EX-4.18






EXHIBIT 4.18




 

 

OLYMPIC STEEL, INC.




SECOND AMENDED AND RESTATED CREDIT AGREEMENT




DATED AS OF MAY 28, 2008




COMERICA BANK,

AS ADMINISTRATIVE AGENT




FIFTH THIRD BANK,

AS DOCUMENTATION AGENT




LASALLE BANK MIDWEST NATIONAL ASSOCIATION

AS SYNDICATION AGENT




KEYBANK
NATIONAL ASSOCIATION

AS CASH MANAGEMENT AGENT






 

 


 









 





TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	1. DEFINITIONS
	 	 	1	 
	1.1 Certain Defined Terms
	 	 	1	 
	 
	 	 	 	 
	2. REVOLVING CREDIT
	 	 	25	 
	2.1 Commitment
	 	 	26	 
	2.2 Accrual of Interest and Maturity; Evidence of Obligations
	 	 	26	 
	2.3 Requests for and Refundings and Conversions of Advances
	 	 	27	 
	2.4 Disbursement of Advances
	 	 	29	 
	2.5 Swing Line Advances
	 	 	31	 
	2.6 Prime-based Interest Payments
	 	 	35	 
	2.7
Eurocurrency-based Interest Payments
	 	 	36	 
	2.8 Interest Payments on Conversions
	 	 	36	 
	2.9 Interest on Default
	 	 	36	 
	2.10 Optional Prepayments
	 	 	36	 
	2.11
Prime-based Advance in Absence of Election or Upon Default
	 	 	37	 
	2.12 Revolving Credit Commitment Fee
	 	 	37	 
	2.13 Mandatory Repayment of Revolving Credit Advances and Reductions of the
Revolving Credit Aggregate Commitment
	 	 	37	 
	2.14 Optional Reduction or Termination of Revolving Credit Aggregate
Commitment
	 	 	39	 
	2.15 Use of Proceeds of Advances
	 	 	39	 
	2.16 Extensions of Revolving Credit Maturity Date
	 	 	40	 
	2.17 Optional Increase in Revolving Credit Aggregate Commitment
	 	 	40	 
	 
	 	 	 	 
	3. LETTERS OF CREDIT
	 	 	42	 
	3.1 Letters of Credit
	 	 	42	 
	3.2 Conditions to Issuance
	 	 	43	 
	3.3 Notice
	 	 	44	 
	3.4 Letter of Credit Fees
	 	 	44	 
	3.5 Other Fees
	 	 	45	 
	3.6 Drawings and Demands for Payment Under Letters of Credit
	 	 	45	 
	3.7 Obligations Irrevocable
	 	 	47	 
	3.8 Risk Under Letters of Credit
	 	 	48	 
	3.9 Indemnification
	 	 	49	 
	3.10 Right of Reimbursement
	 	 	50	 
	 
	 	 	 	 
	4. INTENTIONALLY OMITTED
	 	 	50	 
	 
	 	 	 	 
	5. CONDITIONS
	 	 	51	 
	5.1 Execution of Notes and this Agreement
	 	 	51	 
	5.2 Corporate Authority
	 	 	51	 
	5.3 Collateral Documents, Guaranties and other Loan Documents
	 	 	51	 






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TABLE
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(continued)




	 	 	 	 	 
	 	 	Page	 
	5.4 Intentionally Omitted
	 	 	52	 
	5.5 Compliance with Certain Documents and Agreements
	 	 	52	 
	5.6 Opinion of Counsel
	 	 	52	 
	5.7 Company’s Certificate
	 	 	53	 
	5.8 Payment of Fees
	 	 	53	 
	5.9 Continuing Conditions
	 	 	53	 
	 
	 	 	 	 
	6. REPRESENTATIONS AND WARRANTIES
	 	 	53	 
	6.1 Corporate Authority
	 	 	53	 
	6.2 Due
Authorization-Company
	 	 	53	 
	6.3 Due
Authorization-Guarantors
	 	 	54	 
	6.4 Good Title, No Liens
	 	 	54	 
	6.5 Taxes
	 	 	54	 
	6.6 No Defaults
	 	 	54	 
	6.7
Enforceability of Agreement and Loan Documents—Company
	 	 	54	 
	6.8 Enforceability of Loan Documents—Guarantors
	 	 	55	 
	6.9 Compliance with Laws
	 	 	55	 
	6.10 Non-contravention—Company
	 	 	55	 
	6.11 Non-contravention—Guarantors
	 	 	55	 
	6.12 No Litigation
	 	 	55	 
	6.13 Consents, Approvals and Filings, Etc.
	 	 	56	 
	6.14 Agreements Affecting Financial Condition
	 	 	56	 
	6.15 No Investment Company or Margin Stock
	 	 	56	 
	6.16 ERISA
	 	 	56	 
	6.17 Conditions Affecting Business or Properties
	 	 	57	 
	6.18 Environmental and Safety Matters
	 	 	57	 
	6.19 Subsidiaries
	 	 	57	 
	6.20 Accuracy of Information
	 	 	57	 
	6.21 Labor Relations
	 	 	58	 
	6.22 Existing Debt
	 	 	58	 
	6.23 Solvency
	 	 	58	 
	6.24 Capitalization
	 	 	59	 
	6.25 Corporate Documents and Corporate Existence
	 	 	59	 
	 
	 	 	 	 
	7. AFFIRMATIVE COVENANTS
	 	 	59	 
	7.1 Financial Statements
	 	 	59	 
	7.2 Certificates; Other Information
	 	 	60	 
	7.3 Payment of Obligations
	 	 	61	 
	7.4 Conduct of Business and Maintenance of Existence; Compliance with Laws
	 	 	61	 
	7.5 Maintenance of Property; Insurance
	 	 	61	 
	7.6 Inspection of Property; Books and Records, Discussions
	 	 	61	 






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TABLE
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(continued)





	 	 	 	 	 
	 	 	Page	 
	7.7 Notices. Promptly give notice to the Agent of:
	 	 	62	 
	7.8 Hazardous Material Laws
	 	 	63	 
	7.9 Consolidated Debt Service Coverage Ratio
	 	 	63	 
	7.10 Maintain Leverage Ratio
	 	 	63	 
	7.11 Governmental and Other Approvals
	 	 	63	 
	7.12 Compliance with ERISA
	 	 	64	 
	7.13 ERISA Notices
	 	 	64	 
	7.14 Security; Defense of Collateral
	 	 	64	 
	7.15 Appraisal Requirements
	 	 	64	 
	7.16 Use of Proceeds
	 	 	65	 
	7.17 Future Subsidiaries; Additional Collateral
	 	 	65	 
	7.18 Further Assurances
	 	 	65	 
	7.19 Availability
	 	 	66	 
	7.20 Depository and Securities Accounts
	 	 	66	 
	 
	 	 	 	 
	8. NEGATIVE COVENANTS
	 	 	66	 
	8.1 Limitation on Debt
	 	 	66	 
	8.2 Limitation on Liens
	 	 	67	 
	8.3 Limitation on Guarantee Obligations
	 	 	68	 
	8.4 Limitation on Mergers, other Fundamental Changes or Sale of Assets
	 	 	68	 
	8.5 Restricted Payments
	 	 	69	 
	8.6 Limitation on Capital Expenditures
	 	 	70	 
	8.7 Limitation on Investments, Loans and Advances
	 	 	70	 
	8.8 Transactions with Affiliates
	 	 	71	 
	8.9 Sale and Leaseback
	 	 	72	 
	8.10 Limitation on Negative Pledge Clauses
	 	 	72	 
	8.11 Prepayment of Debts
	 	 	72	 
	8.12 Amendment of Subordinated Debt Documents
	 	 	72	 
	8.13 Modification of Certain Agreements
	 	 	72	 
	8.14 Fiscal Year
	 	 	73	 
	8.15 Inventory Valuation Method
	 	 	73	 
	 
	 	 	 	 
	9. DEFAULTS
	 	 	73	 
	9.1 Events of Default
	 	 	73	 
	9.2 Exercise of Remedies
	 	 	75	 
	9.3 Rights Cumulative
	 	 	76	 
	9.4 Waiver by Company of Certain Laws
	 	 	76	 
	9.5 Waiver of Defaults
	 	 	76	 
	9.6 Set Off
	 	 	76	 
	 
	 	 	 	 
	10. PAYMENTS, RECOVERIES AND COLLECTIONS; MARGIN ADJUSTMENTS
	 	 	77	 
	10.1 Payment Procedure
	 	 	77	 






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TABLE
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(continued)





	 	 	 	 	 
	 	 	Page	 
	10.2 Application of Proceeds of Collateral
	 	 	78	 
	10.3 Pro-rata Recovery
	 	 	79	 
	10.4 Margin Adjustments
	 	 	79	 
	 
	 	 	 	 
	11. CHANGES IN LAW OR CIRCUMSTANCES; INCREASED COSTS
	 	 	80	 
	11.1 Reimbursement of Prepayment Costs
	 	 	80	 
	11.2 Eurocurrency Lending Office
	 	 	81	 
	11.3
Circumstances Affecting Eurocurrency-based Rate Availability
	 	 	81	 
	11.4 Laws
Affecting Eurocurrency-based Advance Availability
	 	 	81	 
	11.5
Increased Cost of Eurocurrency-based Advances
	 	 	81	 
	11.6 Capital Adequacy and Other Increased Costs
	 	 	82	 
	11.7 Substitution of Banks
	 	 	83	 
	11.8 Right of Banks to Fund through Branches and Affiliates
	 	 	84	 
	11.9 Duty to Mitigate
	 	 	84	 
	 
	 	 	 	 
	12. AGENT
	 	 	84	 
	12.1 Appointment of Agent
	 	 	84	 
	12.2 Deposit Account with Agent
	 	 	85	 
	12.3 Scope of Agent’s Duties
	 	 	85	 
	12.4 Successor Agent
	 	 	85	 
	12.5 Credit Decisions
	 	 	86	 
	12.6 Authority of Agent to Enforce This Agreement
	 	 	86	 
	12.7 Indemnification of Agent
	 	 	86	 
	12.8 Knowledge of Default
	 	 	87	 
	12.9 Agent’s Authorization; Action by Banks
	 	 	87	 
	12.10 Enforcement Actions by the Agent
	 	 	87	 
	12.11 Collateral Matters
	 	 	88	 
	12.12 Agent in its Individual Capacities
	 	 	88	 
	12.13 Agent’s Fees
	 	 	88	 
	12.14 Co-Agent or Other Titles
	 	 	88	 
	12.15 No Reliance on Agent’s Customer Identification Program
	 	 	89	 
	 
	 	 	 	 
	13. MISCELLANEOUS
	 	 	89	 
	13.1 Accounting Principles
	 	 	89	 
	13.2 Consent to Jurisdiction
	 	 	89	 
	13.3 Law of Michigan
	 	 	90	 
	13.4 Interest
	 	 	90	 
	13.5 Closing Costs and Other Costs; Indemnification
	 	 	90	 
	13.6 Notices
	 	 	91	 
	13.7 Further Action
	 	 	92	 
	13.8 Successors and Assigns; Participations; Assignments
	 	 	92	 
	13.9 Counterparts
	 	 	95	 






iv









 





TABLE
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(continued)




	 	 	 	 	 
	 	 	Page	 
	13.10 Amendment and Waiver
	 	 	95	 
	13.11 Confidentiality
	 	 	97	 
	13.12 Withholding Taxes
	 	 	97	 
	13.13 Taxes and Fees
	 	 	98	 
	13.14 WAIVER OF JURY TRIAL
	 	 	98	 
	13.15 Complete Agreement; Conflicts
	 	 	98	 
	13.16 Severability
	 	 	98	 
	13.17 Table of Contents and Headings; Section References
	 	 	99	 
	13.18 Construction of Certain Provisions
	 	 	99	 
	13.19 Independence of Covenants
	 	 	99	 
	13.20 Reliance on and Survival of Various Provisions
	 	 	99	 
	13.21 Amendment and Restatement
	 	 	99	 
	13.22 Electronic Transmissions
	 	 	99	 






v









 






TABLE OF CONTENTS

(Continued)




SCHEDULES




	 
	Schedule 1.1 Pricing Matrix

	Schedule 1.2 Percentages and Allocations

	Schedule 1.3 Subsidiaries which are not required to be Guarantors

	Schedule 1.4 Real Property Owned by Company or a Subsidiary which is
not Required to be Subject to a Mortgage in Favor of Agent
for the Benefit of the Lenders

	Schedule 1.5 Security Agreements

	Schedule 1.6 Minimum Amounts for Advances, Refundings,
Conversions and Paydowns

	Schedule 5.2 List of Jurisdictions in which Company and/or Subsidiaries
do material business

	Schedule 5.3(b) Description of Property to be mortgaged

	Schedule 5.3(c) Description of Leased Property

	Schedule 5.3(e) List of Jurisdictions in which to file financing statements

	Schedule 5.3(f) Existing Lockbox Arrangements

	Schedule 6.1 Exceptions to Foreign Corporation Qualifications

	Schedule 6.9 Compliance with Laws

	Schedule 6.12 Litigation

	Schedule 6.14 Agreements Affecting Financial Condition

	Schedule 6.16 Employee Pension Benefit Plans

	Schedule 6.18 Environmental Matters

	Schedule 6.19 Subsidiaries

	Schedule 6.20 Contingent Obligations

	Schedule 6.21 Labor Relations

	Schedule 6.24 Capitalization

	Schedule 6.25 Corporate Information

	Schedule 7.15 Appraisal Requirements

	Schedule 7.17 Real Estate Requirements

	Schedule 8.1(b) Existing Funded Debt

	Schedule 8.2 Permitted Liens

	Schedule 8.3 Existing Guaranties

	Schedule 8.7 Existing Investments

	Schedule 8.8 Transactions with Affiliates

	Schedule 8.10 Negative Pledges

	Schedule 13.6 Notices







vi









 





TABLE OF CONTENTS

(Continued)




EXHIBITS




	 
	A FORM OF REQUEST FOR REVOLVING CREDIT ADVANCE

	B FORM OF REVOLVING CREDIT NOTE

	C FORM OF SWING LINE NOTE

	D FORM OF REQUEST FOR SWING LINE ADVANCE

	E FORM OF SWING LINE BANK PARTICIPATION CERTIFICATE

	F FORM OF NOTICE OF LETTERS OF CREDIT

	G FORM OF BORROWING BASE CERTIFICATE

	H [RESERVED]

	I FORM OF ASSIGNMENT AGREEMENT

	J FORM OF GUARANTY

	K [RESERVED]

	L FORM OF INTERCOMPANY NOTE

	M FORM OF COVENANT COMPLIANCE REPORT

	N [RESERVED]

	O [RESERVED]

	P [RESERVED]

	Q NEW BANK ADDENDUM







vii









 





SECOND AMENDED AND RESTATED CREDIT AGREEMENT




     This Second Amended and Restated Credit Agreement (“Agreement”) is dated as of May 28, 2008,
by and among the financial institutions from time to time signatory hereto (individually a “Bank,”
and any and all such financial institutions collectively the “Banks”), Comerica Bank, as
administrative agent for the Banks (in such capacity, “Agent”), and Olympic Steel, Inc., an Ohio
corporation (the “Company”).



RECITALS:




     A. Company, the Prior Lenders (as defined below), the Guarantors (as defined below) and the
Prior Agents (as defined below) entered into that certain Credit and Security Agreement dated June
28, 2001 (as amended, the “Prior Credit Agreement”), pursuant to which the Prior Lenders agreed to
extend certain facilities to Company, which Prior Credit Agreement was amended and restated under
and pursuant to the terms of that certain Amended and Restated Credit Agreement dated as of
December 30, 2002 by and among the Company, the Banks and the Agent (as amended, the “Amended and
Restated Credit Agreement”).



     B. The Prior Agents resigned as such under the Prior Credit Agreement, Comerica Bank was
appointed successor Administrative Agent under the Prior Credit Agreement and the Prior Lenders
assigned to Comerica Bank their respective interests under the Prior Credit Agreement.



     C. Company, Guarantors, the Banks and the Agent have agreed to enter into this Agreement and
any related Loan Documents required hereby in order to (i) amend and restate the Amended and
Restated Credit Agreement, (ii) re-evidence the Obligations which shall be payable in accordance
with the terms of this Agreement and (iii) set forth the terms and conditions under which the Banks
will, from time to time, make loans or extend credit to or for the benefit of Company.



     D. Comerica Bank has agreed to act as administrative agent and collateral agent for the Banks
hereunder.



     E. It is not the intention of the parties to this Agreement that this Agreement constitute a
novation. From and after the Restatement Effective Date (as defined below), the Amended and
Restated Agreement shall be amended and restated by this Agreement and all references herein to
“hereunder”, “hereof” and “herein” or words if like import shall mean and be a reference to the
Amended and Restated Credit Agreement as amended and restated hereby.



     NOW THEREFORE, in consideration of the covenants contained herein, the Company, the Banks, and
the Agent agree that the Amended and Restated Credit Agreement is amended and restated as follows:



1. DEFINITIONS




     1.1
Certain Defined Terms. For the purposes of this Agreement the following terms will have the following meanings:



1









 





     “Account(s)” shall mean any account or account receivable as defined under the UCC, including
without limitation, with respect to any Person, any right of such Person to payment for goods sold
or leased or for services rendered.



     “Account Debtor” shall mean the party who is obligated on or under any Account.



     “Account Party(ies)” shall mean, with respect to any Letter of Credit, the account party or
parties (which shall be the Company or a Guarantor) as named in an application to the Agent for the
issuance of such Letter of Credit.



     “Administrative Agent”, as such term is used in any Loan Document, shall mean the Agent.



     “Advance(s)” shall mean, as the context may indicate, a borrowing requested by the Company and
made by the Revolving Credit Banks under Section 2.1 hereof or the Swing Line Bank under Section
2.5 hereof, including without limitation any readvance, refunding or conversion of such borrowing
pursuant to Section 2.3 or 2.5 hereof, and any advance deemed to have been made in respect of a
Letter of Credit under Section 3.6(a) hereof, and shall include, as applicable, a
Eurocurrency-based Advance and a Prime-based Advance, and shall include all Existing Advances.



     “Affiliate” shall mean, with respect to any Person, any other Person or group acting in
concert in respect of the first Person that, directly or indirectly, through one or more
intermediaries, controls, or is controlled by, or is under common control with such first Person.
For purposes of this definition, “control” (including, with correlative meanings, the terms
“controlled by” and “under common control with”), as used with respect to any Person or group of
Persons, shall mean the possession, directly or indirectly, of the power to direct or cause the
direction of management and policies of such Person, whether through the ownership of voting
securities or by contract or otherwise. Unless otherwise specified to the contrary herein, or the
context requires otherwise, Affiliate shall refer to Affiliates of the Company.



     “Agent” shall mean Comerica Bank, in its capacity as agent for the Banks hereunder, or any
successor agent appointed in accordance with Section 12.4 hereof.



     “Agent’s Correspondent” shall mean for Advances in eurodollars, Agent’s Grand Cayman Branch
(or for the account of said branch office, at Agent’s main office in Detroit, Michigan, United
States).



     “Alternate Base Rate” shall mean, for any day, an interest rate per annum equal to the Federal
Funds Effective Rate in effect on such day, plus one percent (1%).



     “Amended and Restated Security Agreement” shall mean the Security Agreement described as item
(S) on Schedule 1.5.



     “Applicable Fee Percentage” shall mean, as of any date of determination thereof, the
applicable percentage used to calculate certain of the fees due and payable hereunder, determined
by reference to the appropriate columns in the Pricing Matrix attached to this Agreement as
Schedule 1.1.



2









 





     “Applicable Interest Rate” shall mean (i) in respect of Revolving Credit Advances, the
Eurocurrency-based Rate and the Prime-based Rate; and (ii) in respect of Swing Line Advances, the
Prime-based Rate; in each case, as selected by Company from time to time subject to the terms and
conditions of this Agreement.



     “Applicable Margin” shall mean, as of any date of determination thereof, the applicable
interest rate margin, determined by reference to the appropriate columns in the Pricing Matrix
attached to this Agreement as Schedule 1.1.



     “Applicable Measuring Period” shall mean for any date of determination, the twelve month
period ending on such date.



     “Asset Sale” shall mean the sale, transfer or other disposition by the Company or any
Subsidiary of any tangible asset (other than the Equity Interests of any Subsidiary) to any Person
(other than to the Company or any Subsidiary), other than sales, transfers or other dispositions of
inventory in the ordinary course of business and sales of assets or other dispositions of assets
that have been damaged, become obsolete, worn out or are no longer useable or useful in the conduct
of Company’s or such Subsidiary’s business.



     “Assignment Agreement” shall mean an Assignment Agreement substantially in the form of
Exhibit I hereto.



     “Availability” shall mean as of any date of determination thereof, the lesser of (i) the
aggregate Revolving Credit Commitment or (ii) the Borrowing Base then in effect less in either
case, the sum of (a) the outstanding principal amount of the Revolving Advances and the Swing Line
Advances as of such date, plus (b) the Letter of Credit Obligations as of such date.



     “Bankruptcy Code” shall mean Title 11 of the United States Code and the rules promulgated
thereunder.



     “Banks” shall mean Comerica Bank and such other financial institutions from time to time
parties hereto as lenders and shall include the Revolving Credit Banks and the Swing Line Bank and
any assignee which becomes a Bank pursuant to Section 13.8 hereof.



     “Borrowing Base” shall mean, as of any date of determination thereof, an amount equal to the
sum of:



     (i) eighty five percent (85%) of Eligible Accounts, minus the aggregate amount of any
reserves established by Agent, in the exercise of its commercially reasonable judgment, against
Eligible Accounts, plus



     (ii) the lesser of:




     (A) the sum of:




	 	(1)	 	fifty percent (50%) of Eligible Inventory which
is less than one (1) year old, and




3









 






	 	(2)	 	the lesser of (a) twenty five percent (25%) of
Eligible Inventory which is one (1) year or older or (b) Three Million
Dollars ($3,000,000),






minus, the aggregate amount of any reserves established by Agent, in
the exercise of its commercially reasonable judgment, against Eligible
Inventory;




and




     (B) Sixty Five Million Dollars ($65,000,000);




minus 




(iii) the aggregate amount of any other reserves established by Agent in the exercise of its
commercially reasonable judgment.


provided that Agent, in the exercise of its commercially reasonable judgment may upon
written notice to Company and Banks (a) increase or decrease reserves against Eligible Accounts and
Eligible Inventory or (b) reduce the advance rates provided in this definition, or (c) restore such
advance rates to any level equal to or below the advance rates in effect as of the date hereof.




     “Borrowing Base Certificate” shall mean a borrowing base certificate, substantially in the
form of Exhibit G, with appropriate insertions and executed by a Responsible Officer.



     “Borrowing Base Obligors” shall mean Company and each Subsidiary of Company which becomes a
Guarantor pursuant to and in accordance with the provisions of this Agreement.



     “Business Day” shall mean any day on which commercial banks are open for domestic and
international business in Detroit, Michigan, and if related to a determination of the
Eurocurrency-based Rate or to a Eurocurrency-based Advance, a day on which commercial banks are
open in the relevant interbank market for eurodollar transactions.



     “Capital Expenditures” shall mean, for any period, with respect to any Person, the aggregate
of all expenditures paid or payable by such Person and its Subsidiaries during such period for the
acquisition or leasing (pursuant to a Capitalized Lease) of fixed or capital assets or additions to
equipment, plant and property that should be capitalized under GAAP on a consolidated balance sheet
of such Person and its Subsidiaries.



     “Capitalized Lease” shall mean, as applied to any Person, any lease of any property (whether
real, personal or mixed) with respect to which the discounted present value of the rental
obligations of such Person as lessee thereunder, in conformity with GAAP, is required to be
capitalized on the balance sheet of that Person.



     “Change of Control” shall mean from and after the Effective Date, (i) the ceasing of the
Company to have beneficial ownership (within the meaning of Rule 13d-3 of the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended) or control of (a) one
hundred percent (100%) (on a fully-diluted basis, disregarding any director qualifying share



4









 




ownership) of the combined voting power of the then outstanding membership interest or stock of the
Guarantors (other than Olympic Steel Iowa, Inc.), Olympic Steel Receivables, Inc. and Olympic Steel
Trading, Inc. (or any successor, by operation of law or otherwise, or assignee thereof) entitled to
vote generally in the election of directors or managers thereof and (b) ninety nine percent (99%)
(on a fully-diluted basis, disregarding any director qualifying share ownership) of the combined
voting power of the then outstanding membership interests or stock (or any successor, by operating
of law or otherwise, or assign thereof) entitled to vote generally in the election of directors or
managers of Olympic Steel Receivables L.L.C., or (ii) the ceasing of Olympic Steel Minneapolis,
Inc. to have beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended) or control of one hundred percent
(100%) (on a fully-diluted basis, disregarding any director qualifying share ownership) of the
combined voting power of the then outstanding stock of Olympic Steel Iowa, Inc. (or any successor,
by operation of law or otherwise, or assign thereof) entitled to vote generally in the election of
directors or managers of Olympic Steel Iowa, Inc. or (iii) individuals who constitute the board of
directors of the Company (the “Incumbent Board”) as of the Effective Date shall cease to constitute
for any reason at least a majority of the Board of Directors of the Company at any time;
provided, however, that any Person becoming a director subsequent to the Effective
Date whose election (or nomination for election) was approved by a vote of at least 66 2/3% of the
directors comprising the Incumbent Board shall be considered for purposes hereof as though such
Person was a member of the Incumbent Board (and the former member of the Incumbent board who has
been replaced thereby shall thereupon no longer be considered to be a member of the Incumbent
Board).




     “Closing Date”, as such term is used in any Loan Document, shall mean the “Closing Date” as
defined in the Prior Credit Agreement.



     “Collateral” shall mean all property or rights in which a security interest, mortgage, lien or
other encumbrance for the benefit of the Banks is or has been granted or arises or has arisen,
under or in connection with this Agreement, the other Loan Documents, or otherwise to secure the
Obligations.



     “Collateral Access Agreement” shall mean an agreement in form and substance reasonably
satisfactory to the Agent pursuant to which a mortgagee or lessor of real property on which
Collateral is stored or otherwise located, or a warehouseman, processor or other bailee of
Inventory or other property owned by a Borrowing Base Obligor, that acknowledges the Liens under
the Collateral Documents and subordinates or waives any Liens held by such Person on
such property and, in the case of any such agreement with a mortgagee or lessor, permits the
Agent reasonable access to and the use of such real property during the continuance of an Event of
Default to assemble, complete and sell any Collateral stored or otherwise located thereon.



     “Collateral Documents” shall mean the Security Agreement, the Pledge Agreements, the
Mortgages, the Reaffirmation of Loan Documents and all of the other acknowledgments, certificates,
stock powers, financing statements, instruments and other security documents executed by Company or
any Subsidiary in favor of the Agent for the benefit of the Banks and delivered to the Agent, as
security for the Obligations, in each case as of the Effective Date, the Restatement Effective Date
or, from time to time, subsequent thereto, as applicable, in each case, as such collateral
documents may be amended or otherwise modified from time to time.



5









 





     “Comerica Bank” shall mean Comerica Bank, a Texas banking association, its successors or
assigns.



     “Commercial Letters of Credit” shall mean the commercial letters of credit issued by the
Issuing Bank for the account of an Account Party or Account Parties for the purchase of goods in
the ordinary course of business and providing for payment of sight drafts when presented for honor
in accordance with the terms thereof and when accompanied by documents complying with the terms
thereof.



     “Commitment” shall mean the Revolving Credit Aggregate Commitment.



     “Commonly Controlled Entity” shall mean an entity, whether or not incorporated, which is under
common control with the Company within the meaning of Section 4001 of ERISA or which is part of a
group which includes the Company and which is treated as a single employer under Section 414 of the
Internal Revenue Code.



     “Company” is defined in the preamble.



     “Company Pledge Agreement” shall mean the Pledge and Security Agreement-Borrower, dated June
28, 2001 executed and delivered by the Company and National City Commercial Finance, Inc.
(predecessor administrative agent to Agent), as agent for the Banks covering all shares or other
membership interests issued or to be issued by any domestic Subsidiary of the Company which is
required to become a Guarantor hereunder, as amended, restated, supplemented or replaced from time
to time.



     “Consolidated” (or “consolidated”) or “Consolidating” (or “consolidating”) shall mean, when
used with reference to any financial term in this Agreement, the aggregate for two or more Persons
of the amounts signified by such term for all such Persons determined on a consolidated basis in
accordance with GAAP. Unless otherwise specified herein, “Consolidated” and “Consolidating” shall
refer to Company and its Subsidiaries (including Company), determined on a Consolidated or
Consolidating basis, as the case may be.



     “Consolidated Debt Service Coverage Ratio” shall mean as of any date of determination the
ratio of (a) Consolidated Pre-Tax Income for the Applicable Measuring Period ending on
such date of determination, plus to the extent deducted in determining Consolidated
Pre-Tax Income, Consolidated Interest Expense for such period and depreciation and amortization for
such period, income tax refunds received in cash during such period and other non-cash items
acceptable to Agent, less cash (non-financed) Capital Expenditures of Company and its
Consolidated Subsidiaries made or paid during such period and income taxes paid in cash by Company
and its Consolidated Subsidiaries during such period to (b) all scheduled interest and principal
payable during such period with respect to Consolidated Funded Debt plus all cash
Distributions paid by Company during such period to the holders of its Equity Interests.



     “Consolidated Funded Debt” shall mean at any date, the aggregate amount of all Funded Debt of
the Company and its Subsidiaries at such date, determined on a consolidated basis in accordance
with GAAP.



6









 





     “Consolidated Interest Expense” shall mean for any period total cash interest expense
(including that attributable to Capitalized Leases) of Company and its Consolidated Subsidiaries
for such period plus, without duplication, capitalized interest expense for such period.



     “Consolidated Leverage Ratio” shall mean as of any date of determination the ratio of (a)
Consolidated Total Liabilities as of such date to (b) Consolidated Tangible Net Worth as of such
date.



     “Consolidated Pre-Tax Income” shall mean for any period, the consolidated pre-tax income (or
loss) of Company and its Subsidiaries, determined on a consolidated basis in accordance with GAAP;
provided that there shall be included therein (a) the income (or deficit) of OLP LLC and
G.S.P. LLC and (b) the income (or deficit) of any Person that is or was a Subsidiary or operating
division of the Company or any Subsidiary accrued prior to the date it is merged into or
consolidated with the Company or any of its Subsidiaries and further provided that, except
as expressly included by this definition, there shall be excluded therefrom (i) the income (or
deficit) of any Person accrued prior to the date it becomes a Subsidiary or is merged into or
consolidated with the Company or any of its Subsidiaries, (ii) the income (or deficit) of any
Person (other than a Subsidiary of Company) in which Company or any of its Subsidiaries has an
ownership interest, except to the extent that any such income is actually received by Company or
its Subsidiary in the form of dividends or similar distributions and (iii) the undistributed
earnings of any Subsidiary of Company to the extent that the declaration or payment of dividends or
similar distributions by such Subsidiary is not at the time permitted by the terms of any
Contractual Obligation (other than under any Loan Document) or Requirement of Law applicable to
such Subsidiary.



     “Consolidated Tangible Net Worth” shall mean as of any date of determination the sum of (a)
all amounts that would be included under stockholders’ equity on a Consolidated balance sheet of
Company and its Subsidiaries, less goodwill and other intangible assets plus (b) the
outstanding principal amount of Subordinated Debt as of such date, all as determined in accordance
with GAAP.



     “Consolidated Total Liabilities” shall mean (i) all obligations of Company and its
Subsidiaries to repay or pay money borrowed from another Person or the deferred portion of the
purchase price of services or property to the extent required to be recorded as a liability in
accordance with GAAP (other than inventory purchased in the ordinary course of business unless
evidenced by a note payable); and (ii) all other items (except items of capital stock, capital
surplus, general contingency reserves, deferred income taxes, retained earnings and amounts
attributable to minority interest, if any) which in accordance with GAAP would be included in
determining total liabilities as shown on the liability side of a balance sheet of Company and its
Subsidiaries as of the date Consolidated Total Liabilities is to be determined.



     “Contractual Obligation” shall mean, as to any Person, any provision of any security issued by
such Person or of any agreement, instrument or other undertaking to which such Person is a party or
by which it or any of its property is bound.



     “Covenant Compliance Report” shall mean the report to be furnished by the Company to the Agent
pursuant to Section 7.2(a) hereof, in the form attached hereto Exhibit M and certified




7











 




by a Responsible Officer, which report shall include, among other things, detailed calculations and the
resultant ratios or financial tests with respect to the financial covenants contained in Sections
7.9 and 7.10 and 8.7 of this Agreement, accompanied by such other supplemental or supporting
information as may be reasonably requested by Agent or Majority Banks.




     “De Minimis Matters” shall mean any suits, actions, proceedings, investigations, or other
matters, the existence of which and any liability which may result therefrom, would not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.



     “Debt” shall mean as to any Person, without duplication (a) all Funded Debt of a Person, (b)
all Guarantee Obligations of such Person, (c) all obligations of such Person under conditional sale
or other title retention agreements relating to property or assets purchased by such Person, (d)
all indebtedness of such Person arising in connection with any interest rate swap transaction,
basis swap transaction, forward rate transaction, commodity swap transaction, equity transaction,
equity index transaction, foreign exchange transaction, cap transaction, floor transaction
(including any option with respect to any of these transactions and any combination of any of the
foregoing) entered into by such Person and (e) any obligations in respect of phantom stocks which
would be classified as liabilities on the balance sheet of a Person, but shall exclude obligations
of Company and/or any Subsidiary under any Deferred Inventory Purchase Program.



     “Default” shall mean any event which with the giving of notice or the passage of time, or
both, would constitute an Event of Default under this Agreement.



     “Defaulting Bank” is defined in Section 2.4(c).



     “Default Rate” shall mean the per annum rate of interest imposed by the requisite Banks under
Section 2.9 or 4.9 hereof.



     “Deferred Inventory Purchase Program” shall mean any program under which the Company and/or
any Subsidiary sells its Inventory to a third party and retains a right to repurchase that same
Inventory on a consigned basis.



     “Deposit Account Control Agreement” shall mean, with respect to a deposit account maintained
at a depository institution, an agreement among Agent, the depository institution and the owner of
such deposit account, in form and substance acceptable to Agent in the exercise of its sole, but
reasonable, discretion.



     “Designated Hedge Agreement” means any Hedging Transaction entered into between the Company
and any Designated Hedge Creditor.



     “Designated Hedge Creditor” shall mean the Bank or Affiliate of a Bank which is a party to a
Designated Hedge Agreement.



     “Designated Hedge Obligation” shall mean Debt under Hedging Transactions.



     “Designated Letter of Credit Issuer”, as used in any Loan Document, shall mean the Issuing
Bank.



8









 





     “Distribution” is defined in Section 8.5 hereof.



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



     “Domestic Advance” shall mean any Advance other than a Eurocurrency-based Advance.



     “E-System” shall mean any electronic system and any other Internet or extranet-based site,
whether such electronic system is owned, operated or hosted by the Agent, any of its Affiliates or
any other Person, providing for access to data protected by passcodes or other security system.



     “Effective Date” shall mean December 30, 2002.



     “Electronic Transmission” shall mean each document, instruction, authorization, file,
information and any other communication transmitted, posted or otherwise made or communicated by
e-mail or E-Fax, or otherwise to or from an E-System or other equivalent service.



