to pay to the Agent
for account of each Bank interest on the unpaid principal amount of each
Revolving Loan made by such Bank for the period from and including the date of
such Revolving Loan to but excluding the date such Revolving Loan shall be paid
in full, at the following rates per annum:

 

(i)          during such periods as such Revolving Loan is a Base Rate Loan, the
Base Rate (as in effect from time to time) plus the Applicable Margin; and

 

(ii)         during such periods as such Revolving Loan is a Eurodollar Loan,
for each Interest Period relating thereto, the Eurodollar Rate for such
Revolving Loan for such Interest Period plus the Applicable Margin.

 

(b)          Swing Line Loans. The Company hereby promises to pay to the Agent
for account of the Swing Line Bank interest on the unpaid principal amount of
each Swing Line Loan made by the Swing Line Bank for the period from and
including the date of such Swing Line Loan to but excluding the date such Swing
Line Loan shall be paid in full, at the Federal Funds Rate (as in effect from
time to time) plus the Applicable Margin.

 

37

 

 

(c)          Post Default Interest. Notwithstanding the foregoing, the Company
hereby promises to pay to the Agent, at the election of the Required Banks, for
account of each Bank interest at the applicable Post-Default Rate on any
principal of any Loan, on any Reimbursement Obligation and on any other amount
payable by the Company hereunder or under the Notes that shall not be paid in
full when due (whether at stated maturity, by acceleration, by mandatory
prepayment or otherwise), for the period from and including the due date thereof
to but excluding the date the same is paid in full.

 

(d)          Payment of Interest. Accrued interest on each Loan shall be payable
(i) in the case of a Base Rate Loan and Swing Line Loans, monthly on the last
Business Day of each month, (ii) in the case of a Eurodollar Loan, on the last
day of each Interest Period therefor, and (iii) in the case of any Loan, upon
the payment or prepayment thereof or the Conversion of such Loan to a Loan of
another Type (but only on the principal amount so paid, prepaid or Converted),
except that interest payable at the Post-Default Rate shall be payable from time
to time on demand. Promptly after the determination of any interest rate
provided for herein or any change therein, the Agent shall give notice thereof
to the Banks to which such interest is payable and to the Company.

 

Section 4.

Payments; Computations; Etc.

 

4.01        Payments.

 

(a)          Payments Generally. Except to the extent otherwise provided herein,
all payments of principal, interest, Reimbursement Obligations and other amounts
to be made by the Company under this Agreement and the other Basic Documents,
and, except to the extent otherwise provided therein, all payments to be made by
the Obligors under any other Basic Document, shall be made in Dollars, in
immediately available funds, without deduction, set-off or counterclaim, to the
Agent, not later than 1:00 p.m. New York time on the date on which such payment
shall become due (each such payment made after such time on such due date to be
deemed to have been made on the next succeeding Business Day). The Company
shall, at the time of making each payment under this Agreement or any Note, for
account of any Bank specify to the Agent (which shall so notify the intended
recipient(s) thereof) the Loans, Reimbursement Obligations or other amounts
payable by the Company hereunder to which such payment is to be applied (and in
the event that the Company fails to so specify, or if an Event of Default
exists, the Agent may distribute such payment to the Banks for application in
such manner as it, subject to Section 4.03 hereof, may determine to be
appropriate).

 

(b)          Payments to the Banks. Except as otherwise provided herein, each
payment received by the Agent under this Agreement or any Note for account of
any Bank shall be paid by the Agent promptly to such Bank, in immediately
available funds, for account of such Bank’s Applicable Lending Office for the
Loan or other obligation in respect of which such payment is made.

 

(c)          Payments on a Non-Business Day. If the due date of any payment
under this Agreement or any Note would otherwise fall on a day that is not a
Business Day, such date shall be extended to the next succeeding Business Day,
and interest shall be payable for any principal so extended for the period of
such extension.

 

4.02         Computations. Interest on Loans, Reimbursement Obligations and all
fees shall be computed on the basis of a year of 360 days and actual days
elapsed (including the first day but excluding the last day) occurring in the
period for which payable.

 

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4.03        Pro Rata Treatment. Except to the extent otherwise provided herein:
(a) each borrowing of Loans from and participation interests in Swing Line Loans
and Letters of Credit purchased by the Banks shall be made from the Banks, each
payment of commitment fee under Section 2.06 hereof in respect of Revolving Loan
Commitments shall be made for account of the Banks, each payment of Letter of
Credit fee under Section 2.03(g)(i) hereof, and each termination or reduction of
the amount of the Revolving Loan Commitments under Section 2.05 hereof shall be
applied to the Revolving Loan Commitments of the Banks, pro rata according to
the amounts of their respective Revolving Loan Commitments; (b) each payment or
prepayment of principal of Loans by the Company shall be made for account of the
Banks pro rata in accordance with the respective unpaid principal amounts of the
Loans held by them; and (c) each payment of interest on Loans by the Company
shall be made for account of the Banks pro rata in accordance with the amounts
of interest on such Loans then due and payable to the Banks.

 

4.04        Minimum Amounts. Except for mandatory prepayments made pursuant to
Section 2.11 hereof:

 

(a)          each borrowing, Conversion and partial prepayment of principal of
Revolving Loans shall be in an amount at least equal to the following:

 

(i)          $1,000,000 or multiples of $250,000 in excess thereof in the case
of Eurodollar Loans,

 

(ii)         $250,000 or multiples of $50,000 in excess thereof in the case of
Base Rate Loans; and

 

(b)          each borrowing and partial prepayment of principal of Swing Line
Loans shall be in an amount at least equal to $500,000 or multiples of $25,000
in excess thereof

 

(borrowings, Conversions or prepayments of or into Loans of different Types or,
in the case of Eurodollar Loans, having different Interest Periods at the same
time hereunder to be deemed separate borrowings, Conversions and prepayments for
purposes of the foregoing, one for each Type or Interest Period).

 

4.05        Certain Notices. Notices by the Company to the Agent of terminations
or reductions of the Revolving Loan Commitments, of borrowings, Conversions,
Continuations and optional prepayments of Loans, of Types of Loans and of the
duration of Interest Periods shall be irrevocable. All such notices shall be
received by the Agent not later than 10:00 a.m. New York time on the number of
Business Days prior to the date of the relevant termination, reduction,
borrowing, Conversion, Continuation or prepayment or the first day of such
Interest Period specified below, provided that any notice received after the
time set forth above on any Business Day or on any date other than a Business
Day shall be deemed received on the next succeeding Business Day:

 

Notice   Number of Business Days Prior       Termination or reduction of the
Commitments   Five       Borrowing or prepayment of, or Conversions into, Base
Rate Loans or borrowing or prepayment of Swing Line Loans   Same day      
Borrowing or prepayment of, Conversions into, Continuations as, or duration of
Interest Period for, Eurodollar Loans   Three

 

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Each such notice of termination or reduction shall specify the amount of the
Revolving Loan Commitments to be terminated or reduced. Each such notice of
borrowing, Conversion, Continuation or optional prepayment shall specify the
amount (subject to Section 4.04 hereof) and Type of each Loan to be borrowed,
Converted, Continued or prepaid and the date of borrowing, Conversion,
Continuation or optional prepayment (which shall be a Business Day). Each such
notice of the duration of an Interest Period shall specify the Loans to which
such Interest Period is to relate. In the event that the Company fails to select
the Type of Loan, or the duration of any Interest Period for any Eurodollar
Loan, within the time period and otherwise as provided in this Section 4.05,
such Loan (if outstanding as a Eurodollar Loan) will be automatically Converted
into a Base Rate Loan on the last day of the then current Interest Period for
such Loan or (if outstanding as a Base Rate Loan) will remain as, or (if not
then outstanding) will be made as, a Base Rate Loan.

 

4.06        Non-Receipt of Funds by the Agent. Unless the Agent has been
notified by a Bank or the Company (the “Payor”) prior to the date on which the
Payor is to make payment to the Agent of (in the case of a Bank) the proceeds of
a Loan to be made by such Bank hereunder or (in the case of the Company) a
payment to the Agent for account of one or more of the Banks hereunder (such
payment being herein called the “Required Payment”), which notice shall be
effective upon receipt, that the Payor does not intend to make the Required
Payment to the Agent, the Agent may assume that the Required Payment has been
made and may, in reliance upon such assumption (but shall not be required to),
make the amount thereof available to the intended recipient(s) on such date;
and, if the Payor has not in fact made the Required Payment to the Agent, the
recipient(s) of such payment shall, on demand, repay to the Agent the amount so
made available together with interest thereon in respect of each day during the
period commencing on the date (the “Advance Date”) such amount was so made
available by the Agent until the date the Agent recovers such amount at a rate
per annum equal to the Federal Funds Rate for such day and, if such recipient(s)
shall fail promptly to make such payment, the Agent shall be entitled to recover
such amount, on demand, from the Payor, together with interest as aforesaid,
provided that if neither the recipient(s) nor the Payor shall return the
Required Payment to the Agent within three Business Days of the Advance Date,
then, retroactively to the Advance Date, the Payor and the recipient(s) shall
each be obligated to pay interest on the Required Payment as follows:

 

(i)          if the Required Payment shall represent a payment to be made by the
Company to the Banks, (x) the Company shall be obligated retroactively to the
Advance Date to pay interest in respect of the Required Payment at the
Post-Default Rate and (y) the recipient(s) shall be obligated retroactively to
the Advance Date to pay interest in respect of the Required Payment at the
Federal Funds Rate (and, in case the recipient(s) shall return the Required
Payment to the Agent, without limiting the obligation of the Company under
Section 3.02 hereof to pay interest to such recipient(s) at the Post-Default
Rate in respect of the Required Payment); and

 

(ii)         if the Required Payment shall represent proceeds of a Loan to be
made by the Banks to the Company, (x) the Payor shall be obligated retroactively
to the Advance Date to pay interest in respect of the Required Payment at the
Federal Funds Rate and (y) if such Payor’s Required Payment is not made
available to the Agent by such Payor within five (5) Business Days of such
Advance Date, the Agent shall also be entitled to recover such amount for its
own account with interest thereon at the rate per annum applicable to Base Rate
Loans, within five (5) Business Days of demand from the Company.

 

40

 

 

4.07        Sharing of Payments, etc.

 

(a)          Set off. If an Event of Default exists, each Bank and each of their
respective Affiliates are hereby authorized at any time and from time to time,
to the fullest extent permitted by Law and Section 10.14, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness or obligations at any time owing by such
Bank or any Affiliates to or for the credit or the account of any Obligor
against any of and all the Obligations of any Obligor now or hereafter existing
under any Basic Document held by such Bank or Affiliate, irrespective of whether
or not such Bank shall have made any demand and although such Obligations may be
unmatured. The rights of each Bank under this Section are in addition to other
rights and remedies (including other rights of setoff) which such Bank may have.

 

(b)          Sharing of Payments on Loan Obligations. If any Bank shall obtain
from any Obligor payment of any Loan Obligation owing to it through the exercise
of any right of set-off, banker’s lien or counterclaim or similar right or
otherwise (other than from the Agent as provided herein but including as a
result of the rights under Section 4.07(a)), and, as a result of such payment,
such Bank has received a greater percentage of the Loan Obligations due to such
Bank than the percentage received by any other Bank, it shall promptly purchase
from such other Banks participations in (or, if and to the extent specified by
such Bank, direct interests in) the Loan Obligations owing to such other Banks
in such amounts, and make such other adjustments from time to time as shall be
equitable, to the end that all the Banks shall share the benefit of such excess
payment (net of any expenses that may be incurred by such Bank in obtaining or
preserving such excess payment) pro rata in accordance with the Loan Obligations
owing to each of the Banks. To such end all the Banks shall make appropriate
adjustments among themselves (by the resale of participations sold or otherwise)
if such payment is rescinded or must otherwise be restored. The Company agrees
that any Bank so purchasing such a participation (or direct interest) may
exercise all rights of set-off, banker’s lien, counterclaim or similar rights
with respect to such participation as fully as if such Bank were a direct holder
of Loans or other amounts (as the case may be) owing to such Bank in the amount
of such participation.

 

(c)          Sharing of Benefits of Secured Claim. Nothing contained herein
shall require any Bank to exercise any such right or shall affect the right of
any Bank to exercise, and retain the benefits of exercising, any such right with
respect to any other indebtedness or obligation of any Obligor. If, under any
applicable bankruptcy, insolvency or other similar Law, any Bank receives a
secured claim in lieu of a set-off to which this Section 4.07 applies, such Bank
shall, to the extent practicable, exercise its rights in respect of such secured
claim in a manner consistent with the rights of the Banks entitled under this
Section 4.07 to share in the benefits of any recovery on such secured claim..

 

4.08        Application of Proceeds of Collateral and Subsidiary Guarantee.
Subject to the terms of the Intercreditor Agreement, all amounts received under
the Subsidiary Guarantee and all proceeds received by the Agent from the sale or
other liquidation of the Collateral when an Event of Default exists and the Loan
Obligations are unpaid, shall first be applied as payment of the accrued and
unpaid fees of the Agent hereunder and then to all other unpaid or unreimbursed
Obligations (including reasonable attorneys’ fees and expenses) owing to the
Agent in its capacity as Agent only and then any remaining amount of such
proceeds shall be distributed:

 

(a)          first, to the Secured Parties, pro rata in accordance with the
respective unpaid amounts of Loan Obligations (including, without limitation,
Cash Collateralization of Letters of Credit), until all the Loan Obligations
have been paid and satisfied in full and in respect of outstanding Letters of
Credit, fully Cash Collateralized in accordance with Section 9.02;

 

(b)          second, to the Secured Parties, pro rata in accordance with the
respective unpaid amounts of Hedging Obligations (other than Excluded Swap
Obligations), until all the Hedging Obligations (other than Excluded Swap
Obligations) have been paid and satisfied in full or Cash Collateralized;

 

41

 

 

(c)          third, to the Secured Parties, pro rata in accordance with the
respective unpaid amounts of the Deposit Obligations, until all Deposit
Obligations have been paid and satisfied in full or Cash Collateralized; and

 

(d)          fourth, to the Secured Parties, pro rata in accordance with the
respective unpaid amounts of the remaining Obligations (other than Excluded Swap
Obligations).

 

After all the Obligations (other than Excluded Swap Obligations) have been paid
and satisfied in full, all Commitments have terminated and all Letters of Credit
have expired, terminated or been Cash Collateralized as set forth above, any
proceeds of Collateral shall be delivered to the Person entitled thereto as
directed by the Company or as otherwise determined by applicable Law or
applicable court order.

 

4.09        Noncash Proceeds. Notwithstanding anything contained herein to the
contrary, if the Agent shall ever acquire any Collateral through foreclosure or
by a conveyance in lieu of foreclosure or by retaining any of the Collateral in
satisfaction of all or part of the Obligations or if any proceeds of Collateral
received by the Agent to be distributed and shared pursuant to this Section are
in a form other than immediately available funds, the Agent shall not be
required to remit any share thereof under the terms hereof and the Secured
Parties shall only be entitled to their undivided interests in the Collateral or
noncash proceeds as determined by Section 4.08. The Secured Parties shall
receive the applicable portions (in accordance with the foregoing Section 4.08)
of any immediately available funds consisting of proceeds from such Collateral
or proceeds of such noncash proceeds so acquired only if and when received by
the Agent in connection with the subsequent disposition thereof. While any
Collateral or other property to be shared pursuant to Section 4.08 is held by
the Agent pursuant to this Section 4.09, the Agent shall hold such Collateral or
other property for the benefit of the Secured Parties and all matters relating
to the management, operation, further disposition or any other aspect of such
Collateral or other property shall be resolved by the agreement of the Required
Banks.

 

4.10        Return of Proceeds. If at any time payment, in whole or in part, of
any amount distributed by the Agent hereunder is rescinded or must otherwise be
restored or returned by the Agent as a preference, fraudulent conveyance, or
otherwise under any bankruptcy, insolvency, or similar Law, then each Person
receiving any portion of such amount agrees, upon demand, to return the portion
of such amount it has received to the Agent together with a pro rata portion of
any interest paid by or other charges imposed on the Agent in connection with
such rescinded or restored payment.

 

4.11        Notice of Amount of Obligations. Prior to making any distribution
under Section 4.08, the Agent shall request each Bank to provide the Agent with
a statement of the amounts of Hedging Obligations and Deposit Obligations then
owed to such Bank and its Affiliates. A Bank may provide such information to the
Agent at any time and the Agent may also request such information at any time.
If a Bank does not provide the Agent a statement of the amount of any such
Obligations within three (3) Business Days of the date requested, the Agent may
make distributions under Section 4.08 thereafter and the amount of Hedging
Obligations and Deposit Obligations then owed to such Bank and its Affiliates
shall conclusively be deemed to be zero for purposes of such distributions.
Neither the Bank nor any of its Affiliates shall have a right to share in such
distributions with respect to any Hedging Obligations or Deposit Obligations
owed to it. If a Bank shall thereafter provide the Agent a statement of the
amount of the Hedging Obligations and Deposit Obligations then owed to such Bank
and its Affiliates, any distribution under Section 4.08 made after the notice is
received by the Agent shall take into account the amount of the Hedging
Obligations and/or Deposit Obligations then owed. Banks and their Affiliates
that shall not have provided the statement (required under this Section 4.11) of
the amount of owing Hedging Obligations or Deposit Obligations shall not be
entitled to share retroactively in any distribution made prior to the date when
such statement was provided. In furtherance of the provisions of Section 10, the
Agent shall in all cases be fully protected in making distributions hereunder in
accordance with the statements of the Hedging Obligations and Deposit
Obligations received from the Banks under this Section 4.11 (or lack thereof).

 

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4.12        Defaulting Banks.

 

(a)          Anything contained herein to the contrary notwithstanding, in the
event that any Bank becomes a Defaulting Bank, then the Swing Line Bank may, in
its sole discretion, require such Defaulting Bank to deposit Cash Collateral
with the Agent in an aggregate amount equal to such Defaulting Bank’s
participations in any requested or outstanding Swing Line Loans, and each
Defaulting Bank hereby grants a first priority security interest in such Cash
Collateral in favor of the Agent, for the sole benefit of the Swing Line Bank.
In the event that such Defaulting Bank fails to deposit Cash Collateral as
required hereby, the Company may, at any time thereafter, upon five (5) Business
Days prior written notice to such Defaulting Bank, require that such Defaulting
Bank terminate its Revolving Loan Commitment and any obligations hereunder and
under the other Basic Documents and transfer all of its Credit Exposure in
accordance with Section 11.06 (subject to the prior written consent of such
assignees, the Agent, the Issuing Banks and the Swing Line Bank) to one or more
of the existing Banks or to one or more new Banks, if such assignee Banks can be
found by the Company.

 

(b)          Anything contained herein to the contrary notwithstanding, in the
event that any Bank becomes a Defaulting Bank, then each Issuing Bank may, in
its sole discretion, require such Defaulting Bank to deposit Cash Collateral
with the Agent in an aggregate amount equal to such Defaulting Bank’s
participations in any requested or outstanding Letters of Credit, and each
Defaulting Bank hereby grants a first priority security interest in such Cash
Collateral in favor of the Agent, for the sole benefit of the applicable Issuing
Bank. In the event that such Defaulting Bank fails to deposit Cash Collateral as
required hereby, the Company may, at any time thereafter, upon five (5) Business
Days prior written notice to such Defaulting Bank, require that such Defaulting
Bank terminate its Revolving Loan Commitment and any obligations hereunder and
under the other Basic Documents and transfer all of its Credit Exposure and
participations therein in accordance with Section 11.06 (subject to the prior
written consent of such Banks, the Agent, the Issuing Banks and the Swing Line
Bank) to one or more of the existing Banks or to one or more new Banks, if such
assignee Banks can be found by the Company.

 

(c)          Notwithstanding any other provision in this Agreement to the
contrary, if at any time a Bank becomes a Defaulting Bank, the following
provisions shall apply so long as such Bank is a Defaulting Bank:

 

(i)          Fees pursuant to Section 2.06 shall cease to accrue on such
Defaulting Bank’s unused Revolving Loan Commitment until such time as such Bank
is no longer a Defaulting Bank, at which time fees pursuant to Section 2.06
shall resume to accrue and be payable in accordance with Section 2.06.

 

(ii)         With respect to any Fronting Exposure of the Defaulting Bank
(including, without limitation, any that exists at the time a Bank becomes a
Defaulting Bank or thereafter) (the “Defaulting Bank’s Exposure”):

 

43

 

 

(A)         such Defaulting Bank’s Exposure shall automatically be reallocated
(without further action of any party) among the non-Defaulting Banks in
accordance with their respective Revolving Loan Commitment Percentages
(calculated without regard to any Defaulting Bank’s Revolving Loan Commitments)
to the extent of each non-Defaulting Bank’s unused Revolving Loan Commitment,
provided, that (x) the conditions set forth in Section 6.02 shall be satisfied
at the time of such reallocation (and, unless the Company shall have otherwise
notified the Agent at such time, the Company shall be deemed to have represented
and warranted that such conditions are satisfied at such time) and (y) in no
event shall any non-Defaulting Bank’s Credit Exposure following such
reallocation exceed such non-Defaulting Bank’s Revolving Loan Commitment;

 

(B)         if the reallocation described in paragraph (A) above cannot, or can
only partially, be effected, then the Company shall within one (1) Business Day
following notice by the Agent, the applicable Issuing Bank or the Swing Line
Bank (1) deliver to the Agent Cash Collateral for such Defaulting Bank’s
Revolving Loan Commitment Percentage of the Letter of Credit Liabilities (after
giving effect to any partial reallocation pursuant to paragraph (A) above) as
otherwise provided in this Agreement for so long as such Letter of Credit
Liabilities are outstanding and (2) immediately repay each Swing Line Loan for
so long as such Swing Line Loan or any participation therein is outstanding;

 

(C)         if the Company shall deliver to the Agent Cash Collateral for any
portion of such Defaulting Bank’s participations in Letter of Credit Liabilities
pursuant to Section 4.12(b) or Section 4.12(c)(ii)(B) then the Company shall not
be required to pay any fees for the benefit of such Defaulting Bank pursuant to
Section 2.03(g) of this Agreement with respect to the portion of such Defaulting
Bank’s Revolving Loan Commitment Percentage of outstanding Letters of Credit
equal to such Cash Collateral during the period such Cash Collateral is held by
the Agent;

 

(D)         to the extent the Defaulting Bank’s Exposure is reallocated to the
non-Defaulting Banks pursuant to clause (A) above, the fees payable to the Banks
pursuant to Sections 2.03 and 2.06 shall be adjusted in accordance with such
non-Defaulting Banks’ Revolving Loan Commitment Percentages (disregarding the
Revolving Loan Commitments of any Defaulting Bank);

 

(E)         if any Defaulting Bank’s Exposure is not Cash Collateralized,
reallocated or prepaid pursuant to this Section 4.12, then, without prejudice to
any rights or remedies of the Issuing Banks, the Swing Line Bank or any Bank
hereunder, all fees payable to the Banks pursuant to Sections 2.03(g) and 2.06
with respect to such Defaulting Bank’s Exposure that is not Cash Collateralized,
reallocated or prepaid shall be payable to the Issuing Banks or the Swing Line
Bank, as applicable, until such Defaulting Bank’s Exposure is fully Cash
Collateralized as set forth in this Section 4.12, reallocated and/or prepaid;

 

(F)         (i) no Issuing Banks shall be required to issue, provide, amend or
increase any Letter of Credit, unless it is satisfied in its sole discretion
that the related exposure will be 100% covered by the Revolving Loan Commitments
of the non-Defaulting Banks, and participating interests in any such newly
issued, provided or increased Letter of Credit shall be allocated among
non-Defaulting Banks in a manner consistent with Section 2.03(b) (and Defaulting
Banks shall not participate therein) and (ii) the Swing Line Bank shall not be
required to advance any Swing Line Loan, unless it is satisfied that the related
exposure will be 100% covered by the Revolving Loan Commitments of the
non-Defaulting Banks;

 

(G)         any amount payable to such Defaulting Bank hereunder (whether on
account of principal, interest, fees or otherwise) shall, in lieu of being
distributed to such Defaulting Bank, be retained by the Agent in a segregated
account and subject to any applicable Requirements of Law, and be applied:

 

(1)         first, to the payment of any amounts owing by such Defaulting Bank
to the Agent hereunder,

 

44

 

 

(2)         second, to the payment pro rata of any amounts owing by such
Defaulting Bank to the Issuing Banks and/or the Swing Line Bank hereunder,

 

(3)         third, to the extent not Cash Collateralized, to the payment pro
rata to (x) the Cash Collateralization, as set forth in this Section 4.12, of
any participating interest in any Letter of Credit in respect of which such
Defaulting Bank has failed to fund Cash Collateral for its portion thereof as
required by this Agreement, pro rata among such Letters of Credit, as determined
by the Agent, and (y) the repayment of any uncovered portion of any outstanding
Swing Line Loans,

 

(4)         fourth, as the Company may request, so long as no Default or Event
of Default shall have occurred and be continuing, to the funding of any portion
of any Loan which such Defaulting Bank has failed to fund,

 

(5)         fifth, if so determined by the Agent, the Issuing Banks or the Swing
Line Bank, held in such account as Cash Collateral for future funding
obligations of such Defaulting Bank under this Agreement,

 

(6)         sixth, to the payment of any amounts owing to the non-Defaulting
Banks as a result of any judgment of a court of competent jurisdiction obtained
by any non-Defaulting Bank against such Defaulting Bank as a result of such
Defaulting Bank’s breach of its obligations under this Agreement,

 

(7)         seventh, so long as no Default or Event of Default shall have
occurred and be continuing, to the payment of any amounts owing to the Company
as a result of any judgment of a court of competent jurisdiction obtained by the
Company against such Defaulting Bank as a result of such Defaulting Bank’s
breach of its obligations under this Agreement, and

 

(8)         eighth, to such Defaulting Bank or as otherwise directed by a court
of competent jurisdiction;

 

provided, however, that if such payment is (x) a payment of the principal amount
of any Loans or unreimbursed amount with respect to drawings or demands for
payment under Letters of Credit which such Defaulting Bank has not funded in
accordance with its participation obligations hereunder and (y) made at a time
when the conditions set forth in Section 6.02 are satisfied, such payment shall
be applied solely to prepay the Loans of, and unreimbursed amounts with respect
to drawings and demands under Letters of Credit owed to, all non-Defaulting
Banks pro rata prior to being applied to the prepayment of any Loans, or
unreimbursed amounts with respect to such drawings owed to, such Defaulting
Bank.

