exv4w5



 







Exhibit 4.5

EXECUTION COPY










LOAN AND SECURITY AGREEMENT




Dated as of November 30, 2005




among




EACH OF THE FINANCIAL INSTITUTIONS PARTY HERETO,

as the Lenders,




CREDIT SUISSE,




as the Administrative Agent,




BANK OF AMERICA, N.A.,

as the Collateral Agent,




FLAG INTERMEDIATE HOLDINGS CORPORATION,




FLAG ACQUISITION CORPORATION (to be merged with and into Metals USA, Inc.),




and




CERTAIN OF ITS SUBSIDIARIES PARTY HERETO

 






CREDIT SUISSE,

as Sole Bookrunner,




CREDIT SUISSE




and




BANC OF AMERICA SECURITIES LLC,




as Joint Lead Arrangers,




BANK OF AMERICA, N.A.




and




GENERAL ELECTRIC CAPITAL CORPORATION,




as Co-Syndication Agents,




and




WACHOVIA BANK, NATIONAL ASSOCIATION




and




WELLS FARGO FOOTHILL, LLC,




as Co-Documentation Agents











 









 





TABLE OF CONTENTS




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	ARTICLE 1 INTERPRETATION OF THIS AGREEMENT	 	 	1	 
	 	 	 	 	 	 	 	 	 
	 
	 	Section 1.1	 	Definitions	 	 	1	 
	 
	 	Section 1.2	 	Accounting Terms	 	 	42	 
	 
	 	Section 1.3	 	Interpretive Provisions	 	 	43	 
	 	 	 	 	 	 	 	 	 
	ARTICLE 2 LOANS AND LETTERS OF CREDIT	 	 	43	 
	 	 	 	 	 	 	 	 	 
	 
	 	Section 2.1	 	Total Facility	 	 	43	 
	 
	 	Section 2.2	 	Revolving Loans	 	 	44	 
	 
	 	Section 2.3	 	Letters of Credit	 	 	52	 
	 
	 	Section 2.4	 	Bank Products	 	 	59	 
	 	 	 	 	 	 	 	 	 
	ARTICLE 3 INTEREST AND FEES	 	 	60	 
	 	 	 	 	 	 	 	 	 
	 
	 	Section 3.1	 	Interest	 	 	60	 
	 
	 	Section 3.2	 	Conversion and Continuation Elections	 	 	61	 
	 
	 	Section 3.3	 	Maximum Interest Rate	 	 	62	 
	 
	 	Section 3.4	 	Unused Line Fee	 	 	63	 
	 
	 	Section 3.5	 	Letter of Credit Fee	 	 	64	 
	 
	 	Section 3.6	 	Other Fees	 	 	64	 
	 	 	 	 	 	 	 	 	 
	ARTICLE 4 PAYMENTS AND PREPAYMENTS	 	 	64	 
	 	 	 	 	 	 	 	 	 
	 
	 	Section 4.1	 	Revolving Loans	 	 	64	 
	 
	 	Section 4.2	 	Reduction of Commitments; Termination of Facility	 	 	65	 
	 
	 	Section 4.3	 	[Reserved]	 	 	66	 
	 
	 	Section 4.4	 	Payments by the Borrowers	 	 	66	 
	 
	 	Section 4.5	 	Payments as Revolving Loans	 	 	67	 
	 
	 	Section 4.6	 	Apportionment, Application, and Reversal of Payments	 	 	67	 
	 
	 	Section 4.7	 	Indemnity for Returned Payments	 	 	68	 
	 
	 	Section 4.8	 	The Agents’ and the Lenders’ Books and Records; Monthly Statements	 	 	69	 
	 	 	 	 	 	 	 	 	 
	ARTICLE 5 TAXES, YIELD PROTECTION, AND ILLEGALITY 	 	 	69	 
	 	 	 	 	 	 	 	 	 
	 
	 	Section 5.1	 	Taxes	 	 	69	 
	 
	 	Section 5.2	 	Illegality	 	 	70	 
	 
	 	Section 5.3	 	Increased Costs and Reduction of Return	 	 	71	 
	 
	 	Section 5.4	 	Funding Losses	 	 	72	 
	 
	 	Section 5.5	 	Inability to Determine Rates	 	 	72	 
	 
	 	Section 5.6	 	Certificates of Lenders	 	 	72	 
	 
	 	Section 5.7	 	Survival	 	 	73	 
	 
	 	Section 5.8	 	Claims Under Section 5.1 and Section 5.3	 	 	73	 
	 
	 	Section 5.9	 	Replacement of Affected Lender	 	 	73	 






i









 





TABLE OF CONTENTS

(continued)




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	ARTICLE 6 COLLATERAL	 	 	73	 
	 	 	 	 	 	 	 	 	 
	 
	 	Section 6.1	 	Grant of Security Interest	 	 	73	 
	 
	 	Section 6.2	 	Perfection and Protection of Security Interest	 	 	75	 
	 
	 	Section 6.3	 	Location of Collateral	 	 	77	 
	 
	 	Section 6.4	 	Title to, Liens on, and Sale and Use of Collateral	 	 	77	 
	 
	 	Section 6.5	 	Appraisals	 	 	78	 
	 
	 	Section 6.6	 	Access and Examination; Confidentiality	 	 	78	 
	 
	 	Section 6.7	 	Collateral Reporting	 	 	79	 
	 
	 	Section 6.8	 	Accounts	 	 	80	 
	 
	 	Section 6.9	 	Collection of Accounts; Payments	 	 	81	 
	 
	 	Section 6.10	 	Inventory; Perpetual Inventory	 	 	83	 
	 
	 	Section 6.11	 	Documents, Instruments, and Chattel Paper	 	 	83	 
	 
	 	Section 6.12	 	Right to Cure	 	 	84	 
	 
	 	Section 6.13	 	Power of Attorney	 	 	84	 
	 
	 	Section 6.14	 	The Collateral Agent’s and the
Lenders’ Rights, Duties, and Liabilities	 	 	84	 
	 
	 	Section 6.15	 	Guaranties; Third Party Joinder	 	 	85	 
	 
	 	Section 6.16	 	Voting Rights, Distributions, Etc. in Respect of Investment Property	 	 	85	 
	 
	 	Section 6.17	 	Personal Property	 	 	87	 
	 
	 	Section 6.18	 	Intercreditor Agreement Governs	 	 	88	 
	 	 	 	 	 	 	 	 	 
	ARTICLE 7 BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES	 	 	89	 
	 	 	 	 	 	 	 	 	 
	 
	 	Section 7.1	 	Books and Records	 	 	89	 
	 
	 	Section 7.2	 	Financial Information	 	 	89	 
	 
	 	Section 7.3	 	Notices to the Lenders	 	 	91	 
	 	 	 	 	 	 	 	 	 
	ARTICLE 8 GENERAL WARRANTIES AND REPRESENTATIONS	 	 	92	 
	 	 	 	 	 	 	 	 	 
	 
	 	Section 8.1	 	Authorization, Validity, and Enforceability of this Agreement and the Loan Documents; No Conflicts	 	 	93	 
	 
	 	Section 8.2	 	Validity and Priority of Security Interest	 	 	93	 
	 
	 	Section 8.3	 	Organization and Qualification	 	 	94	 
	 
	 	Section 8.4	 	Corporate Name; Prior Transactions	 	 	94	 
	 
	 	Section 8.5	 	Subsidiaries	 	 	94	 
	 
	 	Section 8.6	 	Financial Statements and Projections	 	 	94	 
	 
	 	Section 8.7	 	Solvency	 	 	95	 
	 
	 	Section 8.8	 	[Reserved]	 	 	95	 
	 
	 	Section 8.9	 	Transaction Documents	 	 	95	 
	 
	 	Section 8.10	 	Title to Property	 	 	95	 
	 
	 	Section 8.11	 	Real Estate; Leases	 	 	96	 
	 
	 	Section 8.12	 	Proprietary Rights	 	 	96	 
	 
	 	Section 8.13	 	Trade Names	 	 	96	 






ii









 





TABLE OF CONTENTS

(continued)




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	 
	 	Section 8.14	 	Litigation	 	 	96	 
	 
	 	Section 8.15	 	[Reserved]	 	 	96	 
	 
	 	Section 8.16	 	Labor Matters	 	 	96	 
	 
	 	Section 8.17	 	Environmental Matters	 	 	97	 
	 
	 	Section 8.18	 	No Violation of Law	 	 	98	 
	 
	 	Section 8.19	 	[Reserved]	 	 	98	 
	 
	 	Section 8.20	 	Pension Plans	 	 	98	 
	 
	 	Section 8.21	 	Taxes	 	 	98	 
	 
	 	Section 8.22	 	Regulated Entities	 	 	99	 
	 
	 	Section 8.23	 	Use of Proceeds; Margin Regulations	 	 	99	 
	 
	 	Section 8.24	 	No Material Adverse Change	 	 	99	 
	 
	 	Section 8.25	 	Full Disclosure	 	 	99	 
	 
	 	Section 8.26	 	[Reserved]	 	 	99	 
	 
	 	Section 8.27	 	Bank Accounts	 	 	99	 
	 
	 	Section 8.28	 	Governmental Authorization	 	 	99	 
	 
	 	Section 8.29	 	Investment Property	 	 	99	 
	 
	 	Section 8.30	 	Common Enterprise	 	 	100	 
	 	 	 	 	 	 	 	 	 
	ARTICLE 9 AFFIRMATIVE AND NEGATIVE COVENANTS	 	 	100	 
	 	 	 	 	 	 	 	 	 
	 
	 	Section 9.1	 	Taxes and Other Obligations	 	 	100	 
	 
	 	Section 9.2	 	Existence and Good Standing	 	 	101	 
	 
	 	Section 9.3	 	Compliance with Law and Agreements; Maintenance of Licenses	 	 	101	 
	 
	 	Section 9.4	 	Maintenance of Property	 	 	101	 
	 
	 	Section 9.5	 	Insurance	 	 	101	 
	 
	 	Section 9.6	 	Condemnation	 	 	102	 
	 
	 	Section 9.7	 	Environmental Laws	 	 	102	 
	 
	 	Section 9.8	 	[Reserved]	 	 	102	 
	 
	 	Section 9.9	 	Mergers, Consolidations, Sales, Acquisitions	 	 	102	 
	 
	 	Section 9.10	 	Distributions; Capital Change; Restricted Investments	 	 	104	 
	 
	 	Section 9.11	 	[Reserved]	 	 	106	 
	 
	 	Section 9.12	 	[Reserved]	 	 	106	 
	 
	 	Section 9.13	 	Indebtedness	 	 	106	 
	 
	 	Section 9.14	 	Prepayment of Indebtedness and Agreements	 	 	108	 
	 
	 	Section 9.15	 	Transactions with Affiliates	 	 	108	 
	 
	 	Section 9.16	 	Restrictive Agreements	 	 	110	 
	 
	 	Section 9.17	 	Business Conducted	 	 	111	 
	 
	 	Section 9.18	 	Liens	 	 	112	 
	 
	 	Section 9.19	 	Sale and Leaseback Transactions	 	 	112	 
	 
	 	Section 9.20	 	New Subsidiaries	 	 	112	 
	 
	 	Section 9.21	 	Fiscal Year	 	 	112	 
	 
	 	Section 9.22	 	[Reserved]	 	 	112	 
	 
	 	Section 9.23	 	[Reserved]	 	 	112	 
	 
	 	Section 9.24	 	Minimum Availability	 	 	112	 
	 
	 	Section 9.25	 	Margin Stock	 	 	112	 






iii









 






TABLE OF CONTENTS

(continued)




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	 
	 	Section 9.26	 	Use of Proceeds	 	 	113	 
	 
	 	Section 9.27	 	Further Assurances	 	 	113	 
	 
	 	Section 9.28	 	Bank as Depository	 	 	113	 
	 	 	 	 	 	 	 	 	 
	ARTICLE 10 CONDITIONS OF LENDING	 	 	113	 
	 	 	 	 	 	 	 	 	 
	 
	 	Section 10.1	 	Conditions Precedent to Making of Revolving Loans on the Closing Date	 	 	113	 
	 
	 	Section 10.2	 	Conditions Precedent to Each Revolving Loan	 	 	118	 
	 	 	 	 	 	 	 	 	 
	ARTICLE 11 DEFAULT REMEDIES	 	 	118	 
	 	 	 	 	 	 	 	 	 
	 
	 	Section 11.1	 	Events of Default	 	 	118	 
	 
	 	Section 11.2	 	Right to Cure	 	 	121	 
	 
	 	Section 11.3	 	Remedies	 	 	122	 
	 	 	 	 	 	 	 	 	 
	ARTICLE 12 TERM AND TERMINATION	 	 	124	 
	 	 	 	 	 	 	 	 	 
	ARTICLE 13 AMENDMENTS; WAIVERS; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS	 	 	124	 
	 	 	 	 	 	 	 	 	 
	 
	 	Section 13.1	 	No Waivers; Cumulative Remedies	 	 	124	 
	 
	 	Section 13.2	 	Amendments and Waivers	 	 	125	 
	 
	 	Section 13.3	 	Assignments; Participations	 	 	127	 
	 	 	 	 	 	 	 	 	 
	ARTICLE 14 THE AGENTS	 	 	131	 
	 	 	 	 	 	 	 	 	 
	 
	 	Section 14.1	 	Appointment and Authorization	 	 	131	 
	 
	 	Section 14.2	 	Delegation of Duties	 	 	132	 
	 
	 	Section 14.3	 	Liability of the Agents	 	 	132	 
	 
	 	Section 14.4	 	Reliance by the Agents	 	 	132	 
	 
	 	Section 14.5	 	Notice of Default	 	 	133	 
	 
	 	Section 14.6	 	Credit Decision	 	 	133	 
	 
	 	Section 14.7	 	Indemnification	 	 	133	 
	 
	 	Section 14.8	 	The Agents in Individual Capacity	 	 	134	 
	 
	 	Section 14.9	 	Successor Agents	 	 	134	 
	 
	 	Section 14.10	 	Withholding Tax	 	 	134	 
	 
	 	Section 14.11	 	Collateral Matters	 	 	136	 
	 
	 	Section 14.12	 	Restrictions on Actions by Lenders; Sharing of Payments	 	 	137	 
	 
	 	Section 14.13	 	Agency for Perfection	 	 	138	 
	 
	 	Section 14.14	 	Payments by the Administrative Agent to the Lenders	 	 	138	 
	 
	 	Section 14.15	 	Concerning the Collateral and the Related Loan Documents	 	 	138	 
	 
	 	Section 14.16	 	Field Audit and Examination Reports; Disclaimer by Lenders	 	 	139	 
	 
	 	Section 14.17	 	Relation Among Lenders	 	 	139	 






iv









 





TABLE OF CONTENTS

(continued)




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	ARTICLE 15 MISCELLANEOUS	 	 	140	 
	 	 	 	 	 	 	 	 	 
	 
	 	Section 15.1	 	Cumulative Remedies; No Prior Recourse to Collateral	 	 	140	 
	 
	 	Section 15.2	 	Severability	 	 	140	 
	 
	 	Section 15.3	 	Governing Law; Choice of Forum	 	 	140	 
	 
	 	Section 15.4	 	Waiver of Jury Trial	 	 	141	 
	 
	 	Section 15.5	 	Survival of Agreement	 	 	142	 
	 
	 	Section 15.6	 	Other Security and Guaranties	 	 	142	 
	 
	 	Section 15.7	 	Fees and Expenses	 	 	142	 
	 
	 	Section 15.8	 	Notices	 	 	143	 
	 
	 	Section 15.9	 	Waiver of Notices	 	 	144	 
	 
	 	Section 15.10	 	Binding Effect	 	 	144	 
	 
	 	Section 15.11	 	Indemnity of the Agents and the Lenders by the Borrowers	 	 	144	 
	 
	 	Section 15.12	 	Limitation of Liability	 	 	146	 
	 
	 	Section 15.13	 	Final Agreement	 	 	146	 
	 
	 	Section 15.14	 	Counterparts	 	 	146	 
	 
	 	Section 15.15	 	Captions	 	 	146	 
	 
	 	Section 15.16	 	Right of Set-off	 	 	146	 
	 
	 	Section 15.17	 	Joint and Several Liability	 	 	147	 
	 
	 	Section 15.18	 	Contribution and Indemnification among the Borrowers	 	 	148	 
	 
	 	Section 15.19	 	Agency of Parent for Each Other Borrower	 	 	149	 
	 
	 	Section 15.20	 	Additional Borrowers	 	 	149	 
	 
	 	Section 15.21	 	Express Waivers By Borrowers In Respect of Cross Guaranties and Cross Collateralization	 	 	149	 
	 
	 	Section 15.22	 	USA PATRIOT Act Notice	 	 	150	 






v









 





	 	 	 	 	 
	Schedules:
	 	 	 	 
	 
	 	 	 	 
	Schedule 1.1(A)
	 	—	 	Permitted Liens
	Schedule 1.1(B)
	 	—	 	Permitted Investments
	Schedule 1.1(C)
	 	—	 	Mortgaged Properties
	Schedule 1.1(D)
	 	—	 	Existing Letters of Credit
	Schedule 1.1(E)
	 	—	 	Contractor Accounts
	Schedule 1.1(F)
	 	—	 	Unrestricted Subsidiaries
	Schedule 1.1(G)
	 	—	 	Acceptable Appraisers
	Schedule 6.1
	 	—	 	Commercial Tort Claims
	Schedule 6.3
	 	—	 	Location of Collateral
	Schedule 6.7
	 	—	 	Information Contained in Monthly Reports
	Schedule 8.2
	 	—	 	Filing Offices
	Schedule 8.3
	 	—	 	Organization and Qualification
	Schedule 8.4
	 	—	 	Corporate Names
	Schedule 8.5
	 	—	 	Subsidiaries
	Schedule 8.11
	 	—	 	Real Estate; Leases
	Schedule 8.12
	 	—	 	Proprietary Rights
	Schedule 8.13
	 	—	 	Trade Names
	Schedule 8.14
	 	—	 	Litigation
	Schedule 8.16
	 	—	 	Labor Matters
	Schedule 8.20
	 	—	 	ERISA Matters
	Schedule 8.27
	 	—	 	Bank Accounts
	Schedule 8.29
	 	—	 	Investment Property
	Schedule 9.13
	 	—	 	Debt
	Schedule 9.15
	 	—	 	Affiliate Transactions
	 
	 	 	 	 
	Exhibits:
	 	 	 	 
	 
	 	 	 	 
	Exhibit A-1
	 	—	 	Form of Tranche A Revolving Note
	Exhibit A-2
	 	—	 	Form of Tranche A-1 Revolving Note
	Exhibit B
	 	—	 	Form of Borrowing Base Certificate
	Exhibit C
	 	—	 	Form of Notice of Borrowing
	Exhibit D
	 	—	 	Form of Notice of Conversion/Continuation
	Exhibit E
	 	—	 	Form of Assignment and Acceptance
	Exhibit F
	 	—	 	Form of Compliance Certificate
	Exhibit G
	 	—	 	Form of Perfection Certificate
	Exhibit H
	 	—	 	Form of Administrative Questionnaire
	Exhibit I
	 	—	 	Form of Guaranty Agreement






vi









 





LOAN AND SECURITY AGREEMENT




     This Loan and Security Agreement, dated as of November 30, 2005, among the financial
institutions listed on the signature pages hereof (such financial institutions, together with their
respective successors and assigns, are referred to hereinafter each individually as a
“Lender” and collectively as the “Lenders”), Credit Suisse, with an office located
at Eleven Madison Avenue, New York, NY 10010, as administrative agent for the Lenders (in its
capacity as administrative agent, the “Administrative Agent”), Bank of America, N.A., with
an office located at 9 West 57th Street, New York, NY 10019, as collateral agent for the
Lenders (in its capacity as collateral agent, the “Collateral Agent”), Flag Intermediate
Holdings Corporation, a Delaware corporation, Flag Acquisition Corporation, a Delaware corporation,
to be merged with and into Metals USA, Inc., a Delaware corporation, and each Subsidiary of Metals
USA, Inc. party hereto.



     A. Pursuant to or in connection with the Merger Agreement (such term and each other
capitalized term used but not defined in this introductory statement having the meaning given it in
Article 1), (a) Merger Sub will merge (the “Merger”) with and into Parent, with (i) each
share of the outstanding capital stock of Parent being converted into the right to receive
approximately $22.00 in cash (the “Merger Consideration”), subject to dissenters’ rights,
(ii) Parent surviving as a wholly owned Subsidiary of Holdings and (iii) Parent assuming by
operation of law all of the Obligations of Merger Sub under this Agreement and the other Loan
Documents and (b) Parent will issue up to $275,000,000 aggregate principal amount of its Senior
Secured Notes.



     B. The Borrowers have requested the Lenders to make available to the Borrowers a revolving
line of credit for loans and letters of credit in an aggregate amount of $450,000,000, which
extensions of credit the Borrowers will use for the purposes set forth in Section 9.26.



     C. The Lenders have agreed to make available to the Borrowers such credit facility upon the
terms and conditions set forth in this Agreement.



     Accordingly, in consideration of the mutual conditions and agreements set forth in this
Agreement, and for good and valuable consideration, the receipt of which is hereby acknowledged,
the Lenders, the Administrative Agent, the Collateral Agent, Holdings and the Borrowers hereby
agree as follows.



ARTICLE 1




INTERPRETATION OF THIS AGREEMENT




          Section 1.1 Definitions. As used herein:




     “Acceptable Appraiser” means (a) any Person listed on Schedule 1.1(G) or (b)
any other experienced and reputable appraiser reasonably acceptable to Parent and the Agents.



     “Account” means, with respect to a Person, any of such Person’s now owned and
hereafter acquired or arising accounts, as defined in the UCC, including any rights to payment for
the sale or lease of goods or rendition of services, whether or not they have been earned by


Loan And Security Agreement — Page 1 




 









 







performance, and “Accounts” means, with respect to any such Person, all of the
foregoing in each case, other than any Excluded Assets.




     “Account Debtor” means each Person obligated on an Account.



     “ACH Transactions” means any cash management or related services including the
automated clearing house transfer of funds by a Bank or any Lender for the account of any Borrower
pursuant to agreement or overdrafts.



     “Adjusted EBITDA” means, with respect to any Person for any period, the Consolidated
Net Income of such Person for such period plus, without duplication, to the extent the same was
deducted in calculating Consolidated Net Income:



     (1) Consolidated Taxes; plus



     (2) Consolidated Interest Expense; plus



     (3) Consolidated Non-cash Charges; plus



     (4) the amount of management, monitoring, consulting and advisory fees and related expenses
paid to the Equity Investor (or any accruals relating to such fees and related expenses) during
such period not to exceed the amounts permitted by Section 9.15; plus



     (5) facility closure and severance costs and charges; plus



     (6) impairment charges, including the write-down of investments; plus



     (7) non-operating expenses; plus



     (8) restructuring expenses and charges including retention, severance, system establishment or
excess pension costs; plus



     (9) the non-cash portion of straight-line rent expenses;



     less, without duplication, to the extent the same was used to increase Consolidated Net Income
during such period,



     (i) non-cash items increasing Consolidated Net Income for such period (excluding any items
which represent the reversal of any accrual of, or cash reserve for, anticipated cash charges in
any prior period, including the amortization of employee benefit plan prior service costs); minus



     (ii) non-operating income.



     “Administrative Agent” means Credit Suisse, solely in its capacity as the
administrative agent for the Lenders, and any successor administrative agent.



     “Administrative Questionnaire” means an Administrative Questionnaire in the form of
Exhibit H, or such other form as may be supplied from time to time by the Administrative Agent.


Loan And Security Agreement — Page 2 




 









 





     “Affiliate” means, as to any Person, any other Person which, directly or indirectly,
is in control of, is controlled by, or is under common control with, such Person. A Person shall
be deemed to control another Person if the controlling Person possesses, directly or indirectly,
the power to direct or cause the direction of the management and policies of the other Person,
whether through the ownership of voting securities, by contract, or otherwise. For purposes of
Section 9.15, the term “Affiliate” shall also include, as to any Person, any other Person that
directly or indirectly owns ten percent (10.0%) or more of the ordinary voting power for the
election of directors of such Person. For purposes of clause (h) of the definition of Eligible
Accounts, the term “Affiliate”, however, with respect to any Loan Party or the Equity Investors,
shall exclude any Apollo Operating Company.



     “Agent Advances” has the meaning specified in Section 2.2(i).



     “Agents” means the Administrative Agent and the Collateral Agent and, for the
avoidance of doubt, any reference to the discretion of the Agents, the exercise of Reasonable
Credit Judgment by the Agents, or any other determination to be made by the Agents means the joint
exercise, joint determination and/or joint discretion of each of the Administrative Agent and the
Collateral Agent in agreement with the other.



     “Aggregate Revolver Outstandings” means, at any time: the sum of (a) the unpaid
balance of Revolving Loans, (b) the aggregate amount of Pending Revolving Loans, (c) one hundred
percent (100%) of the aggregate undrawn amount of all outstanding Letters of Credit, and (d)
without duplication of any amounts included in clause (b), the aggregate amount of any unpaid
reimbursement obligations in respect of Letters of Credit.



     “Agreement” means this Loan and Security Agreement as it may be amended, restated or
otherwise modified from time to time.



     “Apollo Operating Company” means a Person engaged in the business of producing goods
or providing services that but for the last sentence of the definition of Affiliate would be an
Affiliate of the Equity Investors.



     “Applicable Margin” means (a) during the period commencing on the Closing Date, and
ending on but not including the first adjustment date set forth herein below (which shall occur
when an Applicable Margin Calculation or applicable Financial Statements, as the case may be, are
delivered to the Administrative Agent covering a period of at least the six full Fiscal Periods
following the Closing Date), (i) -0.250% with respect to Tranche A Base Rate Revolving Loans and
1.50% with respect to Tranche A LIBOR Rate Revolving Loans and (ii) 1.75% with respect to Tranche
A-1 Base Rate Revolving Loans and 3.75% with respect to Tranche A-1 LIBOR Rate Revolving Loans, and
(b) on such first adjustment date set forth herein below and thereafter, in each case subject to
adjustment from time to time thereafter to the applicable percentage specified corresponding to the
Fixed Charge Coverage Ratio, as set forth below, respectively:


Loan And Security Agreement — Page 3 
 

 









 








	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Tranche A	 	 	Tranche A	 	 	Tranche A-1	 	 	Tranche A-1	 
	 	 	Base Rate	 	 	LIBOR Rate	 	 	Base Rate	 	 	LIBOR Rate	 
	 	 	Revolving	 	 	Revolving	 	 	Revolving	 	 	Revolving	 
	Fixed Charge Coverage Ratio	 	Loans	 	 	Loans	 	 	Loans	 	 	Loans	 
	Category 1
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
Less than 1.10 to 1.00
	 	 	0.00	%	 	 	2.00	%	 	 	1.50	%	 	 	3.50	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Category 2
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Greater than or equal
to 1.10 to 1.00, but
less than 1.30 to
1.00
	 	 	0.00	%	 	 	1.75	%	 	 	1. 50	%	 	 	3. 50	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Category 3
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Greater than or equal
to 1.30 to 1.00, but
less than 1.50 to
1.00
	 	 	-0.25	%	 	 	1.50	%	 	 	1. 50	%	 	 	3. 50	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Category 4
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Greater than or equal
to 1.50 to 1.00
	 	 	-0.25	%	 	 	1.25	%	 	 	1. 50	%	 	 	3. 50	%





For the purpose of determining any such adjustments to the Applicable Margin, the Fixed Charge
Coverage Ratio shall be determined as of the last day of each Fiscal Period of Parent based upon
Parent’s Financial Statements for the three immediately preceding Fiscal Periods (provided,
however, if a Fiscal Period in which the Applicable Margin is being determined ends on a
Fiscal Quarter end or a Fiscal Year end, the Borrowers will have the option, pursuant to
Section 7.2(b), of providing an Applicable Margin Calculation in lieu of Financial
Statements for Fiscal Periods ending after such Fiscal Quarter or Fiscal Year, whichever is
applicable, within thirty (30) days after the end of such Fiscal Period for purposes of this
calculation), delivered to the Administrative Agent as described by Section 7.2(b), and
such adjustment, if any, shall become effective (A) with respect to the Base Rate Revolving Loans
and all other Obligations on and after the first day of the Fiscal Period following the Fiscal
Period in which such Financial Statements are (or, such optional Applicable Margin Calculation is)
delivered to the Administrative Agent and (B) with respect to LIBOR Rate Revolving Loans as of the
date on or after the first day of the Fiscal Period following the Fiscal Period in which such
Financial Statements are (or, such optional Applicable Margin Calculation is) delivered to the
Administrative Agent when any LIBOR Rate Revolving Loan is outstanding; provided,
however, in the event that, with respect to any Fiscal Quarter or Fiscal Year, the
Financial Statements of the Borrowers required by Section 7.2(a) or Section 7.2(b)
shall indicate that the Fixed Charge Coverage Ratio is (i) less than that reflected in the
Financial Statements or Applicable Margin Calculations provided at the end of any Fiscal Period
pursuant to Section 7.2(b), the Applicable Margin shall be adjusted retroactively (to the
effective date of the Applicable Margin which was determined based upon the delivery of such
Financial Statements or Applicable Margin Calculations delivered pursuant to Section
7.2(b)) to reflect an Applicable Margin based upon the Fixed Charge Coverage Ratio determined
by such Financial Statements delivered with respect to such Fiscal Quarter or Fiscal Year pursuant
to Section 7.2(a) or Section 7.2(b) and each of the Borrowers shall make payments
to the Administrative Agent on behalf of the Lenders to the extent of such difference in the
Applicable Margin if an interest payment has been made at the lower Applicable Margin, or (ii) more
than that reflected in the Financial Statements or Applicable Margin Calculations provided at the
end of any Fiscal Period pursuant to Section 7.2(b), the Applicable Margin shall be
adjusted retroactively (to the effective date of the Applicable Margin which was determined based
upon the delivery of such Financial Statements or Applicable



Loan And Security Agreement — Page 4 




 









 





Margin Calculations delivered pursuant
to Section 7.2(b)) to reflect an Applicable Margin based upon the Fixed Charge Coverage
Ratio determined by such Financial Statements
delivered with respect to such Fiscal Quarter or Fiscal Year pursuant to Section 7.2(a) or
Section 7.2(b).




     “Applicable Margin Calculation” means a Fixed Charge Coverage Ratio calculation to
determine the Applicable Margin in accordance with the terms of this Agreement and in form and
substance reasonably satisfactory to the Administrative Agent.



     “Assignee” has the meaning specified in Section 13.3(a).



     “Assignment and Acceptance” means an assignment and acceptance entered into by a
Lender and an assignee and accepted by the Administrative Agent, in the form of Exhibit E
or such other form as shall be approved by the Administrative Agent.



     “Attorney Costs” means and includes all reasonable, documented and customary fees,
expenses, and disbursements of any law firm or other outside counsel engaged by an Agent or Letter
of Credit Issuer.



     “Availability” means, at any time, (a) the Borrowing Base minus (b) the
Aggregate Revolver Outstandings.



     “Availability Triggering Event” shall occur at any time that (a) the Availability is
less than $45,000,000 or (b) an Event of Default shall have occurred and be continuing. Once
occurred, an Availability Triggering Event described in clause (a) shall be deemed to be continuing
until such time as the Availability is $45,000,000 or greater for 10 consecutive days.



     “Bank” means Credit Suisse, acting through any of its branches or Affiliates, Bank of
America, N.A., a national banking association, or any successor entity to any of the foregoing.



     “Bank Products” means any one or more of the following types of services or facilities
extended to any Borrower by a Bank, a Lender or any of their Affiliates: (a) credit cards; (b) ACH
Transactions; (c) Hedge Agreements; (d) treasury management services, and (e) foreign exchange
contracts.



     “Bankruptcy Code” means Title 11 of the United States Code (11 U.S.C. § 101 et
seq.).



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



     “Base Rate Revolving Loan” means a Revolving Loan during any period in which it


Loan And Security Agreement — Page 5 




 









 







bears
interest based on the Base Rate.




     “Blocked Account” means any deposit/collection account established pursuant to a
Blocked Account Agreement; collectively, such accounts are referred to as the “Blocked
Accounts.”



     “Blocked Account Agreement” means an agreement among one or more of the Loan Parties,
the Collateral Agent, and a Clearing Bank, in form and substance satisfactory to the Collateral
Agent, concerning the collection of payments which represent the proceeds of Accounts and other
Collateral of a Loan Party.



     “Borrower” means, prior to the Merger, Flag Acquisition Corporation, and, after the
Merger, separately and individually, any of Parent, Allmet GP, Inc., Allmet LP, Inc., Interstate
Steel Supply Co. of Maryland, Inc., Intsel GP, Inc., Intsel LP, Inc., i-Solutions Direct, Inc.,
Jeffreys Real Estate Corporation, Jeffreys Steel Holdings, L.L.C., Levinson Steel GP, Inc.,
Levinson Steel LP, Inc., Metals Receivables Corporation, Metals USA Building Products, L.P., Metals
USA Carbon Flat Rolled, Inc., Metals USA Finance Corp., Metals USA Flat Rolled Central, Inc.,
Metals USA Management Co., L.P., Metals USA Plates and Shapes Northeast, L.P., Metals USA Plates
and Shapes Southcentral, Inc., Metals USA Plates and Shapes Southeast, Inc., Metals USA Plates and
Shapes Southwest, Limited Partnership, Metals USA Realty Company, Metals USA Specialty Metals
Northcentral, Inc., MUSA GP, Inc., MUSA LP, Inc., Queensboro, L.L.C., and any other Person who
becomes a party to this Agreement as a “Borrower” pursuant to the terms hereof, jointly,
severally, and collectively, and “Borrowers” means more than one or all of the foregoing
Persons, jointly, severally, and collectively, as the context requires.



     “Borrowing” means a borrowing hereunder consisting of Revolving Loans made on the same
day by the Lenders, by the Swingline Lender (in the case of a Borrowing funded by a Swingline
Loan), or by the Administrative Agent (in the case of a Borrowing consisting of an Agent Advance)
to a Borrower, or the issuance of Letters of Credit hereunder.



     “Borrowing Base” means, at any time, an amount equal to the lesser of




     (a) the Maximum Tranche A Revolver Amount plus the Maximum Tranche A-1 Revolver
Amount, and



     (b) the result of (x) the sum of:




	 	(i)	 	eighty-five percent (85.0%) of the Net Amount of Eligible Accounts,





     plus




	 	(ii)	 	the lesser of the following:






	 	(A)	 	seventy percent (70.0%) of the lesser of the
original cost or market value of Eligible Inventory, and




Loan And Security Agreement — Page 6 




 









 





	 	(B)	 	ninety percent (90.0%) of the Orderly
Liquidation Value of Eligible Inventory,





     plus




	 	(iii)	 	at all times prior to the termination of the Tranche A-1
Commitments, an amount equal to the Incremental Availability.





     minus




(y) all Reserves which the Agents deem necessary in the exercise of their
Reasonable Credit Judgment to maintain with respect to any Loan Party, including
Reserves for any amounts which either Agent or any Lender may be obligated to pay in
the future for the account of any Loan Party.



     The specified percentages set forth in this definition (and the definition of Incremental
Availability) will not be reduced without the consent of Parent. Any determination by the Agents
in respect of the Borrowing Base shall be based on the Agents’ Reasonable Credit Judgment. The
parties understand that the exclusionary criteria in the definitions of Eligible Accounts and
Eligible Inventory, any Reserves that may be imposed as provided herein, any deductions or other
adjustments to determine “lower of cost or market value” and Net Amount of Eligible Accounts and
factors considered in the calculation of Orderly Liquidation Value of Eligible Inventory have the
effect of reducing the Borrowing Base, and, accordingly, whether or not any provisions hereof so
state, all of the foregoing shall be determined without duplication so as not to result in multiple
reductions in the Borrowing Base for the same facts or circumstances.



     “Borrowing Base Certificate” means a certificate by a Responsible Officer of Parent,
substantially in the form of Exhibit B (or another form acceptable to the Agents) setting
forth the calculation of the Borrowing Base, including a calculation of each component thereof
(including, to the extent a Borrower has received notice of any such Reserve from the Agents, any
of the Reserves included in such calculation pursuant to clause (y) of the definition of
the Borrowing Base), all in such detail as shall be reasonably satisfactory to the Agents. All
calculations of the Borrowing Base in connection with the preparation of any Borrowing Base
Certificate shall be made by Parent and certified to the Agents.



     “Business Day” means any day other than a Saturday, Sunday or day on which banks in
New York City are authorized or required by law to close; provided, however, that
when used in connection with the LIBOR Rate or LIBOR Rate Revolving Loans, the term “Business Day”
shall also exclude any day on which banks are not open for dealings in dollar deposits in the
London interbank market.



     “Capital Adequacy Regulation” means any guideline, request, or directive of any
central bank or other Governmental Authority, or any other law, rule, or regulation, whether or not
having the force of law, in each case, regarding capital adequacy of any bank or of any corporation
controlling a bank.



     “Capital Expenditures” means expenditures (whether paid in cash or by entering into
any


Loan And Security Agreement — Page 7 





 









 






Indebtedness, including any Capital Leases) required to be included in or reflected by the
property, plant, equipment, or similar fixed asset accounts reflected in the consolidated balance
sheet of Parent and its Subsidiaries, excluding (a) expenditures incurred in connection with the
Transaction and Permitted Acquisitions, (b) expenditures paid from, or that have been reimbursed by
proceeds of, a policy of insurance or a condemnation award, (c) capitalized interest, (d)
expenditures that are accounted for as capital expenditures that are actually paid for by a third
party (excluding Holdings, Parent or any Subsidiary) and for which none of Holdings, Parent or any
Subsidiary has provided or is required to provide or incur, directly or indirectly, any
consideration or obligation to such third party or any other Person in respect of such expenditure
and (e) the purchase price of equipment purchased in the ordinary course of business to the extent
that the consideration therefor consists of any combination of (i) used or surplus equipment traded
in at the time of such purchase and (ii) the proceeds of a concurrent sale of used or surplus
equipment.




     “Capital Lease” means, with respect to any Person, any lease of property which, in
accordance with GAAP, should be reflected as a capital lease on a balance sheet of such Person.



     “Capital Stock” means any and all corporate stock, units, shares, partnership
interests, membership interests, equity interests, rights, securities, or other equivalent
evidences of ownership (however designated) issued by any Person.



     “Capitalized Lease Obligation” means, at the time any determination thereof is to be
made, the amount of the liability in respect of a capital lease that would at such time be required
to be capitalized and reflected as a liability on a balance sheet (excluding the footnotes thereto)
in accordance with GAAP.



     “Change of Control” shall be deemed to have occurred if (a) prior to a Qualified
Public Offering, the Permitted Holders shall fail to beneficially own, directly or indirectly,
shares representing at least 51% of the aggregate ordinary voting power represented by the issued
and outstanding Capital Stock of Holdings, (b) after a Qualified Public Offering, any “person” or
“group” (within the meaning of Rule 13d 5 of the Securities Exchange Act of 1934 as in effect on
the date hereof) shall beneficially own, directly or indirectly, shares representing more than 35%
of the aggregate ordinary voting power represented by the issued and outstanding Capital Stock of
Holdings, and the Permitted Holders shall beneficially own less than such person or group of the
ordinary voting power represented by the issued and outstanding Capital Stock of Holdings; (c) a
majority of the seats (other than vacant seats) on the board of directors of Holdings shall at any
time be occupied by Persons who were neither (i) nominated by the board of directors of Holdings or
nominated or elected by the Permitted Holders nor (ii) appointed by directors so nominated or
elected; (d) any change in control (or similar event, however denominated) with respect to Holdings
or Parent shall occur under and as defined in any indenture or agreement in respect of Indebtedness
in excess of $20,000,000 to which Holdings or any Borrower is a party, or (e) Holdings shall cease
to directly own, beneficially and of record, 100% of the issued and outstanding Capital Stock of
Parent.



     “Chattel Paper” means any “chattel paper”, as such term is defined in the UCC, now
owned or hereafter acquired by any Person and, in any event, shall include, without limitation, all
Electronic Chattel Paper, and Tangible Chattel Paper, in each case, other than any Excluded



Loan And Security Agreement — Page 8




 









 







Assets.




     “Clearing Bank” means either Bank or any other banking institution with whom a Payment
Account has been established pursuant to a Blocked Account Agreement.



     “Class”, when used in reference to any Revolving Loan or Borrowing, refers to whether
such Revolving Loan, or the Revolving Loans comprising such Borrowing, are Tranche A Revolving
Loans or Tranche A-1 Revolving Loans and, when used in reference to any Commitment, refers to
whether such Commitment is a Tranche A Commitment or a Tranche A-1 Commitment.



     “Closing Date” means the date of this Agreement.



     “Code” means the Internal Revenue Code of 1986, as amended from time to time, and any
successor statute, and the regulations promulgated thereunder.



     “Collateral” has the meaning specified in Section 6.1.



     “Collateral Agent” means Bank of America, N.A., a national banking association, and
any successor collateral agent.



     “Collateral Agent’s Liens” means the Liens in the Collateral granted to the Collateral
Agent, for the benefit of the Secured Parties, pursuant to this Agreement and the other Loan
Documents.



     “Commercial Tort Claims” means, with respect to a Person, all of such Person’s now
owned or hereafter acquired commercial tort claims, as defined by the UCC, including those
commercial tort claims identified on Schedule 6.1 and in any event, shall include, without
limitation, any claim now owned or hereafter acquired by any Person, arising in tort with respect
to which: (a) the claimant is an organization; or (b) the claimant is an individual and the claim
(i) arose in the course of the claimant’s business or profession and (ii) does not include damages
arising out of personal injury to or the death of an individual, in each case, other than any
Excluded Assets.



     “Commitment” means, at any time with respect to a Lender, the principal amount set
forth beside such Lender’s name under the heading “Commitment” on the signature pages of
this Agreement (being the aggregate of the Tranche A Commitments and the Tranche A-1 Commitments
specified on such signature page) or in the Assignment and Acceptance pursuant to which such Lender
became a Lender hereunder, or the most recent Assignment and Acceptance to which such Lender is a
party, in accordance with the provisions of Section 13.3, and “Commitments” means,
collectively, the aggregate amount of the Commitments of all of the Lenders (being the aggregate of
the Tranche A Commitments and the Tranche A-1 Commitments of all the Lenders).



     “Compliance Certificate” has the meaning specified in Section 7.2(c).



     “Confidential Information Memorandum” means the Confidential Information Memorandum of
Parent dated November, 2005.



Loan And Security Agreement — Page 9




 









 








     “Consolidated Interest Expense” means, with respect to any Person (the “Specified
Person”) for any period, the sum, without duplication, of:



     (1) consolidated interest expense solely with respect to Indebtedness of the Specified Person
and its Subsidiaries for such period, to the extent such expense was deducted in computing
Consolidated Net Income (including amortization of original issue discount, the interest component
of Capitalized Lease Obligations, and net payments and receipts (if any) pursuant to interest rate
Hedging Obligations and excluding amortization of deferred financing fees and expensing of any
bridge or other financing fees);



     (2) consolidated capitalized interest of the Specified Person and its Subsidiaries for such
period, whether paid or accrued;



     (3) commissions, discounts, yield and other fees and charges incurred for such period in
connection with any receivables financing of the Specified Person or any of its Subsidiaries which
are payable to Persons other than Parent and its Subsidiaries;



     (4) dividends accrued for such period in respect of all Disqualified Stock of the Specified
Person and any of its Subsidiaries and all preferred stock of any such Subsidiaries, in each case
held by Persons other than Parent or a Wholly-Owned Subsidiary (in each such case other than
dividends payable solely in Capital Stock (other than Disqualified Stock) of Parent); and



     (5) interest accruing for such period on any Indebtedness of any other Person to the extent
such Indebtedness is guaranteed by (or secured by the assets of) the Specified Person or any of its
Subsidiaries;



     less, interest income of the Specified Person and its Subsidiaries for such period.



     “Consolidated Net Income” means, with respect to any Person for any period, the
aggregate Net Income of such Person and its Subsidiaries for such period, on a consolidated basis;
provided, however, that the following items shall be excluded:



     (1) any net after-tax extraordinary or nonrecurring or unusual gains or losses or income or
expenses or charges, including any severance expenses and fees, expenses or charges related to any
equity offering, investment, acquisition or Indebtedness permitted hereunder (in each case, whether
or not successful), including any such fees, expenses, charges or change in control payments
related to the Transactions;



     (2) any increase in amortization or depreciation or any one-time non-cash charges (such as
purchased in-process research and development or capitalized manufacturing profit in inventory)
resulting from purchase accounting in connection with the Transactions or any acquisition that is
consummated after the Closing Date;



     (3) the Net Income for such period shall not include the cumulative effect of a change in
accounting principles during such period;



     (4) any net after-tax income or loss from discontinued operations and any net after-tax gains
or losses on disposal of discontinued operations;



Loan And Security Agreement — Page 10




 









 








     (5) any net after-tax gains or losses, or any subsequent charges or expenses, attributable to
business dispositions or asset dispositions having occurred at any time other than in the ordinary
course of business as determined in good faith by the board of directors of Parent;



     (6) any net after-tax gains or losses attributable to the early extinguishment of
Indebtedness;



     (7) the Net Income for such period of any Person (other than the referent Person) that is not
a Subsidiary of such Person, or is an Unrestricted Subsidiary, or that is accounted for by the
equity method of accounting; provided, however, there shall be included the amount
of dividends or distributions or other payments paid in cash (or to the extent converted into cash)
to the referent Person or a Subsidiary thereof in respect of such period;



     (8) any non-cash impairment charges or asset write-off or write-down resulting from the
application of Statement of Financial Accounting Standards No. 142;



     (9) any non-cash expense realized or resulting from any employee benefit plans,
post-employment benefit plans, deferred stock compensation plan or grants of stock appreciation or
similar rights, stock options, restricted stock or other rights to officers, directors and
employees of such Person or any of its Subsidiaries;



     (10) non-cash gains, losses, income and expenses resulting from fair value accounting required
by Statement of Financial Accounting Standards No. 133;



     (11) accruals and reserves that are established within twelve months after the Closing Date
and that are so required to be established in accordance with GAAP; and



     (12) non-cash charges for deferred tax asset valuation allowances.



     “Consolidated Non-cash Charges” means, with respect to any Person for any period, the
aggregate depreciation, amortization and other non-cash expenses or other non-cash items of such
Person and its Subsidiaries reducing Consolidated Net Income of such Person for such period on a
consolidated basis and otherwise determined in accordance with GAAP, but excluding any such charge
which consists of or requires an accrual of, or cash reserve for, anticipated cash charges for any
future period.



     “Consolidated Taxes” means provision for taxes based on income, profits or capital,
including state, franchise and similar taxes taken into account in calculating Consolidated Net
Income.



     “Contaminant” means any waste, pollutant, hazardous substance, toxic substance,
hazardous waste, special waste, petroleum or petroleum-derived substance or waste, asbestos in any
form or condition, polychlorinated biphenyls (“PCBs”), or any constituent of any such substance or
waste.



     “Conversion/Continuation Date” means the effective date of (a) any conversion of LIBOR
Rate Revolving Loans to Base Rate Revolving Loans or of Base Rate Revolving Loans to LIBOR Rate
Revolving Loans or (b) any continuation of LIBOR Rate Revolving Loans as



Loan And Security Agreement — Page 11




 









 







LIBOR Rate Revolving Loans.




     “Copyright, Patent, and Trademark Agreements” means each Copyright Security Agreement,
Patent Security Agreement, and Trademark Security Agreement executed and delivered by a Loan Party
to the Collateral Agent to evidence and perfect the Collateral Agent’s security interest in such
Loan Party’s present and future copyrights, patents, trademarks, and related licenses and rights,
in each case, other than any Excluded Assets, for the benefit of the Secured Parties.



     “Default” means any event or circumstance which, with the giving of notice, the lapse
of time, or both, would (if not cured, waived, or otherwise remedied during such time) constitute
an Event of Default.



     “Default Rate” means a fluctuating per annum interest rate at all times equal to the
sum of (a) the otherwise applicable Interest Rate plus (b) two percent (2.0%). Each
Default Rate shall be adjusted simultaneously with any change in the applicable Interest Rate. In
addition, with respect to Letters of Credit, the Default Rate shall mean the Letter of Credit Fee
Percentage, plus two percent (2.0%).



     “Defaulting Lender” has the meaning specified in Section 2.2(g)(iii).



     “Disqualified Stock” shall mean, with respect to any Person, any Capital Stock of such
Person which, by its terms (or by the terms of any security into which it is convertible or for
which it is redeemable or exchangeable), or upon the happening of any event:



     (a) matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise,



     (b) is convertible or exchangeable for Indebtedness or Disqualified Stock of such Person, or



     (c) is redeemable at the option of the holder thereof, in whole or in part,



     in each case prior to 91 days after the Termination Date;


provided, however, that only the portion of Capital Stock which so matures or is
mandatorily redeemable, is so convertible or exchangeable or is so redeemable at the option of the
holder thereof prior to such date shall be deemed to be Disqualified Stock; provided,
further, however, that (x) if such Capital Stock is issued to any employee or to
any plan for the benefit of employees of Parent or its Subsidiaries or by any such plan to such
employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be
required to be repurchased by Parent in order to satisfy applicable statutory or regulatory
obligations or as a result of such employee’s termination, death or disability and (y) such Capital
Stock shall not constitute Disqualified Stock if such Capital Stock matures or is mandatorily
redeemable or is redeemable at the option of the holders thereof as a result of a change of control
or asset sale; provided,
further, that any class of Capital Stock of such Person that by its terms authorizes such
Person to satisfy its obligations thereunder by delivery of Capital Stock that is not Disqualified
Stock shall not be deemed to be Disqualified Stock.




Loan And Security Agreement — Page 12




 









 








     “Distribution” means, with respect to any Person: (a) the payment or making of any
dividend or other distribution of property in respect of such Person’s Capital Stock (or any
options or warrants for, or other rights with respect to, such Capital Stock), other than
distributions solely in such Person’s Capital Stock (or any options or warrants for, or other
rights with respect to, such Capital Stock) other than Disqualified Stock; or (b) the redemption or
other acquisition by such Person of any Capital Stock (or any options or warrants for, or other
rights with respect to, such Capital Stock) other than with such Person’s Capital Stock other than
Disqualified Stock.



     “DOL” means the United States Department of Labor or any successor department or
agency.



     “Dollar” and “$” means dollars in the lawful currency of the United States.



     “Electronic Chattel Paper” means any “electronic chattel paper”, as such term is
defined in the UCC, now owned or hereafter acquired by any Person.



     “Eligible Accounts” means all Accounts of the Loan Parties reflected in the most
recent Borrowing Base Certificate, except any Account with respect to which any of the exclusionary
criteria set forth below applies (unless the Agents in their sole discretion elect to include such
Account), such excluded Accounts being Accounts:



     (a) with respect to which more than one hundred twenty (120) days have elapsed since the date
of the original invoice therefor or which is more than sixty (60) days past due; provided
that Accounts listed on Schedule 1.1(E) (as updated from time to time by Parent (with the
consent of the Agents, not to be unreasonably withheld or delayed) in accordance with its normal
credit approval procedure) shall be ineligible pursuant to this clause (a) only if they are more
than sixty (60) days past due or one hundred eighty (180) days from the invoice date;



     (b) with respect to which any of the representations, warranties, covenants, and agreements
contained in Section 6.8 are not or have ceased to be correct or have been breached;



     (c) with respect to which Account (or any other Account due from such Account Debtor), in
whole or in part, a check, promissory note, draft, trade acceptance, or other instrument for the
payment of money has been received, presented for payment, and returned uncollected for any reason;



     (d) which represents a progress billing; provided that for the purposes hereof,
“progress billing” means any invoice for goods sold or leased or services rendered under a contract
or agreement pursuant to which the Account Debtor’s obligation to pay such invoice is conditioned
upon such Loan Party’s completion of any further performance under the contract or agreement;



     (e) with respect to which any one or more of the following events has occurred to the Account
Debtor on such Account: (i) death or judicial declaration of incompetency of an Account Debtor who
is an individual; (ii) the filing by or against the Account Debtor of a request or petition for
liquidation, reorganization, arrangement, adjustment of debts, adjudication as a bankrupt,
winding-up, or other relief under the bankruptcy, insolvency, or similar laws of the



Loan And Security Agreement — Page 13




 









 







United States,
any state or territory thereof, or any foreign jurisdiction, now or hereafter in effect; (iii) the
making of any general assignment by the Account Debtor for the benefit of creditors; (iv) the
appointment of a receiver or trustee for the Account Debtor or for any of the assets of the Account
Debtor, including, without limitation, the appointment of or taking possession by a “custodian”, as
defined in the Bankruptcy Code; (v) the institution by or against the Account Debtor of any other
type of insolvency proceeding (under the Bankruptcy Code or otherwise) or of any formal or informal
proceeding for the dissolution or liquidation of, settlement of claims against, or winding up of
affairs of, the Account Debtor; (vi) the sale, assignment, or transfer of all or substantially all
of the assets of the Account Debtor; (vii) the nonpayment generally by the Account Debtor of its
debts as they become due; or (viii) the cessation of the business of the Account Debtor as a going
concern;




     (f) if fifty percent (50.0%) or more of the aggregate Dollar amount of outstanding Accounts
owed at such time by the Account Debtor thereon is classified as ineligible under clause
(a) preceding;



     (g) owed by an Account Debtor which: (i) does not maintain its chief executive office in the
United States or Canada; or (ii) is not organized under the laws of the United States or Canada or
any political subdivision, state, or province thereof; or (iii) is the government of any foreign
country or sovereign state, or of any state, province, municipality, or other political subdivision
thereof, or of any department, agency, public corporation, or other instrumentality thereof; except
to the extent that such Account is insured by the Export-Import Bank of the United States or
secured or payable by a letter of credit satisfactory to the Collateral Agent in its reasonable
discretion;



     (h) Intercompany Accounts or other Accounts owed by an Account Debtor which is an Affiliate or
employee of such Loan Party (not including, for the avoidance of doubt, any Apollo Operating
Company);



     (i) except as agreed by the Agents as provided in clause (g) preceding or clause
(l) following regarding political subdivisions of the United States but not the U.S. federal
government, with respect to which either the perfection, enforceability, or validity of the
Collateral Agent’s Lien in such Account, or the Collateral Agent’s right or ability to obtain
direct payment to the Collateral Agent of the proceeds of such Account, is governed by any federal,
state, or local statutory requirements other than those of the UCC;



     (j) owed by an Account Debtor to which a Loan Party or any of their respective Subsidiaries is
indebted in any way, or which is subject to any right of set-off or recoupment by the Account
Debtor, unless the Account Debtor has entered into an agreement acceptable to the Collateral Agent
to waive set-off rights; or if the Account Debtor thereon has disputed liability or made any claim
with respect to any other Account due from such Account Debtor; but in each such case only to the
extent of such indebtedness, set-off, recoupment, dispute, or claim;



     (k) with respect to which such Loan Party at the time of determination deems such Account as
uncollectible;



Loan And Security Agreement — Page 14




 









 








     (l) owed by any state of the United States or any municipality, or other political
subdivision, department, agency, public corporation, or other instrumentality thereof, and as to
which the Collateral Agent determines that its Lien therein is not or cannot be perfected;



     (m) which represents a sale on a bill-and-hold, guaranteed sale, sale and return, sale on
approval, consignment, or other repurchase or return basis;



     (n) which is evidenced by a promissory note or other instrument or by chattel paper;



     (o) [Reserved];



     (p) in the Agents’ Reasonable Credit Judgment upon thirty (30) days’ prior notice to Parent,
with respect to which the Account Debtor is located in any state requiring the filing of a Notice
of Business Activities Report or similar report in order to permit such Loan Party to seek judicial
enforcement in such state of payment of such Account, unless such Loan Party has qualified to do
business in such state or has filed a Notice of Business Activities Report or equivalent report for
the then current year;



     (q) which arises out of a sale not made in the ordinary course of such Loan Party’s business;



     (r) with respect to which the goods giving rise to such Account have not been shipped and
delivered to, or have been rejected or objected to, by the Account Debtor or the services giving
rise to such Account have not been performed by such Loan Party, and, if applicable, accepted by
the Account Debtor, or the Account Debtor revokes its acceptance of such goods or services, but, in
each case, only to the extent of the portion of such Account applicable to goods or services in
question;



     (s) which arises out of an enforceable contract or order which, by its terms, validly forbids,
restricts, or makes void or unenforceable the granting of a Lien by such Loan Party to the
Collateral Agent with respect to such Account;



     (t) which is not subject to a first priority and perfected security interest in favor of the
Collateral Agent, for the benefit of the Collateral Agent and the Lenders, or which is subject to
any other Lien other than Noteholder Liens and Permitted Liens arising by operation of law; and



     (u) which is an Account owed to a Newly Obligated Party acquired in a Permitted Acquisition
under this Agreement, for which the Collateral Agent has not been given the opportunity for a
reasonable period (which shall not be required to be longer than thirty (30) days (or, in the case
of acquisitions of less than $50,000,000, twenty (20) days)) to complete such due diligence as it
deems, in the exercise of Reasonable Credit Judgment, to be necessary in the circumstances.



