EX-4.1





Exhibit 4.1



Execution Version




SECOND AMENDED AND RESTATED CREDIT AGREEMENT




dated as of



September 18, 2008



among



GLOBE METALLURGICAL INC.,

as Borrower,



ALABAMA SAND AND GRAVEL, INC.,

LAUREL FORD RESOURCES, INC. and

WEST VIRGINIA ALLOYS, INC.

as Subsidiary Guarantors,




GLOBE SPECIALTY METALS, INC.

(f/k/a International Metal Enterprises, Inc.),

as Parent




THE LENDERS PARTY HERETO




SOCIÉTÉ GÉNÉRALE,

as Sole Arranger, Administrative Agent, Issuing Bank,

Swingline Lender and Collateral Agent




 









 





TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 
	 	 	 	 	 	 
	ARTICLE I DEFINITIONS	 	 	1	 
	Section 1.01
	 	Defined Terms	 	 	1	 
	Section 1.02
	 	Classification of Loans and Borrowings	 	 	1	 
	Section 1.03
	 	Terms Generally	 	 	1	 
	Section 1.04
	 	Accounting Terms; GAAP	 	 	1	 
	 
	 	 	 	 	 	 
	ARTICLE II THE CREDITS	 	 	2	 
	Section 2.01
	 	Existing Loans; Commitments	 	 	2	 
	Section 2.02
	 	Loans and Borrowings	 	 	2	 
	Section 2.03
	 	Requests for Borrowings	 	 	3	 
	Section 2.04
	 	Swingline Loans	 	 	3	 
	Section 2.05
	 	Letters of Credit	 	 	5	 
	Section 2.06
	 	Funding of Borrowings	 	 	9	 
	Section 2.07
	 	Interest Elections	 	 	9	 
	Section 2.08
	 	Termination of Commitments	 	 	10	 
	Section 2.09
	 	Repayment and Amortization of Loans; Evidence of Debt	 	 	11	 
	Section 2.10
	 	Prepayment of Loans	 	 	12	 
	Section 2.11
	 	Fees	 	 	14	 
	Section 2.12
	 	Interest	 	 	15	 
	Section 2.13
	 	Alternate Rate of Interest	 	 	16	 
	Section 2.14
	 	Increased Costs	 	 	16	 
	Section 2.15
	 	Break Funding Payments	 	 	17	 
	Section 2.16
	 	Taxes	 	 	18	 
	Section 2.17
	 	Payments Generally; Allocation of Proceeds; Sharing of Setoffs	 	 	19	 
	Section 2.18
	 	Mitigation Obligations; Replacement of Lenders	 	 	22	 
	Section 2.19
	 	Returned Payments	 	 	22	 
	 
	 	 	 	 	 	 
	ARTICLE III CONDITIONS PRECEDENT	 	 	23	 
	Section 3.01
	 	Effective Date	 	 	23	 
	Section 3.02
	 	Each Credit Event	 	 	27	 
	 
	 	 	 	 	 	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES	 	 	27	 
	Section 4.01
	 	Organization; Powers	 	 	27	 
	Section 4.02
	 	Authorization; Enforceability	 	 	27	 
	Section 4.03
	 	Approvals; No Conflicts	 	 	28	 
	Section 4.04
	 	Financial Condition; No Material Adverse Change	 	 	28	 
	Section 4.05
	 	Properties	 	 	29	 
	Section 4.06
	 	Litigation and Environmental Matters	 	 	29	 
	Section 4.07
	 	Compliance with Laws and Agreements; Absence of Default	 	 	29	 
	Section 4.08
	 	Investment Company Status	 	 	30	 
	Section 4.09
	 	Taxes	 	 	30	 
	Section 4.10
	 	ERISA	 	 	30	 






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TABLE OF CONTENTS
(continued)





	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 
	 	 	 	 	 	 
	Section 4.11
	 	Disclosure	 	 	30	 
	Section 4.12
	 	Material Agreements	 	 	30	 
	Section 4.13
	 	Solvency	 	 	31	 
	Section 4.14
	 	Insurance	 	 	31	 
	Section 4.15
	 	Capitalization and Subsidiaries	 	 	31	 
	Section 4.16
	 	Security Interest in Collateral	 	 	31	 
	Section 4.17
	 	Labor Disputes	 	 	32	 
	Section 4.18
	 	Affiliate Transactions	 	 	32	 
	Section 4.19
	 	Regulation U	 	 	32	 
	 
	 	 	 	 	 	 
	ARTICLE V AFFIRMATIVE COVENANTS	 	 	32	 
	Section 5.01
	 	Financial Statements; Borrowing Base and Other Information	 	 	32	 
	Section 5.02
	 	Notices of Material Events	 	 	36	 
	Section 5.03
	 	Existence; Conduct of Business	 	 	37	 
	Section 5.04
	 	Payment of Obligations	 	 	37	 
	Section 5.05
	 	Maintenance of Properties	 	 	37	 
	Section 5.06
	 	Books and Records; Inspection Rights	 	 	37	 
	Section 5.07
	 	Compliance with Laws	 	 	37	 
	Section 5.08
	 	Use of Proceeds	 	 	37	 
	Section 5.09
	 	Insurance	 	 	38	 
	Section 5.10
	 	Casualty and Condemnation	 	 	38	 
	Section 5.11
	 	Field Examinations	 	 	38	 
	Section 5.12
	 	Deposit Accounts	 	 	38	 
	Section 5.13
	 	Additional Collateral; Further Assurances	 	 	39	 
	Section 5.14
	 	Required Hedging	 	 	40	 
	Section 5.15
	 	Annual Lenders’ Meeting	 	 	40	 
	Section 5.16
	 	Production Sold Forward	 	 	40	 
	Section 5.17
	 	Post Closing Obligations	 	 	40	 
	 
	 	 	 	 	 	 
	ARTICLE VI NEGATIVE COVENANTS	 	 	41	 
	Section 6.01
	 	Indebtedness	 	 	41	 
	Section 6.02
	 	Liens	 	 	42	 
	Section 6.03
	 	Fundamental Changes	 	 	43	 
	Section 6.04
	 	Investments, Loans, Advances, Guarantees and Acquisitions	 	 	43	 
	Section 6.05
	 	Asset Sales	 	 	45	 
	Section 6.06
	 	Sale and Leaseback Transactions	 	 	46	 
	Section 6.07
	 	Hedging Agreements	 	 	46	 
	Section 6.08
	 	Restricted Payments; Certain Payments of Indebtedness	 	 	46	 
	Section 6.09
	 	Transactions with Affiliates	 	 	47	 
	Section 6.10
	 	Restrictive Agreements	 	 	48	 
	Section 6.11
	 	Amendment of Material Documents	 	 	48	 
	Section 6.12
	 	Capital Expenditures	 	 	48	 
	Section 6.13
	 	Financial Covenants	 	 	48	 






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TABLE OF CONTENTS
(continued)





	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 
	 	 	 	 	 	 
	Section 6.14
	 	Accounting Changes	 	 	49	 
	 
	 	 	 	 	 	 
	ARTICLE VII EVENTS OF DEFAULT	 	 	49	 
	 
	 	 	 	 	 	 
	ARTICLE VIII THE AGENTS	 	 	52	 
	 
	 	 	 	 	 	 
	ARTICLE IX MISCELLANEOUS	 	 	54	 
	Section 9.01
	 	Notices	 	 	54	 
	Section 9.02
	 	Waivers; Amendments	 	 	56	 
	Section 9.03
	 	Expenses; Indemnity; Damage Waiver	 	 	58	 
	Section 9.04
	 	Successors and Assigns	 	 	60	 
	Section 9.05
	 	Survival	 	 	63	 
	Section 9.06
	 	Counterparts; Integration; Effectiveness	 	 	63	 
	Section 9.07
	 	Severability	 	 	63	 
	Section 9.08
	 	Right of Setoff	 	 	63	 
	Section 9.09
	 	Governing Law; Jurisdiction; Consent to Service of Process	 	 	64	 
	Section 9.10
	 	WAIVER OF JURY TRIAL	 	 	65	 
	Section 9.11
	 	Headings	 	 	65	 
	Section 9.12
	 	Confidentiality	 	 	65	 
	Section 9.13
	 	Several Obligations; Nonreliance; Violation of Law	 	 	66	 
	Section 9.14
	 	USA PATRIOT Act	 	 	66	 
	Section 9.15
	 	Appointment for Perfection	 	 	66	 
	Section 9.16
	 	Amendment, Restatement and
Rearrangement of Existing Credit Agreement	 	 	66	 
	 
	 	 	 	 	 	 
	ARTICLE X SUBSIDIARY GUARANTY	 	 	66	 
	Section 10.01
	 	Guaranty	 	 	66	 
	Section 10.02
	 	Guaranty of Payment; Continuing Guaranty	 	 	67	 
	Section 10.03
	 	No Discharge or Diminishment of Subsidiary Guaranty	 	 	67	 
	Section 10.04
	 	Defenses Waived	 	 	68	 
	Section 10.05
	 	Rights of Subrogation	 	 	68	 
	Section 10.06
	 	Reinstatement; Stay of Acceleration	 	 	68	 
	Section 10.07
	 	Information	 	 	69	 
	Section 10.08
	 	Taxes	 	 	69	 
	Section 10.09
	 	Maximum Liability	 	 	69	 
	Section 10.10
	 	Contribution	 	 	70	 
	Section 10.11
	 	Liability Cumulative	 	 	70	 
	 
	 	 	 	 	 	 
	ARTICLE XI COVENANTS OF PARENT	 	 	70	 
	Section 11.01
	 	Limitation on Certain Acquisitions by the Parent	 	 	70	 
	Section 11.02
	 	Capital Contribution Agreement	 	 	71	 







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ANNEX:




Annex A—Definitions




SCHEDULES:




Schedule 2.01—Commitments

Schedule 4.05—Properties

Schedule 4.06—Disclosed Matters

Schedule 4.12—Material Agreements

Schedule 4.14—Insurance

Schedule 4.15—Capitalization and Subsidiaries

Schedule 4.18—Affiliate Transactions

Schedule 6.01—Existing Indebtedness

Schedule 6.02—Existing Liens

Schedule 6.04—Existing Investments

Schedule 6.10—Existing Restrictions




EXHIBITS:




Exhibit A—Form of Assignment Agreement

Exhibit B—Form of Opinion of Borrower’s Counsel

Exhibit C—Form of Borrowing Base Certificate

Exhibit D—Form of Compliance Certificate

Exhibit E—Form of Joinder Agreement

Exhibit F—Form of Borrowing Request





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SECOND AMENDED AND RESTATED CREDIT AGREEMENT




     This SECOND AMENDED AND RESTATED CREDIT AGREEMENT is dated as of September 18, 2008, and is
entered into by and among GLOBE METALLURGICAL INC., a Delaware corporation, as the Borrower,
ALABAMA SAND AND GRAVEL, INC., a Delaware corporation, LAUREL FORD RESOURCES, INC., a Kentucky
corporation, WEST VIRGINIA ALLOYS, INC., a Delaware corporation, as Subsidiary Guarantors, GLOBE
SPECIALTY METALS, INC. (f/k/a International Metal Enterprises, Inc.), as Parent, the LENDERS FROM
TIME TO TIME PARTY HERETO, as Lenders, and SOCIÉTÉ GÉNÉRALE, as Sole Arranger, Administrative
Agent, Issuing Bank, Swingline Lender and Collateral Agent.



     The parties hereto hereby agree to amend and restate the Existing Credit Agreement in its
entirety as follows:



ARTICLE I




Definitions




     Section 1.01 Defined Terms. Capitalized terms used in this Agreement shall have the
meanings specified therefor on Annex A.



     Section 1.02 Classification of Loans and Borrowings. For purposes of this Agreement,
Loans may be classified and referred to by Class (e.g., a “Revolving Loan”) or by Type
(e.g., a “LIBOR Loan”) or by Class and Type (e.g., a “LIBOR Revolving Loan”).
Borrowings also may be classified and referred to by Class (e.g., a “Revolving Borrowing”)
or by Type (e.g., a “LIBOR Borrowing”) or by Class and Type (e.g., a “LIBOR Revolving
Borrowing”).



     Section 1.03 Terms Generally. The definitions of terms herein shall apply equally to
the singular and plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words “include”,
“includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The
word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the
context requires otherwise (a) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument or other document as
from time to time amended, supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference herein to any Person
shall be construed to include such Person’s successors and permitted assigns, (c) the words
“herein”, “hereof and “hereunder”, and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all references herein to
Articles, Sections, Annexes, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Annexes, Exhibits and Schedules to, this Agreement and (e) the words “asset” and
“property” shall be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities, accounts and contract
rights.



     Section 1.04 Accounting Terms; GAAP. Except as otherwise expressly provided herein,
all terms of an accounting or financial nature shall be construed in accordance with
GAAP, as in effect from time to time; provided that, if the Borrower notifies the
Administrative



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Agent that the Borrower requests an amendment to any provision hereof to eliminate
the effect of any change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the Borrower that the
Required Lenders request an amendment to any provision hereof for such purpose), regardless of
whether any such notice is given before or after such change in GAAP or in the application thereof,
then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been withdrawn or such
provision amended in accordance herewith.



ARTICLE II




The Credits




     Section 2.01 Existing Loans; Commitments. Subject to the terms and conditions set
forth herein, (a) each Revolving Lender severally agrees, on the terms and conditions set forth in
this Agreement, to acquire by assignment pursuant to the Master Assignment the Revolving Loans
under the Existing Credit Agreement and make Revolving Loans to the Borrower from time to time
during the Availability Period in an aggregate principal amount that will not result in (i) such
Lender’s Revolving Exposure exceeding such Lender’s Revolving Commitment or (ii) the total
Revolving Exposures exceeding the lesser of (x) the total Revolving Commitments or (y) the
Borrowing Base, and (b) each Term Lender severally agrees, on the terms and conditions set forth in
this Agreement, to acquire by assignment pursuant to the Master Assignment the Term Loans under the
Existing Credit Agreement and make a single Term Loan to the Borrower, in an aggregate amount equal
to the amount of its Term Loan Commitment on the Effective Date. Within the foregoing limits and
subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow
Revolving Loans. Amounts repaid in respect of Term Loans may not be reborrowed.



     Section 2.02 Loans and Borrowings.



          (a) Each Loan (other than a Swingline Loan) shall be made as part of a Borrowing consisting of
Loans of the same Class and Type made by the Lenders ratably in accordance with their respective
Commitments of the applicable Class. Any Swingline Loan shall be made in accordance with the
procedures set forth in Section 2.04. The Term Loans shall amortize as set forth in Section 2.09.



          (b) Subject to Section 2.13, each Borrowing shall be comprised entirely of ABR Loans or LIBOR
Loans as the Borrower may request in accordance herewith. Each Swingline Loan shall be an ABR
Loan. Each Lender at its option may make any LIBOR Loan by causing any domestic or foreign branch
or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not
affect the obligation of the Borrower to repay such Loan in accordance with the terms of this
Agreement.



          (c) At the commencement of each Interest Period for any LIBOR Revolving Borrowing, such
Borrowing shall be in an aggregate amount that is an integral multiple of $100,000 and not less than $500,000. At the time that each ABR Revolving Borrowing is made,
such Borrowing shall be in an aggregate amount that is an integral multiple of $100,000 and
not



-2-









 








less than $500,000; provided that an ABR Revolving Borrowing may be in an aggregate amount that
is equal to the entire unused balance of the total Revolving Commitments. Each Swingline Loan
shall be in an amount that is an integral multiple of $50,000 and not less than $100,000.
Borrowings of more than one Type and Class may be outstanding at the same time; provided that there
shall not be more than a total of ten (10) LIBOR Borrowings outstanding at any time.



          (d) Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled
to request, or to elect to convert or continue, any Borrowing as a LIBOR Borrowing if the Interest
Period requested with respect thereto would end after the Maturity Date.



     Section 2.03 Requests for Borrowings. To request a Borrowing, the Borrower shall
notify the Administrative Agent of such request either by delivering (by hand or facsimile) to the
Administrative Agent a Borrowing Request signed by the Borrower or by telephone in each case (a) in
the case of a LIBOR Borrowing, not later than 1:00 p.m. (New York time) three Business Days before
the date of the proposed Borrowing or (b) in the case of an ABR Borrowing, not later than 12:00
p.m. (New York time) on the date of the proposed Borrowing. Each such telephonic request for a
Borrowing shall be irrevocable and shall be confirmed promptly by hand delivery or facsimile to the
Administrative Agent of a Borrowing Request signed by the Borrower. Each such telephonic request
and Borrowing Request shall specify the following information in compliance with Section 2.01:



               (i) the Class and aggregate amount of the requested Borrowing and a breakdown of the separate
wires comprising such Borrowing,



               (ii) the date of such Borrowing, which shall be a Business Day;



               (iii) whether such Borrowing is to be an ABR Borrowing or a LIBOR Borrowing; and



               (iv) in the case of a LIBOR Borrowing, the initial Interest Period to be applicable thereto,
which shall be a period contemplated by the definition of the term “Interest Period.”


If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be an
ABR Borrowing. If no Interest Period is specified with respect to any requested LIBOR Borrowing,
then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.
Promptly following receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the amount of such
Lender’s Loan to be made as part of the requested Borrowing.




     Section 2.04 Swingline Loans.



          (a) Subject to the terms and conditions set forth herein, the Swingline Lender agrees to make
Swingline Loans to the Borrower, from time to time during the Availability Period, in an aggregate
principal amount at any time outstanding that will not result in (x) the aggregate principal amount
of outstanding Swingline Loans exceeding $3,000,000 or (y) the sum
of the total Revolving Exposures exceeding the lesser of the total Revolving Commitments and



-3-









 







the Borrowing Base; provided that the Swingline Lender shall not be required to make a Swingline
Loan to refinance an outstanding Swingline Loan. Within the foregoing limits and subject to the
terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Swingline
Loans. To request a Swingline Loan, the Borrower shall notify the Administrative Agent of such
request by telephone (confirmed by facsimile) not later than 1:00 p.m. (New York time) on the day
of the proposed Swingline Loan. Each such notice shall be irrevocable and shall specify the
requested date (which shall be a Business Day) and amount of the requested Swingline Loan. The
Administrative Agent will promptly advise the Swingline Lender of any such notice received from the
Borrower. The Swingline Lender shall make each Swingline Loan available to the Borrower by means
of a credit to the Funding Account (or, in the case of a Swingline Loan made to finance the
reimbursement of an LC Disbursement as provided in Section 2.05(e), by remittance to the Issuing
Bank, and in the case of repayment of another Loan or fees or expenses as provided by Section
2.17(c), by remittance to the Administrative Agent to be distributed to the Lenders) by 2:00 p.m.
(New York time) on the requested date of such Swingline Loan.



          (b) The Swingline Lender may, by written notice given to the Administrative Agent not later
than 9:00 a.m. (New York time) on any Business Day, require the Revolving Lenders to acquire
participations on such Business Day in all or a portion of the outstanding Swingline Loans. Such
notice shall specify the aggregate amount of Swingline Loans in which the Revolving Lenders will
participate. Promptly upon receipt of such notice, the Administrative Agent will give notice
thereof to each Revolving Lender, specifying in such notice such Lender’s Applicable Percentage of
such Swingline Loans. Each Revolving Lender hereby absolutely and unconditionally agrees, upon
receipt of notice as provided above, to pay to the Administrative Agent, for the account of the
Swingline Lender, such Lender’s Applicable Percentage of such Swingline Loans. Each Revolving
Lender acknowledges and agrees that its obligation to acquire participations in Swingline Loans
pursuant to this paragraph is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including the occurrence and continuance of a Default or a reduction or
termination of the Revolving Commitments, and that each such payment shall be made without any
offset, abatement, withholding or reduction whatsoever. Each Revolving Lender shall comply with
its obligation under this paragraph by wire transfer of immediately available funds, in the same
manner as provided in Section 2.06 with respect to Loans made by such Lender (and Section 2.06
shall apply, mutatis mutandis, to such payment obligations of the Revolving Lenders), and the
Administrative Agent shall promptly pay to the Swingline Lender the amounts so received by it from
the Revolving Lenders. The Administrative Agent shall notify the Borrower of any participations in
any Swingline Loans acquired pursuant to this paragraph, and thereafter payments in respect of such
Swingline Loans shall be made to the Administrative Agent and not to the Swingline Lender. Any
amounts received by the Swingline Lender from the Borrower (or other party on behalf of the
Borrower) in respect of a Swingline Loan after receipt by the Swingline Lender of the proceeds of a
sale of participations therein shall be promptly remitted to the Administrative Agent; any such
amounts received by the Administrative Agent shall be promptly remitted by the Administrative Agent
to the Revolving Lenders that shall have made their payments pursuant to this paragraph and to the
Swingline Lender, as their interests may appear; provided that any such payment so remitted shall
be repaid to the Swingline Lender or to the Administrative Agent, as applicable, if and to the
extent such payment is required to be refunded to the Borrower for any reason. The purchase



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of participations in a Swingline Loan pursuant to this paragraph shall not relieve the
Borrower of any default in the payment thereof.



     Section 2.05 Letters of Credit.



          (a) General. Subject to the terms and conditions set forth herein, the Borrower may
request the issuance of Letters of Credit for its own account, in a form reasonably acceptable to
the Administrative Agent and the Issuing Bank, at any time and from time to time during the
Availability Period. In the event of any inconsistency between the terms and conditions of this
Agreement and the terms and conditions of any form of letter of credit application or other
agreement submitted by the Borrower to, or entered into by the Borrower with, the Issuing Bank
relating to any Letter of Credit, the terms and conditions of this Agreement shall control.



          (b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To request
the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter
of Credit), the Borrower shall hand deliver or facsimile (or transmit by electronic communication,
if arrangements for doing so have been approved by the Issuing Bank) to the Issuing Bank and the
Administrative Agent, prior to 9:00 am (New York time) on the requested date of issuance,
amendment, renewal or extension, a notice requesting the issuance of a Letter of Credit, or
identifying the Letter of Credit to be amended, renewed or extended, and specifying the date of
issuance, amendment, renewal or extension (which shall be a Business Day), the date on which such
Letter of Credit is to expire (which shall comply with Section 2.05(c)), the amount of such Letter
of Credit, the name and address of the beneficiary thereof and such other information as shall be
necessary to prepare, amend, renew or extend such Letter of Credit. If requested by the Issuing
Bank, the Borrower also shall submit a letter of credit application on the Issuing Bank’s standard
form in connection with any request for a Letter of Credit. A Letter of Credit shall be issued,
amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of each
Letter of Credit the Borrower shall be deemed to represent and warrant that), after giving effect
to such issuance, amendment, renewal or extension (i) the LC Exposure shall not exceed $10,000,000
and (ii) the total Revolving Exposures shall not exceed the lesser of the total Revolving
Commitments and the Borrowing Base.



          (c) Expiration Date. Each Letter of Credit shall expire at or prior to the close of
business on the earlier of (i) the date one year after the date of the issuance of such Letter of
Credit (or, in the case of any renewal or extension thereof, one year after such renewal or
extension) and (ii) the date that is five Business Days prior to the Maturity Date.



          (d) Participations. By the issuance of a Letter of Credit (or an amendment to a
Letter of Credit increasing the amount thereof) and without any further action on the part of the
Issuing Bank or the Revolving Lenders, the Issuing Bank hereby grants to each Revolving Lender, and
each Revolving Lender hereby acquires from the Issuing Bank, a participation in such Letter of
Credit equal to such Lender’s Applicable Percentage of the aggregate amount available to be drawn
under such Letter of Credit. In consideration and in furtherance of the foregoing, each Revolving
Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the
account of the Issuing Bank, such Lender’s Applicable Percentage



-5-









 







of each LC Disbursement made by the Issuing Bank and not reimbursed by the Borrower on the
date due as provided in Section 2.05(e), or of any reimbursement payment required to be refunded to
the Borrower for any reason. Each Revolving Lender acknowledges and agrees that its obligation to
acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and
unconditional and shall not be affected by any circumstance whatsoever, including any amendment,
renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or
reduction or termination of the Commitments, and that each such payment shall be made without any
offset, abatement, withholding or reduction whatsoever.



          (e) Reimbursement. If the Issuing Bank shall make any LC Disbursement in respect of a
Letter of Credit, the Borrower shall reimburse such LC Disbursement by paying to the Administrative
Agent an amount equal to such LC Disbursement not later than 11:00 a.m. (New York time) on the date
that such LC Disbursement is made, if the Borrower shall have received notice of such LC
Disbursement prior to 9:00 a.m. (New York time) on such date, or, if such notice has not been
received by the Borrower prior to such time on such date, then not later than 11:00 a.m. (New York
time) on (i) the Business Day that the Borrower receives such notice, if such notice is received
prior to 9:00 a.m. (New York time) on the day of receipt, or (ii) the Business Day immediately
following the day that the Borrower receives such notice, if such notice is not received prior to
such time on the day of receipt; provided that the Borrower may, subject to the conditions to
borrowing set forth herein, request in accordance with Section 2.03 or Section 2.04 that such
payment be financed with an ABR Revolving Borrowing or Swingline Loan in an equivalent amount and,
to the extent so financed, the Borrower’s obligation to make such payment shall be discharged and
replaced by the resulting ABR Revolving Borrowing or Swingline Loan. If the Borrower fails to make
such payment when due, the Administrative Agent shall notify each Revolving Lender of the
applicable LC Disbursement, the payment then due from the Borrower in respect thereof and such
Lender’s Applicable Percentage thereof. Promptly following receipt of such notice, each Revolving
Lender shall pay to the Administrative Agent its Applicable Percentage of the payment then due from
the Borrower, in the same manner as provided in Section 2.06 with respect to Loans made by such
Lender (and Section 2.06 shall apply, mutatis mutandis, to such payment obligations of the
Revolving Lenders), and the Administrative Agent shall promptly pay to the Issuing Bank the amounts
so received by it from the Revolving Lenders. Promptly following receipt by the Administrative
Agent of any payment from the Borrower pursuant to this paragraph, the Administrative Agent shall
distribute such payment to the Issuing Bank or, to the extent that Revolving Lenders have made
payments pursuant to this paragraph to reimburse the Issuing Bank, then to such Lenders and the
Issuing Bank as their interests may appear. Any payment made by a Revolving Lender pursuant to
this paragraph to reimburse the Issuing Bank for any LC Disbursement (other than the funding of ABR
Revolving Loans or a Swingline Loan as contemplated above) shall not constitute a Loan and shall
not relieve the Borrower of its obligation to reimburse such LC Disbursement.



          (f) Obligations Absolute. The Borrower’s obligation to reimburse LC Disbursements as
provided in Section 2.05(e) shall be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit
or this Agreement, or any term or provision therein, (ii)any draft or other document presented
under a Letter of Credit proving to be forged, fraudulent or invalid in any



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respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by
the Issuing Bank under a Letter of Credit against presentation of a draft or other document that
does not substantially comply with the terms of such Letter of Credit, or (iv) any other event or
circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the
provisions of this Section, constitute a legal or equitable discharge of, or provide a right of
setoff against, the Borrower’s obligations hereunder. Neither the Administrative Agent, the
Revolving Lenders nor the Issuing Bank, nor any of their Related Parties, shall have any liability
or responsibility by reason of or in connection with the issuance or transfer of any Letter of
Credit or any payment or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or
delay in transmission or delivery of any draft, notice or other communication under or relating to
any Letter of Credit (including any document required to make a drawing thereunder), any error in
interpretation of technical terms or any consequence arising from causes beyond the control of the
Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from
liability to the Borrower to the extent of any direct damages (as opposed to consequential damages,
claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable
law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise care when
determining whether drafts and other documents presented under a Letter of Credit comply with the
terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or
willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent
jurisdiction), the Issuing Bank shall be deemed to have exercised care in each such determination.
In furtherance of the foregoing and without limiting the generality thereof, the parties agree
that, with respect to documents presented which appear on their face to be in substantial
compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion,
either accept and make payment upon such documents without responsibility for further
investigation, regardless of any notice or information to the contrary, or refuse to accept and
make payment upon such documents if such documents are not in strict compliance with the terms of
such Letter of Credit.



          (g) Disbursement Procedures. The Issuing Bank shall, promptly following its receipt
thereof, examine all documents purporting to represent a demand for payment under a Letter of
Credit. The Issuing Bank shall promptly notify the Administrative Agent and the Borrower by
telephone (confirmed by facsimile) of such demand for payment and whether the Issuing Bank has made
or will make an LC Disbursement thereunder; provided that any failure to give or delay in giving
such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the
Revolving Lenders with respect to any such LC Disbursement.



          (h) Interim Interest. If the Issuing Bank shall make any LC Disbursement, then,
unless the Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement
is made, the unpaid amount thereof shall bear interest, for each day from and including the date
such LC Disbursement is made to but excluding the date that the Borrower reimburses such LC
Disbursement, at the rate per annum then applicable to ABR Revolving Loans; provided that, if the
Borrower fails to reimburse such LC Disbursement when due pursuant to Section 2.05(e), then Section
2.12(c) shall apply. Interest accrued pursuant to this paragraph in respect of any LC Disbursement
shall be due and payable at the time such LC Disbursement is reimbursed and shall be for the
account of the Issuing Bank, except that interest accrued on and after the date of payment by any
Revolving Lender pursuant to Section 2.05(e) to



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reimburse the Issuing Bank shall be for the account of such Lender to the extent of such
payment.



          (i) Replacement of the Issuing Bank. The Issuing Bank may be replaced at any time by
written agreement among the Borrower, the Administrative Agent, the replaced Issuing Bank and the
successor Issuing Bank. The Administrative Agent shall notify the Revolving Lenders of any such
replacement of the Issuing Bank. At the time any such replacement shall become effective, the
Borrower shall pay all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to
Section 2.11(b). From and after the effective date of any such replacement, (i) the successor
Issuing Bank shall have all the rights and obligations of the Issuing Bank under this Agreement
with respect to Letters of Credit to be issued thereafter and (ii) references herein to the term
“Issuing Bank” shall be deemed to refer to such successor or to any previous Issuing Bank,
or to such successor and all previous Issuing Banks, as the context shall require. After the
replacement of an Issuing Bank hereunder, the replaced issuing Bank shall remain a party hereto and
shall continue to have all the rights and obligations of an Issuing Bank under this Agreement with
respect to Letters of Credit issued by it prior to such replacement, but shall not be required to
issue additional Letters of Credit.



          (j) Cash Collateralization. If any Event of Default shall occur and be continuing, on
the Business Day that the Borrower receives notice from the Administrative Agent or the Required
Revolving Lenders (or, if the maturity of the Loans has been accelerated, Revolving Lenders with LC
Exposure representing greater than 50% of the total LC Exposure) demanding the deposit of cash
collateral pursuant to this paragraph, the Borrower shall deposit in an account with the
Administrative Agent, in the name of the Administrative Agent and for the benefit of the Revolving
Lenders (the “LC Collateral Account”), an amount in cash equal to 103% of the LC Exposure
as of such date plus accrued and unpaid interest thereon; provided that the obligation to deposit
such cash collateral shall become effective immediately, and such deposit shall become immediately
due and payable, without demand or other notice of any kind, upon the occurrence of any Event of
Default with respect to the Borrower described in clause (h) or (i) of Article VII. Such deposit
shall be held by the Administrative Agent as collateral for the payment and performance of the
Secured Obligations. The Administrative Agent shall have exclusive dominion and control, including
the exclusive right of withdrawal, over such account and the Borrower hereby grants the
Administrative Agent a security interest in the LC Collateral Account. Other than any interest
earned on the investment of such deposits, which investments shall be made at the option and sole
discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall
not bear interest. Interest or profits, if any, on such investments shall accumulate in such
account. Moneys in such account shall be applied by the Administrative Agent to reimburse the
Issuing Bank for LC Disbursements for which it has not been reimbursed and, to the extent not so
applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for
the LC Exposure at such time or, if the maturity of the Loans has been accelerated (but subject to
the consent of the Required Revolving Lenders, be applied to satisfy other Secured Obligations. If
the Borrower is required to provide an amount of cash collateral hereunder as a result of the
occurrence of an Event of Default, such amount (to the extent not applied as aforesaid) shall be
returned to the Borrower within three Business Days after all such Events of Default have been
cured or waived.



