Exhibit 10.6.b


 




 





 


 


FORM OF


 


CREDIT AGREEMENT

dated as of November      , 2007


 


among


 


ATLAS FOREST ACQUISITION CORP.,

as Borrower,


 


and


 


ATLAS INDUSTRIES HOLDINGS LLC,

as Lender


 


 




 





 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 1.

  	
  DEFINITIONS; INTERPRETATION

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  Definitions

  	
  1

  
	
  1.2

  	
  Interpretation

  	
  13

  
	
   

  	
   

  	
   

  
	
  SECTION 2.

  	
  CREDIT FACILITIES

  	
  14

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Commitments

  	
  14

  
	
  2.2

  	
  Loan Procedures

  	
  14

  
	
  2.3

  	
  Certain Conditions

  	
  16

  
	
  2.4

  	
  Loan Accounting

  	
  16

  
	
  2.5

  	
  Interest

  	
  16

  
	
  2.6

  	
  Fees

  	
  17

  
	
  2.7

  	
  Commitment Reduction

  	
  18

  
	
  2.8

  	
  Prepayment

  	
  18

  
	
  2.9

  	
  Repayment

  	
  19

  
	
  2.10

  	
  Payment

  	
  20

  
	
   

  	
   

  	
   

  
	
  SECTION 3.

  	
  YIELD PROTECTION

  	
  22

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  Taxes

  	
  22

  
	
  3.2

  	
  Increased Cost

  	
  23

  
	
  3.3

  	
  Inadequate or Unfair Basis

  	
  24

  
	
  3.4

  	
  Change in Law

  	
  24

  
	
  3.5

  	
  Funding Losses

  	
  24

  
	
  3.6

  	
  Manner of Funding; Alternate
  Funding Offices

  	
  25

  
	
  3.7

  	
  Mitigation of Circumstances

  	
  25

  
	
  3.8

  	
  Conclusiveness of Statements;
  Survival

  	
  25

  
	
   

  	
   

  	
   

  
	
  SECTION 4.

  	
  CONDITIONS PRECEDENT

  	
  25

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Initial Credit Extension

  	
  25

  
	
  4.2

  	
  All Credit Extensions

  	
  27

  
	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
  REPRESENTATIONS AND WARRANTIES

  	
  28

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Organization

  	
  28

  
	
  5.2

  	
  Authorization; No Conflict

  	
  28

  
	
  5.3

  	
  Validity; Binding Nature

  	
  28

  
	
  5.4

  	
  Financial Condition

  	
  29

  
	
  5.5

  	
  No Material Adverse Change

  	
  29

  
	
  5.6

  	
  Litigation

  	
  29

  
	
  5.7

  	
  Ownership of Properties; Liens

  	
  29

  
	
  5.8

  	
  Capitalization

  	
  30

  
	
  5.9

  	
  Pension Plans

  	
  30

  
	
  5.10

  	
  Investment Company Act

  	
  30

  



 


i

















 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  5.11

  	
  Margin Stock

  	
  30

  
	
  5.12

  	
  Taxes

  	
  31

  
	
  5.13

  	
  Solvency

  	
  31

  
	
  5.14

  	
  Environmental Matters

  	
  31

  
	
  5.15

  	
  Insurance

  	
  32

  
	
  5.16

  	
  Information

  	
  32

  
	
  5.17

  	
  Intellectual Property

  	
  32

  
	
  5.18

  	
  Restrictive Provisions

  	
  32

  
	
  5.19

  	
  Labor Matters

  	
  32

  
	
  5.20

  	
  No Default

  	
  33

  
	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
  AFFIRMATIVE COVENANTS

  	
  33

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  Information

  	
  33

  
	
  6.2

  	
  Books; Records; Inspections

  	
  35

  
	
  6.3

  	
  Maintenance of Property;
  Insurance

  	
  36

  
	
  6.4

  	
  Compliance with Laws; Payment
  of Taxes and Liabilities

  	
  37

  
	
  6.5

  	
  Maintenance of Existence

  	
  37

  
	
  6.6

  	
  Employee Benefit Plans

  	
  37

  
	
  6.7

  	
  Environmental Matters

  	
  37

  
	
  6.8

  	
  Collateral Access Agreements

  	
  38

  
	
  6.9

  	
  Further Assurances;
  Post-Closing

  	
  39

  
	
   

  	
   

  	
   

  
	
  SECTION 7. 

  	
  NEGATIVE COVENANTS 

  	
  40 

  
	
   

  	
   

  	
   

  
	
  7.1

  	
  Debt

  	
  40

  
	
  7.2

  	
  Liens

  	
  41

  
	
  7.3

  	
  Restricted Payments

  	
  42

  
	
  7.4

  	
  Mergers; Consolidations; Asset
  Sales

  	
  42

  
	
  7.5

  	
  Modification of Organizational
  Documents

  	
  43

  
	
  7.6

  	
  Use of Proceeds

  	
  43

  
	
  7.7

  	
  Transactions with Affiliates

  	
  43

  
	
  7.8

  	
  Business Activities

  	
  43

  
	
  7.9

  	
  Investments

  	
  43

  
	
  7.10

  	
  Restriction of Amendments to
  Certain Documents

  	
  44

  
	
  7.11

  	
  Fiscal Year

  	
  44

  
	
  7.12

  	
  Financial Covenants.

  	
  44

  
	
  7.13

  	
  Bank Accounts

  	
  45

  
	
  7.14

  	
  Subsidiaries

  	
  45

  
	
  7.15

  	
  Inconsistent Agreements

  	
  46

  
	
   

  	
   

  	
   

  
	
  SECTION 8.

  	
  EVENTS OF DEFAULT; REMEDIES.

  	
  46

  
	
   

  	
   

  	
   

  
	
  8.1

  	
  Events of Default

  	
  46

  
	
  8.2

  	
  Remedies

  	
  49

  



 


ii

















 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 9.

  	
  MISCELLANEOUS

  	
  49

  
	
   

  	
   

  	
   

  
	
  9.1

  	
  Waiver; Amendments

  	
  49

  
	
  9.2

  	
  Notices

  	
  49

  
	
  9.3

  	
  Computations

  	
  50

  
	
  9.4

  	
  Costs; Expenses

  	
  50

  
	
  9.5

  	
  Indemnification by Borrower

  	
  50

  
	
  9.6

  	
  Marshaling; Payments Set Aside

  	
  51

  
	
  9.7

  	
  Nonliability of Lender

  	
  51

  
	
  9.8

  	
  Confidentiality

  	
  51

  
	
  9.9

  	
  Captions

  	
  52

  
	
  9.10

  	
  Nature of Remedies

  	
  52

  
	
  9.11

  	
  Counterparts

  	
  52

  
	
  9.12

  	
  Severability

  	
  52

  
	
  9.13

  	
  Entire Agreement

  	
  53

  
	
  9.14

  	
  Successors; Assigns

  	
  53

  
	
  9.15

  	
  Governing Law

  	
  53

  
	
  9.16

  	
  Forum Selection; Consent to
  Jurisdiction

  	
  53

  
	
  9.17

  	
  Waiver of Jury Trial

  	
  54

  



 


iii

















 


	
  Annexes

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Annex I

  	
  Addresses

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibits

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  Form of Compliance Certificate

  	
   

  
	
  Exhibit B

  	
  Form of Note

  	
   

  
	
  Exhibit C

  	
  Form of Borrowing Notice

  	
   

  
	
  Exhibit D

  	
  Conversion/Continuation Notice

  	
   

  
	
  Exhibit E

  	
  Availability Certificate

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedules

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 4.1.3

  	
  Debt to be Repaid

  	
   

  
	
  Schedule 5.6

  	
  Litigation

  	
   

  
	
  Schedule 5.8

  	
  Capitalization

  	
   

  
	
  Schedule 5.14

  	
  Environmental Matters

  	
   

  
	
  Schedule 5.15

  	
  Insurance

  	
   

  
	
  Schedule 5.17

  	
  Intellectual Property

  	
   

  
	
  Schedule 5.19

  	
  Labor Matters

  	
   

  
	
  Schedule 6.9

  	
  Post-Closing

  	
   

  
	
  Schedule 7.1

  	
  Existing Debt

  	
   

  
	
  Schedule 7.2

  	
  Existing Liens

  	
   

  
	
  Schedule 7.9

  	
  Existing Investments

  	
   

  
	
  Schedule 7.13

  	
  Bank Accounts

  	
   

  



 


i

















 


CREDIT AGREEMENT


 


This Credit Agreement dated as
of November      , 2007 (as amended, restated or
otherwise modified from time to time, this “Agreement”) by and between
ATLAS FOREST ACQUISITION CORP., a Delaware corporation (“Borrower”), and
ATLAS INDUSTRIES HOLDINGS LLC, a Delaware limited liability company, as lender
(together with its successors and assigns, “Lender”).


 


In consideration of the mutual
agreements herein contained, the parties hereto agree as follows:


 


Section 1.               Definitions;
Interpretation.


 


1.1           Definitions.


 


When used herein the following
terms shall have the following meanings:


 


Acceleration Event means the occurrence of any of
the following:  (i) an Event of
Default under Section 8.1.3; or (ii) both (a) any other Event of
Default under Section 8.1 and (b) the election by the Lender (i) to
declare the Obligations to be due and payable or (ii) to terminate the
Commitments.


 


Account has the meaning set forth in the
Guarantee and Collateral Agreement.


 


Account Debtor means any Person who is
obligated to Borrower or any Subsidiary with respect to any Account.


 


Acquisition means any transaction or series
of related transactions for the purpose of or resulting, directly or
indirectly, in (a) the acquisition of all or a substantial portion of the
assets of a Person, or of all or a substantial portion of any business or
division of a Person, (b) the acquisition of in excess of 50% of the
capital stock, partnership interests, membership interests or equity of any
Person, or otherwise causing any Person to become a Subsidiary, or (c) a
merger or consolidation or any other combination with another Person (other
than a Person that is already a Subsidiary).


 


Affiliate of any Person means (a) any
other Person which, directly or indirectly, controls or is controlled by or is
under common control with such Person, (b) any officer or director of such
Person and (c) with respect to Lender, any entity administered or managed
by Lender or an Affiliate or investment advisor thereof which is engaged in
making, purchasing, holding or otherwise investing in commercial loans. A
Person shall be deemed to be “controlled by” any other Person if such Person
possesses, directly or indirectly, power to vote 10% or more of the securities
(on a fully diluted basis) having ordinary voting power for the election of
directors or managers or power to direct or cause the direction of the
management and policies of such Person whether by contract or otherwise. Unless
expressly stated otherwise herein, Lender shall not be deemed an Affiliate of
Borrower or of any Subsidiary.


 


1

















 


Agreement has the meaning set forth in the
Preamble.


 


Applicable Margin means the applicable rate per
annum as set forth in the following table: 



 


	
  Revolving Loans

  	
   

  	
  Term A Loans

  	
   

  	
   

  	
   

  
	
  Base 

  Rate

  	
   

  	
  LIBOR

  	
   

  	
  Base

  Rate

  	
   

  	
  LIBOR

  	
   

  	
  Commitment

  Fee

  	
   

  
	
  +0.25

  	
  %

  	
  +2.75

  	
  %

  	
  +1.25

  	
  %

  	
  +3.75

  	
  %

  	
  0.5

  	
  %

  



 


Availability Certificate
means a certificate substantially in the form of Exhibit E.


 


Balance Sheet Date has the meaning set forth in
Section 5.4.


 


Base Rate means, for any day, the greater
of (a) the rate of interest which is identified as the “Prime Rate” and
normally published in the Money Rates Section of The Wall Street
Journal (or, if such rate ceases to be so published, as quoted from such
other generally available and recognizable source as Lender may select) and
(b) the sum of the Federal Funds Rate plus 0.5%. Any change in the Base
Rate due to a change in such Prime Rate or the Federal Funds Rate shall be
effective on the effective date of such change in such Prime Rate or the
Federal Funds Rate.


 


Base Rate Loan means any Loan which bears
interest at or by reference to the Base Rate.


 


Borrower has the meaning set forth in the
Preamble.


 


Borrowing Availability means, as of any date of
determination, an amount equal to the lesser of (a) the Revolving Loan
Commitments and (b) Eligible Availability.


 


Borrowing Notice means a notice in substantially
the form of Exhibit C.


 


Business Day means any day other than any
Saturday and Sunday on which commercial banks are open for commercial banking
business in New York, New York, and, in the case of a Business Day which
relates to a LIBOR Loan, any day on which dealings are carried out in the
London interbank Eurodollar market.


 


Canadian Dollar means lawful money of Canada.


 


Canadian Subsidiary means a Subsidiary that is
incorporated or organized under the laws of a province, or under the federal
laws, of Canada.


 


Capital Expenditures means all expenditures which, in
accordance with GAAP, would be required to be capitalized and shown on the
consolidated balance sheet of Borrower, but excluding expenditures made in
connection with the replacement, substitution 


 


2

















 


or restoration of assets to the
extent financed (a) from insurance proceeds (or other similar recoveries)
paid on account of the loss of or damage to the assets being replaced or
restored, (b) with cash awards of compensation arising from the taking by
eminent domain or condemnation of the assets being replaced or (c) with
cash proceeds of Dispositions that are excluded from the definition of Net Cash
Proceeds in accordance with clause (a)(v) of such definition.


 


Capital Lease means, with respect to any
Person, any lease of (or other agreement conveying the right to use) any real
or personal property by such Person that, in conformity with GAAP, is accounted
for as a capital lease on the balance sheet of such Person.


 


Cash Equivalent Investment
means, at any time, (a) any evidence of Debt, maturing not more than one
year after such time, issued or guaranteed by the United States Government or
any agency thereof, (b) commercial paper, or corporate demand notes, in
each case rated at least A-l by Standard & Poor’s Ratings Group or P-l by
Moody’s Investors Service, Inc., (c) any certificate of deposit (or time
deposit represented by a certificate of deposit) or banker’s acceptance
maturing not more than one year after such time, or any overnight Federal Funds
transaction that is issued or sold by Lender (or by a commercial banking
institution that is a member of the Federal Reserve System and has a combined
capital and surplus and undivided profits of not less than $500,000,000),
(d) any repurchase agreement entered into with a commercial banking
institution of the nature referred to in clause (c) above which (i) is
secured by a fully perfected security interest in any obligation of the type
described in any of clauses (a) through (c) above and (ii) has a market
value at the time such repurchase agreement is entered into of not less than
100% of the repurchase obligation of such commercial banking institution
thereunder, (e) money market accounts or mutual funds which invest
exclusively in assets satisfying the foregoing requirements and (f) other
short term liquid investments approved in writing by Lender.


 


Closing Date means the date on which all
conditions precedent set forth in Section 4.1 have been satisfied
by the Borrower or waived in writing by Lender.


 


Collateral has the meaning set forth in the
Guarantee and Collateral Agreement.


 


Collateral Access Agreement
means an agreement in form and substance reasonably satisfactory to Lender
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 Borrower or any Subsidiary, acknowledges
the Liens of Lender and waives (or, if approved by Lender, subordinates) any
Liens held by such Person on such property, and, in the case of any such
agreement with a mortgagee or lessor, permits Lender reasonable access to and
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 means, collectively, the
Guarantee and Collateral Agreement, each Mortgage, each Collateral Access
Agreement, and each other agreement or 


 


3

















 


instrument pursuant to or in
connection with which Borrower, any Subsidiary or any other Person grants a
security interest in any Collateral to Lender, each as amended, restated or
otherwise modified from time to time.


 


Commitments means the Revolving Loan
Commitment, the Term A Loan Commitment and the Term B Loan Commitment.


 


Commitment Fee means the fee payable by
Borrower to Lender pursuant to Section 2.6.1.


 


Compliance Certificate means a certificate
substantially in the form of Exhibit A.


 


Computation Period means each period of four consecutive
Fiscal Quarters ending on the last day of a Fiscal Quarter with the first
Computation Period hereunder to end as of December 31, 2007.


 


Consolidated Net Income means, with respect to Borrower
and the Subsidiaries for any period, the consolidated net income (or loss) of
Borrower and the Subsidiaries for such period, excluding any gains or
losses from Dispositions, any extraordinary gains or extraordinary non-cash
losses and any gains or non-cash losses from discontinued operations.


 


Contingent Obligation means any agreement, undertaking
or arrangement by which any Person guarantees, endorses or otherwise becomes or
is contingently liable upon (by direct or indirect agreement, contingent or
otherwise, to provide funds for payment, to supply funds to or otherwise to
invest in a debtor, or otherwise to assure a creditor against loss) any
indebtedness, obligation or other liability of any other Person (other than by
endorsements of instruments in the course of collection), or guarantees the
payment of dividends or other distributions upon the shares of any other Person.
The amount of any Person’s obligation in respect of any Contingent Obligation
shall (subject to any limitation set forth therein) be deemed to be the
principal amount of the debt, obligation or other liability supported thereby. Notwithstanding
anything set forth herein to the contrary, for purposes of this Agreement,
Contingent Obligations shall not include any of the following debts and
liabilities:  (i) customary
indemnification of officers, directors, managers, members, employees and
agents, (ii) indemnity obligations under leases and other contracts entered
into the ordinary course of business, (iii) contingent 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 $100,000 in aggregate liability, (iv) guarantees incurred
in the ordinary course of business for an aggregate amount not to exceed $100,000
for Borrower at any one time, and (v) guarantees of obligations in connection
with worker’s compensation obligations and general liability exposure of the
Loan Parties.


 


Controlled Group means all members of a
controlled group of corporations and all members of a controlled group of
trades or businesses (whether or not incorporated) 


 


4

















 


under common control which,
together with Borrower, are treated as a single employer under Section 414
of the IRC or Section 4001 of ERISA.


 


Conversion/Continuation Notice
means a notice in substantially the form of Exhibit D.


 


Debt of any Person means, without duplication,
(a) all indebtedness of such Person for borrowed money, (b) all
indebtedness evidenced by bonds, debentures, notes or similar instruments, (c)
all obligations of such Person as lessee under Capital Leases which have been
or should be recorded as liabilities on a balance sheet of such Person in
accordance with GAAP, (d) all obligations of such Person to pay the
deferred purchase price of property or services (excluding trade accounts
payable in the ordinary course of business), (e) all indebtedness secured
by a Lien on the property of such Person, whether or not such indebtedness
shall have been assumed by such Person (with the amount thereof being measured
as the lesser of the fair market value of such property and the amount secured
thereby), (f) all obligations, contingent or otherwise, with respect to
the face amount of all letters of credit (whether or not drawn) and banker’s
acceptances issued for the account of such Person, (g) all Hedging
Obligations of such Person, (h) all Contingent Obligations of such Person
(excluding Contingent Obligations consisting of guaranties within a group of entities
comprising a Portfolio Company or an Outside Company (as each such term is
defined in the External Credit Facility) provided by a parent entity in support
of obligations of a subsidiary thereof that do not constitute Debt),
(i) all non-compete payment obligations and earn-out and similar
obligations, (j) all indebtedness of any partnership of which such Person is a
general partner, (k) preferred equity interests of such Person subject to
mandatory repurchase or redemption during the term of this Agreement or within
six months thereafter (but excluding the Initial Portfolio Company Preferred
Stock (as defined in the External Credit Facility)), and (l) all obligations of
such Person under any synthetic lease transaction, where such obligations are
considered borrowed money indebtedness for tax purposes but the transaction
itself is classified as an operating lease in accordance with GAAP.


 


Debt to be Repaid means the Debt listed on Schedule
4.1.3.


 


Default means any event that, if it
continues uncured, will, with the lapse of time or the giving of notice or
both, constitute an Event of Default.


 


Disposition means, as to any asset or right
of Borrower or any Subsidiary, (a) any sale, lease, assignment or other
transfer (other than to Borrower or any Subsidiary) thereof, (b) any loss,
destruction or damage thereof or (c) any actual or threatened
condemnation, confiscation, requisition, seizure or taking thereof, in each
case excluding (i) assets subject to a transaction otherwise constituting
a “Disposition” which are replaced within 180 days with assets performing the
same or a similar function, (ii) ”Dispositions” in any Fiscal Year, the
Net Cash Proceeds of which do not in the aggregate exceed $250,000 and
(iii) the sale or other transfer of Inventory in the ordinary course of
business.


 


Dollar and $ mean lawful money
of the United States of America.


 


5

















 


Dollar Equivalent means, at any time, (a) as to
any amount denominated in U.S. Dollars, the amount thereof at such time, and
(b) as to any amount denominated in any currency other than U.S. Dollars, the
equivalent in U.S. Dollars of such amount determined at the Exchange Rate on
the date of determination of such equivalent.


 


Domestic Subsidiary means any Subsidiary that is
incorporated or organized under the laws of a State within the United States of
America or the District of Columbia. Unless the context otherwise requires,
each reference to Domestic Subsidiary or Domestic Subsidiaries herein shall be
a reference to Subsidiary or Subsidiaries of Borrower.