     “Eligible Account” shall mean an Account of a Borrowing Base Obligor which has been included
in a Borrowing Base Certificate to determine the Borrowing Base, and as to which Account the
following is true and accurate as of the time it was utilized to determine the Borrowing Base and
as of the time Company has requested a Revolving Credit Advance based in part thereon:



     (a) arose in the ordinary course of such Borrowing Base Obligor’s business;



     (b) it is not owing more than ninety (90) days after the date of the invoice evidencing such
Account;



     (c) it is not owing by an Account Debtor who has failed to pay twenty five percent (25%) or
more of the aggregate amount of its Accounts owing to the applicable Borrowing Base Obligor within
ninety (90) days after the date of the respective invoices or other writings evidencing such
Accounts;



     (d) it arises from the sale or lease of goods and such goods have been shipped or delivered to
the Account Debtor under such Account; or it arises from services rendered and such services have
been performed;



     (e) it is evidenced by an invoice, dated not later than the date of shipment or performance,
rendered to such Account Debtor or some other evidence of billing acceptable to Agent and is not
evidenced by any instrument or chattel paper;



     (f) it is a valid, legally enforceable obligation of the Account Debtor thereunder, and is not
subject to any offset, counterclaim or other defense on the part of such Account Debtor with
respect to any claim on the part of such Account Debtor denying liability thereunder in whole;



     (g) the applicable Borrowing Bank Obligor has granted to the Agent for the benefit of the
Banks a perfected security interest in such Account prior in right to all other persons or entities



9









 







and such Account is not subject to any sale of accounts, any rights of offset, assignment, lien or
security interest whatsoever other than to Agent for the benefit of the Banks and Permitted Liens;



     (h) is not an Account owing by the United States or any state or political subdivision
thereof, or by any department, agency, public body corporate or other instrumentality of any of the
foregoing, unless all necessary steps are taken to comply with the Federal Assignment of Claims Act
of 1940, as amended, or with any comparable state law, if applicable, and all other necessary steps
are taken to perfect Agent’s security interest in such Account;



     (i) it is not owing by a Subsidiary or Affiliate of any Borrowing Base Obligor, nor by an
Account Debtor which (i) does not maintain its chief executive office in the United States of
America, Canada or Puerto Rico, (ii) is not organized under the laws of the United States of
America, or any state thereof, Canada or Puerto Rico, or (iii) is the government of any foreign
country or sovereign state, or of any state, province, municipality or other instrumentality
thereof;



     (j) it is not an Account billed in advance, not an Account payable on delivery, not an Account
billed in advance for consigned goods (unless such consigned goods are reported on the Company’s
usage report and not classified as Inventory by Company), not an Account for guaranteed sales, not
an Account for unbilled sales, not an Account for progress billings, not an Account payable at a
future date (other than being current) in accordance with its terms, not an Account subject to a
retainage or holdback by the Account Debtor or not an Account insured by a surety company;



     (k) it is not owing by G.S.P LLC or OLP LLC;



     (l) it is not owing by any Account Debtor whose obligations Agent, acting in its sole, but
reasonable, discretion, shall have notified Company are not deemed to constitute Eligible Accounts;



     (m) it is not an Account with respect to which the Account Debtor is the subject of any
bankruptcy or other insolvency proceeding unless in the case of a bankruptcy proceeding the Account
arose subsequent to the filing of the applicable petition in bankruptcy; and



     (n) it is not an Account arising from the Deferred Inventory Purchase Program.


An Account which is at any time an Eligible Account, but which subsequently fails to meet any of
the foregoing requirements, shall forthwith cease to be an Eligible Account. An Account which
would otherwise qualify as an Eligible Account but which is excluded under clause (f) above because
it is subject to an offset, counterclaim or defense on the part of the Account Debtor in part, but
not in whole, or to any claim on the part of the Account Debtor denying liability thereunder in
part, but not in whole, shall be an Eligible Account only to the extent not subject to such offset, counterclaim, defense or denial of liability and in such case only if the
amount of such offset, counterclaim, defense or denial of liability can be determined to Agent’s
sole but reasonable satisfaction.




     “Eligible Inventory” shall mean Inventory of a Borrowing Base Obligor which has been included
in a Borrowing Base Certificate to determine the Borrowing Base and as to which



10









 







Inventory the
following is true and accurate as of the time it was utilized to determine the Borrowing Base and
as of the time the Company have requested an Advance based in part thereon:



     (a) such item of Inventory is of merchantable quality for its type and is usable or salable by
a Borrowing Base Obligor in the ordinary course of its business (which shall include raw material
Inventory and finished goods Inventory, but not work-in-process Inventory);



     (b) the applicable Borrowing Base Obligor has granted to the Agent for the benefit of the
Banks a perfected security interest in such item of Inventory prior in right to all other persons
or entities and such item of Inventory has not been sold, transferred or otherwise assigned by the
applicable Borrowing Base Obligor, to any person other than the Banks;



     (c) such item of Inventory is in the possession and control of the applicable Borrowing Base
Obligor and, such item of Inventory is located within the continental United States of America at
such location or locations owned by the applicable Borrowing Base Obligor as Company shall have
represented in the Loan Documents, relating to Inventory, or, if such facilities are not so owned
by a Borrowing Base Obligor, Agent is in possession of a Collateral Access Agreement or other
acknowledgement agreement in favor of Agent with respect thereto;



     (d) the value of each item of Inventory utilized to determine the Borrowing Base was
determined in accordance with GAAP utilizing specific identification on an actual cost basis
subject to the lower of cost or market adjustments;



     (e) such Inventory is not held on a consignment unless (i) such consignments are to Ingersoll
Rand Company, Hendricks Manufacturing, Inc., Gradall, The Heil Co. or other consignee approved in
writing from time to time by Agent and (ii) Agent is in possession of a Collateral Access Agreement
or other acknowledgement agreements in favor of Agent with respect thereto;



     (f) such Inventory was not produced in violation of the Fair Labor Standards Act and is not
subject to the so-called “hot goods” provisions contained in Title 29 U.S.C. 215(a)(i);



     (g) such item of Inventory is not being held for return to the supplier thereof;



     (h) it is not Inventory which, in accordance with the applicable Borrowing Base Obligor’s
customary business practices, is determined to be unusable due to age, quality, type, category,
quantity or otherwise; and



     (i) it is not Inventory which Agent, acting in its sole, but reasonable, discretion, shall
have notified Company is not deemed to constitute Eligible Inventory.


Any inventory which is at any time Eligible Inventory, but which subsequently fails to meet any of
the foregoing requirements, shall forthwith cease to be Eligible Inventory.




     “Environmental Laws”, as such term is used in any Loan Document, shall mean Hazardous Material
Laws.



11









 





     “Equity Interests” means, with respect to any Person, any and all shares, share capital,
interests, participations, warrants, options or other equivalents (however designated) of capital
stock of a corporation and any and all equivalent ownership interests in a Person (other than a
corporation).



     “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended, or any
successor act or code and the regulations in effect from time to time thereunder.



     “Eurocurrency-based Advance” shall mean any Advance which bears interest at the
Eurocurrency-based Rate.



     “Eurocurrency-based Rate” shall mean a per annum interest rate which is equal to the sum of
(a) the Applicable Margin, plus (b) the quotient of:




	 	(A)	 	the per annum interest rate at which deposits
in the relevant eurocurrency are offered to Agent’s Eurocurrency
Lending Office by other prime banks in the eurocurrency market in an
amount comparable to the relevant Eurocurrency-based Advance and for a
period equal to the relevant Eurocurrency-Interest Period at
approximately 11:00 A.M. Detroit time two (2) Business Days prior to
the first day of such Eurocurrency-Interest Period, divided by
	 
	 	(B)	 	a percentage equal to 100% minus the maximum
rate on such date at which Agent is required to maintain reserves on
“Eurocurrency Liabilities” as defined in and pursuant to Regulation D
of the Board of Governors of the Federal Reserve System or, if such
regulation or definition is modified, and as long as Agent is required
to maintain reserves against a category of liabilities which includes
eurocurrency deposits or includes a category of assets which includes
eurocurrency loans, the rate at which such reserves are required to be
maintained on such category,




such sum to be rounded upward, if necessary, to the nearest whole multiple of 1/16th of 1%.




     “Eurocurrency-Interest Period” shall mean, for any Eurocurrency-based Advance, an interest
period of one, two, three or six months (or any lesser or greater number of days agreed to in
advance by the Company, Agent and the Banks) as selected by the Company, for such
Eurocurrency-based Advance pursuant to Section 2.3, 2.5 or 4.4 hereof, as the case may be.



     “Eurocurrency Lending Office” shall mean, (a) with respect to the Agent, Agent’s office
located at its Grand Caymans Branch or such other branch of Agent, domestic or foreign, as it
may hereafter designate as its Eurocurrency Lending Office by written notice to Company and
the Banks and (b) as to each of the Banks, its office, branch or affiliate located at its address
set forth on the signature pages hereof (or identified thereon as its Eurocurrency Lending Office),
or at such other office, branch or affiliate of such Bank as it may hereafter designate as its
Eurocurrency Lending Office by written notice to Company and Agent.



12









 





     “Event of Default” shall mean each of the Events of Default specified in Section 9.1 hereof.



     “Existing Advances” shall mean all Advances outstanding under the Amended and Restated Credit
Agreement as of the Restatement Effective Date, each of which shall continue as Advances under this
Agreement upon the effectiveness of this Agreement.



     “Existing Letters of Credit” shall mean all Letters of Credit outstanding under the Amended
and Restated Credit Agreement as of the Restatement Effective Date, each of which shall continue as
Advances under this Agreement upon the effectiveness of this Agreement.



     “Federal Funds Effective Rate” shall mean, for any day, a fluctuating interest rate per annum
equal to the weighted average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers, 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 Agent from three Federal funds brokers
of recognized standing selected by it, all as conclusively determined by the Agent, such sum to be
rounded upward, if necessary, to the nearest whole multiple of 1/16th of 1%.



     “Fee Letter” shall mean each fee letter in effect from time to time between Company and the
Agent or any Bank hereunder, as amended from time to time.



     “Fees” shall mean the Revolving Credit Commitment Fee, the Letter of Credit Fees and the other
fees and charges payable by the Company to the Banks or Agent hereunder or under any Fee Letter.



     “Final Maturity Date” shall mean the Revolving Credit Maturity Date.



     “Funded Debt” of any Person shall mean (a) all indebtedness of such Person for borrowed money
or for the deferred purchase price of property or services as of such date (other than operating
leases and trade liabilities incurred in the ordinary course of business and payable in accordance
with customary practices) or which is evidenced by a note, bond, debenture or similar instrument,
(b) the principal component of all obligations of such Person under Capitalized Leases, (c) all
reimbursement obligations (actual, contingent or otherwise) of such Person in respect of letters of
credit, acceptances or similar obligations issued or created for the account of such Person, (d)
all liabilities secured by any liens on any property owned by such Person as of such date even
though such Person has not assumed or otherwise become liable for the payment thereof, in each case
determined in accordance with GAAP; provided however that so long as such Person is not personally
liable for such liabilities, the amount of such liability shall be deemed to be the lesser of the
fair market value at such date of the property subject to the lien securing such liability and the amount of the liability secured, and (e) all
Guarantee Obligations (excluding the Guarantee Obligations existing on the Restatement Effective
Date and set forth on Schedule 8.3 hereof) in respect of any liability which constitutes
Funded Debt; provided, however that Funded Debt shall not include any interest rate swap
transaction, basis swap transaction, forward rate transaction, commodity swap transaction, equity
transaction,



13









 







equity index transaction, foreign exchange transaction, cap transaction, floor
transaction (including any option with respect to any of these transactions and any combination of
any of the foregoing) entered into by such Person prior to the occurrence of a termination event
with respect thereto.



     “GAAP” shall mean generally accepted accounting principles in the United States of America,
consistently applied; provided however that in the case of determination of compliance with the
financial covenants set forth in Sections 7.9, 7.10 and 8.7, GAAP shall mean such accounting
principles as in effect on the Restatement Effective Date.



     “Governmental Obligations” means noncallable direct general obligations of the United States
of America or obligations the payment of principal of and interest on which is unconditionally
guaranteed by the United States of America.



     “Guarantee Obligation” shall mean as to any Person (the “guaranteeing person”) any obligation
of the guaranteeing person in respect of any obligation of another Person (including, without
limitation, any bank under any letter of credit), the creation of which was induced by a
reimbursement agreement, guaranty agreement, keepwell agreement, purchase agreement,
counterindemnity or similar obligation issued by the guaranteeing person, in either case
guaranteeing or in effect guaranteeing any Debt, leases, dividends or other obligations (the
“primary obligations”) of any other third Person (the “primary obligor”) in any manner, whether
directly or indirectly, including, without limitation, any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or any property constituting
direct or indirect security therefor, (ii) to advance or supply funds (1) for the purchase or
payment of any such primary obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the owner of any such primary obligation
against loss in respect thereof; provided, however, that the term Guarantee Obligation shall not
include endorsements of instruments for deposit or collection in the ordinary course of business.
The amount of any Guarantee Obligation of any guaranteeing person shall be deemed to be the lower
of (a) an amount equal to the stated or determinable amount of the primary obligation in respect of
which such Guarantee Obligation is made and (b) the maximum amount for which such guaranteeing
person may be liable pursuant to the terms of the instrument embodying such Guarantee Obligation,
unless such primary obligation and the maximum amount for which such guaranteeing person may be
liable are not stated or determinable, in which case the amount of such Guarantee Obligation shall
be such guaranteeing person’s maximum reasonably anticipated liability in respect thereof as
determined by Company in good faith.



     “Guarantor(s)” shall mean each Subsidiary of the Company, but excluding the Subsidiaries
identified on Schedule 1.3 annexed hereto, which is required by the Banks to guarantee the
obligations of the Company hereunder and under the other Loan Documents.



     “Guaranty” shall mean that certain guaranty of all outstanding Obligations of the Company,
dated December 31, 2002, executed and delivered by the Guarantors to the Agent, on behalf of the
Banks, or to be executed by any Guarantor after the Restatement Effective Date



14









 







(whether by
execution thereof or by execution of the Joinder Agreement attached as Exhibit “A” to the form of
such Guaranty), in the form annexed hereto as Exhibit J, as amended, restated or otherwise
modified from time to time.



     “Hazardous Material” shall mean any hazardous or toxic waste, substance or material defined or
regulated as such in or for purposes of the Hazardous Material Laws.



     “Hazardous Material Law(s)” shall mean all laws, codes, ordinances, rules, regulations,
orders, decrees and final, written directives issued by any federal, state, local or other
governmental or quasi-governmental authority or body (or any agency, instrumentality or political
subdivision thereof) which are applicable to Borrower’s or any Subsidiary’s operations and which
regulate, relate to or impose liability or standards of conduct concerning Hazardous Materials
which are regulated for reasons of human health or the environment and which is present or alleged
to be present on or about or used in any facilities owned, leased or operated by the Company or any
of their respective Subsidiaries, or any portion thereof including, without limitation, those
relating to soil, surface, subsurface ground water conditions and the condition of the indoor and
outdoor ambient air; any so-called “superfund” or “superlien” law; as now or at any time during the
term of the Agreement in effect.



     “Hedging Transaction” means each interest rate swap transaction, basis swap transaction,
forward rate transaction, commodity swap transaction, equity transaction, equity index transaction,
foreign exchange transaction, cap transaction, floor transaction (including any option with respect
to any of these transactions and any combination of any of the foregoing) entered into by the
Company from time to time; provided that such transaction is entered into for risk management
purposes and not for speculative purposes.



     “Hereof”, “hereto”, “hereunder”, “herein” and similar terms shall refer to this Agreement and
not to any particular paragraph or provision of this Agreement.



     “Increased Costs” is defined in Section 11.6 hereof.



     “Indebtedness”, as used in any Loan Document, shall mean the Obligations.



     “Instruments”, as used in any Loan Document, shall mean “instruments” as such term is defined
in the Uniform Commercial Code.



     “Intercompany Loan” shall mean any loan (or advance in the nature of a loan) by the Company to
any Subsidiary, or by any Subsidiary to the Company or to any other Subsidiary, provided that each
such loan or advance is subordinated in right of payment and priority to the Obligations on terms
and conditions satisfactory to Agent and the Majority Banks.



     “Intercompany Loans, Advances or Investments” shall mean any Intercompany Loan, and any
advance or investment of the Company or any Subsidiary (including without limitation any guaranty
of obligations or indebtedness to third parties) to or in another Subsidiary (or by any Subsidiary
to the Company).



15









 





     “Intercompany Note” shall mean any promissory note issued or to be issued by the Company or
any Subsidiary to evidence an Intercompany Loan substantially in the form of Exhibit L.



     “Interest Period” shall mean with respect to a Eurocurrency-based Advance, a
Eurocurrency-Interest Period, commencing on the day a Eurocurrency-based Advance is made, or on the
effective date of an election of the Eurocurrency-based Rate made under Section 2.3 or 4.4 hereof;
provided, however that (i) any Interest Period which would otherwise end on a day which is
not a Business Day shall end on the next succeeding Business Day, except that as to an Interest
Period in respect of a Eurocurrency-based Advance, if the next succeeding Business Day falls in
another calendar month, such Interest Period shall end on the next preceding Business Day, (ii)
when an Interest Period in respect of a Eurocurrency-based Advance begins on a day which has no
numerically corresponding day in the calendar month during which such Interest Period is to end, it
shall end on the last Business Day of such calendar month, and (iii) no Interest Period in respect
of any Advance shall extend beyond the Revolving Credit Maturity Date.



     “Internal Revenue Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time, and the regulations promulgated thereunder.



     “Inventory” shall have the meaning ascribed to such term in the Uniform Commercial Code.



     “Investment” shall mean, when used with respect to any Person, (a) any loan, investment or
advance made by such Person to any other Person (including, without limitation, any contingent
obligation) in respect of any capital stock, Debt, obligation or liability of such other Person and
(b) any other investment made by such Person (however acquired) in stock or other ownership
interests in any other Person, including, without limitation, any investment made in exchange for
the issuance of shares of stock of such Person.



     “Issuing Bank” shall mean Comerica Bank in its capacity as issuer of one or more Letters of
Credit hereunder, or its successor designated by the Company and the Revolving Credit Banks.



     “Joint Venture” shall mean a corporation, association, joint stock company, business trust,
limited liability company or any other business entity of which not more than fifty percent (50%)
of the outstanding voting stock, share capital, membership or other interests, as the case may be,
is owned either directly or indirectly by any Person or one or more of its Subsidiaries. Unless
otherwise specified to the contrary herein or the context otherwise requires, Joint Venture shall
refer to each Person which is a Joint Venture of the Company, and the Joint Ventures of Company
include, as of the date hereof, OLP, LLC and GSP, LLC.



     “Issuing Office” shall mean such office as Issuing Bank shall designate as its Issuing Office.



     “Lender Products” shall mean any one or more of the following types of services or facilities
extended to the Company or any of its Subsidiaries by any Bank: (i) credit cards, (ii) credit card
processing services, (iii) debit cards, (iv) purchase cards, (v) Automated Clearing



16









 







House (ACH)
transactions, (vi) cash management, including controlled disbursement services, and (vii)
establishing and maintaining deposit accounts.



     “Letter of Credit” shall mean any Standby Letter of Credit and/or Commercial Letter of Credit
and “Letters of Credit” shall mean all of them, and shall include all Existing Letters of Credit.



     “Letter of Credit Agreement” shall mean, in respect of each Letter of Credit, the application
and related documentation satisfactory to the Issuing Bank of an Account Party or Account Parties
requesting Issuing Bank to issue such Letter of Credit, as amended from time to time.



     “Letter of Credit Documents” shall have the meaning ascribed to such term in Section 3.7(a)
hereof.



     “Letter of Credit Fees” shall mean the fees payable to Agent for the accounts of the Revolving
Credit Banks in connection with Letters of Credit pursuant to Section 3.4(a) and (b) hereof.



     “Letter of Credit Maximum Amount” shall mean Twenty Five Million Dollars ($25,000,000).



     “Letter of Credit Obligations” shall mean as of any date of determination, the sum of (a) the
aggregate undrawn amount of all Letters of Credit then outstanding, (b) the aggregate face amount
of all Letters of Credit requested but not yet issued as of such date and (c) the aggregate amount
of Reimbursement Obligations which have not been reimbursed by the Company as of such date.



     “Letter of Credit Payment” shall mean any amount paid or required to be paid by the Issuing
Bank in its capacity hereunder as issuer of a Letter of Credit as a result of a draft or other
demand for payment under any Letter of Credit.



     “Lien” shall mean any pledge, assignment, hypothecation, mortgage, security interest, deposit
arrangement, option, trust receipt, conditional sale or title retaining contract, sale and
leaseback transaction, Capitalized Lease, or any other similar type of lien, charge, encumbrance,
preferential or priority arrangement, whether based on common law or statute.



     “Loan Documents” shall mean, collectively, this Agreement, the Notes (if issued), the Letter
of Credit Agreements, the Letters of Credit, the Guaranty, the Subordination Agreements, the
Collateral Documents, any Designated Hedge Agreement, any Deposit Account Control Agreement and any
other documents, certificates, instruments or agreements executed or delivered pursuant to or in connection with any such document or this Agreement, as such
documents may be amended or otherwise modified from time to time.



     “Loan Parties” shall mean the Company and each Guarantor and “Loan Party” shall mean any one
of them, as the context indicates or otherwise requires.



17









 





     “Majority Banks” shall mean as of any date of determination: (a) so long as the Revolving
Credit Aggregate Commitment is outstanding hereunder, the Banks holding not less than 66-2/3% of
the sum of (i) the aggregate principal amount of the Revolving Credit Aggregate Commitment and (b)
if the Revolving Credit Aggregate Commitment has been terminated, Banks holding not less than
66-2/3% of the aggregate principal amount of Obligations then outstanding hereunder (provided that,
for purposes of determining Majority Banks hereunder, Obligations outstanding under the Swing Line
or under any Letter of Credit shall be allocated among the Revolving Credit Banks based on their
respective Revolving Credit Percentages); provided, however that so long as fewer than
three Banks are party to this Agreement, “Majority Banks” shall mean all Banks.



     “Material Adverse Effect” shall mean a material adverse effect on (a) the business or
financial condition of the Company and their respective Subsidiaries taken as a whole, (b) the
ability of the Company and the Guarantors to perform their respective obligations under this
Agreement, the Notes (if issued) or any other Loan Document to which any of them is a party, or (c)
the validity or enforceability of this Agreement, any of the Notes (if issued) or any of the other
Loan Documents or the rights or remedies of the Agent or the Banks hereunder or thereunder.



     “Maximum Lawful Rate” is defined in Section 12.13 hereof.



     “Mortgage(s)” shall mean the mortgage(s) and deeds of trust of real property (excluding the
real property identified on Schedule 1.4 annexed hereto) owned or leased by the Company or
any Subsidiary in form satisfactory to the Agent (and containing customary local law provisions for
comparable transactions) as the case may be, executed and delivered prior to the Effective Date, as
of the Effective Date or executed and delivered after the Effective Date by the Company or any
Subsidiary pursuant to Section 7.17 hereof, as such mortgages may be amended or otherwise modified
from time to time and “Mortgage” shall mean any of them.



     “Multiemployer Plan” shall mean a Pension Plan which is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.



     “Net Cash Proceeds” shall mean, with respect to any Asset Sale, the aggregate cash payments
received by the Company and/or any Subsidiary, as the case may be, from such Asset Sale, net of the
reasonable direct expenses of sale such as commissions, fees, and other expenses acceptable to
Agent and repayment of Debt secured by a security interest in such asset to the extent permitted
under Section 8.2(a), 8.2(b) or 8.2(e) of this Agreement and pro rated property and transfer taxes
and net of any taxes actually payable by the Company or such Subsidiary in respect of such sales,
taking into account the Company’s or such Subsidiary’s losses, if any, which are available under
applicable law to reduce such gains.



     “New Bank” is defined in clause (b) of Section 2.17.



     “New Bank Addendum” shall mean an addendum, substantially in the form of Exhibit Q hereto, to
be executed and delivered by each Bank becoming a party to this Agreement pursuant to Section 2.17
hereof.



     “Non-Defaulting Bank” is defined in Section 2.4(c).



18









 





     “Notes” shall mean the Revolving Credit Notes, the Swing Line Notes and the Term Notes.



     “Obligations” shall mean all indebtedness and liabilities including interest, fees and other
charges (including interest accruing at the then applicable rate provided in this Agreement or any
other applicable Loan Document after the Final Maturity Date and interest accruing at the then
applicable rate provided in this Agreement or any other applicable Loan Document after the filing
of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Company or any Guarantor, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding), arising under this Agreement or any of the
other Loan Documents, whether direct or indirect, absolute or contingent, of the Company or any
Subsidiary to any of the Banks or Affiliates thereof or to the Agent, in any manner and at any
time, whether arising under this Agreement, or under the Guaranty or any of the other Loan
Documents, due or hereafter to become due, now owing or that may hereafter be incurred by the
Company or any Subsidiary to, any of the Banks or Affiliates thereof or to the Agent under this
Agreement or any of the other Loan Documents, plus any liabilities of Company or any Subsidiary to
any Bank arising in connection with Lender Products, and any judgments that may hereafter be
rendered on such indebtedness or any part thereof, with interest according to the rates and terms
specified, or as provided by law, any payment obligations, if any, under Hedging Transactions
evidenced by Designated Hedge Agreements, and any and all consolidations, amendments, renewals,
replacements, substitutions or extensions of any of the foregoing; provided, however that for
purposes of calculating the Obligations outstanding under this Agreement or any of the other Loan
Documents, the direct and indirect and absolute and contingent obligations of the Company and the
Subsidiaries (whether direct or contingent) shall be determined without duplication.



     “Operating Lease” shall mean any lease (or other arrangement conveying the right to use) of
real or personal property, or any combination thereof, which lease is not required to be classified
as a Capitalized Lease in accordance with GAAP.



     “Pension Plan” shall mean any plan established and maintained by the Company or any Subsidiary
which is qualified under Section 401(a) of the Internal Revenue Code and subject to the minimum
funding standards of Section 412 of the Internal Revenue Code.



     “Percentage” shall mean the Revolving Credit Percentage.



     “Permitted Encumbrances”, as used in any Loan Document, shall mean the Liens permitted under
Section 8.2 hereof.



     “Permitted Investments” shall mean with respect to any Person:



     (a) Governmental Obligations;



     (b) Obligations of a state of the United States, the District of Columbia or any possession of
the United States, or any political subdivision thereof, which are described in Section 103(a) of
the Internal Revenue Code and are graded in any of the highest three (3) major grades as determined
by at least one Rating Agency; or secured, as to payments of principal and interest, by a letter of
credit provided by a financial institution or insurance provided by a bond insurance



19









 







company which in each case is itself or its debt is rated in one of the highest three (3) major grades as
determined by at least one Rating Agency;



     (c) Banker’s acceptances, commercial accounts, demand deposit accounts, money market accounts,
certificates of deposit, or depository receipts issued by or maintained with any Bank or a bank,
trust company, savings and loan association, savings bank or other financial institution whose
deposits are insured by the Federal Deposit Insurance Corporation and whose reported capital and
surplus equal at least $250,000,000, provided that such minimum capital and surplus requirement
shall not apply to demand deposit accounts maintained by the Company or any of the Subsidiaries in
the ordinary course of business;



     (d) Commercial paper rated at the time of purchase within the two highest classifications
established by not less than two Rating Agencies, and which matures within 270 days after the date
of issue;



     (e) Secured repurchase agreements against obligations itemized in paragraph (a) above, and
executed by a bank or trust company or by members of the association of primary dealers or other
recognized dealers in United States government securities, the market value of which must be
maintained at levels at least equal to the amounts advanced; and



     (f) Any fund or other pooling arrangement which exclusively purchases and holds the
investments itemized in (a) through (e) above.



     “Permitted Liens” shall mean with respect to any Person:



     (a) Liens for taxes not yet delinquent or which are being contested in good faith by
appropriate proceedings, provided that adequate reserves with respect thereto are maintained on the
books of such Person in conformity with GAAP;



     (b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s, landlord’s liens or
other like Liens arising in the ordinary course of business which are not overdue for a period of
more than 30 days or which are being contested in good faith by appropriate proceedings;
provided, however, that a reserve or other appropriate provisions shall have been made
therefor;



     (c) pledges or deposits made in the ordinary course of business in connection with workers’
compensation, unemployment insurance and other social security legislation and deposits securing
liability to insurance carriers under insurance or self-insurance arrangements;



     (d) deposits to secure (i) the performance of tenders or bids, trade contracts (other than for
borrowed money), statutory obligations, surety, customs, stay and appeal bonds, performance and
return of money bonds, government contracts and other obligations of a like nature or (ii) the
performance of Operating Leases or Capitalized Leases permitted hereunder, in each case given or
incurred on terms, in amounts and otherwise in the ordinary course of business;



     (e) easements, rights-of-way, restrictions, minor defects or irregularities in title and other
similar encumbrances or Liens incurred in the ordinary course of business which, in the aggregate,
are not substantial in amount and which do not in any case materially detract from the



20









 







value of the property subject thereto or materially interfere with the ordinary conduct of the business of such
Person;



     (f) any attachment or judgment Lien not constituting an Event of Default under subsection
9.1(h);



     (g) leases or subleases of real property interests granted to third parties in the ordinary
course of business and not interfering in any material respect with the ordinary conduct of
business by Company or any of its Subsidiaries;



     (h) any (i) interest or title of a lessor or sublessor under any Operating Lease or
Capitalized Lease permitted hereunder, (ii) restriction or encumbrance that the interest or title
of such lessor or sublessor may be subject to, or (iii) subordination of the interest of the lessee
or sublessee under such lease to any restriction or encumbrance referred to in the preceding clause
(ii), so long as the holder of such restriction or encumbrance agrees to recognize the rights of
such lessee or sublessee under such lease;



     (i) 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 in the ordinary course of
business;



     (j) 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; and



     (k) licenses of patents, trademarks and other intellectual property rights granted by Company
or any of its Subsidiaries in the ordinary course of business and not interfering in any material
respect with the ordinary conduct of business by Company or any of its Subsidiaries.



     “Person” shall mean a natural person, corporation, limited liability company, partnership,
limited liability partnership, trust, incorporated or unincorporated organization, joint venture,
joint stock company, or a government or any agency or political subdivision thereof or other entity
of any kind.



     “Pledge Agreements” shall mean the Company Pledge Agreement and the Subsidiary Pledge
Agreement and each other pledge agreement which may be entered into to secure the Obligations from
time to time, as the same may be amended, restated or otherwise modified from time to time.



     “Potential Default”, as used in any Loan Document, shall mean a Default as defined herein.



     “Potential Financial Institution” is defined in Section 2.4(c).



     “Prime-based Advance” shall mean an Advance which bears interest at the Prime-based Rate.



21









 





     “Prime-based Rate” shall mean, for any day, that rate of interest which is equal to the sum of
the Applicable Margin plus the greater of (i) the Prime Rate, and (ii) the Alternate Base Rate.



     “Prime Rate” shall mean the per annum rate of interest announced by the Agent, at its main
office from time to time as its “prime rate” (it being acknowledged that such announced rate may
not necessarily be the lowest rate charged by the Agent to any of its customers), which Prime Rate
shall change simultaneously with any change in such announced rate.



     “Prior Agents” shall mean the Administrative Agent and the Lead Arranger, as each such term is
defined in the Prior Credit Agreement.



     “Prior Credit Agreement” is defined in Recital A.



     “Prior Guarantors” shall mean all of the Guarantors, as such term is defined in the Prior
Credit Agreement.



     “Prior Lenders” shall mean all of the Lenders, as such term is defined in the Prior Credit
Agreement.



     “Purchasing Bank” shall have the meaning set forth in Section 11.7.



     “Rating Agency” shall mean Moody’s Investor Services, Inc., Standard and Poor’s Ratings
Services, their respective successors or any other nationally recognized statistical rating
organization which is acceptable to the Agent.



     “Reaffirmation of Loan Documents” shall mean that certain Reaffirmation of Loan Documents
executed and delivered by the Company and its applicable Subsidiaries dated as of the Restatement
Effective Date, as the same may be amended, restated or otherwise modified from time to time.



     “Register” is defined in Section 13.8(f) hereof.



     “Reimbursement Obligation(s)” shall mean the aggregate amount of all unreimbursed drawings
under all Letter of Credit Agreements (excluding for the avoidance of doubt, amounts deemed to have
been advanced under Section 3.6(a)) together with all other sums, fees, charges and amounts which
may be owing to the Issuing Bank under such Letter of Credit Agreement or this Agreement relating
to Letters of Credit.



     “Required Banks”, as used in any Loan Document, shall mean the Majority Banks.



     “Request for Advance” shall mean a Request for Revolving Credit Advance or a Request for Swing
Line Advance, as the context may indicate, or otherwise require.



     “Request for Revolving Credit Advance” shall mean a request for a Revolving Credit Advance
issued by the Company under Section 2.3 of this Agreement in the form annexed hereto as
Exhibit A, as amended or otherwise modified in accordance with the terms hereof.



22









 





     “Request for Swing Line Advance” shall mean a request for a Swing Line Advance issued by the
Company under Section 2.5(c) of this Agreement in the form attached hereto as Exhibit D, as
amended or otherwise modified in accordance with the terms of this Agreement.



     “Requirement of Law” shall mean as to any Person, the certificate of incorporation and bylaws,
the partnership agreement or other equivalent organizational or governing documents of such Person
and any law, treaty, rule or regulation or determination of an arbitration or a court or other
Governmental Authority, in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.



     “Responsible Officer” shall mean the chief executive officer, chief financial officer,
treasurer or the president of the Company, or with respect to compliance with financial covenants,
the chief financial officer or the treasurer of the Company or any other officer having
substantially the same authority and responsibility.



     “Restatement Effective Date” shall mean the date on which all the conditions precedent set
forth in Sections 5.1 through 5.8 have been satisfied.



     “Revolving Credit” shall mean the revolving credit loans to be advanced to the Company by the
applicable Revolving Credit Banks pursuant to Section 2 hereof, in an aggregate amount (subject to
the terms hereof), not to exceed, at any one time outstanding, the Revolving Credit Aggregate
Commitment.



     “Revolving Credit Advance” shall mean a borrowing requested by the Company and made by the
Revolving Credit Banks under Section 2.1 of this Agreement, including without limitation any
readvance, refunding or conversion of such borrowing pursuant to Section 2.3 hereof and any advance
in respect of a Letter of Credit under Section 3.6(a) hereof, and shall include, as applicable, a
Eurocurrency-based Advance and/or a Prime-based Advance.



     “Revolving Credit Commitment”, as used in any Loan Document, shall mean the Revolving Credit
Aggregate Commitment.



     “Revolving Credit Aggregate Commitment” shall mean One Hundred Thirty Million Dollars
($130,000,000), subject to any increase in the Revolving Credit Aggregate Commitment pursuant to
Section 2.17 of this Agreement by an amount not to exceed the Revolving Credit Optional Increase
and subject to reduction or termination under Section 2.13, 2.14 or 9.2 hereof.



     “Revolving Credit Banks” shall mean the financial institutions from time to time parties
hereto as lenders of the Revolving Credit.



     “Revolving Credit Commitment Fee” shall mean the fees payable to Agent for distribution to the
Revolving Credit Banks pursuant to Section 2.12 hereof.



     “Revolving Credit Maturity Date” shall mean the earlier to occur of (i) December 15, 2011, as
such date may be extended pursuant to Section 2.16 hereof and (ii) the date on which the Revolving
Credit Aggregate Commitment shall terminate in accordance of the provisions of this Agreement.



23









 





     “Revolving Credit Notes” shall mean the revolving credit notes described in Section 2.2
hereof, made by the Company to each of the Revolving Credit Banks in the form annexed to this
agreement as Exhibit B, as such notes may be amended or supplemented from time to time, and
any other notes issued in substitution, replacement or renewal thereof from time to time.



     “Revolving Credit Optional Increase” shall mean an amount of up to Twenty Five Million Dollars
($25,000,000), minus the portions thereof applied from time to time after the Restatement Date
under Section 2.17 hereof to increase the Revolving Credit Aggregate Commitment.



     “Revolving Credit Percentage” shall mean with respect to each Revolving Credit Bank, its
percentage share, as set forth on Schedule 1.2. under column 1, of the Revolving Credit and its
risk participation in Letters of Credit and in any outstanding Swing Line Advances, as such
Schedule may be revised from time to time by Agent in accordance with Section 13.8.



