Document:

Exhibit
10.18

 

EXECUTION COPY

 

SECOND LIEN CREDIT AGREEMENT

 

dated as of

 

June 30, 2006,

 

among

 

HAWKEYE INTERMEDIATE, LLC,

THL - HAWKEYE ACQUISITION LLC

(to be merged with and into HAWKEYE RENEWABLES, LLC),

 

THE LENDERS PARTY HERETO

 

and

 

CREDIT SUISSE,

as Administrative Agent and Collateral Agent

 

CREDIT SUISSE SECURITIES (USA) LLC

 

and

 

BANC OF AMERICA SECURITIES LLC,

 

as Joint Lead Arrangers and Joint Bookrunners

 

and

 

GOLDMAN SACHS CREDIT PARTNERS, L.P.,

 

as Joint Bookrunner

 

 

Table of Contents

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE I

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Definitions

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  1.01.

  	
  Defined Terms

  	
  1

  
	
  SECTION
  1.02.

  	
  Terms Generally

  	
  28

  
	
  SECTION
  1.03.

  	
  Classification of Loans and Borrowings

  	
  28

  
	
  SECTION
  1.04.

  	
  Rounding

  	
  29

  
	
  SECTION
  1.05.

  	
  References to Agreements and Laws

  	
  29

  
	
  SECTION 1.06.

  	
  Times of Day

  	
  29

  
	
  SECTION
  1.07.

  	
  Timing of Payment or Performance

  	
  29

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE II

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  The Credits

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  2.01.

  	
  Commitments

  	
  29

  
	
  SECTION
  2.02.

  	
  Loans

  	
  29

  
	
  SECTION
  2.03.

  	
  Borrowing Procedure

  	
  30

  
	
  SECTION
  2.04.

  	
  Evidence of Debt; Repayment of Loans

  	
  31

  
	
  SECTION
  2.05.

  	
  Fees

  	
  32

  
	
  SECTION
  2.06.

  	
  Interest on Loans

  	
  32

  
	
  SECTION
  2.07.

  	
  Default Interest

  	
  32

  
	
  SECTION
  2.08.

  	
  Alternate Rate of Interest

  	
  32

  
	
  SECTION
  2.09.

  	
  Termination of Commitments

  	
  33

  
	
  SECTION
  2.10.

  	
  Conversion and Continuation of Borrowings

  	
  33

  
	
  SECTION 2.11.

  	
  Right to Require Prepayment

  	
  35

  
	
  SECTION
  2.12.

  	
  Optional Prepayment

  	
  35

  
	
  SECTION
  2.13.

  	
  Mandatory Prepayments

  	
  35

  
	
  SECTION
  2.14.

  	
  Reserve Requirements; Change in Circumstances

  	
  37

  
	
  SECTION
  2.15.

  	
  Change in Legality

  	
  38

  
	
  SECTION
  2.16.

  	
  Indemnity

  	
  39

  
	
  SECTION 2.17.

  	
  Pro Rata Treatment

  	
  40

  
	
  SECTION
  2.18.

  	
  Sharing of Setoffs

  	
  40

  
	
  SECTION
  2.19.

  	
  Payments

  	
  40

  
	
  SECTION
  2.20.

  	
  Taxes

  	
  41

  
	
  SECTION
  2.21.

  	
  Assignment of Commitments Under Certain Circumstances; Duty to
  Mitigate

  	
  43

  

 

i

 

	
   

  	
  ARTICLE III

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Representations and Warranties

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  3.01.

  	
  Organization; Powers

  	
  44

  
	
  SECTION
  3.02.

  	
  Authorization

  	
  45

  
	
  SECTION
  3.03.

  	
  Enforceability

  	
  45

  
	
  SECTION
  3.04.

  	
  Governmental Approvals

  	
  45

  
	
  SECTION
  3.05.

  	
  Financial Statements

  	
  46

  
	
  SECTION
  3.06.

  	
  No Material Adverse Change

  	
  46

  
	
  SECTION
  3.07.

  	
  Title to Properties; Possession Under Leases

  	
  46

  
	
  SECTION
  3.08.

  	
  Subsidiaries

  	
  47

  
	
  SECTION
  3.09.

  	
  Litigation; Compliance with Laws

  	
  47

  
	
  SECTION
  3.10.

  	
  Agreements

  	
  47

  
	
  SECTION
  3.11.

  	
  Federal Reserve Regulations

  	
  48

  
	
  SECTION
  3.12.

  	
  Investment Company Act

  	
  48

  
	
  SECTION
  3.13.

  	
  Tax Returns

  	
  48

  
	
  SECTION
  3.14.

  	
  No Material Misstatements

  	
  48

  
	
  SECTION
  3.15.

  	
  Employee Benefit Plans

  	
  49

  
	
  SECTION
  3.16.

  	
  Environmental Matters

  	
  49

  
	
  SECTION
  3.17.

  	
  Security Documents

  	
  49

  
	
  SECTION
  3.18.

  	
  Location of Real Property and Leased Premises

  	
  49

  
	
  SECTION
  3.19.

  	
  Labor Matters

  	
  50

  
	
  SECTION
  3.20.

  	
  Solvency

  	
  50

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE IV

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Conditions of Lending

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE V

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Affirmative Covenants

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  5.01.

  	
  Existence; Compliance with Laws; Businesses and Properties

  	
  54

  
	
  SECTION
  5.02.

  	
  Insurance

  	
  54

  
	
  SECTION
  5.03.

  	
  Taxes

  	
  55

  
	
  SECTION
  5.04.

  	
  Financial Statements, Reports, etc

  	
  55

  
	
  SECTION
  5.05.

  	
  Litigation and Other Notices

  	
  57

  
	
  SECTION
  5.06.

  	
  Information Regarding Collateral

  	
  57

  
	
  SECTION
  5.07.

  	
  Maintaining Records; Access to Properties and Inspections;
  Maintenance of Ratings

  	
  57

  
	
  SECTION
  5.08.

  	
  Use of Proceeds

  	
  58

  
	
  SECTION
  5.09.

  	
  Further Assurances

  	
  58

  

 

ii

 

	
  SECTION
  5.10.

  	
  Interest Rate Protection

  	
  60

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE VI

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Negative Covenants

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  6.01.

  	
  Indebtedness

  	
  60

  
	
  SECTION
  6.02.

  	
  Liens

  	
  64

  
	
  SECTION
  6.03.

  	
  Sale and Lease-Back Transactions

  	
  67

  
	
  SECTION
  6.04.

  	
  Investments, Loans and Advances

  	
  67

  
	
  SECTION
  6.05.

  	
  Mergers, Consolidations, and Sales of Assets

  	
  69

  
	
  SECTION
  6.06.

  	
  Restricted Payments; Restrictive Agreements

  	
  72

  
	
  SECTION
  6.07.

  	
  Transactions with Affiliates

  	
  75

  
	
  SECTION
  6.08.

  	
  Business of Holdings, Borrower and Subsidiaries

  	
  76

  
	
  SECTION
  6.09.

  	
  Other Indebtedness and Agreements

  	
  77

  
	
  SECTION
  6.10.

  	
  Maximum Total Leverage Ratio

  	
  77

  
	
  SECTION
  6.11.

  	
  Anti-Layering

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE VII

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Events of Default

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE VIII

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  The Administrative Agent and the Collateral Agent

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE IX

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Miscellaneous

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  9.01.

  	
  Notices

  	
  84

  
	
  SECTION
  9.02.

  	
  Survival of Agreement

  	
  85

  
	
  SECTION
  9.03.

  	
  Binding Effect

  	
  85

  
	
  SECTION
  9.04.

  	
  Successors and Assigns

  	
  85

  
	
  SECTION
  9.05.

  	
  Expenses; Indemnity

  	
  89

  
	
  SECTION
  9.06.

  	
  Right of Setoff

  	
  91

  
	
  SECTION
  9.07.

  	
  Applicable Law

  	
  91

  
	
  SECTION
  9.08.

  	
  Waivers; Amendment

  	
  91

  
	
  SECTION
  9.09.

  	
  Interest Rate Limitation

  	
  92

  
	
  SECTION
  9.10.

  	
  Entire Agreement

  	
  93

  
	
  SECTION
  9.11.

  	
  WAIVER OF JURY TRIAL

  	
  93

  
	
  SECTION
  9.12.

  	
  Severability

  	
  93

  

 

iii

 

	
  SECTION
  9.13.

  	
  Counterparts

  	
  93

  
	
  SECTION
  9.14.

  	
  Headings

  	
  94

  
	
  SECTION
  9.15.

  	
  Jurisdiction; Consent to Service of Process

  	
  94

  
	
  SECTION
  9.16.

  	
  Confidentiality

  	
  94

  
	
  SECTION
  9.17.

  	
  USA PATRIOT Act Notice

  	
  95

  
	
  SECTION
  9.18.

  	
  Intercreditor Agreement

  	
  95

  

 

	
  SCHEDULES

  	
   

  
	
   

  	
   

  
	
  Schedule
  1.01(a)

  	
  -

  	
  Subsidiary Guarantors

  	
   

  
	
  Schedule
  1.01(b)

  	
  -

  	
  Mortgaged Property

  	
   

  
	
  Schedule
  1.01(c)

  	
  -

  	
  Disqualified Institutions

  	
   

  
	
  Schedule
  2.01

  	
  -

  	
  Lenders and Commitments

  	
   

  
	
  Schedule
  3.08

  	
  -

  	
  Subsidiaries

  	
   

  
	
  Schedule
  3.09

  	
  -

  	
  Litigation

  	
   

  
	
  Schedule
  3.16

  	
  -

  	
  Environmental Matters

  	
   

  
	
  Schedule
  3.18

  	
  -

  	
  Insurance

  	
   

  
	
  Schedule
  3.17(a)

  	
  -

  	
  UCC Filing Offices

  	
   

  
	
  Schedule
  3.17(c)

  	
  -

  	
  Mortgage Filing Offices

  	
   

  
	
  Schedule
  3.18(a)

  	
  -

  	
  Owned Real Property

  	
   

  
	
  Schedule
  3.18(b)

  	
  -

  	
  Leased Real Property

  	
   

  
	
  Schedule
  4(d)

  	
  -

  	
  Local Counsel

  	
   

  
	
  Schedule
  6.01

  	
  -

  	
  Existing Indebtedness

  	
   

  
	
  Schedule
  6.02

  	
  -

  	
  Existing Liens

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  
	
   

  	
   

  
	
  Exhibit A

  	
  -

  	
  Form of Administrative Questionnaire

  	
   

  
	
  Exhibit B

  	
  -

  	
  Form of Assignment and Acceptance

  	
   

  
	
  Exhibit C

  	
  -

  	
  Form of Borrowing Request

  	
   

  
	
  Exhibit D

  	
  -

  	
  Form of Second Lien Guarantee and Collateral Agreement

  	
   

  
	
  Exhibit E

  	
  -

  	
  Form of Intercreditor Agreement

  	
   

  
	
  Exhibit F

  	
  -

  	
  Form of Second Lien Mortgage

  	
   

  
	
  Exhibit G

  	
  -

  	
  Form of Non-Bank Certificate

  	
   

  
	
  Exhibit H-1

  	
  -

  	
  Form of Second Lien Trademark Security Agreement

  	
   

  
	
  Exhibit H-2

  	
  -

  	
  Form of Second Lien Patent Security Agreement

  	
   

  
	
  Exhibit H-3

  	
  -

  	
  Form of Second Lien Copyright Security Agreement

  	
   

  
					

 

iv

 

SECOND LIEN CREDIT AGREEMENT dated as of June 30, 2006 (this “Agreement”), among HAWKEYE
INTERMEDIATE, LLC, a Delaware limited liability company, THL - HAWKEYE
ACQUISITION LLC, a Delaware limited liability company (“Merger
Sub”) to be merged with and into HAWKEYE RENEWABLES, LLC, a
Delaware limited liability company (the “Company”), the LENDERS (as defined herein), and
CREDIT SUISSE, as administrative agent (in such capacity, the “Administrative Agent”) and as collateral agent (in such
capacity, the “Collateral
Agent”) for the
Lenders.

 

RECITALS

 

A.            Pursuant to the
Purchase Agreement (such term and each other capitalized term used but not
defined in these recitals having the meaning set forth in Article I)
(a) Hawkeye Holdings, L.L.C. (the “Seller”)
will contribute 100% of the membership interests of the Company to Holdings (which
Equity Interests shall be Qualified Capital Stock or shall have terms
reasonably acceptable to the Arrangers), (b) certain affiliates of Thomas
H. Lee Partners, L.P. and certain other investors (collectively, the “Investors”) will acquire, for cash
consideration, directly or indirectly, approximately 80% of the Equity
Interests in Holdings from the Seller (the “Acquisition”)
with the Seller retaining the remaining approximately 20% of the Equity
Interests in Holdings and (c) Merger Sub will be merged with and into the
Company, with the Company surviving as a wholly owned subsidiary of Holdings.

 

B.            The Borrower has
requested the Lenders to extend credit in the form of Loans on the Closing
Date, in an aggregate principal amount not in excess of $150,000,000.

 

C.            The Lenders are
willing to extend such credit to the Borrower on the terms and subject to the
conditions set forth herein. Accordingly, the parties hereto agree as follows:

 

ARTICLE I

Definitions

 

SECTION 1.01. Defined Terms. As
used in this Agreement, the following terms shall 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.

 

“Acquisition” shall have the
meaning assigned to such term in the recitals.

 

“Adjusted LIBO Rate” shall
mean, with respect to any Eurodollar Borrowing for any Interest Period, an
interest rate per annum equal to the product of (a) the LIBO Rate in
effect for such Interest Period and (b) Statutory Reserves.

 

 

“Administrative Agent” shall
have the meaning assigned to such term in the preamble.

 

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

 

“Affiliate” shall mean, when
used 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; provided,
however, that no Lender (nor any of its Affiliates) shall be deemed
to be an Affiliate of Holdings, the Borrower or any of their Subsidiaries as a
result of the Lenders and their Affiliates holding in the aggregate, directly
or indirectly, 20% or less of the Equity Interests of Holdings.

 

“Agreement” shall have the
meaning assigned to such term in the preamble.

 

“Alternate Base Rate” shall
mean, for any day, a rate per annum equal to the greater of (a) the Prime
Rate in effect on such day and (b) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. Any change in the Alternate Base Rate
due to a change in the Prime Rate or the Federal Funds Effective Rate shall be
effective on the effective date of such change in the Prime Rate or the Federal
Funds Effective Rate, as the case may be.

 

“Applicable Percentage” shall
mean, for any day, (a) with respect to any Eurodollar Loan, 7.25% and
(b) with respect to any ABR Loan, 6.25%.

 

“Arrangers” shall mean Credit
Suisse Securities (USA) LLC and Banc of America Securities LLC in their
capacity as joint lead arrangers for the Credit Facility.

 

“Asset Sale” shall mean the
sale, transfer or other disposition (by way of merger, casualty, condemnation
or otherwise) by the Borrower or any of the Subsidiaries to any person other
than the Borrower or any Subsidiary of (a) any Equity Interests of any of
the Subsidiaries or (b) any other assets of the Borrower or any of the
Subsidiaries.

 

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

 

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

 

“Borrower” shall mean (a)
prior to the consummation of the Merger, Merger Sub, and (b) upon and after
consummation of the Merger, the Company as the surviving entity of the Merger.

 

2

 

“Borrowing” shall mean 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.

 

“Borrowing Request” shall mean
a request by the Borrower in accordance with the terms of Section 2.03 and
substantially in the form of Exhibit C, or such other form as shall be
approved by the Administrative Agent.

 

“Business Day” shall mean any
day other than a Saturday, Sunday or day on which banks in New York City are generally
authorized or required by law to close; provided, however, that when used in connection with a Eurodollar Loan
(including with respect to all notices and determinations in connection
therewith and any payments of principal, interest or other amounts thereon),
the term “Business Day” shall also
exclude any day on which banks are generally not open for dealings in dollar
deposits in the London interbank market.

 

“Capital
Expenditures” shall mean, for any period, the additions to
property, plant and equipment and other capital expenditures of Holdings and
its Subsidiaries that are (or should be) set forth in a consolidated statement
of cash flows of Holdings; provided, that
Capital Expenditures shall not include any such expenditures which constitute
(a) a Permitted Acquisition, (b) to the extent permitted by this Agreement, a
reinvestment of the Net Cash Proceeds of any Asset Sale in accordance with
Section 2.13(a), (c) expenditures of proceeds of insurance settlements,
condemnation awards and other settlements in respect of lost, destroyed,
damaged or condemned assets or other property to the extent such expenditures
are made to replace or repair such lost, destroyed, damaged or condemned
assets, equipment or other property or otherwise to acquire, maintain, develop,
construct, improve, upgrade or repair assets or properties useful in the
business of the Borrower and the Subsidiaries, (d) interest capitalized during
such period, (e) expenditures that are accounted for as capital expenditures of
such person and that actually are paid for by a third party and for which none
of the Borrower or any of its Subsidiaries has provided or is required to
provide or incur, directly or indirectly, any consideration or obligation to
such third party or any other person (whether before, during or after such
period), (f) the book value of any asset owned by such person prior to or
during such period as a result of such person reusing or beginning to reuse
such asset during such period without a corresponding expenditure actually
having been made in such period; provided, that
(i) any expenditure necessary in order to permit such asset to be reused shall
be included as a Capital Expenditure during the period that such expenditure
actually is made and (ii) such book value shall have been included in Capital
Expenditures when such asset was originally acquired, and (g) the purchase
price of property purchased during such period to the extent the consideration
therefor consists of any combination of (i) used or surplus property traded in
at the time of such purchase and (ii) the proceeds of a concurrent sale of used
or surplus property, in each case, in the ordinary course of business.

 

“Capital Lease Obligations” of
any person shall mean 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 

 

3

 

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.

 

“CECF Percentage” shall mean,
with respect to any date, 0%; provided, however, if the Total Leverage Ratio as of the end of last
fiscal quarter for which financial statements have been delivered is less than 4.00
to 1.00, then the CECF Percentage with respect to such date shall mean 25%; provided, further, however, that if the Total Leverage Ratio as of the end of last
fiscal quarter for which financial statements have been delivered is less than 3.50,
to 1.00, then the CECF percentage with respect to such date shall mean 50%.

 

A “Change in Control” shall be
deemed to have occurred if:

 

(a)           the Permitted Investors
cease to have the power, directly or indirectly, to vote or direct the voting
of Equity Interests of Holdings representing a majority of the ordinary voting
power for the election of directors (or equivalent governing body) of Holdings;
provided, that the occurrence of the
foregoing event shall not be deemed a Change of Control if,

 

(i)            any time prior to the consummation
of a Qualified Public Offering, and for any reason whatsoever, (A) the
Permitted Investors otherwise have the right, directly or indirectly, to
designate (and do so designate) a majority of the board of directors of
Holdings or (B) the Permitted Investors own, directly or indirectly, of record
and beneficially an amount of Equity Interests of Holdings having ordinary
voting power that is equal to or more than 50% of the amount of Equity
Interests of Holdings having ordinary voting power owned, directly or
indirectly, by the Permitted Investors of record and beneficially as of the
Closing Date (determined by taking into account any stock splits, stock
dividends or other events subsequent to the Closing Date that changed the
amount of Equity Interests, but not the percentage of Equity Interests, held by
the Permitted Investors) and such ownership by the Permitted Investors
represents the largest single block of Equity Interests of Holdings having
ordinary voting power held by any person or related group for purposes of
Section 13(d) of the Securities Exchange Act of 1934, or

 

(ii)           at any time after the consummation of
a Qualified Public Offering, and for any reason whatsoever, (A) no “person” or “group”
(as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934 as in effect on the date hereof, but excluding any employee benefit
plan of such person and its Subsidiaries, and any person or entity acting in
its capacity as trustee, agent or other fiduciary or administrator of any such
plan), excluding the Permitted Investors, shall become the “beneficial owner”
(as defined in Rules 13(d)-3 and 13(d)-5 under such Act), directly or
indirectly, of more than the greater of (x) 35% of outstanding Equity Interests
of Holdings having ordinary voting power and (y) the percentage of the then
outstanding Equity Interests of Holdings having ordinary voting power owned,
directly or indirectly, beneficially 

 

4

 

and of record by the Permitted Investors, and (B) during each period of
twelve consecutive months, a majority of the board of directors of Holdings
shall consist of the Continuing Directors; or

 

(b)           any change in
control (or similar event, however denominated) with respect to Holdings, the
Borrower or any Subsidiary shall occur under and as defined in the First Lien
Credit Agreement or in respect of Material Indebtedness of Holdings, the
Borrower or any Subsidiary; or

 

(c)           Holdings shall
directly own, beneficially and of record, less than 100% of the issued and
outstanding Equity Interests of the Borrower.

 

“Change in Law” shall mean (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, for purposes of Section 2.14, by
any lending office of such Lender or by such Lender’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.

 

“Closing Date” shall mean June 30,
2006.

 

“Code” shall mean the Internal
Revenue Code of 1986, as amended from time to time, or any legislation
successor thereto.

 

“Collateral” shall mean all
property and assets of the Loan Parties, now owned or hereafter acquired, upon
which a Lien is purported to be created by any Security Document, and shall
include the Mortgaged Properties.

 

“Collateral Agent” shall have
the meaning assigned to such term in the preamble.

 

“Commitment” shall mean, with
respect to each Lender, the commitment of such Lender to make Loans hereunder
as set forth on Schedule 2.01, or in the Assignment and Acceptance
pursuant to which such Lender assumed its Commitment, as applicable, as the
same may be (a) reduced from time to time pursuant to Section 2.09
and (b) reduced or increased from time to time pursuant to assignments by
or to such Lender pursuant to Section 9.04.

 

“Company” shall have the
meaning assigned to such term in the preamble.

 

“Confidential Information Memorandum”
shall mean the Confidential Information Memorandum dated June 2006, relating to
the syndication of the Credit Facilities.

 

“Consolidated
EBITDA” shall mean, for any period, Consolidated Net Income for
such period plus

 

5

 

(a)           without duplication
and to the extent deducted in determining such Consolidated Net Income, the sum
of

 

(i)            consolidated interest expense for
such period,

 

(ii)           consolidated income, franchise or
similar tax expense for such period,

 

(iii)          foreign currency translation gain or
loss,

 

(iv)          all amounts attributable to
depreciation and amortization for such period,

 

(v)           fees and expenses incurred in
connection with the Transactions, any Investment permitted under Section 6.04,
the issuance of Equity Interests or Indebtedness or any exchange, refinancing
or other early extinguishment of Indebtedness permitted by this Agreement (in
each case, whether or not consummated),

 

(vi)          any non-cash charges, including those
resulting from any amortization, write-up, write-down or write-off of assets
with respect to assets revalued upon the application of purchase accounting (including
tangible and intangible assets, goodwill, deferred financing costs and
inventory (including any adjustment reflected in the “cost of goods sold”
or similar line item of the financial statements)) in connection with the
Transactions, Permitted Acquisitions or any merger, consolidation or similar
transaction not prohibited by this Agreement, but excluding the write-down of
current assets in the ordinary course of business,

 

(vii)         letter of credit fees,

 

(viii)        non-recurring or unusual cash charges
(including startup costs) for such period in an amount not to exceed $3,500,000,

 

(ix)           to the extent actually reimbursed,
expenses incurred to the extent covered by indemnification provisions in any
agreement in connection with a Permitted Acquisition,

 

(x)            to the extent covered by insurance,
expenses with respect to liability or casualty events, business interruption or
product recalls,

 

(xi)           management fees permitted under
Section 6.07,

 

(xii)          any unrealized losses on Hedging
Agreements; and

 

(xiii)         if applicable, the Cure Amount in
accordance with Article VII,

 

minus (b) without duplication, the sum of

 

6

 

(i)            all cash payments made during such
period on account of non-cash charges added to Consolidated Net Income (except
as set forth in clause (a)(viii) above) in a previous period,

 

(ii)           any Restricted Payments made by
Holdings to Parent pursuant to Section 6.06(a)(viii) (A), (F) and (G),

 

(iii)          non-recurring or unusual gains for such
period to the extent added in determining Consolidated Net Income, and

 

(iv)          any unrealized gains on Hedging
Agreements;

 

provided,
however, that for the purposes of determining the
Total Leverage Ratio, (A) there shall be included in determining Consolidated
EBITDA for any period, without duplication, the Consolidated EBITDA of any person,
line of business or facility acquired (other than in the ordinary course of
business) by the Borrower or any of its Subsidiaries during such period on a
Pro Forma Basis, and (B) there shall be excluded in determining Consolidated
EBITDA for any period, without duplication, the Consolidated EBITDA of any person,
line of business or facility that is the subject of an Asset Sale by the
Borrower or any of its Subsidiaries during such period on a Pro Forma Basis.

 

For purposes of determining the Total Leverage Ratio and any Pro Forma
Basis calculations required by this Agreement, Consolidated EBITDA of Holdings will
be deemed to be equal to (i) for the fiscal quarter ended on September 30,
2005, $45.7 million, (ii) for the fiscal quarter ended on December 31,
2005, $45.7 million, (iii) for the fiscal quarter ended on March 31, 2006,
$45.7 million, and (iv) for the fiscal quarter ended June 30, 2006, $45.7 million.

 

“Consolidated Net Income” shall mean, for
any period with respect to any person, the net income or loss of such person for
such period determined on a consolidated basis in accordance with GAAP; provided, that there shall be excluded (without
duplication):

 

(a)           the income of
any Subsidiary (other than a Loan Party) to the extent that the declaration or
payment of dividends or similar distributions by such Subsidiary of that income
is not at the time permitted by operation of the terms of its charter or any
agreement, instrument, judgment, decree, statute, rule or governmental
regulation applicable to such Subsidiary,

 

(b)           the income or loss of any person accrued prior to the date
(i) it becomes a Subsidiary or is merged into or consolidated with such person
or (ii) its assets are acquired by such person or its Subsidiaries,

 

(c)           the income or loss in respect of any Investment in a joint
venture (other than a Subsidiary) except to the extent of the amount of
dividends or other distributions actually paid to such person during such
period,

 

7

 

(d)           after-tax gains and losses realized upon the sale or other
disposition of any property that is sold or otherwise disposed of other than in
the ordinary course of business, and

 

(e)           extraordinary, gains, losses or charges.

 

“Continuing Directors” means
the directors of Holdings on the Closing Date, as elected or appointed after
giving effect to the Acquisition and the other transactions contemplated
hereby, and each other director, if, in each case, such other director’s
nomination for election to the board of directors of Holdings is recommended by
a majority of the then Continuing Directors or such other director receives the
vote of the Permitted Investors in his or her election by the stockholders of
Holdings.

 

“Control” shall mean 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
ownership of voting securities, by contract or otherwise, and the terms “Controlling” and “Controlled” shall have meanings
correlative thereto.

 

“Corporate Taxpayer” shall
mean a standalone corporation that is the “common parent” of a consolidated,
combined, unitary or other similar (as the case may be) Tax group that includes
the Borrower and the Subsidiaries.

 

“Credit Facility” shall mean
the term loan facility provided for by this Agreement.

 

“Cumulative Excess Cash Flow”
as of any date, an amount equal to the excess, if any, of (a) the sum of
Excess Cash Flow for each fiscal year of Holdings ended on or after December 31,
2007 and prior to such date for which audited financial statements have been
delivered pursuant to Section 5.04 over (b) the aggregate principal
amount of all optional prepayments of Loans, made during such fiscal year; provided, that the excess of (a) over (b) shall not be less
than zero for any fiscal year.

 

“Cure Amount” shall have the
meaning assigned to such term in Article VII.

 

“Cure Right” shall have the
meaning assigned to such term in Article VII.

 

“Current Assets” shall mean, at any time,
the consolidated current assets (other than cash, Permitted Investments) of
Holdings, the Borrower and the Subsidiaries.

 

“Current Liabilities” shall mean, at any
time, the consolidated current liabilities of Holdings, the Borrower and the
Subsidiaries at such time, but excluding, without duplication, (a) the current
portion of any long term Indebtedness and (b) outstanding revolving loans
and swingline loans under the First Lien Credit Agreement.

 

“Declined
Proceeds” shall have the meaning assigned to such term in
Section 2.13(d).

 

8

 

“Default” shall mean any event
or condition which constitutes an Event of Default or which upon notice, lapse
of time or both would constitute an Event of Default.

 

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

 

“Discharge of First Lien Obligations”
shall have the meaning assigned to such term in the Intercreditor Agreement.

 

“Disqualified Institutions”
shall mean those institutions set forth on Schedule 1.01(c) hereto.

 

“Disqualified Stock” shall
mean any Equity Interest that, by its terms (or by the terms of any security or
other Equity Interest into which it is convertible or for which it is
exchangeable), or upon the happening of any event, (a) matures (excluding any
maturity as the result of an optional redemption by the issuer thereof) or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof, in whole or in part, or
requires the payment of any cash dividend or any other scheduled payment
constituting a return of capital, in each case at any time on or prior to the
date which is ninety-one (91) days after the Maturity Date, or (b) is
convertible into or exchangeable (unless at the sole option of the issuer
thereof) for (i) Indebtedness or (ii) any Equity Interest referred to
in clause (a) above, in each case at any time prior to the date which is
ninety-one (91) days after the Maturity Date.

 

“dollars” or “$” shall mean lawful money of the
United States of America.

 

“Domestic Subsidiaries” shall
mean all Subsidiaries incorporated or organized under the laws of the United
States of America, any State thereof or the District of Columbia.

 

“ECF Percentage” shall mean,
with respect to any fiscal year, 50%; provided, however, if the Total Leverage Ratio as of the end of a
fiscal year is less than 2.50 to 1.00, then the ECF Percentage with respect to
such fiscal year shall mean 25%.

 

“Environmental Laws” shall
mean all applicable Federal, state, local and foreign laws (including common
law), treaties, regulations, rules, ordinances, codes, decrees, judgments,
directives, orders (including consent orders), and agreements having the force
and effect of law in each case, relating to protection of the environment,
natural resources, or to human health and safety as it relates to Hazardous
Materials exposure, the presence or Release of Hazardous Materials in the
environment, or the generation, manufacture, processing, distribution, use,
treatment, storage, transport, recycling or handling of, or the arrangement for
such activities with respect to, Hazardous Materials.

 

9

 

“Environmental Liability”
shall mean all liabilities, obligations, damages, losses, claims, actions,
suits, judgments, orders, fines, penalties, fees, expenses and costs (including
administrative oversight costs, natural resource damages and remediation
costs), whether contingent or otherwise, arising out of or relating to
(a) compliance or non-compliance with 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 of any Hazardous Materials or (e) any contract,
agreement or other consensual arrangement pursuant to which liability is
assumed or imposed with respect to any of the foregoing.

 

“Equity Contribution” shall
mean the cash amounts contributed by the Investors towards the payment of the
purchase price for the Acquisition.

 

“Equity Interests” shall mean
shares of capital stock, partnership interests, membership interests in a
limited liability company, beneficial interests in a trust or other equity
interests in any person.

 

“ERISA” shall mean the
Employee Retirement Income Security Act of 1974, as the same may be amended
from time to time.

 

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

 

“ERISA Event” shall mean
(a) any “reportable event”, as defined in Section 4043 of ERISA or
the regulations issued thereunder, with respect to a Plan (other than an event
for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an “accumulated funding deficiency” (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or
Section 303(d) of ERISA of an application for a waiver of the minimum
funding standard with respect to any Plan; (d) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability under Title IV of
ERISA with respect to the termination of any Plan or the withdrawal or partial
withdrawal of the Borrower or any of its ERISA Affiliates from any Plan or
Multiemployer Plan; (e) the receipt by the Borrower or any of its ERISA
Affiliates from the PBGC or a plan administrator of any notice relating to the
intention to terminate any Plan or Plans or to appoint a trustee to administer
any Plan; (f) the adoption of any amendment to a Plan that would require
the provision of security pursuant to Section 401(a)(29) of the Code or Section
307 of ERISA; (g) the receipt by the Borrower or any of its ERISA
Affiliates of any notice, or the receipt by any Multiemployer Plan from the
Borrower or any of its ERISA Affiliates 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; (h) the occurrence of a “prohibited transaction” (within
the meaning of Section 4975 of the Code) with respect to which the Borrower or
any of the Subsidiaries is a “disqualified person” (within the meaning of
Section 4975 of the Code) or with respect to which the Borrower or any such
Subsidiary could otherwise be 

 

10

 

liable; or (i) any other extraordinary event
or condition with respect to a Plan or Multiemployer Plan (other than
liabilities arising under clauses (a) through (h) above and any
liabilities for routine plan contributions and claims for benefits) that could
result in liability of the Borrower or any Subsidiary.

 

“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” shall have
the meaning assigned to such term in Article VII.

 

“Excess Cash Flow” shall mean, for any
fiscal year of Holdings, the excess of:

 

(a)           the sum, without duplication, of

 

(i)            Consolidated EBITDA for such fiscal
year,

 

(ii)           reductions to
noncash working capital of Holdings and its Subsidiaries for such fiscal year (i.e., the decrease, if any, in Current Assets minus Current
Liabilities from the beginning to the end of such fiscal year),

 

(iii)          foreign currency
translation gains received in cash, to the extent not otherwise included in
calculating Consolidated EBITDA, and

 

(iv)          extraordinary,
unusual or nonrecurring cash gains (other than gains on Asset Sales), to the
extent not otherwise included in calculating Consolidated EBITDA, minus

 

(b)           the sum, without duplication, of

 

(i)            the amount of any
taxes payable in cash by Holdings and its Subsidiaries with respect to such
fiscal year (to the extent not otherwise deducted in calculating Consolidated
EBITDA),

 

(ii)           consolidated
interest expense for such fiscal year, to the extent payable in cash and not
otherwise deducted in calculating Consolidated EBITDA,

 

(iii)          foreign currency translation
losses payable in cash, to the extent not otherwise deducted in calculating
Consolidated EBITDA,

 

(iv)          Capital Expenditures
made in cash during such fiscal year, except to the extent financed with the
proceeds of long-term Indebtedness,

 

(v)           permanent repayments
of long-term Indebtedness (other than Loans but including Capital Lease
Obligations) made by the Borrower and the Subsidiaries during such fiscal year,
but only to the extent that such repayments (A) by their terms cannot be
reborrowed or redrawn and (B) are not financed with the proceeds of long-term
Indebtedness,

 

11

 

(vi)          additions to noncash
working capital for such fiscal year (i.e., the
increase, if any, in Current Assets minus Current Liabilities from the
beginning to the end of such fiscal year),

 

(vii)         Tax Distributions
and Specified Tax Payments paid during such fiscal year, to the extent not
otherwise deducted in calculating Consolidated EBITDA,

 

(viii)        Restricted Payments
made by Holdings under Section 6.06(a)(viii) (other than clause (C)
thereof)

 

(ix)           letter of credit
fees, to the extent not otherwise deducted in calculating Consolidated EBITDA,

 

(x)            extraordinary,
unusual or nonrecurring cash charges, to the extent not otherwise deducted in
calculating Consolidated EBITDA,

 

(xi)           fees and expenses incurred in connection
with the Transactions, any Investment permitted under Section 6.04, the
issuance of Equity Interests or Indebtedness or any exchange, refinancing or
other early extinguishment of Indebtedness permitted by this Agreement (in each
case, whether or not consummated),

 

(xii)          cash charges added
to Consolidated EBITDA pursuant to clause (a)(viii) thereof,

 

(xiii)         management fees permitted by Section 6.07,
to the extent not otherwise deducted in calculating Consolidated EBITDA,

 

(xiv)        cash used to
consummate a Permitted Acquisition (including, without duplication, cash used
to make a Restricted Payment under Section 6.06(a)(viii)(C)) except to the
extent financed with the proceeds of long-term Indebtedness,

 

(xv)         cash used to make Investments
pursuant to Section 6.04(o), except to the extent financed with the proceeds
of the issuance of Equity Interests or Cumulative Excess Cash Flow,

 

(xvi)        cash expenditures in
respect of Hedging Agreements, to the extent not otherwise deducted in
calculating Consolidated EBITDA,

 

(xvii)       Cure Amount, if any,
and

 

(xviii)      to the extent added
to Consolidated Net Income, cash losses from any sale or disposition outside
the ordinary course of business.

 

“Excluded Taxes” shall mean,
with respect to the Administrative Agent, any Lender or any other recipient of
any payment to be made by or on account of any 

 

12

 

obligation of the Borrower hereunder, (a) income or franchise
taxes imposed on (or measured by) its net income or any similar taxes as a
result of a present or former connection between such recipient and the
jurisdiction imposing such tax (or any political subdivision thereof), other
than any such connection arising solely from such recipient having executed,
delivered or performed its obligations or received a payment under, or
enforced, this Agreement or any other Loan Document, (b) any branch
profits taxes imposed by the United States of America or any similar tax
imposed by any other jurisdiction described in clause (a) above and (c) in
the case of a Foreign Lender (other than an assignee pursuant to a request by
the Borrower under Section 2.21(a)), any withholding tax that (i) 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 (ii) is attributable to such Foreign Lender’s failure to comply with
Section 2.20(e) without regard to the proviso of the first sentence or the
last sentence therein, except in the case of clause (i) to the extent that
such Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive additional
amounts from the Borrower with respect to such withholding tax pursuant to
Section 2.20(a).

