ex41.htm


    

    TERM
      LOAN AGREEMENT 

    Dated
      as of November 2, 2007


     

    among


     

    THERMACLIME,
      INC., 

    CHEROKEE
      NITROGEN HOLDINGS, INC.,


    NORTHWEST
      FINANCIAL CORPORATION,


    CHEMEX
      I CORP., 

    CHEMEX
      II CORP., 

    CHEROKEE
      NITROGEN COMPANY,


    CLIMACOOL
      CORP., 

    CLIMATECRAFT,
      INC., 

    CLIMATE
      MASTER, INC., 

    DSN
      CORPORATION, 

    EL
      DORADO CHEMICAL COMPANY,


    INTERNATIONAL
      ENVIRONMENTAL
      CORPORATION, 

    KOAX
      CORP., 

    LSB
      CHEMICAL CORP., 

    THE
      CLIMATE CONTROL GROUP, INC.,


    TRISON
      CONSTRUCTION, INC.,


    THERMACLIME
      TECHNOLOGIES, INC., and


    XPEDIAIR,
      INC., 

    as
      the Borrowers, 

     

    LSB
      INDUSTRIES, INC., 

    as
      Parent, 

     

    THE
      PERSONS LISTED ON SCHEDULE
      1.01(d) HERETO, 

    as
      Lenders, 

     

    BANC
      OF AMERICA LEASING &
CAPITAL, LLC, 

    not
      in its individual capacity but
      solely as Administrative Agent and as Collateral Agent, 

     

    and


     

    BANK
      OF UTAH, 

    not
      in its individual capacity but
      solely as Payment Agent 

     

     

     

    

    BANC
      OF AMERICA LEASING &
CAPITAL, LLC, 

     

    as
      Arranger 

     

    TERM
      LOAN AGREEMENT 

     

    This
      TERM LOAN AGREEMENT
      (“Agreement”) is entered into as of November 2, 2007, among
      THERMACLIME, INC., an Oklahoma corporation (“ThermaClime”), CHEROKEE
      NITROGEN HOLDINGS, INC., an Oklahoma corporation (“Cherokee”), NORTHWEST
      FINANCIAL CORPORATION, an Oklahoma corporation (“NFC”), CHEMEX I CORP.,
      an Oklahoma corporation, CHEMEX II CORP, an Oklahoma corporation, CHEROKEE
      NITROGEN COMPANY, an Oklahoma corporation (“CNC”), CLIMACOOL CORP., an
      Oklahoma corporation, CLIMATECRAFT, INC., an Oklahoma corporation, CLIMATE
      MASTER, INC., a Delaware corporation, DSN CORPORATION, an Oklahoma corporation
      (“DSN”), EL DORADO CHEMICAL COMPANY, an Oklahoma corporation
      (“EDCC”), INTERNATIONAL ENVIRONMENTAL CORPORATION, an Oklahoma
      corporation, KOAX CORP., an Oklahoma corporation, LSB CHEMICAL CORP., an
      Oklahoma corporation, THE CLIMATE CONTROL GROUP, an Oklahoma corporation, TRISON
      CONSTRUCTION, INC., an Oklahoma corporation (“Trison”), THERMACLIME
      TECHNOLOGIES, INC., an Oklahoma corporation, and XPEDIAIR, INC., an Oklahoma
      corporation, as borrowers (each a “Borrower” and collectively the
“Borrowers”), LSB Industries, Inc., a Delaware corporation
      (“Parent”), as a guarantor, each Lender from time to time party hereto,
      BANC OF AMERICA LEASING & CAPITAL, LLC, not in its individual capacity
      but solely as Administrative Agent and as Collateral Agent, and BANK OF UTAH,
      not in its individual capacity but solely as Payment Agent. 

     

    PRELIMINARY
      STATEMENTS:


     

    The
      Borrowers have requested that
      the Lenders provide a term loan facility, and Parent, in light of the direct
      and
      indirect benefits to Parent of the availability of such term loan facility
      to
      the Borrowers, has agreed to guarantee the obligations of the Borrowers.


     

    The
      Lenders have indicated their
      willingness to make a single advance term loan facility available to the
      Borrowers, on the terms and subject to the conditions set forth herein.


     

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

     

    ARTICLE
      I.


     

    DEFINITIONS
      AND ACCOUNTING
      TERMS 

     

    1.01
Defined
      Terms. As used
      in this Agreement, the following terms shall have the meanings set forth below:
      

     

    “Act”
has
      the meaning
      specified in Section 11.21. 

     

    “Administrative
      Agent” means
      BALCAP in its capacity as administrative agent under any of the Loan Documents,
      or any successor administrative agent. 

     

    “Affiliate”
means,
      with
      respect to any Person, another Person that directly, or indirectly through
      one
      or more intermediaries, Controls or is Controlled by or is under common Control
      with the Person specified. 

     

     

     

    -
      1 - 

     

    “Affiliate
      Leases” means any
      operating lease that is entered into between any Borrower or any of its
      Subsidiaries, as lessee, and any “related party” (as defined in paragraph 5 of
      Financial Accounting Standards Board Statement No. 13, Accounting for
      leases (“FAS13”)) or Affiliate of such lessee, as lessor, that is
      required to be treated as capital lease obligations under GAAP, pursuant to
      FAS13, as amended from time to time. 

     

    “Agent”
means
      any of the
      Administrative Agent, the Collateral Agent or the Payment Agent individually
      and
“Agents” means the Administrative Agent, the Collateral Agent and the
      Payment Agent collectively. 

     

    “Agreement”
means
      this Term
      Loan Agreement. 

     

    “Alternative
      Rate” means for
      any day a fluctuating rate per annum equal to the higher of (a) the Federal
      Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect for
      such day as publicly announced from time to time by Bank of America as its
      “prime rate.” The “prime rate” is a rate set by Bank of America based upon
      various factors including Bank of America’s costs and desired return, general
      economic conditions and other factors, and is used as a reference point for
      pricing some loans, which may be priced at, above, or below such announced
      rate.
      Any change in such rate announced by Bank of America shall take effect at the
      opening of business on the day specified in the public announcement of such
      change. 

     

    “Applicable
      Percentage”
means, with respect to any Lender at any time, the percentage (carried
      out to
      the ninth decimal place) of the Term Facility represented by (i) on or
      prior to the Closing Date, such Lender’s Term Commitment at such time and
      (ii) thereafter, the principal amount of such Lender’s Term Loans at such
      time. The initial Applicable Percentage of each Lender is set forth opposite
      the
      name of such Lender on Schedule 2.01 or in the Assignment and Assumption
      pursuant to which such Lender becomes a party hereto, as applicable.


     

    “Applicable
      Rate” means three
      percent (3%) per annum. 

     

    “Appraisal”
means
      an
      appraisal performed by the Appraiser and delivered to the Payment Agent on
      the
      Closing Date which establishes the aggregate Appraised Value of the Facility
      Assets. 

     

    “Appraised
      Value” means the
      orderly liquidation value in-place of the Facility Assets. 

     

    “Appraiser”
means
      Valuation
      Research Corporation. 

     

    “Approved
      Fund” means any
      Fund that is administered or managed by (a) a Lender, (b) an Affiliate
      of a Lender or (c) an entity or an Affiliate of an entity that administers
      or manages a Lender. 

     

    “Arranger”
means
      BALCAP, in
      its capacity as arranger. 

     

    “Assigned
      Agreements” means
      (a) in connection with the Cherokee Facility, the NAESB Base Contract dated
      as of April 1, 2003 between Interconn Resources, Inc. and CNC, as modified
      by the Special Provisions to NAESB Base Contract dated as of April 1, 2003,
      and (b) in connection with the El Dorado Facility, (i) the On-Site
      Product Supply Agreement dated as of May 31, 1994 

     

     

     

    -
      2 - 

     

    between
      EDCC and Air Liquide America
      Corporation, as amended, (ii) the Anhydrous Ammonia Sales Agreement entered
      into on March 9, 2005 and made effective January 3, 2005 among Koch
      Nitrogen International SARL, Koch Nitrogen Company and EDCC, and (iii) the
      Contract for Rail Car Switching Services entered into on October 1, 1994
      between EDCC and ISC, Inc. (Watco). 

     

    “Assignee
      Group” means two or
      more Eligible Assignees that are Affiliates of one another or two or more
      Approved Funds managed by the same investment advisor. 

     

    “Assignment
      and Assumption”
means an assignment and assumption entered into by a Lender and an Eligible
      Assignee (with the consent of the Payment Agent if such consent is required
      by
Section 11.06(b)), and accepted by the Payment Agent, in
      substantially the form of Exhibit D or any other form approved by
      the Payment Agent. 

     

    “Assignment
      and Consent”
means an assignment and consent agreement entered into by each Loan Party
      which
      is a party to the Assigned Agreement to which such Assignment and Consent
      relates and each other Person party to such Assigned Agreement and which is
      substantially in the form and which provides for the rights and obligations
      set
      forth in the form of Assignment and Consent attached hereto as Exhibit G.


     

    “Attributable
      Indebtedness”
means, on any date, (a) in respect of any Synthetic Lease Obligation, the
      capitalized amount of the remaining lease or similar payments under the relevant
      lease or other applicable agreement or instrument that would appear on a balance
      sheet of such Person prepared as of such date in accordance with GAAP if such
      lease or other agreement or instrument were accounted for as a Capitalized
      Lease
      (but excluding Affiliate Leases) and (b) all Synthetic Debt of such Person.


     

    “Audited
      Financial
      Statements” means the audited consolidated balance sheets of (i) Parent
      and its Subsidiaries and (ii) ThermaClime and its Subsidiaries, in each
      case for the fiscal year ended December 31, 2006, and the related
      consolidated statements of income or operations, shareholders’ equity and cash
      flows for such fiscal year of the Parent and its Subsidiaries and ThermaClime
      and its Subsidiaries, as applicable, including the notes thereto. 

     

    “BALCAP”
means
      Banc of
      America Leasing & Capital, LLC and its successors. 

     

    “Bank
      of America” means Bank
      of America, N.A. and its successors. 

     

    “Bank
      of America Fee Letter”
means the letter agreement dated June 9, 2007 between ThermaClime and Bank
      of America. 

     

    “Bank
      of Utah” means Bank of
      Utah and its successors. 

     

    “Borrower”
and
      “Borrowers” have the meanings specified in the introductory paragraph
      hereto. 

     

    “Borrower
      Materials” has the
      meaning specified in Section 6.02. 

     

     

     

    -
      3 - 

     

    “Borrowing
      Date” means the
      date specified in the borrowing notice delivered by the Borrowers to the Payment
      Agent pursuant to Section 2.01(b). 

     

    “Borrowing
      Notice” has the
      meaning specified in Section 2.01(b). 

     

    “Business
      Day” means
      (i) any day other than a Saturday, Sunday or other day on which commercial
      banks are authorized to close under the Laws of, or are in fact closed in,
      Georgia, Oklahoma or the state where the Payment Agent’s Office is located, and
      (ii) at any time interest on the Term Loans is calculated using the LIBO
      Rate, any such day on which dealings in Dollar deposits are conducted by and
      between banks in the London interbank eurodollar market. 

     

    “Capital
      Expenditures” means,
      with respect to any Person for any period, any expenditure in respect of the
      purchase or other acquisition of any fixed or capital asset (excluding normal
      replacements and maintenance which are properly charged to current operations).
      

     

    “Capitalized
      Lease
      Obligations” means any Indebtedness represented by obligation under a
      Capitalized Lease, but excluding all Indebtedness under Affiliate Leases.


     

    “Capitalized
      Leases” means
      all leases that have been or should be, in accordance with GAAP, recorded as
      capitalized leases. 

     

    “Cash
      Equivalents” means
      (a) marketable direct obligations issued or unconditionally guaranteed by
      the United States or issued by any agency thereof and backed by the full faith
      and credit of the United States, in each case maturing within 1 year from the
      date of acquisition thereof, (b) marketable direct obligations issued by
      any state of the United States or any political subdivision of any such state
      or
      any public instrumentality thereof maturing within 1 year from the date of
      acquisition thereof and, at the time of acquisition, having the highest rating
      obtainable from either S&P or Moody’s, (c) commercial paper maturing no
      more than 1 year from the date of acquisition thereof and, at the time of
      acquisition, having a rating of A-1 or P-1, or better, from S&P or Moody’s,
      and (d) certificates of deposit or bankers’ acceptances maturing within 1
      year from the date of acquisition thereof either (i) issued by any bank
      organized under the laws of the United States or any state thereof which bank
      has a rating of A or A2, or better, from S&P or Moody’s, or
      (ii) certificates of deposit less than or equal to $100,000 in the
      aggregate issued by any other bank insured by the Federal Deposit Insurance
      Corporation. 

     

    “Change
      in Law” means the
      occurrence, after the date of this Agreement, of any of the following:
      (a) the adoption or taking effect of any law, rule, regulation or treaty,
      (b) any change in any law, rule, regulation or treaty or in the
      administration, interpretation or application thereof by any Governmental
      Authority or (c) the making or issuance of any request, guideline or
      directive (whether or not having the force of law) by any Governmental
      Authority. 

     

    “Change
      of Control” means an
      event or series of events by which: 

     

    (a)
      any “person” or “group” (as such
      terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of
      1934, but excluding any employee benefit plan of such person or its
      subsidiaries, and any person or entity acting in its capacity as trustee, agent
      or other fiduciary or administrator of any such plan) other than the Permitted
      Holders becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5
      under the Securities Exchange Act of 1934, except that a person or group shall
      be 

     

     

     

    -
      4 - 

     

    deemed
      to have “beneficial
      ownership” of all securities that such person or group has the right to acquire,
      whether such right is exercisable immediately or only after the passage of
      time
      (such right, an “option right”)), directly or indirectly, of a greater number of
      shares of Parent’s stock entitled to vote for members of the board of directors
      or equivalent governing body of Parent than the number of shares of such stock
      held by the Permitted Holders; or 

     

    (b)
      during any period of 12
      consecutive months, a majority of the members of the board of directors or
      other
      equivalent governing body of Parent cease to be composed of individuals
      (i) who were members of that board or equivalent governing body on the
      first day of such period, (ii) whose election or nomination to that board
      or equivalent governing body was approved by individuals referred to in clause
      (i) above constituting at the time of such election or nomination at least
      a majority of that board or equivalent governing body or (iii) whose
      election or nomination to that board or other equivalent governing body was
      approved by individuals referred to in clauses (i) and (ii) above
      constituting at the time of such election or nomination at least a majority
      of
      that board or equivalent governing body (excluding, in the case of both clause
      (ii) and clause (iii), any individual whose initial nomination for, or
      assumption of office as, a member of that board or equivalent governing body
      occurs as a result of an actual or threatened solicitation of proxies or
      consents for the election or removal of one or more directors by any person
      or
      group other than a solicitation for the election of one or more directors by
      or
      on behalf of the board of directors); or 

     

    (c)
      Parent ceases to directly or
      indirectly own and control 100% of the outstanding capital stock of ThermaClime
      or Cherokee; or 

     

    (d)
      ThermaClime ceases to directly
      or indirectly own and control 100% of the outstanding capital stock of each
      Borrower (other than ThermaClime or Cherokee); or 

     

    (e)
      any Borrower ceases to directly
      own and control 100% of the outstanding capital stock of each of its
      Subsidiaries extant as of the Closing Date. 

     

    “Cherokee”
has
      the meaning
      set forth in the introductory paragraph hereto. 

     

    “Cherokee
      Facility
      Collateral” means “Cherokee Collateral” as such term is defined in the
      Cherokee Mortgage and the Security Agreement.

     

    “Cherokee
      Mortgage” means the
      Mortgage, Assignment of Rents and Security Agreement and Fixture Filing
      Statement (Alabama), in the form of Exhibit F-1 dated as of the date
      hereof, between Cherokee Nitrogen Holdings, Inc., as mortgagor, and BALCAP,
      as
      mortgagee. 

     

    “Cherokee
      Site” means the
      real property described on Schedule 1.01(a). 

     

    “Closing
      Date” means the
      first date all the conditions precedent in Section 4.01 are
      satisfied or waived in accordance with Section 11.01. 

     

    “CNC”
has
      the meaning set
      forth in the introductory paragraph hereto. 

     

     

     

    -
      5 - 

     

    “Code”
means
      the Internal
      Revenue Code of 1986. 

     

    “Collateral
      Agent” means
      BALCAP in its capacity as collateral agent under any of the Loan Documents,
      or
      any successor collateral agent. 

     

    “Collateral
      Agent’s Office”
means the Collateral Agent’s address and, as appropriate, account as set forth
      on Schedule 11.02, or such other address or account as the Collateral
      Agent may from time to time notify to the Borrowers, the other Agents and the
      Lenders. 

     

    “Collateral”
means
      all of the
“Collateral” and “Mortgaged Property” referred to in the
      Collateral Documents subject to Liens in favor of the Collateral Agent for
      the
      benefit of the Secured Parties, including without limitation, the Cherokee
      Facility Collateral and the El Dorado Facility Collateral. 

     

    “Collateral
      Documents” means,
      collectively, the Security Agreement, the Mortgages, the Trademark Security
      Agreement, each of the mortgages, collateral assignments, security agreements,
      pledge agreements, intercompany lease assignments and lease subordinations,
      and
      other similar agreements delivered to the Payment Agent pursuant to
Section 6.12, and each of the other agreements, instruments or
      documents that creates or purports to create or perfect a Lien in favor of
      the
      Collateral Agent for the benefit of the Secured Parties. 

     

    “Compliance
      Certificate”
means a certificate substantially in the form of Exhibit B.


     

    “Consolidated
      EBITDA” means,
      at any date of determination, an amount equal to Consolidated Net Income of
      ThermaClime and its Subsidiaries on a consolidated basis for the most recently
      completed Measurement Period plus (a) the following to the extent
      deducted in calculating such Consolidated Net Income: (i) Consolidated
      Interest Charges, (ii) the provision for Federal, state, local and foreign
      income taxes, (iii) depreciation and amortization expense and
      (iv) other expenses reducing such Consolidated Net Income which do not
      represent a cash item in such period (in each case of or by ThermaClime and
      its
      Subsidiaries for such Measurement Period) and minus (b) the
      following to the extent included in calculating such Consolidated Net Income:
      (i) Federal, state, local and foreign income tax credits and (ii) all
      non-cash items increasing Consolidated Net Income (in each case of or by
      ThermaClime and its Subsidiaries for such Measurement Period). 

     

    “Consolidated
      Fixed Charge
      Coverage Ratio” means, at any date of determination, the ratio of: (a)(i)
      Consolidated EBITDA during the Measurement Period, less (ii) the
      aggregate amount of all Capital Expenditures made during the Measurement Period
      by ThermaClime and its Subsidiaries on a consolidated basis, but excluding
      any
      such payments to the extent financed through the incurrence of additional
      Indebtedness, less (iii) the aggregate amount of Federal, state,
      local and foreign income taxes paid in cash, in each case of or by ThermaClime
      and its Subsidiaries for the most recently completed Measurement Period; to
      (b) the sum of (i) Consolidated Interest Charges, plus
      (ii) the aggregate principal amount of all regularly scheduled principal
      payments or redemptions or similar acquisitions for value of outstanding debt
      for borrowed money (excluding (x) prepayments of principal under the
      Revolving Credit Agreement which are not accompanied by or give rise to a
      reduction in the aggregate outstanding commitments under the Revolving Credit
      Agreement and not including in this exclusion the final scheduled payment of
      amounts due under the 

     

     

     

    -
      6 - 

     

    Revolving
      Credit Agreement at
      maturity, and (y) payment at maturity of the Indebtedness of ThermaClime to
      Parent under the $6,950,000 10  3/4%
      bonds maturing in November, 2007, provided that Parent is
      the sole holder of such Indebtedness and such Indebtedness is at all times
      subject to the terms of the Intercompany Loan Subordination Agreement) for
      ThermaClime and its Subsidiaries on a consolidated basis during such Measurement
      Period, but excluding any such payments to the extent refinanced through the
      incurrence of additional Indebtedness otherwise expressly permitted under
Section 7.02, plus (iii) all amounts paid or payable by
      ThermaClime and its Subsidiaries on Capitalized Lease Obligations having a
      scheduled due date during such Measurement Period, plus
      (iv) dividends paid by ThermaClime to Parent during such Measurement Period
      as permitted hereunder. 

     

    “Consolidated
      Interest
      Charges” means, for any Measurement Period, the sum of (a) all
      interest, premium payments, debt discount, fees, charges and related expenses
      in
      connection with borrowed money (including capitalized interest and interest
      paid
      on intercompany loans (but excluding interest paid on intercompany notes solely
      as between Borrowers) or in connection with the deferred purchase price of
      assets, in each case to the extent treated as interest in accordance with GAAP,
      (b) all interest paid or payable with respect to discontinued operations
      and (c) the portion of Capitalized Lease Obligations constituting rent
      expense that is treated as interest in accordance with GAAP, in each case,
      of or
      by ThermaClime and its Subsidiaries on a consolidated basis for the most
      recently completed Measurement Period. 

     

    “Consolidated
      Leverage Ratio”
means, as of any date of determination, the ratio of (a) Consolidated Total
      Indebtedness as of such date to (b) Consolidated EBITDA of ThermaClime and
      its Subsidiaries on a consolidated basis for the most recently completed
      Measurement Period. 

     

    “Consolidated
      Net Income”
means, at any date of determination, the net income (or loss) of ThermaClime
      and
      its Subsidiaries on a consolidated basis for the most recently completed
      Measurement Period; provided that Consolidated Net Income shall exclude
      (a) extraordinary gains and extraordinary losses for such Measurement
      Period, (b) the net income of any Subsidiary during such Measurement Period
      to the extent that the declaration or payment of dividends or similar
      distributions by such Subsidiary of such income is not permitted by operation
      of
      the terms of its Organization Documents or any agreement, instrument or Law
      applicable to such Subsidiary during such Measurement Period, except that
      ThermaClime’s equity in any net loss of any such Subsidiary for such Measurement
      Period shall be included in determining Consolidated Net Income, and
      (c) any income (or loss) for such Period of any Person if such Person is
      not a Subsidiary, except that ThermaClime’s equity in the net income of any such
      Person for such Measurement Period shall be included in Consolidated Net Income
      up to the aggregate amount of cash actually distributed by such Person during
      such Measurement Period to ThermaClime or a Subsidiary as a dividend or other
      distribution (and in the case of a dividend or other distribution to a
      Subsidiary, such Subsidiary is not precluded from further distributing such
      amount to ThermaClime as described in clause (b) of this proviso).


     

    “Consolidated
      Total
      Indebtedness” means, as of any date of determination, for ThermaClime and
      its Subsidiaries on a consolidated basis, the sum of (a) the outstanding
      principal amount of all obligations, whether current or long-term, for borrowed
      money (including Obligations hereunder) and all obligations evidenced by bonds,
      debentures, notes, loan agreements or other similar 

     

     

     

    -
      7 - 

     

    instruments,
      (b) all purchase
      money Indebtedness other than Indebtedness under Affiliate Leases, (c) all
      direct obligations arising under letters of credit (including standby and
      commercial), bankers’ acceptances, bank guaranties, surety bonds and similar
      instruments, other than (i) indemnifications for which no reimbursement
      claim has been made arising under performance and payment bonds entered into
      in
      the ordinary course of Borrowers’ construction business to support Borrowers’
performance of their obligations under construction and construction supply
      contracts or the payment by Borrowers of amounts due their subcontractors and
      suppliers under such contracts and (ii) undrawn letters of credit,
      (d) all obligations in respect of the deferred purchase price of property
      or services (other than trade accounts payable in the ordinary course of
      business), (e) all Attributable Indebtedness, (f) without duplication,
      all Guarantees with respect to outstanding Indebtedness of the types specified
      in clauses (a) through (e) above of Persons other than any Borrower or
      any Subsidiary, and excluding that certain pledge by CEPOLK Holding Inc. to
      The
      Prudential Insurance Company of America of its 50% limited partnership interest
      in CEPOLK Limited Partnership to secure repayment of a loan from The Prudential
      Insurance Company of America to CEPOLK Limited Partnership; provided that other
      than the pledge of its limited partnership interest, CEPOLK Holdings Inc. does
      not have any recourse liability for the Indebtedness payable to The Prudential
      Insurance Company of America; and (g) all Indebtedness of the types
      referred to in clauses (a) through (f) above of any partnership or
      joint venture (other than a joint venture that is itself a corporation or
      limited liability company) in which a Borrower or a Subsidiary is a general
      partner or joint venturer, unless such Indebtedness is expressly made
      non-recourse to such Borrower or such Subsidiary. 

     

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

     

    “Control”
means
      the
      possession, directly or indirectly, of the power to direct or cause the
      direction of the management or policies of a Person, whether through the ability
      to exercise voting power, by contract or otherwise. “Controlling” and
“Controlled” have meanings correlative thereto. 

     

    “Debtor
      Relief Laws” means
      the Bankruptcy Code of the United States, and all other liquidation,
      conservatorship, bankruptcy, assignment for the benefit of creditors,
      moratorium, rearrangement, receivership, insolvency, reorganization, or similar
      debtor relief Laws from time to time in effect and affecting the rights of
      creditors generally. 

     

    “Default”
means
      any event or
      condition that constitutes an Event of Default or that, with the giving of
      any
      notice, the passage of time, or both, would be an Event of Default.


     

    “Default
      Rate” means, with
      respect to any Term Loan, an interest rate equal to the interest rate (including
      the Applicable Rate) otherwise applicable to such Term Loan plus
      2% per annum. 

     

    “Defaulting
      Lender” means any
      Lender that (a) has failed to fund any portion of the Term Loans required
      to be funded by it hereunder within one Business Day of the date required to
      be
      funded by it hereunder, (b) has otherwise failed to pay over to the Payment
      Agent or any other Lender any other amount required to be paid by it hereunder
      within one Business Day of the date when due, unless the subject of a good
      faith
      dispute, or (c) has been deemed insolvent or become the subject of a
      bankruptcy or insolvency proceeding. 

     

     

     

    -
      8 - 

     

    “Disposition”
or
      “Dispose” means the sale, transfer, exclusive license, lease or other
      disposition (including any sale and leaseback transaction) of any property
      by
      any Person (or the granting of any option or other right to do any of the
      foregoing), including any sale, assignment, transfer or other disposal, with
      or
      without recourse, of any notes or accounts receivable or any rights and claims
      associated therewith. 

     

    “Dollar”
and
“$”
mean
      lawful money of the United States. 

     

    “Domestic
      Subsidiary” means
      any Subsidiary that is organized under the laws of any political subdivision
      of
      the United States. 

     

    “DSN”
has
      the meaning set
      forth in the introductory paragraph hereto. 

     

    “Early
      Prepayment Period”
means the period commencing on and excluding the first anniversary of the
      Closing Date and ending on and including the third anniversary of the Closing
      Date. 

     

    “EDCC”
has
      the meaning set
      forth in the introductory paragraph hereto. 

     

    “EDN”
means
      El Dorado
      Nitrogen Company. 

     

    “El
      Dorado Facility
      Collateral” means “El Dorado Collateral” as such term is defined in the El
      Dorado Mortgage and the Security Agreement. 

     

    “El
      Dorado Mortgage” means
      the Mortgage, Assignment of Rents and Security Agreement and Fixture Filing
      Statement (Arkansas), in the form of Exhibit F-2 dated as of the date
      hereof, between Northwest Financial Corporation, as mortgagor, and BALCAP,
      as
      mortgagee. 

     

    “El
      Dorado Site” means the
      real property described on Schedule 1.01(b). 

     

    “Eligible
      Assignee” means a
      Person that is (a) a Lender, U.S.-based Affiliate of a Lender or Approved
      Fund, or (b) any other financial institution approved by Payment Agent
      whose becoming an assignee would not constitute a prohibited transaction under
      Section 4975 of the Code or any other Applicable Law. 

     

    “Environmental
      Laws” means
      any and all present and future Federal, state, local, and foreign statutes,
      laws, regulations, ordinances, rules, judgments, orders, decrees, directives,
      permits, concessions, grants, franchises, licenses, agreements or governmental
      restrictions relating to pollution, industrial hygiene, environmental
      conditions, the protection of human health or the environment or the release
      of
      any materials into the environment, including those related to hazardous
      substances or wastes, air emissions, soil and ground water contamination,
      discharges to waste or public systems, or the assessment, monitoring or
      remediation of the same, as may be amended from time to time. 

     

     

     

    -
      9 - 

     

    “Environmental
      Liability”
means any claim, demand, order, suit, obligation, cost, liability, contingent
      or
      otherwise (including any liability for damages, costs of environmental
      remediation, monitoring, fines, penalties or indemnity obligations), loss or
      expense (including attorneys’ and consultants’ fees and expenses), whenever the
      same shall have occurred, whether before or after the date of the Loan, of
      any
      Borrower, any other Loan Party (other than Parent) or any of their respective
      Subsidiaries (other than the Excluded Subsidiaries) directly or indirectly
      resulting from or based upon (a) violation of any Environmental Law,
      (b) the generation, use, handling, processing, labeling, recycling,
      transportation, storage, treatment or disposal of any Hazardous Materials,
      (c) exposure to any Hazardous Materials, (d) the release or threatened
      release of any Hazardous Materials into the environment, (e) alleged
      personal injury or property damage arising under any statutory or common-law
      tort theory, including damages assessed for the maintenance of a public or
      private nuisance, response costs or for the carrying on of an abnormally
      dangerous activity, or (f) any contract, agreement or other consensual
      arrangement pursuant to which liability is assumed or imposed with respect
      to
      any of the foregoing. 

     

    “Environmental
      Losses” means,
      to the extent arising out of or as a result of any actual, proposed or
      threatened presence or release of Hazardous Materials or any Environmental
      Liability or any failure of any Borrower or other Loan Party or Subsidiary’s
      failure to comply with any Environmental Law or Environmental Permit, whether
      occurring before or after transfer of any Mortgaged Property by foreclosure
      or
      transfer in aid or in lieu of foreclosure, any and all losses, liabilities,
      damages, demands, claims, actions, judgments, causes of action, assessments,
      penalties, costs and expenses, including, without limitation, remedial, removal,
      response, abatement, cleanup, legal, investigative and monitoring costs and
      other related costs (and including, without limitation, reasonable attorneys’
fees and costs, reasonable consultants’ fees and costs, and reasonable
      accountants’ fees and costs), and all foreseeable and unforeseeable
      consequential damages, diminution in value of any Mortgaged Property, damages
      for the loss or restriction of use of any Mortgaged Property, damages arising
      from any adverse impact on marketing any Mortgaged Property and sums paid in
      settlement of claims. 

     

    “Environmental
      Permit” means
      any permit, approval, identification number, license or other authorization
      required under any Environmental Law. 

     

    “EPA”
has
      the meaning set
      forth in Section 5.09(c). 

     

    “Equipment”
has
      the meaning
      set forth in the Security Agreement. 

     

    “Equity
      Interests” means,
      with respect to any Person, all of the shares of capital stock of (or other
      ownership or profit interests in) such Person, all of the warrants, options
      or
      other rights for the purchase or acquisition from such Person of shares of
      capital stock of (or other ownership or profit interests in) such Person, all
      of
      the securities convertible into or exchangeable for shares of capital stock
      of
      (or other ownership or profit interests in) such Person or warrants, rights
      or
      options for the purchase or acquisition from such Person of such shares (or
      such
      other interests), and all of the other ownership or profit interests in such
      Person (including partnership, member or trust interests therein), whether
      voting or nonvoting, and whether or not such shares, warrants, options, rights
      or other interests are outstanding on any date of determination. 

     

    “ERISA”
means
      the Employee
      Retirement Income Security Act of 1974. 

     

     

     

    -
      10 - 

     

    “ERISA
      Affiliate” means any
      trade or business (whether or not incorporated) under common control with Parent
      or any Borrower within the meaning of Section 414(b) or (c) of the
      Code (and Sections 414(m) and (o) of the Code for purposes of provisions
      relating to Section 412 of the Code). 

     

    “ERISA
      Event” means
      (a) a Reportable Event with respect to a Pension Plan; (b) a
      withdrawal by any Borrower or any ERISA Affiliate from a Pension Plan subject
      to
      Section 4063 of ERISA during a plan year in which it was a substantial
      employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of
      operations that is treated as such a withdrawal under Section 4062(e) of
      ERISA; (c) a complete or partial withdrawal by any Borrower or any ERISA
      Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan
      is
      in reorganization; (d) the filing of a notice of intent to terminate, the
      treatment of a Plan amendment as a termination under Section 4041 or 4041A
      of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
      Plan or Multiemployer Plan; (e) an event or condition which constitutes
      grounds under Section 4042 of ERISA for the termination of, or the
      appointment of a trustee to administer, any Pension Plan or Multiemployer Plan;
      or (f) the imposition of any liability under Title IV of ERISA, other than
      for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon
      any Borrower or any ERISA Affiliate. 

     

    “Event
      of Default” has the
      meaning specified in Section 8.01. 

     

    “Excluded
      Assets” has the
      meaning set forth in the Security Agreement. 

     

    “Excluded
      Subsidiaries” means
      EDN, all Subsidiaries of EDN, and CEPOLK Holdings, Inc. 

     

    “Excluded
      Taxes” means, with
      respect to any Agent, any Lender or any other recipient of any payment to be
      made by or on account of any obligation of any Borrower hereunder,
      (a) taxes imposed on or measured by its overall net income (however
      denominated), and franchise taxes imposed on it (in lieu of net income taxes),
      by the jurisdiction (or any political subdivision thereof) under the laws of
      which such recipient is organized or in which its principal office is located
      or, in the case of any Lender, in which its applicable Lending Office is
      located, (b) any branch profits taxes imposed by the United States or any
      similar tax imposed by any other jurisdiction in which any Borrower is located
      and (c) in the case of a Foreign Lender (other than an assignee pursuant to
      a request by the Borrowers under Section 11.13), any withholding tax
      that is imposed on amounts payable to such Foreign Lender at the time such
      Foreign Lender becomes a party hereto (or designates a new Lending Office)
      or is
      attributable to such Foreign Lender’s failure or inability (other than as a
      result of a Change in Law) to comply with Section 3.01(e), except to
      the extent that such Foreign Lender (or its assignor, if any) was entitled,
      at
      the time of designation of a new Lending Office (or assignment), to receive
      additional amounts from the Borrowers with respect to such withholding tax
      pursuant to Section 3.01(a). 

     

    “Existing
      Loan Agreement”
means that certain Loan Agreement dated as of September 15, 2004 among the
      Borrowers, ORIX Capital Markets, LLC, as agent, and a syndicate of lenders.
      

     

     

     

    -
      11 - 

     

    “Existing
      Permitted Leases and
      Use Rights” means the leases and use rights agreements to portions of the
      Sites as such leases and use rights exist on the Closing Date and are described
      at items 2, 3, 4, 5 and 6 of Part I of Schedule 7.05 and at item 4 of
      Part II of Schedule 7.05 and without regard to modifications or
      amendments thereto entered into following the Closing Date other than as
      permitted pursuant to Section 7.15. 

     

    “Facility
      Assets” means the
      land, land improvements, buildings, fixtures, chemical processing equipment,
      pumps, piping and wiring, transformers, substations, storage tanks, pollution
      control, office furniture, office equipment, computers and software, laboratory
      equipment, vehicles and lift trucks (other than railcar rolling stock or titled
      vehicles), as more particularly described on (i) Part A of
Schedule 1.01(c), with respect to the Cherokee Site and the Facility
      Assets therein, and (ii) Part B of Schedule 1.01(c), with
      respect to the El Dorado Site and the Facility Assets therein. 

     

    “Facility
      Business” means the
      business conducted by the Borrowers at Cherokee Site and the El Dorado Site.
      

     

    “Family
      Entities” means, with
      respect to any individual, any trust, corporation, limited liability company,
      or
      partnership for which (1) all the beneficiaries, shareholders, members, or
      partners, as the case may be, are Family Members of such individual, and
      (2) such individual or a Family Member of such individual is the
      controlling trustee, shareholder, member, or partner of such entity.


     

    “Family
      Member” means, with
      respect to any individual, any other individual having a relationship by blood
      (to the second degree of consanguinity), marriage or adoption to such
      individual. 

     

    “Federal
      Funds Rate” means,
      for any day, the rate per annum equal to the weighted average of the rates
      on
      overnight Federal funds transactions with members of the Federal Reserve System
      arranged by Federal funds brokers on such day, as published by the Federal
      Reserve Bank of New York on the Business Day next succeeding such day;
provided that (a) if such day is not a Business Day, the Federal
      Funds Rate for such day shall be such rate on such transactions on the next
      preceding Business Day as so published on the next succeeding Business Day,
      and
      (b) if no such rate is so published on such next succeeding Business Day,
      the Federal Funds Rate for such day shall be the average rate (rounded upward,
      if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of Utah on
      such day on such transactions as determined by the Payment Agent. 

     

    “Fee
      Letters” means Bank of
      America Fee Letter and the Payment Agent Fee Letter collectively and “Fee
      Letter” means either of them. 

     

    “Financial/Negative
      Covenants” means the covenants set forth in Article 7 of the Revolving
      Credit Agreement. 

     

    “Foreign
      Lender” means any
      Lender that is organized under the laws of a jurisdiction other than that in
      which any Borrower is resident for tax purposes. For purposes of this
      definition, the United States, each State thereof and the District of Columbia
      shall be deemed to constitute a single jurisdiction. 

     

     

     

    -
      12 - 

     

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

     

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

     

    “GAAP”
means
      generally
      accepted accounting principles in the United States set forth 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 such other principles as may be approved
      by a significant segment of the accounting profession in the United States,
      that
      are applicable to the circumstances as of the date of determination,
      consistently applied. 

     

    “Governmental
      Authority”
means the government of the United States or any other nation, or of any
      political subdivision thereof, whether state or local, and any agency,
      authority, instrumentality, regulatory body, court, central bank or other entity
      exercising executive, legislative, judicial, taxing, regulatory or
      administrative powers or functions of or pertaining to government (including
      any
      supra-national bodies such as the European Union or the European Central Bank).
      

     

    “Guarantee”
means,
      as to any
      Person, (a) any obligation, contingent or otherwise, of such Person
      guaranteeing or having the economic effect of guaranteeing any Indebtedness
      of
      another Person (the “primary obligor”) in any manner, whether directly or
      indirectly, and including any obligation of such Person, direct or indirect,
      (i) to purchase or pay (or advance or supply funds for the purchase or
      payment of) such Indebtedness, (ii) to purchase or lease property,
      securities or services for the purpose of assuring the obligee in respect of
      such Indebtedness of the payment or performance of such Indebtedness,
      (iii) to maintain working capital, equity capital or any other financial
      statement condition or liquidity or level of income or cash flow of the primary
      obligor so as to enable the primary obligor to pay such Indebtedness, or
      (iv) entered into for the purpose of assuring in any other manner the
      obligee in respect of such Indebtedness of the payment or performance thereof
      or
      to protect such obligee against loss in respect thereof (in whole or in part),
      or (b) any Lien on any assets of such Person which is granted or pledged by
      such Person to secure any Indebtedness or other obligation of any other Person,
      whether or not such Indebtedness or other obligation is assumed by such Person
      (or any right, contingent or otherwise, of any holder of such Indebtedness
      to
      obtain any such Lien). The amount of any Guarantee shall be deemed to be an
      amount equal to the stated or determinable amount of the related primary
      obligation, or portion thereof, in respect of which such Guarantee is made
      or,
      if not stated or determinable, the maximum reasonably anticipated liability
      in
      respect thereof as determined by the guaranteeing Person in good faith. The
      term
“Guarantee” as a verb has a corresponding meaning. 