     If any Account at any time ceases to be an Eligible Account, then such Account shall promptly
be excluded from the calculation of the Borrowing Base; provided, however, that if
any Account ceases to be an Eligible Account because of the adjustment of or imposition of new
exclusionary criteria pursuant to the succeeding paragraph, the Agents will not require exclusion



Loan And Security Agreement — Page 15




 









 







of such Account from the Borrowing Base until fifteen (15) days following the date on which an
Agent gives notice to Parent of such ineligibility.




     The Agents reserve the right, at any time and from time to time after the Closing Date, to
adjust any of the exclusionary criteria set forth above and to establish new criteria, in their
Reasonable Credit Judgment (based on an analysis of material facts or events first occurring, or
first discovered by the Agents, after the Closing Date), subject to the approval of Required
Lenders in the case of adjustments or new criteria which have the effect of making more credit
available than would have been available based upon the criteria in effect on the Closing Date.
The Agents acknowledge that as of the Closing Date they do not know of any circumstance or
condition with respect to the Accounts that would require the adjustment or imposition of any of
the exclusionary criteria set forth above.



     “Eligible Assignee” means (a) a commercial bank, commercial finance company, or other
asset based lender having total assets in excess of $1,000,000,000; (b) any Lender; (c) any
Affiliate of any Lender; (d) any other asset based lender which is regularly engaged in making,
purchasing, or investing in loans which are similar to the loans provided for in this Agreement and
which are in excess of $150,000,000; (e) any mutual fund, insurance company or investment fund that
is an “accredited investor” (as defined in Regulation D of the Securities Act of 1933, as amended)
and is regularly engaged in making, purchasing or investing in loans of the type to be assigned to
it; and (f) any other Person reasonably acceptable to the Administrative Agent, and in each case
(other than clauses (b) and (c) preceding), so long as no Event of Default exists
hereunder, which assignee is reasonably acceptable to Parent; provided (i) neither Parent
nor any Affiliate thereof shall be an Eligible Assignee; (ii) no Person a material portion of whose
business consists of buying and/or selling metal or metal products shall be an Eligible Assignee
and (iii) at no time shall an Ineligible Institution be an Eligible Assignee.



     “Eligible Inventory” means all Inventory of the Loan Parties reflected in the most
recent Borrowing Base Certificate, except any Inventory with respect to which any of the
exclusionary criteria set forth below applies (unless the Agents in their sole discretion elect to
include any such Inventory):



     (a) Inventory that is not owned by a Loan Party;



     (b) Inventory that is not subject to the Collateral Agent’s Liens, or is subject to any other
Lien (other than Permitted Liens arising by operation of law or the Noteholder Liens);
provided that (unless such Permitted Liens (A) are junior in priority to the Collateral
Agent’s Liens (other than statutory landlord’s Liens to the extent provided otherwise by a
Requirement of Law) and (B) do not impair directly or indirectly the ability of the Collateral
Agent to realize on or obtain the full benefit of the Collateral), the Agents may, in the exercise
of Reasonable Credit Judgment, establish a Reserve against Availability with respect to any
Inventory subject to such Permitted Liens in an amount not to exceed (on an aggregate basis for all
Inventory from time to time subject to such Permitted Liens) (A) in the case of Inventory subject
to Liens described in
clause (g) of the definition of Permitted Liens, the greater of (x) an amount equal to
the amount which would have to be paid to such Lien claimant in order to obtain a release of such
Liens, or (y) an amount equal to thirty (30) days’ rent for the properties or facilities on or at
which the applicable Inventory is located and (B) in the case of Inventory subject to Liens
described in



Loan And Security Agreement — Page 16




 









 







clause (d) of the definition of Permitted Liens, the amount of such taxes,
fees, assessments or other charges;




     (c) Inventory that does not consist of finished goods or raw materials;




     (d) Inventory that consists of chemicals, supplies, packing and shipping materials, or
advertising or marketing materials (including samples);



     (e) Inventory that is not in good condition, is unmerchantable, or fails to meet all material
standards imposed by any Governmental Authority having regulatory authority over such goods, its
use, or sale;



     (f) Inventory that is not currently either usable or salable in the normal course of such Loan
Party’s business;



     (g) Inventory that is slow-moving (i.e., held by a Loan Party for greater than twelve (12)
months), obsolete or defective, or used goods taken in trade;



     (h) Inventory that is not located within the United States (or is in-transit from vendors or
suppliers, except that Inventory in-transit will not be deemed ineligible if it has been paid for
in advance of shipment and legal ownership thereof has passed to such Loan Party as evidenced by
customary documents of title );



     (i) if such Inventory is located in a public warehouse or in possession of a bailee or in a
facility leased by such Loan Party, provided that such Inventory will be Eligible Inventory
if the warehouseman, the bailee, or the lessor has delivered to the Collateral Agent, if requested
by the Agents, a subordination agreement in form and substance reasonably satisfactory to the
Agents (or if such Loan Party is unable to obtain any such subordination or such subordination has
not been requested, such Inventory shall be Eligible Inventory but the Agents may, in the exercise
of Reasonable Credit Judgment, establish a Reserve with respect to any Inventory so located or
possessed in an amount not to exceed (on an aggregate basis for all Inventory from time to time so
located or possessed) (A) in the case of Inventory located in a public warehouse or leased
facility, the greater of (x) an amount equal to the amount which would have to be paid to such
claimant in order to obtain a release of any Permitted Lien held by such claimant, or (y) an amount
equal to thirty (30) days’ rent or storage fee for the warehouses or facilities on or at which the
applicable Inventory is located and (B) in the case of Inventory otherwise in the possession of a
bailee, the amount necessary to complete any work being performed on such Inventory and/or to
obtain a surrender of the Inventory to the possession of such Loan Party or the Collateral Agent);



     (j) if such Inventory contains or bears any Proprietary Rights licensed to a Loan Party by any
third party, the Collateral Agent shall not be reasonably satisfied that it may sell or otherwise
dispose of such Inventory in accordance with Article 11 without infringing the rights of
the licensor of such Proprietary Rights or violating any contract with such licensor (and
without payment of any royalties other than any royalties due with respect to the sale or
disposition of such Inventory pursuant to the existing license agreement), and, if the Collateral
Agent deems it necessary, such Loan Party shall deliver to the Collateral Agent a consent or



Loan And Security Agreement — Page 17




 









 







sublicense agreement from such licensor in form and substance reasonably acceptable to the
Collateral Agent; and




     (k) Inventory that is owned by a Newly Obligated Party acquired in a Permitted Acquisition
under this Agreement, for which the Collateral Agent has not been given the opportunity for a
reasonable period (which shall not be required to be longer than thirty (30) days (or, in the case
of acquisitions of less than $50,000,000, twenty (20) days)) to complete such due diligence as it
deems, in the exercise of Reasonable Credit Judgment, to be necessary in the circumstances.



     If any Inventory at any time ceases to be Eligible Inventory, such Inventory shall promptly be
excluded from the calculation of the Borrowing Base; provided, however, that if any
Inventory ceases to be Eligible Inventory because of the adjustment of or imposition of new
exclusionary criteria pursuant to the succeeding paragraph, the Agents will not require exclusion
of such Inventory from the Borrowing Base until fifteen (15) days following the date on which an
Agent gives notice to Parent of such ineligibility.



     The Agents reserve the right, at any time and from time to time after the Closing Date, to
adjust any of the exclusionary criteria set forth above and to establish new criteria, in their
Reasonable Credit Judgment (based on an analysis of material facts or events first occurring, or
first discovered by the Agents, after the Closing Date), subject to the approval of the Required
Lenders in the case of adjustments or new criteria which have the effect of making more credit
available than would be available based upon the criteria in effect on the Closing Date. The
Agents acknowledge that as of the Closing Date they do not know of any circumstance or condition
with respect to the Inventory that would require the adjustment or imposition of any of the
exclusionary criteria set forth above.



     “Environmental Laws” means all federal, state, or local laws, statutes, common law
duties, rules, regulations, ordinances, and codes, together with all administrative orders,
directed duties, licenses, authorizations, and permits of, and agreements with, any Governmental
Authority, in each case relating to environmental, health, safety, and land use matters.



     “Environmental Lien” means a Lien in favor of any Governmental Authority for (a) any
liability under Environmental Laws or (b) damages arising from, or costs incurred by such
Governmental Authority in response to, a Release or threatened Release of a Contaminant into the
environment.



     “Equipment” means, with respect to a Person, all of such Person’s now owned and
hereafter acquired machinery, equipment as defined by the UCC, furniture, furnishings, fixtures,
and other tangible personal property (except Inventory), including motor vehicles and other rolling
stock with respect to which a certificate of title has been issued, aircraft, dies, tools, jigs,
and office equipment, as well as all of such types of property leased by such Person and all of
such Person’s rights and interests with respect thereto under such leases (including, without
limitation, options to purchase); together with all present and future additions and accessions
thereto, replacements therefor, component and auxiliary parts and supplies used or to be used
in connection therewith, and all substitutes for any of the foregoing, and all manuals, drawings,
instructions, warranties, and rights with respect thereto, wherever any of the foregoing is
located.



Loan And Security Agreement — Page 18




 









 








     “Equity Contribution” means the contribution by the Equity Investor and the Management
Participants of not less than $140,000,000 in cash to Flag Holdings Corporation in the form of
common and/or preferred equity, and the purchase of additional common equity of, or the
contribution to, Merger Sub in the amount so received.



     “Equity Investors” means one or more investment funds advised, managed or controlled
by Apollo Management V, L.P., their Affiliates, and any group in which any such Equity Investors
are, in the aggregate, a principal member.



     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and any
successor statute, and all rules and regulations from time to time promulgated thereunder.



     “ERISA Affiliate” means any entity with which any Borrower is treated as a single
employer under Section 414(b) or (c) of the Code.



     “Event of Default” has the meaning specified in Section 11.1.



     “Exchange Act” means the Securities Exchange Act of 1934, and regulations promulgated
thereunder.



     “Excluded Assets” means:



     (a) Real Estate and/or Equipment (or any proceeds thereof) to the extent securing the
Borrowers’ industrial development revenue bonds outstanding on the Closing Date and as set forth on
Schedule 9.13, and any permitted refinancing thereof;



     (b) any right, title or interest in any permit, lease, license, contract or agreement held by
any Loan Party or to which any Loan Party is a party or any of its right, title or interest
thereunder to the extent, but only to the extent, that such a grant would, under the terms of such
permit, lease, license, contract or agreement to which any Loan Party is a party, result in a
breach of the terms of, or constitute a default under, any such permit, lease, license, contract or
agreement held by such Loan Party or to which such Loan Party is a party (other than to the extent
that any such term would be rendered ineffective pursuant to Section 9-406, 9-408 or 9-409 of the
UCC or any other applicable law (including Title 11 of the United States Code) or principles of
equity); provided, that immediately upon the ineffectiveness, lapse or termination of any such
provision, such right, title or interest in such permit, lease, license, contract or agreement
shall cease to be an “Excluded Asset”;



     (c) any vehicle covered by a certificate of title or ownership;



     (d) any Letter of Credit Rights to the extent any Loan Party is required by applicable law to
apply the proceeds of a drawing of such Letter of Credit for a specified purpose;



     (e) any Investment Property to the extent it constitutes (i) more than 65% of the issued and
outstanding voting Capital Stock of any foreign Subsidiary or (ii) Capital Stock of a Person that
constitutes a Subsidiary (other than a Wholly-owned Subsidiary) the pledge of which would violate a
contractual obligation to the owners of the other Capital Stock of such Person



Loan And Security Agreement — Page 19




 









 







(other than any such
owners that are Affiliates of the Equity Investor) that is binding on or relating to such Capital
Stock; and




     (f) (i) any “Excluded Assets” as defined in the Senior Secured Indenture and the Senior Notes
Collateral Agreement or (ii) any other asset which would constitute Notes Collateral (as defined in
the Senior Secured Indenture) but for (1) the fact that the Noteholder Collateral Agent has not
required a lien on such assets or (2) the operation of Section 11.01(b) in the Senior Secured
Indenture, in each case of (i) or (ii) other than (a) any such assets constituting Inventory or
Accounts or proceeds thereof and (b) any assets that are required to secure the Obligations
following the drawing in full of any IDRB Letter of Credit as contemplated by Section
2.3(e)(i).



     “Excluded Taxes” means (i) any and all taxes imposed on or measured by net income in
the United States of America or in any jurisdiction (whether federal, state, local or foreign and
including any political subdivision thereof), in each case, imposed on an Agent or Lender as a
result of a present or former connection between such Agent or Lender (including its applicable
lending office) and the jurisdiction imposing such tax (other than a connection arising solely from
such Agent’s or Lender’s having executed, delivered, performed its obligations or received a
payment under, or enforced, this Agreement or any other Loan Document), (ii) any branch profits and
franchise taxes imposed by the United States of America or any similar tax imposed by any other
jurisdiction described in clause (i) above and (iii) in the case of a Non-U.S. Lender, any
withholding tax that is imposed on amounts payable to such Non-U.S. Lender at the time such
Non-U.S. Lender becomes a party to this Agreement (or designates a new lending office) or is
attributable to such Non-U.S. Lender’s failure to comply with the requirements of Section 14.10,
except to the extent such Non-U.S. 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
Borrower with respect to such withholding tax pursuant to Section 5.1(c).



     “Existing Credit Agreement” means the Loan and Security Agreement, as amended, dated
as of October 31, 2002, among Bank of America, N.A., as administrative agent, Parent and the other
Borrowers, as borrowers, and each of the financial institutions party thereto as lenders.



     “Existing Letter of Credit” means each Letter of Credit previously issued for the
account of the Borrowers that (a) is outstanding on the Closing Date and (b) is listed on
Schedule 1.1(D).



     “Fair Market Value” means, with respect to any asset or property, the price which
could be negotiated in an arm’s-length, free market transaction, for cash, between a willing seller
and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the
transaction.



     “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



Loan And Security Agreement — Page 20




 









 







Funds Rate for such day shall be the average of the quotations on such day on such
transactions received by the Administrative Agent from three Federal funds brokers of recognized
standing selected by it.




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



     “Fee Letter” shall mean the Amended and Restated Fee Letter dated June 8, 2005, among
Merger Sub, Credit Suisse, CIBC World Markets Corp., Bank of America, N.A. and Banc of America
Securities LLC.



     “Financial Assets” means any “financial asset”, as such term is defined in the UCC,
now owned or hereafter acquired by any Person, in each case, other than any Excluded Assets.



     “Financial Statements” means, according to the context in which it is used, the
financial statements referred to in Section 8.6 or any other financial statements required
to be given to the Administrative Agent or the Lenders pursuant to this Agreement.



     “Fiscal Period” means a calendar month.



     “Fiscal Quarter” means one of the four three (3) calendar month fiscal measurement
periods in each Fiscal Year.



     “Fiscal Year” means Parent’s fiscal year for financial accounting purposes. The
Fiscal Year of Parent ends on December 31 of each year.



     “Fixed Charge Coverage Ratio” means the ratio of (i) Adjusted EBITDA of Parent for the
most recent period of four consecutive Fiscal Quarters for which financial statements are available
minus the income taxes paid in cash by Parent and included in the determination of Consolidated Net
Income during such period minus non-financed Capital Expenditures of Parent and its Subsidiaries
during such period to (ii) the sum of (1) scheduled principal payment required to be made during
such period in respect to Indebtedness for borrowed money plus (2) the Consolidated
Interest Expense (excluding amortization of any original issue discount, interest paid in kind or
added to principal and other noncash interest) for such period plus (3) Distributions
pursuant to Section 9.10(a)(ii) or (iii) in each case to the extent paid by Parent in cash.



     For purposes of calculating the Fixed Charge Coverage Ratio with respect to measurement
periods that include periods prior to the Closing Date, the components of such ratio for Parent and
its Subsidiaries for the following Fiscal Quarters shall be the amounts set forth below:



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Non-Financed	 	 	 	 	 	Consolidated
	Fiscal Quarter	 	Adjusted	 	Income	 	Capital	 	Scheduled	 	Interest
	Ending:	 	EBITDA:	 	Taxes:	 	Expenditures:	 	Principal:	 	Expense:
	March 31, 2005
	 	$	31,700,000	 	 	$	6,300,000	 	 	$	2,700,000	 	 	$	0	 	 	$	11,900,000	 
	June 30, 2005
	 	$	27,800,000	 	 	$	2,500,000	 	 	$	5,600,000	 	 	$	0	 	 	$	12,400,000	 
	September 30, 2005
	 	$	21,000,000	 	 	$	4,200,000	 	 	$	5,000,000	 	 	$	0	 	 	$	11,600,000	 




Loan And Security Agreement — Page 21




 









 








     “Funding Date” means the date on which a Borrowing occurs.



     “GAAP” means generally accepted accounting principles and practices set forth from
time to time in the opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board (or agencies with similar functions of comparable stature and authority
within the United States accounting profession).



     “General Intangibles” means, with respect to a Person, all of such Person’s now owned
or hereafter acquired general intangibles, as defined in the UCC, including payment intangibles,
choses in action and causes of action and all other intangible personal property of such Person of
every kind and nature (other than Accounts), including, without limitation, all contract rights,
Proprietary Rights, corporate or other business records, inventions, designs, blueprints, plans,
specifications, patents, patent applications, trademarks, service marks, trade names, trade
secrets, goodwill, copyrights, computer software, customer lists, registrations, licenses,
franchises, tax refund claims, any funds which may become due to such Person in connection with the
termination of any Plan or other employee benefit plan or any rights thereto and any other amounts
payable to such Person from any Plan or other employee benefit plan, rights and claims against
carriers and shippers, rights to indemnification, business interruption insurance and proceeds
thereof, property, casualty or any similar type of insurance and any proceeds thereof, proceeds of
insurance covering the lives of key employees on which such Person is beneficiary, rights to
receive dividends, distributions, cash, Instruments and other property in respect of or in exchange
for pledged equity interests or Investment Property, and any letter of credit, guarantee, claim,
security interest, or other security held by or granted to such Person, in each case, other than
any Excluded Assets.



     “Governmental Authority” means any nation or government, any state or other political
subdivision thereof, any central bank (or similar monetary or regulatory authority) thereof, any
entity exercising executive, legislative, judicial, regulatory, or administrative functions of or
pertaining to government.



     “Guaranty” means, with respect to any Person, all obligations of such Person which in
any manner directly or indirectly guarantee or assure, or in effect guarantee or assure, the
payment or performance of any Indebtedness, or other obligations of any other Person (the
“guaranteed obligations”), or assure or in effect assure the holder of the guaranteed obligations
against loss in respect thereof, including any such obligations incurred through an agreement,
contingent or otherwise: (a) to purchase the guaranteed obligations or any property constituting
security therefor; (b) to advance or supply funds for the purchase or payment of the guaranteed
obligations or to maintain a working capital or other balance sheet condition; or (c) to lease
property or to purchase any debt or equity securities or other property or services.



     “Guaranty Agreements” means the Guaranty Agreement, substantially in the form of



Loan And Security Agreement — Page 22




 









 







Exhibit I hereto, entered into from time to time by the Guarantors party thereto and the
Collateral Agent.




     “Guarantors” means Holdings, each Borrower and each Subsidiary (other than any
Subsidiary that is a controlled foreign corporation for U.S. federal income tax purposes) and each
other Person in each case who now or hereafter Guaranties payment or performance of the whole or
any part of the Obligations.



     “Hedge Agreement” means any and all transactions, agreements, or documents now
existing or hereafter entered into, which provide for an interest rate, credit, commodity, or
equity swap, cap, floor, collar, forward foreign exchange transaction, currency swap, cross
currency rate swap, currency option, or any combination of, or option with respect to, these or
similar transactions, for the purpose of hedging a Person’s exposure to fluctuations in interest or
exchange rates, loan, credit exchange, security, or currency valuations, or commodity prices.



     “Hedging Obligations” means any and all obligations under Hedge Agreements.



     “Holdings” means Flag Intermediate Holdings Corporation, a Delaware corporation.



     “Incremental Availability” means: (a) prior to the date that is six months from the
Closing Date, the sum of (i) five percent (5.0%) of the Net Amount of Eligible Accounts
plus (ii) ten percent (10.0%) of the Orderly Liquidation Value of Eligible Inventory; and
(b) thereafter, the sum of (i) five percent (5.0%) of the Net Amount of Eligible Accounts
plus (ii) five percent (5.0%) of the Orderly Liquidation Value of Eligible Inventory.



     “IDRB Letter of Credit” means any standby Letter of Credit issued under or pursuant to
or rolled into this Agreement as security for the Borrowers’ existing industrial development
revenue bonds as described on Schedule 9.13 and any permitted refinancing thereof, in an
aggregate undrawn amount not to exceed at any time $20,000,000.



     “Indebtedness” means with respect to a Person, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all indebtedness of such Person evidenced by
bonds, notes, debentures, or other similar instruments, (c) the amount of all indebtedness of such
Person under Capital Leases, (d) the amount of all Indebtedness of such Person secured by a Lien
existing on property owned by such Person whether or not the Indebtedness secured thereby has been
assumed by such Person or is non-recourse to such Person (provided that the amount thereof shall be
deemed to be the lesser of the outstanding principal amount thereof or the Fair Market Value of
such property (determined in good faith by Parent)), (e) the deferred and unpaid purchase price of
property or services (excluding trade accounts payable of such Person arising in the ordinary
course of business that are not past due by more than ninety (90) days or that are being contested
in good faith by appropriate proceedings diligently pursued and for which adequate reserves have
been established in accordance with GAAP), (f) all reimbursement obligations of such Person
(whether contingent or otherwise) in respect of letters of credit, bankers’ acceptances, surety or
other bonds, and similar instruments, and (g) the imputed principal balance outstanding under any
synthetic lease, tax retention operating lease, off balance
sheet loan, or similar off balance sheet financing product to which such Person is a party,
where such transaction is considered borrowed money indebtedness for tax purposes but is classified
as



Loan And Security Agreement — Page 23




 









 







an operating lease in accordance with GAAP.




     “Ineligible Institution” shall mean the Persons identified as such in writing to the
Agents by Parent on or prior to the Closing Date. Thereafter, Parent may request that additional
Persons be “Ineligible Institutions” with the written consent of the Agents, and may specify that
previously identified Persons are no longer “Ineligible Institutions”, in each case by delivery of
written notice thereof to the Agents setting forth such Person or Persons.



     “Intercompany Accounts” means all assets and liabilities, however arising, which are
due to any Loan Party from, which are due from any Loan Party to, or which otherwise arise from any
transaction by any Loan Party with, any Affiliate of such Loan Party.



     “Intercompany Obligations” shall mean, collectively, all indebtedness, obligations and
other amounts at any time owing to any Loan Party from any of such Loan Party’s Subsidiaries or
Affiliates and all interest, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all of such
indebtedness, obligations or other amounts in each case other than any Excluded Assets.



     “Intercreditor Agreement” means the Lien Subordination and Intercreditor Agreement
dated as of the date hereof, among Holdings, Parent, Parent’s Subsidiaries party thereto, the
Collateral Agent, the Noteholder Collateral Agent and the Trustee, as amended, restated,
supplemented or otherwise modified from time to time.



     “Interest Period” means, with respect to any LIBOR Rate Revolving Loan, the period
commencing on the Funding Date of such Revolving Loan or on the Conversion/Continuation Date on
which such Revolving Loan is converted into or continued as a LIBOR Rate Revolving Loan, and ending
on the date one, two, three or six months thereafter (or nine or 12 months thereafter, if all
Lenders participating therein agree to make an Interest Period of such duration available) as
selected by a Borrower in a Notice of Borrowing or a Notice of Conversion/Continuation;
provided that:



     (a) if any Interest Period would otherwise end on a day that is not a Business Day, that
Interest Period shall be extended to the following Business Day unless the result of such extension
would be to carry such Interest Period into another calendar month, in which event such Interest
Period shall end on the preceding Business Day;



     (b) any Interest Period pertaining to a LIBOR Rate Revolving Loan 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



     (c) no Interest Period shall extend beyond the Stated Termination Date.



     “Interest Rate” means each or any of the interest rates, including the Default Rate,
set forth in Section 3.1.



     “Inventory” means, with respect to a Person, all of such Person’s now owned and
hereafter acquired inventory, as defined in the UCC, goods, and merchandise, wherever located,



Loan And Security Agreement — Page 24




 









 







in
each case to be furnished under any contract of service or held for sale or lease, all returned
goods, raw materials, work-in-process, finished goods (including embedded software), other
materials, and supplies of any kind, nature, or description which are used or consumed in such
Person’s business or used in connection with the packing, shipping, advertising, selling, or
finishing of such goods, merchandise, and other property, and all documents of title or other
documents representing them.




     “Investment Property” means, with respect to a Person, all of such Person’s right,
title, and interest in and to any and all investment property, as defined in the UCC, including,
without limitation, all (a) securities whether certificated or uncertificated, (b) securities
entitlements, (c) securities accounts, (d) commodity contracts and (e) commodity accounts; together
with all other units, shares, partnership interests, membership interests, equity interests,
rights, or other equivalent evidences of ownership (howsoever designated) issued by any Person, in
each case, other than any Excluded Assets.



     “IRS” means the Internal Revenue Service and any Governmental Authority succeeding to
any of its principal functions under the Code.



     “Issuer” has the meaning specified in Section 6.2(d).



     “Lender” and “Lenders” have the meanings specified in the introductory
paragraph hereof and shall include the Administrative Agent to the extent of any Agent Advance
outstanding and the Swingline Lender to the extent of any Swingline Loan outstanding.



     “Letter of Credit” has the meaning specified in Section 2.3, and shall include
the Existing Letters of Credit and any IDRB Letters of Credit.



     “Letter of Credit Fee” has the meaning specified in Section 3.5.



     “Letter of Credit Fee Percentage” means with respect to any Letter of Credit issued by
the Letter of Credit Issuer pursuant to the terms of this Agreement, on any date of determination,
a per annum percentage equal to the lesser of (a) the Applicable Margin then in effect for LIBOR
Rate Tranche A Revolving Loans (or, to the extent the Tranche A-1 Lenders are then participating in
Letters of Credit pursuant to Section 2.3(f), for Tranche A-1 Revolving Loans) or (b) the
Maximum Rate.



     “Letter of Credit Issuer” means (a) Credit Suisse and Bank of America, N.A., acting
through any of their respective Affiliates or branches, in the capacity as the issuer of Letters of
Credit hereunder, or any other financial institution that issues any Letter of Credit pursuant to
this Agreement or designated as a Letter of Credit Issuer pursuant to Section 2.3(k) and (b) with
respect to each Existing Letter of Credit, Bank of America, N.A.



     “LIBOR Interest Payment Date” means, with respect to any LIBOR Rate Revolving Loan,
(i) the last day of the Interest Period applicable thereto and (ii) in the case of a LIBOR Rate
Revolving Loan with an Interest Period of more than three months’ duration, each day that would
have been a LIBOR Interest Payment Date had successive Interest Periods of three
months’ duration been applicable to such LIBOR Rate Revolving Loan.



Loan And Security Agreement — Page 25



 









 





     “LIBOR Rate” means, for any Interest Period, with respect to LIBOR Rate Revolving
Loans, the rate of interest per annum determined pursuant to the following formula:



	 	 	 	 	 	 	 	 	 
	 

	 	LIBOR Rate
	 	=
	 	Offshore Base Rate	 	 
	 

	 	 	 	 	 	 

1.00 — Eurodollar Reserve Percentage
	 	 







Where,




     “Eurodollar Reserve Percentage” means, for any day during any
Interest Period, the aggregate of the maximum reserve percentages (including
any marginal, special, emergency or supplemental reserves) expressed as a
decimal established by the Federal Reserve Board and any other banking
authority, domestic or foreign, to which the Administrative Agent or any
Lender (including any branch, Affiliate, or other fronting office making or
holding a loan) is subject for Eurocurrency Liabilities (as defined in
Regulation D of the Federal Reserve Board). LIBOR Rate Revolving Loans
shall be deemed to constitute Eurocurrency Liabilities (as defined in
Regulation D of the Federal Reserve Board) and to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or
offsets that may be available from time to time to any Lender under such
Regulation D. The LIBOR Rate for each outstanding LIBOR Rate Revolving Loan
shall be adjusted automatically as of the effective date of any change in
the Eurodollar Reserve Percentage.




     “Offshore Base Rate” means with respect to any LIBOR Rate
Revolving Loan for any Interest Period, the rate per annum determined by the
Administrative Agent at approximately 11:00 a.m. (London time) on the date
that is two Business Days prior to the commencement of such Interest Period
by reference to the British Bankers’ Association Interest Settlement Rates
for deposits in Dollars (as set forth by any service selected by the
Administrative Agent that has been nominated by the British Bankers’
Association as an authorized information vendor for the purpose of
displaying such rates) for a period equal to such Interest Period;
provided that, to the extent that an interest rate is not
ascertainable pursuant to the foregoing provisions of this definition, the
“Offshore Base Rate” shall be the interest rate per annum determined by the
Administrative Agent to be the average of the rates per annum at which
deposits in dollars are offered for such relevant Interest Period to major
banks in the London interbank market in London, England by the
Administrative Agent at approximately 11:00 a.m. (London time) on the date
that is two Business Days prior to the first day of such Interest Period for
a term comparable to such Interest Period.



     “LIBOR Rate Revolving Loan” means a Revolving Loan during any period in which it
bears interest based on the LIBOR Rate.



Loan And Security Agreement — Page 26




 









 








     “Lien” means, with respect to any asset, any lien arising from a mortgage, deed of
trust, encumbrance, pledge, hypothecation, assignment, deposit arrangement, agreement, charge,
security agreement, conditional sale or trust receipt or a lease, consignment, or bailment for
security purposes; provided that an agreement to sell shall not constitute a Lien.



     “Loan Account” means the loan account of the Borrowers, which account shall be
maintained by the Administrative Agent.



     “Loan Documents” means collectively this Agreement, the Revolving Notes, the Security
Documents, and each other agreement, certificate, document, or instrument executed or delivered by
any Loan Party to an Agent or any Lender in connection with this Agreement, the Obligations, or the
Collateral whether prior to, on, or after the Closing Date, and any and all renewals, extensions,
amendments, modifications, or restatements of any of the foregoing.



     “Loan Parties” means the Borrowers and the Guarantors.



     “Majority Lenders” means, as of any date of determination, the Lenders whose Pro Rata
Shares aggregate more than fifty percent (50.0%) as such percentage is determined according to the
definition of Pro Rata Share.



     “Management Participants” means members of senior management of Holdings, Parent or
any Borrower as of the Closing Date.



     “Margin Stock” means “margin stock” as such term is defined in Regulation T, U, or X
of the Federal Reserve Board.



     “Material Adverse Effect” means (i) a material adverse effect on the business,
condition (financial or otherwise), operation, performance or properties of the Loan Parties and
their Subsidiaries, taken as a whole, which materially impairs the ability of the Loan Parties to
perform their material obligations hereunder or under any Loan Document or (ii) a material adverse
effect on the validity or enforceability of the Loan Documents, the Collateral Agent’s Liens or the
rights and remedies of the Agents or Lenders under the Loan Documents.



     “Maximum Rate” means, at any time, the maximum rate of interest the Lenders may
lawfully contract for, charge, or receive in respect of the Obligations as allowed by any
Requirement of Law. As provided in Section 15.3, the parties have elected that this
Agreement be governed by the laws of the State of New York. If and to the extent, however, it
shall be necessary to determine the Maximum Rate under the Requirements of Law of the State of
Texas, the applicable rate ceiling shall be (a) the “weekly ceiling” described in and computed in
accordance with the provisions of Section 303.003 of the Texas Finance Code, as amended or (b) if
the parties subsequently contract as allowed by any Requirement of Law, the “quarterly ceiling” or
the “annualized ceiling” computed pursuant to Section 303.008 of the Texas Finance Code, as
amended; provided, however, that at any time the “weekly ceiling,” the “quarterly
ceiling,” or the “annualized ceiling” shall be less than eighteen percent (18.0%) per annum or more
than twenty-four percent (24.0%) per annum, the provisions of Section 303.009(a) and Section
303.009(b) of the Texas Finance Code, as amended, shall control for purposes of such
determination, as applicable.



Loan And Security Agreement — Page 27




 









 








     “Maximum Revolver Amount” means the sum of the Maximum Tranche A Revolver Amount and
the Maximum Tranche A-1 Revolver Amount.



     “Maximum Tranche A Revolver Amount”, means, at any time, the aggregate amount of the
Tranche A Commitments at such time.



     “Maximum Tranche A-1 Revolver Amount” means, at any time, the aggregate amount of the
Tranche A-1 Commitments at such time.



     “Merger Agreement” means the Agreement and Plan of Merger dated as of May 18, 2005,
among Flag Holdings Corporation, Merger Sub and Parent, as amended, restated, supplemented or
otherwise modified from time to time.



     “Merger” has the meaning specified in the introductory paragraph hereof.



     “Merger Sub” means Flag Acquisition Corporation, a Delaware corporation.



     “Moody’s” shall mean Moody’s Investors Service, Inc., or any successor thereto.



     “Mortgaged Properties” shall mean, initially, the owned real properties of the Loan
Parties specified on Schedule 1.1(C), and shall include each other parcel of real property
and improvements thereto with respect to which a Mortgage is granted pursuant to Section
9.27.



     “Mortgages” shall mean the mortgages, deeds of trust, assignments of leases and rents,
modifications and other security documents in favor of the Collateral Agent, for the benefit of
itself and the Secured Parties, by which the Loan Parties have granted to the Collateral Agent, as
security for the Obligations, a Lien upon Real Estate.



     “Multiemployer Plan” has the meaning set forth in Section 4001(a)(3) of ERISA.



     “Net Amount of Eligible Accounts” means, at any time, the gross amount of Eligible
Accounts less sales, excise, or similar taxes, and less returns, discounts, claims, credits, and
allowances of any nature at any time issued, owing, granted, outstanding, available, or claimed (in
each case without duplication, whether of the exclusionary criteria set forth in the definition of
Eligible Accounts, of any Reserve, or otherwise).



     “Net Income” means, with respect to any Person, the net income (or loss) of such
Person for the period in question determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends.



     “Newly Obligated Party” means each Person, if any, who becomes party to this Agreement
as a Loan Party effective as of any date after the Closing Date.



     “Non-U.S. Lender” shall have the meaning specified in Section 14.10(a).



     “Noteholder Collateral Agent” means Wells Fargo Bank, N.A., in its capacity as
collateral agent under the Senior Secured Indenture and the Senior Notes Collateral Agreement,
and its successors and assigns in such capacity.



Loan And Security Agreement — Page 28




 









 








     “Noteholder Liens” has the meaning set forth in the Intercreditor Agreement.



     “Notice of Borrowing” has the meaning specified in Section 2.2(b).



     “Notice of Conversion/Continuation” has the meaning specified in Section
3.2(b).



     “Obligations” means all present and future loans, advances, liabilities, obligations,
covenants, duties, and debts owing by Parent, the Loan Parties, or any of them, to an Agent, a
Bank, any Lender or any Affiliate of any of the foregoing, arising under or pursuant to (a) this
Agreement or any of the other Loan Documents, (b) Letters of Credit and (c) Bank Products, in each
case whether or not evidenced by any note, or other instrument or document, whether arising from an
extension of credit, opening of a letter of credit, acceptance, loan, guaranty, indemnification, or
otherwise, whether direct or indirect, absolute or contingent, due or to become due, primary or
secondary, as principal or guarantor, and including all principal, interest, charges, expenses,
fees, attorneys’ fees, filing fees, and any other sums chargeable to any Loan Party hereunder or
under any of the other Loan Documents.



     “Orderly Liquidation Value” means an amount equal to the most recently determined
Orderly Liquidation Value Factor multiplied by the book value of all Eligible Inventory of the Loan
Parties.



     “Orderly Liquidation Value Factor” means, with respect to Eligible Inventory of the
Loan Parties, the net orderly liquidation value thereof (expressed as a percentage) as determined
by an Acceptable Appraiser in accordance with Section 6.5; provided that the
Orderly Liquidation Value Factor as of the Closing Date shall be 74.6%, based on the report of
Hilco Appraisal Services, LLC dated as of October, 2005.



     “Other Taxes” means any present or future stamp or documentary taxes or any other
excise or property taxes, charges, or similar levies (excluding, in the case of each Lender and
each Agent, Excluded Taxes) which arise from any payment made hereunder or from the execution,
delivery, or registration of, or otherwise with respect to, this Agreement or any other Loan
Documents.



     “Parent” means Metals USA, Inc., a Delaware corporation.



     “Participant” means any commercial bank, financial institution, or other Person who
shall have been granted the right by any Lender to participate in the financing provided by such
Lender under this Agreement, and who shall have entered into a participation agreement in form and
substance satisfactory to such Lender; provided that at no time shall Parent, an Affiliate
of Parent or an Ineligible Institution be a Participant.



     “Payment Account” means each bank account established pursuant to Section 6.9,
to which the funds of the Loan Parties (including proceeds of Accounts and other Collateral) are
deposited or credited, and which is maintained in the name of an Agent or any Loan Party, or any of
them, as the Agents may determine, on terms acceptable to the Agents.



     “Pending Revolving Loans” means, at any time, the aggregate principal amount of all
Revolving Loans requested in any Notice of Borrowing received by the Administrative Agent



Loan And Security Agreement — Page 29





 










 






which have not yet been advanced.




     “Perfection Certificate” means a certificate substantially in the form of Exhibit G,
completed and supplemented with the schedules and attachments contemplated thereby.



     “Permitted Acquisition” means any acquisition of the Capital Stock of a Person or any
acquisition of property which constitutes a significant or material portion of an existing business
of a Person, in each case, in a transaction that satisfies each of the following requirements:



     (a) both before and after giving effect to such acquisition and the Revolving Loans (if any)
requested to be made in connection therewith, no Default or Event of Default exists or will exist
or would result therefrom;



     (b) if such acquisition is an acquisition of the Capital Stock of a Person, the acquisition is
structured so that the acquired Person shall become a Subsidiary of Parent (and shall become a Loan
Party pursuant to the terms of this Agreement); provided, however, that such
acquisition is not hostile, and if such acquisition is an acquisition of assets, the acquisition is
structured so that a Loan Party shall acquire such assets;



     (c) with respect to any acquisition whereby the total consideration paid in connection with
such acquisition (including any Indebtedness of the acquired entity that is assumed by a Loan Party
following such acquisition) exceeds $10,000,000, (i) the Fixed Charge Coverage Ratio, without
giving effect to such acquisition, shall be greater than or equal to 1.0 to 1.0 for the most
recently completed period of four (4) Fiscal Quarters, (ii) the Pro Forma Fixed Charge Coverage
Ratio, after giving effect to such acquisition, shall be greater than or equal to 1.00 to 1.00 and
(iii) Parent shall certify (and provide the Administrative Agent with a pro forma calculation in
form and substance reasonably satisfactory to the Administrative Agent) to the Administrative Agent
and the Lenders that, after giving effect to completion of such acquisition, the Availability is
not less than $75,000,000 on a pro forma basis after giving effect to such acquisition; and



     (d) such acquisition is of a business permitted under Section 9.17.



     “Permitted Cure Security” shall mean an equity security of Holdings or Parent having
no mandatory redemption, repurchase or similar requirements prior to 91 days after the Termination
Date, and upon which all dividends or distributions (if any) shall, prior to 91 days after the
Termination Date, be payable solely in additional shares of such equity security.



     “Permitted Holders” shall mean the Equity Investors and any Management Participants.



     “Permitted Liens” means:



     (a) the Collateral Agent’s Liens;



     (b) the Noteholder Liens;



     (c) Liens, if any, which are described on Schedule 1.1(A) on the Closing Date and
Liens resulting from the refinancing of the related Indebtedness with Permitted Refinancing



Loan
And Security Agreement — Page 30




 









 




Indebtedness, provided that such Liens shall secure only those obligations that they
secure on the Closing Date (and extensions, renewals and refinancings of such obligations thereof)
and shall not subsequently apply to any property or assets other than that to which Liens securing
the Indebtedness being refinanced would apply;




     (d) Liens for taxes, fees, assessments, or other charges of a Governmental Authority which are
(i) not delinquent (including statutory Liens for taxes not delinquent) or (ii) due and payable and
being contested in good faith and by appropriate proceedings and adequate financial reserves have
been established in accordance with GAAP on the appropriate Loan Party’s books and records;



     (e) (i) deposits and other Liens made in the ordinary course of business in compliance with
the Federal Employers Liability Act or any other workers’ compensation, unemployment insurance and
other social security laws or regulations and deposits securing liability to insurance carriers
under insurance or self-insurance arrangements in respect of such obligations and (ii) deposits and
other Liens securing liability for reimbursement or indemnification obligations of (including
obligations in respect of letters of credit or bank guarantees for the benefit of) insurance
carriers providing property, casualty or liability insurance to Parent or any Subsidiary, including
those incurred to secure health, safety and environmental obligations in the ordinary course of
business;



     (f) deposits and other Liens to secure the performance of bids, trade contracts (other than
for Indebtedness), leases (other than Capital Leases), statutory obligations, surety and appeal
bonds, performance and return of money bonds, bids, leases, government contracts, trade contracts,
agreements with public utilities, and other obligations of a like nature (including letters of
credit in lieu of any such bonds or to support the issuance thereof) incurred in the ordinary
course of business by Parent or any Subsidiary;



     (g) Liens securing the claims or demands of materialmen, mechanics, repairmen, carriers,
warehousemen, landlords, and other like Persons in the ordinary course of business (i) for amounts
not due or (ii) for amounts due that are being contested in good faith, and for which reserves have
been established for such claim in accordance with GAAP;



     (h) Liens constituting encumbrances in the nature of reservations, exceptions, encroachments,
easements, rights of way, covenants running with the land, and other similar title exceptions or
encumbrances affecting any Real Estate; provided such Liens do not in the aggregate
materially detract from the value of such Real Estate or materially interfere with its use in the
ordinary conduct of a Borrower’s business;



     (i) Liens arising from judgments and attachments in connection with court proceedings;
provided that the attachment or enforcement of such Liens would not result in an Event of
Default hereunder;



     (j) Liens (other than Liens on Inventory) securing purchase money Indebtedness (including
obligations under Capital Leases) permitted under Section 9.13(c);



     (k) Liens securing Indebtedness permitted pursuant to Section 9.13(e);



Loan And Security Agreement — Page 31




 









 





     (l) Liens arising from precautionary Uniform Commercial Code financing statement filings
regarding operating leases or consigned inventory filed against Parent or any of its Subsidiaries;



     (m) Deposits securing obligations in respect of Hedge Agreements permitted under clause (g) of
the definition of “Restricted Investments” in an amount not to exceed $7,500,000;



     (n) Liens disclosed by the title insurance policies delivered on or subsequent to the Closing
Date and pursuant to Section 9.27 and any replacement, extension or renewal of any such Lien;
provided that such replacement, extension or renewal Lien shall not cover any property other than
the property that was subject to such Lien prior to such replacement, extension or renewal;
provided, further, that the Indebtedness and other obligations secured by such replacement,
extension or renewal Lien are permitted by this Agreement;



     (o) any interest or title of a lessor under any leases or subleases entered into by Parent or
any Subsidiary in the ordinary course of business;



     (p) Liens that are contractual rights of set-off (i) relating to the establishment of
depository relations with banks not given in connection with the issuance of Indebtedness, (ii)
relating to pooled deposit or sweep accounts of Parent or any Subsidiary to permit satisfaction of
overdraft or similar obligations incurred in the ordinary course of business by Parent and the
Subsidiaries or (iii) relating to purchase orders and other agreements entered into with customers
of Parent or any Subsidiary in the ordinary course of business;



     (q) Liens arising solely by virtue of any statutory or common law provision relating to
banker’s liens, rights of set-off or similar rights;



     (r) Liens securing obligations permitted to be incurred hereunder in respect of letters of
credit; provided, that the Fair Market Value of all assets subject to such Liens at any
time does not exceed $10,000,000;



     (s) licenses of intellectual property and software granted in a manner consistent with past
practice;



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



     (u) Liens solely on any cash earnest money deposits made by Parent or any Subsidiary in
connection with any letter of intent or purchase agreement permitted hereunder;



     (v) Liens arising out of consignment or similar arrangements for the sale of goods in the
ordinary course of business;



     (w) Liens securing insurance premiums financing arrangements, provided that such Liens are
limited to the applicable unearned insurance premiums; and



     (x) other Liens securing obligations which do not exceed $10,000,000 at any time outstanding.



Loan And Security Agreement — Page 32




 









 




The designation of a Lien as a Permitted Lien shall not limit or restrict the ability of the Agents
to establish any Reserve relating thereto.




     “Permitted Refinancing Indebtedness” shall mean any Indebtedness issued in exchange
for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund
(collectively, to “Refinance”), the Indebtedness being Refinanced (or previous refinancing
thereof constituting Permitted Refinancing Indebtedness); provided that (a) the principal amount
(or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the
principal amount (or accreted value, if applicable) of the Indebtedness so Refinanced (plus unpaid
accrued interest and premium thereon and underwriting discounts, fees, commissions and expenses),
(b) the Weighted Average Life to Maturity of such Permitted Refinancing Indebtedness at the time
such Refinancing Indebtedness is incurred or issued is greater than or equal to the Weighted
Average Life to Maturity at such time of the Indebtedness being Refinanced, (c) if the Indebtedness
being Refinanced is subordinated in right of payment to the Obligations under the Loan Documents,
such Permitted Refinancing Indebtedness shall be subordinated in right of payment to such
Obligations on terms at least as favorable to the Lenders as those contained in the documentation
governing the Indebtedness being Refinanced, (d) no Permitted Refinancing Indebtedness shall have
obligors that are not Loan Parties, or greater Guarantees or security, than the Indebtedness being
Refinanced and (e) if the Indebtedness being Refinanced is secured by any Collateral (whether
senior to, equally and ratably with, or junior to, the Lenders or otherwise), such Permitted
Refinancing Indebtedness may be secured by such collateral on terms no less favorable to the
Secured Parties than those contained in the documentation governing the Indebtedness being
Refinanced.



     “Permitted Subordinated Debt” means (a) unsecured Indebtedness owing by a Loan Party
to a Loan Party, provided that such Indebtedness is subordinated to payment of the
Obligations on terms reasonably acceptable to the Administrative Agent, (b) other Indebtedness of
Holdings or a Loan Party which has maturities and terms, and which is subordinated to payment of
the Obligations on terms reasonably acceptable to the Administrative Agent, and in each such case
described in clause (a) and clause (b) preceding, any renewals, modifications, or
amendments thereof on terms reasonably acceptable to the Administrative Agent.



     “Person” means any individual, sole proprietorship, partnership, limited liability
company, joint venture, trust, unincorporated organization, association, corporation, Governmental
Authority, or any other entity.



     “Plan” means an employee benefit plan now or hereafter maintained for employees of any
Borrower or any ERISA Affiliate that is covered by Title IV of ERISA or subject to the minimum
funding standards of Section 412 of the Code.



     “Pledged Collateral” has the meaning specified in Section 6.16(b).



     “Prime Rate” means the rate of interest per annum determined from time to time by
Credit Suisse as its prime rate in effect at its principal office in New York City and notified to
Parent.



     “Pro Forma Fixed Charge Coverage Ratio” means the ratio, for any period, determined
according to the definition of Fixed Charge Coverage Ratio, provided, that each item
thereof



Loan And Security Agreement — Page 33




 









 




shall be calculated as of the end of such period on a pro forma basis for the next succeeding
(rather than the immediately preceding) four (4) Fiscal Quarters.




     “Prohibited Transaction” has the meaning set forth in Section 406 of ERISA or Section
4975 of the Code, except to the extent covered by a class or other exemption.



     “Projections” means those certain projections of Parent contained in the Confidential
Information Memorandum.



     “Pro Rata Share” means, with respect to a Lender, a fraction (expressed as a
percentage), the numerator of which is the amount of such Lender’s Commitment and the denominator
of which is the sum of the amounts of all of the Lenders’ Commitments, or if no Commitments are
outstanding, a fraction (expressed as a percentage), the numerator of which is the principal amount
of Obligations owed to such Lender and the denominator of which is the aggregate principal amount
of the Obligations owed to the Lenders, in each case giving effect to a Lender’s participation in
Swingline Loans and Agent Advances.



     “Proprietary Rights” means, with respect to a Person, all of such Person’s now owned
and hereafter arising or acquired licenses, franchises, permits, patents, patent rights,
copyrights, works which are the subject matter of copyrights, trademarks, service marks, trade
names, trade styles, patent, trademark and service mark applications, and all licenses and rights
related to any of the foregoing, including those registered patents and trademarks set forth on
Schedule 8.12, and all other rights under any of the foregoing, all extensions, renewals,
reissues, divisions, continuations, and continuations-in-part of any of the foregoing, and all
rights to sue for past, present, and future infringement of any of the foregoing.



     “Qualified Capital Stock” means, with respect to any Person, its Capital Stock
excluding Disqualified Stock.



     “Qualified Public Offering” shall mean the initial underwritten public offering of
common Capital Stock of Holdings pursuant to an effective registration statement filed with the
Securities and Exchange Commission in accordance with the Securities Act of 1933, as amended, that
results in at least $50,000,000 of net cash proceeds to Holdings.



     “Real Estate” means, with respect to any Person, all of such Person’s now or hereafter
owned or leased estates in real property, including, without limitation, all fees, leaseholds, and
future interests, together with all of such Person’s now and hereafter owned or leased interests in
the improvements thereon, the fixtures attached thereto, and the easements appurtenant thereto.



     “Reasonable Credit Judgment” means reasonable credit judgment in accordance with
customary business practices for comparable asset-based lending transactions and as it relates to
the establishment of Reserves or the adjustment or imposition of exclusionary criteria shall
require that, (x) such establishment, adjustment or imposition after the Closing Date be based on
the analysis of facts or events first occurring or first discovered by the Agents after the Closing
Date or are materially different from facts or events occurring or known to the Agents on the
Closing Date, (y) the contributing factors to the imposition of any Reserve shall not duplicate (i)
the exclusionary criteria set forth in definitions of “Eligible Accounts” and “Eligible Inventory”,
as applicable (and vice versa) or (ii) any reserves deducted in computing book value and (z) the



Loan And Security Agreement — Page 34




 









 




amount of any such Reserve so established or the effect of any adjustment or imposition of
exclusionary criteria be a reasonable quantification of the incremental dilution of the Borrowing
Base attributable to such contributing factors.




     “Related Fund” means, with respect to any Lender that is a fund or commingled
investment vehicle that invests in bank loans, any other fund that invests in bank loans and is
managed or advised by the same investment advisor as such Lender or by an Affiliate of such
investment advisor.



     “Related Persons” means with respect to any specified Person, such Person’s
Affiliates, and the respective officers, directors, employees, agents, advisors, and
attorneys-in-fact of such Person and its Affiliates.



     “Release” means a release, spill, emission, leaking, pumping, injection, deposit,
disposal, discharge, dispersal, leaching, or migration of a Contaminant into the indoor or outdoor
environment or into or out of any Real Estate or other property, including the movement of
Contaminants through or in the air, soil, surface water, groundwater, or Real Estate or other
property.



     “Reportable Event” means any of the events set forth in Section 4043(c) of ERISA
(other than any events for which the requirement of notice within 30 days is waived by statute or
regulation).



     “Required Lenders” means, as of any date of determination, the Lenders whose Pro Rata
Shares aggregate more than sixty-six and two-thirds percent (66-2/3%).



     “Requirement of Law” means, as to any Person, any law (statutory or common), treaty,
rule, or regulation or determination of an arbitrator or of a Governmental Authority, in each case
applicable to or binding upon the Person or any of its property or to which the Person or any of
its property is subject.



     “Reserves” means such reserves against the Borrowing Base that the Agents have, in the
exercise of their Reasonable Credit Judgment, established from time to time upon at least five (5)
Business Days’ notice to Parent. The Agents acknowledge that as of the Closing Date, except with
respect to rent reserves contemplated by clause (b) or (i) of the definition of Eligible Inventory,
they do not know of any circumstance or condition with respect to the Accounts, Inventory or
Borrowing Base that would require the imposition of a Reserve which has not been imposed as of the
Closing Date.