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     Section 2.06 Funding of Borrowings.



          (a) Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof
by wire transfer of immediately available funds by 3:00 p.m. (New York time) to the account of the
Administrative Agent most recently designated by it for such purpose by notice to the Lenders in an
amount equal to such Lender’s Applicable Percentage; provided that Swingline Loans shall be made as
provided in Section 2.04. The Administrative Agent will make such Loans available to the Borrower
by promptly crediting the amounts so received, in like funds, to the Funding Account; provided that
ABR Revolving Loans made to finance the reimbursement of an LC Disbursement as provided in Section
2.05(e) shall be remitted by the Administrative Agent to the Issuing Bank.



          (b) Unless the Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing that such Lender will not make available to the Administrative Agent
such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has
made such share available on such date in accordance with Section 2.06(a) and may, in reliance upon
such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender
has not in fact made its share of the applicable Borrowing available to the Administrative Agent,
then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent
forthwith on demand such corresponding amount with interest thereon, for each day from and
including the date such amount is made available to the Borrower to but excluding the date of
payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the Federal
Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation or (ii) in the case of the Borrower, the interest rate
applicable to ABR Loans. If such Lender pays such amount to the Administrative Agent, then such
amount shall constitute such Lender’s Loan included in such Borrowing.



     Section 2.07 Interest Elections.



          (a) Subject to Section 2.02(b), each Borrowing initially shall be of the Type specified in the
applicable Borrowing Request and, in the case of a LIBOR Borrowing, shall have an initial Interest
Period as specified in such Borrowing Request. Thereafter, the Borrower may elect to convert such
Borrowing to a different Type or to continue such Borrowing and, in the case of a LIBOR Borrowing,
may elect Interest Periods therefor, all as provided in this Section. The Borrower may elect
different options with respect to different portions of the affected Borrowing, in which case each
such portion shall be allocated ratably among the Lenders holding the Loans comprising such
Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing.
This Section shall not apply to Swingline Borrowings, which may not be converted or continued.



          (b) To make an election pursuant to this Section, the Borrower shall notify the Administrative
Agent of such election by telephone by the time that a Borrowing Request would be required under
Section 2.03 if the Borrower were requesting a Borrowing of the Type resulting from such election
to be made on the effective date of such election. Each such telephonic Interest Election Request
shall be irrevocable and shall be confirmed promptly by



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hand delivery or facsimile to the Administrative Agent of a written Interest Election Request
in a form approved by the Administrative Agent and signed by the Borrower.



          (c) Each telephonic and written Interest Election Request shall specify the following
information in compliance with Section 2.02:



               (i) the Borrowing to which such Interest Election Request applies and, if different options
are being elected with respect to different portions thereof, the portions thereof to be allocated
to each resulting Borrowing (in which case the information to be specified pursuant to clauses
(iii) and (iv) below shall be specified for each resulting Borrowing);



               (ii) the effective date of the election made pursuant to such Interest Election Request, which
shall be a Business Day;



               (iii) whether the resulting Borrowing is to be an ABR Borrowing or a LIBOR Borrowing; and



               (iv) if the resulting Borrowing is a LIBOR Borrowing, the Interest Period to be applicable
thereto after giving effect to such election, which shall be a period contemplated by the
definition of the term “Interest Period”.


If any such Interest Election Request requests a LIBOR Borrowing but does not specify an Interest
Period, then the Borrower shall be deemed to have selected an Interest Period of one month’s
duration.




          (d) Promptly following receipt of an Interest Election Request, the Administrative Agent shall
advise each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.



          (e) If the Borrower fails to deliver a timely Interest Election Request with respect to a
LIBOR Revolving Borrowing prior to the end of the Interest Period applicable thereto, then, unless
such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing
shall be converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if a
Default has occurred and is continuing and the Administrative Agent, at the request of the Required
Lenders, so notifies the Borrower, then, so long as a Default is continuing, (i) no outstanding
Borrowing may be converted to or continued as a LIBOR Borrowing and (ii) unless repaid, each LIBOR
Borrowing shall be converted to an ABR Borrowing at the end of the Interest Period applicable
thereto.



     Section 2.08 Termination of Commitments.



          (a) Unless previously terminated, (i) the Term Loan Commitments shall terminate at 5:00 p.m.
(New York time) on the Effective Date and (ii) the Revolving Commitments shall terminate on the
Maturity Date.



          (b) The Borrower may at any time terminate the Commitments upon (i) the payment in full of all
outstanding Loans and unreimbursed LC Disbursements, together with accrued and unpaid interest
thereon, (ii) the cancellation and return of all outstanding Letters of



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Credit (or alternatively, with respect to each such Letter of Credit, the furnishing to the
Issuing Bank of a cash deposit (or, at the discretion of the Issuing Bank, a back up standby letter
of credit satisfactory to the Issuing Bank) in an amount equal to 103% of the related LC Exposure
as of such date), (iii) the payment in full of the accrued and unpaid fees, and (iv) the payment in
full of all reimbursable expenses and other Obligations together with accrued and unpaid interest
thereon.



          (c) The Borrower shall notify the Administrative Agent of any election to terminate the
Commitments under Section 2.08(b) at least three Business Days prior to the effective date of such
termination, specifying such election and the effective date thereof. Promptly following receipt
of any such notice, the Administrative Agent shall advise the Lenders of the contents thereof.
Each notice delivered by the Borrower pursuant to this Section shall be irrevocable; provided that
a notice of termination of the Commitments delivered by the Borrower may state that such notice is
conditioned upon the effectiveness of other credit facilities, in which case such notice may be
revoked by the Borrower (by notice to the Administrative Agent on or prior to the specified
effective date) if such condition is not satisfied. Any termination of the Commitments shall be
permanent.



     Section 2.09 Repayment and Amortization of Loans; Evidence of Debt.



          (a) The Borrower hereby unconditionally promises to pay (i) to the Administrative Agent, for
the account of each Revolving Lender, the then unpaid principal amount of each Revolving Loan on
the earlier of the Maturity Date and 180 days after such Revolving Loan is made, and (ii) to the
Swingline Lender the then unpaid principal amount of each Swingline Loan on the earlier of the
Maturity Date and the first date after such Swingline Loan is made that is the 15th or last day of
a calendar month and is at least two Business Days after such Swingline Loan is made; provided that
on each date that a Revolving Loan is made, the Borrower shall repay all Swingline Loans then
outstanding. The Borrower shall repay the Term Loans (x) in equal installments of $2,105,263 each
on the last day of each March, June, September and December, commencing on December 31, 2008 and
(y) on the Maturity Date, in an amount equal to the aggregate principal amount of the Term Loans
that remains outstanding on such date.



          (b) At all times that full cash dominion is in effect pursuant to Section 7.3 of the Security
Agreement, on each Business Day, at or before 11:00 a.m. (New York time), the Administrative Agent
shall apply all immediately available funds credited to the Collection Account first to prepay any
outstanding Swingline Loans, second to prepay any outstanding Revolving Loans, and third to cash
collateralize any outstanding LC Exposure.



          (c) Each Lender shall maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such
Lender, including the amounts of principal and interest payable and paid to such Lender from time
to time hereunder.



          (d) The Administrative Agent shall maintain accounts in which it shall record (i) the amount
of each Loan made hereunder, the Class and Type thereof and the Interest Period applicable thereto,
(ii) the amount of any principal or interest due and payable or to become due



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and payable from the Borrower to each Lender hereunder and (iii) the amount of any sum
received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s
share thereof.



          (e) The entries made in the accounts maintained pursuant to Section 2.09(c) or (d) shall be
prima facie evidence of the existence and amounts of the obligations recorded therein; provided
that the failure of any Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay the Loans in
accordance with the terms of this Agreement.



          (f) Any Lender may request that Loans made by it be evidenced by a promissory note. In such
event, the Borrower shall prepare, execute and deliver to such Lender a promissory note payable to
the order of such Lender (or, if requested by such Lender, to such Lender and its registered
assigns) and in a form approved by the Administrative Agent. Thereafter, the Loans evidenced by
such promissory note and interest thereon shall at all times (including after any assignment by
such Lender pursuant to Section 9.04) be represented by one or more promissory notes in such form
payable to the order of the payee named therein (or, if such promissory note is a registered note,
to such payee and its registered assigns).



     Section 2.10 Prepayment of Loans.



          (a) The Borrower shall have the right, at any time and from time to time, to prepay any
Borrowing in whole or in part; provided that (i) any such prepayment of Swingline Loans shall be in
an amount that is an integral multiple of $50,000 and not less than $100,000, (ii) any such
prepayment of Revolving Loans shall be in an amount that is an integral multiple of $100,000 and
not less than $100,000, and (iii) any such prepayment of the Term Loans shall be in an amount that
is an integral multiple of $100,000 and not less than $500,000. Each such prepayment shall be
accompanied by a payment of the accrued and unpaid interest on the amount so prepaid to the extent
required by Section 2.12 together with any amounts payable pursuant to Section 2.15. The Borrower
shall notify the Administrative Agent (and, in the case of a prepayment of Swingline Loans, the
Swingline Lender) by telephone (confirmed by facsimile) of any such prepayment (x) in the case of a
prepayment of a LIBOR Borrowing, not later than 10:00 a.m. (New York time) three Business Days
before the date of prepayment, (y) in the case of a prepayment of an ABR Borrowing, not later than
10:00 a.m. (New York time) one Business Day before the date of prepayment, and (iii) in the case of
a prepayment of Swingline Loans, not later than 1:00 p.m. (New York time) on the date of such
prepayment. Each such notice shall be irrevocable and shall specify the prepayment date (which
shall be a Business Day) and the principal amount of each Borrowing or portion thereof to be
prepaid. Promptly following receipt of any such notice, the Administrative Agent shall advise the
Lenders of the contents thereof. Each optional prepayment of a Revolving Borrowing or a Term
Borrowing shall be applied ratably to the Loans included in the prepaid Borrowing, and each such
prepayment of the Term Loans shall be applied to reduce the scheduled installments of principal
required to be made in respect of the Term Loans pursuant to Section 2.09(a) in the inverse order
of maturity.



          (b) In the event the total Revolving Exposure at any time exceeds the lesser of (i) the total
Revolving Commitments and (ii) the Borrowing Base, the Borrower shall first prepay



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the Swingline Loans, second prepay the Revolving Loans and third cash
collateralize the outstanding LC Exposure in an aggregate amount equal to such excess.



          (c) In the event and on each occasion that any Net Proceeds are received by or on behalf of
any Loan Party in respect of any Prepayment Event, the Borrower shall, on the first Business Day
following such receipt, prepay the Obligations in the manner set forth in Section 2.10(e) in an
aggregate principal amount equal to 100% of such Net Proceeds; provided that, in the case of any
event described in clause (a) or (b) of the definition of the term “Prepayment Event”, if
the Borrower shall deliver to the Administrative Agent a certificate of a Financial Officer to the
effect that the Loan Parties intend to apply the Net Proceeds from such event (or a portion thereof
specified in such certificate), within 180 days after receipt of such Net Proceeds, to acquire (or
replace or rebuild) real property, equipment or other tangible assets (excluding inventory) to be
used in the business of the Loan Parties, and certifying that no Default has occurred and is
continuing, then either (i) so long as full cash dominion is not in effect in accordance with
Section 7.3 of the Security Agreement, no prepayment shall be required pursuant to this paragraph
in respect of the Net Proceeds specified in such certificate or (ii) if full cash dominion is so in
effect, if the Net Proceeds specified in such certificate are to be applied by (A) the Borrower,
then such Net Proceeds shall be applied by the Administrative Agent to reduce the outstanding
principal balance of the Revolving Loans (without a permanent reduction of the Revolving
Commitments) and upon such application the Administrative Agent shall establish a Reserve against
the Revolving Commitments in an amount equal to the amount of such proceeds so applied or (B) any
Loan Party other than the Borrower, then such Net Proceeds shall be deposited in a cash collateral
account and in either case, thereafter, such funds shall be made available to the applicable Loan
Party as follows:



               (1) the Borrower shall request a Revolving Loan (specifying that the request is to use
Net Proceeds pursuant to this Section) or the applicable Loan Party shall request that a
release from the cash collateral account be made in the amount needed;



               (2) so long as the conditions set forth in Section 3.02 have been met, the Revolving
Lenders shall make such Revolving Loan or the Administrative Agent shall release such funds
from the cash collateral account; and



               (3) in the case of Net Proceeds applied against the Revolving Loans, the Reserve
established with respect to the applicable proceeds shall be reduced by the amount of such
Revolving Loan;


provided that, to the extent of any such Net Proceeds that have not been so applied by the end of
such 180 day period, a prepayment shall be required at the end of such period in an amount equal to
such Net Proceeds that have not been so applied; and provided, further, that the Borrower shall not
be permitted to make elections to use Net Proceeds to acquire (or replace or rebuild) real
property, equipment or other tangible assets with respect to Net Proceeds in any Fiscal Year in an
aggregate amount in excess of $1,000,000.




          (d) In the event there is Consolidated Excess Cash Flow for any Fiscal Year, commencing with
the Fiscal Year ending on June 30, 2009, the Borrower shall prepay the Obligations in the manner
set forth in Section 2.10(e), on the date that is 15 Business Days after



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the date on which the Borrower’s audited financial statements for such Fiscal Year are
delivered pursuant to Section 5.01(a), in an amount equal to the lesser of (i) 25% of such
Consolidated Excess Cash Flow and (ii) $7,500,000. Each such Consolidated Excess Cash Flow
prepayment shall be accompanied by a certificate signed by a Financial Officer certifying the
manner in which Consolidated Excess Cash Flow and the resulting prepayment were calculated, which
certificate shall be in form and substance satisfactory to Administrative Agent.



          (e) All prepayments pursuant to Sections 2.10(c) and (d) shall be applied first to
prepay the Term Loans (with such prepayments to be applied to reduce the scheduled installments of
principal required to be made in respect of the Term Loans pursuant to Section 2.09(a) in the
inverse order of maturity), second to prepay the Swingline Loans, with a corresponding
reduction in the Revolving Commitments in the case of any such prepayment pursuant to Section
2.10(c), third to prepay the Revolving Loans, with a corresponding reduction in the
Revolving Commitments in the case of any such prepayment pursuant to Section 2.10(c), and
fourth to cash collateralize outstanding LC Exposure.



     Section 2.11 Fees.



          (a) The Borrower agrees to pay to the Administrative Agent, for the account of each Lender, a
commitment fee (“Commitment Fee”), which shall accrue at the rate equal to the Applicable
Margin for the Commitment Fee on the average daily amount, during the period from and including the
Effective Date to but excluding the date on which the Revolving Commitments terminate, of (i) the
Revolving Commitment of such Lender minus (ii) the sum of (A) the aggregate outstanding
principal amount of such Lender’s Revolving Loans plus (B) such Lender’s LC Exposure.
Accrued Commitment Fees shall be payable in arrears on the last day of each March, June, September
and December and on the date on which the Revolving Commitments terminate, commencing on the first
such date to occur after the Effective Date. All Commitment Fees shall be computed on the basis of
a year of 360 days and shall be payable for the actual number of days elapsed (including the first
day but excluding the last day).



          (b) The Borrower agrees to pay (i) to the Administrative Agent, for the account of each
Revolving Lender, a participation fee with respect to its participations in Letters of Credit,
which shall accrue at the same Applicable Margin used to determine the interest rate applicable to
LIBOR Revolving Loans, on the average daily amount of such Lender’s LC Exposure (excluding any
portion thereof attributable to unreimbursed LC Disbursements) during the period from and including
the Effective Date to but excluding the later of the date on which such Lender’s Revolving
Commitment terminates and the date on which such Revolving Lender ceases to have any LC Exposure;
provided that, the amount of such participation fee shall not be less than $250 in any
Fiscal Quarter, and (ii) to the Issuing Bank (A) a fronting fee, which shall accrue at the rate of
0.25% per annum on the average daily amount of the LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and including the Effective
Date to but excluding the later of the date of termination of the Revolving Commitments and the
date on which there ceases to be any LC Exposure, (B) a negotiation fee in an amount equal to the
greater of (1) $150 and (2) 0.25% of the face amount of each Letter of Credit issued, amended,
renewed or extended and (C) the Issuing Bank’s standard fees with respect to the issuance,
amendment, renewal or extension of any Letter of Credit or processing of drawings thereunder.
Participation fees and fronting fees accrued through and



-14-









 







including the last day of each March, June, September and December shall be payable on the
third Business Day following such last day, commencing on the first such date to occur after the
Effective Date; provided that all such fees shall be payable on the date on which the Revolving
Commitments terminate and any such fees accruing after the date on which the Commitments terminate
shall be payable on demand. Negotiation fees payable to the Issuing Bank with respect to any
Letter of Credit shall be payable upon the date of issuance, amendment, renewal or extension of
such Letter of Credit. Any other fees payable to the Issuing Bank pursuant to this paragraph shall
be payable within 10 days after demand. All participation fees and fronting fees shall be computed
on the basis of a year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).



          (c) The Borrower agrees to pay to the Administrative Agent, for its own account, fees payable
in the amounts and at the times separately agreed upon between the Borrower and the Administrative
Agent.



          (d) All fees payable hereunder shall be paid on the dates due, in immediately available funds,
to the Administrative Agent (or to the Issuing Bank, in the case of fees payable to it) for
distribution, in the case of Commitment Fees and participation fees, to the Lenders. Fees paid
shall not be refundable under any circumstances.



     Section 2.12 Interest.



          (a) The Loans comprising each ABR Borrowing shall bear interest at the Alternate Base Rate
plus the Applicable Margin.



          (b) The Loans comprising each LIBOR Borrowing shall bear interest at the LIBO Rate for the
Interest Period in effect for such Borrowing plus the Applicable Margin.



          (c) Notwithstanding the foregoing, (i) if any principal of or interest on any Loan or any fee
or other amount payable by any Loan Party hereunder is not paid when due, whether at stated
maturity, upon acceleration or otherwise (after giving effect to the grace period set forth in
Section 7.1(b)), such overdue amount shall bear interest, after as well as before judgment, at a
rate per annum equal to (A) in the case of overdue principal of any Loan, 2.00% plus the rate
otherwise applicable to such Loan as provided in the preceding paragraphs of this Section 2.12 or
(B) in the case of any other amount, 2.00% plus the rate applicable to ABR Borrowings as provided
in paragraph (a) of this Section 2.12 and (ii) without duplication, if an Event of Default under
Section 7.1(h) or (i) has occurred and is continuing, each Loan shall bear interest, after as well
as before judgment, at a rate per annum equal to 2.00% plus the rate otherwise applicable to such
Loan as provided in the preceding paragraphs of this Section 2.12.



          (d) Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date
for such Loan and upon termination of the Commitments; provided that (i) interest accrued pursuant
to Section 2.12(c) shall be payable on demand, (ii) in the event of any repayment or prepayment of
any Loan (other than a prepayment of an ABR Revolving Loan prior to the end of the Availability
Period), accrued interest on the principal amount repaid or prepaid shall be payable on the date of
such repayment or prepayment and (iii) in the event of




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any conversion of any LIBOR Loan prior to the end of the current Interest Period therefor,
accrued interest on such Loan shall be payable on the effective date of such conversion.




          (e) All interest hereunder shall be computed on the basis of a year of 360 days, except that
interest computed by reference to the Alternate Base Rate at times when the Alternate Base Rate is
based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap
year), and in each case shall be payable for the actual number of days elapsed in the applicable
period (including the first day but excluding the last day). The applicable Alternate Base Rate or
LIBO Rate shall be determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error.



          (f) All Loans acquired by assignment pursuant to the Master Assignment shall be deemed to be
Loans made on the Effective Date for purposes of this Section and for purposes of determining the
Interest Period applicable to any such Loans which are LIBOR Loans. The three Business Day notice
requirement in Section 2.03 shall apply with respect to any such Loans which are to be maintained
as LIBOR Loans on the Effective Date.




     Section 2.13 Alternate Rate of Interest. If, prior to the commencement of any
Interest Period for a LIBOR Borrowing:



          (a) the Administrative Agent determines (which determination shall be conclusive absent
manifest error) that adequate and reasonable means do not exist for ascertaining the LIBO Rate for
such Interest Period; or




          (b) the Administrative Agent is advised by the Required Lenders that the LIBO Rate for such
Interest Period will not adequately and fairly reflect the cost to such Lenders (or Lender) of
making or maintaining their Loans (or its Loan) included in such Borrowing for such Interest
Period;



then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by
telephone or facsimile as promptly as practicable thereafter and, until the Administrative Agent
notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer
exist, (i) any Interest Election Request that requests the conversion of any Revolving Borrowing
to, or continuation of any Revolving Borrowing as, a LIBOR Borrowing shall be ineffective, and (ii)
if any Borrowing Request requests a LIBOR Revolving Borrowing, such Borrowing shall be made as an
ABR Borrowing.




     Section 2.14 Increased Costs.



          (a) If any Change in Law shall:




               (i) impose, modify or deem applicable any reserve, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit extended by, any Lender or the
Issuing Bank; or



               (ii) impose on any Lender or the Issuing Bank or the London interbank market any other
condition affecting this Agreement or LIBOR Loans made by such Lender or any Letter of Credit or
participation therein;



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and the result of any of the foregoing shall be to increase the cost to such Lender of making or
maintaining any LIBOR Loan (or of maintaining its obligation to make any such Loan) or to increase
the cost to such Lender or the Issuing Bank of participating in, issuing or maintaining any Letter
of Credit or to reduce the amount of any sum received or receivable by such Lender or the Issuing
Bank hereunder (whether of principal, interest or otherwise), then the Borrower will pay to such
Lender or the Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or the Issuing Bank, as the case may be, for such additional costs incurred
or reduction suffered.




          (b) If any Lender or the Issuing Bank determines that any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on such Lender’s or the
Issuing Bank’s capital or on the capital of such Lender’s or the Issuing Bank’s holding company, if
any, as a consequence of this Agreement or the Loans made by, or participations in Letters of
Credit held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level below
that which such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company
could have achieved but for such Change in Law (taking into consideration such Lender’s or the
Issuing Bank’s policies and the policies of such Lender’s or the Issuing Bank’s holding company
with respect to capital adequacy), then from time to time the Borrower will pay to such Lender or
the Issuing Bank, as the case may be, such additional amount or amounts as will compensate such
Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company for any such
reduction suffered.




          (c) A certificate of a Lender or the Issuing Bank setting forth the amount or amounts
necessary to compensate such Lender or the Issuing Bank or its holding company, as the case may be,
as specified in Section 2.14(a) or (b) shall be delivered to the Borrower and shall be conclusive
absent manifest error. The Borrower shall pay such Lender or the Issuing Bank, as the case may be,
the amount shown as due on any such certificate within 10 days after receipt thereof.




          (d) Failure or delay on the part of any Lender or the Issuing Bank to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender’s or the Issuing Bank’s right
to demand such compensation; provided that the Borrower shall not be required to compensate a
Lender or the Issuing Bank pursuant to this Section for any increased costs or reductions incurred
more than 180 days prior to the date that such Lender or the Issuing Bank, as the case may be,
notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of
such Lender’s or the Issuing Bank’s intention to claim compensation therefor; provided further
that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then
the 180-day period referred to above shall be extended to include the period of retroactive effect
thereof.




     Section 2.15 Break Funding Payments. In the event of (a) the payment of any principal
of any LIBOR Loan other than on the last day of an Interest Period applicable thereto (including as
a result of an Event of Default), (b) the conversion of any LIBOR Loan to an ABR Loan other than on
the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any LIBOR Loan on the date specified in any notice delivered pursuant hereto, or
(d) the assignment of any LIBOR Loan other than on the last day of the Interest Period applicable
thereto as a result of a request by the Borrower pursuant to Section 2.18, then, in any



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such event, the Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event. In the case of a LIBOR Loan, such loss, cost or expense to any Lender
shall be deemed to include an amount determined by such Lender to be the excess, if any, of (i) the
amount of interest which would have accrued on the principal amount of such Loan had such event not
occurred, at the LIBO Rate that would have been applicable to such Loan, for the period from the
date of such event to the last day of the then current Interest Period therefor (or, in the case of
a failure to borrow, convert or continue, for the period that would have been the Interest Period
for such Loan), over (ii) the amount of interest which would accrue on such principal amount for
such period at the interest rate which such Lender would bid were it to bid, at the commencement of
such period, for Dollar deposits of a comparable amount and period from other banks in the London
interbank market. A certificate of any Lender setting forth any amount or amounts that such Lender
is entitled to receive pursuant to this Section shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on
any such certificate within 10 days after receipt thereof.



     Section 2.16 Taxes.



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




          (b) In addition, the Borrower shall pay any Other Taxes to the relevant Governmental Authority
in accordance with applicable law.




          (c) The Borrower shall indemnify the Administrative Agent, the Collateral Agent, each Lender
and the Issuing Bank, within 10 days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by the Administrative Agent, the Collateral Agent, such
Lender or the Issuing Bank, as the case may be, on or with respect to any payment by or on account
of any obligation of the Borrower hereunder (including Indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section) and any penalties, interest and
reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified
Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability delivered to the Borrower
by a Lender, the Collateral Agent or the Issuing Bank, or by the Administrative Agent on its own
behalf or on behalf of a Lender, the Collateral Agent or the Issuing Bank, shall be conclusive
absent manifest error.




          (d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the
Borrower to a Governmental Authority, the Borrower shall deliver to the




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Administrative Agent the original or a certified copy of a receipt issued by such Governmental
Authority evidencing such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.




          (e) Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax
under the law of the jurisdiction in which the Borrower is located, or any treaty to which such
jurisdiction is a party, with respect to payments under this Agreement shall deliver to the
Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable
law, such properly completed and executed documentation prescribed by applicable law or reasonably
requested by the Borrower as will permit such payments to be made without withholding or at a
reduced rate.




          (f) If the Administrative Agent, the Collateral Agent, the Issuing Bank or any Lender
determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes as to
which it has been indemnified by the Borrower or with respect to which the Borrower has paid
additional amounts pursuant to this Section 2.16, it shall pay over such refund to the Borrower
(but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower
under this Section 2.16 with respect to the Taxes or Other Taxes giving rise to such refund), net
of all out-of-pocket expenses of the Administrative Agent, the Collateral Agent, the Issuing Bank
or such Lender, as applicable, and without interest (other than any interest paid by the relevant
Governmental Authority with respect to such refund); provided that the Borrower, upon the request
of the Administrative Agent, the Collateral Agent or such Lender, as applicable, agrees to repay
the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent, the Collateral Agent, the Issuing
Bank or such Lender in the event the Administrative Agent, the Collateral Agent, the Issuing Bank
or such Lender, as applicable, is required to repay such refund to such Governmental Authority.
This Section shall not be construed to require the Administrative Agent, the Collateral Agent, the
Issuing Bank or any Lender to make available its tax returns (or any other information relating to
its taxes which it deems confidential) to the Borrower or any other Person.




     Section 2.17 Payments Generally; Allocation of Proceeds; Sharing of Setoffs.



          (a) The Borrower shall make each payment required to be made by it hereunder (whether of
principal, interest, fees or reimbursement of LC Disbursements, or of amounts payable under Section
2.14, 2.15 or 2.16 or otherwise) prior to 11:00 a.m. (New York time) on the date when due, in
immediately available funds, without set off or counterclaim. Any amounts received after such time
on any date may, in the discretion of the Administrative Agent, be deemed to have been received on
the next succeeding Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at 1221 Avenue of the Americas, New York
NY 10020, except that payments to be made directly to the Issuing Bank or the Swingline Lender as
expressly provided herein and except that payments pursuant to Sections 2.14, 2.15, 2.16 and 9.03
shall be made directly to the Persons entitled thereto. The Administrative Agent shall distribute
any such payments received by it for the account of any other Person to the appropriate recipient
promptly following receipt thereof. If any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in
the case of any payment accruing




-19-









 







interest, interest thereon shall be payable for the period of such extension. All payments
hereunder shall be made in Dollars. At all times that full cash dominion is in effect pursuant to
Section 7.3 of the Security Agreement, solely for purposes of determining the amount of Loans
available for borrowing purposes, checks and cash or other immediately available funds from
collections of items of payment and proceeds of any Collateral shall be applied in whole or in part
against the Obligations, on the day of receipt, subject to actual collection.




          (b) Any proceeds of Collateral received by the Collateral Agent or the Administrative Agent
(i) not constituting either (A) a specific payment of principal, interest, fees or other sum
payable under the Loan Documents (which shall be applied as specified by the Borrower or as
otherwise provided in this Agreement), (B) a mandatory prepayment (which shall be applied in
accordance with the applicable provisions of Section 2.10) or (C) amounts to be applied from the
Collection Account when full cash dominion is in effect in accordance with Section 7.3 of the
Security Agreement (which shall be applied in accordance with Section 2.09(b)) or (ii) after an
Event of Default has occurred and is continuing and the Administrative Agent so elects or the
Required Lenders so direct, such funds shall be applied first to pay ratably any fees,
indemnities, or expense reimbursements, including amounts then due to the Collateral Agent, the
Administrative Agent or the Issuing Bank from the Borrower and the payment of any amounts owing
with respect to Reserved Obligations that constitute Secured Obligations, second to pay any
fees or expense reimbursements then due to the Lenders from the Borrower, third to pay
ratably the interest then due and payable on the Loans, fourth to prepay ratably the
principal of all outstanding Loans, any unreimbursed LC Disbursements and the payment of any
amounts owing with respect to Hedging Obligations that constitute Secured Obligations (with any
such amounts applied to the Term Loans being applied to reduce the scheduled installments of
principal required to be made in respect of the Term Loans pursuant to Section 2.09(a) in the
inverse order of maturity), fifth to pay an amount to the Administrative Agent equal to
103% of the aggregate undrawn face amount of all outstanding Letters of Credit, which amount shall
be held by the Administrative Agent as cash collateral for such Obligations, and sixth to
the payment of any other Secured Obligation due to any Secured Party by the Borrower.
Notwithstanding anything to the contrary contained in this Agreement, unless so directed by the
Borrower, or unless a Default is in existence, neither the Administrative Agent nor any Lender
shall apply any payment which it receives to any LIBOR Loan of a Class except (a) on the expiration
date of the Interest Period applicable to any such LIBOR Loan or (b) in the event, and only to the
extent, that there are no outstanding ABR Loans of the same Class and, in any event, the Borrower
shall pay the break funding payment required in accordance with Section 2.15. 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 Secured Obligations.




          (c) At the election of the Administrative Agent, all payments of principal, interest, LC
Disbursements, fees, premiums, reimbursable expenses (including all reimbursement for fees and
expenses pursuant to Section 9.03) and other sums payable under the Loan Documents may be paid from
the proceeds of Borrowings made hereunder whether made following a request by the Borrower pursuant
to Section 2.03 or a deemed request as provided in this Section or may be deducted from any deposit
account of the Borrower maintained with the Administrative Agent. The Borrower hereby irrevocably
authorizes (i) the Administrative Agent to make a Borrowing for the purpose of paying each payment
of principal, interest and fees as it




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becomes due hereunder or any other amount due under the Loan Documents and agrees that all
such amounts charged shall constitute Loans (including Swingline Loans) and that all such
Borrowings shall be deemed to have been requested pursuant to Section 2.03 or 2.04, as applicable,
and (ii) the Administrative Agent to charge any deposit account of the Borrower maintained with the
Administrative Agent for each payment of principal, interest and fees as it becomes due hereunder
or any other amount due under the Loan Documents.




