Document:

EX-10.1

Exhibit 10.1

FINANCING AGREEMENT

Financing Agreement, dated as of July 3, 2007, by and among METALICO, INC., a Delaware
corporation (the “Borrower”), each subsidiary of the Borrower listed as a “Guarantor” on
the signature pages hereto (each a “Guarantor” and collectively, jointly and severally, the
“Guarantors”), the lenders from time to time party hereto (each a “Lender” and
collectively, the “Lenders”), ABLECO FINANCE LLC, a Delaware limited liability company
(“Ableco”), as collateral agent for the Lenders (in such capacity, together with any
successor collateral agent, the “Collateral Agent”), and Ableco, as administrative agent
for the Lenders (in such capacity, together with any successor administrative agent,
the “Administrative Agent” and together with the Collateral Agent, each an “Agent”
and collectively, the “Agents”).

RECITALS

The Borrower has asked the Lenders to extend a credit facility of $50,000,000 (the
“Maximum Credit Facility Amount”) to the Borrower consisting of (a) a term loan in the
aggregate principal amount of $32,000,000, and (b) a term loan in an aggregate principal amount of
$18,000,000. The proceeds of the term loans shall be used to pay a portion of the cash Purchase
Price for the Acquisitions (as defined below) by the Borrower and its Subsidiaries, for general
working capital purposes of the Borrower and its Subsidiaries, and to pay fees and expenses related
to this Agreement. The Lenders are severally, and not jointly, willing to extend such credit to
the Borrower subject to the terms and conditions hereinafter set forth.

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

ARTICLE I

DEFINITIONS; CERTAIN TERMS

Section 1.01 Definitions. As used in this Agreement, the following terms
shall have the respective meanings indicated below, such meanings to be applicable equally to both
the singular and plural forms of such terms:

“Ableco” has the meaning specified therefor in the preamble hereto.

“Account Debtor” means any Person who is or who may become obligated under, with
respect to, or on account of, an Account Receivable, chattel paper, or a general intangible.

“Account Receivable” means, with respect to any Person, all of such Person’s now owned
or hereafter acquired right, title, and interest with respect to “accounts” (as that term is
defined in Article 9 of the Code), and any and all “supporting obligations” (as that term is
defined in the Code) in respect thereof.

“Acquisitions” means, collectively, the Annaco Acquisition and the Totalcat
Acquistion.

“Action” has the meaning specified therefor in Section 12.12.

“additional amount” has the meaning specified therefor in Section 2.08(a)

“Administrative Agent” has the meaning specified therefor in the preamble hereto.

“Administrative Agent’s Account” means an account at a bank designated by the
Administrative Agent from time to time as the account into which the Borrower shall make all
payments to the Administrative Agent for the benefit of the Agents and the Lenders under this
Agreement and the other Loan Documents.

“Affiliate” means, with respect to any Person, any other Person that directly, or
indirectly through one or more intermediaries, controls, is controlled by, or is under common
control with, such Person. For purposes of this definition, “control” of a Person means the power,
directly or indirectly, either to (i) vote 10% or more of the Capital Stock having ordinary voting
power for the election of directors of such Person or (ii) direct or cause the direction of the
management and policies of such Person whether by contract or otherwise. Notwithstanding anything
herein to the contrary, in no event shall any Agent or any Lender be considered an “Affiliate” of
any Loan Party.

“After Acquired Property” means any interest in real property acquired by the Borrower
or any of its Subsidiaries after the date hereof with a Current Value in excess of $500,000 in the
case of a fee interest or requiring the payment of annual rent exceeding in the aggregate $50,000
in the case of a leasehold interest.

“Agent” and “Agents” have the respective meanings specified therefor in the
preamble hereto.

“Agreement” means this Financing Agreement, including all amendments, modifications
and supplements and any exhibits or schedules to any of the foregoing, and shall refer to the
Agreement as the same may be in effect at the time such reference becomes operative.

“Annaco” means, individually and collectively, Annaco, Inc., an Ohio corporation, 943
Hazel LLC, an Ohio limited liability company, and Ocanna Plant II LLC, an Ohio limited liability
company.

“Annaco Acquisition” means the acquisition by Metalico Akron of substantially all of
the assets of Annaco, Inc., an Ohio corporation, and the acquisition by Metalico Akron Realty of
all of the Capital Stock of Elizabeth Hazel LLC, an Ohio limited liability company, a wholly-owned
Subsidiary of 943 Hazel LLC, an Ohio limited liability company, and Melinda Hazel LLC, an Ohio
limited liability company, a wholly-owned Subsidiary of Ocanna Plant II LLC, an Ohio limited
liability company, all in accordance with the terms of the Annaco Acquisition Agreement.

“Annaco Acquisition Agreement” means that certain Agreement for Purchase of Assets,
dated as of June 29, 2007, by and among Annaco, Metalico Akron and Metalico Akron Realty.

“Annaco Acquisition Documents” means, collectively, the Annaco Acquisition Agreement
and all other instruments and agreements executed and delivered in connection therewith.

“Annaco Earn-Out Arrangements” means the Borrower’s obligations to make payments in
connection with the Annaco Acquisition based on the performance of the entity acquired (or
allocated to the assets acquired) in connection therewith and so long as such obligations are
unsecured.

“Assignment and Acceptance” means an assignment and acceptance entered into by an
assigning Lender and an assignee, and accepted by the Collateral Agent, in accordance with
Section 12.07 hereof and substantially in the form of Exhibit A-1 hereto or such
other form acceptable to the Collateral Agent.

“Authorized Officer” means, with respect to any Person, the chief executive officer,
chief financial officer, president, executive vice president, or senior vice president of such
Person.

“Availability” has the meaning ascribed thereto in the Foothill Loan Agreement as in
effect on the Effective Date.

“Bankruptcy Code” means the United States Bankruptcy Code (11 U.S.C. § 101, et
seq.), as amended, and any successor statute.

“Base LIBOR Rate” means the greater of (a) 4.5 percent per annum, and (b) the rate per
annum, determined by Administrative Agent in accordance with its customary procedures, and
utilizing such electronic or other quotation sources as are customarily utilized by lenders in loan
transactions of this type, on the basis of the rates at which Dollar deposits are offered to major
banks in the London interbank market on or about 11:00 a.m. (New York time) 2 Business Days prior
to the commencement of the applicable Interest Period, for a term and in amounts comparable to the
Interest Period and amount of the LIBOR Rate Loan requested by the Borrower in accordance with this
Agreement, which determination shall be conclusive in the absence of manifest error.

“Beacon” means Beacon Energy Corp. (formerly known as AgriFuel Co.), a Delaware
corporation.

“Beacon Investment” means an investment or series of investments, after the Effective
Date, in the common Capital Stock of Beacon for cash consideration not exceeding in the aggregate
$2,000,000.

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

"Board of Directors” means the board of directors (or comparable managers) of Borrower
or any committee thereof duly authorized to act on behalf thereof.

“Borrower” has the meaning specified therefor in the preamble hereto.

“Business Day” means any day that is not a Saturday, Sunday, or other day on which
banks are authorized or required to close in the State of New York, except that, if a determination
of a Business Day shall relate to a LIBOR Rate Loan, the term “Business Day” also shall exclude any
day on which banks are closed for dealings in U.S. Dollar deposits in the London interbank market.

“Capital Expenditures” means, with respect to any Person for any period, the sum of
(i) the aggregate of all expenditures by such Person and its Subsidiaries during such period that
in accordance with GAAP are or should be included in “property, plant and equipment” or in a
similar fixed asset account on its balance sheet, whether such expenditures are paid in cash or
financed and including all Capitalized Lease Obligations paid or payable during such period, and
(ii) to the extent not covered by clause (i) above, (A) the aggregate of all expenditures by such
Person and its Subsidiaries during such period to acquire by purchase or otherwise the business or
fixed assets of, or the Capital Stock of, any other Person, and (B) the aggregate of all
capitalized software costs.

“Capitalized Lease” means, with respect to any Person, any lease of real or personal
property by such Person as lessee which is (i) required under GAAP to be capitalized on the balance
sheet of such Person or (ii) a transaction of a type commonly known as a “synthetic lease” (i.e. a
lease transaction that is treated as an operating lease for accounting purposes but with respect to
which payments of rent are intended to be treated as payments of principal and interest on a loan
for Federal income tax purposes).

“Capitalized Lease Obligations” means, with respect to any Person, obligations of such
Person and its Subsidiaries under Capitalized Leases, and, for purposes hereof, the amount of any
such obligation shall be the capitalized amount thereof determined in accordance with GAAP.

“Capital Stock” means (i) with respect to any Person that is a corporation, any and
all shares, interests, participations or other equivalents (however designated and whether or not
voting) of corporate stock, and (ii) with respect to any Person that is not a corporation, any and
all partnership, membership or other equity interests of such Person.

“Carry-Over Amount” has the meaning specified therefor in Section 7.03(e).

“Cash and Cash Equivalents” means all cash, deposit or securities account balances,
certificates of deposit or other financial instruments properly classified as cash or cash
equivalents under GAAP.

“CFC” means a controlled foreign corporation (as that term is defined in the IRC).

"Change in Law” has the meaning specified therefor in Section 4.05(a).

“Change of Control” means each occurrence of any of the following:

(a) any “person” or “group” (within the meaning of Sections 13(d) and 14(d) of the
Exchange Act) becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of 25%, or more, of the Capital Stock of the Borrower having the right to
vote for the election of members of the Board of Directors,

(b) a majority of the members of the Board of Directors do not constitute Continuing
Directors,

(c) (i) the Borrower ceases to directly own and control 100% of the outstanding
Capital Stock of each of its Subsidiaries (other than Beacon) extant as of the Effective Date,
unless otherwise permitted hereunder, or (ii) the Borrower ceases to own and control at least 50%
of the outstanding Capital Stock of Beacon, unless otherwise permitted hereunder, or (iii) from and
after the Term Loan B Funding Date, the Borrower ceases to directly or indirectly own and control
at least 82.5% of the outstanding Capital Stock of Totalcat and its Subsidiaries (such percentage
to be increased to the extent that the Borrower acquires any additional Capital Stock of Totalcat
after the Term Loan B Funding Date), unless otherwise permitted hereunder,

(d) (i) the Borrower consolidates with or merges into another entity or conveys,
transfers or leases all or substantially all of its property and assets to any Person, or (ii) any
entity consolidates with or merges into the Borrower, which in either event (i) or (ii) is pursuant
to a transaction in which the outstanding voting Capital Stock of the Borrower is reclassified or
changed into or exchanged for cash, securities or other property, or

(e) the occurrence of a “Change of Control” (as that term is defined in the Foothill Loan
Agreement).

“Code” means the New York Uniform Commercial Code, as in effect from time to time;
provided, however, that in the event that, by reason of mandatory provisions of
law, any or all of the attachment, perfection, priority, or remedies with respect to Collateral
Agent’s Liens on any Collateral is governed by the Uniform Commercial Code as enacted and in effect
in a jurisdiction other than the State of New York, the term “Code” shall mean the Uniform
Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the
provisions thereof relating to such attachment, perfection, priority, or remedies.

“Collateral” means all of the property and assets and all interests therein and
proceeds thereof now owned or hereafter acquired by any Person upon which a Lien is granted or
purported to be granted by such Person as security for all or any part of the Obligations.

“Collateral Agent” has the meaning specified therefor in the preamble hereto.

“Collateral Agent Advances” has the meaning specified therefor in Section
10.08(a).

“Collection Account” and “Collection Accounts” have the meanings specified
therefor in Section 8.01(a).

“Commitments” means, with respect to each Lender, such Lender’s Term Loan A Commitment
and Term Loan B Commitment.

“Compass/150 Lee Notes” means, collectively, (i) that certain promissory note, dated
April 30, 2007, by Metalico Transfer in favor of Compass Environmental Haulers, Inc., in the
original principal amount of $455,000, and (ii) that certain promissory note, dated April 30, 2007,
by Metalico Transfer Realty in favor of 150 Lee, LLC, in the original principal amount of $500,000.

“Compass Non-Compete Agreement” means that certain Non-Competition Agreement dated
April 30, 2007, by and between Metalico Transfer and Gary D’Amico.

“Compass Subordination Agreement, means a subordination agreement, in form and
substance reasonably satisfactory to the Collateral Agent, by and among the Collateral Agent,
Foothill, the holders of the Compass/150 Lee Notes and Gary D’Amico.

“Consolidated EBITDA” means, with respect to any Person for any period, the
Consolidated Net Income of such Person and its Subsidiaries for such period, plus (i)
without duplication, the sum of the following amounts of such Person and its Subsidiaries for such
period and to the extent deducted in determining Consolidated Net Income of such Person and its
Subsidiaries for such period: (A) Consolidated Net Interest Expense, (B) net income tax expense,
(C) depreciation expense, (D) amortization expense, (E) non-cash compensation charges, (F) non-cash
expenses relating to the Borrower’s ownership of the Capital Stock of Beacon, and (G) to the extent
actually paid during such period, fees and expenses related to the consummation of the transactions
contemplated to be closed on the Effective Date under this Agreement and the transactions
contemplated by the Annaco Acquisition Agreement, minus non-cash gains relating to the
Borrower’s ownership of the Capital Stock of Beacon; provided that Consolidated EBITDA of the
Borrower and its Subsidiaries for each fiscal month during the period from July 1, 2006 to June 30,
2007 shall be as mutually agreed to by the Borrower and the Agent.

“Consolidated Funded Indebtedness” means, with respect to any Person at any date, all
Indebtedness for borrowed money or letters of credit of such Person, determined on a consolidated
basis in accordance with GAAP, which by its terms matures more than one year after the date of
calculation, and any such Indebtedness maturing within one year from such date which is renewable
or extendable at the option of such Person to a date more than one year from such date, including,
in any event, but without duplication, with respect to the Borrower and its Subsidiaries, the Term
Loan A, the Term Loan B, and the amount of their Capitalized Lease Obligations.

“Consolidated Net Income” means, with respect to any Person for any period, the net
income (loss) of such Person and its Subsidiaries for such period, determined on a consolidated
basis and in accordance with GAAP, but excluding from the determination of Consolidated Net Income
(without duplication) (a) any non-cash extraordinary or non-recurring gains or losses or non-cash
gains or losses from Dispositions, (b) restructuring charges, (c) effects of discontinued
operations, (d) interest that is paid-in-kind, (e) interest income, and (f) any tax refunds, net
operating losses or other net tax benefits received during such period on account of any prior
period.

“Consolidated Net Interest Expense” means, with respect to any Person for any period,
gross cash interest expense of such Person and its Subsidiaries for such period determined on a
consolidated basis and in accordance with GAAP (including interest expense paid to Affiliates of
such Person), less (i) the sum of (A) interest income for such period and (B) gains for
such period on Hedging Agreements (to the extent not included in interest income above and to the
extent not deducted in the calculation of gross interest expense), plus (ii) the sum of
(A) losses for such period on Hedging Agreements (to the extent not included in such gross interest
expense) and (B) the upfront costs or fees for such period associated with Hedging Agreements (to
the extent not included in such gross interest expense), in each case, determined on a consolidated
basis and in accordance with GAAP.

“Contingent Obligation” means, with respect to any Person, any obligation of such
Person guaranteeing or intended to guarantee any Indebtedness, leases, dividends or other
obligations (“primary obligations”) of any other Person (the “primary obligor”) in any manner,
whether directly or indirectly, including (i) the direct or indirect guaranty, endorsement (other
than for collection or deposit in the ordinary course of business), co-making, discounting with
recourse or sale with recourse by such Person of the obligation of a primary obligor, (ii) the
obligation to make take-or-pay or similar payments, if required, regardless of nonperformance by
any other party or parties to an agreement, (iii) any obligation of such Person, whether or not
contingent, (A) to purchase any such primary obligation or any property constituting direct or
indirect security therefor, (B) to advance or supply funds (1) for the purchase or payment of any
such primary obligation or (2) to maintain working capital or equity capital of the primary obligor
or otherwise to maintain the net worth or solvency of the primary obligor, (C) to purchase
property, assets, securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of such primary
obligation or (D) otherwise to assure or hold harmless the holder of such primary obligation
against loss in respect thereof; provided, however, that the term “Contingent
Obligation” shall not include any product warranties extended in the ordinary course of business.
The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation with respect to which such Contingent Obligation is
made (or, if less, the maximum amount of such primary obligation for which such Person may be
liable pursuant to the terms of the instrument evidencing such Contingent Obligation) or, if not
stated or determinable, the maximum reasonably anticipated liability with respect thereto (assuming
such Person is required to perform thereunder), as determined by such Person in good faith.

“Continuing Director” means (a) any member of the Board of Directors who was a
director (or comparable manager) of the Borrower on the Effective Date, and (b) any individual who
becomes a member of the Board of Directors after the Effective Date if such individual was
appointed or nominated for election to the Board of Directors by a majority of the Continuing
Directors, but excluding any such individual originally proposed for election in opposition to the
Board of Directors in office at the Effective Date in an actual or threatened election contest
relating to the election of the directors (or comparable managers) of the Borrower (as such terms
are used in Rule 14a-11 under the Exchange Act) and whose initial assumption of office resulted
from such contest or the settlement thereof.

“Current Value” has the meaning specified therefor in Section 7.01(o).

“Default” means an event which, with the giving of notice or the lapse of time or
both, would constitute an Event of Default.

“Disposition” means any transaction, or series of related transactions, pursuant to
which any Person or any of its Subsidiaries sells, assigns, transfers or otherwise disposes of any
property or assets (whether now owned or hereafter acquired) to any other Person, in each case,
whether or not the consideration therefor consists of cash, securities or other assets owned by the
acquiring Person.

“Dollar,” “Dollars” and the symbol “$” each means lawful money of the
United States of America.

“Domestic Subsidiary” means any Subsidiary of any Person that is not a CFC.

“Effective Date” means the date, on or after July 3, 2007, on which all of the
conditions precedent set forth in Section 5.01 are first satisfied or waived.

“Employee Plan” means an employee benefit plan (other than a Multiemployer Plan)
covered by Title IV of ERISA and maintained (or that was maintained at any time during the six (6)
calendar years preceding the date of any borrowing hereunder) for employees of any Loan Party or
any of its ERISA Affiliates.

“Environmental Actions” means any complaint, summons, citation, notice, directive,
order, claim, litigation, investigation, judicial or administrative proceeding, judgment, letter or
other communication from any Governmental Authority involving violations of Environmental Laws or
Releases of Hazardous Materials (i) from any assets, properties or businesses of any Loan Party or
any of its Subsidiaries or acquired from any predecessor in interest; (ii) from adjoining
properties or businesses; or (iii) onto any facilities which received Hazardous Materials generated
by any Loan Party or any of its Subsidiaries or generated by any predecessor in interest from which
any Loan Party or any of its Subsidiaries acquired any such facility.

“Environmental Laws” means the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. § 9601, et seq.), the Hazardous Materials Transportation
Act (49 U.S.C. § 1801, et seq.), the Resource Conservation and Recovery Act
(42 U.S.C. § 6901, et seq.), the Federal Clean Water Act (33 U.S.C. § 1251
et seq.), the Clean Air Act (42 U.S.C. § 7401 et seq.), the Toxic
Substances Control Act (15 U.S.C. § 2601 et seq.) and the Occupational Safety and
Health Act (29 U.S.C. § 651 et seq.), as such laws may be amended or otherwise
modified from time to time, and any other present or future federal, state, local or foreign
statute, ordinance, rule, regulation, order, judgment, decree, permit, license or other binding
determination of any Governmental Authority imposing liability or establishing standards of conduct
for protection of the environment or other government restrictions relating to the protection of
the environment or the release, emission, deposit, discharge, leaching, migration or spill of any
Hazardous Materials into the environment.

“Environmental Liabilities and Costs” means all liabilities, monetary obligations,
Remedial Actions, losses, damages, punitive damages, consequential damages, treble damages, costs
and expenses (including all reasonable fees, disbursements and expenses of counsel, experts and
consultants and costs of investigations and feasibility studies), fines, penalties, sanctions and
interest incurred as a result of any claim or demand by any Governmental Authority or any third
party, and which relate to the liability or potential liability of any Loan Party with respect to
any environmental condition or a Release of Hazardous Materials from or onto (i) any property
currently or formerly owned by any Loan Party or any of its Subsidiaries or (ii) any Real Property
which received Hazardous Materials generated by any Loan Party or any of its Subsidiaries.

“Environmental Lien” means any Lien in favor of any Governmental Authority for
Environmental Liabilities and Costs.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and any
successor statute of similar import, and regulations thereunder, in each case, as in effect from
time to time. References to sections of ERISA shall be construed also to refer to any successor
sections.

“ERISA Affiliate” means, with respect to any Person, any trade or business (whether or
not incorporated) which is a member of a group of which such Person is a member and which would be
deemed to be a “controlled group” within the meaning of Sections 414(b), (c), (m) and (o) of the
IRC.

“Event of Default” means any of the events set forth in Section 9.01.

“Excess Amount” has the meaning specified therefor in Section 7.03(e).

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Extraordinary Receipts” means any cash or other payments received by the Borrower or
any of its Subsidiaries not in the ordinary course of business (and not consisting of proceeds of
Dispositions or Indebtedness), including (i) foreign, United States, state or local tax refunds,
(ii) pension plan reversions, (iii) proceeds of insurance, (iv) judgments, proceeds of settlements
or other consideration of any kind in connection with any cause of action, (v) condemnation awards
(and payments in lieu thereof), (vi) indemnity payments and (vii) any purchase price adjustment
received in connection with any purchase agreement and any amounts received from escrow
arrangements in connection with any purchase agreement; provided, however, that
“Extraordinary Receipts” shall not include amounts received by Gulf Coast Recycling, Inc. in the
nature of contribution, indemnification, or reimbursement in respect of environmental remediation
costs and liabilities expended in relation to Florida sites on or prior to the Effective Date, so
long as each of the following are satisfied at the time of the receipt of such amounts: (a) no
Event of Default has occurred and is continuing, (b) the Qualified Issuance has occurred, (c) such
amounts are received within three (3) years of the Effective Date, and (d) an amount, to be
mutually agreed upon by Collateral Agent, Foothill, and the Borrower as a reasonable estimation of
the liability of Borrower and its Subsidiaries for future environmental remediation costs at such
site, has been deposited in a deposit account that is subject to a perfected security interest in
favor of Foothill and the Collateral Agent.

“Facility” means each of the parcels of real property identified on Schedule
F-1 attached hereto, including all buildings and other improvements thereon, all fixtures
located at or used in connection with such facility, all whether now or hereafter existing.

“Federal Funds Rate” means, for any period, a fluctuating interest rate per annum
equal to, for each day during such period, 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 which is a Business Day, the average of the quotations for
such day on such transactions received by the Administrative Agent from three Federal funds brokers
of recognized standing selected by it.

“Filing Authorization Letter” means a letter duly executed by each Loan Party
authorizing the Collateral Agent to file financing statements in such office or offices as may be
necessary or, in the opinion of the Collateral Agent, desirable to perfect the security interests
purported to be created by each Security Agreement.

“Final Maturity Date” means June 30, 2013, or such earlier date on which all or any
portion of the Obligations shall become due and payable pursuant to the terms of Section
9.01.

“Financial Statements” means (i) the audited consolidated balance sheet of the
Borrower and its Subsidiaries for the Fiscal Year ended December 31, 2006, and the related
consolidated statement of operations, shareholders’ equity and cash flows for the Fiscal Year then
ended, and (ii) the unaudited consolidated balance sheet of the Borrower and its Subsidiaries for
the 3 months ended March 31, 2007, and the related consolidated statement of operations,
shareholder’s equity and cash flows for the 3 months then ended.

“Fiscal Year” means the fiscal year of the Borrower and its Subsidiaries ending on
December 31st of each year.

“Fixed Charge Coverage Ratio” means, with respect to any Person for any period, the
ratio of (i) the Consolidated EBITDA of such Person and its Subsidiaries for such period,
minus Capital Expenditures (exclusive of financed Capital Expenditures) made by such Person
and its Subsidiaries during such period, to (ii) the sum of (A) all principal of Indebtedness of
such Person and its Subsidiaries scheduled to be paid or prepaid during such period, plus
(B) Consolidated Net Interest Expense (exclusive of the amortization of fees associated with the
consummation of the financing under this Agreement and the Foothill Agreement) of such Person and
its Subsidiaries for such period, plus (C) all income tax liabilities of such Person and
its Subsidiaries that accrued during such period, to the extent that the amount of such liabilities
is greater than zero, plus (D) cash dividends or distributions paid by such Person and its
Subsidiaries (other than, in the case of the Borrower, dividends or distributions paid to the
Borrower or its wholly-owned Subsidiaries) during such period. In determining the Fixed Charge
Coverage Ratio for a particular period, the calculation of the income tax liabilities of such
Person and its Subsidiaries described in clause (ii)(C) of the immediately preceding sentence shall
be made without giving effect to any tax refunds, tax receivables, net operating losses or other
net tax benefits that were received or receivable during such period on account of any prior
periods.

“Foothill” means Wells Fargo Foothill, Inc., a California corporation.

“Foothill Indebtedness” means Indebtedness of the Loan Parties owing under the
Foothill Loan Agreement.

“Foothill Loan Agreement” means that certain Amended and Restated Loan and Security
Agreement, dated as of July 3, 2007, between Borrower, the Guarantors, and Foothill, as the same is
amended or modified from time to time.

“Frank Non-Competition Agreement” means that certain Non-Competition Agreement, dated
as of November 18, 2004, by and between Metalico Rochester and Robert Frank.

“Funding Losses” has the meaning specified therefor in Section 2.04(d)(ii)(B).

“GAAP” means generally accepted accounting principles in effect from time to time in
the United States, applied on a consistent basis, provided that for the purpose of
Section 7.03 hereof and the definitions used therein, “GAAP” shall mean generally accepted
accounting principles in effect on the date hereof and consistent with those used in the
preparation of the Financial Statements, provided, further, that if there occurs after the date of
this Agreement any change in GAAP that affects in any respect the calculation of any covenant
contained in Section 7.03 hereof, the Collateral Agent and the Borrower shall negotiate in
good faith amendments to the provisions of this Agreement that relate to the calculation of such
covenant with the intent of having the respective positions of the Lenders and the Borrower after
such change in GAAP conform as nearly as possible to their respective positions as of the date of
this Agreement and, until any such amendments have been agreed upon, the covenants in
Section 7.03 hereof shall be calculated as if no such change in GAAP has occurred.

“Governmental Authority” means any nation or government, any Federal, state, city,
town, municipality, county, local or other political subdivision thereof or thereto and any
department, commission, board, bureau, instrumentality, agency or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.

“Guaranteed Obligations” has the meaning specified therefor in Section 11.01.

“Guarantor” and “Guarantors” (i) have the meanings specified therefor in the
preamble to this Agreement, and (ii) include each other Person which guarantees, pursuant to
Section 7.01(b) or otherwise, all or any part of the Obligations.

“Guaranty” means (i) the guaranty of each Guarantor party hereto contained in
Article XI hereof, and (ii) each other guaranty made by any other Guarantor in favor of the
Collateral Agent for the benefit of the Agents and the Lenders pursuant to the requirements of
Section 7.01(b) or otherwise.

“Hazardous Materials” means (a) any element, compound or chemical that is defined,
listed or otherwise classified as a contaminant, pollutant, toxic pollutant, toxic or hazardous
substance, extremely hazardous substance or chemical, hazardous waste, special waste, or solid
waste under Environmental Laws or that is likely to cause immediately, or at some future time, harm
to or have an adverse effect on, the environment or risk to human health or safety, including any
pollutant, contaminant, waste, hazardous waste, toxic substance or dangerous good which is defined
or identified in any Environmental Law and which is present in the environment in such quantity or
state that it contravenes any Environmental Law; (b) petroleum and its refined products;
(c) polychlorinated biphenyls; (d) any substance exhibiting a hazardous waste characteristic,
including corrosivity, ignitability, toxicity or reactivity as well as any radioactive or explosive
materials; and (e) any raw materials, building components (including asbestos-containing materials)
and manufactured products containing hazardous substances listed or classified as such under
Environmental Laws.

“Hedging Agreement” means any interest rate, foreign currency, commodity or equity
swap, collar, cap, floor or forward rate agreement, or other agreement or arrangement designed to
protect against fluctuations in interest rates or currency, commodity or equity values (including
any option with respect to any of the foregoing and any combination of the foregoing agreements or
arrangements), and any confirmation executed in connection with any such agreement or arrangement.

“Highest Lawful Rate” means, with respect to any Agent or any Lender, the maximum
non-usurious interest rate, if any, that at any time or from time to time may be contracted for,
taken, reserved, charged or received on the Obligations under laws applicable to such Agent or such
Lender which are currently in effect or, to the extent allowed by law, under such applicable laws
which may hereafter be in effect and which allow a higher maximum non-usurious interest rate than
applicable laws now allow.

“HSR” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976 as in effect as
of the Effective Date.

“Indebtedness” means, with respect to any Person, without duplication, (i) all
indebtedness of such Person for borrowed money; (ii) all obligations of such Person for the
deferred purchase price of property or services (other than trade payables or other accounts
payable incurred in the ordinary course of such Person’s business and not outstanding for more than
90 days after the date such payable was created); (iii) all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments or upon which interest payments are
customarily made; (iv) all reimbursement, payment or other obligations and liabilities of such
Person created or arising under any conditional sales or other title retention agreement with
respect to property used or acquired by such Person, even though the rights and remedies of the
lessor, seller or lender thereunder may be limited to repossession or sale of such property; (v)
all Capitalized Lease Obligations of such Person; (vi) all obligations and liabilities, contingent
or otherwise, of such Person, in respect of letters of credit, acceptances and similar facilities;
(vii) all obligations and liabilities, calculated on a basis satisfactory to the Collateral Agent
and in accordance with accepted practice, of such Person under Hedging Agreements; (viii) all
Contingent Obligations; (ix) liabilities incurred under Title IV of ERISA with respect to any plan
(other than a Multiemployer Plan) covered by Title IV of ERISA and maintained for employees of such
Person or any of its ERISA Affiliates; (x) withdrawal liability incurred under ERISA by such Person
or any of its ERISA Affiliates with respect to any Multiemployer Plan; (xi) all monetary
obligations under any receivables factoring, receivable sales or similar transactions and all
monetary obligations under any synthetic lease, tax ownership/operating lease, off-balance sheet
financing or similar financing; and (xii) all obligations referred to in clauses (i) through (xi)
of this definition of another Person secured by (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured by) a Lien upon property owned by such
Person, even though such Person has not assumed or become liable for the payment of such
Indebtedness. The Indebtedness of any Person shall include the Indebtedness of any partnership or
joint venture in which such Person is a general partner or a joint venturer.

“Indemnified Matters” has the meaning specified therefor in Section 12.15.

“Indemnitees” has the meaning specified therefor in Section 12.15.

“Insolvency Proceeding” means any proceeding commenced by or against any Person under
any provision of the Bankruptcy Code or under any other bankruptcy or insolvency law, assignments
for the benefit of creditors, formal or informal moratoria, compositions, or extensions generally
with creditors, or proceedings seeking reorganization, arrangement, or other similar relief.

“Intercompany Subordination Agreement” means the Intercompany Subordination Agreement,
dated as of the Effective Date, duly executed by each of the Loan Parties, substantially in the
form of Exhibit I-1.

“Intercreditor Agreement” means an Intercreditor Agreement, dated as of even date
herewith, substantially in the form of Exhibit I-2, by and between the Collateral Agent and
Foothill.

“Interest Period” means, with respect to each LIBOR Rate Loan, a period commencing on
the date of the making of such LIBOR Rate Loan and ending 1, 2, 3 or 6 months thereafter;
provided, however, that (a) if any Interest Period would end on a day that is not a
Business Day, such Interest Period shall be extended (subject to clauses (c)-(e) below) to the next
succeeding Business Day, (b) interest shall accrue at the applicable rate based upon the LIBOR Rate
from and including the first day of each Interest Period to, but excluding, the day on which any
Interest Period expires, (c) any Interest Period that would end on a day that is not a Business Day
shall be extended to the next succeeding Business Day unless such Business Day falls in another
calendar month, in which case such Interest Period shall end on the next preceding Business Day,
(d) with respect to an Interest Period that begins on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the calendar month at the end of
such Interest Period), the Interest Period shall end on the last Business Day of the calendar month
that is 1, 2, 3 or 6 months after the date on which the Interest Period began, as applicable, and
(e) Borrower may not elect an Interest Period which will end after the Final Maturity Date.

“Inventory” means all of each of the Loan Parties’ now owned or hereafter acquired
right, title, and interest with respect to inventory as defined in the Code.

“IRC” means the Internal Revenue Code of 1986, as amended (or any successor statute
thereto) and the regulations thereunder.

“Jewish Philanthropies Modification Agreement” means that certain Modification
Agreement, dated as of December 18, 1998, by and between the Borrower and the Foundation for Jewish
Philanthropies, Inc., as amended by that certain Amendment to the Modification Agreement dated June
6, 2002.

“Krieger Mortgage Seller Subordinated Note” means a promissory note, dated October 31,
2003, in the original principal amount of $400,000 (with an outstanding principal balance of
$400,000 as of May 31, 2007), made by Metalico Rochester to the order of Diversified Scrap Metals,
Inc.

“Krieger Security Seller Subordinated Note” means a promissory note, dated October 31,
2003, in the original principal amount of $756,708 (with an outstanding principal balance of
$204,821 as of May 31, 2007), made by Metalico Rochester to the order of Diversified Scrap Metals,
Inc.

“Krieger Subordination Agreement” means a subordination agreement, in form and
substance reasonably satisfactory to the Collateral Agent, by and among the Collateral Agent,
Foothill, and the holders of the Krieger Mortgage Seller Subordinated Note and the Krieger Security
Seller Subordinated Note.

“Lease” means any lease of real property to which any Loan Party or any of its
Subsidiaries is a party as lessor or lessee.

“Lender” and “Lenders” have the meanings specified therefor in the preamble
hereto.

“Liabilities” has the meaning specified therefor in Section 2.07.

“LIBOR Deadline” has the meaning set forth in Section 2.04(g)(ii)(A).

“LIBOR Notice” means a written notice in the form of Exhibit L-1.

“LIBOR Option” has the meaning specified therefor in Section 2.04(g)(i).

“LIBOR Rate” means, for each Interest Period for each LIBOR Rate Loan, the rate per
annum determined by Administrative Agent by dividing (a) the Base LIBOR Rate for such Interest
Period, by (b) 100% minus the Reserve Percentage. The LIBOR Rate shall be adjusted on and as of
the effective day of any change in the Reserve Percentage.

“LIBOR Rate Loan” means each portion of a Loan that bears interest at a rate
determined by reference to the LIBOR Rate.

“Lien” means any mortgage, deed of trust, pledge, lien (statutory or otherwise),
security interest, charge or other encumbrance or security or preferential arrangement of any
nature, including any conditional sale or title retention arrangement, any Capitalized Lease and
any assignment, deposit arrangement or financing lease intended as, or having the effect of,
security.

“Loan” means the Term Loan A or the Term Loan B.

“Loan Account” means an account maintained hereunder by the Administrative Agent on
its books of account at the Payment Office, and with respect to the Borrower, in which the Borrower
will be charged with all Loans made to, and all other Obligations incurred by, the Borrower.

“Loan Document” means this Agreement, the Term Loan A Funds Flow Agreement, the Term
Loan B Funds Flow Agreement, the Intercompany Subordination Agreement, any Guaranty, any Security
Agreement, any Mortgage, any Filing Authorization Letter, the Intercreditor Agreement, the Niagara
Subordination Agreement, and any other agreement, instrument, and other document executed and
delivered pursuant hereto or thereto or otherwise evidencing or securing any Loan or any other
Obligation.

“Loan Party” means the Borrower or any Guarantor.

“Loan Servicing Fee” has the meaning specified therefor in Section 2.06(b).

“Lockbox Bank” has the meaning specified therefor in Section 8.01(a).

“Lockboxes” has the meaning specified therefor in Section 8.01(a).

“Material Adverse Effect” means a material adverse effect on any of (i) the
operations, business, assets, properties, condition (financial or otherwise) or prospects of any
Loan Party or the Loan Parties taken as a whole, (ii)  the ability of any Loan Party to perform any
of its obligations under any Loan Document to which it is a party, (iii) the legality, validity or
enforceability of this Agreement or any other Loan Document, (iv) the rights and remedies of any
Agent or any Lender under any Loan Document, or (v) the validity, perfection or priority of a Lien
in favor of the Collateral Agent for the benefit of the Agents and the Lenders on any of the
Collateral (other than any item or items of Collateral having an aggregate fair market value of
less than $100,000).

“Material Contract” means, with respect to any Person, (i) each contract or agreement
to which such Person or any of its Subsidiaries is a party involving aggregate consideration
payable to or by such Person or such Subsidiary of $100,000 or more (other than purchase orders in
the ordinary course of the business of such Person or such Subsidiary and other than contracts that
by their terms may be terminated by such Person or Subsidiary in the ordinary course of its
business upon less than 60 days notice without penalty or premium) and (ii) all other contracts or
agreements material to the business, operations, condition (financial or otherwise), performance,
prospects or properties of such Person or such Subsidiary.

“Maximum Credit Facility Amount” has the meaning specified therefor in the recitals
hereto.

“Maximum Priority First Lien Loan Amount” has the meaning ascribed thereto in the
Intercreditor Agreement as in effect on the date hereof.

“Metalico Akron” means Metalico Akron, Inc., an Ohio corporation.

“Metalico Akron Realty” means Metalico Akron Realty, Inc., an Ohio corporation.

“Metalico Buffalo” means Metalico Buffalo, Inc., a New York corporation.

“Metalico Niagara” means Metalico Niagara, Inc., a New York corporation.

“Metalico Rochester” means Metalico Rochester, Inc., a New York corporation.

“Metalico Transfer” means Metalico Transfer, Inc., a New York corporation.

“Metalico Transfer Realty” means Metalico Transfer Realty, Inc., a New York
corporation.

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

“Mortgage” means a mortgage, deed of trust or deed to secure debt, in form and
substance reasonably satisfactory to the Collateral Agent, made by a Loan Party in favor of the
Collateral Agent for the benefit of the Agents and the Lenders, securing the Obligations and
delivered to the Collateral Agent pursuant to the provisions hereof or otherwise.

“Multiemployer Plan” means a “multiemployer plan” as defined in Section 4001(a)(3) of
ERISA to which any Loan Party or any of its ERISA Affiliates has contributed to, or has been
obligated to contribute, at any time during the preceding six (6) years.

“Net Cash Proceeds” means, (i) with respect to any Disposition by any Person or any of
its Subsidiaries, the amount of cash received (directly or indirectly) from time to time (whether
as initial consideration or through the payment or disposition of deferred consideration) by or on
behalf of such Person or such Subsidiary, in connection therewith after deducting therefrom only
(A) the amount of any Indebtedness secured by any Permitted Lien on any asset (other than
Indebtedness assumed by the purchaser of such asset) which is required to be, and is, repaid in
connection with such Disposition (other than Indebtedness under this Agreement), (B) reasonable
expenses related thereto incurred by such Person or such Subsidiary in connection therewith,
(C) transfer taxes paid to any taxing authorities by such Person or such Subsidiary in connection
therewith, and (D) net income taxes to be paid in connection with such Disposition (after taking
into account any tax credits or deductions and any tax sharing arrangements) and (ii) with respect
to the issuance or incurrence of any Indebtedness by any Person or any of its Subsidiaries, or the
sale or issuance by any Person or any of its Subsidiaries of any shares of its Capital Stock, the
aggregate amount of cash received (directly or indirectly) from time to time (whether as initial
consideration or through the payment or disposition of deferred consideration) by or on behalf of
such Person or such Subsidiary in connection therewith, after deducting therefrom only
(A) reasonable expenses related thereto incurred by such Person or such Subsidiary in connection
therewith, (B) transfer taxes paid by such Person or such Subsidiary in connection therewith and
(C) net income taxes to be paid in connection therewith (after taking into account any tax credits
or deductions and any tax sharing arrangements); in each case of clause (i) and (ii) to the extent,
but only to the extent, that the amounts so deducted are (x) actually paid to a Person that, except
in the case of reasonable out-of-pocket expenses, is not an Affiliate of such Person or any of its
Subsidiaries and (y) properly attributable to such transaction or to the asset that is the subject
thereof.

“New Lending Office” has the meaning specified therefor in Section 2.08(d).

“New Subsidiary” has the meaning specified therefor in Section 7.02(b).

“Niagara Seller Subordinated Note” means a promissory note, dated October 31, 2005, in
the original principal amount of $1,000,000 (with an outstanding principal balance of approximately
$625,000 as of May 31, 2007), made by Metalico Niagara to the order of Ange’s Scrap Iron and Metal,
Inc.

“Niagara Subordination Agreement” means a Subordination Agreement, substantially in
the form of Exhibit S-1, by and among the Collateral Agent, Foothill, and the holder of the
Niagara Seller Subordinated Note.

“Non-U.S. Lender” has the meaning specified therefor in Section 2.08(d).

“Notice of Borrowing” has the meaning specified therefor in Section 2.02(a).

“Obligations” means all present and future indebtedness, obligations, and liabilities
of each Loan Party to the Agents and the Lenders, or any of them, under the Loan Documents, whether
or not the right of payment in respect of such claim is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, disputed, undisputed, legal, equitable, secured,
unsecured, and whether or not such claim is discharged, stayed or otherwise affected by any
proceeding referred to in Section 9.01. Without limiting the generality of the foregoing,
the Obligations of each Loan Party under the Loan Documents include (a) the obligation
(irrespective of whether a claim therefor is allowed in any Insolvency Proceeding) to pay
principal, interest, charges, expenses, fees, attorneys’ fees and disbursements, indemnities and
other amounts payable by such Person under the Loan Documents, and (b) the obligation of such
Person to reimburse any amount in respect of any of the foregoing that any Agent or any Lender (in
its sole discretion) may elect to pay or advance on behalf of such Person.

“Operating Lease Obligations” means all obligations for the payment of rent for any
real or personal property under leases or agreements to lease, other than Capitalized Lease
Obligations.

“Other Taxes” has the meaning specified therefor in Section 2.08(b).

“Participant Register” has the meaning specified therefor in Section 12.07(g).

“Payment Office” means the Administrative Agent’s office located at 299 Park Avenue,
23rd Floor, New York, New York or at such other office or offices of the Administrative Agent as
may be designated in writing from time to time by the Administrative Agent to the Collateral Agent
and the Borrower.

“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.

“Permitted Dispositions” means (a) sales or other dispositions of Inventory to buyers
in the ordinary course of business, (b) sales or other dispositions of obsolete or worn-out
equipment in the ordinary course of business, (c) the use or transfer of Cash and Cash Equivalents
by the Borrower and its Subsidiaries in a manner that is not prohibited by the terms of this
Agreement or the other Loan Documents, (d) the licensing by the Borrower and its Subsidiaries, on a
non-exclusive basis, of patents, trademarks, copyrights, and other intellectual property rights in
the ordinary course of business, and (e) the granting of leases or subleases to other Persons not
materially interfering with the conduct of business of any of the Loan Parties, and (f) the sale,
distribution, transfer or other disposition of any of the Capital Stock of Beacon owned by the
Borrower.

“Permitted Indebtedness” means:

(a) any Indebtedness owing to any Agent and any Lender under this Agreement and the
other Loan Documents;

(b) Indebtedness listed on Schedule 7.02(b), and the extension of maturity,
refinancing or modification of the terms thereof; provided, however, that (i) such
extension, refinancing or modification is pursuant to terms that are not less favorable to the Loan
Parties and the Lenders than the terms of the Indebtedness being extended, refinanced or modified
and (ii) after giving effect to such extension, refinancing or modification, the amount of such
Indebtedness is not greater than the amount of Indebtedness outstanding immediately prior to such
extension, refinancing or modification plus accrued interest thereon and the fees incurred in
connection with the extension, refinancing, or modification;

(c) Indebtedness evidenced by Capitalized Lease Obligations entered into in order to
finance Capital Expenditures made by the Loan Parties in accordance with the provisions of
Section 7.02(f), which Indebtedness, when aggregated with the principal amount of all
Indebtedness incurred under this clause (c) and clause (d) of this definition, does not exceed
$10,000,000 at any time outstanding;

(d) purchase money Indebtedness incurred to enable a Loan Party to acquire equipment
in the ordinary course of its business, which Indebtedness, when aggregated with the principal
amount of all Indebtedness incurred under this clause (d) and clause (c) of this definition, does
not exceed $10,000,000 at any time outstanding;

(e) Indebtedness permitted under Section 7.02(e);

(f) Indebtedness of the Borrower or any of its Subsidiaries under any Hedging
Agreement so long as such Hedging Agreements are used solely as a part of its normal business
operations as a risk management strategy or hedge against changes resulting from market operations
and not as a means to speculate for investment purposes on trends and shifts in financial or
commodities markets;

(g) Indebtedness owed by one Loan Party to another Loan Party so long as the making
of the investment by the Loan Party that is acting as the lender is permitted hereunder;

(h) Foothill Indebtedness in an aggregate principal amount not in excess of
$93,500,000 at any time outstanding;

(i) Indebtedness evidenced by the Krieger Mortgage Seller Subordinated Note in an
aggregate principal amount not in excess of $400,000 at any time outstanding;

(j) Indebtedness evidenced by the Krieger Security Seller Subordinated Note in an
aggregate principal amount not in excess of $204,821 at any time outstanding;

(k) Indebtedness evidenced by the Niagara Seller Subordinated Note in an aggregate
principal amount not in excess of $625,000 at any time outstanding;

(l) Indebtedness evidenced by the United Alloys Seller Note in an aggregate
principal amount not in excess of $157,562.08 at any time outstanding;

(m) Indebtedness evidenced by the United Alloys Non-Competition Agreement in an
aggregate principal amount not in excess of $157,561.08 at any time outstanding;

(n) Indebtedness evidenced by the Jewish Philanthropies Modification Agreement in an
aggregate principal amount not in excess of $260,000 at any time outstanding;

(o) Indebtedness evidenced by the Frank Non-Competition Agreement in an aggregate
principal amount not in excess of $437,500 at any time outstanding;

(p) Indebtedness evidenced by the Compass/150 Lee Notes in the aggregate principal
amount not in excess of $915,209 at any time outstanding;

(q) Indebtedness evidenced by the Compass Non-Compete Agreement in an aggregate
principal amount not in excess of $115,000 at any time outstanding;

(r) Indebtedness evidenced by the Tranzact Notes in the aggregate principal amount
not in excess of $2,112,576 at any time outstanding;

(s) Contingent Obligations represented by any guaranties by Borrower or any of its
Subsidiaries of Permitted Indebtedness outstanding under the Compass/150 Notes or the Tranzact
Notes;

(t) the Annaco Earn-Out Arrangements; and

(u) Subordinated Debt.

“Permitted Investments” means (i) marketable direct obligations issued or
unconditionally guaranteed by the United States Government or issued by any agency or
instrumentality thereof and backed by the full faith and credit of the United States, in each case,
maturing within six months from the date of acquisition thereof; (ii) commercial paper, maturing
not more than 270 days after the date of issue rated P-1 by Moody’s or A-1 by Standard & Poor’s;
(iii) certificates of deposit maturing not more than 270 days after the date of issue, issued by
commercial banking institutions and money market or demand deposit accounts maintained at
commercial banking institutions, each of which is a member of the Federal Reserve System and has a
combined capital and surplus and undivided profits of not less than $500,000,000; (iv) repurchase
agreements having maturities of not more than 90 days from the date of acquisition which are
entered into with banks included in the commercial banking institutions described in clause (iii)
above and which are secured by readily marketable direct obligations of the United States
Government or any agency thereof, (v) money market accounts maintained with mutual funds having
assets in excess of $2,500,000,000; and (vi) tax exempt securities rated A or better by Moody’s or
A+ or better by Standard & Poor’s.

“Permitted Liens” means:

(a) Liens securing the Obligations;

(b) Liens for taxes, assessments, levies, and governmental charges the payment of
which is not required under Section 7.01(c);

(c) Liens imposed by law, such as carriers’, warehousemen’s, mechanics’,
materialmen’s and other similar Liens arising in the ordinary course of business and securing
obligations (other than Indebtedness for borrowed money) that are not overdue by more than 30 days
or are being contested in good faith and by appropriate proceedings promptly initiated and
diligently conducted, and a reserve or other appropriate provision, if any, as shall be required by
GAAP shall have been made therefor;

(d) Liens described on Schedule 7.02(a), but not the extension of coverage
thereof to other property or assets;

(e) Liens arising under Capitalized Leases or securing purchase money Indebtedness
permitted under the definition of Permitted Indebtedness; provided, however, that
(A) no such Lien shall extend to or cover any other property of any Loan Party or any of its
Subsidiaries, and (B) the principal amount of the Indebtedness secured by any such Lien shall not
exceed the lesser of 80% of the fair market value or the cost of the property so held or acquired;

(f) deposits and pledges of cash securing (i) obligations incurred in respect of
workers’ compensation, unemployment insurance or other forms of governmental insurance or benefits,
(ii) the performance of bids, tenders, leases, contracts (other than for the payment of money) and
statutory obligations or (iii) obligations on surety or appeal bonds, but only to the extent such
deposits or pledges are made or otherwise arise in the ordinary course of business and secure
obligations not past due;

(g) easements, zoning restrictions and similar encumbrances on real property and
minor irregularities in the title thereto that do not (i) secure obligations for the payment of
money or (ii) materially impair the value of such property or its use by any Loan Party or any of
its Subsidiaries in the normal conduct of such Person’s business;

(h) leases or subleases granted to other Persons not materially interfering with the
conduct of the business of the Borrower or any of its Subsidiaries;

(i) precautionary financing statement filings regarding operating leases;

(j) Liens arising out of the existence of judgments or awards not giving rise to an
Event of Default;

(k) statutory and common law landlords’ liens under leases to which the Borrower or
any of its Subsidiaries is a party;

(l) Liens securing the Foothill Indebtedness permitted under clause (h) of the
definition of Permitted Indebtedness; and

(m) Liens securing refinancing Indebtedness permitted to be incurred hereunder;
provided, that such Liens do not extend to any property or assets other than the property
or assets that served as collateral for the refinanced Indebtedness.

“Permitted Preferred Stock” means and refers to any Preferred Stock issued by the
Borrower (and not by one or more of its Subsidiaries) that is not Prohibited Preferred Stock.

“Person” means an individual, corporation, limited liability company, partnership,
association, joint-stock company, trust, unincorporated organization, joint venture or other
enterprise or entity or Governmental Authority.

“Post-Default Rate” means a rate of interest per annum equal to the rate of interest
otherwise in effect from time to time pursuant to the terms of this Agreement plus 2.0 percentage
points, or, if a rate of interest is not otherwise in effect, interest at the highest rate
specified herein for any Loan prior to the Event of Default plus 2.0 percentage points.

“Preferred Stock” means, as applied to the Capital Stock of any Person, the Capital
Stock of any class or classes (however designated) that is preferred with respect to the payment of
dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such Person, over shares of Capital Stock of any other class of such Person.

“Prepayment Premium” means, as of any date of determination, an amount equal to (a)
during the period from and after the Effective Date up to the date that is the first anniversary of
the Effective Date, 2% times the portion of Term Loans being prepaid, (b) during the period from
and including the date that is the first anniversary of the Effective Date up to the date that is
the second anniversary of the Effective Date, 1% times the portion of Term Loans being prepaid, and
(c) during the period from and including the date that is the second anniversary of the Effective
Date up to the Final Maturity Date, zero.

“Prohibited Preferred Stock” means any Preferred Stock that by its terms is
mandatorily redeemable or subject to any other payment obligation (including any obligation to pay
dividends, other than dividends of shares of Preferred Stock of the same class and series payable
in kind or dividends of shares of common stock) on or before a date that is less than 2 years after
the Final Maturity Date, or, on or before the date that is less than 2 years after the Final
Maturity Date, is redeemable at the option of the holder thereof for cash or assets or securities
(other than distributions in kind of shares of Preferred Stock of the same class and series or of
shares of common stock).

“property” means any right or interest in or to property of any kind whatsoever,
whether real, personal or mixed and whether tangible or intangible.

“Pro Rata Share” means:

(a) with respect to a Lender’s obligation to make the Term Loan A and right to receive
payments of interest, fees, and principal with respect thereto, the percentage obtained by dividing
(i) such Lender’s Term Loan A Commitment, by (ii) the Total Term Loan A Commitment,
provided that if the Total Term Loan A Commitment has been reduced to zero, the numerator
shall be the aggregate unpaid principal amount of such Lender’s portion of the Term Loan A and the
denominator shall be the aggregate unpaid principal amount of the Term Loan A,

(b) with respect to a Lender’s obligation to make the Term Loan B and right to receive
payments of interest, fees, and principal with respect thereto, the percentage obtained by dividing
(i) such Lender’s Term Loan B Commitment, by (ii) the Total Term Loan B Commitment,
provided that if the Total Term Loan B Commitment has been reduced to zero, the numerator
shall be the aggregate unpaid principal amount of such Lender’s portion of the Term Loan B and the
denominator shall be the aggregate unpaid principal amount of the Term Loan B, and

(c) with respect to all other matters (including the indemnification obligations arising under
Section 10.05) regarding a Lender, the percentage obtained by dividing (i) the sum of the
unpaid principal amount of such Lender’s Term Loan A and the unpaid principal amount of such
Lender’s portion of the Term Loan B, by (ii) the sum of the aggregate unpaid principal amount of
the Term Loans.

“Purchase Price” means, with respect to either Acquisition, an amount equal to the sum
of (i) the aggregate consideration, whether cash, property or securities (including the fair market
value of any Capital Stock of any Loan Party issued in connection with such Acquisition), paid or
delivered by a Loan Party in connection with such Acquisition, plus (ii) the aggregate amount of
liabilities of the acquired business (net of current assets of the acquired business) that would be
reflected on a balance sheet (if such were to be prepared) of the Borrower and its Subsidiaries
after giving effect to such Acquisition.

“Qualified Cash” means, as of any date of determination, the amount of unrestricted
Cash and Cash Equivalents of the Borrower and its Subsidiaries that is subject to a control
agreement in favor of Collateral Agent and that is on deposit with banks, or in securities accounts
with securities intermediaries, or any combination thereof.

“Qualified Issuance” means a private placement of the Borrower’s common Capital Stock
consummated on or before the Term Loan B Funding Date which raises Net Cash Proceeds of not less
than $30,000,000.

“Rating Agencies” has the meaning specified therefor in Section 2.07.

“Reference Bank” means JPMorgan Chase Bank, N.A., its successors or any other
commercial bank designated by the Administrative Agent to the Borrower from time to time.

“Reference Rate” means the greater of (a) 7.5 percent per annum, and (b) the rate of
interest publicly announced by the Reference Bank in New York, New York from time to time as its
reference rate, base rate or prime rate. The reference rate, base rate or prime rate is determined
from time to time by the Reference Bank as a means of pricing some loans to its borrowers and
neither is tied to any external rate of interest or index nor necessarily reflects the lowest rate
of interest actually charged by the Reference Bank to any particular class or category of
customers. Each change in the Reference Rate shall be effective from and including the date such
change is publicly announced as being effective.

“Register” has the meaning specified therefor in Section 12.07(d).

“Registered Loan” has the meaning specified therefor in Section 12.07(d).

“Regulation T”, “Regulation U” and “Regulation X” mean, respectively,
Regulations T, U and X of the Board or any successor, as the same may be amended or supplemented
from time to time.

“Reinvestment Eligible Funds” means (a) Net Cash Proceeds which, but for the
application of Section 2.05(d)(ii), would be required to be used to prepay the Loans
pursuant to Section 2.05(c)(v) or (b) Extraordinary Receipts consisting of insurance or
condemnation proceeds paid as the result of loss, destruction, casualty, condemnation or
expropriation which, but for the application of Section 2.05(d)(ii), would be required to
be used to prepay the Loans pursuant to Section 2.05(c)(vi).

“Reinvestment Notice” has the meaning specified therefor in Section 2.05(d).

“Related Fund” means a fund, money market account, investment account or other account
managed by a Lender or an Affiliate of such Lender or its investment manager.

“Related Party Assignment” has the meaning specified therefor in Section
12.07(b).

“Related Party Register” has the meaning specified therefor in Section
12.07(d).

“Release” means any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, seeping, migrating, dumping or disposing of any
Hazardous Material (including the abandonment or discarding of barrels, containers and other closed
receptacles containing any Hazardous Material) into the indoor or outdoor environment, including
the movement of Hazardous Materials through or in the ambient air, soil, surface or ground water,
or property.

“Remedial Action” means all actions taken to (i) clean up, remove, remediate, contain,
treat, monitor, assess, evaluate or in any other way address Hazardous Materials in the indoor or
outdoor environment; (ii) prevent or minimize a Release or threatened Release of Hazardous
Materials so they do not migrate or endanger or threaten to endanger public health or welfare or
the indoor or outdoor environment; (iii) perform pre-remedial studies and investigations and
post-remedial operation and maintenance activities; or (iv) any other actions authorized by
42 U.S.C. § 9601.

“Reportable Event” means an event described in Section 4043 of ERISA (other than an
event not subject to the provision for 30-day notice to the PBGC under the regulations promulgated
under such Section).

