Exhibit 10.1

SUPERPRIORITY DEBTOR-IN-POSSESSION CREDIT AGREEMENT

DATED AS OF JANUARY 23, 2008

AMONG

PROPEX INC,

debtor and debtor-in-possession

THE LENDERS LISTED HEREIN,

as Lenders,

BNP PARIBAS,

as Administrative Agent

and

BNP PARIBAS SECURITIES CORP.,

as Lead Arranger and Book Manager

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TABLE OF CONTENTS

 

          Page No. Section 1.    DEFINITIONS    9

   1.1

   Certain Defined Terms.    9

   1.2

   Accounting Terms; Utilization of GAAP for Purposes of Calculations Under
Agreement.    34

   1.3

   Other Definitional Provisions and Rules of Construction.    35 Section 2.   
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS    35

   2.1

   Commitments; Making of Loans; the Register; Optional Notes.    35

   2.2

   Interest on the Loans.    41

   2.3

   Fees.    45

   2.4

   Repayments, Prepayments and Reductions of Revolving Loan Commitment Amount;
General Provisions Regarding Payments; Application of Proceeds of Collateral and
Payments Under Guaranties.    45

   2.5

   Use of Proceeds.    50

   2.6

   Special Provisions Governing LIBOR Loans.    50

   2.7

   Increased Costs; Taxes; Capital Adequacy.    52

   2.8

   Statement of Lenders; Obligation of Lenders and Issuing Lenders to Mitigate.
   57

   2.9

   Replacement of a Lender.    57

   2.10

   Priority and Liens.    58 Section 3.    LETTERS OF CREDIT    60

   3.1

   Issuance of Letters of Credit and Lenders’ Purchase of Participations
Therein.    60

   3.2

   Letter of Credit Fees.    63

   3.3

   Drawings and Reimbursement of Amounts Paid Under Letters of Credit.    63

   3.4

   Obligations Absolute.    66

   3.5

   Nature of Issuing Lenders’ Duties.    67 Section 4.    CONDITIONS TO LOANS
AND LETTERS OF CREDIT    68

   4.1

   Conditions to Initial Revolving Loans and Swing Line Loans.    68

   4.2

   Conditions to All Loans.    72

   4.3

   Conditions to Letters of Credit.    73

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Section 5.    COMPANY’S REPRESENTATIONS AND WARRANTIES    74

   5.1

   Organization, Powers, Qualification, Good Standing, Business and
Subsidiaries.    74

   5.2

   Authorization of Borrowing, etc.    75

   5.3

   Financial Condition.    76

   5.4

   No Material Adverse Change; No Restricted Junior Payments.    76

   5.5

   Title to Properties; Liens; Real Property; Intellectual Property.    76

   5.6

   Litigation; Adverse Facts.    77

   5.7

   Payment of Taxes.    77

   5.8

   Governmental Regulation.    78

   5.9

   Securities Activities.    78

   5.10

   Employee Benefit Plans.    78

   5.11

   Certain Fees.    79

   5.12

   Environmental Matters.    79

   5.13

   Employee Matters.    80

   5.14

   Secured Superpriority Obligations.    80

   5.15

   Additional Matters Relating to Collateral.    81

   5.16

   Disclosure.    82

   5.17

   Foreign Assets Control Regulations, etc.    82 Section 6.    AFFIRMATIVE
COVENANTS    82

   6.1

   Financial Statements and Other Reports.    83

   6.2

   Existence, etc.    87

   6.3

   Payment of Post-Petition Taxes and Claims; Tax.    87

   6.4

   Maintenance of Properties; Insurance; Application of Net Insurance/
Condemnation Proceeds.    88

   6.5

   Inspection Rights; Lender Meeting.    90

   6.6

   Compliance with Laws, etc.    90

   6.7

   Environmental Matters.    91

   6.8

   Execution of Subsidiary Guaranty and Personal Property Collateral Documents
After the Closing Date.    92

   6.9

   Deposit Accounts, Securities Accounts and Cash Management Systems.    94

   6.10

   Credit Ratings.    94

   6.11

   Post-Closing Deliveries.    94

 

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Section 7.    NEGATIVE COVENANTS    94

   7.1

   Indebtedness.    95

   7.2

   Liens and Related Matters.    96

   7.3

   Investments; Acquisitions.    97

   7.4

   Contingent Obligations.    98

   7.5

   Restricted Junior Payments.    99

   7.6

   Financial Covenants.    99

   7.7

   Restriction on Fundamental Changes; Asset Sales.    102

   7.8

   Consolidated Capital Expenditures.    102

   7.9

   Transactions with Shareholders and Affiliates.    103

   7.10

   Sales and Lease-Backs.    103

   7.11

   Conduct of Business.    104

   7.12

   Prepetition Payments.    104

   7.13

   Bankruptcy Matters.    104

   7.14

   Fiscal Year.    104

   7.15

   Prepayment of Indebtedness.    105

   7.16

   Certain Expenses.    105 Section 8.    EVENTS OF DEFAULT    105

   8.1

   Failure to Make Payments When Due.    105

   8.2

   Default in Other Agreements.    105

   8.3

   Breach of Certain Covenants.    106

   8.4

   Breach of Warranty.    106

   8.5

   Other Defaults Under Loan Documents.    106

   8.6

   Defaults Pertaining to Cases.    106

   8.7

   Judgments and Attachments.    108

   8.8

   Dissolution.    108

   8.9

   Employee Benefit Plans.    108

   8.10

   Change in Control.    108

   8.11

   Invalidity of Loan Documents; Failure of Security; Repudiation of
Obligations.    108

   8.12

   Conduct of Business By Holdings.    109

 

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Section 9.    ADMINISTRATIVE AGENT    110

   9.1

   Appointment.    110

   9.2

   Powers and Duties; General Immunity.    111

   9.3

   Independent Investigation by Lenders; No Responsibility for Appraisal of
Creditworthiness.    113

   9.4

   Right to Indemnity.    113

   9.5

   Resignation of Agents; Successor Administrative Agent and Swing Line Lender.
   113

   9.6

   Collateral Documents, and Guaranties.    114

   9.7

   Duties of Other Agents.    115

   9.8

   Administrative Agent May File Proofs of Claim.    116 Section 10.   
MISCELLANEOUS    116

   10.1

   Successors and Assigns; Assignments and Participations in Loans and Letters
of Credit.    116

   10.2

   Expenses.    120

   10.3

   Indemnity.    121

   10.4

   Set-Off.    122

   10.5

   Ratable Sharing.    122

   10.6

   Amendments and Waivers.    123

   10.7

   Independence of Covenants.    125

   10.8

   Notices; Effectiveness of Signatures.    125

   10.9

   Survival of Representations, Warranties and Agreements.    125

   10.10

   Failure or Indulgence Not Waiver; Remedies Cumulative.    126

   10.11

   Marshalling; Payments Set Aside.    126

   10.12

   Severability.    126

   10.13

   Obligations Several; Independent Nature of Lenders’ Rights; Damage Waiver.   
126

   10.14

   Release of Security Interest or Guaranty.    127

   10.15

   Applicable Law.    127

   10.16

   Construction of Agreement; Nature of Relationship.    128

   10.17

   Consent to Jurisdiction and Service of Process.    128

   10.18

   Waiver of Jury Trial.    129

 

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   10.19

   Confidentiality.    129

   10.20

   Customer Identification - USA PATRIOT Act Notice.    130

   10.21

   Counterparts; Effectiveness.    130

   10.22

   Paramountcy.    131 Signature pages    S-1

 

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EXHIBITS

 

I    FORM OF NOTICE OF BORROWING II    FORM OF NOTICE OF CONVERSION/CONTINUATION
III    FORM OF REQUEST FOR ISSUANCE OF LETTER OF CREDIT IV    FORM OF REVOLVING
NOTE V    FORM OF SWING LINE NOTE VI    FORM OF COMPLIANCE CERTIFICATE VII   
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT VIII    FORM OF SUBSIDIARY GUARANTY
IX    FORM OF SECURITY AGREEMENT X    FORM OF HOLDINGS GUARANTY

 

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SCHEDULES

 

2.1    REVOLVING LENDERS’ COMMITMENTS AND PRO RATA SHARES 4.1C    CORPORATE AND
CAPITAL STRUCTURE; OWNERSHIP; MANAGEMENT 5.1    SUBSIDIARIES OF COMPANY 5.5B   
REAL PROPERTY 5.5C    INTELLECTUAL PROPERTY 5.11    CERTAIN EMPLOYEE BENEFIT
PLANS 5.12    ENVIRONMENTAL MATTERS 7.1    CERTAIN INDEBTEDNESS 7.2    CERTAIN
LIENS 7.3    CERTAIN INVESTMENTS 7.4    CERTAIN CONTINGENT OBLIGATIONS

 

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SUPERPRIORITY DEBTOR-IN-POSSESSION CREDIT AGREEMENT

This SUPERPRIORITY DEBTOR-IN-POSSESSION CREDIT AGREEMENT is dated as of
January 23, 2008 and entered into by and among PROPEX INC., a Delaware
corporation and debtor and debtor-in-possession (“Company”), PROPEX HOLDINGS
INC., a Delaware corporation and debtor and debtor-in-possession (“Holdings”),
the subsidiaries of the Company party hereto, THE FINANCIAL INSTITUTIONS LISTED
ON THE SIGNATURE PAGES HEREOF (each individually referred to herein as a
“Lender” and collectively as “Lenders”), and BNP PARIBAS (“BNP Paribas”), as
administrative agent for Lenders (in such capacity, “Administrative Agent”).

RECITALS

WHEREAS, On January 18, 2008 (the “Filing Date”), Company, Holdings and certain
of Company’s subsidiaries filed voluntary petitions with the Bankruptcy Court
initiating the Cases and have continued in the possession of their assets and in
the management of their business pursuant to Sections 1107 and 1108 of the
Bankruptcy Code;

WHEREAS, Lenders, at the request of Company, have agreed to extend a revolving
line of credit facility to Company in an aggregate principal amount of
$60,000,000, including a letter of credit subfacility of $20,000,000;

WHEREAS, the proceeds of the revolving line of credit facility will be used
(i) to pay related fees and expenses associated with negotiation, execution and
delivery of this Agreement and the other Loan Documents, (ii) to make
Prepetition Payments solely to the extent approved by the Bankruptcy Court and
permitted hereunder and (iii) for working capital and other general corporate
purposes of the Company and the Guarantors to the extent permitted hereunder;
and

WHEREAS, to provide security for the repayment of all Obligations hereunder and
under the other Loan Documents, including (i) direct borrowings, and
(ii) reimbursement obligations under Letters of Credit, the Company and each
Guarantor will provide to the Administrative Agent (for the benefit of the
Secured Creditors) the following (all as more fully described herein and in the
Orders):

(i) pursuant to Section 364(c)(1) of the Bankruptcy Code, super-priority claim
status in the Cases for all of the Obligations (except proceeds from Avoidance
Actions);

(ii) pursuant to Section 364(c)(2) of the Bankruptcy Code, perfected first
priority Lien on all unencumbered property and assets of each Loan Party (other
than proceeds of Avoidance Actions) to secure the Obligations;

(iii) pursuant to Section 364(c)(3) of the Bankruptcy Code and subject to clause
(iv) below, a perfected junior Lien on all property and assets of each Loan
Party that are subject to valid and perfected liens in existence at the time of
the commencement of the Cases or to valid

 

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Liens in existence at the time of such commencement of the Cases that are
perfected after such commencement as permitted by Section 546(b) of the
Bankruptcy Code (“Existing Liens”) to secure the Obligations; and

(iv) pursuant to Section 364(d)(1) of the Bankruptcy Code, a perfected first
priority, senior priming Lien on all the property and assets of each Loan Party
of any kind, senior to (a) the Liens that secure the obligations of the Loan
Parties under the Prepetition Credit Agreement and (b) any Liens to which such
Liens are senior, all of which Existing Liens (the “Primed Liens”) shall be
primed by and made subject and subordinate to the perfected first priority
senior Liens to be granted to the Administrative Agent (for the benefit of the
Secured Creditors), which senior priming Liens in favor of the Administrative
Agent shall also prime any Liens granted after the commencement of the Cases to
provide adequate protection in respect of any Primed Liens but shall not prime
Liens, if any, to which the Primed Liens are subject at the time of the
commencement of the Cases; in each case subject only to the Carve-Out (as
defined herein).

NOW, THEREFORE, in consideration of the premises and the agreements, provisions
and covenants herein contained, Company, Lenders and Administrative Agent agree
as follows:

Section 1. DEFINITIONS

 

  1.1 Certain Defined Terms.

The following terms used in this Agreement shall have the following meanings:

“Adjusted LIBOR” means, for each Interest Period in respect of any LIBOR Loan,
an interest rate per annum (rounded upward, if necessary, to the nearest 1/16 of
1% determined pursuant to the following formula:

 

Adjusted LIBOR    =    

LIBOR

       1.00 – Eurodollar Reserve Percentage   

Adjusted LIBOR shall be adjusted automatically as of the effective date of any
change in the Eurodollar Reserve Percentage.

“Administrative Agent” has the meaning assigned to that term in the introduction
to this Agreement and also means and includes any successor Administrative Agent
appointed pursuant to subsection 9.5A.

“Affected Lender” has the meaning assigned to that term in subsection 2.6C.

“Affected Loans” has the meaning assigned to that term in subsection 2.6C.

“Affiliate”, as applied to any Person, means any other Person directly or
indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, “control” (including, with
correlative meanings, the terms

 

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“controlling”, “controlled by” and “under common control with”), as applied to
any Person, means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of that Person, whether
through the ownership of voting securities or by contract or otherwise.

“Agents” means Administrative Agent and the Persons as may be identified on the
cover of this Agreement as syndication agent and documentation agent.

“Agreement” means this Superpriority Debtor-in-Possession Credit Agreement dated
as of January 23, 2008.

“Applicable Law” means any and all laws, regulations, ordinances or other
legally binding rules, judgments, orders, decrees, permits, concessions, grants,
franchises or governmental restrictions issued or promulgated by a Government
Authority and applicable to the matter in question.

“Approved Fund” means a Fund that is administered or managed by (i) a Lender,
(ii) an Affiliate of a Lender or (iii) an entity or an Affiliate of an entity
that administers or manages a Lender.

“Asset Sale” means (x) the sale by Company or any of its Subsidiaries to any
Person other than Company or any of its Subsidiaries that are Subsidiary
Guarantors of (i) any of the stock of any of Company’s Subsidiaries,
(ii) substantially all of the assets of any division or line of business of
Company or any of its Subsidiaries, or (iii) any other assets (whether tangible
or intangible) of Company or any of its Subsidiaries (other than (a) inventory
sold in the ordinary course of business, (b) sales, assignments, transfers or
dispositions of accounts in the ordinary course of business for purposes of
collection, and (c) the sale of such other assets to the extent that the
aggregate of the amounts received from the Net Asset Sale Proceeds received from
the sale of such assets from the Closing Date to the date of determination is a
combined $500,000 or less for Net Asset Sale Proceeds generated by any sales by
the Company or any Domestic Subsidiary and a combined $500,000 or less for Net
Asset Sale Proceeds generated by any sales by any Foreign Subsidiary, or (y) any
settlement of any claim by the Company or any Subsidiary against any other
Person (other than the Subject Claim).

“Assignment Agreement” means an Assignment and Assumption Agreement in
substantially the form of Exhibit VII annexed hereto.

“Avoidance Actions” has the meaning assigned to that term in subsection
2.10A(ii).

“Bankruptcy Code” means Title 11 of the United States Code entitled
“Bankruptcy,” as now and hereafter in effect, or any successor statute.

“Bankruptcy Court” means the United States Bankruptcy Court for the Eastern
District of Tennessee.

 

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“Base Rate” means, for any day, a rate per annum (rounded upwards to the nearest
1/100 of 1%) equal to the greater of (i) the Prime Rate in effect on such day
and (ii) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%.
If, for any reason, Administrative Agent shall have determined (which
determination shall be conclusive absent manifest error) that it is unable to
ascertain the Federal Funds Effective Rate, including the inability or failure
of Administrative Agent to obtain sufficient quotations in accordance with the
terms hereof, the Base Rate shall be determined without regards to clause
(ii) of the first sentence of this definition until the circumstances giving
rise to such inability no longer exist. Any change in the Base Rate due to a
change in the Prime Rate or the Federal Funds Effective Rate shall be effective
on the effective date of such change in the Prime Rate or the Federal Funds
Effective Rate, respectively.

“Base Rate Loans” means Loans bearing interest at rates determined by reference
to the Base Rate as provided in subsection 2.2A.

“Base Rate Margin” means the margin over the Base Rate used in determining the
rate of interest of Base Rate Loans pursuant to subsection 2.2A.

“BNP Paribas” has the meaning assigned to that term in the introduction to this
Agreement.

“Budget” means a monthly budget and cash forecast delivered by Company to the
Administrative Agent (in form and substance reasonably satisfactory to the
Administrative Agent).

“Business Day” means any day excluding Saturday, Sunday and any day which is a
legal holiday under the laws of the State of New York or is a day on which
banking institutions located in such state are authorized or required by law or
other governmental action to close, and (ii) with respect to all notices,
determinations, fundings and payments in connection with LIBOR or any LIBOR
Loans, any day that is a Business Day described in clause (i) above that is also
a day for trading by and between banks in Dollar deposits in the London
interbank market.

“Capital Lease”, as applied to any Person, means any lease of any property
(whether real or personal) by that Person as lessee that, in conformity with
GAAP, is accounted for as a capital lease on the balance sheet of that Person.

“Capital Stock” means the capital stock of or other equity interests of a
Person.

“Carve-Out” has the meaning assigned in subsection 2.10.

“Carve-Out Trigger Notice” has the meaning assigned in subsection 2.10.

“Cases” means the cases of Company and the Guarantors currently pending under
Chapter 11 of the Bankruptcy Code in the Bankruptcy Court.

“Cash” means money, currency or a credit balance in a Deposit Account.

 

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“Cash Equivalents” means, as at any date of determination, (i) marketable
securities (a) issued or directly and unconditionally guaranteed as to interest
and principal by the United States Government or (b) issued by any agency of the
United States the obligations of which are backed by the full faith and credit
of the United States, in each case maturing within one year after such date;
(ii) marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof, in each case maturing within one year after such date
and having, at the time of the acquisition thereof, the highest rating
obtainable from either S&P or Moody’s; (iii) commercial paper maturing no more
than one year from the date of creation thereof and having, at the time of the
acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
Moody’s, or, in the case of a Foreign Subsidiary, reasonably equivalent ratings
of another internationally recognized credit rating agency; (iv) certificates of
deposit or bankers’ acceptances maturing within one year after such date and
issued or accepted by any Lender or by any commercial bank organized under the
laws of the United States of America or any state thereof or the District of
Columbia that (a) is at least “adequately capitalized” (as defined in the
regulations of its primary Federal banking regulator) and (b) has Tier 1 capital
(as defined in such regulations) of not less than $100,000,000; (v) shares of
any money market mutual fund that (a) has at least 95% of its assets invested
continuously in the types of investments referred to in clauses (i) and
(ii) above, (b) has net assets of not less than $500,000,000, and (c) has the
highest rating obtainable from either S&P or Moody’s, and (vi) in the case of a
Foreign Subsidiary, obligations issued by, or unconditionally guaranteed by, the
national government of the country in which such Foreign Subsidiary is
incorporated, or issued by any agency thereof, and backed by the full faith and
credit or such national government maturing within 180 days from the date of
acquisition thereof.

“Change in Control” means any of the following:

(i) any Person or group (as such term is used in section 13(d) of the Exchange
Act) of Persons (other than Holdings, a Permitted Holder and any entity formed
by a Permitted Holder solely for the purpose of owning Capital Stock of
Holdings) shall become the beneficial owner, directly or indirectly (with
beneficial ownership being as defined and calculated as set forth in Rules
13(d)-3 and 13(d)-5 under the Exchange Act), of shares representing more than
50% of the Capital Stock (measured by voting power rather than number of shares)
that is at the time entitled to vote for the election of the Board of Directors
of Holdings or Company; or

(ii) the failure at any time of Holdings to legally and beneficially own and
control 100% of the issued and outstanding shares of capital stock of Company or
the failure at any time of Holdings to have the ability to elect all of the
Governing Body of Company.

As used herein, the term “beneficially own” or “beneficial ownership” shall have
the meaning set forth in clause (i) above.

“Closing Date” means the date on which the initial Loans are made.

 

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“Collateral” means, collectively, all of the real and personal property
(including Capital Stock) in which Liens are purported to be granted pursuant to
the Collateral Documents and/or the Orders as security for the Obligations.

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

“Collateral Documents” means the Security Agreement, the Foreign Pledges
Agreements, each Control Agreement and all other instruments or documents
delivered by any Loan Party pursuant to this Agreement or any of the other Loan
Documents in order to grant to Administrative Agent, on behalf of Lenders, a
Lien on any real, personal or mixed property of that Loan Party as security for
the Obligations.

“Commercial Letter of Credit” means any letter of credit or similar instrument
issued for the purpose of providing the primary payment mechanism in connection
with the purchase of any materials, goods or services.

“Commitments” means the commitments of Lenders to make Loans as set forth in
subsections 2.1A and 3.3.

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

“Compliance Certificate” means a certificate substantially in the form of
Exhibit VI annexed hereto.

“Consolidated Capital Expenditures” means, for any period, the sum of the
aggregate of all expenditures (whether paid in cash or other consideration or
accrued as a liability and including that portion of Capital Leases which is
capitalized in such period on the consolidated balance sheet of Company and its
Subsidiaries) by Company and its Subsidiaries during that period that, in
conformity with GAAP, are included in “additions to property, plant or
equipment” or comparable items reflected in the consolidated statement of cash
flows of Company and its Subsidiaries. For purposes of this definition, the
purchase price of fixed assets that (a) are purchased simultaneously with the
trade-in of fixed assets, or (b) are purchased in accordance with subsection
6.4C within 90 days of receipt of Net Insurance/Condemnation Proceeds, shall be
included in Consolidated Capital Expenditures only to the extent of the gross
amount of such purchase price less the credit granted by the seller of such
fixed assets for the fixed-assets being traded in at such time or the amount of
such Net Insurance/Condemnation Proceeds applied to the purchase of such fixed
assets, as the case may be.

“Consolidated Domestic EBITDA” has the same meaning as Consolidated EBITDA for
any period, provided that, in the determination thereof, all references to
“Company and its Subsidiaries” in the definition of Consolidated EBITDA and each
definition, directly or indirectly, utilized in the determination thereof shall
be a reference to “Company and its Domestic Subsidiaries” for the purposes of
determining Consolidated Domestic EBITDA.

 

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“Consolidated EBITDA” means, for any period, the sum, without duplication, of
the amounts for such period of (i) Consolidated Net Income, (ii) Consolidated
Interest Expense, (iii) provisions for taxes based on income, (iv) total
depreciation expense, (v) total amortization expense, (vi) Restructuring
Expenses and (vii) other non-cash items (other than any such non-cash item to
the extent it represents an accrual of or reserve for cash expenditures in any
future period) including the write up or write down of assets (excluding
inventory), but only, in the case of clauses (ii)-(vi), to the extent deducted
in the calculation of Consolidated Net Income, less non-cash items added in the
calculation of Consolidated Net Income (other than any such non-cash item to the
extent it will result in the receipt of cash payments in any future period), all
of the foregoing as determined on a consolidated basis for Company and its
Subsidiaries in conformity with GAAP.

“Consolidated Interest Expense” means, for any period, total interest expense
(including that portion attributable to Capital Leases in accordance with GAAP
and capitalized interest) of Company and its Subsidiaries on a consolidated
basis with respect to all outstanding Indebtedness of Company and its
Subsidiaries, including all commissions, discounts and other fees and charges
owed with respect to letters of credit and bankers’ acceptance financing, net
costs under Interest Rate Agreements and amounts referred to in subsection 2.3
payable to Administrative Agent and Lenders that are considered interest expense
in accordance with GAAP.

“Consolidated Net Income” means, for any period, the net income (or loss) of
Company and its Subsidiaries on a consolidated basis for such period taken as a
single accounting period determined in conformity with GAAP; provided that there
shall be excluded (i) the income (or loss) of any Person (other than a
Subsidiary of Company) in which any other Person (other than Company or any of
its Subsidiaries) has a joint interest, except to the extent of the amount of
dividends or other distributions actually paid to Company or any of its
Subsidiaries by such Person during such period, (ii) the income (or loss) of any
Person accrued prior to the date it becomes a Subsidiary of Company or is merged
into or consolidated with Company or any of its Subsidiaries or that Person’s
assets are acquired by Company or any of its Subsidiaries, (iii) the income of
any Subsidiary of Company to the extent that the declaration or payment of
dividends or similar distributions by that Subsidiary of that income is not at
the time permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary, (iv) any after-tax gains or losses attributable
to asset sales or returned surplus assets of any Pension Plan and (v) the impact
of currency translation gains and losses and mark-to-market gains and losses on
any Hedge Agreement.

“Contingent Obligation”, as applied to any Person, means any direct or indirect
liability, contingent or otherwise, of that Person (but without duplication)
(i) with respect to any Indebtedness, lease, dividend or other obligation of
another if the primary purpose or intent thereof by the Person incurring the
Contingent Obligation is to provide assurance to the obligee of such obligation
of another that such obligation of another will be paid or discharged, or that
any agreements relating thereto will be complied with, or that the holders of
such obligation will be protected (in whole or in part) against loss in respect
thereof, (ii) with respect to any letter of credit issued for the account of
that Person or as to which that Person is otherwise liable for

 

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reimbursement of drawings, or (iii) under Hedge Agreements. Contingent
Obligations shall include (a) the direct or indirect guaranty, endorsement
(otherwise than for collection or deposit in the ordinary course of business),
co-making, discounting with recourse or sale with recourse by such Person of the
obligation of another, (b) the obligation to make take-or-pay or similar
payments if required regardless of non-performance by any other party or parties
to an agreement, and (c) any liability of such Person for the obligation of
another through any agreement (contingent or otherwise) (1) to purchase,
repurchase or otherwise acquire such obligation or any security therefor, or to
provide funds for the payment or discharge of such obligation (whether in the
form of loans, advances, stock purchases, capital contributions or otherwise) or
(2) to maintain the solvency or any balance sheet item, level of income or
financial condition of another if, in the case of any agreement described under
subclauses (1) or (2) of this sentence, the primary purpose or intent thereof is
as described in the preceding sentence. The amount of any Contingent Obligation
shall be equal to the amount of the obligation so guaranteed or otherwise
supported or, if less, the amount to which such Contingent Obligation is
specifically limited.

“Contractual Obligation” as applied to any Person, means any provision of any
Security issued by that Person or of any material indenture, mortgage, deed of
trust, contract, undertaking, agreement or other instrument to which that Person
is a party or by which it or any of its properties is bound or to which it or
any of its properties is subject.

“Control Agreement” means a control agreement, in form and substance
satisfactory to the Administrative Agent, among a Loan Party, a bank or
financial intermediary at which any Loan Party maintains any Deposit Account or
Securities Account, and the Administrative Agent.

“Credit Rating” means a credit rating from Moody’s or S&P in respect of the
credit facility provided hereunder.

“Currency Agreement” means any foreign exchange contract, currency swap
agreement, futures contract, option contract, synthetic cap or other similar
agreement or arrangement, in each case to which Company or any of its
Subsidiaries is a party.

“Deposit Account” means a demand, time, savings, passbook or similar account
maintained with a Person engaged in the business of banking, including a savings
bank, savings and loan association, credit union or trust company.

“DIP Fee Letter” means that certain Fee Letter dated January 23, 2007 between
the Company and each Underwriter.

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

“Domestic Subsidiary” means any Subsidiary of Company that is incorporated or
organized under the laws of the United States of America, any state thereof or
in the District of Columbia.

 

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“Eligible Assignee” means (i) any Lender, any Affiliate of any Lender and any
Approved Fund of any Lender; and (ii) (a) a commercial bank organized under the
laws of the United States or any state thereof; (b) a savings and loan
association or savings bank organized under the laws of the United States or any
state thereof; (c) a commercial bank organized under the laws of any other
country or a political subdivision thereof; provided that (1) such bank is
acting through a branch or agency located in the United States or (2) such bank
is organized under the laws of a country that is a member of the Organization
for Economic Cooperation and Development or a political subdivision of such
country; and (d) any other entity that is an “accredited investor” (as defined
in Regulation D under the Securities Act) that extends credit or buys loans as
one of its businesses including insurance companies, mutual funds and lease
financing companies; provided that neither Company nor any Affiliate of Company
shall be an Eligible Assignee.

“Employee Benefit Plan” means any “employee benefit plan” as defined in
Section 3(3) of ERISA which is or was maintained or contributed to by Company,
any of its Subsidiaries or any of their respective ERISA Affiliates and any
Former ERISA Affiliate Plan of Company, any of its Subsidiaries or ERISA
Affiliates.

“Environmental Claim” means any notice of investigation, notice of violation,
claim, action, suit, proceeding, demand, finding, abatement order or other order
or directive (conditional or otherwise), by any Government Authority or any
other Person, arising (i) pursuant to or in connection with any actual or
alleged violation of any Environmental Law, (ii) in connection with any
Hazardous Materials or any actual or alleged Hazardous Materials Activity, or
(iii) in connection with any actual or alleged damage, injury, threat or harm to
health, safety, natural resources or the environment.

“Environmental Laws” means any common law relating to environmental matters and
all current or future statutes, ordinances, orders, rules, regulations, binding
guidance documents, judgments, Governmental Authorizations, or any other binding
requirements of any Government Authority relating to (i) environmental matters,
including those relating to any Hazardous Materials Activity, (ii) the
generation, use, storage, transportation or disposal of Hazardous Materials, or
(iii) occupational safety and health, industrial hygiene, land use or the
protection of the environment, natural resources or human, plant or animal
health, safety or welfare, in each case in any manner applicable to Company or
any of its Subsidiaries or any Facility.

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

“ERISA Affiliate”, as applied to any Person, means (i) any corporation that is a
member of a controlled group of corporations within the meaning of
Section 414(b) of the Internal Revenue Code of which that Person is a member;
(ii) any trade or business (whether or not incorporated) that is a member of a
group of trades or businesses under common control within the meaning of
Section 414(c) of the Internal Revenue Code of which that Person is a member;
and (iii) any member of an affiliated service group within the meaning of
Section 414(m) or (o) of the Internal Revenue Code of which that Person, any
corporation described in clause (i) above or any trade or business described in
clause (ii) above is a member.

 

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“ERISA Event” means (i) a “reportable event” within the meaning of Section 4043
of ERISA and the regulations issued thereunder with respect to any Pension Plan
(excluding those for which the provision for 30-day notice to the PBGC has been
waived by regulation); (ii) the failure to meet the minimum funding standard of
Section 412 of the Internal Revenue Code with respect to any Pension Plan
(whether or not waived in accordance with Section 412(d) of the Internal Revenue
Code) or the failure to make by its due date a required installment under
Section 412(m) of the Internal Revenue Code with respect to any Pension Plan or
the failure to make any required contribution to a Multiemployer Plan; (iii) the
provision by the administrator of any Pension Plan pursuant to
Section 4041(a)(2) of ERISA of a notice of intent to terminate such plan in a
distress termination described in Section 4041(c) of ERISA; (iv) the withdrawal
by Company, any of its Subsidiaries or any of their respective ERISA Affiliates
from any Pension Plan with two or more contributing sponsors or the termination
of any such Pension Plan resulting in liability pursuant to Section 4063 or 4064
of ERISA; (v) the institution by the PBGC of proceedings to terminate any
Pension Plan, or the occurrence of any event or condition which might constitute
grounds under ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan; (vi) the imposition of liability on Company, any
of its Subsidiaries or any of their respective ERISA Affiliates pursuant to
Section 4062(e) or 4069 of ERISA or by reason of the application of
Section 4212(c) of ERISA; (vii) the withdrawal of Company, any of its
Subsidiaries or any of their respective ERISA Affiliates in a complete or
partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from
any Multiemployer Plan if there is any potential liability therefor, or the
receipt by Company, any of its Subsidiaries or any of their respective ERISA
Affiliates of notice from any Multiemployer Plan that it is in reorganization or
insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to
terminate or has terminated under Section 4041A or 4042 of ERISA; (viii) the
assertion of a material claim (other than routine claims for benefits) against
any Employee Benefit Plan other than a Multiemployer Plan or the assets thereof,
or against Company, any of its Subsidiaries or any of their respective ERISA
Affiliates in connection with any Employee Benefit Plan; (ix) receipt from the
Internal Revenue Service of notice of the failure of any Pension Plan (or any
other Employee Benefit Plan intended to be qualified under Section 401(a) of the
Internal Revenue Code) to qualify under Section 401(a) of the Internal Revenue
Code, or the failure of any trust forming part of any Pension Plan to qualify
for exemption from taxation under Section 501(a) of the Internal Revenue Code;
or (x) the imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or pursuant to ERISA with respect to any Pension Plan.

“Eurodollar Reserve Percentage” means the reserve percentage (expressed as a
decimal, rounded upward, if necessary, to the nearest 1/100 of 1%) in effect on
the date LIBOR for such Interest Period is determined (whether or not applicable
to any Lender) under regulations issued from time to time by the Federal Reserve
Board for determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect to Eurocurrency
funding (currently referred to as “Eurocurrency liabilities”) having a term
comparable to such Interest Period, which for avoidance of doubt, as of the
Closing Date, is zero.

 

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“Event of Default” means each of the events set forth in Section 8.

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time
to time, and any successor statute.

“Existing Liens” has the meaning assigned in the recitals hereto.

“Facilities” means any and all real property (including all buildings, fixtures
or other improvements located thereon) now, hereafter or heretofore owned,
leased, or operated by Holdings, Company, their Subsidiaries or any of their
respective predecessors or Affiliates.

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

“Filing Date” has the meaning assigned in the recitals hereto.

“Final Order” has the meaning assigned in subsection 4.2(viii).

“First Priority” means, with respect to any Lien purported to be created in any
Collateral pursuant to any Collateral Document, that (i) such Lien is perfected
and has priority over any other Lien on such Collateral (other than Liens
permitted pursuant to subsection 7.2A(i) and (ii) and other than Existing Liens
that do not constitute Primed Liens) and (ii) such Lien is the only Lien (other
than Liens permitted pursuant to subsection 7.2A) to which such Collateral is
subject.

“Fiscal Quarter” means successive 13-week periods (each such 13-week period to
begin on a Monday and end on a Sunday) of Company and its Subsidiaries of any
Fiscal Year.

“Fiscal Year” means the fiscal year of Company and its Subsidiaries ending on
the date in which the Company’s fourth Fiscal Quarter ends.

“Foreign Plan” means any employee benefit plan maintained by Company or any of
its Subsidiaries that is mandated or governed by any law, rule or regulation of
any Government Authority other than the United States, any state thereof or any
other political subdivision thereof.

“Foreign Pledge Agreement” means each pledge agreement or similar instrument
governed by the laws of a country other than the United States, executed from
time to

 

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time after the Closing Date in accordance with subsections 6.8 or 6.10A by
Company or any Domestic Subsidiary that owns Capital Stock of one or more
Foreign Subsidiaries organized in such country, in form and substance
satisfactory to Administrative Agent.

“Foreign Subsidiary” means any Subsidiary of Company that is not a Domestic
Subsidiary.

“Former ERISA Affiliate Plan” means any “employee benefit plan” as defined in
Section 3(3) of ERISA which is or was maintained or contributed to by any former
ERISA Affiliate of a Person or any of its Subsidiaries for which such Person or
such Subsidiary could be liable under the Internal Revenue Code or ERISA.

“Fund” means any Person (other than a natural Person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.

“Funding and Payment Office” means (i) the office of Administrative Agent and
Swing Line Lender located at 919 Third Avenue, New York, New York 10022 or
(ii) such other office of Administrative Agent and Swing Line Lender as may from
time to time hereafter be designated as such in a written notice delivered by
Administrative Agent and Swing Line Lender to Company and each Lender.

“Funding Date” means the date of the funding of a Loan, or the issuance of any
Letter of Credit.

“GAAP” means, subject to the limitations on the application thereof set forth in
subsection 1.2, generally accepted accounting principles set forth in opinions
and pronouncements of the Accounting Principles Board of the American Institute
of Certified Public Accountants and statements and pronouncements of the
Financial Accounting Standards Board or in such other statements by such other
entity as may be approved by a significant segment of the accounting profession,
in each case as the same are applicable to the circumstances as of the date of
determination.

“Governing Body” means the board of directors or other body having the power to
direct or cause the direction of the management and policies of a Person that is
a corporation, partnership, trust or limited liability company.

“Government Authority” means any political subdivision or department thereof,
any other governmental or regulatory body, commission, central bank, board,
bureau, organ or instrumentality or any court, in each case whether federal,
state, local or foreign (including supra-national bodies such as the European
Union or the European Central Bank).

“Governmental Authorization” means any approval, certificate, franchise, permit,
license, registration, authorization, plan, directive, consent, order or consent
decree of or from, or notice to, any Government Authority.

 

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“Guaranties” means the Holdings Guaranty and the Subsidiary Guaranty.

“Guarantors” means Holdings and the Subsidiary Guarantors.

“Hazardous Materials” means (i) any chemical, material or substance at any time
defined under any applicable Environmental Law as or included in the definition
of “hazardous substances”, “hazardous wastes”, “hazardous materials”, “extremely
hazardous waste”, “acutely hazardous waste”, “radioactive waste”, “biohazardous
waste”, “pollutant”, “toxic pollutant”, “contaminant”, “restricted hazardous
waste”, “infectious waste”, “toxic substances”, or any other similar term or
expression intended to define, list or classify substances by reason of
properties harmful to health, safety or the indoor or outdoor environment
(including harmful properties such as ignitability, corrosivity, reactivity,
carcinogenicity, toxicity, reproductive toxicity, “TCLP toxicity” or “EP
toxicity” or words of similar import under any applicable Environmental Laws);
(ii) any oil, petroleum, petroleum fraction or petroleum derived substance;
(iii) any drilling fluids, produced waters and other wastes associated with the
exploration, development or production of crude oil, natural gas or geothermal
resources; (iv) any flammable substances or explosives; (v) any radioactive
materials; (vi) any asbestos-containing materials; (vii) urea formaldehyde foam
insulation; (viii) electrical equipment which contains any oil or dielectric
fluid containing polychlorinated biphenyls; (ix) pesticides; and (x) any other
chemical, material or substance, exposure to which is prohibited, limited or
regulated by any Government Authority under any applicable Environmental Law
because it may or could pose a hazard to the health and safety of the owners,
occupants or any Persons in the vicinity of any Facility or to the indoor or
outdoor environment.

“Hazardous Materials Activity” means any past, current, proposed or threatened
activity, event or occurrence involving any Hazardous Materials, including the
use, manufacture, possession, storage, holding, presence, existence, location,
Release, threatened Release, discharge, placement, generation, transportation,
processing, construction, treatment, abatement, removal, remediation, disposal,
disposition or handling of any Hazardous Materials, and any corrective action or
response action with respect to any of the foregoing.

“Hedge Agreement” means an Interest Rate Agreement or a Currency Agreement
designed to hedge against fluctuations in interest rates or currency values,
respectively and is not for speculative purposes.

“Historical Financial Statements” means (i) the audited financial statements of
Company for its Fiscal Years 2005 and 2006, consisting of balance sheets and the
related combined statements of operations and cash flows for such Fiscal Years
and (ii) the unaudited financial statements of Company as at September 30, 2007,
consisting of a balance sheet and the related combined statements of operations
and cash flows for the nine-month period ending on such date.

“Holdings” has the meaning assigned to such term in the recitals.