          (d) If any Lender shall, by exercising any right of set off or counterclaim or otherwise,
obtain payment in respect of any principal of or interest on any of its Loans or any participations
in LC Disbursements, in any such case, which results in such Lender receiving payment of a greater
proportion of the aggregate amount of its Loans and participations in LC Disbursements and accrued
interest thereon than the proportion received by any other Lender, then the Lender receiving such
greater proportion shall purchase (for cash at face value) participations in the Loans and
participations in LC Disbursements of other Lenders to the extent necessary so that the benefit of
all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of
principal of and accrued interest on their respective Loans and participations in LC Disbursements;
provided that (i) if any such participations are purchased and all or any portion of the payment
giving rise thereto is recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the provisions of this
paragraph shall not be construed to apply to any payment made by the Borrower pursuant to and in
accordance with the express terms of this Agreement or any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its Loans or
participations in LC Disbursements to any assignee or participant. The Borrower consents to the
foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower
rights of set-off and counterclaim with respect to such participation as fully as if such Lender
were a direct creditor of the Borrower in the amount of such participation.




          (e) Unless the Administrative Agent shall have received notice from the Borrower prior to the
date on which any payment is due to the Administrative Agent for the account of the Lenders or the
Issuing Bank hereunder that the Borrower will not make such payment, the Administrative Agent may
assume that the Borrower has made such payment on such date in accordance herewith and may, in
reliance upon such assumption, distribute to the Lenders or the Issuing Bank, as the case may be,
the amount due. In such event, if the Borrower has not in fact made such payment, then each of the
Lenders or the Issuing Bank, as the case may be, severally agrees to repay to the Administrative
Agent forthwith on demand the amount so distributed to such Lender or Issuing Bank with interest
thereon, for each day from and including the date such amount is distributed to it to but excluding
the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking industry rules on
interbank compensation.




          (f) If any Lender shall fail to make any payment required to be made by it hereunder, then the
Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply
any amounts thereafter received by the Administrative Agent for the




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account of such Lender under or in connection with the Loan Documents to satisfy such Lender’s
obligations hereunder until all such unsatisfied obligations are fully paid.




     Section 2.18 Mitigation Obligations; Replacement of Lenders. If any Lender requests
compensation under Section 2.14, or if the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.16, then:



          (a) such Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another
of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.14 or 2.16, as the
case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender (and the Borrower hereby agrees
to pay all reasonable costs and expenses incurred by any Lender in connection with any such
designation or assignment);




          (b) the Borrower may, at its sole expense and effort, require such Lender (a “Replaced
Lender”), upon notice to the Replaced Lender and the Administrative Agent, to assign and
delegate, without recourse (in accordance with and subject to the restrictions contained in Section
9.04), all its interests, rights and obligations under this Agreement to an assignee that shall
assume such obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (i) the Borrower shall have received the prior written consent of the
Administrative Agent (and if a Revolving Commitment is being assigned, the Issuing Bank), which
consent shall not unreasonably be withheld, (ii) the Replaced Lender shall have received payment of
an amount equal to the outstanding principal of its Loans and participations in LC Disbursements
and Swingline Loans, accrued interest thereon, accrued fees and all other amounts payable to it
hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrower (in the case of all other amounts) and (iii) such assignment will result in a
reduction in such compensation or payments. A Replaced Lender shall not be required to make any
such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease
to apply.




     Section 2.19 Returned Payments. If, after receipt of any payment which is applied to
the payment of all or any part of the Obligations, the Administrative Agent or any Lender is for
any reason compelled to surrender such payment to any Person because such payment or the
application thereof is invalidated, declared fraudulent, set aside, determined to be void or
voidable as a preference or impermissible setoff 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 had not been received by the Administrative Agent or such
Lender. The provisions of this Section 2.19 shall be and remain effective notwithstanding any
contrary action which may have been taken by the Administrative Agent or any Lender in reliance
upon such payment. The provisions of this Section 2.19 shall survive the termination of this
Agreement.



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ARTICLE III




Conditions Precedent




     Section 3.01 Effective Date. The obligation of each Lender to make the initial Loans
on the Effective Date, and of the Issuing Bank to issue the initial Letter of Credit, is subject to
the satisfaction of the following conditions:



          (a) Credit Agreement and Other Loan Documents. The Administrative Agent (or its
counsel) shall have received the following, each dated on or before the Effective Date, duly
executed by all the parties thereto, each in form and substance satisfactory to the Administrative
Agent:




               (i) this Agreement and all attached exhibits and schedules;



               (ii) any promissory notes requested by a Lender pursuant to Section 2.09 payable to the order
of each such requesting Lender;



               (iii) the Security Agreement, together with UCC-3 financing statement assignments, UCC-1
financing statements, certificates representing the Equity Interests in the Effective Date
Subsidiary Guarantors pledged pursuant to the Security Agreement, together with an undated stock
power for each such certificate, executed in blank by a duly authorized officer of the Borrower,
and any other documents, agreements or instruments necessary to create a valid and perfected first
priority security interest in the Collateral described therein in favor of the Collateral Agent;



               (iv) (A) assignments of Mortgages delivered in connection with the Existing Credit Agreement
by Fortis Capital Corp., as collateral agent under the Existing Credit Agreement to the Collateral
Agent together with amendments thereto between each applicable Loan Party and the Collateral Agent
and (B) a Mortgage in favor of the Collateral Agent with respect to the production facility of WVA
located in Fayette County, West Virginia, each granting a Lien to the Collateral Agent in the
Mortgaged Property described therein to secure the Secured Obligations, together with any other
documents, agreements or instruments necessary to create a valid and perfected first priority
security interest in and Lien on such Mortgaged Property in favor of the Collateral Agent, and:




          (1) an appraisal of each of the Mortgaged Properties complying with the requirements of
the Federal Financial Institutions Reform, Recovery and Enforcement Act of 1989, which
appraisals shall be from a Person acceptable to the Administrative Agent and otherwise in
form and substance satisfactory to the Administrative Agent;




          (2) a certification from the National Research Center, or any successor agency thereto,
regarding each parcel of real property subject to a Mortgage, and if the Mortgaged Property
is located in a “flood hazard area” in any Flood Insurance Rate Map published by the Federal
Emergency Management Agency (or any successor agency), together with flood insurance in such
total amount as required by Regulation H of the Federal Reserve Board;



-23-









 






          (3) an opinion of counsel in each state in which such Mortgaged Property is located, in
form and substance and from counsel reasonably satisfactory to the Collateral Agent; and




          (4) (A) in respect of each Mortgaged Property subject to a Mortgage delivered in
connection with the Existing Credit Agreement, a copy of a fully paid mortgagee policy of
title insurance with respect to the Mortgaged Property, in form and substance acceptable to
the Collateral Agent, (B) in respect of the Borrower’s facility located in Niagara County,
New York, an updated title report for such jurisdiction dated on or about the Effective Date
showing no liens on such facility since the date of such existing policy except for liens
permitted by Section 6.02 or discharged on or prior to the Effective Date, and (C) in
respect of the Borrower’s facilities located in Dallas County, Alabama and Washington
County, Ohio, title commitments for endorsements of such existing policies in favor of the
Collateral Agent, dated on or about the Effective Date;



               (v) the Capital Contribution Agreement, together with any documents, agreements or instruments
necessary to create a valid and perfected first priority security interest in the Borrower’s rights
under the Capital Contribution Agreement in favor of the Collateral Agent; and



               (vi) such other certificates, documents, instruments and agreements as the Administrative
Agent shall reasonably request in connection with the transactions contemplated by this Agreement
and the other Loan Documents.



          (b) Opinion of Loan Parties’ Counsel. The Administrative Agent (or its counsel) shall
have received a favorable written opinion of Arent Fox LLP, counsel to the Loan Parties, dated the
Effective Date and addressed to the Administrative Agent, the Collateral Agent, the Issuing Bank
and the Lenders, in substantially the form of Exhibit B.




          (c) Closing Certificates; Certified Certificates of Incorporation, Etc.; Good Standing
Certificates. The Administrative Agent shall have received (i) a certificate of each Loan
Party, dated the Effective Date and executed by its Secretary or Assistant Secretary, which shall
(A) certify the resolutions of its Board of Directors, members or other body authorizing the
execution, delivery and performance of the Loan Documents to which it is a party, (B) identify by
name and title and bear the specimen signatures of the Financial Officers and any other officers of
such Loan Party authorized to sign the Loan Documents to which it is a party, and (C) contain
appropriate attachments, including the certificate or articles of incorporation or organization (or
other comparable constituent documents) of each Loan Party certified by the relevant authority of
the jurisdiction of organization of such Loan Party and a true and correct copy of its By-Laws or
operating, management or partnership agreement, and (ii) a long-form good standing certificate for
each Loan Party from its jurisdiction of organization.




          (d) Financial Officer’s Certificate. The Administrative Agent shall have received a
certificate, signed by a Financial Officer of the Borrower, (i) stating that no Default has
occurred and is continuing, (ii) stating that the representations and warranties contained in
Article IV are true and correct as of such date, (iii) stating that the conditions in this Section
3.01 have been met, (iv) certifying as to the matters set forth in Section 4.13, (v) certifying
that the




-24-









 







Borrower has received the Equity Issuance proceeds or capital contribution required pursuant
to Section 3.01(p), and (vi) certifying as to such other factual matters as may be reasonably
requested by the Administrative Agent.




          (e) Fees. The Lenders and the Administrative Agent shall have received all fees
required to be paid, and all expenses for which invoices have been presented (including the
reasonable fees and expenses of legal counsel), on or before the Effective Date.




          (f) Customer List. The Administrative Agent shall have received a true and complete
updated customer list for the Borrower and its Subsidiaries, including addresses, phone numbers and
contacts.




          (g) Collateral Access Agreements. The Administrative Agent shall have received each
Collateral Access Agreement required to be provided pursuant to Section 4.13 of the Security
Agreement.




          (h) Borrowing Base Certificate and Compliance Certificate. The Administrative Agent
shall have received (i) an initial executed Borrowing Base Certificate, dated as of July 31, 2008
and (ii) an initial Compliance Certificate, signed by a Financial Officer and setting forth
calculations demonstrating the Borrower’s compliance with the financial covenants set forth in
Section 6.13 as of July 31, 2008 and for the four Fiscal-Quarter period ended on such date,
calculated on a pro forma basis after giving effect, in a manner satisfactory to the Administrative
Agent, to all Borrowings to be made on the Effective Date and the issuance of any Letters of Credit
on the Effective Date.




          (i) Other Financial Information. The Administrative Agent shall have received true
and correct copies of (i) the audited consolidated balance sheets and related statements of
operations, stockholders’ equity and cash flows of the Borrower and its Subsidiaries, as of and for
the Fiscal Years ended June 30, 2005, June 30, 2006, and June 30, 2007, (ii) the unaudited
consolidated balance sheets and related statements of operations, stockholders’ equity and cash
flows of the Borrower and its Subsidiaries, as of and for the Fiscal Quarters ended September 30,
2007, December 31, 2007, and March 31, 2008 and the Fiscal Months ended April 30, 2008, May 31,
2008, June 30, 2008 and July 31, 2008, (iii) the projected annual consolidated financial statements
(including balance sheets and related statements of operations, stockholders’ equity and cash
flows) of the Borrower and its Subsidiaries for the five (5) year period commencing on the
Effective Date, and (iv) such other financial information as the Administrative Agent may
reasonably request.




          (j) No Material Adverse Effect. Since June 30, 2007, no event shall have occurred and
no circumstance shall have come into existence which, in the opinion of the Administrative Agent,
has had a Material Adverse Effect.




          (k) Environmental Reports. The Administrative Agent shall have received environmental
reports (including Phase I environmental studies), from firm(s) satisfactory to the Lenders, with
respect to the real properties of the Loan Parties, which reports shall be in form and substance
reasonably satisfactory to the Lenders.




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          (l) Collateral Examination. The Administrative Agent shall have received an
independent collateral examiner’s report dated not more than one year prior to the Effective Date
in form and substance satisfactory to the Administrative Agent.




          (m) Due Diligence. The Administrative Agent shall have completed all aspects of its
due diligence investigation of the Borrower and its Subsidiaries (including as to any of their
respective contingent liabilities and contractual obligations) and the assets of the Loan Parties,
and the results of such investigation shall be satisfactory to the Administrative Agent in all
respects.




          (n) Insurance Certificates. The Administrative Agent shall have received certificates
as to coverage under the insurance policies required by Section 5.09 and the applicable provisions
of the Collateral Documents, which shall be endorsed or otherwise amended to include a customary
lender’s loss payable endorsement and to name the Collateral Agent as additional insured.




          (o) Authorizations and Approvals. All Governmental Authorities and Persons shall have
approved or consented to the Transactions and the transactions contemplated hereby, including,
without limitation, those required in connection with the continued operation of the Borrower and
its Subsidiaries, to the extent required, and such approvals shall be in full force and effect, and
all applicable waiting periods shall have expired without any action being taken or threatened that
would restrain, prevent or otherwise impose adverse conditions on this Agreement, the Transactions
and the actions contemplated hereby and thereby.




          (p) Equity Contribution. The Administrative Agent shall have received evidence
satisfactory to it in all respects that Borrower has received at least $5,000,000 in proceeds from
the issuance of additional Equity Interests of or capital contributions to the Borrower on the
Effective Date.




          (q) Existing Indebtedness. The Administrative Agent shall have received such evidence
as the Administrative Agent and Collateral Agent may reasonably require that (i) the Junior Credit
Agreement has been terminated or concurrently with the initial Loans or the issuance of the initial
Letter of Credit is being terminated and all Liens securing obligations under the Junior Credit
Agreement have been released or concurrently with the initial Loans or the issuance of the initial
Letter of Credit are being released and (ii) concurrently with the initial Loans or the issuance of
the initial Letter of Credit (A) the Indebtedness of the Loan Parties held by the lenders under the
Existing Credit Agreement is being acquired by the Lenders pursuant to the Master Assignment, (B)
all Liens securing obligations under the Existing Credit Agreement are being assigned to the
Collateral Agent pursuant to the Master Assignment, (C) back-to-back Letters of Credit in form and
substance satisfactory to the Administrative Agent are being issued with respect to all outstanding
letters of credit under the Existing Credit Agreement, and (D) the Borrower shall terminate all
Hedging Agreements maintained with Fortis Capital Corp. and its Affiliates and pay in full to
Fortis Capital Corp. or its Affiliates, as applicable, any Hedging Obligations and other
obligations with respect thereto and in connection with such termination.




          (r) Lien Searches. The Collateral Agent shall have received the results of recent
lien searches in the jurisdiction of organization or formation of each Loan Party and in




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each of the jurisdictions where assets of the Loan Parties are located, and such searches
shall reveal no liens on any of the assets of the Loan Parties except for liens permitted by
Section 6.02 or discharged on or prior to the Effective Date pursuant to a pay-off letter or other
documentation satisfactory to the Collateral Agent.



The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such
notice shall be conclusive and binding.




     Section 3.02 Each Credit Event. The obligation of each Lender to make a Loan on the
occasion of any Borrowing, and of the Issuing Bank to issue, amend, renew or extend any Letter of
Credit, is subject to the satisfaction of the following conditions:



          (a) At the time of and immediately after giving effect to such Borrowing or the issuance,
amendment, renewal or extension of such Letter of Credit, as applicable, and the use of the
proceeds thereof, the representations and warranties of the Borrower set forth in this Agreement
shall be true and correct.




          (b) At the time of and immediately after giving effect to such Borrowing or the issuance,
amendment, renewal or extension of such Letter of Credit, as applicable, and the use of the
proceeds thereof, no Default shall have occurred and be continuing.




          (c) After giving effect to any Borrowing or the issuance of any Letter of Credit, Availability
shall not be less than zero.




          (d) No material adverse change with respect to the Collateral described in the most recently
delivered Borrowing Base Certificate has occurred and is continuing.



Each Borrowing and each issuance, amendment, renewal or extension of a Letter of Credit shall be
deemed to constitute a representation and warranty by the Borrower on the date thereof as to the
matters specified in paragraphs (a), (b), (c) and (d) of this Section.




ARTICLE IV




Representations and Warranties




     Each Loan Party (and with respect to Sections 4.01, 4.02 and 4.03, the Parent) represents and
warrants to the Lenders that:



     Section 4.01 Organization; Powers. Each of the Loan Parties, each of its Subsidiaries
and the Parent is duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, has all requisite power and authority to carry on its business as
now conducted and, except where the failure to do so, individually or in the aggregate, would not
reasonably be expected to result in a Material Adverse Effect, is qualified to do business in, and
is in good standing in, every jurisdiction where such qualification is required.



     Section 4.02 Authorization; Enforceability. The Transactions are within each Loan
Party’s and the Parent’s corporate powers and have been duly authorized by all necessary corporate
and, if required, stockholder action. The Loan Documents to which each Loan Party



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and the Parent is a party have been duly executed and delivered by such Loan Party and the
Parent and constitute a legal, valid and binding obligation of such Loan Party and the Parent,
enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors’ rights generally and subject
to general principles of equity, regardless of whether considered in a proceeding in equity or at
law.




     Section 4.03 Approvals; No Conflicts. The Transactions (a) do not require any consent
or approval of, registration or filing with, or any other action by, any Governmental Authority or
other Person, except such as have been obtained or made and are in full force and effect and except
for filings necessary to perfect Liens created pursuant to the Loan Documents, (b) will not violate
any Requirement of Law applicable to any Loan Party or any of its Subsidiaries or the Parent, (c)
will not violate or result in a default under any material indenture, agreement or other instrument
binding upon any Loan Party or any of its Subsidiaries or the Parent or its assets, or give rise to
a right thereunder to require any payment to be made by any Loan Party or any of its Subsidiaries
or the Parent, and (d) will not result in the creation or imposition of any Lien on any asset of
any Loan Party or any of its Subsidiaries or the Parent, except Liens created pursuant to the Loan
Documents.



     Section 4.04 Financial Condition; No Material Adverse Change.



          (a) The Borrower has heretofore furnished to the Lenders its consolidated balance sheet and
statements of income, stockholders equity and cash flows as of and for the Fiscal Years ended June
30, 2005, June 30, 2006 and June 30, 2007, the Fiscal Quarters ended September 30, 2007, December
31, 2007 and March 31, 2008, and the Fiscal Months ended April 30, 2008, May 31, 2008, June 30,
2008 and July 31, 2008. Such financial statements present fairly, in all material respects, the
consolidated financial position and results of operations and cash flows of the Borrower and its
Subsidiaries as of such dates and for such periods in accordance with GAAP.




          (b) The consolidated forecasted balance sheet and statements of income, stockholders equity
and cash flows of the Borrower and its Subsidiaries delivered pursuant to Section 3.01(i)(iii) and
Section 5.01(f) were prepared in good faith on the basis of the assumptions stated therein, which
assumptions were fair in light of the conditions existing at the time of delivery of such
forecasts, and represented, at the time of delivery, the Borrower’s best estimate of its future
financial condition and performance.




          (c) No event, change or condition has occurred that has had, or could reasonably be expected
to have, a Material Adverse Effect, since June 30, 2007.




          (d) Except as disclosed in the financial statements referred to above or the footnotes
thereto, after giving effect to the Transactions, none of the Borrower or any of its Subsidiaries
has, as of the Effective Date, any contingent liabilities that would reasonably be expected to
result in a Material Adverse Effect.




          (e) The information contained in the most recently delivered Borrowing Base Certificate is
complete and correct in all material respects.




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     Section 4.05 Properties.



          (a) As of the Effective Date, Schedule 4.05 sets forth the address of each parcel of real
property that is owned or leased by each Loan Party. Each of such leases and subleases is valid
and enforceable in accordance with its terms and is in full force and effect, and no default by any
party to any such lease or sublease exists. Each of the Loan Parties and its Subsidiaries has good
and indefeasible title to, or valid leasehold interests in, all its real and personal property,
free of all Liens other than those permitted by Section 6.02.




          (b) Each Loan Party and its Subsidiaries owns, or is licensed to use, all material trademarks,
tradenames, copyrights, patents and other intellectual property necessary to its business as
currently conducted, a correct and complete list of which, as of the Effective Date, is set forth
on Schedule 4.05, and the use thereof by the Loan Parties and its Subsidiaries does not infringe in
any material respect upon the rights of any other Person, and the Loan Parties’ rights thereto are
not subject to any licensing agreement or similar arrangement.




          (c) Neither the Borrower nor any of its Subsidiaries has received written notice of, or has
knowledge of, any pending or contemplated condemnation or expropriation proceeding material to, or
affecting any material portion of, any Mortgaged Property or any sale or disposition thereof in
lieu of condemnation or expropriation. Neither any Mortgaged Property nor any interest therein is
subject to any right of first refusal, option or other contractual fight to purchase such Mortgaged
Property or interest therein, except as set forth on Schedule 4.05.




     Section 4.06 Litigation and Environmental Matters.



          (a) There are no actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of any Loan Party, threatened against or affecting
the Loan Parties or any of their Subsidiaries (i) as to which there is a reasonable possibility of
an adverse determination and that, if adversely determined, could reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect (other than the Disclosed
Matters) or (ii) that involve this Agreement or the Transactions.




          (b) Except for the Disclosed Matters (i) no Loan Party nor any of its Subsidiaries has
received notice of any claim with respect to any Environmental Liability or knows of any basis for
any Environmental Liability and (ii) and except with respect to any other matters that,
individually or in the aggregate, could not reasonably be expected to result in a Material Adverse
Effect, no Loan Party nor any of its Subsidiaries (1) has failed to comply with any Environmental
Law or to obtain, maintain or comply with any permit, license or other approval required under any
Environmental Law or (2) has become subject to any Environmental Liability.




          (c) Since the Effective Date, there has been no change in the status of the Disclosed Matters
that, individually or in the aggregate, has resulted in, or materially increased the likelihood of,
a Material Adverse Effect.




     Section 4.07 Compliance with Laws and Agreements; Absence of Default. Each Loan Party
and each of its Subsidiaries are in compliance with all Requirements of Law applicable to it or its
property and all indentures, agreements and other instruments binding upon it or its



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property, except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. No Default has occurred and is
continuing.




     Section 4.08 Investment Company Status. No Loan Party nor any of its Subsidiaries is
an “investment company” as defined in, or subject to regulation under, the Investment Company Act
of 1940.



     Section 4.09 Taxes. Each Loan Party and each of its Subsidiaries have timely filed or
caused to be filed all Tax returns and reports required to have been filed and has paid or caused
to be paid all Taxes required to have been paid by it, except for Taxes that are being contested in
good faith by appropriate proceedings and for which such Loan Party or such Subsidiary, as
applicable, has set aside on its books adequate reserves. No Tax liens have been filed and no
claims are being asserted with respect to any such Taxes.



     Section 4.10 ERISA. No ERISA Event has occurred or is reasonably expected to occur
that, when taken together with all other such ERISA Events for which liability is reasonably
expected to occur, could reasonably be expected to result in a Material Adverse Effect. The
present value of all accumulated benefit obligations under each Plan (based on the assumptions used
for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the
most recent financial statements reflecting such amounts, exceed by more than $5,000,000 the fair
market value of the assets of such Plan, and the present value of all accumulated benefit
obligations of all underfunded Plans (based on the assumptions used for purposes of Statement of
Financial Accounting Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed by more than $5,000,000 the fair market value of the
assets of all such underfunded Plans.



     Section 4.11 Disclosure. The Borrower has disclosed to the Lenders all agreements,
instruments and corporate or other restrictions to which it or any Subsidiary is subject, and all
other matters known to it, that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect. None of the reports, financial statements, certificates or
other written statements furnished by or on behalf of any Loan Party to the Administrative Agent,
the Collateral Agent or any Lender in connection with the negotiation of this Agreement or any
other Loan Document (as modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading; provided
that, with respect to any projected financial information, the Borrower represents only that such
information was prepared in good faith based upon assumptions believed to be reasonable at the time
delivered and, if such projected financial information was delivered prior to the Effective Date,
as of the Effective Date.



     Section 4.12 Material Agreements. All material agreements and contracts to which any
Loan Party is a party or is bound as of the Effective Date are listed on Schedule 4.12. No Loan
Party is in default in the performance, observance or fulfillment of any of the material
obligations, covenants or conditions contained in (i) any material agreement to which it is a party
or (ii) any agreement or instrument evidencing or governing Indebtedness.




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     Section 4.13 Solvency.



          (a) Immediately after the consummation of the Transactions to occur on the Effective Date, and
as of the date of each Borrowing, (i) the fair value of the assets of each Loan Party, at a fair
valuation, will exceed its debts and liabilities, subordinated, contingent or otherwise; (ii) the
present fair saleable value of the property of each Loan Party will be greater than the amount that
will be required to pay the probable liability of its debts and other liabilities, subordinated,
contingent or otherwise, as such debts and other liabilities become absolute and matured; (iii)
each Loan Party will be able to pay its debts and liabilities, subordinated, contingent or
otherwise, as such debts and liabilities become absolute and matured; and (iv) each Loan Party will
not have unreasonably small capital with which to conduct the business in which it is engaged as
such business is now conducted and is proposed to be conducted after the Effective Date.




          (b) No Loan Party intends to, or will permit any of its Subsidiaries to, and no Loan Party
believes that it or any of its Subsidiaries will, incur debts beyond its ability to pay such debts
as they mature, taking into account the timing of and amounts of cash to be received by it or any
such Subsidiary and the timing of the amounts of cash to be payable on or in respect of its
Indebtedness or the Indebtedness of any such Subsidiary.




     Section 4.14 Insurance. Schedule 4.14 sets forth a description of all insurance
maintained by or on behalf of the Loan Parties and the other Subsidiaries as of the Effective Date.
As of the Effective Date, all premiums in respect of such insurance have been paid. The Borrower
believes that the insurance maintained by or on behalf of the Borrower and its Subsidiaries is
adequate.



     Section 4.15 Capitalization and Subsidiaries. Schedule 4.15 sets forth (a) a correct
and complete list of the name and relationship to the Borrower of each and all of the Borrower’s
Subsidiaries, (b) a true and complete listing of each class of each of the Borrower’s authorized
Equity Interests, of which all of such issued shares are validly issued, outstanding, fully paid
and non-assessable, and owned beneficially and of record on the Effective Date by the Persons
identified on Schedule 4.15, and (c) the type of entity and jurisdiction of organization of the
Borrower and each of its Subsidiaries. All of the issued and outstanding Equity Interests owned by
any Loan Party have been (to the extent such concepts are relevant with respect to any particular
such Equity Interests) duly authorized and issued and are fully paid and non-assessable.



     Section 4.16 Security Interest in Collateral. The provisions of this Agreement and
the other Loan Documents are effective to create legal and valid Liens on all the Collateral in
favor of the Collateral Agent, for the benefit of the Secured Parties, and such Liens constitute
perfected and continuing Liens on the Collateral, securing the Secured Obligations, enforceable
against the applicable Loan Party and all third parties, and having priority over all other Liens
on the Collateral except in the case of (a) Permitted Encumbrances, to the extent any such
Permitted Encumbrances would have priority over the Liens in favor of the Collateral Agent pursuant
to any applicable law and (b) Liens perfected only by possession (including possession of any
certificate of title) to the extent the Collateral Agent has not obtained or does not maintain
possession of such Collateral.



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     Section 4.17 Labor Disputes. There are no strikes, lockouts or slowdowns against any
Loan Party or any of its Subsidiaries that are pending or, to the knowledge of the Borrower,
threatened. The hours worked by and payments made to employees of the Loan Parties and their
respective Subsidiaries have not been in violation of the Fair Labor Standards Act or any other
applicable Federal, state, local or foreign law dealing with such matters. All payments due from
any Loan Party or any of its Subsidiaries, or for which any claim may be made against any Loan
Party or any of its Subsidiaries, on account of wages and employee health and welfare insurance and
other benefits, have been paid or accrued as a liability on the books of such Loan Party or such
Subsidiary.



     Section 4.18 Affiliate Transactions. Except as set forth on Schedule 4.18, as of the
Effective Date, there are no existing or proposed agreements, arrangements, understandings or
transactions between any Loan Party and any of the officers, members, managers, directors,
stockholders, parents, other interest holders, employees, or Affiliates (other than Subsidiaries)
of any Loan Party or any members of their respective immediate families, and none of the foregoing
Persons is directly or indirectly indebted to or has any direct or indirect ownership, partnership,
or voting interest in any Affiliate of any Loan Party or any Person with which any Loan Party has a
business relationship or which competes with any Loan Party.



     Section 4.19 Regulation U.



          (a) The Borrower shall use the proceeds of the Loans solely for the purposes set forth in
Section 5.08, and no part of the proceeds of the Loans have been or will be used, directly or
indirectly, for the purpose of purchasing or carrying any margin stock within the meaning of
Regulation U of the Board or to extend credit to others for the purpose of purchasing or carrying
any such margin stock.




          (b) Margin stock (as defined in Regulation U of the Board) constitutes less than 25% of the
value of the assets of the Borrower and its Subsidiaries.