 

(d)          Each Defaulting Bank shall indemnify the Company, the Agent, the
Issuing Banks, the Swing Line Bank and each non-Defaulting Bank from and against
any and all loss, damage or expenses, including but not limited to reasonable
attorneys’ fees and, in the case of the Agent, the Issuing Banks, the Swing Line
Bank or any non-Defaulting Bank, funds (if any) advanced by the Agent, the
Issuing Banks, the Swing Line Bank or by any non-Defaulting Bank, on account of
such Defaulting Bank’s failure to timely fund its applicable Revolving Loan
Commitment Percentage of a Loan or to otherwise perform its obligations under
the Basic Documents.

 

(e)          In the event that the Agent, the Company, the Issuing Banks and the
Swing Line Bank agree that a Defaulting Bank has adequately remedied all matters
that caused such Bank to be a Defaulting Bank, then the Fronting Exposure of the
Banks shall be readjusted to reflect the inclusion of such Bank’s Revolving Loan
Commitment and on such date such Bank shall purchase at par such of the Loans,
Revolving Loan Commitments and/or Letter of Credit Liabilities, or
participations therein of the other Banks as the Agent shall determine may be
necessary in order for such Bank to hold such Loans, Revolving Loan Commitments
and/or Loan Obligations in accordance with its Revolving Loan Commitment
Percentage thereof.

 

45

 

 

(f)          At any time during a Defaulting Bank Period, the Company may (so
long as such Defaulting Bank Period remains in effect), require such Defaulting
Bank to assign all right, title and interest that it may have in, and its
participations in, all Loans, Letters of Credit and any other Loan Obligations
to another Bank (if another Bank will consent to purchase such right, title and
interest and participations) or another Person in accordance with and subject to
the terms of Section 11.06 of this Agreement, if such Person can be found by the
Company, for a purchase price equal to 100% of the principal amount of such
Obligations plus the amount of any interest and fees accrued and owing to such
Defaulting Bank as of the date of such assignment plus any amount payable under
this Agreement (including, without limitation, under Section 5.04).

 

(g)          So long as any Bank is a Defaulting Bank, Hedging Obligations owing
to such Bank or its Affiliates arising from transactions entered into after it
becomes a Defaulting Bank, shall be excluded from “Hedging Obligations” for the
purpose of Section 4.08.

 

Section 5.

Yield Protection, Etc.

 

5.01        Additional Costs. 

 

(a)          If the adoption of or any change in any Requirement of Law
(including, without limitation, any Regulatory Change) or in the interpretation
or application thereof or compliance by any Bank with any request or directive
(whether or not having the force of law) from any central bank or other
Governmental Authority made subsequent to the date hereof (including, without
limitation, any Regulatory Change):

 

(A)         does or shall subject any Bank to any Tax of any kind whatsoever
(other than Indemnified Taxes or Excluded Taxes) with respect to this Agreement,
any Note, any Eurodollar Loan made by it, any Commitment, any Letter of Credit
issued or participated in by it or any participation by it in any Swing Line
Loan, or its deposits, reserves, other liabilities or capital attributable
thereto;

 

(B)         does or shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan, insurance charge or similar requirement against assets
held by, deposits or other liabilities in or for the account of, advances, loans
or other extensions of credit by or participated in by, or any other acquisition
of funds by, any office of such Bank which is not otherwise included in the
determination of the Eurodollar Base Rate; or

 

(C)         does or shall impose on such Bank any other condition, cost or
expense;

 

and the result of any of the foregoing is to increase the cost to such Bank of
making, Converting into, Continuing or maintaining Eurodollar Loans or
maintaining its obligation to make such Loans or issuing, providing and
maintaining Letters of Credit or holding an interest in the Issuing Bank’s
obligations thereunder or of holding a participation interest or maintaining its
obligation to hold such participation interests in Swing Line Loans, or to
reduce any amount receivable hereunder (whether of principal, interest or any
other amount), then, in any such case, the Company shall promptly, after
receiving notice and the applicable certificate as specified in Section 5.01(d),
pay such Bank such additional amount or amounts as will compensate such Bank for
such increased cost or reduced amount receivable.

 

46

 

 

(b)          Intentionally omitted.

 

(c)          If any Bank shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or liquidity
requirements (including, without limitation, any Regulatory Change) or in the
interpretation or application thereof or compliance by such Bank, its Applicable
Lending Office or any Person controlling such Bank with any Requirement of Law
regarding capital adequacy (including, without limitation, any Regulatory
Change) or with any request or directive regarding capital adequacy or liquidity
requirements (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Bank’s or such Person’s capital as a consequence of
this Agreement, its obligations or Commitments hereunder or under Letters of
Credit (issued by it or in which it has a participation interest) or in respect
of its Loans or participations in Swing Line Loans, to a level below that which
such Bank or such Person would have achieved but for such adoption, change or
compliance (taking into consideration such Bank’s or such Person’s policies with
respect to capital adequacy), then from time to time, the Company shall promptly
after receiving notice and the applicable certificate as specified in Section
5.01(d), pay to such Bank or such other Person such additional amount or amounts
as will compensate such Bank for such reduction. In determining such amount or
amounts, any Bank may use any method of averaging and attribution as it shall
deem applicable.

 

(d)          If any Bank becomes entitled to claim any additional amounts
pursuant to this Section 5.01, it shall promptly notify the Company (with a copy
to the Agent) of the event by reason of which it has become so entitled. Failure
or delay on the part of any Bank to demand compensation pursuant to this Section
5.01 shall not constitute a waiver of such Bank’s right to demand such
compensation; provided that the Company shall not be required to compensate such
Bank pursuant to this Section 5.01 for any increased costs or reductions
incurred more than 270 days prior to the date that such Bank gives notice to the
Company of the applicable Requirement of Law (plus any additional period of
retroactive effect of the applicable Requirement of Law) giving rise to such
increased costs or reductions and of the Bank’s intention to claim compensation
pursuant to this Section 5.01. A certificate as to any additional amounts
payable pursuant to this Section 5.01 submitted by such Bank to the Company
(with a copy to the Agent) shall be conclusive in the absence of manifest error.
The agreements in this Section 5.01 shall survive the termination of this
Agreement and the payment of the Loans, Reimbursement Obligations and all other
amounts payable hereunder.

 

(e)          The Agent and each Bank hereby agrees that, upon the occurrence of
any circumstances entitling the Agent or such Bank to additional amounts
pursuant to this Section 5.01, the Agent or such Bank shall use reasonable
efforts (consistent with its internal policy and legal and regulatory
restrictions), at the sole expense of the Company, to designate a different
Applicable Lending Office if the making of such a change would avoid the need
for, or materially reduce the amount of, any such additional amounts that may
thereafter accrue and would not, in the sole judgment of the Agent or such Bank,
be otherwise disadvantageous to the Agent or such Bank in any respect.

 

(f)          If any Bank demands compensation under this Section 5.01, or if the
Company is required to pay any additional amount to any Bank or any Governmental
Authority for the account of any Bank pursuant to this Section 5.01, the Company
may require such Bank to assign all right, title and interest that it may have
in, and its participations in, all Loans, Letters of Credit and any other
Obligations of the Company under this Agreement and the Basic Documents to
another Bank (if another Bank will consent to purchase such right, title and
interest and participations) or another Person in accordance with and subject to
the terms of Section 11.06 of this Agreement, for a purchase price equal to 100%
of the principal amount of such Obligations plus the amount of any interest and
fees accrued and owing to such Bank as of the date of such assignment plus any
other amounts payable under this Agreement (including under this Section 5.01
and Section 5.04 hereof).

 

47

 

 

5.02        Inability to Determine Interest Rate.

 

If prior to the first day of any Interest Period:

 

(a)          (i)          the Agent shall have determined (which determination
shall be conclusive and binding upon the Company) that, by reason of
circumstances affecting the relevant market, adequate and reasonable means do
not exist for ascertaining the relevant Eurodollar Rate for such Interest
Period, or

 

(i)          the Agent shall have received notice from the Required Banks that
the relevant Eurodollar Rate determined or to be determined for such Interest
Period will not adequately and fairly reflect the cost to such Banks (as
conclusively certified by such Banks) of making or maintaining their affected
Loans during such Interest Period,

 

then the Agent shall give telecopy or telephonic notice thereof to the Company
and the relevant Banks as soon as practicable thereafter.

 

(b)          If such notice is given under clause (a)(i) or (ii) above with
respect to the Eurodollar Rate applicable to Loans, (x) any such Eurodollar Loan
requested to be made on the first day of such Interest Period shall be made as a
Base Rate Loan, (y) any Base Rate Loans that were to have been Converted on the
first day of such Interest Period to Eurodollar Loans shall continue as Base
Rate Loans and (z) any outstanding Eurodollar Loans shall be Converted to Base
Rate Loans on the first day of such Interest Period. Until such notice has been
withdrawn by the Agent, no further Eurodollar Loans shall be made or Continued
as such, nor shall the Company have the right to Convert Base Rate Loans to
Eurodollar Loans.

 

(c)          The Agent shall withdraw (i) any such notice pursuant to subsection
(a)(i) of this Section 5.02 above if the Agent determines that the relevant
circumstances have ceased to exist and (ii) any such notice pursuant to
subsection (a)(ii) of this Section 5.02 upon receipt of notice from the Required
Banks the relevant circumstances described in such subsection (a)(ii) have
ceased to exist.

 

5.03        Illegality. Notwithstanding any other provision of this Agreement,
in the event that it becomes unlawful for any Bank or its Applicable Lending
Office to honor its obligation to make or maintain Eurodollar Loans hereunder,
then such Bank shall promptly notify the Company (with a copy to the Agent)
thereof and such Bank’s obligation to make or Continue, or to Convert Loans of
any other Type into, Eurodollar Loans shall be suspended until such time as the
Bank may again make and maintain Eurodollar Loans and such Bank’s Loans then
outstanding as Eurodollar Loans, if any, shall be Converted automatically to
Base Rate Loans on the respective last days of the then current Interest Periods
with respect to such Loans or within such earlier period as required by Law.

 

48

 

 

5.04        Break Funding Compensation. The Company shall pay to the Agent for
account of each Bank, upon the request of such Bank (through the Agent), such
amount or amounts as shall be sufficient (in the reasonable opinion of such
Bank) to compensate it for any loss, cost or expense (including, without
limitation, any loss or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Bank) that such Bank
determines is attributable to (a) any failure by the Company in making a
borrowing of, Conversion into or Continuation of Eurodollar Loans after the
Company has given a notice requesting the same in accordance with the provisions
of this Agreement, (b) any failure by the Company in making any prepayment after
the Company has given a notice thereof in accordance with the provisions of this
Agreement or (c) the making of a payment or prepayment of Eurodollar Loans
(whether optional or mandatory, whether from proceeds of Collateral or
otherwise) on a day which is not the last day of an Interest Period with respect
thereto (including, without limitation, in connection with Section 2.05(d)
hereof). Without limiting the effect of the preceding sentence, such
compensation shall include, with respect to Eurodollar Loans, an amount equal to
the excess, if any, of (i) the amount of interest that otherwise would have
accrued on the principal amount so paid, prepaid, Converted or not borrowed,
prepaid or Converted for the period from the date of such payment, prepayment,
Conversion or failure to borrow, prepay or Convert to the last day of the then
current Interest Period for such Loan (or, in the case of a failure to borrow,
prepay or Convert, the Interest Period for such Loan that would have commenced
on the date specified for such borrowing) at the applicable rate of interest for
such Loan provided for herein over (ii) the amount of interest that otherwise
would have accrued on such principal amount at a rate per annum equal to the
interest component of the amount such Bank would have bid in the London
interbank market for Dollar deposits of leading banks in amounts comparable to
such principal amount and with maturities comparable to such period (as
reasonably determined by such Bank). A certificate as to any amounts payable
pursuant to this Section submitted to the Company by any Bank shall be
presumptively correct in the absence of manifest error. This covenant shall
survive the termination of this Agreement and the payment of the Loans,
Reimbursement Obligations and all other amounts payable hereunder.

 

5.05        Intentionally omitted.

 

5.06        Taxes.

 

(a)          Payments Free of Taxes. Any and all payments by or on account of
any obligation of any Obligor under any Basic Document shall be made free and
clear of and without deduction or withholding for any Indemnified Taxes or Other
Taxes, provided that if any Obligor shall be required by applicable Law to
deduct any Indemnified Taxes (including any Other Taxes) from such payments,
then: (i) the sum payable shall be increased as necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section) the Agent, or Bank, as the case may be, receives an
amount equal to the sum it would have received had no such deductions been made;
(ii) the applicable Obligor shall make such deductions; and (iii) the applicable
Obligor shall timely pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable Law.

 

(b)          Payment of Other Taxes by the Company. Without limiting the
provisions of paragraph (a) above, the Company shall timely pay any Other Taxes
to the relevant Governmental Authority in accordance with applicable Law or, at
the option of the Agent, timely reimburse it for the payment of Other Taxes.

 

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

 

49

 

 

(d)          Indemnification by the Banks. Each Bank shall severally indemnify
the Agent, within 10 days after demand therefor, for (i) any Indemnified Taxes
attributable to such Bank (but only to the extent that the Company has not
already indemnified the Agent for such Indemnified Taxes and without limiting
the obligation of the Company to do so) and (ii) any Excluded Taxes attributable
to such Bank, in each case, that are payable or paid by the Agent in connection
with any Basic Document, and any reasonable expenses arising therefrom or with
respect thereto, whether or not such Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to any Bank by the Agent shall be
conclusive absent manifest error. Each Bank hereby authorizes the Agent to set
off and apply any and all amounts at any time owing to such Bank under any Basic
Document or otherwise payable by the Agent to the Bank from any other source
against any amount due to the Agent under this paragraph (d).

 

(e)          Evidence of Payments. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by any Obligor to a Governmental Authority, the
Company shall deliver to the Agent the original or a certified copy of a receipt
issued by such Governmental Authority evidencing such payment, a copy of the
return reporting such payment or other evidence of such payment reasonably
satisfactory to the Agent.

 

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

 

(ii)         Without limiting the generality of the foregoing,

 

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

 

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

 

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

 

50

 

 

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

 

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

 

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

 

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

 

(D)         FATCA. If a payment made to a Bank hereunder would be subject to
United States Federal withholding tax imposed by FATCA if such Bank were to fail
to comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Bank
shall deliver to the Company and the Agent, at the time or times prescribed by
Law and at such time or times reasonably requested by the Company or the Agent,
such documentation prescribed by applicable Law (including as prescribed by
Section 1471(b)(3)(C)(i) of the Code) and such additional documentation
reasonably requested by the Company or the Agent as may be necessary for the
Company or the Agent to comply with its obligations under FATCA, to determine
that such Bank has complied with such Bank’s obligations under FATCA or to
determine the amount to deduct and withhold from such payment. Solely for
purposes of this clause (D), “FATCA” shall include any amendments made to FATCA
after the date of this Agreement. In addition, each Bank shall severally
indemnify the Agent and Company for any Indemnified Tax attributable to such
Bank or other penalties related thereto imposed in connection with any
“withholdable payment,” as defined in Section 1473 of the Code, made to a Bank
that is a Foreign Bank that has failed to comply with the reporting requirements
or otherwise qualify for an exemption under FATCA.

 

51

 

 

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

 

(h)          Nothing contained in this Section 5.06 shall require any Bank (or
any of its permitted assigns or participants hereunder) or the Agent to make
available any of its tax returns or any other information that it deems to be
confidential or proprietary.

 

(i)           If any Person determines, in its sole discretion exercised in good
faith, that it has received a refund of any Taxes as to which it has been
indemnified pursuant to this Section 5.06 (including by the payment of
additional amounts pursuant to this Section 5.06), it shall pay to the
indemnifying party an amount equal to such refund (but only to the extent of
indemnity payments made under this Section with respect to the Taxes giving rise
to such refund), net of all out-of-pocket expenses (including Taxes) of such
indemnified party and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund). Such indemnifying
party, upon the written request of such indemnified party, shall repay to such
indemnified party the amount paid over pursuant to this Section 5.06(i) (plus
any penalties, interest or other charges imposed by the relevant Governmental
Authority) in the event that such indemnified party is required to repay such
refund to such Governmental Authority or otherwise. Notwithstanding anything to
the contrary in this Section 5.06(i), in no event will the indemnified party be
required to pay any amount to an indemnifying party pursuant to this
Section 5.06(i) the payment of which would place the indemnified party in a less
favorable net after-Tax position than the indemnified party would have been in
if the Tax subject to indemnification and giving rise to such refund had not
been deducted, withheld or otherwise imposed and the indemnification payments or
additional amounts with respect to such Tax had never been paid.

 

Section 6.

Conditions Precedent.

 

6.01        Obligations to Extend Credit. The obligation of any Bank to make any
extension of credit hereunder (whether by making a Loan or issuing a Letter of
Credit) is subject to the conditions precedent that the Agent has received the
following documents, each of which shall be reasonably satisfactory to the Agent
(and to the extent specified below to each Bank) in form and substance on or
before the Closing Date:

 

(a)          Executed Counterparts. From each party hereto either (i) a
counterpart of this Agreement signed and delivered on behalf of such party or
(ii) written evidence (which may include telecopy or other electronic
transmission of a signed signature page to this Agreement) that such party has
signed and delivered a counterpart of this Agreement.

 

(b)          Existing Credit Agreement. Written evidence that RBS Citizens,
National Association and JPMorgan Chase Bank, N.A. have been repaid (by
assignment or otherwise) all “Obligations” (under and defined in the Existing
Credit Agreement) and that the “Credit Exposure” (under and as defined in the
Existing Credit Agreement) shall have been reduced to an amount not more than
$150,000,000.

 

(c)          Intercreditor Agreement. The Intercreditor Agreement duly executed
by the Uncommitted Facility Agent.

 

52

 

 

(d)          Governing Documents. Certified copies of the charter and by-laws
(or equivalent documents) of each Obligor, and of all corporate authority for
each Obligor (including board of director resolutions, evidence of the
incumbency of officers and signature specimens of officers) with respect to the
execution, delivery and performance of the Basic Documents and each other
document to be delivered by each Obligor from time to time in connection
herewith and the extensions of credit hereunder (and the Agent and each Bank may
conclusively rely on such certificates until it receives notice in writing from
the Company to the contrary).

 

(e)          Good Standing. Evidence of the existence, good standing and
authority to transact business for (i) the Company from the Secretary of State
of New Jersey, (ii) each Obligor from the Secretary of State of the jurisdiction
of incorporation of such Obligor and (iii) each Obligor from the Secretary of
State of each other jurisdiction in which the failure of such Obligor to be in
good standing or to have the authority to transact business would result in a
Material Adverse Effect.

 

(f)           Officer’s Certificate. A certificate of a senior officer of the
Company, dated the Closing Date, to the effect set forth in clauses (a), (b) and
(c) of Section 6.02 hereof.

 

(g)          Borrowing Base Certificate. A Borrowing Base Certificate as of May
31, 2014, prepared on a pro forma basis, showing that, after giving effect to
the initial Revolving Loans to be made and the initial Letters of Credit to be
issued or outstanding on the Closing Date, the Borrowing Base will not be less
than the Credit Exposure.

 

(h)          Opinion of Counsel to the Company. An opinion addressed to the
Agent and each of the Banks and dated the Closing Date and covering such matters
as the Agent may reasonably request from such counsel to each Obligor.

 

(i)           Security Documents. Counterparts of the Subsidiary Guarantee
executed by each Domestic Subsidiary, counterparts of an amendment (in form and
substance acceptable to the Agent) to the Share Pledge Agreement and
counterparts of the Security Agreement signed on behalf of the Obligors party
thereto, together with the following:

 

(i)          certificates representing all the outstanding Capital Securities of
each Subsidiary owned by or on behalf of any Obligor as of the Closing Date
(except that certificates representing Capital Securities of any foreign
Subsidiary may be limited to 65% of the outstanding equity interest of such
foreign Subsidiary), and stock powers and instruments of transfer, endorsed in
blank, with respect to such stock certificates;

 

(ii)         the results of the search of the UCC (or equivalent) and tax Liens
and judgment Liens made with respect to the Obligors and any predecessor company
identified pursuant to the Security Agreement in each jurisdiction (A) in which
each Obligor and each predecessor company is organized and (B) in respect of tax
Liens and judgment Liens, where each Obligor and each predecessor company has
its chief executive office or has had its chief executive office within the last
four months prior to the Closing Date; and copies of the financing statements
(or other documents) disclosed by such search and evidence that the Liens
indicated by such financing statements (or similar documents) are permitted by
Section 8.06 or have been released or, simultaneously with the initial
extensions of credit hereunder, will be released;

 

(iii)        subject to the terms of the Security Agreement, (A) such other
executed documentation as the Agent may deem necessary to perfect and protect
its Liens, including intellectual property assignments for all intellectual
property pledged as Collateral, subordination agreements and control agreements
with respect to all deposit, commodity and security account and (B) all other
Collateral the possession of which is necessary to perfect the Lien therein; and

 

53

 

 

(iv)        written evidence that appropriate UCC financing statements necessary
to protect the Liens under the Security Agreement have been recorded.

 

(j)           Insurance. Certificates of insurance summarizing the insurance
policies of the Obligors required by the Basic Documents and reflecting the
Agent as additional insured under all liability policies and as additional
insured and loss payee with respect to all casualty policies covering Collateral
and loss payee on all credit insurance policies.

 

(k)          No Material Adverse Effect. Evidence that no Material Adverse
Effect has occurred since December 31, 2013, through the Closing Date.

 

(l)           Fees and Expenses. Evidence that the Company has paid to the Agent
and the Banks all reasonable and documented costs, fees and expenses then due
including such upfront and agency fees as the Company has agreed to pay to any
Bank or the Agent in connection herewith and the reasonable and documented fees
and expenses of Emmet, Marvin & Martin, LLP, counsel to the Agent, in connection
with the negotiation, preparation, execution and delivery of this Agreement and
the other Basic Documents (to the extent that statements for such fees and
expenses have been delivered to the Company).

 

(m)         Intentionally omitted.

 

(n)          Request to Honor Oral and Electronic Instructions. A completed
request to honor oral and electronic instructions, executed by a senior officer
of the Company.

 

(o)          Other Documents. Such other documents as the Agent or any Bank or
their counsel may reasonably request.

 

The Agent shall notify the Company and the Banks when all documents required to
be delivered as a condition to the effectiveness of the obligations of the Banks
have been delivered and such notice shall be conclusive and binding.

 

6.02        Initial and Subsequent Extensions of Credit. The obligation of any
Bank to make any Loan, issue any Letter of Credit or otherwise extend any credit
to the Company upon the occasion of each borrowing, issuance or other extension
of credit hereunder (including the initial Loan, Letter of Credit or other
extension of credit) is subject to the further conditions precedent that, both
immediately prior to the making of such Loan, issuance of such Letter of Credit
or other extension of credit and also after giving effect thereto and to the
intended use thereof: (a) no Default exists; (b) the representations and
warranties made by the Company in Section 7 hereof, and by each Obligor in each
of the other Basic Documents to which it is a party, shall be true and correct
in all material respects on and as of the date of the making of such Loan,
issuance of such Letter of Credit or other extension of credit (except to the
extent that such representations and warranties specifically refer to an earlier
date, in which case they shall be true and correct as of such earlier date) with
the same force and effect as if made on and as of such date (or, if any such
representation or warranty is expressly stated to have been made as of a
specific date, as of such specific date); and (c) the aggregate outstanding
principal amount of the Credit Exposure shall not exceed the lesser of (x) the
Borrowing Base and (y) the Revolving Loan Commitment. Each Borrowing Request or
request for the issuance of a Letter of Credit by the Company hereunder shall
constitute a certification by the Company to the effect set forth in the
preceding sentence (both as of the date of such notice or request and, unless
the Company otherwise notifies the Agent prior to the date of such borrowing or
issuance as of the date of such borrowing or issuance).

 

54

 

 

Section 7.

Representations and Warranties.

 

The Company represents and warrants to the Agent and the Banks that:

 

7.01         Corporate Existence. Each Obligor: (a) is a corporation, limited
liability company, partnership or other entity duly organized, validly existing
and in good standing under the Laws of the jurisdiction of its organization;
(b) has all requisite corporate or other power, and has all material
governmental licenses, authorizations, consents and approvals necessary to own
its assets and carry on its business as now being or as proposed to be
conducted; and (c) is qualified to do business and is in good standing in all
jurisdictions in which the nature of the business conducted by it makes such
qualification necessary and where failure so to qualify could (either
individually or in the aggregate) have a Material Adverse Effect.

 

7.02         Financial Condition. The Company has heretofore furnished to each
of the Banks the balance sheet of the Company as at December 31, 2013 and the
related statements of operation, change in stockholder’s equity and cash flow
for the fiscal year ended on said date, with the opinion thereon of EisnerAmper
LLP. Such financial statements fairly present the financial condition of the
Company as at said dates and the results of its operations for the fiscal year
ended on said date, all in accordance with GAAP applied on a consistent basis.
The Company does not have on the date hereof any material contingent
liabilities, liabilities for taxes, unusual forward or long-term commitments or
unrealized or anticipated losses from any unfavorable commitments, except as
referred to or reflected or provided for in said balance sheets as at said date.
Since December 31, 2013, there has been no material adverse change in the
financial condition, operations, business or prospects of the Company and its
Subsidiaries on a consolidated basis from that set forth in said financial
statements as at said date.

 

7.03         Litigation. There are no legal or arbitral proceedings, or any
proceedings by or before any governmental or regulatory authority or agency, now
pending or (to the knowledge of the Company) threatened in writing against the
Company or any other Obligor that, if adversely determined could (either
individually or in the aggregate) have a Material Adverse Effect.