“Holdings Guaranty” means the Holdings Guaranty executed and delivered by
Holdings on the Closing Date, substantially in the form of Exhibit XI annexed
hereto.

 

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“Indebtedness”, as applied to any Person, means the principal amount of (i) all
indebtedness for borrowed money, (ii) that portion of obligations with respect
to Capital Leases that is properly classified as a liability on a balance sheet
in conformity with GAAP, (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed money,
(iv) any obligation owed for all or any part of the deferred purchase price of
property or services (excluding any such obligations incurred under ERISA),
which purchase price is (a) due more than six months from the date of incurrence
of the obligation in respect thereof or (b) evidenced by a note or similar
written instrument, (v) Synthetic Lease Obligations, and (vi) all indebtedness
secured by any Lien on any property or asset owned or held by that Person
regardless of whether the indebtedness secured thereby shall have been assumed
by that Person or is nonrecourse to the credit of that Person.

“Indemnified Liabilities” has the meaning assigned to that term in subsection
10.3.

“Indemnitee” has the meaning assigned to that term in subsection 10.3.

“Intellectual Property” means all patents, trademarks, tradenames, copyrights,
technology, software, know-how and processes used in or necessary for the
conduct of the business of Company and its Subsidiaries.

“Interest Payment Date” means with respect to any Base Rate Loan and any LIBOR
Loan, the 15th day of each month, commencing on the first such date to occur
after the Closing Date.

“Interest Period” has the meaning assigned to that term in subsection 2.2B.

“Interest Rate Agreement” means any interest rate swap agreement, interest rate
cap agreement, interest rate collar agreement or other similar agreement or
arrangement to which Company or any of its Subsidiaries is a party.

“Interest Rate Determination Date”, with respect to any Interest Period, means
the second Business Day prior to the first day of such Interest Period.

“Interim Order” has the meaning assigned to that term in subsection 4.1O.

“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended to
the date hereof and from time to time hereafter, and any successor statute.

“Investment” means (i) any direct or indirect purchase or other acquisition by
Holdings or any of its Subsidiaries of, or of a beneficial interest in, any
Securities of any other Person (including any Subsidiary of Holdings), (ii) any
direct or indirect redemption, retirement, purchase or other acquisition for
value, by any Subsidiary of Holdings from any Person other than Holdings or any
of its Subsidiaries, of any equity Securities of such Subsidiary, (iii) any
direct or indirect loan, advance (other than advances to employees for moving,
entertainment and travel expenses, drawing accounts and similar expenditures in
the ordinary course of business) or

 

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capital contribution by Holdings or any of its Subsidiaries to any other Person,
including all indebtedness and accounts receivable from that other Person that
are not current assets or did not arise from sales or services provided to that
other Person in the ordinary course of business, or (iv) Interest Rate
Agreements or Currency Agreements not constituting Hedge Agreements. The amount
of any Investment shall be the original cost of such Investment plus the cost of
all additions thereto, without any adjustments for increases or decreases in
value, or write-ups, write-downs or write-offs with respect to such Investment
(other than adjustments for the repayment of, or the refund of capital with
respect to, the original principal amount of any such Investment).

“IP Collateral” means, collectively, the Intellectual Property that constitutes
Collateral under the Security Agreement.

“IP Filing Office” means the United States Patent and Trademark Office, the
United States Copyright Office or any successor or substitute office in which
filings are necessary or, in the opinion of Administrative Agent, desirable in
order to create or perfect Liens on any IP Collateral.

“Issuing Lender”, with respect to any Letter of Credit, means the Revolving
Lender that agrees or is otherwise obligated to issue such Letter of Credit,
determined as provided in subsection 3.1B(ii).

“Joint Venture” means a joint venture, partnership or other similar arrangement,
whether in corporate, partnership or other legal form.

“Lead Arranger” means BNP Paribas Securities Corp.

“Lender” and “Lenders” means the Persons identified as “Lenders” and listed on
the signature pages of this Agreement, together with their successors and
permitted assigns pursuant to subsection 10.1, and the term “Lenders” shall
include Swing Line Lender unless the context otherwise requires; provided that
the term “Lenders”, when used in the context of a particular Commitment, shall
mean Lenders having that Commitment.

“Letter of Credit” or “Letters of Credit” means Standby Letters of Credit issued
or to be issued by Issuing Lenders for the account of Company pursuant to
subsection 3.1.

“Letter of Credit Usage” means, as at any date of determination, the sum of
(i) the maximum aggregate amount which is or at any time thereafter may become
available for drawing under all Letters of Credit then outstanding plus (ii) the
aggregate amount of all drawings under Letters of Credit honored by Issuing
Lenders and not theretofore reimbursed out of the proceeds of Revolving Loans
pursuant to subsection 3.3B or otherwise reimbursed by Company.

“LIBOR” means, for any Interest Rate Determination Date with respect to an
Interest Period for a LIBOR Loan, the London interbank offered rate, rounded
upward, if necessary, to the nearest 1/100 of 1%, equal to the offered rate for
deposits in Dollars for a

 

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period equal to such Interest Period, commencing on the first day of such
Interest Period, which appears on Telerate Page 3750 (or such other page as may
replace Telerate Page 3750 on that service or any successor service for the
purpose of displaying London interbank offered rates of major banks) as of 11:00
A.M. (London time), on such Interest Rate Determination Date. If the LIBOR rate
for an Interest Period cannot be determined pursuant to the preceding sentence,
then the LIBOR rate for such Interest Period shall be determined on the basis of
the rates at which deposits in Dollars are offered to BNP Paribas at
approximately 11:00 A.M. (London time) on such Interest Rate Determination Date,
and on an amount that is approximately equal to the principal amount of the
LIBOR Loans to which such Interest Period is applicable. Administrative Agent
will request the principal London office of BNP Paribas to provide a quotation
of its rate.

“LIBOR Loans” means Loans bearing interest at rates determined by reference to
Adjusted LIBOR as provided in subsection 2.2A.

“LIBOR Margin” means the margin over Adjusted LIBOR used in determining the rate
of interest of LIBOR Loans pursuant to subsection 2.2A.

“Lien” means any lien, mortgage, pledge, assignment, security interest, charge
or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof, and any agreement to give
any security interest) and any option, trust or other preferential arrangement
having the practical effect of any of the foregoing.

“Liquidity” means, as of any date of determination, an amount equal to the sum
of (a) Cash and Cash Equivalents held by Company and its Subsidiaries in any
Deposit Account or Securities Account subject to a perfected, first priority
Lien in favor of the Administrative Agent and, from and after the 20th day
following the Closing Date, a Control Agreement among such Loan Party, the
Administrative Agent and the bank or financial intermediary at which such
account is maintained or held with the Administrative Agent, and (b) the
unutilized amount of Revolving Loan Commitments available to be drawn on such
date by Company (with satisfaction of the applicable conditions precedent to
such extension of credit to be tested as of such date); provided that
(x) amounts held in payroll, tax, trust and similar accounts or (y) amounts
pledged to Persons on a first priority basis (other than the Administrative
Agent) shall be excluded in calculating Liquidity.

“Loan” or “Loans” means one or more of the Loans made by Lenders to Company
pursuant to subsection 2.1A.

“Loan Documents” means this Agreement, the Notes, the Letters of Credit (and any
applications for, or reimbursement agreements or other documents or certificates
executed by Company in favor of an Issuing Lender relating to, the Letters of
Credit), the Guaranties, the Collateral Documents, and all amendments, waivers
and consents relating thereto.

“Loan Party” means each of Holdings, Company and any of Company’s Subsidiaries
from time to time executing a Loan Document, and “Loan Parties” means all such
Persons, collectively.

 

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“Margin Stock” has the meaning assigned to that term in Regulation U of the
Board of Governors of the Federal Reserve System as in effect from time to time.

“Material Adverse Effect” means any of (i) a material adverse effect upon the
business, operations, properties, assets, condition (financial or otherwise),
liabilities (whether contractual, environmental or otherwise) or prospects of
Company and its Subsidiaries taken as a whole (other than any change of the type
that customarily occurs as a result of the commencement of a proceeding under
chapter 11 of the Bankruptcy Code or constriction of credit terms from vendors),
or (ii) the impairment of the ability of the Loan Parties, taken as a whole, to
perform the Obligations in any material way, or (iii) the impairment of the
ability of Administrative Agent or Lenders to enforce the Obligations.

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

“Multiemployer Plan” means any Employee Benefit Plan that is a “multiemployer
plan” as defined in Section 3(37) of ERISA.

“Net Asset Sale Proceeds”, with respect to any Asset Sale, means Cash payments
(including any Cash received by way of deferred payment pursuant to, or by
monetization of, a note receivable or otherwise, but only as and when so
received) received from such Asset Sale, net of any bona fide direct costs
(including professional fees and costs) incurred in connection with such Asset
Sale, including (i) income taxes reasonably estimated to be actually payable
within two years of the date of such Asset Sale as a result of any gain
recognized in connection with such Asset Sale, and (ii) payment of the
outstanding principal amount of, premium or penalty, if any, and interest on any
Indebtedness (other than the Loans) that is (a) secured by a Lien on the stock
or assets sold and that is required to be repaid under the terms thereof as a
result of such Asset Sale and, in the case of any prepetition Indebtedness, the
terms of any Bankruptcy Court order authorizing such sale and (b) actually paid
within 30 days of receipt of such cash payment to a Person that is not an
Affiliate of any Loan Party or of any Affiliate of a Loan Party; provided, that
Net Asset Sale Proceeds shall include any cash payments received from any Asset
Sale by a Foreign Subsidiary unless the repatriation of such proceeds (by reason
of a repayment of an intercompany note or otherwise) to the United States would
result in an unacceptable tax liability to the Company, as determined by the
Administrative Agent, after consultation with the Company; provided, further
that Net Asset Sale Proceeds shall not include 50% of sales proceeds from the
sale of the Dalton warehouse so long as such Net Asset Sale Proceeds are
temporarily applied to the outstanding principal amount of the Loan or are kept
in the Collateral Account and applied to Capital Expenditures permitted
hereunder within 90 days of receipt. For the avoidance of doubt, payments for
services rendered by Company and/or its Subsidiaries to the acquiror in
connection with any Asset Sale under a transitional services agreement or other
similar bona fide agreement not in excess of reasonable consideration for the
services rendered are not Net Asset Sale Proceeds.

“Net Insurance/Condemnation Proceeds” means any Cash payments or proceeds
received by Holdings or any of its Subsidiaries (i) under any business
interruption or casualty insurance policy in respect of a covered loss
thereunder or (ii) as a result of the taking of any assets of Holdings or any of
its Subsidiaries by any Person pursuant to the power of eminent

 

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domain, condemnation or otherwise, or pursuant to a sale of any such assets to a
purchaser with such power under threat of such a taking, in each case net of any
actual and reasonable documented costs incurred by Holdings or any of its
Subsidiaries in connection with the adjustment or settlement of any claims of
Holdings or such Subsidiary in respect thereof; provided, however, that Net
Insurance/Condemnation Proceeds shall include any cash payments received by a
Foreign Subsidiary unless the repatriation of such proceeds (by reason of a
repayment of an intercompany note or otherwise) to the United States would
result in an unacceptable tax liability to the Company, as determined by the
Administrative Agent, after consultation with the Company.

“Net Securities Proceeds” means the cash proceeds (net of underwriting discounts
and commissions and other reasonable costs and expenses associated therewith,
including reasonable legal fees and expenses) from the (i) issuance of Capital
Stock of or incurrence of Indebtedness by Holdings or any of its Subsidiaries
and (ii) capital contributions made by a holder of Capital Stock of Holdings.

“Non-US Lender” means a Lender that is organized under the laws of any
jurisdiction other than the United States or any state or other political
subdivision thereof.

“Notes” means one or more of the Revolving Notes or Swing Line Note or any
combination thereof.

“Notice of Borrowing” means a notice substantially in the form of Exhibit I
annexed hereto.

“Notice of Conversion/Continuation” means a notice substantially in the form of
Exhibit II annexed hereto.

“Obligations” means all Loans, advances, debts, liabilities and monetary
obligations owing to any Agent, any Lender, any Issuing Lender, or any of their
respective successors and assigns, of any kind or nature, present or future,
arising under this Agreement or under the Notes or under any other Loan
Document, whether or not for the payment of money, whether arising by reason of
an extension of credit, opening or amendment of a letter of credit (or payment
of any draft drawn thereunder), loan, guaranty, indemnification, or in any other
manner, whether direct or indirect (including those acquired by assignment),
absolute or contingent, due or to become due, now existing or hereafter arising
and however acquired. The term includes, without limitation, all interest
(whether or not such interest would be an allowed claim in a bankruptcy or
similar proceeding against Company or any Guarantor), charges, expenses, fees,
reasonable attorneys’ fees and disbursements and paralegals’ fees, and any other
sums chargeable to Company or any Guarantor under this Agreement or any other
Loan Document.

“Officer” means the president, chief executive officer, a vice president, chief
financial officer, treasurer, general partner (if an individual), managing
member (if an individual) or other individual appointed by the Governing Body or
the Organizational Documents of a corporation, partnership, trust or limited
liability company to serve in a similar capacity as the foregoing.

 

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“Officer’s Certificate”, as applied to any Person that is a corporation,
partnership, trust or limited liability company, means a certificate executed on
behalf of such Person by one or more Officers of such Person or one or more
Officers of a general partner or a managing member if such general partner or
managing member is a corporation, partnership, trust or limited liability
company.

“Operating Lease”, as applied to any Person, means any lease (including leases
that may be terminated by the lessee at any time) of any property (whether real,
personal or mixed) that is not a Capital Lease other than any such lease under
which that Person is the lessor.

“Orders” means the collective reference to the Interim Order and the Final
Order.

“Organizational Documents” means the documents (including bylaws, if applicable)
pursuant to which a Person that is a corporation, partnership, trust or limited
liability company is organized.

“Participant” means a purchaser of a participation in the rights and obligations
under this Agreement pursuant to subsection 10.1C.

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

“Pension Plan” means any Employee Benefit Plan, other than a Multiemployer Plan,
that is subject to Section 412 of the Internal Revenue Code or Section 302 of
ERISA, and, for purposes of subsection 8.9, any Foreign Plan.

“Permitted Encumbrances” means the following types of Liens (excluding any such
Lien imposed pursuant to Section 401(a)(29) or 412(n) of the Internal Revenue
Code or by ERISA, any such Lien imposed by a Government Authority in connection
with any Foreign Plan, any such Lien relating to or imposed in connection with
any Environmental Claim, and any such Lien expressly prohibited by any
applicable terms of any of the Collateral Documents):

(i) Liens for taxes, assessments or governmental charges or claims the payment
of which is not, at the time, required by subsection 6.3;

(ii) statutory Liens of landlords, Liens of collecting banks under the UCC on
items in the course of collection, statutory Liens and rights of set-off of
banks, statutory Liens of carriers, warehousemen, mechanics, repairmen, workmen
and materialmen, and other Liens imposed by law, in each case incurred in the
ordinary course of business (a) for amounts not yet overdue or (b) for amounts
that are overdue and that (in the case of any such amounts overdue for a period
in excess of 10 days) are being contested in good faith by appropriate
proceedings, so long as (1) such reserves or other appropriate

 

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provisions, if any, as shall be required by GAAP shall have been made for any
such contested amounts, and (2) in the case of a Lien with respect to any
portion of the Collateral, such proceedings conclusively operate to stay the
sale of any portion of the Collateral on account of such Lien;

(iii) deposits made in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other types of social
security, or to secure the performance of statutory obligations, bids, leases,
government contracts, trade contracts, appeal bonds and other similar
obligations (exclusive of obligations for the payment of borrowed money), so
long as no foreclosure, sale or similar proceedings have been commenced with
respect to any portion of the Collateral on account thereof;

(iv) any attachment or judgment Lien not constituting an Event of Default under
subsection 8.7;

(v) licenses (with respect to Intellectual Property and other property), leases
or subleases granted to third parties in accordance with any applicable terms of
the Collateral Documents and not interfering in any material respect with the
ordinary conduct of the business of Company or any of its Subsidiaries or
resulting in a material diminution in the value of the Collateral as security
for the Obligations;

(vi) easements, rights-of-way, restrictions, encroachments, and other minor
defects or irregularities in title, in each case which do not and will not
interfere in any material respect with the ordinary conduct of the business of
Company or any of its Subsidiaries or result in a material diminution in the
value of the Collateral as security for the Obligations;

(vii) any (a) interest or title of a lessor or sublessor under any lease not
prohibited by this Agreement, (b) Lien or restriction that the interest or title
of such lessor or sublessor may be subject to, or (c) subordination of the
interest of the lessee or sublessee under such lease to any Lien or restriction
referred to in the preceding clause (b), so long as the holder of such Lien or
restriction agrees to recognize the rights of such lessee or sublessee under
such lease;

(viii) Liens arising from filing UCC financing statements relating solely to
leases not prohibited by this Agreement;

(ix) Liens in favor of customs and revenue authorities arising as a matter of
law to secure payment of customs duties in connection with the importation of
goods;

(x) any zoning or similar law or right reserved to or vested in any governmental
office or agency to control or regulate the use of any real property;

(xi) Liens granted pursuant to the Collateral Documents;

 

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(xii) Liens in favor of Company or a Subsidiary Guarantor on assets of any
Subsidiary of Company;

(xiii) any interest or title of a lessor under any Capital Lease permitted
hereunder, provided that such Liens do not extend to any property or assets
which are not leased property subject to such Capital Lease;

(xiv) Liens in favor of a public utility or any municipality or governmental or
other public authority when required by such utility, municipality or authority
in connection with the ordinary course of operations of Company or its
Subsidiaries (and not securing Indebtedness for borrowed money), provided that
all such Liens only secure (a) amounts not yet overdue or (b) amounts that are
overdue and that (in the case of any such amounts overdue for a period in excess
of 10 days) are being contested in good faith by appropriate proceedings, so
long as (1) such reserves or other appropriate provisions, if any, as shall be
required by GAAP shall have been made for any such contested amounts, and (2) in
the case of a Lien with respect to any portion of the Collateral, such
proceedings conclusively operate to stay the sale of any portion of the
Collateral on account of such Lien; and

(xv) Liens securing obligations (other than obligations representing
Indebtedness for borrowed money) under operating, reciprocal easement or similar
agreements entered into in the ordinary course of business of Company and its
Subsidiaries.

“Person” means and includes natural persons, corporations, limited partnerships,
general partnerships, limited liability companies, limited liability
partnerships, joint stock companies, Joint Ventures, associations, companies,
trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and Government Authorities.

“Pledged Collateral” means the “Pledged Collateral” as defined in the Security
Agreement.

“Potential Event of Default” means a condition or event that, after notice or
lapse of time or both, would constitute an Event of Default.

“Prepetition Credit Agreement” means that certain credit agreement dated as of
January 31, 2006 among Company, the BNP Paribas, as Administrative Agent, and
the Lenders and other parties party thereto.

“Prepetition Facility” means the credit facility provided under the Prepetition
Credit Agreement and the other Loan Documents (as defined therein).

“Prepetition Payments” means any payment (by way of adequate protection or
otherwise) of principal or interest or otherwise on account of any prepetition
Indebtedness or other obligations or claims (including trade payables and
payments in respect of reclamation claims) of Holdings, the Company or any
Subsidiary Guarantor.

 

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“Primed Liens” has the meaning assigned in the recitals hereto.

“Prime Rate” means the rate that BNP Paribas in New York announces from time to
time as its prime rate, effective as of the date announced as the effective date
of any change in such prime rate. Without notice to Company or any other Person,
the Prime Rate shall change automatically from time to time as and in the amount
by which such prime rate shall fluctuate. The Prime Rate is a reference rate and
does not necessarily represent the lowest or best rate actually charged to any
customer. BNP Paribas or any other Lender may make commercial loans or other
loans at rates of interest at, above or below the Prime Rate.

“Proceedings” means any action, suit, proceeding (whether administrative,
judicial or otherwise), governmental investigation (written notice of which has
been received by Company) or arbitration.

“Propex Brazil” means Propex do Brasil Ltda., a Brazilian company.

“Propex Brazil Holdings” means Propex Fabrics Holdings do Brasil Ltda, a
Brazilian company.

“Propex Canada” means Propex Fabrics Canada, Inc., a Quebec corporation.

“Propex de Mexico” means Propex Fabrics de Mexico, S.A. de C.V. (formerly named
Amoco Fabrics & Fibers de Mexico, S.A. de C.V.), a Mexican corporation.

“Propex Germany” means Propex Fabrics GmbH (formerly named Amoco Fabrics GmbH),
a German private limited company registered with the commercial register of
Coesfeld, Germany under HRB 6118.

“Propex Hungary” means Propex Fabrics Magyarország Termelö Korlatolt Felelösségü
Tarsagag (formerly named Amoco Fabrics Magyarorszag Termelö Korlatolt
Felelösségü Tarsagag), a Hungarian corporation.

“Propex Hungary Holdings” means Propex Fabrics Magyarország Vagyonkezelo
Korlátolt Felelösségü Társaság, a Hungarian corporation.

“Propex Seller” means BP Amoco Chemical Holding Company, a Delaware corporation.

“Propex UK” means Synthetic Industries Europe Limited, a limited company
organized under the laws of England and Wales.

“Pro Rata Share” means with respect to all payments, computations and other
matters relating to the Revolving Loan Commitment or the Revolving Loans of any
Lender or any Letters of Credit issued or participations therein deemed
purchased by any Lender or any assignments of any Swing Line Loans deemed
purchased by any Lender, the percentage obtained by dividing (x) the Revolving
Loan Exposure of that Lender by (y) the aggregate Revolving Loan Exposure of all
Lenders. The initial Pro Rata Share of each Lender for purposes of the preceding
sentence is set forth opposite the name of that Lender in Schedule 2.1 annexed
hereto.

 

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“Real Property Asset” means, at any time of determination, any interest then
owned by any Loan Party (other than any Foreign Subsidiary) in any real
property.

“Refunded Swing Line Loans” has the meaning assigned to that term in subsection
2.1A(ii)(b).

“Register” has the meaning assigned to that term in subsection 2.1D.

“Regulation D” means Regulation D of the Board of Governors of the Federal
Reserve System, as in effect from time to time.

“Reimbursement Date” has the meaning assigned to that term in subsection 3.3B.

“Release” means any release, spill, emission, leaking, pumping, pouring,
injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching
or migration of Hazardous Materials into the indoor or outdoor environment
(including the abandonment or disposal of any barrels, containers or other
closed receptacles containing any Hazardous Materials), including the movement
of any Hazardous Materials through the air, soil, surface water or groundwater.

“Request for Issuance” means a request for the issuance of a Letter of Credit
substantially in the form of Exhibit III annexed hereto.

“Requisite Lenders” means Lenders having or holding more than 50% of the
aggregate Revolving Loan Exposure of all Lenders.

“Restricted Junior Payment” means (i) any dividend or other distribution, direct
or indirect, on account of any shares of any class of stock of Company now or
hereafter outstanding, except a dividend payable solely in shares of that class
of stock to the holders of that class, (ii) any redemption, retirement, sinking
fund or similar payment, purchase or other acquisition for value, direct or
indirect, of any shares of any class of stock of Holdings or Company now or
hereafter outstanding, (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of stock of Holdings or Company now or hereafter
outstanding, and (iv) any voluntary or optional payment or prepayment of
principal of, premium, if any, or redemption, purchase, retirement, defeasance
(including in-substance or legal defeasance), sinking fund or similar payment by
Holdings or Company or its Subsidiaries with respect to any Indebtedness (other
than (A) the Loans and (B) repayments of Indebtedness that is secured by a Lien
on any asset permitted to be sold hereunder to the extent that such repayment is
required under the terms of such Indebtedness and permitted under the Bankruptcy
Court order authorizing such sale).

 

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“Restructuring Expenses” means professional fees and expenses, U.S. Trustee
fees, key employee incentive payments, fees payable in connection with obtaining
Credit Ratings pursuant to Section 6.10, fees payable in connection with this
Agreement on or before the Closing Date and other extraordinary one time
expenses related to the Cases, in each case to the extent such payments are
authorized by the Bankruptcy Code or are approved by the Bankruptcy Court.

“Revolving Lender” means a Lender that has a Revolving Loan Commitment and/or
that has an outstanding Revolving Loan.

“Revolving Loan Commitment” means the commitment of a Revolving Lender to make
Revolving Loans to Company pursuant to subsection 2.1A(i), and “Revolving Loan
Commitments” means such commitments of all Revolving Lenders in the aggregate.

“Revolving Loan Commitment Amount” means, at any date, the aggregate amount of
the Revolving Loan Commitments of all Revolving Lenders.

“Revolving Loan Commitment Termination Date” means the earlier of (i) the
Scheduled Maturity Date, (ii) the date that the substantial consummation (as
defined in Section 1101 of the Bankruptcy Code and which for purposes hereof
shall be no later than Scheduled Maturity Date) of a plan of reorganization
which pays all Obligations in full in cash is confirmed pursuant to an order
entered by the Bankruptcy Court and (iii) the date on which the Revolving Loans
have been accelerated and/or the Revolving Loan Commitments have been terminated
pursuant to Section 9 hereof.

“Revolving Loan Exposure”, with respect to any Revolving Lender, means, as of
any date of determination (i) prior to the termination of the Revolving Loan
Commitments, the amount of that Lender’s Revolving Loan Commitment, and
(ii) after the termination of the Revolving Loan Commitments, the sum of (a) the
aggregate outstanding principal amount of the Revolving Loans of that Lender
plus (b) in the event that Lender is an Issuing Lender, the aggregate Letter of
Credit Usage in respect of all Letters of Credit issued by that Lender (in each
case net of any participations purchased by other Lenders in such Letters of
Credit or in any unreimbursed drawings thereunder) plus (c) the aggregate amount
of all participations purchased by that Lender in any outstanding Letters of
Credit or any unreimbursed drawings under any Letters of Credit plus (d) in the
case of Swing Line Lender, the aggregate outstanding principal amount of all
Swing Line Loans (net of any assignments thereof deemed purchased by other
Revolving Lenders) plus (e) the aggregate amount of all assignments deemed
purchased by that Lender in any outstanding Swing Line Loans.

“Revolving Loans” means the Loans made by Revolving Lenders to Company pursuant
to subsection 2.1A(i).

“Revolving Notes” means any promissory notes of Company issued pursuant to
subsection 2.1E to evidence the Revolving Loans of any Revolving Lenders,
substantially in the form of Exhibit IV annexed hereto.

 

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“S&P” means Standard and Poor’s Ratings Services, a division of McGraw-Hill
Companies, Inc.

“Scheduled Maturity Date” means January 23, 2009 or, in the event that on or
prior to such date, the Bankruptcy Court has commenced a hearing to confirm a
plan of reorganization in the Cases which provides for the payment of all of the
Obligations in full in cash on the effective date of such plan of
reorganization, the Scheduled Maturity Date shall be extended to April 23, 2009.

“Secured Creditors” means, collectively, the Agents, the Lenders, the Issuing
Lenders and each Indemnitee.

“Securities” means any stock, shares, partnership interests, voting trust
certificates, certificates of interest or participation in any profit-sharing
agreement or arrangement, options, warrants, bonds, debentures, notes, or other
evidences of indebtedness, secured or unsecured, convertible, subordinated,
certificated or uncertificated, or otherwise, or in general any instruments
commonly known as “securities” or any certificates of interest, shares or
participations in temporary or interim certificates for the purchase or
acquisition of, or any right to subscribe to, purchase or acquire, any of the
foregoing.

“Securities Account” means an account to which a financial asset is or may be
credited in accordance with an agreement under which the Person maintaining the
account undertakes to treat the Person for whom the account is maintained as
entitled to exercise the rights that comprise the financial asset.

“Securities Act” means the United States Securities Act of 1933, as amended from
time to time, and any successor statute.

“Security Agreement” means the Security Agreement executed and delivered on the
Closing Date, substantially in the form of Exhibit IX annexed hereto.

“Senior Note Indenture” means the indenture dated as of December 1, 2004
pursuant to which the Senior Notes are issued.

“Senior Notes” means the $150,000,000 in aggregate principal amount of 10%
Senior Notes due 2012 of Company issued pursuant to the Senior Note Indenture.

“Standby Letter of Credit” means any letter of credit or similar instrument
other than a Commercial Letter of Credit.

“Subject Claim” means that certain payment received on January 18, 2007 in the
amount of $807,486 in response to the Company’s claim for reimbursement of legal
fees relating to the March 19, 2007 settlement in connection with the
Fibermesh(r) litigation.

“Subject Lender” has the meaning assigned to that term in subsection 2.9.

 

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“Subsidiary”, with respect to any Person, means any corporation, partnership,
trust, limited liability company, association, Joint Venture or other business
entity of which more than 50% of the total voting power of shares of stock or
other ownership interests entitled (without regard to the occurrence of any
contingency) to vote in the election of the members of the Governing Body is at
the time owned or controlled, directly or indirectly, by that Person or one or
more of the other Subsidiaries of that Person or a combination thereof. Unless
the context indicates otherwise, “Subsidiary” means a Subsidiary of Company.

“Subsidiary Guarantor” means any Subsidiary of Company that executes and
delivers a counterpart of the Subsidiary Guaranty on the Closing Date or from
time to time thereafter pursuant to subsection 6.8.

“Subsidiary Guaranty” means the Subsidiary Guaranty executed and delivered by
certain Subsidiaries of Company on the Closing Date and to be executed and
delivered by additional Subsidiaries of Company from time to time thereafter in
accordance with subsection 6.8, substantially in the form of Exhibit VIII
annexed hereto;

“Superpriority Claim” means a claim against Company or any Guarantor in any of
the Cases which is an administrative expense claim having priority over any or
all administrative expenses of the kind specified in Sections 503(b) or 507(b)
of the Bankruptcy Code.

“Supplemental Collateral Agent” has the meaning assigned to that term in
subsection 9.1B.

“Swing Line Lender” means BNP Paribas, or any Person serving as a successor
Administrative Agent hereunder, in its capacity as Swing Line Lender hereunder.

“Swing Line Loan Commitment” means the commitment of Swing Line Lender to make
Swing Line Loans to Company pursuant to subsection 2.1A(ii).

“Swing Line Loans” means the Loans made by Swing Line Lender to Company pursuant
to subsection 2.1A(ii).

“Swing Line Note” means any promissory note of Company issued pursuant to
subsection 2.1E to evidence the Swing Line Loans of Swing Line Lender,
substantially in the form of Exhibit V annexed hereto.

“Synthetic Lease Obligation” means the monetary obligation of a Person under
(i) a so-called synthetic, off-balance sheet or tax retention lease, or (ii) an
agreement for the use or possession of property creating obligations that do not
appear on the balance sheet of such Person but which, upon the insolvency or
bankruptcy of such Person, would be characterized as the indebtedness for
borrowed money or Capital Leases of such Person (without regard to accounting
treatment).

 

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“Tax” or “Taxes” means any present or future tax, levy, impost, duty, charge,
fee, deduction or withholding of any nature and whatever called, by whomsoever,
on whomsoever and wherever imposed, levied, collected, withheld or assessed,
including interest, penalties, additions to tax and any similar liabilities with
respect thereto; except that, in the case of the Agents and Lenders, there shall
be excluded (i) taxes that are imposed on the overall net income or net profits
(including franchise taxes imposed in lieu thereof) (a) by the United States,
(b) by any other Government Authority under the laws of which such Lender is
organized or has its principal office or maintains its applicable lending
office, or (c) by any jurisdiction solely as a result of a present or former
connection between such Lender and such jurisdiction (other than any such
connection arising solely from such Lender having executed, delivered or
performed its obligations or received a payment under, or enforced, any of the
Loan Documents), and (ii) any branch profits taxes imposed by the United States
or any similar tax imposed by any other jurisdiction in which such Agent or
Lender is located.

“Total Utilization of Revolving Loan Commitments” means, as at any date of
determination, the sum of (i) the aggregate principal amount of all outstanding
Revolving Loans plus (ii) the aggregate principal amount of all outstanding
Swing Line Loans plus (iii) the Letter of Credit Usage.

“Transaction Costs” means the fees, costs and expenses payable by Company on or
before the Closing Date in connection with the transactions contemplated by the
Loan Documents.

“UCC” means the Uniform Commercial Code as in effect in any applicable
jurisdiction.

“Unasserted Obligations” means, at any time, Obligations for taxes, costs,
indemnifications, reimbursements, damages and other liabilities (except for
(i) the principal of and interest on, and fees relating to, any Indebtedness and
(ii) contingent reimbursement obligations in respect of amounts that may be
drawn under Letters of Credit) in respect of which no claim or demand for
payment has been made (or, in the case of Obligations for indemnification, no
notice for indemnification has been issued by the Indemnitee) at such time.

“Underwriters” means BNP Paribas and Black Diamond Commercial Finance, L.L.C.
(“BDCF”) (or, in the case of BDCF, any Affiliate of BDCF as BDCF may designate
from time to time).

 

  1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under
Agreement.

Except as otherwise expressly provided in this Agreement, all accounting terms
not otherwise defined herein shall have the meanings assigned to them in
conformity with GAAP. Financial statements and other information required to be
delivered by Company to Administrative Agent pursuant to clauses (ii), (iii) and
(xi) of subsection 6.1 shall be prepared in accordance with GAAP as in effect at
the time of such preparation (and delivered together with the reconciliation
statements provided for in subsection 6.1(v)). Calculations in connection with

 

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the definitions, covenants and other provisions of this Agreement shall utilize
GAAP as in effect on the date of determination, applied in a manner consistent
with that used in preparing the financial statements referred to in subsection
5.3; provided that if at any time any change in GAAP (or change in application
thereof) would affect the computation of any financial ratio or requirement set
forth in any Loan Document, and Company, Administrative Agent or Requisite
Lenders shall so request, Administrative Agent, Lenders and Company shall
negotiate in good faith to amend such ratio or requirement to preserve the
original intent thereof in light of such change in GAAP (or application
thereof)(subject to the approval of Requisite Lenders), provided that, until so
amended or such time as it is agreed that no amendment is necessary, such ratio
or requirement shall continue to be computed in accordance with GAAP (or
application thereof) prior to such change and Company shall provide to
Administrative Agent and Lenders reconciliation statements provided for in
subsection 6.1(v).

 

  1.3 Other Definitional Provisions and Rules of Construction.

A. Any of the terms defined herein may, unless the context otherwise requires,
be used in the singular or the plural, depending on the reference.

B. References to “Sections” and “subsections” shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided. Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.

C. The use in any of the Loan Documents of the word “include” or “including”,
when following any general statement, term or matter, shall not be construed to
limit such statement, term or matter to the specific items or matters set forth
immediately following such word or to similar items or matters, whether or not
nonlimiting language (such as “without limitation” or “but not limited to” or
words of similar import) is used with reference thereto, but rather shall be
deemed to refer to all other items or matters that fall within the broadest
possible scope of such general statement, term or matter.

D. Unless otherwise expressly provided herein, references to Organizational
Documents, agreements (including the Loan Documents) and other contractual
instruments shall be deemed to include all subsequent amendments, restatements,
extensions, supplements and other modifications thereto.

Section 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS

 

  2.1 Commitments; Making of Loans; the Register; Optional Notes.

A. Commitments. Subject to the terms and conditions of this Agreement and in
reliance upon the representations and warranties of Company herein set forth,
each Lender hereby severally agrees to make the Revolving Loans as described in
subsections 2.1A(i) and Swing Line Lender hereby agrees to make the Swing Line
Loans as described in subsection 2.1A(ii).

 

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(i) Revolving Loans. Each Revolving Lender severally agrees, subject to the
limitations set forth below with respect to the maximum amount of Revolving
Loans permitted to be outstanding from time to time, to lend to Company from
time to time during the period from the Closing Date to but excluding the
Revolving Loan Commitment Termination Date an aggregate amount not exceeding its
Pro Rata Share of the aggregate amount of the Revolving Loan Commitments to be
used for the purposes identified in subsections 2.6A and 2.5A. The original
amount of each Revolving Lender’s Revolving Loan Commitment is set forth
opposite its name on Schedule 2.1 annexed hereto and the original Revolving Loan
Commitment Amount is $60,000,000; provided that the amount of the Revolving Loan
Commitment of each Revolving Lender shall be adjusted to give effect to any
assignment of such Revolving Loan Commitment pursuant to subsection 10.1B and
shall be reduced from time to time by the amount of any reductions thereto made
pursuant to subsection 2.4A. Each Revolving Lender’s Revolving Loan Commitment
shall expire on the Revolving Loan Commitment Termination Date and all Revolving
Loans and all other amounts owed hereunder with respect to the Revolving Loans
and the Revolving Loan Commitments shall be paid in full no later than that
date.

Anything contained in this Agreement to the contrary notwithstanding, in no
event shall the Total Utilization of Revolving Loan Commitments at any time
exceed the Revolving Loan Commitment Amount then in effect.

(ii) Swing Line Loans.

(a) General Provisions. Swing Line Lender hereby agrees, subject to the
limitations set forth in the last paragraph of subsection 2.1A(i) and set forth
below with respect to the maximum amount of Swing Line Loans permitted to be
outstanding from time to time, to make a portion of the Revolving Loan
Commitments available to Company from time to time during the period from the
Closing Date to but excluding the Revolving Loan Commitment Termination Date by
making Swing Line Loans to Company in an aggregate amount not exceeding the
amount of the Swing Line Loan Commitment to be used for the purposes identified
in subsection 2.5A, notwithstanding the fact that such Swing Line Loans, when
aggregated with Swing Line Lender’s outstanding Revolving Loans and Swing Line
Lender’s Pro Rata Share of the Letter of Credit Usage then in effect, may exceed
Swing Line Lender’s Revolving Loan Commitment. The original amount of the Swing
Line Loan Commitment is $5,000,000; provided that any reduction of the Revolving
Loan Commitment Amount made pursuant to subsection 2.4 that reduces the
Revolving Loan Commitment Amount to an amount less than the then current amount
of the Swing Line Loan Commitment shall result in an automatic corresponding
reduction of the amount of the Swing Line Loan Commitment to the amount of the
Revolving Loan Commitment Amount, as so reduced, without any further action on
the part of Company, Administrative Agent or Swing Line Lender. The Swing Line
Loan Commitment shall expire on the Revolving Loan Commitment Termination Date
and all Swing Line Loans and all other amounts owed hereunder with respect to
the Swing Line Loans shall be paid in full no later than that date.

 

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(b) Swing Line Loan Prepayment with Proceeds of Revolving Loans. With respect to
any Swing Line Loans that have not been voluntarily prepaid by Company pursuant
to subsection 2.4A(i), Swing Line Lender may, at any time in its sole and
absolute discretion, deliver to Administrative Agent (with a copy to Company),
no later than 10:00 A.M. (New York City time) on the first Business Day in
advance of the proposed Funding Date, a notice requesting Revolving Lenders to
make Revolving Loans that are Base Rate Loans on such Funding Date in an amount
equal to the amount of such Swing Line Loans (the “Refunded Swing Line Loans”)
outstanding on the date such notice is given. Company hereby authorizes the
giving of any such notice and the making of any such Revolving Loans. Anything
contained in this Agreement to the contrary notwithstanding, (1) the proceeds of
such Revolving Loans made by Revolving Lenders other than Swing Line Lender
shall be immediately delivered by Administrative Agent to Swing Line Lender (and
not to Company) and applied to repay a corresponding portion of the Refunded
Swing Line Loans and (2) on the day such Revolving Loans are made, Swing Line
Lender’s Pro Rata Share of the Refunded Swing Line Loans shall be deemed to be
paid with the proceeds of a Revolving Loan made by Swing Line Lender, and such
portion of the Swing Line Loans deemed to be so paid shall no longer be
outstanding as Swing Line Loans and shall no longer be due under the Swing Line
Note, if any, of Swing Line Lender but shall instead constitute part of Swing
Line Lender’s outstanding Revolving Loans and shall be due under the Revolving
Note, if any, of Swing Line Lender. Company hereby authorizes Administrative
Agent and Swing Line Lender to charge Company’s accounts (if any) with
Administrative Agent and Swing Line Lender (up to the amount available in each
such account) in order to immediately pay Swing Line Lender the amount of the
Refunded Swing Line Loans to the extent the proceeds of such Revolving Loans
made by Revolving Lenders, including the Revolving Loan deemed to be made by
Swing Line Lender, are not sufficient to repay in full the Refunded Swing Line
Loans. If any portion of any such amount paid (or deemed to be paid) to Swing
Line Lender should be recovered by or on behalf of Company from Swing Line
Lender in any bankruptcy proceeding, in any assignment for the benefit of
creditors or otherwise, the loss of the amount so recovered shall be ratably
shared among all Lenders in the manner contemplated by subsection 10.5.

