EX-10.1






Exhibit 10.1




EXECUTION VERSION



	 
	

CREDIT AGREEMENT

dated as of

February 26, 2010

among

METALICO, INC.

AND THE OTHER LOAN PARTIES NAMED HEREIN

The Lenders Party Hereto

and

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

     

J.P. MORGAN SECURITIES INC.,

as Sole Bookrunner and Sole Lead Arranger

     

RBS Business Capital,

a division of RBS Asset Finance, Inc.,

a subsidiary of RBS Citizens, N.A.,

as Documentation Agent







CHASE BUSINESS CREDIT




TABLE OF CONTENTS



Page




ARTICLE I




Definitions




ARTICLE II




The Credit




ARTICLE III




Representations and Warranties




ARTICLE IV




Conditions




ARTICLE V




Affirmative Covenants




ARTICLE VI




Negative Covenants




ARTICLE VII




Events of Default80




ARTICLE VIII




ARTICLE IX




ARTICLE X




Loan Guaranty




SCHEDULES:



Commitment Schedule


Schedule 3.05 — Properties


Schedule 3.06 — Disclosed Matters


Schedule 3.12 – Material Agreements


Schedule 3.14 — Insurance


Schedule 3.15 – Capitalization and Subsidiaries


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 and Assumption




	 	 	Exhibit B — Form of Opinion of Borrower’s Counsel





Exhibit C — Form of Borrowing Base Certificate




	 	 	Exhibit D — Form of Compliance Certificate






	 	 	Exhibit E — Joinder Agreement






	 	 	Exhibit 2.10(f)-R — Form of Revolving Note






	 	 	Exhibit 2.10(f)-T — Form of Term Note





CREDIT AGREEMENT dated as of February 26, 2010 (as it may be amended or modified from time
to time, this “Agreement”), among METALICO, INC., a Delaware corporation, AMERICAN CATCON,
INC., a Texas corporation, FEDERAL AUTOCAT RECYCLING, L.L.C., a New Jersey limited liability
company, HYPERCAT COATING LIMITED LIABILITY COMPANY, a New Jersey limited liability company, MAYCO
INDUSTRIES, INC., an Alabama corporation, METALICO AKRON, INC., an Ohio corporation, METALICO
ALUMINUM RECOVERY, INC., a New York corporation, METALICO BUFFALO, INC., a New York corporation,
METALICO NIAGARA, INC., a New York corporation, METALICO NILES, INC., an Ohio corporation, METALICO
PITTSBURGH, INC., a Pennsylvania corporation, METALICO ROCHESTER, INC., a New York corporation,
METALICO SYRACUSE, INC., a New York corporation, METALICO TRANSFER, INC., a New York corporation,
METALICO TRANSPORT, INC., a New York corporation, METALICO YOUNGSTOWN, INC., a Delaware
corporation, SANTA ROSA LEAD PRODUCTS, INC., a California corporation, TOTALCAT GROUP, INC., a
Delaware corporation, TRANZACT CORPORATION, a Delaware corporation, and WEST COAST SHOT, INC., a
Nevada corporation (individually, “Borrower” and collectively, “Borrowers”) as
Borrowers, the other Loan Parties party hereto, the Lenders party hereto, JPMORGAN CHASE BANK,
N.A., as Administrative Agent, and RBS BUSINESS CAPITAL, a division of RBS ASSET FINANCE, INC., a
subsidiary of RBS CITIZENS, N.A., as Documentation Agent.



The parties hereto agree as follows:



ARTICLE I




Definitions




SECTION 1.01. Defined Terms. As used in this Agreement, the following terms
have the meanings specified below:



“ABR”, when used in reference to any Loan or Borrowing, refers to whether 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.



“Acquisition” means the acquisition of (i) the assets of a Person, whether all or
substantially all of the assets, or of a division or operating unit of any Person or (ii) any
Equity Interest in another Person sufficient to give the acquiring Person control of such Person,
in each case whether by purchase, exchange, issuance of stock or other securities, or by merger,
reorganization or any other method.



“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to
(a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.



“Administrative Agent” means JPMorgan Chase Bank, N.A., in its capacity as
administrative agent for the Lenders hereunder.



“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.



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



“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest of
(a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such
day plus 1/2 of 1% and (c) the Adjusted LIBO Rate for a one month Interest Period on such day (or if
such day is not a Business Day, the immediately preceding Business Day) plus 1%, provided that, for
the avoidance of doubt, the Adjusted LIBO Rate for any day shall be based on the rate appearing on
the Reuters Screen LIBOR01 Page (or on any successor or substitute page) at approximately 11:00
a.m. London time on such day (without any rounding). Any change in the Alternate Base Rate due to
a change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate shall be
effective from and including the effective date of such change in the Prime Rate, the Federal Funds
Effective Rate or the Adjusted LIBO Rate, respectively.



“Applicable Percentage” means, with respect to any Lender, (a) with respect to
Revolving Loans, LC Exposure, 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
Commitment of all Revolving Lenders (if the Revolving Commitments have terminated or expired, the
Applicable Percentages shall be determined based upon such Lender’s share of the aggregate
Revolving Exposures at that time); provided that in the case of Section 2.20 when a Defaulting
Lender shall exist, any such Defaulting Lender’s Revolving Commitment shall be disregarded in the
calculation, (b) with respect to the Term Loans, a percentage equal to a fraction the numerator of
which is such Lender’s outstanding principal amount of the Term Loans and the denominator of which
is the aggregate outstanding amount of the Term Loans of all Term Lenders and (c) with respect to
Protective Advances or with respect to the Aggregate Credit Exposure, a percentage based upon its
share of the Aggregate Credit Exposure and the unused Commitments; provided that in the case of
Section 2.20 when a Defaulting Lender shall exist, any such Defaulting Lender’s Commitment shall be
disregarded in the calculation.



“Applicable Rate” means, for any day, with respect to any ABR Loan or Eurodollar
Revolving Loan, or with respect to the commitment fees payable hereunder, as the case may be, the
applicable rate per annum set forth below under the caption “ABR Spread”, “Eurodollar Spread” or
“Commitment Fee Rate”, as the case may be:



	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	ABR Spread	 	Eurodollar Spread	 	Commitment Fee Rate
	Revolving Loan

	 	 	1.25	%	 	 	3.50	%	 	 	.375	%
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	Term Loan

	 	 	2.00	%	 	 	4.25	%	 	


	 

	 	 	 	 	 	 	 	 	 	








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



“Assignment and Assumption” means an assignment and assumption 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, at any time, an amount equal to (a) the lesser of (i) the
Revolving Commitment and (ii) the Borrowing Base minus (b) the Revolving Exposure of all
Revolving Lenders.



“Availability Block” means an amount equal to $6,000,000.



“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.



“Available Revolving Commitment” means, at any time, the Revolving Commitment then in
effect minus the Revolving Exposure of all Revolving Lenders at such time.



“Banking Services” means each and any of the following bank services provided to any
Loan Party by any Lender or any of its Affiliates: (a) credit cards for commercial customers
(including, without limitation, “commercial credit cards” and purchasing cards), (b) stored value
cards and (c) treasury management services (including, without limitation, controlled disbursement,
automated clearinghouse transactions, return items, overdrafts and interstate depository network
services).



“Banking Services Obligations” of the Loan Parties means any and all obligations of
the Loan Parties, whether absolute or contingent and howsoever and whensoever created, arising,
evidenced or acquired (including all renewals, extensions and modifications thereof and
substitutions therefor) in connection with Banking Services.



“Banking Services Reserves” means all Reserves which the Administrative Agent from
time to time establishes in its Permitted Discretion for Banking Services then provided or
outstanding.



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



“Borrower” or “Borrowers” has the meaning assigned to such term in the
Preamble.



“Borrower Representative” means the Company, in its capacity as contractual
representative of the Borrowers pursuant to Article XI.



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



“Borrowing Base” means, at any time, the sum of (a) up to 85% of the Borrowers’
Eligible Accounts at such time, plus (b) the lesser of (i) up to 60% of the Borrowers’
Eligible Inventory, valued at the lower of cost or market value, determined on a first-in-first-out
basis, at such time and (ii) the product of 85% multiplied by the Net Orderly Liquidation Value
percentage identified in the most recent inventory appraisal ordered by the Administrative Agent
multiplied by the Borrowers’ Eligible Inventory, valued at the lower of cost or market value,
determined on a first-in-first-out basis, at such time, minus (c) Reserves related to the
Borrowers, minus (d) the Availability Block. The maximum amount of Inventory which may be
included as part of the Borrowing Base is $25,000,000. The Administrative Agent may, in its
Permitted Discretion, reduce the advance rates set forth above, adjust Reserves or reduce one or
more of the other elements used in computing the Borrowing Base.



“Borrowing Base Certificate” means a certificate, signed and certified as accurate and
complete by a Financial Officer of the Borrower Representative, in substantially the form of
Exhibit C or another form which is acceptable to the Administrative Agent in its sole
discretion.



“Borrowing Request” means a request by the Borrower Representative for a Revolving
Borrowing in accordance with Section 2.02.



“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 Eurodollar 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 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 Company and its Subsidiaries prepared
in accordance 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 accordance with GAAP.



“Change in Control” means (a) the acquisition of ownership, directly or indirectly,
beneficially or of record, by any Person or group (within the meaning of the Securities Exchange
Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect on the
date hereof), of Equity Interests representing more than 25% of the aggregate ordinary voting power
represented by the issued and outstanding Equity Interests of the Company; (b) occupation of a
majority of the seats (other than vacant seats) on the board of directors of the Company by Persons
who were neither (i) nominated by the board of directors of the Company nor (ii) appointed by
directors so nominated; or (c) the acquisition of direct or indirect Control of the Company by any
Person or group; or (d) the Company shall cease to own, free and clear of all Liens or other
encumbrances, at least 100% of the outstanding voting Equity Interests of the other Borrowers on a
fully diluted basis.



“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 2.15(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.



“Chase” means JPMorgan Chase Bank, N.A., a national banking association, in its
individual capacity, and its successors.



“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, Swingline Loans or
Protective Advances.



“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 a Person 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 Administrative Agent, on behalf of itself and the Lenders, to secure the Secured
Obligations.



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



“Collateral Documents” means, collectively, the Security 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.



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



“Commitment” means, with respect to each Lender, the sum of such Lender’s Revolving
Commitment and Term Loan Commitment, together with the commitment of such Lender to acquire
participations in Protective Advances hereunder. The initial amount of each Lender’s Commitment is
set forth on the Commitment Schedule, or in the Assignment and Assumption pursuant to which
such Lender shall have assumed its Commitment, as applicable.



“Commitment Schedule” means the Schedule attached hereto identified as such.



“Company” means Metalico, Inc., a Delaware corporation.



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



“Controlled Disbursement Account” means, collectively, the following accounts: account
#837875921; account #837876291; account #837876960, account #837877745, account #837878305, account
#837886704, account #837887009, account #837889526, account #837902923, account #837875939, account
#837876556, account #837877372, account #837878032, account #837878859, account #837893528, account
#837887207, account #837887199 and any replacement or additional accounts of the Borrowers
maintained with the Administrative Agent as a zero balance, cash management account pursuant to and
under any agreement between a Borrower and the Administrative Agent, as modified and amended from
time to time, and through which all disbursements of a Borrower, any Loan Party and any designated
Subsidiary of a Borrower are made and settled on a daily basis with no uninvested balance remaining
overnight.



“Credit Exposure” means, as to any Lender at any time, the sum of (a) such Lender’s
Revolving Exposure at such time, plus (b) an amount equal to the aggregate principal amount
of its Term Loans outstanding at such time, plus (c) an amount equal to its Applicable
Percentage, if any, of the aggregate principal amount of Protective Advances 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.



“Defaulting Lender” means any Lender, as determined by the Administrative Agent, that
has (a) failed to fund any portion of its Loans or participations in Letters of Credit or Swingline
Loans within three Business Days of the date required to be funded by it hereunder, (b) notified
any Borrower, the Administrative Agent, the Issuing Bank, the Swingline Lender or any Lender in
writing that it does not intend to comply with any of its funding obligations under this Agreement
or has made a public statement to the effect that it does not intend to comply with its funding
obligations under this Agreement or under other agreements in which it commits to extend credit,
(c) failed, within three Business Days after request by the Administrative Agent, to confirm that
it will comply with the terms of this Agreement relating to its obligations to fund prospective
Loans and participations in then outstanding Letters of Credit and Swingline Loans, (d) otherwise
failed to pay over to the Administrative Agent or any other Lender any other amount required to be
paid by it hereunder within three Business Days of the date when due, unless the subject of a good
faith dispute, or (e) (i) become or is insolvent or has a parent company that has become or is
insolvent or (ii) become the subject of a bankruptcy or insolvency proceeding, or has had a
receiver, conservator, trustee or custodian appointed for it, or has taken any action in
furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or
appointment or has a parent company that has become the subject of a bankruptcy or insolvency
proceeding, or has had a receiver, conservator, trustee or custodian appointed for it, or has taken
any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such
proceeding or appointment.



“Disclosed Matters” means the actions, suits and proceedings and the environmental
matters disclosed in Schedule 3.06.



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



“Documentation Agent” means RBS Business Capital, a division of RBS Asset Finance,
Inc., a subsidiary of RBS Citizens, N.A., in its capacity as documentation agent for the Lenders
hereunder.



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



“EBITDA” means, for any period, Net Income for such period plus (a) without
duplication and to the extent deducted in determining Net Income for such period, the sum of (i)
Interest Expense for such period, (ii) income tax expense for such period, (iii) all amounts
attributable to depreciation and amortization expense for such period, (iv) any extraordinary
non-cash charges for such period and (v) any other non-cash charges for such period (but excluding
any non-cash charge in respect of an item that was included in Net Income in a prior period and any
non-cash charge that relates to the write-down or write-off of inventory), minus (b)
without duplication and to the extent included in Net Income, (i) any cash payments made during
such period in respect of non-cash charges described in clause (a)(v) taken in a prior period and
(ii) any extraordinary gains and any non-cash items of income for such period, all calculated for
the Company and its Subsidiaries on a consolidated basis in accordance with GAAP.



“Effective Date” means the date on which the conditions specified in Section 4.01 are
satisfied (or waived in accordance with Section 9.02).



“Eligible Accounts” means, at any time, the Accounts of a Borrower which the
Administrative Agent determines in its Permitted Discretion are eligible as the basis for the
extension of Revolving Loans, Swingline Loans and the issuance of Letters of Credit hereunder.
Without limiting the Administrative Agent’s discretion provided herein, Eligible Accounts shall not
include any Account:




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




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




(c) with respect to which (i) is unpaid more than 90 days after the date of the
original invoice therefor, or (ii) which has been written off the books of the Borrower or
otherwise designated as uncollectible;




(d) which is owing by an Account Debtor for which more than 50% of the Accounts owing
from such Account Debtor and its Affiliates are ineligible hereunder;




(e) which is owing by an Account Debtor to the extent the aggregate amount of Accounts
owing from such Account Debtor and its Affiliates to all Borrowers combined exceeds 15% of
the aggregate amount of Eligible Accounts of such Borrower;




(f) 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;




(g) which (i) does not arise from the sale of goods or performance of services in the
ordinary course of business, (ii) is not evidenced by an invoice or other documentation
satisfactory to the Administrative Agent which has been sent to the Account Debtor,
(iii) represents a progress billing, (iv) is contingent upon the Borrower’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;




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




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




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




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




(l) which is owed by an Account Debtor which (i) does not maintain its chief executive
office in the U.S. or Canada or (ii) is not organized under applicable law of the U.S., any
state of the U.S., Canada, or any province of Canada unless, in either case, such Account is
backed by a Letter of Credit acceptable to the Administrative Agent which is in the
possession of, has been assigned to and is directly drawable by the Administrative Agent;




(m) which is owed in any currency other than U.S. dollars;




(n) 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;




(o) which is owed by any Affiliate, employee, officer, director, agent or stockholder
of any Loan Party (other than any stockholder of Metalico, Inc.);




(p) which, for any Account Debtor, exceeds a credit limit determined by the
Administrative Agent, to the extent of such excess;




(q) which 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 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;




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




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




(t) 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 such Borrower to seek judicial enforcement in such jurisdiction of payment of such
Account, unless such Borrower has filed such report or qualified to do business in such
jurisdiction;




(u) with respect to which such Borrower 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 any Account which was partially paid and such Borrower created a new
receivable for the unpaid portion of such Account;




(v) 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;




(w) 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 such Borrower has or has had an ownership interest in
such goods, or which indicates any party other than such Borrower as payee or remittance
party;




(x) which was created on cash on delivery terms; or




(y) which the Administrative Agent determines may not be paid by reason of the Account
Debtor’s inability to pay or which the Administrative Agent otherwise determines is
unacceptable for any reason whatsoever.



In the event that an Account which was previously an Eligible Account ceases to be an Eligible
Account hereunder, such Borrower or the Borrower Representative 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
may, in the Administrative Agent’s Permitted Discretion, 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 such Borrower 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
such Borrower to reduce the amount of such Account.



“Eligible Inventory” means, at any time, the Inventory of a Borrower which the
Administrative Agent determines in its Permitted Discretion is eligible as the basis for the
extension of Revolving Loans, Swingline Loans and the issuance of Letters of Credit hereunder.
Without limiting the Administrative Agent’s discretion provided herein, Eligible Inventory shall
not include any Inventory:




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




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




(c) which is, in the Administrative Agent’s opinion, 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 Governmental Authority;




(e) in which any Person other than such Borrower shall (i) have any direct or indirect
ownership, interest or title to such Inventory 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 is spare or replacement parts, subassemblies, packaging and shipping
material, manufacturing supplies, samples, prototypes, displays or display items,
bill-and-hold goods, goods that are returned or marked for return, repossessed goods,
defective or damaged goods, goods held on consignment, or goods which are not of a type held
for sale in the ordinary course of business;




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




(h) which is located in any location leased by such Borrower unless (i) the lessor has
delivered to the Administrative Agent a Collateral Access Agreement or (ii) a Reserve for
rent, charges, and other amounts due or to become due with respect to such facility has been
established by the Administrative Agent in its Permitted Discretion;




(i) which is located in any third party warehouse or is in the possession of a bailee
(other than a third party processor) and is not evidenced by a Document (other than bills of
lading to the extent permitted pursuant to clause (g) above), 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) an appropriate Reserve
has been established by the Administrative Agent in its Permitted Discretion;




(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 such Borrower as consignor;




(m) which is perishable;




(n) which contains or bears any intellectual property rights licensed to such Borrower
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 inventory report of such Borrower (unless such
Inventory is reflected in a report to the Administrative Agent as “in transit” Inventory);




(p) for which reclamation rights have been asserted by the seller; or




(q) which the Administrative Agent otherwise determines is unacceptable for any reason
whatsoever.



In the event that Inventory which was previously Eligible Inventory ceases to be Eligible
Inventory hereunder, such Borrower or the Borrower Representative shall notify the Administrative
Agent thereof on and at the time of submission to the Administrative Agent of the next Borrowing
Base Certificate. The Administrative Agent may establish a Reserve against the Borrower’s
Inventory in its Permitted Discretion.



“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, 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 any
Borrower or any Subsidiary directly or indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or
threatened release of any Hazardous Materials into the environment or (e) any contract, agreement
or other consensual arrangement pursuant to which liability is assumed or imposed with respect to
any of the foregoing.



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



“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 a 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 any
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 any 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 any 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 any Borrower or any ERISA Affiliate of any notice, or the
receipt by any Multiemployer Plan from any 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.



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



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



“Excluded Taxes” means, with respect to the Administrative Agent, any Lender, the
Issuing Bank or any other recipient of any payment to be made by or on account of any obligation of
any 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 any Borrower is located and
(c) in the case of a Foreign Lender (other than an assignee pursuant to a request by a Borrower
under Section 2.19(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 2.17(f),
except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time
of designation of a new lending office (or assignment), to receive additional amounts from the
Borrowers with respect to such withholding tax pursuant to Section 2.17(a).



“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 chief financial officer, principal accounting officer,
treasurer or controller of a Borrower.



“Fixed Charges” means, with reference to any period, without duplication, cash
Interest Expense, plus cash prepayments and scheduled principal payments on Indebtedness
made during such period, plus expense for taxes paid in cash, plus dividends or
distributions paid in cash, plus Capital Lease Obligation payments, plus cash
contributions to any Plan, so long as such cash contributions are not expensed in the income
statement, all calculated for the Company and its Subsidiaries on a consolidated basis.



“Fixed Charge Coverage Ratio” means, for any period, the ratio of (a) EBITDA
minus the unfinanced portion of Capital Expenditures to (b) Fixed Charges, all calculated
for the Company and its Subsidiaries on a consolidated basis in accordance with GAAP.



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



“Funding Accounts” has the meaning assigned to such term in Section 4.01(h).



“GAAP” means generally accepted accounting principles in the United States of America.



“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” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation of any other Person (the “primary
obligor”) in any manner, whether directly or indirectly, and including any obligation of the
guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or lease property,
securities or services for the purpose of assuring the owner of such Indebtedness or other
obligation of the payment thereof, (c) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or obligation;
provided, that the term Guarantee shall not include endorsements for collection or deposit
in the ordinary course of business.



“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.



“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, (c) 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
Indebtedness of others 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 Indebtedness secured thereby has been assumed, (g) all Guarantees by
such Person of Indebtedness of others, (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) obligations under any liquidated earn-out and (l) any
other 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 provided that
such Person is not liable therefor.



“Indemnified Taxes” means Taxes other than Excluded Taxes.