     

     

     

    -
      13 - 

     

    “Guarantors”
means,
      collectively, Parent and each Subsidiary of ThermaClime that shall be required
      to execute and deliver a guaranty or guaranty supplement pursuant to
Section 6.12; provided that in no event shall Excluded
      Subsidiaries be Guarantors. 

     

    “Guaranty”
means,
      collectively, the Guaranty made by Parent under Article X in favor of the
      Secured Parties, together with each other guaranty and guaranty supplement
      delivered pursuant to Section 6.12. 

     

    “Hazardous
      Materials” means
      all explosive or radioactive substances or wastes and all hazardous or toxic
      substances, wastes or other pollutants, including petroleum or petroleum
      distillates, asbestos or asbestos-containing materials, polychlorinated
      biphenyls, radon gas, infectious or medical wastes and all other substances
      or
      wastes of any nature regulated pursuant to any Environmental Law. 

     

    “Indebtedness”
means,
      as to
      any Person at a particular time, without duplication, all of the following,
      whether or not included as indebtedness or liabilities in accordance with GAAP:
      

     

    (a)
      all obligations of such Person
      for borrowed money and all obligations of such Person evidenced by bonds,
      debentures, notes, loan agreements or other similar instruments; 

     

    (b)
      the maximum amount of all direct
      or contingent obligations of such Person arising under letters of credit
      (including standby and commercial), bankers’ acceptances, bank guaranties and
      similar instruments; 

     

    (c)
      net obligations of such Person
      under any Swap Contract; 

     

    (d)
      all obligations of such Person
      to pay the deferred purchase price of property or services (other than trade
      accounts payable in the ordinary course of Borrowers’ business and repayable in
      accordance with customary trade practices); 

     

    (e)
      indebtedness (excluding prepaid
      interest thereon) secured by a Lien on property owned or being purchased by
      such
      Person (including indebtedness arising under conditional sales or other title
      retention agreements), whether or not such indebtedness shall have been assumed
      by such Person or is limited in recourse; 

     

    (f)
      all Capitalized Lease
      Obligations of such Person, all Attributable Indebtedness in respect of
      Synthetic Lease Obligations of such Person and all Synthetic Debt of such
      Person; 

     

    (g)
      all obligations of such Person
      to purchase, redeem, retire, defease or otherwise make any payment in respect
      of
      any Equity Interest in such Person or any other Person or any warrant, right
      or
      option to acquire such Equity Interest, valued, in the case of a redeemable
      preferred interest, at the greater of its voluntary or involuntary liquidation
      preference plus accrued and unpaid dividends; and 

     

    (h)
      all Guarantees of such Person in
      respect of any of the foregoing. 

     

     

     

    -
      14 - 

     

    For
      all purposes hereof, the
      Indebtedness of any Person shall include the Indebtedness of any partnership
      or
      joint venture (other than a joint venture that is itself a corporation or
      limited liability company) in which such Person is a general partner or a joint
      venturer, unless such Indebtedness is expressly made non-recourse to such
      Person. The amount of any net obligation under any Swap Contract on any date
      shall be deemed to be the Swap Termination Value thereof as of such date.


     

    “Indefeasible
      Payment and
      Performance of All Obligations” means the indefeasible payment in full, in
      cash, and performance in full of all of the Obligations. 

     

    “Indemnified
      Taxes” means
      Taxes other than Excluded Taxes. 

     

    “Indemnitees”
has
      the meaning
      specified in Section 11.04(b). 

     

    “Information”
has
      the meaning
      specified in Section 11.07. 

     

    “Information
      Memorandum”
means the information memorandum dated July 23, 2007 used by the Arranger
      in connection with the syndication of the Term Commitments. 

     

    “Intercompany
      Lease” means an
      intercompany lease of the Collateral solely among two or more Borrowers as
      set
      forth in Schedule 7.05 and which is subject to an Intercompany Lease
      Subordination Agreement. 

     

    “Intercompany
      Lease Subordination
      Agreement” means a subordination agreement in the form attached hereto as
Exhibit H-1 executed and delivered by the parties to the Intercompany
      Leases. 

     

    “Intercompany
      Loan Subordination
      Agreement” means a subordination agreement in the form attached hereto as
Exhibit H-2, executed and delivered by Parent and the Borrowers, pursuant
      to which such parties agree to subordinate certain of their rights to payments
      of intercompany indebtedness to the rights of the Agents and the Lenders in
      the
      Obligations. 

     

    “Interest
      Payment Date” means
      the last day of each Interest Period applicable to such Term Loan and the
      Maturity Date. 

     

    “Interest
      Period” means
      (a) initially, the period commencing on and including the Closing Date and
      ending on but excluding the date 90 days thereafter, and (b) thereafter,
      each period commencing on and including the last day of the immediately
      preceding Interest Period and ending on but excluding the date 90 days
      thereafter; provided that (i) if any Interest Period would otherwise
      end on a day that is not a Business Day, such Interest Period shall end on
      the
      next succeeding Business Day unless such Business Day falls in another calendar
      month, in which case such Interest Period shall end on the next preceding
      Business Day, (ii) any Interest Period that begins on the last Business Day
      of a calendar month (or on a day for which there is no numerically corresponding
      day in the calendar month at the end of such Interest Period) shall end on
      the
      last Business Day of the calendar month at the end of such Interest Period,
      and
      (iii) if any Interest Period for any Term Loan would otherwise (but for
      this clause (iii)) extend beyond the Maturity Date, then such Interest Period
      shall end on the Maturity Date. 

     

     

     

    -
      15 - 

     

    “Inter-Lender
      Agreement” has
      the meaning specified in Section 4.01(a)(xix). 

     

    “Inventory”
has
      the meaning
      specified in the Security Agreement. 

     

    “Investment”
means,
      as to any
      Person, any direct or indirect acquisition or investment by such Person, whether
      by means of (a) the purchase or other acquisition of Equity Interests of
      another Person, (b) a loan, advance or capital contribution to, Guarantee
      or assumption of debt of, or purchase or other acquisition of any other debt
      or
      interest in, another Person (excluding (i) commission, travel and similar
      advances to officers and employees of such Person made in the ordinary course
      of
      business and (ii) bona fide accounts receivable arising from the sale of
      goods or the rendition of services in the ordinary course of business consistent
      with past practice), or (c) the purchase or other acquisition (in one
      transaction or a series of transactions) of assets of another Person that
      constitute a business unit or all or a substantial part of the business of,
      such
      Person. For purposes of covenant compliance, the amount of any Investment shall
      be the amount actually invested, without adjustment for subsequent increases
      or
      decreases in the value of such Investment. 

     

    “IP
      Rights” has the meaning
      specified in Section 5.18. 

     

    “IRS”
means
      the United States
      Internal Revenue Service. 

     

    “KT
      Agreement” means that
      certain Agreement dated as of October 27, 1994, by and between
      Kaltenbach-Thuring S.A. and El Dorado Chemical Company. 

     

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

     

    “Lender”
means
      the Persons
      set forth on Schedule 1.01(d) hereto, together with any successors and
      assigns. 

     

    “Lending
      Office” means, as to
      any Lender, the office or offices of such Lender set forth on Schedule
      1.01(d) or any Assignment and Assumption Agreement as such Lender’s office
      or offices for payments and notices hereunder, or such other office or offices
      as a Lender may from time to time notify ThermaClime and the Payment Agent.
      

     

    “LIBO
      Rate” means, with
      respect to any Interest Period at any time, the applicable London interbank
      offered rate for deposits in U.S. dollars appearing on Bloomberg LIBO Page
      3,
      British Bankers Association as of 11:00 a.m. (London time) two (2) Business
      Days prior to the first day of such Interest Period, and having a maturity
      approximately equal to such Interest Period; or if no London interbank offered
      rate of such maturity then appears on Bloomberg LIBO Page 3, then the rate
      equal
      to the London interbank offered rate for deposits in U.S. dollars maturing
      immediately before or immediately after such maturity, whichever is higher,
      as
      determined by the Payment Agent from Bloomberg LIBO Page 3; or if Bloomberg
      LIBO
      Page 3 is not available, the applicable LIBO Rate for the relevant Interest
      Period shall be the rate determined by the Payment Agent to be the arithmetic
      average of the rates at which Bank 

     

     

     

    -
      16 - 

     

    of
      Utah offers to place deposits in
      U.S. dollars with first-class banks in the London interbank market at
      approximately 11:00 a.m. (London time) two (2) Business Days prior to the
      first day of such Interest Period, in the approximate amount of the Outstanding
      Amount on such date and having a maturity approximately equal to such Interest
      Period. 

     

    “Lien”
means
      any mortgage,
      pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien
      (statutory or other), charge, priority or other security interest or
      preferential arrangement in the nature of a security interest of any kind or
      nature whatsoever (including any conditional sale or other title retention
      agreement, any easement, right of way or other encumbrance on title to real
      property, and any financing lease having substantially the same economic effect
      as any of the foregoing). 

     

    “Loan
      Documents” means,
      collectively, (a) this Agreement, (b) the Term Notes, (c) the
      Guaranty (including any Subsidiary guaranties or supplements thereto delivered
      pursuant to Section 6.12), (d) the Collateral Documents,
      (e) the Fee Letters, (f) the Intercompany Loan Subordination
      Agreement, (g) the Management Agreement Subordination, (h) the
      Intercompany Lease Subordination Agreements, and (i) the Inter-Lender
      Agreement. 

     

    “Loan
      Parties” means,
      collectively, each Borrower and each Guarantor. 

     

    “Management
      Agreement” means
      the Management Agreement dated November 21, 1997 between Parent and
      ThermaClime, as amended by the First Amendment to Management Agreement dated
      as
      of November 2, 2007. 

     

    “Management
      Agreement
      Subordination” means subordination agreement in the form of Exhibit I
      executed by the parties to the Management Agreement. 

     

    “Material
      Adverse Effect”
means (a) a material adverse change in, or a material adverse effect upon,
      the operations, business, properties, liabilities, condition (financial or
      otherwise) or prospects of (i) the Borrowers and their Subsidiaries taken
      as a whole or (ii) solely in the case of Section 5.06(b), Parent and
      the Borrowers taken as a whole; (b) a material impairment of (i) the
      rights and remedies of any Agent or any Lender under any Loan Document or the
      perfection or priority of the Collateral Agent’s Liens with respect to the
      Collateral, or (ii) the ability of the Borrowers, taken as a whole, or
      Parent, individually, or ThermaClime, individually or on behalf of the other
      Borrowers, to perform their obligations under any Loan Document; (c) a
      material adverse effect upon the legality, validity, binding effect or
      enforceability of any Loan Document; or (d) a material adverse change in or
      material adverse effect upon the value, useful life or utility of the
      Collateral. 

     

    “Material
      Contracts” means,
      with respect to any Borrower, each Assigned Agreement and each other agreement,
      lease, license or contract relating to the operations, business assets,
      properties, affairs or prospects of the Facility Business or the Collateral
      which provides for or involves (a) obligations (contingent or otherwise) or
      payments (i) relating to the purchase, supply, transmission or
      transportation of ammonia for the El Dorado Site or natural gas for the Cherokee
      Site or (ii) a purchase, sale, lease, license, maintenance, transportation
      or transmission agreement providing for payments during the initial term thereof
      or during the period of any renewals provided for therein in excess of
      $20,000,000, (b) the license or grant of any material patent, copyright,
      trade secret or 

     

     

     

    -
      17 - 

     

    other
      proprietary right, other than
      standard commercial software licenses, (c) the ownership, lease or use of
      any of the Facility Assets or any assets (other than the Excluded Assets which
      are not of a type subject to that certain Contract for Rail Car Switching
      Services entered into on October 1, 1994 between EDCC and ISC, Inc. or any
      agreement entered into in replacement thereof) used in the business conducted
      on
      either of the Sites and which are owned by any Person other than the Borrowers
      and located on either of the Sites, other than assets having an original cost
      or
      replacement value of less than $500,000, or (d) the grant or acquisition of
      any Permit which if existed on the Closing Date would be listed in Schedule
      5.23. 

     

    “Maturity
      Date” means
      November 3, 2012; provided, however, that, in each case, if
      such date is not a Business Day, the Maturity Date shall be the preceding
      Business Day. 

     

    “Measurement
      Period” means,
      at any date of determination, the most recently completed four fiscal quarters
      of ThermaClime. 

     

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

     

    “Mortgage”
has
      the meaning
      specified in Section 4.01(a)(iv). 

     

    “Mortgage
      Policy” has the meaning
      specified in Section 4.01(a)(iv)(B). 

     

    “Multiemployer
      Plan” means
      any employee benefit plan of the type described in Section 4001(a)(3) of
      ERISA, to which any Borrower or any ERISA Affiliate makes or is obligated to
      make contributions, or during the preceding five plan years, has made or been
      obligated to make contributions. 

     

    “NFC”
has
      the meaning set
      forth in the introductory paragraph hereto. 

     

    “Obligations”
means
      all
      advances to, and debts, liabilities, obligations, covenants and duties of,
      the
      Loan Parties arising under any Loan Document or with respect to the Term Loans,
      whether direct or indirect (including those acquired by assumption), absolute
      or
      contingent, due or to become due, now existing or hereafter arising and
      including interest and fees that accrue after the commencement by or against
      any
      Loan Party of any proceeding under any Debtor Relief Laws naming such Loan
      Party
      as the debtor in such proceeding, regardless of whether such interest and fees
      are allowed claims in such proceeding. 

     

    “Organization
      Documents”
means, (a) with respect to any corporation, the certificate or articles of
      incorporation and the bylaws (or equivalent or comparable constitutive documents
      with respect to any non-U.S. jurisdiction); (b) with respect to any limited
      liability company, the certificate or articles of formation or organization
      and
      operating agreement; and (c) with respect to any partnership, joint
      venture, trust or other form of business entity, the partnership, joint venture
      or other applicable agreement of formation or organization and any agreement,
      instrument, filing or notice with respect thereto filed in connection with
      its
      formation or organization with the applicable Governmental Authority in the
      jurisdiction of its formation or organization and, if applicable, any
      certificate or articles of formation or organization of such entity.


     

     


     

    18


     

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


     

    “Outstanding
      Amount” means,
      on any date, the aggregate outstanding principal amount of all the Term Loans
      after giving effect to any borrowings and prepayments or repayments of Term
      Loans occurring on such date. 

     

    “Parent”
has
      the meaning
      specified in the introductory paragraph hereto. 

     

    “Participant”
has
      the meaning
      specified in Section 11.06(d). 

     

    “Payment
      Agent” means Bank of
      Utah in its capacity as payment agent under any of the Loan Documents, or any
      successor payment agent. 

     

    “Payment
      Agent Fee Letter”
means the letter agreement dated as October 31, 2007 between ThermaClime
      and Bank of Utah. 

     

    “Payment
      Agent’s Office”
means the Payment Agent’s address and, as appropriate, account as set forth on
Schedule 11.02, or such other address or account as the PaymentAgent may
      from time to time notify to the Borrowers, the other Agents and the Lenders.
      

     

    “Payoff
      Letter” means a
      letter agreement, in form and substance satisfactory to the Payment Agent,
      executed and delivered by Orix Capital Markets, LLC, as agent (“Orix”)
      and the Borrowers pursuant to which Orix provides payoff information with
      respect to the obligations of Borrowers under the Existing Loan Agreement and
      agrees to release its Liens on the Collateral upon receipt of the required
      payoff amount. 

     

    “PBGC”
means
      the Pension
      Benefit Guaranty Corporation. 

     

    “Pension
      Plan” means any
“employee pension benefit plan” (as such term is defined in Section 3(2) of
      ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA
      and is sponsored or maintained by any Borrower or any ERISA Affiliate or to
      which the Borrower or any ERISA Affiliate contributes or has an obligation
      to
      contribute, or in the case of a multiple employer or other plan described in
      Section 4064(a) of ERISA, has made contributions at any time during the
      immediately preceding five plan years. 

     

    “Permits”
means,
      collectively, all building, constructions, environmental and other permits,
      licenses, franchises, approvals, consents, authorizations and other approvals.
      

     

    “Permitted
      Encumbrances”
means (i) Liens granted by a Borrower in favor of the Collateral Agent
      under any of the Collateral Documents; (ii) Liens described in the Mortgage
      Title Policies delivered to and accepted by the Payment Agent pursuant to
      Section 4.01(a)(iv)(B); (iii) Liens for taxes not yet delinquent or
      which are subject to a Permitted Protest; (iv) carriers’, warehousemen’s,
      mechanics’, landlords’, materialmen’s, repairmen’s or other like Liens arising
      in the ordinary course of business which are not yet delinquent or which are
      subject to a Permitted Protest; (v) easements, rights-of-way, restrictions
      and other similar title exceptions and encumbrances affecting real property
      which, in the aggregate, do not (A) materially interfere with the use or


     

     

     

    -
      19 - 

     

    operation
      thereof by Borrowers or
      their Subsidiaries (other than the Excluded Subsidiaries), (B) materially
      detract from the value of any Collateral subject thereto as currently operated,
      or (C) involve any material danger of the loss of, or loss of priority of,
      the Collateral Agent’s Liens on the Collateral, (vi) Liens permitted
      pursuant to the final paragraph of Section 7.01, (vii) the
      Existing Permitted Leases and Use Rights, and (viii) Intercompany Leases.


     

    “Permitted
      Holders” means
      Jack E. Golsen, Barry E. Golsen, Tony M. Shelby, David R. Goss, David M. Shear,
      Robert C. Brown, their respective Family Members, and their respective Family
      Entities. 

     

    “Permitted
      Protest” means the
      right of the applicable Borrower or Subsidiary of Borrower to protest any Lien
      (other than Liens securing the Obligations), Laws, taxes (other than payroll
      taxes or taxes that are the subject of a United States federal tax lien), or
      rental payment, provided that (a) (i) with respect to
      obligations that could not result in the imposition of a Lien on any Collateral,
      a reserve with respect to such obligation is established in the books and
      records of such Borrower or such Subsidiary as is required under GAAP, or
      (ii) with respect to obligations that could result in the imposition of a
      Lien on any Collateral, such obligation has been adequately bonded in the
      reasonable opinion of the Payment Agent so long as such bonding does not involve
      any material risk of the sale, forfeiture or loss of any Collateral,
      (b) any such protest is instituted promptly and prosecuted diligently by
      the applicable Borrower or Subsidiary in good faith, and (c) the Payment
      Agent is satisfied, in the exercise of its reasonable discretion, that while
      such protest is pending, the value, use and useful life of the Collateral will
      not be adversely affected and there will be no impairment of the enforceability,
      validity or priority of any of the Collateral Agent’s Liens. 

     

    “Person”
means
      any natural
      person, corporation, limited liability company, trust, joint venture,
      association, company, partnership, Governmental Authority or other entity.
      

     

    “Plan”
means
      any “employee
      benefit plan” (as such term is defined in Section 3(3) of ERISA)
      established by any Borrower or, with respect to any such plan that is subject
      to
      Section 412 of the Code or Title IV of ERISA, any ERISA Affiliate.


     

    “Platform”
has
      the meaning
      specified in Section 6.02. 

     

    “Prepayment
      Fee” means, as of
      any date of a prepayment pursuant to Section 2.02, the product of
      (i) the principal amount of the Term Loans being prepaid (which in the case
      of a replacement pursuant to Section 3.06(b) shall be the principal
      amount of the Term Loans of each replaced Lender paid to each such Lender
      pursuant to Section 11.13(b)) and (ii) (x) one percent (1.00%),
      if the date of prepayment is on or prior to the second anniversary of the
      Closing Date or (y) one half of one percent (.50%), if the date of
      repayment is following the second anniversary of the Closing Date. 

     

    “Register”
has
      the meaning
      specified in Section 11.06(c). 

     

     

     

    -
      20 - 

     

    “Related
      Parties” means, with
      respect to any Person, such Person’s Affiliates and the partners, directors,
      officers, employees, agents and advisors of such Person and of such Person’s
      Affiliates. 

     

    “Reportable
      Event” means any
      of the events set forth in Section 4043(c) of ERISA, other than events for
      which the 30 day notice period has been waived. 

     

    “Required
      Lenders” means, as
      of any date of determination, Lenders holding more than 50% of the Outstanding
      Amount on such date. 

     

    “Responsible
      Officer” means
      the chief executive officer, president, chief financial officer, treasurer,
      assistant treasurer or controller of a Loan Party. Any document delivered
      hereunder that is signed by a Responsible Officer of a Loan Party shall be
      conclusively presumed to have been authorized by all necessary corporate,
      partnership and/or other action on the part of such Loan Party and such
      Responsible Officer shall be conclusively presumed to have acted on behalf
      of
      such Loan Party. 

     

    “Restricted
      Payment” means
      any dividend or other distribution (whether in cash, securities or other
      property) with respect to any capital stock or other Equity Interest of any
      Person, or any payment (whether in cash, securities or other property),
      including any sinking fund or similar deposit, on account of the purchase,
      redemption, retirement, defeasance, acquisition, cancellation or termination
      of
      any such capital stock or other Equity Interest, or on account of any return
      of
      capital to any Person’s stockholders, partners or members (or the equivalent of
      any thereof), or any option, warrant or other right to acquire any such dividend
      or other distribution or payment. 

     

    “Revolving
      Agent” means Wells
      Fargo Foothill, Inc. (formerly known as Foothill Capital Corporation), as
      arranger and administrative agent, and each of its successors and assigns in
      such capacity under the Revolving Credit Agreement and each such Person who
      acts
      in such capacity under any replacement or refinancing of the Revolving Credit
      Agreement permitted pursuant to the terms of this Agreement or if no such Person
      is acting in such capacity under any such replacement or refinancing of the
      Revolving Credit Agreement in the case where there is a single holder of the
      Indebtedness under the Revolving Credit Agreement, then such
      holder.

     

    “Revolving
      Credit Agreement”
means the Loan and Security Agreement dated as of April 13, 2001 among
      Parent, the Borrowers, the lending institutions party thereto and Wells Fargo
      Foothill, Inc. (formerly known as Foothill Capital Corporation), as arranger
      and
      administrative agent, as amended by the First Amendment to Loan and Security
      Agreement dated as of August 3, 2001, the Second Amendment to Loan and
      Security Agreement dated as of May 24, 2002, the Third Amendment to Loan
      and Security Agreement dated as of November 18, 2002, the Fourth Amendment
      to Loan and Security Agreement dated as of March 3, 2003, the Fifth
      Amendment to Loan and Security Agreement dated as of December 31, 2003, the
      Sixth Amendment to Loan and Security Agreement dated as of June 29, 2004,
      the Seventh Amendment to Loan and Security Agreement dated as of
      September 15, 2004, the Eighth Amendment to Loan and Security Agreement
      dated as of February 28, 2005, the Ninth Amendment to Loan and Security
      Agreement dated as of February 22, 2006, the Tenth Amendment to Loan and
      Security Agreement dated as of March 21, 2007, as amended and restated by
      that certain Amended and Restated Loan and Security Agreement dated as of
      November     , 2007, and, 

     

     

     

    -
      21 - 

     

    to
      the extent permitted under
Section 7.02(a), (i) as further amended, renewed, extended or
      otherwise modified and (ii) any new revolving credit agreement in
      replacement thereof. 

     

    “Revolving
      Credit Documents”
means the Revolving Credit Agreement, each of the mortgages and other collateral
      agreements, documents and instruments relating thereto and other agreements,
      documents and instruments executed in connection therewith or contemplated
      thereby. 

     

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

     

    “SEC”
means
      the Securities
      and Exchange Commission, or any Governmental Authority succeeding to any of
      its
      principal functions. 

     

    “Secured
      Parties” means,
      collectively, the Agents, the Lenders, each co-agent or sub-agent appointed
      by
      any Agent from time to time pursuant to Section 9.05, and the other
      Persons the Obligations owing to which are or are purported to be secured by
      the
      Collateral under the terms of the Collateral Documents. 

     

    “Security
      Agreement” has the
      meaning specified in Section 4.01(a)(iii). 

     

    “Services
      Agreement” means
      the Services Agreement dated August 23, 2002 between Parent and
      ThermaClime. 

     

    “Site”
means
      either of and
“Sites” mean collectively the Cherokee Site and the El Dorado Site.


     

    “Solvent”
and
      “Solvency” mean, with respect to any Person on any date of determination,
      that on such date (a) the fair value of the property of such Person is
      greater than the total amount of liabilities, including contingent liabilities,
      of such Person, (b) the present fair salable value of the assets of such
      Person is not less than the amount that will be required to pay the probable
      liability of such Person on its debts as they become absolute and matured,
      (c) such Person does not intend to, and does not believe that it will,
      incur debts or liabilities beyond such Person’s ability to pay such debts and
      liabilities as they mature, (d) such Person is not engaged in business or a
      transaction, and is not about to engage in business or a transaction, for which
      such Person’s property would constitute an unreasonably small capital, and
      (e) such Person is able to pay its debts and liabilities, contingent
      liabilities and other commitments as they mature in the ordinary course of
      business. The amount of contingent liabilities at any time shall be computed
      as
      the amount that, in the light of all the facts and circumstances existing at
      such time, represents the amount that can reasonably be expected to become
      an
      actual or matured liability. 

     

    “Subsidiary”
of
      a Person
      means a corporation, partnership, joint venture, limited liability company
      or
      other business entity of which a majority of the shares of securities or other
      interests having ordinary voting power for the election of directors or other
      governing body (other than securities or interests having such power only by
      reason of the happening of a contingency) are at the time beneficially owned,
      or
      the management of which is otherwise controlled, directly, or indirectly through
      one or more intermediaries, or both, by such Person. Unless otherwise specified,
      all references herein to a “Subsidiary” or to “Subsidiaries” shall
      refer to a Subsidiary or Subsidiaries of a Borrower. 

     

     

     

    -
      22 - 

     

    “Support
      Rights and
      Interests” means the contractual arrangements, licenses, rights and
      interests used in or necessary to the conduct of the Facility Business or the
      operation and maintenance of the Facility Assets (including, without limitation,
      rights to roads, pipelines, wires, transfer lines, tanks, electric generating
      facilities, circulation and treatment systems, conduits, docks, control rooms,
      computer equipment, software, and manuals instructions, process drawings and
      schematics for the use, operation and maintenance of the Facility), and
      includes, as of the Closing Date, the Borrowers’ rights under the Assigned
      Agreements. 

     

    “Swap
      Contract” means
      (a) any and all rate swap transactions, basis swaps, credit derivative
      transactions, forward rate transactions, commodity swaps, commodity options,
      forward commodity contracts, equity or equity index swaps or options, bond
      or
      bond price or bond index swaps or options or forward bond or forward bond price
      or forward bond index transactions, interest rate options, forward foreign
      exchange transactions, cap transactions, floor transactions, collar
      transactions, currency swap transactions, cross-currency rate swap transactions,
      currency options, spot contracts, or any other similar transactions or any
      combination of any of the foregoing (including any options to enter into any
      of
      the foregoing), whether or not any such transaction is governed by or subject
      to
      any master agreement, and (b) any and all transactions of any kind, and the
      related confirmations, which are subject to the terms and conditions of, or
      governed by, any form of master agreement published by the International Swaps
      and Derivatives Association, Inc., any International Foreign Exchange Master
      Agreement, or any other master agreement (any such master agreement, together
      with any related schedules, a “Master Agreement”), including any such
      obligations or liabilities under any Master Agreement. 

     

    “Swap
      Termination Value”
means, in respect of any one or more Swap Contracts, after taking into
      account
      the effect of any legally enforceable netting agreement relating to such Swap
      Contracts, (a) for any date on or after the date such Swap Contracts have
      been closed out and termination value(s) determined in accordance therewith,
      such termination value(s), and (b) for any date prior to the date
      referenced in clause (a), the amount(s) determined as the mark-to-market
      value(s) for such Swap Contracts, as determined based upon one or more
      mid-market or other readily available quotations provided by any recognized
      dealer in such Swap Contracts (which may include a Lender or any Affiliate
      of a
      Lender). 

     

    “Synthetic
      Debt” means, with
      respect to any Person as of any date of determination thereof, all obligations
      of such Person in respect of transactions entered into by such Person that
      are
      intended to function primarily as a borrowing of funds (including any minority
      interest transactions that function primarily as a borrowing) but are not
      otherwise included in the definition of “Indebtedness” or as a liability
      on the consolidated balance sheet of such Person and its Subsidiaries in
      accordance with GAAP. 

     

    “Synthetic
      Lease Obligation”
means the monetary obligation of a Person under (a) a so-called synthetic,
      off-balance sheet or tax retention lease, or (b) an agreement for the use
      or possession of property (including sale and leaseback transactions), in each
      case, creating obligations that do not appear on the balance sheet of such
      Person but which, upon the application of any Debtor Relief Laws to such Person,
      would be characterized as the indebtedness of such Person (without regard to
      accounting treatment). 

     

     

     

    -
      23 - 

     

    “Tax
      Sharing Agreement” means
      the Tax Sharing Agreement dated as of November 21, 1997 between ThermaClime
      and Parent. 

     

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

     

    “Term
      Commitment” means, as
      to each Term Lender, its obligation to make Term Loans to the Borrowers pursuant
      to Section 2.01 in an aggregate principal amount at any one time
      outstanding not to exceed the amount set forth opposite such Term Lender’s name
      on Schedule 2.01 under the caption “Term Commitment” or opposite such
      caption in the Assignment and Assumption pursuant to which such Term Lender
      becomes a party hereto, as applicable, as such amount may be adjusted from
      time
      to time in accordance with this Agreement, and “Term Commitments” means the
      aggregate “Term Commitments” of all Lenders. 

     

    “Term
      Facility” means, at any
      time, (a) on or prior to the Closing Date, the aggregate amount of the Term
      Commitments at such time, and (b) thereafter, the aggregate principal
      amount of the Term Loans of all Term Lenders outstanding at such time.


     

    “Term
      Lender” means
      (a) at any time on or prior to the Closing Date, any Lender that has a Term
      Commitment at such time and (b) at any time after the Closing Date, any
      Lender that holds Term Loans at such time. 

     

    “Term
      Loan” means an advance
      made by any Term Lender under the Term Facility. 

     

    “Term
      Note” means a
      promissory note made by the Borrowers in favor of a Term Lender evidencing
      Term
      Loans made by such Term Lender, substantially in the form of
Exhibit A. 

     

    “ThermaClime”
has
      the meaning
      specified in the introductory paragraph hereto. 

     

    “Threshold
      Amount” means
      $5,000,000. 

     

    “Trademark
      Security
      Agreement” means a trademark security agreement in the form of Exhibit
      M executed by the Borrowers in favor of the Collateral Agent. 

     

    “Trison”
has
      the meaning
      specified in the introductory paragraph hereto. 

     

    “UCC”
means
      the Uniform
      Commercial Code as in effect in the State of New York; provided that, if
      perfection or the effect of perfection or non-perfection or the priority of
      any
      security interest in any Collateral is governed by the Uniform Commercial Code
      as in effect in a jurisdiction other than the State of New York, “UCC”
means the Uniform Commercial Code as in effect from time to time in
      such other
      jurisdiction for purposes of the provisions hereof relating to such perfection,
      effect of perfection or non-perfection or priority. 

     

     

     

    -
      24 - 

     

    “Unfunded
      Pension Liability”
means the excess of a Pension Plan’s benefit liabilities under
      Section 4001(a)(16) of ERISA, over the current value of that Pension Plan’s
      assets, determined in accordance with the assumptions used for funding the
      Pension Plan pursuant to Section 412 of the Code for the applicable plan
      year. 

     

    “United
      States” and
“U.S.” mean the United States of America. 

     

    1.02
Other
      Interpretive
      Provisions. With reference to this Agreement and each other Loan Document,
      unless otherwise specified herein or in such other Loan Document: 

     

    (a)
      The definitions of terms herein
      shall apply equally to the singular and plural forms of the terms defined.
      Whenever the context may require, any pronoun shall include the corresponding
      masculine, feminine and neuter forms. The words “include,”
“includes” and “including” shall be deemed to be followed by the
      phrase “without limitation.” The word “will” shall be construed to have
      the same meaning and effect as the word “shall.” Unless the context
      requires otherwise, (i) any definition of or reference to any agreement,
      instrument or other document (including any Organization Document) shall be
      construed as referring to such agreement, instrument or other document as from
      time to time amended, supplemented or otherwise modified (subject to any
      restrictions on such amendments, supplements or modifications set forth herein
      or in any other Loan Document), (ii) any reference herein to any Person
      shall be construed to include such Person’s successors and assigns,
      (iii) the words “herein,” “hereof” and “hereunder,”
and words of similar import when used in any Loan Document,
      shall be construed
      to refer to such Loan Document in its entirety and not to any particular
      provision thereof, (iv) all references in a Loan Document to Articles,
      Sections, Preliminary Statements, Exhibits and Schedules shall be construed
      to
      refer to Articles and Sections of, and Preliminary Statements, Exhibits and
      Schedules to, the Loan Document in which such references appear, (v) any
      reference to any law shall include all statutory and regulatory provisions
      consolidating, amending, replacing or interpreting such law and any reference
      to
      any law or regulation shall, unless otherwise specified, refer to such law
      or
      regulation as amended, modified or supplemented from time to time, and
      (vi) the words “asset” and “property” shall be construed to
      have the same meaning and effect and to refer to any and all tangible and
      intangible assets and properties, including cash, securities, accounts and
      contract rights. 

     

    (b)
      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.” 

     

    (c)
      Section headings herein and in
      the other Loan Documents are included for convenience of reference only and
      shall not affect the interpretation of this Agreement or any other Loan
      Document. 

     

    1.03
Consolidation
      of Variable
      Interest Entities. All references herein to consolidated financial
      statements of Parent and its Subsidiaries or ThermaClime and its Subsidiaries
      or
      to the determination of any amount for Parent and its Subsidiaries or
      ThermaClime and its Subsidiaries on a consolidated basis or any similar
      reference shall, in each case, be deemed to include each variable interest
      entity that Parent or ThermaClime, as applicable, is required to consolidate
      pursuant to FASB Interpretation No. 46 – Consolidation of Variable Interest
      Entities: an interpretation of ARB No. 51 (January 2003) as if such
      variable interest entity were a Subsidiary as defined herein. 

     

     

     

    -
      25 - 

     

    1.04
Accounting
      Terms.


     

    (a)
Generally.
      All accounting
      terms not specifically or completely defined herein shall be construed in
      conformity with, and all financial data (including financial ratios and other
      financial calculations) required to be submitted pursuant to this Agreement
      shall be prepared in conformity with, GAAP applied on a consistent basis, as
      in
      effect from time to time, applied in a manner consistent with that used in
      preparing the Audited Financial Statements, except as otherwise specifically
      prescribed herein. 

     

    (b)
Changes
      in GAAP. If at
      any time any change in GAAP would affect the computation of any financial ratio
      or requirement set forth in any Loan Document, and either the Borrowers or
      the
      Required Lenders shall so request, the Agents, the Lenders and the Borrowers
      shall negotiate in good faith to amend such ratio or requirement to preserve
      the
      original intent thereof in light of such change in GAAP (subject to the approval
      of the Required Lenders); provided that, until so amended, (i) such ratio
      or requirement shall continue to be computed in accordance with GAAP prior
      to
      such change therein and (ii) the Borrowers shall provide to the Payment
      Agent and the Lenders financial statements and other documents required under
      this Agreement or as reasonably requested hereunder setting forth a
      reconciliation between calculations of such ratio or requirement made before
      and
      after giving effect to such change in GAAP. 

     

    1.05
Rounding.
      Any financial
      ratios required to be maintained by the Borrowers pursuant to this Agreement
      shall be calculated by dividing the appropriate component by the other
      component, carrying the result to one place more than the number of places
      by
      which such ratio is expressed herein and rounding the result up or down to
      the
      nearest number (with a rounding-up if there is no nearest number). 

     

    1.06
Times
      of Day. Unless
      otherwise specified, all references herein to times of day shall be references
      to Eastern time (daylight or standard, as applicable). 

     

    ARTICLE
      II.


     

    THE
      TERM COMMITMENTS AND
      TERM LOANS 

     

    2.01
The
      Term Loans.


     

    (a)
Generally.
      Subject to the
      terms and conditions set forth herein, each Term Lender severally agrees to
      make
      a single loan to the Borrowers on the Borrowing Date in an amount not to exceed
      such Term Lender’s Term Commitment. The borrowing pursuant to this
Section 2.01 shall consist of Term Loans made simultaneously by the
      Term Lenders in accordance with their respective Applicable Percentages of
      the
      Term Facility. Amounts borrowed under this Section 2.01 and repaid
      or prepaid may not be reborrowed. 

     

    (b)
Borrowing
      Notice. The
      Borrowers shall deliver to the Payment Agent irrevocable written notice of
      the
      Borrowers’ request for the borrowing of the Term Loans (the “Borrowing
      Notice”), which Borrowing Notice shall be in substantially the form of


     

     

     

    -
      26 - 

     

    Exhibit
      C and shall include
      (i) the requested Borrowing Date (which date must be a Business Day) and
      (ii) a request for Term Loans in the aggregate principal amount of
      $50,000,000. Borrower shall deliver such notice not later than one
      (1) Business Day prior to the requested Borrowing Date to the Payment Agent
      (which shall promptly forward a copy of such Borrowing Notice to each Lender).
      The Payment Agent shall on or before the proposed Borrowing Date notify
      (A) the Borrowers and the Lenders of the LIBO Rate applicable to the
      initial Interest Period upon determination of such LIBO Rate, and (B) each
      Lender of the amount of its Applicable Percentage of the Term Loans to be
      funded. 

     

    (c)
Funding.
      Following its
      receipt from the Payment Agent of the Borrowing Notice, each Lender shall make
      the amount of its Term Loan available to the Payment Agent in immediately
      available funds at the Payment Agent’s Office not later than 1:00 p.m. on the
      Borrowing Date. Upon satisfaction, or waiver pursuant to
Section 11.01(a), of the conditions set forth in
Section 4.01 and the Payment Agent’s receipt of all the amounts to
      be funded by the Lenders on such date, the Payment Agent shall make all funds
      so
      received available to the Borrowers in like funds as received by the Payment
      Agent by wire transfer of such funds, in accordance with instructions provided
      to (and reasonably acceptable to) the Payment Agent by the Borrowers;
provided, however, that all amounts necessary to pay in full
      amounts due with respect to the Existing Loan Agreement shall be wired as
      directed in the Payoff Letter. 