 

“Existing Debt” shall mean (a) all
Indebtedness under the Credit Agreement dated as of February 24, 2005, as
amended, among the Company, the Seller, the lenders party thereto, and Credit
Suisse and (b) certain existing indebtedness of the Seller in an aggregate
outstanding principal amount of approximately $53,700,000.

 

“Existing Letters of Credit”
shall mean all letters of credit issued and outstanding on the Closing Date
under the Credit Agreement dated as of February 24, 2005, as amended,
among the Company, the Seller, the lenders party thereto, and Credit Suisse.

 

“Federal Funds Effective Rate”
shall mean, for any day, the weighted average 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 of the quotations for the day for
such transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.

 

“Fee Letter” shall mean the Second
Amended and Restated Fee Letter, dated June 13, 2006, among the Borrower,
Credit Suisse, Bank of America, N.A., Goldman Sachs Credit Partners, L.P.,
Morgan Stanley Senior Funding, Inc., Morgan Stanley & Co. Incorporated and
the Arrangers.

 

“Fees” shall have the meaning
assigned to such term in Section 2.05.

 

“Financial Officer” of any
person shall mean the chief executive officer, chief financial officer, any
vice president, principal accounting officer, treasurer, assistant treasurer or
controller of such person.

 

13

 

“First Lien Credit
Agreement” shall mean the First Lien Credit Agreement dated as
of June 30, 2006, among Holdings, the Borrower, the lenders from time to
time party thereto and Credit Suisse, as administrative agent and collateral
agent, as amended, restated, supplemented or otherwise modified from time to
time.

 

“First Lien Guarantee and
Collateral Agreement” shall mean the First Lien Guarantee and
Collateral Agreement, among Holdings, the Borrower, the Subsidiaries party
thereto and Credit Suisse, as Collateral Agent, dated the Closing Date.

 

“First Lien Loan Documents”
shall have the meaning assigned to the term “Loan Documents” in the First Lien
Credit Agreement.

 

“First Lien Loans” shall mean “Loans”
as defined in the First Lien Credit Agreement.

 

“First Priority Liens”
shall have the meaning assigned to such term in the Intercreditor Agreement.

 

“Foreign Lender” shall mean
any Lender that is organized under or whose primary lending office is subject
to the laws of a jurisdiction other than that in which the Borrower is 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.

 

“Foreign Subsidiary” shall
mean any Subsidiary that is not a Domestic Subsidiary.

 

“GAAP” shall mean United
States generally accepted accounting principles.

 

“Governmental Authority” shall
mean the government of the United States of America or any other nation, 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.

 

“Granting Lender” shall have
the meaning assigned to such term in Section 9.04(i).

 

“Guarantee” of or by any
person shall mean any obligation, contingent or otherwise, of such person
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
such person, 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 of such Indebtedness or other obligation, (b) to
purchase or lease (including pursuant to Synthetic Lease Obligations, if
applicable) property, securities or services for the purpose of assuring the
owner of such Indebtedness or other obligation of the payment of such
Indebtedness or other obligation, 

 

14

 

(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 other obligation; provided, however, that
the term “Guarantee” shall not include endorsements for collection or deposit
in the ordinary course of business or customary and reasonable indemnity
obligations in effect on the Closing Date or entered into in connection with
any acquisition or disposition of assets permitted under this Agreement. The
amount of any Guarantee shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation, or portion thereof, in respect
of which such Guarantee is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by the
guaranteeing person in good faith.

 

“Guarantee and Collateral Agreement”
shall mean the Second Lien Guarantee and Collateral Agreement, substantially in
the form of Exhibit D, among the Loan Parties party thereto and the
Collateral Agent for the benefit of the Secured Parties.

 

“Guarantors” shall mean
Holdings and the Subsidiary Guarantors.

 

“Hazardous Materials” shall
mean any petroleum (including crude oil or fraction thereof) or petroleum
products or byproducts, or any pollutant, contaminant, or hazardous or toxic
substances, materials or wastes defined, or regulated as such by, or pursuant
to, any Environmental Law, or which require removal, remediation or reporting
under any Environmental Law, including asbestos, or asbestos containing material,
radioactive material, polychlorinated biphenyls and urea formaldehyde
insulation.

 

“Hedging Agreement” shall mean
any agreement with respect to any swap, forward, future, cap, collar, floor or
derivative transaction or option or similar agreement involving, or settled by
reference to, one or more rates, currencies, fuel or other 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, however, that no phantom stock or similar plan providing for
payments and on account of services provided by current or former directors,
officers, members of management, employees or consultants of Holdings, the
Borrower or any Subsidiary shall be a Hedging Agreement.

 

“Holdings” shall mean Hawkeye
Intermediate, LLC.

 

“Indebtedness” of any person
shall mean, without duplication, (a) all obligations of such person for
borrowed money, (b) all obligations of such person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such
person under conditional sale or other title retention agreements relating to
property or assets purchased by such person, (d) all obligations of such
person issued or assumed as the deferred purchase price of property or services
(excluding (i) trade accounts payable and accrued obligations incurred in
the ordinary course of business and (ii) any earn-out obligation until
such obligation appears in the liabilities section of the balance sheet of such
person, (iii) any earn-out obligation that appears in the liabilities
section of the 

 

15

 

balance sheet to the extent (A) such person is indemnified for the
payment thereof by a solvent person reasonably acceptable to the Administrative
Agent or (B) amounts applied to the payment therefor are in escrow), (e) all
Indebtedness of others secured by any Lien on property owned or acquired by
such person, whether or not the obligations secured thereby have been assumed,
(f) all Guarantees by such person of Indebtedness of others, (g) all
Capital Lease Obligations of such person, (h) all obligations of such
person as an account party in respect of letters of credit or letters of
guaranty and (i) all obligations of such person in respect of bankers’
acceptances. The Indebtedness of any person shall include the Indebtedness of
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 other person, except to the extent the terms
of such Indebtedness provide that such person is not liable therefor. The
amount of Indebtedness of any person under clause (e) above shall be
deemed to equal the lesser of (x) the aggregate unpaid amount of such
Indebtedness secured by such Lien and (y) the fair market value of the
property encumbered thereby as determined by such person in good faith.

 

“Indemnified Taxes” shall mean
Taxes other than Excluded Taxes and Other Taxes.

 

“Intellectual Property Security Agreement”
shall mean any of the following agreements executed on or after the Closing
Date (a) a Second Lien Trademark Security Agreement substantially in the
form of Exhibit H-1, (b) a Second Lien Patent Security Agreement
substantially in the form of Exhibit H-2 or (c) a Second Lien
Copyright Security Agreement substantially in the form of Exhibit H-3.

 

“Intercreditor Agreement”
shall mean the Intercreditor Agreement, substantially in the form of
Exhibit E, among the Borrower, Holdings, the Subsidiaries of the Borrower
from time to time party thereto, the Collateral Agent and the Collateral Agent
(under and as defined in the First Lien Credit Agreement).

 

“Interest Payment Date” shall
mean (a) with respect to any ABR Loan, the last day of each March, June,
September and December, commencing with September 30, 2006, and
(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 that would have been an Interest Payment Date had
successive Interest Periods of three months’ duration been applicable to such
Borrowing.

 

“Interest Period” shall
mean, with respect to any Eurodollar Borrowing, the period commencing on
the date of such Borrowing and ending on the numerically corresponding day (or,
if there is no numerically corresponding day, on the last day) in the calendar
month that is 1, 2, 3 or 6 (or 9 or 12, if agreed to or
available to all of the participating Lenders) months thereafter, as the
Borrower may elect; provided, however, that 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 such next succeeding Business Day would fall in
the next calendar month, in which case such 

 

16

 

Interest Period shall end on the next preceding Business Day. Interest
shall accrue from and including the first day of an Interest Period to but
excluding the last day of such Interest Period. For purposes hereof, the date
of a Borrowing initially shall be the date on which such Borrowing is made and
thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.

 

“Investments” shall have the
meaning assigned to such term in Section 6.04.

 

“Investors” shall have the
meaning assigned to such term in the recitals.

 

“Lenders” shall mean
(a) the persons listed on Schedule 2.01 (other than any such person
that has ceased to be a party hereto pursuant to an Assignment and Acceptance)
and (b) any person that has become a party hereto pursuant to an
Assignment and Acceptance.

 

“LIBO Rate” shall mean, with
respect to any Eurodollar Borrowing for any Interest Period, the rate per annum
determined by the Administrative Agent at approximately 11:00 a.m. (London
time) on the date that is two Business Days prior to the commencement of such
Interest Period by reference to the British Bankers’ Association Interest
Settlement Rates for deposits in dollars (as set forth by Reuters) for a period
equal to such Interest Period; provided, that,
to the extent that an interest rate is not ascertainable pursuant to the
foregoing provisions of this definition, the “LIBO Rate” shall be the interest
rate per annum determined by the Administrative Agent to be the average of the
rates per annum at which deposits in dollars are offered for such relevant
Interest Period to major banks in the London interbank market in London,
England by the Administrative Agent at approximately 11:00 a.m. (London
time) on the date that is two Business Days prior to the beginning of such
Interest Period.

 

“Lien” shall mean, with
respect to any asset, (a) any mortgage, deed of trust, lien (statutory or
otherwise), pledge, hypothecation, encumbrance, collateral assignment, charge
or security interest in, on or of such asset, and (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.

 

“Loan Documents” shall mean
this Agreement, the Security Documents and the promissory notes, if any,
executed and delivered pursuant to Section 2.04(e).

 

“Loan Parties” shall mean the
Borrower and the Guarantors.

 

“Loans” shall mean the term
loans made by the Lenders to the Borrower pursuant to Section 2.01.

 

“Margin Stock” shall have the
meaning assigned to such term in Regulation U.

 

“Material Adverse Effect”
shall mean (a) a material adverse effect on the business, assets,
operations or financial condition of Holdings and its Subsidiaries, taken as a
whole, (b) a material adverse effect on the ability of the Loan Parties
(taken as 

 

17

 

a whole) to perform any of their material obligations under any Loan
Documents or (c) a material adverse effect on any material rights or
remedies available to the Lenders under any Loan Document taken as a whole.

 

“Material Indebtedness” shall
mean Indebtedness (other than the Loans), or obligations in respect of one or
more Hedging Agreements, of any one or more of Holdings and its Subsidiaries in
an aggregate principal amount exceeding $25,000,000. For purposes of
determining Material Indebtedness, the “principal amount” of the obligations of
Holdings, the Borrower or any Subsidiary in respect of any Hedging Agreement at
any time shall be the maximum aggregate amount (giving effect to any netting
agreements) that Holdings, the Borrower or such Subsidiary would be required to
pay if such Hedging Agreement were terminated at such time.

 

“Maturity Date” shall mean
June 30, 2013.

 

“Merger” shall mean the merger
of Merger Sub with and into the Company, with the Company as the surviving
entity of such merger.

 

“Merger Sub” shall have the
meaning assigned to such term in the preamble.

 

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

 

“Mortgaged Properties” shall
mean, initially, the fee owned real properties of the Loan Parties specified on
Schedule 1.01(b), and shall include each other parcel of fee owned real
property and improvements thereto with respect to which a Mortgage is granted
to secure the Obligations.

 

“Mortgages” shall mean the
mortgages, deeds of trust and other security documents granting a Lien on any fee
owned real property or interest therein to secure the Obligations, each
substantially in the form of Exhibit F or such other form as shall be reasonably
approved by the Collateral Agent.

 

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

 

“Net Cash Proceeds” shall mean
(a) with respect to any Asset Sale, the proceeds thereof in the form of
cash and Permitted Investments (including any such proceeds subsequently
received (as and when received) in respect of noncash consideration initially
received), net of (i) out-of-pocket expenses (including reasonable and
customary broker’s fees or commissions, investment banking fees, consultant
fees, legal fees, survey costs, title insurance premiums, and related search
and recording charges, transfer, recording and similar taxes incurred by Holdings
and the Subsidiaries in connection therewith and the Borrower’s good faith
estimate of income taxes paid or payable in connection with such sale) incurred
in connection with such Asset Sale (including, in the case of any Asset Sale in
respect of property of any Foreign Subsidiary, taxes payable upon the
repatriation of any such proceeds), (ii) amounts provided as a reserve, in
accordance with GAAP, against any liabilities under any indemnification
obligations or purchase price adjustment associated with such Asset Sale (provided, that to the extent 

 

18

 

and at the time any such amounts are released from such reserve, such
amounts shall constitute Net Cash Proceeds), (iii) the principal amount,
premium or penalty, if any, interest and other amounts on any Indebtedness
which is secured by the asset sold and which is repaid (other than (A) any
such Indebtedness assumed or repaid by the purchaser and (B) Indebtedness
hereunder or under the First Lien Credit Agreement); and (b) with respect
to any incurrence of Indebtedness or issuance of any Equity Interests, the cash
proceeds thereof, net of all taxes (including, in the case of such Indebtedness
incurred, or Equity Interests issued, by a Foreign Subsidiary, taxes payable
upon the repatriation of any such proceeds) and customary fees, commissions,
costs and other expenses incurred by Holdings, the Borrower and the
Subsidiaries in connection therewith.

 

“Not Otherwise Applied” means,
with reference to any amount of Net Cash Proceeds of any transaction or event
or of Cumulative Excess Cash Flow, that such amount was not (a) required
to be applied to prepay the First Lien Loans pursuant to the First Lien Credit
Agreement or the Loans pursuant to Section 2.13 and (b) previously
applied in determining the permissibility of a transaction under the Loan
Documents where such permissibility was (or may have been or concurrently will
be) contingent on receipt of such amount or utilization of such amount for a
specified purpose.

 

“Obligations” shall mean all
obligations defined as “Obligations” in the Guarantee and Collateral Agreement
and the other Security Documents.

 

“Other Taxes” shall mean 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 under
any Loan Document or from the execution, delivery or enforcement of, or
otherwise with respect to, any Loan Document.

 

“Parent” shall mean a person formed
for the purpose of owning all of the Equity Interests, directly or indirectly, of
Holdings; provided, however,
that any such person shall cease to be the “Parent” at any time that it owns,
directly or indirectly, less than all of the Equity Interests of Holdings.

 

“PBGC” shall mean the Pension
Benefit Guaranty Corporation referred to and defined in ERISA.

 

“Permitted Acquisition” shall
mean any acquisition by the Borrower or any Subsidiary (or Holdings so long as
Holdings complies with Section 6.06(a)(viii)(C)) of all or substantially
all the assets of, or all the Equity Interests in, a Person or division or line
of business of a Person if, immediately after giving effect thereto,
(a) no Default or Event of Default has occurred and is continuing or would
result therefrom, (b) each Subsidiary formed for purposes of or resulting
from such acquisition shall be a Domestic Subsidiary, (c) all of the
Equity Interests of each Subsidiary formed for the purpose of or resulting from
such acquisition shall be owned directly by the Borrower or a Subsidiary and
all actions required to be taken with respect to each such acquired or newly
formed Subsidiary under Section 5.09 have been taken, (d) Holdings,
the Borrower and the Subsidiaries are in compliance, on a pro forma
basis after giving effect to such acquisition with the covenant contained in
Section 6.10 recomputed as at the last day of 

 

19

 

the most recently ended fiscal quarter of Holdings for which financial
statements are available, as if such acquisition had occurred on the first day
of each relevant period for testing such compliance and (e) the Borrower
has delivered to the Administrative Agent a certificate of a Responsible
Officer to the effect set forth in clauses (a), (b), (c) and (d) above,
together with all relevant financial information for the Person or assets to be
acquired and reasonably detailed calculations demonstrating satisfaction of the
requirement set forth in clause (d) above.

 

“Permitted Investments” shall
mean:

 

(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 one year from the date of acquisition thereof
issued or guaranteed by or placed with, and money market deposit accounts
issued or offered by, the Administrative Agent or any domestic office of any
commercial bank organized under the laws of the United States of America or any
State thereof that 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 of
clause (c) above;

 

(e) investments in “money market funds” within the meaning of Rule 2a-7
of the Investment Company Act of 1940, as amended, substantially all of whose
assets are invested in investments of the type described in clauses (a)
through (d) above;

 

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

 

(g) other short-term investments utilized by Foreign Subsidiaries
in accordance with normal investment practices for cash management in
investments of a type analogous to the foregoing.

 

“Permitted Investors” shall
mean (a) the Sponsor and (b) the members of management of the Parent,
Holdings and its Subsidiaries who are investors, directly or indirectly, in the
Parent or Holdings (collectively, the “Management Investors”);
provided, however,
that, for purposes of the definition of “Change in Control”, if the portion of
the Equity Interests of Holdings having ordinary voting power (within the
meaning of such definition) allocable to Management Investors at any time
exceeds, in 

 

20

 

the aggregate, 35% of the total amount of all such Equity Interests at
such time, then the Permitted Investors shall be deemed not to own or have the
power to vote or direct the voting of the amount of such excess.

 

“Permitted Project Debt” shall
mean Indebtedness of a Project Subsidiary incurred to finance the acquisition
of property relating to and the construction, start up and operation of an
ethanol plant owned by such Project Subsidiary; provided,
that (a) such Indebtedness is not Guaranteed by Holdings, the Borrower or
any other Subsidiary; (b) such Indebtedness is not secured by a Lien on
any assets of Holdings, the Borrower or any other Subsidiary; (c) both
immediately prior and after giving effect to any incurrence of such
Indebtedness, (1) no Default shall exist or result therefrom and
(2) Holdings and its Subsidiaries will be in Pro Forma Compliance with the
covenant set forth in Section 6.10; and (d) all incurrences of Permitted
Project Debt, in the aggregate, may fund the construction, start up or
operation of no more than two ethanol plants.

 

“Permitted Refinancing” shall
mean Indebtedness of Holdings, the Borrower or any Subsidiary issued or
incurred (including by means of the extension or renewal of existing
Indebtedness) to refinance, refund, extend, renew or replace existing
Indebtedness (“Refinanced Indebtedness”); provided, that (a) the principal amount (or, if
incurred with original issue discount, the aggregate accreted value) of such
refinancing, refunding, extending, renewing or replacing Indebtedness (the “New Indebtedness”) is not greater
than the principal amount of such Refinanced Indebtedness plus the amount of
any premiums or penalties and accrued and unpaid interest paid thereon and
reasonable fees and expenses, in each case associated with such refinancing,
refunding, extension, renewal or replacement (or, to the extent such principal
amount is greater, the excess is otherwise permitted by Section 6.01 and shall
not constitute Permitted Refinancing Indebtedness), (b) if such Refinanced
Indebtedness is Permitted Subordinated Debt, Permitted Senior Debt or other
Indebtedness that is Material Indebtedness (or a Permitted Refinancing thereof),
such New Indebtedness has a final maturity that is no sooner than the final
maturity of, and a weighted average life to maturity that is not earlier than
the remaining weighted average life of, such Refinanced Indebtedness, (c) if
such Refinanced Indebtedness or any Guarantees thereof are subordinated to the
Obligations, such New Indebtedness and any Guarantees thereof remain so
subordinated on terms no less favorable to the Lenders, (d) the obligors
in respect of such Refinanced Indebtedness immediately prior to such
refinancing, refunding, extending, renewing or replacing are the only obligors
on such New Indebtedness, except to the extent any other person would be
permitted to Guarantee such New Indebtedness under Section 6.01 or to make
an Investment in, and such new obligor’s obligations in respect of such refinancing
is treated as an Investment in, such person pursuant to Section 6.04 and
(e) if such Refinanced Indebtedness is Permitted Subordinated Debt,
Permitted Senior Debt or other Indebtedness that is Material Indebtedness or (a
Permitted Refinancing thereof), such New Indebtedness contains mandatory
redemption (or similar provisions), covenants and events of default which, taken
as a whole, are determined in good faith by a Financial Officer of the Borrower
to be no less favorable in any material respect to Holdings, the Borrower or
the applicable Subsidiary and the Lenders than the mandatory redemption (or
similar provisions), covenants and events of default or Guarantees, if any, in
respect of such Refinanced Indebtedness; provided, further,
however, that Permitted Refinancing 

 

21

 

shall not include Indebtedness of the Borrower or a Guarantor that
refinances, refunds or replaces (i) any Permitted Project Debt or (ii) any
other Indebtedness of a Subsidiary (other than a Subsidiary Guarantor) except to
the extent the Borrower would be permitted to make an Investment in, and such
refinancing is treated as an Investment in, such Subsidiary pursuant to
Section 6.04.

 

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

 

“Plan” shall mean any employee
pension benefit plan as defined in Section 3(2) of ERISA (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or
Section 412 of the Code or Section 307 of ERISA, and in respect of which
the Borrower or any ERISA Affiliate is (or, if such plan were terminated, would
under Section 4069 of ERISA be deemed to be) an “employer” as defined in
Section 3(5) of ERISA.

 

“Pledged Collateral” shall
have the meaning assigned to such term in the Guarantee and Collateral
Agreement.

 

“Post-Acquisition Period”
shall mean, with respect to any Permitted Acquisition, the period beginning on
the date such Permitted Acquisition is consummated and ending on the last day
of the sixth full consecutive fiscal quarter immediately following the date on
which such Permitted Acquisition is consummated.

 

“Prepayment Asset Sale” shall
mean any Asset Sale, other than an Asset Sale permitted by Section 6.05(b)
(other than clause (x) thereof), to the extent that (a) the aggregate
Net Cash Proceeds realized in a single transaction or series of related
transactions exceed $1,000,000; and (b) the aggregate Net Cash Proceeds of
all such Asset Sales during any fiscal year exceed $5,000,000.

 

“Prime Rate” shall mean the
rate of interest per annum announced from time to time by Credit Suisse as its
prime rate in effect at its principal office in New York City; each change in
the Prime Rate shall be effective as of the opening of business on the date
such change is announced as being effective. The Prime Rate is a reference rate
and does not necessarily represent the lowest or best rate actually available.

 

“Pro Forma Basis”, “Pro Forma Compliance”
and “Pro Forma Effect”
mean, with respect to compliance with any test or covenant hereunder in respect
of any Specified Transactions, the following adjustments in connection
therewith shall be deemed to have occurred as of the first day of the
applicable period of measurement in such test or covenant:  (a) income statement items (whether
positive or negative) attributable to the property or Person subject to such
Specified Transaction, (i) in the case of an Asset Sale of all or
substantially all of the Equity Interests in any Subsidiary or of any division,
product line, or facility used for operations of the Borrower or any of its
Subsidiaries, shall be excluded, and (ii) in the case of a Permitted
Acquisition or investment described in the definition of “Specified Transaction”,
shall be included, 

 

22

 

(b) any retirement of
Indebtedness, and (c) any Indebtedness incurred or assumed by the Borrower
or any of its Subsidiaries in connection therewith and if such Indebtedness has
a floating or formula rate, shall have an implied rate of interest for the
applicable period for purposes of this definition determined by utilizing the
rate which is or would be in effect with respect to such Indebtedness as at the
relevant date of determination; provided, that,
the foregoing pro forma adjustments may be applied to any such test or covenant
solely to the extent that such adjustments are consistent with the definition
of “Consolidated EBITDA” and may take into account reasonably identifiable and
factually supportable cost savings for which the necessary steps have been
implemented or are reasonably expected to be implemented within 18 months after
the closing of the relevant Specified Transaction.

 

“Project
Subsidiary” shall mean a Subsidiary of the Borrower formed
solely for the purpose of acquiring property relating to and the constructing
and operating of one or more ethanol plants (but not to exceed two, in the
aggregate, for all Project Subsidiaries) financed in whole or in part by
Permitted Project Debt.

 

“Purchase Agreement” shall
mean the Membership Interest Purchase Agreement dated as of May 11, 2006,
by and among the Seller, the Company, Merger Sub, THL Hawkeye Acquisition
Partners, THL Hawkeye Acquisition Partners II and THL Hawkeye Acquisition
Partners III.

 

“Qualified Capital Stock” of
any person shall mean any Equity Interest of such person that is not
Disqualified Stock.

 

“Qualified Public Offering”
shall mean the initial underwritten public offering of common Equity Interests
of either (a) Holdings or (b) Parent pursuant to an effective registration
statement filed with the Securities and Exchange Commission in accordance with
the Securities Act of 1933, as amended, that results in at least
$50,000,000 of Net Cash Proceeds to Holdings or Parent.

 

“Register” shall have the
meaning assigned to such term in Section 9.04(d).

 

“Regulation U” shall mean
Regulation U of the Board as from time to time in effect and all official
rulings and interpretations thereunder or thereof.

 

“Regulation X” shall mean
Regulation X of the Board as from time to time in effect and all official
rulings and interpretations thereunder or thereof.

 

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

 

“Related Parties” shall mean,
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.

 

23

 

“Release” shall mean any
release, spill, emission, leaking, dumping, injection, pouring, deposit,
disposal, discharge, dispersal, leaching or migration into or through the
environment or within or upon any building, structure, facility or fixture.

 

“Required Lenders” shall mean,
at any time, Lenders having Loans and Commitments representing more than 50% of
the sum of all Loans outstanding and Commitments at such time.

 

“Responsible Officer” of any
person shall mean any executive officer or Financial Officer of such person and
any other officer or similar official thereof responsible for the
administration of the obligations of such person in respect of this Agreement.

 

“Restricted Payment” shall
mean any dividend or other distribution (whether in cash, securities or other
property) with respect to any Equity Interests in Holdings, the Borrower 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, cancelation or termination of any Equity
Interests in Holdings, the Borrower or any Subsidiary or any option, warrant or
other right to acquire any such Equity Interests in Holdings, the Borrower or
any Subsidiary.

 

“Secured Parties” shall have
the meaning assigned to such term in the Guarantee and Collateral Agreement.

 

“Security Documents” shall
mean the Mortgages, the Guarantee and Collateral Agreement, the Intercreditor
Agreement, the Intellectual Property Security Agreements and each of the other
instruments and documents executed and delivered pursuant to any of the foregoing
or pursuant to Section 5.09.

 

“Seller” shall have the
meaning assigned to such term in the recitals.

 

“Solvent” means, with respect
to any person, (a) the consolidated fair value of the assets of such
person and its Subsidiaries, at a fair valuation, will exceed their
consolidated debts and liabilities, subordinated, contingent or otherwise;
(b) the consolidated present fair saleable value of the property of such
person and its Subsidiaries will be greater than the amount that will be
required to pay the probable liability of their consolidated debts and other
liabilities, subordinated, contingent or otherwise, as such debts and other
liabilities become absolute and matured; (c) such person and its
Subsidiaries will be able to pay their consolidated debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities become
absolute and matured; and (d) such person and its Subsidiaries, taken as a
whole, will not have unreasonably small capital with which to conduct the
business in which they are engaged.

 

“SPC” shall have the meaning
assigned to such term in Section 9.04(i).

 

“S&P” shall mean
Standard & Poor’s Ratings Group, Inc.

 

24

 

“Specified Tax Benefits” shall
mean tax benefits directly or indirectly attributable to (a) any step-up
in the tax basis of any assets of Holdings (or Parent, as applicable) or its
Subsidiaries attributable to (i) the consummation of the Transactions; (ii) the
consummation of a Qualified Public Offering (including all transactions
consummated in connection with such Qualified Public Offering); (iii) the
execution of that certain Indemnity Escrow Agreement (the “Escrow
Agreement”) by and among Holdings, Hawkeye Holdings, L.L.C., THL
Hawkeye Acquisition Partners, THL Hawkeye Acquisition Partners II and THL
Hawkeye Acquisition Partners III, dated June 30, 2006; (iv) the
execution of that certain Tax Receivable Agreement (the “Tax
Receivable Agreement”) to be entered into by and among Parent
(if any), Hawkeye Holdings, L.L.C., Thomas H. Lee Equity Fund VI, L.P., Thomas
H. Lee Parallel Fund VI, L.P., Thomas H. Lee Parallel (DT) Fund VI, L.P.,
Putnam Investment Holdings, LLC, Putnam Investments Employees Security Company
III LLC, and THL Coinvestment Partners, L.P.; (v) any payments made
pursuant to either the Escrow Agreement or the Tax Receivable Agreement; and (b)
any deductible interest paid by Holdings (or Parent, as applicable) on account
of either the Escrow Agreement or the Tax Receivable Agreement.

 

“Specified Tax Payments” shall
mean Restricted Payments or other payments by Parent (if any), Holdings or the
Borrower to current or former Affiliates or members of Parent (if any), Holdings
(or directors, officers or employees of Parent (if any), Holdings, the Borrower
or any Subsidiary or any current or former Affiliate thereof) in respect of any
taxable year of Holdings computed as follows: (a) for so long as Holdings
is not a Corporate Taxpayer, an amount equal to the excess of (i) the
amount of U.S. federal, state and local income taxes that would have been
payable by Holdings and its Subsidiaries in respect of such taxable year if
Holdings were a Corporate Taxpayer (without taking into account the Specified
Tax Benefits) over (ii) the amount of Tax Distributions made in respect of
such taxable year, and (b) in the event Holdings becomes a Corporate
Taxpayer, an amount equal to the excess of (i) the amount U.S. federal,
state and local income taxes that would have been payable by Holdings and its
Subsidiaries (without taking account the Specified Tax Benefits) over (ii) the
actual U.S. federal, state and local income taxes payable by Holdings and its
Subsidiaries in respect of such taxable year; provided,
however, that (x) the Specified Tax
Payments made in any fiscal year of Holdings shall not exceed $20,000,000 and (y) Specified
Tax Payments shall not be paid prior to the time such tax period ends and the
amount determinable under clauses (a) and (b) is ascertained; provided, further, that for the avoidance of doubt,
Specified Tax Payments shall be made quarterly at or about the dates that
estimated income tax payments are required to be paid and at or about the time
of the filing of the annual income tax return (all as contemplated in the Tax
Receivable Agreement).

 

“Specified Transaction” means,
with respect to any period, any Investment, Asset Sale, incurrence or repayment
of Indebtedness or Restricted Payment that by the terms of this Agreement
requires “Pro Forma Compliance” with a test or covenant hereunder or requires
such test or covenant to be calculated on a “Pro Forma Basis”.

 

“Sponsor” shall mean Thomas H.
Lee Partners L.P. and its Affiliates.

 

25

 

“Sponsor Agreement” shall mean
the Management Agreement dated as of June 30, 2006, among Holdings, the
Borrower and THL Managers VI, LLC.

 

“Statutory Reserves” shall
mean 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 and any
other banking authority, domestic or foreign, to which any Lender (including
any branch, Affiliate, or other fronting office making or holding a Loan) is
subject for Eurocurrency Liabilities (as defined in Regulation D of the
Board). Eurodollar Loans shall be deemed to constitute Eurocurrency Liabilities
as defined in Regulation D of the Board) and to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or offsets
that may be available from time to time to any Lender under such
Regulation D. Statutory Reserves shall be adjusted automatically on and as
of the effective date of any change in any reserve percentage.

 

“subsidiary” shall mean, with
respect to any person (herein referred to as the “parent”),
any corporation, partnership, limited liability company, association or other
business entity of which securities or other ownership interests representing
more than 50% of the ordinary voting power or more than 50% of the general
partnership interests are, at the time any determination is being made, owned, Controlled
or held by the parent, one or more subsidiaries of the parent or a combination
thereof.

 

“Subsidiary” shall mean any
subsidiary of Holdings or the Borrower; provided, that
so long as D&W Railroad, LLC is not a wholly owned Subsidiary of Holdings,
it shall not be considered a Subsidiary for the purposes of Article VII.

 

“Subsidiary Guarantor” shall
mean each Subsidiary listed on Schedule 1.01(a), and each other Subsidiary
that is or becomes a party to the Guarantee and Collateral Agreement, excluding
(a) D&W Railroad, LLC, so long as it is not a wholly owned Subsidiary
of Holdings, and (b) any Project Subsidiary.

 

“Synthetic Lease Obligations”
shall mean all monetary obligations of a person under (a) a so-called
synthetic, off-balance sheet or tax retention lease or (b) an agreement
for the use or possession of any property (whether real, personal or mixed)
creating obligations which do not appear on the balance sheet of such person,
but which, upon the insolvency or bankruptcy of such person, would be
characterized as Indebtedness of such person (without regard to accounting
treatment).

 

“Tax Distributions” shall
mean, so long as Holdings is not a Corporate Taxpayer, Restricted Payments by
Holdings in respect of any taxable year in an aggregate amount not exceeding
the amount of United States Federal, state and local income taxes (not otherwise
paid by Holdings or any of its Subsidiaries) that would have been paid by
Holdings and its Subsidiaries in respect of such taxable year if Holdings were
a Corporate Taxpayer, taking into account all applicable deductions and tax
benefits (including tax benefits that are attributable to Specified Tax Benefits);
provided, however,
that such Restricted Payments shall not be paid prior to the time such
applicable tax period ends 

 

26

 

and the amount of such Restricted Payments is ascertained; provided, further, that
for the avoidance of doubt, Tax Distributions shall be made quarterly, at or
about the dates that estimated income tax payments are required to be paid.

 

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

 

“Total Debt” shall mean, at any time with
respect to any person and its Subsidiaries, the total Indebtedness of such
person in respect of borrowed money or Capital Lease Obligations, determined on
a consolidated basis, minus the amount of unrestricted cash and Permitted
Investments of such person that are not subject to a Lien, other than any Lien
in favor of the Secured Parties and the First Priority Liens.

 

“Total Leverage Ratio” shall mean, with
respect to Holdings and its Subsidiaries as of the end of any fiscal quarter of
Holdings, the ratio of Total Debt on such date to Consolidated EBITDA for the
period of four consecutive fiscal quarters most recently ended on or prior to
such date.

 

“Transactions” shall mean,
collectively, (a) the execution, delivery and performance by the parties
thereto of the Purchase Agreement and the consummation of the transactions
contemplated thereby, including the Equity Contribution, the Acquisition, the
Merger and the repayment of the Existing Debt, (b) the execution, delivery
and performance by the Loan Parties of the Loan Documents to which they are a
party and the execution, delivery and performance by the Loan Parties of the First
Lien Credit Agreement (and the “Loan Documents” as defined therein) and the
making of the Borrowings hereunder and the borrowings thereunder and use of the
proceeds thereof, and (c) the payment of related fees and expenses.

 

“Type”, when used in respect
of any Loan or Borrowing, shall refer to the Rate by reference to which
interest on such Loan or on the Loans comprising such Borrowing is determined.
For purposes hereof, the term “Rate” shall
mean the Adjusted LIBO Rate and the Alternate Base Rate.

 

“Uniform Commercial Code” or “UCC” means the Uniform Commercial
Code as in effect in any applicable jurisdiction from time to time.

 

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

 

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

 

27

 

“wholly owned Subsidiary” of
any person shall mean a subsidiary of such person of which securities (except
for directors’ qualifying shares) or other ownership interests representing
100% of the Equity Interests are, at the time any determination is being made,
owned, Controlled or held by such person or one or more wholly owned
Subsidiaries of such person or by such person and one or more wholly owned
Subsidiaries of such person.

 

“Withdrawal Liability” shall
mean 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. Terms Generally. The
definitions in Section 1.01 shall apply equally to both 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”; and the words “asset” and “property”
shall be construed as having 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. 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 of this Agreement unless the
context shall otherwise require. All references herein to Articles, Sections,
Exhibits and Schedules shall be deemed references to Articles and Sections of,
and Exhibits and Schedules to, this Agreement unless the context shall
otherwise require. Except as otherwise expressly provided herein, (a) any
reference in this Agreement to any Loan Document or any other agreement,
instrument or document shall mean such document as amended, restated, amended
and restated, supplemented or otherwise modified from time to time and (b) all
terms of an accounting or financial nature shall be construed in accordance
with GAAP, as in effect from time to time; provided,
however, that if the Borrower
notifies the Administrative Agent that the Borrower wishes to amend any covenant
in Article VI or any related definition to eliminate the effect of any
change in GAAP or the application thereof occurring after the date of this
Agreement on the operation of such covenant (or if the Administrative Agent
notifies the Borrower that the Required Lenders wish to amend Article VI
or any related definition for such purpose), then the Borrower and the
Administrative Agent shall negotiate in good faith to amend such covenant and
related definitions (subject to the approval of the Required Lenders) to
preserve the original intent thereof in light of such changes in GAAP; provided, that the Borrower’s compliance
with such covenant shall be determined on the basis of GAAP as applied and in
effect immediately before the relevant change in GAAP or the application
thereof became effective, until such covenant is amended.

 

SECTION 1.03. Classification of Loans and
Borrowings. For
purposes of this Agreement, Loans may be classified and referred to by Type (e.g., a “Eurodollar Loan”). Borrowings
also may be classified and referred to by Type (e.g., a “Eurodollar Borrowing”).

 

28

 

SECTION 1.04. Rounding. Any
financial ratios required to be maintained by the Borrower pursuant to this
Agreement (or required to be satisfied in order for a specific action to be
permitted under this Agreement) shall be calculated by dividing the appropriate
component by the other component, carrying the result to one place more than
the number of places by which such ratio is expressed herein and rounding the
result up or down to the nearest number (with a rounding-up if there is no
nearest number).