“Required Lenders” means Lenders whose Pro Rata Shares (calculated under clause (c) of
the definition thereof) aggregate more than 50%.

“Reserve Percentage” means, on any day, for any Lender, the maximum percentage
prescribed by the Board (or any successor Governmental Authority) for determining the reserve
requirements (including any basic, supplemental, marginal, or emergency reserves) that are in
effect on such date with respect to eurocurrency funding (currently referred to as “eurocurrency
liabilities”) of that Lender, but so long as such Lender is not required or directed under
applicable regulations to maintain such reserves, the Reserve Percentage shall be zero.

“SEC” means the Securities and Exchange Commission or any other similar or successor
agency of the Federal government administering the Securities Act.

“Securities Act” means the Securities Act of 1933, as amended, or any similar Federal
statute, and the rules and regulations of the SEC thereunder, all as the same shall be in effect
from time to time.

“Securitization” has the meaning specified therefor in Section 2.07.

“Securitization Parties” has the meaning specified therefor in Section 2.07.

“Security Agreement” means a Security Agreement, in form and substance reasonably
satisfactory to Collateral Agent, made by a Loan Party in favor of the Collateral Agent for the
benefit of the Agents and the Lenders, securing the Obligations and delivered to the Collateral
Agent.

“Settlement Period” has the meaning specified therefor in Section 2.02(d)(i)
hereof.

“Solvent” means, with respect to any Person on a particular date, that on such date
(i) the fair value of the property of such Person is not less than the total amount of the
liabilities of such Person, (ii) the present fair salable value of the assets of such Person is not
less than the amount that will be required to pay the probable liability of such Person on its
existing debts as they become absolute and matured, (iii) such Person is able to realize upon its
assets and pay its debts and other liabilities, contingent obligations and other commitments as
they mature in the normal course of business, (iv) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts
and liabilities mature, and (v) such Person is not engaged in business or a transaction, and is not
about to engage in business or a transaction, for which such Person’s property would constitute
unreasonably small capital.

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

“Subordinated Debt” means Indebtedness of the Borrower that is on terms and conditions
(including payment terms, interest rates, covenants, remedies, defaults and other material terms)
reasonably satisfactory to the Collateral Agent and the Required Lenders and which has been
expressly subordinated in right of payment to all Indebtedness of the Borrower under the Loan
Documents by the execution and delivery of a subordination agreement, in form and substance
reasonably satisfactory to the Collateral Agent.

“Subsidiary” means, with respect to any Person at any date, any corporation, limited
or general partnership, limited liability company, trust, estate, association, joint venture or
other business entity (i) the accounts of which would be consolidated with those of such Person in
such Person’s consolidated financial statements if such financial statements were prepared in
accordance with GAAP or (ii) of which more than 50% of (A) the outstanding Capital Stock having (in
the absence of contingencies) ordinary voting power to elect a majority of the board of directors
or other managing body of such Person, (B) in the case of a partnership or limited liability
company, the interest in the capital or profits of such partnership or limited liability company or
(C) in the case of a trust, estate, association, joint venture or other entity, the beneficial
interest in such trust, estate, association or other entity business is, at the time of
determination, owned or controlled directly or indirectly through one or more intermediaries, by
such Person; provided, however, that on and prior to the Effective Date and prior
to the consummation of the Annaco Acquisition, all references herein or in any other Loan Document
to the Borrower and its Subsidiaries shall be determined as if the assets of Annaco have been
acquired pursuant to the Annaco Acquisition; provided further, however, that on the
date on which Totalcat Acquisition is to be consummated, but immediately prior to the consummation
thereof, all references herein or in any other Loan Document to the Borrower and its Subsidiaries
shall be determined as if the Capital Stock of Totalcat has been acquired pursuant to the Totalcat
Acquisition; provided further, however, that so long as Beacon is not a Guarantor
under this Agreement, it shall not be deemed to be a Subsidiary of the Borrower for any purpose
under this Agreement.

“Succeeding Fiscal Year” has the meaning specified therefor in Section
7.03(e).

“Taxes” has the meaning specified therefor in Section 2.08(a).

“Term Loans” means the Term Loan A and the Term Loan B.

“Term Loan A” has the meaning specified therefor in Section 2.01(a)(i).

“Term Loan A Closing Fee” has the meaning specified therefor in Section
2.06(a)(i).

“Term Loan A Commitment” means, with respect to each Lender, the commitment of such
Lender to make its portion of the Term Loan A to the Borrower in the amount set forth in
Schedule C-1 hereto, as the same may be terminated or reduced from time to time in
accordance with the terms of this Agreement.

“Term Loan A Funds Flow Agreement” means that certain Term Loan A Funds Flow
Agreement, dated of even date herewith, by and among Administrative Agent, the Lenders and each
Loan Party.

“Term Loan A Lender” means a Lender with a Term Loan A Commitment or a portion of the
Term Loan A.

“Term Loan A Obligations” means any Obligations with respect to the Term Loan A
(including the principal thereof, the interest thereon, and the fees and expenses specifically
related thereto).

“Term Loan B” has the meaning specified therefor in Section 2.01(a)(ii).

“Term Loan B Closing Fee” has the meaning specified therefor in Section
2.06(a)(ii).

“Term Loan B Commitment” means, with respect to each Lender, the commitment of such
Lender to make its portion of the Term Loan B to the Borrower in the amount set forth in
Schedule C-1 hereto, as the same may be terminated or reduced from time to time in
accordance with the terms of this Agreement.

“Term Loan B Funding Date” means the date on which all of the conditions precedent set
forth in Section 5.02 are first satisfied or waived and the borrowing of the Term Loan B shall have
occurred.

“Term Loan B Funding Period” means the period from and including the Effective Date to
the date that is six months from the Effective Date.

“Term Loan B Funds Flow Agreement” means that certain Term Loan B Funds Flow
Agreement, dated of the Term Loan B Funding Date, by and among Administrative Agent, the Lenders
and each Loan Party.

“Term Loan B Lender” means a Lender with a Term Loan B Commitment or a portion of the
Term Loan B.

“Term Loan B Obligations” means any Obligations with respect to the Term Loan B
(including the principal thereof, the interest thereon, and the fees and expenses specifically
related thereto).

“Termination Event” means (i) a Reportable Event with respect to any Employee Plan,
(ii) any event that causes any Loan Party or any of its ERISA Affiliates to incur liability under
Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or
Section 4971 or 4975 of the IRC, (iii) the filing of a notice of intent to terminate an Employee
Plan or the treatment of an Employee Plan amendment as a termination under Section 4041 of ERISA,
(iv) the institution of proceedings by the PBGC to terminate an Employee Plan, or (v) any other
event or condition which might constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Employee Plan.

“Title Insurance Policy” means a mortgagee’s loan policy, in form and substance
satisfactory to the Collateral Agent, together with all endorsements made from time to time
thereto, issued by or on behalf of a title insurance company satisfactory to the Collateral Agent,
insuring the Lien created by a Mortgage in an amount and on terms satisfactory to the Collateral
Agent, delivered to the Collateral Agent.

“Totalcat” means Totalcat Group, Inc., a Delaware corporation.

“Totalcat Acquisition” means the acquisition by the Borrower of 82.5% of the issued
and outstanding Capital Stock of Totalcat, together with an option to purchase the remaining
Capital Stock of Totalcat, all in accordance with the terms of the Totalcat Acquisition Agreement.

“Totalcat Acquisition Agreement” means that certain Stock Purchase Agreement, dated as
of June 25, 2007, by and among each of the stockholders of Totalcat signatory thereto and the
Borrower.

“Totalcat Acquisition Documents” means, collectively, the Totalcat Acquisition
Agreement and all other documents and agreements executed and delivered in connection therewith.

“Total Commitment” means the sum of the Total Term Loan A Commitment and the Total
Term Loan B Commitment.

“Total Term Loan A Commitment” means the sum of the amounts of the Lenders’ Term Loan
A Commitments, which amount is $32,000,000 as of the Effective Date.

“Total Term Loan B Commitment” means the sum of the amounts of the Lenders’ Term Loan
B Commitments, which amount is $18,000,000 as of the Term Loan B Funding Date.

"Transferee” has the meaning specified therefor in Section 2.08(a).

“Tranzact” means Tranzact Corporation, a Delaware corporation.

“Tranzact Notes” means, collectively, (i) that certain promissory note, dated May 31,
2007, by the Borrower in favor of William F. Zimmerman in the original principal amount of
$624,155.92, and (ii) that certain promissory note, dated May 31, 2007, by Tranzact in favor or
William F. Zimmerman in the original principal amount of $1,479,350.85.

“TTM EBITDA” means, as of any date of determination and with respect to a Person, the
Consolidated EBITDA of such Person and its Subsidiaries for the period of 12 consecutive months
most recently ended.

“United Alloys Non-Competition Agreement” means that certain Non-Competition Agreement
dated as of October 10, 2002, by and among Metalico Buffalo and each of United Alloys & Steel
Corporation, Peter A Linder and Edward Linder.

“United Alloys Seller Note” means a promissory note, dated October 1, 2002, in the
original principal amount of $451,678 (with an outstanding principal balance of $315,123 as of May
31, 2007), made by Metalico Buffalo to the order of United Alloys & Steel Corporation.

“WARN” has the meaning specified therefor in Section 6.01(z).

Section 1.02 Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the context may require,
any pronoun shall include the corresponding masculine, feminine and neuter forms. The words
“include,” “includes” and “including” shall be deemed to be followed by the phrase “without
limitation,” whether or not so expressly stated in each such instance and the term “or” has, except
where otherwise indicated, the inclusive meaning represented by the phrase “and/or.” The word
“will” shall be construed to have the same meaning and effect as the word “shall.” Unless the
context requires otherwise, (a) any definition of or reference to any agreement, instrument or
other document herein shall be construed as referring to such agreement, instrument or other
document as from time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person’s successors and assigns, (c) the
words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer
to this Agreement in its entirety and not to any particular provision hereof, (d) all references
herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words “asset” and “property”
shall be construed to have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and contract rights.
References in this Agreement to “determination” by any Agent include estimates honestly made by
such Agent (in the case of quantitative determinations) and beliefs honestly held by such Agent (in
the case of qualitative determinations).

Section 1.03 Accounting and Other Terms. Unless otherwise expressly
provided herein, each accounting term used herein shall have the meaning given it under GAAP. All
terms used in this Agreement which are defined in Article 8 or Article 9 of the Code and which are
not otherwise defined herein shall have the same meanings herein as set forth therein.

Section 1.04 Time References. Unless otherwise indicated herein, all
references to time of day refer to Eastern Standard Time or Eastern daylight saving time, as in
effect in New York City on such day. For purposes of the computation of a period of time from a
specified date to a later specified date, the word “from” means “from and including” and the words
“to” and “until” each means “to but excluding”; provided, however, that with
respect to a computation of fees or interest payable to any Agent or any Lender , such period shall
in any event consist of at least one full day.

ARTICLE II

THE LOANS

Section 2.01 Commitments. (a) Subject to the terms and conditions and
relying upon the representations and warranties herein set forth:

(i) each Term Loan A Lender severally agrees to make a term loan (collectively, the
“Term Loan A”) to the Borrower on the Effective Date, in an aggregate principal amount
equal to the amount of such Lender’s Term Loan A Commitment.

(ii) during the Term Loan B Funding Period, each Term Loan B Lender severally agrees
to make a term loan (collectively, the “Term Loan B”) to the Borrower on the Term Loan B
Funding Date, in an aggregate principal amount equal to the amount of such Lender’s Term Loan
Commitment.

(b) Notwithstanding the foregoing:

(i) The aggregate principal amount of the Term Loan A made on the Effective Date
shall not exceed the Total Term Loan A Commitment. Any principal amount of the Term Loan A that is
repaid or prepaid may not be reborrowed.

(ii) The aggregate principal amount of the Term Loan B made on the Term Loan B
Funding Date shall not exceed the Total Term Loan B Commitment. Any principal amount of the Term
Loan B that is repaid or prepaid may not be reborrowed.

Section 2.02 Making the Loans. (a) The Borrower shall give the
Administrative Agent prior telephonic notice (immediately confirmed in writing, in substantially
the form of Exhibit 2.01(b)(ii) hereto (a “Notice of Borrowing”)), not later than
12:00 noon (New York City time) on the date which is 3 Business Days prior to the date of the
proposed Loan (or such shorter period as the Administrative Agent is willing, in its sole
discretion, to accommodate from time to time). Such Notice of Borrowing shall be irrevocable and
shall specify (i) the principal amount of the proposed Loan, (ii) the proposed borrowing date,
which must be a Business Day, and must be (x) with respect to Term Loan A, the Effective Date, and
(y) with respect to Term Loan B, the Term Loan B Funding Date, (iii) whether the proposed Loan is
to be a Reference Rate Loan or a LIBOR Rate Loan, and (iv) in the case of a LIBOR Rate Loan, the
initial Interest Period to be applicable thereto, which shall be a period contemplated by the
definition of the term “Interest Period”. If no election as to the type of Loan is specified, then
the requested Loan shall be a Reference Rate Loan. If no Interest Period is specified with respect
to any requested LIBOR Rate Loan, then the Borrower shall be deemed to have selected an Interest
Period of one month’s duration. The Administrative Agent and the Lenders may act without liability
upon the basis of written, telecopied or telephonic notice believed by the Administrative Agent in
good faith to be from the Borrower (or from any Authorized Officer thereof designated in writing
purportedly from the Borrower to the Administrative Agent). The Borrower hereby waives the right
to dispute the Administrative Agent’s record of the terms of any such telephonic Notice of
Borrowing. The Administrative Agent and each Lender shall be entitled to rely conclusively on any
Authorized Officer’s authority to request a Loan on behalf of the Borrower until the Administrative
Agent receives written notice to the contrary. The Administrative Agent and the Lenders shall have
no duty to verify the authenticity of the signature appearing on any written Notice of Borrowing.

(b) Each Notice of Borrowing pursuant to this Section 2.02 shall be
irrevocable and the Borrower shall be bound to make a borrowing in accordance therewith.

(c) All Loans under this Agreement shall be made by the Lenders simultaneously on
the funding date applicable thereto and proportionately to their Pro Rata Shares of the Total Term
Loan A Commitment and the Total Term Loan B Commitment, as the case may be, it being understood
that no Lender shall be responsible for any default by any other Lender in that other Lender’s
obligations to make a Loan requested hereunder, nor shall the Commitment of any Lender be increased
or decreased as a result of the default by any other Lender in that other Lender’s obligation to
make a Loan requested hereunder, and each Lender shall be obligated to make the Loans required to
be made by it by the terms of this Agreement regardless of the failure by any other Lender.

Section 2.03 Repayment of Loans; Evidence of Debt.

(a) The outstanding principal amount of Term Loan A and Term Loan B shall be due and
payable on the Final 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, including the amounts of principal and interest payable and paid to such Lender
from time to time hereunder.

(c) The Administrative Agent shall maintain accounts in which it shall record (i)
the amount of each Loan made hereunder, (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 for the account of the Lenders and
each Lender’s share thereof.

(d) The entries made in the accounts maintained pursuant to paragraphs (b) or
(c) of this Section 2.03 shall be prima facie evidence of the existence
and amounts of the obligations recorded therein; provided that the failure of any Lender or
the Administrative Agent to maintain such accounts or any error therein shall not in any manner
affect the obligation of the Borrower to repay the Loans in accordance with the terms of this
Agreement.

(e) Any Lender may request that Loans made by it be evidenced by a promissory note.
In such event, the Borrower shall execute and deliver to such Lender a promissory note payable to
the order of such Lender (or, if requested by such Lender, to such Lender and its registered
assigns) in a form furnished by the Collateral Agent and reasonably satisfactory to the Borrower.
Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 12.07) be represented by one or more
promissory notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).

Section 2.04 Interest.

(a) Term Loan A. The Term Loan A shall bear interest on the principal
amount thereof from time to time outstanding, from the date of the making of the Term Loan A until
such principal amount is repaid, as follows: (i) if the relevant portion of the Term Loan A is a
LIBOR Rate Loan, at a rate per annum equal to the LIBOR Rate plus 6.5 percentage points, and (ii)
otherwise, at a rate per annum equal to the Reference Rate plus 3.5 percentage points.

(b) Term Loan B. The Term Loan B shall bear interest on the principal
amount thereof from time to time outstanding, from the date of the making of the Term Loan B until
such principal amount is repaid, as follows: (i) if the relevant portion of the Term Loan B is a
LIBOR Rate Loan, at a rate per annum equal to the LIBOR Rate plus 6.5 percentage points, and (ii)
otherwise, at a rate per annum equal to the Reference Rate plus 3.5 percentage points.

(c) Default Interest. To the extent permitted by law, upon the occurrence
and during the continuance of an Event of Default, the principal of, and all accrued and unpaid
interest on, all Loans, fees, indemnities, or any other Obligations of the Loan Parties under this
Agreement and the other Loan Documents, shall bear interest, from the date such Event of Default
occurred until the date such Event of Default is cured or waived in writing in accordance herewith,
at a rate per annum equal at all times to the Post-Default Rate. All interest at the Post-Default
Rate shall be payable on demand.

(d) LIBOR Option.

(i) Interest and Interest Payment Dates. In lieu of having interest charged
at the rate based upon the Reference Rate, the Borrower shall have the option (the “LIBOR
Option”) to have interest on all or a portion of the Loans be charged at a rate of interest
based upon the LIBOR Rate. Interest on LIBOR Rate Loans shall be payable on the earliest of (A)
the last day the Interest Period applicable thereto; provided, however, that,
subject to the following clauses (B) and (C), in the case of any Interest Period greater than 1
month in duration, interest shall be payable at 1 month intervals after the commencement of the
applicable Interest Period and on the last day of such Interest Period, (B) the occurrence of an
Event of Default in consequence of which the Required Lenders or Collateral Agent on behalf thereof
elect to accelerate the maturity of all or any portion of the Obligations, or (C) termination of
this Agreement pursuant to the terms hereof. On the last day of each applicable Interest Period,
unless the Borrower properly has exercised the LIBOR Option with respect thereto, the interest rate
applicable to such LIBOR Rate Loan automatically shall convert to the rate of interest then
applicable to Reference Rate Loans of the same type hereunder. At any time that an Event of
Default has occurred and is continuing, the Borrower no longer shall have the option to request
that Loans bear interest at the LIBOR Rate and Administrative Agent shall have the right to convert
the interest rate on all outstanding LIBOR Rate Loans to the rate then applicable to Reference Rate
Loans hereunder.

(ii) LIBOR Election.

(A) The Borrower may, at any time and from time to time, so long as
no Event of Default has occurred and is continuing, elect to exercise the LIBOR
Option by notifying Administrative Agent prior to 11:00 a.m. (New York time) at
least 3 Business Days prior to the commencement of the proposed Interest Period (the
“LIBOR Deadline”). Notice of the Borrower’s election of the LIBOR Option
for a permitted portion of the Loans and an Interest Period pursuant to this Section
shall be made by delivery to Administrative Agent of a LIBOR Notice received by
Administrative Agent before the LIBOR Deadline. Promptly upon its receipt of each
such LIBOR Notice, Administrative Agent shall provide a copy thereof to each of the
Lenders having a Commitment of the type to which such LIBOR Notice relates.

(B) Each LIBOR Notice shall be irrevocable and binding on the
Borrower. In connection with each LIBOR Rate Loan, the Borrower shall indemnify,
defend, and hold Administrative Agent and the Lenders harmless against any loss,
cost, or expense incurred by Administrative Agent or any Lender as a result of (1)
the payment of any principal of any LIBOR Rate Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of Default),
(2) the conversion of any LIBOR Rate Loan other than on the last day of the Interest
Period applicable thereto, or (3) the failure to borrow, convert, continue or prepay
any LIBOR Rate Loan on the date specified in any LIBOR Notice delivered pursuant
hereto (such losses, costs, and expenses, collectively, “Funding Losses”).
Funding Losses shall, with respect to Administrative Agent or any Lender, be deemed
to equal the amount determined by Administrative Agent or such Lender to be the
excess, if any, of (x) the amount of interest that would have accrued on the
principal amount of such LIBOR Rate Loan had such event not occurred, at the LIBOR
Rate that would have been applicable thereto, for the period from the date of such
event to the last day of the then current Interest Period therefor (or, in the case
of a failure to borrow, convert or continue, for the period that would have been the
Interest Period therefor), minus (y) the amount of interest that would accrue on
such principal amount for such period at the interest rate which Administrative
Agent or such Lender would be offered were it to be offered, at the commencement of
such period, on Dollar deposits of a comparable amount and period in the London
interbank market. A certificate of Administrative Agent or a Lender delivered to
the Borrower setting forth any amount or amounts that Administrative Agent or such
Lender is entitled to receive pursuant to this Section shall be conclusive absent
manifest error.

(C) The Borrower shall have not more than 5 LIBOR Rate Loans in
effect at any given time. The Borrower only may exercise the LIBOR Option for LIBOR
Rate Loans of at least $1,000,000 and integral multiples of $100,000 in excess
thereof.

(iii) Conversion. The Borrower may convert LIBOR Rate Loans to Reference
Rate Loans at any time; provided, however, that in the event that LIBOR Rate Loans
are converted or prepaid on any date that is not the last day of the Interest Period applicable
thereto, including as a result of any automatic prepayment through the required application by
Administrative Agent of proceeds of Collateral in accordance with Section 4.04 or for any
other reason, including early termination of the term of this Agreement or acceleration of all or
any portion of the Obligations pursuant to the terms hereof, the Borrower shall indemnify, defend,
and hold Administrative Agent and the Lenders and their participants harmless against any and all
Funding Losses in accordance with subsection (ii) above.

(iv) Special Provisions Applicable to LIBOR Rate.

(A) The LIBOR Rate may be adjusted by Administrative Agent with
respect to any Lender on a prospective basis to take into account any additional or
increased costs to such Lender of maintaining or obtaining any eurodollar deposits
or increased costs due to changes in applicable law occurring subsequent to the
commencement of the then applicable Interest Period, including changes in tax laws
(except changes of general applicability in corporate income tax laws) and changes
in the reserve requirements imposed by the Board of Governors of the Federal Reserve
System (or any successor), excluding the Reserve Percentage, which additional or
increased costs would increase the cost of funding loans bearing interest at the
LIBOR Rate. In any such event, the affected Lender shall give the Borrower and
Administrative Agent notice of such a determination and adjustment and
Administrative Agent promptly shall transmit the notice to each other Lender and,
upon its receipt of the notice from the affected Lender, the Borrower may, by notice
to such affected Lender (1) require such Lender to furnish to the Borrower a
statement setting forth the basis for adjusting such LIBOR Rate and the method for
determining the amount of such adjustment, or (2) repay the LIBOR Rate Loans with
respect to which such adjustment is made (together with any amounts due under
subsection (ii)(B) above).

(B) In the event that any change in market conditions or any law,
regulation, treaty, or directive, or any change therein or in the interpretation of
application thereof, shall at any time after the date hereof, in the reasonable
opinion of any Lender, make it unlawful or impractical for such Lender to fund or
maintain LIBOR Rate Loans or to continue such funding or maintaining, or to
determine or charge interest rates at the LIBOR Rate, such Lender shall give notice
of such changed circumstances to Administrative Agent and the Borrower and
Administrative Agent promptly shall transmit the notice to each other Lender and (1)
in the case of any LIBOR Rate Loans of such Lender that are outstanding, the date
specified in such Lender’s notice shall be deemed to be the last day of the Interest
Period of such LIBOR Rate Loans, and interest upon the LIBOR Rate Loans of such
Lender thereafter shall accrue interest at the rate then applicable to Reference
Rate Loans, and (2) the Borrower shall not be entitled to elect the LIBOR Option
until such Lender determines that it would no longer be unlawful or impractical to
do so.

(v) No Requirement of Matched Funding. Anything to the contrary contained
herein notwithstanding, neither Administrative Agent, nor any Lender, nor any of their
participants, is required actually to acquire eurodollar deposits to fund or otherwise match fund
any Obligation as to which interest accrues at the LIBOR Rate. The provisions of this Section
shall apply as if each Lender or its participants had match funded any Obligation as to which
interest is accruing at the LIBOR Rate by acquiring eurodollar deposits for each Interest Period in
the amount of the LIBOR Rate Loans.

(e) Interest Payment in respect of Reference Rate Loans. Interest on each
Reference Rate Loan shall be payable monthly, in arrears, on the first day of each month,
commencing on the first day of the month following the month in which such Loan is made and at
maturity (whether upon demand, by acceleration or otherwise). The Borrower hereby authorizes the
Administrative Agent to, and the Administrative Agent may, from time to time, charge the Loan
Account pursuant to Section 4.02 with the amount of any interest payment due hereunder.

(f) General. All interest shall be computed on the basis of a year of 360
days for the actual number of days, including the first day but excluding the last day, elapsed.

Section 2.05 Reduction of Commitments; Prepayment of Loans.

(a) Reduction of Commitments.

(i) Term Loan A. The Total Term Loan A Commitment shall terminate upon the
making of the Term Loan A on the Effective Date.

(ii) Term Loan B. The Total Term Loan B Commitment shall terminate upon the
earlier of (a) the making of the Term Loan B on the Term Loan B Funding Date and (b) the expiration
of the Term Loan B Funding Period.

(b) Optional Prepayment.

(i) Term Loan A. The Borrower may, upon at least 3 Business Days’ prior
written notice to the Administrative Agent, prepay the principal of the Term Loan A, in whole or in
part. Each prepayment made pursuant to this Section 2.05(b)(i) shall be accompanied by (A)
the payment of accrued interest to the date of such payment on the amount prepaid and (B) the
Prepayment Premium applicable to the amount prepaid.

(ii) Term Loan B. The Borrower may, upon at least 3 Business Days’ prior
written notice to the Administrative Agent, prepay the principal of the Term Loan B, in whole or in
part. Each prepayment made pursuant to this Section 2.05(b)(ii) shall be accompanied by
(A) the payment of accrued interest to the date of such payment on the amount prepaid and (B) the
Prepayment Premium applicable to the amount prepaid.

(iii) Prepayment In Full. The Borrower may, upon at least 10 days prior
written notice to the Agents, terminate this Agreement by paying to the Administrative Agent, in
cash or other immediately available funds, the Obligations in full (other than unasserted
contingent indemnification obligations) and executing and delivering a general release in
connection with such payoff. If the Borrower has sent a notice of termination pursuant to this
clause (iii), then the Lenders’ obligations to extend credit hereunder shall terminate and the
Borrower shall be obligated to repay the Obligations in full (other than unasserted contingent
indemnification obligations) and execute and deliver a general release, on the date set forth as
the date of termination of this Agreement in such notice.

(c) Mandatory Prepayment.

(i) [intentionally omitted].

(ii) The Borrower will immediately prepay the outstanding principal amount of the
Term Loans in the event that the Foothill Loan Agreement is terminated for any reason;
provided, however, that if the Indebtedness under the Foothill Loan Agreement is
refinanced by another lender or lenders, this clause (ii) shall not require the immediate
prepayment of the outstanding amount of the Term Loans so long as (i) such refinancing is pursuant
to terms and conditions that are satisfactory to the Agents, such determination of satisfaction not
to be unreasonably withheld or delayed, (ii) such refinancing is pursuant to terms that are not
less favorable to the Loan Parties and the Lenders than the terms of the Indebtedness owed to
Foothill, (iii) such lender or lenders providing such refinancing Indebtedness (or an agent on
behalf thereof) enters into an intercreditor agreement with Collateral Agent substantially in the
form of Exhibit I-2, (iv) after giving effect to such refinancing, the amount of such
refinancing Indebtedness is not greater than the Maximum Priority First Lien Loan Amount, and (v)
concurrent with the execution and delivery of the loan documents relative to such refinancing, the
Loan Parties execute and deliver an acknowledgement that this clause (ii) shall thereafter be
applicable with respect to the refinancing Indebtedness.

(iii) [intentionally omitted].

(iv) [intentionally omitted].

(v) Immediately upon receipt of any proceeds of any Disposition by any Loan Party or
its Subsidiaries (other than a Permitted Disposition of the type described in clauses (a), (d), (e)
and (f) of the definition of Permitted Dispositions), the Borrower shall prepay the outstanding
principal amount of the Loans in an amount equal to (a) 100% of the Net Cash Proceeds received by
such Person in connection with such Disposition to the extent that the aggregate amount of Net Cash
Proceeds received by all Loan Parties and their Subsidiaries (and not paid to the Administrative
Agent as a prepayment of the Loans) shall exceed $500,000 for all such Dispositions in any Fiscal
Year, minus (b) the amount of such Net Cash Proceeds applied to the repayment of the Foothill
Indebtedness (such repayment to effect a permanent repayment of such Indebtedness (with a
commensurate and permanent reduction of the commitments thereunder), except in any case where the
prepayment results from the sale or other disposition of a Loan Party or a division of a Loan Party
and such sale includes Accounts or Inventory of such Loan Party, in which case a portion of the
prepaid amount equal to the book value of the Accounts and Inventory included in such sale or other
disposition shall be paid against the revolving credit facilities included in the Foothill Loan
Agreement (without effecting a permanent repayment thereof and without effecting a reduction in the
commitments thereunder) with the balance of the amount prepaid effecting a permanent repayment of
the Foothill Indebtedness (with a commensurate and permanent reduction of the commitments
thereunder). Nothing contained in this clause (v) shall permit any Loan Party or any of its
Subsidiaries to make a Disposition of any property other than a Permitted Disposition.

(vi) Upon the issuance or incurrence by any Loan Party or any of its Subsidiaries of
any Indebtedness (other than Indebtedness referred to in clauses (a) — (s) of the definition of
Permitted Indebtedness) or the sale or issuance by any Loan Party or any of its Subsidiaries of any
shares of its Capital Stock (exclusive of the Qualified Issuance and exclusive of amounts received
by the Loan Parties pursuant to the exercise of stock options issued to employees of the Loan
Parties pursuant to a stock option plan approved by the Board of Directors of the Borrower and only
to the extent that the Net Cash Proceeds received therefrom do not exceed $2,000,000 during any 12
month period), the Borrower shall prepay the Loans in an amount equal to (a) 100% of the Net Cash
Proceeds received by such Person in connection therewith, minus (b) the amount of such Net Cash
Proceeds applied to the permanent repayment of the Foothill Indebtedness (including, in the case of
amounts applied to revolving credit facilities, a permanent reduction in the commitments
thereunder). The provisions of this subsection (vi) shall not be deemed to be implied
consent to any such issuance, incurrence or sale otherwise prohibited by the terms and conditions
of this Agreement.

(vii) Upon the receipt by any Loan Party or any of its Subsidiaries of any
Extraordinary Receipts, the Borrower shall prepay the outstanding principal of the Loans in an
amount equal to (a) 100% of such Extraordinary Receipts, net of any reasonable expenses incurred in
collecting such Extraordinary Receipts, minus (b) the amount of such Net Cash Proceeds applied to
the permanent repayment of the Foothill Indebtedness (including, in the case of amounts applied to
revolving credit facilities, a permanent reduction in the commitments thereunder).

(d) Application of Payments.

(i) Each prepayment made pursuant to subsections (c)(v), (c)(vi), and
(c)(vii) above shall be applied, on a pro-rata basis, to the Term Loan B and to the Term Loan
A.

(ii) The foregoing to the contrary notwithstanding, Borrower shall not be required
to make a prepayment otherwise required pursuant to Section 2.05(c)(v) or Section
2.05(c)(vi) with Reinvestment Eligible Funds so long as: (A) no Default or Event of Default has
occurred and is continuing on the date such Person receives such Reinvestment Eligible Funds or on
the date such amounts are to be released to Borrower pursuant to this Section 2.05(d)(ii),
(B) the Borrower delivers a notice (a “Reinvestment Notice”) on or prior to the date that
the applicable Person receives the monies constituting such Reinvestment Eligible Funds notifying
the Agents of the intent of the applicable Person to use such Reinvestment Eligible Funds (1) to
repair, restore, or replace the assets that were the subject of the Disposition, casualty or
condemnation giving rise to such amounts with assets of equal or greater fair market value which
will be useful in the conduct of their business in accordance with past practice, (2) within the
period specified in such notice, which period shall not exceed the earlier of (x) 180 days after
the receipt of such Reinvestment Eligible Funds by the applicable Loan Party or its Subsidiary and
(y) the Final Maturity Date, and (C) pending the reinvestment described in clause (B)(1) above,
such Reinvestment Eligible Amounts are deposited in a cash collateral account over which Collateral
Agent (on behalf of the Lenders) has a perfected second (junior only to Foothill) priority Lien.
If all or any portion of such Reinvestment Eligible Funds are not used in accordance with the
preceding sentence within the period specified in the Reinvestment Notice, the remaining portion
shall be applied to the Loans in accordance with Section 2.05(d) on the last day of such
specified period.

(e) Interest and Fees. Any prepayment made pursuant to this
Section 2.05 shall be accompanied by the payment of accrued interest on the principal
amount being prepaid to the date of prepayment, and if such prepayment would reduce the amount of
the outstanding Loans to zero, such prepayment shall be accompanied by the payment of all fees
accrued to such date pursuant to Section 2.06.

(f) Cumulative Prepayments. Except as otherwise expressly provided in this
Section 2.05, payments with respect to any subsection of this Section 2.05 are in
addition to payments made or required to be made under any other subsection of this
Section 2.05.

Section 2.06 Fees.

(a) Closing Fees.

(i) On the Effective Date, the Borrower shall pay to the Administrative Agent for
the account of the Lenders, in accordance with their Pro Rata Shares, a non-refundable closing fee
with respect to the Term Loan A (the “Term Loan A Closing Fee”) in an amount equal to
$640,000.

(ii) On the Term Loan B Funding Date, the Borrower shall pay to the Administrative
Agent for the account of the Lenders, in accordance with their Pro Rata Shares, a non-refundable
closing fee with respect to the Term Loan B (the “Term Loan B Closing Fee”) in an amount
equal to $360,000.

(b) Loan Servicing Fee. From and after the Effective Date and until the
later of (i) the Final Maturity Date and (ii) the date on which all Obligations are paid in full,
the Borrower shall pay to the Administrative Agent for the account of the Collateral Agent, a
non-refundable loan servicing fee (the “Loan Servicing Fee”) equal to $4,200 each month,
which shall be payable on the Effective Date (payable ratably based on the number of days remaining
in the calendar month in which the Effective Date occurs) and monthly in advance thereafter on the
first day of each calendar month commencing on August 1, 2007.

Section 2.07 Securitization. The Borrower hereby acknowledges that the
Lenders and their Affiliates may sell or securitize the Loans (a “Securitization”) through
the pledge of the Loans as collateral security for loans to the Lenders or their Affiliates or
through the sale of the Loans or the issuance of direct or indirect interests in the Loans, which
loans to the Lenders or their Affiliates or direct or indirect interests will be rated by Moody’s,
Standard & Poor’s or one or more other rating agencies (the “Rating Agencies”). The
Borrower shall cooperate with the Lenders and their Affiliates to effect the Securitization
including by (a) amending this Agreement and the other Loan Documents, and executing such
additional documents, as reasonably requested by the Lenders in connection with the Securitization,
provided that (i) any such amendment or additional documentation does not impose
material additional costs on the Borrower and (ii) any such amendment or additional documentation
does not materially adversely affect the rights, or materially increase the obligations, of the
Borrower under the Loan Documents or change or affect in a manner adverse to the Borrower the
financial terms of the Loans, (b) providing such information as may be reasonably requested by the
Lenders in connection with the rating of the Loans or the Securitization, and (c) providing in
connection with any rating of the Loans a certificate (i) agreeing to indemnify the Lenders and
their Affiliates, any of the Rating Agencies, or any party providing credit support or otherwise
participating in the Securitization (collectively, the “Securitization Parties”) for any
losses, claims, damages or liabilities (the “Liabilities”) to which the Lenders, their
Affiliates or such Securitization Parties may become subject insofar as the Liabilities arise out
of or are based upon any untrue statement or alleged untrue statement of any material fact
contained in any Loan Document or in any writing delivered by or on behalf of any Loan Party to any
Agent or Lender in connection with any Loan Document or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated therein, or necessary in
order to make the statements therein, in light of the circumstances under which they were made, not
misleading, and such indemnity shall survive any transfer by the Lenders or their successors or
assigns of the Loans and (ii) agreeing to reimburse the Agents, the Lenders and their Affiliates
for any legal or other expenses reasonably incurred by such Persons in connection with defending
the Liabilities.

Section 2.08 Taxes.  

(a) Any and all payments by any Loan Party hereunder or under any other Loan Document shall be
made free and clear of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding
taxes imposed on the net income of any Agent or any Lender (or any transferee or assignee thereof,
including a participation holder (any such entity, a “Transferee”)) by the jurisdiction in
which such Person is organized or has its principal lending office (all such nonexcluded taxes,
levies, imposts, deductions, charges withholdings and liabilities, collectively or individually,
“Taxes”). If any Loan Party shall be required to deduct any Taxes from or in respect of
any sum payable hereunder to any Agent or any Lender (or any Transferee), (i) the sum payable shall
be increased by the amount (an “additional amount”) necessary so that after making all
required deductions (including deductions applicable to additional sums payable under this
Section 2.08) such Agent or such Lender (or such Transferee) shall receive an amount equal
to the sum it would have received had no such deductions been made, (ii) such Loan Party shall make
such deductions and (iii) such Loan Party shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.

(b) In addition, each Loan Party agrees to pay to the relevant Governmental Authority in
accordance with applicable law any present or future stamp or documentary taxes or any other excise
or property taxes, charges or similar levies that arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect to, this Agreement or any other
Loan Document (“Other Taxes”). Each Loan Party shall deliver to each Agent and each Lender
official receipts in respect of any Taxes or Other Taxes payable hereunder promptly after payment
of such Taxes or Other Taxes.

(c) The Loan Parties hereby jointly and severally indemnify and agree to hold each Agent and
each Lender harmless from and against Taxes and Other Taxes (including, Taxes and Other Taxes
imposed on any amounts payable under this Section 2.08) paid by such Person, whether or not
such Taxes or Other Taxes were correctly or legally asserted. Such indemnification shall be paid
within 10 days from the date on which any such Person makes written demand therefore specifying in
reasonable detail the nature and amount of such Taxes or Other Taxes.

(d) Each Lender that is organized under the laws of a jurisdiction outside the United States
(a “Non-U.S. Lender”) agrees that it shall, no later than the Effective Date (or, in the
case of a Lender which becomes a party hereto pursuant to Section 12.07 after the Effective
Date, promptly after the date upon which such Lender becomes a party hereto) deliver to the Agents
(or, in the case of a participant, to the Lender granting the participation only) a properly
completed and duly executed copy of either U.S. Internal Revenue Service Form W-8BEN, W-8ECI or
W-8IMY or any subsequent versions thereof or successors thereto, in each case claiming complete
exemption from, or reduced rate of, U.S. Federal withholding tax and payments of interest
hereunder. In addition, in the case of a Non-U.S. Lender claiming exemption from U.S. Federal
withholding tax under Section 871(h) or 881(c) of the Internal Revenue Code, such Non-U.S. Lender
hereby represents to the Agents and the Borrower that such Non-U.S. Lender is not a bank for
purposes of Section 881(c) of the Internal Revenue Code, is not a 10-percent shareholder (within
the meaning of Section 871(h)(3)(B) of the Internal Revenue Code) of the Borrower and is not a
controlled foreign corporation related to the Borrower (within the meaning of Section 864(d)(4) of
the Internal Revenue Code), and such Non-U.S. Lender agrees that it shall promptly notify the
Agents in the event any such representation is no longer accurate. Such forms shall be delivered
by each Non-U.S. Lender on or before the date it becomes a party to this Agreement and on or before
the date, if any, such Non-U.S. Lender changes its applicable lending office by designating a
different lending office (a “New Lending Office”). In addition, such Non-U.S. Lender shall
deliver such forms within 20 days after receipt of a written request therefor from any Agent, the
assigning Lender or the Lender granting a participation, as applicable. Notwithstanding any other
provision of this Section 2.08, a Non-U.S. Lender shall not be required to deliver any form
pursuant to this Section 2.08(d) that such Non-U.S. Lender is not legally able to deliver.

(e) The Loan Parties shall not be required to indemnify any Non-U.S. Lender, or pay any
additional amounts to any Non-U.S. Lender, in respect of United States Federal withholding tax
pursuant to this Section 2.08 to the extent that (i) the obligation to withhold amounts with
respect to United States Federal withholding tax existed on the date such Non-U.S. Lender became a
party to this Agreement (or, in the case of a Transferee that is a participation holder, on the
date such participation holder became a Transferee hereunder) or, with respect to payments to a New
Lending Office, the date such Non-U.S. Lender designated such New Lending Office with respect to a
Loan; provided, however, that this clause (i) shall not apply to the extent the indemnity payment
or additional amounts any Transferee, or Lender (or Transferee) through a New Lending Office, would
be entitled to receive (without regard to this clause (i)) do not exceed the indemnity payment or
additional amounts that the Person making the assignment, participation or transfer to such
Transferee, or Lender (or Transferee) making the designation of such New Lending Office, would have
been entitled to receive in the absence of such assignment, participation, transfer or designation,
or (ii) the obligation to pay such additional amounts would not have arisen but for a failure by
such Non-U.S. Lender to comply with the provisions of clause (d) above.

(f) The obligations of the Loan Parties under this Section 2.08 shall survive the
termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

ARTICLE III

[INTENTIONALLY OMITTED]

ARTICLE IV

FEES, PAYMENTS AND OTHER COMPENSATION

Section 4.01 Audit and Collateral Monitoring Fees. The Borrower
acknowledges that pursuant to Section 7.01(f), representatives of the Agents may visit any
Loan Party or conduct audits, inspections or field examinations of any Loan Party and valuations or
appraisals of any or all of the Collateral or business or enterprise valuations of the Loan Parties
at any time and from time to time in a manner so as to not unduly disrupt the business of such Loan
Party. The Borrower agrees to pay (i) $1,000 per day per examiner plus the examiner’s
out-of-pocket costs and reasonable expenses incurred in connection with all such visits, audits,
inspections, valuations, and field examinations and (ii) the cost of all audits, appraisals and
business valuations (including enterprise valuation appraisals) conducted by third party auditors
or appraisers on behalf of the Agents.

Section 4.02 Payments; Computations and Statements.

(a)  The Borrower will make each payment under this Agreement not later than
12:00 noon (New York City time) on the day when due, in lawful money of the United States of
America and in immediately available funds, to the Administrative Agent’s Account. All payments
received by the Administrative Agent after 12:00 noon (New York City time) on any Business Day will
be credited to the Loan Account on the next succeeding Business Day. All payments shall be made by
the Borrower without set-off, counterclaim, deduction or other defense to the Agents and the
Lenders. Except as provided in Section 2.02, after receipt, the Administrative Agent will
promptly thereafter cause to be distributed like funds relating to the payment of principal ratably
to the Lenders in accordance with their Pro Rata Shares and like funds relating to the payment of
any other amount payable to any Lender to such Lender, in each case to be applied in accordance
with the terms of this Agreement, provided that the Administrative Agent will cause to be
distributed all interest and fees received from or for the account of the Borrower not less than
once each month and in any event promptly after receipt thereof. The Lenders and the Borrower
hereby authorize the Administrative Agent to, and the Administrative Agent shall, from time to
time, charge the Loan Account of the Borrower with any amount due and payable by the Borrower under
any Loan Document. Each of the Lenders and the Borrower agrees that the Administrative Agent shall
have the right to make such charges whether or not any Default or Event of Default shall have
occurred and be continuing or whether any of the conditions precedent in Section 5.02 have
been satisfied. Any amount charged to the Loan Account of the Borrower shall be deemed a Loan
hereunder funded by the Administrative Agent on behalf of the Lenders and subject to
Section 2.02 of this Agreement. The Lenders and the Borrowers confirm that any charges
which the Administrative Agent may so make to the Loan Account of the Borrowers as herein provided
will be made as an accommodation to the Borrowers and solely at the Administrative Agent’s
discretion, provided that the Administrative Agent shall from time to time upon the request of the
Collateral Agent, charge the Loan Account of the Borrowers with any amount due and payable under
any Loan Document. Whenever any payment to be made under any such Loan Document shall be stated to
be due on a day other than a Business Day, such payment shall 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, as the case may be. All computations of fees shall be made by the Administrative
Agent on the basis of a year of 360 days for the actual number of days (including the first day but
excluding the last day) occurring in the period for which such fees are payable. Each
determination by the Administrative Agent of an interest rate or fees hereunder shall be conclusive
and binding for all purposes in the absence of manifest error.

(b) The Administrative Agent shall provide the Borrower, promptly after the end of
each calendar month, a summary statement (in the form from time to time used by the Administrative
Agent) of the opening and closing daily balances in the Loan Account of the Borrower during such
month, the amounts and dates of all Loans made to the Borrower during such month, the amounts and
dates of all payments on account of the Loans to the Borrower during such month and the Loans to
which such payments were applied, the amount of interest accrued on the Loans to the Borrower
during such month, the amount of charges to the Loan Account, and the amount and nature of any
charges to the Loan Account made during such month on account of fees, commissions, expenses and
other Obligations. All entries on any such statement shall be presumed to be correct and, 30 days
after the same is sent, shall be final and conclusive absent manifest error.

Section 4.03 Sharing of Payments, Etc. Except as provided in
Section 2.02 hereof, if any Lender shall obtain any payment (whether voluntary,
involuntary, through the exercise of any right of set-off, or otherwise) on account of any
Obligation in excess of its ratable share of payments on account of similar obligations obtained by
all the Lenders, such Lender shall forthwith purchase from the other Lenders such participations in
such similar obligations held by them as shall be necessary to cause such purchasing Lender to
share the excess payment ratably with each of them; provided, however, that if all
or any portion of such excess payment is thereafter recovered from such purchasing Lender, such
purchase from each Lender shall be rescinded and such Lender shall repay to the purchasing Lender
the purchase price to the extent of such recovery together with an amount equal to such Lender’s
ratable share (according to the proportion of (i) the amount of such Lender’s required repayment to
(ii) the total amount so recovered from the purchasing Lender of any interest or other amount paid
by the purchasing Lender in respect of the total amount so recovered). The Borrower agrees that
any Lender so purchasing a participation from another Lender pursuant to this Section 4.03
may, to the fullest extent permitted by law, exercise all of its rights (including the Lender’s
right of set-off) with respect to such participation as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation.

Section 4.04 Apportionment of Payments.  Subject to Section 2.02
hereof and to any written agreement among the Agents or the Lenders:

(a) all payments of principal and interest in respect of outstanding Loans, all
payments of fees (other than the audit and collateral monitoring fees provided for in
Section 4.01) and all other payments in respect of any other Obligations, shall be
allocated by the Administrative Agent among such of the Lenders as are entitled thereto, in
proportion to their respective Pro Rata Shares or otherwise as provided herein or, in respect of
payments not made on account of Loans as designated by the Person making payment when the payment
is made.

(b) After the occurrence and during the continuance of an Event of Default, the
Administrative Agent may, and upon the direction of the Required Lenders shall, apply all payments
in respect of any Obligations and all proceeds of the Collateral, subject to the provisions of this
Agreement, (i) first, ratably to pay the Obligations in respect of any fees, expense
reimbursements, indemnities and other amounts then due to the Agents until paid in full;
(ii) second, ratably to pay interest due in respect of the Collateral Agent Advances until
paid in full; (iii) third, ratably to pay principal of the Collateral Agent Advances until
paid in full; (iv) fourth, ratably to pay any fees and indemnities then due to the Term
Loan Lenders until paid in full; (v) fifth, ratably to pay interest due in respect of the
Term Loans until paid in full; (vi) sixth, ratably to pay principal of the Term Loans until
paid in full, and (vii) seventh, to the ratable payment of all other Obligations then due
and payable until paid in full.

(c) In each instance, so long as no Event of Default has occurred and is continuing,
Section 4.04(b) shall not be deemed to apply to any payment by the Borrower specified by
the Borrower to the Administrative Agent to be for the payment of Term Loan A Obligations or Term
Loan B Obligations, as applicable, then due and payable under any provision of this Agreement or
the prepayment of all or part of the principal of the Term Loans in accordance with the terms and
conditions of Section 2.05.

(d) For purposes of Section 4.04(b), (other than clause (vii) thereof) “paid
in full” means with respect to any Obligations, payment of all amounts owing under the Loan
Documents in respect of such Obligations, including fees, interest, default interest, interest on
interest, expense reimbursements and indemnities, specifically including in each case any of the
foregoing which would accrue after the commencement of any Insolvency Proceeding irrespective of
whether a claim is allowable in such Insolvency Proceeding, except to the extent that default or
overdue interest (but not any other interest) and fees, each arising from or related to a default,
are disallowed in any Insolvency Proceeding; provided, however, that for purposes
of such clause (vii), “paid in full” means with respect to any Obligations, payment of all amounts
owing under the Loan Documents in respect of such Obligations, including fees, interest, default
interest, interest on interest, expense reimbursements and indemnities, specifically including in
each case any of the foregoing which would accrue after the commencement of any Insolvency
Proceeding irrespective of whether a claim is allowable in such Insolvency Proceeding.

(e) In the event of a direct conflict between the priority provisions of this
Section 4.04 and other provisions contained in any other Loan Document, it is the intention
of the parties hereto that both such priority provisions in such documents shall be read together
and construed, to the fullest extent possible, to be in concert with each other. In the event of
any actual, irreconcilable conflict that cannot be resolved as aforesaid, the terms and provisions
of this Section 4.04 shall control and govern.

Section 4.05 Increased Costs and Reduced Return.  (a)  If any
Lender or any Agent shall have determined that the adoption or implementation of, or any change in,
any law, rule, treaty or regulation, or any policy, guideline or directive of, or any change in,
the interpretation or administration thereof by, any court, central bank or other administrative or
Governmental Authority, or compliance by any Lender or any Agent or any Person controlling any such
Lender or any such Agent with any directive of, or guideline from, any central bank or other
Governmental Authority or the introduction of, or change in, any accounting principles applicable
to any Lender, any Agent or any Person controlling any such Lender, any such Agent (in each case,
whether or not having the force of law) (each, a “Change in Law”), shall (i) subject any
Lender, any Agent or any Person controlling any such Lender or any such Agent to any tax, duty or
other charge with respect to this Agreement or any Loan made by such Lender or such Agent or change
the basis of taxation of payments to any Lender, any Agent or any Person controlling any such
Lender or any such Agent of any amounts payable hereunder (except for taxes on the overall net
income of any Lender, any Agent or any Person controlling any such Lender or any such Agent), (ii)
impose, modify or deem applicable any reserve, special deposit or similar requirement against any
Loan, or against assets of or held by, or deposits with or for the account of, or credit extended
by, any Lender, any Agent or any Person controlling any such Lender or any such Agent or
(iii) impose on any Lender, any Agent or any Person controlling any such Lender or any such Agent
any other condition regarding this Agreement or any Loan, and the result of any event referred to
in clauses (i), (ii) or (iii) above shall be to increase the cost to any Lender or any Agent of
making any Loan, or agreeing to make any Loan or to reduce any amount received or receivable by any
Lender or any Agent hereunder, then, upon demand by any such Lender or any such Agent, the Borrower
shall pay to such Lender or such Agent such additional amounts as will compensate such Lender, or
such Agent for such increased costs or reductions in amount.

(b) If any Lender or any Agent shall have determined that any Change in Law either
(i) affects or would affect the amount of capital required or expected to be maintained by any
Lender, any Agent or any Person controlling such Lender or such Agent and any Lender or any Agent
determines that the amount of such capital is increased as a direct or indirect consequence of any
Loans made or maintained, any Lender’s, any Agent’s or any such other controlling Person’s other
obligations hereunder, or (ii) has or would have the effect of reducing the rate of return on any
Lender’s or any Agent’s any such other controlling Person’s capital to a level below that which
such Lender, such Agent or such controlling Person could have achieved but for such circumstances
as a consequence of any Loans made or maintained, or any agreement to make Loans, or such Lender’s,
such Agent’s or such other controlling Person’s other obligations hereunder (in each case, taking
into consideration, such Lender’s, or such Agent’s or such other controlling Person’s policies with
respect to capital adequacy), then, upon demand by any Lender or any Agent, the Borrower shall pay
to such Lender or such Agent from time to time such additional amounts as will compensate such
Lender or such Agent for such cost of maintaining such increased capital or such reduction in the
rate of return on such Lender’s or such Agent’s or such other controlling Person’s capital.

(c) All amounts payable under this Section 4.05 shall bear interest from the
date that is ten (10) days after the date of demand by any Lender or any Agent until payment in
full to such Lender or such Agent at the Reference Rate. A certificate of such Lender or such
Agent claiming compensation under this Section 4.05, specifying the event herein above
described and the nature of such event shall be submitted by such Lender or such Agent to the
Borrower, setting forth the additional amount due and an explanation of the calculation thereof,
and such Lender’s or such Agent’s reasons for invoking the provisions of this Section 4.05,
and shall be final and conclusive absent manifest error.

ARTICLE V

CONDITIONS TO LOANS

Section 5.01 Conditions Precedent. The obligation of any Lender to make the
Term Loan A (or any other Person to otherwise extend any credit provided for hereunder), is
subject to the fulfillment, to the satisfaction of each Lender (the making of the Term Loan A by
any Lender being conclusively deemed to be its satisfaction or waiver of the following), of each of
the conditions precedent set forth below:

(a) Payment of Fees, Etc. The Borrower shall have paid all fees, costs,
expenses and taxes then payable pursuant to Sections 2.06 or 12.04.

(b) Representations and Warranties; No Event of Default. The following
statements shall be true and correct: (i) the representations and warranties contained in
Article VI and in each other Loan Document, certificate or other writing delivered to any Agent or
any Lender pursuant hereto or thereto on or prior to the Effective Date are true and correct in all
material respects (except that such materiality qualifier shall not be applicable to any
representations and warranties that already are qualified or modified by materiality in the text
thereof) on and as of the Effective Date as though made on and as of such date (it being understood
and agreed that any representation or warranty which by its terms is made as of a specified date
shall be required to be true and correct in all material respects only as of such specified date)
and (ii) no Default or Event of Default shall have occurred and be continuing on the Effective Date
or would result from this Agreement or the other Loan Documents becoming effective in accordance
with its or their respective terms.

(c) Legality. The making of the Term Loan A shall not contravene any law,
rule or regulation applicable to any Agent or any Lender.