     

    2.02
Optional
      Prepayments.
      Subject to the last two sentences of this Section 2.02, the
      Borrowers may, upon written notice to the Payment Agent from the Borrowers,
      at
      any time or from time to time voluntarily prepay Term Loans in whole or in
      part;
provided that (A) such notice must be received by the Payment Agent
      not later than 11:00 a.m. thirty (30) days prior to the date of prepayment
      of such Term Loans; (B) any prepayment of Term Loans shall be in a
      principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess
      thereof or, in each case, if less, the entire principal amount thereof then
      outstanding; and (C) if the Borrowers make a prepayment or cause any
      payment to a Lender of all or any portion of the outstanding principal amount
      of
      its Loans under Section 11.13(b) with respect to any replacement pursuant
      to Section 3.06(b) anytime during the Early Prepayment Period, the
      Borrowers shall also pay to the Payment Agent for the benefit of the Lenders
      or,
      in the case of a payment under Section 11.13(b) the Lenders being
      repaid, a Prepayment Fee; provided that no Prepayment Fee shall be
      payable in connection with prepayments made with the proceeds of Dispositions
      permitted pursuant to Section 7.05(f) or in connection with a
      prepayment required by Section 3.02. Each such notice shall specify
      the date and amount of such prepayment. The Payment Agent will promptly notify
      each Lender of its receipt of each such notice, and of the amount of such
      Lender’s ratable portion of such prepayment. If such notice is given by the
      Borrowers, the Borrowers shall make such prepayment and the payment amount
      specified in such notice shall be due and payable on the date specified therein.
      Any prepayment of a Term Loan shall be accompanied by all accrued interest
      on
      the amount prepaid, together with any additional amounts required pursuant
      to
Section 3.05. Each prepayment of the outstanding principal amount of
      the Term Loans pursuant to this Section 2.02 shall be applied to the
      principal repayment installments thereof on a pro rata basis, and each such
      prepayment shall be paid to the Lenders in accordance with their respective
      Applicable Percentages of the Term Loans. Notwithstanding anything to the
      contrary contained herein, except for a prepayment arising solely with respect
      to Sections 3.02, 3.06(b), or 7.05(f) as provided for
      above, the Borrowers shall not be permitted to prepay the Term Facility pursuant
      to this Section 2.02 during the period from the Closing Date through
      the date which is the first anniversary of the Closing Date. 

     

     

     

    -
      27 - 

     

    2.03
Repayment
      of Term Loans.
      The Borrowers shall repay to the Term Lenders the aggregate principal amount
      of
      all Term Loans outstanding on the Maturity Date. 

     

    2.04
Interest.


     

    (a)
      Each Term Loan shall bear
      interest on the outstanding principal amount thereof at a rate per annum equal
      to the LIBO Rate for such Interest Period plus the Applicable Rate;
      provided that in the event that Section 3.02 or 3.03 applies,
      such Term Loan shall bear interest on the outstanding principal amount thereof
      in accordance with the provisions of Section 3.02 or 3.03, as
      applicable. 

     

    (b)
      (i) If any amount of principal
      of any Term Loan is not paid when due (without regard to any applicable grace
      periods), whether at stated maturity, by acceleration, pursuant to
Section 2.03, or otherwise, such amount shall thereafter bear
      interest at a fluctuating interest rate per annum at all times equal to the
      Default Rate to the fullest extent permitted by applicable Laws. 

     

    (ii)
      If any amount (other than
      principal of any Term Loan) payable by the Borrowers under any Loan Document
      is
      not paid when due (without regard to any applicable grace periods), whether
      at
      stated maturity, by acceleration or otherwise, then upon the request of the
      Required Lenders such amount shall thereafter bear interest at a fluctuating
      interest rate per annum at all times equal to the Default Rate to the fullest
      extent permitted by applicable Laws. 

     

    (iii)
      Upon the request of the
      Required Lenders, while any Event of Default exists, the Borrowers shall pay
      interest on the principal amount of all outstanding Obligations hereunder at
      a
      fluctuating interest rate per annum at all times equal to the Default Rate
      to
      the fullest extent permitted by applicable Laws. 

     

    (iv)
      Accrued and unpaid interest on
      past due amounts (including interest on past due interest) shall be due and
      payable upon demand. 

     

    (c)
      Interest on each Term Loan shall
      be due and payable in arrears on each Interest Payment Date applicable thereto
      and at such other times as may be specified herein. Interest hereunder shall
      be
      due and payable in accordance with the terms hereof before and after judgment,
      and before and after the commencement of any proceeding under any Debtor Relief
      Law. 

     

    2.05
Fees.
      The Borrowers
      shall pay to the Arranger, the Administrative Agent and the Payment Agent for
      their own respective accounts fees in the amounts and at the times specified
      in
      the Fee Letters. 

     

    2.06
Computation
      of Interest and
      Fees. All computations of fees and interest shall be made on the basis of a
      360-day year and actual days elapsed (which results in more fees or interest,
      as
      applicable, being paid than if computed on the basis of a 365-day year);
      provided that in the event that (i) the Alternative Rate provisions of
Section 3.02 or 3.03 or (ii) the Default Rate applies,
      all 

     

     

     

    -
      28 - 

     

    computations
      of interest based upon
      the Alternative Rate when the Alternative Rate is determined by Bank of
      America’s “prime rate” shall be made on the basis of a year of 365 or 366 days,
      as the case may be, and actual days elapsed. Interest shall accrue on each
      Term
      Loan for the day on which the Term Loan is made, and shall not accrue on a
      Term
      Loan, or any portion thereof, for the day on which the Term Loan or such portion
      is paid. Each determination by the Payment Agent of an interest rate or fee
      hereunder shall be conclusive and binding for all purposes, absent manifest
      error. 

     

    2.07
Evidence
      of Debt. The
      Term Loans made by each Lender shall be evidenced by one or more accounts or
      records maintained by such Lender and by the Payment Agent in the ordinary
      course of business. The accounts or records maintained by the Payment Agent
      and
      each Lender shall be conclusive absent manifest error of the amount of the
      Term
      Loans made by the Lenders to the Borrowers and the interest and payments
      thereon. Any failure to so record or any error in doing so shall not, however,
      limit or otherwise affect the obligation of the Borrowers hereunder to pay
      any
      amount owing with respect to the Obligations. In the event of any conflict
      between the accounts and records maintained by any Lender and the accounts
      and
      records of the Payment Agent in respect of such matters, the accounts and
      records of the Payment Agent shall control in the absence of manifest error.
      Upon the request of any Lender made through the Payment Agent, the Borrowers
      shall execute and deliver to such Lender (through the Payment Agent) a Term
      Note, which shall evidence such Lender’s Term Loans in addition to such accounts
      or records. Each Lender may attach schedules to its Term Note and endorse
      thereon the date, amount and maturity of its Term Loans and payments with
      respect thereto. 

     

    2.08
Payments
      Generally.


     

    (a)
General.
      All payments to
      be made by the Borrowers shall be made without condition or deduction for any
      counterclaim, defense, recoupment or setoff. Except as otherwise expressly
      provided herein, all payments by the Borrowers hereunder shall be made to the
      Payment Agent, for the account of the respective Lenders to which such payment
      is owed, at the Payment Agent’s Office in Dollars and in immediately available
      funds not later than 2:00 p.m. on the date specified herein. The Payment Agent
      will promptly distribute to each Lender its Applicable Percentage of such
      payment in like funds as received by wire transfer to such Lender’s Lending
      Office. All payments received by the Payment Agent after 2:00 p.m. shall be
      deemed received on the next succeeding Business Day and any applicable interest
      or fee shall continue to accrue. If any payment to be made by the Borrowers
      shall come due on a day other than a Business Day, payment shall be made on
      the
      next following Business Day, and such extension of time shall be reflected
      on
      computing interest or fees, as the case may be. 

     

    (b)
Failure
      to Satisfy Conditions
      Precedent. If any Lender makes available to the Payment Agent funds for any
      Term Loan to be made by such Lender as provided in the foregoing provisions
      of
      this Article II, and such funds are not made available to the Borrowers
      by the Payment Agent because (i) the conditions to the Term Loans set forth
      in Article IV are not satisfied or waived in accordance with the terms
      hereof or (ii) any Lender fails to fund to the Payment Agent the full
      amount to be funded by it on such date, the Payment Agent shall return such
      funds (in like funds as received from such Lender) to such Lender, without
      interest. 

     

     

     

    -
      29 - 

     

    (c)
Obligations
      of Lenders
      Several. The obligations of the Lenders hereunder to make Term Loans and to
      make payments pursuant to Section 11.04(c) are several and not
      joint. The failure of any Lender to make any Term Loan, to fund any such
      participation or to make any payment under Section 11.04(c) on any
      date required hereunder shall not relieve any other Lender of its corresponding
      obligation to do so on such date, and no Lender shall be responsible for the
      failure of any other Lender to so make its Term Loan, to purchase its
      participation or to make its payment under Section 11.04(c).


     

    (d)
Funding
      Source. Nothing
      herein shall be deemed to obligate any Lender to obtain the funds for any Term
      Loan in any particular place or manner or to constitute a representation by
      any
      Lender that it has obtained or will obtain the funds for any Term Loan in any
      particular place or manner. 

     

    (e)
Insufficient
      Funds. If at
      any time insufficient funds are received by and available to the Payment Agent
      to pay fully all amounts of principal, interest and fees then due hereunder,
      such funds shall be applied (i) first, toward payment of interest
      and fees then due hereunder, ratably among the parties entitled thereto in
      accordance with the amounts of interest and fees then due to such parties,
      and
      (ii) second, toward payment of principal then due hereunder, ratably
      among the parties entitled thereto in accordance with the amounts of principal
      then due to such parties. 

     

    2.09
Sharing
      of Payments by
      Lenders. If any Lender shall, by exercising any right of setoff or
      counterclaim or otherwise, obtain payment in respect of (a) Obligations due
      and payable to such Lender hereunder and under the other Loan Documents at
      such
      time in excess of its ratable share (according to the proportion of (i) the
      amount of such Obligations due and payable to such Lender at such time to
      (ii) the aggregate amount of the Obligations due and payable to all Lenders
      hereunder and under the other Loan Documents at such time) of payments on
      account of the Obligations due and payable to all Lenders hereunder and under
      the other Loan Documents at such time obtained by all the Lenders at such time
      or (b) Obligations owing (but not due and payable) to such Lender hereunder
      and under the other Loan Documents at such time in excess of its ratable share
      (according to the proportion of (i) the amount of such Obligations owing
      (but not due and payable) to such Lender at such time to (ii) the aggregate
      amount of the Obligations owing (but not due and payable) to all Lenders
      hereunder and under the other Loan Parties at such time) of payment on account
      of the Obligations owing (but not due and payable) to all Lenders hereunder
      and
      under the other Loan Documents at such time obtained by all of the Lenders
      at
      such time then the Lender receiving such greater proportion shall
      (a) notify the Payment Agent of such fact, and (b) purchase (for cash
      at face value) participations in the Term Loans of the other Lenders, or make
      such other adjustments as shall be equitable, so that the benefit of all such
      payments shall be shared by the Lenders ratably in accordance with the aggregate
      amount of Obligations then due and payable to the Lenders or owing (but not
      due
      and payable) to the Lenders, as the case may be, provided that:


     

    (i)
      if any such participations or
      subparticipations are purchased and all or any portion of the payment giving
      rise thereto is recovered, such participations or subparticipations shall be
      rescinded and the purchase price restored to the extent of such recovery,
      without interest; and 

     

     

     

    -
      30 - 

     

    (ii)
      the provisions of this Section
      shall not be construed to apply to (A) any payment made by the Borrowers
      pursuant to and in accordance with the express terms of this Agreement or
      (B) any payment obtained by a Lender as consideration for the assignment of
      or sale of a participation in any of its Term Loans to any assignee or
      participant, other than to any Borrower or any Subsidiary thereof (as to which
      the provisions of this Section shall apply). 

     

    Each
      Loan Party consents to the
      foregoing and agrees, to the extent it may effectively do so under applicable
      law, that any Lender acquiring a participation pursuant to the foregoing
      arrangements may exercise against such Loan Party rights of setoff and
      counterclaim with respect to such participation as fully as if such Lender
      were
      a direct creditor of such Loan Party in the amount of such participation.


     

    ARTICLE
      III.


     

    TAXES,
      YIELD PROTECTION AND
      ILLEGALITY 

     

    3.01
Taxes.


     

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

     

    (b)
Payment
      of Other Taxes by the
      Borrowers and Parent. Without limiting the provisions of subsection
      (a) above, the Borrowers and Parent shall timely pay any Other Taxes to the
      relevant Governmental Authority in accordance with applicable law. 

     

    (c)
Indemnification
      by the
      Borrowers and Parent. The Borrowers and Parent shall, jointly and severally,
      indemnify each Agent and each Lender (each such Person a “Tax
      Indemnitee”), within 30 days after demand therefor, for the full amount of
      any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other
      Taxes
      imposed or asserted on or attributable to amounts payable under this Section)
      paid by such Tax Indemnitee, and any penalties, interest and reasonable expenses
      arising therefrom or with respect thereto, whether or not such Indemnified
      Taxes
      or Other Taxes were correctly or legally imposed or asserted by the relevant
      Governmental Authority; provided that if a Tax Indemnitee fails to give
      notice to ThermaClime of the imposition of any Indemnified Taxes or Other Taxes
      on or to be paid by such Tax Indemnitee within 90 days following its receipt
      of
      actual written notice of the imposition of such Indemnified Taxes or Other
      Taxes, there will be no obligation for Parent or Borrowers to pay to such Tax
      Indemnitee interest or penalties attributable to the period beginning after
      such
      90th day
      and
      ending 7 days after ThermaClime receives notice from such Tax Indemnitee. A
      certificate as to the amount of such payment or liability delivered to the
      Borrowers by such Tax Indemnitee (with a copy to the Payment Agent), or by
      any
      Agent on its own behalf or on behalf of a Lender, shall be conclusive absent
      manifest error. 

     

     

     

    -
      31 - 

     

    (d)
Evidence
      of Payments. As
      soon as practicable after any payment of Indemnified Taxes or Other Taxes by
      any
      Borrower or Parent, as the case may be, to a Governmental Authority, ThermaClime
      shall deliver to the Payment Agent the original or a certified copy of a receipt
      issued by such Governmental Authority evidencing such payment, a copy of the
      return reporting such payment or other evidence of such payment reasonably
      satisfactory to the Payment Agent. 

     

    (e)
Status
      of Lenders. Any
      Foreign Lender that is entitled to an exemption from or reduction of withholding
      tax under the law of the jurisdiction in which any Borrower or Parent, as the
      case may be, is resident for tax purposes, or any treaty to which such
      jurisdiction is a party, with respect to payments hereunder or under any other
      Loan Document shall deliver to ThermaClime (with a copy to the Payment Agent),
      at the time or times prescribed by applicable law or reasonably requested by
      the
      Borrowers, Parent or the Payment Agent, such properly completed and executed
      documentation prescribed by applicable law as will permit such payments to
      be
      made without withholding or at a reduced rate of withholding. In addition,
      any
      Lender, if requested by the Borrowers, Parent or the Payment Agent, shall
      deliver such other documentation prescribed by applicable law or reasonably
      requested by the Borrowers, Parent or the Payment Agent as will enable the
      Borrowers, Parent or the Payment Agent to determine whether or not such Lender
      is subject to backup withholding or information reporting requirements.


     

    Without
      limiting the generality of
      the foregoing, if any Borrower or Parent, as the case may be, is resident for
      tax purposes in the United States, any Foreign Lender shall deliver to the
      Borrowers, Parent and the Payment Agent (in such number of copies as shall
      be
      requested by the recipient) on or prior to the date on which such Foreign Lender
      becomes a Lender under this Agreement (and from time to time thereafter upon
      the
      request of the Borrowers, Parent or the Payment Agent, but only if such Foreign
      Lender is legally entitled to do so), whichever of the following is applicable:
      

     

    (i)
      duly completed copies of
      Internal Revenue Service Form W-8BEN claiming eligibility for benefits of an
      income tax treaty to which the United States is a party, 

     

    (ii)
      duly completed copies of
      Internal Revenue Service Form W-8ECI, 

     

    (iii)
      in the case of a Foreign
      Lender claiming the benefits of the exemption for portfolio interest under
      section 881(c) of the Code, (A) a certificate to the effect that such
      Foreign Lender is not (1) a “bank” within the meaning of section
      881(c)(3)(A) of the Code, (2) a “10 percent shareholder” of any Borrower or
      Parent within the meaning of section 881(c)(3)(B) of the Code, or (3) a
“controlled foreign corporation” described in section 881(c)(3)(C) of the Code
      and (B) duly completed copies of Internal Revenue Service Form W-8BEN, or


     

     

     

    -
      32 - 

     

    (iv)
      any other form prescribed by
      applicable law as a basis for claiming exemption from or a reduction in United
      States Federal withholding tax duly completed together with such supplementary
      documentation as may be prescribed by applicable law to permit the Borrowers
      to
      determine the withholding or deduction required to be made. 

     

    (f)
Treatment
      of Certain
      Refunds. If any Tax Indemnitee determines, in its sole discretion, that it
      has received a refund of any Taxes or Other Taxes as to which it has been
      indemnified pursuant to this Section 3.01 by the Borrowers or
      Parent, as the case may be, or with respect to which the Borrowers or Parent,
      as
      the case may be, has paid additional amounts pursuant to this Section, it shall
      promptly notify ThermaClime and pay to the Borrowers or Parent, as the case
      may
      be, an amount equal to such refund (but only to the extent of indemnity payments
      made, or additional amounts paid, by the Borrowers or Parent under this Section
      with respect to the Taxes or Other Taxes giving rise to such refund), net of
      any
      out-of-pocket expenses of such Tax Indemnitee and without interest (other than
      any interest paid by the relevant Governmental Authority with respect to such
      refund), provided that the Borrowers or Parent, as the case may be, upon
      the request of such Tax Indemnitee, agree to repay the amount paid over to
      the
      Borrowers (plus any penalties, interest or other charges imposed by the relevant
      Governmental Authority) to such Tax Indemnitee if such Tax Indemnitee is
      required to repay such refund to such Governmental Authority. A certificate
      as
      to the amount of such repayment shall be delivered by such Tax Indemnitee to
      ThermaClime. This subsection shall not be construed to require any Agent or
      any
      Lender to make available its tax returns (or any other information relating
      to
      its taxes that it deems confidential) to the Borrowers, Parent or any other
      Person. 

     

    3.02
Illegality.
      If any
      Lender determines that any Law has made it unlawful, or that any Governmental
      Authority has asserted that it is unlawful, for any Lender or its applicable
      Lending Office to make, maintain or fund Term Loans accruing interest at rates
      based on the LIBO Rate, or to determine or charge interest rates based upon
      the
      LIBO Rate, or any Governmental Authority has imposed material restrictions
      on
      the authority of such Lender to purchase or sell, or to take deposits of,
      Dollars in the London interbank market, then, on notice thereof by such Lender
      to the Borrowers through the Payment Agent, any obligation of such Lender to
      make or continue Term Loans accruing interest at a rate based on the LIBO Rate
      shall be suspended until such Lender notifies the Payment Agent and the
      Borrowers that the circumstances giving rise to such determination no longer
      exist. Upon receipt of such notice, the Borrowers shall, upon demand from such
      Lender (with a copy to the Payment Agent), prepay such Lender’s Term Loans (and
      the amount of any prepayment to the extent such amount is required to be paid
      pursuant to this Section 3.02 shall not be subject to a Prepayment
      Fee) or, if available, convert the interest rate accruing on such Lender’s Term
      Loans to the Alternative Rate plus the Applicable Rate, either on the last
      day
      of the Interest Period therefor, if such Lender may lawfully continue to
      maintain such Term Loans accruing interest at a rate based on the LIBO Rate
      to
      such day, or immediately, if such Lender may not lawfully continue to maintain
      such Term Loans accruing interest at a rate based on the LIBO Rate. Upon any
      such prepayment or conversion, the Borrowers shall also pay accrued interest
      on
      the amount so prepaid or converted. 

     

     


     

    -
      33 - 

     

    3.03
Inability
      to Determine
      Rates. If the Required Lenders determine that for any reason in connection
      with any request for a Term Loan or a conversion to or continuation thereof
      that
      (a) Dollar deposits are not being offered to banks in the London interbank
      eurodollar market for the applicable amount and Interest Period of such Term
      Loan, (b) adequate and reasonable means do not exist for determining the
      LIBO Rate for any requested Interest Period with respect to a proposed Term
      Loan, or (c) the LIBO Rate for any requested Interest Period with respect
      to a proposed Term Loan does not adequately and fairly reflect the cost to
      such
      Lenders of funding such Term Loan, the Payment Agent will promptly so notify
      the
      Borrowers and each Lender. Thereafter, the obligation of the Lenders to make
      or
      maintain Term Loans accruing interest at a rate based on the LIBO Rate shall
      be
      suspended until the Payment Agent (upon the instruction of the Required Lenders)
      revokes such notice. Upon receipt of such notice, the Borrowers may revoke
      any
      pending request for a borrowing of, conversion to or continuation of Term Loans
      or, failing that, will be deemed to have converted such request into a request
      for Term Loans in the amount specified therein accruing interest at a rate
      per
      annum equal to the Alternative Rate plus the Applicable Rate. 

     

    3.04
Increased
      Costs; Reserves on
      Term Loans. 

     

    (a)
Increased
      Costs
      Generally. If any Change in Law shall: 

     

    (i)
      impose, modify or deem
      applicable any reserve, special deposit, compulsory loan, insurance charge
      or
      similar requirement against assets of, deposits with or for the account of,
      or
      credit extended or participated in by, any Lender (except any reserve
      requirement contemplated by Section 3.04(e)); 

     

    (ii)
      subject any non-foreign Lender
      to any tax of any kind whatsoever with respect to this Agreement or any Term
      Loan made by it, or change the basis of taxation of payments to such Lender
      in
      respect thereof (except for Indemnified Taxes or Other Taxes covered by
Section 3.01 and the imposition of, or any change in the rate of,
      any Excluded Tax payable by such Lender); or 

     

    (iii)
      impose on any Lender or the
      London interbank market any other condition, cost or expense affecting this
      Agreement or Term Loans made by such Lender; 

     

    and
      the result of any of the
      foregoing shall be to increase the cost to such Lender of making or maintaining
      any Term Loan (or of maintaining its obligation to make any such Term Loan),
      or
      to reduce the amount of any sum received or receivable by such Lender hereunder
      (whether of principal, interest or any other amount) then, upon request of
      such
      Lender, the Borrowers will pay to such Lender such additional amount or amounts
      as will compensate such Lender for such additional costs incurred or reduction
      suffered. 

     

    (b)
Capital
      Requirements. If
      any Lender determines that any Change in Law affecting such Lender or any
      Lending Office of such Lender or such Lender’s holding company, if any,
      regarding capital requirements has or will have the effect of reducing the
      rate
      of return on such Lender’s capital or on the capital of such Lender’s holding
      company, if any, as a consequence of this Agreement, or the Term Loans made
      by
      such Lender, to a level below that which such Lender or such Lender’s holding
      company 

     

     

     

    -
      34 - 

     

    could
      have achieved but for such
      Change in Law (taking into consideration such Lender’s policies and the policies
      of such Lender’s holding company with respect to capital adequacy), then from
      time to time the Borrowers will pay to such Lender such additional amount or
      amounts as will compensate such Lender or such Lender’s holding company for any
      such reduction suffered. 

     

    (c)
Certificates
      for
      Reimbursement. A certificate of a Lender setting forth the amount or amounts
      necessary to compensate such Lender or its holding company, as the case may
      be,
      as specified in subsection (a) or (b) of this Section and delivered to
      ThermaClime shall be conclusive absent manifest error. The Borrowers shall
      pay
      such Lender the amount shown as due on any such certificate within 30 days
      after
      receipt thereof. 

     

    (d)
Delay
      in Requests.
      Failure or delay on the part of any Lender to demand compensation pursuant
      to
      the foregoing provisions of this Section 3.04 shall not constitute a
      waiver of such Lender’s right to demand such compensation, provided that
      the Borrowers shall not be required to compensate a Lender pursuant to the
      foregoing provisions of this Section for any increased costs incurred or
      reductions suffered more than six months prior to the date that such Lender
      delivers to ThermaClime a certificate pursuant to Section 3.04(c)
      above or notifies ThermaClime of such Lender’s intention to claim compensation
      therefor (except that, if the Change in Law giving rise to such increased costs
      or reductions is retroactive, then the six-month period referred to above shall
      be extended to include the period of retroactive effect thereof). 

     

    (e)
Reserves
      on Term Loans.
      The Borrowers shall pay to each Lender, as long as such Lender shall be required
      to maintain reserves with respect to liabilities or assets consisting of or
      including Eurocurrency funds or deposits (currently known as “Eurocurrency
      liabilities”), additional interest on the unpaid principal amount of each Term
      Loan equal to the actual costs of such reserves allocated to such Term Loan
      by
      such Lender (as determined by such Lender in good faith, which determination
      shall be conclusive absent manifest error), which shall be due and payable
      on
      each date on which interest is payable on such Term Loan, provided
      ThermaClime shall have received at least 30 days’ prior notice (with a copy to
      the Payment Agent) of such additional interest with respect to the initial
      Interest Payment Date for which such additional interest is due from such
      Lender. If a Lender fails to give notice 30 days prior to the relevant Interest
      Payment Date, such additional interest shall be due and payable 30 days from
      receipt of such notice. 

     

    3.05
Compensation
      for Losses.
      Upon demand of any Lender (with a copy to the Payment Agent) from time to time,
      the Borrowers shall promptly compensate such Lender for and hold such Lender
      harmless from any loss, cost or expense incurred by it as a result of:


     

    (a)
      any continuation, conversion,
      payment or prepayment of any Term Loan on a day other than the last day of
      the
      Interest Period for such Term Loan (whether voluntary, mandatory, automatic,
      by
      reason of acceleration, or otherwise); 

     

    (b)
      any failure by the Borrowers
      (for a reason other than the failure of such Lender to make a Term Loan) to
      prepay, borrow, continue or convert any Term Loan on the date or in the amount
      notified by the Borrowers; or 

     

     

     

    -
      35 - 

     

    (c)
      any assignment of a Term Loan on
      a day other than the last day of the Interest Period therefor as a result of
      a
      request by the Borrowers pursuant to Section 11.13; 

     

    including
      any loss of anticipated
      profits and any loss or expense arising from the liquidation or reemployment
      of
      funds obtained by it to maintain such Term Loan or from fees payable to
      terminate the deposits from which such funds were obtained. 

     

    For
      purposes of calculating amounts
      payable by the Borrowers to the Lenders under this Section 3.05,
      each Lender shall be deemed to have funded each Term Loan made by it at the
      LIBO
      Rate for such Term Loan by a matching deposit or other borrowing in the London
      interbank eurodollar market for a comparable amount and for a comparable period,
      whether or not such Term Loan was in fact so funded. 

     

    3.06
Mitigation
      Obligations;
      Replacement of Lenders. 

     

    (a)
Designation
      of a Different
      Lending Office. If any Lender requests compensation under
Section 3.04, or any Borrower is required to pay any additional
      amount to any Lender or any Governmental Authority for the account of any Lender
      pursuant to Section 3.01, or if any Lender gives a notice pursuant
      to Section 3.02, then such Lender shall use reasonable efforts to
      designate a different Lending Office for funding or booking its Term Loans
      hereunder or to assign its rights and obligations hereunder to another of its
      offices, branches or affiliates, if, in the judgment of such Lender, such
      designation or assignment (i) would eliminate or reduce amounts payable
      pursuant to Section 3.01 or 3.04, as the case may be, in the
      future, or eliminate the need for the notice pursuant to
Section 3.02, as applicable, and (ii) in each case, would not
      subject such Lender to any unreimbursed cost or expense and would not otherwise
      be disadvantageous to such Lender. The Borrowers hereby agree to pay all
      reasonable costs and expenses incurred by any Lender in connection with any
      such
      designation or assignment. 

     

    (b)
Replacement
      of Lenders.
      If any Lender requests compensation under Section 3.04, or if any
      Borrower is required to pay any additional amount to any Lender or any
      Governmental Authority for the account of any Lender pursuant to
Section 3.01, the Borrowers may replace such Lender in accordance
      with Section 11.13. 

     

    3.07
Survival.
      All of the
      Borrowers’ obligations under this Article III shall survive repayment of
      all Obligations hereunder. 

     

    ARTICLE
      IV.


     

    CONDITIONS
      PRECEDENT TO
      CREDIT EXTENSIONS 

     

    4.01
Conditions
      of Term
      Loans. The obligation of each Lender to make its Term Loan on the Borrowing
      Date hereunder is subject to satisfaction of the following conditions precedent:
      

     

    (a)
      The Payment Agent’s receipt of
      the following, each of which shall be originals or telecopies (followed promptly
      by originals) unless otherwise specified, each properly executed by a
      Responsible Officer of the signing Loan Party, each dated the Closing Date
      (or,
      in the case of certificates of governmental officials, a recent date before
      the
      Closing Date) and each in form and substance satisfactory to each Agent and
      each
      of the Lenders: 

     

    (i)
      executed counterparts of this
      Agreement, the Guaranty, the Intercompany Loan Subordination Agreement and
      the
      Management Agreement Subordination, sufficient in number for distribution to
      each Agent, each Lender and the Borrowers; 

     

     

     

    -
      36 - 

     

    (ii)
      a Term Note executed by all of
      the Borrowers in favor of each Lender; 

     

    (iii)
      a security agreement, in
      substantially the form of Exhibit E (together with each other
      security agreement and security agreement supplement delivered pursuant to
      Section 6.12, in each case as amended, the “Security
      Agreement”), duly executed by each Loan Party, together with: 

     

    (A)
      proper financing statements in
      form appropriate for filing under the Uniform Commercial Code of all
      jurisdictions that the Payment Agent may deem necessary or desirable in order
      to
      perfect the Liens created under the Security Agreement, covering the Collateral
      described in the Security Agreement, 

     

    (B)
      completed requests for
      information, dated on or before the date of the Term Loans, all effective
      financing statements filed in the jurisdictions referred to in clause (A)
      above that name any Loan Party as debtor, together with copies of such other
      financing statements, 

     

    (C)
      evidence of the completion of
      all other actions, recordings and filings of or with respect to the Security
      Agreement that the Payment Agent may deem necessary or desirable in order to
      perfect the Liens created thereby, 

     

    (D)
      copies of each of the Assigned
      Agreements, together with a fully executed Assignment and Consent relating
      thereto, and 

     

    (E)
      evidence that all other action
      that the Payment Agent may deem necessary or desirable in order to perfect
      the
      Liens created under the Security Agreement has been taken (including receipt
      of
      duly executed payoff letters, UCC-3 termination statements and landlords’ and
      bailees’ waiver and consent agreements and all filings necessary to perfect the
      Liens created under the Security Agreement with respect to the trademarks used
      in connection with the Facility Business); 

     

    (iv)
      deeds of trust, trust deeds,
      deeds to secure debt, mortgages, leasehold mortgages and leasehold deeds of
      trust, in substantially the form of Exhibits F-1 and F-2
      (with such changes as may be satisfactory to the Payment Agent and its counsel
      to account for local law matters) and covering the Cherokee Site and the El
      Dorado Site (together with the Assignments of Leases and Rents referred to
      therein and each other mortgage delivered pursuant to Section 6.12,
      in each case as amended, the “Mortgages”), duly executed by the
      appropriate Loan Party, together with: 

     

    (A)
      evidence that counterparts of
      the Mortgages have been duly executed, acknowledged and delivered and are in
      form suitable for filing or recording in all filing or recording offices that
      the Payment Agent may deem necessary or desirable in order to create a valid
      first and subsisting Lien on the property described therein in favor of the
      Collateral Agent for the benefit of the Secured Parties and that all filing,
      documentary, stamp, intangible and recording taxes and fees have been paid,
      

     

     

     

    -
      37 - 

     

    (B)
      fully paid American Land Title
      Association Lender’s Extended Coverage title insurance policies (the
“Mortgage Policies”), with endorsements and in amounts acceptable to the
      Payment Agent, issued, coinsured and reinsured by title insurers acceptable
      to
      the Payment Agent, insuring the Mortgages to be valid first and subsisting
      Liens
      on the property described therein, free and clear of all defects (including,
      but
      not limited to, mechanics’ and materialmen’s Liens) and encumbrances, excepting
      only Permitted Encumbrances and other Liens permitted under the Loan Documents,
      and providing for such other affirmative insurance (including endorsements
      for
      mechanics’ and materialmen’s Liens and for zoning of the applicable property)
      and such coinsurance and direct access reinsurance as the Payment Agent may
      deem
      necessary or desirable, 

     

    (C)
      American Land Title
      Association/American Congress on Surveying and Mapping form surveys, for which
      all necessary fees (where applicable) have been paid, and dated no more than
      60
      days before the Closing Date, certified to the Collateral Agent and the issuer
      of the Mortgage Policies in a manner satisfactory to the Payment Agent by a
      land
      surveyor duly registered and licensed in the States in which the property
      described in such surveys is located and acceptable to the Payment Agent,
      showing all buildings and other improvements, any off-site improvements, the
      location of any easements, parking spaces, rights of way, building set-back
      lines and other dimensional regulations and the absence of encroachments, either
      by such improvements or on to such property, and other defects, other than
      encroachments and other defects acceptable to the Payment Agent, 

     

    (D)
      estoppel and consent agreements
      executed by each of the lessors of the leased real properties listed on
Schedule 4.01(a)(iv), along with (1) a memorandum of lease in
      recordable form with respect to such leasehold interest, executed and
      acknowledged by the owner of the affected real property, as lessor, or
      (2) evidence that the applicable lease with respect to such leasehold
      interest or a memorandum thereof has been recorded in all places necessary
      or
      desirable, in the Payment Agent’s reasonable judgment, to give constructive
      notice to third-party purchasers of such leasehold interest, or (3) if such
      leasehold interest was acquired or subleased from the holder of a 

     

     

     

    -
      38 - 

     

    recorded
      leasehold interest, the
      applicable assignment or sublease document, executed and acknowledged by such
      holder, in each case in form sufficient to give such constructive notice upon
      recordation and otherwise in form satisfactory to the Payment Agent,


     

    (E)
      evidence of the insurance
      required by the terms of the Mortgages, 

     

    (F)
      an appraisal of each of the
      properties described in the Mortgages, and 

     

    (G)
      evidence that all other action
      that the Payment Agent may deem necessary or desirable in order to create valid
      first and subsisting Liens on the property described in the Mortgages has been
      taken; 

     

    (v)
      such certificates of resolutions
      or other action, incumbency certificates and/or other certificates of
      Responsible Officers of each Loan Party as the Payment Agent may require
      evidencing the identity, authority and capacity of each Responsible Officer
      thereof authorized to act as a Responsible Officer in connection with this
      Agreement and the other Loan Documents to which such Loan Party is a party
      or is
      to be a party; 

     

    (vi)
      such documents and
      certifications as the Payment Agent may reasonably require to evidence that
      each
      Loan Party is duly organized or formed, and that each of the Borrower and Parent
      is validly existing, in good standing and qualified to engage in business in
      each jurisdiction where its ownership, lease or operation of properties or
      the
      conduct of its business requires such qualification, except to the extent that
      failure to do so could not reasonably be expected to have a Material Adverse
      Effect; 

     

    (vii)
      a favorable opinion of David
      M. Shear, general counsel to the Loan Parties, addressed to each Agent and
      each
      Lender, as to the matters set forth in Exhibit J-1 and such other matters
      concerning the Loan Parties and the Loan Documents as the Required Lenders
      may
      reasonably request; 

     

    (viii)
      a favorable opinion of
      (A) Balch & Bingham LLP, local Alabama counsel to the Lenders,
      addressed to each Agent and each Lender, as to the matters set forth in
Exhibit J-2 and such other matters concerning the Loan Parties and the
      Loan Documents as the Required Lenders may reasonably request, and
      (B) Friday, Eldredge & Clark, LLP, local Arkansas counsel to the
      Lenders, addressed to each Agent and each Lender, as to the matters set forth
      in
Exhibit J-3 and such other matters concerning the Loan Parties and the
      Loan Documents as the Required Lenders may reasonably request ; 

     

    (ix)
      a certificate of a Responsible
      Officer of each Loan Party either (A) attaching copies of all consents,
      licenses and approvals required in connection with the consummation by such
      Loan
      Party of the transactions contemplated in the 

     

     

     

    -
      39 - 

     

    Loan
      Documents and the execution,
      delivery and performance by such Loan Party and the validity against such Loan
      Party of the Loan Documents to which it is a party, and such consents, licenses
      and approvals shall be in full force and effect, or (B) stating that no
      such consents, licenses or approvals are so required; 

     

    (x)
      a certificate signed by a
      Responsible Officer of each Borrower certifying (A) that the conditions
      specified in Sections 4.01(e) and (f) have been satisfied,
      and (B) that there has been no event or circumstance since the date of the
      Audited Financial Statements that has had or could be reasonably expected to
      have, either individually or in the aggregate, a Material Adverse Effect;


     

    (xi)
      a copy of the business plan and
      budget of each of Parent and its Subsidiaries and ThermaClime and its
      Subsidiaries, in each case on a consolidated basis, including forecasts of
      consolidated balance sheets and statements of income or operations and cash
      flows of Parent and its Subsidiaries or ThermaClime and its Subsidiaries, as
      applicable, on a monthly basis for the fiscal year ending December 31,
      2007, as prepared by management of Parent or ThermaClime, as applicable, and
      delivered to the Revolving Agent in accordance with the provisions of the
      Revolving Credit Documents; 

     

    (xii)
      certificates attesting to the
      Solvency of each Loan Party before and after giving effect to the Term Loans,
      from its chief financial officer; 

     

    (xiii)
      an environmental assessment
      report addressed to each Agent and from an environmental consulting firm
      acceptable to the Lenders, which report shall identify existing and potential
      environmental concerns and shall quantify related costs and liabilities,
      associated with each of the Cherokee Site and the El Dorado Site, and the
      Lenders shall be satisfied with the nature and amount of any such matters and
      with the Borrowers’ plans with respect thereto; 

     

    (xiv)
      evidence that all insurance
      required to be maintained pursuant to the Loan Documents has been obtained
      and
      is in effect, together with the certificates of insurance, naming the Collateral
      Agent, on behalf of the Secured Parties, as an additional insured or loss payee,
      as the case may be, under all insurance policies maintained with respect to
      the
      assets and properties of the Loan Parties that constitutes Collateral;


     

    (xv)
      (A) the unaudited consolidated
      and consolidating financial statements consisting of a consolidated and
      consolidating balance sheet of each of Parent and its Subsidiaries and
      ThermaClime and its Subsidiaries, in each case dated as of June 30, 2007,
      (B) the related consolidated and consolidating statements of income or
      operations, consolidated statements of shareholders’ equity and consolidated
      statements of cash flows for the fiscal quarter ended on that date, and
      (C) a duly completed Compliance Certificate as of the last day of the
      fiscal quarter of the Borrowers ended June 30, 2007, signed by chief
      executive officer, chief financial officer, treasurer or controller of
      ThermaClime; 

     

     

     

    -
      40 - 

     

    (xvi)
      the Payoff Letter and other
      evidence that the Existing Loan Agreement has been, or concurrently with the
      Closing Date is being, terminated and all Liens securing obligations under
      the
      Existing Loan Agreement have been, or concurrently with the Closing Date are
      being, released; 

     

    (xvii)
      (A) an Amended and Restated
      Loan and Security Agreement dated of even date herewith shall have been executed
      by the Revolving Agent, the “Lenders” party to the Revolving Credit Agreement
      and the Borrowers and a true and correct copy of such amendment shall have
      been
      delivered to the Payment Agent, which agreement shall be in form and substance
      satisfactory to the Payment Agent, and (B) release documents in form and
      substance satisfactory to the Payment Agent, pursuant to which the Revolving
      Agent releases any and all Liens that it has on any of the Collateral or on
      any
      Equity Interests of any Loan Party or any Subsidiary of any Loan Party;


     

    (xviii)
      the borrowing of the Term
      Loans shall have occurred on or before November 9, 2007; 

     

    (xix)
      an Inter-Lender Agreement in
      the form of Exhibit L (the “Inter-Lender Agreement”) executed and
      delivered by all parties thereto; 

     

    (xx)
      Assignment and Subordination
      Agreement in the form attached hereto as Exhibit K with respect to each
      of the leases listed on Schedule 7.05; and 

     

    (xxi)
      such other assurances,
      certificates, documents, consents or opinions as any Agent or any Lender
      reasonably may require. 