(c) Swing Line Loan Assignments. On the Funding Date of each Swing Line Loan,
each Revolving Lender shall be deemed to, and hereby agrees to, purchase an
assignment of such Swing Line Loan in an amount equal to its Pro Rata Share. If
for any reason (1) Revolving Loans are not made upon the request of Swing Line
Lender as provided in the immediately preceding paragraph in an amount
sufficient to repay any amounts owed to Swing Line Lender in respect of such
Swing Line Loan or (2) the Revolving Loan Commitments are terminated at

 

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a time when such Swing Line Loan is outstanding, upon notice from Swing Line
Lender as provided below, each Revolving Lender shall fund the purchase of such
assignment in an amount equal to its Pro Rata Share (calculated, in the case of
the foregoing clause (2), immediately prior to such termination of the Revolving
Loan Commitments) of the unpaid amount of such Swing Line Loan together with
accrued interest thereon. Upon one Business Day’s notice from Swing Line Lender,
each Revolving Lender shall deliver to Swing Line Lender such amount in same day
funds at the Funding and Payment Office. In order to further evidence such
assignment (and without prejudice to the effectiveness of the assignment
provisions set forth above), each Revolving Lender agrees to enter into an
Assignment Agreement at the request of Swing Line Lender in form and substance
reasonably satisfactory to Swing Line Lender. In the event any Revolving Lender
fails to make available to Swing Line Lender any amount as provided in this
paragraph, Swing Line Lender shall be entitled to recover such amount on demand
from such Revolving Lender together with interest thereon at the rate
customarily used by Swing Line Lender for the correction of errors among banks
for three Business Days and thereafter at the Base Rate. In the event Swing Line
Lender receives a payment of any amount with respect to which other Revolving
Lenders have funded the purchase of assignments as provided in this paragraph,
Swing Line Lender shall promptly distribute to each such other Revolving Lender
its Pro Rata Share of such payment.

(d) Revolving Lenders’ Obligations. Anything contained herein to the contrary
notwithstanding, each Revolving Lender’s obligation to make Revolving Loans for
the purpose of repaying any Refunded Swing Line Loans pursuant to subsection
2.1A(ii)(b) and each Revolving Lender’s obligation to purchase an assignment of
any unpaid Swing Line Loans pursuant to the immediately preceding paragraph
shall be absolute and unconditional and shall not be affected by any
circumstance, including (1) any set-off, counterclaim, recoupment, defense or
other right which such Revolving Lender may have against Swing Line Lender,
Company or any other Person for any reason whatsoever; (2) the occurrence or
continuation of an Event of Default or a Potential Event of Default; (3) any
adverse change in the business, operations, properties, assets, condition
(financial or otherwise) or prospects of Company or any of its Subsidiaries;
(4) any breach of this Agreement or any other Loan Document by any party
thereto; or (5) any other circumstance, happening or event whatsoever, whether
or not similar to any of the foregoing; provided that such obligations of each
Revolving Lender are subject to the condition that (x) Swing Line Lender
believed in good faith that all conditions under Section 4 to the making of the
applicable Refunded Swing Line Loans or other unpaid Swing Line Loans, as the
case may be, were satisfied at the time such Refunded Swing Line Loans or unpaid
Swing Line Loans were made or (y) the satisfaction of any such condition not
satisfied had been waived in accordance with subsection 10.6 prior to or at the
time such Refunded Swing Line Loans or other unpaid Swing Line Loans were made.

 

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B. Borrowing Mechanics. Loans made on any Funding Date (other than Swing Line
Loans, Revolving Loans made pursuant to a request by Swing Line Lender pursuant
to subsection 2.1A(ii) or Revolving Loans made pursuant to subsection 3.3B)
shall be in an aggregate minimum amount of $2,000,000 and multiples of $500,000
in excess of that amount. Swing Line Loans made on any Funding Date shall be in
an aggregate minimum amount of $250,000 and multiples of $50,000 in excess of
that amount. Whenever Company desires that Lenders make Revolving Loans it shall
deliver to Administrative Agent a duly executed Notice of Borrowing no later
than 11:00 A.M. (New York City time) at least three Business Days in advance of
the proposed Funding Date (in the case of a LIBOR Loan) or at least one Business
Day in advance of the proposed Funding Date (in the case of a Base Rate Loan),
provided that any Notice of Borrowing with respect to any borrowings on the
Closing Date may be delivered no later than 9:00 A.M. on the Closing Date.
Whenever Company desires that Swing Line Lender make a Swing Line Loan, it shall
deliver to Administrative Agent a duly executed Notice of Borrowing no later
than 11:00 A.M. (New York City time) on the proposed Funding Date. Revolving
Loans may be continued as or converted into Base Rate Loans and LIBOR Loans in
the manner provided in subsection 2.2D. In lieu of delivering a Notice of
Borrowing, Company may give Administrative Agent telephonic notice by the
required time of any proposed borrowing under this subsection 2.1B; provided
that such notice shall be promptly confirmed in writing by delivery of a duly
executed Notice of Borrowing to Administrative Agent on or before the applicable
Funding Date.

Neither Administrative Agent nor any Lender shall incur any liability to Company
in acting upon any telephonic notice referred to above that Administrative Agent
believes in good faith to have been given by an Officer or other person
authorized to borrow on behalf of Company or for otherwise acting in good faith
under this subsection 2.1B or under subsection 2.2D, and upon funding of Loans
by Lenders, and upon conversion or continuation of the applicable basis for
determining the interest rate with respect to any Loans pursuant to subsection
2.2D, in each case in accordance with this Agreement, pursuant to any such
telephonic notice Company shall have effected Loans or a conversion or
continuation, as the case may be, hereunder.

Company shall notify Administrative Agent prior to the funding of any Loans in
the event that any of the matters to which Company is required to certify in the
applicable Notice of Borrowing is no longer true and correct as of the
applicable Funding Date, and the acceptance by Company of the proceeds of any
Loans shall constitute a re-certification by Company, as of the applicable
Funding Date, as to the matters to which Company is required to certify in the
applicable Notice of Borrowing.

Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a Notice of
Borrowing for, or a Notice of Conversion/Continuation for conversion to, or
continuation of, a LIBOR Loan (or telephonic notice in lieu thereof) shall be
irrevocable on and after the related Interest Rate Determination Date, and
Company shall be bound to make a borrowing or to effect a conversion or
continuation in accordance therewith.

Notwithstanding the foregoing provisions of this subsection 2.1B, no LIBOR Loans
may be made and no Base Rate Loan may be converted into a LIBOR Loan until the
earlier of the tenth Business Day after the Closing Date and the date specified
by Administrative Agent to Company on which the primary syndication of the Loans
has been completed.

 

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C. Disbursement of Funds. All Revolving Loans shall be made by Lenders
simultaneously and proportionately to their respective Pro Rata Shares, it being
understood that neither Administrative Agent nor any Lender shall be responsible
for any default by any other Lender in that other Lender’s obligation to make a
Loan requested hereunder nor shall the amount of the Commitment of any Lender to
make the particular type of Loan requested be increased or decreased as a result
of a default by any other Lender in that other Lender’s obligation to make a
Loan requested hereunder. Promptly after receipt by Administrative Agent of a
Notice of Borrowing pursuant to subsection 2.1B (or telephonic notice in lieu
thereof), Administrative Agent shall notify each Lender for that type of Loan or
Swing Line Lender, as the case may be, of the proposed borrowing. Each such
Lender (other than Swing Line Lender) shall make the amount of its Loan
available to Administrative Agent not later than 1:00 P.M. (New York City time)
on the applicable Funding Date, and Swing Line Lender shall make the amount of
its Swing Line Loan available to Administrative Agent not later than 1:00 P.M.
(New York City time) on the applicable Funding Date, in each case in same day
funds in Dollars, at the Funding and Payment Office. Except as provided in
subsection 2.1A(ii) and subsection 3.3B with respect to Revolving Loans used to
repay Refunded Swing Line Loans or to reimburse any Issuing Lender for the
amount of a drawing under a Letter of Credit issued by it, upon satisfaction or
waiver of the conditions precedent specified in subsections 4.1 (in the case of
Loans made on the Closing Date) and 4.2 (in the case of all Loans),
Administrative Agent shall make the proceeds of such Loans available to Company
on the applicable Funding Date by causing an amount of same day funds in Dollars
equal to the proceeds of all such Loans received by Administrative Agent from
Lenders to be credited to the account of Company at the Funding and Payment
Office or such other account as specified by Company in the applicable Notice of
Borrowing.

Unless Administrative Agent shall have been notified by any Lender prior to a
Funding Date that such Lender does not intend to make available to
Administrative Agent the amount of such Lender’s Loan requested on such Funding
Date, Administrative Agent may assume that such Lender has made such amount
available to Administrative Agent on such Funding Date and Administrative Agent
may, in its sole discretion, but shall not be obligated to, make available to
Company a corresponding amount on such Funding Date. If such corresponding
amount is not in fact made available to Administrative Agent by such Lender,
Administrative Agent shall be entitled to recover such corresponding amount on
demand from such Lender together with interest thereon, for each day from such
Funding Date until the date such amount is paid to Administrative Agent, at the
customary rate set by Administrative Agent for the correction of errors among
banks for three Business Days and thereafter at the Base Rate. If such Lender
does not pay such corresponding amount forthwith upon Administrative Agent’s
demand therefor, Administrative Agent shall promptly notify Company and Company
shall immediately pay such corresponding amount to Administrative Agent together
with interest thereon, for each day from such Funding Date until the date such
amount is paid to Administrative Agent, at the rate payable under this Agreement
for Base Rate Loans. Nothing in this subsection 2.1C shall be deemed to relieve
any Lender from its obligation to fulfill its Commitments hereunder or to
prejudice any rights that Company may have against any Lender as a result of any
default by such Lender hereunder.

 

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D. The Register. Administrative Agent, acting for these purposes solely as an
agent of Company (it being acknowledged that Administrative Agent, in such
capacity, and its officers, directors, employees, agent and affiliates shall
constitute Indemnitees under subsection 10.3), shall maintain at its address
referred to in subsection 10.8 a register for the recordation of, and shall
record, the names and addresses of Lenders and the respective amounts of the
Revolving Loan Commitment, Swing Line Loan Commitment, Revolving Loans and Swing
Line Loans of each Lender from time to time (the “Register”). Administrative
Agent shall make the Register available for inspection by Company or any Lender
upon reasonable prior notice at reasonable times. Company, Administrative Agent
and Lenders shall deem and treat the Persons listed as Lenders in the Register
as the holders and owners of the corresponding Commitments and Loans listed
therein for all purposes hereof; all amounts owed with respect to any Commitment
or Loan shall be owed to the Lender listed in the Register as the owner thereof;
and any request, authority or consent of any Person who, at the time of making
such request or giving such authority or consent, is listed in the Register as a
Lender shall be conclusive and binding on any subsequent holder, assignee or
transferee of the corresponding Commitments or Loans. Each Lender shall record
on its internal records the amount of its Loans and Commitments and each payment
in respect hereof, and any such recordation shall be prima facie evidence of the
contents thereof, absent manifest error, subject to the entries in the Register,
which shall, absent manifest error, govern in the event of any inconsistency
with any Lender’s records. Failure to make any recordation in the Register or in
any Lender’s records, or any error in such recordation, shall not affect any
Loans or Commitments or any Obligations in respect of any Loans.

E. Optional Notes. If so requested by any Lender by written notice to Company
(with a copy to Administrative Agent) at least two Business Days prior to the
Closing Date or at any time thereafter, Company shall execute and deliver to
such Lender (and/or, if applicable and if so specified in such notice, to any
Person who is an assignee of such Lender pursuant to subsection 10.1) on the
Closing Date (or, if such notice is delivered after the Closing Date, promptly
after Company’s receipt of such notice) a promissory note or promissory notes to
evidence such Lender’s Revolving Loans or Swing Line Loans, substantially in the
form of Exhibit IV or Exhibit V annexed hereto, respectively, with appropriate
insertions.

 

  2.2 Interest on the Loans.

A. Rate of Interest. Subject to the provisions of subsections 2.6 and 2.7, each
Revolving Loan shall bear interest on the unpaid principal amount thereof from
the date made through maturity (whether by acceleration or otherwise) at a rate
determined by reference to the Base Rate or Adjusted LIBOR. Subject to the
provisions of subsection 2.7, each Swing Line Loan shall bear interest on the
unpaid principal amount thereof from the date made through maturity (whether by
acceleration or otherwise) at a rate determined by reference to the Base Rate.
The applicable basis for determining the rate of interest with respect to any
Revolving Loan shall be selected by Company initially at the time a Notice of
Borrowing is given with respect to such Loan pursuant to subsection 2.1B
(subject to the last sentence of subsection

 

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2.1B), and the basis for determining the interest rate with respect to any
Revolving Loan may be changed from time to time pursuant to subsection 2.2D
(subject to the last sentence of subsection 2.1B). If on any day a Revolving
Loan is outstanding with respect to which notice has not been delivered to
Administrative Agent in accordance with the terms of this Agreement specifying
the applicable basis for determining the rate of interest, then for that day
that Loan shall bear interest determined by reference to the Base Rate.

(i) Subject to the provisions of subsections 2.2E, 2.2G and 2.7, the Revolving
Loans shall bear interest through maturity as follows:

(a) if a Base Rate Loan, then at the sum of the Base Rate plus 4% per annum (the
“Base Rate Margin”)

(b) if a LIBOR Loan, then at the sum of Adjusted LIBOR plus 4% per annum (the
“LIBOR Margin”).

(ii) Subject to the provisions of subsections 2.2E, 2.2G and 2.7, the Swing Line
Loans shall bear interest through maturity at the sum of the Base Rate plus the
applicable Base Rate Margin for Revolving Loans minus a rate equal to the
commitment fee percentage then in effect as determined pursuant to subsection
2.3A.

B. Interest Periods. In connection with each LIBOR Loan, Company may, pursuant
to the applicable Notice of Borrowing or Notice of Conversion/Continuation, as
the case may be, select an interest period (each an “Interest Period”) to be
applicable to such Loan, which Interest Period shall be, at Company’s option,
either a one, two or three month period; provided that:

(i) the initial Interest Period for any LIBOR Loan shall commence on the Funding
Date in respect of such Loan, in the case of a Loan initially made as a LIBOR
Loan, or on the date specified in the applicable Notice of
Conversion/Continuation, in the case of a Loan converted to a LIBOR Loan;

(ii) in the case of immediately successive Interest Periods applicable to a
LIBOR Loan continued as such pursuant to a Notice of Conversion/Continuation,
each successive Interest Period shall commence on the day on which the next
preceding Interest Period expires;

(iii) if an Interest Period would otherwise expire on a day that is not a
Business Day, such Interest Period shall expire on the next succeeding Business
Day; provided that, if any Interest Period would otherwise expire on a day that
is not a Business Day but is a day of the month after which no further Business
Day occurs in such month, such Interest Period shall expire on the next
preceding Business Day;

(iv) any Interest Period that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall, subject to clause
(v) of this subsection 2.2B, end on the last Business Day of a calendar month;

 

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(v) no Interest Period with respect to any portion of the Revolving Loans shall
extend beyond the Revolving Loan Commitment Termination Date;

(vi) no Interest Period with respect to any portion of the Revolving Loans shall
extend beyond the date on which a permanent reduction of the Revolving Loan
Commitment Amount is scheduled to occur unless the sum of (a) the aggregate
principal amount of Revolving Loans that are Base Rate Loans plus (b) the
aggregate principal amount of Revolving Loans that are LIBOR Loans with Interest
Periods expiring on or before such date plus (c) the excess of the Revolving
Loan Commitment Amount then in effect over the aggregate principal amount of
Revolving Loans then outstanding equals or exceeds the permanent reduction of
the Revolving Loan Commitment Amount that is scheduled to occur on such date;

(vii) there shall be no more than five (5) Interest Periods outstanding at any
time; and

(viii) in the event Company fails to specify an Interest Period for any LIBOR
Loan in the applicable Notice of Borrowing or Notice of Conversion/Continuation,
Company shall be deemed to have selected an Interest Period of one month.

C. Interest Payments. Subject to the provisions of subsection 2.2E, interest on
each Loan shall be payable in arrears on and to each Interest Payment Date
applicable to that Loan, upon any prepayment of that Loan (to the extent accrued
on the amount being prepaid) and at maturity (including final maturity);
provided that, in the event any Swing Line Loans or any Revolving Loans that are
Base Rate Loans are prepaid pursuant to subsection 2.4A(i), interest accrued on
such Loans through the date of such prepayment shall be payable on the next
succeeding Interest Payment Date applicable to Base Rate Loans (or, if earlier,
at final maturity).

D. Conversion or Continuation. Subject to the provisions of subsection 2.6,
Company shall have the option (i) to convert at any time all or any part of its
outstanding Revolving Loans equal to $2,000,000 and multiples of $500,000 in
excess of that amount from Loans bearing interest at a rate determined by
reference to one basis to Loans bearing interest at a rate determined by
reference to an alternative basis or (ii) upon the expiration of any Interest
Period applicable to a LIBOR Loan, to continue all or any portion of such Loan
equal to $2,000,000 and multiples of $500,000 in excess of that amount as a
LIBOR Loan; provided, however, that a LIBOR Loan may only be converted into a
Base Rate Loan on the expiration date of an Interest Period applicable thereto.

Company shall deliver a duly executed Notice of Conversion/Continuation to
Administrative Agent no later than 2:00 P.M. (New York City time) at least one
Business Day in advance of the proposed conversion date (in the case of a
conversion to a Base Rate Loan) and no later than 11:00 A.M. (New York City
time) at least three Business Days in advance of the

 

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proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, a LIBOR Loan). In lieu of delivering a Notice of
Conversion/Continuation, Company may give Administrative Agent telephonic notice
by the required time of any proposed conversion/continuation under this
subsection 2.2D; provided that such notice shall be promptly confirmed in
writing by delivery of a duly executed Notice of Conversion/Continuation to
Administrative Agent on or before the proposed conversion/continuation date.
Administrative Agent shall notify each Lender of any Loan subject to a Notice of
Conversion/Continuation.

E. Default Rate. Upon the occurrence and during the continuation of any Event of
Default, upon the election by Administrative Agent or Requisite Lenders, the
outstanding principal amount of all Loans and, to the extent permitted by
Applicable Law, any interest payments thereon not paid when due and any fees and
other amounts then due and payable hereunder, shall thereafter bear interest
(including post-petition interest in any proceeding under the Bankruptcy Code or
other applicable bankruptcy laws whether or not allowed in such proceeding)
payable upon demand by Administrative Agent at a rate that is 2% per annum in
excess of the interest rate otherwise payable under this Agreement with respect
to the applicable Loans (or, in the case of any such fees and other amounts, at
a rate which is 2% per annum in excess of the interest rate otherwise payable
under this Agreement for Base Rate Loans); provided that, in the case of LIBOR
Loans, upon the expiration of the Interest Period in effect at the time any such
increase in interest rate is effective such LIBOR Loans shall thereupon become
Base Rate Loans and shall thereafter bear interest payable upon demand at a rate
which is 2% per annum in excess of the interest rate otherwise payable under
this Agreement for Base Rate Loans. Payment or acceptance of the increased rates
of interest provided for in this subsection 2.2E is not a permitted alternative
to timely payment and shall not constitute a waiver of any Event of Default or
otherwise prejudice or limit any rights or remedies of Administrative Agent or
any Lender.

F. Computation of Interest. Interest on the Loans shall be computed (i) in the
case of Base Rate Loans, on the basis of a 365 day or 366 day year, as the case
may be, and (ii) in the case of LIBOR Loans, on the basis of a 360-day year, in
each case for the actual number of days elapsed in the period during which it
accrues. In computing interest on any Loan, the date of the making of such Loan
or the first day of an Interest Period applicable to such Loan or, with respect
to a Base Rate Loan being converted from a LIBOR Loan, the date of conversion of
such LIBOR Loan to such Base Rate Loan, as the case may be, shall be included,
and the date of payment of such Loan or the expiration date of an Interest
Period applicable to such Loan or, with respect to a Base Rate Loan being
converted to a LIBOR Loan, the date of conversion of such Base Rate Loan to such
LIBOR Loan, as the case may be, shall be excluded; provided that if a Loan is
repaid on the same day on which it is made, one day’s interest shall be paid on
that Loan.

G. Maximum Rate. Notwithstanding the foregoing provisions of this subsection
2.2, in no event shall the rate of interest payable by Company with respect to
any Loan exceed the maximum rate of interest permitted to be charged under
Applicable Law.

 

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  2.3 Fees.

A. Commitment Fees. Company agrees to pay to Administrative Agent, for
distribution to each Revolving Lender in proportion to that Lender’s Pro Rata
Share, commitment fees for the period from and including the Closing Date to and
excluding the Revolving Loan Commitment Termination Date equal to the average of
the daily excess of the Revolving Loan Commitment Amount over the Total
Utilization of Revolving Loan Commitments (calculated without giving effect to
outstanding Swing Line Loans) multiplied by 0.75% per annum, such commitment
fees to be calculated on the basis of a 360-day year and the actual number of
days elapsed and to be payable quarterly in arrears on each March 15, June 15,
September 15 and December 15 of each year, commencing on the first such date to
occur after the Closing Date, and on the Revolving Loan Commitment Termination
Date.

B. Other Fees. Company agrees to pay to Administrative Agent such fees in the
amounts and at the times separately agreed upon between Company, the
Administrative Agent and/or the Underwriters, including the fees agreed to under
the DIP Fee Letter.

 

  2.4 Repayments, Prepayments and Reductions of Revolving Loan Commitment
Amount; General Provisions Regarding Payments; Application of Proceeds of
Collateral and Payments Under Guaranties.

A. Prepayments and Reductions in Revolving Loan Commitment Amount.

(i) Voluntary Prepayments. Company may, upon written or telephonic notice to
Administrative Agent on or prior to 11:00 A.M. (New York City time) on the date
of prepayment, which notice, if telephonic, shall be promptly confirmed in
writing, at any time and from time to time prepay any Swing Line Loan on any
Business Day in whole or in part in an aggregate minimum amount of $250,000 and
multiples of $50,000 in excess of that amount. Company may, upon not less than
one Business Day’s prior written or telephonic notice, in the case of Base Rate
Loans, and three Business Days’ prior written or telephonic notice, in the case
of LIBOR Loans, in each case given to Administrative Agent by 2:00 P.M. (New
York City time) on the date required and, if given by telephone, promptly
confirmed in writing to Administrative Agent, who will promptly notify each
Lender whose Loans are to be prepaid of such prepayment, at any time and from
time to time prepay any Revolving Loans on any Business Day in whole or in part
in an aggregate minimum amount of $500,000 and multiples of $100,000 in excess
of that amount; provided, however, that a LIBOR Loan may only be prepaid on the
expiration of the Interest Period applicable thereto. Notice of prepayment
having been given as aforesaid, the principal amount of the Loans specified in
such notice shall become due and payable on the prepayment date specified
therein. Any such voluntary prepayment shall be applied as specified in
subsection 2.4A(iv).

(ii) Voluntary Reductions of Revolving Loan Commitments. Company may, upon not
less than three Business Days’ prior written or telephonic notice confirmed in
writing to Administrative Agent, or upon such lesser number of days’ prior
written or telephonic notice, as determined by Administrative Agent in its sole
discretion, at any time and from time to time, terminate in whole or permanently
reduce in part, subject to customary breakage fees, the Revolving Loan
Commitment Amount in an amount up to

 

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the amount by which the Revolving Loan Commitment Amount exceeds the Total
Utilization of Revolving Loan Commitments at the time of such proposed
termination or reduction; provided that any such partial reduction of the
Revolving Loan Commitment Amount shall be in an aggregate minimum amount of
$500,000 and multiples of $100,000 in excess of that amount; and provided,
further that the Company shall pay 102% of the principal amount of the reduction
of the Revolving Loan Commitment Amount, plus customary breakage, upon a
voluntary reduction of and termination of the Revolving Loan Commitment Amount
prior to the Scheduled Maturity Date; provided that such prepayment premium
shall not be payable if (i) the credit facility provided for under this
Agreement is refinanced after the occurrence of an Event of Default called by
the Administrative Agent that remains unwaived within ten days of a written
request for such a waiver by the Borrowers or (ii) the Obligations are prepaid
on the effective date of a plan of reorganization that repays the Obligations in
full in cash. Company’s notice to Administrative Agent (who will promptly notify
each Revolving Lender of such notice) shall designate the date (which shall be a
Business Day) of such termination or reduction and the amount of any partial
reduction, and such termination or reduction shall be effective on the date
specified in Company’s notice and shall reduce the amount of the Revolving Loan
Commitment of each Revolving Lender proportionately to its Pro Rata Share.

(iii) Mandatory Prepayments and Mandatory Reductions of Revolving Loan
Commitments. The Loans shall be prepaid and/or the Revolving Loan Commitment
Amount shall be permanently reduced in the amounts and under the circumstances
set forth below, all such prepayments and/or reductions to be applied as set
forth below or as more specifically provided in subsection 2.4A(iv) and
subsection 2.4C:

(a) Prepayments and Reductions From Net Asset Sale Proceeds. No later than 5
Business Days after the date of receipt by Holdings or any of its Subsidiaries
of any Net Asset Sale Proceeds in respect of any Asset Sale, Company shall
prepay the Loans and/or the Revolving Loan Commitment Amount shall be
permanently reduced in an aggregate amount equal to such Net Asset Sale
Proceeds.

(b) Prepayments and Reductions from Net Insurance/Condemnation Proceeds. No
later than the first Business Day following the date of receipt by
Administrative Agent or by Holdings or any of its Subsidiaries of any Net
Insurance/Condemnation Proceeds that are required to be applied to prepay the
Loans and/or reduce the Revolving Loan Commitment Amount pursuant to the
provisions of subsection 6.4C, Company shall prepay (including any prepayment
effected in accordance with subsection 6.4C(iii)) the Loans and/or the Revolving
Loan Commitment Amount shall be permanently reduced in an aggregate amount equal
to the amount of such Net Insurance/Condemnation Proceeds.

(c) Prepayments and Reductions Due to Issuance of Equity Securities. No later
than the first Business Day following receipt of the Net Securities Proceeds
from the issuance of any Capital Stock of Holdings or of any Subsidiary of
Holdings (other than to Company or a Subsidiary Guarantor), Company shall prepay
the Loans in an aggregate amount equal to such Net Securities Proceeds.

 

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(d) Prepayments and Reductions Due to Issuance of Indebtedness. On the date of
receipt of the Net Securities Proceeds from the issuance of any Indebtedness of
Holdings or any of its Subsidiaries after the Closing Date, other than
Indebtedness permitted pursuant to subsection 7.1, Company shall prepay the
Loans and/or the Revolving Loan Commitment Amount shall be permanently reduced
in an aggregate amount equal to such Net Securities Proceeds.

(e) Calculations of Net Proceeds Amounts; Additional Prepayments and Reductions
Based on Subsequent Calculations. Concurrently with any prepayment of the Loans
and/or reduction of the Revolving Loan Commitment Amount pursuant to subsections
2.4A(iii)(a)-(d), Company shall deliver to Administrative Agent an Officer’s
Certificate demonstrating the calculation of the amount of the applicable Net
Asset Sale Proceeds, Net Insurance/Condemnation Proceeds, Net Securities
Proceeds, as the case may be, that gave rise to such prepayment and/or
reduction. In the event that Company shall subsequently determine that the
actual amount was greater than the amount set forth in such Officer’s
Certificate, Company shall promptly make an additional prepayment of the Loans
(and/or, if applicable, the Revolving Loan Commitment Amount shall be
permanently reduced) in an amount equal to the amount of such excess, and
Company shall concurrently therewith deliver to Administrative Agent an
Officer’s Certificate demonstrating the derivation of the additional amount
resulting in such excess.

(f) Prepayments Due to Reductions of Revolving Loan Commitment Amount. Company
shall from time to time prepay first the Swing Line Loans and second the
Revolving Loans (and, after prepaying all Revolving Loans, Cash collateralize
any outstanding Letters of Credit by depositing the requisite amount in the
Collateral Account) to the extent necessary so that the Total Utilization of
Revolving Loan Commitments (net of any such Cash collateral) shall not at any
time exceed the Revolving Loan Commitment Amount then in effect. At such time as
the Revolving Loan Commitment Amount exceeds the Total Utilization of Revolving
Loan Commitments (net of any remaining Cash collateral), if no Event of Default
has occurred and is continuing, to the extent any Cash collateral was provided
by Company and has not been applied to any Obligations as provided in the
Security Agreement, such excess amount shall, at the request of Company, be
released to Company.

(iv) Application of Prepayments.

(a) Application of Voluntary Prepayments by Type of Loans and Order of Maturity.
Any voluntary prepayments pursuant to subsection 2.4A(i) shall be applied as
specified by Company in the applicable notice of prepayment; provided that in
the event Company fails to specify the Loans to which any such

 

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prepayment shall be applied, such prepayment shall be applied first to repay
outstanding Swing Line Loans to the full extent thereof and second to repay
outstanding Revolving Loans to the full extent thereof.

(b) Application of Mandatory Prepayments by Type of Loans. Except as provided in
subsection 2.4C, any amount required to be applied as a mandatory prepayment of
the Loans and/or a reduction of the Revolving Loan Commitment Amount pursuant to
subsections 2.4A(iii)(a)-(d) shall be applied first to prepay the Swing Line
Loans to the full extent thereof and to permanently reduce the Revolving Loan
Commitment Amount by the amount of such prepayment and second, to the extent of
any remaining portion of such amount, to prepay the Revolving Loans to the full
extent thereof (and, after prepaying all Revolving Loans, Cash collateralize any
outstanding Letters of Credit by depositing the requisite amount in the
Collateral Account) and to further permanently reduce the Revolving Loan
Commitment Amount by the amount of such prepayment, and third, to the extent of
any remaining portion of such amount, to further permanently reduce the
Revolving Loan Commitment Amount to the full extent thereof. Any mandatory
reduction of the Revolving Loan Commitment Amount pursuant to this subsection
2.4A shall be in proportion to each Revolving Lender’s Pro Rata Share.

(c) Application of Prepayments to Base Rate Loans and LIBOR Loans. Any
prepayment of Revolving Loans shall be applied first to Base Rate Loans to the
full extent thereof before application to LIBOR Loans, in each case in a manner
that minimizes the amount of any payments required to be made by Company
pursuant to subsection 2.6D.

B. General Provisions Regarding Payments.

(i) Manner and Time of Payment. All payments by Company of principal, interest,
fees and other Obligations shall be made in Dollars in same day funds, without
defense, setoff or counterclaim, free of any restriction or condition, and
delivered to Administrative Agent not later than 1:00 P.M. (New York City time)
on the date due at the Funding and Payment Office for the account of Lenders;
funds received by Administrative Agent after that time on such due date shall be
deemed to have been paid by Company on the next succeeding Business Day. Company
hereby authorizes Administrative Agent to charge its accounts with
Administrative Agent in order to cause timely payment to be made to
Administrative Agent of all principal, interest, fees and expenses due hereunder
(subject to sufficient funds being available in its accounts for that purpose).

(ii) Application of Payments to Principal and Interest. Except as provided in
subsection 2.2C, all payments in respect of the principal amount of any Loan
shall include payment of accrued interest on the principal amount being repaid
or prepaid, and all such payments shall be applied to the payment of interest
before application to principal.

 

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(iii) Apportionment of Payments. Aggregate payments of principal and interest
shall be apportioned among all outstanding Loans to which such payments relate,
in each case proportionately to Lenders’ respective Pro Rata Shares.
Administrative Agent shall promptly distribute to each Lender, at the account
specified in the payment instructions delivered to Administrative Agent by such
Lender, its Pro Rata Share of all such payments received by Administrative Agent
and the commitment fees and letter of credit fees of such Lender, if any, when
received by Administrative Agent pursuant to subsections 2.3 and 3.2.
Notwithstanding the foregoing provisions of this subsection 2.4B(iii), if,
pursuant to the provisions of subsection 2.6C, any Notice of
Conversion/Continuation is withdrawn as to any Affected Lender or if any
Affected Lender makes Base Rate Loans in lieu of its Pro Rata Share of any LIBOR
Loans, Administrative Agent shall give effect thereto in apportioning interest
payments received thereafter.

(iv) Payments on Business Days. Whenever any payment to be made hereunder shall
be stated to be due on a day that is not a Business Day, such payment shall be
made on the next succeeding Business Day and such extension of time shall be
included in the computation of the payment of interest hereunder or of the
commitment fees hereunder, as the case may be.

(v) Notation of Payment. Each Lender agrees that before disposing of any Note
held by it, or any part thereof (other than by granting participations therein),
that Lender will make a notation thereon of all Loans evidenced by that Note and
all principal payments previously made thereon and of the date to which interest
thereon has been paid; provided that the failure to make (or any error in the
making of) a notation of any Loan made under such Note shall not limit or
otherwise affect the obligations of Company hereunder or under such Note with
respect to any Loan or any payments of principal or interest on such Note.

C. Application of Proceeds of Collateral and Payments after Event of Default.
Upon the occurrence and during the continuation of an Event of Default, if
requested by Requisite Lenders, or upon acceleration of the Obligations pursuant
to Section 8, (a) all payments received by Administrative Agent, whether from
Company, Holdings or any Subsidiary Guarantor or otherwise, and (b) all proceeds
received by Administrative Agent in respect of any sale of, collection from, or
other realization upon all or any part of the Collateral under any Collateral
Document shall be applied in full or in part by Administrative Agent, in each
case in the following order of priority:

(i) to the payment of all costs and expenses of such sale, collection or other
realization, all other expenses, liabilities and advances made or incurred by
Administrative Agent in connection therewith, and all amounts for which
Administrative Agent is entitled to compensation (including the fees described
in subsection 2.3), reimbursement and indemnification under any Loan Document
and all advances made by Administrative Agent thereunder for the account of the
applicable Loan Party, and to the payment of all costs and expenses paid or
incurred by Administrative Agent in connection with the Loan Documents, all in
accordance with subsections 9.4, 10.2 and 10.3 and the other terms of this
Agreement and the Loan Documents; and

 

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(ii) thereafter, to the payment to or upon the order of such Loan Party or to
whosoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct.

 

  2.5 Use of Proceeds.

A. Revolving Loans; Swing Line Loans. The proceeds of any Revolving Loans and
any Swing Line Loans shall be applied by Company on or after the Closing Date
to: (i) pay related fees and expenses associated with the negotiation, execution
and delivery of this Agreement and the other Loan Documents, (ii) to make
Prepetition Payments solely to the extent approved by the Bankruptcy Court and
permitted hereunder and (iii) provide for the working capital requirements and
other general corporate purposes of Company and the Guarantors during the
pendency of the Cases to the extent provided for in the Budget and otherwise
permitted hereunder.

B. Margin Regulations. No portion of the proceeds of any borrowing under this
Agreement shall be used by Company or any of its Subsidiaries in any manner that
might cause the borrowing or the application of such proceeds to violate
Regulation U, Regulation T or Regulation X of the Board of Governors of the
Federal Reserve System or any other regulation of such Board or to violate the
Exchange Act, in each case as in effect on the date or dates of such borrowing
and such use of proceeds.

 

  2.6 Special Provisions Governing LIBOR Loans.

Notwithstanding any other provision of this Agreement to the contrary, the
following provisions shall govern with respect to LIBOR Loans as to the matters
covered:

A. Determination of Applicable Interest Rate. On each Interest Rate
Determination Date, Administrative Agent shall determine in accordance with the
terms of this Agreement (which determination shall, absent manifest error, be
conclusive and binding upon all parties) the interest rate that shall apply to
the LIBOR Loans for which an interest rate is then being determined for the
applicable Interest Period and shall promptly give notice thereof (in writing or
by telephone confirmed in writing) to Company and each applicable Lender.

B. Inability to Determine Applicable Interest Rate. In the event that
Administrative Agent shall have determined (which determination shall be
conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date that by reason of circumstances affecting the London
interbank market adequate and fair means do not exist for ascertaining the
interest rate applicable to such Loans on the basis provided for in the
definition of LIBOR, Administrative Agent shall on such date give notice (by
telefacsimile or by telephone confirmed in writing) to Company and each Lender
of such determination, whereupon (i) no Loans may be made as, or converted to,
LIBOR Loans until such time as Administrative Agent notifies Company and Lenders
that the circumstances giving rise to such notice no longer exist

 

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and (ii) any Notice of Borrowing or Notice of Conversion/Continuation given by
Company with respect to the Loans in respect of which such determination was
made shall be deemed to be for a Base Rate Loan.

C. Illegality of LIBOR Loans. In the event that on any date any Lender shall
have determined (which determination shall be conclusive and binding upon all
parties hereto but shall be made only after consultation with Company and
Administrative Agent) that the making, maintaining or continuation of its LIBOR
Loans has become unlawful as a result of compliance by such Lender in good faith
with any law, treaty, governmental rule, regulation, guideline or order (or
would conflict with any such treaty, governmental rule, regulation, guideline or
order not having the force of law even though the failure to comply therewith
would not be unlawful) such Lender shall be an “Affected Lender” and it shall
within five Business Days give notice (by telefacsimile or by telephone
confirmed in writing) to Company and Administrative Agent of such determination.
Administrative Agent shall promptly notify each other Lender of the receipt of
such notice. Thereafter (a) the obligation of the Affected Lender to make Loans
as, or to convert Loans to, LIBOR Loans shall be suspended until such notice
shall be withdrawn by the Affected Lender, (b) to the extent such determination
by the Affected Lender relates to a LIBOR Loan then being requested by Company
pursuant to a Notice of Borrowing or a Notice of Conversion/Continuation, the
Affected Lender shall make such Loan as (or convert such Loan to, as the case
may be) a Base Rate Loan, (c) the Affected Lender’s obligation to maintain its
outstanding LIBOR Loans (the “Affected Loans”) shall be terminated at the
earlier to occur of the expiration of the Interest Period then in effect with
respect to the Affected Loans or when required by law, and (d) the Affected
Loans shall automatically convert into Base Rate Loans on the date of such
termination. Notwithstanding the foregoing, to the extent a determination by an
Affected Lender as described above relates to a LIBOR Loan then being requested
by Company pursuant to a Notice of Borrowing or a Notice of
Conversion/Continuation, Company shall have the option, subject to the
provisions of subsection 2.6D, to rescind such Notice of Borrowing or Notice of
Conversion/Continuation as to all Lenders by giving notice (by telefacsimile or
by telephone confirmed in writing) to Administrative Agent of such rescission on
the date on which the Affected Lender gives notice of its determination as
described above, and Administrative Agent shall promptly notify each other
Lender of the receipt of such notice. Except as provided in the immediately
preceding sentence, nothing in this subsection 2.6C shall affect the obligation
of any Lender other than an Affected Lender to make or maintain Loans as, or to
convert Loans to, LIBOR Loans in accordance with the terms of this Agreement.