(d) Delivery of Documents. The Collateral Agent shall have received on or
before the Effective Date the following, each in form and substance satisfactory to the Collateral
Agent and, unless indicated otherwise, dated the Effective Date:

(i) a Security Agreement, duly executed by each Loan Party, together with the
original stock certificates representing all of the Capital Stock owned by each Loan Party and all
promissory notes of each Loan Party, accompanied by undated stock powers executed in blank and
other proper instruments of transfer (provided that this clause (i) may be satisfied by delivering
such certificates, notes, powers and other instruments to Foothill, so long as the Collateral Agent
shall have received undated original stock powers executed in blank, in form and substance
reasonably satisfactory to the Collateral Agent, for all such stock certificates that have been
delivered to Foothill);

(ii) the Term Loan A Funds Flow Agreement, duly executed by each Loan Party,

(iii) the Intercompany Subordination Agreement, duly executed by each Loan Party;

(iv) the Intercreditor Agreement, duly executed by each of the parties thereto;

(v) the Niagara Subordination Agreement, duly executed by each of the parties
thereto;

(vi) a Filing Authorization Letter, duly executed by each Loan Party, together with
appropriate financing statements duly filed in such office or offices as may be necessary or, in
the opinion of the Collateral Agent, desirable to perfect the security interests purported to be
created by each Security Agreement;

(vii) certified copies of all effective financing statements which name as debtor
any Loan Party and which are filed in the offices referred to in clause (vii) above, together with
copies of such financing statements, none of which, except as otherwise agreed in writing by the
Collateral Agent, shall cover any of the Collateral and the results of searches for any tax Lien
and judgment Lien filed against such Person or its property, which results, except as otherwise
agreed to in writing by the Collateral Agent, shall not show any such Liens;

(viii) a copy of the resolutions of each Loan Party, certified as of the Effective
Date by an Authorized Officer thereof, authorizing (A) the transactions contemplated by the Loan
Documents to which such Loan Party is or will be a party, and (B) the execution, delivery and
performance by such Loan Party of each Loan Document to which such Loan Party is or will be a party
and the execution and delivery of the other documents to be delivered by such Person in connection
herewith and therewith;

(ix) a certificate of an Authorized Officer of each Loan Party, certifying the names
and true signatures of the representatives of such Loan Party authorized to sign each Loan Document
to which such Loan Party is or will be a party and the other documents to be executed and delivered
by such Loan Party in connection herewith and therewith, together with evidence of the incumbency
of such authorized officers;

(x) a certificate of the appropriate official(s) of the state of organization and
each state of foreign qualification of each Loan Party certifying as to the subsistence in good
standing of, and the payment of taxes by, such Loan Party in such states;

(xi) a true and complete copy of the charter, certificate of formation, certificate
of limited partnership or other publicly filed organizational document of each Loan Party certified
as of a recent date not more than 45 days prior to the Effective Date by an appropriate official of
the state of organization of such Loan Party which shall set forth the same complete name of such
Loan Party as is set forth herein and the organizational number of such Loan Party, if an organized
number is issued in such jurisdiction;

(xii) a copy of the charter and by-laws, limited liability company agreement,
operating agreement, agreement of limited partnership or other organizational document of each Loan
Party, together with all amendments thereto, certified as of the Effective Date by an Authorized
Officer of such Loan Party;

(xiii) an opinion of Lowenstein Sandler, PC, counsel to the Loan Parties, and of
local counsel to the Loan Parties in such jurisdictions as the Collateral Agent may reasonably
request, each in form and substance reasonably satisfactory to the Collateral Agent;

(xiv) a certificate of an Authorized Officer of each Loan Party, certifying as to
the matters set forth in Section 5.01(b);

(xv) a copy of the Financial Statements, together with a certificate of an
Authorized Officer of the Borrower setting forth all existing Indebtedness, pending or threatened
litigation or claims and other contingent liabilities of the Borrower and its Subsidiaries;

(xvi) a copy of the financial projections described in Section 6.01(g)(ii)
hereof, which projections shall be satisfactory in form and substance to the Agents;

(xvii) a certificate of the chief financial officer of the Borrower, setting forth
in reasonable detail the calculations required to establish compliance, on a pro forma basis after
giving effect to the consummation of the Annaco Acquisition, with each of the financial covenants
contained in Section 7.03;

(xviii) a certificate of the chief financial officer of the Borrower, certifying as
to the solvency of each Loan Party, which certificate shall be satisfactory in form and substance
to the Collateral Agent;

(xix) evidence of the insurance coverage required by Section 7.01 and the
terms of each Security Agreement and such other insurance coverage with respect to the business and
operations of the Loan Parties as the Collateral Agent may reasonably request, in each case, where
requested by the Collateral Agent, with such endorsements as to the named insureds or loss payees
thereunder as the Collateral Agent may request and providing that such policy may be terminated or
canceled (by the insurer or the insured thereunder) only upon 30 days prior written notice (or, in
the case of termination or cancellation for non-payment of premium, 10 days prior written notice)
to the Collateral Agent and each such named insured or loss payee;

(xx) a certificate of an Authorized Officer of the Borrower, certifying the names
and true signatures of the persons that are authorized to provide Notices of Borrowing and all
other notices under this Agreement and the other Loan Documents;

(xxi) a landlord waiver, in form and substance satisfactory to the Collateral Agent
and which may be included as a provision contained in the relevant Lease, executed by each landlord
with respect to each of the locations identified as leased locations on Schedule 6.01(o)
(except as contemplated under Section 5.03(c) below);

(xxii) a collateral access agreement, in form and substance satisfactory to the
Collateral Agent, executed by each Person who possesses Inventory of any Loan Party;

(xxiii) environmental reviews of each Facility, in form and substance, and by an
independent firm, satisfactory to the Collateral Agent in its sole discretion;

(xxiv) copies of (a) the Annaco Acquisition Documents, and (b) the other Material
Contracts as in effect on the Effective Date, certified as true and correct copies thereof by an
Authorized Officer of the Borrower, together with a certificate of an Authorized Officer of the
Borrower stating that such agreements remain in full force and effect and that none of the Loan
Parties has breached or defaulted in any of its obligations under such agreements;

(xxv) the Borrower shall have received all material licenses, approvals or evidence
of other actions required by any Governmental Authority (including under HSR if applicable) in
connection with the execution and delivery by the Borrower of the Annaco Acquisition Documents and
with the consummation of the transactions contemplated thereby; and

(xxvi) such other agreements, instruments, approvals, opinions and other documents,
each satisfactory to the Collateral Agent in form and substance, as the Collateral Agent may
reasonably request.

(e) Material Adverse Effect. The Collateral Agent shall have determined, in
its sole judgment, that no event or development shall have occurred since December 31, 2006, which
could reasonably be expected to result in a Material Adverse Effect.

(f) Consummation of Annaco Acquisition. Concurrently with the making of the
Term Loan A, (i) the Borrower shall have purchased, pursuant to the Annaco Acquisition Agreement
(no provision of which shall have been amended or otherwise modified or waived without the prior
written consent of the Agents), and shall have become the owner, free and clear of all Liens other
than Permitted Liens, of substantially all of the assets of Annaco for a Purchase Price not in
excess of $35,600,000 in cash or other immediately available funds (subject to a working capital
adjustment) and the Annaco Earn-Out Arrangements, (ii) the proceeds of the Term Loan A shall have
been applied (together with other funds of the Borrower and its Subsidiaries) to pay the Purchase
Price payable pursuant to the Annaco Acquisition Agreement for substantially all of the assets of
Annaco and the closing and other costs relating thereto.

(g) Proceedings; Receipt of Documents. All proceedings in connection with
the making of the Term Loan A and the other transactions contemplated by this Agreement and the
other Loan Documents, and all documents incidental hereto and thereto, shall be satisfactory to the
Collateral Agent and its counsel, and the Collateral Agent and such counsel shall have received all
such information and such counterpart originals or certified or other copies of such documents as
the Collateral Agent or such counsel may reasonably request.

(h) Management Reference Checks. The Collateral Agent shall have received
satisfactory reference checks for key management of each Loan Party.

(i) Due Diligence. The Agents shall have completed their business and legal
due diligence with respect to each Loan Party and the results thereof shall be acceptable to the
Agents, in their sole and absolute discretion.

(j) Availability. After giving effect to Term Loan A to be made on the
Effective Date and the consummation of the Annaco Acquisition, the sum of Availability plus
Qualified Cash shall not be less than $5,000,000. The Borrower shall deliver to the Collateral
Agent a certificate of the chief financial officer of the Borrower certifying as to the calculation
of Availability.

(k) Loans on Effective Date. The aggregate amount of the Term Loan A to be
made on the Effective Date shall not exceed 2.1 times TTM EBITDA for the most recently completed 12
month period set forth in the Financial Statements after giving pro forma effect to the Annaco
Acquisition.

(l) Notices. The Administrative Agent shall have received a Notice of
Borrowing pursuant to Section 2.02 hereof.

Section 5.02 Conditions Precedent to Term Loan B Funding Date. The
obligation of any Lender to make the Term Loan B on the Term Loan B Funding Date is subject to the
fulfillment, to the satisfaction of each Lender (the making of the Term Loan B by any Lender being
conclusively deemed to be satisfaction or waiver of the following), of each of the conditions
precedent set forth below:

(a) Payment of Fees, Etc. The Borrower shall have paid all fees, costs,
expenses and taxes then payable by the Borrower pursuant to this Agreement and the other Loan
Documents, including Sections 2.06 and 12.04 hereof.

(b) Representations and Warranties; No Event of Default. The following
statements shall be true and correct: (i) the representations and warranties contained in
Article VI and in each other Loan Document, certificate or other writing delivered to any Agent or
any Lender pursuant hereto or thereto on or prior to the Term Loan B Funding Date are true and
correct in all material respects (except that such materiality qualifier shall not be applicable to
any representations and warranties that already are qualified or modified by materiality in the
text thereof) on and as of the Term Loan B Funding Date as though made on and as of such date (it
being understood and agreed that any representation or warranty which by its terms is made as of a
specified date shall be required to be true and correct in all material respects only as of such
specified date) and (ii) no Default or Event of Default has occurred and is continuing on the Term
Loan B Funding Date or would result from the making of the Term Loan B in accordance with the terms
hereof.

(c) Legality. The making of the Term Loan B shall not contravene any law,
rule or regulation applicable to any Agent or any Lender.

(d) Delivery of Documents. The Collateral Agent shall have received on or
before the Term Loan B Funding Date the following, each in form and substance satisfactory to the
Collateral Agent and, unless indicated otherwise, dated the Term Loan B Funding Date:

(i) the Term Loan B Funds Flow Agreement, duly executed by each Loan Party;

(ii) a certificate of an Authorized Officer of each Loan Party, certifying as to the
matters set forth in Section 5.02(b);

(iii) copies of the Totalcat Acquisition Documents, in form and substance
satisfactory to the Agents;

(iv) an opinion of Lowenstein Sandler PC, counsel to the Loan Parties in connection
with the Totalcat Acquisition, and of local counsel to the Loan Parties in such jurisdictions as
the Collateral Agent may reasonably request, in each case as to such matters as the Collateral
Agent may reasonably request;

(v) a certificate of the chief financial officer of the Borrower, setting forth
updated pro forma projections for the Borrower and its Subsidiaries demonstrating compliance on a
pro forma basis with Section 7.03 for the period from the Term Loan B Funding Date through
December 31, 2007, in form and content reasonably acceptable to the Agents;

(vi) a certificate of the chief financial officer of the Borrower, certifying as to
the solvency of each Loan Party, which certificate shall be satisfactory in form and substance to
the Collateral Agent;

(vii) a landlord waiver, in form and substance satisfactory to the Collateral Agent
and which may be included as a provision contained in the relevant Lease, executed by each landlord
with respect to each of the leased locations acquired in connection with the Totalcat Acquisition;

(viii) a collateral access agreement, in form and substance satisfactory to the
Collateral Agent, executed by each Person who possesses Inventory of any Loan Party;

(ix) a certificate of an Authorized Officer of the Borrower certifying that the
subject Capital Stock in the Totalcat Acquisition is being acquired directly by a Loan Party or by
a wholly-owned direct Subsidiary of Borrower and that each entity being acquired in connection with
the Totalcat Acquisition is organized and located within the United States;

(x) written confirmation supported by reasonably detailed calculations, that (1) the
operations conducted by Totalcat had positive Consolidated EBITDA for the most recently completed
12 month period for which financial statements are available, and (2) on a pro forma basis, created
by adding the historical combined financial statements of the Borrower to the historical
consolidated financial statements of the operations conducted by Totalcat, the Borrower would have
been in compliance with the financial covenants in Section 7.03 for the 12 months ending as
of the month ended immediately prior to the proposed date of consummation of the Totalcat
Acquisition for which there are available financial statements;

(xi) (A) a pledge agreement respecting the Capital Stock of any wholly-owned
Subsidiary that is formed to participate in the Totalcat Acquisition or that is acquired in
connection with the Totalcat Acquisition, (B) possession of the original stock certificates
respecting all of the issued and outstanding shares of Capital Stock of each such Person, together
with stock powers with respect thereto endorsed in blank (provided that this clause may be
satisfied by delivering such documents to Foothill for so long as the Foothill Loan Agreement is in
existence, so long as the Collateral Agent shall have received undated original stock powers
executed in blank, in form and substance reasonably satisfactory to the Collateral Agent, for all
such stock certificates that have been delivered to Foothill), (C) a joinder agreement executed by
each such Subsidiary and each of its Subsidiaries pursuant to which each such Subsidiary and each
of its Subsidiaries joins this Agreement as a Guarantor, and (iv) such other Loan Documents as are
necessary to obtain an enforceable and perfected second priority (subject to Permitted Liens) Lien
upon all or substantially all of the property and assets of each such Subsidiary and each of its
Subsidiaries;

(xii) (A) a quality of earnings report from a third party reasonably acceptable to
the Agents, (B) an environmental report from a third party reasonably acceptable to the Agents, and
(C) legal diligence items (including copies of material contracts, UCC, tax lien, and litigation
searches) relative to the Capital Stock being acquired in connection with the Totalcat Acquisition,
each of which shall be in form and substance reasonably acceptable to the Agents;

(xiii) a certificate from the chief financial officer of the Borrower certifying
that the sum of Availability and Qualified Cash shall equal or exceed $5,000,000 immediately after
giving effect to the Totalcat Acquisition; and

(xiv) such other agreements, instruments, approvals, opinions and other documents,
each satisfactory to the Collateral Agent, in form and substance, as the Collateral Agent may
reasonably request.

(e) Consummation of Totalcat Acquisition. Concurrently with the making of
the Term Loan B, (i) the Borrower shall have purchased pursuant to the Totalcat Acquisition
Agreement (no provision of which shall have been amended or otherwise modified or waived without
the prior written consent of the Agents), and shall have become the owner, free and clear of all
Liens other than Permitted Liens, of 82.5% of the issued and outstanding Capital Stock of Totalcat
for a Purchase Price not in excess of $35,700,000 in cash or other immediately available funds
(subject to a working capital adjustment), (ii) the proceeds of the Term Loan B shall have been
applied (together with a portion of the proceeds of the Qualified Issuance and other funds of the
Borrower and its Subsidiaries) to pay the Purchase Price payable pursuant to the Totalcat
Acquisition Agreement for 82.5% of the issued and outstanding Capital Stock of Totalcat and the
closing and other costs relating thereto.

(f) Loans on Term Loan B Funding Date. The aggregate amount of the Term
Loans outstanding as of the Term Loan B Funding Date shall not exceed 2.25 times TTM EBITDA for the
most recently completed 12 month period set forth in the Financial Statements referenced in
Section 5.01(l) after giving pro forma effect to the Totalcat Acquisition.

(g) Qualified Issuance. The Collateral Agent shall have received evidence
satisfactory to it that the Qualified Issuance shall have occurred on or prior to the Term Loan B
Funding Date.

(h) Foothill Loan Agreement. The Agents shall have received evidence
satisfactory to each of them that the Foothill Loan Agreement shall have been amended on or prior
to the Term Loan B Funding Date to increase the aggregate commitments available thereunder to
$85,000,000.

(i) Notices. The Administrative Agent shall have received a Notice of
Borrowing with respect to the Term Loan B pursuant to Section 2.02 hereof.

Section 5.03 Conditions Subsequent to All Loans. The Loan Parties agree to
fulfill, on or before the date applicable thereto, each of the following conditions subsequent (the
failure by the Loan Parties to so perform or cause to be performed any of the following to
constitute an immediate Event of Default hereunder):

(a) on or before the date that is 30 days after the Effective Date, the Agents shall
have received such depository account, blocked account, lockbox account and similar agreements and
other documents, each in form and substance reasonably satisfactory to the Agents, as the Agents
may request with respect to the Borrower’s cash management system;

(b) on or before the date that is 30 days after the Effective Date, the Collateral
Agent shall have received additional insured and loss payable endorsements required by Section
7.01, in form and substance satisfactory to the Collateral Agent;

(c) on or before the date that is 30 days after the Effective Date, a landlord
waiver, in form and substance satisfactory to the Collateral Agent and which may be included as a
provision contained in the relevant Lease, executed by each landlord with respect to each of the
following locations: 186 North Avenue East, Cranford, New Jersey, and 3949 Guasti Road, Ontario,
California (provided that if the Borrower shall have used its commercially reasonable efforts to
obtain the landlord waiver with respect to the location at 186 North Avenue East, Cranford, New
Jersey, within such time period no Event of Default shall be deemed to have occurred);

(d) on or before the date that is 30 days after the Effective Date, the Collateral
Agent shall have received a Mortgage, duly executed by the applicable Loan Party with respect to
each Facility;

(e) on or before the date that is 30 days after the Effective Date, the Collateral
Agent shall have received evidence that the Mortgages described in the foregoing clause (c) have
been submitted for recording in such office or offices as may be necessary or, in the opinion of
the Collateral Agent, desirable to perfect the Lien purported to be created thereby or to otherwise
protect the rights of the Collateral Agent and the Lenders thereunder, together with a Title
Insurance Policy with respect to the Mortgages;

(f) on or before July 6, 2007, the Collateral Agent shall have received evidence
satisfactory to it that any Liens held by Fulton Bank on the assets of Tranzact Corporation shall
have been terminated of record; and

(g) prior to 5:00 p.m. (New York City time), the Collateral Agent shall have
received an opinion of Illinois local counsel to the Loan Parties, in form and substance reasonably
satisfactory to the Collateral Agent.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES

Section 6.01 Representations and Warranties. Each Loan Party hereby
represents and warrants to the Agents and the Lenders as follows:

(a) Organization, Good Standing, Etc. Each Loan Party (i) is a corporation,
limited liability company or limited partnership duly organized, validly existing and in good
standing under the laws of the state or jurisdiction of its organization, (ii) has all requisite
power and authority to conduct its business as now conducted and as currently contemplated and, in
the case of the Borrower, to make the borrowings hereunder, and to execute and deliver each Loan
Document to which it is a party, and to consummate the transactions contemplated thereby, and (iii)
is duly qualified to do business and is in good standing in each jurisdiction in which the
character of the properties owned or leased by it or in which the transaction of its business makes
such qualification necessary.

(b) Authorization, Etc. The execution, delivery and performance by each
Loan Party of each Loan Document to which it is or will be a party, (i) have been duly authorized
by all necessary action, (ii) do not and will not contravene its charter or by-laws, its limited
liability company or operating agreement or its certificate of partnership or partnership
agreement, as applicable, or any applicable law or any contractual restriction binding on or
otherwise affecting it or any of its properties, (iii) do not and will not result in or require the
creation of any Lien (other than pursuant to any Loan Document) upon or with respect to any of its
properties, and (iv) do not and will not result in any default, noncompliance, suspension,
revocation, impairment, forfeiture or nonrenewal of any permit, license, authorization or approval
applicable to its operations or any of its properties.

(c) Governmental Approvals. No authorization or approval or other action
by, and no notice to or filing with, any Governmental Authority is required in connection with the
due execution, delivery and performance by any Loan Party of any Loan Document to which it is or
will be a party.

(d) Enforceability of Loan Documents. This Agreement is, and each other
Loan Document to which any Loan Party is or will be a party, when delivered hereunder, will be, a
legal, valid and binding obligation of such Person, enforceable against such Person in accordance
with its terms, except as may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws.

(e) Subsidiaries. Schedule 6.01(e) is a complete and correct
description of the name, jurisdiction of incorporation and ownership of the outstanding Capital
Stock of each Subsidiary of the Borrower. All of the issued and outstanding shares of Capital
Stock of such Subsidiaries have been validly issued and are fully paid and non-assessable, and the
holders thereof are not entitled to any preemptive, first refusal or other similar rights. Except
as indicated on such Schedule, all such Capital Stock is owned by the Borrower or one or more of
its wholly-owned Subsidiaries, free and clear of all Liens (other than Permitted Liens). There are
no outstanding debt or equity securities of the Borrower or any of its Subsidiaries and no
outstanding obligations of the Borrower or any of its Subsidiaries convertible into or exchangeable
for, or warrants, options or other rights for the purchase or acquisition from the Borrower or any
of its Subsidiaries, or other obligations of any Subsidiary to issue, directly or indirectly, any
shares of Capital Stock of any Subsidiary of the Borrower.

(f) Litigation; Commercial Tort Claims. Except as set forth in
Schedule 6.01(f), (i) there is no pending or, to the knowledge of any Loan Party,
threatened action, suit or proceeding affecting any Loan Party before any court or other
Governmental Authority or any arbitrator that (A) if adversely determined, could reasonably be
expected to result in a Material Adverse Effect or (B) relates to this Agreement or any other Loan
Document or any transaction contemplated hereby or thereby and (ii) as of the Effective Date, none
of the Loan Parties holds any commercial tort claims in respect of which a claim has been filed in
a court of law or a written notice by an attorney has been given to a potential defendant.

(g) Financial Condition.

(i) The Financial Statements, copies of which have been delivered to each Agent and
each Lender, fairly present, in all material respects, the consolidated financial condition of the
Borrower and its Subsidiaries as at the respective dates thereof and the consolidated results of
operations of the Borrower and its Subsidiaries for the fiscal periods ended on such respective
dates, all in accordance with GAAP, and since December 31, 2006, no event or development has
occurred that has had or could reasonably be expected to result in a Material Adverse Effect.

(ii) The Borrower has heretofore furnished to each Agent and each Lender
(A) projected monthly income statements of the Borrower and its Subsidiaries for the period from
July 1, 2007 through December 31, 2007, and (B) projected monthly balance sheets and statements of
cash flows of the Borrower and its Subsidiaries for the period from July 1, 2007 through December
31, 2007, which projected financial statements shall be updated from time to time pursuant to
Section 7.01(a)(vii). Such projections, as so updated, are believed by the Borrower at the
time furnished to be reasonable, have been prepared on a reasonable basis and in good faith by the
Borrower, and have been based on assumptions believed by the Borrower to be reasonable at the time
made and upon the best information then reasonably available to the Borrower, and the Borrower is
not aware of any facts or information that would lead it to believe that such projections, as so
updated, are incorrect or misleading in any material respect.

(h) Compliance with Law, Etc. No Loan Party is in violation of its
organizational documents, any law, rule, regulation, judgment or order of any Governmental
Authority applicable to it or any of its property or assets (which violation could reasonably be
expected to result in a Material Adverse Effect), or any material term of any agreement or
instrument (including any Material Contract) binding on or otherwise affecting it or any of its
properties, and no Default or Event of Default has occurred and is continuing.

(i) ERISA. Except as set forth on Schedule 6.01(i), (i) each
Employee Plan is in substantial compliance with ERISA and the IRC, (ii) no Termination Event has
occurred nor is reasonably expected to occur with respect to any Employee Plan, (iii) the most
recent annual report (Form 5500 Series) with respect to each Employee Plan, including any required
Schedule B (Actuarial Information) thereto, copies of which have been filed with the Internal
Revenue Service and delivered to the Agents, is complete and correct and fairly presents the
funding status of such Employee Plan, and since the date of such report there has been no material
adverse change in such funding status, (iv) copies of each agreement entered into with the PBGC,
the U.S. Department of Labor or the Internal Revenue Service with respect to any Employee Plan have
been delivered to the Agents, (v) no Employee Plan had an accumulated or waived funding deficiency
or permitted decrease which would create a deficiency in its funding standard account or has
applied for an extension of any amortization period within the meaning of Section 412 of the IRC at
any time during the previous 60 months, and (vi) no Lien imposed under the IRC or ERISA exists or
is likely to arise on account of any Employee Plan within the meaning of Section 412 of the IRC.
Except as set forth on Schedule 6.01(i), no Loan Party or any of its ERISA Affiliates has
incurred any withdrawal liability under ERISA with respect to any Multiemployer Plan, or is aware
of any facts indicating that it or any of its ERISA Affiliates may in the future incur any such
withdrawal liability. No Loan Party or any of its ERISA Affiliates nor any fiduciary of any
Employee Plan has (A) engaged in a nonexempt prohibited transaction described in Sections 406 of
ERISA or 4975 of the IRC, (B) failed to pay any required installment or other payment required
under Section 412 of the IRC on or before the due date for such required installment or payment,
(C) engaged in a transaction within the meaning of Section 4069 of ERISA or (D) incurred any
liability to the PBGC which remains outstanding other than the payment of premiums, and there are
no premium payments which have become due which are unpaid. There are no pending or, to the
knowledge of any Loan Party, threatened claims, actions, proceedings or lawsuits (other than claims
for benefits in the normal course) asserted or instituted against (1) any Employee Plan or its
assets, (2) any fiduciary with respect to any Employee Plan, or (3) any Loan Party or any of its
ERISA Affiliates with respect to any Employee Plan. Except as required by Section 4980B of the
Internal Revenue Code, no Loan Party or any of its ERISA Affiliates maintains an employee welfare
benefit plan (as defined in Section 3(1) of ERISA) which provides health or welfare benefits
(through the purchase of insurance or otherwise) for any retired or former employee of any Loan
Party or any of its ERISA Affiliates or coverage after a participant’s termination of employment.

(j) Taxes, Etc. All Federal, state and local tax returns and other reports
required by applicable law to be filed by any Loan Party have been filed, or extensions have been
obtained, and all taxes, assessments and other governmental charges imposed upon any Loan Party or
any property of any Loan Party and which have become due and payable have been paid, except to the
extent contested in good faith by proper proceedings which stay the imposition of any penalty, fine
or Lien resulting from the non-payment thereof and with respect to which adequate reserves have
been set aside for the payment thereof in accordance with GAAP.

(k) Regulations T, U and X. No Loan Party is or will be engaged in the
business of extending credit for the purpose of purchasing or carrying margin stock (within the
meaning of Regulation T, U or X), and no 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.

(l) Nature of Business. No Loan Party is engaged in any business other than
as set forth on Schedule 6.01(l).

(m) Adverse Agreements, Etc. No Loan Party is a party to any agreement or
instrument, or subject to any charter, limited liability company agreement, partnership agreement
or other corporate, partnership or limited liability company restriction or any judgment, order,
regulation, ruling or other requirement of a court or other Governmental Authority, which has, or
could reasonably be expected to result in, a Material Adverse Effect.

(n) Permits, Etc. Each Loan Party has, and is in compliance with, all
permits, licenses, authorizations, approvals, entitlements and accreditations required for such
Person lawfully to own, lease, manage or operate, or to acquire, each business currently owned,
leased, managed or operated, or to be acquired, by such Person except for such licenses, permits
and approvals as to which a Loan Party’s failure to maintain or comply with could not reasonably be
expected to result in a Material Adverse Effect. To the best knowledge of each Loan Party, no
condition exists or event has occurred which, in itself or with the giving of notice or lapse of
time or both, would result in the suspension, revocation, impairment, forfeiture or non-renewal of
any such permit, license, authorization, approval, entitlement or accreditation, and there is no
claim that any thereof is not in full force and effect.

(o) Properties.  (i)  Each Loan Party has good and marketable
title to, valid leasehold interests in, or valid licenses to use, all property and assets material
to its business, free and clear of all Liens, except Permitted Liens. All such properties and
assets are in good working order and condition, ordinary wear and tear excepted.

(ii) Schedule 6.01(o) sets forth a complete and accurate list, as of the
Effective Date, of the location, by state and street address, of all real property owned or leased
by each Loan Party. As of the Effective Date, each Loan Party has valid leasehold interests in the
Leases described on Schedule 6.01(o) to which it is a party. Schedule 6.01(o) sets
forth with respect to each such Lease, the commencement date, termination date, renewal options (if
any) and annual base rents. Each such Lease is valid and enforceable in accordance with its terms
in all material respects and is in full force and effect. No consent or approval of any landlord
or other third party in connection with any such Lease is necessary for any Loan Party to enter
into and execute the Loan Documents to which it is a party, except as set forth on
Schedule 6.01(o). To the knowledge of any Loan Party, no other party to any such Lease is
in default of its obligations thereunder, and no Loan Party (or any other party to any such Lease)
has at any time delivered or received any notice of default which remains uncured under any such
Lease and, as of the Effective Date, no event has occurred which, with the giving of notice or the
passage of time or both, would constitute a default under any such Lease.

(p) Full Disclosure. Each Loan Party has disclosed to the Agents all
material agreements, instruments and corporate or other restrictions to which it is subject, and
all other matters known to it, that, individually or in the aggregate, could reasonably be expected
to result in a Material Adverse Effect. None of the other reports, financial statements,
certificates or other information furnished by or on behalf of any Loan Party to the Agents in
connection with the negotiation of this Agreement or delivered hereunder (as modified or
supplemented by other information so furnished) contains any material misstatement of fact or omits
to state any material fact necessary to make the statements therein, in the light of the
circumstances under which it was made, not misleading; provided that, with respect to
projected financial information, each Loan Party represents only that such information was prepared
in good faith based upon assumptions believed to be reasonable at the time. There is no contingent
liability or fact that could reasonably be expected to result in a Material Adverse Effect which
has not been set forth in a footnote included in the Financial Statements or a Schedule hereto.

(q) Operating Lease Obligations. On the Effective Date, none of the Loan
Parties has any Operating Lease Obligations other than the Operating Lease Obligations set forth on
Schedule 6.01(q).

(r) Environmental Matters. Except as set forth on Schedule 6.01(r),
(i) the operations of each Loan Party are in compliance with all Environmental Laws; (ii) to the
best knowledge of each Loan Party, there has been no Release at any of the properties owned or
operated by any Loan Party or a predecessor in interest, or at any disposal or treatment facility
which received Hazardous Materials generated by any Loan Party or any predecessor in interest which
could reasonably be expected to result in a Material Adverse Effect; (iii) no Environmental Action
has been asserted against any Loan Party or any predecessor in interest nor does any Loan Party
have knowledge or notice of any threatened or pending Environmental Action against any Loan Party
or any predecessor in interest which could reasonably be expected to result in a Material Adverse
Effect; (iv) no Environmental Actions have been asserted against any facilities that may have
received Hazardous Materials generated by any Loan Party or any predecessor in interest which could
reasonably be expected to result in a Material Adverse Effect; (v) to the best knowledge of each
Loan Party, no property now or formerly owned or occupied by a Loan Party has been used as a
treatment or disposal site for any Hazardous Material; (vi) no Loan Party has failed to report to
the proper Governmental Authority the occurrence of any Release which is required to be so reported
by any Environmental Laws which could reasonably be expected to result in a Material Adverse
Effect; (vii) each Loan Party holds all licenses, permits and approvals required under any
Environmental Laws in connection with the operation of the business carried on by it, except for
such licenses, permits and approvals as to which a Loan Party’s failure to maintain or comply with
could not reasonably be expected to result in a Material Adverse Effect; (viii) no Loan Party has
received any notification pursuant to any Environmental Laws that (A) any work, repairs,
construction or Capital Expenditures are required to be made in respect of any of its properties as
a condition of continued compliance with any Environmental Laws, or any license, permit or approval
issued pursuant thereto or (B) any license, permit or approval referred to above is about to be
reviewed, made subject to limitations or conditions, revoked, withdrawn or terminated, in each
case, except as could not reasonably be expected to result in a Material Adverse Effect, and (ix)
all Environmental Liabilities and Costs of each Loan Party have been satisfied or reserved for on
the Books of such Loan Party in accordance with GAAP.

(s) Insurance. Each Loan Party keeps its property adequately insured and
maintains (i) insurance to such extent and against such risks, including fire, as is customary with
companies in the same or similar businesses, (ii) worker’s compensation insurance in the amount
required by applicable law, (iii) public liability insurance, which shall include product liability
insurance, in the amount customary with companies in the same or similar business against claims
for personal injury or death on properties owned, occupied or controlled by it, and (iv) such other
insurance as may be required by law or as may be reasonably required by the Collateral Agent
(including against larceny, embezzlement or other criminal misappropriation). Schedule
6.01(s) sets forth a list of all insurance maintained by each Loan Party on the Effective Date.

(t) Use of Proceeds. The proceeds of the Term Loans shall be used to (a)
finance the payment of a portion of the consideration payable to complete the Acquisitions, (b) pay
fees and expenses in connection with the transactions contemplated hereby, and (c) fund working
capital of the Borrower and the Guarantors.

(u) Solvency. After giving effect to the transactions contemplated by this
Agreement and before and after giving effect to each Loan, each Loan Party is, and the Loan Parties
on a consolidated basis are, Solvent.

(v) Location of Bank Accounts. Schedule 6.01(v) sets forth a
complete and accurate list as of the Effective Date of all deposit, checking and other bank
accounts, all securities and other accounts maintained with any broker dealer and all other similar
accounts maintained by each Loan Party, together with a description thereof (i.e., the bank
or broker dealer at which such deposit or other account is maintained and the account number and
the purpose thereof).

(w) Intellectual Property. Except as set forth on Schedule 6.01(w),
each Loan Party owns or licenses or otherwise has the right to use all licenses, permits, patents,
patent applications, trademarks, trademark applications, service marks, tradenames, copyrights,
copyright applications, franchises, authorizations, non-governmental licenses and permits and other
intellectual property rights that are necessary for the operation of its business, without
infringement upon or conflict with the rights of any other Person with respect thereto, except for
such infringements and conflicts which, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. Set forth on Schedule 6.01(w) is a
complete and accurate list as of the Effective Date of all such material licenses, permits,
patents, patent applications, trademarks, trademark applications, service marks, tradenames,
copyrights, copyright applications, franchises, authorizations, non-governmental licenses and
permits and other intellectual property rights of each Loan Party. No slogan or other advertising
device, product, process, method, substance, part or other material now employed, or now
contemplated to be employed, by any Loan Party infringes upon or conflicts with any rights owned by
any other Person, and no claim or litigation regarding any of the foregoing is pending or
threatened, except for such infringements and conflicts which could not reasonably be expected to
result in, individually or in the aggregate, a Material Adverse Effect. To the knowledge of each
Loan Party, no patent, invention, device, application, principle or any statute, law, rule,
regulation, standard or code is pending or proposed, which, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect.

(x) Material Contracts. Set forth on Schedule 6.01(x) is a complete
and accurate list as of the Effective Date of all Material Contracts of each Loan Party, showing
the parties and subject matter thereof and amendments and modifications thereto. Each such
Material Contract (i) is in full force and effect and is binding upon and enforceable against each
Loan Party that is a party thereto and, to the knowledge of such Loan Party, all other parties
thereto in accordance with its terms, (ii) has not been otherwise amended or modified, and (iii) is
not in default due to the action of any Loan Party or, to the knowledge of any Loan Party, any
other party thereto.

(y) Investment Company Act. None of the Loan Parties is an “investment
company” or an “affiliated person” or “promoter” of, or “principal underwriter” of or for, an
“investment company”, as such terms are defined in the Investment Company Act of 1940, as amended.

(z) Employee and Labor Matters. There is (i) no unfair labor practice
complaint pending or, to the knowledge of any Loan Party, threatened against any Loan Party before
any Governmental Authority and no grievance or arbitration proceeding pending or threatened against
any Loan Party which arises out of or under any collective bargaining agreement, (ii) no strike,
labor dispute, slowdown, stoppage or similar action or grievance pending or threatened against any
Loan Party or (iii) to the knowledge of any Loan Party, no union representation question existing
with respect to the employees of any Loan Party and no union organizing activity taking place with
respect to any of the employees of any Loan Party. No Loan Party or any of its ERISA Affiliates
has incurred any liability or obligation under the Worker Adjustment and Retraining Notification
Act (“WARN”) or similar state law, which remains unpaid or unsatisfied. The hours worked
and payments made to employees of any Loan Party have not been in violation of the Fair Labor
Standards Act or any other applicable legal requirements, except to the extent such violations
could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse
Effect. All material payments due from any Loan Party on account of wages and employee health and
welfare insurance and other benefits have been paid or accrued as a liability on the books of such
Loan Party, except where the failure to do so could not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect.

(aa) Customers and Suppliers. There exists no actual or threatened
termination, cancellation or limitation of, or modification to or change in, the business
relationship between (i) any Loan Party, on the one hand, and any customer or any group thereof, on
the other hand, whose agreements with any Loan Party are individually or in the aggregate material
to the business or operations of such Loan Party, or (ii) any Loan Party, on the one hand, and any
material supplier thereof, on the other hand.

(bb) No Bankruptcy Filing. No Loan Party is contemplating either the filing
of a petition by it under any state, federal or foreign bankruptcy or insolvency laws or the
liquidation of all or a major portion of such Loan Party’s assets or property, and no Loan Party
has any knowledge of any Person contemplating the filing of any such petition against it.

(cc) Separate Existence.

(i) All customary formalities regarding the separate existence of each Loan Party
have been at all times since its formation observed.

(ii) Each Loan Party has at all times since its formation accurately maintained its
financial statements, accounting records and other organizational documents separate from those of
any Affiliate of such Loan Party and any other Person (except that the Loan Parties report publicly
on a consolidated basis). No Loan Party has at any time since its formation commingled its assets
with those of any of its Affiliates or any other Person. Each Loan Party has at all times since
its formation accurately maintained its own bank accounts and separate books of account.

(iii) Each Loan Party has at all times since its formation identified itself in all
dealings with the public, under its own name and as a separate and distinct Person. No Loan Party
has at any time since its formation identified itself as being a division or a part of any other
Person.

(dd) Name; Jurisdiction of Organization; Organizational ID Number; Chief Place
of Business; Chief Executive Office; FEIN. Schedule 6.01(dd) sets forth a complete and
accurate list as of the date hereof of (i) the exact legal name of each Loan Party, (ii) the
jurisdiction of organization of each Loan Party, (iii) the organizational identification number of
each Loan Party (or indicates that such Loan Party has no organizational identification number),
(iv) each place of business of each Loan Party, (v) the chief executive office of each Loan Party
and (vi) the federal employer identification number of each Loan Party.

(ee) Tradenames. Schedule 6.01(ee) hereto sets forth a complete and
accurate list as of the Effective Date of all tradenames used by each Loan Party.

(ff) Locations of Collateral. There is no location at which any Loan Party
has any Collateral (except for Inventory in transit) other than (i) those locations listed on
Schedule 6.01(ff) and (ii) any other locations approved in writing by the Collateral Agent
from time to time. Schedule 6.01(ff) hereto contains a true, correct and complete list, as
of the Effective Date, of the legal names and addresses of each warehouse at which Collateral of
each Loan Party is stored. None of the receipts received by any Loan Party from any warehouse
states that the goods covered thereby are to be delivered to bearer or to the order of a named
Person or to a named Person and such named Person’s assigns.

(gg) Security Interests. Each Security Agreement creates in favor of the
Collateral Agent, for the benefit of the Agents and the Lenders, a legal, valid and enforceable
security interest in the Collateral covered thereby. Upon the filing of the financing statements
described in Section 5.01(d)(iv), such security interests in and Liens on the Collateral
granted thereby in which a security interest is perfected by filing of a financing statement under
the Code shall be perfected, second priority security interests (subject to Permitted Liens), and
no further recordings or filings are or will be required in connection with the creation,
perfection or enforcement of such security interests and Liens.

(hh) Schedules. All of the information which is required to be scheduled to
this Agreement is set forth on the Schedules attached hereto, is correct and accurate and does not
omit to state any information material thereto.

(ii) Representations and Warranties in Documents; No Default. All
representations and warranties set forth in this Agreement and the other Loan Documents are true
and correct in all respects at the time as of which such representations were made and on the
Effective Date. No Event of Default has occurred and is continuing and no condition exists which
constitutes a Default or an Event of Default.

(jj) Acquisition Documents.

(i) As of the Effective Date, the Borrower has delivered to the Agents complete and
correct copies of the material Annaco Acquisition Documents (including all schedules, exhibits,
amendments, supplements, modifications, and assignments). No Loan Party that is a party to the
Annaco Acquisition Documents is in default in the performance or compliance with any provisions
thereof. The Annaco Acquisition Documents comply in all material respects with, and the Annaco
Acquisition has been, as of the Effective Date, consummated in accordance with, in all material
respects, all applicable laws (including HSR). The Annaco Acquisition Documents are in full force
and effect as of the Effective Date and have not been terminated, rescinded or withdrawn as of such
date. The execution, delivery and performance of the Annaco Acquisition Documents do not and will
not require any registration with, consent, or approval of, or notice to, or other action with or
by, any Governmental Authority, other than consents or approvals that have been obtained and that
are still in full force and effect. To the best of the Loan Parties’ knowledge, none of the
representations or warranties of any other Person in any of the Annaco Acquisition Documents
contains any untrue statement of a material fact or omits any fact necessary to make the statements
therein not misleading.

(ii) As of the Term Loan B Funding Date, the Borrower has delivered to the Agents
complete and correct copies of the material Totalcat Acquisition Documents (including all
schedules, exhibits, amendments, supplements, modifications, and assignments). No Loan Party that
is a party to the Totalcat Acquisition Documents is in default in the performance or compliance
with any provisions thereof. The Totalcat Acquisition Documents comply in all material respects
with, and the Totalcat Acquisition has been, as of the Term Loan B Funding Date, consummated in
accordance with, in all material respects, all applicable laws (including HSR). The Totalcat
Acquisition Documents are in full force and effect as of the Term Loan B Funding Date and have not
been terminated, rescinded or withdrawn as of such date. The execution, delivery and performance
of the Totalcat Acquisition Documents do not and will not require any registration with, consent,
or approval of, or notice to, or other action with or by, any Governmental Authority, other than
consents or approvals that have been obtained and that are still in full force and effect. To the
best of the Loan Parties’ knowledge, none of the representations or warranties of any other Person
in any of the Totalcat Acquisition Documents contains any untrue statement of a material fact or
omits any fact necessary to make the statements therein not misleading.

ARTICLE VII

COVENANTS OF THE LOAN PARTIES

Section 7.01 Affirmative Covenants. So long as any principal of or interest
on any Loan, or any other Obligation (other than unasserted contingent indemnification Obligations)
shall remain unpaid or any Lender shall have any Commitment hereunder, each Loan Party will and
will cause each of its Subsidiaries to:

(a) Reporting Requirements. Furnish to each Agent and each Lender:

(i) as soon as available and in any event within 45 days after the end of each
fiscal quarter of the Borrower, consolidated and consolidating balance sheets, consolidated and
consolidating statements of operations and retained earnings and consolidated and consolidating
statements of cash flows of the Borrower and its Subsidiaries as at the end of such quarter, and
for the period commencing at the end of the immediately preceding Fiscal Year and ending with the
end of such quarter, setting forth in each case in comparative form the figures for the
corresponding date or period of the immediately preceding Fiscal Year, all in reasonable detail and
certified by an Authorized Officer of the Borrower as fairly presenting, in all material respects,
the financial position of the Borrower and its Subsidiaries as of the end of such quarter and the
results of operations and cash flows of the Borrower and its Subsidiaries for such quarter, in
accordance with GAAP applied in a manner consistent with that of the most recent audited financial
statements of the Borrower and its Subsidiaries furnished to the Agents and the Lenders, subject to
normal year-end audit adjustments and the absence of footnotes;

(ii) as soon as available, and in any event within 90 days after the end of each
Fiscal Year of the Borrower and its Subsidiaries, consolidated and consolidating balance sheets,
consolidated and consolidating statements of operations and retained earnings and consolidated and
consolidating statements of cash flows of the Borrower and its Subsidiaries as at the end of such
Fiscal Year, setting forth in each case in comparative form the corresponding figures for the
immediately preceding Fiscal Year, all in reasonable detail and prepared in accordance with GAAP,
and accompanied by a report and an unqualified opinion, prepared in accordance with generally
accepted auditing standards, of independent certified public accountants of recognized standing
selected by the Borrower and satisfactory to the Agents (which opinion shall be without (A) a
“going concern” or like qualification or exception, (B) any qualification or exception as to the
scope of such audit, or (C) any qualification which relates to the treatment or classification of
any item and which, as a condition to the removal of such qualification, would require an
adjustment to such item, the effect of which would be to cause any noncompliance with the
provisions of Section 7.03, together with a written statement of such accountants (1) to
the effect that, in making the examination necessary for their audit of such financial statements,
they have not obtained any knowledge of the existence of an Event of Default or a Default under
Section 7.03 and (2) if such accountants shall have obtained any knowledge of the existence
of an Event of Default or such Default under Section 7.03, describing the nature thereof;

(iii) as soon as available, and in any event within 30 days after the end of each
fiscal month of the Borrower and its Subsidiaries, internally prepared consolidated and
consolidating balance sheets, consolidated and consolidating statements of operations and retained
earnings and consolidated and consolidating statements of cash flows as at the end of such fiscal
month, and for the period commencing at the end of the immediately preceding Fiscal Year and ending
with the end of such fiscal month, in each case, all in reasonable detail and certified by an
Authorized Officer of the Borrower as fairly presenting, in all material respects, the financial
position of the Borrower and its Subsidiaries as at the end of such fiscal month and the results of
operations, retained earnings and cash flows of the Borrower and its Subsidiaries for such fiscal
month, in accordance with GAAP applied in a manner consistent with that of the most recent audited
financial statements furnished to the Agents and the Lenders, subject to normal year-end audit
adjustments and the absence of footnotes;

(iv) simultaneously with the delivery of the financial statements of the Borrower
and its Subsidiaries required by clauses (i), (ii) and (iii) of this Section 7.01(a), a
certificate of an Authorized Officer of the Borrower (A) stating that such Authorized Officer has
reviewed the provisions of this Agreement and the other Loan Documents and has made or caused to be
made under his or her supervision a review of the condition and operations of the Borrower and its
Subsidiaries during the period covered by such financial statements with a view to determining
whether the Borrower and its Subsidiaries were in compliance with all of the provisions of this
Agreement and such Loan Documents at the times such compliance is required hereby and thereby, and
that such review has not disclosed, and such Authorized Officer has no knowledge of, the existence
during such period of an Event of Default or Default or, if an Event of Default or Default existed,
describing the nature and period of existence thereof and the action which the Borrower and its
Subsidiaries propose to take or have taken with respect thereto and (B) attaching a schedule
showing the calculation of the financial covenants specified in Section 7.03;

(v) [intentionally omitted];

(vi) [intentionally omitted].

(vii) no later than 30 days preceding each Fiscal Year, financial projections,
supplementing and superseding the financial projections for the period referred to in
Section 6.01(g)(ii)(A) (but in any event including balance sheets, income statements, and
statements of cash flows), displayed on a month by month basis and otherwise in form and substance
reasonably satisfactory to the Agents for such Fiscal Year for the Borrower and its Subsidiaries,
all such financial projections to be prepared on a reasonable basis and in good faith, and to be
based on assumptions believed by the Borrower to be reasonable at the time made and from the best
information then available to the Borrower;

(viii) promptly after submission to any Governmental Authority, all documents and
information furnished to such Governmental Authority in connection with any investigation of any
Loan Party other than routine inquiries by such Governmental Authority;

(ix) as soon as possible, and in any event within 3 Business Days of an Authorized
Officer’s knowledge of an Event of Default or Default or the occurrence of any event or development
that could reasonably be expected to result in a Material Adverse Effect, the written statement of
an Authorized Officer of the Borrower setting forth the details of such Event of Default or Default
or other event or development having a Material Adverse Effect and the action which the affected
Loan Party proposes to take with respect thereto;

(x) (A) as soon as possible and in any event within 10 days after any Loan Party or
any ERISA Affiliate thereof knows or has reason to know that (1) any Reportable Event with respect
to any Employee Plan has occurred, (2) any other Termination Event with respect to any Employee
Plan has occurred, or (3) an accumulated funding deficiency has been incurred or an application has
been made to the Secretary of the Treasury for a waiver or modification of the minimum funding
standard (including installment payments) or an extension of any amortization period under Section
412 of the IRC with respect to an Employee Plan, a statement of an Authorized Officer of the
Borrower setting forth the details of such occurrence and the action, if any, which such Loan Party
or such ERISA Affiliate proposes to take with respect thereto, (B) promptly and in any event within
3 days after receipt thereof by any Loan Party or any ERISA Affiliate thereof from the PBGC, copies
of each notice received by any Loan Party or any ERISA Affiliate thereof of the PBGC’s intention to
terminate any Plan or to have a trustee appointed to administer any Plan, (C) promptly and in any
event within 10 days after the filing thereof with the Internal Revenue Service if requested by any
Agent, copies of each Schedule B (Actuarial Information) to the annual report (Form 5500 Series)
with respect to each Employee Plan and Multiemployer Plan, (D) promptly and in any event within 10
days after any Loan Party or any ERISA Affiliate thereof knows or has reason to know that a
required installment within the meaning of Section 412 of the IRC has not been made when due with
respect to an Employee Plan, (E) promptly and in any event within 3 days after receipt thereof by
any Loan Party or any ERISA Affiliate thereof from a sponsor of a Multiemployer Plan or from the
PBGC, a copy of each notice received by any Loan Party or any ERISA Affiliate thereof concerning
the imposition or amount of withdrawal liability under Section 4202 of ERISA or indicating that
such Multiemployer Plan may enter reorganization status under Section 4241 of ERISA, and (F)
promptly and in any event within 10 days after any Loan Party or any ERISA Affiliate thereof sends
notice of a plant closing or mass layoff (as defined in WARN) to employees, copies of each such
notice sent by such Loan Party or such ERISA Affiliate thereof;

(xi) promptly after the commencement thereof but in any event not later than 5
Business Days after service of process with respect thereto on, or the obtaining of knowledge
thereof by, any Loan Party, notice of each action, suit or proceeding before any court or other
Governmental Authority or other regulatory body or any arbitrator which, if adversely determined,
could reasonably be expected to result in a Material Adverse Effect;

(xii) as soon as possible and in any event within 5 Business Days after execution,
receipt or delivery thereof, copies of any material notices that any Loan Party executes or
receives in connection with any Material Contract;

(xiii) promptly after the sending or filing thereof, copies of all statements,
reports and other information any Loan Party sends to any holders of its Indebtedness or its
securities or files with the SEC or any national (domestic or foreign) securities exchange;

(xiv) promptly upon receipt thereof, copies of all financial reports (including
management letters), if any, submitted to any Loan Party by its auditors in connection with any
annual or interim audit of the books thereof;

(xv) to the extent not already provided to the Agents, copies of any notices,
reports, certificates or other documentation as to the assets, financial condition or affairs of
the Borrower and its Subsidiaries (including any financial projections) that are required to be
delivered to Foothill (collectively, the “Foothill Reports”), in each case on or before the
date when such Foothill Reports are required to be delivered to Foothill pursuant to the Foothill
Loan Agreement, as in effect on the date hereof;

(xvi) promptly after the date on which a Loan Party has actual knowledge of the
existence thereof, a description of any commercial tort claim that such Loan Party obtains after
the Effective Date; and

(xvii) promptly upon request, such other information concerning the condition or
operations, financial or otherwise, of any Loan Party as any Agent may from time to time may
reasonably request.

(b) Additional Guaranties and Collateral Security. Cause:

(i) each Subsidiary of any Loan Party created or acquired after the Effective Date
(the “New Subsidiary”) to execute and deliver to the Collateral Agent promptly and in any
event within 5 Business Days after the formation or acquisition thereof (A) a Guaranty guaranteeing
the Obligations, (B) a Security Agreement, together with (x) if such New Subsidiary has any
Domestic Subsidiaries, (I) certificates (if any) evidencing all of the Capital Stock of such
Subsidiary owned by such New Subsidiary (provided that this clause may be satisfied by delivering
such certificates to Foothill for so long as the Foothill Loan Agreement is in existence),
(II) undated stock powers executed in blank (provided that this clause may be satisfied by
delivering such documents to Foothill for so long as the Foothill Loan Agreement is in existence),
and (III) such opinions of counsel and such approving certificate of such Subsidiary as either
Agent may reasonably request in respect of complying with any legend on any such certificate or any
other matter relating to such shares, and (y) if such New Subsidiary has any first-tier
Subsidiaries that are CFCs, (I) certificates (if any) evidencing all (or, 65% of the outstanding
voting Capital Stock of such Subsidiary if pledging or hypothecating more than 65% of the total
outstanding voting Capital Stock of such Subsidiary reasonably could be expected to result in
material adverse tax consequences to the Loan Parties) of the outstanding voting Capital Stock of
such Subsidiary (provided that this clause may be satisfied by delivering such certificates to
Foothill for so long as the Foothill Loan Agreement is in existence), (II) undated stock powers
executed in blank with signature guaranteed (provided that this clause may be satisfied by
delivering such documents to Foothill for so long as the Foothill Loan Agreement is in existence),
and (III) such opinions of counsel and such approving certificate of such Subsidiary as either
Agent may reasonably request in respect of complying with any legend on any such certificate or any
other matter relating to such shares, (C) if such New Subsidiary has a fee interest in any real
property that would constitute After Acquired Property if it were acquired by a Loan Party, one or
more Mortgages creating on such real property a perfected, second priority (subject to Permitted
Liens) Lien on such real property, a Title Insurance Policy covering such real property, a current
ALTA survey of such real property and a surveyor’s certificate, a Phase I Environmental Site
Assessment with respect to such real property, certified to the Collateral Agent by a company
reasonably satisfactory to the Collateral Agent, each in form and substance reasonably satisfactory
to the Agents, together with such other agreements, instruments and documents as either Agent may
reasonably require whether comparable to the documents required under Section 7.01(o) or
otherwise, and (D) such other agreements, instruments, approvals, legal opinions, or other
documents reasonably requested by either Agent in order to create, perfect, establish the second
priority (subject to Permitted Liens) of or otherwise protect any Lien purported to be covered by
any such Security Agreement or Mortgage, or otherwise to effect the intent that such New Subsidiary
shall become bound by all of the terms, covenants and agreements contained in the Loan Documents
and that all property and assets of such New Subsidiary shall become Collateral for the
Obligations; provided that the foregoing Guaranty, Security Agreement and Mortgage shall
not be required to be provided to the Collateral Agent with respect to any New Subsidiary of a Loan
Party that is a CFC if providing such documents would result in material adverse tax consequences
to the Loan Parties; and

(ii) each Loan Party that is the owner of the Capital Stock of such New Subsidiary
to execute and deliver promptly and in any event within 5 Business Days after the formation or
acquisition of such New Subsidiary a joinder to the Security Agreement (if it is not already a
party thereto), together with (A) if such New Subsidiary is not a CFC or is a CFC and the pledge of
100% of the voting Capital Stock of such CFC would not result in material adverse tax consequences
to the Loan Parties, (w) certificates (if any) evidencing all of the Capital Stock of such New
Subsidiary owned by such Loan Party (provided that this clause may be satisfied by delivering such
certificates to Foothill for so long as the Foothill Loan Agreement is in existence), (x) undated
stock powers or other appropriate instruments or assignment executed in blank with signature
guaranteed (provided that this clause may be satisfied by delivering such documents to Foothill for
so long as the Foothill Loan Agreement is in existence), (y) such opinions of counsel and such
approving certificate of such New Subsidiary as the Agents may reasonably request in respect of
complying with any legend on any such certificate or any other matter relating to such shares, and
(z) such other agreements, instruments, approvals, legal opinions, or other documents, or (B) if
such New Subsidiary is a CFC and the granting of a pledge of more than 65% of the voting Capital
Stock of such CFC would result in material adverse tax consequences to the Loan Parties,
(w) certificates (if any) evidencing 65% of the outstanding voting Capital Stock of such New
Subsidiary (provided that this clause may be satisfied by delivering such certificates to Foothill
for so long as the Foothill Loan Agreement is in existence), (x) undated stock powers or other
appropriate instruments or assignment executed in blank with signature guarantee (provided that
this clause may be satisfied by delivering such documents to Foothill for so long as the Foothill
Loan Agreement is in existence), (y) such opinions of counsel and such approving certificate of
such New Subsidiary as the Agents may reasonably request in respect of complying with any legend on
any such certificate or any other matter relating to such shares, and (z) such other agreements,
instruments, approvals, legal opinions, or other documents reasonably requested by either Agent.

(c) Compliance with Laws, Etc. Comply, and cause each of its Subsidiaries
to comply, in all material respects with all applicable laws, rules, regulations, orders
(including, without limitation, all Environmental Laws), judgments and awards (including any
settlement of any claim that, if breached, could give rise to any of the foregoing), such
compliance to include (i) paying before the same become delinquent all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits or upon any of its
properties, and (ii) paying all other lawful claims which if unpaid might become a Lien or charge
upon any of its properties, except, in each case, to the extent contested in good faith by proper
proceedings which stay the imposition of any penalty, fine or Lien resulting from the non-payment
thereof and with respect to which adequate reserves have been set aside for the payment thereof in
accordance with GAAP.

(d) Preservation of Existence, Etc. Maintain and preserve, and cause each
of its Subsidiaries to maintain and preserve, its existence, rights and privileges, and become or
remain, and cause each of its Subsidiaries to become or remain, duly qualified and in good standing
in each jurisdiction in which the character of the properties owned or leased by it or in which the
transaction of its business makes such qualification necessary.

(e) Keeping of Records and Books of Account. Keep, and cause each of its
Subsidiaries to keep, adequate records and books of account, with complete entries made to permit
the preparation of financial statements in accordance with GAAP.

(f) Inspection Rights. Permit, and cause each of its Subsidiaries to
permit, the agents and representatives of any Agent at any time and from time to time during normal
business hours, upon reasonable advance notice (so long as no Default or Event of Default has
occurred and is continuing) at the expense of the Borrower, to examine and make copies of and
abstracts from its records and books of account, to visit and inspect its properties, to verify
leases, notes, accounts receivable, deposit accounts and its other assets, to conduct audits,
physical counts, valuations, appraisals, Phase I Environmental Site Assessments (and, if requested
by the Collateral Agent based upon the results of any such Phase I Environmental Site Assessment, a
Phase II Environmental Site Assessment) or examinations and to discuss its affairs, finances and
accounts with any of its directors, officers, managerial employees, independent accountants or any
of its other representatives; provided that so long as no Default or Event of Default shall
have occurred and be continuing, (i) the Borrower shall not be obligated to pay for more than 1
such audit and more than 1 such valuation in any Fiscal Year, and (ii) the Borrower shall not be
obligated to pay for any appraisals, Phase I Environmental Site Assessments, or Phase II
Environmental Site Assessments unless an event occurs or a fact comes to light after the Effective
Date that establishes the need for such appraisal or assessment, as determined by Agents in their
sole discretion.

(g) Maintenance of Properties, Etc. Maintain and preserve, and cause each
of its Subsidiaries to maintain and preserve, all of its properties which are necessary or useful
in the proper conduct of its business in good working order and condition, ordinary wear and tear
excepted, and comply, and cause each of its Subsidiaries to comply, at all times with the
provisions of all leases to which it is a party as lessee or under which it occupies property, so
as to prevent any loss or forfeiture thereof or thereunder.