     “Secured Parties” or “Secured Creditors”, as used in any Loan Document, shall mean the Banks.



     “Secured Obligations”, as used in any Loan Document shall mean the Obligations.



     “Security Agreement” shall mean collectively, the agreements identified on Schedule
1.5 annexed hereto as may be amended, restated, supplemented or replaced from time to time and any
other security agreement executed on or after the Effective Date by Company or any Subsidiary, in
form satisfactory to the Agent, pursuant to Section 7.17 hereof, as such security agreements may be
amended, restated or otherwise modified from time to time.



     “Senior Funded Debt” shall mean, as of any date of determination, Consolidated Funded Debt
other than Subordinated Debt.



     “Standby Letter(s) of Credit” shall mean any standby letters of credit issued by Issuing Bank
at the request of or for the account of an Account Party or Account Parties pursuant to Section 3
hereof.



     “Standby Letter of Credit Documents” is defined in Section 3.7.



     “Subordination Agreement” shall mean any subordination agreement entered into from time to
time between Agent, for and on behalf of the Banks, and any holder of Subordinated Debt, to
evidence the subordination of such Debt to the Obligations, as each such subordination agreement
may be amended from time to time.



     “Subordinated Debt” shall mean Funded Debt of the Company which has been subordinated in right
of payment and priority to the Obligations, all on terms and conditions satisfactory to the Agent
and the Majority Banks.



     “Subordinated Debt Documents” shall mean and include any documents evidencing any Subordinated
Debt, in each case as the same may be amended, modified or supplemented from time to time in
compliance with the terms of this Agreement.



24









 





     “Subordinated Debt Holder” shall mean the holder or payee of Subordinated Debt.



     “Subordinated Notes” shall mean any notes or instruments evidencing Subordinated Debt as the
same may be amended, modified or supplemented from time to time in compliance with the terms of
this Agreement.



     “Subsidiary(ies)” shall mean any other corporation, association, joint stock company, business
trust, limited liability company or any other business entity of which more than fifty percent
(50%) of the outstanding voting stock, share capital, membership or other interests, as the case
may be, is owned either directly or indirectly by any Person or one or more of its Subsidiaries, or
the management of which is otherwise controlled, directly, or indirectly through one or more
intermediaries, or both, by any Person and/or its Subsidiaries. Unless otherwise specified to the
contrary herein or the context otherwise requires, Subsidiary(ies) shall refer to each Person which
is a Subsidiary of the Company.



     “Subsidiary Pledge Agreement” shall mean that certain Pledge and Security Agreement –
Subsidiary dated June 28, 2001 between Olympic Steel-Minneapolis, Inc. and National City Commercial
Finance, Inc. (predecessor administrative agent to Agent, as agent for the Banks) and any other
security agreement executed on or after the date hereof by Company or any Subsidiary in favor of
Agent for the benefit of the Banks, pursuant to Section 7.17 hereof, as such agreements may be
amended, restated or otherwise modified from time to time.



     “Swing Line” shall mean the revolving credit loans to be advanced to the Company by the Swing
Line Bank pursuant to Section 2.5 hereof, in an aggregate amount (subject to the terms hereof), not
to exceed, at any one time outstanding, the Swing Line Maximum Amount.



     “Swing Line Advance” shall mean a borrowing made by Swing Line Bank to the Company pursuant to
Section 2.5 hereof.



     “Swing Line Bank” shall mean Comerica Bank in its capacity as lender under Section 2.5 of this
Agreement or its successor as lender of the Swing Line.



     “Swing Line Maximum Amount” shall mean Twenty Million Dollars ($20,000,000).



     “Swing Line Notes” shall mean the swing line notes which may be issued by the Company at the
request of Swing Line Bank pursuant to Section 2.5 hereof in the form annexed hereto as
Exhibit C, as the case may be, as such Notes may be amended or supplemented from time to
time, and any notes issued in substitution, replacement or renewal thereof from time to time.



     “Uniform Commercial Code” or “UCC” shall mean the Uniform Commercial Code of any applicable
state, and, unless specified otherwise the Uniform Commercial Code as in effect in the State of
Michigan.



     “USA Patriot Act” is defined in Section 6.9.



2. REVOLVING CREDIT









25









 








     2.1 Commitment. Subject to the terms and conditions of this Agreement (including
without limitation Section 2.3 hereof), each Revolving Credit Bank severally and for itself alone
agrees to make its Revolving Credit Percentage of Advances of the Revolving Credit in Dollars to
the Company from time to time on any Business Day during the period from the Restatement Effective
Date until (but excluding) the Revolving Credit Maturity Date in an aggregate amount, not to exceed
at any one time outstanding, such Bank’s Revolving Credit Percentage of the Revolving Credit
Aggregate Commitment; provided, however, (i) the amount of any Revolving Credit Advance to
be made shall not exceed Availability unless it is being used to pay reimbursement obligations in
accordance with Section 3.6 of this Agreement or to refund or convert an outstanding Advance and
(ii) no Advance of the Revolving Credit shall be made by Agent or any Bank if prior to the funding
of such Advance the Agent and such Bank have obtained actual knowledge (as determined in accordance
with Section 12.8 hereof for the Agent and each Bank) that after giving effect to such Advance an
Event of Default would exist under Section 7.19 hereof based on the then most recent Borrowing Base
Certificate furnished by Company to Agent under Section 7.2(d) hereof; provided, however,
the provisions of this clause (ii) shall not apply to any Advance the proceeds of which shall be
used to refund or convert a Swing Line Advance, or will be used to pay Reimbursement Obligations;
and provided, further, however, that the Revolving Credit Banks shall be obligated to make
an Advance of the Revolving Credit upon the date on which such Event(s) of Default has (have) been
waived by the requisite Revolving Credit Banks, as applicable. Subject to the terms and conditions
set forth herein, advances, repayments and readvances may be made under the Revolving Credit.



     2.2 Accrual of Interest and Maturity; Evidence of Obligations. (a) The Company
hereby unconditionally promises to pay to the Agent for the account of each Revolving Credit Bank
the then unpaid principal amount of each Revolving Credit Advance (plus all accrued and unpaid
interest) of such Revolving Credit Bank to the Company on the Revolving Credit Maturity Date and on
such other dates and in such other amounts as may be required from time to time pursuant to this
Agreement.



     (b) Each Revolving Credit Bank shall maintain in accordance with its usual practice an account
or accounts evidencing indebtedness of the Company to the appropriate lending office of such
Revolving Credit Bank resulting from each Revolving Credit Advance made by such lending office of
such Revolving Credit Bank from time to time, including the amounts of principal and interest
payable thereon and paid to such Revolving Credit Bank from time to time under this Agreement.



     (c) The Agent shall maintain the Register pursuant to Section 13.8(f), and a subaccount
therein for each Revolving Credit Bank, in which Register and subaccounts (taken together) shall be
recorded (i) the amount of each Revolving Credit Advance made hereunder, the type thereof and each
Interest Period applicable to any Eurocurrency-based Advance, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Company to each Revolving Credit
Bank hereunder in respect of the Revolving Credit Advances and (iii) both the amount of any sum
received by the Agent hereunder from the Company in respect of the Revolving Credit Advances and
each Revolving Credit Bank’s share thereof.



     (d) The entries made in the Register and the accounts of each Revolving Credit Bank maintained
pursuant to paragraphs (b) and (c) of this Section 2.1 shall, absent manifest error, to



26









 







the extent permitted by applicable law, be rebuttably presumptive evidence of the existence and amounts of the
obligations of the Company therein recorded; provided, however, that the failure of any Revolving
Credit Bank or the Agent to maintain the Register or any such account, as applicable, or any error
therein, shall not in any manner affect the obligation of the Company to repay the Revolving Credit
Advances (and all other amounts owing with respect thereto) made to the Company by the Revolving
Credit Banks in accordance with the terms of this Agreement.



     (e) The Company agrees that, upon written request to the Agent (with a copy to the Company) by
any Revolving Credit Bank, the Company will execute and deliver, to such Revolving Credit Bank, at
Company’s own expense, a Revolving Credit Note evidencing the outstanding Revolving Credit Advances
owing to such Revolving Credit Bank.



     2.3 Requests for and Refundings and Conversions of Advances. The Company may request
an Advance of the Revolving Credit, refund any such Advance in the same type of Advance or convert
any such Advance to any other type of Advance of the Revolving Credit only after delivery to Agent
of a Request for Revolving Credit Advance executed by a person previously authorized (in a writing
delivered to the Agent) by the Company to execute such Request, subject to the following:



     (a) each such Request for Revolving Credit Advance shall set forth the information required on
the Request for Revolving Credit Advance form annexed hereto as Exhibit A, including without
limitation:




	 	(i)	 	the proposed date of such Advance, which must be a Business
Day;
	 
	 	(ii)	 	whether such Advance is a refunding or conversion of an
outstanding Advance; and
	 
	 	(iii)	 	whether such Advance is to be a Prime-based Advance or a
Eurocurrency-based Advance, and, except in the case of a Prime-based Advance,
the first Interest Period applicable thereto.





     (b) each such Request for Revolving Credit Advance shall be delivered to Agent by 1:00 p.m.
(Detroit time) three (3) Business Days prior to the proposed date of Advance, except in the case of
a Prime-based Advance, for which the Request for Advance must be delivered by 1:00 p.m. (Detroit
time) on such proposed date for Advances;



     (c) on the proposed date of such Advance, after giving effect to all Advances and Letters of
Credit requested by the Company on such date (including, without duplication, the deemed Advances
funded by Agent under Section 3.6(a) hereof in respect of the Company’s or an applicable Account
Party’s reimbursement obligations hereunder), the sum of the aggregate principal amount of all
Advances of the Revolving Credit and of the Swing Line requested or outstanding on such date plus
the Letter of Credit Obligations as of such date, shall not exceed the lesser of the then
applicable (i) Revolving Credit Aggregate Commitment and (ii) Borrowing Base; provided,
however, that, in the case of any Advance being applied to refund or convert an outstanding Advance, the aggregate principal amount of such Advances to be refunded or
converted shall not be included for purposes of calculating availability under this Section 2.3(c);



27









 





     (d) in the case of a Prime-based Advance, the principal amount of the initial funding of such
Advance, shall be not less than the applicable amount set forth on Schedule 1.6 annexed
hereto;



     (e) in the case of a Eurocurrency-based Advance, the principal amount of such Advance, plus
the amount of any other outstanding Advance of the Revolving Credit to be then combined therewith
having the same Applicable Interest Rate and Interest Period, if any, shall be not less than the
applicable amount set forth on Schedule 1.6 annexed hereto and at any one time there shall
not be in effect more than three (3) Eurocurrency-based Rates and Eurocurrency-Interest Periods;



     (f) a Request for Revolving Credit Advance, once delivered to Agent, shall not be revocable by
the Company;



     (g) each Request for Revolving Credit Advance shall constitute a certification by the Company,
as of the date thereof that:




	 	(i)	 	both before and after such Advance, the obligations of the Loan
Parties set forth in this Agreement and the other Loan Documents to which such
Persons are parties are valid, binding and enforceable obligations of such Loan
Parties (subject to the limitations set forth in Section 6.7 and Section 6.8 of
this Agreement);
	 
	 	(ii)	 	all conditions to Advances of the Revolving Credit have been
satisfied, and shall remain satisfied to the date of such Advance (both before
and after giving effect to such Advance);
	 
	 	(iii)	 	there is no Default or Event of Default in existence, and none
will exist upon the making of such Advance (both before and after giving effect
to such Advance);
	 
	 	(iv)	 	the representations and warranties contained in this Agreement
and the other Loan Documents are true and correct in all material respects and
shall be true and correct in all material respects as of the making of such
Advance (both before and after giving effect to such Advance), other than any
representation or warranty that expressly speaks only as of a different date;
and
	 
	 	(v)	 	the execution of such Request for Advance will not violate the
material terms and conditions of any material contract, agreement or other Debt
of the Company.





Agent, acting on behalf of the Revolving Credit Banks, may, at its option, lend under this Section
2.3 upon the telephone or email request of a person previously authorized (in a writing delivered
to the Agent) by the Company to make such requests and, in the event Agent, acting on behalf of
the Revolving Credit Banks, makes any such Advance upon a telephone request, the requesting officer
shall fax or deliver by electronic file to Agent, on the same day as such telephone or email
request, a Request for Advance. The Company hereby authorizes Agent to disburse



28









 







Advances under this Section 2.3 pursuant to the telephone or email instructions of any person purporting to be a
person identified by name on a written list of persons authorized by the Company and delivered to
Agent prior to the date of such request to make Requests for Advance on behalf of the Company.
Notwithstanding the foregoing, the Company acknowledges that the Company shall bear all risk of
loss resulting from disbursements made upon any telephone or email request. Each telephone or email
request for an Advance shall constitute a certification of the matters set forth in the Request for
Revolving Credit Advance form as of the date of such requested Advance.



     2.4 Disbursement of Advances.



     (a) Upon receiving any Request for Revolving Credit Advance from the Company under Section 2.3
hereof, Agent shall promptly notify each Revolving Credit Bank by wire, telex or telephone
(confirmed by wire, telecopy or telex) of the amount of such Advance to be made and the date such
Advance is to be made by said Revolving Credit Bank pursuant to its Percentage of such Advance.
Unless such Revolving Credit Bank’s commitment to make Advances of the Revolving Credit hereunder
shall have been suspended or terminated in accordance with this Agreement, each such Revolving
Credit Bank shall make available the amount of its Percentage of each Advance in immediately
available funds to Agent, as follows:




	 	(i)	 	for Domestic Advances, at the office of Agent located at One
Detroit Center, Detroit, Michigan 48226, not later than 3:00 p.m. (Detroit
time) on the requested funding date; and
	 
	 	(ii)	 	for Eurocurrency-based Advances, at the Agent’s Correspondent
for the account of the Eurocurrency Lending Office of the Agent, not later than
12 noon (the time of the Agent’s Correspondent) on the requested funding date.





     (b) Subject to submission of an executed Request for Revolving Credit Advance by the Company
without exceptions noted in the compliance certification therein, Agent shall make available to the
Company, the aggregate of the amounts so received by it from the Revolving Credit Banks in like
funds and currencies:




	 	(i)	 	for Domestic Advances, not later than 4:00 p.m. (Detroit time)
on the requested funding date by credit to an account of Company maintained
with Agent or to such other account or third party as Company may reasonably
direct; and
	 
	 	(ii)	 	for Eurocurrency-based Advances, not later than 4:00 p.m. (the
time of the Agent’s Correspondent) on the requested funding date, by credit to
an account of the Company maintained with Agent’s Correspondent or to such
other account or third party as the Company may reasonably direct.





     (c) Agent shall deliver the documents and papers received by it for the account of each
Revolving Credit Bank to such Revolving Credit Bank or upon its order. Unless Agent shall have been
notified by any Revolving Credit Bank prior to the date of any proposed Revolving Credit Advance
that such Revolving Credit Bank does not intend to make available to Agent such




29












 




Revolving Credit Bank’s Percentage of such Advance, Agent may assume that such Revolving Credit
Bank has made such amount available to Agent on such date, as aforesaid and may, in reliance upon
such assumption, make available to the Company a corresponding amount. If such amount is not in
fact made available to Agent by such Revolving Credit Bank, as aforesaid, Agent shall be entitled
to recover such amount on demand from such Revolving Credit Bank. If such Revolving Credit Bank
does not pay such amount forthwith upon Agent’s demand therefor and the Agent has in fact made a
corresponding amount available to the Company, the Agent shall promptly notify the Company and the
Company shall pay such amount to Agent, if such notice is delivered to the Company prior to 1:00
p.m. (Detroit time) on a Business Day, on the day such notice is received, and otherwise on the
next Business Day, and such amount paid by Company shall be applied as a prepayment of the
Revolving Credit (without any corresponding reduction in the Revolving Credit Aggregate
Commitment), reimbursing Agent for having funded said amounts on behalf of such Revolving Credit
Bank. The Company shall retain its claim against such Revolving Credit Bank with respect to the
amounts repaid by it to Agent and, if such Revolving Credit Bank subsequently makes such amounts
available to Agent, Agent shall promptly make such amounts available to the Company as a Revolving
Credit Advance. The Agent shall also be entitled to recover from such Revolving Credit Bank or the
Company, as the case may be, but without duplication, interest on such amount in respect of each
day from the date such amount was made available by Agent to the Company, to the date such amount
is recovered by Agent, at a rate per annum equal to:





	 	(i)	 	in the case of such Revolving Credit Bank, for the first two
(2) Business Days such amount remains unpaid, with respect to Domestic
Advances, the Federal Funds Effective Rate, and with respect to
Eurocurrency-based Advances, Agent’s aggregate marginal cost (including the
cost of maintaining any required reserves or deposit insurance and of any fees,
penalties, overdraft charges or other costs or expenses incurred by Agent as a
result of such failure to deliver funds hereunder) of carrying such amount and
thereafter, at the rate of interest then applicable to such Revolving Credit
Advances; and
	 
	 	(ii)	 	in the case of Company, the rate of interest then applicable to
such Advance of the Revolving Credit.






The obligation of any Revolving Credit Bank to make any Advance of the Revolving
Credit hereunder shall not be affected by the failure of any other Revolving Credit
Bank to make any Advance hereunder, and no Revolving Credit Bank shall have any
liability to the Company or any of its Subsidiaries, the Agent, any other Revolving
Credit Bank, or any other party for another Revolving Credit Bank’s failure to make
any loan or Advance hereunder. In the event any Bank shall fail to advance any
amounts required to be advanced in accordance with the terms of this Article 2 (a
“Defaulting Bank”), the Agent shall promptly provide written notice thereof to the
Company and to each other Bank (each such other Bank being referred to in this
Section as a “Non-Defaulting Bank”). Each Non-Defaulting Bank shall have ten (10)
Business Days from receipt of said notice to exercise its option to agree to enter
into an agreement pursuant to which the Non-Defaulting Bank shall assume the
Defaulting Bank’s rights and obligations under



30









 







this Agreement, its Notes and the other Loan Documents. The Non-Defaulting Bank
shall exercise such option by providing written notice of same to the Defaulting
Bank (and if there is more than one Non-Defaulting Bank, the assignment agreement
shall be entered into with the Non-Defaulting Bank who first notifies the Defaulting
Bank of its decision to exercise said option) and to the Company. If no
Non-Defaulting Bank shall exercise the above-described option within the said ten
(10) Business Day period and if the Company shall, subject to Section 13.8(c)
hereof, within sixty (60) days of delivering the notice described above, advise such
Defaulting Bank of another bank or financial institution to which assignments are
permitted pursuant to Section 13.8(c) hereof and which is willing to assume such
Defaulting Bank’s rights and obligations under this Agreement, its Notes and the
other Loan Documents (each such bank or financial institution being hereinafter
referred to as a “Potential Financial Institution”), such Defaulting Bank shall,
subject to Section 13.8(c), assign its said rights and obligations to the Potential
Financial Institution; provided however that any such assignment shall not alter the
Company’s remedies vis a vis the Defaulting Bank.



     2.5
Swing Line Advances. The Swing Line Bank shall, on the terms and subject to the
conditions hereinafter set forth (including without limitation Section 2.5(c) hereof), make one or
more advances (each such advance being a “Swing Line Advance”) to the Company, from time to time on
any Business Day during the period from the Amendment Restatement Date to (but excluding) the
Revolving Credit Maturity Date in an amount not to exceed in the aggregate at any time outstanding
the Swing Line Maximum Amount.



     Swing Line Bank shall maintain in accordance with its usual practice an account or accounts
evidencing indebtedness of the Company to Swing Line Bank resulting from each Swing Line Advance of
such Bank from time to time, including the amounts of principal and interest payable thereon and
paid to such Bank from time to time. The entries made in such account or accounts of Swing Line
Bank shall, to the extent permitted by applicable law, be rebuttably presumptive evidence, absent
manifest error, of the existence and amounts of the obligations of the Company therein recorded;
provided, however, that the failure of Swing Line Bank to maintain such account, as applicable, or
any error therein, shall not in any manner affect the obligation of the Company to repay the Swing
Line Advances (and all other amounts owing with respect thereto) made to Company by Swing Line Bank
in accordance with the terms of this Agreement. Advances, repayments and readvances under the Swing
Line may be made, subject to the terms and conditions of this Agreement. Each Swing Line Advance
shall mature and the principal amount thereof shall be due and payable by the Company fourteen (14)
days after the date such Swing Line Advance is made and, in any event, no later than the Revolving
Credit Maturity Date.



     The Company agrees that, upon the written request of Swing Line Bank, the Company will execute
and deliver to Swing Line Bank a Swing Line Note; provided, that the delivery of such Swing Line
Note shall not be a condition precedent to the Restatement Effective Date.



     (a) Accrual of Interest. Each Swing Line Advance shall, from time to time after the
date of such Advance, bear interest at its Applicable Interest Rate. The amount and date of each
Swing Line Advance, its Applicable Interest Rate, its Interest Period, if any, and the amount and



31









 




date of any repayment shall be noted on Swing Line Bank’s account maintained pursuant to this
Section 2.5, which records will be rebuttably presumptive evidence thereof, absent manifest error;
provided, however, that any failure by the Swing Line Bank to record any such information shall not
relieve the Company of its obligation to repay the outstanding principal amount of such Advance,
all interest accrued thereon and any amount payable with respect thereto in accordance with the
terms of this Agreement and the other Loan Documents.




     (b) Requests for Swing Line Advances. The Company may request a Swing Line Advance
only after the delivery to Swing Line Bank of a Request for Swing Line Advance executed by a person
authorized (in a writing a copy of which has been previously delivered to the Agent) by the Company
to make such requests, subject to the following:




	 	(i)	 	each such Request for Swing Line Advance shall set forth the
information required on the Request for Advance form annexed hereto as
Exhibit D, including without limitation the proposed date of such Swing
Line Advance, which must be a Business Day;
	 
	 	(ii)	 	on the proposed date of such Swing Line Advance, after giving
effect to all Swing Line Advances requested by the Company on such date of
determination, the aggregate principal amount of all Swing Line Advances
outstanding on such date shall not exceed the Swing Line Maximum Amount.
	 
	 	(iii)	 	on the proposed date of such Swing Line Advance, after giving
effect to all Advances and Letters of Credit requested by the Company on such
date of determination (including, without duplication, deemed Advances made
under Section 3.6(a) hereof in respect of the Company’s or an applicable
Account Party’s reimbursement obligations hereunder), the sum of the aggregate
principal amount of all Advances of the Revolving Credit and of the Swing Line
requested or outstanding on such date plus the Letter of Credit Obligations on
such date shall not exceed the lesser of the then applicable (i) Revolving
Credit Aggregate Commitment and (ii) Borrowing Base;
	 
	 	(iv)	 	the principal amount of the initial funding of such Advance, as
opposed to any refunding or conversion thereof, shall be at least the
applicable amount set forth on Schedule 1.6 annexed hereto or such
lesser amount as agreed to by Agent from time to time;
	 
	 	(v)	 	each such Request for Swing Line Advance shall be delivered to
the Swing Line Bank by 3:00 p.m. (Detroit time) on the proposed date of the
Advance; and
	 
	 	(vi)	 	each Request for Swing Line Advance, once delivered to Swing
Line Bank, shall be irrevocable by the Company, and shall constitute and
include a certification by the Company as of the date thereof that:




32









 












	 	(A)	 	both before and after making such Swing Line
Advance, the obligations of the Loan Parties set forth in this
Agreement and the other Loan Documents, are valid, binding and
enforceable obligations of such Loan Parties (subject to the
limitations set forth in Section 6.7 of this Agreement);
	 
	 	(B)	 	all conditions to the making of Swing Line
Advances have been satisfied (both before and after giving effect to
such Advance);
	 
	 	(C)	 	both before and after giving effect to such
Swing Line Advance, there is no Default or Event of Default in
existence; and
	 
	 	(D)	 	both before and after giving effect to such
Swing Line Advance, the representations and warranties contained in
this Agreement and the other Loan Documents are true and correct in all
material respects, other than any representation or warranty that
expressly speaks only as of a different date.





     Swing Line Bank, may, at its option, lend under this Section 2.5(c) upon the telephone request
of an authorized officer of Company and, in the event Swing Line Bank makes any such Advance upon a
telephone request or email request, the requesting officer shall, if so requested by Swing Line
Bank, fax or send by electronic transmission to Swing Line Bank, on the same day as such telephone
request, a Request for Swing Line Advance. Company hereby authorizes Swing Line Bank to disburse
Advances under this Section 2.5(c) pursuant to the telephone instructions of any person purporting
to be a person identified by name on a written list of persons authorized by the Company to make
Requests for Advance on behalf of the Company. Notwithstanding the foregoing, the Company
acknowledges that Company shall bear all risk of loss resulting from disbursements made upon any
telephone or email request. Each telephone or email request for an Advance shall constitute a
certification of the matters set forth in the Request for Swing Line Advance form as of the date of
such requested Advance. Swing Line Bank shall promptly deliver to Agent by telecopy or electronic
transmission a copy of any Request for Advance received hereunder.



     (c) Disbursement of Swing Line Advances. Subject to submission of an executed Request
for Swing Line Advance by the Company without exceptions noted in the compliance certification
therein, Swing Line Bank shall make available to the Company the amount so requested, in like funds
and currencies, not later than 4:00 p.m. (Detroit time) on the date of such Advance by credit to an
account of the Company maintained with Agent or to such other account or third party as the Company
may reasonably direct in writing.



     Swing Line Bank shall promptly notify Agent of any Swing Line Advance by telephone, telex or
telecopier.



     (d) Refunding of or Participation Interest in Swing Line Advances.




	 	(i)	 	The Agent, at any time in its sole and absolute discretion,
may, in each case on behalf of the Company (which hereby irrevocably directs
the Agent to act on its behalf) request each of the Revolving Credit Banks




33









 






	 	 	 	(including the Swing Line Bank in its capacity as a Revolving Credit Bank) to
make an Advance of the Revolving Credit to the Company in an amount equal to
such Revolving Credit Bank’s Percentage of the principal amount of the
aggregate Swing Line Advances outstanding on the date such notice is given (the
“Refunded Swing Line Advances”). In the case of each Refunded Swing Line
Advance, the applicable Advance of the Revolving Credit used to refund such
Swing Line Advance shall be a Prime-based Advance. In connection with the
making of any such Refunded Swing Line Advances or the purchase of a
participation interest in Swing Line Advances under Section 2.5(d)(ii) hereof,
the Swing Line Bank shall retain its claim against the Company for any unpaid
interest or fees in respect thereof accrued to the date of such refunding.
Unless any of the events described in Section 9.1(j) hereof shall have
occurred (in which event the procedures of subparagraph (ii) of this Section
2.5(d) shall apply) and regardless of whether the conditions precedent set
forth in this Agreement to the making of an Advance of the Revolving Credit are
then satisfied but subject to Section 2.5(d)(iii), each Revolving Credit Bank
shall make the proceeds of its Advance of the Revolving Credit available to the
Agent for the benefit of the Swing Line Bank at the office of the Agent
specified in Section 2.4(a) hereof prior to 11:00 a.m. Detroit time (for
Domestic Advances) on the Business Day next succeeding the date such notice is
given, in immediately available funds. The proceeds of such Advances of the
Revolving Credit shall be immediately applied to repay the Refunded Swing Line
Advances in accordance with the provisions of Section 10.1 hereof.
	 
	 	(ii)	 	If, prior to the making of an Advance of the Revolving Credit
pursuant to subparagraph (i) of this Section 2.5(d), one of the events
described in Section 9.1(j) hereof shall have occurred, each Revolving Credit
Bank will, on the date such Advance of the Revolving Credit was to have been
made, purchase from the Swing Line Bank an undivided participating interest in
each Swing Line Advance that was to have been refunded in an amount equal to
its Percentage of such Swing Line Advance. Each Revolving Credit Bank within
the time periods specified in Section 2.5(d)(i) hereof, as applicable, shall
immediately transfer to the Agent, in immediately available funds, the amount
of its participation and upon receipt thereof the Agent will deliver to such
Revolving Credit Bank a Swing Line Participation Certificate in the form of
Exhibit E evidencing such participation.
	 
	 	(iii)	 	Each Revolving Credit Bank’s obligation to make Advances of
the Revolving Credit and to purchase participation interests in accordance with
clauses (i) and (ii) of this Section 2.5(d) shall be absolute and unconditional
and shall not be affected by any circumstance, including,
without limitation, (i) any set-off, counterclaim, recoupment, defense or
other right which such Revolving Credit Bank may have against Swing Line
Bank, the Company or any other Person for any reason whatsoever;




34









 












(ii) the
occurrence or continuance of any Default or Event of Default; (iii) any
adverse change in the condition (financial or otherwise) of the Company or
any other Person; (iv) any breach of this Agreement by the Company or any
other Person; (v) any inability of the Company to satisfy the conditions
precedent to borrowing set forth in this Agreement on the date upon which
such Advance is to be made or such participating interest is to be
purchased; (vi) the termination of the Revolving Credit Aggregate Commitment
hereunder; or (vii) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing. If any Revolving Credit Bank
does not make available to the Agent the amount required pursuant to clause
(i) or (ii) above, as the case may be, the Agent shall be entitled to
recover such amount on demand from such Revolving Credit Bank, together with
interest thereon for each day from the date of non-payment until such amount
is paid in full (x) for the first two (2) Business Days such amount remains
unpaid, at the Federal Funds Effective Rate and (y) thereafter, at the rate
of interest then applicable to such Swing Line Advances. The obligation of
any Revolving Credit Bank to make available its pro rata portion of the
amounts required pursuant to clause (i) or (ii) above shall not be affected
by the failure of any other Revolving Credit Bank to make such amounts
available, and no Revolving Credit Bank shall have any liability to the
Company and its Subsidiaries, the Agent, the Swing Line Bank, or any other
Revolving Credit Bank or any other party for another Revolving Credit Bank’s
failure to make the amounts required under clause (i) or (ii) available.



     (e) Notwithstanding the foregoing, however, no Revolving Credit Bank shall be obligated to
make an Advance of the Revolving Credit under Section 2.5(d)(i) of this Agreement or shall be
deemed to have acquired a participation in a Swing Line Advance if, prior to the funding of such
Swing Line Advance by the Swing Line Bank, the Swing Line Bank and Agent had obtained actual
knowledge (as determined in accordance with Section 12.8 hereof for the Agent and the Swing Line
Bank) that (i) an Event of Default had occurred and was continuing or (ii) after giving effect to
such Swing Line Advance an Event of Default would exist under Section 7.19 hereof based on the most
recent Borrowing Base Certificate furnished by Company to Agent under Section 7.2(d) hereof;
provided, however, that the Revolving Credit Banks shall be obligated to make an Advance of
the Revolving Credit under Section 2.5(d)(i) of this Agreement to refund or convert a Swing Line
Advance or shall be deemed to have acquired such a participation upon the date on which such
Event(s) of Default has (have) been waived by the requisite Revolving Credit Banks, as applicable.



     2.6
Prime-based Interest Payments. Interest on the unpaid balance of all Prime-based
Advances of the Revolving Credit and all Swing Line Advances from time to time outstanding shall
accrue from the date of such Advance to the date repaid, at a per annum interest rate equal to the
Prime-based Rate, and shall
be payable quarterly in immediately available funds on the first day of each February, May,
August and November thereafter. Interest accruing at the Prime-based Rate shall be computed on the
basis of a 360 day year and assessed for the actual number of days elapsed, and in such computation
effect shall be given to any change in the interest rate



35









 




resulting from a change in the Prime-based
Rate on the date of such change in the Prime-based Rate.




     2.7
Eurocurrency-based Interest Payments. Interest on each Eurocurrency-based Advance of
the Revolving Credit shall accrue at its Eurocurrency-based Rate and shall be payable on the last
day of the Interest Period applicable thereto (unless accelerated in accordance with the terms of
this Agreement); provided, however, if such Interest Period in respect of any such
Eurocurrency-based Advance is more than three (3) months, interest thereon shall also be payable at
intervals of three (3) months from the date of such Advance. Interest accruing at the
Eurocurrency-based Rate shall be computed on the basis of a 360 day year and assessed for the
actual number of days elapsed from the first day of the Interest Period applicable thereto to, but
not including, the last day thereof.



     2.8
Interest Payments on Conversions. Notwithstanding anything to the contrary in the
preceding sections, all accrued and unpaid interest on any Advance refunded or converted pursuant
to Section 2.3 or 2.5(d) hereof (except for refundings or conversions of Prime-based Advances)
shall be due and payable in full on the date such Advance is refunded or converted.



     2.9
Interest on Default. In the event and so long as any Event of Default shall exist, in
the case of any Event of Default under Sections 9.1(a) or 9.1(j), immediately upon the occurrence
thereof, and in the case of all other Events of Default, upon notice from the Majority Banks,
interest shall be payable on demand on all Advances from time to time outstanding (and, to the
extent delinquent, on all other monetary obligations of Company hereunder and under the other Loan
Documents) at a per annum rate equal to the Applicable Interest Rate in respect of each such
Advance plus, in the case of Eurocurrency-based Advances, two percent (2%) for the remainder of the
then existing Interest Period, if any, and at all other such times and for all Prime-based Advances
from time to time outstanding, at a per annum rate equal to the Prime-based Rate plus two percent
(2%).



     2.10
Optional Prepayments. (a) The Company may prepay all or part of the outstanding
principal of any Prime-based Advance(s) of the Revolving Credit at any time, provided that the
amount of any partial prepayment shall be at least the applicable amount set forth on
Schedule 1.6 annexed hereto and, after giving effect to any such partial prepayment, the
aggregate balance of Prime-based Advance(s) of the Revolving Credit remaining outstanding, if any,
shall be at least the applicable amount set forth on Schedule 1.6 annexed hereto. Subject
to Section 11.1 hereof and to the other terms and conditions of this Agreement, the Company may
prepay all or part of any Eurocurrency-based Advance of the Revolving Credit (subject to not less
than one (1) Business Day’s notice to Agent) provided that the amount of any such partial
prepayment shall be at least the applicable amount set forth on Schedule 1.6 annexed
hereto, and after giving effect to any
such partial prepayment, the unpaid portion of such Advance which is refunded or converted
under Section 2.3 hereof shall be at least the applicable amount set forth on Schedule 1.6
annexed hereto.



     (b) The Company may prepay all or part of the outstanding principal of any Swing Line Advance
at any time.



36









 





     (c) Any prepayment of a Prime-based Advance made in accordance with this Section shall be
without premium or penalty and any prepayment of any other type of Advance shall be subject to the
provisions of Section 11.1, but otherwise without premium or penalty.



     2.11
Prime-based Advance in Absence of Election or Upon Default. If, (a) as to any
outstanding Eurocurrency-based Advance of the Revolving Credit, Agent has not received payment of
all outstanding principal and accrued interest on the last day of the Interest Period applicable
thereto, or does not receive a timely Request for Advance meeting the requirements of Section 2.3
or 2.5(c) hereof with respect to the refunding or conversion of such Advance, or (b) subject to
Section 2.9 hereof, if on the last day of the applicable Interest Period a Default or an Event of
Default shall have occurred and be continuing, then, on the last day of the applicable Interest
Period the principal amount of any Eurocurrency-based Advance which has not been prepaid shall,
absent a contrary election of the Majority Banks, be converted automatically to a Prime-based
Advance and the Agent shall thereafter promptly notify the Company of said action.