     

    (b)
      The Borrowers shall have
      delivered to the Administrative Agent and the Arranger a fully executed copy
      of
      the Bank of America Fee Letter and to the Payment Agent a fully executed copy
      of
      the Payment Agent Fee Letter, and all fees required to be paid to the Agents,
      the Arranger and the Lenders on or before the Closing Date shall have been
      paid.


     

    (c)
      Unless waived by the Agents, the
      Borrowers shall have paid all fees, charges and disbursements of counsel to
      the
      Agents (directly to such counsel if requested by the Agents) to the extent
      invoiced prior to or on the Closing Date, plus such additional amounts of such
      fees, charges and disbursements as shall constitute its reasonable estimate
      of
      such fees, charges and disbursements incurred or to be incurred by it through
      the closing proceedings (provided that, unless otherwise agreed in
      writing, such estimate shall not thereafter preclude a final settling of
      accounts between the Borrowers and the Agents). 

     

    (d)
      The Lenders shall have completed
      a due diligence investigation of Parent, the Borrowers and their respective
      Subsidiaries in scope, and with results, satisfactory to the Lenders, and shall
      have been given such access to the management, records, books of account,
      contracts and properties of Parent, the Borrowers and their respective
      Subsidiaries and shall have received such financial, business and other
      information regarding each of the foregoing Persons and businesses as they
      shall
      have requested; all of the information made available to any Agent prior to
      June 18, 2007 shall be complete and correct in all material respects; and
      no changes or developments shall have occurred, and no new or additional
      information shall have been received or discovered by the Agents or the Lenders
      regarding Parent, the Borrowers and their respective Subsidiaries after
      June 18, 2007 that (A) either 

     

     

     

    -
      41 - 

     

    individually
      or in the aggregate
      could reasonably be expected to have a Material Adverse Effect or
      (B) purports to adversely affect the Term Loans, and nothing shall have
      come to the attention of the Lenders during the course of such due diligence
      investigation to lead them to believe (i) that the Information Memorandum
      was or has become misleading, incorrect or incomplete in any material respect,
      or (ii) that the transactions contemplated in the Loan Documents will have
      a Material Adverse Effect. 

     

    (e)
      The representations and
      warranties of each Borrower and each other Loan Party contained in Article
      V or any other Loan Document, or which are contained in any document
      furnished at any time under or in connection herewith or therewith, shall be
      true and correct on and as of the date of the Term Loans, except to the extent
      that such representations and warranties specifically refer to an earlier date,
      in which case they shall be true and correct in all material respects as of
      such
      earlier date. 

     

    (f)
      No Default shall exist, or would
      result from the making of the Term Loans or from the application of the proceeds
      thereof. 

     

    Without
      limiting the generality of
      the provisions of the last paragraph of Section 9.03, for purposes
      of determining compliance with the conditions specified in this
Section 4.01, each Lender that has signed this Agreement shall be
      deemed to have consented to, approved or accepted or to be satisfied with,
      each
      document or other matter required thereunder to be consented to or approved
      by
      or acceptable or satisfactory to a Lender unless the Payment Agent shall have
      received notice from such Lender prior to the proposed Closing Date specifying
      its objection thereto. 

     

    ARTICLE
      V.


     

    REPRESENTATIONS
      AND
      WARRANTIES 

     

    Each
      Borrower and, in the case of
Sections 5.01, 5.02, 5.03 (other than Sections
      5.03(b) and (c)), 5.04, 5.05, 5.06, 5.07,
5.11, 5.12, 5.13, 5.15,
5.16
      and 5.18,
      Parent, represents and warrants to the Agents and the Lenders that as of the
      date of this Agreement, the date of the Borrowing Notice and the Borrowing
      Date:


     

    5.01
Existence,
      Qualification and
      Corporate Power. Each Loan Party (a) is a corporation, duly organized
      or formed, validly existing and in good standing under the Laws of its
      jurisdiction of incorporation, (b) has all requisite corporate power and
      authority and all requisite governmental licenses, authorizations, consents
      and
      approvals to (i) own its assets and carry on its business as currently
      conducted and (ii) execute, deliver and perform its obligations under the
      Loan Documents to which it is a party, and (c) is duly qualified and is
      licensed and in good standing under the Laws of each jurisdiction where its
      ownership, lease or operation of properties or the conduct of its business
      as
      currently conducted requires such qualification or license; except in each
      case
      referred to in clause (b)(i) or (c), to the extent that failure to
      do so could not reasonably be expected to have a Material Adverse Effect.


     

     

     

    -
      42 - 

     

    5.02
Authorization;
      No
      Contravention. The execution, delivery and performance by each Loan Party of
      each Loan Document to which it is party, have been duly authorized by all
      necessary corporate or limited liability company action, and do not and will
      not
      (a) contravene the terms of any of its Organization Documents;
      (b) conflict with or result in any breach or contravention of, or the
      creation of any Lien under or require any payment to be made under, (i) any
      Material Contract (other than the Existing Loan Agreement) to which such Person
      is a party or affecting such Person or the properties of such Person or any
      of
      its Subsidiaries or (ii) any order, injunction, writ or decree of any
      Governmental Authority or any arbitral award to which such Person or its
      property is subject; or (c) violate any Law. 

     

    5.03
Governmental
      Authorization;
      Other Consents. Except as set forth in Schedule 5.03, no approval,
      consent, exemption, authorization, or other action by, or notice to, or filing
      with, any Governmental Authority or any other Person is necessary or required
      in
      connection with (a) the execution, delivery or performance by, or
      enforcement against, any Loan Party of this Agreement or any other Loan Document
      to which it is a party, (b) the grant by any Borrower of the Liens granted
      by it pursuant to the Collateral Documents, (c) the perfection or
      maintenance of the Liens created under the Collateral Documents (including
      the
      first priority nature thereof) or (d) the exercise by any Agent or any
      Lender of its rights under the Loan Documents or the remedies in respect of
      the
      Collateral pursuant to the Collateral Documents. 

     

    5.04
Binding
      Effect. This
      Agreement has been, and each other Loan Document, when delivered hereunder,
      will
      have been, duly executed and delivered by each Loan Party hereto or thereto.
      Each Loan Document to which Loan Party is a party, when so delivered,
      constitutes a legal, valid and binding obligation of such Person, enforceable
      against it in accordance with its terms, except as enforcement may be limited
      by
      equitable principles or by bankruptcy, insolvency, reorganization, moratorium
      or
      similar laws relating to or limiting creditors’ rights generally. 

     

    5.05
Financial
      Statements; No
      Material Adverse Effect. 

     

    (a)
      The Audited Financial Statements
      (i) were prepared in accordance with GAAP consistently applied throughout
      the period covered thereby, except as otherwise expressly noted therein;
      (ii) fairly present the financial condition of Parent and its Subsidiaries
      or ThermaClime and its Subsidiaries, as applicable, as of the date thereof
      and
      their results of operations for the period covered thereby in accordance with
      GAAP consistently applied throughout the period covered thereby, except as
      otherwise expressly noted therein; and (iii) show all material indebtedness
      and other liabilities, direct or contingent, of Parent and its Subsidiaries
      or
      ThermaClime and its Subsidiaries, as applicable, as of the date thereof,
      including liabilities for taxes, material commitments and Indebtedness.


     

    (b)
      The unaudited consolidated and
      consolidating financial statements consisting of a consolidating and
      consolidated balance sheet of each of Parent and its Subsidiaries and
      ThermaClime and its Subsidiaries, in each case dated as of June 30, 2007,
      and the related consolidated and consolidating statements of income or
      operations, consolidated statements of shareholders’ equity and consolidated
      statements of cash flows for the fiscal quarter ended on that date (i) were
      prepared in accordance with GAAP consistently applied throughout the period
      covered thereby, except as otherwise expressly noted therein, and (ii) fairly
      present the 

     

     

     

    -
      43 - 

     

    financial
      condition of Parent and
      its Subsidiaries or ThermaClime and its Subsidiaries, as applicable, as of
      the
      date thereof and their results of operations for the period covered thereby,
      subject, in the case of clauses (i) and (ii), to the absence
      of footnotes and to normal year-end audit adjustments. Schedule 5.05 sets
      forth all material indebtedness and other material liabilities, direct or
      contingent, of Borrowers as of the date of such financial statements, including
      liabilities for taxes and Indebtedness. 

     

    (c)
      Since the date of the Audited
      Financial Statements, there has been no event or circumstance, either
      individually or in the aggregate, that has had or could reasonably be expected
      to have a Material Adverse Effect. 

     

    (d)
      The consolidated and
      consolidating forecasted balance sheets, statements of income and consolidated
      cash flows of each of Parent and its Subsidiaries and ThermaClime and its
      Subsidiaries, in each case delivered pursuant to Section 4.01 or
Section 6.01(c) were prepared in good faith on the basis of the
      assumptions stated therein, which assumptions were fair in light of the
      conditions existing at the time of delivery of such forecasts, and represented,
      at the time of delivery, Parent’s or ThermaClime’s, as applicable, best good
      faith estimate of its future financial condition and performance. 

     

    5.06
Litigation.
      Except as
      set forth on Schedule 5.06 or the report filed by Parent with the SEC on
      Form 10-Q made on August 8, 2007, there are no actions, suits, proceedings,
      claims or disputes pending or, to the knowledge of Parent or any Borrower after
      due and diligent investigation, threatened or contemplated, at law, in equity,
      in arbitration or before any Governmental Authority, by or against Parent or
      any
      Borrower or against any of their properties or revenues that (a) purport to
      affect or pertain to this Agreement, any other Loan Document, any Related
      Document or the consummation of the Transaction, or (b) either individually
      or in the aggregate, if determined adversely, could reasonably be expected
      to
      have a Material Adverse Effect, except for matters that are fully covered by
      independent third-party insurance, subject to customary deductibles, as to
      which
      the insurer is rated at least “A” by A.M. Best Company, has been notified of the
      potential claim and does not dispute coverage. 

     

    5.07
No
      Default. No Loan
      Party is in default under or with respect to, or a party to, any Contractual
      Obligation (including, without limitation, obligations under the Revolving
      Credit Documents) that could, either individually or in the aggregate,
      reasonably be expected to have a Material Adverse Effect. No Default has
      occurred and is continuing or would result from the consummation of the
      transactions contemplated by this Agreement or any other Loan Document.


     

    5.08
Ownership
      of Property;
      Liens. 

     

    (a)
      Each Borrower and each of its
      Subsidiaries (other than Excluded Subsidiaries), has good record and marketable
      title in fee simple to, or valid leasehold interests in, all real property
      necessary or used in the ordinary conduct of its business, except for such
      defects in title as could not, individually or in the aggregate, reasonably
      be
      expected to have a Material Adverse Effect. The Collateral is subject to no
      Liens, other than Permitted Encumbrances. All of the Collateral is located
      on or
      at the Sites. All of the Cherokee Facility Collateral is located on or at the
      Cherokee Site and all of the El Dorado Facility Collateral is located on or
      at
      the El Dorado Site. 

     

     

     

    -
      44 - 

     

    (b)
      Without limiting the generality
      of the foregoing: (i) Cherokee has good and marketable record title in fee
      simple to the Collateral consisting of real property (including the Cherokee
      Site and the improvements and fixtures thereon), subject only to Permitted
      Encumbrances; (ii) Cherokee and CNC have good and marketable title to all
      personal property located on the Cherokee Site or consisting of a part of the
      Collateral (other than (A) certain inventory owned by customers and certain
      rolling stock in each case composing Excluded Assets, (B) certain personal
      property owned by obligors under lease and use arrangements described at items
      2, 3, 4, 5 and 6 of Part I of Schedule 7.05 and which is located solely
      on the portion of the Cherokee Site subject to each such lease and use
      arrangement, (C) one (1) liquid nitrogen tank and two (2) air
      vaporizers leased by CNC and located on the Cherokee Site), subject only to
      Permitted Encumbrances or in the case of the Inventory, subject to the Liens
      in
      favor of the Revolving Agent; (iii) NFC has good and marketable record
      title in fee simple to the Collateral consisting of real property (including
      the
      El Dorado Site and the improvements and fixtures thereon), subject only to
      Permitted Encumbrances; (iv) NFC, EDCC and DSN have good and marketable
      title to all personal property located on the El Dorado Site or consisting
      of a
      part of the Collateral (other than (A) certain inventory owned by customers
      and certain rolling stock in each case composing Excluded Assets,
      (B) certain personal property owned by obligors under lease and use
      arrangements described at item 4 of Part II of Schedule 7.05 and which is
      located solely on the portion of the El Dorado Site subject to each such lease
      and use arrangement and (C) certain mobile air compressors and one
      (1) spectrometer and related accessories leased by EDC and located on the
      El Dorado Site), subject only to Permitted Encumbrances or in the case of the
      Inventory, subject to the Liens in favor of the Revolving Agent provided
      however, that with respect to clauses (ii) and (iv) of
      this Section 5.08(b), also excluding office equipment and
      accessories to operating equipment which if removed would not adversely affect
      the use, value or useful life of the Collateral, which are owned by third
      parties, leased to or used by a Borrower listed in this
Section 5.08(a) and which individually has an original cost and
      replacement value less than $25,000 and all of which equipment and accessories
      collectively has an aggregate original cost and replacement value of not more
      than $500,000.00. 

     

    5.09
Environmental
      Compliance. Each Borrower has taken all required steps to investigate the
      past and present condition and usage of each of the Facility Assets and the
      operations conducted thereon and, based upon such investigation, has determined
      that: 

     

    (a)
      except as disclosed in
Schedule 5.09, none of the Borrowers, any of their respective
      Subsidiaries (other than the Excluded Subsidiaries), any current operator of
      any
      Facility Assets or any current operations thereon is in violation, or alleged
      violation, of any Environmental Laws, which violation could reasonably be
      expected to have a Material Adverse Effect; 

     

    (b)
      except as disclosed in
Schedule 5.09, none of the Borrowers or any of their respective
      Subsidiaries (other than the Excluded Subsidiaries) has received notice from
      any
      third party including any Federal, state or local Governmental Authority,
      (i) that any one of them has been identified by the United States
      Environmental Protection Agency (“EPA”) or any other Governmental
      Authority as a potentially responsible party under the Comprehensive
      Environmental Response, Compensation and Liability Act of 

     

     

     

    -
      45 - 

     

    1980
      as amended with respect to a
      site listed on the National Priorities List, 40 C.F.R. Part 300 Appendix B
      (1986) or any other Environmental Law; (ii) that any hazardous waste,
      as defined by 42 U.S.C. §9601(5), any hazardous substances as defined by 42
      U.S.C. §9601(14), any pollutant or contaminant as defined by 42 U.S.C. §9601(33)
      or any Hazardous Materials, which any one of them has generated, transported
      or
      disposed of has been found at any site at which a federal, state or local agency
      or other third party has conducted or has ordered any Borrower or any of its
      Subsidiaries (other than the Excluded Subsidiaries), as applicable, to conduct
      a
      Hazardous Materials site assessment, remedial investigation, removal or other
      response action pursuant to any Environmental Law; or (iii) that it is,
      shall or may be named as a party to any claim, action, cause of action,
      complaint, or legal or administrative proceeding (in each case, contingent
      or
      otherwise) arising out of any third party’s incurrence of costs, expenses,
      losses or damages of any kind whatsoever in connection with the release or
      presence of Hazardous Materials; 

     

    (c)
      except as disclosed in
Schedule 5.09, (A) no portion of the Cherokee Site or the El Dorado
      Site has been used for the handling, processing, storage or disposal of
      Hazardous Materials except in accordance with applicable Environmental Laws;
      and
      no underground tank or other underground storage receptacle for Hazardous
      Materials is located on any portion of the Cherokee Site or the El Dorado Site;
      (B) in the course of any activities conducted by any Borrower, its
      Subsidiaries (other than the Excluded Subsidiaries) or operators of its
      properties, no Hazardous Materials have been generated or are being used on
      the
      Cherokee Site or the El Dorado Site except in accordance with applicable
      Environmental Laws; (C) except as disclosed in Schedule 5.09, there
      have been no releases (i.e. any past or present releasing, spilling, leaking,
      pumping, pouring, emitting, emptying, discharging, injecting, escaping,
      disposing or dumping) or threatened releases of Hazardous Materials on, upon,
      into or from any Facility Assets, which releases could reasonably be expected
      to
      have a Material Adverse Effect or which would adversely effect any adjacent
      property, human health or the environment; (D) to each Borrower’s
      knowledge, there have been no releases on, upon, from or into any real property
      in the vicinity of any portion of the Cherokee Site or the El Dorado Site which,
      through soil or groundwater migration, may have come to be located thereon,
      and
      which could reasonably be expected to have a Material Adverse Effect; and
      (E) in addition, to each Borrower’s knowledge, any Hazardous Materials that
      have been generated on any portion of the Cherokee Site or the El Dorado Site
      have been transported offsite only by carriers having an identification number
      issued by the EPA or another Governmental Authority, treated or disposed of
      only
      by treatment or disposal facilities maintaining valid permits as required under
      applicable Environmental Laws, which transporters and facilities have been
      and
      are, to each Borrower’s knowledge, operating in compliance with such permits and
      applicable Environmental Laws; and 

     

    (d)
      none of the Borrowers, their
      respective Subsidiaries (other than the Excluded Subsidiaries), or any portion
      of the Cherokee Site or the El Dorado Site is subject to any applicable
      Environmental Law requiring the performance of Hazardous Materials site
      assessments, or the removal or remediation of Hazardous Materials, or the giving
      of notice to any Governmental Authority or the recording or delivery to other
      Persons of an environmental disclosure document or statement by virtue of the
      transactions set forth herein and contemplated hereby, or as a condition to
      the
      effectiveness of any other transactions contemplated hereby. 

     

     

     

    -
      46 - 

     

    5.10
Insurance.
      The
      properties of each Borrower and each of its Subsidiaries (other than the
      Excluded Subsidiaries) are insured with financially sound and reputable
      insurance companies not Affiliates of any Borrower, in such amounts, with such
      deductibles and covering such risks as are customarily carried by companies
      engaged in similar business and owning similar properties in localities where
      such Borrower and its Subsidiaries (other than the Excluded Subsidiaries)
      operate. 

     

    5.11
Taxes.
      Borrowers, their
      Subsidiaries (other than the Excluded Subsidiaries) and Parent have filed all
      Federal, state and other material tax returns and reports required to be filed,
      and have paid all Federal, state and other material taxes, assessments, fees
      and
      other governmental charges levied or imposed upon them or their properties,
      income or assets otherwise due and payable, except those which are subject
      to a
      Permitted Protest. There is no proposed tax assessment against any Borrower
      or
      any of its Subsidiaries (other than the Excluded Subsidiaries) that would,
      if
      made, have a Material Adverse Effect. 

     

    5.12
ERISA
      Compliance.


     

    (a)
      Each Plan is in compliance in
      all material respects with the applicable provisions of ERISA, the Code and
      other Federal or state Laws. Each Plan that is intended to qualify under
      Section 401(a) of the Code has received a favorable determination letter
      from the IRS or an application for such a letter is currently being processed
      by
      the IRS with respect thereto and, to the knowledge of Parent and each Borrower,
      nothing has occurred which would prevent, or cause the loss of, such
      qualification. Parent and each ERISA Affiliate have made all required
      contributions to each Plan subject to Section 412 of the Code, and no
      application for a funding waiver or an extension of any amortization period
      pursuant to Section 412 of the Code has been made with respect to any Plan.


     

    (b)
      There are no pending or, to the
      knowledge of Parent and each Borrower, threatened claims, actions or lawsuits,
      or action by any Governmental Authority, with respect to any Plan that could
      be
      reasonably be expected to have a Material Adverse Effect. There has been no
      prohibited transaction or violation of the fiduciary responsibility rules with
      respect to any Plan that has resulted or could reasonably be expected to result
      in a Material Adverse Effect. 

     

    (c)
      (i) No ERISA Event has occurred
      or is reasonably expected to occur; (ii) no Pension Plan has any Unfunded
      Pension Liability; (iii) neither Parent nor any ERISA Affiliate has
      incurred, or reasonably expects to incur, any liability under Title IV of ERISA
      with respect to any Pension Plan (other than premiums due and not delinquent
      under Section 4007 of ERISA); (iv) neither Parent nor any ERISA
      Affiliate has incurred, or reasonably expects to incur, any liability (and
      no
      event has occurred which, with the giving of notice under Section 4219 of
      ERISA, would result in such liability) under Sections 4201 or 4243 of ERISA
      with
      respect to a Multiemployer Plan; and (v) neither Parent nor any ERISA
      Affiliate has engaged in a transaction that could be subject to Sections 4069
      or
      4212(c) of ERISA. 

     

    5.13
Subsidiaries.
      Parent has
      no Subsidiaries other than those specifically disclosed in Part (a) of
Schedule 5.13 and has no equity investments in any other corporation or
      entity other than those specifically disclosed in Part (b) of Schedule
      5.13. Each Borrower is a wholly-owned Subsidiary of Parent, and each such
      Borrower is identified in Part (a) of Schedule 5.13. All of the


     

     

     

    -
      47 - 

     

    outstanding
      Equity Interest in each
      of the Borrowers have been validly issued, are fully paid and non-assessable
      and
      are owned by the owners and in the amounts specified in Part (c) of
Schedule 5.13 free and clear of all Liens. 

     

    5.14
Margin
      Regulations;
      Investment Company Act. 

     

    (a)
      No Borrower is engaged or will
      engage, principally or as one of its important activities, in the business
      of
      purchasing or carrying margin stock (within the meaning of Regulation U issued
      by the FRB), or extending credit for the purpose of purchasing or carrying
      margin stock. 

     

    (b)
      None of the Borrowers, any
      Person Controlling any Borrower, or any Subsidiary thereof is or is required
      to
      be registered as an “investment company” under the Investment Company Act of
      1940. 

     

    5.15
Disclosure.
      Each Loan
      Party has disclosed to the Agents and the Lenders all material agreements,
      instruments and corporate or other restrictions to which it or, in the case
      of
      each Borrower, any of its Subsidiaries (other than the Excluded Subsidiaries)
      is
      subject, and all other matters known to it, that could reasonably be expected
      to
      result in a Material Adverse Effect; provided that the Loan Parties have
      not been required to provide information regarding general market, economic
      and
      industry conditions. No report, financial statement, certificate or other
      information (taken together as a whole) furnished (whether in writing or orally)
      by or on behalf of any Loan Party to any Agent or any Lender in connection
      with
      the transactions contemplated hereby and the negotiation of this Agreement
      or
      delivered hereunder (as modified or supplemented by other information so
      furnished) contains any material misstatement of fact or omits to state any
      material fact necessary to make the statements therein, in the light of the
      circumstances under which they were made, not misleading; provided that,
      with respect to projected financial information, each Loan Party represents
      only
      that such information was prepared in good faith based upon assumptions believed
      to be reasonable at the time. 

     

    5.16
Compliance
      with Laws.
      Each Loan Party is in compliance in all material respects with the requirements
      of all Laws (including, without limitation, the Act) and all orders, writs,
      injunctions and decrees applicable to it or to its properties except in such
      instances in which (a) such requirement of Law or order, writ, injunction
      or decree is subject to a Permitted Protest or (b) the failure to comply
      therewith, either individually or in the aggregate, could not reasonably be
      expected to have a Material Adverse Effect. 

     

    5.17
Intellectual
      Property;
      Licenses, Etc. Each Borrower and each of its Subsidiaries (other than the
      Excluded Subsidiaries) owns, or possesses the right to use, all of the
      trademarks, service marks, trade names, copyrights, patents, patent rights,
      franchises, licenses and other intellectual property rights (collectively,
      “IP Rights”) that are reasonably necessary for the operation of their
      respective businesses, without conflict with the rights of any other Person,
      which IP Rights are described in Schedule 5.18. Except as specifically
      disclosed in Schedule 5.18, to the knowledge of Borrowers, no IP Rights
      of any Borrower or its Subsidiaries (other than Excluded Subsidiaries) infringes
      in any material respect upon any rights held by any other Person. Except as
      specifically disclosed in Schedule 5.18, no claim or litigation regarding
      any of the foregoing is pending or, to the knowledge of any Borrower,
      threatened, which, either individually or in the aggregate, could reasonably
      be
      expected to have a Material Adverse Effect. 

     

     

     

    -
      48 - 

     

    5.18
Solvency.
      Immediately
      prior to and following the Closing Date and the Borrowing Date, each Loan Party
      is, individually and together with its Subsidiaries on a consolidated basis,
      and
      the Borrowers taken as a whole are, Solvent. 

     

    5.19
Casualty,
      Etc. Neither
      the businesses nor the properties of any Borrower or any of its Subsidiaries
      (other than the Excluded Subsidiaries) are affected by any fire, explosion,
      accident, strike, lockout or other labor dispute, drought, storm, hail,
      earthquake, embargo, act of God or of the public enemy or other casualty
      (whether or not covered by insurance) that, either individually or in the
      aggregate, could reasonably be expected to have a Material Adverse Effect.
      

     

    5.20
Perfection
      of Security
      Interest; Filings. 

     

    (a)
      (i) The Cherokee Mortgage when
      recorded will constitute an enforceable, first priority lien of record and
      perfected security interest of record in Cherokee’s interest in the Cherokee
      Facility Collateral set forth therein consisting of real property (including
      fixtures) in favor of the Collateral Agent, and (ii) the Security Agreement
      constitutes an enforceable, and upon the filing of effective financing
      statements pursuant to the requirements of the UCC, and, solely with respect
      to
      the portion of the Collateral consisting of trademarks, the filing of a
      Trademark Security Agreement with the U.S. Patent and Trademark Office, first
      priority lien of record and perfected security interest of record in each
      Borrower’s interest, if any, in the Cherokee Facility Collateral consisting of
      personal property set forth therein in favor of the Collateral Agent, in each
      case subject to Permitted Encumbrances, as against all Persons, including
      Cherokee and its creditors. Except for the filings and recordings listed in
      Schedule 4.01(a)(iii) (which filings or recordings, or arrangements
      therefor meeting the requirements specified herein, shall have been duly made
      on
      or before the Closing Date (including the payment of any fees or taxes relating
      to any of the foregoing)), no other filings or recordings are necessary to
      create in favor of the Collateral Agent a valid and enforceable first priority
      Lien for the benefit of the Lenders on the Cherokee Facility Collateral free
      and
      clear of all other Liens, other than Permitted Encumbrances. 

     

    (b)
      (i) The El Dorado Mortgage when
      recorded will constitute an enforceable, first priority lien of record and
      perfected security interest of record in NFC’s interest in the El Dorado
      Facility Collateral set forth therein consisting of real property (including
      fixtures) in favor of the Collateral Agent, and (ii) the Security Agreement
      constitutes an enforceable, and upon the filing of effective financing
      statements pursuant to the requirements of the UCC and, solely with respect
      to
      the portion of the Collateral consisting of trademarks, the filing of a
      Trademark Security Agreement with the United States Patent and Trademark Office,
      first priority lien of record and perfected security interest of record in
      each
      Borrower’s interest, if any, in the El Dorado Facility Collateral consisting of
      personal property set forth therein in favor of the Collateral Agent, in each
      case subject to Permitted Encumbrances, as against all Persons, including NFC
      and its creditors. Except for the filings and recordings listed in Schedule
      4.01(a)(iii) (which filings or recordings, or arrangements therefor meeting
      the requirements specified herein, shall have been duly made on or before the
      Closing Date (including the payment of any fees or taxes relating to any of
      the
      foregoing)), no other filings or recordings are necessary to 

     

     

     

    -
      49 - 

     

    create
      in favor of the Collateral
      Agent a valid and enforceable first priority Lien for the benefit of the Lenders
      on the El Dorado Facility Collateral free and clear of all other Liens, other
      Permitted Encumbrances. 

     

    (c)
      Except for the filings and
      recordings listed in Schedule 4.01(a)(iii) (which filings or recordings,
      or arrangements therefor meeting the requirements specified herein, shall have
      been duly made on or before the Closing Date (including the payment of any
      fees
      or taxes relating to any of the foregoing)), no other filings or recordings
      are
      necessary to create in favor of the Collateral Agent a valid and enforceable
      first priority Lien for the benefit of the Lenders on the Cherokee Facility
      Collateral and the El Dorado Facility Collateral free and clear of all other
      Liens, other Permitted Encumbrances. 

     

    (d)
      None of the Borrowers nor any of
      Affiliates of a Borrower has created, consented to, incurred or suffered to
      exist any Lien upon the Collateral, other than Permitted Encumbrances.


     

    5.21
Services,
      Materials,
      Property Interests and Other Rights. Other than with respect to services,
      materials, property interests or other rights which are routinely obtainable
      in
      the ordinary course of business, the Material Contracts and the Support Rights
      and Interests comprise all of the services, materials and property interests
      and
      other rights material to the operation and maintenance of the Facility Assets
      and the Facility Business as currently being operated. Schedule 5.21 sets
      forth an accurate list of all utility, ammonia and natural gas pipelines and
      all
      other pipelines that enter the Sites from adjacent properties, in each case
      relating to, and utilized or expected to be utilized in, the Facility Business
      of the Borrowers at the Cherokee Site, the El Dorado Site or relating to the
      Facility Assets. 

     

    5.22
Material
      Contracts.
Schedule 5.22 sets forth an accurate list of all of the Material
      Contracts. There exists no event of default, material default or material breach
      in the performance of any covenant, agreement, obligation or condition to be
      performed by any Borrower or any other party thereto under any Material
      Contract, and there are no allegations of any existing default by any Borrower
      (or, to such Borrower’s knowledge, by any other party thereto) under any
      Material Contract. None of the Material Contracts has been amended, supplemented
      or otherwise modified in any material respect except as disclosed by the
      Borrowers to the Payment Agent in writing on the Closing Date, and all of the
      Material Contracts are in full force and effect. To each Borrower’s knowledge,
      no event of force majeure or other event or condition has occurred which permits
      or requires any party to any of the Material Contracts to cancel, suspend or
      terminate its performance of such Material Contract or which could excuse any
      such party from liability for nonperformance. The technology and “Technical
      Information” (as that term is defined in the KT Agreement) which is granted to
      and licensed to EDCC under the KT Agreement is neither used by Borrowers or
      necessary for the production of ammonia nitrate as currently produced by
      Borrowers or for the ownership, use or operation of the Facility Assets or
      to
      conduct the Facility Business as presently conducted. A successor owner of
      the
      Facility Assets with respect to the El Dorado Site would not need the rights
      licensed under the KT Agreement in order to produce ammonia nitrate as currently
      produced by Borrowers at the El Dorado Site. 

     

     

     

    -
      50 - 

     

    5.23
Permits.
      Schedule 5.23 sets forth a complete listing of all Permits (other
      than general business, occupancy and building permits) necessary for each
      Borrower to conduct the Facility Business as it is currently being conducted.
      No
      Permits are required to be held by Borrower or in connection with the Facility
      Business for the treatment, storage or disposal of Hazardous Materials. Except
      for the Permits listed in Schedule 5.23 and general business, occupancy and
      building permits, no other Permits are necessary for the ownership, use or
      operation of the Facility Assets or to conduct the Facility Business as
      presently conducted. 

     

    5.24
Zoning.
      The current and
      anticipated use of each of the Cherokee Site and the El Dorado Site complies
      with all applicable zoning ordinances, regulations and restrictive covenants
      affecting the Cherokee Site and the El Dorado Site, as applicable, without
      the
      existence of any variance, non-complying use, nonconforming use or other special
      exception, all use restrictions of any Governmental Authority having
      jurisdiction have been satisfied, and no violation of any Laws exists with
      respect thereto other than those that individually and in the aggregate could
      not reasonably be expected to have a Material Adverse Effect. 

     

    5.25
Separate
      Tax Lot.
      Neither the Cherokee Site nor the El Dorado Site is part of a larger tract
      of
      land owned by any Borrower or any of its Affiliates nor is it otherwise included
      under any unity of title or similar covenant with other lands not encumbered
      by
      the Cherokee Mortgage or the El Dorado Mortgage. 

     

    5.26
Utilities.
      All utility
      services necessary for the operation of the Facility Assets as presently
      conducted are available at the boundaries of each of the Cherokee Site and
      the
      El Dorado Site, as applicable, including electric and natural gas facilities,
      telephone service, water supply, storm and sanitary sewer facilities.


     

    5.27
Labor
      Matters. Except as
      set forth in Schedule 5.27, there are no collective bargaining agreements
      or Multiemployer Plans covering the employees of the Borrowers or any of their
      Subsidiaries (other than the Excluded Subsidiaries) as of the Closing Date
      and
      none of the Borrowers nor any of their Subsidiaries (other than the Excluded
      Subsidiaries) has suffered any strikes, walkouts, work stoppages or other
      material labor difficulty within the last five years. 

     

    5.28
Collateral.
      The
      Collateral includes all tangible and intangible assets, Permits, Material
      Contracts, and all other Support Rights and Interests, other than the Excluded
      Assets, necessary to operate and maintain the Facility Assets as they are
      currently operated and maintained. 

     

    5.29
Performance
      of This
      Agreement. The proceeds of the Term Loans on the Closing Date are not being
      distributed to any Borrower into any deposit account located in either Alabama
      or Arkansas. None of the Loan Documents have been executed or will be executed
      by any Loan Party in either Alabama or Arkansas. 

     

    ARTICLE
      VI.


     

    AFFIRMATIVE
      COVENANTS


     

    So
      long as any Term Loan or other
      Obligation hereunder shall remain unpaid or unsatisfied, each Borrower shall,
      and shall (except in the case of the covenants set forth in Sections
      6.01, 6.02, 6.03 and 6.11) cause each Subsidiary (other
      than Excluded Subsidiaries) to, and solely in the case of Sections 6.01,
6.02, 6.03, 6.05(a), 6.08, 6.09 and
6.14, Parent shall: 

     

     

     

    -
      51 - 

     

    6.01
Financial
      Statements.
      Deliver to each Agent and each Lender, in form and detail satisfactory to Agents
      and the Required Lenders: 

     

    (a)
      as soon as available, but in any
      event within 90 days (or, if such person has filed a filing extension with
      the
      SEC, 105 days) after the end of each fiscal year of each of ThermaClime and
      Parent (commencing with the fiscal year ending December 31, 2007), a
      consolidated and consolidating balance sheet of each of ThermaClime and its
      Subsidiaries and Parent and its Subsidiaries as at the end of such fiscal year,
      and the related consolidated and consolidating statements of income or
      operations and statements of cash flows (such consolidating statements of cash
      flows to be prepared on a business grouping basis (as opposed to an individual
      company basis), consistent with prior practice of Parent and ThermaClime),
      and
      consolidated statements of shareholders’ equity for such fiscal year, setting
      forth in the case of the consolidated balance sheets, statements of income
      or
      operations and statements of cash flows in comparative form the figures for
      the
      previous fiscal year, all in reasonable detail and prepared in accordance with
      GAAP, such consolidated statements to be audited and accompanied by a report
      and
      opinion of Ernst & Young or any other independent certified public
      accountant of nationally recognized standing selected by Parent and ThermaClime,
      as applicable, and reasonably acceptable to the Required Lenders, which report
      and opinion shall be prepared in accordance with generally accepted auditing
      standards and shall not be subject to any qualification or exception as to
      the
      scope of such audit, and such consolidating statements to be certified by the
      chief executive officer, chief financial officer, treasurer or controller of
      ThermaClime or Parent, as applicable, to the effect that such statements are
      fairly stated in all material respects when considered in relation to the
      consolidated financial statements of ThermaClime and its Subsidiaries or Parent
      and its Subsidiaries, as applicable; 

     

    (b)
      as soon as available, but in any
      event within 45 days (or, if such Person has filed a filing extension with
      the
      SEC, 50 days) after the end of each of the first three fiscal quarters of each
      fiscal year of ThermaClime and Parent (commencing with the fiscal quarter ended
      September 30, 2007), unaudited statements consisting of a consolidated and
      consolidating balance sheet of each of ThermaClime and its Subsidiaries and
      Parent and its Subsidiaries, in each case as at the end of such fiscal quarter,
      and the related consolidated and consolidating statements of income or
      operations and statements of cash flows (such consolidating statements of cash
      flows to be prepared on a business grouping basis (as opposed to an individual
      company basis), consistent with prior practice of Parent and ThermaClime),
      and
      consolidated statements of shareholders’ equity for such fiscal quarter and for
      the portion of ThermaClime’s or Parent’s, as applicable, fiscal year then ended,
      setting forth in the case of the consolidated balance sheets, statements of
      income or operations and statements of cash flows in comparative form the
      figures for the corresponding fiscal quarter of the previous fiscal year and
      the
      corresponding portion of the previous fiscal year, all in reasonable detail,
      certified by the chief executive officer, chief financial officer, treasurer
      or
      controller of ThermaClime or Parent, as applicable, as fairly presenting in
      all
      material respects the financial condition, results of operations, shareholders’
equity and cash flows of ThermaClime and its Subsidiaries or Parent and its
      Subsidiaries, as applicable, in accordance with GAAP, subject only to normal
      year-end audit adjustments and the absence of footnotes; and 

     

     

     

    -
      52 - 

     

    (c)
      as soon as available, but in any
      event at least 1 day before the start of each fiscal year of ThermaClime and
      Parent, an annual business plan and budget of each of ThermaClime and its
      Subsidiaries and Parent and its Subsidiaries, in each case on a consolidated
      basis, including forecasts prepared by management of ThermaClime and Parent,
      as
      applicable, in form satisfactory to the Payment Agent and the Required Lenders,
      of consolidated balance sheets and statements of income or operations and cash
      flows of each of ThermaClime and its Subsidiaries and Parent and its
      Subsidiaries, in each case on a monthly basis for the immediately following
      fiscal year. 