     “Responsible Officer” means, with respect to Holdings or any Loan Party, the chief
executive officer, president, vice president, chief financial officer, chief accounting officer,
treasurer, or controller and, in each case preceding, any other officer having substantially the
same authority and responsibility.



Loan And Security Agreement — Page 35




 









 





     “Restricted Investment” means, with respect to Holdings or any of its Subsidiaries,
any acquisition by such Person of any Indebtedness, equity interests, or securities of another
Person in exchange for cash or other property (excluding Qualified Capital Stock of any direct or
indirect parent of Parent), whether in the form of an acquisition of stock, debt, or other
Indebtedness or obligation, or a loan, advance or capital contribution, except the following:



(a) current assets acquired in the ordinary course of business of such Person;




     (b) direct obligations of the United States, or any agency thereof, or obligations guaranteed
by the United States; provided that such obligations mature within one (1) year from the
date of acquisition thereof;



     (c) acquisitions of certificates of deposit maturing within one (1) year from the date of
acquisition, bankers’ acceptances, Eurodollar bank deposits, or overnight bank deposits, in each
case issued by, created by, or with a bank or trust company organized under the laws of the United
States or any state thereof having capital and surplus aggregating at least $100,000,000;



     (d) acquisitions of commercial paper given a rating of “A2” or better by S&P or “P2” or better
by Moody’s and maturing not more than ninety (90) days from the date of acquisition thereof;



     (e) investments in mutual funds substantially all of the assets of which are comprised of
securities of the types described in clauses (b), (c), and (d) preceding;



     (f) investments in so-called “auction rate” securities rated AAA or higher by S&P or AAA or
higher by Moody’s and which have a reset date not more than ninety (90) days from the date of
acquisition thereof;



     (g) Hedge Agreements entered into for the purpose of hedging or to mitigate risks to which
Holdings or any Subsidiary is exposed in the conduct of its business or the management of its
liabilities (including currency, interest rate and commodity pricing risks);



     (h) Permitted Acquisitions;



     (i) (x) investments by Holdings, any Borrower or any Subsidiary in the Capital Stock, or as a
contribution to the capital, of any Borrower or any Subsidiary; (y) intercompany loans from
Holdings, any Borrower or any Subsidiary to any Borrower or any Subsidiary; and (z) Guaranties by
Holdings, any Borrower or any Subsidiary of obligations otherwise expressly permitted hereunder of
Holdings, any Borrower or any Subsidiary; provided that the sum of (A) investments (valued
at the time of the making thereof and without giving effect to any write-downs or write-offs
thereof) after the Closing Date by the Loan Parties pursuant to clause (x) in Subsidiaries that are
not Loan Parties, plus (B) net intercompany loans after the Closing Date by Loan Parties to
Subsidiaries that are not Loan Parties pursuant to clause (y), plus (C) Guaranties of
Indebtedness by Loan Parties after the Closing Date of Subsidiaries that are not Loan Parties
pursuant to clause (z), shall not exceed $10,000,000 at any time outstanding; and provided
further that intercompany current liabilities incurred in the ordinary course of business
in connection with the cash management operations of the Borrower and the Subsidiaries shall not be
included in calculating the limitation in this paragraph at any time;



Loan And Security Agreement — Page 36




 









 





     (j) investments in existence on, or contractually committed as of, the Closing Date and listed
on Schedule 1.1(B), together with renewals and extensions thereof, so long as the principal
amount of such renewal or extension does not exceed the original principal amount of such
investment;



     (k) investments (including debt obligations and equity securities) received in connection with
the bankruptcy or reorganization of suppliers and customers and in settlement of delinquent
obligations of, and other disputes with, customers and suppliers;



     (l) investments in connection with the purchase, cancellation, or repayment of the Borrower’s
existing industrial development revenue bonds (at par or at a premium);



     (m) loans and advances by Holdings and its Subsidiaries to employees or consultants of
Holdings and its Subsidiaries in connection with relocations, purchases by such employees of
Capital Stock of Parent or any direct or indirect parent of Parent or options or similar rights to
purchase Capital Stock of Parent or any direct or indirect parent of Parent and other ordinary
course of business purposes (including travel and entertainment expenses) shall be permitted, so
long as the aggregate principal amount thereof at any time outstanding (determined without regard
to any write-downs or write-offs of such loans and advances) shall not exceed $5,000,000;



     (n) Holdings may acquire and hold obligations of one or more officers or other employees of
Holdings or its Subsidiaries in connection with such officers’ or employees’ acquisition of shares
of Capital Stock of Parent or any direct or indirect parent of Parent, so long as no cash is
actually advanced by Holdings or any of its Subsidiaries to such officers or employees in
connection with the acquisition of any such obligations;



     (o) Holdings and its Subsidiaries may receive and hold promissory notes and other non-cash
consideration received in connection with any asset sale permitted by Section 9.9;



     (p) Holdings and its Subsidiaries may make advances in the form of a prepayment of expenses,
so long as such expenses are being paid in accordance with customary trade terms of Holdings or
such Subsidiary;



     (q) investments by Holdings and its Subsidiaries, including loans to any direct or indirect
parent of Parent, if Holdings or any other Loan Party would otherwise be permitted to make a
Distribution in such amount (provided that the amount of such loan shall also be deemed to be a
distribution under the appropriate clause of Section 9.10 for all purposes of this
Agreement); and



     (r) additional investments by the Loan Parties having an aggregate Fair Market Value, taken
together with all other investments made pursuant to this clause (r), not to exceed at any time
outstanding the greater of (a) $40,000,000 and (b) 6.0% of Total Assets immediately prior to such
investment (with the Fair Market Value of each investment being measured at the time made and
without giving effect to subsequent changes in value).



     “Revolving Facility First Lien Collateral” has the meaning set forth in the
Intercreditor Agreement.



Loan And Security Agreement — Page 37




 









 





     “Revolving Loans” has the meaning specified in Section 2.2 and includes each
Tranche A Revolving Loan, Tranche A-1 Revolving Loan, Agent Advance and Swingline Loan.



     “Revolving Note” means a promissory note made by the Borrowers payable to the order of
a Lender evidencing the obligation of the Borrowers to pay the aggregate unpaid principal amount of
the Revolving Loans made to each of the Borrowers by such Lender (and any promissory note or notes
that may be issued from time to time in substitution, renewal, extension, replacement, or exchange
thereof whether payable to such Lender or to a different Lender in connection with a Person
becoming a Lender after the Closing Date or otherwise) substantially in the form of Exhibit
A-1 with respect to Tranche A Revolving Notes and Exhibit A-2 with respect to Tranche
A-1 Revolving Notes, with all of the blanks properly completed, either as originally executed or as
such promissory note may be renewed, extended, modified, amended, supplemented, or restated from
time to time.



     “S&P” shall mean Standard & Poor’s Ratings Service, or any successor thereto.



     “Secured Parties” means (a) the Lenders, (b) the Administrative Agent, (c) the
Collateral Agent, (d) any Letter of Credit Issuer, (e) with respect to Bank Products, each Bank,
Lender and their respective Affiliates, as applicable, (f) the beneficiaries of each
indemnification obligation undertaken by any Loan Party under any Loan Document and (g) the
successors and permitted assigns of each of the foregoing.



     “Security Documents” means the Copyright, Patent, and Trademark Agreements, the
Guaranty Agreements, the Intercreditor Agreement, the Mortgages, and each of the security
agreements, mortgages and other instruments and documents executed and delivered securing the whole
or any part of the Obligations or confirming the existence of the security interests.



     “Senior Liens” has the meaning set forth in the Intercreditor Agreement.



     “Senior Notes Collateral Agreement” means the Senior Notes Collateral Agreement dated
the date hereof among Holdings, Parent, Parent’s Subsidiaries party thereto, the Trustee and the
Noteholder Collateral Agent.



     “Senior Notes Security Documents” means the Senior Notes Collateral Agreement and the
other Noteholder Security Documents (as defined in the Intercreditor Agreement).



     “Senior Secured Indenture” means the Indenture dated as of November 30, 2005, pursuant
to which the Senior Secured Notes were issued, as amended, restated, supplemented or otherwise
modified from time to time in accordance with the requirements thereof and of this Agreement.



     “Senior Secured Notes” means the $275,000,000 aggregate principal amount of Parent’s
11-1/8% senior secured notes due 2015 issued pursuant to the Senior Secured Indenture.



     “Settlement” and “Settlement Date” have the meanings specified in Section
2.2(j)(i).



     “Solvent” means, with respect to any Person, as of any date, that on and as of such
date (both before and after effecting the transactions contemplated by this Agreement and making
any



Loan And Security Agreement — Page 38




 









 




Revolving Loans or issuing any Letter of Credit or taking any other actions permitted by this
Agreement proposed to be taken as of such date) (a) the sum of such Person’s debts is not greater
than all of such Person’s property, at a fair valuation, (b) the sum of such Person’s debts is not
greater than all of such Person’s assets, at a fair valuation, (c) such Person has sufficient
capital with which to conduct its business as such business is now conducted and is proposed to be
conducted, (d) such Person does not intend to incur, and does not believe that it will incur, debts
that are or would be beyond its ability to pay as such debts mature or become due, and (e) such
Person does not intend to hinder, delay, or defraud any creditor of such Person. For this purpose
“debts” includes anything included within the definition of “debt” as used in Section 548 of the
Bankruptcy Code or as defined or used by Section 270 of the New York Uniform Fraudulent Conveyance
Act, and “assets” has the meaning defined or used by Section 270 of the New York Uniform Fraudulent
Conveyance Act. Contingent, unliquidated, or disputed obligations or liabilities (if any) are
valued at the amount which, in light of all relevant facts and circumstances, is reasonably
expected to become absolute, liquidated, or mature.




     “Stated Termination Date” means November 30, 2011.



     “Subsidiary” means, with respect to any Person (the “subject Person”), any
corporation, association, partnership, limited liability company, joint venture, or other business
entity of which more than fifty percent (50.0%) of the voting stock or other equity interests (in
the case of Persons other than corporations), is owned or controlled directly or indirectly by the
subject Person, or one or more of the Subsidiaries of the subject Person, or a combination thereof.
Unless the context otherwise clearly requires, references herein to a “Subsidiary” refer to a
Subsidiary of Parent. Notwithstanding the foregoing (and except for the definition of Unrestricted
Subsidiary contained herein), an Unrestricted Subsidiary shall be deemed not to be a Subsidiary of
a Borrower or any of its Subsidiaries for purposes of this Agreement.



     “Swingline Lender” means Credit Suisse, acting through any of its Affiliates or
branches, in its capacity as lender of Swingline Loans hereunder.



     “Swingline Loan” has the meaning specified in Section 2.2(h).



     “Tangible Chattel Paper” means any “tangible chattel paper”, as such term is defined
in the UCC, now owned or hereafter acquired by any Person.



     “Tax Returns” means all returns and reports required to be filed with, or supplied to,
any federal, state, local or foreign tax authority with respect to Taxes.



     “Taxes” means any and all present or future taxes, levies, imposts, deductions,
charges, or withholdings, excluding, in the case of each Agent and each Lender Excluded Taxes and
Other Taxes.



     “Termination Date” means the earliest to occur of (a) the Stated Termination Date, (b)
the date the Total Facility is terminated either by the Borrowers pursuant to Section 4.2
or by the Majority Lenders pursuant to Section 11.3, and (c) the date this Agreement is
otherwise terminated for any reason whatsoever pursuant to the terms of this Agreement.



     “Total Assets” means the total consolidated assets of Parent and its Subsidiaries, as



Loan And Security Agreement — Page 39




 









 




shown on the most recent consolidated balance sheet of Parent.




     “Total Facility” has the meaning specified in Section 2.1.



     “Tranche A Commitment” means, at any time with respect to a Tranche A Lender, the
principal amount set forth beside such Tranche A Lender’s name under the heading “Tranche A
Commitment” on the signature pages of this Agreement or in the Assignment and Acceptance
pursuant to which such Tranche A Lender became a Tranche A Lender hereunder, or the most recent
Assignment and Acceptance to which such Tranche A Lender is a party, in accordance with the
provisions of Section 13.3, as the same may be reduced or increased or deemed incurred from
time to time pursuant to Section 4.2, and “Tranche A Commitments” means,
collectively, the aggregate amount of the Tranche A Commitments of all of the Tranche A Lenders.
Upon termination or reduction of the Tranche A-1 Commitments in accordance with Section
4.2, all Tranche A-1 Lenders shall be deemed to have increased their respective Tranche A
Commitments (or incurred a Tranche A Commitment) by an amount equal to the aggregate amount of the
Tranche A-1 Commitment so terminated or reduced, and each Tranche A-1 Lender shall be deemed to
have incurred a Tranche A Commitment in (or increased its then existing Tranche A Commitment, if
applicable, by) the amount of such termination or reduction in its Tranche A-1 Commitment. On the
Closing Date, the Tranche A Commitments equal $415,000,000.



     “Tranche A Lender” means a Lender that holds a Tranche A Commitment or a Tranche A
Revolving Loan and any other Person who becomes a “Tranche A Lender” in accordance with this
Agreement.



     “Tranche A Pro Rata Share” means, with respect to a Tranche A Lender, a fraction
(expressed as a percentage), the numerator of which is the amount of such Tranche A Lender’s
Tranche A Commitment and the denominator of which is the sum of the amounts of all of the Tranche A
Lenders’ Tranche A Commitments, or if no Tranche A Commitments are outstanding, a fraction
(expressed as a percentage), the numerator of which is the principal amount of Obligations owed to
such Tranche A Lender and the denominator of which is the aggregate principal amount of the
Obligations owed to the Tranche A Lenders, in each case giving effect to a Tranche A Lender’s
participation in Swingline Loans and Agent Advances.



     “Tranche A Revolving Loans” means the Revolving Loans made by Tranche A Lenders
pursuant to Section 2.2.



     “Tranche A-1 Commitment” means, at any time with respect to a Tranche A-1 Lender, the
principal amount set forth beside such Tranche A-1 Lender’s name under the heading “Tranche A-1
Commitment” on the signature pages of this Agreement or in the Assignment and Acceptance
pursuant to which such Tranche A-1 Lender became a Tranche A-1 Lender hereunder, or the most recent
Assignment and Acceptance to which such Tranche A-1 Lender is a party, in accordance with the
provisions of Section 13.3, as the same may be reduced from time to time pursuant to
Section 4.2 and “Tranche A-1 Commitments” means, collectively, the aggregate amount of the
Tranche A-1 Commitments of all of the Tranche A-1 Lenders. On the Closing Date, the Tranche A-1
Commitments equal $35,000,000.



Loan And Security Agreement — Page 40




 









 





     “Tranche A-1 Lender” means a Lender that holds a Tranche A-1 Commitment or a Tranche
A-1 Revolving Loan and any other Person who becomes a “Tranche A-1 Lender” in accordance with this
Agreement.



     “Tranche A-1 Pro Rata Share” means, with respect to a Tranche A-1 Lender, a fraction
(expressed as a percentage), the numerator of which is the amount of such Tranche A-1 Lender’s
Tranche A-1 Commitment and the denominator of which is the sum of the amounts of all of the Tranche
A-1 Lenders’ Tranche A-1 Commitments, or if no Tranche A-1 Commitments are outstanding, a fraction
(expressed as a percentage), the numerator of which is the principal amount of Obligations owed to
such Tranche A-1 Lender and the denominator of which is the aggregate principal amount of the
Obligations owed to the Tranche A-1 Lenders.



     “Tranche A-1 Revolving Loans” means the Revolving Loans made by Tranche A-1 Lenders
pursuant to Section 2.2.



     “Transactions” shall mean, collectively, (a) the execution, delivery and performance
by Holdings, Merger Sub and Parent of the Merger Agreement and the consummation of the transactions
contemplated thereby, (b) the execution, delivery and performance by the Loan Parties of the Loan
Documents to which they are a party and the making of the Borrowings hereunder, (c) the issuance by
Merger Sub and/or Parent of the Senior Secured Notes, (d) the repayment of all amounts due or
outstanding under, and the termination of, the Existing Credit Agreement, (e) the Equity
Contribution and (f) the payment of related fees and expenses.



     “Trustee” means Wells Fargo Bank, N.A., in its capacity as trustee under the Senior
Secured Indenture, and its successors and assigns in such capacity.



     “UCC” means the Uniform Commercial Code (or any successor statute), as in effect from
time to time, of the State of New York or of any other state the laws of which are required as a
result thereof to be applied in connection with the issue of perfection of security interests.



     “Unfunded Advances/Participations” shall mean (a) with respect to the Administrative
Agent, the aggregate amount, if any (i) made available to a Borrower on the assumption that each
Lender has made its portion of the applicable Borrowing available to the Administrative Agent as
contemplated by Section 2.2(g)(iii) hereof, and with respect to which a corresponding
amount shall not in fact have been made available to the Administrative Agent by any such Lender
and (ii) of participations in respect of any outstanding Agent Advances that shall not have been
funded by the Lenders in accordance with Section 2.2(j) hereof, (b) with respect to the
Swingline Lender, the aggregate amount, if any, of participations in respect of any outstanding
Swingline Loan that shall not have been funded by the Lenders in accordance with Section
2.22(j) hereof and (c) with respect to any Letter of Credit Issuer, the aggregate amount, if
any, of participations in respect of any outstanding Letters of Credit that shall not have been
funded by the Lenders in accordance with Sections 2.3(f) hereof.



     “United States” means the United States of America.



     “Unrestricted Subsidiary” shall mean (a) any Subsidiary that is not a domestic
Subsidiary, and (b) any domestic Subsidiary identified on Schedule 1.1(F) hereto and any
additional Subsidiary designated as such by Parent which, together with all other Unrestricted



Loan And Security Agreement — Page 41




 









 




Subsidiaries described in this clause (b), constitutes in the aggregate less than 5% of (i)
aggregate net trade sales on a trailing twelve months’ basis and (ii) aggregate book value of
assets of Borrowers and the Subsidiaries at such date of determination, provided that, at
any time an Unrestricted Subsidiary described in this clause (b) causes the aggregate sales and
assets test set forth above to no longer be satisfied, the Unrestricted Subsidiary or Unrestricted
Subsidiaries described in this clause (b), as applicable, that has either the highest sales or the
largest book value of assets of all such Unrestricted Subsidiaries at such time shall automatically
cease to constitute an Unrestricted Subsidiary and Borrowers shall promptly cause the appropriate
guaranties and Security Documents to be executed and delivered to the Collateral Agent (such that,
following such conversion of the Unrestricted Subsidiary to a Subsidiary, the remaining
Unrestricted Subsidiaries shall satisfy the definition hereof); provided that at no time
shall a Subsidiary that cannot satisfy the conditions in clause (b) be permitted to become an
Unrestricted Subsidiary.




     “Unused Letter of Credit Subfacility” means an amount equal to $100,000,000,
minus the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit,
plus (b) the aggregate unpaid reimbursement obligations with respect to all Letters of
Credit.



     “Unused Line Fee” has the meaning specified in Section 3.4.



     “USA PATRIOT Act” shall mean The Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub. L.
No. 107-56 (signed into law October 26, 2001)).



     “Weighted Average Life to Maturity” shall mean, when applied to any Indebtedness at
any date, the number of years obtained by dividing (i) the sum of the products obtained by
multiplying (x) the amount of each then remaining installment or other required scheduled payments
of principal, including payment at final maturity, in respect thereof, by (y) the number of years
(calculated to the nearest one-twelfth) that will elapse between such date and the making of such
payment by (ii) the then outstanding principal amount of such Indebtedness.



     “Wholly-Owned Subsidiary” when used to determine the relationship of a Subsidiary to a
Person, means a Subsidiary all of the issued and outstanding Capital Stock (other than directors’
qualifying shares) of which shall at the time be owned by such Person or one or more of such
Person’s Wholly-Owned Subsidiaries or by such Person and one or more of such Person’s Wholly-Owned
Subsidiaries.



          Section 1.2 Accounting Terms. Unless otherwise specified herein, all accounting terms
used herein shall be interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in accordance with GAAP
as in effect from time to time; provided that, if Parent notifies the Administrative Agent
that Parent wishes to amend any provision hereof, including, without limitation, any covenant in
Article IX, to eliminate the effect of any change in generally accepted accounting principles
adopted after the Closing Date on the operation of such provision (or if the Administrative Agent
notifies Parent that the Required Lenders wish to amend any such provision for such purpose), then
Parent’s compliance with such provision shall be determined on the basis of GAAP in effect
immediately before the relevant change in GAAP became




Loan And Security Agreement — Page 42




 









 




effective, until either such notice is withdrawn or such provision is amended in a manner
satisfactory to Parent and the Majority Lenders.





     Section 1.3 Interpretive Provisions.




     (a) The meanings of defined terms are equally applicable to the singular and plural
forms of the defined terms. Terms used herein that are defined in the UCC and are not
otherwise defined herein, shall have the meaning specified therefor in the UCC.




     (b) The words “hereof,” “herein,” “hereunder,” and similar words refer to this
Agreement as a whole and not to any particular provision of this Agreement. Section,
Schedule, and Exhibit references are to this Agreement unless otherwise specified. The term
“documents” includes any and all instruments, documents, agreements, certificates,
indentures, notices, and other writings, however evidenced. The term “including” is not
limiting and means “including, without limitation.” 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) Unless otherwise expressly provided herein, (i) references to agreements (including
this Agreement) and other contractual instruments shall be deemed to include all subsequent
amendments and other modifications thereto, but only to the extent such amendments and other
modifications are not prohibited by the terms of any Loan Document, and (ii) references to
any statute or regulation are to be construed as including all statutory and regulatory
provisions consolidating, amending, replacing, supplementing, or interpreting the statute or
regulation.




     (d) The captions and headings of this Agreement are for convenience of reference only
and shall not affect the interpretation of this Agreement.




     (e) This Agreement and the other Loan Documents may use several different limitations,
tests, or measurements to regulate the same or similar matters. All such limitations,
tests, and measurements are cumulative and shall each be performed in accordance with their
terms.




     (f) This Agreement and the other Loan Documents are the result of negotiations among
and have been reviewed by counsel to the Agents, the Lenders, and the Borrowers and are the
products of all parties. Accordingly, they shall not be construed against the Agents, the
Lenders, or the Borrowers merely because of the Agents’, the Lenders’, or the Borrowers’
involvement in their preparation.



ARTICLE 2




LOANS AND LETTERS OF CREDIT




          Section 2.1 Total Facility. Subject to all of the terms and conditions of this
Agreement, the Lenders severally agree to make available a total credit facility of $450,000,000
(the “Total Facility”) for use by any one or more of the Borrowers from time to time during
the




Loan And Security Agreement — Page 43




 









 




term of this Agreement. The Total Facility shall be composed of a revolving line of credit
consisting of Revolving Loans and Letters of Credit, as described in Section 2.2 and
Section 2.3.





     Section 2.2 Revolving Loans.




     (a) Amounts. Subject to the satisfaction of the conditions precedent set forth
in Article 10, each Lender severally, but not jointly, agrees, upon a Borrower’s
request from time to time on any Business Day during the period from the Closing Date to the
Termination Date, to make revolving loans (the “Revolving Loans”) to the Borrowers
in amounts not to exceed (except for the Swingline Lender with respect to Swingline Loans
and except for the Administrative Agent with respect to Agent Advances) such Lender’s Pro
Rata Share of the Borrowing Base. The Lenders, however, in their unanimous discretion, may
elect to make Revolving Loans or issue or arrange to have issued Letters of Credit in excess
of the Availability on one or more occasions, but if they do so, neither the Agents nor the
Lenders shall be deemed thereby to have changed the limits of the Borrowing Base or to be
obligated to exceed such limits on any other occasion. If the Aggregate Revolver
Outstandings exceed the Borrowing Base, the Lenders may refuse to make or otherwise restrict
the making of Revolving Loans and the issuance of Letters of Credit as the Lenders determine
until such excess has been eliminated, subject to the Administrative Agent’s authority, in
its sole discretion, to make Agent Advances pursuant to the terms of Section 2.2(i).




     (b) Procedure for Borrowing.




     (i) Each Borrowing shall be made upon a Borrower’s irrevocable written notice
delivered to the Administrative Agent in the form of a notice of borrowing in the
form attached hereto as Exhibit C (a “Notice of Borrowing”), which
must be received by the Administrative Agent prior to 12:00 noon (New York, New York
time) (y) three (3) Business Days prior to the requested Funding Date in the case of
a LIBOR Rate Revolving Loan and (z) on the requested Funding Date in the case of a
Base Rate Revolving Loan, specifying:




     (A) the amount of the Borrowing, which, if a LIBOR Rate Revolving Loan,
shall be in an amount that is not less than $5,000,000 or an integral
multiple of $1,000,000 in excess thereof and if a Base Rate Revolving Loan,
shall be in an amount that is not less than $100,000 or an integral multiple
of $100,000 in excess thereof;




     (B) the requested Funding Date, which shall be a Business Day;




     (C) whether the Revolving Loan requested is to be a Tranche A Revolving
Loan or a Tranche A-1 Revolving Loan, and whether it is to be a Base Rate
Revolving Loan or a LIBOR Rate Revolving Loan; provided that if such
Borrower fails to specify whether any Revolving Loan is to be a Tranche A
Revolving Loan or a Tranche A-1 Revolving Loan, then such Revolving Loan
shall be a Tranche A-1 Revolving Loan to the extent of the Tranche A-1
Commitments, and if such Borrower fails to specify



Loan And Security Agreement — Page 44




 









 






whether any Revolving Loan is to be Base Rate Revolving Loan or a LIBOR
Rate Revolving Loan, such request shall be deemed a request for a Base Rate
Revolving Loan;




     (D) the duration of the Interest Period if the requested Revolving Loan
is to be a LIBOR Rate Revolving Loan; provided that if the Borrower
fails to select the duration of the Interest Period with respect to any
requested LIBOR Rate Revolving Loan, the Borrower shall be deemed to have
requested such Revolving Loan be made as a LIBOR Rate Revolving Loan with an
Interest Period of one month in duration; and




     (E) the account (as acceptable to the Administrative Agent pursuant to
Section 2.2(c)) to which the proceeds of such Borrowing are to be
deposited, or wire transfer instructions satisfactory to the Administrative
Agent with respect to any Borrowing which is permitted to be funded directly
to any Person other than a Borrower.




With respect to any Borrowing to be made on the Closing Date, unless
otherwise agreed by the Administrative Agent and the Lenders, such Borrowing
will consist of Base Rate Revolving Loans.




     (ii) With respect to any request for Base Rate Revolving Loans, in lieu of
delivering the above-described Notice of Borrowing, a Borrower may give the
Administrative Agent telephonic notice of such request by the required time, with
such telephonic notice to be confirmed in writing no later than the Business Day
following the giving of such telephonic notice but the Administrative Agent at all
times shall be entitled to rely on such telephonic notice in making such Revolving
Loans, regardless of whether any such confirmation is received by the Administrative
Agent.




     (c) Disbursement; Reliance upon Authority. The Borrowers shall deliver to the
Administrative Agent, prior to the Closing Date, a writing setting forth the deposit account
to which the Administrative Agent is authorized by the Borrowers to transfer the proceeds of
the Revolving Loans requested pursuant to this Section 2.2, which deposit account
shall be reasonably acceptable to the Administrative Agent. The Administrative Agent shall
be entitled to rely conclusively on any individual’s request for Revolving Loans on behalf
of a Borrower, the proceeds of which are to be transferred to the deposit account specified
by the Borrowers pursuant to the immediately preceding sentence, until the Administrative
Agent receives written notice from the Borrowers that the proceeds of the Revolving Loans
are to be sent to a different deposit account. The Administrative Agent shall have no duty
to verify the identity of any individual representing himself or herself as a person
authorized by any Borrower to make such requests on its behalf.




     (d) No Liability. The Administrative Agent shall not incur any liability to
the Borrowers as a result of acting upon any notice referred to in Section 2.2(b)
and Section 2.2(c), which notice the Administrative Agent believes in good faith to
have been given by an officer or other person duly authorized by a Borrower to request
Revolving



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Loans on its behalf or for otherwise acting in good faith under this Section
2.2, and the crediting of Revolving Loans to a Borrower’s deposit account, or wire
transfer to such Person as a Borrower shall direct, shall conclusively establish the
obligation of the Borrowers to repay such Revolving Loans as provided herein.




     (e) Notice Irrevocable. Any Notice of Borrowing (or telephonic notice in lieu
thereof) made pursuant to Section 2.2(b) shall be irrevocable and such Borrower
shall be bound to borrow the funds requested therein in accordance therewith.




     (f) The Administrative Agent’s Election. Promptly after receipt of a Notice of
Borrowing (or telephonic notice in lieu thereof) pursuant to Section 2.2(b), the
Administrative Agent shall elect, in its discretion, (i) to have the terms of Section
2.2(g) apply to such requested Borrowing, or (ii) if the requested Revolving Loan is a
Base Rate Revolving Loan to request the Swingline Lender to make a Swingline Loan pursuant
to the terms of Section 2.2(h) in the amount of the requested Borrowing;
provided, however, that if the Swingline Lender declines in its sole
discretion to make a Swingline Loan pursuant to Section 2.2(h), the Administrative
Agent shall elect to have the terms of Section 2.2(g) apply to such requested
Borrowing.




     (g) Making of Revolving Loans.




     (i) In the event that the Administrative Agent shall elect to have the terms of
this Section 2.2(g) apply to a requested Borrowing as described in
Section 2.2(f) or otherwise, then promptly after receipt of a Notice of
Borrowing or telephonic notice pursuant to Section 2.2(b), the
Administrative Agent shall notify the Lenders by telecopy, telephone, or other
similar form of transmission, of the requested Borrowing. Each Lender shall make
the amount of such Lender’s Pro Rata Share of the requested Borrowing available in
immediately available funds, to such account as the Administrative Agent may
designate, not later than 1:00 p.m. (New York, New York time) on the Funding Date
applicable thereto. After the receipt of the proceeds of such requested Borrowing,
such proceeds will be made available to the applicable Borrower on the applicable
Funding Date by transferring same day funds equal to the proceeds to the deposit
account designated pursuant to Section 2.2(c) or disbursing such funds in
such other manner as the Borrower requesting such Borrowing may direct to the
Administrative Agent.




     (ii) Notwithstanding anything to the contrary herein contained, all Revolving
Loans to the Borrowers shall be Tranche A-1 Revolving Loans until the outstanding
principal amount of such Revolving Loans equals the lesser of the Incremental
Availability or the Maximum Tranche A-1 Revolver Amount. If any Tranche A-1
Revolving Loan is prepaid in part pursuant to Section 4.1, any Revolving
Loans thereafter requested shall be Tranche A-1 Revolving Loans until the maximum
principal amount of Tranche A-1 Revolving Loans outstanding equals the lesser of the
Incremental Availability or the Maximum Tranche A-1 Revolver Amount and thereafter
shall be Tranche A Revolving Loans. Further, subject to the provisions of Section
2.2(a), (A) the Aggregate Revolver



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Outstandings in respect of the Tranche A Commitments shall not exceed the
Borrowing Base (without regard to the Incremental Availability) at any time and (B)
the aggregate outstanding amount of Tranche A-1 Revolving Loans shall not exceed the
Incremental Availability at any time.




     (iii) Unless the Administrative Agent receives notice from a Lender on or prior
to the Closing Date or, with respect to any Borrowing after the Closing Date, at
least one Business Day prior to the date of such Borrowing, that such Lender will
not make available as and when required hereunder to the Administrative Agent for
the account of the Borrowers the amount of that Lender’s Pro Rata Share of such
Borrowing, the Administrative Agent may assume that each Lender has made such amount
available to the Administrative Agent in immediately available funds on the Funding
Date and the Administrative Agent may (but shall not be so required), in reliance
upon such assumption, make available to the Borrowers on such date a corresponding
amount. If and to the extent any Lender shall not have made its full amount
available to the Administrative Agent in immediately available funds and the
Administrative Agent in such circumstances has made available to the applicable
Borrower such amount, that Lender shall on the Business Day following such Funding
Date make such amount available to the Administrative Agent, together with interest
at the Federal Funds Rate for each day during such period. A notice by the
Administrative Agent submitted to any Lender with respect to amounts owing under
this clause (iii) shall be conclusive, absent manifest error. If such
amount is so made available, such payment to the Administrative Agent shall
constitute such Lender’s Revolving Loan for all purposes of this Agreement. If such
amount is not made available to the Administrative Agent on the Business Day
following the Funding Date, the Administrative Agent will notify the Borrowers of
such failure to fund and, upon demand by the Administrative Agent, the Borrowers
shall pay such amount to the Administrative Agent for the Administrative Agent’s
account, together with interest thereon for each day elapsed since the date of such
Borrowing, at a rate per annum equal to the Interest Rate applicable at the time to
the Revolving Loans comprising such Borrowing and such payment to the Administrative
Agent shall constitute a repayment of such Borrowing. The failure of any Lender to
make any Revolving Loan on any Funding Date (any such Lender, prior to the cure of
such failure, being hereinafter referred to as a “Defaulting Lender”) shall
not relieve any other Lender of any obligation hereunder to make a Revolving Loan on
any Funding Date, but no Lender shall be responsible for the failure of any other
Lender to make the Revolving Loan to be made by such other Lender on any Funding
Date.




     (iv) The Administrative Agent shall not be obligated to transfer to a
Defaulting Lender any payments made by any Borrower to the Administrative Agent for
the Defaulting Lender’s benefit, nor shall a Defaulting Lender be entitled to the
sharing of any payments hereunder. Amounts payable to a Defaulting Lender shall
instead be paid to or retained by the Administrative Agent. The Administrative
Agent may hold and, in its discretion, re-lend to any Borrower the amount of all
such payments received or retained by it for the



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account of such Defaulting Lender. Any amounts so re-lent to a Borrower shall
bear interest at the rate applicable to Base Rate Revolving Loans and for all other
purposes of this Agreement shall be treated as if they were Revolving Loans,
provided, however, that for purposes of voting or consenting to
matters with respect to the Loan Documents and determining Pro Rata Shares, such
Defaulting Lender shall be deemed not to be a “Lender”. Until a Defaulting Lender
cures its failure to fund its Pro Rata Share of any Borrowing (A) such Defaulting
Lender shall not be entitled to any portion of the Unused Line Fee and (B) the
Unused Line Fee shall accrue in favor of the Lenders which have funded their
respective Pro Rata Shares of such requested Borrowing and shall be allocated among
such performing Lenders ratably based upon their relative Commitments. This Section
shall remain effective with respect to such Lender until such time as the Defaulting
Lender shall no longer be in default of any of its obligations under this Agreement.
The terms of this Section shall not be construed to increase or otherwise affect
the Commitment of any Lender, or relieve or excuse the performance by any Borrower
of its duties and obligations hereunder.




     (v) At the Borrowers’ request, any Eligible Assignee reasonably acceptable to
the Administrative Agent and the Borrowers shall have the right (but not the
obligation) to purchase from any Defaulting Lender, and each Defaulting Lender
shall, upon such request, sell and assign to such Eligible Assignee, all of the
Defaulting Lender’s outstanding Commitments hereunder. Such sale shall be
consummated promptly after the Administrative Agent has arranged for a purchase by
an Eligible Assignee pursuant to an Assignment and Acceptance, and at a price equal
to the outstanding principal balance of the Defaulting Lender’s Revolving Loans,
plus accrued interest and fees, without premium or discount.




(h) Making of Swingline Loans.




     (i) In order to reduce the frequency of transfers of funds from Lenders to the
Administrative Agent for making Revolving Loans and subject to the terms and
conditions herein set forth, the Swingline Lender shall make a Tranche A Revolving
Loan upon the request by any Borrower (any such Tranche A Revolving Loan made solely
by the Swingline Lender pursuant to this Section 2.2(h) being referred to as
a “Swingline Loan” and such Tranche A Revolving Loans being referred to
collectively as “Swingline Loans”) available to the Borrowers on the Funding
Date applicable thereto by transferring same day funds to the deposit account of the
Borrowers, designated pursuant to Section 2.2(c). Each Swingline Loan shall
be subject to all the terms and conditions applicable to other Tranche A Revolving
Loans except that all payments thereon shall be payable to the Swingline Lender
solely for its own account (and for the account of the holder of any participation
interest with respect to such Tranche A Revolving Loan). The Administrative Agent
shall not request the Swingline Lender to make any Swingline Loan if (A) the
Administrative Agent shall have received written notice from any Lender that one or
more of the applicable conditions precedent set forth in Article 10 will not
be



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satisfied on the requested Funding Date for the applicable Borrowing, or (B)
the Administrative Agent has received notice that a Default exists under Section
9.26. The Administrative Agent shall not otherwise be required to determine
whether the applicable conditions precedent set forth in Article 10 have
been satisfied prior to making, in its sole discretion, any Swingline Loan. The
aggregate principal amount of Swingline Loans outstanding at any time shall not
exceed $15,000,000.




     (ii) The Swingline Loans shall be secured by the Collateral Agent’s Liens in
and to the Collateral, shall constitute Tranche A Revolving Loans and Obligations
hereunder, and shall bear interest at the rate applicable to the Base Rate Tranche A
Revolving Loans from time to time.




(i) Agent Advances.




     (i) Subject to the limitations set forth in the provisos contained in this
Section 2.2(i), the Administrative Agent is hereby authorized by the
Borrowers and the Lenders, from time to time in the Administrative Agent’s sole
discretion, (A) after the occurrence of a Default or an Event of Default, or (B) at
any time that any of the other applicable conditions precedent set forth in
Article 10 have not been satisfied, to make Base Rate Tranche A Revolving
Loans to any Borrower on behalf of the Lenders which the Administrative Agent, in
its reasonable business judgment, deems necessary or desirable (1) to preserve or
protect the Collateral, or any portion thereof, (2) to enhance the likelihood of, or
maximize the amount of, repayment of the Revolving Loans and other Obligations, or
(3) to pay any other amount chargeable to the Borrowers pursuant to the terms of
this Agreement, including costs, fees, and expenses as described in Section
15.7 (any of the advances described in this Section 2.2(i) being
hereinafter referred to as “Agent Advances”); provided that (x) the
Aggregate Revolver Outstandings in respect of the Tranche A Commitments after giving
effect to any Agent Advance shall not exceed the Maximum Tranche A Revolver Amount
and (y) Agent Advances outstanding and unpaid at no time will exceed $20,000,000 in
the aggregate, and provided further that the Required Lenders may at any
time revoke the Administrative Agent’s authorization contained in this Section
2.2(i) to make Agent Advances, any such revocation to be in writing and to
become effective prospectively upon the Administrative Agent’s receipt thereof;




     (ii) The Agent Advances shall be repayable on demand and secured by the
Collateral Agent’s Liens in and to the Collateral, shall constitute Tranche A
Revolving Loans and Obligations hereunder, and shall bear interest at the rate
applicable to Base Rate Tranche A Revolving Loans from time to time. The
Administrative Agent shall notify each Lender in writing of each Agent Advance;
provided that any delay or failure of the Administrative Agent in providing
any such notice to any Lender shall not result in any liability or constitute the
breach of any duty or obligation of the Administrative Agent hereunder.



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     (j) Settlement. Except as may be specifically provided otherwise by this
Section 2.2, it is agreed that each Lender’s funded portion of the Revolving Loans
is intended by the Lenders to be equal at all times to such Lender’s applicable Pro Rata
Share of the outstanding Revolving Loans of such Class. Notwithstanding such agreement, the
Agents, the Swingline Lender, and the Lenders agree (which agreement shall not be for the
benefit of or enforceable by the Borrowers) that in order to facilitate the administration
of this Agreement and the other Loan Documents, settlement among them as to the Revolving
Loans, including the Swingline Loans and the Agent Advances, shall take place on a periodic
basis in accordance with the following provisions:




     (i) The Administrative Agent shall request settlement (a “Settlement”)
with the Lenders on at least a weekly basis, or on a more frequent basis if so
determined by the Administrative Agent, (A) on behalf of the Swingline Lender, with
respect to each outstanding Swingline Loan, (B) for itself, with respect to each
Agent Advance, and (C) with respect to collections received, in each case, by
notifying the Lenders of such requested Settlement by telecopy, telephone, or other
similar form of transmission, of such requested Settlement, no later than 12:00 noon
(New York, New York time) on the date of such requested Settlement (the
“Settlement Date”). Each Tranche A Lender (other than the Swingline Lender,
in the case of Swingline Loans, and the Administrative Agent, in the case of Agent
Advances) shall make the amount of such Tranche A Lender’s Pro Rata Share of the
outstanding principal amount of the Swingline Loans and Agent Advances with respect
to which Settlement is requested available to the Administrative Agent, to such
account of the Administrative Agent as the Administrative Agent may designate, not
later than 3:00 p.m. (New York, New York time), on the Settlement Date applicable
thereto, which may occur before or after the occurrence or during the continuation
of a Default or an Event of Default and whether or not the applicable conditions
precedent set forth in Article 10 have then been satisfied. Such amounts
made available to the Administrative Agent shall be applied against the amounts of
the applicable Swingline Loan or Agent Advance and, together with the portion of
such Swingline Loan or Agent Advance representing the Swingline Lender’s Pro Rata
Share thereof, shall constitute Tranche A Revolving Loans of the Tranche A Lenders,
respectively. If any such amount is not made available to the Administrative Agent
by any Tranche A Lender on the Settlement Date applicable thereto, the
Administrative Agent shall, on behalf of the Swingline Lender with respect to each
outstanding Swingline Loan and for itself with respect to each Agent Advance, be
entitled to recover such amount on demand from such Tranche A Lender together with
interest thereon at the Federal Funds Rate for the first three (3) days from and
after the Settlement Date and thereafter at the Interest Rate then applicable to
Base Rate Tranche A Revolving Loans.




     (ii) Notwithstanding the foregoing, not more than one (1) Business Day after
demand is made by the Administrative Agent (whether before or after the occurrence
of a Default or an Event of Default and regardless of whether the Administrative
Agent has requested a Settlement with respect to a Swingline Loan or Agent Advance),
each Tranche A Lender (A) shall irrevocably and



Loan And Security Agreement — Page 50




 









 






unconditionally purchase and receive from the Swingline Lender or the
Administrative Agent, as applicable, without recourse or warranty, an undivided
interest and participation in such Swingline Loan or Agent Advance equal to such
Tranche A Lender’s Pro Rata Share of such Swingline Loan or Agent Advance and (B) if
Settlement has not previously occurred with respect to such Swingline Loans or Agent
Advances, upon demand by the Swingline Lender or the Administrative Agent, as
applicable, shall pay to the Swingline Lender or the Administrative Agent, as
applicable, as the purchase price of such participation an amount equal to
one-hundred percent (100%) of such Tranche A Lender’s Pro Rata Share of such
Swingline Loans or Agent Advances. If such amount is not in fact made available to
the Administrative Agent by any Lender, the Administrative Agent shall be entitled
to recover such amount on demand from such Lender together with interest thereon at
the Federal Funds Rate for the first three (3) days from and after such demand and
thereafter at the Interest Rate then applicable to Base Rate Tranche A Revolving
Loans.




     (iii) From and after the date, if any, on which any Lender purchases an
undivided interest and participation in any Swingline Loan or Agent Advance pursuant
to clause (ii) preceding, the Administrative Agent shall promptly distribute
to such Tranche A Lender such Tranche A Lender’s Pro Rata Share of all payments of
principal and interest and all proceeds of Collateral received by the Administrative
Agent in respect of such Swingline Loan or Agent Advance.




     (iv) Between Settlement Dates, to the extent no Agent Advances are outstanding,
the Administrative Agent may pay over to the Swingline Lender any payments received
by the Administrative Agent, which in accordance with the terms of this Agreement
would be applied to the reduction of the Tranche A Revolving Loans, for application
to the Swingline Lender’s Tranche A Revolving Loans including Swingline Loans. If,
as of any Settlement Date, collections received since the then immediately preceding
Settlement Date have been applied to the Swingline Lender’s Tranche A Revolving
Loans (other than to Swingline Loans or Agent Advances in which a Lender has not yet
funded its purchase of a participation pursuant to Section 2.2(j)(ii), as
provided for in the previous sentence), the Swingline Lender shall pay to the
Administrative Agent for the accounts of the Lenders, to be applied to the
outstanding Tranche A Revolving Loans of such Lenders, an amount such that each
Lender shall, upon receipt of such amount, have, as of such Settlement Date, its Pro
Rata Share of the Tranche A Revolving Loans. During the period between Settlement
Dates, the Swingline Lender with respect to Swingline Loans, the Administrative
Agent with respect to Agent Advances, and each Tranche A Lender with respect to the
Tranche A Revolving Loans other than Swingline Loans and Agent Advances, shall be
entitled to interest at the applicable rate or rates payable under this Agreement on
the actual average daily amount of funds employed by the Swingline Lender, the
Administrative Agent, and the Tranche A Lenders.




     (v) Unless the Administrative Agent has received written notice from a Lender
to the contrary, the Administrative Agent may assume that the



Loan And Security Agreement — Page 51




 









 






applicable conditions precedent set forth in Article 10 have been
satisfied and the requested Borrowing will not exceed Availability on any Funding
Date for a Revolving Loan or Swingline Loan.




     (k) Notation. The Administrative Agent shall record on its books the principal
amount of the Revolving Loans owing to each Lender, including the Swingline Loans owing to
the Swingline Lender and the Agent Advances owing to the Administrative Agent, from time to
time. In addition, each Lender is authorized, at such Lender’s option, to note the date and
amount of each payment or prepayment of principal of such Lender’s Revolving Loans in its
books and records, including computer records, such books and records constituting
presumptive evidence, absent manifest error, of the accuracy of the information contained
therein.




     (l) Lenders’ Failure to Perform. All Revolving Loans of a Class (other than
Swingline Loans and Agent Advances) shall be made by the Lenders simultaneously and in
accordance with their Pro Rata Shares of the applicable Class. It is understood that (i) no
Lender shall be responsible for any failure by any other Lender to perform its obligation to
make any Revolving Loans hereunder, nor shall any Commitment of any Lender be increased or
decreased as a result of any failure by any other Lender to perform its obligation to make
any Revolving Loans hereunder, (ii) no failure by any Lender to perform its obligation to
make any Revolving Loans hereunder shall excuse any other Lender from its obligation to make
any Revolving Loans hereunder, and (iii) the obligations of each Lender hereunder shall be
several, not joint and several.




     (m) Revolving Notes. If requested by any Lender, the Borrowers shall execute
and deliver to such Lender a Revolving Note to evidence such Lender’s Revolving Loans, in
the principal amount equal to the amount of such Lender’s Commitment with respect to the
Revolving Loans.




     Section 2.3 Letters of Credit.




     (a) Agreement to Issue or Cause To Issue. Subject to the terms and conditions
of this Agreement, and in reliance upon the representations and warranties of the Borrowers
herein set forth, each Letter of Credit Issuer agrees to issue for the account of any of the
Borrowers (whether one or more) one or more commercial/documentary and standby letters of
credit (each a “Letter of Credit” and collectively, the “Letters of Credit”)
in accordance with this Section 2.3 from time to time during the term of this
Agreement. Except as otherwise provided in Section 2.3(f), all Letters of Credit shall be
issued under the Tranche A Commitments.




     (b) Amounts; Outside Expiration Date. The Borrowers shall not have the right
to request any Letter of Credit at any time if: (i) the maximum face amount of the requested
Letter of Credit is greater than the Unused Letter of Credit Subfacility at such time or,
with respect to any IDRB Letter of Credit, issuance thereof would cause the aggregate
undrawn amount of all outstanding IDRB Letters of Credit to exceed $20,000,000; (ii) after
taking into account the maximum undrawn amount of the requested Letter of Credit
(provided that the requesting Borrower shall, to the



Loan And Security Agreement — Page 52




 









 




Administrative Agent’s satisfaction, have made provision for all commissions, fees, and
charges due from such Borrower in connection with the opening of the requested Letter of
Credit), such amount would exceed the Availability at such time; or (iii) such Letter of
Credit has an expiration date later than five (5) Business Days prior to the Stated
Termination Date or more than twelve (12) calendar months from the date of issuance for
standby letters of credit and six (6) calendar months from the date of issuance for
commercial or documentary letters of credit.





     (c) Other Conditions. In addition to being subject to the satisfaction of the
applicable conditions precedent contained in Article 10, the issuance of any Letter
of Credit is subject to the following conditions precedent having been satisfied in a manner
satisfactory to the Administrative Agent:




     (i) The Borrowers shall have delivered to the Letter of Credit Issuer, at such
times and in such manner as the Letter of Credit Issuer may prescribe, an
application in form and substance satisfactory to the Letter of Credit Issuer and
satisfactory to the Administrative Agent for the issuance of the Letter of Credit
and such other documents as may be required pursuant to the terms thereof, and the
form and terms of the proposed Letter of Credit shall be satisfactory to the
Administrative Agent and the Letter of Credit Issuer (provided that in the
event any term of such application or any other document is inconsistent with the
terms of this Agreement and the Letter of Credit Issuer and the Administrative Agent
are the same Person, then the terms of this Agreement shall be controlling); and




     (ii) As of the date of issuance, no order of any court, arbitrator, or
Governmental Authority shall purport by its terms to enjoin or restrain banks
generally from issuing letters of credit of the type and in the amount of the
proposed Letter of Credit, and no law, rule, or regulation applicable to banks
generally and no request or directive (whether or not having the force of law) from
any Governmental Authority with jurisdiction over banks generally shall prohibit, or
request that the Letter of Credit Issuer refrain from, the issuance of letters of
credit generally or the issuance of such proposed Letter of Credit.




(d) Issuance of Letters of Credit.




     (i) Request for Issuance. Any Borrower that wishes to cause the
issuance of a Letter of Credit shall give the Administrative Agent at least three
(3) Business Days prior written notice of the proposed date of issuance of such
Letter of Credit. Such notice shall be irrevocable and shall specify the original
amount of the Letter of Credit requested, the effective date (which date shall be a
Business Day) of issuance of such requested Letter of Credit, whether such Letter of
Credit may be drawn in a single or in partial draws, the date on which such
requested Letter of Credit is to expire (which date shall be a Business Day), the
purpose for which such Letter of Credit is to be issued, and the beneficiary of the
requested Letter of Credit, and in addition shall include as an attachment the
proposed form of any requested Letter of Credit.



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     (ii) Responsibilities of the Administrative Agent; Issuance. The
Administrative Agent shall determine, as of the Business Day immediately preceding
the requested effective date of issuance of the Letter of Credit set forth in the
notice from a Borrower pursuant to Section 2.3(d)(i), (A) the amount of the
Unused Letter of Credit Subfacility and (B) the Availability as of such date. If
the amount of the requested Letter of Credit is not greater than the Unused Letter
of Credit Subfacility, so long as the other conditions required by this Agreement
are met, the Letter of Credit Issuer shall issue the requested Letter of Credit on
such requested effective date of issuance.




     (iii) Notice of Issuance. On each Settlement Date, the Administrative
Agent shall give notice to each Lender of the issuance of all Letters of Credit
issued since the last Settlement Date.




     (iv) Extensions and Amendments. No Letter of Credit shall be extended
or amended unless the requirements of this Section 2.3 are met as though a
new Letter of Credit were being requested and issued. With respect to any Letter of
Credit which contains any “evergreen” or automatic renewal provision, each Lender
shall be deemed to have consented to any such extension or renewal unless any such
Lender shall have provided to the Administrative Agent, not less than thirty (30)
days prior to the last date on which the Letter of Credit Issuer can in accordance
with the terms of the applicable Letter of Credit decline to extend or renew such
Letter of Credit, written notice that it declines to consent to any such extension
or renewal; provided, that if all of the requirements of this Section
2.3 are met and no Default or Event of Default exists, no Lender shall decline
to consent to any such extension or renewal.




(e) Payments Pursuant to Letters of Credit.




     (i) Payment of Letter of Credit Obligations. The Borrower for whose
account any Letter of Credit is issued agrees to reimburse the Letter of Credit
Issuer for any draw under any such Letter of Credit, and to pay the Letter of Credit
Issuer the amount of all other obligations and other amounts payable to the Letter
of Credit Issuer under or in connection with any Letter of Credit when due,
irrespective of any claim, set-off, defense, or other right which such Borrower may
have at any time against the Letter of Credit Issuer or any other Person. If any
IDRB Letter of Credit is fully drawn, to the extent the Letter of Credit Issuer is
not subrogated to the rights of the trustee of the industrial development revenue
bonds with respect thereto, upon the request of the Agents the applicable Borrowers
(within thirty (30) days following such request after such drawing occurs to make
any IDRB Letter of Credit fully drawn and the trustee has released its liens in such
property) will grant to the Collateral Agent, as additional security for the
Obligations, a Lien on all of the real and personal property which secure the
industrial development revenue bond for which such IDRB Letter of Credit was issued.



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     (ii) Revolving Loans to Satisfy Reimbursement Obligations. Each
drawing under any Letter of Credit shall constitute a request by the applicable
Borrower to the Administrative Agent for a Borrowing of a Base Rate Revolving Loan
in the amount of such drawing. The Funding Date with respect to such Borrowing
shall be the date of such drawing. In the event that the Letter of Credit Issuer of
any Letter of Credit honors a draw under such Letter of Credit and the Borrower for
whose account such Letter of Credit was issued shall not have repaid such amount to
the Letter of Credit Issuer of such Letter of Credit pursuant to Section
2.3(e)(i), the Administrative Agent shall, upon receiving notice of such
failure, notify each Tranche A Lender of such failure, and each Tranche A Lender
shall unconditionally pay to the Administrative Agent, for the account of the Letter
of Credit Issuer or the Administrative Agent, as applicable, as and when provided
herein below, an amount equal to such Tranche A Lender’s Pro Rata Share of the
amount of such payment in Dollars and in same day funds. If the Administrative
Agent so notifies the Tranche A Lenders prior to 11:00 a.m. (New York, New York
time) on any Business Day, each Tranche A Lender shall make available to the
Administrative Agent the amount of such payment, as provided in the immediately
preceding sentence, on such Business Day. Such amounts paid by the Tranche A
Lenders to the Administrative Agent shall constitute Tranche A Revolving Loans which
shall be deemed to have been requested by such Borrower pursuant to Section
2.2 and made as provided by Section 4.5.




(f) Participations.




     (i) Purchase of Participations. Immediately upon issuance of any
Letter of Credit in accordance with Section 2.3(d), each Tranche A Lender
shall be deemed to have irrevocably and unconditionally purchased and received
without recourse or warranty, an undivided interest and participation equal to such
Tranche A Lender’s Pro Rata Share of the face amount of such Letter of Credit
(including all obligations of the Borrower for whose account such Letter of Credit
was issued and any security therefor or guaranty pertaining thereto).
Notwithstanding the foregoing, if any Letters of Credit are outstanding upon the
termination of the Commitments, to the extent the Maximum Tranche A-1 Revolver
Amount exceeds (immediately prior to such termination) the Tranche A-1 Revolving
Loans (the “Excess Amount”), upon such termination, the Tranche A Lenders
shall be deemed to have sold to each Tranche A-1 Lender, and each Tranche A-1 Lender
shall be deemed unconditionally and irrevocably to have so purchased from the
Tranche A Lenders, without recourse or warranty, an undivided interest and
participation in each outstanding Letter of Credit, to the extent of such Tranche
A-1 Lender’s Tranche A-1 Pro Rata Share in such Excess Amount.