D. Compensation For Breakage or Non-Commencement of Interest Periods. Company
shall compensate each Lender, upon written request by that Lender pursuant to
subsection 2.8, for all reasonable losses, expenses and liabilities (including
any interest paid by that Lender to lenders of funds borrowed by it to make or
carry its LIBOR Loans and any loss, expense or liability sustained by that
Lender in connection with the liquidation or re-employment of such funds) which
that Lender may sustain: (i) if for any reason (other than a default by that
Lender) a borrowing of any LIBOR Loan does not occur on a date specified
therefor in a Notice of Borrowing or a telephonic request therefor, or a
conversion to or continuation of any LIBOR Loan does not occur on a date
specified therefor in a Notice of

 

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Conversion/Continuation or a telephonic request therefor, (ii) if any prepayment
or other principal payment or any conversion of any of its LIBOR Loans
(including any prepayment or conversion occasioned by the circumstances
described in subsection 2.6C) occurs on a date prior to the last day of an
Interest Period applicable to that Loan, (iii) if any prepayment of any of its
LIBOR Loans is not made on any date specified in a notice of prepayment given by
Company, or (iv) as a consequence of any other default by Company in the
repayment of its LIBOR Loans when required by the terms of this Agreement.

E. Booking of LIBOR Loans. Any Lender may make, carry or transfer LIBOR Loans
at, to, or for the account of any of its branch offices or the office of an
Affiliate of that Lender.

F. Assumptions Concerning Funding of LIBOR Loans. Calculation of all amounts
payable to a Lender under this subsection 2.6 and under subsection 2.7A shall be
made as though that Lender had funded each of its LIBOR Loans through the
purchase of a LIBOR deposit bearing interest at the rate obtained pursuant to
clause (i) of the definition of LIBOR in an amount equal to the amount of such
LIBOR Loan and having a maturity comparable to the relevant Interest Period,
whether or not its LIBOR Loans had been funded in such manner.

G. LIBOR Loans After Default. After the occurrence of and during the
continuation of a Potential Event of Default or an Event of Default, (i) Company
may not elect to have a Loan be made or maintained as, or converted to, a LIBOR
Loan after the expiration of any Interest Period then in effect for that Loan
and (ii) subject to the provisions of subsection 2.6D, any Notice of Borrowing
or Notice of Conversion/Continuation given by Company with respect to a
requested borrowing or conversion/continuation that has not yet occurred shall
be deemed to be for a Base Rate Loan or, if the conditions to making a Loan set
forth in subsection 4.2 cannot then be satisfied, to be rescinded by Company.

 

  2.7 Increased Costs; Taxes; Capital Adequacy.

A. Compensation for Increased Costs. Subject to the provisions of subsection
2.7B (which shall be controlling with respect to the matters covered thereby),
in the event that any Lender (including any Issuing Lender) shall determine
(which determination shall, absent manifest error, be final and conclusive and
binding upon all parties hereto) that any law, treaty or governmental rule,
regulation or order, or any change therein or in the interpretation,
administration or application thereof (including the introduction of any new
law, treaty or governmental rule, regulation or order), or any determination of
a court or other Government Authority, in each case that becomes effective after
the date hereof, or compliance by such Lender with any guideline, request or
directive issued or made after the date hereof by any central bank or other
Government Authority (whether or not having the force of law):

(i) subjects such Lender to any additional Tax with respect to this Agreement or
any of its obligations hereunder (including with respect to issuing or
maintaining any Letters of Credit or purchasing or maintaining any
participations therein or maintaining any Commitment hereunder) or any payments
to such Lender of principal, interest, fees or any other amount payable
hereunder;

 

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(ii) imposes, modifies or holds applicable any reserve, special deposit,
compulsory loan, insurance charge or similar requirement against assets held by,
or deposits or other liabilities in or for the account of, or advances or loans
by, or other credit extended by, or any other acquisition of funds by, any
office of such Lender (other than any such reserve or other requirements with
respect to LIBOR Loans that are reflected in the definition of Adjusted LIBOR);
or

(iii) imposes any other condition (other than with respect to Taxes) on or
affecting such Lender or its obligations hereunder or the London interbank
market;

and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining its Loans or Commitments or agreeing to
issue, issuing or maintaining any Letter of Credit or agreeing to purchase,
purchasing or maintaining any participation therein or to reduce any amount
received or receivable by such Lender with respect thereto; then, in any such
case, Company shall promptly pay to such Lender, upon receipt of the statement
referred to in subsection 2.8A, such additional amount or amounts (in the form
of an increased rate of, or a different method of calculating, interest or
otherwise as such Lender in its sole discretion shall determine) as may be
necessary to compensate such Lender on an after-tax basis for any such increased
cost or reduction in amounts received or receivable hereunder; provided that
Company shall not be required to compensate a Lender pursuant to this subsection
for any increased cost or reduction in respect of a period occurring more than
six months prior to the date that such Lender notifies Company of such Lender’s
intention to claim compensation therefor unless the circumstances giving rise to
such increased cost or reduction became applicable retroactively, in which case
no such time limitation shall apply so long as such Lender requests compensation
within six months from the date such circumstances become applicable.

 

  B. Taxes.

(i) Payments to Be Free and Clear. All sums payable by Company under this
Agreement and the other Loan Documents shall be paid free and clear of, and
without any deduction or withholding on account of, any Tax imposed, levied,
collected, withheld or assessed by or within the United States of America or any
political subdivision in or of the United States of America or any other
jurisdiction from or to which a payment is made by or on behalf of Company or by
any federation or organization of which the United States of America or any such
jurisdiction is a member at the time of payment.

(ii) Grossing-up of Payments. If Company or any other Person is required by law
to make any deduction or withholding on account of any such Tax from any sum
paid or payable by Company to Administrative Agent or any Lender under any of
the Loan Documents:

(a) Company shall notify Administrative Agent of any such requirement or any
change in any such requirement as soon as Company becomes aware of it;

 

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(b) Company shall pay any such Tax when such Tax is due, such payment to be made
(if the liability to pay is imposed on Company) for its own account or (if that
liability is imposed on Administrative Agent or such Lender, as the case may be)
on behalf of and in the name of Administrative Agent or such Lender;

(c) the sum payable by Company in respect of which the relevant deduction,
withholding or payment is required shall be increased to the extent necessary to
ensure that, after the making of that deduction, withholding or payment,
Administrative Agent or such Lender, as the case may be, receives on the due
date a net sum equal to what it would have received had no such deduction,
withholding or payment been required or made; and

(d) within 30 days after paying any sum from which it is required by law to make
any deduction or withholding, and within 30 days after the due date of payment
of any Tax which it is required by clause (b) above to pay, Company shall
deliver to Administrative Agent evidence satisfactory to the other affected
parties of such deduction, withholding or payment and of the remittance thereof
to the relevant taxing or other authority;

provided that no such additional amount shall be required to be paid to any
Lender under clause (c) above except to the extent that any change after the
date on which such Lender became a Lender in any such requirement for a
deduction, withholding or payment as is mentioned therein shall result in an
increase in the rate of such deduction, withholding or payment from that in
effect on the date on which such Lender became a Lender in respect of payments
to such Lender.

(iii) Evidence of Exemption from U.S. Withholding Tax.

(a) Each Non-US Lender shall deliver to Administrative Agent and to Company, on
or prior to the Closing Date (in the case of each Lender listed on the signature
pages hereof) or on or prior to the date of the Assignment Agreement pursuant to
which it becomes a Lender (in the case of each other Lender), and at such other
times as may be necessary in the determination of Company or Administrative
Agent (each in the reasonable exercise of its discretion), two original copies
of Internal Revenue Service Form W-8BEN or W-8ECI (or any successor forms)
properly completed and duly executed by such Lender, or, in the case of a Non-US
Lender claiming exemption from United States federal withholding tax under
Section 871(h) or 881(c) of the Internal Revenue Code with respect to payments
of “portfolio interest”, a form W-8BEN, and a certificate of such Lender
certifying that such Lender is not (i) a “bank” for purposes of Section 881(c)
of the Internal Revenue Code, (ii) a ten-percent shareholder (within the meaning
of Section 871(h)(3)(B) of the Internal Revenue Code) of Company or Holdings or
(iii) a controlled foreign corporation related to Company (within the meaning of
Section 864(d)(4) of the Internal Revenue Code) in each case together with any
other certificate or statement of exemption required under the Internal

 

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Revenue Code or the regulations issued thereunder to establish that such Lender
is not subject to United States withholding tax with respect to any payments to
such Lender of interest payable under any of the Loan Documents.

(b) Each Non-US Lender, to the extent it does not act or ceases to act for its
own account with respect to any portion of any sums paid or payable to such
Lender under any of the Loan Documents (for example, in the case of a typical
participation by such Lender), shall deliver to Administrative Agent and to
Company, on or prior to the Closing Date (in the case of each Lender listed on
the signature pages hereof), on or prior to the date of the Assignment Agreement
pursuant to which it becomes a Lender (in the case of each other Lender), or on
such later date when such Lender ceases to act for its own account with respect
to any portion of any such sums paid or payable, and at such other times as may
be necessary in the determination of Company or Administrative Agent (each in
the reasonable exercise of its discretion), (1) two original copies of the forms
or statements required to be provided by such Lender under subsection
2.7B(iii)(a), properly completed and duly executed by such Lender, to establish
the portion of any such sums paid or payable with respect to which such Lender
acts for its own account that is not subject to United States withholding tax,
and (2) two original copies of Internal Revenue Service Form W-8IMY (or any
successor forms) properly completed and duly executed by such Lender, together
with any information, if any, such Lender chooses to transmit with such form,
and any other certificate or statement of exemption required under the Internal
Revenue Code or the regulations issued thereunder, to establish that such Lender
is not acting for its own account with respect to a portion of any such sums
payable to such Lender.

(c) Each Non-US Lender hereby agrees, from time to time after the initial
delivery by such Lender of such forms, whenever a lapse in time or change in
circumstances renders such forms, certificates or other evidence so delivered
obsolete or inaccurate in any material respect, that such Lender shall promptly
(1) deliver to Administrative Agent and to Company two original copies of
renewals, amendments or additional or successor forms, properly completed and
duly executed by such Lender, together with any other certificate or statement
of exemption required in order to confirm or establish that such Lender is not
subject to United States withholding tax with respect to payments to such Lender
under the Loan Documents and, if applicable, that such Lender does not act for
its own account with respect to any portion of such payment, or (2) notify
Administrative Agent and Company of its inability to deliver any such forms,
certificates or other evidence.

(d) Company shall not be required to pay any additional amount to any Non-US
Lender under clause (c) of subsection 2.7B(ii), (1) with respect to any Tax
required to be deducted or withheld on the basis of the information,
certificates or statements of exemption such Lender chooses to transmit with an
Internal Revenue Service Form W-8IMY pursuant to subsection 2.7B(iii)(b)(2) or

 

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(2) if such Lender shall have failed to satisfy the requirements of clause (a),
(b) or (c)(1) of this subsection 2.7B(iii); provided that if such Lender shall
have satisfied the requirements of subsection 2.7B(iii)(a) on the date such
Lender became a Lender, nothing in this subsection 2.7B(iii)(d) shall relieve
Company of its obligation to pay any amounts pursuant to subsection 2.7B(ii)(c)
in the event that, as a result of any change in any Applicable Law, treaty or
governmental rule, regulation or order, or any change in the interpretation,
administration or application thereof, such Lender is no longer properly
entitled to deliver forms, certificates or other evidence at a subsequent date
establishing the fact that such Lender is not subject to withholding as
described in subsection 2.7B(iii)(a).

(iv) Treatment of Certain Refunds. If the Administrative Agent, a Lender or an
Issuing Lender determines, in its sole discretion, that it has received a refund
of any Taxes as to which it has been indemnified by Company or with respect to
which Company has paid additional amounts pursuant to this subsection 2.8B, it
shall pay to Company an amount equal to such refund (but only to the extent of
indemnity payments made, or additional amounts paid, by Company under this
subsection 2.8B with respect to the Taxes giving rise to such refund), net of
all out-of-pocket expenses of the Administrative Agent, such Lender or Issuing
Lender, as the case may be, and without interest (other than any interest paid
by the relevant Government Authority with respect to such refund), provided that
Company, upon the request of the Administrative Agent, such Lender or Issuing
Lender, agrees to repay the amount paid over to Company (plus any penalties,
interest or other charges imposed by the relevant Government Authority) to the
Administrative Agent, such Lender or Issuing Lender in the event the
Administrative Agent, such Lender or Issuing Lender is required to repay such
refund to such Governmental Authority. This paragraph shall not be construed to
require the Administrative Agent, any Lender or Issuing Lender to make available
its tax returns (or any other information relating to its taxes that it deems
confidential) to Company or any other Person.

C. Capital Adequacy Adjustment. If any Lender shall have determined, acting
reasonably, that the adoption, effectiveness, phase-in or applicability after
the date hereof of any law, rule or regulation (or any provision thereof)
regarding capital adequacy, or any change therein or in the interpretation or
administration thereof by any Government Authority charged with the
interpretation or administration thereof, or compliance by any Lender with any
guideline, request or directive regarding capital adequacy (whether or not
having the force of law) of any such Government Authority, has or would have the
effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of, or with reference to,
such Lender’s Loans or Commitments or Letters of Credit or participations
therein or other obligations hereunder with respect to the Loans or the Letters
of Credit to a level below that which such Lender or such controlling
corporation could have achieved but for such adoption, effectiveness, phase-in,
applicability, change or compliance (taking into consideration the policies of
such Lender or such controlling corporation with regard to capital adequacy),
then from time to time, within ten Business Days after receipt by Company from
such Lender of the statement referred to in subsection 2.8A, Company shall pay

 

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to such Lender such additional amount or amounts as will compensate such Lender
or such controlling corporation on an after-tax basis for such reduction;
provided that Company shall not be required to compensate a Lender pursuant to
this subsection for any reduction in respect of a period occurring more than six
months prior to the date that such Lender notifies Company of such Lender’s
intention to claim compensation therefor unless the circumstances giving rise to
such reduction become applicable retroactively, in which case no such time
limitation shall apply so long as such Lender requests compensation within six
months from the date such circumstances become applicable.

 

  2.8 Statement of Lenders; Obligation of Lenders and Issuing Lenders to
Mitigate.

A. Statements. Each Lender claiming compensation or reimbursement pursuant to
subsection 2.6D, 2.7 or 2.8B shall deliver to Company (with a copy to
Administrative Agent) a written statement, setting forth in reasonable detail
the basis of the calculation of such compensation or reimbursement, which
statement shall be conclusive and binding upon all parties hereto absent
manifest error.

B. Mitigation. Each Lender and Issuing Lender agrees that, as promptly as
practicable after the officer of such Lender or Issuing Lender responsible for
administering the Loans or Letters of Credit of such Lender or Issuing Lender,
as the case may be, becomes aware of the occurrence of an event or the existence
of a condition that would cause such Lender to become an Affected Lender or that
would entitle such Lender or Issuing Lender to receive payments under subsection
2.7, it will use reasonable efforts to make, issue, fund or maintain the
Commitments of such Lender or the Loans or Letters of Credit of such Lender or
Issuing Lender through another lending or letter of credit office of such Lender
or Issuing Lender, if (i) as a result thereof the circumstances which would
cause such Lender to be an Affected Lender would cease to exist or the
additional amounts which would otherwise be required to be paid to such Lender
or Issuing Lender pursuant to subsection 2.7 would be materially reduced and
(ii) as determined by such Lender or Issuing Lender acting reasonably, such
action would not otherwise be disadvantageous to such Lender or Issuing Lender;
provided that such Lender or Issuing Lender will not be obligated to utilize
such other lending or letter of credit office pursuant to this subsection 2.8B
unless Company agrees to pay all incremental expenses incurred by such Lender or
Issuing Lender as a result of utilizing such other lending or letter of credit
office as described above.

 

  2.9 Replacement of a Lender.

If Company receives a statement of amounts due pursuant to subsection 2.8A from
a Lender, a Revolving Lender defaults in its obligations to fund a Revolving
Loan pursuant to this Agreement, any Lender which is not an Underwriter or an
Affiliate of an Underwriter or an entity whose right and power to vote as a
Lender under this Agreement is controlled by an Underwriter or an Affiliate of
an Underwriter (a “Non-Consenting Lender”) refuses to consent to an amendment,
modification or waiver of this Agreement that, pursuant to subsection 10.6,
requires consent of 100% of the Lenders or 100% of the Lenders with Obligations
directly affected or a Lender becomes an Affected Lender (any such Lender, a
“Subject Lender”), so

 

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long as (i) no Potential Event of Default or Event of Default shall have
occurred and be continuing and Company has obtained a commitment from another
Lender or an Eligible Assignee to purchase at par the Subject Lender’s Loans and
assume the Subject Lender’s Commitments and all other obligations of the Subject
Lender hereunder, (ii) such Lender is not an Issuing Lender with respect to any
Letters of Credit outstanding (unless all such Letters of Credit are terminated
or arrangements acceptable to such Issuing Lender (such as a “back-to-back”
letter of credit) are made) and (iii) if applicable, the Subject Lender is
unwilling to withdraw the notice delivered to Company pursuant to subsection 2.8
and/or is unwilling to remedy its default upon 10 days prior written notice to
the Subject Lender and Administrative Agent, Company may require the Subject
Lender to assign all of its Loans and Commitments to such other Lender, Lenders,
Eligible Assignee or Eligible Assignees pursuant to the provisions of subsection
10.1B; provided that, prior to or concurrently with such replacement, (1) the
Subject Lender shall have received payment in full of all principal, interest,
fees and other amounts (including all amounts under subsections 2.6D, 2.77
and/or 2.8B (if applicable)) through such date of replacement and a release from
its obligations under the Loan Documents, (2) the processing fee required to be
paid by subsection 10.1B(i) shall have been paid to Administrative Agent,
(3) all of the requirements for such assignment contained in subsection 10.1B,
including, without limitation, the consent of Administrative Agent (if required)
and the receipt by Administrative Agent of an executed Assignment Agreement and
other supporting documents, have been fulfilled, and (4) in the event such
Subject Lender is a Non-Consenting Lender, each assignee shall consent, at the
time of such assignment, to each matter in respect of which such Subject Lender
was a Non-Consenting Lender and Company also requires each other Subject Lender
that is a Non-Consenting Lender to assign its Loans and Commitments. For the
avoidance of doubt, if a Lender is a Non-Consenting Lender solely because it
refused to consent to an amendment, modification or waiver that required the
consent of 100% of Lenders with Obligations directly affected thereby (which
amendment, modification or waiver did not accordingly require the consent of
100% of all Lenders), the Loans and Commitments of such Non-Consenting Lender
that are subject to the assignments required by this subsection 2.9 shall
include only those Loans and Commitments that constitute the Obligations
directly affected by the amendment, modification or waiver to which such
Non-Consenting Lender refused to provide its consent.

 

  2.10 Priority and Liens.

A. Superpriority Claims and Liens. Each Loan Party hereby covenants, represents
and warrants that, upon entry of the Interim Order (and the Final Order, as
applicable), the Obligations of the Loan Parties under the Loan Documents:

(i) pursuant to Section 364(c)(1) of the Bankruptcy Code, shall at all times
constitute joint and several allowed administrative expense claims in the Cases
having priority over all administrative expenses of the kind specified in
Sections 503(b), or 507(b) of the Bankruptcy Code (except for proceeds of claims
and causes of action arising under sections 502(d), 544, 545, 547, 548, 549,
550, 551, 553(b), 723(a) or 724(a) of the Bankruptcy Code the “Avoidance
Actions”);

 

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(ii) pursuant to Section 364(c)(2) of the Bankruptcy Code, shall at all times be
secured by a perfected first priority Lien on all tangible and intangible
property of each Loan Party that is not subject to Existing Liens but excluding
the Avoidance Actions;

(iii) pursuant to Section 364(c)(3) of the Bankruptcy Code, shall be secured by
a perfected Lien upon all tangible and intangible property of each Loan Party
that is subject to Existing Liens (other than Primed Liens) and to post-petition
Liens permitted hereunder that secure post-petition Capital Leases or purchase
money financings permitted to be entered into hereunder, junior to such Existing
Liens and the Liens granted in connection with such Capital Leases and purchase
money financings; and

(iv) pursuant to Section 364(d)(1) of the Bankruptcy Code, shall be secured by a
perfected first priority, senior priming Lien on all of the tangible and
intangible property of each Loan Party that secures any Loan Party’s
Indebtedness and other obligations under the Prepetition Facility and any Liens
to which such Liens are senior (but subject to any Existing Liens to which the
Liens being primed hereby are subject or become subject subsequent to the Filing
Date as permitted by Section 546(b) of the Bankruptcy Code), which senior
Priming Liens shall have priority over any Liens granted on or after the Filing
Date to provide adequate protection in respect of the Prepetition Facility;

in the case of each of clauses (i) through (iv) above subject only to (x) on and
after delivery of notice by the Administrative Agent to the Company that an
Event of Default has occurred and the Administrative Agent has delivered a
notice to the Company to the effect that the application of Carve-Out has
occurred (a “Carve-Out Trigger Notice”), the payment of (A) up to $1,000,000 in
the aggregate of allowed and unpaid professional fees and disbursements incurred
by Company and the Guarantors, and any statutory committees appointed in the
Cases, on or after the date of such Event of Default plus (B) the amount of
unpaid professional fees and expenses incurred by Company and Guarantors prior
to the date of the delivery of the Carve-Out Trigger Notice and (y) the payment
of fees pursuant to 28 U.S.C. § 1930 ((x) and (y), together, the “Carve-Out”),
provided that, except as otherwise provided in the Orders (including, without
limitation, investigation rights), no portion of the Carve-Out shall be utilized
for the payment of professional fees and disbursements incurred in connection
with any challenge to the amount, extent, priority, validity, perfection or
enforcement of the indebtedness of Company and the Guarantors owing to the
lenders, agents or indemnified parties under the Loan Documents or the
Prepetition Facility or to the collateral securing the Obligations or the
Prepetition Facility. The Lenders agree that so long as no Event of Default
shall have occurred and be continuing, Company and the Guarantors shall be
permitted to pay compensation and reimbursement of expenses allowed and payable
under 11 U.S.C. § 330 and 11 U.S.C. § 331, as the same may be due and payable,
and the same shall not reduce the Carve-Out. The foregoing shall not be
construed as a consent to the allowance of any fees and expenses referred to
above and shall not affect the right of the Administrative Agent and the Lenders
to object to the allowance and payment of such amounts.

 

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B. Real Property. Subject in all respects to the terms of the Orders, the
priorities set forth in Section 2.10A above and to the Carve-Out, each Loan
Party grants to the Administrative Agent on behalf of the Secured Creditors a
security interest in, and mortgage on, all of the right, title and interest of
such Loan Party in all real property owned or leased by such Loan Party,
together in each case with all of the right, title and interest of such Loan
Party in and to all buildings, improvements, and fixtures related thereto, all
general intangibles relating thereto and all proceeds thereof. Each Loan Party
acknowledges that, pursuant to the Orders, the Liens in favor of the
Administrative Agent on behalf of the Secured Creditors in all of such real
property shall be perfected without the recordation of any instruments of
mortgage or assignment. Each Loan Party agrees that upon the reasonable request
of the Administrative Agent, such Loan Party shall promptly enter into separate
mortgages in recordable form with respect to such properties on terms reasonably
satisfactory to the Collateral Agent.

C. Set Off. Upon the occurrence and during the continuance of any Event of
Default, each Secured Creditor is hereby authorized at any time and from time to
time, to the fullest extent permitted by law and without further order of or
application to the Bankruptcy Court, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) (other than payroll,
trust and tax accounts) at any time held and other indebtedness at any time
owing by each such Secured Creditor to or for the credit or the account of any
Loan Party against any and all of the obligations of such Loan Party under the
Loan Documents, whether or not such obligations are then due. The rights of each
Secured Creditor under this section 2.10C are in addition to other rights and
remedies which such they may have upon the occurrence and during the continuance
of any Event of Default under the Loan Documents or the Orders.

D. Discharge. Each Loan Party agrees that (i) its obligations hereunder shall
not be discharged by the entry of an order confirming any plan of reorganization
(and each Loan Party, pursuant to Section 1141(d)(4) of the Bankruptcy Code,
hereby waives any such discharge) and (ii) the Superpriority Claim granted to
the Secured Creditors pursuant to the Orders and described in Section 2.10A and
the Liens granted to the Administrative Agent pursuant to the Orders and the
Loan Documents shall not be affected in any manner by the entry of an order
confirming any plan of reorganization.

Section 3. LETTERS OF CREDIT

 

  3.1 Issuance of Letters of Credit and Lenders’ Purchase of Participations
Therein.

A. Letters of Credit. Company may request, in accordance with the provisions of
this subsection 3.1, from time to time during the period from the Closing Date
to but excluding the 30th day prior to the Revolving Loan Commitment Termination
Date, that one or more Revolving Lenders issue Letters of Credit for the account
of Company for the general corporate purposes of Company or a Subsidiary of
Company. Subject to the terms and conditions of this Agreement and in reliance
upon the representations and warranties of Company herein set forth, any one or
more Revolving Lenders may, but (except as provided in subsection 3.1B(ii))
shall not be obligated to, issue such Letters of Credit in accordance with the
provisions of this

 

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subsection 3.1; provided that Company shall not request that any Revolving
Lender issue (and no Revolving Lender shall issue):

(i) any Letter of Credit if, after giving effect to such issuance, the Total
Utilization of Revolving Loan Commitments would exceed the Revolving Loan
Commitment Amount then in effect;

(ii) any Letter of Credit if, after giving effect to such issuance, the Letter
of Credit Usage would exceed $20,000,000;

(iii) any Commercial Letter of Credit;

(iv) any Letter of Credit having an expiration date later than the earlier of
(a) five days prior to the Revolving Loan Commitment Termination Date and
(b) the date which is one year from the date of issuance of such Letter of
Credit; provided that the immediately preceding clause (b) shall not prevent any
Issuing Lender from agreeing that a Letter of Credit will automatically be
extended for one or more successive periods not to exceed one year each unless
such Issuing Lender elects not to extend for any such additional period; and
provided, further that such Issuing Lender shall elect not to extend such Letter
of Credit if it has knowledge that an Event of Default has occurred and is
continuing (and has not been waived in accordance with subsection 10.6) at the
time such Issuing Lender must elect whether or not to allow such extension; or

(v) any Letter of Credit denominated in a currency other than Dollars.

B. Mechanics of Issuance.

(i) Request for Issuance. Whenever Company desires the issuance of a Letter of
Credit, it shall deliver to Administrative Agent a Request for Issuance no later
than 1:00 P.M. (New York City time) at least three Business Days or such shorter
period as may be agreed to by the Issuing Lender in any particular instance, in
advance of the proposed date of issuance. The Issuing Lender, in its reasonable
discretion, may require changes in the text of the proposed Letter of Credit or
any documents described in or attached to the Request for Issuance, and may
require an application and/or indemnity of Company in such Issuing Lender’s
customary form. In furtherance of the provisions of subsection 10.8, and not in
limitation thereof, Company may submit Requests for Issuance by telefacsimile
and Administrative Agent and Issuing Lenders may rely and act upon any such
Request for Issuance without receiving an original signed copy thereof. Unless
the Issuing Lender otherwise agrees, no Letter of Credit shall require payment
against a conforming demand for payment to be made thereunder on the same
business day (under the laws of the jurisdiction in which the office of the
Issuing Lender to which such demand for payment is required to be presented is
located) on which such demand for payment is presented if such presentation is
made after 10:00 A.M. (in the time zone of such office of the Issuing Lender) on
such business day.

 

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Company shall notify the applicable Issuing Lender (and Administrative Agent, if
Administrative Agent is not such Issuing Lender) prior to the issuance of any
Letter of Credit in the event that any of the matters to which Company is
required to certify in the applicable Request for Issuance is no longer true and
correct as of the proposed date of issuance of such Letter of Credit, and upon
the issuance of any Letter of Credit, Company shall be deemed to have
re-certified, as of the date of such issuance, as to the matters to which
Company is required to certify in the applicable Request for Issuance.

(ii) Determination of Issuing Lender. Upon receipt by Administrative Agent of a
Request for Issuance pursuant to subsection 3.1B(i) requesting the issuance of a
Letter of Credit, in the event Administrative Agent elects to issue such Letter
of Credit, Administrative Agent shall promptly so notify Company, and
Administrative Agent shall be the Issuing Lender with respect thereto. In the
event that Administrative Agent, in its sole discretion, elects not to issue
such Letter of Credit, Administrative Agent shall promptly so notify Company,
whereupon Company may request any other Revolving Lender to issue such Letter of
Credit by delivering to such Revolving Lender a copy of the applicable Request
for Issuance. Any Revolving Lender so requested to issue such Letter of Credit
shall promptly notify Company and Administrative Agent whether or not, in its
sole discretion, it has elected to issue such Letter of Credit, and any such
Revolving Lender that so elects to issue such Letter of Credit shall be the
Issuing Lender with respect thereto; provided that if more than one Revolving
Lender so elects to issue such Letter of Credit, Company shall determine which
Revolving Lender shall be the Issuing Lender. In the event that all other
Revolving Lenders shall have declined to issue such Letter of Credit,
notwithstanding the prior election of Administrative Agent not to issue such
Letter of Credit, Administrative Agent shall be obligated to issue such Letter
of Credit and shall be the Issuing Lender with respect thereto, notwithstanding
the fact that the Letter of Credit Usage with respect to such Letter of Credit
and with respect to all other Letters of Credit issued by Administrative Agent,
when aggregated with Administrative Agent’s outstanding Revolving Loans and
Swing Line Loans, may exceed the amount of Administrative Agent’s Revolving Loan
Commitment then in effect.

(iii) Issuance of Letter of Credit. Upon satisfaction or waiver (in accordance
with subsection 10.6) of the conditions set forth in subsection 4.3, the Issuing
Lender shall issue the requested Letter of Credit in accordance with the Issuing
Lender’s standard operating procedures.

(iv) Notification to Revolving Lenders. Upon the issuance of or amendment to any
Letter of Credit the applicable Issuing Lender shall promptly notify
Administrative Agent and Company of such issuance or amendment in writing and
such notice shall be accompanied by a copy of such Letter of Credit or
amendment. Upon receipt of such notice (or, if Administrative Agent is the
Issuing Lender, together with such notice), Administrative Agent shall notify
each Revolving Lender in writing of such issuance or amendment and the amount of
such Revolving Lender’s respective participation in such Letter of Credit or
amendment, and, if so requested by a Revolving Lender, Administrative Agent
shall provide such Lender with a copy of such Letter of Credit or amendment.

 

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C. Revolving Lenders’ Purchase of Participations in Letters of Credit.
Immediately upon the issuance of each Letter of Credit, each Revolving Lender
shall be deemed to, and hereby agrees to, have irrevocably purchased from the
Issuing Lender a participation in such Letter of Credit and any drawings honored
thereunder in an amount equal to such Revolving Lender’s Pro Rata Share of the
maximum amount that is or at any time may become available to be drawn
thereunder.

 

  3.2 Letter of Credit Fees.

Company agrees to pay the following amounts with respect to Letters of Credit
issued hereunder:

(i) with respect to each Letter of Credit, (a) a fronting fee, payable directly
to the applicable Issuing Lender for its own account, equal to 0.25% per annum
of the daily amount available to be drawn under such Letter of Credit and (b) a
letter of credit fee, payable to Administrative Agent for the account of
Revolving Lenders, equal to the applicable LIBOR Margin for Revolving Loans
plus, upon the application of increased rates of interest pursuant to subsection
2.2E, 2% per annum, multiplied by the daily amount available to be drawn under
such Letter of Credit, each such fronting fee or letter of credit fee to be
payable in arrears on and to (but excluding) each March 15, June 15,
September 15 and December 15 of each year and computed on the basis of a 360-day
year for the actual number of days elapsed; and

(ii) with respect to the issuance, amendment or transfer of each Letter of
Credit and each payment of a drawing made thereunder (without duplication of the
fees payable under clause (i) above), documentary and processing charges payable
directly to the applicable Issuing Lender for its own account in accordance with
such Issuing Lender’s standard schedule for such charges in effect at the time
of such issuance, amendment, transfer or payment, as the case may be.

For purposes of calculating any fees payable under clause (i) of this subsection
3.2, the daily amount available to be drawn under any Letter of Credit shall be
determined as of the close of business on any date of determination.

 

  3.3 Drawings and Reimbursement of Amounts Paid Under Letters of Credit.

A. Responsibility of Issuing Lender With Respect to Drawings. In determining
whether to honor any drawing under any Letter of Credit by the beneficiary
thereof, the Issuing Lender shall be responsible only to examine the documents
delivered under such Letter of Credit with reasonable care so as to ascertain
whether they appear on their face to be in accordance with the terms and
conditions of such Letter of Credit.

B. Reimbursement by Company of Amounts Paid Under Letters of Credit. In the
event an Issuing Lender has determined to honor a drawing under a Letter of
Credit issued by it, such Issuing Lender shall immediately notify Company and
Administrative Agent, and Company shall reimburse such Issuing Lender on or
before the Business Day immediately

 

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following the date on which such drawing is honored (the “Reimbursement Date”)
in an amount in Dollars and in same day funds equal to the amount of such
payment; provided that, anything contained in this Agreement to the contrary
notwithstanding, (i) unless Company shall have notified Administrative Agent and
such Issuing Lender prior to 1:00 P.M. (New York City time) on the date such
drawing is honored that Company intends to reimburse such Issuing Lender for the
amount of such payment with funds other than the proceeds of Revolving Loans,
Company shall be deemed to have given a timely Notice of Borrowing to
Administrative Agent requesting Revolving Lenders to make Revolving Loans that
are Base Rate Loans on the Reimbursement Date in an amount in Dollars equal to
the amount of such payment and (ii) subject to satisfaction or waiver of the
conditions specified in subsection 4.2B, Revolving Lenders shall, on the
Reimbursement Date, make Revolving Loans that are Base Rate Loans in the amount
of such payment, the proceeds of which shall be applied directly by
Administrative Agent to reimburse such Issuing Lender for the amount of such
payment; and provided, further that if for any reason proceeds of Revolving
Loans are not received by such Issuing Lender on the Reimbursement Date in an
amount equal to the amount of such payment, Company shall reimburse such Issuing
Lender, on demand, in an amount in same day funds equal to the excess of the
amount of such payment over the aggregate amount of such Revolving Loans, if
any, which are so received. Nothing in this subsection 3.3B shall be deemed to
relieve any Revolving Lender from its obligation to make Revolving Loans on the
terms and conditions set forth in this Agreement, and Company shall retain any
and all rights it may have against any Revolving Lender resulting from the
failure of such Revolving Lender to make such Revolving Loans under this
subsection 3.3B.

 

  C. Payment by Lenders of Unreimbursed Amounts Paid Under Letters of Credit.

(i) Payment by Revolving Lenders. In the event that Company shall fail for any
reason to reimburse any Issuing Lender as provided in subsection 3.3B in an
amount equal to the amount of any payment by such Issuing Lender under a Letter
of Credit issued by it, such Issuing Lender shall promptly notify Administrative
Agent, who shall promptly notify each Revolving Lender of the unreimbursed
amount of such honored drawing and of such Revolving Lender’s respective
participation therein based on such Revolving Lender’s Pro Rata Share. Each
Revolving Lender (other than such Issuing Lender) shall make available to
Administrative Agent an amount equal to its respective participation, in
Dollars, in same day funds, at the Funding and Payment Office, not later than
1:00 P.M. (New York City time) on the first Business Day after the date notified
by Administrative Agent, and Administrative Agent shall make available to such
Issuing Lender in Dollars, in same day funds, at the office of such Issuing
Lender on such Business Day the aggregate amount of the payments so received by
Administrative Agent. In the event that any Revolving Lender fails to make
available to Administrative Agent on such Business Day the amount of such
Revolving Lender’s participation in such Letter of Credit as provided in this
subsection 3.3C, such Issuing Lender shall be entitled to recover such amount on
demand from such Revolving Lender together with interest thereon at the rate
customarily used by such Issuing Lender for the correction of errors among banks
for three Business Days and thereafter at the Base Rate. Nothing in this
subsection 3.3C shall be deemed to prejudice the right of Administrative Agent
to

 

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recover, for the benefit of Revolving Lenders, from any Issuing Lender any
amounts made available to such Issuing Lender pursuant to this subsection 3.3C
in the event that it is determined by the final judgment of a court of competent
jurisdiction that the payment with respect to a Letter of Credit by such Issuing
Lender in respect of which payments were made by Revolving Lenders constituted
gross negligence or willful misconduct on the part of such Issuing Lender.

(ii) Distribution to Lenders of Reimbursements Received From Company. In the
event any Issuing Lender shall have been reimbursed by other Revolving Lenders
pursuant to subsection 3.3C(i) for all or any portion of any payment by such
Issuing Lender under a Letter of Credit issued by it, and Administrative Agent
or such Issuing Lender thereafter receives any payments from Company in
reimbursement of such payment under the Letter of Credit, to the extent any such
payment is received by such Issuing Lender, it shall distribute such payment to
Administrative Agent, and Administrative Agent shall distribute to each other
Revolving Lender that has paid all amounts payable by it under subsection
3.3C(i) with respect to such payment such Revolving Lender’s Pro Rata Share of
all payments subsequently received by Administrative Agent or by such Issuing
Lender from Company. Any such distribution shall be made to a Revolving Lender
at the account specified in subsection 2.4B(iii).

 

  D. Interest on Amounts Paid Under Letters of Credit.

(i) Payment of Interest by Company. Company agrees to pay to Administrative
Agent, with respect to payments under any Letters of Credit issued by any
Issuing Lender, interest on the amount paid by such Issuing Lender in respect of
each such payment from the date a drawing is honored to but excluding the date
such amount is reimbursed by Company (including any such reimbursement out of
the proceeds of Revolving Loans pursuant to subsection 3.3B) at a rate equal to
(a) for the period from the date such drawing is honored to but excluding the
Reimbursement Date, the rate then in effect under this Agreement with respect to
Revolving Loans that are Base Rate Loans and (b) thereafter, a rate which is
2% per annum in excess of the rate of interest otherwise payable under this
Agreement with respect to Revolving Loans that are Base Rate Loans. Interest
payable pursuant to this subsection 3.3D(i) shall be computed on the basis of a
365-day or 366-day year, as the case may be, for the actual number of days
elapsed in the period during which it accrues and shall be payable on demand or,
if no demand is made, on the date on which the related drawing under a Letter of
Credit is reimbursed in full.

(ii) Distribution of Interest Payments by Administrative Agent. Promptly upon
receipt by Administrative Agent of any payment of interest pursuant to
subsection 3.3D(i) with respect to a payment under a Letter of Credit,
(a) Administrative Agent shall distribute to (x) each Revolving Lender
(including the Issuing Lender) out of the interest received by Administrative
Agent in respect of the period from the date such drawing is honored to but
excluding the date on which the applicable Issuing Lender is reimbursed for the
amount of such payment (including any such reimbursement out of the proceeds of
Revolving Loans pursuant to subsection 3.3B), the amount that such Revolving
Lender would have been entitled to receive in respect of the letter of credit
fee that would have

 

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been payable in respect of such Letter of Credit for such period pursuant to
subsection 3.2 if no drawing had been honored under such Letter of Credit, and
(y) such Issuing Lender the amount, if any, remaining after payment of the
amounts applied pursuant to clause (x), and (b) in the event such Issuing Lender
shall have been reimbursed by other Revolving Lenders pursuant to subsection
3.3C(i) for all or any portion of such payment, Administrative Agent shall
distribute to each Revolving Lender (including such Issuing Lender) that has
paid all amounts payable by it under subsection 3.3C(i) with respect to such
payment such Revolving Lender’s Pro Rata Share of any interest received by
Administrative Agent in respect of that portion of such payment so made by
Revolving Lenders for the period from the date on which such Issuing Lender was
so reimbursed to but excluding the date on which such portion of such payment is
reimbursed by Company. Any such distribution shall be made to a Revolving Lender
at the account specified in subsection 2.4B(iii).