     

    As
      to any information contained in
      materials furnished pursuant to Section 6.02(c), the Borrower shall
      not be separately required to furnish such information under
Section 6.01(a) or (b) above, but the foregoing shall
      not be in derogation of the obligation of the Borrower to furnish the
      information and materials described in Sections 6.01(a) and
(b) above at the times specified therein. 

     

    6.02
Certificates;
      Other
      Information. Deliver to each Agent and each Lender, in form and detail
      satisfactory to the Agents and the Required Lenders: 

     

    (a)
      concurrently with the delivery
      of the financial statements referred to in Section 6.01(a)
      (commencing with the delivery of the financial statements for the fiscal year
      ended December 31, 2007), a certificate of its independent certified public
      accountants certifying such financial statements and stating that in making
      the
      examination necessary therefor no knowledge was obtained of any continuing
      Default under the financial covenants set forth in Section 7.11 or,
      if any such continuing Default shall exist, stating the nature and status of
      such event; 

     

    (b)
      concurrently with the delivery
      of the financial statements referred to in Sections 6.01(a) and
(b) (commencing with the delivery of the financial statements for
      the fiscal quarter ended September 30, 2007), a duly completed Compliance
      Certificate signed by the chief executive officer, chief financial officer,
      treasurer or controller of each of ThermaClime and Parent; 

     

    (c)
      promptly after any request by
      the Payment Agent or any Lender, copies of any detailed audit reports,
      management letters or recommendations submitted to the board of directors (or
      the audit committee of the board of directors) of any Loan Party by independent
      accountants in connection with the accounts or books of any Loan Party, or
      any
      audit of any of them; 

     

    (d)
      promptly after the same are
      available, copies of each annual report, proxy or financial statement or other
      report or communication sent to the stockholders of Parent, and copies of all
      annual, regular, periodic and special reports and registration statements which
      ThermaClime or Parent may file or be required to file with the SEC under
      Section 13 or 15(d) of the Securities Exchange Act of 1934, or with any
      national securities exchange, and in any case not otherwise required to be
      delivered to the Payment Agent pursuant hereto; 

     

    (e)
      promptly after the furnishing
      thereof, copies of any notices of defaults that have not been waived or cured
      in
      accordance with the terms of those agreements or proposed prepayments in
      connection with the termination or final payment in full of the 

     

     

     

    -
      53 - 

     

    associated
      debt facility delivered
      to the Revolving Agent (or any holder of Indebtedness under the Revolving Credit
      Documents) or any holder of other Indebtedness of any Loan Party with an
      aggregate principal amount greater than $5,000,000 pursuant to the terms of
      any
      indenture, loan or credit or similar agreement and not otherwise required to
      be
      furnished to the Lenders pursuant to Section 6.01 or any other
      clause of this Section 6.02; 

     

    (f)
      promptly, and in any event
      within five Business Days after receipt thereof by any Loan Party or any
      Subsidiary thereof, copies of each notice or other correspondence received
      from
      the SEC (or comparable agency in any applicable non-U.S. jurisdiction)
      concerning any investigation or possible investigation or other inquiry by
      such
      agency regarding financial or other operational results of any Loan Party or
      any
      Subsidiary thereof; 

     

    (g)
      not later than five Business
      Days after receipt thereof by any Loan Party, copies of all notices, requests
      and other documents (including amendments, waivers and other modifications)
      so
      received under or pursuant to the Revolving Credit Documents or and other
      instrument, indenture, loan or credit or similar agreement involving
      Indebtedness in an amount greater than $5,000,000 regarding or related to any
      breach or default that has not been waived or cured prior to such date by any
      party thereto or any other event that could reasonably be expected to result
      in
      a Material Adverse Effect and, from time to time upon request by the Payment
      Agent, such information and reports regarding such instruments, indentures
      and
      loan and credit and similar agreements as Payment Agent may reasonably request;
      

     

    (h)
      promptly after the assertion or
      occurrence thereof, notice of any action or proceeding against or of any
      noncompliance by any Borrower or any of its Subsidiaries (other than the
      Excluded Subsidiaries) with any Environmental Law or Environmental Permit that
      could reasonably be expected to (i) have a Material Adverse Effect or
      (ii) cause any property described in the Mortgages to be subject to any
      restrictions on ownership, occupancy, use or transferability under any
      Environmental Law; 

     

    (i)
      promptly, such additional
      information regarding the business, financial, legal or corporate affairs of
      any
      Loan Party, or compliance with the terms of the Loan Documents, as any Agent
      or
      any Lender may from time to time reasonably request. 

     

    Documents
      required to be delivered
      pursuant to Section 6.01(a) or (b) or
Section 6.02(d) (to the extent any such documents are included in
      materials otherwise filed with the SEC) may be delivered electronically and
      if
      so delivered, shall be deemed to have been delivered on the date (i) on
      which ThermaClime or Parent posts such documents, or provides a link thereto
      on
      ThermaClime’s or Parent’s website on the Internet at the website address listed
      on Schedule 11.02; or (ii) on which such documents are posted on the
      Borrowers’ behalf on an Internet or intranet website, if any, to which each
      Lender and each Agent have access (whether a commercial, third-party website
      or
      whether sponsored by any Agent); provided that: (i) the Borrowers
      shall deliver paper copies of such documents to any Agent or any Lender that
      requests the Borrowers to deliver such paper copies until a written request
      to
      cease delivering paper copies is given by such Agent or such Lender and
      (ii) the Borrowers shall notify each Agent and each Lender (by telecopier
      or electronic mail) of the posting of any such documents and provide to the
      Payment Agent by electronic mail electronic versions (i.e., soft copies)
      of such documents. Notwithstanding anything contained herein, in every instance
      the Borrowers shall be 

     

     

     

    -
      54 - 

     

    required
      to provide paper copies of
      the Compliance Certificates required by Section 6.02(b) to the
      Payment Agent. Except for such Compliance Certificates, the Payment Agent shall
      have no obligation to request the delivery or to maintain copies of the
      documents referred to above, and in any event shall have no responsibility
      to
      monitor compliance by the Borrowers with any such request for delivery, and
      each
      Lender shall be solely responsible for requesting delivery to it or maintaining
      its copies of such documents. 

     

    Each
      Borrower and Parent hereby
      acknowledges that the Agents and/or the Arranger will make available to the
      Lenders materials and/or information provided by or on behalf of Parent or
      the
      Borrowers hereunder (collectively, “Borrower Materials”) by posting the
      Borrower Materials on IntraLinks or another similar electronic system (the
      “Platform”). 

     

    6.03
Notices.
      Promptly upon a
      Responsible Officer of any Loan Party becoming aware, notify each Agent and
      each
      Lender: 

     

    (a)
      of the occurrence of any
      Default; 

     

    (b)
      of any matter that has resulted
      or could reasonably be expected to result in a Material Adverse Effect,
      including (i) breach or non-performance of, or any existing default under,
      a Contractual Obligation of any Borrower or any Subsidiary (other than the
      Excluded Subsidiaries); (ii) any dispute, litigation, investigation,
      proceeding or suspension between any Borrower or any Subsidiary (other than
      the
      Excluded Subsidiaries) and any Governmental Authority; or (iii) the
      commencement of, or any material development in, any litigation or proceeding
      affecting any Borrower or any Subsidiary (other than the Excluded Subsidiaries),
      including pursuant to any applicable Environmental Laws; 

     

    (c)
      of the occurrence of any ERISA
      Event; and 

     

    (d)
      of any material change in
      accounting policies or financial reporting practices by any Loan Party except
      for changes made pursuant to GAAP. 

     

    Each
      notice pursuant to
Section 6.03 shall be accompanied by a statement of a Responsible
      Officer of ThermaClime setting forth details of the occurrence referred to
      therein and stating what action the Borrowers have taken and propose to take
      with respect thereto. Each notice pursuant to Section 6.03(a) shall
      describe with particularity any and all provisions of this Agreement and any
      other Loan Document that have been breached. 

     

    6.04
Payment
      of Obligations.
      Pay and discharge as the same shall become due and payable, or before
      delinquency or, in the case of clause (c) below, on or before the
      expiration of any grace period therefore, all its material obligations and
      liabilities, including (a) all tax liabilities, assessments and
      governmental charges or levies upon it or its properties or assets, unless
      the
      same are subject to a Permitted Protest; (b) all lawful claims which, if
      unpaid, would by law become a Lien upon its property, unless the same is subject
      to a Permitted Protest; and (c) all material Indebtedness (or in the case
      of trade payables, other than those with respect to any Assigned Agreement,
      incurred in the ordinary course of business, in accordance with customary and
      ordinary practices), but subject to any subordination provisions contained
      in
      any instrument or agreement evidencing such Indebtedness. 

     

     

     

    -
      55 - 

     

    6.05
Preservation
      of Existence,
      Etc. (a) Preserve, renew and maintain in full force and effect its
      legal existence and good standing under the Laws of the jurisdiction of its
      organization except in a transaction permitted by Section 7.04 or
7.05; (b) take all reasonable action to maintain all rights,
      privileges, permits, licenses and franchises necessary or desirable in the
      normal conduct of its business, except to the extent that failure to do so
      could
      not reasonably be expected to have a Material Adverse Effect; and
      (c) preserve or renew all of its registered patents, trademarks, trade
      names and service marks, the non-preservation of which could reasonably be
      expected to have a Material Adverse Effect. 

     

    6.06
Maintenance
      of Properties;
      Collateral. (a) Maintain, preserve and protect all of its material
      properties and equipment necessary in the operation of its business or which
      constitute Collateral in good working order and condition, ordinary wear and
      tear excepted; (b) make all necessary repairs thereto and renewals and
      replacements thereof except where the failure to do so could not reasonably
      be
      expected to have a Material Adverse Effect; (c) use the standard of care
      typical in the industry in the operation and maintenance of its facilities
      including the Facility Assets except where the failure to do so could not
      reasonably be expected to have a Material Adverse Effect; (d) have full
      power and lawful authority to encumber such Borrower’s interests in the
      Collateral pursuant to the terms of the Collateral Documents; (e) protect
      or cause to be protected the title to the Facility Assets and all other
      Collateral, the status of each of the Cherokee Mortgage and the El Dorado
      Mortgage as a perfected lien on and security interest in the Facility Assets
      and
      such other Collateral; and (f) forever warrant and defend the same against
      any other claims of any persons or parties whomsoever. 

     

    6.07
Maintenance
      of
      Insurance. 

     

    (a)
      Maintain with financially sound
      and reputable insurance companies not Affiliates of the Borrower, insurance
      with
      respect to its properties and business against loss or damage of the kinds
      customarily insured against by Persons engaged in the same or similar business,
      of such types and in such amounts as are customarily carried under similar
      circumstances by such other Persons and providing for not less than 30 days’
prior notice to the Payment Agent of termination, lapse or cancellation of
      such
      insurance. 

     

    (b)
      Without limiting the generality
      of the foregoing, the Borrowers shall maintain the following insurance with
      respect to the Facility Assets: 

     

    (i)
      Special form property damage
      insurance, with a policy limit in an amount not less than the currently insured
      value of the Facility Assets and any other tenant improvements (if any). Each
      policy evidencing such coverage shall include (i) a lender’s loss payable
      endorsement (438 BFU, or its equivalent) in favor of the Collateral Agent for
      the benefit of each of the Secured Parties as loss payee, and (ii) any
      other similar endorsements reasonably required by the Payment Agent.


     

     

     

    -
      56 - 

     

    (ii)
      Commercial general liability
      coverage (including “umbrella” liability coverage) with such limits as the
      Payment Agent may reasonably require. The policy evidencing such coverage shall
      name each of the Agents and the Lenders as additional insured. Coverage shall
      be
      written on an occurrence (not a claims made) basis. 

     

    (iii)
      Flood insurance as the Payment
      Agent may reasonably require in the future, if any portion of the improvements
      with respect to the Facility Assets are situated or become situated in an area
      then designated as “flood prone,” “within a flood plain” or similar designation
      under federal or state law. 

     

    (c)
      All policies of insurance
      required by the Payment Agent shall be issued by companies reasonably acceptable
      to the Payment Agent and shall otherwise be reasonably acceptable to the Payment
      Agent as to minimum amounts, forms, risk coverages, reinsurance amounts,
      deductibles and loss payable and cancellation provisions; provided, that
      in no event shall (i) any such insurance company be rated less than “A” by
      AM Best Company or (ii) any such policy relating to the Collateral provide
      for any deductible amount in excess of $1,500,000. In addition, each policy
      must
      provide the Payment Agent at least thirty (30) days’ prior written notice
      of cancellation, non-renewal or modification. If, at least thirty (30) days
      before a required policy expires, the Payment Agent does not receive proof
      and
      evidence that a new policy has been issued and that premiums for it have been
      paid, then the Payment Agent may participate in all negotiations or other
      communication between the Borrowers and the insurance company and the Borrowers
      will use reasonable best efforts to cooperate with the Payment Agent to procure
      all required insurance hereunder prior to any existing policy expiration. If
      the
      Payment Agent does not receive proof and evidence that a new policy has been
      issued and that premiums for it have been paid ten (10) Business Days prior
      to the date a required policy expires, the Payment Agent may in its sole
      discretion procure a new policy and advance funds to pay the premiums for it.
      The Borrowers shall reimburse the Payment Agent, on demand, for any funds
      advanced by the Payment Agent to pay insurance premiums, which advances shall
      be
      considered to be additional loans to the Borrowers secured by the Cherokee
      Mortgage, the El Dorado Mortgage and the other Loan Documents and bearing
      interest at the interest rate for the term Loans then in effect hereunder.
      

     

    6.08
Compliance
      with Laws.
      Comply with (a) Laws and regulations wherever its business is conducted,
      except for noncompliance (i) that could not reasonably be expected to have
      a Material Adverse Effect or (ii) in connection with Permitted Protests and
      not resulting in any Event of Default hereunder, (b) the provisions of its
      charter documents and by-laws, (c) all agreements and instruments by which
      it or any of its properties may be bound and (d) all applicable decrees,
      orders, and judgments, except for, in the case of clauses (c) or
      (d) above, noncompliance (i) that could not reasonably be expected to
      have a Material Adverse Effect or (ii) in connection with Permitted
      Protests and not resulting in any Event of Default hereunder. If any
      authorization, consent, approval, permit or license from any officer, agency
      or
      instrumentality of any government shall become necessary or required in order
      that such Borrower or any of its Subsidiaries (other than the Excluded
      Subsidiaries) may fulfill any of its obligations hereunder or any of the other
      Loan Documents to which such Borrower or such Subsidiary is a party, such
      Borrower will, or (as the case may be) will cause such Subsidiary to,
      immediately take or cause to be taken all reasonable steps within the power
      of
      such Borrower or such Subsidiary to obtain such authorization, consent,
      approval, permit or license and if requested furnish the Agents and the Lenders
      with evidence thereof. 

     

     

     

    -
      57 - 

     

    6.09
Books
      and Records.
      (a) Maintain proper books of record and account, in which full, true and
      correct entries in conformity with GAAP consistently applied shall be made
      of
      all financial transactions and matters involving the assets and business of
      Parent, such Borrower or such Subsidiary, as the case may be; and
      (b) maintain such books of record and account in material conformity with
      all applicable requirements of any Governmental Authority having regulatory
      jurisdiction over Parent, such Borrower or such Subsidiary, as the case may
      be.


     

    6.10
Inspection
      Rights.
      Permit representatives and independent contractors of each Agent and each Lender
      to visit and inspect any of its properties, to examine its corporate, financial
      and operating records, and make copies thereof or abstracts therefrom, and
      to
      discuss its affairs, finances and accounts with its directors, officers, and
      independent public accountants, all at the expense of the Borrower and at such
      reasonable times during normal business hours and as often as may be reasonably
      desired, upon reasonable advance notice to the Borrower, but if no Event of
      Default has occurred and is continuing, Borrowers shall not be required to
      pay
      for more than one inspection per Lender during any twelve month period;
provided, however, that when an Event of Default exists any Agent
      or any Lender (or any of their respective representatives or independent
      contractors) may do any of the foregoing at the expense of the Borrower at
      any
      time during normal business hours and without advance notice. 

     

    6.11
Use
      of Proceeds. Use the
      proceeds of the Term Loans solely to repay in full the Debt outstanding under
      the Existing Loan Agreement. 

     

    6.12
Covenant
      to Guarantee
      Obligations. 

     

    (a)
      Upon the formation or
      acquisition of any new direct or indirect Subsidiary by ThermaClime (other
      than
      any Subsidiary that is a Subsidiary of EDN), then the Borrowers shall, at the
      Borrowers’ expense: 

     

    (i)
      within 10 days after such
      formation or acquisition, cause such Subsidiary to duly execute and deliver
      to
      the Payment Agent a guaranty or guaranty supplement, in form and substance
      satisfactory to the Payment Agent, guaranteeing the other Loan Parties’
obligations under the Loan Documents and agreeing to be bound by the provisions
      of Section 11.17 as if such Subsidiary were a Borrower hereunder, and


     

    (ii)
      within 10 days after such
      formation or acquisition, furnish to the Payment Agent a description of the
      real
      and personal properties of such Subsidiary, in detail satisfactory to the
      Payment Agent. 

     

    (b)
      At any time upon request of the
      Payment Agent, promptly execute and deliver any and all further instruments
      and
      documents and take all such other action as the Payment Agent may deem necessary
      or desirable in obtaining the full benefits of such guaranties. 

     

     

     

    -
      58 - 

     

    6.13
Compliance
      with
      Environmental Laws. Comply, and cause all lessees and other Persons
      operating or occupying its properties, including the Facility Assets, to comply,
      in all material respects, with all applicable Environmental Laws and
      Environmental Permits except for noncompliance that could not reasonably be
      expected to have a Material Adverse Effect; obtain and renew all Environmental
      Permits necessary for its operations and Facility Assets; and conduct any
      investigation, assessment, evaluation, report, study, sampling and testing,
      and
      undertake any cleanup, monitoring, removal, remedial or other action necessary
      to monitor, remove or clean up Hazardous Materials at or emanating from any
      of
      its Facility Assets, in accordance with the requirements of all Environmental
      Laws; provided, however, that neither any Borrower nor any of its
      Subsidiaries shall be required to undertake any such cleanup, removal, remedial
      or other action to the extent that its obligation to do so is subject to a
      Permitted Protest. Upon reasonable notice, at their sole cost and expense,
      Borrowers and its Subsidiaries shall perform any Hazardous Materials site
      assessment or other investigation of environmental conditions related to the
      Facility Assets, pursuant to any reasonable written request of Lenders
      (including sampling, testing and analysis of soil, water, air, building
      materials, and other materials and substances whether solid, liquid or gas),
      and
      share with Lenders the reports and other results thereof, and Lenders shall
      be
      entitled to rely on such reports and other results thereof; (a) Borrower
      and its Subsidiaries shall, at their sole cost and expense, comply with all
      reasonable written requests of Lenders to (i) comply in all material
      respects with any Environmental Law, (ii) comply with any directive from
      any Governmental Authority, and (iii) take any other reasonable action
      necessary or appropriate for protection of human health or the environment;
      (b) neither Borrower nor any of its Subsidiaries (other than the Excluded
      Subsidiaries) shall, and will use all commercially reasonable efforts to prevent
      any tenant or other user of the Facility Assets from doing any act that
      (i) materially increases the dangers to human health or the environment,
      poses an unreasonable risk of harm to any Person (whether on or off the Cherokee
      Site or the El Dorado Site), (ii) impairs or may impair the value of the
      Facility Assets, (iii) is contrary to any requirement of any insurer and
      could reasonably be expected to have a Material Adverse Effect,
      (iv) constitutes a public or private nuisance, constitutes waste and could
      reasonably be expected to have a Material Adverse Effect, or (v) violates
      any covenant, condition, agreement or easement applicable to the properties
      and
      could reasonably be expected to have a Material Adverse Effect. 

     

    6.14
Further
      Assurances.
      Promptly upon request by the Payment Agent, or any Lender through the Payment
      Agent, (a) correct any material defect or error that may be discovered in
      any Loan Document or in the execution, acknowledgment, filing or recordation
      thereof, and (b) do, execute, acknowledge, deliver, record, re-record,
      file, re-file, register and re-register any and all such further acts, deeds,
      certificates, assurances and other instruments as the Payment Agent, or any
      Lender through the Payment Agent, may reasonably require from time to time
      in
      order to (i) carry out more effectively the purposes of the Loan Documents,
      (ii) to the fullest extent permitted by applicable law, subject any
      Borrower’s or any of its Subsidiaries’ (other than the Excluded Subsidiaries’)
      properties, assets, rights or interests constituting Collateral or Facility
      Assets to the Liens covered by any of the Collateral Documents,
      (iii) perfect and maintain the validity, effectiveness and priority of any
      of the Collateral Documents and any of the Liens created thereunder and
      (iv) assure, convey, grant, assign, transfer, preserve, protect and confirm
      more effectively unto the Secured Parties the rights granted or now or hereafter
      intended to be granted to the Secured Parties under any Loan Document or under
      any other instrument executed in connection with any Loan Document to which
      any
      Loan Party or any Subsidiary of any Borrower (other than any Excluded
      Subsidiary) is or is to be a party, and cause each of Borrowers’ Subsidiaries
      (other than the Excluded Subsidiaries) to do so. 

     

     

     

    -
      59 - 

     

    6.15
Material
      Contracts. If
      any Borrower enters into any Material Contract after the Closing Date,
      ThermaClime shall deliver to the Payment Agent a true, correct and complete
      copy
      of such Material Contract (including all exhibits, schedules and annexes
      thereto) and (a) in the case of any Material Contract that constitutes the
      replacement of the On-Site Product Supply Agreement dated as of May 31,
      1994 between EDCC and Air Liquide America Corporation, as amended, or otherwise
      provides for the same or similar services, products or rights provided for
      under
      such agreement, such Material Contract shall be assignable to the Payment Agent
      on terms and conditions satisfactory to the Payment Agent, and promptly upon
      the
      request of the Payment Agent, ThermaClime shall deliver to the Payment Agent
      an
      Assignment and Consent executed by all parties to such replacement or same
      or
      similar Material Contract, or (b) in the case of any other Material
      Contract, including any Material Contract that constitutes the replacement
      of
      any Assigned Agreement other than the agreement referred to in clause
      (a) above, the Borrowers shall use commercially reasonably efforts to
      ensure that (i) such Material Contract is freely assignable to the
      Collateral Agent on terms and conditions satisfactory to the Payment Agent,
      and
      (ii) promptly upon the request of the Payment Agent, an Assignment and
      Consent executed by all parties to such other Material Contract is delivered
      to
      Payment Agent. 

     

    6.16
Copies
      of Certain
      Amendments. Promptly deliver to Payment Agent copies of all amendments or
      modifications to the Revolving Credit Documents, any material loan agreements
      involving Indebtedness in excess of $5,000,000, or other Material Contracts
      to
      which any Borrower is a party. 

     

    6.17
Incorporation
      of Future
      Financial/Negative Covenants. If the Borrowers shall at any time after the
      Closing Date amend, refinance, renew, replace, extend or otherwise modify the
      Revolving Credit Agreement, in the form and as in effect on the Closing Date,
      in
      a manner that requires the Borrowers to comply with any Financial/Negative
      Covenant (other than Sections 7.10, 7.19 and 7.20(a)(i) of the Revolving Credit
      Agreement as in effect on the Closing Date) that either is not at such time
      included in this Agreement or, if such Financial/Negative Covenant shall already
      be included in this Agreement, is more restrictive upon the Borrowers and their
      Subsidiaries (other than the Excluded Subsidiaries) than such existing
      Financial/Negative Covenant, each such Financial/Negative Covenant and each
      event of default, definition and other provision relating to such
      Financial/Negative Covenant in the Revolving Credit Agreement (other than the
      excluded Sections listed above) shall be deemed to be incorporated by reference
      in this Agreement, mutatis mutandis, as if then set forth herein in full.
      Promptly and in any event within five Business Days after any such incorporation
      by reference shall have first occurred with respect to each such
      Financial/Negative Covenant and without limiting the immediate effectiveness
      of
      such incorporation by reference, ThermaClime will furnish to the Payment Agent
      and each Lender a copy of such amendment or modification, certified to be true
      and correct by a Responsible Officer of the Company; and within 20 Business
      Days
      after such incorporation by reference the Loan Parties will execute and deliver
      to the Payment Agent an instrument, in form and substance reasonably
      satisfactory to the Required Lenders and the Loan Parties, modifying this
      Agreement by adding or modifying, as the case may be, the full text of such
      Financial/Negative Covenant and the related events of default, definitions
      and
      other provisions. The incorporation of any such Financial/Negative Covenant
      and
      other provisions into this Agreement as aforesaid in 

     

     

     

    -
      60 - 

     

    respect
      of the Revolving Credit
      Agreement shall automatically (without any action being taken by any Loan Party,
      any Agent or any Lender) take effect simultaneously with the effectiveness
      of
      the amendment refinancing, renewal, replacement, extension or other modification
      to the Revolving Credit Agreement. 

     

    6.18
Material
      Contracts.
      ThermaClime shall promptly notify the Payment Agent of any additional Material
      Contracts that arise and are used in or necessary to the conduct of the Facility
      Business after the Closing Date and the Borrowers shall execute and deliver
      any
      security documents necessary or appropriate to the creation of a Lien in favor
      of the Collateral Agent with respect to such additional Material Contracts
      as
      required under Section 6.15. 

     

    ARTICLE
      VII.


     

    NEGATIVE
      COVENANTS


     

    So
      long as any Term Loan or other
      Obligation hereunder shall remain unpaid or unsatisfied, no Borrower shall,
      nor
      shall it permit any Subsidiary (other than Excluded Subsidiaries) to, directly
      or indirectly, and solely in the case of Section 7.04, Parent shall
      not: 

     

    7.01
Liens.
      Create, incur,
      assume or suffer to exist any Lien upon any of its property, assets or revenues,
      whether now owned or hereafter acquired, or sign or file or suffer to exist
      (without prompt action to cause the release thereof) under the Uniform
      Commercial Code of any jurisdiction a financing statement (excluding
      precautionary UCC financing statement filings regarding assets, other than
      Collateral, relating to (i) operating leases entered into by any Borrower
      or any of its Subsidiaries provided such operating leases are not prohibited
      under the Loan Documents, (ii) consigned products or merchandise, or
      (iii) inventory or other goods owned by third parties and stored on the
      premises of any Borrower or any of its Subsidiaries), that names any Borrower
      or
      any of its Subsidiaries (other than the Excluded Subsidiaries) as debtor, other
      than the following: 

     

    (a)
      Permitted Encumbrances;


     

    (b)
      Liens existing on the date
      hereof and listed on Schedule 7.01(b) and any refinancings, renewals or
      extensions thereof with respect to Liens relating to Indebtedness permitted
      pursuant to Section 7.02(c)(i), provided that (i) the
      property covered thereby is not changed, (ii) the amount secured or
      benefited thereby is not increased except as contemplated by
Section 7.02(e), (iii) any renewal or extension of the
      obligations secured or benefited thereby is permitted by
Section 7.02(e) and (iv) no such Lien shall encumber any of the
      Collateral; 

     

    (c)
      pledges or deposits in the
      ordinary course of business in connection with workers’ compensation,
      unemployment insurance and other social security legislation, other than any
      Lien imposed by ERISA; provided that no such Liens encumber any of the
      Collateral; 

     

    (d)
      deposits to secure the
      performance of bids, trade contracts and leases (other than Indebtedness),
      statutory obligations, surety and appeal bonds, payment and performance bonds
      and other obligations of a like nature incurred in the ordinary course of
      business; provided that no such Liens encumber any of the Collateral;


     

     

     

    -
      61 - 

     

    (e)
      Liens securing judgments for the
      payment of money not constituting an Event of Default under
Section 8.01(h); provided that no such Liens encumber any of
      the Collateral; 

     

    (f)
      Liens securing Indebtedness
      permitted under Section 7.02(c)(ii) and Liens securing refinancings,
      renewals and extensions thereof permitted pursuant to
Section 7.02(e); provided that (i) such Liens do not at
      any time encumber any property other than the property financed by such
      Indebtedness, and (ii) no such Liens encumber any of the Collateral except
      as specifically permitted in the final paragraph of this
Section 7.01; and 

     

    (g)
      Liens in favor of the Revolving
      Agent granted pursuant to the Revolving Credit Documents; provided that
      no such Liens encumber any of the Collateral. 

     

    Following
      the Closing Date,
      Borrowers may finance certain additional personal property to be located on
      either the Cherokee Site or the El Dorado Site by means of a Capitalized Lease
      or other financing arrangement otherwise permitted under this Agreement. Upon
      request by ThermaClime, Payment Agent shall, at ThermaClime’s sole cost and
      expense, execute such documents as are reasonably necessary to release such
      additional personal property from the Liens granted to Collateral Agent
      hereunder; provided that ThermaClime certifies to Payment Agent in writing
      that
      such additional personal property (i) is solely compromised of movable
      personal property, (ii) is not connected to any portion of the Collateral,
      unless such personal property is fully severable and can be disconnected from
      the Collateral to which it is connected without damage or modification to such
      Collateral and without the occurrence of material cost or expense, (iii) is
      not in replacement or substitution of any Collateral, and (iv) if removed,
      shall not adversely affect the use of the Facility Assets, the value of the
      Collateral or the operation of the Facility Business. Upon repayment of such
      Capitalized Lease or financing arrangement, ThermaClime shall cause each
      applicable Borrower which has any interest in any such personal property to
      execute and cause to be filed and recorded, at its sole cost and expense, all
      documents requested by Payment Agent necessary to perfect Collateral Agent’s
      Lien with respect to such personal property. 

     

    7.02
Indebtedness.
      Create,
      incur, assume or suffer to exist any Indebtedness, except: 

     

    (a)
      Indebtedness of the Borrowers
      outstanding at any time under the Revolving Credit Documents together with
      Indebtedness owed to underlying issuers with respect to underlying letters
      of
      credit issued at the request of a lender under the Revolving Credit Agreement
      and as permitted under the portions of the Revolving Credit Agreement relating
      to underlying letters of credit, and under any amendments, refinancings,
      renewals, replacements, extensions or other modifications to the Revolving
      Credit Agreement; provided that (i) the aggregate amount of
      Indebtedness thereunder, including all Indebtedness owed to any underlying
      issuer, shall not exceed $70,000,000 in the aggregate and (ii) Borrowers
      shall comply with the requirements of Section 6.17 in connection
      with any such amendment, refinancing, renewal, replacement, extension or other
      modification; 

     

    (b)
      Indebtedness under the Loan
      Documents; 

     

     

     

    -
      62 - 

     

    (c)
      Indebtedness
      (i) outstanding on the date hereof and listed on Part A of
Schedule 7.02 or (ii) constituting Capitalized Lease
      Obligations, Synthetic Lease Obligations and purchase money obligations for
      fixed or capital assets within the limitations set forth in
Section 7.01(f) and incurred after the Closing Date, provided
      that the aggregate amount of all such Indebtedness under this clause
      (ii) at any one time outstanding shall not exceed $7,500,000;


     

    (d)
      Indebtedness owing by
      (i) any Borrower to any Guarantor or any other Borrower and (ii) any
      Guarantor to any Borrower or any other Guarantor other than Parent,
provided that all such Indebtedness is subject to the Intercompany Loan
      Subordination Agreement; 

     

    (e)
      refinancings, renewals,
      replacements or extensions of Indebtedness permitted under
Section 7.02(c) (and continuance or renewal of any Liens associated
      therewith if permitted under Section 7.01(b) or 7.01(f)) so
      long as: (i) the terms and conditions of such refinancings, renewals, or
      extensions do not, in the Payment Agent’s judgment, materially impair the
      prospects of repayment of the Obligations by Borrowers or materially impair
      Borrowers’ creditworthiness, (ii) such refinancings, renewals, or
      extensions do not result in an increase in the principal amount of, or interest
      rate with respect to, the Indebtedness so refinanced, renewed, or extended,
      except for increases in the principal amount of such Indebtedness not exceeding
      the principal amount of such Indebtedness outstanding on the Closing Date,
      (iii) such refinancings, renewals, or extensions do not result in a
      shortening of the average weighted maturity of the Indebtedness so refinanced,
      renewed, or extended, nor are they on terms or conditions, that, taken as a
      whole, are materially more burdensome or restrictive to the applicable Borrower,
      and (iv) if the Indebtedness that is refinanced, renewed, or extended was
      subordinated in right of payment to the Obligations, then the terms and
      conditions of the refinancing, renewal, or extension Indebtedness must include
      subordination terms and conditions that are at least as favorable to the Agents
      and the Lenders as those that were applicable to the refinanced, renewed, or
      extended Indebtedness; 

     

    (f)
      other subordinated Indebtedness
      the terms and conditions of which, including provisions subordinating such
      Indebtedness to the Obligations, as satisfactory to the Lenders; 

     

    (g)
      Indebtedness owing by any
      Borrower or any Subsidiary of any Borrower to any Subsidiary of Parent that
      is
      not also a Subsidiary of ThermaClime, provided that the aggregate
      principal amount of such Indebtedness shall not exceed $500,000 at any time;
      

     

    (h)
      Guarantees (i) by
      endorsement of instruments or items of payment for deposit to the account of
      the
      Borrowers or Guarantors (other than Parent), (ii) relating to Indebtedness
      otherwise permitted under this Section 7.02 and the guarantees set
      forth on Part B of Schedule 7.02, and (iii) of performance,
      surety or appeal bonds of any Borrower or Guarantor; 

     

    (i)
      Investments permitted under
Section 7.03; 

     

    (j)
      Indebtedness owing to EDN or its
      Subsidiaries resulting from loans from EDN or its Subsidiaries to any Borrower
      or Guarantor permitted pursuant to Section 7.06(g); and


     

     

     

    -
      63 - 

     

    (k)
      other unsecured Indebtedness in
      an aggregate principal amount not to exceed $500,000 at any time outstanding.
      

     

    7.03
Investments.
      Make or
      hold any Investments, except: 

     

    (a)
      Investments held by the
      Borrowers and their Subsidiaries in the form of Cash Equivalents; 

     

    (b)
      Investments in negotiable
      instruments for collection; 

     

    (c)
      advances made in connection with
      purchases of goods or services in the ordinary course of business; 

     

    (d)
      Investments by any Borrower or
      Guarantor in Loan Parties (other than Parent); 

     

    (e)
      Investments consisting of
      extensions of credit in the nature of accounts receivable or notes receivable
      arising from the grant of trade credit in the ordinary course of business,
      and
      Investments received in satisfaction or partial satisfaction thereof from
      financially troubled account debtors to the extent reasonably necessary in
      order
      to prevent or limit loss; 

     

    (f)
      Investments constituting
      Guarantees of Indebtedness permitted by Section 7.02(e) or
      Guarantees otherwise permitted under Section 7.02(h); 

     

    (g)
      Investments set forth on
Schedule 7.03; 

     

    (h)
      Investments made by any Borrower
      or Guarantor (other than Parent) in Parent, provided that the aggregate amount
      of such Investments do not exceed $2,000,000 at any time outstanding;


     

    (i)
      Investments in EDN and its
      Subsidiaries permitted pursuant to Section 7.06(g); 

     

    (j)
      Investments in any newly created
      Subsidiary by means of purchase or other acquisition of the Equity Interests
      of
      such Subsidiary, including by way of a merger, but only if such Subsidiary
      is a
      Guarantor pursuant to the requirements of Section 6.12; and


     

    (k)
      other Investments not exceeding
      $1,000,000 in the aggregate outstanding at any time. 

     

    7.04
Fundamental
      Changes.
      Merge, dissolve, liquidate, consolidate with or into another Person, or Dispose
      of (whether in one transaction or in a series of transactions) all or any
      substantial part of its assets (whether now owned or hereafter acquired) to
      or
      in favor of any Person, except that, so long as no Default exists or would
      result therefrom, (a) any Borrower (other than ThermaClime, Cherokee or
      NFC) or any Subsidiary of any Borrower may merge with and into any Borrower,
      (b) Parent may merge with any entity (other than a Borrower) if Parent is
      the surviving entity of such merger, (c) any Borrower or any Subsidiary of
      any Borrower may sell, transfer, lease or otherwise dispose of its assets (other
      than any Collateral, except in the case of the Intercompany Leases) to any
      Borrower, and (d) the Existing Permitted Leases and Use Rights shall be
      permitted hereunder. 