ARTICLE V




Affirmative Covenants




     Until the Commitments have expired or been terminated and the Secured Obligations have been
paid in full and all Letters of Credit shall have expired or terminated, the Loan Parties covenant
and agree, jointly and severally, for the benefit of the Lenders, that:



     Section 5.01 Financial Statements; Borrowing Base and Other Information. The Borrower
will furnish to the Administrative Agent (and the Administrative Agent will promptly thereafter
furnish to each Lender or, in the case of clauses (g), (h) and (i) below, each Revolving Lender):



          (a) within 90 days after the end of each Fiscal Year, commencing with the Fiscal Year ended
June 30, 2008, its audited consolidated balance sheet and related statements of operations,
stockholders’ equity and cash flows as of the end of and for such year, setting forth in each case
in comparative form the figures for the previous Fiscal Year, all reported on by independent public
accountants of recognized national standing (without a “going concern” or



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like qualification or exception and without any qualification or exception as to the scope of
such audit) to the effect that such consolidated financial statements present fairly in all
material respects the financial condition and results of operations of the Borrower and its
Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, accompanied by
any management letter prepared by said accountants;




          (b) within 45 days after the end of each of the first three Fiscal Quarters of each Fiscal
Year, commencing with the Fiscal Quarter ending September 30, 2008, its consolidated and
consolidating balance sheet and related statements of operations, stockholders’ equity and cash
flows as of the end of and for such Fiscal Quarter and the then elapsed portion of the Fiscal Year,
setting forth in each case in comparative form the figures for the corresponding period or periods
of (or, in the case of the balance sheet, as of the end thereof) the previous Fiscal Year, all
certified by a Financial Officer as presenting fairly in all material respects the financial
condition and results of operations of the Borrower and its Subsidiaries on a consolidated basis
and consolidating in accordance with GAAP consistently applied, subject to normal year-end audit
adjustments and the absence of footnotes;




          (c) within 30 days after the end of each Fiscal Month, commencing with the Fiscal Month ended
August 31, 2008, its consolidated and consolidating balance sheet and related statements of
operations, stockholders’ equity and cash flows as of the end of and for such Fiscal Month and the
then elapsed portion of the Fiscal Year, setting forth in each case in comparative form the figures
for the corresponding period or periods of (or, in the case of the balance sheet, as of the end
thereof) the previous Fiscal Year, all certified by a Financial Officer as presenting fairly in all
material respects the financial condition and results of operations of the Borrower and its
Subsidiaries on a consolidated and consolidating basis in accordance with GAAP consistently
applied, subject to normal year-end audit adjustments and the absence of footnotes;




          (d) concurrently with any delivery of financial statements under clause (a) or (b) above, a
Compliance Certificate (i) certifying as to whether a Default has occurred and, if a Default has
occurred, specifying the details thereof and any action taken or proposed to be taken with respect
thereto, (ii) setting forth reasonably detailed calculations demonstrating compliance with Sections
6.12 and 6.13 and demonstrating the determination of the Applicable Margin and (iii) stating
whether any change in GAAP or in the application thereof has occurred since June 30, 2007 and, if
any such change has occurred, specifying the effect of such change on the financial statements
accompanying such certificate;




          (e) concurrently with any delivery of financial statements under clause (a) above, a
certificate of the accounting firm that reported on such financial statements stating whether they
obtained knowledge during the course of their examination of such financial statements of any
Default (which certificate may be limited to the extent required by accounting rules or
guidelines);




          (f) as soon as available, but in any event not later than the end of each Fiscal Year, a copy
of the plan and forecast (including a projected consolidated and consolidating balance sheet,
income statement and funds flow statement) of the Borrower for each Fiscal Quarter of the upcoming
Fiscal Year and for each subsequent Fiscal Year through and including




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the Fiscal Year which includes the Maturity Date of the Term Loans (the
“Projections”), in form reasonably satisfactory to the Administrative Agent; provided that,
if the period covered by any Projections as described above would include less than three full
Fiscal Years, such Projections will also include such additional number of Fiscal Years after the
Fiscal Year that includes the Maturity Date as is necessary in order for such Projections to cover
three full Fiscal Years;




          (g) as soon as available but in any event within 15 days after the end of each Fiscal Month,
or, if Availability is less than or equal to $5,000,000 at the end of a Fiscal Month, within 15
days after the 15th and last day of each Fiscal Month until the next Fiscal Month end on
which Availability is greater than $5,000,000, and at such other times as may be necessary to
re-determine Availability or as may be requested by the Administrative Agent or the Collateral
Agent, as of the period then ended, a Borrowing Base Certificate and supporting information in
connection therewith, together with any additional reports with respect to the Borrowing Base as
the Administrative Agent may reasonably request;




          (h) as soon as available but in any event within 15 days after the end of each Fiscal Month
and at such other times as may be requested by the Administrative Agent or the Collateral Agent, as
of the period then ended, all delivered electronically in a text formatted file (not in an
Adobe *.pdf file):




               (i) a detailed aging of the Loan Parties’ (other than the Excluded Subsidiary Guarantors)
Accounts (1) including all invoices aged by invoice date and due date (with an explanation of the
terms offered) and (2) reconciled to the Borrowing Base Certificate delivered as of such date
prepared in a manner reasonably acceptable to the Collateral Agent, together with a summary
specifying the name, address, and balance due for each Account Debtor;



               (ii) a schedule detailing the Loan Parties’ (other than the Excluded Subsidiary Guarantors)
Inventory, in form satisfactory to the Collateral Agent, (1) by location (showing Inventory in
transit, any Inventory located with a third party under any consignment, bailee arrangement, or
warehouse agreement), by class (raw material, work-in-process and finished goods), by product type,
and by volume on hand, which Inventory shall be valued at the lower of cost (determined on a
first-in, first-out basis) or market and adjusted for Reserves as the Collateral Agent has
previously indicated to the Borrower are deemed by the Collateral Agent to be appropriate, (2)
including a report of any variances or other results of Inventory counts performed by the Borrower
since the last Inventory schedule (including information regarding sales or other reductions,
additions, returns credits issued by any such Loan Party and complaints and claims made against any
such Loan Party), and (3) reconciled to the Borrowing Base Certificate delivered as of such date;



               (iii) a worksheet of calculations prepared by the Borrower to determine Eligible Accounts and
Eligible Inventory, such worksheets detailing the Accounts and Inventory excluded from Eligible
Accounts and Eligible Inventory and the reason for such exclusion;



               (iv) a reconciliation of the Loan Parties’ (other than the Excluded Subsidiary Guarantors)
Accounts and Inventory between the amounts shown in such Loan



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Parties’ general ledgers and financial statements and the reports delivered pursuant to
clauses (i) and (ii) above; and




               (v) a reconciliation of the loan balance per the Borrower’s general ledger to the loan balance
under this Agreement;



          (i) as soon as available but in any event within 15 days after the end of each Fiscal Month
and at such other times as may be requested by the Administrative Agent or the Collateral Agent, as
of the Fiscal Month then ended, a schedule and aging of the Borrower’s accounts payable, delivered
electronically in a text formatted file (not in an Adobe *.pdf file);




          (j) within 15 days after the end of each Fiscal Year, and at such other times as may be
requested by the Administrative Agent or the Collateral Agent, an updated list of all customer
addresses, delivered electronically in a text formatted file (not in an Adobe *.pdf file);




          (k) promptly upon the Administrative Agent’s or the Collateral Agent’s request:




               (i) copies of invoices issued by the Loan Parties (other than the Excluded Subsidiary
Guarantors) in connection with any Accounts, credit memos, shipping and delivery documents, and
other information related thereto;



               (ii) copies of purchase orders, invoices, and shipping and delivery documents in connection
with any Inventory or Equipment purchased by any Loan Party (other than the Excluded Subsidiary
Guarantors); and



               (iii) a schedule detailing the balance of all intercompany accounts of the Loan Parties;



          (l) upon request by the Collateral Agent, the Loan Parties’ (other than the Excluded
Subsidiary Guarantors) sales journals, cash receipts journals (identifying trade and non-trade cash
receipts) and debit memo/credit memo journals;




          (m) as soon as possible and in any event within 30 days after the filing thereof, copies of
all tax returns filed by any Loan Party with the U.S. Internal Revenue Service;




          (n) promptly after the same become publicly available, copies of all periodic and other
reports, proxy statements and other materials filed by the Borrower or any of its Subsidiaries with
the Securities and Exchange Commission, or any Governmental Authority succeeding to any or all of
the functions of said Commission, or with any national securities exchange, or distributed by the
Borrower to its shareholders generally, as the case may be;




          (o) promptly following any request therefor, such other information regarding the operations,
business affairs and financial condition of the Borrower or any of its Subsidiaries, or compliance
with the terms of this Agreement, as the Administrative Agent or any Lender may reasonably request;
and




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          (p) on or before the first day of December of each Fiscal Year, evidence in form and substance
satisfactory to the Administrative Agent that the requirements of Section 5.16 have been met.




     Section 5.02 Notices of Material Events. The Borrower will furnish to the
Administrative Agent and each Lender prompt written notice of the following:



          (a) the occurrence of any Default;




          (b) receipt of any notice of any governmental investigation or any litigation or proceeding
commenced or threatened against any Loan Party that (i) seeks damages in excess of $2,000,000, (ii)
seeks injunctive relief, (iii) is asserted or instituted against any Plan, its fiduciaries or its
assets, (iv) alleges criminal misconduct by any Loan Party, (v) alleges the violation of any
Environmental Law or seeks remedies in connection with any Environmental Law, (vi) contests any
tax, fee, assessment, or other governmental charge in excess of $2,000,000, or (vii) involves any
product recall;




          (c) any Lien (other than Permitted Encumbrances) or claim made or asserted against any of the
Collateral;




          (d) any loss, damage, or destruction to the Collateral in the amount of $1,000,000 or more,
whether or not covered by insurance;




          (e) any and all default notices received under or with respect to any leased location or
public warehouse where Collateral is located (which shall be delivered within two Business Days
after receipt thereof);




          (f) all material amendments to any material agreement of any of the Loan Parties, together
with a copy of each such amendment;




          (g) the fact that a Loan Party has entered into a Hedging Agreement or an amendment to a
Hedging Agreement, together with copies of all agreements evidencing such Hedging Agreement or
amendments thereto (which shall be delivered within two Business Days after the execution thereof);




          (h) the occurrence of any ERISA Event that, alone or together with any other ERISA Events that
have occurred, could reasonably be expected to result in liability of the Borrower and its
Subsidiaries in an aggregate amount exceeding $2,000,000; and




          (i) any other development that results in, or could reasonably be expected to result in, a
Material Adverse Effect.



Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer
or other executive officer of the Borrower setting forth the details of the event or development
requiting such notice and any action taken or proposed to be taken with respect thereto.




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     Section 5.03 Existence; Conduct of Business. Each Loan Party will, and will cause
each of its Subsidiaries to, (a) do or cause to be done all things necessary to preserve, renew and
keep in full force and effect its legal existence and the tights, qualifications, licenses,
permits, franchises, governmental authorizations, intellectual property tights, licenses and
permits material to the conduct of its business, and maintain all requisite authority to conduct
its business in each jurisdiction in which its business is conducted; provided that the foregoing
shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section
6.03 and (b) carry on and conduct its business in substantially the same manner and in
substantially the same fields of enterprise as it is presently conducted.



     Section 5.04 Payment of Obligations. Each Loan Party will, and will cause each of its
Subsidiaries to, pay or discharge all Material Indebtedness and all other material liabilities and
obligations, including Taxes, before the same shall become delinquent or in default, except where
(a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b)
such Loan Party or such Subsidiary has set aside on its books adequate reserves with respect
thereto in accordance with GAAP and (c) such liabilities would not result in aggregate liabilities
in excess of $2,000,000 and none of the Collateral becomes subject to forfeiture or loss as a
result of the contest.



     Section 5.05 Maintenance of Properties. Each Loan Party will, and will cause each of
its Subsidiaries to, keep and maintain all property material to the conduct of its business in good
working order and condition, ordinary wear and tear excepted.



     Section 5.06 Books and Records; Inspection Rights. Each Loan Party will, and will
cause each of its Subsidiaries to, (i) keep proper books of record and account in which full, true
and correct entries are made of all dealings and transactions in relation to its business and
activities and (ii) permit any representatives designated by the Collateral Agent, the
Administrative Agent or any Lender (including employees of the Collateral Agent, the Administrative
Agent or any Lender or any consultants, accountants, lawyers and appraisers retained by the
Collateral Agent, the Administrative Agent or any Lender), upon reasonable prior notice, to visit
and inspect its properties, to examine and make extracts from its books and records, including
environmental assessment reports and Phase I or Phase II studies, and to discuss its affairs,
finances and condition with its officers and independent accountants, all at such reasonable times
and as often as reasonably requested. After the occurrence and during the continuation of any
Event of Default, each Loan Party shall provide the Administrative Agent, the Collateral Agent and
each Lender with access to its suppliers. The Loan Parties acknowledge that the Collateral Agent,
after exercising its rights of inspection, may prepare and distribute to the Lenders certain
Reports pertaining to the Loan Parties’ assets for internal use by the Administrative Agent and the
Lenders.



     Section 5.07 Compliance with Laws. Each Loan Party will, and will cause each of its
Subsidiaries to, comply with all material Requirements of Law (including, without limitation,
Environmental Laws) applicable to it or its property.



     Section 5.08 Use of Proceeds. The proceeds of the Term Loans will be used only (a) to
refinance existing Indebtedness of the Borrower and (b) to pay fees, costs and expenses related to
the Transactions. The proceeds of the Revolving Loans will be used only (a) to refinance



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existing Indebtedness of the Borrower, (b) to pay fees, costs and expenses related to the
Transactions, and (c) for other general corporate purposes. No part of the proceeds of any Loan
and no Letter of Credit will be used, directly or indirectly, for any purpose that entails a
violation of any of the Regulations of the Board, including Regulations T, U and X.



     Section 5.09 Insurance. Each Loan Party will, and will cause each of its Subsidiaries
to, maintain with financially sound and reputable carriers having a financial strength rating of at
least A+ by A.M. Best Company (a) insurance in such amounts (with no greater risk retention) and
against such risks (including loss or damage by fire and loss in transit; theft, burglary,
pilferage, larceny, embezzlement, and other criminal activities; business interruption; general
liability; and workers’ compensation) and such other hazards as is customarily maintained by
companies of established repute engaged in the same or similar businesses operating in the same or
similar locations, (b) if at any time the area in which the Mortgaged Property are located is
designated a “flood hazard area” in any Flood Insurance Rate Map published by the Federal Emergency
Management Agency (or any successor agency), flood insurance in such total amount as required by
Regulation H of the Board, and otherwise comply with the National Flood Insurance Program as set
forth in the Flood Disaster Protection Act of 1973, as it may be amended from time to time and (c)
all insurance required pursuant to the Collateral Documents. The Borrower will furnish to the
Lenders, promptly upon any request therefor by the Administrative Agent or the Collateral Agent
(and in any event no less frequently than once during each twelve-month period), information in
reasonable detail as to the insurance so maintained.



     Section 5.10 Casualty and Condemnation. The Borrower (a) will furnish to the
Collateral Agent, the Administrative Agent and the Lenders prompt written notice of any casualty or
other insured damage to any material portion of the Collateral or the commencement of any action or
proceeding for the taking of any material portion of the Collateral or interest therein under power
of eminent domain or by condemnation or similar proceeding and (b) will ensure that the Net
Proceeds of any such event (whether in the form of insurance proceeds, condemnation awards or
otherwise) are collected and applied in accordance with the applicable provisions of this Agreement
and the Collateral Documents.



     Section 5.11 Field Examinations. At any time that the Collateral Agent requests
(which request shall be made by the Collateral Agent at least once during each calendar year), the
Borrower and the Subsidiary Guarantors will provide the Collateral Agent with audits or field
examinations, or updates thereof, with respect to the Accounts and Inventory of the Loan Parties,
in each case from auditors or valuation consultants selected and engaged by the Collateral Agent
and prepared on a basis satisfactory to the Collateral Agent, such audits, field examinations and
updates to include, without limitation, information required by any applicable laws and
regulations; provided, however, that, so long as no Event of Default has occurred and is
continuing, only one such audit or field examination per calendar year shall be at the expense of
the Loan Parties.



     Section 5.12 Deposit Accounts. Each Loan Party shall cause all deposit accounts to be
(a) maintained with the Collateral Agent, (b) subject to a control agreement in form and substance
satisfactory to the Collateral Agent among such Loan Party, the Collateral Agent, and the
institution where such deposit account is held, (c) to contain less than $500,000.00 in the



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aggregate at any time, or (d) to be payroll, health care, insurance, or other employee benefit
accounts.



     Section 5.13 Additional Collateral; Further Assurances.



          (a) Subject to applicable law, the Borrower and each Subsidiary Guarantor shall cause each of
its Subsidiaries formed or acquired after the Effective Date to become a Loan Party by executing a
Joinder Agreement in the form of Exhibit E (each, a “Joinder Agreement”). Upon execution
and delivery thereof, each such Person (i) shall automatically become a Subsidiary Guarantor
hereunder and thereupon shall have all of the rights, benefits, duties, and obligations in such
capacity under the Loan Documents and (ii) will grant Liens to the Collateral Agent, for the
benefit of the Secured Parties, in any property of such Subsidiary Guarantor which constitutes
Collateral, including any parcel of real property located in the U.S. and owned by such Subsidiary
Guarantor.




          (b) The Borrower and each Subsidiary Guarantor will cause 100% of the issued and outstanding
Equity Interests of each of its Subsidiaries to be subject at all times to a first priority,
perfected Lien in favor of the Collateral Agent pursuant to the terms and conditions of the Loan
Documents.




          (c) Without limiting the foregoing, each Loan Party will, and will cause each of its
Subsidiaries formed or acquired after the Effective Date to, execute and deliver, or cause to be
executed and delivered, to the Collateral Agent such documents, agreements and instruments, and
will take or cause to be taken such further actions (including the filing and recording of
financing statements, fixture filings, mortgages, deeds of trust and other documents and such other
actions or deliveries of the type required by Section 3.01, as applicable), which may be required
by law or which the Collateral Agent may, from time to time, reasonably request to carry out the
terms and conditions of this Agreement and the other Loan Documents and to ensure perfection and
priority of the Liens created or intended to be created by the Collateral Documents, all at the
expense of the Loan Parties. Anything contained in this Agreement or any of the other Loan
Documents to the contrary notwithstanding, no Excluded Subsidiary Guarantor shall be required to
execute a Joinder Agreement (as defined in the Security Agreement) or otherwise grant the
Collateral Agent Liens on any of its real or personal property.




          (d) If any material assets (including any real property or improvements thereto or any
interest therein) are acquired by the Borrower or any Subsidiary Guarantor (other than an Excluded
Subsidiary Guarantor) after the Effective Date (other than assets constituting Collateral under the
Security Agreement that become subject to the Lien in favor of the Collateral Agent upon the
acquisition thereof), the Borrower will notify the Collateral Agent and the Lenders thereof, and,
if requested by the Collateral Agent or the Required Lenders, the Borrower will cause such assets
to be subjected to a Lien securing the Secured Obligations and will take, and cause the Subsidiary
Guarantors to take, such actions as shall be necessary or reasonably requested by the Collateral
Agent to grant and perfect such Liens, including actions described in Section 5.13(c), all at the
expense of the Loan Parties.




          (e) Promptly upon request by the Collateral Agent or the Required Lenders, the Borrower will
take such actions as shall be necessary or reasonably requested by the



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Collateral Agent to increase the “maximum principal indebtedness” referred to in the Mortgage
encumbering the Borrower’s Mortgaged Property located in Niagara County New York to an amount
requested by the Collateral Agent, not to exceed $22,000,000, including without limitation,
executing and delivering an amendment to such Mortgage in form and substance satisfactory to the
Collateral Agent together with any affidavits, agreements or other documents reasonably requested
by Collateral Agent in connection therewith and paying or causing to be paid any mortgage recording
tax or other similar taxes and fees applicable in respect of such increase in such jurisdiction,
all at the expense of the Loan Parties.




     Section 5.14 Required Hedging. On or before 10 Business Days after the Effective
Date, the Borrower shall enter into a Hedging Agreement with respect to at least 50% of the
aggregate principal amount of the Term Loans, which Hedging Agreement (a) shall be maintained in
effect by the Borrower until the Maturity Date in respect of the Term Loans and (b) provide for a
rate cap, and be placed with counterparties, in each case that are acceptable to the Administrative
Agent.



     Section 5.15 Annual Lenders’ Meeting. The Borrower shall, at its sole cost and
expense, arrange for an annual meeting of the Lenders at which the Borrower’s Financial Officers
shall make a presentation to the Lenders regarding the operations, business affairs, prospects and
financial condition of the Borrower and its Subsidiaries and address such additional matters
related to any of the foregoing as any Lender or Agent shall request. Such meetings shall be held
(a) at the chief executive offices of the Borrower, at the New York offices of SG or at such other
location as the Borrower, the Lenders and the Agents shall agree, or (b) via teleconference so long
as copies of any slides or other written materials relating to such presentation shall have been
delivered to the Lenders in advance of such teleconference. Such meetings shall be held
approximately on each anniversary of the Effective Date, as the Borrower and the Lenders shall
agree.



     Section 5.16 Production Sold Forward. The Loan Parties shall maintain on an ongoing
basis at least 25% of their production sold twelve months forward on a firm contract basis and on
terms and conditions otherwise reasonably acceptable to the Administrative Agent.



     Section 5.17 Post Closing Obligations.



          (a) On or before 1 Business Day after the Effective Date the Borrower shall deliver to the
Collateral Agent a deposit account control agreement duly executed by each of the parties thereto
in form and substance satisfactory to the Collateral Agent with respect to the deposit account of
the Borrower maintained at JPMorgan Chase Bank, N.A.




          (b) On or before 60 days after the Effective Date the Borrower shall deliver to the Collateral
Agent (a) an American Land Title Association Lender’s Extended Coverage title insurance policy with
respect to respect to the production facility of WVA located in Fayette County, West Virginia
issued by a title insurer reasonably satisfactory to the Collateral Agent in form and substance,
with endorsements and in amounts reasonably satisfactory to the Collateral Agent assuring the
Collateral Agent that the Mortgage with respect to respect to the production facility of WVA
located in Fayette County, West Virginia is a valid and enforceable first priority mortgage lien on
such Mortgaged Property, free and clear of all defects and encumbrances



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except Permitted Encumbrances, and providing for such other affirmative insurance (including
endorsements for future advances under this Agreement and for mechanics’ liens) and for any other
matter that the Collateral Agent may reasonably request and (b) a current A.L.T.A. survey with
respect to the production facility of WVA located in Fayette County, West Virginia, certified to
the Collateral Agent by a licensed surveyor sufficient to allow the issuer of the lender’s title
insurance policy to issue such policy without a survey exception.




ARTICLE VI




Negative Covenants




     Until the Commitments have expired or terminated and the Secured Obligations have been paid in
full and all Letters of Credit have expired or terminated, the Loan Parties covenant and agree,
jointly and severally, for the benefit of the Lenders, that:



     Section 6.01 Indebtedness. No Loan Party will, nor will it permit any of its
Subsidiaries to, create, incur or suffer to exist any Indebtedness, except:



          (a) the Secured Obligations;




          (b) Indebtedness existing on the date hereof and set forth in Schedule 6.01, and any
extensions, renewals, refinancings and replacements of any such Indebtedness in accordance with
Section 6.01(e);




          (c) Indebtedness of the Borrower to any of its Subsidiaries and of any such Subsidiary to the
Borrower or any other Subsidiary of the Borrower; provided that (i) any Indebtedness of (A) any
Subsidiary of the Borrower that is not a Loan Party or (B) any Excluded Subsidiary Guarantor, in
either case that is owed to the Borrower or any Subsidiary Guarantor shall be subject to Section
6.04 and (ii) any Indebtedness of the Borrower to any of its Subsidiaries, and any Indebtedness of
any Subsidiary Guarantor to any Subsidiary of the Borrower that is not a Loan Party, shall in each
case be subordinated to the Secured Obligations on terms satisfactory to the Administrative Agent;




          (d) Guarantees by the Borrower of any Indebtedness of any of its Subsidiaries, and Guarantees
by any Subsidiary of the Borrower of Indebtedness of the Borrower or any other Subsidiary of the
Borrower; provided that (i) the Indebtedness so Guaranteed is permitted by this Section 6.01, (ii)
Guarantees by the Borrower or any Subsidiary Guarantor of Indebtedness of (A) any Subsidiary of the
Borrower that is not a Loan Party or (B) any Excluded Subsidiary Guarantor, in either case shall be
subject to Section 6.04 and (iii) any Guarantee of any Subsidiary Guarantor permitted under this
clause (d) shall be subordinated to the Secured Obligations of such Subsidiary Guarantor on the
same terms as the Indebtedness so Guaranteed is subordinated to the Secured Obligations;




          (e) Indebtedness which represents an extension, renewal, refinancing or replacement of any of
the Indebtedness described in Section 6.01(b); provided that (i) the principal amount or interest
rate of such Indebtedness is not increased thereby, (ii) any Liens securing such Indebtedness are
not thereby extended to any additional property of any Loan Party, (iii) no Loan Party that is not
originally obligated with respect to repayment of such



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Indebtedness is thereby required to become obligated with respect thereto, (iv) such
extension, refinancing or renewal does not result in a shortening of the average weighted maturity
of the Indebtedness so extended, refinanced or renewed, (v) the terms of any such extension,
refinancing or renewal are not less favorable to the obligor thereunder than the original terms of
such Indebtedness and (iv) if the Indebtedness that is refinanced, renewed or extended was
subordinated in right of payment to the Secured Obligations, then the terms and conditions of the
refinancing, renewal or extension Indebtedness must include subordination terms and conditions that
are at least as favorable to the Administrative Agent and the Lenders as those that were applicable
to the refinanced, renewed or extended Indebtedness;




          (f) Indebtedness owed to any person providing workers’ compensation, health, disability or
other employee benefits or property, casualty or liability insurance, pursuant to reimbursement or
indemnification obligations to such person, in each case incurred in the ordinary course of
business;




          (g) Indebtedness of the Borrower or any of its Subsidiaries in respect of performance bonds,
bid bonds, appeal bonds, surety bonds and similar obligations, in each case provided in the
ordinary course of business;




          (h) Indebtedness in respect of purchase money obligations for fixed or capital assets within
the limitations set forth in Section 6.01(f); provided that, the aggregate
principal amount of all such Indebtedness at any one time outstanding shall not exceed $2,000,000;




          (i) unsecured Subordinated Indebtedness incurred pursuant to Section 11.02 in an
aggregate principal amount not exceeding $5,000,000 at any time outstanding; provided, that
(i) before and after giving effect to any incurrence of Subordinated Indebtedness, no Default or
Event of Default has occurred and is continuing or would result from such incurrence or from the
application of the proceeds therefrom and (ii) prior to any incurrence of Subordinated
Indebtedness, the Borrower shall deliver a certificate of a Financial Officer to the Administrative
Agent setting forth calculations demonstrating that, immediately after giving effect to such
incurrence, the Borrower and its Subsidiaries shall be in pro forma compliance with all of the
covenants set forth in Section 6.13; and




          (j) other unsecured Indebtedness in an aggregate principal amount not exceeding $2,000,000 at
any time outstanding.




     Section 6.02 Liens. No Loan Party will, nor will it permit any of its Subsidiaries
to, create, incur, assume or permit to exist any Lien on any property or asset now owned or
hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable)
or rights in respect of any thereof, except:



          (a) Liens created pursuant to any Loan Document;




          (b) Permitted Encumbrances;




          (c) any Lien on any property or asset of the Borrower or any of its Subsidiaries existing on
the date hereof and set forth in Schedule 6.02; provided that (i) such Lien shall not apply to any
other property or asset of the Borrower or such Subsidiary and



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(ii) such Lien shall secure only those obligations which it secures on the date hereof and any
extensions, renewals and replacements thereof that do not increase the outstanding principal amount
thereof;




          (d) Liens of a collecting bank arising in the ordinary course of business under Section 4-208
of the Uniform Commercial Code as in effect in any relevant jurisdiction covering only the items
being collected upon;




          (e) Liens granted by a Subsidiary of the Borrower that is not a Loan Party in favor of the
Borrower or another Loan Party in respect of Indebtedness owed by such Subsidiary; and




          (f) Liens securing Indebtedness permitted under Section 6.01(h); provided that (i)
such Liens do not at any time encumber any property other than the property financed by such
Indebtedness and (ii) the principal amount of Indebtedness secured thereby does not exceed the cost
or fair market value, whichever is lower, of the property being acquired on the date of acquisition
unless such Indebtedness in excess of the lower of the cost or fair market value would otherwise be
allowed under the terms of Section 6.01.



Notwithstanding the foregoing, none of the Liens permitted pursuant to this Section 6.02 may at any
time attach to any Loan Party’s (1) Accounts, other than those permitted under clause (a) of the
definition of Permitted Encumbrance and Section 6.02(a), or (2) Inventory, other than those
permitted under clauses (a) and (b) of the definition of Permitted Encumbrance and Section 6.02(a).




     Section 6.03 Fundamental Changes.



          (a) No Loan Party will, nor will it permit any of its Subsidiaries to, merge into or
consolidate with any other Person, or permit any other Person to merge into or consolidate with it,
or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect
thereto no Event of Default shall have occurred and be continuing (i) any Subsidiary of the
Borrower may merge into the Borrower in a transaction in which the Borrower is the surviving
corporation, (ii) any Loan Party (other than the Borrower) may merge into any other Loan Party in a
transaction in which the surviving entity is a Loan Party (other than an Excluded Subsidiary
Guarantor) and (iii) any Subsidiary of the Borrower that is not a Loan Party may liquidate or
dissolve if the Borrower determines in good faith that such liquidation or dissolution is in the
best interests of the Borrower and is not materially disadvantageous to the Lenders; provided that
any such merger involving a Person that is not a wholly-owned Subsidiary of the Borrower
immediately prior to such merger shall not be permitted unless also permitted by Section 6.04.




          (b) No Loan Party will, nor will it permit any of its Subsidiaries to, engage in any business
other than businesses of the type conducted by the Borrower and its Subsidiaries on the date of
execution of this Agreement and businesses reasonably related thereto.




     Section 6.04 Investments, Loans, Advances, Guarantees and Acquisitions. No Loan Party
will, nor will it permit any of its Subsidiaries to, purchase, hold or acquire (including pursuant
to any merger with any Person that was not a Loan Party and a wholly owned Subsidiary of the
Borrower prior to such merger) any capital stock, evidences of indebtedness or



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other securities (including any option, warrant or other right to acquire any of the
foregoing) of, make or permit to exist any loans or advances to, Guarantee any obligations of, or
make or permit to exist any investment or any other interest in, any other Person, purchase or
otherwise acquire (in one transaction or a series of transactions) any assets of any other Person
constituting a business unit (whether through purchase of assets, merger or otherwise) or, in the
case of any Excluded Subsidiary Guarantor, purchase or otherwise acquire any assets of any other
Person, except:



          (a) Permitted Investments, subject to control agreements in favor of the Collateral Agent for
the benefit of the Secured Parties or otherwise subject to a perfected security interest in favor
of the Collateral Agent for the benefit of the Secured Parties;




          (b) investments in existence on the Effective Date and described in Schedule 6.04, it being
understood and agreed that working capital advances to the Excluded Subsidiary Guarantors listed on
Schedule 6.04 may be repaid and reborrowed from time to time as long as the outstanding amount of
such working capital advances does not exceed the amount set forth for such Excluded Subsidiary
Guarantor on Schedule 6.04;




          (c) investments by the Borrower and its Subsidiaries in Equity Interests in their respective
Subsidiaries; provided that (i) any such Equity Interests held by a Loan Party shall be pledged
pursuant to the Security Agreement and (ii) the aggregate amount of investments by the Loan Parties
in Subsidiaries of the Borrower that are not Loan Parties or in the Excluded Subsidiary Guarantors
(together with outstanding intercompany loans permitted under clause (B) of the proviso to Section
6.04(d) and outstanding Guarantees permitted under the proviso to Section 6.04(e)) shall not exceed
$250,000 at any time outstanding (in each case determined without regard to any write-downs or
write-offs);




          (d) loans or advances made by the Borrower to any of its Subsidiaries and made by any
Subsidiary of the Borrower to the Borrower or any other Subsidiary of the Borrower; provided that
(A) any such loans and advances made by a Loan Party (other than to another Loan Party) shall be
evidenced by a promissory note pledged pursuant to the Security Agreement and (B) the amount of
such loans and advances made by the Loan Parties to Subsidiaries of the Borrower that are not Loan
Parties or to the Excluded Subsidiary Guarantors (together with all outstanding investments
permitted under clause (B) to the proviso to Section 6.04(c) and all outstanding Guarantees
permitted under the proviso to Section 6.04(e)) shall not exceed $250,000 at any time outstanding
(in each case determined without regard to any write-downs or write-offs); it being understood and
agreed that any accounts payable of an Excluded Subsidiary Guarantor to a Loan Party arising in the
ordinary course of business pursuant to commercial agreements (other than agreements providing for
funded Indebtedness) entered into on arm’s length terms in accordance with Section 6.09(a),
shall not be deemed to be loans or advances by the applicable Loan Party to the applicable Excluded
Subsidiary Guarantor for purposes of this Section 6.04;




          (e) Guarantees constituting Indebtedness permitted by Section 6.01; provided that the
aggregate principal amount of Indebtedness of Subsidiaries of the Borrower that are not Loan
Parties or of the Excluded Subsidiary Guarantors that is Guaranteed by any Loan Party shall
(together with outstanding investments permitted under clause (B) to the proviso to




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Section 6.04(c) and outstanding intercompany loans permitted under clause (B) to the proviso to
Section 6.04(d)) shall not exceed $250,000 at any time outstanding (in each case determined without
regard to any write-downs or write-offs);




          (f) loans or advances made by any Subsidiary of the Borrower to its employees on an
arms-length basis in the ordinary course of business consistent with past practices, in each case
for travel and entertainment expenses, relocation costs and similar purposes up to a maximum of
$25,000 to any employee and up to a maximum of $100,000 in the aggregate at any one time
outstanding;




          (g) subject to Sections 4.2(a) and 4.4 of the Security Agreement, notes payable, or stock or
other securities issued by Account Debtors to any Loan Party pursuant to negotiated agreements with
respect to settlement of such Account Debtor’s Accounts in the ordinary course of business,
consistent with past practices;




          (h) investments in the form of Hedging Agreements permitted by Section 6.07;




          (i) investments of any Person existing at the time such Person becomes a Subsidiary of the
Borrower or consolidates or merges with the Borrower or any of its Subsidiaries so long as such
investments were not made in contemplation of such Person becoming a Subsidiary of the Borrower or
of such merger;




          (j) investments received in connection with the dispositions of assets permitted by Section
6.05;




          (k) investments constituting deposits described in clauses (c) and (d) of the definition of
the term “Permitted Encumbrances”;




          (l) purchases by the Excluded Subsidiary Guarantors of machinery, equipment and other assets
in the ordinary course of business for use in the day-to-day operations of the Excluded Subsidiary
Guarantors; and




          (m) notwithstanding the provisions of clauses (c), (d) and (e) above, investments by the
Borrower in the Excluded Subsidiary Guarantors in an aggregate amount not to exceed $1,000,000 in
any Fiscal Year; provided that the proceeds of such investments are used by the Excluded Subsidiary
Guarantors solely for Capital Expenditures.