(h) Maintenance of Insurance. Maintain, and cause each of its Subsidiaries
to maintain, insurance with responsible and reputable insurance companies or associations
(including comprehensive general liability, hazard, rent and business interruption insurance) with
respect to its properties (including all real properties leased or owned by it) and business, in
such amounts and covering such risks as is required by any Governmental Authority having
jurisdiction with respect thereto or as is carried generally in accordance with sound business
practice by companies in similar businesses similarly situated and in any event in amount, adequacy
and scope reasonably satisfactory to the Collateral Agent. All policies covering the Collateral
are to be made payable to the Collateral Agent for the benefit of the Agents and the Lenders, as
its interests may appear, in case of loss, under a standard non-contributory “lender” or “secured
party” clause and are to contain such other provisions as the Collateral Agent may require to fully
protect the Lenders’ interest in the Collateral and to any payments to be made under such policies.
All certificates of insurance are to be delivered to the Collateral Agent and the policies are to
be premium prepaid, with the loss payable and additional insured endorsement in favor of the
Collateral Agent and such other Persons as the Collateral Agent may designate from time to time,
and shall provide for not less than 30 days prior written notice to the Collateral Agent of the
exercise of any right of cancellation (or, in the case of cancellation for non-payment of premium,
10 days prior written notice to the Collateral Agent). If any Loan Party or any of its
Subsidiaries fails to maintain such insurance, the Collateral Agent may arrange for such insurance,
but at the Borrower’s expense and without any responsibility on the Collateral Agent’s part for
obtaining the insurance, the solvency of the insurance companies, the adequacy of the coverage, or
the collection of claims. Upon the occurrence and during the continuance of an Event of Default,
the Collateral Agent shall have the sole right, in the name of the Lenders, any Loan Party and its
Subsidiaries, to file claims under any insurance policies, to receive, receipt and give acquittance
for any payments that may be payable thereunder, and to execute any and all endorsements, receipts,
releases, assignments, reassignments or other documents that may be necessary to effect the
collection, compromise or settlement of any claims under any such insurance policies.

(i) Obtaining of Permits, Etc. Obtain, maintain and preserve, and cause
each of its Subsidiaries to obtain, maintain and preserve, and take all necessary action to timely
renew, all permits, licenses, authorizations, approvals, entitlements and accreditations which are
necessary or useful in the proper conduct of its business.

(j) Environmental. (i)  Keep any property either owned or operated by it or
any of its Subsidiaries free of any Environmental Liens; (ii) comply, and cause each of its
Subsidiaries to comply, in all material respects with Environmental Laws and provide to the
Collateral Agent any documentation of such compliance which the Collateral Agent may reasonably
request; (iii) provide the Agents written notice within 5 days of any Release of a Hazardous
Material in excess of any reportable quantity from or onto property owned or operated by it or any
of its Subsidiaries and take any Remedial Actions required to abate said Release; (iv) maintain a
reserve on its Books in such amount as is required under GAAP with respect to all Environmental
Liabilities and Costs; (v) promptly provide the Agents with written notice within 10 days of the
receipt of any of the following: (A) notice that an Environmental Lien has been filed against any
property of any Loan Party or any of its Subsidiaries; (B) commencement of any Environmental Action
or notice that an Environmental Action will be filed against any Loan Party or any of its
Subsidiaries; and (C) notice of a violation, citation or other administrative order which could
reasonably be expected to result in a Material Adverse Effect; and (vi) defend, indemnify and hold
harmless the Agents and the Lenders and their transferees, and their respective employees, agents,
officers and directors, from and against any claims, demands, penalties, fines, liabilities,
settlements, damages, costs or expenses (including attorney and consultant fees, investigation and
laboratory fees, court costs and litigation expenses) arising out of (A) the presence, disposal,
release or threatened release of any Hazardous Materials on any property at any time owned or
occupied by any Loan Party or any of its Subsidiaries (or its predecessors in interest or title),
(B) any personal injury (including wrongful death) or property damage (real or personal) arising
out of or related to such Hazardous Materials, (C) any investigation, lawsuit brought or
threatened, settlement reached or government order relating to such Hazardous Materials, (D) any
violation of any Environmental Law arising in connection with any property at any time owned or
occupied by any Loan Party or any of its Subsidiaries (or its predecessors in interest or title) or
(E) any Environmental Action filed against any Agent or any Lender arising in connection with any
property at any time owned or occupied by any Loan Party or any of its Subsidiaries (or its
predecessors in interest or title).

(k) Further Assurances. Take such action and execute, acknowledge and
deliver, and cause each of its Subsidiaries to take such action and execute, acknowledge and
deliver, at its sole cost and expense, such agreements, instruments or other documents as any Agent
may require from time to time in order (i) to carry out more effectively the purposes of this
Agreement and the other Loan Documents, (ii) to subject to valid and perfected second priority
Liens (subject to Permitted Liens) any of the Collateral or any other property (including
commercial tort claims, deposit accounts, securities accounts and commodities accounts) of any Loan
Party and its Subsidiaries, (iii) to establish and maintain the validity and effectiveness of any
of the Loan Documents and the validity, perfection and priority of the Liens intended to be created
thereby, and (iv) to better assure, convey, grant, assign, transfer and confirm unto each Agent and
each Lender the rights now or hereafter intended to be granted to it under this Agreement or any
other Loan Document. In furtherance of the foregoing, to the maximum extent permitted by
applicable law, each Loan Party (A) if a Loan Party has failed to comply with its undertakings in
this Section promptly after a written request therefor, authorizes each Agent to execute any such
agreements, instruments or other documents in such Loan Party’s name and to file such agreements,
instruments or other documents in any appropriate filing office, (B) authorizes each Agent to file
any financing statement required hereunder or under any other Loan Document, and any continuation
statement or amendment with respect thereto, in any appropriate filing office without the signature
of such Loan Party, and (C) ratifies the filing of any financing statement, and any continuation
statement or amendment with respect thereto, filed without the signature of such Loan Party prior
to the date hereof.

(l) Change in Collateral; Collateral Records. (i) Give the Collateral
Agent not less than 30 days prior written notice of any change in the location of any Collateral,
other than to (or in-transit between) locations set forth on Schedule 6.01(ff) and with
respect to which the Collateral Agent has filed financing statements and otherwise fully perfected
its Liens thereon, (ii) advise the Collateral Agent promptly, in sufficient detail, of any material
adverse change relating to the type, quantity or quality of the Collateral or the Lien granted
thereon and (iii) execute and deliver, and cause each of its Subsidiaries to execute and deliver,
to the Collateral Agent for the benefit of the Agents and the Lenders from time to time, solely for
the Collateral Agent’s convenience in maintaining a record of Collateral, such written statements
and schedules as the Collateral Agent may reasonably require, designating, identifying or
describing the Collateral.

(m) Landlord Waivers; Collateral Access Agreements.

(i) At any time any Collateral with a book value in excess of $500,000 is located on
any real property of the Borrower or any other Loan Party (whether such real property is now
existing or acquired after the Effective Date) which is not owned by the Borrower or any other Loan
Party, use commercially reasonable efforts to obtain written subordinations or waivers, in form and
substance satisfactory to the Collateral Agent, of all present and future Liens to which the owner
or lessor of such premises may be entitled to assert against the Collateral; and

(ii) Use commercially reasonable efforts to obtain written access agreements, in
form and substance satisfactory to the Collateral Agent, providing access to Collateral located on
any premises not owned by the Borrower or any other Loan Party in order to remove such Collateral
from such premises during an Event of Default.

(n) Subordination. Cause all Indebtedness and other obligations now or
hereafter owed by it to any of its Affiliates, to be subordinated in right of payment and security
to the Indebtedness and other Obligations owing to the Agents and the Lenders in accordance with a
subordination agreement in form and substance satisfactory to the Agents.

(o) After Acquired Property. Upon the acquisition by it or any of its
Subsidiaries of any After Acquired Property, promptly so notify the Collateral Agent, setting forth
with specificity a description of the interest acquired, the location of the real property, any
structures or improvements thereon and either an appraisal or such Loan Party’s good-faith estimate
of the current value of such real property (for purposes of this Section, the “Current
Value”). The Collateral Agent shall notify such Loan Party whether it intends to require a
Mortgage and the other documents referred to below or in the case of leasehold, a leasehold
Mortgage or landlord’s waiver (pursuant to Section 7.01(m) hereof). Upon receipt of such
notice requesting a Mortgage, the Person which has acquired such After Acquired Property shall
promptly furnish to the Collateral Agent the following, each in form and substance satisfactory to
the Collateral Agent: (i) a Mortgage with respect to such real property and related assets located
at the After Acquired Property, each duly executed by such Person and in recordable form;
(ii) evidence of the recording of the Mortgage referred to in clause (i) above in such office or
offices as may be necessary or, in the opinion of the Collateral Agent, desirable to create and
perfect a valid and enforceable second priority (subject to Permitted Liens) lien on the property
purported to be covered thereby or to otherwise protect the rights of the Agents and the Lenders
thereunder, (iii) a Title Insurance Policy, (iv) a survey of such real property, certified to the
Collateral Agent and to the issuer of the Title Insurance Policy by a licensed professional
surveyor reasonably satisfactory to the Collateral Agent, (v) Phase I Environmental Site
Assessments with respect to such real property, certified to the Collateral Agent by a company
reasonably satisfactory to the Collateral Agent, (vi) in the case of a leasehold interest, a
certified copy of the lease between the landlord and such Person with respect to such real property
in which such Person has a leasehold interest, and the certificate of occupancy with respect
thereto, (vii) in the case of a leasehold interest, an attornment and nondisturbance agreement
between the landlord (and any fee mortgagee) with respect to such real property and the Collateral
Agent, and (viii) such other documents or instruments (including guarantees and opinions of
counsel) as the Collateral Agent may reasonably require. The Borrower shall pay all fees and
expenses, including reasonable attorneys’ fees and expenses, and all title insurance charges and
premiums, in connection with each Loan Party’s obligations under this Section 7.01(o).

(p) Fiscal Year. Cause the Fiscal Year of the Borrower and its Subsidiaries
to end on December 31st of each calendar year unless the Agents consent to a change in such fiscal
year of Borrower and its Subsidiaries (and appropriate related changes to this Agreement).

Section 7.02 Negative Covenants. So long as any principal of or interest on
any Loan, or any other Obligation (other than unasserted contingent indemnification Obligations)
shall remain unpaid or any Lender shall have any Commitment hereunder, each Loan Party shall not
and shall not permit any of its Subsidiaries to:

(a) Liens, Etc. Create, incur, assume or suffer to exist, or permit any of
its Subsidiaries to create, incur, assume or suffer to exist, any Lien upon or with respect to any
of its properties, whether now owned or hereafter acquired; file or suffer to exist under the
Uniform Commercial Code or any similar law or statute of any jurisdiction, a financing statement
(or the equivalent thereof) that names it or any of its Subsidiaries as debtor; sign or suffer to
exist any security agreement authorizing any secured party thereunder to file such financing
statement (or the equivalent thereof); sell any of its property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such property or assets
(including sales of accounts receivable) with recourse to it or any of its Subsidiaries or assign
or otherwise transfer, or permit any of its Subsidiaries to assign or otherwise transfer, any
account or other right to receive income; other than, as to all of the above, Permitted Liens.

(b) Indebtedness. Create, incur, assume, guarantee or suffer to exist, or
otherwise become or remain liable with respect to, or permit any of its Subsidiaries to create,
incur, assume, guarantee or suffer to exist or otherwise become or remain liable with respect to,
any Indebtedness other than Permitted Indebtedness.

(c) Fundamental Changes; Dispositions. Wind-up, liquidate or dissolve, or
merge, consolidate or amalgamate with any Person, or convey, sell, lease or sublease, transfer or
otherwise dispose of, whether in one transaction or a series of related transactions, all or any
part of its business, property or assets, whether now owned or hereafter acquired (or agree to do
any of the foregoing), or purchase or otherwise acquire, whether in one transaction or a series of
related transactions, all or substantially all of the assets of any Person (or any division
thereof) (or agree to do any of the foregoing), or permit any of its Subsidiaries to do any of the
foregoing; provided, however, that

(i) any wholly-owned Subsidiary of any Loan Party (other than the Borrower) may be
merged into such Loan Party or another wholly-owned Subsidiary of such Loan Party, or may
consolidate with another wholly-owned Subsidiary of such Loan Party, so long as (A) no other
provision of this Agreement would be violated thereby, (B) such Loan Party gives the Agents at
least 10 Business Days prior written notice of such merger or consolidation, (C) no Default or
Event of Default shall have occurred and be continuing either before or after giving effect to such
transaction, (D) the Lenders’ rights in any Collateral, including the existence, perfection and
priority of any Lien thereon, are not adversely affected by such merger or consolidation and
(E) the surviving Subsidiary, if any, is joined as a Loan Party hereunder and is a party to a
Guaranty and a Security Agreement and the Capital Stock of which Subsidiary is the subject of a
Security Agreement, in each case, which is in full force and effect on the date of and immediately
after giving effect to such merger or consolidation;

(ii) the Borrower may dissolve or liquidate any or all of its interest in Gulf Coast
Recycling, Inc., so long as (A) no other provision of this Agreement would be violated thereby, (B)
the Borrower gives the Agents at least 30 days prior written notice of such dissolution or
liquidation, (C) no Default or Event of Default shall have occurred and be continuing either before
or immediately after giving effect to such transaction, (D) the rights of the Agents and the
Lenders in any Collateral, including the existence, perfection and priority of any Lien thereon,
are not adversely affected by such dissolution or liquidation, and (E) at the effective time of
such dissolution or liquidation, Gulf Coast Recycling, Inc. shall have no assets having any
significant value;

(iii) any Loan Party and its Subsidiaries may make Permitted Dispositions; and

(iv) the Borrower may consummate the Acquisitions.

(d) Change in Nature of Business; Change in Independent Certified Public
Accountant. Make, or permit any of its Subsidiaries to make, any change in the nature of its
business as described in Section 6.01(l) or acquire any properties or assets that are not
reasonably related to the conduct of such business activities. Make any change in its independent
certified public accountant without the prior written consent of the Agents, which consent shall
not be unreasonably withheld or delayed.

(e) Loans, Advances, Investments, Etc. Make or commit or agree to make any
loan, advance guarantee of obligations, other extension of credit or capital contributions to, or
hold or invest in or commit or agree to hold or invest in, or purchase or otherwise acquire or
commit or agree to purchase or otherwise acquire any shares of the Capital Stock, bonds, notes,
debentures or other securities of, or make or commit or agree to make any other investment in, any
other Person, or purchase or own any futures contract or otherwise become liable for the purchase
or sale of currency or other commodities at a future date in the nature of a futures contract, or
purchase all or substantially all of the assets of any other Person, or permit any of its
Subsidiaries to do any of the foregoing, except for: (i) investments existing on the date hereof,
as set forth on Schedule 7.02(e) hereto, but not any increase in the amount thereof as set
forth in such Schedule or any other modification of the terms thereof, (ii) temporary loans and
advances by a Loan Party to another Loan Party, made in the ordinary course of business,
(iii) Permitted Investments, provided that the Borrower and its Subsidiaries shall not have
Permitted Investments in excess of $500,000 outstanding at any one time unless the Borrower or the
applicable Subsidiary and the applicable securities intermediary or bank have entered into control
agreements or similar arrangements governing such Permitted Investments, as the Collateral Agent
shall determine in its reasonable discretion, to perfect (and further establish) the the Collateral
Agent’s Liens in such Permitted Investments, (iv) purchases of metals by a Loan Party or one of its
Subsidiaries other than if such purchase is not for ordinary course business operations, but
instead is to speculate on trends and shifts in commodities markets, (v) purchases of options or
future contracts for metals by a Loan Party or one of its Subsidiaries to be used to hedge against
fluctuations in the prices of Inventory so long as (A) no Default or Event of Default shall have
occurred and be continuing, (B) such purchases are made as a part of such Person’s normal business
operations and consistent with past practices, and (C) such purchases are not made as a means to
speculate for investment purposes on trends and shifts in commodities markets, (vi) the purchase by
the Borrower of 82.5% of the Capital Stock in connection with the Totalcat Acquisition, (v) the
purchase by the Borrower of the Capital Stock of Totalcat not acquired on the Term Loan B Funding
Date in accordance with the terms of the Totalcat Acquisition Documents (whether by means of a put
or a call) prior to the date that is 60 days after the second anniversary of the Term Loan B
Funding Date], so long as (A) no Default or Event of Default shall have occurred and be continuing,
and (B) after giving effect to such purchase, the sum of Availability plus Qualified Cash shall not
be less than $5,000,000, and (vi) the Beacon Investment, so long as (A) no Default or Event of
Default shall have occurred and be continuing, and (B) after giving effect to such investment, the
sum of Availability plus Qualified Cash shall not be less than $2,000,000.

(f) Lease Obligations. Create, incur or suffer to exist, or permit any of
its Subsidiaries to create, incur or suffer to exist, any obligations as lessee (i) for the payment
of rent for any real or personal property in connection with any sale and leaseback transaction, or
(ii) for the payment of rent for any real or personal property under leases or agreements to lease
other than (A) Capitalized Lease Obligations which would not cause the aggregate amount of all
obligations under Capitalized Leases entered into after the Effective Date owing by all Loan
Parties and their Subsidiaries in any Fiscal Year to exceed the amounts set forth in
Section 7.03(e), and (B) Operating Lease Obligations.

(g) [intentionally omitted].

(h) Restricted Payments.  (i)  Declare or pay any dividend or other
distribution, direct or indirect, on account of any Capital Stock of any Loan Party or any of its
Subsidiaries, now or hereafter outstanding, (ii) make any repurchase, redemption, retirement,
defeasance, sinking fund or similar payment, purchase or other acquisition for value, direct or
indirect, of any Capital Stock of any Loan Party or any direct or indirect parent of any Loan
Party, now or hereafter outstanding; (iii) make any payment to retire, or to obtain the surrender
of, any outstanding warrants, options or other rights for the purchase or acquisition of shares of
any class of Capital Stock of any Loan Party, now or hereafter outstanding, or (iv) pay any
management fees or any other fees or expenses (including the reimbursement thereof by any Loan
Party or any of its Subsidiaries) pursuant to any management, consulting or other services
agreement to any of the shareholders or other equityholders of any Loan Party or any of its
Subsidiaries or other Affiliates, or to any other Subsidiaries or Affiliates of any Loan Party;
provided, however, that so long as no Default or Event of Default has occurred and
is continuing, (A) any Subsidiary of the Borrower may pay dividends to the Borrower, and (B) the
Borrower may pay dividends in the form of common Capital Stock (including common Capital Stock of
Beacon in connection with the consummation of a Permitted Disposition with respect to the Capital
Stock of Beacon).

(i) Federal Reserve Regulations. Permit any Loan or the proceeds of any
Loan under this Agreement to be used for any purpose that would cause such Loan to be a margin loan
under the provisions of Regulation T, U or X of the Board.

(j) Transactions with Affiliates. Enter into, renew, extend or be a party
to, or permit any of its Subsidiaries to enter into, renew, extend or be a party to, any
transaction or series of related transactions (including the purchase, sale, lease, transfer or
exchange of property or assets of any kind or the rendering of services of any kind) with any
Affiliate, except (i) in the ordinary course of business in a manner and to an extent consistent
with past practice and necessary or desirable for the prudent operation of its business, for fair
consideration and on terms no less favorable to it or its Subsidiaries than would be obtainable in
a comparable arm’s length transaction with a Person that is not an Affiliate thereof,
(ii) transactions with another Loan Party and (iii) transactions permitted by Section
7.02(e) or (h).

(k) Limitations on Dividends and Other Payment Restrictions Affecting
Subsidiaries. Create or otherwise cause, incur, assume, suffer or permit to exist or become
effective any consensual encumbrance or restriction of any kind on the ability of any Subsidiary of
any Loan Party (i) to pay dividends or to make any other distribution on any shares of Capital
Stock of such Subsidiary owned by any Loan Party or any of its Subsidiaries, (ii) to pay or prepay
or to subordinate any Indebtedness owed to any Loan Party or any of its Subsidiaries, (iii) to make
loans or advances to any Loan Party or any of its Subsidiaries or (iv) to transfer any of its
property or assets to any Loan Party or any of its Subsidiaries, or permit any of its Subsidiaries
to do any of the foregoing; provided, however, that nothing in any of clauses (i)
through (iv) of this Section 7.02(k) shall prohibit or restrict compliance with:

(A) this Agreement and the other Loan Documents;

(B) any agreements in effect on the date of this Agreement and
described on Schedule 7.02(k);

(C) any applicable law, rule or regulation (including applicable
currency control laws and applicable state corporate statutes restricting the
payment of dividends in certain circumstances);

(D) in the case of clause (iv), any agreement setting forth customary
restrictions on the subletting, assignment or transfer of any property or asset that
is leased or licensed; or

(E) in the case of clause (iv), any agreement, instrument or other
document evidencing a Permitted Lien that restricts, on customary terms, the
transfer of any property or assets subject thereto.

(l) Limitation on Issuance of Capital Stock. Except for the issuance or sale
of common stock or Permitted Preferred Stock by the Borrower, issue or sell or enter into any
agreement or arrangement for the issuance and sale of, or permit any of its Subsidiaries to issue
or sell or enter into any agreement or arrangement for the issuance and sale of, any shares of its
Capital Stock, any securities convertible into or exchangeable for its Capital Stock or any
warrants.

(m) Modifications of Indebtedness, Organizational Documents and Certain Other
Agreements; Etc. (i) Except for the Foothill Indebtedness, amend, modify or otherwise change
(or permit the amendment, modification or other change in any manner of) any of the provisions of
any of its or its Subsidiaries’ Indebtedness or of any instrument or agreement (including any
purchase agreement, indenture, loan agreement or security agreement) relating to any such
Indebtedness if such amendment, modification or change would shorten the final maturity or average
life to maturity of, or require any payment to be made earlier than the date originally scheduled
on, such Indebtedness, would increase the interest rate applicable to such Indebtedness, would
change the subordination provisions, if any, of such Indebtedness, or would otherwise be adverse to
the Lenders or the issuer of such Indebtedness in any respect, (ii) with respect to the Foothill
Indebtedness, amend, modify or otherwise change (or permit the amendment, modification or other
change in any manner of) any of the provisions of such Indebtedness or of any instrument or
agreement (including any purchase agreement, indenture, loan agreement or security agreement)
relating to any such Indebtedness if such amendment, modification or change would contravene the
provisions of the Intercreditor Agreement, (iii) except for the Obligations and the Foothill
Indebtedness, make any voluntary or optional payment, prepayment, redemption, defeasance, sinking
fund payment or other acquisition for value of any of its or its Subsidiaries’ Indebtedness
(including by way of depositing money or securities with the trustee therefor before the date
required for the purpose of paying any portion of such Indebtedness when due), or refund,
refinance, replace or exchange any other Indebtedness for any such Indebtedness (except to the
extent such Indebtedness is otherwise expressly permitted by the definition of “Permitted
Indebtedness”), or make any payment, prepayment, redemption, defeasance, sinking fund payment or
repurchase of any outstanding Indebtedness as a result of any asset sale, change of control,
issuance and sale of debt or equity securities or similar event, or give any notice with respect to
any of the foregoing, (iv) except as permitted by Section 7.02(c), amend, modify or
otherwise change its name, jurisdiction of organization, organizational identification number or
FEIN, or (v) amend, modify or otherwise change its certificate of incorporation or bylaws (or other
similar organizational documents), including by the filing or modification of any certificate of
designation, or any agreement or arrangement entered into by it, with respect to any of its Capital
Stock (including any shareholders’ agreement), or enter into any new agreement with respect to any
of its Capital Stock, except any such amendments, modifications or changes or any such new
agreements or arrangements pursuant to this clause (v) that either individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse Effect.

(n) Investment Company Act of 1940. Engage in any business, enter into any
transaction, use any securities or take any other action or permit any of its Subsidiaries to do
any of the foregoing, that would cause it or any of its Subsidiaries to become subject to the
registration requirements of the Investment Company Act of 1940, as amended, by virtue of being an
“investment company” or a company “controlled” by an “investment company” not entitled to an
exemption within the meaning of such Act.

(o) [intentionally omitted].

(p) ERISA. (i) Engage, or permit any ERISA Affiliate to engage, in any
transaction described in Section 4069 of ERISA; (ii) engage, or permit any ERISA Affiliate to
engage, in any prohibited transaction described in Section 406 of ERISA or 4975 of the IRC for
which a statutory or class exemption is not available or a private exemption has not previously
been obtained from the U.S. Department of Labor; (iii) adopt or permit any ERISA Affiliate to adopt
any employee welfare benefit plan within the meaning of Section 3(1) of ERISA which provides
benefits to employees after termination of employment other than as required by Section 601 of
ERISA or applicable law; (iv) fail to make any contribution or payment to any Multiemployer Plan
which it or any ERISA Affiliate may be required to make under any agreement relating to such
Multiemployer Plan, or any law pertaining thereto; or (v) fail, or permit any ERISA Affiliate to
fail, to pay any required installment or any other payment required under Section 412 of the IRC on
or before the due date for such installment or other payment.

(q) Environmental. Permit the use, handling, generation, storage,
treatment, release or disposal of Hazardous Materials at any property owned or leased by it or any
of its Subsidiaries, except in compliance with Environmental Laws in a manner that such handling,
generation, storage, treatment, release or disposal of Hazardous Materials could not reasonably be
expected to result in a Material Adverse Effect.

(r) Certain Agreements. Agree to any material amendment or other material
change to or material waiver of any of its rights under any Material Contract.

Section 7.03 Financial Covenants. So long as any principal of or interest
on any Loan, or any other Obligation (other than unasserted contingent indemnification Obligations)
shall remain unpaid or any Lender shall have any Commitment hereunder, each Loan Party shall not:

(a) Leverage Ratio.

(i) During the period from the Effective Date to but not including the Term Loan B
Funding Date, permit the ratio of Consolidated Funded Indebtedness of Borrower and its Subsidiaries
as of the last day of each fiscal quarter set forth below to TTM EBITDA of the Borrower and its
Subsidiaries for the period ended as of the last day of such fiscal quarter to be greater than the
applicable ratio set forth below:

	 	 	 
	Fiscal Quarter End

	 	Leverage Ratio
	September 30, 2006

	 	2.50:1.00
	December 31, 2006

	 	2.50:1.00
	March 31, 2008

	 	2.50:1.00
	June 30, 2008

	 	2.25:1.00
	September 30, 2008

	 	2.25:1.00
	December 31, 2008

	 	2.25:1.00
	March 31, 2009

	 	2.25:1.00
	June 30, 2009

	 	2.25:1.00
	September 30, 2009

	 	2.25:1.00
	December 31, 2009

	 	2.25:1.00
	March 31, 2010

	 	2.25:1.00
	June 30, 2010

	 	2.25:1.00
	September 30, 2010

	 	2.25:1.00
	December 31, 2010

	 	2.25:1.00
	March 31, 2011

	 	2.25:1.00
	June 30, 2011

	 	2.25:1.00
	September 30, 2011

	 	2.25:1.00
	December 31, 2011

	 	2.25:1.00
	March 31, 2012

	 	2.25:1.00
	June 30, 2012

	 	2.25:1.00
	September 30, 2012

	 	2.25:1.00
	December 31, 2012

	 	2.25:1.00
	March 31, 2013

	 	2.25:1.00
	June 30, 2013

	 	2.25:1.00

(ii) During the period from and after the Term Loan B Funding Date, permit the ratio
of Consolidated Funding Indebtedness of the Borrower and its Subsidiaries as of the last day of
each fiscal quarter set forth below to TTM EBITDA of the Borrower and its Subsidiaries for the
period ended as of the last day of such fiscal quarter to be greater than the applicable ratio set
forth below:

	 	 	 
	Fiscal Quarter End

	 	Leverage Ratio
	September 30, 2007

	 	2.75:1.00
	December 31, 2007

	 	2.75:1.00
	March 31, 2008

	 	2.75:1.00
	June 30, 2008

	 	2.75:1.00
	September 30, 2008

	 	2.75:1.00
	December 31, 2008

	 	2.75:1.00
	March 31, 2009

	 	2.50:1.00
	June 30, 2009

	 	2.50:1.00
	September 30, 2009

	 	2.50:1.00
	December 31, 2009

	 	2.50:1.00
	March 31, 2010

	 	2.50:1.00
	June 30, 2010

	 	2.50:1.00
	September 30, 2010

	 	2.50:1.00
	December 31, 2010

	 	2.50:1.00
	March 31, 2011

	 	2.50:1.00
	June 30, 2011

	 	2.50:1.00
	September 30, 2011

	 	2.50:1.00
	December 31, 2011

	 	2.50:1.00
	March 31, 2012

	 	2.50:1.00
	June 30, 2012

	 	2.50:1.00
	September 30, 2012

	 	2.50:1.00
	December 31, 2012

	 	2.50:1.00
	March 31, 2013

	 	2.50:1.00
	June 30, 2013

	 	2.50:1.00

(b) [Intentionally omitted.]

(c) Fixed Charge Coverage Ratio. Permit the Fixed Charge Coverage Ratio of
the Borrower and its Subsidiaries for the period of 4 consecutive fiscal quarters ended as of the
last day of each fiscal quarter set forth below to be less than the applicable ratio set forth
opposite such date:

	 	 	 
	Fiscal Quarter End

	 	Fixed Charge Coverage Ratio
	September 30, 2007

	 	1.25:1.00
	December 31, 2007

	 	1.25:1.00
	March 31, 2008

	 	1.25:1.00
	June 30, 2008

	 	1.25:1.00
	September 30, 2008

	 	1.25:1.00
	December 31, 2008

	 	1.25:1.00
	March 31, 2009

	 	1.25:1.00
	June 30, 2009

	 	1.25:1.00
	September 30, 2009

	 	1.25:1.00
	December 31, 2009

	 	1.25:1.00
	March 31, 2010

	 	1.25:1.00
	June 30, 2010

	 	1.25:1.00
	September 30, 2010

	 	1.25:1.00
	December 31, 2010

	 	1.25:1.00
	March 31, 2011

	 	1.25:1.00
	June 30, 2011

	 	1.25:1.00
	September 30, 2011

	 	1.25:1.00
	December 31, 2011

	 	1.25:1.00
	March 31, 2012

	 	1.25:1.00
	June 30, 2012

	 	1.25:1.00
	September 30, 2012

	 	1.25:1.00
	December 31, 20012

	 	1.25:1.00
	March 31, 2013

	 	1.25:1.00
	June 30, 2013

	 	1.25:1.00

(d) TTM EBITDA.

(i) During the period from the Effective Date to but not including the Term Loan B
Funding Date, permit TTM EBITDA of the Borrower and its Subsidiaries for the period ended as of the
last day of each fiscal quarter set forth below to be less than the applicable amount set forth
opposite such date:

	 	 	 	 	 
	Fiscal Quarter End

	 	TTM EBITDA

	June 30, 2007

	 	$	31,000,000	 
	September 30, 2007

	 	$	34,000,000	 
	December 31, 2007

	 	$	34,000,000	 
	March 31, 2008

	 	$	34,000,000	 
	June 30, 2008

	 	$	34,000,000	 
	September 30, 2008

	 	$	34,000,000	 
	December 31, 2008

	 	$	34,000,000	 
	March 31, 2009

	 	$	34,000,000	 
	June 30, 2009

	 	$	34,000,000	 
	September 30, 2009

	 	$	34,000,000	 
	December 31, 2009

	 	$	34,000,000	 
	March 31, 2010

	 	$	34,000,000	 
	June 30, 2010

	 	$	34,000,000	 
	September 30, 2010

	 	$	34,000,000	 
	December 31, 2010

	 	$	34,000,000	 
	March 31, 2011

	 	$	34,000,000	 
	June 30, 2011

	 	$	34,000,000	 
	September 30, 2011

	 	$	34,000,000	 
	December 31, 2011

	 	$	34,000,000	 
	March 31, 2012

	 	$	34,000,000	 
	June 30, 2012

	 	$	34,000,000	 
	September 30, 2012

	 	$	34,000,000	 
	December 31, 2012

	 	$	34,000,000	 
	March 31, 2013

	 	$	34,000,000	 
	June 30, 2013

	 	$	34,000,000	 

(ii) During the period from and after the Term Loan B Funding Date, permit TTM
EBITDA of the Borrower and its Subsidiaries for the period ended as of the last day of each fiscal
quarter set forth below to be less than the applicable amount set forth opposite such date:

	 	 	 	 	 
	Fiscal Quarter End

	 	TTM EBITDA

	June 30, 2007

	 	$	33,000,000	 
	September 30, 2007

	 	$	36,000,000	 
	December 31, 2007

	 	$	36,000,000	 
	March 31, 2008

	 	$	36,000,000	 
	June 30, 2008

	 	$	36,000,000	 
	September 30, 2008

	 	$	36,000,000	 
	December 31, 2008

	 	$	36,000,000	 
	March 31, 2009

	 	$	37,000,000	 
	June 30, 2009

	 	$	37,000,000	 
	September 30, 2009

	 	$	37,000,000	 
	December 31, 2009

	 	$	37,000,000	 
	March 31, 2010

	 	$	38,000,000	 
	June 30, 2010

	 	$	38,000,000	 
	September 30, 2010

	 	$	38,000,000	 
	December 31, 2010

	 	$	38,000,000	 
	March 31, 2011

	 	$	39,000,000	 
	June 30, 2011

	 	$	39,000,000	 
	September 30, 2011

	 	$	39,000,000	 
	December 31, 2011

	 	$	39,000,000	 
	March 31, 2012

	 	$	40,000,000	 
	June 30, 2012

	 	$	40,000,000	 
	September 30, 2012

	 	$	40,000,000	 
	December 31, 2012

	 	$	40,000,000	 
	March 31, 2013

	 	$	41,000,000	 
	June 30, 2013

	 	$	41,000,000	 

(e) Capital Expenditures. Make Capital Expenditures in any Fiscal Year in
excess of the amount set forth in the following table for the applicable period:

	 	 	 	 	 
	Fiscal Year 2007

	 	$	12,000,000	 
	 

	 	 	 	 
	Fiscal Year 2008

	 	$	12,000,000	 
	 

	 	 	 	 
	Fiscal Year 2009

	 	$	9,000,000	 
	 

	 	 	 	 
	Fiscal Year 2010

	 	$	9,000,000	 
	 

	 	 	 	 
	Fiscal Year 2011

	 	$	9,000,000	 
	 

	 	 	 	 
	Fiscal Year 2012

	 	$	9,000,000	 
	 

	 	 	 	 
	Fiscal Year 2013

	 	$	9,000,000	 
	 

	 	 	 	 

provided that if the amount of the Capital Expenditures permitted to be made in any Fiscal
Year as set forth in the above table is greater than the actual amount of the Capital Expenditures
actually made in such Fiscal Year (such amount, the “Excess Amount”), then the lesser of
(i) such Excess Amount and (ii) 50% of the amount set forth in the above table for the succeeding
Fiscal Year (such lesser amount referred to as the “Carry-Over Amount”) may be carried
forward to the next succeeding Fiscal Year (the “Succeeding Fiscal Year”); provided further
that the Carry-Over Amount applicable to a particular Succeeding Fiscal Year may not be used in
that Fiscal Year until the amount permitted above to be expended in such Fiscal Year has first been
used in full and the Carry-Over Amount applicable to a particular Succeeding Fiscal Year may not be
carried forward to another Fiscal Year.

ARTICLE VIII

MANAGEMENT, COLLECTION AND STATUS OF

ACCOUNTS RECEIVABLE AND OTHER COLLATERAL

Section 8.01 Collection of Accounts Receivable; Management of Collateral.  

(a) On or prior to the Effective Date, the Borrower shall assist the Administrative
Agent in (i) establishing, and, during the term of this Agreement, maintaining one or more
lockboxes in the name of Foothill (or, if the Foothill Indebtedness under the Foothill Loan
Agreement has been repaid in full and the Foothill Loan Agreement has been terminated, in the name
of the Administrative Agent) and identified on Schedule 8.01 hereto (collectively, the
“Lockboxes”) with the financial institutions set forth on Schedule 8.01 hereto or
such other financial institutions selected by the Borrower and acceptable to the Administrative
Agent in its sole discretion (each being referred to as a “Lockbox Bank”), and (ii)
establishing, and during the term of this Agreement, maintaining an account (a “Collection
Account” and, collectively, the “Collection Accounts”) in the name of Foothill (or, if
the Foothill Indebtedness under the Foothill Loan Agreement has been repaid in full and the
Foothill Loan Agreement has been terminated, in the name of the Administrative Agent) with each
Lockbox Bank. The Borrower shall irrevocably instruct its Account Debtors, with respect to
Accounts Receivable of the Borrower, to remit all payments to be made by checks or other drafts to
the Lockboxes and to remit all payments to be made by wire transfer or by Automated Clearing House,
Inc. payment as directed by Foothill (or, if the Foothill Indebtedness under the Foothill Loan
Agreement has been repaid in full and the Foothill Loan Agreement has been terminated, by the
Administrative Agent) and shall instruct each Lockbox Bank to deposit all amounts received in its
Lockbox to the Collection Account at such Lockbox Bank on the day received or, if such day is not a
Business Day, on the next succeeding Business Day. All checks, drafts, notes, money orders,
acceptances, cash and other evidences of Indebtedness received directly by the Borrower from any
Account Debtor, as proceeds from Accounts Receivable of the Borrower, or as proceeds of any other
Collateral, shall be held by the Borrower in trust for the Agents and the Lenders and upon receipt
be deposited by the Borrower in original form and no later than the next Business Day after receipt
thereof into a Collection Account. The Borrower shall not commingle such collections with the
Borrower’s own funds or the funds of any Subsidiary or Affiliate of the Borrower or with the
proceeds of any assets not included in the Collateral. No checks, drafts or other instruments
received by the Administrative Agent shall constitute final payment to the Administrative Agent
unless and until such checks, drafts or instruments have actually been collected.

(b) After the occurrence and during the continuance of an Event of Default, but
subject to the terms and conditions of the Intercreditor Agreement, the Collateral Agent may send a
notice of assignment or notice of the Lenders’ security interest to any and all Account Debtors
and, thereafter, the Collateral Agent shall have the sole right to collect the Accounts Receivable
and payment intangibles of the Borrower and its Subsidiaries or take possession of the Collateral
and the books and records relating thereto. After the occurrence and during the continuation of an
Event of Default, the Borrower and its Subsidiaries shall not, without prior written consent of the
Collateral Agent, grant any extension of time of payment of any Account Receivable or payment
intangible, compromise or settle any Account Receivable or payment intangible for less than the
full amount thereof, release, in whole or in part, any Person or property liable for the payment
thereof, or allow any credit or discount whatsoever thereon.

(c) The Borrower hereby appoints each Agent or its designee on behalf of such Agent
as the Borrower’s attorney-in-fact with power exercisable during the continuance of an Event of
Default to (i) endorse the Borrower’s name upon any notes, acceptances, checks, drafts, money
orders or other evidences of payment relating to the Accounts Receivable or payment intangibles of
the Borrower, (ii) sign the Borrower’s name on any invoice or bill of lading relating to any of the
Accounts Receivable or payment intangibles of the Borrower, drafts against Account Debtors with
respect to Accounts Receivable or payment intangibles of the Borrower, assignments and
verifications of Accounts Receivable or payment intangibles and notices to Account Debtors with
respect to Accounts Receivable or payment intangibles of the Borrower, (iii) send verification of
Accounts Receivable of the Borrower, and (iv) notify the Postal Service authorities to change the
address for delivery of mail addressed to the Borrower to such address as such Agent may designate
and to do all other acts and things necessary to carry out this Agreement. All acts of said
attorney or designee are hereby ratified and approved, and said attorney or designee shall not be
liable for any acts of omission or commission (other than acts of omission or commission
constituting gross negligence or willful misconduct as determined by a final judgment of a court of
competent jurisdiction), or for any error of judgment or mistake of fact or law; this power being
coupled with an interest is irrevocable until all of the Loans and other Obligations under the Loan
Documents are paid in full and all of the Commitments are terminated.

(d) Nothing herein contained shall be construed to constitute any Agent as agent of
the Borrower for any purpose whatsoever, and the Agents shall not be responsible or liable for any
shortage, discrepancy, damage, loss or destruction of any part of the Collateral wherever the same
may be located and regardless of the cause thereof (other than from acts of omission or commission
constituting gross negligence or willful misconduct as determined by a final judgment of a court of
competent jurisdiction). The Agents shall not, under any circumstance or in any event whatsoever,
have any liability for any error or omission or delay of any kind occurring in the settlement,
collection or payment of any of the Accounts Receivable of the Borrower or any instrument received
in payment thereof or for any damage resulting therefrom (other than acts of omission or commission
constituting gross negligence or willful misconduct as determined by a final judgment of a court of
competent jurisdiction). The Agents, by anything herein or in any assignment or otherwise, do not
assume any of the obligations under any contract or agreement assigned to any Agent and shall not
be responsible in any way for the performance by the Borrower of any of the terms and conditions
thereof.

(e) If any Account Receivable of the Borrower includes a charge for any tax payable
to any Governmental Authority, each Agent is hereby authorized (but in no event obligated) in its
discretion to pay the amount thereof to the proper taxing authority for the Borrower’s account and
to charge the Borrower therefor. The Borrower shall notify the Agents if any Account Receivable of
the Borrower includes any taxes due to any such Governmental Authority and, in the absence of such
notice, the Agents shall have the right to retain the full proceeds of such Account Receivable and
shall not be liable for any taxes that may be due by reason of the sale and delivery creating such
Account Receivable.

(f) Notwithstanding any other terms set forth in the Loan Documents, the rights and
remedies of the Agents and the Lenders herein provided, and the obligations of the Loan Parties set
forth herein, are cumulative of, may be exercised singly or concurrently with, and are not
exclusive of, any other rights, remedies or obligations set forth in any other Loan Document or as
provided by law.

Section 8.02 [intentionally omitted].

Section 8.03 Status of Accounts Receivable and Other Collateral. With
respect to Collateral of any Loan Party at the time the Collateral becomes subject to the
Collateral Agent’s Lien, each Loan Party covenants, represents and warrants: (a) such Loan Party
shall be the sole owner, free and clear of all Liens (except for the Liens granted in the favor of
the Collateral Agent for the benefit of the Agents and the Lenders and Permitted Liens), and shall
be fully authorized to sell, transfer, pledge or grant a security interest in each and every item
of said Collateral; (b) intentionally omitted; (c) intentionally omitted; (d) intentionally
omitted; (e) intentionally omitted; (f) intentionally omitted; (g) intentionally omitted; (h) such
Loan Party shall maintain books and records pertaining to said Collateral in such detail, form and
scope as the Agents shall reasonably require; (i) intentionally omitted; (j) such Loan Party will,
immediately upon learning thereof, report to the Agents any material loss or destruction of, or
substantial damage to, any material item or portion of the Collateral, and any other matters
affecting the value, enforceability or collectability of any of the Collateral; (k) intentionally
omitted; (l) such Loan Party shall not re-date any invoice or sale or make sales on extended dating
beyond that which is customary in the ordinary course of its business and in the industry; (m) such
Loan Party shall conduct a physical count of its Inventory at such intervals as any Agent may
reasonably request and such Loan Party shall promptly supply the Agents with a copy of such count
accompanied by a report of the value (based on the lower of cost (on a first in first out basis)
and market value) of such Inventory; and (n) such Loan Party is not and shall not be entitled to
pledge any Agent’s or any Lender’s credit on any purchases or for any purpose whatsoever.

Section 8.04 Collateral Custodian. Upon the occurrence and during the
continuance of any Event of Default, the Collateral Agent may at any time and from time to time
employ and maintain on the premises of any Loan Party a custodian selected by the Collateral Agent
who shall have full authority to do all acts necessary to protect the Agents’ and the Lenders’
interests. Each Loan Party hereby agrees to, and to cause its Subsidiaries to, cooperate with any
such custodian and to do whatever the Collateral Agent may reasonably request to preserve the
Collateral. All costs and expenses incurred by the Collateral Agent by reason of the employment of
the custodian shall be the responsibility of the Borrower and charged to the Loan Account.

ARTICLE IX

EVENTS OF DEFAULT

Section 9.01 Events of Default. If any of the following events shall occur:

(a) the Borrower shall fail to pay any principal of or interest on any Loan, any
Collateral Agent Advance, or any fee, indemnity or other amount payable under this Agreement or any
other Loan Document when due (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise);

(b) any representation or warranty made or deemed made by or on behalf of any Loan
Party or by any officer of the foregoing under or in connection with any Loan Document or under or
in connection with any report, certificate, or other document delivered to any Agent, any Lender
pursuant to any Loan Document shall have been incorrect in any material respect when made or deemed
made;

(c) any Loan Party shall fail to perform or comply with any covenant or agreement
contained in (i) clauses (b), (c), (d), (f), or (n) of Section 7.01, Section 7.02,
Section 7.03, or Article VIII, or any Loan Party shall fail to perform or comply
with any covenant or agreement contained in any Security Agreement to which it is a party or any
Mortgage to which it is a party, or (ii) clauses (a), (e), (g), (h), (i), (j), (k), (l), (o), or
(p) of Section 7.01 and (in circumstances described in this clause (ii)) such failure, if
capable of being remedied, shall remain unremedied for 10 Business Days, after the earlier of the
date a senior officer of any Loan Party shall have become aware of such failure or the date written
notice of such default shall have been given by any Agent or Lender to such Loan Party;

(d) any Loan Party shall fail to perform or comply with any other term, covenant or
agreement contained in any Loan Document to be performed or observed by it and, except as set forth
in subsections (a), (b) and (c) of this Section 9.01, such failure, if capable of
being remedied, shall remain unremedied for 15 Business Days after the earlier of the date a senior
officer of any Loan Party becomes aware of such failure and the date written notice of such default
shall have been given by any Agent to such Loan Party;

(e) the Borrower or any of its Subsidiaries shall fail to pay any principal of or
interest or premium on any of its Indebtedness (excluding the Obligations) to the extent that the
aggregate principal amount of all such Indebtedness exceeds $250,000 when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) and such failure shall continue
after the applicable grace period, if any, specified in the agreement or instrument relating to
such Indebtedness (except, with respect to any Permitted Indebtedness of the type described in
clauses (l), (m), (n), (o) and (q) of the definition thereof, so long as the obligation of the
Borrower or any such Subsidiary is being contested in good faith and the aggregate principal amount
thereof does not exceed $500,000), or any other default under any agreement or instrument relating
to any such Indebtedness, or any other event, shall occur and shall continue after the applicable
grace period, if any, specified in such agreement or instrument, if the effect of such default or
event is to accelerate, or to permit the acceleration of, the maturity of such Indebtedness; or any
such Indebtedness shall be declared to be due and payable, or required to be prepaid (other than by
a regularly scheduled required prepayment), redeemed, purchased or defeased or an offer to prepay,
redeem, purchase or defease such Indebtedness shall be required to be made, in each case, prior to
the stated maturity thereof;

(f) the Borrower or any of its Subsidiaries (i) shall institute any proceeding or
voluntary case seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution,
liquidation, winding up, reorganization, arrangement, adjustment, protection, relief or composition
of it or its debts under any law relating to bankruptcy, insolvency, reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee,
custodian or other similar official for any such Person or for any substantial part of its
property, (ii) shall be generally not paying its debts as such debts become due or shall admit in
writing its inability to pay its debts generally, (iii) shall make a general assignment for the
benefit of creditors, or (iv) shall take any action to authorize or effect any of the actions set
forth above in this subsection (f);

(g) any proceeding shall be instituted against the Borrower or any of its
Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution, liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar
official for any such Person or for any substantial part of its property, and either such
proceeding shall remain undismissed or unstayed for a period of 60 days or any of the actions
sought in such proceeding (including the entry of an order for relief against any such Person or
the appointment of a receiver, trustee, custodian or other similar official for it or for any
substantial part of its property) shall occur;

(h) any material provision of any Loan Document shall at any time for any reason
(other than pursuant to the express terms thereof) cease to be valid and binding on or enforceable
against any Loan Party intended to be a party thereto, or the validity or enforceability thereof
shall be contested by any party thereto, or a proceeding shall be commenced by any Loan Party or
any Governmental Authority having jurisdiction over any of them, seeking to establish the
invalidity or unenforceability thereof, or any Loan Party shall deny in writing that it has any
liability or obligation purported to be created under any Loan Document;

(i) any Security Agreement, any Mortgage or any other security document, after
delivery thereof pursuant hereto, shall for any reason fail or cease to create a valid and
perfected and, except to the extent permitted by the terms hereof or thereof, second priority Lien
(subject to Permitted Liens) in favor of the Collateral Agent for the benefit of the Agents and the
Lenders on any material item of Collateral or any material portion of the Collateral purported to
be covered thereby;

(j) any bank at which any deposit account, blocked account, or lockbox account of
any Loan Party is maintained shall fail to comply with any of the terms of any deposit account,
blocked account, lockbox account or similar agreement to which such bank is a party after notice
thereof from an Agent to the Borrower or any securities intermediary, commodity intermediary or
other financial institution at any time in custody, control or possession of any investment
property of any Loan Party shall fail to comply with any of the terms of any investment property
control agreement to which such Person is a party after notice thereof from an Agent to the
Borrower;

(k) one or more judgments, awards, or orders (or any settlement of any claim that,
if breached, could result in a judgment, order, or award) for the payment of money exceeding
$500,000 in the aggregate shall be rendered against Borrower or any of its Subsidiaries and remain
unsatisfied, or the Borrower or any of its Subsidiaries shall agree to the settlement of any one or
more pending or threatened actions, suits, or proceedings affecting any Loan Party before any court
or other Governmental Authority or any arbitrator or mediator, providing for the payment of money
exceeding $500,000 in the aggregate, and in the case of any such judgment or order either
(i) enforcement proceedings shall have been commenced by any creditor upon any such judgment,
order, award or settlement, or (ii) there shall be a period of 10 consecutive days after entry
thereof during which a stay of enforcement of any such judgment, order, award or settlement, by
reason of a pending appeal or otherwise, shall not be in effect; provided, however,
that any such judgment, order, award or settlement shall not give rise to an Event of Default under
this subsection if and for so long as (A) the amount of such judgment, order, award or settlement
is covered by a valid and binding policy of insurance between the defendant and the insurer
covering full payment thereof and (B) such insurer has been notified, and has not disputed the
claim made for payment, of the amount of such judgment, order, award or settlement;

(l) the Borrower or any of its Subsidiaries is enjoined, restrained or in any way
prevented by the order of any court or any Governmental Authority from conducting all or any
material part of its business for more than 15 days;

(m) any material damage to, or loss, theft or destruction of, any Collateral,
whether or not insured, or any strike, lockout, labor dispute, embargo, condemnation, act of God or
public enemy, or other casualty which causes, for more than 15 days, the cessation or substantial
curtailment of revenue producing activities at any facility of any Loan Party, if any such event or
circumstance could reasonably be expected to result in a Material Adverse Effect;

(n) any cessation of a substantial part of the business of any Loan Party for a
period which materially and adversely affects the ability of such Loan Party to continue its
business on a profitable basis;

(o) the loss, suspension or revocation of, or failure to renew, any license or
permit now held or hereafter acquired by the Borrower or any of its Subsidiaries, if such loss,
suspension, revocation or failure to renew could reasonably be expected to result in a Material
Adverse Effect;

(p) the indictment, or the threatened indictment of the Borrower or any of its
Subsidiaries under any criminal statute, or commencement or threatened commencement of criminal or
civil proceedings against any Loan Party, pursuant to which statute or proceedings the penalties or
remedies sought or available include forfeiture to any Governmental Authority of any material
portion of the property of such Person;

(q) any Loan Party or any of its ERISA Affiliates shall have made a complete or
partial withdrawal from a Multiemployer Plan, and, as a result of such complete or partial
withdrawal, any Loan Party or any of its ERISA Affiliates incurs a withdrawal liability in an
annual amount exceeding $250,000; or a Multiemployer Plan enters reorganization status under
Section 4241 of ERISA, and, as a result thereof any Loan Party’s or any of its ERISA Affiliates’
annual contribution requirements with respect to such Multiemployer Plan increases in an annual
amount exceeding $250,000;

(r) any Termination Event with respect to any Employee Plan shall have occurred,
and, 30 days after notice thereof shall have been given to any Loan Party by any Agent, (i) such
Termination Event (if correctable) shall not have been corrected, and (ii) the then current value
of such Employee Plan’s vested benefits exceeds the then current value of assets allocable to such
benefits in such Employee Plan by more than $100,000 (or, in the case of a Termination Event
involving liability under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or
4212 of ERISA or Section 4971 or 4975 of the IRC, the liability is in excess of such amount);

(s) the Borrower or any of its Subsidiaries shall be liable for any Environmental
Liabilities and Costs the payment of which could reasonably be expected to result in a Material
Adverse Effect;

(t) a Change of Control shall have occurred; or

(u) an event or development occurs which could reasonably be expected to result in a
Material Adverse Effect;

then, and in any such event, the Collateral Agent may, and shall at the request of the
Required Lenders, by notice to the Borrower, (i) terminate all Commitments, whereupon all
Commitments shall immediately be so terminated, (ii) declare all or any portion of the Loans then
outstanding to be due and payable, whereupon all or such portion of the aggregate principal of all
Loans, all accrued and unpaid interest thereon, all fees and all other amounts payable under this
Agreement and the other Loan Documents shall become due and payable immediately, without
presentment, demand, protest or further notice of any kind, all of which are hereby expressly
waived by each Loan Party and (iii) exercise any and all of its other rights and remedies under
applicable law, hereunder and under the other Loan Documents; provided, however,
that upon the occurrence of any Event of Default described in subsection (f) or (g) of this
Section 9.01, without any notice to any Loan Party or any other Person or any act by any
Agent or any Lender, all Commitments shall automatically terminate and all Loans then outstanding,
together with all accrued and unpaid interest thereon, all fees and all other amounts due under
this Agreement and the other Loan Documents shall become due and payable automatically and
immediately, without presentment, demand, protest or notice of any kind, all of which are expressly
waived by each Loan Party.

ARTICLE X

AGENTS

Section 10.01 Appointment. Each Lender (and each subsequent maker of any
Loan by its making thereof) hereby irrevocably appoints and authorizes the Administrative Agent and
the Collateral Agent to perform the duties of each such Agent as set forth in this Agreement
including: (i) to receive on behalf of each Lender any payment of principal of or interest on the
Loans outstanding hereunder and all other amounts accrued hereunder for the account of the Lenders
and paid to such Agent, and, subject to Section 2.02 of this Agreement, to distribute
promptly to each Lender its Pro Rata Share of all payments so received; (ii) to distribute to each
Lender copies of all material notices and agreements received by such Agent and not required to be
delivered to each Lender pursuant to the terms of this Agreement, provided that the Agents shall
not have any liability to the Lenders for any Agent’s inadvertent failure to distribute any such
notices or agreements to the Lenders; (iii) to maintain, in accordance with its customary business
practices, ledgers and records reflecting the status of the Obligations, the Loans, and related
matters and to maintain, in accordance with its customary business practices, ledgers and records
reflecting the status of the Collateral and related matters; (iv) to execute or file any and all
financing or similar statements or notices, amendments, renewals, supplements, documents,
instruments, proofs of claim, notices and other written agreements with respect to this Agreement
or any other Loan Document; (v) to make the Loans and Collateral Agent Advances, for such Agent or
on behalf of the applicable Lenders as provided in this Agreement or any other Loan Document;
(vi) to perform, exercise, and enforce any and all other rights and remedies of the Lenders with
respect to the Loan Parties, the Obligations, or otherwise related to any of same to the extent
reasonably incidental to the exercise by such Agent of the rights and remedies specifically
authorized to be exercised by such Agent by the terms of this Agreement or any other Loan Document;
(vii)  to incur and pay such fees necessary or appropriate for the performance and fulfillment of
its functions and powers pursuant to this Agreement or any other Loan Document; and (viii) subject
to Section 10.03 of this Agreement, to take such action as such Agent deems appropriate on
its behalf to administer the Loans and the Loan Documents and to exercise such other powers
delegated to such Agent by the terms hereof or the other Loan Documents (including the power to
give or to refuse to give notices, waivers, consents, approvals and instructions and the power to
make or to refuse to make determinations and calculations) together with such powers as are
reasonably incidental thereto to carry out the purposes hereof and thereof. As to any matters not
expressly provided for by this Agreement and the other Loan Documents (including enforcement or
collection of the Loans), the Agents shall not be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Required Lenders, and such
instructions of the Required Lenders shall be binding upon all Lenders and all makers of Loans.

Section 10.02 Nature of Duties. The Agents shall have no duties or
responsibilities except those expressly set forth in this Agreement or in the other Loan Documents.
The duties of the Agents shall be mechanical and administrative in nature. The Agents shall not
have by reason of this Agreement or any other Loan Document a fiduciary relationship in respect of
any Lender. Nothing in this Agreement or any other Loan Document, express or implied, is intended
to or shall be construed to impose upon the Agents any obligations in respect of this Agreement or
any other Loan Document except as expressly set forth herein or therein. Each Lender shall make
its own independent investigation of the financial condition and affairs of the Loan Parties in
connection with the making and the continuance of the Loans hereunder and shall make its own
appraisal of the creditworthiness of the Loan Parties and the value of the Collateral, and the
Agents shall have no duty or responsibility, either initially or on a continuing basis, to provide
any Lender with any credit or other information with respect thereto, whether coming into their
possession before the initial Loan hereunder or at any time or times thereafter, provided that,
upon the reasonable request of a Lender, each Agent shall provide to such Lender any documents or
reports delivered to such Agent by the Loan Parties pursuant to the terms of this Agreement or any
other Loan Document. If any Agent seeks the consent or approval of the Required Lenders to the
taking or refraining from taking any action hereunder, such Agent shall send notice thereof to each
Lender. Each Agent shall promptly notify each Lender any time that the Required Lenders have
instructed such Agent to act or refrain from acting pursuant hereto.