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



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



“Interest Payment Date” means (a) with respect to any ABR Loan (other than a Swingline
Loan), the first Business Day of each calendar month and the Maturity Date, (b) with respect to any
Eurodollar 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 Eurodollar 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 the Maturity Date, and
(c) with respect to any Swingline Loan, the day that such Loan is required to be repaid and the
Maturity Date.



“Interest Period” means with respect to any Eurodollar 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 Representative 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 Eurodollar 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 Eurodollar 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, in the case of a Revolving Borrowing, 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 Chase, in its capacity as the issuer of Letters of Credit
hereunder, and its successors in such capacity as provided in Section 2.06(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 5.11.



“LC Collateral Account” has the meaning assigned to such term in Section 2.06(j).



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



“LC Exposure” means, at any time, the sum of the Commercial LC Exposure and the
Standby LC Exposure. 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 the Commitment Schedule and any other
Person that shall have become a party hereto pursuant to an Assignment and Assumption, other than
any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption. 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.



“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period,
the rate appearing on Reuters Screen LIBOR01 Page (or on any successor or substitute page of such
Service, or any successor to or substitute for such Service, providing rate quotations comparable
to those currently provided on such page of such Service, as determined by the Administrative Agent
from time to time for purposes of providing quotations of interest rates applicable to dollar
deposits 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 dollar deposits 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 Eurodollar Borrowing for
such Interest Period shall be the rate at which dollar deposits of $5,000,000 and for a maturity
comparable to such Interest Period are offered by the principal London office of the Administrative
Agent in immediately available funds in the London interbank market at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest Period.



“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 right of a third party with respect to such securities.



“Loan Documents” means this Agreement, any promissory notes issued pursuant to the
Agreement, any Letter of Credit applications, the Collateral Documents, the Loan Guaranty, the
Intercreditor Agreement and all other agreements, instruments, documents and certificates
identified in Section 4.01 executed and delivered to, or in favor of, the Administrative Agent or
any Lenders and including all other pledges, powers of attorney, consents, assignments, contracts,
notices, letter of credit agreements and all other written matter whether heretofore, now or
hereafter executed by or on behalf of any Loan Party, or any employee of any Loan Party, and
delivered to the Administrative Agent or any Lender in connection with the Agreement or the
transactions contemplated thereby. Any reference in the 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 the Agreement or such
Loan Document as the same may be in effect at any and all times such reference becomes operative.



“Loan Guarantor” means each Loan Party (other than the Borrowers’ foreign
Subsidiaries).



“Loan Guaranty” means, collectively, Article X of this Agreement and each
separate Guarantee, in form and substance satisfactory to the Administrative Agent, delivered by
each Loan Guarantor that is a foreign Subsidiary (which Guarantee shall be governed by the laws of
the country in which such foreign Subsidiary is located), as it may be amended or modified and in
effect from time to time.



“Loan Parties” means the Borrowers, the Borrowers’ Subsidiaries and any other Person
who becomes a party to this Agreement pursuant to a Joinder Agreement and their successors and
assigns.



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



“Material Adverse Effect” means a material adverse effect on (a) the business, assets,
operations, prospects or condition, financial or otherwise, of the Company 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 Administrative Agent’s Liens (on
behalf of itself and the Lenders) on the Collateral or the priority of such Liens, or (d) the
rights of or benefits available to the Administrative Agent, the Issuing Bank or the Lenders
thereunder.



“Material Indebtedness” means Indebtedness (other than the Loans and Letters of
Credit), or obligations in respect of one or more Swap Agreements, of any one or more of the
Company and its Subsidiaries in an aggregate principal amount exceeding $5,000,000. For purposes
of determining Material Indebtedness, the “obligations” of any Borrower or any Subsidiary in
respect of any Swap Agreement at any time shall be the maximum aggregate amount (giving effect to
any netting agreements) that such Borrower or such Subsidiary would be required to pay if such Swap
Agreement were terminated at such time.



“Maturity Date” means March 1, 2013 or any earlier date on which the Commitments are
reduced to zero or otherwise terminated pursuant to the terms hereof.



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



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



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



“Net Income” means, for any period, the consolidated net income (or loss) of the
Company and its Subsidiaries, determined on a consolidated basis in accordance 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 or is merged into or consolidated with the Company or any
of its Subsidiaries, (b) the income (or deficit) of any Person (other than a Subsidiary) in which
the Company or any of its Subsidiaries has an ownership interest, except to the extent that any
such income is actually received by the Company or such Subsidiary in the form of dividends or
similar distributions and (c) the undistributed earnings of any Subsidiary to the extent that the
declaration or payment of dividends or similar distributions by such Subsidiary is not at the time
permitted by the terms of any contractual obligation (other than under any Loan Document) or
Requirement of Law applicable to such Subsidiary.



“Net Orderly Liquidation Value” means, with respect to Inventory, Equipment or
intangibles of any Person, the orderly liquidation value thereof as determined in a manner
acceptable to the Administrative Agent by an appraiser acceptable to the Administrative Agent, net
of all costs of liquidation thereof.



“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, 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 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 or
otherwise subject to mandatory prepayment as a result of such event 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.



“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 the Lenders or to any Lender, the Administrative
Agent, the Issuing Bank or any indemnified party arising under the Loan Documents.



“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.



“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:




(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 any Borrower or any Subsidiary;



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



“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




(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 any 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 any Loan Party, 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 any Loan Party;
or




(c) the issuance by the Company of any Equity Interests, or the receipt by the Company
of any capital contribution; or




(d) the incurrence by any Loan Party of any Indebtedness, other than Indebtedness
permitted under Section 6.01 or permitted by the Required Lenders pursuant to Section 9.02;
or




(e) if the Lender at any time obtains an appraisal of the Borrowers’ Equipment, and the
appraisal shows the aggregate outstanding principal balance of the Term Note to exceed the
lesser of (1) 75.11% of the Net Orderly Liquidation Value of the Equipment, and (2) the
forced liquidation value of the Borrowers’ Equipment, then the Borrowers, upon demand by the
Lender, shall make additional monthly principal payments in an amount equal to the amount of
such excess divided by 12 months and change the scheduled amortization of the Term Note.



“Prime Rate” means the rate of interest per annum publicly announced from time to time
by Chase as its prime rate at its offices at 270 Park Avenue in New York City; each change in the
Prime Rate shall 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).



“Protective Advance” has the meaning assigned to such term in Section 2.04.



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



“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.



“Report” means reports prepared by the Administrative Agent or another Person showing
the results of appraisals, field examinations or audits pertaining to the Borrowers’ assets from
information furnished by or on behalf of the Borrowers, after the Administrative Agent has
exercised its rights of inspection pursuant to this Agreement, which Reports may be distributed to
the Lenders by the Administrative Agent.



“Required Lenders” means, at any time, Lenders having Credit Exposure and unused
Commitments representing greater than 50% of the sum of the total Credit Exposure and unused
Commitments at such time; provided that, at such times as there are only two Lenders,
Required Lenders shall mean both Lenders.



“Required Revolving Lenders” means, at any time, Lenders having Revolving Exposure and
unused Revolving Commitments representing greater than 50% of the sum of the total Revolving
Exposure and unused Revolving Commitments at such time; provided that at such times as
there are only two Revolving Lenders, Required Revolving Lenders shall mean both Revolving Lenders.



“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.



“Reserves” means any and all reserves which the Administrative Agent deems necessary,
in its Permitted Discretion, to maintain (including, without limitation, an inventory reserve, an
availability reserve, reserves for accrued and unpaid interest on the Secured Obligations, Banking
Services Reserves, volatility reserves, 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 Swap 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) 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 Company or any
Subsidiary, 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 Company or any option, warrant or
other right to acquire any such Equity Interests in the Company.



“Revolving Commitment” means, with respect to each Lender, the commitment, if any, of
such Lender to make Revolving 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 reduced or
increased from time to time pursuant to (a) Section 2.09 and (b) assignments by or to such Lender
pursuant to Section 9.04. The initial amount of each Lender’s Revolving Commitment is set forth
on the Commitment Schedule, or in the Assignment and Assumption pursuant to which such
Lender shall have assumed its Revolving Commitment, as applicable. The initial aggregate amount of
the Lenders’ Revolving Commitments is Fifty Seven Million Dollars ($57,000,000).



“Revolving Exposure” means, with respect to any Lender at any time, the sum of the
outstanding principal amount of such Lender’s Revolving Loans and its LC Exposure and an amount
equal to its Applicable Percentage of the aggregate 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 Loan” means a Loan made pursuant to Section 2.01(a).



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



“Secured Obligations” means all Obligations, together with all (i) Banking Services
Obligations and (ii) Swap Obligations owing to one or more Lenders or their respective Affiliates;
provided that at or prior to the time that any transaction relating to such Swap Obligation
is executed, the Lender party thereto (other than Chase) shall have delivered written notice to the
Administrative Agent that such a transaction has been entered into and that it constitutes a
Secured Obligation entitled to the benefits of the Collateral Documents.



“Security Agreement” means that certain Pledge and Security Agreement, dated as of the
date hereof, between the Loan Parties and the Administrative Agent, for the benefit of the
Administrative Agent and the Lenders, 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), or any other Person, as the same may be amended, restated or otherwise
modified from time to time.



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



“Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of
which is the number one and the denominator of which is the number one minus the aggregate of the
maximum reserve percentages (including any marginal, special, emergency or supplemental reserves)
expressed as a decimal established by the Board to which the Administrative Agent is subject with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred to as “Eurocurrency
Liabilities” in Regulation D of the Board). Such reserve percentages shall include those imposed
pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency funding
and to be subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender under such Regulation D
or any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as
of the effective date of any change in any reserve percentage.



“Subordinated Indebtedness” of a Person means any Indebtedness of such Person the
payment of which is subordinated to payment of the Obligations to the written satisfaction of the
Administrative Agent.



“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” means any direct or indirect subsidiary of the Company or a Loan Party,
as applicable.



“Swap 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
more rates, currencies, commodities, equity or debt instruments or securities, or economic,
financial or pricing indices or measures of economic, financial or pricing risk or value or any
similar transaction or any combination of these transactions; provided that no phantom
stock or similar plan providing for payments only on account of services provided by current or
former directors, officers, employees or consultants of the Borrowers or the Subsidiaries shall be
a Swap Agreement.



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



“Swingline Exposure” means, at any time, the sum of the aggregate undrawn amount of
all outstanding Swingline Loans at such time. The Swingline Exposure of any Revolving Lender at
any time shall be its Applicable Percentage of the total Swingline Exposure at such time.



“Swingline Lender” means JPMorgan Chase Bank, N.A., in its capacity as lender of
Swingline Loans hereunder.



“Swingline Loan” has the meaning assigned to such term in Section 2.05(a).



“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 a Term Loan
Commitment.



“Term Loan Commitment” means (a) as to any Term Lender, the aggregate commitment of
such Term Lender to make Term Loans as set forth in the Commitment Schedule or in the most
recent Assignment and Assumption executed by such Term Lender and (b) as to all Term Lenders, the
aggregate commitment of all Term Lenders to make Term Loans, which aggregate commitment shall be
Eight Million Dollars ($8,000,000) on the date of this Agreement. After advancing the Term Loan,
each reference to a Term Lender’s Term Loan Commitment shall refer to that Term Lender’s Applicable
Percentage of the Term Loans.



“Term Loans” means the Term Loans extended by the Lenders to the Borrowers pursuant to
Section 2.01(b) hereof.



“Total Indebtedness” means, at any date, the aggregate principal amount of all
Indebtedness of the Company and its Subsidiaries at such date, determined on a consolidated basis
in accordance with GAAP.



“Trade Deposit” means a payment received by a Loan Party from a Person other than a
Loan Party in the ordinary course of business for the purpose of acquiring materials to be
processed into goods to be delivered to or at the direction of such Person at a future date.



“Transactions” means the execution, delivery and performance by the Borrowers of this
Agreement, the borrowing of Loans and other credit extensions, 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
Adjusted LIBO Rate, 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
issue of perfection of security interests.



“Unliquidated Obligations” means, at any time, any Secured Obligations (or portion
thereof) that are contingent in nature or unliquidated at such time, including any Secured
Obligation that is: (i) an obligation to reimburse a bank for drawings not yet made under a letter
of credit issued by it; (ii) any other obligation (including any guarantee) that is contingent in
nature at such time; or (iii) 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.



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 “Eurodollar Loan”) or by Class and Type (e.g., a “Eurodollar
Revolving Loan”). Borrowings also may be classified and referred to by Class (e.g., a
“Revolving Borrowing”) or by Type (e.g., a “Eurodollar Borrowing”) or by Class and Type
(e.g., a “Eurodollar 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 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, Exhibits and Schedules shall be construed to refer to Articles and Sections of,
and 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 Representative notifies the
Administrative Agent that the Borrowers request 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
Representative 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. Commitments. Subject to the terms and conditions set forth herein,
each Lender agrees to make (a) Revolving Loans to the Borrowers 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 sum of the total Revolving Commitments or (y) the
Borrowing Base of the Borrower requesting such Borrowing or Letter of Credit, subject to the
Administrative Agent’s authority, in its sole discretion, to make Protective Advances pursuant to
the terms of Section 2.04 and 2.05 and (b) a Term Loan to the Borrowers, on the Effective Date, in
an amount equal to such Lender’s Term Loan Commitment by making immediately available funds
available to the Administrative Agent’s designated account, not later than 11:00 a.m., Chicago
time. Within the foregoing limits and subject to the terms and conditions set forth herein, the
Borrowers may borrow, prepay and reborrow Revolving Loans. Amounts repaid in respect of Term Loans
may not be reborrowed and the Term Loan will be fully funded on the Effective Date.



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
Protective Advance and any Swingline Loan shall be made in accordance with the procedures set forth
in Section 2.04 and 2.05. The Term Loans shall amortize as set forth in Section 2.10.



(b)  Subject to Section 2.14, each Revolving Borrowing and Term Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as the Borrower Representative may request in accordance
herewith, provided that all Borrowings made on the Effective Date must be made as ABR
Borrowings but may be converted into Eurodollar Borrowings in accordance with Section 2.08. Each
Swingline Loan shall be an ABR Loan. Each Lender at its option may make any Eurodollar 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 Borrowers
to repay such Loan in accordance with the terms of this Agreement.



(c) At the commencement of each Interest Period for any Eurodollar Revolving Borrowing, such
Borrowing shall be in an aggregate amount that is an integral multiple of $100,000 and not less
than $500,000 ABR Revolving Borrowings may be in any amount. Borrowings of more than one Type and
Class may be outstanding at the same time; provided that there shall not at any time be
more than a total of 6 Eurodollar Borrowings outstanding.



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



SECTION 2.03. Requests for Revolving Borrowings. To request a Revolving Borrowing,
the Borrower Representative shall notify the Administrative Agent of such request either in writing
(delivered by hand or facsimile) in a form approved by the Administrative Agent and signed by the
Borrower Representative or by telephone (a) in the case of a Eurodollar Borrowing, not later than
10:00 a.m., Chicago time, three Business Days before the date of the proposed Borrowing or (b) in
the case of an ABR Borrowing, not later than 11:00 a.m., Chicago time, on the date of the proposed
Borrowing; provided that any such notice of an ABR Revolving Borrowing to finance the
reimbursement of an LC Disbursement as contemplated by Section 2.06(e) may be given not later than
9:00 a.m., Chicago time, on the date of the proposed Borrowing. Each such telephonic Borrowing
Request shall be irrevocable and shall be confirmed promptly by hand delivery or facsimile to the
Administrative Agent of a written Borrowing Request in a form approved by the Administrative Agent
and signed by the Borrower Representative. Each such telephonic and written Borrowing Request
shall specify the following information in compliance with Section 2.01:




(i) reserved.




(ii) the aggregate amount of the requested Borrowing and a breakdown of the
separate wires comprising such Borrowing;




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




(iv) whether such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;
and




(v) in the case of a Eurodollar 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 Revolving Borrowing is specified, then the requested Revolving
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with respect to any
requested Eurodollar Revolving Borrowing, then the applicable Borrower(s) 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. Protective Advances. (a) Subject to the limitations set forth below,
the Administrative Agent is authorized by the Borrowers and the Lenders, from time to time in the
Administrative Agent’s sole discretion (but shall have absolutely no obligation to), to make Loans
to the Borrowers, on behalf of all Lenders, which the Administrative Agent, in its Permitted
Discretion, deems necessary or desirable (i) to preserve or protect the Collateral, or any portion
thereof, (ii) to enhance the likelihood of, or maximize the amount of, repayment of the Loans and
other Obligations, or (iii) to pay any other amount chargeable to or required to be paid by the
Borrowers pursuant to the terms of this Agreement, including payments of reimbursable expenses
(including costs, fees, and expenses as described in Section 9.03) and other sums payable under the
Loan Documents (any of such Loans are herein referred to as “Protective Advances”);
provided that, the aggregate amount of Protective Advances outstanding at any time shall
not at any time exceed $4,000,000; provided further that, the aggregate amount of
outstanding Protective Advances plus the aggregate Revolving Exposure shall not exceed the
aggregate Revolving Commitments. Protective Advances may be made even if the conditions precedent
set forth in Section 4.02 have not been satisfied. The Protective Advances shall be secured by the
Liens in favor of the Administrative Agent in and to the Collateral and shall constitute
Obligations hereunder. All Protective Advances shall be ABR Borrowings. The Administrative
Agent’s authorization to make Protective Advances may be revoked at any time by the Required
Lenders. Any such revocation must be in writing and shall become effective prospectively upon the
Administrative Agent’s receipt thereof. At any time that there is sufficient Availability and the
conditions precedent set forth in Section 4.02 have been satisfied, the Administrative Agent may
request the Revolving Lenders to make a Revolving Loan to repay a Protective Advance. At any other
time the Administrative Agent may require the Lenders to fund their risk participations described
in Section 2.04(b).



(b) Upon the making of a Protective Advance by the Administrative Agent (whether before or
after the occurrence of a Default), each Lender shall be deemed, without further action by any
party hereto, to have unconditionally and irrevocably purchased from the Administrative Agent
without recourse or warranty, an undivided interest and participation in such Protective Advance in
proportion to its Applicable Percentage. From and after the date, if any, on which any Lender is
required to fund its participation in any Protective Advance purchased hereunder, the
Administrative Agent shall promptly distribute to such Lender, such Lender’s Applicable Percentage
of all payments of principal and interest and all proceeds of Collateral received by the
Administrative Agent in respect of such Protective Advance.



SECTION 2.05. Swingline Loans.



(a) The Administrative Agent, the Swingline Lender and the Revolving Lenders agree that in
order to facilitate the administration of this Agreement and the other Loan Documents, promptly
after the Borrower Representative requests an ABR Borrowing, the Swingline Lender may elect to have
the terms of this Section 2.05(a) apply to such Borrowing Request by advancing, on behalf of the
Revolving Lenders and in the amount requested, same day funds to the Borrowers, on the applicable
Borrowing date to the Funding Account(s) (each such Loan made solely by the Swingline Lender
pursuant to this Section 2.05(a) is referred to in this Agreement as a “Swingline Loan”),
with settlement among them as to the Swingline Loans to take place on a periodic basis as set forth
in Section 2.05(c). Each Swingline Loan shall be subject to all the terms and conditions
applicable to other ABR Loans funded by the Revolving Lenders, except that all payments thereon
shall be payable to the Swingline Lender solely for its own account. In addition, the Borrowers
hereby authorize the Swingline Lender to, and the Swingline Lender shall, subject to the terms and
conditions set forth herein (but without any further written notice required), not later than 1:00
p.m., Chicago time, on each Business Day, make available to the Borrowers by means of a credit to
the Funding Account(s), the proceeds of a Swingline Loan to the extent necessary to pay items to be
drawn on any Controlled Disbursement Account that day (as determined based on notice from the
Administrative Agent). The aggregate amount of Swingline Loans outstanding at any time shall not
exceed $7,500,000. The Swingline Lender shall not make any Swingline Loan if the requested
Swingline Loan exceeds such Borrower’s Availability (before giving effect to such Swingline Loan).
All Swingline Loans shall be ABR Borrowings.



(b) Upon the making of a Swingline Loan (whether before or after the occurrence of a Default
and regardless of whether a Settlement has been requested with respect to such Swingline Loan),
each Revolving Lender shall be deemed, without further action by any party hereto, to have
unconditionally and irrevocably purchased from the Swingline Lender or the Administrative Agent, as
the case may be, without recourse or warranty, an undivided interest and participation in such
Swingline Loan in proportion to its Applicable Percentage of the Revolving Commitment. The
Swingline Lender or the Administrative Agent may, at any time, require the Revolving Lenders to
fund their participations. From and after the date, if any, on which any Revolving Lender is
required to fund its participation in any Swingline Loan purchased hereunder, the Administrative
Agent shall promptly distribute to such Lender, such Lender’s Applicable Percentage of all payments
of principal and interest and all proceeds of Collateral received by the Administrative Agent in
respect of such Loan.