     (ii) Sharing of Reimbursement Obligation Payments. Whenever the
Administrative Agent receives a payment from a Borrower on account of reimbursement
obligations in respect of a Letter of Credit as to which the Administrative Agent
has previously received for the account of the Letter of



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Credit Issuer thereof payment from a Lender pursuant to Section
2.3(e)(ii), the Administrative Agent shall promptly pay to such Lender such
Lender’s Pro Rata Share of such payment from such Borrower in Dollars. Each such
payment shall be made by the Administrative Agent on the Business Day on which the
Administrative Agent receives immediately available funds paid to such Person
pursuant to the immediately preceding sentence, if received prior to 3:00 p.m. (New
York, New York time) on such Business Day and otherwise on the next succeeding
Business Day.




     (iii) Documentation. Upon the request of any Lender, the
Administrative Agent shall furnish to such Lender copies of any Letter of Credit,
reimbursement agreement executed in connection therewith, application for any Letter
of Credit, and such other documentation as may reasonably be requested by such
Lender.




     (iv) Obligations Irrevocable. The obligation of each Lender to make
payments to the Administrative Agent, for the account of the Lenders, with respect
to any Letter of Credit and the obligation of the Borrowers to make payments to the
Administrative Agent, for the account of the Lenders, with respect to any Letter of
Credit shall be irrevocable, not subject to any qualification or exception
whatsoever, including any of the following circumstances:




     (A) any lack of validity or enforceability of this Agreement or any of
the other Loan Documents;




     (B) the existence of any claim, set-off, defense, or other right which
such Borrower may have at any time against a beneficiary named in a Letter
of Credit or any transferee of any Letter of Credit (or any Person for whom
any such transferee may be acting), any Lender, the Administrative Agent,
the Letter of Credit Issuer, or any other Person, whether in connection with
this Agreement, any Letter of Credit, the transactions contemplated herein,
or any unrelated transactions (including any underlying transactions between
such Borrower or any other Person and the beneficiary named in any Letter of
Credit);




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




     (D) the surrender or impairment of any security for the performance or
observance of any of the terms of any of the Loan Documents; or




     (E) the occurrence of any Default or Event of Default.




     (g) Recovery or Avoidance of Payments. In the event any payment by or on
behalf of any Borrower received by the Administrative Agent with respect to any Letter



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of Credit and distributed by the Administrative Agent to the Lenders on account of
their respective participations therein is thereafter set aside, avoided, or recovered from
the Administrative Agent in connection with any receivership, liquidation, or bankruptcy
proceeding, the Lenders shall, upon demand by the Administrative Agent, pay to the
Administrative Agent their respective Pro Rata Shares of such amount set aside, avoided, or
recovered, together with interest at the rate required to be paid by the Administrative
Agent upon the amount required to be repaid by it.




     (h) Exoneration; Power of Attorney.




     (i) Assumption of Risk by the Borrowers. As among the Borrowers, the
Lenders, and the Administrative Agent, the Borrowers assume all risks of the acts
and omissions of, or misuse of any of the Letters of Credit by, the respective
beneficiaries of such Letters of Credit. In furtherance and not in limitation of
the foregoing, the Lenders and the Administrative Agent acting in good faith shall
not be responsible for: (A) the form, validity, sufficiency, accuracy, genuineness,
or legal effect of any document submitted by any Person that appears on its face to
be in order in connection with the application for and issuance of and presentation
of drafts with respect to any of the Letters of Credit, even if it should prove to
be in any or all respects invalid, insufficient, inaccurate, fraudulent, or forged;
(B) the validity or sufficiency of any instrument that appears on its face to be in
order transferring or assigning or purporting to transfer or assign any Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in whole or in
part, which may prove to be invalid or ineffective for any reason; (C) the failure
of the beneficiary of any Letter of Credit to comply duly with conditions required
in order to draw upon such Letter of Credit; (D) errors, omissions, interruptions,
or delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex, or otherwise, whether or not they be in cipher; (E) errors in interpretation
of technical terms; (F) any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any Letter of Credit or of the
proceeds thereof; (G) the misapplication by the beneficiary of any Letter of Credit
of the proceeds of any drawing under such Letter of Credit; or (H) any consequences
arising from causes beyond the control of the Lenders or the Administrative Agent,
including any act or omission, whether rightful or wrongful, of any present or
future de jure or de facto Governmental Authority;
provided that, subject to any application for a Letter of Credit between the
applicable Borrower and the Letter of Credit Issuer, the applicable Borrower shall
retain any claim it may have, if any, against the Letter of Credit Issuer with
respect to any actual damages, but excluding any consequential damages, suffered by
such Borrower which were directly caused by the Letter of Credit Issuer’s willful
misconduct or gross negligence. None of the foregoing shall affect, impair, or
prevent the vesting of any rights or powers of the Administrative Agent or any
Lender under this Section 2.3(h).




     (ii) Exoneration. In furtherance and extension, and not in limitation,
of the specific provisions set forth above, any action taken or omitted by the
Administrative Agent or any Lender under or in connection with any of the



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Letters of Credit or any related certificates, in the absence of gross
negligence or willful misconduct, shall not put the Administrative Agent or any
Lender under any resulting liability to any Borrower or relieve any Borrower of any
of its obligations hereunder to any such Person.




     (iii) Indemnification by Lenders. The Tranche A Lenders (and, to the
extent of their participations, if any, pursuant to Section 2.3(f), the Tranche A-1
Lenders) agree to indemnify the Letter of Credit Issuer (to the extent not
reimbursed by the Borrowers and without limiting the obligations of the Borrowers
hereunder) ratably in accordance with their respective Pro Rata Shares, for any and
all liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including Attorney Costs), or disbursements of any kind and nature
whatsoever that may be imposed on, incurred by, or asserted against the Letter of
Credit Issuer in any way relating to or arising out of any Letter of Credit or the
transactions contemplated thereby or any action taken or omitted by the Letter of
Credit Issuer under any Letter of Credit or any Loan Document in connection
therewith; provided that no Lender shall be liable for any of the foregoing
to the extent it arises from the gross negligence or willful misconduct of the
Person to be indemnified. Without limitation of the foregoing, each Tranche A
Lender (and, to the extent aforesaid, each Tranche A-1 Lender) agrees to reimburse
the Letter of Credit Issuer promptly upon demand for its Pro Rata Share of any costs
or expenses payable by any Borrower to the Letter of Credit Issuer, to the extent
that the Letter of Credit Issuer is not promptly reimbursed for such costs and
expenses by a Borrower. The agreement contained in this Section shall survive
payment in full of all Obligations.




     (iv) Account Party. Each Borrower hereby authorizes and directs the
Letter of Credit Issuer to name any Borrower as the “Account Party” in each Letter
of Credit issued pursuant to this Agreement and to deliver to the Collateral Agent
all instruments, documents, and other writings and property received by the Letter
of Credit Issuer pursuant to each such Letter of Credit, and to accept and rely upon
the Collateral Agent’s instructions and agreements with respect to all matters
arising in connection with each such Letter of Credit or the application therefor.




     (i) Supporting Letter of Credit; Cash Collateral. If, notwithstanding the
provisions of Section 2.3(b) and Article XII any Letter of Credit is outstanding upon the
termination of this Agreement or after an Event of Default shall occur and be continuing,
then (i) upon such termination or (ii) upon the request of the Agents after an Event of
Default, the Borrower for whose account such Letter of Credit was issued shall deposit with
the Collateral Agent, for the ratable benefit of the Letter of Credit Issuer and the
Lenders, with respect to each such Letter of Credit then outstanding, as the Majority
Lenders in their discretion shall specify, either (x) a standby letter of credit (a
“Supporting Letter of Credit”) in form and substance satisfactory to the Agents,
issued by an issuer satisfactory to the Agents in an amount equal to the greatest amount for
which such Letter of Credit may be drawn plus any fees and expenses associated with such
Letter of Credit, under which Supporting Letter of Credit the Collateral Agent is entitled



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to draw amounts necessary to reimburse the Letter of Credit Issuer and the Lenders for
payments to be made by the Letter of Credit Issuer and the Lenders under such Letter of
Credit and any fees and expenses associated with such Letter of Credit, or (y) cash in
amounts necessary to reimburse the Letter of Credit Issuer and the Lenders for payments made
by the Letter of Credit Issuer or the Lenders under such Letter of Credit and any fees and
expenses associated with such Letter of Credit. Such Supporting Letter of Credit or deposit
of cash shall be held by the Collateral Agent, for the ratable benefit of the Letter of
Credit Issuer and the Lenders, as security for, and to provide for the payment of, the
aggregate undrawn amount of such Letters of Credit remaining outstanding.




     (j) Resignation or Removal of the Letter of Credit Issuer. A Letter of Credit
Issuer may resign at any time by giving 30 days’ prior written notice to the Agents, the
Lenders and the Borrowers, and may be removed at any time by the Borrowers by notice to such
Letter of Credit Issuer, the Agents and the Lenders. Upon the acceptance of any appointment
as such Letter of Credit Issuer hereunder by a Lender that shall agree to serve as a
successor Letter of Credit Issuer, such successor shall succeed to and become vested with
all the interests, rights and obligations of the retiring Letter of Credit Issuer. At the
time such removal or resignation shall become effective, the Borrowers shall pay all accrued
and unpaid fees owing to the retiring Letter of Credit Issuer in its capacity as such. The
acceptance of any appointment as a Letter of Credit Issuer hereunder by a successor Lender
shall be evidenced by an agreement entered into by such successor, in a form satisfactory to
the Borrowers and the Agents, and, from and after the effective date of such agreement, (i)
such successor Lender shall have all the rights and obligations of the previous Letter of
Credit Issuer under this Agreement and the other Loan Documents and (ii) references herein
and in the other Loan Documents to the term “Letter of Credit Issuer” shall be deemed to
refer to such successor or to any applicable previous Letter of Credit Issuer, or to such
successor and all applicable previous Letter of Credit Issuers, as the context shall
require. After the resignation or removal of a Letter of Credit Issuer hereunder, the
retiring Letter of Credit Issuer shall remain a party hereto and shall continue to have all
the rights and obligations of an Letter of Credit Issuer under this Agreement and the other
Loan Documents with respect to Letters of Credit issued by it prior to such resignation or
removal, but shall not be required to issue additional Letters of Credit.




     (k) Additional Letter of Credit Issuers. The Borrowers may, at any time and
from time to time with the consent of the Administrative Agent (which consent shall not be
unreasonably withheld or delayed) and such Lender, designate one or more additional Lenders
to act as an issuer of Letters of Credit under the terms of this Agreement. Any Lender
designated as an issuer of Letters of Credit pursuant to this paragraph (k) shall be deemed
to be a “Letter of Credit Issuer” (in addition to being a Lender) in respect of Letters of
Credit issued or to be issued by such Lender, and, with respect to such Letters of Credit,
such term shall thereafter apply to the other Letter of Credit Issuer and such Lender.



          Section 2.4 Bank Products. Any Borrower may request and either Bank or any other
Lender requested by the Borrower, or any of their respective Affiliates, may, in their sole and
absolute discretion, arrange for such Borrower to obtain from the Banks or, such Lender, or




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their respective Affiliates, Bank Products, although no Borrower is required to do so. To the
extent Bank Products are provided by an Affiliate of a Bank, or such Lender, each Borrower agrees
to indemnify and hold such Bank, and the Lenders harmless from any and all costs and obligations
now or hereafter incurred by such Bank, or any of the Lenders which arise from the indemnity given
by such Bank to its Affiliates related to such Bank Products. The agreement contained in this
Section shall survive termination of this Agreement. Each Borrower acknowledges and agrees that
the obtaining of Bank Products from a Bank, a Lender or their Affiliates (a) is in the sole and
absolute discretion of such Bank, such Lender and their respective Affiliates and (b) is subject to
all rules and regulations of such Bank, such Lender, and their respective Affiliates.




ARTICLE 3




INTEREST AND FEES





     Section 3.1 Interest.




     (a) Interest Rates. All outstanding Obligations shall bear interest on the
unpaid principal amount thereof (including, to the extent permitted by law, on accrued
interest thereon not paid when due) from the date made until paid in full in cash at a rate
determined by reference to the Base Rate or the LIBOR Rate, as applicable, and this
Section 3.1(a), but not to exceed the Maximum Rate. Any of the Revolving Loans may
be converted into, or continued as, Base Rate Revolving Loans or LIBOR Rate Revolving Loans,
subject to, and in the manner provided in, Section 3.2. If at any time Revolving
Loans are outstanding with respect to which notice has not been delivered to the
Administrative Agent in accordance with the terms of this Agreement specifying the basis for
determining the interest rate applicable thereto, then those Revolving Loans shall be Base
Rate Revolving Loans and shall bear interest at a rate determined by reference to the Base
Rate until notice to the contrary has been given to the Administrative Agent in accordance
with this Agreement and such notice has become effective. Except as otherwise provided
herein, the outstanding Obligations shall bear interest as follows:




     (i) for all Base Rate Revolving Loans and other Obligations (other than LIBOR
Rate Revolving Loans) at a fluctuating per annum rate equal to the lesser of (A) the
Base Rate plus the Applicable Margin or (B) the Maximum Rate; and




     (ii) for all LIBOR Rate Revolving Loans at a per annum rate equal to the lesser
of (A) the LIBOR Rate plus the Applicable Margin or (B) the Maximum Rate.




Each change in the Base Rate shall be reflected in the interest rate described in clause
(i) preceding as of the effective date of such change. Subject to Section 3.3,
all interest charges shall be computed on the basis of a year of 360 days and actual days
elapsed (which results in more interest being paid than if computed on the basis of a
365-day year), except that interest computed at the Base Rate (when the Base Rate is
determined



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by reference to the Prime Rate) shall be computed on the basis of a year of 365 or 366 days,
as applicable.




     (b) Default Rate. During the existence of any Default or Event of Default if
the Administrative Agent or the Majority Lenders in their discretion so elect, then, while
such Default or Event of Default exists, any past due Obligations shall bear interest at a
rate per annum equal to the lesser of (i) the Default Rate applicable thereto or (ii) the
Maximum Rate.




     (c) Interest Periods. After giving effect to any Borrowing, conversion, or
continuation of any LIBOR Rate Revolving Loan, there may not be more than twelve (12)
different Interest Periods in effect hereunder; provided that in its discretion the
Administrative Agent may agree to permit the Borrowers to maintain more than twelve (12)
different Interest Periods in effect hereunder.




Section 3.2 Conversion and Continuation Elections.




     (a) A Borrower may, upon irrevocable written notice to the Administrative Agent in
accordance with Section 3.2(b):




     (i) elect, as of any Business Day, in the case of Base Rate Revolving Loans to
convert any such Revolving Loans (or any part thereof in an amount not less than
$5,000,000, or that is in an integral multiple of $1,000,000 in excess thereof) into
LIBOR Rate Revolving Loans; or




     (ii) elect, as of the last day of the applicable Interest Period, to convert
any LIBOR Rate Revolving Loans having Interest Periods expiring on such day to Base
Rate Revolving Loans or to continue any LIBOR Rate Revolving Loans having Interest
Periods expiring on such day (or any part thereof in an amount not less than
$5,000,000, or that is in an integral multiple of $1,000,000 in excess thereof) as
LIBOR Rate Revolving Loans;




provided that if at any time the aggregate amount of LIBOR Rate Revolving Loans in
respect of any Borrowing is reduced, by payment, prepayment, or conversion of part thereof
to be less than $5,000,000, such LIBOR Rate Revolving Loans shall, effective as of the
expiration date of the applicable Interest Period, automatically convert into Base Rate
Revolving Loans.




     (b) The Borrowers shall deliver a notice of conversion/continuation in the form of
Exhibit D (a “Notice of Conversion/Continuation”) to be received by the
Administrative Agent not later than 12:00 noon (New York, New York time) at least three (3)
Business Days in advance of the Conversion/Continuation Date, if the Revolving Loans are to
be converted into or continued as LIBOR Rate Revolving Loans and specifying:




     (i) the proposed Conversion/Continuation Date;



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     (ii) the Revolving Loans and the aggregate amount of such Revolving Loans to be
converted or renewed;




     (iii) the type of Revolving Loans resulting from the proposed conversion or
continuation; and




     (iv) the duration of the requested Interest Period.




     (c) If upon the expiration of any Interest Period applicable to LIBOR Rate Revolving
Loans, the Borrowers have failed to timely select a new Interest Period to be applicable to
such LIBOR Rate Revolving Loans or if any Default or Event of Default then exists, the
Borrowers shall be deemed to have elected to convert such LIBOR Rate Revolving Loans into
Base Rate Revolving Loans effective as of the expiration date of such Interest Period.




     (d) The Administrative Agent will promptly notify each Lender of its receipt of a
Notice of Conversion/Continuation. All conversions and continuations shall be made ratably
according to the respective outstanding principal amounts of the Revolving Loans with
respect to which the Notice of Conversion/Continuation was given held by each Lender.




     (e) During the existence of a Default or Event of Default, the Borrowers may not elect
to have a Revolving Loan converted into or continued as a LIBOR Rate Revolving Loan.



          Section 3.3 Maximum Interest Rate. If the Interest Rate, absent the limitation set
forth in this Section 3.3, would have exceeded the Maximum Rate, then the Interest Rate
shall be the Maximum Rate, and, if in the future, the Interest Rate would otherwise be less than
the Maximum Rate, then the Interest Rate shall remain at the Maximum Rate until such time as the
amount of interest paid hereunder equals the amount of interest which would have been paid if the
same had not been limited by the Maximum Rate. In the event that, upon payment in full of the
Obligations, the total amount of interest paid or accrued under the terms of this Agreement is less
than the total amount of interest which would, but for this Section 3.3, have been paid or
accrued if the Interest Rate otherwise set forth in this Agreement had at all times been in effect,
then the Borrowers shall, to the extent permitted by applicable law, pay the Administrative Agent,
for the account of the Lenders, an amount equal to the excess of (a) the lesser of (i) the amount
of interest which would have been paid or accrued if the Maximum Rate had, at all times, been in
effect or (ii) the amount of interest which would have been paid or accrued had the interest rate
otherwise set forth in this Agreement, at all times, been in effect over (b) the amount of interest
actually paid or accrued under this Agreement. Each Agent, each Lender, and each Borrower
acknowledges, agrees, and declares that it is its intention to expressly comply with all
Requirements of Law in respect of limitations on the amount or rate of interest that can legally be
contracted for, charged, or received under or in connection with the Loan Documents.
Notwithstanding anything to the contrary contained in any Loan Document (even if any such provision
expressly declares that it controls all other provisions of the Loan Documents), in no contingency
or event whatsoever shall the amount of interest (including the aggregate of all charges, fees,
benefits, or other compensation which constitutes interest under any Requirement




Loan And Security Agreement — Page 62




 









 




of Law) under the Loan Documents paid by any Borrower, received by the Administrative Agent,
the Letter of Credit Issuer, or any Lender, agreed to be paid by any Borrower, or requested or
demanded to be paid by the Administrative Agent, the Letter of Credit Issuer, or any Lender, exceed
the Maximum Rate, and all provisions of the Loan Documents in respect of the contracting for,
charging, or receiving compensation for the use, forbearance, or detention of money shall be
limited as provided by this Section 3.3. In the event any such interest is paid to the
Administrative Agent, the Letter of Credit Issuer, or any Lender by the Borrowers, or any of them,
in an amount or at a rate which would exceed the Maximum Rate, the Administrative Agent, the Letter
of Credit Issuer, or such Lender, as the case may be, shall automatically apply such excess to any
unpaid amount of the Obligations other than interest, in inverse order of maturity, or if the
amount of such excess exceeds said unpaid amount, such excess shall be paid to the paying Borrowers
or Borrower, as applicable. All interest paid, or agreed to be paid, by any Borrower, or taken,
reserved, or received by the Administrative Agent, the Letter of Credit Issuer, or any Lender,
shall be amortized, prorated, spread, and allocated in respect of the Obligations throughout the
full term of this Agreement. Notwithstanding any provision contained in any of the Loan Documents,
or in any other related documents executed pursuant hereto, neither the Administrative Agent, the
Letter of Credit Issuer, nor any Lender shall ever be entitled to charge, receive, take, reserve,
collect, or apply as interest any amount which, together with all other interest under the Loan
Documents would result in a rate of interest under the Loan Documents in excess of the Maximum Rate
and, in the event the Administrative Agent, the Letter of Credit Issuer, or any Lender ever
charges, receives, takes, reserves, collects, or applies any amount in respect of the Borrowers, or
any of them, that otherwise would, together with all other interest under the Loan Documents, be in
excess of the Maximum Rate, such amount shall automatically be deemed to be applied in reduction of
the unpaid principal balance of the Obligations and, if such principal balance is paid in full, any
remaining excess shall forthwith be paid to the applicable Borrowers or Borrower. The Borrowers,
the Agents, the Letter of Credit Issuer, and the Lenders shall, to the maximum extent permitted
under any Requirement of Law, (A) characterize any non-principal payment as a standby fee,
commitment fee, prepayment charge, delinquency charge, expense, or reimbursement for a third-party
expense rather than as interest and (B) exclude prepayments, acceleration, and the effects thereof.
Nothing in any Loan Document shall be construed or so operate as to require or obligate the
Borrowers, or any of them, to pay any interest, fees, costs, or charges greater than is permitted
by any Requirement of Law. Subject to the foregoing, the Borrowers hereby agree that the actual
effective rate of interest from time to time existing under the Loan Documents, including all
amounts agreed to by the Borrowers or charged or received by the Administrative Agent, the Letter
of Credit Issuer, or the Lenders pursuant to and in accordance with the Loan Documents, which may
be deemed to be interest under any Requirement of Law, shall be deemed to be a rate which is agreed
to and stipulated by the Borrowers and the Lenders in accordance with Requirements of Law.




          Section 3.4 Unused Line Fee. Until the Revolving Loans have been paid in full and
this Agreement terminated, the Borrowers agree to pay, on the last Business Day of each Fiscal
Quarter and on the Termination Date, to the Administrative Agent, for the account of the Lenders of
each Class, in accordance with their respective Pro Rata Shares, an unused line fee (the
“Unused Line Fee”) equal to one-quarter of one percent (0.25%) multiplied by (i) as to the
Tranche A Lenders, the amount by which the Maximum Tranche A Revolver Amount exceeded the sum of
the average daily outstanding amount of the Tranche A Revolving Loans and the average daily undrawn
face amount of all outstanding Letters of Credit during such Fiscal




Loan And Security Agreement — Page 63




 









 




Quarter or shorter period if calculated on the Termination Date or on the first such date
following the Closing Date, and (ii) as to the Tranche A-1 Lenders, the amount by which the Maximum
Tranche A-1 Revolver Amount exceeded the average daily outstanding amount of the Tranche A-1
Revolving Loans during such Fiscal Quarter or shorter period if calculated on the Termination Date
or on the first such date following the Closing Date. Subject to Section 3.3, the Unused
Line Fee shall be computed on the basis of a 360-day year for the actual number of days elapsed.
For purposes of calculating the Unused Line Fee pursuant to this Section 3.4, (i) any
payment received by the Administrative Agent (if received prior to 3:00 p.m. New York, New York
time) shall be deemed to be credited to the Borrowers’ Loan Account on the date such payment is
received by the Administrative Agent and (ii) outstanding Swingline Loans shall be deemed not to
constitute Revolving Loans.




          Section 3.5 Letter of Credit Fee. The Borrowers agree to pay to the Administrative
Agent, for the account of the Tranche A Lenders (and, to the extent then participating in Letters
of Credit pursuant to Section 2.3(f), the Tranche A-1 Lenders), in accordance with their respective
Pro Rata Shares, for each Letter of Credit, a fee (the “Letter of Credit Fee”) equal to the
Letter of Credit Fee Percentage, or during the existence of any Default or Event of Default the
Default Rate with respect to Letters of Credit, multiplied by the undrawn face amount of each
Letter of Credit plus all out-of-pocket costs, fees, and expenses incurred by the Agents
and the Letter of Credit Issuer in connection with the application for, processing of, issuance of,
or amendment to any Letter of Credit. The Borrowers further agree to pay to each Letter of Credit
Issuer, with respect to each Letter of Credit issued by such Letter of Credit Issuer, a “fronting
fee” equal to one-eighth of one percent (0.125%) per annum of the daily aggregate amount of such
Letter of Credit outstanding during the preceding Fiscal Quarter. The Letter of Credit Fee and the
fronting fee shall be payable in arrears on the last day of each Fiscal Quarter and on the
Termination Date. Subject to Section 3.3, the Letter of Credit Fee and the fronting fee
shall be computed on the basis of a 360-day year for the actual number of days elapsed.




          Section 3.6 Other Fees. Holdings and the Borrowers agree to pay timely when due all
other fees and expenses of the Agents as provided for in this Agreement, including, without
limitation, the annual administration fee and the collateral agent fee, as set forth in the Fee
Letter, at the times and in the amount, specified therein.




ARTICLE 4




PAYMENTS AND PREPAYMENTS




          Section 4.1 Revolving Loans. The Borrowers shall repay the outstanding principal
balance of the Revolving Loans together with all other Obligations (other than contingent
indemnification and expense reimbursement obligations for which no claim has been made), including
all accrued but unpaid interest thereon, on the Termination Date. The Borrowers may prepay the
Revolving Loans at any time, and reborrow subject to the terms of this Agreement; provided,
however, that with respect to any LIBOR Rate Revolving Loans prepaid prior to the
expiration date of the Interest Period applicable thereto, the Borrowers shall pay to the
Administrative Agent, for the account of the Lenders, the amounts described in Section 5.4;
provided further that only after all Tranche A Revolving Loans have been repaid in




Loan And Security Agreement — Page 64




 









 




full may the Borrowers voluntarily prepay Tranche A-1 Revolving Loans (other than in
connection with a reduction in or termination of the Tranche A-1 Commitments pursuant to Section
4.2). In addition, and without limiting the generality of the foregoing, upon demand the Borrowers
shall pay to the Administrative Agent, for the account of the Lenders, (a) the amount, if any and
without duplication, by which the Aggregate Revolver Outstandings in respect of the Tranche A
Commitments (less the aggregate amount of Pending Revolving Loans in respect of the Tranche
A Commitments) exceeds the lesser of the Maximum Tranche A Revolver Amount and the Borrowing Base
(without regard to the Incremental Availability), and/or (b) the amount, if any and without
duplication, by which the aggregate outstanding amount of Tranche A-1 Revolving Loans exceeds the
lesser of the Maximum Tranche A-1 Revolver Amount and the Incremental Availability, in each case,
after giving effect to any reduction or increase, as applicable, to the applicable Commitments and
the repayment, or conversion, of Tranche A-1 Revolving Loans pursuant to Section 4.2. Accrued
interest on the Revolving Loans shall be due and payable in arrears (a) in the case of Base Rate
Revolving Loans, on the last Business Day of each Fiscal Quarter and on the Termination Date and
(b) in the case of LIBOR Rate Revolving Loans and with respect to each such Revolving Loan (i) on
each LIBOR Interest Payment Date with respect thereto and (ii) on the Termination Date.




          Section 4.2 Reduction of Commitments; Termination of Facility.





     (a) The Borrowers may reduce either the Maximum Tranche A Revolver Amount or the
Maximum Tranche A-1 Revolver Amount (and the corresponding Commitments) to an amount as may
be designated by the Borrowers at any time effective upon five (5) Business Days prior
written notice thereof to the Administrative Agent and the Lenders, provided that
(i) any such reduction that is a partial reduction shall be permanent and shall be in an
amount of at least $5,000,000 or any integral multiple of $1,000,000 in excess thereof,
shall not cause (A) the Maximum Tranche A Revolver Amount or the Borrowing Base (without
regard to the Incremental Availability) to be less than the Aggregate Revolver Outstandings
in respect of the Tranche A Commitments or (B) the Maximum Tranche A-1 Revolver Amount to be
less than the aggregate outstanding amount of Tranche A-1 Revolving Loans, in each case at
the time such reduction is to be effective, and after giving effect to any reduction or
increase, as applicable, to the applicable Commitments and repayment, or conversion, of
Tranche A-1 Revolving Loans pursuant to Section 4.2(b), and (ii) the Borrowers may not
voluntarily reduce the Maximum Tranche A-1 Revolver Amount if after giving effect thereto
Availability (without regard to the Incremental Availability) would be less than
$50,000,000. Notwithstanding the foregoing, on the date that is six months after the
Closing Date, the Maximum Tranche A-1 Revolver Amount (unless previously terminated or
reduced below $25,000,000) shall be permanently reduced to $25,000,000, and (unless such
loans are to remain outstanding as Tranche A Revolving Loans pursuant to Section
4.2(b)) the Borrowers shall prepay all then outstanding Tranche A-1 Revolving Loans
(together with accrued and unpaid interest) to the extent in excess of the Maximum Tranche
A-1 Revolver Amount as so reduced.




     (b) Upon any reduction or termination of the Maximum Tranche A-1 Revolver Amount
pursuant to this Section 4.2, unless all the Commitments are being terminated, then,
immediately upon such reduction or termination, (1) the aggregate



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Maximum Tranche A Revolver Amount (and the corresponding Commitments) shall
automatically be increased by the amount of the reduction to (or, in the case of a
termination, by the amount of (immediately prior to such termination)) the Maximum Tranche
A-1 Revolver Amount, with the amount of such increase being allocated to each Tranche A-1
Lender in accordance with its Tranche A-1 Pro Rata Share (prior to such reduction or
termination) and (2) the outstanding Tranche A-1 Revolving Loans shall automatically be
converted to Tranche A Revolving Loans. Upon any such reduction and corresponding increase,
the Administrative Agent may take such action as it reasonably deems necessary to ensure
that the outstanding Revolving Loans are held by the Lenders in accordance with their new
Pro Rata Shares, including requiring that outstanding LIBOR Rate Revolving Loans be
converted to or prepaid with the proceeds of Base Rate Revolving Loans, all subject to
Section 5.4 but otherwise without premium or penalty.




     (c) The Borrowers may terminate this Agreement upon at least five (5) days prior
written notice thereof to the Administrative Agent and the Lenders (which notice shall be
irrevocable; provided that if a notice is conditioned upon the effectiveness of
other credit facilities or any other incurrence or issuance of debt or equity, a sale of
assets by the Borrowers or a Change of Control transaction, such notice may be revoked by
the Borrowers (by notice to the Administrative Agent) if such credit facilities do not
become effective or such other transaction does not close), upon (i) the payment in full of
all outstanding Revolving Loans, together with accrued and unpaid interest thereon, and the
cancellation and return of all outstanding Letters of Credit (or, alternatively, with
respect to each such Letter of Credit, the furnishing to the Collateral Agent, for the
benefit of the Lenders, of a Supporting Letter of Credit or cash deposit, in each case in
amounts and in the manner required by Section 2.3(i)), (ii) with respect to any
LIBOR Rate Revolving Loans prepaid in connection with such termination prior to the
expiration date of the Interest Period applicable thereto, the payment of the amounts
described in Section 5.4, and (iii) the payment in full in cash of all other
Obligations (other than contingent indemnification and expense reimbursement obligations for
which no claim has been made) together with accrued and unpaid interest thereon.




     Section 4.3 [Reserved]




     Section 4.4 Payments by the Borrowers.




     (a) All payments to be made by the Borrowers shall be made without set-off, recoupment,
or counterclaim. Except as otherwise expressly provided herein, all payments by the
Borrowers shall be made to the Administrative Agent for the account of the Lenders at the
Administrative Agent’s address set forth in Section 15.8, and shall be made in
Dollars and in immediately available funds, no later than 3:00 p.m. (New York time) on the
date specified herein. Any payment received by the Administrative Agent later than 3:00
p.m. (New York, New York time) may be deemed, in the Administrative Agent’s sole discretion,
to have been received on the following Business Day and any applicable interest or fee shall
continue to accrue.




     (b) Subject to the provisions set forth in the definition of Interest Period, whenever
any payment is due on a day other than a Business Day, such payment shall be



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due on the following Business Day, and such extension of time shall in such case be
included in the computation of interest or fees, as the case may be.




     (c) Unless the Administrative Agent receives notice from the Borrowers prior to the
date on which any payment is due to the Lenders that the Borrowers will not make such
payment in full as and when required, the Administrative Agent may assume that the Borrowers
have made such payment in full to the Administrative Agent on such date in immediately
available funds and the Administrative Agent may (but shall not be so required), in reliance
upon such assumption, distribute to each Lender on such due date an amount equal to the
amount then due such Lender. If and to the extent the Borrowers have not made such payment
in full to the Administrative Agent, each Lender shall repay to the Administrative Agent on
demand such amount distributed to such Lender, together with interest thereon at the Federal
Funds Rate for each day from the date such amount is distributed to such Lender until the
date repaid.



          Section 4.5 Payments as Revolving Loans.





     (a) All payments of principal, interest, reimbursement obligations in connection with
Letters of Credit, fees, premiums, and other sums payable hereunder, including, without
limitation, all reimbursement for expenses pursuant to Section 15.7, may, at the
option of the Administrative Agent, in its sole discretion, subject only to the terms of
this Section 4.5, be paid from the proceeds of Revolving Loans made hereunder,
whether made following a request by the Borrowers, or any of them, pursuant to Section
2.2 or a deemed request as provided in this Section 4.5. Upon the occurrence
and during the continuance of an Event of Default, the Borrowers hereby irrevocably
authorize the Administrative Agent to charge the Loan Account for the purpose of paying
principal, interest, reimbursement obligations in connection with Letters of Credit, fees,
premiums, and other sums payable hereunder, including, without limitation, reimbursing
expenses pursuant to Section 15.7, and agree that all such amounts charged shall
constitute Revolving Loans (including Swingline Loans and Agent Advances) and that all such
Revolving Loans so made shall be deemed to have been requested pursuant to Section
2.2 (except Borrowers shall not be deemed to make any representation or warranty
pursuant to Section 10.2(a) with respect to such Revolving Loans).




     (b) Notwithstanding the provisions of paragraph (a) above, only after all Tranche A
Revolving Loans have been repaid in full may the Borrowers voluntarily prepay Tranche A-1
Revolving Loans; provided, however, that any such prepayment shall not
reduce or terminate the Maximum Tranche A-1 Revolver Amount. In addition, the Borrowers may
also repay the Tranche A-1 Revolving Loans in connection with any reduction or termination
of the Maximum Tranche A-1 Revolver Amount in accordance with the provisions of Section
4.2 hereof.



          Section 4.6 Apportionment, Application, and Reversal of Payments. Except as otherwise
expressly provided by this Agreement and the Intercreditor Agreement, aggregate principal and
interest payments shall be apportioned ratably among the Lenders of each Class (according to the
unpaid principal balance of the Revolving Loans to which such payments relate held by each Lender)
and payments of the fees shall, as applicable, be apportioned ratably among




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the Lenders. All payments shall be remitted to the Administrative Agent and all such payments
not relating to principal or interest of specific Revolving Loans, or not constituting payment of
specific fees, and all proceeds of any Borrower’s Accounts or any other Collateral received by the
Administrative Agent, shall be applied, ratably, subject to the provisions of this Agreement and
the Intercreditor Agreement, first, to pay any fees, indemnities, or expense
reimbursements, then due to the Agents from the Borrowers (other than in respect of Bank Products);
second, to pay any fees or expense reimbursements then due to the Tranche A Lenders from
the Borrowers (other than in respect of Bank Products); third, to pay interest due in
respect of the Tranche A Revolving Loans; fourth, to pay or prepay principal of the
Swingline Loans and the Agent Advances; fifth, to the payment in full of Unfunded
Advances/Participations; sixth, to pay or prepay principal of the Tranche A Revolving Loans
(other than Unfunded Advances/Participations, the Swingline Loans and the Agent Advances), and
unpaid reimbursement obligations in respect of Letters of Credit (other than Unfunded
Advances/Participations and other than those in which the Tranche A-1 Lenders participate);
seventh, to pay any fees or expense reimbursements then due to the Tranche A-1 Lenders from
the Borrowers; eighth, to pay interest due in respect of the Tranche A-1 Revolving Loans;
ninth, to pay or prepay principal of the Tranche A-1 Revolving Loans, and unpaid
reimbursement obligations in respect of Letters of Credit in which the Tranche A-1 Lenders
participate (other than Unfunded Advances/Participations); and tenth, to the payment of any
other Obligation due to an Agent or any Lender by the Borrowers (including in respect of Bank
Products). Notwithstanding anything to the contrary contained in this Agreement, unless so
directed by a Borrower, or unless an Event of Default is in existence, neither the Administrative
Agent nor any Lender shall apply any payment which it receives to any LIBOR Rate Revolving Loan
except (a) on the expiration date of the Interest Period applicable to any such LIBOR Rate
Revolving Loan, or (b) in the event, and only to the extent, that there are no outstanding Base
Rate Revolving Loans. The Administrative Agent shall promptly distribute to each Lender, pursuant
to the applicable wire transfer instructions received from each Lender in writing, such funds as it
may be entitled to receive, subject to a Settlement delay as provided for in Section
2.2(j). The Administrative Agent and the Lenders shall have the continuing and exclusive right
to apply and reverse and reapply any and all such proceeds and payments to any portion of the
Obligations.




          Section 4.7 Indemnity for Returned Payments. If after receipt of any payment which is
applied to the payment of all or any part of the Obligations, an Agent or any Lender is for any
reason compelled to surrender such payment or proceeds to any Person because such payment or
application of proceeds is invalidated, declared fraudulent, set aside, determined to be void or
voidable as a preference, impermissible set-off, or a diversion of trust funds, or for any other
reason, then the Obligations or part thereof intended to be satisfied shall be revived and
continued and this Agreement shall continue in full force as if such payment or proceeds had not
been received by such Agent or such Lender and the Borrowers shall be liable to pay to such Agent
and the Lenders, and each Borrower hereby indemnifies each Agent and the Lenders and holds the
Agents and the Lenders harmless for the amount of such payment or proceeds surrendered. The
provisions of this Section 4.7 shall be and remain effective notwithstanding any contrary
action which may have been taken by an Agent or any Lender in reliance upon such payment or
application of proceeds, and any such contrary action so taken shall be without prejudice to the
Agents’ and the Lenders’ rights under this Agreement and shall be deemed to have been conditioned
upon such payment or application of proceeds having become final and irrevocable. The provisions
of this Section 4.7 shall survive the termination of this Agreement.




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          Section 4.8 The Agents’ and the Lenders’ Books and Records; Monthly Statements. The
Borrowers agree that, each Agent’s and each Lender’s books and records showing the Obligations and
the transactions pursuant to this Agreement and the other Loan Documents shall be admissible in any
action or proceeding arising therefrom, and shall constitute presumptive proof thereof,
irrespective of whether any Obligation is also evidenced by a promissory note or other instrument.
The Administrative Agent will provide to the Borrowers a monthly statement of Revolving Loans,
payments, and other transactions pursuant to this Agreement. Such statement shall be deemed
correct, accurate, and binding on the Borrowers and an account stated (except for reversals and
reapplications of payments made as provided in Section 4.6 and corrections of errors
discovered by the Administrative Agent), unless a Borrower notifies the Administrative Agent in
writing to the contrary within thirty (30) days after such statement is rendered. In the event a
timely written notice of objections is given by a Borrower, only the items to which exception is
expressly made will be considered to be disputed.




ARTICLE 5




TAXES, YIELD PROTECTION, AND ILLEGALITY




          Section 5.1 Taxes.





     (a) Any and all payments by or on behalf of the Borrowers, or any of them, to an Agent
or any Lender under this Agreement and any other Loan Document shall be made free and clear
of, and without deduction or withholding for, any Taxes, except as required by law. In
addition, the Borrowers shall pay all Other Taxes.




     (b) The Borrowers agree to indemnify and hold harmless each Agent and each Lender for
the full amount of Taxes or Other Taxes (including any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section) paid by an Agent or any Lender and any
liability (including penalties, interest, additions to tax, and expenses) arising therefrom
or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally
asserted. Payment under this Section 5.1 shall be made within thirty (30) days
after the date an Agent or any Lender makes written demand therefor.




     (c) If the Borrowers shall be required by law to deduct or withhold any Taxes or Other
Taxes from or in respect of any sum payable hereunder to an Agent or any Lender, then:




     (i) the sum payable shall be increased as necessary so that after making all
required deductions and withholdings (including, without limitation, deductions and
withholdings applicable to additional sums payable under this Section) such Agent or
such Lender, as the case may be, receives an amount equal to the sum it would have
received had no such deductions or withholdings been made;




     (ii) the Borrowers shall make such deductions and withholdings; and



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     (iii) the Borrowers shall pay the full amount deducted or withheld to the
relevant taxing authority or other authority in accordance with any Requirement of
Law.




     (d) Within thirty (30) days after the date of any payment by the Borrowers of Taxes or
Other Taxes, the Borrowers shall deliver to the Administrative Agent the original or a
certified copy of a receipt evidencing payment thereof, or other evidence of payment
satisfactory to the Administrative Agent.




     (e) If the Borrowers are required to pay additional amounts to an Agent or any Lender
pursuant to Section 5.1(c), then the applicable Lender shall use reasonable efforts
(consistent with legal and regulatory restrictions) to change the jurisdiction of its
lending office so as to eliminate any such additional payment by the Borrowers which may
thereafter accrue, if such change in the judgment of such Lender is not otherwise
disadvantageous to such Lender.




     (f) For avoidance of doubt, any obligation of Borrower to deduct and withhold Excluded
Taxes from or in respect of any sum payable hereunder to an Agent or any Lender shall not be
subject to this Section 5.1.




     (g) If a Lender or an Agent during the term of this Agreement shall become aware that
it is entitled to claim a refund from a taxing authority in respect of Taxes or Other Taxes
as to which it has been indemnified by any of the Borrowers or with respect to which any of
the Borrowers have paid additional amounts pursuant to this Section 5.1, it promptly shall
notify the Borrowers of the availability of such refund claim and shall make a timely claim
to the appropriate taxing authority for such refund at the Borrower’s expense. If during
the term of this Agreement a Lender or an Agent receives a refund (including pursuant to a
claim for refund made pursuant to the preceding sentence) in respect of any Taxes or Other
Taxes as to which it has been indemnified by any of the Borrowers or with respect to which
any of the Borrowers has paid additional amounts pursuant to this Section 5.1, it shall
within thirty (30) days from the date of such receipt pay over the amount of such refund to
the Borrowers, net of all reasonable out-of-pocket expenses of such Lender or Agent;
provided, however, that the Borrowers, upon the request of such Lender or
Agent, agree to repay the amount paid over to the Borrowers to such Lender or Agent in the
event such Lender or Agent is required to repay such refund to such taxing authority. This
Section 5.1 shall not be construed to require an Agent or any Lender to make available its
Tax Returns (or any other information relating to its taxes which it deems confidential) to
the Borrowers or any other Person.



          Section 5.2 Illegality.





     (a) If any Lender determines that the introduction after the Closing Date of any
Requirement of Law, or any change after the Closing Date in any Requirement of Law, or after
the Closing Date any change in the interpretation or administration of any Requirement of
Law, has made it unlawful, or that any central bank or other Governmental Authority has
asserted that it is unlawful, for such Lender or its applicable lending office to make LIBOR
Rate Revolving Loans, then, on notice thereof by such



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     Lender to the Borrowers through the Administrative Agent, any obligation of such Lender
to make LIBOR Rate Revolving Loans or to convert a Base Rate Revolving Loan to a LIBOR Rate
Revolving Loan or to continue a LIBOR Rate Revolving Loan for an additional Interest Period
shall be suspended until such Lender notifies the Administrative Agent and the Borrowers
that the circumstances giving rise to such determination no longer exist.




     (b) If a Lender determines that it is unlawful to maintain any LIBOR Rate Revolving
Loan, the Borrowers shall, upon receipt of notice of such fact and demand from such Lender
(with a copy to the Administrative Agent), prepay in full such LIBOR Rate Revolving Loans of
such Lender then outstanding, together with accrued and unpaid interest thereon and amounts
required under Section 5.4, either on the last day of the Interest Period thereof,
if such Lender may lawfully continue to maintain such LIBOR Rate Revolving Loans to such
day, or immediately, if such Lender may not lawfully continue to maintain such LIBOR Rate
Revolving Loans. If the Borrowers are required to so prepay any LIBOR Rate Revolving Loans,
then concurrently with such prepayment, the Borrowers shall borrow from the affected Lender,
in the amount of such prepayment, a Base Rate Revolving Loan.



          Section 5.3 Increased Costs and Reduction of Return.





     (a) If any Lender determines that due to either (i) the introduction after the Closing
Date of or any change after the Closing Date in the interpretation of any law or regulation
or (ii) the compliance by that Lender with any new guideline or request after the Closing
Date from any central bank or other Governmental Authority (whether or not having the force
of law), there shall be any increase in the cost (other than with respect to Taxes and Other
Taxes already covered by Section 5.1(c) and Excluded Taxes) to such Lender of agreeing to
make or making, funding, or maintaining any LIBOR Rate Revolving Loans, then the Borrowers
shall be liable for, and shall from time to time, upon demand (with a copy of such demand to
be sent to the Administrative Agent), pay to the Administrative Agent, for the account of
such Lender, additional amounts as are sufficient to compensate such Lender for such
increased costs.




     (b) If any Lender shall have determined that (i) the introduction after the Closing
Date of any Capital Adequacy Regulation, (ii) any change after the Closing Date in any
Capital Adequacy Regulation, (iii) any change after the Closing Date in the interpretation
or administration of any Capital Adequacy Regulation by any central bank or other
Governmental Authority charged with the interpretation or administration thereof, or (iv)
compliance by such Lender or any corporation or other entity controlling such Lender with
any new Capital Adequacy Regulation after the Closing Date, affects or would affect the
amount of capital required or expected to be maintained by such Lender or any corporation or
other entity controlling such Lender and (taking into consideration such Lender’s or such
corporation’s or other entity’s policies with respect to capital adequacy and such Lender’s
desired return on capital) determines that the amount of such capital is increased as a
consequence of its Commitments, loans, credits, or obligations under this Agreement, then,
upon demand of such Lender to the Borrowers through the Administrative Agent, the Borrowers
shall pay to such Lender, from time to time as



Loan And Security Agreement — Page 71




 









 






specified by such Lender, additional amounts sufficient to compensate such Lender for
such increase.



          Section 5.4 Funding Losses. The Borrowers shall reimburse each Lender and hold each
Lender harmless from any loss or expense which such Lender may sustain or incur as a consequence
of:





     (a) the failure of the Borrowers to make on a timely basis any payment of principal of
any LIBOR Rate Revolving Loan;




     (b) the failure of the Borrowers to borrow, continue, or convert a Revolving Loan after
any Borrower has given (or is deemed to have given) a Notice of Borrowing or a Notice of
Conversion/Continuation (except as permitted by Section 5.5);




     (c) the prepayment or other payment (including after acceleration thereof) of any LIBOR
Rate Revolving Loan on a day that is not the last day of the relevant Interest Period;


including any such loss of anticipated profit and any loss or expense arising from the liquidation
or reemployment of funds obtained by such Lender to maintain its LIBOR Rate Revolving Loans or from
fees payable to terminate the deposits from which such funds were obtained. The Borrowers shall
also pay any customary administrative fees charged by any Lender in connection with the foregoing.




          Section 5.5 Inability to Determine Rates. If the Administrative Agent determines that
for any reason adequate and reasonable means do not exist for determining the LIBOR Rate for any
requested Interest Period with respect to a proposed LIBOR Rate Revolving Loan, or that the LIBOR
Rate for any requested Interest Period with respect to a proposed LIBOR Rate Revolving Loan does
not adequately and fairly reflect the cost to the Lenders of funding such Revolving Loan, the
Administrative Agent will promptly so notify the Borrowers and each Lender. Thereafter, the
obligation of the Lenders to make or maintain LIBOR Rate Revolving Loans hereunder shall be
suspended until the Administrative Agent revokes such notice in writing. Upon receipt of a notice
pursuant to the first sentence of this Section, the Borrowers may revoke any Notice of Borrowing or
Notice of Conversion/Continuation then submitted by any of them. If the Borrowers do not revoke
any such Notice of Borrowing or Notice of Conversion/Continuation, the Lenders shall make, convert,
or continue the Revolving Loans, as proposed by the Borrowers, in the amount specified in the
applicable Notice of Borrowing or Notice of Conversion/Continuation submitted by the Borrowers, but
such Revolving Loans shall be made, converted, or continued as Base Rate Revolving Loans instead of
LIBOR Rate Revolving Loans.




          Section 5.6 Certificates of Lenders. Any Lender claiming reimbursement or
compensation under this Article 5 shall deliver to the Borrowers (with a copy to the
Administrative Agent) a certificate setting forth in reasonable detail the amount payable to such
Lender hereunder and such certificate shall be conclusive and binding on the Borrowers in the
absence of manifest error.




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          Section 5.7 Survival. The agreements and obligations of the Borrowers in this
Article 5 shall survive the payment of all other Obligations.




          Section 5.8 Claims Under Section 5.1 and Section 5.3. Each Lender shall notify the
Borrowers and the Administrative Agent of any event of which it has knowledge, occurring after the
date hereof, which will entitle such Lender to payment of any amount under Section 5.1 or
Section 5.3 and will designate a different lending office or file any certificate or
document reasonably requested by any Borrower or assign its rights and obligations hereunder to
another of its offices, branches or Affiliates, if the making of such designation, filing or
assignment would avoid the need for, or reduce the amount of, any such additional cost or reduced
amount and would not, in the judgment of such Lender be otherwise disadvantageous to it.




          Section 5.9 Replacement of Affected Lender. Within thirty (30) days after receipt by
the Borrowers of written notice and demand from any Lender for any payment under the terms of
Section 5.1 or Section 5.3 then, subject to this Section 5.9, the Borrowers
may, at their option, notify the Administrative Agent and such Lender (the “Affected
Lender”) of their intention to obtain, at the Borrowers’ sole expense, a replacement Lender
(“Replacement Lender”) to purchase the Affected Lender’s Loans and its obligations under
the Loan Documents. Subject to this Section 5.9, the Borrowers may, within thirty (30)
days following the delivery of such notice from the Borrowers, cause the Replacement Lender to
purchase (and the Affected Lender hereby agrees to sell and convey, and shall be deemed to sell and
convey without further action by such Affected Lender, to such Replacement Lender) the Loans and
other obligations of the Affected Lender and assume the Affected Lender’s Commitment and
obligations hereunder in accordance with the terms of an Assignment and Acceptance for cash in an
aggregate amount equal to the aggregate unpaid principal of the Loans held by such Affected Lender,
all unpaid interest and fees accrued thereon or with respect thereto, and, except as provided in
the immediately following sentence, all other Obligations (other than contingent indemnification
and expense reimbursement obligations for which no claim has been made) owed to such Affected
Lender, including amounts owed under Section 5.1 or Section 5.3. Notwithstanding
the foregoing, (a) the Borrowers shall continue to be obligated to pay to the Affected Lender in
full all amounts then demanded and due under Section 5.1 or Section 5.3 in
accordance with the terms of this Agreement, (b) neither the Administrative Agent nor any Lender
shall have any obligation to find a Replacement Lender, (c) the Replacement Lender must be
acceptable to the Administrative Agent in its reasonable discretion, and (d) neither Bank may be
replaced under this Section 5.9 without its consent.




ARTICLE 6




COLLATERAL





     Section 6.1 Grant of Security Interest.




     (a) As security for the Obligations, subject to the proviso in Section 6.1(b)
below, each Loan Party hereby grants to the Collateral Agent, for the benefit of the Secured
Parties, a continuing security interest in and lien on, all of the following property



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     and assets of such Loan Party, whether now owned or existing or hereafter acquired or
arising, regardless of where located:




     (i) all Accounts (including any credit enhancement therefor) and Intercompany
Obligations;




     (ii) all Chattel Paper;




     (iii) all Commercial Tort Claims;




     (iv) all contract rights, leases, letters of credit, letter-of-credit rights,
instruments, promissory notes, documents, and documents of title, in each case,
other than any Excluded Assets;




     (v) all Financial Assets;




     (vi) all Equipment other than Excluded Assets;




     (vii) all General Intangibles;




     (viii) all Investment Property;




     (ix) all Inventory;




     (x) all money, cash, cash equivalents, securities, and other property of any
kind of such Loan Party, in each case, other than any Excluded Assets;




     (xi) all of such Loan Party’s deposit accounts, credits, and balances with and
other claims against an Agent, any Lender, or any Affiliate of the foregoing, or any
other financial institution with which such Loan Party maintains deposits, including
any Payment Accounts, in each case, other than (i) any such amounts held as security
for any IDRB Letter of Credit by any financial institution, and (ii) any Excluded
Assets comprised of identifiable cash proceeds of any other Excluded Asset as a
balance in any deposit account(s);




     (xii) all of such Loan Party’s books, records, and other property related to or
referring to any of the foregoing, including books, records, account ledgers, data
processing records, computer software and other property, and General Intangibles at
any time evidencing or relating to any of the foregoing, in each case, other than
any Excluded Assets;




     (xiii) all supporting obligations in respect of any Collateral; and




     (xiv) all accessions to, substitutions for, and replacements, products, and
proceeds of any of the foregoing, including, but not limited to, proceeds of any
insurance policies, claims against third parties, and condemnation or requisition
payments with respect to all or any of the foregoing, in each case, other than any
Excluded Assets.



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All of the foregoing, and all other property of the Loan Parties’ in which Secured Party may
at any time be granted a Lien to secure the Obligations, is herein collectively referred to
as the “Collateral.” Notwithstanding the foregoing, Collateral shall not include,
and the lien granted under this Section 6.1 shall not extend to, Excluded Assets.





     (b) The Obligations shall be secured by all of the Collateral; provided that,
notwithstanding the foregoing or anything in this Agreement to the contrary, IDRB Letters of
Credit shall not be secured by any General Intangibles or Investment Property in the form of
Subsidiary stock or other securities, and the Collateral Agent and the Lenders shall have no
right hereunder to foreclose upon any such General Intangibles or Investment Property or
otherwise exercise any remedies with respect thereto with respect to any Obligations arising
from or in connection with IDRB Letters of Credit. Each Loan Party acknowledges and
expressly agrees with the Collateral Agent and each Lender that the grant by such Loan Party
of the Collateral Agent’s Lien in the Collateral of such Loan Party as security for the
Obligations of the other Loan Parties is required solely as a condition to, and is given
solely as inducement for and in consideration of, credit or accommodations extended or to be
extended under the Loan Documents to any or all of the other Loan Parties and is not
required or given as a condition of extensions of credit to such Loan Party.