     Section 6.05 Asset Sales. No Loan Party will, nor will it permit any of its
Subsidiaries to, sell, transfer, lease or otherwise dispose of any asset, including any Equity
Interest owned by it, nor will the Borrower permit any of its Subsidiaries to issue any additional
Equity Interest in such Subsidiary (other than to the Borrower or another Subsidiary of the
Borrower (other than an Excluded Subsidiary Guarantor) in compliance with Section 6.04), except:



          (a) sales, transfers and dispositions of (i) inventory in the ordinary course of business and
(ii) used, obsolete, worn out or surplus equipment or property in the ordinary course of business;




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          (b) sales, transfers and dispositions to the Borrower or any of its Subsidiaries; provided
that any such sales, transfers or dispositions involving (i) a Subsidiary of the Borrower that is
not a Loan Party or (ii) an Excluded Subsidiary Guarantor, in either case shall be made in
compliance with Section 6.09;




          (c) sales, transfers and dispositions of accounts receivable in connection with the
compromise, settlement or collection thereof;




          (d) sales, transfers and dispositions of investments permitted by clauses (i) and (k) of
Section 6.04;




          (e) dispositions resulting from any casualty or other insured damage to, or any taking under
power of eminent domain or by condemnation or similar proceeding of, any property or asset of the
Borrower or any of its Subsidiaries; and




          (f) sales, transfers and other dispositions of assets (other than Equity Interests in a
Subsidiary of the Borrower unless all Equity Interests in such Subsidiary are sold) that are not
permitted by any other paragraph of this Section; provided that the aggregate fair market value of
all assets sold, transferred or otherwise disposed of in reliance upon this paragraph (f) shall not
exceed $500,000 during any Fiscal Year;



provided that all sales, transfers, leases and other dispositions permitted hereby (other than
those permitted by Sections 6.05(b) and (f)) shall be made for fair value and for at least 75% cash
consideration.




     Section 6.06 Sale and Leaseback Transactions. No Loan Party will, nor will it permit
any of its Subsidiaries to, enter into any arrangement, directly or indirectly, whereby it shall
sell or transfer any property, real or personal, used or useful in its business, whether now owned
or hereafter acquired, and thereafter rent or lease such property or other property that it intends
to use for substantially the same purpose or purposes as the property sold or transferred.



     Section 6.07 Hedging Agreements. No Loan Party will, nor will it permit any of its
Subsidiaries to, enter into any Hedging Agreement, except (a) as otherwise required under Section
5.14, (b) Hedging Agreements entered into to hedge or mitigate risks to which the Borrower or any
of its Subsidiaries has actual exposure (other than those in respect of Equity Interests of the
Borrower or any of its Subsidiaries) and not for speculative purposes, and (c) Hedging Agreements
entered into in order to effectively cap, collar or exchange interest rates (from floating to fixed
rates, from one floating rate to another floating rate or otherwise) with respect to any
interest-bearing liability or investment of the Borrower or any of its Subsidiaries.



     Section 6.08 Restricted Payments; Certain Payments of Indebtedness.



          (a) No Loan Party will, nor will it permit any of its Subsidiaries to, declare or make, or
agree to pay or make, directly or indirectly, any Restricted Payment, or incur any obligation
(contingent or otherwise) to do so, except:




               (i) Subsidiaries of the Borrower may declare and pay dividends ratably with respect to their
Equity Interests; and



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               (ii) the Borrower may make Restricted Payments to Parent that, when aggregated with all
Restricted Payments made on or after the Effective Date pursuant to this Section 6.08(a)(ii), do
not exceed an amount equal to 50% of cumulative Consolidated Net Income for the period from July 1,
2008 through the end of the most recent Fiscal Quarter or Fiscal Year for which Borrower has
delivered the financial statements required pursuant to Section 5.01(a) or (b); provided,
that (x) at the time of and after giving effect to any such Restricted Payment there shall exist no
Default or Event of Default, (y) both before and after giving effect to any such Restricted
Payment, Borrower is in compliance with the covenants set forth in Sections 6.13 on a pro
forma basis and (z) five Business Days prior to any such Restricted Payment, the Borrower shall
deliver to the Administrative Agent a certificate of a Financial Officer in form and substance
satisfactory to the Administrative Agent certifying that the requirements of this Section
6.08(a)(ii) have been met with respect to such Restricted Payment.



          (b) No Loan Party will, nor will it permit any of its Subsidiaries to, make or agree to pay or
make, directly or indirectly, any payment or other distribution (whether in cash, securities or
other property) of or in respect of principal of or interest on any Indebtedness, or any payment or
other distribution (whether in cash, securities or other property), including any sinking fund or
similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any Indebtedness, except:




               (i) payment of Indebtedness created under the Loan Documents;



               (ii) payment of regularly scheduled interest and principal payments as and when due in respect
of any Indebtedness, other than payments in respect of any Subordinated Indebtedness to the extent
prohibited by the subordination provisions applicable thereto;



               (iii) refinancings of Indebtedness to the extent permitted by Section 6.01; and



               (iv) payment of secured Indebtedness that becomes due as a result of the voluntary sale or
transfer of the property or assets securing such Indebtedness.



     Section 6.09 Transactions with Affiliates. No Loan Party will, nor will it permit any
of its Subsidiaries to, sell, lease or otherwise transfer any property or assets to, or purchase,
lease or otherwise acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except (a) transactions that (i) are in the ordinary
course of business and (ii) are at prices and on terms and conditions not less favorable to such
Loan Party or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third
parties, (b) transactions between or among the Borrower and any Subsidiary Guarantor (other than an
Excluded Subsidiary Guarantor, transactions with which shall be governed by the immediately
preceding clause (a)) and not involving any other Affiliate, (c) any investment permitted by
Section 6.04(c), Section 6.04(d) or Section 6.04(m), (d) any Indebtedness permitted under Section
6.01(c), (e) any Restricted Payment permitted by Section 6.08, (f) loans or advances to employees
permitted under Section 6.04(f), (g) the payment of reasonable fees to directors of the Borrower or
any of its Subsidiaries who are not employees of the Borrower or any of its Subsidiaries, and
compensation and employee benefit arrangements paid to, and indemnities



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provided for the benefit of, directors, officers or employees of the Borrower or any of its
Subsidiaries in the ordinary course of business, (h) any issuances of securities or other payments,
awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment
agreements, stock options and stock ownership plans approved by the Borrower’s board of directors,
and (i) the payment of management fees to Marco International in an amount not to exceed $25,000 in
any calendar month.



     Section 6.10 Restrictive Agreements. No Loan Party will, nor will it permit any of
its Subsidiaries to, directly or indirectly, enter into, incur or permit to exist any agreement or
other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of such
Loan Party or any of its Subsidiaries to create, incur or permit to exist any Lien upon any of its
property or assets, or (b) the ability of any Subsidiary of the Borrower that is a Subsidiary
Guarantor to pay dividends or other distributions with respect to any shares of its capital stock
or to make or repay loans or advances to the Borrower or any other Subsidiary that is a Subsidiary
Guarantor of the Borrower or to Guarantee Indebtedness of the Borrower or any other Subsidiary of
the Borrower; provided that (i) the foregoing shall not apply to restrictions and conditions
imposed by law or by any Loan Document, (ii) the foregoing shall not apply to restrictions and
conditions existing on the date hereof identified on Schedule 6.10 (but shall apply to any
extension or renewal of, or any amendment or modification expanding the scope of, any such
restriction or condition), (iii) the foregoing shall not apply to customary restrictions and
conditions contained in agreements relating to the sale of a Subsidiary of the Borrower pending
such sale; provided that such restrictions and conditions apply only to the Subsidiary of the
Borrower that is to be sold and such sale is permitted hereunder, (iv) clause (a) above shall not
apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness
permitted by this Agreement if such restrictions or conditions apply only to the property or assets
securing such Indebtedness and (v) clause (a) above shall not apply to customary provisions in
leases restricting the assignment thereof.



     Section 6.11 Amendment of Material Documents. No Loan Party will, nor will it permit
any of its Subsidiaries to, amend, modify or waive any of its rights under (a) any agreement
relating to any Subordinated Indebtedness or (b) if any such amendment, modification or waiver
would be adverse to the rights or interests of any of the Secured Parties, such Loan Party’s or
such Subsidiary’s certificate of incorporation, by-laws, operating, management or partnership
agreement or other organizational documents.



     Section 6.12 Capital Expenditures. The Borrower will not, nor will it permit any of
its Subsidiaries to, incur or make any Capital Expenditures during any Fiscal Year in an aggregate
amount exceeding (a) for the Fiscal Year ending June 30, 2009, $12,000,000 plus up to
$18,000,000 of Capital Expenditures in connection with the resumption of operations at the
Borrower’s facility located in Niagara, New York and (b) for each Fiscal Year thereafter,
$14,000,000.



     Section 6.13 Financial Covenants.



          (a) Minimum Fixed Charge Coverage Ratio. The Borrower will not permit the Fixed
Charge Coverage Ratio, determined as of the end of any Fiscal Quarter, to be less than 1.50 to
1.00.




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          (b) Maximum Total Leverage Ratio. The Borrower will not permit the Total Leverage
Ratio, determined as of the end of any Fiscal Quarter, to be greater than 2.25 to 1.00.




          (c) Minimum Consolidated Tangible Net Worth. The Borrower will not permit
Consolidated Tangible Net Worth as of the end of any Fiscal Quarter to be less than the lesser of
(i) the sum of (A) $65,000,000 plus (B) an amount equal to 50% of the Consolidated Net
Income for each Fiscal Year commencing with the Fiscal Year ending June 30, 2009 (with no deduction
for a net loss in any such Fiscal Year) and (ii) for any Fiscal Quarter ending after June 30, 2010,
$115,000,000.




     Section 6.14 Accounting Changes. The Borrower will not, nor will it permit any of its
Subsidiaries to, make any material change in accounting treatment or reporting practices, except as
required by GAAP, or change the fiscal year of the Borrower or any of its consolidated
Subsidiaries.



ARTICLE VII




Events of Default




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



          (a) the Borrower shall fail to pay any principal of any Loan or any reimbursement obligation
in respect of any LC Disbursement when and as the same shall become due and payable, whether at the
due date thereof or at a date fixed for prepayment thereof or otherwise;




          (b) the Borrower shall fail to pay any interest on any Loan or any fee or any other amount
(other than an amount referred to in clause (a) of this Article) payable under this Agreement when
and as the same shall become due and payable, and such failure shall continue unremedied for a
period of three Business Days;




          (c) any representation or warranty made or deemed made by or on behalf of any Loan Party or
any of its Subsidiaries or by the Parent in or in connection with this Agreement or any Loan
Document or in any amendment or modification thereof or waiver thereunder, or in any report,
certificate, financial statement or other document furnished pursuant to or in connection with this
Agreement or any Loan Document or any amendment or modification thereof or waiver thereunder, shall
prove to have been materially incorrect when made or deemed made;




          (d) (i) any Loan Party shall fail to observe or perform any covenant, condition or agreement
contained in Section 5.02(a), Section 5.03 (with respect to a Loan Party’s existence), Section 5.08
or Section 5.09 or in Article VI, or (ii) the Parent shall fail to observe or perform any covenant,
condition or agreement contained in Article XI;




          (e) any Loan Party shall fail to observe or perform any covenant, condition or agreement
contained in this Agreement (other than those which constitute a default under another clause of
this Article), and such failure shall continue unremedied for a period of 15 days after the earlier
of (A) any actual knowledge of such breach by an officer of such Loan Party and




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(B) notice thereof from the Administrative Agent to the Borrower (which notice will be given
at the request of any Lender);




          (f) any Loan Party or any of its Subsidiaries shall fail to make any payment (whether of
principal or interest and regardless of amount) in respect of any Material Indebtedness, when and
as the same shall become due and payable;




          (g) any event or condition occurs that results in any Material Indebtedness becoming due prior
to its scheduled maturity or that enables or permits (with or without the giving of notice, the
lapse of time or both) the holder or holders of any Material Indebtedness or any trustee or agent
on its or their behalf to cause any Material Indebtedness to become due, or to require the
prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided
that this clause (g) shall not apply to secured Indebtedness that becomes due as a result of the
voluntary sale or transfer of the property or assets securing such Indebtedness;




          (h) an involuntary proceeding shall be commenced or an involuntary petition shall be filed
seeking (i) liquidation, reorganization or other relief in respect of a Loan Party or any of its
Subsidiaries or its debts, or of a substantial part of its assets, under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for
any Loan Party or any of its Subsidiaries or for a substantial part of its assets, and, in any such
case, such proceeding or petition shall continue undismissed for 60 days or an order or decree
approving or ordering any of the foregoing shall be entered;




          (i) any Loan Party or any of its Subsidiaries shall (i) voluntarily commence any proceeding or
file any petition seeking liquidation, reorganization or other relief under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii)
consent to the institution of, or fail to contest in a timely and appropriate manner, any
proceeding or petition described in clause (h) of this Article, (iii) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for
such Loan Party or any of its Subsidiaries or for a substantial part of its assets, (iv) file an
answer admitting the material allegations of a petition filed against it in any such proceeding,
(v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose
of effecting any of the foregoing;




          (j) any Loan Party or any of its Subsidiaries shall become unable, admit in writing its
inability or fail generally to pay its debts as they become due;




          (k) one or more judgments for the payment of money in an aggregate amount in excess of
$2,000,000 shall be rendered against any Loan Party, any Subsidiary of any Loan Party or any
combination thereof and the same shall remain undischarged for a period of 60 consecutive days
during which execution shall not be effectively stayed, or any action shall be legally taken by a
judgment creditor to attach or levy upon any assets of any Loan Party or any Subsidiary of any Loan
Party to enforce any such judgment or any Loan Party or any Subsidiary of any Loan Party shall fail
within 60 days to discharge one or more non-monetary judgments or orders which, individually or in
the aggregate, could reasonably be expected to have a Material



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Adverse Effect, which judgments or orders, in any such case, are not stayed on appeal or
otherwise being appropriately contested in good faith by proper proceedings diligently pursued;




          (l) an ERISA Event shall have occurred that, in the opinion of the Required Lenders, when
taken together with all other ERISA Events that have occurred, could reasonably be expected to
result in a Material Adverse Effect;




          (m) a Change in Control shall occur;




          (n) the occurrence of any “default” as defined in any Loan Document (other than this
Agreement) or the breach of any of the terms or provisions of any Loan Document (other than this
Agreement), which default or breach continues beyond any period of grace therein provided;




          (o) the Subsidiary Guaranty shall fail to remain in full force or effect or any action shall
be taken to discontinue or to assert the invalidity or unenforceability of the Subsidiary Guaranty,
or any Subsidiary Guarantor shall fail to comply with any of the terms or provisions of the
Subsidiary Guaranty, or any Subsidiary Guarantor shall deny that it has any further liability under
the Subsidiary Guaranty, or shall give notice to such effect;




          (p) any Collateral Document shall for any reason fail to create a valid and perfected first
priority security interest in any Collateral purported to be covered thereby, except as permitted
by the terms of any Collateral Document, or any Collateral Document shall fail to remain in full
force or effect or any action shall be taken to discontinue or to assert the invalidity or
unenforceability of any Collateral Document, or any Loan Party shall fail to comply with any of the
terms or provisions of any Collateral Document;




          (q) any material provision of any Loan Document for any reason ceases to be valid, binding and
enforceable in accordance with its terms (or any Loan Party shall challenge the enforceability of
any Loan Document or shall assert in writing, or engage in any action or inaction based on any such
assertion, that any provision of any of the Loan Documents has ceased to be or otherwise is not
valid, binding and enforceable in accordance with its terms); or




          (r) the termination of or default under any material indenture, agreement or other instrument
binding upon any Loan Party or any of its Subsidiaries or its assets which results in a Material
Adverse Effect.



then, and in every such event (other than an event with respect to the Borrower described in clause
(h) or (i) of this Article), and at any time thereafter during the continuance of such event, the
Administrative Agent may, and at the request of the Required Lenders shall, by notice to the
Borrower, take either or both of the following actions, at the same or different times: (i)
terminate the Commitments, and thereupon the Commitments shall terminate immediately, and (ii)
declare the Loans then outstanding to be due and payable in whole (or in part, in which case any
principal not so declared to be due and payable may thereafter be declared to be due and payable),
and thereupon the principal of the Loans so declared to be due and payable, together with accrued
interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall become
due and payable immediately, without presentment, demand, protest or other notice of any kind, all
of which are hereby waived by the Borrower; and in case of any


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event with respect to the Borrower described in clause (h) or (i) of this Article, the Commitments
shall automatically terminate and the principal of the Loans then outstanding, together with
accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder,
shall automatically become due and payable, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by the Borrower. Upon the occurrence and the continuance
of an Event of Default, the Administrative Agent and the Collateral Agent may, and at the request
of the Required Lenders shall, exercise any rights and remedies provided to the Administrative
Agent or the Collateral Agent under the Loan Documents or at law or equity, including all remedies
provided under the UCC.




ARTICLE VIII




The Agents




     Each of the Lenders and the Issuing Bank hereby irrevocably appoints each Agent as its agent
and authorizes each Agent to take such actions on its behalf, including execution of the other Loan
Documents, as applicable, and to exercise such powers as are delegated to such Agent by the terms
of the Loan Documents, together with such actions and powers as are reasonably incidental thereto.



     Each financial institution serving as an Agent hereunder and under the other Loan Documents
shall have the same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not an Agent, and such institution and its Affiliates may
accept deposits from, lend money to and generally engage in any kind of business with the Loan
Parties or any Subsidiary of a Loan Party or other Affiliate thereof as if it were not an Agent
hereunder.



     The Agents shall not have any duties or obligations except those expressly set forth in the
Loan Documents. Without limiting the generality of the foregoing, (a) the Agents shall not be
subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and
is continuing, (b) the Agents shall not have any duty to take any discretionary action or exercise
any discretionary powers, except discretionary rights and powers expressly contemplated by the Loan
Documents that the applicable Agent is required to exercise in writing as directed by the Required
Lenders (or such other number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 9.02), and (c) except as expressly set forth in the Loan
Documents, the Agents shall not have any duty to disclose, and shall not be liable for the failure
to disclose, any information relating to any Loan Party or any of its Subsidiaries that is
communicated to or obtained by the institution serving as an Agent or any of its Affiliates in any
capacity. Neither Agent shall be liable for any action taken or not taken by it with the consent
or at the request of the Required Lenders (or such other number or percentage of the Lenders as
shall be necessary under the circumstances as provided in Section 9.02) or in the absence of its
own gross negligence or willful misconduct. Neither Agent shall be deemed to have knowledge of any
Default unless and until written notice thereof is given to such Agent by the Borrower, the
Administrative Agent or a Lender, and neither Agent shall be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in or in connection
with any Loan Document, (ii) the contents of any certificate, report or other document delivered
hereunder or in connection with any Loan Document, (iii) the performance or observance of any



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of the covenants, agreements or other terms or conditions set forth in any Loan Document, (iv)
the validity, enforceability, effectiveness or genuineness of any Loan Document or any other
agreement, instrument or document, (v) the creation, perfection or priority of Liens on the
Collateral or the existence of the Collateral, or (vi) the satisfaction of any condition set forth
in Article III or elsewhere in any Loan Document, other than to confirm receipt of items expressly
required to be delivered to such Agent.



     Each Agent shall be entitled to rely upon, and shall not incur any liability for relying upon,
any notice, request, certificate, consent, statement, instrument, document or other writing
believed by it to be genuine and to have been signed or sent by the proper Person. Each Agent also
may rely upon any statement made to it orally or by telephone and believed by it to be made by the
proper Person, and shall not incur any liability for relying thereon. Each Agent may consult with
legal counsel (who may be counsel for the Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it in accordance with
the advice of any such counsel, accountants or experts.



     Each Agent may perform any and all its duties and exercise its rights and powers by or through
any one or more sub-agents appointed by such Agent. Each Agent and any such sub-agent of such
Agent may perform any and all its duties and exercise its rights and powers through their
respective Related Parties. The exculpatory provisions of the preceding paragraphs shall apply to
any such sub-agent and to the Related Parties of each Agent and any such subagent, and shall apply
to their respective activities in connection with the syndication of the credit facilities provided
for herein as well as their activities as an Agent.



     Subject to the appointment and acceptance of a successor Administrative Agent or Collateral
Agent as provided in this paragraph, either Agent may resign at any time by notifying the other
Agent, the Lenders, the Issuing Bank and the Borrower. Upon any such resignation, the Required
Lenders shall have the right, with the consent of the Borrower (such consent not to be unreasonably
withheld); provided that, no such consent shall be required at any time when an Event of
Default has occurred and is continuing, to appoint a successor Administrative Agent or Collateral
Agent, as applicable. If no successor shall have been so appointed by the Required Lenders and
shall have accepted such appointment within 30 days after the retiring Agent gives notice of its
resignation, then the retiring Agent may, on behalf of the Lenders and the Issuing Bank, appoint a
successor Administrative Agent or Collateral Agent, as applicable, which shall be (a) a commercial
bank organized under the laws of the United States or of any State thereof or doing business in the
United States and having a combined capital and surplus of at least $250,000,000 or (b) an
Affiliate of any such commercial bank. Upon the acceptance by a successor of its appointment as
Administrative Agent or Collateral Agent, as applicable, such successor shall succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Administrative Agent or
Collateral Agent, as applicable, and the retiring Administrative Agent or Collateral Agent, as
applicable, shall be discharged from its duties and obligations hereunder and under the other Loan
Documents. The fees payable by the Borrower to a successor Administrative Agent or Collateral
Agent, as applicable, shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor. After the Administrative Agent’s or the Collateral
Agent’s resignation hereunder, the provisions of this Article and Section 9.03 shall continue in
effect for the benefit of such retiring Administrative Agent or Collateral Agent, as applicable,
its sub agents and their respective



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Related Parties in respect of any actions taken or omitted to be taken by any of them while it
was acting as Administrative Agent or Collateral Agent, as applicable.



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



     Each Lender hereby agrees that (a) it has requested a copy of each Report prepared by or on
behalf of the Administrative Agent or the Collateral Agent; (b) neither the Administrative Agent
nor the Collateral Agent (i) makes any representation or warranty, express or implied, as to the
completeness or accuracy of any Report or any of the information contained therein or any
inaccuracy or omission contained in or relating to a Report or (ii) shall be liable for any
information contained in any Report; (c) the Reports are not comprehensive audits or examinations,
and any Person performing any field examination will inspect only specific information regarding
the Loan Parties and will rely significantly upon the Loan Parties’ books and records, as well as
on representations of the Loan Parties’ personnel, and neither the Administrative Agent nor the
Collateral Agent undertakes any obligation to update, correct or supplement the Reports; (d) it
will keep all Reports confidential and strictly for its internal use, not share the Report with any
Loan Party or any other Person except as otherwise permitted pursuant to this Agreement; and (e)
without limiting the generality of any other indemnification provision contained in this Agreement,
it will pay and protect, and indemnify, defend, and hold the Agents and any such other Person
preparing a Report harmless from and against, the claims, actions, proceedings, damages, costs,
expenses, and other amounts (including reasonable attorney fees) incurred by as the direct or
indirect result of any third parties who obtain all or part of any Report through the indemnifying
Lender.



ARTICLE IX




Miscellaneous




     Section 9.01 Notices.



          (a) Except in the case of notices and other communications expressly permitted to be given by
telephone (and subject to Section 9.01(b)), all notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by
certified or registered mail or sent by facsimile, as follows:




               (i) if to any Loan Party, to the Borrower at:


Globe Metallurgical Inc.

P.O. Box 157

County Road 32

Beverly, OH 45715




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Attention: Arden Sims

Facsimile No: 740-984-8609




               With a copy to:


MI Capital One Penn Plaza

250 West 34th Street, Suite 2514

New York, New York 10119

Attention: Ted Heilman

Facsimile No: 212-798-8180




               (ii) if to the Administrative Agent, the Issuing Bank, the Swingline Lender or the Collateral
Agent, to SG at:


Société Générale

1221 Avenue of the Americas

New York NY 10020

Attention: Ms. Laurence Lemesle

Facsimile No: 212-278-7417




               (iii) if to any other Lender, to it at its address or facsimile number set forth in its
Administrative Questionnaire.


All such notices and other communications (i) sent by hand or overnight courier service, or mailed
by certified or registered mail, shall be deemed to have been given when received or (ii) sent by
facsimile shall be deemed to have been given when sent, provided that if not given during normal
business hours for the recipient, shall be deemed to have been given at the opening of business on
the next Business Day for the recipient.




          (b) Notices and other communications to the Lenders hereunder may be delivered or furnished by
electronic communications (including e-mail and Internet or intranet websites) pursuant to
procedures approved by the Administrative Agent; provided that the foregoing shall not apply to
notices pursuant to Article II or to Compliance Certificates delivered pursuant to Section 5.01(d)
unless otherwise agreed by the Administrative Agent and the applicable Lender. The Administrative
Agent or the Borrower (on behalf of the Loan Parties) may, in its discretion, agree to accept
notices and other communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be limited to particular
notices or communications. All such notices and other communications (i) sent to an e-mail address
shall be deemed received upon the sender’s receipt of an acknowledgement from the intended
recipient (such as by the “return receipt requested” function, as available, return e-mail or other
written acknowledgement); provided that if not given during the normal business hours of the
recipient, such notice or communication shall be deemed to have been given at the opening of
business on the next Business Day for the recipient, and (ii) posted to an Internet or intranet
website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail
address as described in the foregoing clause (b)(i)
of notification that such notice or communication is available and identifying the website
address therefor.




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          (c) Any party hereto may change its address or facsimile number for notices and other
communications hereunder by notice to the other parties hereto.




     Section 9.02 Waivers; Amendments.



          (a) No failure or delay by the Administrative Agent, the Collateral Agent, the Issuing Bank or
any Lender in exercising any right or power hereunder or under any other Loan Document shall
operate as a waiver thereof, nor shall any single or partial exercise of any such right or power,
or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other
or further exercise thereof or the exercise of any other right or power. The rights and remedies
of the Administrative Agent, the Collateral Agent, the Issuing Bank and the Lenders hereunder and
under any other Loan Document are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provision of any Loan Document or consent to any
departure by any Loan Party therefrom shall in any event be effective unless the same shall be
permitted by Section 9.02(b), and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. Without limiting the generality of the
foregoing, the making of a Loan or the issuance of a Letter of Credit shall not be construed as a
waiver of any Default, regardless of whether the Administrative Agent, the Collateral Agent, any
Lender or the Issuing Bank may have had notice or knowledge of such Default at the time.




          (b) Neither this Agreement nor any other Loan Document nor any provision hereof or thereof may
be waived, amended or modified except (1) in the case of this Agreement, pursuant to an agreement
or agreements in writing entered into by the Borrower and the Required Lenders or (2) in the case
of any other Loan Document, pursuant to an agreement or agreements in writing entered into by the
Administrative Agent or the Collateral Agent, as applicable, and the Loan Party or Loan Parties
that are parties thereto, with the consent of the Required Lenders; provided that no such agreement
shall (i) increase the Commitment or Commitments of any Lender without the written consent of such
Lender, (ii) reduce or forgive the principal amount of any Loan or LC Disbursement or reduce the
rate of interest thereon, or reduce or forgive any interest or fees payable hereunder, without the
written consent of each Lender affected thereby, (iii) postpone any scheduled date of payment of
the principal amount of any Loan or LC Disbursement, or any date for the payment of any interest,
fees or other Obligations payable hereunder, or reduce the amount of, waive or excuse any such
payment, or postpone the scheduled date of expiration of any Commitment, without the written
consent of each Lender affected thereby, (iv) change Section 2.17(b) or (d) in a manner that would
alter the priority of the application of payments or the manner in which payments are shared,
without the written consent of each Lender, (v) amend, modify or waive the definition of Borrowing
Base or any of the definitions used therein or in such definitions or amend, modify or waive
Section 2.10(b), without the written consent of the Super-Majority Revolving Lenders, (vi) change
any of the provisions of this Section or the definition of “Required Lenders” or any other
provision of any Loan Document specifying the number or percentage of Lenders (or Lenders of any
Class) required to waive, amend or modify any rights thereunder or make any determination or grant
any consent thereunder, without the written consent of each Lender, (vii) release any Subsidiary
Guarantor from its obligation under the Subsidiary Guaranty (except as otherwise permitted
herein or in the other Loan Documents) without the written consent of each Lender, (viii) except as
provided in Section 9.02(d) or (e) or in any Collateral Document, release all or substantially




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all
of the Collateral without the written consent of each Lender, or (ix) amend, modify or waive
Section 11.02 or the Capital Contribution Agreement without the written consent of each Lender;
provided, further, that no such agreement shall amend, modify or otherwise affect the rights or
duties of the Administrative Agent, the Collateral Agent, the Issuing Bank or the Swingline Lender
hereunder without the prior written consent of the Administrative Agent, the Collateral Agent, the
Issuing Bank or the Swingline Lender, as the case may be. The Administrative Agent may also amend
Schedule 2.01 to reflect assignments entered into pursuant to Section 9.04




          (c) The Lenders hereby irrevocably authorize the Collateral Agent, at its option and in its
sole discretion, to release any Liens granted to the Collateral Agent by the Loan Parties on any
Collateral (i) upon the termination of all Commitments, the payment and satisfaction in full in
cash of all Secured Obligations (other than Unliquidated Obligations), and the cash
collateralization of all Unliquidated Obligations in a manner satisfactory to each affected Lender,
(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 the terms
of this Agreement (and the Collateral Agent may rely conclusively on any such certificate, without
further inquiry), (iii) constituting property leased to a Loan Party under a lease which has
expired or been terminated in a transaction permitted under this Agreement, or (iv) as required to
effect any sale or other disposition of such Collateral in connection with any exercise of remedies
of the Agents and the Lenders pursuant to Article VII. Any 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 Loan Parties in respect of) all interests retained by the
Loan Parties, including the proceeds of any sale, all of which shall continue to constitute part of
the Collateral.




          (d) If, in connection with any proposed amendment, waiver or consent requiring the consent of
“each Lender” or “each Lender affected thereby,” the consent of the Required Lenders is obtained
but the consent of other necessary Lenders is not obtained (any such Lender whose consent is
necessary but not obtained being referred to herein as a “Non-Consenting Lender”), then the
Borrower may elect to replace a Non-Consenting Lender as a Lender party to this Agreement; provided
that, concurrently with such replacement, (i) another financial institution which is reasonably
satisfactory to the Borrower and the Administrative Agent shall agree, as of such date, to purchase
for cash the Loans and other Obligations due to the Non-Consenting Lender pursuant to an Assignment
Agreement and to become a Lender for all purposes under this Agreement and to assume all
obligations of the Non-Consenting Lender to be terminated as of such date and to comply with the
requirements of Section 9.04(b), and (ii) the Borrower shall pay to such Non-Consenting Lender in
same day funds on the day of such replacement (1) all interest, fees and other amounts then accrued
but unpaid to such Non-Consenting Lender by the Borrower hereunder to and including the date of
termination, including payments due to such Non-Consenting Lender under Sections 2.14 and 2.16, and
(2) an amount, if any, equal to the payment which would have been due to such Lender on the day of
such replacement under Section 2.15 had the Loans of such Non-Consenting Lender been prepaid on
such date rather than sold to the replacement Lender.