     2.12
Revolving Credit Commitment Fee. From the Effective Date to the Revolving Credit
Maturity Date, the Company shall pay to the Agent for distribution to the Revolving Credit Banks
pro-rata in accordance with their respective Revolving Credit Percentages, a Revolving Credit
Commitment Fee quarterly in arrears on the first day of each August, November, February and May,
commencing August 1, 2008 (in respect of the prior three-month period or portion thereof). The
Revolving Credit Commitment Fee payable to each Revolving Credit Bank shall be determined by
multiplying the Applicable Fee Percentage times the average daily amount by which such Bank’s
Percentage of the Revolving Credit Aggregate Commitment then in effect exceeds such Bank’s
Percentage of the aggregate amount of the Advances outstanding under the Revolving Credit
(including Swing Line Advances) plus the aggregate outstanding amount of the Letter of Credit
Obligations. The Revolving Credit Commitment Fee shall be computed on the basis of a year of three
hundred sixty (360) days and assessed for the actual number of days elapsed. Whenever any payment
of the Revolving Credit Commitment Fee shall be due on a day which is not a Business Day, the date
for payment thereof shall be extended to the next Business Day. Upon receipt of such payment, Agent
shall make prompt payment to each Revolving Credit Bank of its share of the Revolving Credit
Commitment Fee based upon its respective Revolving Credit Percentage. It is expressly understood
that the Revolving Credit Commitment Fees described in this Section are not refundable under any
circumstances.




	2.13	 	Mandatory Repayment of Revolving Credit Advances and Reductions of the
Revolving Credit Aggregate Commitment.





     (a) If at any time and for any reason the aggregate outstanding principal amount of Revolving
Credit Advances plus Swing Line Advances hereunder to the Company, plus the outstanding Letter of
Credit Obligations, shall exceed the lesser of the then applicable (i) Revolving Credit Aggregate
Commitment and (ii) Borrowing Base, the Company shall immediately reduce any pending request for a
Revolving Credit Advance on such day by the amount of such excess and, to the extent any excess
remains thereafter, immediately repay an amount of the Obligations equal to such excess and, to the
extent such Obligations consist of Letter of Credit Obligations, provide cash collateral on the
basis set forth in Section 9.2 hereof. The Company acknowledges that, in connection with any
repayment required hereunder, it shall



37









 




also be responsible for the reimbursement of any prepayment
or other costs required under Section 11.1 hereof; provided, however, that the Company
shall, in order to reduce any such prepayment costs and expenses, first prepay such portion of the
Obligations then carried as a Prime-based Advance, if any;




     (b) Immediately upon receipt by the Company or any Subsidiary of the cash proceeds of the
issuance of any Equity Interests of such Person or of any Subordinated Debt issued after the
Restatement Effective Date by such Person, the Company shall be obligated to repay the amount of
the Revolving Credit Aggregate Commitment (and make any required payment under Section 2.13(e)
below) by an amount equal to (y) one hundred percent (100%) of such cash proceeds in the case of
any other issuance of Equity Interests or (z) one hundred percent (100%) of any such issuance of
Subordinated Debt (net, in any case, of reasonable and customary costs and expenses of issuance);
provided, the Company shall not be required to make prepayments under this Section for the
first $100,000 of such proceeds received each fiscal year from the exercise of employee stock
options or purchases made under employee stock option or stock purchase plans;



     (c) Subject to the provisions of Section 8.9 below, immediately upon receipt by the Company or
any Subsidiary of any Net Cash Proceeds in excess of One Hundred Thousand Dollars ($100,000) of all
Asset Sales completed in any fiscal year, Company shall be obligated to permanently reduce (and
make any required repayment under Section 2.13(e) below) the amount of the Revolving Credit
Aggregate Commitment by an amount equal to one hundred percent (100%) of such Net Cash Proceeds;



     (d) The reductions of the Revolving Credit Aggregate Commitment pursuant to subparagraphs (b)
and (c) above shall be accompanied in each case by prepayments of principal sufficient to reduce
the outstanding principal balance under the Revolving Credit (taking into account outstanding
Letters of Credit and Swing Line Advances) to an amount not greater than the Revolving Credit
Aggregate Commitment, as so reduced. Unless directed otherwise in writing by Company to Bank,
prepayments under this Section 2.13(d) shall be applied first to Swing Line Advances, then to
Revolving Credit Advances bearing interest at the Prime-based Rate, then to Eurocurrency-based
Advances, subject to the provisions of Section 2.3(e) below. Company acknowledges that in
connection with any prepayment required hereunder, it shall also be responsible for the
reimbursement of any prepayment or other costs required under Section 11.1 hereof; and



     (e) To the extent that, on the date any mandatory repayment or prepayment of the Revolving
Credit Advances under this Section 2.13 or payment pursuant to the terms of any of the Collateral
Documents is due (whether by reduction of the Revolving Credit Aggregate
Commitment or otherwise), and the repayment or prepayment is being applied to the Obligations
under the Revolving Credit or any other Obligations being carried, at the Eurocurrency-based Rate
and no Default or Event of Default has occurred and is continuing, the Company may deposit the
amount of such mandatory prepayment in a cash collateral account to be held by the Agent, for and
on behalf of the Revolving Credit Banks (which shall be an interest-bearing account), on such terms
and conditions as are reasonably acceptable to Agent and upon such deposit the obligation of the
Company to make such mandatory prepayment shall be deemed satisfied. Subject to the terms and
conditions of said cash collateral account, sums on deposit in said cash collateral account shall
be applied (until exhausted) to reduce the principal balance of



38









 




the Revolving Credit on the last
day of each Interest Period attributable to the Eurocurrency-based Advances of such Revolving
Advance, thereby avoiding breakage costs under Section 11.1 hereof; provided, however, that if a
Default or Event of Default shall have occurred at any time while sums are on deposit in the cash
collateral account, Agent may, in its sole discretion, elect to apply such sums to reduce the
principal balance of such Advances prior to the last day of the applicable Interest Period, and the
Company will be obligated to pay any resulting breakage costs under Section 11.1.




     2.14
Optional Reduction or Termination of Revolving Credit Aggregate Commitment. The
Company may upon at least five Business Days’ prior written notice to the Agent, permanently reduce
the Revolving Credit Aggregate Commitment in whole at any time, or in part from time to time,
without premium or penalty, provided that: (i) each partial reduction of the Revolving Credit
Aggregate Commitment shall be in an aggregate amount equal to Five Million Dollars ($5,000,000) or
a larger integral multiple of Five Hundred Thousand Dollars ($500,000); (ii) each reduction shall
be accompanied by the payment of the Revolving Credit Commitment Fee accrued through the date of
such reduction; (iii) the Company shall prepay in accordance with the terms hereof the amount, if
any, by which the aggregate unpaid principal amount of Advances (including, without duplication,
any deemed Advances made under Section 3.6 hereof) outstanding hereunder, plus the aggregate Letter
of Credit Obligations, exceeds the amount of the then applicable Revolving Credit Aggregate
Commitment as so reduced, together with interest thereon to the date of prepayment; (iv) no
reduction shall reduce the Revolving Credit Aggregate Commitment to an amount which is less than
the aggregate undrawn amount of any Letters of Credit outstanding at such time; and (v) no such
reduction shall reduce the Swing Line Maximum Amount unless the Company so elects, provided,
however, in no case shall the Swing Line Maximum Amount be in excess of the Revolving Credit
Aggregate Commitment; provided, however that if the termination or reduction of the Revolving
Credit Aggregate Commitment requires the prepayment of a Eurocurrency-based Advance and such
termination or reduction is made on a day other than the last Business Day of the then current
Interest Period applicable to such Eurocurrency-based Advance, then, pursuant to Section 11.1, the
Company shall choose to (i) compensate the Revolving Credit Banks for any losses or (ii) provided
no Default or Event of Default has occurred and is continuing, deposit the amount of such
prepayment in a collateral account as provided in Section 2.13(b). Reductions of the Revolving
Credit Aggregate Commitment and any accompanying prepayments of Advances of the Revolving Credit
shall be distributed by Agent to each Revolving Credit Bank in accordance with such Revolving
Credit Bank’s Percentage thereof, and will not be available for reinstatement by or readvance to
the Company, and any accompanying prepayments of Advances of the Swing Line shall be distributed by
Agent to the Swing Line Bank and will not
be available for reinstatement by or readvance to the Company. Any reductions of the Revolving
Credit Aggregate Commitment hereunder shall reduce each Revolving Credit Bank’s portion thereof
proportionately (based on the applicable Percentages), and shall be permanent and irrevocable. Any
payments made pursuant to this Section shall be applied first to outstanding Prime-based Advances
under the Revolving Credit, next to Swing Line Advances, and then to Eurocurrency-based Advances of
the Revolving Credit.



     2.15
Use of Proceeds of Advances. Advances of the Revolving Credit (including Swing Line
Advances) shall be available for general corporate purposes of Company and its



39









 




Subsidiaries which
are Guarantors, including the financing of capital expenditures and of working capital needs.




     2.16
Extensions of Revolving Credit Maturity Date. (a) Provided that no Default or Event
of Default has occurred and is continuing, Company may, by written notice to Agent and each Bank
(which notice shall be irrevocable and which shall not be deemed effective unless actually received
by Agent and each Bank) prior to June 30, but not before March 31, of each year beginning in 2008,
request that the Banks extend the then applicable Revolving Credit Maturity Date to a date that is
one year later than the Revolving Credit Maturity Date then in effect (referred to in this Section
2.16 as a “Request”).



     (b) Each Bank shall, within 30 days of receipt of any such Request, notify the Agent in
writing whether such Bank consents to the extension of the Revolving Credit Maturity Date, such
consent to be in the sole discretion of such Bank. If any Bank does not so notify the Agent of its
decision within such 30 day period, such Bank shall be deemed to have not consented to such Request
of the Company.



     (c) The Agent shall promptly notify the Company whether (and which of) the Banks have
consented to such Request. If the Agent does not so notify the Company within 30 days of the
Agent’s receipt of such Request, the Agent shall be deemed to have notified the Company that the
Banks have not consented to the Request.



     (d) Notwithstanding anything herein to the contrary, the Revolving Credit Maturity Date will
not be extended unless all Banks have consented to the extension.



     2.17
Optional Increase in Revolving Credit Aggregate Commitment. Provided that no Default
or Event of Default has occurred and is continuing, and provided that the Company has not
previously elected to terminate the Revolving Credit Aggregate Commitment under Section 2.14
hereof, the Company may request that the Revolving Credit Aggregate Commitment be increased in an
aggregate amount (for all such Requests under this Section 2.17) not to exceed the Revolving Credit
Optional Increase, subject, in each case, to Section 11.1 hereof and to the satisfaction
concurrently with or prior to the date of each such request of the following conditions:



     (a) the Company shall have delivered to the Agent not less than seventy five (75) days prior
to the Revolving Credit Maturity Date then in effect a written request for such increase,
specifying the amount of Revolving Credit Optional Increase thereby requested (each such request, a
“Request for Increase”); provided, however that in the event the Company has previously delivered a
Request for Increase pursuant to this Section 2.17, the Company may not deliver a subsequent
Request for Increase until all the conditions to effectiveness of such first Request for Increase
have been fully satisfied hereunder (or such Request for Increase has been withdrawn); and provided
further that the Company may make no more than two Requests for Increase in any calendar year;



     (b) Agent shall promptly deliver to each of the existing Banks a copy of the Request for
Increase and before any new lender may become a New Bank under this Agreement, each



40









 




existing Bank
thereafter shall have a period of thirty (30) days to notify Company and Agent in writing whether
it elects to increase its Revolving Credit Commitment and the amount of any such increase proposed
by such existing Bank (“Increasing Bank”) and in the event the aggregate increases proposed by the
Increasing Banks with respect to any Request for Increase exceeds the amount of the increase
requested by Company, then Company and Agent shall jointly determine the amount of the increases
for each Increasing Bank;




     (c) each Increasing Bank and any other lender or lenders meeting the requirements of Section
13.8(c) hereof and acceptable to the Company and the Agent (such lender, including, for the
purposes of this Section 2.17, any Increasing Bank, the “New Bank(s)”; provided, however,
in no event shall more than two lenders which are not Banks on the date this Section 2.17 is added
to the Credit Agreement become a New Bank under this Section 2.17 without the prior written consent
of the Agent and Company) shall have become a party to this Agreement by executing and delivering a
New Bank Addendum for a minimum amount (including for the purposes of this Section 2.17, the
existing commitment of any existing Bank) for each such New Bank of Fifteen Million Dollars
($15,000,000) and an aggregate amount for all such New Banks of that portion of the Revolving
Credit Optional Increase, taking into account the amount of any prior increase in the Revolving
Credit Aggregate Commitment (pursuant to this Section 2.17), covered by the applicable Request,
provided, however that each New Bank shall remit to the Agent funds in an amount equal to its
Percentage (after giving effect to this Section 2.17) of all Advances of the Revolving Credit then
outstanding, such sums to be reallocated among and paid to the existing Banks based upon the new
Percentages as determined below;



     (d) the Company (i) shall have paid to the Agent for distribution to the existing Banks, as
applicable, all interest, fees (including the Revolving Credit Commitment Fee and the Letter of
Credit Fees) and other amounts, if any, accrued to the effective date of such increase and any
breakage fees attributable to the reduction (prior to the last day of the applicable Interest
Period) of any outstanding Eurocurrency-based Advances, calculated on the basis set forth in
Section 11.1 hereof as though Company has prepaid such Advances and (ii) shall have paid to each
New Bank a special letter of credit fee on the Letters of Credit outstanding on the effective date
of such increase, calculated on the basis of the Letter of Credit Fees which would be applicable to
such Letters of Credit if issued on the date of such increase, for the period from the effective
date of such increase to the next date on which a payment of the per annum letter of
credit fees under Section 3.4(a) of this Agreement become due and payable under Section 3.4(c)
of this Agreement;



     (e) the Company shall have executed and delivered to the Agent new Revolving Credit Notes
payable to each of the New Banks in the face amount of each such New Bank’s Percentage of the
Revolving Credit Aggregate Commitment (after giving effect to this Section 2.17) and, if
applicable, renewal and replacement Revolving Credit Notes payable to each of the existing Banks in
the face amount of each such Bank’s Percentage of the Revolving Credit Aggregate Commitment (after
giving effect to this Section 2.17), each of such Revolving Credit Notes to be substantially in the
form of Exhibit B to this Agreement, as applicable, and dated as of the effective date of such
increase (with appropriate insertions relevant to such Notes and acceptable to the applicable Bank,
including the New Banks);



41









 





     (f) except to the extent such representations and warranties are not, by their terms,
continuing representations and warranties, but speak only as of a specific date, the
representations and warranties made by Company, each Guarantor or any other party to any of the
Loan Documents (excluding the Agent and Banks) in this Agreement or any of the other Loan
Documents, and the representations and warranties of any of the foregoing which are contained in
any certificate, document or financial or other statement furnished at any time hereunder or
thereunder or in connection herewith or therewith shall have been true and correct in all material
respects when made and shall be true and correct in all material respects on and as of the
effective date of such increase; and (ii) no Default or Event of Default shall have occurred and be
continuing as of such date; and



     (g) such other amendments, acknowledgments, consents, documents, instruments, any
registrations, if any, shall have been executed and delivered and/or obtained by Company as
required by Agent or the Majority Banks, in their reasonable discretion, including, without
limitation, amendments to the Collateral Documents and date down endorsements to the title policies
required under Section 5.3(b) of this Agreement.



     Promptly on or after the date on which all of the conditions to such Request for Increase set
forth above have been satisfied, Agent shall notify the Company and each of the Banks of the amount
of the Revolving Credit Aggregate Commitment as increased pursuant this Section 2.17 and the date
on which such increase has become effective and shall prepare and distribute to Company and each of
the Banks (including the New Banks) a revised Schedule 1.2 to this Agreement setting forth the
applicable new Percentages of the Banks (including the New Bank(s), taking into account such
increase and assignments (if any).



3. LETTERS OF CREDIT




     3.1
Letters
of Credit. Subject to the terms and conditions of this Agreement, Issuing
Bank shall through the Issuing Office, at any time and from time to time from and after the date
hereof until thirty (30) days prior to the Revolving Credit Maturity Date, upon the written request
of an Account Party(ies) accompanied by a duly executed Letter of Credit Agreement and such other
documentation related to the requested Letter of Credit as the Issuing Bank may require, issue
Letters of Credit in Dollars for the account of such Account Party(ies), in an aggregate
amount for all Letters of Credit at any one time outstanding not to exceed the Letter of Credit
Maximum Amount. Each Letter of Credit shall be in a minimum face amount of One Hundred Thousand
Dollars ($100,000) (or such lesser amount as may be agreed to by Issuing Bank) and (i) each Letter
of Credit (including any renewal thereof) shall expire not later than the first to occur of (A) one
year after the date of issuance thereof and (B) ten (10) Business Days prior to the Revolving
Credit Maturity Date in effect on the date of issuance thereof and (ii) each Commercial Letter of
Credit shall expire not later than the first to occur of (C) one hundred twenty (120) days from the
date of issuance thereof and (D) ten (10) Business Days prior to the Revolving Credit Maturity Date
in effect on the date of issuance thereof. The submission of all applications in respect of and
the issuance of each Letter of Credit hereunder shall be subject in all respects to the
International Standby Practices 98, and any successor documentation thereto adhered to by the
Issuing Bank and to the extent not inconsistent therewith, the laws of the State of Michigan. In
the event of any conflict between this Agreement and any Letter of Credit Document other than any
Letter of Credit, this Agreement shall control.



42









 





     3.2
Conditions to Issuance. No Letter of Credit shall be issued at the request and for the
account of any Account Party(ies) unless, as of the date of issuance of such Letter of Credit:




	 	(a)	 	in the case of any Account Party:






	 	(i)	 	after giving effect to the Letter of Credit requested, the
outstanding Letter of Credit Obligations does not exceed the Letter of Credit
Maximum Amount; and
	 
	 	(ii)	 	after giving effect to the Letter of Credit requested, the
outstanding Letter of Credit Obligations on such date plus the aggregate amount
of all Revolving Credit Advances and Swing Line Advances (including, without
duplication, deemed Advances funded by Agent under Section 3.6(a) hereof in
respect of the Company’s or an applicable Account Party’s reimbursement
obligations hereunder) requested or outstanding on such date does not exceed
the lesser of the then applicable (i) Revolving Credit Aggregate Commitment and
(ii) Borrowing Base;





     (b) the obligations of the Loan Parties set forth in this Agreement and the other Loan
Documents are valid, binding and enforceable obligations of such Loan Parties and the valid,
binding and enforceable nature of this Agreement and the other Loan Documents has not been disputed
by the Company;



     (c) the representations and warranties contained in this Agreement and the other Loan
Documents are true in all material respects as if made on such date (other than any representation
or warranty that expressly speaks only as of a different date), and both immediately before and
immediately after issuance of the Letter of Credit requested, no Default or Event of Default
exists;



     (d) the execution of the Letter of Credit Agreement with respect to the Letter of Credit
requested will not violate the terms and conditions of any contract, agreement or other borrowing
of the relevant Account Party;



     (e) the Account Party requesting the Letter of Credit shall have delivered to Issuing Bank at
its Issuing Office, not less than three (3) Business Days prior to the requested date for issuance
(or such shorter time as the Issuing Bank, in its sole discretion, may permit), the Letter of
Credit Agreement related thereto, together with such other documents and materials as may be
required pursuant to the terms thereof, and the terms of the proposed Letter of Credit shall be
reasonably satisfactory to Issuing Bank;



     (f) no order, judgment or decree of any court, arbitrator or governmental authority shall
purport by its terms to enjoin or restrain Issuing Bank from issuing the Letter of Credit
requested, or any Revolving Credit Bank from taking an assignment of its Percentage thereof
pursuant to Section 3.6 hereof, and no law, rule, regulation, request or directive (whether or not
having the force of law) shall prohibit or request that Issuing Bank refrain from issuing, or any
Revolving Credit Bank refrain from taking an assignment of its Percentage of, the Letter of Credit
requested or letters of credit generally;



43









 





     (g) there shall have been no introduction of or change in the interpretation of any law or
regulation that would make it unlawful or unduly burdensome for the Issuing Bank to issue or any
Revolving Credit Bank to take an assignment of its Percentage of the requested Letter of Credit, no
declaration of a general banking moratorium by banking authorities in the United States, Michigan
or the respective jurisdictions in which the Revolving Credit Banks, the applicable Account Party
and the beneficiary of the requested Letter of Credit are located, and no establishment of any new
restrictions by any central bank or other governmental agency or authority on transactions
involving letters of credit or on banks materially affecting the extension of credit by banks; and



     (h) Issuing Bank shall have received the issuance fees required in connection with the
issuance of such Letter of Credit pursuant to Section 3.4 hereof.



Each Letter of Credit Agreement submitted to Issuing Bank pursuant hereto shall constitute the
certification by the Company and the Account Party of the matters set forth in Section 3.2 (a)
through (d) hereof. The Agent shall be entitled to rely on such certification without any duty of
inquiry.



     3.3
Notice. The Issuing Bank will deliver to the Agent, concurrently with or promptly
following its delivery of any Letter of Credit, a true and complete copy of each Letter of Credit.
Promptly upon its receipt thereof, Agent shall give notice, substantially in the form attached as
Exhibit F, to each Revolving Credit Bank of the issuance of each Letter of Credit,
specifying the amount thereof and the amount of such Revolving Credit Bank’s Percentage thereof.



     3.4
Letter of Credit Fees. The Company shall pay to the Agent for distribution to the Revolving Credit Banks in
accordance with their Percentages, letter of credit fees as follows:




	 	(a)	 	Company shall pay letter of credit fees as follows:






	 	(i)	 	A per annum letter of credit fee with respect to the face amount of each Letter of
Credit issued pursuant hereto (based on the amount of each Letter of Credit) in the amount
of the Applicable Fee Percentage shall be paid to the Agent for distribution to the
Revolving Credit Banks in accordance with their Percentages, provided, however, that while
any Event of Default exists or after acceleration, the Company shall pay the sum of the
letter of credit fee otherwise required by this clause (i) plus 2.0%, provided, further,
that in the absence of acceleration, any such increase in the Letter of Credit Fee shall be
made at the election of the Agent, acting at the request or with the consent of the Majority
Banks, with notice to the Company.
	 
	 	(ii)	 	A facing fee of 0.125% of the face amount of each Letter of Credit shall be paid
to the Agent for distribution to the Issuing Bank for its own account, in accordance with
the terms of the applicable Fee Letter.





     (b) If any change in any law or regulation or in the interpretation thereof by any court or
administrative or governmental authority charged with the administration thereof, adopted after the
Restatement Effective Date, shall either (i) impose, modify or cause to be deemed applicable any
reserve, special deposit, limitation or similar requirement against letters of credit issued or



44









 




participated in by, or assets held by, or deposits in or for the account of, Issuing Bank or any
Revolving Credit Bank or (ii) impose on Issuing Bank or any Revolving Credit Bank any other
condition regarding this Agreement, the Letters of Credit or any participations in such Letters of
Credit, and the result of any event referred to in clause (i) or (ii) above shall be to increase
the cost or expense to Issuing Bank or such Revolving Credit Bank of issuing or maintaining or
participating in any of the Letters of Credit (which increase in cost or expense shall be
determined by the Issuing Bank’s or such Revolving Credit Bank’s reasonable allocation of the
aggregate of such cost increases and expenses resulting from such events), then, upon demand by the
Issuing Bank or such Revolving Credit Bank, as the case may be, the applicable Account Party shall,
within thirty (30) days following demand for payment, pay to Issuing Bank or such Revolving Credit
Bank, as the case may be, from time to time as specified by the Issuing Bank or such Revolving
Credit Bank, additional amounts which shall be sufficient to compensate the Issuing Bank or such
Revolving Credit Bank for such increased cost and expense, together with interest on each such
amount from ten days after the date such payment is due until payment in full thereof at the
Prime-based Rate. Each demand for payment under this Section 3.4(c), shall be accompanied by a
certificate of Issuing Bank or the applicable Revolving Credit Bank (as applicable) setting forth
the amount of such increased cost or expense incurred by the Issuing Bank or such Revolving Credit
Bank, as the case may be, as a result of any event mentioned in clause (i) or (ii) above, and in
reasonable detail, the reason and methodology for calculating and the calculation of such amount,
which certificate shall be prepared in good faith and shall be rebuttably presumptive evidence,
absent manifest error, as to the amount thereof.




     (c) All payments by Company to the Agent for distribution to the Issuing Bank or the Revolving
Credit Banks under this Section 3.4 shall be made in Dollars in immediately available
funds at the Issuing Office or such other office of the Agent as may be designated from time
to time by written notice to Company by the Agent. The fees described in clauses (a)(i) and (ii)
above (i) shall be nonrefundable under all circumstances, (ii) in the case of fees due under clause
(a)(i) above, shall be payable semi-annually in advance on January 1 and July 1 of each year and
(iii) in the case of fees due under clause (a)(ii) above, shall be payable upon the issuance of
such Letter of Credit and upon any amendment thereto or extension thereof. The fees due under
clause (a)(i) above shall be determined by multiplying the Applicable Fee Percentage times the
undrawn amount of the face amount of each such Letter of Credit on the date of determination, and
shall be calculated on the basis of a 360 day year and assessed for the actual number of days from
the date of the issuance thereof to the stated expiration thereof. The parties hereto acknowledge
that, unless the Issuing Bank otherwise agrees, any material amendment and any extension to a
Letter of Credit issued hereunder shall be treated as a new Letter of Credit for the purposes of
the letter of credit facing fee.



     3.5
Other
Fees. In connection with the Letters of Credit, and in addition to the Letter
of Credit Fees, the Company and the applicable Account Party(ies) shall pay, for the sole account
of the Issuing Bank, standard documentation, administration, payment and cancellation charges
assessed by Issuing Bank or the Issuing Office, at the times, in the amounts and on the terms set
forth or to be set forth from time to time in the standard fee schedule of the Issuing Office in
effect from time to time and delivered to the relevant Account Party(ies).



     3.6 Drawings and Demands for Payment Under Letters of Credit.




45












 





     (a) If the Issuing Bank shall honor a draft or other demand for payment presented or made
under any Letter of Credit, the Company and each applicable Account Party agree to pay to the
Issuing Bank an amount equal to the amount paid by the Issuing Bank in respect of such draft or
other demand under such Letter of Credit and all expenses paid or incurred by the Agent relative
thereto not later than 1:00 p.m. (Detroit time), on (i) the Business Day that the Company receives
notice of such presentment and honor, if such notice is received prior to 11:00 a.m. (Detroit time)
or (ii) the Business Day immediately following the day that Company receives such notice, if such
notice is not received prior to such time. Unless the Company or the applicable Account Party
shall have made such payment to the Agent for the account of the Issuing Bank on such day, upon
each such payment by the Issuing Bank, the Agent shall be deemed to have disbursed to the Company,
and the Company shall be deemed to have elected to substitute for the Reimbursement Obligation,
with respect to the applicable Letters of Credit denominated in Dollars, a Prime-based Advance of
the Revolving Credit for the account of the Revolving Credit Banks in an amount equal to the amount
so paid by the Issuing Bank in respect of such draft or other demand under such Letter of Credit.
Such Prime-based Advance shall be deemed disbursed notwithstanding any failure to satisfy any
conditions for disbursement of any Advance set forth in Section 2 hereof and, to the extent of the
Advances so disbursed, the reimbursement obligation of the Company or the applicable Account Party
under this Section 3.6 shall be deemed satisfied.



     (b) If the Issuing Bank shall honor a draft or other demand for payment presented or made
under any Letter of Credit, the Issuing Bank shall provide notice thereof to the Company and the
applicable Account Party on the date such draft or demand is honored, and to each Revolving Credit
Bank on such date unless the Company or applicable Account Party shall have satisfied its
reimbursement obligations under Section 3.6(a) hereof by payment to the Agent on such date. The
Issuing Bank shall further use reasonable efforts to provide notice to the Company or applicable
Account Party prior to honoring any such draft or other demand for payment, but such notice, or the
failure to provide such notice, shall not, subject to Section 3.6(a), affect the rights or
obligations of the Issuing Bank with respect to any Letter of Credit or the rights and obligations
of the parties hereto, including without limitation the obligations of the Company or applicable
Account Party under Section 3.6(a) hereof.



     (c) Upon issuance by the Issuing Bank of each Letter of Credit hereunder, each Revolving
Credit Bank shall automatically acquire a pro rata participation interest in such Letter of Credit
and each related Letter of Credit Payment based on its respective Revolving Credit Percentage. Each
Revolving Credit Bank, on the date a draft or demand under any Letter of Credit is honored (or the
next succeeding Business Day if the notice required to be given by Agent to the Revolving Credit
Banks under Section 3.6(b) hereof is not given to the Revolving Credit Banks prior to 2:00 p.m.
(Detroit time) on such date of draft or demand), shall make its Percentage of the amount paid by
the Issuing Bank, and not reimbursed by the Company or applicable Account Party on such day, in
immediately available funds at the principal office of the Agent for the account of Issuing Bank.
If and to the extent such Revolving Credit Bank shall not have made such pro rata portion available
to the Agent, such Revolving Credit Bank, the Company and the applicable Account Party severally
agree to pay to the Issuing Bank forthwith on demand such amount together with interest thereon,
for each day from the date such amount was paid by the Issuing Bank until such amount is so made
available to the Agent at a per annum rate equal to the interest rate applicable during such period
to the related Advance deemed to



46









 







have been disbursed under Section 3.6(a) in respect of the Reimbursement Obligations of the
Company and the applicable Account Party, as set forth in Section 2.4(c)(i) or 2.4(c)(ii) hereof,
as the case may be. If such Revolving Credit Bank shall pay such amount to the Agent for the
account of Issuing Bank together with such interest, if any, such amount so paid shall be deemed to
constitute an Advance by such Revolving Credit Bank disbursed in respect of the Reimbursement
Obligations of the Company or applicable Account Party under Section 3.6(a) hereof for purposes of
this Agreement, effective as of the dates applicable under said Section 3.6(a). The failure of any
Revolving Credit Bank to make its pro rata portion of any such amount paid by the Issuing Bank
available to the Agent for the account of Issuing Bank shall not relieve any other Revolving Credit
Bank of its obligation to make available its pro rata portion of such amount, but no Revolving
Credit Bank shall be responsible for failure of any other Revolving Credit Bank to make such pro
rata portion available to the Agent for the account of Issuing Bank.



     (d) Notwithstanding the foregoing however no Revolving Credit Bank shall be deemed to have
acquired a participation in a Letter of Credit if, prior to the issuing of the Letter of Credit by
the Issuing Bank, the Agent and the Issuing Bank had obtained actual knowledge (as determined in
accordance with Section 12.8 hereof for the Agent and the Issuing Bank) that (i) an Event of
Default had occurred and was continuing or (ii) after giving effect to the issuance of such Letter
of Credit an Event of Default would arise under Section 7.19 hereof based on the most recent
Borrowing Base Certificate furnished by Company to Agent under Section 7.2(d) hereof; provided,
however that the Revolving Credit Banks shall be deemed to have acquired such a participation upon
the date of which such Event of Default(s) has (have) been waived by the requisite Revolving Credit
Banks, as applicable. In the event that the Issuing Bank receives actual knowledge (as determined
in accordance with Section 12.8 hereof) that an Event of Default has occurred and is continuing or
would result from the issuance of such Letter of Credit, the Issuing Bank shall have no obligation
to issue any Letter of Credit until such notice is withdrawn by Agent or such Bank or until the
requisite Banks have waived such Event of Default in accordance with the terms of this Agreement.



     (e) Nothing in this Agreement shall be construed to require or authorize any Revolving Credit
Bank to issue any Letter of Credit, it being recognized that the Issuing Bank shall be the sole
issuer of Letters of Credit under this Agreement.



     3.7
Obligations Irrevocable. The obligations of the Company and any Account Party to make
payments to Agent for the account of Issuing Bank or the Revolving Credit Banks with respect to
Letter of Credit Obligations under Section 3.6 hereof, shall be unconditional and irrevocable,
shall be paid strictly in accordance with the terms of this Agreement, under all circumstances
whatsoever, and not subject to any qualification or exception whatsoever, including, without
limitation, the following circumstances, either alleged or established:



     (a) Any lack of validity or enforceability of any Letter of Credit or any documentation
relating to any Letter of Credit or to any transaction related in any way to any Letter of Credit
(the “Letter of Credit Documents”);



     (b) Any amendment, modification, waiver, consent, or any substitution, exchange or release of
or failure to perfect any interest in collateral or security;



47









 





     (c) The existence of any claim, setoff, defense or other right which the Company or any
Account Party may have at any time against any beneficiary or any transferee of any Letter of
Credit (or any persons or entities for whom any such beneficiary or any such transferee may be
acting), the Agent, the Issuing Bank or any Revolving Credit Bank or any other person or entity,
whether in connection with this Agreement, any of the Letter of Credit Documents, the transactions
contemplated herein or therein or any unrelated transactions;



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



     (e) Payment by the Issuing Bank to the beneficiary in good faith under any Letter of Credit
against presentation of a draft, certificate or other documents which do not comply with the terms
of such Letter of Credit, including failure of any documents to bear any reference or adequate
reference to such Letter of Credit;



     (f) Any failure, omission, delay or lack on the part of the Agent, Issuing Bank or any
Revolving Credit Bank or any party to any of the Letter of Credit Documents to enforce, assert or
exercise any right, power or remedy conferred upon the Agent, Issuing Bank, any Revolving Credit
Bank or any such party under this Agreement, any of the other Loan Documents or any of the Letter
of Credit Documents, or any other acts or omissions on the part of the Agent, Issuing Bank, any
Revolving Credit Bank or any such party; or



     (g) Any other event or circumstance that would, in the absence of this Section 3.7, result in
the release or discharge by operation of law or otherwise of the Company or any Account Party from
the performance or observance of any obligation, covenant or agreement contained in Section 3.6
hereof.


No setoff, counterclaim, reduction or diminution of any obligation or any defense of any kind or
nature which the Company or any Account Party has or may have against the beneficiary of any Letter
of Credit shall be available hereunder to the Company or any Account Party against the Agent,
Issuing Bank or any Revolving Credit Bank. Nothing contained in this Section 3.7 shall be deemed to
prevent the Company or the Account Parties, after satisfaction in full of the absolute and
unconditional obligations of the Company and the Account Parties hereunder, from asserting in a
separate action any claim, defense, set off or other right which they (or any of them) may have
against Agent, Issuing Bank or any Revolving Credit Bank.




     3.8
Risk Under Letters of Credit. (a) In the administration and handling of Letters of
Credit and any security therefore, or any documents or instruments given in connection therewith,
Issuing Bank shall have the sole right to take or refrain from taking any and all actions under or
upon the Letters of Credit.



     (b) Subject to other terms and conditions of this Agreement, Issuing Bank shall issue the
Letters of Credit and shall hold the documents related thereto in its own name and shall make all
collections thereunder and otherwise administer the Letters of Credit in accordance with
Issuing Bank’s regularly established practices and procedures and will have no further obligation
with respect thereto. In the administration of Letters of Credit, Issuing Bank shall not be liable
for any



48









 







action taken or omitted on the advice of counsel, accountants, appraisers or other experts
selected by Issuing Bank with due care and Issuing Bank may rely upon any notice, communication,
certificate or other statement from the Company, any Account Party, beneficiaries of Letters of
Credit, or any other Person which Issuing Bank believes to be authentic. Issuing Bank will, upon
request, furnish the Revolving Credit Banks with copies of Letter of Credit Documents related
thereto.



     (c) In connection with the issuance and administration of Letters of Credit and the
assignments hereunder, Issuing Bank makes no representation and shall have no responsibility with
respect to (i) the obligations of the Company or any Account Party or the validity, sufficiency or
enforceability of any document or instrument given in connection therewith, or the taking of any
action with respect to same, (ii) the financial condition of, any representations made by, or any
act or omission of, the Company, the applicable Account Party or any other Person, or (iii) any
failure or delay in exercising any rights or powers possessed by Issuing Bank in its capacity as
issuer of Letters of Credit in the absence of its gross negligence or willful misconduct. Each of
the Revolving Credit Banks expressly acknowledges that it has made and will continue to make its
own evaluations of the Company’s and the Account Parties’ creditworthiness without reliance on any
representation of Issuing Bank or Issuing Bank’s officers, agents and employees.