 


Early Termination Payment
means in connection with any permanent reduction of the Revolving Commitment
pursuant to Section 2.7, an amount equal to the applicable percentage of the
Revolving Loan Commitment or portion thereof being permanently reduced as
follows:


 


	
  If reduced during the 12-month

  period ending November      

  	
   

  	
  Applicable Percentage

  	
   

  
	
  2008

  	
   

  	
  1.0

  	
  %

  
	
  2009

  	
   

  	
  0.5

  	
  %

  
	
  2010 and
  thereafter

  	
   

  	
  0.0

  	
  %

  



 


EBITDA means, for any period on a
consolidated basis, Consolidated Net Income for such period plus, to the extent
deducted in determining such Consolidated Net Income, (i) Interest Expense,
(ii) income tax expense for such period, (iii) depreciation and amortization
for such period, (iv) management fees paid to or accrued for the benefit of
Manager in such period to the extent permitted pursuant to Section 7.4,
(v) non-cash charges incurred to reflect any in-process research and
development acquired by the Borrower at the time of its acquisition of the
Target and its Subsidiaries, (vi) expense in respect of any forgiveness of
non-cash loans to management of the Borrower and its Subsidiaries, (vii)
one-time, non-cash charges arising from the allocation to assets of the
purchase price therefor in accordance with purchase accounting under GAAP, and
(viii) other non-cash expenses (or less gains or income) deducted in the
determination of such Consolidated Net Income and for which no cash outlay (or
cash receipt) is foreseeable prior to the Termination Date; provided, further,
that with respect to any Person acquired by the Borrower or any of its
Subsidiaries after the Closing Date in an Acquisition permitted hereunder and
otherwise permitted under the terms of the External Credit Facility, for
periods prior to such Acquisition, the amount of EBITDA attributable to such
Person shall be equal to the EBITDA of such Person on a pro forma basis prior
to such Acquisition; provided, further, that, notwithstanding
anything to the contrary herein, for each of the calendar months preceding the
Closing Date set forth below, the EBITDA for the Borrower and its Subsidiaries
indicated below shall be deemed to be the amount set forth below opposite such
month:


 


	
  November

  2006

  	
   

  	
  December

  2006

  	
   

  	
  January 2007

  	
   

  	
  February 2007

  	
   

  	
  March 2007

  	
   

  	
  April 2007

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  
																		



 


6

















 


	
  May 2007

  	
   

  	
  June 2007

  	
   

  	
  July 2007

  	
   

  	
  August 2007

  	
   

  	
  September

  2007

  	
   

  	
  [October

  2007]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  
																		



 


; provided, further,
that for purposes of calculating Interest Coverage Ratio and Fixed Charge
Coverage Ratio hereunder, cash equity contributions to the Borrower solely to
the extent permitted by Section 7.16 of this Agreement may be added
to the Borrower’s Consolidated Net Income.


 


Eligible Accounts means the Accounts of the
Borrower and its Subsidiaries; provided, that, without limiting Lender’s
discretion separately provided for herein, Eligible Accounts shall not include
any Account of the Borrower or such Subsidiary:


 


(a)           which
is not subject to a first priority perfected security interest in favor of the
Lender;


 


(b)           which
is subject to any Lien other than Liens permitted hereunder;


 


(c)           with
respect to which more than 90  days
have elapsed since the date of the original invoice therefor or which is more
than 60  days past the due date for
payment;


 


(d)           which
is owing by an Account Debtor for which more than 25% of the Accounts owing to
the Borrower or such Subsidiary from such Account Debtor and its Affiliates are
ineligible hereunder;


 


(e)           which
is owing by an Account Debtor to the extent the aggregate amount of Accounts
owing from such Account Debtor and its Affiliates to the Borrower or such
Subsidiary exceeds 20% of the aggregate Eligible Accounts of the Borrower and
its Subsidiaries;


 


(f)            with
respect to which any covenant, representation, or warranty relating to such
Account contained in this Agreement or in the Collateral Documents has been
breached or is not true;


 


(g)           which
(i) does not arise from the sale of goods or performance of services in
the ordinary course of business, (ii) is not evidenced by an invoice, or
other documentation satisfactory to Lender, which has been sent to the Account
Debtor, (iii) represents a progress billing, (iv) is contingent upon
the Borrower’s or such Subsidiary’s completion of any further performance, or
(v) represents a sale on a bill-and-hold, guaranteed sale,
sale-and-return, sale on approval, consignment which is billed prior to 


 


7

















 


actual sale to the end user, cash-on-delivery or any other repurchase
or return basis;


 


(h)           for
which the goods giving rise to such Account have not been shipped to the
Account Debtor or for which the services giving rise to such Account have not
been performed by the Borrower or such Subsidiary;


 


(i)            with
respect to which any check or other instrument of payment has been returned
uncollected for any reason;


 


(j)            which
is owed by an Account Debtor which (i) has applied for, suffered, or
consented to the appointment of any receiver, interim receiver, receiver and
manager, custodian, trustee, or liquidator of its assets, (ii) has had
possession of all or a material part of its property taken by any receiver,
interim receiver, receiver and manager, custodian, trustee or liquidator,
(iii) has filed, or has had filed against it, any request or petition for
liquidation, reorganization, arrangement, adjustment of debts, adjudication as
bankrupt, winding-up, or voluntary or involuntary case under any state,
provincial or federal bankruptcy laws, (iv) to the knowledge of the
Borrower or any Subsidiary, has admitted in writing its inability, or is
generally unable to, pay its debts as they become due, (v) to the
knowledge of the Borrower or any Subsidiary, has become insolvent, or
(vi) has ceased operation of its business;


 


(k)           which
is owed by any Account Debtor which has sold all or substantially all of its
assets;


 


(l)            which
is owed by an Account Debtor which (i) does not maintain its chief
executive office in the U.S. or Canada or (ii) is not organized under
applicable law of the U.S., any state of the U.S., the federal laws of Canada
or the laws of a province of Canada unless, in any case, such Account is backed
by a letter of credit or other credit support acceptable to Lender;


 


(m)          which
is owed in any currency other than US Dollars or Canadian Dollars;


 


(n)           which
is owed by (i) the government (or any department, agency, public
corporation, or instrumentality thereof) of any country other than the United
States of America, unless such Account is backed by a letter of credit
acceptable to Lender and which is in the possession of Lender, or (ii) the
government of the U.S., or any department, agency, public corporation, or
instrumentality thereof, unless the Federal Assignment of Claims Act of 1940,
as amended (31 U.S.C. § 3727 et  seq. and 41 U.S.C. § 15 et
seq.), and any other steps necessary to perfect the Lien of Borrower in
such Account have been complied with to Lender’s satisfaction; provided,
that the eligibility criteria set forth in this clause (n) shall not apply to
Accounts of the Borrower and its Subsidiaries to which this 


 


8

















 


clause (n) would otherwise apply
having an aggregate amount of not more than $250,000;


 


(o)           which
is owed by any Affiliate, employee, director, or officer of the Borrower;


 


(p)           which,
for any Account Debtor, exceeds a credit limit determined by Lender of which
Borrower has been previously notified, to the extent of such excess;


 


(q)           which
is owed by an Account Debtor or any Affiliate of such Account Debtor which is
the holder of any payment obligations issued or incurred by the Borrower or any
such Subsidiary, but only to the extent of such payment obligations;


 


(r)            which
is subject to any counterclaim, deduction, defense, setoff or dispute, but only
to the extent of the amount of such counterclaim, deduction, defense, setoff or
dispute, unless Lender, in its Reasonable Credit Judgment, has established an
appropriate Reserve and determines to include such Account as an Eligible
Account;


 


(s)           which
is evidenced by any promissory note, chattel paper, or instrument;


 


(t)            which
is owed by an Account Debtor located in any jurisdiction that requires, as a
condition to access to the courts of such jurisdiction, that a creditor qualify
to transact business, file a business activities report or other report or
form, or take one or more other actions, unless the Borrower or such Subsidiary
have so qualified, filed such reports or forms, or taken such actions (and, in
each case, paid any required fees or other charges), except to the extent the
Borrower or such Subsidiary may qualify subsequently as a foreign entity
authorized to transact business in such state or jurisdiction and gain access
to such courts, without incurring any cost or penalty reasonably viewed by
Lender to be material in amount, and such later qualification cures any access
to such courts to enforce payment of such Account;


 


(u)           with
respect to which the Borrower or such Subsidiary has made any agreement with
the Account Debtor for any reduction thereof, but only to the extent of such
reduction, other than discounts and adjustments given in the ordinary course of
business; or


 


(v)           which
Lender determines in its Reasonable Credit Judgment may not be paid by reason
of the applicable Account Debtor’s inability to pay.


 


In the event that an Account which was previously an Eligible Account
ceases to be an Eligible Account hereunder, Borrower shall notify Lender
thereof (i) within one Business Day, in the case of Accounts having a face
amount of more than $1,000,000 in the 


 


9

















 


aggregate and (ii) on and at the
time of submission to Lender of the next Availability Certificate, in all other
cases.


 


Eligible Availability means the positive difference,
if any, of (i) the sum of (a) 85% of the amount of the Eligible Accounts of the
Borrower and its Subsidiaries at such time (with any Eligible Account
denominated in Canadian Dollars being included in its Dollar Equivalent amount
for this purpose), plus  (b)
65% of the Eligible Inventory of the Borrower and its Subsidiaries, valued at
the lower of cost or market on a first-in first-out basis, minus (ii)
Reserves, if any, then in effect.


 


Eligible Inventory means, at any time, the
Inventory owned by the Borrower and its Subsidiaries; provided, that,
without limiting Lender’s discretion separately provided for herein, Eligible
Inventory of the Borrower and its Subsidiaries shall not include any Inventory
of the Borrower and its Subsidiaries:


 


(a)      which
is not subject to a first priority perfected Lien in favor of Lender;


 


(b)      which
is subject to any Lien other than Liens permitted hereunder;


 


(c)      which
is, in Lender’s Reasonable Credit Judgment, slow moving, obsolete, unmerchantable,
defective, unfit for sale, not salable at prices approximating at least the
cost of such Inventory in the ordinary course of business or unacceptable due
to age, type, category and/or quantity;


 


(d)      with
respect to which any covenant, representation, or warranty contained in this
Agreement or any Collateral Document has been breached or is not true;


 


(e)      which
does not conform to all standards imposed by any governmental authority;


 


(f)       which
is not finished goods or which constitutes work-in-process, subassemblies
(unless Lender determines, in its Reasonable Credit Judgment, to include such
work-in-process or subassemblies as Eligible Inventory), packaging and shipping
material, manufacturing supplies, display items, bill-and-hold goods, returned
or repossessed goods (other than goods that are undamaged and able to be resold
in the ordinary course of business), defective goods, goods held on
consignment, goods to be returned to the Borrower or a Subsidiary or goods
which are not of a type held for sale in the ordinary course of business;


 


(g)      which
is not located in the U.S. or Canada or which is in transit with a common
carrier from vendors and suppliers;


 


(h)      which
is located in any location leased by the Borrower or one of its Subsidiaries
unless (i) the lessor has delivered to Lender a collateral access
agreement reasonably acceptable to Lender or (ii) a Reserve for rent,
charges, and other amounts due or to become due with respect to 


 


10

















 


such facility has been established by Lender in its Reasonable Credit
Judgment;


 


(i)       which
is located in any third party warehouse or is in the possession of a bailee,
unless (i) such warehouseman or bailee has delivered to Lender a
collateral access agreement reasonably acceptable to Lender and such other
documentation as Lender may require or (ii) an appropriate Reserve has
been established by Lender in its Reasonable Credit Judgment;


 


(j)       which
is the subject of a consignment by the Borrower or a Subsidiary as consignor;


 


(k)      which
is perishable;


 


(l)       which
is subject to any negotiable document; or


 


(m)     which
contains or bears any intellectual property rights licensed to the Borrower or
a Subsidiary unless Lender is satisfied that the holder of a Lien in such
Inventory may sell or otherwise dispose of such Inventory without
(i) infringing the rights of such licensor, (ii) violating any
contract with such licensor or (iii) incurring any liability with respect
to payment of royalties other than royalties incurred pursuant to sale of such
Inventory under the current licensing agreement.


 


In the event that Inventory which was previously Eligible Inventory
ceases to be Eligible Inventory hereunder, Borrower shall notify Lender thereof
(i) within one Business Day, in the case of Inventory having a value of more
than $1,000,000 in the aggregate and (ii) on and at the time of submission to
Lender of the next Availability Certificate, in all other cases.


 


Environmental Claims
means all claims, however asserted, by any governmental, regulatory or judicial
authority or other Person alleging potential liability or responsibility for
violation of any Environmental Law, or for release or injury to the environment
or any Person or property.


 


Environmental Laws
means any applicable federal, state, provincial, local, municipal, foreign,
international, multinational, constitution, law, ordinance, principle of common
law, regulation, statute, permit or treaty together with all administrative
orders, directed duties, requests, licenses and authorizations of, and
agreements with, any governmental authority, in each case relating to any
matter arising out of or relating to health and safety, or pollution or
protection of the environment or workplace, including any of the foregoing
relating to the presence, use, production, generation, handling, transport,
treatment, storage, disposal, distribution, discharge, release, control or
cleanup of any Hazardous Substance.


 


ERISA
means the Employee Retirement Income Security Act of 1974, as amended.


 


External Credit Facility
means that certain Credit Agreement dated as of even date herewith by and among
the Owner, as “Borrower” thereunder, Madison Capital Funding LLC, as 


 


11

















 


Syndication Agent and Co-Lead
Arranger, The CIT Group/Business Credit, Inc., as Administrative Agent,
Collateral Agent and Co-Lead Arranger, and the financial institutions from time
to time party thereto as lenders, as the same may be amended, restated or
modified from time to time.


 


Event of Default
means any of the events described in Section 8.1.


 


Exchange Rate
means with respect to any non-U.S. Dollar currency on any date, the rate at
which such currency may be exchanged into U.S. Dollars as set forth on such
date on the relevant Reuters currency page at or about 11:00 A.M., London time,
on such date. In the event that such rate does not appear on any Reuters
currency page or is otherwise unavailable to Lender, the “Exchange Rate” with
respect to such non-U.S. Dollar currency shall be determined by reference to
the Wall Street Journal or such other publicly available service for displaying
exchange rates as may be reasonably agreed upon by Lender and Borrower.


 


Federal Funds Rate
means, for any day, a rate per annum (rounded upward to the nearest 1/100th of
1%) equal to the rate published by the Federal Reserve Bank of New York on the
preceding Business Day or, if no such rate is so published, the average rate
per annum, as determined by Lender, quoted for overnight Federal Funds transactions
last arranged prior to such day.


 


Fiscal Quarter
means a fiscal quarter of a Fiscal Year.


 


Fiscal Year
means the fiscal year of Borrower and the Subsidiaries, which period shall be
the 12-month period ending on December 31 of each year.


 


Fixed Charge Coverage Ratio
means, for any Computation Period, the ratio of (a) the total for such
period of EBITDA minus the sum for such period of (i) all income taxes, and tax
distributions described in Section 7.3, paid or payable (without
duplication) in cash by Borrower and the Subsidiaries, (ii) all Capital
Expenditures, and (iii) management fees paid in cash to Manager during such
period or payable to Manager within 30 days of the end of such period (other
than management fees paid concurrent with the Closing Date or within 15 days
after the Closing Date) to (b) the sum for such period of
(i) Interest Expense accrued for such Computation Period and paid or
payable in cash at any time by Borrower and the Subsidiaries, plus
(ii) required payments of principal of Funded Debt (including the Term
Loans but excluding the Revolving Loans and excluding required payments in
respect of earn-out payments permitted hereunder and otherwise permitted under
the terms of the External Credit Facility).


 


Forest Capital Lease
means, collectively, that certain Lease Agreement dated December 29, 2006 by
and between Spirit Master Funding and Ivex Packaging and Atlas Real Estate New
Castle LLC with respect to certain property located in Bridgeview, Illinois,
and that certain Lease Agreement dated December 29, 2006 by and between Spirit
Master Funding and Ivex Packaging and New Castle with respect to certain
property located in New Castle, Pennsylvania.


 


FRB
means the Board of Governors of the Federal Reserve System or any successor
thereto.


 


12

















 


Funded Debt
means, as to any Person, all Debt of such Person that matures more than one
year from the date of its creation (or is renewable or extendible, at the
option of such Person, to a date more than one year from such date).


 


GAAP
means, for Subsidiaries that are not Canadian Subsidiaries, generally accepted
accounting principles in effect in the United States of America set forth from
time to time in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board (or agencies
with similar functions of comparable stature and authority within the U.S.
accounting profession), which are applicable to the circumstances as of the
date of determination, and, for Canadian Subsidiaries, means generally accepted
accounting principles in effect in Canada as recommended in the Handbook of the
Canadian Institute of Chartered Accountants and consistently applied as of the
date of determination.


 


Guarantee and Collateral
Agreement means the Guarantee and Collateral Agreement,
dated as of the Closing Date, by each Loan Party in favor of Lender, as
amended, restated or otherwise modified from time to time.


 


Hazardous Substances
means hazardous waste, hazardous substance, pollutant, contaminant, toxic
substance, oil, hazardous material, chemical or other substance regulated by
any Environmental Law.


 


Hedging Obligation
means, with respect to any Person, any liability of such Person under any
interest rate, currency or commodity swap agreement, cap agreement or collar
agreement, and any other agreement or arrangement designed to protect a Person
against fluctuations in interest rates, currency exchange rates or commodity
prices. The amount of any Person’s obligation in respect of any Hedging
Obligation shall be deemed to be the incremental liability, if any, with
respect to such Hedging Obligation that would be reflected in the financial
statements of such Person in accordance with GAAP.


 


Interest Coverage Ratio
means, for any Computation Period, the ratio of (a) the remainder of (i) EBITDA
for such Computation Period minus (ii) the aggregate amount of
management fees paid in cash by Borrower pursuant to the Management Agreement
to (b) Interest Expense accrued for such Computation Period and paid or payable
in cash at anytime by Borrower and the Subsidiaries (excluding in all instances
any interest paid in kind).


 


Interest Expense
means for any period the consolidated interest expense of Borrower and the
Subsidiaries for such period (including all imputed interest on Capital
Leases).


 


Interest Period
means, as to any LIBOR Loan:  (a) with
respect to an initial request by Borrower for a LIBOR Loan or the conversion of
a Base Rate Loan to a LIBOR Loan, at the option of Borrower, a one-month,
two-month, three-month or six-month period commencing on the borrowing or
conversion date with respect to such LIBOR Loan and ending one month, two months,
three months or six months thereafter, as applicable, (b) with respect to any
continuation of a LIBOR Loan, at the option of Borrower a one-month, two-month,
three-month or six-month period commencing on the last day of the immediately
preceding Interest Period applicable to such LIBOR Loan and ending one month,
two months, three months or six months thereafter, as 


 


13

















 


applicable; provided  that
(i) if any Interest Period would otherwise end on a day which is not a Business
Day, such Interest Period shall be extended to the next succeeding Business
Day, and (ii) if any Interest Period begins on the last Business Day of any
month, or on a day for which there is no numerically corresponding day in the month
in which such Interest Period ends, such Interest Period shall end on the last
Business Day of the month in which such Interest Period ends; (c) Borrower may
not select any Interest Period for a Revolving Loan which would extend beyond
the scheduled Termination Date; and (d) Borrower may not select any Interest
Period for the Term Loans if, after giving effect to such selection, the
aggregate principal amount of the portion of the applicable Term Loan having
Interest Periods ending after any date on which an installment of such Term
Loan is scheduled to be repaid would exceed the aggregate principal amount of
the Term Loan scheduled to be outstanding after giving effect to such
repayment.


 


Inventory
has the meaning set forth in the Guarantee and Collateral Agreement.


 


Investment
means, with respect to any Person, (a) the purchase of any debt or equity
security of any other Person, (b) the making of any loan or advance to any
other Person, (c) becoming obligated with respect to a Contingent
Obligation in respect of obligations of any other Person (other than travel and
similar advances to employees in the ordinary course of business) or
(d) the making of an Acquisition.


 


Investment Affiliate
means, with respect to Owner, any fund or investment vehicle that (a) is
organized by Owner for the purpose of making equity or debt investments in one
or more companies and (b) is controlled by Owner. For purposes of this
definition “control” means the power to direct or cause the direction of
management and policies of a Person, whether by contract or otherwise.


 


IRC
means the Internal Revenue Code of 1986, as amended.


 


Legal Costs
means, with respect to any Person, (a) all reasonable fees and charges of
any counsel, accountants, auditors, appraisers, consultants and other
professionals to such Person, (b) the reasonable allocable cost of
internal legal services of such Person and all reasonable disbursements of such
internal counsel and (c) all court costs and similar legal expenses.


 


Lender
has the meaning set forth in the Preamble.


 


LIBOR Loan
means any Loan which bears interest at a rate determined by reference to the
LIBOR Rate.


 


LIBOR Rate
means, with respect to any LIBOR Loan for any Interest Period, a rate of
interest equal to the quotient obtained by dividing:  (a) at Lender’s election, (i) LIBOR
for such Interest Period as quoted to Lender by JPMorgan Chase Bank (or any
successor thereof) two (2) Business Days prior to the first day of such
Interest Period, or (ii) the rate of interest determined by Lender at which
deposits in US Dollars are offered for such Interest Period as presented on the
Reuters Screen LIBOR 01 Page at 11:00 a.m. (London time) two (2) Business Days
prior to the first day of such Interest Period (provided  that if
two or more offered rates are presented on the Reuters Screen LIBOR 01 Page for
such Interest Period, the arithmetic mean of all such rates, as determined by
Lender, will be the rate elected); by (b) a number equal to 1.00 


 


14

















 


minus the Eurocurrency Reserve
Requirements, if any, in effect on the day which is two (2) Business Days prior
to the beginning of such Interest Period. If no such rate appears on the
Reuters Screen LIBOR 01 Page, Lender shall use the applicable rate published in
the “Money Rates” section of The Wall Street Journal or another national
publication selected by Lender).


 


Lien
means, with respect to any Person, any interest granted by such Person in any
real or personal property, asset or other right owned or being purchased or
acquired by such Person which secures payment or performance of any obligation
and shall include any mortgage, lien, encumbrance, charge or other security
interest of any kind, whether arising by contract, as a matter of law, by
judicial process or otherwise.