     

     

     

    -
      64 - 

     

    7.05
Dispositions.
      Make any
      Disposition or enter into any agreement to make any Disposition, except:


     

    (a)
      Dispositions of obsolete,
      damaged, replaced or worn out property, whether now owned or hereafter acquired,
      in the ordinary course of business; 

     

    (b)
      Dispositions of inventory in the
      ordinary course of business; 

     

    (c)
      the use or transfer of money and
      Cash Equivalents by the Borrowers and their Subsidiaries in a manner that is
      not
      prohibited by the terms of this Agreement or the Revolving Credit Documents;
      

     

    (d)
      Dispositions by the Borrowers
      and their Subsidiaries of accounts, provided that (i) the
      consideration payable in connection with the sale or disposition of such
      accounts shall be in cash and shall equal no less than 100% of the aggregate
      original invoice amount of such accounts, or (ii) in the case of any
      accounts that are subject to Liens in favor of the Revolving Agent under the
      Revolving Credit Documents, such accounts are disposed of in compliance with
      the
      requirements set forth in the Revolving Credit Agreement; 

     

    (e)
      Dispositions permitted by
Section 7.04; 

     

    (f)
      Dispositions by the Borrowers of
      obsolete, damaged or worn out equipment constituting Collateral (i) that is
      promptly (or in the case of damaged equipment in connection with an event of
      loss, within 180 days) replaced with equipment of similar manufacture having
      value, remaining useful life and utility at least equal to, and being in at
      least as good an operating and maintenance condition as, the equipment being
      replaced, or (ii) that is not replaced in accordance with clause
      (i) above, in an aggregate amount not to exceed $2,000,000 during the
      term of this Agreement; provided that (A) within 180 Business Days,
      the proceeds of any such Disposition that is not reinvested in replacement
      equipment pursuant to clause (i) above shall be paid to the Payment
      Agent as a prepayment of the outstanding principal amount of the Term Loans,
      and
      (B) concurrently with such prepayment, ThermaClime shall deliver to the
      Payment Agent a certificate describing the Disposed of equipment and certifying
      that such equipment was obsolete, damaged or worn out and that the failure
      to
      replace such equipment could not be reasonably expected to have a Material
      Adverse Effect. Upon receipt by the Payment Agent of (x) either evidence of
      replacement of equipment pursuant to clause (i) above or the proceeds of a
      Disposal of equipment pursuant to clause (ii) above and (y) to the
      extent necessary or appropriate to create a Lien in favor of the Collateral
      Agent on any replacement equipment, duly executed security documents, the
      Payment Agent will take such steps as are necessary to promptly release the
      Collateral Agent’s Lien on the equipment so Disposed of; and 

     

    (g)
      Dispositions permitted under
      Section 7.4(a) of the Revolving Credit Agreement (as in effect on the date
      hereof), provided that the proceeds of any such Disposition are applied in
      accordance with the requirements of Section 7.4(a) of the Revolving Credit
      Agreement (as in effect on the date hereof); 

     

     

     

    -
      65 - 

     

    (h)
      nonexclusive licenses of IP
      Rights in the ordinary course of business; 

     

    (i)
      Intercompany Leases; and


     

    (j)
      Existing Permitted Leases and
      Use Rights. 

     

    Notwithstanding
      anything to the
      contrary contained in this Section 7.05, Borrowers shall not (and
      shall not permit any of their Subsidiaries to) make or suffer to exist any
      Disposition of Collateral except to the extent permitted by Sections
      7.05(f), (i) or (j) above. 

     

    7.06
Restricted
      Payments.
      Declare or make, directly or indirectly, any Restricted Payment, or incur any
      obligation (contingent or otherwise) to do so, or issue or sell any Equity
      Interests, except that, so long as no distribution is made of any Collateral:
      

     

    (a)
      any Borrower may make Restricted
      Payments to another Borrower or issue Equity Interests to another Borrower
      or to
      Parent if no Change of Control would result therefrom; 

     

    (b)
      ThermaClime may make
      distributions and pay dividends to Parent in repayment of the costs and expenses
      incurred by Parent that are directly allocable to the Borrowers for Parent’s
      provision of the Services (as defined in the Services Agreement) on behalf
      of
      the Borrowers pursuant to the Services Agreement; 

     

    (c)
      each Borrower may make
      distributions and pay dividends to any Guarantor (other than Parent), and each
      Guarantor may make distributions and pay dividends to any Borrower or Guarantor
      (other than Parent); 

     

    (d)
      so long as no Default or Event
      of Default has occurred and is continuing or would result therefrom,
      (i) ThermaClime may make distributions and pay dividends to Parent in
      respect of the management fees payable by ThermaClime to Parent in accordance
      with the Management Agreement, provided that the aggregate amount of all
      such payments made by ThermaClime pursuant to this clause (d)(i) shall not
      exceed $2,500,000 during any fiscal year of ThermaClime or the maximum
      management fees payable to Parent each calendar quarter under the Management
      Agreement, and (ii) ThermaClime may make distributions and pay dividends to
      Parent in an aggregate amount not to exceed, during each fiscal year, the sum
      of
      (A) 50% of the actual consolidated net income of the Borrowers for such
      fiscal year determined in accordance with GAAP, plus (B) the amounts paid
      to Parent during such fiscal year in accordance with
Section 7.06(e); 

     

    (e)
      so long as a Secured Party has
      not exercised any of its rights or remedies following an Event of Default,
      ThermaClime may make distributions and pay dividends to Parent in an aggregate
      amount not to exceed, during each fiscal year, the consolidated income tax
      liability of the Borrowers for such fiscal year calculated as if each the
      Borrowers was a separate consolidated taxpayer; 

     

     

     

    -
      66 - 

     

    (f)
      each Borrower may make
      distributions and pay dividends to any Subsidiary of Parent that is not also
      a
      Subsidiary of ThermaClime or that is a Subsidiary of ThermaClime but is not
      a
      Borrower or a Guarantor, provided that the aggregate amount of such
      distributions and dividends shall not exceed $100,000 during each fiscal year;
      and 

     

    (g)
      each Borrower and Guarantor may
      repay loans, make advances, distributions, and pay dividends to EDN and its
      Subsidiaries, provided that (i) no Default or Event of Default has occurred
      and is continuing or would result from the making of such distributions or
      dividends, and (ii) the aggregate amount of such repayments, advances,
      distributions and dividends does not exceed $5,000,000 during any week, and
      (iii) the aggregate amount of such loans repaid and advances, distributions
      and dividends paid to EDN and its Subsidiaries by the Borrowers and Guarantors
      (other than the Parent) shall not exceed the aggregate amount of advances,
      distributions and dividends paid by EDN and its Subsidiaries to the Borrowers
      and Guarantors (other than the Parent) at any time. 

     

    7.07
Change
      in Nature of
      Business. Engage in any material line of business substantially different
      from those lines of business conducted by the Borrowers and their Subsidiaries
      on the date hereof or any business substantially related or incidental thereto.
      

     

    7.08
Transactions
      with
      Affiliates. Except for agreements set forth on Schedule 7.08, enter
      into any transaction of any kind with any Affiliate of any Borrower, whether
      or
      not in the ordinary course of business, other than on fair and reasonable terms
      substantially as favorable to such Borrower or such Subsidiary as would be
      obtainable by such Borrower or such Subsidiary at the time in a comparable
      arm’s
      length transaction with a Person other than an Affiliate; provided that
      the foregoing restriction shall not apply to transactions among any Borrower
      and
      any other Loan Party. 

     

    7.09
Restrictive
      Agreements.
      Enter into or permit to exist any Contractual Obligation (other than this
      Agreement or any other Loan Document) that (a) limits the ability
      (i) of any Subsidiary (other than any Excluded Subsidiary) of a Borrower to
      make Restricted Payments to any Borrower or any Guarantor or to otherwise
      transfer property owned by such Subsidiary to or invest in any Borrower or
      any
      Guarantor, except for any agreement in effect (A) on the date hereof and
      set forth on Schedule 7.09 or (B) at the time any Subsidiary (other
      than any Excluded Subsidiary) becomes a Subsidiary of any Borrower, so long
      as
      such agreement was not entered into solely in contemplation of such Person
      becoming a Subsidiary of a Borrower, (ii) of any Subsidiary (other than any
      Excluded Subsidiary) to Guarantee the Indebtedness of any Borrower other than
      as
      prohibited under the Revolving Credit Agreement but in no event shall such
      prohibition in the Revolving Credit Agreement at any time be greater in scope
      or
      more restrictive than the prohibition as set forth in the Revolving Credit
      Agreement as of Closing Date or (iii) of any Borrower or any Subsidiary
      (other than any Excluded Subsidiary) to create, incur, assume or suffer to
      exist
      Liens on property of such Person; provided, however, that clauses
      (a)(i) and (a)(iii) above shall shall not prohibit (x) any negative pledge
      or restriction on Restricted Payments or transfer of property provided for
      in
      the Revolving Credit Agreement but in no event shall such negative pledge or
      restriction in the Revolving Credit Agreement at any time be greater in scope
      or
      more restrictive than the negative pledge or such restriction as set forth
      in
      the Revolving Credit Agreement as of Closing Date, or (y) any negative
      pledge or restriction with respect to the transfer of property in favor of
      any
      holder of Indebtedness permitted under Sections 7.02(c) or 7.02(e)
      solely to the extent any such negative pledge or restriction on transfer relates
      to the property financed by or which is the subject of the Indebtedness
      permitted under Section 7.02(c) or 7.02(e) and 

     

     

     

    -
      67 - 

     

    agreements
      evidencing such
      Indebtedness do not otherwise limit the making of Restricted Payments, and,
      provided further, that the prohibition on restrictions on transfers of
      assets as set forth in clause (a)(i) above shall not apply to customary
      restrictions contained in an agreement for the sale of property to the extent
      such sale is permitted by this Agreement and such restriction relates solely
      to
      the asset being sold; or (b) requires the grant of a Lien to secure an
      obligation of such Person if a Lien is granted to secure another obligation
      of
      such Person. 

     

    7.10
Use
      of Proceeds. Use the
      proceeds of any Term Loan, whether directly or indirectly, and whether
      immediately, incidentally or ultimately, to purchase or carry margin stock
      (within the meaning of Regulation U of the FRB) or to extend credit to others
      for the purpose of purchasing or carrying margin stock or to refund indebtedness
      originally incurred for such purpose. 

     

    7.11
Financial
      Covenants.


     

    (a)
Consolidated
      Leverage
      Ratio. Permit the Consolidated Leverage Ratio at any time during any period
      of four fiscal quarters of ThermaClime set forth below to be greater than 4.50
      to 1.00. 

     

    (b)
Consolidated
      Fixed Charge
      Coverage Ratio. Permit the Consolidated Fixed Charge Coverage Ratio as of
      the end of any fiscal quarter of ThermaClime to be less than 1.10 to 1.00.
      

     

    7.12
Amendments
      of Organization
      Documents. Amend any of its Organization Documents if such amendment would
      have the effect of changing the name, place of organization or type of
      organization of any Loan Party; provided, however, that any Borrower or its
      Subsidiaries may change its name or add any new fictitious name if the Borrowers
      provide the Payment Agent and the Collateral Agent with at least 30 days’ prior
      written notice of such change and at such time the Borrowers promptly provide
      to
      the Collateral Agent any financing statements, fixture filings or other
      Collateral Documents as requested by the Payment Agent necessary or appropriate
      for the continued perfection of the Collateral Agent’s Liens on the Collateral.


     

    7.13
Accounting
      Changes. Make
      any change in (a) accounting policies or reporting practices, except as
      required by GAAP, or (b) fiscal year. 

     

    7.14
Prepayments,
      Etc. of
      Indebtedness. Prepay, redeem, purchase, defease or otherwise satisfy prior
      to the scheduled maturity thereof in any manner, or make any payment in
      violation of any subordination terms of, any Indebtedness, except (a) the
      prepayment of the Term Loans in accordance with the terms of this Agreement,
      (b) regularly scheduled or required repayments or redemptions of
      Indebtedness set forth in Section 7.02, (c) refinancings and
      refundings of Indebtedness set forth in Section 7.02(c) in
      compliance with Section 7.02(e), and (d) refinancings and
      replacements of the Revolving Credit Agreement to the extent permitted pursuant
      to Sections 7.02(a) and 6.17 and payments to reduce Indebtedness
      under the Revolving Credit Agreement which are not accompanied by or give rise
      to a reduction in the aggregate outstanding commitments under the Revolving
      Credit Agreement. 

     

     

     

    -
      68 - 

     

    7.15
Amendment,
      Etc. of
      Indebtedness and Certain Agreements. Amend, modify or change in any manner
      any term or condition of (a) any Indebtedness set forth in Schedule
      7.02, except for any refinancing, refunding, renewal or extension thereof
      permitted by Section 7.02(e), or (b) the Existing Permitted
      Leases and Use Rights, the Intercompany Leases, the Management Agreement, the
      Services Agreement or the Tax Sharing Agreement, without the prior written
      consent of the Payment Agent, excluding amendments and modifications to an
      agreement listed in this clause (b) to effect extensions or renewals
      thereof that do not otherwise affect the terms and conditions thereof and,
      in
      the case of the Existing Permitted Leases and Use Rights, the Intercompany
      Leases and the Management Agreement, affect the subordination thereof to the
      Obligations as provided for in the Intercompany Lease Subordination Agreement,
      the Management Agreement, and subordinations to be delivered with respect to
      the
      Existing Permitted Leases and Use Rights pursuant to Section 4.01.


     

    7.16
Performance
      of This
      Agreement. No payments required or permitted under the terms of this
      Agreement will be paid by any Loan Party or made to any Agent or any Lender
      in
      either Alabama or Arkansas. 

     

    ARTICLE
      VIII.


     

    EVENTS
      OF DEFAULT AND
      REMEDIES 

     

    8.01
Events
      of Default. Any
      of the following shall constitute an Event of Default: 

     

    (a)
Non-Payment.
      Any Borrower
      or any other Loan Party fails to (i) pay when and as required to be paid
      herein, any amount of principal of any Term Loan, or (ii) pay within three
      days after the same becomes due, any interest on any Term Loan or any fee due
      hereunder, or (iii) pay within five days after the same becomes due, any
      other amount payable hereunder or under any other Loan Document; or


     

    (b)
Specific
      Covenants.
      (i) Parent or any Borrower fails to perform or observe any term, covenant
      or agreement applicable to it contained in any of Section 6.03,
6.05(a), 6.10, 6.11, 6.14 or Article VII,
      (ii) Parent fails to perform or observe any term, covenant or agreement
      contained in Section 10.05 or 10.07, (iii) any Borrower
      fails to perform or observe any term, covenant or agreement contained in
      Sections 4.2, 4.3 (other than Section 4.3(a)), or 4.4 of the Security
      Agreement but in each case after giving affect to any cure or grace periods
      set
      forth in such sections of the Security Agreement, or Section 2.01(g)
      of the respective Mortgages to which it is a party; or (iv) Parent or any
      Borrower fails to perform or observe any term, covenant or agreement applicable
      to it contained in any of Section 6.01, 6.02, 6.05(b),
6.05(c), or 6.12 or Section 4.3(a) of the Security Agreement
      and such failure continues for 10 days; or 

     

    (c)
Other
      Defaults. Any Loan
      Party fails to perform or observe any other covenant or agreement (not specified
      in Section 8.01(a) or (b) above) contained in any Loan
      Document on its part to be performed or observed and such failure continues
      for
      30 days; or 

     

     

     

    -
      69 - 

     

    (d)
Representations
      and
      Warranties. Any representation, warranty, certification or statement of fact
      made by or on behalf of any Borrower or any other Loan Party herein, in any
      other Loan Document, or in any document delivered in connection herewith or
      therewith shall be incorrect or materially misleading when made; or


     

    (e)
Cross-Default.
      (i) Parent, any Borrower or any Subsidiary of any Borrower (other than any
      Excluded Subsidiary) (A) fails to make any payment when due (whether by
      scheduled maturity, required prepayment, acceleration, demand, or otherwise)
      in
      respect of the Indebtedness arising under the Revolving Credit Documents or
      any
      other Indebtedness or Guarantee (other than Indebtedness hereunder and
      Indebtedness under Swap Contracts) having an aggregate principal amount
      (including undrawn committed or available amounts and including amounts owing
      to
      all creditors under any combined or syndicated credit arrangement) of more
      than
      the Threshold Amount, or (B) fails to observe or perform or otherwise
      defaults under or breaches any other agreement or condition in any Revolving
      Credit Document or relating to any other such Indebtedness or Guarantee
      described above or contained in any instrument or agreement evidencing, securing
      or relating thereto, if the effect of such failure, default or breach as
      described in clauses (i)(A) or clause (i)(B) above is to cause, or to permit
      the
      holder or holders of such Indebtedness or the beneficiary or beneficiaries
      of
      such Guarantee (or a trustee or agent on behalf of such holder or holders or
      beneficiary or beneficiaries) to cause, with the giving of any required notice
      or the expiration of any applicable grace or cure period, such Indebtedness
      to
      be demanded or to become due or to be repurchased, prepaid, defeased or redeemed
      (automatically or otherwise), or an offer to repurchase, prepay, defease or
      redeem such Indebtedness to be made, prior to its stated maturity (other than
      required prepayments of less than all of the Indebtedness set forth in the
      documents related thereto), or such Guarantee to become payable or cash
      collateral in respect thereof to be demanded; or (ii) there occurs under
      any Swap Contract an Early Termination Date (as defined in such Swap Contract)
      resulting from (A) any event of default under such Swap Contract as to
      which Parent, any Borrower or any Subsidiary of any Borrower (other than an
      Excluded Subsidiary) is the Defaulting Party (as defined in such Swap Contract)
      or (B) any Termination Event (as so defined) under such Swap Contract as to
      which a Parent, any Borrower or any Subsidiary of any Borrower (other than
      an
      Excluded Subsidiary) is an Affected Party (as so defined) and, in either event,
      the Swap Termination Value owed by Parent, such Borrower or such Subsidiary
      as a
      result thereof is greater than the Threshold Amount; or 

     

    (f)
Insolvency
      Proceedings,
      Etc. Any Loan Party or any Subsidiary thereof institutes or consents to the
      institution of any proceeding under any Debtor Relief Law, or makes an
      assignment for the benefit of creditors; or applies for or consents to the
      appointment of any receiver, trustee, custodian, conservator, liquidator,
      rehabilitator or similar officer for it or for all or any material part of
      its
      property; or any receiver, trustee, custodian, conservator, liquidator,
      rehabilitator or similar officer is appointed without the application or consent
      of such Person and the appointment continues undischarged or unstayed for 60
      calendar days; or any proceeding under any Debtor Relief Law relating to any
      such Person or to all or any material part of its property is instituted without
      the consent of such Person and continues undismissed or unstayed for 60 calendar
      days after the institution of such proceeding, or an order for relief is entered
      in any such proceeding; or 

     

     

     

    -
      70 - 

     

    (g)
Inability
      to Pay Debts;
      Attachment. (i) Any Loan Party or any Subsidiary thereof becomes unable
      or admits in writing its inability or fails generally to pay its debts as they
      become due, or (ii) any writ or warrant of attachment or execution or
      similar process is issued or levied against all or any material part of the
      property of any such Person and is not released, vacated or fully bonded within
      30 days after its issue or levy; or 

     

    (h)
Judgments.
      There is
      entered against any of Parent, any Borrower or any Subsidiary of any Borrower
      (other than any Excluded Subsidiary) (i) one or more final judgments or
      orders for the payment of money in an aggregate amount (as to all such judgments
      and orders) exceeding $1,500,000 (to the extent not covered by independent
      third-party insurance as to which the insurer is rated at least “A” by A.M. Best
      Company, has been notified of the potential claim and does not dispute
      coverage), or (ii) any one or more non-monetary final judgments that have,
      or could reasonably be expected to have, individually or in the aggregate,
      a
      Material Adverse Effect and, in either case, (A) enforcement proceedings
      are commenced by any creditor upon such judgment or order, or (B) there is
      a period of 30 consecutive days during which a stay of enforcement of such
      judgment, by reason of a pending appeal or otherwise, is not in effect; or
      

     

    (i)
ERISA.
      (i) An ERISA
      Event occurs with respect to a Pension Plan or Multiemployer Plan which has
      resulted or could reasonably be expected to result in liability of any Borrower
      under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC
      in an aggregate amount in excess of the Threshold Amount, or (ii) any
      Borrower or any ERISA Affiliate fails to pay when due, after the expiration
      of
      any applicable grace period, any installment payment with respect to its
      withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan
      in an aggregate amount in excess of the Threshold Amount; or 

     

    (j)
Invalidity
      of Loan
      Documents. Any provision of any Loan Document, at any time after its
      execution and delivery and for any reason other than as expressly permitted
      hereunder or thereunder or satisfaction in full of all the Obligations, ceases
      to be in full force and effect (subject only to ThermaClime’s right to cure a
      failure by Collateral Agent to file a continuation statement as set forth in
      Section 8.01(l) below); or any Loan Party or any Affiliate of any Loan
      Party contests in any manner the validity or enforceability of any provision
      of
      any Loan Document; or any Loan Party denies that it has any or further liability
      or obligation under any provision of any Loan Document, or purports to revoke,
      terminate or rescind any provision of any Loan Document; or 

     

    (k)
Change
      of Control. There
      occurs any Change of Control; or 

     

    (l)
Collateral
      Documents. Any
      Collateral Document after delivery thereof pursuant to Section 4.01
or 6.12 shall for any reason (other than pursuant to the terms
      thereof) cease to create a valid and perfected first priority Lien (subject
      to
      Liens permitted by Section 7.01) on the Collateral purported to be
      covered thereby; provided that, if such failure to create a perfected first
      priority Lien arises solely as a result of the failure by the Collateral Agent
      following the Closing Date to file a UCC-3 continuation statement, then to
      the
      extent that ThermaClime fails within five (5) days after request in writing
      by any Agent or any Lender, to file such UCC-3 continuation statement or such
      other filings as requested in writing by Collateral Agent or any such Lender
      to
      maintain or restore such perfected first priority Lien; or 

     

     

     

    -
      71 - 

     

    (m)
Subordination.
      Any
      Borrower or any other Loan Party shall, directly or indirectly, disavow or
      contest in any manner (A) the effectiveness, validity or enforceability of
      any provision of the Intercompany Loan Subordination Agreement (the
“Subordination Provisions”), (B) that the Subordination Provisions
      exist for the benefit of the Agents and the Lenders or (C) that all
      payments of principal of or premium and interest on the applicable subordinated
      Indebtedness, or realized from the liquidation of any property of any Loan
      Party, shall be subject to any of the Subordination Provisions. 

     

    8.02
Remedies
      upon Event of
      Default. If any Event of Default occurs and is continuing, either the
      Payment Agent with respect to clauses (a) and (b) below or the
      Collateral Agent with respect to clause (c) below, shall, at the request
      of, or may, with the consent of, the Required Lenders, take any or all of the
      following actions: 

     

    (a)
      declare the commitment of each
      Lender to make Term Loans to be terminated, whereupon such commitments shall
      be
      terminated; 

     

    (b)
      declare the unpaid principal
      amount of all outstanding Term Loans, all interest accrued and unpaid thereon,
      and all other amounts owing or payable hereunder or under any other Loan
      Document to be immediately due and payable, without presentment, demand, protest
      or other notice of any kind, all of which are hereby expressly waived by the
      Borrowers; and 

     

    (c)
      exercise on behalf of itself,
      the Lenders all rights and remedies available to it or the Lenders under the
      Loan Documents; 

     

    provided,
however,
      that upon the occurrence of an actual or deemed entry of an order for relief
      with respect to any Borrower under the Bankruptcy Code of the United States,
      the
      obligation of each Lender to make Term Loans shall automatically terminate,
      the
      unpaid principal amount of all outstanding Term Loans and all interest and
      other
      amounts as aforesaid shall automatically become due and payable, in each case
      without further act of any Agent or any Lender. 

     

    8.03
Application
      of Funds.
      After the exercise of remedies provided for in Section 8.02 (or after the
      Term Loans have automatically become immediately due and payable as set forth
      in
      the proviso to Section 8.02), any amounts received on account of the
      Obligations shall be applied by the Payment Agent or in the case of proceeds
      received by the Collateral Agent, the Collateral Agent, in the following order:
      

     

    First,
      to payment of that
      portion of the Obligations constituting fees, indemnities, expenses and other
      amounts (including fees, charges and disbursements of counsel to the Agents
      and
      amounts payable under Article III) payable to each Agent in its capacity
      as such; 

     

    Second,
      to payment of that
      portion of the Obligations constituting fees, indemnities and other amounts
      (other than principal and interest) payable to the Lenders (including fees,
      charges and disbursements of counsel to the respective Lenders (including fees
      and time charges for attorneys who may be employees of any Lender) and amounts
      payable under Article III, ratably among them in proportion to the
      respective amounts described in this clause Second payable to them;


     

     

     

    -
      72 - 

     

    Third,
      to payment of that
      portion of the Obligations constituting accrued and unpaid interest on the
      Term
      Loans and other Obligations, ratably among the Lenders in proportion to the
      respective amounts described in this clause Third payable to them;


     

    Fourth,
      to payment of that
      portion of the Obligations constituting unpaid principal of the Term Loans,
      ratably among the Lenders in proportion to the respective amounts described
      in
      this clause Fourth held by them; and 

     

    Last,
      the balance, if any,
      after Indefeasible Payment and Performance of All Obligations, to the Borrowers
      or as otherwise required by Law. 

     

    ARTICLE
      IX.


     

    THE
      AGENTS


     

    9.01
Appointment
      and
      Authority. 

     

    (a)
      Each of the Lenders hereby
      irrevocably appoints BALCAP to act on its behalf as the Administrative Agent
      hereunder and under the other Loan Documents and authorizes the Administrative
      Agent to take such actions on its behalf and to exercise such powers as are
      delegated to the Administrative Agent by the terms hereof or thereof, together
      with such actions and powers as are reasonably incidental thereto;
provided that in no event shall the Administrative Agent have any powers
      or be required to take any actions other than those set forth in
Section 11.01. Each of the Lenders hereby irrevocably appoints
      BALCAP to act on its behalf as the Collateral Agent hereunder and under the
      other Loan Documents and authorizes the Collateral Agent to take such actions
      on
      its behalf and to exercise such powers as are delegated to the Collateral Agent
      by the terms hereof or thereof, including, without limitation, acting as
      Collateral Agent to the Lenders for purposes of acquiring, holding and enforcing
      any and all Liens on Collateral granted by any of the Loan Parties to secure
      any
      of the Obligations, together with such actions, discretion and powers as are
      reasonably incidental thereto provided, however, in no event shall the
      Collateral Agent have any obligations under the Loan Documents to take any
      actions other than those described in or otherwise specifically delegated to
      the
      Collateral Agent under the Loan Documents. Each of the Lenders hereby
      irrevocably appoints Bank of Utah to act on its behalf as Payment Agent
      hereunder and under the other Loan Documents and authorizes the Payment Agent
      to
      take such actions on its behalf and to exercise such powers as are delegated
      to
      the Payment Agent by the terms hereof or thereof, together with such actions
      and
      powers as are reasonably incidental thereto. The provisions of this Article
      are
      solely for the benefit of the Agents and the Lenders, and neither any Borrower
      nor any other Loan Party shall have rights as a third party beneficiary of
      any
      of such provisions. 

     

    (b)
      The Collateral Agent and any
      co-agents, sub-agents and attorneys-in-fact appointed by the Collateral Agent
      pursuant to Section 9.05 for purposes of holding or enforcing any
      Lien on the Collateral (or any portion thereof) granted under the Collateral
      Documents, or for exercising any rights and remedies thereunder at the direction
      of the Collateral Agent), shall be entitled to the benefits of all provisions
      of
      this Article IX and Article XI (including
Section 11.04(c), as though such co-agents, sub-agents and
      attorneys-in-fact were the “collateral agent” under the Loan Documents) as if
      set forth in full herein with respect thereto. 

     

     

     

    -
      73 - 

     

    9.02
Rights
      as a Lender. The
      Persons serving as the Agents hereunder each shall have the same rights and
      powers in its capacity as a Lender as any other Lender and may exercise the
      same
      as though it were not an Agent and the term “Lender” or “Lenders” shall, unless
      otherwise expressly indicated or unless the context otherwise requires, include
      the Persons serving as the Agents hereunder in its individual capacity. Such
      Person and its Affiliates may accept deposits from, lend money to, act as the
      financial advisor or in any other advisory capacity for and generally engage
      in
      any kind of business with any Borrower or any Subsidiary or other Affiliate
      thereof as if such Person were not an Agent hereunder and without any duty
      to
      account therefor to the Lenders. 

     

    9.03
Exculpatory
      Provisions.
      None of the Agents shall have any duties or obligations except those expressly
      set forth herein and in the other Loan Documents. Without limiting the
      generality of the foregoing, none of the Agents: 

     

    (a)
      shall be subject to any
      fiduciary or other implied duties, regardless of whether a Default has occurred
      and is continuing; 

     

    (b)
      shall have any duty to take any
      discretionary action or exercise any discretionary powers, except discretionary
      rights and powers expressly contemplated hereby or by the other Loan Documents,
      all of which such Agent is required to exercise as directed in writing by the
      Required Lenders (or such other number or percentage of the Lenders as shall
      be
      expressly provided for herein or in the other Loan Documents), provided
      that none of the Agents shall be required to take any action that, in its
      opinion or the opinion of its counsel, may expose such Agent to liability or
      that is contrary to any Loan Document or applicable law; and 

     

    (c)
      shall, except as expressly set
      forth herein and in the other Loan Documents, have any duty to disclose, and
      shall not be liable for the failure to disclose, any information relating to
      any
      Borrower or any of their Affiliates that is communicated to or obtained by
      the
      Person serving as such Agent or any of its Affiliates in any capacity.


     

    None
      of the Agents shall be liable
      for any action taken or not taken by it (i) with the consent or at the
      request of the Required Lenders (or such other number or percentage of the
      Lenders as shall be necessary under the circumstances as provided in
Section 11.01) or (ii) in the absence of its own gross
      negligence or willful misconduct. Each Agent shall be deemed not to have
      knowledge of any Default unless and until notice describing such Default is
      given to such Agent by a Borrower or a Lender. None of the Agents shall be
      liable for any action taken or not taken by the other Agents or any co-agents,
      sub-agents and attorneys-in-fact appointed by the other Agents. 

     

    None
      of the Agents shall be
      responsible for or have any duty to ascertain or inquire (or in the case of
      clause (iv) cause or maintain except as specifically directed to do so by
      the Lenders) into (i) any statement, warranty or representation made in or
      in connection with this Agreement or any other Loan Document, (ii) the
      contents of any certificate, report or other document delivered hereunder or
      thereunder or in connection herewith or therewith, (iii) the performance or
      observance of any of the covenants, 

     

     

     

    -
      74 - 

     

    agreements
      or other terms or
      conditions set forth herein or therein or the occurrence of any Default,
      (iv) the validity, enforceability, effectiveness or genuineness of this
      Agreement, any other Loan Document or any other agreement, instrument or
      document, or the creation, perfection or priority of any Lien purported to
      be
      created by the Collateral Documents, (v) the value or the sufficiency of
      any Collateral, or (vi) the satisfaction of any condition set forth in
Article IV or elsewhere herein, other than to confirm receipt of items
      expressly required to be delivered to such Agent. 

     

    9.04
Reliance
      by Agents. Each
      Agent shall be entitled to rely upon, and shall not incur any liability for
      relying upon, any notice, request, certificate, consent, statement, instrument,
      document or other writing (including any electronic message, Internet or
      intranet website posting or other distribution) believed by it to be genuine
      and
      to have been signed, sent or otherwise authenticated by the proper Person.
      Each
      Agent also may rely upon any statement made to it orally or by telephone and
      believed by it to have been made by the proper Person, and shall not incur
      any
      liability for relying thereon. In determining compliance with any condition
      hereunder to the making of a Term Loan, that by its terms must be fulfilled
      to
      the satisfaction of a Lender, each Agent may presume that such condition is
      satisfactory to such Lender unless such Agent shall have received notice to
      the
      contrary from such Lender prior to the making of such Term Loan. Each Agent
      may
      consult with legal counsel (who may be counsel for the Borrowers), independent
      accountants and other experts selected by it, and shall not be liable for any
      action taken or not taken by it in accordance with the advice of any such
      counsel, accountants or experts. 

     

    9.05
Delegation
      of Duties.
      Each Agent may perform any and all of its duties and exercise its rights and
      powers hereunder or under any other Loan Document by or through any one or
      more
      sub-agents appointed by such Agent. Each Agent and any such sub-agent may
      perform any and all of its duties and exercise its rights and powers by or
      through their respective Related Parties. The exculpatory provisions of this
      Article shall apply to any such sub-agent and to the Related Parties of each
      Agent and any such sub-agent, and shall apply to their respective activities
      in
      connection with the syndication of the credit facilities provided for herein
      as
      well as activities as Administrative Agent, Collateral Agent or Payment Agent,
      as applicable. 

     

    9.06
Resignation
      of Agents.
      Each Agent may at any time give notice of its resignation to the Lenders and
      the
      Borrowers. Upon receipt of any such notice of resignation, the Required Lenders
      shall have the right, in consultation with the Borrowers, to appoint a
      successor, which shall be a bank with an office in the United States, or an
      Affiliate of any such bank with an office in the United States. If no such
      successor shall have been so appointed by the Required Lenders and shall have
      accepted such appointment within 30 days after the retiring Agent gives
      notice of its resignation, then the retiring Agent may on behalf of the Lenders,
      appoint a successor Agent meeting the qualifications set forth above;
provided that if the retiring Agent shall notify the Borrowers and the
      Lenders that no qualifying Person has accepted such appointment, then such
      resignation shall nonetheless become effective in accordance with such notice
      and (a) the retiring Agent shall be discharged from its duties and
      obligations hereunder and under the other Loan Documents (except that in the
      case of any collateral security held by the Collateral Agent on behalf of the
      Lenders under any of the Loan Documents, the retiring Collateral Agent shall
      continue to hold such collateral security until such time as a successor
      Collateral Agent is appointed) and (b) all payments, communications and
      determinations provided to be made by, to or through the 

     

     

     

    -
      75 - 

     

    retiring
      Agent shall instead be made
      by or to each Lender directly, until such time as the Required Lenders appoint
      a
      successor Agent as provided for above in this Section. Upon the acceptance
      of a
      successor’s appointment as Administrative Agent, Collateral Agent or Payment
      Agent hereunder, as applicable, such successor shall succeed to and become
      vested with all of the rights, powers, privileges and duties of the retiring
      (or
      retired) Agent, and the retiring Agent shall be discharged from all of its
      duties and obligations hereunder or under the other Loan Documents (if not
      already discharged therefrom as provided above in this Section). The fees
      payable by the Borrowers to a successor Agent shall be the same as those payable
      to its predecessor unless otherwise agreed between the Borrowers and such
      successor. After the retiring Agent’s resignation hereunder and under the other
      Loan Documents, the provisions of this Article and Section 11.04
      shall continue in effect for the benefit of such retiring Agent, its sub-agents
      and their respective Related Parties in respect of any actions taken or omitted
      to be taken by any of them while the retiring Agent was acting as Administrative
      Agent, Collateral Agent or Payment Agent, as applicable. 

     

    9.07
Non-Reliance
      on Agents and
      Other Lenders. Each Lender acknowledges that it has, independently and
      without reliance upon any Agent or any other Lender or any of their Related
      Parties and based on such documents and information as it has deemed
      appropriate, made its own credit analysis and decision to enter into this
      Agreement. Each Lender also acknowledges that it will, independently and without
      reliance upon any Agent or any other Lender or any of their Related Parties
      and
      based on such documents and information as it shall from time to time deem
      appropriate, continue to make its own decisions in taking or not taking action
      under or based upon this Agreement, any other Loan Document or any related
      agreement or any document furnished hereunder or thereunder. 

     

    9.08
No
      Other Duties, Etc.
      Anything herein to the contrary notwithstanding, the Arranger listed on the
      cover page hereof shall not have any powers, duties or responsibilities under
      this Agreement or any of the other Loan Documents, except in its capacity,
      as
      applicable, as the Administrative Agent or a Lender hereunder. 

     

    9.09
Collateral
      Agent May File
      Proofs of Claim. In case of the pendency of any proceeding under any Debtor
      Relief Law or any other judicial proceeding relative to any Loan Party, the
      Collateral Agent (irrespective of whether the principal of any Term Loan shall
      then be due and payable as herein expressed or by declaration or otherwise
      and
      irrespective of whether the Collateral Agent shall have made any demand on
      any
      Borrower) shall be entitled and empowered, by intervention in such proceeding
      or
      otherwise: 

     

    (a)
      to file and prove a claim for
      the whole amount of the principal and interest owing and unpaid in respect
      of
      the Term Loans and all other Obligations that are owing and unpaid and to file
      such other documents as may be necessary or advisable in order to have the
      claims of the Lenders and the Agents (including any claim for the reasonable
      compensation, expenses, disbursements and advances of the Lenders and the Agents
      and their respective agents and counsel and all other amounts due the Lenders
      and the Agents 2.05 and 11.04) allowed in such judicial
      proceeding; and 

     

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

     

     

     

    -
      76 - 

     

    and
      any custodian, receiver,
      assignee, trustee, liquidator, sequestrator or other similar official in any
      such judicial proceeding is hereby authorized by each Lender (and the
      Administrative Agent, as applicable) to make such payments to the Payment Agent
      and, if the Payment Agent shall consent to the making of such payments directly
      to the Lenders, to pay to the Payment Agent any amount due for the reasonable
      compensation, expenses, disbursements and advances of the Agents and their
      respective agents and counsel, and any other amounts due the Agents under
Sections 2.05 and 11.04. 

     

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

     

    9.10
Collateral
      and Guaranty
      Matters. The Lenders irrevocably authorize the Collateral Agent, at its
      option and in its discretion, 

     

    (a)
      to release any Lien on any
      property granted to or held by the Collateral Agent under any Loan Document
      (i) upon payment in full of all Obligations (other than contingent
      indemnification obligations), (ii) that is sold or to be sold as part of or
      in connection with any sale permitted hereunder or under any other Loan
      Document, or (iii) if approved, authorized or ratified in writing in
      accordance with Section 11.01; 

     

    (b)
      to release any Guarantor from
      its obligations under a Guaranty if such Person ceases to be a Subsidiary as
      a
      result of a transaction permitted hereunder; and 

     

    (c)
      to subordinate any Lien on any
      property granted to or held by the Collateral Agent under any Loan Document
      to
      the holder of any Lien on such property that is permitted by the final paragraph
      of Section 7.01. 

     

    Upon
      request by the Collateral Agent
      or the Payment Agent, as applicable, at any time, the Required Lenders will
      confirm in writing the Collateral Agent’s authority to release or subordinate
      its interest in particular types or items of property, or for the Payment Agent
      to release any Guarantor from its obligations under a Guaranty pursuant to
      this
Section 9.10. In each case as specified in this
Section 9.10, the Collateral Agent or the Payment Agent, as
      applicable, will, at the Borrowers’ expense, execute and deliver to the
      applicable Loan Party such documents as such Loan Party may reasonably request
      to evidence the release of such item of Collateral from the assignment and
      security interest granted under the Collateral Documents or to subordinate
      its
      interest in such item, or to release such Guarantor from its obligations under
      the Guaranty, in each case in accordance with the terms of the Loan Documents
      and this Section 9.10. 

     

    ARTICLE
      X.


     

    CONTINUING
      GUARANTY


     

    10.01
Guaranty.
      Parent hereby
      absolutely and unconditionally guarantees, as a guaranty of payment and
      performance and not merely as a guaranty of collection, prompt payment when
      due,
      whether at stated maturity, by required prepayment, upon acceleration, demand
      or
      otherwise, and at all times thereafter, of any and all of the Obligations (in
      each case, after all applicable grace periods, if 

     

     

     

    -
      77 - 

     

    any,
      provided for in the Loan
      Documents), whether for principal, interest, premiums, fees, indemnities,
      damages, costs, expenses or otherwise, of the Borrowers to the Secured Parties,
      arising hereunder and under the other Loan Documents (including all renewals,
      extensions, amendments, refinancings and other modifications thereof and all
      costs, attorneys’ fees and expenses incurred by the Secured Parties in
      connection with the collection or enforcement thereof). The Payment Agent’s
      books and records showing the amount of the Obligations shall be admissible
      in
      evidence in any action or proceeding, and shall be binding upon Parent, and
      conclusive for the purpose of establishing the amount of the Obligations absent
      manifest error. This Guaranty shall not be affected by the genuineness,
      validity, regularity or enforceability of the Obligations or any instrument
      or
      agreement evidencing any Obligations, or by the existence, validity,
      enforceability, perfection, non-perfection or extent of any collateral therefor,
      or by any fact or circumstance relating to the Obligations which might otherwise
      constitute a defense to the obligations of Parent under this Guaranty (other
      than Indefeasible Payment and Performance of All Obligations), and Parent hereby
      irrevocably waives any defenses it may now have or hereafter acquire in any
      way
      relating to any or all of the foregoing (other than Indefeasible Payment and
      Performance of All Obligations). 