 

  3.4 Obligations Absolute.

The obligation of Company to reimburse each Issuing Lender for payments under
the Letters of Credit issued by it and to repay any Revolving Loans made by
Revolving Lenders pursuant to subsection 3.3B and the obligations of Revolving
Lenders under subsection 3.3C(i) shall be unconditional and irrevocable and
shall be paid strictly in accordance with the terms of this Agreement under all
circumstances including any of the following circumstances:

(i) any lack of validity or enforceability of any Letter of Credit;

(ii) the existence of any claim, set-off, defense or other right which Company
or any Lender may have at any time against a beneficiary or any transferee of
any Letter of Credit (or any Persons for whom any such transferee may be
acting), any Issuing Lender or other Revolving Lender or any other Person or, in
the case of a Revolving Lender, against Company, whether in connection with this
Agreement, the transactions contemplated herein or any unrelated transaction
(including any underlying transaction between Company or one of its Subsidiaries
and the beneficiary for which any Letter of Credit was procured);

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

(iv) payment by the applicable Issuing Lender under any Letter of Credit against
presentation of a draft or other document which does not substantially comply
with the terms of such Letter of Credit;

(v) any adverse change in the business, operations, properties, assets,
condition (financial or otherwise) or prospects of Company or any of its
Subsidiaries;

(vi) any breach of this Agreement or any other Loan Document by any party hereto
or thereto;

 

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(vii) any other circumstance or happening whatsoever, whether or not similar to
any of the foregoing; or

(viii) the fact that an Event of Default or a Potential Event of Default shall
have occurred and be continuing;

provided, in each case, that payment by the applicable Issuing Lender under the
applicable Letter of Credit shall not have constituted gross negligence or
willful misconduct of such Issuing Lender under the circumstances in question
(as determined by a final judgment of a court of competent jurisdiction).

 

  3.5 Nature of Issuing Lenders’ Duties.

As between Company and any Issuing Lender, Company assumes all risks of the acts
and omissions of, or misuse of the Letters of Credit issued by such Issuing
Lender by, the respective beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, such Issuing Lender shall
not be responsible for: (i) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in connection
with the application for and issuance of any such Letter of Credit, even if it
should in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (ii) the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign any
such Letter of Credit or the rights or benefits thereunder or proceeds thereof,
in whole or in part, which may prove to be invalid or ineffective for any
reason; (iii) failure of the beneficiary of any such Letter of Credit to comply
fully with any conditions required in order to draw upon such Letter of Credit;
(iv) errors, omissions, interruptions or delays in transmission or delivery of
any messages, by mail, cable, telegraph, telex or otherwise, whether or not they
be in cipher; (v) errors in interpretation of technical terms; (vi) any loss or
delay in the transmission or otherwise of any document required in order to make
a drawing under any such Letter of Credit or of the proceeds thereof; (vii) the
misapplication by the beneficiary of any such Letter of Credit of the proceeds
of any drawing under such Letter of Credit; or (viii) any consequences arising
from causes beyond the control of such Issuing Lender, including any act or
omission by a Government Authority, and none of the above shall affect or
impair, or prevent the vesting of, any of such Issuing Lender’s rights or powers
hereunder.

In furtherance and extension and not in limitation of the specific provisions
set forth in the first paragraph of this subsection 3.5, any action taken or
omitted by any Issuing Lender under or in connection with the Letters of Credit
issued by it or any documents and certificates delivered thereunder, if taken or
omitted in good faith, shall not put such Issuing Lender under any resulting
liability to Company.

Notwithstanding anything to the contrary contained in this subsection 3.5,
Company shall retain any and all rights it may have against any Issuing Lender
for any liability arising solely out of the gross negligence or willful
misconduct of such Issuing Lender, as determined by a final judgment of a court
of competent jurisdiction.

 

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Section 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT

The obligations of Lenders to make Loans and the issuance of Letters of Credit
hereunder are subject to the satisfaction of the following conditions.

 

  4.1 Conditions to Initial Revolving Loans and Swing Line Loans.

The obligations of Lenders to make the Revolving Loans and Swing Line Loans
under this Agreement shall become effective as of the Closing Date, subject to
prior or concurrent satisfaction (or waiver by the Requisite Lenders) of the
following conditions (in addition to the conditions precedent specified in
subsection 4.2):

A. Loan Party Documents. On or before the Closing Date each Loan Party shall
deliver to Administrative Agent (with such number of originally executed copies
as may be requested by Administrative Agent) the following with respect to such
Loan Party, each, unless otherwise noted, dated the Closing Date:

(i) Copies of (a) the Organizational Documents of such Person, certified by the
Secretary of State of its jurisdiction of organization, if any, or, if such
document is of a type that may not be so certified, certified by the secretary
or similar officer of such Person, and (b) to the extent generally available,
good standing certificates from the Secretary of State, or other applicable
governmental official, if any, of its jurisdiction of organization and each
other state or jurisdiction in which such Person is qualified to do business
and, to the extent generally available, a certificate or other evidence of good
standing as to payment of any applicable franchise or similar taxes from the
appropriate taxing authority of each of such states or jurisdictions, each dated
a recent date prior to the Closing Date;

(ii) Resolutions of the Governing Body of such Person approving and authorizing
the execution, delivery and performance of the Loan Documents to which it is a
party, certified as of the Closing Date by the secretary or similar officer of
such Person as being in full force and effect without modification or amendment;

(iii) Signature and incumbency certificates of the officers of such Person
executing the Loan Documents to which it is a party;

(iv) Executed originals of the Loan Documents to which such Person is a party;
and

(v) Such other documents as Administrative Agent may reasonably request.

B. Fees. Company shall have paid to Administrative Agent, for distribution (as
appropriate) to Administrative Agent, the Underwriters and Lenders, the fees
payable on the Closing Date referred to in subsection 2.3.

C. Corporate and Capital Structure; Ownership. The corporate organizational
structure, capital structure and ownership of Company and its Subsidiaries shall
be as set forth on Schedule 4.1C annexed hereto.

 

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D. Representations and Warranties; Performance of Agreements. Company shall have
delivered to Administrative Agent an Officer’s Certificate, in form and
substance satisfactory to Administrative Agent, to the effect that the
representations and warranties in Section 5 are true, correct and complete in
all material respects on and as of the Closing Date to the same extent as though
made on and as of that date (or, to the extent such representations and
warranties specifically relate to an earlier date, that such representations and
warranties were true, correct and complete in all material respects on and as of
such earlier date) and that Loan Parties shall have performed in all material
respects all agreements and satisfied all conditions which this Agreement
provides shall be performed or satisfied by it on or before the Closing Date
except as otherwise disclosed to and agreed to in writing by Administrative
Agent; provided that, if a representation and warranty, covenant or condition is
qualified as to materiality, with respect to such representation and warranty,
covenant or condition the applicable materiality qualifier set forth above shall
be disregarded for purposes of this condition.

E. Budget and Cash Flow Projection. The Company shall have delivered to the
Administrative Agent and the Lenders copies of (i) the Budget and (ii) a 13-week
cash flow projection reflecting anticipated cash receipts and disbursements (in
form and substance reasonably satisfactory to the Underwriters) for the 13 week
period following the Closing Date.

F. Litigation. There shall not be pending or threatened any action, suit,
investigation, litigation or proceeding in any court or before any arbitrator or
governmental instrumentality (other than the Cases) that could reasonably be
expected to have a Material Adverse Effect on the Loan Parties, the Loan
Documents or any of the other transactions contemplated hereby.

G. Other Debt. The Loan Parties shall have no existing Indebtedness other than
(i) Indebtedness under the Senior Notes, (ii) Indebtedness under the Prepetition
Facility and (iii) Indebtedness identified on Schedule 7.1.

H. Opinions of Counsel to Loan Parties. Lenders shall have received originally
executed copies of one or more favorable written opinions of King & Spalding
LLP, counsel for Loan Parties, in form and substance reasonably satisfactory to
Administrative Agent and its counsel, dated as of the Closing Date, and as to
such matters as Administrative Agent acting on behalf of Lenders may reasonably
request (this Agreement constituting a written request by Company to such
counsel to deliver such opinions to Lenders).

I. Evidence of Insurance. Administrative Agent shall have received a certificate
from Company’s insurance broker or other evidence satisfactory to it reflecting
that all insurance required to be maintained pursuant to subsection 6.4 is in
full force and effect and that Administrative Agent on behalf of Lenders has
been named as additional insured and/or loss payee thereunder to the extent
required under subsection 6.4.

J. Necessary Governmental Authorizations and Consents; Expiration of Waiting
Periods, Etc. Each Loan Party shall have obtained all Governmental
Authorizations and all consents of other Persons, in each case that are
necessary or advisable in connection with the transactions contemplated by the
Loan Documents, and each such Governmental Authorization and consent shall be in
full force and effect.

 

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K. Security Interests in Personal and Mixed Property. Administrative Agent shall
have received evidence satisfactory to it that each Loan Party shall have taken
or caused to be taken all such actions, executed and delivered or caused to be
executed and delivered all such agreements, documents and instruments, and made
or caused to be made all such filings and recordings (other than the filing or
recording of items described in clauses (i), (ii) and (iii) below) that may be
necessary or, in the opinion of Administrative Agent, desirable in order to
create in favor of Administrative Agent for the benefit of the Secured
Creditors, a valid and (upon such filing and recording) perfected First Priority
security interest in the entire personal and mixed property Collateral. Such
actions shall include the following:

(i) Stock Certificates and Instruments. Delivery to Administrative Agent of
(a) certificates (which certificates shall be accompanied by irrevocable undated
stock powers, duly endorsed in blank and otherwise satisfactory in form and
substance to Administrative Agent) representing all Capital Stock pledged
pursuant to the Security Agreement and (b) all promissory notes or other
instruments (duly endorsed, where appropriate, in a manner satisfactory to
Administrative Agent) evidencing any Collateral;

(ii) Lien Searches and UCC Termination Statements. Delivery to Administrative
Agent of the results of a recent search, by a Person satisfactory to
Administrative Agent, of all effective UCC financing statements and fixture
filings and all judgment and tax lien filings which may have been made with
respect to any personal or mixed property of any Loan Party, together with
copies of all such filings disclosed by such search; and

(iii) UCC Financing Statements and Fixture Filings. Delivery to Administrative
Agent of duly completed UCC financing statements and, where appropriate, fixture
filings, with respect to all personal and mixed property Collateral of such Loan
Party, for filing in all jurisdictions as may be necessary or, in the opinion of
Administrative Agent, desirable to perfect the security interests created
in such Collateral pursuant to the Collateral Documents.

L. Discharge of Existing Indebtedness. Administrative Agent shall have received
an Officer’s Certificate of Company dated as of the Closing Date stating that
the Indebtedness of Loan Parties (other than Indebtedness under the Loan
Documents, the Senior Notes and the Prepetition Facility) shall consist only of
Indebtedness described in Schedule 7.1 annexed hereto. The terms and conditions
of all such Indebtedness shall be in form and in substance satisfactory to
Administrative Agent.

M. Closing Date Borrowing Limit. The Loans requested to be funded on the Closing
Date shall not exceed $10,000,000.

N. Completion of Proceedings. All corporate and other proceedings taken or to be
taken in connection with the transactions contemplated hereby and all documents
incidental

 

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thereto not previously found acceptable by Administrative Agent, if any, acting
on behalf of Lenders, and its counsel shall be satisfactory in form and
substance to Administrative Agent and such counsel, and Administrative Agent and
such counsel shall have received all such counterpart originals or certified
copies of such documents as Administrative Agent may reasonably request.

O. Bankruptcy Court Approval. The Bankruptcy Court shall have, not later than 5
Business Days following the commencement of the Cases, entered an order in form
and substance reasonably satisfactory to the Underwriters (the “Interim Order”),
which Interim Order shall have been entered on such prior notice to such parties
(including, without limitation, the holders of the Primed Liens) as may be
reasonably satisfactory to the Underwriters, which Interim Order shall, among
other things:

(i) approve the transactions contemplated in this Agreement and the other Loan
Documents, including the granting of superpriority claim status and senior
priming and other liens referred to in subsection 2.10 hereof;

(ii) authorize the use of cash collateral under the Prepetition Facility through
the date that is ten days after an Event of Default under this Agreement;

(iii) provide adequate protection in favor of the holders of the Primed Liens in
the form of (x) to the extent of any diminution in value, replacement liens on
all post-petition or otherwise unencumbered assets of each Loan Party’s estates
(other than Avoidance Actions), junior to the liens securing the Obligations,
(y) subject to the rights of all parties under section 506(b) of the Bankruptcy
Code, the payment of reasonable fees and expenses of the administrative agent
under the Prepetition Facility (including the reasonable fees and disbursements
of one lead and one local counsel and one financial advisor) within twenty days
of the presentation of invoices to the Company with respect thereto, and
(z) subject to the rights of all parties under section 506(b) of the Bankruptcy
Code, the payment of interest under the Prepetition Facility at the respective
contractual non-default rates (with the parties’ rights with respect to
additional default interest fully preserved) set forth in the Prepetition
Facility as applicable after an acceleration of the secured obligations
thereunder; and

(iv) provide for the automatic termination of the automatic stay to permit the
Administrative Agent and the other Secured Creditors to exercise their rights
and remedies under this Agreement and the other Loan Documents after five
(5) Business Days notice of an Event of Default, with a full waiver by the Loan
Parties of all rights to contest such termination except with respect to the
existence of an Event of Default; and

(v) approve the payment by the Company of all of the fees set forth herein and
in the DIP Fee Letter.

P. First Day Orders. All of the “first day orders” entered by the Bankruptcy
Court in the Cases shall be reasonably satisfactory in form and substance to the
Underwriters.

 

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  4.2 Conditions to All Loans.

The obligations of each Lender to make its Loans, and of any Issuing Lender to
issue any Letter of Credit, on any Funding Date are subject to the satisfaction
by the Company of the following further conditions precedent:

A. Administrative Agent shall have received before that Funding Date, in
accordance with the provisions of subsection 2.1B, a duly executed Notice of
Borrowing, in each case signed by a duly authorized Officer of Company.

B. As of that Funding Date:

(i) The representations and warranties contained herein and in the other Loan
Documents shall be true, correct and complete in all material respects on and as
of that Funding Date to the same extent as though made on and as of that date,
except to the extent such representations and warranties specifically relate to
an earlier date, in which case such representations and warranties shall have
been true, correct and complete in all material respects on and as of such
earlier date; provided, that, if a representation and warranty is qualified as
to materiality, with respect to such representation and warranty, the
materiality qualifier set forth above shall be disregarded for the purposes of
this condition;

(ii) No event shall have occurred and be continuing or would result from the
consummation of the borrowing contemplated by such Notice of Borrowing that
would constitute an Event of Default or a Potential Event of Default;

(iii) Each Loan Party shall have performed in all agreements and satisfied all
conditions (other than those already satisfied or waived under Subsection 4.1)
which this Agreement provides shall be performed or satisfied by it on or before
that Funding Date;

(iv) No order, judgment or decree of any arbitrator or Government Authority
shall purport to enjoin or restrain such Lender from making the Loans to be made
by it on that Funding Date;

(v) The proceeds of such Loan shall be used by the Company for purposes, and in
amounts, permitted hereunder and consistent with the Budget;

(vi) There has not occurred since September 30, 2007 any change, event,
circumstance or development that, individually or in the aggregate, has had or
could reasonably be expected to have a Material Adverse Effect;

(vii) The Total Utilization of Revolving Loan Commitments after giving effect to
the borrowings contemplated by such Notice of Borrowing shall not exceed the
Revolving Loan Commitment Amount then in effect; and

(viii) The Interim Order shall be in full force and effect or, if the Funding
Date is more than thirty days after the Closing Date or if the Revolving Loan
Exposure after

 

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giving effect to the requested Loan shall exceed the maximum amount authorized
pursuant to the Interim Order, the final order of the Bankruptcy Court (with
respect to which the time to appeal, petition for certiorari, application or
motion for reversal, rehearing, reargument, stay, or modification has expired,
no petition, application or motion for reversal, rehearing, reargument, stay or
modification thereof or for a writ of certiorari with respect thereto has been
filed or granted or the order or judgment of the Bankruptcy Court has been
affirmed by the highest court to which the order or judgment was appealed and is
no longer subject to any or further appeal or petition, application or motion
for reversal, rehearing, reargument, stay or modification thereof or for any
writ of certiorari with respect thereto or further judicial review in any form)
granting final approval of this Agreement and the other Loan Documents (and
permitting such Loan), and substantially in the form of the Interim Order (with
such changes as the Underwriters shall agree) (the “Final Order”), shall have
been entered by the Bankruptcy Court shall be in full force and effect, and
shall not have been stayed, reversed, vacated or otherwise modified.

(ix) The proceeds of such Loan shall not be used (A) to pay professional fees
approved by the Bankruptcy Court (other than ordinary course professional fees
and costs related to the financial audits) of the Loan Parties (the “Loan Party
Professional Fees”) accrued in any month (the “Tested Month”) to the extent that
if, after giving effect to such payment, the aggregate amount of all payments
made by the Loan Parties for the Loan Party Professional Fees accrued from the
Filing Date through and including the Tested Month exceeds the aggregate amount
of such fees set forth for such period in the Budget, plus 15% of such aggregate
amount, or (B) to pay professional fees approved by the Bankruptcy Court (other
than ordinary course professional fees and costs related to the financial
audits) of any creditors’ committee fees (the “Creditors’ Committee Professional
Fees”) accrued in any Tested Month to the extent that if, after giving effect to
such payment, the aggregate amount of all payments made by the Loan Parties for
the Creditors’ Committee Professional Fees accrued from the Filing Date through
and including the Tested Month exceeds the aggregate amount of such fees set
forth for such period in the Budget, plus 15% of such aggregate amount.

 

  4.3 Conditions to Letters of Credit.

The issuance of any Letter of Credit hereunder (whether or not the applicable
Issuing Lender is obligated to issue such Letter of Credit) is subject to the
following conditions precedent:

A. On or before the date of issuance of the initial Letter of Credit pursuant to
this Agreement, the initial Loans shall have been made.

B. On or before the date of issuance of such Letter of Credit, Administrative
Agent shall have received, in accordance with the provisions of subsection
3.1B(i), an originally executed Request for Issuance (or a facsimile copy
thereof) in each case signed by a duly authorized Officer of Company, together
with all other information specified in subsection 3.1B(i) and such other
documents or information as the applicable Issuing Lender may reasonably require
in connection with the issuance of such Letter of Credit.

 

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C. On the date of issuance of such Letter of Credit, all conditions precedent
described in subsection 4.2B shall be satisfied or waived to the same extent as
if the issuance of such Letter of Credit were the making of a Loan.

Section 5. COMPANY’S REPRESENTATIONS AND WARRANTIES

In order to induce Lenders to enter into this Agreement and to make the Loans,
to induce Issuing Lenders to issue Letters of Credit and to induce Revolving
Lenders to purchase participations therein, each Loan Party represents and
warrants to Administrative Agent, each Lender and each Issuing Lender that:

 

  5.1 Organization, Powers, Qualification, Good Standing, Business and
Subsidiaries.

A. Organization and Powers. Each of Holdings and Company is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization as specified in Schedule 5.1 annexed hereto. Each
of Holdings and Company has all requisite power and authority to own and operate
its properties, to carry on its business as now conducted and as proposed to be
conducted, to enter into the Loan Documents to which it is a party and to carry
out the transactions contemplated thereby.

B. Qualification and Good Standing. Each of Holdings and its Subsidiaries is
qualified to do business and is in good standing in every jurisdiction in which
the location of its assets or the conduct of its business requires it to be so
qualified or in good standing, except in jurisdictions where the failure to be
so qualified or in good standing has not had and could not reasonably be
expected to result in a Material Adverse Effect.

C. Conduct of Business. Company and its Subsidiaries are engaged only in the
business permitted to be engaged in pursuant to subsection 7.11, and Holdings is
engaged only in the business permitted to be engaged in pursuant to subsection
8.12.

D. Subsidiaries. All of the Subsidiaries of Company and their jurisdictions of
organization are identified in Schedule 5.1 annexed hereto, as said Schedule 5.1
may be supplemented from time to time pursuant to the provisions of subsection
6.1(xvii). The Capital Stock of Company and each of its Subsidiaries identified
in Schedule 5.1 annexed hereto (as so supplemented) is duly authorized, validly
issued, fully paid and nonassessable (in each case to the extent such legal
concept is applicable to such type of Capital Stock) and none of such Capital
Stock constitutes Margin Stock. Each of the Subsidiaries of Company identified
in Schedule 5.1 annexed hereto (as so supplemented) is a corporation,
partnership, trust or limited liability company duly organized, validly existing
and in good standing under the laws of its respective jurisdiction of
organization set forth therein, has all requisite power and authority to own and
operate its properties and to carry on its business as now conducted and as
proposed to be conducted, and is qualified to do business and in good standing
in every jurisdiction where

 

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its assets are located and wherever necessary to carry out its business and
operations, in each case except where failure to be so qualified or in good
standing or a lack of such power and authority has not had and could not
reasonably be expected to result in a Material Adverse Effect. Schedule 5.1
annexed hereto (as so supplemented) correctly sets forth the ownership interest
of Company and each of its Subsidiaries in each of the Subsidiaries of Company
identified therein.

 

  5.2 Authorization of Borrowing, etc.

A. Authorization of Borrowing. Upon entry of the Interim Order (and the Final
Order, as applicable), the execution, delivery and performance of the Loan
Documents have been duly authorized by all necessary action on the part of each
Loan Party that is a party thereto.

B. No Conflict. The execution, delivery and performance by Loan Parties of the
Loan Documents to which they are parties and the consummation of the
transactions contemplated by the Loan Documents do not and will not (i) violate
any provision of any law or any governmental rule or regulation applicable to
Holdings, Company or any of its Subsidiaries, the Organizational Documents of
Holdings, Company or any of its Subsidiaries or any order, judgment or decree of
any court or other Government Authority binding on Holdings, Company or any of
its Subsidiaries, (ii) conflict with, result in a breach of or constitute (with
due notice or lapse of time or both) a default under any Contractual Obligation
of Holdings, Company or any of its Subsidiaries (other than Contractual
Obligations, the enforcement of which is stayed under the Cases), (iii) result
in or require the creation or imposition of any Lien upon any of the properties
or assets of Holdings, Company or any of its Subsidiaries (other than any Liens
created under any of the Loan Documents in favor of Administrative Agent on
behalf of the Secured Creditors), or (iv) require any approval of stockholders
or any approval or consent of any Person under any Contractual Obligation of
Holdings, Company or any of its Subsidiaries, except for such approvals or
consents which will be obtained on or before the Closing Date and disclosed in
writing to Lenders.

C. Governmental Consents. The execution, delivery and performance by Loan
Parties of the Loan Documents to which they are parties and the consummation of
the transactions contemplated by the Loan Documents do not and will not require
any Governmental Authorization, other than Governmental Authorizations which
have been obtained (including, without limitation, the entry of the Interim
Order (and, when entered, the Final Order)).

D. Binding Obligation. Each of the Loan Documents has been duly executed and
delivered by each Loan Party that is a party thereto and, upon entry of the
Interim Order (and the Final Order, as applicable), is the legally valid and
binding obligation of such Person, enforceable against such Person in accordance
with its respective terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors’
rights generally or by equitable principles relating to enforceability.

 

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  5.3 Financial Condition.

Company has heretofore delivered to Administrative Agent, at Lenders’ request,
the Historical Financial Statements. All such statements other than pro forma or
projected financial statements were prepared in conformity with GAAP and fairly
present, in all material respects, the financial position (on a combined or
consolidated basis, as applicable) of the entities described in such financial
statements as at the respective dates thereof and the results of operations and
cash flows (on a combined or consolidated basis, as applicable) of the entities
described therein for each of the periods then ended, subject, in the case of
any such unaudited financial statements, to changes resulting from audit,
absence of footnotes and normal year-end adjustments. As of the Closing Date,
neither Company nor any of its Subsidiaries has (and immediately following the
funding of the initial Loans will not have) any Contingent Obligation,
contingent liability or liability for taxes, long-term lease or unusual forward
or long-term commitment that is not reflected in the foregoing financial
statements or the notes thereto and, as of any Funding Date subsequent to the
Closing Date, is not reflected in the most recent financial statements delivered
to Administrative Agent pursuant to subsection 6.1 or the notes thereto and
that, in any such case, is material in relation to the business, operations,
properties, assets, condition (financial or otherwise) or prospects of Company
or any of its Subsidiaries (except to the extent incurred after the period
covered by such financial statements and such incurrence is permitted by this
Agreement and except for any such matter that need not in accordance with GAAP,
be reflected in such financial statements and which has been otherwise expressly
disclosed to Administrative Agent in writing).

 

  5.4 No Material Adverse Change; No Restricted Junior Payments.

Since September 30, 2007, no event or change has occurred that has resulted in
or evidences, either in any case or in the aggregate, a Material Adverse Effect
that is continuing. Since the Filing Date, neither Holdings, Company nor any of
Company’s Subsidiaries has directly or indirectly declared, ordered, paid or
made, or set apart any sum or property for, any Restricted Junior Payment or
agreed to do so.

 

  5.5 Title to Properties; Liens; Real Property; Intellectual Property.

A. Title to Properties; Liens. Holdings, Company and its Subsidiaries have
(i) good, sufficient and legal title to (in the case of fee interests in real
property), (ii) valid leasehold interests in (in the case of leasehold interests
in real or personal property), or (iii) good title to (in the case of all other
personal property), all of their respective properties and assets reflected in
the financial statements referred to in subsection 5.3 or in the most recent
financial statements delivered pursuant to subsection 6.1, in each case except
(A) for assets disposed of since the date of such financial statements in the
ordinary course of business, (B) as otherwise permitted under subsection 7.7, or
(C) where failure to have such title could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect. Except as
permitted by this Agreement, all such properties and assets are free and clear
of Liens.

B. Real Property. As of the Closing Date, Schedule 5.5B annexed hereto contains
a true, accurate and complete list of (i) all fee interests in any Real Property
Assets and (ii) all

 

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leases, subleases or assignments of leases (together with all amendments,
modifications, supplements, renewals or extensions of any thereof) affecting
each Real Property Asset, regardless of whether a Loan Party is the landlord or
tenant (whether directly or as an assignee or successor in interest) under such
lease, sublease or assignment. Except as specified in Schedule 5.5B annexed
hereto, as of the Closing Date each agreement listed in clause (ii) of the
immediately preceding sentence is in full force and effect and no post-petition
defaults by any Loan Party currently exist thereunder, and no Loan Party has
knowledge of any defaults by any third party currently existing thereunder, in
any case where any such defaults could reasonably be expected, individually or
in the aggregate, to have a Material Adverse Effect. Each such agreement
constitutes the legally valid and binding obligation of each applicable Loan
Party, enforceable against such Loan Party in accordance with its terms, except
as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors’ rights generally
or by equitable principles.

C. Intellectual Property. As of the Closing Date, Holdings, Company and its
Subsidiaries own or have the right to use, all Intellectual Property used in the
conduct of their business, except where the failure to own or have such right to
use in the aggregate could not reasonably be expected to result in a Material
Adverse Effect. No claim has been asserted and is pending by any Person
challenging or questioning the use of any such Intellectual Property or the
validity or effectiveness of any such Intellectual Property, nor does any Loan
Party know of any valid basis for any such claim, except for such claims that in
the aggregate could not reasonably be expected to result in a Material Adverse
Effect. The use of such Intellectual Property by Holdings, Company and its
Subsidiaries does not infringe on the rights of any Person, except for such
claims and infringements that, in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. All federal, state and foreign
registrations of and applications for Intellectual Property, and all
unregistered Intellectual Property, that are owned or licensed by Holdings,
Company or any of its Subsidiaries on the Closing Date and that are material to
their respective operations are described on Schedule 5.5C annexed hereto.

 

  5.6 Litigation; Adverse Facts.

There are no Proceedings (whether or not purportedly on behalf of Company or any
of its Subsidiaries) at law or in equity, or before or by any court or other
Government Authority (including any Environmental Claims) that are pending or,
to the knowledge of any Loan Party, threatened against Holdings, Company or any
of its Subsidiaries or any property or operations of Holdings, Company or any of
its Subsidiaries and that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect. Neither Holdings nor Company
nor any of its Subsidiaries is in violation of any Applicable Laws (including
Environmental Laws) that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect.

 

  5.7 Payment of Taxes.

Except to the extent permitted by subsection 6.3, all tax returns and reports of
Holdings, Company and its Subsidiaries required to be filed by any of them have
been timely filed, and all post-petition taxes shown on such tax returns to be
due and payable and all post-

 

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petition assessments, fees and other governmental charges upon Holdings, Company
and its Subsidiaries and upon their respective properties, assets, income,
businesses and franchises that are due and payable have been paid when due and
payable, except where failure to do so could not reasonably be expected to have
a Material Adverse Effect. No Loan Party knows of proposed tax assessment for
prior periods against Holdings, Company or any of its Subsidiaries that will not
be promptly paid or contested by Holdings, Company or such Subsidiary in good
faith and by appropriate proceedings; provided that such reserves or other
appropriate provisions, if any, as shall be required in conformity with GAAP
shall have been made or provided therefor during the period that such contest is
pending.

 

  5.8 Governmental Regulation.

Neither Holdings, nor Company nor any of its Subsidiaries is subject to
regulation under the Federal Power Act or the Investment Company Act of 1940 or
under any other federal or state statute or regulation which limits its ability
to incur Indebtedness or which may otherwise render all or any portion of the
Obligations unenforceable.

 

  5.9 Securities Activities.

A. Neither Holdings nor Company nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock.

B. Following application of the proceeds of each Loan, not more than 25% of the
value of the assets (either of Holdings only, Company only or of Company and its
Subsidiaries on a consolidated basis) subject to the provisions of subsection
7.2 or 7.7 or subject to any restriction contained in any agreement or
instrument, between Company and any Lender or any Affiliate of any Lender,
relating to Indebtedness and within the scope of subsection 8.2, will be Margin
Stock.

 

  5.10 Employee Benefit Plans.

A. Holdings, Company, each of its Subsidiaries and each of their respective
ERISA Affiliates are in compliance with all applicable provisions and
requirements of ERISA and the regulations and published interpretations
thereunder with respect to each Employee Benefit Plan, except for instances of
non-compliance that individually or in the aggregate could not reasonably be
expected to result in a Material Adverse Effect, and have performed all their
obligations under each Employee Benefit Plan, except for instances of
non-performance that individually or in the aggregate could not reasonably be
expected to result in a Material Adverse Effect. Except for any formal written
qualification requirement with respect to which the remedial amendment period
set forth in Section 401(b) of the Internal Revenue Code, and regulations and
rulings thereunder, has not expired, each Employee Benefit Plan that is intended
to qualify under Section 401(a) of the Internal Revenue Code is so qualified.

B. No ERISA Event has occurred or is reasonably expected to occur.

 

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C. Except to the extent required under Section 4980B of the Internal Revenue
Code or except as set forth in Schedule 5.11 annexed hereto, no Employee Benefit
Plan provides health or welfare benefits (through the purchase of insurance or
otherwise) for any retired or former employee of Holdings, Company, any of its
Subsidiaries or any of their respective ERISA Affiliates.

D. From and after the Closing Date, as of the most recent annual valuation date
for any Pension Plan, the aggregate amount of the Projected Benefit Obligation
under SFAS No. 158 for all Pension Plans in excess of plan assets (excluding for
purposes of such computation any Pension Plans with respect to which assets
exceed benefit liabilities), does not exceed an amount that could reasonably be
expected to result in a Material Adverse Effect (it being understood that the
amount of such excess existing on the Closing Date shall be deemed not to exceed
an amount that could reasonably be expected to result in a Material Adverse
Effect).

E. As of the Closing Date, there are no Multiemployer Plans. From and after the
Closing Date, as of the most recent valuation date for each Multiemployer Plan
for which the actuarial report is available, the potential liability of
Holdings, Company, its Subsidiaries and their respective ERISA Affiliates for a
complete withdrawal from such Multiemployer Plan (within the meaning of
Section 4203 of ERISA), when aggregated with such potential liability for a
complete withdrawal from all Multiemployer Plans, based on information available
pursuant to Section 4221(e) of ERISA, does not exceed an amount that could
reasonably be expected to have a Material Adverse Effect.

F. As of the date hereof, Holdings, Company and its Subsidiaries have made full
payment when due of all required contributions to any Foreign Plan unless such
nonpayment could not reasonably be expected to cause a Material Adverse Effect.

 

  5.11 Certain Fees.

No broker’s or finder’s fee or commission will be payable with respect to this
Agreement or any of the transactions contemplated hereby, and Company hereby
indemnifies Administrative Agent Lenders against, and agrees that it will hold
Administrative Agent and Lenders harmless from, any claim, demand or liability
for any such broker’s or finder’s fees alleged to have been incurred in
connection herewith and any expenses (including reasonable fees, expenses and
disbursements of counsel) arising in connection with any such claim, demand or
liability.

 

  5.12 Environmental Matters.

Except as set forth in Schedule 5.12 annexed hereto, which individually and in
the aggregate could not reasonably be expected to have any Material Adverse
Effect, and except for such exceptions as individually or in the aggregate could
not reasonably be expected to have a Material Adverse Effect:

(i) neither Holdings, Company nor any of its Subsidiaries nor any of their
respective Facilities or operations are subject to any outstanding written order
or consent

 

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decree by or with a Governmental Authority or any settlement agreement with any
Person, relating to (a) any Environmental Law, (b) any Environmental Claim, or
(c) any Hazardous Materials Activity;

(ii) neither Holdings, Company nor any of its Subsidiaries has received any
letter or request for information under Section 104 of the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C. § 9604) or
any comparable state law;

(iii) to Company’s knowledge, there are and have been no conditions,
occurrences, or Hazardous Materials Activities that could reasonably be expected
to form the basis of an Environmental Claim against Company or any of its
Subsidiaries;

(iv) none of Holdings, Company’s or any of its Subsidiaries’ operations involves
the transportation, treatment, storage or disposal of hazardous waste, that
requires a permit under 40 C.F.R. Parts 263, 264 or 265 or any comparable state
Environmental Law unless such permit has been obtained and is in full force and
effect;

(v) commencing at least three years prior to the Closing Date, an environmental
management system has been maintained for Holdings, Company and its Subsidiaries
that demonstrates a commitment to environmental compliance and includes such
items as procedures for (a) preparing and updating written compliance manuals
addressing applicable Environmental Laws, (b) tracking changes in applicable
Environmental Laws and evaluating operations subject to new requirements
thereunder, (c) training employees to comply with applicable Environmental Laws
and updating such training as necessary, (d) performing internal compliance
audits of each Facility and addressing non-compliance detected by means of such
audits, and (e) reviewing the operations of off-site waste disposal facilities;
and

(vi) Holdings, Company and its Subsidiaries are in compliance with all current
or reasonably foreseeable future requirements pursuant to or under any
applicable Environmental Laws would not, individually or in the aggregate, be
reasonably expected to result in a Material Adverse Effect.

 

  5.13 Employee Matters.

There is no strike or work stoppage in existence or threatened involving
Holdings, Company or any of its Subsidiaries that could reasonably be expected
to result in a Material Adverse Effect.

 

  5.14 Secured Superpriority Obligations.

On and after the Closing Date and the entry of the Interim Order (and, after the
entry of the Final Order, the Final Order), the Interim Order (and the Final
Order, as applicable) and the Loan Documents are sufficient to provide the
Superpriority Claims and Liens described in, and with the priority provided in,
Section 2.10 of this Agreement. The Interim Order (and,

 

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after the entry of the Final Order, the Final Order) is in full force and effect
and has not been vacated, reversed, modified, amended, rescinded or stayed
without the prior written consent of Administrative Agent and the Requisite
Lenders.

 

  5.15 Additional Matters Relating to Collateral.

A. Creation, Perfection and Priority of Liens. The entry of the Interim Order
(and the Final Order, as applicable) and the execution and delivery of the
Collateral Documents by Loan Parties, together with (i) the actions taken to
date pursuant to subsections 4.1K and 6.8, (ii) the delivery to Administrative
Agent of any Pledged Collateral not delivered to Administrative Agent at the
time of execution and delivery of the applicable Collateral Document (all of
which Pledged Collateral has been so delivered) and (iii) when executed and
delivered any actions required pursuant to the Foreign Pledge Agreements are
effective to create in favor of Administrative Agent acting as agent for and
representative of the Secured Parties, as security for the respective Secured
Obligations (as defined in the applicable Collateral Document in respect of any
Collateral), a valid First Priority Lien on substantially all of the Collateral
(except as indicated in the applicable Collateral Document).

B. Governmental Authorizations. No authorization, approval or other action by,
and no notice to or filing with, any Government Authority is required for either
(i) the pledge or grant by any Loan Party of the Liens purported to be created
in favor of Administrative Agent pursuant to any of the Collateral Documents or
(ii) the exercise by Administrative Agent of any rights or remedies in respect
of any Collateral (whether specifically granted or created pursuant to any of
the Collateral Documents or created or provided for by Applicable Law), except
for the entry of the Orders, filings or recordings contemplated by the
Collateral Documents and except as may be required, in connection with the
disposition of any Pledged Collateral by laws generally affecting the offering
and sale of securities.

C. Absence of Third-Party Filings. Except such as may have been filed in favor
of Administrative Agent as contemplated by the Collateral Documents and to
evidence permitted lease obligations and other Liens permitted pursuant to
subsection 7.2, (i) no effective UCC financing statement, fixture filing or
other instrument similar in effect covering all or any part of the Collateral is
on file in any filing or recording office and (ii) no effective filing covering
all or any part of the IP Collateral is on file in any IP Filing Office.

D. Margin Regulations. The pledge of the Pledged Collateral pursuant to the
Collateral Documents does not violate Regulation T, U or X of the Board of
Governors of the Federal Reserve System.

E. Information Regarding Collateral. All information supplied to Administrative
Agent by or on behalf of any Loan Party with respect to any of the Collateral
(in each case taken as a whole with respect to any particular Collateral) is
accurate and complete in all material respects.

 

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  5.16 Disclosure.

As of the Closing Date, no representation or warranty of Holdings, Company or
its Subsidiaries contained in any Loan Document, or in any other document,
certificate or written statement furnished to Lenders by or on behalf of
Holdings, Company or any of their Affiliates for use in connection with the
transactions contemplated by this Agreement contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained herein or therein not misleading in light of the
circumstances in which the same were made. Any projections, budgets and pro
forma financial information contained in such materials are based upon good
faith estimates and assumptions believed by Company to be reasonable at the time
made, it being recognized by Lenders that such projections as to future events
are not to be viewed as facts and that actual results during the period or
periods covered by any such projections may differ from the projected results.
There are no facts known (or which should upon the reasonable exercise of
diligence be known) to any Loan Party (other than matters of a general economic
nature) that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect and that have not been disclosed herein or
in other documents, certificates and statements furnished to Lenders for use in
connection with the transactions contemplated hereby.