 

7.04         No Breach. None of the execution and delivery of this Agreement and
the other Basic Documents, the consummation of the transactions herein and
therein contemplated or compliance with the terms and provisions hereof and
thereof will conflict with or result in a breach of, or require any consent
under, the charter or by-laws (or similar governing documents) of any Obligor,
or any applicable Law or regulation, or any order, writ, injunction or decree of
any court or Governmental Authority or agency, or any agreement or instrument to
which any Obligor is a party or by which any of them or any of their Property is
bound or to which any of them is subject, or constitute a default under any such
agreement or instrument, or (except for the Liens created pursuant to the
Security Documents) result in the creation or imposition of any Lien upon any
Property of any Obligor pursuant to the terms of any such agreement or
instrument.

 

7.05         Action. Each Obligor has all necessary corporate power, authority
and legal right to execute, deliver and perform its obligations under each of
the Basic Documents to which it is a party; the execution, delivery and
performance by each Obligor of each of the Basic Documents to which it is a
party have been duly authorized by all necessary corporate action on its part
(including any required shareholder approvals); and this Agreement, the Notes
(if any), the Subsidiary Guarantee and each other Basic Document has been duly
and validly executed and delivered by each Obligor party thereto and constitutes
its legal, valid and binding obligation, enforceable against each applicable
Obligor in accordance with its terms.

 

55

 

 

7.06        Approvals. No authorizations, approvals or consents of, and no
filings or registrations with, any governmental or regulatory authority or
agency, or any securities exchange, are necessary for the execution, delivery or
performance by any Obligor of the Basic Documents to which it is a party or for
the legality, validity or enforceability hereof or thereof, except for filings
and recordings in respect of the Liens created pursuant to the Security
Documents.

 

7.07        Use of Credit. The Company is not engaged principally, or as one of
its important activities, in the business of extending credit for the purpose,
whether immediate, incidental or ultimate, of buying or carrying Margin Stock,
and no part of the proceeds of any extension of credit hereunder will be used to
buy or carry any Margin Stock.

 

7.08        ERISA. Each “employee benefit plan”, as defined under Section 3(3)
of ERISA, established or maintained by the Company has been operated in material
compliance with ERISA and the Code. At no time during the preceding five years
has either the Company or any ERISA Affiliate (i) established or maintained a
Plan, or (ii) had any obligations to make contributions to a Multiemployer Plan.

 

7.09        Taxes. The Company has filed, or has valid extensions for the filing
of, all Federal income tax returns and all other material tax returns that are
required to be filed by it and have paid all taxes due pursuant to such returns
or pursuant to any assessment received by the Company. The charges, accruals and
reserves on the books of the Company in respect of taxes and other governmental
charges are, in the opinion of the Company, adequate. The Company has not given
or been requested to give a waiver of the statute of limitations relating to the
payment of Federal, state, local and foreign taxes or other impositions.

 

7.10        Indebtedness and Investments.

 

(a)          Indebtedness. Schedule I hereto is a complete and correct list, as
of the date of this Agreement, of each credit agreement, loan agreement,
indenture, purchase agreement, guarantee, letter of credit or other arrangement
providing for or otherwise relating to any Indebtedness or any extension of
credit (or commitment for any extension of credit) to, or guarantee by, the
Company in each case with an aggregate principal or face amount in excess of
$100,000, and any Subsidiary of the Company, and the aggregate principal or face
amount outstanding or that may be outstanding under each such arrangement is
correctly described in said Schedule I.

 

(b)          Investments. Schedule II hereto is a complete and correct list, as
of the date of this Agreement, of all Investments held by the Company and each
Subsidiary in any Person, in each case with an aggregate principal or face
amount in excess of $100,000, and, for each such Investment, the nature of such
Investment.

 

7.11        True and Complete Disclosure. The information, reports, financial
statements, exhibits and schedules furnished in writing by or on behalf of any
Obligor to the Agent or any Bank in connection with the negotiation, preparation
or delivery of this Agreement and the other Basic Documents or included herein
or therein or delivered pursuant hereto or thereto, when taken as a whole do not
contain any untrue statement of material fact or omit to state any material fact
necessary to make the statements herein or therein, in light of the
circumstances under which they were made, not misleading. All written
information furnished after the date hereof by the Company to the Agent and the
Banks in connection with this Agreement and the other Basic Documents and the
transactions contemplated hereby and thereby will be true, complete and accurate
in every material respect, or (in the case of projections) based on reasonable
estimates, on the date as of which such information is stated or certified.

 

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7.12         Subsidiaries. Set forth on Schedule III is a complete and correct
list of all of the Subsidiaries of the Company as of the date hereof, together
with, for each such Subsidiary: (a) the jurisdiction of organization of such
Subsidiary; (b) each Person holding Capital Securities in such Subsidiary; (b)
the authorized, issued and outstanding Capital Securities issued by such
Subsidiary; (c) the Capital Securities held by each such Person; and (d) the
percentage of ownership of such Subsidiary represented by such Capital
Securities. Each of the Company and the Subsidiaries owns, free and clear of
Liens (other than Liens created pursuant to the Security Documents), and has the
unencumbered right to vote, all outstanding Capital Securities in each Person
shown to be held by it on Schedule III and all of the issued and outstanding
Capital Securities of each such Person organized as a corporation or limited
liability company is validly issued, fully paid and nonassessable. As of the
date hereof: (x) there are no outstanding equity rights with respect to any
Subsidiary and (y) there are no outstanding obligations of any Subsidiary to
repurchase, redeem, or otherwise acquire any Capital Securities or other equity
rights of any Subsidiary nor are there any outstanding obligations of any
Subsidiary to make payments to any Person, such as “phantom stock” payments,
where the amount thereof is calculated with reference to the fair market value
or equity value of any Subsidiary.

 

7.13         Property. The Company and each of its Subsidiaries has good title
to, or valid leasehold interests in, all its real and personal property material
to its business, subject only to Liens permitted by Section 8.06 and except for
minor defects in title that do not interfere with its ability to conduct its
business as currently conducted or to utilize such properties for their intended
purposes. The Company and each of its Subsidiaries owns, or is licensed to use,
all trademarks, tradenames, copyrights, patents and other intellectual property
material to its business, and the use thereof by the Company and the
Subsidiaries does not infringe upon the rights of any other Person, except for
any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. To the knowledge
of the Company, no claim has been asserted nor is pending by any Person
challenging or questioning the use of any such trademarks, tradenames,
copyrights, patents and other intellectual property or the validity or
effectiveness of any such trademarks, tradenames, copyrights, patents and other
intellectual property that, if adversely determined could (either individually
or in the aggregate) have a Material Adverse Effect.

 

7.14         Compliance with Laws and Agreements. The Company and each of its
Subsidiaries are each in compliance with all Requirements of Law, regulations
and orders of any Governmental Authority applicable to it or its property and
all indentures, agreements and other documents binding upon it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.

 

7.15         Investment Company Status. Neither the Company nor any of its
Subsidiaries is an “investment company” as defined in, or subject to regulation
under, the Investment Company Act of 1940 (as amended).

 

7.16         OFAC Money Laundering Representations. No Obligor nor any of its
Affiliates is in violation of any Laws relating to sanctions, terrorism or money
laundering (“Anti-Terrorism Laws”), including regulations administered by the
United States Treasury Department’s Office of Foreign Asset Control (“OFAC”) and
the Executive Order No. 13224 on Terrorist Financing, effective September 24,
2001 (the “Executive Order”), and the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001, Public Law 107-56. No Obligor nor any of its Affiliates or their
respective brokers or other agents acting or benefiting in any capacity in
connection with the Loans or Letters of Credit, is any of the following (each
such Person, a “Sanctioned Person”):

 

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(a)          a Person or country that is listed in the annex to, or is otherwise
subject in the prohibitions contained in, the Executive Order or the OFAC
regulations or that is subject to sanction by the U.S. State Department or the
European Union;

 

(b)          a Person owned or controlled by, or acting for or on the behalf of,
any Person that is listed in the annex to, or is otherwise subject to the
prohibitions contained in, the Executive Order or the OFAC regulations or other
Anti-Terrorism Laws;

 

(c)          a Person with which the Agent or any Bank is prohibited from
dealing or otherwise engaging in any transaction by any Anti-Terrorism Law;

 

(d)          a Person that commits, threatens or conspires to commit or supports
“terrorism” as defined in the Executive Order or the OFAC regulations;

 

(e)          a Person that is (i) named on the most current list of “Specially
Designated Nationals and Blocked Persons” published by OFAC at its official
website or any replacement website or other replacement official publication
list or (ii) similarly designated in any comparable list published by the United
Nations or any Governmental Authority of the European Union, the Netherlands,
the United Kingdom or the French Republic; or

 

(f)           a Person located, organized or resident in a country or territory
that is, or whose government is, the subject of sanctions including, without
limitation, Cuba, Iran, North Korea, Sudan and Syria.

 

No Obligor nor any of its brokers or other agents acting in any capacity in
connection with the Loans or Letters of Credit (x) conducts any business or
engages in making or receiving any contribution of funds, goods or services to
or for the benefit of any Sanctioned Person, (y) deals in, or otherwise engages
in any transaction relating to, any property or interests in property blocked
pursuant to the Executive Order or the OFAC regulations, or (z) engages in or
conspires to engage in any transaction that evades or avoids, or has the purpose
of evading or avoiding, or attempts to violate, any of the prohibitions set
forth in any Anti-Terrorism Law.

 

No part of the proceeds of the Loans or Letters of Credit will be used, directly
or indirectly, for any payments to any Sanctioned Person, governmental official
or employee, political party, official of a political party, candidate for
political office, or anyone else acting in an official capacity, (x) in order to
obtain, retain or direct business or obtain any improper advantage, in violation
of OFAC, Anti-Terrorism Laws, regulations of the European Union or the United
States Foreign Corrupt Practices Act of 1977, as amended or (y) which could
result in the imposition of sanctions against any Person (including any Bank).

 

7.17        Insurance. The Company and each of its Subsidiaries maintain with
financially sound and reputable insurers, insurance with respect to its
properties and business against such casualties and contingencies and in such
amounts as are usually carried by businesses engaged in similar activities as
the Company and such Subsidiaries and located in similar geographic areas in
which the Company and such Subsidiaries operate.

 

7.18        Solvency. On the Closing Date and immediately following the making
of each Loan made, and issuance of each Letter of Credit issued, on the Closing
Date and after giving effect to the application of the proceeds of such Loans
and the issuance of such Letter of Credit: (a) the fair value of the assets of
each Obligor, at a fair valuation, will exceed its debts and liabilities,
subordinated, contingent or otherwise; (b) the present fair saleable value of
the property of each Obligor will be greater than the amount that will be
required to pay the probable liability of its debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured; (c) each Obligor will be able to pay its debts and
liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (d) each Obligor will not have
unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be conducted
following the Closing Date. As used in this Section, the term “fair value” means
the amount at which the applicable assets would change hands between a willing
buyer and a willing seller within a reasonable time, each having reasonable
knowledge of the relevant facts, neither being under any compulsion to act, with
equity to both and “present fair saleable value” means the amount that may be
realized if the applicable company’s aggregate assets are sold with reasonable
promptness in an arm’s length transaction under present conditions for the sale
of a comparable business enterprises.

 

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7.19        Intentionally omitted.

 

7.20        Security Documents. The provisions of each Security Document are
effective to create in favor of the Agent for the ratable benefit of the Secured
Parties and the Agent a legal, valid and enforceable Lien in all right, title
and interest of the applicable Obligor in the Collateral.

 

7.21        Environmental Matters.

 

(a)          The facilities and Properties owned or operated by the Company or
any of its Subsidiaries (the “Relevant Properties”) do not contain any Materials
of Environmental Concern in amounts or concentrations which (i) constitute or
constituted a material violation of or (ii) could reasonably be expected to give
rise to a material liability under, any Environmental Law.

 

(b)          The Company, the Relevant Properties and all operations of the
Company at the Relevant Properties are in material compliance, and have, for the
duration of their ownership or operation by the Company and its Subsidiaries,
been in material compliance with all applicable Environmental Laws, and there is
no contamination at, under or about the Relevant Properties. All Environmental
Permits necessary in connection with the operations of the Company and its
Subsidiaries have been obtained and are in full force and effect except for
those Environmental Permits for which the failure to obtain could not reasonably
be expected to result in a material obligation under Environmental Laws.

 

(c)          Neither the Company nor any of its Subsidiaries have received any
written notice of violation, alleged violation, non-compliance, liability or
potential liability regarding liability under or compliance with Environmental
Laws with regard to any of the Relevant Properties or its operations, except for
matters that have been resolved.

 

(d)          Materials of Environmental Concern have not been transported or
disposed of from the Relevant Properties by or on behalf of the Company or its
Subsidiaries in violation of, or to the Company’s knowledge, in a manner or to a
location which could give rise to liability under, any Environmental Law, nor
have any Materials of Environmental Concern been generated, treated, stored or
disposed of at, on or under any of the Relevant Properties in violation of, or
in a manner that could give rise to liability under, any applicable
Environmental Law.

 

(e)          No judicial proceeding or governmental or administrative action is
pending or, to the knowledge of the Company, threatened in writing, under any
Environmental Law to which the Company or its Subsidiaries are or to the
knowledge of the Company will be named as a party with respect to the Relevant
Properties or the operations of the Company or its Subsidiaries, nor are there
any consent decrees, consent orders, administrative orders or other orders,
outstanding under any Environmental Law with respect to the Relevant Properties
or the operations of the company or its Subsidiaries.

 

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(f)           The representations and warranties under this Section 7.21 are the
exclusive representations and warranties of the Company regarding Environmental
Laws or Materials of Environmental Concern.

 

Section 8.

Covenants of the Company.

 

The Company covenants and agrees with the Banks and the Agent that, so long as
any Commitment, Loan or Letter of Credit Liability is outstanding and until
payment in full of all Loan Obligations (other than any contingent obligations
for which no claim has been made or asserted):

 

8.01        Financial Statements, Etc. The Company shall deliver to each of the
Banks:

 

(a)          Quarterly Financial Statements. as soon as available and in any
event within 45 days after the end of each of the first three quarterly fiscal
periods of each fiscal year of the Company, the following: (i) statements of
operation, change in stockholder’s equity and cash flow of the Company for such
period and for the period from the beginning of the respective fiscal year to
the end of such period prepared on a consolidated basis, (ii) the related
consolidated balance sheet of the Company as at the end of such period,
(iii) statements of operation of the Company for such period and for the period
from the beginning of the respective fiscal year to the end of such period
prepared on a consolidating basis, and (iv) the related consolidating balance
sheet of the Company as at the end of such period, all accompanied by a
certificate of a senior financial officer of the Company, which certificate
shall state that said financial statements fairly present the financial
condition and results of operations of the Company, in each case in accordance
with GAAP, as at the end of, and for, such period (subject to normal year-end
audit adjustments);

 

(b)          Annual Financial Statements. as soon as available and in any event
within 90 days after the end of each fiscal year of the Company the following:
(i) statements of operation, change in stockholder’s equity and cash flow of the
Company for such fiscal year and the related balance sheet as at the end of such
fiscal year prepared on a consolidated basis, and accompanied by an unqualified
opinion thereon of independent certified public accountants acceptable to the
Required Banks, which opinion shall state that said audited financial statements
fairly present the financial condition and results of operations of the Company
as at the end of, and for, such fiscal year in accordance with GAAP,
(ii) statements of operation of the Company for such fiscal year prepared on a
consolidating basis, and (iii) the related consolidating balance sheet of the
Company as at the end of such fiscal year, all accompanied by a certificate of a
senior financial officer of the Company, which certificate shall state that said
consolidating financial statements fairly present the financial condition and
results of operations of the Company, in each case in accordance with GAAP, as
at the end of, and for, such period;

 

(c)          ERISA. Neither the Company nor any ERISA Affiliate shall (i)
establish, maintain, or become obligated to contribute to a Plan, or (ii) become
obligated to make contributions to a Multiemployer Plan, except with the written
consent of the Required Banks which consent shall not be unreasonably withheld.

 

(d)          Borrowing Base Certificate. as soon as available and in any event
within 10 Business Days after:

 

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(i)          the end of each calendar month,

 

(ii)         the 15th day of each calendar month, and

 

(iii)        any other accounting period for which any Bank reasonably requests
a Borrowing Base Certificate,

 

a Borrowing Base Certificate as at the end of such calendar month in respect of
clause (i) above, the 15th day of such calendar month in respect of clause (ii)
above, and the last day of such accounting period in respect of clause (iii)
above, together with reports, as of the last day of such accounting period,
setting forth the following: (A) the aging of the Receivables, specifying both
the names of the respective account debtors and the period of time each such
account has been past due, (B) a list of the Eligible Receivables and Australian
Receivables, (C) a list of Tier I Eligible Receivables and Tier II Eligible
Receivables showing insurance limits and aging, (D) if the Net Liquidating Value
of Eligible Brokerage Accounts is included in the Borrowing Base, then such
information as the Agent may request to support the value reported thereunder,
(E) the amount and value of all Eligible Inventory, Eligible Unsold Inventory
and Eligible Inventory Ordered under L/C, in each case included in the Borrowing
Base, by location and lot number, and (F) such other information as the Agent
may reasonably request.

 

Notwithstanding the foregoing and anything contained in this Agreement to the
contrary, at any time and from time to time during the period between required
deliveries of Borrowing Base Certificates, the Borrower may deliver an Interim
Borrowing Base Certificate to the Agent, and, subject to the terms of the
Intercreditor Agreement and Section 8.27 hereof, the Borrowing Base as
calculated therein shall for all purposes be the Borrowing Base (as reduced or
increased after giving effect to any reallocation pursuant to Section 2.3 of the
Intercreditor Agreement), and the Interim Borrowing Base Certificate shall for
all purposes constitute the then applicable Borrowing Base Certificate until the
next scheduled Borrowing Base Certificate or Interim Borrowing Base Certificate
is delivered, provided, that contemporaneously with the delivery of any Interim
Borrowing Base Certificate, the Company shall also deliver an Interim Borrowing
Base Certificate (as defined in the Uncommitted Credit Agreement) under the
Uncommitted Credit Agreement.

 

(e)          Collateral Audit. from time to time at the request of the Agent
(but, so long as no Default is continuing, no more than once in any fiscal
year), a report as of the end of any fiscal quarter, in form and substance
satisfactory to the Required Banks, of an independent collateral auditor
satisfactory to the Required Banks (which may be, or be affiliated with, any of
the Banks):

 

(i)          with respect to the Receivables and Inventory components included
in the Borrowing Base as at the end of such fiscal quarter which report shall
indicate that, based upon a review by such auditors of the Receivables
(including verification with respect to the amount, aging, identity and credit
of the respective account debtors and the billing practices of the Company) and
Inventory (including verification as to the value, location and respective
types), the information set forth in the Borrowing Base Certificate delivered by
the Company as at the end of such fiscal quarter is accurate and complete in all
material respects,

 

(ii)         with respect to the insurance policy or policies covering any of
the Receivables or other Collateral, and

 

(iii)        with respect to the agreements entered into by the Company with its
customers and its suppliers;

 

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provided, that notwithstanding the foregoing, the first such report shall be
dated on or around the date which is 180 days after the date hereof and
delivered to the Agent within 45 days after such date.

 

(f)           Shareholder Material. promptly upon the mailing thereof to the
shareholders of the Company generally, copies of all financial statements,
reports and proxy statements so mailed;

 

(g)          Notice of Default. promptly after the Company knows or has reason
to believe that any Default has occurred, a notice of such Default describing
the same in reasonable detail and, together with such notice or as soon
thereafter as possible, a description of the action that the Company has taken
or proposes to take with respect thereto;

 

(h)          Uncommitted Credit Agreement Documents. (i) contemporaneously with
the delivery thereof by the Borrower under the Uncommitted Credit Agreement, a
copy of each Borrowing Base Certificate (as defined in the Uncommitted Credit
Agreement) and Interim Borrowing Base Certificate (as defined in the Uncommitted
Credit Agreement) delivered thereunder, together with all supporting schedules
and information delivered therewith and (ii) promptly upon execution thereof,
copies of all amendments and waivers to the Uncommitted Credit Agreement; and

 

(i)           Other Information. from time to time such other information
regarding the financial condition, operations, business or prospects of any
Obligor as any Bank or the Agent may reasonably request, including, without
limitation, information relating to any Plan or Multiemployer Plan for which
consent has been given under Section 8.01(c).

 

The Company will furnish to each Bank, at the time it furnishes each set of
financial statements pursuant to paragraph (a) or (b) above, a certificate of a
senior financial officer of the Company in substantially the form of Exhibit G
hereto (the “Compliance Certificate”): (i) to the effect that no Event of
Default is continuing (or, if any Event of Default is continuing, describing the
same in reasonable detail and describing the action that the Company has taken
or proposes to take with respect thereto) and (ii) setting forth in reasonable
detail the computations necessary to determine whether the Company is in
compliance with Sections 8.07, 8.08(d), 8.09, 8.10 and 8.11 hereof as of the end
of the respective quarterly fiscal period or fiscal year.

 

8.02        Litigation. The Company will promptly (and in any event no later
than five Business Days after the Company has notice of the same) give to each
Bank notice of all legal or arbitral proceedings, and of all proceedings by or
before any governmental or regulatory authority or agency, and any material
development in respect of such legal or other proceedings, affecting the Company
or any of its Subsidiaries, except proceedings that, if adversely determined,
would not (either individually or in the aggregate) have a Material Adverse
Effect. Without limiting the generality of the foregoing, the Company will give
to each Bank notice of the assertion in writing of any environmental matter by
any Person against, or with respect to the activities of, the Company or any of
its Subsidiaries and notice of any alleged violation of or non-compliance with
any environmental Laws or any permits, licenses or authorizations, other than
any environmental matter or alleged violation that, if adversely determined,
would not (either individually or in the aggregate) have a Material Adverse
Effect.

 

8.03        Existence, Etc. The Company will and will cause each Obligor to:

 

(a)          Existence. preserve and maintain in full force and effect its legal
existence and, except where such failure to preserve and maintain would not
(either individually or in the aggregate) have a Material Adverse Effect, all of
its rights, privileges, licenses and franchises;

 

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(b)          Compliance with Laws. comply in all material respects with all
Requirements of Law and its organizational documents;

 

(c)          Payment of Obligations. pay and discharge its obligations,
including all taxes, assessments and governmental charges or levies imposed on
it or on its income or profits or on any of its Property prior to the date on
which penalties attach thereto, except for any such obligations the payment of
which is being contested in good faith and by proper proceedings and against
which adequate reserves in accordance with GAAP have been established and are
being maintained;

 

(d)          Maintain Property. maintain all of its Properties used or useful in
its business in good working order and condition, ordinary wear and tear
excepted;

 

(e)          Books and Records. keep adequate records and books of account, in
which complete entries will be made in accordance with GAAP; and

 

(f)           Inspection. permit, at the sole cost and expense of the Company,
representatives of any Bank or the Agent, during normal business hours and upon
reasonable prior notice (which such notice shall not be required at any time an
Event of Default exists), to examine, copy and make extracts from its books and
records, to inspect any of its Properties, and to discuss its business and
affairs with its officers, all to the extent reasonably requested by such Bank
or the Agent (which notice shall specify the reasons (determined by such Bank or
the Agent in its sole discretion) for such examination, inspections or
discussions), provided that unless an Event of Default shall have occurred and
be continuing, the Company shall not be responsible for the costs and expenses
of more than two such inspections in each year.

 

8.04        Insurance. The Company will, and will cause its Subsidiaries to,
maintain insurance with financially sound and reputable insurance companies, and
with respect to Property and risks of a character usually maintained by
corporations engaged in the same or similar business similarly situated, against
loss, damage and liability of the kinds and in the amounts customarily
maintained by such corporations, including, in any event, marine and credit
insurance policies covering the Company’s or its Subsidiaries’, as the case may
be, inventory and accounts receivable, respectively, in amounts, pursuant to
policies, and issued by insurers, acceptable to the Required Banks. The Company
shall (i) cause all such insurance (other than workers’ compensation) to name
the Agent as loss payee (to the extent covering risk of loss or damage to
tangible property or loss on accounts receivable) and as an additional named
insured as its interests may appear (to the extent covering loss or damage to
tangible property or any other risk), and furnish the Agent evidence of the
same, and (ii) at least annually, furnish to the Agent certificates of insurance
evidencing the existence of all insurance required to be maintained pursuant to
this Section 8.04 and the designation of the Agent as the loss payee and/or
additional named insured, as the case may be, thereunder to the extent required
by this Section 8.04.

 

8.05        Prohibition of Fundamental Changes. The Company will not and will
not permit any other Obligor to enter into any transaction of merger or
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), except that any Subsidiary of the
Company may be merged with or into the Company or any other Obligor, provided
that in the case of such merger, consolidation or amalgamation involving the
Company, the Company shall be the continuing or surviving Person. The Company
will not and will not permit any other Obligor to acquire any business or
material Property from, or capital stock of, or be a party to any acquisition
of, any Person except for purchases of inventory and other Property to be sold
or used in the ordinary course of business. The Company will not and will not
permit any other Obligor to convey, sell, lease, transfer or otherwise dispose
of, in one transaction or a series of transactions, any part of its business or
Property, whether now owned or hereafter acquired (including, without
limitation, receivables and leasehold interests) except the following:

 

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(a)          the Conveyance of surplus, obsolete or worn out property in the
ordinary course of business;

 

(b)          the sale of inventory in the ordinary course of business for fair
market value;

 

(c)          the Conveyance of any property, business or assets not described in
Sections 8.05(a), (b), (d), (e), (f) and (g); provided that the aggregate book
value of all such property, business or assets so Conveyed in any fiscal year of
the Company shall not exceed $2,000,000; provided further, that any such
Conveyance shall not be permitted if a Default shall have occurred and be
continuing or would exist after giving effect to such Conveyance;

 

(d)          the use of cash in the ordinary course of its business;

 

(e)          the Conveyance for fair market value of any Investment acquired in
connection with any transaction described in Section 8.08 for fair market value;

 

(f)          Dividend Payments to the extent permitted under Section 8.13
hereof; and

 

(g)          the granting of Liens not prohibited under this Agreement (but not
the Conveyance of the property subject to such Lien).