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     Section 9.03 Expenses; Indemnity; Damage Waiver.



          (a) The Borrower shall pay (i) all reasonable out of pocket expenses incurred by the Agents
and their respective Affiliates, including the reasonable fees, charges and disbursements of
counsel for each Agent, in connection with the syndication and distribution (including, without
limitation, via the Internet or through a service such as Intralinks) of the credit facilities
provided for herein, the preparation and administration of the Loan Documents or any amendments,
modifications or waivers of the provisions of the Loan Documents (whether or not the transactions
contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses
incurred by the Issuing Bank in connection with the issuance, amendment, renewal or extension of
any Letter of Credit or any demand for payment thereunder and (iii) all out-of-pocket expenses
incurred by any Secured Party, including the fees, charges and disbursements of any counsel for any
Secured Party, in connection with the enforcement, collection or protection of its rights in
connection with the Loan Documents, including its rights under this Section, or in connection with
the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses
incurred during any workout, restructuring or similar negotiations in respect of such Loans or
Letters of Credit. Expenses being reimbursed by the Borrower under this Section include; without
limiting the generality of the foregoing, costs and expenses incurred in connection with:




               (i) due diligence completed by the Administrative Agent and the Collateral Agent and all
appraisals;



               (ii) field examinations and the preparation of Reports based on the fees charged by a third
party retained by the Administrative Agent or the Collateral Agent, as applicable, or the
internally allocated fees for each Person employed by the Administrative Agent or the Collateral
Agent, as applicable, with respect to each field examination, together with the reasonable fees and
expenses associated with collateral monitoring services performed by the Administrative Agent or
the Collateral Agent, as applicable, (and the Borrower agrees to modify or adjust the computation
of the Borrowing Base — which may include maintaining additional Reserves, modifying the advance
rates or modifying the eligibility criteria for the components of the Borrowing Base — to the
extent required by the Administrative Agent as a result of any such evaluation, appraisal or
monitoring);



               (iii) lien and title searches and title insurance;



               (iv) taxes, fees and other charges for recording the Mortgages, filing financing statements
and continuations, and other actions to perfect, protect, and continue the Collateral Agent’s
Liens, and all Phase I Environmental Assessments;



               (v) sums paid or incurred to take any action required of any Loan Party under the Loan
Documents that such Loan Party fails to pay or take; and



               (vi) forwarding loan proceeds, collecting checks and other items of payment, and establishing
and maintaining the accounts and lock boxes, and costs and expenses of preserving and protecting
the Collateral.



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All of the foregoing costs and expenses may be charged to the Borrower as Revolving Loans or to
another deposit account, all as described in Section 2.17(c).




          (b) The Borrower shall indemnify each Secured Party and each Related Party thereof (each such
Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any
and all losses, claims, damages, penalties, liabilities and related expenses, including the fees,
charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any
Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of
the Loan Documents or any agreement or instrument contemplated thereby, the performance by the
parties hereto of their respective obligations thereunder or the consummation of the Transactions
or any other transactions contemplated hereby, (ii) any Loan or Letter of Credit or the use of the
proceeds therefrom (including any refusal by the Issuing Bank to honor a demand for payment under a
Letter of Credit if the documents presented in connection with such demand do not strictly comply
with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of
Hazardous Materials on or from any property owned or operated by the Borrower or any of its
Subsidiaries, or any Environmental Liability related in any way to the Borrower or any of its
Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as
to any Indemnitee, be available to the extent that such losses, claims, damages, penalties,
liabilities or related expenses are determined by a court of competent jurisdiction by final and
non-appealable judgment to have resulted from the gross negligence or willful misconduct of such
Indemnitee.




          (c) To the extent that the Borrower fails to pay any amount required to be paid by it to the
Administrative Agent, the Collateral Agent, the Issuing Bank or the Swingline Lender under Section
9.03(a) or (b), each Lender severally agrees to pay to the Administrative Agent, the Collateral
Agent, the Issuing Bank or the Swingline Lender, as the case may be, such Lender’s Applicable
Percentage (based on the Aggregate Credit Exposure) (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the
unreimbursed expense or indemnified loss, claim, damage, penalty, liability or related expense, as
the case may be, was incurred by or asserted against the Administrative Agent, the Collateral
Agent, the Issuing Bank or the Swingline Lender in its capacity as such.




          (d) TO THE EXTENT PERMITTED BY APPLICABLE LAW, NO LOAN PARTY SHALL ASSERT, AND EACH HEREBY
WAIVES, ANY CLAIM AGAINST ANY INDEMNITEE, ON ANY THEORY OF LIABILITY, FOR SPECIAL, INDIRECT,
CONSEQUENTIAL OR PUNITIVE DAMAGES (AS OPPOSED TO DIRECT OR ACTUAL DAMAGES) ARISING OUT OF, IN
CONNECTION WITH, OR AS A RESULT OF, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY AGREEMENT OR
INSTRUMENT CONTEMPLATED HEREBY OR THEREBY, THE TRANSACTIONS, ANY LOAN OR LETTER OF CREDIT OR THE
USE OF THE PROCEEDS THEREOF.




          (e) All amounts due under this Section shall be payable not later than 10 days after written
demand therefor.





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     Section 9.04 Successors and Assigns.



          (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns permitted hereby (including any
Affiliate of the Issuing Bank that issues any Letter of Credit), except that (i) the Borrower may
not assign or otherwise transfer any of its rights or obligations hereunder without the prior
written consent of each Lender (and any attempted assignment or transfer by the Borrower without
such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights
or obligations hereunder except in accordance with this Section. Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than the parties hereto,
their respective successors and assigns permitted hereby (including any Affiliate of the Issuing
Bank that issues any Letter of Credit), Participants (to the extent provided in Section 9.04(c))
and, to the extent expressly contemplated hereby, the Related Parties of each of the Secured
Parties) any legal or equitable right, remedy or claim under or by reason of this Agreement.



          (b) (i) Subject to the conditions set forth in Section 9.04(b)(ii), any Lender may assign to
one or more assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans at the time owing to it) with the prior
written consent (such consent not to be unreasonably withheld) of:




          (A) the Borrower; provided that no such consent of the Borrower shall be
required for an assignment to (1) a Lender, an Affiliate of a Lender or an Approved
Fund or (2) at any time when an Event of Default has occurred and is continuing, any
other assignee;




          (B) the Administrative Agent; provided that no such consent of the
Administrative Agent shall be required for an assignment of all or any portion of a
Term Loan to a Lender, an Affiliate of a Lender or an Approved Fund; and




          (C) the Issuing Bank; provided that no such consent of the Issuing Bank shall
be required for an assignment of all or any portion of a Term Loan.



               (ii) Assignments shall be subject to the following additional conditions:




          (A) except in the case of an assignment to a Lender or an Affiliate of a Lender
or an assignment of the entire remaining amount of the assigning Lender’s Commitment
or Loans of any Class, the amount of the Commitment or Loans of the assigning Lender
subject to each such assignment (determined as of the date the Assignment Agreement
with respect to such assignment is delivered to the Administrative Agent) shall not
be less than $5,000,000 unless each of the Borrower and the Administrative Agent
otherwise consent; provided that no such consent of the Borrower shall be required
at any time when an Event of Default has occurred and is continuing;



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          (B) each partial assignment of the assigning Lender’s rights and obligations in
respect of each Class of Commitments or Loans shall be made with the concurrent
assignment of a proportionate part of such Lender’s rights and obligations, if any,
in respect of the other Class of Commitments or Loans unless the Administrative
Agent otherwise consents;




          (C) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment Agreement, together with a processing and
recordation fee of $3,500;




          (D) the assignee, if it is not already a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire; and




          (E) no assignment may be made to the Borrower or any of its Subsidiaries or
Affiliates.



     For the purposes of this Section 9.04(b), the term “Approved Fund” has the following
meaning:




“Approved Fund” means any Person (other than a natural person) that is
engaged in making, purchasing, holding or investing in bank loans and similar
extensions of credit in the ordinary course of its business and that is administered
or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an
Affiliate of an entity that administers or manages a Lender.



               (iii) Subject to acceptance and recording thereof pursuant to Section 9.04(b)(iv), from and
after the effective date specified in each Assignment Agreement, the assignee thereunder shall be a
party hereto and, to the extent of the interest assigned by such Assignment Agreement, have the
rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall,
to the extent of the interest assigned by such Assignment Agreement, be released from its
obligations under this Agreement (and, in the case of an Assignment Agreement covering all of the
assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections 2.14, 2.15, 2.16 and
9.03). Any assignment or transfer by a Lender of rights or obligations under this Agreement that
does not comply with this Section 9.04 shall be treated for purposes of this, Agreement as a sale
by such Lender of a participation in such rights and obligations in accordance with Section
9.04(c).



               (iv) The Administrative Agent, acting for this purpose as an agent of the Borrower, shall
maintain at one of its offices a copy of each Assignment Agreement 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 Loans and LC Disbursements 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
Borrower, the Administrative Agent, the Issuing Bank 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



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contrary. The Register shall be available for inspection by the Borrower, the Issuing Bank
and any Lender, at any reasonable time and from time to time upon reasonable prior notice.



               (v) Upon its receipt of a duly completed Assignment Agreement executed by an assigning Lender
and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee is
already a Lender hereunder), the processing and recordation fee referred to in Section 9.04(b) and
any written consent to such assignment required by Section 9.04(b), the Administrative Agent shall
accept such Assignment Agreement and record the information contained therein in the Register;
provided that if either the assigning Lender or the assignee shall have failed to make any payment
required to be made by it pursuant to Section 2.04, 2.05(d) or (e), 2.06(b), 2.17(d) or 9.03(c),
the Administrative Agent shall have no obligation to accept such Assignment Agreement and record
the information therein in the Register unless and until such payment shall have been made in full,
together with all accrued interest thereon. No assignment shall be effective for purposes of this
Agreement unless it has been recorded in the Register as provided in this paragraph.



          (c) (i) Any Lender may, without the consent of the Borrower, the Administrative Agent, the
Issuing Bank or the Swingline Lender, sell participations to one or more banks or other entities (a
“Participant”) in all or a portion of such Lender’s rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans owing to it); provided that
(A) such Lender’s obligations under this Agreement shall remain unchanged, (B) such Lender shall
remain solely responsible to the other parties hereto for the performance of such obligations and
(C) the Borrower, the Administrative Agent, the Collateral Agent, the Issuing Bank and the other
Lenders shall continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to
which a Lender sells such a participation shall provide that such Lender shall retain the sole
fight to enforce this Agreement and to approve any amendment, modification or waiver of any
provision of this Agreement; provided that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment, modification or
waiver described in the first proviso to Section 9.02(b) that affects such Participant. Subject to
Section 9.04(c)(ii), the Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.14, 2.15 and 2.16 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to Section 9.04(b). To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 9.08 as though it were a Lender;
provided that such Participant agrees to be subject to Section 2.17(c) as though it were a Lender.



               (ii) A Participant shall not be entitled to receive any greater payment under Section 2.14 or
2.16 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 the Borrower’s prior written consent. A Participant that would be a Foreign Lender if it
were a Lender shall not be entitled to the benefits of Section 2.16 unless the Borrower is notified
of the participation sold to such Participant and such Participant agrees, for the benefit of the
Borrower, to comply with Section 2.16(e) as though it were a Lender.



          (d) Any Lender may at any time pledge or assign a security interest in all or any portion of
its rights under this Agreement to secure obligations of such Lender, including



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without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank,
and this Section shall not apply to any such pledge or assignment of a security interest; provided
that no such pledge or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.



     Section 9.05 Survival. All covenants, agreements, representations and warranties made
by the Loan Parties in the Loan Documents and in the certificates or other instruments delivered in
connection with or pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the other parties hereto and shall survive the execution and delivery of
the Loan Documents and the making of any Loans and issuance of any Letters of Credit, regardless of
any investigation made by any such other party or on its behalf and notwithstanding that any
Secured Party may have had notice or knowledge of any Default or incorrect representation or
warranty at the time any credit is extended hereunder, 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 under this Agreement is outstanding and unpaid or any Letter of Credit is outstanding and
so long as the Commitments have not expired or terminated. The provisions of Sections 2.14, 2.15,
2.16 and 9.03 and Article VIII shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or
termination of the Letters of Credit and the Commitments or the termination of this Agreement or
any provision hereof.



     Section 9.06 Counterparts; Integration; Effectiveness. This Agreement may be executed
in counterparts (and by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a single contract.
This Agreement, the other Loan Documents and any separate letter agreements with respect to fees
payable to the Administrative Agent constitute the entire contract among the parties relating to
the subject matter hereof and supersede any and all previous agreements and understandings, oral or
written, relating to the subject matter hereof. Except as provided in Section 3.01, this Agreement
shall become effective when it shall have been executed by the Administrative Agent and when the
Administrative Agent shall have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns. Delivery of an
executed counterpart of a signature page of this Agreement by facsimile shall be effective as
delivery of a manually executed counterpart of this Agreement.



     Section 9.07 Severability. Any provision of any Loan Document held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such invalidity, illegality or unenforceability without affecting the validity, legality
and enforceability of the remaining provisions thereof; and the invalidity of a particular
provision in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.



     Section 9.08 Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time
to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general
or special, time or demand, provisional or final) at any time held and other obligations at any



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time owing by such Lender or Affiliate to or for the credit or the account of the Borrower or
any Subsidiary Guarantor against any of and all the Secured Obligations held by such Lender,
irrespective of whether or not such Lender shall have made any demand under the Loan Documents and
although such obligations may be unmatured. The applicable Lender shall notify the Borrower and
the Administrative Agent of such set-off or application; provided that any failure to give or any
delay in giving such notice shall not affect the validity of any such set-off or application under
this Section. The rights of each Lender under this Section are in addition to other rights and
remedies (including other rights of setoff) which such Lender may have.



     Section 9.09 Governing Law; Jurisdiction; Consent to Service of Process.



          (a) THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A CONTRARY EXPRESS CHOICE OF LAW
PROVISION) SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BUT
OTHERWISE WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS OF THE STATE OF NEW YORK).



          (b) EACH LOAN PARTY AND THE PARENT HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF
AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY U.S. FEDERAL OR NEW YORK STATE COURT
SITTING IN THE BOROUGH OF MANHATTAN, NEW YORK, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO ANY LOAN DOCUMENTS, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF
THE 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 COURT OR, TO THE
EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this
Agreement or any other Loan Document shall affect any right that any Secured Party may otherwise
have to bring any action or proceeding relating to this Agreement or any other Loan Document
against any Loan Party or the Parent or their respective properties in the courts of any
jurisdiction.



          (c) EACH LOAN PARTY AND THE PARENT 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 ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN SECTION 9.09(B). 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



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SECTION 9.01. NOTHING IN THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT WILL AFFECT THE RIGHT OF ANY PARTY
TO THIS AGREEMENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.




     Section 9.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES
HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION.



     Section 9.11 Headings. Article and Section headings and the Table of Contents used
herein are for convenience of reference only, are not part of this Agreement and o shall not affect
the construction of, or be taken into consideration in interpreting, this Agreement.



     Section 9.12 Confidentiality. Each of the Administrative Agent, the Collateral Agent,
the Issuing Bank and the Lenders agrees to maintain the confidentiality of the Information (as
defined below), except that Information may be disclosed (a) to its and its Affiliates’ directors,
officers, employees and agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information confidential), (b) to the extent
requested by any regulatory authority, (c) to the extent required by Requirement of Law or by any
subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with
the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement
or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an
agreement containing provisions substantially the same as those of this Section, to (i) any
assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights
or obligations under this Agreement or (ii) any actual or prospective counterparty (or its
advisors) to any swap or derivative transaction relating to the Loan Parties and their obligations,
(g) with the consent of the Borrower or (h) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this Section or (ii) becomes available to the
Administrative Agent, the Collateral Agent, the Issuing Bank or any Lender on a non-confidential
basis from a source other than the Borrower. For the purposes of this Section, “Information” means all information received from the Borrower relating to the Borrower or
its business, other than any such information that is available to the Administrative Agent, the
Collateral Agent, the Issuing Bank or any Lender on a non-confidential basis prior to disclosure by
the Borrower; provided that, in the case of information received from the Borrower after the date
hereof, such information is clearly identified at the time of delivery as confidential. Any Person
required to maintain the confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has exercised the



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same degree of care to maintain the confidentiality of such Information as such Person would accord
to its own confidential information.



     Section 9.13 Several Obligations; Nonreliance; Violation of Law. The respective
obligations of the Lenders hereunder are several and not joint and the failure of any Lender to
make any Loan or perform any of its obligations hereunder shall not relieve any other Lender from
any of its obligations hereunder. Each Lender hereby represents that it is not relying on or
looking to any margin stock for the repayment of the Borrowings provided for herein. Anything
contained in this Agreement to the contrary notwithstanding, neither the Issuing Bank nor any
Lender shall be obligated to extend credit to the Borrower in violation of any Requirement of Law.



     Section 9.14 USA PATRIOT Act. Each Lender that is subject to the requirements of the
USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the
“Act”) hereby notifies the Borrower that, pursuant to the requirements of the Act, it is
required to obtain, verify and record information that identifies the Borrower, which information
includes the name and address of the Borrower and other information that will allow such Lender to
identify the Borrower in accordance with the Act.



     Section 9.15 Appointment for Perfection. Each Lender hereby appoints each other
Lender as its agent for the purpose of perfecting Liens, for the benefit of the Secured Parties, in
assets which, in accordance with Article 9 of the UCC or any other applicable law, 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.
Anything contained in this Agreement or any other Loan Document to the contrary notwithstanding,
each Loan Party and each Secured Party hereby agree that no Secured Party shall have any right
individually to realize upon any of the Collateral, it being understood and agreed that all powers,
rights and remedies hereunder and under the Collateral Documents may be exercised solely by
Collateral Agent on behalf of the Secured Parties in accordance with the terms hereof.



     Section 9.16 Amendment, Restatement and Rearrangement of Existing Credit Agreement.
The parties hereto agree that this Agreement amends, restates and rearranges the Existing Credit
Agreement in its entirety.



ARTICLE X




Subsidiary Guaranty




     Section 10.01 Guaranty. Each Subsidiary Guarantor hereby agrees that it is jointly
and severally liable for, and, as primary obligor and not merely as surety, absolutely, irrevocably
and unconditionally guarantees to the Administrative Agent for the benefit of the Secured Parties
the prompt payment when due, whether at stated maturity, upon acceleration or otherwise, and at all
times thereafter, of the Secured Obligations and all costs and expenses including, without
limitation, all court costs and attorneys’ and paralegals’ fees (including allocated costs of in-



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house counsel and paralegals) and expenses paid or incurred by the Secured Parties in
endeavoring to collect all or any part of the Secured Obligations from, or in prosecuting any
action against, the Borrower, any Subsidiary Guarantor or any other guarantor of all or any part of
the Secured Obligations (such costs and expenses, together with the Secured Obligations,
collectively the “Guaranteed Obligations”). Each Subsidiary Guarantor further agrees that
the Guaranteed Obligations may be extended or renewed in whole or in part without notice to or
further assent from it, and that it remains bound upon its guarantee notwithstanding any such
extension or renewal. All terms of this Subsidiary Guaranty apply to and may be enforced by or on
behalf of any domestic or foreign branch or Affiliate of any Lender that extended any portion of
the Guaranteed Obligations.




     Section 10.02 Guaranty of Payment; Continuing Guaranty. This Subsidiary Guaranty is a
guaranty of payment and not of collection. Each Subsidiary Guarantor waives any right to require
any Secured Party to sue the Borrower, any Subsidiary Guarantor, any other guarantor, or any other
person obligated for all or any part of the Guaranteed Obligations (each, an “Obligated
Party”), or otherwise to enforce its payment against any collateral securing all or any part of
the Guaranteed Obligations. This Subsidiary Guaranty is a continuing guaranty and shall be binding
upon each Subsidiary Guarantor and its successors and assigns, and each Subsidiary Guarantor
irrevocably waives any right to revoke this Subsidiary Guaranty as to future transactions giving
rise to any Guaranteed Obligations.



     Section 10.03 No Discharge or Diminishment of Subsidiary Guaranty.



          (a) Except as otherwise provided for herein, the obligations of each Subsidiary Guarantor
hereunder are irrevocable, unconditional and absolute and not subject to any reduction, limitation,
impairment or termination for any reason (other than the indefeasible payment in full in cash of
the Guaranteed Obligations, the termination or expiration of all of the Commitments and the
termination or expiration of all Letters of Credit), including: (i) any claim of waiver, release,
extension, renewal, settlement, surrender, alteration, or compromise of any of the Guaranteed
Obligations, by operation of law or otherwise; (ii) any change in the corporate existence,
structure or ownership of the Borrower or any other guarantor of or other person liable for any of
the Guaranteed Obligations; (iii) any insolvency, bankruptcy, reorganization or other similar
proceeding affecting any Obligated Party, or their assets or any resulting release or discharge of
any obligation of any Obligated Party; or (iv) the existence of any claim, setoff or other rights
which any Subsidiary Guarantor may have at any time against any Obligated Party, any Secured Party,
or any other person, whether in connection herewith or in any unrelated transactions.



          (b) The obligations of each Subsidiary Guarantor hereunder are not subject to any defense or
setoff, counterclaim, recoupment, or termination whatsoever by reason of the invalidity,
illegality, or unenforceability of any of the Guaranteed Obligations or otherwise, or any provision
of applicable law or regulation purporting to prohibit payment by any Obligated Party, of the
Guaranteed Obligations or any part thereof.



          (c) Further, the obligations of any Subsidiary Guarantor hereunder are not discharged or
impaired or otherwise affected by: (i) the failure of any Secured Party to assert any claim or
demand or to enforce any remedy with respect to all or any part of the Guaranteed



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Obligations; (ii) any waiver or modification of or supplement to any provision of any
agreement relating to the Guaranteed Obligations; (iii) any release, non-perfection, or invalidity
of any indirect or direct security for the obligations of the Borrower for all or any part of the
Guaranteed Obligations or any obligations of any other guarantor of or other person liable for any
of the Guaranteed Obligations; (iv) any action or failure to act by any Secured Party with respect
to any collateral securing any part of the Guaranteed Obligations; or (v) any default, failure or
delay, willful or otherwise, in the payment or performance of any of the Guaranteed Obligations, or
any other circumstance, act, omission or delay that might in any manner or to any extent vary the
risk of such Subsidiary Guarantor or that would otherwise operate as a discharge of any Subsidiary
Guarantor as a matter of law or equity (other than the indefeasible payment in full in cash of the
Guaranteed Obligations, the termination or expiration of all of the Commitments and the termination
or expiration of all Letters of Credit).



     Section 10.04 Defenses Waived. To the fullest extent permitted by applicable law,
each Subsidiary Guarantor hereby waives any defense based on or arising out of any defense of the
Borrower or any Subsidiary Guarantor or the unenforceability of all or any part of the Guaranteed
Obligations from any cause, or the cessation from any cause of the liability of the Borrower or any
Subsidiary Guarantor, other than the indefeasible payment in full in cash of the Guaranteed
Obligations, the termination or expiration of all of the Commitments and the termination or
expiration of all Letters of Credit. Without limiting the generality of the foregoing, each
Subsidiary Guarantor irrevocably waives acceptance hereof, presentment, demand, protest and, to the
fullest extent permitted by law, any notice not provided for herein, as well as any requirement
that at any time any action be taken by any person against any Obligated Party, or any other
person. The Collateral Agent may, at its election, foreclose on any Collateral held by it by one
or more judicial or non-judicial sales, accept an assignment of any such Collateral in lieu of
foreclosure or otherwise act or fail to act with respect to any collateral securing all or a part
of the Guaranteed Obligations, compromise or adjust any part of the Guaranteed Obligations, make
any other accommodation with any Obligated Party or exercise any other right or remedy available to
it against any Obligated Party, without affecting or impairing in any way the liability of such
Subsidiary Guarantor under this Subsidiary Guaranty except to the extent the Guaranteed Obligations
have been fully and indefeasibly paid in cash. To the fullest extent permitted by applicable law,
each Subsidiary Guarantor waives any defense arising out of any such election even though that
election may operate, pursuant to applicable law, to impair or extinguish any right of
reimbursement or subrogation or other right or remedy of any Subsidiary Guarantor against any
Obligated Party or any security.



     Section 10.05 Rights of Subrogation. No Subsidiary Guarantor will assert any right,
claim or cause of action, including, without limitation, a claim of subrogation, contribution or
indemnification that it has against any Obligated Party, or any collateral, until the Loan Parties
and the Subsidiary Guarantors have fully performed all their obligations to the Secured Parties,
the indefeasible payment in full in cash of the Guaranteed Obligations, the termination or
expiration of all of the Commitments and the termination or expiration of all Letters of Credit.



     Section 10.06 Reinstatement; Stay of Acceleration. If at any time any payment of any
portion of the Guaranteed Obligations is rescinded or must otherwise be restored or returned upon
the insolvency, bankruptcy, or reorganization of the Borrower or otherwise, each Subsidiary
Guarantor’s obligations under this Subsidiary Guaranty with respect to that payment



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shall be reinstated at such time as though the payment had not been made and whether or not
the Secured Parties are in possession of this Subsidiary Guaranty. If acceleration of the time for
payment of any of the Guaranteed Obligations is stayed upon the insolvency, bankruptcy or
reorganization of the Borrower, all such amounts otherwise subject to acceleration under the terms
of any agreement relating to the Guaranteed Obligations shall nonetheless be payable by the
Subsidiary Guarantors forthwith on demand by the Lender.



     Section 10.07 Information. Each Subsidiary Guarantor assumes all responsibility for
being and keeping itself informed of the Borrower’s financial condition and assets, and of all
other circumstances beating upon the risk of nonpayment of the Guaranteed Obligations and the
nature, scope and extent of the risks that each Subsidiary Guarantor assumes and incurs under this
Subsidiary Guaranty, and agrees no Secured Party shall have any duty to advise any Subsidiary
Guarantor of information known to it regarding those circumstances or risks.



     Section 10.08 Taxes. All payments of the Guaranteed Obligations will be made by each
Subsidiary Guarantor free and clear of and without deduction for any Indemnified Taxes or Other
Taxes; provided that if any Subsidiary Guarantor shall be required to deduct any Indemnified Taxes
or Other Taxes from such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to additional sums payable
under this Section) the applicable Secured Party receives an amount equal to the sum it would have
received had no such deductions been made, (ii) such Subsidiary Guarantor shall make such
deductions and (iii) such Subsidiary Guarantor shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.



     Section 10.09 Maximum Liability. The provisions of this Subsidiary Guaranty are
severable, and in any action or proceeding involving any state corporate law, or any state, federal
or foreign bankruptcy, insolvency, reorganization or other law affecting the rights of creditors
generally, if the obligations of any Subsidiary Guarantor under this Subsidiary Guaranty would
otherwise be held or determined to be avoidable, invalid or unenforceable on account of the amount
of such Subsidiary Guarantor’s liability under this Subsidiary Guaranty, then, notwithstanding any
other provision of this Subsidiary Guaranty to the contrary, the amount of such liability shall,
without any further action by the Subsidiary Guarantors or the Lenders, be automatically limited
and reduced to the highest amount that is valid and enforceable as determined in such action or
proceeding (such highest amount determined hereunder being the relevant Subsidiary Guarantor’s
“Maximum Liability”. This Section with respect to the Maximum Liability of each Subsidiary
Guarantor is intended solely to preserve the rights of the Lenders to the maximum extent not
subject to avoidance under applicable law, and no Subsidiary Guarantor nor any other person or
entity shall have any right or claim under this Section with respect to such Maximum Liability,
except to the extent necessary so that the obligations of any Subsidiary Guarantor hereunder shall
not be rendered voidable under applicable law. Each Subsidiary Guarantor agrees that the
Guaranteed Obligations may at any time and from time to time exceed the Maximum Liability of each
Subsidiary Guarantor without impairing this Subsidiary Guaranty or affecting the rights and
remedies of the Lenders hereunder; provided that, nothing in this sentence shall be construed to
increase any Subsidiary Guarantor’s obligations hereunder beyond its Maximum Liability.



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     Section 10.10 Contribution. In the event any Subsidiary Guarantor (a “Paying
Guarantor”) shall make any payment or payments under this Subsidiary Guaranty or shall suffer
any loss as a result of any realization upon any collateral granted by it to secure its obligations
under this Subsidiary Guaranty, each other Subsidiary Guarantor (each a “Non-Paying
Guarantor”) shall contribute to such Paying Guarantor an amount equal to such Non-Paying
Guarantor’s “Applicable Percentage” of such payment or payments made, or losses suffered,
by such Paying Guarantor. For purposes of this Article X, each Non-Paying Guarantor’s
“Applicable Percentage” with respect to any such payment or loss by a Paying Guarantor
shall be determined as of the date on which such payment or loss was made by reference to the ratio
of (i) such Non-Paying Guarantor’s Maximum Liability as of such date (without giving effect to any
right to receive, or obligation to make, any contribution hereunder) or, if such Non-Paying
Guarantor’s Maximum Liability has not been determined, the aggregate amount of all monies received
by such Non-Paying Guarantor from the Borrower after the date hereof (whether by loan, capital
infusion or by other means) to (ii) the aggregate Maximum Liability of all Subsidiary Guarantors
hereunder (including such Paying Guarantor) as of such date (without giving effect to any right to
receive, or obligation to make, any contribution hereunder), or to the extent that a Maximum
Liability has not been determined for any Subsidiary Guarantor, the aggregate amount of all monies
received by such Subsidiary Guarantors from the Borrower after the date hereof (whether by loan,
capital infusion or by other means). Nothing in this provision shall affect any Subsidiary
Guarantor’s several liability for the entire amount of the Guaranteed Obligations (up to such
Subsidiary Guarantor’s Maximum Liability). Each of the Subsidiary Guarantors covenants and agrees
that its right to receive any contribution under this Subsidiary Guaranty from a Non-Paying
Guarantor shall be subordinate and junior in right of payment to the payment in full in cash of the
Guaranteed Obligations, the termination or expiration of all of the Commitments and the termination
or expiration of all Letters of Credit. This provision is for the benefit of both the
Administrative Agent, the Issuing Bank, the Lenders and the Subsidiary Guarantors and may be
enforced by any one, or more, or all of them in accordance with the terms hereof.



     Section 10.11 Liability Cumulative. The liability of each Loan Party as a Subsidiary
Guarantor under this Article X is in addition to and shall be cumulative with all liabilities of
each Loan Party to the Secured Parties under this Agreement and the other Loan Documents to which
such Loan Party is a party or in respect of any obligations or liabilities of the other Loan
Parties, without any limitation as to amount, unless the instrument or agreement evidencing or
creating such other liability specifically provides to the contrary.



ARTICLE XI




Covenants of Parent




     Until the Commitments have expired or terminated and the Secured Obligations have been paid in
full and all Letters of Credit have expired or terminated, the Parent covenants and agrees for the
benefit of the Lenders, that:



     Section 11.01 Limitation on Certain Acquisitions by the Parent. The Parent will not,
directly or indirectly, acquire the Equity Interests in any Person, whether by purchase, merger,
consolidation or otherwise, if, as a result thereof, any Loan Party would thereby become liable,



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contingently or otherwise, in respect of any obligations under ERISA that could reasonably be
expected to result in a Material Adverse Effect.