     (d) If at any time Issuing Bank shall recover any part of any unreimbursed amount for any draw
or other demand for payment under a Letter of Credit, or any interest thereon, Agent or Issuing
Bank, as the case may be, shall receive same for the pro rata benefit of the Revolving Credit Banks
in accordance with their respective Percentages and shall promptly deliver to each Revolving Credit
Bank its share thereof, less such Revolving Credit Bank’s pro rata share of the costs of such
recovery, including court costs and attorney’s fees. If at any time any Revolving Credit Bank shall
receive from any source whatsoever any payment on any such unreimbursed amount or interest thereon
in excess of such Revolving Credit Bank’s Percentage of such payment, such Revolving Credit Bank
will promptly pay over such excess to Agent, for redistribution in accordance with this Agreement.



     3.9
Indemnification. The Company and each Account Party hereby indemnifies and agrees to
hold harmless the Revolving Credit Banks, the Issuing Bank and the Agent, and their respective
officers, directors, employees and agents (each an “L/C Indemnified Person”), from and against any
and all claims, damages, losses, liabilities, costs or expenses of any kind or nature whatsoever
which the Revolving Credit Banks, the Issuing Bank or the Agent or any such Person may incur or
which may be claimed against any of them by reason of or in connection with any Letter of Credit
(collectively, the “ L/C Indemnified Amounts”), and none of the Issuing Bank, any Revolving Credit
Bank or the Agent or any of their respective officers, directors, employees or agents shall be
liable or responsible for:



     (a) the use which may be made of any Letter of Credit or for any acts or omissions of any
beneficiary in connection therewith;



     (b) the validity, sufficiency or genuineness of documents or of any endorsement thereon, even
if such documents should in fact prove to be in any or all respects invalid, insufficient,
fraudulent or forged;



49









 





     (c) payment by the Issuing Bank to the beneficiary under any Letter of Credit against
presentation of documents which do not strictly comply with the terms of any Letter of Credit
(unless such payment resulted from the gross negligence or willful misconduct of the Issuing Bank),
including failure of any documents to bear any reference or adequate reference to such Letter of
Credit;



     (d) any error, omission, interruption or delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in connection with any Letter of Credit; or



     (e) any other event or circumstance whatsoever arising in connection with any Letter of
Credit;


provided, however, that with respect to subparagraphs (a) through (e) hereof, (i) neither
the Company nor any of the Account Parties shall be required to indemnify any L/C Indemnified
Person for any L/C Indemnified Amounts to the extent such amounts result from such L/C Indemnified
Person’s gross negligence or willful misconduct and (ii) the Agent and the Issuing Bank shall be
liable to the Company and the Account Parties to the extent, but only to the extent, of any direct,
as opposed to consequential or incidental, damages suffered by the Company and the Account Parties
which were caused by the Issuing Bank’s gross negligence, or willful misconduct or by the Issuing
Bank’s wrongful dishonor of any Letter of Credit after the presentation to it by the beneficiary
thereunder of a draft or other demand for payment and other documentation strictly complying with
the terms and conditions of such Letter of Credit.




     (f) It is understood that in making any payment under a Letter of Credit the Issuing Bank
will rely on documents presented to it under such Letter of Credit as to any and all matters set
forth therein without further investigation and regardless of any notice or information to the
contrary.



     3.10
Right of Reimbursement. Each Revolving Credit Bank agrees to reimburse the Issuing
Bank on demand, pro rata in accordance with its respective Revolving Credit Percentage, for (i) the
reasonable out-of-pocket costs and expenses of the Issuing Bank to be reimbursed by the Company or
any Account Party pursuant to any Letter of Credit Agreement or any Letter of Credit, to the
extent not reimbursed by the Company or any Account Party and (ii) any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs, fees, reasonable
out-of-pocket expenses or disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against Issuing Bank in any way relating to or arising out of this
Agreement (including Section 3.6(c) hereof), any Letter of Credit, any documentation or any
transaction relating thereto, or any Letter of Credit Agreement, to the extent not reimbursed by
the Company or any Account Party, except to the extent that such liabilities, losses, costs or
expenses were incurred
by Issuing Bank as a result of Issuing Bank’s gross negligence or willful misconduct or by the
Issuing Bank’s wrongful dishonor of any Letter of Credit after the presentation to it by the
beneficiary thereunder of a draft or other demand for payment and other documentation strictly
complying with the terms and conditions of such Letter of Credit.



4. INTENTIONALLY OMITTED


50









 








5. CONDITIONS


     The obligations of the Banks to make Advances or loans pursuant to this Agreement and the
obligation of the Issuing Bank to issue Letters of Credit are subject to the following conditions:



     5.1
Execution of Notes and this Agreement. Each of the Loan Parties shall have executed
and delivered to Agent for the account of each Bank requesting Notes, the Revolving Credit Notes
and/or the Swing Line Note, as applicable, and this Agreement and the other Loan Documents to which
that Loan Party is a party (including all schedules, exhibits, certificates, opinions, financial
statements and other documents to be delivered pursuant hereto), and such Notes, and this Agreement
and the other Loan Documents shall be in full force and effect.



     5.2
Corporate Authority. Agent shall have received, with a counterpart thereof for each
Bank:




	 	(a)	 	For each Loan Party, a certificate of its Secretary or Assistant Secretary as to:






	 	(i)	 	resolutions of the board of directors of such Loan Party
evidencing approval of the transactions contemplated by this Agreement,
approval of this Agreement and the other Loan Documents to which such Loan
Party is party and authorizing the execution and delivery thereof and in the
case of the Company, the borrowing of Advances and the requesting of Letters of
Credit hereunder,
	 
	 	(ii)	 	the incumbency and signature of the officers of such Loan Party
executing any Loan Document,
	 
	 	(iii)	 	a certificate of good standing or continued existence (or the
equivalent thereof) from the state of its incorporation, and from every state
or other jurisdiction listed on Schedule 5.2 hereof if issued by such
jurisdiction, subject to the limitations (as to qualification and authorization
to do business) contained in Section 6.1, and
	 
	 	(iv)	 	copies of such Loan Party’s articles of incorporation and
bylaws or other constitutional documents, as in effect on the Restatement
Effective Date;





     5.3
Collateral Documents, Guaranties and other Loan Documents.
As security for all Obligations, the Agent shall have received the following documents:




	 	(a)	 	The following Collateral Documents:






(i) a Reaffirmation of Loan Documents;




(ii) a Copyright Security Agreement;




(iii) a Trademark Security Agreement;



51









 






(iv) a Collateral Compliance Certificate; and




(v) an Amendment to Mortgage for each of the following Mortgages: (a) Barrow
County, Georgia and (b) Milford, Connecticut, together with any related documents
reasonably requested by the Agent, provided that down-dates of title policies for
such properties shall be delivered within 30 days of the Restatement Date.



     (b) If requested by the Agent, in the case of each leased property listed on Schedule 5.3(c)
hereto (excluding 402 Centre Street, Fernandina Beach, Florida 32035) and all other locations where
Collateral having an aggregate value of $100,000 or more is located and which is not owned by
Company and where Collateral Access Agreements have not previously been delivered, Collateral
Access Agreements in form and substance reasonably acceptable to the Agent and the Banks.



     (c) Certified copies of uniform commercial code requests for information, or a similar search
report certified by a party acceptable to the Agent, dated a date reasonably near to the
Restatement Effective Date, listing all effective financing statements which name The Company or
any Subsidiary (under their present names or under any previous names used within five (5) years
prior to the date hereof) as debtors and which are filed in the jurisdictions in which filings are
to be made pursuant to the Collateral Documents, together with (i) copies of such financing
statements, and (ii) executed Uniform Commercial Code (Form UCC-3) Termination Statements, if any,
necessary to release all Liens and other rights of any Person in any Collateral described in the
Collateral Documents previously granted by any Person (other than Liens permitted by Section 8.2).



     (d) Any documents (including, without limitation, financing statements, amendments to
financing statements and assignments of financing statements, stock powers executed in blank and
any endorsements) reasonably required to be provided in connection with the Collateral Documents to
create, in favor of the Agent (for and on behalf of the Banks), a perfected security interest in
the Collateral thereunder shall have been delivered to the Agent in a proper form for filing in
each office in each jurisdiction listed in Schedule 5.3(e), or other office, as the case
may be.



     5.4
Intentionally Omitted.



     5.5
Compliance with Certain Documents and Agreements.
The Loan Parties shall have each performed and complied in all material respects with all
agreements and conditions contained in this Agreement and the other Loan Documents and required to
be performed or complied with by each of them (as of the applicable date) and none of such parties
shall be in material default in the performance or compliance with any of the terms or provisions
hereof or thereof.



     5.6
Opinion of Counsel. The Loan Parties shall furnish Agent on the Restatement Effective
Date, with signed copies for each Bank, opinions of counsel to the Loan Parties, dated the
Restatement Effective Date and covering such matters as reasonably required by and otherwise
reasonably satisfactory in form and substance to the Agent and each of the Banks.



52









 





     5.7
Company’s Certificate. The Agent shall have received, with a signed counterpart for
each Bank, a certificate of a Responsible Officer of the Company dated the date of the initial
Advance hereunder, stating that to the best of his or her knowledge after due inquiry, (a) except
to the extent set forth in any post closing letter between the Company and the Agent, the
conditions set forth in this Section 5 have been satisfied; (b) the representations and warranties
made by the Loan Parties in this Agreement or any of the other Loan Documents, are true and correct
in all material respects; (c) no Default or Event of Default shall have occurred and be continuing;
and (d) since December 31, 2007, nothing shall have occurred which has had, or could reasonably be
expected to have, a Material Adverse Effect.



     5.8
Payment of Fees. Concurrently with the initial Advance hereunder, Company shall have
paid to Comerica, in its individual capacity and as Agent (for its sole account), any commitment
fee and agency fee due under the terms of the applicable Fee Letter.



     5.9
Continuing Conditions. The obligations of the Banks to make Advances (including the
initial Advance) under this Agreement and the obligation of the Issuing Bank to issue any Letters
of Credit shall be subject to the continuing conditions that:



     (a) No Default or Event of Default shall exist as of the date of the Advance or the request
for the Letter of Credit; and



     (b) Each of the representations and warranties contained in this Agreement and in each of the
other Loan Documents shall be true and correct in all material respects as of the date of the
Advance or Letter of Credit as if made on and as of such date (other than any representation or
warranty that expressly speaks only as of a different date).



6. REPRESENTATIONS AND WARRANTIES




     The Company represents and warrants and such representations and warranties shall survive
until the Final Maturity Date and thereafter until the expiration of all Letters of Credit and the
final payment in full of the Obligations and the performance by the Company of all other
obligations under this Agreement:



     6.1
Corporate Authority. Each Loan Party is a corporation (or other business entity) duly
organized and existing in good standing under the laws of the state or jurisdiction of its
incorporation, each other Subsidiary is a corporation or other business entity duly organized and
existing in good standing under the laws of the jurisdiction of its incorporation, and, other than
as set forth on Schedule 6.1 hereto, each Loan Party and each Subsidiary is duly qualified
and authorized to do business as a foreign corporation in each jurisdiction where the character of
its assets or the nature of its activities makes such qualification and authorization necessary and
where failure to be so qualified could reasonably be expected to have a Material Adverse Effect.



     6.2
Due Authorization — Company. Execution, delivery and performance of this Agreement,
the other Loan Documents to which the Company is a party and the issuance of the Notes by the
Company (if requested) are within the Company’s corporate powers, have been duly authorized, are
not in contravention of any law applicable to the Company or the terms of the Company’s
organizational documents and, except as have been previously obtained or as referred to in Section
6.13, below, do not require the consent or approval, material to the



53









 







transactions contemplated by
this Agreement and the other Loan Documents, of any governmental body, agency or authority.



     6.3
Due Authorization — Guarantors. Execution, delivery and performance of the Guaranty,
and the other Loan Documents to which such Guarantor is a party, are within the corporate powers of
each such Guarantor, have been duly authorized, are not in contravention of any law applicable to
such Guarantor or the terms of such Guarantor’s organizational documents, and, except as have been
previously obtained (or as referred to in Section 6.13 below), do not require the consent or
approval, material to the transactions contemplated by this Agreement and the other Loan Documents,
of any governmental body, agency or authority not previously obtained.



     6.4
Good Title, No Liens. The property described in Schedules 5.3(b) and 5.3(c)
hereof constitutes all of the real property owned or leased by the Company and their respective
Subsidiaries on the Restatement Effective Date. The Company and its Subsidiaries have good title to
or a valid leasehold interest in (or, in the case of any fee interest in real property, good and
marketable title to) all of their respective material assets, subject to the exceptions stated in
the next sentence. There are no security interests in, liens, mortgages, or other encumbrances on
and no financing statements on file with respect to any of the assets owned by Company or their
respective Subsidiaries, except for (i) any defects that, individually or in the aggregate could
not reasonably be expected to have a Material Adverse Effect and (ii) other Liens permitted
pursuant to Section 8.2.



     6.5
Taxes. Each of the Loan Parties, and each of their respective Subsidiaries has filed
on or before their respective due dates or within the applicable grace periods, all federal, state
and foreign tax returns which are required to be filed or has obtained extensions for filing such
tax returns and is not delinquent in filing such returns in accordance with such extensions and has
paid all material taxes which have become due pursuant to those returns or pursuant to any
assessments received by any such party, as the case may be, to the extent such taxes have become
due, except to the extent such tax payments are being actively contested in good faith by
appropriate proceedings and with respect to which adequate provision has been made on the books of
such Loan Party or such other Subsidiary as may be required by GAAP.



     6.6
No Defaults. There exists no material default under the provisions of any instrument
evidencing any outstanding indebtedness for borrowed money in excess of $500,000 of any Loan Party
or any of their respective Subsidiaries or of any agreement relating thereto.



     6.7
Enforceability of Agreement and Loan Documents — Company. This Agreement and each of
the other Loan Documents to which the Company is a party have each been duly executed and delivered
by its duly authorized officers and constitute the valid and binding obligations of the Company,
enforceable in accordance with their respective terms, except as enforcement thereof may be limited
by applicable bankruptcy, reorganization, insolvency, fraudulent conveyance, moratorium or similar
laws affecting the enforcement of creditor’s rights, generally and by general principles of equity
(regardless of whether enforcement is considered in a proceeding in law or equity).



54









 





     6.8
Enforceability of Loan Documents — Guarantors. The Loan Documents to which each of
the Guarantors is a party, have each been duly executed and delivered by the duly authorized
officers or members or managers, as the case may be, of each such Guarantor and constitute the
valid and binding obligations of each such Guarantor, enforceable in accordance with their
respective terms, except as enforcement thereof may be limited by applicable bankruptcy,
reorganization, insolvency, fraudulent conveyance, moratorium or similar laws affecting the
enforcement of creditor’s rights, generally and by general principles of equity (regardless of
whether enforcement is considered in a proceeding in law or equity).



     6.9
Compliance with Laws. (a) Except as disclosed on Schedule 6.9, each of the
Loan Parties, and each of their respective Subsidiaries has complied with all applicable federal,
state and local laws, ordinances, codes, rules, regulations and guidelines (including consent
decrees and administrative orders) including but not limited to Hazardous Material Laws, except to
the extent that failure to comply therewith could not reasonably be expected to have a Material
Adverse Effect and (b) neither the extension of credit made pursuant to this Agreement or the use
of the proceeds thereof by the Company or any of its Subsidiaries 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, or The United and Strengthening America by providing appropriate Tools Required to
Intercept and Obstruct Terrorism (“USA Patriot Act”) Act of 2001, Public Law 10756, October 26,
2001 or Executive Order 13224 of September 23, 2001 issued by the President of the United States
(66 Fed. Reg. 49049 (2001)).



     6.10
Non-contravention — Company. The execution, delivery and performance of this
Agreement and the other Loan Documents to which it is a party by the Company are not in
contravention of the terms of any indenture, agreement or undertaking to which the Company or any
of its Subsidiaries is a party or by which its or their properties are bound or affected where such
violation would reasonably be expected to have a Material Adverse Effect.



     6.11
Non-contravention — Guarantors. The execution, delivery and performance of those
Loan Documents signed by the Guarantors are not in contravention of the terms of any indenture,
agreement or undertaking to which any such Guarantor is a party or by which it or its properties
are bound or affected where such violation would reasonably be expected to have a Material Adverse
Effect.



     6.12
No Litigation. Except for De Minimis Matters or as set forth on Schedule 6.12
hereof, there is no suit, action, proceeding, including, without limitation, any bankruptcy
proceeding, or governmental investigation pending against or to the knowledge of the Company,
threatened against any Loan Party or any of their respective Subsidiaries (other than any suit,
action or proceeding in which such Loan Party or such Subsidiary is the plaintiff and in which no
counterclaim or cross-claim against such Loan Party or such Subsidiary has been filed). Except as
set forth on Schedule 6.12 there is not outstanding against any Loan Party or any
Subsidiary any judgment, decree, injunction, rule, or order of any court, government, department,
commission, agency, instrumentality or arbitrator nor is any Loan Party or any other Subsidiary in
violation of any applicable law, regulation, ordinance, order, injunction, decree or requirement of
any governmental body or court where such matters individually or in the aggregate would reasonably
be expected to have a Material Adverse Effect.



55









 





     6.13
Consents, Approvals and Filings, Etc. Except as have been previously obtained or for
DeMinimis Matters and except for the consents of landlords with respect to properties leased by
Company and its Subsidiaries or other Persons with respect to Inventory held at facilities not
owned or leased by Company or its Subsidiaries, no authorization, consent, approval, license,
qualification or formal exemption from, nor any filing, declaration or registration with, any
court, governmental agency or regulatory authority or any securities exchange or any other person
or party (whether or not governmental) is required in connection with the execution, delivery and
performance: (i) by any of the Loan Parties of this Agreement, any of the other Loan Documents to
which they are a party, or any other documents or instruments to be executed and or delivered by
any such Loan
Parties in connection therewith or herewith; or (ii) by Loan Party, of the liens, pledges,
mortgages, security interests or other encumbrances granted, conveyed or otherwise established (or
to be granted, conveyed or otherwise established) by or under this Agreement or the other Loan
Documents, except for such filings to be made concurrently herewith as are required by the
Collateral Documents to perfect liens in favor of the Agent and except for such consents, approvals
or filings the failure of which to obtain would not have a Material Adverse Effect. All such
material authorizations, consents, approvals, licenses, qualifications, exemptions, filings,
declarations and registrations which have previously been obtained or made, as the case may be, are
in full force and effect and are not the subject of any attack, or to the knowledge of the Company
threatened attack (in any material respect) by appeal or direct proceeding or otherwise.



     6.14
Agreements Affecting Financial Condition. Except as disclosed on Schedule
6.14 annexed hereto, as of the Restatement Effective Date none of the Loan Parties nor any of their
respective Subsidiaries is party to any agreement or instrument or subject to any charter or other
corporate restriction which could reasonably be expected to have a Material Adverse Effect.



     6.15
No Investment Company or Margin Stock. None of the Loan Parties nor any of their
respective Subsidiaries is an “investment company” within the meaning of the Investment Company Act
of 1940, as amended. None of the Loan Parties nor any of their respective Subsidiaries is engaged
principally, or as one of its important activities, directly or indirectly, in the business of
extending credit for the purpose of purchasing or carrying margin stock. None of the proceeds of
any of the Advances will be used by any Loan Party nor any of their respective Subsidiaries to
purchase or carry margin stock or will be made available by any Loan Party or any of their
respective Subsidiaries in any manner to any other Person to enable or assist such Person in
purchasing or carrying margin stock. Terms for which meanings are provided in Regulation U of the
Board of Governors of the Federal Reserve System or any regulations substituted therefor, as from
time to time in effect, are used in this paragraph with such meanings.



     6.16
ERISA. None of the Loan Parties nor any of their respective Subsidiaries maintains or
contributes to any Pension Plan subject to Title IV of ERISA, except as set forth on Schedule 6.16
hereto; and there is no accumulated funding deficiency within the meaning of ERISA, or any
outstanding liability with respect to any of the Pension Plans owed to the PBGC or any successor
thereto other than future premiums due and owing pursuant to Section 4006 of ERISA, and no
“reportable event” as defined in ERISA has occurred with respect to any Pension Plan other than an
event for which the notice requirement has been waived by the PBGC. Neither the Loan Parties nor
any of their respective Subsidiaries have engaged in a



56









 







transaction with respect to any Pension
Plan, other than a transaction for which an exemption is available and has been obtained, which
could subject the Company or the Subsidiaries to a tax or penalty imposed by Section 4975 of the
Code or Section 502(i) of ERISA in an amount that would be material. All Pension Plans are in
material compliance with the requirements of the Internal Revenue Code and ERISA.



     6.17
Conditions Affecting Business or Properties. As of the Restatement Effective Date,
neither the respective businesses nor the properties of any Loan Party nor any of their respective
Subsidiaries is affected by any fire, explosion, accident, strike, lockout or other dispute,
drought, storm, hail, earthquake, embargo, Act of God, or other casualty (not covered by insurance)
which is reasonably likely to have a Material Adverse Effect, or if such event or condition were to
continue for more than ten (10) additional days could reasonably be expected to have a Material
Adverse Effect.



     6.18
Environmental and Safety Matters. Except as set forth in Schedules 6.18 and 6.12 and
except for such matters as are not reasonably likely to have a Material Adverse Effect:



     (a) all facilities and property owned or leased by the Loan Parties or any of their respective
Subsidiaries, are in material compliance with all Hazardous Material Laws;



     (b) to the knowledge of the Company, there have been no unresolved and outstanding past, and
there are no pending or threatened




	 	(i)	 	written claims, complaints, notices or requests for information
received by any Loan Party or any of their respective Subsidiaries with respect
to any alleged violation of any Hazardous Material Law, or
	 
	 	(ii)	 	written complaints, notices or inquiries to any Loan Party or
any of their respective Subsidiaries regarding potential liability of the Loan
Parties or any of their respective subsidiaries under any Hazardous Material
Law; and





     (c) to the knowledge of the Company, no conditions exist at, on or under any property now or
previously owned or leased by the Loan Parties or any of their respective Subsidiaries which, with
the passage of time, or the giving of notice or both, are reasonably likely to give rise to
liability under any Hazardous Material Law or create a significant adverse effect on the value of
the property.



     6.19
Subsidiaries. Except as disclosed on Schedule 6.19 hereto as of the
Restatement Effective Date, and thereafter, except as disclosed to the Agent in writing from time
to time, Company has no Subsidiaries.



     6.20
Accuracy of Information. (a) Each of the Company’s financial statements furnished to
Agent and the Banks prior to the date of this Agreement, fairly presents in all material respects
(subject to year-end adjustments and the omission of notes thereto in the case of interim
statements) the financial condition of the Company and its Subsidiaries and the results of their
operations for the periods covered thereby, and has been prepared in accordance with GAAP. The
projections and pro
forma financial information furnished to Agent and the Banks



57









 







prior to the date of this
Agreement are based upon good faith estimates and assumptions believed by management of the Company
to be reasonable at the time made, it being recognized by the Banks that such financial information
as it relates to future events is not to be viewed as fact and that actual results during the
period or periods covered by such financial information may differ from the projected results set
forth therein.



     (b) Since December 31, 2007, there has been no Material Adverse Effect on the financial
condition of Company and its Subsidiaries taken as a whole; to the best knowledge of the Company as
of the Restatement Effective Date, neither Company nor any of its Subsidiaries has any material
contingent obligations (including any liability for taxes) not disclosed by or reserved against in
the Company’s financial statements for the period ended December 31, 2007, except as set forth on
Schedule 6.20 hereof; and at the present time there are no unrealized or anticipated losses
from any present commitment of Company or any of its Subsidiaries which contingent obligations and
losses in the aggregate would reasonably be expected to have a Material Adverse Effect.



     6.21
Labor Relations. None of the Loan Parties nor any of their respective Subsidiaries is
engaged in any unfair labor practice that could reasonably be expected to have a Material Adverse
Effect. Except as disclosed on Schedule 6.21, there is (i) no unfair labor practice
complaint pending against the Loan Parties nor any of their respective Subsidiaries or to the
knowledge of Company, threatened against any of them, before the National Labor Relations Board,
and no grievance or arbitration proceeding arising out of or under any collective bargaining
agreement is so pending against any of them or, to the knowledge of Company, threatened against any
of them, (ii) no strike, labor dispute, slowdown or stoppage pending against the Company or any
Subsidiary or to the knowledge of Company, threatened against any of them and (iii) no union
representation question existing with respect to the employees of the Loan Parties or any of their
respective Subsidiaries, in each case or in the aggregate which could reasonably be expected to
have a Material Adverse Effect.



     6.22
Existing Debt. As of the Restatement Effective Date, Schedule 8.1(b) hereto
sets forth a true and complete list of all Debt for borrowed money (other than the Obligations) of
the Company and the Subsidiaries as of the Restatement Effective Date that is in excess of $50,000
for any one issue and is to remain outstanding after giving effect to this transaction, in each
case showing the aggregate principal amount thereof and the name of the company (or issuer) and any
other entity which directly or indirectly guaranteed such debt.



     6.23
Solvency. After giving effect to the consummation of the transactions contemplated by
this Agreement, the Company and its Subsidiaries will each be solvent, able to pay its indebtedness
as it matures and will have capital sufficient to carry on its business and all business in which
it is about to engage. This Agreement is being executed and delivered by the Company to Agent
and the Banks in good faith and in exchange for fair, equivalent consideration. Neither the
Company nor any Subsidiary intends to nor does management of the Company or any Subsidiary believe
it will incur debts beyond its ability to pay as they mature. Neither the Company nor any
Subsidiary contemplates filing a petition in bankruptcy or for an arrangement or reorganization
under the Bankruptcy Code or any similar law of any jurisdiction now or hereafter in effect
relating to the Company or



58









 







any Subsidiary, nor does the Company or any Subsidiary have any
knowledge of any threatened bankruptcy or insolvency proceedings against the Company or any
Subsidiary.



     6.24
Capitalization. On the Restatement Effective Date, except as disclosed on
Schedule 6.24, all issued and outstanding shares of Equity Interests of Company and its
Subsidiaries are duly authorized and validly issued, fully paid, nonassessable, with respect only
to shares of a Guarantor or other Subsidiary owned by Company or any Subsidiary, are free and clear
of all Liens other than Liens permitted under Section 8.2 and all issued and outstanding shares of
the Company and its Subsidiaries were issued in compliance with all applicable state and federal
laws concerning the issuance of securities. On the Restatement Effective Date, the number of
authorized and issued Equity Interests of the Company and each Subsidiary is as set forth on
Schedule 6.24. On the Restatement Effective Date, none of the Equity Interests of the
Company or any Subsidiary, other than those described above, are issued and outstanding. On the
Restatement Effective Date, except as disclosed on Schedule 6.24, there are no preemptive
or other outstanding rights, options, warrants, conversion rights or similar agreements or
understandings for the purchase or acquisition from the Company or any Subsidiary, of any shares of
Equity Interests of the Company or any Subsidiary.



     6.25
Corporate Documents and Corporate Existence. As to each Loan Party, (a) it is an
organization as described on Schedule 6.25 hereto and has provided the Agent and the Banks with
complete and correct copies of its articles of incorporation, by-laws and all other applicable
charter and other organizational documents, and, if applicable, a good standing certificate and (b)
its correct legal name, business address, type of organization and jurisdiction of organization,
tax identification number and other relevant identification numbers are set forth on Schedule 6.25
hereto.



7. AFFIRMATIVE COVENANTS


     The Company covenants and agrees that it will, and, as applicable, it will cause its
Subsidiaries, until the Final Maturity Date and thereafter until expiration of all Letters of
Credit and final payment in full of the Obligations and the performance by the Company of all other
obligations under this Agreement and the other Loan Documents, to:



     7.1
Financial Statements. Furnish to the Agent:



     (a) as soon as available, but in any event within one hundred twenty (120) days after the end
of each fiscal year of the Company a copy of the audited Consolidated financial
statements of the Company and the Subsidiaries as at the end of such year and the related
audited statements of income, stockholders equity, and cash flows for such year and footnotes,
setting forth in each case in comparative form the figures for the previous year, certified as
being fairly stated in all material respects by an independent certified public accounting firm
reasonably satisfactory to the Agent and the Banks; provided, however, that such
requirements for the furnishing of such annual financial statements may be fulfilled by the
furnishing of the annual report of the Company on Form 10-K (within the 120 day period set forth
herein), which includes financial statements, as filed with the Securities and Exchange Commission,
for the applicable fiscal year, and notice to Agent of such filing (within the 120 day period set
forth herein); and



59









 





     (b) as soon as available, but in any event not later than thirty (30) days after the end of
each month (except the last month of each fiscal year in which case sixty (60) days after the end
of such month), Company prepared unaudited Consolidated balance sheets of the Company and the
Subsidiaries as at the end of such month and the related unaudited statements of income, and cash
flows for the portion of the fiscal year through the end of such month, setting forth in each case
in comparative form the figures for the corresponding periods in the previous year, and certified
by a Responsible Officer as being fairly stated in all material respects; and all such financial
statements to be complete and correct in all material respects and to be prepared in reasonable
detail and in accordance with GAAP throughout the periods reflected therein and with prior periods
(except as approved by such officer and disclosed therein), provided however that the financial
statements delivered pursuant to clause (b) hereof will not be required to include footnotes and
will be subject to year-end adjustments.



     7.2
Certificates; Other Information. Furnish to the Agent (all of which shall be subject
to the confidentiality provisions of Section 13.11 below):



     (a) Within thirty (30) days after and as of the end of each month, a Covenant Compliance
Report;



     (b) By December 31 of each year the Company shall prepare and deliver to the Agent and the
Banks projections of the Company and the Subsidiaries for the next succeeding fiscal year, on a
month to month basis and for the following two (2) fiscal years on an annual basis, including a
balance sheet as at the end of each relevant period and income statements and statements of cash
flows for each relevant period and for the period commencing at the beginning of the fiscal year
and ending on the last day of such relevant period;



     (c) Within twenty (20) days after and as of the end of each month agings of Accounts and
accounts payables of Company and the Guarantors, an inventory report of Company and the Guarantors
and any such schedule shall be accompanied, if so requested by Agent, by a true and correct copy of
the invoices evidencing Eligible Accounts and by evidence of delivery or performance and other
supporting detail satisfactory to Agent;



     (d) Within twenty (20) days after and as of the end of each month, unless Availability is less
than $12,500,000, in which case, by Friday of each week and as of the close of business on Friday
of the prior week, a Borrowing Base Certificate in form satisfactory to Agent;



     (e) Promptly upon receipt thereof, the Company shall use its best efforts to deliver or cause
to be delivered copies of all significant reports submitted by the Company’s firm of certified
public accountants in connection with each annual, interim or special audit or review of any type
of the financial statements or related internal control systems of the Company and the Subsidiaries
made by such accountants, including any comment letter submitted by such accountants to managements
in connection with their services;



     (f) Promptly after filing, copies of all reports filed by Company or any of its Subsidiaries
with the Securities Exchange Commission; and




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     (g) Promptly and in form to be reasonably satisfactory to the requesting Bank, such additional
financial and/or other information, or other reports as any Bank may from time to time reasonably
request.



     7.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or before maturity
or before they become delinquent, as the case may be, all of its material obligations of whatever
nature, except where the amount or validity thereof is currently being contested in good faith by
appropriate proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of the Company.



     7.4 Conduct of Business and Maintenance of Existence; Compliance with Laws.



     (a) Continue to engage solely in the business now conducted by the Company or its Subsidiaries
and businesses related or complimentary thereto and preserve, renew and keep in full force and
effect its existence, except as otherwise permitted pursuant to Sections 8.4 and 8.5;



     (b) Take all reasonable action it deems necessary in its reasonable business judgment to
maintain all rights, privileges and franchises necessary in the normal conduct of its business,
except as otherwise permitted pursuant to Section 8.5 or where the failure to so maintain would not
reasonably be expected to have a Material Adverse Effect; and



     (c) Comply with all Contractual Obligations and Requirements of Law, except to the extent that
failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.



     7.5 Maintenance of Property; Insurance. (a) Keep all material property it deems, in
its reasonable business judgment, useful and necessary in its business in working order (ordinary
wear and excepted), except where the failure to maintain such property would not reasonably be
expected to have a Material Adverse Effect; and (b) maintain insurance coverage on its physical
assets and against other business risks in such amounts and of such types as are customarily
carried by companies similar in size and nature (including without limitation casualty and public
liability and property damage insurance), and in the event of acquisition of additional property,
real or personal, or of incurrence of additional risks of any nature, increase such insurance
coverage in such manner and to such extent as prudent business judgment and present practice or any
applicable Requirements of Law would dictate, and in the case of all policies covering any
Collateral, all such insurance policies shall provide that the loss payable thereunder shall be
payable to Company or such Subsidiary and to the Agent for the benefit of the Banks (Agent as
mortgagee, or, in the case of personal property interests, lender loss payee), as their respective
interests may appear, and certificates evidencing such policies, including all endorsements
thereto, to be deposited with Agent upon its request.



     7.6 Inspection of Property; Books and Records, Discussions. Permit Agent and each
Bank, through their authorized attorneys, accountants and representatives (a) at all reasonable
times during normal business hours, upon the prior written notice by Agent or such Bank, to examine
Company’s and each Subsidiary’s books, accounts, records, ledgers and assets and properties of
every kind and description wherever located; (b) at any time and from time to time (in any event,
at least once a year unless Availability is less than $12,500,000, in which case, at



61









 







least once a
quarter during the period Availability is less than $12,500,000), upon the request of the Majority
Banks, to conduct full or partial collateral audits of Company and the Subsidiaries to be completed
by an appraiser as may be selected by Agent and the Majority Banks and consented to by Company
(such consent not to be unreasonably withheld), with all reasonable costs and expenses of such
audits to be reimbursed by Company; provided, however, that prior to the occurrence and
continuance of any Default or Event of Default, the Company shall be required to reimburse the
Agent for the reasonable costs and
expenses of no more than one (1) audit (unless Availability is less than $12,500,000, in which
case during the period Availability is less than $12,500,000 four (4)) such audit(s) may be
conducted by Agent in any year at the Company’s expense) and provided further, however,
that Company shall be required to reimburse the Agent for all reasonable costs and expenses of all
audits conducted after the occurrence and during the continuance of a Default or Event of Default;
and (c) permit Agent and each Bank or their authorized representatives, at reasonable times and
intervals upon prior written notice, to visit all of their respective offices, discuss their
respective financial matters with their respective officers and independent certified or chartered
public accountants, as applicable, and, by this provision, Company authorizes such accountants to
discuss the finances and affairs of Company and the Subsidiaries (provided that Company is given an
opportunity to participate in such discussions) and examine any of its or their books and other
corporate records. Notwithstanding the foregoing, all information furnished to the Agent or the
Banks hereunder shall be subject to the undertaking of the Banks set forth in Section 13.11 hereof.