 

SECTION 1.05. References to Agreements and Laws.
Unless otherwise expressly provided herein, (a) references to
organization documents, agreements (including the Loan Documents) and other
contractual instruments shall be deemed to include all subsequent amendments,
amendments and restatements, restatements, supplements and other modifications
thereto, but only to the extent that such amendments, amendments and
restatements, restatements, supplements and other modifications are not
prohibited by any Loan Document; and (b) references to any law, statute,
rule or regulation shall include all statutory and regulatory provisions consolidating,
amending, replacing, supplementing or interpreting such Law.

 

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

 

SECTION 1.07. Timing of Payment or Performance.
When the payment of any obligation or the performance of any covenant, duty
or obligation is stated to be due or performance required on a day which is not
a Business Day, the date of such payment or performance shall extend to the
immediately succeeding Business Day and such extension of time shall be
reflected in computing interest or fees, as the case may be; provided, that with respect to any payment
of interest on or principal of Eurodollar Rate Loans, if such extension would
cause any such payment to be made in the next succeeding calendar month, such
payment shall be made on the immediately preceding Business Day.

 

ARTICLE II

The Credits

 

SECTION 2.01. Commitments. Subject
to the terms and conditions herein set forth, each Lender agrees, severally and
not jointly, to make a Loan to the Borrower on the Closing Date in
a principal amount not to exceed its Commitment. Amounts paid or prepaid
in respect of Loans may not be reborrowed.

 

SECTION 2.02. Loans. (a)  Each Loan shall be made as part of a
Borrowing consisting of Loans made by the Lenders ratably in accordance with
their Commitments; provided, however,
that the failure of any Lender to make any Loan shall not in itself relieve any
other Lender of its obligation to lend hereunder (it being understood, however,
that no Lender shall be responsible for the failure of any other Lender to make
any Loan required to be made by such other Lender). The Loans comprising any
Borrowing shall be in an aggregate principal amount that is an integral
multiple of $500,000 and not less than $2,000,000.

 

29

 

(b)   Subject to
Sections 2.08 and 2.15, each Borrowing shall be comprised entirely of ABR
Loans or Eurodollar Loans as the Borrower may request pursuant to
Section 2.03. Each Lender may at its option 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 Borrower to repay such
Loan in accordance with the terms of this Agreement. Borrowings of more than
one Type may be outstanding at the same time; provided, however,
that the Borrower shall not be entitled to request any Borrowing that, if made,
would result in more than twelve Eurodollar Borrowings outstanding
hereunder at any time. For purposes of the foregoing, Borrowings having
different Interest Periods, regardless of whether they commence on the same
date, shall be considered separate Borrowings.

 

(c)   Each Lender shall make each
Loan to be made by it hereunder on the proposed date thereof by wire transfer
of immediately available funds to such account in New York City as the
Administrative Agent may designate not later than 1:00 p.m., New York City
time, and the Administrative Agent shall promptly credit the amounts so
received to an account designated by the Borrower in the applicable Borrowing
Request or, if a Borrowing shall not occur on such date because any condition
precedent herein specified shall not have been met, return the amounts so
received to the respective Lenders.

 

(d)   Unless the Administrative
Agent shall have received notice from a Lender prior to the date of any
Borrowing that such Lender will not make available to the Administrative Agent
such Lender’s portion of such Borrowing, the Administrative Agent may assume
that such Lender has made such portion available to the Administrative Agent on
the date of such Borrowing in accordance with paragraph (c) above and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower on such date a corresponding amount. If the Administrative Agent
shall have so made funds available then, to the extent that such Lender shall
not have made such portion available to the Administrative Agent, such Lender
and the Borrower severally agree to repay to the Administrative Agent forthwith
on demand such corresponding amount together with interest thereon, for each
day from the date such amount is made available to the Borrower to but
excluding the date such amount is repaid to the Administrative Agent at
(i) in the case of the Borrower, a rate per annum equal to the interest
rate applicable at the time to the Loans comprising such Borrowing and
(ii) in the case of such Lender, a rate determined by the Administrative
Agent to represent its cost of overnight or short-term funds (which
determination shall be conclusive absent manifest error). If such Lender shall
repay to the Administrative Agent such corresponding amount, such amount shall
constitute such Lender’s Loan as part of such Borrowing for purposes of this
Agreement and (x) Borrower’s obligation to repay the Administrative Agent
such corresponding amount pursuant to this Section 2.02(d) shall cease and
(y) if the Borrower pays such amount to the Administrative Agent, the
amount so paid shall constitute a repayment of such Borrowing by such amount.

 

SECTION 2.03. Borrowing Procedure. In
order to request a Borrowing, the Borrower shall notify the Administrative
Agent of such request by telephone (a) in the case of a Eurodollar
Borrowing, not later than 1:00 p.m., New York City time, three 

 

30

 

Business Days before a proposed Borrowing,
and (b) in the case of an ABR Borrowing, not later than 1:00 p.m.,
New York City time, one Business Day before a proposed Borrowing. Each such
telephonic Borrowing Request shall be irrevocable, and shall be confirmed
promptly by hand delivery or fax to the Administrative Agent of a written Borrowing
Request and shall specify the following information: (i) whether such
Borrowing is to be a Eurodollar Borrowing or an ABR Borrowing; (ii) the
date of such Borrowing (which shall be a Business Day); (iii) the number
and location of the account to which funds are to be disbursed; (iv) the
amount of such Borrowing; and (v) if such Borrowing is to be a Eurodollar
Borrowing, the Interest Period with respect thereto; provided, however,
that notwithstanding any contrary specification in any Borrowing Request, each
requested Borrowing shall comply with the requirements set forth in
Section 2.02. If no election as to the Type of Borrowing is specified in
any such notice, then the requested Borrowing shall be a Eurodollar Borrowing.
If no Interest Period with respect to any Eurodollar Borrowing is specified in
any such notice, then the Borrower shall be deemed to have selected an Interest
Period of one month’s duration. The Administrative Agent shall promptly advise
the applicable Lenders of any notice given pursuant to this Section 2.03
(and the contents thereof), and of each Lender’s portion of the requested
Borrowing.

 

SECTION 2.04. Evidence of Debt; Repayment of Loans.
(a)  The Borrower hereby unconditionally
promises to pay to the Administrative Agent for the account of each Lender the
principal amount of each Loan of such Lender on the Maturity Date.

 

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

 

(c)   The Administrative Agent
shall maintain accounts in which it will record (i) the amount of each
Loan made hereunder, the Type thereof and, if applicable, the Interest Period
applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder
and (iii) the amount of any sum received by the Administrative Agent
hereunder from the Borrower or any Guarantor and each Lender’s share thereof.

 

(d)   The entries made in the
accounts maintained pursuant to paragraphs (b) and (c) above shall be
prima facie evidence of the
existence and amounts of the obligations therein recorded; provided, however,
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 obligations of
the Borrower to repay the Loans in accordance with the terms of this Agreement.

 

(e)   Any Lender may request that
Loans made by it hereunder be evidenced by a promissory note. In such event,
the Borrower shall execute and deliver to such Lender a promissory note payable
to such Lender and its permitted registered assigns in form and substance
reasonably acceptable to the Administrative Agent. Notwithstanding any other
provision of this Agreement, in the event any Lender shall request and receive
such a 

 

31

 

promissory note, the interests
represented by such note shall at all times (including after any assignment of
all or part of such interests pursuant to Section 9.04) be represented by
one or more promissory notes payable to the payee named therein or its
registered assigns.

 

SECTION 2.05. Fees. (a)  The Borrower agrees to pay to the
Administrative Agent, for its own account, the fees set forth in the Fee Letter
at the times and in the amounts specified therein (the “Fees”).

 

(b)   The Fees shall be paid, in
immediately available funds, to the Administrative Agent. Once paid, none of the
Fees shall be refundable under any circumstances.

 

SECTION 2.06. Interest on Loans. (a)  Subject to the provisions of Section 2.07,
the Loans comprising each ABR Borrowing shall bear interest (computed on
the basis of the actual number of days elapsed over a year of 365 or
366 days, as the case may be, when the Alternate Base Rate is determined
by reference to the Prime Rate and over a year of 360 days at all other
times and calculated from and including the date of such Borrowing to but
excluding the date of repayment thereof) at a rate per annum equal to the
Alternate Base Rate plus the Applicable Percentage.

 

(b)   Subject to the provisions
of Section 2.07, the Loans comprising each Eurodollar Borrowing shall bear
interest (computed on the basis of the actual number of days elapsed over a
year of 360 days) at a rate per annum equal to the Adjusted LIBO Rate for
the Interest Period in effect for such Borrowing plus the Applicable
Percentage.

 

(c)   Interest on each Loan shall
be payable on the Interest Payment Dates applicable to such Loan except as
otherwise provided in this Agreement. The applicable Alternate Base Rate or
Adjusted LIBO Rate for each Interest Period or day within an Interest Period,
as the case may be, shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.

 

SECTION 2.07. Default Interest. If
the Borrower shall default in the payment when due of any principal of or
interest on any Loan or payment of any fee or other amount due hereunder, by
acceleration or otherwise, or under any other Loan Document, then, until such
defaulted amount shall have been paid in full, to the extent permitted by law, such
overdue amount shall bear interest (after as well as before judgment), payable
on demand, (a) in the case of principal of a Loan, at the rate otherwise
applicable to such Loan pursuant to Section 2.06 plus 2.00% per annum and (b)
in all other cases, at a rate per annum (computed on the basis of the actual
number of days elapsed over a year of 365 or 366 days, as the case may be, when
determined by reference to the Prime Rate and over a year of 360 days at all other
times) equal to the rate that would be applicable to an ABR Loan plus 2.00% per
annum.

 

SECTION 2.08. Alternate Rate of Interest.
In the event, and on each occasion, that on the day two Business Days prior to
the commencement of any Interest Period for a Eurodollar Borrowing the
Administrative Agent shall have reasonably determined that dollar deposits in
the principal amounts of the Loans comprising such Borrowing are not 

 

32

 

generally available in the London interbank
market, or that the rates at which dollar deposits are being offered in the
London interbank market will not adequately and fairly reflect the cost to any participating
Lender of making or maintaining its Eurodollar Loan during such Interest
Period, or that reasonable means do not exist for ascertaining the Adjusted
LIBO Rate for such Interest Period, the Administrative Agent shall, as soon as
practicable thereafter, give written or fax notice of such determination to the
Borrower and the Lenders. In the event of any such determination, until the
Administrative Agent shall have advised the Borrower and the participating Lenders
that the circumstances giving rise to such notice no longer exist (which the
Administrative Agent agrees to give promptly after such circumstances no longer
exist), any request by the Borrower for a Eurodollar Borrowing pursuant to
Section 2.03 or 2.10 shall be deemed to be a request for an
ABR Borrowing. Each determination by the Administrative Agent under this
Section 2.08 shall be conclusive absent manifest error.

 

SECTION 2.09. Termination of Commitments.
(a)  The Commitments shall automatically
terminate upon the making of the Loans on the Closing Date. Notwithstanding the
foregoing, the Commitments shall automatically terminate at 5:00 p.m., New
York City time, on June 30, 2006, if the funding of the Loans shall not
have been made by such time.

 

(b)   Upon at least three
Business Days’ prior written or fax notice to the Administrative Agent, the
Borrower may at any time in whole permanently terminate, or from time to time
in part permanently reduce, the Commitments; provided,
however, that (i) each partial
reduction of the Commitments shall be in an integral multiple of $1,000,000 and
in a minimum amount of $5,000,000. Any notice given by the Borrower pursuant to
this Section 2.09(b) shall be irrevocable; provided, that
any such notice delivered by the Borrower may state that such notice is
conditioned upon the effectiveness of other financing arrangements, in which case
such notice may be revoked by the Borrower (by notice to the Administrative
Agent on or prior to the specified effective date) if such condition is not
satisfied.

 

(c)   Each reduction in the
Commitments hereunder shall be made ratably among the Lenders in accordance
with their respective Commitments.

 

SECTION 2.10. Conversion and Continuation of
Borrowings. The Borrower shall have the right at any time upon
prior written or fax notice (or telephone notice promptly confirmed by written
or fax notice) to the Administrative Agent (a) not later than 1:00 p.m.,
New York City time, one Business Day prior to conversion, to convert any
Eurodollar Borrowing into an ABR Borrowing, (b) not later than 11:00 a.m.,
New York City time, three Business Days prior to conversion or continuation, to
convert any ABR Borrowing into a Eurodollar Borrowing or to continue any
Eurodollar Borrowing as a Eurodollar Borrowing for an additional Interest
Period, and (c) not later than 1:00 p.m., New York City time, three
Business Days prior to conversion, to convert the Interest Period with respect
to any Eurodollar Borrowing to another permissible Interest Period, subject in
each case to the following:

 

33

 

(i)  each conversion or continuation shall be made
pro rata among the Lenders in accordance with the respective principal amounts
of the Loans comprising the converted or continued Borrowing;

 

(ii)  if less than all the outstanding principal
amount of any Borrowing shall be converted or continued, then each resulting
Borrowing shall satisfy the limitations specified in Sections 2.02(a) and
2.02(b) regarding the principal amount and maximum number of Borrowings of the
relevant Type;

 

(iii)  each conversion shall be effected by each
Lender and the Administrative Agent by recording for the account of such Lender
the Type of such Loan of such Lender resulting from such conversion and
reducing the Loan (or portion thereof) of such Lender being converted by an equivalent
principal amount; accrued interest on any Eurodollar Loan (or portion thereof)
being converted shall be paid by the Borrower at the time of conversion;

 

(iv)  if any Eurodollar Borrowing is converted at a
time other than the end of the Interest Period applicable thereto, the Borrower
shall pay, upon demand, any amounts due to the Lenders pursuant to
Section 2.16;

 

(v)  any portion of a Borrowing maturing or
required to be repaid in less than one month may not be converted into or
continued as a Eurodollar Borrowing;

 

(vi)  any portion of a Eurodollar Borrowing that
cannot be converted into or continued as a Eurodollar Borrowing by reason of
the immediately preceding clause shall be automatically converted at the end of
the Interest Period in effect for such Borrowing into an ABR Borrowing;
and

 

(vii)  upon notice to the Borrower from the
Administrative Agent given at the request of the Required Lenders, after the
occurrence and during the continuance of an Event of Default, no outstanding
Loan may be converted into, or continued as, a Eurodollar Loan.

 

Each notice pursuant to this Section 2.10 shall be irrevocable and
shall refer to this Agreement and specify (i) the identity and amount of
the Borrowing that the Borrower requests be converted or continued,
(ii) whether such Borrowing is to be converted to or continued as a
Eurodollar Borrowing or an ABR Borrowing, (iii) if such notice
requests a conversion, the date of such conversion (which shall be a Business
Day) and (iv) if such Borrowing is to be converted to or continued as a
Eurodollar Borrowing, the Interest Period with respect thereto. If no Interest
Period is specified in any such notice with respect to any conversion to or
continuation as a Eurodollar Borrowing, the Borrower shall be deemed to have
selected an Interest Period of one month’s duration. The Administrative Agent
shall advise the Lenders of any notice given pursuant to this Section 2.10
and of each Lender’s portion of any converted or continued Borrowing. If the
Borrower shall not have given notice in accordance with this Section 2.10
to continue any Borrowing into a subsequent Interest Period (and shall not
otherwise have given 

 

34

 

notice in accordance with this Section 2.10 to convert such
Borrowing), such Borrowing shall, at the end of the Interest Period applicable
thereto (unless repaid pursuant to the terms hereof), automatically be
continued into a Eurodollar Borrowing with an Interest Period of one month’s
duration.

 

SECTION 2.11. Right to Require Prepayment.
The Borrower shall notify the Administrative Agent of the occurrence of a
Change in Control not later than one Business Day after the occurrence thereof,
and the Administrative Agent shall within three Business Days thereafter notify
the Lenders thereof. At any time prior to the 60th day following
delivery of the notice by the Administrative Agent pursuant to the preceding
sentence, each Lender shall have the right, upon not less than five Business
Days’ prior notice to the Administrative Agent and the Borrower, to require the
Borrower to prepay in full, and not in part, the outstanding principal amount
of such Lender’s Loans at a purchase price equal to, within one year of the
Closing Date, 101%, or thereafter, 100%, of the principal amount thereof,
together with accrued and unpaid interest on the principal amount thereof to
but excluding the date of payment, and all other amounts then due to such
Lender or outstanding with respect to the Loans of such Lender under the Loan
Documents.

 

SECTION 2.12. Optional Prepayment. (a)  Subject to payment of any applicable premium
as set forth in paragraph (b) below, the Borrower shall have the right at any
time and from time to time to prepay any Borrowing, in whole or in part, upon
at least three Business Days’ prior written or fax notice (or telephone notice
promptly confirmed by written or fax notice) in the case of Eurodollar Loans,
or written or fax notice (or telephone notice promptly confirmed by written or
fax notice) at least one Business Day prior to the date of prepayment in the
case of ABR Loans, to the Administrative Agent before 1:00 p.m., New York
City time; provided, that each
partial prepayment shall be in an amount that is an integral multiple of
$1,000,000 and not less than $5,000,000.

 

(b)   Any prepayment of Loans
made pursuant to Section 2.12(a) prior to the first anniversary of the
Closing Date shall be made together with a prepayment premium in an amount
equal to 1.0% of the aggregate principal amount being prepaid.

 

(c)   Each notice of prepayment
shall specify the prepayment date and the principal amount of each Borrowing
(or portion thereof) to be prepaid, shall be irrevocable and shall commit the
Borrower to prepay such Borrowing by the amount stated therein on the date
stated therein; provided, that if a notice of
optional prepayment is given in connection with a conditional notice of
repayment 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. All prepayments under this Section 2.12 shall be
subject to Section 2.16 and any premium required by paragraph (b)
above but otherwise without premium or penalty. All prepayments under this
Section 2.12 shall be accompanied by accrued and unpaid interest on the
principal amount to be prepaid to but excluding the date of payment.

 

SECTION 2.13. Mandatory Prepayments.
(a)  Subject to paragraph (f) of
this Section 2.13, not later than the fifth Business Day following the receipt
by Holdings or 

 

35

 

any of its Subsidiaries of Net Cash Proceeds
in respect of any Prepayment Asset Sale, the Borrower shall apply an amount
equal to 100% of the Net Cash Proceeds received by Holdings or any of its
Subsidiaries with respect thereto (subject to the restrictions set forth herein)
to prepay outstanding Loans in accordance with Section 2.13(d); provided, however,
that if (i) prior to the date any such prepayment is required to be made, the
Borrower notifies the Administrative Agent of its intent to reinvest such Net
Cash Proceeds in assets of a kind then used or usable in the business of the Borrower
and the Subsidiaries and (ii) no Event of Default shall have occurred and
shall be continuing at the time of such notice, then the Borrower shall not be
required to prepay Loans hereunder in respect of such Net Cash Proceeds to the
extent that such Net Cash Proceeds are so reinvested within one year after the
date of receipt of such Net Cash Proceeds (or, within such one-year period, the
Borrower or any of its Subsidiaries enters into a binding commitment to so
reinvest in such Net Cash Proceeds, and such Net Cash Proceeds are so
reinvested within 180 days after such binding commitment is so entered into).

 

(b)   Subject to
paragraph (f) of this Section 2.13, no later than the earlier of (i) 125
days after the end of each fiscal year of the Borrower, commencing with the
fiscal year ending on December 31, 2007, and (ii) the fifth Business
Day following the date on which the financial statements with respect to such fiscal
year are delivered pursuant to Section 5.04(a), the Borrower shall prepay
outstanding Loans in accordance with Section 2.13(d) in an aggregate
principal amount equal to the excess, if any, of (i) the applicable ECF
Percentage of Excess Cash Flow for the fiscal year then ended over (ii) the
aggregate principal amount of Loans prepaid pursuant to Section 2.12
during such fiscal year.

 

(c)   Subject to
paragraph (f) of this Section 2.13, in the event that Holdings or any of
its Subsidiaries shall receive Net Cash Proceeds from the issuance or incurrence
of Indebtedness (other than any cash proceeds from the issuance or incurrence of
Indebtedness permitted pursuant to Section 6.01), the Borrower shall,
substantially simultaneously with (and in any event not later than the fifth Business
Day next following) the receipt of such Net Cash Proceeds, apply an amount
equal to 100% of such Net Cash Proceeds to prepay outstanding Loans in
accordance with Section 2.13(d).

 

(d)   So long as any Loans are
outstanding, mandatory prepayments of outstanding Loans under this Agreement
shall be allocated ratably among the Lenders that accept the same. Any Lender
may elect, by notice to the Administrative Agent at or prior to the time and in
the manner specified by the Administrative Agent, prior to any prepayment of
Loans required to be made by the Borrower pursuant to this Section, to decline
all (but not a portion) of its pro rata share of such prepayment (such declined
amounts, the “Declined Proceeds”).
Any Declined Proceeds shall be offered to the Lenders not so declining such
prepayment (with such Lenders having the right to decline any prepayment with
Declined Proceeds at the time and in the manner specified by the Administrative
Agent). Any remaining Declined Proceeds may be retained by the Borrower.

 

(e)   The Borrower shall deliver
to the Administrative Agent, at or prior to the time of each prepayment
required under this Section 2.13, (i) a certificate signed by a 

 

36

 

Financial Officer of the
Borrower setting forth in reasonable detail the calculation of the amount of
such prepayment and (ii) to the extent practicable, at least three
Business Days prior written notice of such prepayment. Each notice of
prepayment shall specify the prepayment date, the Type of each Loan being
prepaid and the principal amount of each Loan (or portion thereof) to be
prepaid; provided, however,
that if at the time of any prepayment pursuant to this Section 2.13 there
shall be outstanding Borrowings of different Types or Eurodollar Borrowings
with different Interest Periods, and if some but not all Lenders shall have
accepted such mandatory prepayment, then the aggregate amount of such mandatory
prepayment shall be allocated ratably to each outstanding Borrowing of the
accepting Lenders. All prepayments of Borrowings under this Section 2.13
shall be subject to Section 2.16, but shall otherwise be without premium
or penalty.

 

(f)   Notwithstanding anything in
this Section 2.13 to the contrary, until the Discharge of First Lien
Obligations shall have occurred, (i) no mandatory prepayments of
outstanding Loans that would otherwise be required under this Section 2.13
shall be required to be made, except for any portion of any corresponding
mandatory prepayment as shall have been rejected by the term lenders under the
First Lien Credit Agreement (and that is not applied to reduce outstanding
Revolving Loans and Swingline Loans thereunder and as defined therein or to
fund a cash collateral account with the Collateral Agent (as defined in the
First Lien Credit Agreement) in an amount up to the aggregate L/C Exposure (as
defined in the First Lien Credit Agreement) at such time), in each case in
accordance with and as required by Section 2.13(f) of the First Lien
Credit Agreement, and (ii) the references to the fifth Business Day
following the event giving rise to such mandatory prepayment in paragraphs (a),
(b) and (c) above shall be deemed to be the fifth Business Day next following
the date of determination that proceeds of the event giving rise to such
mandatory prepayment shall be applied to prepayments of the Loans in accordance
with Section 2.13(f) of the First Lien Credit Agreement.

 

SECTION 2.14. Reserve Requirements; Change in
Circumstances. (a)  Notwithstanding
any other provision of this Agreement, if any Change in Law shall 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 which is reflected in the
Adjusted LIBO Rate) or shall impose on such Lender or the London interbank
market any other condition affecting this Agreement or Eurodollar Loans made by
such Lender, and the result of any of the foregoing shall be to increase the
cost to such Lender of making or maintaining any Eurodollar Loan or to reduce
the amount of any sum received or receivable by such Lender hereunder (whether
of principal, interest or otherwise) by an amount deemed by such Lender to be
material, then the Borrower will pay to such Lender upon demand such additional
amount or amounts as will compensate such Lender for such additional costs
incurred or reduction suffered.

 

(b)   If any Lender shall have
determined that any Change in Law regarding capital adequacy has or would have
the effect of reducing the rate of return on such Lender’s capital or on the
capital of such Lender’s holding company, if any, as a consequence of this
Agreement or the Loans made to a level below that which such 

 

37

 

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

 

(c)   A certificate of a Lender
setting forth the amount or amounts necessary to compensate such Lender or its
holding company, as applicable, as specified in paragraph (a) or (b) above
shall be delivered to the Borrower, shall describe the applicable Change in
Law, the resulting costs incurred or reduction suffered (including a
calculation thereof), certifying that such Lender is generally charging such
amounts to similarly situated borrowers and shall be conclusive absent manifest
error. The Borrower shall pay such Lender the amount shown as due on any such
certificate delivered by it within 30 days after its receipt of the same.

 

(d)   Failure or delay on the
part of any Lender to demand compensation for any increased costs or reduction
in amounts received or receivable or reduction in return on capital shall not
constitute a waiver of such Lender’s right to demand such compensation; provided, that the Borrower shall not be under any
obligation to compensate any Lender under paragraph (a) or (b) above with
respect to increased costs or reductions with respect to any period prior to
the date that is 120 days prior to such request; provided,
further, that the foregoing limitation
shall not apply to any increased costs or reductions arising out of the
retroactive application of any Change in Law within such 120-day period. The
protection of this Section shall be available to each Lender regardless of any
possible contention of the invalidity or inapplicability of the Change in Law
that shall have occurred or been imposed.

 

(e)   Notwithstanding anything in
this Section 2.14 to the contrary, this Section 2.14 shall not apply
to any Change in Law with respect to Excluded Taxes, which shall be governed
exclusively by Section 2.20.

 

SECTION 2.15. Change in Legality. (a)  Notwithstanding any other provision of this
Agreement, if any Change in Law shall make it unlawful for any Lender to
make or maintain any Eurodollar Loan or to give effect to its obligations as
contemplated hereby with respect to any Eurodollar Loan, then, by written
notice to the Borrower and to the Administrative Agent:

 

(i)  such Lender may declare that Eurodollar Loans
will not thereafter (for the duration of such unlawfulness) be made by such
Lender hereunder (or be continued for additional Interest Periods) and ABR
Loans will not thereafter (for such duration) be converted into Eurodollar
Loans, whereupon any request for a Eurodollar Borrowing (or to convert an ABR
Borrowing to a Eurodollar Borrowing or to continue a Eurodollar Borrowing for
an additional Interest Period) shall, as to such Lender only, be deemed a
request for an ABR Loan (or a request to continue an ABR Loan as such for an
additional Interest Period or to 

 

38

 

convert a Eurodollar Loan into an ABR Loan,
as the case may be), unless such declaration shall be subsequently withdrawn;
and

 

(ii)  such Lender may require that all outstanding
Eurodollar Loans made by it be converted to ABR Loans, in which event all such
Eurodollar Loans shall be automatically converted to ABR Loans as of the
effective date of such notice as provided in paragraph (b) below.

 

In the event
any Lender shall exercise its rights under clause (i) or (ii) above,
all payments and prepayments of principal that would otherwise have been
applied to repay the Eurodollar Loans that would have been made by such Lender
or the converted Eurodollar Loans of such Lender shall instead be applied to
repay the ABR Loans made by such Lender in lieu of, or resulting from the
conversion of, such Eurodollar Loans.

 

(b)   For purposes of this
Section 2.15, a notice to the Borrower by any Lender shall be effective as
to each Eurodollar Loan made by such Lender, if lawful, on the last day of the
Interest Period then applicable to such Eurodollar Loan; in all other cases
such notice shall be effective on the date of receipt by the Borrower. Such
Lender shall withdraw such notice promptly following any date on which it
becomes lawful for such Lender to make and maintain Eurodollar Loans or give
effect to its obligations as contemplated hereby with respect to any Eurodollar
Loan.

 

SECTION 2.16. Indemnity. The
Borrower shall indemnify each Lender against any loss or expense that such
Lender may sustain or incur as a consequence of (a) any event, other than
a default by such Lender in the performance of its obligations hereunder, which
results in (i) such Lender receiving or being deemed to receive any amount
on account of the principal of any Eurodollar Loan prior to the end of the
Interest Period in effect therefor, (ii) the conversion of any Eurodollar
Loan to an ABR Loan, or the conversion of the Interest Period with respect to
any Eurodollar Loan, in each case other than on the last day of the Interest
Period in effect therefor, or (iii) any Eurodollar Loan to be made by such
Lender (including any Eurodollar Loan to be made pursuant to a conversion or
continuation under Section 2.10) not being made after notice of such Loan
shall have been given by the Borrower hereunder (any of the events referred to
in this clause (a) being called a “Breakage Event”) or (b) any default in
the making of any payment or prepayment required to be made hereunder; provided, that the Borrower shall not so
indemnify any Lender for losses or expenses incurred as a result of a mandatory
prepayment pursuant to Section 2.13 in which one or more Lenders has
elected to decline its pro rata share of such prepayment pursuant to Section 2.13(d).
In the case of any Breakage Event, such loss shall include an amount equal to
the excess, as reasonably determined by such Lender, of (i) its cost of
obtaining funds for the Eurodollar Loan that is the subject of such Breakage
Event for the period from the date of such Breakage Event to the last day of
the Interest Period in effect (or that would have been in effect) for such Loan
over (ii) the amount of interest likely to be realized by such Lender in
redeploying the funds released or not utilized by reason of such Breakage Event
for such period. A certificate of any Lender setting forth any amount or
amounts which such Lender is entitled to receive pursuant to this
Section 2.16 shall be delivered to the Borrower and shall be conclusive
absent manifest error.

 

39

 

SECTION 2.17. Pro Rata Treatment. Except
as required under Section 2.13, 2.14, 2.15 or 2.21, each Borrowing, each
payment or prepayment of principal of any Borrowing, each payment of interest
on the Loans, and each conversion of any Borrowing to or continuation of any
Borrowing as a Borrowing of any Type shall be allocated pro rata among the
Lenders in accordance with their respective applicable Commitments (or, if such
Commitments shall have expired or been terminated, in accordance with the
respective principal amounts of their outstanding Loans). Each Lender agrees
that in computing such Lender’s portion of any Borrowing to be made hereunder,
the Administrative Agent may, in its discretion, round each Lender’s percentage
of such Borrowing to the next higher or lower whole dollar amount.

 

SECTION 2.18. Sharing of Setoffs. Each
Lender agrees that if it shall, through the exercise of a right of banker’s
lien, setoff or counterclaim against the Borrower or any other Loan Party, or
pursuant to a secured claim under Section 506 of Title 11 of the
United States Code or other security or interest arising from, or in lieu of,
such secured claim, received by such Lender under any applicable bankruptcy, insolvency
or other similar law or otherwise, or by any other means, obtain payment
(voluntary or involuntary) in respect of any Loan as a result of which the
unpaid principal portion of its Loans shall be proportionately less than the
unpaid principal portion of the Loans of any other Lender, it shall be deemed
simultaneously to have purchased from such other Lender at face value, and
shall promptly pay to such other Lender the purchase price for, a participation
in the Loans of such other Lender, so that the aggregate unpaid principal
amount of the Loans held by each Lender shall be in the same proportion to the
aggregate unpaid principal amount of all Loans then outstanding as the
principal amount of its Loans prior to such exercise of banker’s lien, setoff
or counterclaim or other event was to the principal amount of all Loans
outstanding prior to such exercise of banker’s lien, setoff or counterclaim or
other event; provided, however, that (i) if any such
purchase or purchases or adjustments shall be made pursuant to this
Section 2.18 and the payment giving rise thereto shall thereafter be
recovered, such purchase or purchases or adjustments shall be rescinded to the
extent of such recovery and the purchase price or prices or adjustment restored
without interest and (ii) the provisions of this Section 2.18 shall not be
construed to apply to any payment made by the Borrower pursuant to and in
accordance with the express terms of this Agreement or any payment obtained by
a Lender as consideration for the assignment of or sale of a participation in
any of its Loans to any assignee or participant. The Borrower expressly consents
to the foregoing arrangements and agrees that any Lender holding a
participation in a Loan deemed to have been so purchased may exercise any and
all rights of banker’s lien, setoff or counterclaim with respect to any and all
moneys owing by the Borrower and Holdings to such Lender by reason thereof as
fully as if such Lender had made a Loan directly to the Borrower in the amount
of such participation.

 

SECTION 2.19. Payments. (a)  The Borrower shall make each payment
(including principal of or interest on any Borrowing or any Fees or other
amounts) hereunder and under any other Loan Document not later than
1:00 p.m., New York City time, on the date when due in immediately
available dollars, without setoff, defense or counterclaim. Each such payment
shall be made to the Administrative Agent at its offices at Eleven Madison
Avenue, New York, NY 10010. All payments hereunder and 

 

40

 

under the other Loan Documents shall be made
in dollars. 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.

 

(b)   Except as otherwise
expressly provided herein, whenever any payment (including principal of or
interest on any Borrowing or any Fees or other amounts) hereunder or under any
other Loan Document shall become due, or otherwise would occur, on a day that
is not a Business Day, such payment may be made on the next succeeding Business
Day, and such extension of time shall in such case be included in the
computation of interest or Fees, if applicable.

 

SECTION 2.20. Taxes. (a)  Any and all payments by or on account of any
obligation of the Borrower or any other Loan Party hereunder or under any other
Loan Document shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes; provided,
that if any Indemnified Taxes or Other Taxes are required to be
withheld or deducted from such payments, then (i) the sum payable shall be
increased as necessary so that after making all required deductions or
withholdings (including deductions or withholdings applicable to additional
sums payable under this Section) the Administrative Agent or Lender (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions or withholdings been made, (ii) the Borrower or such Loan
Party shall make such deductions or withholdings and (iii) the Borrower or
such Loan Party shall pay the full amount deducted or withheld to the relevant
Governmental Authority in accordance with applicable law.

 

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

 

(c)   The Borrower shall
indemnify the Administrative Agent and each Lender within 30 days after
written demand therefor, for the full amount of any Indemnified Taxes or Other
Taxes paid by the Administrative Agent or such Lender, as the case may be, on
or with respect to any payment by or on account of any obligation of the
Borrower or any other Loan Party hereunder or under any other Loan Document
(including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) and any penalties, interest
and reasonable expenses arising therefrom or with respect thereto, whether or
not such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to the Borrower by a Lender or by the
Administrative Agent on behalf of itself or a Lender, shall be conclusive
absent manifest error.

 

(d)   As soon as practicable
after any payment of Indemnified Taxes or Other Taxes by the Borrower or any
other Loan Party to a Governmental Authority, the Borrower 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.

 

41

 

(e)   Any Foreign Lender that is
entitled to an exemption from or reduction of withholding tax under the law of
the jurisdiction in which the Borrower is located, or any treaty to which such
jurisdiction is a party, with respect to payments under this Agreement shall
deliver to the Borrower (with a copy to the Administrative Agent), on or prior
to the date a payment is to be made to such Lender under this Agreement or
promptly upon learning that any such documentation expired or became obsolete,
at the reasonable request of the Borrower, such properly completed and executed
documentation prescribed by applicable law or reasonably requested by the
Borrower as will permit such payments to be made without withholding or at a
reduced rate of withholding; provided, that
such Lender is legally entitled to complete, execute and deliver such
documentation. Such completion, execution or delivery will not be required if,
in such Lender’s judgment, it would materially prejudice the legal position of
such Lender. In addition, each Foreign Lender shall (a) furnish on or before
the date it becomes a party to the Agreement either (i) two accurate and
complete originally executed copies of U.S. Internal Revenue Service (“IRS”) Form W-8BEN (or
successor form) or (ii) two accurate and complete originally executed copies of
IRS Form W-8ECI (or successor form), certifying, in either case, to such
Foreign Lender’s legal entitlement to an exemption or reduction from U.S.
federal withholding tax with respect to all interest payments hereunder, and (b)
provide a new Form W-8BEN (or successor form) or Form W-8ECI (or successor
form) upon the expiration or obsolescence of any previously delivered form to
reconfirm any complete exemption from, or any entitlement to a reduction in,
U.S. federal withholding tax with respect to any interest payment hereunder; provided, that any Foreign Lender that is not a “bank”
within the meaning of Section 881(c)(3)(A) of the Code and is relying on the
so-called “portfolio interest exemption” shall also furnish a “Non-Bank
Certificate” in the form of Exhibit G together with a Form W-8BEN. Notwithstanding
any other provision of this paragraph, a Foreign Lender shall not be required
to deliver any form pursuant to this paragraph that such Foreign Lender is not
legally able to deliver.

 

(f)   Any Lender that is a United
States person, as defined in Section 7701(a)(30) of the Code, and is not an
exempt recipient within the meaning of Treasury Regulations Section 1.6049-4(c)
shall deliver to the Borrower (with a copy to the Administrative Agent) two
accurate and complete original signed copies of IRS Form W-9, or any successor
form that such person is entitled to provide at such time in order to comply
with United States back-up withholding requirements.

 

(g)   If the Administrative Agent
or a Lender determines, in its sole discretion, that it has received a refund
of any Indemnified Taxes or Other Taxes as to which it has been indemnified by
the Borrower or with respect to which the Borrower has paid additional amounts
pursuant to this Section, it shall pay to the Borrower an amount equal to such
refund (but only to the extent of indemnity payments made, or additional
amounts paid, by the Borrower under this Section with respect to the
Indemnified Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of the Administrative Agent or such Lender, as the case
may be, and without interest (other than any interest paid by the relevant
Governmental Authority with respect to such refund), provided, that the Borrower, upon the request of the
Administrative Agent or such Lender, agrees to repay the amount paid over to
the Borrower (plus any penalties, interest or other charges 

 

42

 

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 paragraph 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 that it deems confidential) to the
Borrower or any other person.