     Section 11.02 Capital Contribution Agreement. On or before the Effective Date, the
Parent shall enter into a Capital Contribution Agreement with the Borrower in form and substance
satisfactory to the Collateral Agent providing for a capital commitment of the Parent to the
Borrower in an aggregate amount of $5,000,000.00. The Parent hereby acknowledges that (a) the
Borrower’s rights under the Capital Contribution Agreement shall at all times be subject to a
perfected first priority Lien in favor of the Collateral Agent for the benefit of the Secured
Parties pursuant to the Collateral Documents and (b) the Collateral Agent may exercise the
Borrower’s rights under the Capital Contribution Agreement as provided in this Section. If, (1) at
the end of any Fiscal Quarter ending on or before June 30, 2011, Adjusted Consolidated EBITDA for
the four Fiscal Quarter period ending on the last day of such Fiscal Quarter is less than
$40,000,000 or (2) the Borrower fails to deliver financial statements pursuant to Section 5.01(a)
or (b) for any Fiscal Quarter or Fiscal Year ending on or before June 30, 2011 within 30 days after
the date for delivery specified in the applicable Section, the Collateral Agent may, by providing
written notice to the Parent (a “Required Contribution Notice”), require funding of the
Parent’s capital commitment under the Capital Contribution Agreement in an amount equal to the
lesser of (x) in the case of clause (1) above, an amount equal to $40,000,000 minus
Adjusted Consolidated EBITDA for such period or, in the case of clause (2) above, $5,000,000.00 and
(y) the remaining unfunded capital commitment under the Capital Contribution Agreement (the
“Required Contribution Amount”). Following receipt of a Required Contribution Notice, the
Parent shall within five Business Days from the receipt thereof do one of the following: (i) make a
capital contribution to the Borrower, (ii) purchase Equity Interests of such type and at a price as
may be mutually agreed between the Borrower and the Parent or (iii) to the extent permitted under
Section 6.01(i), purchase unsecured Subordinated Indebtedness of the Borrower, so long as
the total dollar amount of such capital contribution or purchase is at least equal to the Required
Contribution Amount and the proceeds of such capital contribution or purchase are transmitted
directly to a deposit account of the Borrower which meets the requirements of Section 5.12. The
Parent shall maintain restricted cash on its balance sheet sufficient to fully fund the remaining
capital commitment of the Parent under the Capital Contribution Agreement. The Parent may, at any
time after the Effective Date, elect to satisfy all or a portion of its capital commitment under
the Capital Contribution Agreement by making a capital contribution or purchase that meets the
requirements of this Section 11.02, regardless of whether such funding is required under this
Section 11.02 at the time of such capital contribution or purchase and upon making capital
contributions or purchases totaling $5,000,000 and otherwise meeting the requirements of this
Section 11.02, the Parent’s obligations under this Section shall terminate. For avoidance of
doubt, the proceeds from the issuance of additional Equity Interests of or capital contributions to
the Borrower pursuant to Section 3.01(p) on or before the Effective Date shall not reduce
the capital commitment of the Parent pursuant to the Capital Contribution Agreement which shall be
reduced only to the extent of payments actually made.



[Signature Pages Follow]




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



	 	 	 	 	 
	 	BORROWER:



GLOBE METALLURGICAL INC.

 	 
	 	By:  	 	 
	 	 	Name:  	Vickie L. Hudson 	 
	 	 	Title:  	Vice President, Finance 	 
	 
	 	SUBSIDIARY GUARANTORS:



ALABAMA SAND AND GRAVEL, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	Vickie L. Hudson 	 
	 	 	Title:  	Vice President, Finance 	 
	 
	 	LAUREL FORD RESOURCES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	WEST VIRGINIA ALLOYS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	Vickie L. Hudson 	 
	 	 	Title:  	Vice President, Finance 	 
	 
	 	PARENT:



GLOBE SPECIALTY METALS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



Signature Page to Second Amended and Restated Credit Agreement

Globe Metallurgical Inc.





 









 








	 	 	 	 	 
	 	SOCIETE GENERALE, as Administrative Agent, 

Issuing Bank, Swingline Lender, Collateral Agent, 

and a Lender

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



Signature Page to Second Amended and Restated Credit Agreement

Globe Metallurgical Inc.






 









 








	 	 	 	 	 
	 	FORTIS BANK SA/NV, NEW YORK
BRANCH,
as a Lender

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



Signature Page to Second Amended and Restated Credit Agreement

Globe Metallurgical Inc.




 









 








	 	 	 	 	 
	 	BROWN BROTHERS HARRIMAN & CO., as a 

Lender

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



Signature Page to Second Amended and Restated Credit Agreement

Globe Metallurgical Inc.




 









 








	 	 	 	 	 
	 	NATIXIS, NEW YORK BRANCH, as a Lender

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 





Signature Page to Second Amended and Restated Credit Agreement

Globe Metallurgical Inc.






 











 





ANNEX A




DEFINITIONS




     This Annex A is attached to and constitutes an integral part of the Second Amended and
Restated Credit Agreement, dated as of September 18, 2008 (this “Agreement”), by and among
GLOBE METALLURGICAL INC., as Borrower, ALABAMA SAND AND GRAVEL, INC., LAUREL FORD RESOURCES, INC.
and WEST VIRGINIA ALLOYS, INC., as Subsidiary Guarantors, GLOBE SPECIALTY METALS, INC., as Parent,
the LENDERS FROM TIME TO TIME PARTY HERETO, and SOCIETE GENERALE, as Administrative Agent, Issuing
Bank, Swingline Lender and Collateral Agent.



     As used in this Agreement, the following terms have the meanings specified:



     “ABR” when used in reference to any Loan or Borrowing, refers to the fact that such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by
reference to the Alternate Base Rate.



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



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



     “Adjusted Consolidated EBITDA” means, for any Fiscal Quarter, an amount equal to (a)
Consolidated EBITDA for such Fiscal Quarter plus (b) the amount funded by the Parent to the
Borrower under the Capital Contribution Agreement pursuant to Section 11.02 in respect of
such Fiscal Quarter.



     “Administrative Agent” means SG, in its capacity as administrative agent for the
Lenders hereunder, and also means and includes any successor Administrative Agent appointed
pursuant to Article VIII.



     “Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.



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



     “Agents” means, collectively, the Administrative Agent and the Collateral Agent.



     “Aggregate Credit Exposure” means, as of any time of determination, the aggregate
Credit Exposure of all the Lenders.



     “Agreement” has the meaning assigned to such term in the introductory paragraph of
this Annex A.



     “Alternate 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 Effective Rate in effect on such day
plus 1/2 of 1%. Any change in the Alternate Base Rate due to a change in the Prime Rate or
the



Annex A-Page 1









 







Federal Funds Effective Rate shall be effective from and including the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.



     “Applicable Margin” means, for any day with respect to (a) any LIBOR Term Loan, a rate
per annum equal to 2.25%, (b) any ABR Term Loan, a rate per annum equal to 1.50%, and (c) any ABR
Revolving Loan or LIBOR Revolving Loan or the Commitment Fee, the applicable rate per annum set
forth below under the caption “LIBOR Revolving Loans”, “ABR Revolving Loans” or “Commitment Fee”,
as the case may be, in each case based upon the Total Leverage Ratio as of the last day of the
Fiscal Quarter of the Borrower most-recently ended:



	 	 	 	 	 	 	 
	 	 	LIBOR Revolving	 	 	 	 
	Total Leverage Ratio	 	Loans	 	ABR Revolving Loans	 	Commitment Fee
	Level 1:

> 2.00:1.00
	 	2.25%
	 	1.50%
	 	0.50%
	Level 2:	 	2.00%	 	1.00%	 	0.40%
	<2.00:1.00 and

> 1.50:1.00
	 	 
	 	 
	 	 
	Level 3:	 	1.75%	 	0.50%	 	0.30%
	<1.50:1.00
	 	 
	 	 
	 	 






     For purposes of the foregoing, (a) the Applicable Margin shall be determined as of the end of
each Fiscal Quarter based upon the Compliance Certificate delivered by the Borrower pursuant to
Section 5.01(d) and the related annual or quarterly consolidated financial statements and (b) each
change in the Applicable Margin resulting from a change in the Total Leverage Ratio shall be
effective during the period commencing on and including the date which is five Business Days after
the delivery to the Administrative Agent of the Compliance Certificate and the related consolidated
financial statements indicating such change and ending on the date immediately preceding the
effective date of the next such change; provided that (i) until the date which is five
Business Days after the delivery to the Administrative Agent of a Compliance Certificate and the
related consolidated financial statements with respect to the first full Fiscal Quarter ending
after the Effective Date, the “Applicable Margin” shall be the applicable rate per annum set forth
above in Level 1, and (ii) if the Borrower fails to deliver any Compliance Certificate required to
be delivered by it pursuant to Section 5.01(d) and/or the related consolidated financial
statements, the “Applicable Margin” shall, at the option of the Administrative Agent or at the
request of the Required Lenders, be the applicable rate per annum set forth above in Level 1 during
the period from the expiration of the time for delivery of such Compliance Certificate or
consolidated financial statements until the same are delivered to the Administrative Agent.



     “Applicable Percentage” means, with respect to any Lender (a) with respect to the
Revolving Commitments, the Revolving Loans, the LC Exposure and the Swingline Loans, a percentage
equal to a fraction the numerator of which is such Lender’s Revolving Commitment and the
denominator of which is the aggregate Revolving Commitments of all Lenders; provided that, if the
Revolving Commitments have terminated or expired, the Applicable Percentage of each Lender for
purposes of this clause (a) shall be determined based upon such Lender’s share



Annex A-Page 2









 







of the aggregate Revolving Exposures at that time, (b) with respect to the Term Loans, a
percentage equal to a fraction the numerator of which is the outstanding principal amount of such
Lender’s Term Loan and the denominator of which is the aggregate outstanding principal amount of
all Term Loans, and (c) with respect to the Aggregate Credit Exposure, a percentage equal to a
fraction the numerator of which is such Lender’s Credit Exposure plus such Lender’s unused
Commitment and the denominator of which is the Aggregate Credit Exposure plus the aggregate unused
Commitments.



     “Approved Fund” has the meaning assigned to such term in Section 9.04.



     “AS&G” means Alabama Sand and Gravel, Inc., a Delaware corporation.



     “Assignment Agreement” means an assignment and assumption agreement entered into by a
Lender and an assignee (with the consent of any party whose consent is required by Section 9.04),
and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by
the Administrative Agent.



     “Availability” means, as of any time of determination, an amount equal to (a) the
lesser of the total Revolving Commitments and the Borrowing Base minus (b) the Revolving
Exposure of all Lenders.



     “Availability Period” means the period from and including the Effective Date to but
excluding the earlier of the Maturity Date and the date of termination of the Commitments.



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



     “Borrower” means Globe Metallurgical Inc., a Delaware corporation.



     “Borrowing” means (a) Revolving Loans of the same Type that are made, converted or
continued on the same date and, in the case of LIBOR Loans, as to which a single Interest Period is
in effect, (b) Term Loans of the same Type that are made, converted or continued on the same date
and, in the case of LIBOR Loans, as to which a single Interest Period is in effect, and (c) a
Swingline Loan.



     “Borrowing Base” means, as of any time of determination, an amount equal to (a) 100%
of Cash Collateral at such time plus (b) 90% of Eligible Accounts constituting
Credit-Enhanced Accounts at such time plus (c) 85% of Eligible Accounts not constituting
Credit-Enhanced Accounts at such time plus (d) the sum of (i) 85% of Eligible Inventory
consisting of finished goods at such time and (ii) 75% of Eligible Inventory consisting of raw
materials at such time, in each case valued at the lower of cost or market value and determined on
a first-in-first-out basis plus (e) 85% of Eligible L/C’s at such time minus (f)
Reserves.



     “Borrowing Base Certificate” means a certificate of a Financial Officer of the
Borrower in substantially the form of Exhibit C or another form which is acceptable to the
Administrative Agent in its sole discretion.



Annex A-Page 3









 





     “Borrowing Request” means a request by the Borrower for a Borrowing in the form of
Exhibit F with appropriate insertions.



     “Business Day” means any day that is not a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to remain closed; provided
that, when used in connection with a LIBOR Loan, 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 Contribution Agreement” means a capital contribution agreement among the
Parent and the Borrower pursuant to the requirements of Section 11.02 in form and substance
satisfactory to the Collateral Agent.



     “Capital Expenditures” means, without duplication, any expenditure or commitment to
expend money for any purchase or other acquisition of any asset which would be classified as a
fixed or capital asset on a consolidated balance sheet of the Borrower and its Subsidiaries
prepared in conformity with GAAP.



     “Capital Lease Obligations” of any Person means the obligations of such Person to pay
rent or other amounts under any lease of (or other arrangement conveying the right to use) real or
personal property, or a combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of
such obligations shall be the capitalized amount thereof determined in conformity with GAAP.



     “Cash Collateral” means (a) Dollars of a Loan Party (other than an Excluded Subsidiary
Guarantor) which have been deposited with the Collateral Agent for the benefit of the Secured
Parties as Collateral for all Secured Obligations pursuant to the Collateral Documents, and on and
in which the Collateral Agent has a valid, perfected and exclusive first priority Lien; and (b)
Dollars of a Loan Party (other than an Excluded Subsidiary Guarantor) held at another financial
institution, provided that such cash collateral is subject to control agreement and other
Collateral Documents in form and substance satisfactory to the Collateral Agent pursuant to which
the Collateral Agent has a valid, perfected and exclusive first priority Lien.



     “Change in Control” means (a) the failure of the Parent to own, free and clear of all
Liens or other encumbrances, at least 95% of the issued and outstanding voting Equity Interests of
the Borrower; (b) the direct or indirect acquisition after the Effective Date by any person (as
such term is used in Section 13(d) and Section 14(d)(2) of the Securities Exchange Act of 1934), or
related persons constituting a group (as such term is used in Rule 13d-5 under the Securities
Exchange Act of 1934) other than a Permitted Holder, of beneficial ownership of issued and
outstanding shares of voting stock of the Parent, the result of which acquisition is that such
person or such group possesses in excess of 35% of the combined voting power of all then-issued and
outstanding voting stock of the Parent; or (c) during any period of 12 consecutive months,
beginning with and after the Effective Date, individuals who at the beginning of such 12-month
period were directors of the Parent (together with new directors elected by, or nominated for
election by, such directors or directors elected under this parenthetical clause) shall cease for
any



Annex A-Page 4









 







reason to constitute a majority of the board of directors of the Parent at any time during
such period.



     “Change in Law” means (a) the adoption of any law, rule or regulation after the date
of this Agreement, (b) any change in any law, rule or regulation or in the interpretation or
application thereof by any Governmental Authority after the date of this Agreement or (c)
compliance by any Lender or the Issuing Bank (or, for purposes of Section 2.14(b), by any lending
office of such Lender or by such Lender’s or the Issuing Bank’s holding company, if any) with any
request, guideline or directive (whether or not having the force of law) of any Governmental
Authority made or issued after the date of this Agreement.



     “Class”, when used in reference to any Loan or Borrowing, refers to whether such Loan,
or the Loans comprising such Borrowing, are Revolving Loans, Term Loans or Swingline Loans.



     “Code” means the Internal Revenue Code of 1986, as amended from time to time.



     “Collateral” means any and all property owned, leased or operated by any Loan Party
and covered by the Collateral Documents and any and all other property of any Loan Party, now
existing or hereafter acquired, that may at any time be or become subject to a security interest or
Lien in favor of the Collateral Agent, on behalf of the Secured Parties, to secure the Secured
Obligations.



     “Collateral Access Agreement” has the meaning assigned to such term in the Security
Agreement.



     “Collateral Agent” means SG, in its capacity as Collateral Agent on behalf of the
Secured Parties, and also means and includes any successor Collateral Agent appointed pursuant to
Article VIII.



     “Collateral Documents” means, collectively, the Security Agreement, the Mortgages, the
Capital Contribution Agreement and any other documents granting a Lien upon the Collateral as
security for payment of the Secured Obligations.



     “Collection Account” has the meaning assigned to such term in the Security Agreement.



     “Commitment” means, with respect to each Lender, the sum of such Lender’s Revolving
Commitment and Term Loan Commitment.



     “Commitment Fee” has the meaning set forth in Section 2.11(a).



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



     “Compliance Certificate” means a certificate of a Financial Officer of the Borrower in
substantially the form of Exhibit D.



Annex A-Page 5









 





     “Consolidated Cash Interest Expense” means, for any period, Consolidated Interest
Expense excluding any interest expense not payable in cash (including amortization of
discount and amortization of debt issuance costs).



     “Consolidated EBITDA” means, for any period, an amount equal to (a) Consolidated Net
Income for such period plus (b) without duplication and to the extent deducted in
determining Consolidated Net Income, the sum of (i) Consolidated Interest Expense for such period,
(ii) income tax expense for such period, (iii) depreciation and amortization expense for such
period, and (iv) any other non-cash charges for such period minus (c) any non-cash items
included in determining Consolidated Net Income for such period, all as calculated for the Borrower
and its Subsidiaries on a consolidated basis in conformity with GAAP.



     “Consolidated Excess Cash Flow” means, for any Fiscal Year, the excess, if any, of (a)
Consolidated EBITDA for such Fiscal Year minus (b) the sum, without duplication, of (i)
income tax expense for such Fiscal Year plus (ii) the aggregate amount of Capital
Expenditures made in cash by the Borrower and its Subsidiaries during such Fiscal Year (excluding
up to $5,000,000 of Capital Expenditures made with the proceeds of capital contributions during the
Fiscal Year ending on June 30, 2009) plus (iii) the aggregate amount of all regularly
scheduled principal payments of the Term Loans made during such Fiscal Year plus (iv) the
aggregate amount of all optional prepayments of the Term Loans made during such Fiscal Year
plus (v) Consolidated Cash Interest Expense for such Fiscal Year.



     “Consolidated Fixed Charges” means, for any period, the sum of (a) Consolidated Cash
Interest Expense plus (b) the aggregate amount of scheduled principal payments (including
that attributable to Capital Lease Obligations) of the Borrower and its Subsidiaries for such
period with respect to all outstanding Indebtedness of the Borrower and its Subsidiaries, all as
calculated on a consolidated basis for the Borrower and its Subsidiaries for such period in
conformity with GAAP.



     “Consolidated Interest Expense” means, for any period, total interest expense
(including that attributable to Capital Lease Obligations) of the Borrower and its Subsidiaries for
such period (including all commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers’ acceptance financing and net costs under Hedging Agreements in
respect of interest rates to the extent such net costs are allocable to such period in conformity
with GAAP), all as calculated on a consolidated basis for the Borrower and its Subsidiaries for
such period in conformity with GAAP.



     “Consolidated Net Income” means, for any period, the consolidated net income (or loss)
of the Borrower and its Subsidiaries, determined on a consolidated basis in conformity with GAAP;
provided that there shall be excluded (a) the income (or deficit) of any Person accrued
prior to the date it becomes a Subsidiary of the Borrower or is merged into or consolidated with
the Borrower or any of its Subsidiaries, (b) the income (or deficit) of any Person (other than a
wholly-owned Subsidiary of the Borrower) in which the Borrower or any of its Subsidiaries has an
ownership interest, except to the extent that any such income is actually received by the Borrower
or such Subsidiary in the form of dividends or similar distributions, and (c) the undistributed
earnings of any Subsidiary of the Borrower to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary is not at the time permitted by



Annex A-Page 6









 







the terms of any contractual obligation (other than under any Loan Document) or Requirement of
Law applicable to such Subsidiary.



     “Consolidated Tangible Net Worth” means, as of any date of determination, for the
Borrower and its Subsidiaries on a consolidated basis, Shareholders’ Equity of the Borrower and its
Subsidiaries on that date minus the Intangible Assets of the Borrower and its Subsidiaries on that
date.



     “Consolidated Total Debt” means, as of any date of determination, the aggregate
outstanding principal amount of all Indebtedness of the Borrower and its Subsidiaries at such date,
determined on a consolidated basis in conformity with GAAP.



     “Credit-Enhanced Account” means an Account that is (a) backed by a letter of credit
which is in the possession of, has been assigned to and is directly drawable by the Administrative
Agent; provided that such letter of credit and the issuer thereof shall each be satisfactory to the
Administrative Agent in its sole discretion or (b) insured pursuant to a policy of credit insurance
in respect of which the Administrative Agent is an additional insured and the loss payee;
provided that such credit insurance policy and the issuer thereof shall each be
satisfactory to the Administrative Agent in its sole discretion.



     “Credit Exposure” means, as to any Lender as of any time of determination, the sum of
(a) such Lender’s Revolving Exposure at such time plus (b) the aggregate principal amount
of its Term Loans outstanding at such time.



     “Default” means any event or condition which constitutes an Event of Default or which
upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.



     “Disclosed Matters” means the actions, suits and proceedings and the environmental
matters disclosed in Schedule 4.06.



     “Document” has the meaning assigned to such term in the Security Agreement.



     “Dollars” or “$” refers to lawful money of the United States of America.



     “Effective Date” means the date on which the conditions specified in Section 3.01 are
satisfied (or waived in accordance with Section 9.02).



     “Effective Date Subsidiary Guarantors” means, collectively, AS&G, Laurel Ford and WVA.



     “Eligible Accounts” means, as of any time of determination, the Accounts of the Loan
Parties (other than the Excluded Subsidiary Guarantors) which the Administrative Agent determines,
in its Permitted Discretion, to be eligible as the basis for the making of Revolving Loans and
Swingline Loans and the issuance of Letters of Credit hereunder. Without limiting the
Administrative Agent’s discretion provided herein to determine that certain Accounts are not
Eligible Accounts, Eligible Accounts shall not include any Account:



Annex A-Page 7









 





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



     (b) which is subject to any Lien other than (i) a Lien in favor of the Collateral Agent or
(ii) a Permitted Encumbrance which does not have priority over the Lien in favor of the Collateral
Agent;



     (c) which has a scheduled due date more than 60 days after the original invoice date;



     (d) which remains unpaid more than 60 days after the original due date;



     (e) which has been written off on the books of the applicable Loan Party or otherwise
designated as uncollectible;



     (f) which is owing by an Account Debtor for which more than 25% of the Accounts owing from
such Account Debtor and its Affiliates are ineligible pursuant to clause (c), (d) or (e) above
after giving effect to the proviso at the end of this paragraph;



     (g) which is owing by an Account Debtor to the extent the aggregate amount of Accounts owing
from such Account Debtor and its Affiliates to the Loan Parties exceeds (i) in the case of Accounts
in respect of which the Account Debtor is either Dow Corning Corp. or one of its Subsidiaries or
Alcoa, Inc. or one of its Subsidiaries, 25% of the aggregate amount of all Eligible Accounts, and
(ii) in the case of all other Accounts, 15% of the aggregate amount of all Eligible Accounts;



     (h) with respect to which any covenant, representation or warranty contained in this Agreement
or in the Security Agreement has been breached or is not true;



     (i) which (i) does not arise from the sale of goods or the performance of services in the
ordinary course of business, (ii) is not evidenced by an invoice or other documentation
satisfactory to the Administrative Agent which has been sent to the Account Debtor providing that
payment must be made directly to the applicable Loan Party’s deposit account with the Collateral
Agent or another deposit account reasonably acceptable to the Collateral Agent, (iii) represents a
progress billing, (iv) is contingent upon the applicable Loan Party’s completion of any further
performance, (v) represents a sale on a bill-and-hold, guaranteed sale, sale-and-return, sale on
approval, consignment, cash-on-delivery or any other repurchase or return basis or (vi) relates to
payments of interest;



     (j) for which the goods giving rise to such Account have not been shipped to the Account
Debtor or for which the services giving rise to such Account have not been performed by the
applicable Loan Party or if such Account was invoiced more than once;



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



     (l) which is owed by an Account Debtor which has (i) applied for, suffered, or consented to
the appointment of any receiver, custodian, trustee, or liquidator of its assets, (ii) had
possession of all or a material part of its property taken by any receiver, custodian, trustee or



Annex A-Page 8









 







liquidator, (iii) filed, or had filed against it, any request or petition for liquidation,
reorganization, arrangement, adjustment of debts, adjudication as bankrupt, winding-up, or
voluntary or involuntary case under any state or federal bankruptcy laws, (iv) admitted in writing
its inability, or is generally unable to, pay its debts as they become due, (v) become insolvent,
or (vi) ceased operation of its business;



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



     (n) which is owed by an Account Debtor which (i) does not maintain its chief executive office
in the U.S. or (ii) is not organized under applicable law of the U.S. or any state thereof;
provided that this clause (n) shall not apply with respect to (x) any Account which is owed
by an Account Debtor that (1) is qualified to do business in any state of the U.S. and (2) has
substantial assets located in such state and (y) Accounts in an aggregate amount not exceeding
$1,000,000 at any time outstanding owed by an Account Debtor which (1) maintains its chief
executive office in Canada (other than the Province of Newfoundland) or (2) is organized under
applicable law of Canada or any province thereof (other than the Province of Newfoundland).



     (o) which is owed in any currency other than Dollars;



     (p) which is owed by (i) the government (or any department, agency, public corporation, or
instrumentality thereof) of any country other than the U.S. unless such Account is backed by a
Letter of Credit acceptable to the Administrative Agent which is in the possession of the
Administrative Agent or (ii) the government of the U.S., or any department, agency, public
corporation, or instrumentality thereof, unless the Federal Assignment of Claims Act of 1940, as
amended (31 U.S.C. § 3727 et seq. and 41 U.S.C. § 15 et seq.), and any other steps necessary to
perfect the Lien of the Administrative Agent in such Account, have been complied with to the
Administrative Agent’s satisfaction;



     (q) which is owed by (i) any Affiliate of any Loan Party other than Norchem (but only so long
as Norchem is not a Subsidiary of any Loan Party) or (ii) any employee, officer, director, agent or
stockholder of any Loan Party; provided that this clause (q) shall not apply with respect
to (x) an aggregate amount of $250,000 of Accounts in respect of which Marco International is the
Account Debtor and (y) an aggregate amount of $500,000 of Accounts in respect of which Solsil is
the Account Debtor;



     (r) which, for any Account Debtor, exceeds a credit limit determined by the Administrative
Agent in its Permitted Discretion, but only to the extent of such excess;



     (s) which (i) is owed by an Account Debtor or any Affiliate of such Account Debtor to which
any Loan Party is indebted, but only to the extent of such indebtedness, or (ii) is subject to any
security, deposit, progress payment, retainage or other similar advance made by or for the benefit
of an Account Debtor, in each case to the extent thereof;



     (t) which is subject to any counterclaim, deduction, defense, setoff or dispute;



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



Annex A-Page 9









 





     (v) which is owed by an Account Debtor located in any jurisdiction which requires filing of a
“Notice of Business Activities Report” or other similar report in order to permit the applicable
Loan Party to seek judicial enforcement in such jurisdiction of payment of such Account, unless
such Loan Party has filed such report or qualified to do business in such jurisdiction;



     (w) with respect to which the applicable Loan Party has made any agreement with the Account
Debtor for any reduction thereof, other than discounts and adjustments given in the ordinary course
of business, or which was partially paid and as to which the applicable Loan Party has created a
new receivable for the unpaid portion of such Account;



     (x) which does not comply in all material respects with the requirements of all applicable
laws and regulations, whether Federal, state or local, including without limitation the Federal
Consumer Credit Protection Act, the Federal Truth in Lending Act and Regulation Z of the Board;



     (y) which is for goods that have been sold under a purchase order or pursuant to the terms of
a contract or other agreement or understanding (written or oral) that indicates or purports that
any Person other than the applicable Loan Party has or has had an ownership interest in such goods,
or which indicates any party other than the applicable Loan Party as payee or remittance party;



     (z) which was created on cash-on-delivery terms; or



     (aa) which is owed by an Account Debtor that the Administrative Agent determines in its
Permitted Discretion may be unable to pay; provided that, the Administrative Agent provides
the Borrower with written notice thereof;


provided that clauses (d), (g), (k), (1), (m) and (aa) above shall not apply with respect
to any Accounts that are Credit-Enhanced Accounts; and provided, further that
clause (n) above shall not apply with respect to any Account that is backed by a letter of credit
which is in the possession of, has been assigned to and is directly drawable by the Administrative
Agent so long as such letter of credit and the issuer thereof are each satisfactory to the
Administrative Agent in its sole discretion.



In the event that an Account which was previously an Eligible Account ceases to be an Eligible
Account hereunder, the Borrower shall notify the Administrative Agent thereof on and at the time of
submission to the Administrative Agent of the next Borrowing Base Certificate. In determining the
amount of an Eligible Account, the face amount of an Account shall be reduced by, without
duplication, to the extent not reflected in such face amount, (i) the amount of all accrued and
actual discounts, claims, credits or credits pending, promotional program allowances, price
adjustments, finance charges or other allowances (including any amount that the applicable Loan
Party may be obligated to rebate to an Account Debtor pursuant to the terms of any agreement or
understanding (written or oral)) and (ii) the aggregate amount of all cash received in respect of
such Account but not yet applied by the applicable Loan Party to reduce the amount of such Account.
Standards of eligibility may be made more restrictive from time to time by the Required Revolving
Lenders in the exercise of their Permitted Discretion, with any


Annex A-Page 10









 






such changes to be effective three (3) days after delivery of notice thereof to the Borrower and
the Lenders.




     “Eligible Inventory” means, as of any time of determination, the Inventory of the Loan
Parties (other than the Excluded Subsidiary Guarantors) consisting of finished goods or raw
materials which the Administrative Agent determines in its Permitted Discretion is eligible as the
basis for the making of Revolving Loans and Swingline Loans and the issuance of Letters of Credit
hereunder. Without limiting the Administrative Agent’s discretion provided herein to determine that
certain Inventory is not Eligible Inventory, Eligible Inventory shall not include any Inventory:



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



     (b) which is subject to any Lien other than (i) a Lien in favor of the Collateral Agent or
(ii) a Permitted Encumbrance which does not have priority over the Lien in favor of the Collateral
Agent;



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



     (d) with respect to which any covenant, representation or warranty contained in this Agreement
or the Security Agreement has been breached or is not true and which does not conform to all
standards imposed by any applicable Governmental Authority;



     (e) in which any Person other than the applicable Loan Party shall (i) have any direct or
indirect ownership, interest or title or (ii) be indicated on any purchase order or invoice with
respect to such Inventory as having or purporting to have an interest therein;



     (f) which constitutes samples, prototypes, displays or display items, bill-and-hold goods,
goods that are returned or marked for return, repossessed goods, defective or damaged goods, or
goods held on consignment;



     (g) which is not (i) located in the U.S. or (ii) on board shipping vessels in transit to the
U.S. with a common carrier from vendors and suppliers;



     (h) which is located in any location leased by a Loan Party unless the lessor has delivered to
the Administrative Agent a Collateral Access Agreement;



     (i) which is located in any third party warehouse or is in the possession of a bailee and is
not evidenced by a Document, unless (i) such warehouseman or bailee has delivered to the
Administrative Agent a Collateral Access Agreement and such other documentation as the
Administrative Agent may require or (ii) the aggregate value of all such Inventory does not exceed
$1,000,000;



Annex A-Page 11









 





     (j) which is being processed offsite at a third party location or outside processor, or is
in-transit to or from said third party location or outside processor;



     (k) which is a discontinued product or component thereof;



     (l) which is the subject of a consignment by the applicable Loan Party as consignor unless
approved by the Administrative Agent in writing;



     (m) which is perishable;



     (n) which contains or bears any intellectual property rights licensed to any Loan Party unless
the Administrative Agent is satisfied that it may sell or otherwise dispose of such Inventory
without (i) infringing the rights of such licensor, (ii) violating any contract with such licensor,
or (iii) incurring any liability with respect to payment of royalties other than royalties incurred
pursuant to sale of such Inventory under the current licensing agreement;



     (o) which is not reflected in a current perpetual inventory report of the applicable Loan
Party;



     (p) which has been owned by a Loan Party for more than 180 days; or



     (q) which has been specifically reserved against by the applicable Loan Party.