     7.7 Notices. Promptly give notice to the Agent of:



     (a) the occurrence of any Default or Event of Default of which the Company or any Subsidiary
has knowledge;



     (b) any (i) default or event of default (taking into account applicable periods of notice and
cure) under any Contractual Obligation of Company or any Subsidiary of which the Company or such
Subsidiary had knowledge or (ii) litigation, investigation or proceeding which may exist at any
time between the Company or any Subsidiary and any Governmental Authority or other third party,
which in either case, if not cured or if it is reasonably likely to be adversely determined, as the
case may be, would have a Material Adverse Effect or (iii) any change in the financial condition of
the Company or any of the Subsidiaries since the date of the last audited financial statements
delivered pursuant to Section 7.1(a) hereof which could reasonably be expected to have a Material
Adverse Effect;



     (c) any event which the Company reasonably believes is reasonably likely to have a Material
Adverse Effect;



     (d) promptly after becoming aware of the taking by the Internal Revenue Service or any foreign
taxing jurisdiction of a written tax position (or any such tax position taken by the Company or any
Subsidiary) which could reasonably be expected to have a Material Adverse Effect upon The Company
or any Subsidiary setting forth the details of such position and the financial impact thereof;



62









 





     (e) not less than 10 days prior to the proposed effective date thereof, copies of any proposed
material amendments, restatements or other modification to the Subordinated Debt Documents;



     (f) provide prompt written notice to the Agent of (i) all jurisdictions in which the Company
or any of the Subsidiaries becomes qualified to do business as a foreign entity after the
Restatement Effective Date to transact business, and (ii) any material change after the Restatement
Effective Date in the Equity Interests of the Company or any of the Subsidiaries or
any other material amendment to their charter, by-laws or other organizational documents, such
notice, in each case, to identify the applicable jurisdictions, capital structures or amendments as
applicable; and



     (g) concurrently with the delivery thereof, any notices to any holder of Subordinated Debt
pursuant to the Subordinated Debt Documents other than notices required hereunder.


Each notice pursuant to this Section shall be accompanied by a statement of a Responsible Officer
setting forth details of the occurrence referred to therein and stating what action the Company has
taken or proposes to take with respect thereto.




     7.8 Hazardous Material Laws.



     (a) Use and operate all of its facilities and properties in material compliance with all
applicable Hazardous Material Laws, keep all required material permits, approvals, certificates,
licenses and other authorizations required under such Hazardous Material Laws in effect and remain
in material compliance therewith, and handle all Hazardous Materials in material compliance with
all applicable Hazardous Material Laws, in each case, except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect or a material adverse effect on the
Collateral taken as a whole;



     (b) Promptly notify Agent and provide copies upon receipt of all written claims, complaints,
notices or inquiries received by the Company or any of the Subsidiaries of a material nature
relating to Hazardous Materials or compliance with Hazardous Material Laws;



     (c) To the extent necessary to materially comply with Hazardous Material Laws, remediate or
monitor contamination arising from a release or disposal of Hazardous Material;



     (d) Provide such information and certifications which any Bank may reasonably request from
time to time to evidence compliance with this Section 7.8.



     7.9 Consolidated Debt Service Coverage Ratio. Maintain as of the end of each fiscal
quarter of Company, a Consolidated Debt Service Ratio of not less than 1.25 to 1.0.



     7.10 Maintain Leverage Ratio. Maintain as of the end of each fiscal quarter of
Company, a Consolidated Leverage Ratio of not more than 1.75 to 1.0.



     7.11 Governmental and Other Approvals. Apply for, obtain and/or maintain in effect,
as applicable, all authorizations, consents, approvals, licenses, qualifications, exemptions,
filings, declarations and registrations (whether with any court, governmental agency, regulatory



63









 







authority, securities exchange or otherwise) which are necessary in connection with the execution,
delivery and performance by such Loan Parties, of this Agreement, the other Loan Documents, or any
other documents or instruments to
be executed and/or delivered by such Loan Parties in connection therewith or herewith, except
where the failure to so apply for, obtain or maintain would not reasonably be expected to have a
Material Adverse Effect.



     7.12 Compliance with ERISA. Comply in all material respects with all applicable
requirements imposed by ERISA as presently in effect or hereafter promulgated or the Internal
Revenue Code, including, but not limited to, the minimum funding requirements of any Pension Plan,
except where the failure to comply is not likely to have a Material Adverse Effect.



     7.13 ERISA Notices. Promptly notify Agent upon the occurrence of any of the following
events if such event is likely to have a Material Adverse Effect:



     (a) the termination, other than a standard termination, as defined in ERISA, of any Pension
Plan subject to Subtitle C of Title IV of ERISA;



     (b) the Company’s or any Subsidiary’s receipt of notice of the appointment of a trustee by a
United States District Court to administer any Pension Plan subject to Title IV of ERISA;



     (c) the Company’s or any Subsidiary’s receipt of notice of the commencement by the Pension
Benefit Guaranty Corporation, or any successor thereto, of any proceeding to terminate any Pension
Plan subject to Title IV of ERISA;



     (d) the failure of the Company or any Subsidiary to make any payment in respect of any Pension
Plan required under Section 412 of the Internal Revenue Code;



     (e) the withdrawal of the Company or any Subsidiary from any Multiemployer Plan if the Company
reasonably believes that such withdrawal would give rise to the imposition of withdrawal liability
with respect thereto; or



     (f) the occurrence of a “reportable event” which is required to be reported by the Company
under Section 4043 of ERISA as defined in ERISA other than any event for which the reporting
requirement has been waived by the PBGC or a “prohibited transaction” as defined in Section 406 of
ERISA or Section 4975 of the Internal Revenue Code other than a transaction for which a statutory
exemption is available or an administrative exemption has been obtained which in either case is
likely to have a Material Adverse Effect.



     7.14 Security; Defense of Collateral. Take such actions as the Agent or the Majority
Banks may from time to time reasonably request to establish and maintain first perfected security
interests in and Liens on all of its Collateral, subject only to the Liens permitted under Section
8.2 hereof; and defend the Collateral from any Liens other than Liens permitted by Section 8.2.



     7.15 Appraisal Requirements. In the event required by the applicable banking regulatory authorities having jurisdiction
thereof, as determined by Agent in its reasonable discretion, deliver to Agent (with a copy for
each of the Banks) within ninety (90) days following written notice from Agent, real estate and
machinery and equipment appraisals meeting Agent’s customary appraisal standards for each real or
personal property interest (owned



64









 







in fee or leasehold, as the case may be, to the extent so
required by such regulatory authorities) encumbered by a Mortgage hereunder.



     7.16 Use of Proceeds. Use all Advances of the Revolving Credit as set forth in
Section 2.15 hereof; and not use any portion of the proceeds of any such advances for the purpose
of purchasing or carrying any “margin stock” (as defined in Regulation U of the Board of Governors
of the Federal Reserve System) in any manner which violates the provisions of Regulation T, U or X
of said Board of Governors or for any other purpose in violation of any applicable statute or
regulation.



     7.17 Future Subsidiaries; Additional Collateral.



     (a) With respect to each Person which becomes a Subsidiary of Company (directly or indirectly)
subsequent to the Restatement Effective Date, within thirty (30) days of the date such Person is
created, acquired or otherwise becomes a Subsidiary (whichever first occurs), cause such new
Subsidiary to execute and deliver to the Agent (x) the Guaranty or a Joinder Agreement (attached to
the Guaranty as Exhibit A) whereby such Subsidiary becomes obligated as a Guarantor under the
Guaranty and (y) a joinder agreement to the Amended and Restated Security Agreement;



     (b) With respect to the Equity Interests of each Person which becomes a Subsidiary subsequent
to the Restatement Effective Date, within thirty (30) days of the date such Person is created,
acquired or otherwise becomes a Subsidiary, the Company shall execute, or cause to be executed, and
deliver to the Agent a Pledge Agreement or a Security Agreement, as applicable, encumbering all of
the Equity Interests of such Subsidiary to secure the Obligations of the Company.



     (c) With respect to real property located in the United States owned, leased or otherwise
acquired by the Company or any Subsidiary after the Restatement Effective Date (except for leases
of office space), not later than forty-five (45) days after such property is acquired, the Company
shall execute or cause to be executed (unless waived by Agent and the Majority Banks) a Mortgage
(or a leasehold Mortgage, where appropriate) covering such property (and a lessor’s acknowledgment
and consent in form and substance reasonably acceptable to the Agent and the Majority Banks in the
case of leased property), together with such real estate documentation listed on Schedule
7.17 hereto;


in each case in form reasonably satisfactory to the Agent and the Majority Banks, in their
reasonable discretion, together with such supporting documentation, including without limitation
corporate authority items, certificates and opinions of counsel, as reasonably required by the
Agent and the Majority Banks and the Company shall take, or cause to be taken, such steps as are
necessary or advisable under applicable law to perfect the liens granted under this Section 7.19.




     7.18 Further Assurances.



     (a) Execute and deliver or cause to be executed and delivered to Agent within a reasonable
time following Agent’s request, and at the Borrowers’ expense, such other documents



65









 







or instruments
as Agent may reasonably require to effectuate more fully the purposes of this Agreement or the
other Loan Documents.



     (b) Each Loan Party agrees to provide the Agent and the Banks with any other information
required by Section 326 of the USA Patriot Act or necessary for the Agent and the Banks to verify
the identity of the Loan Parties as required by Section 326 of the USA Patriot Act.



     7.19 Availability. Maintain at all times Availability of not less than $10,000,000.



     7.20 Depository and Securities Accounts. Maintain all depository account
relationships with Agent, except for the depository accounts described on Schedule 5.3(f)
annexed hereto for which an original Deposit Account Control Agreement duly executed by all parties
thereto, in form and substance reasonably acceptable to the Agent shall have been delivered to
Agent. With respect to any securities account, upon the occurrence and during the continuance of a
Default or Event of Default hereunder, promptly following the request of the Agent or the Majority
Lenders, the applicable Loan Party shall cause delivery to the Agent of an original securities
account control agreement duly executed by all parties thereto, in form and substance reasonably
acceptable to the Agent.



8. NEGATIVE COVENANTS.




     Company covenants and agrees that, until the Final Maturity Date and thereafter until
expiration of all Letters of Credit and final payment in full of the Obligations and the
performance by Company and its Subsidiaries of all other obligations under this Agreement and the
other Loan Documents, it will not, and will not permit or any of the Subsidiaries, to:



     8.1 Limitation on Debt. Create, incur, assume or suffer to exist any Debt, except:



     (a) the Obligations under this Agreement and the other Loan Documents;



     (b) any Debt existing on the Restatement Effective Date and set forth in Schedule
8.1(b). attached hereto and any renewals or refinancing of such Debt in amounts not exceeding the
scheduled amounts (less any required amortization according to the terms thereof), on substantially
the same terms as in effect on the Restatement Effective Date and otherwise in compliance with this
Agreement;



     (c) Debt of the Company or a Subsidiary, excluding Debt otherwise permitted under this Section
8.1, incurred to finance the acquisition of fixed or capital assets (whether pursuant to a loan or
a Capitalized Lease), provided that the aggregate amount of all such Debt shall not exceed Two
Million Dollars ($2,000,000) at any one time outstanding;



     (d) Subordinated Debt;



     (e) Designated Hedge Obligations;



     (f) Guarantee Obligations permitted under Section 8.3 or any other Loan Document;



66









 





     (g) current unsecured trade, utility or nonextraordinary accounts payable (including without
limitation, operating leases and short term Debt owed to vendors) arising in the ordinary course of
Company’s or such Subsidiary’s businesses;



     (h) Debt in respect of taxes, assessments or governmental charges to the extent that payment
thereof shall not at the time be required to be made in accordance with Section 7.3;



     (i) Debt arising from judgments or decrees in circumstances not constituting an Event of
Default under Section 9.1;



     (j) Intercompany Loans, but only to the extent permitted under Section 8.8 hereof; and



     (k) Debt secured by Permitted Liens.



     8.2 Limitation on Liens. Create, incur, assume or suffer to exist any Lien upon any
of its property, assets or revenues, whether now owned or hereafter acquired, except for:



     (a) Permitted Liens;



     (b) Liens securing Debt permitted by Section 8.1(c), provided that (i) such Liens shall be
created substantially simultaneously with the acquisition of such fixed or capital asset, (ii) such
Liens do not at any time encumber any property other than the property, equipment or improvements
financed by such Debt, and (iii) the principal amount of Debt secured by any such Lien shall at no
time exceed 100% of the original purchase price of such property, equipment or improvements;



     (c) Liens in favor of Agent, as security for the Obligations (including Obligations under any
Designated Hedge Agreements);



     (d) attachments, judgments and other similar Liens (other than any judgment that is described
in clause (h) of Section 9.1 and constitutes an Event of Default thereunder), arising in connection
with court proceedings, provided that the execution or other enforcement of such Liens is
effectively stayed within 30 days and claims secured thereby are being actively contested in good
faith by appropriate proceedings;



     (e) other Liens, existing on the Restatement Effective Date, set forth on Schedule 8.2
attached hereto and any renewals, extensions or refinancing of the Debt secured thereby in amounts
not exceeding the scheduled amounts (less any required amortization according to the terms
thereof), on substantially the same terms as in effect on the Restatement Effective Date and
otherwise in compliance with this Agreement;



     (f) Liens granted to banks or other financial institutions in the ordinary course of business
in connection with deposit, disbursement or concentration accounts (other than in connection with
borrowed money) maintained with such banks or financial institutions on funds and other items in
such accounts;



67









 





     (g) Liens created under the sale and leaseback transactions permitted under Section 8.9
hereof, provided that any such Liens do not at any time encumber any property other than
the property which is the subject of the sale and leaseback transaction; and



     (h) the Investments permitted under Section 8.7(h) hereof, to the extent such Investments
constitute Liens.



     8.3 Limitation on Guarantee Obligations. Create, incur, assume or suffer to exist any
Guarantee Obligation except (a) the Guaranty, (b) Guarantee Obligations by Company or any
Guarantor in respect of Debt incurred by Company or any other Guarantor subject to Section 8.7(e)
of this Agreement, as the case may be, in compliance with this Agreement, (c) Guarantee Obligations
of the Guarantors in respect of the Subordinated Debt, (d) Guarantee Obligations not otherwise
permitted under this Section 8.3 in respect of Debt incurred by any Person, provided that the
aggregate principal amount of such Debt at any time outstanding does not exceed $1,000,000, (e)
Guarantee Obligations existing on the Restatement Effective Date and set forth on Schedule
8.3 hereof, (f) Guarantee Obligations arising with respect to customary indemnification and
purchase price adjustment obligations incurred in connection with any sale or disposition of assets
and (g) Guarantee Obligations incurred in the ordinary course of business with respect to surety
and appeal bonds, performance and return-of-money bonds and similar obligations not exceeding at
any time outstanding $1,000,000 in aggregate liability.



     8.4 Limitation on Mergers, other Fundamental Changes or Sale of Assets. Enter into
any merger or consolidation or convey, sell, lease, assign, transfer or otherwise dispose of any of
its property, business or assets (including, without limitation, receivables and leasehold
interests), whether now owned or hereafter acquired or make any material change in its capital
structure or present method of conducting business, except:



     (a) inventory leased or sold in the ordinary course of business;



     (b) obsolete or worn out property or equipment, or property or equipment no longer useful in
the conduct of Company’s or any Subsidiary’s business;



     (c) (i) mergers or consolidations of any Subsidiary with or into Company (so long as Company
shall be the continuing or surviving entity); and (ii) mergers or consolidations of any
Subsidiary with or into any Guarantor (except to the extent such merger or consolidation would
not violate Section 7.4(a) hereof), so long as such Guarantor shall be the continuing or surviving
entity; provided, however, that at the time of each such merger or consolidation under
sub-clauses (i) through (ii) of this clause (c), both before and after giving effect thereto, no
Default or Event of Default shall have occurred and be continuing;



     (d) any Subsidiary may liquidate or dissolve into the Company or any Guarantor if the Company
determines in good faith that such liquidation or dissolution is in the best interests of the
Company;



     (e) sales or transfers, including upon voluntary liquidation (i) between Company and any
Guarantor or (ii) from any Subsidiary of the Company to the Company or any Guarantor;



68









 





     (f) subject to Sections 2.13(b) and 4.11(a), provided that no Default or Event of Default has
occurred and is continuing at the time of each such sale (both before and after giving effect to
such Asset Sale), (i) Asset Sales in which the sales price is at least the fair market value of the
assets sold and the aggregate amount of such Asset Sales is less than $100,000 in any fiscal year
and the consideration received is cash or cash equivalents and (ii) other Asset Sales approved by
the Majority Banks;



     (g) the sale or disposition of Permitted Investments and other cash equivalents in the
ordinary course of business;



     (h) intentionally omitted;



     (i) intentionally omitted; and



     (j) Subject to the provisions of Sections 2.13(b) and 4.11(b) of this Agreement, sales of
Equity Interests in Company under any employee stock purchase plan or employee stock option
agreement and other sales of Equity Interests in Company which do not result in a Change in
Control.



     8.5 Restricted Payments. Declare or make, or permit any Subsidiary to, declare or
make any distributions, dividend, payment or other distribution of assets, properties, cash,
rights, obligations or securities (collectively, “Distributions”) on account of any Equity
Interests, as applicable, or issue, purchase, redeem or otherwise acquire for value any Equity
Interests, as applicable, or any warrants, rights or options to acquire such Equity Interests, now
or hereafter outstanding, except that provided no Default or Event of Default shall have
occurred and be continuing:



     (a) the Subsidiaries may make Distributions to the Company or any Guarantor;



     (b) the Company or any of the Subsidiaries may declare and make dividends to its shareholders
payable solely in shares of that class of stock held by such shareholders;



     (c) the Company may issue stock options or shares under its employee stock option plan and
employee stock purchase plan (including restricted stock units under the 2007 Omnibus Incentive
Plan);



     (d) the Company may repurchase stock options not to exceed $100,000 in the aggregate during
any fiscal year;



     (e) Company may make cash Distributions to the holders of the Equity Interests in Company
during any fiscal quarter of Company (“Current Quarter”), provided that Company will be in
compliance with Section 7.9 of this Agreement as of the last day of such Current Quarter; and



     (f) Company may redeem shares of the capital stock of Company, not to exceed Fifteen Million
Dollars ($15,000,000) in the aggregate on and after June 1, 2005, provided that immediately after
giving effect to any such redemption, all of the following requirements shall have been satisfied:



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(1) Availability shall be not less than Twenty Five Million Dollars ($25,000,000);




(2) not less than five (5) Business Days prior to the date of the proposed
redemption, Agent shall have received written notice of the proposed redemption, the
proposed number and class of shares to be redeemed, the redemption price and the
proposed date for such redemption (“Redemption Notice”), together with pro forma
financial statements and a Covenant Compliance Certificate (in the form required
under Section 7.1(b) and 7.2 of this Agreement) dated as of the proposed date of
redemption (taking into account the proposed redemption) copies of which shall
promptly be delivered by Agent to each of the Banks, establishing that immediately
after giving effect to such redemption the Consolidated Leverage Ratio will be not
more than 1.50 to 1.0; and




(3) In connection with the first Redemption Notice only, Company shall have paid
Agent for the pro rata benefit of the Banks in accordance with their respective
Percentages a one-time, non-refundable fee equal to $37,500.



     8.6 Limitation on Capital Expenditures. Make or commit to make (by way of the
acquisition of securities of a Person or otherwise) any expenditure in respect of the purchase or
other acquisition of fixed or capital assets (excluding any such asset acquired in connection with
normal replacement and maintenance programs properly charged to current operations) except Capital
Expenditures which shall not exceed (a) Fifty Million Dollars ($50,000,000) for each of the fiscal
years ending December 31, 2008 and December 31, 2009 of the Company and (b) Twenty Five Million
Dollars ($25,000,000) during any other fiscal year of Company.



     8.7 Limitation
on Investments, Loans and Advances. Make or allow to remain outstanding any Investment (whether such investment shall be of the
character of investment in shares of stock, evidences of indebtedness or other securities or
otherwise) in, or any loans or advances to, any Person, firm, corporation or other entity or
association, other than:



     (a) Permitted Investments;



     (b) Investments existing on the Restatement Effective Date and listed on Schedule 8.7
hereof;



     (c) extensions of trade credit in the ordinary course of business;



     (d) Intercompany Loans, Advances or Investments made on or after the Effective Date by the
Company to any Guarantor or by any Guarantor to the Company (provided that any Intercompany Loan
hereunder shall be evidenced by and funded under an Intercompany Note encumbered pursuant to the
appropriate Collateral Document), provided that at the time any such loan, advance or investment is
made (before and after giving effect thereto) no Event of Default under Section 9.1(a) or 9.1(j)
has occurred and is continuing;



     (e) Investments in respect of Hedging Transactions;



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     (f) Investments received in connection with the bankruptcy or reorganization of, or settlement
of delinquent accounts and disputes with, customers and suppliers, in each case in the ordinary
course of business;



     (g) (i) loans and advances to employees, officers and directors of the Company or any of the
Subsidiaries in connection with equity incentive arrangements in an aggregate amount not to exceed
$675,000 plus accrued interest, provided that the proceeds of such loans and advances are paid to
the Company or any of the Subsidiaries, as applicable, in connection with such equity incentive
arrangements and (ii) other loans and advances to employees of the Company or any of the
Subsidiaries in aggregate amount not to exceed $500,000;



     (h) Investments constituting deposits made in connection with the purchase of goods or
services in the ordinary course of business in an aggregate amount for such deposits not to exceed
$500,000 at any one time;



     (i) (A) $2,500,000 in aggregate Investments in or to G.S.P. LLC and/or OLP LLC made after
December 30, 2002, and before March 1, 2006 and (B) Investments in or to G.S.P. LLC and/or OLP LLC,
and any other Joint Venture engaged in a line of business which is compatible with, or
complimentary to, the business of Company or any of its Subsidiaries which are made after March 1,
2006, not exceeding $10,000,000 in the aggregate. For purposes of this Section 8.7(i) only, the
aggregate principal amount paid on or after March 1, 2006 by Company and/or its Subsidiaries under
the Guarantee Obligations permitted under Section 8.3(e) of this Agreement shall be deemed
Investments;



     (j) so long as no Default or Event of Default shall have occurred and be continuing, other
Investments not to exceed $250,000 in the aggregate; and



     (k) the investment of funds under the terms of the Olympic Steel, Inc. Executive Deferred
Compensation Plan dated effective December 1, 2004, the Olympic Steel, Inc. Supplemental Executive
Retirement Plan dated effective January 1, 2005, the Senior Management Compensation Plan dated
effective January 1, 2005 and any other mandatorily deferred senior management compensation plan
established by Company after the Effective Date.


In valuing any Investments for the purpose of applying the limitations set forth in this Section
8.7 (except as otherwise expressly provided herein), such Investment shall be taken at the original
cost thereof, without allowance for any subsequent write-offs or appreciation or depreciation, but
less any amount repaid or recovered on account of capital or principal.




     8.8 Transactions with Affiliates. Except as set forth in Schedule 8.8 (which
transactions described on Schedule 8.8 are on terms that are fair and reasonable to the
Company and its Subsidiaries) and except for Subordinated Debt permitted hereunder, enter into any
transaction, including, without limitation, any purchase, sale, lease or exchange of property or
the rendering of any service, or providing for the payment of any management or other fee, with any
Affiliate of a Company or any Subsidiary except (a) transactions otherwise permitted under this
Agreement; (b) transactions in the ordinary course of Company’s or such Subsidiary’s business and
upon fair and reasonable terms no less favorable to the Company or such Subsidiary than it



71









 







would
obtain in a comparable arms length transaction from unrelated third parties; (c) transactions
between or among Company and the Guarantors not involving any other Affiliates; (d) the issuance
and exercise of stock options granted to any Affiliate of Company.



     8.9 Sale and Leaseback. Enter into any arrangement with any Person providing for the
leasing by the Company or any Subsidiary of real or personal property which has been or is to be
sold or transferred by the Company or such Subsidiary to such Person or to any other Person to whom
funds have been or are to be advanced by such Person on the security of such property or rental
obligations of the Company or such Subsidiary, as the case may be, except property purchased by the
Company or Subsidiary after the Effective Date, provided that the Net Cash Proceeds of such sale
are applied to the Obligations outstanding under the Revolving Credit (without resulting in a
reduction of the Revolving Credit Aggregate Commitment).



     8.10 Limitation on Negative Pledge Clauses. After the Restatement Effective Date,
except for such agreements, documents or instruments which are in effect on the Restatement
Effective Date and which are set forth on Schedule 8.10 hereto, enter into any agreement,
document or instrument which would restrict or prevent the Company and its Subsidiaries from
granting Agent on behalf of Banks liens upon, security interests in and pledges of their respective
assets which are senior in priority to all other Liens, except for Permitted Liens and any other
agreements, documents or instruments pursuant to which Liens not prohibited by the terms of this
Agreement are created, entered into, or allowed to exist.



     8.11 Prepayment of Debts. Prepay, purchase, redeem or defease any Debt for money
borrowed (including without limitation any Subordinated Debt) or any capital leases, excluding
refinancings, extensions or renewals of such Debt in the same or lesser amounts (and giving effect
to any required amortization) on substantially the same terms or on terms more favorable to the
obligor thereunder, and otherwise in compliance with this Agreement.



     8.12 Amendment of Subordinated Debt Documents. Amend, modify or otherwise alter (or
suffer to be amended, modified or altered) any of the terms and conditions of those documents or
instruments evidencing or otherwise related to any Debt set forth on Schedule 8.1 , any
Subordinated Debt, any provision thereof which in any case could reasonably be expected to be
adverse to the Banks, in any case without the prior written approval of Agent and the Majority
Banks; for purposes of those documents or instruments evidencing or otherwise related to such Debt,
any shortening of the put exercise date or increase in the amount of or change in the formula for
determining the put price under any rights agreement, any increase in the original interest rate or
principal amount, any shortening of the original amortization, any change in financial covenants
which make such covenants more restrictive or adds new covenants, any change in any default,
remedial or other repayment term making such term more onerous or restrictive, shall, without
reducing the scope of this Section 8.12, be deemed to be adverse to the Banks.



     8.13 Modification of Certain Agreements. Make, permit or consent to any amendment or
other modification to the constituent documents of any of the Loan Parties (including the Company’s
certificate of incorporation), except to the extent that any such amendment (i) does not violate
the terms and conditions of this Agreement or any of the other Loan Documents, (ii) does not
materially adversely affect the interest of the Banks as creditor under this Agreement,



72









 







the other
Loan Documents or any other document or instrument in any respect, or (iii) could not reasonably be
expected to have a Material Adverse Effect.



     8.14 Fiscal Year. Permit the fiscal year of the Company to end on a day other than
December 31.



     8.15 Inventory Valuation Method. Make, permit or consent to any change or
modification of the method by which Company and the Borrowing Base Obligors evaluate their
Inventory, respectively.



9. DEFAULTS




     9.1 Events of Default. The occurrence of any of the following events shall constitute
an Event of Default hereunder:



     (a) non-payment when due of (i) the principal or interest on the Obligations under the
Revolving Credit (including the Swing Line), (ii) any Reimbursement Obligation, or (iii) any Fees,
and in the case of interest payments and Fees, continuance thereof for three (3) Business Days;



     (b) non-payment of any money by the Company under this Agreement or by Company or any
Subsidiary under any of the other Loan Documents to which it is a party, other than as set forth in
subsection (a) above, within three (3) Business Days after notice from Agent that the same is due
and payable;



     (c) default in the observance or performance of any of the conditions, covenants or agreements
of Company set forth in Sections 7.1, 7.2, 7.5, 7.6, 7.7(a), 7.9, 7.10, 7.16, 7.19, 7.20 or 8 (all
inclusive);



     (d) default in the observance or performance of any of the other conditions, covenants or
agreements set forth in this Agreement by Company and continuance thereof for a period of thirty
(30) consecutive days after the earlier to occur of (i) written notice from Agent and (ii) the date
on which Company knew or should have known of the occurrence of such default;



     (e) any representation or warranty made by Company or any Subsidiary herein or in any
instrument submitted pursuant hereto proves untrue or misleading in any material adverse respect
when made;



     (f) default in the observance or performance of or failure to comply with any of the
conditions, covenants or agreements of Company or any Subsidiary set forth in any of the other Loan
Documents, and the continuance thereof beyond any period of grace or cure specified in any such
document or, in the case of the Collateral Documents, continuance thereof for a period of thirty
(30) consecutive days after the earlier to occur of (i) written notice from Agent and (ii) the date
on which Company knew or should have known of the occurrence of such default or such failure;



     (g) (i) default in the payment of any indebtedness for borrowed money (other than Obligations,
but including without limitation any Subordinated Debt) of the Company or any



73









 







Subsidiary in excess
of One Million Dollars ($1,000,000) individually or in the aggregate when due (whether by
acceleration or otherwise) and continuance thereof beyond any applicable period of cure or (ii)
failure to comply with the terms of any other obligation of the Company or any Subsidiary with
respect to any indebtedness for borrowed money (other than Obligations) in excess of One Million
Dollars ($1,000,000) individually or in the aggregate, which continues beyond any applicable period
of cure and which would permit the holder or holders thereto to accelerate such other indebtedness
for borrowed money or (iii) as a consequence of the occurrence or continuation of any event or
condition (other than the passage of time on the right of the holder of Debt to convert such
indebtedness for borrowed money into Equity Interests), (x) the Company or any Subsidiary has
become obligated to purchase or repay such Debt for borrowed money before its regular maturity or
before its regularly scheduled dates of payment in an aggregate outstanding principal amount of at
least $1,000,000 or (y) one or more Persons have the right to require the Company or any Subsidiary
so to purchase or repay such Debt for borrowed money;



     (h) the rendering of any judgment(s) for the payment of money in excess of the sum of One
Million Dollars ($1,000,000) individually or in the aggregate against the Company or any
Subsidiary, and such judgments shall remain unpaid, unvacated, unbonded or unstayed by appeal or
otherwise for a period of thirty (30) consecutive days, except as covered by adequate insurance
with a reputable carrier as to which the relevant insurance company has acknowledged coverage;



     (i) the occurrence of (i) a “reportable event”, as defined in ERISA, which is determined to
constitute grounds for a distress termination by the PBGC of any Pension Plan subject to Title IV
of ERISA maintained or contributed to by or on behalf of the Company or any of the Subsidiaries for
the benefit of any of its employees or for the appointment by the appropriate United States
District Court of a trustee to administer such Pension Plan and such reportable event is not
corrected and such determination is not revoked within sixty (60) days after notice thereof has
been given to the plan administrator of such Pension Plan (without limiting any of Agent’s or any
Bank’s other rights or remedies hereunder), or (ii) the institution of proceedings by the Pension
Benefit Guaranty Corporation to terminate any such Pension Plan or (iii) the appointment of a
trustee by the appropriate United States District Court to administer any such Pension Plan, which
in either case of (i), (ii) or (iii) could reasonably be expected to have a Material Adverse
Effect;



     (j) the Company or any Guarantor shall be dissolved or liquidated (or any judgment, order or
decree therefor shall be entered); or if a creditors’ committee shall have been appointed for the
business of the Company or any Guarantor; or if the Company or any Guarantor shall have made a
general assignment for the benefit of creditors or shall have been adjudicated bankrupt and if not
an adjudication based on a filing by Company it shall not have been dismissed within sixty (60)
days, or shall have filed a voluntary petition in bankruptcy or for reorganization or to effect a
plan or arrangement with creditors or shall fail to pay its debts generally as such debts become
due in the ordinary course of business (except as contested in good faith and for which adequate
reserves are made in such party’s financial statements); or shall file an answer to a creditor’s
petition or other petition filed against it, admitting the material allegations thereof for an
adjudication in bankruptcy or for reorganization; or shall have applied for or permitted the
appointment of a receiver or trustee or custodian for any of its property or assets; or such
receiver, trustee or custodian shall have been appointed for any of its property or



74









 







assets
(otherwise than upon application or consent of Company or any Guarantor) and shall not have been
removed within sixty (60) days; or if an order shall be entered approving any petition for
reorganization of Company or any Guarantor and shall not have been reversed or dismissed within
sixty (60) days; or Company or any Guarantor shall take any action (corporate or other) authorizing
or in furtherance any of the actions described above in this subsection;



     (k) default in the observance or performance of or any failure to comply with any of the
conditions, covenants or agreements of any Subordinated Debt Holder under the terms of any
Subordination Agreement and continuance thereof for a period of fifteen (15) consecutive days after
the earlier to occur of (i) written notice from Agent and (ii) the date on which Company knew or
should have known of the occurrence of such default or such failure;



     (l) any material provision of any Collateral Document or the Guaranty shall at any time for
any reason cease to be valid, binding and enforceable against the Company or any Subsidiary
(other than in accordance with the terms thereof), as applicable, or the validity, binding
effect or enforceability thereof shall be contested by the Company or any Subsidiary, or the
Company or any Subsidiary shall deny that it has any or further liability or obligation under any
Collateral Document or the Guaranty, or any such Loan Document shall be terminated (other than in
accordance with the terms thereof), invalidated, revoked or set aside or in any way cease to give
or provide to the Banks and the Agent the benefits purported to be created thereby; or



     (m) (i) if there shall occur a Change of Control; or (ii) if there shall occur any change in
the management, ownership or control of the Company which, in the judgment of the Majority Banks,
could reasonably be expected to have a Material Adverse Effect, and such change in management,
ownership or control has not been corrected to the satisfaction of the Majority Banks within thirty
(30) consecutive days after the earlier to occur of (x) written notice from Agent or (y) the date
on which Company knew or should have known that such change in the management, ownership or control
could, in the judgment of the Majority Banks, reasonably be expected to have a Material Adverse
Effect.



     9.2 Exercise of Remedies. (a) If an Event of Default has occurred and is continuing
hereunder: (i) the Agent may, and shall, upon being directed to do so by the Majority Banks,
declare the Commitment terminated; (ii) the Agent may, and shall, upon being directed to do so by
the Majority Banks, declare the entire unpaid principal Obligations, including the Notes,
immediately due and payable, without presentment, notice or demand, all of which are hereby
expressly waived by Company; (iii) upon the occurrence of any Event of Default specified in Section
9.1(j) and notwithstanding the lack of any declaration by Agent under preceding clauses (i) or (ii)
of this Section 9.2, the entire unpaid principal Obligations shall become automatically and
immediately due and payable, and the Commitment shall be automatically and immediately terminated;
(iv) the Agent shall, upon being directed to do so by the Majority Banks, demand immediate delivery
of cash collateral, and Company and each Account Party agrees to deliver such cash collateral upon
demand, in an amount equal to the maximum amount that may be available to be drawn at any time
prior to the stated expiry of all outstanding Letters of Credit; and (v) the Agent may, and shall,
if directed to do so by the Majority Banks or the Banks, as applicable (subject to the terms
hereof), exercise any remedy permitted by this Agreement, the other Loan Documents or law.



75









 





     (b) Notwithstanding the provisions of Section 9.2(a) above, in no event shall the Agent
foreclose (i) any mortgage lien the Agent may have on the real property commonly known as 3600
North Military Road, Detroit, Michigan (the “Michigan Real Estate”) without the consent of all of
the Banks (which consent shall not be unreasonably withheld, delayed or conditioned by any Bank),
(ii) any security interest the Agent may have in any equity interest in any entity that owns all or
any part of the Michigan Real Estate or (iii) exercise any right or remedy that would result in the
Agent purchasing or otherwise acquiring any direct ownership (in whole or in part) in the Michigan
Real Estate or an entity which owns the Michigan Real Estate (in whole or in part) without the
consent of all of the Banks (which consent shall not be unreasonably withheld, delayed or
conditioned by any Bank).



     9.3 Rights Cumulative. No delay or failure of Agent and/or Banks in exercising any right, power or privilege
hereunder shall affect such right, power or privilege, nor shall any single or partial exercise
thereof preclude any further exercise thereof, or the exercise of any other power, right or
privilege. The rights of Agent and Banks under this Agreement are cumulative and not exclusive of
any right or remedies which Banks would otherwise have.



     9.4 Waiver by Company of Certain Laws. To the extent permitted by applicable law, the
Company hereby agrees to waive, and does hereby absolutely and irrevocably waive and relinquish the
benefit and advantage of any valuation, stay, appraisement, extension or redemption laws now
existing or which may hereafter exist, which, but for this provision, might be applicable to any
sale made under the judgment, order or decree of any court, on any claim for interest on the Notes,
or any security interest or mortgage contemplated by or granted under or in connection with this
Agreement. These waivers have been voluntarily given, with full knowledge of the consequences
thereof.