     

    10.02
Rights
      of Lenders.
      Parent consents and agrees that the Secured Parties may, at any time and from
      time to time, without notice or demand, and without affecting the enforceability
      or continuing effectiveness hereof: (a) amend, extend, renew, compromise,
      discharge, accelerate or otherwise change the time for payment or the terms
      of
      the Obligations or any part thereof; (b) take, hold, exchange, enforce,
      waive, release, fail to perfect, sell, or otherwise dispose of any security
      for
      the payment of this Guaranty or any Obligations; (c) apply such security
      and direct the order or manner of sale thereof as the Collateral Agent and
      the
      Lenders in their sole discretion may determine in accordance with the provisions
      of the Loan Documents; and (d) release or substitute one or more of any
      endorsers or other guarantors of any of the Obligations. Without limiting the
      generality of the foregoing, Parent consents to the taking of, or failure to
      take, any action which might in any manner or to any extent vary the risks
      of
      Parent under this Guaranty or which, but for this provision, might operate
      as a
      discharge of Parent. 

     

    10.03
Certain
      Waivers. Parent
      waives (a) any defense arising by reason of any disability or other defense
      of any Borrower or any other guarantor, or the cessation from any cause
      whatsoever (including any act or omission of any Secured Party) of the liability
      of any Borrower, other than Indefeasible Payment and Performance of All
      Obligations; (b) any defense based on any claim that Parent’s obligations
      exceed or are more burdensome than those of the Borrowers; (c) the benefit
      of any statute of limitations affecting Parent’s liability hereunder;
      (d) any right to proceed against any Borrower, proceed against or exhaust
      any security for the Obligations, or pursue any other remedy in the power of
      any
      Secured Party whatsoever until such time as Indefeasible Payment and Performance
      of All Obligations; (e) any benefit of and any right to participate in any
      security now or hereafter held by any Secured Party until such time as
      Indefeasible Payment and Performance of All Obligations; and (f) to the
      fullest extent permitted by law, any and all other defenses or benefits that
      may
      be derived from or afforded by applicable law limiting the liability of or
      exonerating guarantors or sureties (other than Indefeasible Payment and
      Performance of All Obligations). Parent expressly waives all setoffs and
      counterclaims and all presentments, demands for payment or performance, notices
      of nonpayment or nonperformance, protests, 

     

     

     

    -
      78 - 

     

    notices
      of protest, notices of
      dishonor and all other notices or demands of any kind or nature whatsoever
      with
      respect to the Obligations, and all notices of acceptance of this Guaranty
      or of
      the existence, creation or incurrence of new or additional Obligations.


     

    10.04
Obligations
      Independent. The obligations of Parent hereunder are those of primary
      obligor, and not merely as surety, and are independent of the Obligations and
      the obligations of any other guarantor, and a separate action may be brought
      against Parent to enforce this Guaranty whether or not any Borrower or any
      other
      person or entity is joined as a party. 

     

    10.05
Subrogation.
      Parent
      shall not exercise any right of subrogation, contribution, indemnity,
      reimbursement or similar rights with respect to any payments it makes under
      this
      Guaranty until all of the Obligations and any amounts payable under this
      Guaranty have been indefeasibly paid and performed in full. If any amounts
      are
      paid to Parent in violation of the foregoing limitation, then such amounts
      shall
      be held in trust for the benefit of the Secured Parties and shall forthwith
      be
      paid to the Secured Parties to reduce the amount of the Obligations, whether
      matured or unmatured. 

     

    10.06
Termination;
      Reinstatement. This Guaranty is a continuing and irrevocable guaranty of all
      Obligations now or hereafter existing and shall remain in full force and effect
      until Indefeasible Payment and Performance of All Obligations has occurred.
      Notwithstanding the foregoing, this Guaranty shall continue in full force and
      effect or be revived, as the case may be, if any payment by or on behalf of
      any
      Borrower or Parent is made, or any of the Secured Parties exercises its right
      of
      setoff, in respect of the Obligations and such payment or the proceeds of such
      setoff or any part thereof is subsequently invalidated, declared to be
      fraudulent or preferential, set aside or required (including pursuant to any
      settlement entered into by any of the Secured Parties in their discretion)
      to be
      repaid to a trustee, assignee, receiver or any other party, in connection with
      any case or proceeding under any Debtor Relief Laws or otherwise, all as if
      such
      payment had not been made or such setoff had not occurred and whether or not
      the
      Secured Parties are in possession of or have released this Guaranty and
      regardless of any prior revocation, rescission, termination or reduction. The
      obligations of Parent under this paragraph shall survive termination of this
      Guaranty. 

     

    10.07
Subordination.
      Parent
      hereby subordinates the payment of all obligations and indebtedness of the
      Borrowers owing to Parent, whether now existing or hereafter arising, relating
      to any obligation of the Borrowers to Parent as subrogee of the Secured Parties
      or resulting from Parent’s performance under this Guaranty, to the Indefeasible
      Payment and Performance of All Obligations. If the Secured Parties so request,
      any such obligation or indebtedness of any Borrower to Parent shall be enforced
      and performance received by Parent as trustee for the Secured Parties and the
      proceeds thereof shall be paid over to the Secured Parties on account of the
      Obligations, but without reducing or affecting in any manner the liability
      of
      Parent under this Guaranty. 

     

    10.08
Stay
      of Acceleration.
      If acceleration of the time for payment of any of the Obligations is stayed,
      in
      connection with any case or proceeding commenced by or against Parent or any
      Borrower under any Debtor Relief Laws, or otherwise, all such amounts shall
      nonetheless be payable by Parent immediately upon demand by the Secured Parties.
      

     

     

     

    -
      79 - 

     

    10.09
Condition
      of Borrowers.
      Parent acknowledges and agrees that it has the sole responsibility for, and
      has
      adequate means of, obtaining from the Borrowers and any other guarantor such
      information concerning the financial condition, business and operations of
      the
      Borrowers and any such other guarantor as Parent requires, and that none of
      the
      Secured Parties has any duty, and Parent is not relying on the Secured Parties
      at any time, to disclose to Parent any information relating to the business,
      operations or financial condition of any Borrower or any other guarantor (Parent
      waiving any duty on the part of the Secured Parties to disclose such information
      and any defense relating to the failure to provide the same). 

     

    ARTICLE
      XI.


     

    MISCELLANEOUS
      

     

    11.01
Amendments,
      Etc. No
      amendment or waiver of any provision of this Agreement or any other Loan
      Document, and no consent to any departure by any Borrower or any other Loan
      Party therefrom, shall be effective unless in writing signed by the Required
      Lenders and the Borrowers or the applicable Loan Party, as the case may be,
      and
      acknowledged by the Agents, and each such waiver or consent shall be effective
      only in the specific instance and for the specific purpose for which given;
      provided, however, that no such amendment, waiver or consent
      shall: 

     

    (a)
      waive any condition set forth in
Section 4.01 (other than Section 4.01(b)(i) or
(c)), without the written consent of each Lender; 

     

    (b)
      extend or increase the Term
      Commitment of any Lender (or reinstate any Term Commitment terminated pursuant
      to Section 8.02) without the written consent of such Lender;


     

    (c)
      postpone any date fixed by this
      Agreement or any other Loan Document for any payment of principal, interest,
      fees or other amounts due to the Lenders (or any of them) hereunder or under
      such other Loan Document without the written consent of each Lender entitled
      to
      such payment; 

     

    (d)
      reduce the principal of, or the
      rate of interest specified herein on, any Term Loan, or (subject to clause
      (ii) of the second proviso to this Section 11.01) any fees or
      other amounts payable hereunder or under any other Loan Document without the
      written consent of each Lender entitled to such amount; provided,
however, that only the consent of the Required Lenders shall be necessary
      to amend the definition of “Default Rate” or to waive any obligation of the
      Borrowers to pay interest at the Default Rate; 

     

    (e)
      change Section 8.03
      in a manner that would alter the pro rata sharing of payments required thereby
      without the written consent of each Lender; 

     

    (f)
      change any provision of this
Section 11.01 or the definition of “Required Lenders” or any other
      provision hereof specifying the number or percentage of Lenders required to
      amend, waive or otherwise modify any rights hereunder or make any determination
      or grant any consent hereunder (other than the definitions specified in clause
      (ii) of this Section 11.01(g)), without the written consent of
      each Lender; 

     

     


     

    -
      80 - 

     

    (g)
      release all or substantially all
      of the Collateral in any transaction or series of related transactions, without
      the written consent of each Lender; 

     

    (h)
      release all or substantially all
      of the value of a Guaranty, without the written consent of each Lender, except
      to the extent the release of any Subsidiary from a Guaranty is permitted
      pursuant to Section 9.10 (in which case such release may be made by
      the Payment Agent acting alone); or 

     

    (i)
      impose any greater restriction
      on the ability of any Lender to assign any of its rights or obligations
      hereunder without the written consent of the Required Lenders; 

     

    and
provided,
further,
      that (i) no amendment, waiver or consent shall, unless in writing and
      signed by the affected Agent in addition to the Lenders required above, affect
      the rights or duties of any Agent under this Agreement or any other Loan
      Document; and (ii) any Fee Letter may be amended, or rights or privileges
      thereunder waived, in a writing executed only by the parties thereto.
      Notwithstanding anything to the contrary herein, no Defaulting Lender shall
      have
      any right to approve or disapprove any amendment, waiver or consent hereunder,
      except that the Term Commitment of such Lender may not be increased or extended
      without the consent of such Lender. 

     

    11.02
Notices;
      Effectiveness;
      Electronic Communications. 

     

    (a)
Notices
      Generally. Except
      in the case of notices and other communications expressly permitted to be given
      by telephone (and except as provided in subsection (b) below), all notices
      and other communications provided for herein shall be in writing and shall
      be
      delivered by hand or overnight courier service, mailed by certified or
      registered mail or sent by telecopier as follows, and all notices and other
      communications expressly permitted hereunder to be given by telephone shall
      be
      made to the applicable telephone number, as follows: 

     

    (i)
      if to Parent, any Borrower or
      any Agent, to the address, telecopier number, electronic mail address or
      telephone number specified for such Person on Schedule 11.02; and


     

    (ii)
      if to any other Lender, to the
      address, telecopier number, electronic mail address or telephone number
      specified in Schedule 1.01(d) hereto. 

     

    Notices
      sent by hand or overnight
      courier service, or mailed by certified or registered mail, shall be deemed
      to
      have been given when received; notices sent by telecopier shall be deemed to
      have been given when sent (except that, if not given during normal business
      hours for the recipient, shall be deemed to have been given at the opening
      of
      business on the next business day for the recipient). Notices delivered through
      electronic communications to the extent provided in subsection (b) below
      shall be effective as provided in such subsection (b). 

     

     

     

    -
      81 - 

     

    (b)
Electronic
      Communications. Notices and other communications to the Lenders hereunder
      may be delivered or furnished by electronic communication (including e-mail
      and
      Internet or intranet websites), provided that the foregoing shall not
      apply to notices to any Lender pursuant to Article II if such Lender has
      notified the each Agent that it is incapable of receiving notices under such
      Article by electronic communication. Each Agent or the Borrowers may, in their
      discretion, agree to accept notices and other communications to it hereunder
      by
      electronic communications pursuant to procedures approved by it, provided
      that approval of such procedures may be limited to particular notices or
      communications. 

     

    Unless
      the Payment Agent otherwise
      prescribes, (i) notices and other communications sent to an e-mail address
      shall be deemed received upon the sender’s receipt of an acknowledgement from
      the intended recipient (such as by the “return receipt requested” function, as
      available, return e-mail or other written acknowledgement), provided that
      if such notice or other communication is not sent during the normal business
      hours of the recipient, such notice or communication shall be deemed to have
      been sent at the opening of business on the next business day for the recipient,
      and (ii) notices or communications posted to an Internet or intranet
      website shall be deemed received upon the deemed receipt by the intended
      recipient at its e-mail address as described in the foregoing clause (i) of
      notification that such notice or communication is available and identifying
      the
      website address therefor. 

     

    (c)
The
      Platform. THE
      PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT PARTIES (AS DEFINED
      BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS
      OR
      THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN
      OR
      OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED
      OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A
      PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM
      VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH
      THE
      BORROWER MATERIALS OR THE PLATFORM. In no event shall any Agent or any of their
      respective Related Parties (collectively, the “Agent Parties”) have any
      liability to Parent, any Borrower, any Lender, the other Agent or any other
      Person for losses, claims, damages, liabilities or expenses of any kind (whether
      in tort, contract or otherwise) arising out of any Borrower’s or any Agent’s
      transmission of Borrower Materials through the Internet, except to the extent
      that such losses, claims, damages, liabilities or expenses are determined by
      a
      court of competent jurisdiction by a final and nonappealable judgment to have
      resulted from the gross negligence or willful misconduct of such Agent Party;
      provided, however, that in no event shall any Agent Party have any
      liability to Parent, any Borrower, any Lender, the other Agent or any other
      Person for indirect, special, incidental, consequential or punitive damages
      (as
      opposed to direct or actual damages). 

     

    (d)
Change
      of Address, Etc.
      Each of Parent, each Borrower and each Agent may change its address, telecopier
      or telephone number for notices and other communications hereunder by notice
      to
      the other parties hereto. Each other Lender may change its address, telecopier
      or telephone number for notices and other communications hereunder by notice
      to
      the Borrowers and the Payment Agent. In addition, each Lender agrees to notify
      the Payment Agent from time to time to ensure that the Payment Agent has on
      record (i) an effective address, contact name, telephone number, telecopier
      number and electronic mail address to which notices and other 

     

     

     

    -
      82 - 

     

    communications
      may be sent and
      (ii) accurate wire instructions for such Lender. Furthermore, each Public
      Lender agrees to cause at least one individual at or on behalf of such Public
      Lender to at all times have selected the “Private Side Information” or similar
      designation on the content declaration screen of the Platform in order to enable
      such Public Lender or its delegate, in accordance with such Public Lender’s
      compliance procedures and applicable Law, including United States Federal and
      state securities Laws, to make reference to Borrower Materials that are not
      made
      available through the “Public Side Information” portion of the Platform and that
      may contain material non-public information with respect to any Borrower or
      its
      securities for purposes of United States Federal or state securities laws.
      

     

    (e)
Reliance
      by Agents and
      Lenders.The Agents and the Lenders shall be entitled to rely and act upon
      any notices purportedly given by or on behalf of any Borrower even if
      (i) such notices were not made in a manner specified herein, were
      incomplete or were not preceded or followed by any other form of notice
      specified herein, or (ii) the terms thereof, as understood by the
      recipient, varied from any confirmation thereof. The Borrowers shall indemnify
      each Agent, each Lender and the Related Parties of each of them from all losses,
      costs, expenses and liabilities resulting from the reliance by such Person
      on
      each notice purportedly given by or on behalf of any Borrower. All telephonic
      notices to and other telephonic communications with each Agent may be recorded
      by such Agent, and each of the parties hereto hereby consents to such recording.
      

     

    11.03
No
      Waiver; Cumulative
      Remedies. No failure by any Lender or any Agent to exercise, and no delay by
      any such Person in exercising, any right, remedy, power or privilege hereunder
      or under any other Loan Document 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. The rights, remedies, powers and
      privileges herein provided, and provided under each other Loan Document, are
      cumulative and not exclusive of any rights, remedies, powers and privileges
      provided by law. 

     

    11.04
Expenses;
      Indemnity; Damage
      Waiver. 

     

    (a)
Costs
      and Expenses. The
      Borrowers shall pay (i) all reasonable out-of-pocket expenses incurred by
      the Agents and their respective Affiliates (including the reasonable fees,
      charges and disbursements of counsel for each Agent), in connection with the
      syndication of the credit facilities provided for herein, the preparation,
      negotiation, execution, delivery and administration of this Agreement and the
      other Loan Documents or any amendments, modifications or waivers of the
      provisions hereof or thereof (whether or not the transactions contemplated
      hereby or thereby shall be consummated), and (ii) all out-of-pocket
      expenses incurred by any Agent or any Lender (including the fees, charges and
      disbursements of any counsel for any Agent or any Lender), in connection with
      the enforcement or protection of its rights (A) in connection with this
      Agreement and the other Loan Documents, including its rights under this Section,
      or (B) in connection with Term Loans made hereunder, including all such
      out-of-pocket expenses incurred during any workout, restructuring or
      negotiations in respect of such Term Loans. 

     

     

     

    -
      83 - 

     

    (b)
Indemnification
      by the
      Borrowers. The Borrowers shall indemnify each Agent (and any sub-agent
      thereof), each Lender, and each Related Party of any of the foregoing Persons
      (each such Person being called an “Indemnitee”) against, and hold each
      Indemnitee harmless from, any and all losses (including, without limitation,
      Environmental Losses), claims, damages, liabilities and related expenses
      (including the fees, charges and disbursements of any counsel for any
      Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee
      by
      any third party or by any Borrower or any other Loan Party arising out of,
      in
      connection with, or as a result of (i) the execution or delivery of this
      Agreement, any other Loan Document or any agreement or instrument contemplated
      hereby or thereby, the performance by the parties hereto of their respective
      obligations hereunder or thereunder or the consummation of the transactions
      contemplated hereby or thereby, or, in the case of any Agent (and any sub-agent
      thereof) and its Related Parties only, the administration of this Agreement
      and
      the other Loan Documents, (ii) any Term Loan or the use or proposed use of
      the proceeds therefrom, (iii) any actual or alleged presence or release of
      Hazardous Materials on, under, from or about any property owned or operated
      by
      any Borrower or any of their respective Subsidiaries, or any Environmental
      Liability related in any way to any Borrower or any of their respective
      Subsidiaries, or (iv) any actual or prospective claim, litigation,
      investigation or proceeding relating to any of the foregoing, whether based
      on
      contract, tort, Applicable Law or any other theory, whether brought by a third
      party or by any Borrower or any other Loan Party or any of the Borrower’s or
      such Loan Party’s directors, shareholders or creditors, and regardless of
      whether any Indemnitee is a party thereto, IN ALL CASES, WHETHER OR NOT CAUSED
      BY OR ARISING, IN WHOLE OR IN PART, OUT OF THE COMPARATIVE, CONTRIBUTORY OR
      SOLE
      NEGLIGENCE OF THE INDEMNITEE; provided that such indemnity shall not, as
      to any Indemnitee, be available to the extent that such losses, claims, damages,
      liabilities or related expenses (x) are determined by a court of competent
      jurisdiction by final and nonappealable judgment to have resulted from the
      gross
      negligence or willful misconduct of such Indemnitee or (y) result from a
      claim brought by any Borrower or any other Loan Party against an Indemnitee
      for
      breach in bad faith of such Indemnitee’s obligations hereunder or under any
      other Loan Document, if such Borrower or such Loan Party has obtained a final
      and nonappealable judgment in its favor on such claim as determined by a court
      of competent jurisdiction. The foregoing indemnity shall in no manner be
      construed to limit or adversely affect any of Indemnitee’s other rights under
      this Agreement, including Indemnitee’s rights to approve any remedial work or
      the contractors and consulting engineers retained in connection therewith.
      

     

    (c)
Reimbursement
      by Lenders.
      To the extent that the Borrowers for any reason fail to indefeasibly pay any
      amount required under subsection (a) or (b) of this Section to be paid
      by it to any Agent (or any sub-agent thereof) or any Related Party of any of
      the
      foregoing, each Lender severally agrees to pay to such Agent (or any such
      sub-agent) or such Related Party, as the case may be, such Lender’s Applicable
      Percentage (determined as of the time that the applicable unreimbursed expense
      or indemnity payment is sought) of such unpaid amount, provided that the
      unreimbursed expense or indemnified loss, claim, damage, liability or related
      expense, as the case may be, was incurred by or asserted against such Agent
      (or
      any such sub-agent) in its capacity as such, or against any Related Party of
      any
      of the foregoing acting for such Agent (or any such sub-agent) in connection
      with such capacity. The obligations of the Lenders under this
      subsection (c) are subject to the provisions of
Section 2.08(c). 

     

     

     

    -
      84 - 

     

    (d)
Waiver
      of Consequential
      Damages, Etc. To the fullest extent permitted by applicable law, no Borrower
      shall assert, and each Borrower hereby waives, any claim against any Indemnitee,
      on any theory of liability, for special, indirect, consequential or punitive
      damages (as opposed to direct or actual damages) arising out of, in connection
      with, or as a result of, this Agreement, any other Loan Document or any
      agreement or instrument contemplated hereby, the transactions contemplated
      hereby or thereby, any Term Loan or the use of the proceeds thereof. No
      Indemnitee referred to in subsection (b) above shall be liable for any
      damages arising from the use by unintended recipients of any information or
      other materials distributed to such unintended recipients by such Indemnitee
      through telecommunications, electronic or other information transmission systems
      in connection with this Agreement or the other Loan Documents or the
      transactions contemplated hereby or thereby other than for direct or actual
      damages resulting from the gross negligence or willful misconduct of such
      Indemnitee as determined by a final and nonappealable judgment of a court of
      competent jurisdiction. 

     

    (e)
Payments.
      All amounts due
      under this Section shall be payable not later than ten Business Days after
      demand therefor. 

     

    (f)
Survival.
      The agreements
      in this Section shall survive the resignation of any Agent, the replacement
      of
      any Lender, the termination of the Term Commitments and the repayment,
      satisfaction or discharge of all the other Obligations. 

     

    11.05
Payments
      Set Aside. To
      the extent that any payment by or on behalf of any Borrower is made to any
      Agent
      or any Lender, or any Agent or any Lender exercises its right of setoff, and
      such payment or the proceeds of such setoff or any part thereof is subsequently
      invalidated, declared to be fraudulent or preferential, set aside or required
      (including pursuant to any settlement entered into by such Agent or such Lender
      in its discretion) to be repaid to a trustee, receiver or any other party,
      in
      connection with any proceeding under any Debtor Relief Law or otherwise, then
      (a) to the extent of such recovery, the obligation or 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 setoff had not occurred,
      and (b) each Lender severally agrees to pay to the Payment Agent upon
      demand its applicable share (without duplication) of any amount so recovered
      from or repaid by the Payment Agent, plus interest thereon from the date
      of such demand to the date such payment is made at a rate per annum equal to
      the
      Federal Funds Rate from time to time in effect. The obligations of the Lenders
      under clause (b) of the preceding sentence shall survive the payment in
      full of the Obligations and the termination of this Agreement. 

     

    11.06
Successors
      and Assigns.


     

    (a)
Successors
      and Assigns
      Generally. The provisions of this Agreement shall be binding upon and inure
      to the benefit of the parties hereto and their respective successors and assigns
      permitted hereby, except that neither any Borrower nor any other Loan Party
      may
      assign or otherwise transfer any of its rights or obligations hereunder without
      the prior written consent of the Payment Agent and each Lender and no Lender
      may
      assign or otherwise transfer any of its rights or obligations hereunder except
      (i) to an assignee in accordance with the provisions of
Section 11.06(b), (ii) by way of participation in accordance
      with the provisions of Section 11.06(d), or (iii) by way of
      pledge or assignment of a security interest subject to the restrictions of
      Section 11.06(f) (and any 

     

     

     

    -
      85 - 

     

    other
      attempted assignment or
      transfer by any party hereto shall be null and void). Nothing in this Agreement,
      expressed or implied, shall be construed to confer upon any Person (other than
      the parties hereto, their respective successors and assigns permitted hereby,
      Participants to the extent provided in subsection (d) of this Section and,
      to the extent expressly contemplated hereby, the Related Parties of each of
      the
      Agents and the Lenders) any legal or equitable right, remedy or claim under
      or
      by reason of this Agreement. 

     

    (b)
Assignments
      by Lenders.
      Any Lender may at any time assign to one or more assignees all or a portion
      of
      its rights and obligations under this Agreement (including all or a portion
      of
      the Term Loans at the time owing to it); provided that any such
      assignment shall be subject to the following conditions: 

     

    (i)
Minimum
      Amounts.


     

    (A)
      in the case of an assignment of
      the entire remaining amount of the assigning Lender’s Term Loans at the time
      owing to it under the Term Facility or in the case of an assignment to a Lender,
      an Affiliate of a Lender or an Approved Fund, no minimum amount need be
      assigned; and 

     

    (B)
      in any case not described in
      subsection (b)(i)(A) of this Section, the principal outstanding balance of
      the
      Term Loans of the assigning Lender subject to each such assignment, determined
      as of the date the Assignment and Assumption with respect to such assignment
      is
      delivered to the Collateral Agent or, if “Trade Date” is specified in the
      Assignment and Assumption, as of the Trade Date, shall not be less than
      $1,000,000, unless the Collateral Agent otherwise consents (such consent not
      to
      be unreasonably withheld or delayed); provided, however, that
      concurrent assignments to members of an Assignee Group and concurrent
      assignments from members of an Assignee Group to a single Eligible Assignee
      (or
      to an Eligible Assignee and members of its Assignee Group) will be treated
      as a
      single assignment for purposes of determining whether such minimum amount has
      been met; 

     

    (ii)
Proportionate
      Amounts.
      Each partial assignment shall be made as an assignment of a proportionate part
      of all the assigning Lender’s rights and obligations under this Agreement with
      respect to the Term Loans assigned; 

     

    (iii)
Required
      Consents. No
      consent shall be required for any assignment except to the extent required
      by
subsection (b)(i)(B) of this Section and, in addition: 

     

    (A)
      the consent of ThermaClime (such
      consent not to be unreasonably withheld or delayed) shall be required unless
      (1) an Event of Default has occurred and is continuing at the time of such
      assignment or (2) such assignment is to an Eligible Assignee (as defined in
clause (a) of such definition) that as of the date of the proposed
      assignment or sale would not be subject to capital adequacy or similar
      requirements under Section 3.04(b) or increased costs under
Section 3.04(a); and 

     

     

     

    -
      86 - 

     

    (B)
      the consent of the Payment Agent
      (such consent not to be unreasonably withheld or delayed) shall be required
      for
      assignments in respect of any Term Loan to a Person that is not an Eligible
      Assignee (as defined in clause (a) of such definition).


     

    (iv)
Assignment
      and
      Assumption. The parties to each assignment shall execute and deliver to the
      Payment Agent an Assignment and Assumption, together with a processing and
      recordation fee in the amount of $3,500; provided, however, that
      the Payment Agent may, in its sole discretion, elect to waive such processing
      and recordation fee in the case of any assignment. The assignee, if it is not
      a
      Lender, shall deliver to the Payment Agent an Administrative Questionnaire.
      

     

    (v)
No
      Assignment to Parent or
      Borrowers. No such assignment shall be made to Parent, any Borrower or any
      of their respective Affiliates or Subsidiaries. 

     

    (vi)
No
      Assignment to Natural
      Persons. No such assignment shall be made to a natural person. 

     

    Subject
      to acceptance and recording
      thereof by the Payment Agent pursuant to subsection (c) of this Section,
      from and after the effective date specified in each Assignment and Assumption,
      the assignee thereunder shall be a party to this Agreement and, to the extent
      of
      the interest assigned by such Assignment and Assumption, have the rights and
      obligations of a Lender under this Agreement, and the assigning Lender
      thereunder shall, to the extent of the interest assigned by such Assignment
      and
      Assumption, be released from its obligations under this Agreement (and, in
      the
      case of an Assignment and Assumption covering all of the assigning Lender’s
      rights and obligations under this Agreement, such Lender shall cease to be
      a
      party hereto) but shall continue to be entitled to the benefits of Sections
      3.01, 3.04, 3.05 and 11.04 with respect to facts and
      circumstances occurring prior to the effective date of such assignment. Upon
      request, the Borrowers (at their expense) shall execute and deliver a Term
      Note
      to the assignee Lender. Any assignment or transfer by a Lender of rights or
      obligations under this Agreement that does not comply with this subsection
      shall
      be treated for purposes of this Agreement as a sale by such Lender of a
      participation in such rights and obligations in accordance with
Section 11.06(d). 

     

    (c)
Register.
      The Payment
      Agent, acting solely for this purpose as an Agent of the Borrowers, shall
      maintain at the Payment Agent’s Office a copy of each Assignment and Assumption
      delivered to it and a register for the recordation of the names and addresses
      of
      the Lenders, and the principal amounts of the Term Loans owing to, each Lender
      pursuant to the terms hereof from time to time (the “Register”). The
      entries in the Register shall be conclusive, and the Borrowers, the Payment
      Agent and the Lenders may treat each Person whose name is recorded in the
      Register pursuant to the terms hereof as a Lender hereunder for all purposes
      of
      this Agreement, notwithstanding notice to the contrary. The Register shall
      be
      available for inspection by the Borrowers and any Lender, at any reasonable
      time
      and from time to time upon reasonable prior notice. 

     

     

     

    -
      87 - 

     

    (d)
Participations.
      Any
      Lender may at any time, without the consent of, or notice to, the Borrowers
      or
      the Agents, sell participations to any Person (other than a natural person
      or
      any Borrower or any of the Borrowers’ Affiliates or Subsidiaries) (each, a
“Participant”) in all or a portion of such Lender’s rights and/or
      obligations under this Agreement (including all or a portion of the Term Loans);
      provided that (i) such Lender’s obligations under this Agreement
      shall remain unchanged, (ii) such Lender shall remain solely responsible to
      the other parties hereto for the performance of such obligations and
      (iii) the Borrowers, the Agents and the Lenders shall continue to deal
      solely and directly with such Lender in connection with such Lender’s rights and
      obligations under this Agreement. Any agreement or instrument pursuant to which
      a Lender sells such a participation shall provide that such Lender shall retain
      the sole right to enforce this Agreement and to approve any amendment,
      modification or waiver of any provision of this Agreement; provided that
      such agreement or instrument may provide that such Lender will not, without
      the
      consent of the Participant, agree to any amendment, waiver or other modification
      described in the first proviso to Section 11.01 that affects such
      Participant. Subject to subsection (e) of this Section, each
      Borrower agrees that each Participant shall be entitled to the benefits of
      Sections 3.01, 3.04 and 3.05 to the same extent as if
      it were a Lender and had acquired its interest by assignment pursuant to
Section 11.06(b). To the extent permitted by law, each Participant
      also shall be entitled to the benefits of Section 11.08 as though it
      were a Lender, provided such Participant agrees to be subject to
Section 2.09 as though it were a Lender. 

     

    (e)
Limitations
      upon Participant
      Rights. A Participant shall not be entitled to receive any greater payment
      under Section 3.01 or 3.04 than the applicable Lender would
      have been entitled to receive with respect to the participation sold to such
      Participant, unless the sale of the participation to such Participant is made
      with ThermaClime’s prior written consent. A Participant that would be a Foreign
      Lender if it were a Lender shall not be entitled to the benefits of
Section 3.01 unless the Borrowers are notified of the participation
      sold to such Participant and such Participant agrees, for the benefit of the
      Borrowers, to comply with Section 3.01(e) as though it were a
      Lender. 

     

    (f)
Certain
      Pledges. Any
      Lender may at any time pledge or assign a security interest in all or any
      portion of its rights under this Agreement (including under its Term Note,
      if
      any) to secure obligations of such Lender, including any pledge or assignment
      to
      secure obligations to a Federal Reserve Bank; provided that no such
      pledge or assignment shall release such Lender from any of its obligations
      hereunder or substitute any such pledgee or assignee for such Lender as a party
      hereto. 

     

    (g)
Electronic
      Execution of
      Assignments. The words “execution,” “signed,” “signature,” and words of like
      import in any Assignment and Assumption shall be deemed to include electronic
      signatures or the keeping of records in electronic form, each of which shall
      be
      of the same legal effect, validity or enforceability as a manually executed
      signature or the use of a paper-based recordkeeping system, as the case may
      be,
      to the extent and as provided for in any applicable law, including the Federal
      Electronic Signatures in Global and National Commerce Act, the New York State
      Electronic Signatures and Records Act, or any other similar state laws based
      on
      the Uniform Electronic Transactions Act. 

     

     

     

    -
      88 - 

     

    11.07
Treatment
      of Certain
      Information; Confidentiality. Each of the Agents and the Lenders agrees to
      maintain the confidentiality of the Information (as defined below), except
      that
      Information may be disclosed (a) to its Affiliates and to its and its
      Affiliates’ respective partners, directors, officers, employees, agents,
      advisors and representatives (it being understood that the Persons to whom
      such
      disclosure is made will be informed of the confidential nature of such
      Information and instructed to keep such Information confidential), (b) to
      the extent requested by any regulatory authority purporting to have jurisdiction
      over it (including any self-regulatory authority, such as the National
      Association of Insurance Commissioners), (c) to the extent required by
      applicable laws or regulations or by any subpoena or similar legal process,
      (d) to any other party hereto, (e) in connection with the exercise of
      any remedies hereunder or under any other Loan Document or any action or
      proceeding relating to this Agreement or any other Loan Document or the
      enforcement of rights hereunder or thereunder, (f) subject to an agreement
      containing provisions substantially the same as those of this Section, to
      (i) any assignee of or Participant in, or any prospective assignee of or
      Participant in, any of its rights or obligations under this Agreement or
      (ii) any actual or prospective counterparty (or its advisors) to any swap
      or derivative transaction relating to the Borrowers and their obligations,
      (g) with the consent of any Borrower or (h) to the extent such
      Information (i) becomes publicly available other than as a result of a
      breach of this Section or (ii) becomes available to any Agent, any Lender
      or any of their respective Affiliates on a nonconfidential basis from a source
      other than the Borrowers. 

     

    For
      purposes of this Section,
“Information” means all information received from any Loan Party or any
      Subsidiary thereof relating to any Loan Party or any Subsidiary thereof or
      their
      respective businesses, other than any such information that is available to
      any
      Agent or any Lender on a nonconfidential basis prior to disclosure by any Loan
      Party or any Subsidiary thereof, provided that, in the case of
      information received from a Loan Party or any such Subsidiary after the date
      hereof, such information is clearly identified at the time of delivery as
      confidential. Any Person required to maintain the confidentiality of Information
      as provided in this Section shall be considered to have complied with its
      obligation to do so if such Person has exercised the same degree of care to
      maintain the confidentiality of such Information as such Person would accord
      to
      its own confidential information. 

     

    Each
      of the Agents and the Lenders
      acknowledges that (a) the Information may include material non-public
      information concerning a Borrower or a Subsidiary, as the case may be,
      (b) it has developed compliance procedures regarding the use of material
      non-public information and (c) it will handle such material non-public
      information in accordance with applicable Law, including United States Federal
      and state securities Laws. 

     

    11.08
Right
      of Setoff. If an
      Event of Default shall have occurred and be continuing, each Lender and each
      of
      their respective Affiliates is hereby authorized at any time and from time
      to
      time, to the fullest extent permitted by applicable law, to set off and apply
      any and all deposits (general or special, time or demand, provisional or final,
      in whatever currency) at any time held and other obligations (in whatever
      currency) at any time owing by such Lender or any such Affiliate to or for
      the
      credit or the account of any Borrower or any other Loan Party against any and
      all of the obligations of such Borrower or such Loan Party now or hereafter
      existing under this Agreement or any other Loan Document to such Lender,
      irrespective of whether or not such Lender shall have 

     

     

     

    -
      89 - 

     

    made
      any demand under this Agreement
      or any other Loan Document and although such obligations of such Borrower or
      such Loan Party may be contingent or unmatured or are owed to a branch or office
      of such Lender different from the branch or office holding such deposit or
      obligated on such indebtedness. The rights of each Lender and their respective
      Affiliates under this Section are in addition to other rights and remedies
      (including other rights of setoff) that such Lender or its Affiliates may have.
      Each Lender agrees to notify the Borrowers and the Payment Agent promptly after
      any such setoff and application, provided that the failure to give such notice
      shall not affect the validity of such setoff and application. 

     

    11.09
Interest
      Rate
      Limitation. Notwithstanding anything to the contrary contained in any Loan
      Document, the interest paid or agreed to be paid under the Loan Documents shall
      not exceed the maximum rate of non-usurious interest permitted by applicable
      Law
      (the “Maximum Rate”). If any Agent or any Lender shall receive interest
      in an amount that exceeds the Maximum Rate, the excess interest shall be applied
      to the principal of the Term Loans or, if it exceeds such unpaid principal,
      refunded to the Borrowers. In determining whether the interest contracted for,
      charged, or received by an Agent or a Lender exceeds the Maximum Rate, such
      Person may, to the extent permitted by applicable Law, (a) characterize any
      payment that is not principal as an expense, fee, or premium rather than
      interest, (b) exclude voluntary prepayments and the effects thereof, and
      (c) amortize, prorate, allocate, and spread in equal or unequal parts the
      total amount of interest throughout the contemplated term of the Obligations
      hereunder. 

     

    11.10
Counterparts;
      Integration;
      Effectiveness. This Agreement may be executed in counterparts (and by
      different parties hereto in different counterparts), each of which shall
      constitute an original, but all of which when taken together shall constitute
      a
      single contract. This Agreement and the other Loan Documents constitute the
      entire contract among the parties relating to the subject matter hereof and
      supersede any and all previous agreements and understandings, oral or written,
      relating to the subject matter hereof. Except as provided in Section 4.01,
      this Agreement shall become effective when it shall have been executed by the
      Agents and when the Payment Agent shall have received counterparts hereof that,
      when taken together, bear the signatures of each of the other parties hereto.
      Delivery of an executed counterpart of a signature page of this Agreement by
      telecopy shall be effective as delivery of a manually executed counterpart
      of
      this Agreement. 

     

    11.11
Survival
      of Representations
      and Warranties. All representations and warranties made hereunder and in any
      other Loan Document or other document delivered pursuant hereto or thereto
      or in
      connection herewith or therewith shall survive the execution and delivery hereof
      and thereof. Such representations and warranties have been or will be relied
      upon by each Agent and each Lender, regardless of any investigation made by
      any
      Agent or any Lender or on their behalf and notwithstanding that any Agent or
      any
      Lender may have had notice or knowledge of any Default at the time of any Term
      Loan, and shall continue in full force and effect as long as any Term Loan
      or
      any other Obligation hereunder shall remain unpaid or unsatisfied. 