          Section 6.2 Perfection and Protection of Security Interest.





     (a) Each Loan Party shall, at its expense, perform all steps reasonably requested by
the Collateral Agent at any time to perfect, maintain, protect, and enforce the Collateral
Agent’s Liens, subject to the terms of the Intercreditor Agreement, including: (i)
executing, delivering, and/or filing and recording of the Copyright, Patent, and Trademark
Agreements, and executing and filing financing or continuation statements, and amendments
thereof, in form and substance satisfactory to the Collateral Agent; (ii) to the extent
constituting Revolving Facility First Lien Collateral, delivering to the Collateral Agent
the originals of all instruments, documents, and Chattel Paper (in each case in excess of
$250,000), and all other Collateral of which the Collateral Agent reasonably determines it
should have physical possession in order to perfect and protect the Collateral Agent’s
security interest therein, duly pledged, endorsed, or assigned to the Collateral Agent as
provided herein; (iii) upon the occurrence and during the continuation of an Event of
Default, delivering to the Collateral Agent upon request (A) warehouse receipts covering any
portion of the Collateral located in warehouses and for which warehouse receipts are issued
and (B) if requested by the Collateral Agent, certificates of title reflecting the
Collateral Agent’s Liens covering any portion of the Collateral for which certificates of
title have been issued; (iv) when an Event of Default exists, transferring Inventory to
warehouses or other locations designated by the Collateral Agent; (v) upon the occurrence
and during the continuance of an Event of Default, delivering to the Collateral Agent all
letters of credit constituting Collateral on which such Loan Party is named beneficiary; and
(vi) taking such other steps as are reasonably deemed necessary or desirable by the
Collateral Agent to maintain and protect the Collateral Agent’s Liens. To the extent
permitted by any Requirement of Law and the Intercreditor Agreement, the Collateral Agent
may file, without any Loan Party’s signature, one or more financing statements disclosing
the Collateral Agent’s Liens.



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     (b) If any Collateral constituting Inventory with a Fair Market Value in excess of
$250,000 is at any time in the possession or control of any warehouseman, bailee, or any of
such Loan Party’s agents or processors (other than (1) any Persons that have previously
executed a bailee letter or landlord waiver for the benefit of the Collateral Agent or (2)
the Noteholder Collateral Agent), then such Loan Party shall notify the Collateral Agent
thereof (including by delivery of the Perfection Certificate on the date hereof) and shall,
at the request of the Collateral Agent, notify such Person of the Collateral Agent’s
security interest in such Collateral and instruct such Person to hold all such Collateral
for the Collateral Agent’s account subject to the Collateral Agent’s instructions and
subject to the Intercreditor Agreement. If at any time any Collateral with a Fair Market
Value in excess of $250,000 is located at any operating facility of a Loan Party which is
not owned by such Loan Party, such Loan Party, at the request of the Collateral Agent, shall
use commercially reasonable efforts to obtain written landlord lien waivers or
subordinations, in form and substance reasonably satisfactory to the Agents, of all present
and future Liens to which the owner or lessor of such premises may be entitled to assert
against the Collateral; provided that in the event any Loan Party is unable to
obtain any such written waiver or subordination, the Agents may, in the exercise of
Reasonable Credit Judgment, establish a Reserve with respect to any such Collateral that is
Eligible Inventory in an amount not to exceed the amount permitted under clause (b) or (i)
of the definition of Eligible Inventory.




     (c) From time to time, subject to the Intercreditor Agreement, each Loan Party shall,
upon the Collateral Agent’s request, execute and deliver confirmatory written instruments
pledging to the Collateral Agent, for the benefit of the Secured Parties, the Collateral
with respect to such Loan Party, but the failure to do so shall not affect or limit any
security interest or any other rights of the Secured Parties in and to the Collateral with
respect to such Loan Party. So long as this Agreement is in effect and until all
Obligations (other than contingent indemnification and expense reimbursement obligations for
which no claim has been made) have been fully satisfied, the Collateral Agent’s Liens shall
continue in full force and effect in all Collateral (whether or not deemed eligible for the
purpose of calculating the Availability or as the basis for any advance, loan, extension of
credit, or other financial accommodation).




     (d) To the extent any Loan Party is the owner of any Investment Property that is
Collateral (each such Person which issues any such Investment Property being referred to
herein as an “Issuer”) with a Fair Market Value in excess of $250,000, each Loan
Party which is the owner of any such Investment Property agrees that, at the request of the
Agents, subject to the Intercreditor Agreement, it will use its commercially reasonable
efforts to cause the Issuer thereof to agree, as follows with respect to such Investment
Property:




     (i) All such Investment Property issued by such Issuer, all warrants, and all
non-cash dividends and other non-cash distributions in respect thereof at any time
registered in the name of, or otherwise deliverable to, any Loan Party, shall be
delivered directly to the Collateral Agent (or to the Noteholder Collateral Agent
under the Intercreditor Agreement), for the account of such Loan Party.



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     (ii) If such Investment Property shall constitute Revolving Facility First Lien
Collateral, then during the existence of any Event of Default, upon notice by the
Agents, all cash dividends, cash distributions, and other cash or cash equivalents
in respect of such Investment Property at any time payable or deliverable to any
Loan Party shall be delivered directly to the Collateral Agent, for the account of
the Secured Parties, at the Collateral Agent’s address for notices set forth in
Section 15.8.




     (iii) If such Investment Property shall constitute Revolving Facility First
Lien Collateral, then with respect to any of such Investment Property at any time
constituting an uncertificated security as defined by the UCC, such Issuer will
comply with instructions originated by the Collateral Agent without further consent
by the registered owner thereof.



          Section 6.3 Location of Collateral. Each Loan Party represents and warrants to the
Secured Parties that as of the Closing Date: (a) Schedule 6.3 is a correct and complete
list of such Loan Party’s jurisdiction of organization, the location of its books and records, the
locations of the Collateral (other than Inventory being toll processed or that is in transit,
rolling stock, and Collateral in the Collateral Agent’s possession or the possession of the
Noteholder Collateral Agent), and the locations of all of its other places of business; and (b)
Schedule 6.3 correctly identifies any of such facilities and locations that are not owned
by such Loan Party and sets forth the names of the owners and lessors or sublessors of such
facilities and locations. Each Loan Party covenants and agrees that it will not (x) maintain any
Collateral with a Fair Market Value in excess of $2,500,000 (other than Inventory being toll
processed, in transit or consigned as permitted hereunder, rolling stock, equipment at other
locations for purposes of maintenance or repair and Collateral in the Collateral Agent’s possession
or the possession of the Noteholder Collateral Agent) at any location other than those locations
listed on Schedule 6.3, (y) otherwise change or add to any of such locations, or (z) change
the location of its jurisdiction of organization from the location identified in Schedule
6.3, unless in each case it gives the Collateral Agent prompt written notice thereof and
executes any and all financing statements and other documents that the Collateral Agent reasonably
requests in connection therewith. In the event any Loan Party changes or adds any location of
Collateral, the Loan Party shall prepare and deliver to the Collateral Agent a revised Schedule
6.3 which shall automatically be adopted as Schedule 6.3 for all purposes. Without
limiting the foregoing, each Loan Party represents that all Inventory (other than Inventory being
toll processed, in transit or consigned as permitted hereunder) is, and covenants that all of such
Inventory will be, located either (A) on premises owned by such Loan Party, or (B) on premises
leased by such Loan Party and included on Schedule 6.3.




          Section 6.4 Title to, Liens on, and Sale and Use of Collateral. Each Loan Party
represents and warrants to the Secured Parties and agrees with the Secured Parties that: (a) all of
its Collateral is and will continue to be owned by such Loan Party free and clear of all Liens
whatsoever, except for Permitted Liens and except for sales or other dispositions thereof permitted
by this Agreement; (b) the Collateral Agent’s Liens in the Collateral will not be subject to any
prior Lien except to the extent expressly provided for in the Intercreditor Agreement and for
Permitted Liens; and (c) such Loan Party will use, store, and maintain the




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Collateral with all reasonable care and will use such Collateral in compliance with Section
9.3(a).




          Section 6.5 Appraisals. Whenever an Event of Default exists, and at such other times
not more frequently than once per year, the Loan Parties shall, at their expense and upon the
Agents’ request, provide the Collateral Agent with appraisals or updates thereof of any or all of
the Collateral from one or more Acceptable Appraisers (as selected by Parent), and prepared in a
form and on a basis reasonably satisfactory to the Agents, such appraisals and updates to include,
without limitation, information required by Requirements of Law and by the internal policies of the
Lenders. In addition, the Loan Parties shall have the right (but not the obligation), at their
expense, at any time and from time to time (but not more than once per year) to provide the Agents
with additional appraisals or updates thereof of any or all of the Collateral from one or more
Acceptable Appraisers (as selected by Parent), and prepared in a form and on a basis reasonably
satisfactory to the Agents, in which case such appraisals or updates shall be used in connection
with the determination of the Orderly Liquidation Value and the calculation of the Borrowing Base
hereunder. In connection with any appraisal requested by the Agents pursuant to this Section
6.5, the Loan Parties shall be given twenty (20) days following such request by the Agents to
choose and engage the Acceptable Appraiser prior to the commencement of such appraisal. With
respect to each appraisal made pursuant to this Section 6.5 after the Closing Date, (i) the
Agents and the Loan Parties shall each be given a reasonable amount of time to review and comment
on a draft form of the appraisal prior to its finalization and (ii) any adjustments to the Orderly
Liquidation Value or the Borrowing Base hereunder as a result of such appraisal shall become
effective twenty (20) days following the finalization of such appraisal.




          Section 6.6 Access and Examination; Confidentiality.





     (a) The Collateral Agent, accompanied by any Lender which so elects, may upon
reasonable advance notice and at reasonable times during regular business hours, and at any
time when an Event of Default exists, have access to, examine, audit, make extracts from or
copies of, and inspect any or all of the Loan Parties’ records, files, and books of account
and the Collateral, and discuss the Loan Parties’ affairs with the Loan Parties’ officers
and senior management. The Loan Parties will deliver to the Collateral Agent any instrument
necessary for the Collateral Agent to obtain records from any service bureau maintaining
records for the Loan Parties. The Collateral Agent may, and at the direction of the
Majority Lenders shall, at any time when an Event of Default exists, and at the Loan
Parties’ expense, make copies of all of the Loan Parties’ books and records, or require the
Loan Parties to deliver such copies to the Collateral Agent. Upon reasonable request to
senior management of the Parent, the Collateral Agent may, without expense to the Collateral
Agent, use such of the Loan Parties’ respective personnel, supplies, and premises as may be
reasonably necessary for maintaining or enforcing the Collateral Agent’s Liens. The
Collateral Agent shall have the right, at any time, in the Collateral Agent’s name or in the
name of a nominee of the Collateral Agent, to verify the validity, amount, or any other
matter relating to the Accounts, Inventory, or other Collateral, by mail, telephone, or
otherwise; provided, however, in the absence of an Event of Default, the Collateral
Agent agrees that it will not attempt to verify more than ten (10) Accounts each month.



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     (b) Subject to succeeding clause (c), each of the Loan Parties hereby consents that the
Agents may issue and disseminate to the public general information describing the credit
accommodation entered into pursuant to this Agreement, including the names and addresses of
the Loan Parties and a general description of the Loan Parties’ business and may use the
Loan Parties’ names in advertising and other promotional material.




     (c) Each Agent and Lender severally agrees to take normal and reasonable precautions
and exercise due care to maintain the confidentiality of all information provided to an
Agent or such Lender by or on behalf of Holdings or such Loan Party, under this Agreement or
any other Loan Document, except to the extent that such information (i) was or becomes
generally available to the public other than as a result of disclosure by an Agent or such
Lender, or (ii) was or becomes available on a non-confidential basis from a source other
than Holdings or the Loan Parties; provided that such source is not bound by a
confidentiality obligation with Holdings or the Loan Parties known to such Agent or such
Lender. Notwithstanding the foregoing, an Agent and any Lender may disclose any such
information (1) at the request or pursuant to any requirement of any Governmental Authority
to which such Agent, Lender or any Affiliates of the foregoing is subject or in connection
with an examination of such Agent, Lender or Affiliate by any such Governmental Authority,
(2) pursuant to subpoena or other court process, (3) when required to do so in accordance
with the provisions of any applicable Requirement of Law; (4) to the extent reasonably
required in connection with any litigation or proceeding (including, but not limited to, any
bankruptcy proceeding) to which an Agent, any Lender, or their respective Affiliates may be
party, (5) to the extent required in connection with the exercise of any remedy or
enforcement of any rights hereunder or under any other Loan Document, (6) to such Agent’s or
such Lender’s independent auditors, accountants, attorneys, and other professional advisors
who shall be advised of their obligation to keep such information confidential, (7) to any
prospective Participant or Assignee, actual or potential, provided that such
prospective Participant or Assignee agrees with such Loan Party to keep such information
confidential to the same extent required of the Agents and the Lenders hereunder, (8) as
expressly permitted under the terms of any other document or agreement regarding
confidentiality to which Holdings or any Loan Party is a party or is deemed a party with an
Agent or such Lender, and (9) to its Affiliates to be used in connection with this Agreement
and the transactions contemplated hereby and such Affiliate agrees with such Loan Party to
keep such information confidential to the same extent required by the Agents and the Lenders
hereunder.



          Section 6.7 Collateral Reporting. Parent shall provide, or cause to be provided, to
the Agents, a Borrowing Base Certificate on or before the twentieth (20th) day of each Fiscal
Period, or, during the continuance of an Availability Triggering Event, more frequently if
requested by the Agents, for the preceding Fiscal Period end (or such shorter period during an
Availability Triggering Event), in form reasonably satisfactory to the Agents and containing the
information identified in Schedule 6.7. If any of the Loan Parties’ records or reports of
the Collateral required to be delivered pursuant to this Agreement are prepared by an accounting
service or other agent, each Loan Party hereby authorizes such service or agent to deliver such
records or reports to the Agents, for distribution to the Lenders.




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          Section 6.8 Accounts.





     (a) Each Loan Party represents and warrants that, with respect to such Loan Party’s
Accounts included in any Borrowing Base Certificate as Eligible Accounts: (i) each existing
Account represents, and each future Account will represent, a bona fide sale
or lease and delivery of goods by such Loan Party, or rendition of services by such Loan
Party, in the ordinary course of such Loan Party’s business; (ii) each existing Account is,
and each future Account will be, for a liquidated amount payable by the Account Debtor
thereon on the terms then in effect or in the schedule thereof delivered to the Collateral
Agent, without any offset, deduction, defense, or counterclaim except those known to such
Loan Party (unless otherwise reflected in the Borrowing Base Certificate); (iii) no payment
will be received with respect to any Account, and no credit, discount, or extension, or
agreement therefor will be granted on any Account except in the ordinary course of business
consistent with past practice; (iv) each copy of any invoice with respect to such Account
delivered to the Collateral Agent by such Loan Party will be a genuine copy of the original
invoice sent to the Account Debtor named therein; and (v) all goods described in any such
invoice representing a sale of goods will have been delivered to the Account Debtor and all
services of such Loan Party described in each invoice will have been performed.




     (b) Such Loan Party shall not re-date any invoice or sale or make sales on extended
dating or extend or modify any Account outside the ordinary course of business. If such
Loan Party becomes aware of any matter adversely affecting the collectibility of any Account
or the Account Debtor therefor involving an amount greater than $1,000,000, including
information regarding the Account Debtor’s creditworthiness, such Loan Party will promptly
so advise the Collateral Agent.




     (c) Such Loan Party shall not, without the Collateral Agent’s prior written consent,
accept any note or other instrument (except a check or other instrument for the immediate
payment of money) with respect to any Account other than Accounts which (i) do not exceed
$1,000,000 individually and (ii) at the time of accepting such note or other instrument are
not less than ninety (90) days past due from the date of the original invoice therefor or in
settlement of a bankrupt or disputed account. If the Collateral Agent consents to the
acceptance of any such instrument, it shall be considered as evidence of the Account and not
payment thereof and such Loan Party will promptly deliver such instrument to the Collateral
Agent, endorsed by such Loan Party to the Collateral Agent in a manner satisfactory in form
and substance to the Collateral Agent. Regardless of the form of presentment, demand, or
notice of protest with respect thereto, such Loan Party shall remain liable thereon until
such instrument is paid in full.




     (d) Such Loan Party shall notify the Collateral Agent promptly of all offsets,
deductions, defenses, or counterclaims in excess of $1,000,000 with any Account Debtor, and
agrees to settle, contest, or adjust such dispute or claim at no expense to the Secured
Parties. No discount, credit, or allowance shall be granted to any such Account Debtor
without the Collateral Agent’s prior written consent, except for discounts, credits, and
allowances made or given in the ordinary course of such Loan Party’s business (unless an
Event of Default has occurred and is continuing and the Collateral Agent has notified



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Parent that such exception is withdrawn). The Loan Party shall promptly send the
Collateral Agent a copy of each credit memorandum in excess of $1,000,000. The Collateral
Agent may at all times when an Event of Default exists, settle or adjust disputes and claims
directly with Account Debtors of any Loan Party for amounts and upon terms which the
Collateral Agent or the Majority Lenders, as applicable, shall consider advisable and, in
all cases, the Collateral Agent will credit the Loan Account with the net amounts received
by the Collateral Agent in payment of any Accounts.




     (e) If an Account Debtor returns any Inventory to a Loan Party then, unless an Event of
Default exists and the Collateral Agent has given notice to Parent not to do so, such Loan
Party shall promptly determine the reason for such return and shall issue a credit
memorandum to the Account Debtor in the appropriate amount. The Loan Parties shall promptly
report to the Collateral Agent any return involving an amount in excess of $1,000,000. Each
such report shall indicate the reasons for the returns and the locations and condition of
the returned Inventory. In the event any Account Debtor returns Inventory to a Loan Party
when an Event of Default exists, such Loan Party, upon the request of the Collateral Agent,
shall: (i) hold the returned Inventory in trust for the Collateral Agent; (ii) segregate all
returned Inventory from all of its other property; (iii) dispose of the returned Inventory
solely according to the Collateral Agent’s written instructions; and (iv) not issue any
credits or allowances with respect thereto without the Collateral Agent’s prior written
consent. All returned Inventory of any Loan Party shall be subject to the Collateral
Agent’s Liens thereon. Whenever any Inventory is returned, the related Account shall be
deemed ineligible (without duplication of any other exclusion) to the extent of the amount
owing by the Account Debtor with respect to such returned Inventory.



          Section 6.9 Collection of Accounts; Payments.





     (a) Effective on the Closing Date the Loan Parties shall establish a Payment Account
(the “Primary Payment Account”) with the Collateral Agent into which all Account
collections will be deposited, and the Loan Parties hereby agree that, during an
Availability Triggering Event, the Collateral Agent will have exclusive control over the
Primary Payment Account; provided, however, that, in the absence of an
Availability Triggering Event, the Loan Parties will have exclusive control over the Primary
Payment Account. During an Availability Triggering Event, the Agents shall have the right
to apply collections received into the Primary Payment Account to the outstanding Revolving
Loans and the Borrowers shall have the right, subject to the terms and conditions of this
Agreement, to request Borrowings hereunder and direct the disposition of Revolving Loan
proceeds. During an Availability Triggering Event, the Loan Parties shall not be entitled
to present items drawn on or otherwise to withdraw or direct the dispositions of funds from
the Primary Payment Account nor shall they be entitled to close the Primary Payment Account
until all obligations under this Agreement are paid and performed in full. Notwithstanding
any other agreements the Loan Parties may have with any Secured Party, the Collateral Agent
shall be entitled, during an Event of Default, for purposes of this Agreement to give
instructions as to the withdrawal or disposition of funds from time to time credited to any
deposit account with the Collateral Agent, any Payment Account, or the Primary Payment
Account, or as to any other matters relating to



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any of the forgoing without further consent of the Loan Parties. The Collateral
Agent’s power under this Agreement to give instructions as to the withdrawal or disposition
of any funds from time to time credited to the Primary Payment Account, any other Payment
Account or deposit account with the Collateral Agent or as to any other matters relating to
the foregoing includes, without limitation, during an Event of Default, the power to give
stop payment orders for any items being presented to such accounts for payment.




     (b) No later than ninety (90) days from the Closing Date or such later time as the
Collateral Agent shall agree, the Loan Parties shall establish a lock-box service for
collections of Accounts at Clearing Banks acceptable to the Collateral Agent and, with
respect to bank accounts with Clearing Banks other than the Collateral Agent, if requested
by the Collateral Agent, subject to Blocked Account Agreements and other documentation
reasonably acceptable to the Collateral Agent. The Loan Parties shall instruct all Account
Debtors with respect to Accounts to make all payments directly to the address established
for each such lock-box service or electronically into such lock-box accounts. If,
notwithstanding such instructions, any Loan Party receives any proceeds of Accounts, it
shall deliver such payments to the Collateral Agent or deposit them into a Payment Account.
During an Availability Triggering Event, all collections received in any lock-box or Payment
Account or directly by any Borrower or the Collateral Agent, and all funds in any Payment
Account or other account to which such collections are deposited shall be subject to the
Collateral Agent’s sole control and withdrawals by any Borrower shall not be permitted;
provided, however, that, in the absence of an Availability Triggering Event,
all collections received in any lock-box or Payment Account, and all funds in any Payment
Account or other account to which such collections are deposited shall be subject to the
Borrower’s sole control. The Collateral Agent or its designee may, at any time after the
occurrence and during the continuation of an Event of Default, upon notice to Parent, notify
Account Debtors that the Accounts have been assigned to the Collateral Agent and of the
Collateral Agent’s security interest therein, and may collect them directly and charge the
collection costs and expenses to the Loan Account as a Revolving Loan. So long as an Event
of Default exists, the Borrowers, at the Collateral Agent’s request, shall execute and
deliver to the Collateral Agent such documents as the Collateral Agent shall reasonably
request to grant the Collateral Agent access to any post office box in which collections of
Accounts are received.




     (c) If sales of Inventory are made or services are rendered by any Loan Party for cash,
such Loan Party shall promptly deposit such cash into a Payment Account.




     (d) Except as otherwise provided in this Section 6.9, all payments received by
the Collateral Agent in a bank account, an account separate from the Primary Payment
Account, a Payment Account or a lock-box account, designated by the Loan Parties and the
Collateral Agent will be credited to the Loan Account (conditional upon final collection) on
the same day received (if received prior to 3:00 p.m. (New York, New York time));
provided that the Loan Parties shall compensate the Collateral Agent for the cost of
collection and clearance of remittances applied to the Loan Account,



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including interest for one (1) day, on all uncollected funds credited to the Loan
Account as provided by this Section 6.9(d).




     (e) In the event all of the Obligations (other than contingent indemnification and
expense reimbursement obligations for which no claim has been made) are repaid upon the
termination of this Agreement or upon acceleration of the Obligations, other than through
the Collateral Agent’s receipt of payments on account of the Accounts or proceeds of the
other Collateral, such payment will be credited (conditional upon final collection) to the
Loan Account (i) on the date of the Collateral Agent’s receipt of such funds if such funds
are collected funds or other immediately available funds if received by 3:00 p.m. (New York,
New York time) or (ii) one (1) Business Day after the Collateral Agent’s receipt of such
funds if such funds are uncollected funds or collected or immediately available funds
received after such time.



          Section 6.10 Inventory; Perpetual Inventory.





     (a) Each Loan Party will keep its Inventory (other than returned or obsolete Inventory)
in good and marketable condition, except for damaged or defective goods arising in the
ordinary course of such Loan Party’s business. No Loan Party will, without the prior
written consent of the Collateral Agent, acquire or maintain any Inventory in excess of
$1,000,000 at any time on consignment or approval unless such Inventory is disclosed to the
Collateral Agent pursuant to Section 6.7 and the applicable Loan Party takes
appropriate steps to insure that all of such Inventory meets the criteria of Eligible
Inventory, including delivery of appropriate subordination agreements, if necessary. Each
Loan Party will conduct a physical count of its Inventory at least once per Fiscal Year, and
during the existence of an Event of Default, at such other times as the Collateral Agent may
reasonably request. Each Loan Party will maintain a perpetual Inventory reporting system at
all times. Without the Collateral Agent’s written consent, no Loan Party will sell, through
a single transaction or a series of related transactions, Inventory on a bill-and-hold,
guaranteed sale, sale and return, sale on approval, consignment, or other repurchase or
return basis in excess of $1,000,000.




     (b) In connection with all Inventory financed by letters of credit, the Loan Parties
will, at the Collateral Agent’s request, instruct all suppliers, carriers, forwarders,
customs brokers, warehouses or other Persons receiving or holding cash, checks, Inventory,
documents or instruments in which the Collateral Agent holds a security interest to deliver
them to the Collateral Agent and/or subject to the Collateral Agent’s order, and if they
shall come into such Loan Party’s possession, to deliver them, upon request, to the
Collateral Agent in their original form. The Loan Parties shall also, at the Collateral
Agent’s request, designate the Collateral Agent as the consignee on all bills of lading and
other negotiable and non-negotiable documents.



          Section 6.11 Documents, Instruments, and Chattel Paper. Each Loan Party represents
and warrants to the Secured Parties that (a) all documents, instruments, and Chattel Paper of such
Loan Party describing, evidencing, or constituting Collateral, and all signatures and endorsements
thereon, are and will be complete, valid, and genuine, and (b) all goods evidenced by such
documents, instruments, and Chattel Paper are and will be owned by such




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Loan Party free and clear of all Liens other than Permitted Liens. If any Loan Party retains
possession of any Chattel Paper or instruments, at Collateral Agent’s request upon an Event of
Default, instruments shall be marked with the following legend: “This writing and the obligations
evidenced or served hereby are subject to the security interest of Bank of America, N.A., as
Collateral Agent, for the benefit of Collateral Agent and certain Secured Parties.”




          Section 6.12 Right to Cure. The Collateral Agent may, in its reasonable discretion,
and shall, at the direction of the Majority Lenders, subject to the Intercreditor Agreement, pay
any reasonable amount or do any reasonable act required of any Loan Party hereunder or under any
other Loan Document in order to preserve, protect, maintain, or enforce the Obligations, the
Collateral or the Collateral Agent’s Liens therein, and which any Loan Party fails to timely pay or
do, including payment of any judgment against any Loan Party, any insurance premium, any warehouse
charge, any finishing or processing charge, any landlord’s or bailee’s claim, and any other Lien
upon or with respect to the Collateral. All payments that the Collateral Agent makes under this
Section 6.12 and all out-of-pocket costs and expenses that the Collateral Agent pays or
incurs in connection with any action taken by it hereunder shall be charged to the Loan Account as
a Revolving Loan. Any payment made or other action taken by the Collateral Agent under this
Section 6.12 shall be without prejudice to any right to assert an Event of Default
hereunder and to proceed thereafter as herein provided.




          Section 6.13 Power of Attorney. Each Loan Party, as to itself, hereby appoints the
Collateral Agent and the Collateral Agent’s designee as such Loan Party’s attorney, with power: (a)
to endorse such Loan Party’s name on any checks, notes, acceptances, money orders, or other forms
of payment or security that come into the Collateral Agent’s or any Secured Parties’ possession;
(b) to sign such Loan Party’s name on any invoice, bill of lading, warehouse receipt, or other
document of title relating to any Collateral, on drafts against customers, on assignments of
Accounts, on notices of assignment, financing statements, and other public records and to file any
such financing statements by electronic means with or without a signature as authorized or required
by applicable law or filing procedure; (c) so long as any Event of Default exists, to notify the
post office authorities to change the address for delivery of such Loan Party’s mail to an address
designated by the Collateral Agent and to receive, open, and dispose of all mail addressed to such
Loan Party; (d) to send requests for verification of Accounts to customers or Account Debtors;
provided, however, in the absence of an Event of Default, the Collateral Agent
agrees that it will not attempt to verify more than ten (10) Accounts each month; (e) to clear
Inventory through customs in such Loan Party’s name, the Collateral Agent’s name, or the name of
the Collateral Agent’s designee, and to sign and deliver to customs officials powers of attorney in
such Loan Party’s name for such purpose; and (f) to do all things the Collateral Agent determines
are necessary to carry out this Agreement. Each Loan Party ratifies and approves all acts of such
attorney. None of the Lenders, the Collateral Agent, nor their attorneys will be liable for any
acts or omissions or for any error of judgment or mistake of fact or law other than any such
liability arising from any such Person’s gross negligence or willful misconduct. This power, being
coupled with an interest, is irrevocable until this Agreement has been terminated and all
outstanding Obligations have been fully satisfied.




          Section 6.14 The Collateral Agent’s and the Lenders’ Rights, Duties, and Liabilities.




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     (a) The Loan Parties assume all responsibility and liability arising from or relating
to the use, sale, or other disposition of the Collateral. The Obligations shall not be
affected by any failure of the Collateral Agent or any Lender to take any steps to perfect
the Collateral Agent’s Liens or to collect or realize upon the Collateral, nor shall loss of
or damage to the Collateral release any Loan Party from any of the Obligations. Following
the occurrence and during the continuation of an Event of Default, the Collateral Agent may
(but shall not be required to), and at the direction of the Majority Lenders shall, subject
to the Intercreditor Agreement, without notice to or consent from any Loan Party sue upon or
otherwise collect, extend the time for payment of, modify or amend the terms of, compromise
or settle for cash, credit, or otherwise upon any terms, grant other indulgences,
extensions, renewals, compositions, or releases, and take or omit to take any other action
with respect to the Collateral, any security therefor, any agreement relating thereto, any
insurance applicable thereto, or any Person liable directly or indirectly in connection with
any of the foregoing, without discharging or otherwise affecting the liability of any Loan
Party for the Obligations or under this Agreement or any other agreement now or hereafter
existing between the Collateral Agent and/or any Lender and any Loan Party.




     (b) It is expressly agreed by the Loan Parties that, anything herein to the contrary
notwithstanding, each of the Loan Parties shall remain liable under each of its contracts
and each of its licenses to observe and perform all the conditions and obligations to be
observed and performed by it thereunder. Neither the Collateral Agent nor any Lender shall
have any obligation or liability under any contract or license by reason of or arising out
of this Agreement or the granting herein of a Lien thereon or the receipt by the Collateral
Agent or any Lender of any payment relating to any contract or license pursuant hereto that
is applied as required herein. Neither the Collateral Agent nor any Lender shall be
required or obligated in any manner to perform or fulfill any of the obligations of any Loan
Party under or pursuant to any contract or license, or to make any payment, or to make any
inquiry as to the nature or the sufficiency of any payment received by it or the sufficiency
of any performance by any party under any contract or license, or to present or file any
claims, or to take any action to collect or enforce any performance or the payment of any
amounts which may have been assigned to it or to which it may be entitled at any time or
times.



          Section 6.15 Guaranties; Third Party Joinder. Subject to the provisions of and
pursuant to Section 15.20, promptly upon creation or acquisition of any Subsidiary of a
Loan Party, such Loan Party shall, to the extent required pursuant to Section 9.20, cause
such new Subsidiary to become a Loan Party by executing and delivering to the Collateral Agent a
Guaranty Agreement and other instruments, certificates, and agreements as the Collateral Agent may
reasonably request. Upon execution and delivery of such Guaranty Agreement and other instruments,
certificates, and agreements, such newly created or acquired Subsidiary shall automatically become
a Loan Party and thereupon shall have all of the rights, benefits, duties, and obligations of a
Loan Party under the Loan Documents.




          Section 6.16 Voting Rights, Distributions, Etc. in Respect of Investment Property.


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     (a) Unless an Event of Default exists and the Collateral Agent has delivered a notice
as contemplated by Section 6.16(b), and subject to the Intercreditor Agreement, (i) each
Loan Party shall be entitled to exercise any and all voting and other consensual rights
(including, without limitation, the right to give consents, waivers, and notifications in
respect of any securities) pertaining to its Investment Property or any part thereof;
provided, however, that without the prior written consent of the Collateral
Agent and the Majority Lenders, no vote shall be cast or consent, waiver, or ratification
given or action taken which would (A) be inconsistent with or violate any provision of this
Agreement or any other Loan Document or (B) amend, modify, or waive any material term,
provision, or condition of the certificate of incorporation, bylaws, certificate of
formation, or other charter document or other agreement relating to, evidencing, providing
for the issuance of, or securing any such Investment Property, in any manner that would
impair such Investment Property, the transferability thereof, or the Collateral Agent’s
Liens therein, and (ii) each Borrower shall be entitled to receive and retain any and all
dividends, interest paid and other cash distributions in respect of any of such Investment
Property (unless otherwise required by this Agreement).




     (b) During the existence of an Event of Default, subject to the Intercreditor
Agreement, (i) the Collateral Agent may, after delivery of notice to the applicable Loan
Party, exercise all voting and corporate rights at any meeting of any corporation,
partnership, or other business entity issuing any of the Collateral consisting of Investment
Property, the proceeds thereof (in cash or otherwise) (as used in this Section 6.16
collectively, the “Pledged Collateral”) held by the Collateral Agent hereunder, and
any and all rights of conversion, exchange, subscription, or any other rights, privileges,
or options pertaining to any of the Pledged Collateral as if it were the absolute owner
thereof, including, without limitation, the right to exchange at its discretion any and all
of the Pledged Collateral upon the merger, consolidation, reorganization, recapitalization,
or other readjustment of any corporation, partnership, or other business entity issuing any
of such Pledged Collateral or upon the exercise by any such issuer or the Collateral Agent
of any right, privilege, or option pertaining to any of the Pledged Collateral, and in
connection therewith, to deposit and deliver any and all of the Pledged Collateral with any
committee, depositary, transfer agent, registrar, or other designated agency upon such terms
and conditions as it may determine, all without liability except to account for property
actually received by it, but the Collateral Agent shall have no duty to exercise any of the
aforesaid rights, privileges, or options, and the Collateral Agent shall not be responsible
for any failure to do so or delay in so doing, (ii) after the Collateral Agent’s giving of
the notice specified in clause (i) of this Section 6.16(b), all rights of
any Loan Party to exercise the voting and other consensual rights which it would otherwise
be entitled to exercise pursuant to clause (i) of Section 6.16(a) and to
receive the dividends, interest, and other distributions which it would otherwise be
authorized to receive and retain thereunder shall be suspended until such Event of Default
shall no longer exist or as the Collateral Agent shall otherwise specify, and all such
rights shall, until such Event of Default shall no longer exist or as the Collateral Agent
shall otherwise specify, thereupon become vested in the Collateral Agent which shall
thereupon have the sole right to exercise such voting and other consensual rights and to
receive and hold as Pledged Collateral such dividends, interest, and other distributions,
(iii) all dividends, interest, and other distributions which are received by any Loan Party
contrary to the



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provisions of this Section 6.16(b) shall be received in trust for the benefit
of the Collateral Agent, shall be segregated from other funds of such Loan Party and shall
be forthwith paid over to the Collateral Agent as Collateral in the same form as so received
(with any necessary endorsement), and (iv) each Loan Party shall execute and deliver (or
cause to be executed and delivered) to the Collateral Agent all such proxies and other
instruments as the Collateral Agent may reasonably request for the purpose of enabling the
Collateral Agent to exercise the voting and other rights which it is entitled to exercise
pursuant to this Section 6.16(b) and to receive the dividends, interest, and other
distributions which it is entitled to receive and retain pursuant to this Section
6.16(b). The foregoing shall not in any way limit the Collateral Agent’s power and
authority granted pursuant to Section 6.13. After all Events of Default have been
cured or waived and the applicable Loan Party shall have delivered to the Collateral Agent
certificates to that effect, the Collateral Agent shall, promptly after all such Events of
Default have been cured or waived, repay to each Loan Party (without interest) all dividends
or other distributions that such Loan Party would otherwise be permitted to retain pursuant
to the terms of Section 6.16(a) above and that remain in such account.



          Section 6.17 Personal Property. The Secured Parties and the Loan Parties hereby agree
as follows:





     (a) Perfection by Filing. The Collateral Agent may, and the Loan Parties
hereby authorize the Collateral Agent to, at any time and from time to time, file financing
statements, continuation statements, and amendments thereto that describe the Collateral as
“all assets” or words of similar import and which contain any other information required
pursuant to Article 9 of the UCC for the sufficiency of filing office acceptance of any
financing statement, continuation statement, or amendment, and each Loan Party agrees to
furnish any such information to the Collateral Agent promptly upon request. The Collateral
Agent shall inform the applicable Loan Parties of any such filing either prior to, or
reasonably promptly after, such filing. The Loan Parties acknowledge that they are not
authorized to file any financing statement covering the Collateral or amendment or
termination statement with respect to any financing statement covering the Collateral
without the prior written consent of Collateral Agent (or the Noteholder Collateral Agent,
with respect to Collateral other than Revolving Facility First Lien Collateral) and agree
that they will not do so without the prior written consent of Collateral Agent, subject to
(i) the Loan Parties’ rights under Section 9-509(d)(2) of Article 9 of the UCC and (ii)
financing statements that may be filed, in accordance with the Intercreditor Agreement, to
perfect the Noteholder Liens in the Collateral.




     (b) Other Perfection, etc. Each Loan Party shall, at any time and from time to
time, take such steps as the Collateral Agent may reasonably request for the Collateral
Agent (i) to obtain an acknowledgment, in form and substance reasonably satisfactory to the
Collateral Agent, of any bailee having possession of any of the Collateral in excess of
$1,000,000 and not having otherwise entered into a subordination agreement for the benefit
of the Collateral Agent, stating that the bailee holds such Collateral for the Collateral
Agent, (ii) to obtain “control” of any Investment Property, deposit accounts,
letter-of-credit rights, or Electronic Chattel Paper constituting Revolving Facility First
Lien Collateral (as such terms are defined by Article 9 of the UCC with corresponding



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provisions thereof defining what constitutes “control” for such items of Collateral) in
excess of $1,000,000, with any agreements establishing control to be in form and substance
reasonably satisfactory to the Collateral Agent, and (iii) otherwise to insure the continued
perfection and priority of the Collateral Agent’s security interest in any of the Collateral
(to the extent required hereunder) and of the preservation of its rights therein. If any
Loan Party shall at any time, acquire a Commercial Tort Claim with an expected value of at
least $1,000,000, such Loan Party shall promptly notify the Collateral Agent thereof in a
writing, therein providing a reasonable description and summary thereof, and upon delivery
thereof to the Collateral Agent, such Loan Party shall be deemed to thereby grant to the
Collateral Agent (and such Loan Party hereby grants to the Collateral Agent) a security
interest and Lien in and to such Commercial Tort Claim and all proceeds thereof, all upon
the terms of and governed by this Agreement.




     (c) Savings Clause. Nothing contained in this Section 6.17 shall be
construed to narrow the scope of the Collateral Agent’s Liens or the perfection or priority
thereof or to impair or otherwise limit any of the rights, powers, privileges, or remedies
of the Secured Parties under the Loan Documents.



          Section 6.18 Intercreditor Agreement Governs. (a) NOTWITHSTANDING ANYTHING HEREIN TO
THE CONTRARY, THE LIEN AND SECURITY INTEREST GRANTED TO THE COLLATERAL AGENT, FOR THE BENEFIT OF
THE SECURED PARTIES, PURSUANT TO THIS AGREEMENT AND THE OTHER SECURITY DOCUMENTS AND THE EXERCISE
OF ANY RIGHT OR REMEDY BY THE COLLATERAL AGENT AND THE OTHER PARTIES HEREUNDER ARE SUBJECT TO THE
PROVISIONS OF THE INTERCREDITOR AGREEMENT. IN THE EVENT OF ANY CONFLICT OR INCONSISTENCY BETWEEN
THE PROVISIONS OF THE INTERCREDITOR AGREEMENT AND THIS AGREEMENT, THE PROVISIONS OF THE
INTERCREDITOR AGREEMENT SHALL CONTROL





     (b) The Agents and Lenders acknowledge and agree, on behalf of themselves and any
Secured Party, that, any provision of this Agreement or any other Loan Document to the
contrary notwithstanding, until the termination of the Senior Notes Security Documents and
the release of the Noteholder Collateral Agent’s Lien in such Collateral, the Loan Parties
shall not be required to act or refrain from acting pursuant to this Agreement or any other
Loan Document or with respect to any Collateral on which the Noteholder Collateral Agent has
a Lien superior in priority to the Collateral Agent’s Lien thereon in any manner that would
result in a default under the terms and provisions of the Senior Notes Collateral Agreement
or any document governing the Senior Secured Notes.




     (c) Reference is made to the Intercreditor Agreement. Each Lender hereunder (a)
consents to the subordination of Liens provided for in the Intercreditor Agreement, (b)
agrees that it will be bound by and will take no actions contrary to the provisions of the
Intercreditor Agreement and (c) authorizes and instructs the Collateral Agent to enter into
the Intercreditor Agreement as Collateral Agent and on behalf of such Lender. The foregoing
provisions are intended as an inducement to the Lenders to extend credit and



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such Lenders are intended third party beneficiaries of such provisions and the
provisions of the Intercreditor Agreement.



ARTICLE 7




BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES




          Section 7.1 Books and Records. Each of Holdings and the Borrowers shall, and shall
cause each Subsidiary to, maintain, at all times, correct and complete books, records, and accounts
in which complete, correct, and timely entries are made of all dealings and transactions in
relation to its business and activities in conformity with GAAP and all Requirements or Law. Each
of Holdings and the Borrowers shall, and shall cause each Subsidiary to, maintain at all times
books and records pertaining to the Collateral in such detail, form, and scope as the
Administrative Agent shall reasonably require, including, but not limited to, records of (a) all
payments received and all credits and extensions granted with respect to the Accounts, (b) the
return, rejection, repossession, stoppage in transit, loss, damage, or destruction of any
Inventory, and (c) all other dealings affecting the Collateral.




          Section 7.2 Financial Information. The Borrowers will furnish, or cause to be
furnished, to the Administrative Agent (which will promptly furnish such information to the
Lenders) the following in such detail as the Administrative Agent shall reasonably request:





     (a) The Borrowers will furnish, or cause to be furnished, as soon as available, but in
any event not later than ninety (90) days after the close of each Fiscal Year (or, if
applicable, such longer period permitted under Rule 12b 25 under the Exchange Act),
consolidated audited, and consolidating (with respect to each business product group of
Parent) unaudited, balance sheets, statements of income, cash flow, and stockholders’ equity
for Parent and its Subsidiaries for such Fiscal Year, the accompanying notes thereto, and
setting forth in comparative form figures for the previous Fiscal Year, all in reasonable
detail, fairly presenting in all material respects the financial position and the results of
operations of Parent and its Subsidiaries as at the date thereof and for the Fiscal Year
then ended, and prepared in accordance with GAAP or, in the case of consolidating financial
statements, the Borrowers’ standard internal practices. Such Financial Statements shall be
examined in accordance with generally accepted auditing standards by and, in the case of
such Financial Statements performed on a consolidated basis, accompanied by a report thereon
(without a “going concern” or like material qualification or exception) of independent
certified public accountants of national standing selected by Parent (it being understood
that the delivery by Parent of Annual Reports on Form 10-K of Parent shall satisfy the
requirements of this Section 7.2(a) to the extent such Annual Reports include all the
information specified herein).




     (b) The Borrowers will furnish, or cause to be furnished, as soon as available, but in
any event not later than thirty (30) days after the end of each Fiscal Period (or, if
applicable, such longer period permitted under Rule 12b 25 under the Exchange Act), other
than any Fiscal Period which is a Fiscal Quarter end and with respect to any such Fiscal
Quarter end within forty-five (45) days after the end of such Fiscal Quarter, a Compliance
Certificate, consolidated and consolidating (with respect to each business



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product group of Parent) unaudited balance sheets of Parent and its Subsidiaries as at
the end of such Fiscal Period or Fiscal Quarter, as applicable, and consolidated and
consolidating (with respect to each business product group of Parent) unaudited statements
of income and cash flow for Parent and its Subsidiaries for such Fiscal Period or Fiscal
Quarter, as applicable, and for the period from the beginning of the Fiscal Year to the end
of such Fiscal Period or Fiscal Quarter, as applicable, all in reasonable detail, fairly
presenting in all material respects the financial position and results of operations of
Parent and its Subsidiaries as at the date thereof and for such periods, and prepared in
accordance with GAAP (other than presentation of footnotes and subject to normal year-end
adjustments) applied consistently with the audited Financial Statements required to be
delivered pursuant to Section 7.2(a) or, in the case of consolidating Financial
Statements, the Borrowers’ standard internal practices, provided, however,
in the event that the Borrowers cannot provide such Financial Statements within thirty (30)
days after any Fiscal Period ending on a Fiscal Quarter end or Fiscal Year end, the
Borrowers shall provide the Administrative Agent with an Applicable Margin Calculation
within thirty (30) days after the end of such Fiscal Quarter or Fiscal Year.
Notwithstanding anything to the contrary contained herein, should the Borrowers elect to
provide the Applicable Margin Calculation in lieu of Financial Statements within thirty (30)
days after such Fiscal Quarter end or Fiscal Year end, the Borrowers shall also furnish
Financial Statements in accordance with the terms hereof. Parent shall certify by a
certificate signed by its chief financial officer or chief accounting officer or a
Responsible Officer that all such Financial Statements have been prepared in accordance with
GAAP and present fairly in all material respects, subject to normal year-end adjustments and
the absence of footnotes, the financial position of Parent and its Subsidiaries as at the
dates thereof and its results of operations for the periods then ended (it being understood
that the delivery by Parent of Quarterly Reports on Form 10-Q of Parent shall satisfy the
requirements of this Section 7.2(b) to the extent such Quarterly Reports include the
information specified herein).




     (c) The Borrowers will furnish, or cause to be furnished, within forty-five days (45)
of the last day of each Fiscal Quarter, a certificate of the chief financial officer or
chief accounting officer or Responsible Officer of Parent in the form of Exhibit F
(a “Compliance Certificate”) (i) (if applicable) setting forth in reasonable detail
the calculations required to establish compliance with Section 9.24 during the period
covered by such Financial Statements and as at the end thereof, and (ii) stating that,
except as explained in reasonable detail in such certificate, (A) all of the representations
and warranties of the Borrowers contained in this Agreement and the other Loan Documents are
true and correct in all material respects as at the date of such certificate as if made at
such time, except for those that speak as of a particular date, and (B) no Default or Event
of Default then exists. If such certificate discloses that a representation or warranty is
not true or correct, or that a covenant has not been complied with, or that a Default or
Event of Default exists, such certificate shall set forth what action the Borrowers have
taken or propose to take with respect thereto.




     (d) The Borrowers will furnish, or cause to be furnished, no sooner than sixty (60)
days prior to and not less than thirty (30) days after the beginning of each Fiscal Year, an
annual budget with respect to such Fiscal Year prepared by Parent during such



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time period (to include forecasted consolidated and consolidating (with respect to each
business product group of Parent) balance sheets and statements of income and cash flow) for
Parent and its Subsidiaries as at the end of and for each Fiscal Period of such Fiscal Year.




     (e) [Reserved]




     (f) The Borrowers will furnish, or cause to be furnished, promptly upon the filing
thereof, copies of all reports, if any, to or other documents filed by Holdings, any
Borrower or any Subsidiary with the Securities and Exchange Commission under the Exchange
Act, and all material notices sent or received by any Borrower to or from the holders of any
Indebtedness (excluding industrial development revenue bonds and mortgages) of any Borrower
registered under the Securities Act of 1933 or to or from the trustee under any indenture
under which the same is issued.




     (g) The Borrowers will furnish, or cause to be furnished, as soon as available, but in
any event not later than fifteen (15) days after the receipt by the Board of Directors of
each of Holdings, any Borrower or any Subsidiary of a copy of all reports submitted to such
Board of Directors in connection with any material interim or special audit and a copy of
any final “management letter” prepared by any independent certified public accountants of
the Holdings, any Borrower or any Subsidiary.




     (h) The Borrowers will furnish promptly after the request by an Agent or any (through
the Administrative Agent) Lender all documentation and other information that such Lender
reasonably requests in order to comply with its ongoing obligations under applicable “know
your customer” and anti-money laundering rules and regulations, including the USA PATRIOT
ACT.




     (i) The Borrowers will furnish to the Agents each year at the time of delivery of the
annual financial statements with respect to the preceding Fiscal Year pursuant to paragraph
(a) above a certificate of a Responsible Officer setting forth the information required
pursuant to Section 2 of the Perfection Certificate or confirming that there has been no
change in such information since the Closing Date or the date of the most recent certificate
delivered pursuant to this paragraph (i).




     (j) The Borrowers will furnish, or cause to be furnished, such additional information
as an Agent and/or any Lender (through the Administrative Agent) may from time to time
reasonably request regarding the financial and business affairs of any Borrower.



          Section 7.3 Notices to the Lenders. The Borrowers shall notify the Administrative
Agent and the Lenders in writing of the following matters at the following times:





     (a) promptly after becoming aware of any Default or Event of Default;




     (b) promptly after becoming aware of any event or circumstance which has resulted in,
or could reasonably be expected to result in, a Material Adverse Effect;



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     (c) promptly after becoming aware of any pending or threatened (in writing) action,
suit, proceeding, or counterclaim by any Person, or any pending or threatened investigation
by a Governmental Authority, as to which an adverse determination is reasonably probable and
which, if adversely determined, could reasonably be expected to have a Material Adverse
Effect;




     (d) promptly after becoming aware of any pending or threatened (in writing) strike,
work stoppage, unfair labor practice claim, or other labor dispute affecting any Loan Party,
in each case, that could reasonably be expected to have a Material Adverse Effect;




     (e) any change in any Loan Party’s name, state of organization, or form of
organization, in each case at least fifteen (15) days prior thereto;




     (f) upon request, copies of any annual report to be filed pursuant to ERISA in
connection with each Plan and copies of any pension reports obtained by any Loan Party;




     (g) promptly and in any event within ten (10) Business Days after any Borrower knows
that a Reportable Event has occurred, a statement generally describing the Reportable Event
and the action, if any, that such Borrower or (if known by such Borrower) any ERISA
Affiliate has taken or proposes to take with respect thereto;




     (h) promptly any records, documents or other information must be furnished to the
Pension Benefit Guaranty Corporation by any Loan Party with respect to any Plan pursuant to
Section 4010 of ERISA, a copy of such records, documents or information;




     (i) promptly and in any event within ten (10) Business Days after receipt by any
Borrower or any ERISA Affiliate from the sponsor of a Multiemployer Plan, copies of each
notice concerning such Multiemployer Plan, the imposition of withdrawal liability, its
reorganization or termination (each within the meaning of Title IV of ERISA) or the amount
of liability incurred or that may be incurred by such entity in connection with such event;
and




     (j) promptly after commencement of any Commercial Tort Claim for which notice is
required to be delivered pursuant to Article 6, such notice to include the details thereof.


Each notice given under this Section (other than under subsections (f), (h) and (i)) shall describe
the subject matter thereof in reasonable detail, and shall set forth the action that any Loan Party
has taken or proposes to take with respect thereto.




ARTICLE 8




GENERAL WARRANTIES AND REPRESENTATIONS




     Holdings and each Borrower warrants and represents to the Agents, the Letter of Credit Issuer
and the Lenders that:



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          Section 8.1 Authorization, Validity, and Enforceability of this Agreement and the Loan
Documents; No Conflicts. Each such Person has the power and authority to execute, deliver, and
perform this Agreement and the other Loan Documents to which it is a party, to incur the
Obligations, and to grant to the Collateral Agent Liens upon the Collateral. Each such Person has
taken all necessary action (including obtaining approval of its stockholders, partners, general
partner(s), members, or other applicable equity owners, if necessary) to authorize its execution,
delivery, and performance of this Agreement and the other Loan Documents to which it is a party.
This Agreement and the other Loan Documents have been duly executed and delivered by each such
Person, and constitute the legal, valid, and binding obligations of each such Person, enforceable
against it in accordance with their respective terms without defense, set-off, or counterclaim,
except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws
at the time in effect affecting the rights of creditors generally and to the effect of general
principles of equity whether applied by a court of law or equity. The Transactions do not and will
not conflict with, or constitute a violation or breach of, or constitute (alone or with notice or
lapse of time or both) a default under, or give rise to any right to accelerate or to require the
prepayment, repurchase or redemption of any obligation under, or result in or require the creation
or imposition of any Lien upon the property of Holdings or any Borrower by reason of the terms of
(a) any contract, mortgage, Lien, lease, agreement, indenture, document, or instrument to which
Holdings or any Borrower is a party or which is binding upon it the effect of which could
reasonably be expected to have a Material Adverse Effect, (b) any Requirement of Law applicable to
Holdings or such Borrower the effect of which could reasonably be expected to have a Material
Adverse Effect, or (c) the certificate or articles of incorporation, by-laws, or other
organizational or constituent documents, as the case may be, of Holdings or such Borrower.




          Section 8.2 Validity and Priority of Security Interest.





     (a) This Agreement and the applicable Security Documents are effective to create in
favor of the Collateral Agent, for the ratable benefit of the Secured Parties, a legal,
valid and enforceable security interest in the Collateral and the proceeds thereof and (i)
when the Pledged Collateral is delivered to the Collateral Agent (subject to the terms of
the Senior Notes Collateral Agreement and the Intercreditor Agreement), the Lien created
under this Agreement and the applicable Security Documents shall constitute a fully
perfected second-priority Lien on, and security interest in, all right, title and interest
of the Loan Parties in such Pledged Collateral, in each case prior and superior in right to
any other Person (other than, pursuant to the terms of the Senior Notes Collateral Agreement
and the Intercreditor Agreement, the Senior Liens), and (ii) when financing statements in
appropriate form are filed in the offices specified on Schedule 8.2, the Lien
created under this Agreement and the applicable Security Documents will constitute a fully
perfected Lien on, and security interest in, all right, title and interest of the Loan
Parties in such Collateral, in each case prior and superior in right to any other Person,
other than with respect to Permitted Liens.




     (b) Upon the recordation of this Agreement and the Copyright, Patent, and Trademark
Agreements with the United States Patent and Trademark Office and the United States
Copyright Office, together with the financing statements in appropriate form filed in the
offices specified on Schedule 8.2, the Lien created shall constitute a



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fully perfected Lien on, and security interest in, all right, title and interest of the
Loan Parties in the domestic Proprietary Rights in which a security interest may be
perfected by filing in the United States and its territories and possessions, in each case
prior and superior in right to any other Person (other than with respect to Permitted Liens)
(it being understood that subsequent recordings in the United States Patent and Trademark
Office and the United States Copyright Office may be necessary to perfect a Lien on
registered trademarks and patents, trademark and patent applications and registered
copyrights acquired by the Loan Parties after the date hereof).