Section 10.03 Rights, Exculpation, Etc. The Agents and their directors,
officers, agents or employees shall not be liable for any action taken or omitted to be taken by
them under or in connection with this Agreement or the other Loan Documents, except for their own
gross negligence or willful misconduct as determined by a final judgment of a court of competent
jurisdiction. Without limiting the generality of the foregoing, the Agents (i) may treat the payee
of any Loan as the owner thereof until the Collateral Agent receives written notice of the
assignment or transfer thereof, pursuant to Section 12.07 hereof, signed by such payee and
in form satisfactory to the Collateral Agent; (ii) may consult with legal counsel (including
counsel to any Agent or counsel to the Loan Parties), independent public accountants, and other
experts selected by any of them and shall not be liable for any action taken or omitted to be taken
in good faith by any of them in accordance with the advice of such counsel or experts; (iii) make
no warranty or representation to any Lender and shall not be responsible to any Lender for any
statements, certificates, warranties or representations made in or in connection with this
Agreement or the other Loan Documents; (iv) shall not have any duty to ascertain or to inquire as
to the performance or observance of any of the terms, covenants or conditions of this Agreement or
the other Loan Documents on the part of any Person, the existence or possible existence of any
Default or Event of Default, or to inspect the Collateral or other property (including the books
and records) of any Person; (v) shall not be responsible to any Lender for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or the
other Loan Documents or any other instrument or document furnished pursuant hereto or thereto; and
(vi) shall not be deemed to have made any representation or warranty regarding the existence, value
or collectability of the Collateral, the existence, priority or perfection of the Collateral
Agent’s Lien thereon, or any certificate prepared by any Loan Party in connection therewith, nor
shall the Agents be responsible or liable to the Lenders for any failure to monitor or maintain any
portion of the Collateral. The provisions of this Section 10.03 are subject to, and shall not limit
in any respect, the provisions of Section 12.07. The Agents shall not be liable for any
apportionment or distribution of payments made in good faith pursuant to Section 4.04, and
if any such apportionment or distribution is subsequently determined to have been made in error the
sole recourse of any Lender to whom payment was due but not made, shall be to recover from other
Lenders any payment in excess of the amount which they are determined to be entitled. The Agents
may at any time request instructions from the Lenders with respect to any actions or approvals
which by the terms of this Agreement or of any of the other Loan Documents the Agents are permitted
or required to take or to grant, and if such instructions are promptly requested, the Agents shall
be absolutely entitled to refrain from taking any action or to withhold any approval under any of
the Loan Documents until they shall have received such instructions from the Required Lenders.
Without limiting the foregoing, no Lender shall have any right of action whatsoever against any
Agent as a result of such Agent acting or refraining from acting under this Agreement or any of the
other Loan Documents in accordance with the instructions of the Required Lenders.

Section 10.04 Reliance. Each Agent shall be entitled to rely upon any
written notices, statements, certificates, orders or other documents or any telephone message
believed by it in good faith to be genuine and correct and to have been signed, sent or made by the
proper Person, and with respect to all matters pertaining to this Agreement or any of the other
Loan Documents and its duties hereunder or thereunder, upon advice of counsel selected by it.

Section 10.05 Indemnification. To the extent that any Agent is not
reimbursed and indemnified by any Loan Party, the Lenders will reimburse and indemnify such Agent
from and against any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses, advances or disbursements of any kind or nature whatsoever which
may be imposed on, incurred by, or asserted against such Agent in any way relating to or arising
out of this Agreement or any of the other Loan Documents or any action taken or omitted by such
Agent under this Agreement or any of the other Loan Documents, in proportion to each Lender’s Pro
Rata Share, including advances and disbursements made pursuant to Section 10.08;
provided, however, that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses,
advances or disbursements for which there has been a final judicial determination that such
liability resulted from such Agent’s gross negligence or willful misconduct. The obligations of
the Lenders under this Section 10.05 shall survive the payment in full of the Loans and the
termination of this Agreement.

Section 10.06 Agents Individually. With respect to its Pro Rata Share of
the Total Commitment hereunder and the Loans made by it, each Agent shall have and may exercise the
same rights and powers hereunder and is subject to the same obligations and liabilities as and to
the extent set forth herein for any other Lender or maker of a Loan. The terms “Lenders” or
“Required Lenders” or any similar terms shall, unless the context clearly otherwise indicates,
include each Agent in its individual capacity as a Lender or one of the Required Lenders. Each
Agent and its Affiliates may accept deposits from, lend money to, and generally engage in any kind
of banking, trust or other business with the Borrower as if it were not acting as an Agent pursuant
hereto without any duty to account to the other Lenders.

Section 10.07 Successor Agent. (a)  Each Agent may resign from
the performance of all its functions and duties hereunder and under the other Loan Documents at any
time by giving at least 30 Business Days prior written notice to the Borrower and each Lender.
Such resignation shall take effect upon the acceptance by a successor Agent of appointment pursuant
to clauses (b) and (c) below or as otherwise provided below.

(b) Upon any such notice of resignation, the Required Lenders may appoint a
successor Agent. Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall thereupon 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 under this Agreement and the other Loan Documents. After any Agent’s
resignation hereunder as an Agent, the provisions of this Article X shall inure to its benefit as
to any actions taken or omitted to be taken by it while it was an Agent under this Agreement and
the other Loan Documents.

(c) If a successor Agent shall not have been so appointed within said thirty (30)
Business Day period, the retiring Agent, with the consent of the other Agent shall then appoint a
successor Agent who shall serve as an Agent until such time, if any, as the Required Lenders, with
the consent of the other Agent, appoint a successor Agent as provided above.

Section 10.08 Collateral Matters.

(a) The Collateral Agent may (but shall not be obligated) from time to time make
such disbursements and advances (“Collateral Agent Advances”) which the Collateral Agent,
in its sole discretion, deems necessary or desirable to preserve, protect, prepare for sale or
lease or dispose of the Collateral or any portion thereof, to enhance the likelihood or maximize
the amount of repayment by the Borrower of the Loans, and other Obligations or to pay any other
amount chargeable to the Borrower pursuant to the terms of this Agreement, including costs, fees
and expenses as described in Section 12.04. The Collateral Agent Advances shall be
repayable on demand and be secured by the Collateral. The Collateral Agent Advances shall
constitute Obligations hereunder which may be charged to the Loan Account in accordance with
Section 4.02. The Collateral Agent shall notify each Lender and the Borrower in writing of
each such Collateral Agent Advance, which notice shall include a description of the purpose of such
Collateral Agent Advance. Without limitation to its obligations pursuant to Section 10.05,
each Lender agrees that it shall make available to the Collateral Agent, upon the Collateral
Agent’s demand, in Dollars in immediately available funds, the amount equal to such Lender’s Pro
Rata Share of each such Collateral Agent Advance. If such funds are not made available to the
Collateral Agent by such Lender, the Collateral Agent shall be entitled to recover such funds on
demand from such Lender, together with interest thereon for each day from the date such payment was
due until the date such amount is paid to the Collateral Agent, at the Federal Funds Rate for 3
Business Days and thereafter at the Reference Rate.

(b) The Lenders hereby irrevocably authorize the Collateral Agent, at its option and
in its discretion, to release any Lien granted to or held by the Collateral Agent upon any
Collateral upon termination of the Total Commitment and payment in full in cash of all Obligations
(other than unasserted contingent indemnification Obligations); or constituting property being sold
or disposed of in compliance with the terms of this Agreement and the other Loan Documents; or
constituting property in which the Loan Parties owned no interest at the time the Lien was granted
or at any time thereafter; or if approved, authorized or ratified in writing by the Lenders. Upon
request by the Collateral Agent at any time, the Lenders will confirm in writing the Collateral
Agent’s authority to release particular types or items of Collateral pursuant to this
Section 10.08(b).

(c) Without in any manner limiting the Collateral Agent’s authority to act without
any specific or further authorization or consent by the Lenders (as set forth in
Section 10.08(b)), each Lender agrees to confirm in writing, upon request by the Collateral
Agent, the authority to release Collateral conferred upon the Collateral Agent under
Section 10.08(b). Upon receipt by the Collateral Agent of confirmation from the Lenders of
its authority to release any particular item or types of Collateral, and upon prior written request
by any Loan Party, the Collateral Agent shall (and is hereby irrevocably authorized by the Lenders
to) execute such documents as may be necessary to evidence the release of the Liens granted to the
Collateral Agent for the benefit of the Agents and the Lenders upon such Collateral;
provided, however, that (i) the Collateral Agent shall not be required to execute
any such document on terms which, in the Collateral Agent’s opinion, would expose the Collateral
Agent to liability or create any obligations or entail any consequence other than the release of
such Liens without recourse or warranty, and (ii) such release shall not in any manner discharge,
affect or impair the Obligations or any Lien upon (or obligations of any Loan Party in respect of)
all interests in the Collateral retained by any Loan Party.

(d) The Collateral Agent shall have no obligation whatsoever to any Lender to assure
that the Collateral exists or is owned by the Loan Parties or is cared for, protected or insured or
has been encumbered or that the Lien granted to the Collateral Agent pursuant to this Agreement or
any other Loan Document has been properly or sufficiently or lawfully created, perfected, protected
or enforced or is entitled to any particular priority, or to exercise at all or in any particular
manner or under any duty of care, disclosure or fidelity, or to continue exercising, any of the
rights, authorities and powers granted or available to the Collateral Agent in this
Section 10.08 or in any other Loan Document, it being understood and agreed that in respect
of the Collateral, or any act, omission or event related thereto, the Collateral Agent may act in
any manner it may deem appropriate, in its sole discretion, given the Collateral Agent’s own
interest in the Collateral as one of the Lenders and that the Collateral Agent shall have no duty
or liability whatsoever to any other Lender, except as otherwise provided herein.

Section 10.09 Agency for Perfection. Each Lender hereby appoints each Agent
and each other Lender as agent and bailee for the purpose of perfecting the security interests in
and liens upon the Collateral in assets which, in accordance with Article 9 of the Code, can be
perfected only by possession or control (or where the security interest of a secured party with
possession or control has priority over the security interest of another secured party) and each
Agent and each Lender hereby acknowledges that it holds possession or control of any such
Collateral for the benefit of the Collateral Agent as secured party. Should any Lender obtain
possession or control of any such Collateral, such Lender shall notify the Collateral Agent
thereof, and, promptly upon the Collateral Agent’s request therefor shall deliver possession or
control of such Collateral to the Collateral Agent or in accordance with the Collateral Agent’s
instructions. Each Loan Party by its execution and delivery of this Agreement hereby consents to
the foregoing.

ARTICLE XI

GUARANTY

Section 11.01 Guaranty. Each Guarantor hereby jointly and severally
unconditionally and irrevocably guarantees the punctual payment when due, whether at stated
maturity, by acceleration or otherwise, of all Obligations of the Borrower now or hereafter
existing under any Loan Document, whether for principal, interest (including all interest that
accrues after the commencement of any Insolvency Proceeding irrespective of whether a claim
therefor is allowed in such case or proceeding), fees, expenses or otherwise (such obligations, to
the extent not paid by the Borrower, being the “Guaranteed Obligations”), and agrees to pay any and
all expenses (including reasonable counsel fees and expenses) incurred by the Agents or the Lenders
(or any of them) in enforcing any rights under the guaranty set forth in this Article. Without
limiting the generality of the foregoing, each Guarantor’s liability shall extend to all amounts
that constitute part of the Guaranteed Obligations and would be owed by the Borrower to the Agents
or the Lenders under any Loan Document but for the fact that they are unenforceable or not
allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving any
Loan Party.

Section 11.02 Guaranty Absolute. Each Guarantor jointly and severally
guarantees that the Guaranteed Obligations will be paid strictly in accordance with the terms of
the Loan Documents, regardless of any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of the Agents, the Lenders with respect
thereto. Each Guarantor agrees that this Article constitutes a guaranty of payment when due and
not of collection and waives any right to require that any resort be made by any Agent or any
Lender to any Collateral. The obligations of each Guarantor under this Article are independent of
the Guaranteed Obligations, and a separate action or actions may be brought and prosecuted against
each Guarantor to enforce such obligations, irrespective of whether any action is brought against
any Loan Party or whether any Loan Party is joined in any such action or actions. The liability of
each Guarantor under this Article shall be irrevocable, absolute and unconditional irrespective of,
and each Guarantor hereby irrevocably waives any defenses it may now or hereafter have in any way
relating to, any or all of the following:

(a) any lack of validity or enforceability of any Loan Document or any agreement or
instrument relating thereto;

(b) any change in the time, manner or place of payment of, or in any other term of,
all or any of the Guaranteed Obligations, or any other amendment or waiver of or any consent to
departure from any Loan Document, including any increase in the Guaranteed Obligations resulting
from the extension of additional credit to any Loan Party or otherwise;

(c) any taking, exchange, release or non-perfection of any Collateral, or any
taking, release or amendment or waiver of or consent to departure from any other guaranty, for all
or any of the Guaranteed Obligations;

(d) the existence of any claim, set-off, defense or other right that any Guarantor
may have at any time against any Person, including, without limitation, any Agent or any Lender;

(e) any change, restructuring or termination of the corporate, limited liability
company or partnership structure or existence of any Loan Party; or

(f) any other circumstance (including any statute of limitations) or any existence
of or reliance on any representation by the Agents, the Lenders that might otherwise constitute a
defense available to, or a discharge of, any Loan Party or any other guarantor or surety.

This Article shall continue to be effective or be reinstated, as the case may be, if at any time
any payment of any of the Guaranteed Obligations is rescinded or must otherwise be returned by the
Agents, the Lenders, or any other Person upon the insolvency, bankruptcy or reorganization of the
Borrower or otherwise, all as though such payment had not been made.

Section 11.03 Waiver. Each Guarantor hereby waives (i) promptness and
diligence, (ii) notice of acceptance and any other notice with respect to any of the Guaranteed
Obligations and this Article and any requirement that the Agents or the Lenders exhaust any right
or take any action against any Loan Party or any other Person or any Collateral, (iii) any right to
compel or direct any Agent or any Lender to seek payment or recovery of any amounts owed under this
Article from any one particular fund or source or to exhaust any right or take any action against
any other Loan Party, any other Person or any Collateral, (iv) any requirement that any Agent or
any Lender protect, secure, perfect or insure any security interest or Lien on any property subject
thereto or exhaust any right to take any action against any Loan Party, any other Person or any
Collateral, and (v) any other defense available to any Guarantor. Each Guarantor agrees that the
Agents and the Lenders shall have no obligation to marshal any assets in favor of any Guarantor or
against, or in payment of, any or all of the Obligations. Each Guarantor acknowledges that it will
receive direct and indirect benefits from the financing arrangements contemplated herein and that
the waiver set forth in this Section 11.03 is knowingly made in contemplation of such
benefits. Each Guarantor hereby waives any right to revoke this Article, and acknowledges that
this Article is continuing in nature and applies to all Guaranteed Obligations, whether existing
now or in the future.

Section 11.04 Continuing Guaranty; Assignments. This Article is a
continuing guaranty and shall (a) remain in full force and effect until the later of (i) the cash
payment in full of the Guaranteed Obligations (other than indemnification obligations as to which
no claim has been made) and all other amounts payable under this Article and (ii) the Final
Maturity Date, (b) be binding upon each Guarantor, its successors and assigns and (c) inure to the
benefit of and be enforceable by the Agents and the Lenders and their successors, pledgees,
transferees and assigns. Without limiting the generality of the foregoing clause (c), any Lender
may pledge, assign or otherwise transfer all or any portion of its rights and obligations under
this Agreement (including all or any portion of its Commitments or its Loans) to any other Person,
and such other Person shall thereupon become vested with all the benefits in respect thereof
granted such Lender herein or otherwise, in each case as provided in Section 12.07.

Section 11.05 Subrogation. No Guarantor will exercise any rights that it
may now or hereafter acquire against any Loan Party or any other guarantor that arise from the
existence, payment, performance or enforcement of such Guarantor’s obligations under this Article,
including any right of subrogation, reimbursement, exoneration, contribution or indemnification and
any right to participate in any claim or remedy of the Agents and the Lenders against any Loan
Party or any other guarantor or any Collateral, whether or not such claim, remedy or right arises
in equity or under contract, statute or common law, including the right to take or receive from any
Loan Party or any other guarantor, directly or indirectly, in cash or other property or by set-off
or in any other manner, payment or security solely on account of such claim, remedy or right,
unless and until all of the Guaranteed Obligations and all other amounts payable under this Article
shall have been paid in full in cash and all of the Commitments have been terminated. If any
amount shall be paid to any Guarantor in violation of the immediately preceding sentence, such
amount shall be held in trust for the benefit of the Agents and the Lenders and shall forthwith be
paid to the Agents and the Lenders to be credited and applied to the Guaranteed Obligations and all
other amounts payable under this Article, whether matured or unmatured, in accordance with the
terms of this Agreement, or to be held as Collateral for any Guaranteed Obligations or other
amounts payable under this Article thereafter arising. If (i) any Guarantor shall make payment to
the Agents and the Lenders of all or any part of the Guaranteed Obligations, (ii) all of the
Guaranteed Obligations and all other amounts payable under this Article shall be paid in full in
cash and (iii) all Commitments have been terminated, the Agents and the Lenders will, at such
Guarantor’s request and expense, execute and deliver to such Guarantor appropriate documents,
without recourse and without representation or warranty, necessary to evidence the transfer by
subrogation to such Guarantor of an interest in the Guaranteed Obligations resulting from such
payment by such Guarantor.

ARTICLE XII

MISCELLANEOUS

Section 12.01 Notices, Etc. All notices and other communications provided
for hereunder shall be in writing and shall be mailed, telecopied or delivered, if to any Loan
Party, at the following address:

c/o METALICO, INC.

186 North Avenue East

Cranford, New Jersey 07016

Attention: Chief Financial Officer

Telephone: 908-497-9610

Telecopier: 908-497-1097

with a copy to:

METALICO, INC.

186 North Avenue East

Cranford, New Jersey 07016

Attention: General Counsel

Telephone: 908-497-9610

Telecopier: 908-497-1097

and to:

LOWENSTEIN SANDLER PC

65 Livingston Avenue

Roseland, New Jersey 07068

Attention: Steven M. Skolnick, Esq.

Telephone: 973-597-2500

Telecopier: 973-597-2400

if to the Administrative Agent, to it at the following address:

ABLECO FINANCE LLC

299 Park Avenue, 24th Floor

New York, New York 10171

Attention: Daniel Wolf

Telephone: 212-891-2121

Telecopier: 212-891-1541

with a copy to:

CERBERUS CALIFORNIA, INC.

11812 San Vicente Boulevard, Suite 300

Los Angeles, California 90049

Attention: Michael B. Grenier; Christopher R. Hebble

Telephone: (310) 903-5010

Telecopier: (310) 826-9203

with an additional copy to:

PAUL, HASTINGS, JANOFSKY & WALKER LLP

515 South Flower Street

Los Angeles, CA 90071

Attention: John Francis Hilson, Esq.

Telephone: 213-683-6300

Telecopier: 213-996-3300

if to the Collateral Agent, to it at the following address:

ABLECO FINANCE LLC

299 Park Avenue, 24th Floor

New York, New York 10171

Attention: Daniel Wolf

Telephone: 212-891-2121

Telecopier: 212-891-1541

with a copy to:

CERBERUS CALIFORNIA, INC.

11812 San Vicente Boulevard, Suite 300

Los Angeles, California 90049

Attention: Michael B. Grenier; Christopher R. Hebble

Telephone: (310) 903-5010

Telecopier: (310) 826-9203

with an additional copy to:

PAUL, HASTINGS, JANOFSKY & WALKER LLP

515 South Flower Street

Los Angeles, CA 90071

Attention: John Francis Hilson, Esq.

Telephone: 213-683-6300

Telecopier: 213-996-3300

or, as to each party, at such other address as shall be designated by such party in a written
notice to the other parties complying as to delivery with the terms of this Section 12.01.
All such notices and other communications shall be effective, (i) if mailed, when received or 3
days after deposited in the mails, whichever occurs first, (ii) if telecopied, when transmitted and
confirmation received, or (iii) if delivered, upon delivery, except that notices to any Agent
pursuant to Articles II and III shall not be effective until received by such Agent , as the case
may be.

Section 12.02 Amendments, Etc. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent to any departure by any Loan Party
therefrom, shall in any event be effective unless the same shall be in writing and signed by the
Required Lenders or by the Collateral Agent with the consent of the Required Lenders, and then such
waiver or consent shall be effective only in the specific instance and for the specific purpose for
which given, provided, however, that no amendment, waiver or consent shall
(i) increase the Commitment of any Lender, reduce the principal of, or interest on, the Loans
payable to any Lender, reduce the amount of any fee payable for the account of any Lender, or
postpone or extend any date fixed for any payment of principal of, or interest or fees on, the
Loans payable to any Lender, in each case without the written consent of any Lender affected
thereby, (ii) increase the Total Commitment without the written consent of each Lender,
(iii) change the percentage of the Commitments or of the aggregate unpaid principal amount of the
Loans that is required for the Lenders or any of them to take any action hereunder, (iv) amend the
definition of “Required Lenders” or “Pro Rata Share”, (v) release all or a substantial portion of
the Collateral (except as otherwise provided in this Agreement and the other Loan Documents),
subordinate any Lien granted in favor of the Collateral Agent for the benefit of the Agents and the
Lenders, or release the Borrower or any Guarantor, or (vi) amend, modify or waive Section
4.04 or this Section 12.02 of this Agreement, in each case, without the written consent
of each Lender. Notwithstanding the foregoing, no amendment, waiver or consent shall, unless in
writing and signed by an Agent, affect the rights or duties of such Agent (but not in its capacity
as a Lender) under this Agreement or the other Loan Documents.

Section 12.03 No Waiver; Remedies, Etc. No failure on the part of any Agent
or any Lender to exercise, and no delay in exercising, any right hereunder or under any other Loan
Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right
under any Loan Document preclude any other or further exercise thereof or the exercise of any other
right. The rights and remedies of the Agents and the Lenders provided herein and in the other Loan
Documents are cumulative and are in addition to, and not exclusive of, any rights or remedies
provided by law. The rights of the Agents and the Lenders under any Loan Document against any
party thereto are not conditional or contingent on any attempt by the Agents and the Lenders to
exercise any of their rights under any other Loan Document against such party or against any other
Person.

Section 12.04 Expenses; Taxes; Attorneys’ Fees. The Borrower will pay on
demand, all costs and expenses incurred by or on behalf of each Agent (and, in the case of clauses
(b) through (m) below, each Lender), regardless of whether the transactions contemplated hereby are
consummated, including reasonable fees, costs, client charges and expenses of counsel for each
Agent (and, in the case of clauses (c) through (m) below, each Lender), accounting, due diligence,
periodic field audits, physical counts, valuations, investigations, searches and filings,
monitoring of assets, appraisals of Collateral, title searches and reviewing environmental
assessments, miscellaneous disbursements, examination, travel, lodging and meals, arising from or
relating to: (a) the negotiation, preparation, execution, delivery, performance and administration
of this Agreement and the other Loan Documents (including the preparation of any additional Loan
Documents pursuant to Section 7.01(b) or the review of any of the agreements, instruments
and documents referred to in Section 7.01(f)), (b) any syndication of the Loans or the
Commitments, (c) any requested amendments, waivers or consents to this Agreement or the other Loan
Documents whether or not such documents become effective or are given, (d) the preservation and
protection of any of the Lenders’ rights under this Agreement or the other Loan Documents, (e) the
defense of any claim or action asserted or brought against any Agent or any Lender by any Person
that arises from or relates to this Agreement, any other Loan Document, the Agents’ or the Lenders’
claims against any Loan Party, or any and all matters in connection therewith, (f) the commencement
or defense of, or intervention in, any court proceeding arising from or related to this Agreement
or any other Loan Document, (g) the filing of any petition, complaint, answer, motion or other
pleading by any Agent or any Lender, or the taking of any action in respect of the Collateral or
other security, in connection with this Agreement or any other Loan Document, (h) the protection,
collection, lease, sale, taking possession of or liquidation of, any Collateral or other security
in connection with this Agreement or any other Loan Document, (i) any attempt to enforce any Lien
or security interest in any Collateral or other security in connection with this Agreement or any
other Loan Document, (j) any attempt to collect from any Loan Party, (k) all liabilities and costs
arising from or in connection with the past, present or future operations of any Loan Party
involving any damage to real or personal property or natural resources alleged to have resulted
from any Release of Hazardous Materials or any harm or injury alleged to have resulted from any
Release of Hazardous Materials on, upon or into such property, (l) any Environmental Liabilities
and Costs incurred in connection with the investigation, removal, cleanup or remediation of any
Hazardous Materials present or arising out of the operations of any facility owned or operated by
any Loan Party, (m) any Environmental Liabilities and Costs incurred in connection with any
Environmental Lien upon any property owned or operated by any Loan Party, or (n) the receipt by any
Agent or any Lender of any advice from professionals with respect to any of the foregoing. Without
limitation of the foregoing or any other provision of any Loan Document: (x) the Borrower agrees
to pay all stamp, document, transfer, recording or filing taxes or fees and similar impositions now
or hereafter determined by any Agent or any Lender to be payable in connection with this Agreement
or any other Loan Document, and the Borrower agrees to save each Agent and each Lender harmless
from and against any and all present or future claims, liabilities or losses with respect to or
resulting from any omission to pay or delay in paying any such taxes, fees or impositions, (y) the
Borrower agrees to pay all broker fees that may become due in connection with the transactions
contemplated by this Agreement and the other Loan Documents, and (z) if the Borrower fails to
perform any covenant or agreement contained herein or in any other Loan Document, any Agent may
itself perform or cause performance of such covenant or agreement, and the expenses of such Agent
incurred in connection therewith shall be reimbursed on demand by the Borrower.

Section 12.05 Right of Set-off.

(a) Each of the Lenders agrees that it shall not, without the express written
consent of the Collateral Agent, and that it shall, to the extent it is lawfully entitled to do so,
upon the written request of the Collateral Agent, set off against the Obligations, any amounts
owing by such Lender to Borrower or any deposit accounts of Borrower now or hereafter maintained
with such Lender. Each of the Lenders further agrees that it shall not, unless specifically
requested to do so in writing by the Collateral Agent, take or cause to be taken any action,
including, the commencement of any legal or equitable proceedings to enforce any Loan Document
against any Loan Party or to foreclose any Lien on, or otherwise enforce any security interest in,
any of the Collateral.

(b) If, at any time or times any Lender shall receive (i) by payment, foreclosure,
setoff, or otherwise, any proceeds of Collateral or any payments with respect to the Obligations,
except for any such proceeds or payments received by such Lender from Administrative Agent pursuant
to the terms of this Agreement, or (ii) payments from Administrative Agent in excess of such
Lender’s ratable portion of all such distributions by Administrative Agent, such Lender promptly
shall (1) turn the same over to Administrative Agent, in kind, and with such endorsements as may be
required to negotiate the same to Administrative Agent, or in immediately available funds, as
applicable, for the account of all of the Lenders and for application to the Obligations in
accordance with the applicable provisions of this Agreement, or (2) purchase, without recourse or
warranty, an undivided interest and participation in the Obligations owed to the other Lenders so
that such excess payment received shall be applied ratably as among the Lenders in accordance with
their Pro Rata Shares; provided, however, that to the extent that such excess
payment received by the purchasing party is thereafter recovered from it, those purchases of
participations shall be rescinded in whole or in part, as applicable, and the applicable portion of
the purchase price paid therefor shall be returned to such purchasing party, but without interest
except to the extent that such purchasing party is required to pay interest in connection with the
recovery of the excess payment.

Section 12.06 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability without invalidating the remaining portions
hereof or affecting the validity or enforceability of such provision in any other jurisdiction.

Section 12.07 Assignments and Participations.

(a) This Agreement and the other Loan Documents shall be binding upon and inure to
the benefit of each Loan Party and each Agent and each Lender and their respective successors and
assigns; provided, however, that none of the Loan Parties may assign or transfer any of its rights
hereunder or under the other Loan Documents without the prior written consent of each Lender and
any such assignment without the Lenders’ prior written consent shall be null and void.

(b) Each Lender may with the written consent of the Collateral Agent, assign to one
or more other lenders or other entities all or a portion of its rights and obligations under this
Agreement with respect to all or a portion of its Commitment and Loans made by it;
provided, however, that (i) such assignment is in an amount which is at least
$5,000,000 or a multiple of $1,000,000 in excess thereof (or the remainder of such Lender’s
Commitment) (except such minimum amount shall not apply to an assignment by a Lender to (x) a
Lender, an Affiliate of such Lender or a Related Fund of such Lender or (y) a group of new Lenders,
each of whom is an Affiliate or Related Fund of each other to the extent the aggregate amount to be
assigned to all such new Lenders is at least $5,000,000 or a multiple of $1,000,000 in excess
thereof), and (ii) the parties to each such assignment shall execute and deliver to the Collateral
Agent, for its acceptance, an Assignment and Acceptance, together with any promissory note subject
to such assignment and such parties shall deliver to the Collateral Agent, for the benefit of the
Collateral Agent, a processing and recordation fee of $5,000 (except the payment of such fee shall
not be required (y) in connection with an assignment by a Lender to a Lender, an Affiliate of such
Lender or to a Related Fund of such Lender or (z) if Collateral Agent, in its sole discretion,
waives payment of such fee). Upon such execution, delivery and acceptance, from and after the
effective date specified in each Assignment and Acceptance, which effective date shall be at least
3 Business Days after the delivery thereof to the Collateral Agent (or such shorter period as shall
be agreed to by the Collateral Agent and the parties to such assignment), (A) the assignee
thereunder shall become a “Lender” hereunder and, in addition to the rights and obligations
hereunder held by it immediately prior to such effective date, have the rights and obligations
hereunder that have been assigned to it pursuant to such Assignment and Acceptance and (B) the
assigning Lender thereunder shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its rights and 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).

(c) By executing and delivering an Assignment and Acceptance, the assigning Lender and the
assignee thereunder confirm to and agree with each other and the other parties hereto as follows:
(i) other than as provided in such Assignment and Acceptance, the 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 any other Loan Document or the
execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement
or any other Loan Document furnished pursuant hereto; (ii) the assigning Lender makes no
representation or warranty and assumes no responsibility with respect to the financial condition of
any Loan Party or any of its Subsidiaries or the performance or observance by any Loan Party of any
of its obligations under this Agreement or any other Loan Document furnished pursuant hereto; (iii)
such assignee confirms that it has received a copy of this Agreement and the other Loan Documents,
together with such other documents and information it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the assigning Lender, any Agent or any 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 and the other Loan Documents;
(v) such assignee appoints and authorizes the Agents to take such action as agents on its behalf
and to exercise such powers under this Agreement and the other Loan Documents as are delegated to
the Agents by the terms hereof and thereof, together with such powers as are reasonably incidental
hereto and thereto; and (vi) such assignee agrees that it will perform in accordance with their
terms all of the obligations which by the terms of this Agreement and the other Loan Documents are
required to be performed by it as a Lender.

(d) The Collateral Agent shall, acting solely for this purpose as a non-fiduciary agent of the
Borrower, maintain, or cause to be maintained at the Payment Office, a copy of each Assignment and
Acceptance delivered to and accepted by it and a register (the “Register”) for the
recordation of the names and addresses of the Lenders and the Commitments of, and the principal
amount of the Loans (and stated interest thereon) (the “Registered Loans”). The entries in
the Register shall be conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Agents and the Lenders may treat each Person whose name is recorded in the Register
as a Lender hereunder for all purposes of this Agreement. The Register shall be available for
inspection by the Borrower and any Lender at any reasonable time and from time to time upon
reasonable prior notice.

(e) Upon receipt by the Collateral Agent of an Assignment and Acceptance, and subject to any
consent required from the Collateral Agent pursuant to Section 12.07(b) (which consent of
the Collateral Agent must be evidenced by the Collateral Agent’s execution of an acceptance to such
Assignment and Acceptance), the Collateral Agent shall accept the Assignment and Acceptance and
record the information contained therein in the Register.

(f) A Registered Loan (and the registered note, if any, evidencing the same) may be assigned
or sold in whole or in part only by registration of such assignment or sale on the Register (and
each registered note shall expressly so provide). Any assignment or sale of all or part of such
Registered Loan (and the registered note, if any, evidencing the same) may be effected only by
registration of such assignment or sale on the Register, together with the surrender of the
registered note, if any, evidencing the same duly endorsed by (or accompanied by a written
instrument of assignment or sale duly executed by) the holder of such registered note, whereupon,
at the request of the designated assignee(s) or transferee(s), one or more new registered notes in
the same aggregate principal amount shall be issued to the designated assignee(s) or transferee(s).
Prior to the registration of assignment or sale of any Registered Loan (and the registered note,
if any, evidencing the same), the Agents shall treat the Person in whose name such Registered Loan
(and the registered note, if any, evidencing the same) is registered as the owner thereof for the
purpose of receiving all payments thereon, notwithstanding notice to the contrary.

(g) In the event that any Lender sells participations in a Registered Loan, such Lender shall
maintain a register for this purpose as a non-fiduciary agent of the Borrower on which it enters
the name of all participants in the Registered Loans held by it and the principal amount (and
stated interest thereon) of the portion of the Registered Loan that is the subject of the
participation (the “Participant Register”). A Registered Loan (and the registered note, if
any, evidencing the same) may be participated in whole or in part only by registration of such
participation on the Participant Register (and each registered note shall expressly so provide).
Any participation of such Registered Loan (and the registered note, if any, evidencing the same)
may be effected only by the registration of such participation on the Participant Register. Any
such Participant Register shall be available for inspection by the Borrower, any Agent and any
Lender at any reasonable time and from time to time upon reasonable prior notice.

(h) Any Non-U.S. Lender who is assigned an interest in any portion of such Registered Loan
pursuant to an Assignment and Acceptance shall comply with Section 2.08(d).

(i) Each Lender may sell participations to one or more banks or other entities in or to all or
a portion of its rights and obligations under this Agreement and the other Loan Documents
(including, all or a portion of its Commitments or the Loans made by it); provided, that (i) such
Lender’s obligations under this Agreement (including without limitation, its Commitments hereunder)
and the other Loan Documents shall remain unchanged; (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations, and the Borrower,
the Agents and the other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement and the other Loan
Documents; and (iii) a participant shall not be entitled to require such Lender to take or omit to
take any action hereunder except (A) action directly effecting an extension of the maturity dates
or decrease in the principal amount of the Loans, (B) action directly effecting an extension of the
due dates or a decrease in the rate of interest payable on the Loans or the fees payable under this
Agreement, or (C) actions directly effecting a release of all or a substantial portion of the
Collateral or any Loan Party (except as set forth in Section 10.08 of this Agreement or any
other Loan Document). The Loan Parties agree that each participant shall be entitled to the
benefits of Section 2.08 and Section 4.05 of this Agreement with respect to its
participation in any portion of the Commitments and the Loans as if it was a Lender.

Section 12.08 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of which shall be
deemed to be an original, but all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of this Agreement by telefacsimile shall be equally
as effective as delivery of an original executed counterpart of this Agreement. Any party
delivering an executed counterpart of this Agreement by telefacsimile also shall deliver an
original executed counterpart of this Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of this Agreement.
The foregoing shall apply to each other Loan Document mutatis mutandis.

Section 12.09 GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH OTHER LOAN
DOCUMENT) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK.

Section 12.10 CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE. EACH
OF THE PARTIES HERETO AGREE THAT ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT SHALL BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK IN THE COUNTY OF
NEW YORK OR OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH LOAN PARTY HEREBY IRREVOCABLY ACCEPTS IN RESPECT OF
ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS; PROVIDED,
HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT,
AT COLLATERAL AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE COLLATERAL AGENT ELECTS TO
BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH LOAN PARTY HEREBY
IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES, AND DOCUMENTS
IN ANY SUIT, ACTION, OR PROCEEDING BROUGHT IN THE UNITED STATES OF AMERICA ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS BY THE MAILING (BY REGISTERED
MAIL OR CERTIFIED MAIL, POSTAGE PREPAID) OR DELIVERING OF A COPY OF SUCH PROCESS TO SUCH LOAN
PARTY, C/O THE BORROWER, AT THE BORROWER’S ADDRESS FOR NOTICES AS SET FORTH IN
SECTION 12.01. THE LOAN PARTIES AGREE 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 HEREIN SHALL AFFECT THE RIGHT OF THE AGENTS AND
THE LENDERS TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. EACH LOAN PARTY HEREBY
EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE JURISDICTION OR LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN
ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. TO THE EXTENT THAT ANY LOAN PARTY HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY
FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE,
ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF
OR ITS PROPERTY, EACH LOAN PARTY HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS
OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.

Section 12.11 WAIVER OF JURY TRIAL, ETC. EACH LOAN PARTY, EACH AGENT AND
EACH LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
CONCERNING ANY RIGHTS UNDER THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS, OR UNDER ANY AMENDMENT,
WAIVER, CONSENT, INSTRUMENT, DOCUMENT OR OTHER AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE
DELIVERED IN CONNECTION THEREWITH, OR ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN
CONNECTION WITH THIS AGREEMENT, AND AGREES THAT ANY SUCH ACTION, PROCEEDINGS OR COUNTERCLAIM SHALL
BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. EACH LOAN PARTY CERTIFIES THAT NO OFFICER,
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY AGENT OR ANY LENDER HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT ANY AGENT OR ANY LENDER WOULD NOT, IN THE EVENT OF ANY ACTION, PROCEEDING OR
COUNTERCLAIM, SEEK TO ENFORCE THE FOREGOING WAIVERS. EACH LOAN PARTY HEREBY ACKNOWLEDGES THAT THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENTS AND THE LENDERS ENTERING INTO THIS AGREEMENT.

Section 12.12 Consent by the Agents and Lenders. Except as otherwise
expressly set forth herein to the contrary, if the consent, approval, satisfaction, determination,
judgment, acceptance or similar action (an “Action”) of any Agent or any Lender shall be
permitted or required pursuant to any provision hereof or any provision of any other agreement to
which any Loan Party is a party and to which any Agent or any Lender has succeeded thereto, such
Action shall be required to be in writing and may be withheld or denied by such Agent or such
Lender, in its sole discretion, with or without any reason, and without being subject to question
or challenge on the grounds that such Action was not taken in good faith.

Section 12.13 No Party Deemed Drafter. Each of the parties hereto agrees
that no party hereto shall be deemed to be the drafter of this Agreement.

Section 12.14 Reinstatement; Certain Payments. If any claim is ever made
upon any Agent or any Lender for repayment or recovery of any amount or amounts received by such
Agent or such Lender in payment or on account of any of the Obligations, such Agent or such Lender
shall give prompt notice of such claim to each other Agent and Lender and the Borrower, and if such
Agent or such Lender repays all or part of such amount by reason of (i) any judgment, decree or
order of any court or administrative body having jurisdiction over such Agent or such Lender or any
of its property, or (ii) any good faith settlement or compromise of any such claim effected by such
Agent, such Lender with any such claimant, then and in such event each Loan Party agrees that (A)
any such judgment, decree, order, settlement or compromise shall be binding upon it notwithstanding
the cancellation of any Indebtedness hereunder or under the other Loan Documents or the termination
of this Agreement or the other Loan Documents, and (B) it shall be and remain liable to such Agent
or such Lender hereunder for the amount so repaid or recovered to the same extent as if such amount
had never originally been received by such Agent or such Lender. The provisions of this Section
shall survive the repayment of the Obligations and release of the Liens granted under the Loan
Documents.

Section 12.15 Indemnification. In addition to each Loan Party’s other
Obligations under this Agreement, each Loan Party agrees to, jointly and severally, defend,
protect, indemnify and hold harmless each Agent, each Lender and all of their respective officers,
directors, employees, attorneys, consultants and agents (collectively called
the “Indemnitees”) from and against any and all losses, damages, liabilities, obligations,
penalties, fees, reasonable costs and expenses (including reasonable attorneys’ fees, costs and
expenses) incurred by such Indemnitees, whether prior to or from and after the Effective Date,
whether direct, indirect or consequential, as a result of or arising from or relating to or in
connection with any of the following: (i) the negotiation, preparation, execution or performance
or enforcement of this Agreement, any other Loan Document or of any other document executed in
connection with the transactions contemplated by this Agreement, (ii) any Agent’s or any Lender’s
furnishing of funds to the Borrower under this Agreement or the other Loan Documents, including the
management of any such Loans, (iii) any matter relating to the financing transactions contemplated
by this Agreement or the other Loan Documents or by any document executed in connection with the
transactions contemplated by this Agreement or the other Loan Documents, or (iv) any claim,
litigation, investigation or proceeding relating to any of the foregoing, whether or not any
Indemnitee is a party thereto (collectively, the “Indemnified Matters”); provided,
however, that the Loan Parties shall not have any obligation to any Indemnitee under this
Section 12.15 for any Indemnified Matter caused by the gross negligence or willful
misconduct of such Indemnitee, as determined by a final judgment of a court of competent
jurisdiction. Such indemnification for all of the foregoing losses, damages, fees, costs and
expenses of the Indemnitees are chargeable against the Loan Account. To the extent that the
undertaking to indemnify, pay and hold harmless set forth in this Section 12.15 may be
unenforceable because it is violative of any law or public policy, each Loan Party shall, jointly
and severally, contribute the maximum portion which it is permitted to pay and satisfy under
applicable law, to the payment and satisfaction of all Indemnified Matters incurred by the
Indemnitees. This Indemnity shall survive the repayment of the Obligations and the discharge of
the Liens granted under the Loan Documents.

Section 12.16 Records. The unpaid principal of and interest on the Loans,
the interest rate or rates applicable to such unpaid principal and interest, the duration of such
applicability, the Commitments, and the accrued and unpaid fees payable pursuant to Section
2.06 hereof, including the Term Loan A Closing Fee, the Term Loan B Closing Fee and the Loan
Servicing Fee, shall at all times be ascertained from the records of the Agents, which shall be
conclusive and binding absent manifest error.

Section 12.17 Binding Effect. This Agreement shall become effective when it
shall have been executed by each Loan Party, each Agent and each Lender and thereafter shall be
binding upon and inure to the benefit of each Loan Party, each Agent and each Lender, and their
respective successors and assigns, except that the Loan Parties shall not have the right to assign
their rights hereunder or any interest herein without the prior written consent of each Lender, and
any assignment by any Lender shall be governed by Section 12.07 hereof.

Section 12.18 Interest. It is the intention of the parties hereto that each
Agent and each Lender shall conform strictly to usury laws applicable to it. Accordingly, if the
transactions contemplated hereby or by any other Loan Document would be usurious as to any Agent or
any Lender under laws applicable to it (including the laws of the United States of America and the
State of New York or any other jurisdiction whose laws may be mandatorily applicable to such Agent
or such Lender notwithstanding the other provisions of this Agreement), then, in that event,
notwithstanding anything to the contrary in this Agreement or any other Loan Document or any
agreement entered into in connection with or as security for the Obligations, it is agreed as
follows: (i) the aggregate of all consideration which constitutes interest under law applicable to
any Agent or any Lender that is contracted for, taken, reserved, charged or received by such Agent
or such Lender under this Agreement or any other Loan Document or agreements or otherwise in
connection with the Obligations shall under no circumstances exceed the maximum amount allowed by
such applicable law, any excess shall be canceled automatically and if theretofore paid shall be
credited by such Agent or such Lender on the principal amount of the Obligations (or, to the extent
that the principal amount of the Obligations shall have been or would thereby be paid in full,
refunded by such Agent or such Lender, as applicable, to the Borrower); and (ii) in the event that
the maturity of the Obligations is accelerated by reason of any Event of Default under this
Agreement or otherwise, or in the event of any required or permitted prepayment, then such
consideration that constitutes interest under law applicable to any Agent or any Lender may never
include more than the maximum amount allowed by such applicable law, and excess interest, if any,
provided for in this Agreement or otherwise shall be canceled automatically by such Agent or such
Lender, as applicable, as of the date of such acceleration or prepayment and, if theretofore paid,
shall be credited by such Agent or such Lender, as applicable, on the principal amount of the
Obligations (or, to the extent that the principal amount of the Obligations shall have been or
would thereby be paid in full, refunded by such Agent or such Lender to the Borrower). All sums
paid or agreed to be paid to any Agent or any Lender for the use, forbearance or detention of sums
due hereunder shall, to the extent permitted by law applicable to such Agent or such Lender, be
amortized, prorated, allocated and spread throughout the full term of the Loans until payment in
full so that the rate or amount of interest on account of any Loans hereunder does not exceed the
maximum amount allowed by such applicable law. If at any time and from time to time (i) the amount
of interest payable to any Agent or any Lender on any date shall be computed at the Highest Lawful
Rate applicable to such Agent or such Lender pursuant to this Section 12.18 and (ii) in
respect of any subsequent interest computation period the amount of interest otherwise payable to
such Agent or such Lender would be less than the amount of interest payable to such Agent or such
Lender computed at the Highest Lawful Rate applicable to such Agent or such Lender, then the amount
of interest payable to such Agent or such Lender in respect of such subsequent interest computation
period shall continue to be computed at the Highest Lawful Rate applicable to such Agent or such
Lender until the total amount of interest payable to such Agent or such Lender shall equal the
total amount of interest which would have been payable to such Agent or such Lender if the total
amount of interest had been computed without giving effect to this Section 12.18.

For purposes of this Section 12.18, the term “applicable law” shall mean that law in
effect from time to time and applicable to the loan transaction between the Borrower, on the one
hand, and the Agents and the Lenders, on the other, that lawfully permits the charging and
collection of the highest permissible, lawful non-usurious rate of interest on such loan
transaction and this Agreement, including laws of the State of New York and, to the extent
controlling, laws of the United States of America.

The right to accelerate the maturity of the Obligations does not include the right to
accelerate any interest that has not accrued as of the date of acceleration.

Section 12.19 Confidentiality. Each Agent and each Lender agrees (on behalf
of itself and each of its affiliates, directors, officers, employees and representatives) to use
reasonable precautions to keep confidential, in accordance with its customary procedures for
handling confidential information of this nature and in accordance with safe and sound practices of
comparable companies, any material non-public information supplied to it by the Loan Parties
pursuant to this Agreement or the other Loan Documents (and which at the time is not, and does not
thereafter become, publicly available or available to such Person from another source not known to
be subject to a confidentiality obligation to such Person not to disclose such information),
provided that nothing herein shall limit the disclosure of any such information (i) to the
extent required by statute, rule, regulation or judicial process, (ii) to counsel for any Agent or
any Lender, (iii) to examiners, auditors, accountants or Securitization Parties, (iv) in connection
with any litigation to which any Agent or any Lender is a party or (v) to any assignee or
participant (or prospective assignee or participant) so long as such assignee or participant (or
prospective assignee or participant) first agrees, in writing, to be bound by confidentiality
provisions similar in substance to this Section 12.19. Each Agent and each Lender agrees
that, upon receipt of a request or identification of the requirement for disclosure pursuant to
clause (iv) hereof, it will make reasonable efforts to keep the Loan Parties informed of such
request or identification; provided that each Loan Party acknowledges that each Agent and
each Lender may make disclosure as required or requested by any Governmental Authority or
representative thereof and that each Agent and each Lender may be subject to review by
Securitization Parties or other regulatory agencies and may be required to provide to, or otherwise
make available for review by, the representatives of such parties or agencies any such non-public
information.

Section 12.20 Debtor-Creditor Relationship. The relationship between the
Lenders and Agents, on the one hand, and the Loan Parties, on the other hand, is solely that of
creditor and debtor. Neither any Lender or any Agent has (or shall be deemed to have) any
fiduciary relationship or duty to any Loan Party arising out of or in connection with, and there is
no agency or joint venture relationship between the Agents and the Lenders, on the one hand, and
the Loan Parties, on the other hand, by virtue of any Loan Document or any transaction contemplated
therein.

Section 12.21 Section Headings. Headings and numbers have been set forth
herein for convenience only. Unless the contrary is compelled by the context, everything contained
in each Section applies equally to this entire Agreement.

Section 12.22 Integration. This Agreement, together with the other Loan
Documents, reflects the entire understanding of the parties with respect to the transactions
contemplated hereby and shall not be contradicted or qualified by any other agreement, oral or
written, before the date hereof.

1

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

BORROWER:

METALICO, INC., a Delaware corporation

By:

Name:

Title:

GUARANTOR:

METALICO-COLLEGE GROVE, INC., a Tennessee corporation

By:

Name:

Title:

TRANZACT CORPORATION, a Delaware corporation

By:

Name:

Title:

METALICO-GRANITE CITY, INC., an Illinois corporation

By:

Name:

Title:

WEST COAST SHOT, INC., a Nevada corporation

By:

Name:

Title:

METALICO ROCHESTER, INC., a New York corporation

By:

Name:

Title:

METALICO BUFFALO, INC., a New York corporation

By:

Name:

Title:

SANTA ROSA LEAD PRODUCTS, INC., a California

corporation

By:

Name:

Title:

GULF COAST RECYCLING, INC., a Florida corporation

By:

Name:

Title:

METALICO ALUMINUM RECOVERY, INC., a New York

corporation

By:

Name:

Title:

METALICO TRANSFER, INC., a New York corporation

By:

Name:

Title:

METALICO TRANSFER REALTY, INC., a New York

corporation

By:

Name:

Title:

METALICO TRANSPORT, INC., a New York corporation

By:

Name:

Title:

MAYCO INDUSTRIES, INC., an Alabama corporation

By:

Name:

Title:

METALICO NILES, INC., an Ohio corporation

By:

Name:

Title:

METALICO NIAGARA, INC., a New York corporation

By:

Name:

Title:

METALICO AKRON INC., an Ohio corporation

By:

Name:

Title:

METALICO AKRON REALTY, INC., an Ohio corporation

By:

Name:

Title:

METALICO SYRACUSE, INC., a New York corporation

By:

Name:

Title:

GENERAL SMELTING & REFINING, INC., a Tennessee

corporation

By:

Name:

Title:

METALICO ALABAMA REALTY, INC., an Alabama corporation

By:

Name:

Title:

METALICO SYRACUSE REALTY, INC., a New York

corporation

By:

Name:

Title:

RIVER HILLS BY THE RIVER, INC., a Florida corporation

By:

Name:

Title:

COLLATERAL AGENT AND LENDER:

ABLECO FINANCE LLC

By:

Name:

Title:

ADMINISTRATIVE AGENT AND LENDER:

ABLECO FINANCE LLC

By:

Name:

Title:

2

FINANCING AGREEMENT

Dated as of July 3, 2007

by and among

METALICO, INC. and various of its Subsidiaries

THE LENDERS FROM TIME TO TIME PARTY HERETO,

ABLECO FINANCE LLC,

as Collateral Agent,

and

ABLECO FINANCE LLC,

as Administrative Agent

	 	 	 	 	 	 	 	 	 	 	 	 	 
	ARTICLE IDEFINITIONS; CERTAIN TERMS 2
	 	 	 	 	 	 	 	 
	Section 1.01
	 	Definitions	 	 	2	 	 	 	 	 
	Section 1.02
	 	Terms Generally	 	 	26	 	 	 	 	 
	Section 1.03
	 	Accounting and Other Terms	 	 	26	 	 	 	 	 
	Section 1.04
	 	Time References	 	 	26	 	 	 	 	 
	ARTICLE IITHE LOANS
	 	 	 	 	 	 	27	 	 	 	 	 
	Section 2.01
	 	Commitments	 	 	27	 	 	 	 	 
	Section 2.02
	 	Making the Loans	 	 	27	 	 	 	 	 
	Section 2.03
	 	Repayment of Loans; Evidence of Debt	 	 	30	 	 	 	 	 
	Section 2.04
	 	Interest	 	 	31	 	 	 	 	 
	Section 2.05
	 	Reduction of Commitment; Prepayment of Loans	 	 	32	 	 	 	 	 
	Section 2.06
	 	Fees	 	 	34	 	 	 	 	 
	Section 2.07
	 	Securitization	 	 	35	 	 	 	 	 
	Section 2.08
	 	Taxes.	 	 	36	 	 	 	 	 
	ARTICLE IVFEES, PAYMENTS AND OTHER COMPENSATION
	 	 	41	 	 	 	 	 
	Section 4.01
	 	Audit and Collateral Monitoring Fees	 	 	41	 	 	 	 	 
	Section 4.02
	 	Payments; Computations and Statements	 	 	41	 	 	 	 	 
	Section 4.03
	 	Sharing of Payments, Etc	 	 	42	 	 	 	 	 
	Section 4.04
	 	Apportionment of Payments.	 	 	43	 	 	 	 	 
	Section 4.05
	 	Increased Costs and Reduced Return.	 	 	44	 	 	 	 	 
	ARTICLE VCONDITIONS TO LOANS
	 	 	 	 	 	 	45	 	 	 	 	 
	Section 5.01
	 	Conditions Precedent	 	 	45	 	 	 	 	 
	Section 5.02
	 	Conditions Precedent to All Loans	 	 	50	 	 	 	 	 
	ARTICLE VIREPRESENTATIONS AND WARRANTIES
	 	 	51	 	 	 	 	 
	Section 6.01
	 	Representations and Warranties	 	 	51	 	 	 	 	 
	ARTICLE VIICOVENANTS OF THE LOAN PARTIES
	 	 	59	 	 	 	 	 
	Section 7.01
	 	Affirmative Covenants	 	 	59	 	 	 	 	 
	Section 7.02
	 	Negative Covenants	 	 	67	 	 	 	 	 
	Section 7.03
	 	Financial Covenants	 	 	72	 	 	 	 	 
	ARTICLE VIIIMANAGEMENT, COLLECTION AND STATUS OF ACCOUNTS RECEIVABLE AND OTHER COLLATERAL
	 	 	 	 	 	 	73	 
	Section 8.01
	 	Collection of Accounts Receivable; Management of Collateral.	 	 	73	 	 	 	 	 
	Section 8.02
	 	Accounts Receivable Documentation	 	 	76	 	 	 	 	 
	Section 8.03
	 	Status of Accounts Receivable and Other Collateral	 	 	76	 	 	 	 	 
	Section 8.04
	 	Collateral Custodian	 	 	77	 	 	 	 	 
	ARTICLE IXEVENTS OF DEFAULT
	 	 	 	 	 	 	77	 	 	 	 	 
	Section 9.01
	 	Events of Default	 	 	77	 	 	 	 	 
	ARTICLE XAGENTS
	 	 	 	 	 	 	81	 	 	 	 	 
	Section 10.01
	 	Appointment	 	 	81	 	 	 	 	 
	Section 10.02
	 	Nature of Duties	 	 	82	 	 	 	 	 
	Section 10.03
	 	Rights, Exculpation, Etc	 	 	82	 	 	 	 	 
	Section 10.04
	 	Reliance	 	 	83	 	 	 	 	 
	Section 10.05
	 	Indemnification	 	 	83	 	 	 	 	 
	Section 10.06
	 	Agents Individually	 	 	84	 	 	 	 	 
	Section 10.07
	 	Successor Agent	 	 	84	 	 	 	 	 
	Section 10.08
	 	Collateral Matters	 	 	84	 	 	 	 	 
	Section 10.09
	 	Agency for Perfection	 	 	86	 	 	 	 	 
	ARTICLE XIGUARANTY
	 	 	 	 	 	 	86	 	 	 	 	 
	Section 11.01
	 	Guaranty	 	 	86	 	 	 	 	 
	Section 11.02
	 	Guaranty Absolute	 	 	87	 	 	 	 	 
	Section 11.03
	 	Waiver	 	 	87	 	 	 	 	 
	Section 11.04
	 	Continuing Guaranty; Assignments	 	 	88	 	 	 	 	 
	Section 11.05
	 	Subrogation	 	 	88	 	 	 	 	 
	ARTICLE XIIMISCELLANEOUS
	 	 	 	 	 	 	89	 	 	 	 	 
	Section 12.01
	 	Notices, Etc	 	 	89	 	 	 	 	 
	Section 12.02
	 	Amendments, Etc	 	 	90	 	 	 	 	 
	Section 12.03
	 	No Waiver; Remedies, Etc	 	 	91	 	 	 	 	 
	Section 12.04
	 	Expenses; Taxes; Attorneys’ Fees	 	 	91	 	 	 	 	 
	Section 12.05
	 	Right of Set-off	 	 	92	 	 	 	 	 
	Section 12.06
	 	Severability	 	 	92	 	 	 	 	 
	Section 12.07
	 	Assignments and Participations.	 	 	92	 	 	 	 	 
	Section 12.08
	 	Counterparts	 	 	95	 	 	 	 	 
	Section 12.09
	 	GOVERNING LAW	 	 	95	 	 	 	 	 
	Section 12.10
	 	CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE	 	 	95	 	 	 	 	 
	Section 12.11
	 	WAIVER OF JURY TRIAL, ETC	 	 	96	 	 	 	 	 
	Section 12.12
	 	Consent by the Agents and Lenders	 	 	96	 	 	 	 	 
	Section 12.13
	 	No Party Deemed Drafter	 	 	97	 	 	 	 	 
	Section 12.14
	 	Reinstatement; Certain Payments	 	 	97	 	 	 	 	 
	Section 12.15
	 	Indemnification	 	 	97	 	 	 	 	 
	Section 12.16
	 	Records	 	 	98	 	 	 	 	 
	Section 12.17
	 	Binding Effect	 	 	98	 	 	 	 	 
	Section 12.18
	 	Interest	 	 	98	 	 	 	 	 
	Section 12.19
	 	Confidentiality	 	 	99	 	 	 	 	 
	Section 12.20
	 	Integration	 	 	100	 	 	 	 	 

3

SCHEDULE AND EXHIBITS

	 	 	 
	Schedule C-1

Schedule F-1

Schedule 6.01(e)

Schedule 6.01(f)

Schedule 6.01(i)

Schedule 6.01(l)

Schedule 6.01(o)

Schedule 6.01(q)

Schedule 6.01(r)

Schedule 6.01(s)

Schedule 6.01(v)

Schedule 6.01(w)Intellectual Property

Schedule 6.01(x)

	 	Lenders and Lenders’ Commitments

Facilities

Subsidiaries

Litigation; Commercial Tort Claims

ERISA

Nature of Business

Real Property

Operating Leases

Environmental Matters

Insurance

Bank Accounts

Material Contracts
	Schedule 6.01(dd)Name; Jurisdiction of Organization; Organizational ID Number;

	Schedule 6.01(ee)Tradenames

Schedule 6.01(ff)Collateral Locations

Schedule 7.02(a)

Schedule 7.02(b)

Schedule 7.02(e)

Schedule 7.02(k)

Schedule 8.01

	 	Chief Place of Business; Chief Executive Office; FEIN

Existing Liens

Existing Indebtedness

Existing Investments

Limitations on Dividends and Other Payment Restrictions

Lockbox Banks and Lockbox Accounts

	 	 	 
	Exhibit A-1

Exhibit I-1

Exhibit I-2

Exhibit L-1

Exhibit S-1

Exhibit 2.01(b)(ii)

	 	Form of Assignment and Acceptance

Form of Intercompany Subordination Agreement

Form of Intercreditor Agreement

Form of LIBOR Notice

Form of Niagara Subordination Agreement

Form of Notice of Borrowing

4EX-10.2

Exhibit 10.2

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

by and among

METALICO, INC.

and

EACH OF ITS SUBSIDIARIES THAT ARE SIGNATORIES HERETO

as Borrowers,

THE LENDERS THAT ARE SIGNATORIES HERETO

as the Lenders,

and

WELLS FARGO FOOTHILL, INC.

as the Arranger and Administrative Agent

Dated as of July 3, 2007

1

TABLE OF CONTENTS

Page

	1.	 	DEFINITIONS AND CONSTRUCTION.

	 	 	 
	1.1

1.2

1.3

1.4

1.5

	 	Definitions

Accounting Terms

Code

Construction

Schedules and Exhibits

	2.	 	LOAN AND TERMS OF PAYMENT.

	 	 	 
	2.1

2.2

2.3

2.4

2.5

2.6

2.7

2.8

2.9

2.10

2.11

2.12

2.13

2.14

2.15

	 	Revolver Advances

Term Loans

Borrowing Procedures and Settlements

Payments

Overadvances

Interest Rates and Letter of Credit Fee: Rates, Payments, and Calculations

Cash Management

Crediting Payments; Float Charge

Designated Account

Maintenance of Loan Account; Statements of Obligations

[Intentionally Omitted]

Letters of Credit

LIBOR Option

Capital Requirements

Joint and Several Liability of Borrowers

	3.	 	CONDITIONS; TERM OF AGREEMENT.

	 	 	 
	3.1

3.2

3.3

3.4

3.5

	 	Conditions Precedent to the Initial Extension of Credit

Conditions Precedent to all Extensions of Credit

Term

Effect of Termination

Early Termination by Borrowers

	4.	 	CREATION OF SECURITY INTEREST.

	 	 	 
	4.1

4.2

4.3

4.4

4.5

4.6

4.7

	 	Grant of Security Interest

Negotiable Collateral

Collection of Accounts, General Intangibles, and Negotiable Collateral

Delivery of Additional Documentation Required

Power of Attorney

Right to Inspect

Control Agreements

	5.	 	REPRESENTATIONS AND WARRANTIES.

	 	 	 
	5.1

5.2

5.3

5.4

5.5

5.6

5.7

5.8

5.9

5.10

5.11

5.12

5.13

5.14

5.15

5.16

5.17

5.18

5.19

5.20

5.21

5.22

5.23

5.24

5.25

5.26

5.27

5.28

	 	No Encumbrances

Eligible Accounts

Eligible Inventory

Equipment

Location of Inventory and Equipment

Inventory Records

Location of Chief Executive Office; FEIN

Due Organization and Qualification; Subsidiaries

Due Authorization; No Conflict

Litigation

No Material Adverse Change

Fraudulent Transfer

Employee Benefits

Environmental Condition

Brokerage Fees

Intellectual Property

Leases

DDAs

Complete Disclosure

Indebtedness

[Intentionally Omitted]

Regulation U

Permits, Etc

Material Contracts

Employee and Labor Matters

Customers and Suppliers

Properties

Anti-Terrorism Laws

	6.	 	AFFIRMATIVE COVENANTS.

	 	 	 
	6.1

6.2

6.3

6.4

6.5

6.6

6.7

6.8

6.9

6.10

6.11

6.12

6.13

6.14

6.15

6.16

	 	Accounting System

Collateral Reporting

Financial Statements, Reports, Certificates

[Intentionally Omitted]

Return

Maintenance of Properties

Taxes

Insurance

Location of Inventory and Equipment

Compliance with Laws

Leases

Brokerage Commissions

Existence

Environmental

Disclosure Updates

Anti-Terrorism Laws

	7.	 	NEGATIVE COVENANTS.

	 	 	 
	7.1

7.2

7.3

7.4

7.5

7.6

7.7

7.8

7.9

7.10

7.11

7.12

7.13

7.14

7.15

7.16

7.17

7.18

7.19

7.20

	 	Indebtedness

Liens

Restrictions on Fundamental Changes

Disposal of Assets

Change Name

Guarantee

Nature of Business

Prepayments and Amendments

Change of Control

Consignments

Distributions

Accounting Methods

Investments

Transactions with Affiliates

Suspension

Compensation

Use of Proceeds

Change in Location of Chief Executive Office; Inventory and Equipment with Bailees

Securities Accounts

Financial Covenants

	8.	 	EVENTS OF DEFAULT.

	9.	 	THE LENDER GROUP’S RIGHTS AND REMEDIES.

	 	9.1	 	Rights and Remedies

	 	9.2	 	Remedies Cumulative

	10.	 	TAXES AND EXPENSES.

	11.	 	WAIVERS; INDEMNIFICATION.

	 	 	 
	11.1

11.2

11.3

	 	Demand; Protest

The Lender Group’s Liability for Collateral

Indemnification

	12.	 	NOTICES.

	13.	 	CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER

	14.	 	ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.