 

(h)   Failure or delay on the
part of any Lender to demand compensation for any Indemnified Taxes or Other
Taxes shall not constitute a waiver of such Lender’s right to demand such
compensation; provided, that the Borrower shall
not be under any obligation to compensate any Lender under paragraph (a),
(b) or (c) above with respect to Indemnified Taxes or Other Taxes with respect
to any period prior to the date that is 120 days prior to such request; provided, further, that
the foregoing limitation shall not apply to any increased costs or reductions
arising out of the retroactive application of any Indemnified Taxes or Other
Taxes within such 120-day period. The protection of this Section shall be
available to each Lender regardless of any possible contention of the
invalidity or inapplicability of the Indemnified Taxes or Other Taxes that
shall have occurred or been imposed.

 

SECTION 2.21. Assignment of Commitments Under
Certain Circumstances; Duty to Mitigate. (a)  In the event (i) any Lender delivers a
certificate requesting compensation pursuant to Section 2.14,
(ii) any Lender delivers a notice described in Section 2.15,
(iii) the Borrower is required to pay any additional amount to any Lender
or any Governmental Authority on account of any Lender pursuant to
Section 2.20 or (iv) any Lender shall become a Defaulting Lender or
(v) any Lender refuses to consent to any amendment, waiver or other
modification of any Loan Document requested by the Borrower that requires the
consent of a greater percentage of the Lenders than the Required Lenders and
such amendment, waiver or other modification is consented to by the Required
Lenders, the Borrower may, upon notice to such Lender and the Administrative
Agent, require such Lender to transfer and assign (in accordance with and
subject to the restrictions contained in Section 9.04, other than 9.04(b)(iii)(B)),
all of its interests, rights and obligations under this Agreement to an
assignee that shall assume such assigned obligations (which assignee may be
another Lender, if a Lender accepts such assignment); provided, that (x) the Borrower shall
have received the prior written consent of the Administrative Agent with regard
to the identity of the assignee, which consent shall not unreasonably be
withheld or delayed, and (y) such assignee (or the Borrower, in the case
of amounts then due and payable by it) shall have paid to the affected Lender
in immediately available funds an amount equal to the sum of the principal of
and interest accrued to the date of such payment on the outstanding Loans of
such Lender plus all Fees and other amounts accrued for the account of such
Lender hereunder with respect thereto (including any amounts under
Sections 2.14 and 2.16) and if such assignment occurs prior to the first
anniversary of the Closing Date, the prepayment fee that would have been
payable pursuant to Section 2.12(b) if the Loans of such Lenders subject
to such assignment had been prepaid pursuant to Section 2.12; provided, further,
that if prior to receipt of notice of any such transfer and assignment the
circumstances or event that resulted in such Lender’s claim for compensation
under Section 2.14, notice under Section 2.15 or the amounts paid
pursuant to Section 2.20, as 

 

43

 

the case may be, cease to cause such Lender
to suffer increased costs or reductions in amounts received or receivable or
reduction in return on capital, or cease to have the consequences specified in
Section 2.15, or cease to result in amounts being payable under
Section 2.20, as the case may be (including as a result of any action taken
by such Lender pursuant to paragraph (b) below), or if such Lender shall
waive its right to claim further compensation under Section 2.14 in
respect of such circumstances or event or shall withdraw its notice under
Section 2.15 or shall waive its right to further payments under
Section 2.20 in respect of such circumstances or event or shall consent to
the proposed amendment, waiver, consent or other modification, as the case may
be, then such Lender shall not thereafter be required to make any such transfer
and assignment hereunder. Each Lender hereby grants to the Administrative Agent
an irrevocable power of attorney (which power is coupled with an interest) to
execute and deliver, on behalf of such Lender as assignor, any Assignment and
Acceptance necessary to effectuate any assignment of such Lender’s interests
hereunder in respect of the circumstances contemplated by this
Section 2.21(a).

 

(b)   If (i) any Lender
shall request compensation under Section 2.14, (ii) any Lender
delivers a notice described in Section 2.15 or (iii) the Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority on account of any Lender, pursuant to Section 2.20, then such
Lender shall use reasonable efforts (which shall not require such Lender to
incur an unreimbursed loss or unreimbursed cost or expense or otherwise take
any action inconsistent with its internal policies or legal or regulatory
restrictions or suffer any disadvantage or burden deemed by it to be
significant) (x) to file any certificate or document reasonably requested
by the Borrower or (y) to assign its rights and delegate and transfer its
obligations hereunder to another of its offices, branches or affiliates, if
such filing or assignment would reduce its claims for compensation under
Section 2.14 or enable it to withdraw its notice pursuant to
Section 2.15 or would reduce amounts payable pursuant to
Section 2.20, as the case may be, in the future. The Borrower hereby
agrees to pay all reasonable out-of-pocket costs and expenses incurred by any
Lender in connection with any such filing or assignment, delegation and
transfer.

 

ARTICLE III

Representations and Warranties

 

Each of Holdings and the Borrower represents and warrants (it being
understood that for purposes of the representations and warranties made in the
Loan Documents on the Closing Date, such representations and warranties shall
be construed as though the Transactions have been consummated) to the
Administrative Agent, the Collateral Agent and each of the Lenders that:

 

SECTION 3.01. Organization; Powers.
Holdings, the Borrower and each of the Subsidiaries (a) is duly organized
or formed, validly existing and in good standing under the laws of the
jurisdiction of its organization, except where the failure to be in good
standing could not reasonably be expected to have a Material Adverse Effect,
(b) has all requisite power and authority to own its property and assets
and to carry on its business 

 

44

 

as now conducted and as proposed to be
conducted, except where the failure to have such power and authority could not
reasonably be expected to result in a Material Adverse Effect, (c) is
qualified to do business in, and is in good standing in, every jurisdiction
where its ownership, lease or operation of properties or the conduct of its
business requires such qualification, except where the failure to so qualify
could not reasonably be expected to result in a Material Adverse Effect, and
(d) has the requisite power and authority to execute, deliver and perform
its obligations under each of the Loan Documents and each other agreement or
instrument contemplated thereby to which it is a party.

 

SECTION 3.02. Authorization. The
execution, delivery and performance of the Loan Documents, including the
granting of Liens, borrowing of Loans and the use of the proceeds therefrom, (a) have
been duly authorized by all requisite corporate or limited liability company
and, if required, stockholder or member action and (b) will not
(i) violate (A) any provision of any applicable law, statute, rule or
regulation, or of the certificate or articles of incorporation or other
constitutive documents or by-laws or operating agreement of any Loan Party,
(B) any applicable order of any Governmental Authority or (C) any
provision of any indenture, agreement or other instrument to which Holdings or
any of its Subsidiaries is a party or by which any of them or any of their
property is bound (other than the Existing Debt), (ii) be in conflict with,
result in a breach of or constitute (alone or with notice or lapse of time or
both) a default under, or give rise to any right to accelerate or to require
the prepayment, repurchase or redemption of any obligation under any such
indenture, agreement or other instrument (other than the Existing Debt) or
(iii) result in the creation or imposition of any Lien upon or with
respect to any property or assets now owned or hereafter acquired by Holdings,
the Borrower or any Subsidiary (other than Liens created or permitted hereunder
or under the Security Documents and the First Priority Lien); except with
respect to any violation, conflict, breach, default, acceleration, prepayment,
repurchase, redemption or creation or imposition of any Lien referred to in
clauses (i) through (iii), to the extent that such violation, conflict,
breach, default, acceleration, prepayment, repurchase, redemption or creation
or imposition of Lien could not reasonably be expected to result in a Material
Adverse Effect.

 

SECTION 3.03. Enforceability. This
Agreement has been duly executed and delivered by Holdings and the Borrower and
constitutes, and each other Loan Document when executed and delivered by each
Loan Party thereto will constitute, a legal, valid and binding obligation of
such Loan Party enforceable against such Loan Party in accordance with its
terms, except as may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, receivership, moratorium or similar laws of general
applicability relating to or limiting creditors’ rights generally or by general
equity principles.

 

SECTION 3.04. Governmental Approvals.
Except to the extent the failure to obtain or make could not reasonably be
expected to result in a Material Adverse Effect, no action, consent or approval
of, registration or filing with or any other action by any Governmental
Authority is necessary or will be required in connection with the Loan
Documents, except for (a) the filing of Uniform Commercial Code financing
statements and filings with the United States Patent and Trademark Office and
the United States 

 

45

 

Copyright Office, (b) recordation of the
Mortgages and (c) such as have been made or obtained and are in full force and
effect.

 

SECTION 3.05. Financial Statements.
(a)  The Borrower has heretofore
furnished to the Administrative Agent the Company’s consolidated balance sheets
and related statements of income, stockholder’s equity and cash flows
(i) as of and for the fiscal year ended December 31, 2005, audited by
and accompanied by the report of KPMG LLP, independent public accountants, and
(ii) as of and for the fiscal quarter ended March 31, 2006, and each
fiscal quarter ended after March 31, 2006 and at least 45 days before
the Closing Date, certified by its chief financial officer (or officer with
reasonably equivalent responsibilities). Such financial statements present
fairly in all material respects the financial condition and results of
operations and cash flows of the Company and its consolidated subsidiaries as
of such dates and for such periods. Such balance sheets and the notes thereto
disclose all material liabilities, direct or contingent, of the Company and its
consolidated subsidiaries as of the dates thereof. Such financial statements
were prepared in accordance with GAAP consistently applied throughout the
period covered thereby, except as otherwise noted therein and, subject, in the
case of unaudited financial statements, to year-end audit adjustments and the
absence of footnotes.

 

(b)   The Borrower has heretofore
delivered to the Administrative Agent its unaudited pro forma consolidated
balance sheet and related pro forma statements of income and cash flows as of
the fiscal quarter ended March 31, 2006, prepared giving effect to the
Transactions as if they had occurred, with respect to such balance sheet, on
such date and, with respect to such other financial statements, on the first
day of the four-fiscal quarter period ending on such date. Such pro forma
financial statements have been prepared in good faith by the Borrower, based on
the assumptions believed by the Borrower on the Closing Date to be reasonable,
are based in all material respects on the information reasonably available to
the Borrower as of the date of delivery thereof, reflect in all material
respects the adjustments required to be made to give effect to the Transactions
it being understood that actual results may vary from such projected results
and such variations may be material.

 

SECTION 3.06. No Material Adverse Change.
Since the Closing Date, no event, change or condition has occurred that
(individually or in the aggregate) has had, or could reasonably be expected to
have, a Material Adverse Effect.

 

SECTION 3.07. Title to Properties; Possession
Under Leases. (a)  Each of
Holdings, the Borrower and the Subsidiaries has good and indefeasible title in
fee simple to, or valid leasehold interests in, all its material properties and
assets (including all Mortgaged Property). Other than (i) minor defects in
title that do not materially interfere with its ability to conduct its business
or to utilize such assets for their intended purposes and (ii) except where
the failure to have such title or other property interests described above
could not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect, all such material properties and assets are free and
clear of Liens, other than Liens expressly permitted by Section 6.02.

 

46

 

(b)   None of Holdings, the
Borrower or the Subsidiaries has knowledge of the continuance of any default
under any lease to which it is a party and, to each of their knowledge, all
such leases are in full force and effect, except to the extent any such default
or lack of enforceability could not reasonably be expected to have a Material
Adverse Effect.

 

(c)   As of the Closing Date,
neither Holdings nor the Borrower has received any notice of, nor has any
knowledge of, any pending or contemplated condemnation proceeding affecting the
Mortgaged Properties or any sale or disposition thereof in lieu of
condemnation.

 

(d)   As of the Closing Date,
immediately following the consummation of the Transactions, none of Holdings,
the Borrower or any of the Subsidiaries is obligated under any right of first
refusal, option or other contractual right to sell, assign or otherwise dispose
of any material Mortgaged Property or any interest therein.

 

SECTION 3.08. Subsidiaries. As of
the Closing Date, Holdings does not have any Subsidiaries other than the
Borrower and Subsidiaries of the Borrower. Schedule 3.08 sets forth as of
the Closing Date a list of all Subsidiaries of Holdings and the percentage
ownership interest of Holdings therein. The shares of capital stock or other
ownership interests so indicated on Schedule 3.08 are fully paid and
non-assessable and are owned by Holdings, directly or indirectly, free and
clear of all Liens (other than Liens created under the Security Documents, any First
Priority Lien and any Liens permitted hereby).

 

SECTION 3.09. Litigation; Compliance with Laws.
(a)  There are no actions, suits or
proceedings at law or in equity or by or before any Governmental Authority now
pending or, to the knowledge of Holdings or the Borrower, threatened in writing
against Holdings or the Borrower or any Subsidiary or any business, property or
rights of any such person (i) that purport to affect or pertain to any
Loan Document or (ii) could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect.

 

(b)   Other than as could not
reasonably be expected to result in a Material Adverse Effect, none of
Holdings, the Borrower or any of the Subsidiaries or any of their respective
material properties is in violation of, nor will the continued operation of
their material properties as currently operated violate, any applicable law,
rule or regulation (including any zoning, building, ordinance, code or approval
or any building permits) or any restrictions of record or agreements affecting
the Mortgaged Property, or is in default with respect to any judgment, writ,
injunction, decree or order of any Governmental Authority, where any such
violation or default could reasonably be expected to result in a Material
Adverse Effect.

 

SECTION 3.10. Agreements. Other
than as could not reasonably be expected to result in a Material Adverse
Effect, none of Holdings, the Borrower or any of the Subsidiaries is in default
under any indenture or other agreement or instrument 

 

47

 

evidencing Indebtedness, or any other
material agreement or instrument to which it is a party or by which it or any
of its properties or assets are bound.

 

SECTION 3.11. Federal Reserve Regulations.
(a)  None of Holdings, the Borrower or
any of the Subsidiaries is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of buying or
carrying Margin Stock.

 

(b)   No part of the proceeds of
any Loan will be used to purchase or carry any margin stock or to extend credit
to others for the purpose of purchasing or carrying any margin stock in
violation of Regulation U or X issued by the Board.

 

SECTION 3.12. Investment Company Act.
None of Holdings, the Borrower or any Subsidiary is an “investment company” as
defined in, or subject to regulation under, the Investment Company Act of 1940.

 

SECTION 3.13. Tax Returns. Each of
Holdings, the Borrower and the Subsidiaries has, except where the failure to so
file or pay could not be reasonably expected to have a Material Adverse Effect,
filed or caused to be filed all Federal, state and other tax returns required
to have been filed by it and has paid, caused to be paid, or made provisions
for the payment of all taxes due and payable by it and all material assessments
received by it, except such taxes and assessments that are not overdue by more
than 30 days or the amount or validity of which are being contested in
good faith by appropriate proceedings and for which Holdings, the Borrower or
such Subsidiary, as applicable, shall have set aside on its books adequate
reserves.

 

SECTION 3.14. No Material Misstatements.
As of the Closing Date, to the knowledge of Holdings and the Borrower, the
Confidential Information Memorandum and other written information, reports,
financial statements, exhibits and schedules furnished by or on behalf of
Holdings or the Borrower to the Administrative Agent or the Lenders (other than
projections and other forward looking information and information of a general
economic or industry specific nature) on or prior to the Closing Date in
connection with the transactions contemplated hereby or the negotiation of any
Loan Document or included therein or delivered pursuant thereto (taken as a
whole) did not and, as of the Closing Date, does not contain any material
misstatement of fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not materially misleading. The projections were prepared in good faith on
the basis of reasonable assumptions in light of the conditions existing at the
time of delivery of such projections, and represented, at the time of delivery
thereof, a reasonable good faith estimate of future financial performance by
Holdings and the Borrower (it being understood that such forecasts or
projections are subject to significant uncertainties and contingencies, many of
which are beyond the control of Holdings and the Borrower, and that Holdings
and the Borrower make no representation as to the attainability of such
forecasts or projections or as to whether such forecasts or projections will be
achieved or will materialize and that actual results may vary from projected
results and such variances may be material).

 

48

 

SECTION 3.15. Employee Benefit Plans.
Each of the Borrower and its ERISA Affiliates is in compliance, with respect to
each benefit plan or arrangement, with the applicable provisions of ERISA and
the Code and the regulations and published interpretations thereunder, except
for such non-compliance that could not reasonably be expected to have a
Material Adverse Effect. No ERISA Event has occurred or is reasonably expected
to occur that, when taken together with all other such ERISA Events, could
reasonably be expected to result in a Material Adverse Effect. The present
value of all benefit liabilities under each Plan (based on the assumptions used
for purposes of Statement of Financial Accounting Standards No. 87) did
not, as of the last annual valuation date applicable thereto, exceed by more
than $25,000,000 the fair market value of the assets of such Plan, and the
present value of all benefit liabilities of all underfunded Plans (based on the
assumptions used for purposes of Statement of Financial Accounting Standards
No. 87) did not, as of the last annual valuation dates applicable thereto,
exceed by more than $25,000,000 the fair market value of the assets of all such
underfunded Plans.

 

SECTION 3.16. Environmental Matters.
Except with respect to any matters that, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect, none
of Holdings, the Borrower or any of the Subsidiaries (i) 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,
(ii) has become subject to any Environmental Liability, (iii) has
received notice of any claim with respect to any Environmental Liability or (iv)
knows of any condition, event or circumstance that could reasonably be expected
to result in any Environmental Liability.

 

SECTION 3.17. Security Documents. All
filings and other actions necessary to perfect and protect the Liens on the
Collateral created under, and in the manner contemplated by, the Security
Documents have been duly made or taken or otherwise provided for in a manner
reasonably acceptable to Collateral Agent and are in full force and effect and
the Security Documents create in favor of the Collateral Agent for the benefit
of the Secured Parties a valid and, together with such filings and other
actions, perfected second priority Lien in the Collateral, securing the payment
of the Obligations, subject to Liens permitted by Section 6.02. The
Loan Parties are the legal and beneficial owners of the Collateral free and
clear of any Lien, except for the Liens created or permitted under the Loan
Documents.

 

SECTION 3.18. Location of Real Property and Leased
Premises. (a)  Schedule
3.18(a) lists completely and correctly (in all material respects) as of the
Closing Date all real property owned by the Borrower and the Subsidiaries and
the addresses thereof. Except as otherwise provided in Schedule 3.18(a), the
Borrower and the Subsidiaries own in fee all the real property set forth on
such schedule, except to the extent the failure to have such title could not
reasonably be expected to have a Material Adverse Effect.

 

(b)   Schedule 3.18(b) lists
completely and correctly (in all material respects) as of the Closing Date all
real property leased by the Borrower and the Subsidiaries and the 

 

49

 

addresses thereof. Except as
otherwise provided on Schedule 3.18(b), the Borrower and the Subsidiaries have
valid leasehold interests in all the real property set forth on such schedule,
except to the extent the failure to have such title could not reasonably be
expected to have a Material Adverse Effect.

 

SECTION 3.19. Labor Matters. Except
as in the aggregate has not had and could not be reasonably expected to have a
Material Adverse Effect, as of the Closing Date, (a) there are no strikes,
lockouts or slowdowns against Holdings, the Borrower or any Subsidiary pending
or, to the knowledge of Holdings or the Borrower, threatened in writing,
(b) the hours worked by and payments made to employees of Holdings, the
Borrower 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, (c) all payments due from Holdings, the
Borrower or any Subsidiary, or for which any claim may be made against
Holdings, the Borrower 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 Holdings, the Borrower or such Subsidiary and
(d) the consummation of the Transactions will not give rise to any right
of termination or right of renegotiation on the part of any union under any
collective bargaining agreement to which Holdings, the Borrower or any
Subsidiary is bound.

 

SECTION 3.20. Solvency. On the
Closing Date after giving effect to the Transactions, the Loan Parties, taken
as a whole, are Solvent.

 

ARTICLE IV

Conditions of Lending

 

The obligations of the Lenders to make Loans hereunder are subject to
the satisfaction of the following conditions on the Closing Date:

 

(a)   The Administrative Agent
shall have received a notice of such Loan as required by Section 2.03.

 

(b)   The representations and
warranties set forth in Article III and in each other Loan Document shall
be true and correct in all material respects on and as of the Closing Date with
the same effect as though made on and as of such date, except to the extent
such representations and warranties expressly relate to an earlier date, in
which case they shall be true and correct in all material respects as of such
earlier date; provided, however,
that solely for purposes of representations and warranties made on the Closing Date
with respect to the Company and its subsidiaries, such representations and
warranties shall be limited in all respects to the Specified Representations
(as defined below). “Specified
Representations” shall mean the representations and warranties
in Sections 3.01, 3.02, 3.03, 3.11, 3.12, 3.17 and 3.20.

 

(c)   At the time of and
immediately after the making of such Loans, no Default or Event of Default
shall have occurred and be continuing.

 

50

 

(d)   The Administrative Agent
shall have received, on behalf of itself and the Lenders, an opinion of
(i) Weil, Gotshal & Manges LLP, counsel for the Loan Parties, and (ii)
each local counsel listed on Schedule 4(d), in each case (A) dated the
Closing Date and (B) addressed to the Administrative Agent and the Lenders, and
(C) in form and substance reasonably satisfactory to the Administrative
Agent.

 

(e)   The Administrative Agent
shall have received (i) a copy of the certificate or articles of
incorporation or organization, including all amendments thereto, of each Loan
Party, certified as of a recent date by the Secretary of State of the state of
its organization, and a certificate as to the good standing of each Loan Party
as of a recent date, from such Secretary of State; (ii) a certificate of the
Secretary or Assistant Secretary of each Loan Party dated the Closing Date and
certifying (A) that attached thereto is a true and complete copy of the
by-laws or operating (or limited liability company) agreement of such Loan
Party as in effect on the Closing Date and at all times since a date prior to
the date of the resolutions described in clause (B) below, (B) that
attached thereto is a true and complete copy of resolutions duly adopted by the
Board of Directors (or equivalent body) of such Loan Party authorizing the
execution, delivery and performance of the Loan Documents to which such person
is a party and, in the case of the Borrower, the borrowings hereunder, and that
such resolutions have not been modified, rescinded or amended and are in full
force and effect, (C) that the certificate or articles of incorporation or
organization of such Loan Party have not been amended since the date of the
last amendment thereto shown on the certificate of good standing furnished
pursuant to clause (i) above, and (D) as to the incumbency and
specimen signature of each officer executing any Loan Document or any other
document delivered in connection herewith on behalf of such Loan Party; and (iii) a
certificate of another officer as to the incumbency and specimen signature of
the Secretary or Assistant Secretary executing the certificate pursuant to
clause (ii) above.

 

(f)   The Administrative Agent
shall have received a certificate, dated the Closing Date and signed by a
Financial Officer of the Borrower, confirming compliance with the conditions
precedent set forth in paragraphs (b) and (c) of this Article IV.

 

(g)   The Administrative Agent
shall have received all Fees and other amounts due and payable on or prior to
the Closing Date, including, to the extent invoiced at least one Business Day
prior to the Closing Date, reimbursement or payment of all out-of-pocket
expenses required to be reimbursed or paid by the Borrower hereunder or under
any other Loan Document.

 

(h)   The Security Documents
shall have been duly executed by each Loan Party that is to be a party thereto
and shall be in full force and effect and each document, except as otherwise
provided or agreed to by the Administrative Agent and the Borrower (including
each Uniform Commercial Code financing statement) required by law or reasonably
requested by the Administrative Agent or the Collateral Agent to be filed,
registered or recorded in order to create in favor of the Collateral Agent for
the benefit of the Secured Parties a valid, legal and perfected second priority
(except to the extent otherwise provided therein) security interest in and Lien
on the Collateral (subject to any Lien expressly permitted by Section 6.02)
described in the Security Documents shall 

 

51

 

have been prepared and
delivered to the Collateral Agent on the Closing Date. The Pledged Collateral
shall have been duly and validly pledged under the Guarantee and Collateral
Agreement to the Collateral Agent, for the ratable benefit of the Secured
Parties, and all certificates or instruments (if any), except as otherwise
provided or agreed to by the Administrative Agent and the Borrower,
representing Pledged Collateral consisting of certificated equity securities
issued by the Borrower or any Subsidiary or instruments issued by Holdings, the
Borrower or any Subsidiary, accompanied by instruments of transfer and stock
powers endorsed in blank, shall be in the actual possession of the Collateral
Agent.

 

(i)   The Collateral Agent shall,
except as otherwise provided or agreed to by the Administrative Agent and the
Borrower, have received the results of searches of the Uniform Commercial Code
filings (or equivalent filings) made with respect to the Loan Parties in the
states (or other jurisdictions) of formation of such persons together with
copies of the financing statements (or similar documents) disclosed by such
search, and accompanied by evidence reasonably satisfactory to the Collateral
Agent that the Liens indicated in any such financing statement (or similar
document) would be permitted under Section 6.02 or have been or will be
contemporaneously released or terminated.

 

(j)   (i)  Each of the
Security Documents, in form and substance reasonably satisfactory to the
Administrative Agent, relating to each of the Mortgaged Properties shall,
except as otherwise provided or agreed to by the Administrative Agent and the
Borrower, have been duly executed by the parties thereto and delivered to the
Collateral Agent and shall be in full force and effect, (ii) each of such
Mortgaged Properties shall not be subject to any Lien other than those
permitted under Section 6.02, (iii) each of such Security Documents
shall, except as otherwise provided or agreed to by the Administrative Agent
and the Borrower, have been filed and recorded in the recording office as
specified on Schedule 3.17(c) (or a lender’s title insurance policy, in form
and substance reasonably acceptable to the Collateral Agent, insuring such
Security Document as a second lien on such Mortgaged Property (subject to any
Lien permitted by Section 6.02) shall have been received by the Collateral
Agent) and, in connection therewith, the Collateral Agent shall have received
evidence reasonably satisfactory to it of each such filing and recordation and
(iv) the Collateral Agent shall have received such other documents,
including a policy or policies (or binding commitments therefor) of title
insurance issued by a nationally recognized title insurance company, together
with such endorsements, coinsurance and reinsurance as may be reasonably
requested by the Collateral Agent and the Lenders, insuring the Mortgages as
valid second liens on the Mortgaged Properties, free of Liens other than those
permitted under Section 6.02, together with such surveys, as reasonably
requested by the Collateral Agent.

 

(k)   The Administrative Agent
shall have received a certificate as to coverage under the insurance policies
required by Section 5.02.

 

(l)   The Acquisition shall be
consummated substantially simultaneously with the initial funding of Loans on
the Closing Date and the Administrative Agent shall be satisfied that the
Merger will be consummated on the Closing Date immediately after the initial
funding of the Loans, in each case in accordance with and on the terms
described 

 

52

 

in the Purchase Agreement, and
no material provision or condition of the Purchase Agreement shall have been
waived, amended, supplemented or otherwise modified in a manner that is adverse
in any material respect to the interests of the Lenders without the prior
written consent of the Administrative Agent. The Company, as the survivor of
the Merger, shall execute this Agreement in order to acknowledge its obligations
as the Borrower. The Administrative Agent shall have received copies of the
Purchase Agreement and all certificates, opinions and other documents delivered
thereunder, certified by a Financial Officer as being complete and correct.

 

(m)   The Investors shall have
made the Equity Contribution in an aggregate amount not less than $250,000,000.
The First Lien Credit Agreement shall have been executed and delivered by the
parties thereto, the conditions thereunder shall be satisfied and the Borrower
shall have received gross cash proceeds of not less than $500,000,000 from the
borrowing of term loans under the First Lien Credit Agreement.

 

(n)   All amounts due or
outstanding in respect of the Existing Debt shall have been (or substantially
simultaneously with the initial funding of the Loans on the Closing Date shall
be) paid in full, all commitments (if any) in respect thereof terminated and
all guarantees (if any) thereof and security (if any) therefor discharged and
released. After giving effect to the Transactions, Holdings and its
Subsidiaries shall have outstanding no indebtedness or Disqualified Stock other
than (i) Indebtedness under the Loan Documents and under the First Lien
Credit Agreement, (ii) Capital Lease Obligations permitted under the
Purchase Agreement and (iii) Indebtedness permitted by Section 6.01.

 

(o)   The Administrative Agent
shall have received a certificate from the chief financial officer (or officer
with reasonably equivalent responsibilities) of Holdings certifying that Holdings
and its subsidiaries, on a consolidated basis after giving effect to the
Transactions, are Solvent as of the Closing Date.

 

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

 

(q)   The Administrative Agent
shall have received unaudited consolidated balance sheets and related
statements of income, stockholders’ equity and cash flows of the Company for
each fiscal quarter ended after March 31, 2006, and at least 45 days prior
to the Closing Date, all certified by one of its Financial Officers as fairly
presenting 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.

 

(r)   The Administrative Agent
shall have received a pro forma consolidated balance sheet and related pro
forma consolidated statement of income and cash flows of the Borrower as of and
for the twelve-month period ending on the last day of the most 

 

53

 

recently completed four-fiscal
quarter period ended at least 45 days prior to the Closing Date, prepared after
giving effect to the Transactions as if the Transactions had occurred as of
such date (in the case of such balance sheet) or at the beginning of such
period (in the case of such other financial statements).

 

ARTICLE V

Affirmative Covenants

 

Each of Holdings and the Borrower covenants and agrees with each Lender
that until the Commitments have been terminated and the principal of and
interest on each Loan, all Fees and all other expenses or amounts payable under
any Loan Document shall have been paid in full, each of Holdings and the
Borrower will, and will cause each of their Subsidiaries to:

 

SECTION 5.01. Existence; Compliance with Laws;
Businesses and Properties. (a) 
Do or cause to be done all things reasonably necessary to preserve,
renew and keep in full force and effect its legal existence under the laws of
its jurisdiction of organization, except as otherwise expressly permitted under
Section 6.05.

 

(b)   Other than as could not
reasonably be expected to have a Material Adverse Effect, (i) do or cause
to be done all things reasonably necessary to obtain, preserve, renew, extend
and keep in full force and effect the material rights, licenses, permits,
franchises, authorizations, patents, copyrights, trademarks and trade names
necessary or desirable to the conduct of its business, (ii) maintain and
operate such business in substantially the manner in which it is presently
conducted and operated, (iii) comply in all material respects with
applicable laws, rules, regulations and decrees and orders of any Governmental
Authority (including Environmental Laws and ERISA), whether now in effect or hereafter
enacted and (iv)  maintain and preserve all property necessary or
desirable to the conduct of such business and keep such property in good
repair, working order and condition and from time to time make, or cause to be
made, all needed repairs, renewals, additions, improvements and replacements
thereto necessary or desirable to the conduct of its business.

 

SECTION 5.02. Insurance. (a)  Except if the failure to do so could not
reasonably be expected to cause a Material Adverse Effect, keep its insurable
properties adequately insured at all times by financially sound and reputable
insurers to such extent and against such risks, including fire and other risks
insured against by extended coverage, as is customary with companies in the
same or similar businesses operating in the same or similar locations.

 

(b)   Cause all such policies
covering any Collateral to be endorsed or otherwise amended to include a
customary lender’s loss payable endorsement, in form and substance reasonably
satisfactory to the Administrative Agent and the Collateral Agent, to the
extent available on commercially reasonable terms, cause each such policy to
provide that it shall not be canceled, modified or not renewed (i) by
reason of nonpayment of premium unless not less than 10 days’ prior
written notice thereof is given 

 

54

 

by the insurer to the
Administrative Agent and the Collateral Agent (giving the Administrative Agent
and the Collateral Agent the right to cure defaults in the payment of premiums)
or (ii) for any other reason unless not less than 30 days’ prior
written notice thereof is given by the insurer to the Administrative Agent and
the Collateral Agent. Upon the reasonable request of the Administrative Agent or
the Collateral Agent, deliver to the Administrative Agent and the Collateral
Agent, prior to the cancellation, modification or nonrenewal of any such policy
of insurance, a copy of a renewal or replacement policy (or other evidence of
renewal of a policy previously delivered to the Administrative Agent and the
Collateral Agent) together with evidence reasonably satisfactory to the
Administrative Agent and the Collateral Agent of payment of the premium
therefor.

 

(c)   Purchase Federal Emergency Management
Agency Standard Flood Hazard Determination Forms for each property on which
improvements are located, provide such forms to the Collateral Agent, and if at
any time the area in which any Mortgaged Property is located is designated a “flood
hazard area” in any Flood Insurance Rate Map published by the Federal Emergency
Management Agency (or any successor agency), obtain (to the extent available on
commercially reasonable terms) flood insurance in such total amount as the
Administrative Agent may from time to time reasonably require, and otherwise
comply with the National Flood Insurance Program as set forth in the Flood
Disaster Protection Act of 1973, as it may be amended from time to time.

 

SECTION 5.03. Taxes. Pay and
discharge when due all taxes, assessments and governmental charges or levies
imposed upon it or upon its income or profits or in respect of its property,
before the same shall become overdue by more than 30 days; provided, however,
that such payment and discharge shall not be required with respect to any such tax,
assessment, charge or levy (i) so long as the validity or amount thereof
is (A) being contested in good faith, (B) by appropriate proceedings
diligently conducted and (C) with respect to which adequate reserves in
accordance with GAAP have been established or (ii) with respect to which
the failure to make payment could not reasonably be expected to have a Material
Adverse Effect;

 

SECTION 5.04. Financial Statements, Reports, etc.
In the case of Holdings, furnish to the Administrative Agent (who will distribute
to each Lender):

 

(a)   within 120 days after
the end of each fiscal year, its consolidated balance sheet and related
statements of income, stockholders’ equity and cash flows showing the financial
condition of Holdings and its consolidated Subsidiaries as of the close of such
fiscal year and the results of its operations and the operations of such persons
during such year, together with comparative figures for the immediately
preceding fiscal year, all in reasonable detail and prepared in accordance with
GAAP, all audited by KPMG LLP or other independent public accountants of
recognized national standing and accompanied by an opinion of such accountants
(which opinion shall be 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 fairly present
the financial condition and results of operations of Holdings and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP;

 

55

 

(b)   within 60 days after
the end of each of the first three fiscal quarters of each fiscal year, its
consolidated balance sheet and related statements of income, stockholders’ equity
and cash flows showing the financial condition of Holdings and its consolidated
Subsidiaries as of the close of such fiscal quarter and the results of its
operations and the operations of such persons during such fiscal quarter and
the then elapsed portion of the fiscal year, and comparative figures for the
same periods in the immediately preceding fiscal year, all certified by one of
its Financial Officers as fairly presenting in all material respects the
financial condition and results of operations of Holdings and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP, subject to normal
year-end audit adjustments and the absence of footnotes;

 

(c)   concurrently with any
delivery of financial statements under paragraph (a) or (b) above, a
certificate of a Financial Officer of Holdings (i) certifying that to such
Financial Officer’s knowledge no Event of Default or Default has occurred or,
if such an Event of Default or Default has occurred, reasonably specifying the
nature thereof and (ii) setting forth computations in reasonable detail
reasonably satisfactory to the Administrative Agent demonstrating compliance
with the covenant contained in Section 6.10 and, in the case of a certificate
delivered with the financial statements required by paragraph (a) above
(commencing with the fiscal year ended December 31, 2007), setting forth
Holdings’ calculation of Excess Cash Flow; and concurrently with any delivery
of financial statements under paragraph (a) above, a certificate of the accounting
firm certifying that such accounting firm did not become aware of any Event of
Default under Section 6.10 or, if such accounting firm shall have become
aware of such an Event of Default, specifying the nature thereof (which
certificate, is limited to such accounting matters and may disclaim
responsibility for legal interpretations);

 

(d)   within 60 days after
the commencement of each fiscal year of Holdings, a detailed consolidated
budget for such fiscal year (including a projected consolidated balance sheet
and related statements of projected operations and cash flows as of the end of
and for such fiscal year and setting forth the material assumptions used for
purposes of preparing such budget);

 

(e)   promptly after the same
become publicly available, copies of all periodic 10Q and 10K filings, which
shall satisfy the Borrower’s obligations under Sections 5.01(a) and (b)
above (if containing the items required thereby);

 

(f)   after the request by any
Lender, all documentation and other information that such Lender reasonably
requests in order to comply with its ongoing obligations under applicable “know
your customer” and anti-money laundering rules and regulations, including the
USA PATRIOT Act;

 

(g)   concurrently with the
delivery of the certificate pursuant to clause (c) above (or on such later
date on which a distribution may be made), a certificate of a Financial Officer
of Holdings setting forth computations of the amount of any Tax Distribution or
Specified Tax Payment made during the period covered thereby;

 

56

 

(h)   concurrently with the
delivery of the certificate delivered pursuant to clause (c) above with
respect to the end of a fiscal year, a certificate of a Financial Officer of
Holdings setting forth the amount of Capital Expenditures during the relevant
fiscal year, any Rollover Amount or Carryback Amount and the base amount for
the next succeeding Fiscal Year;

 

(i)   promptly, from time to
time, such other information regarding the operations, business affairs and
financial condition of Holdings, the Borrower or any Subsidiary, or compliance
with the terms of any Loan Document, as the Administrative Agent or any Lender
may reasonably request; and

 

(j)   Concurrently with the
delivery of the certificate delivered pursuant to clause (c) above with respect
to the end of a fiscal year, the Borrower shall deliver to the Collateral Agent
a certificate executed by a Responsible Officer of the Borrower attaching
updated versions of the Schedules (other than Schedule IV) to the Second
Lien Guarantee and Collateral Agreement or in the alternative, setting forth
any and all changes to (or confirming that there has been no change in) the
information set forth in or contemplated by such Schedules since the date of
the most recent certificate delivered pursuant to this paragraph (j).