 


Loan Documents
means this Agreement, the Notes, if any, the Collateral Documents and all
documents, instruments and agreements delivered in connection with the
foregoing, all as amended, restated or otherwise modified from time to time.


 


Loan Party
means Borrower and each Subsidiary.


 


Loans
means Revolving Loans and Term Loans.


 


Management Agreement
means that certain Management Services Agreement dated as of November     ,
2007 between Borrower and the Manager, as amended, restated, supplemented or
otherwise modified from time to time.


 


Manager
means Atlas Industries Management LLC, a Delaware limited liability company.


 


Margin Stock
means any “margin stock” as defined in Regulation T, U or X of the FRB.


 


Material Adverse Effect
means (a) a material adverse change in, or a material adverse effect upon,
the financial condition, operations, assets, business, properties or prospects
of the Loan Parties taken as a whole, (b) a material impairment of the
ability of the Borrower and the other Loan Parties to perform their Obligations
under the Loan Documents taken as a whole or (c) a material adverse effect
upon any substantial portion of the Collateral under the Collateral Documents
or upon the legality, validity, binding effect or enforceability against the
Borrower and the Loan Parties of the Loan Documents taken as a whole.


 


Mortgage
means a mortgage, deed of trust, leasehold mortgage or similar instrument
granting Lender a Lien on a real property interest of any Loan Party, each as
amended, restated or otherwise modified from time to time.


 


Multiemployer Pension Plan
means a multiemployer plan, as defined in Section 4001(a)(3) of ERISA, to
which Borrower or any member of the Controlled Group may have any liability.


 


15














 


Net Cash Proceeds
means:


 


(a)           with
respect to any Disposition, the aggregate cash proceeds (including cash
proceeds received pursuant to policies of insurance and by way of deferred
payment of principal pursuant to a note, installment receivable or otherwise,
but only as and when received) received by any Loan Party pursuant to such
Disposition net of (i) the reasonable direct costs relating to such
Disposition (including sales commissions and legal, accounting and investment
banking fees, commissions and expenses and, in the case of a Disposition of any
asset, costs of preparing such asset for sale), (ii) any portion of such
proceeds deposited in an escrow account pursuant to the documentation relating
to such Disposition (provided that such amounts shall be treated as Net Cash
Proceeds upon their release from such escrow account to the applicable Loan
Party), (iii) taxes paid or reasonably estimated by Borrower to be payable
as a result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements), (iv) amounts required to be
applied to the repayment of any Debt secured by a Lien prior to the Lien of
Lender on the asset subject to such Disposition and (v) with respect to
any Disposition described in clause (b) or (c) of the definition thereof
(without regard for the exclusions in such definition), all money actually
applied within 180 days to repair, replace or reconstruct damaged property or
property affected by loss, destruction, damage, condemnation, confiscation,
requisition, seizure or taking, all of the costs and expenses reasonably
incurred in connection with the collection of such proceeds, award or other
payments, and any amounts retained by or paid to parties having superior rights
to such proceeds, awards or other payments; and


 


(b)           with
respect to any issuance of equity securities, the aggregate cash proceeds
received by Borrower or any Subsidiary pursuant to such issuance, net of the
reasonable direct costs relating to such issuance (including reasonable broker,
sales and underwriter’s commission and all legal fees and expenses).


 


Non-Senior Debt
means the Term B Loans plus any unsecured Debt of Borrower or a Subsidiary
which has subordination terms, covenants, pricing and other terms which have
been approved in writing by Lender.


 


Note
means a promissory note substantially in the form of Exhibit D, if any, which
may be used from time to time to evidence any of the Loans, as the same may be
amended, restated or otherwise modified from time to time.


 


Obligations
means all liabilities, indebtedness and obligations (monetary (including
post-petition interest, allowed or not) or otherwise) of any Loan Party under
this Agreement, any other Loan Document, any Collateral Document or any other
document or instrument executed in connection herewith or therewith and all
Hedging Obligations permitted hereunder which are owed to Lender or its
Affiliates, in each case howsoever created, arising or evidenced, whether
direct or indirect, absolute or contingent, now or hereafter existing, or due
or to become due, and whether or not a claim for any of the foregoing is
allowed in whole or in part in any proceeding under the Bankruptcy Code with
respect to any Loan Party.


 


Owner
means Atlas Industries Holdings LLC, a Delaware limited liability company.


 


16

















 


Paid in Full
means, with respect to any Obligations, (a) the payment in full in cash
and performance of all such Obligations, and (b) the termination of all
Commitments relating to such Obligations.


 


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


 


Pension Plan
means a “pension plan”, as such term is defined in Section 3(2) of ERISA,
which is subject to Title IV of ERISA (other than a Multiemployer Pension
Plan), or, as applicable, a “registered pension plan” as such term is defined
in the Income Tax Act (Canada), and, in any case, to which Borrower or any
member of the Controlled Group or a Canadian Subsidiary has any liability.


 


Permitted Management Fees
means management or consulting fees payable pursuant to the terms of the
Management Agreement in an aggregate amount not to exceed $1,020,000 in any
fiscal year.


 


Person
means any natural person, corporation, partnership, trust, limited liability
company, association, governmental authority or unit, or any other entity,
whether acting in an individual, fiduciary or other capacity.


 


Prepayment Premium
means, (a) in connection with any prepayment of the Term B Loans pursuant to
Section 2.8.1, an amount equal to the applicable percentage of the principal
amount of the Term B Loans or portion thereof to be prepaid as follows:


 


	
  If prepaid during the 12-month

  period ending November

  	
   

  	
  Applicable Percentage

  	
   

  
	
  2008

  	
   

  	
  5.0

  	
  %

  
	
  2009

  	
   

  	
  4.0

  	
  %

  
	
  2010

  	
   

  	
  3.0

  	
  %

  
	
  2011

  	
   

  	
  2.0

  	
  %

  
	
  2012 and
  thereafter

  	
   

  	
  0.0;

  	
  %

  



 


and (b) in connection with any
prepayment of the Term A Loans pursuant to Section 2.8.1, an amount equal to
the applicable percentage of the principal amount of the Term A Loans or
portion thereof to be prepaid as follows:


 


	
  If prepaid during the 12-month

  period ending November    

  	
   

  	
  Applicable Percentage

  	
   

  
	
  2008

  	
   

  	
  1.0

  	
  %

  
	
  2009

  	
   

  	
  0.5

  	
  %

  
	
  2010 and
  thereafter

  	
   

  	
  0.0

  	
  %

  



 


Reasonable Credit Judgment
means in respect of eligibility criteria and similar matters, reasonable credit
judgment from the perspective of a senior secured lender in an asset 


 


17

















 


based loan transaction, and, as
it relates to the establishment of Reserves or the adjustment or imposition of
exclusionary criteria, shall require that (i) such establishment, adjustment or
imposition after the Closing Date shall be made following consultation with the
Borrower with not less than two Business Days’ prior notice to Borrower, unless
either exigent circumstances exist that make such prior consultation and the
giving of prior notice impracticable or one or more Events of Default have
occurred and are continuing, (ii) no Reserves shall be established in respect
of matters that have been taken into account in determining Eligible Accounts
and Eligible Inventory, as applicable and (iii) any such Reserve (or adjustment
or imposition of exclusionary criteria), shall have a reasonable basis and
shall be in an amount that bears a reasonable relation to the matter giving
rise to such Reserve (or adjustment of imposition of exclusionary criteria).


 


Related Transactions
means the transactions contemplated by the Stock Purchase Agreement.


 


Reserve
means any and all reserves which Lender deems necessary, in its Reasonable
Credit Judgment, to from time to time establish against the gross amounts of
Eligible Accounts and Eligible Inventory (including, without limitation,
reserves for rent at locations leased by the Borrower or a Subsidiary and for
which no collateral access agreement reasonably acceptable to Lender is in
effect, to the extent property at such locations is included in the
Availability Certificate; reserves for consignee’s, warehousemen’s and bailee’s
charges at locations for which no collateral access agreement reasonably
acceptable to Lender is in effect, to the extent property at such locations is
included in the Availability Certificate; reserves for dilution of Accounts;
reserves for Inventory shrinkage; reserves for customs charges and shipping
charges related to any Inventory in transit; reserves for potential
environmental exposure and contingent liabilities of the Borrower and its
Subsidiaries; reserves for uninsured losses of the Borrower and its
Subsidiaries and reserves for taxes, fees, assessments, and other governmental
charges).


 


Revolving Loan Commitment
means $21,000,000 (as reduced from time to time pursuant to the terms hereof),
plus such additional amounts, if any, that Lender may, in its sole discretion,
from time to time commit to advance as Revolving Loans in connection with one
or more Acquisitions.


 


Revolving Loans
has the meaning set forth in Section 2.1.1.


 


Senior Debt
means, as of any day, the Revolving Loans, to the extent outstanding at the end
of such day, plus the aggregate principal amount of the Term A Loans
outstanding at the end of such day.


 


Solvent
means, with respect to any Person on any date, that as of such date, (a) the
fair market value of its assets is greater than the amount of its liabilities
(including disputed, contingent and unliquidated liabilities) as such value is
established and liabilities evaluated, (b) the present fair saleable value of
its assets is not less than the amount that will be required to pay the
probable liability on its debts as they become absolute and matured, (c) it is
able to realize upon its assets and pay its debts and other liabilities
(including disputed, contingent and unliquidated liabilities) as they mature in
the normal course of business, (d) it does not intend to, and does not believe
that it will, incur debts or liabilities beyond its ability to pay as such
debts 


 


18

















 


and liabilities mature and (e)
it is not engaged in business or a transaction, and is not about to engage in
business or a transaction, for which its property would constitute unreasonably
small capital.


 


Stock Purchase Agreement
means that certain Purchase Agreement dated as of November     ,
2007 by and among the Borrower, as the “Buyer” thereunder, the Owner, as the
“Parent” thereunder, the Target, Forest Investments LLC, TRAL Investments LLC
and the other Persons named therein, collectively, as the “Sellers,” under and
pursuant to which the Borrower will purchase all of the outstanding limited
liability company interests of the Target from the Sellers.


 


Subsidiary
means, with respect to any Person, a corporation, partnership, limited
liability company, unlimited liability company or other entity of which such
Person owns, directly or indirectly, such number of outstanding shares or other
equity interests as to have more than 50% of the ordinary voting power for the
election of directors or other managers of such corporation, partnership,
limited liability company or other entity. Unless the context otherwise
requires, each reference to Subsidiary or Subsidiaries herein shall be a
reference to Subsidiary or Subsidiaries of Borrower. In all cases, “Subsidiary”
shall mean and include Forest Resources LLC, a Delaware limited liability
company.


 


Target
means Forest Resources LLC, a Delaware limited liability company.


 


Term A Loan Commitment
means $15,500,000 plus, after the Closing Date, such additional amounts, if
any, that Lender may, in its sole discretion, from time to time advance as Term
A Loans in connection with one or more Acquisitions.


 


Term A Loan Maturity Date
means November     , 2013 or such earlier date on which the
Commitments terminate pursuant to Section 8.


 


Term A Loans
means a loan from Lender to Borrower in the principal amount of the Term A Loan
Commitment on the Closing Date, together with such other loans, if any,
pursuant to the Term A Loan Commitment.


 


Term B Loan Commitment
means $31,000,000 plus, after the Closing Date, such additional amounts, if
any, that Lender may, in its sole discretion, from time to time advance as Term
B Loans in connection with one or more Acquisitions.


 


Term B Loan Maturity Date
means November     , 2013 or such earlier date on which the
Commitments terminate pursuant to Section 8.


 


Term B Loans
means a loan from Lender to Borrower in the principal amount of the Term B Loan
Commitment on the Closing Date, together with such other loans, if any,
pursuant to the Term B Loan Commitment.


 


Term Loans
means the Term A Loans and the Term B Loans, collectively.


 


Termination Date
means November     , 2012 or such earlier date on which the
Revolving Loan Commitment terminates pursuant to Section 2.8 or Section
8.


 


19

















 


Total Debt
means, as of any day, all Debt (other than Debt described in clause (h) of the
definition thereof and Debt of any Loan Party to another Loan Party) of
Borrower and the Subsidiaries at the end of such day, determined on a
consolidated basis.


 


Total Debt to EBITDA Ratio
means, as of the last day of any Fiscal Quarter, the ratio of (a) Total Debt as
of such day to (b) EBITDA for the Computation Period ending on such day.


 


Transaction Services Fee
means a transaction fee payable by the Borrower or any Subsidiary to Manager
(or an Affiliate of Manager) in connection with an acquisition or sale of any
Subsidiary that is otherwise permitted under this Agreement and under the terms
of the External Credit Facility.


 


Wholly-Owned Subsidiary
means, as to any Person, another Person all of the equity interests of which
(except directors’ qualifying shares) are at the time directly or indirectly
owned by such Person and/or another Wholly-Owned Subsidiary of such Person. Unless
the context otherwise requires, each reference to Wholly-Owned Subsidiary or
Wholly-Owned Subsidiaries herein shall be a reference to Wholly-Owned
Subsidiary or Wholly-Owned Subsidiaries of Borrower.


 


1.2           Interpretation.


 


In the case of this Agreement
and each other Loan Document, (a) the meanings of defined terms are
equally applicable to the singular and plural forms of the defined terms;
(b) Annex, Exhibit, Schedule and Section references are to such Loan
Document unless otherwise specified; (c) the term “including” is not
limiting and means “including but not limited to”; (d) in the computation
of periods of time from a specified date to a later specified date, the word
“from” means “from and including”; the words “to” and “until” each mean “to but
excluding”, and the word “through” means “to and including”; (e) unless
otherwise expressly provided in such Loan Document, (i) references to
agreements and other contractual instruments shall be deemed to include all
subsequent amendments and other modifications thereto, but only to the extent
such amendments and other modifications are not prohibited by the terms of any
Loan Document, and (ii) references to any statute or regulation shall be
construed as including all statutory and regulatory provisions amending,
replacing, supplementing or interpreting such statute or regulation;
(f) this Agreement and the other Loan Documents may use several different
limitations, tests or measurements to regulate the same or similar matters, all
of which are cumulative and each shall be performed in accordance with its
terms; and (g) this Agreement and the other Loan Documents are the result
of negotiations among and have been reviewed by counsel to Lender, Borrower and
the other parties thereto and are the products of all parties; accordingly,
they shall not be construed against Lender merely because of Lender’s involvement
in their preparation.


 


Section 2.               Credit
Facilities.


 


2.1           Commitments.


 


On and subject to the terms and
conditions of this Agreement, Lender agrees as follows:


 


20

















 


2.1.1        Revolving
Loan Commitments.


 


Lender will make loans to
Borrower on a revolving basis (“Revolving Loans”) from time to time and
Borrower may repay such loans from time to time until the Termination Date in
such amounts as Borrower may request from Lender; provided, that after giving effect
to such Revolving Loans, the Revolving Loans outstanding will not at any time
exceed the Borrowing Availability.


 


2.1.2        Term
Loan Commitments.


 


Lender agrees to make (a) a Term
A Loan to Borrower on the Closing Date in an amount equal to the Term A Loan
Commitment as of the Closing Date, and (b) a Term B Loan to Borrower on the
Closing Date in an amount equal to the Term B Loan Commitment as of the Closing
Date. Lender shall have no obligation to make Term Loans after the Closing Date.
Term Loans which are repaid or prepaid by Borrower, in whole or in part, may
not be re-borrowed.


 


2.2           Loan
Procedures.


 


2.2.1        Loan
Types.


 


Each Loan (other than the Term B
Loans and otherwise subject to Section 2.5.1(b)) shall be either a Base Rate
Loan or a LIBOR Loan, as Borrower shall specify in the related notice of
borrowing or conversion pursuant to Section 2.2.2 or 2.2.3.
Base Rate Loans and LIBOR Loans may be outstanding at the same time, provided
that not more than five different Interest Periods shall exist among
outstanding LIBOR Loans at any one time. Notwithstanding the foregoing or any
other provision of this Agreement, Borrower may not select any Interest Period
for a LIBOR Loan which is longer than one month prior to the earlier of (a) 90
days after the Closing Date and (b) the date that Lender at its reasonable
discretion notifies Borrower that it may select a different Interest Period for
any LIBOR Loans. Notwithstanding anything to the contrary set forth in this
Agreement, any Loans requested to be made or converted in respect of the
Revolving Loan Commitment is subject to the then applicable interest rate on
any outstanding Revolving Loans and in any case all such Revolving Loans shall
bear the same interest rate.


 


2.2.2        Borrowing. 


 


Borrower shall give written
notice or telephonic notice (followed immediately by written confirmation
thereof) to Lender of each proposed borrowing of a Revolving Loan not later
than (a) in the case of a Base Rate borrowing, 11:00 a.m. New York City
time at least one (1) Business Day prior to the proposed date of such
borrowing, and (b) in the case of a LIBOR borrowing, 11:00 a.m. New York
City time at least four (4) Business Days prior to the proposed date of such
borrowing; provided, however, that Lender shall have no obligation to advance
such borrowings more than one time each week, except as otherwise provided in
Section 2.2.1. Each such notice shall be effective upon receipt by Lender,
shall be irrevocable, and shall specify, in the form of a Borrowing Notice, the
date, amount and type of borrowing and, in the case of  LIBOR borrowing, the initial Interest Period
therefor. So long as Borrower’s request is timely made and the conditions
precedent set forth in Section 4 with respect to such borrowing have 


 


21

















 


been satisfied, Lender shall pay
over the proceeds of such borrowing request to Borrower on the requested
borrowing date. Each borrowing shall be on a Business Day. Each Base Rate
borrowing shall be in an aggregate amount of $250,000 or of any integral
multiple of $50,000 in excess thereof, and each LIBOR borrowing shall be in an
aggregate amount of $250,000 or of any integral multiple of $50,000 in excess
thereof.


 


2.2.3        Conversion;
Continuation.


 


(a)          Subject
to Section 2.2.1, Borrower may, upon irrevocable written notice to
Lender in accordance with clause (b) below, elect (i) as of any Business
Day, to convert any Loans (or any part thereof in an aggregate amount of not
less than $250,000 or a higher integral multiple of $50,000) into Loans of the
other type or (ii) as of the last day of the applicable Interest Period,
to continue any LIBOR Loans having Interest Periods expiring on such day (or
any part thereof in an aggregate amount not less than $250,000 or a higher integral
multiple of $50,000) for a new Interest Period; provided, that any conversion
of a LIBOR Loan on a day other than the last day of an Interest Period therefor
shall be subject to Section 3.5.


 


(b)         Borrower
shall give written or telephonic notice (followed immediately by written
confirmation thereof) to Lender of each proposed conversion or continuation not
later than (i) in the case of conversion into Base Rate Loans,
11:00 a.m. New York City time at least one Business Day prior to the proposed
date of such conversion and (ii) in the case of conversion into or
continuation of LIBOR Loans, 11:00 a.m. New York City time at least four
Business Days prior to the proposed date of such conversion or continuation,
specifying in each case in the form of a Conversion/Continuation Notice:  (i) the proposed date of conversion or
continuation; (ii) the aggregate amount of Loans to be converted or
continued; (iii) the type of Loans resulting from the proposed conversion
or continuation; and (iv) in the case of conversion into, or continuation
of, LIBOR Loans, the duration of the requested Interest Period therefor.


 


(c)          If
upon the expiration of any Interest Period applicable to LIBOR Loans, Borrower
has failed to select timely a new Interest Period to be applicable to such
LIBOR Loans, Borrower shall be deemed to have elected to convert such LIBOR
Loans into Base Rate Loans effective on the last day of such Interest Period.


 


(d)         Notwithstanding
anything in this Agreement to the contrary, Borrower shall have the ability to
convert from a Base Rate Loan to a LIBOR Loan, or from a LIBOR Loan to a Base
Rate, with respect to each of the Term A Loan, the Term B Loan and the
Revolving Loans not more than once during any Fiscal Quarter.


 


2.3           Certain
Conditions.


 


Notwithstanding any other
provision of this Agreement, Lender shall not have an obligation to make any
Loan, or to permit the continuation of any expiring LIBOR Loan as a LIBOR Loan,
or to permit any conversion into any LIBOR Loans, if an Event of Default or
Default exists.


 


22

















 


2.4           Loan
Accounting.


 


2.4.1        Recordkeeping.


 


Lender shall record in its
records the date and amount of each Loan made and each repayment or conversion
thereof and, in the case of each LIBOR Loan, the dates on which each Interest
Period for such Loan shall begin and end. The aggregate unpaid principal amount
so recorded shall be rebuttably presumptive evidence of the principal amount of
the Loans owing and unpaid. The failure to so record any such amount or any
error in so recording any such amount shall not, however, limit or otherwise
affect the Obligations of Borrower hereunder or under any Note to repay the
principal amount of the Loans hereunder, together with all interest accruing
thereon.


 


2.5           Interest.


 


2.5.1        Interest
Rates.


 


(a)          Other
than, in each case, with respect to the Term B Loans, the applicable per annum
interest rate for which shall be as set forth in clause (b) of this Section
2.5.1, Borrower promises to pay interest on the unpaid principal amount of each
Loan for the period commencing on the date of such Loan until such Loan is paid
in full as follows:  (a) at all times
which such Loan is a Base Rate Loan, at a rate per annum equal to the sum of the
Base Rate from time to time in effect plus the Applicable Margin; and (b) at
all times while such Loan is a LIBOR Loan, at a rate per annum equal to the
LIBOR Rate applicable to each Interest Period for such Loan plus the Applicable
Margin; provided, that (i) at any time an Event of Default exists, if
requested by Lender, the Applicable Margin corresponding to each Loan shall be
increased by two percentage points per annum (and, in the case of Obligations
not subject to an Applicable Margin, such Obligations shall bear interest at
the Base Rate applicable to Revolving Loans plus the Applicable Margin plus two
percentage points per annum), (ii) any such increase may thereafter be
rescinded by Lender, and (iii) upon the occurrence of an Event of Default
under Section 8.1.1 or 8.1.3, any such increase described in
the foregoing clause (i) shall occur automatically. In no event shall interest
payable by Borrower to Lender hereunder exceed the maximum rate permitted under
applicable law, and if any such provision of this Agreement is in contravention
of any such law, such provision shall be deemed modified to limit such interest
to the maximum rate permitted under such law.