     9.5 Waiver of Defaults. No Event of Default shall be waived by the Banks except in a
writing signed by an officer of the Agent in accordance with Section 13.10 hereof. No single or
partial exercise of any right, power or privilege hereunder, nor any delay in the exercise thereof,
shall preclude other or further exercise of their rights by Agent or the Banks. No waiver of any
Event of Default shall extend to any other or further Event of Default. No forbearance on the part
of the Agent or the Banks in enforcing any of their rights shall constitute a waiver of any of
their rights. Company expressly agrees that this Section may be waived or modified only in
accordance with Section 13.10 and may not be waived or modified by the Banks or Agent by course of
performance, estoppel or otherwise.



     9.6 Set Off. Upon the occurrence and during the continuance of any Event of Default,
each Bank may at any time and from time to time, without notice to the Company but subject to the
provisions of Section 10.3 hereof (any requirement for such notice being expressly waived by the
Company), setoff and apply against any and all of the Obligations of the Company now or hereafter
existing under this Agreement, whether owing to such Bank, any Affiliate of such Bank or any other
Bank or the Agent, any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Bank to or for the credit or the
account of Company and any property of Company from time to time in possession of such Bank,
irrespective of whether or not such deposits held or indebtedness owing by such Bank may be
contingent and unmatured and regardless of whether any Collateral then held by Agent or any Bank is
adequate to cover the Obligations. Promptly following any such



76









 







setoff, such Bank shall give written
notice to Agent and to Company of the occurrence thereof. The Company hereby grants to the Banks
and the Agent a lien on and security interest in all such deposits, indebtedness and property as
collateral security for the payment and performance of all of the Obligations of the Company under
this Agreement. The rights of each Bank under this Section 9.6 are in addition to the other rights
and remedies (including, without limitation, other rights of setoff) which such Bank may have.



10. PAYMENTS, RECOVERIES AND COLLECTIONS; MARGIN ADJUSTMENTS




     10.1 Payment Procedure.



     (a) Except as otherwise provided herein, all payments by the Company in respect of principal
of, or interest on, any Advance in Dollars under the Revolving Credit or in respect of any Letter
of Credit Obligations under the Revolving Credit or Fees hereunder which are payable in Dollars
shall be made without setoff or counterclaim on the date specified for payment under this Agreement
not later than 1:00 p.m. (Detroit time) in Dollars in immediately available funds to Agent, for the
ratable account of the Revolving Credit Banks in the case of payments in respect of the Revolving
Credit, at Agent’s office located at One Detroit Center, Detroit, Michigan 48226-3289. Upon receipt
of each such payment, the Agent shall make prompt payment to each applicable Bank, or, in respect
of Eurocurrency-based Advances, such Bank’s Eurocurrency Lending Office, in like funds and
currencies, of all amounts received by it for the account of such Bank.



     (b) Unless the Agent shall have been notified by Company prior to the date on which any
payment to be made by Company is due that Company does not intend to remit such payment, the Agent
may, in its sole discretion and without obligation to do so, assume that the Company has remitted
such payment when so due and the Agent may, in reliance upon such assumption, make available to
each Revolving Credit Bank on such payment date an amount equal to such Bank’s share of such
assumed payment. If Company has not in fact remitted such payment to the Agent each Revolving
Credit Bank shall forthwith on demand repay to the Agent the amount of such assumed payment made
available or transferred to such Bank, together with the interest thereon, in respect of each day
from and including the date such amount was made available by the Agent to such Bank to the date
such amount is repaid to the Agent at a rate per annum equal to (i) for Prime-based Advances, the
Federal Funds Effective Rate (daily average), as the same may vary from time to time, and (ii) with
respect to Eurocurrency-based Advances, Agent’s aggregate marginal cost (including the cost of
maintaining any required reserves or deposit insurance and of any fees, penalties, overdraft
charges or other costs or expenses incurred by Agent) of carrying such amount.



     (c) Subject to the definition of Interest Period, whenever any payment to be made hereunder
shall otherwise be due on a day which 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 computing interest, if any,
in connection with such payment.



     (d) All payments to be made by Company under this Agreement or any of the Notes (including
without limitation payments under the Swing Line) shall be made without setoff or counterclaim, as
aforesaid, and, subject to full compliance by each Bank (and each assignee and



77









 







participant pursuant
to Section 13.8) with Section 13.12, without deduction for or on account of any present or future
withholding or other taxes of any nature imposed by any governmental authority or of any political
subdivision thereof or any federation or organization of which such governmental authority may at
the time of payment be a member (other than any net income, net profits or franchise taxes imposed
on the Agent or any Bank as a result of a present or former connection between the Agent or such
Bank and the governmental authority, political
subdivision, federation or organization imposing such taxes), unless Company is compelled by
law to make payment subject to such tax. In such event, Company shall:




	 	(i)	 	pay to the Agent for Agent’s own account and/or, as the case
may be, for the account of the Banks (and, in the case of Advances of the Swing
Line, pay to the Swing Line Bank which funded such Advances) such additional
amounts as may be necessary to ensure that the Agent and/or such Bank or Banks
receive a net amount equal to the full amount which would have been receivable
had payment not been made subject to such tax; and
	 
	 	(ii)	 	remit such tax to the relevant taxing authorities according to
applicable law, and send to the Agent or the applicable Bank (including the
Swing Line Bank) or Banks, as the case may be, such certificates or certified
copy receipts as the Agent or such Bank or Banks shall reasonably require as
proof of the payment by the Company, of any such taxes payable by the Company.




As used herein, the terms “tax”, “taxes” and “taxation” include all taxes (other than taxes on or
measured by the overall income of a Person), levies, imposts, duties, charges, fees, deductions and
withholdings and any restrictions or conditions resulting in a charge together with interest (and
any taxes payable upon the amounts paid or payable pursuant to this Section 10.1) thereon, or the
payment or delivery of funds into or out of any jurisdiction other than the United States (whether
assessed against any of the Company, Agent or any of the Banks). Company shall be reimbursed by
the applicable Bank for any payment made by Company under this Section 10.1 if the applicable Bank
is not in compliance with its obligations under Section 13.12.




     10.2 Application of Proceeds of Collateral. Notwithstanding anything to the contrary
in this Agreement, after an Event of Default and the exercise of remedies pursuant to Article 9 of
this Agreement or the other Loan Documents, the proceeds of any Collateral, together with any
offsets, voluntary payments by Company or any Subsidiary of the Company or others and any other
sums received or collected in respect of the Obligations, shall be applied, first, to the
Obligations under the Revolving Credit (including the Swing Line) and any Reimbursement Obligations
on a pro rata basis (or in such order and manner as determined by the Majority Banks; subject,
however, to the applicable Percentages of the loans held by each of the Banks), next, to any other
Obligations on a pro rata basis, and then, if there is any excess, to Company and the Subsidiaries,
as the case may be. Subject to the terms of this Section 10.2, the application of such proceeds and
other sums to the Advances of the Revolving Credit, the Reimbursement Obligations and under any
Designated Hedge Agreements shall be based on each Bank’s Percentage of the aggregate of the loans.



78









 





     10.3 Pro-rata Recovery. If any Bank shall obtain any payment or other recovery
(whether voluntary, involuntary, by application of setoff or otherwise) on account of principal of,
or interest on, any of the Obligations in excess of its pro rata share of payments then or
thereafter obtained by all Banks upon principal of and interest on all Obligations, such Bank shall
purchase from the other
Banks such participations in the Revolving Credit and/or Reimbursement Obligation held by them
as shall be necessary to cause such purchasing Bank to share the excess payment or other recovery
ratably with the Percentage with each of them in accordance with the applicable Percentages of the
Banks; provided, however, that if all or any portion of the excess payment or other recovery is
thereafter recovered from such purchasing holder, the purchase shall be rescinded and the purchase
price restored to the extent of such recovery, but without interest.



     10.4 Margin Adjustments. Adjustments to the Applicable Margins and the Applicable Fee
Percentages, based on Schedule 1.1, shall be implemented on a quarterly basis as follows:




	 	(a)	 	Such adjustments shall be given prospective effect only,
effective as to all Advances outstanding hereunder, the Applicable Fee
Percentage and the Letter of Credit Fee, upon the date of delivery of the
financial statements under Sections 7.1(a) and 7.1(b) hereunder and the
Covenant Compliance Report under Section 7.2(a) hereof, in each case
establishing applicability of the appropriate adjustment and in each case with
no retroactivity or claw-back. In the event Company shall fail timely to
deliver such financial statements or the Covenant Compliance Report and such
failure continues for three (3) days, then (but without affecting the Event of
Default resulting therefrom) from the date delivery of such financial
statements and report was required until such financial statements and report
are delivered, the Applicable Margins and Applicable Fee Percentages shall be
at the highest level on the Pricing Matrix attached to this Agreement as
Schedule 1.1.
	 
	 	(b)	 	From the Restatement Effective Date until the required date of
delivery (or, if earlier, delivery) of the financial statements under Section
7.1(a) or 7.1(b) hereof, as applicable, and the Covenant Compliance Report
under Section 7.2(a) hereof, for the fiscal quarter ending June 30, 2008, the
Applicable Margins and Applicable Fee Percentages shall be those set forth
under the Level I column of the pricing matrix attached to this Agreement as
Schedule 1.1. Thereafter, Applicable Margins and Applicable Fee Percentages
shall be based upon the quarterly financial statements and Covenant Compliance
Reports, subject to recalculation as provided in Section 10.4(a) above.
	 
	 	(c)	 	Notwithstanding the foregoing, however, if, prior to the
payment and discharge in full (in cash) of the Indebtedness and the termination
of any and all commitments hereunder, as a result of any restatement of or
adjustment to the financial statements of Company and any of its Subsidiaries
(relating to the current or any prior fiscal period) or for any other reason,
Agent determines that the Applicable Margin and/or the






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	 	 	 	Applicable Fee
Percentages as calculated by Company as of any applicable date of determination
were inaccurate in any respect and a proper calculation thereof would have
resulted in different pricing for any
fiscal period, then (x) if the proper calculation thereof would have
resulted in higher pricing for any such period, Company shall automatically
and retroactively be obligated to pay to Agent, promptly upon demand by
Agent or the Majority Banks, an amount equal to the excess of the amount of
interest and fees that should have been paid for such period over the amount
of interest and fees actually paid for such period and, if the current
fiscal period is affected thereby, the Applicable Margin and/or the
Applicable Fee Percentages for the current period shall be adjusted based on
such recalculation; and (y) if the proper calculation thereof would have
resulted in lower pricing for such period, Agent and Banks shall have no
obligation to recalculate such interest or fees or to repay any interest or
fees to the Company.





11. CHANGES IN LAW OR CIRCUMSTANCES; INCREASED COSTS




     11.1 Reimbursement of Prepayment Costs. If the Company makes any payment of principal
with respect to any Eurocurrency-based Advance on any day other than the last day of the Interest
Period applicable thereto (whether voluntarily, by acceleration, or otherwise), or if the Company
converts or refunds (or attempts to convert or refund) any such Advance on any day other than the
last day of the Interest Period applicable thereto; or if the Company fails to borrow, refund or
convert into any Eurocurrency-based Advance after notice has been given by the Company to Agent in
accordance with the terms hereof requesting such Advance, or if the Company fails to make any
payment of principal or interest in respect of a Eurocurrency-based Advance when due, the Company
shall reimburse Agent for itself and/or on behalf of any Bank, as the case may be, within ten (10)
Business Days of written demand therefor for any resulting loss, cost or expense incurred by Agent
and Banks, as the case may be as a result thereof, including, without limitation, any such loss,
cost or expense incurred in obtaining, liquidating, employing or redeploying deposits from third
parties, whether or not Agent and Banks, as the case may be, shall have funded or committed to fund
such Advance. Such amount payable by the Company to Agent for itself and/or on behalf of any Bank,
as the case may be, shall be deemed to equal an amount equal to the excess, if any, of (a) the
amount of interest which would have accrued on the amount so prepaid, or not so borrowed, refunded
or converted, for the period from the date of such prepayment or of such failure to borrow, refund
or convert, through the last day of the relevant Interest Period, at the applicable rate of
interest for said Advance(s) provided under this Agreement, over (b) the amount of interest (as
reasonably determined by Agent and Banks, as the case may be) which would have accrued to Agent and
Banks, as the case may be, on such amount by placing such amount on deposit for a comparable period
with leading banks in the interbank eurocurrency market. Calculation of any amounts payable to any
Bank under this paragraph shall be made as though such Bank shall have actually funded or committed
to fund the relevant Advance through the purchase of an underlying deposit in an amount equal to
the amount of such Advance and having a maturity comparable to the relevant Interest Period;
provided, however, that any Bank may fund any Eurocurrency-based Advance in any manner it deems fit
and the foregoing assumptions shall be utilized only for the purpose of the calculation of amounts
payable under this paragraph. Upon the written request of Company, Agent and



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Banks shall deliver to Company a certificate setting forth the basis for determining such
losses, costs and expenses, which certificate shall be rebuttably presumed correct, absent manifest
error.




     11.2 Eurocurrency Lending Office. For any Advance to which the Eurocurrency-based
Rate is applicable, if Agent or a Bank, as applicable, shall designate a Eurocurrency Lending
Office which maintains books separate from those of the rest of Agent or such Bank, Agent or such
Bank, as the case may be, shall have the option of maintaining and carrying the relevant Advance on
the books of such Eurocurrency Lending Office.



     11.3 Circumstances Affecting Eurocurrency-based Rate Availability. If with respect to
any Interest Period, Agent or the Majority Banks (after consultation with Agent) shall determine in
good faith that, by reason of circumstances affecting the foreign exchange and interbank markets
generally, deposits in eurodollars, in the applicable amounts are not being offered to the Agent or
such Banks for such Interest Period, then Agent shall forthwith give notice thereof to the Company.
Thereafter, until Agent notifies the Company that such circumstances no longer exist, (i) the
obligation of Banks to make Eurocurrency-based Advances, and the right of the Company to convert an
Advance to or refund an Advance as a Eurocurrency-based Advance, as the case may be, shall be
suspended, and (ii) effective upon the last day of each Interest Period related to any existing
Eurocurrency-based Advance, such Eurocurrency-based Advance shall automatically be converted into a
Prime-based Advance (without regard to satisfaction of any conditions to conversion contained
elsewhere herein).



     11.4 Laws Affecting Eurocurrency-based Advance Availability. If, after the date of
this Agreement, the introduction of, or any change in, any applicable law, rule or regulation or in
the interpretation or administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by any of the Banks (or any of their
respective Eurocurrency Lending Offices) with any request or directive (whether or not having the
force of law) of any such authority, shall make it unlawful or impossible for any of the Banks (or
any of their respective Eurocurrency Lending Offices) to honor its obligations hereunder to make or
maintain any Advance with interest at the Eurocurrency-based Rate, such Bank shall forthwith give
notice thereof to the Company and to Agent. Thereafter, (a) the obligations of the applicable Banks
to make Eurocurrency-based Advances and the right of the Company to convert an Advance into or
refund an Advance as a Eurocurrency-based Advance shall be suspended and thereafter the Company may
select as Applicable Interest Rates only those which remain available and which are permitted to be
selected hereunder, and (b) if any of the Banks may not lawfully continue to maintain an Advance to
the end of the then current Interest Period applicable thereto as a Eurocurrency-based Advance, the
applicable Advance shall immediately be converted to a Prime-based Advance and the Prime-based Rate
shall be applicable thereto for the remainder of such Interest Period. For purposes of this
Section, a change in law, rule, regulation, interpretation or administration shall include, without
limitation, any change made or which becomes effective on the basis of a law, rule, regulation,
interpretation or administration presently in force, the effective date of which change is delayed
by the terms of such law, rule, regulation, interpretation or administration.



     11.5 Increased Cost of Eurocurrency-based Advances. If the adoption after the date of
this Agreement of, or any change after the date of this Agreement in, any applicable law, rule or
regulation of or in the interpretation or administration thereof by any governmental authority,



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central bank or comparable agency charged with the interpretation or administration thereof, or
compliance by Agent or any of the Banks (or any of their respective Eurocurrency Lending Offices)
with any request or directive (whether or not having the force of law) made by any such authority,
central bank or comparable agency after the date hereof:




     (a) shall subject any of the Banks (or any of their respective Eurocurrency Lending Offices)
to any tax, duty or other charge with respect to any Advance or shall change the basis of taxation
of payments to any of the Banks (or any of their respective Eurocurrency Lending Offices) of the
principal of or interest on any Advance or any other amounts due under this Agreement in respect
thereof (except for changes in the rate of tax on the overall net income of any of the Banks or any
of their respective Eurocurrency Lending Offices); or



     (b) shall impose, modify or deem applicable any reserve (including, without limitation, any
imposed by the Board of Governors of the Federal Reserve System), special deposit or similar
requirement against assets of, deposits with or for the account of, or credit extended by, any of
the Banks (or any of their respective Eurocurrency Lending Offices) or shall impose on any of the
Banks (or any of their respective Eurocurrency Lending Offices) or the foreign exchange and
interbank markets any other condition affecting any Advance;


and the result of any of the foregoing is to increase the costs to any of the Banks of maintaining
any part of the Obligations as a Eurocurrency-based Advance or to reduce the amount of any sum
received or receivable by any of the Banks under this Agreement in respect of a Eurocurrency-based
Advance, then such Bank shall promptly notify Agent, and Agent (or such Bank, as aforesaid) shall
promptly notify the Company of such fact and demand compensation therefor in writing and, within
fifteen (15) days after such notice, the Company agrees to pay to such Bank such additional amount
or amounts as will compensate such Revolving Credit Bank or Banks for such increased cost or
reduction. Agent will promptly notify the Company of any event of which it has knowledge which will
entitle Revolving Credit Banks to compensation pursuant to this Section, or which will cause the
Company to incur additional liability under Article 11 hereof, provided that Agent shall incur no
liability whatsoever to the Banks or the Company in the event it fails to do so. A certificate of
Agent (or such Bank, if applicable) setting forth in reasonable detail the basis for determining
such additional amount or amounts necessary to compensate such Bank or Banks shall accompany such
written demand and shall be prepared in good faith and rebuttably presumed to be correct save for
manifest error.




     11.6 Capital Adequacy and Other Increased Costs. In the event that after the
Restatement Effective Date the adoption of or any change in any applicable law, treaty, rule or
regulation (whether domestic or foreign) now or hereafter in effect and whether or not presently
applicable to any Bank or Agent, or any interpretation or administration thereof by any
governmental authority charged with the interpretation or administration thereof, or compliance by
any Bank or Agent with any guideline, request or
directive of any such authority (whether or not having the force of law), including any risk
based capital guidelines, affects or would affect the amount of capital required to be maintained
by such Bank or Agent (or any corporation controlling such Bank or Agent) and such Bank or Agent,
as the case may be, determines that the amount of such capital is increased by or based upon the
existence of such Bank’s or Agent’s obligations or Advances hereunder and such increase has the
effect of reducing the rate of return on such Bank’s or Agent’s (or such controlling corporation’s)
capital as a consequence of such



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obligations or Advances hereunder to a level below that which such
Bank or Agent (or such controlling corporation) could have achieved but for such circumstances
(taking into consideration its policies with respect to capital adequacy) by an amount deemed by
such Bank or Agent to be material (collectively, “Increased Costs” then Agent or such Bank shall
notify the Company in writing, and thereafter the Company shall pay to such Bank or Agent, as the
case may be, within fifteen (15) days of written demand therefor from such Bank or Agent,
additional amounts sufficient to compensate such Bank or Agent (or such controlling corporation)
for any Increased Costs which such Bank or Agent reasonably determines to be allocable to the
existence of such Bank’s or Agent’s obligations or Advances hereunder; notwithstanding the
forgoing, however, the Company shall not be required to pay any Increased Costs under this Section
11.6 or under Sections 11.3, 11.5 or 3.4(b) for any period ending prior to the date that is 180
days prior to the making of a Bank’s initial request for such additional amounts unless the
applicable change in law or other event resulting in such Increased Costs is effective
retroactively to a date more than 180 days prior to the date of such request, in which case a
Bank’s request for such additional amounts relating to the period more than 180 days prior to the
making of the request must be given not more than 180 days after such Bank becomes aware of the
applicable change in law or other event resulting in such Increased Costs. A statement setting
forth the amount of such compensation, the methodology for the calculation and the calculation
thereof which shall also be prepared in good faith and in reasonable detail by such Bank or Agent,
as the case may be, shall be submitted by such Bank or by Agent to the Company, reasonably promptly
after becoming aware of any event described in this Section 11.6 and shall be rebuttably presumed
correct, absent manifest error in computation.




     11.7 Substitution of Banks. If (a) the obligation of any Bank to make
Eurocurrency-based Advances has been suspended pursuant to Section 11.3 or 11.4 or (b) any Bank has
demanded compensation under Section 3.4(b), 11.1 or 11.5, (in each case, an “Affected Bank”), then
the Company shall have the right (subject to Section 13.8 hereof), with the assistance of the
Agent, to seek a substitute Bank or Banks (which may be one or more of the Banks (the “Purchasing
Bank” or “Purchasing Banks”) to purchase the Advances of the Revolving Credit and/or Swing Line, as
the case may be and assume the commitments (including without limitation its participations in
Swing Line Advances and Letters of Credit) under this Agreement of such Affected Bank. The Affected
Bank shall be obligated to sell its Advances of the Revolving Credit and/or Swing Line and assign
its commitments to such Purchasing Bank or Purchasing Banks within fifteen days after receiving
notice from Company requiring it to do so, at an aggregate price equal to the outstanding principal
amount thereof, plus unpaid interest accrued thereon up to but excluding the date of the sale. In
connection with any such sale, and as a condition thereof, Company shall pay to the Affected Bank
all fees accrued for its account hereunder to but excluding the date of such sale, plus, if
demanded by the Affected Bank within ten Business Days after such sale, (i)
the amount of any compensation which would be due to the Affected Bank under Section 11.1 if
the Company had prepaid the outstanding Eurocurrency-based Advances of the Affected Bank on the
date of such sale and (ii) any additional compensation accrued for its account under Sections
3.4(c) and 11.5 to but excluding said date. Upon such sale, the Purchasing Bank
or Purchasing Banks shall assume the Affected Bank’s commitment, and the Affected Bank shall be released from its
obligations hereunder to a corresponding extent. If any Purchasing Bank is not already one of the
Banks, the Affected Bank, as assignor, such Purchasing Bank, as assignee, Company and the Agent,
shall enter into an Assignment Agreement pursuant to Section 13.8 hereof, whereupon such Purchasing
Bank



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shall be a Bank party to this Agreement, shall be deemed to be an assignee hereunder and shall
have all the rights and obligations of a Bank with a Revolving Credit Percentage equal to its
ratable share of the then applicable Revolving Credit Aggregate Commitment. In connection with any
assignment pursuant to this Section 11.7, the Company or the Purchasing Bank shall pay to the Agent
the administrative fee for processing such assignment referred to in Section 13.8.




     11.8 Right of Banks to Fund through Branches and Affiliates. Each Bank (including
without limitation the Swing Line Bank) may, if it so elects, fulfill its commitment as to any
Advance hereunder by designating a branch or Affiliate of such Bank to make such Advance; provided
that (a) such Bank shall remain solely responsible for the performances of its obligations
hereunder and (b) no such designation shall result in any material increased costs to the Company.



     11.9 Duty to Mitigate. The Agent, the Issuing Bank and each Bank seeking payment
pursuant to this Section 11 or under Section 3.4(b) of this Agreement shall use reasonable efforts
and take all reasonable actions to avoid the cause of the payment and to minimize the amount
thereof, unless such efforts and actions would result in any material increased costs to Agent or
such Bank. Each Bank agrees that it will not seek compensation or reimbursement provided for in
this Section 11 or under Section 3.4(b) unless the Agent, the Issuing Bank and such Bank, as the
case may be, as a matter of policy intends generally to seek comparable compensation or
reimbursement from other borrowers similarly situated and similarly documented financial
accommodations.



12. AGENT




     12.1 Appointment of Agent. Each Bank and the holder of each Note (if issued)
irrevocably appoints and authorizes the Agent to act on behalf of such Bank or holder under this
Agreement and the other Loan Documents and to exercise such powers hereunder and thereunder as are
specifically delegated to Agent by the terms hereof and thereof, together with such powers as may
be reasonably incidental thereto, including without limitation the power to execute or authorize
the execution of financing or similar statements or notices, and other documents. In performing its
functions and duties under this Agreement, the Agent shall act solely as agent of the Banks 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. Each Bank agrees (which agreement shall survive any
termination of this Agreement) to reimburse Agent for all reasonable out-of-pocket expenses
(including house and outside attorneys’ fees and disbursements) incurred by Agent hereunder or in
connection herewith or with an Event of Default or in enforcing the obligations of Company under
this Agreement or the other Loan Documents or any other instrument executed pursuant hereto, and
for which Agent is not reimbursed by Company, pro rata according to such Bank’s Percentage, but
excluding any such expense resulting from Agent’s gross negligence or willful misconduct. Any such
amounts so paid by the Banks shall constitute additional Obligations. Agent shall not be required
to take any action under the Loan Documents, or to prosecute or defend any suit in respect of the
Loan Documents, unless indemnified to its satisfaction by the Banks against loss, costs, liability
and expense (excluding liability resulting from its gross negligence or willful misconduct). If any
indemnity furnished to Agent shall



84









 




become impaired, it may call for additional indemnity and cease
to do the acts indemnified against until such additional indemnity is given.




     12.2 Deposit Account with Agent. Company hereby authorizes Agent, in Agent’s sole
discretion, upon notice to Company to charge its general deposit account(s), if any, maintained
with Agent for the amount of any principal, interest, or other amounts or costs due under this
Agreement when the same become due and payable under the terms of this Agreement or the Notes.



     12.3 Scope of Agent’s Duties. The Agent shall have no duties or responsibilities
except those expressly set forth herein, and shall not, by reason of this Agreement or otherwise,
have a fiduciary relationship with any Bank (and no implied covenants or other obligations shall be
read into this Agreement against the Agent). None of Agent, its Affiliates nor any of their
respective directors, officers, employees or agents shall be liable to any Bank for any action
taken or omitted to be taken by it or them under this Agreement or any document executed pursuant
hereto, or in connection herewith or therewith with the consent or at the request of the Majority
Banks (or all of the Banks for those acts requiring consent of all of the Banks) (except for its or
their own willful misconduct or gross negligence), nor be responsible for or have any duties to
ascertain, inquire into or verify (a) any recitals or warranties made by the Company, or any
Subsidiary or Affiliate of the Company, or any officer thereof contained herein or therein, (b) the
effectiveness, enforceability, validity or due execution of this Agreement or any document executed
pursuant hereto or any security thereunder, (c) the performance by Company of its obligations
hereunder or thereunder, or (d) the satisfaction of any condition hereunder or thereunder,
including without limitation the making of any Advance or the issuance of any Letter of Credit.
Agent and its Affiliates shall be entitled to rely upon any certificate, notice, document or other
communication (including any cable, telegraph, telex, facsimile transmission or oral communication)
believed by it to be genuine and correct and to have been sent or given by or on behalf of a proper
person. Agent may treat the payee of any Note as the holder thereof. Agent may employ agents and
may consult with legal counsel (who may be counsel for the Company), independent public accountants
and other experts selected by it and shall not be liable to the Banks (except as to money or
property received by them or their authorized agents), for the negligence or misconduct of any such
agent selected by it with reasonable care or for any action taken or
omitted to be taken by it in good faith in accordance with the advice of such counsel,
accountants or experts.



     12.4 Successor Agent. Agent may resign as such at any time upon at least 30 days prior
notice to Company and all Banks. If Agent at any time shall resign or if the office of Agent shall
become vacant for any other reason, Majority Banks shall, by written instrument, appoint successor
agent(s) satisfactory to such Majority Banks, and, so long as no Default or Event of Default has
occurred and is continuing, to Company. Such successor agent shall thereupon become the Agent
hereunder, as applicable, and shall be entitled to receive from the prior Agent such documents of
transfer and assignment as such successor Agent may reasonably request. Any such successor Agent
shall be a commercial bank organized under the laws of the United States or any state thereof and
shall have a combined capital and surplus of at least $500,000,000. If a successor is not so
appointed or does not accept such appointment before the resigning Agent’s resignation becomes
effective, the resigning Agent may appoint a temporary successor to act until such appointment by
the Majority Banks and, if applicable, the Company is



85









 




made and accepted or if no such temporary
successor is appointed as provided above by the resigning Agent, the Majority Banks shall
thereafter perform all of the duties of the resigning Agent hereunder until such appointment by the
Majority Banks and, if applicable, the Company is made and accepted. Such successor Agent shall
succeed to all of the rights and obligations of the resigning Agent as if originally named. The
resigning Agent shall duly assign, transfer and deliver to such successor Agent all moneys at the
time held by the resigning Agent hereunder after deducting therefrom its expenses for which it is
entitled to be reimbursed. Upon such succession of any such successor Agent, the resigning Agent
shall be discharged from its duties and obligations, in its capacity as Agent, hereunder, except
for its gross negligence or willful misconduct arising prior to its resignation hereunder, and the
provisions of this Article 12 shall continue in effect for the benefit of the resigning Agent in
respect of any actions taken or omitted to be taken by it while it was acting as Agent.




     12.5 Credit Decisions. Each Bank acknowledges that it has, independently of Agent and
each other Bank and based on the financial statements of Company and such other documents,
information and investigations as it has deemed appropriate, made its own credit decision to extend
credit hereunder from time to time. Each Bank also acknowledges that it will, independently of
Agent and each other Bank and based on such other documents, information and investigations as it
shall deem appropriate at any time, continue to make its own credit decisions as to exercising or
not exercising from time to time any rights and privileges available to it under this Agreement or
any document executed pursuant hereto.



     12.6 Authority of Agent to Enforce This Agreement. Each Bank, subject to the terms and
conditions of this Agreement, authorizes the Agent with full power and authority as
attorney-in-fact to institute and maintain actions, suits or proceedings for the collection and
enforcement of any Obligations outstanding under this Agreement or any other Loan Document and to
file such proofs of debt or other documents as
may be necessary to have the claims of the Banks allowed in any proceeding relative to
Company, or any of its Subsidiaries, or their respective creditors or affecting their respective
properties, and to take such other actions which Agent considers to be necessary or desirable for
the protection, collection and enforcement of the Notes, this Agreement or the other Loan
Documents.



     12.7 Indemnification of Agent. The Banks agree (which agreement shall survive the
expiration or termination of this Agreement) to indemnify the Agent and its Affiliates (to the
extent not reimbursed by Company, but without limiting any obligation of Company to make such
reimbursement), ratably according to their respective Percentages, from and against any and all
claims, damages, losses, liabilities, costs or expenses of any kind or nature whatsoever
(including, without limitation, reasonable fees and disbursements of counsel) which may be imposed
on, incurred by, or asserted against the Agent and its Affiliates in any way relating to or arising
out of this Agreement, any of the other Loan Documents or the transactions contemplated hereby or
any action taken or omitted by the Agent and its Affiliates under this Agreement or any of the Loan
Documents; provided, however, that no Bank or Company shall be liable for any portion of such
claims, damages, losses, liabilities, costs or expenses resulting from the Agent’s or its
Affiliates’ gross negligence or willful misconduct. Without limitation of the foregoing, each Bank
agrees to reimburse the Agent and its Affiliates promptly upon demand for its ratable share of any
reasonable out-of-pocket expenses (including, without limitation, reasonable fees and expenses of
counsel) incurred by the Agent and its Affiliates in connection with the



86









 




preparation, execution,
delivery, administration, modification, amendment or enforcement (whether through negotiations,
legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement or any of the other Loan Documents, to the extent that the Agent and its Affiliates
is not reimbursed for such expenses by Company, but without limiting the obligation of Company to
make such reimbursement. Each Bank agrees to reimburse the Agent and its Affiliates promptly upon
demand for its ratable share of any amounts owing to the Agent and its Affiliates by the Banks
pursuant to this Section, provided that, if the Agent or its Affiliates is subsequently reimbursed
by the Company for such amounts, it shall refund to the Banks on a pro rata basis the amount of any
excess reimbursement. If the indemnity furnished to the Agent and its Affiliates under this Section
shall, in the judgment of the Agent, be insufficient or become impaired, the Agent may call for
additional indemnity from the Banks and cease, or not commence, to take any action until such
additional indemnity is furnished. Any amounts paid by the Banks hereunder to the Agent or its
Affiliates shall be deemed to constitute part of the Obligations.




     12.8 Knowledge of Default. It is expressly understood and agreed that the Agent shall
be entitled to assume that no Default or Event of Default has occurred and is continuing, unless
the officers of the Agent immediately responsible for matters concerning this Agreement shall have
been notified in a writing specifying such Default or Event of Default and stating that such notice
is a “notice of default” by a Bank or by Company. Upon receiving such a notice, the Agent shall
promptly notify each Bank of such Default or Event of Default and provide each Bank with a copy of
such notice and, shall endeavor to provide such notice to the Banks within three (3) Business Days
(but without any liability whatsoever in the event of its failure to do so). Agent shall also
furnish
the Banks, promptly upon receipt, with copies of all other notices or other information
required to be provided by Company hereunder.



     12.9 Agent’s Authorization; Action by Banks. Except as otherwise expressly provided
herein, whenever the Agent is authorized and empowered hereunder on behalf of the Banks to give any
approval or consent, or to make any request, or to take any other action on behalf of the Banks
(including without limitation the exercise of any right or remedy hereunder or under the other Loan
Documents), the Agent shall be required to give such approval or consent, or to make such request
or to take such other action only when so requested in writing by the Majority Banks or the Banks,
as applicable hereunder. Action that may be taken by the Majority Banks, any other specified
Percentage of the Banks or all of the Banks, as the case may be (as provided for hereunder) may be
taken (i) pursuant to a vote of the requisite percentages of the Banks as required hereunder at a
meeting (which may be held by telephone conference call), provided that Agent exercises good faith,
diligent efforts to give all of the Banks reasonable advance notice of the meeting, or (ii)
pursuant to the written consent of the requisite percentages of the Banks as required hereunder,
provided that all of the Banks are given reasonable advance notice of the requests for such
consent.



     12.10 Enforcement Actions by the Agent. Except as otherwise expressly provided under
this Agreement or in any of the other Loan Documents and subject to the terms hereof, Agent will
take such action, assert such rights and pursue such remedies under this Agreement and the other
Loan Documents as the Majority Banks or all of the Banks, as the case may be (as provided for
hereunder), shall direct; provided, however, that the Agent shall not be required to act or omit to
act if, in the judgment of the Agent, such action or omission may expose the Agent



87









 




to personal
liability or is contrary to this Agreement, any of the Loan Documents or applicable law. Except as
expressly provided above or elsewhere in this Agreement or the other Loan Documents, no Bank (other
than the Agent, acting in its capacity as agent) shall be entitled to take any enforcement action
of any kind under any of the Loan Documents.




     12.11 Collateral Matters.



     (a) The Agent is authorized on behalf of all the Banks, without the necessity of any notice to
or further consent from the Banks, from time to time to take any action with respect to any
Collateral or the Collateral Documents which may be necessary to perfect and maintain a perfected
security interest in and Liens upon the Collateral granted pursuant to the Loan Documents.



     (b) The Banks irrevocably authorize the Agent, at its option and in its discretion, to release
any Lien granted to or held by the Agent upon any Collateral (i) upon termination of the Revolving
Credit Aggregate Commitment, payment in full of all Obligations payable under this Agreement and
under any other Loan Document and the return to Issuing Bank for cancellation of all outstanding
Letters of Credit; (ii) constituting property sold or to be sold or disposed of as part of or in
connection with any disposition expressly permitted hereunder; (iii) constituting property in which
a Loan Party owned no interest at the time the Lien was granted or at any time
thereafter; (iv) if approved, authorized or ratified in writing by the Majority Banks, or all
the Banks, as the case may be, as provided in Section 13.10 or (v) to the extent expressly
permitted by the terms of any Collateral Document. Upon request by the Agent at any time, the
Banks will confirm in writing the Agent’s authority to release particular types or items of
Collateral pursuant to this Section 12.11(b).