 

SECTION 5.05. Litigation and Other Notices.
Promptly upon any Responsible Officer of Holdings, the Borrower or any
Subsidiary becoming aware thereof, furnish to the Administrative Agent and each
Lender notice of the following:

 

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

 

(b)   the filing or commencement of
any action, suit or proceeding, whether at law or in equity or by or before any
Governmental Authority, against the Borrower or any Affiliate thereof that
could reasonably be expected to result in a Material Adverse Effect;

 

(c)   the occurrence of any ERISA
Event that, alone or together with any other ERISA Events that have occurred,
that has resulted in or could reasonably be expected to result in a Material
Adverse Effect; and

 

(d)   the occurrence of any other
event that has resulted in, or could reasonably be expected to result in, a
Material Adverse Effect.

 

SECTION 5.06. Information Regarding Collateral.
Furnish to the Administrative Agent notice of any change (i) in any Loan
Party’s legal name, (ii) in the jurisdiction of organization or formation
of any Loan Party or (iii) in any Loan Party’s identity or corporate
structure. Holdings and the Borrower also agree to notify the Administrative
Agent if any material portion of the Collateral is damaged or destroyed.

 

SECTION 5.07. Maintaining Records; Access to
Properties and Inspections; Maintenance of Ratings. (a)  Keep proper books of record and account in
which full, true and correct entries in conformity with GAAP are made. Permit
any representatives designated by the Administrative Agent (or any Lender if
accompanying the Administrative Agent) to visit and inspect during normal
business hours the financial 

 

57

 

records and the properties of Holdings, the
Borrower or the Subsidiaries upon reasonable advance notice, and to make
extracts from and copies of such financial records, and permit any such representatives
to discuss the affairs, finances and condition of such person with the officers
thereof and independent accountants therefor; provided,
that the Administrative Agent shall give the Borrower an opportunity to
participate in any discussions with its accountants; provided, further,
that in the absence of the existence of an Event of Default, the Administrative
Agent shall not exercise its rights under this Section 5.07 more often
than two times during any fiscal year and only one such time shall be at the
Borrower’s expense.

 

SECTION 5.08. Use of Proceeds. The
proceeds of the Loans, together with the Equity Contribution and term loans
under the First Lien Credit Agreement, shall be used solely to pay the cash
purchase price of the Acquisition, to repay the Existing Debt and to pay
related fees and expenses.

 

SECTION 5.09. Further Assurances. (a)  From time to time duly authorize, execute and
deliver, or cause to be duly authorized, executed and delivered, such
additional instruments, certificates, financing statements, agreements or
documents, and take all reasonable actions (including filing UCC and other
financing statements but subject to the limitations set forth in the Security
Documents), as the Administrative Agent or the Collateral Agent may reasonably
request, for the purposes of perfecting the rights of the Administrative Agent,
the Collateral Agent and the Secured Parties with respect to the Collateral (or
with respect to any additions thereto or replacements or proceeds or products
thereof or with respect to any other property or assets hereafter acquired by
Holdings, the Borrower or any Subsidiary which may be deemed to be part of the
Collateral) pursuant hereto or thereto. Upon the exercise by the Administrative
Agent, the Collateral Agent or any Lender of any power, right, privilege or
remedy pursuant to this Agreement or the other Loan Documents which requires
any consent, approval, recording, qualification or authorization of any
Governmental Authority, each of Holdings and the Borrower will execute and
deliver, or will cause the execution and delivery of, all applications,
certifications, instruments and other documents and papers that the
Administrative Agent, the Collateral Agent or such Lender may reasonably be
required to obtain from Holdings, the Borrower or any other Loan Party for such
governmental consent, approval, recording, qualification or authorization.

 

(b)   With respect to any assets
acquired by any Loan Party after the Closing Date of the type constituting
Collateral under the Guarantee and Collateral Agreement and as to which the
Collateral Agent, for the benefit of the Secured Parties, does not have a
perfected security interest, on or prior to the date of delivery of the
certificate under Section 5.04(c) following the date of such acquisition
(i) execute and deliver to the Administrative Agent and the Collateral Agent
such amendments to the Guarantee and Collateral Agreement or such other
Security Documents as the Collateral Agent deems necessary to grant to the
Collateral Agent, for the benefit of the Secured Parties, a security interest
in such assets and (ii) take all actions necessary to grant to, or continue on
behalf of, the Collateral Agent, for the benefit of the Secured Parties, a
perfected security interest in such assets (subject only to Liens permitted
under Section 6.02), including the filing of UCC financing statements in such
jurisdictions as may be required 

 

58

 

by the Guarantee and Collateral
Agreement or as may be reasonably requested by the Administrative Agent or the
Collateral Agent.

 

(c)   With respect to any fee
interest in any real property (other than fee property of a Project Subsidiary
prior to the time the Permitted Project Debt is repaid in full) located in the
United States with a book value in excess of $5,000,000 (as reasonably
estimated by the Borrower) acquired after the Closing Date by any Loan Party
(including as a result of a Permitted Acquisition of a Person that owns such
real property), within 60 days following the date of such acquisition (i) execute
and deliver a Mortgage in favor of the Collateral Agent, for the benefit of the
Secured Parties, covering such real property and complying with the provisions
herein and in the Security Documents, (ii) provide the Secured Parties with
title and extended coverage insurance in an amount equal to the book value of
such real property, and if applicable, flood insurance, all in accordance with
the standards for deliveries contemplated on the Closing Date, (iii) if
requested by the Administrative Agent make available counsel reasonably
satisfactory to the Administrative Agent and the Collateral Agent to advise the
Administrative Agent and the Collateral Agent with respect to the form and
substance of the applicable Mortgage and (iv) deliver to the Administrative
Agent, upon the Administrative Agent’s request, a copy of any consultant’s
reports, environmental site assessments or other material documents, if any, in
the possession of the Borrower or any other Loan Party.

 

(d)   With respect to any
Subsidiary (other than a Foreign Subsidiary or a Project Subsidiary) created or
acquired after the Closing Date, and with respect to any Project Subsidiary
upon payment in full of all Permitted Project Debt of such Project Subsidiary, on
or prior to the date of delivery of the certificate under Section 5.04(c) following
such creation or the date of such acquisition, or payment, as the case may be
(i) execute and deliver to the Administrative Agent and the Collateral
Agent such amendments to the Guarantee and Collateral Agreement as the
Administrative Agent or the Collateral Agent deems necessary to grant to the
Collateral Agent, for the benefit of the Secured Parties, a valid, perfected
security interest in the Equity Interests in such new Subsidiary that are owned
by any of the Loan Parties, (ii) deliver to the Collateral Agent the
certificates, representing any of such Equity Interests that constitute
certificated securities, together with undated stock powers, in blank, executed
and delivered by a duly authorized officer of the pledgor and (iii) cause
such Subsidiary (A) to become a party to the Guarantee and Collateral
Agreement and each Intellectual Property Security Agreement and (B) to
take such actions necessary to grant to the Collateral Agent, for the benefit
of the Secured Parties, a perfected security interest in any assets required to
be Collateral pursuant to the Guarantee and Collateral Agreement and each Intellectual
Property Security Agreement with respect to such Subsidiary, including, if
applicable, the recording of instruments in the United States Patent and
Trademark Office and the United States Copyright Office and the filing of UCC
financing statements in such jurisdictions as may be required by the Guarantee
and Collateral Agreement, any applicable Intellectual Property Security
Agreement or as may be reasonably requested by the Administrative Agent or the
Collateral Agent.

 

(e)   With respect to any Equity
Interests in any Foreign Subsidiary or Project Subsidiary that are acquired
after the Closing Date by any Loan Party (including as a 

 

59

 

result of formation of a new
Foreign Subsidiary or Project Subsidiary), on or prior to the date of delivery
of the certificate under Section 5.04(c) following the date of such
acquisition (or, in the case of a Project Subsidiary where Equity Interests are
or will be subject to a Lien in favor of lenders of the Permitted Project Debt,
upon payment in full of all Permitted Project Debt of such Subsidiary) (i)
execute and deliver to the Administrative Agent and the Collateral Agent such
amendments to the Guarantee and Collateral Agreement as the Administrative
Agent or the Collateral Agent reasonably deems necessary in order to grant to
the Collateral Agent, for the benefit of the Secured Parties, a perfected
security interest (subject only to Liens permitted under Section 6.02) in
the Equity Interests in such Foreign Subsidiary or such Project Subsidiary that
are owned by the Loan Parties (provided, that
in no event shall more than 65% of the total outstanding voting Equity
Interests in any Foreign Subsidiary be required to be so pledged) and (ii)
deliver to the Collateral Agent any certificates representing any such Equity
Interests that constitute certificated securities, together with undated stock
powers, in blank, executed and delivered by a duly authorized officer of the
pledgor, as the case may be, and take such other action as may be necessary to
perfect the security interest of the Collateral Agent thereon.

 

SECTION 5.10. Interest Rate Protection.
No later than the 120th day after the Closing Date, the Borrower shall enter
into, and for a minimum of two years after the Closing Date maintain,
Hedging Agreements reasonably acceptable to the Administrative Agent such that,
after giving effect thereto, at least 50% of the aggregate principal amount of
its consolidated funded long-term Indebtedness is effectively subject to a
fixed or maximum interest rate.

 

ARTICLE VI

Negative Covenants

 

Each of Holdings and the Borrower covenants and agrees that, until the
Commitments have been terminated and the principal of and interest on each
Loan, all Fees and all other expenses or amounts payable under any Loan
Document have been paid in full, neither Holdings nor the Borrower will, nor
will they cause or permit any of their Subsidiaries to:

 

SECTION 6.01. Indebtedness. Incur,
create, assume or permit to exist any Indebtedness, except:

 

(a) Indebtedness
existing on the Closing Date and set forth in Schedule 6.01 and any
Permitted Refinancing thereof;

 

(b) Indebtedness
created hereunder and under the other Loan Documents;

 

(c) Indebtedness
under the First Lien Credit Agreement in an aggregate principal amount not to
exceed (x) $550,000,000 plus
(y) (A) the aggregate principal amount of incremental loans not to
exceed $100,000,000 made thereunder in accordance with the provisions thereof plus (B) $20,000,000, and 

 

60

 

any refinancing, substitution, extension,
replacement or restructuring of the foregoing that is not prohibited by the
Intercreditor Agreement;

 

(d) intercompany
Indebtedness of Holdings and its Subsidiaries to extent permitted by
Section 6.04;

 

(e) Indebtedness
of the Borrower or any of its Subsidiaries incurred to finance the acquisition,
construction or improvement of any asset, and any Permitted Refinancing
thereof; provided, that
(i) such Indebtedness (other than Permitted Refinancing) is incurred prior
to or within 270 days after such acquisition or the completion of such
construction or improvement and (ii) the aggregate principal amount of
Indebtedness permitted by this Section 6.01(e), when combined with the
aggregate principal amount of all Capital Lease Obligations incurred pursuant
to Section 6.01(f), shall not exceed $35,000,000 at any time outstanding;

 

(f) Capital
Lease Obligations in an aggregate principal amount, when combined with the
aggregate principal amount of all Indebtedness incurred pursuant to Section 6.01(e),
not in excess of $35,000,000 at any time outstanding;

 

(g) Indebtedness
of the Borrower and the Subsidiaries (A) assumed in connection with any
Permitted Acquisition (so long as such Indebtedness is not incurred in
contemplation of such Permitted Acquisition) or (B) owed to the seller of any
property acquired in a Permitted Acquisition on an unsecured, subordinated
basis (which subordination shall be on terms reasonably acceptable to the
Administrative Agent) and, in each case any Permitted Refinancing in respect of
the foregoing; provided, that in
each case, (i) such Indebtedness is unsecured (other than as permitted by
Section 6.02), (ii) both immediately prior and after giving effect
thereto, (1) no Default shall exist or result therefrom and
(2) Holdings and its Subsidiaries will be in Pro Forma Compliance with the
covenant set forth in Section 6.10;

 

(h) unsecured
Indebtedness (“Permitted
Senior Debt”) of the Borrower; provided,
that (i) the aggregate principal amount of Indebtedness permitted
by this Section 6.01 (h) at any time outstanding shall not exceed $150,000,000
(ii) both immediately prior and after giving effect to incurring any such
Indebtedness, (1) no Default shall exist or result therefrom and
(2) Holdings and its Subsidiaries will be in Pro Forma Compliance with the
covenant set forth in Section 6.10, (iii) such Indebtedness does not
mature prior to the date 91 days after the Maturity Date, and does not
require any scheduled amortization or other scheduled payments of principal
prior to the Maturity Date (it being understood that such Indebtedness may have
mandatory prepayment, repurchase or redemption provisions satisfying the
requirement of clause (iv) hereof) and (iv) such Indebtedness has
terms (other than interest rate and redemption premiums), taken as a whole,
that are not materially less favorable to the Borrower than the terms of senior
unsecured debt securities of comparable issuers issued in the capital markets;

 

61

 

(i) unsecured
subordinated Indebtedness (“Permitted Subordinated Debt”) of the Borrower; provided, that (i) the aggregate
principal amount of Indebtedness permitted by this Section 6.01(i) at any
time outstanding shall not exceed $200,000,000 (ii) both immediately prior
and after giving effect to incurring any such Indebtedness, (1) no Default
shall exist or result therefrom and (2) Holdings and the Subsidiaries will
be in Pro Forma Compliance with the covenant set forth in Section 6.10,
(iii) such Indebtedness does not mature prior to the date 91 days
after the Maturity Date and does not require any scheduled amortization or
other scheduled payments of principal prior to the Maturity Date (it being
understood that such Indebtedness may have mandatory prepayment, repurchase or
redemptions provisions satisfying the requirement of clause (iv) hereof),
(iv) such Indebtedness has terms (other than interest rate and redemption
premiums), taken as a whole, that are not materially less favorable to the Borrower
than the terms of the senior subordinated debt securities of comparable issuers
issued in the capital markets and (v) such Indebtedness (and any
Guarantees thereof) are subordinated to the Obligations (and any refinancing
thereof) on terms no less favorable to the Lenders than subordination terms
customary for senior subordinated debt securities of comparable issuers issued
in the capital markets or on terms reasonably acceptable to the Administrative
Agent;

 

(j) Guarantees
by Holdings, the Borrower or any of their Subsidiaries of Indebtedness (other
than Permitted Project Debt) of the Borrower or any other Subsidiary otherwise
permitted hereunder; provided, that
(x) no guarantee of any Permitted Subordinated Debt, Permitted Senior Debt or
other subordinated Indebtedness that is Material Indebtedness (or any Permitted
Refinancing thereof) by any Subsidiary that is not a Loan Party shall be
permitted unless such Subsidiary shall have also provided a Guarantee of the
Obligations substantially on the terms set forth in the Guarantee and
Collateral Agreement and (y) if the Indebtedness being Guaranteed is
subordinated to the Obligations, such Guarantee shall be subordinated to the
Guarantee of the Obligations on terms at least as favorable to the Lenders as
those contained in the subordination of such Indebtedness;

 

(k) Indebtedness
incurred by Holdings and its Subsidiaries representing deferred compensation to
directors, officers, members of management, employees or consultants of
Holdings and its Subsidiaries incurred in the ordinary course of business;

 

(l) Indebtedness
consisting of promissory notes issued by Holdings or any of its Subsidiaries to
future, present or former directors, officers, members of management, employees
or consultants of Holdings or any of its Subsidiaries or their respective
estates, heirs, family members, spouses or former spouses to finance the
purchase or redemption of Equity Interests of Holdings permitted by Section
6.06;

 

62

 

(m) Indebtedness
incurred by Holdings or any of its Subsidiaries in a Permitted Acquisition or
an Asset Sale under agreements providing for indemnification, the adjustment of
the purchase price or similar adjustments;

 

(n) Indebtedness
consisting of obligations of Holdings or any of its Subsidiaries under deferred
compensation or other similar arrangements incurred by such person in
connection with the Transaction and Permitted Acquisitions;

 

(o) cash
management obligations and Indebtedness incurred by Holdings or any of its
Subsidiaries in respect of netting services, overdraft protections and similar
arrangements in each case in connection with cash management and deposit
accounts;

 

(p) Indebtedness
consisting of (i) the financing of insurance premiums or (ii) take-or-pay obligations
of the Borrower or any of its Subsidiaries contained in supply arrangements, in
each case, in the ordinary course of business;

 

(q) Indebtedness
incurred by Holdings and its Subsidiaries constituting reimbursement
obligations with respect to letters of credit issued in the ordinary course of
business in respect of workers compensation claims, unemployment insurance,
health, disability or other employee benefits or property, casualty or
liability insurance or self-insurance or other Indebtedness with respect to
such similar reimbursement-type obligations; provided,
that upon the drawing of such letters of credit or the incurrence of
such Indebtedness, such obligations are reimbursed within 30 days following
such drawing or incurrence;

 

(r) obligations
in respect of surety, stay, customs and appeal bonds, performance bonds,
performance and completion guarantees and other obligations of a like nature
provided by the Borrower or any of its Subsidiaries or obligations in respect
of letters of credit related thereto, in each case in the ordinary course of
business; provided, that upon the
drawing of such letters of credit or the incurrence of such Indebtedness, such
obligations are reimbursed within 30 days following such drawing or incurrence;

 

(s) Indebtedness
in respect of Hedging Agreements entered into in the ordinary course of
business and not for speculative purposes;

 

(t) Indebtedness
in respect of any bankers’ acceptances supporting trade payables, warehouse
receipts or similar facilities entered into the ordinary course of business;

 

(u) Indebtedness
(other than for borrowed money) subject to Liens permitted under Section 6.02;

 

(v) other
Indebtedness of the Borrower or any of its Subsidiaries in an aggregate
principal amount not exceeding $35,000,000 at any time outstanding;

 

(w) Permitted
Project Debt; and

 

63

 

(x) all
premiums (if any), interest (including post-petition interest), fees, expenses,
charges and additional or contingent interest on obligations described in
clauses (a) through (w) above.

 

SECTION 6.02. Liens. Create, incur,
assume or permit to exist any Lien on any property or any income or revenues or
rights in respect of any thereof now owned or hereafter acquired by it, except:

 

(a) Liens on
property of the Borrower and the Subsidiaries existing on the Closing Date and
set forth in Schedule 6.02 and modifications, refinancings, extensions,
renewals and replacements thereof; provided,
that (i) the Lien does not extend to any additional property
other than (A) after-acquired property that is affixed or incorporated
into the property covered by such Lien or financed by Indebtedness permitted
under Section 6.01, and (B) proceeds and products thereof and
(ii) the modification, refinancing, extension, renewal and replacement
thereof of the obligations secured or benefited by such Liens (if such
obligations constitute Indebtedness) is permitted by Section 6.01;

 

(b) any Lien
created under the Loan Documents;

 

(c) First
Priority Liens (including, for the avoidance of doubt, in connection with the
cash collateralization of any letter of credit issued under the First Lien
Credit Agreement);

 

(d) any Lien
existing on any property acquired by the Borrower or any of its Subsidiaries
after the Closing Date (if such Lien existed prior to the acquisition of such
asset) or existing on any property or assets of any person that becomes a
Subsidiary after the Closing Date prior to the time such person becomes a
Subsidiary, as the case may be and any modification, refinancing, extension,
renewal and replacement thereof; provided,
that (i) such Lien is not created in contemplation of or in
connection with such acquisition or such person becoming a Subsidiary,
(ii) in the case of Liens securing purchase money Indebtedness or Capital
Lease Obligations, such Lien does not apply to any other property or assets of
Holdings, the Borrower or any Subsidiary (other than the proceeds or products
thereof and after-acquired property subjected to a Lien pursuant to terms existing
at the time of such acquisition, it being understood that such requirement
shall not be permitted to apply to any property to which such requirement would
not have applied but for such acquisition); provided,
that individual financings otherwise permitted to be secured
hereunder provided by one person (or its affiliates) may be cross
collateralized to other such financings provided by such person (or its
affiliates), (iii) in the case of Liens securing Indebtedness other than
purchase money Indebtedness or Capitalized Lease Obligations, such Liens do not
extend to the property of any person other than the person acquired or formed
to make such acquisition and the subsidiaries of such person and (iv) the
Indebtedness secured thereby (or, as applicable, any modifications,
replacements, renewals or extensions thereof) is permitted under
Section 6.01;

 

64

 

(e) Liens for
taxes (i) which are not yet overdue for a period of more than 30 days, or,
(ii) if more than 30 days overdue (x) so long as the validity or
amount thereof is (A) being contested in good faith, (B) by
appropriate proceedings diligently conducted and (C) with respect to which
adequate reserves in accordance with GAAP have been established or (y) with
respect to which the failure to make payment could not reasonably be expected
to have a Material Adverse Effect;

 

(f) carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s, landlords, construction
contractors or other like Liens arising in the ordinary course of business and
securing obligations which are not overdue for a period of more than 30 days,
or, if more than 30 days overdue, (i) which are being contested in good
faith and by appropriate proceedings diligently conducted, if adequate reserves
with respect thereto are maintained on the books of the applicable person in
accordance with GAAP or (ii) with respect to which the failure to make
payment could not reasonably be expected to have a Material Adverse Effect;

 

(g) (i) Liens
incurred in the ordinary course of business in compliance with workmen’s
compensation, unemployment insurance and other social security laws or
regulations, (ii) Liens incurred in the ordinary course of business
securing insurance premiums or reimbursement obligations under insurance
policies or (iii) obligations in respect of letters of credit or bank
guarantees that have been posted by Holdings or any of its Subsidiaries to
support the payment of the items set forth in clauses (i) and (ii) of this
Section 6.02(g);

 

(h) (i) deposits
to secure the performance of bids, trade contracts (other than Indebtedness for
borrowed money), leases, statutory obligations, surety, stay, customs and
appeal bonds, performance bonds, performance and completion guarantees and
other obligations of a like nature incurred in the ordinary course of business
(including Hedging Agreements) and (ii) obligations in respect of letters of
credit or bank guarantees that have been posted by the Borrower or any of its Subsidiaries
to support the payment of items set forth in clause (i) of this Section
6.02(h);

 

(i) zoning
restrictions, easements, rights-of-way, restrictions on use of real property
and other similar encumbrances incurred in the ordinary course of business
which, in the aggregate, are not substantial in amount and do not materially
detract from the value of the property subject thereto or interfere with the
ordinary conduct of the business of Holdings or any of its Subsidiaries;

 

(j) purchase
money security interests in property acquired (or, in the case of improvements,
constructed) by the Borrower or any Subsidiary; provided, that (i) such security interests secure
Indebtedness permitted by Section 6.01, (ii) such security interests
are incurred, and the Indebtedness secured thereby is created, within 270 days
after such acquisition (or construction), and (iii) such security
interests do not apply to any other property or assets of the Borrower or any
Subsidiary; provided, that
individual financings otherwise permitted to be secured 

 

65

 

hereunder provided by one person (or its
affiliates) may be cross collateralized to other such financings provided by
such person (or its affiliates);

 

(k) judgment
Liens securing judgments not constituting an Event of Default under Article
VII;

 

(l) any
interest or title of a lessor or sublessor under any lease entered into by the
Borrower or any of its Subsidiaries in the ordinary course of business and
covering only the assets so leased and any Liens of such lessor’s or sublessor’s
interest or title;

 

(m) Liens
(i) on cash deposits and other funds maintained with a depositary
institution, in each case arising in the ordinary course of business by virtue
of any statutory or common law provision relating to banker’s liens,
(ii) attaching to commodity trading accounts or other brokerage accounts
incurred in the ordinary course of business, (iii) in favor of a banking
institution arising as a matter of law encumbering deposits (including the
right of set-off) and which are within the general parameters customary in the
banking industry, (iv) relating to a pooled deposit or sweep accounts of
Holdings or any of its Subsidiaries to permit satisfaction of overdraft or
similar obligations incurred in the ordinary course of business of such person
or (v) relating to purchase orders and other similar agreements entered into in
the ordinary course of business;

 

(n) (i) leases,
subleases, licenses or sublicenses granted to any other person in the ordinary
course of business and (ii) the rights reserved or vested in any person by
the terms of any lease, license, franchise, grant or permit held by Holdings or
any of its Subsidiaries or by a statutory provision to terminate any such
lease, license, franchise, grant or permit or to require periodic payments as a
condition to the continuance thereof;

 

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

 

(p) Liens (i)
(A) on advances of cash or Permitted Investments in favor of the seller of any
property to be acquired in an Investment permitted pursuant to Section 6.04 to
be applied against the purchase price for such Investment, and (B) consisting
of an agreement to dispose of any property in an Asset Sale permitted under
Section 6.05, in each case, solely to the extent such Investment or Asset
Sale, as the case may be, would have been permitted on the date of the creation
of such Lien and (ii) on cash earnest money deposits made by Holdings or
any of its Subsidiaries in connection with any letter of intent or purchase
agreement permitted hereunder;

 

(q) Liens in
favor of the Borrower or any Subsidiary securing Indebtedness permitted under
Section 6.04(a) or other obligations (other than 

 

66

 

Indebtedness) owed by the Borrower or any of
its Subsidiaries to the Borrower or any of its other Subsidiaries;

 

(r) Liens
arising from precautionary UCC financing statement filings (or similar filings
under applicable Law) regarding leases entered into by the Borrower or any of
its Subsidiaries in the ordinary course of business;

 

(s) Liens
arising out of conditional sale, title retention, consignment or similar
arrangements for sale of goods entered into by the Borrower or any of its
Subsidiaries in the ordinary course or business not prohibited by this
Agreement;

 

(t) Liens on
assets of Project Subsidiaries securing Permitted Project Debt; and

 

(u) other
Liens securing Indebtedness or other obligations outstanding in an aggregate
principal amount not to exceed $20,000,000.

 

SECTION 6.03. Sale and Lease-Back Transactions.
Enter into any arrangement, directly or indirectly, with any person 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 which it intends to use for substantially the
same purpose or purposes as the property being sold or transferred unless
(a) the sale or transfer of such property is permitted by Section 6.05 and
(b) any Capital Lease Obligations, Guarantees or Liens arising in
connection therewith are permitted by Sections 6.01 and 6.02, as
applicable.

 

SECTION 6.04. Investments, Loans and Advances.
Purchase, hold or acquire any Equity Interests or evidences of indebtedness of,
make or permit to exist any loans or advances to, or make or permit to exist
any investment in any other person, or purchase or otherwise acquire all or
substantially all the assets or business of any other person or assets
constituting a business unit, line of business or division of another person
(collectively, an “Investment”), except:

 

(a) (i)
Investments by Holdings, the Borrower and the Subsidiaries in Holdings, the Borrower
and the Subsidiaries; provided, that
(i) the aggregate amount of Investments made after the Closing Date by
Loan Parties in Subsidiaries of Holdings (other than D&W Railroad, LLC, so
long as it is not a wholly-owned Subsidiary) that are not Loan Parties (determined
without regard to any write-downs or write-offs of such Investments) shall not
exceed $7,500,000 at any time outstanding; and (ii) Investments by
Holdings and its Subsidiaries in D&W Railroad, LLC may not exceed the
amounts required to be contributed by the Borrower to D&W
Railroad, LLC pursuant to Section 3.01(b) of the Limited Liability
Company Agreement of D&W Railroad, LLC dated as of December 20,
2005 as in effect on the date hereof, other than any contributions used to
materially extend the rail line.

 

(b) Investment
in assets that were Permitted Investments at the time made;

 

67

 

(c) Investments
received in connection with the bankruptcy or reorganization of, or settlement
of delinquent accounts or other disputes with, any person, in each case in the
ordinary course of business and upon foreclosure with respect to any secured
Investment or other transfer of title with respect to any secured Investment;

 

(d) Holdings
and its Subsidiaries may make loans and advances in the ordinary course of
business to their respective directors, officers, members of management,
employees and consultants in an aggregate principal amount at any time
outstanding (determined without regard to any write-downs or write-offs of such
loans and advances) not to exceed $7,500,000;

 

(e) the
Borrower and the Subsidiaries may enter into Hedging Agreements that
(i) are required by Section 5.10 or (ii) are not speculative in
nature and are entered into to hedge or mitigate risks to which the Borrower or
a Subsidiary is exposed in the conduct of its business;

 

(f) Permitted
Acquisitions;

 

(g) Investments
consisting of non-cash consideration received from an Asset Sale in compliance
with Section 6.05;

 

(h) Investments
consisting of extensions of credit in the nature of accounts receivable or
notes receivable arising from the grant of trade credit in the ordinary course
of business, and Investments received in satisfaction or partial satisfaction
thereof from financially troubled account debtors and other credits to
suppliers in the ordinary course of business;

 

(i) Investments
consisting of Indebtedness, Liens, sale and leaseback transactions, fundamental
changes, Asset Sales and Restricted Payments permitted under Section 6.01,
6.02, 6.03, 6.05 and 6.06, respectively;

 

(j) Investments
existing or contemplated on the date hereof and set forth on Schedule 6.04
and any modification, replacement, renewal or extension thereof; provided, that the amount of the original
Investment is not increased except by the terms of such Investment or as
otherwise permitted by this Section 6.04;

 

(k) loans and
advances to Holdings in lieu of, and not in excess of the amount of (after giving
effect to any other loans, advances or Restricted Payments in respect thereof),
Restricted Payments permitted to be made to Holdings in accordance with Section
6.06;

 

(l) advances
of payroll payments to employees in the ordinary course of business;

 

(m) Guarantees
by Holdings or any of its Subsidiaries of leases (other than Capital Lease
Obligations) entered into in the ordinary course of business;

 

68

 

(n) Investments
in the ordinary course consisting of endorsements for collection or deposit;
and

 

(o) additional
Investments (net of any cash repayment of or return on such Investments
theretofore received) (i) not to exceed $25,000,000 in any fiscal year (provided, that to the extent that the
aggregate amount of Investments made by Holdings and its Subsidiaries in any
fiscal year pursuant to this Section 6.04(o) (x) is less than the amount permitted
for such fiscal year, the amount of such difference may be carried forward and
used to make Investments in the succeeding fiscal years, and (y) is greater
than the amount permitted for such fiscal year (including any amount carried
forward pursuant to clause (x)), an amount of up to 100% of the amount
otherwise permitted for the immediately succeeding fiscal year may be
reallocated to such current fiscal year) and (ii) up to an amount equal to the
sum of (A) the aggregate amount of Net Cash Proceeds from any issuance of
Equity Interests (other than Disqualified Equity Issuances) after the Closing
Date, plus (B) the Cumulative Excess
Cash Flow, but only to the extent the amounts described in clauses (A) and (B)
above are Not Otherwise Applied.

 

SECTION 6.05. Mergers, Consolidations, and Sales
of Assets. (a)  Merge into
or consolidate with any other person, or permit any other person to merge into
or consolidate with it, except:

 

(i) any
Subsidiary may merge into (x) the Borrower in a transaction in which the
Borrower is the surviving corporation or the surviving person shall expressly
assume the obligations of such Borrower in a manner reasonably acceptable to
the Administrative Agent, or (y) any one or more other Subsidiaries; provided, that when any such Subsidiary is a Loan Party (A)
a Loan Party shall be the continuing or surviving person or (B) to the
extent constituting an Investment, such Investment must be an Investment in or
Indebtedness permitted by Sections 6.04 and 6.01, respectively;

 

(ii) the
Merger;

 

(iii) Holdings
may merge with Parent so long as (A) the continuing or surviving entity is
or becomes a party to this Agreement and each other Loan Document to which
Holdings is a party (in which case the term “Holdings” shall be deemed to refer
to such surviving entity for all purposes of the Loan Documents) and (B) no
Default exists or would result therefrom;

 

(iv) so long
as no Event of Default exists or would result therefrom, the Borrower or any of
its Subsidiaries may merge with any other person in order to effect an
Investment permitted pursuant to Section 6.04; provided,
that (A) if the continuing or surviving person is a Subsidiary, such
Subsidiary shall have complied with the requirements of 

 

69

 

Section 5.09, (B) to the extent
constituting an Investment, such Investment must be permitted under
Section 6.04 and (C) if the Borrower is a party thereto, the Borrower
shall be the continuing or surviving person or the surviving person shall
expressly assume the obligations of the Borrower in a manner reasonably
acceptable to the Administrative Agent;

 

(v) the Borrower
and the Subsidiaries may consummate a merger or consolidation, the purpose of
which is to effect an Asset Sale permitted pursuant to Section 6.05(b); provided, that if the Borrower is a party thereto,
(A) the Borrower shall be the continuing or surviving person or the
surviving person shall expressly assume the obligations of the Borrower in a
manner reasonably acceptable to the Administrative Agent and (B) the
Borrower or such continuing or surviving person shall continue to be a direct
wholly owned Subsidiary of Holdings; and

 

(vi) the
Borrower may merge with one of its Subsidiaries for the purpose of effecting an
Investment permitted pursuant to Section 6.04; provided,
that (A) the Borrower shall be the continuing or surviving
person or the surviving person shall expressly assume the obligations of the
Borrower in a manner reasonably acceptable to the Administrative Agent, and (B)
the Borrower or such surviving person shall continue to be a direct wholly
owned Subsidiary of Holdings.

 

(b)   Make any Asset Sale except:

 

(i) Asset
Sales of obsolete, used, surplus or worn out property, whether now owned or
hereafter acquired, or of property no longer used or useful in the conduct of
business of the Borrower and the Subsidiaries, in each case in the ordinary
course of business;

 

(ii) Asset
Sales of inventory in the ordinary course of business;

 

(iii) Asset
Sales to the extent that (A) such property is exchanged for credit against the
purchase price of similar replacement property or (B) the proceeds of such
Asset Sale are promptly applied to the purchase price of such replacement
property;

 

(iv) Asset
Sales by the Borrower or any of its Subsidiaries to the Borrower or any of its
Subsidiaries (in each case including any such Asset Sales effected pursuant to
a merger, liquidation or dissolution); provided, that
if the transferor of such property is a Loan Party (x) the transferee thereof
must either be the Borrower or a Subsidiary Guarantor or (y) to the extent such
transaction constitutes an Investment, such transaction is permitted under
Section 6.04;

 

(v) Asset
Sales permitted by Sections 6.04, 6.05(a) and 6.06 and Liens permitted by
Section 6.02;

 

70

 

(vi) Asset
Sales of Permitted Investments;

 

(vii) Asset
Sales of accounts receivable in connection with the collection or compromise
thereof;

 

(viii) leases,
subleases, licenses or sublicenses of property in the ordinary course of
business and which do not materially interfere with the business of the Borrower
and the Subsidiaries;

 

(ix) transfers
of property subject to casualty or condemnation proceeding (including in lieu
thereof) upon receipt of the Net Cash Proceeds therefor;

 

(x) Asset
Sales not otherwise permitted under this Section 6.05(b); provided, that (A) at the time of such Asset Sales, no Event
of Default shall exist or would result therefrom, (B) the aggregate book
value of all property disposed of in reliance on this clause (x) shall not exceed
$15,000,000 in any fiscal year and (C) the purchase price for such property (if
in excess of $1,000,000) shall be paid to the Borrower or such Subsidiary for
not less than 75% cash consideration;

 

(xi) Asset
Sales in the ordinary course of business consisting of the abandonment of
intellectual property rights which, in the reasonable good faith determination
of the Borrower, are not material to the conduct of the business of the Borrower
and the Subsidiaries;

 

(xii) Asset
Sales of Investments in joint ventures to the extent required by, or made
pursuant to buy/sell arrangements between the joint venture parties set forth
in, joint venture arrangements and similar binding arrangements (x) in
substantially the form as such arrangements are in effect on the Closing Date
or (y) to the extent that the Net Cash Proceeds of such Asset Sale are applied
to prepay the Loans pursuant to Section 2.13(a);

 

(xiii) Asset
Sales by any Subsidiary of the Borrower of all or substantially all of its
assets (upon voluntary liquidation or otherwise) to the Borrower or to another
Subsidiary; provided, that (x) if the
transferor in such a transaction is a Guarantor, then the transferee must
either be the Borrower or a Guarantor or (y) to the extent constituting an
Investment, such Investment must be an Investment permitted by
Section 6.04;

 

(xiv) Asset
Sales of real property and related assets in the ordinary course of business in
connection with relocation activities for directors, officers, members of
management, employees or consultants of Holdings and the Subsidiaries;

 

(xv) voluntary
terminations of Hedging Agreements other than those required to be maintained
by this Agreement; and

 

71

 

(xvi) the
expiration of any option agreement in respect of real or personal property.