 


(b)         Borrower
promises to pay interest on the unpaid principal amount of the Term B Loan for
the period commencing on the date of such Loan until such Loan is paid in full
at the rate of 14.25% per annum; provided, that (i) at any time an Event
of Default exists, if requested by Lender, the applicable interest rate for the
Term B Loans shall be increased by two percentage points per annum,
(ii) any such increase may thereafter be rescinded by Lender, and
(iii) upon the occurrence of an Event of Default under Section 8.1.1
or 8.1.3, any such increase described in the foregoing clause (i) shall
occur automatically. In no event shall interest payable by Borrower to Lender
hereunder exceed the maximum rate permitted under applicable law, and if any
such provision of this Agreement is in contravention of any such law, such
provision shall be deemed modified to limit such interest to the maximum rate
permitted under such law.


 


23

















 


2.5.2        Interest
Payment Dates.


 


Accrued interest on each Base
Rate Loan shall be payable in arrears on the last day of each month and at
maturity in cash. Accrued interest on the Term B Loan shall be payable in
arrears on the last day of each month and at maturity in cash. Accrued interest
on each LIBOR Loan shall be payable (a) on the last day of each month
during such Interest Period, or on the last day of such Interest Period, as
applicable, relating to such Loan, (b) upon a prepayment of such Loan in
accordance with Section 2.8 and (c) at maturity in cash; provided,
however, that to the extent interest is paid by Borrower on any day
other than the last day of the applicable Interest Period, Borrower shall be
responsible for, and shall promptly pay to Lender, any breakage costs actually
incurred by Lender as a result thereof. After maturity and at any time an Event
of Default exists, all accrued interest on all Loans shall be payable in cash
on demand at the rates specified in Section 2.6.1.


 


2.5.3        Setting
and Notice of LIBOR Rates.


 


The applicable LIBOR Rate for
each Interest Period shall be determined by Lender, and notice thereof shall be
given by Lender promptly to Borrower. Each determination of the applicable
LIBOR Rate by Lender shall be conclusive and binding upon the parties hereto,
in the absence of demonstrable error. Lender shall, upon written request of
Borrower, deliver to Borrower a statement showing the computations used by
Lender in determining any applicable LIBOR Rate hereunder.


 


2.5.4        Computation
of Interest. 


 


Interest shall be computed for
the actual number of days elapsed on the basis of a year of (a) 365/366 days
for interest calculated at the Base Rate or with respect to the Term B Loans
and (b) 360 days for interest calculated at the LIBOR Rate. The applicable
interest rate for each Base Rate Loan shall change simultaneously with each
change in the Base Rate.


 


2.6           Fees.


 


2.6.1        Commitment
Fee.


 


For the period from the Closing
Date to the Termination Date, Borrower agrees to pay to Lender a Commitment Fee
equal to the Applicable Margin multiplied by the amount by which the Revolving
Loan Commitment exceeds the average daily Revolving Loans outstanding. The
Commitment Fee shall be payable in arrears on the last day of each calendar
month and on the Termination Date for any period then ending for which the
Commitment Fee shall not have previously been paid. The Commitment Fee shall be
computed for the actual number of days elapsed on the basis of a year of 360
days.


 


2.6.2        Collateral
Management Fee.


 


For the period from the Closing
Date to the Termination Date, Borrower agrees to pay to Lender a collateral
management and administration fee in the amount of $1,000 per month, payable in
arrears on the last day of each calendar month.


 


24

















 


2.7           Commitment
Reduction.


 


2.7.1        Voluntary
Reduction or Termination of Revolving Loan Commitment.


 


Borrower may from time to time
on at least five Business Days’ prior written notice received by Lender
permanently reduce the Revolving Loan Commitment to an amount not less than the
Revolving Loans. Any such reduction shall be in an amount not less than
$250,000 or a higher integral multiple of $100,000. Concurrently with any
reduction of the Revolving Loan Commitment to zero, Borrower shall pay all
interest on the Revolving Loans and all commitment fees. All reductions in the
Revolving Loan Commitment shall be subject to an Early Termination Payment.


 


2.8           Prepayment.


 


2.8.1        Voluntary
Prepayment.


 


Borrower may from time to time,
on at least one Business Day’s written notice or telephonic notice (if a
telephonic notice, followed immediately by written confirmation thereof) to
Lender not later than 11:00 a.m. New York City time on such day, prepay
the Term Loans in whole or in part; provided that Borrower may not prepay all
or any portion of the Term B Loans if, either immediately prior to or after
giving effect to any such prepayment, any portion of the Revolving Loans or
Term A Loans are outstanding. Such notice to Lender shall specify the Loans to
be prepaid and the date and amount of prepayment. Any such partial prepayment
shall be in an amount equal to $250,000 or a higher integral multiple of
$100,000. All prepayments of Term Loans pursuant to this Section 2.8.1
shall be applied pursuant to Section 2.8.3 and shall be subject to
the applicable Prepayment Premium for such Term Loan.


 


2.8.2        Mandatory
Prepayment.


 


Borrower shall prepay, first,
the Term A Loans until Paid in Full and, then, the Term B Loans until Paid in
Full (in each case in the inverse order of maturity to the remaining
installments thereof), at the following times and in the following amounts:


 


(i)            concurrently
with the receipt by Borrower or any Subsidiary of any Net Cash Proceeds from
any Disposition, in an amount equal to such Net Cash Proceeds;


 


(ii)           concurrently
with the receipt by Borrower or any Subsidiary of any Net Cash Proceeds from
any issuance of its equity securities (other than equity securities that are
issued pursuant to Section 7.9(a)), in an amount equal to such Net
Cash Proceeds; and


 


(iii)          on
any day the outstanding amount of the Revolving Loans exceed Borrowing
Availability, whether pursuant to a reduction of the Revolving Loan Commitments
pursuant to Section 2.7.1 or otherwise, Borrower shall immediately
prepay Revolving Loans in an amount sufficient to eliminate such excess.


 


25

















 


2.8.3        All
Prepayments.


 


(a)          Any
prepayment of a LIBOR Loan on a day other than the last day of an Interest
Period therefor shall include interest on the principal amount being repaid and
shall be subject to Section 3. All prepayments of a Loan shall be
applied first to that portion of such Loan comprised of Base Rate Loans and
then to that portion of such Loan comprised of LIBOR Loans, in direct order of
Interest Period maturities. All prepayments of Term Loans shall be applied
first to Term A Loans until Paid in Full and then to Term B Loans and, in each
case, in the inverse order of maturity to the remaining installments thereof,
if applicable, and shall in each case be subject to the applicable Prepayment
Premium for such Term Loans. All payments or prepayments of Revolving Loans
resulting in, or made in order to effect, a permanent reduction in the
Revolving Loan Commitment shall be subject to a Early Termination Payment.


 


(b)         Borrower
shall give written notice or telephonic notice (followed immediately by written
confirmation thereof) to Lender not later than 11:00 a.m. New York City
time at least one Business Day prior to each mandatory prepayment pursuant to
clause (a) of Section 2.8.2.


 


2.9           Repayment.


 


2.9.1        Revolving
Loans.


 


The outstanding balance of the
Revolving Loans shall be paid, for the account of Lender, in full on the
Termination Date.


 


2.9.2        Term
A Loans.


 


The Term A Loans shall amortize
as provided in the following table, with each annualized amount being due and
payable in equal monthly installments on the last day of each month, commencing
December ___, 2007 and continuing to the Term Loan A Maturity Date, on which
date the then outstanding Term A Loans shall be paid in full:


 


	
  Year

  	
   

  	
  Monthly Amortization

  Amount

  	
   

  
	
  1

  	
   

  	
  $

  	
  150,000

  	
   

  
	
  2

  	
   

  	
  $

  	
  150,000

  	
   

  
	
  3

  	
   

  	
  $

  	
  150,000

  	
   

  
	
  4

  	
   

  	
  $

  	
  150,000

  	
   

  
	
  5

  	
   

  	
  $

  	
  150,000

  	
   

  
	
  6

  	
   

  	
  $

  	
  150,000

  	
   

  



 


2.9.3        Term
B Loans.


 


The Term B Loans shall be Paid
in Full on the Term B Loan Maturity Date.


 


26

















 


2.10         Payment.


 


2.10.1      Making
Payments.


 


All payments of principal of or
interest in respect of the Loans, and of all fees, shall be made by Borrower to
Lender without setoff, recoupment or counterclaim and in immediately available
funds at the office specified by Lender not later than 12:00 noon New York City
time on the date due, and funds received after that hour shall be deemed to
have been received by Lender on the following Business Day.


 


2.10.2      Application
of Payments and Proceeds.


 


(a)          Except
as set forth in Section 2.8.2 and Section 2.8.3, and
subject to the provisions of Sections 2.10.2(b) and 2.10.2(c)
below, each payment of principal shall be applied to such Loans as Borrower
shall direct by notice to be received by Lender on or before the date of such
payment or, in the absence of such notice, as Lender shall determine in its
discretion.


 


(b)         If
an Acceleration Event shall have occurred and be continuing, notwithstanding
anything herein or in any other Loan Document to the contrary, Lender shall
apply all or any part of payments in respect of the Obligations and proceeds of
Collateral, in each case as received by Lender, to the payment of the
Obligations in the following order:


 


(i)            FIRST,
to the payment of all fees, costs, expenses and indemnities due and owing to
Lender under this Agreement or any other Loan Document, and any other
Obligations owing to Lender in respect of sums advanced by Lender to preserve
or protect the Collateral or to preserve or protect its security interest in
the Collateral (whether or not such Obligations are then due and owing to
Lender), based on such Lender’s pro rata share thereof, until Paid in Full;


 


(ii)           SECOND,
to the payment of all fees, costs, expenses and indemnities due and owing to
Lender, other than in respect of Term B Loans, based on such Lender’s pro rata
share thereof, until Paid in Full;


 


(iii)          THIRD,
to the payment of all accrued and unpaid interest due and owing to Lender,
other than in respect of Term B Loans, based on such Lender’s pro rata share
thereof, until Paid in Full;


 


(iv)          FOURTH,
to the payment of all principal of the Loans, other than Term B Loans, due and
owing, based on such Lender’s pro rata share thereof, until Paid in Full;


 


(v)           FIFTH,
to the payment of all Hedging Obligations due and owing to Lender or its
Affiliates, based on its or their pro rata share thereof;


 


(vi)          SIXTH,
to the payment of all other Obligations owing to Lender, other than Obligations
owing in respect of Term B Loans, based on such Lender’s pro rata share
thereof, until Paid in Full;


 


27

















 


(vii)         SEVENTH,
to the payment of all fees, costs, expenses and indemnities due and owing to
Lender in respect of Term B Loans until Paid in Full;


 


(viii)        EIGHTH,
to the payment of all accrued and unpaid interest due and owing to Lender in
respect of Term B Loans until Paid in Full;


 


(ix)           NINTH,
to the payment of all principal of Term B Loans due and owing until Paid in
Full; and


 


(x)            TENTH,
to the payment of all other Obligations owing to Lender in respect of Term B
Loans until Paid in Full.


 


(c)          If
an Event of Default shall have occurred and be continuing but an Acceleration
Event shall not exist, notwithstanding anything herein or in any other Loan
Document to the contrary, Lender shall apply all or any part of payments in
respect of the obligations and proceeds of Collateral, in each case as received
by Lender, to the payment of the Obligations in such order as Lender may elect.
In the absence of a specific determination by Lender, payments in respect of
the Obligations and proceeds of Collateral received by Lender shall be applied
in the following order:


 


(i)            FIRST,
to the payment of all fees, costs, expenses and indemnities due and owing to
Lender under this Agreement or any other Loan Document, and any other
Obligations owing to Lender in respect of sums advanced by Lender to preserve
or protect the Collateral or to preserve or protect its security interest in
the Collateral (whether or not such Obligations are then due and owing to
Lender), based on such Lender’s pro rata share thereof, until Paid in Full;


 


(ii)           SECOND,
to the payment of all fees, costs, expenses and indemnities due and owing to
Lender, other than in respect of Term B Loans, based on such Lender’s pro rata
share thereof, until Paid in Full;


 


(iii)          THIRD,
to the payment of all accrued and unpaid interest due and owing to Lender,
other than in respect of Term B Loans, based upon such Lender’s pro rata share
thereof, until Paid in Full;


 


(iv)          FOURTH,
to the payment of all principal of the Loans, other than Term B Loans, then due
and owing, based upon such Lender’s pro rata share thereof, until Paid in Full;


 


(v)           FIFTH,
to the payment of Revolving Loans and the Term A Loans not then due and owing,
based upon such Lender’s pro rata share thereof, until Paid in Full;


 


(vi)          SIXTH,
to the payment of all Hedging Obligations owing to Lender or its Affiliates,
pro rata in accordance with Lender’s or one of its Affiliate’s share thereof,
until Paid in Full;


 


(vii)         SEVENTH,
to the payment of all other Obligations owing to Lender, other than Obligations
owing in respect of Term B Loans, until Paid in Full;


 


28

















 


(viii)        EIGHTH,
to the payment of all fees, costs, expenses and indemnities due and owing to
Lender in respect of Term B Loans until Paid in Full;


 


(ix)           NINTH,
to the payment of all accrued and unpaid interest due and owing to Lender in
respect of Term B Loans until Paid in Full;


 


(x)            TENTH,
to cash collateralize Obligations consisting of Term B Loans not yet due and
owing until Paid in Full; and


 


(xi)           ELEVENTH,
to the payment of all other Obligations owing to Lender in respect of Term B
Loans until Paid in Full.


 


2.10.3      Payment
Dates.


 


If any payment of principal or
interest with respect to any of the Loans, or of any fees, falls due on a day which
is not a Business Day, then such due date shall be extended to the immediately
following Business Day (unless, in the case of a LIBOR Loan, such immediately
following Business Day is the first Business Day of a calendar month, in which
case such due date shall be the immediately preceding Business Day) and, in the
case of principal, additional interest shall accrue and be payable for the
period of any such extension.


 


2.10.4      Set-off.


 


Borrower agrees that Lender and
its Affiliates have all rights of set-off and bankers’ lien provided by
applicable law, and in addition thereto, Borrower agrees that at any time an
Event of Default has occurred and is continuing, Lender may apply to the
payment of any Obligations of Borrower hereunder, whether or not then due, any
and all balances, credits, deposits, accounts or moneys of Borrower then or
thereafter with Lender.


 


Section 3.               Yield
Protection.


 


3.1           Taxes.


 


(a)   All
payments of principal and interest on the Loans and all other amounts payable
hereunder shall be made free and clear of and without deduction for any present
or future income, excise, stamp, documentary, property or franchise taxes and
other taxes, fees, duties, levies, withholdings or other charges of any nature
whatsoever imposed by any taxing authority, excluding taxes imposed on or
measured by Lender’s net income by the jurisdiction under which Lender is
organized or conducts business (all non-excluded items being called “Taxes”).
If any withholding or deduction from any payment to be made by Borrower
hereunder is required in respect of any Taxes pursuant to any applicable law,
rule or regulation, then Borrower will: 
(i) pay directly to the relevant authority the full amount required
to be so withheld or deducted; (ii) promptly forward to Lender an official
receipt or other documentation satisfactory to Lender evidencing such payment
to such authority; and (iii) pay to Lender such additional amount or
amounts as is necessary to ensure that the net amount actually received by
Lender will equal the full amount Lender would have received had no such
withholding or deduction been required. If any Taxes are directly asserted
against Lender with respect to any payment received by Lender hereunder, Lender
may pay such Taxes and Borrower will promptly 


 


29

















 


pay such additional amounts
(including any penalty, interest or expense) as is necessary in order that the
net amount received by such Person after the payment of such Taxes (including
any Taxes on such additional amount) shall equal the amount such Person would
have received had such Taxes not been asserted so long as such amounts have
accrued on or after the day which is 180 days prior to the date on which Lender
first made demand therefor; provided, that if the event giving rise to such
costs or reductions has retroactive effect, such 180 day period shall be
extended to include the period of retroactive effect.


 


(b)         If
Borrower fails to pay any Taxes when due to the appropriate taxing authority or
fails to remit to Lender the required receipts or other required documentary
evidence, Borrower shall indemnify Lender for any incremental Taxes, interest
or penalties that may become payable by Lender as a result of any such failure.


 


3.2           Increased
Cost.


 


(a)          If,
after the Closing Date, the adoption of, or any change in, any applicable law,
rule or regulation, or any change in the interpretation or administration of
any applicable law, rule or regulation by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by Lender with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency shall impose on Lender any other condition affecting its LIBOR Loans,
its Note or its obligation to make LIBOR Loans; and the result of anything
described above is to increase the cost to (or to impose a cost on) Lender of
making or maintaining any LIBOR Loan, or to reduce the amount of any sum received
or receivable by Lender under this Agreement or under its Note with respect
thereto, then upon demand by Lender (which demand shall be accompanied by a
statement setting forth the basis for such demand and a calculation of the
amount thereof in reasonable detail), Borrower shall pay directly to Lender
such additional amount as will compensate Lender for such increased cost or
such reduction, so long as such amounts have accrued on or after the day which
is 180 days prior to the date on which Lender first made demand therefor;
provided, that if the event giving rise to such costs or reductions has
retroactive effect, such 180 day period shall be extended to include the period
of retroactive effect.


 


(b)         If
Lender shall reasonably determine that any change in, or the adoption or
phase-in of, any applicable law, rule or regulation regarding capital adequacy,
or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the interpretation
or administration thereof, or the compliance by Lender or any Person
controlling Lender with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on Lender’s or such controlling Person’s capital as a consequence of Lender’s
obligations hereunder to a level below that which Lender or such controlling
Person could have achieved but for such change, adoption, phase-in or
compliance (taking into consideration Lender’s or such controlling Person’s
policies with respect to capital adequacy) by an amount deemed by Lender or
such controlling Person to be material, then from time to time, upon demand by
Lender (which demand shall be accompanied by a statement setting forth the
basis for such demand and a calculation of the amount thereof in reasonable
detail), Borrower shall pay to Lender such additional amount as 


 


30

















 


will compensate Lender or such
controlling Person for such reduction, so long as such amounts have accrued on
or after the day which is 180 days prior to the date on which Lender first made
demand therefor; provided, that if the event giving rise to such costs or
reductions has retroactive effect, such 180 day period shall be extended to
include the period of retroactive effect.


 


3.3           Inadequate
or Unfair Basis.


 


If Lender reasonably determines
(which determination shall be binding and conclusive on Borrower) that, by
reason of circumstances affecting the interbank Eurodollar market, adequate and
reasonable means do not exist for ascertaining the applicable LIBOR Rate, then
Lender shall promptly notify the Borrower thereof and, so long as such
circumstances shall continue, (a) Lender shall be under no obligation to
make or convert any Base Rate Loans into LIBOR Loans and (b) on the last
day of the current Interest Period for each LIBOR Loan, such Loan shall, unless
then repaid in full, automatically convert to a Base Rate Loan.


 


3.4           Change
in Law.


 


If any change in, or the
adoption of any new, law or regulation, or any change in the interpretation of
any applicable law or regulation by any governmental or other regulatory body
charged with the administration thereof, would make it (or in the good faith
judgment of Lender cause a substantial question as to whether it is) unlawful
for Lender to make, maintain or fund LIBOR Loans, then Lender shall promptly
notify each of the other parties hereto and, so long as such circumstances
shall continue, (a) Lender shall have no obligation to make or convert any
Base Rate Loan into a LIBOR Loan (but shall make Base Rate Loans in each case
in an amount equal to the amount of LIBOR Loans which would be made or
converted into by Lender at such time in the absence of such circumstances) and
(b) on the last day of the current Interest Period for each LIBOR Loan of
Lender (or, in any event, on such earlier date as may be required by the
relevant law, regulation or interpretation), such LIBOR Loan shall, unless then
repaid in full, automatically convert to a Base Rate Loan. Each Base Rate Loan
made by Lender which, but for the circumstances described in the foregoing
sentence, would be a LIBOR Loan shall remain outstanding for the period
corresponding to the Interest Period originally applicable to such LIBOR Loan
absent such circumstances.


 


3.5           Funding
Losses.


 


Borrower hereby agrees that upon
demand by Lender (which demand shall be accompanied by a statement setting
forth the basis for the amount being claimed), Borrower will indemnify Lender
against any net loss or expense which Lender may sustain or incur (including
any net loss or expense incurred by reason of the liquidation or reemployment
of deposits or other funds acquired by Lender to fund or maintain any LIBOR
Loan), as reasonably determined by Lender, as a result of (a) any payment,
prepayment or conversion of any LIBOR Loan of Lender on a date other than the
last day of an Interest Period for such Loan (including any conversion pursuant
to Section 3.3 or 3.4) or (b) any failure of Borrower
to borrow, convert or continue any Loan on a date specified therefor in a
notice of borrowing, conversion or continuation pursuant to this Agreement. For
the purposes of this Section 3.5, all determinations shall be made
only to the extent Lender has actually funded and maintained each LIBOR Loan
during each Interest Period for such Loan through the purchase of deposits
having a maturity 


 


31

















 


corresponding to such Interest
Period and bearing an interest rate equal to the LIBOR Rate for such Interest
Period.