 

8.06        Limitation on Liens. The Company will not create, incur, assume or
suffer to exist any Lien upon any of its Property and will not allow any of its
Subsidiaries to create, incur, assume or suffer to exist any Lien upon any of
their respective Property, whether now owned or hereafter acquired, except:

 

(a)          Liens created pursuant to the Security Documents;

 

(b)          Liens imposed by any Governmental Authority for taxes, assessments
or charges not yet due or that are being contested in good faith and by
appropriate proceedings if adequate reserves with respect thereto are maintained
on the books of the Company in accordance with GAAP;

 

(c)          carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s
or other like Liens arising in the ordinary course of business that are not
overdue for a period of more than 30 days or that are being contested in good
faith and by appropriate proceedings; and Liens securing judgments but only to
the extent for an amount and for a period not resulting in an Event of Default
under Section 9(h) hereof;

 

(d)          pledges or deposits under worker’s compensation, unemployment
insurance and other social security legislation;

 

(e)          a mortgage Lien granted by 6900 Quad Avenue, LLC over its warehouse
facility located in Baltimore, Maryland, securing Indebtedness permitted
pursuant to Section 8.07(b) hereof

 

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(f)           deposits to secure the performance of bids, trade contracts (other
than for Indebtedness), leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business;

 

(g)          intentionally omitted;

 

(h)          Liens on Property of Imbali Metals Bvba securing the Imbali
Facility;

 

(i)           Liens encumbering Inventory securing the Indebtedness permitted
pursuant to Sections 8.07(f)(A) and (B);

 

(j)           Liens securing Indebtedness permitted under Section 8.07(g)
hereof, provided that such Liens are subject to the terms of the Intercreditor
Agreement;

 

(k)          Liens securing Indebtedness permitted under Section 8.07(h),
provided that such Liens shall encumber only the capital assets financed with
such Indebtedness; and

 

(l)           Liens securing Indebtedness permitted under Section 8.07(i) below,
provided that such Liens shall encumber only assets of the Subsidiary which
incurs such Indebtedness.

 

8.07        Indebtedness. The Company will not, and will not allow any of its
Subsidiaries to, create, incur or suffer to exist any Indebtedness except:

 

(a)          Indebtedness to the Banks hereunder;

 

(b)          Indebtedness of 6900 Quad Avenue, LLC under the Quad Avenue Loan
Agreement in an aggregate amount not to exceed $1,300,000, the proceeds of which
have been used to finance the acquisition of the warehouse facility in
Baltimore, Maryland, and any unsecured Guarantee by the Company of such
Indebtedness existing on the date hereof;

 

(c)          intentionally omitted;

 

(d)          other unsecured Indebtedness in an aggregate outstanding principal
amount not to exceed at any time $250,000;

 

(e)          Indebtedness of Imbali Metals Bvba under the Imbali Facility and
the Indebtedness of the Company under the Imbali Guarantee, so long as such
Indebtedness is subject to the Subordination Agreement;

 

(f)           the following Indebtedness, provided that (i) the aggregate amount
of the Indebtedness permitted under this clause (f) outstanding at any time
shall not exceed $25,000,000 (calculated without duplication of any Guarantee of
such Indebtedness), (ii) at the time of the incurrence of such Indebtedness no
Default shall exist or result therefrom, and (iii) the Company shall have
provided the Agent and each Bank a certificate of a financial officer of the
Company showing the Company’s compliance with the covenants set forth in Section
8.09 and 8.10 after giving effect to such Indebtedness and certifying that at
the time of the incurrence thereof and after giving effect thereto, no Default
shall exist:

 

(A)         Indebtedness of the Company which is incurred to finance the
acquisition of Inventory in the ordinary course of business and is non-recourse
to the Company and any of its Property other than the Inventory financed
thereby, pursuant to customary non-recourse provisions (including normal and
customary exceptions to the non-recourse nature thereof); provided that (1) no
Inventory so financed is included in the Borrowing Base until the Liens securing
such Indebtedness (other than Permitted Borrowing Base Liens and Liens permitted
under Section 8.07(g)) are released and (2) such Indebtedness does not exceed
100% of the cost of acquiring such Inventory;

 

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(B)         In addition to the Reimbursement Obligations, Indebtedness in the
form of reimbursement obligations under letters of credit (which are not Letters
of Credit hereunder) issued for the account of the Company to secure the
purchase price of Inventory in the ordinary course of business to be acquired by
the Company if (1) such reimbursement obligation is secured only by the
Inventory the purchase price of which is secured by the applicable Letter of
Credit; (2) no such Inventory is included in the Borrowing Base until the Liens
securing such Indebtedness are released and (3) such Indebtedness does not
exceed 100% of the cost of acquiring such Inventory;

 

(C)         Subordinated Debt; and

 

(D)         Guarantees by the Company of Indebtedness of certain of its
suppliers incurred in the form of loans made to such suppliers by third parties
(which may include one or more of the Banks) under pre-export finance
arrangements; provided that (1) with respect to any one supplier, the amount of
the Guarantee provided for the benefit of such supplier shall be limited to an
amount not to exceed 20% of the aggregate amount of such loans to such supplier
and (2) the aggregate amount of the Indebtedness Guaranteed pursuant to the
Guarantees provided under this clause (D) shall not exceed $3,000,000 at any
time outstanding;

 

(g)          Indebtedness of the Company under the Uncommitted Credit Agreement
in an aggregate principal amount outstanding not to exceed at any time an amount
equal to 50% of the aggregate Revolving Loan Commitments;

 

(h)          Indebtedness in an aggregate principal amount not to exceed
$10,000,000 incurred to finance Capital Expenditures to the extent permitted
under Section 8.20 hereof;

 

(i)           Indebtedness of any Subsidiary of the Company that is organized
under the Laws of Australia in an aggregate principal amount outstanding not to
exceed AUS$20,000,000 at any time;

 

(j)           Indebtedness under Hedging Agreements entered into in the ordinary
course of business and not for speculative purposes; and

 

(k)          any refinancings, refundings, renewals or extensions of
Indebtedness permitted under Section 8.07(b), (e) or (i), provided that (i) the
amount of such Indebtedness is not increased at the time of such refinancing,
refunding, renewal or extension and (ii) any guarantee entered into in
connection with such refinancing, refunding, renewal or extension that is not a
refinancing of an existing guarantee of such Indebtedness shall not be permitted
under this Section 8.07(k).

 

8.08        Investments. The Company will not, nor will it permit any of its
Subsidiaries to, make or permit to remain outstanding any Investments except:

 

(a)          Investments outstanding on the date hereof and identified on
Schedule II hereto;

 

(b)          deposit accounts with banks;

 

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

 

(d)          Investments by the Company in Imbali Metals Bvba in an aggregate
amount not to exceed €4,000,000 or the dollar equivalent thereof (determined
based on the amount initially advanced with respect thereto, giving effect to
any repayments and including any amount outstanding on the Closing Date) and
Investments by the Company under the Imbali Guarantee;

 

(e)          Investments of the type described in clause (a) and (b) of the
definition thereof in third parties; provided, that such Investments are made
with the proceeds of Subordinated Debt and the aggregate outstanding amount of
such Investments (determined based on the amount initially advanced with respect
thereto minus any repayment thereof) does not exceed $12,000,000 at any time;

 

(f)           Permitted Investments; and

 

(g)          other Investments in an aggregate amount not to exceed at any time
$500,000 (determined based on the amount initially advanced with respect
thereto, giving effect to any repayments).

 

8.09        Leverage Ratio. The Company will not permit the Leverage Ratio to
exceed at any time 6.00 to 1.

 

8.10        Net Working Capital. The Company will not permit its Net Working
Capital to be less than the sum of $35,000,000 plus an amount equal to 25% of
its Consolidated Net Income (but, in each case, only if a positive number) for
the fiscal year most recently ended, to be tested as of the end of each fiscal
quarter of the Company.

 

8.11        No Net Loss. The Company will not permit its Consolidated Net Income
(but calculated before taxes and extraordinary items in accordance with GAAP)
for any two or more consecutive fiscal quarters to be less than -$4,000,000
(negative four million Dollars) in the aggregate.

 

8.12        Lines of Business. The Company will not nor will it permit any
Subsidiary to engage to any substantial extent in any line or lines of business
activity other than the business of acquiring, selling, trading, extruding and
otherwise dealing in aluminum and steel semi-finished products (or other similar
metal products).

 

8.13        Dividend Payments. The Company will not, nor will it permit any of
its Subsidiaries to, declare or make any Dividend Payment (other than Dividend
Payments to the Company) at any time if (a) an Event of Default exists or (b)
immediately after giving effect to making such Dividend Payment any Event of
Default would exist or be continuing.

 

8.14        Use of Proceeds. The Company will use the proceeds of the extensions
of credit hereunder for working capital and general corporate purposes in the
ordinary course of business (in compliance with all applicable legal and
regulatory requirements, including Regulations T, U and X and the Securities Act
of 1933 (as amended) and the Securities Act of 1934 (as amended) and the
regulations thereunder); provided that neither the Agent nor any Bank has any
responsibility as to the use of any of such proceeds.

 

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8.15        Subordinated Debt. The Company will not purchase, redeem, retire or
otherwise acquire for value, or set apart any money for any sinking, defeasance
or other analogous fund for, the purchase, redemption, retirement or other
acquisition of, or make any payment or prepayment of the principal of or
interest on, or any other amount owing in respect of, any Subordinated Debt,
except for regularly scheduled payments of principal and interest in respect
thereof (if any) required pursuant to the instruments evidencing such
Subordinated Debt. The Company will not purchase, redeem, retire or otherwise
acquire for value, or set apart any money for any sinking, defeasance, or other
analogous fund for, the purchase, redemption, retirement or other acquisition
of, or make any payment or repayment of the principal of or interest on, or any
other amounts owing in respect of, the Imbali Guarantee.

 

8.16        Intentionally omitted

 

8.17        Additional Guarantors; Pledge of Additional Subsidiaries. The
Company will take such action, and will cause each of its Subsidiaries which is
organized under the Laws of a State of the United States (other than the Quad
Avenue Subsidiary) (each, a “Domestic Subsidiary”) to take such action, from
time to time as shall be necessary to ensure that all Domestic Subsidiaries of
the Company (other than the Quad Avenue Subsidiary) become “Guarantors”
hereunder and grant Liens in all their respective personal property assets,
including the following actions:

 

(a)          Subsidiary Guarantee. duly executing and delivering a Supplement to
the Subsidiary Guarantee in the form attached as Annex I thereto for each
Domestic Subsidiary formed or acquired following the Closing Date;

 

(b)          Secured Documents. causing such Domestic Subsidiary to take such
action (including executing and delivering a Supplement to the Security
Agreement in form attached as Annex I thereto properly completed and delivering
such certificates, executing and delivering such UCC financing statements) as
shall be necessary to create and perfect valid and enforceable first priority
Liens (subject to the terms of the Intercreditor Agreement) on substantially all
of the personal property assets of such Domestic Subsidiary as collateral
security for the Obligations; and

 

(c)          Corporate Authorization. delivering such proof of corporate or
other relevant action, incumbency of officers, opinions of counsel and other
documents as is consistent with those delivered by each Obligor pursuant to
Section 6.01 on the Closing Date or as the Agent shall have reasonably
requested.

 

In the event that any Obligor shall form or acquire any new Subsidiary, the
Company will promptly cause the Capital Securities issued by such Subsidiary to
be pledged and delivered pursuant to the Security Documents promptly after such
Subsidiary is formed or acquired (except that, if such Subsidiary is not a
Domestic Subsidiary, the Capital Securities issued by such Subsidiary to be
pledged pursuant to the Security Documents shall be limited to 65% of the
outstanding Capital Securities issued by such Subsidiary, provided that, if, as
a result of any change in, or the introduction, adoption, effectiveness or
interpretation of, tax laws, rules, regulations, directives or guidelines of the
United States of America after the date of this Agreement, the grant of security
interests and Liens by the Company or its Domestic Subsidiaries in respect of
any additional Capital Securities in any non-Domestic Subsidiary to the Agent
would not result in an increase in the aggregate tax liabilities of the Company
or such Domestic Subsidiary over what such liabilities would have been without
such security interests and Liens, then, promptly after the change in, or the
introduction, adoption, effectiveness or interpretation of, any such laws,
rules, regulations, directives or guidelines, such pledge shall be increased to
include all such additional Capital Securities.

 

8.18        Intentionally omitted.

 

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8.19        Amendment to Organizational Documents. The Company will not and will
not permit any Subsidiary to consent to any modification, supplement or waiver
of any of the provisions of any of their Governing Documents in a manner
materially adverse to the Banks.

 

8.20        Capital Expenditures. The Company will not and will not permit any
Subsidiary to make, incur or commit to make (by way of the acquisition of
securities of a Person or otherwise) Capital Expenditures, other than Capital
Expenditures for logistical assets in an aggregate amount not to exceed
$10,000,000.

 

8.21        Transactions with Affiliates. The Company will not, nor will it
permit any of its Subsidiaries to, sell, lease or otherwise transfer any
Property to, or purchase, lease or otherwise acquire any Property from, or
otherwise engage in any other transactions with, any of its Affiliates, except
(a) transactions in the ordinary course of business at prices and on terms and
conditions not less favorable to the Company or such Subsidiary than could be
obtained on an arm’s length basis from unrelated third parties, (b) transactions
between or among the Company and one or more Guarantors not involving any other
Affiliate, (c) any Dividend Payments permitted by Section 8.13 and (d)
Subordinated Debt permitted hereby.

 

8.22        Environmental Laws.

 

(a)          The Company will, and will cause it Subsidiaries to, comply with,
all applicable Environmental Laws and obtain and comply with and maintain
Environmental Permits, except in all cases where noncompliance or the failure to
obtain Environmental Permits could not reasonably be expected to have a Material
Adverse Effect or except to the extent that the same are being contested in good
faith by appropriate proceedings and for which adequate reserves have been
established and maintained on the books and records of the Company and the
applicable Subsidiary in accordance with GAAP.

 

(b)          The Company will, and will cause it Subsidiaries to, handle,
transport and dispose of, and cause all subtenants to handle, transport and
dispose of, all Materials of Environmental Concern in material compliance with
all applicable Environmental Laws.

 

8.23        Take or Pay Contracts. The Company will not, and will not permit its
Subsidiaries to, enter into or be a party to any contract or arrangement for the
purchase of materials, supplies, other properties or services if such contract
or arrangement requires that payment be made by the Company or a Subsidiary
regardless of whether such materials, supplies, other properties or services are
delivered or forwarded to it.

 

8.24        Limitation on Dividend Clause and Negative Pledge Clauses. The
Company will not, and will not permit its Subsidiaries to, enter into with any
Person any agreement, which prohibits or limits the ability of the Company or
any of its Subsidiaries to create, incur, assume or suffer to exist any Lien
upon or otherwise transfer any interest in any of its property, assets or
revenues, whether now owned or hereafter acquired except for (i) those
prohibitions or limitations set forth in this Agreement or any other Basic
Document or the Uncommitted Credit Agreement and any agreements entered into in
connection therewith, the Imbali Facility and any agreements entered into in
connection therewith, (ii) those existing on the Closing Date and set forth on
Schedule IV, (iii) with respect to any Subsidiary pursuant to an agreement
relating to any Indebtedness incurred by such Subsidiary on or prior to the date
on which such Subsidiary became a Subsidiary or was acquired by the Company or
any of its Subsidiaries and outstanding on such date; (iv) with respect to
purchase money obligations for any property acquired in the ordinary course of
business that impose restrictions on such property, and (v) consisting of
customary non-assignment or subletting provisions in leases governing leasehold
interests to the extent such provisions restrict the transfer of the lease or
the property leased thereunder, and customary non-assignment provisions of other
contracts entered into in the ordinary course of business..

 

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8.25         Limitation on Sales and Leasebacks. The Company will not, and will
not permit its Subsidiaries to, enter into any arrangement with any Person
providing for (i) the leasing by the Company or any Subsidiary of real or
personal property which has been or is to be either sold or transferred by the
Company or such Subsidiary to such Person or to any other Person to whom funds
have been or are to be advanced by such Person on the security of such property
or rental obligations of the Company or (ii) the purchase or transfer of any
real or personal property from any Person to the Company or such Subsidiary
which has been leased by the Company or such Subsidiary to such Person, except
for (in each case) any transactions, the consideration of which does not exceed
in the aggregate $1,000,000 in any calendar year.

 

8.26         Accounting Changes. The Company will not, and will not permit its
Subsidiaries to, make any significant change in its accounting treatment or
reporting practices, except as required by GAAP, without providing the Agent
with ten (10) days prior written notice of such change. At the end of any
calendar year during which any such change has occurred, the Company shall
prepare and deliver to the Agent an explanatory statement, in form and substance
reasonably satisfactory to the Agent, reconciling the previous treatment or
practice with the new treatment or practice.

 

8.27         Borrowing Base. The Company hereby agrees that it will not at any
time remove Property (or proceeds thereof) from the Borrowing Base for any
reason (other than (i) pursuant to a transaction permitted under Section
8.05(b), (c) or (d) above or (ii) as a result of becoming ineligible for
inclusion therein), provided, that this provision shall not affect or restrict
any reallocation of Borrowing Base assets from or to the Borrowing Base as
expressly set forth in the Intercreditor Agreement.

 

8.28         Deposit Accounts. The Company will not open any operating deposit
accounts located in the United States (other than payroll accounts) not in
existence on the date hereof without the prior written consent (not to be
unreasonably withheld) of all Banks (other than, for the avoidance of doubt, any
Affiliate of an Issuing Bank which has issued a Letter of Credit pursuant to the
last sentence of the definition of Issuing Bank).

 

8.29         Storage Facilities. Upon the request of the Agent from time to
time, the Company shall use commercially reasonable efforts to obtain control
agreements among the Company, each storage facility specified by the Agent and
the Agent (in form and substance reasonably acceptable to the Agent), under
which each applicable storage facility shall agree that upon receipt of notice
from the Agent of the occurrence and continuance of an Event of Default, it
shall accept instruction from the Agent and shall no longer accept instruction
from the Company.

 

8.30         Sanctions. The Company hereby agrees that it shall and shall cause
its Subsidiaries to (i) maintain in effect and enforce policies and procedures
designed to ensure compliance by the Company, any Person that is an Affiliate of
the Company, including its Subsidiaries, and, to the extent commercially
reasonable, its agents with applicable Anti-Terrorism Laws and (ii) ensure at
all times the truth and accuracy of the representations and warranties, and
adherence to, the covenants, set forth in Section 7.16 hereof.

 

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Section 9.

Events of Default.

 

9.01        Events of Default. If one or more of the following events (herein
called “Events of Default”) shall occur and be continuing:

 

(a)          Payment Default. The Company shall default in the payment when due
(whether at stated maturity or upon mandatory or optional prepayment) of: (i)
any principal of any Loan or any Reimbursement Obligation, the amount necessary
to provide Cash Collateral for any Letter of Credit or otherwise as required
thereby, or (ii) any fee or any other amount payable by it hereunder (other than
interest) or under any other Basic Document or any interest on any Loan or any
Reimbursement Obligation and such default in payment (under this clause (ii))
shall continue unremedied for three (3) Business Days after notice thereof to
the Company by the Agent; or

 

(b)          Cross Default. (i) The Company shall default in the payment when
due of any principal of or interest on any of its other Material Indebtedness or
any of its Subsidiaries shall default in the payment when due of any principal
of or interest on any of its Material Indebtedness; or any event specified in
any note, agreement, indenture or other document evidencing or relating to any
such Material Indebtedness shall occur if the effect of such event is to cause,
or (with the giving of any notice or the lapse of time or both) to permit the
holder or holders of such Material Indebtedness (or a trustee or agent on behalf
of such holder or holders) to cause, such Material Indebtedness to become due,
or to be prepaid in full (whether by redemption, purchase, offer to purchase or
otherwise), prior to its stated maturity; or an early termination date (or
comparable event) occurs with respect to any Hedging Agreement or other swap or
derivative whether or not pursuant to an ISDA master agreement that constitutes
Material Indebtedness; as used herein, the term “Material Indebtedness” means
Indebtedness under the Uncommitted Credit Agreement, Indebtedness under the
Imbali Facility and any other Indebtedness (other than the Obligations) with an
outstanding principal balance (or with respect to Hedging Agreements or other
swap or derivative whether or not pursuant to an ISDA master agreement, the
aggregate amount (giving effect to any netting agreements) that the Company or
such Subsidiary would be required to pay if an early termination date or
comparable event under such agreement were to occur at such time) of $5,000,000
or more, in any individual case or in the aggregate; or

 

(c)          Representations and Warranties. Any representation, warranty or
certification made or deemed made herein or in any other Basic Document (or in
any modification or supplement hereto or thereto) by the Company or any of its
Subsidiaries, or any certificate furnished to any Bank or the Agent pursuant to
the provisions hereof or thereof, shall prove to have been false or misleading
as of the time made or furnished in any material respect; or

 

(d)          Covenant Defaults. The Company shall default in the performance of
any of its obligations under any of Sections 8.01(g), 8.03(a), 8.05, 8.06, 8.07,
8.08, 8.09, 8.10, 8.11, 8.13, 8.15, 8.19, 8.20, 8.21 or 8.27 hereof or any
Obligor shall default in the performance of any of its obligations under the
Security Agreement; or the Company shall default in the performance of its
obligations under Section 8.01(d) hereof and such default shall continue
unremedied for a period of five (5) or more Business Days; or the Company shall
default in the performance of any of its obligations in this Agreement or any
other Basic Document (other than those already specified above in this clause
(d)) and such default shall continue unremedied for a period of thirty (30) or
more days after notice thereof to the Company by the Agent or any Bank (through
the Agent); or

 

(e)          Failure to Pay Debts. The Company or any of its Subsidiaries shall
admit in writing its inability to, or be generally unable to, pay its debts as
such debts become due; or

 

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(f)           Voluntary Insolvency Proceedings. The Company or any of its
Subsidiaries shall (i) apply for or consent to the appointment of, or the taking
of possession by, a receiver, custodian, trustee, examiner or liquidator of
itself or of all or a substantial part of its Property, (ii) make a general
assignment for the benefit of its creditors, (iii) commence a voluntary case
under the Bankruptcy Code, (iv) file a petition seeking to take advantage of any
Law of any jurisdiction (domestic or foreign) relating to bankruptcy,
insolvency, reorganization, liquidation, dissolution, arrangement or winding-up,
or composition or readjustment of debts, (v) fail to controvert in a timely and
appropriate manner, or acquiesce in writing to, any petition filed against it in
an involuntary case under the Bankruptcy Code or, in respect of Subsidiaries of
the Company which are not Domestic Subsidiaries, any similar Law relating to
bankruptcy, insolvency, reorganization, liquidation, dissolution, arrangement or
winding up, or composition or readjustment of debts, or (vi) take any corporate
action for the purpose of effecting any of the foregoing; or

 

(g)          Involuntary Insolvency Proceedings. A proceeding or case shall be
commenced, without the application or consent of the Company or any of its
Subsidiaries, in any court of competent jurisdiction, seeking (i) its
reorganization, liquidation, dissolution, arrangement or winding-up, or the
composition or readjustment of its debts, (ii) the appointment of a receiver,
custodian, trustee, examiner, liquidator or the like of the Company or any of
its Subsidiaries or of all or any substantial part of its Property, or
(iii) similar relief in respect of the Company or any of its Subsidiaries under
any present or future Law of any jurisdiction (domestic or foreign) relating to
bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment
of debts, and such proceeding or case shall continue undismissed, or an order,
judgment or decree approving or ordering any of the foregoing shall be entered
and continue unstayed and in effect, for a period of 60 or more days; or an
order for relief against the Company or any of its Subsidiaries shall be entered
in an involuntary case under the Bankruptcy Code; or

 

(h)          Judgment Default. A final judgment or judgments for the payment of
money in excess of $1,000,000 (exclusive of judgment amounts fully covered by
insurance where the insurer has admitted liability in respect of such judgment)
shall be rendered by one or more courts, administrative tribunals or other
bodies having jurisdiction against the Company or any of its Subsidiaries and
the same shall not be discharged (or provision shall not be made for such
discharge), or a stay of execution thereof shall not be procured, within 30 days
from the date of entry thereof and the Company or any of its Subsidiaries shall
not, within said period of 30 days, or such longer period during which execution
of the same has been stayed, appeal therefrom and cause the execution thereof to
be stayed during such appeal; or

 

(i)           ERISA Events. The Company or any ERISA Affiliate shall incur any
liability to a Plan, a Multiemployer Plan or PBGC (or any combination of the
foregoing) that would (either individually or in the aggregate) have a Material
Adverse Effect; or

 

(j)           Change of Control. (i) The Principal Shareholders shall cease to
own beneficially and of record at least 20% of the issued and outstanding
capital stock having voting power to elect members of the board of directors of
the Company, (ii) Nathan Kahn shall cease to be President of the Company and a
successor acceptable to the Required Banks shall not have been appointed to such
position within 90 days thereafter (such determination of acceptability by the
Required Banks to be made for purposes of waiving any resulting Default only,
the Company agreeing that it is solely responsible for selecting an appropriate
replacement) or (iii) the Persons who were members of the board of directors of
the Company on the Closing Date (together with any new directors whose election
to such board of directors or whose nomination for election was approved by a
vote of a majority of such members of the board of directors or members whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the members of the board of directors of the
Company; or

 

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(k)          Security Documents; Basic Documents. The Liens created by the
Security Documents shall at any time not constitute a valid and perfected Lien
on the Collateral intended to be covered thereby (to the extent perfection by
filing, registration, recordation or possession is required herein or therein)
in favor of the Banks, free and clear of all other Liens (other than Liens
permitted under Section 8.06 hereof or under the respective Security Documents),
or, except for expiration in accordance with its terms, any of the Basic
Documents shall for whatever reason be terminated or cease to be in full force
and effect, or the enforceability thereof shall be contested by any Obligor, or
any Obligor shall assert in writing that any Basic Document is unenforceable; or

 

(l)           Subordination Provisions. Any subordination provision of any
Indebtedness subordinated to the Loan Obligations shall cease, for any reason,
to be in full force and effect, or the Company or any of its Subsidiaries shall
so assert in writing, unless such Indebtedness would, at all times thereafter,
be otherwise permitted under Section 8.07; or

 

(m)         Quad Avenue Loan Agreement. 6900 Quad Avenue, LLC shall default in
the performance of its obligations under Section 4(a) of the Quad Avenue Loan
Agreement; or

 

(n)          Uncommitted Credit Agreement Disclosure. At any time, the
Uncommitted Credit Agreement shall be amended, modified or waived in a manner
which restricts the right of the Uncommitted Facility Agent to share with the
Agent and the Banks, borrowing base reports delivered under the Uncommitted
Credit Agreement and related information;

 

THEREUPON: (1) in the case of an Event of Default other than one referred to in
clause (f) or (g) of this Section 9, the Agent may with the consent of the
Required Banks, and, upon request of the Required Banks shall by notice to the
Company, terminate the Commitments and/or declare the principal amount then
outstanding of, and the accrued interest on, the Loans, the Reimbursement
Obligations and all other Loan Obligations (including any amounts payable under
Section 5.04 or 5.05 hereof) to be forthwith due and payable, whereupon such
amounts shall be immediately due and payable without presentment, demand,
protest or other formalities of any kind, all of which are hereby expressly
waived by the Company; and (2) in the case of the occurrence of an Event of
Default referred to in clause (f) or (g) of this Section 9, the Commitments
shall automatically be terminated and the principal amount then outstanding of,
and the accrued interest on, the Loans, the Reimbursement Obligations and all
other Loan Obligations (including any amounts payable under Section 5.01 and
5.04 hereof) shall automatically become immediately due and payable without
presentment, demand, protest or other formalities of any kind, all of which are
hereby expressly waived by the Company.