 

SECTION 6.06. Restricted Payments; Restrictive
Agreements. (a)  Declare
or make, or agree to declare or make, directly or indirectly, any Restricted
Payment, or incur any obligation (contingent or otherwise) to do so except:

 

(i)  any Subsidiary may declare and make
Restricted Payments ratably to its equity holders;

 

(ii)  Holdings and its Subsidiaries may declare and
make Restricted Payments payable solely in the Equity Interests (other than
Disqualified Equity Interests) of such person;

 

(iii)  so long as no Event of Default shall have
occurred and be continuing or would result therefrom, Holdings may make
Restricted Payments with the Net Cash Proceeds received from any issuance by
Holdings of its Equity Interests (other than Disqualified Equity Interests) to
the extent Not Otherwise Applied;

 

(iv)  on the Closing Date, Holdings and its
Subsidiaries may consummate the Transaction;

 

(v)  to the extent constituting Restricted
Payments, Holdings and its Subsidiaries may enter into transactions expressly
permitted by Section 6.05 or 6.07;

 

(vi)  repurchases of Equity Interests of Holdings deemed
to occur upon exercise of stock options or warrants if such Equity Interests
represent a portion of the exercise price of such options or warrants;

 

(vii)  Holdings may pay for the repurchase,
retirement or other acquisition or retirement for value of Equity Interests of
Holdings (or may make Restricted Payments to Parent to enable it to repurchase,
retire or otherwise acquire or retire for value Equity Interests of Parent)
held by any future, present or former director, officer, member of management,
employee or consultant of Parent, Holdings or any of its Subsidiaries (or the
estate, heirs, family members, spouse or former spouse of any of the
foregoing); provided, that the aggregate amount of
Restricted Payments made under this clause (vii) does not exceed in any fiscal
year $7,500,000 (with unused amounts in any fiscal year being carried over to
the two succeeding fiscal years subject to a maximum (without giving effect to
the following proviso) of $15,000,000 in any fiscal year)); and provided, further, that
such amount in any fiscal year may be increased by an amount not to exceed (A)
the Net Cash Proceeds from the sale of Equity Interests (other than
Disqualified Equity Interests) of Holdings (or Parent) to directors, officers,
members of management, employees or consultants of Parent, Holdings or of its
Subsidiaries (or the estate, heirs, family members, spouse or former spouse of
any of the foregoing) that occurs after the Closing Date plus (B) the amount of
any cash bonuses otherwise payable to directors, officers, members of
management, 

 

72

 

employees or consultants of Parent, Holdings
or any of its Subsidiaries in connection with the Transaction that are foregone
in return for the receipt of Equity Interests of Holdings (or Parent) pursuant
to a deferred compensation plan of such person (provided,
that Consolidated EBITDA is reduced as a
result thereof) plus (C) the cash proceeds of key man life insurance policies
received by Parent, Holdings, the Borrower or its Subsidiaries after the
Closing Date (provided, that Holdings may elect
to apply all or any portion of the aggregate increase contemplated by clauses
(A), (B) and (C) above in any fiscal year);

 

(viii)  the Borrower may make Restricted Payments to
Holdings (and Holdings may make Restricted Payments to Parent):

 

(A)          the proceeds of which shall be used by
Holdings (or Parent) to (1) pay operating expenses of Parent, Holdings and its
Subsidiaries incurred in the ordinary course of business and other corporate
overhead costs and expenses (including administrative, legal, accounting and
similar expenses provided by third parties), which are reasonable and customary
and incurred in the ordinary course of business, plus any reasonable and
customary indemnification claims made by directors, officers, members of
management, employees or consultants of Parent or Holdings each to the extent attributable
to the ownership or operations of the Borrower and the Subsidiaries and (2) pay
its franchise or similar taxes and other similar fees, taxes and expenses
required to maintain Holdings’ corporate existence;

 

(B)           the proceeds of which will be used by
Holdings (or Parent) to make Restricted Payments permitted by clause (vii)
above;

 

(C)           to finance any Investment permitted
to be made pursuant to Section 6.04; provided, that
(A) such Restricted Payment shall be made substantially concurrently with the
closing of such Investment and (B) Holdings (or Parent) shall, immediately
following the closing thereof, cause (1) all property acquired (whether assets
or Equity Interests) to be contributed to the Borrower or one of its
Subsidiaries or (2) the merger (to the extent permitted in Section 6.05) of the
person formed or acquired into the Borrower or one of its Subsidiaries in order
to consummate such Permitted Acquisition;

 

(D)          the proceeds of which shall be used by
Holdings (or Parent) to pay fees and expenses related to any unsuccessful
equity or debt offering permitted by this Agreement;

 

(E)           the proceeds of which shall be used
to make cash payments in lieu of issuing fractional shares in connection with
the exercise of warrants, options or other securities convertible into or
exchangeable for Equity Interests of Holdings (or Parent) or its Subsidiaries;

 

73

 

(F)           the proceeds of which shall be used
by Holdings (or Parent) to pay customary salary, bonuses and other benefits
payable to officers and employees of Holdings (or Parent) to the extent such
salaries, bonuses and other benefits are directly attributable and reasonably
allocated to the operations of the Borrower and the Subsidiaries;

 

(G)           the proceeds of which shall be used
by Holdings (or Parent) to pay amounts owing pursuant to the Sponsor Agreement,
tax sharing agreements, and other amounts of the type described in Section
6.07, in each case to the extent the applicable payment would be permitted
under Section 6.07 if such payment were to be made by the Borrower or its Subsidiaries;

 

(H)          the proceeds of which are used to make
Tax Distributions;

 

(I)            the proceeds of which are used to make
Specified Tax Payments; and

 

(ix)  in addition to the foregoing, so long as no Event
of Default has occurred and is continuing, Holdings may make other Restricted
Payments in an amount not exceeding applicable CECF Percentage of the
Cumulative Excess Cash Flow that is Not Otherwise Applied.

 

(b)   Enter into, incur or permit
to exist any agreement or other arrangement that prohibits, restricts or
imposes any condition upon:

 

(i)   the ability of Holdings, the Borrower
or any Subsidiary to create, incur or permit to exist any Lien upon any of its
property or assets to secure the Obligations, or

 

(ii)  the ability of any Subsidiary to pay
dividends or other distributions with respect to any of its Equity Interests or
to make or repay loans or advances to the Borrower or any other Subsidiary or
to Guarantee Indebtedness of the Borrower or any other Subsidiary; provided, that

 

(A)          the foregoing shall not apply to

 

(1)           restrictions and conditions imposed
by law or by any Loan Document or the First Lien Credit Agreement,

 

(2)           customary restrictions and conditions
contained in agreements relating to an Asset Sale of a Subsidiary or any
property pending such sale, provided such
restrictions and conditions apply only to the Subsidiary or property that is to
be sold,

 

(3)           restrictions and conditions imposed
on (x) any Foreign Subsidiary by the terms of any Indebtedness of such 

 

74

 

Foreign
Subsidiary permitted to be incurred hereunder or (y) any Project
Subsidiary by the terms of the documentation governing any Permitted Project
Debt of such Project Subsidiary,

 

(4)           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,

 

(5)           are binding on a Subsidiary at the
time such Subsidiary first becomes a Subsidiary, so long as such restrictions
were not entered into solely in contemplation of such person becoming a
Subsidiary,

 

(6)           restrictions and conditions imposed by
the terms of the documentation governing any Indebtedness of a Subsidiary of
the Borrower that is not a Loan Party, which Indebtedness is permitted by
Section 6.01,

 

(7)           are customary provisions in joint
venture agreements and other similar agreements applicable to joint ventures
permitted under Section 6.04 or to D&W Railroad, LLC (so long as it is not
a wholly owned Subsidiary) and applicable solely to such joint venture entered
into in the ordinary course of business or to D&W Railroad, LLC (so long as
it is not a wholly owned Subsidiary), and

 

(8)           are negative pledges and restrictions
on Liens in favor of any holder of Indebtedness permitted under Section 6.01
but only if such negative pledge or restriction expressly permits Liens for the
benefit of the Administrative Agent and/or the Collateral Agent and the Lenders
with respect to the credit facilities established hereunder and the Obligations
under the Loan Documents on a senior basis and without a requirement that such
holders of such Indebtedness be secured by such Liens equally and ratably or on
a junior basis; and

 

(B)           clause (i) of the foregoing shall
not apply to customary provisions in leases, subleases, licenses, sublicenses
and other contracts restricting the assignment thereof.

 

SECTION 6.07. Transactions with Affiliates.
Except for transactions by or among Loan Parties, sell or transfer any property
or assets to, or purchase or acquire any property or assets from, or otherwise
engage in any other transactions with, any of its Affiliates, except:

 

(a) Holdings
or any Subsidiary may engage in any of the foregoing transactions at prices and
on terms and conditions not less favorable to Holdings 

 

75

 

or such Subsidiary than could be obtained on
an arm’s-length basis from unrelated third parties;

 

(b) Holdings
and its Subsidiaries may pay fees (so long as no Event of Default has occurred
under clauses (g)(i) and (h) of Article VII) and pay, expenses and
make indemnification payments to the Sponsor pursuant to and in accordance with
the Sponsor Agreement; provided,
that no Event of Default under clauses (g)(i) or (h) of Article VII has
occurred and is continuing;

 

(c) the
payment of fees and expenses in connection with the consummation of the
Transaction;

 

(d) issuances by
Holdings and the Subsidiaries of Equity Interests not prohibited under this
Agreement;

 

(e) customary
fees payable to any directors of Holdings and Parent and reimbursement of
reasonable out-of-pocket costs of the directors of Holdings and Parent, in the
case of Parent to the extent attributable to the operations of Holdings and its
Subsidiaries);

 

(f) employment
and severance arrangements entered into by Holdings and its Subsidiaries with
their officers and employees in the ordinary course of business;

 

(g) payments
by Holdings and its Subsidiaries to each other pursuant to tax sharing
agreements among Holdings and its Subsidiaries on customary terms;

 

(h) the
payment of customary fees and indemnities to directors, officers and employees
of Holdings and its Subsidiaries in the ordinary course of business;

 

(i) transactions
pursuant to permitted agreements in existence on the Closing Date and set forth
on Schedule 6.07 or any amendment thereto to the extent such an amendment is
not adverse to the interests of the Lenders in any material respect;

 

(j) Restricted
Payments permitted under Section 6.06;

 

(k) payments
by Holdings and its Subsidiaries to the Sponsor made for any customary
financial advisory, financing, underwriting or placement services or in respect
of other investment banking activities, including in connection with
acquisitions or divestitures, which payments are approved by a majority of the
board of directors of Holdings, in good faith; and

 

(l) loans and
other transactions among Holdings and its Subsidiaries to the extent permitted
under this Article VI.

 

SECTION 6.08. Business of Holdings, Borrower and
Subsidiaries. (a)  With
respect to Holdings, engage in any business activities or have any assets or
liabilities 

 

76

 

other than its
ownership of the Equity Interests of the Borrower and liabilities and
activities incidental thereto including its liabilities pursuant to the Loan
Documents, the First Lien Credit Agreement and related loan documents, the
Purchase Agreement and the related Transactions and any transactions Holdings
is permitted to engage in pursuant to this Article 6.

 

(b)   With respect to the Borrower
and the Subsidiaries, engage at any time in any business or business activity
other than the business conducted by it on the Closing Date (after giving
effect to the Transactions) and business activities reasonably incidental, ancillary
or related thereto.

 

SECTION 6.09. Other Indebtedness and Agreements.
(a)  Permit any waiver, supplement,
modification, amendment, termination, release, refinancing or refunding of (i) the
First Lien Credit Agreement and the First Lien Guarantee and Collateral
Agreement except to the extent such waiver, supplement, modification,
amendment, termination, release, refinancing or refunding is effected in
accordance with the Intercreditor Agreement or (ii) the provisions with
respect to the payment of fees set forth in the Sponsor Agreement, in each case
if the effect of such waiver, supplement, modification, amendment, termination
or release is adverse in any material respect to the interests of the Lenders.

 

(b)   (i)  Except for
regular scheduled payments of principal and interest as and when due (to the
extent not prohibited by applicable subordination provisions), make any
distribution, whether in cash, property, securities or a combination thereof,
in respect of, or pay, or offer or commit to pay, or directly or indirectly
redeem, repurchase, retire or otherwise acquire for consideration, or set apart
any sum for the aforesaid purposes, any Permitted Subordinated Debt or Permitted
Senior Debt, (other than with (x) the Net Cash Proceeds of a Qualified Public
Offering, to the extent Not Otherwise Applied and provided,
that no Default has occurred and is continuing, (y) the proceeds of any
Permitted Refinancing of any of the foregoing, or (z) the Net Cash
Proceeds of any issuance of Equity Interests of Holdings (other than a
Qualified Public Offering or Disqualified Equity Interests) to the extent Not
Otherwise Applied or the conversion of any such Indebtedness to Equity
Interests).

 

SECTION 6.10. Maximum Total Leverage Ratio. Permit the Total Leverage Ratio as of
the end of any fiscal quarter ending on or after September 30, 2006, to be
greater than the ratio set forth below opposite the fiscal quarter end:

 

	
  Fiscal Quarter Ending

  	
   

  	
  Ratio

  
	
   

  	
   

  	
   

  
	
  on or prior to December 31, 2008

  	
   

  	
  7.00 to 1.0

  
	
  thereafter but on or prior to
  December 31, 2010

  	
   

  	
  6.75 to 1.0

  
	
  after December 31, 2010

  	
   

  	
  6.50 to 1.0

  

 

77

 

ARTICLE VII

Events of Default

 

In case of the happening of any of the following events (“Events of Default”):

 

(a) any
representation or warranty made or deemed made in any Loan Document or any
representation, warranty, statement or information contained in any report,
certificate, financial statement or other instrument furnished pursuant to any
Loan Document, shall prove to have been false or misleading in any material
respect when so made, deemed made or furnished;

 

(b) default
shall be made in the payment of any principal of any Loan when and as the same
shall become due and payable, whether at the due date thereof or at a date
fixed for mandatory prepayment thereof or by acceleration thereof or otherwise;

 

(c) default shall
be made in the payment of interest on any Loan or any Fee or other amount
(other than an amount referred to in (b) above) due under any Loan
Document, when and as the same shall become due and payable, and such default
shall continue unremedied for a period of three Business Days;

 

(d) default
shall be made in the due observance or performance by Holdings, the Borrower or
any Subsidiary of any covenant, condition or agreement contained in
Section 5.01(a) (with respect to the Borrower), 5.05(a) or 5.08 or in
Article VI;

 

(e) default
shall be made in the due observance or performance by Holdings, the Borrower or
any Subsidiary of any covenant, condition or agreement contained in any Loan
Document (other than those specified in clause (b), (c) or (d) above) and such
default shall continue unremedied for a period of 30 days after written notice
thereof from the Administrative Agent to the Borrower;

 

(f) (i) Holdings,
the Borrower or any Subsidiary shall fail to pay any principal or interest,
regardless of amount, due in respect of any Material Indebtedness, when and as
the same shall become due and payable (after giving effect to an applicable
grace period), which failure enables or permits (with or without the giving of
notice, the lapse of time or both) the holder or holders of 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 or that is a
failure to pay such indebtedness at its maturity or (ii) any other 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 such
Material Indebtedness or any trustee or agent on its or their behalf to cause
any Material 

 

78

 

Indebtedness to become due, or to require the
prepayment, repurchase, redemption or defeasance thereof, prior to its
scheduled maturity; provided, that
clause (ii) shall not apply to secured Material Indebtedness that becomes
due as a result of the voluntary sale or transfer of the property or assets
securing such Material Indebtedness; provided, further, that an Event of Default under
and as defined in the First Lien Credit Agreement (a “First Lien Event of Default”)
shall not in and of itself constitute an Event of Default under this paragraph
unless (x) such First Lien Event of Default shall not be cured or waived
within a period of 45 days following the occurrence thereof or (y) the
loans under the First Lien Credit Agreement accelerate or mature or the
commitments thereunder terminate as a result of such First Lien Event of
Default or the lenders, the administrative agent or the collateral agent under
the First Lien Credit Agreement exercise any remedies as a result of such First
Lien Event of Default;

 

(g) an
involuntary proceeding shall be commenced or an involuntary petition shall be
filed in a court of competent jurisdiction seeking (i) relief in respect
of Holdings, the Borrower or any Subsidiary, or of a substantial part of the
property or assets of Holdings, the Borrower or a Subsidiary, under Title 11
of the United States Code, as now constituted or hereafter amended, or any
other Federal, state or foreign bankruptcy, insolvency, receivership or similar
law, (ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for Holdings, the Borrower or any Subsidiary or
for a substantial part of the property or assets of Holdings, the Borrower or a
Subsidiary or (iii) the winding-up or liquidation of Holdings, the
Borrower or any Subsidiary; and 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;

 

(h) Holdings,
the Borrower or any Subsidiary shall (i) voluntarily commence any
proceeding or file any petition seeking relief under Title 11 of the
United States Code, as now constituted or hereafter amended, or any other
Federal, state or foreign bankruptcy, insolvency, receivership or similar law,
(ii) consent to the institution of any proceeding or the filing of any petition
described in (g) above, (iii) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar official for
Holdings, the Borrower or any Subsidiary or for a substantial part of the
property or assets of Holdings, the Borrower or any Subsidiary, (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, (vi) become unable, admit in writing its general inability or
fail generally to pay its debts as they become due or (vii) take any
action for the purpose of effecting any of the foregoing;

 

(i) one or
more judgments for the payment of money in an aggregate amount exceeding $25,000,000
shall be rendered against Holdings, the Borrower, any Subsidiary or any
combination thereof and the same shall remain undischarged for a period of 60 consecutive
days during which execution shall not be effectively stayed, or any action
shall be legally taken by a judgment creditor 

 

79

 

to levy upon assets or properties of
Holdings, the Borrower or any Subsidiary to enforce any such judgment;

 

(j) an ERISA
Event shall have occurred that, when taken together with all other ERISA Events,
could reasonably be expected to result in liability of the Borrower and the
Subsidiaries in an aggregate amount exceeding $25,000,000;

 

(k) any
Guarantee under the Guarantee and Collateral Agreement for any reason shall
cease to be in full force and effect (other than in accordance with its terms
or in accordance with the terms of the other Loan Documents), or any Guarantor
shall deny in writing that it has any further liability under the Guarantee and
Collateral Agreement (other than as a result of the discharge of such Guarantor
in accordance with the terms of the Loan Documents); or

 

(l) other than
with respect to de minimis items
of Collateral not exceeding $1 million in the aggregate, any Lien
purported to be created by any Security Document shall cease to be, or shall be
asserted in writing by any Loan Party not to be, a valid, perfected, second priority
(except as otherwise expressly provided in this Agreement or such Security
Document) Lien on the securities, assets or properties purported to be covered
thereby, except to the extent that any such loss of perfection or priority
results from the failure of the Collateral Agent as defined in the First Lien
Credit Agreement to maintain possession of certificates representing securities
pledged under the First Lien Guarantee and Collateral Agreement or the failure
of the Collateral Agent to file or record any document delivered to it for
filing or recording;

 

then, and in
every such event (other than an event with respect to Holdings or the Borrower
described in paragraph (g) or (h) above), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower, take either
or both of the following actions, at the same or different
times:  (i) terminate forthwith the Commitments and
(ii) declare the Loans then outstanding to be forthwith due and payable in
whole or in part, whereupon the principal of the Loans so declared to be due
and payable, together with accrued interest thereon and any unpaid accrued Fees
and all other liabilities of the Borrower accrued hereunder and under any other
Loan Document, shall become forthwith due and payable, without presentment,
demand, protest or any other notice of any kind, all of which are hereby
expressly waived by the Borrower, anything contained herein or in any other
Loan Document to the contrary notwithstanding; and in any event with respect to
Holdings or the Borrower described in paragraph (g) or (h) above, the Commitments
shall automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and any unpaid accrued Fees and all
other liabilities of the Borrower accrued hereunder and under any other Loan
Document, shall automatically become due and payable, without presentment,
demand, protest or any other notice of any kind, all of which are hereby
expressly waived by the Borrower, anything contained herein or in any other
Loan Document to the contrary notwithstanding.

 

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Notwithstanding anything to the contrary contained in this Article VII,
in the event that the Borrower fails to comply with the requirements of the financial
covenant set forth in Section 6.10 as of the end of any fiscal quarter,
Holdings shall have the right (the “Cure Right”)
(at any time during such fiscal quarter or thereafter until the date that is
20 days after the date the certificate calculating such financial covenant
is required to be delivered pursuant to Section 5.04(c)) to (i) issue
Qualified Capital Stock for cash or otherwise receive cash contributions to the
common equity of Holdings and (ii) contribute the Net Cash Proceeds
therefrom (the “Cure Amount”) to the Borrower
as common equity (which proceeds are Not Otherwise Applied), and thereupon such
financial covenants shall be recalculated giving effect to the following pro
forma adjustments: (i) Consolidated EBITDA shall be increased, for all purposes
of this Agreement (other than the computation of Total Leverage Ratio for the
purposes of determining Applicable Percentage, CECF Percentage and ECF
Percentage), including determining compliance or Pro Forma Compliance with
Section 6.10 as of the end of such fiscal quarter and applicable subsequent
periods that include such fiscal quarter by an amount equal to the Cure Amount;
and (ii) if, after giving effect to the foregoing recalculations (but not,
for the avoidance doubt, taking into account any repayment of Indebtedness in
connection therewith), the requirements of such financial covenant shall be
satisfied, then the requirements of such financial covenant shall be deemed
satisfied as of the relevant date of determination with the same effect as
though there had been no failure to comply therewith at such date, and the
applicable breach or default of such financial covenant that had occurred shall
be deemed cured for the purposes of this Agreement. Notwithstanding anything
herein to the contrary, (x) in each four fiscal quarter period there shall
be a period of at least one fiscal quarter in which the Cure Right is not
exercised, (y) the Cure Amount shall be no greater than the amount
required for purposes of complying with such financial covenant and (z) upon
Administrative Agent’s receipt of a notice from Holdings or the Borrower that
Holdings intends to exercise the Cure Right, until the 20th day following date
of delivery of the certificate under Section 5.04(c), none of Administrative
Agent or any Lender shall exercise the right to accelerate the Loans or
terminate the Commitments and none of Administrative Agent, Collateral Agent or
any other Lender or Secured Party shall exercise any right to foreclose on or
take possession of the Collateral solely on the basis of an Event of Default
having occurred and being continuing under Section 6.10.

 

ARTICLE VIII

The Administrative Agent and the Collateral Agent

 

Each of the Lenders hereby irrevocably appoints the Administrative
Agent and the Collateral Agent (the Administrative Agent and the Collateral
Agent are referred to collectively as the “Agents”)
its agent and authorizes the Agents to take such actions on its behalf and to
exercise such powers as are delegated to such Agent by the terms of the Loan
Documents, together with such actions and powers as are reasonably incidental
thereto. Without limiting the generality of the foregoing, the Agents are
hereby expressly authorized to execute any and all documents (including
releases) with respect to the Collateral and the rights of the Secured Parties
with respect thereto, as contemplated by and in accordance with the provisions
of this Agreement and the Security Documents. 

 

81

 

The Lenders acknowledge and agree that the Collateral Agent shall also
act, subject to and in accordance with the terms of the Intercreditor
Agreement, as the collateral agent for the lenders under the First Lien Credit
Agreement.

 

The bank serving as the Administrative Agent and/or the Collateral
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 an
Agent, and such bank and its Affiliates may accept deposits from, lend money to
and generally engage in any kind of business with Holdings, the Borrower or any
Subsidiary or other Affiliate thereof as if it were not an Agent hereunder.

 

Neither Agent shall have any duties or obligations except those
expressly set forth in the Loan Documents. Without limiting the generality of
the foregoing, (a) neither Agent shall be subject to any fiduciary or other
implied duties, regardless of whether a Default or Event of Default has
occurred and is continuing, (b) neither Agent shall have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby that such Agent is instructed
in writing to exercise by the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.08), and (c) except as expressly set forth in the Loan
Documents, neither Agent shall have any duty to disclose, nor shall it be
liable for the failure to disclose, any information relating to Holdings, the
Borrower or any of the Subsidiaries that is communicated to or obtained by the
bank serving as Administrative Agent and/or Collateral Agent or any of its
Affiliates in any capacity. Neither Agent shall be liable for any action taken
or not taken by it with the consent or at the request of the Required Lenders
(or such other number or percentage of the Lenders as shall be necessary under
the circumstances as provided in Section 9.08) or in the absence of its
own gross negligence, bad faith or willful misconduct or material breach of the
Loan Documents. Neither Agent shall be deemed to have knowledge of any Default
or Event of Default unless and until written notice thereof is given to such
Agent by Holdings, the Borrower or a Lender, and neither Agent shall be
responsible for or have any duty to ascertain or inquire into (i) any
statement, warranty or representation made in or in connection with any Loan
Document, (ii) the contents of any certificate, report or other document
delivered thereunder or in connection therewith, (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, or (v) 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 such Agent.

 

Each Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper person. Each Agent may also rely
upon any statement made to it orally or by telephone and believed by it to have
been made by the proper person, and shall not incur any liability for relying
thereon. Each Agent may consult with legal counsel (who may be counsel for the
Borrower or any Affiliate thereof), independent accountants and other 

 

82

 

experts selected by it, and shall not be liable for any action taken or
not taken by it in good faith and in accordance with the advice of any such
counsel, accountants or experts.

 

Each Agent may perform any and all its duties and exercise its rights
and powers by or through any one or more sub-agents appointed by it. Each Agent
and any such sub-agent may perform any and all its duties and exercise its
rights and powers by or through their respective Related Parties. The
exculpatory provisions of the preceding paragraphs shall apply to any such
sub-agent and to the Related Parties of each Agent and any such 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 Agent.

 

Subject to the appointment and acceptance of a successor Agent as
provided below, either Agent may resign at any time by notifying in writing the
Lenders and the Borrower. Upon receipt of any such notice of resignation of the
Administrative Agent or the Collateral Agent, the Required Lenders shall have
the right, with the consent of the Borrower (such consent not to be
unreasonably withheld, and provided that
no such consent of the Borrower shall be required if an Event of Default has
occurred and is continuing under clauses (g)(i) or (h) of Article VII), to
appoint a successor which shall be a commercial banking institution organized
under the laws of the United States or any State or a United States branch or
agency of a commercial banking institution, in each case having a combined
capital and surplus of at least $500,000,000 and which shall otherwise be approved
by the Borrower, such approval not to be unreasonably withheld or delayed (and
shall not be required if an Event of Default has occurred and is continuing
under clause (g)(i) or (h) of Article VII). Upon the acceptance of its
appointment as Agent hereunder by a successor, such successor shall succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder. The fees payable by the Borrower to a successor Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor. After an Agent’s resignation
hereunder, the provisions of this Article and Section 9.05 shall continue
in effect for the benefit of such retiring Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while acting as Agent.

 

Each Arranger, in its capacity as such, shall have no duties or
responsibilities, and shall incur no liability, under this Agreement or any
other Loan Document.

 

Each Lender acknowledges that it has, independently and without
reliance upon the Agents, the Arrangers 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 Agents,
the Arrangers 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 or
any other Loan Document, any related agreement or any document furnished
hereunder or thereunder.

 

83

 

To the extent required by any applicable law, the Administrative Agent
may withhold from any interest payment to any Lender an amount equivalent to
any applicable withholding tax. If the Internal Revenue Service or any other Governmental
Authority asserts a claim that the Administrative Agent did not properly
withhold tax from amounts paid to or for the account of any Lender because the
appropriate form was not delivered or was not properly executed or because such
Lender failed to notify the Administrative Agent of a change in circumstance
which rendered the exemption from, or reduction of, withholding tax ineffective
or for any other reason, such Lender shall indemnify the Administrative Agent
fully for all amounts paid, directly or indirectly, by the Administrative Agent
as tax or otherwise, including any penalties or interest and together with all
expenses (including legal expenses, allocated internal costs and out-of-pocket
expenses) incurred.

 

ARTICLE IX

Miscellaneous

 

SECTION 9.01. Notices. 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 fax, as follows:

 

(a)   if to the Borrower or
Holdings, to it at 21050 140th Street, Iowa Falls, IA 50126,
Attention of: J.D. Schlieman and Tim Callahan (Fax No. (641) 648-8925)),
cc: (which shall not constitute notice) Angela Fontana, Esq., Weil, Gotshal
& Manges, LLP, 200 Crescent Court, Suite 300, Dallas, TX
75201;

 

(b)   if to Credit Suisse as an
Agent, to Credit Suisse, Eleven Madison Avenue, New York, NY 10010, Attention
of Agency Group (Fax No. (212) 325-8304); and

 

(c)   if to a Lender, to it at
its address (or fax number) set forth on Schedule 2.01 or in the Assignment and
Acceptance pursuant to which such Lender shall have become a party hereto.

 

All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt if delivered by hand or overnight courier service
or sent by fax or on the date five Business Days after dispatch by certified or
registered mail if mailed, in each case delivered, sent or mailed (properly
addressed) to such party as provided in this Section 9.01 or in accordance
with the latest unrevoked direction from such party given in accordance with
this Section 9.01. As agreed to among Holdings, the Borrower, the
Administrative Agent and the applicable Lenders from time to time in writing, notices
and other communications may also be delivered or furnished by e-mail; 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 5.04(c) unless otherwise agreed by the Applicable Agent; provided, further, that
approval of such procedures may be limited to particular notices or
communications. All such notices and other communications sent to an e-mail
address shall be deemed received upon the sender’s 

 

84

 

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.

 

SECTION 9.02. Survival of Agreement.
All covenants, agreements, representations and warranties made by the Borrower
or Holdings herein and in the certificates or other instruments prepared or
delivered in connection with or pursuant to this Agreement or any other Loan
Document, shall be considered to have been relied upon by the Lenders and shall
survive the making by the Lenders of the Loans, regardless of any investigation
made by the Lenders or on their behalf, and shall continue in full force and
effect as long as the principal of or any accrued interest on any Loan or any
Fee or any other amount payable under this Agreement or any other Loan Document
is outstanding and unpaid and so long as the Commitments have not been
terminated. The provisions of Sections 2.14, 2.16, 2.20 and 9.05 shall
remain operative and in full force and effect regardless of the expiration of
the term of this Agreement, the consummation of the transactions contemplated
hereby, the repayment of any of the Loans, the expiration of the Commitments,
the invalidity or unenforceability of any term or provision of this Agreement
or any other Loan Document, or any investigation made by or on behalf of the
Administrative Agent, the Collateral Agent or any Lender.

 

SECTION 9.03. Binding Effect. This
Agreement shall become effective when it shall have been executed by the
Borrower, Holdings and 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.

 

SECTION 9.04. Successors and Assigns.
(a)  Whenever in this Agreement any of
the parties hereto is referred to, such reference shall be deemed to include
the permitted successors and assigns of such party; and all covenants, promises
and agreements by or on behalf of the Borrower, Holdings, the Administrative
Agent, the Collateral Agent or the Lenders that are contained in this Agreement
shall bind and inure to the benefit of their respective successors and assigns.

 

(b)   Each Lender may assign to
one or more assignees all or a portion of its interests, rights and obligations
under this Agreement (including all or a portion of its Commitment and the
Loans at the time owing to it); provided, however, that (i) each of the Administrative Agent and
the Borrower must give its prior written consent to such assignment (which
consent shall not be unreasonably withheld or delayed), provided,
that the consent of the Borrower shall not be required to any such
assignment (A) made to a Lender (other than to Disqualified Institutions)
or an Affiliate or Related Fund of a Lender (other than to Disqualified Institutions)
or (B) during the continuance of any Event of Default arising under paragraph (b),
(c), (g)(i), or (h) of Article VII, (ii) (A) in the case of any
assignment, other than assignments to any Lender or any Affiliate or Related
Fund thereof, the amount of the Commitment or Loans of the assigning Lender
subject to each such assignment (determined as of the date of the Assignment
and Acceptance with respect to such assignment is delivered to the
Administrative Agent) 

 

85

 

shall not be less than
$1,000,000 (or if less, the entire remaining amount of such Lender’s Commitment
or Loans) and shall be in an amount that is an integral multiple of $1,000,000
(or the entire remaining amount of such Lender’s Commitment or Loans), provided, however, that
simultaneous assignments to two or more Related Funds shall be combined for
purposes of determining whether the minimum assignment requirement is met, and
(B) in the case of any assignment to a Lender (other than to Disqualified Institutions)
or any Affiliate or Related Fund thereof (other than to Disqualified Institutions),
after giving effect to such assignment, the aggregate Commitments or Loans, as
applicable, of the assigning Lender and its Affiliates and Related Funds shall
be zero or not less than $1,000,000 and the aggregate Commitments or Loans, as
applicable, of the assignee Lenders and their Affiliates and Related Funds
shall be not less than $1,000,000, (iii) the parties to each such
assignment shall execute and deliver to the Administrative Agent an Assignment
and Acceptance (such Assignment and Acceptance to be (A) electronically
executed and delivered to the Administrative Agent via an electronic settlement
system then acceptable to the Administrative Agent (or, if previously agreed
with the Administrative Agent, manually), and (B) delivered together with
a processing and recordation fee of $3,500, unless waived or reduced by the Administrative
Agent in its sole discretion, provided, that
only one such fee shall be payable in connection with simultaneous assignments
by or to two or more Related Funds) and (iv) the assignee, if it shall not
be a Lender immediately prior to the assignment, shall deliver to the
Administrative Agent an Administrative Questionnaire. Upon acceptance and
recording pursuant to paragraph (e) of this Section 9.04, from and
after the effective date specified in each Assignment and Acceptance,
(A) the assignee thereunder shall be a party hereto and, to the extent of
the interest assigned by such Assignment and Acceptance, have the rights and
obligations of a Lender under this Agreement and (B) the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all or the remaining portion of
an assigning Lender’s rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.14, 2.16, 2.20 and 9.05 with respect to facts and
circumstances occurring prior to the effective date of such assignment, as well
as to any Fees accrued for its account and not yet paid). Any assignment or
transfer that does not comply with this paragraph 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 (f) of this Section 9.04.

 

(c)   By executing and delivering
an Assignment and Acceptance, the assigning Lender thereunder and the assignee
thereunder shall be deemed to confirm to and agree with each other and the
other parties hereto as follows:  (i) such assigning Lender
warrants that it is the legal and beneficial owner of the interest being
assigned thereby free and clear of any adverse claim and that its Commitment or
the outstanding balances of its Loans, in each case without giving effect to
assignments thereof which have not become effective, are as set forth in such
Assignment and Acceptance, (ii) except as set forth in (i) above,
such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement, or the execution, legality,
validity, 

 

86

 

enforceability, genuineness,
sufficiency or value of this Agreement, any other Loan Document or any other
instrument or document furnished pursuant hereto, or the financial condition of
Holdings, the Borrower or any Subsidiary or the performance or observance by
Holdings, the Borrower or any Subsidiary of any of its obligations under this
Agreement, any other Loan Document or any other instrument or document
furnished pursuant hereto; (iii) such assignee represents and warrants
that it is legally authorized to enter into such Assignment and Acceptance;
(iv) such assignee confirms that it has received a copy of this Agreement,
together with copies of the most recent financial statements referred to in
Section 3.05(a) or delivered pursuant to Section 5.04, the
Intercreditor Agreement and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (v) such assignee will independently and
without reliance upon the Administrative Agent, the Collateral Agent, such
assigning Lender or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement;
(vi) such assignee agrees to be bound by the terms of the Intercreditor
Agreement; (vii) such assignee appoints and authorizes the Administrative
Agent and the Collateral Agent to take such action as agent on its behalf and
to exercise such powers under this Agreement as are delegated to the
Administrative Agent and the Collateral Agent, respectively, by the terms
hereof, together with such powers as are reasonably incidental thereto; and
(viii) such assignee agrees that it will perform in accordance with their
terms all the obligations which by the terms of this Agreement are required to be
performed by it as a Lender.

 

(d)   The Administrative Agent,
acting for this purpose as an agent of the Borrower, shall maintain at one of
its offices in The City of New York a copy of each Assignment and Acceptance
delivered to it and a register for the recordation of the names and addresses
of the Lenders and any changes thereto, whether by assignment or otherwise, and
the Commitment of, and principal amount of the Loans (and related interest
amount and fees with respect to such Loan) owing and paid to, each Lender
pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be
conclusive and the Borrower, the Administrative Agent, the Collateral Agent and
the Lenders may treat each person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower, the Collateral Agent and any Lender,
at any reasonable time and from time to time upon reasonable prior notice.

 

(e)   Upon its receipt of, and
consent to, a duly completed Assignment and Acceptance executed by an assigning
Lender and an assignee, an Administrative Questionnaire completed in respect of
the assignee (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) above, if
applicable, and the written consent of the Administrative Agent and the
Borrower to such assignment (in each case to the extent required pursuant to
paragraph (b) above) and any applicable tax forms, the Administrative
Agent shall (i) accept such Assignment and Acceptance and (ii) promptly
record the information contained therein in the Register. No 

 

87

 

assignment shall be effective
unless it has been recorded in the Register as provided in this
paragraph (e).