	 	14.1	 	Assignments and Participations

	 	14.2	 	Successors

	15.	 	AMENDMENTS; WAIVERS.

	 	 	 
	15.1

15.2

15.3

	 	Amendments and Waivers

Replacement of Holdout Lender

No Waivers; Cumulative Remedies

	16.	 	AGENT; THE LENDER GROUP.

	 	 	 
	16.1

16.2

16.3

16.4

16.5

16.6

16.7

16.8

16.9

16.10

16.11

16.12

16.13

	 	Appointment and Authorization of Agent

Delegation of Duties

Liability of Agent

Reliance by Agent

Notice of Default or Event of Default

Credit Decision

Costs and Expenses; Indemnification

Agent in Individual Capacity

Successor Agent

Agency for Perfection

Payments by Agent to the Lenders

Concerning the Collateral and Related Loan Documents

Several Obligations; No Liability

	17.	 	GENERAL PROVISIONS.

	 	 	 
	17.1

17.2

17.3

17.4

17.5

17.6

17.7

17.8

17.9

17.10

17.11

	 	Effectiveness

Section Headings

Interpretation

Severability of Provisions

Withholding Taxes

Amendments in Writing

Counterparts; Telefacsimile Execution

Revival and Reinstatement of Obligations

Integration

Parent as Agent for Borrowers

No Novation

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this “Agreement”), is entered
into as of July 3, 2007, by and among, on the one hand, the lenders identified on the signature
pages hereof (such lenders, together with their respective successors and permitted assigns, are
referred to hereinafter each individually as a “Lender” and collectively as the
"Lenders”), and WELLS FARGO FOOTHILL, INC. (“Foothill”), a California corporation,
as the arranger and administrative agent for the Lenders (in such capacity, together with its
successors and assigns in such capacity, “Agent”), and, on the other hand, METALICO, INC.,
a Delaware corporation (“Parent”), and each of Parent’s Subsidiaries identified on the
signature pages hereof (such Subsidiaries, together with Parent, are referred to hereinafter each
individually as a “Borrower”, and collectively, jointly and severally, as the
"Borrowers”).

W I T N E S S E T H:

WHEREAS, the Existing Loan Parties (as hereinafter defined), the lender party thereto
immediately prior to the effectiveness of the amendment and restatement of this Agreement (the
"Existing Lender”), are parties to the Loan and Security Agreement, dated as of May 31,
2001 (as heretofore amended or otherwise modified, the “Existing Loan Agreement”), pursuant
to which the Existing Lender extended credit to the Borrowers consisting of (i) several term loan
facilities in an aggregate principal amount not exceeding $8,000,000 (the “Existing Term
Loan”) and (ii) a revolving credit facility, in an aggregate principal amount not exceeding
$32,000,000 at any time outstanding, as reduced in accordance with the terms thereof (the
"Existing Revolver Facility” and together with the Existing Term Loan, the “Existing
Loan Facility”), which included a $4,000,000 subfacility for the issuance of letters of credit;

WHEREAS, pursuant to the Existing Loan Agreement, the Existing Loan Parties granted to the
Existing Lender, a continuing security interest in all of their right, title and interest in all
then existing and thereafter acquired or arising Collateral (as hereinafter defined) in order to
secure the repayment of any and all of the Obligations (as such term is defined in the Existing
Loan Agreement);

WHEREAS, the Borrowers have requested that the Existing Lender amend the Existing Loan
Agreement in order to restructure the Existing Loan Facility, and in connection therewith, to amend
and restate the Existing Loan Agreement in its entirety, to provide, among other things, (i)
several term loan facilities in an aggregate principal amount of $22,000,000 and (ii) a revolving
credit facility, in an aggregate principal amount not exceeding $63,000,000 at any time
outstanding, as reduced in accordance with the terms thereof, which includes a $4,000,000
subfacility for the issuance of letters of credit, (iii) for the extension of the Maturity Date (as
hereinafter defined) to May 31, 2013, (iv) for the appointment of Foothill as the Agent for the
Lenders (as hereinafter defined in this Agreement), and (v) for certain other modifications as set
forth herein;

WHEREAS, in connection with the restructuring of the Existing Loan Facility, the Existing Loan
Parties have agreed to continue, confirm and reaffirm the grant to Foothill (in its capacity as
Agent under this Agreement), for the benefit of the Lender Group and the Bank Product Provider, of
the security interest in the Collateral to secure the Obligations (as such term is hereinafter
defined); and

NOW THEREFORE, in consideration of the mutual covenants and agreements herein contained, and
subject to the terms and conditions of this Agreement, the parties hereto agree to amend and
restate the Existing Loan Agreement as follows:

The parties agree as follows:

1. DEFINITIONS AND CONSTRUCTION.

1.1 Definitions. As used in this Agreement, the following terms shall have
the following definitions:

"Ableco” means, collectively, Ableco Finance LLC, a Delaware limited liability
company, and each of the lenders party to the Ableco Loan Agreement, and their respective
successors and assigns (including any other lender or group of lenders that at any time succeeds to
or refinances, replaces or substitutes for all or any portion of the Ableco Loans at any time and
from time to time).

"Ableco Intercreditor Agreement” means that certain Intercreditor Agreement, dated as
of July 3, 2007, by and between Agent and Ableco, as the same may be amended, supplemented or
otherwise modified from to time.

"Ableco Loans” means those certain term loans made by Ableco to Borrowers pursuant to
the terms of the Ableco Loan Agreement in an aggregate original principal amount of up to
$55,000,000 (plus any paid-in-kind interest added to the principal balance thereof).

"Ableco Loan Agreement” means that certain Financing Agreement, dated as of July 3,
2007, by and among Borrowers, each of the lenders listed therein, and Ableco, as agent for such
lenders, as the same may be amended, supplemented or otherwise modified from to time to the extent
permitted under the Ableco Intercreditor Agreement.”

"Account Debtor” means any Person who is or who may become obligated under, with
respect to, or on account of, an Account, chattel paper, or a General Intangible.

"Accounts” means all of Borrowers’ now owned or hereafter acquired right, title, and
interest with respect to “accounts” (as that term is defined in the Code), and any and all
supporting obligations in respect thereof.

"ACH Transactions” means any cash management or related services (including the
Automated Clearing House processing of electronic funds transfers through the direct Federal
Reserve Fedline system) provided by a Bank Product Provider for the account of Borrower or its
Subsidiaries.

“Acquisitions” means each of the Annaco Acquisition and the Totalcat Acquisition.

“Acquisition Documents” means each of the Annaco Acquisition Documents and the
Totalcat Acquisition Documents.

"Additional Documents” has the meaning set forth in Section 4.4.

"Administrative Borrower” has the meaning set forth in Section 17.10.

"Advances” has the meaning set forth in Section 2.1.

"Affiliate” means, as applied to any Person, any other Person who, directly or
indirectly, controls, is controlled by, or is under common control with, such Person. For purposes
of this definition, “control” means the possession, directly or indirectly, of the power to direct
the management and policies of a Person, whether through the ownership of Stock, by contract, or
otherwise; provided, however, that, in any event: (a) any Person which owns directly or indirectly
10% or more of the securities having ordinary voting power for the election of directors or other
members of the governing body of a Person or 10% or more of the partnership or other ownership
interests of a Person (other than as a limited partner of such Person) shall be deemed to control
such Person; (b) each director (or comparable manager) of a Person shall be deemed to be an
Affiliate of such Person; and (c) each partnership or joint venture in which a Person is a partner
or joint venturer shall be deemed to be an Affiliate of such Person.

"Agent” has the meaning set forth in the preamble to this Agreement.

"Agent Advances” has the meaning set forth in Section 2.3(e)(i).

"Agent Related Persons” means Agent, together with its Affiliates, officers,
directors, employees, attorneys, and agents.

"Agent’s Account” means an account at a bank designated by Agent from time to time as
the account into which Borrowers shall make all payments to Agent under this Agreement and the
other Loan Documents; unless and until Agent notifies Administrative Borrower, Agent’s Account
shall be that certain deposit account bearing account number 323-266193 and maintained by Agent
with The Chase Manhattan Bank, 4 New York Plaza, 15th Floor, New York, New York 10004, ABA
#021000021.

"Agent’s Liens” means the Liens granted by Borrowers to Agent under this Agreement or
the other Loan Documents.

"Agreement” has the meaning set forth in the preamble hereto.

"Annaco” means, individually and collectively, Annaco, Inc., an Ohio corporation, 943
Hazel LLC, an Ohio limited liability company, and Ocanna Plant II LLC, an Ohio limited liability
company.

"Annaco Acquisition” means the acquisition by Metalico Akron of substantially all of
the assets of Annaco, Inc., an Ohio corporation, and the acquisition by Metalico Akron Realty of
all of the Stock of Elizabeth Hazel LLC, an Ohio limited liability company, a wholly-owned
Subsidiary of 943 Hazel LLC, an Ohio limited liability company, and Melinda Hazel LLC, an Ohio
limited liability company, a wholly-owned Subsidiary of Ocanna Plant II LLC, an Ohio limited
liability company, all in accordance with the terms of the Annaco Acquisition Agreement.

"Annaco Acquisition Agreement” means that certain Agreement for Purchase of Assets,
dated as of June 29, 2007, by and among Annaco, Metalico Akron and Metalico Akron Realty.

"Annaco Earn-Out Arrangements” means the Parent’s obligations to make payments in
connection with the Annaco Acquisition based on the performance of the entity acquired (or
allocated to the assets acquired) in connection therewith and so long as such obligations are
unsecured.

"Anti-Terrorism Laws” means any United States laws relating to terrorism or money
laundering, including, without limitation, Executive Order No. 13224, the USA Patriot Act, the laws
comprising or implementing the Bank Secrecy Act, and the laws administered by the United States
Treasury Department’s Office of Foreign Asset Control.

"Applicable Prepayment Premium” has the meaning set forth in the Fee Letter.

"Assignee” has the meaning set forth in Section 14.1(a).

"Assignment and Acceptance” means an Assignment and Acceptance substantially in the
form of Exhibit A-1.

"Authorized Person” means any officer or other employee of Administrative Borrower.

"Availability” means, as of any date of determination, if such date is a Business Day,
and determined at the close of business on the immediately preceding Business Day, if such date of
determination is not a Business Day, the amount that Borrowers are entitled to borrow as Advances
under Section 2.1 (after giving effect to all then outstanding Obligations (other than Bank
Product Obligations) and all sublimits and reserves applicable hereunder).

"Bank” means Wells Fargo or any of its Affiliates.

"Bank Product Agreements” means those certain cash management service agreements
entered into from time to time by Borrowers or their Subsidiaries with the Bank Product Provider in
connection with the obtaining of any of the Bank Products.

"Bank Product Obligations” means all obligations, liabilities, contingent
reimbursement obligations, fees, and expenses owing by Borrowers or their Subsidiaries to the Bank
Product Provider pursuant to or evidenced by the Bank Product Agreements and irrespective of
whether for the payment of money, whether direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter arising, and including all such amounts that Borrowers are
obligated to reimburse to Agent or any member of the Lender Group as a result of Agent or such
member of the Lender Group purchasing participations from, or executing indemnities or
reimbursement obligations to the Bank Product Provider with respect to the Bank Products provided
to Borrowers or their Subsidiaries by such Bank Product Provider pursuant to the Bank Product
Agreements.

"Bank Product Provider” means Wells Fargo or any of its Affiliates.

"Bank Products” means any service or facility extended to Borrowers or their
Subsidiaries by the Bank Product Provider including: (a) credit cards, (b) credit card processing
services, (c) debit cards, (d) purchase cards, (e) ACH Transactions, (f) cash management, including
controlled disbursement, accounts or services, or (g) Hedge Agreements.

"Bank Product Reserves” means, as of any date of determination, the lesser of (a)
$3,000,000, and (b) the amount of reserves that Agent has established (based upon the Bank Product
Providers’ reasonable determination of the credit exposure in respect of then extant Bank Products)
for Bank Products then provided or outstanding.

"Bankruptcy Code” means title 11 of the United States Code, as in effect from time to
time.

"Base LIBOR Rate” means the rate per annum, determined by Agent in accordance with its
customary procedures, and utilizing such electronic or other quotation sources as it considers
appropriate (rounded upwards, if necessary, to the next 1/16%), on the basis of the rates at which
Dollar deposits are offered to major banks in the London interbank market on or about 11:00 a.m.
(California time) 2 Business Days prior to the commencement of the applicable Interest Period, for
a term and in amounts comparable to the Interest Period and amount of the LIBOR Rate Loan requested
by Administrative Borrower in accordance with this Agreement, which determination shall be
conclusive in the absence of manifest error.

"Base Rate” means, the rate of interest announced within Wells Fargo at its principal
office in San Francisco as its “prime rate”, with the understanding that the “prime rate” is one of
Wells Fargo’s base rates (not necessarily the lowest of such rates) and serves as the basis upon
which effective rates of interest are calculated for those loans making reference thereto and is
evidenced by the recording thereof after its announcement in such internal publication or
publications as Wells Fargo may designate.

"Base Rate Loan” means each portion of an Advance or a Term Loan that bears interest
at a rate determined by reference to the Base Rate.

"Base Rate Revolver Margin” means 0.25 percentage points.

"Base Rate Term Loan A/B Margin” means 0.50 percentage points.

"Beacon” means Beacon Energy Corp. (f/k/a Agrifuel Co.), a Delaware corporation.

"Beacon Investment” means an Investment or series of Investments, after the Closing
Date, in the common stock of Beacon for cash consideration not exceeding in the aggregate
$2,000,000.

"Benefit Plan” means a “defined benefit plan” (as defined in Section 3(35) of ERISA)
for which any Borrower or any Subsidiary or ERISA Affiliate of any Borrower has been an “employer”
(as defined in Section 3(5) of ERISA) within the past six years.

"Blocked Person” means any of the following:

(a) a Person that is listed in the annex to, or is otherwise subject to the provisions of,
Executive Order No. 13224;

(b) a Person owned or controlled by, or acting for or on behalf of, any Person that is listed
in the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224;

(c) a Person with which the Agent or any Lender is prohibited from dealing or otherwise
engaging in any transaction by any Anti-Terrorism Law;

(d) a Person that commits, threatens or conspires to commit or supports “terrorism” as defined
in Executive Order No. 13224; or

(e) a Person that is named as a “specially designated national” on the most current list
published by the U.S. Treasury Department Office of Foreign Asset Control at its official website
or any replacement website or other replacement official publication of such list.

"Board of Directors” means the board of directors (or comparable managers) of Parent
or any committee thereof duly authorized to act on behalf thereof.

"Books” means all of each Borrower’s now owned or hereafter acquired books and records
(including all of its Records indicating, summarizing, or evidencing its assets (including the
Collateral) or liabilities, all of its Records relating to its business operations or financial
condition, and all of its goods or General Intangibles related to such information).

"Borrower” and “Borrowers” have the respective meanings set forth in the
preamble to this Agreement.

"Borrowing” means a borrowing hereunder of an Advance or a Term Loan, as the case may
be.

"Borrowing Base” has the meaning set forth in Section 2.1.

"Borrowing Base Certificate” means a certificate in the form of Exhibit B-1.

"Business Day” means any day that is not a Saturday, Sunday, or other day on which
national banks are authorized or required to close, except that, if a determination of a Business
Day shall relate to a LIBOR Rate Loan, the term “Business Day” also shall exclude any day on which
banks are closed for dealings in Dollar deposits in the London interbank market.

"Capital Expenditures” means, with respect to any Person for any period, the aggregate
of all expenditures by such Person and its Subsidiaries during such period that are capital
expenditures as determined in accordance with GAAP, whether such expenditures are paid in cash or
financed.

"Capital Lease” means a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP.

"Capitalized Lease Obligation” means any Indebtedness represented by obligations under
a Capital Lease.

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

"Cash Management Bank” has the meaning set forth in Section 2.7(a).

"Cash Management Account” has the meaning set forth in Section 2.7(a).

"Cash Management Agreements” means those certain cash management service agreements,
in form and substance reasonably satisfactory to Agent, each of which is among Administrative
Borrower, Agent, and one of the Cash Management Banks.

"Change of Control” means (a) any “person” or “group” (within the meaning of Sections
13(d) and 14(d) of the Exchange Act), other than Permitted Holders, becomes the beneficial owner
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 25%, or more, of the
Stock of Parent having the right to vote for the election of members of the Board of Directors, (b)
a majority of the members of the Board of Directors do not constitute Continuing Directors or (c)
(i) any Borrower ceases to directly own and control 100% of the outstanding Stock of each of its
Subsidiaries (other than Beacon) extant as of the Closing Date, (ii) the Parent ceases to directly
or indirectly own and control at least 30% of the outstanding Stock of Beacon, or (iii) after the
consummation of the Totalcat Acquisition, the Parent ceases to directly or indirectly own and
control at least 82.5% of the outstanding Stock of Totalcat and its Subsidiaries, unless otherwise
permitted hereunder.

"Closing Date” means the date of the making of the initial Advance (or other extension
of credit) hereunder.

"Closing Date Business Plan” means the set of Projections for the 3 year period
following the Closing Date (on a year by year basis, and for the 1 year period following the
Closing Date, on a month by month basis), in form and substance (including as to scope and
underlying assumptions) reasonably satisfactory to Agent.

"Code” means the New York Uniform Commercial Code, as in effect from time to time.

"Collateral” means all assets of each Borrower, including all of each Borrower’s now
owned or hereafter acquired right, title, and interest in and to each of the following:

(a) Accounts,

(b) Books,

(c) Equipment,

(d) General Intangibles and DDAs,

(e) Inventory,

(f) Investment Property,

(g) Negotiable Collateral,

(h) Real Property Collateral,

(i) money or other assets of each such Borrower that now or hereafter come into the
possession, custody, or control of Lender, and

(j) the proceeds and products, whether tangible or intangible, of any of the foregoing,
including proceeds of insurance covering any or all of the foregoing, and any and all Accounts,
Books, Equipment, General Intangibles, Inventory, Investment Property, Negotiable Collateral, Real
Property, money, deposit accounts, or other tangible or intangible property resulting from the
sale, exchange, collection, or other disposition of any of the foregoing, or any portion thereof or
interest therein, and the proceeds thereof.

"Collateral Access Agreement” means a landlord waiver, bailee letter, or
acknowledgement agreement of any lessor, warehouseman, processor, consignee, or other Person in
possession of, having a Lien upon, or having rights or interests in the Equipment or Inventory, in
each case, in form and substance reasonably satisfactory to Agent.

"Collections” means all cash, checks, notes, instruments, and other items of payment
(including insurance proceeds, proceeds of cash sales, rental proceeds, and tax refunds) of
Borrowers.

"Compliance Certificate” means a certificate substantially in the form of Exhibit
C-1 delivered by the chief financial officer of Parent to Agent.

"Contingent Obligation” means, with respect to any Person, any obligation of such
Person guaranteeing or intended to guarantee any Indebtedness, leases, dividends or other
obligations (“primary obligations”) of any other Person (the “primary obligor”) in any manner,
whether directly or indirectly, including, without limitation, (i) the direct or indirect guaranty,
endorsement (other than for collection or deposit in the ordinary course of business), co-making,
discounting with recourse or sale with recourse by such Person of the obligation of a primary
obligor, (ii) the obligation to make take-or-pay or similar payments, if required, regardless of
nonperformance by any other party or parties to an agreement, (iii) any obligation of such Person,
whether or not contingent, (A) to purchase any such primary obligation or any property constituting
direct or indirect security therefor, (B) to advance or supply funds (1) for the purchase or
payment of any such primary obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (C) to
purchase property, assets, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make payment of such
primary obligation or (D) otherwise to assure or hold harmless the holder of such primary
obligation against loss in respect thereof; provided, however, that the term
“Contingent Obligation” shall not include any products warranties extended in the ordinary course
of business. The amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation with respect to which such Contingent
Obligation is made (or, if less, the maximum amount of such primary obligation for which such
Person may be liable pursuant to the terms of the instrument evidencing such Contingent Obligation)
or, if not stated or determinable, the maximum reasonably anticipated liability with respect
thereto (assuming such Person is required to perform thereunder), as determined by the Lender in
its Permitted Discretion.

"Continuing Director” means (a) any member of the Board of Directors who was a
director (or comparable manager) of Parent on the Closing Date, and (b) any individual who becomes
a member of the Board of Directors after the Closing Date if such individual was appointed or
nominated for election to the Board of Directors by a majority of the Continuing Directors, but
excluding any such individual originally proposed for election in opposition to the Board of
Directors in office at the Closing Date in an actual or threatened election contest relating to the
election of the directors (or comparable managers) of Parent (as such terms are used in Rule 14a-11
under the Exchange Act) and whose initial assumption of office resulted from such contest or the
settlement thereof.

"Contribution Agreement” means that certain Contribution Agreement, dated of even date
herewith, among Borrowers and Guarantors, in form and substance reasonably satisfactory to the
Agent.

"Control Agreement” means a control agreement, in form and substance reasonably
satisfactory to Agent, executed and delivered by the applicable Borrower, Agent, and the applicable
securities intermediary with respect to a Securities Account or a bank with respect to a deposit
account.

"Daily Balance” means, with respect to each day during the term of this Agreement, the
amount of an Obligation owed at the end of such day.

"DDA” means any checking or other demand deposit account maintained by any Borrower.

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

"Defaulting Lender” means any Lender that fails to make any Advance (or other
extension of credit) that it is required to make hereunder on the date that it is required to do so
hereunder.

"Defaulting Lender Rate” means (a) for the first 3 days from and after the date the
relevant payment is due, the Base Rate, and (b) thereafter, the interest rate then applicable to
Advances that are Base Rate Loans (inclusive of the Base Rate margin applicable thereto).

"Designated Account” means account number 4950028156 of Administrative Borrower
maintained with the Designated Account Bank, or such other deposit account of Administrative
Borrower (located within the United States) that has been designated as such, in writing, by
Administrative Borrower to Agent.

"Designated Account Bank” means Wells Fargo Bank, N.A., whose office is located in San
Francisco, California, and whose ABA number is 122204771.

"Dilution” means, as of any date of determination, a percentage, based upon the
experience of the immediately prior 90 days, that is the result of dividing the Dollar amount of
(a) bad debt write-downs, discounts, advertising allowances, credits, or other dilutive items with
respect to the Accounts during such period, by (b) Borrowers’ billings with respect to Accounts
during such period (excluding extraordinary items) plus the Dollar amount of clause (a).

"Dilution Reserve” means, as of any date of determination, an amount sufficient to
reduce the advance rate against Eligible Accounts by one percentage point for each percentage point
by which Dilution is in excess of 5%.

"Dollars” or “$” means United States dollars.

"EBITDA” means, with respect to any fiscal period on a consolidated basis for the
Borrowers, the sum for such period of (a) consolidated net income, plus (b) depreciation and
amortization expense deducted in the determination of such consolidated net income, plus
(c) Interest Expense deducted in the determination of such consolidated net income, plus
(d) federal and state income taxes as determined in accordance with GAAP and deducted in the
determination of such consolidated net income, minus (e) any items of gain which are extraordinary
items as defined in GAAP to the extent reflected in the determination of consolidated net income,
plus (f) extraordinary noncash losses, minus (g) non-operating income, plus (h) non-operating
expense, plus (i) noncash compensation expense related to the issuance of stock options. In
determining EBITDA for any fiscal period, pro forma effect will be given to the acquisition
(whether by purchase, merger or otherwise) of any company, entity or business acquired by a
Borrower since the first day of such period.

"Eligible Accounts” means those Accounts created by one of Borrowers in the ordinary
course of its business, that arise out of its sale of goods or rendition of services, that comply
with each of the representations and warranties respecting Eligible Accounts made by Borrowers
under the Loan Documents, and that are not excluded as ineligible by virtue of one or more of the
criteria set forth below; provided, however, that such criteria may be fixed and
revised from time to time by Agent in Agent’s Permitted Discretion to address the results of any
audit performed by Agent from time to time after the Closing Date. In determining the amount to be
included, Eligible Accounts shall be calculated net of customer deposits and unapplied cash
remitted to Borrowers. Eligible Accounts shall not include the following:

(a) Accounts that the Account Debtor has failed to pay within 90 days of original invoice date
or Accounts with selling terms of more than 60 days,

(b) Accounts owed by an Account Debtor (or its Affiliates) where 50% or more of all Accounts
owed by that Account Debtor (or its Affiliates) are deemed ineligible under clause (a) above,

(c) Accounts with respect to which the Account Debtor is an employee, Affiliate, or lender of
any Borrower,

(d) Accounts arising in a transaction wherein goods are placed on consignment or are sold
pursuant to a guaranteed sale, a sale or return, a sale on approval, a bill and hold, or any other
terms by reason of which the payment by the Account Debtor may be conditional,

(e) Accounts that are not payable in Dollars,

(f) Accounts with respect to which the Account Debtor either (i) does not maintain its chief
executive office in the United States or Canada, or (ii) is not organized under the laws of the
United States or any state thereof or Canada or any province thereof, or (iii) is the government of
any foreign country or sovereign state, or of any state, province, municipality, or other political
subdivision thereof, or of any department, agency, public corporation, or other instrumentality
thereof, unless (y) the Account is supported by an irrevocable letter of credit satisfactory to
Agent (as to form, substance, and issuer or domestic confirming bank) that has been delivered to
Agent and is directly drawable by Agent, or (z) the Account is covered by credit insurance in form,
substance, and amount, and by an insurer, satisfactory to Agent,

(g) Accounts with respect to which the Account Debtor is either (i) the United States or any
department, agency, or instrumentality of the United States (exclusive, however, of Accounts with
respect to which the applicable Borrower has complied, to the reasonable satisfaction of Agent,
with the Assignment of Claims Act, 31 USC § 3727), or (ii) any state of the United States
(exclusive, however, of (y) Accounts owed by any state that does not have a statutory counterpart
to the Assignment of Claims Act or (z) Accounts owed by any state that does have a statutory
counterpart to the Assignment of Claims Act as to which the applicable Borrower has complied to
Lender’s satisfaction),

(h) Accounts with respect to which the Account Debtor is a creditor of any Borrower, has or
has asserted a right of setoff, has disputed its liability, or has made any claim with respect to
its obligation to pay the Account, but solely to the extent of such claim, right of setoff, or
dispute,

(i) Accounts with respect to an Account Debtor whose total obligations owing to Borrowers
exceed 10% of all Eligible Accounts, to the extent of the obligations owing by such Account Debtor
in excess of such percentage,

(j) Accounts with respect to which the Account Debtor is subject to an Insolvency Proceeding,
is not Solvent, has gone out of business, or as to which a Borrower has received notice of an
imminent Insolvency Proceeding or a material impairment of the financial condition of such Account
Debtor,

(k) Accounts with respect to which the Account Debtor is located in the states of New Jersey,
Minnesota, or West Virginia (or any other state that requires a creditor to file a business
activity report or similar document in order to bring suit or otherwise enforce its remedies
against such Account Debtor in the courts or through any judicial process of such state), unless
the applicable Borrower has qualified to do business in New Jersey, Minnesota, West Virginia, or
such other states, or has filed a business activities report with the applicable division of
taxation, the department of revenue, or with such other state offices, as appropriate, for the
then-current year, or is exempt from such filing requirement,

(l) Accounts, the collection of which, Agent, in its Permitted Discretion, believes to be
doubtful by reason of the Account Debtor’s financial condition,

(m) Accounts that are not subject to a valid and perfected first priority Agent’s Lien,

(n) Accounts with respect to which (i) the goods giving rise to such Account have not been
shipped and billed to the Account Debtor, or (ii) the services giving rise to such Account have not
been performed and billed to the Account Debtor, or

(o) Accounts that represent the right to receive progress payments or other advance billings
that are due prior to the completion of performance by the applicable Borrower of the subject
contract for goods or services.

"Eligible Inventory” means Inventory of Borrowers consisting of first quality finished
goods held for sale in the ordinary course of Borrowers’ business and work in process and raw
materials, in each case located at one of the business locations of Borrowers set forth on
Schedule E-1 (or in-transit between any such locations), that complies with each of the
representations and warranties respecting Eligible Inventory made by Borrowers in the Loan
Documents, and that is not excluded as ineligible by virtue of one or more of the criteria set
forth below; provided, however, that such criteria may be fixed and revised from time to time by
Agent in Agent’s Permitted Discretion to address the results of any audit or appraisal performed by
Agent from time to time after the Closing Date. In determining the amount to be so included,
Inventory shall be valued at the lower of cost or market on a basis consistent with Borrowers’
historical accounting practices. An item of Inventory shall not be included in Eligible Inventory
if:

(a) a Borrower does not have good, valid, and marketable title thereto,

(b) it is not located at one of the locations in the United States set forth on Schedule
E-1 or in transit from one such location to another such location,

(c) it is located on real property owned or leased by a Borrower or in a contract warehouse,
in each case, unless (i) it is subject to a Collateral Access Agreement executed by the lessor,
warehouseman, or other third party, as the case may be, or (ii) if it is not subject to a
Collateral Access Agreement in accordance with clause (i) above, Agent has established a reserve,
pursuant to Section 2.1(b), in an amount equal to two months rent payable by such Borrower
to such lessor, warehouseman or other third party, and unless it is segregated or otherwise
separately identifiable from goods of others, if any, stored on the premises,

(d) it is not subject to a valid and perfected first priority security Agent’s Lien,

(e) it consists of goods returned or rejected by a Borrower’s customers, or

(f) it consists of goods that are obsolete or slow moving, restrictive or custom items, or
goods that constitute spare parts, packaging and shipping materials, supplies used or consumed in a
Borrower’s business, bill and hold goods, defective goods, “seconds,” or Inventory acquired on
consignment.

"Environmental Actions” means any complaint, summons, citation, notice, directive,
order, claim, litigation, investigation, judicial or administrative proceeding, judgment, letter,
or other communication from any Governmental Authority, or any third party involving violations of
Environmental Laws or releases of Hazardous Materials from (a) any assets, properties, or
businesses of any Borrower or any predecessor in interest, (b) from adjoining properties or
businesses, or (c) from or onto any facilities which received Hazardous Materials generated by any
Borrower or any predecessor in interest.

"Environmental Law” means any applicable federal, state, provincial, foreign or local
statute, law, rule, regulation, ordinance, code, binding and enforceable guideline, binding and
enforceable written policy or rule of common law now or hereafter in effect and in each case as
amended, or any judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, to the extent binding on Borrowers, relating to
the environment, employee health and safety, or Hazardous Materials, including CERCLA; RCRA; the
Federal Water Pollution Control Act, 33 USC § 1251 et seq; the Toxic Substances
Control Act, 15 USC, § 2601 et seq; the Clean Air Act, 42 USC § 7401 et
seq.; the Safe Drinking Water Act, 42 USC. § 3803 et seq.; the Oil
Pollution Act of 1990, 33 USC. § 2701 et seq.; the Emergency Planning and the
Community Right-to-Know Act of 1986, 42 USC. § 11001 et seq.; the Hazardous
Material Transportation Act, 49 USC § 1801 et seq.; and the Occupational Safety and
Health Act, 29 USC. §651 et seq. (to the extent it regulates occupational exposure
to Hazardous Materials); any state and local or foreign counterparts or equivalents, in each case
as amended from time to time.

"Environmental Liabilities and Costs” means all liabilities, monetary obligations,
Remedial Actions, losses, damages, punitive damages, consequential damages, treble damages, costs
and expenses (including all reasonable fees, disbursements and expenses of counsel, experts, or
consultants and costs of investigation and feasibility studies), fines, penalties, sanctions, and
interest incurred as a result of any claim or demand by any Governmental Authority or any third
party, and which relate to any Environmental Action.

"Environmental Lien” means any Lien in favor of any Governmental Authority for
Environmental Liabilities and Costs.

"Equipment” means all of Borrowers’ now owned or hereafter acquired right, title, and
interest with respect to equipment, machinery, machine tools, motors, furniture, furnishings,
fixtures, vehicles (including motor vehicles), tools, parts, goods (other than consumer goods, farm
products, or Inventory), wherever located, including all attachments, accessories, accessions,
replacements, substitutions, additions, and improvements to any of the foregoing.

"ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and any
successor statute thereto.

"ERISA Affiliate” means (a) any Person subject to ERISA whose employees are treated as
employed by the same employer as the employees of a Borrower under IRC Section 414(b), (b) any
trade or business subject to ERISA whose employees are treated as employed by the same employer as
the employees of a Borrower under IRC Section 414(c), (c) solely for purposes of Section 302 of
ERISA and Section 412 of the IRC, any organization subject to ERISA that is a member of an
affiliated service group of which a Borrower is a member under IRC Section 414(m), or (d) solely
for purposes of Section 302 of ERISA and Section 412 of the IRC, any Person subject to ERISA that
is a party to an arrangement with a Borrower and whose employees are aggregated with the employees
of a Borrower under IRC Section 414(o).

"ERISA Event” means (a) a Reportable Event with respect to any Benefit Plan or
Multiemployer Plan, (b) the withdrawal of a Borrower, any of its Subsidiaries or ERISA Affiliates
from a Benefit Plan during a plan year in which it was a “substantial employer” (as defined in
Section 4001(a)(2) of ERISA), (c) the providing of notice of intent to terminate a Benefit Plan in
a distress termination (as described in Section 4041(c) of ERISA), (d) the institution by the PBGC
of proceedings to terminate a Benefit Plan or Multiemployer Plan, (e) any event or condition
(i) that provides a basis under Section 4042(a)(1), (2), or (3) of ERISA for the termination of, or
the appointment of a trustee to administer, any Benefit Plan or Multiemployer Plan, or (ii) that
may result in termination of a Multiemployer Plan pursuant to Section 4041A of ERISA, (f) the
partial or complete withdrawal within the meaning of Sections 4203 and 4205 of ERISA, of a
Borrower, any of its Subsidiaries or ERISA Affiliates from a Multiemployer Plan, or (g) providing
any security to any Plan under Section 401(a)(29) of the IRC by a Borrower or its Subsidiaries or
any of their ERISA Affiliates.

"Event of Default” has the meaning set forth in Section 8.

"Excess Availability” means the amount, as of the date any determination thereof is to
be made, equal to Availability minus the aggregate amount, if any, of all trade payables of
Borrowers aged in excess of their historical levels with respect thereto and all book overdrafts in
excess of their historical practices with respect thereto, in each case as determined by Agent in
its Permitted Discretion.

"Exchange Act” means the Securities Exchange Act of 1934, as in effect from time to
time.

"Existing Advances Indebtedness” has the meaning set forth in Section 2.1(d).

"Existing Lender” has the meaning set forth in the recitals to this Agreement.

"Existing Letters of Credit” has the meaning set forth in Section 2.12(g).

"Existing Loan Agreement” has the meaning set forth in the recitals to this Agreement.

"Existing Loan Facility” has the meaning set forth in the recitals to this Agreement.

"Existing Loan Parties” means the Borrowers and the Guarantors party to the Existing
Loan Agreement.

"Existing Term Loan A Indebtedness” has the meaning set forth in
Section 2.2(a)(ii).

"Facility” means, collectively each parcel of real property owned by a Borrower and
listed on Schedule F-1, in each case including without limitation, the land on which such facility
is located, all buildings and other improvements thereon, all fixtures located at or used in
connection with each such facility, all whether now or hereafter existing.

"Facilities Increase” has the meaning set forth in Section 2.2(d).

"Facilities Increase Loan” has the meaning set forth in Section 2.2(d).

"Facilities Increase Loan Commitment” means, with respect to each Lender that agrees
to make a Facilities Increase Loan, its Facilities Increase Loan Commitment, and, with respect to
all Lenders that agree to make the Facilities Increase Loan, their Facilities Increase Loan
Commitments.

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

"Family Trusts” means, with respect to any individual, trusts or other estate planning
vehicles established for the benefit of Family Members of such individual and in respect of which
such individual serves as trustee or in a similar capacity.

"Fee Letter” means that certain Amended and Restated Fee Letter, dated as of even date
herewith, among Borrowers and Agent, in form and substance satisfactory to Agent.

"FEIN” means Federal Employer Identification Number.

"Fixed Charges” means with respect to Parent and its Subsidiaries for any period, the
sum, without duplication, of (a) Interest Expense, (b) principal payments required to be paid
during such period in respect of Indebtedness, and (c) all federal, state, and local income taxes
accrued for such period.

"Fixed Charge Coverage Ratio” means, with respect to Parent and its Subsidiaries for
any period, the ratio of (a) EBITDA for such period minus Capital Expenditures made (to the extent
not already incurred in a prior period) or incurred during such period, to (b) Fixed Charges for
such period.

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

"Funding Losses” has the meaning set forth in Section 2.13(b)(ii).

"GAAP” means generally accepted accounting principles as in effect from time to time
in the United States, consistently applied.

"General Intangibles” means all of Borrowers’ now owned or hereafter acquired right,
title, and interest with respect to general intangibles (including payment intangibles, contract
rights, rights to payment, rights arising under common law, statutes, or regulations, choses or
things in action, goodwill, patents, trade names, trademarks, servicemarks, copyrights, blueprints,
drawings, purchase orders, customer lists, monies due or recoverable from pension funds, route
lists, rights to payment and other rights under any royalty or licensing agreements, infringement
claims, computer programs, information contained on computer disks or tapes, software, literature,
reports, catalogs, money, deposit accounts, insurance premium rebates, tax refunds, and tax refund
claims), and any and all supporting obligations in respect thereof, and any other personal property
other than goods, Accounts, Investment Property, and Negotiable Collateral.

"General Smelting” means General Smelting & Refining, Inc., a Tennessee corporation.

"Governing Documents” means, with respect to any Person, the certificate or articles
of incorporation, by-laws, or other organizational documents of such Person.

"Governmental Authority” means any federal, state, local, or other governmental or
administrative body, instrumentality, department, or agency or any court, tribunal, administrative
hearing body, arbitration panel, commission, or other similar dispute-resolving panel or body.

"Guaranties” means those certain general continuing guaranties dated as of the date
hereof executed and delivered by Subsidiary Guarantors in favor of Agent, in form and substance
satisfactory to Agent.

"Guarantors” means, with respect to all Obligations, the Subsidiary Guarantors.

"Guarantor Security Agreement” means a security agreement made by Subsidiary
Guarantors in favor of Agent for the benefit of the Lenders the form and substance of which is
satisfactory to Agent.

"Hard Cost” means, with respect to each Capital Asset acquired by a Borrower, the cash
purchase price paid by a Borrower for such Capital Asset less the aggregate amount of all soft
costs (including, without limitation, all taxes, delivery and storage charges, installation charges
and other charges added to such purchase price) included in the purchase price for such Capital
Asset.

"Hazardous Materials” means (a) substances that are defined or listed in, or otherwise
classified pursuant to, any applicable laws or regulations as “hazardous substances,” “hazardous
materials,” “hazardous wastes,” “toxic substances,” or any other formulation intended to define,
list, or classify substances by reason of deleterious properties such as ignitability, corrosivity,
reactivity, carcinogenicity, reproductive toxicity, or “EP toxicity”, (b) oil, petroleum, or
petroleum derived substances, natural gas, natural gas liquids, synthetic gas, drilling fluids,
produced waters, and other wastes associated with the exploration, development, or production of
crude oil, natural gas, or geothermal resources, (c) any flammable substances or explosives or any
radioactive materials, and (d) asbestos in any form or electrical equipment that contains any oil
or dielectric fluid containing levels of polychlorinated biphenyls in excess of 50 parts per
million.

"Hedge Agreement” means any and all transactions, agreements, or documents now
existing or hereafter entered into between Borrowers or their Subsidiaries, on the one hand, and
Wells Fargo or its Affiliates, on the other hand, which provide for an interest rate, credit,
commodity or equity swap, cap, floor, collar, forward foreign exchange transaction, currency swap,
cross currency rate swap, currency option, or any combination of, or option with respect to, these
or similar transactions, for the purpose of hedging Borrowers’ or their Subsidiaries’ exposure to
fluctuations in interest or exchange rates, loan, credit exchange, security or currency valuations
or commodity prices.

"Holdout Lender” has the meaning set forth in Section 15.2.

"Indebtedness” means (a) all obligations of a Borrower for borrowed money, (b) all
obligations of a Borrower evidenced by bonds, debentures, notes, or other similar instruments and
all reimbursement or other obligations of a Borrower in respect of letters of credit, bankers
acceptances, interest rate swaps, or other financial products, (c) all obligations of a Borrower
under Capital Leases, (d) all obligations or liabilities of others secured by a Lien on any asset
of a Borrower, irrespective of whether such obligation or liability is assumed, (e) all obligations
of a Borrower for the deferred purchase price of assets (other than trade debt incurred in the
ordinary course of a Borrower’s business and repayable in accordance with customary trade
practices), (f) all Contingent Obligations of a Borrower, (g) all obligations or liabilities
incurred under Title IV of ERISA with respect to any Plan (other than a Multiemployer Plan) covered
by Title IV of ERISA and maintained for employees of any Borrower or any of its ERISA Affiliates,
and (h) withdrawal liability incurred under ERISA by any Borrower or any of its ERISA Affiliates to
any Multiemployer Plan.

"Indemnified Liabilities” has the meaning set forth in Section 11.3.

"Indemnified Person” has the meaning set forth in Section 11.3.

"Insolvency Proceeding” means any proceeding commenced by or against any Person under
any provision of the Bankruptcy Code or under any other state or federal bankruptcy or insolvency
law, assignments for the benefit of creditors, formal or informal moratoria, compositions,
extensions generally with creditors, or proceedings seeking reorganization, arrangement, or other
similar relief.

"Intangible Assets” means, with respect to any Person, that portion of the book value
of all of such Person’s assets that would be treated as intangibles under GAAP.

"Intercompany Subordination Agreement” means a subordination agreement executed and
delivered by Borrowers and Agent, the form and substance of which is reasonably satisfactory to
Agent.

"Interest Expense” means, for any period, the aggregate of the interest expense of
Parent and its Subsidiaries for such period, determined on a consolidated basis in accordance with
GAAP.

"Interest Period” means, with respect to each LIBOR Rate Loan, a period commencing on
the date of the making of such LIBOR Rate Loan and ending 1, 2, 3, or 6 months thereafter;
provided, however, that (a) if any Interest Period would end on a day that is not a Business Day,
such Interest Period shall be extended (subject to clauses (c)-(e) below) to the next succeeding
Business Day, (b) interest shall accrue at the applicable rate based upon the LIBOR Rate from and
including the first day of each Interest Period to, but excluding, the day on which any Interest
Period expires, (c) any Interest Period that would end on a day that is not a Business Day shall be
extended to the next succeeding Business Day unless such Business Day falls in another calendar
month, in which case such Interest Period shall end on the next preceding Business Day, (d) with
respect to an Interest Period that begins on the last Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the calendar month at the end of such
Interest Period), the Interest Period shall end on the last Business Day of the calendar month that
is 1, 2, 3, or 6 months after the date on which the Interest Period began, as applicable, and (e)
Borrowers (or Administrative Borrower on behalf thereof) may not elect an Interest Period which
will end after the Maturity Date.

"Inventory” means all Borrowers’ now owned or hereafter acquired right, title, and
interest with respect to inventory, including goods held for sale or lease or to be furnished under
a contract of service, goods that are leased by a Borrower as lessor, goods that are furnished by a
Borrower under a contract of service, and raw materials, work in process, or materials used or
consumed in a Borrower’s business.

"Inventory Reserve” means, on any date of determination, an amount equal to 10% of the
value of the lower of cost or market value of Borrowers’ Inventory.

"Investment” means, with respect to any Person, any investment by such Person in any
other Person (including Affiliates) in the form of loans, guarantees, advances, or capital
contributions (excluding (a) commission, travel, and similar advances to officers and employees of
such Person made in the ordinary course of business, and (b) bona fide Accounts arising from the
sale of goods or rendition of services in the ordinary course of business consistent with past
practice), purchases or other acquisitions for consideration of Indebtedness or Stock, and any
other items that are or would be classified as investments on a balance sheet prepared in
accordance with GAAP.

"Investment Property” means all of Borrowers’ now owned or hereafter acquired right,
title, and interest with respect to “investment property” as that term is defined in the Code, and
any and all supporting obligations in respect thereof.

"IRC” means the Internal Revenue Code of 1986, as in effect from time to time.

"Issuing Lender” means Wells Fargo or any other Lender that, at the request of
Administrative Borrower and with the consent of Agent, agrees, in such Lender’s sole discretion, to
become an Issuing Lender for the purpose of issuing L/Cs or L/C Undertakings pursuant to
Section 2.12.

"Junior Debt” means Indebtedness that is subordinated to the Obligations and otherwise
incurred on terms and conditions acceptable to Agent in the exercise of its Permitted Discretion.

"L/C” has the meaning set forth in Section 2.12(a).

"L/C Disbursement” means a payment made by the Issuing Lender pursuant to a Letter of
Credit.

"L/C Undertaking” has the meaning set forth in Section 2.12(a).

"Lender” and “Lenders” have the respective meanings set forth in the preamble
to this Agreement, and shall include any other Person made a party to this Agreement in accordance
with the provisions of Section 14.1.

"Lender Group” means, individually and collectively, each of the Lenders (including
the Issuing Lender) and Agent.

"Lender Group Expenses” means all (a) costs or expenses (including taxes, and
insurance premiums) required to be paid by a Borrower under any of the Loan Documents that are paid
or incurred by Agent, (b) fees or charges paid or incurred by Agent in connection with the Lender
Group’s transactions with Borrowers, including, fees or charges for photocopying, notarization,
couriers and messengers, telecommunication, public record searches (including tax lien, litigation,
and UCC searches and including searches with the patent and trademark office, the copyright office,
or the department of motor vehicles), filing, recording, publication, appraisal (including periodic
Collateral appraisals or business valuations described in Section 4.6 and otherwise
permitted by this Agreement to the extent of the fees and charges (and up to the amount of any
limitation) contained in this Agreement, real estate surveys, real estate title policies and
endorsements, and environmental audits, (c) costs and expenses incurred by Agent in the
disbursement of funds to or for the account of Borrowers or other members of the Lender Group (by
wire transfer or otherwise), (d) charges paid or incurred by Agent resulting from the dishonor of
checks, (e) reasonable costs and expenses paid or incurred by Agent to correct any default or
enforce any provision of the Loan Documents, or in gaining possession of, maintaining, handling,
preserving, storing, shipping, selling, preparing for sale, or advertising to sell the Collateral,
or any portion thereof, irrespective of whether a sale is consummated, (f) audit fees and expenses
of Agent related to audit examinations of the Books to the extent of the fees and charges (and up
to the amount of any limitation) contained in this Agreement, (g) reasonable costs and expenses of
third party claims or any other suit paid or incurred by Agent in enforcing or defending the Loan
Documents or in connection with the transactions contemplated by the Loan Documents or the Lender
Group’s relationship with any Borrower or any guarantor of the Obligations, (h) Agent’s reasonable
fees and expenses (including attorneys fees) incurred in advising, structuring, drafting,
reviewing, administering, or amending the Loan Documents, and (i) Agent’s and each Lender’s
reasonable fees and expenses (including attorneys fees) incurred in terminating, enforcing
(including attorneys fees and expenses incurred in connection with a “workout,” a “restructuring,”
or an Insolvency Proceeding concerning any Borrower or in exercising rights or remedies under the
Loan Documents), or defending the Loan Documents, irrespective of whether suit is brought, or in
taking any Remedial Action concerning the Collateral.

"Lender-Related Person” means any Lender, such Lender’s Affiliates, and the officers,
directors, employees, and agents of such Lender.

"Letter of Credit” means an L/C or an L/C Undertaking, as the context requires.

"Letter of Credit Usage” means, as of any date of determination, the aggregate undrawn
amount of all outstanding Letters of Credit plus 100% of the amount of outstanding time drafts
accepted by an Underlying Issuer as a result of drawings under Underlying Letters of Credit.

"LIBOR Deadline” has the meaning set forth in Section 2.13(b)(i).

"LIBOR Notice” means a written notice in the form of Exhibit L-1.

"LIBOR Rate” means, for each Interest Period for each LIBOR Rate Loan, the rate per
annum determined by Agent (rounded upwards, if necessary, to the next 1/16%) by dividing (a) the
Base LIBOR Rate for such Interest Period, by (b) 100% minus the Reserve Percentage. The LIBOR Rate
shall be adjusted on and as of the effective day of any change in the Reserve Percentage.

"LIBOR Rate Loan” means each portion of an Advance or the Term Loan that bears
interest at a rate determined by reference to the LIBOR Rate.

"LIBOR Rate Revolver Margin” means 2.00 percentage points.

"LIBOR Rate Term Loan A/B Margin” means 2.25 percentage points.

"LIBOR Rate Term Loan C Margin” means 2.25 percentage points.

"Lien” means any interest in an asset securing an obligation owed to, or a claim by,
any Person other than the owner of the asset, whether such interest shall be based on the common
law, statute, or contract, whether such interest shall be recorded or perfected, and whether such
interest shall be contingent upon the occurrence of some future event or events or the existence of
some future circumstance or circumstances, including the lien or security interest arising from a
mortgage, deed of trust, encumbrance, pledge, hypothecation, assignment, deposit arrangement,
security agreement, conditional sale or trust receipt, or from a lease, consignment, or bailment
for security purposes and also including reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases, and other title exceptions and
encumbrances affecting Real Property.

"Loan Account” has the meaning set forth in Section 2.10.

"Loan Documents” means this Agreement, the Bank Product Agreements, the Cash
Management Agreements, the Control Agreements, the Fee Letter, the Guaranties, the Guarantor
Security Agreement, the Letters of Credit, the Mortgages, the Officers’ Certificate, the Trademark
Security Agreement, the Pledge Agreement, the Intercompany Subordination Agreement, the Ableco
Intercreditor Agreement, any note or notes executed by a Borrower in connection with this Agreement
and payable to a member of the Lender Group, and any other agreement entered into, now or in the
future, by any Borrower and the Lender Group in connection with this Agreement.

"Loan Party” means any Borrower and any Guarantor.

"Material Adverse Change” means (a) a material adverse change in the business,
prospects, operations, results of operations, assets, liabilities or condition (financial or
otherwise) of Borrowers taken as a whole, (b) a material impairment of a Borrower’s ability to
perform its obligations under the Loan Documents to which it is a party or of the Lender Group’s
ability to enforce the Obligations or realize upon the Collateral, or (c) a material impairment of
the enforceability or priority of the Agent’s Liens on any portion of the Collateral with an
aggregate value in excess of $100,000 as a result of an action or failure to act on the part of a
Borrower.