     12.12 Agent in its Individual Capacities. Comerica Bank and its Affiliates and its
successors and assigns, shall have the same rights and powers hereunder as any other Bank and may
exercise or refrain from exercising the same as though such Bank were not the Agent. Comerica Bank
and its Affiliates and their respective successors and assigns may (without having to account
therefor to any Bank) accept deposits from, lend money to, and generally engage in any kind of
banking, trust, financial advisory or other business with Company (or its Subsidiaries) as if such
Bank were not acting as Agent hereunder, and may accept fees and other consideration therefor
without having to account for the same to the Banks.



     12.13 Agent’s Fees. Until the Obligations have been repaid and discharged in full and
no commitment to fund any loan hereunder is outstanding, the Company shall pay to the Agent, as
applicable, an agency fee(s) set forth (or to be set forth from time to time) in the applicable Fee
Letter on the terms set forth therein. The Agent’s Fees described in this Section 12.13 shall not
be refundable under any circumstances.



     12.14 Co-Agent or Other Titles. Any Bank identified on the facing page or signature
page of this Agreement or in any amendment hereto or as designated with consent of the Agent in any
assignment agreement as Lead Arranger, Documentation Agent, Syndications Agent or any similar
titles, shall not have any right, power, obligation, liability, responsibility or duty under this
Agreement as a result of such title other than those applicable to all Banks as such. Without
limiting the foregoing, the Banks so identified shall not have or be deemed to have any



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fiduciary
relationship with any Bank as a result of such title. Each Bank acknowledges that it has not
relied, and will not rely, on the Bank so identified in deciding to enter into this Agreement or in
taking or not taking action hereunder.




     12.15 No Reliance on Agent’s Customer Identification Program. (a) Each Bank
acknowledges and agrees that neither such Bank, nor any of its Affiliates, participants or
assignees, may rely on the Agent to carry out such Bank’s, Affiliate’s, participant’s or assignee’s
customer identification program, or other obligations required or imposed under or pursuant to the
USA Patriot Act or the regulations thereunder, including the regulations contained in 31 CFR
103.121 (as hereafter amended or replaced, the “CIP Regulations”), or any other Anti-Terrorism Law,
including any programs involving any of the following items relating to or in connection with
Borrowers or any of their Subsidiaries, any of their respective Affiliates or agents, the Loan
Documents or the transactions hereunder: (i) any identify verification procedures, (ii) any record
keeping, (iii) any comparisons with government
lists, (iv) any customer notices or (v) any other procedures required under the CIP
Regulations or such other laws.



     (b) Each Bank or assignee or participant of a Bank that is not organized under the laws of the
United States or a state thereof (and is not excepted from the certification requirement contained
in Section 313 of the USA Patriot Act and the applicable regulations because it is both (i) an
affiliate of a depository institution or foreign bank that maintains a physical presence in the
United States or foreign country, and (ii) subject to provision by a banking authority regulating
such affiliated depository institution or foreign bank) shall deliver to the Agent the
certification, or, if applicable, recertification, certifying that such Bank is not a “shell” and
certifying to other matters as required by Section 313 of the USA Patriot Act and the applicable
regulations: (x) within 10 days after the Restatement Effective Date, and (y) at such other times
as are required under the USA Patriot Act.



13. MISCELLANEOUS




     13.1 Accounting Principles. Where the character or amount of any asset or liability
or item of income or expense is required to be determined or any consolidation or other accounting
computation is required to be made for the purposes of this Agreement, it shall be done, unless
otherwise specified herein, in accordance with GAAP. Furthermore, all financial statements required
to be delivered hereunder, subject to year-end audit adjustments thereto and the omission of
footnote disclosure in the case of unaudited statements, shall be prepared in accordance with GAAP.



     13.2 Consent to Jurisdiction. Company, Agent and Banks hereby irrevocably submit to
the non-exclusive jurisdiction of any United States Federal Court or Michigan state court sitting
in Detroit, Michigan in any action or proceeding arising out of or relating to this Agreement or
any of the Loan Documents and Company, Agent and Banks hereby irrevocably agree that all claims in
respect of such action or proceeding may be heard and determined in any such United States Federal
Court or Michigan state court. Company irrevocably consent to the service of any and all process in
any such action or proceeding brought in any court in or of the State of Michigan by the delivery
of copies of such process to Company at its address specified on the signature page hereto or by
certified mail directed to such address or such other address as may be designated by Company in a
notice to the other parties that complies as to delivery with



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the terms of Section 13.6. Nothing in
this Section shall affect the right of the Banks and the Agent to serve process in any other manner
permitted by law or limit the right of the Banks or the Agent (or any of them) to bring any such
action or proceeding against Company or any Subsidiary or any of its or their property in the
courts with subject matter jurisdiction of any other jurisdiction. Company hereby irrevocably
waives any objection to the laying of venue of any such suit or proceeding in the above described
courts.




     13.3 Law of Michigan. This Agreement and the Notes shall be governed by and construed and enforced in accordance
with the laws of the State of Michigan (without regard to its conflict of laws provisions).
Whenever possible each provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.



     13.4 Interest. In the event the obligation of Company to pay interest on the
principal balance of the Notes or on any other amounts outstanding hereunder or under any other
Loan Document is or becomes in excess of the maximum interest rate which Company is permitted by
law to contract or agree to pay (“Maximum Lawful Rate”), giving due consideration to the execution
date of this Agreement, then, in that event, the rate of interest applicable with respect to such
Bank’s applicable Percentages shall be deemed to be immediately reduced to such maximum rate and
all previous payments in excess of the maximum rate shall be deemed to have been payments in
reduction of principal and not of interest.



     13.5 Closing Costs and Other Costs; Indemnification. (a) Company agrees to pay, or
reimburse the Agent for payment of, within five Business Days of demand therefor (except for
closing costs which shall be payable on the Restatement Effective Date) (i) all reasonable closing
costs and expenses, including, by way of description and not limitation, house and outside attorney
fees (without duplication of fees and expenses for the same services) and appraisal and accounting
fees, and lien search fees incurred by Agent in connection with the commitment, consummation and
closing of the loans contemplated hereby or in connection with the administration of this Agreement
or any amendment, refinancing or restructuring of the credit arrangements provided under this
Agreement, (ii) all stamp and other taxes (excluding income, franchise and other similar taxes) and
fees payable or determined to be payable in connection with the execution, delivery, filing,
recording or amendment of this Agreement and the Loan Documents and the consummation of the
transactions contemplated hereby, and any and all liabilities with respect to or resulting from any
delay in paying or omitting to pay such taxes or fees, and (iii) all reasonable costs and expenses
of the Agent or any of the Banks (including reasonable fees and expenses of outside counsel (but
without duplication of fees and expenses for the same services) in connection with any action or
proceeding relating to a court order, injunction or other process or decree restraining or seeking
to restrain the Agent or any of the Banks from paying any amount under, or otherwise relating in
any way to, any Letter of Credit and any and all reasonable costs and expenses which any of them
may incur relative to any payment under any Letter of Credit. At Agent’s option, all of said
amounts required to be paid by Company, if not paid when due, may be charged by Agent as a
Prime-based Advance against the Obligations.



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     (b) Company agrees to indemnify and hold Agent and each of the Banks harmless from all loss,
cost, damage, liability or expenses, including reasonable house and outside attorneys’ fees and
disbursements (but without duplication of fees and expenses for the same services), incurred by
Agent and the Banks by reason of an Event of Default, or enforcing the
obligations of Company or any Subsidiary under this Agreement or any of the other Loan
Documents or in the prosecution or defense of any action or proceeding concerning any matter
growing out of or connected with this Agreement or any of the Loan Documents, excluding, however,
any loss, cost, damage, liability or expenses arising solely as a result of the gross negligence or
willful misconduct of the party seeking to be indemnified under this Section 13.5(b).



     (c) Company agrees to defend, indemnify and hold harmless Agent and each of the Banks, and
their respective employees, agents, officers and directors from and against any and all claims,
demands, penalties, fines, liabilities, settlements, damages, costs or expenses of whatever kind or
nature (including without limitation, reasonable attorneys and consultants fees, investigation and
laboratory fees, environmental studies required by Agent or any Bank in connection with the
violation of Hazardous Material Laws, court costs and litigation expenses, excluding however, those
arising solely as a result of the gross negligence or willful misconduct of the Agent or of the
Person seeking indemnification, as the case may be) arising out of or related to (i) the presence,
use, disposal, release or threatened release of any Hazardous Materials on, from or affecting any
premises owned or occupied by Company or any of their respective Subsidiaries in violation of or
non-compliance with applicable Hazardous Material Laws, (ii) any personal injury (including
wrongful death) or property damage (real or personal) arising out of or related to such Hazardous
Materials, (iii) any lawsuit or other proceeding brought or threatened, settlement reached or
governmental order or decree relating to such Hazardous Materials, (iv) if any Event of Default
exists and remains uncured, the cost of remediation or monitoring of all Hazardous Materials in
violation of or non-compliance with applicable Hazardous Material Laws from all or any portion of
any premises owned by Company or their respective Subsidiaries, (v) if any Event of Default exists
and remains uncured, complying or coming into compliance with all Hazardous Material Laws and/or
(vi) if any Event of Default exists and remains uncured, any violation of Hazardous Material Laws.
The obligations of Company under this Section 13.5(c) shall be in addition to any and all other
obligations and liabilities the Company may have to Agent or any of the Banks at common law or
pursuant to any other agreement.



     13.6 Notices (a) Except as expressly provided otherwise in this Agreement (and except
as provided in clause (b) below), all notices and other communications provided to any party hereto
under this Agreement or any other Loan Document shall be in writing and shall be given by personal
delivery, by mail, by reputable overnight courier or by facsimile and addressed or delivered to it
at its address set forth on Schedule 13.6 or at such other address as may be designated by such
party in a notice to the other parties that complies as to delivery with the terms of this Section
13.6 or posted to an E-System set up by or at the direction of Agent (as set forth below). Any
notice, if personally delivered or if mailed and properly addressed with postage prepaid and sent
by registered or certified mail, shall be deemed given when received or when delivery is refused;
any notice, if given to a reputable overnight courier and properly addressed, shall be deemed given
two (2) Business Days after the date on which it was sent, unless it is actually received sooner by
the named addressee; and any notice, if transmitted by facsimile, shall be deemed given when
received. The Agent may, but, except as specifically



91









 




provided herein, shall not be required to,
take any action on the basis of any notice given to it by telephone, but the giver of any such
notice shall promptly confirm such notice in writing, by facsimile, and such notice will
not be deemed to have been received until such confirmation is deemed received in accordance
with the provisions of this Section set forth above. If such telephonic notice conflicts with any
such confirmation, the terms of such telephonic notice shall control. Any notice given by the Agent
or any Bank to the Company shall be deemed to be a notice to all of the Company’s Subsidiaries.




     (b) Notices and other communications provided to the Agent and the Banks party hereto under
this Agreement or any other Loan Document may be delivered or furnished by electronic communication
(including email and Internet or intranet websites) pursuant to procedures approved by the Agent.
The Agent or the Company may, in its discretion, agree to accept notices and other communications
to it hereunder by electronic communications (including email and any E-System) pursuant to
procedures approved by it. Unless otherwise agreed to in a writing by and among the parties to a
particular communication, (i) notices and other communications sent to an email address shall be
deemed received upon the sender’s receipt of an acknowledgment from the intended recipient (such as
by the “return receipt requested” function, return email, or other written acknowledgment) and (ii)
notices and other communications posted to any E-System shall be deemed received upon the deemed
receipt by the intended recipient at its email address as described in the foregoing clause (i) of
notification that such notice or other communication is available and identifying the website
address therefore.



     13.7 Further Action. Company, from time to time, upon written request of Agent will
make, execute, acknowledge and deliver or cause to be made, executed, acknowledged and delivered,
all such further and additional instruments, and take all such further action as may reasonably be
required to carry out the intent and purpose of this Agreement or the Loan Documents, and to
provide for Advances under and payment of the Notes, according to the intent and purpose herein and
therein expressed.



     13.8 Successors and Assigns; Participations; Assignments.



     (a) This Agreement shall be binding upon and shall inure to the benefit of Company and the
Banks and their respective successors and assigns.



     (b) The foregoing shall not authorize any assignment by Company of its rights or duties
hereunder, and, except as otherwise provided herein, no such assignment shall be made (or
effective) without the prior written approval of the Banks.



     (c) The Company and Agent acknowledge that each of the Banks may at any time and from time to
time, subject to the terms and conditions hereof, assign or grant participations in such Bank’s
rights and obligations hereunder (on a pro rata basis only based on the assigning Bank’s Percentage
of each of the Revolving Credit and under the other Loan Documents to any commercial bank, savings
and loan association, insurance company, pension fund, mutual fund, commercial finance company or
other similar institution, the identity of which institution is approved by Company and Agent, such
approval not to be unreasonably withheld or delayed; provided, however, that (i) the approval of
Company shall not be required upon the occurrence




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and during the continuance of an Event of Default, (ii) the approval of Company and Agent
shall not be required for any such sale, transfer, assignment or participation to the Affiliate of
an assigning Bank, any other Bank or any Federal Reserve Bank and (iii) no assignment shall be made
or participation granted to an entity which is a competitor of Company and their Subsidiaries
without the consent of the Company, which consent may be withheld in the sole discretion of
Company. The Company authorizes each Bank to disclose to any bona fide prospective assignee or
participant once approved by Company and Agent, any and all financial information in such Bank’s
possession concerning the Company which has been delivered to such Bank pursuant to this Agreement;
provided that each such prospective participant shall execute a confidentiality agreement
consistent with the terms of Section 13.11 hereof.




     (d) Each assignment by a Bank of all or any portion of its rights and obligations hereunder
and under the other Loan Documents, which assignments shall be on a pro rata basis, shall be made
pursuant to an Assignment Agreement substantially (as determined by Agent) in the form attached
hereto as Exhibit I (with appropriate insertions acceptable to Agent) (provided however
that such Bank need not deliver an Assignment Agreement in connection with assignments to such
Bank’s Affiliates or to a Federal Reserve Bank) and shall be subject to the terms and conditions
hereof, and to the following restrictions:




	 	(i)	 	each assignment shall be in a minimum amount of the lesser of
(x) Five Million Dollars ($5,000,000) or such lesser amount as the Agent shall
agree and (y) the entire remaining amount of assigning Bank’s aggregate
interest in the Revolving Credit (and participations in any outstanding Letters
of Credit); provided however that, after giving effect to such assignment, in
no event shall the entire remaining amount (if any) of assigning Bank’s
aggregate interest in the Revolving Credit (and participations in any
outstanding Letters of Credit) be less than $5,000,000; and
	 
	 	(ii)	 	no assignment shall be effective unless Agent has received from
the assignee (or from the assigning Bank) an assignment fee of $3,500 for each
such assignment and such assignment is accompanied by the relevant tax forms
required under Section 13.12 hereof.




In connection with any assignment, Company and Agent shall be entitled to continue to deal solely
and directly with the assigning Bank in connection with the interest so assigned until (x) the
Agent shall have received a notice of assignment duly executed by the assigning Bank and an
Assignment Agreement (with respect thereto) duly executed by the assigning Bank and each assignee;
and (y) the assigning Bank shall have delivered to the Agent the original of each Note held by the
assigning Bank under this Agreement. From and after the date on which the Agent shall notify
Company and the assigning Bank that the foregoing conditions shall have been satisfied and all
consents (if any) required shall have been given, the assignee thereunder shall be deemed to be a
party to this Agreement. To the extent that rights and obligations hereunder shall have been
assigned to such assignee as provided in such notice of assignment (and Assignment Agreement), such
assignee shall have the rights and obligations of a Bank under this Agreement and the other Loan
Documents (including without limitation the right to receive fees payable hereunder in respect of
the period following such assignment). In addition, the assigning Bank,


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to the extent that rights and obligations hereunder shall have been assigned by it as provided in
such notice of assignment (and Assignment Agreement), but not otherwise, shall relinquish its
rights and be released from its obligations under this Agreement and the other Loan Documents.



Within five (5) Business Days following Company’s receipt of notice from the Agent that Agent has
accepted and executed a notice of assignment and the duly executed Assignment Agreement and
assuming the Company has consented to such assignment (if their consent is required), Company
shall, to the extent applicable, and if requested by the assignee Bank, execute and deliver to the
Agent in exchange for any surrendered Note, new Note(s) payable to the order of the assignee in an
amount equal to the amount assigned to it pursuant to such notice of assignment (and Assignment
Agreement), and with respect to the portion of the Obligations retained by the assigning Bank, to
the extent applicable, new Note(s) payable to the order of the assigning Bank in an amount equal to
the amount retained by such Bank hereunder. Agent, the Banks and the Company acknowledge and agree
that any such new Note(s) shall be given in renewal and replacement of the surrendered Notes and
shall not effect or constitute a novation or discharge of the Obligations evidenced by any
surrendered Note, and each such new Note may contain a provision confirming such agreement. In
addition, promptly following receipt of such Notes, Agent shall prepare and distribute to Company
and the assigning Bank and the assignee Bank a revised Schedule 1.2 to this Agreement setting
forth the applicable new Percentages of the Banks (including the assignee Bank), taking into
account such assignment.




     (e) Each Bank agrees that any participation agreement permitted hereunder shall comply with
all applicable laws and shall be subject to the following restrictions (which shall be set forth in
the applicable Participation Agreement):




	 	(i)	 	such Bank shall remain the holder of its Notes hereunder (if
such Notes are issued), notwithstanding any such participation;
	 
	 	(ii)	 	a participant shall not reassign or transfer, or grant any
sub-participations in its participation interest hereunder or any part thereof;
and
	 
	 	(iii)	 	such Bank shall retain the sole right and responsibility to
enforce the obligations of the Company relating to the Notes and the other Loan
Documents, including, without limitation, the right to proceed against any
Guarantors, or cause Agent to do so (subject to the terms and conditions
hereof), and the right to approve any amendment, modification or waiver of any
provision of this Agreement without the consent of the participant (other than
a participant which is an Affiliate of such Bank), except for those matters
covered by Section 13.10(a) through (e) and (h) hereof (provided that a
participant may exercise approval rights over such matters only on an indirect
basis, acting through such Bank, and Company, Agent and the other Banks may
continue to deal directly with such Bank in connection with such Bank’s rights
and duties hereunder). Notwithstanding the foregoing, however, in the case of
any participation granted by any Bank hereunder, the participant shall not have
any rights under this Agreement or any of the other Loan Documents (the
participant’s rights against such Bank in respect of such participation to be




94









 






	 	 	 	those set forth in the agreement executed by such Bank in favor of the
participant relating thereto) and all amounts payable by the Company
hereunder shall be determined as if such Bank had not sold such
participation, provided, however, that such participant shall be entitled to
the benefits of this Section 13.8(e) with respect to rights of setoff under
Section 9.6 and the benefit of Section 11 hereof, and provided further,
however, that no participant shall be entitled to receive any greater amount
pursuant to such Sections than the issuing Bank would have been entitled to
receive in respect of the amount of the participation transferred by such
issuing Bank to such participant had no such transfer occurred.





     (f) The Agent shall maintain at its principal office a copy of each Assignment Agreement
delivered to it and a register (the “Register”) for the recordation of the names and addresses of
the Banks, the Percentages of such Banks and the principal amount of each type of Advance owing to
each such Bank from time to time. The entries in the Register shall be conclusive evidence, absent
manifest error, and the Company, the Agent, and the Banks may treat each Person whose name is
recorded in the Register as the owner of the Advances recorded therein for all purposes of this
Agreement. The Register shall be available for inspection by Company or any Bank upon reasonable
notice to the Agent and a copy of such information shall be provided to any such party on their
prior written request. The Agent shall give prompt written notice to the Company of the making of
any entry in the Register or any change in such entry.



     (g) Nothing in this Agreement, the Notes or the other Loan Documents, expressed or implied, is
intended to or shall confer on any Person other than the respective parties hereto and thereto and
their successors and assignees and participants permitted hereunder and thereunder any benefit or
any legal or equitable right, remedy or other claim under this Agreement, the Notes or the other
Loan Documents.



     13.9 Counterparts. This Agreement may be executed in several counterparts, and each executed copy shall
constitute an original instrument, but such counterparts shall together constitute but one and the
same instrument.



     13.10 Amendment and Waiver. No amendment or waiver of any provision of this Agreement or any other Loan Document, nor
consent to any departure by Company or any Guarantor therefrom, shall in any event be effective
unless the same shall be in writing and signed by the Majority Banks (or by the Agent at the
written request of the Majority Banks) or, if this Agreement expressly so requires with respect to
the subject matter thereof, by all Banks (and, with respect to any amendments to this Agreement or
the other Loan Documents, by Company or the Guarantors which are signatories thereto), and then
such waiver or consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, (X) that no amendment, waiver or consent shall increase
the Percentage or the stated commitment amounts applicable to any Bank unless approved, in writing,
by the affected Bank and (Y) that no amendment, waiver or consent shall, unless in writing and
signed by all the Banks, do any of the
following: (a) except as specifically contemplated by this Agreement, increase the maximum
aggregate principal amounts of the Revolving Credit Aggregate Commitment, (b) reduce the principal
of, or interest on, any outstanding Obligations or any Fees or other amounts payable hereunder, (c)
postpone any date fixed for any payment of principal of,



95









 







or interest on, any outstanding
Obligations or any Fees or other amounts payable hereunder, (d) waive any Event of Default
specified in Section 9.1(a) hereof (e) except as expressly permitted hereunder or under the
Collateral Documents, release or defer the granting or perfecting of a lien or security interest in
all or substantially all of the Collateral (other than the release or deferral of any leasehold
mortgage which shall be approved by the Majority Banks) or release any guaranty or similar
undertaking provided by any Person, provided however that Agent shall be entitled to release any
Collateral or material guaranty in connection with any sale or other transfer by Company or any
Subsidiary which is permitted under the terms of this Agreement or the other Loan Documents or as
otherwise permitted in Section 12.11 hereof, without notice to or any further action or consent of
the Banks, (f) terminate or modify any indemnity provided to the Banks hereunder or under the other
Loan Documents, except as shall be otherwise expressly provided in this Agreement or any other Loan
Document, (g) take any action which requires the approval or consent of all Banks pursuant to the
terms of this Agreement or any other Loan Document, (h) change the definitions of “Availability”,
“Borrowing Base”, “Revolving Credit Percentage”, “Interest Periods”, “Majority Banks”, or (i)
change or modify Section 2.1, 2.5(e), 3.6(e), 7.19, or 9.2(b) or this Section 13.10.
Notwithstanding the foregoing, (A) no amendment, waiver or consent shall, unless in writing signed
by the Swing Line Bank, do any of the following: (x) reduce the principal of, or interest on, the
Swing Line Note or (y) postpone any date fixed for any payment of principal of, or interest on, the
Swing Line Note; (B) no amendment, waiver, or consent shall, unless in writing and signed by the
Issuing Bank, affect the rights or duties of the Issuing Bank under Article 3 hereof and (C) no
amendment, waiver, or consent shall, unless in writing and signed by the Agent in addition to all
the Banks, affect the rights or duties of the Agent under this Agreement or any other Loan
Document. All references in this Agreement to “Banks” or “the Banks” shall refer to all Banks,
unless expressly stated to refer to Majority Banks (or the like).



     The Agent shall, upon the written request of the Company, execute and deliver to the Company
such documents as may be necessary to evidence (1) the release of any Lien granted to or held by
the Agent upon any Collateral: (a) upon termination of the Revolving Credit Aggregate Commitment
and payment in full of all Indebtedness payable under this Agreement and under any other Loan
Document; (b) which constitutes property (including, without limitation, Equity Interests in any
Person) sold or to be sold or disposed of as part of or in connection with any disposition (whether
by sale, by merger or by any other form of transaction and including the property of any Subsidiary
that is disposed of as permitted hereby) permitted in accordance with the terms of this Agreement;
(c) which constitutes property in which Company or any applicable Subsidiary owned no interest at
the time the Lien was granted or at any time thereafter; or (d) if approved, authorized or ratified
in writing by the Majority Banks, or all the Banks, as the case may be, as provided in this Section
13.10; or (2) the release of any Person from its obligations under the Loan Documents (including
without limitation the Guaranty) if all of the Equity Interests of such Person that were held by
Company or a Subsidiary are sold or otherwise transferred to any transferee other than Company or a
Subsidiary of Company as part of or in connection with any disposition (whether by sale, by merger
or by any other form of transaction) permitted in accordance with the terms of this Agreement;
provided that (i) Agent
shall not be required to execute any such release or subordination agreement under clauses (1)
or (2) above on terms which, in the Agent’s opinion, would expose the Agent to liability or create
any obligation or entail any consequence other than the release of such Liens without recourse or
warranty or such release shall not in any manner discharge, affect or impair the Indebtedness or



96









 







any Liens upon any Collateral retained by Company or any of its Subsidiaries, including (without
limitation) the proceeds of the sale or other disposition, all of which shall constitute and remain
part of the Collateral.



     13.11 Confidentiality. Each Bank agrees that it will not disclose without the prior consent of Company (other than
to its employees, its Subsidiaries, another Bank, an Affiliate of a Bank or to its auditors or
counsel) any information with respect to Company, which is furnished pursuant to this Agreement or
any of the other Loan Documents; provided that any Bank may disclose any such information (a) as
has become generally available to the public or has been lawfully obtained by such Bank from any
third party under no duty of confidentiality to Company, (b) as may be required or appropriate in
any report, statement or testimony submitted to, or in respect to any inquiry, by, any municipal,
state or federal regulatory body having or claiming to have jurisdiction over such Bank, including
the Board of Governors of the Federal Reserve System of the United States, the Office of the
Comptroller of the Currency or the Federal Deposit Insurance Corporation or similar organizations
(whether in the United States or elsewhere) or their successors, (c) as may be required or
appropriate in respect to any summons or subpoena or in connection with any litigation, (d) in
order to comply with any law, order, regulation or ruling applicable to such Bank, and (e) to any
permitted transferee or assignee or to any approved participant of, or with respect to, the Notes,
as aforesaid; provided that each such Person executed a confidentiality agreement consistent with
the terms of this Section 13.11. Each Back agrees to promptly furnish Company with a copy of any
such summons or subpoena to the extent not prohibited by law or court order.



     13.12 Withholding Taxes. If any Bank is not a United States person within the meaning of Section 7701(a)(30) of the
Internal Revenue Code such Bank shall promptly (but in any event prior to the initial payment of
interest hereunder) deliver to the Agent two executed copies of (i) Internal Revenue Service Form
W-8BEN or any successor form specifying the applicable tax treaty between the United States and the
jurisdiction of such Bank’s domicile which provides for the exemption from withholding on interest
payments to such Bank, (ii) Internal Revenue Service Form W-8ECI or any successor form evidencing
that the income to be received by such Bank hereunder is effectively connected with the conduct of
a trade or business in the United States or (iii) other evidence satisfactory to the Agent that
such Bank is exempt from United States income tax withholding with respect to such income;
provided, however, that such Bank shall not be required to deliver to Agent the aforesaid forms or
other evidence with respect to Advances to the Company, if such Bank has assigned its entire
interest in the Revolving Credit (including any outstanding Advances thereunder and participations
in Letters of Credit issued hereunder), Swing Line and any Notes issued to it by the Company, to an
Affiliate which is incorporated under the laws of the United States or a state thereof, and so
notifies the Agent. Such Bank shall amend or supplement any such form or evidence as required to
insure that it is accurate,
complete and non-misleading at all times. Promptly upon notice from the Agent of any
determination by the Internal Revenue Service that any payments previously made to such Bank
hereunder were subject to United States income tax withholding when made, such Bank shall pay to
the Agent the excess of the aggregate amount required to be withheld from such payments over the
aggregate amount actually withheld by the Agent. In addition, from time to time upon the reasonable
request and at the sole expense of the Company, each Bank and the Agent shall (to the extent it is
able to do so based upon applicable facts and circumstances), complete and provide the Company with
such forms, certificates or other documents as may be reasonably



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necessary to allow the Company, as
applicable, to make any payment under this Agreement or the other Loan Documents without any
withholding for or on the account of any tax under Section 10.1(d) hereof (or with such withholding
at a reduced rate), provided that the execution and delivery of such forms, certificates or other
documents does not adversely affect or otherwise restrict the right and benefits (including without
limitation economic benefits) available to such of the Bank or the Agent, as the case may be, under
this Agreement or any of the other Loan Documents, or under or in connection with any transactions
not related to the transactions contemplated hereby.



     13.13 Taxes and Fees. Should any tax (other than as a result of a Bank’s failure to comply with Section 13.12 or
a tax based upon the net income or capitalization of any Bank or the Agent by any jurisdiction
where a Bank or Agent is or has been located), recording or filing fee become payable in respect of
this Agreement or any of the other Loan Documents or any amendment, modification or supplement
hereof or thereof, the Company agrees to pay the same, together with any interest or penalties
thereon arising from the Company’s act or omission, and agrees to hold the Agent and the Banks
harmless with respect thereto. Notwithstanding the foregoing, nothing contained in this Section
13.13 shall affect or reduce the rights of any Bank or the Agent under Section 11.5 hereof.



     13.14 WAIVER OF JURY TRIAL. THE BANKS, THE AGENT AND THE COMPANY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY
RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY RELATED INSTRUMENT OR AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTION OF ANY
OF THEM. NEITHER THE BANKS, THE AGENT, NOR COMPANY SHALL SEEK TO CONSOLIDATE, BY COUNTERCLAIM OR
OTHERWISE, ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A
JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN
MODIFIED IN ANY RESPECT OR RELINQUISHED BY THE BANKS AND THE AGENT OR COMPANY EXCEPT BY A WRITTEN
INSTRUMENT EXECUTED BY ALL OF THEM.



     13.15 Complete Agreement; Conflicts. This Agreement, the Notes (if issued), any Requests for Revolving Credit Advance, and
Requests for Swing Line Advance hereunder, and the Loan Documents contain the entire agreement of
the parties hereto, superseding all prior agreements, discussions and understandings relating to
the subject matter hereof, and none of the parties shall be bound by anything not expressed in
writing. In the event of any conflict between the terms of this Agreement and the other Loan
Documents, this Agreement shall govern.



     13.16 Severability. In case any one or more of the obligations of Company under this Agreement, the Notes or
any of the other Loan Documents shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining obligations of Company shall not in any way
be affected or impaired thereby, and such invalidity, illegality or unenforceability in one
jurisdiction shall not affect the validity, legality or



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enforceability of the obligations of
Company under this Agreement, the Notes or any of the other Loan Documents in any other
jurisdiction.



     13.17 Table of Contents and Headings; Section References. The table of contents and the headings of the various subdivisions hereof are for
convenience of reference only and shall in no way modify or affect any of the terms or provisions
hereof and references herein to “sections,” “subsections,” “clauses,” “paragraphs,”
“subparagraphs,” “exhibits” and “schedules” shall be to sections, subsections, clauses, paragraphs,
subparagraphs, exhibits and schedules, respectively, of this Agreement unless otherwise
specifically provided herein or unless the context otherwise clearly indicates.



     13.18 Construction of Certain Provisions. If any provision of this Agreement or any of the Loan Documents refers to any action to be
taken by any Person, or which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such Person, whether or not
expressly specified in such provision.



     13.19 Independence of Covenants. Each covenant hereunder shall be given independent effect (subject to any exceptions stated
in such covenant) so that if a particular action or condition is not permitted by any such covenant
(taking into account any such stated exception), the fact that it would be permitted by an
exception to, or would be otherwise within the limitations of, another covenant shall not avoid the
occurrence of a Default or an Event of Default.



     13.20 Reliance on and Survival of Various Provisions. All terms, covenants, agreements, representations and warranties of Company or any party to
any of the Loan Documents made herein or in any of the Loan Documents or in any certificate,
report, financial statement or other document furnished by or on behalf of Company or any
Subsidiary in connection with this Agreement or any of the Loan Documents shall be deemed to have
been relied upon by the Banks, notwithstanding any investigation heretofore or
hereafter made by any Bank or on such Bank’s behalf, and those covenants and agreements of
Company set forth in Section 13.5 hereof (together with any other indemnities of Company or any
Subsidiary contained elsewhere in this Agreement or in any of the other Loan Documents) and of
Banks set forth in Section 12.7 hereof shall survive the repayment in full of the Obligations and
the termination of the Revolving Credit Aggregate Commitment.



     13.21 Amendment and Restatement. This Agreement, together with the Guaranty and the Security Agreements, amends, restates
and replaces the Amended and Restated Credit Agreement. It is the intention of each of the parties
hereto that the Amended and Restated Credit Agreement be amended and restated so as to preserve the
perfection and priority of all security interests securing indebtedness and obligations under the
Amended and Restated Credit Agreement and that all indebtedness and obligations of Company and its
Subsidiaries hereunder and thereunder shall be secured by the Collateral Documents and that this
Agreement does not constitute a novation of the obligations and liabilities existing under the
Amended and Restated Credit Agreement, and all Existing Advances and Existing Letters of Credit
shall continue in effect as Advances and Letters of Credit under this Agreement.



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     13.22 Electronic Transmissions.



          (a) Each of the Agent, the Company and its Subsidiaries, the Banks, and each of their
Affiliates is authorized (but not required) to transmit, post or otherwise make or communicate, in
its sole discretion, Electronic Transmissions in connection with any Loan Document and the
transactions contemplated therein. The Company and each of its Subsidiaries hereby acknowledges
and agrees that the use of Electronic Transmissions is not necessarily secure and that there are
risks associated with such use, including risks of interception, disclosure and abuse and each
indicates it assumes and accepts such risks by hereby authorizing the transmission of Electronic
Transmissions.




          (b) All uses of an E-System shall be governed by and subject to, in addition to Section 13.6
and this Section 13.22, separate terms and conditions posted or referenced in such E-System and
related contractual obligations executed by the Agent, the Company, its Subsidiaries and the Banks
in connection with the use of such E-System.



          (c) All E-Systems and Electronic Transmissions shall be provided “as is” and “as available”.
None of the Agent or any of its Affiliates warrants the accuracy, adequacy or completeness of any
E-Systems or Electronic Transmission, and each disclaims all liability for errors or omissions
therein. No warranty of any kind is made by the Agent or any of its Affiliates in connection with
any E Systems or Electronic Transmission, including any warranty of merchantability, fitness for a
particular purpose, non-infringement of third-party rights or freedom from viruses or other code
defects. The Agent, the Company, its Subsidiaries and the Banks agree that the Agent has no
responsibility for maintaining or providing any equipment, software, services or any testing
required in connection with any Electronic Transmission or otherwise required for any E-System.



     13.23 Advertisements. The Agent and the Banks may disclose the names of the Company
and its Subsidiaries and the existence of the Indebtedness in general advertisements and trade
publications.



     13.24 Patriot Act Notice. Pursuant to Section 326 of the USA Patriot Act, the Agent
and the Banks hereby notify the Company that if it or any of its Subsidiaries open an account,
including any loan, deposit account, treasury management account, or other extension of credit with
Agent or any Bank, the Agent or the applicable Bank will request the applicable Person’s name, tax
identification number, business address and other information necessary to identify such Person
(and may request such Person’s organizational documents or other identifying documents) to the
extent necessary for the Agent and the applicable Bank to comply with the USA Patriot Act.



* * *




[Signatures Follow On Succeeding Page]




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     WITNESS the due execution hereof as of the day and year first above written.



	 	 	 	 	 	 	 	 	 	 	 
	COMERICA BANK,	 	 	 	OLYMPIC STEEL, INC.	 	 
	as Agent, Swing Line Bank, Issuing

Bank and as a Bank	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Its:

	 	 	 	 	 	Its:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	LASALLE BANK MIDWEST NATIONAL ASSOCIATION, as
Syndication Agent and as a Bank	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	FIFTH THIRD BANK, as Cash Management Agent and
as a Bank	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	KEYBANK NATIONAL ASSOCIATION, as Documentation
Agent and as a Bank	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 







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