     (c) The Mortgages are effective to create in favor of the Collateral Agent, for the
ratable benefit of the Secured Parties, a legal, valid and enforceable Lien on all of the
Loan Parties’ right, title and interest in and to the Mortgaged Property thereunder and the
proceeds thereof, and when the Mortgages are filed in the offices specified on Schedule
8.2(c), the Mortgages shall constitute a fully perfected Lien on, and security interest in,
all right, title and interest of the Loan Parties in such Mortgaged Property and the
proceeds thereof, in each case prior and superior in right to any other Person, other than
with respect to the rights of Persons pursuant to Permitted Liens (including pursuant to the
terms of the Senior Notes Security Documents and the Intercreditor Agreement, the Noteholder
Liens).



          Section 8.3 Organization and Qualification. Each Loan Party (a) is duly formed or
organized and validly existing and (as of the Closing Date) in good standing, except as otherwise
indicated on Schedule 8.3, under the laws of the jurisdiction of its formation or
organization, (b) is qualified to do business as a foreign business entity and is in good standing
in the jurisdictions set forth on Schedule 8.3, which as of the Closing Date are the only
jurisdictions in which qualification is necessary in order for it to own or lease its property and
conduct its business except for any jurisdiction for which the failure to so qualify could not
reasonably be expected to have a Material Adverse Effect, and (c) has all requisite power and
authority to conduct its business and to own its property as presently conducted or owned.




          Section 8.4 Corporate Name; Prior Transactions. Except as set forth on Schedule
8.4 or as permitted by this Agreement, since the date of its organization or acquisition as a
Subsidiary of Parent, whichever time period is shorter, no Loan Party has, as of the Closing Date,
been known by or used any other corporate or fictitious name, or been a party to any merger or
consolidation, or acquired all or substantially all of the assets of any Person (other than in
connection with the Transactions). 




          Section 8.5 Subsidiaries. Schedule 8.5 is a correct and complete list, as of
the Closing Date, of the name and relationship to Parent of each and all of Parent’s Subsidiaries.
Schedule 8.5 sets forth, as of the Closing Date, a true and complete listing of each class
of authorized Capital Stock, of which all of such issued shares are validly issued, outstanding,
fully paid and non-assessable, and beneficially owned (in the case of Borrowers other than Parent)
by the Persons identified on Schedule 8.5. As of the Closing Date, all Borrowers (other
than Parent) are Wholly-Owned Subsidiaries of Parent and the Borrowers (other than Parent)
constitute all of the Subsidiaries of Parent, except as set forth in Schedule 8.5.




          Section 8.6 Financial Statements and Projections.




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     (a) Parent has delivered to the Administrative Agent, which will deliver to each Lender
(i) the audited consolidated balance sheet and related statements of income, cash flow, and
stockholders’ equity for Parent and its Subsidiaries as of December 31, 2004, and the Fiscal
Years then ended, accompanied by the report thereon of Parent’s independent certified public
accountants, (ii) the unaudited consolidated balance sheet and related statements of income,
cash flow and stockholders’ equity for Parent and its Subsidiaries as of September 30, 2005,
and the nine month period then ended, and certified by a Responsible Officer and (iii) the
unaudited consolidated balance sheet and related statements of income, cash flow and
stockholders’ equity for Parent and its Subsidiaries as of September 30, 2005, and the
Fiscal Quarters then ended, and certified by a Responsible Officer. All such financial
statements have been prepared in accordance with GAAP and fairly present in all material
respects the financial position of Parent and its Subsidiaries as at the dates thereof and
their results of operations for the periods then ended (except with respect to the financial
statements described in clauses (ii) and (iii) above, for the absence of applicable
footnotes and subject to normal year-end adjustments).




     (b) The pro forma financial information contained in the Confidential Information
Memorandum is based on assumptions which are believed by Parent on the date hereof to be
reasonable, reflect all material adjustments required to be made to give effect to the
Transactions and present fairly in all material respects on a pro forma basis the estimated
consolidated financial position of Parent and its consolidated Subsidiaries as of such date
and for such period, assuming that the Transactions had actually occurred at such date or at
the beginning of such period, as the case may be.




     (c) The Projections have been prepared in good faith based upon assumptions Parent
believes to be reasonable as of the Closing Date; it being recognized by the Lenders that
such Projections as to future events are not to be viewed as facts and that actual results
during the period or periods covered by any such Projections may differ significantly from
the projected results.



          Section 8.7 Solvency. Immediately after the consummation of the Transactions to occur
on the Closing Date and immediately following the making of each Revolving Loan and after giving
effect to the application of the proceeds thereof and the issuance of the Letters of Credit, the
Borrowers, considered as one business enterprise, are Solvent.




          Section 8.8 [Reserved].




          Section 8.9 Transaction Documents. Holdings and Parent have delivered to the
Administrative Agent a complete and correct copy of the Merger Agreement (including all schedules,
exhibits, amendments, supplements and modifications thereto). The Merger Agreement complies in all
material respects with all applicable laws.




          Section 8.10 Title to Property. As of the Closing Date, each Loan Party has good and
indefeasible title in fee simple to the Real Estate identified on Schedule 8.11 as owned by
such Loan Party. Each Loan Party has good, indefeasible, and merchantable title to all of its




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other property, free of all Liens except Permitted Liens, except for minor defects in title
that do not interfere with its ability to conduct its business as currently conducted or to utilize
such properties for their intended purposes.




          Section 8.11 Real Estate; Leases. Schedule 8.11 sets forth, as of the Closing
Date, a correct and complete list of all Real Estate owned by each Borrower, all leases and
subleases of real or personal property by each Borrower as lessee or sublessee (other than leases
of personal property as to which it is lessee or sublessee for which the value of such personal
property is less than $500,000), and all leases and subleases of real or personal property by each
Borrower as lessor or sublessor. As of the Closing Date, each of such leases and subleases is
valid and enforceable in accordance with its terms (except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws and to the effect of general principles of
equity whether applied by a court of law or equity) and is in full force and effect, and, to the
Borrowers’ knowledge, no default by any party to any such lease or sublease exists.




          Section 8.12 Proprietary Rights. Schedule 8.12 sets forth a correct and
complete list of all of each Borrower’s registered patents and trademarks material to its business
as of the Closing Date. As of the Closing Date, none of the patents and trademarks listed in
Schedule 8.12 is subject to any licensing agreement or similar arrangement except as set
forth on Schedule 8.12. The patents and trademarks described on Schedule 8.12
constitute all of the property of such type necessary to the current and anticipated future conduct
of the Borrowers’ business as of the Closing Date. To the best of each Borrower’s knowledge, no
slogan or other advertising device, product, process, method, substance, part, or other material
now employed, or now contemplated to be employed, by any Borrower infringes any rights held by any
other Person which infringement could reasonably be expected to have a Material Adverse Effect. No
claim or litigation regarding any of the foregoing is pending or threatened, and no patent,
invention, device, application, principle or any statute, law, rule, regulation, standard, or code
is pending or, to the knowledge of any Borrower, proposed, which, in either case, could reasonably
be expected to have a Material Adverse Effect.




          Section 8.13 Trade Names. All trade names or styles under which, as of the Closing
Date, any Borrower sells Inventory or creates Accounts, or to which instruments in payment of
Accounts are made payable, are listed on Schedule 8.13.




          Section 8.14 Litigation. Except as set forth on Schedule 8.14, there is no
pending, or to any Borrower’s knowledge threatened, action, suit, proceeding, or counterclaim by
any Person, or, to any Borrower’s knowledge, any investigation by any Governmental Authority, (i)
that, as of the Closing Date, involves any Loan Documents or the Transactions or (ii) as to which
an adverse determination could reasonably be expected and which, if adversely determined, could
reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.




          Section 8.15 [Reserved].




          Section 8.16 Labor Matters. Except as set forth on Schedule 8.16, as of the
Closing Date (a) there is no collective bargaining agreement or other labor contract covering
employees of any Borrower, (b) no such collective bargaining agreement or other labor contract




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is scheduled to expire during the term of this Agreement, (c) to the knowledge of the
Borrowers no union or other labor organization is seeking to organize, or to be recognized as, a
collective bargaining unit of employees of any Borrower or for any similar purpose, and (d) there
is no pending or to the knowledge of the Borrowers threatened, strike, work stoppage, material
unfair labor practice claim, or other material labor dispute against or affecting any Borrower or
its employees except as has not or could not reasonably be expected to have a Material Adverse
Effect.




          Section 8.17 Environmental Matters. Except for matters that individually or in the
aggregate could not reasonably be expected to have a Material Adverse Effect:





     (a) Holdings and each of its Subsidiaries has complied with all Environmental Laws and
no Borrower nor any of its presently owned Real Estate or presently conducted operations,
nor its previously owned Real Estate or prior operations, is subject to any enforcement
order from or liability agreement with any Governmental Authority or private Person
respecting (i) compliance with any Environmental Law or (ii) any potential liabilities and
costs or remedial action arising from the Release or threatened Release of a Contaminant.




     (b) Holdings and each of its Subsidiaries has obtained all permits necessary for its
current operations under Environmental Laws, and all such permits are in good standing and
each such Person is in compliance with all material terms and conditions of such permits.




     (c) Neither Holdings nor any of its Subsidiaries, nor to the knowledge of Holdings or
any Borrower, any of such Person’s predecessors in interest, has in violation of any
Environmental Law stored, treated, or disposed of any hazardous waste (as defined pursuant
to 40 CFR Part 261 or any equivalent Environmental Law).




     (d) Neither Holdings nor any of its Subsidiaries has received any summons, complaint,
order, or similar written notice indicating that it is not currently in compliance with, or
that any Governmental Authority is investigating its compliance with, any Environmental Laws
or that it is or may be liable to any other Person as a result of a Release or threatened
Release of a Contaminant.




     (e) None of the present or past operations of Holdings or any of its Subsidiaries, to
the knowledge of Holdings or any Borrower, is the subject of any investigation by any
Governmental Authority evaluating whether any remedial action is needed to respond to a
Release or threatened Release of a Contaminant.




     (f) There is not now, nor to the knowledge of Holdings or any Borrower, has there ever
been on or in the Real Estate of any Borrower or any of its Subsidiaries in violation of
Environmental Laws:




     (i) any underground storage tanks or surface impoundments,




     (ii) any asbestos-containing material, or



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     (iii) any polychlorinated biphenyls (PCBs) used in hydraulic oils, electrical
transformers, or other equipment.




     (g) Since December 31, 2004 or as otherwise disclosed to the Administrative Agent
pursuant to Section 7.3, none of Holdings nor any of its Subsidiaries has filed any notice
under any requirement of Environmental Law reporting a spill or accidental and unpermitted
Release or discharge of a Contaminant into the environment.




     (h) None of Holdings or any of its Subsidiaries has entered into any negotiations or
settlement agreements with any Person (including the prior owner of its property) imposing
obligations or liabilities on any such Person with respect to any remedial action in
response to the Release of a Contaminant or environmentally related claim.




     (i) None of the products manufactured, distributed, or sold by Holdings or any of its
Subsidiaries contains asbestos containing material.




     (j) No Environmental Lien has attached to the Real Estate of Holdings or any of its
Subsidiaries.



          Section 8.18 No Violation of Law. None of Holdings or any of its Subsidiaries is in
violation of any law, statute, regulation, ordinance, judgment, order, or decree applicable to it,
which violation could reasonably be expected to have a Material Adverse Effect.




          Section 8.19 [Reserved]




          Section 8.20 Pension Plans. Except as set forth on Schedule 8.20, as of the
Closing Date no Borrower maintains or contributes to any Plan. Each Borrower and each ERISA
Affiliate is in compliance with the requirements of ERISA and the regulations promulgated
thereunder with respect to each Plan, except where the failure to so comply could not reasonably be
expected to have a Material Adverse Effect. Except as set forth on Schedule 8.20, no fact
or situation that could reasonably be expected to result in a Material Adverse Effect exists in
connection with any Plan. No Borrower or ERISA Affiliate has incurred any withdrawal liability
under Title IV of ERISA in connection with a Multiemployer Plan which remains unsatisfied and which
could reasonably be expected to have a Material Adverse Effect.




          Section 8.21 Taxes. Each Borrower has filed or caused to be filed all federal and
other material Tax Returns and reports required to be filed (or appropriate extensions have been
timely filed), and has paid all federal and material other taxes, assessments, fees, and other
governmental charges levied or imposed upon them or their properties, income, or assets otherwise
due and payable except taxes, assessments, fees and charges that are being contested in good faith
by appropriate proceedings and for which such Borrower has set aside on its books adequate
reserves.




          Section 8.22 Regulated Entities. No Loan Party is an “investment company” or a
company “controlled” by an “investment company” within the meaning of the Investment Company Act of
1940. No Loan Party is a “holding company” or a “subsidiary company” of a




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“holding company” or an “affiliate” of a “holding company” or a “public utility” within the
meaning of the Public Utility Holding Company Act of 1935.




          Section 8.23 Use of Proceeds; Margin Regulations. The proceeds of the Revolving Loans
are to be used solely for the purposes specified in Section 9.26. No Borrower is engaged
in the business of buying or selling Margin Stock or extending credit for the purpose of buying or
carrying Margin Stock.




          Section 8.24 No Material Adverse Change. Since December 31, 2004, no event, change,
circumstance, effect or state of facts has occurred that, individually or in the aggregate, has had
or could reasonably be expected to have a Material Adverse Effect.




          Section 8.25 Full Disclosure. None of the representations or warranties made by any
Loan Party in the Loan Documents as of the date such representations and warranties are made or
deemed made, and none of the statements contained in any exhibit, report, statement, or certificate
furnished by or on behalf of any Loan Party in connection with the Loan Documents including the
Confidential Information Memorandum, contain any untrue statement of a material fact or omit any
material fact required to be stated therein or necessary to make the statements made therein, in
light of the circumstances under which they are made, not misleading as of the time when made or
delivered; provided, that with respect to projected financial information, Borrowers
represent only that such information was prepared in good faith based upon assumptions believed to
be reasonable at the time such projected financial information was prepared and at the time such
projected financial information was provided to the Agents (it being understood by the Agents and
the Lenders that such financial information as it relates to future events is not to be viewed as
fact and that actual results during the period or periods covered by such financial information may
differ from the projected results set forth therein).




          Section 8.26 [Reserved]




          Section 8.27 Bank Accounts. As of the Closing Date, Schedule 8.27 contains a
complete and accurate list of all bank accounts maintained by each Borrower with any bank or other
financial institution.




          Section 8.28 Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any Governmental Authority or
other Person is necessary or required in connection with the Transactions occurring on the Closing
Date except (i) for those which have been duly obtained by the Borrowers, (ii) for the filing of
financing statements and mortgages and filings with the United Stated Patent and Trademark Office
and United States Copyright Office, (iii) as may be required under the Securities Act, the Exchange
Act or the regulations thereunder, state securities or “Blue Sky” laws, (iv) for the qualification
of the Senior Notes Indenture under the Trust Indenture Act of 1939, as amended, (v) as required
for consummation of the Merger, which consent, approval, authorization or order will be obtained
prior to consummation thereof and (vi) those that, if not obtained, taken or made, could not
reasonably be expected to have a Material Adverse Effect.




          Section 8.29 Investment Property.




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     (a) Schedule 8.29 sets forth a correct and complete list of all Investment
Property owned by each Loan Party as of the Closing Date. As of the Closing Date, each Loan
Party is the legal and beneficial owner of such Investment Property, as so reflected, free
and clear of any Lien (other than Permitted Liens), and has not sold, granted any option
with respect to, assigned or transferred, or otherwise disposed of any of its rights or
interest therein.




     (b) To the extent any Loan Party is an Issuer (as defined in Section 6.2(d)) as
of the Closing Date: (i) the Issuer’s shareholders that are Loan Parties and the ownership
interest of each such shareholder are as set forth on Schedule 8.5, and each such
shareholder is the registered owner thereof on the books of the Issuer; (ii) the Issuer
acknowledges the Collateral Agent’s Lien; (iii) to the extent required to perfect the
Collateral Agent’s Liens, such security interest, collateral assignment, lien, and pledge in
favor of the Collateral Agent has been registered on the books of the Issuer for such
purpose as of the date hereof; and (iv) as of the Closing Date the Issuer is not aware of
any liens, restrictions, or adverse claims which exist on any such Investment Property other
than the continuing security interest, collateral assignment, lien, and pledge in favor of
(1) the Collateral Agent granted pursuant to the terms of Section 6.1 and (2) the
Noteholder Collateral Agent.



          Section 8.30 Common Enterprise. The successful operation and condition of each of the
Loan Parties is dependent on the continued successful performance of the functions of the group of
Loan Parties as a whole. Each of the Loan Parties expects to derive benefit (and its board of
directors or other governing body has determined that it may reasonably be expected to derive
benefit), directly and indirectly, from successful operations of Parent and each of the other Loan
Parties. Each Loan Party expects to derive benefit (and the boards of directors or other governing
body of each such Loan Party have determined that it may reasonably be expected to derive benefit),
directly and indirectly, from the credit extended by the Lenders to the Loan Parties hereunder,
both in their separate capacities and as members of the group of companies. Each Loan Party has
determined that execution, delivery, and performance of this Agreement and any other Loan Documents
to be executed by such Loan Party are within its corporate purpose, will be of direct and indirect
benefit to such Loan Party, and are in its best interest.




ARTICLE 9




AFFIRMATIVE AND NEGATIVE COVENANTS




     Holdings and each Borrower covenants to the Agents, the Letter of Credit Issuer and each
Lender that so long as any of the Obligations remain outstanding (other than contingent indemnity
and expense reimbursement obligations for which no claim has been made) or this Agreement is in
effect unless waived pursuant to Section 13.2, Holdings and each Borrower will keep and
perform each of the following covenants:



          Section 9.1 Taxes and Other Obligations. Except as otherwise permitted by the terms
of this Agreement, Holdings and each Borrower shall, and shall cause each Subsidiary to, (a) file
when due all material Tax Returns and other reports which it is required to file and




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(b) pay, or provide for the payment, when due, of all material taxes, fees, assessments, and
other governmental charges against it or upon its property, income, and franchises, make all
required withholding and other material tax deposits, and establish adequate reserves for the
payment of all such items, and provide to the Administrative Agent and the Lenders, upon request,
satisfactory evidence of its timely compliance with the foregoing; provided,
however, Holdings or such Borrower need not pay any tax, fee, assessment, or governmental
charge, that (x) it is contesting in good faith by appropriate proceedings diligently pursued and
for which such Borrower has established proper reserves as provided in accordance with GAAP and (y)
no Lien (other than a Permitted Lien) results from such non-payment and, in the case of Mortgaged
Property, there is no risk of forfeiture of such property.




          Section 9.2 Existence and Good Standing. Except as expressly permitted by Section
9.9, Holdings and each Borrower shall, and shall cause each Subsidiary to, maintain its
existence and its qualification and good standing in all jurisdictions in which the failure to
maintain such existence and qualification or good standing could reasonably be expected to have a
Material Adverse Effect.




          Section 9.3 Compliance with Law and Agreements; Maintenance of Licenses. Holdings and
each Borrower shall, and shall cause each Subsidiary to, (i) comply with all Requirements of Law of
any Governmental Authority having jurisdiction over it or its business (including the Federal Fair
Labor Standards Act and all Environmental Laws) except for any noncompliance which could not
reasonably be expected to have a Material Adverse Effect, (ii) obtain and maintain all licenses,
permits, franchises, and governmental authorizations necessary to own its property and, except as
could not reasonably be expected to have a Material Adverse Effect, to conduct its business as
conducted on the Closing Date and (iii) refrain from modifying, amending, or altering its
certificate or articles of incorporation (or other similar constituent documents) other than in a
manner which does not adversely affect the rights of the Lenders or the Agents.




          Section 9.4 Maintenance of Property. Except as otherwise expressly permitted
hereunder, each Borrower shall, and shall cause each Subsidiary to, maintain all of its property
necessary and useful in the conduct of its business, in reasonable operating condition and repair,
ordinary wear and tear excepted.




          Section 9.5 Insurance.





     (a) Holdings and each Borrower shall, and shall cause each Subsidiary to, maintain with
financially sound and reputable insurers insurance that is reasonably consistent with
prudent industry practice or otherwise acceptable to the Agents in their reasonable
discretion.




     (b) For each of the insurance policies issued as required by this Section 9.5
with respect to Collateral, Holdings and each Borrower shall cause the Collateral Agent, for
the benefit of the Secured Parties, to be named as secured party or mortgagee and loss payee
or additional insured, as applicable, in a manner reasonably acceptable to the Collateral
Agent. Each policy of insurance shall contain a clause or endorsement requiring the insurer
to give not less than thirty (30) days prior written notice to the



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Collateral Agent in the event of cancellation of such policy for any reason whatsoever
(other than for non-payment of premium, in which case ten (10) days notice shall be given).
All premiums for such insurance shall be paid by the Borrowers when due, and certificates of
insurance of the policies shall be delivered to the Collateral Agent.




     (c) Parent shall promptly notify the Agents of any loss, damage, or destruction to the
Collateral in excess of (A) $5,000,000 if covered by insurance or (B) $1,000,000 if not
covered by insurance. During the existence of an Event of Default subject to the
Intercreditor Agreement, the Collateral Agent is hereby authorized to directly collect all
insurance proceeds in respect of Collateral and to remit such proceeds to the Administrative
Agent to be applied to the reduction of the Obligations in the manner provided for in
Section 4.6.



          Section 9.6 Condemnation. Each Borrower shall, promptly upon learning of the
institution of any proceeding for the condemnation or other taking of any of its property with a
Fair Market Value in excess of $1,000,000, notify the Agents of the pendency of such proceeding.




          Section 9.7 Environmental Laws.





     (a) Holdings and each Borrower shall, and shall cause each Subsidiary to, conduct its
business in compliance with all Environmental Laws applicable to it, including those
relating to the generation, handling, use, storage, and disposal of any Contaminant other
than such noncompliance which could not reasonably be expected to have a Material Adverse
Effect.




     (b) For any environmental matters that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect, and without limiting the
generality of the foregoing, (i) Holdings and the Borrowers shall, upon the Administrative
Agent’s request, submit to the Administrative Agent and the Lenders an update of the status
of each environmental compliance or liability issue concerning Holdings or any Borrower or
any of their respective properties or operations (whether past or present); and (ii) the
Administrative Agent or any Lender may request copies of technical reports prepared by
Holdings or any Borrower and its communications with any Governmental Authority to determine
whether Holdings or such Borrower is proceeding reasonably to correct, cure, or contest in
good faith any alleged non-compliance or environmental liability.



          Section 9.8 [Reserved].




          Section 9.9 Mergers, Consolidations, Sales, Acquisitions. Neither Holdings nor any
Borrower shall, nor shall they permit any Subsidiary to, merge, amalgamate or consolidate, or
transfer, sell, assign, lease (as lessor), or otherwise dispose of all or any part of its property,
or wind up, liquidate or dissolve, except for sales or other dispositions of Excluded Assets;
provided that, notwithstanding the foregoing or any other provision of this Agreement:





     (a) a Borrower or a Subsidiary, other than Parent, may wind-up, dissolve, or liquidate
or sell or otherwise dispose of any of its Property if (i) its property is transferred



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to Parent, another Borrower or another Subsidiary (provided that if the
transferor was a Loan Party, the transferee must also be a Loan Party) and (ii) the Person
acquiring such property complies with its obligations under Section 6.2 and
Section 9.27 simultaneously with such acquisition;




     (b) a Borrower or a Subsidiary, other than Parent, may merge or consolidate with
Parent, another Borrower or another Subsidiary (provided Parent is the survivor of
any such merger or consolidation to which it is a party and a Borrower is the survivor of
any such merger or consolidation to which a Borrower is party);




     (c) as long as no Default or Event of Default exists or would result therefrom, a
Borrower or a Subsidiary may make Permitted Acquisitions (and mergers or consolidations in
connection therewith);




     (d) a Borrower or a Subsidiary may enter into sales or other dispositions of its
property consisting of:




     (i) Inventory sold or disposed of in the ordinary course of business;




     (ii) as long as no Default or Event of Default exists or would result
therefrom, sales or other dispositions permitted under Section 9.19;




     (iii) investments permitted by clauses (b) through (g) of the definition of
Restricted Investments sold or disposed of in the ordinary course of business;




     (iv) as long as no Default or Event of Default exists or would result
therefrom, sales of accounts receivable in an aggregate amount not to exceed
$4,000,000 in any calendar year; and




     (v) as long as no Default or Event of Default exists or would result therefrom,
sales or other dispositions of Collateral in an aggregate amount not to exceed
$7,500,000 in any calendar year, with the amount not used in any calendar year
carried over into subsequent calendar years;




     (e) Holdings or any Borrower may make any Distribution or effect any other transaction,
in each case permitted by Section 9.10;




     (f) a Loan Party may sell or dispose of assets to any other Loan Party;




     (g) a Borrower or a Subsidiary may swap assets in exchange for other assets of
comparable or greater value or usefulness to the business of Parent and the Subsidiaries as
a whole; provided that (i) at least 90% of the consideration received by the transferor
consists of assets (other than cash) that will be used in a business or business activity
permitted hereunder, (ii) the aggregate Fair Market Value of the assets being transferred by
the Borrower or such Subsidiary is not greater than the aggregate Fair Market Value of the
assets received by Parent or such Subsidiary in such exchange and (iii) such Fair Market
Value of the property or assets being transferred or received by Parent or such Subsidiary
shall be determined in good faith by the management of Parent;



Loan And Security Agreement — Page 103




 









 




provided that in the event of a swap with a Fair Market Value in excess of
$5,000,000, the Administrative Agent shall have received a certificate from a Responsible
Officer of Parent as to such Fair Market Value;





     (h) a Borrower or a Subsidiary may sell or otherwise dispose of assets which, in the
reasonable opinion of such Person, are surplus, worn-out, obsolete, uneconomic or no longer
useful in the conduct of such Person’s business; and




     (i) a Borrower or a Subsidiary may dispose of any other assets provided that the
proceeds thereof are used (1) to acquire, maintain, develop, construct, improve, upgrade or
repair or replace assets useful in the business of any Borrower or (2) to repay outstanding
Revolving Loans; provided that the aggregate gross proceeds (including non-cash
proceeds) of any assets sold in reliance on this paragraph (i) in any Fiscal Year shall not
exceed 5% of Total Assets as of the last day of the preceding Fiscal Year.


The inclusion of proceeds in the definition of Collateral shall not be deemed to constitute an
Agent’s or any Lender’s consent to any sale or other disposition of the Collateral except as
expressly permitted herein.




          Section 9.10 Distributions; Capital Change; Restricted Investments. Neither Holdings
nor any Borrower shall, nor shall they permit any Subsidiary to,





     (a) directly or indirectly declare or make any Distribution, except,




     (i) Distributions by a Loan Party to another Loan Party;




     (ii) provided that both before and after giving effect to the proposed
Distribution the Fixed Coverage Charge Ratio is at least 1.0 to 1.0, and the
Availability is greater than or equal to $50,000,000, Distributions by Parent or
Holdings to any direct or indirect parent of Parent to permit such Person to make
Distributions (A) in an aggregate amount not to exceed $25,000,000, (B) in an
additional aggregate amount not to exceed the sum of (1) $5,000,000 for each full
Fiscal Quarter during the term of this Agreement (with any amount not used in any
Fiscal Quarter being permitted to be used in succeeding Fiscal Quarters) plus (2) an
amount equal to 50% of Parent’s cumulative Consolidated Net Income (or, if
Consolidated Net Income is negative, minus 100% thereof), taken as one accounting
period, since the Closing Date, (C) in an additional aggregate amount not to exceed
100% of the aggregate net cash proceeds received by Parent after the Closing Date
from the issue or sale of Capital Stock of Parent (excluding Disqualified Stock and
Permitted Cure Securities), or upon exercise of warrants or options (other than an
issuance or sale to a Subsidiary of Parent or an employee stock ownership plan or
trust established by Parent or any of its Subsidiaries), and (D) in an additional
aggregate amount not to exceed an amount equal to 100% of the aggregate amount of
cash contributions to the capital of Parent received after the Closing Date (other
than Disqualified Stock and Permitted Cure Securities); and provided that before and
after giving effect to any of the foregoing Distributions, no Default or Event of
Default exists or will occur;



Loan And Security Agreement — Page 104




 









 






     (iii) so long as no Default or Event of Default shall then exist or result
therefrom, the repurchase, retirement or other acquisition for value of Capital
Stock of Parent or any direct or indirect parent of Parent held by any future,
present or former employee, director or consultant of Parent, or any direct or
indirect parent of Parent or any Subsidiary of Parent pursuant to any management
equity plan or stock option plan or any other management or employee benefit plan or
other agreement or arrangement; provided, however, that the
aggregate amounts paid under this clause (iii) do not exceed $10,000,000 in any
calendar year (with unused amounts in any calendar year being permitted to be
carried over for the next succeeding calendar year); provided further,
however, that such amount in any calendar year may be increased by an amount
not to exceed: (A) the cash proceeds received by Parent or any Subsidiary from the
sale of Capital Stock of Parent or any direct or indirect parent of Parent (to the
extent contributed to Parent) to members of management, directors or consultants of
Parent and its Subsidiaries or any direct or indirect parent of Parent that occurs
after the Closing Date (provided, however, that the amount of such
cash proceeds utilized for any such repurchase, retirement or other acquisition will
not increase the amount available for Distributions under clause (a)(ii) above);
plus (B) the cash proceeds of key man life insurance policies received by
Parent or any direct or indirect parent of Parent (to the extent contributed to
Parent) or its Subsidiaries after the Closing Date (provided,
however, that Parent may elect to apply all or any portion of the aggregate
increase contemplated by clauses (A) and (B) above in any calendar year and, to the
extent any payment described under this clause (iii) is made by delivery of
Indebtedness and not in cash, such payment shall be deemed to occur only when, and
to the extent, the obligor on such Indebtedness makes payments with respect to such
Indebtedness);




     (iv) repurchases of Capital Stock deemed to occur upon exercise of stock
options or warrants if such Capital Stock represents a portion of the exercise price
of such options or warrants;




     (v) any Subsidiary of Parent that is not a Wholly-Owned Subsidiary may pay cash
Distributions to its shareholders or partners generally, so long as Parent or its
respective Subsidiary which owns the Capital Stock in the Subsidiary paying such
Distributions receives at least its proportionate share thereof (based upon its
relative holdings of Capital Stock in the Subsidiary paying such Distributions and
taking into account the relative preferences, if any, of the various classes of
Capital Stock in such Subsidiary or the terms of any agreements applicable thereto);




     (vi) Holdings or Parent may pay Distributions with respect to its common stock
or ordinary shares payable solely in additional common stock or ordinary shares;




     (vii) Distributions by Parent or Holdings in amounts equal to the amounts
required for any direct or indirect parent of Parent to pay fees and expenses
(including franchise or similar taxes) required to maintain its existence,



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customary salary, bonus and other benefits payable to, and indemnity provided
on behalf of, officers and employees of any direct or indirect parent of Parent, and
general corporate overhead expenses of any direct or indirect parent of Parent, in
each case to the extent such fees, expenses, salaries, bonuses, benefits and
indemnities are attributable to the ownership or operation of Parent and its
Subsidiaries; provided however, that any such Distributions or other
amounts shall not exceed $1,000,000 per year and shall be treated as operating
expenses of Parent for purposes of determining Consolidated Net Income of Parent to
the extent that the amounts payable by such direct or indirect parent would be
treated as operating expenses if incurred by Parent;




     (viii) Distributions made on the Closing Date to effect the Transactions;




     (ix) Distribution of shares of Capital Stock of, or Indebtedness owed to Parent
or a Subsidiary by, Unrestricted Subsidiaries;




     (x) Distributions to any direct or indirect parent company of Parent that files
a consolidated U.S. federal tax return that includes Parent and its Subsidiaries in
an amount not to exceed the amount that Parent and its Subsidiaries would have been
required to pay in respect of federal, state or local taxes (as the case may be) in
respect of such year if Parent and its Subsidiaries paid such taxes directly as a
stand-alone taxpayer (or stand-alone group); and




     (xi) payments or Distributions by Holdings, Parent or any Subsidiary to allow
such entity to make payments of cash, in lieu of the issuance of fractional shares
upon the exercise of warrants or upon the conversion or exchange of Capital Stock of
any such Person or of any direct or indirect parent of Parent; provided that
the aggregate amount of such Distributions does not exceed $2,500,000.


Any Distribution permitted by this clause (a) may be made directly by Parent or Holdings for the
purposes identified therein or may be made by Parent to any direct or indirect Parent of Parent in
order to permit such Person to make the payments identified therein.





     (b) make any Restricted Investment.



          Section 9.11 [Reserved]




          Section 9.12 [Reserved]




          Section 9.13 Indebtedness. Neither Holdings nor any Borrower shall, nor shall they
permit any Subsidiary to, incur or maintain any Indebtedness, other than:





     (a) the Obligations;




     (b) other Indebtedness existing on the Closing Date and reflected in the Financial
Statements described in Section 8.6 and set forth on Schedule 9.13;



Loan And Security Agreement — Page 106




 









 






     (c) Indebtedness constituting purchase money Indebtedness (including, without
limitation, obligations under Capital Leases), incurred after the Closing Date in an
aggregate amount at any time outstanding not to exceed $50,000,000;




     (d) Indebtedness incurred under sale and leaseback transactions permitted under Section
9.19;




     (e) Indebtedness (i) secured by Real Estate and Equipment and/or proceeds thereof or
(ii) consisting of Senior Secured Notes or Other Pari Passu Lien Obligations (as defined in
the Senior Secured Indenture) in an aggregate amount not to exceed $50,000,000;




     (f) Permitted Subordinated Debt;




     (g) Indebtedness in respect of the Senior Secured Notes in an aggregate principal
amount not to exceed $300,000,000;




     (h) [Reserved];




     (i) Indebtedness of Holdings, Parent or any Subsidiary of Parent to Holdings, Parent or
any other Subsidiary of Parent;




     (j) Indebtedness in respect of performance, bid, appeal and surety bonds, completion
Guaranties and similar obligations provided by Parent or any Subsidiary of Parent, including
those to secure health, safety and environmental obligations in the ordinary course of
business;




     (k) Indebtedness arising from the honoring by a bank or other financial institution of
a check, draft or similar instrument drawn against insufficient funds or other cash
management services in the ordinary course of business; provided, that such
Indebtedness is extinguished within five business days of its incurrence;




     (l) Any Guaranty by any Loan Party of Indebtedness of Parent or any other Loan Party so
long as the incurrence of such Indebtedness is permitted under the terms of this Agreement;




     (m) Obligations in respect of Hedge Agreements permitted under clause (g) of the
definition of “Restricted Investments”;




     (n) Indebtedness owed to (including obligations in respect of letters of credit or bank
Guaranties or similar instruments for the benefit of) any person providing workers’
compensation, health, disability or other employee benefits or property, casualty or
liability insurance to Holdings or any Subsidiary pursuant to reimbursement or
indemnification obligations to such person; provided that upon the incurrence of
Indebtedness with respect to reimbursement obligations regarding workers’ compensation
claims, such obligations are reimbursed not later than 30 days following such incurrence;



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     (o) Indebtedness consisting of (x) the financing of insurance premiums or (y)
take-or-pay obligation contained in supply agreements, in each case, in the ordinary course
of business;




     (p) Indebtedness arising from agreements of Holdings or any Subsidiary providing for an
indemnification, adjustment of purchase price or similar obligations, in each case, incurred
or assumed in connection with the acquisition or disposition of any business, assets or a
Subsidiary, other than Guarantees of Indebtedness incurred by an Person acquiring all any
portion of such business, assets or Subsidiary for the purpose of financing such
acquisition;




     (q) Indebtedness incurred by Subsidiaries of Parent that are not Loan Parties in an
aggregate amount not to exceed $25,000,000 at any time outstanding;




     (r) In addition to the foregoing, unsecured Indebtedness in the aggregate principal
amount not to exceed $60,000,000 at any time outstanding; and




     (s) Permitted Refinancing Indebtedness in respect of any of the foregoing.



          Section 9.14 Prepayment of Indebtedness and Agreements. 





     (a) Neither Holdings nor any Borrower shall, nor shall they permit any Subsidiary to,
make any distribution, whether in cash, property, securities or a combination thereof, other
than regular scheduled payments of principal and interest as and when due (to the extent not
prohibited by applicable subordination provisions), in respect of, or pay, or commit to pay,
or directly or indirectly redeem, repurchase, retire or otherwise acquire for
consideration, or set apart any sum for the aforesaid purposes, any Senior Secured Notes or
Permitted Subordinated Debt or pay in cash any amount in respect of any such Indebtedness
that may at the obligor’s option be paid in kind or in other securities, provided
that the provisions of this clause (a) shall not apply (x) for so long as no Default is in
existence or would result therefrom, and so long as before and after giving effect to such
prepayment, the Availability is greater than or equal to $50,000,000 and the Fixed Charge
Coverage Ratio is greater than or equal to 1.0 to 1.0, (y) to any prepayment of such
Indebtedness with the proceeds of Permitted Refinancing Indebtedness or the proceeds of the
issuance of Capital Stock, or of a contribution to capital, of Parent or (z) to the extent
such a prepayment is required under the Senior Secured Indenture with the proceeds of an
asset sale otherwise permitted hereunder.




     (b) Neither Holdings nor any Borrower shall permit any amendment or modification of any
provision of any Permitted Subordinated Debt in excess of $20,000,000 or any Permitted
Refinancing Indebtedness thereof in a manner that could reasonably be expected to be
materially adverse to the interests of the Lenders.



          Section 9.15 Transactions with Affiliates. Except as set forth below, none of
Holdings or the Borrowers shall, nor shall they permit any Subsidiary to, sell, transfer,
distribute, or pay any money or property, including, but not limited to, any fees or expenses of
any nature (including, but not limited to, any fees or expenses for management services), to any
Affiliate that is not a Loan Party, or lend or advance money or property to any Affiliate that is
not a Loan




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Party, or invest in (by capital contribution or otherwise) or purchase or repurchase any stock
or indebtedness, or any property, of any Affiliate that is not a Loan Party, or become liable on
any Guaranty of the indebtedness, dividends, or other obligations of any Affiliate that is not a
Loan Party, in each case on terms and conditions materially less favorable to Holdings, such
Borrower or such Subsidiary than would reasonably be expected to be obtainable by Holdings, such
Borrower or such Subsidiary in a comparable arms-length transaction with a Person not an Affiliate
of such Loan Party; provided that the following transactions shall in any event be
permitted:





     (a) the Transactions;




     (b) other transactions expressly permitted hereunder;




     (c) the payment, on a quarterly basis, of management and consulting fees to the Equity
Investors in an aggregate amount not to exceed in any Fiscal Year the greater of (A)
$3,000,000 and (B) 3.0% of Adjusted EBITDA for the immediately preceding Fiscal Year (plus
unpaid amounts deferred from a prior Fiscal Year); provided, however no
payment may be made under this clause (c) unless at the time thereof and after giving effect
thereto, (i) no Default or Event of Default has occurred and is continuing, (ii)
Availability would exceed $25,000,000 and (iii) to the extent the aggregate payments made
under this clause (c) would exceed $3,000,000 in any Fiscal Year (including payments made in
respect of a prior Fiscal Year’s management or consulting fee), Availability would exceed
$40,000,000;




     (d) the payment of reasonable and customary fees to, and indemnity provided on behalf
of, officers, directors, employees or consultants of Holdings and its Subsidiaries in the
ordinary course of business;




     (e) Holdings and its Subsidiaries may enter into employment arrangements and other
compensation arrangements with respect to the procurement of services with their respective
officers and employees in the ordinary course of business;




     (f) the reimbursement of the Equity Investors for their reasonable out-of-pocket
expenses incurred in connection with performing management services to Holdings and its
Subsidiaries;




     (g) the payment to the Equity Investors of merger advisory fees for each Permitted
Acquisition or asset sale so long as (A) such payment is approved by a majority of the Board
of Directors of Holdings or the applicable Borrower in good faith and (B) such payment does
not exceed, in connection with any such transactions 2.0% of the aggregate value of such
transaction;




     (h) any purchase by the Equity Investors or any Affiliate of the Equity Investors of
Capital Stock of Holdings or Parent or any contribution by Holdings to or purchase of the
Capital Stock of Parent;



Loan And Security Agreement — Page 109




 









 






     (i) payments or loans (or cancellation of loans) to employees or consultants that are
(A) approved by the Board of Directors of Holdings or Parent, (B) made in compliance with
applicable law and (C) otherwise permitted under this Agreement;




     (j) transactions with Subsidiaries or joint ventures for the purchase or sale of goods,
products, parts and services entered into in the ordinary course of business;




     (k) the payment of all fees and expenses related to the Transactions, including fees to
the Equity Investors;




     (l) the issuance, sale or transfer of Capital Stock of Parent and capital contributions
to Parent;




     (m) any transaction in respect of which Holdings or Parent delivers to the
Administrative Agent (for delivery to the Lenders) a letter addressed to the Board of
Directors of Holdings or Parent from an accounting, appraisal or investment banking firm
reasonably satisfactory to the Administrative Agent, which letter states that such
transaction is on terms that are no less favorable to Holdings, Parent or such Subsidiary,
as applicable, than would be obtainable in a comparable arm’s length transaction with a
Person that is not an Affiliate;




     (n) the existence of, or the performance under the terms of, any agreement or
instrument in existence on the Closing Date and listed on Schedule 9.15, and any
amendment thereto that is not materially adverse to the Lenders; and




     (o) the entering into of any tax sharing agreement or arrangement and any payments
permitted by Section 9.10.



          Section 9.16 Restrictive Agreements. Neither Holdings nor any Borrower shall, and
they shall not permit any Subsidiary to, enter into, incur or permit to exist any agreement or
other arrangement that prohibits, restricts or imposes any material condition upon the ability of
any Borrower or Subsidiary to pay dividends or other distributions with respect to any of its
Capital Stock or to make or repay loans or advances to the Borrower or any other Subsidiary or to
guarantee Indebtedness of the Borrower or any other Subsidiary; provided that the foregoing
shall not apply to





     (a) restrictions and conditions imposed by law, regulation or order or by any Loan
Document;




     (b) customary restrictions and conditions contained in agreements relating to the sale
of a Borrower or a Subsidiary pending such sale, provided such restrictions and conditions
apply only to the Subsidiary that is to be sold and such sale is permitted hereunder;




     (c) the restrictions existing on the date hereof including in respect of Indebtedness
existing on the date hereof (including the Senior Secured Notes) or contained in any
agreements related to any Permitted Refinancing Indebtedness incurred



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to Refinance any Indebtedness existing on the Closing Date that does not expand the
scope of any such encumbrance or restriction;




     (d) customary restrictions and conditions contained in the documents relating to any
Lien, so long as such Lien is permitted under Section 9.18 and such restrictions or
conditions relate only to the specific asset subject to such Lien and are not created for
purposes of avoiding the restrictions imposed by this Section 9.16;




     (e) restrictions applicable to any Subsidiary existing at the time such Person becomes
a Subsidiary (so long as such agreement was not entered into in contemplation of such Person
becoming a Subsidiary)




     (f) restrictions on the transfer of any asset pending the close of the sale of such
asset, so long as such sale is permitted under this Agreement




     (g) any restriction in connection with the creation or incurrence of any secured
Indebtedness permitted under this Agreement (provided, that such restriction shall apply
only to the property or assets subject to the Lien securing such Indebtedness);




     (h) customary provisions in joint venture agreements and other similar agreements
applicable to joint ventures;




     (i) customary provisions (1) contained in leases or licenses of intellectual property
and other similar agreements entered into in the ordinary course of business, (2)
restricting subletting or assigning of any lease governing a leasehold interest and (3)
restricting assignment of any agreement entered into in the ordinary course of business;




     (j) customary restriction on cash or other deposits or net worth imposed by customers
under contracts entered into in the ordinary course of business;




     (k) any restriction or encumbrance with respect to a Subsidiary imposed pursuant to an
agreement which has been entered into for the sale or disposition of all or substantially
all of the Capital Stock or assets of such Subsidiary, so long as such sale or disposition
is permitted under this Agreement; and




     (l) restrictions pursuant to purchase money obligations for property acquired or
Capital Leases that impose restrictions on the property so acquired (provided, that such
restriction shall apply only to the property so acquired).



          Section 9.17 Business Conducted. Holdings shall not engage in any business activities
or have any assets or liabilities other than (i) its ownership of the Capital Stock of Parent and
liabilities incidental thereto, (ii) performance of its obligations under and in connection with
the Loan Documents and the Senior Secured Notes, (iii) actions incidental to the consummation of
the Transactions, (iv) actions in connection with the incurrence of Indebtedness and Guarantees
expressly permitted hereunder, (v) actions required to maintain its existence and other activities,
liabilities and agreements typical of a holding company that does not itself have any business or
operations and (vi) the issuance of Capital Stock other than Disqualified Stock (unless expressly
permitted hereunder). The Borrowers shall not engage




Loan And Security Agreement — Page 111




 









 




directly or indirectly, in any line of business other than the businesses in which the
Borrowers are engaged on the Closing Date and any business activities that are substantially
similar thereto, related, or incidental thereto or a reasonable extension, development or expansion
thereto.




          Section 9.18 Liens. Neither Holdings nor any Borrower shall, nor shall they permit
any Subsidiary to, create, incur, assume, or permit to exist any Lien on any property other than
Excluded Assets now owned or hereafter acquired by it, except Permitted Liens.




          Section 9.19 Sale and Leaseback Transactions. Neither Holdings nor any Borrower
shall, nor shall they permit any Subsidiary to, directly or indirectly, enter into any arrangement
with any Person (other than any Loan Party) providing for it to lease or rent property that it has
sold or will sell or otherwise transfer to such other Person; provided that, any Borrower
or any Subsidiary may at any time enter into any such arrangement (i) consummated within 180 days
following the acquisition of such property or (ii) in all other cases, so long as the aggregate net
book value of all property sold by such Person in connection with all such other arrangements does
not exceed $30,000,000.




          Section 9.20 New Subsidiaries. Any Borrower which creates or acquires a Person will
designate such Person as an Unrestricted Subsidiary or a Subsidiary pursuant to the terms of this
Agreement, and will give written notice to the Administrative Agent at least ten (10) days after
any designation of a Subsidiary. Promptly upon creation or acquisition of any domestic Subsidiary
of a Borrower (including any Subsidiary acquired pursuant to Section 9.9), such Borrower
shall cause such Subsidiary to become a Guarantor hereunder.




          Section 9.21 Fiscal Year. Parent shall not change the last day of its Fiscal Year
without prior notice to the Administrative Agent given concurrently with any required notice to the
Securities and Exchange Commission.




          Section 9.22 [Reserved].




          Section 9.23 [Reserved].




          Section 9.24 Minimum Availability. If at the close of business on any day
Availability is less than $45,000,000, Parent must maintain a Fixed Charge Coverage Ratio of not
less than 1.0 to 1.0 until such time as the Availability is equal to or greater than $45,000,000
for 10 consecutive days. For purposes of this testing, (i) the Fixed Charge Coverage Ratio will be
computed based upon the information available as of the last day of the Fiscal Period ending
immediately prior to the Fiscal Period in which Availability becomes less than $45,000,000, and
(ii) the Availability measurement will be continually tested as of the close of business each day
so that the Fixed Charge Coverage Ratio may apply (or not apply) multiple times within any
particular Fiscal Period. Additionally, for purposes of this Section 9.24, when
calculating the Availability, Availability for a non-Business Day shall be Availability as of the
immediately preceding Business Day.




          Section 9.25 Margin Stock. The Borrowers shall not use any portion of Revolving Loan
proceeds, directly or indirectly, (i) to buy or carry any Margin Stock, (ii) to repay or otherwise
refinance indebtedness of the Borrowers or others incurred to buy or carry any Margin Stock, (iii)
to extend credit for the purpose of buying or carrying any Margin Stock,




Loan And Security Agreement — Page 112




 









 




or (iv) to acquire any security in any transaction that is subject to Section 13 or 14 of the
Exchange Act.




          Section 9.26 Use of Proceeds. The Borrowers shall use the proceeds of the Revolving
Loans (a) on the Closing Date, together with the proceeds of the Senior Secured Notes and the
Equity Contribution, (i) to repay all amounts due or outstanding under the Existing Credit
Facility, (ii) to pay the Merger Consideration and (iii) to pay fees and expenses incurred in
connection with the Transactions (with the proceeds of the Revolving Loans being used to refinance
the Existing Debt Facility and to pay related fees and expenses before being used for any other
purpose), and (b) after the Closing Date, for general corporate purposes, including Permitted
Acquisitions. The Borrowers shall request the issuance of Letters of Credit solely to support
payment obligations incurred in the ordinary course of business by the Borrowers.




          Section 9.27 Further Assurances. Holdings and the Borrowers shall execute and
deliver, or cause to be executed and delivered, to the Agents and/or the Lenders such documents and
agreements, and shall take or cause to be taken such actions, as an Agent and/or the Majority
Lenders may, from time to time, reasonably request to carry out the terms and conditions of this
Agreement and the other Loan Documents. In addition, from time to time, the Borrowers will, at
their cost and expense, promptly secure the Obligations by pledging or creating, or causing to be
pledged or created, perfected security interests with respect to such of its assets and properties
as an Agent or the Majority Lenders shall designate (other than Excluded Assets). Subject to the
Intercreditor Agreement, such security interests and Liens will be created under security
agreements, mortgages, deeds of trust and other instruments and documents in form and substance
reasonably satisfactory to the Collateral Agent, and the Borrowers shall deliver or cause to be
delivered to the Lenders all such instruments and documents (including legal opinions, title
insurance policies and lien searches) as the Collateral Agent shall reasonably request to evidence
compliance with this Section 9.27.




          Section 9.28 Bank as Depository. Each Borrower shall maintain its master collection
and operating accounts with a Bank, and shall utilize a Bank as its principal depository bank,
including for the maintenance of administrative, cash management, collection activity, and other
deposit accounts for the conduct of its business and the business of the other Loan Parties (it
being understood and agreed, however, that (i) each of the bank accounts included on Schedule
8.27 and the uses of such accounts shall be permitted hereunder and (ii) the Borrowers may
maintain other bank accounts not with a Bank with aggregate balances of not more than $250,000
outstanding at any time).




ARTICLE 10




CONDITIONS OF LENDING




          Section 10.1 Conditions Precedent to Making of Revolving Loans on the Closing Date.
The obligation of the Lenders to make the initial Revolving Loans on the Closing Date, and the
obligation of the Letter of Credit Issuer to issue any Letter of Credit on the Closing Date, are
subject to the following conditions precedent having been satisfied:




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     (a) The Agents shall have received each of the following documents, all of which shall
be reasonably satisfactory in form and substance to the Agents and the Lenders:




     (i) certified copies of the certificate of incorporation, certificate of
limited partnership, or comparable organizational document of each of Holdings and
the Borrowers, with all amendments, if any, certified by the appropriate
Governmental Authority, and the bylaws, regulations, operating agreement, or similar
governing document of Holdings and each Borrower, in each case certified by the
corporate secretary, general partner, or comparable authorized representative of
Holdings or such Borrower, as being true and correct and in effect on the Closing
Date;




     (ii) certificates of incumbency and specimen signatures with respect to each
Person authorized to execute and deliver this Agreement and the other Loan Documents
on behalf of Holdings and each Borrower and each other Person executing any
document, certificate, or instrument to be delivered in connection with this
Agreement and the other Loan Documents and, in the case of each Borrower, to request
Borrowings and the issuance of Letters of Credit;




     (iii) a certificate evidencing the existence of and good standing of each Loan
Party in the jurisdiction of its organization;




     (iv) a certificate from a financial officer of Parent or from an independent
investment bank or valuation firm acceptable to the Administrative Agent in form and
substance reasonably satisfactory to Agents, certifying that Holdings and its
Subsidiaries, on a consolidated basis after giving effect to the consummation of the
Transactions occurring on the Closing Date, are Solvent;




     (v) certified copies of all action taken by each Loan Party to authorize the
execution, delivery, and performance of this Agreement, the other Loan Documents,
and the Borrowings and the issuance of Letters of Credit;




     (vi) a certificate of each Borrower signed by a Responsible Officer:




     (A) stating that all of the representations and warranties made or
deemed to be made under this Agreement are true and correct in all material
respects as of the Closing Date (or if made with respect to another date, as
of such other date), after giving effect to the Revolving Loans to be made
at such time and the application of the proceeds thereof and the issuance of
any Letter(s) of Credit at such time,




     (B) stating that no Default or Event of Default exists,




     (C) specifying the account of the Borrowers to which the Administrative
Agent is authorized to transfer the proceeds of the Revolving Loans, as
required by Section 2.2(c); and



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     (vii) with respect to any Letter of Credit to be issued on the Closing Date,
all documentation required by Section 2.3, duly executed;




     (viii) a Borrowing Base Certificate effective as of the Business Day preceding
the day such initial Revolving Loans are to be funded or any such Letter of Credit
is to be issued;




     (ix) to the extent requested by the Agents and to the extent Holdings or the
Borrowers are able, using commercially reasonable efforts, to obtain such agreements
and waivers, a landlord’s or mortgagee’s waiver and consent agreement, in form and
substance reasonably acceptable to the Collateral Agent, duly executed on behalf of
each landlord or mortgagee, as the case may be, of Real Estate on which any
Collateral is located (provided, that Holdings or the Borrowers may defer
delivery of any such agreements for a period not to exceed ninety (90) days from the
Closing Date; provided, further, that thereafter the Agents may
exercise Reasonable Credit Judgment to establish a Reserve with respect to any
Collateral located on any Real Estate for which the Collateral Agent has not
received an acceptable waiver and consent agreement in an amount not to exceed the
amount permitted under clause (b) or (i) of the definition of Eligible Inventory);




     (x) signed opinions of counsel for Holdings and the Borrowers addressed to the
Agents and the Lenders and dated the Closing Date, opining as to such matters in
connection with this Agreement, the other Loan Documents and the Transactions as the
Agents may reasonably request, each such opinion to be in a form, scope, and
substance reasonably satisfactory to the Agents and their respective counsel;




     (xi) the Agents shall have received evidence, in form, scope and substance
reasonably satisfactory to the Agents, of all insurance coverage as required by this
Agreement;




     (xii) such other documents and instruments as the Agents or any Lender (through
the Administrative Agent) may reasonably request.