 


3.6           Manner
of Funding; Alternate Funding Offices.


 


Notwithstanding any provision of
this Agreement to the contrary, Lender shall be entitled to fund and maintain
its funding of all or any part of its Loans in any manner it may determine at
its sole discretion. Lender may, if it so elects, fulfill its commitment to
make any LIBOR Loan by causing any branch or Affiliate of Lender to make such
Loan; provided that in such event for the purpose of this Agreement, such Loan
shall be deemed to have been made by Lender, the obligation of Borrower to
repay such Loan shall nevertheless be to Lender and shall be deemed held by
Lender, to the extent of such Loan, for the account of such branch or
Affiliate.


 


3.7           Mitigation
of Circumstances.


 


Lender shall promptly notify
Borrower of any event of which it has knowledge which will result in, and will
use reasonable commercial efforts available to it (and not, in Lender’s sole
judgment, otherwise disadvantageous to Lender) to mitigate or avoid any
obligation by Borrower to pay any amount pursuant to Sections 3.1
or 3.2 or the occurrence of any circumstances described in Sections 3.3
or 3.4 (and, if Lender has given notice of any such event and thereafter
such event ceases to exist, Lender shall promptly so notify Borrower).


 


3.8           Conclusiveness
of Statements; Survival.


 


Determinations and statements of
Lender pursuant to Sections 3.1, 3.2, 3.3, 3.4
or 3.5 shall be conclusive absent demonstrable error. Lender may use
reasonable averaging and attribution methods in determining compensation under Sections 3.1,
3.2 and 3.5 and the provisions of such Sections shall survive
repayment of the Loans, cancellation of the Notes, if any, and termination of
this Agreement.


 


Section 4.               Conditions
Precedent.


 


The obligation of Lender to make
the Loans is subject to the following conditions precedent:


 


4.1           Initial
Credit Extension.


 


The obligation of Lender to make
the initial Loans hereunder is, in addition to the conditions precedent
specified in Section 4.2, subject to the following conditions
precedent, each of which shall be satisfactory in all respects to Lender:


 


4.1.1        EBITDA.


 


EBITDA, as adjusted by adjustments
satisfactory to Lender, for the 12 month period ending September 30, 2007 shall
not be less than $7,900,000.


 


32

















 


4.1.2        Initial
Loans.


 


After giving effect to the
consummation of the Related Transactions and the funding of the initial Loans
on the Closing Date, not more than $3,000,000 in Revolving Loans shall be
advanced or issued (as applicable) on the Closing Date.


 


4.1.3        Debt
to be Repaid.


 


The Debt to be Repaid has been
(or concurrently with the initial borrowing will be) paid in full.


 


4.1.4        Fees.


 


Borrower shall have paid all
fees, costs and expenses due and payable under this Agreement and the other
Loan Documents on the Closing Date.


 


4.1.5        Delivery
of Loan Documents.


 


Borrower shall have delivered
the following documents in form and substance satisfactory to Lender (and, as
applicable, duly executed by each Loan Party a party thereto and dated the
Closing Date or an earlier date satisfactory to Lender):


 


(a)          Agreement. This
Agreement.


 


(b)         Collateral
Documents. The Guarantee and Collateral Agreement, all other
Collateral Documents, and all instruments, documents, certificates and
agreements executed or delivered pursuant thereto (including intellectual
property assignments and pledged Collateral, with undated irrevocable transfer
powers executed in blank).


 


(c)          Financing
Statements. Properly completed Uniform Commercial Code, or in
the case of a Canadian Subsidiary Personal Property Security Act, financing
statements and other filings and documents required by law or the Loan
Documents to provide Lender perfected Liens (subject only to Liens permitted
pursuant to Section 7.2) in the Collateral.


 


(d)         Lien
Searches. Copies of Uniform Commercial Code, or in the case
of a Canadian Subsidiary Personal Property Security Act, search reports listing
all effective financing statements filed against any Loan Party, with copies of
such financing statements.


 


(e)          Mortgages. Mortgages
providing Lender perfected Liens (subject only to Liens permitted pursuant to Section 7.2)
in the real property Collateral owned by Borrower or any Subsidiary of Borrower
(other than a Canadian Subsidiary), with ALTA loan title insurance policies
issued by insurers reasonably acceptable to Lender, ALTA surveys and such flood
and/or earthquake insurance as Lender may reasonably request, and in the case
of a Canadian Subsidiary, title insurance policies issued by First Canadian
Title Insurance Company Ltd. Or another title insurer of equivalent reputation
in Canada. Additionally, in the case of any leased real property of Borrower or
any Subsidiary of Borrower, a consent, in form and substance satisfactory to
Lender, from the owner and/or mortgagee (a) consenting to the Mortgage of the
leasehold interest in favor of Lender with respect to such property and (b)
waiving any landlord’s


 


33

















 


Lien in respect of personal
property kept at the premises subject to such lease; provided that
Lender shall reasonably consider any request by Borrower to forgo the delivery
of any such consent in its reasonable credit judgment or to defer the delivery
of any such consent.


 


(f)          Collateral
Access Agreements. Collateral Access Agreements reasonably requested
by Lender with respect to the Collateral.


 


(g)         Payoff;
Release. Payoff letters evidencing repayment in full of
all Debt to be Repaid, termination of all agreements relating thereto and the
release of all Liens granted in connection therewith, with Uniform Commercial
Code or other appropriate termination statements and documents effective to
evidence the foregoing.


 


(h)         Letter
of Direction. A letter of direction containing funds flow
information, with respect to the proceeds of the Loans on the Closing Date.


 


(i)           Authorization
Documents. For each Loan Party, such Person’s
(i) charter (or similar formation document), certified by the appropriate
governmental authority, (ii) good standing certificates in its
jurisdiction of incorporation (or formation) and in each other jurisdiction
requested by Lender, (iii) bylaws (or similar governing document),
(iv) resolutions of its board of directors (or similar governing body)
approving and authorizing such Person’s execution, delivery and performance of
the Loan Documents to which it is party and the transactions contemplated
thereby, and (v) signature and incumbency certificates of its officers
executing any of the Loan Documents, all certified by its secretary or an
assistant secretary (or similar officer) as being in full force and effect
without modification.


 


(j)           Insurance. Certificates
or other evidence of insurance in effect as required by Section 6.3(b),
with endorsements naming Lender as loss payee and/or additional insured, as
applicable.


 


(k)          Financials. The
financial statements, projections and pro forma balance sheet described in Section 5.4.


 


(l)           Appraisals. Appraisals
of Collateral as reasonably requested by Lender, prepared by appraisers
reasonably satisfactory to Lender.


 


(m)         Environmental
Reports. Environmental site assessment reports reasonably
requested by Lender, prepared by environmental engineers reasonably
satisfactory to Lender.


 


(n)         Consents. Evidence
that all necessary consents, permits and approvals (governmental or otherwise,
including pursuant to the Hart-Scott-Rodino Act and all related state anti-trust
laws and regulations) required for the execution, delivery and performance by
each Loan Party of the Loan Documents and the Related Transactions have been
duly obtained and are in full force and effect.


 


(o)         Legal
Opinion. Opinions of counsel (which opinions may be
provided by in-house counsel) with respect to such matters as Lender shall
require, which are in form and substance satisfactory to Lender.


 


34

















 


(p)         Other
Documents. Such other certificates, documents and agreements
as Lender may reasonably request.


 


4.2           All
Credit Extensions.


 


The obligation of Lender to make
each Loan is subject to the additional conditions precedent that (unless such
conditions are waived by Lender), both before and after giving effect to any
borrowing, (a) the representations and warranties of Borrower and each
other Loan Party set forth in this Agreement and the other Loan Documents shall
be true and correct in all material respects with the same effect as if then
made (except to the extent stated to relate to a specific earlier date, in
which case such representations and warranties shall be true and correct as of
such earlier date), and (b) no Event of Default or Default shall have then
occurred and be continuing. Each request by Borrower for the making of a Loan
shall be deemed to constitute a representation and warranty by Borrower that
the conditions precedent set forth in Section 4.2 will be satisfied
at the time of the making of such Loan.


 


Section 5.               Representations
and Warranties.


 


To induce Lender to enter into
this Agreement and to induce Lender to make Loans hereunder, Borrower
represents and warrants to Lender that, both before and after giving effect to
the Related Transactions:


 


5.1           Organization.


 


Borrower is a corporation
validly existing and in good standing under the laws of the State of Delaware;
each other Loan Party is validly existing and in good standing under the laws
of the jurisdiction of its organization; and each Loan Party is duly qualified
to do business in each jurisdiction where, because of the nature of its
activities or properties, such qualification is required, except for such
jurisdictions where the failure to so qualify could not reasonably be expected
to have a Material Adverse Effect.


 


5.2           Authorization;
No Conflict.


 


Each of Borrower and each other
Loan Party is duly authorized to execute and deliver each Loan Document and
each to which it is a party memorializing the Related Transactions, Borrower is
duly authorized to borrow monies hereunder, and each of Borrower and each other
Loan Party is duly authorized to perform its Obligations under each Loan
Document to which it is a party. The execution, delivery and performance by
Borrower of this Agreement and by each of Borrower and each other Loan Party of
each Loan Document to which it is a party, and the borrowings by Borrower
hereunder, do not and will not (a) require any consent or approval of any
governmental agency or authority (other than any consent or approval which has
been obtained and is in full force and effect and other than as may be required
for the lawful conduct of the business and properties of Borrower and each
other Loan Party), (b) conflict with (i) any provision of applicable
law in any material respect, (ii) the charter, by-laws or other organizational
documents of Borrower or any other Loan Party or (iii) any material agreement,
indenture, instrument or other document, or any material judgment, order or
decree, which is binding upon Borrower or any other Loan Party or any of their
respective properties or (c) require, or result in, the creation or imposition
of any Lien on any asset of Borrower, any 


 


35














 


Subsidiary or any other Loan Party (other
than Liens in favor of Lender created pursuant to the Collateral Documents or
which are otherwise permitted by the terms hereof).


 


5.3           Validity;
Binding Nature.


 


Each of this Agreement and each
other Loan Document to which Borrower or any other Loan Party is a party is the
legal, valid and binding obligation of such Person, enforceable against such
Person in accordance with its terms, subject to bankruptcy, insolvency and
similar laws affecting the enforceability of creditors’ rights generally and to
general principles of equity.


 


5.4           Financial
Condition.


 


(a)          The
audited consolidated financial statements of the Target and the Subsidiaries as
at its Fiscal Years ending December 31, 2006 (the “Balance Sheet Date”)
and December 31, 2005, and the unaudited consolidated financial statements of
the Target and the Subsidiaries as at June 30, 2007, copies of each of which
have been delivered pursuant hereto, were prepared in accordance with GAAP
(subject, in the case of such unaudited statements, to the absence of footnotes
and to normal year-end adjustments) and fairly present in all material respects
the consolidated financial condition of such Persons as at such dates and the
results of their operations for the periods then ended.


 


(b)         The
consolidated financial projections (including an operating budget and a cash
flow budget) of Borrower and the Subsidiaries for the 4 year period commencing
November 1, 2007 delivered to Lender on or prior to the Closing Date
(i) were prepared by Borrower in good faith and (ii) were prepared in
accordance with assumptions for which Borrower has a reasonable basis, and the
accompanying consolidated pro forma balance sheet of Borrower and the
Subsidiaries as at the Closing Date, adjusted to give effect to the
consummation of the Related Transactions and the financings contemplated hereby
as if such transactions had occurred on such date, is consistent in all
material respects with such projections.


 


5.5           No
Material Adverse Change.


 


Since the Balance Sheet Date,
there has been no material adverse change in the financial condition,
operations, assets, business or properties of the Loan Parties taken as a
whole.


 


5.6           Litigation.


 


No litigation (including
derivative actions), arbitration proceeding or governmental investigation or
proceeding is pending or, to Borrower’s knowledge, threatened against any Loan
Party which could reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect, except as set forth in Schedule 5.6.
As of the Closing Date, other than any liability incident to such litigation or
proceedings, neither Borrower nor any other Loan Party has any material
Contingent Obligations not listed on Schedule 7.1.


 


36

















 


5.7           Ownership
of Properties; Liens.


 


Except as would not reasonably
be expected to have a Material Adverse Effect, each of Borrower and each other
Loan Party owns good and, in the case of real property, marketable title to all
of its properties and assets, real and personal, tangible and intangible, of
any nature whatsoever (including patents, trademarks, trade names, service
marks and copyrights) other than such properties and assets that it holds on
license or lease, free and clear of all Liens, charges and claims (including
infringement claims with respect to patents, trademarks, service marks,
copyrights and the like), except as permitted by Section 7.2.


 


5.8           Capitalization.


 


All issued and outstanding
equity securities of Borrower and the other Loan Parties are duly authorized
and validly issued, fully paid, non-assessable, and free and clear of all Liens
other than those in favor of Lender or which are otherwise permitted by the
terms hereof. Schedule 5.8 sets forth the authorized equity securities
of each Loan Party as of the Closing Date. As of the Closing Date, except as
set forth on Schedule 5.8, there are no pre-emptive or other outstanding
rights, options, warrants, conversion rights or other similar agreements or
understandings for the purchase or acquisition of any equity interests of
Borrower or any other Loan Party.


 


5.9           Pension
Plans.


 


(a)   Other
than with respect to Canadian Subsidiaries, during the twelve-consecutive-month
period prior to the Closing Date or the making of any Loan, (i) no steps
have been taken to terminate any Pension Plan and (ii) no contribution
failure has occurred with respect to any Pension Plan sufficient to give rise
to a Lien under Section 302(f) of ERISA. No condition exists or event or
transaction has occurred with respect to any Pension Plan which could result in
the incurrence by Borrower or any other Loan Party of any material liability,
fine or penalty which could reasonably be expected to have, either individually
or in the aggregate, a Material Adverse Effect. Except in each case as could
not reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect, all contributions (if any) have been made to any
Multiemployer Pension Plan that are required to be made by any Loan Party or
any other member of the Controlled Group under the terms of the plan or of any
collective bargaining agreement or by applicable law; neither any Loan Party
nor any member of the Controlled Group has withdrawn or partially withdrawn
from any Multiemployer Pension Plan, incurred any withdrawal liability with
respect to any such plan or received notice of any claim or demand for
withdrawal liability or partial withdrawal liability from any such plan, and
neither Borrower nor any member of the Controlled Group has received any
written notice that any Multiemployer Pension Plan is in reorganization, that
increased contributions may be required to avoid a reduction in plan benefits
or the imposition of any excise tax, that any such plan is or has been funded
at a rate less than that required under Section 412 of the IRC, that any
such plan is being (or is reasonably likely to be) terminated, or that any such
plan is (or is reasonably likely to become) insolvent.


 


(b)         With
respect to Canadian Subsidiaries, each Canadian Subsidiary has adopted all
Pension Plans required by applicable law and applicable collective bargaining
agreements and 


 


37

















 


each of such plans is in
compliance with such applicable law and collective bargaining agreements. No
Canadian Subsidiary is obligated to contribute to any defined benefit Pension
Plan and no steps have been taken to terminate any Pension Plan (wholly or in
part) which could result in the Canadian Subsidiary being required to make an
additional contribution to the Pension Plan; no contribution failure has
occurred with respect to any Pension Plan sufficient to give rise to a lien or
charge under any applicable pension or tax laws of any jurisdiction; and no
condition exists and no event or transaction or breach has occurred with
respect to any Pension Plan which is reasonably likely to result in the
incurrence by an Obligor of any material liability, fine or penalty.


 


5.10         Investment
Company Act.


 


Neither Borrower nor any other
Loan Party is an “investment company” within the meaning of the Investment
Company Act of 1940.


 


5.11         Margin
Stock.


 


Neither Borrower nor any other
Loan Party is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of purchasing or carrying
Margin Stock. No portion of the Obligations is secured directly or indirectly
by Margin Stock.


 


5.12         Taxes.


 


Except as would not reasonably
be expected to have a Material Adverse Effect, each of Borrower and each other
Loan Party has filed all tax returns and reports required by law to have been
filed by it and has paid all taxes and governmental charges thereby shown to be
owing, except any such taxes or charges which are being diligently contested in
good faith by appropriate proceedings and for which adequate reserves in
accordance with GAAP shall have been set aside on its books.


 


5.13         Solvency.


 


On the Closing Date, and
immediately prior to and after giving effect to each borrowing hereunder and the
use of the proceeds thereof, with respect to each of Borrower and each other
Loan Party, individually, (a) the fair value of its assets is greater than
the amount of its liabilities (including disputed, contingent and unliquidated
liabilities) as such value is established and liabilities evaluated,
(b) the present fair saleable value of its assets is not less than the
amount that will be required to pay the probable liability on its debts as they
become absolute and matured, (c) it is able to realize upon its assets and
pay its debts and other liabilities (including disputed, contingent and
unliquidated liabilities) as they mature in the normal course of business,
(d) it does not intend to, and does not believe that it will, incur debts
or liabilities beyond its ability to pay as such debts and liabilities mature
and (e) it is not engaged in business or a transaction, and is not about
to engage in business or a transaction, for which its property would constitute
unreasonably small capital.


 


38

















 


5.14         Environmental
Matters.


 


Except as set forth in Schedule
5.14, the on-going operations of Borrower and each other Loan Party comply
in all material respects with all applicable Environmental Laws, except such
non-compliance which could not (if enforced in accordance with applicable law)
reasonably be expected to result in a Material Adverse Effect. Borrower and
each other Loan Party have obtained, and maintained in good standing, all
licenses, permits, authorizations and registrations required under any
Environmental Law and necessary for their respective ordinary course
operations, and Borrower and each other Loan Party are in compliance with all
material terms and conditions thereof, in each case except where the failure to
do so could not reasonably be expected to result in a Material Adverse Effect. Except
as set forth in Schedule 5.14, none of Borrower, any other Loan Party or
any of their respective properties or operations is subject to any material
encumbrance or order imposed by any Governmental Body in connection with the
violation of any Environmental Law, any Environmental Claim or the presence or
release of any Hazardous Substances. Except as set forth in Schedule 5.14,
there are no Hazardous Substances present, and there have been no Releases of
Hazardous Substances, in, on, beneath or adjacent to any property currently or
formerly owned, operated or leased by Borrower in quantities sufficient to form
the basis for an Environmental Claim or to create the reasonable likelihood of
a Material Adverse Effect nor, to the knowledge of Borrower, have any Hazardous
Substances migrated or threatened to migrate from other properties upon, about
or beneath any properties. To the knowledge of Borrower, there are no underground
storage tanks that are not properly registered or permitted under applicable
Environmental Laws or that are leaking or disposing of Hazardous Substances on
any of the subject properties.


 


5.15         Insurance.


 


Borrower and each other Loan
Party and their respective properties are insured with financially sound and
reputable insurance companies which are not Affiliates of Borrower, in such
amounts, with such deductibles and covering such risks as are customarily
carried by companies engaged in similar businesses and owning similar
properties in localities where Borrower or such other Loan Party operates. A
true and complete listing of such insurance as of the Closing Date, including
issuers, coverages and deductibles, is set forth on Schedule 5.15.


 


5.16         Information.


 


All information heretofore or
contemporaneously herewith furnished in writing by Borrower to Lender for
purposes of or in connection with this Agreement and the transactions
contemplated hereby is, and all written information hereafter furnished by or
on behalf of Borrower to Lender pursuant hereto or in connection herewith will
be, true and accurate in every material respect on the date as of which such
information is dated or certified, and none of such information is or will be
incomplete by omitting to state any material fact necessary to make such
information not misleading in light of the circumstances under which made (it
being recognized by Lender that any projections and forecasts provided by
Borrower are based on good faith estimates and assumptions believed by Borrower
to be reasonable as of the date of the applicable projections or assumptions
and that actual results during the period or periods covered by any such
projections and forecasts may differ from projected or forecasted results).


 


39

















 


5.17         Intellectual
Property.


 


Except as set forth in Schedule
5.17, Borrower and each other Loan Party owns and possesses or has a
license or other right to use all patents, patent rights, trademarks, trademark
rights, trade names, trade name rights, service marks, service mark rights and
copyrights as are necessary for the conduct of the business of Borrower and the
other Loan Parties, without any infringement upon rights of others which could
reasonably be expected to have a Material Adverse Effect.


 


5.18         Restrictive
Provisions.


 


Neither Borrower nor any other
Loan Party is a party to any agreement or contract or subject to any
restriction contained in its operative documents which could reasonably be
expected to have a Material Adverse Effect.


 


5.19         Labor
Matters.


 


Except as set forth on Schedule
5.19, neither Borrower nor any other Loan Party is subject to any labor or
collective bargaining agreement. There are no existing or threatened strikes, lockouts
or other labor disputes involving Borrower or any other Loan Party that singly
or in the aggregate could reasonably be expected to have a Material Adverse
Effect. Hours worked by and payment made to employees of Borrower and the other
Loan Parties other than Canadian Subsidiaries are not in any material respect
in violation of the Fair Labor Standards Act or any other applicable law, rule
or regulation dealing with such matters, and all amounts due by the Canadian
Subsidiaries for wages, vacation pay, severance pay, employee deductions
(including income, withholding, social security and other employment taxes),
sales taxes, excise tax, tax payable pursuant to Part IX of the Excise Tax Act (Canada), income tax,
workers’ compensation, government royalties and pension fund obligations have
been paid or accrued as a liability on the books of the relevant Canadian
Subsidiary.


 


5.20         No
Default.


 


No Event of Default or Default
exists or would result from the incurrence by any Loan Party of any Debt
hereunder or under any other Loan Document.


 


Section 6.               Affirmative
Covenants.