 

  5.17 Foreign Assets Control Regulations, etc.

Neither the making of the Loans to, or issuance of Letters of Credit on behalf
of, Company nor its use of the proceeds thereof will violate the Trading with
the Enemy Act, as amended, or any of the foreign assets control regulations of
the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as
amended) or any enabling legislation or executive order relating thereto.
Without limiting the foregoing, neither Holdings, Company nor any of its
Subsidiaries or Affiliates (a) is or will become a Person whose property or
interests in property are blocked pursuant to Section 1 of Executive Order 13224
of September 23, 2001 Blocking Property and Prohibiting Transactions With
Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079
(2001)) or (b) engages or will engage in any dealings or transactions, or be
otherwise associated, with any such Person. Company and its Subsidiaries and
Affiliates are in compliance, in all material respects, with the Uniting And
Strengthening America By Providing Appropriate Tools Required To Intercept And
Obstruct Terrorism (USA Patriot Act of 2001).

Section 6. AFFIRMATIVE COVENANTS

Each Loan Party covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations (other than Unasserted Obligations) and the cancellation
or expiration of all Letters of Credit, unless Requisite Lenders shall otherwise
give prior written consent, such Loan Party shall perform, and shall cause each
of its Subsidiaries to perform, all covenants in this Section 6.

 

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  6.1 Financial Statements and Other Reports.

Each Loan Party will maintain, and cause each of its Subsidiaries to maintain, a
system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in conformity
with GAAP. Company will deliver to Administrative Agent (with sufficient copies
for delivery to all Lenders if so requested by Administrative Agent):

(i) Events of Default, etc.: promptly upon any officer of Company obtaining
knowledge (a) of any condition or event that constitutes an Event of Default or
Potential Event of Default, or becoming aware that any Lender has given any
notice (other than to Administrative Agent) or taken any other action with
respect to a claimed Event of Default or Potential Event of Default, (b) that
any Person has given any notice to Holdings, Company or any of its Subsidiaries
or taken any other action with respect to a claimed default or event or
condition of the type referred to in subsection 8.2, or (c) of the occurrence of
any event or change that has caused or evidences, either in any case or in the
aggregate, a Material Adverse Effect, an Officer’s Certificate specifying the
nature and period of existence of such condition, event or change, or specifying
the notice given or action taken by any such Person and the nature of such
claimed Event of Default, Potential Event of Default, default, event or
condition, and what action Company has taken, is taking and proposes to take
with respect thereto;

(ii) Monthly and Quarterly Financials: as soon as available and in any event
within 30 days after the end of each month and within 45 days after the end of
each Fiscal Quarters of each Fiscal Year (commencing with the month and Fiscal
Quarter ending December 30, 2007), (a) the consolidated balance sheet of each of
(1) Company and its Subsidiaries, (2) Company and each of its Domestic
Subsidiaries (the “Domestic Businesses”) and (3) all of the Company’s Foreign
Subsidiaries (the “Foreign Businesses”), in each case as at the end of such
fiscal period and the related consolidated statements of income and cash flows
of Company and its Subsidiaries, the Domestic Businesses and the Foreign
Businesses for such fiscal period and for the period from the beginning of the
then current Fiscal Year to the end of such fiscal period, setting forth in each
case in comparative form the corresponding figures from the Budget for the
current Fiscal Year, to the extent prepared for such fiscal period, and, in the
case of periods ending on and after December 30, 2007, the corresponding figures
for the corresponding periods of the previous Fiscal Year, all in reasonable
detail and certified by the chief financial officer of Company that they fairly
present, in all material respects, the financial condition of Company and its
Subsidiaries, the Domestic Businesses and the Foreign Businesses, respectively,
as at the dates indicated and the results of their operations and their cash
flows for the periods indicated, subject to changes resulting from audit and
normal year-end adjustments, and (b) a narrative report describing the
operations of Company and its Subsidiaries in the form prepared for presentation
to senior management for such fiscal period and for the period from the
beginning of the then current Fiscal Year to the end of such fiscal period (the
foregoing reports shall be in the same form utilized by Company in its 10Q and
10K filings with the Securities and Exchange Commission);

 

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(iii) Year-End Financials: as soon as available and in any event on or before
April 30, 2008, (a) the consolidated balance sheet of Company and its
Subsidiaries as at the end of the Company’s Fiscal Year ending on December 30,
2007 and the related consolidated statements of income, stockholders’ equity and
cash flows of Company and its Subsidiaries for such Fiscal Year, and setting
forth the corresponding figures for the previous Fiscal Year, all in reasonable
detail and certified by the chief financial officer of Company that they fairly
present, in all material respects, the financial condition of Company and its
Subsidiaries as at the dates indicated and the results of their operations and
their cash flows for the periods indicated, (b) a narrative report describing
the operations of Company and its Subsidiaries in the form prepared for
presentation to senior management for such Fiscal Year, and (c) in the case of
such consolidated financial statements, a report thereon of
PricewaterhouseCoopers LLP or other independent certified public accountants of
recognized national standing selected by Company and satisfactory to
Administrative Agent, which report shall be unqualified other than as to going
concern and shall state that such consolidated financial statements fairly
present, in all material respects, the consolidated financial position of
Company and its Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated in conformity with
GAAP applied on a basis consistent with prior years (except as otherwise
disclosed in such financial statements) and that the examination by such
accountants in connection with such consolidated financial statements has been
made in accordance with U.S. generally accepted auditing standards;

(iv) Compliance Certificates: together with each delivery of monthly and
quarterly financial statements delivered pursuant to subdivision (ii) above,
(a) an Officer’s Certificate of Company stating that the signer has reviewed the
terms of this Agreement and has made, or caused to be made under his
supervision, a review in reasonable detail of the transactions and condition of
Company and its Subsidiaries during the accounting period covered by such
financial statements and that such review has not disclosed the existence at the
end of such accounting period, and that the signer does not have knowledge of
the existence as at the date of such Officer’s Certificate, of any condition or
event that constitutes an Event of Default or Potential Event of Default, or, if
any such condition or event existed or exists, specifying the nature and period
of existence thereof and what action Company has taken, is taking and proposes
to take with respect thereto; and (b) a Compliance Certificate demonstrating
covenant compliance at the end of the applicable accounting periods in the form
of Exhibit VI;

(v) Reconciliation Statements: if, as a result of any change in accounting
principles and policies from those used in the preparation of the audited
financial statements referred to in subsection 5.3, the consolidated financial
statements of Company and its Subsidiaries delivered pursuant to subdivisions
(ii), (iii) or (xi) of this subsection 6.1 will differ in any material respect
from the consolidated financial statements that would have been delivered
pursuant to such subdivisions had no such change in accounting principles and
policies been made, then (a) together with the first delivery of financial
statements pursuant to subdivision (ii), (iii) or (xi) of this subsection 6.1
following such change, consolidated financial statements of Company and its

 

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Subsidiaries for (y) the current Fiscal Year to the effective date of such
change and (z) the two full Fiscal Years immediately preceding the Fiscal Year
in which such change is made, in each case prepared on a pro forma basis as if
such change had been in effect during such periods, and (b) together with each
delivery of financial statements pursuant to subdivision (ii), (iii) or (xi) of
this subsection 6.1 following such change, if required pursuant to subsection
1.2, a written statement of the chief accounting officer or chief financial
officer of Company setting forth the differences (including any differences that
would affect any calculations relating to the financial covenants set forth in
subsection 7.6) which would have resulted if such financial statements had been
prepared without giving effect to such change;

(vi) Accountants’ Reports: promptly upon receipt thereof (unless restricted by
applicable professional standards), copies of all reports submitted to Holdings
or Company by independent certified public accountants in connection with each
annual, interim or special audit of the financial statements of Holdings or
Company and its Subsidiaries made by such accountants, including any comment
letter submitted by such accountants to management in connection with their
annual audit;

(vii) SEC Filings and Press Releases: promptly upon their becoming available,
copies of (a) all regular and periodic reports and all registration statements
(other than on Form S-8 or a similar form) and prospectuses, if any, filed by
Holdings, Company or any of its Subsidiaries with any securities exchange or
with the Securities and Exchange Commission or any governmental or private
regulatory authority, (b) all press releases, notices of material changes and
other statements that Holdings, Company or any of its Subsidiaries would be
required, if they were reporting issuers, to make available generally concerning
material developments in the business of Company or any of its Subsidiaries;

(viii) Litigation or Other Proceedings: promptly upon any Officer of Company
obtaining knowledge of (1) the institution of any Proceeding against Holdings,
Company or any of its Subsidiaries or any property of Holdings, Company or any
of its Subsidiaries not previously disclosed in writing by Company to Lenders or
(2) any material development in any Proceeding that, in any case:

(x) has a reasonable possibility of giving rise to a Material Adverse Effect; or

(y) seeks to enjoin or otherwise prevent the consummation of, or to recover any
damages or obtain relief as a result of, the transactions contemplated hereby;

(z) written notice thereof together with such other information as may be
reasonably available to Company to enable Lenders and their counsel to evaluate
such matters;

 

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(ix) ERISA Events: promptly upon becoming aware of the occurrence of or
forthcoming occurrence of any ERISA Event that results in or could reasonably be
expected to result in liability of Holdings, Company, any of its Subsidiaries or
any of their respective ERISA Affiliates, in excess of $250,000, a written
notice specifying the nature thereof, what action Holdings, Company, any of its
Subsidiaries or any of their respective ERISA Affiliates has taken, is taking or
proposes to take with respect thereto and, when known, any action taken or
threatened by the Internal Revenue Service, the Department of Labor or the PBGC
with respect thereto;

(x) ERISA Notices: with reasonable promptness, copies of (a) all notices
received by Holdings, Company, any of its Subsidiaries or any of their
respective ERISA Affiliates from a Multiemployer Plan sponsor concerning an
ERISA Event; and (b) copies of such other documents or governmental reports or
filings relating to any Employee Benefit Plan as Administrative Agent shall
reasonably request;

(xi) Cash Flow Projection: no later than Thursday of each week, provide the
Administrative Agent with an updated 13-week rolling cash flow projection
reflecting anticipated cash receipts and disbursements (which the Company
acknowledges shall provide additional detail acceptable to the Underwriters with
respect to projections delivered after the date of entry of the Final Order),
together with a comparison of such cash flow projections to the cash flow
projections provided for in the immediately preceding week and an explanation in
reasonable detail of the variance of such actual results from those reflected in
such cash forecast for the preceding period.

(xii) Professional Fees and Expenses: no later than 30 days after each month, a
report detailing for the prior month (i) professional fees and expenses that
have been invoiced but unpaid to date in the Cases, (ii) the accumulated
“hold-back” of professional fees and expenses to date, and (iii) the total
professional fees paid in the Cases during such month and to date.

(xiii) [Intentionally Omitted];

(xiv) [Intentionally Omitted];

(xv) Insurance: as soon as practicable after any material change in insurance
coverage maintained by or for Company and its Subsidiaries notice thereof to
Administrative Agent specifying the changes and reasons therefor;

(xvi) Governing Body: with reasonable promptness, written notice of any change
in the Governing Body of Company;

(xvii) New Subsidiaries: promptly upon any Person becoming a Subsidiary of
Company, a written notice setting forth with respect to such Person (a) the date
on which such Person became a Subsidiary of Company and (b) all of the data
required to be set forth in Schedule 5.1 annexed hereto with respect to all
Subsidiaries of Company (it being understood that such written notice shall be
deemed to supplement Schedule 5.1 annexed hereto for all purposes of this
Agreement from and after the date of delivery of such notice);

 

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(xviii) Notices from Holders of the Senior Notes: promptly, upon receipt, copies
of all notices from holders of the Senior Notes or a trustee, agent or other
representative of such a holder; and

(xix) Other Information: with reasonable promptness, such other information and
data with respect to Holdings, Company or any of its Subsidiaries as from time
to time may be reasonably requested by Administrative Agent.

 

  6.2 Existence, etc.

Except as permitted under subsection 7.7, each Loan Party will, and will cause
each of its Subsidiaries to, at all times preserve and keep in full force and
effect its existence in the jurisdiction of organization specified on Schedule
5.1 and all rights and franchises material to its business; provided, however
that neither Holdings, Company nor any of its Subsidiaries shall be required to
preserve any such right or franchise if the Governing Body of Company or such
Subsidiary shall determine that the preservation thereof is no longer desirable
in the conduct of the business of Holdings, Company or such Subsidiary, as the
case may be, and that the loss thereof is not disadvantageous in any material
respect to Holdings, Company, such Subsidiary or Lenders.

 

  6.3 Payment of Post-Petition Taxes and Claims; Tax.

A. Payment of Taxes. Each Loan Party will, and will cause each of its
Subsidiaries to, pay all post-petition taxes, assessments and other governmental
charges imposed upon it or any of its properties or assets or in respect of any
of its income, businesses or franchises before any penalty accrues thereon, and
all claims (including claims for labor, services, materials and supplies) for
sums that have become due and payable and that by Applicable Law have or may
become a Lien upon any of its properties or assets, prior to the time when any
penalty or fine shall be incurred with respect thereto, provided that in the
case of a post-petition tax, assessment, charge or claim that has or may become
a Lien against any of the Collateral, such Loan Party shall either pay the same,
or shall be contesting the same in good faith by appropriate proceedings
promptly instituted and diligently conducted, and in that regard shall have
established such reserve or other appropriate provision, if any, as shall be
required in conformity with GAAP and such proceedings shall be operating to stay
the sale of any portion of the Collateral to satisfy such charge or claim.

B. Consolidated Returns. Company will not, nor will it permit any of its
Subsidiaries to, file or consent to the filing of any consolidated income tax
return with any Person other than Holdings, but only if no Person (other than
Holdings, any Subsidiary of Holdings engaged only in the businesses and having
only the assets Holdings is permitted to engage in and hold pursuant to
subsection 8.12, Company and its Subsidiaries) is included in such consolidated
tax return.

 

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  6.4 Maintenance of Properties; Insurance; Application of Net Insurance/
Condemnation Proceeds.

A. Maintenance of Properties. Each Loan Party will, and will cause each of its
Subsidiaries to, maintain or cause to be maintained in good repair, working
order and condition, ordinary wear and tear excepted, all material properties
used or useful in the business of Holdings and its Subsidiaries (including all
material Intellectual Property) and from time to time will make or cause to be
made all appropriate repairs, renewals and replacements thereof.

B. Insurance. Company will maintain or cause to be maintained, with financially
sound and reputable insurers, such public liability insurance, third party
property damage insurance, business interruption insurance and casualty
insurance with respect to liabilities, losses or damage in respect of the
assets, properties and businesses of Company and its Subsidiaries as may
customarily be carried or maintained under similar circumstances by corporations
of established reputation engaged in similar businesses, in each case in such
amounts (giving effect to self-insurance), with such deductibles, covering such
risks and otherwise on such terms and conditions as shall be customary for
corporations similarly situated in the industry. Without limiting the generality
of the foregoing, Company will maintain or cause to be maintained (i) flood
insurance with respect to each Flood Hazard Property that is located in a
community that participates in the National Flood Insurance Program, in each
case in compliance with any applicable regulations of the Board of Governors of
the Federal Reserve System, and (ii) replacement value casualty insurance on the
Collateral under such policies of insurance, with such insurance companies, in
such amounts, with such deductibles, and covering such risks as are at all times
satisfactory to Administrative Agent in its commercially reasonable judgment.
Each such policy of insurance shall (a) name Administrative Agent for the
benefit of the Secured Creditors as an additional insured thereunder as its
interests may appear and (b) in the case of each business interruption and
casualty insurance policy, contain a loss payable clause or endorsement,
satisfactory in form and substance to Administrative Agent, that names
Administrative Agent for the benefit of the Secured Creditors as the loss payee
thereunder for any covered loss in excess of $500,000 and provides for at least
30 days prior written notice to Administrative Agent of any modification or
cancellation of such policy.

C. Application of Net Insurance/Condemnation Proceeds.

(i) Business Interruption Insurance. Upon receipt by Company or any of its
Subsidiaries of any business interruption insurance proceeds constituting Net
Insurance/Condemnation Proceeds, (a) so long as no Event of Default shall have
occurred and be continuing, Company or such Subsidiary may retain and apply such
Net Insurance/Condemnation Proceeds for working capital purposes, and (b) if an
Event of Default shall have occurred and be continuing, Company shall apply an
amount equal to such Net Insurance/Condemnation Proceeds to prepay the Loans
(and/or the Revolving Loan Commitment Amount shall be reduced) as provided in
subsections 2.4A and 2.4C.

(ii) Net Insurance/Condemnation Proceeds Received by Company. Upon receipt by
Company or any of its Subsidiaries of any Net Insurance/Condemnation Proceeds
other than from business interruption insurance,

 

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(a) so long as no Event of Default shall have occurred and be continuing, if the
amount of such Net Insurance/Condemnation Proceeds exceed $500,000, Company
shall, or shall cause one or more of its Subsidiaries to, promptly and
diligently apply an amount equal to such Net Insurance/Condemnation Proceeds to
pay or reimburse the costs of repairing, restoring or replacing the assets in
respect of which such Net Insurance/Condemnation Proceeds were received or, to
the extent not so applied within 90 days of receipt, to prepay the Loans (and/or
the Revolving Loan Commitments shall be reduced) as provided in subsection 2.4A,
and

(b) if an Event of Default shall have occurred and be continuing, Company shall
apply an amount equal to such Net Insurance/ Condemnation Proceeds to prepay the
Loans (and/or the Commitments shall be reduced) as provided in subsection 2.4A.

(iii) Net Insurance/Condemnation Proceeds Received by Administrative Agent. Upon
receipt by Administrative Agent of any Net Insurance/Condemnation Proceeds as
loss payee,

(a) if and to the extent Company would have been required to apply such Net
Insurance/Condemnation Proceeds (if it had received them directly) to prepay the
Loans and/or reduce the Revolving Loan Commitments, Administrative Agent shall,
and Company hereby authorizes Administrative Agent to, apply such Net
Insurance/Condemnation Proceeds to prepay the Loans (and/or the Revolving Loan
Commitments shall be reduced) as provided in subsection 2.4A, and

(b) to the extent the foregoing clause (a) does not apply, and (1) the aggregate
amount of such Net Insurance/Condemnation Proceeds received (and reasonably
expected to be received) by Administrative Agent in respect of any covered loss
does not exceed $500,000, Administrative Agent shall deliver such Net
Insurance/Condemnation Proceeds to Company, and Company shall, or shall cause
one or more of its Subsidiaries to, promptly apply such Net
Insurance/Condemnation Proceeds in accordance with subsection 6.4C(ii)(a), and
(2) if the aggregate amount of Net Insurance/Condemnation Proceeds received (and
reasonably expected to be received) by Administrative Agent in respect of any
covered loss exceeds $500,000, Administrative Agent shall hold such Net
Insurance/Condemnation Proceeds in the Collateral Account and, so long as
Company or any of its Subsidiaries proceeds diligently to repair, restore or
replace the assets of Company or such Subsidiary in respect of which such Net
Insurance/Condemnation Proceeds were received, Administrative Agent shall from
time to time disburse to Company or such Subsidiary from the Collateral Account,
to the extent of any such Net Insurance/Condemnation Proceeds remaining therein
in respect of the applicable covered loss, amounts necessary to pay the cost of
such repair, restoration or replacement after the receipt by Administrative
Agent of invoices or other documentation reasonably satisfactory

 

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to Administrative Agent relating to the amount of costs so incurred and the work
performed (including, if required by Administrative Agent, lien releases and
architects’ certificates), provided that if at any time Administrative Agent
reasonably determines (A) that Company or such Subsidiary is not proceeding
diligently with such repair, restoration or replacement or (B) that such repair,
restoration or replacement cannot be completed with the Net
Insurance/Condemnation Proceeds then held by Administrative Agent for such
purpose, together with funds otherwise available to Company for such purpose, or
that such repair, restoration or replacement cannot be completed within 90 days
after the receipt by Administrative Agent of such Net Insurance/Condemnation
Proceeds, Administrative Agent may (if so directed by Requisite Lenders), and
Company hereby authorizes Administrative Agent to, apply such Net Insurance/
Condemnation Proceeds to prepay the Loans (and/or the Revolving Loan Commitments
shall be reduced) as provided in subsection 2.4A.

 

  6.5 Inspection Rights; Lender Meeting.

A. Inspection Rights. Each Loan Party shall, and shall cause each of its
Subsidiaries to, permit any authorized representatives designated by either
Underwriter to visit and inspect any of the properties of Holdings or of any of
its Subsidiaries, to inspect, copy and take extracts from its and their
financial and accounting records, and to discuss its and their affairs, finances
and accounts with its and their officers and independent public accountants
(provided that Company may, if it so chooses, be present at or participate in
any such discussion), and conduct financial audits, all upon reasonable notice
and at such reasonable times during normal business hours and as often as may
reasonably be requested. At any time or from time to time following the
occurrence and during the continuance of an Event of Default, each Loan Party
shall, and shall cause each of its Subsidiaries to, permit such visits and
inspections, extractions, discussions and audits, and shall further permit such
Underwriter to conduct such other environmental or property inspections and
audits as such Underwriter deems appropriate, at the expense of Company.

B. Lender Meeting. Company will, upon the request of Administrative Agent or
Requisite Lenders, participate in a meeting of Administrative Agent and Lenders
once during each Fiscal Year to be held at Company’s principal offices (or at
such other location as may be agreed to by Company and Administrative Agent) at
such time as may be agreed to by Company and Administrative Agent.

 

  6.6 Compliance with Laws, etc.

Each Loan Party shall comply, and shall cause each of its Subsidiaries to
comply, with the requirements of all Applicable Laws (including all
Environmental Laws), except for noncompliance which could not reasonably be
expected to result in, individually or in the aggregate, a Material Adverse
Effect.

 

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  6.7 Environmental Matters.

A. Environmental Disclosure. Company will deliver to Administrative Agent and
Lenders:

(i) Environmental Audits and Reports. As soon as practicable following receipt
thereof, copies of all environmental audits, assessments, studies,
investigations, analyses and reports of any kind or character, whether prepared
by personnel of Company or any of its Subsidiaries or by independent
consultants, governmental authorities or any other Persons, with respect to
significant environmental matters at any Facility that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect
or with respect to any Environmental Claims that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.

(ii) Notice of Certain Releases, Remedial Actions, Etc. Promptly upon the
occurrence thereof, written notice describing in reasonable detail (a) any
Release required to be reported to any Government Authority or Person under any
applicable Environmental Laws, the existence of which Release could reasonably
be expected to result in one or more Environmental Claims having, individually
or in the aggregate, a Material Adverse Effect, and (b) any remedial action
taken by or on behalf of Company or any Government Authority that is required by
any applicable Environmental Law in reference to a Release described in
6.7A(ii)(a) above or is taken in response to (1) any Hazardous Materials
Activities the existence of which could reasonably be expected to result in one
or more Environmental Claims having, individually or in the aggregate, a
Material Adverse Effect, or (2) any Environmental Claims that, individually or
in the aggregate, could reasonably be expected to result in a Material Adverse
Effect.

(iii) Written Communications Regarding Environmental Claims, Releases, Etc. As
soon as practicable following the sending or receipt thereof by Company or any
of its Subsidiaries, a copy of any and all written communications to or from any
Government Authority or unaffiliated third-party with respect to (a) any
Environmental Claims that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect, (b) any Release required to be
reported to any Government Authority or unaffiliated third-party that
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect, and (c) any request for information from any Government
Authority that indicates that it is investigating whether Company or any of its
Subsidiaries may be potentially responsible for any Hazardous Materials Activity
or violation of Environmental Laws that, in either case, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.

(iv) Notice of Certain Proposed Actions Having Environmental Impact. Prompt
written notice describing in reasonable detail (a) any proposed acquisition of
stock, assets, or property by Company or any of its Subsidiaries that could
reasonably be expected to (1) expose Company or any of its Subsidiaries to, or
result in, Environmental Claims that could reasonably be expected to result in,
individually or in the aggregate, a Material Adverse Effect or (2) affect the
ability of Company or any of its Subsidiaries to

 

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maintain in full force and effect all material Governmental Authorizations
required under any Environmental Laws for their respective operations and
(b) any proposed action to be taken by Company or any of its Subsidiaries to
modify current operations in a manner that could reasonably be expected to
subject Company or any of its Subsidiaries to any additional obligations or
requirements under any Environmental Laws that could reasonably be expected to
result in, individually or in the aggregate, a Material Adverse Effect.

B. Company’s Actions Regarding Hazardous Materials Activities, Environmental
Claims and Violations of Environmental Laws.

(i) Remedial Actions Relating to Hazardous Materials Activities. In any case
where individually or in the aggregate failure to do so could reasonably be
expected to result in a Material Adverse Effect, Company shall, in compliance
with all applicable Environmental Laws and Governmental Authorizations, promptly
undertake, or cause to be undertaken, and shall cause each of its Subsidiaries
promptly to undertake or cause to be undertaken, any and all investigations,
studies, sampling, testing, abatement, cleanup, removal, remediation or other
response actions required under any applicable Environmental Law as necessary to
remove, remediate, clean up or abate any Hazardous Materials or Hazardous
Materials Activity on, under or about any Facility or which originated from any
Facility that is in violation of any applicable Environmental Laws or
Governmental Authorizations, and for which Company and/or any of its
Subsidiaries is responsible under any applicable Environmental Law, or that
presents a risk of giving rise to an Environmental Claim against Company or any
of its Subsidiaries.

(ii) Actions with Respect to Environmental Claims and Violations of
Environmental Laws. Company shall promptly take, and shall cause each of its
Subsidiaries promptly to take, any and all actions necessary to (i) cure any
violation of applicable Environmental Laws or Governmental Authorizations by
Company or its Subsidiaries that could reasonably be expected to result in,
individually or in the aggregate, a Material Adverse Effect and (ii) make an
appropriate response to any Environmental Claim against Company or any of its
Subsidiaries and discharge any obligations it may have to any Person thereunder
in any case where individually or in the aggregate failure to do so could
reasonably be expected to result in a Material Adverse Effect.

 

  6.8 Execution of Subsidiary Guaranty and Personal Property Collateral
Documents After the Closing Date.

A. Execution of Subsidiary Guaranty and Personal Property Collateral Documents.
In the event that any Person becomes a Domestic Subsidiary of Company after the
date hereof, Company will promptly notify Administrative Agent of that fact and
cause such Domestic Subsidiary to execute and deliver to Administrative Agent a
counterpart of this Agreement, the Subsidiary Guaranty and Security Agreement
and to take all such further actions and execute all such further documents and
instruments (including actions, documents and instruments comparable to those
described in subsection 4.1K) as may be necessary or, in

 

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the opinion of Administrative Agent, desirable to create in favor of
Administrative Agent for the benefit of the Secured Creditors, a valid and
perfected First Priority Lien on all of the personal and mixed property assets
of such Domestic Subsidiary described in the applicable forms of Collateral
Documents. In addition, as provided in the Security Agreement, Company shall, or
shall cause the Subsidiary that owns the Capital Stock of such Person to,
execute and deliver to Administrative Agent a supplement to the Security
Agreement and to deliver to Administrative Agent all certificates representing
such Capital Stock of such Person (accompanied by irrevocable undated stock
powers, duly endorsed in blank).

B. Foreign Subsidiaries. In the event that any Person becomes a Foreign
Subsidiary of Company after the date hereof (or the entity owning an existing
Foreign Subsidiary changes), Company will promptly notify Administrative Agent
of that fact and, if such Foreign Subsidiary is directly owned by Company or a
Domestic Subsidiary, Company will, or will cause such Subsidiary to, execute and
deliver to Administrative Agent such documents and instruments and take such
further actions (including actions, documents and instruments comparable to
those described in subsection 4.1K) as may be necessary, or in the reasonable
opinion of Administrative Agent, desirable to create in favor of Administrative
Agent, acting as agent for and representative of the Secured Creditors, a valid
and perfected First Priority Lien on 100% of all Capital Stock of such Foreign
Subsidiary. Company shall comply, or cause its Subsidiaries to comply, as
applicable, with subsection 6.8A with respect to any Person which becomes a
Foreign Subsidiary of Company or any of its Subsidiaries after the date hereof
as if it were a Domestic Subsidiary.

C. Subsidiary Organizational Documents, Legal Opinions, etc. Company shall
deliver to Administrative Agent, together with such Loan Documents,
(i) certified copies of such Subsidiary’s Organizational Documents, together
with, if such Subsidiary is a Domestic Subsidiary, a good standing certificate
from the Secretary of State of the jurisdiction of its organization and each
other state in which such Person is qualified to do business and, to the extent
generally available, a certificate or other evidence of good standing as to
payment of any applicable franchise or similar taxes from the appropriate taxing
authority of each of such jurisdictions, each to be dated a recent date prior to
their delivery to Administrative Agent, (ii) a certificate executed by the
secretary or similar officer of such Subsidiary as to (a) the fact that the
attached resolutions of the Governing Body of such Subsidiary approving and
authorizing the execution, delivery and performance of such Loan Documents are
in full force and effect and have not been modified or amended and (b) the
incumbency and signatures of the officers of such Subsidiary executing such Loan
Documents, and (iii) a favorable opinion of counsel to such Subsidiary, in form
and substance satisfactory to Administrative Agent, acting reasonably, as to
(a) the due organization and good standing of such Subsidiary, (b) the due
authorization, execution and delivery by such Subsidiary of such Loan Documents,
(c) the enforceability of such Loan Documents against such Subsidiary and
(d) such other matters (including matters relating to the creation and
perfection of Liens in any Collateral pursuant to such Loan Documents) as
Administrative Agent may reasonably request.

 

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  6.9 Deposit Accounts, Securities Accounts and Cash Management Systems.

Each Loan Party shall, and shall cause each of its Subsidiaries to, use and
maintain its Deposit Accounts, Securities Accounts, and cash management systems
in a reasonable manner and with reputable financial institutions. No Loan Party
shall open any new Deposit Account or Securities Account without the prior
written consent of the Administrative Agent, which consent may be conditioned on
the delivery of fully executed Control Agreements with respect to any such
account.

 

  6.10 Credit Ratings.

As soon as practicable after the Administrative Agent’s request therefor, cause
the credit facility provided for under this Agreement to be assigned a private
Credit Rating by each of S&P and Moody’s, in each case satisfactory to each
Underwriter. Once assigned, the Company shall maintain at all times an S&P and
Moody’s Credit Rating for this credit facility.

 

  6.11 Post-Closing Deliveries.

A. Foreign Pledge Agreements. Company shall as soon as practicable but not later
than 90 days following the Closing Date, or such later date as may be agreed to
by the Administrative Agent in its sole discretion, deliver to the
Administrative Agent (or cause its Subsidiaries to deliver) Foreign Pledge
Agreements pursuant to which 100% of the Capital Stock of each of Propex Canada,
Propex Germany, Propex Brazil, Propex Brazil Propex Servicios, Propex de Mexico,
Propex Hungary, Propex Hungary Holdings and Propex UK shall be pledged to the
Administrative Agent for the benefit of the Secured Creditors under the laws of
the jurisdictions under which such Foreign Subsidiary is organized, and shall
have taken of all such other actions under the laws of such jurisdictions as
Administrative Agent may deem necessary or advisable to perfect or otherwise
protect such Liens, to maintain a First Priority Lien thereon and to confirm the
validity and priority thereof (including, to the extent required by the
Administrative Agent, the delivery of an opinion of local counsel with respect
thereto).

B. Control Agreements. Company shall, and shall cause such Subsidiary to, as
soon as practicable but not later than 20 days following the Closing Date, or
such later date as may be agreed to by the Administrative Agent in its sole
discretion, deliver fully executed Control Agreements with respect to its
Deposit Accounts and Securities Accounts as the Administrative Agent may
reasonably request.

Section 7. NEGATIVE COVENANTS

Each Loan Party covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations (other than Unasserted Obligations) and the cancellation
or expiration of all Letters of Credit, unless Requisite Lenders shall otherwise
give prior written consent, such Loan Party shall perform, and shall cause each
of its Subsidiaries to perform, all covenants in this Section 7.

 

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  7.1 Indebtedness.

Such Loan Party shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or guaranty, or otherwise become
or remain directly or indirectly liable with respect to, any Indebtedness,
except:

(i) such Loan Party may become and remain liable with respect to the
Obligations;

(ii) Company and its Subsidiary Guarantors may become and remain liable with
respect to Contingent Obligations permitted by subsection 7.4 and, upon any
matured obligations actually arising pursuant thereto, the Indebtedness
corresponding to such Contingent Obligations;

(iii) Company and its Subsidiary Guarantors may become and remain liable with
respect to Indebtedness in respect of Capital Leases aggregating not in excess
of $1,000,000 at any one time outstanding;

(iv) Company may become and remain liable with respect to Indebtedness to any
Subsidiary, and any Subsidiary Guarantor of Company may become and remain liable
with respect to Indebtedness to Company or any Subsidiary Guarantor; provided
that (a) a security interest in all such intercompany Indebtedness held by
Company or any Subsidiary Guarantor shall have been granted to Administrative
Agent acting as agent for and representative of the Secured Creditors, (b) if
such intercompany Indebtedness in which a security interest has been granted to
Administrative Agent is evidenced by a promissory note or other instrument, such
promissory note or instrument shall have been pledged to Administrative Agent
pursuant to the Security Agreement, and (c) any such intercompany Indebtedness
not subject to a security interest in favor of the Administrative Agent as
required by clause (a) shall be subordinated in right of payment to the payment
in full of the Obligations pursuant to the promissory note or other agreement
evidencing such Indebtedness;

(v) Company and its Subsidiaries, as applicable, may remain liable with respect
to Indebtedness described in Schedule 7.1 annexed hereto;

(vi) Company may remain liable with respect to Indebtedness evidenced by the
Prepetition Facility;

(vii) Company may remain liable with respect to Indebtedness evidenced by the
Senior Notes in an aggregate principal amount not to exceed $150,000,000; and

(viii) Foreign Subsidiaries may be become and remain liable with respect to
Indebtedness to other Foreign Subsidiaries.

 

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  7.2 Liens and Related Matters.

A. Prohibition on Liens. Such Loan Party shall not, and shall not permit any of
its Subsidiaries to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of Holdings or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the UCC or under any similar recording or notice statute, except:

(i) Permitted Encumbrances;

(ii) Liens on any asset existing at the time of acquisition of such asset by
Company or a Subsidiary, or Liens to secure the payment of all or any part of
the purchase price of an asset upon the acquisition of such asset by Company or
a Subsidiary or to secure any Indebtedness permitted hereby incurred by Company
or a Subsidiary at the time of or within 90 days after the acquisition of such
asset, which Indebtedness is incurred for the purpose of financing all or any
part of the purchase price thereof; provided, however, that the Lien shall apply
only to the asset so acquired and proceeds thereof; and provided further, that
all such Liens do not in the aggregate secure Indebtedness in excess of
$1,000,000 at any time;

(iii) Liens described in Schedule 7.2 annexed hereto;

(iv) Liens securing Indebtedness permitted under subsection 7.1(vi); and

(v) Other Liens securing liabilities in an aggregate amount not to exceed
$50,000 at any time outstanding.

Notwithstanding the foregoing, Company and its Domestic Subsidiaries shall not
enter into, or suffer to exist, any control agreements (as such term is defined
in the UCC) other than the Control Agreements.

Company shall not, and shall not permit any of its Subsidiaries to, permit to
remain in effect for more than 30 days after it becomes aware of the same, any
financing statement or other similar registration with respect to any property,
asset, income or profits of any Loan Party under any security recording or
notice statute, except for any such filing evidencing Liens permitted by this
subsection 7.2, and filings or registrations in respect of interests that do not
relate to Liens.

B. Equitable Lien in Favor of Lenders. If Holdings or any of its Subsidiaries
shall create or assume any Lien upon any of its properties or assets, whether
now owned or hereafter acquired, other than Liens excepted by the provisions of
subsection 7.2A, it shall make or cause to be made effective provision whereby
the Obligations will be secured by such Lien equally and ratably with any and
all other Indebtedness secured thereby as long as any such Indebtedness shall be
so secured; provided that, notwithstanding the foregoing, this covenant shall
not be construed as a consent by Requisite Lenders to the creation or assumption
of any such Lien not permitted by the provisions of subsection 7.2A.

 

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C. No Further Negative Pledges. Neither Company nor any of its Subsidiaries
shall enter into any agreement (other than the Senior Note Indenture and the
Prepetition Facility) prohibiting the creation or assumption of any Lien upon
any of its properties or assets, whether now owned or hereafter acquired to
secure Indebtedness under any senior credit facility, including this Agreement,
except with respect to specific property encumbered to secure payment of
particular Indebtedness.

D. No Restrictions on Subsidiary Distributions to Company or Other Subsidiaries.
Such Loan Party will not, and will not permit any of its wholly-owned
Subsidiaries to, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or consensual restriction of any kind on
the ability of any such Subsidiary to (w) pay dividends or make any other
distributions on any of such Subsidiary’s Capital Stock owned by Company or any
other Subsidiary of Company, (x) repay or prepay any Indebtedness owed by such
Subsidiary to Company or any other Subsidiary of Company, (y) make loans or
advances to Company or any other Subsidiary of Company, or (z) transfer any of
its property or assets to Company or any other Subsidiary of Company, except in
each case, encumbrances or restrictions (a) imposed by this Agreement,
(b) contained in an agreement with respect to an Asset Sale, (c) as provided in
the Senior Note Indenture or the Prepetition Facility or (d) contained in, or
existing by reasons of, any agreement or instrument (i) existing on the date
hereof, (ii) relating to property existing at the time of the acquisition
thereof, so long as the encumbrance or restriction relates only to the property
so acquired, (iii) constituting customary provisions restricting subletting or
assignment of any leases of Company or any Subsidiary or provisions in
agreements that restrict the assignment of such agreement or any rights
thereunder, (iv) constituting restrictions on the sale or other disposition of
any property securing Indebtedness as a result of a Lien on such property
permitted hereunder, (vi) restrictions on net worth or on cash or other deposits
imposed by customers under contracts entered into in the ordinary course of
business, (vii) constituting provisions contained in agreements or instruments
relating to Indebtedness permitted hereunder that prohibit the transfer of all
or substantially all of the assets of the obligor under that agreement or
instrument unless the transferee assumes the obligations of the obligor under
such agreement or instrument, or (ix) constituting any encumbrance or
restriction with respect to property under a lease or other agreement that has
been entered into for the employment or use of such property.

 

  7.3 Investments; Acquisitions.

Such Loan Party shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, make or own any Investment in any Person, including any
Joint Venture, or acquire, by purchase or otherwise, all or any portion of the
business, property or fixed assets of, or Capital Stock of any Person, or any
division or line of business of any Person except:

(i) Company and its Subsidiaries may make and own Investments in Cash and Cash
Equivalents;

 

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(ii) [Intentionally Omitted];

(iii) [Intentionally Omitted];

(iv) Company and its Subsidiaries may make intercompany loans to the extent
permitted under subsection 7.1(iv), 7.1(vii) and 7.1(viii) and own those
intercompany loans permitted under 7.1(v);

(v) Company and its Subsidiaries may make Consolidated Capital Expenditures
permitted by subsection 7.8;

(vi) Company and its Subsidiaries may continue to own the Investments owned by
them on the Closing Date and described in Schedule 7.3 annexed hereto;

(vii) [Intentionally Omitted];

(viii) Foreign Subsidiaries may make and own Investments in other Foreign
Subsidiaries; and

(ix) [Intentionally Omitted];

(x) [Intentionally Omitted];

(xi) Company and its Subsidiaries may acquire Securities in connection with the
satisfaction or enforcement of Indebtedness or claims due or owing to Company or
any of its Subsidiaries or as security for any such Indebtedness or claim.