(c) The Administrative Agent, on behalf of the Swingline Lender, shall request settlement
(a “Settlement”) with the Revolving Lenders on at least a weekly basis or on any date that
the Administrative Agent elects, by notifying the Revolving Lenders of such requested Settlement by
facsimile, telephone, or e-mail no later than noon Chicago time on the date of such requested
Settlement (the “Settlement Date”). Each Revolving Lender (other than the Swingline
Lender, in the case of the Swingline Loans) shall transfer the amount of such Revolving Lender’s
Applicable Percentage of the outstanding principal amount of the applicable Loan with respect to
which Settlement is requested to the Administrative Agent, to such account of the Administrative
Agent as the Administrative Agent may designate, not later than 2:00 p.m., Chicago time, on such
Settlement Date. Settlements may occur during the existence of a Default and whether or not the
applicable conditions precedent set forth in Section 4.02 have then been satisfied. Such amounts
transferred to the Administrative Agent shall be applied against the amounts of the Swingline
Lender’s Swingline Loans and, together with Swingline Lender’s Applicable Percentage of such
Swingline Loan, shall constitute Revolving Loans of such Revolving Lenders, respectively. If any
such amount is not transferred to the Administrative Agent by any Revolving Lender on such
Settlement Date, the Swingline Lender shall be entitled to recover such amount on demand from such
Lender together with interest thereon as specified in Section 2.07.



SECTION 2.06. Letters of Credit. (a) General. Subject to the terms and
conditions set forth herein, the Borrower Representative may request the issuance of Letters of
Credit for its own account or for the account of another Borrower, 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 Borrowers to, or entered into by the Borrowers 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 Representative 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, Chicago time, at
least three Business Days prior to 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 paragraph (c) of this Section), 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 applicable
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 Borrowers 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 $5,000,000, and (ii)
the total Revolving Exposures shall not exceed the lesser of the total Revolving Commitments or the
Borrowing Base.



(c) Expiration Date. Each Letter of Credit shall expire at or prior to the close of
business on the earliest of (i) the expiration date requested in the notice delivered pursuant to
Section 2.06(b) above, (ii) 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 (iii) 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 of each LC Disbursement made by
the Issuing Bank and not reimbursed by the Borrowers on the date due as provided in paragraph (e)
of this Section, or of any reimbursement payment required to be refunded to the Borrowers 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
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 Borrowers 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., Chicago
time, on the date that such LC Disbursement is made, if the Borrowers Representative shall have
received notice of such LC Disbursement prior to 9:00 a.m., Chicago time, on such date, or, if such
notice has not been received by the Borrower Representative prior to such time on such date, then
not later than 11:00 a.m., Chicago time, on (i) the Business Day that the Borrower Representative
receives such notice, if such notice is received prior to 9:00 a.m., Chicago time, on the day of
receipt, or (ii) the Business Day immediately following the day that the Borrower Representative
receives such notice, if such notice is not received prior to such time on the day of receipt;
provided that (i) the Borrowers may, subject to the conditions to borrowing set forth
herein, request in accordance with Section 2.03 or 2.05 that such payment be financed with an ABR
Revolving Borrowing or Swingline Loan in an equivalent amount, and (ii) in the event the Borrowers
fail to deliver timely notice of a borrowing as contemplated under the immediately preceding clause
(i) and the Borrowers are eligible to borrow ABR Revolving Borrowings in accordance with the
applicable conditions to borrowing set forth herein, such LC Disbursement shall automatically be
converted to an ABR Borrowing hereunder without any further action by the Borrowers; and, to the
extent so financed under either of the preceding clauses, the Borrowers’ obligation to make such
payment shall be discharged and replaced by the resulting ABR Revolving Borrowing or Swingline
Loan. If the Borrowers fail to make such payment when due as a result of inability to satisfy the
applicable conditions to borrowing set forth herein, the Administrative Agent shall notify each
Revolving Lender of the applicable LC Disbursement, the payment then due from the Borrowers 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 Borrowers, in the same manner as provided in Section 2.07 with
respect to Loans made by such Lender (and Section 2.07 shall apply, mutatis
mutandis, to the 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 Borrowers
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 Borrowers of their
obligation to reimburse such LC Disbursement.



(f) Obligations Absolute. The Borrowers’ joint and several obligation to reimburse
LC Disbursements as provided in paragraph (e) of this Section 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 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 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 Borrowers’ 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 Borrowers to the extent of any direct damages (as opposed to consequential
damages, claims in respect of which are hereby waived by the Borrowers to the extent permitted by
applicable law) suffered by any 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 applicable
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 Borrowers of their 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 Borrowers 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 Borrowers reimburse such LC
Disbursement, at the rate per annum then applicable to ABR Revolving Loans; provided that,
if the Borrowers fail to reimburse such LC Disbursement when due pursuant to paragraph (e) of this
Section, then Section 2.13(d) shall apply. Interest accrued pursuant to this paragraph 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 paragraph (e) of this Section to 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 Representative, 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 Borrowers shall pay all unpaid fees accrued for the account of the replaced Issuing
Bank pursuant to Section 2.12(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 Default shall occur and be continuing, on the
Business Day that the Borrower Representative receives notice from the Administrative Agent or the
Required 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 Borrowers 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 105% 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 any 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 Borrowers hereby grant 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 Borrowers’ 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 Borrowers for
the LC Exposure at such time or, if the maturity of the Loans has been accelerated (but subject to
the consent of Revolving Lenders with LC Exposure representing greater than 50% of the total LC
Exposure), be applied to satisfy other Secured Obligations. If the Borrowers are required to
provide an amount of cash collateral hereunder as a result of the occurrence of a Default, such
amount (to the extent not applied as aforesaid) shall be returned to the Borrowers within three
Business Days after all such Defaults have been cured or waived.



SECTION 2.07. 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 1:00 p.m., Chicago 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, Term Loans shall be made as provided in Section 2.01(b) and
2.02(b) and Swingline Loans shall be made as provided in Section 2.05. The Administrative Agent
will make such Loans available to the Borrower Representative by promptly crediting the amounts so
received, in like funds, to the Funding Account(s); provided that ABR Revolving Loans made
to finance the reimbursement of (i) an LC Disbursement as provided in Section 2.06(e) shall be
remitted by the Administrative Agent to the Issuing Bank and (ii) a Protective Advance shall be
retained by the Administrative Agent.



(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 paragraph (a) of this Section and may, in
reliance upon such assumption, make available to the applicable 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 Borrowers 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 applicable 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
Borrowers, 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 2.08. Interest Elections. (a) Each Revolving Borrowing initially shall be
of the Type specified in the applicable Borrowing Request and, in the case of a Eurodollar
Revolving Borrowing, shall have an initial Interest Period as specified in such Borrowing Request.
Thereafter, the Borrower Representative may elect to convert such Borrowing to a different Type or
to continue such Borrowing and, in the case of a Eurodollar Revolving Borrowing, may elect Interest
Periods therefor, all as provided in this Section. The Borrower Representative 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 or Protective Advances, which may not be converted or
continued.



(b) To make an election pursuant to this Section, the Borrower Representative 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 Borrowers were requesting a Revolving 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 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 Representative.



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




(i) the Borrower and 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 Eurodollar
Borrowing; and




(iv) if the resulting Borrowing is a Eurodollar 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 Eurodollar Borrowing but does not specify an
Interest Period, then the Borrowers 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 Representative fails to deliver a timely Interest Election Request with
respect to a Eurodollar 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 Representative, then, so long as a
Default is continuing (i) no outstanding Revolving Borrowing may be converted to or continued as a
Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Revolving Borrowing shall be converted
to an ABR Borrowing at the end of the Interest Period applicable thereto.



SECTION 2.09. Termination of Commitments; Increase in Revolving Commitments. (a)
Unless previously terminated, (i) the Term Loan Commitments shall terminate at 5:00 p.m., Chicago
time, on the Effective Date and (ii) all other Commitments shall terminate on the Maturity Date.



(b) The Borrowers may at any time terminate the Commitments upon (i) the payment in full of
all outstanding Loans, together with accrued and unpaid interest thereon and on any Letters of
Credit, (ii) the cancellation and return of all outstanding Letters of Credit (or alternatively,
with respect to each such Letter of Credit, the furnishing to the Administrative Agent of a cash
deposit (or at the discretion of the Administrative Agent a back up standby letter of credit
satisfactory to the Administrative Agent) equal to 105% of the LC Exposure as of such date), (iii)
the payment in full of the accrued and unpaid fees (if any), and (iv) the payment in full of all
reimbursable expenses and other Obligations together with accrued and unpaid interest thereon.



(c) The Borrower Representative shall notify the Administrative Agent of any election to
terminate the Commitments under paragraph (b)of this Section 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 notice, the Administrative Agent shall advise the Lenders of the
contents thereof. Each notice delivered by the Borrower Representative pursuant to this Section
shall be irrevocable; provided that a notice of termination of the Commitments delivered by
the Borrower Representative 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 Representative
(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.



(d) With the consent of 100% of the Lenders, the Borrowers shall have the right to increase
the Revolving Commitment by obtaining additional Revolving Commitments, either from one or more of
the Lenders or another lending institution provided that (i) any such request for an increase shall
be in a minimum amount of $5,000,000 and a maximum amount of up to $10,000,000 and in no event
shall such increase cause the Revolving Commitment to exceed $67,000,000, (ii) the Borrower
Representative, on behalf of the Borrower, may make such request, (iii) the Administrative Agent
has approved the identity of any such new Lender, such approval not to be unreasonably withheld or
delayed, (iv) any such new Lender assumes all of the rights and obligations of a “Lender”
hereunder, and (v) the procedure described in Section 2.09(f) have been satisfied.



(e) Any amendment hereto for such an increase or addition shall be in form and substance
satisfactory to the Administrative Agent and shall only require the written signatures of the
Administrative Agent, the Borrowers and the Lender(s) being added or increasing their Commitment,
subject only to the approval of all Lenders if any such increase would cause the Revolving
Commitment to exceed $57,000,000. As a condition precedent to such an increase, the Borrower
Representative shall deliver to the Administrative Agent a certificate of each Loan Party (in
sufficient copies for each Lender) signed by an authorized officer of such Loan Party (i)
certifying and attaching the resolutions adopted by such Loan Party approving or consenting to such
increase, and (ii) in the case of the Borrowers, certifying that, before and after giving effect to
such increase, (A) the representations and warranties contained in Article III and the other Loan
Documents are true and correct, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they are true and correct as of such earlier
date, and (B) no Default exists.



(f) Within a reasonable time after the effective date of any increase, the Administrative
Agent shall, and is hereby authorized and directed to, revise the Commitment Schedule to reflect
such increase and shall distribute such revised Commitment Schedule to each of the Lenders and the
Borrowers, whereupon such revised Commitment Schedule shall replace the previously effective
Commitment Schedule and become part of this Agreement. On the Business Day following any such
increase, all outstanding ABR Advances shall be reallocated among the Lenders (including any newly
added Lenders) in accordance with the Lenders’ respective revised Applicable Percentages.
Eurodollar Advances shall not be reallocated among the Lenders prior to the expiration of the
applicable Interest Period in effect at the time of any such increase.



SECTION 2.10. Repayment and Amortization of Loans; Evidence of Debt. (a) The
Borrowers hereby unconditionally promise to pay (i) to the Administrative Agent for the account of
each Lender the then unpaid principal amount of each Revolving Loan on the Maturity Date, and (ii)
to the Administrative Agent the then unpaid amount of each Protective Advance on the earlier of the
Maturity Date and demand by the Administrative Agent. The Borrowers shall repay Term Loans
beginning on April 1, 2010, and on the first Business Day of each month thereafter in
the aggregate principal amount of Two Hundred Twenty-Two Thousand Dollars and 22/100 ($222,222.22)
(as adjusted from time to time pursuant to Section 2.11(e). To the extent not previously paid, all
unpaid Term Loans shall be paid in full in cash by the Borrowers on the Maturity 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, the Administrative Agent shall apply all funds credited to the
Collection Account the previous Business Day (whether or not immediately available) first
to prepay any Protective Advances that may be outstanding, pro rata, and second to prepay
the Revolving Loans (including Swing Line Loans) and to cash collateralize outstanding LC Exposure.



(c) Each Lender shall maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of the Borrowers 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 and payable from the
Borrowers 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 paragraph (c) or (d) of this
Section 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 Borrowers 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 Borrowers 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)) the form of Exhibits 2.10(f)-R
(Revolving Loan) and 2.10(f)-T (Term Loan) attached hereto. Thereafter, the Loans evidenced by such
promissory note(s) and interest thereon shall at all times (including after assignment 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 2.11. Prepayment of Loans. (a) The Borrowers shall have the right at any
time and from time to time to prepay any Borrowing in whole or in part, subject to prior notice in
accordance with paragraph (f) of this Section.



(b) In the event and on such occasion that the total Revolving Exposure exceeds the lesser of
(A) the aggregate Revolving Commitments or (B) the Borrowing Base, the Borrowers shall prepay the
Revolving Loans, LC Exposure and/or Swingline Loans in an aggregate amount equal to such excess.
In addition, in the event and on such occasion that the Revolving Exposure of the Borrowers exceeds
the lesser of (A) the Revolving Commitment or (B) the Borrowing Base, the Borrowers shall prepay
the Revolving Loans, LC Exposure and/or Swingline Loans 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 Borrowers shall, immediately after such Net
Proceeds are received by any Loan Party, prepay the Obligations as set forth in Section 2.11(e)
below in an aggregate amount equal to, in the case of a Prepayment Event, 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 Representative 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, (A) 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 or (B) to acquire Controlling Equity Interests in a Person in an
Acquisition otherwise permitted hereunder or consented to by the Required Lenders, and in either
event certifying that no Default has occurred and is continuing, then either (i) so long as full
cash dominion is not in effect, no prepayment shall be required pursuant to this paragraph in
respect of the Net Proceeds specified in such certificate and (ii) if full cash dominion is in
effect, 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 Commitment) and upon such application, the Administrative Agent shall establish a Reserve
against the Borrowing Base in an amount equal to the amount of such proceeds so applied and,
thereafter, such funds shall be made available to the Borrowers as follows:




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




(2) so long as the conditions set forth in Section 4.02 have been met, the Revolving
Lenders shall make such Revolving Loan or the Administrative Agent shall release funds from
the cash collateral account; and




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



provided that a prepayment shall be required at the end of such 180-day period to the
extent that any such Net Proceeds have not been so applied in an amount equal to such unapplied Net
Proceeds.



(d) Reserved.



(e) All such amounts pursuant to Section 2.11(c) (as to any insurance or condemnation
proceeds, to the extent they arise from casualties or losses to Equipment, Fixtures and real
property) shall be applied, first to prepay any Protective Advances that may be
outstanding, pro rata, second to prepay the Term Loans (to be applied to installments of
the Term Loans in inverse order of maturity and third to prepay the Revolving Loans
(including Swing Line Loans) without a corresponding reduction in the Revolving Commitment and to
cash collateralize outstanding LC Exposure. All such amounts pursuant to Section 2.11(c) (as to
any insurance or condemnation proceeds, to the extent they arise from casualties or losses to cash
or Inventory) shall be applied, first to prepay any Protective Advances that may be
outstanding, pro rata, and second to prepay the Revolving Loans (including Swing Line
Loans) without a corresponding reduction in the Revolving Commitment and to cash collateralize
outstanding LC Exposure. If the precise amount of insurance or condemnation proceeds allocable to
Inventory as compared to Equipment, Fixtures and real property is not otherwise determined, the
allocation and application of those proceeds shall be determined by the Administrative Agent, in
its Permitted Discretion.



(f) The Borrower Representative shall notify the Administrative Agent (and, in the case of
prepayment of a Swingline Loan, the Swingline Lender) by telephone (confirmed by facsimile) of any
prepayment hereunder (i) in the case of prepayment of a Eurodollar Revolving Borrowing, not later
than 10:00 a.m., Chicago time, three Business Days before the date of prepayment, or (ii) in the
case of prepayment of an ABR Revolving Borrowing, not later than 10:00 a.m., Chicago time, one
Business Day before the date of prepayment. Each such notice shall be irrevocable and shall
specify the prepayment date and the principal amount of each Borrowing or portion thereof to be
prepaid; provided that, if a notice of prepayment is given in connection with a conditional
notice of termination of the Commitments as contemplated by Section 2.09, then such notice of
prepayment may be revoked if such notice of termination is revoked in accordance with Section 2.09.
Promptly following receipt of any such notice relating to a Revolving Borrowing, the
Administrative Agent shall advise the Lenders of the contents thereof. Each partial prepayment of
any Revolving Borrowing shall be in an amount that would be permitted in the case of an advance of
a Revolving Borrowing of the same Type as provided in Section 2.02. Each prepayment of a Revolving
Borrowing shall be applied ratably to the Revolving Loans included in the prepaid Borrowing.
Prepayments shall be accompanied by accrued interest to the extent required by Section 2.13.



SECTION 2.12. Fees. (a)  The Borrowers agree to pay to the Administrative Agent for
the account of each Lender a commitment fee, which shall accrue at the Applicable Rate on such
Lender’s ratable portion of the average daily amount of the Available Revolving Commitment
less the Availability Block during the period from and including the Effective Date to but
excluding the date on which the Lenders’ Revolving Commitments terminate; provided, however, to the
extent the Borrowing Base exceeds the Revolving Commitment then in effect at the time of the
calculation of the commitment fee, the Availability Block will not be excluded from such commitment
fee calculation. Accrued commitment fees shall be payable in arrears on the first Business Day of
each calendar month and on the date on which the Revolving Commitment terminates, commencing on the
first such date to occur after the date hereof. 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.



(b) The Borrowers agree to pay (i) to the Administrative Agent for the account of each
Revolving Lender a participation fee with respect to (x) its participations in standby Letters of
Credit, which shall accrue at the same Applicable Rate used to determine the interest rate
applicable to Eurodollar Revolving Loans on the average daily amount of such Lender’s Standby LC
Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) and (y) its
participations in commercial Letters of Credit at a rate per annum equal to 0.25% on the maximum
amount available to be drawn under such Letters of Credit, in each case, 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, and (ii) to the Issuing Bank 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, as well as 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 including the last day of
each calendar month shall be payable on the first Business Day of each calendar month 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. 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.



(c)  The Borrowers agree to pay to the Administrative Agent, for its own account, fees payable
in the amounts and at the times separately agreed upon between the Borrowers 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 2.13. Interest. (a) The Loans comprising each ABR Borrowing (including each
Swingline Loan) shall bear interest at the Alternate Base Rate plus the Applicable Rate.



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



(c) Each Protective Advance shall bear interest at the Alternate Base Rate plus the
Applicable Rate for Revolving Loans plus 2%.



(d) Notwithstanding the foregoing, during the occurrence and continuance of a Default, the
Administrative Agent or the Required Lenders may, at their option, by notice to the Borrower
Representative (which notice may be revoked at the option of the Required Lenders notwithstanding
any provision of Section 9.02 requiring the consent of “each Lender affected thereby” for
reductions in interest rates), declare that (i) all Loans shall bear interest at 2% plus the rate
otherwise applicable to such Loans as provided in the preceding paragraphs of this Section or (ii)
in the case of any other amount outstanding hereunder, such amount shall accrue at 2% plus the rate
applicable to such fee or other obligation as provided hereunder.



(e) Accrued interest on each Loan (for ABR Loans, accrued through the last day of the prior
calendar month) 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 paragraph
(d) of this Section 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 any conversion of any Eurodollar 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.



(f) Interest based on the Prime Rate hereunder shall be computed on the basis of a year of
365 days (or 366 days in a leap year) and paid for the actual number of days elapsed (including the
first day but excluding the last day). All other interest hereunder shall be computed on the basis
of a year of 360 days, and shall be payable for the actual number of days elapsed. The applicable
Alternate Base Rate, Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative
Agent, and such determination shall be conclusive absent manifest error.



SECTION 2.14. Alternate Rate of Interest. If prior to the commencement of any
Interest Period for a Eurodollar 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
Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period; or




(b) the Administrative Agent is advised by the Required Lenders that the Adjusted LIBO
Rate or the LIBO Rate, as applicable, 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 Representative and the
Lenders by telephone or facsimile as promptly as practicable thereafter and, until the
Administrative Agent notifies the Borrower Representative 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
Eurodollar Borrowing shall be ineffective, and (ii) if any Borrowing Request requests a Eurodollar
Revolving Borrowing, such Borrowing shall be made as an ABR Borrowing.



SECTION 2.15. 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 (except any such reserve requirement reflected in the Adjusted LIBO Rate) 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 Eurodollar Loans made by such Lender or any Letter of
Credit or participation therein;



and the result of any of the foregoing shall be to increase the cost to such Lender of making or
maintaining any Eurodollar 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 Borrowers 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 Borrowers 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 paragraph (a) or (b) of this Section shall be delivered to the Borrower
Representative and shall be conclusive absent manifest error. The Borrowers 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 Borrowers 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 270 days prior to the date that such Lender or the Issuing Bank, as
the case may be, notifies the Borrower Representative 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 270-day period referred to above shall
be extended to include the period of retroactive effect thereof.



SECTION 2.16. Break Funding Payments. In the event of (a) the payment of any
principal of any Eurodollar 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 Eurodollar Loan
other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow,
convert, continue or prepay any Eurodollar Loan on the date specified in any notice delivered
pursuant hereto (regardless of whether such notice may be revoked under Section 2.09(c) and is
revoked in accordance therewith), or (d) the assignment of any Eurodollar Loan other than on the
last day of the Interest Period applicable thereto as a result of a request by the Borrower
Representative pursuant to Section 2.19, then, in any such event, the Borrowers shall compensate
each Lender for the loss, cost and expense attributable to such event. In the case of a Eurodollar
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 Adjusted 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 eurodollar 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 Representative and shall be conclusive absent manifest
error. The Borrowers shall pay such Lender the amount shown as due on any such certificate within
10 days after receipt thereof.



SECTION 2.17. Taxes. (a) Any and all payments by or on account of any obligation of
the Borrowers hereunder shall be made free and clear of and without deduction for any Indemnified
Taxes or Other Taxes; provided that if the Borrowers 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, 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 Borrowers shall make such deductions and (iii) the Borrowers shall pay the full
amount deducted to the relevant Governmental Authority in accordance with applicable law.