     

    11.12
Severability.
      If any
      provision of this Agreement or the other Loan Documents is held to be illegal,
      invalid or unenforceable, (a) the legality, validity and enforceability of
      the remaining provisions of this Agreement and the other Loan Documents shall
      not be affected or impaired thereby and (b) the parties shall endeavor in
      good faith negotiations to replace the 

     

     

     

    -
      90 - 

     

    illegal,
      invalid or unenforceable
      provisions with valid provisions the economic effect of which comes as close
      as
      possible to that of the illegal, invalid or unenforceable provisions. The
      invalidity of a provision in a particular jurisdiction shall not invalidate
      or
      render unenforceable such provision in any other jurisdiction. 

     

    11.13
Replacement
      of Lenders.
      If any Lender requests compensation under Section 3.04, or if the Borrowers
      are required to pay any additional amount to any Lender or any Governmental
      Authority for the account of any Lender pursuant to Section 3.01, or if any
      Lender is a Defaulting Lender, then the Borrowers may, at their sole expense
      and
      effort, upon notice to such Lender and the Payment Agent, require such Lender
      to
      assign and delegate, without recourse (in accordance with and subject to the
      restrictions contained in, and consents required by, Section 11.06), all of
      its interests, rights and obligations under this Agreement and the related
      Loan
      Documents to an assignee that shall assume such obligations (which assignee
      may
      be another Lender, if a Lender accepts such assignment), provided that:


     

    (a)
      the Borrowers shall have paid to
      the Payment Agent the assignment fee specified in Section 11.06(b);


     

    (b)
      such Lender shall have received
      payment of an amount equal to the outstanding principal of its Term Loans,
      accrued interest thereon, accrued fees and all other amounts payable to it
      hereunder and under the other Loan Documents (including any amounts under
Section 3.05) from the assignee (to the extent of such outstanding
      principal and accrued interest and fees) or the Borrowers (in the case of all
      other amounts); 

     

    (c)
      in the case of any such
      assignment resulting from a claim for compensation under
Section 3.04 or payments required to be made pursuant to
Section 3.01, such assignment will result in a reduction in such
      compensation or payments thereafter; and 

     

    (d)
      such assignment does not
      conflict with applicable Laws. 

     

    A
      Lender shall not be required to
      make any such assignment or delegation if, prior thereto, as a result of a
      waiver by such Lender or otherwise, the circumstances entitling the Borrowers
      to
      require such assignment and delegation cease to apply. 

     

    11.14
Governing
      Law;
      Jurisdiction; Etc. 

     

    (a)
GOVERNING
      LAW. THIS
      AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF
      THE
      STATE OF NEW YORK. 

     

    (b)
SUBMISSION
      TO
      JURISDICTION. EACH BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND
      UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE
      JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY
      AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK,
      AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING
      OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR
      RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE 

     

     

     

    -
      91 - 

     

    PARTIES
      HERETO IRREVOCABLY AND
      UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
      PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO
      THE
      FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF
      THE
      PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING
      SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
      JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT
      OR IN
      ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT ANY AGENT OR ANY LENDER
      MAY
      OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
      OR
      ANY OTHER LOAN DOCUMENT AGAINST ANY BORROWER OR ANY OTHER LOAN PARTY OR ITS
      PROPERTIES IN THE COURTS OF ANY JURISDICTION. 

     

    (c)
WAIVER
      OF VENUE. EACH
      BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES,
      TO
      THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW
      OR
      HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT
      OF
      OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED
      TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY
      IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE
      DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING
      IN ANY SUCH COURT. 

     

    (d)
SERVICE
      OF PROCESS. EACH
      PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED
      FOR NOTICES IN SECTION 11.02. NOTHING IN THIS AGREEMENT WILL AFFECT
      THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED
      BY
      APPLICABLE LAW 

     

    11.15
Waiver
      of Jury Trial.
      EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
      BY
      APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
      DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
      OTHER
      LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED
      ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
      THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED,
      EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF
      LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT
      IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT
      AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
      CERTIFICATIONS IN THIS SECTION. 

     

     

     

    -
      92 - 

     

    11.16
No
      Advisory or Fiduciary
      Responsibility. In connection with all aspects of each transaction
      contemplated hereby (including in connection with any amendment, waiver or
      other
      modification hereof or of any other Loan Document), each of the Borrowers and
      Parent acknowledges and agrees, and acknowledges its Affiliates’ understanding,
      that: (i) (A) the arranging and other services regarding this
      Agreement provided by the Agents and the Arranger are arm’s-length commercial
      transactions between the Borrowers, Parent and their respective Affiliates,
      on
      the one hand, and the Agents and the Arranger, on the other hand, (B) each
      of the Borrowers and Parent has consulted its own legal, accounting, regulatory
      and tax advisors to the extent it has deemed appropriate, and (C) each of
      the Borrowers and Parent is capable of evaluating, and understands and accepts,
      the terms, risks and conditions of the transactions contemplated hereby and
      by
      the other Loan Documents; (ii) (A) each Agent and the Arranger each is
      and has been acting solely as a principal and, except as expressly agreed in
      writing by the relevant parties, has not been, is not, and will not be acting
      as
      an advisor, agent or fiduciary for any Borrower, Parent or any of their
      respective Affiliates, or any other Person and (B) none of the Agents nor
      the Arranger has any obligation to any Borrower, Parent or any of their
      respective Affiliates with respect to the transactions contemplated hereby
      except those obligations expressly set forth herein and in the other Loan
      Documents; and (iii) the Agents and the Arranger and their respective
      Affiliates may be engaged in a broad range of transactions that involve
      interests that differ from those of the Borrowers, Parent and their respective
      Affiliates, and none of the Agents nor the Arranger has any obligation to
      disclose any of such interests to any Borrower, Parent or any of their
      respective Affiliates. To the fullest extent permitted by law, each of the
      Borrowers and Parent hereby waives and releases any claims that it may have
      against the Agents and the Arranger with respect to any breach or alleged breach
      of agency or fiduciary duty in connection with any aspect of any transaction
      contemplated hereby. 

     

    11.17
Joint
      and Several
      Liability. 

     

    (a)
      Each Borrower has determined
      that it is in its best interest and in pursuance of its legitimate business
      purposes to induce the Lenders to extend credit to the Borrowers pursuant to
      this Agreement. Each Borrower acknowledges and represents that its business
      is
      integrally related to the business of the other Borrowers, that the availability
      of the Term Loans to any of the Borrowers benefits each of the Borrowers
      individually and that the Term Loans made will be for and inure to the benefit
      of each of the Borrowers, individually and as a group. Accordingly, the
      Borrowers shall be jointly and severally liable for the Obligations.
      Additionally, the Borrowers shall be jointly and severally liable (as a
      principal and not as a surety, guarantor or other accommodation party) for
      each
      and every representation, warranty, covenant and obligation made by or to be
      performed by the Borrowers or any Borrower under this Agreement, the Term Notes
      and the other Loan Documents, and each Borrower acknowledges that, in extending
      the credit provided herein, the Agents and the Lenders are relying upon the
      fact
      that the obligations of each Borrower hereunder are the joint and several
      obligations of a principal. 

     

    (b)
      To the maximum extent permitted
      by law, until such time as Indefeasible Payment and Performance of All
      Obligations has occurred each Borrower hereby waives any claim, right or remedy
      which such Borrower now has or hereafter acquires against any other Borrower
      that arises hereunder including, without limitation, any claim, remedy or right
      of subrogation, reimbursement, exoneration, contribution, indemnification,
      or
      participation in any claim, right or remedy of any Agent or any Lender against
      any 

     

     

     

    -
      93 - 

     

    Borrower
      or any Collateral which any
      Agent or any Lender now has or hereafter acquires, whether or not such claim,
      right or remedy arises in equity, under contract, by statute, under common
      law.
      In addition, until such time as Indefeasible Payment and Performance of All
      Obligations has occurred each Borrower hereby waives any right to proceed
      against the other Borrowers, now or hereafter, for contribution, indemnity,
      reimbursement, and any other suretyship rights and claims, whether direct or
      indirect, liquidated or contingent, whether arising under express or implied
      contract or by operation of law, which any Borrower may now have or hereafter
      have as against the other Borrowers with respect to the Obligations and each
      Borrower also hereby waives any rights of recourse to or with respect to any
      asset of the other Borrowers. 

     

    11.18
Certain
      Consents and
      Additional Waivers. 

     

    (a)
      The Agents and the Lenders may,
      at any time and from time to time (after the expiration of any applicable grace
      or cure periods expressly provided for in the Loan Documents), without the
      consent of or notice to any Loan Party, except such notice as may be required
      by
      applicable statute and which cannot be waived, without incurring responsibility
      to any Loan Party, and without impairing or releasing the obligations of any
      Loan Party in whole or in part, (i) exercise or refrain from exercising any
      rights against any Loan Party, (ii) to the extent permitted pursuant to the
      terms of the Loan Documents sell, exchange, release, surrender, realize upon
      or
      otherwise deal with in any manner or in any order any property pledged or
      mortgaged to secure or in any manner securing the Obligations, (iii) take
      and hold any additional security for any or all of the Obligations,
      (iv) apply any sums by whomsoever paid or howsoever realized to any
      Obligations of any Loan Party to the Agents or the Lenders regardless of what
      Obligations remain unpaid. 

     

    (b)
      Unless otherwise expressly
      provided herein, each Loan Party hereby waives, to the maximum extent permitted
      under applicable law, any and all benefits and defenses under any statute,
      regulation, judicial decision or other law which purports to exonerate or reduce
      the liability of any other Loan Party as a result of any disability or absence
      of liability of such other Loan Party or any defense to liability or enforcement
      which any other Loan Party may have and agrees that, by so doing, such Loan
      Party’s obligations hereunder shall continue even if the other Loan Parties have
      no liability at the time of execution of this Agreement or thereafter ceased
      or
      cease to be liable. Each Loan Party also waives, to the maximum extent permitted
      under applicable law, any and all benefits and defenses under any statute,
      regulation, judicial decision or other law which purports to limit the liability
      of any other Loan Party to that of such other Loan Party or to reduce the
      liability of any other Loan Party in proportion to any reduction in the
      liability of such other Loan Party and agrees that, by so doing, such Loan
      Party’s obligations hereunder may be more burdensome than that of the other Loan
      Parties. 

     

    (c)
      No invalidity, irregularity or
      unenforceability of the Obligations of a Loan Party under the Loan Documents
      shall affect, impair or be a defense to the Obligations of the other Loan
      Parties. Unless otherwise expressly provided herein, each Loan Party waives
      any
      defense arising by reason of any disability or other defense of the other Loan
      Parties or by reason of the cessation from any cause whatsoever of the liability
      of the other Loan Parties or by reason of any act or omission of any Agent
      or
      any Lender or others which directly or indirectly results in or aids the
      discharge or release of the other Loan Parties or any Obligations or any
      Collateral by operation of law or otherwise. The Obligations shall be
      enforceable against each Loan Party without regard to the 

     

     

     

    -
      94 - 

     

    validity,
      regularity or
      enforceability of any of the Obligations with respect to any of the other Loan
      Parties or any of the documents related thereto or any collateral security
      documents securing any of the Obligations. No exercise by any Agent or any
      Lender of, and no omission of any Agent or any Lender to exercise, any power
      or
      authority recognized herein and no impairment or suspension of any right or
      remedy of any Agent or any Lender against any Loan Party or any Collateral
      shall
      in any way suspend, discharge, release, exonerate or otherwise affect any of
      the
      Obligations or any Collateral furnished by the Loan Parties or give to the
      Loan
      Parties any right of recourse against any Agent or any Lender. Each Loan Party
      specifically agrees that the failure of any Agent or any Lender: (i) to
      perfect any lien on or security interest in any property heretofore or hereafter
      given by any Loan Party to secure payment of the Obligations, or to record
      or
      file any document relating thereto or (ii) to file or enforce a claim
      against the estate (either in administration, bankruptcy or other proceeding
      under any Debtor Relief Laws) of any Loan Party shall not in any manner
      whatsoever terminate, diminish, exonerate or otherwise affect the liability
      of
      any Loan Party hereunder. 

     

    (d)
      Each Loan Party, to the maximum
      extent permitted under applicable law, hereby waives any right, whether arising
      under any statute, regulation, judicial decision or otherwise, to require any
      Agent or any Lender to (i) proceed against any other Loan Party,
      (ii) proceed against or exhaust any security received from any other Loan
      Party, or (iii) pursue any other right or remedy in any Agent’s or the
      Lenders’ power whatsoever. Without limiting the generality of the foregoing,
      each Loan Party, to the maximum extent permitted under applicable law, waives
      any and all marshaling rights or similar rights which may be available at law
      or
      in equity. A separate action or actions may be brought and prosecuted against
      any Loan Party whether or not action is brought against the other Loan Parties
      and whether the other Loan Parties are joined in any such action or actions;
      and
      each Loan Party waives the benefit of any statute of limitations affecting
      the
      liability hereunder or the enforcement hereof, and agrees that any payment
      of
      any Obligations or other act which shall toll any statute of limitations
      applicable thereto shall similarly operate to toll such statute of limitations
      applicable to the liability hereunder. 

     

    (e)
      Unless otherwise expressly
      provided herein, each Loan Party further waives, to the maximum extent permitted
      under applicable law: (i) any defense resulting from the absence,
      impairment or loss of any right of reimbursement, subrogation, contribution
      or
      other right or remedy of such Loan Party against any other Loan Party or any
      security, whether resulting from an election by the Agents and the Lenders
      to
      foreclose upon security by judicial or nonjudicial sale or otherwise;
      (ii) any setoff or counterclaim of such Loan Party or any defense of any
      kind (including defenses resulting from any disability) or the cessation or
      stay
      of enforcement from any cause whatsoever of the liability of such Loan Party
      (including without limitation the lack of validity or enforceability of any
      Loan
      Document); (iii) any right to exoneration, in whole or in part, of which
      would otherwise be applicable; and (iv) all valuation, appraisal, extension
      or redemption laws now or hereafter in effect. Unless otherwise expressly
      provided herein, each Loan Party agrees that, to the maximum extent permitted
      under applicable law, its Obligations shall not be affected by any circumstances
      which constitute a legal or equitable discharge of a guarantor or surety.


     

     

     

    -
      95 - 

     

    (f)
      Each Loan Party acknowledges
      that it has the ability, and hereby assumes the obligation and responsibility,
      to keep informed of the financial condition of the other Loan Parties and of
      other matters or circumstances affecting the ability of the other Loan Parties
      to pay or perform its obligations hereunder or the risk of nonpayment and
      nonperformance. Each Loan Party hereby waives, to the maximum extent permitted
      under applicable law, any obligation on the part of any Agent or any Lender
      to
      inform such Loan Party of the financial condition, or any changes in financial
      condition, of the other Loan Parties or of any other matter or circumstance
      which might affect the ability of any of the other Loan Parties to pay or
      perform under this Agreement or any other Loan Document, or the risk of
      nonpayment or nonperformance. 

     

    11.19
Limitations
      on Borrowers’
Liability; Borrowers Rights to Subrogation and Reimbursement. (a) In
      any action or proceeding arising under or related to any Debtor Relief Laws
      if
      the obligations of any Borrower under the Loan Documents would otherwise be
      held
      or determined to be avoidable, invalid or unenforceable as a fraudulent transfer
      or otherwise as a result or on account of the amount of its liability under
      the
      Loan Documents, then, notwithstanding any other provision hereof to the
      contrary, the amount of such liability shall, without any further action by
      such
      Borrower or any other Person, including any third party acting on behalf of
      such
      Borrower, be automatically limited and reduced to the highest amount which
      is
      valid and enforceable. 

     

    (a)
      In the event that any Collateral
      owned by a Borrower (the “Affected Borrower”) or the value thereof, is
      transferred or paid to the Lenders or an Agent in satisfaction of or is deemed
      to satisfy the obligations of another Borrower (the “Affiliate Obligations”),
      such Affected Borrower shall be subrogated to the Lender’s rights against the
      Parent as guarantor under this Agreement with respect to such Affiliate
      Obligations, and shall have a right to reimbursement from Parent with respect
      to
      such Affiliate Obligations; provided that such right of subrogation and right
      to
      reimbursement shall be subordinated in all respects to the right of the Secured
      Parties under the guaranty at Article X including but not limited to the right
      to payment in full of all amounts payable thereunder. 

     

    11.20
Appointment
      of ThermaClime
      as Agent. Each other Borrower hereby irrevocably appoints ThermaClime as its
      agent and attorney-in-fact for all purposes relevant to this Agreement and
      each
      of the other Loan Documents, including (i) the giving and receipt of
      notices, (ii) the execution and delivery of all documents, instruments and
      certificates contemplated herein and all modifications hereto, and
      (iii) the receipt of the proceeds of any Term Loans made by the Lenders, to
      any such Borrower hereunder. Any acknowledgment, consent, direction,
      certification or other action which might otherwise be valid or effective only
      if given or taken by all Borrowers, or by each Borrower acting singly, shall
      be
      valid and effective if given or taken only by ThermaClime, whether or not any
      such other Borrower joins therein. Any notice, demand, consent, acknowledgement,
      direction, certification or other communication delivered to ThermaClime in
      accordance with the terms of this Agreement shall be deemed to have been
      delivered to each Borrower. It is understood that the handling of certain loan
      accounts and the Collateral of the Borrowers in a combined fashion is done
      solely as an accommodation to the Borrowers in order to utilize the collective
      borrowing powers of the Borrowers in the most efficient and economical manner
      and at their request, and that none of the Lenders shall incur liability to
      any
      Borrower as a result hereof. Each Borrower expects to derive benefit, directly
      or indirectly, from the handling of such loan accounts and the Collateral in
      a
      combined fashion since the successful operation of each Borrower is dependent
      on
      the continued successful performance of the 

     

     

     

    -
      96 - 

     

    integrated
      group. To induce the
      Lenders to do so, and in consideration thereof, each Borrower hereby jointly
      and
      severally agrees to indemnify each Lender and hold each Lender harmless against
      any and all liability, expense, loss or claim of damage or injury, made against
      any Lender by any Borrower or by any third party whosoever, arising from or
      incurred by reason of (a) the handling of any loan account and any
      Collateral of the Borrowers as herein provided, (b) any Lender relying on
      any instructions of ThermaClime, or (c) any other action taken by any
      Lender hereunder or under the other Loan Documents, except that the Borrowers
      will have no liability to the relevant indemnified Person under this
      Section 11.20 with respect to any liability that has been finally
      determined by a court of competent jurisdiction to have resulted solely from
      the
      gross negligence or willful misconduct of such indemnified Person. 

     

    11.21
USA
      PATRIOT Act Notice.
      Each Lender that is subject to the Act (as hereinafter defined) and each Agent
      (for itself and not on behalf of any Lender) hereby notifies the Borrowers
      that
      pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56
      (signed into law October 26, 2001)) (the “Act”), it is required to obtain,
      verify and record information that identifies each Loan Party, which information
      includes the name and address of each Loan Party and other information that
      will
      allow such Lender or such Agent, as applicable, to identify each Loan Party
      in
      accordance with the Act. 

     

     

     

    -
      97 - 

     

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

     

     

     

    
      	 	 	 
	BORROWERS:
	
            
	
              THERMACLIME,
                INC.,

              an
                Oklahoma
                corporation

            
	
            	
            
	By:	 	
               

               

            
	Name:	 	
               

               

            
	Title:	 	
               

               

            
	
            
	
              CHEROKEE
                NITROGEN
                HOLDINGS, INC.,

              an
                Oklahoma
                corporation

            
	
            	
            
	By:	 	
               

               

            
	Name:	 	
               

               

            
	Title:	 	
               

               

            
	
            
	
              NORTHWEST
                FINANCIAL
                CORPORATION,

              an
                Oklahoma
                corporation

            
	
            	
            
	By:	 	
               

               

            
	Name:	 	
               

               

            
	Title:	 	
               

               

            
	
            
	
              CHEMEX
                I CORP.,
                

              an
                Oklahoma
                corporation

            
	
            	
            
	By:	 	
               

               

            
	Name:	 	
               

               

            
	Title:	 	
               

               

            
	
            
	
              CHEMEX
                II CORP.,
                

              an
                Oklahoma
                corporation

            
	
            	
            
	By:	 	
               

               

            
	Name:	 	
               

               

            
	Title:	 	
               

               

            


    

     

     

    S-1


     

    
      	 	 	 
	
              CHEROKEE
                NITROGEN
                COMPANY,

              an
                Oklahoma
                corporation

            
	
            	
            
	By:	 	
               

               

            
	Name:	 	
               

               

            
	Title:	 	
               

               

            
	
            
	
              CLIMACOOL
                CORP.,

              an
                Oklahoma
                corporation

            
	
            	
            
	By:	 	
               

               

            
	Name:	 	
               

               

            
	Title:	 	
               

               

            
	
            
	
              CLIMATECRAFT,
                INC.,

              an
                Oklahoma
                corporation

            
	
            	
            
	By:	 	
               

               

            
	Name:	 	
               

               

            
	Title:	 	
               

               

            
	
            
	
              CLIMATE
                MASTER,
                INC.,

              a
                Delaware
                corporation

            
	
            	
            
	By:	 	
               

               

            
	Name:	 	
               

               

            
	Title:	 	
               

               

            
	
            
	
              DSN
                CORPORATION,

              an
                Oklahoma
                corporation

            
	
            	
            
	By:	 	
               

               

            
	Name:	 	
               

               

            
	Title:	 	
               

               

            
	
            
	
              EL
                DORADO CHEMICAL
                COMPANY,

              an
                Oklahoma
                corporation

            
	
            	
            
	By:	 	
               

               

            
	Name:	 	
               

               

            
	
              Title:

               

            	 	
               

               

            


    

     

     

    S-2


     

    
      	 	 	 
	
              INTERNATIONAL
                ENVIRONMENTAL CORPORATION,

              an
                Oklahoma
                corporation

            
	
            	
            
	By:	 	
               

               

            
	Name:	 	
               

               

            
	Title:	 	
               

               

            
	
            
	
              KOAX
                CORP.,

              an
                Oklahoma
                corporation

            
	
            	
            
	By:	 	
               

               

            
	Name:	 	
               

               

            
	Title:	 	
               

               

            
	
            
	
              LSB
                CHEMICAL
                CORP.,

              an
                Oklahoma
                corporation

            
	
            	
            
	By:	 	
               

               

            
	Name:	 	
               

               

            
	Title:	 	
               

               

            
	
            
	
              THE
                CLIMATE CONTROL
                GROUP, INC.,

              an
                Oklahoma
                corporation

            
	
            	
            
	By:	 	
               

               

            
	Name:	 	
               

               

            
	Title:	 	
               

               

            
	
            
	
              TRISON
                CONSTRUCTION,
                INC.,

              an
                Oklahoma
                corporation

            
	
            	
            
	By:	 	
               

               

            
	Name:	 	
               

               

            
	Title:	 	
               

               

            
	
            
	
              THERMACLIME
                TECHNOLOGIES, INC.,

              an
                Oklahoma
                corporation

            
	
            	
            
	By:	 	
               

               

            
	Name:	 	
               

               

            
	Title:	 	
               

               

            


    

     

     

    S-3


     

    
      	 	 	 
	
              XPEDIAIR,
                INC.,

              an
                Oklahoma
                corporation

            
	
            	
            
	By:	 	
               

               

            
	Name:	 	
               

               

            
	Title:	 	
               

               

            
	
            
	PARENT:
	
            
	
              LSB
                INDUSTRIES,
                INC.,

              a
                Delaware
                corporation

            
	
            	
            
	By:	 	
               

               

            
	Name:	 	
               

               

            
	Title:	 	
               

               

            


    

     

     

    S-4


     

    
      	 	 	 
	
              BANC
                OF AMERICA
                LEASING & CAPITAL, LLC,

              not
                in its individual capacity
                but solely as Collateral Agent

            
	
            	
            
	By:	 	
               

               

            
	Name:	 	
               

               

            
	Title:	 	
               

               

            
	
            
	
              BANC
                OF AMERICA
                LEASING & CAPITAL, LLC,

              not
                in its individual capacity
                but solely as Administrative Agent

            
	
            	
            
	By:	 	
               

               

            
	Name:	 	
               

               

            
	Title:	 	
               

               

            


    

     

     

    S-5


     

    
      	 	 	 
	
              BANK
                OF
                UTAH,

              not
                in its individual capacity
                but solely as Payment Agent

            
	
            	
            
	By:	 	
               

               

            
	Name:	 	
               

               

            
	Title:	 	
               

               

            


    

     

     

    S-6


     

    
      	 	 	 
	
              BANC
                OF AMERICA
                LEASING & CAPITAL LLC, 

              as
                a Lender

            
	
            	
            
	By:	 	
               

               

            
	Name:	 	
               

               

            
	Title:	 	
               

               

            


    

     

     

    S-7


     

    
      	 	 	 
	
              MERRILL
                LYNCH CAPITAL,
                A DIVISION OF MERRILL LYNCH BUSINESS FINANCIAL SERVICES INC.,
                

              as
                a Lender

            
	
            	
            
	
              By:

               

            	 	
               

               

            
	
              Name:

               

            	 	
               

               

            
	
              Title:

               

            	 	
               

               

            


    

     

     

    S-8


     

    
      	 	 	 
	
              ARVEST
                BANK,

              as
                a Lender

            
	
            	
            
	By:	 	
               

               

            
	Name:	 	
               

               

            
	Title:	 	
               

               

            


    

     

     

    S-9


     

    TABLE
      OF CONTENTS


     

     

     

    
      	 	 	 	 	 	 	 
	 	 	 	  	 	  	Page
	ARTICLE
              I. DEFINITIONS AND ACCOUNTING TERMS	  	1
	 	 	1.01	  	Defined
              Terms	  	1
	 	 	1.02	  	Other
              Interpretive Provisions	  	25
	 	 	1.03	  	Consolidation
              of Variable Interest Entities	  	25
	 	 	1.04	  	Accounting
              Terms	  	26
	 	 	1.05	  	Rounding	  	26
	 	 	1.06	  	Times
              of Day	  	26
	
            	
            
	ARTICLE
              II. THE TERM COMMITMENTS AND TERM LOANS	  	26
	 	 	2.01	  	The
              Term Loans	  	26
	 	 	2.02	  	Optional
              Prepayments	  	27
	 	 	2.03	  	Repayment
              of Term Loans	  	28
	 	 	2.04	  	Interest	  	28
	 	 	2.05	  	Fees	  	28
	 	 	2.06	  	Computation
              of Interest and Fees	  	28
	 	 	2.07	  	Evidence
              of Debt	  	29
	 	 	2.08	  	Payments
              Generally.	  	29
	 	 	2.09	  	Sharing
              of Payments by Lenders	  	30
	
            	
            
	ARTICLE
              III. TAXES, YIELD PROTECTION AND ILLEGALITY	  	31
	 	 	3.01	  	Taxes	  	31
	 	 	3.02	  	Illegality	  	33
	 	 	3.03	  	Inability
              to Determine Rates	  	34
	 	 	3.04	  	Increased
              Costs; Reserves on Term Loans.	  	34
	 	 	3.05	  	Compensation
              for Losses	  	35
	 	 	3.06	  	Mitigation
              Obligations; Replacement of Lenders	  	36
	 	 	3.07	  	Survival	  	36
	
            	
            
	ARTICLE
              IV. CONDITIONS PRECEDENT TO CREDIT EXTENSIONS	  	36
	 	 	4.01	  	Conditions
              of Term Loans	  	36
	
            	
            
	ARTICLE
              V. REPRESENTATIONS AND WARRANTIES	  	42
	 	 	5.01	  	Existence,
              Qualification and Corporate Power	  	42
	 	 	5.02	  	Authorization;
              No Contravention	  	43
	 	 	5.03	  	Governmental
              Authorization; Other Consents	  	43
	 	 	5.04	  	Binding
              Effect	  	43
	 	 	5.05	  	Financial
              Statements; No Material Adverse Effect.	  	43
	 	 	5.06	  	Litigation	  	44
	 	 	5.07	  	No
              Default	  	44
	 	 	5.08	  	Ownership
              of Property; Liens	  	44
	 	 	5.09	  	Environmental
              Compliance	  	45
	 	 	5.10	  	Insurance	  	47
	 	 	5.11	  	Taxes	  	47


    

     

     

    -
      i - 

     

    TABLE
      OF CONTENTS


     

     

     

    
      	 	 	 	 	 	 	 
	 	 	 	  	 	  	Page
	 	 	5.12	  	ERISA
              Compliance	  	47
	 	 	5.13	  	Subsidiaries	  	47
	 	 	5.14	  	Margin
              Regulations; Investment Company Act.	  	48
	 	 	5.15	  	Disclosure	  	48
	 	 	5.16	  	Compliance
              with Laws	  	48
	 	 	5.17	  	Intellectual
              Property; Licenses, Etc.	  	48
	 	 	5.18	  	Solvency	  	49
	 	 	5.19	  	Casualty,
              Etc	  	49
	 	 	5.20	  	Perfection
              of Security Interest; Filings.	  	49
	 	 	5.21	  	Services,
              Materials, Property Interests and Other Rights	  	50
	 	 	5.22	  	Material
              Contracts	  	50
	 	 	5.23	  	Permits	  	51
	 	 	5.24	  	Zoning	  	51
	 	 	5.25	  	Separate
              Tax Lot	  	51
	 	 	5.26	  	Utilities	  	51
	 	 	5.27	  	Labor
              Matters	  	51
	 	 	5.28	  	Collateral	  	51
	 	 	5.29	  	Performance
              of This Agreement	  	51
	
            	
            
	ARTICLE
              VI. AFFIRMATIVE COVENANTS	  	51
	 	 	6.01	  	Financial
              Statements	  	52
	 	 	6.02	  	Certificates;
              Other Information	  	53
	 	 	6.03	  	Notices	  	55
	 	 	6.04	  	Payment
              of Obligations	  	55
	 	 	6.05	  	Preservation
              of Existence, Etc	  	56
	 	 	6.06	  	Maintenance
              of Properties; Collateral	  	56
	 	 	6.07	  	Maintenance
              of Insurance	  	56
	 	 	6.08	  	Compliance
              with Laws	  	57
	 	 	6.09	  	Books
              and Records	  	58
	 	 	6.10	  	Inspection
              Rights	  	58
	 	 	6.11	  	Use
              of
              Proceeds	  	58
	 	 	6.12	  	Covenant
              to Guarantee Obligations	  	58
	 	 	6.13	  	Compliance
              with Environmental Laws	  	59
	 	 	6.14	  	Further
              Assurances	  	59
	 	 	6.15	  	Material
              Contracts	  	60
	 	 	6.16	  	Copies
              of Certain Amendments	  	60
	 	 	6.17	  	Incorporation
              of Future Financial/Negative Covenants	  	60
	 	 	6.18	  	Material
              Contracts	  	61
	
            	
            
	ARTICLE
              VII. NEGATIVE COVENANTS	  	61
	 	 	7.01	  	Liens	  	61
	 	 	7.02	  	Indebtedness	  	62
	 	 	7.03	  	Investments	  	64
	 	 	7.04	  	Fundamental
              Changes	  	64
	 	 	7.05	  	Dispositions	  	65


    

     

     

    -
      ii - 

     

    TABLE
      OF CONTENTS


     

     

     

    
      	 	 	 	 	 	 	 
	 	 	 	  	 	  	Page
	 	 	7.06	  	Restricted
              Payments	  	66
	 	 	7.07	  	Change
              in Nature of Business	  	67
	 	 	7.08	  	Transactions
              with Affiliates	  	67
	 	 	7.09	  	Restrictive
              Agreements	  	67
	 	 	7.10	  	Use
              of
              Proceeds	  	68
	 	 	7.11	  	Financial
              Covenants	  	68
	 	 	7.12	  	Amendments
              of Organization Documents	  	68
	 	 	7.13	  	Accounting
              Changes	  	68
	 	 	7.14	  	Prepayments,
              Etc. of Indebtedness	  	68
	 	 	7.15	  	Amendment,
              Etc. of Indebtedness and Certain Agreements	  	69
	 	 	7.16	  	Performance
              of This Agreement	  	69
	
            	
            
	ARTICLE
              VIII. EVENTS OF DEFAULT AND REMEDIES	  	69
	 	 	8.01	  	Events
              of Default	  	69
	 	 	8.02	  	Remedies
              upon Event of Default	  	72
	 	 	8.03	  	Application
              of Funds	  	72
	
            	
            
	ARTICLE
              IX. THE AGENTS	  	73
	 	 	9.01	  	Appointment
              and Authority.	  	73
	 	 	9.02	  	Rights
              as a Lender	  	74
	 	 	9.03	  	Exculpatory
              Provisions	  	74
	 	 	9.04	  	Reliance
              by Agents	  	75
	 	 	9.05	  	Delegation
              of Duties	  	75
	 	 	9.06	  	Resignation
              of Agents	  	75
	 	 	9.07	  	Non-Reliance
              on Agents and Other Lenders	  	76
	 	 	9.08	  	No
              Other Duties, Etc	  	76
	 	 	9.09	  	Collateral
              Agent May File Proofs of Claim	  	76
	 	 	9.10	  	Collateral
              and Guaranty Matters	  	77
	
            	
            
	ARTICLE
              X. CONTINUING GUARANTY	  	77
	 	 	10.01	  	Guaranty	  	77
	 	 	10.02	  	Rights
              of Lenders	  	78
	 	 	10.03	  	Certain
              Waivers	  	78
	 	 	10.04	  	Obligations
              Independent	  	79
	 	 	10.05	  	Subrogation	  	79
	 	 	10.06	  	Termination;
              Reinstatement	  	79
	 	 	10.07	  	Subordination	  	79
	 	 	10.08	  	Stay
              of Acceleration	  	79
	 	 	10.09	  	Condition
              of Borrowers	  	80
	
            	
            
	ARTICLE
              XI. MISCELLANEOUS	  	80
	 	 	11.01	  	Amendments,
              Etc	  	80
	 	 	11.02	  	Notices;
              Effectiveness; Electronic Communications	  	81
	 	 	11.03	  	No
              Waiver; Cumulative Remedies	  	83
	 	 	11.04	  	Expenses;
              Indemnity; Damage Waiver	  	83


    

     

     

    -
      iii - 

     

    TABLE
      OF CONTENTS


     

     

     

    
      	 	 	 	 	 	 	 
	 	 	 	  	 	  	Page
	 	 	11.05	  	Payments
              Set Aside	  	85
	 	 	11.06	  	Successors
              and Assigns	  	85
	 	 	11.07	  	Treatment
              of Certain Information; Confidentiality	  	89
	 	 	11.08	  	Right
              of Setoff	  	89
	 	 	11.09	  	Interest
              Rate Limitation	  	90
	 	 	11.10	  	Counterparts;
              Integration; Effectiveness	  	90
	 	 	11.11	  	Survival
              of Representations and Warranties	  	90
	 	 	11.12	  	Severability	  	90
	 	 	11.13	  	Replacement
              of Lenders	  	91
	 	 	11.14	  	Governing
              Law; Jurisdiction; Etc.	  	91
	 	 	11.15	  	Waiver
              of Jury Trial	  	92
	 	 	11.16	  	No
              Advisory or Fiduciary Responsibility	  	93
	 	 	11.17	  	Joint
              and Several Liability.	  	93
	 	 	11.18	  	Certain
              Consents and Additional Waivers	  	94
	 	 	11.19	  	Limitations
              on Borrowers’ Liability; Borrowers Rights to
              Subrogation and Reimbursement	  	96
	 	 	11.20	  	Appointment
              of ThermaClime as Agent	  	96
	 	 	11.21	  	USA
              PATRIOT Act Notice	  	97


    

     

     

    -
      iv - 

     

    TABLE
      OF CONTENTS


     

     

     

    
      	 	 	 	 	 	 	 
	 	 	 	 	 	  	Page
	 	 	SCHEDULES	  	 
	
            	
            	
            	
            
	 	 	1.01(a)	 	Cherokee
              Site	  	 
	 	 	1.01(b)	 	El
              Dorado Site	  	 
	 	 	1.01(c)	 	Facility
              Assets	  	 
	 	 	1.01(d)	 	Lenders
              and Lending Offices	  	 
	 	 	2.01	 	Commitments
              and Applicable Percentages	  	 
	 	 	4.01(a)(iii)	 	Financing
              Statements	  	 
	 	 	4.01(a)(iv)	 	Leased
              Property	  	 
	 	 	5.03	 	Government
              Authorizations and Other Consents	  	 
	 	 	5.05	 	Indebtedness	  	 
	 	 	5.06	 	Litigation	  	 
	 	 	5.09	 	Environmental
              Matters	  	 
	 	 	5.13	 	Subsidiaries	  	 
	 	 	5.18	 	IP
              Rights	  	 
	 	 	5.21	 	Pipelines	  	 
	 	 	5.22	 	Material
              Contracts	  	 
	 	 	5.23	 	Permits	  	 
	 	 	5.27	 	Labor
              Matters	  	 
	 	 	7.01(b)	 	Existing
              Liens	  	 
	 	 	7.02	 	Existing
              Indebtedness and Guarantees	  	 
	 	 	7.03	 	Existing
              Investments	  	 
	 	 	7.05	 	Facility
              Leases/Uses	  	 
	 	 	7.08	 	Affiliate
              Transactions	  	 
	 	 	7.09	 	Burdensome
              Agreements	  	 
	 	 	11.02	 	Addresses
              for Notices; Payment Information	  	 


    

     

     

    -
      v - 

     

    TABLE
      OF CONTENTS


     

     

     

    
      	 	 	 	 	 	 	 
	 	 	 	 	 	  	Page
	EXHIBITS	  	 
	
            	
            	
            
	 	 	Form
              of	  	 
	 	 	A	 	Term
              Note	  	 
	 	 	B	 	Compliance
              Certificate	  	 
	 	 	C	 	Borrowing
              Notice	  	 
	 	 	D	 	Assignment
              and Assumption	  	 
	 	 	E	 	Security
              Agreement	  	 
	 	 	F-1	 	Cherokee
              Mortgage	  	 
	 	 	F-2	 	El
              Dorado Mortgage	  	 
	 	 	G	 	Assignment
              and Consent Agreement	  	 
	 	 	H-1	 	Intercompany
              Lease Subordination Agreement	  	 
	 	 	H-2	 	Intercompany
              Loan Subordination Agreement	  	 
	 	 	I	 	Management
              Agreement Subordination	  	 
	 	 	J-1	 	Opinion
              Matters – Counsel to Loan Parties	  	 
	 	 	J-2	 	Opinion
              Matters – Local Counsel (Alabama)	  	 
	 	 	J-3	 	Opinion
              Matters – Local Counsel (Arkansas)	  	 
	 	 	K	 	Assignment
              and Subordination Agreement	  	 
	 	 	L	 	Inter-Lender
              Agreement	  	 
	 	 	M	 	Trademark
              Security Agreement	  	 


    

     

     

    -
      vi -