 

  7.4 Contingent Obligations.

Such Loan Party shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create or become or remain liable with respect to any
Contingent Obligation, except:

(i) Company may become and remain liable with respect to Contingent Obligations
in respect of Letters of Credit;

(ii) [Intentionally Omitted];

(iii) [Intentionally Omitted];

(iv) Company and its Subsidiaries, as applicable, may remain liable with respect
to Contingent Obligations described in Schedule 7.4 annexed hereto;

(v) Holdings may become and remain liable with respect to Contingent Obligations
in respect of the Holdings Guaranty and Subsidiaries of Company may become and
remain liable with respect to Contingent Obligations in respect of the
Subsidiary Guaranty;

 

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(vi) Company and the Subsidiaries may become and remain liable with respect to
Contingent Obligations in respect of any obligation of Company or any Subsidiary
Guarantor not prohibited by this Agreement;

(vii) Foreign Subsidiaries may become and remain liable with respect to
Contingent Obligations in respect of any obligation of any other Foreign
Subsidiary not prohibited by this Agreement; and

(viii) Company may become and remain liable with respect to Contingent
Obligations in respect of obligations of Foreign Subsidiaries under raw material
procurement contracts entered into in the ordinary course of business.

 

  7.5 Restricted Junior Payments.

Such Loan Party shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, declare, order, pay, make or set apart any sum for any
Restricted Junior Payment; provided that Company may make Restricted Junior
Payments to Holdings in an aggregate amount not to exceed $1,000,000 in any
Fiscal Year, to the extent necessary to permit Holdings to pay general
administrative costs and expenses directly attributable to Company and its
Subsidiaries.

 

  7.6 Financial Covenants.

A. Minimum Liquidity.

Company shall not permit Liquidity determined on the last Business Day of each
week ending during any calendar month set forth below to be less than the
correlative amount for such calendar month indicated below:

 

Month Ending:

   Minimum Liquidity

March 31, 2008

   $ 5,000,000

April 30 , 2008

   $ 5,000,000

May 31, 2008

   $ 5,000,000

June 30, 2008

   $ 5,000,000

July 31, 2008

   $ 10,000,000

August 31, 2008

   $ 10,000,000

September 30, 2008

   $ 10,000,000

October 31, 2008

   $ 10,000,000

November 30, 2008

   $ 15,000,000

December 31, 2008

   $ 15,000,000

January 31, 2009

   $ 20,000,000

February 28, 2009

   $ 5,000,000

March 31, 2009

   $ 5,000,000

 

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provided, that notwithstanding the foregoing, (i) Company’s failure to maintain
the Liquidity required hereunder for any week in any month (other than the last
week of such month) shall not be a violation of this covenant unless Company
shall fail to maintain the Liquidity required hereunder for the following week
of such month and (ii) Company’s failure to maintain the Liquidity required
hereunder for the first week of any month in which the Liquidity requirement has
increased from the prior month shall not be a violation of this covenant unless
Company shall have failed to maintain the Liquidity required hereunder for such
week at the level required for such prior month. Within four Business Days of
the end of any week in which the unutilized Revolving Credit Commitment
(determined as at the end of such week) is less that the Liquidity Requirement
for such week, Company agrees to provide the Administrative Agent evidence, in
reasonable detail, of Company’s compliance with this Section 7.6A as at the end
of such week.

B. Minimum Cumulative Consolidated EBITDA.

(i) Company shall not permit Consolidated EBITDA for any period commencing on
January 1, 2008 and ending on the last day of any calendar month set forth
below, on a cumulative basis taken as a single accounting period, to be less
than the correlative amount for such calendar month indicated below:

 

Month Ending:

   Minimum Cumulative Consolidated EBITDA

April 30 , 2008

   $ 4,655,000

May 31, 2008

   $ 7,021,000

June 30, 2008

   $ 10,091,000

July 31, 2008

   $ 12,830,000

August 31, 2008

   $ 14,679,000

September 30, 2008

   $ 18,602,000

October 31, 2008

   $ 22,954,000

November 30, 2008

   $ 25,909,000

December 31, 2008

   $ 27,378,000

(ii) Company shall not permit Consolidated EBITDA for any twelve-month period
ending on the last day of any calendar month set forth below, taken as a single
accounting period, to be less than the correlative amount for such calendar
month indicated below:

 

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Month Ending:

   Minimum Consolidated EBITDA

January 31, 2009

   $ 28,098,000

February 28, 2009

   $ 28,098,000

March 31, 2009

   $ 28,098,000

C. Minimum Cumulative Consolidated Domestic EBITDA.

(i) Company shall not permit Consolidated Domestic EBITDA for any period
commencing on January 1, 2008 and ending on the last day of any calendar month
set forth below, on a cumulative basis taken as a single accounting period, to
be less than the correlative amount for such calendar month indicated below:

 

Month Ending:

   Minimum Cumulative Consolidated
Domestic EBITDA

April 30 , 2008

   $ 700,000

May 31, 2008

   $ 1,425,000

June 30, 2008

   $ 2,325,000

July 31, 2008

   $ 3,825,000

August 31, 2008

   $ 4,550,000

September 30, 2008

   $ 6,400,000

October 31, 2008

   $ 9,000,000

November 30, 2008

   $ 10,500,000

December 31, 2008

   $ 11,500,000

(ii) Company shall not permit Consolidated Domestic EBITDA for any twelve-month
period ending on the last day of any calendar month set forth below, taken as a
single accounting period, to be less than the correlative amount for such
calendar month indicated below:

 

Month Ending:

   Minimum Consolidated Domestic EBITDA

January 31, 2009

   $ 12,000,000

February 28, 2009

   $ 12,000,000

March 31, 2009

   $ 12,000,000

 

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  7.7 Restriction on Fundamental Changes; Asset Sales.

Such Loan Party shall not alter its corporate or legal structure, and such Loan
Party shall not and shall not permit any of its Subsidiaries to enter into any
transaction of merger or consolidation, or liquidate, wind-up or dissolve itself
(or suffer any liquidation or dissolution), or convey, sell, lease or sub-lease
(as lessor or sublessor), transfer or otherwise dispose of, in one transaction
or a series of transactions, all or any part of its business, property or assets
(including its notes or receivables and Capital Stock of a Subsidiary, whether
newly issued or outstanding), whether now owned or hereafter acquired, except:

(i) [Intentionally Omitted];

(ii) any Foreign Subsidiary that is not a Subsidiary Guarantor may be merged
with or into any other Foreign Subsidiary that is not a Subsidiary Guarantor or
be liquidated, wound up or dissolved;

(iii) Company and its Subsidiaries may sell or otherwise dispose of assets in
transactions that do not constitute Asset Sales; provided that the consideration
received for such assets shall be in an amount at least equal to the fair market
value thereof;

(iv) Company and its Subsidiaries may dispose of obsolete, worn out or surplus
property in the ordinary course of business;

(v) [Intentionally Omitted];

(vi) in order to resolve disputes (or settle with non-paying account debtors)
that occur in the ordinary course of business, Company and its Subsidiaries may
discount or otherwise compromise for less than the face value thereof, notes or
accounts receivable;

(vii) Company or a Subsidiary may sell or dispose of shares of Capital Stock of
any of its Subsidiaries in order to qualify members of the Governing Body of the
Subsidiary if and to the extent required by Applicable Law; and

(viii) Company and its Subsidiaries may abandon or otherwise dispose of
Intellectual Property that is no longer used or useful in the business of
Company and its Subsidiaries.

 

  7.8 Consolidated Capital Expenditures.

Company shall not, and shall not permit its Subsidiaries to, make or incur
Consolidated Capital Expenditures for any period commencing on January 1, 2008
and ending on the last day of any calendar month set forth below, on a
cumulative basis, greater than the correlative amount for such calendar month
indicated below:

 

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Month Ending:

   Cumulative Consolidated Capital Expenditures

February 29, 2008

   $ 1,743,000

March 31, 2008

   $ 2,607,000

April 30 , 2008

   $ 3,706,000

May 31, 2008

   $ 4,575,000

June 30, 2008

   $ 5,610,000

July 31, 2008

   $ 6,546,000

August 31, 2008

   $ 7,133,000

September 30, 2008

   $ 7,627,000

October 31, 2008

   $ 8,083,000

November 30, 2008

   $ 8,516,000

December 31, 2008

   $ 9,035,000

January 31, 2009

   $ 9,935,000

February 28, 2009

   $ 10,835,000

March 31, 2009

   $ 11,735,000

 

  7.9 Transactions with Shareholders and Affiliates.

Such Loan Party shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction (including
the purchase, sale, lease or exchange of any property or the rendering of any
service) with any holder of 5% or more of any class of equity Securities of
Company or Holdings or with any Affiliate of Company or of any such holder that
are not in the ordinary course of business of the Loan Party or such
Subsidiaries of that are on terms that are less favorable to such Loan Party or
that Subsidiary, as the case may be, than those that might be obtained at the
time from Persons who are not such a holder or Affiliate; provided that the
foregoing restriction shall not apply to (i) any transaction between Company and
any of its wholly-owned Subsidiaries or between any of its wholly-owned
Subsidiaries, in each case to the extent otherwise permitted hereunder,
(ii) reasonable and customary fees paid to members of the Governing Bodies of
Holdings and its Subsidiaries, and (iii) indemnification payments to officers or
directors of Loan Parties.

 

  7.10 Sales and Lease-Backs.

Such Loan Party shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, become or remain liable as lessee or as a guarantor or
other surety with respect to any lease, whether an Operating Lease or a Capital
Lease, of any property (whether real, personal or mixed), whether now owned or
hereafter acquired, (i) that Holdings or any of its Subsidiaries has sold or
transferred or is to sell or transfer to any other Person (other than

 

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Company or any of its Subsidiaries) or (ii) that Holdings or any of its
Subsidiaries intends to use for substantially the same purpose as any other
property that has been or is to be sold or transferred by Holdings or any of its
Subsidiaries to any Person (other than Holdings or any of its Subsidiaries) in
connection with such lease.

 

  7.11 Conduct of Business.

From and after the Closing Date, such Loan Party shall not, and shall not permit
any of its Subsidiaries to, engage in any business other than (i) the business
conducted by Company and its Subsidiaries as of the Closing Date and similar or
related businesses and (ii) such other lines of business as may be consented to
by Requisite Lenders.

 

  7.12 Prepetition Payments.

No Loan Party shall make any Prepetition Payment other than Prepetition Payments
specifically contemplated in the first-day orders, the Orders, the Budget or
payments in connection with the assumption of any contract or lease approved by
the Bankruptcy Court and consented to by the Administrative Agent.

 

  7.13 Bankruptcy Matters.

No Loan Party shall (i) incur, create, assume, suffer to exist or permit any
other Superpriority Claim which is pari passu with or senior to the claims of
the Administrative Agent and the Secured Creditors against the Loan Parties
hereunder, except for the Carve-Out; (ii) seek or consent to, any modification,
stay, vacation or amendment to (A) any “first day order” having an adverse
effect on the rights of the Lenders under this Agreement, or (B) the Orders;
(iii) seek or consent to any order seeking authority to take any action that is
prohibited by the terms of this Agreement or the other Loan Documents or refrain
from taking any action that is required to be taken by the terms of this
Agreement or any of the other Loan Documents; or (iv) seek or consent to any
plan of reorganization or liquidation unless all of the Obligations are to be
paid in full in cash or other immediately available funds and the arrangements
provided for herein terminated pursuant thereto prior to or contemporaneously
with the effectiveness of such plan.

 

  7.14 Fiscal Year.

Company shall not change its Fiscal Year end from December 31, provided, that,
upon at least 60 days’ prior written notice to Administrative Agent, Company may
change its Fiscal Quarters from calendar quarters to successive 13-week periods,
with its Fiscal Year ending at the end of the 13-week period ending closest to
(but in no event later than) December 31. Any such change in Fiscal Quarters
shall be implemented as of the first day of a calendar quarter (i.e.,
January 1, April 1, July 1 or October 1).

 

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  7.15 Prepayment of Indebtedness.

Such Loan Party shall not, and shall not permit any of its Subsidiaries to, at
any time, directly or indirectly, prepay any Indebtedness or repurchase, redeem,
retire or otherwise acquire any Indebtedness of Holdings or its Subsidiaries
other than the Obligations.

 

  7.16 Certain Expenses.

From and after the Filing Date, the Loan Parties shall not make cash
expenditures for (i) “key employee incentive expenses” in excess of $3,500,000
in the aggregate, (ii) “utility deposits” in excess of $3,000,000 in the
aggregate or (iii) “critical vendor payments” in excess of $10,000,000 in the
aggregate.

Section 8. EVENTS OF DEFAULT

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

 

  8.1 Failure to Make Payments When Due.

(i) Failure by Company to pay any installment of principal of any Loan when due,
whether at stated maturity, by acceleration, by notice of voluntary prepayment,
by mandatory prepayment or otherwise; failure by Company to pay when due any
amount payable to an Issuing Lender in reimbursement of any drawing under a
Letter of Credit; or failure by Company to pay any interest on any Loan or any
fee or any other amount due under this Agreement within five days after the date
due; or

 

  8.2 Default in Other Agreements.

(i) Failure of any Loan Party any of its Subsidiaries to pay when due any
principal of or interest on one or more items of Indebtedness (other than
Indebtedness referred to in subsection 8.1) or Contingent Obligations, in each
case, that is not subject to a stay in the Cases, in an individual principal
amount of $500,000 or more, in each case beyond the end of any grace period
provided therefor; or

(ii) breach or default by any Loan Party or any of its Subsidiaries with respect
to any other term of (a) one or more items of Indebtedness or Contingent
Obligations, in each case, that is not subject to a stay in the Cases, in the
individual or aggregate principal amounts referred to in clause (i) above or
(b) any loan agreement, mortgage, indenture or other agreement relating to such
item(s) of Indebtedness or Contingent Obligation(s), in each case beyond any
applicable grace period, if the effect of such breach or default is to cause, or
to permit the holder or holders of that Indebtedness or Contingent Obligation(s)
(or a trustee on behalf of such holder or holders) to cause, that Indebtedness
or Contingent Obligation(s) to become or be declared due and payable prior to
its stated maturity or the stated maturity of any underlying obligation, as the
case may be; or

 

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  8.3 Breach of Certain Covenants.

Failure of any Loan Party to perform or comply with any term or condition
contained in subsection 2.5, 6.2 or Section 7 of this Agreement; or

 

  8.4 Breach of Warranty.

Any representation, warranty, certification or other statement made by any Loan
Party or any of its Subsidiaries in any Loan Document or in any statement or
certificate at any time given by Company or any of its Subsidiaries in writing
pursuant hereto or thereto or in connection herewith or therewith shall be false
in any material respect on the date as of which made; or

 

  8.5 Other Defaults Under Loan Documents.

Any Loan Party shall default in the performance of or compliance with any term
contained in this Agreement or any of the other Loan Documents, other than any
such term referred to in any other subsection of this Section 8, and such
default shall not have been remedied or waived within thirty days; or

 

  8.6 Defaults Pertaining to Cases.

(i) Any of the Cases shall be dismissed or converted to a case under Chapter 7
of the Bankruptcy Code or Company or any Guarantor shall file a motion or other
pleading seeking the dismissal of any of the Cases under Section 1112 of the
Bankruptcy Code or otherwise; a trustee under Chapter 7 or Chapter 11 of the
Bankruptcy Code, a responsible officer or an examiner with enlarged powers
relating to the operation of the business (powers beyond those set forth in
Section 1106(a)(3) and (4) of the Bankruptcy Code) under Section 1106(b) of the
Bankruptcy Code shall be appointed in any of the Cases; or

(ii) Any Loan Party’s Governing Body shall authorize a liquidation of Company’s
business; or an application shall be filed by Company or any Guarantor for the
approval of any other Superpriority Claim (other than the Carve-Out) in any of
the Cases which is pari passu with or senior to the claims of the Secured
Creditors against Company or any Guarantor hereunder, or there shall arise or be
granted any such pari passu or senior administrative expense claim; or

(iii) the Bankruptcy Court shall enter an order or orders granting relief from
the automatic stay applicable under Section 362 of the Bankruptcy Code to the
holder or holders of any security interest to permit foreclosure (or the
granting of a deed in lieu of foreclosure or the like) on any Collateral with a
value in an amount equal to or exceeding $100,000 in the aggregate; or

(iv) failure by the Bankruptcy Court to enter the Final Order within 30 days of
the Closing Date; or

 

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(v) Company has not (a) delivered to the Administrative Agent and Lenders a
comprehensive five (5) year business plan and projections on or before the six
(6) month anniversary of the Filing Date, (b) delivered to the Administrative
Agent and Lenders a proposed plan of reorganization on or before the eight
(8) month anniversary of the Filing Date, and (c) filed with the Bankruptcy
Court a proposed plan of reorganization and accompanying disclosure statement,
which documents contain all material terms and conditions, by the nine (9) month
anniversary of the Filing Date; or

(vi) an order of the Bankruptcy Court shall be entered reversing, staying for a
period in excess of 5 Banking Days, vacating or (without the consent of the
Administrative Agent and the Requisite Lenders) otherwise amending,
supplementing or modifying the Orders or any Loan Document; or

(vii) any Loan Party shall make any Prepetition Payment other than Prepetition
Payments specifically contemplated in the first-day orders, the Orders, the
Budget or payments in connection with the assumption of any contract or lease
approved by the Bankruptcy Court and consented to by the Administrative Agent;
or

(viii) any Loan Party shall support (in any such case by way of any motion or
other pleading filed with the Bankruptcy Court or any other writing to another
party-in-interest executed by or on behalf of any such Loan Party) any other
Person’s opposition of, any motion made in the Bankruptcy Court by the
Administrative Agent, any Lender or prepetition lender or administrative agent
seeking confirmation of the amount of such Person’s claim or the validity or
enforceability of the Liens in favor of the Administrative Agent or the Liens
securing the obligations under the Prepetition Facility; or

(ix) any Loan Party shall seek to, or shall support (in any such case by way of
any motion or other pleading filed with the Bankruptcy Court or any other
writing to another party-in-interest executed by or on behalf of the Borrower)
any other Person’s motion to disallow in whole or in part the claim of any
lender or the administrative agent under the Prepetition Facility or the claim
of the Administrative Agent or any other Secured Creditor in respect of the
Obligations or to challenge the validity, perfection and enforceability of any
of the Liens in favor of the any of them; or

(x) any plan or reorganization in the Cases that fails to pay the Obligations
indefeasibly in full in cash on the effective date of said plan of
reorganization is confirmed by the Bankruptcy Court; or

(xi) any failure by Company to make any adequate protection payment when due
with respect to the Prepetition Facility that is contemplated in the first-day
orders (as in effect on the Closing Date) or the Orders (including, without
limitation, the payment of interest under the Prepetition Facility and the
payment of fees and expenses of the administrative agent thereunder); or any
failure by any Loan Party fail to provide, or any unenforceability or other
failure of (whether resulting from a reversal, stay, vacation or modification of
any such order or otherwise), of any other adequate protection (including
replacement Liens) provided to the administrative agent or lenders under the
Prepetition Facility in the first day orders (as in effect on the Closing Date)
or the Orders; or

 

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  8.7 Judgments and Attachments.

Any money judgment, writ or warrant of attachment or similar process that is not
subject to a stay in the Cases involving (i) in any individual case an amount in
excess of $500,000, in either case to the extent not covered by insurance as to
which a solvent and unaffiliated insurance company that has not denied coverage
in writing or covered by an indemnification from the Propex Seller for which
Propex Seller has acknowledged responsibility in writing, shall be entered or
filed against any Loan Party or any of its Subsidiaries or any of their
respective assets and shall remain undischarged, unvacated, unbonded or unstayed
for a period of 60 days (or in any event later than five days prior to the date
of any proposed sale thereunder); or

 

  8.8 Dissolution.

Any order, judgment or decree of a court of competent jurisdiction shall be
entered against any Loan Party or any of its Subsidiaries decreeing the
dissolution or split up of any Loan Party or that Subsidiary and such order
shall remain undischarged or unstayed for a period in excess of 60 days; or

 

  8.9 Employee Benefit Plans.

There shall occur one or more ERISA Events or similar events in respect of any
Foreign Plans, that individually or in the aggregate has resulted in liability
of Company, any of its Subsidiaries or any of their respective ERISA Affiliates
in excess of $500,000 during the term of this Agreement; or there shall exist an
amount of unfunded benefit liabilities (as defined in Section 4001(a)(18) of
ERISA) and unfunded liabilities in respect of Foreign Plans, individually or in
the aggregate for all Pension Plans (excluding for purposes of such computation
any Pension Plans with respect to which assets exceed benefit liabilities),
which could reasonably be expected to have a Material Adverse Effect; or

 

  8.10 Change in Control.

A Change in Control shall have occurred; or

 

  8.11 Invalidity of Loan Documents; Failure of Security; Repudiation of
Obligations.

At any time after the execution and delivery thereof, (i) any Loan Document or
any provision thereof, for any reason other than the satisfaction in full of all
Obligations, shall cease to be in full force and effect (other than in
accordance with its terms) (ii) any Loan Document or any provision thereof shall
be declared to be null and void, (iii) Administrative Agent shall not have or
shall cease to have a valid and perfected First Priority Lien in any Collateral
purported to be covered by the Collateral Documents having a fair market value

 

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exceeding, individually or in the aggregate, 5% of the fair market value of the
Collateral, in each case for any reason other than the failure of Administrative
Agent or any Lender to take any action within its control, or (iv) any Loan
Party shall contest the validity or enforceability of any Loan Document or any
provision thereof in writing or deny in writing that it has any further
liability, including with respect to future advances by Lenders, under any Loan
Document or any provision thereof to which it is a party unless, in the case of
clause (i) above, such unenforceability is capable of remedy and the applicable
Loan Party remedies such unenforceability within 30 days of it being determined,
or in the case of clause (ii) above such Loan Party appeals such declaration and
has it finally overturned within 30 days of such declaration having been made,
in which case the unenforceability, declaration or failure shall not constitute
an Event of Default; or

 

  8.12 Conduct of Business By Holdings.

Holdings shall own any assets other than (a) investments in Company and other
Persons, and (b) Cash and Cash Equivalents;

THEN, subject to the terms, conditions and provisions of the Orders and upon the
occurrence and during the continuation of any other Event of Default,
Administrative Agent may, and upon the written request or with the written
consent of Requisite Lenders, by written notice to Company and without further
order of or application to the Bankruptcy Court, the Administrative Agent shall
(a) declare all or any portion of the Obligations to be, and the same shall
forthwith become, immediately due and payable, and the obligation of each Lender
to make any Loan, the obligation of Administrative Agent to issue any Letter of
Credit and the right of any Lender to issue any Letter of Credit hereunder shall
thereupon terminate; provided that the foregoing shall not affect in any way the
obligations of Revolving Lenders under subsection 3.3C(i) or the obligations of
Revolving Lenders to purchase assignments of any unpaid Swing Line Loans as
provided in subsection 2.1A(ii) and (b) the Administrative Agent and the Lenders
may exercise all rights and remedies that it may have under this Agreement, the
other Loan Documents, the Orders, and applicable law with respect to such Event
of Default, provided that the Administrative Agent may not exercise any remedies
against any Collateral unless it shall have given five (5) Business Days’ prior
written notice to Company (with a copy to counsel for the Official Creditors’
Committee appointed in the any of the Cases, and to the United States Trustee
for the District in which the Cases are pending). In any hearing regarding any
exercise of rights or remedies by the Administrative Agent or the Lenders
hereunder or under any of the other Loan Documents, each Loan Party agrees that
the only issue that may be raised by any party in opposition thereto shall be
whether, in fact, an Event of Default has occurred and is continuing, and the
each Loan Party hereby waives its right to seek relief, including, without
limitation, under Section 105 of the Bankruptcy Code, to the extent such relief
would in any way impair or restrict the rights and remedies of the
Administrative Agent and the Lenders set forth herein and in the other Loan
Documents.

Any amounts described in clause (b) above, when received by Administrative
Agent, shall be held by Administrative Agent pursuant to the terms of the
Security Agreement and shall be applied as therein provided.

 

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Section 9. ADMINISTRATIVE AGENT

 

  9.1 Appointment.

A. Appointment of Administrative Agent. BNP Paribas is hereby appointed
Administrative Agent hereunder and under the other Loan Documents. Each Lender
hereby authorizes Administrative Agent to act as its agent in accordance with
the terms of this Agreement and the other Loan Documents. Administrative Agent
agrees to act upon the express conditions contained in this Agreement and the
other Loan Documents, as applicable. Except for subsections 9.1B, 9.5 and 9.6,
the provisions of this Section 9 are solely for the benefit of Administrative
Agent and Lenders and no Loan Party shall have rights as a third party
beneficiary of any of the provisions thereof. In performing its functions and
duties under this Agreement, Administrative Agent (other than as provided in
subsection 2.1D) shall act solely as an agent of the Secured Creditors and does
not assume and shall not be deemed to have assumed any obligation towards or
relationship of agency or trust with or for Company or any other Loan Party.

B. Appointment of Supplemental Collateral Agents. It is the purpose of this
Agreement and the other Loan Documents that there shall be no violation of any
law of any jurisdiction denying or restricting the right of banking corporations
or associations to transact business as agent or trustee in such jurisdiction.
It is recognized that in case of litigation under this Agreement or any of the
other Loan Documents, and in particular in case of the enforcement of any of the
Loan Documents, or in case Administrative Agent deems that by reason of any
present or future law of any jurisdiction it may not exercise any of the rights,
powers or remedies granted herein or in any of the other Loan Documents or take
any other action which may be desirable or necessary in connection therewith, it
may be necessary that Administrative Agent appoint an additional individual or
institution as a separate trustee, co-trustee, collateral agent or collateral
co-agent (any such additional individual or institution being referred to herein
individually as a “Supplemental Collateral Agent” and collectively as
“Supplemental Collateral Agents”).

In the event that Administrative Agent appoints a Supplemental Collateral Agent
with respect to any Collateral, (i) each and every right, power, privilege or
duty, and each obligation, expressed or intended by this Agreement or any of the
other Loan Documents to be exercised by or vested in or conveyed to
Administrative Agent or to which the Administrative Agent is subject, with
respect to such Collateral shall be exercisable by and vest in such Supplemental
Collateral Agent to the extent, and only to the extent, necessary to enable such
Supplemental Collateral Agent to exercise such rights, powers and privileges
with respect to such Collateral as if such Supplemental Collateral Agent were
the Administrative Agent and to perform such duties with respect to such
Collateral, and every covenant and obligation contained in the Loan Documents
and necessary to the exercise or performance thereof by and against such
Supplemental Collateral Agent shall run to and be enforceable by and against
either Administrative Agent or such Supplemental Collateral Agent, and (ii) the
provisions of this Section 9 and of subsections 10.2 and 10.3 that refer to
Administrative Agent shall inure to the benefit of such Supplemental Collateral
Agent and all references therein to Administrative Agent shall be deemed to be
references to Administrative Agent and/or such Supplemental Collateral Agent, as
the context may require.

 

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Should any instrument in writing from Company or any other Loan Party be
required by any Supplemental Collateral Agent so appointed by Administrative
Agent for more fully and certainly vesting in and confirming to him or it such
rights, powers, privileges and duties, Company shall, or shall cause such Loan
Party to, execute, acknowledge and deliver any and all such instruments promptly
upon request by Administrative Agent. In case any Supplemental Collateral Agent,
or a successor thereto, shall die, become incapable of acting, resign or be
removed, all the rights, powers, privileges and duties of such Supplemental
Collateral Agent, to the extent permitted by law, shall vest in and be exercised
by Administrative Agent until the appointment of a new Supplemental Collateral
Agent.

C. Control. Each Lender and Administrative Agent hereby appoint each other
Lender as agent for the purpose of perfecting Administrative Agent’s security
interest in assets that, in accordance with the UCC, can be perfected by
possession or control.

 

  9.2 Powers and Duties; General Immunity.

A. Powers; Duties Specified. Each Lender irrevocably authorizes Administrative
Agent to take such action on such Lender’s behalf and to exercise such powers,
rights and remedies hereunder and under the other Loan Documents as are
specifically delegated or granted to Administrative Agent by the terms hereof
and thereof, together with such powers, rights and remedies as are reasonably
incidental thereto. Administrative Agent shall have only those duties and
responsibilities that are expressly specified in this Agreement and the other
Loan Documents, together with such powers, rights and remedies as are reasonably
incidental thereto. Administrative Agent may exercise such powers, rights and
remedies and perform such duties by or through its agents or employees.
Administrative Agent shall not have, by reason of this Agreement or any of the
other Loan Documents, a fiduciary relationship in respect of any Lender or
Company; and nothing in this Agreement or any of the other Loan Documents,
expressed or implied, is intended to or shall be so construed as to impose upon
Administrative Agent any obligations in respect of this Agreement or any of the
other Loan Documents except as expressly set forth herein or therein.

B. No Responsibility for Certain Matters. No Agent shall be responsible to any
Lender for the execution, effectiveness, genuineness, validity, enforceability,
collectibility or sufficiency of this Agreement or any other Loan Document or
for any representations, warranties, recitals or statements made herein or
therein or made in any written or oral statements or in any financial or other
statements, instruments, reports or certificates or any other documents
furnished or made by such Agent to Lenders or by or on behalf of Company to such
Agent or any Lender in connection with the Loan Documents and the transactions
contemplated thereby or for the financial condition or business affairs of
Company or any other Person liable for the payment of any Obligations, nor shall
such Agent be required to ascertain or inquire as to the performance or
observance of any of the terms, conditions, provisions, covenants or agreements
contained in any of the Loan Documents or as to the use of the proceeds of the
Loans or the use of the Letters of Credit or as to the existence or possible

 

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existence of any Event of Default or Potential Event of Default. Anything
contained in this Agreement to the contrary notwithstanding, Administrative
Agent shall not have any liability arising from confirmations of the amount of
outstanding Loans or the Letter of Credit Usage or the component amounts
thereof.

C. Exculpatory Provisions. No Agent or any of its officers, directors, employees
or agents shall be liable to Lenders for any action taken or omitted by such
Agent under or in connection with any of the Loan Documents except to the extent
caused by such Agent’s gross negligence or willful misconduct. An Agent shall be
entitled to refrain from any act or the taking of any action (including the
failure to take an action) in connection with this Agreement or any of the other
Loan Documents or from the exercise of any power, discretion or authority vested
in it hereunder or thereunder unless and until such Agent shall have received
instructions in respect thereof from Requisite Lenders (or such other Lenders as
may be required to give such instructions under subsection 10.6) and, upon
receipt of such instructions from Requisite Lenders (or such other Lenders, as
the case may be), such Agent shall be entitled to act or (where so instructed)
refrain from acting, or to exercise such power, discretion or authority, in
accordance with such instructions; provided that no Agent shall be required to
take any action that, in its opinion or the opinion of its counsel, may expose
such Agent to liability or that is contrary to any Loan Document or Applicable
Law. Without prejudice to the generality of the foregoing, (i) each Agent shall
be entitled to rely, and shall be fully protected in relying, upon any
communication (including any electronic message, Internet or intranet website
posting or other distribution), instrument or document believed by it in good
faith to be genuine and correct and to have been signed or sent by the proper
person or persons, and shall be entitled to rely and shall be protected in
relying on opinions and judgments of attorneys (who may be attorneys for Company
and its Subsidiaries), accountants, experts and other professional advisors
selected by it; and (ii) no Lender shall have any right of action whatsoever
against an Agent as a result of such Agent acting or (where so instructed)
refraining from acting under this Agreement or any of the other Loan Documents
in accordance with the instructions of Requisite Lenders (or such other Lenders
as may be required to give such instructions under subsection 10.6).

D. Agents Entitled to Act as Lender. The agency hereby created shall in no way
impair or affect any of the rights and powers of, or impose any duties or
obligations upon, an Agent in its individual capacity as a Lender hereunder.
With respect to its participation in the Loans and the Letters of Credit, an
Agent shall have the same rights and powers hereunder as any other Lender and
may exercise the same as though it were not performing the duties and functions
delegated to it hereunder, and the term “Lender” or “Lenders” or any similar
term shall, unless the context clearly otherwise indicates, include each Agent
in its individual capacity. An Agent and its Affiliates may accept deposits
from, lend money to, acquire equity interests in and generally engage in any
kind of commercial banking, investment banking, trust, financial advisory or
other business with Company or any of its Affiliates as if it were not
performing the duties specified herein, and may accept fees and other
consideration from Company for services in connection with this Agreement and
otherwise without having to account for the same to Lenders.

 

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  9.3 Independent Investigation by Lenders; No Responsibility for Appraisal of
Creditworthiness.

Each Lender agrees that it has made its own independent investigation of the
financial condition and affairs of Company and its Subsidiaries in connection
with the making of the Loans and the issuance of Letters of Credit hereunder and
that it has made and shall continue to make its own appraisal of the
creditworthiness of Company and its Subsidiaries. No Agent shall have any duty
or responsibility, either initially or on a continuing basis, to make any such
investigation or any such appraisal on behalf of Lenders or to provide any
Lender with any credit or other information with respect thereto, whether coming
into its possession before the making of the Loans or issuance of any Letter of
Credit or at any time or times thereafter, and no Agent shall have any
responsibility with respect to the accuracy of or the completeness of any
information provided to Lenders.

 

  9.4 Right to Indemnity.

Each Lender, in proportion to its Pro Rata Share, severally agrees to indemnify
each Agent and its officers, directors, employees, agents, attorneys,
professional advisors and Affiliates to the extent that any such Person shall
not have been reimbursed by Company, for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including counsel fees and disbursements and fees and disbursements of
any financial advisor engaged by Agents) or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against an Agent or
such other Person in exercising the powers, rights and remedies of an Agent or
performing duties of an Agent hereunder or under the other Loan Documents or
otherwise in its capacity as Agent in any way relating to or arising out of this
Agreement or the other Loan Documents; provided that no Lender shall be liable
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of an Agent
resulting solely from such Agent’s gross negligence or willful misconduct as
determined by a final judgment of a court of competent jurisdiction. If any
indemnity furnished to an Agent or any other such Person for any purpose shall,
in the opinion of such Agent, be insufficient or become impaired, such Agent may
call for additional indemnity and cease, or not commence, to do the acts
indemnified against until such additional indemnity is furnished.

 

  9.5 Resignation of Agents; Successor Administrative Agent and Swing Line
Lender.

A. Resignation; Successor Administrative Agent. Administrative Agent may resign
at any time by giving 30 days’ prior written notice thereof to Lenders and
Company. Upon any such notice of resignation, Requisite Lenders shall have the
right, upon five Business Days’ notice to Company, to appoint a successor
Administrative Agent, subject (if no Event of Default exists) to the approval of
Company. If no such successor shall have been so appointed by Requisite Lenders
and shall have accepted such appointment within 30 days after the retiring
Administrative Agent gives notice of its resignation, the retiring
Administrative Agent may, on behalf of Lenders, appoint a successor
Administrative Agent. If Administrative Agent shall notify Lenders and Company
that no Person has accepted such appointment as successor

 

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Administrative Agent, such resignation shall nonetheless become effective in
accordance with Administrative Agent’s notice and (i) the retiring
Administrative Agent shall be discharged from its duties and obligations under
the Loan Documents, except that any Collateral held by Administrative Agent will
continue to be held by it until a Person shall have accepted the appointment of
successor Administrative Agent, and (ii) all payments, communications and
determinations provided to be made by, to or through Administrative Agent shall
instead be made by, to or through each Lender directly, until such time as
Requisite Lenders appoint a successor Administrative Agent in accordance with
this subsection 9.5A. Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent, that successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent and
the retiring Administrative Agent shall be discharged from its duties and
obligations under this Agreement (if not already discharged as set forth above).
After any retiring Agent’s resignation hereunder, the provisions of this
Section 9 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was an Agent under this Agreement.

B. Successor Swing Line Lender. Any resignation of Administrative Agent pursuant
to subsection 9.5A shall also constitute the resignation of BNP Paribas or its
successor as Swing Line Lender, and any successor Administrative Agent appointed
pursuant to subsection 9.5A shall, upon its acceptance of such appointment,
become the successor Swing Line Lender for all purposes hereunder. In such event
(i) Company shall prepay any outstanding Swing Line Loans made by the retiring
Administrative Agent in its capacity as Swing Line Lender, (ii) upon such
prepayment, the retiring Administrative Agent and Swing Line Lender shall
surrender any Swing Line Note held by it to Company for cancellation, and
(iii) if so requested by the successor Administrative Agent and Swing Line
Lender in accordance with subsection 2.1E, Company shall issue a Swing Line Note
to the successor Administrative Agent and Swing Line Lender substantially in the
form of Exhibit V annexed hereto, in the amount of the Swing Line Loan
Commitment then in effect and with other appropriate insertions.

 

  9.6 Collateral Documents, and Guaranties.

Each Lender hereby further authorizes Administrative Agent, on behalf of and as
agent for and representative of Lenders, to enter into each Collateral Document
as secured party and to enter into and be the agent for and representative of
Lenders under each Guaranty, and each Lender agrees to be bound by the terms of
each Collateral Document and the Guaranties; provided that Administrative Agent
shall not (i) enter into or consent to any material amendment, modification,
termination or waiver of any provision contained in any Collateral Document or
the Guaranties or (ii) release any Collateral (except as otherwise expressly
permitted or required pursuant to the terms of this Agreement or the applicable
Collateral Document), in each case without the prior consent of Requisite
Lenders (or, if required pursuant to subsection 10.6, all Lenders); provided
further, however, that, without further written consent or authorization from
Lenders, Administrative Agent may execute any documents or instruments necessary
to (a) release any Lien encumbering any item of Collateral that is the subject
of a sale or other disposition of assets permitted by this Agreement or to which
Requisite Lenders have otherwise consented, (b) release any Subsidiary Guarantor
from the Subsidiary Guaranty if all of the Capital Stock of such Subsidiary
Guarantor is sold to any Person (other than an Affiliate of

 

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Company) pursuant to a sale or other disposition permitted hereunder or to which
Requisite Lenders have otherwise consented or (c) subordinate the Liens of
Administrative Agent, on behalf of Lenders, to any Liens permitted by subsection
7.2 (other than Liens on all or substantially all of the Collateral); provided
that, in the case of a sale of such item of Collateral or stock referred to in
subdivision (a) or (b), the requirements of subsection 10.14 are satisfied.
Anything contained in any of the Loan Documents to the contrary notwithstanding,
Company, Administrative Agent and each Lender hereby agree that (1) no Lender
shall have any right individually to realize upon any of the Collateral under
any Collateral Document or any Guaranty, it being understood and agreed that all
powers, rights and remedies under the Collateral Documents and the Guaranties
may be exercised solely by Administrative Agent acting as agent for and
representative of the Secured Creditors in accordance with the terms thereof,
and (2) in the event of a foreclosure by Administrative Agent on any of the
Collateral pursuant to a public or private sale, Administrative Agent or any
Lender may be the purchaser of any or all of such Collateral at any such sale
and Administrative Agent, as agent for and representative of Lenders (but not
any Lender or Lenders in its or their respective individual capacities unless
Requisite Lenders shall otherwise agree in writing) shall be entitled, for the
purpose of bidding and making settlement or payment of the purchase price for
all or any portion of the Collateral sold at any such public sale, to use and
apply any of the Obligations as a credit on account of the purchase price for
any Collateral payable by Administrative Agent at such sale.

Without derogating from any other authority granted to Administrative Agent
herein or in the Collateral Documents or any other document relating thereto,
each Lender hereby specifically (i) authorizes Administrative Agent to enter
into pledge agreements pursuant to this subsection 9.6 with respect to the
Capital Stock of all existing and future first-tier Foreign Subsidiaries, which
pledge agreements may be governed by the laws of each of the jurisdictions of
formation of such Foreign Subsidiaries, as agent on behalf of each of Lenders,
with the effect that Lenders each become a secured party thereunder or, where
relevant in a jurisdiction, as agent and trustee, with the effect that Lenders
each become a beneficiary of a trust and Administrative Agent has all the
rights, powers, discretions, protections and exemptions from liability set out
in the pledge agreements and (ii) except in connection with any such pledge
agreement for a jurisdiction in which Administrative Agent holds the Capital
Stock as agent and trustee for Lenders, appoints Administrative Agent as its
attorney-in-fact granting it the powers to execute each such pledge agreement
and any registrations of the security interest thereby created, in each case in
its name and on its behalf, with the effect that each Lender becomes a secured
party thereunder. With respect to each such pledge agreement, Administrative
Agent has the power to sub-delegate to third parties its powers as
attorney-in-fact of each Lender.