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



(c) The Borrowers shall jointly and severally indemnify the Administrative 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, 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
Borrowers 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 Representative
by a Lender or the Issuing Bank, or by the Administrative Agent on its own behalf or on behalf of a
Lender or the Issuing Bank, shall be conclusive absent manifest error.



(d) Each Lender and the Issuing Bank shall indemnify the Borrowers and the Administrative
Agent, within 10 days after written demand therefor, against any and all Taxes and any and all
related losses, claims, liabilities, penalties, interest and reasonable expenses (including the
fees, charges and disbursements of any counsel for the Borrower or the Administrative Agent)
incurred by or asserted against the Borrowers or the Administrative Agent by any Governmental
Authority as a result of the failure by such Lender or the Issuing Bank, as the case may be, to
deliver, or as a result of the inaccuracy, inadequacy or deficiency of, any documentation required
to be delivered to the Borrowers or the Administrative Agent pursuant to Section 2.17(f). Each
Lender and the Issuing Bank hereby authorizes the Administrative Agent to set off and apply any and
all amounts at any time owing to such Lender or the Issuing Bank, as the case may be, under this
Agreement or any other Loan Document against any amount due to the Administrative Agent under this
Section 2.17(d).



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



(f) Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax
under the law of the jurisdiction in which any Borrower is located, or any treaty to which such
jurisdiction is a party, with respect to payments under this Agreement shall deliver to the
Borrower Representative (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 Representative as will permit such payments to be made
without withholding or at a reduced rate.



(g) If the Administrative Agent or a 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 Borrowers
or with respect to which the Borrowers have paid additional amounts pursuant to this Section 2.17,
it shall pay over such refund to the Borrowers (but only to the extent of indemnity payments made,
or additional amounts paid, by the Borrowers under this Section 2.17 with respect to the Taxes or
Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative
Agent or such Lender and without interest (other than any interest paid by the relevant
Governmental Authority with respect to such refund); provided, that the Borrowers, upon the request
of the Administrative Agent or such Lender, agree to repay the amount paid over to the Borrowers
(plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to
the Administrative Agent or such Lender in the event the Administrative Agent or such Lender is
required to repay such refund to such Governmental Authority. This Section shall not be construed
to require the Administrative Agent or any Lender to make available its tax returns (or any other
information relating to its taxes which it deems confidential) to the Borrowers or any other
Person.



SECTION 2.18. Payments Generally; Allocation of Proceeds; Sharing of Set-offs. (a)
The Borrowers shall make each payment required to be made by them hereunder (whether of principal,
interest, fees or reimbursement of LC Disbursements, or of amounts payable under Section 2.15, 2.16
or 2.17, or otherwise) prior to 2:00 p.m., Chicago 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 10 South Dearborn Street, 22nd Floor,
Chicago, Illinois, except payments to be made directly to the Issuing Bank or Swingline Lender as
expressly provided herein and except that payments pursuant to Sections 2.15, 2.16, 2.17 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 interest, interest thereon shall be payable for the period of such
extension. All payments hereunder shall be made in dollars.



(b) Any proceeds of Collateral received by 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 Borrowers), (B) a mandatory prepayment (which
shall be applied in accordance with Section 2.11) or (C) amounts to be applied from the Collection
Account when full cash dominion is in effect (which shall be applied in accordance with Section
2.10(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 ratably
first, to pay any fees, indemnities, or expense reimbursements including amounts then due
to the Administrative Agent and the Issuing Bank from the Borrowers (other than in connection with
Banking Services or Swap Obligations), second, to pay any fees or expense reimbursements
then due to the Lenders from the Borrowers (other than in connection with Banking Services or Swap
Obligations), third, to pay interest due in respect of the and] Protective Advances,
fourth, to pay the principal of the Protective Advances, fifth, to pay interest
then due and payable on the Loans (other than the Protective Advances) ratably, sixth, to
prepay principal on the Loans (other than the Protective Advances) and unreimbursed LC
Disbursements ratably (with amounts applied to the Term Loans applied to installments of the Term
Loans in inverse order of maturity), seventh, to pay an amount to the Administrative Agent
equal to one hundred five percent (105%) of the aggregate undrawn face amount of all outstanding
Letters of Credit and the aggregate amount of any unpaid LC Disbursements, to be held as cash
collateral for such Obligations, eighth, to payment of any amounts owing with respect to
Banking Services and Swap Obligations, and ninth, to the payment of any other Secured
Obligation due to the Administrative Agent or any Lender by the Borrowers]. Notwithstanding
anything to the contrary contained in this Agreement, unless so directed by the Borrower
Representative, or unless a Default is in existence, neither the Administrative Agent nor any
Lender shall apply any payment which it receives to any Eurodollar Loan of a Class, except (a) on
the expiration date of the Interest Period applicable to any such Eurodollar 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 such event, the Borrowers shall pay the break funding payment required in accordance with
Section 2.16. 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, without limitation, 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 Representative pursuant to Section 2.03 or a deemed request as provided in
this Section or may be deducted from any deposit account of any Borrower maintained with the
Administrative Agent. Each 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
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, but such a Borrowing may only
constitute a Protective Advance if it is to reimburse costs, fees and expenses as described in
Section 9.03) and that all such Borrowings shall be deemed to have been requested pursuant to
Sections 2.03, 2.04 or 2.05, as applicable and (ii) the Administrative Agent to charge any deposit
account of any 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 participations in
LC Disbursements resulting 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 Borrowers 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, other than to the Borrowers or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply). Each 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 such Borrower
rights of set-off and counterclaim with respect to such participation as fully as if such Lender
were a direct creditor of such Borrower in the amount of such participation.



(e) Unless the Administrative Agent shall have received notice from the Borrower
Representative 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 Borrowers will not make such payment,
the Administrative Agent may assume that the Borrowers have 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 Borrowers have 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 pursuant to
Section 2.05, 2.06(d) or (e), 2.07(b), 2.18(e) or 9.03(c), then the Administrative Agent may, in
its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter
received by the Administrative Agent for the account of such Lender to satisfy such Lender’s
obligations under such Sections until all such unsatisfied obligations are fully paid.



SECTION 2.19. Mitigation Obligations; Replacement of Lenders.



(a) If any Lender requests compensation under Section 2.15, or if the Borrowers are required
to pay any additional amount to any Lender or any Governmental Authority for the account of any
Lender pursuant to Section 2.17, then 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 2.15 or 2.17, 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. The
Borrowers hereby agree to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment).



(b) If any Lender requests compensation under Section 2.15, or if the Borrowers are required
to pay any additional amount to any Lender or any Governmental Authority for the account of any
Lender) pursuant to Section 2.17, or if any Lender becomes a Defaulting Lender, then the Borrowers
may, at their sole expense and effort, upon notice to such Lender and the Administrative Agent,
require such Lender 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 Borrowers 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 or delayed, (ii) such
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 Borrowers (in the case of all other amounts) and
(iii) in the case of any such assignment resulting from a claim for compensation under Section 2.15
or payments required to be made pursuant to Section 2.17, such assignment will result in a
reduction in such compensation or payments. A 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 Borrowers to require such assignment and delegation cease to apply.



SECTION 2.20. Defaulting Lenders. Notwithstanding any provision of this Agreement to
the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply
for so long as such Lender is a Defaulting Lender.



(a) fees shall cease to accrue on the unfunded portion of the Revolving Commitment of such
Defaulting Lender pursuant to Section 2.12(a);



(b) the Commitment and Revolving Credit Exposure of such Defaulting Lender shall not be
included in determining whether all Lenders or the Required Lenders have taken or may take any
action hereunder (including any consent to any amendment or waiver pursuant to Section 9.02),
provided that any waiver, amendment or modification requiring the consent of all Lenders or each
affected Lender which affects such Defaulting Lender differently than other affected Lenders shall
require the consent of such Defaulting Lender;



(c) if any Swingline Exposure or LC Exposure exists at the time a Lender becomes a Defaulting
Lender then:




(i) all or any part of such Swingline Exposure and LC Exposure shall be
reallocated among the non-Defaulting Lenders in accordance with their respective Applicable
Percentages but only to the extent (x) the sum of all non-Defaulting Lenders’ Revolving
Credit Exposures plus such Defaulting Lender’s Swingline Exposure and LC Exposure does not
exceed the total of all non-Defaulting Lenders’ Revolving Commitments and (y) the conditions
set forth in Section 4.02 are satisfied at such time; and




(ii) if the reallocation described in clause (i) above cannot, or can only partially,
be effected, the Borrowers shall within one Business Day following notice by the
Administrative Agent (x) first, prepay such Swingline Exposure and (y) second, cash
collateralize such Defaulting Lender’s LC Exposure (after giving effect to any partial
reallocation pursuant to clause (i) above) in accordance with the procedures set forth in
Section 2.06(j) for so long as such LC Exposure is outstanding;




(iii) if the Borrowers cash collateralize any portion of such Defaulting Lender’s LC
Exposure pursuant to Section 2.20(c), the Borrowers shall not be required to pay any fees to
such Defaulting Lender pursuant to Section 2.12(b) with respect to such Defaulting Lender’s
LC Exposure during the period such Defaulting Lender’s LC Exposure is cash collateralized;




(iv) if the LC Exposure of the non-Defaulting Lenders is reallocated pursuant to
Section 2.20(c), then the fees payable to the Lenders pursuant to Section 2.12(a) and
Section 2.12(b) shall be adjusted in accordance with such non-Defaulting Lenders’ Applicable
Percentages; or




(v) if any Defaulting Lender’s LC Exposure is neither cash collateralized nor
reallocated pursuant to Section 2.20(c), then, without prejudice to any rights or remedies
of the Issuing Bank or any Lender hereunder, all facility fees that otherwise would have
been payable to such Defaulting Lender (solely with respect to the portion of such
Defaulting Lender’s Commitment that was utilized by such LC Exposure) and letter of credit
fees payable under Section 2.12(b) with respect to such Defaulting Lender’s LC Exposure
shall be payable to the Issuing Bank until such LC Exposure is cash collateralized and/or
reallocated;



(d) so long as any Lender is a Defaulting Lender, the Issuing Bank shall not be required to
issue, amend or increase any Letter of Credit, unless it is satisfied that the related exposure
will be 100% covered by the Commitments of the non-Defaulting Lenders and/or cash collateral will
be provided by the Borrowers in accordance with Section 2.20(c), and participating interests in any
such newly issued or increased Letter of Credit or newly made Swingline Loan shall be allocated
among non-Defaulting Lenders in a manner consistent with Section 2.20(c)(i) (and Defaulting Lenders
shall not participate therein); and



(e) any amount payable to such Defaulting Lender hereunder (whether on account of principal,
interest, fees or otherwise and including any amount that would otherwise be payable to such
Defaulting Lender pursuant to Section 2.18(d) but excluding Section 2.19(b)) shall, in lieu of
being distributed to such Defaulting Lender, be retained by the Administrative Agent in a
segregated account and, subject to any applicable requirements of law, be applied at such time or
times as may be determined by the Administrative Agent (i) first, to the payment of any amounts
owing by such Defaulting Lender to the Administrative Agent hereunder, (ii) second, pro rata, to
the payment of any amounts owing by such Defaulting Lender to the Issuing Bank or Swingline Lender
hereunder, (iii) third, if so determined by the Administrative Agent or requested by an Issuing
Bank or Swingline Lender, to be held in such account as cash collateral for future funding
obligations of the Defaulting Lender of any participating interest in any Swingline Loan or Letter
of Credit, (iv) fourth, to the funding of any Loan in respect of which such Defaulting Lender has
failed to fund its portion thereof as required by this Agreement, as determined by the
Administrative Agent, (v) fifth, if so determined by the Administrative Agent and the Borrower
Representative, held in such account as cash collateral for future funding obligations of the
Defaulting Lender of any Loans under this Agreement, (vi) sixth, to the payment of any amounts
owing to the Lenders or an Issuing Bank or Swingline Lender as a result of any judgment of a court
of competent jurisdiction obtained by any Lender or such Issuing Bank or Swingline Lender against
such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this
Agreement, (vii) seventh, to the payment of any amounts owing to the Borrowers as a result of any
judgment of a court of competent jurisdiction obtained by the Borrowers against such Defaulting
Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement, and
(viii) eighth, to such Defaulting Lender or as otherwise directed by a court of competent
jurisdiction; provided that if such payment is (x) a prepayment of the principal amount of any
Loans or reimbursement obligations in respect of LC Disbursements for which a Defaulting Lender has
funded its participation obligations and (y) made at a time when the conditions set forth in
Section 4.02 are satisfied, such payment shall be applied solely to prepay the Loans of, and
reimbursement obligations owed to, all non-Defaulting Lenders pro rata prior to being applied to
the prepayment of any Loans, or reimbursement obligations owed to, any Defaulting Lender.



In the event that the Administrative Agent, the Borrowers, the Issuing Bank and the Swingline
Lender each agrees that a Defaulting Lender has adequately remedied all matters that caused such
Lender to be a Defaulting Lender, then the Swingline Exposure and LC Exposure of the Lenders shall
be readjusted to reflect the inclusion of such Lender’s Revolving Commitment and on such date such
Lender shall purchase at par such of the Loans of the other Lenders (other than Swingline Loans) as
the Administrative shall determine may be necessary in order for such Lender to hold such Loans in
accordance with its Applicable Percentage.



SECTION 2.21. 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 or proceeds to any Person because such payment or
application of proceeds is invalidated, declared fraudulent, set aside, determined to be void or
voidable as a preference, impermissible setoff, or a diversion of trust funds, or for any other
reason, then the Obligations or part thereof intended to be satisfied shall be revived and
continued and this Agreement shall continue in full force as if such payment or proceeds had not
been received by the Administrative Agent or such Lender. The provisions of this Section 2.21
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 or application of proceeds. The
provisions of this Section 2.21 shall survive the termination of this Agreement.



ARTICLE III




Representations and Warranties




Each Loan Party represents and warrants to the Lenders that:



SECTION 3.01. Organization; Powers. Each of the Loan Parties and each of its
Subsidiaries 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 is qualified to do business in, and is in good standing in, every jurisdiction
where such qualification is required.



SECTION 3.02. Authorization; Enforceability. The Transactions are within each Loan
Party’s organizational powers and have been duly authorized by all necessary organizational actions
and, if required, actions by equity holders. The Loan Documents to which each Loan Party is a
party have been duly executed and delivered by such Loan Party and constitute a legal, valid and
binding obligation of such Loan Party, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other 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 3.03. Governmental 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, 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, (c)
will not violate or result in a default under any indenture, agreement or other instrument binding
upon any Loan Party or any of its Subsidiaries 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, 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, except Liens created pursuant to the Loan Documents.



SECTION 3.04. Financial Condition; No Material Adverse Change. (a) The Company has
heretofore furnished to the Lenders its consolidated balance sheet and statements of income,
stockholders equity and cash flows (i) as of and for the fiscal year ended December 31, 2008,
reported on by independent public accountants, and (ii) as of and for the fiscal quarter and the
portion of the fiscal year ended September 30, 2009 certified by its chief financial officer. Such
financial statements present fairly, in all material respects, the financial position and results
of operations and cash flows of the Company and its consolidated Subsidiaries as of such dates and
for such periods in accordance with GAAP, subject to year-end audit adjustments and the absence of
footnotes in the case of the statements referred to in clause (ii) above.



(b) No event, change or condition has occurred that has had, or could reasonably be expected
to have, a Material Adverse Effect, since September 30, 2009.



SECTION 3.05. Properties. (a) As of the date of this Agreement, Schedule
3.05 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 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 date of this Agreement, is set
forth on Schedule 3.05, 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.



SECTION 3.06. 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 that seeks a monetary
recovery against a Loan Party or any of its Subsidiaries in excess of $100,000 as determined by
such Loan Party in its reasonable discretion or knows of any basis for any Environmental Liability
that would result in a monetary recovery against a Loan Party or any of its Subsidiaries in excess
of $100,000 as determined by such Loan Party in its reasonable discretion 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 date of this Agreement, 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 3.07. Compliance with Laws and Agreements. Each Loan Party and its
Subsidiaries is 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 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 3.08. 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 3.09. Taxes. Each Loan Party and its Subsidiaries has 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 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 3.10. 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.



SECTION 3.11. Disclosure. Each 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 information furnished by or on behalf of the any Loan Party to the Administrative 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 projected financial information, the Borrowers represent 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 3.12. Material Agreements. All material agreements and contracts to which
any Loan Party is a party or is bound as of the date of this Agreement are listed on Schedule
3.12. No Loan Party is in default in the performance, observance or fulfillment of any of the
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 Material Indebtedness.



SECTION 3.13. Solvency.



(a) Immediately after the consummation of the Transactions to occur on the Effective Date,
(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 3.14. Insurance. Schedule 3.14 sets forth a description of all
insurance maintained by or on behalf of the Loan Parties and the Subsidiaries as of the Effective
Date. As of the Effective Date, all premiums in respect of such insurance have been paid. The
Borrowers believe that the insurance maintained by or on behalf of the Company and its Subsidiaries
is adequate.



SECTION 3.15. Capitalization and Subsidiaries. Schedule 3.15 sets forth (a) a
correct and complete list of the name and relationship to the Company of each and all of the
Company’s Subsidiaries, (b) a true and complete listing of each class of each of the Borrowers’
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 by the Persons identified on
Schedule 3.15, and (c) the type of entity of the Company and each of its Subsidiaries. All
of the issued and outstanding Equity Interests owned by any Loan Party has been (to the extent such
concepts are relevant with respect to such ownership interests) duly authorized and issued and is
fully paid and non-assessable.



SECTION 3.16. Security Interest in Collateral. The provisions of this Agreement and
the other Loan Documents create legal and valid Liens on all the Collateral in favor of the
Administrative Agent, for the benefit of the Administrative Agent and the Lenders, 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 Administrative Agent
pursuant to any applicable law or agreement, (b) existing Liens set forth in Schedule 6.02,
and (c) Liens perfected only by possession (including possession of any certificate of title) to
the extent the Administrative Agent has not obtained or does not maintain possession of such
Collateral.



SECTION 3.17. Employment Matters. As of the Effective Date, there are no strikes,
lockouts or slowdowns against any Loan Party or any Subsidiary pending or, to the knowledge of the
Borrowers, threatened. The hours worked by and payments made to employees of the Loan Parties and
the 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 Subsidiary, or for which any claim may be made against any Loan Party or any
Subsidiary, 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 the Loan Party or such Subsidiary.



SECTION 3.18. Common Enterprise. The successful operation and condition of each of
the Loan Parties is dependent on the continued successful performance of the functions of the group
of the Loan Parties as a whole and the successful operation of each of the Loan Parties
collectively is dependent on the successful performance and operation of each other Loan Party
collectively. Each Loan Party expects to derive benefit (and its board of directors or other
governing body has determined that it may reasonably be expected to derive benefit), directly and
indirectly, from (i) successful operations of each of the other Loan Parties collectively and (ii)
the credit extended by the Lenders to the Borrowers hereunder, both in their separate capacities
and as members of the group of companies. Each Loan Party has determined that execution, delivery,
and performance of this Agreement and any other Loan Documents to be executed by such Loan Party is
within its purpose, will be of direct and indirect benefit to such Loan Party, and is in its best
interest.



ARTICLE IV




Conditions




SECTION 4.01. Effective Date. The obligations of the Lenders to make Loans and of
the Issuing Bank to issue Letters of Credit hereunder shall not become effective until the date on
which each of the following conditions is satisfied (or waived in accordance with Section 9.02):




(a) Credit Agreement and Loan Documents. The Administrative Agent (or its
counsel) shall have received (i) from each party hereto either (A) a counterpart of this
Agreement signed on behalf of such party or (B) written evidence satisfactory to the
Administrative Agent (which may include facsimile transmission of a signed signature page of
this Agreement) that such party has signed a counterpart of this Agreement and (ii) duly
executed copies of the Loan Documents and 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, including any
promissory notes requested by a Lender pursuant to Section 2.10 payable to the order of each
such requesting Lender and a written opinion of the Loan Parties’ counsel, addressed to the
Administrative Agent, the Issuing Bank and the Lenders in substantially the form of
Exhibit B.




(b) Financial Statements and Projections. The Lenders shall have received (i)
audited consolidated financial statements of December 31, 2008 fiscal year, (ii) unaudited
interim consolidated financial statements of September 30, 2009 for each fiscal quarter
ended after the date of the latest applicable financial statements delivered pursuant to
clause (i) of this paragraph as to which such financial statements are available, and such
financial statements shall not, in the reasonable judgment of the Administrative Agent,
reflect any material adverse change in the consolidated financial condition of Borrowers and
(iii) satisfactory projections through 2010.




(c) Closing Certificates; Certified Certificate of Incorporation; 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 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 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) No Default Certificate. The Administrative Agent shall have received a
certificate, signed by the chief financial officer of each Borrower and each other Loan
Party, on the initial Borrowing date (i) stating that no Default has occurred and is
continuing, (ii) stating that the representations and warranties contained in Article III
are true and correct as of such date, and (iii) certifying any 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. All
such amounts will be paid with proceeds of Loans made on the Effective Date and will be
reflected in the funding instructions given by the Borrower Representative to the
Administrative Agent on or before the Effective Date.




(f) Lien Searches. The Administrative Agent shall have received the results of
a recent lien search in each of the jurisdictions where assets of the Loan Parties are
located, and such search 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 Administrative
Agent.