 

9.02        Cover for Contingent Obligations. In addition, upon the occurrence
and during the continuance of any Event of Default (if the Agent has declared
the principal amount then outstanding of, and accrued interest on, the Loans and
all other Loan Obligations to be due and payable), the Company agrees that it
shall, if requested by the Agent or the Required Banks through the Agent (and,
in the case of any Event of Default referred to in clause (f) or (g) of this
Section 9, forthwith, without any demand or the taking of any other action by
the Agent or such Banks) provide cover for the Letter of Credit Liabilities by
depositing with the Agent Cash Collateral in an amount equal to 103% of the then
aggregate undrawn face amount of all Letters of Credit, which funds shall be
held by the Agent in the Collateral Account as collateral security for the
Obligations.

 

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Section 10.

The Agent.

 

10.01      Appointment, Powers and Immunities. Each Bank hereby irrevocably
appoints and authorizes Rabobank to act as agent on its behalf, and on behalf of
each of its Affiliates who are owed Obligations (each such Affiliate by
acceptance of the benefits of the Basic Documents hereby ratifying such
appointment), hereunder and under the other Basic Documents with such powers as
are specifically delegated to the Agent by the terms of this Agreement and of
the other Basic Documents, together with such other powers as are reasonably
incidental thereto. The Agent (which term as used in this sentence and in
Section 10.05 and the first sentence of Section 10.06 hereof shall include
reference to its Affiliates and its own and its Affiliates’ officers, directors,
employees and agents): (a) has no duties or responsibilities except those
expressly set forth in this Agreement and in the other Basic Documents, and
shall not by reason of this Agreement or any other Basic Document be a trustee
or fiduciary for any Secured Party; (b) shall not be responsible to any Secured
Party for any recitals, statements, representations or warranties contained in
this Agreement or in any other Basic Document, or in any certificate or other
document referred to or provided for in, or received by any of them under, this
Agreement or any other Basic Document, or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Basic Document or any other document referred to or provided for
herein or therein or for any failure by any Obligor or any other Person to
perform any of its obligations hereunder or thereunder; (c) shall not be
required to initiate or conduct any litigation or collection proceedings
hereunder or under any other Basic Document, unless so directed by the Required
Banks; (d) shall not be required to act as collateral agent hereunder or
otherwise be responsible for any collateral security granted in connection
herewith except with respect to any collateral that cannot be perfected by
filing Uniform Commercial Code financing statements and is required to be
delivered to the Agent under the Basic Documents; and (e) shall not be
responsible for any action taken or omitted to be taken by it hereunder or under
any other Basic Document or under any other document or instrument referred to
or provided for herein or therein or in connection herewith or therewith, except
for its own gross negligence or willful misconduct. The Agent may employ agents
and attorneys-in-fact and shall not be responsible for the negligence or
misconduct of any such agents or attorneys-in-fact selected by it in good faith.
The Agent may deem and treat the Banks named in the Register as the “Banks”
hereunder for all purposes hereof unless and until a notice of the assignment or
transfer thereof has been filed with the Agent.

 

10.02      Reliance by Agent. The Agent shall be entitled to rely upon any
certification, notice or other communication (including any thereof by
telephone, telecopy, telex, telegram or cable) believed by it to be genuine and
correct and to have been signed or sent by or on behalf of the proper Person or
Persons, and upon advice and statements of legal counsel, independent
accountants and other experts selected by the Agent. As to any matters not
expressly provided for by this Agreement or any other Basic Document, the Agent
shall in all cases be fully protected in acting, or in refraining from acting,
hereunder or thereunder in accordance with instructions given by the Required
Banks and such instructions of such Banks and any action taken or failure to act
pursuant thereto shall be binding on all of the Banks.

 

10.03      Defaults. The Agent shall not be deemed to have knowledge or notice
of the occurrence of a Default (other than payment Defaults) unless the Agent
has received notice from a Bank or the Company specifying such Default and
stating that such notice is a “Notice of Default”. In the event that the Agent
receives such a notice of the occurrence of a Default or becomes aware of a
payment Default, the Agent shall give prompt notice thereof to the Banks. The
Agent shall (subject to Section 10.07 hereof) take such action with respect to
such Default as shall be directed by the Required Banks, provided that, unless
and until the Agent has received such directions, the Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Default as it shall deem advisable in the best interest of the
Banks except to the extent that this Agreement expressly requires that such
action be taken, or not be taken, only with the consent or upon the
authorization of the Required Banks.

 

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10.04      Rights as a Bank. With respect to its Commitments and the Loans made
by it, Rabobank (and any successor acting as Agent) in its capacity as a Bank
hereunder has the same rights and powers hereunder as any other Bank and may
exercise the same as though it were not acting as the Agent, and the term “Bank”
or “Banks” shall, unless the context otherwise indicates, include the Agent in
its individual capacity. Rabobank (and any successor acting as Agent) and its
affiliates may (without having to account therefor to any Bank) accept deposits
from, lend money to, make investments in and generally engage in any kind of
banking, trust or other business with the Company (and any of its Subsidiaries
or Affiliates) as if it were not acting as the Agent, and Rabobank and its
affiliates may accept fees and other consideration from the Company for services
in connection with this Agreement or otherwise without having to account for the
same to the Banks.

 

10.05      Indemnification. The Banks severally agree to indemnify the Agent (to
the extent not reimbursed under Section 11.03 hereof, but without limiting the
obligations of the Company under said Section 11.03) and each of the Agent’s
respective officers, directors, employees and agents, ratably in accordance with
their respective Revolving Loan Commitments, for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind and nature whatsoever that may be imposed
on, incurred by or asserted against the Agent in its capacity as Agent
(including by any Secured Party) arising out of or by reason of any
investigation in or in any way relating to or arising out of this Agreement or
any other Basic Document or any other documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby (including
the costs and expenses that the Company is obligated to pay under Section 11.03
hereof but excluding, unless a Default exists, normal administrative costs and
expenses incident to the performance of its agency duties hereunder) or the
enforcement of any of the terms hereof or thereof or of any such other
documents, provided that no Bank shall be liable for any of the foregoing to the
extent they arise from the gross negligence or willful misconduct of the party
to be indemnified. The Banks severally agree to indemnify each Fronting Bank and
each of their respective officers, directors, employees and agents (to the
extent not reimbursed under Section 11.03 hereof, but without limiting the
obligations of the Company under said Section 11.03), ratably in accordance with
their respective Revolving Loan Commitments, for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind and nature whatsoever that may be imposed
on, incurred by or asserted against any of them in their capacity as a Fronting
Bank arising out of or by reason of any investigation in or in any way relating
to or arising out of this Agreement or any other Basic Document or any other
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby (including the costs and expenses that the
Company is obligated to pay under Section 11.03 hereof but excluding, unless a
Default exists, normal administrative costs and expenses incident to the
performance of its agency duties hereunder) or the enforcement of any of the
terms hereof or thereof or of any such other documents, provided that no Bank
shall be liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the party to be indemnified.

 

10.06      Non-Reliance on Agent and Other Banks. Each Bank agrees that it has,
independently and without reliance on the Agent or any other Bank, and based on
such documents and information as it has deemed appropriate, made its own credit
analysis of the Company and decision to enter into this Agreement and that it
will, independently and without reliance upon the Agent or any other Bank, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own analysis and decisions in taking or not taking
action under this Agreement or under any other Basic Document. The Agent shall
not be required to keep itself informed as to the performance or observance by
any Obligor of this Agreement or any of the other Basic Documents or any other
document referred to or provided for herein or therein or to inspect the
Properties or books of the Company. Except for notices, reports and other
documents and information expressly required to be furnished to the Banks by the
Agent hereunder or under the Security Documents, the Agent shall not have any
duty or responsibility to provide any Bank with any credit or other information
concerning the affairs, financial condition or business of the Company (or any
of its Affiliates) that may come into the possession of the Agent or any of its
Affiliates.

 

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10.07      Failure to Act. Except for action expressly required of the Agent
hereunder and under the other Basic Documents, the Agent shall in all cases be
fully justified in failing or refusing to act hereunder and thereunder unless it
shall receive further assurances to its satisfaction from the Banks of their
indemnification obligations under Section 10.05 hereof against any and all
liability and expense that may be incurred by it by reason of taking or
continuing to take any such action.

 

10.08      Resignation or Removal of Agent. Subject to the appointment and
acceptance of a successor Agent as provided below, the Agent may resign at any
time by giving notice thereof to the Banks and the Company, and the Agent may be
removed at any time with or without cause by the Required Banks. Upon any such
resignation or removal, the Required Banks have the right to appoint a successor
Agent, subject to the Company’s approval of such successor Agent. If no
successor Agent has been so appointed by the Required Banks (or if the Company
shall fail to approve such a successor Agent) and has accepted such appointment
within 30 days after the retiring Agent’s giving of notice of resignation or the
Required Banks’ removal of the retiring Agent, then the retiring Agent may, on
behalf of the Banks, subject to the Company’s approval, appoint a successor
Agent, that shall be a bank that has an office in New York, New York or assign
all of its rights and delegate all of its obligations hereunder and under the
other Basic Documents to the Banks. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, or the assignment and delegation to the
Banks as set forth in the preceding sentence, such successor Agent (or the
Banks, as applicable) 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 hereunder. After any
retiring Agent’s resignation or removal hereunder as Agent, the provisions of
this Section 10 shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as the Agent.

 

10.09      Agency Fee. So long as the Commitments are in effect and until
payment in full of the Obligations, the Company will pay to the Agent an agency
fee as mutually agreed upon.

 

10.10      Consents under Other Basic Documents. Except as otherwise provided in
Section 11.04 hereof, the Agent may, with the prior consent of the Required
Banks (but not otherwise), consent to any modification, supplement or waiver
under any of the Basic Documents, provided that, without the prior consent of
each Bank, the Agent shall not (except as provided herein or in the Security
Documents) release any Collateral or otherwise terminate any Lien under any
Basic Document or agree to additional obligations being secured by such
Collateral (unless the Lien for such additional obligations shall be junior and
subordinate to the Lien in favor of the other obligations secured by such Basic
Document).

 

10.11      Pendency of Insolvency. In case of the pendency of any receivership,
insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial proceeding relative to any Obligor, the Agent
(irrespective of whether the principal of any Obligation shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of
whether the Agent shall have made any demand on any Obligor) shall be entitled
and empowered, by intervention in such proceeding or otherwise:

 

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(a)          Filing Claims. to file and prove a claim for the whole amount of
the principal and interest owing and unpaid in respect of the Obligations that
are owing and unpaid and to file such other documents as may be necessary or
advisable in order to have the claims of the Secured Parties (including any
claim for the reasonable compensation, expenses, disbursements and advances of
the Banks and the Agent and their respective agents and counsel and all other
amounts due the Banks and the Agent under Section 11.03) allowed in such
judicial proceeding; and

 

(b)          Collection of Funds. to collect and receive any monies or other
property payable or deliverable on any such claims and to distribute the same;

 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Bank to make such payments to the Agent and, in the event that the Agent
shall consent to the making of such payments directly to the Secured Parties, to
pay to the Agent any amount due for the reasonable compensation, expenses,
disbursements and advances of the Agent and its agents and counsel, and any
other amounts due the Agent hereunder. Nothing contained herein shall be deemed
to authorize the Agent to authorize or consent to or accept or adopt on behalf
of any Bank any plan of reorganization, arrangement, adjustment or composition
affecting the Obligations or the rights of any Bank or to authorize the Agent to
vote in respect of the claim of any Bank in any such proceeding.

 

10.12      Permitted Release of Collateral.

 

(a)          Automatic Release. If any Obligor sells any Collateral which is
permitted to be disposed of under Section 8.05, the Liens in the Collateral
granted to the Agent under the Basic Document shall automatically terminate and
the Collateral will be disposed of free and clear of all Liens of the Agent.

 

(b)          Written Release. The Agent is authorized to release of record, and
shall release of record, any Liens encumbering any Collateral that is permitted
to be sold upon an authorized officer of the Company certifying in writing to
the Agent that the proposed disposition of Collateral is permitted under Section
8.05. To the extent the Agent is requested to execute any release documents or
other documents evidencing the termination of Liens in accordance with the
immediately preceding sentence, the Agent shall do so promptly upon request of
the Company without the consent or further agreement of any Secured Party. If
the disposition of Collateral is not permitted under or pursuant to the Basic
Documents, the Liens encumbering the Collateral may only be released in
accordance with the provisions of Section 11.04.

 

(c)          Other Authorized Release and Subordination. The Agent is
irrevocably authorized by the Secured Parties, without any consent or further
agreement of any Secured Party to: (i) subordinate or release the Liens granted
to the Agent to secure the Obligations with respect to any property which is
permitted to be subject to a Lien of the type described in paragraphs (g) or (i)
of Section 8.06 and (ii) release the Agent’s Liens when all the Commitments have
terminated, all the Obligations have been paid in full and otherwise satisfied
and all Letters of Credit have expired or been terminated.

 

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10.13      Powers and Immunities of Fronting Banks. Neither any Fronting Bank
nor any of their respective Affiliates, officers, directors, agents or employees
shall be liable for any action taken or omitted to be taken by any of them
hereunder or otherwise in connection with any Basic Document except for its or
their own gross negligence or willful misconduct. Without limiting the
generality of the preceding sentence, no Fronting Bank (a) shall have any duties
or responsibilities except those expressly set forth in the Basic Documents, and
shall by reason of any Basic Document be a trustee or fiduciary for any Bank or
for the Agent, (b) shall be required to initiate any litigation or collection
proceedings under any Basic Document, and (c) shall be responsible to any Bank
or the Agent for any recitals, statements, representations, or warranties
contained in any Basic Document, or any certificate or other documentation
referred to or provided for in, or received by any of them under, any Basic
Document, or for the value, validity, effectiveness, enforceability, or
sufficiency of any Basic Document or any other documentation referred to or
provided for therein or for any failure by any Person to perform any of its
obligations thereunder. Each Fronting Bank: (a) may consult with legal counsel
(including counsel for the Company or the Agent), independent public
accountants, and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants, or experts, and (b) shall incur no
liability under or in respect of any Basic Document by acting upon any notice,
consent, certificate, or other instrument or writing believed by it to be
genuine and signed or sent by the proper party or parties. As to any matters not
expressly provided for by any Basic Document, each Fronting Bank shall in all
cases be fully protected in acting, or in refraining from acting, hereunder in
accordance with instructions signed by the Required Banks, and such instructions
of the Required Banks and any action taken or failure to act pursuant thereto
shall be binding on all of the Banks and the Agent; provided, however, that a
Fronting Bank shall not be required to take any action which it reasonably
believes exposes it to personal liability or which it reasonably believes is
contrary to any Basic Document or applicable Law.

 

10.14      Perfection by Possession and Control; Deposit Accounts. The Agent
hereby appoints each of the other Banks to serve as bailee to perfect Agent’s
Liens in any Collateral in the possession of any such other Bank. Each Bank
possessing any Collateral agrees to so act as bailee for the Agent in accordance
with the terms and provisions hereof. In furtherance of the forgoing, each Bank
acknowledges that certain of the Obligors may maintain deposit accounts at one
or more of the Banks (all such accounts, herein the “Obligor Accounts”). Unless
a Bank has entered into a control agreement with the Agent with respect to the
Obligor Accounts (in which event such control agreement shall take precedent
over the provisions of this Section 10.14 with respect to the Obligor Accounts
covered thereby), each Bank agrees to hold its Obligor Accounts as bailee for
the Agent to perfect the Agent’s Liens therein. Prior to the receipt by a Bank
of a written notice of an Event of Default from the Agent, the Obligors are
entitled to make withdrawals from the Obligor Accounts and make deposits into
all the Obligor Accounts. When a Bank has received a written notice of an Event
of Default from the Agent and as long as such Event of Default exists, other
than in respect of any payroll accounts, (a) the Agent shall be the only party
entitled to make withdrawals from or otherwise give any direction with respect
to the Obligor Accounts and each Bank agrees to comply with the instructions
originated by the Agent directing deposition of the funds in or relating to the
Obligor Accounts it holds without further consent by any Obligor, and (b) each
Bank shall transfer, in immediately available funds by wire transfer to the
Agent, the amount of the collected funds credited to the Obligor Accounts it
holds and deliver to the Agent all moneys or instruments relating thereto or
held therein and any other Collateral at any time the Agent demands payment or
delivery thereof by such written notice to such Bank. Each Obligor agrees that
each Bank is authorized to immediately deliver all the Collateral to the Agent
upon the Bank’s receipt of such notice from the Agent. No Bank (other than the
Agent acting for the benefit of the Secured Parties) shall exercise any right of
set–off or banker’s lien against any Obligor Account for any obligations other
than the Obligations; provided that a Bank shall be entitled to charge, or
set–off against an Obligor Account and retain for its own account, any customary
fees, costs, charges and expenses owed to it in connection with the opening,
operating and maintaining such Obligor Account and for the amount of any item
credited to the Obligor Account that is subsequently returned for any reason.

 

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10.15      Bank Affiliates Rights. By accepting the benefits of the Basic
Documents, any Affiliate of a Bank that is owed any Obligation is bound by the
terms of the Basic Documents. But notwithstanding the foregoing: (a) neither the
Agent, any Bank nor any Obligor shall be obligated to deliver any notice or
communication required to be delivered to any Bank under any Basic Document to
any Affiliate of any Bank; and (b) no Affiliate of any Bank that is owed any
Obligation shall be included in the determination of the Required Banks or
entitled to consent to, reject, or participate in any manner in any amendment,
waiver or other modification of any Basic Document. The Agent shall not have any
liabilities, obligations or responsibilities of any kind whatsoever to any
Affiliate of any Bank who is owed any Obligation. The Agent shall deal solely
and directly with the related Bank of any such Affiliate in connection with all
matters relating to the Basic Documents. The Obligation owed to such Affiliate
shall be considered the Obligation of its related Bank for all purposes under
the Basic Documents and such Bank shall be solely responsible to the other
parties hereto for all the obligations of such Affiliate under any Basic
Document.

 

10.16      Other Agents. Certain of the Banks may have been designated as
syndication agents, documentation agents or other similar designation in
recognition of the level of their respective Revolving Loan Commitments. No
Bank, other than the Bank serving as Agent, is an agent for the Banks nor shall
any such Bank have any obligation hereunder other than those existing in its
capacity as a Bank.

 

10.17      Intercreditor Agreement.

 

(a)          Each Bank hereby authorizes the Agent to enter into the
Intercreditor Agreement on its behalf and agrees to be bound by the terms
thereof.

 

(b)          Each of the Company and the Banks hereby authorizes the Agent to
share with the Uncommitted Facility Agent (and the lenders under the Uncommitted
Credit Agreement), copies of all Borrowing Base Certificates and all schedules
and amendments thereto (including, without limitation, summaries and detail of
all credit extensions hereunder) and any amendments to this Agreement or the
other Basic Documents.

 

Section 11.

Miscellaneous.

 

11.01      Waiver. No failure on the part of the Agent or any Bank to exercise
and no delay in exercising, and no course of dealing with respect to, any right,
power or privilege under this Agreement or any other Basic Document shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege under this Agreement or any other Basic Document
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The remedies provided herein are cumulative and not
exclusive of any remedies provided by Law. No waiver of any provision of any
Basic Document or consent to any departure by any Obligor therefrom shall in any
event be effective unless the same shall be permitted by Section 11.04, and then
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given. Without limiting the generality of the foregoing,
the making of a Loan or issuance of a Letter of Credit shall not be construed as
a waiver of any Default, regardless of whether the Agent or any Bank may have
had notice or knowledge of such Default at the time.

 

11.02      Notices.

 

(a)          General Address for Notices. All notices, requests and other
communications (“Communications”) provided for herein and under the other Basic
Documents (including any modifications of, or waivers, requests or consents
under, this Agreement) shall be given or made in writing (including by
facsimile) delivered to the intended recipient at the “Address for Notices”
specified below its name on the signature pages hereof; or, as to any party, at
such other address as shall be designated by such party in a notice to each
other party. Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given (i) if transmitted by
facsimile, when the confirmation of transmission thereof is received by the
transmitter, (ii) when personally delivered or (iii) in the case of a mailed
notice, upon receipt, in each case given or addressed as aforesaid. The parties
hereto agree that delivery of an executed counterpart of a signature page to
this Agreement and each other Basic Document by facsimile (or electronic
transmission) shall be effective as delivery of an original executed counterpart
of this Agreement or such other Basic Document.

 

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(b)          Electronic Communications. Communications to the Banks under the
Basic Documents may be delivered or furnished by electronic communications
pursuant to procedures approved by the Agent; provided that the foregoing shall
not apply to notices pursuant to Section 2.01 or 4.05 unless otherwise agreed by
the Agent and the applicable Bank. The Agent or the Company may, in its
discretion, agree to accept notices and other communications to it under the
Basic Documents by electronic communications pursuant to procedures approved by
it; provided that approval of such procedures may be limited to particular
notices or Communications.

 

(c)          Electronic Transmission System. The Company and the Banks agree
that the Agent may make the Communications available to the Banks and the
Company by posting the Communications on Intralinks or a substantially similar
electronic transmission system (the “Platform”). THE PLATFORM IS PROVIDED “AS
IS” AND “AS AVAILABLE”. THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE
ACCURACY OR COMPLETENESS OF THE COMMUNICATIONS, OR THE ADEQUACY OF THE PLATFORM
AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS.
NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING, ANY WARRANTY
OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD
PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE AGENT
PARTIES IN CONNECTION WITH THE COMMUNICATIONS OR THE PLATFORM. IN NO EVENT SHALL
THE AGENT OR ANY OF ITS AFFILIATES OR ANY OF THEIR RESPECTIVE OFFICERS,
DIRECTORS, AGENTS OR EMPLOYEES (COLLECTIVELY, THE “AGENT PARTIES”) HAVE ANY
LIABILITY TO ANY OBLIGOR, ANY BANK OR ANY OTHER PERSON OR ENTITY FOR DAMAGES OF
ANY KIND, INCLUDING DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL
DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT
OF ANY OBLIGOR’S OR THE AGENT’S TRANSMISSION OF COMMUNICATIONS THROUGH THE
INTERNET, EXCEPT TO THE EXTENT THE LIABILITY OF ANY AGENT PARTY IS FOUND IN A
FINAL NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE
RESULTED FROM SUCH AGENT PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

 

(d)          Communications Through the Platform. Each Bank agrees that notice
to it (as provided in the next sentence) specifying that the Communications have
been posted to the Platform shall constitute effective delivery of the
Communications to such Bank for purposes hereof. Each Bank agrees to provide to
the Agent in writing (including by electronic communication), promptly after the
date of this Agreement, an e-mail address to which the foregoing notice may be
sent by electronic transmission and agrees that the foregoing notice may be sent
to such e-mail address.

 

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11.03      Expenses, etc. The Company agrees to pay or reimburse each of the
Banks and the Agent for: (a) all reasonable and documented out-of-pocket costs
and expenses of the Agent (including the reasonable and documented fees and
expenses of Emmet, Marvin & Martin, LLP) in connection with (i) the negotiation,
preparation, execution, delivery and administration of this Agreement and the
other Basic Documents and the extension of credit hereunder and (ii) the
negotiation or preparation of any modification, supplement or waiver of any of
the terms of this Agreement or any of the other Basic Documents (whether or not
consummated); (b) all reasonable out-of-pocket costs and expenses of each Bank
and the Agent (including the reasonable fees and expenses of legal counsel) in
connection with (i) any Default and any enforcement, protection of rights or
collection proceedings resulting therefrom, including all manner of
participation in or other involvement with (x) bankruptcy, insolvency,
receivership, foreclosure, winding up or liquidation proceedings, (y) judicial
or regulatory proceedings and (z) workout, restructuring or other negotiations
or proceedings (whether or not the workout, restructuring or transaction
contemplated thereby is consummated), (ii) the enforcement of this Section 11.03
and (iii) the issuance, amendment, renewal or extension of any Letter of Credit
or demand for payment thereunder; and (c) all transfer, stamp, documentary or
other similar taxes, assessments or charges levied by any governmental or
revenue authority in respect of this Agreement or any of the other Basic
Documents or any other document referred to herein or therein and all costs,
expenses, taxes, assessments and other charges incurred in connection with any
filing, registration, recording or perfection of any security interest
contemplated by any Basic Document or any other document referred to therein.