In the event that Inventory which was previously Eligible Inventory ceases to be Eligible Inventory
hereunder, the Borrower shall notify the Administrative Agent thereof on and at the time of
submission to the Administrative Agent of the next Borrowing Base Certificate. Standards of
eligibility may be made more restrictive from time to time by the Administrative Agent in the
exercise of its Permitted Discretion, with any such changes to be effective three (3) days after
delivery of notice thereof to the Borrower and the Lenders.




     “Eligible L/C’s” means the undrawn amount of Letters of Credit in favor of suppliers
of the Loan Parties (other than the Excluded Subsidiary Guarantors) for products not yet delivered
in the normal course of business which are (a) issued during the Availability Period and (b)
negotiable against title and other documents which effectively transfer title and control of
merchandise to a Loan Party (other than an Excluded Subsidiary Guarantor) from such suppliers upon
receipt of payment for goods; provided that upon payment under such Letters of Credit, the
Inventory represented by such Letters of Credit will constitute Eligible Inventory.



     “Environmental Laws” means all laws, rules, regulations, codes, ordinances, orders,
decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into
by any Governmental Authority and relating in any way to the environment, preservation or
reclamation of natural resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.



     “Environmental Liability” means any liability, contingent or otherwise (including any
liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the
Borrower or any of its Subsidiaries directly or indirectly resulting from or based upon (a) a
violation of any Environmental Law, (b) the generation, use, handling, transportation, storage,



Annex A-Page 12









 







treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d)
the release or threatened release of any Hazardous Materials into the environment or (e) any
contract, agreement or other consensual arrangement pursuant to which liability is assumed or
imposed with respect to any of the foregoing.



     “Equity Interests” means shares of capital stock, partnership interests, membership
interests in a limited liability company, beneficial interests in a trust or other equity ownership
interests in a Person, and any warrants, options or other rights entitling the holder thereof to
purchase or acquire any such equity interest.



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



     “ERISA Affiliate” means any trade or business (whether or not incorporated) that,
together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code
or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.



     “ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or
the regulations issued thereunder with respect to a Plan (other than an event for which the 30 day
notice period is waived); (b) the existence with respect to any Plan of an “accumulated funding
deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived;
(c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application
for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to
the termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC
or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to
appoint a trustee to administer any Plan; (f) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the
receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is,
or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.



     “Event of Default” has the meaning assigned to such term in Article VII.



     “Excluded Subsidiary Guarantors” means AS&G and Laurel Ford.



     “Excluded Taxes” means, with respect to the Administrative Agent, the Collateral
Agent, any Lender, the Issuing Bank or any other recipient of any payment to be made by or on
account of any obligation of the Borrower hereunder, (a) income or franchise taxes imposed on (or
measured by) its net income by the United States of America, or by the jurisdiction under the laws
of which such recipient is organized or in which its principal office is located or, in the case of
any Lender, in which its applicable lending office is located, (b) any branch profits taxes imposed
by the United States of America or any similar tax imposed by any other jurisdiction in which the
Borrower is located and (e) in the case of a Foreign Lender (other than an assignee



Annex A-Page 13









 







pursuant to a request by the Borrower under Section 2.18(b)), any withholding tax that is
imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party
to this Agreement (or designates a new lending office) or is attributable to such Foreign Lender’s
failure to comply with Section 2.15(e), except to the extent that such Foreign Lender (or its
assignor, if any) was entitled, at the time of designation of a new lending office (or assignment),
to receive additional amounts from the Borrower with respect to such withholding tax pursuant to
Section 2.16(a).



     “Existing Credit Agreement” means that certain Amended and Restated Credit Agreement,
dated as of December 21, 2005, by and among the Borrower, the subsidiary guarantors party thereto,
the lenders party thereto, Fortis Capital Corp., as sole arranger, administrative agent and
collateral agent, and Société Générale, as documentation agent, as heretofore amended, supplemented
or otherwise modified.



     “Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received
by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.



     “Financial Officer” means the president, chief executive officer, chief financial
officer, principal accounting officer or vice president-finance of the Borrower.



     “Fiscal Month” means a fiscal month of the Borrower and its Subsidiaries.



     “Fiscal Quarter” means a fiscal quarter of the Borrower and its Subsidiaries.



     “Fiscal Year” means a fiscal year of the Borrower and its Subsidiaries.



     “Fixed Charge Coverage Ratio” means, as of the last day of any Fiscal Quarter, the
ratio of (i) an amount equal to (a) Consolidated EBITDA for the four Fiscal Quarter period ending
on such date minus (b) the aggregate amount of all Capital Expenditures made in cash by the
Borrower and its Subsidiaries during such period (excluding up to $5,000,000 of Capital
Expenditures made with the proceeds of capital contributions during the Fiscal Year ending on June
30, 2009) minus (c) the aggregate amount of all taxes paid by the Borrower and its
Subsidiaries during such period to (ii) Consolidated Fixed Charges for such period.



     “Foreign Lender” means any Lender that is organized under the laws of a jurisdiction
other than the United States of America, any State thereof or the District of Columbia.



     “Funding Account” means the deposit account of the Borrower specified in writing to
the Administrative Agent as the account to which the Administrative Agent is authorized to transfer
the proceeds of any Borrowings requested or authorized pursuant to this Agreement.



Annex A-Page 14









 





     “GAAP” means, subject to the limitations on the application thereof set forth in
Section 1.04, generally accepted accounting principles as set forth in opinions and pronouncements
of the Accounting Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of the accounting
profession, in each case as the same are applicable to the circumstances as of the date of
determination.



     “Governmental Authority” means the government of the United States of America, any
other nation or any political subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.



     “Guarantee”, as applied to any Person, means any direct or indirect liability,
contingent or otherwise, of that Person (i) with respect to any Indebtedness, lease, dividend or
other obligation of another (a “primary obligation”) that provides assurance to the obligee
of the primary obligation that such primary obligation will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such primary obligation
will be protected (in whole or in part) against loss in respect thereof, or (ii) with respect to
any letter of credit issued for the account of that Person or as to which that Person is otherwise
liable for reimbursement of drawings if such letter of credit is issued to support a primary
obligation. Guarantees shall include (a) the direct or indirect guaranty, endorsement (otherwise
than for collection or deposit in the ordinary course of business), co-making, discounting with
recourse or sale with recourse by such Person of a primary obligation, (b) the obligation to make
take-or-pay or similar payments if required regardless of non-performance by any other party or
parties to an agreement, and (c) any liability of such Person for a primary obligation through any
agreement (contingent or otherwise) (X) to purchase, repurchase or otherwise acquire such primary
obligation or any security therefor, or to provide funds for the payment or discharge of such
primary obligation (whether in the form of loans, advances, stock purchases, capital contributions
or otherwise) or (Y) to maintain the solvency or any balance sheet item, level of income or
financial condition of another if, in the case of any agreement described under subclause (X) or
(Y) of this sentence, the primary purpose or intent thereof is as described in the preceding
sentence. The amount of any Guarantee shall be equal to the amount of the primary obligation so
guaranteed or otherwise supported or, if less, the amount to which such Guarantee is specifically
limited.



     “Guaranteed Obligations” has the meaning assigned to such term in Section 10.01.



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



     “Hedging Agreement” means any agreement with respect to any swap, forward, future or
derivative transaction or option or similar agreement involving, or settled by reference to, one or



Annex A-Page 15









 







more rates, currencies, commodities, pricing indices or pricing risk or value or any similar
transaction or any combination of these transactions.



     “Hedging Obligations” of a Person means any and all obligations of such Person,
whether absolute or contingent and however and whenever created, arising, evidenced or acquired
(including all renewals, extensions and modifications thereof and substitutions therefor), under,
arising from or relating to (a) any and all Hedging Agreements, and (b) any and all cancellations,
buy backs, reversals, terminations or assignments of any Hedging Agreement transaction.



     “Indebtedness” of any Person means, without duplication, (a) all obligations of such
Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations
of such Person evidenced by bonds, debentures, notes or similar instruments, (e) all obligations of
such Person upon which interest charges are customarily paid, (d) all obligations of such Person
under conditional sale or other title retention agreements relating to property acquired by such
Person, (e) all obligations of such Person in respect of the deferred purchase price of property or
services (excluding current accounts payable incurred in the ordinary course of business), (f) all
obligations of others referred to in clauses (a)-(e) and (h)-(k) of this definition secured by (or
for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed, (g) all Guarantees by such Person of obligations of others
referred to in clauses (a)-(e) and (h)-(k) of this definition, (h) all Capital Lease Obligations of
such Person, (i) all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty, (j) all obligations, contingent or otherwise,
of such Person in respect of bankers’ acceptances, and (k) any Off-Balance Sheet Liability. The
Indebtedness of any Person shall include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent such Person is liable therefor
as a result of such Person’s ownership interest in or other relationship with such entity, except
to the extent the terms of such Indebtedness provide that such Person is not liable therefor.



     “Indemnified Taxes” means Taxes other than Excluded Taxes.



     “Intangible Assets” means assets that are considered to be intangible assets under
GAAP, including customer lists, goodwill, computer software, copyrights, trade names, trademarks,
patents, franchises, licenses, unamortized deferred charges, unamortized debt discount and
capitalized research and development costs.



     “Interest Election Request” means a request by the Borrower to convert or continue a
Revolving Borrowing in accordance with Section 2.07.



     “Interest Payment Date” means (a) with respect to any ABR Loan, the last day of each
March, June, September and December, (b) with respect to any LIBOR Loan, the last day of the
Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a
LIBOR Borrowing with an Interest Period of more than three months’ duration, each day prior to the
last day of such Interest Period that occurs at intervals of three months’ duration after the first
day of such Interest Period, and (c) in addition to the foregoing, with respect to any Loan, the
Maturity Date.



Annex A-Page 16









 





     “Interest Period” means, with respect to any LIBOR Borrowing, the period commencing on
the date of such Borrowing and ending on the numerically corresponding day in the calendar month
that is one, two, three or six months thereafter, as the Borrower may elect; provided, that
(i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall
be extended to the next succeeding Business Day unless, in the case of a LIBOR Borrowing only, such
next succeeding Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day and (ii) any Interest Period pertaining to a
LIBOR Borrowing that commences on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the last calendar month of such Interest Period) shall
end on the last Business Day of the last calendar month of such Interest Period. For purposes
hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and
thereafter shall be the effective date of the most recent conversion or continuation of such
Borrowing.



     “Inventory” has the meaning assigned to such term in the Security Agreement.



     “Issuing Bank” means SG, in its capacity as the issuer of Letters of Credit hereunder,
and its successors in such capacity as provided in Section 2.05(i). The Issuing Bank may, in its
discretion, arrange for one or more Letters of Credit to be issued by Affiliates of the Issuing
Bank, in which case the term “Issuing Bank” shall include any such Affiliate with respect
to Letters of Credit issued by such Affiliate.



     “Joinder Agreement” has the meaning assigned to such term in Section 5.13.



     “Junior Credit Agreement” means that certain Credit Agreement, dated as of November
10, 2005, by and among the Borrower, the lenders from time to time party thereto and D.E. Shaw
Laminar Lending, Inc., as administrative agent for such lenders, as heretofore amended, restated,
supplemented or otherwise modified.



     “Laurel Ford” means Laurel Ford Resources, Inc., a Kentucky corporation.



     “LC Collateral Account” has the meaning assigned to such term in Section 2.05(j).



     “LC Disbursement” means a payment made by the Issuing Bank pursuant to a Letter of
Credit.



     “LC Exposure” means, as of any time of determination, the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time plus (b) the aggregate
amount of all LC Disbursements that have not yet been reimbursed by or on behalf of the Borrower at
such time. The LC Exposure of any Revolving Lender at any time shall be its Applicable Percentage
of the total LC Exposure at such time.



     “Lenders” means the Persons listed on Schedule 2.01 and any other Person that
shall have become a party hereto pursuant to an Assignment Agreement, other than any such Person
that ceases to be a party hereto pursuant to an Assignment Agreement. Unless the context otherwise
requires, the term “Lenders” includes the Swingline Lender.



     “Letter of Credit” means any letter of credit issued pursuant to this Agreement.



Annex A-Page 17









 





     “LIBO Rate” means, with respect to any LIBOR Borrowing for any Interest Period, the
rate appearing on Reuters Screen LIBOR01 Page (or any successor to or substitute for such Page
which provides rate quotations comparable to those currently provided on such Page, as determined
by the Administrative Agent), at approximately 11:00 a.m. (London time) two Business Days prior to
the commencement of such Interest Period, as the rate for deposits in Dollars with a maturity
comparable to such Interest Period. In the event that such rate is not available at such time for
any reason, then the “LIBO Rate” with respect to such LIBOR Borrowing for such Interest
Period shall be the rate at which SG or one of its Affiliate banks offers to place deposits in
Dollars with first class banks in the London interbank market at approximately 11:00 A.M. (London
time) two Business Days prior to the commencement of such Interest Period, as the rate for deposits
in Dollars with a maturity comparable to such Interest Period.



     “LIBOR” when used in reference to any Loan or Borrowing, refers to the fact that such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by
reference to the LIBO Rate.



     “Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the
interest of a vendor or a lessor under any conditional sale agreement, capital lease or title
retention agreement (or any financing lease having substantially the same economic effect as any of
the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call
or similar fight of a third party with respect to such securities.



     “Loan Documents” means this Agreement (including the Subsidiary Guaranty), any
promissory notes issued pursuant to this Agreement, any Letter of Credit applications, the
Collateral Documents and all other agreements, instruments, documents and certificates that are
executed and delivered to, or in favor of, the Administrative Agent or any Lender in connection
with this Agreement. Any reference in this Agreement or any other Loan Document to a Loan Document
shall include all appendices, exhibits or schedules thereto and all amendments, restatements,
supplements or other modifications thereto, and shall refer to this Agreement or such Loan Document
as the same may be in effect at any and all times such reference becomes operative.



     “Loan Parties” means the Borrower, the Effective Date Subsidiary Guarantors and any
other Person who becomes a party to this Agreement pursuant to a Joinder Agreement, together with
their respective successors and permitted assigns.



     “Loans” means the loans and advances made by the Lenders pursuant to this Agreement,
including the Revolving Loans, the Term Loans and the Swingline Loans.



     “Marco International” means Marco International Corp., a New York corporation.



     “Master Assignment” means the Master Assignment and Assumption Agreement dated as of
September 18, 2008 among the Administrative Agent, the Collateral Agent, the Lenders, Fortis
Capital Corp., as administrative agent and collateral agent under the Existing Credit



Annex A-Page 18









 







Agreement, the lenders party to the Existing Credit Agreement, the Borrower, and the Effective
Date Subsidiary Guarantors.



     “Material Adverse Effect” means a material adverse effect on (a) the business, assets,
operations, prospects or condition, financial or otherwise, of the Borrower and its Subsidiaries,
taken as a whole, (b) the ability of any Loan Party to perform any of its obligations under the
Loan Documents to which it is a party, (c) the Collateral, or the Collateral Agent’s Liens (on
behalf of the Secured Parties) on the Collateral or the priority of such Liens, or (d) the rights
of or benefits available to the Secured Parties under the Loan Documents.



     “Material Indebtedness” means Indebtedness (other than the Loans and Letters of
Credit) or obligations in respect of one or more Hedging Agreements of any one or more of the
Borrower and its Subsidiaries in an aggregate principal amount exceeding $1,000,000. For purposes
of determining Material Indebtedness, the “obligations” of the Borrower or any of its Subsidiaries
in respect of any Hedging Agreement at any time shall be the maximum aggregate amount (giving
effect to any netting agreements) that the Borrower or such Subsidiary would be required to pay if
such Hedging Agreement were terminated at such time.



     “Maturity Date” means September 18, 2013, or any earlier date on which the Commitments
are reduced to zero or otherwise terminated pursuant to the terms hereof or the repayment of the
Loans is accelerated.



     “Maximum Liability” has the meaning assigned to such term in Section 10.10.



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



     “Mortgage” means any mortgage, deed of trust or other agreement which conveys or
evidences a Lien in favor of the Collateral Agent, for the benefit of the Secured Parties, on real
property of a Loan Party, including any amendment, modification or supplement thereto.



     “Mortgaged Properties” means, collectively, each of the parcels of real property from
time to time subject to a Mortgage, including, without limitation, the parcels of real property
listed under the heading “Mortgaged Properties” on Schedule 4.05.



     “Multiemployer Plan” means a multiemployer plan as defined in Section 4001 (a)(3) of
ERISA.



     “Net Proceeds” means, with respect to any event, (a) the cash proceeds received in
respect of such event including (i) any cash received in respect of any non-cash proceeds
(including any cash payments received by way of deferred payment of principal pursuant to a note or
installment receivable or purchase price adjustment receivable or otherwise, but excluding any
interest payments), but only as and when received, (ii) in the case of a casualty other insured
damage to any property or asset of the Borrower or any of its Subsidiaries or a covered event under
any “key man” life insurance policy, insurance proceeds, and (iii) in the case of a condemnation or
similar event, condemnation awards and similar payments, net of (b) the sum of (i) all reasonable
fees and out-of-pocket expenses paid to third parties (other than Affiliates) in connection with
such event, (ii) in the case of a sale, transfer or other disposition of an asset (including
pursuant to a sale and leaseback transaction or a casualty or a condemnation



Annex A-Page 19









 







or similar proceeding), the amount of all payments required to be made as a result of such
event to repay Indebtedness (other than Loans) secured by such asset, and (iii) the amount of all
taxes paid (or reasonably estimated to be payable) and the amount of any reserves established to
fund contingent liabilities reasonably estimated to be payable, in each case during the year that
such event occurred or the next succeeding year and that are directly attributable to such event
(as determined reasonably and in good faith by a Financial Officer).



     “Non-Consenting Lender” has the meaning assigned to such term in Section 9.02(d).



     “Non-Paying Guarantor” has the meaning assigned to such term in Section 10.11.



     “Norchem” means Norchem, Inc., a Florida corporation.



     “Obligated Party” has the meaning assigned to such term in Section 10.02.



     “Obligations” means all unpaid principal of and accrued and unpaid interest on the
Loans, all LC Exposure, all accrued and unpaid fees and all expenses, reimbursements, indemnities
and other obligations of the Loan Parties to any Secured Party or any indemnified party arising
under the Loan Documents.



     “Off-Balance Sheet Liability” of a Person means (a) any repurchase obligation or
liability of such Person with respect to accounts or notes receivable sold by such Person, (b) any
indebtedness, liability or obligation under any so-called “synthetic lease” transaction entered
into by such Person, or (c) any indebtedness, liability or obligation arising with respect to any
other transaction which is the functional equivalent of or takes the place of a borrowing but which
does not constitute a liability on the balance sheet of such Person (other than operating leases).



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



     “Parent” means Globe Specialty Metals, Inc., a Delaware corporation (f/k/a
International Metal Enterprises, Inc.).



     “Participant” has the meaning set forth in Section 9.04.



     “Paying Guarantor” has the meaning assigned to such term in Section 10.11.



     “PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA
and any successor entity performing similar functions.



     “Permitted Discretion” means a determination made in good faith and in the exercise of
reasonable (from the perspective of a secured asset-based lender) business judgment.



     “Permitted Encumbrances” means:



Annex A-Page 20









 





     (a) Liens imposed by law for taxes that are not yet due or are being contested in compliance
with Section 5.04;



     (b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens
imposed by law, arising in the ordinary course of business and securing obligations that are not
overdue by more than 30 days or are being contested in compliance with Section 5.04;



     (c) pledges and deposits made in the ordinary course of business in compliance with workers’
compensation, unemployment insurance and other social security laws or regulations;



     (d) deposits to secure the performance of bids, trade contracts, leases, statutory
obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in
each case in the ordinary course of business;



     (e) judgment liens in respect of judgments that do not constitute an Event of Default under
clause (k) of Article VII; and



     (f) easements, zoning restrictions, rights-of-way and similar encumbrances on real property
imposed by law or arising in the ordinary course of business that do not secure any monetary
obligations and do not materially detract from the value of the affected property or interfere with
the ordinary conduct of business of the Borrower or any of its Subsidiaries;



provided that the term “Permitted Encumbrances” shall not include any Lien arising under
ERISA or any Lien securing Indebtedness.



     “Permitted Holder” means MI Capital, Inc.



     “Permitted Investments” means:



     (a) direct obligations of, or obligations the principal of and interest on which are
unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent
such obligations are backed by the full faith and credit of the United States of America), in each
case maturing within one year from the date of acquisition thereof;



     (b) investments in commercial paper maturing within 270 days from the date of acquisition
thereof and having, at such date of acquisition, the highest credit rating obtainable from S&P or
from Moody’s;



     (c) investments in certificates of deposit, banker’s acceptances and time deposits maturing
within 180 days from the date of acquisition thereof issued or guaranteed by or placed with, and
money market deposit accounts issued or offered by, any domestic office of any commercial bank
organized under the laws of the United States of America or any State thereof which has a combined
capital and surplus and undivided profits of not less than $500,000,000;



     (d) fully collateralized repurchase agreements with a term of not more than 30 days for
securities described in clause (a) above and entered into with a financial institution satisfying
the criteria described in clause (c) above; and



Annex A-Page 21









 





     (e) money market funds that (i) comply with the criteria set forth in Securities and Exchange
Commission Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated AAA by S&P and Aaa by
Moody’s and (iii) have portfolio assets of at least $5,000,000,000.



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



     “Plan” means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA,
and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated,
would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of
ERISA.



     “Prepayment Event” means:



     (a) any sale, transfer or other disposition (including pursuant to a sale and leaseback
transaction) of any property or asset of the Borrower or any of its Subsidiaries resulting in Net
Proceeds of more than $500,000, other than dispositions described in Section 6.05(a); or



     (b) any casualty or other insured damage to, or any taking under power of eminent domain or by
condemnation or similar proceeding of, any property or asset of the Borrower or any of its
Subsidiaries with a fair market value prior to such event of not less than $500,000; or



     (c) the occurrence of a covered event under a policy of “key-man” life insurance maintained by
the Borrower or any of its Subsidiaries; or



     (d) the issuance by the Borrower of any Equity Interests, or the receipt by the Borrower of
any capital contribution, in each case on or after the Effective Date, other than (i) the equity
contribution required to be made pursuant to Section 3.01(p), (ii) the capital contributions
required to be made pursuant to Section 11.02 or (iii) the issuance of Equity Interests to or the
receipt of capital contributions from Persons owning Equity Interests of the Borrower on the
Closing Date; or



     (e) the incurrence by the Borrower or any of its Subsidiaries of any Indebtedness on or after
the Effective Date, other than Indebtedness permitted under Section 6.01 or Section 11.02.



     “Prime Rate” means the rate of interest per annum publicly announced from time to time
by SG as its “prime rate” in effect at its principal office in New York City, New York, with each
change in the Prime Rate to be effective from and including the date such change is publicly
announced as being effective.



     “Projections” has the meaning assigned to such term in Section 5.01(f).



     “Register” has the meaning set forth in Section 9.04.



Annex A-Page 22









 





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



     “Replaced Lender” has the meaning set forth in Section 2.18(b).



     “Report” means a report prepared by the Administrative Agent or the Collateral Agent
or another Person showing the results of an appraisal, field examination or audit of the assets of
the Borrower and its Subsidiaries, each of which Reports may be distributed to the Lenders by the
Administrative Agent or the Collateral Agent, as applicable.



     “Required Lenders” means, as of any time of determination, Lenders having Credit
Exposure and unused Commitments representing more than 50% of the sum of the total Credit Exposure
and unused Commitments at such time.



     “Required Revolving Lenders” means, as of any time of determination, Lenders having
Revolving Exposure and unused Revolving Commitments representing more than 50% of the sum of the
total Revolving Exposure and unused Revolving Commitments at such time.



     “Requirement of Law” means, as to any Person, the Certificate of Incorporation and
By-Laws or other organizational or governing documents of such Person, and any law, treaty, rule or
regulation or determination of an arbitrator or a court or other Governmental Authority, in each
case applicable to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.



     “Reserved Obligations” has the meaning set forth in the Master Assignment.



     “Reserves” means any and all reserves which the Administrative Agent deems necessary,
in its Permitted Discretion, to maintain (including, without limitation, an availability reserve,
reserves for accrued and unpaid interest on the Secured Obligations, reserves for rent at locations
leased by any Loan Party and for consignee’s, warehousemen’s and bailee’s charges, reserves for
dilution of Accounts, reserves for Inventory shrinkage, reserves for customs charges and shipping
charges related to any Inventory in transit, reserves for Hedging Obligations, reserves for
contingent liabilities of any Loan Party, reserves for uninsured losses of any Loan Party, reserves
for uninsured, underinsured, un-indemnified or under-indemnified liabilities or potential
liabilities with respect to any litigation, and reserves for taxes, fees, assessments, and other
governmental charges) from time to time with respect to the Collateral or any Loan Party.



     “Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests in the Borrower or any of its
Subsidiaries, or any payment (whether in cash, securities or other property), including any sinking
fund or similar deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such Equity Interests in the Borrower or any of its Subsidiaries
or any option, warrant or other fight to acquire any such Equity Interests in the Borrower or any
of its Subsidiaries.



     “Revolving Commitment” means, with respect to each Lender, the commitment, if any, of
such Lender to acquire by assignment pursuant to the Master Assignment or make Revolving



Annex A-Page 23









 







Loans and to acquire participations in Letters of Credit and Swingline Loans hereunder,
expressed as an amount representing the maximum possible aggregate amount of such Lender’s
Revolving Exposure hereunder, as such commitment may be (a) reduced from time to time pursuant to
Section 2.08 and (b) reduced or increased from time to time pursuant to assignments by or to such
Lender pursuant to Section 9.04. The initial amount of each Lender’s Revolving Commitment is set
forth on Schedule 2.01 or in the Assignment Agreement pursuant to which such Lender shall have
assumed its Revolving Commitment, as applicable. The initial aggregate amount of the Lenders’
Revolving Commitments is $35,000,000.



     “Revolving Exposure” means, with respect to any Lender as of any time of
determination, the sum of (a) the aggregate outstanding principal amount of such Lender’s Revolving
Loans at such time plus (b) such Lender’s LC Exposure at such time plus (c) an
amount equal to such Lender’s Applicable Percentage of the aggregate outstanding principal amount
of Swingline Loans at such time.



     “Revolving Lender” means, as of any date of determination, a Lender with a Revolving
Commitment or, if the Revolving Commitments have terminated or expired, a Lender with Revolving
Exposure.



     “Revolving Loans” means the Loans made or acquired by assignment under the Master
Assignment pursuant to clause (a) of Section 2.01.



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



     “Secured Obligations” means collectively, all Obligations, all Reserved Obligations
incurred on or prior to the first anniversary of the Effective Date, and all Hedging Obligations
owing to one or more Lenders or their respective Affiliates relating to Hedging Agreements required
to be maintained pursuant to Section 5.14; provided that, with respect to such Hedging
Obligations owing to Lenders or their respective Affiliates other than SG and its Affiliates, prior
to or within 10 Business Days after the time that any transaction relating to such Hedging
Obligation is executed, the Lender or Affiliate of a Lender party thereto shall have delivered
written notice to the Administrative Agent that such a transaction has been or will be entered into
and that it constitutes a Secured Obligation entitled to the benefits of the Collateral Documents.



     “Secured Parties” means the Collateral Agent, the Administrative Agent, the Issuing
Bank, the Swingline Lender, the Lenders, Affiliates of Lenders who hold Secured Obligations, and
each other Person who holds Reserved Obligations that constitute Secured Obligations.



     “Security Agreement” means that certain Amended and Restated Pledge and Security
Agreement, dated as of the Effective Date, by and among the Loan Parties and the Collateral Agent,
for the benefit of the Secured Parties, and any other pledge or security agreement entered into
after the date of this Agreement by any other Loan Party (as required by this Agreement or any
other Loan Document).



     “SG” means Société Générale.



Annex A-Page 24









 





     “Shareholders’ Equity” means, as of any date of determination, consolidated
shareholders’ equity of the Borrower and its Subsidiaries as of that date determined in accordance
with GAAP.



     “Subordinated Indebtedness” means any Indebtedness of the Borrower that (a) no
payments in respect of which (whether for principal, interest or otherwise) are required to be paid
in cash (whether by way of mandatory sinking fund, mandatory redemption, mandatory prepayment or
otherwise) prior to six months after the Maturity Date; (b) the payment of the principal of and
interest on which and other obligations of the Borrower in respect thereof are subordinated to the
prior payment in full of the Secured Obligations on terms and conditions satisfactory in form and
substance to the Administrative Agent in its Permitted Discretion; and (c) all other terms,
covenants and conditions of which do not subject the Borrower or any of its Subsidiaries to any
more onerous or more restrictive provisions than those contained in this Agreement.



     “Subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity the accounts of
which would be consolidated with those of the parent in the parent’s consolidated financial
statements if such financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50% of the equity or
more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the
general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as
of such date, otherwise Controlled, by the parent or one or more Subsidiaries of the parent or by
the parent and one or more Subsidiaries of the parent.



     “Subsidiary Guarantor” means each Loan Party other than the Borrower.



     “Subsidiary Guaranty” means Article X of this Agreement.



     “Super-Majority Revolving Lenders” means, as of any time of determination, Revolving
Lenders having Revolving Exposure and unused Revolving Commitments representing more than 66 2/3%
of the sum of the total Revolving Exposure and unused Revolving Commitments at such time.



     “Swingline Lender” means SG, in its capacity as the lender of Swingline Loans
hereunder.



     “Swingline Loan” means, collectively, the Loans made pursuant to Section 2.04.



     “Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.



     “Term Lenders” means, as of any date of determination, Lenders having Term Loan
Commitments or outstanding Term Loans.



     “Term Loan Commitment” means, with respect to any Lender, the commitment, if any, of
such Lender to make or acquire by assignment pursuant to the Master Assignment a Term Loan
hereunder. The initial amount of each Lender’s Term Loan Commitment is set forth on Schedule



Annex A-Page 25









 





2.01 or in the Assignment Agreement pursuant to which such Lender shall have assumed its Term
Loan Commitment, as applicable. The initial aggregate amount of the Lenders’ Term Loan Commitments
is $40,000,000.



     “Term Loans” means the Loans made or acquired by assignment under the Master
Assignment pursuant to clause (b) of Section 2.01.



     “Total Leverage Ratio” means, as of the last day of any Fiscal Quarter, the ratio of
(i) Consolidated Total Debt as of such date to (ii) Consolidated EBITDA for the four Fiscal Quarter
period ending on such date.



     “Transactions” means the execution, delivery and performance by the Loan Parties and
the Parent of this Agreement and the other Loan Documents, the borrowing of Loans and other
extensions of credit hereunder, the use of the proceeds thereof and the issuance of Letters of
Credit hereunder.



     “Type” when used in reference to any Loan or Borrowing, refers to whether the rate of
interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the
LIBO Rate or the Alternate Base Rate.



     “UCC” means the Uniform Commercial Code as in effect from time to time in the State of
New York or any other state the laws of which are required to be applied in connection with the
perfection of security interests in any Collateral.



     “Unliquidated Obligations” means, as of any time of determination, any Secured
Obligations (or portion thereof) that are contingent in nature or unliquidated at such time,
including any Secured Obligation that is (a) an obligation to reimburse a bank for drawings not yet
made under a letter of credit issued by it, (b) any other obligation (including any Guarantee) that
is contingent in nature at such time, or (c) an obligation to provide collateral to secure any of
the foregoing types of obligations.



     “Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of
Subtitle E of Title IV of ERISA.



     “WVA” means West Virginia Alloys, Inc., a Delaware corporation.




Annex A-Page 26