(g) Pay-Off Letter. The Administrative Agent shall have received satisfactory
pay-off letters for all existing Indebtedness to be repaid from the proceeds the initial
Borrowing, confirming that all Liens upon any of the property of the Loan Parties
constituting Collateral will be terminated concurrently with such payment and all letters of
credit issued or guaranteed as part of such Indebtedness shall have been cash collateralized
or supported by a Letter of Credit.




(h) Funding Accounts. The Administrative Agent shall have received a notice
setting forth the deposit account(s) of the Borrowers (the “Funding Accounts”) to
which the Lender is authorized by the Borrowers to transfer the proceeds of any Borrowings
requested or authorized pursuant to this Agreement.




(i) Customer List. The Administrative Agent shall have received a true and
complete Customer List.




(j) Collateral Access and Control Agreements. The Administrative Agent shall
have received each (i) Collateral Access Agreement required to be provided pursuant to
Section 4.13 of the Security Agreement and (ii) Deposit Account Control Agreement required
to be provided pursuant to Section 4.14 of the Security Agreement.




(k) Solvency. The Administrative Agent shall have received a solvency
certificate from a Financial Officer.




(l) Borrowing Base Certificate. The Administrative Agent shall have received a
Borrowing Base Certificate which calculates the Borrowing Base as of the end of the week
immediately preceding the Effective Date. The Administrative Agent shall have also received
a Borrowing Base Certificate from the Borrower Representative which calculates the Borrowing
Base as of the end of the week immediately preceding the Effective Date.




(m) Closing Availability. After giving effect to all Borrowings to be made on
the Effective Date and the issuance of any Letters of Credit on the Effective Date and
payment of all fees and expenses due hereunder, and with all of the Loan Parties’
indebtedness, liabilities, and obligations current, the Borrowers’ Availability shall not be
less than $14,000,000.




(n) Reserved.




(o) Pledged Stock; Stock Powers; Pledged Notes. The Administrative Agent shall
have received (i) the certificates representing the shares of Capital Stock 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 pledgor thereof and (ii) each
promissory note (if any) pledged to the Administrative Agent pursuant to the Security
Agreement endorsed (without recourse) in blank (or accompanied by an executed transfer form
in blank) by the pledgor thereof.




(p) Filings, Registrations and Recordings. Each document (including any
Uniform Commercial Code financing statement) required by the Collateral Documents or under
law or reasonably requested by the Administrative Agent to be filed, registered or recorded
in order to create in favor of the Administrative Agent, for the benefit of the Lenders, a
perfected Lien on the Collateral described therein, prior and superior in right to any other
Person (other than with respect to Liens expressly permitted by Section 6.02), shall be in
proper form for filing, registration or recordation.




(q) Reserved.




(r) Reserved.




(s) Reserved.




(t) Reserved.




(u) Insurance. The Administrative Agent shall have received evidence of
insurance coverage in form, scope, and substance reasonably satisfactory to the
Administrative Agent and otherwise in compliance with the terms of Section 5.09 and Section
4.12 of the Security Agreement.




(v) Letter of Credit Application. The Administrative Agent shall have received
a properly completed letter of credit application if the issuance of a Letter of Credit will
be required on the Effective Date. The Borrowers shall have executed the Issuing Bank’s
master agreement for the issuance of commercial Letters of Credit.




(w) Other Documents. The Administrative Agent shall have received such other
documents as the Administrative Agent, the Issuing Bank, any Lender or their respective
counsel may have reasonably requested.



The Administrative Agent shall notify the Borrowers and the Lenders of the Effective Date, and such
notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the
Lenders to make Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not become
effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 9.02)
at or prior to 2:00 p.m., Chicago time, on March 5, 2010 (and, in the event such conditions are not
so satisfied or waived, the Commitments shall terminate at such time).



SECTION 4.02. 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) The representations and warranties of the Borrowers set forth in this Agreement
shall be true and correct on and as of the date of such Borrowing or the date of issuance,
amendment, renewal or extension of such Letter of Credit, as applicable.




(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, no
Default shall have occurred and be continuing.




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



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 Borrowers on the date thereof as to the
matters specified in paragraphs (a), (b) and (c) of this Section.



Notwithstanding the failure to satisfy the conditions precedent set forth in paragraphs (a) or (b)
of this Section, unless otherwise directed by the Required Lenders, the Administrative Agent may,
but shall have no obligation to, continue to make Loans and an Issuing Bank may, but shall have no
obligation to, issue or cause to be issued any Letter of Credit for the ratable account and risk of
Lenders from time to time if the Administrative Agent believes that making such Loans or issuing or
causing to be issued any such Letter of Credit is in the best interests of the Lenders.



ARTICLE V




Affirmative Covenants




Until the Commitments have expired or been terminated and the principal of and interest on
each Loan and all fees payable hereunder shall have been paid in full and all Letters of Credit
shall have expired or terminated and all LC Disbursements shall have been reimbursed, each Loan
Party executing this Agreement covenants and agrees, jointly and severally with all of the Loan
Parties, with the Lenders that:



SECTION 5.01. Financial Statements; Borrowing Base and Other Information. The
Borrowers will furnish to the Administrative Agent and each Lender:




(a) within 90 days after the end of each fiscal year of the Company, 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 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 Company and its
consolidated 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 the
Company, 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 of) the previous fiscal year, all certified by one of the Financial
Officers of the Borrower Representative as presenting fairly in all material respects the
financial condition and results of operations of the Company and its consolidated
Subsidiaries on a consolidated basis 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 of the Company, (i) 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 of) the previous fiscal year, all certified by one of its Financial Officers as
presenting fairly in all material respects the financial condition and results of operations
of the Company and its consolidated Subsidiaries on a consolidated basis in accordance with
GAAP consistently applied, subject to normal year-end audit adjustments and the absence of
footnotes, and (ii) a detailed listing of all intercompany loans made by the Borrowers
during such calendar month;




(d) concurrently with any delivery of financial statements under clause (a) or (b) or
(c) above, a certificate of a Financial Officer of the Borrower Representative in
substantially the form of Exhibit D (i) certifying, in the case of the financial
statements delivered under clause (b) or (c), as presenting fairly in all material respects
the financial condition and results of operations of the Company and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject
to normal year-end audit adjustments and the absence of footnotes, (ii) 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,
(iii) concurrently with any delivery of financial statements under clause (a) or
(b), setting forth reasonably detailed calculations demonstrating compliance with
Section 6.13 and (iv) stating whether any change in GAAP or in the application thereof has
occurred since the date of the audited financial statements referred to in Section 3.04 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 more than 30 days prior to the end of
each fiscal year of the Company, a copy of the plan and forecast (including a projected
consolidated and consolidating balance sheet, income statement and funds flow statement) of
the Company for each month of the upcoming fiscal year (the “Projections”) in form
reasonably satisfactory to the Administrative Agent;




(g) as soon as available but in any event within 15 days of the end of each calendar
month (provided, however, in the event Borrower’s Availability minus the
Availability Block is less then $5,500,000 such reporting shall be delivered within 3 days
of the end of each calendar week), and at such other times as may be necessary to
re-determine availability of Advances hereunder or as may be requested by the Administrative
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 of the end of each calendar
month (provided, however, in the event Borrower’s Availability minus the
Availability Block is less then $5,500,000 such reporting shall be delivered within 3 days
of the end of each calendar week), and at such other times as may be requested by the
Administrative Agent, as of the period then ended, all delivered electronically in a text
formatted file acceptable to the Administrative Agent:




(i) a detailed aging of the Borrowers’ 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 Administrative Agent, together with a summary
specifying the name, and balance due for each Account Debtor;




(ii) a schedule detailing the Borrowers’ Inventory, in form satisfactory to the
Administrative 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 Administrative Agent has previously indicated to the Borrower Representative are
deemed by the Administrative Agent to be appropriate, (2) including a report of any
variances or other results of Inventory counts performed by the Borrowers since the
last Inventory schedule (including information regarding sales or other reductions,
additions, returns, credits issued by Borrowers and complaints and claims made
against the Borrowers), and (3) reconciled to the Borrowing Base Certificate
delivered as of such date;




(iii) a worksheet of calculations prepared by the Borrowers 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 Borrowers’ Accounts and Inventory between the
amounts shown in the Borrowers’ general ledger and financial statements and the
reports delivered pursuant to clauses (i) and (ii) above; and




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




(i) as soon as available but in any event within 15 days of the end of each calendar
month and at such other times as may be requested by the Administrative Agent, as of the
month then ended, a schedule and aging of the Borrowers’ accounts payable, delivered
electronically in a text formatted file acceptable to the Administrative Agent;




(j) within 30 days of each March 31 and September 30, an updated customer list for each
Borrower and its Subsidiaries, which list shall state the customer’s name, mailing address
and phone number and shall be certified as true and correct by a Financial Officer of the
Borrower Representative, delivered electronically in a text formatted file acceptable to the
Administrative Agent;




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




(i) copies of invoices in connection with the invoices issued by the
Borrowers 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;
and




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




(l) as soon as available but in any event within 3 days of the end of each calendar
week and at such other times as may be requested by the Administrative Agent, as of the
period then ended, the Borrowers’ sales journal, cash receipts journal (identifying trade
and non-trade cash receipts) and debit memo/credit memo journal;




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




(n) Reserved;




(o) concurrently with any delivery of financial statements under clause (c) above, a
detailed listing of all advances of proceeds of Loans requested by the Borrower
Representative for each Borrower during the immediately preceding calendar month during such
calendar month;




(p) within 30 days of the first Business Day of each (i) March and September, a
certificate of good standing for each Borrower and (ii) March, a certificate of good
standing for each Loan Guarantor, in each case from the appropriate governmental officer in
its jurisdiction of incorporation, formation, or organization;




(q) promptly after the same become publicly available, copies of all periodic and
other reports, proxy statements and other materials filed by any Borrower or any Subsidiary
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 any Borrower to its shareholders generally, as the case may be; and




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



SECTION 5.02. Notices of Material Events. The Borrowers 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 $1,000,000, (ii) seeks injunctive relief that, if granted, could reasonably be expected
to have a Material Adverse Effect, (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 law regarding, or seeks remedies in connection with, any Environmental
Laws that, if proven, could reasonably be expected to have a Material Adverse Effect, (vi)
contests any tax, fee, assessment, or other governmental charge in excess of $1,000,000, or
(vii) involves any product recall that, if effected, could reasonably be expected to have a
Material Adverse Effect;




(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 Material Contracts, together with a copy of each such
amendment;




(g) Reserved.




(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
Borrowers and their Subsidiaries in an aggregate amount exceeding $1,000,000; 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 Representative setting forth the details of the event or
development requiring such notice and any action taken or proposed to be taken with respect
thereto.



SECTION 5.03. Existence; Conduct of Business. Each Loan Party will, and will cause
each Subsidiary 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 rights, qualifications, licenses, permits,
franchises, governmental authorizations, intellectual property rights, 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
Subsidiary 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) the failure to make payment pending such contest could not
reasonably be expected to result in a Material Adverse Effect.



SECTION 5.05. Maintenance of Properties. Each Loan Party will, and will cause each
Subsidiary 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 Subsidiary 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 Administrative Agent or any Lender
(including employees of the Administrative Agent, any Lender or any consultants, accountants,
lawyers and appraisers retained by the Administrative Agent), 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. The Loan Parties acknowledge that the
Administrative 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
Subsidiary to, comply with all material Requirements of Law applicable to it or its property.



SECTION 5.08. Use of Proceeds. The proceeds of the Loans will be used only for : (a)
the initial Loan shall be used to repay in full the Borrowers’ existing asset based revolving
credit facility and (b) thereafter, to finance the ongoing working capital needs of the Borrowers
for general corporate purposes in the ordinary course of business. No part of the proceeds of any
Loan and no Letter of Credit will be used, whether 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 Subsidiary 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; and general
liability) 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 and (b) all
insurance required pursuant to the Collateral Documents. The Borrowers will furnish to the
Lenders, upon request of the Administrative Agent, information in reasonable detail as to the
insurance so maintained.



SECTION 5.10. Casualty and Condemnation. The Borrowers (a) will furnish to 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. Appraisals. At any time that the Administrative Agent requests, the
Borrowers and the Subsidiaries will provide the Administrative Agent with appraisals or updates
thereof of their Inventory, Equipment and real property from an appraiser selected and engaged by
the Administrative Agent, and prepared on a basis satisfactory to the Administrative Agent, such
appraisals and updates to include, without limitation, information required by applicable law and
regulations; provided, however, if no Event of Default has occurred and is continuing, no more than
two such appraisals of Inventory and one such appraisal of Equipment per calendar year shall be at
the sole expense of the Loan Parties; provided, further, if the principal balance of the Term Loan
is reduced below $5,000,000, the Administrative Agent may, in its sole discretion, waive the
appraisal for Equipment.



SECTION 5.12. Depository Banks. The Borrowers and their Subsidiaries will maintain
the Administrative Agent as its principal depository bank, including for the maintenance of
operating, administrative, cash management, collection activity, and other deposit accounts for the
conduct of its business; provided, however, that Borrowers and their Subsidiaries
may maintain zero-balance accounts for the purpose of managing local disbursements and may maintain
payroll, withholding tax and other fiduciary accounts, in each case as accounts which are not
subject to control agreements in favor of the Administrative Agent for the benefit of the Lenders,
provide that the aggregate value of such accounts does not exceed $3,000,000 at any time.



SECTION 5.13. Additional Collateral; Further Assurances. (a) Subject to applicable
law, each Borrower and each Subsidiary that is a Loan Party shall cause each of its Subsidiaries
formed or acquired after the date of this Agreement in accordance with the terms of this Agreement
to become a Borrower or a guarantor, as applicable, by executing the Joinder Agreement set forth as
Exhibit E hereto (the “Joinder Agreement”). Upon execution and delivery thereof,
each such Person (i) shall automatically become a Loan Party and a Loan 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 Administrative Agent, for the benefit of the
Administrative Agent and the Lenders, in any property of such Loan Party which constitutes
Collateral, including any parcel of real property located in the U.S. owned by any Loan Party.



(b) Each Borrower and each Subsidiary that is a Loan Party will cause (i) 100% of the issued
and outstanding Equity Interests of each of its domestic Subsidiaries and (ii) 65% of the issued
and outstanding Equity Interests entitled to vote (within the meaning of Treas. Reg. Section
1.956-2(c)(2)) and 100% of the issued and outstanding Equity Interests not entitled to vote (within
the meaning of Treas. Reg. Section 1.956-2(c)(2) in each foreign Subsidiary directly owned by the
Borrower or any domestic Subsidiary to be subject at all times to a first priority, perfected Lien
in favor of the Administrative Agent pursuant to the terms and conditions of the Loan Documents or
other security documents as the Administrative Agent shall reasonably request.



(c) Without limiting the foregoing, each Loan Party will, and will cause each Subsidiary to,
execute and deliver, or cause to be executed and delivered, to the Administrative 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
4.01, as applicable), which may be required by law or which the Administrative 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.



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



ARTICLE VI




Negative Covenants




Until the Commitments have expired or terminated and the principal of and interest on each
Loan and all fees, expenses and other amounts payable under any Loan Document have been paid in
full and all Letters of Credit have expired or terminated and all LC Disbursements shall have been
reimbursed, the Loan Parties covenant and agree, jointly and severally, with the Lenders that:



SECTION 6.01. Indebtedness. No Loan Party will, nor will it permit any Subsidiary
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 extensions, renewals and replacements of any such Indebtedness in accordance with clause
(f) hereof;




(c) Indebtedness of any Borrower to any Subsidiary and of any Subsidiary to any
Borrower or any other Subsidiary, provided that (i) Indebtedness of any Subsidiary
that is not a Loan Party to any Borrower or any Subsidiary that is a Loan Party shall be
subject to Section 6.04 and (ii) Indebtedness of any Borrower to any Subsidiary and
Indebtedness of any Subsidiary that is a Loan Party to any Subsidiary that is not a Loan
Party shall be subordinated to the Secured Obligations on terms reasonably satisfactory to
the Administrative Agent;




(d) Guarantees by any Borrower of Indebtedness of any Subsidiary and by any Subsidiary
of Indebtedness of any Borrower or any other Subsidiary, provided that (i) the
Indebtedness so Guaranteed is permitted by this Section 6.01, (ii) Guarantees by any
Borrower or any Subsidiary that is a Loan Party of Indebtedness of any Subsidiary that is
not a Loan Party shall be subject to Section 6.04 and (iii) Guarantees permitted under this
clause (d) shall be subordinated to the Secured Obligations of the applicable Subsidiary on
the same terms as the Indebtedness so Guaranteed is subordinated to the Secured Obligations;




(e) Indebtedness of any Borrower or any Subsidiary incurred to finance the acquisition,
construction or improvement of any fixed or capital assets (whether or not constituting
purchase money Indebtedness), including Capital Lease Obligations and any Indebtedness
assumed in connection with the acquisition of any such assets or secured by a Lien on any
such assets prior to the acquisition thereof, and extensions, renewals and replacements of
any such Indebtedness in accordance with clause (f) hereof; provided that (i) such
Indebtedness is incurred prior to or within 90 days after such acquisition or the completion
of such construction or improvement and (ii) the aggregate principal amount of Indebtedness
permitted by this clause (e) shall not exceed $5,000,000 at any time outstanding;




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




(g) 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;




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




(i) Indebtedness of any Person that becomes a Subsidiary after the date hereof;
provided that (i) such Indebtedness exists at the time such Person becomes a
Subsidiary and is not created in contemplation of or in connection with such Person becoming
a Subsidiary and (ii) the aggregate principal amount of Indebtedness permitted by this
clause (i) shall not exceed $$5,000,000 at any time outstanding;




(j) Trade Deposits; and




(k) other unsecured Indebtedness in an aggregate principal amount not exceeding
$5,000,000 at any time outstanding.



SECTION 6.02. Liens. No Loan Party will, nor will it permit any Subsidiary 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 any Borrower or any Subsidiary 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 such Borrower or Subsidiary and (ii) such
Lien shall secure only those obligations which it secures on the date hereof;




(d) Liens on fixed or capital assets acquired, constructed or improved by any Borrower
or any Subsidiary; provided that (i) such security interests secure Indebtedness
permitted by clause (e) of Section 6.01, (ii) such security interests and the Indebtedness
secured thereby are incurred prior to or within 90 days after such acquisition or the
completion of such construction or improvement, (iii) the Indebtedness secured thereby does
not exceed 95% of the cost of acquiring, constructing or improving such fixed or capital
assets and (iv) such security interests shall not apply to any other property or assets of
such Borrower or Subsidiary or any other Borrower or Subsidiary;




(e) any Lien existing on any property or asset (other than Accounts and Inventory)
prior to the acquisition thereof by any Borrower or any Subsidiary or existing on any
property or asset (other than Accounts and Inventory) of any Person that becomes a Loan
Party after the date hereof prior to the time such Person becomes a Loan Party;
provided that (i) such Lien is not created in contemplation of or in connection with
such acquisition or such Person becoming a Loan Party, as the case may be, (ii) such Lien
shall not apply to any other property or assets of the Loan Party and (iii) such Lien shall
secure only those obligations which it secures on the date of such acquisition or the date
such Person becomes a Loan Party, as the case may be;




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




(g) Liens arising out of sale and leaseback transactions permitted by Section 6.06;




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




(i) Liens on materials or goods identifiable to a Trade Deposit in favor of a Person
making such Trade Deposit;



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 clauses (a) and (i) above and (2) Inventory, other than
those permitted under clauses (a) and (b) of the definition of Permitted Encumbrance and clause (a)
above.