 

The Company hereby agrees to indemnify the Agent and each Bank and their
respective directors, officers, employees, attorneys, partners and agents (each,
an “Indemnitee”) from, and hold each of them harmless against, any and all
losses, liabilities, claims, damages or expenses incurred by or asserted against
any of them arising out of or by reason of (i) the execution or delivery of this
Agreement, any other Basic Document or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto of their respective
obligations hereunder or thereunder or the consummation of the transactions
contemplated hereby or thereby, (ii) any Loan or Letter of Credit or the use or
proposed use of the proceeds therefrom (including any refusal by any Issuing
Bank to honor a demand for payment under a Letter of Credit if the documents
presented in connection with such demand do not strictly comply with the terms
of such Letter of Credit), (iii) any actual or alleged presence or release of
Materials of Environmental Concern on or from any property owned or operated by
the Company or any of its Subsidiaries, or any liability under any Environmental
Law related in any way to the Company or any of its Subsidiaries, or (iv) any
actual or prospective claim, litigation, investigation or proceeding relating to
any of the foregoing, whether based on contract, tort or any other theory,
whether brought by a third party or by the Company, and regardless of whether
any Indemnitee hereunder is a party thereto, provided that such Indemnity shall
not, as to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses (x) are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence or willful misconduct of such Indemnitee or (y) result from
a claim brought by the Company or any other Obligor against an Indemnitee for
breach in bad faith of such Indemnitee’s obligations hereunder or under any
other Basic Document, if the Company or such Obligor has obtained a final and
nonappealable judgment in its favor on such claim as determined by a court of
competent jurisdiction. This Section 11.03 shall not apply with respect to Taxes
to the extent that they are subject to Section 5.06 hereof.

 

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11.04      Amendments, Etc. (a) Neither this Agreement nor any other Basic
Document nor any provision hereof or thereof may be waived, amended or modified
except, (x) pursuant to an Increase and New Bank Agreement executed in
accordance with Section 2.05(d) which only needs to be signed by the Company,
the Agent and the Banks increasing or providing new Revolving Loan Commitments
thereunder and (y) in the case of this Agreement, pursuant to an agreement or
agreements in writing entered into by the Company, the Agent and the Required
Banks or, in the case of any other Basic Document, pursuant to an agreement or
agreements in writing entered into by the Agent and the Obligor or Obligors that
are parties thereto, in each case with the consent of the Required Banks;
provided that no such agreement shall (i) increase any Commitment of any Bank
without the written consent of such Bank, (ii) reduce the principal amount of
any Loan or Reimbursement Obligations or reduce the amount or rate of interest
thereon, or reduce the amount or rate of any fees payable hereunder, without the
written consent of each Bank affected thereby, (iii) postpone the scheduled date
or due date of the payment of the principal amount of any Loan (including any
prepayment required by Section 2.11), Reimbursement Obligations, or any interest
thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse
any such payment, or postpone the scheduled date of expiration of any
Commitment, without the written consent of each Bank affected thereby, (iv)
alter Section 4.07 or 4.08 or the manner in which payments or prepayments of
principal, interest or other Obligations shall be applied as among the Secured
Parties, without the written consent of each Bank, (v) change any of the
provisions of this Section, the definition of the term “Required Banks”, the
last sentence of Section 4.09 or any other provision hereof specifying the
number or percentage of Banks required to waive, amend or modify any rights
hereunder or make any determination or grant any consent hereunder, without the
written consent of each Bank, (vi) modify Section 4.03 without the consent of
each Bank, (vii) amend the definition of the term “Borrowing Base” or any
defined term used therein or Section 2.11 without the consent of each Bank,
(viii) release any Guarantor from any of its guarantee obligations without the
written consent of each Bank, (ix) amend, modify or waive the Intercreditor
Agreement without the written consent of each Bank (other than, for the
avoidance of doubt, any Affiliate of an Issuing Bank which has issued a Letter
of Credit pursuant to the last sentence of the definition of Issuing Bank) or
(x) except as permitted by Section 10.12, under the Intercreditor Agreement or
in connection with the exercise of its rights and remedies therein after an
Event of Default, release all or substantially all of the Collateral (or any
Collateral, the release of which would result in an excess of the then aggregate
outstanding amount of the Credit Exposure over the Borrowing Base) without the
written consent of each Bank; and provided further, that no such agreement shall
amend, modify or otherwise affect the rights or duties of the Agent or any
Fronting Bank hereunder without the prior written consent of the Agent or the
applicable Fronting Bank, as the case may be.

 

(b)          Notwithstanding anything to the contrary herein, any Bank that is a
Defaulting Bank shall not have any right to approve or disapprove of any
amendment, waiver or consent hereunder; provided, however, except as otherwise
provided in Section 4.12, (i) the Revolving Loan Commitment of such Defaulting
Bank may not be increased or extended without the consent of such Defaulting
Bank, (ii) the Revolving Loan Commitment Percentage of such Defaulting Bank may
not be increased without the consent of such Defaulting Bank, and (iii) no
payment to such Defaulting Bank shall be decreased or postponed without the
consent of such Defaulting Bank.

 

11.05      Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns (including any Affiliate of an Issuing Bank that issues any
Letter of Credit, any Affiliate of a Bank who is otherwise owed any of the
Obligations and any party entitled to indemnification hereunder), except that
(i) no Obligor may assign or otherwise transfer any of its rights or obligations
hereunder or under any other Basic Document without the prior written consent of
each Bank (and any attempted assignment or transfer by any Obligor without such
consent shall be null and void) and (ii) no Bank may assign or otherwise
transfer any of its rights or obligations hereunder except in accordance with
Section 11.06 (and any attempted assignment or transfer by any Bank that is not
in accordance with this Section shall be null and void). Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby (including any Affiliate of an Issuing Bank that issues any
Letter of Credit and any Affiliate of a Bank who is otherwise owed any of the
other Obligations), and, to the extent expressly contemplated hereby, officers,
directors, attorneys, agents, and employees of each of the Agent and the Banks)
any legal or equitable right, remedy or claim under or by reason of this
Agreement.

 

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11.06      Assignments and Participations.

 

(a)          Assignments by Banks.

 

(i)          Assignments Generally. Subject to the conditions set forth in
clause (ii) below, any Bank may assign to one or more assignees all or a portion
of its rights and obligations under this Agreement (including all or a portion
of its Commitment and the Loans at the time owing to it) with the prior written
consent (such consent not to be unreasonably withheld or delayed) of:

 

(A)         the Company, provided that no consent of the Company shall be
required for an assignment to a Bank, an Affiliate of a Bank or an Approved Fund
or, if an Event of Default exists, any other assignee; and

 

(B)         the Agent, provided that no consent of the Agent shall be required
for an assignment of any Commitment to an assignee that is a Bank with a
Commitment immediately prior to giving effect to such assignment.

 

(ii)         Certain Conditions to Assignments. Assignments by the Banks shall
be subject to the following additional conditions:

 

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

 

(B)         each partial assignment of any Commitment or Loans shall be made as
an assignment of a proportionate part of all the assigning Bank’s rights and
obligations under this Agreement in respect of such Commitment and Loans;

 

(C)         the parties to each assignment shall execute and deliver to the
Agent an Assignment and Assumption in substantially the form of Exhibit E
hereto, together with a processing and recordation fee of $3,500; and

 

(D)         the assignee, if it shall not already be a Bank, shall deliver to
the Agent an Administrative Questionnaire.

 

(iii)        Effectiveness of Assignments. Subject to acceptance and recording
thereof pursuant to paragraphs (b) and (c) below, from and after the effective
date specified in each Assignment and Assumption, the assignee thereunder shall
be a party hereto and, to the extent of the interest assigned by such Assignment
and Assumption, have the rights and obligations of a Bank under this Agreement,
and the assigning Bank thereunder shall, to the extent of the interest assigned
by such Assignment and Assumption, be released from its obligations under this
Agreement (and, in the case of an Assignment and Assumption covering all of the
assigning Bank’s rights and obligations under this Agreement, such Bank shall
cease to be a party hereto but shall continue to be entitled to the rights
referred to in Sections 5.01, 5.04, 5.06 and 11.03). Any assignment or transfer
by a Bank of rights or obligations under this Agreement that does not comply
with this Section shall be treated for purposes of this Agreement as a sale by
such Bank of a participation in such rights and obligations in accordance with
paragraph (d) below. Delivery of an executed counterpart of a signature page to
an Assignment and Assumption by telecopy or other electronic transmission shall
be effective as delivery of a manually executed counterpart of thereof.

 

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(b)          Maintenance of Register by the Agent. The Agent, acting for this
purpose as an agent of the Company, shall maintain a copy of each Assignment and
Assumption delivered to it and a register for the recordation of the names and
addresses of the Banks, and the Commitment of, and principal amount of the Loans
owing to, each Bank pursuant to the terms hereof from time to time (the
“Register”). The entries in the Register shall be conclusive, and the Company,
the Agent and the Banks may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Bank hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Company and any Bank, at any reasonable time and
from time to time, upon reasonable prior notice.

 

(c)          Effectiveness of Assignments. Upon its receipt of a duly completed
Assignment and Assumption executed by an assigning Bank and an assignee, the
assignee’s completed Administrative Questionnaire (unless the assignee shall
already be a Bank hereunder), the processing and recordation fee referred to in
paragraph (a) above and any written consent to such assignment required by said
paragraph (a), the Agent shall accept such Assignment and Assumption and record
the information contained therein in the Register. No assignment shall be
effective for purposes of this Agreement unless it has been recorded in the
Register as provided in this paragraph (c).

 

(d)          Participations. Any Bank may, without the consent of the Company or
the Agent, sell participations to one or more banks or other entities (a
“Participant”) in all or a portion of such Bank’s rights and obligations under
this Agreement (including all or a portion of its Commitment and the Loans owing
to it); provided that (i) such Bank’s obligations under this Agreement shall
remain unchanged, (ii) such Bank shall remain solely responsible to the other
parties hereto for the performance of such obligations and (iii) the Obligors,
the Agent and the Banks shall continue to deal solely and directly with such
Bank in connection with such Bank’s rights and obligations under this Agreement.
Any agreement or instrument pursuant to which a Bank sells such a participation
shall provide that such Bank shall retain the sole right to enforce this
Agreement and to approve any amendment, waiver or other modification of any
provision of this Agreement; provided that such agreement may provide that such
Bank will not, without the consent of the Participant, agree to any amendment,
waiver or other modification described in the first proviso to Section 11.04
that affects such Participant. Subject to paragraph (e) below, the Company
agrees that each Participant shall be entitled to the benefits of Sections 5.01,
5.04 and 5.06, to the same extent as if it were a Bank and had acquired its
interest by assignment pursuant to paragraph (a) above. To the extent permitted
by Law, each Participant also shall be entitled to the benefits of Section
4.07(a) as though it were a Bank, provided such Participant agrees to be subject
to Section 4.07(b) as though it were a Bank hereunder.

 

(e)          Limitations on Rights of Participants. A Participant shall not be
entitled to receive any greater payment under Section 5.01 or 5.06 than the
applicable Bank would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Company’s prior written consent. A Participant
that would be a Foreign Bank if it were a Bank shall not be entitled to the
benefits of Section 5.06 unless the Company is notified of the participation
sold to such Participant and such Participant agrees, for the benefit of the
Company, to comply with Section 5.06 as though it were a Bank.

 

(f)           Certain Pledges. Any Bank may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement to
secure obligations of such Bank, including any such pledge or assignment to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment of
a security interest shall release a Bank from any of its obligations hereunder
or substitute any such assignee for such Bank as a party hereto.

 

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(g)          No Assignments to the Company or Affiliates. Anything in this
Section to the contrary notwithstanding, no Bank may assign or participate any
interest in any Loan or Reimbursement Obligations held by it hereunder to the
Company or any of its Affiliates or Subsidiaries without the prior consent of
each Bank.

 

11.07      Survival. The obligations of the Company under Sections 5.01, 5.04,
5.06 and 11.03 and the obligations of the Banks under Section 10.05 hereof shall
survive the repayment of the Loans and the Reimbursement Obligations and the
termination of the Commitments. In addition, each representation and warranty
made, or deemed to be made by a notice of any extension of credit (whether by
means of a Loan or a Letter of Credit), herein or pursuant hereto shall survive
the making of such representation and warranty, and no Bank shall be deemed to
have waived, by reason of making any extension of credit hereunder (whether by
means of a Loan or a Letter of Credit), any Default that may arise by reason of
such representation or warranty proving to have been false or misleading,
notwithstanding that such Bank or the Agent may have had notice or knowledge or
reason to believe that such representation or warranty was false or misleading
at the time such extension of credit was made.

 

11.08      Captions. The table of contents and captions and section headings
appearing herein are included solely for convenience of reference and are not
intended to affect the interpretation of any provision of this Agreement.

 

11.09      Counterparts. This Agreement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Agreement, the other Basic Documents and any separate
letter agreements with respect to fees payable to the Agent and the Bank
constitute the entire contract between and among the parties relating to the
subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in Section 6.01, this Agreement shall become effective when it shall
have been executed by the Agent and when the Agent shall have received
counterparts hereof which, when taken together, bear the signatures of each of
the other parties hereto, and thereafter shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
Delivery of an executed counterpart of a signature page to this Agreement by
telecopy or other electronic transmission shall be effective as delivery of a
manually executed counterpart of this Agreement.

 

11.10      Governing Law; Submission to Jurisdiction. Each of this Agreement and
each other Basic Document will be governed by, and construed in accordance with,
the internal Laws of the state of New York (including for such purpose sections
5-1401 and 5-1402 of the General Obligations Law of the State of New York). The
Company hereby submits to the nonexclusive jurisdiction of the United States
District Court for the Southern District of New York and of any New York state
court sitting in New York City for the purposes of all legal proceedings arising
out of or relating to this Agreement, any other Basic Document or the
transactions contemplated hereby or thereby. The Company irrevocably waives, to
the fullest extent permitted by applicable Law, any objection that it may now or
hereafter have to the laying of the venue of any such proceeding brought in such
a court and any claim that any such proceeding brought in such a court has been
brought in an inconvenient forum. The Company hereby further irrevocably
consents to the service of process in any such legal proceedings in said courts
by the mailing thereof by the Agent or any Bank by registered or certified mail,
postage prepaid, at its address set forth beneath its signature hereto.

 

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11.11      Waiver of Jury Trial. EACH OF THE COMPANY, THE AGENT AND THE BANKS
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OTHER BASIC DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.

 

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

 

11.13      Independence of Covenants. All covenants and other agreements
contained in this Agreement or any other Basic Document shall be given
independent effect so that, if a particular action or condition is not permitted
by any of such covenants or other agreements, the fact that such action or
condition would be permitted by an exception to, or otherwise be within the
limitations of, another covenant or other agreement shall not avoid the
occurrence of a Default or an Event of Default if such action is taken or such
condition exists.

 

11.14      PATRIOT ACT PROVISION. Each of the Agent and each Bank hereby
notifies each Obligor that pursuant to the requirements of the USA Patriot Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it
is required to obtain, verify and record information that identifies each
Obligor and other information that will allow the Agent and such Bank to
identify each Obligor in accordance with the Act.

 

11.15      No Fiduciary Relationship. The relationship between the Company and
the other Obligors on the one hand and the Agent and each Bank on the other is
solely that of debtor and creditor, and neither the Agent nor any Bank has any
fiduciary or other special relationship with the Company or any other Obligors,
and no term or condition of any of the Basic Documents shall be construed so as
to deem the relationship between the Company and the other Obligors on the one
hand and the Agent and each Bank on the other to be other than that of debtor
and creditor.

 

11.16      Construction. The Company, each other Obligor (by its execution of
the Basic Documents to which it is a party), the Agent, each Bank acknowledges
that each of them has had the benefit of legal counsel of its own choice and has
been afforded an opportunity to review the Basic Documents with its legal
counsel and that the Basic Documents shall be construed as if jointly drafted by
the parties thereto.

 

11.17      Interest Rate Limitation.

 

(a)          Limitation to Maximum Rate; Recapture. No interest rate specified
in any Basic Document shall at any time exceed the Maximum Rate. If at any time
the interest rate (the “Contract Rate”) for any obligation under the Basic
Documents shall exceed the Maximum Rate, thereby causing the interest accruing
on such obligation to be limited to the Maximum Rate, then any subsequent
reduction in the Contract Rate for such obligation shall not reduce the rate of
interest on such obligation below the Maximum Rate until the aggregate amount of
interest accrued on such obligation equals the aggregate amount of interest
which would have accrued on such obligation if the Contract Rate for such
obligation had at all times been in effect. As used herein, the term “Maximum
Rate” means, at any time with respect to any Bank, the maximum rate of
nonusurious interest under applicable Law that such Bank may charge the Company.
The Maximum Rate shall be calculated in a manner that takes into account any and
all fees, payments, and other charges contracted for, charged, or received in
connection with the Basic Documents that constitute interest under applicable
Law. Each change in any interest rate provided for herein based upon the Maximum
Rate resulting from a change in the Maximum Rate shall take effect without
notice to the Company at the time of such change in the Maximum Rate.

 

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(b)          Cure Provisions. No provision of any Basic Document shall require
the payment or the collection of interest in excess of the maximum amount
permitted by applicable Law. If any excess of interest in such respect is hereby
provided for, or shall be adjudicated to be so provided, in any Basic Document
or otherwise in connection with the transactions contemplated under the Basic
Documents, the provisions of this Section shall govern and prevail and neither
the Company nor the sureties, guarantors, successors, or assigns of the Company
shall be obligated to pay the excess amount of such interest or any other excess
sum paid for the use, forbearance, or detention of sums loaned pursuant hereto.
In the event any Bank ever receives, collects, or applies as interest any such
sum, such amount which would be in excess of the maximum amount permitted by
applicable Law shall be applied as a payment and reduction of the principal of
the obligations outstanding hereunder, and, if the principal of the obligations
outstanding hereunder has been paid in full, any remaining excess shall
forthwith be paid to the Company. In determining whether or not the interest
paid or payable exceeds the Maximum Rate, the Company and each Bank shall, to
the extent permitted by applicable Law, (i) characterize any non-principal
payment as an expense, fee, or premium rather than as interest, (ii) exclude
voluntary prepayments and the effects thereof, and (iii) amortize, prorate,
allocate, and spread in equal or unequal parts the total amount of interest
throughout the entire contemplated term of the obligations outstanding hereunder
so that interest for the entire term does not exceed the Maximum Rate.

 

11.18      Waiver of Consequential Damages, etc. To the extent permitted by
applicable Law, no Obligor shall assert, and each Obligor hereby waives, any
claim against Agent, any Bank and any of their respective directors, officers,
partners, employees, attorneys and agents, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, this
Agreement or any other Basic Documents, the transactions contemplated hereby or
thereby, any Loan or Letter of Credit or the use of the proceeds thereof.

 

11.19      Existing Obligations. The Company hereby acknowledges, confirms and
agrees that it is indebted to the Banks for all the “Obligations” (as defined in
the Existing Credit Agreement) under the Existing Credit Agreement, as of the
close of business on June 19, 2014, in the aggregate principal amount of
$69,500,000 in respect of “Loans” (as defined in the Existing Credit Agreement)
and in the aggregate face amount of $72,158,426.10 in respect of “Letters of
Credit” (as defined in the Existing Credit Agreement), together with all accrued
and unpaid interest thereon (to the extent applicable), and all fees, costs,
expenses and other charges relating thereto, all of which are unconditionally
owing by the Company to the “Banks” (as defined in the Existing Credit
Agreement), without offset, defense or counterclaim of any kind, nature or
description whatsoever.

 

11.20      Acknowledgement of Security Interest and Basic Documents;
Reaffirmation of Account Control Agreements.

 

(a)          The Company hereby acknowledges, confirms and agrees that the Agent
has had and shall on and after the date hereof continue to have, for itself and
the ratable benefit of the Banks (and their Affiliates in respect of Hedging
Obligations), a security interest in and Lien upon the Collateral heretofore
granted to the Agent (or its predecessors in whatever capacity) pursuant to the
Basic Documents to secure the Obligations.

 

(b)          The Liens and security interest of the Agent in the Collateral
shall be deemed to be continuously granted and perfected from the earliest date
of the granting and perfection of such Liens and security interests to the Agent
(and its predecessors, whether under the Existing Credit Agreement, this
Agreement or any of the other Basic Documents (as defined in the Existing Credit
Agreement or this Agreement)).

 

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(c)          The Company hereby reaffirms its obligations, covenants and
agreements under each Account Control Agreement executed by it prior to the date
hereof and acknowledges and agrees that all such obligations, covenants and
agreements are continuing and shall continue in full force and effect on and
after the date hereof in accordance with the terms thereof.

 

11.21      Basic Documents. The Company hereby acknowledges, confirms and agrees
that as of the date hereof: (i) the Existing Credit Agreement and each of the
other “Basic Documents” (as defined in the Existing Credit Agreement) were duly
executed and delivered by the Company or its Subsidiaries, as applicable, and
are in full force and effect, (ii) the agreements and obligations of the Company
and its Subsidiaries contained in the Existing Credit Agreement and the other
“Basic Documents” (as defined in the Existing Credit Agreement) constitute the
legal, valid and binding obligations of Company or its Subsidiaries, as
applicable, enforceable against them in accordance with their respective terms,
and (iii) subject to Section 11.22, the Banks (and their Affiliates in respect
of Hedging Obligations) and the Agent are entitled to all of the rights and
remedies provided for in the Existing Credit Agreement and the “Basic Documents”
(as defined in the Existing Credit Agreement).       

 

11.22      Acknowledgments, Amendment and Restatement. Effective on the Closing
Date, this Agreement shall constitute an amendment and restatement in its
entirety of the Existing Credit Agreement. Each of the undersigned Banks hereby
consents pursuant to Section 11.04 of the Existing Credit Agreement to all of
the amendments herein and in the other Basic Documents executed in connection
herewith to the Existing Credit Agreement and the other Basic Documents (as
defined in the Existing Credit Agreement) as in effect immediately prior to the
Closing Date (collectively, the “Existing Loan Documents”). The parties hereto
acknowledge and agree that (a) this Agreement and the other Basic Documents
executed and delivered in connection herewith do not constitute a novation,
payment, satisfaction, reborrowing, or termination of the Company’s Obligations
or any Credit Exposure (under and as defined in the Existing Credit Agreement
and the Existing Loan Documents) previously made available to the Company under
the Existing Credit Agreement and outstanding on the Closing Date; (b) such
Obligations and Credit Exposure (under and as defined in the Existing Credit
Agreement) are in all respects continuing as Obligations and Credit Exposure
under this Agreement with only the terms thereof being modified as provided in
this Agreement and the other Basic Documents; (c) the Liens and security
interests as granted under the Security Documents (as defined in the Existing
Credit Agreement) securing payment of such Obligations (as defined in the
Existing Credit Agreement) are in all respects continuing and in full force and
effect and secure the payment of the Obligations with only the terms of certain
of such Security Documents (as defined in the Existing Credit Agreement) being
modified as provided in the Security Documents and (d) all references in the
Basic Documents to the Existing Credit Agreement shall be deemed references to
the Existing Credit Agreement as amended and restated hereby, and as further
amended, supplemented or otherwise modified from time to time.

 

11.23      Reallocation of Outstanding Credit Exposure. Each of the Banks hereby
agrees as follows:

 

(i)          Each Bank (other than New Closing Banks) shall pay to the Agent on
the Closing Date, in immediately available funds, an amount equal to the amount,
if any, by which the sum of such Bank’s Fronting Exposure (other than Letter of
Credit Liabilities under clause (a) of the definition of such term herein) plus
its Revolving Loan Commitment Percentage of the aggregate principal amount of
all Revolving Loans, in each case outstanding immediately upon the effectiveness
of the Closing Date (before giving effect to any new extensions of credit under
this Agreement) exceeds the “Credit Exposure” (under and as defined in the
Existing Credit Agreement) (other than Letter of Credit Liabilities under clause
(a) of the definition of such term herein) of such Bank immediately prior to the
Closing Date (after giving effect to any reduction of the “Commitments” (under
and as defined in the Existing Credit Agreement) required under Section 6.01(b)
hereof). Such amount paid by any such Bank shall be deemed the purchase price
for the acquisition by such Bank of such additional amount of Credit Exposure
and corresponding Commitments from the other Banks, as applicable. The Agent
shall distribute such amounts as received from such Banks as may be necessary so
that the Credit Exposure is held by the Banks in accordance with their
respective Revolving Loan Commitment Percentages.

 

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(ii)         Each New Closing Bank shall pay to the Agent on the Closing Date,
in immediately available funds, an amount equal to the amount of such New
Closing Bank’s Fronting Exposure (other than Letter of Credit Liabilities under
clause (a) of the definition of such term herein) plus its Revolving Loan
Commitment Percentage of the aggregate principal amount of all Revolving Loans
to be outstanding immediately upon the Closing Date (before giving effect to any
new extensions of credit under this Agreement. Such amount paid by any such New
Closing Bank shall be deemed the purchase price for the acquisition by such New
Closing Bank of such amount of Credit Exposure and corresponding Commitments
from the other Banks, as applicable. The Agent shall distribute such amounts as
received from the New Closing Banks as may be necessary so that the Credit
Exposure is held by the Banks in accordance with their respective Revolving Loan
Commitment Percentages.

 

(iii)        Each Bank which receives a payment in connection with clause (i) or
(ii) above (each, a “Selling Bank”) shall be deemed to have sold and assigned,
without recourse to such Selling Bank, to the other applicable Banks (each, a
“Purchasing Bank”), and such Purchasing Banks shall be deemed to have purchased
and assumed without recourse to the Selling Banks, Credit Exposure in amounts
such that after giving effect thereto each Bank shall hold Credit Exposure in
accordance with their respective Revolving Loan Commitment Percentages.