 

  9.7 Duties of Other Agents.

To the extent that any Lender is identified by this Agreement as a co-agent,
documentation agent or syndication agent, such Lender shall not have any right,
power, obligation, liability, responsibility or duty under this Agreement other
than those applicable to all Lenders as such. Without limiting the foregoing,
none of such Lenders shall have or be deemed to have a fiduciary relationship
with any Lender.

 

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  9.8 Administrative Agent May File Proofs of Claim.

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

(i) to file and prove a claim for the whole amount of principal and interest
owing and unpaid in respect of the Loans or Letters of Credit and any other
Obligations that are owing and unpaid and to file such other papers or documents
as may be necessary or advisable in order to have the claims of Lenders and
Agents (including any claim for the reasonable compensation, expenses,
disbursements and advances of Lenders and Agents and their agents and counsel
and all other amounts due Lenders and Agents under subsections 2.3 and 10.2)
allowed in such judicial proceeding, and

(ii) to collect and receive any moneys 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 Lender to make such payments to Administrative Agent and, in the event that
Administrative Agent shall consent to the making of such payments directly to
Lenders, to pay to Administrative Agent any amount due for the reasonable
compensation, expenses, disbursements and advances of Agents and their agents
and counsel, and any other amounts due Agents under subsections 2.3 and 10.2.

Nothing herein contained shall be deemed to authorize Administrative Agent to
authorize or consent to or accept or adopt on behalf of any Lender any plan of
reorganization, arrangement, adjustment or composition affecting the Obligations
or the rights of any Lenders or to authorize Administrative Agent to vote in
respect of the claim of any Lender in any such proceeding.

Section 10. MISCELLANEOUS

 

  10.1 Successors and Assigns; Assignments and Participations in Loans and
Letters of Credit.

A. General. This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of Lenders (it being understood that
Lenders’ rights of assignment are subject to the further provisions of this
subsection 10.1). Neither Company’s rights or obligations hereunder nor any
interest therein may be assigned or delegated by Company without the prior
written consent of all Lenders (and any attempted assignment or transfer by
Company without such consent shall be null and void). No sale, assignment or
transfer or

 

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participation of any Letter of Credit or any participation therein may be made
separately from a sale, assignment, transfer or participation of a corresponding
interest in the Revolving Loan Commitment and the Revolving Loans of the
Revolving Lender effecting such sale, assignment, transfer or participation.
Anything contained herein to the contrary notwithstanding, except as provided in
subsection 2.1A(ii) and subsection 10.5, the Swing Line Loan Commitment and the
Swing Line Loans of Swing Line Lender may not be sold, assigned or transferred
as described below to any Person other than a successor Administrative Agent and
Swing Line Lender to the extent contemplated by subsection 9.5. 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 and, to the extent expressly contemplated hereby, the
Affiliates of each of Administrative Agent and Lenders and Indemnitees) any
legal or equitable right, remedy or claim under or by reason of this Agreement.

B. Assignments.

(i) Amounts and Terms of Assignments. Any Lender may assign to one or more
Eligible Assignees all or any portion of its rights and obligations under this
Agreement; provided that (a), except (1) in the case of an assignment of the
entire remaining amount of the assigning Lender’s rights and obligations under
this Agreement or (2) in the case of an assignment to a Lender or an Affiliate
of a Lender or an Approved Fund of a Lender, the aggregate amount of the
Revolving Loan Exposure of the assigning Lender subject to each such assignment
shall not be less than $1,000,000, unless Administrative Agent otherwise
consents (such consent not to be unreasonably withheld or delayed), (b) each
partial assignment shall be made as an assignment of a proportionate part of all
the assigning Lender’s rights and obligations under this Agreement with respect
to the Loan or the Commitment assigned, (c) the parties to each assignment shall
execute and deliver to Administrative Agent an Assignment Agreement, together
with a processing and recordation fee of $3,500 (unless the assignee, including
assignees receiving assignment on a same day basis via third party
intermediaries) is an Affiliate or an Approved Fund of the assignor, in which
case no fee shall be required), and the Eligible Assignee, if it shall not be a
Lender, shall deliver to Administrative Agent information reasonably requested
by Administrative Agent, including such forms, certificates or other evidence,
if any, with respect to United States federal income tax withholding matters as
the assignee under such Assignment Agreement may be required to deliver to
Administrative Agent pursuant to subsection 2.7B(iii), (d) except in the case of
an assignment (including same day assignments via third party intermediaries) to
another Lender, an Affiliate of a Lender or an Approved Fund of a Lender,
Administrative Agent shall have consented thereto (which consent shall not be
unreasonably withheld).

Upon such execution, delivery and consent, from and after the effective date
specified in such Assignment Agreement, (y) the assignee thereunder shall be a
party hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment Agreement, shall have the rights and
obligations of a Lender hereunder and (z) the assigning Lender thereunder shall,
to the extent that rights

 

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and obligations hereunder have been assigned by it pursuant to such Assignment
Agreement, relinquish its rights (other than any rights which survive the
termination of this Agreement under subsection 10.9B) and be released from its
obligations under this Agreement (and, in the case of an Assignment Agreement
covering all or the remaining portion of an assigning Lender’s rights and
obligations under this Agreement, such Lender shall cease to be a party hereto;
provided that, anything contained in any of the Loan Documents to the contrary
notwithstanding, if such Lender is an Issuing Lender such Lender shall continue
to have all rights and obligations of an Issuing Lender until the cancellation
or expiration of any Letters of Credit issued by it and the reimbursement of any
amounts drawn thereunder). The assigning Lender shall, upon the effectiveness of
such assignment or as promptly thereafter as practicable, surrender its Notes,
if any, to Administrative Agent for cancellation, and thereupon new Notes shall,
if so requested by the assignee and/or the assigning Lender in accordance with
subsection 2.1E, be issued to the assignee and/or to the assigning Lender,
substantially in the form of Exhibit IV annexed hereto to reflect the amounts of
the new Commitments and/or outstanding Revolving Loans of the assignee and/or
the assigning Lender. Other than as provided in subsection 2.1A(ii) and
subsection 10.5, any assignment or transfer by a Lender of rights or obligations
under this Agreement that does not comply with this subsection 10.1B shall be
treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with subsection
10.1C. Notwithstanding anything to the contrary herein or in any Assignment
Agreement, in the case of an assignment to a Person meeting the criteria of
clause (i) of the definition of the term “Eligible Assignee” of the assigning
Lender, such assignment shall be effective between such assigning Lender and
such Eligible Assignee immediately without compliance with the conditions for
assignment under this subsection 10.1B, but shall not be effective with respect
to any Loan Party, Administrative Agent, any other Agent, any Issuing Lender,
any Swing Line Lender or any Lender, and each Loan Party, Administrative Agent,
each other Agent, each Issuing Lender, each Swing Line Lender and each Lender
shall be entitled to deal solely and directly with such assigning Lender under
any such assignment, in each case, until the conditions for assignment under
subsection 10.1B have been complied with.

(ii) Acceptance by Administrative Agent; Recordation in Register. Upon its
receipt of an Assignment Agreement executed by an assigning Lender and an
assignee representing that it is an Eligible Assignee, together with the
processing and recordation fee referred to in subsection 10.1B(i) and any forms,
certificates or other evidence with respect to United States federal income tax
withholding matters that such assignee may be required to deliver to
Administrative Agent pursuant to subsection 2.7B(iii), Administrative Agent
shall, if Administrative Agent has consented to the assignment evidenced thereby
(to the extent such consent is required pursuant to subsection 10.1B(i)),
(a) accept such Assignment Agreement by executing a counterpart thereof as
provided therein (which acceptance shall evidence any required consent of
Administrative Agent to such assignment), (b) record the information contained
therein in the Register, and (c) give prompt notice thereof to Company.
Administrative Agent shall maintain a copy of each Assignment Agreement
delivered to and accepted by it as provided in this subsection 10.1B(ii).

 

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C. Participations. Any Lender may, without the consent of, or notice to, Company
or Administrative Agent, sell participations to one or more Persons (other than
a natural Person or Company or any of its Affiliates) in all or a portion of
such Lender’s rights and/or obligations under this Agreement; provided that
(i) such Lender’s obligations under this Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations and (iii) Company, Administrative Agent and
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision
of this Agreement; provided that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver directly affecting (i) the extension of the
regularly scheduled maturity of any portion of the principal amount of or
interest on any Loan allocated to such participation (other than interest
imposed by subsection 2.2E for a period not to exceed 60 days) or (ii) a
reduction of the principal amount of or the rate of interest payable on any Loan
allocated to such participation (other than interest imposed by subsection 2.2E
for a period not to exceed 60 days). Subject to the further provisions of this
subsection 10.1C, Company agrees that each Participant shall be entitled to the
benefits of subsections 2.6D and 2.7 to the same extent as if it were a Lender
and had acquired its interest by assignment pursuant to subsection 10.1B. To the
extent permitted by law, each Participant also shall be entitled to the benefits
of subsection 10.4 as though it were a Lender, provided such Participant agrees
to be subject to subsection 10.5 as though it were a Lender. A Participant shall
not be entitled to receive any greater payment under subsections 2.6D and 2.7
than the applicable Lender 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 Company’s prior written consent. A Participant
that would be a Non-US Lender if it were a Lender shall not be entitled to the
benefits of subsection 2.7 unless Company is notified of the participation sold
to such Participant and such Participant agrees, for the benefit of Company, to
comply with subsection 2.7B(iii) as though it were a Lender.

D. Pledges and Assignments. Any Lender may at any time pledge or assign a
security interest in all or any portion of its Loans, and the other Obligations
owed to such Lender, to secure obligations of such Lender, including without
limitation any pledge or assignment to secure obligations to any Federal Reserve
Bank; provided that (i) no Lender shall be relieved of any of its obligations
hereunder as a result of any such assignment or pledge and (ii) in no event
shall any assignee or pledgee be considered to be a “Lender” or be entitled to
require the assigning Lender to take or omit to take any action hereunder.

E. Information. Each Lender may furnish any information concerning Holdings,
Company and its Subsidiaries in the possession of that Lender from time to time
to assignees and participants (including prospective assignees and
participants), subject to subsection 10.19.

 

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F. Agreements of Lenders. Each Lender listed on the signature pages hereof
hereby agrees, and each Lender that becomes a party hereto pursuant to an
Assignment Agreement shall be deemed to agree, (i) that it is an Eligible
Assignee described in clause (ii) of the definition thereof; (ii) that it has
experience and expertise in the making of or purchasing loans such as the Loans;
and (iii) that it will make or purchase Loans for its own account in the
ordinary course of its business and without a view to distribution of such Loans
within the meaning of the Securities Act or the Exchange Act or other federal
securities laws (it being understood that, subject to the provisions of this
subsection 10.1, the disposition of such Loans or any interests therein shall at
all times remain within its exclusive control).

 

  10.2 Expenses.

Whether or not the transactions contemplated hereby shall be consummated,
Company agrees to pay within twenty days of the presentation of invoices to the
Company with respect thereto (i) all reasonable costs and expenses of
negotiation, preparation and execution of the Loan Documents and any consents,
amendments, waivers or other modifications thereto; (ii) all reasonable costs
and expenses of furnishing all opinions by counsel for Company or any of its
Subsidiaries (including any opinions requested by Agents or Lenders as to any
legal matters arising hereunder) and of Loan Party’s performance of and
compliance with all agreements and conditions on its part to be performed or
complied with under this Agreement and the other Loan Documents including with
respect to confirming compliance with environmental, insurance and solvency
requirements; (iii) all reasonable fees, expenses and disbursements of the
Administrative Agent (including allocated costs of internal counsel and costs,
expenses and disbursements of outside counsel to the Administrative Agent) in
connection with the negotiation, preparation, execution and administration of
the Loan Documents and any consents, amendments, waivers or other modifications
thereto and in connection with any other documents or matters requested by
Company and all reasonable fees, expenses and disbursements of the Black Diamond
Commercial Finance, L.L.C. and its Affiliates (including allocated costs of
internal counsel) in connection with the negotiation, preparation, execution and
administration of the Loan Documents, in an amount not to exceed $10,000;
(iv) all reasonable costs and expenses of creating and perfecting Liens in favor
of Administrative Agent on behalf of Lenders pursuant to any Collateral
Document, including filing and recording fees, expenses and taxes, stamp or
documentary taxes, search fees, title insurance premiums, and reasonable fees,
expenses and disbursements of counsel to Administrative Agent and of counsel
providing any opinions that Administrative Agent or Requisite Lenders may
request in respect of the Collateral Documents or the Liens created pursuant
thereto; (v) all reasonable costs and expenses incurred by Administrative Agent
in connection with the custody or preservation of any of the Collateral;
(vi) all other reasonable costs and expenses incurred by Administrative Agent in
connection with the primary syndication of the Commitments; (vii) all costs and
expenses, including reasonable attorneys’ fees (including allocated costs of
internal counsel) and fees, costs and expenses of accountants, advisors and
consultants, incurred by Administrative Agent and its counsel at any time that
an Event of Default has occurred and is continuing, relating to efforts to
(a) evaluate or assess any Loan Party, its business or financial condition and
(b) protect, evaluate, assess or dispose of any of the Collateral; and
(viii) all costs and expenses, including reasonable attorneys’ fees (including
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accountants, advisors and consultants and costs of settlement, incurred by
Administrative Agent and Lenders in enforcing any Obligations of or in
collecting any payments due from any Loan Party hereunder or under the other
Loan Documents (including in connection with the sale of, collection from, or
other realization upon any of the Collateral or the enforcement of the Loan
Documents) or in connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement in the nature of a “work-out” or
pursuant to the Cases; provided, that the Administrative Agent may only engage
one counsel, one local counsel and one accountant, consultant or advisor other
than those engaged by the Prepetition Agent if the Administrative Agent shall
have delivered written notice to the Company stating that the hiring of such
additional counsel and such accountant, consultant or advisor is necessary as a
result of a conflict or rights or interests between the lenders under the
Prepetition Facility and the Lenders, which notice states the nature of such
conflict.

 

  10.3 Indemnity.

In addition to the payment of expenses pursuant to subsection 10.2, whether or
not the transactions contemplated hereby shall be consummated, Company agrees to
defend (subject to Indemnitees’ selection of counsel), indemnify, pay and hold
harmless Agents, Lead Arranger and Lenders (including Issuing Lenders), and the
officers, directors, trustees, employees, agents, advisors and Affiliates of
Agents, Lead Arranger and Lenders (collectively called the “Indemnitees”), from
and against any and all Indemnified Liabilities (as hereinafter defined);
provided that Company shall not have any obligation to any Indemnitee hereunder
with respect to any Indemnified Liabilities to the extent such Indemnified
Liabilities arise solely from the gross negligence or willful misconduct of that
Indemnitee as determined by a final judgment of a court of competent
jurisdiction.

As used herein, “Indemnified Liabilities” means, collectively, any and all
liabilities, obligations, losses, damages (including natural resource damages),
penalties, actions, judgments, suits, claims (including Environmental Claims),
costs (including the costs of any investigation, study, sampling, testing,
abatement, cleanup, removal, remediation or other response action necessary to
comply with any applicable Environmental Law to remove, remediate, clean up or
abate any Hazardous Materials or Hazardous Materials Activity), expenses and
disbursements of any kind or nature whatsoever (including the reasonable fees
and disbursements of counsel for Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened by
any Person, whether or not any such Indemnitee shall be designated as a party or
a potential party thereto, and any fees or expenses incurred by Indemnitees in
enforcing this indemnity), whether direct, indirect or consequential and whether
based on any federal, state or foreign laws, statutes, rules or regulations
(including securities and commercial laws, statutes, rules or regulations and
Environmental Laws), on common law or equitable cause or on contract or
otherwise, that may be imposed on, incurred by, or asserted against any such
Indemnitee, in any manner relating to or arising out of (i) this Agreement, the
other Loan Documents or the transactions contemplated hereby or thereby
(including Lenders’ agreement to make the Loans hereunder or the use or intended
use of the proceeds thereof or the issuance of Letters of Credit hereunder or
the use or intended use of any thereof, the failure of an Issuing Lender to
honor a drawing under a Letter of Credit as a result of any act or omission,
whether rightful or wrongful, of any present or future de jure or de facto

 

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Government Authority or any enforcement of any of the Loan Documents (including
any sale of, collection from, or other realization upon any of the Collateral or
the enforcement of the Guaranties)), (ii) the statements contained in the
commitment letter delivered by any Lender to Company with respect thereto, or
(iii) any Environmental Claim or any Hazardous Materials Activity relating to or
arising from, directly or indirectly, any past or present activity, operation,
land ownership, or practice of Company or any of its Subsidiaries.

To the extent that the undertakings to defend, indemnify, pay and hold harmless
set forth in this subsection 10.3 may be unenforceable in whole or in part
because they are violative of any law or public policy, Company shall contribute
the maximum portion that it is permitted to pay and satisfy under Applicable Law
to the payment and satisfaction of all Indemnified Liabilities incurred by
Indemnitees or any of them.

 

  10.4 Set-Off.

In addition to any rights now or hereafter granted under Applicable Law and not
by way of limitation of any such rights, upon the occurrence and during the
continuation of any Event of Default (and with the approval of the Requisite
Lenders prior to any Loans becoming or being declared to be due under
Section 8), each of Lenders and their Affiliates is hereby authorized by Company
at any time or from time to time, without notice to Company or to any other
Person, any such notice being hereby expressly waived, to set off and to
appropriate and to apply any and all deposits (general or special, time or
demand, provisional or final, including Indebtedness evidenced by certificates
of deposit, whether matured or unmatured, but not including trust accounts) and
any other Indebtedness at any time held or owing by that Lender or any Affiliate
of that Lender to or for the credit or the account of Company and each other
Loan Party against and on account of the Obligations of Company or any other
Loan Party to that Lender (or any Affiliate of that Lender) or to any other
Lender (or any Affiliate of any other Lender) under this Agreement, the Letters
of Credit and participations therein and the other Loan Documents, including all
claims of any nature or description arising out of or connected with this
Agreement, the Letters of Credit and participations therein or any other Loan
Document, irrespective of whether or not (i) that Lender shall have made any
demand hereunder or (ii) the principal of or the interest on the Loans or any
amounts in respect of the Letters of Credit or any other amounts due hereunder
shall have become due and payable pursuant to Section 8 and although said
obligations and liabilities, or any of them, may be contingent or unmatured.

 

  10.5 Ratable Sharing.

Lenders hereby agree among themselves that if any of them shall, whether by
voluntary or mandatory payment (other than a payment or prepayment of Loans made
and applied in accordance with the terms of this Agreement), by realization upon
security, through the exercise of any right of set-off or banker’s lien, by
counterclaim or cross action or by the enforcement of any right under the Loan
Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, amounts payable in
respect of Letters of Credit, fees and other amounts then due and owing to that
Lender hereunder or under the other Loan Documents (collectively, the “Aggregate
Amounts Due” to such Lender) that is greater

 

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than the proportion received by any other Lender in respect of the Aggregate
Amounts Due to such other Lender, then the Lender receiving such proportionately
greater payment shall, unless such proportionately greater payment is required
by the terms of this Agreement, (i) notify Administrative Agent and each other
Lender of the receipt of such payment and (ii) apply a portion of such payment
to purchase assignments (which it shall be deemed to have purchased from each
seller of an assignment simultaneously upon the receipt by such seller of its
portion of such payment) of the Aggregate Amounts Due to the other Lenders so
that all such recoveries of Aggregate Amounts Due shall be shared by all Lenders
in proportion to the Aggregate Amounts Due to them; provided that (A) if all or
part of such proportionately greater payment received by such purchasing Lender
is thereafter recovered from such Lender upon the bankruptcy or reorganization
of Company or otherwise, those purchases shall be rescinded and the purchase
prices paid for such assignments shall be returned to such purchasing Lender
ratably to the extent of such recovery, but without interest and (B) the
foregoing provisions shall not apply to (1) any payment made by Company pursuant
to and in accordance with the express terms of this Agreement or (2) any payment
obtained by a Lender as consideration for the assignment (other than an
assignment pursuant to this subsection 10.5) of or the sale of a participation
in any of its Obligations to any Eligible Assignee or Participant pursuant to
subsection 10.1B or 10.1C. Company expressly consents to the foregoing
arrangement and agrees that any purchaser of an assignment so purchased may
exercise any and all rights of a Lender as to such assignment as fully as if
that Lender had complied with the provisions of subsection 10.1B with respect to
such assignment. In order to further evidence such assignment (and without
prejudice to the effectiveness of the assignment provisions set forth above),
each purchasing Lender and each selling Lender agree to enter into an Assignment
Agreement at the request of a selling Lender or a purchasing Lender, as the case
may be, in form and substance reasonably satisfactory to each such Lender.

 

  10.6 Amendments and Waivers.

No amendment, modification, termination or waiver of any provision of this
Agreement or of the Notes, and no consent to any departure by any Loan Party
therefrom, shall in any event be effective without the written concurrence of
Requisite Lenders; provided that no such amendment, modification, termination,
waiver or consent shall, without the consent of:

(a) each Lender with Obligations directly affected (whose consent shall be
required for any such amendment, modification, termination or waiver in addition
to that of Requisite Lenders) (1) reduce the principal amount of any Loan,
(2) postpone the scheduled final maturity date of any Loan or postpone the date
or reduce the amount of any scheduled payment (but not prepayment) of principal
of any Loan, (3) postpone the date on which any interest or any fees are payable
other than interest imposed by subsection 2.2E for a period not to exceed 60
days, (4) decrease the interest rate borne by any Loan (other than any waiver of
any increase in the interest rate applicable to any of the Loans pursuant to
subsection 2.2E for a period not to exceed 60 days) or the amount of any fees
payable hereunder (other than any waiver of any increase in the fees applicable
to Letters of Credit pursuant to subsection 3.2 following an Event of Default
for a period not to exceed 60 days), (5) reduce the amount or postpone the due
date of

 

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any amount payable in respect of any Letter of Credit, (6) extend the expiration
date of any Letter of Credit beyond the Scheduled Maturity Date, (7) extend the
Scheduled Maturity Date or (8) change in any manner the obligations of Revolving
Lenders relating to the purchase of participations in Letters of Credit;

(b) each Lender, (1) change in any manner the definition of “Pro Rata Share” or
subsection 2.4B(iii) or the definition of “Requisite Lenders” (except for any
changes resulting solely from an increase in the aggregate amount of the
Commitments approved by Requisite Lenders), (2) change in any manner any
provision of this Agreement that, by its terms, expressly requires the approval
or concurrence of all Lenders, (3) increase the maximum duration of Interest
Periods permitted hereunder, (4) release any Lien granted in favor of
Administrative Agent with respect to all or substantially all of the Collateral
or release Holdings from its obligations under the Holdings Guaranty or release
all or substantially all of the Subsidiary Guarantors from their obligations
under the Subsidiary Guaranty, in each case other than in accordance with the
terms of the Loan Documents, or (5) change in any manner or waive the provisions
contained in subsection 8.1 or this subsection 10.6.

In addition, no amendment, modification, termination or waiver of any provision
(i) of any Note shall be effective without the written concurrence of the Lender
which is the holder of that Note, (ii) of subsection 2.1A(ii) or of any other
provision of this Agreement relating to the Swing Line Loan Commitment or the
Swing Line Loans shall be effective without the written concurrence of Swing
Line Lender, (iii) of Section 3 shall be effective without the written
concurrence of Administrative Agent and, with respect to the purchase of
participations in Letters of Credit, without the written concurrence of each
Issuing Lender that has issued an outstanding Letter of Credit or has not been
reimbursed for a payment under a Letter of Credit, (iv) of Section 9 or of any
other provision of this Agreement which, by its terms, expressly requires the
approval or concurrence of Administrative Agent shall be effective without the
written concurrence of Administrative Agent, (v) that increases the amount of a
Commitment of a Lender shall be effective without the consent of such Lender;
and (vi) that increases the maximum amount of Letters of Credit shall be
effective without the consent of Requisite Lenders.

Administrative Agent may, but shall have no obligation to, with the concurrence
of any Lender, execute amendments, modifications, waivers or consents on behalf
of that Lender. Any waiver or consent shall be effective only in the specific
instance and for the specific purpose for which it was given. No notice to or
demand on Company in any case shall entitle Company to any other or further
notice or demand in similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this subsection 10.6
shall be binding upon each Lender at the time outstanding, each future Lender
and, if signed by Company, on Company and each Subsidiary Guarantor.

 

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  10.7 Independence of Covenants.

All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is taken or condition
exists.

 

  10.8 Notices; Effectiveness of Signatures.

Unless otherwise specifically provided herein, any notice or other communication
herein required or permitted to be given shall be in writing and may be
personally served, or sent by telefacsimile or United States mail or courier
service and shall be deemed to have been given when delivered in person or by
courier service, upon receipt of telefacsimile in complete and legible form, or
three Business Days after depositing it in the United States mail with postage
prepaid and properly addressed; provided that notices to Administrative Agent,
Swing Line Lender and any Issuing Lender shall not be effective until received.
For the purposes hereof, the address of each party hereto shall be as set forth
under such party’s name on the signature pages hereof or (i) as to any Loan
Party and Administrative Agent, such other address as shall be designated by
such Person in a written notice delivered to the other parties hereto and
(ii) as to each other party, such other address as shall be designated by such
party in a written notice delivered to Administrative Agent. Electronic mail and
Internet and intranet websites may be used to distribute routine communications,
such as financial statements and other information. Administrative Agent or Loan
Parties may, in its discretion, agree to accept notices and other communications
to it hereunder by electronic communications pursuant to procedures approved by
it, provided that approval of such procedures may be limited to particular
notices or communications. As of the Closing Date, Administrative Agent has
agreed to accept such electronic delivery of the items required to be delivered
by Company under subsection 6.1(ii)-(vii).

Loan Documents and notices under the Loan Documents may be transmitted and/or
signed by telefacsimile and by signatures delivered in ‘PDF’ format by
electronic mail; provided, however, that no signature with respect to any
notice, request, agreement, waiver, amendment or other document or any notice
that is intended to have binding effect may be sent by electronic mail. The
effectiveness of any such documents and signatures shall, subject to Applicable
Law, have the same force and effect as an original copy with manual signatures
and shall be binding on all Loan Parties, Agents and Lenders. Administrative
Agent may also require that any such documents and signatures be confirmed by a
manually-signed copy thereof; provided, however, that the failure to request or
deliver any such manually-signed copy shall not affect the effectiveness of any
facsimile document or signature.

 

  10.9 Survival of Representations, Warranties and Agreements.

A. All representations, warranties and agreements made herein shall survive the
execution and delivery of this Agreement and the making of the Loans and the
issuance of the Letters of Credit hereunder.

 

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B. Notwithstanding anything in this Agreement or implied by law to the contrary,
the agreements of Company set forth in subsections 2.6D, 2.7, 10.2, 10.3, 10.4,
10.17 and 10.18 and the agreements of Lenders set forth in subsections 9.2C,
9.4, 10.5, 10.18 and 10.19 shall survive the payment of the Loans, the
cancellation or expiration of the Letters of Credit and the reimbursement of any
amounts drawn thereunder, and the termination of this Agreement.

 

  10.10 Failure or Indulgence Not Waiver; Remedies Cumulative.

No failure or delay on the part of Administrative Agent or any Lender in the
exercise of any power, right or privilege hereunder or under any other Loan
Document shall impair such power, right or privilege or be construed to be a
waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise available.

 

  10.11 Marshalling; Payments Set Aside.

Neither Administrative Agent nor any Lender shall be under any obligation to
marshal any assets in favor of any Loan Party or any other party or against or
in payment of any or all of the Obligations. To the extent that Company makes a
payment or payments to Administrative Agent or Lenders (or to Administrative
Agent for the benefit of the Secured Creditors), or Administrative or Lenders
enforce any security interests or exercise their rights of setoff, and such
payment or payments or the proceeds of such enforcement or setoff or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside and/or required to be repaid to a trustee, receiver or any similar
official in respect of a Loan Party under any bankruptcy law, any other state or
federal law, common law or any equitable cause, then, to the extent of such
recovery, the obligation or part thereof originally intended to be satisfied,
and all Liens, rights and remedies therefor or related thereto, shall be revived
and continued in full force and effect as if such payment or payments had not
been made or such enforcement or setoff had not occurred.

 

  10.12 Severability.

In case any provision in or obligation under this Agreement or the Notes shall
be invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.

 

  10.13 Obligations Several; Independent Nature of Lenders’ Rights; Damage
Waiver.

The obligations of Lenders hereunder are several and no Lender shall be
responsible for the obligations or Commitments of any other Lender hereunder.
Nothing contained herein or in any other Loan Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders, or
Lenders and Company and/or any Loan

 

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Party, as a partnership, an association, a Joint Venture or any other kind of
entity. The amounts payable at any time hereunder to each Lender shall be a
separate and independent debt, and each Lender shall be entitled to protect and
enforce its rights arising out of this Agreement and it shall not be necessary
for any other Lender to be joined as an additional party in any proceeding for
such purpose.

To the extent permitted by law, no Loan Party shall assert, and each hereby
waives, any claim against any Indemnitee, 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 (including, without limitation, subsection 2.1C hereof), any other
Loan Document, any transaction contemplated by the Loan Documents, any Loan or
the use of proceeds thereof. No Indemnitee shall be liable for any damages
arising from the use by unintended recipients of any information or other
materials distributed by it through telecommunications, electronic or other
information transmission systems in connection with the Loan Documents or the
transactions contemplated thereby unless such use by an unintended recipient
resulted from the gross negligence or willful misconduct on the part of such
Indemnitee as determined by a final judgment of a court of competent
jurisdiction.

 

  10.14 Release of Security Interest or Guaranty.

Upon the proposed sale or other disposition of any Collateral to any Person
(other than an Affiliate of Company) that is permitted by this Agreement or to
which Requisite Lenders have otherwise consented, or the sale or other
disposition of all of the Capital Stock of a Subsidiary Guarantor to any Person
(other than an Affiliate of Company) that is permitted by this Agreement or to
which Requisite Lenders have otherwise consented, for which a Loan Party desires
to obtain a security interest release or a release of the Subsidiary Guaranty
from Administrative Agent, such Loan Party shall deliver an Officer’s
Certificate (i) stating that the Collateral or the Capital Stock subject to such
disposition is being sold or otherwise disposed of in compliance with the terms
hereof and (ii) specifying the Collateral or Capital Stock being sold or
otherwise disposed of in the proposed transaction. Upon the receipt of such
Officer’s Certificate, Administrative Agent shall, at such Loan Party’s expense,
so long as Administrative Agent (a) has no reason to believe that the facts
stated in such Officer’s Certificate are not true and correct and (b), if the
sale or other disposition of such item of Collateral or Capital Stock
constitutes an Asset Sale, shall have received evidence satisfactory to it that
arrangements satisfactory to it have been made for delivery of the Net Asset
Sale Proceeds if and as required by subsection 2.4, execute and deliver such
releases of its security interest in such Collateral or such Subsidiary
Guaranty, as may be reasonably requested by such Loan Party.

 

  10.15 Applicable Law.

THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (EXCEPT AS OTHERWISE EXPRESSLY SET
FORTH IN ANY SUCH LOAN DOCUMENT), AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK
(INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THAT WOULD REQUIRE
APPLICATION OF ANOTHER LAW.

 

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  10.16 Construction of Agreement; Nature of Relationship.

Each of the parties hereto acknowledges that (i) it has been represented by
counsel in the negotiation and documentation of the terms of this Agreement,
(ii) it has had full and fair opportunity to review and revise the terms of this
Agreement, (iii) this Agreement has been drafted jointly by all of the parties
hereto, and (iv) neither Administrative Agent nor any Lender or other Agent has
any fiduciary relationship with or duty to Company or any Loan Party arising out
of or in connection with this Agreement or any of the other Loan Documents, and
the relationship between Administrative Agent, the other Agents and Lenders, on
one hand, and Company, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor. Accordingly, each of the parties hereto
acknowledges and agrees that the terms of this Agreement shall not be construed
against or in favor of another party.

 

  10.17 Consent to Jurisdiction and Service of Process.

ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PARTY HERETO ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS
HEREUNDER AND THEREUNDER, SHALL BE BROUGHT IN THE BANKRUPTCY COURT, AND IF THE
BANKRUPTCY COURT DOES NOT HAVE (OR ABSTAINS FROM) JURISDICTION, SUCH PROCEEDING
MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE
STATE, COUNTY AND CITY OF NEW YORK. BY EXECUTING AND DELIVERING THIS AGREEMENT,
EACH LOAN PARTY, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY

(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND
VENUE OF SUCH COURTS;

(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;

(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH
COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO
COMPANY AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SUBSECTION 10.8;

(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS SUFFICIENT TO
CONFER PERSONAL JURISDICTION OVER COMPANY IN ANY SUCH PROCEEDING IN ANY SUCH
COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT;

 

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(V) AGREES THAT ADMINISTRATIVE AGENT AND LENDERS RETAIN THE RIGHT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY
LOAN PARTY IN THE COURTS OF ANY OTHER JURISDICTION; AND

(VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 10.17 RELATING TO
JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST EXTENT
PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402 OR OTHERWISE.

 

  10.18 Waiver of Jury Trial.

EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS BETWEEN
THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this waiver
is intended to be all-encompassing of any and all disputes that may be filed in
any court and that relate to the subject matter of this transaction, including
contract claims, tort claims, breach of duty claims and all other common law and
statutory claims. Each party hereto acknowledges that this waiver is a material
inducement to enter into a business relationship, that each has already relied
on this waiver in entering into this Agreement, and that each will continue to
rely on this waiver in their related future dealings. Each party hereto further
warrants and represents that it has reviewed this waiver with its legal counsel
and that it knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION 10.18 AND EXECUTED BY EACH OF
THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS
MADE HEREUNDER. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.

 

  10.19 Confidentiality.

Each Lender shall hold all non-public information obtained pursuant to the
requirements of this Agreement that has been identified in writing as
confidential by Company in accordance with such Lender’s customary procedures
for handling confidential information of this nature, it being understood and
agreed by each Loan Party that in any event a Lender may make disclosures (a) to
its and its Affiliates’ directors, officers, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such information and instructed to keep such information
confidential), (b) to the extent requested by any Government Authority,

 

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(c) to the extent required by Applicable Laws or by any subpoena or similar
legal process, (d) to any other party to this Agreement, (e) in connection with
the exercise of any remedies hereunder or any suit, action or proceeding
relating to this Agreement or the enforcement of rights hereunder, (f) subject
to an agreement containing provisions substantially the same as those of this
subsection 10.19, to any Eligible Assignee of or participant in, or any
prospective Eligible Assignee of or Participant in, any of its rights or
obligations under this Agreement, (g) with the consent of Company, (h) to the
extent such information (i) becomes publicly available other than as a result of
a breach of this subsection 10.19 or (ii) becomes available to Administrative
Agent or any Lender on a nonconfidential basis from a source other than a Loan
Party or (i) to the National Association of Insurance Commissioners or any other
similar organization or any nationally recognized rating agency that requires
access to information about a Lender’s or its Affiliates’ investment portfolio
in connection with ratings issued with respect to such Lender or its Affiliates;
provided that, unless specifically prohibited by Applicable Law or court order,
each Lender shall notify Company of any request by any Government Authority or
representative thereof (other than any such request in connection with any
examination of the financial condition of such Lender by such Government
Authority) for disclosure of any such non-public information prior to disclosure
of such information; and provided, further that in no event shall any Lender be
obligated or required to return any materials furnished by Holdings, Company or
any of its Subsidiaries. Each Loan Party hereby agree that Administrative Agent,
Lenders or any of their Affiliates may place customary “tombstone”
advertisements (which may include any of any Loan Parties’ trade names or
corporate logos and a brief description of the transactions contemplated by this
Agreement) in publications or other media of their choice (including, without
limitation, “e-tombstones” published or otherwise circulated in electronic form
and related hyperlinks to any of any Loan Parties’ corporate websites) at its
own expense. In addition, Administrative Agent, Lenders and their Affiliates may
disclose the existence of this Agreement and information regarding the
transactions contemplated by this Agreement (including the parties, the amount
of the Loans, the titles of the Agents and the Closing Date) to market data
collectors and similar service providers to the financing community to the
extent necessary to obtain “league table” or similar recognition for the
transaction.

 

  10.20 Customer Identification—USA PATRIOT Act Notice.

Each Lender and each Agent (for itself and not on behalf of any other party)
hereby notifies the Loan Parties 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
the Loan Parties, which information includes the name and address of the Loan
Parties and other information that will allow such Lender or Agent, as
applicable, to identify the Loan Parties in accordance with the Act.

 

  10.21 Counterparts; Effectiveness.

This Agreement and any amendments, waivers, consents or supplements hereto or in
connection herewith may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single

 

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counterpart so that all signature pages are physically attached to the same
document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto.

 

  10.22 Paramountcy.

If there is any conflict or inconsistency between any provision of this
Agreement and any provision of any other Loan Document, the provisions of this
Agreement shall, to the extent necessary to resolve such conflict, govern.

[Remainder of page intentionally left blank]

 

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

 

COMPANY: PROPEX INC., as debtor and debtor-in-possession By:  

/s/ Joseph F. Dana

Name:   Joseph F. Dana Title:   President

Notice Address:   6025 Lee Highway, Suite 425   Chattanooga, TN 37421

HOLDINGS: PROPEX HOLDINGS INC., as debtor and debtor-in-possession By:  

/s/ Joseph F. Dana

Name:   Joseph F. Dana Title:   President

Notice Address:   6025 Lee Highway, Suite 425   Chattanooga, TN 37421

 

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SUBSIDIARY GUARANTORS:

PROPEX CONCRETE SYSTEMS

CORPORATION, as debtor and debtor-in-possession

By:  

/s/ Joseph F. Dana

Name:   Joseph F. Dana Title:   President

Notice Address:   6025 Lee Highway, Suite 303   Chattanooga, TN 37421

PROPEX FABRICS INTERNATIONAL

HOLDINGS I INC., as debtor and debtor-in-possession

By:  

/s/ Joseph F. Dana

Name:   Joseph F. Dana Title:   President

Notice Address:   6025 Lee Highway, Suite 425   Chattanooga, TN 37421

 

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PROPEX FABRICS INTERNATIONAL

HOLDINGS II INC., as debtor and debtor-in-possession

By:  

/s/ Joseph F. Dana

Name:   Joseph F. Dana Title:   President  

Notice Address:   6025 Lee Highway, Suite 425   Chattanooga, TN 37421

 

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LENDERS:

BNP PARIBAS,

individually and as Administrative Agent

By:  

/s/ Chris Goodwin

Name:   Chris Goodwin Title:   Managing Director By:  

/s/ Albert A. Young, Jr.

Name:   Albert A. Young, Jr. Title:   Managing Director

Notice Address:   12201 Merit Drive, Suite 860   Dallas, TX 75251

BLACK DIAMOND COMMERCIAL FINANCE, L.L.C. By:  

/s/ Hugo H. Gravenhorst

Name:   Hugo H. Gravenhorst Title:   Managing Director

Notice Address:   100 Field Drive   Lake Forest, IL 60045-2580   Fax: (847)
582-9144

 

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