SECTION 6.03. Fundamental Changes. (a) No Loan Party will, nor will it permit any
Subsidiary 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 any Borrower may merge into a Borrower in a transaction in which the Borrower
is the surviving corporation, (ii) subject to the Administrative Agent’s consent in its Permitted
Discretion, any Loan Party may merge into any other Loan Party in a transaction in which the
surviving entity is a Borrower, (iii) subject to the Administrative Agent’s consent in its
Permitted Discretion, any Loan Guarantor may merge into any other Loan Guarantor, (iv) any Loan
Party (other than a Borrower) may merge into any Loan Party in a transaction in which the surviving
entity is a Loan Party and (v) any Subsidiary that is not a Loan Party may liquidate or dissolve if
the Borrower which owns such Subsidiary determines in good faith that such liquidation or
dissolution is in the best interests of such Borrower and is not materially disadvantageous to the
Lenders; provided that any such merger involving a Person that is not a wholly owned
Subsidiary 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 types conducted by the Borrowers and their 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 Subsidiary to, purchase, hold or acquire (including pursuant to
any merger with any Person that was not a Loan Party and a wholly owned Subsidiary prior to such
merger) any capital stock, evidences of indebtedness or 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, or 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), except:




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




(b) investments in existence on the date of this Agreement and described in
Schedule 6.04;




(c) investments by the Borrowers and the Subsidiaries in Equity Interests in their
respective Subsidiaries, provided that (A) any such Equity Interests held by a Loan
Party shall be pledged pursuant to the Security Agreement (subject to the limitations
applicable to common stock of a Foreign Subsidiary referred to in Section 5.12) and (B) the
aggregate amount of investments by Loan Parties in Subsidiaries that are not Loan Parties
(together with outstanding intercompany loans permitted under clause (B) to the proviso to
Section 6.04(d) and outstanding Guarantees permitted under the proviso to Section 6.04(e))
shall not exceed $5,000,000 at any time outstanding (in each case determined without regard
to any write-downs or write-offs);




(d) loans or advances made by any Borrower to any Subsidiary and made by any
Subsidiary to any other Borrower or any other Subsidiary, provided that (A) any such
loans and advances made by a Loan Party to a Subsidiary that is not a 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 Loan Parties to Subsidiaries that are not Loan Parties
(together with outstanding investments permitted under clause (B) to the proviso to Section
6.04(c) and outstanding Guarantees permitted under the proviso to Section 6.04(e)) shall not
exceed $5,000,000 at any time outstanding (in each case determined without regard to any
write-downs or write-offs);




(e) Guarantees constituting Indebtedness permitted by Section 6.01, provided
that the aggregate principal amount of Indebtedness of Subsidiaries that are not Loan
Parties that is Guaranteed by any Loan Party shall (together with outstanding investments
permitted under clause (B) to the proviso to Section 6.04(c) and outstanding intercompany
loans permitted under clause (B) to the proviso to Section 6.04(d)) shall not exceed
$5,000,000 at any time outstanding (in each case determined without regard to any
write-downs or write-offs);




(f) loans or advances made by a Loan Party to its employees on an arms-length basis in
the ordinary course of business consistent with past practices for travel and entertainment
expenses, relocation costs and similar purposes up to a maximum of $500,000 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 a 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 Swap Agreements permitted by Section 6.07;




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




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




(k) Acquisitions, provided that (i) no Default or Event of Default exists before or
would exist immediately after giving effect thereto; (ii) the purchase price of the
Acquisition does not exceed $5,000,000 per Acquisition or $10,000,000 per annum; (iii)
Availability minus the Availability Block is $10,000,000 or more at the time of the
Acquisition; and (iv) the Acquisition has a positive impact on EBITDA; and




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



SECTION 6.05. Asset Sales. No Loan Party will, nor will it permit any Subsidiary to,
sell, transfer, lease or otherwise dispose of any asset, including any Equity Interest owned by it,
nor will any Borrower permit any Subsidiary to issue any additional Equity Interest in such
Subsidiary (other than to another Borrower or another Subsidiary 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;




(b) sales, transfers and dispositions to any Borrower or any Subsidiary,
provided that any such sales, transfers or dispositions involving a Subsidiary that
is not a Loan Party 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 Permitted Investments and other investments
permitted by clauses (i) and (k) of Section 6.04;




(e) sale and leaseback transactions permitted by Section 6.06;




(f) 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 any Borrower or any Subsidiary; and




(g) sales, transfers and other dispositions of assets (other than Equity Interests in
a Subsidiary 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 (g) shall not exceed $1,000,000 during any fiscal year of the Borrowers;



provided that all sales, transfers, leases and other dispositions permitted hereby (other
than those permitted by paragraphs (b) and (f) above) 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 Subsidiary 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, except for
any such sale of any fixed or capital assets by any Borrower or any Subsidiary that is made for
cash consideration in an amount not less than the fair value of such fixed or capital asset and is
consummated within 90 days after such Borrower or such Subsidiary acquires or completes the
construction of such fixed or capital asset.



SECTION 6.07. Swap Agreements. No Loan Party will, nor will it permit any
Subsidiary to, enter into any Swap Agreement, except (a) Swap Agreements entered into to hedge or
mitigate risks to which any Borrower or any Subsidiary has actual exposure (other than those in
respect of Equity Interests of any Borrower or any of its Subsidiaries), and (b) Swap Agreements
entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating
rates, from one floating rate to another floating rate or otherwise) with respect to any
interest-bearing liability or investment of any Borrower or any Subsidiary.



SECTION 6.08. Restricted Payments; Certain Payments of Indebtedness. (a) No Loan
Party will, nor will it permit any Subsidiary 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) each Borrower may declare and pay dividends with respect to its common stock
payable solely in additional shares of its common stock, and, with respect to its preferred stock,
payable solely in additional shares of such preferred stock or in shares of its common stock, (ii)
Subsidiaries may declare and pay dividends ratably with respect to their Equity Interests, and
(iii) the Borrowers may make Restricted Payments, not exceeding $1,000,000 during any fiscal year,
pursuant to and in accordance with stock option plans or other benefit plans for management or
employees of the Borrowers and their Subsidiaries.



(b) No Loan Party will, nor will it permit any Subsidiary 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 the Subordinated Indebtedness
prohibited by the subordination provisions thereof;




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




(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; and




(v) payments in the nature of refunds or returns of Trade Deposits.



SECTION 6.09. Transactions with Affiliates. No Loan Party will, nor will it permit
any Subsidiary 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 Borrower or
such Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties,
(b) transactions between or among any Borrower and any Subsidiary that is a Loan Party not
involving any other Affiliate, (c) any investment permitted by Sections 6.04(c) or 6.04(d), (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, (g) the payment of reasonable fees
to directors of any Borrower or any Subsidiary who are not employees of such Borrower or
Subsidiary, and compensation and employee benefit arrangements paid to, and indemnities provided
for the benefit of, directors, officers or employees of the Borrowers or their Subsidiaries in the
ordinary course of business and (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 a Borrower’s board of directors.



SECTION 6.10. Restrictive Agreements. No Loan Party will, nor will it permit any
Subsidiary 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 to pay dividends or other distributions
with respect to any shares of its capital stock or to make or repay loans or advances to any
Borrower or any other Subsidiary or to Guarantee Indebtedness of any Borrower or any other
Subsidiary; 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 or substantially all of the
assets of a Subsidiary pending such sale, provided such restrictions and conditions apply only to
the Subsidiary that is to be sold or the assets of which are to be sold and such sale is permitted
hereunder, (iv) clause (a) of the foregoing 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) of
the foregoing shall not apply to customary provisions in leases and other contracts restricting the
assignment thereof.



SECTION 6.11. Amendment of Material Documents. No Loan Party will, nor will it permit
any Subsidiary to, amend, modify or waive any of its rights under (a)  agreement relating to any
Subordinated Indebtedness, (b) its certificate of incorporation, by-laws, operating, management or
partnership agreement or other organizational documents or (c) the material agreements listed on
Schedule 3.12, to the extent any such amendment, modification or waiver would be adverse to
the Lenders.



SECTION 6.12. Capital Expenditures. The Borrowers will not, nor will it permit any
Subsidiary to, incur or make any Capital Expenditures in excess of $6,500,000 per annum.



SECTION 6.13. Financial Covenants.



(a) Minimum EBITDA. The Borrowers shall have, at the end of each calendar quarter set
forth below, EBITDA for the period then ended of not less than the following:



	 	 	 	 	 
	Period Ending

	 	Minimum EBITDA

	 

	 	 	 	 
	Three months ending March 31, 2010

	 	$	3,236,500	 
	 

	 	 	 	 
	Six months ending June 30, 2010

	 	$	9,331,000	 
	 

	 	 	 	 






(b)           Fixed Charge Coverage Ratio.  Commencing September 30, 2010 and
thereafter, the Borrowers will not permit the Fixed Charge Coverage Ratio, determined for the
trailing twelve month period ending on the last day of each fiscal quarter to be less than
1.10:1.00.



ARTICLE VII




Events of Default




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




(a) the Borrowers 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 Borrowers 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;




(c) any representation or warranty made or deemed made by or on behalf of any Loan
Party or any Subsidiary in or in connection with this Agreement or any Loan Document or 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) any Loan Party shall fail to observe or perform any covenant, condition or
agreement contained in Section 5.02(a), 5.03 (with respect to a Loan Party’s existence) or
5.08 or in Article VI;




(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 Section of this Article), and such failure shall continue unremedied for a period of
(i) 10 days after the earlier of any Loan Party’s knowledge of such breach or notice thereof
from the Administrative Agent (which notice will be given at the request of any Lender) if
such breach relates to terms or provisions of Section 5.01, 5.02 (other than Section
5.02(a)), 5.03 through 5.07, 5.09, 5.10 or 5.12 of this Agreement or (ii) 20 days after the
earlier of any Loan Party’s knowledge of such breach or notice thereof from the
Administrative Agent (which notice will be given at the request of any Lender) if such
breach relates to terms or provisions of any other Section of this Agreement;




(f) any Loan Party or any Subsidiary 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 after any applicable period of notice or
grace;




(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 Subsidiary of any Loan Party 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 Subsidiary of any Loan Party 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 Subsidiary of any Loan Party 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 Subsidiary of any Loan
Party 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 Subsidiary of any Loan Party 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
$1,000,000 (to the extent not covered by independent third-party insurance as to which the
insurer does not dispute coverage) 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 45 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 45 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 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 Loan 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 Loan
Guaranty, or any Loan Guarantor shall fail to comply with any of the terms or provisions of
the Loan Guaranty to which it is a party, or any Loan Guarantor shall deny that it has any
further liability under the Loan Guaranty to which it is a party, 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, in any portion of the Collateral with
an aggregate value in excess of $1,000,000, 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) any Loan Party is criminally indicted or convicted under any law that may
reasonably be expected to lead to a forfeiture of any property of such Loan Party having a
fair market value in excess of $500,000.



then, and in every such event (other than an event with respect to the Borrowers 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 Representative, 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 Borrowers 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 Borrowers; and in case of any event with respect to
the Borrowers 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 Borrowers 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 Borrowers. Upon the occurrence and the continuance of an Event of Default,
the Administrative Agent may, and at the request of the Required Lenders shall, exercise any rights
and remedies provided to the Administrative Agent under the Loan Documents or at law or equity,
including all remedies provided under the UCC.



ARTICLE VIII




The Administrative Agent




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



The bank serving as the Administrative Agent hereunder 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 the
Administrative Agent, and such bank 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 the Administrative Agent hereunder.



The Administrative Agent 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
Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of
whether a Default has occurred and is continuing, (b) the Administrative Agent 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 Administrative 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 Administrative Agent 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
bank serving as Administrative Agent or any of its Affiliates in any capacity. The Administrative
Agent shall not 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. The Administrative Agent shall be deemed not to have knowledge
of any Default unless and until written notice thereof is given to the Administrative Agent by the
Borrower Representative or a Lender, and the Administrative Agent shall not 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 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 IV or elsewhere in any Loan Document, other than to confirm receipt of items
expressly required to be delivered to the Administrative Agent.



The Administrative 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. The
Administrative 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. The Administrative Agent may consult with legal counsel (who may be counsel for the
Borrowers), independent accountants and other experts selected by it, and shall not be liable for
any action taken or not taken by it in accordance with the advice of any such counsel, accountants
or experts.



The Administrative 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 the Administrative Agent. The Administrative
Agent and any such sub-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 the Administrative Agent and any
such sub-agent, and shall apply to their respective activities in connection with the syndication
of the credit facilities provided for herein as well as activities as Administrative Agent.



Subject to the appointment and acceptance of a successor Administrative Agent as provided in
this paragraph, the Administrative Agent may resign at any time by notifying the Lenders, the
Issuing Bank and the Borrower Representative. Upon any such resignation, the Required Lenders
shall have the right, in consultation with the Borrowers, to appoint a successor. If no successor
shall have been so appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Administrative Agent gives notice of its resignation, then the
retiring Administrative Agent may, on behalf of the Lenders and the Issuing Bank, appoint a
successor Administrative Agent which shall be a commercial bank or an Affiliate of any such
commercial bank. Upon the acceptance of its appointment as Administrative Agent hereunder by a
successor, such successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent
shall be discharged from its duties and obligations hereunder. The fees payable by the Borrowers
to a successor Administrative Agent shall be the same as those payable to its predecessor unless
otherwise agreed between the Borrowers and such successor. After the Administrative Agent’s
resignation hereunder, the provisions of this Article, Section 2.17(d) and Section 9.03 shall
continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be taken by any of them
while it was acting as Administrative Agent.



Each Lender acknowledges that it has, independently and without reliance upon the
Administrative 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 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; (b) the Administrative Agent (i) makes no 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
and (ii) shall not be liable for any information contained in any Report; (c) the Reports are not
comprehensive audits or examinations, and that 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
that the Administrative Agent undertakes no 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 Administrative
Agent 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 might obtain all or part of
any Report through the indemnifying Lender.



None of the Lenders identified on the facing page or signature pages of this Agreement as a
“documentation agent” or “arranger”, if any, shall have any right, power, obligation, liability,
responsibility or duty under this Agreement other than those applicable to all Lenders as such.
Without limiting the foregoing, none of the Lenders so identified as a “documentation agent” or
“arranger”, if any, shall have or be deemed to have any fiduciary relationship with any Lender.
Each Lender acknowledges that it has not relied, and will not rely, on any of the Lenders so
identified in deciding to enter into this Agreement or in taking or not taking action hereunder.



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 paragraph (b) below), all notices and
other communications provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by facsimile, as follows:




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





	 	 	 
	Metalico, Inc.

	 	

	186 North Avenue East

	Cranford, New Jersey 07016

	Attention:

Facsimile No:

Email:

	 	Carlos E. Agüero

President

(908) 497-9610










	 	(ii)	 	if to the Administrative Agent, the Issuing Bank or the
Swingline Lender, to JPMorgan Chase Bank, N.A. at:





	 	 	 
	270 Park Avenue

	 	

	New York, New York 10017

	Attention:

Facsimile No:

Email:

	 	Account Executive for Metalico, Inc.

(646) 534-2274










	 	(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 and no Event of Default 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 Representative (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.



(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 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 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 paragraph (b) of this Section, 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 issuance of a Letter of Credit shall not be construed as a
waiver of any Default, regardless of whether the Administrative 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 (i) in the case of this Agreement, pursuant to an
agreement or agreements in writing entered into by the Borrowers and the Required Lenders or, (ii)
in the case of any other Loan Document, pursuant to an agreement or agreements in writing entered
into by the Administrative Agent 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 of any Lender without the written consent of such Lender (provided that the
Administrative Agent may make Protective Advances as set forth in Section 2.04), (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 directly 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 directly affected thereby, (iv) change Section 2.18(b) or (d) in a manner that would alter
the manner in which payments are shared, without the written consent of each Lender, (v) increase
the advance rates set forth in the definition of Borrowing Base, add new categories of eligible
assets, or reduce the Availability Block without the written consent of each Revolving Lender, (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) change Section 2.20,
without the consent of each Lender (other than any Defaulting Lender), (viii) release any Loan
Guarantor from its obligation under its Loan Guaranty (except as otherwise permitted herein or in
the other Loan Documents), without the written consent of each Lender, or (ix) except as provided
in clauses (c) and (d) of this Section or in any Collateral Document, release all or substantially
all of the Collateral, 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 Issuing Bank or the Swingline Lender hereunder without the prior written consent of the
Administrative Agent, the Issuing Bank or the Swingline Lender, as the case may be (it being
understood that any change to Section 2.20 shall require the consent of the Administrative Agent,
the Swingline Lender and the Issuing Bank). The Administrative Agent may also amend the
Commitment Schedule to reflect assignments entered into pursuant to Section 9.04



(c) The Lenders hereby irrevocably authorize the Administrative Agent, at its option and in
its sole discretion, to release any Liens granted to the Administrative Agent by the Loan Parties
on any Collateral (i) upon the termination of the all Commitments, 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 Administrative Agent that the sale or disposition is made in compliance with the
terms of this Agreement (and the Administrative Agent may rely conclusively on any such
certificate, without further inquiry), and to the extent that the property being sold or disposed
of constitutes 100% of the Equity Interest of a Subsidiary, the Administrative Agent is authorized
to release any Loan Guaranty provided by such Subsidiary, (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 Administrative Agent and the Lenders pursuant to
Article VII. Except as provided in the preceding sentence, the Administrative Agent will not
release any Liens on Collateral without the prior written authorization of the Required Lenders;
provided that, the Administrative Agent may in its discretion, release its Liens on
Collateral valued in the aggregate not in excess of $750,000 during any calendar year without the
prior written authorization of the Required Lenders. 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
Borrowers may elect to replace a Non-Consenting Lender as a Lender party to this Agreement,
provided that, concurrently with such replacement, (i) another bank or other entity which
is reasonably satisfactory to the Borrowers 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 and Assumption 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 clause (b) of Section 9.04, and (ii) the Borrowers
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
Borrowers hereunder to and including the date of termination, including without limitation payments
due to such Non-Consenting Lender under Sections 2.15 and 2.17, 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
2.16 had the Loans of such Non-Consenting Lender been prepaid on such date rather than sold to the
replacement Lender.



SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a)  The Borrowers shall pay (i)
all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates,
including the reasonable fees, charges and disbursements of counsel for the Administrative 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 the
Administrative Agent, the Issuing Bank or any Lender, including the fees, charges and disbursements
of any counsel for the Administrative Agent, the Issuing Bank or any Lender, 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 negotiations in respect of such Loans or Letters of Credit. Expenses being
reimbursed by the Borrowers under this Section include, without limiting the generality of the
foregoing, costs and expenses incurred in connection with:




(i) appraisals and insurance reviews;




(ii) field examinations (which field examination fees are currently equal to $125 per
hour per examiner, plus out of pocket expenses) and the preparation of Reports based on the
fees charged by a third party retained by the Administrative Agent or the internally
allocated fees for each Person employed by the Administrative Agent with respect to each
field examination; provided, however, if no Event of Default has occurred and is continuing,
two such appraisals per calendar year shall be at the sole expense of the Loan Parties;




(iii) background checks regarding senior management and/or key investors, as deemed
necessary or appropriate in the sole discretion of the Administrative Agent;




(iv) taxes, fees and other charges for (A) lien searches and (B) filing financing
statements and continuations, and other actions to perfect, protect, and continue the
Administrative Agent’s Liens;




(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.



All of the foregoing costs and expenses may be charged to the Borrowers as Revolving Loans or to
another deposit account, all as described in Section 2.18(c).



(b) The Borrowers shall, jointly and severally, indemnify the Administrative Agent, the
Issuing Bank and each Lender, and each Related Party of any of the foregoing Persons (each such
Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any
and all losses, claims, damages, penalties, incremental taxes, 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 any
Borrower or any of their Subsidiaries, or any Environmental Liability related in any way to any
Borrower or any of their Subsidiaries, (iv) the failure of the Borrowers to deliver to the
Administrative Agent the required receipts or other required documentary evidence with respect to a
payment made by the Borrowers for Taxes pursuant to Section 2.17, or (v) 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 nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee. Notwithstanding anything to the contrary in
this Section 9.03(b), the Borrowers shall not be required to reimburse Lenders (other than
Administrative Agent) for costs and expenses relating to the review and negotiation of the Loan
Documents or any agreement or instrument contemplated thereby.



(c) To the extent that the Borrowers fail to pay any amount required to be paid by it to the
Administrative Agent, the Issuing Bank or the Swingline Lender under paragraph (a) or (b) of this
Section, each Lender severally agrees to pay to the Administrative Agent, the Issuing Bank or the
Swingline Lender, as the case may be, such Lender’s Applicable Percentage (determined as of the
time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid
amount; provided that the unreimbursed expense or indemnified loss, claim, damage, penalty,
liability or related expense, as the case may be, was incurred by or asserted against the
Administrative 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 agreement or instrument contemplated
hereby, 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 promptly after written demand
therefor.



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) no Borrower may 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 a 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 paragraph (c) of this Section) and, to the extent expressly contemplated
hereby, the Related Parties of each of the Administrative Agent, the Issuing Bank and the Lenders)
any legal or equitable right, remedy or claim under or by reason of this Agreement.



(b)(i) Subject to the conditions set forth in paragraph (b)(ii) below, 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 or delayed) of:




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




(B) the Administrative Agent, provided that no 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 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 and Assumption with respect to
such assignment is delivered to the Administrative Agent) shall not be less than $5,000,000
or, in the case of a Term Loan, $1,000,000 unless each of the Borrower Representative and
the Administrative Agent otherwise consent, provided that no such consent of the
Borrower Representative shall be required if an Event of Default has occurred and is
continuing;




(B) each partial assignment shall be made as an assignment of a proportionate part of
all the assigning Lender’s rights and obligations under this Agreement, provided
that this clause shall not be construed to prohibit the assignment of a proportionate part
of all the assigning Lender’s rights and obligations in respect of one Class of Commitments
or Loans; 




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




(D) the assignee, if it shall not be a Lender, shall deliver to the Administrative
Agent an Administrative Questionnaire in which the assignee designates one or more Credit
Contacts to whom all syndicate-level information (which may contain material non-public
information about the Company, the Loan Parties and their Related Parties or their
respective securities) will be made available and who may receive such information in
accordance with the assignee’s compliance procedures and applicable laws, including Federal
and state securities laws.



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 paragraph (b)(iv) of this
Section, from and after the effective date specified in each Assignment and Assumption the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment
and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption,
be released from its obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of
Sections 2.15, 2.16, 2.17 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 paragraph (c) of this Section.



(iv) The Administrative Agent, acting for this purpose as an agent of the Borrowers, shall
maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a
register for the recordation of the names and addresses of the Lenders, and the 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 Borrowers, 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 contrary. The Register
shall be available for inspection by the Borrowers, 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 and Assumption executed by an assigning
Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee
shall already be a Lender hereunder), the processing and recordation fee referred to in
paragraph (b) of this Section and any written consent to such assignment required by paragraph (b)
of this Section, the Administrative Agent shall accept such Assignment and Assumption 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 2.05, 2.06(d) or (e), 2.07(b), 2.18(d) or 9.03(c), the Administrative Agent shall have no
obligation to accept such Assignment and Assumption 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 Borrowers, 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 Borrowers, the Administrative 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
right to enforce this Agreement and to approve any amendment, modification or waiver of any
provision of this Agreement; provided that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to any amendment, modification
or waiver described in the first proviso to Section 9.02(b) that affects such Participant. Subject
to paragraph (c)(ii) of this Section, the Borrowers agree that each Participant shall be entitled
to the benefits of Sections 2.15, 2.16 and 2.17 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section. 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 such Participant agrees to be subject to Section 2.18(c) as though it
were a Lender.