 

(f)   Each Lender may without the
consent of the Borrower or the Administrative Agent sell participations to one
or more banks or other persons (other than to Disqualified Institutions) in all
or a portion of its rights and obligations under this Agreement (including all
or a portion of its Commitment and the Loans owing to it); provided,
however, that (i) such Lender’s
obligations under this Agreement shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the performance
of such obligations, (iii) the participating banks or other persons shall
be entitled to the benefit of the cost protection provisions contained in
Sections 2.14, 2.16 and 2.20 to the same extent as if they were Lenders
(but, with respect to any particular participant, to no greater extent than the
Lender that sold the participation to such participant and in the case of
Section 2.20, only if such participant shall have provided any form of
information that it would have been required to provide under such Section if
it were a Lender), (iv) such Lender shall maintain a Register
substantially in the form described in Section 9.04(d) (the “Participant
Register”) and (v) the Borrower, the Administrative Agent and the Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under this Agreement, and such Lender shall
retain the sole right to enforce the obligations of the Borrower relating to
the Loans and to approve any amendment, modification or waiver of any provision
of this Agreement (other than amendments, modifications or waivers decreasing
any fees payable to such participating bank or person hereunder or the amount
of principal of or the rate at which interest is payable on the Loans in which
such participating bank or person has an interest, extending any scheduled
principal payment date or date fixed for the payment of interest on the Loans
in which such participating bank or person has an interest, increasing or
extending the Commitments in which such participating bank or person has an
interest or releasing any Guarantor (other than in connection with the sale of
such Guarantor in a transaction permitted by Section 6.05) or all or
substantially all of the Collateral). Each Lender selling a participation to a
participant (i) shall keep a register, meeting the requirements of Treasury
Regulation Section 5f.103-1(c), of each such participation, specifying such
participant’s entitlement to payments of principal and interest with respect to
such participation, and (ii) shall provide the Administrative Agent and the
Borrower with the applicable forms, certificates and statements described in
Section 2.20(e) hereof, prior to the times such participant receives payments
with respect to such participation, as if such participant was a Lender
hereunder.

 

(g)   Any Lender or participant
may, in connection with any assignment or participation or proposed assignment
or participation pursuant to this Section 9.04, disclose to the assignee
or participant or proposed assignee or participant any information relating to
the Borrower furnished to such Lender by or on behalf of the Borrower; provided, that prior to any such disclosure of information
designated by the Borrower as confidential, each such assignee or participant
or proposed assignee or participant shall execute an agreement whereby such assignee
or participant shall agree (subject to customary exceptions) to preserve the
confidentiality of such confidential information on terms no less restrictive
than those applicable to the Lenders pursuant to Section 9.16.

 

88

 

(h)   Any Lender may at any time
assign all or any portion of its rights under this Agreement to secure
extensions of credit to such Lender or in support of obligations owed by such
Lender; provided, that no such assignment shall
release a Lender from any of its obligations hereunder or substitute any such
assignee for such Lender as a party hereto.

 

(i)   Notwithstanding anything to
the contrary contained herein, any Lender (a “Granting Lender”) may grant to a special purpose funding
vehicle (an “SPC”),
identified as such in writing from time to time by the Granting Lender to the
Administrative Agent and the Borrower, the option to provide to the Borrower
all or any part of any Loan that such Granting Lender would otherwise be
obligated to make to the Borrower pursuant to this Agreement; provided, that (i) nothing herein shall constitute
a commitment by any SPC to make any Loan and (ii) if an SPC elects not to
exercise such option or otherwise fails to provide all or any part of such Loan,
the Granting Lender shall be obligated to make such Loan pursuant to the terms
hereof. The making of a Loan by an SPC hereunder shall utilize the Commitment
of the Granting Lender to the same extent, and as if, such Loan were made by
such Granting Lender. Each party hereto hereby agrees that (i) neither the
grant to any SPC nor the exercise by any SPC of such option shall increase the
costs or expenses or otherwise increase or change the obligations of the
Borrower hereunder and (ii) no SPC shall be liable for any indemnity or similar
payment obligation under this Agreement (all liability for which shall remain
with the Granting Lender) and (iii) the Granting Lender shall for all purposes
remain the Lender of record hereunder. In addition, notwithstanding anything to
the contrary contained in this Section 9.04, any SPC may (i) with notice
to, but without the prior written consent of, the Borrower and the
Administrative Agent and without paying any processing fee therefor, assign all
or a portion of its interests in any Loans to the Granting Lender and
(ii) disclose on a confidential basis any non-public information relating
to its funding of Loans to any rating agency, commercial paper dealer or
provider of any surety, guarantee or credit or liquidity enhancement to such
SPC.

 

(j)   Neither Holdings nor the
Borrower shall assign or delegate any of its rights or duties hereunder (other
than in a transaction permitted by Section 6.05(a)) without the prior
written consent of the Administrative Agent and each Lender, and any attempted
assignment without such consent shall be null and void.

 

SECTION 9.05. Expenses; Indemnity. (a)  The Borrower and Holdings agree, jointly and
severally, to pay all reasonable out-of-pocket expenses incurred by the
Arrangers, the Administrative Agent and the Collateral Agent in connection with
the syndication of the Credit Facility and the preparation and administration
of this Agreement and the other Loan Documents or in connection with any
amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions hereby or thereby contemplated shall be
consummated) or incurred by the Arrangers, the Administrative Agent, the
Collateral Agent or any Lender in connection with the enforcement or protection
of its rights in connection with this Agreement and the other Loan Documents or
in connection with the Loans made hereunder, including reasonable fees,
disbursements and other charges of Cravath, Swaine & Moore LLP,
counsel for the Administrative Agent and the Collateral Agent, and, in
connection with 

 

89

 

any such enforcement or protection,
reasonable fees, disbursements and other charges of one outside counsel and one
local counsel in any jurisdiction as the Arrangers, the Administrative Agent,
the Collateral Agent or any Lender determine to be reasonably necessary.

 

(b)   The Borrower and Holdings
agree, jointly and severally, to indemnify each Arranger, the Administrative
Agent, the Collateral Agent, each Lender and each Related Party of any of the
foregoing persons and their successors and assigns (each such person being
called an “Indemnitee”)
against, and to hold each Indemnitee harmless from, any and all costs, expenses
(including reasonable fees, out-of-pocket disbursements and other charges of
one primary counsel and one local counsel to the Indemnitees taken as a whole
in each relevant jurisdiction; provided, that
if (a) one or more Indemnitees shall have reasonably concluded that there
may be legal defenses available to it that are different from or in addition to
those available to one or more other Indemnitees or (b) the representation
of the Indemnitees (or any portion thereof) by the same counsel would be
inappropriate due to actual or potential differing interests between them, then
such expenses shall include the reasonable fees, out-of-pocket disbursements
and other charges of one separate counsel to such Indemnitees, taken as a whole,
in each relevant jurisdiction, and liabilities of such Indemnitee arising out
of or in connection with (i) the execution or delivery of this Agreement
or any other Loan Document or any agreement or instrument contemplated thereby,
the performance by the parties thereto of their respective obligations thereunder
or the consummation of the Transactions and the other transactions contemplated
thereby (including the syndication of the Credit Facility), (ii) the use
of the proceeds of the Loans, (iii) any claim, litigation, investigation
or proceeding relating to any of the foregoing, whether or not any Indemnitee
is a party thereto (and regardless of whether such matter is initiated by a
third party or by the Borrower, any other Loan Party or any of their respective
Affiliates), or (iv) any actual or alleged presence or Release of
Hazardous Materials on any property currently or formerly owned or operated by
Holdings, the Borrower or any of the Subsidiaries, or any Environmental
Liability related in any way to Holdings, the Borrower or the Subsidiaries; provided, that such indemnity shall not, as to any
Indemnitee, be available to the extent that such costs, expenses or liabilities
resulted from the gross negligence, bad faith or willful misconduct of such
Indemnitee (or its Related Parties) or material breach of its (or its Related
Parties’) obligations hereunder or relate to the presence or Release of
Hazardous Materials that first occur at any property owned by Holdings or the
Borrower after such property is transferred to any Indemnitee or its successors
or assigns by foreclosure, deed-in-lieu of foreclosure or similar transfer.

 

(c)   To the extent that Holdings
and the Borrower fail to pay any amount required to be paid by them to the
Administrative Agent or the Collateral Agent under paragraph (a) or (b) of
this Section, each Lender severally agrees to pay to the Administrative Agent
or the Collateral Agent, as the case may be, such Lender’s pro rata share
(determined as of the time that the applicable unreimbursed expense or
indemnity payment is sought) of such unpaid amount; provided,
that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent or the Collateral Agent in its 

 

90

 

capacity as such. For purposes
hereof, a Lender’s “pro rata share” shall be determined based upon its share of
the Loans at the time.

 

(d)   To the extent permitted by
applicable law, no party hereto shall assert, and each party hereto 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
or any Loan or the use of the proceeds thereof.

 

(e)   The provisions of this
Section 9.05 shall survive the expiration of the term of this Agreement,
the consummation of the transactions contemplated hereby, the repayment of any
of the Loans, the expiration of the Commitments, the invalidity or
unenforceability of any term or provision of this Agreement or any other Loan
Document, or any investigation made by or on behalf of the Administrative
Agent, the Collateral Agent or any Lender. All amounts due under this
Section 9.05 shall be payable within 30 days after written demand
therefor.

 

SECTION 9.06. Right of Setoff. If
an Event of Default shall have occurred and be continuing, each Lender is hereby
authorized at any time and from time to time, except to the extent prohibited
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 indebtedness at any
time owing by such Lender to or for the credit or the account of the Borrower
or Holdings against any of and all the obligations of the Borrower or Holdings
now or hereafter existing under this Agreement and other Loan Documents held by
such Lender, irrespective of whether or not such Lender shall have made any
demand under this Agreement or such other Loan Document and although such
obligations may be unmatured. The rights of each Lender under this
Section 9.06 are in addition to other rights and remedies (including other
rights of setoff) which such Lender may have.

 

SECTION 9.07. Applicable Law. THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN AS EXPRESSLY SET FORTH IN
OTHER LOAN DOCUMENTS) SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK.

 

SECTION 9.08. Waivers; Amendment. (a)  No failure or delay of the Administrative
Agent, the Collateral Agent or any Lender in exercising any power or right
hereunder or under any other Loan Document shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent, the
Collateral Agent and the Lenders hereunder and under the other Loan Documents
are cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of this Agreement or any other Loan
Document or consent to any departure by the Borrower or any other Loan Party
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) below, and then such waiver or consent shall be effective
only in the 

 

91

 

specific instance and for the purpose for
which given. No notice or demand on the Borrower or Holdings in any case shall
entitle the Borrower or Holdings to any other or further notice or demand in similar
or other circumstances.

 

(b)   Neither this Agreement nor
any other Loan Document nor any provision hereof or thereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Required Lenders and the Loan Parties that are party
thereto and are affected by such waiver, amendment or modification; provided, however, that
no such agreement shall (i) decrease the principal amount of, or extend
the maturity of or any scheduled principal payment date or date for the payment
of any interest on any Loan, or waive or forgive any such payment or any part
thereof, or decrease any prepayment premium payable under Section 2.11 or 2.12(b)
or the rate of interest on any Loan, without the prior written consent of each
Lender directly adversely affected thereby (it being understood that any change
to the component definitions of the financial covenants contained in
Article VI shall only require the consent of the Borrower and the Required
Lenders), (ii) increase or extend the Commitment or decrease or
extend the date for payment of any Fees of any Lender without the prior written
consent of such Lender, (iii) amend or modify the pro rata
requirements of Section 2.17, the provisions of Section 9.04(j) (it being
understood that any change to Section 6.05 shall only require approval of
the Required Lenders) or the provisions of this Section (except as set forth
below) or release all or substantially all of the Guarantors or all or
substantially all of the Collateral (except as permitted in the Intercreditor
Agreement), without the prior written consent of each
Lender, (iv) modify the protections afforded to an SPC pursuant to
the provisions of Section 9.04(i) without the written consent of such SPC
or (v) reduce the percentage contained in the definition of the term “Required
Lenders” without the prior written consent of each Lender (it being understood
that with the consent of the Required Lenders, additional extensions of credit
pursuant to this Agreement may be included in the determination of the Required
Lenders on substantially the same basis as the Commitments and extensions of
credit thereunder on the date hereof and this Section may be amended to reflect
such extension of credit); provided, further, that no such agreement shall amend, modify or
otherwise affect the rights or duties of the Administrative Agent or the
Collateral Agent hereunder or under any other Loan Document without the prior
written consent of the Administrative Agent or the Collateral Agent.

 

SECTION 9.09. 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 9.09 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 

 

92

 

Maximum Rate therefor) until such cumulated
amount shall have been received by such Lender.

 

SECTION 9.10. Entire Agreement. This
Agreement, the Fee Letter and the other Loan Documents constitute the entire
contract between the parties relative to the subject matter hereof. Any other
previous agreement among the parties with respect to the subject matter hereof
is superseded by this Agreement and the other Loan Documents. Nothing in this
Agreement or in the other Loan Documents, expressed or implied, is intended to
confer upon any person (other than the parties hereto and thereto, their
respective successors and assigns permitted hereunder and, to the extent
expressly contemplated hereby, the Indemnitees, the Arrangers, the Related
Parties of each of the Administrative Agent, the Collateral Agent and the
Lenders) any rights, remedies, obligations or liabilities under or by reason of
this Agreement or the other Loan Documents.

 

SECTION 9.11. 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 RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. 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 AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 9.11.

 

SECTION 9.12. Severability. In the
event any one or more of the provisions contained in this Agreement or in any
other Loan Document should be held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein and therein shall not in any way be affected or impaired thereby
(it being understood that the invalidity of a particular provision in a
particular jurisdiction shall not in and of itself affect the validity of such
provision in any other jurisdiction). The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provisions.

 

SECTION 9.13. Counterparts. 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, and shall become
effective as provided in Section 9.03. Delivery of an executed signature
page to this Agreement by facsimile transmission shall be as effective as
delivery of a manually signed counterpart of this Agreement.

 

93

 

SECTION 9.14. 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 are not to affect the
construction of, or to be taken into consideration in interpreting, this
Agreement.

 

SECTION 9.15. Jurisdiction; Consent to Service of
Process. (a)  Each of
Holdings and the Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any New York
State court or Federal court of the United States of America sitting in
New York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or the other Loan
Documents, or for recognition or enforcement of any judgment, and each of the
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 shall affect any right that the Administrative Agent, the Collateral
Agent or any Lender may otherwise have to bring any action or proceeding
relating to this Agreement or the other Loan Documents against the Borrower,
Holdings or their respective properties in the courts of any jurisdiction.

 

(b)   Each of Holdings and the
Borrower hereby irrevocably and unconditionally waives, to the fullest extent
it may legally and effectively do so, any objection which it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement or the other Loan Documents in any
New York State or Federal court. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.

 

(c)   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 will affect the right
of any party to this Agreement to serve process in any other manner permitted
by law.

 

SECTION 9.16. Confidentiality. Each
of the Administrative Agent, the Collateral Agent 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’ officers,
directors, 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) in connection with the transactions
contemplated or permitted hereby, (b) to the extent requested by any
regulatory authority, (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process (provided, that
the Administrative Agent, Collateral Agent or Lender that discloses
any Information pursuant to this clause (c) shall provide Borrower and Holdings
with prompt notice of such disclosure to the extent permitted by applicable
law), (d) to the extent reasonably necessary in connection with the
exercise of any remedies hereunder or under the other 

 

94

 

Loan Documents or any suit, action or
proceeding relating to the enforcement of its rights hereunder or thereunder,
(e) subject to an agreement containing provisions substantially the same
as those of this Section 9.16 (or as otherwise may be acceptable to
Borrower and Holdings), to (i) any actual or prospective assignee of or
participant in any of its rights or obligations under this Agreement and the
other Loan Documents or (ii) any actual or prospective counterparty (or
its advisors) to any swap or derivative transaction relating to Holdings, the
Borrower, any Subsidiary or any Affiliate thereof or any of their respective
obligations, (f) with the written consent of Holdings or the Borrower or
(g) to the extent such Information becomes publicly available other than
as a result of a breach of this Section 9.16. For the purposes of this
Section, “Information” shall mean
all information received from the Borrower or Holdings and related to the
Borrower or Holdings or their business, other than any such information that is
publicly available to the Administrative Agent, the Collateral Agent or any
Lender, other than by reason of disclosure by Administrative Agent, the
Collateral Agent or any Lender. Any person required to maintain the
confidentiality of Information as provided in this Section 9.16 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 its own confidential information.

 

SECTION 9.17. USA PATRIOT Act Notice.
Each Lender and the Administrative Agent (for itself and not on behalf of any
Lender) hereby notifies Holdings and the Borrower that pursuant to the
requirements of the USA PATRIOT Act, it is required to obtain, verify and
record information that identifies Holdings and the Borrower, which information
includes the name and address of Holdings and the Borrower and other
information that will allow such Lender or the Administrative Agent, as
applicable, to identify Holdings and the Borrower in accordance with the USA
PATRIOT Act.

 

SECTION 9.18. Intercreditor Agreement.
REFERENCE IS MADE TO THE INTERCREDITOR AGREEMENT DATED AS OF JUNE 30, 2006
(AS AMENDED, RESTATED, AMENDED AND RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED
FROM TIME TO TIME, THE “INTERCREDITOR AGREEMENT”),
AMONG THE BORROWER, HOLDINGS, THE SUBSIDIARIES OF THE BORROWER PARTY THERETO,
CREDIT SUISSE, AS FIRST LIEN COLLATERAL AGENT (AS DEFINED THEREIN), AND CREDIT
SUISSE, AS SECOND LIEN COLLATERAL AGENT (AS DEFINED THEREIN). EACH LENDER
HEREUNDER (A) ACKNOWLEDGES THAT IT HAS RECEIVED A COPY OF THE
INTERCREDITOR AGREEMENT, (B) CONSENTS TO THE SUBORDINATION OF LIENS
PROVIDED FOR IN THE INTERCREDITOR AGREEMENT, (C) AGREES THAT IT WILL BE
BOUND BY AND WILL TAKE NO ACTIONS CONTRARY TO THE PROVISIONS OF THE INTERCREDITOR
AGREEMENT AND (D) AUTHORIZES AND INSTRUCTS THE COLLATERAL AGENT TO ENTER
INTO THE INTERCREDITOR AGREEMENT AS COLLATERAL AGENT AND ON BEHALF OF SUCH
LENDER. THE FOREGOING PROVISIONS ARE INTENDED AS AN INDUCEMENT TO THE LENDERS
UNDER THE FIRST LIEN CREDIT AGREEMENT TO EXTEND CREDIT TO THE BORROWER AND SUCH
LENDERS ARE INTENDED THIRD PARTY BENEFICIARIES OF SUCH PROVISIONS.

 

95

 

[Remainder of
this page intentionally left blank]

 

96

 

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.

 

	
   

  	
  HAWKEYE INTERMEDIATE, LLC,

  
	
   

  	
   

  
	
   

  	
  by

  
	
   

  	
  /s/ Bruce Rastetter

  
	
   

  	
  Name: Bruce Rastetter

  
	
   

  	
  Title: Chief Executive Officer

  
	
   

  
	
   

  
	
   

  	
  THL-HAWKEYE ACQUISITION LLC,

  
	
   

  	
   

  
	
   

  	
  by

  
	
   

  	
  /s/ Bruce Rastetter

  
	
   

  	
  Name: Bruce Rastetter

  
	
   

  	
  Title: Chief Executive Officer

  
	
   

  
	
   

  
	
   

  	
  CREDIT SUISSE, CAYMAN ISLANDS

  BRANCH, individually and as

  Administrative Agent and Collateral Agent,

  
	
   

  	
   

  
	
   

  	
  by

  
	
   

  	
  /s/ James Moran

  
	
   

  	
  Name: James Moran

  
	
   

  	
  Title: Managing Director

  
	
   

  
	
   

  	
  by

  
	
   

  	
  /s/ Gregory S. Richards

  
	
   

  	
  Name: Gregory S. Richards

  
	
   

  	
  Title: Associate

  
				

 

97

 

	
   

  	
  SIGNATURE PAGE TO THE

  	
   

  
	
   

  	
  HAWKEYE INTERMEDIATE, LLC

  	
   

  
	
   

  	
  SECOND LIEN CREDIT AGREEMENT

  	
   

  
	
   

  	
  DATED AS OF JUNE 30, 2006

  	
   

  
	
   

  
	
   

  
	
   

  	
  MORGAN STANLEY SENIOR FUNDING, INC.

  
	
   

  	
  as a Lender,

  
	
   

  
	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  /s/ John McCann

  
	
   

  	
   

  	
  Name: John McCann

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BANC OF AMERICA BRIDGE LLC,

  
	
   

  	
  as a Lender,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  /s/ Robert Klawinski

  
	
   

  	
   

  	
  Name: Robert Klawinski

  
	
   

  	
   

  	
  Title: Senior Vice President_

Exhibit 10.16

LITTLE SQUAW GOLD MINING COMPANY

(an Alaska corporation)

3412 S. Lincoln Dr.

Spokane, WA 99203-1650

        

SUBSCRIPTION AGREEMENT

             

Instructions

PLEASE COMPLETE AND SIGN TWO COPIES OF THE SUBSCRIPTION AGREEMENT

January 2006

Little Squaw Gold Mining Company

SUBSCRIPTION AGREEMENT FOR UNITS

The undersigned (the “Subscriber”) hereby irrevocably subscribes for and agrees to purchase from Little Squaw Gold Mining Company (the “Corporation”) that number of Units (the “Units”) set out below at a price of US$0.25 per Unit.  Each Unit consists of one Common Share (as hereinafter defined) and one half of one Warrant (as hereinafter defined).  The Subscriber agrees to be bound by the terms and conditions set forth in the attached “Terms and Conditions of Subscription for Units” including without limitation the representations, warranties and covenants set forth in the applicable schedules attached thereto. The Subscriber further agrees, without limitation, that the Corporation may rely upon the Subscriber’s representations, warranties and covenants contained in such documents.

If you are a “U.S. Purchaser”, complete and sign the U.S. Accredited Investor Certificate – Exhibit A.  A “U.S. Purchaser” is (a) any “U.S. person” as defined in Regulation S under United States federal securities laws, (b) any person purchasing securities on behalf of any “U.S. Person” or any person in the United States, (c) any person that receives or received an offer of the securities while in the United States, or (d) any person that is in the United States at the time the purchaser’s buy order was made or this subscription agreement was executed or delivered.

SUBSCRIPTION AND SUBSCRIBER INFORMATION

Please print all information (other than signatures), as applicable, in the space provided below 

			
	

	 	

Number of Units:  

x US$0.25

	(Name of Subscriber)

	 	 
	 	 	=

	Account Reference (if applicable):  

	 	 
	

By:  

	 	Aggregate Subscription Price:  

(the “Subscription Price”)

	Authorized Signature

	 	 
	 	 	 
	

(Official Capacity or Title – if the Subscriber is not an individual)

(Name of individual whose signature appears above if different than the name of the subscriber printed above.)

(Subscriber’s Address, including Municipality and Province)

S.I.N. or Taxation Account of Subscriber

(Telephone Number)

(Email Address)

	

	

If the Subscriber is signing as agent for a principal (beneficial purchaser) and is not purchasing as trustee or agent for accounts fully managed by it, complete the following:

(Name of Principal)

(Principal’s Address)

	 	 	 

Subscription Agreement - 2 of 27

			
	

Account Registration Information:

(Name)

(Account Reference, if applicable)

(Address, including Postal Code)

	 	

Delivery Instructions as set forth below:

(Name)

(Account Reference, if applicable)

(Address)

(Contact Name)

(Telephone Number)

Subscription Agreement - 3 of 27

SUBSCRIPTION AGREEMENT

FOR UNITS OF

LITTLE SQUAW GOLD MINING COMPANY

(an Alaska corporation)

1.

Unit Subscription: The undersigned (“Subscriber”) irrevocably subscribes for and agrees to purchase from Little Squaw Gold Mining Company, an Alaska corporation (“Little Squaw” or the “Company”) that number of Units of Little Squaw (the “Units”) set out in the “SUBSCRIPTION AND SUBSCRIBER INFORMATION”  at a price of US$0.25 per Unit (the “Purchase Price”).  Each Unit consists of one share of Common Stock, $0.10 par value (a “Common Share”), and one half of one (1/2) Class B Warrant (a “Warrant”); each whole warrant is exercisable to acquire one Common Share (a “Warrant Share”) at an exercise price of  US$0.35 per share during the one-year period commencing on the Closing Date, US$0.50 per share during the second year following the Closing Date, and US$0.65 per share during the third year following the Closing Date (collectively the Common Shares, the Warrants and the Warrant Shares are referred to herein as the “Securities”). The warrant certificates will be in substantially the form attached hereto as Exhibit B.  All figures are in United States Dollars unless otherwise specified.  Such Subscription is subject to the following terms and conditions:

a.

Tender of Purchase Price:  Subscriber tenders to Little Squaw the Purchase Price either by a check payable to the order of “Little Squaw Gold Mining Company” or a wire transfer to Dorsey & Whitney LLP for the benefit of Little Squaw, pursuant to the instructions set forth on Schedule I.

b.

Closing:  Upon receipt by Little Squaw of the Purchase Price, the closing (the “Closing”) shall occur prior to 12:00 p.m. on January 31, 2006, at the offices of Dorsey & Whitney LLP, Republic Plaza Building, Suite 4700, 370 Seventeenth Street, Denver, CO  80202-5647 or at such other time or place as may be agreed to by Little Squaw and the Subscriber  (the "Closing Date").  All funds will be delivered to Little Squaw.  The Securities subscribed for herein will not be deemed issued to, or owned by, the Subscriber until the Subscription Agreement has been executed by the Subscriber and countersigned by Little Squaw, and all payments required to be made herein have been made.  The Closing is subject to the fulfillment of the following conditions (the “Conditions”) which Conditions Little Squaw and the Subscriber covenant to exercise their reasonable best efforts to have fulfilled on or prior to the Closing Date:

(i)

the Subscriber shall have tendered the Purchase Price to Little Squaw;

(ii)

all relevant documentation and approvals as may be required by applicable securities statutes, regulations, policy statements and interpretation notes, by applicable securities regulatory authorities and by applicable rules shall have been obtained and, where applicable, executed by or on behalf of the Subscriber;

(iii)

Little Squaw’s board of directors shall have authorized and approved the execution and delivery of this Subscription Agreement (“Agreement’) and the issuance, allotment and delivery of the Securities;

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(iv)

Little Squaw  and the Subscriber  shall have complied with its covenants contained in this Agreement to be complied with prior to Closing, and Little Squaw for the benefit of the Subscriber shall have delivered a Certificate of a senior officer of the Company (acting without personal liability) to that effect to the Subscriber; and

(v)

the representations and warranties of Little Squaw  and the Subscriber  set forth in this Agreement shall be true and correct as of the Closing Date.

c.

Issuance of Securities:

Within five (5) days after the Closing Date, Little Squaw will deliver the certificates representing the Common Shares and the Warrants subscribed for to the Subscriber at the address set forth in the registration instructions set forth on the signature page (unless Subscriber otherwise instructs Little Squaw in writing).   None of the Units, the Common Shares, the Warrants or the Common Shares issuable upon exercise of the Warrants have been registered under the  Securities Act of 1933, as amended ("U.S. Securities Act"), or the securities laws of any state in the United States.  

2.

Representations and Warranties: Subscriber hereby represents and warrants to Little Squaw:

a.

SUBSCRIBER UNDERSTANDS THAT THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION  OR ANY STATE SECURITIES AGENCY.

b.

Subscriber is not an underwriter and Subscriber acquired the Securities solely for investment for its own account and not with a view to, or for, resale in connection with any distribution of securities within the meaning of the U.S. Securities Act; and the Securities are not being purchased with a view to or for the resale, distribution, subdivision or fractionalization thereof; and the undersigned has no contract, undertaking, understanding, agreement, or arrangement, formal or informal, with any person to sell, transfer, or pledge to any person the securities for which it hereby subscribes, or any part thereof; and it understands that the legal consequences of the foregoing representations and warranties to mean that it must bear the economic risk of the investment for an indefinite period of time because the Securities have not been registered under the U.S. Securities Act, and, therefore, may be resold only if registered under the U.S. Securities Act or if an exemption from such registration is available.

c.

Subscriber understands the speculative nature and risks of investments associated with Little Squaw, and confirms that the Securities would be suitable and consistent with its investment program and that its financial position enables Subscriber to bear the risks of this investment, and that there may not be any public market for the Securities.

d.

The Securities subscribed for herein may not be transferred, encumbered, sold, hypothecated, or otherwise disposed of to any person, except in compliance with the U.S. Securities Act and applicable state securities or “blue sky” laws.  The Subscriber acknowledges that the Securities are “restricted securities,” as such term is defined under Rule 144 of the U.S. Securities Act, and may not be offered, sold, transferred, pledged, or hypothecated to any person in the absence of registration under the U.S. Securities Act or an opinion of counsel satisfactory to the Company that registration is not required.  Without limiting the generality or application of any other covenants, representations, warranties or acknowledgements of the Subscriber respecting resale of the Securities, if the Subscriber decides to offer, sell or otherwise transfer any of the Securities, it will not offer, sell or otherwise transfer any of such Securities directly or indirectly, unless:

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the sale is to the Company;

the sale is made outside the United States in a transaction satisfying the requirements of Regulation S under the U.S. Securities Act and in compliance with applicable local laws and regulations;

the sale is made pursuant to the exemption from the registration requirements under the U.S. Securities Act provided by Rule 144 thereunder and in accordance with any applicable state securities or “blue sky” laws;

the Securities are sold in a transaction that does not require registration under the U.S. Securities Act or any applicable state laws and regulations governing the offer and sale of Securities, and it has prior to such sale furnished to the Company an opinion of counsel to that effect, which opinion and counsel shall be  reasonably satisfactory to the Company; or

the Securities are registered under the U.S. Securities Act and any applicable state laws and regulations governing the offer and sale of such Securities, 

and the Subscriber understands that the Company may instruct its registrar and transfer agent not to record any transfer of the Securities without first being notified by the Company that it is satisfied that such transfer is exempt from or not subject to the registration requirements of the U.S. Securities Act and applicable state securities laws.

e.

Subscriber understands that Little Squaw is under no obligation, except as stated in Section 4 below, to register the Securities or seek an exemption under the U.S. Securities Act or any applicable state laws for the Securities, or to cause or permit the Securities to be transferred in the absence of any such registration or exemption, and understands that Subscriber  must hold the Securities indefinitely unless the Securities are subsequently registered under U.S. Securities Act and applicable state securities laws or an exemption from registration is available.

f.

At the time of subscription, Subscriber reviewed the economic consequences of the purchase of the Securities with its attorney and/or other financial advisor, was afforded access to the books and records of the Company, conducted an independent investigation of the business of the Company, and was fully familiar with the financial affairs of the Company.   Subscriber consulted with its counsel with respect to the U.S. Securities Act and applicable federal and state securities laws. The Company has not provided the Subscriber with any representations, statements, or warranties as to the Securities.  Subscriber has received copies of, or has access to, the Company’s Form 10-KSB/A for the year ended December 31, 2004, the Company’s Form 10-QSB for the quarters ended March 31, 2005, June 30, 2005 and September 30, 2005, the Company’s proxy statement on Schedule 14A dated November 24, 2003 and the Company’s current reports on Form 8-K filed since January 1, 2005, all of which are filed electronically on EDGAR. 

g.

 Subscriber had the opportunity to ask questions of the Company and receive additional information from the Company to the extent that the Company possessed such information, or could acquire it without unreasonable effort or expense, necessary to evaluate the merits and risks of an investment in Little Squaw.

h.

Subscriber confirms that (i) it is able to bear the economic risk of the investment, (ii) it is able to 

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hold the Securities for an indefinite period of time, (iii) it is able to afford a complete loss of its investment and that it has adequate means of providing for its current needs and possible personal contingencies, and that it has no need for liquidity in this investment, (iv) this investment is suitable for Subscriber based upon his investment holdings and financial situation and needs, and this investment does not exceed ten percent of Subscriber’s net worth, and (v) Subscriber by reason of its business or financial experience could be reasonably assumed to have the capacity to protect its own  interests  in connection with this investment. 

i.

The Subscriber has not purchased the Securities as a result of any form of general solicitation or general advertising, including advertisements, articles, notices or other communications published in any newspaper, magazine or similar media or broadcast over radio, or television, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising.

j.

Subscriber confirms that this transaction is intended to be exempt from registration under the U.S. Securities Act by virtue of section 4(2) of the U.S. Securities Act, the provisions of Rule 506 of Regulation D promulgated thereunder, or the exception  from the registration requirements available under Regulations S of the U.S. Securities Act and confirms that it is an “accredited investor” (as that term is defined under Rule 501(a) as promulgated under Regulation D of the U.S. Securities Act).   

k.

Unless the Subscriber has completed and delivered a U.S. Accredited Investor Certificate (Exhibit A), the Subscriber represents and acknowledges that: 

(i) 

it is not a “U.S. person”, as defined in Regulation S under the U.S. Securities Act (which definition includes but is not limited to (A) any individual resident in the United States, (B) any partnership or corporation organized or incorporated under the laws of the United States, (C) any partnership or corporation formed by a U.S. person under the laws of any foreign jurisdiction principally for the purpose of investing in securities not registered under the U.S. Securities Act, or (D) any estate or trust of which any executor, administrator or trustee is a U.S. person), and is not purchasing the Securities for the account or benefit of a “U.S. person”;

(ii) 

it was not offered any of the Securities in the United States, did not receive any materials relating to the offer of the Securities in the United States, and did not execute this Agreement or any other materials relating to the purchase of the Securities in the United States; and 

(iii)

the Certificates representing the Securities delivered pursuant to this Subscription shall bear a legend in the following form:

“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”).  THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B) IF THE SECURITIES HAVE BEEN REGISTERED IN COMPLIANCE WITH THE REGISTRATION 

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REQUIREMENTS UNDER THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS (C) IN COMPLIANCE WITH THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT IN ACCORDANCE WITH RULE 144 THEREUNDER, IF APPLICABLE, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE LAWS AND REGULATIONS GOVERNING THE OFFER AND SALE OF SECURITIES, AND THE HOLDER HAS, PRIOR TO SUCH SALE, FURNISHED TO THE COMPANY AN OPINION OF COUNSEL OF RECOGNIZED STANDING, OR OTHER EVIDENCE OF EXEMPTION, REASONABLY SATISFACTORY TO THE COMPANY.  HEDGING TRANSACTIONS INVOLVING THE SECURITIES REPRESENTED HEREBY MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH U.S. SECURITIES LAWS.”

Notwithstanding the foregoing, Little Squaw or its transfer agent shall issue certificates representing common shares issuable upon conversion of the  warrants without a restrictive legend if there is an effective registration statement (as defined by Section 4(a)) and the holder certifies that the exercise is in connection with a sale and the holder has complied with the applicable prospectus delivery requirements and applicable securities laws.

If the Certificates representing the Securities have been held for a period of at least one (1) year and if Rule 144 under the U.S. Securities Act is applicable (there being no representations by Little Squaw that Rule 144 is applicable), then the undersigned may make sales of the Securities only under the terms and conditions prescribed by Rule 144 of the U.S. Securities Act or exemptions therefrom.  Little Squaw shall use commercially reasonable efforts to cause its legal counsel to deliver an opinion or such other documentation as may reasonably be required to effect sales of the Securities under Rule 144.

All information which the Subscriber has provided concerning the Subscriber is correct and complete as of the date set forth below, and if there should be any change in such information prior to the acceptance of this Agreement by the Company, the Subscriber will immediately provide such information to the Company.

3.

Company Representations, Warranties and Covenants.   Little Squaw represents, warrants  and covenants (and acknowledges that the Subscriber is relying on such representations, warranties and covenants) that, at the Closing Date:

a.

each of Little Squaw and each of its subsidiaries is a valid and subsisting corporation duly incorporated and in good standing under the laws of its jurisdiction of incorporation, and Little Squaw has no subsidiaries other than as set forth in the Company’s annual report on Form 10-K for the year ended December 31, 2004;

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b.

each of Little Squaw and each of its subsidiaries is duly registered and licensed to carry on business in the jurisdictions in which it carries on business or owns property where so required by the laws of that jurisdiction;

c.

Little Squaw and its subsidiaries own, possess or have obtained, and are operating in compliance with, all governmental, administrative and third party licenses, permits, certificates, registrations, approvals, consents and other authorizations (collectively, “Permits”) necessary to own or lease (as the case may be) and operate their properties, and to conduct their businesses or operations as currently conducted, except such Permits the failure of which to obtain would not have a material adverse effect on the business, properties, operations, financial condition or results of operations of Little Squaw or its subsidiaries, and neither Little Squaw nor any of its subsidiaries  has received any notice of proceedings relating to the revocation, modification or suspension of any Permits), if such proceedings would have a material adverse effect on Little Squaw, or any circumstance which would lead it to believe that such proceedings are reasonably likely;

d.

the business and operations of Little Squaw and its subsidiaries have been conducted in accordance with all applicable laws, rules and regulations of all governmental authorities, except for such violations which would not, individually or in the aggregate, have a material adverse effect on the financial condition or business of Little Squaw and its subsidiaries;

e.

the authorized capital of Little Squaw consists of (i) 200,000,000 shares of common stock and (ii) 10,000,000 shares of preferred stock.  As of December 12, 2005, Little Squaw had (A)  16,833,420 shares of common stock issued and outstanding, (B) no shares of preferred stock issued and outstanding, (C) outstanding options and/or warrants exercisable to purchase up to 4,520,000 shares of common stock, and (D) outstanding convertible debentures convertible to acquire 5,000,000 shares of common stock ;

f.