 


Until the expiration or
termination of the Commitments and thereafter until all Obligations (other than
contingent indemnification obligations to the extent no claim giving rise
thereto has been asserted) of Borrower and the other Loan Parties hereunder and
under the other Loan Documents are Paid in Full, Borrower agrees that, unless
at any time Lender shall otherwise expressly consent in writing, it will:


 


6.1           Information.


 


Furnish to Lender:


 


40

















 


6.1.1        Annual
Report.


 


Promptly when available and in
any event within 90 days after the close of each Fiscal Year:  (a) a copy of the annual audit report of
Borrower and its Subsidiaries for such Fiscal Year, including therein a
consolidated balance sheet and statement of earnings and cash flows of Borrower
and its Subsidiaries as at the end of such Fiscal Year, certified without
qualification (except for qualifications relating to changes in accounting
principles or practices reflecting changes in generally accepted principles of
accounting and required or approved by Borrower’s independent certified public
accountants) by independent auditors of recognized standing selected by
Borrower and reasonably acceptable to Lender; and (b) a consolidating
balance sheet of Borrower and the Subsidiaries as of the end of such Fiscal
Year and consolidating statements of earnings and cash flows for Borrower and
the Subsidiaries for such Fiscal Year, together with a comparison of actual
results for such Fiscal Year with the budget for such Fiscal Year, each
certified by the chief financial officer of Borrower.


 


6.1.2        Interim
Reports.


 


Promptly when available and in
any event within 30 days (or, in the case of month-end dates corresponding to
the end of a Fiscal Quarter, 40 days) after the end of each month,
(i) consolidated and consolidating balance sheets of Borrower and the
Subsidiaries as of the end of such month, together with consolidated and
consolidating statements of earnings and a consolidated and consolidating
statement of cash flows for such month and for the period beginning with the
first day of such Fiscal Year and ending on the last day of such month,
together with a comparison with the corresponding period of the previous Fiscal
Year and a comparison with the budget for such period of the current Fiscal
Year (for period prior to December 31, 2008, such comparisons to be on a
quarterly basis and delivered only after the end of a Fiscal Quarter), certified
by the chief financial officer of Borrower, and (ii) for monthly financial
statements that correspond to the end of a Fiscal Quarter, a written statement
of Borrower’s management setting forth a discussion of Borrower’s financial
condition, changes in financial condition and results of operations.


 


6.1.3        Compliance
Certificate.


 


Contemporaneously with the
furnishing of a copy of each annual audit report pursuant to Section 6.1.1
and each set of interim reports issued at the end of each Fiscal Quarter pursuant
to Section 6.1.2 (a) a duly completed Compliance Certificate, with
appropriate insertions, dated the date of such annual report or such quarterly
statements, and signed by the chief financial officer of Borrower, containing a
computation of the financial ratios and restrictions set forth in Section 7.12
and to the effect that such officer has not become aware of any Event of
Default or Default that has occurred and is continuing or, if there is any such
event, describing it and the steps, if any, being taken to cure it and (b) an
Availability Certificate showing a determination of Eligible Availability.


 


41

















 


6.1.4        Notice
of Default; Litigation; ERISA Matters.


 


Promptly upon becoming aware of
any of the following, written notice describing the same and the steps being
taken by Borrower or the applicable Loan Party affected thereby with respect
thereto:


 


(a)          the
occurrence of an Event of Default or a Default;


 


(b)         any
litigation, arbitration or governmental investigation or proceeding not
previously disclosed by Borrower to Lender which has been instituted or, to the
knowledge of Borrower, is threatened against Borrower or any other Loan Party
or to which any of the properties of any thereof is subject which could
reasonably be expected to have a Material Adverse Effect;


 


(c)          the
institution of any steps by any member of the Controlled Group or any Canadian
Subsidiary or any other Person to terminate any Pension Plan, or the failure of
any member of the Controlled Group or any Canadian Subsidiary to make a
required contribution to any Pension Plan (if such failure is sufficient to
give rise to a Lien under Section 302(f) of ERISA or a Lien under
applicable Canada law) or to any Multiemployer Pension Plan, or the taking of
any action with respect to a Pension Plan which could reasonably be expected to
result in the requirement that Borrower or any other Loan Party furnish a bond
or other security to the PBGC or, in Canada, the Pension Benefit Fund, or such
Pension Plan, or the occurrence of any event with respect to any Pension Plan
or Multiemployer Pension Plan which could reasonably be expected to result in
the incurrence by any member of the Controlled Group or any Canadian Subsidiary
of any material liability, fine or penalty (including any claim or demand for
withdrawal liability or partial withdrawal from any Multiemployer Pension
Plan), or any material increase in the contingent liability of Borrower or any
other Loan Party with respect to any post-retirement welfare plan benefit, or
any notice that any Multiemployer Pension Plan is in reorganization, that
material increased contributions may be required to avoid a reduction in plan
benefits or the imposition of an excise tax, that any such plan is or has been
funded at a rate less than that required under Section 412 of the IRC,
that any such plan is being (or is reasonably likely to be) terminated, or that
any such plan is (or is reasonably likely to become) insolvent;


 


(d)         any
cancellation or material change in any insurance maintained by Borrower or any
other Loan Party; or


 


(e)          any
other event (including (i) any violation of any applicable Environmental
Law or the assertion of any Environmental Claim or (ii) the enactment or
effectiveness of any law, rule or regulation) which could reasonably be
expected to have a Material Adverse Effect.


 


6.1.5        Management
Report.


 


Promptly upon receipt thereof,
copies of all detailed financial and management reports submitted to Borrower
or any other Loan Party by independent auditors in connection with each annual
or interim audit made by such auditors of the books of Borrower or any other
Loan Party.


 


42

















 


6.1.6        Non-Senior
Debt Notices.


 


Promptly following receipt,
copies of any notices (including notices of default or acceleration) received
from any holder or trustee of, under or with respect to any Non-Senior Debt.


 


6.1.7        Other
Information.


 


Promptly from time to time, such
other information concerning Borrower and any other Loan Party as Lender may
reasonably request, including, without limitation, within three (3) Business
Days of the Lender’s request therefor, an updated Availability Certificate.


 


6.2           Books;
Records; Inspections.


 


Keep, and cause each other Loan
Party to keep, its books and records in accordance with sound business
practices sufficient to allow the preparation of financial statements in
accordance with GAAP; permit, and cause each other Loan Party to permit, Lender
or any representative thereof to inspect the properties and operations of
Borrower or such other Loan Party; and permit, and cause each other Loan Party
to permit, at any reasonable time and with reasonable notice (or at any time
without notice if an Event of Default exists), Lender or any representative
thereof to visit any or all of its offices, to discuss its financial matters
with its officers and its independent auditors (and Borrower hereby authorizes
such independent auditors to discuss such financial matters with Lender or any
representative thereof), and to examine (and, at the expense of Borrower or the
applicable Loan Party, photocopy extracts from) any of its books or other
records; and permit, and cause each other Loan Party to permit, Lender and its
representatives to inspect the Collateral and other tangible assets of Borrower
or such Loan Party, to perform appraisals of the equipment of Borrower or such
Party, and to inspect, audit, check and make copies of and extracts from the
books, records, computer data, computer programs, journals, orders, receipts,
correspondence and other data relating to any Collateral. All such inspections
or audits by Lender shall be at Borrower’s expense, provided that so long as no
Event of Default or Default exists, Borrower shall not be required to reimburse
Lender for appraisals more frequently than once each Fiscal Year.


 


6.3           Maintenance
of Property; Insurance.


 


(a)          Keep,
and cause each other Loan Party to keep, all property useful and necessary in
the business of Borrower or such other Loan Party in good working order and
condition, ordinary wear and tear excepted.


 


(b)         Maintain,
and cause each other Loan Party to maintain, with responsible insurance
companies, such insurance coverage as shall be required by all laws,
governmental regulations and court decrees and orders applicable to it and such
other insurance, to such extent and against such hazards and liabilities, as is
customarily maintained by companies similarly situated; provided that in any
event, such insurance shall insure against all risks and liabilities of the
type insured against as of the Closing Date and shall have insured amounts no
less than, and deductibles no higher than, those amounts provided for as of the
Closing Date. Upon request of Lender, Borrower shall furnish to Lender a certificate
setting forth in reasonable detail the nature and extent of all insurance
maintained by Borrower and each other Loan Party. Borrower shall 


 


43

















 


cause each issuer of an
insurance policy to provide Lender with an endorsement (i) showing Lender
as a loss payee with respect to each policy of property or casualty insurance
and naming Lender as an additional insured with respect to each policy of
liability insurance, (ii) providing that 30 days’ notice will be given to
Lender prior to any cancellation of, or reduction or change in coverage
provided by or other material modification to such policy and
(iii) reasonably acceptable in all other respects to Lender. Borrower
shall execute and deliver to Lender a collateral assignment, in form and
substance satisfactory to Lender, of each business interruption insurance
policy maintained by the Loan Parties.


 


(c)          Unless
Borrower provides Lender with evidence of the continuing insurance coverage
required by this Agreement, Lender may purchase insurance at Borrower’s expense
to protect Lender’s interests in the Collateral. This insurance may, but need
not, protect Borrower’s and each other Loan Party’s interests. The coverage
that Lender purchases may, but need not, pay any claim that is made against
Borrower or any other Loan Party in connection with the Collateral. Borrower
may later cancel any insurance purchased by Lender, but only after providing
Lender with evidence that Borrower has obtained the insurance coverage required
by this Agreement. If Lender purchases insurance for the Collateral, as set
forth above, Borrower will be responsible for the costs of that insurance,
including interest and any other charges that may be imposed with the placement
of the insurance, until the effective date of the cancellation or expiration of
the insurance and the costs of the insurance may be added to the principal
amount of the Loans owing hereunder.


 


6.4           Compliance
with Laws; Payment of Taxes and Liabilities.


 


(a) Comply, and cause each other
Loan Party to comply, in all material respects with all applicable laws, rules,
regulations, decrees, orders, judgments, licenses and permits, except where
failure to comply could not reasonably be expected to have a Material Adverse
Effect; (b) without limiting clause (a) above, ensure, and cause each
other Loan Party to ensure, that no person who owns a controlling interest in
or otherwise controls a Loan Party is or shall be (i) listed on the
Specially Designated Nationals and Blocked Person List maintained by the Office
of Foreign Assets Control (“OFAC”), Department of the Treasury, and/or
any other similar lists maintained by OFAC pursuant to any authorizing statute,
Executive Order or regulation or (ii) a person designated under Section 1(b),
(c) or (d) or Executive Order No. 13224 (September 23, 2001), any related
enabling legislation or any other similar Executive Orders; (c) without
limiting clause (a) above, comply and cause each other Loan Party to comply,
with all applicable Bank Secrecy Act and anti-money laundering laws and
regulations and (d) pay, and cause each other Loan Party to pay, prior to
delinquency, all taxes and other governmental charges against it or any of its
property, as well as claims of any kind which, if unpaid, could become a Lien
on any of its property; provided that the foregoing shall not require Borrower
or any other Loan Party to pay any such tax or charge so long as it shall
contest the validity thereof in good faith by appropriate proceedings and shall
set aside on its books adequate reserves with respect thereto in accordance
with GAAP.


 


6.5           Maintenance
of Existence.


 


Maintain and preserve, and
(subject to Section 7.4) cause each other Loan Party to maintain
and preserve, (a) its existence and good standing in the jurisdiction of
its organization 


 


44

















 


and (b) its qualification
to do business and good standing in each jurisdiction where the nature of its
business makes such qualification necessary, other than any such jurisdiction
where the failure to be qualified or in good standing could not reasonably be
expected to have a Material Adverse Effect.


 


6.6           Employee
Benefit Plans.


 


Maintain, and cause each other
Loan Party to maintain, each Pension Plan in substantial compliance with all
applicable requirements of law and regulations.


 


6.7           Environmental
Matters.


 


If any release or disposal of
Hazardous Substances shall occur or shall have occurred on any real property or
any other assets of Borrower or any other Loan Party, cause, or direct the
applicable Loan Party to cause, the prompt containment and removal of such
Hazardous Substances and the remediation of such real property or other assets
as is necessary to comply in all material respects with all applicable
Environmental Laws and to preserve the value of such real property or other
assets.


 


6.8           Collateral
Access Agreements.


 


Promptly notify Lender of any
location of Borrower or any other Loan Party at which Collateral with a book
value in excess of $200,000 is placed or otherwise maintained located (whether
such location is now existing or created or acquired after the Effective Date)
and, with respect to each such location the real property for which is not
owned by a Loan Party, if requested by Lender, promptly obtain written
subordinations or waivers, in form and substance satisfactory to Lender, of all
present and future Liens to which the owner or lessor of such premises may be
entitled to assert against the Collateral.


 


6.9           Further
Assurances; Post-Closing.


 


(a)          Take,
and cause each other Loan Party to take, such actions as are necessary or as
Lender may reasonably request from time to time to ensure that the Obligations
of Borrower and each other Loan Party under the Loan Documents are secured by
substantially all of the assets of Borrower and each Loan Party (as well as all
equity interests of Borrower and each Subsidiary) and guaranteed by each Loan
Party (including, promptly upon the acquisition or creation thereof, any
Subsidiary acquired or created after the Closing Date), in each case including
(a) the execution and delivery of guaranties, security agreements, pledge
agreements, mortgages, deeds of trust, financing statements and other
documents, and the filing or recording of any of the foregoing and (b) the
delivery of certificated securities and other Collateral with  respect to which perfection is obtained by
possession.


 


(b)         Execute
and deliver, or cause to be executed and delivered, as applicable, to the
Lender each of the items listed on Schedule 6.9 attached hereto (collectively,
the “Post-Closing Items”) on or before the applicable due date listed after
each such Post-Closing Item, each of which Post-Closing Items must be in form,
substance and content reasonably satisfactory to Lender.


 


45

















 


Section 7.               Negative
Covenants.


 


Until the expiration or
termination of the Commitments and thereafter until all Obligations (other than
contingent indemnification obligations to the extent no claim giving rise
thereto has been asserted) of Borrower and the other Loan Parties hereunder and
under the other Loan Documents are Paid in Full, Borrower agrees that, unless
at any time Lender shall otherwise expressly consent in writing, it will:


 


7.1           Debt.


 


Not, and not permit any other
Loan Party to, create, incur, assume or suffer to exist any Debt, except:


 


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


 


(b)         Debt
secured by Liens permitted by Section 7.2(d), and extensions,
renewals and refinancings thereof; provided that the aggregate amount of all
such Debt at any time outstanding shall not exceed $1,250,000;


 


(c)          Debt
of Borrower to any domestic Wholly-Owned Subsidiary or Canadian Subsidiary or
Debt of any domestic Wholly-Owned Subsidiary or Canadian Subsidiary to Borrower
or another domestic Wholly-Owned Subsidiary; provided that such Debt shall be
evidenced by a demand note in form and substance reasonably satisfactory to
Lender and pledged and delivered to Lender pursuant to the Guarantee and
Collateral Agreement as additional collateral security for the Obligations, and
the obligations under such demand note shall be subordinated to the Obligations
hereunder in a manner reasonably satisfactory to Lender;


 


(d)         Debt
described on Schedule 7.1 as of the Closing Date, and any extension,
renewal or refinancing thereof so long as the principal amount thereof is not
increased;


 


(e)          Hedging
Obligations for bona fide hedging purposes and not for speculation;


 


(f)          guarantees
of obligations under real property leases and obligations in respect of
severance payments provided by the Borrower in favor of any Subsidiary or by
any Subsidiary in favor of either the Borrower or any other Subsidiary, so long
as any such guarantee is provided at the time such obligations are incurred;


 


(g)         Contingent
Obligations arising with respect to customary indemnification obligations in
favor of purchasers in connection with Dispositions permitted under Section 7.4;
and


 


(h)         Contingent
Obligations of Atlas consisting of guarantees of obligations of Subsidiaries of
Borrower that do not constitute Debt, in an aggregate amount not to exceed
$625,000 for all such guarantees;


 


(i)           Indebtedness
in respect of the Forest Capital Lease;


 


46

















 


(j)           earn-out
payments otherwise permitted under the terms of this Agreement and the External
Credit Facility; and


 


(k)          other
Debt, in addition to the Debt listed above, in an aggregate outstanding amount
not at any time exceeding $750,000.


 


7.2           Liens.


 


Not, and not permit any other
Loan Party to, create or permit to exist any Lien on any of its real or
personal properties, assets or rights of whatsoever nature (whether now owned
or hereafter acquired), except:


 


(a)          Liens
for taxes or other governmental charges not at the time delinquent or
thereafter payable without penalty or being diligently contested in good faith
by appropriate proceedings and, in each case, for which it maintains adequate
reserves in accordance with GAAP and the execution or other enforcement of
which is effectively stayed;


 


(b)         Liens
arising in the ordinary course of business (such as (i) Liens of carriers,
warehousemen, mechanics, landlords and materialmen and other similar Liens
imposed by law and (ii) Liens incurred in connection with worker’s
compensation, unemployment compensation and other types of social security
(excluding Liens arising under ERISA) or in connection with surety bonds, bids,
performance bonds and similar obligations) for sums not overdue or being
diligently contested in good faith by appropriate proceedings and not involving
any deposits or advances or borrowed money or the deferred purchase price of
property or services and, in each case, for which it maintains adequate
reserves in accordance with GAAP and the execution or other enforcement of
which is effectively stayed;


 


(c)          Liens
described on Schedule 7.2 as of the Closing Date;


 


(d)         subject
to the limitation set forth in Section 7.1(b), (i) Liens
arising in connection with Capital Leases (and attaching only to the property
being leased), (ii) Liens existing on property at the time of the
acquisition thereof by Borrower or any Subsidiary (and not created in
contemplation of such acquisition) and (iii) Liens that constitute
purchase money security interests on any property securing debt incurred for
the purpose of financing all or any part of the cost of acquiring such
property, provided that any such Lien attaches to such property within 60 days
of the acquisition thereof and attaches solely to the property so acquired;


 


(e)          attachments,
appeal bonds, judgments and other similar Liens, for sums not exceeding
$750,000 arising in connection with court proceedings; provided that the
execution or other enforcement of such Liens is effectively stayed and the
claims secured thereby are being actively contested in good faith and by
appropriate proceedings and such Person has established adequate reserves
therefor in accordance with GAAP;


 


(f)          easements,
rights of way, restrictions, minor defects or irregularities in title and other
similar Liens not interfering in any material respect with the ordinary conduct
of the business of Borrower or any Subsidiary;


 


(g)         Liens
arising under the Loan Documents; and


 


47

















 


(h)         the
replacement, extension or renewal of any Lien permitted by clause (c) above
upon or in the same property subject thereto arising out of the extension,
renewal or replacement of the Debt secured thereby (without increase in the
amount thereof).


 


7.3           Restricted
Payments.


 


Not, and not permit any other
Loan Party to, (a) make any dividend or other distribution to any of its
equity holders, (b) purchase or redeem any of its equity interests or any
warrants, options or other rights in respect thereof, (c) except for
Permitted Management Fees, pay any management fees or similar fees to any of
its equity holders or any Affiliate thereof; provided, that no Permitted
Management Fees or any other management or similar fees shall be paid during
the occurrence and continuance of any Default or an Event of Default or if any
Default or Event of Default would result from such payment; provided, further
that at any time such Permitted Management Fees or any portion thereof are
otherwise due and owing from the Borrower to the Manager but not payable under
this Agreement by operation of such block on the payment of Permitted
Management Fees during the occurrence and continuance of a Default or an Event
of Default or if any such payment would cause a Default or an Event of Default
(“Accrued Permitted Management Fees”), the Manager shall be entitled to
a default rate equal to 10% per annum in respect of such Accrued Permitted
Management Fees and the entire amount of such Accrued Permitted Management
Fees, together with any additional amounts which become payable to the Manager
as a result of such default rate, shall be paid to the Manager immediately upon
the waiver or cure of the subject Default or Event of Default, (d) make
any redemption, prepayment (whether mandatory or optional), defeasance,
repurchase or any other payment in respect of any Non-Senior Debt or
(e) set aside funds for any of the foregoing. Notwithstanding the
foregoing (and, in each case, so long as no Event of Default exists or would
result therefrom),


 


(i)            any
Subsidiary may pay dividends or make other distributions to Borrower or to a
Wholly-Owned Subsidiary and to the other holders of equity interests of the
Borrower or such Subsidiary; provided, that (1) any such dividends or
other distributions must be made in compliance with applicable law and (2) any
such dividends or other distributions may only be declared and paid if Borrower
or such Subsidiary remains Solvent after giving effect thereto and has an
Interest Coverage Ratio of not less than 2.0 to 1.0, calculated as of the most
recent month end date with respect to which financial statements for such
Person have been delivered pursuant to Section 6 hereof but on a pro forma
basis after giving effect to the making of such dividend or distribution;


 


(ii)           Borrower
may make distributions to Owner, as its direct parent, to permit Owner to pay
federal and state income taxes then due and owing by Owner (or its equity
holders), so long as the amount of such distributions shall not be greater, nor
the receipt by Borrower of tax benefits less, than they would have been had
Borrower not filed consolidated income tax returns with such Person;


 


(iii)          in
each case to the extent due and payable on a non-accelerated basis and
permitted under any applicable subordination provisions thereof, Borrower may
make regularly scheduled payments of interest in respect of Non-Senior Debt;


 


48

















 


(iv)          any
Loan Party may make repurchases of capital stock deemed to occur upon the
exercise of options or warrants (i.e., a cashless exercise);


 


(v)           any
Loan Party may repurchase or redeem capital stock from any former officers,
directors and employees (or their estates, spouses or former spouses) of any
Loan Party in connection with the termination of such Person’s employment (or
such directors’ directorship) with the Loan Party; provided that, in connection
with such transactions, the total cash payments under this Section shall
not exceed $500,000 in the aggregate during any Fiscal Year;


 


(vi)          Borrower
may reimburse Manager for its reasonable expenses incurred in connection with
its management of Borrower, pursuant to and in accordance with the Management
Agreement; and


 


(vii)         Borrower
or any of its Subsidiaries may pay Transaction Services Fees, in each case to
the extent that (1) such transaction fee is reasonable and customary based on
the applicable acquisition or sale, (2) such transaction fee has been approved
by the board of directors, or other governing body, of Borrower or such
Subsidiary and by the compensation committee (or its equivalent, if any) and
(3) has otherwise been approved by Lender.