"Material Contract” means any agreement or contract of any Borrower or any Subsidiary
of a Borrower (excluding subcontracts the costs of which by their terms are paid by such Borrower’s
or Subsidiary’s customer) which (a) involves consideration to such Borrower or Subsidiary of
$100,000 or more, (b) involves consideration by such Borrower or Subsidiary of $100,000 or more,
(c) imposes financial obligations on any Borrower or any Subsidiary of $100,000 or more (other than
any agreement that by its terms may be terminated by any Borrower or any Subsidiary upon sixty (60)
days’ notice or less) or (d) is otherwise material (or together with related agreements and
contracts, is material) to the business, operations, financial condition, performance or properties
of any Borrower, excluding, however, customer purchase orders or purchase orders to any vendor, in
each case entered into in the ordinary course of a Borrower’s business.

"Maturity Date” has the meaning set forth in Section 3.3.

"Maximum Revolver Amount” means $63,000,000.

"Metalico Akron” means Metalico Akron, Inc., an Ohio corporation.

"Metalico Akron Realty” means Metalico Akron Realty, Inc., an Ohio corporation.

"Modifications of Mortgages” means, individually and collectively, one or more
modifications to Mortgages with respect to the Facilities listed on Schedule M-1, in effect prior
to the date hereof, in form and substance satisfactory to Agent.

"Mortgages” means, individually and collectively, one or more mortgages, deeds of
trust, or deeds to secure debt, executed and delivered by a Borrower in favor of Agent, in form and
substance satisfactory to Agent, that encumber the Real Property Collateral relating to the
Facilities listed on Schedule M-2.

"Multiemployer Plan” means a “multiemployer plan” (as defined in Section 4001(a)(3) of
ERISA) to which a Borrower, any of its Subsidiaries, or any ERISA Affiliate has contributed, or was
obligated to contribute, within the past six years.

"Negotiable Collateral” means all of Borrowers’ now owned and hereafter acquired
right, title, and interest with respect to letters of credit, letter of credit rights, instruments,
promissory notes, drafts, documents, and chattel paper (including electronic chattel paper and
tangible chattel paper), and any and all supporting obligations in respect thereof.

"Net Cash Proceeds" means, with respect to the sale or disposition by any Person of
any of its assets or properties, the amount of cash received (directly or indirectly) from time to
time (whether as initial consideration or through the payment of deferred consideration) by or on
behalf of such Person or any of its Subsidiaries or Affiliates, in connection therewith after
deducting therefrom only (a) the principal amount of any Indebtedness secured by any Lien permitted
by Section 7.1 on any asset or property (other than Indebtedness assumed by the purchaser
of such asset) which is required to be, and is, repaid in connection with such sale or disposition
(other than Indebtedness under this Agreement), (b) reasonable expenses related thereto reasonably
incurred by such Person in connection therewith, (c) transfer taxes paid by such Person in
connection therewith, and (d) net income taxes (including capital gains taxes) to be paid in
connection with such sale or disposition (after taking into account any tax credits or deductions
and any tax sharing arrangements).

"Net Orderly Liquidation Value” means, with respect to an item of Eligible Inventory,
as of any date of determination, the orderly liquidation value thereof as determined by Agent in
its Permitted Discretion, which determination may be made by Agent in reliance on periodic
appraisals.

"New Loan Party” means each Loan Party on the Closing Date that is not an Existing
Loan Party.

"Obligations” means (a) all loans (including Term Loans), Advances, debts, principal,
interest (including any interest that, but for the provisions of the Bankruptcy Code, would have
accrued), contingent reimbursement obligations with respect to outstanding Letters of Credit,
premiums, liabilities (including all amounts charged to Borrowers’ Loan Account pursuant hereto),
obligations, fees (including the fees provided for in the Fee Letter), charges, costs, Lender Group
Expenses (including any fees or expenses that, but for the provisions of the Bankruptcy Code, would
have accrued), lease payments, guaranties, covenants, and duties of any kind and description owing
by Borrowers to the Lender Group pursuant to or evidenced by the Loan Documents and irrespective of
whether for the payment of money, whether direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter arising, and including all interest not paid when due and all
Lender Group Expenses that Borrowers are required to pay or reimburse by the Loan Documents, by
law, or otherwise, and (b) all Bank Product Obligations. Any reference in this Agreement or in the
Loan Documents to the Obligations shall include all amendments, changes, extensions, modifications,
renewals replacements, substitutions, and supplements, thereto and thereof, as applicable, both
prior and subsequent to any Insolvency Proceeding.

"Originating Lender” has the meaning set forth in Section 14.1(d).

"Original Closing Date” means the “Closing Date” (as defined in the Existing Loan
Agreement).

"Officers’ Certificate” means the representations and warranties of officers form
submitted by Agent to Administrative Borrower, together with Borrowers’ completed responses to the
inquiries set forth therein, the form and substance of such responses to be reasonably satisfactory
to Agent.

"Overadvance” has the meaning set forth in Section 2.5.

"Parent” has the meaning set forth in the preamble to this Agreement.

"Participant” has the meaning set forth in Section 14.1(d).

"PBGC” means the Pension Benefit Guaranty Corporation as defined in Title IV of ERISA,
or any successor thereto.

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

"Permitted Dispositions” means (a) sales or other dispositions by Borrowers of
Equipment that is substantially worn, damaged, or obsolete in the ordinary course of the applicable
Borrower’s business, (b) sales by Borrowers of Inventory to buyers in the ordinary course of
business, (c) the use or transfer of money or Cash Equivalents by Borrowers in a manner that is not
prohibited by the terms of this Agreement or the other Loan Documents, (d) the licensing by
Borrowers, on a non-exclusive basis, of patents, trademarks, copyrights, and other intellectual
property rights in the ordinary course of the applicable Borrower’s business, and (e) the sale,
distribution, transfer or other disposition of any of the Stock of Beacon owned by the Parent.

“Permitted Holder” means Carlos Aguero, and his Family Members, and his Family Trusts.

"Permitted Investments” means (a) investments in Cash Equivalents, (b) investments in
negotiable instruments for collection, (c) advances made in connection with purchases of goods or
services in the ordinary course of business, (d) investments by any Borrower in any other Borrower
provided that if any such investment is in the form of Indebtedness (other than Contingent
Obligations in favor of third parties), such Indebtedness shall be subject to the terms and
conditions of the Intercompany Subordination Agreement, (e) the purchase by the Parent of Stock of
Totalcat in connection with the Totalcat Acquisition, and (f) the Beacon Investment.

"Permitted Liens” means (a) Liens held by or in favor of Agent, (b) Liens for unpaid
taxes that either (i) are not yet delinquent, or (ii) do not constitute an Event of Default
hereunder and are the subject of Permitted Protests, (c) Liens set forth on Schedule P-1,
(d) the interests of lessors under operating leases, (e) purchase money Liens or the interests of
lessors under Capital Leases to the extent that such Liens or interests secure Permitted Purchase
Money Indebtedness and so long as such Lien attaches only to the asset purchased or acquired and
the proceeds thereof, (f) Liens arising by operation of law in favor of warehousemen, landlords,
carriers, mechanics, materialmen, laborers, or suppliers, incurred in the ordinary course of
Borrowers’ business and not in connection with the borrowing of money, and which Liens either (i)
are for sums not yet delinquent, or (ii) are the subject of Permitted Protests, (g) Liens arising
from deposits made in connection with obtaining worker’s compensation or other unemployment
insurance, (h) Liens or deposits to secure performance of bids, tenders, or leases incurred in the
ordinary course of Borrowers’ business and not in connection with the borrowing of money, (i) Liens
granted as security for surety or appeal bonds in connection with obtaining such bonds in the
ordinary course of Borrowers’ business, (j) Liens resulting from any judgment or award that is not
an Event of Default hereunder, (k) Liens with respect to the Real Property Collateral that are set
forth on Schedule P-2 in connection with all other Real Property Collateral, (l) with
respect to any Real Property that is not part of the Real Property Collateral, easements, rights of
way, and zoning restrictions that do not materially interfere with or impair the use or operation
thereof by Borrowers, and (m) Liens held by Ableco securing the repayment of the Ableco Loans and
all other obligations under the Ableco Loan Agreement, provided that the priority of, and the
rights attendant to, such Liens are subject to the terms of the Ableco Intercreditor Agreement.

"Permitted Protest” means the right of the applicable Borrower to protest any Lien
(other than any such Lien that secures the Obligations), taxes (other than payroll taxes or taxes
that are the subject of a United States federal tax lien), or rental payment, provided that (a) a
reserve with respect to such obligation is established on the Books in such amount as is required
under GAAP, (b) any such protest is instituted promptly and prosecuted diligently by the applicable
Borrower in good faith, and (c) Agent is satisfied that, while any such protest is pending, there
will be no impairment of the enforceability, validity, or priority of any of the Agent’s Liens.

"Permitted Purchase Money Indebtedness” means, as of any date of determination,
Purchase Money Indebtedness incurred after the Closing Date in an aggregate amount outstanding at
any one time not in excess of $10,000,000.

"Person” means natural persons, corporations, limited liability companies, limited
partnerships, general partnerships, limited liability partnerships, joint ventures, trusts, land
trusts, business trusts, or other organizations, irrespective of whether they are legal entities,
and governments and agencies and political subdivisions thereof.

"Personal Property Collateral” means all Collateral other than Real Property.

"Plan” means any employee benefit plan, program, or arrangement maintained or
contributed to by a Borrower or with respect to which it may incur liability.

"Pledge Agreement” means a pledge and security agreement dated as of May 31, 2001,
executed and delivered by each Borrower pursuant to which the Stock of each Subsidiary of Parent
and each promissory note described in Section 7.1(e) are pledged to Agent.

"Premium Amount” means, as of any date of determination, an amount equal to
$63,000,000 plus the principal balance of the Term Loans then outstanding, provided that if
(i) all or a substantial portion of the assets of one or more Borrowers is sold or transferred to a
Person (“Newco”), (ii) such sale or transfer to Newco is approved in writing by the Agent
in its Permitted Discretion, (iii) the Maximum Revolver Amount is reduced in connection with such
sale or transfer (the amount of such reduction being referred to herein as the “Revolver
Reduction”) and (iv) the Lenders provide financing to Newco in an amount at least equal to the
Revolver Reduction on terms and conditions that are satisfactory to the Agent, then the Premium
Amount shall automatically be reduced by an amount equal to the Revolver Reduction.

"Projections” means, with respect to the Parent and its Subsidiaries on a consolidated
and a consolidating basis, such Person’s forecasted (a) balance sheets, (b) profit and loss
statements, and (c) cash flow statements, all prepared on a consistent basis with Parent’s
historical financial statements, together with appropriate supporting details and a statement of
underlying assumptions.

"Pro Rata Share” means, as of any date of determination:

(a) with respect to a Lender’s obligation to make Advances and receive
payments of principal, interest, fees, costs, and expenses with respect thereto, (i) prior
to the Revolver Commitments being terminated or reduced to zero, the percentage obtained by
dividing (y) such Lender’s Revolver Commitment, by (z) the aggregate Revolver Commitments of
all Lenders, and (ii) from and after the time that the Revolver Commitments have been
terminated or reduced to zero, the percentage obtained by dividing (y) the aggregate
outstanding principal amount of such Lender’s Advances by (z) the aggregate outstanding
principal amount of all Advances,

(b) with respect to a Lender’s obligation to participate in Letters of
Credit, to reimburse the Issuing Lender, and to receive payments of fees with respect
thereto, (i) prior to the Revolver Commitments being terminated or reduced to zero, the
percentage obtained by dividing (y) such Lender’s Revolver Commitment, by (z) the aggregate
Revolver Commitments of all Lenders, and (ii) from and after the time that the Revolver
Commitments have been terminated or reduced to zero, the percentage obtained by dividing (y)
the aggregate outstanding principal amount of such Lender’s Advances by (z) the aggregate
outstanding principal amount of all Advances,

(c) with respect to a Lender’s obligation to make the Term Loan A and receive
payments of principal, interest, fees, costs, and expenses with respect thereto, (i) prior
to the making of the Term Loan A, the percentage obtained by dividing (y) such Lender’s Term
Loan A Commitment, by (z) the aggregate amount of all Lenders’ Term Loan A Commitments, and
(ii) from and after the making of the Term Loan A, the percentage obtained by dividing (y)
the principal amount of such Lender’s portion of the Term Loan A by (z) the aggregate
principal amount of the Term Loan A,

(d) with respect to a Lender’s obligation to make the Term Loan B and receive
payments of principal, interest, fees, costs, and expenses with respect thereto, (i) prior
to the making of the Term Loan B, the percentage obtained by dividing (y) such Lender’s Term
Loan B Commitment, by (z) the aggregate amount of all Lenders’ Term Loan B Commitments, and
(ii) from and after the making of the Term Loan B, the percentage obtained by dividing (y)
the principal amount of such Lender’s portion of the Term Loan C by (z) the aggregate
principal amount of the Term Loan B,

(e) with respect to a Lender’s obligation to make the Term Loan C and receive
payments of principal, interest, fees, costs, and expenses with respect thereto, (i) prior
to the making of the Term Loan C, the percentage obtained by dividing (y) such Lender’s Term
Loan C Commitment, by (z) the aggregate amount of all Lenders’ Term Loan C Commitments, and
(ii) from and after the making of the Term Loan C, the percentage obtained by dividing (y)
the principal amount of such Lender’s portion of the Term Loan C by (z) the aggregate
principal amount of the Term Loan C,

(f) with respect to a Lender’s obligation to make the Facilities Increase
Loan and receive payments of principal, interest, fees, costs, and expenses with respect
thereto, (i) prior to the making of the Facilities Increase Loan, the percentage obtained by
dividing (y) such Lender’s Facilities Increase Loan Commitment, by (z) the aggregate amount
of all Lenders’ Facilities Increase Loan Commitments, and (ii) from and after the making of
the Facilities Increase Loan, the percentage obtained by dividing (y) the principal amount
of such Lender’s portion of the Facilities Increase Loan by (z) the aggregate principal
amount of the Facilities Increase Loan,

(g) with respect to all other matters as to a particular Lender (including
the indemnification obligations arising under Section 11.3), the percentage obtained
by dividing (i) such Lender’s Revolver Commitment plus the outstanding principal amount of
such Lender’s portion of the Term Loans, by (ii) the aggregate amount of Revolver
Commitments of all Lenders plus the outstanding principal amount of the Term Loans;
provided, however, that in the event the Revolver Commitments have been
terminated or reduced to zero, Pro Rata Share under this clause shall be the percentage
obtained by dividing (A) the outstanding principal amount of such Lender’s Advances plus
such Lender’s ratable portion of the Risk Participation Liability with respect to
outstanding Letters of Credit plus the outstanding principal amount of such Lender’s portion
of the Term Loans, by (B) the outstanding principal amount of all Advances plus the
aggregate amount of the Risk Participation Liability with respect to outstanding Letters of
Credit plus the outstanding principal amount of the Term Loans.

"Purchase Money Indebtedness” means Indebtedness (other than the Obligations, but
including Capitalized Lease Obligations), incurred at the time of, or within 30 days after, the
acquisition of any fixed assets for the purpose of financing all or any part of the acquisition
cost thereof.

"Real Property” means any estates or interests in real property now owned or hereafter
acquired by any Borrower and the improvements thereto.

"Real Property Collateral” means the parcel or parcels of Real Property identified on
Schedule R-1 and any Real Property hereafter acquired by a Borrower.

"Record” means information that is inscribed on a tangible medium or which is stored
in an electronic or other medium and is retrievable in perceivable form.

"Remedial Action” means all actions taken to (a) clean up, remove, remediate, contain,
treat, monitor, assess, evaluate, or in any way address Hazardous Materials in the indoor or
outdoor environment, (b) prevent or minimize a release or threatened release of Hazardous Materials
so they do not migrate or endanger or threaten to endanger public health or welfare or the indoor
or outdoor environment, (c) perform any pre-remedial studies, investigations, or post-remedial
operation and maintenance activities, or (d) conduct any other actions authorized by 42 USC § 9601.

"Replacement Lender” has the meaning set forth in Section 15.2.

"Reportable Event” means any of the events described in Section 4043(c) of ERISA or
the regulations thereunder other than a Reportable Event as to which the provision of 30 days
notice to the PBGC is waived under applicable regulations.

"Required Availability” means Excess Availability and unrestricted cash and Cash
Equivalents in an amount of not less than $1,500,000.

"Required Lenders” means, at any time, at least two (2) Lenders whose aggregate Pro
Rata Shares (calculated under clause (f) of the definition of Pro Rata Shares) equal or exceed
50.1%.

"Reserve Percentage” means, on any day, for any Lender, the maximum percentage
prescribed by the Board of Governors of the Federal Reserve System (or any successor Governmental
Authority) for determining the reserve requirements (including any basic, supplemental, marginal,
or emergency reserves) that are in effect on such date with respect to eurocurrency funding
(currently referred to as “eurocurrency liabilities”) of that Lender, but so long as Lender is not
required or directed under applicable regulations to maintain such reserves, the Reserve Percentage
shall be zero.

"Revolver Commitment” means, with respect to each Lender, its Revolver Commitment,
and, with respect to all Lenders, their Revolver Commitments, in each case as such Dollar amounts
are set forth beside such Lender’s name under the applicable heading on Schedule C-1 or in
the Assignment and Acceptance pursuant to which such Lender became a Lender hereunder, as such
amounts may be reduced or increased from time to time pursuant to assignments made in accordance
with the provisions of Section 14.1.

"Revolver Usage” means, as of any date of determination, the sum of (a) the then
extant amount of outstanding Advances, plus (b) the then extant amount of the Letter of Credit
Usage.

"Revolving Loan Lender” means a Lender that has a Revolver Commitment, or if the
Revolver Commitments have been terminated or reduced to zero, that has an outstanding portion of
the Advances.

"Risk Participation Liability” means, as to each Letter of Credit, all reimbursement
obligations of Borrowers to the Issuing Lender with respect to an L/C Undertaking, consisting of
(a) the amount available to be drawn or which may become available to be drawn, (b) all amounts
that have been paid by the Issuing Lender to the Underlying Issuer to the extent not reimbursed by
Borrowers, whether by the making of an Advance or otherwise, and (c) all accrued and unpaid
interest, fees, and expenses payable with respect thereto.

"SEC” means the United States Securities and Exchange Commission and any successor
thereto.

"Securities Account” means a “securities account” as that term is defined in the Code.

"Settlement” has the meaning set forth in Section 2.3(f)(i).

"Settlement Date” has the meaning set forth in Section 2.3(f)(i).

"Solvent” means, with respect to any Person on a particular date, that such Person is
not insolvent (as such term is defined in the Uniform Fraudulent Transfer Act).

"Stock” means all shares, options, warrants, interests, participations, or other
equivalents (regardless of how designated) of or in a Person, whether voting or nonvoting,
including common stock, preferred stock, or any other “equity security” (as such term is defined in
Rule 3a11-1 of the General Rules and Regulations promulgated by the SEC under the Exchange Act).

"Subsidiary” of a Person means a corporation, partnership, limited liability company,
or other entity in which that Person directly or indirectly owns or controls the shares of Stock
having ordinary voting power to elect a majority of the board of directors (or appoint other
comparable managers) of such corporation, partnership, limited liability company, or other entity;
provided that, so long as Beacon is neither a Borrower nor a Guarantor under this Agreement, it
shall not be deemed to be a Subsidiary of any Borrower for any purpose under this Agreement.

"Subsidiary Guarantors” means General Smelting, Metalico Niles, Inc., an Ohio
corporation, and River Hills by the River, Inc., a Florida corporation.

"Swing Lender” means Wells Fargo or any other Lender that, at the request of
Administrative Borrower and with the consent of Agent agrees, in such Lender’s sole discretion, to
become the Swing Lender under Section 2.3(d).

"Swing Loan” and “Swing Loans” have the respective meanings set forth in
Section 2.3(d)(i).

"Taxes” has the meaning set forth in Section 17.5.

"Term Loan” and “Term Loans” have the meaning set forth in Section
2.2(c).

"Term Loan A Commitment” means, with respect to each Lender, its Term Loan A
Commitment, and, with respect to all Lenders, their Term Loan A Commitments, in each case as such
Dollar amounts are set forth beside such Lender’s name under the applicable heading on Schedule
C-1 or in the Assignment and Acceptance pursuant to which such Lender became a Lender hereunder
in accordance with the provisions of Section 14.1.

"Term Loan A” has the meaning set forth in Section 2.2(a).

"Term Loan A Amount” means $8,000,000.

"Term Loan B Capital Assets” has the meaning set forth in Section 2.2(b).

"Term Loan B” has the meaning set forth in Section 2.2(b).

"Term Loan B Amount” means $2,000,000.

"Term Loan B Commitment” means, with respect to each Lender, its Term Loan B
Commitment, and, with respect to all Lenders, their Term Loan B Commitments, in each case as such
Dollar amounts are set forth beside such Lender’s name under the applicable heading on Schedule
C-1 or in the Assignment and Acceptance pursuant to which such Lender became a Lender hereunder
in accordance with the provisions of Section 14.1.

"Term Loan C” has the meaning set forth in Section 2.2(c).

"Term Loan C Amount” means $12,000,000.

"Term Loan C Capital Assets” has the meaning set forth in Section 2.2(c).

"Term Loan C Commitment” means, with respect to each Lender, its Term Loan C
Commitment, and, with respect to all Lenders, their Term Loan C Commitments, in each case as such
Dollar amounts are set forth beside such Lender’s name under the applicable heading on Schedule
C-1 or in the Assignment and Acceptance pursuant to which such Lender became a Lender hereunder
in accordance with the provisions of Section 14.1.

"Termination Event” means (i) a Reportable Event with respect to any Benefit Plan,
(ii) any event that causes any Borrower or any of its ERISA Affiliates to incur liability under
Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section
4971 or 4975 of the IRC, (iii) the filing of a notice of intent to terminate a Benefit Plan or the
treatment of a Benefit Plan amendment as a termination under Section 4041 of ERISA, (iv) the
institution of proceedings by the PBGC to terminate a Benefit Plan, or (v) any other event or
condition which might constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Benefit Plan.

"Title Insurance Policy” means the mortgagee’s loan policy, together with all
endorsements made from time to time thereto, issued by or on behalf of a title insurance company
acceptable to Agent in its Permitted Discretion, such policy to be satisfactory in form and
substance to Agent, insuring the Lien created by the Mortgage on each Facility in an amount and on
terms satisfactory to Agent.

"Totalcat” means Totalcat Group, Inc., a Delaware corporation.

"Totalcat Acquisition” means the acquisition by the Parent of 82.5% of the issued and
outstanding Stock of Totalcat, together with an option to purchase the remaining Stock of Totalcat,
all in accordance with the terms of the Totalcat Acquisition Agreement.

"Totalcat Acquisition Agreement” means that certain Stock Purchase Agreement, dated as
of June 25, 2007, by and among each of the stockholders of Totalcat signatory thereto and the
Parent.

"Totalcat Acquisition Documents” means, collectively, the Totalcat Acquisition
Agreement and all other instruments and agreements executed and delivered in connection therewith.

"Total Commitment” means, with respect to each Lender, its Total Commitment, and, with
respect to all Lenders, their Total Commitments, in each case as such Dollar amounts are set forth
beside such Lender’s name under the applicable heading on Schedule C-1 attached hereto or
on the signature page of the assignment and acceptance pursuant to which such Lender became a
Lender hereunder, as such amounts may be reduced or increased from time to time pursuant to
assignments made in accordance with the provisions of Section 14.1.

"Trademark Security Agreement” means the Trademark Security Agreement, dated as of May
31, 2001, executed and delivered by certain Borrowers and Agent, the form and substance of which is
satisfactory to Agent.

"Underlying Issuer” means a third Person which is the beneficiary of an L/C
Undertaking and which has issued a letter of credit at the request of the Issuing Lender for the
benefit of Borrowers.

"Underlying Letter of Credit” means a letter of credit that has been issued by an
Underlying Issuer.

"USA Patriot Act” means the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56.

"Voidable Transfer” has the meaning set forth in Section 17.8.

"Wells Fargo” means Wells Fargo Bank, National Association, a national banking
association.

1.2 Accounting Terms. All accounting terms not specifically defined herein
shall be construed in accordance with GAAP. When used herein, the term “financial statements”
shall include the notes and Schedules thereto. Whenever the term “Borrowers” or the term “Parent”
is used in respect of a financial covenant or a related definition, it shall be understood to mean
Parent and its Subsidiaries on a consolidated basis unless the context clearly requires otherwise.

1.3 Code. Any terms used in this Agreement that are defined in the Code
shall be construed and defined as set forth in the Code unless otherwise defined herein.

1.4 Construction. Unless the context of this Agreement or any other Loan
Document clearly requires otherwise, references to the plural include the singular, references to
the singular include the plural, the term “including” is not limiting, and the term “or” has,
except where otherwise indicated, the inclusive meaning represented by the phrase “and/or.” The
words “hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Agreement or any other
Loan Document refer to this Agreement or such other Loan Document, as the case may be, as a whole
and not to any particular provision of this Agreement or such other Loan Document, as the case may
be. Section, subsection, clause, Schedule, and Exhibit references herein are to this Agreement
unless otherwise specified. Any reference in this Agreement or in the other Loan Documents to any
agreement, instrument, or document shall include all alterations, amendments, changes, extensions,
modifications, renewals, replacements, substitutions, joinders, and supplements, thereto and
thereof, as applicable (subject to any restrictions on such alterations, amendments, changes,
extensions, modifications, renewals, replacements, substitutions, joinders, and supplements set
forth herein). Any reference herein to any Person shall be construed to include such Person’s
successors and assigns. Any requirement of a writing contained herein or in the other Loan
Documents shall be satisfied by the transmission of a Record and any Record transmitted shall
constitute a representation and warranty as to the accuracy and completeness of the information
contained therein.

1.5 Schedules and Exhibits. All of the Schedules and Exhibits attached to
this Agreement shall be deemed incorporated herein by reference.

2. LOAN AND TERMS OF PAYMENT.

2.1 Revolver Advances.

(a) Subject to the terms and conditions of this Agreement, and during the term of
this Agreement, each Lender with a Revolver Commitment agrees to make advances (“Advances”)
to Borrowers in an amount at any one time outstanding not to exceed an amount equal to the lesser
of (i) the Maximum Revolver Amount less the Letter of Credit Usage, or (ii) the Borrowing Base of
Borrowers on a combined basis less the Letter of Credit Usage. For purposes of this Agreement,
"Borrowing Base”, as of any date of determination, shall mean the result of:

(x) the lesser of

(i) 85% of the amount of Eligible Accounts, less the amount, if any, of
the Dilution Reserve, and

(ii) an amount equal to Borrowers’ Collections with respect to Accounts
for the immediately preceding 75 day period , plus

(y) the lowest of

(i) $25,000,000,

(ii) the lesser of (A) 60% of the difference between (I) the lower of
cost or market value of Eligible Inventory and (II) the amount of the
Inventory Reserve, or (B) 80% of the Net Orderly Liquidation Value of
Eligible Inventory, and

(iii) 65% of the amount of credit availability created by clause (x)
above, minus

(z) the sum of (i) the Bank Product Reserve, and (ii) the aggregate amount of reserves, if
any, established by Agent under Section 2.1(b).

(b) Anything to the contrary in this Section 2.1 notwithstanding, Agent
shall have the right to establish reserves in such amounts, and with respect to such matters, as
Agent in its Permitted Discretion shall deem necessary or appropriate, against the Borrowing Base,
including reserves with respect to (i) sums that Borrowers are required to pay (such as taxes,
assessments, insurance premiums, or, in the case of leased assets, rents or other amounts payable
under such leases) and has failed to pay under any Section of this Agreement or any other Loan
Document, (ii) un-issued credits given by Borrowers to any Account Debtors, and (iii) amounts owing
by Borrowers to any Person to the extent secured by a Lien on, or trust over, any of the Collateral
(other than any existing Permitted Lien set forth on Schedule P-1 or Schedule P-2
which is entitled to have priority over the Agent’s Liens), which Lien or trust, in the Permitted
Discretion of Agent likely would have a priority superior to the Agent’s Liens (such as Liens or
trusts in favor of landlords, warehousemen, carriers, mechanics, materialmen, laborers, or
suppliers, or Liens or trusts for ad valorem, excise, sales, or other taxes where given priority
under applicable law) in and to such item of the Collateral, provided that no reserve shall be
established by Agent in respect of a Lien described in this clause (iii) if the Collateral subject
to such Lien is excluded from the calculation of the Borrowing Base. In addition to the foregoing,
Agent shall have the right to have the Inventory reappraised by a qualified appraisal company
selected by Agent from time to time after the Closing Date for the purpose of redetermining the Net
Orderly Liquidation Value of the Eligible Inventory portion of the Collateral, which appraisals, so
long as no Default or Event of Default shall have occurred and be continuing, shall be conducted at
Borrowers’ expense no more frequently than twice during any twelve month period, and, after the
occurrence and during the continuance of a Default or an Event of Default, at Borrowers’ expense as
frequently as Agent shall determine. Based upon the results of any such redetermination, and any
other information received from the collateral reporting required under Section 6.2,
Revolving Loan Lender may, in its Permitted Discretion, redetermine the Borrowing Base.

(c) The Lenders with Revolver Commitments shall have no obligation to make
additional Advances hereunder to the extent such additional Advances would cause the Revolver Usage
to exceed the Maximum Revolver Amount.

(d) Notwithstanding anything to the contrary contained in this Section 2.1,
the Loan Parties hereby acknowledge, confirm and agree that (i) immediately prior to the Closing
Date, the outstanding principal amount of the Advances under and as defined in the Existing Loan
Facility is equal to $4,773,755.42 (such Indebtedness being hereinafter referred to as the
"Existing Advances Indebtedness”), (ii) such Existing Advances Indebtedness shall not be
repaid on the Closing Date, but rather shall be reevidenced by this Agreement as a portion of the
Advances outstanding hereunder, and (iii) for all purposes of this Agreement and the other Loan
Documents, the sum of the Existing Advances Indebtedness on the Closing Date and the Advances made
on the Closing Date shall constitute the Advances outstanding on the Closing Date.

(e) Amounts borrowed pursuant to this Section may be repaid and, subject to the
terms and conditions of this Agreement, reborrowed at any time during the term of this Agreement.

2.2 Term Loans.

(a) (i) Subject to the terms and conditions of this Agreement, each Lender with a
Term Loan A Commitment may, in its sole discretion, make term loans (collectively, the “Term
Loan A”) to Borrowers in an amount equal to such Lender’s Pro Rata Share of the Term Loan A
Commitment. The Term Loan A shall be repaid in consecutive monthly installments each in a
principal amount equal to 1/60th of the Term Loan A Amount, plus accrued interest on the amount of
principal so repaid, on the first day of each month, commencing on July 1, 2007. Borrowers may, at
any time, prepay all or a portion of the Term Loan A without penalty or premium. Each prepayment
shall be applied against the remaining installments of principal due on the Term Loan A in the
inverse order of maturity. The outstanding unpaid principal balance and all accrued and unpaid
interest under the Term Loan A shall be due and payable on the date of termination of this
Agreement, whether by its terms, by prepayment, or by acceleration. All amounts outstanding under
the Term Loan A shall constitute Obligations. Any principal amount of the Term Loan A which is
repaid or prepaid by Borrowers may not be reborrowed.

(ii) Notwithstanding anything to the contrary contained in this Section
2.2(a), the Loan Parties hereby acknowledge, confirm and agree that (i) immediately prior to
the Closing Date, the outstanding principal amount of the Term Loan A under and as defined in the
Existing Loan Facility is equal to $5,747,583.33 (such Indebtedness being hereinafter referred to
as the “Existing Term Loan A Indebtedness”), (ii) such Existing Term Loan A Indebtedness
shall not be repaid on the Closing Date, but rather shall be reevidenced by this Agreement as a
portion of the Term Loan A outstanding hereunder, (iii) the Term Loan A made on the Closing Date
shall be reduced by the Existing Term Loan A Indebtedness, and (iv) for all purposes of this
Agreement and the other Loan Documents, the sum of the Existing Term Loan A Indebtedness on the
Closing Date and the Term Loan A made on the Closing Date shall constitute the Term Loan A
outstanding on the Closing Date equal to the Term Loan A Amount.

(b) Subject to the terms and conditions of this Agreement, each Lender with a Term
Loan B Commitment may, in its sole discretion, make term loans (collectively, the “Term Loan
B”) to Borrowers in an amount equal to such Lender’s Pro Rata Share of the Term Loan B
Commitment. The proceeds of each Term Loan B shall be used by a Borrower solely to fund a portion
of the purchase price of assets (“Term Loan B Capital Assets”) acquired by such Borrower
that, in accordance with GAAP, are or should be included in “property, plant and equipment” or in a
similar fixed asset account on such Borrower’s balance sheet. The maximum principal amount of each
Term Loan B shall not exceed 70% of the Hard Cost of the Term Loan B Capital Assets to be acquired
by the Borrowers with a portion of the proceeds of such Term Loan B. Each Term Loan B shall be
made in a minimum amount of $50,000. Each Term Loan B shall be repaid in consecutive monthly
installments each in a principal amount equal to 1/60th of the original principal of such Term Loan
B, plus accrued interest on the amount of principal so repaid, on the first day of each month,
commencing on the first day of the first month immediately succeeding the day on which such Term
Loan B is made hereunder. The outstanding unpaid principal balance and all accrued and unpaid
interest under the Term Loan B shall be due and payable on the date of termination of this
Agreement, whether by its terms, by prepayment, or by acceleration. All amounts outstanding under
the Term Loan B shall constitute Obligations. Any principal amount of the Term Loan B which is
repaid or prepaid by Borrowers may be reborrowed pursuant to the terms hereof.

(c) Subject to the terms and conditions of this Agreement, each Lender with a Term
Loan C Commitment may, in its sole discretion, make term loans (collectively, the “Term Loan
C” and, together with the Term Loan A and Term Loan B, each a “Term Loan” and
collectively, the “Term Loans”) to Borrowers after the Effective Date in an aggregate
principal amount at any one time outstanding not to exceed such Lender’s Pro Rata Share of the Term
Loan C Commitment. Borrowers may request a maximum of four (4) Term Loan C draws. The proceeds of
each Term Loan C shall be used by a Borrower solely to fund a portion of the purchase price of an
industrial press and a shredder (“Term Loan C Capital Assets”) acquired by such Borrower.
The maximum principal amount of each Term Loan C shall not exceed 70% of the Hard Cost of the Term
Loan C Capital Assets to be acquired by the Borrowers with a portion of the proceeds of such Term
Loan C. Each Term Loan C shall be made in a minimum amount of $1,000,000. Each Term Loan C shall
be repaid in consecutive monthly installments each in a principal amount equal to 1/60th of the
original principal of such Term Loan C, plus accrued interest on the amount of principal so repaid,
on the first day of each month, commencing on the first day of the first month immediately
succeeding the day on which such Term Loan C is made hereunder. The outstanding unpaid principal
balance and all accrued and unpaid interest under the Term Loan C shall be due and payable on the
date of termination of this Agreement, whether by its terms, by prepayment, or by acceleration.
All amounts outstanding under the Term Loan C shall constitute Obligations. Any principal amount
of the Term Loan C which is repaid or prepaid by Borrowers may not be reborrowed.

(d) The Borrowers shall have the right to increase the maximum principal amount of
the Obligations (which may be in the form of a new tranche of first lien term loans) in an
aggregate principal amount of up to $15,000,000 (each, a “Facilities Increase”);
provided that a Facilities Increase shall become effective only upon the satisfaction of
the following conditions: (i) at the time of and after giving effect to such Facilities Increase,
no Default or Event of Default shall exist under the Loan Documents, and the Borrowers shall be in
pro forma compliance with the financial covenants contained in the Loan Documents, (ii) at the time
of a Facilities Increase, the conditions precedent to each extension of credit under the Loan
Documents shall have been satisfied and an upfront fee in an amount to be agreed upon shall have
been paid, (iii) the terms and conditions of any Facilities Increase shall be substantially the
same as the terms and conditions of this Agreement, (iv) the Lenders or other financial
institutions, reasonably acceptable to Agent, shall have committed to be Lenders under and fund any
such Facilities Increase in minimum amounts to be mutually determined by Agent and the
Administrative Borrower, and (v) all reasonable out-of-pocket fees and expenses owing in respect of
such Facilities Increase to Agent or the Lenders with the Facilities Increase Loan Commitment shall
have been paid. No Lender shall have any obligation to participate in any Facilities Increase.

2.3 Borrowing Procedures and Settlements.

(a) Procedure for Borrowing. Each Borrowing shall be made by a written
request by an Authorized Person delivered to Agent (which notice must be received by Agent no later
than 10:00 a.m. (California time) on the Business Day that is the requested Funding Date specifying
(i) the amount of such Borrowing, (ii) the requested Funding Date, which shall be a Business Day,
and (iii) in the case of a Borrowing consisting of a Term Loan B or Term Loan C, the Term Loan B
Capital Assets or Term Loan C Capital Assets proposed to be financed with the proceeds of such Term
Loan B or Term Loan C, as applicable together with the Hard Cost of such Term Loan B Capital Assets
or Term Loan C Capital Assets, as applicable, the invoices pertaining to such Term Loan B Capital
Assets or Term Loan C Capital Assets and any other information or documents requested by Agent that
pertain to such Term Loan B Capital Assets or Term Loan C Capital Assets. At Agent’s election, in
lieu of delivering the above-described request in writing, any Authorized Person may give Agent
telephonic notice of such request by the required time, with such telephonic notice to be confirmed
in writing within 24 hours of the giving of such notice.

(b) Agent’s Election. Promptly after receipt of a request for a Borrowing
pursuant to Section 2.3(a), Agent shall elect, in its reasonable discretion, (i) to have
the terms of Section 2.3(c) apply to such requested Borrowing, or (ii) if the Borrowing is
for an Advance, to request Swing Lender to make a Swing Loan pursuant to the terms of Section
2.3(d) in the amount of the requested Borrowing; provided, however, that if
Swing Lender declines in its sole discretion to make a Swing Loan pursuant to Section
2.3(d), the terms of Section 2.3(c) apply to such requested Borrowing.

(c) Making of Loans.

(i) In the event that Agent shall elect to have the terms of this Section
2.3(c) apply to a requested Borrowing as described in Section 2.3(b), then
promptly after receipt of a request for a Borrowing pursuant to Section 2.3(a),
Agent shall notify the Lenders, not later than 1:00 p.m. (California time) on the Business
Day immediately preceding the Funding Date applicable thereto, by telecopy, telephone, or
other similar form of transmission, of the requested Borrowing. Each Lender shall make the
amount of such Lender’s Pro Rata Share of the requested Borrowing available to Agent in
immediately available funds, to Agent’s Account, not later than 10:00 a.m. (California time)
on the Funding Date applicable thereto. After Agent’s receipt of the proceeds of such
Advances (or the Term Loan, as applicable), Agent shall make the proceeds thereof available
to Administrative Borrower on the applicable Funding Date by transferring immediately
available funds equal to such proceeds received by Agent to Administrative Borrower’s
Designated Account; provided, however, that, Agent shall not request any
Lender to make, and no Lender shall have the obligation to make, any Advance (or its portion
of the Term Loan) if Agent shall have actual knowledge that (1) one or more of the
applicable conditions precedent set forth in Section 3 will not be satisfied on the
requested Funding Date for the applicable Borrowing unless such condition has been waived,
or (2) the requested Borrowing would exceed the Availability on such Funding Date.

(ii) Unless Agent receives notice from a Lender on or prior to the Closing
Date or, with respect to any Borrowing after the Closing Date, prior to 9:00 a.m.
(California time) on the date of such Borrowing, that such Lender will not make available as
and when required hereunder to Agent for the account of Borrowers the amount of that
Lender’s Pro Rata Share of the Borrowing, Agent may assume that each Lender has made or will
make such amount available to Agent in immediately available funds on the Funding Date and
Agent may (but shall not be so required), in reliance upon such assumption, make available
to Borrowers on such date a corresponding amount. If and to the extent any Lender shall not
have made its full amount available to Agent in immediately available funds and Agent in
such circumstances has made available to Borrowers such amount, that Lender shall on the
Business Day following such Funding Date make such amount available to Agent, together with
interest at the Defaulting Lender Rate for each day during such period. A notice submitted
by Agent to any Lender with respect to amounts owing under this subsection shall be
conclusive, absent manifest error. If such amount is so made available, such payment to
Agent shall constitute such Lender’s Advance (or portion of the Term Loan, as applicable) on
the date of Borrowing for all purposes of this Agreement. If such amount is not made
available to Agent on the Business Day following the Funding Date, Agent will notify
Administrative Borrower of such failure to fund and, upon demand by Agent, Borrowers shall
pay such amount to Agent for Agent’s account, together with interest thereon for each day
elapsed since the date of such Borrowing, at a rate per annum equal to the interest rate
applicable at the time to the Advances (or portion of the Term Loan, as applicable)
composing such Borrowing. The failure of any Lender to make any Advance (or portion of the
Term Loan, as applicable) on any Funding Date shall not relieve any other Lender of any
obligation hereunder to make an Advance (or portion of the Term Loan, as applicable) on such
Funding Date, but no Lender shall be responsible for the failure of any other Lender to make
the Advance (or portion of the Term Loan, as applicable) to be made by such other Lender on
any Funding Date.

(iii) Agent shall not be obligated to transfer to a Defaulting Lender any
payments made by Borrowers to Agent for the Defaulting Lender’s benefit, and, in the absence
of such transfer to the Defaulting Lender, Agent shall transfer any such payments to each
other non-Defaulting Lender member of the Lender Group ratably in accordance with their
Commitments (but only to the extent that such Defaulting Lender’s Advance was funded by the
other members of the Lender Group) or, if so directed by Administrative Borrower and if no
Default or Event of Default had occurred and is continuing (and to the extent such
Defaulting Lender’s Advance was not funded by the Lender Group), retain same to be
re-advanced to Borrowers as if such Defaulting Lender had made Advances to Borrowers.
Subject to the foregoing, Agent may hold and, in its Permitted Discretion, re-lend to
Borrowers for the account of such Defaulting Lender the amount of all such payments received
and retained by Agent for the account of such Defaulting Lender. Solely for the purposes of
voting or consenting to matters with respect to the Loan Documents, such Defaulting Lender
shall be deemed not to be a “Lender” and such Lender’s Commitment shall be deemed to be
zero. This Section shall remain effective with respect to such Lender until (x) the
Obligations under this Agreement shall have been declared or shall have become immediately
due and payable, (y) the non-Defaulting Lenders, Agent, and Administrative Borrower shall
have waived such Defaulting Lender’s default in writing, or (z) the Defaulting Lender makes
its Pro Rata Share of the applicable Advance and pays to Agent all amounts owing by
Defaulting Lender in respect thereof. The operation of this Section shall not be construed
to increase or otherwise affect the Commitment of any Lender, to relieve or excuse the
performance by such Defaulting Lender or any other Lender of its duties and obligations
hereunder, or to relieve or excuse the performance by Borrowers of their duties and
obligations hereunder to Agent or to the Lenders other than such Defaulting Lender. Any
such failure to fund by any Defaulting Lender shall constitute a material breach by such
Defaulting Lender of this Agreement and shall entitle Administrative Borrower at its option,
upon written notice to Agent, to arrange for a substitute Lender to assume the Commitment of
such Defaulting Lender, such substitute Lender to be acceptable to Agent. In connection
with the arrangement of such a substitute Lender, the Defaulting Lender shall have no right
to refuse to be replaced hereunder, and agrees to execute and deliver a completed form of
Assignment and Acceptance in favor of the substitute Lender (and agrees that it shall be
deemed to have executed and delivered such document if it fails to do so) subject only to
being repaid its share of the outstanding Obligations (other than Bank Product Obligations,
but including an assumption of its Pro Rata Share of the Risk Participation Liability)
without any premium or penalty of any kind whatsoever; provided however, that any such
assumption of the Commitment of such Defaulting Lender shall not be deemed to constitute a
waiver of any of the Lender Groups’ or Borrowers’ rights or remedies against any such
Defaulting Lender arising out of or in relation to such failure to fund.

(d) Making of Swing Loans.

(i) In the event Agent shall elect, with the consent of Swing Lender, as a
Lender, to have the terms of this Section 2.3(d) apply to a requested Borrowing as
described in Section 2.3(b), Swing Lender as a Lender shall make such Advance in the
amount of such Borrowing (any such Advance made solely by Swing Lender as a Lender pursuant
to this Section 2.3(d) being referred to as a “Swing Loan” and such Advances
being referred to collectively as “Swing Loans”) available to Borrowers on the
Funding Date applicable thereto by transferring immediately available funds to
Administrative Borrower’s Designated Account. Each Swing Loan shall be deemed to be an
Advance hereunder and shall be subject to all the terms and conditions applicable to other
Advances, except that no such Swing Loan shall be eligible to be a LIBOR Rate Loan and all
payments on any Swing Loan shall be payable to Swing Lender as a Lender solely for its own
account (and for the account of the holder of any participation interest with respect to
such Swing Loan). Subject to the provisions of Section 2.3(i), Agent shall not
request Swing Lender as a Lender to make, and Swing Lender as a Lender shall not make, any
Swing Loan if Agent has actual knowledge that (i) one or more of the applicable conditions
precedent set forth in Section 3 will not be satisfied on the requested Funding Date
for the applicable Borrowing unless such condition has been waived, or (ii) the requested
Borrowing would exceed the Availability on such Funding Date. Swing Lender as a Lender
shall not otherwise be required to determine whether the applicable conditions precedent set
forth in Section 3 have been satisfied on the Funding Date applicable thereto prior
to making, in its sole discretion, any Swing Loan.

(ii) The Swing Loans shall be secured by the Agent’s Liens, constitute
Obligations hereunder, and bear interest at the rate applicable from time to time to
Advances that are Base Rate Loans.

(e) Agent Advances.

(i) Agent hereby is authorized by Borrowers and the Lenders, from time to
time in Agent’s sole discretion, (1) after the occurrence and during the continuance of a
Default or an Event of Default, or (2) at any time that any of the other applicable
conditions precedent set forth in Section 3 have not been satisfied, to make
Advances to Borrowers on behalf of the Lenders that Agent, in its Permitted Discretion deems
necessary or desirable (A) to preserve or protect the Collateral, or any portion thereof,
(B) to enhance the likelihood of repayment of the Obligations (other than the Bank Product
Obligations), or (C) to pay any other amount chargeable to Borrowers pursuant to the terms
of this Agreement, including Lender Group Expenses and the costs, fees, and expenses
described in Section 10 (any of the Advances described in this Section
2.3(e) shall be referred to as “Agent Advances”), provided that the
aggregate principal amount of Agent Advances does not exceed the lesser of (x) 10% of the
Borrowing Base then in effect and (y) $8,000,000. Each Agent Advance shall be deemed to be
an Advance hereunder, except that no such Agent Advance shall be eligible to be a LIBOR Rate
Loan and all payments thereon shall be payable to Agent solely for its own account.

(ii) The Agent Advances shall be repayable on demand, secured by the Agent’s
Liens granted to Agent under the Loan Documents, constitute Obligations hereunder, and bear
interest at the rate applicable from time to time to Advances that are Base Rate Loans.

(f) Settlement. It is agreed that each Lender’s funded portion of the
Advances is intended by the Lenders to equal, at all times, such Lender’s Pro Rata Share of the
outstanding Advances. Such agreement notwithstanding, Agent, Swing Lender, and the other Lenders
agree (which agreement shall not be for the benefit of or enforceable by Borrowers) that in order
to facilitate the administration of this Agreement and the other Loan Documents, settlement among
them as to the Advances, the Swing Loans, and the Agent Advances shall take place on a periodic
basis in accordance with the following provisions:

(i) Agent shall request settlement (“Settlement”) with the Lenders on
a weekly basis, or on a more frequent basis if so determined by Agent, (1) on behalf of
Swing Lender, with respect to each outstanding Swing Loan, (2) for itself, with respect to
each Agent Advance, and (3) with respect to Borrowers’ or their Subsidiaries’ Collections
received, as to each by notifying the Lenders by telecopy, telephone, or other similar form
of transmission, of such requested Settlement, no later than 2:00 p.m. (California time) on
the Business Day immediately prior to the date of such requested Settlement (the date of
such requested Settlement being the “Settlement Date”). Such notice of a Settlement
Date shall include a summary statement of the amount of outstanding Advances, Swing Loans,
and Agent Advances for the period since the prior Settlement Date. Subject to the terms and
conditions contained herein (including Section 2.3(c)(iii)): (y) if a Lender’s
balance of the Advances (including Swing Loans and Agent Advances) exceeds such Lender’s Pro
Rata Share of the Advances (including Swing Loans and Agent Advances) as of a Settlement
Date, then Agent shall, by no later than 12:00 p.m. (California time) on the Settlement
Date, transfer in immediately available funds to a Deposit Account of such Lender (as such
Lender may designate), an amount such that each such Lender shall, upon receipt of such
amount, have as of the Settlement Date, its Pro Rata Share of the Advances (including Swing
Loans and Agent Advances), and (z) if a Lender’s balance of the Advances (including Swing
Loans and Agent Advances) is less than such Lender’s Pro Rata Share of the Advances
(including Swing Loans and Agent Advances) as of a Settlement Date, such Lender shall no
later than 12:00 p.m. (California time) on the Settlement Date transfer in immediately
available funds to the Agent’s Account, an amount such that each such Lender shall, upon
transfer of such amount, have as of the Settlement Date, its Pro Rata Share of the Advances
(including Swing Loans and Agent Advances). Such amounts made available to Agent under
clause (z) of the immediately preceding sentence shall be applied against the amounts of the
applicable Swing Loans or Agent Advances and, together with the portion of such Swing Loans
or Agent Advances representing Swing Lender’s Pro Rata Share thereof, shall constitute
Advances of such Lenders. If any such amount is not made available to Agent by any Lender
on the Settlement Date applicable thereto to the extent required by the terms hereof, Agent
shall be entitled to recover for its account such amount on demand from such Lender together
with interest thereon at the Defaulting Lender Rate.

(ii) In determining whether a Lender’s balance of the Advances, Swing Loans,
and Agent Advances is less than, equal to, or greater than such Lender’s Pro Rata Share of
the Advances, Swing Loans, and Agent Advances as of a Settlement Date, Agent shall, as part
of the relevant Settlement, apply to such balance the portion of payments actually received
in good funds by Agent with respect to principal, interest, fees payable by Borrowers and
allocable to the Lenders hereunder, and proceeds of Collateral. To the extent that a net
amount is owed to any such Lender after such application, such net amount shall be
distributed by Agent to that Lender as part of such next Settlement.

(iii) Between Settlement Dates, Agent, to the extent no Agent Advances or
Swing Loans are outstanding, may pay over to Swing Lender any payments received by Agent,
that in accordance with the terms of this Agreement would be applied to the reduction of the
Advances, for application to Swing Lender’s Pro Rata Share of the Advances. If, as of any
Settlement Date, Collections of Borrowers or their Subsidiaries received since the then
immediately preceding Settlement Date have been applied to Swing Lender’s Pro Rata Share of
the Advances other than to Swing Loans, as provided for in the previous sentence, Swing
Lender shall pay to Agent for the accounts of the Lenders, and Agent shall pay to the
Lenders, to be applied to the outstanding Advances of such Lenders, an amount such that each
Lender shall, upon receipt of such amount, have, as of such Settlement Date, its Pro Rata
Share of the Advances. During the period between Settlement Dates, Swing Lender with
respect to Swing Loans, Agent with respect to Agent Advances, and each Lender (subject to
the effect of agreements between Agent and individual Lenders) with respect to the Advances
other than Swing Loans and Agent Advances, shall be entitled to interest at the applicable
rate or rates payable under this Agreement on the daily amount of funds employed by Swing
Lender, Agent, or the Lenders, as applicable.

(g) Notation. Agent shall record on its books the principal amount of the
Advances (or portion of the Term Loan, as applicable) owing to each Lender, including the Swing
Loans owing to Swing Lender, and Agent Advances owing to Agent, and the interests therein of each
Lender, from time to time and such records shall, absent manifest error, conclusively be presumed
to be correct and accurate. In addition, each Lender is authorized, at such Lender’s option, to
note the date and amount of each payment or prepayment of principal of such Lender’s Advances (or
portion of the Term Loan, as applicable) in its books and records, including computer records.

(h) Lenders’ Failure to Perform. All Advances (other than Swing Loans and
Agent Advances) shall be made by the Lenders contemporaneously and in accordance with their Pro
Rata Shares. It is understood that (i) no Lender shall be responsible for any failure by any other
Lender to perform its obligation to make any Advance (or other extension of credit) hereunder, nor
shall any Commitment of any Lender be increased or decreased as a result of any failure by any
other Lender to perform its obligations hereunder, and (ii) no failure by any Lender to perform its
obligations hereunder shall excuse any other Lender from its obligations hereunder.

2.4 Payments.

(a) Payments by Borrowers.

(i) Except as otherwise expressly provided herein, all payments by Borrowers
shall be made to Agent’s Account for the account of the Lender Group and shall be made in
immediately available funds, no later than 11:00 a.m. (California time) on the date
specified herein. Any payment received by Agent later than 11:00 a.m. (California time),
shall be deemed to have been received on the following Business Day and any applicable
interest or fee shall continue to accrue until such following Business Day.

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

(b) Apportionment, Application and Reversal of Payments.

(i) Except as otherwise provided with respect to Defaulting Lenders and
except as otherwise provided in the Loan Documents (including agreements between Agent and
individual Lenders), aggregate principal and interest payments shall be apportioned ratably
among the Lenders (according to the unpaid principal balance of the Obligations to which
such payments relate held by each Lender) and payments of fees and expenses (other than fees
or expenses that are for Agent’s separate account, after giving effect to any agreements
between Agent and individual Lenders) shall be apportioned ratably among the Lenders having
a Pro Rata Share of the type of Commitment or Obligation to which a particular fee relates.
All payments shall be remitted to Agent and all such payments (other than payments received
while no Default or Event of Default has occurred and is continuing and which relate to the
payment of principal or interest of specific Obligations or which relate to the payment of
specific fees), and all proceeds of Accounts or other Collateral received by Agent, shall be
applied as follows:

A. first, to pay any Lender Group Expenses then due to Agent under the Loan
Documents, until paid in full,

B. second, to pay any Lender Group Expenses then due to the Lenders under
the Loan Documents, on a ratable basis, until paid in full,

C. third, to pay any fees then due to Agent under the Loan Documents until
paid in full,

D. fourth, to pay any fees then due to the Lenders (after giving effect to
any agreements between Agent and individual Lenders) under the Loan Documents, on a ratable basis,
until paid in full,

E. fifth, to pay interest due in respect of Agent Advances until paid in
full,

F. sixth, to pay the principal of all Agent Advances until paid in full,

G. seventh, to pay interest due in respect of Advances (other than Agent
Advances), the Swing Loans and the Term Loans, on a ratable basis, until paid in full,

H. eighth, to pay all principal amounts then due (other than as a result of
an acceleration thereof) with respect to Swing Loans and the Term Loans, on a ratable basis, until
paid in full,

I. ninth, so long as no Event of Default has occurred and is continuing, and
at Agent’s election, to pay amounts then due and owing by Borrowers or their Subsidiaries in
respect of Bank Products, until paid in full,

J. tenth, so long as no Event of Default has occurred and is continuing, to
pay the principal of all Advances (other than Agent Advances) until paid in full,

K. eleventh, if an Event of Default has occurred and is continuing, ratably
(i) to pay the principal of all Advances until paid in full, and (ii) to Agent, to be held by
Agent, for the benefit of the Bank Product Provider, as applicable, as cash collateral in an amount
up to the amount of the Bank Products Reserve established prior to the occurrence of, and not in
contemplation of, the subject Event of Default until Borrowers’ and their Subsidiaries’ obligations
in respect of the then extant Bank Products have been paid in full or the cash collateral amount
has been exhausted,

L. twelfth, if an Event of Default has occurred and is continuing, to pay
the outstanding principal balance of the Term Loans, on a ratable basis (in the inverse order of
the maturity of the installments due thereunder) until the Term Loans are paid in full,

M. thirteenth, if an Event of Default has occurred and is continuing, to be
held by Agent as cash collateral in an amount up to 105% of the then extant Letter of Credit Usage
until paid in full,

N. fourteenth, to pay any other Obligations (including any Bank Product
Obligations) until paid in full, and

O. fifteenth, to Borrowers (to be wired to the Designated Account) or such
other Person entitled thereto under applicable law.

(ii) In each instance, so long as no Default or Event of Default has occurred
and is continuing, Section 2.4(b) shall not be deemed to apply to any payment by
Borrowers to Agent and specified by Borrowers to be for the payment of specific Obligations
then due and payable (or prepayable) under any provision of this Agreement.

(iii) For purposes of the foregoing, “paid in full” means and includes
payment of all amounts owing under the Loan Documents according to the terms thereof,
including loan fees, service fees, professional fees, interest (and specifically including
interest accrued after the commencement of any Insolvency Proceeding), default interest,
interest on interest, and expense reimbursements, whether or not the same would be or is
allowed or disallowed in whole or in part in any Insolvency Proceeding.