(ii) A Participant shall not be entitled to receive any greater payment under Section 2.15 or
2.17 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 Representative’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 2.17 unless the
Borrower Representative is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrowers, to comply with Section 2.17(f) 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 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 the Administrative Agent, the Issuing Bank or any Lender 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 2.15, 2.16, 2.17 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 4.01, 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
time owing by such Lender or Affiliate to or for the credit or the account of the Borrowers or such
Loan 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 Representative 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 (including, without limitation, 735
ILCS Section 105/5-1 et seq, but otherwise without regard to the conflict of laws provisions) of
the laws of the State of New York, but giving effect to federal laws applicable to national banks.



(b)  Each Loan Party 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
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 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 the Administrative Agent, the Issuing Bank or any Lender may otherwise have to bring any
action or proceeding relating to this Agreement or any other Loan Document against any Loan Party
or its properties in the courts of any jurisdiction.



(c)  Each Loan Party 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 paragraph (b) of this Section. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such court.



(d)  Each party to this Agreement irrevocably consents to service of process in the manner
provided for notices in Section 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 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 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 Laws 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 Representative 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 Issuing Bank or any Lender on a non-confidential basis
from a source other than the Borrowers. For the purposes of this Section, “Information”
means all information received from the Borrowers relating to the Borrowers or their business,
other than any such information that is available to the Administrative Agent, the Issuing Bank or
any Lender on a non-confidential basis prior to disclosure by the Borrowers; provided that,
in the case of information received from the Borrowers after the date hereof, such information is
clearly identified at the time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own confidential
information.



EACH LENDER ACKNOWLEDGES THAT INFORMATION AS DEFINED IN SECTION 9.12 FURNISHED TO IT PURSUANT
TO THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC INFORMATION CONCERNING THE COMPANY AND ITS
AFFILIATES AND THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES, AND CONFIRMS THAT IT HAS
DEVELOPED COMPLIANCE PROCEDURES REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION AND THAT IT
WILL HANDLE SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES AND APPLICABLE
LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.



ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS, FURNISHED BY THE BORROWERS OR
THE ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE COURSE OF ADMINISTERING, THIS AGREEMENT WILL BE
SYNDICATE-LEVEL INFORMATION, WHICH MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE COMPANY,
THE LOAN PARTIES AND THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES. ACCORDINGLY, EACH
LENDER REPRESENTS TO THE BORROWERS AND THE ADMINISTRATIVE AGENT THAT IT HAS IDENTIFIED IN ITS
ADMINISTRATIVE QUESTIONNAIRE A CREDIT CONTACT WHO MAY RECEIVE INFORMATION THAT MAY CONTAIN MATERIAL
NON-PUBLIC INFORMATION IN ACCORDANCE WITH ITS COMPLIANCE PROCEDURES AND APPLICABLE LAW, INCLUDING
FEDERAL AND STATE SECURITIES LAWS.



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 Borrowers 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 Borrowers that pursuant to the requirements of the Act, it is required to
obtain, verify and record information that identifies the Borrowers, which information includes the
names and addresses of the Borrowers and other information that will allow such Lender to identify
the Borrowers in accordance with the Act.



SECTION 9.15. Disclosure. Each Loan Party and each Lender hereby acknowledges and
agrees that the Administrative Agent and/or its Affiliates from time to time may hold investments
in, make other loans to or have other relationships with any of the Loan Parties and their
respective Affiliates.



SECTION 9.16. Appointment for Perfection. Each Lender hereby appoints each other
Lender as its agent for the purpose of perfecting Liens, for the benefit of the Administrative
Agent and the Lenders, 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
Administrative Agent) obtain possession of any such Collateral, such Lender shall notify the
Administrative Agent thereof, and, promptly upon the Administrative Agent’s request therefor shall
deliver such Collateral to the Administrative Agent or otherwise deal with such Collateral in
accordance with the Administrative Agent’s instructions.



SECTION 9.17. Interest Rate Limitation. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges
and other amounts which are treated as interest on such Loan under applicable law (collectively the
“Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may be
contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance
with applicable law, the rate of interest payable in respect of such Loan hereunder, together with
all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent
lawful, the interest and Charges that would have been payable in respect of such Loan but were not
payable as a result of the operation of this Section shall be cumulated and the interest and
Charges payable to such Lender in respect of other Loans or periods shall be increased (but not
above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the
Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender.



ARTICLE X




Loan Guaranty




SECTION 10.01. Guaranty. Each Loan Guarantor (other than those that have delivered a
separate Guaranty) hereby agrees that it is jointly and severally liable for, and, as primary
obligor and not merely as surety, absolutely and unconditionally guarantees to the Lenders 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-house counsel and paralegals) and expenses paid or incurred by the Administrative Agent, the
Issuing Bank and the Lenders in endeavoring to collect all or any part of the Secured Obligations
from, or in prosecuting any action against, any Borrower, any Loan 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 Loan 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 Loan 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. This Loan Guaranty is a guaranty of payment and
not of collection. Each Loan Guarantor waives any right to require the Administrative Agent, the
Issuing Bank or any Lender to sue any Borrower, any Loan 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.



SECTION 10.03. No Discharge or Diminishment of Loan Guaranty. (a) Except as
otherwise provided for herein, the obligations of each Loan Guarantor hereunder are 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), 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 any 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 Loan Guarantor may have at any time against any
Obligated Party, the Administrative Agent, the Issuing Bank, any Lender, or any other person,
whether in connection herewith or in any unrelated transactions.



(b) The obligations of each Loan 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 Loan Guarantor hereunder are not discharged or impaired or
otherwise affected by: (i) the failure of the Administrative Agent, the Issuing Bank or any Lender
to assert any claim or demand or to enforce any remedy with respect to all or any part of the
Guaranteed 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 any 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 the Administrative Agent, the
Issuing Bank or any Lender 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 Loan Guarantor or that would
otherwise operate as a discharge of any Loan Guarantor as a matter of law or equity (other than the
indefeasible payment in full in cash of the Guaranteed Obligations).



SECTION 10.04. Defenses Waived. To the fullest extent permitted by applicable law,
each Loan Guarantor hereby waives any defense based on or arising out of any defense of any
Borrower or any Loan 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 any Borrower or any
Loan Guarantor, other than the indefeasible payment in full in cash of the Guaranteed Obligations.
Without limiting the generality of the foregoing, each Loan 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 Administrative Agent may, at its election,
foreclose on any Collateral held by it by one or more judicial or nonjudicial 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 Loan Guarantor under this Loan 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 Loan 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 Loan
Guarantor against any Obligated Party or any security.



SECTION 10.05. Rights of Subrogation. No Loan 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 Loan Guarantors have fully performed all their obligations to the Administrative Agent, the
Issuing Bank and the Lenders.



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 any Borrower or otherwise, each Loan
Guarantor’s obligations under this Loan Guaranty with respect to that payment shall be reinstated
at such time as though the payment had not been made and whether or not the Administrative Agent,
the Issuing Bank and the Lenders are in possession of this Loan Guaranty. If acceleration of the
time for payment of any of the Guaranteed Obligations is stayed upon the insolvency, bankruptcy or
reorganization of any 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 Loan
Guarantors forthwith on demand by the Lender.



SECTION 10.07. Information. Each Loan Guarantor assumes all responsibility for being
and keeping itself informed of the Borrowers’ financial condition and assets, and of all other
circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations and the nature,
scope and extent of the risks that each Loan Guarantor assumes and incurs under this Loan Guaranty,
and agrees that neither the Administrative Agent, the Issuing Bank nor any Lender shall have any
duty to advise any Loan Guarantor of information known to it regarding those circumstances or
risks.



SECTION 10.08. Termination. The Lenders may continue to make loans or extend credit
to the Borrowers based on this Loan Guaranty until five days after the Administrative Agent
receives written notice of termination from any Loan Guarantor. Notwithstanding receipt of any
such notice, each Loan Guarantor will continue to be liable to the Lenders for any Guaranteed
Obligations created, assumed or committed to prior to the fifth day after the Administrative
Agent’s receipt of the notice, and all subsequent renewals, extensions, modifications and
amendments with respect to, or substitutions for, all or any part of that Guaranteed Obligations.



SECTION 10.09. Taxes. All payments of the Guaranteed Obligations will be made by
each Loan Guarantor free and clear of and without deduction for any Indemnified Taxes or Other
Taxes; provided that if any Loan 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 Administrative Agent, 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) such Loan Guarantor shall make such deductions and (iii) such Loan Guarantor shall pay the
full amount deducted to the relevant Governmental Authority in accordance with applicable law.



SECTION 10.10. Maximum Liability. The provisions of this Loan 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 Loan Guarantor under this Loan Guaranty would otherwise be
held or determined to be avoidable, invalid or unenforceable on account of the amount of such Loan
Guarantor’s liability under this Loan Guaranty, then, notwithstanding any other provision of this
Loan Guaranty to the contrary, the amount of such liability shall, without any further action by
the Loan 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 Loan Guarantor’s “Maximum Liability”. This Section with
respect to the Maximum Liability of each Loan Guarantor is intended solely to preserve the rights
of the Lenders to the maximum extent not subject to avoidance under applicable law, and no Loan
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
Loan Guarantor hereunder shall not be rendered voidable under applicable law. Each Loan Guarantor
agrees that the Guaranteed Obligations may at any time and from time to time exceed the Maximum
Liability of each Loan Guarantor without impairing this Loan Guaranty or affecting the rights and
remedies of the Lenders hereunder, provided that, nothing in this sentence shall be
construed to increase any Loan Guarantor’s obligations hereunder beyond its Maximum Liability.



SECTION 10.11. Contribution. In the event any Loan Guarantor (a “Paying
Guarantor”) shall make any payment or payments under this Loan Guaranty or shall suffer any
loss as a result of any realization upon any collateral granted by it to secure its obligations
under this Loan Guaranty, each other Loan 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
Borrowers after the date hereof (whether by loan, capital infusion or by other means) to (ii) the
aggregate Maximum Liability of all Loan 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
Loan Guarantor, the aggregate amount of all monies received by such Loan Guarantors from the
Borrowers after the date hereof (whether by loan, capital infusion or by other means). Nothing in
this provision shall affect any Loan Guarantor’s several liability for the entire amount of the
Guaranteed Obligations (up to such Loan Guarantor’s Maximum Liability). Each of the Loan
Guarantors covenants and agrees that its right to receive any contribution under this Loan 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. This provision is for the benefit of each of the
Administrative Agent, the Issuing Bank, the Lenders and the Loan Guarantors and may be enforced by
any one, or more, or all of them in accordance with the terms hereof.



SECTION 10.12. Liability Cumulative. The liability of each Loan Party as a Loan
Guarantor under this Article X is in addition to and shall be cumulative with all liabilities of
each Loan Party to the Administrative Agent, the Issuing Bank and the Lenders 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




The Borrower Representative 




SECTION 11.01. Appointment; Nature of Relationship. Metalico, Inc. is hereby
appointed by each of the Borrowers as its contractual representative (herein referred to as the
“Borrower Representative”) hereunder and under each other Loan Document, and each of the
Borrowers irrevocably authorizes the Borrower Representative to act as the contractual
representative of such Borrower with the rights and duties expressly set forth herein and in the
other Loan Documents. The Borrower Representative agrees to act as such contractual representative
upon the express conditions contained in this Article XI. Additionally, the Borrowers hereby
appoint the Borrower Representative as their agent to receive all of the proceeds of the Loans in
the Funding Account(s), at which time the Borrower Representative shall promptly disburse such
Loans to the appropriate Borrower, provided that, in the case of a Revolving Loan, such amount
shall not exceed Availability. The Administrative Agent and the Lenders, and their respective
officers, directors, agents or employees, shall not be liable to the Borrower Representative or any
Borrower for any action taken or omitted to be taken by the Borrower Representative or the
Borrowers pursuant to this Section 11.01.



SECTION 11.02. Powers. The Borrower Representative shall have and may exercise such
powers under the Loan Documents as are specifically delegated to the Borrower Representative by the
terms of each thereof, together with such powers as are reasonably incidental thereto. The
Borrower Representative shall have no implied duties to the Borrowers, or any obligation to the
Lenders to take any action thereunder except any action specifically provided by the Loan Documents
to be taken by the Borrower Representative.



SECTION 11.03. Employment of Agents. The Borrower Representative may execute any of
its duties as the Borrower Representative hereunder and under any other Loan Document by or through
authorized officers.



SECTION 11.04. Notices. Each Borrower shall immediately notify the Borrower
Representative of the occurrence of any Default or Unmatured Default hereunder referring to this
Agreement describing such Default or Unmatured Default and stating that such notice is a “notice of
default.” In the event that the Borrower Representative receives such a notice, the Borrower
Representative shall give prompt notice thereof to the Administrative Agent and the Lenders. Any
notice provided to the Borrower Representative hereunder shall constitute notice to each Borrower
on the date received by the Borrower Representative.



SECTION 11.05. Successor Borrower Representative. Upon the prior written consent of
the Administrative Agent, the Borrower Representative may resign at any time, such resignation to
be effective upon the appointment of a successor Borrower Representative. The Administrative Agent
shall give prompt written notice of such resignation to the Lenders.



SECTION 11.06. Execution of Loan Documents; Borrowing Base Certificate. The
Borrowers hereby empower and authorize the Borrower Representative, on behalf of the Borrowers, to
execute and deliver to the Administrative Agent and the Lenders the Loan Documents and all related
agreements, certificates, documents, or instruments as shall be necessary or appropriate to effect
the purposes of the Loan Documents, including without limitation, the Borrowing Base Certificates
and the Compliance Certificates. Each Borrower agrees that any action taken by the Borrower
Representative or the Borrowers in accordance with the terms of this Agreement or the other Loan
Documents, and the exercise by the Borrower Representative of its powers set forth therein or
herein, together with such other powers that are reasonably incidental thereto, shall be binding
upon all of the Borrowers.



SECTION 11.07. Reporting. Each Borrower hereby agrees that such Borrower shall
furnish promptly after each fiscal month to the Borrower Representative a copy of its Borrowing
Base Certificate and any other certificate or report required hereunder or requested by the
Borrower Representative on which the Borrower Representative shall rely to prepare the Borrowing
Base Certificates and Compliance Certificates required pursuant to the provisions of this
Agreement.



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.



BORROWERS:




METALICO, INC.


AMERICAN CATCON, INC.


FEDERAL AUTOCAT RECYCLING, L.L.C.


HYPERCAT COATING LIMITED LIABILITY COMPANY


MAYCO INDUSTRIES, INC.


METALICO AKRON, INC.


METALICO ALUMINUM RECOVERY, INC.


METALICO BUFFALO, INC.


METALICO NIAGARA, INC.


METALICO NILES, INC.


METALICO PITTSBURGH, INC.


METALICO ROCHESTER, INC.


METALICO SYRACUSE, INC.


METALICO TRANSFER, INC.


METALICO TRANSPORT, INC.


METALICO YOUNGSTOWN, INC.


SANTA ROSA LEAD PRODUCTS, INC.


TOTALCAT GROUP, INC.


TRANZACT CORPORATION


WEST COAST SHOT, INC.




By       /s/ Michael J.
Drury      




	 	 	Name: Michael J. Drury

Title: Authorized Representative






OTHER LOAN PARTIES (LOAN GUARANTORS):




ELIZABETH HAZEL LLC






GENERAL SMELTING & REFINING, INC.


GULF COAST RECYCLING, INC.


MELINDA HAZEL LLC


METALICO AKRON REALTY, INC.


METALICO ALABAMA REALTY, INC.


METALICO-COLLEGE GROVE, INC.


METALICO COLLIERS REALTY, INC.


METALICO GULFPORT REALTY, INC.


METALICO NEVILLE REALTY, INC.


METALICO SYRACUSE REALTY, INC.


METALICO TRANSFER REALTY, INC.


RIVER HILLS BY THE RIVER, INC.


METALICO-GRANITE CITY, INC.


HYPERCAT DMG, L.L.C.




By       /s/ Michael J.
Drury      




	 	 	Name: Michael J. Drury

Title: Authorized Representative






JPMORGAN CHASE BANK, N.A., individually, as




Administrative Agent, Issuing Bank and Swingline
Lender




By       /s/ Thomas G.
Williams      




	 	 	Name: Thomas G. Williams

Title: Vice President






RBS BUSINESS CAPITAL, a division of RBS ASSET
FINANCE, INC., a subsidiary of RBS CITIZENS, N.A.,




individually, and as Documentation Agent




By       /s/ Donald B.
Lewis      




	 	 	Name: Donald B. Lewis

Title: Senior Vice President






CAPITAL ONE LEVERAGE FINANCE CORP. 




By       /s/ Michael
Burns      




	 	 	Name: Michael Burns






Title: Senior Vice President



COMMITMENT SCHEDULE




	 	 	 	 	 	 	 	 	 	 	 	 	 
	Lender	 	Revolving Commitment	 	Term Loan Commitment	 	Commitment
	JPMorgan Chase Bank, N.A.
	 	$	26,307,692.31	 	 	$	3,692,307.69	 	 	$	30,000,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	RBS Business Capital, a
	 	$	17,538,461.54	 	 	$	2,461,538.46	 	 	$	20,000,000	 
	division of RBS Asset
Finance, Inc., a
subsidiary of RBS
Citizens, N.A.  
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Capital One Leverage
	 	$	13,153,846.15	 	 	$	1,846,153.85	 	 	$	15,000,000	 
	Finance Corp.
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Total
	 	$	57,000,000	 	 	$	8,000,000	 	 	$	65,000,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 






EXHIBIT A



ASSIGNMENT AND ASSUMPTION




This Assignment and Assumption (the “Assignment and Assumption”) is dated as of the
Effective Date set forth below and is entered into by and between [Insert name of Assignor] (the
“Assignor”) and [Insert name of Assignee] (the “Assignee”). Capitalized terms used
but not defined herein shall have the meanings given to them in the Credit Agreement identified
below (as amended, the “Credit Agreement”), receipt of a copy of which is hereby
acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached
hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment
and Assumption as if set forth herein in full.



For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the
Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to
and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the
Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor’s
rights and obligations in its capacity as a Lender under the Credit Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to the amount and
percentage interest identified below of all of such outstanding rights and obligations of the
Assignor under the respective facilities identified below (including any letters of credit,
guarantees, and swingline loans included in such facilities) and (ii) to the extent permitted to be
assigned under applicable law, all claims, suits, causes of action and any other right of the
Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under
or in connection with the Credit Agreement, any other documents or instruments delivered pursuant
thereto or the loan transactions governed thereby or in any way based on or related to any of the
foregoing, including contract claims, tort claims, malpractice claims, statutory claims and all
other claims at law or in equity related to the rights and obligations sold and assigned pursuant
to clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii)
above being referred to herein collectively as the “Assigned Interest”). Such sale and
assignment is without recourse to the Assignor and, except as expressly provided in this Assignment
and Assumption, without representation or warranty by the Assignor.



	 	 	 	 	 	 	 	 	 
	 	1.	 	 	Assignor:	 	______________________________

	 	2.	 	 	Assignee:	 	______________________________
[and is an Affiliate/Approved Fund of [identify Lender]1]

	 	3.	 	 	Borrowers:	 	Metalico, Inc. and Certain Subsidiaries

	 	4.	 	 	Administrative Agent:	 	Chase, as the administrative agent under the Credit Agreement

	 	5.	 	 	Credit Agreement:	 	[The [amount] Credit Agreement dated as of        among Metalico, Inc. and certain of its
subsidiaries, the Lenders parties thereto, [name of Administrative Agent], as Administrative Agent,
and the other agents parties thereto]








	1	 	Select as applicable.




1










	6.	 	Assigned Interest:





	 	 	 	 	 	 	 	 	 	 	 
	Facility Assigned2
	 	Aggregate Amount of

Commitment/Loans

for all Lenders

	 	Amount of

Commitment/Loans

Assigned
	 	Percentage Assigned of

Commitment/Loans3




	 
	 	 

	 	 	 	 	 	 	 	 
	 	 	$

	 	 	$	 	 	 	%	 
	 	 	 

	 	 	 	 	 	 	 	 
	 	 	$

	 	 	$	 	 	 	%	 
	 	 	 

	 	 	 	 	 	 	 	 
	 	 	$

	 	 	$	 	 	 	%	 
	 	 	 

	 	 	 	 	 	 	 	 






Effective Date:              , 20       [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL
BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]



The Assignee agrees to deliver to the Administrative Agent a completed Administrative Questionnaire
in which the Assignee designates on or more Credit Contacts to whom all syndicate-level information
(which may contain material non-public information about the Company, the Loan Parties and their
Related Parties or their respective securities) will be made available and who may receive such
information in accordance with the Assignee’s compliance procedures and applicable laws, including
Federal and state securities laws.



The terms set forth in this Assignment and Assumption are hereby agreed to:



ASSIGNOR




[NAME OF ASSIGNOR]



By:      

Title:




ASSIGNEE



[NAME OF ASSIGNEE]



By:      

Title:





	2	 	Fill in the appropriate terminology for the
types of facilities under the Credit Agreement that are being assigned under
this Assignment (e.g. “Revolving Commitment,” “Term Loan Commitment,” etc.)