 


7.4           Mergers;
Consolidations; Asset Sales.


 


(a)          Not,
and not permit any other Loan Party to, be a party to any merger or
consolidation, except for any such merger or consolidation of any Subsidiary
into Borrower or any domestic Wholly-Owned Subsidiary, or any such merger or
consolidation of two Canadian Subsidiaries.


 


(b)         Not,
and not permit any other Loan Party to, sell, transfer, dispose of, convey or
lease any of its assets or equity interests, or sell or assign with or without
recourse any receivables, except for (i) sales of Inventory in the
ordinary course of business and (ii) sales and dispositions of assets
(excluding any equity interests of Borrower or any Subsidiary) for at least
fair market value (as determined by the Board of Directors of Borrower) so long
as the net book value of all assets sold or otherwise disposed of in any Fiscal
Year does not exceed 10% of the net book value of the consolidated assets of
Borrower and the Subsidiaries as of the last day of the preceding Fiscal Year.


 


7.5           Modification
of Organizational Documents.


 


Not permit the charter, by-laws
or other organizational documents of Borrower or any other Loan Party to be
amended or modified in any way which could reasonably be expected to materially
adversely affect the interests of Lender.


 


7.6           Use
of Proceeds.


 


Use the proceeds of the Loans
solely to prepay or repay the Debt to be Repaid, for working capital, for
Capital Expenditures and for other general business purposes of Borrower and
the Subsidiaries; and not use or permit any proceeds of any Loan to be used,
either directly 


 


49

















 


or indirectly, for the purpose,
whether immediate, incidental or ultimate, of “purchasing or carrying” any
Margin Stock.


 


7.7           Transactions
with Affiliates.


 


Not, and not permit any other
Loan Party to, enter into, or cause, suffer or permit to exist any transaction,
arrangement or contract with any of its other Affiliates, which is on terms
which are less favorable than are obtainable from any Person which is not one
of its Affiliates.


 


7.8           Business
Activities.


 


Not, and not permit any other
Loan Party to, engage in any line of business other than the businesses engaged
in on the Closing Date and businesses reasonably related thereto. Not, and not
permit any other Loan Party to, issue any equity interest other than
(a) any issuance of shares of Borrower’s common equity securities pursuant
to any employee or director option or stock purchase program, benefit plan or
compensation program, or (b) any issuance by a Subsidiary to Borrower or
another Subsidiary in accordance with Section 7.3.


 


7.9           Investments.


 


Not, and not permit any other
Loan Party to, make or permit to exist any Investment in any other Person or
create or establish any Subsidiary (other than any Subsidiary formed in
compliance with Section 7.14), except the following:


 


(a)          contributions
by Borrower to the capital of any Wholly-Owned Subsidiary in existence on the
Closing Date, or by any Subsidiary to the capital of any other Wholly-Owned
Subsidiary in existence on the Closing Date, so long as the recipient of any
such capital contribution has guaranteed the Obligations and such guaranty is secured
by a pledge of all of its equity interests and substantially all of its real
and personal property, in each case in accordance with Section 6.9;


 


(b)         Investments
constituting Debt permitted by Section 7.1(c);


 


(c)          Contingent
Obligations constituting Debt permitted by Section 7.1 or Liens
permitted by Section 7.2;


 


(d)         Cash
Equivalent Investments;


 


(e)          bank
deposits in the ordinary course of business;


 


(f)          Investments
in securities of Account Debtors received pursuant to any plan of
reorganization or similar arrangement upon the bankruptcy or insolvency of such
Account Debtors;


 


(g)         Investments
listed on Schedule 7.9 as of the Closing Date; and


 


50

















 


(h)         any
purchase or other acquisition by Borrower or any Wholly-Owned Subsidiary that
is also a Domestic Subsidiary of the assets or equity interests of any Domestic
Subsidiary.


 


7.10         Restriction
of Amendments to Certain Documents.


 


Not amend or otherwise modify,
or waive any rights under (a) any provisions of any Non-Senior Debt (other than
Term B Loans, which amendment, modification or waiver of rights shall be
governed by this Agreement), or (b) the Management Agreement.


 


7.11         Fiscal
Year.


 


Not change its Fiscal Year.


 


7.12         Financial
Covenants.


 


7.12.1      Fixed
Charge Coverage Ratio.


 


Not permit the Fixed Charge
Coverage Ratio for any Computation Period to be less than 1.1 to 1.0.


 


7.12.2      Interest
Coverage Ratio.


 


Not permit the Interest Coverage
Ratio for any Computation Period to be less than 1.75 to 1.0.


 


7.12.3      Capital
Expenditures.


 


Not permit the aggregate amount
of all Capital Expenditures made by Borrower and the Subsidiaries in any Fiscal
Year to exceed $10,000,000.


 


7.12.4      Total
Debt to EBITDA Ratio.


 


Not permit the Total Debt to
EBITDA Ratio as of the last day of any Computation Period to exceed 6.0 to1.0.


 


7.13         Bank
Accounts.


 


Not, and not permit any other
Loan Party, to maintain or establish any new bank accounts other than the bank
accounts set forth on Schedule 7.13 without prior written notice to Lender
and unless Lender, Borrower or such other Loan Party and the bank at which the
account is to be opened enter into a tri-party agreement regarding such bank
account pursuant to which such bank acknowledges the security interest and
control of Lender in such bank account and agrees to limit its set-off rights
on terms satisfactory to Lender and otherwise acceptable to Lender.


 


7.14         Subsidiaries.


 


Not, and not permit any other
Loan Party, to establish or acquire any Subsidiary unless the Loan Parties shall
have caused such new Subsidiary to take all actions pursuant to 


 


51

















 


Section 6.9
hereof with respect to such Subsidiary and such other actions as reasonably
requested by Lender, including (a) execution by such Subsidiary of a joinder to
the Guarantee and Collateral Agreement, (b) a pledge to Lender of the capital
securities of such Subsidiary, (c) such amendments to this Agreement and the
other Loan Documents related to the addition of such Subsidiary as may be
requested by Lender, and (d) such certificates, resolutions, instruments,
copies of filings and notices, and other materials relating to such Subsidiary
as Lender may reasonably request.


 


7.15         Inconsistent
Agreements.


 


Not, and not permit any other Loan
Party to, enter into any agreement containing any provision which would
(a) be violated or breached by any borrowing by Borrower hereunder or by
the performance by Borrower or any other Loan Party of any of its Obligations
hereunder or under any other Loan Document, (b) prohibit Borrower or any
other Loan Party from granting to Lender a Lien on any of its assets or
(c) create or permit to exist or become effective any encumbrance or
restriction on the ability of any other Loan Party to (i) pay dividends or
make other distributions to Borrower or any other Subsidiary, or pay any Debt
owed to Borrower or any other Subsidiary, (ii) make loans or advances to
Borrower or any other Loan Party or (iii) transfer any of its assets or
properties to Borrower or any other Loan Party other than (A) customary
restrictions and conditions contained in agreements relating to the sale of all
or a substantial part of the capital stock or assets of any Subsidiary pending
such sale, provided such restrictions and conditions apply only to the
Subsidiary to be sold and such sale is permitted hereunder
(B) restrictions or conditions imposed by any agreement relating to
purchase money Debt, Capital Leases and other secured Debt permitted by this
Agreement if such restrictions or conditions apply only to the property or
assets securing such Debt and (C) customary provisions in leases and other
contracts restricting the assignment thereof.


 


7.16         Equity
Cure Right. In the event of an actual or prospective breach
of the financial covenants set forth in Sections 7.12.1, 7.12.2 and 7.12.4 of
this Agreement, Borrower shall have the right to issue additional common equity
or preferred equity (in the case of preferred equity, on terms reasonably
satisfactory to the Lender) to the Investor Group for cash (each such issuance
by the Borrower, an “Equity Cure Contribution”). In order to cure such
actual or prospective breach, an Equity Cure Contribution shall be deemed an
addition to Consolidated Net Income in the most recently ended fiscal quarter
for the sole purpose of measuring EBITDA, the Fixed Charge Coverage Ratio and
Interest Coverage Ratio set forth in Sections 7.12.1, 7.12.2 and 7.12.4,
provided that (i) the aggregate amount of any Equity Cure Contribution shall
not exceed $1,500,000, (ii) no more than four (4) Equity Cure
Contributions may occur during the term of this Agreement, (iii) no more
than one Equity Cure Contribution may occur in any 12-month period,
(iv) the aggregate amount of all Equity Cure Contributions made during the
term of this Agreement shall not exceed $4,500,000, (v) if a Compliance
Certificate showing a breach of any covenant set forth in Section 7.12.1
and/or 7.12.2 is delivered (or was due to be delivered), any corresponding
Equity Cure Contribution must be made within 15 Business Days of the date
such Compliance Certificate was due, (vi) no Default or Event of Default
(other than the breach of the financial covenants to be cured by the Equity
Cure Contribution) shall have occurred or be continuing, and (vii) Borrower
shall have otherwise obtained Lender’s prior written consent. On the date that
an Equity Cure Contribution is made, the Financial Officer shall deliver to the
Administrative Agent (A) written notice of such Equity Cure Contribution 


 


52

















 


and (B) a compliance
certificate demonstrating compliance with the financial covenants after
application of the Equity Cure Contribution.


 


Section 8.               Events
of Default; Remedies.


 


8.1           Events
of Default.


 


Each of the following shall
constitute an Event of Default under this Agreement:


 


8.1.1        Non-Payment
of Credit.


 


Default in the payment when due
of the principal of any Loan; or default, and continuance thereof for 2 days,
in the payment when due of any interest, fee or other amount payable by any
Loan Party hereunder or under any other Loan Document.


 


8.1.2        Default
Under Other Debt.


 


Any default shall occur and
continue until the termination of any applicable cure period under the terms
applicable to any other Debt of any Loan Party in an aggregate amount (for all
such Debt so affected and including un-drawn committed or available amounts and
amounts owing to all creditors under any combined or syndicated credit
arrangement) exceeding $750,000 and such default shall (a) consist of the
failure to pay such Debt when due, whether by acceleration or otherwise, or
(b) accelerate the maturity of such Debt or permit the holder or holders
thereof, or any trustee or agent for such holder or holders, to cause such Debt
to become due and payable (or require Borrower or any other Loan Party to
purchase or redeem such Debt or post cash collateral in respect thereof) prior
to its expressed maturity.


 


8.1.3        Bankruptcy;
Insolvency.


 


Any Loan Party becomes insolvent
or generally fails to pay, or admits in writing its inability or refusal to
pay, debts as they become due; or any Loan Party applies for, consents to, or
acquiesces in the appointment of a trustee, receiver or other custodian for
such Loan Party or any property thereof, or makes a general assignment for the
benefit of creditors; or, in the absence of such application, consent or
acquiescence, a trustee, receiver or other custodian is appointed for any Loan
Party or for a substantial part of the property of any thereof and is not discharged
within 60 days; or any bankruptcy, reorganization, debt arrangement, or other
case or proceeding under any bankruptcy or insolvency law, or any dissolution
or liquidation proceeding, is commenced in respect of any Loan Party, and if
such case or proceeding is not commenced by such Loan Party, it is consented to
or acquiesced in by such Loan Party, or remains for 60 days un-dismissed; or
any Loan Party takes any action to authorize, or in furtherance of, any of the
foregoing.


 


8.1.4        Non-Compliance
with Loan Documents.


 


(a) Failure by Borrower to
comply with or to perform any covenant set forth in Sections  6.1.1,
6.1.2, 6.1.3, 6.1.4, 6.1.6, 6.1.7, 6.1.9,
6.3(b) and 6.3(c), 6.5, 6.7, 6.8, 6.9
and Section 7; or (b) failure by any Loan Party to comply with or
to perform any other provision of this Agreement or any other Loan Document
applicable to it (and not constituting an Event of 


 


53

















 


Default under any other
provision of this Section 8) and continuance of such failure described
in this clause (b) for 30 days.


 


8.1.5        Representations;
Warranties.


 


Any representation or warranty
made by any Loan Party herein or any other Loan Document is breached or is
false or misleading in any material respect, or any schedule, certificate,
financial statement, report, notice or other writing furnished by any Loan
Party to Lender in connection herewith is false or misleading in any material
respect on the date as of which the facts therein set forth are stated or
certified.


 


8.1.6        Pension
Plans.


 


Institution of any steps by any
Person to terminate a Pension Plan if as a result of such termination any Loan
Party or any member of the Controlled Group could be required to make a
contribution to such Pension Plan, or could incur a liability or obligation to
such Pension Plan, in excess of $750,000; (b) a contribution failure
occurs with respect to any Pension Plan sufficient to give rise to a Lien under
Section 302(f) of ERISA; or (c) there shall occur any withdrawal or
partial withdrawal from a Multiemployer Pension Plan and the withdrawal
liability (without unaccrued interest) to Multiemployer Pension Plans as a
result of such withdrawal (including any outstanding withdrawal liability that
Borrower or any other Loan Party or any member of the Controlled Group have
incurred on the date of such withdrawal) exceeds $750,000.


 


8.1.7        Judgments.


 


Final judgments, awards or
orders (or any settlement of any claim that, if breached, could result in a
judgment, order or award) which exceed an aggregate of $750,000 shall be
rendered against any Loan Party and shall not have been paid, discharged or
vacated or had execution thereof stayed pending appeal within 30 days after
entry or filing of such judgments; provided, however, that any such judgment,
order, award or settlement shall not give rise to an Event of Default under
this subsection if and for so long as (A) the amount of such judgment, order,
award or settlement is covered by a valid and binding policy of insurance
between the defendant and the insurer covering full payment thereof and (B)
such insurer has been notified, and has not disputed the claim made for
payment, of the amount of such judgment, order, award or settlement..


 


8.1.8        Invalidity
of Collateral Documents.


 


Any Collateral Document shall
cease to be in full force and effect; or any Loan Party (or any Person by,
through or on behalf of any Loan Party) shall contest in any manner the
validity, binding nature or enforceability of any Collateral Document.


 


8.1.9        Invalidity
of Subordination Provisions.


 


Any subordination provision in
any document or instrument governing Non-Senior Debt, or any subordination
provision in any subordination agreement that relates to any Non-Senior Debt or
any subordination provision in any guaranty by any Loan Party of any 


 


54

















 


Non-Senior Debt, shall cease to
be in full force and effect, or any Person (including the holder of any
applicable Non-Senior Debt) shall contest in any manner the validity, binding
nature or enforceability of any such provision.


 


8.1.10      Change
of Control.


 


(a)          Owner
and its Investment Affiliates shall collectively cease to, directly or
indirectly, (i) own and control at least 51% of the outstanding equity
interests of Borrower owned by them on the Closing Date (after giving effect to
the Related Transactions) or (ii) possess the right to elect (through
contract, ownership of voting securities or otherwise) at all times a majority
of the board of directors (or similar governing body) of Borrower and to direct
the management policies and decisions of Borrower, (b) the Borrower shall cease
to directly own and control 100% of the outstanding equity interest of the
Target, or (c) a “Change of Control” or other similar event shall occur, as
defined in, or under, any documentation evidencing or otherwise relating to any
Non-Senior Debt.


 


8.2           Remedies.


 


If any Event of Default
described in Section 8.1.3 shall occur, the Commitments shall
immediately terminate and the Loans and all other Obligations shall become
immediately due and payable, all without presentment, demand, protest or notice
of any kind; and, if any other Event of Default shall occur and be continuing,
Lender shall declare the Commitments to be terminated in whole or in part and/or
declare all or any part of the Loans and other Obligations to be due and
payable, whereupon the Commitments shall immediately terminate (or be reduced,
as applicable) and/or the Loans and other Obligations shall become immediately
due and payable (in whole or in part, as applicable), all without presentment,
demand, protest or notice of any kind. Lender shall promptly advise Borrower of
any such declaration, but failure to do so shall not impair the effect of such
declaration. Notwithstanding the foregoing, the effect as an Event of Default
of any event described in Section 8.1.1 may only be waived by the
written concurrence of Lender, and the effect as an Event of Default of any
other event described in this 0 may be waived by the written concurrence
of Lender. Any cash collateral delivered hereunder shall be held by Lender
(without liability for interest thereon) and applied to the Obligations and any
excess shall be delivered to Borrower or as a court of competent jurisdiction
may elect.


 


8.3           Remedial
Action Against Collateral.


 


Notwithstanding anything to the
contrary contained herein or in any other Loan Document to the contrary, if
there has been an assignment or assignments by Lender to one or more Persons of
either the Term Loan B or of the Term Loan A or Revolving Loans (or Revolving
Commitments), only those Persons to whom Senior Debt is owed shall have the
exclusive right with respect to the taking of enforcement action (or not taking
enforcement action) against the Collateral upon the occurrence and during the
continuation of an Event of Default, including, but not limited to, the
exclusive right with respect to taking or retaking possession of the Collateral
and holding, preparing for sale, processing, selling, leasing, disposing of, or
liquidating the Collateral, pursuant to a foreclosure or otherwise; it being
understood that such holders of Senor Debt shall only take such action as shall
be approved by the holders of a majority in outstanding principal amount of
such Senior Debt.  No holder of 


 


55














 


Non-Senior Debt shall contest in any manner
any such action or inaction with respect to the Collateral in accordance with
the provisions of this Section 8.3.


 


Section 9.               Miscellaneous.


 


9.1           Waiver;
Amendments.


 


No delay on the part of Lender
in the exercise of any right, power or remedy shall operate as a waiver
thereof, nor shall any single or partial exercise by it of any right, power or
remedy preclude other or further exercise thereof, or the exercise of any other
right, power or remedy. No amendment, modification or waiver of, or consent
with respect to, any provision of this Agreement, the Notes or any of the other
Loan Documents (or any subordination and intercreditor agreement or other
subordination provisions relating to any Non-Senior Debt) shall in any event be
effective unless the same shall be in writing and approved by Lender, and then
any such amendment, modification, waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.


 


9.2           Notices.


 


Except as otherwise provided in Sections 2.2.2,
all notices hereunder shall be in writing (including facsimile transmission)
and shall be sent to the applicable party at its address shown on Annex II
or at such other address as such party may, by written notice received by the
other parties, have designated as its address for such purpose. Notices sent by
facsimile transmission shall be deemed to have been given when sent; notices
sent by mail shall be deemed to have been given three Business Days after the
date when sent by registered or certified mail, postage prepaid; and notices
sent by hand delivery or overnight courier service shall be deemed to have been
given when received. For purposes of Sections 2.2.2, Lender shall
be entitled to rely on telephonic instructions from any person that Lender in
good faith believes is an authorized officer or employee of Borrower, and
Borrower shall hold Lender harmless from any loss, cost or expense resulting
from any such reliance. Each of Borrower and Lender hereby agree that Lender
may, in its discretion, deliver information and notices to such financial
institutions as may be a party hereto from time to time using the internet
service “Intralinks.”


 


9.3           Computations.


 


Unless otherwise specifically
provided herein, any accounting term used in this Agreement shall have the
meaning customarily given such term in accordance with GAAP, and all financial
computations hereunder shall be computed in accordance with GAAP consistently
applied. The explicit qualification of terms or computations by the phrase “in
accordance with GAAP” shall in no way be construed to limit the foregoing.


 


9.4           Costs;
Expenses.


 


Borrower agrees to pay on demand
all reasonable out-of-pocket costs and expenses of Lender (including Legal
Costs) in connection with the preparation, execution, syndication, delivery and
administration (including perfection and protection of Collateral) of this
Agreement, the other Loan Documents and all other documents provided for herein
or delivered or to be delivered hereunder or in connection herewith (including
any proposed or actual amendment, 


 


56

















 


supplement or waiver to any Loan
Document), and all reasonable out-of-pocket costs and expenses (including Legal
Costs) incurred by Lender after an Event of Default in connection with the
collection of the Obligations and enforcement of this Agreement, the other Loan
Documents or any such other documents. In addition, Borrower agrees to pay, and
to save Lender harmless from all liability for, any fees of Borrower’s auditors
in connection with any reasonable exercise by Lender of their rights pursuant
to Section 6.4. All Obligations provided for in this Section 9.4
shall survive repayment of the Loans, cancellation of the Notes and termination
of this Agreement.