     (b) The Collateral Agent shall have received a Perfection Certificate with respect to
Holdings and the Borrowers dated the Closing Date and duly executed by a Responsible Officer
of Parent, and shall have received the results of a search of the Uniform Commercial Code
filings (or equivalent filings) made with respect to the Loan Parties in the states (or
other jurisdictions) of formation of such Persons, in each case as indicated on such
Perfection Certificate, together with copies of the financing statements (or similar
documents) disclosed by such search, and accompanied by evidence reasonably satisfactory to
the Collateral Agent that the Liens indicated in any such financing statement (or similar
document) would be permitted under Section 9.18 or have been or will be
contemporaneously released or terminated.



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     (c) The Security Documents shall have been duly executed by each Loan Party that is to
be a party thereto and shall be in full force and effect on the Closing Date. The Collateral
Agent on behalf of the Secured Parties shall, upon the filing of the applicable
documentation, have a security interest in the Collateral of the type and priority described
in each Security Document.




     (d) (i) Each of the Security Documents, in form and substance satisfactory to the
Lenders, relating to each of the Mortgaged Properties shall have been duly executed by the
parties thereto and delivered to the Collateral Agent and shall be in full force and effect,
(ii) none of such Mortgaged Properties shall be subject to any Lien other than Permitted
Liens, (iii) each of such Security Documents shall be in a proper form to be filed and
recorded in the recording office as specified on Schedule 8.2(c) and (iv) the Collateral
Agent shall have received such other documents, including a commitment or commitments for a
policy or policies of title insurance issued by a nationally recognized title insurance
company, together with such endorsements, coinsurance and reinsurance as may be requested by
the Collateral Agent and the Lenders, insuring the Mortgages as valid second liens on the
Mortgaged Properties, free of Liens other than Permitted Liens, together with such surveys,
abstracts, appraisals and legal opinions required to be furnished pursuant to the terms of
the Mortgages or as reasonably requested by the Collateral Agent or the Lenders (with such
policy or policies to be delivered upon filing of the applicable Security Documents).




     (e) The Collateral Agent shall have received, in form and substance satisfactory to it,
duly executed Blocked Account Agreements or similar agreements required by this Agreement.




     (f) The Lenders shall have received the financial statements and report referred to in
Section 8.6.




     (g) The Merger shall have been (or shall simultaneously be) consummated in accordance
with the Merger Agreement and applicable law, without giving effect to any material change
to the terms of the Merger Agreement or any waiver of any material conditions of the Merger
Agreement, in either case that that is material and adverse to the Lenders, not approved by
the Agents. The Administrative Agent shall have received copies of the Merger Agreement and
all material certificates, opinions and other material documents delivered thereunder,
certified by a Responsible Officer of the Borrower as being complete and correct. The
Equity Contribution shall have been made.




     (h) All principal, premium, if any, interest, fees and other amounts due or outstanding
under the Existing Credit Agreement shall have been (or shall simultaneously be) paid in
full, the commitments thereunder terminated and all Guaranties and security in support
thereof discharged and released, and the Lenders shall have received reasonably satisfactory
evidence thereof.




     (i) Upon making the initial Revolving Loans (including such Revolving Loans made to
finance the fees, costs, and expenses then payable under this Agreement)



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and issuing any Letters of Credit on the date of making the initial Revolving Loans,
the Borrowers shall have remaining Availability in an amount not less than $80,000,000.




     (j) All representations and warranties made hereunder and in the other Loan Documents
shall be true and correct in all material respects on the Closing Date (or if made with
respect to another date, as of such other date).




     (k) No Default or Event of Default shall exist on the Closing Date, or would exist
after giving effect to the Revolving Loans to be made and the Letters of Credit to be issued
on such date.




     (l) Parent shall have received gross proceeds of $275,000,000 from the issuance of the
Senior Secured Notes, on terms and conditions reasonably satisfactory in all respects to the
Agents.




     (m) The Borrowers shall have paid all fees and expenses of the Agents and the Attorney
Costs incurred in connection with any of the Loan Documents and the transactions
contemplated thereby in each case to the extent invoiced.




     (n) The Agents and the Lenders shall have received the results of borrowing base audits
and asset appraisals conducted by the Collateral Agent of the Borrowers’ respective assets
in order to validate the Borrowing Base.




     (o) All requisite Governmental Authorities and third parties shall have approved or
consented to the Transactions and the other transactions contemplated hereby to the extent
required and material, all applicable appeal periods shall have expired and there shall be
no pending litigation, governmental, administrative or judicial action that would reasonably
be expected to restrain, prevent or impose burdensome conditions on the Transactions or the
other transactions contemplated hereby.




     (p) The Lenders shall have received all documentation and other information required by
regulatory authorities under applicable “know your customer” and anti-money laundering rules
and regulations, including the USA PATRIOT Act.


The acceptance by the Borrowers of any Revolving Loans made or Letters of Credit issued on the
Closing Date shall be deemed to be a representation and warranty made by the Borrowers to the
effect that all of the conditions precedent to the making of such Revolving Loans or the issuance
of such Letters of Credit have been satisfied (other than such conditions that are subject to the
satisfaction of the Lenders or Agents), with the same effect as delivery to the Agents and the
Lenders of a certificate signed by a Responsible Officer of the Borrowers, dated the Closing Date,
to such effect. Execution and delivery to the Administrative Agent by a Lender of a counterpart of
this Agreement shall be deemed confirmation by such Lender that (i) all conditions precedent in
this Section 10.1 have been fulfilled to the satisfaction of such Lender, (ii) the decision
of such Lender to execute and deliver to the Administrative Agent an executed counterpart of this
Agreement was made by such Lender independently and without reliance on an Agent or any other
Lender as to the satisfaction of any condition precedent set forth in this Section 10.1,
and (iii) all documents sent to such Lender for approval, consent, or satisfaction were acceptable
to such Lender.




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          Section 10.2 Conditions Precedent to Each Revolving Loan. The obligation of the
Lenders to make each Revolving Loan, including the initial Revolving Loans on the Closing Date, and
the obligation of the Letter of Credit Issuer to issue, amend, renew or extend any Letter of Credit
shall be subject to the further conditions precedent that on and as of the date of any such
extension, amending, renewing or extending of credit:





     (a) the following statements shall be true, and the acceptance by the Borrowers of any
extension of credit shall be deemed to be a statement to the effect set forth in clause
(i) and clause (ii) following with the same effect as the delivery to the Agents
and the Lenders of a certificate signed by a Responsible Officer of each Borrower, dated the
date of such extension of credit, stating that:




     (i) The representations and warranties contained in this Agreement and the
other Loan Documents are correct in all material respects, in each case on and as of
the date of such extension of credit as though made on and as of such date, other
than any such representation or warranty which relates to a specified prior date and
except to the extent the Agents and the Lenders have been notified by the Borrowers
that any representation or warranty is not correct and the Majority Lenders have
explicitly waived in writing compliance with such representation or warranty; and




     (ii) No event has occurred and is continuing, or would result from such
extension of credit, which constitutes a Default or an Event of Default.




     (b) Since the Closing Date and as of the date of funding such Revolving Loan or issuing
such Letter of Credit, there shall not have occurred or exist any event or condition which
constitutes a Material Adverse Effect.


The foregoing conditions precedent are not conditions to each Lender participating in or
reimbursing the Swingline Lender or the Administrative Agent for such Lenders’ Pro Rata Share of
any Swingline Loan or Agent Advance made in accordance with the provisions of Section
2.2(h) and Section 2.2(i).




ARTICLE 11




DEFAULT REMEDIES




          Section 11.1 Events of Default. It shall constitute an event of default (“Event
of Default”) if any one or more of the following shall occur for any reason:





     (a) any failure by the Borrowers to pay the principal of or interest on any of the
Obligations or any fee or other amount owing hereunder when due or, in the case of any such
interest or fees, within three (3) Business Days after the same becomes due, whether upon
demand or otherwise;




     (b) any representation or warranty made or deemed made by Holdings or the Borrowers in
this Agreement or in any of the other Loan Documents, any Financial Statement, or any
certificate, report or other instrument furnished by Holdings or the



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Borrowers at any time to an Agent or any Lender in connection with any Loan Document or
the transactions contemplated thereby shall prove to be untrue in any material respect as of
the date on which made, deemed made, or furnished;




     (c) any default shall occur in




     (i) the observance or performance of any of the covenants and agreements
contained in Section 9.2 (insofar as it requires the preservation of the
existence of Holdings and the Borrowers) or Section 9.9 through Section
9.28 (other than Section 9.27), or




     (ii) the observance or performance of any of the covenants and agreements
contained in Article 6 or Article 7, and such default shall continue
for a period of five (5) Business Days after written notice thereof has been given
to Parent by the Administrative Agent,




     (iii) the observance or performance of any of the covenants and agreements
contained in this Agreement, other than as referenced in Section 11.1(a),
Section 11.1(b), Section 11.1(c)(i), and Section 11.1(c)(ii)
or any other Loan Documents, and such default shall continue for a period of thirty
(30) days after written notice thereof has been given to Parent by the
Administrative Agent, or if any such agreement or document shall become void or
unenforceable, without the written consent of the Majority Lenders;




     (d) default shall occur with respect to any Indebtedness (other than the Obligations)
of Holdings or any of its Subsidiaries in an outstanding principal amount which exceeds
$20,000,000, or under any agreement or instrument under or pursuant to which any such
Indebtedness may have been issued, created, assumed, or guaranteed by any such Person, and
such default shall continue for more than the period of grace, if any, therein specified, if
the effect thereof (with or without the giving of notice or further lapse of time or both)
is to accelerate, or to permit the holders of any such Indebtedness to accelerate, the
maturity of any such Indebtedness, or any such Indebtedness shall be declared due and
payable or be required to be prepaid (other than by a regularly scheduled required
prepayment) prior to the stated maturity thereof;




     (e) Holdings, Parent or any Subsidiary shall (i) file a voluntary petition in
bankruptcy or file a voluntary petition or an answer or otherwise commence any action or
proceeding seeking reorganization, arrangement, or readjustment of its debts or for any
other relief under the Bankruptcy Code, as amended, or under any other bankruptcy or
insolvency act or law, state or federal, now or hereafter existing, or consent to, approve
of, or acquiesce in, any such petition, action, or proceeding; (ii) apply for or acquiesce
in the appointment of a receiver, assignee, liquidator, sequestrator, custodian, monitor,
trustee, or similar officer for it or for all or any part of its property; (iii) make an
assignment for the benefit of creditors; or (iv) be unable generally to pay its debts as
they become due;



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     (f) an involuntary petition or proposal shall be filed or an action or proceeding
otherwise commenced (other than as referenced in Section 11.1(e)) seeking
reorganization, arrangement, consolidation, or readjustment of the debts of Holdings or any
of its Subsidiaries or for any other relief under the Bankruptcy Code, as amended, or under
any other bankruptcy or insolvency act or law, state or federal, now or hereafter existing
and either (i) such petition, proposal, action, or proceeding shall not have been dismissed
within a period of sixty (60) days after its commencement or (ii) an order for relief
against any such Person shall have been entered in such proceeding;




     (g) a receiver, assignee, liquidator, sequestrator, custodian, monitor, trustee, or
similar officer for Holdings or any of its Subsidiaries or for all or any material portion
of its property shall be appointed or a warrant of attachment, execution, or similar process
shall be issued against any material portion of the property of any such Person;




     (h) Holdings or any of its Subsidiaries shall file a certificate of dissolution under
applicable state law or shall be liquidated, dissolved, or wound-up (except in a transaction
allowed under Section 9.9) or shall commence or have commenced against it (and not
dismissed within sixty (60) days after such commencement against it) any action or
proceeding for dissolution, winding-up, or liquidation, or shall take any corporate action
in furtherance thereof;




     (i) [Reserved]




     (j) any Guaranty of the Obligations shall be terminated, revoked, or declared void or
invalid (except as otherwise expressly permitted herein);




     (k) one or more judgments, orders, decrees, or arbitration awards is entered against
Holdings, Parent or any Subsidiary involving liability in the aggregate (to the extent not
covered by independent third-party insurance as to which the insurer does not dispute
coverage) as to any single or related or unrelated series of transactions, incidents or
conditions, of $10,000,000 or more, and the same shall remain unsatisfied, unvacated, and
unstayed pending appeal for a period of sixty (60) days after the entry thereof;




     (l) any loss, theft, damage, or destruction of any item or items of Collateral or other
property of Holdings, Parent or any Subsidiary occurs which reasonably could be expected to
cause a Material Adverse Effect and is not adequately covered by insurance;




     (m) for any reason other than the failure of the Collateral Agent or the Noteholder
Collateral Agent to take any action available to it to maintain perfection of the Collateral
Agent’s Liens, pursuant to the Loan Documents, any Lien with respect to any material portion
of the Collateral intended to be secured by the Loan Documents ceases to be, or is not,
valid, perfected, and prior to all other Liens (other than Permitted Liens which are
expressly permitted to have priority over the Collateral Agent’s Liens) or is terminated,
revoked, or declared void;




     (n) (i) a Reportable Event shall occur which reasonably constitutes grounds for the
termination by the Pension Benefit Guaranty Corporation of any Plan or for the appointment
by the appropriate United States district court of a trustee for any Plan;



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     (ii) any Plan shall be terminated or any such trustee shall be requested or appointed;
(iii) any Borrower, Holdings, Parent or any Subsidiary is in “default” (as defined in
Section 4219(c)(5) of ERISA) with respect to payments to a Multiemployer Plan resulting from
any such entity’s complete or partial withdrawal from such Plan, or (iv) any such entity
engages in a Prohibited Transaction, in each case of clause (i), (ii), (iii) or (iv), if any
such event could reasonably be expected to have a Material Adverse Effect; or




     (o) there occurs a Change of Control.


Notwithstanding the foregoing, it is expressly agreed that the occurrence of a Material Adverse
Effect does not in and of itself constitute an Event of Default. Notwithstanding the foregoing,
solely for the purposes of determining whether an Event of Default has occurred under clause (e),
(f), (g) or (h) of this Section 11.1, any reference in any such clause to any Subsidiary
shall be deemed not to include any Subsidiary affected by any event or circumstance referred to in
any such clause that did not, as of the last day of the Fiscal Period of Parent most recently
ended, have assets with a value in excess of 3.0% of the Total Assets or 3.0% of total revenues of
Holdings and the Subsidiaries for the period of twelve (12) Fiscal Periods then ended; provided
that if it is necessary to exclude more than one Subsidiary from clause (e), (f), (g) or (h) of
this Section 11.1 pursuant to this paragraph in order to avoid an Event of Default
hereunder, all excluded Subsidiaries shall be considered to be a single consolidated Subsidiary for
purposes of determining whether the condition specified above is satisfied.




          Section 11.2 Right to Cure.





     (a) Notwithstanding anything to the contrary contained in Section 11.1, in the event
that the Borrowers fail to comply with the requirements of the covenant set forth in Section
9.24, until the expiration of the 10th day subsequent to the date the certificate calculating
the covenant set forth in Section 9.24 is required to be delivered pursuant to Section
7.2(c), Holdings and/or Parent shall have the right to issue Permitted Cure Securities for cash
or otherwise receive cash contributions to its capital, and, in each case with respect to Holdings,
to contribute any such cash to the capital of Parent (collectively, the “Cure Right”), and
upon the receipt by the Parent of such cash (the “Cure Amount”) pursuant to the exercise by
Holdings or Parent of such Cure Right the covenant set forth in Section 9.24 shall be
recalculated giving effect to the following pro forma adjustments:




     (i) Adjusted EBITDA shall be increased, solely for the purpose of measuring the
covenant set forth in Section 9.24 and not for any other purpose under this
Agreement, by an amount equal to the Cure Amount; and




     (ii) If, after giving effect to the foregoing recalculations, Parent shall then be in
compliance with the requirements of the covenant set forth in Section 9.24, Parent
shall be deemed to have satisfied the requirements of the covenant set forth in Section
9.24 as of the relevant date of determination with the same effect as though there had
been no failure to comply therewith at such date, and the applicable breach or default of
the covenant set forth in Section 9.24 that had occurred shall be deemed cured for
the purposes of this Agreement.



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     (b) Notwithstanding anything herein to the contrary, (i) in each four-fiscal-quarter period
there shall be at least one fiscal quarter in which the Cure Right is not exercised, (ii) in each
eight-fiscal-quarter period, there shall be a period of at least four consecutive fiscal quarters
during which the Cure Right is not exercised, (iii) for purposes of this Section 11.2, the
Cure Amount shall be no greater than the amount required for purposes of complying with the
covenant set forth in Section 9.24 and (iv) the aggregate amount of all Cure Amounts shall
not exceed $50,000,000.



          Section 11.3 Remedies.





     (a) If a Default or an Event of Default exists, the Administrative Agent may, in its
discretion, and shall, at the direction of the Majority Lenders, do one or more of the
following at any time or times and in any order, without notice to or demand on any
Borrower: (i) restrict the amount of or refuse to make Revolving Loans; or (ii) restrict or
refuse to provide Letters of Credit. If an Event of Default exists, the Administrative
Agent shall, at the direction of the Majority Lenders, do one or more of the following, in
addition to the actions described in the preceding sentence, at any time or times and in any
order, without notice to or demand on any Borrower: (A) terminate the Commitments and this
Agreement; (B) declare any or all Obligations to be immediately due and payable;
provided, however, that upon the occurrence of any Event of Default
described in Section 11.1(e), Section 11.1(f), Section 11.1(g), or
Section 11.1(h), the Commitments shall automatically and immediately expire and all
Obligations shall automatically become immediately due and payable without notice or demand
of any kind; and (C) pursue its other rights and remedies under the Loan Documents and
applicable law.




     (b) If an Event of Default has occurred and is continuing: (i) the Collateral Agent
shall have for the benefit of the Secured Parties, in addition to all other rights of the
Collateral Agent and the Lenders, the rights and remedies of a secured party under the UCC;
(ii) the Collateral Agent may, at any time, take possession of the Collateral and keep it on
any Borrower’s premises, at no cost to the Collateral Agent or any Lender, or remove any
part of it to such other place or places as the Collateral Agent may desire, or any Borrower
shall, upon the Collateral Agent’s demand, at such Borrower’s cost, assemble the Collateral
and make it available to the Collateral Agent at a place reasonably convenient to the
Collateral Agent; and (iii) the Collateral Agent may sell and deliver any Collateral at
public or private sales, for cash, upon credit, or otherwise, at such prices and upon such
terms as the Collateral Agent deems advisable, in its sole discretion, and may, if the
Collateral Agent deems it reasonable, postpone or adjourn any sale of the Collateral by an
announcement at the time and place of sale or of such postponed or adjourned sale without
giving a new notice of sale. Without in any way requiring notice to be given in the
following manner, each Borrower agrees that any notice by the Collateral Agent of sale,
disposition, or other intended action hereunder or in connection herewith, whether required
by the UCC or otherwise, shall constitute reasonable notice to the Borrowers if such notice
is mailed by registered or certified mail, return receipt requested, postage prepaid, or is
delivered personally against receipt, at least five (5) Business Days prior to such action
to the Borrowers’ address specified in or pursuant to Section 15.8. If any
Collateral is sold on terms other than payment in full at the time of sale, no credit shall
be given against the Obligations until the Collateral Agent



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or the Lenders receive payment, and if the buyer defaults in payment, the Collateral
Agent may resell the Collateral without further notice to any Borrower. In the event the
Collateral Agent seeks to take possession of all or any portion of the Collateral by
judicial process, each Borrower irrevocably waives: (A) the posting of any bond, surety, or
security with respect thereto which might otherwise be required; (B) any demand for
possession prior to the commencement of any suit or action to recover the Collateral; and
(C) any requirement that the Collateral Agent retain possession and not dispose of any
Collateral until after trial or final judgment. Each Borrower agrees that the Collateral
Agent has no obligation to preserve rights to the Collateral or marshal any Collateral for
the benefit of any Person. The Collateral Agent is hereby granted a non-exclusive license
or other right to use, without charge, each Borrower’s labels, patents, copyrights, name,
trade secrets, trade names, trademarks, and advertising matter, or any similar property, to
the extent constituting Collateral in completing production of, advertising or selling any
Collateral, and, subject to the rights of any licensor or franchisor under such agreements,
each Borrower’s rights under all licenses and all franchise agreements shall inure to the
Collateral Agent’s benefit for such purpose. The proceeds of sale shall be applied first to
all expenses of sale, including Attorneys’ Costs, and then to the Obligations. The
Collateral Agent will return any excess to the Borrowers, and the Borrowers shall remain
liable for any deficiency.




     (c) If an Event of Default occurs and is continuing, each Borrower hereby waives all
rights to notice and hearing prior to the exercise by the Collateral Agent of the Collateral
Agent’s rights to repossess the Collateral without judicial process or to replevy, attach,
or levy upon the Collateral without notice or hearing.




     (d) Each Borrower recognizes that the Collateral Agent may be unable to effect a public
sale of any or all of the Collateral or other property to be sold by reason of certain
prohibitions contained in the laws of any jurisdiction outside the United States or in
applicable federal or state securities laws but may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers who will be obliged to agree,
among other things, to acquire such Collateral or other property to be sold for their own
account for investment and not with a view to the distribution or resale thereof. Each
Borrower acknowledges and agrees that any such private sale may result in prices and other
terms less favorable to the seller than if such sale were a public sale and, notwithstanding
such circumstances, agrees that any such private sale shall, to the extent permitted by law,
be deemed to have been made in a commercially reasonable manner. Unless required by a
Requirement of Law, the Collateral Agent shall not be under any obligation to delay a sale
of any of the Collateral or other property to be sold for the period of time necessary to
permit the issuer of such securities to register such securities under the laws of any
jurisdiction outside the United States under any applicable federal or state securities
laws, even if such issuer would agree to do so. Each Borrower further agrees to do or cause
to be done, to the extent that such Borrower may do so under Requirements of Law, all such
other acts and things as may be necessary to make such sales or resales of any portion or
all of the Collateral or other property to be sold valid and binding and in compliance with
any and all Requirements of Law at the Borrowers’ expense. Each Borrower further agrees
that a breach of any of the covenants contained in this Section 11.3(d) will cause
irreparable injury to the Collateral Agent and the Lenders



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for which there is no adequate remedy at law and, as a consequence, agrees that each
covenant contained in this Section 11.3(d) shall be specifically enforceable against
such Borrower and such Borrower hereby waives and agrees, to the fullest extent permitted by
law, not to assert as a defense against an action for specific performance of such covenants
that (i) such Borrower’s failure to perform such covenants will not cause irreparable injury
to the Collateral Agent and the Lenders or (ii) the Collateral Agent or the Lenders have an
adequate remedy at law in respect of such breach. Each Borrower further acknowledges the
impossibility of ascertaining the amount of damages which would be suffered by the
Collateral Agent and the Lenders by reason of a breach of any of the covenants contained in
this Section 11.3(d) and, consequently, agrees that, if such Borrower shall breach
any of such covenants and the Collateral Agent or the Lenders shall sue for damages for such
breach, such Borrower shall pay to the Collateral Agent, for the benefit of the Collateral
Agent and the Lenders, as liquidated damages and not as a penalty, an aggregate amount equal
to the value of the Collateral or other property to be sold on the date the Collateral Agent
shall demand compliance with this Section 11.3(d).



ARTICLE 12




TERM AND TERMINATION




     Term and Termination. The Borrowers may terminate this Agreement at any time if they:
(a) give the Agents and the Lenders five (5) Business Days prior written notice of termination; and
(b) pay and perform all Obligations (other than contingent indemnity and expense reimbursement
obligations for which no claim has been made), including, without limitation, all fees (if any)
required by Section 4.2 and any other fees payable under the Loan Documents on or prior to
the effective date of termination. Upon the effective date of termination of this Agreement for
any reason whatsoever, all Obligations (including all unpaid principal, accrued and unpaid
interest, and any early termination or prepayment fees but excluding contingent indemnification and
expense reimbursement obligations to the extent no claim with respect thereto has been asserted and
remains unsatisfied) shall become immediately due and payable and the Borrowers shall immediately
arrange for the cancellation and return of all Letters of Credit then outstanding (or replacement
by Supporting Letter of Credit or cash collateralization). Notwithstanding the termination of this
Agreement, until all Obligations (other than such indemnification and expense reimbursement
obligations relating to unasserted claims) are paid and performed in full in cash, the Borrowers
shall remain bound by the terms of this Agreement and shall not be relieved of any of their
Obligations hereunder or under any other Loan Document, and the Agents and the Lenders shall retain
all their rights and remedies hereunder (including, without limitation, the Collateral Agent’s
Liens in and all rights and remedies with respect to all then existing and after-arising
Collateral).



ARTICLE 13




AMENDMENTS; WAIVERS; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS




          Section 13.1 No Waivers; Cumulative Remedies. No failure by an Agent or any Lender to
exercise any right, remedy, or option under this Agreement or any present or future supplement
hereto, or in any other agreement between or among Holdings, any Borrower and an




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Agent and/or any Lender, or delay by an Agent or any Lender in exercising the same, will
operate as a waiver thereof. Subject to Section 13.2, no waiver by an Agent or any Lender
will be effective unless it is in writing, and then only to the extent specifically stated. No
waiver by an Agent or the Lenders on any occasion shall affect or diminish each Agent’s and each
Lender’s rights thereafter to require strict performance by Holdings and the Borrowers of any
provision of this Agreement. Each Agent’s and each Lender’s rights under this Agreement will be
cumulative and not exclusive of any other right or remedy which an Agent or any Lender may have.




          Section 13.2 Amendments and Waivers. (a) No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent with respect to any departure by any
Borrower therefrom, shall be effective unless the same shall be in writing and signed by the
Majority Lenders (or by the Administrative Agent at the written request of the Majority Lenders),
Holdings and the Borrowers and then any 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 waiver, amendment, or consent shall, unless in writing and signed by all the Lenders
(or, in the case of clause (i), (ii) or (iii) below, each such applicable Lender), Holdings and the
Borrowers and acknowledged by the Administrative Agent, do any of the following:





     (i) increase or extend the Commitment of such Lender (it being understood that
waivers or modifications of conditions precedent, covenants, Defaults or Events of
Default or of a mandatory reduction in the aggregate Commitments shall not
constitute an increase of the Commitments of any Lender);




     (ii) postpone or delay any date fixed by this Agreement or any other Loan
Document for any payment of principal, interest, fees, or other amounts due to such
Lender hereunder or under any other Loan Document;




     (iii) reduce the principal of, or the rate of interest specified herein on any
Revolving Loan of such Lender, or any fees or other amounts payable hereunder or
under any other Loan Document to such Lender;




     (iv) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Revolving Loans which is required for the Lenders or any of
them to take any action hereunder or change the definition of “Majority Lenders” or
“Required Lenders” (it being understood that, with the consent of Majority Lenders
(subject to clause (viii) below), additional extensions of credit pursuant to this
Agreement may be included in the determination of the Majority Lenders or the
Required Lenders on substantially the same basis as the Revolving Loans and
Commitments are included on the Closing Date);




     (v) increase any of the percentages set forth in the definition of the
Borrowing Base;



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     (vi) amend this Section or any provision of the Agreement providing for consent
or other action by all Lenders;




     (vii) release any guaranties of the Obligations or release all or substantially
all of the Collateral other than as permitted by Section 14.11; or




     (viii) increase the Maximum Revolver Amount to an amount in excess of
$550,000,000;


provided, however, that no amendment, waiver, or consent shall, unless in writing
and signed by the Administrative Agent, affect the rights or duties of the Administrative Agent,
the Collateral Agent, the Letter of Credit Issuer or the Swingline Lender under this Agreement or
any other Loan Document, without the prior written consent of the Administrative Agent, the
Collateral Agent, the Letter of Credit Issuer or the Swingline Lender, respectively.
Notwithstanding the foregoing, no Loan Document may be changed in a manner that by its terms
adversely affects the rights in respect of payments due to Lenders holding Revolving Loans of one
Class differently from the rights of Lenders holding Revolving Loans of any other Class without the
prior written consent of the Lenders holding a majority in interest of the outstanding Revolving
Loans and unused Commitments of each adversely affected Class.





     (b) If any fees are paid to the Lenders as consideration for amendments, waivers or
consents with respect to this Agreement, at Administrative Agent’s election, such fees may
be paid only to those Lenders that agree to such amendments, waivers or consents within the
time specified for submission thereof.




     (c) If, in connection with any proposed amendment, waiver or consent (a “Proposed
Change”):




     (i) requiring the consent of all Lenders, the consent of the Required Lenders
is obtained, but the consent of other Lenders is not obtained (any such Lender whose
consent is not obtained as described in this clause (i) and in clause (ii) below
being referred to as a “Non-Consenting Lender”), or




     (ii) requiring the consent of the Required Lenders, the consent of the Majority
Lenders is obtained,


then, so long as the Administrative Agent is not a Non-Consenting Lender, then, in any such case,
any Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative
Agent, require such Lender to transfer and assign, without recourse (in accordance with and subject
to the restrictions contained in Section 13.3), all of its interests, rights and obligations under
this Agreement to an assignee that shall assume such assigned obligations (which assignee may be
another Lender, if a Lender accepts such assignment); provided, however, that (x)
such assignment shall not violate any Requirement of Law, (y) such Borrower shall have received the
prior written consent of Administrative Agent and Letter of Credit Issuer, which consent shall not
unreasonably be withheld or delayed, and (z) such Borrower or such assignee shall have paid to the
applicable Lender in immediately available funds an amount equal to the sum of the principal of and
interest accrued to the date of such payment on the outstanding Revolving Loans or participations
in Letters of Credit, Swingline




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Loans and Agent Advances (to the extent of such outstanding principal and accrued interest) of such
Lender plus all fees and other amounts accrued for the account of such Lender hereunder. Each
Lender hereby grants to Agent an irrevocable power of attorney (which power is coupled with an
interest) to execute and deliver, on behalf of such Lender as assignor, any Assignment and
Acceptance Agreement necessary to effectuate any assignment of such Lender’s interests hereunder in
the circumstances contemplated by this Section 13.2(c).




          Section 13.3 Assignments; Participations.





     (a) Any Lender may, with the written consent of Parent, the Administrative Agent, the
Swingline Lender and the Letter of Credit Issuer (which consents shall not be unreasonably
withheld) assign and delegate to one or more Eligible Assignees (provided that no
consent of Parent shall be required in connection with any assignment and delegation by a
Lender to another Lender or to an Affiliate of a Lender, during the primary syndication of
the Commitments and/or the Revolving Loans to Persons identified by the Administrative Agent
to the Borrower on or prior to the Closing Date and reasonably acceptable to the Borrower,
or after the occurrence and during the continuance of an Event of Default) (each an
“Assignee”) all, or any ratable part of all, of the Revolving Loans, the
Commitments, and the other rights and obligations of such Lender hereunder (any such
assignment and delegation being referred to herein as an “Assignment”), in a minimum
amount of $2,500,000 (provided that, (i) unless an assignor Lender has assigned and
delegated all of its Revolving Loans and Commitments, no such assignment and/or delegation
shall be permitted unless, after giving effect thereto, such assignor Lender retains a
Commitment in a minimum amount of $2,500,000 and (ii) such amount may be aggregated in
respect of each Lender and its Affiliates or Related Funds); provided,
however, that the Borrowers and the Agents may continue to deal solely and directly
with such Lender in connection with the interest so assigned to an Assignee until (i)
written notice of such assignment, together with payment instructions, addresses, and
related information with respect to the Assignee, shall have been given to the Borrowers and
the Administrative Agent by such Lender and the Assignee; (ii) the parties to such
Assignment shall execute and deliver to the Administrative Agent an Assignment and
Acceptance via an electronic settlement system acceptable to the Administrative Agent (or,
if previously agreed with the Administrative Agent, manually), and shall pay to the
Administrative Agent a processing and recordation fee of $3,500 (which fee may be waived or
reduced in the sole discretion of the Administrative Agent and provided that only one such
fee shall be payable in the case of concurrent assignments to persons that, after giving
effect to such assignments, will be Related Funds); and (iii) the Assignee, if it shall not
be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire and
all applicable tax forms and such assignment shall have been recorded pursuant to paragraph
(e) of this Section 13.3. If required, the Borrowers agree to promptly execute and deliver,
upon or concurrently with the surrender of the existing Notes, new Notes and replacement
Notes as reasonably requested by the Administrative Agent to evidence assignments of the
Revolving Loans and Commitments in accordance herewith.




     (b) Upon acceptance and recording pursuant to paragraph (e) of this Section 13.3, from
and after the effective date specified in each Assignment and



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Acceptance, (A) the Assignee thereunder shall be a party hereto and, to the extent of
the interest assigned by such Assignment and Acceptance, have the rights and obligations of
a Lender under this Agreement and (B) the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of
Article 5 and Sections 14.7 and 15.11, as well as to any fees accrued for its
account and not yet paid).




     (c) By executing and delivering an Assignment and Acceptance, the assigning Lender
thereunder and the Assignee thereunder confirm to and agree with each other and the other
parties hereto as follows: (i) other than as provided in such Assignment and Acceptance,
such assigning Lender makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties, or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency, or
value of this Agreement or any other Loan Document furnished pursuant hereto or the
attachment, perfection, or priority of any Lien granted by Holdings or the Borrowers to the
Collateral Agent or any Lender in the Collateral; (ii) such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to the financial
condition of Holdings or the Borrowers or the performance or observance by Holdings or any
Borrower of any of its obligations under this Agreement or any other Loan Document furnished
pursuant hereto; (iii) such Assignee confirms that it has received a copy of this Agreement,
together with such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and Acceptance; (iv) such
Assignee will, independently and without reliance upon an Agent, such assigning Lender, or
any other Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking action under
this Agreement; (v) such Assignee appoints and authorizes the Agents to take such action as
agent on its behalf and to exercise such powers under this Agreement as are delegated to the
Agents by the terms hereof, together with such powers, including the discretionary rights
and incidental power, as are reasonably incidental thereto; and (vi) such Assignee agrees
that it will perform in accordance with their terms all of the obligations which by the
terms of this Agreement are required to be performed by it as a Lender.




     (d) The Administrative Agent, acting for this purpose as an agent of the Borrowers,
shall maintain at one of its offices in The City of New York a copy of each Assignment and
Acceptance delivered to it and a register for the recordation of the names and addresses of
the Lenders, and the Commitment of, and principal amount of the Revolving 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 Agents, the Letter of
Credit Issuer 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, the Letter of Credit Issuer, the Collateral



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Agent and any Lender, at any reasonable time and from time to time upon reasonable
prior notice.




     (e) Upon its receipt of, and consent to, a duly completed Assignment and Acceptance
executed by an assigning Lender and an Assignee, an Administrative Questionnaire completed
in respect of the assignee (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (a) above, if applicable, and the
written consent of the Administrative Agent and, if required, Parent, the Swingline Lender
and the Letter of Credit Issuer to such Assignment and any applicable tax forms, the
Administrative Agent shall (i) accept such Assignment and Acceptance and (ii) record the
information contained therein in the Register. No assignment shall be effective unless it
has been recorded in the Register as provided in this paragraph (e). The Commitment
allocated to each Assignee shall reduce such Commitments of the assigning Lender pro
tanto.




     (f) Any Lender may at any time, without the consent of the Borrowers, the Swingline
Lender, the Letter Credit Issuer or the Administrative Agent, sell to one or more
Participants participating interests in any Revolving Loans, the Commitment of that Lender,
and the other interests of that Lender (the “originating Lender”) hereunder and
under the other Loan Documents; provided, however, that (i) the originating
Lender’s obligations under this Agreement shall remain unchanged, (ii) the originating
Lender shall remain solely responsible for the performance of such obligations, (iii) the
Borrowers and the Agents shall continue to deal solely and directly with the originating
Lender in connection with the originating Lender’s rights and obligations under this
Agreement and the other Loan Documents, and (iv) no Lender shall transfer or grant any
participating interest under which the Participant has rights to approve any amendment to,
or any consent or waiver with respect to, this Agreement or any other Loan Document except
the matters set forth in Section 13.2(a)(i), (ii), (iii) and
(vii) with respect to such participation, and (v) subject to paragraph (g) of this
Section, all amounts payable by the Borrowers hereunder shall be determined as if such
Lender had not sold such participation; except that, if amounts outstanding under this
Agreement are due and unpaid, or shall have been declared or shall have become due and
payable upon the occurrence of an Event of Default, each Participant shall be deemed to have
the right of set-off in respect of its participating interest in amounts owing under this
Agreement to the same extent and subject to the same limitation as if the amount of its
participating interest were owing directly to it as a Lender under this Agreement.




     (g) Pursuant to paragraph (f)(v) of this Section, a Participant shall not be entitled
to receive any greater payment under Section 5.1 or 5.3 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 Parent’s prior written
consent. A Participant that would be a Non-U.S. Lender if it were a Lender shall not be
entitled to the benefits of Section 5.3 unless Parent is notified of the participation sold
to such Participant and such Participant agrees to comply with Section 14.10 as though it
were a Lender. Any Lender may at any time assign all or any portion of its rights under
this Agreement to secure extensions of credit to such Lender or in support of obligations
owed by such Lender; provided that no such assignment shall



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release a Lender from any of its obligations hereunder or substitute any such assignee
for such Lender as a party hereto; and provided further, that no such
assignee shall be entitled to receive any greater amount pursuant to Section 5.1 or
5.3 than that which the assigning Lender would have been entitled to receive had no
such assignment occurred.




     (h) Notwithstanding anything to the contrary contained herein, any Lender (a
“Granting Lender”) may grant to a special purpose funding vehicle (an
“SPC”), identified as such in writing from time to time by the Granting Lender to
the Administrative Agent and the Borrowers, the option to provide to the Borrowers all or
any part of any Revolving Loans that such Granting Lender would otherwise be obligated to
make to the Borrowers pursuant to this Agreement; provided that (i) nothing herein
shall constitute a commitment by any SPC to make any Revolving Loans and (ii) if an SPC
elects not to exercise such option or otherwise fails to provide all or any part of such
Revolving Loan, the Granting Lender shall be obligated to make such Revolving Loan pursuant
to the terms hereof. The making of a Revolving Loan by an SPC hereunder shall utilize the
Commitment of the Granting Lender to the same extent, and as if, such Revolving Loan were
made by such Granting Lender. Each party hereto hereby agrees that no SPC shall be liable
for any indemnity or similar payment obligation under this Agreement (all liability for
which shall remain with the Granting Lender). In furtherance of the foregoing, each party
hereto hereby agrees (which agreement shall survive the termination of this Agreement) that,
prior to the date that is one year and one day after the payment in full of all outstanding
commercial paper or other senior indebtedness of any SPC, it will not institute against, or
join any other Person in instituting against, such SPC any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under the laws of the United States or
any State thereof. In addition, notwithstanding anything to the contrary contained in this
Section 13.3, any SPC may (i) with notice to, but without the prior written consent of,
Parent and the Administrative Agent and without paying any processing fee therefor, assign
all or a portion of its interests in any Revolving Loans to the Granting Lender or to any
financial institutions (consented to by Parent and Administrative Agent) providing liquidity
and/or credit support to or for the account of such SPC to support the funding or
maintenance of Revolving Loans and (ii) disclose on a confidential basis any non-public
information relating to its Revolving Loans to any rating agency, commercial paper dealer or
provider of any surety, guarantee or credit or liquidity enhancement to such SPC.




     (i) In the event that any Lender shall become a Defaulting Lender or S&P, Moody’s and
Thompson’s BankWatch (or InsuranceWatch Ratings Service, in the case of Lenders that are
insurance companies (or Best’s Insurance Reports, if such insurance company is not rated by
Insurance Watch Ratings Service)) shall, after the date that any Lender becomes a Lender,
downgrade the long-term certificate deposit ratings of such Lender, and the resulting
ratings shall be below BBB-, Baa3 and C (or BB, in the case of a Lender that is an insurance
company (or B, in the case of an insurance company not rated by InsuranceWatch Ratings
Service)) (or, with respect to any Lender that is not rated by any such ratings service or
provider, Parent, the Letter of Credit Issuer or the Swingline Lender shall have reasonably
determined that there has occurred a material adverse change in the financial condition of
any such Lender, or a material impairment of the ability of any such Lender to perform its
obligations hereunder, as compared to such



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condition or ability as of the date that any such Lender became a Lender) then Parent,
the Letter of Credit Issuer or the Swingline Lender shall have the right, but not the
obligation, at its own expense, upon notice to such Lender and the Administrative Agent, to
replace such Lender with an assignee (in accordance with and subject to the restrictions
contained in paragraph (a) above), and such Lender hereby agrees to transfer and assign
without recourse (in accordance with and subject to the restrictions contained in paragraph
(a) above) all its interests, rights and obligations in respect of its Commitment to such
Assignee; provided, however, that (i) no such assignment shall violate any
law, rule and regulation or order of any Governmental Authority and (ii) Parent, the Letter
of Credit Issuer or such Assignee, as the case may be, shall pay to such Lender in
immediately available funds on the date of such assignment the principal of and interest
accrued to the date of payment on the Revolving Loans made by such Lender hereunder and all
other amounts accrued for such Lender’s account or owed to it hereunder.



ARTICLE 14




THE AGENTS




          Section 14.1 Appointment and Authorization. Each Lender hereby designates and
appoints each of the Agents as its agent under this Agreement and the other Loan Documents and each
Lender hereby irrevocably authorizes each Agent to take such action on its behalf under the
provisions of this Agreement and each other Loan Document and to exercise such powers and perform
such duties as are expressly delegated to it by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto. Each Agent agrees to act
as such on the express conditions contained in this Article 14. The provisions of this
Article 14 are solely for the benefit of the Agents and the Lenders and the Borrowers shall
have no rights as a third party beneficiary of any of the provisions contained herein other than as
expressly provided in Section 14.10 and Section 14.11. Notwithstanding any
provision to the contrary contained elsewhere in this Agreement or in any other Loan Document, the
Agents shall not have any duties or responsibilities, except those expressly set forth herein, nor
shall the Agents have or be deemed to have any fiduciary relationship with any Lender, and no
implied covenants, functions, responsibilities, duties, obligations, or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the Agents. Without
limiting the generality of the foregoing sentence, the use of the term “agents” in this Agreement
with reference to the Agents is not intended to connote any fiduciary or other implied (or express)
obligations arising under agency doctrine of any applicable law. Instead, such term is used merely
as a matter of market custom, and is intended to create or reflect only an administrative
relationship between independent contracting parties. Except as expressly otherwise provided in
this Agreement, each Agent shall have and may use its sole discretion with respect to exercising or
refraining from exercising any discretionary rights or taking or refraining from taking any actions
which such Agent is expressly entitled to take or assert under this Agreement and the other Loan
Documents, including (a) the determination of the applicability of ineligibility criteria and other
determinations with respect to the calculation of the Borrowing Base, (b) the making of Agent
Advances pursuant to Section 2.2(i), and (c) the exercise of remedies pursuant to
Section 11.3, and any action so taken or not taken shall be deemed consented to by the
Lenders.




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          Section 14.2 Delegation of Duties. Each Agent may execute any of its duties under
this Agreement or any other Loan Document by or through agents, employees, attorneys-in-fact or
through its Related Persons and shall be entitled to advice of counsel concerning all matters
pertaining to such duties. Neither Agent shall be responsible for the negligence or misconduct of
any agent, employee, attorney-in-fact or Related Person that it selects as long as such selection
was made without gross negligence or willful misconduct.




          Section 14.3 Liability of the Agents. None of the Agents or any of their respective
Related Persons shall (a) be liable for any action taken or omitted to be taken by any of them
under or in connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct), or (b) be
responsible in any manner to any of the Lenders for any recital, statement, representation, or
warranty made by any Borrower or Affiliate of any Borrower, or any officer thereof, contained in
this Agreement or in any other Loan Document, or in any certificate, report, statement, or other
document referred to or provided for in, or received by an Agent under or in connection with, this
Agreement or any other Loan Document, or the validity, effectiveness, genuineness, enforceability,
or sufficiency of this Agreement or any other Loan Document, or for any failure of any Borrower or
any other party to any Loan Document to perform its obligations hereunder or thereunder. None of
the Agents or any of their respective Related Persons shall be under any obligation to any Lender
to ascertain or to inquire as to the observance or performance of any of the agreements contained
in, or conditions of, this Agreement or any other Loan Document, or to inspect the properties,
books, or records of any Borrower or any Borrower’s Affiliates.




          Section 14.4 Reliance by the Agents.





     (a) Each Agent shall be entitled to rely, and shall be fully protected in relying, upon
any writing, resolution, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex, or telephone message, statement, or other document or conversation
believed by it to be genuine and correct and to have been signed, sent, or made by the
proper Person or Persons, and upon advice and statements of legal counsel (including,
without limitation, counsel to Holdings and any Borrower), independent accountants and other
experts selected by such Agent. Each Agent shall be fully justified in failing or refusing
to take any action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Majority Lenders as it deems appropriate and, if
it so requests, it shall first be indemnified to its satisfaction by the Lenders against any
and all liability and expense which may be incurred by it by reason of taking or continuing
to take any such action. Each Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other Loan Document in accordance with a
request or consent of the Majority Lenders (or all Lenders if so required by Section
13.2) and such request and any action taken or failure to act pursuant thereto shall be
binding upon all of the Lenders.




     (b) For purposes of determining compliance with the conditions specified in Section
10.1, each Lender that has executed this Agreement shall be deemed to have consented to,
approved, or accepted or to be satisfied with, each document or other matter either sent by
an Agent to such Lender for consent, approval, acceptance, or satisfaction,



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or required thereunder to be consented to or approved by or acceptable or satisfactory
to the Lender.



          Section 14.5 Notice of Default. Neither Agent shall be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default, unless such Agent shall have received
written notice from a Lender, Holdings or a Borrower referring to this Agreement, describing such
Default or Event of Default and stating that such notice is a “notice of default.” The
Administrative Agent will notify the Lenders of its receipt of any such notice. The Agents shall
take such action with respect to such Default or Event of Default as may be requested by the
Majority Lenders in accordance with Article 11; provided, however, that
unless and until an Agent has received any such request, such Agent may (but shall not be obligated
to) take such action, or refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable.




          Section 14.6 Credit Decision. Each Lender acknowledges that none of the Agents or any
of their respective Related Persons has made any representation or warranty to it, and that no act
by an Agent hereinafter taken, including any review of the affairs of the Borrowers and their
Affiliates, shall be deemed to constitute any representation or warranty by such Agent or Related
Persons to any Lender. Each Lender represents to the Agents that it has, independently and without
reliance upon any Agent or Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition, and creditworthiness of the Borrowers and
their Affiliates, and all applicable bank regulatory laws relating to the transactions contemplated
hereby, and made its own decision to enter into this Agreement and to extend credit to the
Borrowers. Each Lender also represents that it will, independently and without reliance upon any
Agent or Related Person and based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit analysis, appraisals, and decisions in taking or not
taking action under this Agreement and the other Loan Documents, and to make such investigations as
it deems necessary to inform itself as to the business, prospects, operations, property, financial
and other condition, and creditworthiness of the Borrowers. Except for notices, reports, and other
documents expressly herein required to be furnished to the Lenders by an Agent, neither Agent shall
have any duty or responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial and other condition, or
creditworthiness of any Borrower which may come into the possession of any of such Agent or its
Related Persons.




          Section 14.7 Indemnification. WHETHER OR NOT THE TRANSACTIONS CONTEMPLATED HEREBY ARE
CONSUMMATED, THE LENDERS SHALL INDEMNIFY UPON DEMAND THE AGENTS AND THEIR RESPECTIVE RELATED
PERSONS (TO THE EXTENT NOT REIMBURSED BY OR ON BEHALF OF THE BORROWERS AND WITHOUT LIMITING THE
OBLIGATION OF THE BORROWERS TO DO SO), PRO RATA, FROM AND AGAINST ANY AND ALL INDEMNIFIED
LIABILITIES AS SUCH TERM IS DEFINED IN SECTION 15.11; PROVIDED, HOWEVER,
THAT NO LENDER SHALL BE LIABLE FOR THE PAYMENT TO AN AGENT OR ANY RELATED PERSON OF ANY PORTION OF
SUCH INDEMNIFIED LIABILITIES RESULTING SOLELY FROM SUCH PERSON’S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT. Without limitation of the foregoing, each Lender shall reimburse each Agent upon
demand for its




Loan And Security Agreement — Page 133




 









 







ratable share of any costs or out-of-pocket expenses (including Attorney Costs) incurred by
such Agent in connection with the preparation, execution, delivery, administration, modification,
amendment, or enforcement (whether through negotiations, legal proceedings, or otherwise) of, or
legal advice in respect of rights or responsibilities under, this Agreement, any other Loan
Document, or any document contemplated by or referred to herein, to the extent that such Agent is
not reimbursed for such expenses by or on behalf of Holdings or the Borrowers. The undertaking in
this Section shall survive the payment of all Obligations hereunder and the resignation or
replacement of each Agent.




          Section 14.8 The Agents in Individual Capacity. The Banks serving as Administrative
Agent or Collateral Agent and their respective Affiliates may make loans to, issue letters of
credit for the account of, accept deposits from, acquire equity interests in and generally engage
in any kind of banking, trust, financial advisory, underwriting, or other business with any
Borrower and its Affiliates as though they were not Agents hereunder and without notice to or
consent of the Lenders. The Lenders acknowledge that, pursuant to such activities, such Bank or
their respective Affiliates may receive information regarding any Borrower or its Affiliates
(including information that may be subject to confidentiality obligations in favor of any such
Borrower or such Affiliate) and acknowledge that neither such Agent nor such Bank shall be under
any obligation to provide such information to the Lenders. With respect to its Revolving Loans,
such Banks shall have the same rights and powers under this Agreement as any other Lender and may
exercise the same as though it were not an Agent, and the terms “Lender” and “Lenders” include such
Banks in their individual capacities.




          Section 14.9 Successor Agents. Either Agent may resign at any time upon thirty (30)
days prior written notice to the Lenders, the Letter of Credit Issuer and the Borrowers, such
resignation to be effective upon the acceptance of a successor agent to its appointment as Agent.
If an Agent resigns under this Agreement, the Majority Lenders, subject to the consent of Parent
(which shall not be unreasonably withheld and which shall not be required during a continuing Event
of Default), shall appoint from among the Lenders a successor agent for the Lenders. If no
successor agent is appointed prior to the effective date of the resignation of such Agent, such
Agent may appoint, after consulting with the Lenders, subject to the consent of Parent (which shall
not be unreasonably withheld and which shall not be required during a continuing Event of Default),
a successor agent from among the Lenders. Upon the acceptance of its appointment as successor
agent hereunder, such successor agent shall succeed to all the rights, powers, and duties of the
retiring Agent, and the term “Administrative Agent”, “Collateral Agent” or “Agents”, as the case
may be, shall mean such successor agent, and the retiring Agent’s appointment, powers, and duties
as an Agent shall be terminated. After the retiring Agent’s resignation hereunder, the provisions
of this Article 14 shall inure to its benefit and such retiring Agent shall not by reason
of such resignation be deemed to be released from liability as to any actions taken or omitted to
be taken by it while it was Agent under this Agreement.




          Section 14.10 Withholding Tax.





     (a) Any Lender (including any Assignee and Participant) that is not a U.S. person (as
defined in Section 7701(a)(30) of the Code) (a “Non-U.S. Lender”) and is entitled to
an exemption from or reduction of United States withholding tax shall deliver



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to the Administrative Agent and Parent (and in the case of a Participant, to the Lender
from which the related participation was purchased):




     (i) if such Non-U.S. Lender claims an exemption from, or a reduction of,
withholding tax under a United States tax treaty, two properly completed and duly
executed IRS Forms W-8BEN (or any subsequent versions thereof or successors thereto)
on or before the date it becomes a party to this Agreement and before the payment of
any interest in each third succeeding calendar year during which interest may be
paid under this Agreement;




     (ii) if such Non-U.S. Lender claims that interest paid under this Agreement is
exempt from United States withholding tax because it is effectively connected with a
United States trade or business of such Non-U.S. Lender, two properly completed and
executed copies of IRS Form W-8ECI (or any subsequent versions thereof or successors
thereto) on or before the date it becomes a party to this Agreement; and




     (iii) such other form or forms as may be required under the Code or other laws
of the United States as a condition to exemption from, or reduction of, United
States withholding tax.




Such Non-U.S. Lender agrees to promptly notify the Administrative Agent and Parent of any
change in circumstances which would modify or render invalid any claimed exemption or
reduction. Each Lender that is not a Non-U.S. Lender shall provide two properly completed
and duly executed IRS Forms W-9 (or any subsequent versions thereof or successors thereto)
to the Administrative Agent and Parent on or before the date it becomes a party to this
Agreement and agrees to promptly notify the Administrative Agent and Parent of any change in
circumstances which would modify or render invalid any claimed exemption or reduction. In
addition, such Lender shall provide the forms described in Section 14.10(a) promptly upon
the obsolescence, expiration or invalidity of any form previously delivered by such Lender.




     (b) If any Lender is entitled to a reduction in the applicable withholding tax, the
Administrative Agent or any Borrower may withhold from any interest payment to such Lender
an amount equivalent to the applicable withholding tax after taking into account such
reduction. If the forms or other documentation required by clause (a) of this
Section are not delivered to the Administrative Agent and Parent, then the Administrative
Agent or any Borrower may withhold from any interest payment to such Lender not providing
such forms or other documentation an amount equivalent to the applicable withholding tax and
shall not have the obligation to pay additional amounts pursuant to Section 5.1(c)
with respect to such payment.




     (c) If the IRS or any other Governmental Authority of the United States or other
jurisdiction asserts a claim that the Administrative Agent or any Borrower did not properly
withhold tax from amounts paid to or for the account of any Lender (because the appropriate
form was not delivered, was not properly executed or because such Lender failed to notify
the Administrative Agent or any Borrower of a change in circumstances



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which rendered the exemption from, or reduction of, withholding tax ineffective) such
Lender shall, within thirty (30) days after the date such Administrative Agent or Borrowers
makes written demand therefor, indemnify the Administrative Agent and the Borrowers fully
for all amounts paid, directly or indirectly, by the Administrative Agent or any Borrower as
tax or otherwise, including penalties and interest, and including any taxes imposed by any
jurisdiction on the amounts payable to the Administrative Agent or such Borrower under this
Section 14.10, together with all costs and expenses (including Attorney Costs). The
obligation of the Lenders under this Section 14.10(c) shall survive the payment of
all Obligations and the resignation or replacement of the Administrative Agent.



          Section 14.11 Collateral Matters.