 

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

 

  EMPIRE RESOURCES, INC.       By: /s/ Sandra Kahn     Sandra R. Kahn, Vice
President         Address for Notices:       Empire Resources, Inc.   One Parker
Plaza   Fort Lee, New Jersey  07024   Attention:  Ms. Sandra R. Kahn   Facsimile
No.:  (201) 944-2226   Telephone No.:  (201) 944-2200

 

 

 

 

  COÖPERATIEVE CENTRALE  RAIFFEISEN-BOERENLEENBANK B.A., “RABOBANK NEDERLAND”,
NEW YORK BRANCH, as Agent, Swing Line Bank, Issuing Bank and as a Bank        
By: /s/ Chan K. Park     Name: Chan K. Park     Title:   Managing Director      
  By: /s/ Xander Willemsen     Name: Xander Willemsen     Title:   Executive
Director         Address for Notices:       c/o Rabobank International   245
Park Avenue   New York, New York 10167   Attention: Frank Imperato   Telecopy
No. (212) 916-3731   Telephone No. (212) 808-6815       With copies to:      
Rabobank International   245 Park Avenue   New York, New York 10167   Attention:
Xander Willemsen   Telecopy No.: (914) 304-9321   Telephone No.: (212) 574-7377
      and       Rabobank International   245 Park Avenue   New York, New York
10167   Attention: Naoko Kojima   Telecopy No.: (212) 808-2578   Telephone No.:
(212) 808-6812

 

 

 

 

  BNP PARIBAS, as Syndication Agent and a Bank         By: /s/ Karlien Zumpolle
    Name: Karlien Zumpolle     Title:   Vice President         By: /s/ Bradley
Dingwall     Name: Bradley Dingwall     Title:   Director         Address for
Notices:       787 Seventh Avenue, 9th Floor   New York, New York 10019  
Attention:     Facsimile No.:   Telephone No.:   Email:

 

 

 

 

  SOCIÉTÉ GÉNÉRALE S.A., as a Bank         By: /s/ Barbara Paulsen    
Name: Barbara Paulsen     Title:   Managing Director         By:       Name:    
Title:         Address for Notices:       245 Park Avenue   New York, NY 10167  
Attention:     Facsimile No.:   Telephone No.:   Email:

 

 

 

 

  BROWN BROTHERS HARRIMAN & CO., as a Bank         By: /s/ Paul Feldman    
Name: Paul Feldman     Title:   Managing Director         By:       Name:    
Title:         Address for Notices:       140 Broadway   New York, New York
10005   Attention:     Facsimile No.:   Telephone No.:   Email:

 

 

 

 

  RB INTERNATIONAL FINANCE (USA) LLC, as a Bank         By: /s/ Astrid Wilke    
Name: Astrid Wilke     Title:   Group Vice President         By: /s/ Katrin
Lange-Hornby     Name: Katrin Lange-Hornby     Title:   Vice President        
Address for Notices:       1133 Avenue of the Americas, 16th Floor   New York,
New York 10036   Attention:     Facsimile No.:   Telephone No.:   Email:

 

 

 

 

  ABN AMRO CAPITAL USA LLC, as a Bank         By: /s/ Jaime Matos    
Name: Jaime Matos     Title:   Vice President         By: /s/ Urvashi Zutshi    
Name: Urvashi Zutshi     Title:   Managing Director         Address for Notices:
      100 Park Avenue   New York, New York 10017   Attention:     Facsimile No.:
  Telephone No.:   Email:

 

 

 

 

Index to Exhibits and Schedules

 

EXHIBIT A – Form of Note EXHIBIT B – Form of Borrowing Base Certificate EXHIBIT
C – Form of Security Agreement EXHIBIT D – Form of Subsidiary Guarantee EXHIBIT
E – Form of Assignment and Assumption EXHIBIT F – Form of Increase and New Bank
Agreement EXHIBIT G – Form of Compliance Certificate EXHIBIT H – Intentionally
omitted EXHIBIT I – Form of Borrowing Request EXHIBIT J – Form of Notice of
Prepayment, Conversion and Continuation EXHIBIT K – Subordination Terms EXHIBIT
L – Intentionally omitted EXHIBIT M — Form of Intercreditor Agreement      
SCHEDULE A – Commitments SCHEDULE I – Indebtedness SCHEDULE II – Investments
SCHEDULE III – Subsidiaries SCHEDULE IV — Limitations on Dividend Clause and
Negative Pledge Clauses SCHEDULE V - Credit Insurance

 

 

 

 

EXHIBIT A

FORM OF

PROMISSORY NOTE

 

$[Principal Amount] [Date]   New York, New York

 

FOR VALUE RECEIVED, EMPIRE RESOURCES, INC., a Delaware corporation (the
“Company”), hereby promises to pay to [Insert name of Bank] (the “Bank”), for
account of its respective Applicable Lending Offices provided for by the Credit
Agreement referred to below, the principal sum of $[Principal Amount] (or such
lesser amount as shall equal the aggregate unpaid principal amount of the Loans
made by the Bank to the Company under the Credit Agreement), in lawful money of
the United States of America and in immediately available funds, on the dates
and in the principal amounts provided in the Credit Agreement, and to pay
interest on the unpaid principal amount of each such Loan, at such office, in
like money and funds, for the period commencing on the date of such Loan until
such Loan shall be paid in full, at the rates per annum and on the dates
provided in the Credit Agreement.

 

The date, amount, Type, interest rate and duration of Interest Period (if
applicable) of each Loan made by the Bank to the Company, and each payment made
on account of the principal thereof, shall be recorded by the Bank on its books,
provided that the failure of the Bank to make any such recordation shall not
affect the obligations of the Company to make a payment when due of any amount
owing under the Credit Agreement or hereunder in respect of the Loans made by
the Bank.

 

This Note (i) is one of the Notes referred to in the Amended and Restated Credit
Agreement dated as of June 19, 2014 (as amended, restated, supplemented or
otherwise modified and in effect from time to time, the “Credit Agreement”)
among the Company, the banks from time to time party thereto and Coöperatieve
Centrale Raiffeisen-Boerenleenbank B.A., “Rabobank Nederland”, New York Branch,
as Agent, (ii) is entitled to the benefits of the Credit Agreement and (iii)
evidences Loans made by the Bank under the Credit Agreement. Terms used but not
defined in this Note have the respective meanings assigned to them in the Credit
Agreement.

 

The Credit Agreement provides for the acceleration of the maturity of this Note
upon the occurrence of certain events and for prepayments of Loans upon the
terms and conditions specified therein.

 

Except as permitted by Section 11.06 of the Credit Agreement, this Note may not
be assigned by the Bank to any other Person.

 

 

 

  

This Note shall be governed by, and construed in accordance with, the law of the
State of New York.

 

  EMPIRE RESOURCES, INC.         By       Name:     Title:

 

 

 

  

FORM OF

SWING LINE NOTE

 

$[Principal Amount] [Date]   New York, New York

 

FOR VALUE RECEIVED, EMPIRE RESOURCES, INC., a Delaware corporation (the
“Company”), hereby promises to pay to [Insert name of Bank] (the “Swing Line
Bank”), for account of its respective Applicable Lending Offices provided for by
the Credit Agreement referred to below, the principal sum of $[Principal Amount]
(or such lesser amount as shall equal the aggregate unpaid principal amount of
the Swing Line Loans made by the Swing Line Bank to the Company under the Credit
Agreement), in lawful money of the United States of America and in immediately
available funds, on the dates and in the principal amounts provided in the
Credit Agreement, and to pay interest on the unpaid principal amount of each
such Swing Line Loan, at such office, in like money and funds, for the period
commencing on the date of such Swing Line Loan until such Swing Line Loan shall
be paid in full, at the rates per annum and on the dates provided in the Credit
Agreement.

 

The date and amount of each Swing Line Loan made by the Swing Line Bank to the
Company, and each payment made on account of the principal thereof, shall be
recorded by the Swing Line Bank on its books, provided that the failure of the
Swing Line Bank to make any such recordation shall not affect the obligations of
the Company to make a payment when due of any amount owing under the Credit
Agreement or hereunder in respect of the Swing Line Loans made by the Swing Line
Bank.

 

This Swing Line Note (i) is one of the Notes referred to in the Amended and
Restated Credit Agreement dated as of June 19, 2014 (as amended, restated,
supplemented or otherwise modified and in effect from time to time, the “Credit
Agreement”) among the Company, the banks from time to time party thereto and
Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A., “Rabobank Nederland”, New
York Branch, as Agent, (ii) is entitled to the benefits of the Credit Agreement
and (iii) evidences Swing Line Loans made by the Swing Line Bank under the
Credit Agreement. Terms used but not defined in this Swing Line Note have the
respective meanings assigned to them in the Credit Agreement.

 

The Credit Agreement provides for the acceleration of the maturity of this Swing
Line Note upon the occurrence of certain events and for prepayments of Swing
Line Loans upon the terms and conditions specified therein.

 

Except as permitted by Section 11.06 of the Credit Agreement, this Swing Line
Note may not be assigned by the Swing Line Bank to any other Person.

 

 

 

  

This Swing Line Note shall be governed by, and construed in accordance with, the
law of the State of New York.

 

  EMPIRE RESOURCES, INC.         By       Name:  Sandra R. Kahn     Title:  Vice
President

 

 

 

 

EXHIBIT B

 Form of Borrowing Base Certificate

 

Coöperatieve Centrale

Raiffeisen-Boerenleenbank B.A.,

“Rabobank Nederland”,

New York Branch, as agent

 

c/o Rabobank International

245 Park Avenue

New York, NY 10167

Phone No. 212-808-6815 Fax No. 212-916-3731 Attention: Frank Imperato / Naoko
Kojima / Xander Willemsen

 

And each Bank

 

Ladies and Gentlemen:

 

This Borrowing Base Certificate as of _____________, 20__ (the “Computation
Date”) is executed and delivered by Empire Resources, Inc. (the “Company”) to
Coöperatieve Centrale Raiffeisen–Boerenleenbank B.A., “Rabobank Nederland”, New
York Branch, as agent (in such capacity, together with its successors in such
capacity, the “Agent”), pursuant to that certain Amended and Restated Credit
Agreement dated as of June 19, 2014 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”) among the Company,
the banks from time to time party thereto and the Agent. All terms used herein
shall have the meanings assigned to them in the Credit Agreement.

 

The Company represents and warrants to the Agent and the Banks that all
information contained herein is true, correct, and complete, and that the
property included in the calculations below represents the property that
qualifies for purposes of determining the Borrowing Base under the Credit
Agreement. The Company also represents and warrants that all figures listed
below or attached hereto have been calculated based on the provisions of the
Credit Agreement.

 

The Company represents and warrants to the Agent and the Banks that the
representations and warranties of the Obligors contained in the Basic Documents
are true and correct in all material respects on and as of the date of this
Borrowing Base Certificate as if made on and as of the date hereof except to the
extent that such representations and warranties relate specifically to another
date, and that no Default exists.

 

BORROWING BASE SUMMARY:       A. Borrowing Base (as detailed from schedule 1)  
  $__________ B. Revolving Loan Commitments     $__________ C. Lesser of Line A
or Line B     $__________ D. Credit Exposure:         (i) Loans $__________    
  (ii) Letters of Credit $__________       (iii) Total     $__________ E.

Availability

(Line C, minus Line D(iii))

    $__________

 

 

Borrowing Base Certificate, Page 1

 

 

In the event of any conflict between this Borrowing Base Certificate and the
Credit Agreement, the Credit Agreement shall control.

 

Date:  __________, 20__.         Borrower:       EMPIRE RESOURCES, INC.        
By:       Sandra Kahn, Vice President and Chief Financial Officer

 

Borrowing Base Certificate, Page 2

 

  

SCHEDULE 1

TO

BORROWING BASE CERTIFICATE

 

EMPIRE RESOURCES, INC.

 

    Amount   Advance
Rate   Amount Times
Advance Rate   1. Assets                               (a) Eligible Net
Liquidating Value of Brokerage Accounts1 $__________   85%   $__________        
              (b) Tier I Eligible Receivables $__________   90%   $__________  
                    (c) Tier II Eligible Receivables2 $__________   80%  
$__________                       (d) Australian Receivables3 $__________   70%
  $__________                       (e) Eligible Inventory Ordered Under L/C
$__________   80%   $__________                       (f) Eligible Inventory4
$__________   80%   $__________                       (g) Eligible Unsold
Inventory5 $__________   65%   $__________                       (h) Pledged
Cash $__________   100%   $__________                   2. Total Assets (sum of
lines (a), (b), (c), (d), (e), (f), (g) and (h))         $__________            
      3. Deductions for Reserves $__________   100%   ($__________)            
      4. Deductions for Indebtedness secured by Permitted Borrowing Base Liens
$__________   100%   ($__________)                   5. Borrowing Base  (line 2
minus line 3 minus line 4)         $  

 

 

1 To be included in Borrowing Base calculation only if and to the extent
requested by the Company.

 

2 The aggregate amount of Tier II Eligible Receivables (a) that are not Credit
Insured Receivables, owing from any one account debtor (and its Affiliates) at
any time shall not exceed $1,500,000 (per account debtor (and its Affiliates)),
and (b) included in the Borrowing Base at any time shall not exceed $6,500,000
(after giving effect to the applicable advance rate), in each case (under
clauses (a) and (b)), unless otherwise approved in writing by the Required
Banks.

 

3 In no event shall the aggregate amount of the Australian Receivables included
in the Borrowing Base at any time exceed an amount equal to 10% of the Borrowing
Base (after giving effect to the applicable advance rate).

 

4 In no event shall the aggregate amount of the Eligible Inventory included in
the Borrowing Base at any time exceed an amount equal to 65% of the Borrowing
Base (after giving effect to the applicable advance rate).

 

5 In no event shall the aggregate amount of Eligible Unsold Inventory included
in the Borrowing Base at any time exceed $6,500,000 (after giving effect to the
applicable advance rate) and in no event shall the aggregate amount of Eligible
Unsold Inventory included in the Borrowing Base at any time which is stainless
steel exceed $5,000,000 (after giving effect to the applicable advance rate).

 

Borrowing Base Certificate, Page 3

 

 

EXHIBIT E

 

 

ASSIGNMENT AND ASSUMPTION

 

This Assignment and Assumption (the “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into by and between [Insert
name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the
“Assignee”). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (as amended,
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee.
The Standard Terms and Conditions set forth in Annex 1 attached hereto are
hereby agreed to and incorporated herein by reference and made a part of this
Assignment and Assumption as if set forth herein in full.

 

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with Standard Terms and Conditions
and the Credit Agreement, as of the Effective Date inserted by the Agent as
contemplated below (i) all of the Assignor's rights and obligations in its
capacity as a Bank under the Credit Agreement and any other documents or
instruments delivered pursuant thereto to the extent related to the amount and
percentage interest identified below of all of such outstanding rights and
obligations of the Assignor under the respective facilities identified below
(including any letters of credit, guarantees, acceptances and swingline loans
included in such facilities) and (ii) to the extent permitted to be assigned
under applicable law, all claims, suits, causes of action and any other right of
the Assignor (in its capacity as a Bank) against any Person, whether known or
unknown, arising under or in connection with the Credit Agreement, any other
documents or instruments delivered pursuant thereto or the loan transactions
governed thereby or in any way based on or related to any of the foregoing,
including, but not limited to, contract claims, tort claims, malpractice claims,
statutory claims and all other claims at law or in equity related to the right
and obligations sold and assigned pursuant to clause (i) above (the rights and
obligations sold and assigned pursuant to clauses (i) and (ii) above being
referred to herein collectively as, the “Assigned Interest”). Such sale and
assignment is without recourse to the Assignor and, except as expressly provided
in this Assignment and Assumption, without representation or warranty by the
Assignor.

 

1. Assignor:             2. Assignee:           [and is an Affiliate/Approved
Fund of [identify Bank]1]         3. Borrower:   Empire Resources, Inc.        
        4. Agent:   Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A.,
“Rabobank Nederland”, New York Branch, as the agent under the Credit Agreement  
      5. Credit Agreement:   Amended and Restated Credit Agreement dated as of
June __, 2014 among Empire Resources, Inc., the banks from time to time party
thereto and Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A., “Rabobank
Nederland”, New York Branch, as Agent.

 

 

1 Select as applicable.

 

ASSIGNMENT AND ASSUMPTION, Page 1

 

  

6. Assigned Interest:    

 

Aggregate Amount of
Commitment/Loans for all
Banks   Amount of Commitment/Loans Assigned   Percentage Assigned of
Commitment/Loans  $   $    %

 

[7. Trade Date:   ______________]4

 

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

 

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

 

  ASSIGNOR       [NAME OF ASSIGNOR]         By:       Name:     Title:      
ASSIGNEE       [NAME OF ASSIGNEE]         By:       Name:     Title:

 

 

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

 

ASSIGNMENT AND ASSUMPTION, Page 2

 

 

[Consented to and]5  Accepted:       Coöperatieve Centrale  
Raiffeisen-Boerenleenbank B.A.,   “Rabobank Nederland”, New   York Branch, as
Agent         By:       Name:     Title:         By:       Name:     Title:    
  [Consented to:]6       EMPIRE RESOURCES, INC.         By:       Name:    
Title:  

 

 

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

6 To be added only if the consent of the Company and/or other parties (e.g.
Swing Line Bank, Issuing Bank) is required by the terms of the Credit Agreement.

 

 

ASSIGNMENT AND ASSUMPTION, Page 3

 

 

ANNEX I

Empire Resources, Inc.

credit agreement

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

 

1. Representations and Warranties

 

1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal
and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is
free and clear of any lien, encumbrance or other adverse claim and (iii) it has
full power and authority, and has taken all action necessary, to execute and
deliver the Assignment and Assumption and to consummate the transactions
contemplated hereby; and (b) assumes responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Basic Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency or value of any Basic
Documents or any collateral thereunder, (iii) the financial condition of the
Company, any of the Subsidiaries or Affiliates or any other Person obligated in
respect of any Basic Document or (iv) the performance or observance by the
Company, any of the Subsidiaries or Affiliates or any other Person of any of
their respective obligations under any Basic Document.

 

1.2 Assignee. The Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Assignment and Assumption and to consummate the transactions contemplated
hereby and to become a Bank under the Credit Agreement, (ii) from and after the
Effective Date, it shall be bound by the provisions of the Credit Agreement as a
Bank thereunder and, to the extent of the Assigned Interest, shall have the
obligations of a Bank thereunder, (iii) it has received a copy of the Credit
Agreement, together with copies of the most recent financial statements
delivered pursuant to the Credit Agreement and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Assumption and to purchase the
Assigned Interest on the basis of which it has made such analysis and decision
independently and without reliance on the Agent or any other Bank, and (iv) if
it is a Foreign Bank, attached to the Assignment and Assumption is any
documentation required to be delivered by it pursuant to the terms of the Credit
Agreement, duly completed and executed by the Assignee; (b) agrees that (i) it
will, independently and without reliance on the Agent, the Assignor or any other
Bank, 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 Basic Documents, and (ii) it will perform in accordance with their
terms all of the obligations which by the terms of the Basic Documents are
required to be performed by it as a Bank; and (c) agrees that it will be bound
by the terms and provisions of the Intercreditor Agreement.

 

2. Payments. From and after the Effective Date, the Agent shall make all
payments in respect of the Assigned Interest (including payments of principal,
interest, fees and other amounts) to the Assignee whether such amounts which
have accrued prior to or after the Effective Date. The Assignor and the Assignee
shall make all appropriate adjustments in payments by the Agent for periods
prior to the Effective Date or with respect to the making of this assignment
directly between themselves.

 

3. General Provisions. This Assignment and Assumption shall be binding upon, and
inure to the benefit of the parties hereto and their respective successors and
assigns. This Assignment and Assumption may be executed in any number of
counterparts, which together shall constitute one instrument. Delivery of an
executed counterpart of a signature page of this Assignment and Assumption by
telecopy shall be effective as delivery of a manually executed counterpart of a
signature page of this Assignment and Assumption. This Assignment and Assumption
shall be governed by and construed in accordance with, the law of the State of
New York, other than those conflict of law provisions that would defer to the
substantive laws of another jurisdiction. This governing law election has been
made by the parties in reliance (at least in part) on Section 5-1401 of the
General Obligations Law of the State of New York, as amended (as and to the
extent applicable), and other applicable law.

 

ASSIGNMENT AND ASSUMPTION, Page 4

 

 

EXHIBIT F

 

FORM OF
INCREASE AND NEW BANK AGREEMENT

 

INCREASE AND NEW BANK AGREEMENT, dated as of _____ ___, 20__ (this “Agreement”),
prepared pursuant to Section 2.05(d) of the Amended and Restated Credit
Agreement dated as of June 19, 2014 (as amended, restated, supplemented or
otherwise modified through the date hereof, the “Existing Credit Agreement”; as
modified hereby and as further amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”), among EMPIRE RESOURCES,
INC. (the “Company”), EMPIRE RESOURCES PACIFIC, LTD. and certain other
Subsidiaries of the Borrower from time to time party to the Subsidiary Guarantee
(each a “Guarantor”; and collectively, the “Guarantors”), the several Banks from
time to time party thereto, and COÖPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK
B.A., “RABOBANK NEDERLAND”, NEW YORK BRANCH, as agent (in such capacity,
together with its successors in such capacity, the “Agent”) and as a Fronting
Bank.

 

RECITALS

 

Pursuant to Section 2.05(d) of the Existing Credit Agreement, the undersigned
Banks party to the Existing Credit Agreement (the “Increasing Banks”) and the
undersigned Persons not party to the Existing Credit Agreement (the “New
Banks”), have agreed to increase their (or make their) Commitments (as
applicable) as governed by the Credit Agreement on the terms and subject to the
conditions set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the premises contained herein and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company, the Agent, the Issuing Banks, the Increasing Banks
and the New Banks hereby agree as follows:

 

1.           Defined Terms. Unless otherwise defined herein, terms defined in
the Existing Credit Agreement are used herein as therein defined.

 

2.           Increase Agreement and New Bank Agreement.

 

(a)   Each Increasing Bank party to this Agreement hereby agrees to increase its
respective Commitment (as modified pursuant to Section 3 of this Agreement), in
the amount set forth in Schedule 1.0,1 such increase to be effective as of
__________ ___, 20__ (the “Increase Effective Date”).

 

(b)   Each New Bank party to this Agreement hereby agrees to make Revolving
Loans to the Company and participate in Letters of Credit and Swing Line Loans
for the account of, the Company, from time to time until the Revolving Credit
Commitment Termination Date in an aggregate principal amount at any one time
outstanding not to exceed its respective Commitment (as set forth on Schedule
1.0), such agreement to be effective as of the Increase Effective Date. From and
after the Increase Effective Date, each New Bank shall be a party to the Credit
Agreement and, to the extent provided in this Agreement, have the rights and
obligations of a Bank under the Credit Agreement and under the other Basic
Documents and shall be bound by the provisions thereof.

 

 

1 The aggregate amount of all increases shall not exceed $75,000,000.

 

 

 

 

(c)   With respect to (i) any increase in the Commitment of any Increasing Bank
and (ii) any New Bank, such Increasing Bank and such New Bank shall hold an
undivided interest in and to (A) all the rights and obligations of a Bank under
the Credit Agreement in connection with its increased or new Commitment, as the
case may be, in the principal amount set forth on Schedule 1.0 hereto and (B)
all rights and obligations of a Bank in connection therewith under the other
Basic Documents.

 

3.           Commitments; Increasing Banks; New Banks.

 

(a)   Effective upon the Increase Effective Date, the Commitments for each
Increasing Bank, each Non Increasing Bank (as defined below) and each New Bank
shall be as set forth in Schedule 1.0.

 

(b)   Any Increasing Bank shall pay to the Agent on the Increase Effective Date,
in immediately available funds, an amount equal to the amount, if any, by which
such Increasing Bank’s Revolving Loan Commitment Percentage (determined after
giving effect to the adjustment of the Commitments pursuant to Section 3(a) of
this Agreement, including the increase of such Increasing Bank’s Commitment) of
the aggregate principal amount of the Revolving Loans and funded participation
interests in Reimbursement Obligations and Swing Line Loans to be outstanding
immediately upon the Increase Effective Date exceeds the aggregate principal
amount of Revolving Loans and funded participation interests in Reimbursement
Obligations and Swing Line Loans owing to such Increasing Bank immediately prior
to the Increase Effective Date. Such amount paid by any such Increasing Bank
shall be deemed the purchase price for the acquisition by such Increasing Bank
of such additional amount of Revolving Loans and funded participation interests
in Reimbursement Obligations and Swing Line Loans from Banks whose Commitments
are not increased under this Agreement (“Non Increasing Banks”) and, if
applicable, other Banks. The Agent shall distribute such amounts as received
from the Increasing Banks as may be necessary so that the Revolving Loans and
funded participation interests in Reimbursement Obligations and Swing Line Loans
are held by the Increasing Banks, New Banks and Non Increasing Banks in
accordance with their respective Revolving Loan Commitment Percentages
(determined after giving effect to the adjustment of Revolving Loan Commitment
Percentages pursuant to Section 3(a) of this Agreement).

 

(c)   Any New Bank shall pay to the Agent on the Increase Effective Date, in
immediately available funds, an amount equal to the amount of such New Bank’s
Revolving Loan Commitment Percentage (determined after giving effect to the
adjustment of the Commitments pursuant to Section 3(a) of this Agreement) of the
aggregate principal amount of the Revolving Loans and funded participation
interests in Reimbursement Obligations and Swing Line Loans to be outstanding
immediately upon the Increase Effective Date. Such amount paid by any such New
Bank shall be deemed the purchase price for the acquisition by such New Bank of
such amount of Revolving Loans and funded participation interests in
Reimbursement Obligations and Swing Line Loans from Non Increasing Banks and, if
applicable, other Banks upon the effectiveness of this Agreement. The Agent
shall distribute such amounts as received from the New Banks as may be necessary
so that the Revolving Loans and funded participation interests in Reimbursement
Obligations and Swing Line Loans are held by the Increasing Banks, New Banks and
Non Increasing Banks in accordance with their respective Revolving Loan
Commitment Percentages (determined after giving effect to the adjustment of
Revolving Loan Commitment Percentages pursuant to Section 3(a) of this
Agreement).

 

(d)   Each Increasing Bank and Non Increasing Bank (each, a “Selling Bank”)
which receives a payment in connection with clause (b) or (c) above shall be
deemed to have sold and assigned, without recourse to such Selling Bank, to the
applicable Increasing Banks and/or New Banks (each, a “Purchasing Bank”), and
such Purchasing Banks shall be deemed to have purchased and assumed without
recourse to the Selling Banks, Revolving Loans and funded participation
interests in Reimbursement Obligations and Swing Line Loans in amounts such that
after giving effect thereto each Bank shall hold Revolving Loans and funded
participation interests in Reimbursement Obligations and Swing Line Loans in
accordance with its Revolving Loan Commitment Percentage (determined after
giving effect to the adjustment of Commitments pursuant to Section 3(a) of this
Agreement).