	3	 	Set forth, to at least 9 decimals, as a
percentage of the Commitment/Loans of all Lenders thereunder.




2









Consented to and Accepted:



JPMORGAN CHASE BANK, N.A.,


as Administrative Agent,



By       



Name:



Title:



Consented to:



[NAME OF RELEVANT PARTY]



By—



Title:ANNEX 1




STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION




1. Representations and Warranties.



1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal and
beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any
lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken
all action necessary, to execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the Credit Agreement or any
other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial
condition of any Borrower, any of their Subsidiaries or Affiliates or any other Person obligated in
respect of any Loan Document or (iv) the performance or observance by any Borrower, any of its
Subsidiaries or Affiliates or any other Person of any of their respective obligations under any
Loan Document.



1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full power
and authority, and has taken all action necessary, to execute and deliver this Assignment and
Assumption and to consummate the transactions contemplated hereby and to become a Lender under the
Credit Agreement, (ii) it satisfies the requirements, if any, specified in the Credit Agreement
that are required to be satisfied by it in order to acquire the Assigned Interest and become a
Lender, (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit
Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the
obligations of a Lender thereunder, (iv) it has received a copy of the Credit Agreement, together
with copies of the most recent financial statements delivered pursuant to Section        thereof, as
applicable, and such other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assignment and Assumption and to purchase the
Assigned Interest on the basis of which it has made such analysis and decision independently and
without reliance on the Administrative Agent or any other Lender, and (v) if it is a Foreign
Lender, attached to the Assignment and Assumption is any documentation required to be delivered by
it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee; and
(b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the
Assignor or any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or not taking action
under the Loan Documents, and (ii) it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be performed by it as a
Lender.



2. Payments. From and after the Effective Date, the Administrative Agent shall
make all payments in respect of the Assigned Interest (including payments of principal, interest,
fees and other amounts) to the Assignor for amounts which have accrued to but excluding the
Effective Date and to the Assignee for amounts which have accrued from and after the Effective
Date.



3. General Provisions. This Assignment and Assumption shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and assigns. This
Assignment and Assumption may be executed in any number of counterparts, which together shall
constitute one instrument.Delivery of an executed counterpart of a signature page of this
Assignment and Assumption by facsimile shall be effective as delivery of a manually executed
counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the law of the State of New York.



EXHIBIT B




OPINION OF COUNSEL FOR THE LOAN PARTIES



[Effective Date]



To the Lenders and the Administrative



Agent Referred to Below



c/o JPMorgan Chase Bank, N.A., as



Administrative Agent



270 Park Avenue


New York, New York 10017



Dear Sirs:



[I/We] have acted as counsel for [ ], a [ ] corporation, [ ], a
[ ] corporation, [ ], a [ ] corporation and [ ], a [ ]
corporation (the “Borrowers”), in connection with the Credit Agreement dated as of [
] (the “Credit Agreement”), among the Borrowers, the banks and other financial
institutions identified therein as Lenders, and JPMorgan Chase Bank, N.A., as Administrative Agent.
Terms defined in the Credit Agreement are used herein with the same meanings.



[I, or individuals under my direction,/We] have examined originals or copies, certified or
otherwise identified to [my/our] satisfaction, of such documents, corporate records, certificates
of public officials and other instruments and have conducted such other investigations of fact and
law as [I/we] have deemed necessary or advisable for purposes of this opinion.



Upon the basis of the foregoing, [I am/we are] of the opinion that:



1. Each Loan Party (a) is a corporation, partnership or limited liability company duly and
properly incorporated or organized, as the case may be, validly existing and (to the extent such
concept applies to such entity) in good standing under the laws of its jurisdiction of
incorporation or organization, (b) has all requisite power and authority to carry on its business
as now conducted and (c) [except where the failure to do so, individually or in the aggregate,
could 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.



2. The Transactions are within each Loan Party’s corporate powers and have been duly
authorized by all necessary corporate and, if required, stockholder action. The Loan Documents
have been duly executed and delivered by the Loan Parties and constitute legal, valid and binding
obligations of the Loan Parties, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights
generally and subject to general principles of equity, regardless of whether considered in a
proceeding in equity or at law.



3. The Transactions (a) do not require any consent or approval of, registration or filing
with, or any other action by, any Governmental Authority, except such as have been obtained or made
and are in full force and effect, (b) will not violate any applicable law or regulation or the
charter, by-laws or other organizational documents of any Loan Party or any order of any
Governmental Authority, (c) will not violate or result in a default under any indenture, agreement
or other instrument binding upon any Loan Party or its assets, or give rise to a right thereunder
to require any payment to be made by the such Loan Party, and (d) will not result in the creation
or imposition of any Lien on any asset of any Loan Party.



4. There are no actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to [my/our] knowledge, threatened against or affecting any Loan Party
(a) 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 have a
Material Adverse Effect (other than the Disclosed Matters) or (b) that involve the Loan Documents
or the Transactions.



5. None of the Loan Parties is an “investment company” as defined in, or subject to
regulation under, the Investment Company Act of 1940.



6. The Obligations constitute senior indebtedness which is entitled to the benefits of the
subordination provisions of all outstanding Subordinated Indebtedness.



7. The making of the Loans and the application of proceeds thereof as provided in the
Agreement do not violate Regulation U of the Board of Governors of the Federal Reserve System.



8. The provisions of the Collateral Documents are sufficient to create in favor of the Agent a
security interest in all right, title and interest of each Loan Party in those items and types of
collateral described in the Collateral Documents in which a security interest may be created under
Article 9 of the UCC as in effect on the date hereof in the State of [ ]. Financing
statements on Form UCC-1’s have been duly authorized by each Loan Party and have been duly filed in
each filing office indicated in Exhibit A hereto under the UCC in effect in each state in
which said filing offices are located. The description of the collateral set forth in said
financing statements is sufficient to perfect a security interest in the items and types of
collateral described therein in which a security interest may be perfected by the filing of a
financing statement under the UCC as in effect in such states. Such filings are in proper form for
filing and are sufficient to perfect the security interest created by the Collateral Documents in
all right, title and interest of the Loan Parties in those items and types of collateral described
in the Collateral Documents in which a security interest may be perfected by the filing of a
financing statement under the UCC in such states.



9. Assuming that the Administrative Agent has taken and is retaining possession of the stock
certificates evidencing any Capital Stock described in the Security Agreement (the “Pledged
Stock”), together with properly completed stock powers endorsing the Pledged Stock and executed
by the “Grantors” named in the Security Agreement in blank, and that the Agent has taken such
Pledged Stock in good faith without notice of any adverse claim within the meaning of the UCC,
there has been created under the Security Agreement, and there has been granted to the Agent a
valid and perfected first priority security interest in the Pledged Stock, with the consequence of
perfection by control accorded by the UCC.



10. Assuming that funds are maintained on deposit in Deposit Accounts with [insert names
of applicable banks], the [Deposit Account Control Agreements /Lock Box Agreements] with such
banks are sufficient to create in favor of the Administrative Agent, a perfected security interest
in such Deposit Accounts and the funds deposited therein, with the consequences of perfection by
control accorded by the UCC.



[I am a member/we are members] of the bar of the State of [ ] and the foregoing opinion
is limited to the laws of the State of [ ][, the General Corporation Law of the State of
Delaware] and the Federal laws of the United States of America. This opinion is rendered solely to
you in connection with the above matter. This opinion may not be relied upon by you for any other
purpose or relied upon by any other Person (other than your successors and assigns as Lenders and
Persons that acquire participations in your Loans) without our prior written consent.



Very truly yours,



	 	 	 	 	 	 	 	 	 	 	 
	
 
	 	 	 	 	 	 	 	 	 	[
	
 
	 	 	 	 	 	 	 	 	 	]
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	 	 	 	 	 	 	 	 	 	BORROWING

BASE

REPORT
	 

	
 
	 	 	 	 	 	 	 	 	 	Rpt #
	
 
	 	 	 	 	 	 	 	 	 	 
	Obligor Number:

	 	 	 	 	 	 	 	 	 	Date:
	 

	 	 	 	 	 	 	 	 	 	 
	Loan Number:

	 	 	 	 	 	 	 	 	 	Period

Covered:       to

     
	 

	 	 	 	 	 	 	 	 	 	 
	COLLATERAL CATEGORY

	 	 	A/R	 	 	Inventory
	 	Total Eligible Collateral
	
 
	 	 	 	 	 	 	 	 	 	

	Description

	 	

	 	

	 	

	 

	 	

	 	

	 	

	1 Beginning Balance (Previous report — Line

8)

	 	



	 	



	 	



	 

	 	

	 	

	 	

	2 Additions to Collateral (Gross Sales or

Purchases)

	 	



	 	



	 	



	 

	 	

	 	

	 	

	3 Other Additions (Add back any non-A/R

cash in line 3)

	 	



	 	



	 	



	 

	 	

	 	

	 	

	4 Deductions to Collateral (Cash Received)

	 	

	 	

	 	

	 

	 	

	 	

	 	

	5 Deductions to Collateral (Discounts,

other)

	 	



	 	



	 	



	 

	 	

	 	

	 	

	6 Deductions to Collateral (Credit Memos,

all)

	 	



	 	



	 	



	 

	 	

	 	

	 	

	7 Other non-cash credits to A/R

	 	

	 	

	 	

	 

	 	

	 	

	 	

	8 Total Ending Collateral Balance

	 	

	 	

	 	

	 

	 	

	 	

	 	

	9 Less Ineligible — Past Due

	 	

	 	

	 	

	 

	 	

	 	

	 	

	10 Less Ineligible  — Cross-age (     %)

	 	

	 	

	 	

	 

	 	

	 	

	 	

	11 Less Ineligible — Foreign

	 	

	 	

	 	

	 

	 	

	 	

	 	

	12 Less Ineligible — Contra

	 	

	 	

	 	

	 

	 	

	 	

	 	

	13 Less Ineligible — Other (attached

schedule)

	 	



	 	



	 	



	 

	 	

	 	

	 	

	14 Total Ineligibles — Accounts Receivable

	 	

	 	

	 	

	 

	 	

	 	

	 	

	15 Less Ineligible — Inventory Slow-moving

	 	

	 	

	 	

	 

	 	

	 	

	 	

	16 Less Ineligible — Inventory Offsite not

covered

	 	



	 	



	 	



	 

	 	

	 	

	 	

	17 Less Ineligible — Inventory WIP

	 	

	 	

	 	

	 

	 	

	 	

	 	

	18 Less Ineligible — Consigned

	 	

	 	

	 	

	 

	 	

	 	

	 	

	19 Less Ineligible — Other (attached

schedule)

	 	



	 	



	 	



	 

	 	

	 	

	 	

	20 Total Ineligible Inventory

	 	

	 	

	 	

	 

	 	

	 	

	 	

	21 Total Eligible Collateral

	 	

	 	

	 	

	 

	 	

	 	

	 	

	22 Advance Rate Percentage

	 	 	%	 	 	 	%	 	 	

	 

	 	 	 	 	 	 	 	 	 	

	23 Net Available — Borrowing Base Value

	 	

	 	

	 	

	 

	 	

	 	

	 	

	24 Reserves (other)

	 	

	 	

	 	

	 

	 	

	 	

	 	

	25 Total Borrowing Base Value

	 	

	 	

	 	

	 

	 	

	 	

	 	

	25A Total Availability/CAPS

	 	

	 	

	 	

	 

	 	

	 	

	 	

	26 Revolver Line

	 	 	 	 	 	 	 	 	 	Total Revolver Line
	 

	 	 	 	 	 	 	 	 	 	 
	27 Maximum Borrowing Limit (Lesser of 25 or

26)*

	 	

	 	

	 	Total Available



	27A Suppressed Availability

	 	

	 	

	 	

	 

	 	

	 	

	 	

	LOAN STATUS

	 	

	 	

	 	

	 

	 	

	 	

	 	

	28 Previous Loan Balance (Previous Report

Line 31)

	 	



	 	



	 	



	 

	 	

	 	

	 	

	29 Less: A. Net Collections (Same as line 4)

B. Adjustments/Other

     

	 	





	 	





	 	





	 

	 	

	 	

	 	

	30 Add: A. Request for Funds

B. Adjustments/Other

     

	 	





	 	





	 	





	 

	 	

	 	

	 	

	31 New Loan Balance

	 	

	 	

	 	

	 

	 	

	 	

	 	

	32 Letter of Credit/BA’s outstanding

	 	

	 	

	 	

	 

	 	

	 	

	 	

	33 Availability Not Borrowed (Lines 27 less

31 & 32)

	 	



	 	



	 	



	 

	 	

	 	

	 	

	34 Term Loan

	 	 	 	 	 	 	 	 	 	Total New Loan Balance:
	 

	 	

	 	

	 	

	35 OVERALL EXPOSURE (lines 31 & 34)

	 	

	 	

	 	

	 

	 	

	 	

	 	

	Pursuant to, and in accordance with, the terms and provisions of that certain Credit Agreement (“Agreement”),

	among JPMorgan Chase Bank, N.A. (“Chase”), as administrative agent for the Lenders, the Loan Parties and

	____________ (“Borrower”), Borrower is executing and delivering to Chase this Collateral Report accompanied by

	supporting data (collectively referred to as the “Report”). Borrower represents and warrants to Chase that

	this Report is true and correct, and is based on information contained in Borrower’s own financial accounting

	records. Borrower, by the execution of this Report, hereby ratifies, confirms and affirms all of the terms,

	conditions and provisions of the Agreement, and further certifies on this        day of       ,

	20      , that the Borrower is in compliance with said Agreement.
	 	 	 	 	 	 
	BORROWER NAME:	 	 	 	 	 	AUTHORIZED SIGNATURE:
	 	 	 	 	 	 	 






3




EXHIBIT D




COMPLIANCE CERTIFICATE




	 	 	 
	To:
	 	The Lenders parties to the

Credit Agreement Described Below







This Compliance Certificate is furnished pursuant to that certain Credit Agreement dated as of
 February 26, 2010 (as amended, modified, renewed or extended from time to
time, the “Agreement”) among METALICO, INC., a Delaware corporation, and certain of its
Subsidiaries (the “Borrowers”), the other Loan Parties, the Lenders party thereto and JPMorgan
Chase Bank, N.A., as Administrative Agent for the Lenders and as the Issuing Bank. Unless
otherwise defined herein, capitalized terms used in this Compliance Certificate have the meanings
ascribed thereto in the Agreement.



THE UNDERSIGNED HEREBY CERTIFIES, ON ITS BEHALF AND ON BEHALF OF THE BORROWERS, THAT:



1. I am the duly elected   of the Borrower Representative;



2. I have reviewed the terms of the Agreement and I have made, or have caused to be made
under my supervision, a detailed review of the transactions and conditions of the Company and its
Subsidiaries during the accounting period covered by the attached financial statements [for
quarterly or monthly financial statements add: and such financial statements present fairly in all
material respects the financial condition and results of operations of the Borrowers and their
consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied,
subject to normal year-end audit adjustments and the absence of footnotes];



3. The examinations described in paragraph 2 did not disclose, except as set forth below, and
I have no knowledge of (i) the existence of any condition or event which constitutes a Default
during or at the end of the accounting period covered by the attached financial statements or as of
the date of this Certificate or (ii) any change in GAAP or in the application thereof that has
occurred since the date of the audited financial statements referred to in Section 3.04 of the
Agreement;



4. I hereby certify that no Loan Party has changed (i) its name, (ii) its chief executive
office, (iii) principal place of business, (iv) the type of entity it is or (v) its state of
incorporation or organization without having given the Agent the notice required by Section 4.15 of
the Security Agreement;



5. Schedule I attached hereto sets forth financial data and computations evidencing
the Borrowers’ compliance with certain covenants of the Agreement, all of which data and
computations are true, complete and correct; and



6. Schedule II hereto sets forth the computations necessary to determine the
Applicable Rate commencing on the Business Day this certificate is delivered.



Described below are the exceptions, if any, to paragraph 3 by listing, in detail, the (i)
nature of the condition or event, the period during which it has existed and the action which the
Borrowers have taken, are taking, or propose to take with respect to each such condition or event
or (i) the change in GAAP or the application thereof and the effect of such change on the attached
financial statements:



The foregoing certifications, together with the computations set forth in Schedule I and
Schedule II hereto and the financial statements delivered with this Certificate in support hereof,
are made and delivered this   day of  ,  .




Metalico, Inc., as Borrower
Representative



By:

Name:

Title:




4



SCHEDULE I




Compliance as of _________, ____ with

Provisions of   and   of

the Agreement





5






SCHEDULE II




Borrowers’ Applicable Rate Calculation




EXHIBIT E




JOINDER AGREEMENT




THIS JOINDER AGREEMENT (this “Agreement”), dated as of       ,       , 200      , is
entered into between       , a        (the “New
Subsidiary”) and JPMORGAN CHASE BANK, N.A., in its capacity as administrative agent (the
"Administrative Agent”) under that certain Credit Agreement, dated as of February   , 2010
among METALICO, INC., a Delaware corporation, AMERICAN CATCON, INC., a Texas corporation, FEDERAL
AUTOCAT RECYCLING, L.L.C., a New Jersey limited liability company, HYPERCAT COATING LIMITED
LIABILITY COMPANY, a New Jersey limited liability company, MAYCO INDUSTRIES, INC., an Alabama
corporation, METALICO AKRON, INC., an Ohio corporation, METALICO ALUMINUM RECOVERY, INC., a New
York corporation, METALICO BUFFALO, INC., a New York corporation, METALICO NIAGARA, INC., a New
York corporation, METALICO NILES, INC., an Ohio corporation, METALICO PITTSBURGH, INC., a
Pennsylvania corporation, METALICO ROCHESTER, INC., a New York corporation, METALICO SYRACUSE,
INC., a New York corporation, METALICO TRANSFER, INC., a New York corporation, METALICO TRANSPORT,
INC., a New York corporation, METALICO YOUNGSTOWN, INC., a Delaware corporation, SANTA ROSA LEAD
PRODUCTS, INC., a California corporation, TOTALCAT GROUP, INC., a Delaware corporation, TRANZACT
CORPORATION, a Delaware corporation, and WEST COAST SHOT, INC., a Nevada corporation (individually,
“Borrower” and collectively, “Borrowers”) as Borrowers, the other Loan Parties
party hereto, the Lenders party thereto and the Administrative Agent (as the same may be amended,
modified, extended or restated from time to time, the “Credit Agreement”). All capitalized
terms used herein and not otherwise defined shall have the meanings set forth in the Credit
Agreement.



The New Subsidiary and the Administrative Agent, for the benefit of the Lenders, hereby agree
as follows:



1. The New Subsidiary hereby acknowledges, agrees and confirms that, by its execution of this
Agreement, the New Subsidiary will be deemed to be a [Borrower/Loan Guarantor] under the Credit
Agreement and a “Loan Guarantor” for all purposes of the Credit Agreement and shall have all of the
obligations of a Loan Party and a Loan Guarantor thereunder as if it had executed the Credit
Agreement. The New Subsidiary hereby ratifies, as of the date hereof, and agrees to be bound by,
all of the terms, provisions and conditions contained in the Credit Agreement, including without
limitation (a) all of the representations and warranties of the Loan Parties set forth in Article
III of the Credit Agreement, *[and]* (b) all of the covenants set forth in Articles V and VI of the
Credit Agreement *[and (c) all of the guaranty obligations set forth in Article X of the Credit
Agreement. Without limiting the generality of the foregoing terms of this paragraph 1, the New
Subsidiary, subject to the limitations set forth in Section 10.10 of the Credit Agreement, hereby
guarantees, jointly and severally with the other Loan Guarantors, to the Administrative Agent and
the Lenders, as provided in Article X of the Credit Agreement, the prompt payment and performance
of the Guaranteed Obligations in full when due (whether at stated maturity, as a mandatory
prepayment, by acceleration or otherwise) strictly in accordance with the terms thereof and agrees
that if any of the Guaranteed Obligations are not paid or performed in full when due (whether at
stated maturity, as a mandatory prepayment, by acceleration or otherwise), the New Subsidiary will,
jointly and severally together with the other Loan Guarantors, promptly pay and perform the same,
without any demand or notice whatsoever, and that in the case of any extension of time of payment
or renewal of any of the Guaranteed Obligations, the same will be promptly paid in full when due
(whether at extended maturity, as a mandatory prepayment, by acceleration or otherwise) in
accordance with the terms of such extension or renewal.]* *[The New Subsidiary has delivered to
the Administrative Agent an executed Loan Guaranty.]*



2. If required, the New Subsidiary is, simultaneously with the execution of this Agreement,
executing and delivering such Collateral Documents (and such other documents and instruments) as
requested by the Administrative Agent in accordance with the Credit Agreement.



3. The address of the New Subsidiary for purposes of Section 9.01 of the Credit Agreement is
as follows:



4. The New Subsidiary hereby waives acceptance by the Administrative Agent and the Lenders of
the guaranty by the New Subsidiary upon the execution of this Agreement by the New Subsidiary.



5. This Agreement may be executed in any number of counterparts, each of which when so
executed and delivered shall be an original, but all of which shall constitute one and the same
instrument.



6. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.



IN WITNESS WHEREOF, the New Subsidiary has caused this Agreement to be duly executed by its
authorized officer, and the Administrative Agent, for the benefit of the Lenders, has caused the
same to be accepted by its authorized officer, as of the day and year first above written.



[NEW SUBSIDIARY]



By:

Name:

Title:




Acknowledged and accepted:



JPMORGAN CHASE BANK, N.A., as Administrative




Agent



By:



Name:



Title:EXHIBIT 2.10(f)-R

Form of Revolving Note




EXHIBIT 2.10(f)-T

Form of Term Note





6