Little Squaw will reserve or set aside sufficient shares of common stock in its treasury to issue the Common Shares issuable upon exercise of the Warrants, and all such Securities will upon payment of the recited consideration and issuance be duly and validly issued as fully paid and non-assessable;

g.

the issue and sale of the Securities by Little Squaw does not and will not conflict with, and does not and will not result in a breach of, any of the terms of its incorporating documents or any agreement or instrument to which Little Squaw is a party;

h.

Little Squaw has complied and will comply fully with the requirements of all applicable corporate and securities laws in all matters relating to the offering of the Units;

i.

there are no legal or governmental actions, suits, proceedings or investigations pending or, to Little Squaw’s knowledge, threatened, to which Little Squaw or any of its subsidiaries is or may be a party or of which property owned or leased by Little Squaw or any of its subsidiaries is or may be the subject, or related to environmental, title, discrimination or other matters, which actions, suits, proceedings or investigations, individually or in the aggregate, could have a material adverse effect on Little Squaw;  

j.

there are no judgments against Little Squaw or any of its subsidiaries, if any, which are unsatisfied, nor is Little Squaw or any of its subsidiaries, if any, subject to any injunction, 

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judgment, decree or order of any court, regulatory body, administrative agency or other governmental body;

k.

this Agreement has been or will be by the Closing Date, duly authorized by all necessary corporate action on the part of Little Squaw, and Little Squaw has full corporate power and authority to undertake this offering;

l.

this Agreement has been duly authorized, executed and delivered by the Corporation and constitutes a valid and legally binding obligation of the Company enforceable against it in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium and other laws relating to or affecting the rights of creditors generally and except as limited by the application of equitable principles when equitable remedies are sought, and by the fact that rights to indemnity, contribution and waiver, and the ability to sever unenforceable terms, may be limited by applicable law;

m.

neither Little Squaw nor any of its subsidiaries is in violation of its organizational or incorporating documents nor in violation of, or in default under, any lien, mortgage, lease, agreement or instrument, except for such defaults which would not, individually or in the aggregate, have a material adverse effect on the financial condition, properties or business of Little Squaw or it subsidiaries;

n.

subject to the accuracy of the representations and warranties of the Subscriber contained in this Agreement, the offer, sale and issuance of the Securities as contemplated by this Agreement are exempt from the registration requirements of the U.S. Securities Act, from the registration or qualifications requirements of the state securities or “blue sky” laws and regulations of any applicable state or other applicable jurisdiction;

o.

Little Squaw’s shares of common stock are quoted for trading on the National Association of Securities Dealers over-the-counter electronic bulletin board (the “OTCBB”), 

p.

no order ceasing, halting or suspending trading in securities of Little Squaw nor prohibiting the sale of such securities has been issued to and is outstanding against Little Squaw or its directors, officers or promoters, and, to the best of Little Squaw’s knowledge, no investigations or proceedings for such purposes are pending or threatened;

q.

neither Little Squaw nor any subsidiary thereof will have taken any action which would be reasonably expected to result in the delisting or suspension of quotation of Little Squaw’s shares of common stock on or from the OTCBB and Little Squaw will have complied, in all material respects, with the rules and regulations of eligibility on the OTCBB;

r.

except for (i) a cash commission in the amount of 10% payable to Strata Partners and certain selling agents and (ii) agent’s warrants, equal to 10% of the number to the number of Units subscribed for hereby, to be issued to Strata Partners and certain selling agents, no person, firm or corporation acting or purporting to act at the request of Little Squaw is entitled to any brokerage, agency or finder’s fee in connection with the purchase and sale of the Securities described herein;

s.

Little Squaw is a "reporting issuer" under section 12 of the Securities Exchange Act of 1934, as amended (the “1934 Act”) and is not in default of any of the requirements of the 1934 Act;

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t.

as of their respective filing dates, each report, schedule, registration statement and proxy filed by Little Squaw with the United States Securities and Exchange Commission (“SEC”)(each, an “SEC Report” and collectively, the “SEC Reports”) (and if any SEC Report filed prior to the date of this Agreement was amended or superseded by a filing prior to the date of this Agreement, then also on the date of filing of such amendment or superseding filing), (i) where required, were prepared in all material respects in accordance with the requirements of the U.S. Securities Act, or the 1934 Act, as the case may be, and the rules and regulations promulgated under such Acts applicable to such SEC Reports, (ii) did not contain any untrue statements of a material fact and did not omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading and (iii) are all the forms, reports and documents required to be filed by Little Squaw with the SEC since that time.  Little Squaw’s subsidiaries are not required to file any reports or other documents with the SEC.   Each set of audited consolidated financial statements and unaudited interim financial statements of Little Squaw (including any notes thereto) included in the SEC Reports (i) complies as to form in all material respects with the published rules and regulations of the SEC with respect thereto, and (ii) have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis (except as may be indicated therein or in the notes thereto) and fairly present, in all material respects, the financial position of Little Squaw as of the dates thereof and the results of its operations and cash flows for the periods then ended subject, in the case of the unaudited interim financial statements, to normal year-end adjustments which were not or are not expected to be material in amount.  To Little Squaw’s knowledge, no events or other factual matters exist which would require Little Squaw to file any amendments or modifications to any SEC Reports which have not yet been filed with the SEC but which are required to be filed with the SEC pursuant to the U.S. Securities Act or the 1934 Act;

u.

Each SEC Report containing financial statements that has been filed with or submitted to the SEC since July 31, 2002, was accompanied by the certifications required to be filed or submitted by Little Squaw’s chief executive officer and chief financial officer pursuant to the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”); at the time of filing or submission of each such certification, such certification was true and accurate and complied with the Sarbanes-Oxley Act and the rules and regulations promulgated thereunder; such certifications contain no qualifications or exceptions to the matters certified therein and have not been modified or withdrawn; and neither Little Squaw nor any of its officers has received notice from any governmental entity questioning or challenging the accuracy, completeness, form or manner of filing or submission of such certification;

v.

there is no fact known to Little Squaw which Little Squaw has not publicly disclosed which materially adversely affects, or so far as Little Squaw can reasonably foresee, will materially adversely affect, the assets, liabilities (contingent or otherwise), capital, affairs, business, prospects, operations or condition (financial or otherwise) of Little Squaw or the ability of Little Squaw to perform its obligations under this Agreement;

w.

Except as disclosed in the SEC Reports, Little Squaw and its subsidiaries, if any, have filed all federal, state, local and foreign tax returns which are required to be filed, or have requested extensions thereof, and have paid all taxes required to be paid by them and any other assessment, fine or penalty levied against them, to the extent that any of the foregoing is due and payable, except for such assessments, fines and penalties which are currently being contested in good faith;

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x.

Little Squaw has established on its books and records reserves which are adequate for the payment of all taxes not yet due and payable and there are no liens for taxes on the assets of Little Squaw or its subsidiaries, if any, except for taxes not yet due, and there are no audits of any of the tax returns of Little Squaw which are known by Little Squaw’s management to be pending, and there are no claims which have been or may be asserted relating to any such tax returns which, if determined adversely, would result in the assertion by any governmental agency of any deficiency which would have a material adverse effect on the properties, business or assets of Little Squaw;

y.

Little Squaw is not an "investment company" within the meaning of the Investment Company Act of 1940;

z.

neither Little Squaw nor any of its affiliates, nor any person acting on its or their behalf (i) has made or will make any “directed selling efforts” (as such term is defined in Regulation S of the U.S. Securities Act) in the United States, or (ii) has engaged in or will engage in any form of “general solicitation” or “general advertising” (as such terms are defined in Rule 502 (c) under Regulation D of the U.S. Securities Act) in the United States with respect to offers or sales of the Securities;

aa.

Little Squaw  has not, for a period of six months prior to the date hereof, sold, offered for sale or solicited, and will not for a period of six months after the Closing Date, offer, sell or solicit, any offer to buy any of its securities in a manner that would be integrated with the offer and sale of the Securities and would cause the exemption from registration set forth in Rule 506 of Regulation D or Rule 903 of Regulation S of the U.S. Securities Act to become unavailable with respect to the offer and sale of the Securities;

bb.

the warranties and representations in this section are true and correct and will remain so as of the Closing Date;  and

cc.

Little Squaw shall indemnify, defend and hold the Subscriber (which term shall, for the purposes of this Section, include the Subscriber or its shareholders, managers, partners, directors, officers, members, employees, direct or indirect investors, agents and affiliates and assignees and the stockholders, partners, directors, members, managers, officers, employees direct or indirect investors and agents of such affiliates and assignees) harmless against any and all liabilities, loss, cost or damage, together with all reasonable costs and expenses related thereto (including reasonable legal and accounting fees and expenses), arising from, relating to, or connected with an untrue, inaccurate or breached statement, representation, warranty or covenant of Little Squaw contained herein.  Little Squaw undertakes to notify the Subscriber immediately of any change in any representation, warranty or other material information relating to Little Squaw set forth in this Agreement which takes place prior to the Closing Date.

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4.

Registration Rights

a.

Little Squaw shall (i) prepare and file with the SEC within sixty (60) calendar days after the Closing Date a registration statement (on Form S-3, SB-1, SB-2, S-1, or other appropriate registration statement form reasonably acceptable to the Subscriber) under the U.S. Securities Act (the “Registration Statement”), at the sole expense of Little Squaw (except as specifically provided in Section c hereof), in respect of the Subscriber, so as to permit a public offering and resale of the Common Shares and Warrant Shares (collectively, the “Registrable Securities”) in the United States under the U.S. Securities Act by the Subscriber as selling stockholder and not as underwriter; and (ii) use commercially reasonable efforts to cause a Registration Statement to be declared effective by the SEC as soon as possible, but in any event not later than the earlier of (a) one hundred twenty (120) days following the Closing Date (or one hundred fifty (150) days in the event of an SEC review of the Registration Statement), and (b) the fifth trading day following the date on which Little Squaw is notified by the SEC that the Registration Statement will not be reviewed or is no longer subject to further review and comments.  Little Squaw will notify the Subscriber of the effectiveness of the Registration Statement (the “Effective Date”) within three (3) Trading Days (days in which the OTCBB is open for quotation) (each, a “Trading Day”).

b.

Little Squaw will maintain the Registration Statement or post-effective amendment filed under this Section 4 effective under the U.S. Securities Act until the earlier of the date (i) all of the Registrable Securities have been sold pursuant to such Registration Statement, (ii) the Subscriber  receives an opinion of counsel to Little Squaw, which opinion and counsel shall be reasonably acceptable to the Subscriber, that the Registrable Securities may be sold under the provisions of Rule 144 without limitation as to volume, (iii) all Registrable Securities, (or all Common Stock and Warrants, in the case of Warrants not then exercised) have been otherwise transferred to persons who may trade the Registrable Securities without restriction under the U.S. Securities Act, and Little Squaw has delivered a new certificate or other evidence of ownership for such Registrable Securities not bearing a restrictive legend, (iv) all Registrable Securities may be sold without any time, volume or manner limitations pursuant to Rule 144(k) or any similar provision then in effect under the U.S. Securities Act in the opinion of counsel to Little Squaw, which counsel shall be reasonably acceptable to the Subscriber, (v) Little Squaw obtains the written consent of the Subscriber, or (vi) three (3) years from the Effective Date (the “Effectiveness Period”).

c.

All fees, disbursements and out-of-pocket expenses and costs incurred by Little Squaw in connection with the preparation and filing of the Registration Statement and in complying with applicable securities and “blue sky” laws (including, without limitation, all attorneys' fees of Little Squaw, registration, qualification, notification and filing fees, printing expenses, escrow fees, blue sky fees and expenses and the expense of any special audits incident to or required by any such registration) shall be borne by Little Squaw.  The Subscriber shall bear the cost of underwriting and/or brokerage discounts, fees and commissions, if any, applicable to the Registrable Securities being registered and the fees and expenses of its counsel.   The Subscriber and its counsel shall have a reasonable period, not to exceed five (5) Trading Days, to review the proposed Registration Statement or any amendment thereto, prior to filing with the SEC.   Little Squaw shall qualify any of the Registrable Securities for sale in such states as the Subscriber reasonably designates.  However, Little Squaw shall not be required to qualify in any state which will require an escrow or other restriction relating to Little Squaw and/or the sellers, or which will require 

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Little Squaw to qualify to do business in such state or require Little Squaw to file therein any general consent to service of process.  Little Squaw at its expense will supply the Subscriber with copies of the applicable Registration Statement and the prospectus included therein and other related documents in such quantities as may be reasonably requested by the Subscriber.

d.

Prior to the effectiveness of the Registration Statement filed pursuant to Section 4(a), the rights to cause Little Squaw to register Registrable Securities granted to the Subscriber by Little Squaw under this Section 4 may be assigned in full by a Subscriber in connection with a transfer by such Subscriber of not less than 1,000,000 Common Shares or not less than 500,000 Warrants, in either case in a single transaction to a single transferee purchasing as principal, provided, however, that (i) such transfer is otherwise effected in accordance with applicable securities laws; (ii) such Subscriber gives prior written notice to Little Squaw; and (iii) such transferee agrees to comply with the terms and provisions of this Agreement, and such transfer is otherwise in compliance with this Agreement. 

e.

If at any time or from time to time after the Effective Date, Little Squaw notifies the Subscriber in writing of the existence of a Potential Material Event (as defined in Section (f) below), the Subscriber shall not offer or sell any Registrable Securities or engage in any other transaction involving or relating to Registrable Securities, from the time of the giving of notice with respect to a Potential Material Event until the Subscriber receives written notice from Little Squaw that such Potential Material Event either has been disclosed to the public or no longer constitutes a Potential Material Event.  If a Potential Material Event shall occur prior to the date a Registration Statement is required to be filed, then Little Squaw’s obligation to file such Registration Statement shall be delayed without penalty for not more than thirty (30) calendar days.  Little Squaw must, if lawful, give the Subscriber notice in writing at least two (2) Trading Days prior to the first day of the blackout period.

f.

“Potential Material Event” means any of the following: (i) the possession by Little Squaw of material information not ripe for disclosure in a registration statement, as determined in good faith by the Chief Executive Officer, President or the Board of Directors of Little Squaw that disclosure of such information in a Registration Statement would be detrimental to the business and affairs of Little Squaw; or (ii) any material engagement or activity by Little Squaw which would, in the good faith determination of the Chief Executive Officer, President or the Board of Directors of Little Squaw, be adversely affected by disclosure in a registration statement at such time, which determination shall be accompanied by a good faith determination by the Chief Executive Officer, President or the Board of Directors of Little Squaw that the applicable Registration Statement would be materially misleading absent the inclusion of such information; provided  that, (i) Little Squaw shall not use such right with respect to the Registration Statement for more than an aggregate of 90 days in any 12-month period; and (ii) the number of days Little Squaw is required to keep the Registration Statement effective shall be extended by the number of days for which the Company shall have used such right.

g.

The Subscriber will cooperate with Little Squaw in all respects in connection with this Agreement, including timely supplying all information reasonably requested by Little Squaw (which shall include all information regarding the Subscriber and proposed manner of sale of the Registrable Securities required to be disclosed in any Registration Statement) and executing and returning all documents reasonably requested in connection with the registration and sale of the Registrable Securities and entering into and performing its obligations under any underwriting 

Subscription Agreement - 14 of 27

agreement, if the offering is an underwritten offering, in usual and customary form, with the managing underwriter or underwriters of such underwritten offering.  Any delay or delays caused by the Subscriber, or by any other purchaser of securities of Little Squaw having registration rights similar to those contained herein, by failure to cooperate as required hereunder shall not constitute a breach or default of Little Squaw under this Agreement. 

h.

Whenever Little Squaw is required by any of the provisions of this Agreement to effect the registration of any of the Registrable Securities under the U.S. Securities Act, Little Squaw shall (except as otherwise provided in this Agreement), as expeditiously as possible, subject to the  assistance and cooperation as reasonably required of the Subscriber with respect to each Registration Statement:

(i)

(A)  prior to the filing with the SEC of any Registration Statement (including any amendments thereto) and the distribution or delivery of any prospectus (including any supplements thereto), provide draft copies thereof to the Subscriber and reflect in such documents all such comments as the Subscriber (and its counsel),  reasonably may propose respecting the Selling Shareholders and Plan of Distribution sections (or equivalents) and (B) furnish to the Subscriber such numbers of copies of a prospectus including a preliminary prospectus or any amendment or supplement to any prospectus, as applicable, in conformity with the requirements of the U.S. Securities Act, and such other documents as the Subscriber may reasonably request in order to facilitate the public sale or other disposition of the Registrable Securities owned by the Subscriber;

(ii)

register and qualify the Registrable Securities covered by the Registration Statement under such other securities or blue sky laws of such jurisdictions as the Subscriber shall reasonably request (subject to the limitations set forth in Section (b) above), and do any and all other acts and things which may be necessary or advisable to enable the Subscriber to consummate the public sale or other disposition in such jurisdiction of the securities owned by the Subscriber;

(iii)

cause the Registrable Securities to be quoted or listed on each service on which the Common Stock of Little Squaw is then quoted or listed; 

(iv)

notify the Subscriber, at any time when a prospectus relating thereto covered by the Registration Statement is required to be delivered under the U.S. Securities Act, of the happening of any event of which it has knowledge as a result of which the prospectus included in the Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of  the circumstances then existing, and Little Squaw shall prepare and file a curative amendment as promptly as commercially reasonable; 

(v)

as promptly as practicable after becoming aware of such event, notify the Subscriber, (or, in the event of an underwritten offering, the managing underwriters) of the issuance by the SEC of any stop order or other suspension of the effectiveness of the Registration Statement at the earliest possible time and take all lawful action to effect the withdrawal, rescission  or removal of such stop order or other suspension; and

Subscription Agreement - 15 of 27

(vi)

provide a transfer agent and registrar for all securities registered pursuant to the Registration Statement and a CUSIP number for all such securities.

i.

With respect to any sale of Registrable Securities pursuant to a Registration Statement filed pursuant to this Section 4, the Subscriber hereby covenants with Little Squaw (i) not to make any sale of the Registrable Securities without effectively causing the prospectus delivery requirements under the Securities Act to be satisfied and (ii) to notify Little Squaw promptly upon disposition of all of the Registrable Securities. 

j.

In addition to the registration rights set forth in Section 4(a), if the Registration Statement filed pursuant to Section 4(a) is not filed within 120 calendar days from the Closing Date, or otherwise declared effective by the SEC, then the Subscriber shall also have certain “piggy-back” registration rights as follows:

(i)

If at any time after the issuance of the Registrable Securities, Little Squaw shall file with the SEC a registration statement under the U.S. Securities Act registering any shares of equity securities, Little Squaw shall give written notice to the Subscriber prior to such filing.

(ii)

Within twenty (20) calendar days after such notice from Little Squaw, the Subscriber shall give written notice to Little Squaw whether or not such Subscriber desires to have all of such Subscriber’s Registrable Securities included in the registration statement.  If any Subscriber fails to give such notice within such period, such Subscriber shall not have the right to have Subscriber’s Registrable Securities registered pursuant to such registration statement.  If the Subscriber gives such notice, then Little Squaw shall include such Subscriber’s Registrable Securities in the registration statement, at Company’s sole cost and expense, subject to the remaining terms of this Section 4(j).

(iii)

If the registration statement relates to an underwritten offering, and the underwriter shall determine in writing that the total number of shares of equity securities to be included in the offering, including the Registrable Securities, shall exceed the amount which the underwriter deems to be appropriate for the offering, the number of shares of the Registrable Securities shall be reduced in the same proportion as the remainder of the shares in the offering and such participating Subscriber’s Registrable Securities included in such registration statement will be reduced proportionately.  For this purpose, if other securities in the registration statement are derivative securities, their underlying shares shall be included in the computation.  Each participating Subscriber shall enter into such agreements as may be reasonably required by the underwriters and each Subscriber shall pay the underwriters commissions relating to the sale of their respective Registrable Securities.

(iv)

The Subscriber shall have an unlimited number of opportunities to have the Registrable Securities registered under this Section 4(j) provided that Little Squaw shall not be required to register any Registrable Security or keep any Registration Statement effective beyond such period required under Section 4(b) of this Agreement. 

(v)

The Subscriber shall furnish in writing to Little Squaw such information as Little Squaw shall reasonably require in connection with a registration statement.

Subscription Agreement - 16 of 27

5.

Indemnity and Contribution

a.

Little Squaw agrees to indemnify and hold harmless each Subscriber, their respective officers, directors, employees, partners, legal counsel and accountants, and each person controlling such Subscriber within the meaning of Section 15 of the U.S. Securities Act, and each person who controls any underwriter within the meaning of Section 15 of the U.S. Securities Act, from and against any losses, claims, damages, expenses or liabilities (or actions or proceedings in respect thereof) to which such Subscriber or such other indemnified person may become subject  (including in settlement of litigation, whether commenced or threatened) insofar as such losses, claims, damages, expenses or liabilities (or actions or proceedings in respect thereof) arise out of, or are based upon, any untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a material fact in the Registration Statement, including all documents filed as a part thereof and information deemed to be a part thereof, on the effective date thereof, or any amendment or supplements thereto, or arise out of any failure by Little Squaw to fulfill any undertaking or covenant included in the Registration Statement or to perform its obligations hereunder or under applicable law and Little Squaw will, as incurred, reimburse such Subscriber, each of its respective officers, directors, employees, partners, legal counsel and accountants, and each person controlling such Subscriber, and each person who controls any such underwriter, for any legal or other expenses reasonably incurred in investigating, defending or preparing to defend, settling, compromising or paying such action, proceeding or claim; provided, however, that Little Squaw shall not be liable in any such case to the extent that such loss, claim, damage, expense or liability (or action or proceeding in respect thereof) arises out of, or is based upon, (i) the failure of any Subscriber, or any of their agents, affiliates or persons acting on their behalf, to comply with the covenants and agreements contained in this Agreement with respect to the sale of Registrable Securities, (ii) an untrue statement or omission in such Registration Statement in reliance upon and in conformity with written information furnished to Little Squaw by an instrument duly executed by or on behalf of the Subscriber, or any of its agents, affiliates or persons acting on its behalf, and stated to be specifically for use in preparation of the Registration Statement and not corrected in a timely manner by the Subscriber in writing or (iii) an untrue statement or omission in any prospectus that is corrected in any subsequent prospectus, or supplement or amendment thereto, that was delivered to the Subscriber prior to the pertinent sale or sales by such Subscriber and not delivered by the Subscriber to the individual or entity to which it made such sale(s) prior to such sale(s).

b.

The Subscriber agrees to indemnify and hold harmless Little Squaw from and against any losses, claims, damages, expenses or liabilities (or actions or proceedings in respect thereof) to which Little Squaw may become subject (under the U.S. Securities Act or otherwise) insofar as such losses, claims, damages, expenses or liabilities (or actions or proceedings in respect thereof) arise out of, or are based upon (i) the failure of the Subscriber or any of its agents, affiliates or persons acting on its behalf, to comply with the covenants and agreements contained in this Agreement with respect to the sale of Registrable Securities; or (ii) an untrue statement or alleged untrue statement of a material fact or omission to state a material fact in the Registration Statement in reliance upon and in conformity with written information furnished to Little Squaw by an instrument duly executed by or on behalf of such Subscriber and stated to be specifically for use in preparation of the Registration Statement;  provided, however, that the Subscriber shall not be 

Subscription Agreement - 17 of 27

liable in any such case for (i) any untrue statement or alleged untrue statement or omission in any prospectus or Registration Statement which statement has been corrected, in writing, by such Subscriber and delivered to Little Squaw before the sale from which such loss occurred; or (ii) an untrue statement or omission in any prospectus that is corrected in any subsequent prospectus, or supplement or amendment thereto, that was delivered to the Subscriber prior to the pertinent sale or sales by the Subscriber and delivered by the Subscriber to the individual or entity to which it made such sale(s) prior to such sale(s), and the Subscriber, severally and not jointly, will, as incurred, reimburse Little Squaw for any legal or other expenses reasonably incurred in investigating, defending or preparing to defend any such action, proceeding or claim.  Notwithstanding the foregoing, the Subscriber shall not be liable or required to indemnify Little Squaw in the aggregate for any amount in excess of the net amount received by the Subscriber from the sale of the Registrable Securities, to which such loss, claim, damage, expense or liability (or action proceeding in respect thereof) relates.

c.

Promptly after receipt by any indemnified person of a notice of a claim or the beginning of any action in respect of which indemnity is to be sought against an indemnifying person pursuant to this Section 5, such indemnified person shall notify the indemnifying person in writing of such claim or of the commencement of such action and, subject to the provisions hereinafter stated, in case any such action shall be brought against an indemnified person, the indemnifying person shall be entitled to participate therein, and, to the extent that it shall wish, to assume the defense thereof.  After notice from the indemnifying person to such indemnified person of the indemnifying person’s election to assume the defense thereof, the indemnifying person shall not be liable to such indemnified person for any legal expenses subsequently incurred by such indemnified person in connection with the defense thereof; provided, however, that if there exists or shall exist a conflict of interest that would, in the opinion of counsel to the indemnified party, make it inappropriate under applicable laws or codes of professional responsibility for the same counsel to represent both the indemnified person and such indemnifying person or any affiliate or associate thereof, the indemnified person shall be entitled to retain its own counsel at the expense of such indemnifying person; provided, further, that the indemnifying person shall not be obligated to assume the expenses of more than one counsel to represent all indemnified persons.  In the event of such separate counsel, such counsel shall agree to reasonably cooperate.

d.

If the indemnification provided for in this Section 5 is unavailable or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages, expenses or liabilities (or actions or proceedings in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, expenses or liabilities (or actions or proceedings in respect thereof) in such proportion as is appropriate to reflect the relative fault of Little Squaw on the one hand and the Subscriber, or its agents, affiliates or persons acting on its behalf, on the other in connection with the statements or omissions which resulted in such losses, claims, damages, expenses or liabilities (or actions or proceedings in respect thereof), as well as any other relevant equitable considerations.  The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by Little Squaw on the one hand or the Subscriber, or its agents, affiliates or persons acting on its behalf, on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.  Little Squaw and the Subscriber agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined by any other 

Subscription Agreement - 18 of 27

method of allocation which does not take into account the equitable considerations referred to above in this subsection (d).  The amount paid or payable by an indemnified party as a result of the losses, claims, damages, expenses or liabilities (or actions or proceedings in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim.  No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the U.S. Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.  In any event, the Subscriber shall not  be liable or required to contribute to Little Squaw in the aggregate for any amount in excess of the net amount received by the Subscriber from the sale of its Registrable Securities.

6.

Governing Law:  This Subscription Agreement shall be binding upon the parties hereto, their heirs, executors, successors, and legal representatives.  The laws of the State of Washington shall govern the rights of the parties as to this Agreement.

7.

Indemnification: Subscriber acknowledges that it understands the meaning and legal consequences of the representations and warranties contained herein, and it hereby agrees to indemnify and hold harmless Little Squaw and any other person or entity relying upon such information thereof from and against any and all loss, damage or liability due to or arising out of a breach of any representation, warranty, or acknowledgement of Subscriber contained in this Agreement.

8.

Nonassignability:   Except as otherwise expressly provided herein, this Agreement  may not be assigned by Subscriber.

9.

Entire Agreement:  This instrument contains the entire agreement among the parties with respect to the acquisition of the shares and the other transactions contemplated hereby, and there are no representations, covenants or other agreements except as stated or referred to herein.

10.

Amendment: This Agreement may be amended or modified only by a writing signed by the party or parties to be charged with such amendment or modification.

11.

Binding On Successors: All of the terms, provisions and conditions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, successors, and legal representatives.

12.

Titles: The titles of the sections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.

13.

Counterparts: This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall be deemed an original and all of which taken together shall constitute one and the same document, notwithstanding that all parties are not signatories to the same counterpart.

14.

Severability:  The unenforceability or invalidity of any provision of this Agreement shall not affect the enforceability or validity of the balance of this Agreement.

15.

Disclosure Required Under State Law: The offering and sale of the Securities is intended to be exempt from registration under the securities laws of certain states. Subscribers who reside or purchase the Securities may be required to make additional disclosures by the securities laws of various states and agrees to provide such additional disclosures as requested by Little Squaw upon written request.

Subscription Agreement - 19 of 27

16.

Notices: All notes or other communications hereunder (except payment) shall be in writing and shall be deemed to have been duly given if delivered personally or sent by registered or certified mail postage prepaid, or by Express Mail Service or similar courier, addressed as follows:

If to Subscriber:

At the address designated on the signature page of this Agreement.

If to the Company:   

Little Squaw Gold Mining Company

3412 S. Lincoln Dr.

Spokane, WA 99203-1650

Fax:  509-624-2878

With Copy to:

Dorsey & Whitney LLP

Republic Plaza Building

Suite 4700, 370 Seventeenth Street

Denver, CO  80202-5647

Attention:  Kenneth Sam

17.

Time of the Essence:   Time shall be of the essence of this Agreement in all respects.

18.  

Facsimile and Counterpart Subscriptions:  Little Squaw shall be entitled to rely on delivery of a facsimile copy of this Agreement executed by the subscriber, and acceptance by Little Squaw of such executed Agreement shall be legally effective to create a valid and binding agreement between the Subscriber and Little Squaw in accordance with the terms hereof. In addition, this Agreement may be executed in counterparts, each of which shall be deemed an original and all of which shall constitute one and the same document.

19.

Future Assurances:  Each of the parties hereto will from time to time execute and deliver all such further documents and instruments and do all acts and things as the other party may, either before or after the Closing, reasonably require to effectively carry out or better evidence or perfect the full intent and meaning of this Agreement.

Subscription Agreement - 20 of 27

SUBSCRIBER HEREBY DECLARES AND AFFIRMS THAT IT HAS READ THE WITHIN AND FOREGOING SUBSCRIPTION AGREEMENT, IS FAMILIAR WITH THE CONTENTS THEREOF AND AGREES TO ABIDE BY THE TERMS AND CONDITIONS THEREIN SET FORTH, AND KNOWS THE STATEMENTS THEREIN TO BE TRUE AND CORRECT.

******

IN WITNESS WHEREOF, Subscriber executed this Agreement this 

         day of January, 2006.

SUBSCRIBER:

By:*

Title:

Registration and Delivery Instructions:

(Address)

*

By the foregoing signature, I hereby certify to Little Squaw Gold Mining Company that I am duly empowered and authorized to provide the foregoing information.

This Subscription Agreement is hereby accepted by the Company this          day of 

      

 , 2006.

Little Squaw Gold Mining Company

By:

  

Title:

Subscription Agreement - 21 of 27

Exhibit A

U.S. ACCREDITED INVESTOR CERTIFICATE

TO:

LITTLE SQUAW GOLD MINING COMPANY

The Subscriber understands and agrees that the Securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or applicable state securities laws, and the Securities are being offered and sold to the Subscriber in reliance upon Rule 506 of Regulation D under the U.S. Securities Act.

Capitalized terms used in this Exhibit A and defined in the Agreement to which the Exhibit A is attached have the meaning defined in the Agreement unless otherwise defined herein.

The undersigned (the “Subscriber”) represents, warrants and covenants (which representations, warranties and covenants shall survive the Closing) to Little Squaw (and acknowledges that Little Squaw is relying thereon) that:

(a)

it is purchasing the Securities for its own account or for the account of one or more persons for whom it is exercising sole investment discretion, (a “Beneficial Purchaser”), for investment purposes only and not with a view to resale or distribution and, in particular, neither it nor any Beneficial Purchaser for whose account it is purchasing the Securities has any intention to distribute either directly or indirectly any of the Securities in the United States or to U.S. Persons; provided, however, that this paragraph shall not restrict the Subscriber from selling  or otherwise disposing of any of the Securities pursuant to registration thereof pursuant to the U.S. Securities Act and any applicable state securities laws or under an exemption from such registration requirements;

(b)

it, and if applicable, each Beneficial Purchaser for whose account it is purchasing the Securities is a U.S. Accredited Investor that satisfies one or more of the categories of U.S. Accredited Investor indicated below (the Subscriber must initial “SUB” for the Subscriber, and “BP” for each Beneficial Purchaser, if any, on the appropriate line(s)):

  Category 1.

A bank, as defined in Section 3(a)(2) of the U.S. Securities Act, whether acting in its individual or fiduciary capacity; or

  Category 2.

A savings and loan association or other institution as defined in Section 3(a)(5)(A) of the U.S. Securities Act, whether acting in its individual or fiduciary capacity; or

  Category 3.

A broker or dealer registered pursuant to Section 15 of the United States Securities Exchange Act of 1934, as amended; or

  Category 4.

An insurance company as defined in Section 2(13) of the U.S. Securities Act; or

  Category 5.

An investment company registered under the United States Investment Company Act of 1940; or

Subscription Agreement - 22 of 27

  Category 6.

A business development company as defined in Section 2(a)(48) of the United States Investment Company Act of 1940; or

  Category 7.

A small business investment company licensed by the U.S. Small Business Administration under Section 301 (c) or (d) of the United States Small Business Investment Act of 1958; or

 Category 8.

A plan established and maintained by a state, its political subdivisions or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, with total assets in excess of U.S. $5,000,000; or

  Category 9.

An employee benefit plan within the meaning of the United States Employee Retirement Income Security Act of 1974 in which the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such Act, which is either a bank, savings and loan association, insurance company or registered investment adviser, or an employee benefit plan with total assets in excess of U.S. $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons who are accredited investors; or

  Category 10.

A private business development company as defined in Section 202(a)(22) of the United States Investment Advisers Act of 1940; or

  Category 11.

An organization described in Section 501(c)(3) of the United States Internal Revenue Code, a corporation, a Massachusetts or similar business trust, or a partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of U.S. $5,000,000; or

  Category 12.

Any director or executive officer of the Issuer; or

  Category 13.

A natural person whose individual net worth, or joint net worth with that person’s spouse, at the date hereof exceeds U.S. $1,000,000; or

  Category 14.

A natural person who had an individual income in excess of U.S. $200,000 in each of the two most recent years or joint income with that person’s spouse in excess of U.S. $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year; or

  Category 15.

A trust, with total assets in excess of U.S. $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii) under the U.S. Securities Act; or

  Category 16.

Any entity in which all of the equity owners meet the requirements of at least one of the above categories;

(c)

it understands that upon the issuance thereof, and until such time as the same is no longer required under the applicable requirements of the U.S. Securities Act or applicable U.S. state laws and regulations, the certificates representing the Securities, and all securities issued in exchange therefor or in substitution thereof, will bear a legend in substantially the following form:

Subscription Agreement - 23 of 27

“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”) AND SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY; (B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT; (C) IN ACCORDANCE WITH THE EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS; OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS, AND, IN THE CASE OF PARAGRAPH (C) OR (D), THE SELLER FURNISHES TO THE COMPANY AN OPINION OF COUNSEL OF RECOGNIZED STANDING IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY TO SUCH EFFECT.  

provided that if any of the Securities are being sold pursuant to Rule 144 of the U.S. Securities Act and in compliance with any applicable state securities laws, the legend may be removed by delivery to Little Squaw’s transfer agent of an opinion satisfactory to Little Squaw and its transfer agent to the effect that the legend is no longer required under applicable requirements of the U.S. Securities Act or state securities laws;

(d)

Certificates representing Warrants, and all certificates issued in exchange therefore or in substitution thereof, shall bear the following legend in substantially the following form:

“THIS WARRANT AND THE SECURITIES DELIVERABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.  THIS WARRANT MAY NOT BE EXERCISED BY OR ON BEHALF OF A “U.S. PERSON” OR A PERSON IN THE UNITED STATES UNLESS THE WARRANT AND THE UNDERLYING SECURITIES HAVE BEEN REGISTERED UNDER THE U.S. SECURITIES ACT AND THE APPLICABLE SECURITIES LEGISLATION OF ANY SUCH STATE OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS IS AVAILABLE.  “UNITED STATES” AND “U.S. PERSON” ARE AS DEFINED BY REGULATION S UNDER THE U.S. SECURITIES ACT.”

The Subscriber acknowledges that the representations, warranties and covenants contained in this Certificate  are made by it with the intent that they may be relied upon by the Issuer in determining its eligibility or the eligibility of others on whose behalf it is contracting thereunder to purchase Securities.  It agrees that by accepting Securities it shall be representing and warranting that the representations and warranties above are true as at the Closing with the same force and effect as if they had been made by it at the Closing and that they shall survive the purchase by it of Securities and shall continue in full force and effect notwithstanding any subsequent disposition by it of such securities.

Subscription Agreement - 24 of 27

The Subscriber undertakes to notify the Issuer immediately of any change in any representation, warranty or other information relating to the Subscriber or any Beneficial Purchaser set forth herein which takes place prior to the Closing.

Dated this 

 day of 

, 2006.

			
	If a Corporation, Partnership or Other Entity:

Name of Entity

Type of Entity

Signature of Person Signing

Print or Type Name and Title of Person Signing

	 	If an Individual:

Signature

Print or Type Name

Subscription Agreement - 25 of 27

Exhibit B

Form of Warrant Certificate

Subscription Agreement - 26 of 27

Schedule “I”

Wire Instructions 

To:

U.S. Bank National Association

800 Nicollet Mall

Minneapolis, MN  55402

(omitted)

Account Number:

(omitted)

Account Name:

Dorsey & Whitney LLP Trust Account

Message:

Little Squaw Gold Mining – Financing Trust – Attn:  Kenneth Sam

Subscription Agreement - 27 of 27

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