 

 

 

  

4.           Conditions Precedent. This Agreement shall become effective upon
the satisfaction of the following conditions precedent:

 

(a)   Increase Documents. The Agent shall have received (each of the following
documents being referred to herein as an “Increase Document”):

 

(i)          this Agreement, executed and delivered by a duly authorized officer
of the Company, the Agent, the Issuing Banks, the Swing Line Bank, each
Increasing Bank and each New Bank, with a counterpart for each Bank, and

 

(ii)         for the account of each Bank requesting the same, a Note of the
Company conforming to the requirements of the Credit Agreement, and reflecting
the Commitment of such Bank after giving effect to this Agreement, executed by a
duly authorized officer of such Company.

 

(b)   Increasing Banks; New Banks. The Agent shall have received from each
Increasing Bank and each New Bank the amounts required to be paid by such
Increasing Banks and New Banks pursuant to Section 3 of this Agreement.

 

(c)   Governing Documents. The Agent shall have received, with a counterpart for
each Bank, certified copies of the charter and by laws (or equivalent documents)
of the Company, and of all corporate authority for the Company (including board
of director resolutions, evidence of the incumbency of officers and signature
specimens of officers) with respect to the execution, delivery and performance
of this Agreement and each other document to be delivered by the Company from
time to time in connection herewith, each dated as of the Increase Effective
Date with appropriate insertions and attachments, reasonably satisfactory in
form and substance to the Agent.

 

(d)   Good Standing Certificates. The Agent shall have received, with a copy for
each Bank, evidence of the existence, good standing and authority to transact
business for the Company (i) from the Secretary of State of New Jersey and (ii)
from the Secretary of State of each other jurisdiction in which the failure of
the Company to be in good standing or to have the authority to transact business
would result in a Material Adverse Effect.         

 

(e)   Legal Opinions. The Agent shall have received, with a counterpart for each
Bank, an executed opinion addressed to the Agent and each of the Banks and dated
the Increase Effective Date and covering such matters incident to the
transactions contemplated by this Agreement as the Agent, the Increasing Banks
and the New Banks may reasonably require.

 

(f)   Compliance Certificate. The Agent shall have received a Compliance
Certificate dated as of the Increase Effective Date, in form and substance
satisfactory to the Agent.

 

(g)   Fees. The Company shall have paid, in immediately available funds, any
fees and other amounts (including, without limitation, pursuant to Section 11.03
of the Credit Agreement) payable by the Company in connection with the increase
of the Commitments.

 

 

 

  

(h)   Other Conditions. Each of the other conditions to the Increase Effective
Date provided in Section 2.05(d) of the Existing Credit Agreement, including,
without limitation, the delivery of the certificate of an authorized officer
required pursuant to Section 2.05(d)(iii)(D) of the Existing Credit Agreement,
shall have been satisfied.

 

5.           Reaffirmations.

 

(a)   The Company hereby acknowledges, confirms and agrees that all of the
terms, provisions, obligations, guarantees and agreements of the Company under
the Security Agreement and the other Security Documents to which it is a party
remain in full force and effect in all respects and the Company hereby reaffirms
its obligations and liabilities under the Security Agreement and the other
Security Documents to which it is a party and that the Collateral continues to
secure the Obligations, which include the Obligations both before and after
giving effect to this Agreement, all without offset, defense or counterclaim.

 

(b)   Each Guarantor hereby acknowledges, confirms and agrees that all of the
terms, provisions, obligations, guarantees and agreements of such Guarantor
under the Subsidiary Guarantee, the Security Agreement and the other Security
Documents to which it is a party remain in full force and effect in all respects
and each Guarantor hereby reaffirms its obligations and liabilities under the
Subsidiary Guarantee and that the Collateral continues to secure its
Obligations, which include such Obligations both before and after giving effect
to this Agreement, all without offset, defense or counterclaim.

 

6.          Representations and Warranties. To induce the undersigned Banks to
enter into this Agreement, the Company hereby represents and warrants to the
undersigned Banks that, after giving effect to the increase of the Commitments
and the other modifications to the Existing Credit Agreement provided for
herein, the representations and warranties contained in the Credit Agreement and
the other Basic Documents will be true and correct in all material respects as
if made on such date, except for those representations and warranties that by
their terms were made as of a specified date which shall be true and correct in
all material respects on and as of such date, and that no Default or Event of
Default shall have occurred and be continuing.

 

7.          Disclaimer. Each New Bank and each Increasing Bank acknowledges and
agrees that no Bank party to the Existing Credit Agreement (i) has made any
representation or warranty and shall have no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement, any other Basic
Documents or any other instrument or document furnished pursuant thereto or in
connection therewith; (ii) has made any representation or warranty and has any
responsibility with respect to the financial condition of the Company or any
other obligor or the performance or observance by the Company or any obligor of
any of their respective obligations under the Credit Agreement or any other
Basic Documents or any other instrument or document furnished pursuant hereto or
thereto. Each Increasing Bank and each New Bank represents and warrants that it
is legally authorized to enter into this Agreement, and each New Bank (i)
confirms that it has received a copy of the Existing Credit Agreement, together
with copies of the financial statements delivered pursuant to Section 8.01
thereof and such other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into this Agreement; (ii)
agrees that it will, independently and without reliance upon the Increasing
Banks or the Agent and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Credit Agreement, the other Basic Documents or any
other instrument or document furnished pursuant hereto or thereto or in
connection herewith or therewith; (iii) appoints and authorizes the Agent to
take such action as agent on its behalf and to exercise such powers and
discretion under the Credit Agreement, the other Basic Documents or any other
instrument or document furnished pursuant hereto or thereto as are delegated to
the Agent by the terms thereof, together with such powers as are incidental
thereto; and (iv) agrees that it will be bound by the provisions of the Credit
Agreement and will perform in accordance with its terms all the obligations
which by the terms of the Credit Agreement are required to be performed by it as
a Bank including, if it is organized under the laws of a jurisdiction outside
the United States, its obligation pursuant to subsection 5.06(f) of the Credit
Agreement.

 

 

 

  

8.           No Other Amendments or Waivers. Except as expressly amended or
waived hereby, the Credit Agreement and the other Basic Documents shall remain
in full force and effect in accordance with their respective terms, without any
waiver, amendment or modification of any provision thereof.

 

9.           Effect on Credit Agreement. From and after the Increase Effective
Date, each Increasing Bank and each New Bank party hereto shall be a party to
the Credit Agreement and, to the extent provided in this Agreement, have the
rights and obligations of a Bank thereunder and under the other Basic Documents
and shall be bound by the provisions thereof.

 

10.          Counterparts. This Agreement may be executed by one or more of the
parties hereto on any number of separate counterparts (including by facsimile
transmission of signature pages hereto) and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.

 

11.          Applicable Law. This Agreement and the rights and obligations of
the parties hereunder shall be governed by, and construed and interpreted in
accordance with, the law of the state of New York (without regard to the
conflicts of laws principles thereof).

 

[SIGNATURE PAGES FOLLOW]

 

 

 

 

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

 

  EMPIRE RESOURCES, INC.,   as the Company         By:       Name:     Title:  
    EMPIRE RESOURCES PACIFIC, LTD.,   as a Guarantor         By:       Name:    
Title:       [Additional Guarantors],   as a Guarantor         By:       Name:  
  Title:       COÖPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A., “RABOBANK
NEDERLAND”, NEW YORK BRANCH, as Agent and a Fronting Bank         By:      
Name:     Title:         By:       Name:     Title:       BANKS       [NAME OF
BANK]         By:       Name:     Title:

 

 

 

 

Schedule 1.0 to

Increase and New Bank Agreement

 

BANKS AND COMMITMENTS

 

Bank   Lending Office   Amount of Increase   Commitment Amount
(after giving effect to
increase, if any)                

 

 

 

 

EXHIBIT G

 

FORM OF

COMPLIANCE CERTIFICATE

for the

quarter/fiscal year ending __________ __, _____

 

Coöperatieve Centrale

Raiffeisen-Boerenleenbank B.A.,

“Rabobank Nederland”,

New York Branch, as agent

 

c/o Rabobank International

245 Park Avenue

New York, NY 10167

Phone No. 212-808-6815 Fax No. 212-916-3731 Attention: Frank Imperato / Naoko
Kojima / Xander Willemsen

 

and each Bank

 

Ladies and Gentlemen:

 

This Compliance Certificate (the “Certificate”) is being delivered pursuant to
Section 8.01 of that certain Amended and Restated Credit Agreement dated as of
June 19, 2014 (as amended, restated, supplemented or otherwise modified from
time to time, the “Agreement”) among Empire Resources, Inc. (the “Company”), the
banks from time to time party thereto and Coöperatieve Centrale
Raiffeisen–Boerenleenbank B.A., “Rabobank Nederland”, New York Branch, as agent
(in such capacity, together with its successors in such capacity, the “Agent”).
All terms used herein shall have the meanings assigned to them in the Agreement.
All the calculations set forth below shall be made pursuant to the terms of the
Agreement.

 

The undersigned, an authorized financial officer of the Company in his or her
capacity as such financial officer and not in his or her individual capacity,
does hereby certify to the Agent and the Banks that:

 

1.        DEFAULT No Event of Default exists or has occurred or, if an Event of
Default exists, I have described on the attached Exhibit “A” the nature thereof
and the steps taken or proposed to remedy such Event of Default.      
Compliance 2.        SECTION 8.01 - Financial Statements and Records            
  (a)       Annual audited financial statements of the Company on a consolidated
basis within 90 days after the end of each fiscal year end (together with
Compliance Certificate).     Yes No N/A             (b)       quarterly
unaudited financial statements of the Company on a consolidated basis within 45
days after each of the first three fiscal quarter ends (together with Compliance
Certificate).     Yes No N/A             (c)       Bi-Monthly Borrowing Base
Certificate     Yes No N/A

 

 

 

 

4.        SECTION 8.04 - Insurance                   Annual Evidence of
Insurance on anniversary of the Closing Date.     Yes No N/A            
5.        SECTION 8.07 - Indebtedness                       No additional
Indebtedness except:                       (a)       Indebtedness of 6900 Quad
Avenue, LLC not to exceed:   $1,300,000       Actual outstanding:   $_______ Yes
No               (b)       Other unsecured Indebtedness of the Company  
$250,000       Actual outstanding:   $_______ Yes No              
(c)       Imbali Facility not to exceed:   €10,000,000       Actual € amount
outstanding:   €_______ Yes No   Actual $ equivalent amount outstanding:  
$_______                   (d)       Non-recourse Inventory financing amount
outstanding   $_______                   (e)       Reimbursement obligations in
respect of letters of credit issued outside of the Agreement   $_______        
          (f)       Subordinated Debt   $_______                  
(g)       Pre-export financing Guarantees not to exceed:   $3,000,000      
Actual outstanding:   $_______ Yes No               (h)       Aggregate $
equivalent amount of actual outstanding under the Indebtedness under lines (d),
(e), (f) and (g) not to exceed:  

 

 

$25,000,000

      Actual aggregate $ equivalent amount of actual outstanding under the
Indebtedness under lines (d), (e), (f) and (g):   $_______ Yes No              
(i)        Capital Expenditures not to exceed:   $10,000,000       Actual
outstanding:   $_______ Yes No               (j)       Indebtedness under the
Uncommitted Credit Agreement not to exceed at any time an amount equal to 50% of
the aggregate Revolving Loan Commitments  

 

 

$_______

      Actual outstanding:   $_______ Yes No               (c)       Australian
Subsidiary Indebtedness not to exceed:   AUS$20,000,000       Actual AUS$ amount
outstanding:   AUS$_______ Yes No               6.    SECTION 8.08 - Investments
                      (a)    Investments in Imbali Metals BVBA not to exceed:  
€4,000,000       Actual Imbali Investments   €_______ Yes No              
(b)    Investments with Sub Debt proceeds not to exceed:   $12,000,000      
Actual Investments with Sub Debt proceeds:   $_______ Yes No  

 

 

 

 

(c)     Additional Investments not to exceed:   $500,000       Actual additional
Investments   $_______ Yes No               (d)     Permitted Investments not to
exceed1:   $_______ Yes No               7.   SECTION 8.09 – Leverage Ratio    
                  (a)     Total Liabilities (including letters of credit)  
$_________       (b)     Subordinated Debt   $_________       (c)     Tangible
Net Worth           (i)         amount of common stock;   $_________      
(ii)        amount of surplus and retained earnings (minus any deficit);  
$_________       (iii)       accumulated other comprehensive income;  
$_________       (iv)       Subordinated Debt   $_________      
(v)        Investments (other than Permitted Investments), the cost of treasury
shares and all assets classified as intangibles (without duplication of
deductions in respect of items already deducted in arriving at surplus and
retained earnings)  

 

($_________)

      (vi)        Sum of (i) through (iv) minus (v)   $_________      
(d)     7(a) minus 7(b)  ¸ 7(c)(vi)   ___ to 1.00       (e)     Maximum Leverage
Ratio   6.00 to 1.00 Yes No               8.   SECTION 8.10 – Net Working
Capital                       (a)     Base Amount   $35,000,000      
(b)     25% of Company's Consolidated Net Income (only if a positive number) for
the fiscal year most recently ended  

 

$_________

      (c)     Total minimum required Net Working Capital (8(a) plus 8(b))  

 

$_________

      (d)     Actual Net Working Capital   $_________ Yes No              
9.   SECTION 8.11 – No Net Loss                       Consolidated Net Income
(but calculated before taxes and extraordinary items in accordance with GAAP)
not to be less than negative $4,000,000 in the aggregate over two or more
consecutive quarters     Yes No               10.  SECTION 8.17 - Additional
Domestic Subsidiaries               Joinder of new Domestic Subsidiaries
promptly after the Domestic Subsidiary is formed or acquired.     Yes No N/A    
        Pledge of new Capital Securities in Domestic Subsidiaries and 65% of
foreign Subsidiaries     Yes No N/A             11.  SECTION 8.20 – Capital
Expenditure Limit                       (a)     Capital Expenditures for
logistical assets not to exceed:   $10,000,000       (b)     Actual Capital
Expenditures for logistical assets   $_________       (c)     Compliance: (line
11(b) must be less than Line 11(a))     Yes No                

 

1 To be completed with respect to each category of Permitted Investments.

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Certificate effective as
of the date first written above.

 

  EMPIRE RESOURCES, INC.         By:       Name:       Title:  

 

 

 

 

EXHIBIT I

FORM OF

BORROWING REQUEST

 

Coöperatieve Centrale

Raiffeisen-Boerenleenbank B.A.,

“Rabobank Nederland”,

New York Branch, as agent

 

c/o Rabobank International

245 Park Avenue

New York, NY 10167

Phone No. 212-808-6815 Fax No. 212-916-3731 Attention: Frank Imperato / Naoko
Kojima / Xander Willemsen

 

and each Bank

 

Ladies and Gentlemen:

 

The undersigned is an authorized officer of Empire Resources, Inc. (the
“Company”) and is authorized to make and deliver this Borrowing Request pursuant
to that certain Amended and Restated Credit Agreement dated as of June 19, 2014
(as amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”) among the Company, the banks from time to time party thereto
and Coöperatieve Centrale Raiffeisen–Boerenleenbank B.A., “Rabobank Nederland”,
New York Branch, as agent (in such capacity, together with its successors in
such capacity, the “Agent”). All terms defined in the Credit Agreement shall
have the same meaning herein. In accordance with the Credit Agreement, the
Company hereby (check whichever is applicable):

 

___       1.          Requests that the Banks make an advance under the
Revolving Loan Commitments which shall be a Base Rate Loans in the amount of $
_________ on __________.

 

___       2.          Requests that the Banks make an advance on __________under
the Revolving Loan Commitments as Eurodollar Loans with the amount of each
Eurodollar Loan and duration of the Interest Periods with respect thereto to be
as follows:

 

Amount   Interest Period    Maturity Date  1.   _____ Month(s)       2.   _____
Month(s)       3.   _____ Month(s)       4.   _____ Month(s)      

 

___       3.          Requests that the Swing Line Bank make an advance under
the Swing Line Commitment in the amount of $__________ on __________.

 

___       4.          Requests that _________ issue a Letter of Credit in the
form attached hereto as Exhibit A with an original face amount of $__________ on
__________.

 

 

 

  

In connection with the foregoing and pursuant to the terms and provisions of the
Credit Agreement, the undersigned hereby certifies to the Agent and the Banks
that the following statements are true and correct:

 

(i)          The representations and warranties contained in Section 7 of the
Credit Agreement and in each of the other Basic Documents are true and complete
in all material respects on and as of the date hereof with the same force and
effect as if made on and as of such date except for any representation or
warranty limited by its terms to a specific date.

 

(ii)         No Default exists or would result from the extension of credit
requested hereunder.

 

(iii)        After giving effect to the credit extended pursuant to this
request, the aggregate amount of Credit Exposure does not exceed the lesser of
the Borrowing Base (plus if applicable, with respect to any commercial Letter of
Credit issued to secure the purchase price of Inventory, 80% the cost of such
Inventory that will be Eligible Inventory Ordered Under L/C once such Letter of
Credit is issued) or the aggregate Revolving Loan Commitments;

 

Obligations  Totals  a.  Current Revolving Loans  $  b.  Requested Revolving
Loans  $  c.  Total Revolving Loans  $  d.  Current Swing Line Loans  $  e. 
Requested Swing Line Loans  $  f.  Total Swing Line Loans  $  g.  Current Letter
of Credit Liabilities  $  h.  Requested Letter of Credit Liabilities  $  i. 
Total Letter of Credit Liabilities  $  j.  Total Current Obligations (Sum of
Lines a., d. and g.)  $  k.  Total Requested Obligations (Sum of Lines b., e.
and h.)  $  l.  Total Obligations After Request (Sum of Lines c., f. and i.)  $ 
m.  Aggregate Borrowing Base (from most recent Borrowing Base Report or Interim
Borrowing Base Certificate)  $  n.  Plus with respect to any commercial Letter
of Credit issued to secure the purchase price of Inventory, 80% the cost of such
Inventory that will be Eligible Inventory Ordered Under L/C once such Letter of
Credit is issued  $  o.  Total Aggregate Availability (sum of m. plus n.).     
p.  Availability after request (sum of o. minus l.)     

  

All information supplied hereon is true, correct, and complete as of the date
hereof.

 

 

 

 

      Company:               EMPIRE RESOURCES, INC.                 By:        
  Name:           Title:           Dated as of:       (insert proposed date of
the     requested extension of credit)    

 

 

 

 

EXHIBIT J

 

FORM OF

NOTICE OF PREPAYMENT, CONTINUATION OR CONVERSION

 

Coöperatieve Centrale

Raiffeisen-Boerenleenbank B.A.,

“Rabobank Nederland”,

New York Branch, as agent

 

c/o Rabobank International

245 Park Avenue

New York, NY 10167

Phone No. 212-808-6815 Fax No. 212-916-3731 Attention: Frank Imperato / Naoko
Kojima / Xander Willemsen

 

and each Bank

 

Ladies and Gentlemen:

 

The undersigned is an authorized officer of Empire Resources, Inc. (the
“Company”) and is authorized to make and deliver this notice pursuant to that
certain Amended and Restated Credit Agreement dated as of June 19, 2014 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”) among the Company, the banks from time to time party thereto
and Coöperatieve Centrale Raiffeisen–Boerenleenbank B.A., “Rabobank Nederland”,
New York Branch, as agent (in such capacity, together with its successors in
such capacity, the “Agent”). All terms defined in the Credit Agreement shall
have the same meaning herein.

 

____       The Company hereby gives Agent notice of prepayment of a Loan.
Details of this prepayment are set forth on Schedule 1 hereto.

 

____       The Company hereby gives Agent notice of the continuation of a
Eurodollar Loan. Details of this Continuation are set forth on Schedule 2
hereto.

 

____       The Company hereby gives Agent notice of the conversion of a Loan
from one Type to another Type. Details of this Conversion are set forth on
Schedule 3 hereto.

 

In connection with the foregoing and pursuant to the terms and provisions of the
Credit Agreement, the undersigned hereby certifies to the Agent and the Banks
that the following statements are true and correct:

 

(a)          The representations and warranties contained in Section 7 of the
Credit Agreement and in each of the other Basic Documents are true and complete
in all material respects on and as of the date hereof with the same force and
effect as if made on and as of such date except to the extent that such
representations and warranties relate specifically to another date.

 

Notice of Prepayment Continuation or Conversion, Page 1

 

  

(b)          No Default exists or would result from the request made hereunder.

 

      Company:               EMPIRE RESOURCES INC.                 By:          
Name:           Title:           Dated as of:      

 

Notice of Prepayment Continuation or Conversion, Page 2

 

  

SCHEDULE 1

 

NOTICE OF PREPAYMENT

 

1.          The date of prepayment is ______________ __, 20__.1

 

2.          The aggregate amount of the prepayment is $_____________.

 

3.          The prepayment should be applied as follows:

 

___       Revolving Loan in the amount of $___________ (minimum amount of
$1,000,000 and $250,000 increments for all Eurodollar Loans; and minimum of
$250,000 or multiples of $50,000 in excess thereof in the case of Base Rate
Loans)

 

___       Swing line Loan in the amount of $___________ (minimum amount of
$500,000 and $25,000 increments)

 

 

1 Notice by 10:00 A.M. on the Business Day of the proposed prepayment is
required for prepayments of Base Rate Loans and Swing Line Loans. Three Business
Days’ notice is required for prepayments of Eurodollar Loans.

 

SCHEDULE 1 to Notice of Prepayment Continuation or Conversion, Solo Page 1

 

  

SCHEDULE 2

 

NOTICE OF CONTINUATION

 

1.          The Continuation Date is ______ __, 20__.2

 

2.          The aggregate amount of the Eurodollar Loans to be continued is
$__________.

 

3.          The Eurodollar Loans to be continued should be continued as
Eurodollar Loans in the amounts and with the Interest Periods specified below:

 

Amount   Interest Period    Maturity Date  1.   _____ Month(s)       2.   _____
Month(s)       3.   _____ Month(s)       4.   _____ Month(s)      

  

 

2 Notice by 10:00 A.M. on the Business Day of the proposed continuation is
required for Base Rate Loans and three Business Days’ notice is required for a
continuation of Eurodollar Loans.

 

SCHEDULE 2 to Notice of Prepayment Continuation or Conversion, Solo Page 1

 

  

SCHEDULE 3

 

NOTICE OF CONVERSION

 

1.          The Conversion Date is ______ __, 20__.3

 

2.          The aggregate amount of the Loans to be converted is $__________.

 

3.          The Account to be converted is currently a:

 

____       [Base Rate Loan] [Eurodollar Loan] and should be converted into:

 

___      Base Rate Loans in the amount of $ _________;

 

___      Eurodollar Loans with the amount of each Eurodollar Loan and duration
of the Interest Periods with respect thereto to be as follows:

 

Amount   Interest Period    Maturity Date  1.   _____ Month(s)       2.   _____
Month(s)       3.   _____ Month(s)       4.   _____ Month(s)      

  

 

3 A Conversion can only occur on the last day of the Interest Period applicable
to a Eurodollar Loan. Notice by 10:00 A.M. on the Business Day of the proposed
conversion is required for Base Rate Loans and three Business Days’ notice is
required for a conversion into Eurodollar Loans.

 

SCHEDULE 3 to Notice of Prepayment Continuation or Conversion, Solo Page 2

 

 

SCHEDULE A

TO

EMPIRE RESOURCES, INC.

AMENDED AND RESTATED

CREDIT AGREEMENT

 

Commitments

 

Banks  Commitment   Revolving Loan Commitment
Percentage  Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A., “Rabobank
Nederland”, New York Branch  $37,500,000    25.0000% BNP Paribas  $30,000,000  
 20.0000% Société Générale S.A.  $20,000,000    13.3333% ABN AMRO Capital USA
LLC  $25,000,000    16.6667% RB International Finance (USA) LLC  $22,500,000  
 15.0000% Brown Brothers Harriman & Co.  $15,000,000    10.0000% Total 
$150,000,000.00    100.0000%

 

SCHEDULE A, SOLO PAGE

 

 

 

SCHEDULE I

TO

EMPIRE RESOURCES, INC.

AMENDED AND RESTATED

CREDIT AGREEMENT

 

Indebtedness

 

1.The €10,000,000 Imbali Facility and the Imbali Guaranty.

 

2.The $75,000,000 Uncommitted Credit Agreement.

 

SCHEDULE I (Indebtedness), SOLO PAGE

 

 

 

SCHEDULE II

TO

EMPIRE RESOURCES, INC.

AMENDED AND RESTATED

CREDIT AGREEMENT

 

Investments

 

1.Imbali Guaranty.

 

2.See Schedule III.

 

3.$10,000,000 loan to PT. Alumindo, Southern Aluminum Industry and Fung Lam
Trading Company that matures January 1, 2016.

 

 

 

 

SCHEDULE III

TO

EMPIRE RESOURCES, INC.

AMENDED AND RESTATED

CREDIT AGREEMENT

 

Subsidiaries

 

Subsidiary Name  Jurisdiction of
Organization  Persons Holding
Equity Interest  Authorized
Equity Interest  Outstanding Equity
Interest  Percentage of
Ownership  Empire Resources Pacific, Ltd.  Delaware  Empire Resources, Inc. 
1,000 shares of common stock  100 shares of common stock   100% Imbali Metals
Bvba  Belgium  Empire Resources, Inc.  1,000 shares  1,000 shares   100% 6900
Quad Avenue, LLC  Delaware  Empire Resources, Inc.  N/A  N/A   100%

 

SCHEDULE III (Subsidiaries), SOLO PAGE

 

 

 

SCHEDULE IV

TO

EMPIRE RESOURCES, INC.

AMENDED AND RESTATED

CREDIT AGREEMENT

 

Limitations on Dividend Clause and Negative Pledge Clauses

 

None.

 

 

 

 

SCHEDULE V

TO

EMPIRE RESOURCES, INC.

AMENDED AND RESTATED

CREDIT AGREEMENT

 

Credit Insurance

 

Coface North America Insurance Company Policy Number E-489020205