     (a) The Lenders hereby irrevocably authorize the Collateral Agent, at its option and in
its sole discretion, to release any Collateral Agent’s Lien upon any Collateral and to
terminate any Guarantee (i) upon the termination of the Commitments and payment and
satisfaction in full of all Revolving Loans and reimbursement obligations in respect of
Letters of Credit, and the termination of all outstanding Letters of Credit (whether or not
any of such obligations are due) and all other Obligations (other than contingent
indemnification and expense reimbursement obligations for which no claim has been made);
(ii) constituting property being sold or disposed of if the Loan Party disposing of such
property certifies to the Collateral Agent that the sale or disposition is made in
compliance with Section 9.9 or Section 9.19 (and the Collateral Agent may
rely conclusively on any such certificate, without further inquiry); (iii) constituting
property in which no Loan Party owned any interest at the time the Lien was granted or at
any time thereafter; (iv) constituting property leased to a Loan Party under a lease which
has expired or been terminated in a transaction permitted under this Agreement; (v) as
required by the Intercreditor Agreement; or (vi) pursuant to Section 14.11(b) below.
Except as provided above, the Collateral Agent will not release any of the Collateral
Agent’s Liens without the prior written authorization of the Lenders; provided that
the Collateral Agent may, in its discretion, release the Collateral Agent’s Liens on
Collateral valued in the aggregate not in excess of $5,000,000 during each Fiscal Year
without the prior written authorization of any Lender. Upon request by the Collateral Agent
or the Borrowers at any time, the Lenders will confirm in writing the Collateral Agent’s
authority to release any Collateral Agent’s Liens upon particular types or items of
Collateral pursuant to this Section 14.11.




     (b) In the event that any Loan Party conveys, sells, leases, assigns, transfers or
otherwise disposes of all or any portion of any of the Capital Stock or assets of a Loan
Party to a person that is not (and is not required to become) a Loan Party in a transaction
not prohibited by Section 9.9 , the Collateral Agent shall promptly (and the Lenders
hereby authorize the Collateral Agent to) take such action and execute any such documents as
may be reasonably requested by Parent and at Parent’s expense to release, share or
subordinate any Liens created by any Loan Document in respect of such assets or Capital
Stock, and, in the case of a disposition of the Capital Stock of any Subsidiary that is a
Loan Party in a transaction not prohibited by Section 9.9 and as a result of which such
Subsidiary would cease to be a Loan Party, terminate such Subsidiary’s obligations



Loan And Security Agreement — Page 136




 









 









under its Guarantee provided, however, that (i) the Collateral Agent
shall not be required to execute any such document on terms which, in the Collateral Agent’s
reasonable opinion, would expose the Collateral Agent to liability or create any obligation
or entail any consequence other than the release of such Liens without recourse or warranty,
and (ii) such release shall not in any manner discharge, affect, or impair the Obligations
or any Liens (other than those expressly being released) upon (or obligations of the
Borrowers in respect of) all interests retained by the Borrowers, including the proceeds of
any sale, all of which shall continue to constitute part of the Collateral. In addition, the
Collateral Agent agrees to take such actions as are reasonably requested by Parent and at
Parent’s expense to terminate the Liens and security interests created by the Loan Documents
when (i) all the Obligations (other than in respect of contingent indemnification and
expense reimbursement obligations for which no claim has been made) are paid in full and all
Letters of Credit and Commitments are terminated and (ii) required under the Intercreditor
Agreement. Any representation, warranty or covenant contained in any Loan Document relating
to any such Capital Stock, asset or Subsidiary of Holdings shall no longer be deemed to be
made once such Capital Stock or asset is so conveyed, sold, leased, assigned, transferred or
disposed of. Upon any release or termination in connection with the foregoing, the
Collateral Agent shall (and is hereby authorized by the Lenders to) execute such documents
as may reasonably requested by Parent to evidence the release of the Collateral Agent’s
Liens upon such Collateral (including without limitation UCC-3 termination statements) all
without recourse or warranty.




     (c) The Collateral Agent shall have no obligation whatsoever to any of the Lenders to
assure that the Collateral exists or is owned by any Loan Party or is cared for, protected,
or insured or has been encumbered, or that the Collateral Agent’s Liens have been properly
or sufficiently or lawfully created, perfected, protected, or enforced or are entitled to
any particular priority, or to exercise at all or in any particular manner or under any duty
of care, disclosure, or fidelity, or to continue exercising, any of the rights, authorities,
and powers granted or available to the Collateral Agent pursuant to any of the Loan
Documents, it being understood and agreed that in respect of the Collateral, or any act,
omission, or event related thereto, the Collateral Agent may act in any manner it may deem
appropriate, in its sole discretion given the Collateral Agent’s own interest in the
Collateral in its capacity as one of the Lenders and that the Collateral Agent shall have no
other duty or liability whatsoever to any Lender as to any of the foregoing.



          Section 14.12 Restrictions on Actions by Lenders; Sharing of Payments.





     (a) Each of the Lenders agrees that it shall not, unless specifically requested to do
so by the Administrative Agent, take or cause to be taken any action to enforce its rights
under this Agreement or against any Loan Party, including the commencement of any legal or
equitable proceedings, to foreclose any Lien on, or otherwise enforce any security interest
in, any of the Collateral.




     (b) If at any time or times any Lender shall receive (i) by payment, foreclosure,
set-off, or otherwise, any proceeds of Collateral or any payments with respect to the
Obligations owing to such Lender arising under, or relating to, this



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Agreement or the other Loan Documents, except for any such proceeds or payments
received by such Lender from the Collateral Agent pursuant to the terms of this Agreement,
or (ii) payments from the Collateral Agent in excess of such Lender’s ratable portion of all
such distributions by the Collateral Agent, such Lender shall promptly (A) turn the same
over to the Collateral Agent, in kind, and with such endorsements as may be required to
negotiate the same to the Collateral Agent, or in same day funds, as applicable, for the
account of all of the Lenders and for application to the Obligations in accordance with the
applicable provisions of this Agreement, or (B) purchase, without recourse or warranty, an
undivided interest and participation in the Obligations owed to the other Lenders so that
such excess payment received shall be applied ratably as among the Lenders in accordance
with their Pro Rata Shares; provided, however, that if all or part of such
excess payment received by the purchasing party is thereafter recovered from it, those
purchases of participations shall be rescinded in whole or in part, as applicable, and the
applicable portion of the purchase price paid therefor shall be returned to such purchasing
party, but without interest except to the extent that such purchasing party is required to
pay interest in connection with the recovery of the excess payment.



          Section 14.13 Agency for Perfection. Each Lender hereby appoints each other Lender as
agent for the purpose of perfecting the Lenders’ security interest in assets which, in accordance
with Article 9 of the UCC can be perfected only by possession. Should any Lender (other than the
Collateral Agent) obtain possession of any such Collateral, such Lender shall notify the Collateral
Agent thereof, and, promptly upon the Collateral Agent’s request therefor shall deliver such
Collateral to the Collateral Agent or otherwise deal with such Collateral in accordance with the
Collateral Agent’s instructions.




          Section 14.14 Payments by the Administrative Agent to the Lenders. All payments to be
made by the Administrative Agent to the Lenders shall be made by bank wire transfer or internal
transfer of immediately available funds to each Lender pursuant to wire transfer instructions
delivered in writing to the Administrative Agent on or prior to the Closing Date (or if such Lender
is an Assignee, in the applicable Assignment and Acceptance), or pursuant to such other wire
transfer instructions as each party may designate for itself by written notice to the
Administrative Agent. Concurrently with each such payment, the Administrative Agent shall identify
whether such payment (or any portion thereof) represents principal, premium, or interest on the
Revolving Loans or otherwise. Unless the Administrative Agent receives notice from the Borrowers
prior to the date on which any payment is due to the Lenders that the Borrowers will not make such
payment in full as and when required, the Administrative Agent may assume that the Borrowers have
made such payment in full to the Administrative Agent on such date in immediately available funds
and the Administrative Agent may (but shall not be so required), in reliance upon such assumption,
distribute to each Lender on such due date an amount equal to the amount then due such Lender. If
and to the extent the Borrowers have not made such payment in full to the Administrative Agent,
each Lender shall repay to the Administrative Agent on demand such amount distributed to such
Lender, together with interest thereon at the Federal Funds Rate for each day from the date such
amount is distributed to such Lender until the date repaid.




     Section 14.15 Concerning the Collateral and the Related Loan Documents. Each Lender
agrees that any action taken by an Agent, the Required Lenders or the Majority Lenders,



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as applicable, in accordance with the terms of this Agreement or the other Loan Documents, and
the exercise by an Agent, the Required Lenders or the Majority Lenders, as applicable, of their
respective powers set forth therein or herein, together with such other powers that are reasonably
incidental thereto, shall be binding upon all of the Lenders. The Lenders acknowledge that the
Revolving Loans, Agent Advances, Swingline Loans, Hedge Agreements, Bank Products and all interest,
fees and expenses hereunder constitute one Indebtedness, secured pari passu by all
of the Collateral.




          Section 14.16 Field Audit and Examination Reports; Disclaimer by Lenders. By signing
this Agreement, each Lender:





     (a) is deemed to have requested that the Collateral Agent furnish such Lender, promptly
after it becomes available, a copy of each field audit or examination report (each a
“Report” and collectively, “Reports”) prepared by or on behalf of the
Collateral Agent;




     (b) expressly agrees and acknowledges that neither the Banks nor the Agents (i) make
any representation or warranty as to the accuracy of any Report, or (ii) shall be liable for
any information contained in any Report;




     (c) expressly agrees and acknowledges that the Reports are not comprehensive audits or
examinations, that the Collateral Agent, a Bank, or other party performing any audit or
examination will inspect only specific information regarding the Borrowers and will rely
significantly upon the Borrowers’ books and records, as well as on representations of the
Borrowers’ personnel;




     (d) agrees to keep all Reports confidential and strictly for its internal use, and not
to distribute except to its participants, or use any Report in any other manner; and




     (e) without limiting the generality of any other indemnification provision contained in
this Agreement, agrees: (i) to hold the Agents and any such other Lender preparing a Report
harmless from any action the indemnifying Lender may take or conclusion the indemnifying
Lender may reach or draw from any Report in connection with any loans or other credit
accommodations that the indemnifying Lender has made or may make to the Borrowers, or the
indemnifying Lender’s participation in, or the indemnifying Lender’s purchase of, a loan or
loans of the Borrowers; and (ii) to pay and protect, and indemnify, defend, and hold the
Agents and any such other Lender preparing a Report harmless from and against, the claims,
actions, proceedings, damages, costs, expenses, and other amounts (including Attorney Costs)
incurred by the Agents and any such other Lender preparing a Report as the direct or
indirect result of any third parties who might obtain all or part of any Report through the
indemnifying Lender.



          Section 14.17 Relation Among Lenders. The Lenders are not partners or co-venturers,
and no Lender shall be liable for the acts or omissions of, or (except as otherwise set forth
herein in case of the Agents) authorized to act for, any other Lender.




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ARTICLE 15




MISCELLANEOUS




          Section 15.1 Cumulative Remedies; No Prior Recourse to Collateral. The enumeration
herein of each Agent’s and each Lender’s rights and remedies is not intended to be exclusive, and
such rights and remedies are in addition to and not by way of limitation of any other rights or
remedies that the Agents and the Lenders may have under the UCC or other applicable law. The
Agents and the Lenders shall have the right, in their sole discretion, to determine which rights
and remedies are to be exercised and in which order. The exercise of one right or remedy shall not
preclude the exercise of any others, all of which shall be cumulative. The Agents and the Lenders
may, without limitation, proceed directly against any Person liable therefor to collect the
Obligations without any prior recourse to the Collateral. No failure to exercise and no delay in
exercising, on the part of an Agent or any Lender, any right, remedy, power, or privilege
hereunder, shall operate as a waiver thereof, nor shall any single or partial exercise of any
right, remedy, power, or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power, or privilege.




          Section 15.2 Severability. The illegality or unenforceability of any provision of
this Agreement, any Loan Document, or any instrument or agreement required hereunder shall not in
any way affect or impair the legality or enforceability of the remaining provisions of this
Agreement, any Loan Document, or any instrument or agreement required hereunder.




          Section 15.3 Governing Law; Choice of Forum.





     (a) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN LETTERS OF CREDIT AND AS
EXPRESSLY SET FORTH IN OTHER LOAN DOCUMENTS) SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. EACH LETTER OF CREDIT SHALL BE GOVERNED BY,
AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES DESIGNATED IN SUCH LETTER OF
CREDIT, OR IF NO SUCH LAWS OR RULES ARE DESIGNATED, THE UNIFORM CUSTOMS AND PRACTICE FOR
DOCUMENTARY CREDITS MOST RECENTLY PUBLISHED AND IN EFFECT, ON THE DATE SUCH LETTER OF CREDIT
WAS ISSUED, BY THE INTERNATIONAL CHAMBER OF COMMERCE (THE “UNIFORM CUSTOMS”) AND, AS TO
MATTERS NOT GOVERNED BY THE UNIFORM CUSTOMS, THE LAWS OF THE STATE OF NEW YORK.




     (b) EACH OF HOLDINGS AND THE BORROWERS HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS,
FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY NEW YORK STATE COURT OR
FEDERAL COURT OF THE UNITED STATES OF AMERICA SITTING IN NEW YORK CITY, AND ANY APPELLATE
COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE OTHER LOAN DOCUMENTS, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT,
AND EACH OF THE



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PARTIES HERETO HEREBY 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 OR, TO
THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT,
SUBJECT TO ANY STAY PENDING APPEAL, 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 SHALL AFFECT ANY RIGHT THAT AN
AGENT, THE LETTER OF CREDIT ISSUER OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS AGAINST HOLDINGS, THE
BORROWERS OR THEIR RESPECTIVE PROPERTIES IN THE COURTS OF ANY JURISDICTION.




     (c) EACH OF HOLDINGS AND THE BORROWERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES,
TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS IN ANY NEW YORK STATE OR FEDERAL
COURT. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT.




     (d) EACH PARTY TO THIS AGREEMENT IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE
MANNER PROVIDED FOR NOTICES IN SECTION 15.8. NOTHING IN THIS AGREEMENT WILL AFFECT THE
RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.



          Section 15.4 Waiver of Jury Trial. EACH OF HOLDINGS, THE BORROWERS, THE LENDERS AND
THE AGENTS IRREVOCABLY WAIVES ITS RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING, OR OTHER LITIGATION OF ANY
TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT, RELATED PERSON,
PARTICIPANT, OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. EACH
OF HOLDINGS, THE BORROWERS, THE LENDERS AND THE AGENTS AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION
SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES
FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION
AS TO ANY ACTION, COUNTERCLAIM, OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE
THE




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VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION
HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS, OR
MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.




          Section 15.5 Survival of Agreement. All covenants, agreements, representations and
warranties made by the Borrowers or Holdings herein and in the certificates or other instruments
prepared or delivered in connection with or pursuant to this Agreement or any other Loan Document
shall be considered to have been relied upon by the Lenders and the Letter of Credit Issuer and
shall survive the making by the Lenders of the Revolving Loans and the issuance of Letters of
Credit by the Letter of Credit Issuer, regardless of any investigation made by the Lenders or the
Letter of Credit Issuer or on their behalf, and shall continue in full force and effect as long as
the principal of or any accrued interest on any Loan or any fee or any other amount payable (other
than contingent indemnification and expense reimbursement obligations for which no claim has been
made) under this Agreement or any other Loan Document is outstanding and unpaid or any Letter of
Credit is outstanding (unless replaced by a Supporting Letter of Credit or cash collateralization)
and so long as the Commitments have not been terminated. The provisions of Article 5 and
Sections 14.7 and 15.11 shall remain operative and in full force and effect regardless of the
expiration of the term of this Agreement, the consummation of the transactions contemplated hereby,
the repayment of any of the Revolving Loans, the expiration of the Commitments, the expiration of
any Letter of Credit, the invalidity or unenforceability of any term or provision of this Agreement
or any other Loan Document, or any investigation made by or on behalf of an Agent, any Lender or
the Letter of Credit Issuer.




          Section 15.6 Other Security and Guaranties. The Agents, may, without notice or demand
and without affecting the Loan Parties’ obligations hereunder, from time to time: (a) take from any
Person and hold collateral (other than the Collateral) for the payment of all or any part of the
Obligations and exchange, enforce, or release such collateral or any part thereof; and (b) accept
and hold any endorsement or guaranty of payment of all or any part of the Obligations and release
or substitute any such endorser or guarantor, or any Person who has given any Lien in any other
collateral as security for the payment of all or any part of the Obligations, or any other Person
in any way obligated to pay all or any part of the Obligations.




          Section 15.7 Fees and Expenses. Holdings and each Borrower agree, jointly and
severally, to pay to each Agent, the Letter of Credit Issuer and the Swingline Lender for its
benefit, on demand, all reasonable, out-of-pocket costs and expenses that such Person pays or
incurs in connection with the negotiation, preparation, syndication, consummation, administration,
enforcement, and termination of this Agreement or any of the other Loan Documents, including: (a)
Attorney Costs; (b) costs and expenses (including attorneys’ and paralegals’ fees and
disbursements) for any amendment, supplement, waiver, consent, or subsequent closing in connection
with the Loan Documents and the transactions contemplated thereby; (c) costs and expenses of lien
searches; (d) taxes, fees, and other charges for filing financing statements and continuations, and
other actions to perfect, protect, and continue the Collateral Agent’s Liens (including costs and
expenses paid or incurred by an Agent in connection with the consummation of this Agreement); (e)
sums paid or incurred to pay any amount or take any action required of Holdings or any Borrower
under the Loan Documents that Holdings or such Borrower fails to pay or take; (f) costs of
appraisals, inspections, and




Loan And Security Agreement — Page 142




 









 







verifications of the Collateral, including travel, lodging, and meals for inspections of the
Collateral and Holdings’ and the Borrowers’ operations by the Collateral Agent plus the Collateral
Agent’s then customary charge for field examinations and audits and the preparation of reports
thereof (such charge is currently $850 per day (or portion thereof) for each agent or employee of
the Collateral Agent with respect to each field examination or audit); (g) costs and expenses of
forwarding loan proceeds, collecting checks, and other items of payment, and establishing and
maintaining Payment Accounts and lock boxes; (h) costs and expenses of preserving and protecting
the Collateral; and (i) costs and expenses (including Attorney Costs) paid or incurred to obtain
payment of the Obligations, enforce the Collateral Agent’s Liens, sell or otherwise realize upon
the Collateral, and otherwise enforce the provisions of the Loan Documents. The foregoing shall
not be construed to limit any other provisions of the Loan Documents regarding costs and expenses
to be paid by the Borrowers. Additionally, Holdings and each Borrower agree, jointly and
severally, to pay each Lender all reasonable documented out-of-pocket costs and expenses that such
Lender incurs in connection with the enforcement or collection of its rights under this Agreement
and any other Loan Document. All of the foregoing costs and expenses may be charged to the Loan
Account as Revolving Loans as described in Section 4.5.




          Section 15.8 Notices. Except as otherwise provided herein, all notices, demands, and
requests that any party is required or elects to give to any other shall be in writing, or by a
telecommunications device capable of creating a written record, and any such notice shall become
effective (a) upon personal delivery thereof, including, but not limited to, delivery by overnight
mail and courier service, (b) three (3) Business Days after it shall have been mailed by United
States mail, first class, certified or registered, with postage prepaid, or (c) in the case of
notice by such a telecommunications device, when properly transmitted, in each case addressed to
the party to be notified as follows:




     If to the Administrative Agent:




Credit Suisse

Eleven Madison Avenue

New York, New York 10010

Attention: David Fitzgerald

Telecopy No.: (212) 325-8304



     If to the Collateral Agent:




Bank of America, N.A.

335 Madison Avenue

New York, NY 10017

Attention: Robert Scalzetti URGENT

Telecopy No.: (212) 503-7330



Loan And Security Agreement — Page 143




 









 








     If to Holdings or the Borrowers:




c/o Metals USA, Inc.

One Riverway, Suite 1100

Houston, Texas 77056

Attention: General Counsel

Telecopy No.: 713-585-6421


with a copy to:


Apollo Management V, L.P.

9 West 57th Street

New York, NY 10019

Attention: Ali Rashid


or to such other address as each party may designate for itself by like notice. Failure or delay
in delivering copies of any notice, demand, request, consent, approval, declaration, or other
communication to the Persons designated above to receive copies shall not adversely affect the
effectiveness of such notice, demand, request, consent, approval, declaration, or other
communication.




          Section 15.9 Waiver of Notices. Unless otherwise expressly provided herein, Holdings
and each Borrower waives presentment, notice of demand or dishonor, and protest as to any
instrument, notice of intent to accelerate the Obligations, and notice of acceleration of the
Obligations, as well as any and all other notices to which it might otherwise be entitled. No
notice to or demand on Holdings or any Borrower which an Agent or any Lender may elect to give
shall entitle Holdings or any Borrower to any or further notice or demand in the same, similar, or
other circumstances.




          Section 15.10 Binding Effect. The provisions of this Agreement shall be binding upon
and inure to the benefit of the respective representatives, successors, and permitted assigns of
the parties hereto; provided, however, neither Holdings nor any Borrower shall
assign or delegate any of its rights or duties hereunder, except as expressly permitted under
Section 9.9, without the prior written consent of the Administrative Agent, the Letter of Credit
Issuer and each Lender, and any attempted assignment without such consent shall be null and void.
The rights and benefits of the Agents and the Lenders hereunder shall, if such Persons so agree,
inure to any party acquiring any interest in the Obligations or any part thereof in accordance with
the terms hereof.




          Section 15.11 Indemnity of the Agents and the Lenders by the Borrowers.





     (a) HOLDINGS AND EACH BORROWER AGREES, JOINTLY AND SEVERALLY, TO DEFEND, INDEMNIFY, AND
HOLD EACH AGENT, THE LETTER OF CREDIT ISSUER, EACH LENDER AND EACH RELATED PERSON OF THE
FOREGOING (EACH, AN “INDEMNIFIED PERSON”) HARMLESS FROM AND AGAINST ANY AND ALL
LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS,
CHARGES, EXPENSES, AND DISBURSEMENTS (INCLUDING ATTORNEY COSTS) OF ANY



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KIND OR NATURE WHATSOEVER WHICH MAY AT ANY TIME (INCLUDING AT ANY TIME FOLLOWING
REPAYMENT OF THE REVOLVING LOANS AND THE TERMINATION, RESIGNATION, OR REPLACEMENT OF AN
AGENT OR REPLACEMENT OF ANY LENDER) BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST ANY SUCH
PERSON IN ANY WAY RELATING TO OR ARISING OUT OF THIS AGREEMENT OR ANY DOCUMENT CONTEMPLATED
BY OR REFERRED TO HEREIN, OR THE TRANSACTIONS CONTEMPLATED HEREBY, OR ANY ACTION TAKEN OR
OMITTED BY ANY SUCH PERSON UNDER OR IN CONNECTION WITH ANY OF THE FOREGOING, INCLUDING WITH
RESPECT TO ANY INVESTIGATION, LITIGATION, OR PROCEEDING (INCLUDING ANY INSOLVENCY PROCEEDING
OR APPELLATE PROCEEDING) RELATED TO OR ARISING OUT OF THIS AGREEMENT, ANY OTHER LOAN
DOCUMENT, OR THE REVOLVING LOANS OR THE USE OF THE PROCEEDS THEREOF, WHETHER OR NOT ANY
INDEMNIFIED PERSON IS A PARTY THERETO INCLUDING ANY SUCH LIABILITIES, OBLIGATIONS, LOSSES,
DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, CHARGES, EXPENSES AND REIMBURSEMENTS
RESULTING FROM THE NEGLIGENCE OF SUCH INDEMNIFIED PERSON (ALL THE FOREGOING, COLLECTIVELY,
THE “INDEMNIFIED LIABILITIES”); PROVIDED THAT HOLDINGS AND THE BORROWERS
SHALL HAVE NO OBLIGATION HEREUNDER TO ANY INDEMNIFIED PERSON WITH RESPECT TO INDEMNIFIED
LIABILITIES TO THE EXTENT SUCH INDEMNIFIED LIABILITIES RESULT PRIMARILY FROM THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNIFIED PERSON OR ITS RESPECTIVE AFFILIATES.
THE AGREEMENTS IN THIS SECTION 15.11 SHALL SURVIVE PAYMENT OF ALL OTHER OBLIGATIONS.




     (b) EACH BORROWER AGREES TO INDEMNIFY, DEFEND, AND HOLD HARMLESS EACH AGENT AND THE
LENDERS FROM ANY LOSS OR LIABILITY DIRECTLY OR INDIRECTLY ARISING OUT OF THE USE,
GENERATION, MANUFACTURE, PRODUCTION, STORAGE, RELEASE, THREATENED RELEASE, DISCHARGE,
DISPOSAL, OR PRESENCE OF A HAZARDOUS SUBSTANCE RELATING TO ANY BORROWER’S OPERATIONS,
BUSINESS, OR PROPERTY. THIS INDEMNITY WILL APPLY WHETHER THE HAZARDOUS SUBSTANCE IS ON,
UNDER, OR ABOUT ANY BORROWER’S PROPERTY OR OPERATIONS OR PROPERTY LEASED TO ANY BORROWER.
THE INDEMNITY INCLUDES BUT IS NOT LIMITED TO ATTORNEY COSTS. THE INDEMNITY EXTENDS TO EACH
AGENT AND THE LENDERS, THEIR PARENTS, AFFILIATES, SUBSIDIARIES, AND ALL OF THEIR DIRECTORS,
OFFICERS, EMPLOYEES, AGENTS, SUCCESSORS, ATTORNEYS, AND ASSIGNS. “HAZARDOUS SUBSTANCES”
MEANS ANY SUBSTANCE, MATERIAL, OR WASTE THAT IS OR BECOMES DESIGNATED OR REGULATED AS
“TOXIC,” “HAZARDOUS,” “POLLUTANT,” OR “CONTAMINANT” OR A SIMILAR DESIGNATION OR REGULATION
UNDER ANY FEDERAL, STATE, OR LOCAL LAW (WHETHER UNDER COMMON LAW, STATUTE, REGULATION, OR
OTHERWISE) OR JUDICIAL OR ADMINISTRATIVE INTERPRETATION OF



Loan And Security Agreement — Page 145




 









 









SUCH, INCLUDING PETROLEUM OR NATURAL GAS. THIS INDEMNITY WILL SURVIVE REPAYMENT OF ALL
OTHER OBLIGATIONS.



          Section 15.12 Limitation of Liability. NO CLAIM MAY BE MADE BY HOLDINGS, ANY
BORROWER, ANY LENDER, OR OTHER PERSON AGAINST AN AGENT, ANY LENDER, OR THE AFFILIATES, DIRECTORS,
OFFICERS, EMPLOYEES, OR AGENTS OF ANY OF THEM FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL, OR PUNITIVE
DAMAGES IN RESPECT OF ANY CLAIM FOR BREACH OF CONTRACT OR ANY OTHER THEORY OF LIABILITY ARISING OUT
OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY
ACT, OMISSION, OR EVENT OCCURRING IN CONNECTION THEREWITH, AND HOLDINGS, EACH BORROWER AND EACH
LENDER HEREBY WAIVES, RELEASES, AND AGREES NOT TO SUE UPON ANY CLAIM FOR SUCH DAMAGES, WHETHER OR
NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.




          Section 15.13 Final Agreement. This Agreement, the Fee Letter and the other Loan
Documents are intended by the Borrowers, the Agents, and the Lenders to be the final, complete, and
exclusive expression of the agreement between them. This Agreement, the Fee Letter and the other
Loan Documents supersede any and all prior oral or written agreements relating to the subject
matter hereof and thereof. No modification, rescission, waiver, release, or amendment of any
provision of this Agreement or any other Loan Document shall be made, except by a written agreement
signed by the Borrowers and a duly authorized officer of each of the Administrative Agent and the
requisite Lenders.





THIS WRITTEN LOAN AND SECURITY AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS
BETWEEN THE PARTIES.



          Section 15.14 Counterparts. This Agreement and the other Loan Documents may be
executed in any number of counterparts, and by each Agent, each Lender, and the Borrowers in
separate counterparts, each of which shall be an original, but all of which shall together
constitute one and the same agreement. Signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages are physically
attached to the same document, and a telecopy of any such executed signature page shall be valid as
an original.




          Section 15.15 Captions. The captions contained in this Agreement and the other Loan
Documents are for convenience of reference only, are without substantive meaning and should not be
construed to modify, enlarge, or restrict any provision.




          Section 15.16 Right of Set-off. In addition to any rights and remedies of the Lenders
provided by law, if an Event of Default exists or the Revolving Loans have been accelerated, each
Lender is authorized at any time and from time to time, without prior notice to the Borrowers, any
such notice being waived by the Borrowers to the fullest extent permitted by




Loan And Security Agreement — Page 146




 









 







law, to set-off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held by, and other indebtedness at any time owing by, such Lender
to or for the credit or the account of any Borrower against any and all Obligations owing to such
Lender, now or hereafter existing, irrespective of whether or not the Administrative Agent or such
Lender shall have made demand under this Agreement or any Loan Document and although such
Obligations may be contingent or unmatured. Each Lender agrees promptly to notify the Borrowers
and the Administrative Agent after any such set-off and application made by such Lender;
provided, however, that the failure to give such notice shall not affect the
validity of such set-off and application. NOTWITHSTANDING THE FOREGOING, NO LENDER SHALL EXERCISE
ANY RIGHT OF SET-OFF, BANKER’S LIEN, OR THE LIKE AGAINST ANY DEPOSIT ACCOUNT OR PROPERTY OF ANY
BORROWER HELD OR MAINTAINED BY SUCH LENDER WITHOUT THE PRIOR WRITTEN CONSENT OF THE ADMINISTRATIVE
AGENT.




          Section 15.17 Joint and Several Liability. All Revolving Loans, upon funding, shall
be deemed to be jointly funded to and received by the Borrowers. Each Borrower jointly and
severally agrees to pay, and shall be jointly and severally liable under this Agreement for, all
Obligations, regardless of the manner or amount in which proceeds of Revolving Loans are used,
allocated, shared, or disbursed by or among the Borrowers themselves, or the manner in which an
Agent and/or any Lender accounts for such Revolving Loans or other extensions of credit on its
books and records. Each Borrower shall be liable for all amounts due to an Agent and/or any Lender
under this Agreement, regardless of which Borrower actually receives Revolving Loans or other
extensions of credit hereunder or the amount of such Revolving Loans and extensions of credit
received or the manner in which such Agent and/or such Lender accounts for such Revolving Loans or
other extensions of credit on its books and records. Each Borrower’s Obligations with respect to
Revolving Loans and other extensions of credit made to it, and such Borrower’s Obligations arising
as a result of the joint and several liability of such Borrower hereunder, with respect to Loans
made to the other Borrowers hereunder, shall be separate and distinct obligations, but all such
Obligations shall be primary obligations of such Borrower. The Borrowers acknowledge and expressly
agree with the Agents and each Lender that the joint and several liability of each Borrower is
required solely as a condition to, and is given solely as inducement for and in consideration of,
credit or accommodations extended or to be extended under the Loan Documents to any or all of the
other Borrowers and is not required or given as a condition of extensions of credit to such
Borrower. Each Borrower’s obligations under this Agreement and as an obligor under a Guaranty
Agreement shall be separate and distinct obligations. Each Borrower’s obligations under this
Agreement shall, to the fullest extent permitted by law, be unconditional irrespective of (i) the
validity or enforceability, avoidance, or subordination of the Obligations of any other Borrower or
of any promissory note or other document evidencing all or any part of the Obligations of any other
Borrower, (ii) the absence of any attempt to collect the Obligations from any other Borrower, any
Guarantor, or any other security therefor, or the absence of any other action to enforce the same,
(iii) the waiver, consent, extension, forbearance, or granting of any indulgence by an Agent and/or
any Lender with respect to any provision of any instrument evidencing the Obligations of any other
Borrower or Guarantor, or any part thereof, or any other agreement now or hereafter executed by any
other Borrower or Guarantor and delivered to an Agent and/or any Lender, (iv) the failure by an
Agent and/or any Lender to take any steps to perfect and maintain its security interest in, or to
preserve its rights to, any security or collateral for the Obligations of any other Borrower or
Guarantor,




Loan And Security Agreement — Page 147




 









 







(V) an Agent’s and/or any Lender’s election, in any proceeding instituted under the Bankruptcy
Code, of the application of Section 1111(b)(2) of the Bankruptcy Code, (vi) any borrowing or grant
of a security interest by any other Borrower, as debtor-in-possession under Section 364 of the
Bankruptcy Code, (vii) the disallowance of all or any portion of an Agent’s and/or any Lender’s
claim(s) for the repayment of the Obligations of any other Borrower under Section 502 of the
Bankruptcy Code, or (viii) any other circumstances which might constitute a legal or equitable
discharge or defense of a guarantor or of any other Borrower. With respect to any Borrower’s
Obligations arising as a result of the joint and several liability of the Borrowers hereunder with
respect to Revolving Loans or other extensions of credit made to any of the other Borrowers
hereunder, such Borrower waives, until the Obligations shall have been paid in full and this
Agreement shall have been terminated, any right to enforce any right of subrogation or any remedy
which an Agent and/or any Lender now has or may hereafter have against any other Borrower, any
endorser or any guarantor of all or any part of the Obligations, and any benefit of, and any right
to participate in, any security or collateral given to an Agent and/or any Lender to secure payment
of the Obligations or any other liability of any Borrower to an Agent and/or any Lender. Upon any
Event of Default, the Agents may proceed directly and at once, without notice, against any Borrower
to collect and recover the full amount, or any portion of the Obligations, without first proceeding
against any other Borrower or any other Person, or against any security or collateral for the
Obligations. Each Borrower consents and agrees that the Agents shall be under no obligation to
marshal any assets in favor of any Borrower or against or in payment of any or all of the
Obligations.




          Section 15.18 Contribution and Indemnification among the Borrowers. Each Borrower is
obligated to repay the Obligations as joint and several obligor under this Agreement. To the
extent that any Borrower shall, under this Agreement as a joint and several obligor, repay any of
the Obligations constituting Revolving Loans made to another Borrower hereunder or other
Obligations incurred directly and primarily by any other Borrower (an “Accommodation
Payment”), then the Borrower making such Accommodation Payment shall be entitled to
contribution and indemnification from, and be reimbursed by, each of the other Borrowers in an
amount, for each of such other Borrowers, equal to a fraction of such Accommodation Payment, the
numerator of which fraction is such other Borrower’s Allocable Amount (as defined below) and the
denominator of which is the sum of the Allocable Amounts of all of the Borrowers. As of any date
of determination, the “Allocable Amount” of each Borrower shall be equal to the maximum
amount of liability for Accommodation Payments which could be asserted against such Borrower
hereunder without (a) rendering such Borrower “insolvent” within the meaning of Section 101 (31) of
the Bankruptcy Code, Section 2 of the Uniform Fraudulent Transfer Act (“UFTA”) or Section 2
of the Uniform Fraudulent Conveyance Act (“UFCA”), (b) leaving such Borrower with
unreasonably small capital or assets, within the meaning of Section 548 of the Bankruptcy Code,
Section 4 of the UFTA, or Section 5 of the UFCA, or (c) leaving such Borrower unable to pay its
debts as they become due within the meaning of Section 548 of the Bankruptcy Code or Section 4 of
the UFTA, or Section 5 of the UFCA. All rights and claims of contribution, indemnification, and
reimbursement under this Section shall be subordinate in right of payment to the prior payment in
full of the Obligations. The provisions of this Section shall, to the extent expressly
inconsistent with any provision in any Loan Document, supersede such inconsistent provision.




Loan And Security Agreement — Page 148




 









 








          Section 15.19 Agency of Parent for Each Other Borrower. Each of the other Borrowers
irrevocably appoints Parent as its agent for all purposes relevant to this Agreement, including the
giving and receipt of notices and execution and delivery of all documents, instruments, and
certificates contemplated herein (including, without limitation, execution and delivery to the
Agents of Borrowing Base Certificates, Notices of Borrowing, and Notices of
Conversion/Continuation) and all modifications hereto. Any acknowledgment, consent, direction,
certification, or other action which might otherwise be valid or effective only if given or taken
by all or any of the Borrowers or acting singly, shall be valid and effective if given or taken
only by Parent, whether or not any of the other Borrowers joins therein, and the Agents and the
Lenders shall have no duty or obligation to make further inquiry with respect to the authority of
Parent under this Section 15.19, provided that nothing in this Section
15.19 shall limit the effectiveness of, or the right of the Agents and the Lenders to rely
upon, any notice (including without limitation a Notice of Borrowing or a Notice of
Conversion/Continuation), document, instrument, certificate, acknowledgment, consent, direction,
certification, or other action delivered by any Borrower pursuant to this Agreement.




          Section 15.20 Additional Borrowers. Addition of any Person as a Borrower under this
Agreement is subject to approval of the Administrative Agent and the Majority Lenders, and may be
conditioned upon such requirements as they may determine in their discretion, including, without
limitation, (a) the furnishing of such financial and other information as the Administrative Agent
or any such Lender may request; (b) approval by all appropriate approval authorities of the
Administrative Agent and each such Lender; (c) execution and delivery by the Borrowers, such
Person, the Administrative Agent, and the Majority Lenders of such agreements and other
documentation (including, without limitation, an amendment to this Agreement or any other Loan
Document), and the furnishing by such Person or any of the Borrowers of such certificates,
opinions, and other documentation, as the Administrative Agent and any such Lender may request.
Neither the Administrative Agent nor any Lender shall have any obligation to approve any such
Person for addition as a Borrower under this Agreement.




          Section 15.21 Express Waivers By Borrowers In Respect of Cross Guaranties and Cross
Collateralization. Each Borrower agrees as follows:





     (a) Each Borrower hereby waives: (i) notice of acceptance of this Agreement; (ii)
notice of the making of any Revolving Loans, the issuance of any Letter of Credit or any
other financial accommodations made or extended under the Loan Documents or the creation or
existence of any Obligations; (iii) notice of the amount of the Obligations, subject,
however, to such Borrower’s right to make inquiry of the Administrative Agent to ascertain
the amount of the Obligations at any reasonable time; (iv) notice of any adverse change in
the financial condition of any other Borrower or of any other fact that might increase such
Borrower’s risk with respect to such other Borrower under the Loan Documents; (v) notice of
presentment for payment, demand, protest, and notice thereof as to any promissory notes or
other instruments among the Loan Documents; and (vii) all other notices (except if such
notice is specifically required to be given to such Borrower hereunder or under any of the
other Loan Documents to which such Borrower is a party) and demands to which such Borrower
might otherwise be entitled;



Loan And Security Agreement — Page 149




 









 









     (b) Each Borrower hereby waives the right by statute or otherwise to require an Agent
or any Lender to institute suit against any other Borrower or to exhaust any rights and
remedies which an Agent or any Lender has or may have against any other Borrower. Each
Borrower further waives any defense arising by reason of any disability or other defense of
any other Borrower (other than the defense that the Obligations shall have been fully and
finally performed and paid) or by reason of the cessation from any cause whatsoever of the
liability of any such Borrower in respect thereof.




     (c) Each Borrower hereby waives and agrees not to assert against an Agent, any Lender,
or the Letter of Credit Issuer: (i) any defense (legal or equitable), set-off, counterclaim,
or claim which such Borrower may now or at any time hereafter have against any other
Borrower or any other party liable under the Loan Documents; (ii) any defense, set-off,
counterclaim, or claim of any kind or nature available to any other Borrower against an
Agent, any Lender, or the Letter of Credit Issuer, arising directly or indirectly from the
present or future lack of perfection, sufficiency, validity, or enforceability of the
Obligations or any security therefor; (iii) any right or defense arising by reason of any
claim or defense based upon an election of remedies by an Agent, any Lender, or the Letter
of Credit Issuer under any applicable law; (iv) the benefit of any statute of limitations
affecting any other Borrower’s liability hereunder;




     (d) Each Borrower consents and agrees that, without notice to or by such Borrower and
without affecting or impairing the obligations of such Borrower hereunder, the Agents may
(subject to any requirement for consent of any of the Lenders to the extent required by this
Agreement), by action or inaction: (i) compromise, settle, extend the duration or the time
for the payment of, or discharge the performance of, or may refuse to or otherwise not
enforce the Loan Documents; (ii) release all or any one or more parties to any one or more
of the Loan Documents or grant other indulgences to any other Borrower in respect thereof;
(iii) amend or modify in any manner and at any time (or from time to time) any of the Loan
Documents; or (iv) release or substitute any Person liable for payment of the Obligations,
or enforce, exchange, release, or waive any security for the Obligations or any Guaranty of
the Obligations;


Each Borrower represents and warrants to the Agents and the Lenders that such Borrower is currently
informed of the financial condition of all other Borrowers and all other circumstances which a
diligent inquiry would reveal and which bear upon the risk of nonpayment of the Obligations. Each
Borrower further represents and warrants that such Borrower has read and understands the terms and
conditions of the Loan Documents. Each Borrower agrees that neither the Agents, any Lender, nor
the Letter of Credit Issuer has any responsibility to inform any Borrower of the financial
condition of any other Borrower or of any other circumstances which bear upon the risk of
nonpayment or nonperformance of the Obligations.




          Section 15.22 USA PATRIOT Act Notice. Each Lender and the Administrative Agent (for
itself and not on behalf of any Lender) hereby notifies Holdings and the Borrowers that pursuant to
the requirements of the USA PATRIOT Act, it is required to obtain, verify and record information
that identifies Holdings and the Borrowers, which information includes the name and address of
Holdings and the Borrowers and other information that will allow such




Loan And Security Agreement — Page 150




 









 







Lender or the Administrative Agent, as applicable, to identify Holdings and the Borrowers in
accordance with the USA PATRIOT Act.




[Remainder of page intentionally left blank]




Loan And Security Agreement — Page 151




 









 








     IN WITNESS WHEREOF, the parties have entered into this Agreement on the date first above
written.



	 	 	 	 	 	 	 
	 	 	FLAG INTERMEDIATE HOLDINGS CORPORATION,	 	 
	 
	 	 	 	 	 	 
	 

	 	by	 	/s/ M. ALI RASHID	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: M. Ali Rashid	 	
	 

	 	 	 	Title: President	 	 
	 
	 	 	 	 	 	 
	 	 	FLAG ACQUISITION CORPORATION,	 	 
	 
	 	 	 	 	 	 
	 

	 	by	 	/s/ M. ALI RASHID	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: M. Ali Rashid	 	 
	 

	 	 	 	Title: President	 	 
	 
	 	 	 	 	 	 
	 	 	METALS USA, INC.,	 	 
	 
	 	 	 	 	 	 
	 

	 	by	 	/S/ LAURENCO GONCALVES	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Laurenco Goncalves	 	 
	 

	 	 	 	Title: President and CEO	 	 






(Signature Page to Loan and Security Agreement)




 









 








	 	 	 	 	 
	 	 	 	 	ALLMET GP, INC.

	 	 	 	 	ALLMET LP, INC.

	 	 	 	 	INTERSTATE STEEL SUPPLY CO. OF
MARYLAND, INC.

	 	 	 	 	INTSEL GP, INC.

	 	 	 	 	INTSEL LP, INC.

	 	 	 	 	i-SOLUTIONS DIRECT, INC.

	 	 	 	 	JEFFREYS REAL ESTATE CORPORATION

	 	 	 	 	LEVINSON STEEL GP, INC.

	 	 	 	 	LEVINSON STEEL LP, INC.

	 	 	 	 	METALS RECEIVABLES CORPORATION

	 	 	 	 	METALS USA BUILDING PRODUCTS, L.P.

	 	 	 	 	By: Allmet GP, Inc., its General Partner

	 	 	 	 	METALS USA CARBON FLAT ROLLED, INC.

	 	 	 	 	METALS USA FINANCE CORP.

	 	 	 	 	METALS USA FLAT ROLLED CENTRAL, INC.

	 	 	 	 	METALS USA MANAGEMENT CO., L.P.

	 	 	 	 	By: MUSA GP, Inc., its General Partner

	 	 	 	 	METALS USA PLATES AND SHAPES,
NORTHEAST, L.P.

	 	 	 	 	By: Levinson Steel GP, Inc., its General Partner

	 	 	 	 	METALS USA PLATES AND SHAPES
SOUTHCENTRAL, INC.

	 	 	 	 	METALS USA PLATES AND SHAPES
SOUTHEAST, INC.

	 	 	 	 	METALS USA PLATES AND SHAPES

	 	 	 	 	SOUTHWEST, LIMITED PARTNERSHIP

	 	 	 	 	By: Intsel GP, Inc., its General Partner

	 	 	 	 	METALS USA REALTY COMPANY

	 	 	 	 	METALS USA SPECIALTY METALS
NORTHCENTRAL, INC.

	 	 	 	 	MUSA GP, INC.

	 	 	 	 	MUSA LP, INC.

	 	 	 	 	QUEENSBORO, L.L.C.

	 	 	 	 	By: Metals USA Plates and Shapes Southeast,

	 	 	 	 	Inc., its sole Member







	 	 	 	 	 	 	 
	 

	 	by	 	/s/ KEITH KOCI	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Keith Koci
	 	 
	 

	 	 	 	Title: Treasurer	 	 






 









 







	 	 	 	 	 	 	 
	 

	 	JEFFREYS STEEL HOLDINGS, L.L.C.
	 	 





	 	 	 	 	 	 	 
	 

	 	by	 	/s/ JOHN A. HAGEMAN	 	 
	 

	 	 
	 	 
	 

	 	 	 	Name: John A. Hageman	 	 
	 

	 	 	 	Title: Manager	 	 






(Signature Page to Loan and Security Agreement)





 









 








	 	 	 	 	 	 	 
	 	 	CREDIT SUISSE, CAYMAN
ISLANDS BRANCH,
individually and as
Administrative Agent,
Letter of Credit Issuer
and Swingline Lender,	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	/s/ ROBERT HETV	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Robert Hetv	 	 
	 

	 	 	 	Title: Director	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	/s/ CASSANDRA DROOGAN	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Cassandra Droogan	 	 
	 

	 	 	 	Title: Associate	 	 
	 
	 	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A.,
individually and as
Collateral Agent and
Letter of Credit Issuer	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	/s/ RICHARD LEVENSON	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Richard Levenson	 	 
	 

	 	 	 	Title: Senior Vice President	 	 






(Signature Page to Loan and Security Agreement)




 









 








LENDERS:




Tranche A Commitment:
   $35,000,000.00   



Tranche A-1 Commitment:
   $5,000,000.00   






	 	 	 	 	 	 	 
	 	 	NAME OF LENDER:  CREDIT SUISSE, CAYMAN ISLANDS BRANCH	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ JUDY SMITH 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:  Judy Smith	 	 
	 

	 	 	 	Title:    Director	 	 
	 


	 

	 	By:	 	/s/ CASSANDRA DROOGAN 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:  Cassandra Droogan	 	 
	 

	 	 	 	Title:    Associate	 	 




(Signature Page to Loan and Security Agreement)





 










 








LENDERS:




Tranche A Commitment:
   $35,000,000.00   



Tranche A-1 Commitment:
   $5,000,000.00   






	 	 	 	 	 	 	 
	 	 	NAME OF LENDER:  BANK OF AMERICA, N.A.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ ROBERT SCALZITTI 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:  Robert Scalzitti	 	 
	 

	 	 	 	Title:    Vice President	 	 
	 






(Signature Page to Loan and Security Agreement)





 










 








LENDERS:




Tranche A Commitment:
   $40,000,000.00   



Tranche A-1 Commitment:
   $0   






	 	 	 	 	 	 	 
	 	 	NAME OF LENDER:  GENERAL ELECTRIC CAPITAL CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ TOM D. CHAPMAN 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:  Tom D. Chapman	 	 
	 

	 	 	 	Title:    ONLY
AUTHORIZED SIGNATORY	 	 
	 






(Signature Page to Loan and Security Agreement)





 










 








LENDERS:




Tranche A Commitment:
   $30,000,000.00   



Tranche A-1 Commitment:
   $5,000,000.00   






	 	 	 	 	 	 	 
	 	 	NAME OF
LENDER:  GMAC COMMERCIAL FINANCE, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ JOSEPH SKAFEROWSKY 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:  Joseph Skaferowsky	 	 
	 

	 	 	 	Title:    Director	 	 
	 






(Signature Page to Loan and Security Agreement)





 










 








LENDERS:




Tranche A Commitment:
   $30,000,000.00   



Tranche A-1 Commitment:
   $2,500,000.00   






	 	 	 	 	 	 	 
	 	 	NAME OF LENDER:  WACHOVIA BANK, NATIONAL ASSOCIATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ GILL ELMORE 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:  Gill Elmore	 	 
	 

	 	 	 	Title:    Vice President	 	 
	 






(Signature Page to Loan and Security Agreement)





 










 








LENDERS:




Tranche A Commitment:
   $30,000,000.00   



Tranche A-1 Commitment:
   $5,500,000.00   






	 	 	 	 	 	 	 
	 	 	NAME OF
LENDER:  THE CIT GROUP / BUSINESS CREDIT, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ CARL GIORDANO 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:  Carl Giordano	 	 
	 

	 	 	 	Title:    Assistant Vice President	 	 
	 






(Signature Page to Loan and Security Agreement)





 










 








LENDERS:




Tranche A Commitment:
   $30,000,000.00   



Tranche A-1 Commitment:
   $2,000,000.00   






	 	 	 	 	 	 	 
	 	 	NAME OF LENDER:  WELLS FARGO FOOTHILL, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ DENNIS KING 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:  Dennis King	 	 
	 

	 	 	 	Title:    Vice President	 	 
	 






(Signature Page to Loan and Security Agreement)





 










 








LENDERS:




Tranche A Commitment:
   $27,500,000.00   



Tranche A-1 Commitment:
   $4,000,000.00   






	 	 	 	 	 	 	 
	 	 	NAME OF
LENDER:  NATIONAL CITY BUSINESS CREDIT, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ ANTHONY ALEXANDER 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:  Anthony Alexander	 	 
	 

	 	 	 	Title:    Vice
President	 	 
	 






(Signature Page to Loan and Security Agreement)





 










 








LENDERS:




Tranche A Commitment:
   $27,500,000.00   



Tranche A-1 Commitment:
    ————    






	 	 	 	 	 	 	 
	 	 	NAME OF
LENDER:  LESALLE BUSINESS CREDIT, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ THOMAS J. BRENNAN 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:  Thomas J. Brennan	 	 
	 

	 	 	 	Title:    First
Vice President	 	 
	 






(Signature Page to Loan and Security Agreement)





 










 








LENDERS:




Tranche A Commitment:
   $25,000,000.00   



Tranche A-1 Commitment:
    0     






	 	 	 	 	 	 	 
	 	 	NAME OF
LENDER:  MERRILL LYNCH CAPITAL, A DVISION OF MERRILL
LYNCH BUSINESS FINANCIAL SERVICE INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ RICHARD HOLSTON 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:  Richard Holston	 	 
	 

	 	 	 	Title:    Vice
President	 	 
	 






(Signature Page to Loan and Security Agreement)





 










 








LENDERS:




Tranche A Commitment:
   $17,500,000.00   



Tranche A-1 Commitment:
   $3,000,000.00   






	 	 	 	 	 	 	 
	 	 	NAME OF
LENDER:  PNC BANK, NATIONAL ASSOCIATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ JEANETTE VANDENBERGH 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:  Jeanette Vandenbergh	 	 
	 

	 	 	 	Title:    Vice
President	 	 
	 






(Signature Page to Loan and Security Agreement)





 










 








LENDERS:




Tranche A Commitment:
   $12,500,000.00   



Tranche A-1 Commitment:
   $3,000,000.00   






	 	 	 	 	 	 	 
	 	 	NAME OF
LENDER:  HSBC BUSINESS CREDIT (USA) INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ JIMMY SCHWARTZ 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:  Jimmy Schwartz	 	 
	 

	 	 	 	Title:    Vice
President	 	 
	 






(Signature Page to Loan and Security Agreement)





 










 








LENDERS:




Tranche A Commitment:
   $15,000,000.00   



Tranche A-1 Commitment:
     0     






	 	 	 	 	 	 	 
	 	 	NAME OF
LENDER:  CITIZENS BUSINESS CREDIT, a division of
Citizens Leasing Corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ TIMOTHY J. LOHN 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:  Timothy J. Lohn	 	 
	 

	 	 	 	Title:    Senior Vice President	 	 
	 






(Signature Page to Loan and Security Agreement)





 










 








LENDERS:




Tranche A Commitment:
   $5,000,000.00   



Tranche A-1 Commitment:
     0     






	 	 	 	 	 	 	 
	 	 	NAME OF
LENDER:  UBS LOAN FINANCE LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ RICHARD L. TAVROW 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:  Richard L. Tavrow	 	 
	 

	 	 	 	Title:    Director	 	 
	 

	 	 	 	             Banking
Products Services, US	 	 
	 


	 

	 	By:	 	/s/ JOSELIN FERNANDES 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:  Joselin Fernandes	 	 
	 

	 	 	 	Title:    Associate
Director	 	 
	 

	 	 	 	             Banking
Products Services, US	 	 




(Signature Page to Loan and Security Agreement)





 










 








LENDERS:




Tranche A Commitment:
   $15,000,000.00   



Tranche A-1 Commitment:
       $0       






	 	 	 	 	 	 	 
	 	 	NAME OF
LENDER:  JPMORGAN CHASE BANK, N.A.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ TIMOTHY J. WHITEFOOT 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:  Timothy J. Whitefoot	 	 
	 

	 	 	 	Title:    Vice
President	 	 
	 






(Signature Page to Loan and Security Agreement)





 










 








LENDERS:




Tranche A Commitment:
   $15,000,000.00   



Tranche A-1 Commitment:
      $0      






	 	 	 	 	 	 	 
	 	 	NAME OF
LENDER:  UPS CAPITAL CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ JOHN P. HOLLOWAY 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:  John P. Holloway	 	 
	 

	 	 	 	Title:    Director
of Portfolio Management	 	 
	 






(Signature Page to Loan and Security Agreement)





 










 








LENDERS:




Tranche A Commitment:
   $7,500,000.00   



Tranche A-1 Commitment:
      $0      






	 	 	 	 	 	 	 
	 	 	NAME OF
LENDER:  RZB FINANCE LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ ERIC SALAT 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:  Eric Salat	 	 
	 

	 	 	 	Title:    Group
Vice President	 	 
	 


	 

	 	By:	 	/s/ HERMINE KIROLOS 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:  Hermine Kirolos	 	 
	 

	 	 	 	Title:    Group
Vice President	 	 




(Signature Page to Loan and Security Agreement)





 










 








LENDERS:




Tranche A Commitment:
   $7,500,000.00   



Tranche A-1 Commitment:
   $0   






	 	 	 	 	 	 	 
	 	 	NAME OF LENDER:  WEBSTER BUSINESS CREDIT CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ GORDON MASSAVE 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:  Gordon Massave	 	 
	 

	 	 	 	Title:    AVP	 	 
	 






(Signature Page to Loan and Security Agreement)