 


9.5           Indemnification
by Borrower.


 


In consideration of the
execution and delivery of this Agreement by Lender and the agreement to extend
the Commitments provided hereunder, Borrower hereby agrees to indemnify, exonerate
and hold Lender, and each of the officers, directors, employees, Affiliates and
agents of Lender (each a “Lender Party”) free and harmless from and
against any and all actions, causes of action, suits, losses, liabilities,
damages and expenses, including Legal Costs (collectively, the “Indemnified
Liabilities”), incurred by Lender Parties or any of them as a result of, or
arising out of, or relating to (a) any tender offer, merger, purchase of
equity interests, purchase of assets (including the Related Transactions) or
other similar transaction financed or proposed to be financed in whole or in
part, directly or indirectly, with the proceeds of any of the Loans,
(b) the use, handling, release, emission, discharge, transportation,
storage, treatment or disposal of any Hazardous Substance at any property owned
or leased by Borrower or any other Loan Party, (c) any violation of any
Environmental Laws with respect to conditions at any property owned or leased
by any Loan Party or the operations conducted thereon, (d) the
investigation, cleanup or remediation of offsite locations at which any Loan
Party or their respective predecessors are alleged to have directly or
indirectly disposed of Hazardous Substances or (e) the execution,
delivery, performance or enforcement of this Agreement or any other Loan
Document by Lender, except to the extent any such Indemnified Liabilities
result from the applicable Lender Party’s own gross negligence or willful
misconduct as determined by a court of competent jurisdiction. If and to the
extent that the foregoing undertaking may be unenforceable for any reason,
Borrower hereby agrees to make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is permissible under
applicable law. All Obligations provided for in this Section 9.5
shall survive repayment of the Loans, cancellation of the Notes, any
foreclosure under, or any modification, release or discharge of, any or all of
the Collateral Documents and termination of this Agreement.


 


9.6           Marshaling;
Payments Set Aside.


 


Lender shall be under no
obligation to marshal any assets in favor of Borrower or any other Person or
against or in payment of any or all of the Obligations. To the extent that
Borrower makes a payment or payments to Lender, or Lender enforces its Liens or
exercises its rights of set-off, and such payment or payments or the proceeds
of such enforcement or set-off or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by Lender in its discretion)
to be repaid to a trustee, receiver or any other party in connection with any
bankruptcy, insolvency or similar proceeding, or otherwise, then to the extent
of such recovery, the obligation hereunder or 


 


57

















 


part thereof originally intended
to be satisfied shall be revived and continued in full force and effect as if
such payment had not been made or such enforcement or setoff had not occurred.


 


9.7           Nonliability
of Lender.


 


The relationship between
Borrower on the one hand and Lender on the other hand shall be solely that of
borrower and lender. Lender shall have no fiduciary responsibility to Borrower.
Lender undertakes no responsibility to Borrower to review or inform Borrower of
any matter in connection with any phase of Borrower’s business or operations. Execution
of this Agreement by Borrower constitutes a full, complete and irrevocable
release of any and all claims which Borrower may have at law or in equity in
respect of all prior discussions and understandings, oral or written, relating
to the subject matter of this Agreement and the other Loan Documents. Lender
shall not have any liability with respect to, and Borrower hereby waives,
releases and agrees not to sue for, any special, indirect, punitive or
consequential damages or liabilities.


 


9.8           Confidentiality.


 


Lender agrees to use
commercially reasonable efforts (equivalent to the efforts Lender applies to
maintain the confidentiality of its own confidential information) to maintain
as confidential all information provided to them by any Loan Party and
designated as confidential, except that Lender may disclose such information
(a) to Persons employed or engaged by Lender or any of its Affiliates
(including collateral managers of Lender) in evaluating, approving, structuring
or administering the Loans and the Commitments; (b) to any assignee or
participant or potential assignee or participant that has agreed to comply with
the covenant contained in this Section 9.8 (and any such assignee
or participant or potential assignee or participant may disclose such
information to Persons employed or engaged by them as described in clause (a)
above); (c) as required or requested by any federal or state regulatory
authority or examiner, or any insurance industry association, or as reasonably
believed by Lender to be compelled by any court decree, subpoena or legal or
administrative order or process; (d) as, on the advice of Lender’s
counsel, is required by law; (e) in connection with the exercise of any
right or remedy under the Loan Documents or in connection with any litigation
to which Lender is a party; (f) to any nationally recognized rating agency
or investor of Lender that requires access to information about Lender’s
investment portfolio in connection with ratings issued or investment decisions
with respect to Lender; (g) that ceases to be confidential through no
fault of Lender; or (h) to a Person that is an investor or prospective
investor in a Securitization that agrees that its access to information
regarding the Borrower and the Loans and Commitments is solely for purposes of
evaluating an investment in such Securitization and who agrees to treat such
information as confidential; or (i) to a Person that is a trustee,
collateral manager, servicer, noteholder or secured party in a Securitization
in connection with the administration, servicing and reporting on the assets
serving as collateral for such Securitization. For purposes of this Section, “Securitization”
means a public or private offering by Lender or any of its Affiliates or their
respective successors and assigns, of securities which represent an interest
in, or which are collateralized, in whole or in part, by the Loans or the
Commitments. Notwithstanding the foregoing, Borrower consents to the
publication by Lender of a tombstone or similar advertising material relating
to the financing transactions contemplated by this Agreement, and Lender 


 


58

















 


reserves the right to provide to
industry trade organizations information necessary and customary for inclusion
in league table measurements.


 


9.9           Captions.


 


Captions used in this
Agreement are for convenience only and shall not affect the construction
of this Agreement.


 


9.10         Nature
of Remedies.


 


All Obligations of Borrower and
rights of Lender expressed herein or in any other Loan Document shall be in
addition to and not in limitation of those provided by applicable law. No
failure to exercise and no delay in exercising, on the part of Lender, any
right, remedy, power or privilege hereunder, shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege.


 


9.11         Counterparts.


 


This Agreement may be executed
in any number of counterparts and by the different parties hereto on
separate counterparts and each such counterpart shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same Agreement. Receipt by telecopy of any executed signature page to this
Agreement or any other Loan Document shall constitute effective delivery of
such signature page.


 


9.12         Severability.


 


The illegality or
unenforceability of any provision of this Agreement or any instrument or
agreement required hereunder shall not in any way affect or impair the legality
or enforceability of the remaining provisions of this Agreement or any
instrument or agreement required hereunder.


 


9.13         Entire
Agreement.


 


This Agreement, together with
the other Loan Documents, embodies the entire agreement and understanding among
the parties hereto and supersedes all prior or contemporaneous agreements and
understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof and any prior arrangements made with respect to the
payment by Borrower of (or any indemnification for) any fees, costs or expenses
payable to or incurred (or to be incurred) by or on behalf of Lender.


 


9.14         Successors;
Assigns.


 


This Agreement shall be binding
upon Borrower and Lender and their respective successors and assigns, and shall
inure to the benefit of Borrower and Lender and the successors and assigns of
Lender. No other Person shall be a direct or indirect legal beneficiary of, or
have any direct or indirect cause of action or claim in connection with, this
Agreement or any of the other Loan Documents. Borrower may not assign or
transfer any of its rights or Obligations 


 


59

















 


under this Agreement without the
prior written consent of Lender. Lender may collaterally assign all of its
right, title and interest under this Agreement and each of the other Loan
Documents, or any other agreement, certificate, document or instrument executed
and delivered in connection herewith or therewith, to its lender, or lenders,
under Lender’s principal senior credit facility. Lender may also, without the
consent of Borrower, make assignments of, and grant participations in, Lender’s
rights and obligations hereunder and under the other Loan Documents.


 


9.15         Governing
Law.


 


THIS AGREEMENT AND EACH NOTE, IF
ANY, SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF
THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY
WITHIN SUCH STATE, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES TO THE EXTENT
THAT SUCH PRINCIPLES WOULD REQUIRE THE APPLICATION OF LAWS OF ANOTHER
JURISDICTION.


 


9.16         Forum
Selection; Consent to Jurisdiction.


 


ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE
STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK (IN EACH CASE, SITTING IN THE BOROUGH OF MANHATTAN);
PROVIDED THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER
PROPERTY MAY BE BROUGHT, AT LENDER’S OPTION, IN THE COURTS OF ANY JURISDICTION
WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. BORROWER HEREBY EXPRESSLY
AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW
YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE. BORROWER
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL,
POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK.
BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO
ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.


 


9.17         Waiver
of Jury Trial.


 


EACH OF BORROWER AND LENDER
HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY NOTE, ANY OTHER LOAN
DOCUMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR
WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR 


 


60

















 


THEREWITH OR ARISING FROM ANY
LENDING RELATIONSHIP EXISTING IN CONNECTION WITH ANY OF THE FOREGOING, AND
AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY.


 


[SIGNATURE PAGES FOLLOW]


 


61

















 


The parties hereto have caused this Agreement to be duly executed and
delivered by their duly authorized officers as of the date first set forth
above.


 


 


	
   

  	
  ATLAS FOREST ACQUISITION CORP.

  
	
   

  	
  as Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ATLAS INDUSTRIES HOLDINGS LLC,

  
	
   

  	
  as Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
									



 


62

















 


Annex I


 


Addresses


 


Atlas Forest Acquisition Corp., as

Borrower:


 


Address for Notices:


 


	
  [                                    ]

  	
   

  	
   

  
	
  [                                    ]

  	
   

  	
   

  
	
  Attention:

  	
   

  	
  [                                    ]

  
	
  Telephone:

  	
   

  	
  (        )
         -

  
	
  Telecopy:

  	
   

  	
  (        )
         -

  
					



 


Atlas
Industries Holdings LLC,

as Lender:


 


Address for
Notices:


 


One Sound
Shore Drive, Suite 302

Greenwich, Connecticut 06830

Attention:              Timothy
J. Fazio

Telephone:            (203)
622-1094

Telecopy:              (203) 724-1638


 


Address for Payments:


 


	
  Bank:

  	
  [                                    ]

  
	
  ABA #:

  	
  [                                    ]

  
	
  Account #:

  	
  [                                    ]

  
	
  Reference:

  	
  Atlas Industries Holdings LLC (for Atlas Forest Acquisition Corp.)

  
	
  Address:

  	
  [                                    ]

  
			



 

















 


Exhibit A


 


Form of Compliance Certificate


 


Please refer to the Credit Agreement dated as of November     ,
2007 (as amended or otherwise modified from time to time, the “Credit
Agreement”) between the undersigned (“Borrower”) and Atlas
Industries Holdings LLC, as lender (together with any successors or assigns,
the “Lender”).  This certificate (this “Certificate”),
together with supporting calculations attached hereto, is delivered to Lender
pursuant to the terms of the Credit Agreement. 
Terms used but not otherwise defined herein are used herein as defined
in the Credit Agreement.


 


Enclosed herewith is a copy of the [annual audited/quarterly] report of
Borrower as at [             ,
200   ] (the “Computation Date”), which report
fairly presents in all material respects the financial condition and results of
operations [(subject to the absence of
footnotes and to normal year-end adjustments)] of Borrower as of the
Computation Date and has been prepared in accordance with GAAP consistently
applied.


 


Borrower hereby certifies and warrants that the computations set forth
on the schedule attached hereto correspond to the ratios and/or financial
restrictions contained in the Credit Agreement and such computations are true
and correct as at the Computation Date.


 


Borrower further certifies that no Event of Default or Default has
occurred and is continuing.


 


Borrower has caused this Certificate to be executed and delivered by
its officer thereunto duly authorized on [     , 200   ].


 


 


	
   

  	
  ATLAS FOREST ACQUISITION CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					



 


B-1

















 


Schedule to Compliance Certificate

Dated as of [       ,
200   ]


 


	
  A.

  	
  Section 7.12.1
  - Minimum Fixed Charge Coverage Ratio

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  Consolidated Net Income

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.

  	
  Plus:

  	
  Interest Expense 

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
  income tax expense 

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
  depreciation 

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
  amortization 

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
  other non-cash charges 

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
  management fees paid or accrued

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.

  	
  Total (EBITDA)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.

  	
  Income taxes paid

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.

  	
  Tax distributions

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.

  	
  Capital Expenditures

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.

  	
  Sum of (4), (5) and (6)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.

  	
  Remainder of (3) minus (7)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.

  	
  Interest Expense paid in cash

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.

  	
  Required
  payments of principal of Funded Debt (including Term Loans but excluding
  Revolving Loans)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.

  	
  Management fees paid in
  cash

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  12.

  	
  Sum of (9), (10) and (11)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.

  	
  Ratio of (8) to (12)

  	
   

  	
       
  to 1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  12.

  	
  Minimum Required

  	
   

  	
  1.1
  to 1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B.

  	
  Interest
  Coverage Ratio

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  EBITDA for relevant Computation Period

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.

  	
  the
  aggregate amount of management fees paid in cash by Borrower pursuant to the
  Management Agreement

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.

  	
  (1) minus (2)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.

  	
  Interest
  Expense accrued for such Computation Period and paid or payable in cash at
  anytime by Borrower and the Subsidiaries (excluding in all instances any
  interest paid in kind)

  	
   

  	
  $

  



 


B-2

















 


	
   

  	
  5.

  	
  Interest Coverage Ratio
  [(3) divided by (4)]

  	
   

  	
       
  to 1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.

  	
  Required minimum

  	
   

  	
  1.75 to 1

  
	
   

  	
   

  	
   

  
	
  C.

  	
  Section 7.12.3
  - Capital Expenditures

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  Capital Expenditures for the Fiscal Year

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.

  	
  Maximum Permitted Capital Expenditures

  	
   

  	
  $

  
	
   

  	
   

  	
   

  
	
  D.

  	
  Section 7.12.4
  – Total Debt to EBITDA

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  Total Debt as of the end
  the relevant Computation Period

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.

  	
  EBITDA for the relevant
  Computation Period

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.

  	
  Total Debt to EBITDA Ratio
  [(1) divided by (2)]

  	
   

  	
        to
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.

  	
  Permitted Maximum

  	
   

  	
  6.0
  to 1

  
	
   

  	
   

  	
   

  
						



 


B-3

















 


Exhibit B


 


Form of Note


 


	
  $

  	
   

  	
  [                 ,
  200   ]  

  [City, State]

  



 


The undersigned, Atlas Forest Acquisition Corp., a Delaware corporation
(“Borrower”), for value received, promises to pay to the order of Atlas
Industries Holdings LLC, a Delaware limited liability company (“Lender”),
at its principal office of One Sound Shore Drive, Suite 302, Greenwich,
Connecticut 06830, the aggregate unpaid amount of all Loans made to Borrower by
Lender pursuant to the Credit Agreement referred to below, such principal
amount to be payable on the dates set forth in the Credit Agreement.


 


Borrower further promises to pay interest on the unpaid principal
amount of each Loan from the date of such Loan until such Loan is paid in full,
payable at the rate(s) and at the time(s) set forth in the Credit
Agreement.  Payments of both principal
and interest are to be made in lawful money of the United States of America.


 


This Note evidences indebtedness incurred under, and is subject to the
terms and provisions of, the Credit Agreement, dated as of November     ,
2007 (as amended or otherwise modified from time to time, the “Credit
Agreement”; terms not otherwise defined herein are used herein as defined
in the Credit Agreement), between Borrower and Atlas Industries Holdings LLC,
as lender, to which Credit Agreement reference is hereby made for a statement
of the terms and provisions under which this Note may or must be paid prior to
its due date or its due date accelerated.


 


This Note is made under and governed by the laws of the State of New
York applicable to contracts made and to be performed entirely within such
State.


 


 


	
   

  	
  ATLAS FOREST ACQUISITION CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					



 


D-1

















 


Exhibit C


 


Form
of Borrowing Notice


 


Please refer to the Credit Agreement dated as of November      ,
2007 (as amended or otherwise modified from time to time, the “Credit
Agreement”) between the undersigned (“Borrower”) and Atlas
Industries Holdings LLC, a Delaware limited liability company, as Lender.  Capitalized terms used herein and not
otherwise defined shall have the meanings ascribed thereto in the Credit
Agreement.  This notice is given pursuant
to Section 2.2.2 of the Credit Agreement.  Borrower hereby requests a borrowing under
the Credit Agreement as follows:


 


The aggregate amount of the proposed borrowing is [$                  ].  The requested borrowing date for the proposed
borrowing (which is a Business Day) is [             ,
200   ].  The Revolving Loans comprising the proposed
borrowing are [Base Rate][LIBOR] Loans.  The duration of the Interest Period for each
LIBOR Loan made as part of the proposed borrowing, if applicable, is [      ] months [(which shall
be 1, 2, 3 or 6 months)].


 


Borrower has caused this Notice to be executed and delivered by its
officer thereunto duly authorized on [         ,
200   ].


 


 


	
   

  	
  ATLAS FOREST ACQUISITION CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					



 


E-1

















 


Exhibit D


 


Form of Notice of Conversion/Continuation


 


Please refer to the Credit Agreement dated as of November      ,
2007 (as amended or otherwise modified from time to time, the “Credit
Agreement”) between the undersigned (“Borrower”) and Atlas
Industries Holdings LLC, a Delaware limited liability company, as Lender.  Capitalized terms used herein and not
otherwise defined shall have the meanings ascribed thereto in the Credit
Agreement.  This notice is given pursuant
to Section 2.2.3 of the Credit Agreement.  Borrower hereby requests a [conversion][continuation] of [Term
A  Loans][Term  B Loans][Revolving Loans] as follows:


 


The date of the proposed [conversion]
[continuation] is [          ,
200   ] (which shall be a Business Day).  The aggregate amount of the [Term [A][B] Loans]
[Revolving Loans] proposed to be [converted] [continued] is $                  .  [Specify
which part is to be converted and which part is to be continued, if
appropriate.]  The Loans to be
[continued] [converted] are [Base Rate Loans] [LIBOR
Loans] and the Loans resulting from the proposed [conversion] [continuation] will be [Base
Rate Loans] [LIBOR Loans].  The duration of the requested Interest Period
for each LIBOR Loan made as part of the proposed [conversion] [continuation]
is [      ]
months (which shall be 1, 2, 3 or 6 months).


 


Borrower has caused this Notice to be executed and delivered by its
officer thereunto duly authorized on [         ,
200   ].


 


 


	
   

  	
  ATLAS FOREST ACQUISITION CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					



 


F-1

















 


Exhibit E


 


Form of Availability Certificate


 


Please refer to the Credit Agreement dated as of November      ,
2007 (as amended or otherwise modified from time to time, the “Credit
Agreement”) between the undersigned (“Borrower”) and Atlas
Industries Holdings LLC, as lender (together with any successors or assigns,
the “Lender”).  This certificate (this “Certificate”),
together with supporting calculations attached hereto, is delivered to Lender
pursuant to the terms of the Credit Agreement. 
Capitalized terms used but not otherwise defined herein shall have the
same meanings herein as in the Credit Agreement.


 


Borrower hereby certifies and warrants that at the close of business on
[          ,
200   ] (the “Calculation Date”),
Borrowing Availability was [$               ],
computed as set forth on the schedule attached hereto.


 


Borrower has caused this Certificate to be executed and delivered by
its officer thereunto duly authorized on [          ,
200    ].


 


 


	
   

  	
  [

  	
   

  	
  ]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   By:

  
	
   

  	
   Title:

  



 


F-1

















 


	
  1.

  	
  Gross Accounts

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  Less Ineligibles

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  -

  	
  Does not arise from sale of goods or services

  	
  $

  	
   

  
	
   

  	
  -

  	
  Lender’s Lien not perfected/Subject to other Lien

  	
  $

  	
   

  
	
   

  	
  -

  	
  Subject to offset, etc.

  	
  $

  	
   

  
	
   

  	
  -

  	
  Account Debtor in bankruptcy

  	
  $

  	
   

  
	
   

  	
  -

  	
  Account Debtor not in U.S. or Canada

  	
  $

  	
   

  
	
   

  	
  -

  	
  Sale on approval, sale or return, bill and hold or consignment

  	
  $

  	
   

  
	
   

  	
  -

  	
  Arises outside the ordinary course

  	
  $

  	
   

  
	
   

  	
  -

  	
  Governmental Accounts

  	
  $

  	
   

  
	
   

  	
  -

  	
  Exceeds credit limits

  	
  $

  	
   

  
	
   

  	
  -

  	
  Chattel Paper

  	
  $

  	
   

  
	
   

  	
  -

  	
  Over 60 days past due or over 90 days past invoice date

  	
  $

  	
   

  
	
   

  	
  -

  	
  Affiliate receivables

  	
  $

  	
   

  
	
   

  	
  -

  	
  Cross-age

  	
  $

  	
   

  
	
   

  	
  -

  	
  Concentration

  	
  $

  	
   

  
	
   

  	
  -

  	
  Not denominated in Dollars

  	
  $

  	
   

  
	
   

  	
  -

  	
  Other

  	
  $

  	
   

  
	
   

  	
  -

  	
  Total

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  Eligible Accounts [Item 1 minus Item 2]

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  Item 3 times 85%

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  Gross Inventory

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  Less Ineligibles

  	
   

  	
   

  
	
   

  	
  -

  	
  Lender’s Lien not perfected/Subject to
  other Lien

  	
  $

  	
   

  
	
   

  	
  -

  	
  Not Salable

  	
  $

  	
   

  
	
   

  	
  -

  	
  Located off-site and no Collateral Access
  Agreement

  	
  $

  	
   

  
	
   

  	
  -

  	
  Arises outside the ordinary course

  	
  $

  	
   

  
	
   

  	
  -

  	
  “Hot Goods”

  	
  $

  	
   

  
	
   

  	
  -

  	
  Restrictive Agreement

  	
  $

  	
   

  
	
   

  	
  -

  	
  Not located in U.S.

  	
  $

  	
   

  
	
   

  	
  -

  	
  In-transit or held or delivered on
  consignment

  	
  $

  	
   

  
	
   

  	
  -

  	
  Other

  	
  $

  	
   

  
	
   

  	
  -

  	
  Total

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  Eligible Inventory [Item 5 minus Item 6]

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  Item 7 times 65%

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  Item 4 plus Item 8

  	
   

  	
  $

  



 


F-2

















 


	
  10.

  	
  Lesser of Item 9 and Revolving Loan Commitment

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
  Reserves and allowances

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
  Borrowing Availability [Item
  10 minus Item 11]

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
  Revolving Loans

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
  Net Availability [Excess
  of Item 12 over Item 13]

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
  Required Prepayment [Excess
  of Item 13 over Item 12]

  	
   

  	
  $

  



 


F-3