(iv) In the event of a direct conflict between the priority provisions of
this Section 2.4 and other provisions contained in any other Loan Document, it is
the intention of the parties hereto that such priority provisions in such documents shall be
read together and construed, to the fullest extent possible, to be in concert with each
other. In the event of any actual, irreconcilable conflict that cannot be resolved as
aforesaid, the terms and provisions of this Section 2.4 shall control and govern.

2.5 Overadvances. If, at any time or for any reason, the amount of
Obligations (other than Bank Product Obligations) owed by Borrowers to the Lender Group pursuant to
Sections 2.1 and 2.12 is greater than either the Dollar or percentage limitations
set forth in Sections 2.1 or 2.12, (an “Overadvance”), Borrowers
immediately shall pay to Agent, in cash, the amount of such excess, which amount shall be used by
Agent to reduce the Obligations in accordance with the priorities set forth in Section
2.4(b). In addition, Borrowers hereby promise to pay the Obligations (including principal,
interest, fees, costs, and expenses) in Dollars in full as and when due and payable under the terms
of this Agreement and the other Loan Documents.

2.6 Interest Rates and Letter of Credit Fee: Rates, Payments, and
Calculations.

(a) Interest Rates. Except as provided in clause (c) below, all Obligations
(except for undrawn Letters of Credit) that have been charged to the Loan Account pursuant to the
terms hereof shall bear interest on the Daily Balance thereof as follows (i) if the relevant
Obligation is an Advance that is (x) a LIBOR Rate Loan, at a per annum rate equal to the relevant
LIBOR Rate plus the LIBOR Rate Revolver Margin or (y) a Base Rate Loan, at a per annum rate equal
to the relevant Base Rate plus the Base Rate Revolver Margin, (ii) if the relevant Obligation is a
portion of the Term Loan A and the Term Loan B that is (x) a LIBOR Rate Loan, at a per annum rate
equal to the relevant LIBOR Rate plus the LIBOR Rate Term A/B Margin or (y) a Base Rate Loan, at a
per annum rate equal to the Base Rate plus the Base Rate Term Loan A/B Margin, (iii) if the
relevant Obligation is a portion of the Term Loan C, at a per annum rate equal to the LIBOR Rate
existing on each Funding Date of such loan plus the LIBOR Rate Term Loan C Margin, and
(iv) otherwise, at a per annum rate equal to the Base Rate plus the Base Rate Revolver Margin.

(b) Letter of Credit Fee. Borrowers shall pay Agent (for the ratable
benefit of Lenders with a Revolver Commitment, subject to any letter agreement between Agent and
individual Lenders) a Letter of Credit fee (in addition to the charges, commissions, fees, and
costs set forth in Section 2.12(e)) which shall accrue at a rate equal to 1% per annum
times the Daily Balance of the undrawn amount of all outstanding Letters of Credit.

(c) Default Rate. Upon the occurrence and during the continuation of an
Event of Default,

(i) all Obligations (except for undrawn Letters of Credit and except
for Bank Product Obligations) that have been charged to the Loan Account pursuant to
the terms hereof shall bear interest on the Daily Balance thereof at a per annum
rate equal to 4 percentage points above the per annum rate otherwise applicable
hereunder, and

(ii) the Letter of Credit fee provided for above shall be increased
to 4 percentage points above the per annum rate otherwise applicable hereunder.

(d) Payment. Interest, Letter of Credit fees, and all other fees payable
hereunder shall be due and payable, in arrears, on the first day of each month at any time that any
Obligations or obligation to extend credit hereunder are outstanding. Borrowers hereby authorize
Agent, from time to time without prior notice to Borrowers, to charge such interest and fees, all
Lender Group Expenses (as and when incurred), the charges, commissions, fees, and costs provided
for in Section 2.12(e) (as and when accrued or incurred), the fees and costs provided for
in Section 2.11 (as and when accrued or incurred), and all other payments as and when due
and payable under any Loan Document (including the installments due and payable with respect to the
Term Loans and including any amounts due and payable to Wells Fargo or its Affiliates in respect of
Bank Products up to the amount of the then extant Bank Products Reserve) to Borrowers’ Loan
Account, which amounts thereafter shall constitute Advances hereunder and shall accrue interest at
the rate then applicable to Advances hereunder. Any interest not paid when due shall be compounded
by being charged to Borrowers’ Loan Account and shall thereafter constitute Advances hereunder and
shall accrue interest at the rate then applicable to Advances that are Base Rate Loans hereunder.

(e) Computation. All interest and fees chargeable under the Loan Documents
shall be computed on the basis of a 360 day year for the actual number of days elapsed. In the
event the Base Rate is changed from time to time hereafter, the rates of interest hereunder based
upon the Base Rate automatically and immediately shall be increased or decreased by an amount equal
to such change in the Base Rate.

(f) Intent to Limit Charges to Maximum Lawful Rate. In no event shall the
interest rate or rates payable under this Agreement, plus any other amounts paid in connection
herewith, exceed the highest rate permissible under any law that a court of competent jurisdiction
shall, in a final determination, deem applicable. Borrowers and the Lender Group, in executing and
delivering this Agreement, intend legally to agree upon the rate or rates of interest and manner of
payment stated within it; provided, however, that, anything contained herein to the
contrary notwithstanding, if said rate or rates of interest or manner of payment exceeds the
maximum allowable under applicable law, then, ipso facto, as of the date of this Agreement,
Borrowers are and shall be liable only for the payment of such maximum as allowed by law, and
payment received from Borrowers in excess of such legal maximum, whenever received, shall be
applied to reduce the principal balance of the Obligations to the extent of such excess.

2.7 Cash Management.

(a) Borrowers shall (i) establish and maintain cash management services of a type
and on terms satisfactory to Agent at one or more of the banks set forth on Schedule 2.7(a)
(each a “Cash Management Bank, and collectively, the “Cash Management Banks”), and
shall request in writing and otherwise take such reasonable steps to ensure that all of its Account
Debtors forward payment of the amounts owed by them directly to such Cash Management Bank, and (ii)
deposit or cause to be deposited promptly, and in any event no later than the first Business Day
after the date of receipt thereof, all Collections (including those sent directly by Account
Debtors to a Cash Management Bank) into a bank account in Agent’s name (a “Cash Management
Account”) at one of the Cash Management Banks.

(b) Each Cash Management Bank shall establish and maintain Cash Management
Agreements with Agent and Borrowers, in form and substance acceptable to Agent. Each such Cash
Management Agreement shall provide, among other things, that (i) all items of payment deposited in
such Cash Management Account and proceeds thereof are held by such Cash Management Bank as
bailee-in-possession for Agent, (ii) the Cash Management Bank has no rights of setoff or recoupment
or any other claim against the applicable Cash Management Account, other than for payment of its
service fees and other charges directly related to the administration of such Cash Management
Account and for returned checks or other items of payment, and (iii) it immediately will forward by
daily sweep all amounts in the applicable Cash Management Account to the Agent’s Account.

(c) So long as no Default or Event of Default has occurred and is continuing,
Administrative Borrower may amend Schedule 2.7(a) to add or replace a Cash Management
Account Bank or Cash Management Account; provided, however, that (i) such
prospective Cash Management Bank shall be satisfactory to Agent and Agent shall have consented in
writing in advance to the opening of such Cash Management Account with the prospective Cash
Management Bank, and (ii) prior to the time of the opening of such Cash Management Account,
Borrowers and such prospective Cash Management Bank shall have executed and delivered to Agent a
Cash Management Agreement. Borrowers shall close any of their Cash Management Accounts (and
establish replacement cash management accounts in accordance with the foregoing sentence) promptly
and in any event within 30 days of notice from Agent that the creditworthiness of any Cash
Management Bank is no longer acceptable in Agent’s Permitted Discretion, or as promptly as
practicable and in any event within 60 days of notice from Agent that the operating performance,
funds transfer, or availability procedures or performance of the Cash Management Bank with respect
to Cash Management Accounts or Agent’s liability under any Cash Management Agreement with such Cash
Management Bank is no longer acceptable in Agent’s Permitted Discretion.

(d) The Cash Management Accounts shall be cash collateral accounts, with all cash,
checks and similar items of payment in such accounts securing payment of the Obligations, and in
which Borrowers are hereby deemed to have granted a Lien to Agent.

2.8 Crediting Payments; Float Charge. The receipt of any payment item by
Agent (whether from transfers to Agent by the Cash Management Banks pursuant to the Cash Management
Agreements or otherwise) shall not be considered a payment on account unless such payment item is a
wire transfer of immediately available federal funds made to the Agent’s Account or unless and
until such payment item is honored when presented for payment. Should any payment item not be
honored when presented for payment, then Borrowers shall be deemed not to have made such payment
and interest shall be calculated accordingly. Anything to the contrary contained herein
notwithstanding, any payment item shall be deemed received by Agent only if it is received into the
Agent’s Account on a Business Day on or before 11:00 a.m. (California time). If any payment item
is received into the Agent’s Account on a non-Business Day or after 11:00 a.m. (California time) on
a Business Day, it shall be deemed to have been received by Agent as of the opening of business on
the immediately following Business Day. From and after the Closing Date, Agent shall be entitled
to charge Borrowers for 1 Business Day of ‘clearance’ or ‘float’ at the rate applicable to Base
Rate Loans under Section 2.6(a)(iv) on all Collections that are received by Borrowers
(regardless of whether forwarded by the Cash Management Banks to Agent), provided that no such
clearance or float charge shall be imposed on Collections received by a Borrower from another
Borrower to the extent such Collections have previously been deposited in a Cash Management
Account. This across-the-board 1 Business Day clearance or float charge on all Collections is
acknowledged by the parties to constitute an integral aspect of the pricing of the financing of
Borrowers and shall apply irrespective of whether or not there are any outstanding monetary
Obligations; the effect of such clearance or float charge being the equivalent of charging
1 Business Day of interest on such Collections.

2.9 Designated Account. Agent is authorized to make the Advances and the
Term Loans, and the Issuing Lender is authorized to issue Letters of Credit, under this Agreement
based upon telephonic or other instructions received from anyone purporting to be an Authorized
Person, or without instructions if pursuant to Section 2.6(d). Administrative Borrower
agrees to establish and maintain the Designated Account with the Designated Account Bank for the
purpose of receiving the proceeds of the Advances requested by Borrowers and made by Agent or the
Lenders hereunder. Unless otherwise agreed by Agent and Administrative Borrower, any Advance,
Agent Advance, or Swing Loan requested by Borrowers and made by Agent or the Lenders hereunder
shall be made to the Designated Account.

2.10 Maintenance of Loan Account; Statements of Obligations. Agent shall
maintain an account on its books in the name of Borrowers (the “Loan Account”) on which
Borrowers will be charged with the Term Loans, all Advances (including Agent Advances and Swing
Loans) made by Agent, Swing Lender, or the Lenders to Borrowers or for Borrowers’ account, the
Letters of Credit issued by Issuing Lender for Borrowers’ account, and with all other payment
Obligations hereunder or under the other Loan Documents (except for Bank Product Obligations),
including, accrued interest, fees and expenses, and Lender Group Expenses. In accordance with
Section 2.8, the Loan Account will be credited with all payments received by Agent from
Borrowers or for Borrowers’ account, including all amounts received in the Agent’s Account from any
Cash Management Bank. Agent shall render statements regarding the Loan Account to Administrative
Borrower, including principal, interest, fees, and including an itemization of all charges and
expenses constituting Lender Group Expenses, to the extent due and owing, and such statements shall
be conclusively presumed to be correct and accurate and constitute an account stated between
Borrowers and the Lender Group unless, within 30 days after receipt thereof by Administrative
Borrower, Administrative Borrower shall deliver to Agent written objection thereto describing the
error or errors contained in any such statements.

2.11 [Intentionally Omitted]

2.12 Letters of Credit.

(a) Subject to the terms and conditions of this Agreement, the Issuing Lender agrees
to issue letters of credit for the account of Borrowers (each, an “L/C”) or to purchase
participations or execute indemnities or reimbursement obligations (each such undertaking, an
"L/C Undertaking”) with respect to letters of credit issued by an Underlying Issuer (as of
the Closing Date, the prospective Underlying Issuer is to be Wells Fargo) for the account of
Borrowers. To request the issuance of an L/C or an L/C Undertaking (or the amendment, renewal, or
extension of an outstanding L/C or L/C Undertaking), Administrative Borrower shall hand deliver or
telecopy (or transmit by electronic communication, if arrangements for doing so have been approved
by Lender) to the Issuing Lender and Agent (reasonably in advance of the requested date of
issuance, amendment, renewal, or extension) a notice requesting the issuance of an L/C or L/C
Undertaking, or identifying the L/C or L/C Undertaking to be amended, renewed, or extended, the
date of issuance, amendment, renewal, or extension, the date on which such L/C or L/C Undertaking
is to expire, the amount of such L/C or L/C Undertaking, the name and address of the beneficiary
thereof (or of the Underlying Letter of Credit, as applicable), and such other information as shall
be necessary to prepare, amend, renew, or extend such L/C or L/C Undertaking. If requested by the
Issuing Lender, Borrowers also shall be an applicant under the application with respect to any
Underlying Letter of Credit that is to be the subject of an L/C Undertaking. The Issuing Lender
shall have no obligation to issue a Letter of Credit if any of the following would result after
giving effect to the requested Letter of Credit:

(i) the Letter of Credit Usage would exceed the Borrowing Base less
the amount of outstanding Advances, or

(ii) the Letter of Credit Usage would exceed $4,000,000, or

(iii) the Letter of Credit Usage would exceed the Maximum Revolver
Amount less the then extant amount of outstanding Advances.

Borrowers and the Lender Group acknowledge and agree that certain Underlying Letters of Credit may
be issued to support letters of credit that already are outstanding as of the Closing Date. Each
Letter of Credit (and corresponding Underlying Letter of Credit) shall have an expiry date no later
than 30 days prior to the Maturity Date and all such Letters of Credit (and corresponding
Underlying Letter of Credit) shall be in form and substance acceptable to Lender (in the exercise
of its Permitted Discretion), including the requirement that the amounts payable thereunder must be
payable in Dollars. If the Issuing Lender is obligated to advance funds under a Letter of Credit,
Borrowers immediately shall reimburse such L/C Disbursement to the Issuing Lender by paying to
Agent an amount equal to such L/C Disbursement not later than 11:00 a.m., California time, on the
date that such L/C Disbursement is made, if Administrative Borrower shall have received written or
telephonic notice of such L/C Disbursement prior to 10:00 a.m., California time, on such date, or,
if such notice has not been received by Administrative Borrower prior to such time on such date,
then not later than 11:00 a.m., California time, on (i) the Business Day that Administrative
Borrower receives such notice, if such notice is received prior to 10:00 a.m., California time, on
the date of receipt, and, in the absence of such reimbursement, the L/C Disbursement immediately
and automatically shall be deemed to be an Advance hereunder and, thereafter, shall bear interest
at the rate then applicable to Advances that are Base Rate Loans under Section 2.6. To the
extent an L/C Disbursement is deemed to be an Advance hereunder, Borrowers’ obligation to reimburse
such L/C Disbursement shall be discharged and replaced by the resulting Advance.

(b) Promptly following receipt of a notice of L/C Disbursement pursuant to
Section 2.12(a), each Lender with a Revolver Commitment agrees to fund its Pro Rata Share
of any Advance deemed made pursuant to the foregoing subsection on the same terms and conditions as
if Borrowers had requested such Advance and Agent shall promptly pay to Issuing Lender the amounts
so received by it from the Lenders. By the issuance of a Letter of Credit (or an amendment to a
Letter of Credit increasing the amount thereof) and without any further action on the part of the
Issuing Lender or the Lenders with Revolver Commitment, the Issuing Lender shall be deemed to have
granted to each Lender with a Revolver Commitment, and each Lender with a Revolver Commitment shall
be deemed to have purchased, a participation in each Letter of Credit, in an amount equal to its
Pro Rata Share of the Risk Participation Liability of such Letter of Credit, and each such Lender
agrees to pay to Agent, for the account of the Issuing Lender, such Lender’s Pro Rata Share of any
payments made by the Issuing Lender under such Letter of Credit. In consideration and in
furtherance of the foregoing, each Lender with a Revolver Commitment hereby absolutely and
unconditionally agrees to pay to Agent, for the account of the Issuing Lender, such Lender’s Pro
Rata Share of each L/C Disbursement made by the Issuing Lender and not reimbursed by Borrowers on
the date due as provided in clause (a) of this Section, or of any reimbursement payment required to
be refunded to Borrowers for any reason. Each Lender with a Revolver Commitment acknowledges and
agrees that its obligation to deliver to Agent, for the account of the Issuing Lender, an amount
equal to its respective Pro Rata Share of each L/C Disbursement made by the Issuing Lender pursuant
to this Section 2.12(c) shall be absolute and unconditional and such remittance shall be
made notwithstanding the occurrence or continuation of an Event of Default or Default or the
failure to satisfy any condition set forth in Section 3 hereof. If any such Lender fails
to make available to Agent the amount of such Lender’s Pro Rata Share of each L/C Disbursement made
by the Issuing Lender in respect of such Letter of Credit as provided in this Section, such Lender
shall be deemed to be a Defaulting Lender and Agent (for the account of the Issuing Lender) shall
be entitled to recover such amount on demand from such Lender together with interest thereon at the
Defaulting Lender Rate until paid in full.

(c) Each Borrower hereby agrees to indemnify, save, defend, and hold the Lender
Group harmless from any loss, cost, expense, or liability, and reasonable attorneys fees incurred
by the Lender Group arising out of or in connection with any Letter of Credit; provided,
however, that no Borrower shall be obligated hereunder to indemnify for any loss, cost,
expense, or liability that is caused by the gross negligence or willful misconduct of the Issuing
Lender or any other member of the Lender Group. Each Borrower agrees to be bound by the Underlying
Issuer’s regulations and interpretations of any Underlying Letter of Credit or by the Issuing
Lender’s interpretations of any L/C issued by the Issuing Lender to or for such Borrower’s account,
even though this interpretation may be different from such Borrower’s own, and each Borrower
understands and agrees that the Lender Group shall not be liable for any error, negligence, or
mistake, whether of omission or commission, in following Borrowers’ instructions or those contained
in the Letter of Credit or any modifications, amendments, or supplements thereto. Each Borrower
understands that the L/C Undertakings may require the Issuing Lender to indemnify the Underlying
Issuer for certain costs or liabilities arising out of claims by Borrowers against such Underlying
Issuer. Each Borrower hereby agrees to indemnify, save, defend, and hold the Lender Group harmless
with respect to any loss, cost, expense (including reasonable attorneys fees), or liability
incurred by the Lender Group under any L/C Undertaking as a result of the Lender Group’s
indemnification of any Underlying Issuer; provided, however, that no Borrower shall
be obligated hereunder to indemnify for any loss, cost, expense, or liability that is caused by the
gross negligence or willful misconduct of the Issuing Lender or any member of the Lender Group.

(d) Each Borrower hereby authorizes and directs any Underlying Issuer to deliver to
the Issuing Lender all instruments, documents, and other writings and property received by such
Underlying Issuer pursuant to such Underlying Letter of Credit and to accept and rely upon Lender’s
instructions with respect to all matters arising in connection with such Underlying Letter of
Credit and the related application.

(e) Any and all charges, commissions, fees, and costs incurred by the Issuing Lender
relating to Underlying Letters of Credit shall be Lender Group Expenses for purposes of this
Agreement and immediately shall be reimbursable by Borrowers to Agent for the account of the
Issuing Lender; it being acknowledged and agreed by each Borrower that, as of the Closing Date, the
issuance charge imposed by the prospective Underlying Issuer is .825% per annum times the face
amount of each Underlying Letter of Credit, that such issuance charge may be changed from time to
time, and that the Underlying Issuer also imposes a Schedule of charges for amendments, extensions,
drawings, and renewals.

(f) If by reason of (i) any change in any applicable law, treaty, rule, or
regulation or any change in the interpretation or application thereof by any Governmental
Authority, or (ii) compliance by the Underlying Issuer or the Lender Group with any direction,
request, or requirement (irrespective of whether having the force of law) of any Governmental
Authority or monetary authority including, Regulation D of the Federal Reserve Board as from time
to time in effect (and any successor thereto):

(i) any reserve, deposit, or similar requirement is or shall be
imposed or modified in respect of any Letter of Credit issued hereunder, or

(ii) there shall be imposed on the Underlying Issuer or the Lender
Group any other condition regarding any Underlying Letter of Credit or any Letter of
Credit issued pursuant hereto;

and the result of the foregoing is to increase, directly or indirectly, the cost to the Lender
Group of issuing, making, guaranteeing, or maintaining any Letter of Credit or to reduce the amount
receivable in respect thereof by the Lender Group, then, and in any such case, Agent may, at any
time within a reasonable period after the additional cost is incurred or the amount received is
reduced, notify Administrative Borrower, and Borrowers shall pay on demand such amounts as Agent
may specify to be necessary to compensate the Lender Group for such additional cost or reduced
receipt, together with interest on such amount from the date of such demand until payment in full
thereof at the rate then applicable to Base Rate Loans hereunder. The determination by Agent of
any amount due pursuant to this Section, as set forth in a certificate setting forth the
calculation thereof in reasonable detail, shall, in the absence of manifest or demonstrable error,
be final and conclusive and binding on all of the parties hereto.

(g) Schedule 2.12(g) hereto contains a list of all letters of credit
outstanding on the Closing Date pursuant to the Existing Loan Agreement. For the period from and
after the Closing Date, each such letter of credit, including any extension or renewal thereof
(each, as amended from time to time in accordance with the terms thereof and hereof, an
"Existing Letters of Credit”) shall constitute a “Letter of Credit” issued for the account
of Borrowers, for all purposes of this Agreement, including, without limitation, calculations of
Availability, the Borrowing Base, Letter of Credit fees, and Letter of Credit Usage.

2.13 LIBOR Option.

(a) Interest and Interest Payment Dates. In lieu of having interest charged
at the rate based upon the Base Rate, Borrowers shall have the option (the “LIBOR Option”)
to have interest on all or a portion of the Advances and the Term Loans be charged at the LIBOR
Rate. Interest on LIBOR Rate Loans shall be payable on the earliest of (i) the last day of the
Interest Period applicable thereto, (ii) the occurrence of an Event of Default in consequence of
which Agent on behalf of Lender has elected to accelerate the maturity of the Obligations, or
(iii) termination of this Agreement pursuant to the terms hereof. On the last day of each
applicable Interest Period, unless Administrative Borrower properly has exercised the LIBOR Option
with respect thereto, the interest rate applicable to such LIBOR Rate Loan (except with respect to
Term Loan C, which shall bear interest at the applicable LIBOR Rate plus the LIBOR Rate Term Loan C
Margin pursuant to Section 2.6(a)) automatically shall convert to the rate of interest then
applicable to Base Rate Loans of the same type hereunder. At any time that an Event of Default has
occurred and is continuing, Borrowers no longer shall have the option to request that Advances or
any Term Loan bear interest at the LIBOR Rate (except with respect to Term Loan C, which shall bear
interest at the applicable LIBOR Rate plus the LIBOR Rate Term Loan C Margin pursuant to Section
2.6(a)) and Agent shall have the right to convert the interest rate on all outstanding LIBOR Rate
Loans (except with respect to Term Loan C, which shall bear interest at the applicable LIBOR Rate
plus the LIBOR Rate Term Loan C Margin pursuant to Section 2.6(a)) to the rate then applicable to
Base Rate Loans hereunder.

(b) LIBOR Election.

(i) Administrative Borrower may, at any time and from time to time,
so long as no Event of Default has occurred and is continuing, elect to exercise the
LIBOR Option by notifying Agent prior to 11:00 a.m. (California time) at least 3
Business Days prior to the commencement of the proposed Interest Period (the
“LIBOR Deadline”). Notice of Administrative Borrower’s election of the
LIBOR Option for a permitted portion of the Advances or the Term Loan A and an
Interest Period pursuant to this Section shall be made by delivery to Agent of a
LIBOR Notice received by Agent before the LIBOR Deadline, or by telephonic notice
received by Agent before the LIBOR Deadline (to be confirmed by delivery to Agent of
a LIBOR Notice received by Agent prior to 5:00 p.m. (California time) on the same
day).

(ii) Each LIBOR Notice shall be irrevocable and binding on Borrowers.
In connection with each LIBOR Rate Loan, each Borrower shall indemnify, defend, and
hold Agent and the Lenders harmless against any loss, cost, or expense incurred by
Agent or any Lender as a result of (a) the payment of any principal of any LIBOR
Rate Loan other than on the last day of an Interest Period applicable thereto
(including as a result of an Event of Default), (b) the conversion of any LIBOR Rate
Loan other than on the last day of the Interest Period applicable thereto, or (c)
the failure to borrow, convert, continue or prepay any LIBOR Rate Loan on the date
specified in any LIBOR Notice delivered pursuant hereto (such losses, costs, and
expenses, collectively, “Funding Losses”). Funding Losses shall, with
respect to Agent or any Lender, be deemed to equal the amount determined by Agent or
such Lender to be the excess, if any, of (i) the amount of interest that would have
accrued on the principal amount of such LIBOR Rate Loan had such event not occurred,
at the LIBOR Rate that would have been applicable thereto, for the period from the
date of such event to the last day of the then current Interest Period therefor (or,
in the case of a failure to borrow, convert or continue, for the period that would
have been the Interest Period therefor), minus (ii) the amount of interest that
would accrue on such principal amount for such period at the interest rate which
Agent or such Lender would be offered were it to be offered, at the commencement of
such period, Dollar deposits of a comparable amount and period in the London
interbank market. A certificate of Agent or a Lender delivered to Administrative
Borrower setting forth any amount or amounts that Agent or such Lender is entitled
to receive pursuant to this Section shall be conclusive absent manifest error.

(iii) Borrowers shall have not more than 5 LIBOR Rate Loans in effect
at any given time. Borrowers only may exercise the LIBOR Option for LIBOR Rate
Loans of at least $1,000,000 and integral multiples of $500,000 in excess thereof.

(c) Prepayments. Borrowers may prepay LIBOR Rate Loans at any time;
provided, however, that in the event that LIBOR Rate Loans are prepaid on any date
that is not the last day of the Interest Period applicable thereto, including as a result of any
automatic prepayment through the required application by Agent of proceeds of Collections in
accordance with Section 2.4(b) or for any other reason, including early termination of the
term of this Agreement or acceleration of the Obligations pursuant to the terms hereof, each
Borrower shall indemnify, defend, and hold Agent and the Lenders and their Participants harmless
against any and all Funding Losses in accordance with clause (b) above.

(d) Special Provisions Applicable to LIBOR Rate.

(i) Except with respect to Term Loan C, the LIBOR Rate may be
adjusted by Agent with respect to any Lender on a prospective basis to take into
account any additional or increased costs to such Lender of maintaining or obtaining
any eurodollar deposits or increased costs due to changes in applicable law
occurring subsequent to the commencement of the then applicable Interest Period,
including changes in tax laws (except changes of general applicability in corporate
income tax laws) and changes in the reserve requirements imposed by the Board of
Governors of the Federal Reserve System (or any successor), excluding the Reserve
Percentage, which additional or increased costs would increase the cost of funding
loans bearing interest at the LIBOR Rate. In any such event, the affected Lender
shall give Administrative Borrower and Agent notice of such a determination and
adjustment and, upon its receipt of the notice from the affected Lender,
Administrative Borrower may, by notice to such affected Lender (y) require such
Lender to furnish to Administrative Borrower a statement setting forth the basis for
adjusting such LIBOR Rate, the method for determining the amount of such adjustment
and the calculation thereof, all in reasonable detail, or (z) repay the LIBOR Rate
Loans with respect to which such adjustment is made (together with any amounts due
under clause (b)(ii) above).

(ii) In the event that any change in market conditions or any law,
regulation, treaty, or directive, or any change therein or in the interpretation of
application thereof, shall at any time after the date hereof, in the reasonable
opinion of any Lender, make it unlawful or impractical for such Lender to fund or
maintain LIBOR Advances or to continue such funding or maintaining, or to determine
or charge interest rates at the LIBOR Rate, such Lender shall give notice of such
changed circumstances to Agent and Administrative Borrower and (y) in the case of
any LIBOR Rate Loans that are outstanding, the date specified in such Lender’s
notice shall be deemed to be the last day of the Interest Period of such LIBOR Rate
Loans, and interest upon the LIBOR Rate Loans of such Lender thereafter shall accrue
interest at the rate then applicable to Base Rate Loans, and (z) Borrowers shall not
be entitled to elect the LIBOR Option until such Lender determines that it would no
longer be unlawful or impractical to do so.

(e) No Requirement of Matched Funding. Anything to the contrary contained
herein notwithstanding, neither Agent, nor any Lender, nor any of their Participants, is required
actually to acquire eurodollar deposits to fund or otherwise match fund any Obligation as to which
interest accrues at the LIBOR Rate. The provisions of this Section shall apply as if each Lender
or its Participants had match funded any Obligation as to which interest is accruing at the LIBOR
Rate by acquiring eurodollar deposits for each Interest Period in the amount of the LIBOR Rate
Loans.

2.14 Capital Requirements. If, after the date hereof, any Lender determines
that (i) the adoption of or change in any law, rule, regulation or guideline of any Governmental
Authority regarding capital requirements for banks or bank holding companies, or any change in the
interpretation or application thereof by any Governmental Authority charged with the administration
thereof, or (ii) compliance by such Lender or its parent bank holding company with any guideline,
request or directive of any Governmental Authority regarding capital adequacy (whether or not
having the force of law), the effect of reducing the return on such Lender’s or such holding
company’s capital as a consequence of such Lender’s obligations hereunder to a level below that
such which Lender or such holding company could have achieved but for such adoption, change, or
compliance (taking into consideration such Lender’s or such holding company’s then existing
policies with respect to capital adequacy and assuming the full utilization of such entity’s
capital) by any amount deemed by such Lender to be material, then such Lender may notify
Administrative Borrower and Agent thereof. Following receipt of such notice, Borrowers agree to
pay such Lender the amount of such reduction of return of capital as and when such reduction is
determined, payable within 90 days after presentation by such Lender of a statement in the amount
and setting forth in reasonable detail such Lender’s calculation thereof and the assumptions upon
which such calculation was based (which statement shall be deemed true and correct absent manifest
error). In determining such amount, such Lender may use any reasonable averaging and attribution
methods.

2.15 Joint and Several Liability of Borrowers.

(a) Each of Borrowers is accepting joint and several liability hereunder and under
the other Loan Documents in consideration of the financial accommodations to be provided by the
Lender Group under this Agreement, for the mutual benefit, directly and indirectly, of each of
Borrowers and in consideration of the undertakings of the other Borrowers to accept joint and
several liability for the Obligations.

(b) Each of Borrowers, jointly and severally, hereby irrevocably and unconditionally
accepts, not merely as a surety but also as a co-debtor, joint and several liability with the other
Borrowers, with respect to the payment and performance of all of the Obligations (including,
without limitation, any Obligations arising under this Section 2.15), it being the
intention of the parties hereto that all the Obligations shall be the joint and several obligations
of each Person composing Borrowers without preferences or distinction among them.

(c) If and to the extent that any of Borrowers shall fail to make any payment with
respect to any of the Obligations as and when due or to perform any of the Obligations in
accordance with the terms thereof, then in each such event the other Persons composing Borrowers
will make such payment with respect to, or perform, such Obligation.

(d) The Obligations of each Person composing Borrowers under the provisions of this
Section 2.15 constitute the absolute and unconditional, full recourse Obligations of each
Person composing Borrowers enforceable against each such Borrower to the full extent of its
properties and assets, irrespective of the validity, regularity or enforceability of this Agreement
or any other circumstances whatsoever.

(e) Except as otherwise expressly provided in this Agreement, each Person composing
Borrowers hereby waives notice of acceptance of its joint and several liability, notice of any
Advances or Letters of Credit issued under or pursuant to this Agreement, notice of the occurrence
of any Default, Event of Default, or of any demand for any payment under this Agreement, notice of
any action at any time taken or omitted by Agent or Lenders under or in respect of any of the
Obligations, any requirement of diligence or to mitigate damages and, generally, to the extent
permitted by applicable law, all demands, notices and other formalities of every kind in connection
with this Agreement (except as otherwise provided in this Agreement). Each Person composing
Borrowers hereby assents to, and waives notice of, any extension or postponement of the time for
the payment of any of the Obligations, the acceptance of any payment of any of the Obligations, the
acceptance of any partial payment thereon, any waiver, consent or other action or acquiescence by
Agent or Lenders at any time or times in respect of any default by any Person composing Borrowers
in the performance or satisfaction of any term, covenant, condition or provision of this Agreement,
any and all other indulgences whatsoever by Agent or Lenders in respect of any of the Obligations,
and the taking, addition, substitution or release, in whole or in part, at any time or times, of
any security for any of the Obligations or the addition, substitution or release, in whole or in
part, of any Person composing Borrowers. Without limiting the generality of the foregoing, each of
Borrowers assents to any other action or delay in acting or failure to act on the part of Agent or
any Lender with respect to the failure by any Person composing Borrowers to comply with any of its
respective Obligations, including, without limitation, any failure strictly or diligently to assert
any right or to pursue any remedy or to comply fully with applicable laws or regulations
thereunder, which might, but for the provisions of this Section 2.15 afford grounds for
terminating, discharging or relieving any Person composing Borrowers, in whole or in part, from any
of its Obligations under this Section 2.15, it being the intention of each Person composing
Borrowers that, so long as any of the Obligations hereunder remain unsatisfied, the Obligations of
such Person composing Borrowers under this Section 2.15 shall not be discharged except by
performance and then only to the extent of such performance. The Obligations of each Person
composing Borrowers under this Section 2.15 shall not be diminished or rendered
unenforceable by any winding up, reorganization, arrangement, liquidation, reconstruction or
similar proceeding with respect to any Person composing Borrowers, Agent or any Lender. The joint
and several liability of the Persons composing Borrowers hereunder shall continue in full force and
effect notwithstanding any absorption, merger, amalgamation or any other change whatsoever in the
name, constitution or place of formation of any of the Persons composing Borrowers, Agent or any
Lender.

(f) Each Person composing Borrowers represents and warrants to Agent and the Lenders
that such Borrower is currently informed of the financial condition of Borrowers and of all other
circumstances which a diligent inquiry would reveal and which bear upon the risk of nonpayment of
the Obligations. Each Person composing Borrowers further represents and warrants to Agent and the
Lenders that such Borrower has read and understands the terms and conditions of the Loan Documents.
Each Person composing Borrowers hereby covenants that such Borrower will continue to keep informed
of Borrowers’ financial condition, the financial condition of other guarantors, if any, and of all
other circumstances which bear upon the risk of nonpayment or nonperformance of the Obligations.

(g) Each of the Persons composing Borrowers waives all rights and defenses that such
Borrower may have because the Obligations are secured by Real Property. This means, among other
things:

(i) Agent and the Lenders may collect from such Borrower without
first foreclosing on any Real or Personal Property Collateral pledged by Borrowers.

(ii) If Agent or any Lender forecloses on any Real Property
Collateral pledged by Borrowers:

A. The amount of the Obligations may be reduced only by the price for which that
Collateral is sold at the foreclosure sale, even if the Collateral is worth more than the sale
price.

B. Agent and the Lenders may collect from such Borrower even if Agent or any Lender,
by foreclosing on the Real Property Collateral, has destroyed any right such Borrower may have to
collect from the other Borrowers.

This is an unconditional and irrevocable waiver of any rights and defenses such Borrower may have
because the Obligations are secured by Real Property.

(h) The provisions of this Section 2.15 are made for the benefit of Agent,
the Lenders and their respective successors and assigns, and may be enforced by it or them from
time to time against any or all of the Persons composing Borrowers as often as occasion therefor
may arise and without requirement on the part of any such Agent, Lender, any successor, or any
assign first to marshal any of its or their claims or to exercise any of its or their rights
against any of the other Persons composing Borrowers or to exhaust any remedies available to it or
them against any of the other Persons composing Borrowers or to resort to any other source or means
of obtaining payment of any of the Obligations hereunder or to elect any other remedy. The
provisions of this Section 2.15 shall remain in effect until all of the Obligations shall
have been paid in full or otherwise fully satisfied. If at any time, any payment, or any part
thereof, made in respect of any of the Obligations, is rescinded or must otherwise be restored or
returned by Agent or any Lender upon the insolvency, bankruptcy or reorganization of any of the
Persons composing Borrowers, or otherwise, the provisions of this Section 2.15 will
forthwith be reinstated in effect, as though such payment had not been made.

(i) Each of the Persons composing Borrowers hereby agrees that it will not enforce
any of its rights of contribution or subrogation against the other Persons composing Borrowers with
respect to any liability incurred by it hereunder or under any of the other Loan Documents, any
payments made by it to Agent or the Lenders with respect to any of the Obligations or any
collateral security therefor until such time as all of the Obligations have been paid in full in
cash. Any claim which any Borrower may have against any other Borrower with respect to any
payments to Agent or any Lender hereunder or under any other Loan Documents are hereby expressly
made subordinate and junior in right of payment, without limitation as to any increases in the
Obligations arising hereunder or thereunder, to the prior payment in full in cash of the
Obligations and, in the event of any insolvency, bankruptcy, receivership, liquidation,
reorganization or other similar proceeding under the laws of any jurisdiction relating to any
Borrower, its debts or its assets, whether voluntary or involuntary, all such Obligations shall be
paid in full in cash before any payment or distribution of any character, whether in cash,
securities or other property, shall be made to any other Borrower therefor.

(j) Each of the Persons composing Borrowers hereby agrees that, after the occurrence
and during the continuance of any Default or Event of Default, the payment of any amounts due with
respect to the indebtedness owing by any Borrower to any other Borrower is hereby subordinated to
the prior payment in full in cash of the Obligations. Each Borrower hereby agrees that after the
occurrence and during the continuance of any Default or Event of Default, such Borrower will not
demand, sue for or otherwise attempt to collect any indebtedness of any other Borrower owing to
such Borrower until the Obligations shall have been paid in full in cash. If, notwithstanding the
foregoing sentence, such Borrower shall collect, enforce or receive any amounts in respect of such
indebtedness, such amounts shall be collected, enforced and received by such Borrower as trustee
for Agent, and such Borrower shall deliver any such amounts to Agent for application to the
Obligations in accordance with Section 2.4(b).

3. CONDITIONS; TERM OF AGREEMENT.

3.1 Conditions Precedent to the Initial Extension of Credit. The obligation
of Lender Group (or any member thereof) to make any Advance or Term Loans (or otherwise to extend
any credit provided for hereunder) on the Closing Date, is subject to the fulfillment, to the
satisfaction of Agent and Lender, of each of the conditions precedent set forth below:

(a) the Closing Date shall occur on or before July 3, 2007;

(b) Agent shall have received satisfactory evidence of the filing of all financing
statements in such office or offices as may be necessary, or, in the opinion of Agent desirable to
perfect the security interests purported to be created by each applicable Loan Document;

(c) Agent shall have received each of the following documents, in form and substance
satisfactory to Agent, duly executed, and each such document shall be in full force and effect:

(i) the Ableco Intercreditor Agreement and the Ableco Loan Agreement,

(ii) the Fee Letter,

(iii) a pledge amendment with respect to the shares of capital stock
of each New Loan Party,

(iv) post-closing undertaking letter agreement, and

(v) the Officers’ Certificate.

(d) Agent shall have received a certificate from the Secretary or Assistant
Secretary of each Borrower attesting to the resolutions of such Borrower’s Board of Directors
authorizing its execution, delivery, and performance of this Agreement and the other Loan Documents
to which such Borrower is a party and authorizing specific officers of such Borrower to execute the
same;

(e) Agent shall have received (i) copies of each Borrower’s Governing Documents, as
amended, modified, or supplemented to the Closing Date, certified by the Secretary or Assistant
Secretary of such Borrower or (ii) a certificate of the Secretary of such Borrower certifying that
there has been no change to the Governing Documents that were delivered to the Existing Lenders on
the Original Closing Date;

(f) Agent shall have received a certificate of status with respect to each Borrower,
dated within 10 days of the Closing Date, such certificate to be issued by the appropriate officer
of the jurisdiction of organization of such Borrower, which certificate shall indicate that such
Borrower is in good standing in such jurisdiction;

(g) Agent shall have received certificates of status with respect to each Borrower,
each dated within 30 days of the Closing Date, such certificates to be issued by the appropriate
officer of the jurisdictions (other than the jurisdiction of organization of such Borrower) in
which its failure to be duly qualified or licensed would constitute a Material Adverse Change,
which certificates shall indicate that such Borrower is in good standing in such jurisdictions;

(h) Agent shall have received a certificate of insurance, together with the
endorsements thereto, as are required by Section 6.8, the form and substance of which shall
be satisfactory to Agent;

(i) Agent shall have received an opinion of Lowenstein Sandler, PC, counsel to the
Loan Parties, and of local counsel to the Loan Parties in such jurisdictions as Agent may
reasonably request, each in form and substance reasonably satisfactory to Agent;

(j) Agent shall have received satisfactory evidence (including a certificate of the
an executive officer of Parent) that all tax returns required to be filed by Borrowers have been
timely filed and all taxes upon Borrowers or their properties, assets, income, and franchises
(including Real Property taxes and payroll taxes) have been paid prior to delinquency, except such
taxes that are the subject of a Permitted Protest;

(k) Borrowers shall have the Required Availability after giving effect to the
initial extensions of credit hereunder;

(l) Agent shall have received (i) Borrowers’ Closing Date Business Plan (except that
the Projections for the three (3) year period following the Closing Date may be delivered within
thirty (30) days of the Closing Date), and (ii) a draft of the Parent’s consolidated audited
financial statements for the fiscal year ended December 31, 2006, the results of which shall be
satisfactory to Lender in its sole discretion;

(m) Borrowers shall pay all Lender Group Expenses incurred in connection with the
transactions evidenced by this Agreement;

(n) Agent shall have received copies of each Material Contract, together with a
certificate of the Secretary or Assistant Secretary of the applicable Borrower certifying each such
document as being a true, correct, and complete copy thereof;

(o) Borrowers shall have received all licenses, approvals or evidence of other
actions required by any Governmental Authority in connection with the execution and delivery by
Borrowers of this Agreement or any other Loan Document or with the consummation of the transactions
contemplated hereby and thereby;

(p) Annaco Acquisition shall have been consummated on terms satisfactory to Agent.
Agent shall be satisfied that each of the Acquisition Documents is in full force and effect, (ii)
the Acquisitions, including all of the terms and conditions thereof, shall have been duly
authorized and all Acquisition Documents shall have been duly executed and delivered by the parties
thereto and shall be in full force and effect, and (iii) each of the conditions precedent to the
consummation of the Annaco Acquisition as set forth in the Annaco Acquisition Documents shall have
been satisfied or waived with the consent of Agent and the Annaco Acquisition shall have been
consummated in accordance with any applicable law and the Annaco Acquisition Documents.

(q) Agent shall have received evidence satisfactory to Agent that Parent has
received gross proceeds from the Ableco Loans of at least $32,000,000 on the Closing Date; and

(r) all other documents and legal matters in connection with the transactions
contemplated by this Agreement shall have been delivered, executed, or recorded and shall be in
form and substance satisfactory to Agent.

3.2 Conditions Precedent to all Extensions of Credit. The obligation of the
Lender Group (or any members thereof) to make all Advances (or to extend any other credit
hereunder) shall be subject to the following conditions precedent:

(a) the representations and warranties contained in this Agreement and the other
Loan Documents shall be true and correct in all material respects on and as of the date of such
extension of credit, as though made on and as of such date (except to the extent that such
representations and warranties relate solely to an earlier date, in which case such representation
and warranty shall be true and correct on and as of such earlier date);

(b) no Default or Event of Default shall have occurred and be continuing on the date
of such extension of credit, nor shall either result from the making thereof; and

(c) no injunction, writ, restraining order, or other order of any nature
prohibiting, directly or indirectly, the extending of such credit shall have been issued and remain
in force by any Governmental Authority against any Borrower, Agent, any Lender, or any of their
Affiliates.

3.3 Term. This Agreement shall become effective upon the execution and
delivery hereof by Borrowers, Agent and the Lenders and shall continue in full force and effect for
a term ending on May 31, 2013 (the “Maturity Date”). The foregoing notwithstanding, the Lender
Group shall have the right to terminate its obligations under this Agreement immediately and
without notice upon the occurrence and during the continuation of an Event of Default.

3.4 Effect of Termination. On the date of termination of this Agreement,
all Obligations (including contingent reimbursement obligations of Borrowers with respect to
outstanding Letters of Credit and including all Bank Products Obligations) immediately shall become
due and payable without notice or demand (including (a) either (i) providing cash collateral to be
held by Agent for the benefit of those Lenders with a Revolver Commitment in an amount equal to
105% of the then extant Letter of Credit Usage, or (ii) causing the original Letters of Credit to
be returned to the Issuing Lender, and (b) providing cash collateral to be held by Agent for the
benefit of Bank Product Provider with respect to the then extant Bank Products Obligations). No
termination of this Agreement, however, shall relieve or discharge Borrowers of their duties,
Obligations, or covenants hereunder and the Agent’s Liens in the Collateral shall remain in effect
until all Obligations have been fully and finally discharged and the Lender Group’s Obligations to
provide additional credit hereunder have been terminated. When this Agreement has been terminated
and all of the Obligations have been fully and finally discharged and Lender Group’s Obligations to
provide additional credit under the Loan Documents have been terminated irrevocably, Agent will, at
Borrowers’ sole expense, execute and deliver any UCC termination statements, lien releases,
mortgage releases, re-assignments of trademarks, discharges of security interests, and other
similar discharge or release documents (and, if applicable, in recordable form) as are reasonably
necessary to release, as of record, the Agent’s Liens and all notices of security interests and
liens previously filed by Agent with respect to the Obligations.

3.5 Early Termination by Borrowers. Borrowers have the option, at any time
upon 60 days prior written notice by Administrative Borrower to Agent, to terminate this Agreement
by paying to Agent, in cash, the Obligations (including (a) either (i) providing cash collateral to
be held by Agent for the benefit of the Lenders with a Revolver Commitment in an amount equal to
105% of the then extant Letter of Credit Usage, or (ii) causing the original Letters of Credit to
be returned to Lender, and (b) providing cash collateral to be held by Agent for the benefit of
Bank Product Provider with respect to the then extant Bank Products Obligations), in full, together
with the Applicable Prepayment Premium. If Administrative Borrower has sent a notice of
termination pursuant to the provisions of this Section, then the Lender Group’s obligations to
extend credit hereunder shall terminate and Borrowers shall be obligated to repay the Obligations
(including (a) either (i) providing cash collateral to be held by Agent for the benefit of those
Lenders with a Revolver Commitment in an amount equal to 105% of the then extant Letter of Credit
Usage, or (ii) causing the original Letters of Credit to be returned to the Issuing Lender, and (b)
providing cash collateral to be held by Agent for the benefit of Bank Product Provider with respect
to the then extant Bank Products Obligations), in full, together with the Applicable Prepayment
Premium, on the date set forth as the date of termination of this Agreement in such notice;
provided that, notwithstanding anything contained in this sentence, Borrowers shall
not be required to pay the Applicable Prepayment Premium if and only if the termination of this
Agreement and the prepayment of the then outstanding Obligations occurs in connection with the
consummation of a transaction described in clauses (i) through (iv) of the proviso to the
definition of Premium Amount. Subject to the immediately preceding sentence, in the event of the
termination of this Agreement and repayment of the Obligations at any time prior to the Maturity
Date, for any other reason, including (a) termination upon the election of Agent to terminate after
the occurrence of an Event of Default, (b) foreclosure and sale of Collateral, (c) sale of the
Collateral in any Insolvency Proceeding, or (d) restructure, reorganization or compromise of the
Obligations by the confirmation of a plan of reorganization or any other plan of compromise,
restructure, or arrangement in any Insolvency Proceeding, then, in view of the impracticability and
extreme difficulty of ascertaining the actual amount of damages to the Lender Group or profits lost
by the Lender Group as a result of such early termination, and by mutual agreement of the parties
as to a reasonable estimation and calculation of the lost profits or damages of the Lender Group,
Borrowers shall pay the Applicable Prepayment Premium to Agent for the benefit of the Lenders
measured as of the date of such termination.

4. CREATION OF SECURITY INTEREST.

4.1 Grant of Security Interest.

(a) Each Borrower hereby grants to Agent, for the benefit of the Lender Group a
continuing security interest in all of its right, title, and interest in all currently existing and
hereafter acquired or arising Personal Property Collateral in order to secure prompt repayment of
any and all of the Obligations in accordance with the terms and conditions of the Loan Documents
and in order to secure prompt performance by Borrowers of each of their covenants and duties under
the Loan Documents. The Agent’s Liens in and to the Personal Property Collateral shall attach to
all Personal Property Collateral without further act on the part of Agent or Borrowers. Anything
contained in this Agreement or any other Loan Document to the contrary notwithstanding, except for
Permitted Dispositions, Borrowers have no authority, express or implied, to dispose of any item or
portion of the Collateral.

(b) Each Loan Party hereby confirms, ratifies and reaffirms that the Liens granted
to pursuant to the Existing Loan Agreement in all of its right, title, and interest in all then
existing and thereafter acquired or arising Collateral (as such term is defined in the Existing
Loan Agreement) in order to secure prompt repayment of any and all of the Obligations (as such
terms are defined in the Existing Loan Agreement) in accordance with the terms and conditions of
the Loan Documents (as such term is defined in the Existing Loan Agreement) and in order to secure
prompt performance by Loan Parties of each of their covenants and duties under the Loan Documents
(as such term is defined in the Existing Loan Agreement) are continuing and are and shall remain
unimpaired and continue to constitute fully perfected, first priority Liens in favor of Agent, for
the benefit of the Lender Group and the Bank Product Provider, with the same force, effect and
priority in effect both immediately prior to and after entering into this Agreement and the other
Loan Documents entered into on or as of the Closing Date. Each Loan Party hereby confirms and
agrees that such Liens attach to all currently existing and hereafter acquired or arising
Collateral in order to secure the prompt repayment of any and all of the Obligations in accordance
with the terms and conditions of the Loan Documents (as defined herein) and in order to secure the
prompt performance by the Loan Parties of each of their covenants and duties under the Loan
Documents. The Agent’s Liens in and to the Loan Parties’ Collateral have attached and continue to
attach to all such Collateral without further act on the part of Agent or Loan Parties. Anything
contained in this Agreement or any other Loan Document to the contrary notwithstanding, except for
Permitted Dispositions, the Loan Parties have no authority, express or implied, to dispose of any
item or portion of the Collateral.

4.2 Negotiable Collateral. In the event that any Collateral, including
proceeds, is evidenced by or consists of Negotiable Collateral, and if and to the extent that
perfection of priority of Agent’s security interest is dependent on or enhanced by possession, the
applicable Borrower, immediately upon the request of Agent, shall endorse and deliver physical
possession of such Negotiable Collateral to Agent.

4.3 Collection of Accounts, General Intangibles, and Negotiable Collateral.
At any time after the occurrence and during the continuation of an Event of Default, Agent or
Agent’s designee may (a) notify Account Debtors of Borrowers that the Accounts, chattel paper, or
General Intangibles have been assigned to Agent or that Agent has a security interest therein, or
(b) collect the Accounts, chattel paper, or General Intangibles directly and charge the collection
costs and expenses to the Loan Account. Each Borrower agrees that it will hold in trust for the
Lender Group, as the Lender Group’s trustee, any Collections that it receives and immediately will
deliver said Collections to Agent or a Cash Management Bank in their original form as received by
the applicable Borrower.

4.4 Delivery of Additional Documentation Required. At any time upon the
request of Agent, Borrowers shall execute and deliver to Agent, any and all financing statements,
original financing statements in lieu of continuation statements, fixture filings, security
agreements, pledges, assignments, endorsements of certificates of title, and all other documents
(the “Additional Documents”) that Agent may request in its Permitted Discretion, in form and
substance reasonably satisfactory to Agent, to perfect and continue perfected or better perfect the
Agent’s Liens in the Collateral (whether now owned or hereafter arising or acquired), to create and
perfect Liens in favor of Agent in any Real Property acquired after the Closing Date, and in order
to fully consummate all of the transactions contemplated hereby and under the other Loan Documents.
To the maximum extent permitted by applicable law, each Borrower authorizes Agent to execute any
such Additional Documents in the applicable Borrower’s name and authorize Agent to file such
executed Additional Documents in any appropriate filing office. In addition, on such periodic
basis as Agent shall require, Borrowers shall (a) provide Agent with a report of all new
patentable, copyrightable, or trademarkable materials acquired or generated by Borrowers during the
prior period, (b) cause all patents, copyrights, and trademarks acquired or generated by Borrowers
that are not already the subject of a registration with the appropriate filing office (or an
application therefor diligently prosecuted) to be registered with such appropriate filing office in
a manner sufficient to impart constructive notice of Borrowers’ ownership thereof, and (c) cause to
be prepared, executed, and delivered to Agent supplemental Schedules to the applicable Loan
Documents to identify such patents, copyrights, and trademarks as being subject to the security
interests created thereunder.

4.5 Power of Attorney. Each Borrower hereby irrevocably makes, constitutes,
and appoints Agent (and any of Agent’s officers, employees, or agents designated by Agent) as such
Borrower’s true and lawful attorney, with power to (a) if such Borrower refuses to, or fails timely
to execute and deliver any of the documents described in Section 4.4, sign the name of such
Borrower on any of the documents described in Section 4.4, (b) at any time that an Event of
Default has occurred and is continuing, sign such Borrower’s name on any invoice or bill of lading
relating to the Collateral, drafts against Account Debtors, or notices to Account Debtors, (c) send
requests for verification of Accounts, (d) endorse such Borrower’s name on any Collection item that
may come into the Lender Group’s possession, (e) at any time that an Event of Default has occurred
and is continuing, make, settle, and adjust all claims under such Borrower’s policies of insurance
and make all determinations and decisions with respect to such policies of insurance, and (f) at
any time that an Event of Default has occurred and is continuing, settle and adjust disputes and
claims respecting the Accounts, chattel paper, or General Intangibles directly with Account
Debtors, for amounts and upon terms that Agent determines to be reasonable, and Agent may cause to
be executed and delivered any documents and releases that Agent determines to be necessary. The
appointment of Agent as each Borrower’s attorney, and each and every one of its rights and powers,
being coupled with an interest, is irrevocable until all of the Obligations have been fully and
finally repaid and performed and the Lender Group’s obligations to extend credit hereunder are
terminated.

4.6 Right to Inspect. Agent (through any of its respective officers,
employees, or agents) shall have the right, from time to time hereafter to inspect the Books and to
check, test, and appraise the Collateral in order to verify Borrowers’ financial condition or the
amount, quality, value, condition of, or any other matter relating to, the Collateral.

4.7 Control Agreements. Each Borrower agrees that it will not transfer
assets out of any Securities Accounts other than as permitted under Section 7.19 and, if to
another securities intermediary, unless each of the applicable Borrower, Agent, and the substitute
securities intermediary have entered into a Control Agreement. No arrangement contemplated hereby
or by any Control Agreement in respect of any Securities Accounts or other Investment Property
shall be modified by Borrowers without the prior written consent of Agent. Upon the occurrence and
during the continuance of a Default or Event of Default, Agent may notify any securities
intermediary to liquidate the applicable Securities Account or any related Investment Property
maintained or held thereby and remit the proceeds thereof to the Agent’s Account.

5. REPRESENTATIONS AND WARRANTIES.

In order to induce the Lender Group to enter into this Agreement, each Borrower makes the
following representations and warranties to the Lender Group which shall be true, correct, and
complete, in all material respects, as of the date hereof, and shall be true, correct, and
complete, in all material respects, as of the Closing Date, and at and as of the date of the making
of each Advance (or other extension of credit) made thereafter, as though made on and as of the
date of such Advance (or other extension of credit) (except to the extent that such representations
and warranties relate solely to an earlier date in which case such representations and warranties
shall be true, correct and complete, in all material respects, as of such earlier date) and such
representations and warranties shall survive the execution and delivery of this Agreement:

5.1 No Encumbrances. Each Borrower has good and indefeasible title to its
Collateral and the Real Property, free and clear of Liens except for Permitted Liens.

5.2 Eligible Accounts. The Eligible Accounts are bona fide existing payment
obligations of Account Debtors created by the sale and delivery of Inventory or the rendition of
services to such Account Debtors in the ordinary course of Borrowers’ business, owed to Borrowers
without defenses, disputes, offsets, counterclaims, or rights of return or cancellation. As to
each Eligible Account, such Account is not:

(a) owed by an employee, Affiliate, or any Lender of a Borrower,

(b) on account of a transaction wherein goods were placed on consignment or were
sold pursuant to a guaranteed sale, a sale or return, a sale on approval, a bill and hold, or on
any other terms by reason of which the payment by the Account Debtor may be conditional,

(c) payable in a currency other than Dollars,

(d) owed by an Account Debtor that has or has asserted a right of setoff, has
disputed its liability, or has made any claim with respect to its obligation to pay the Account,

(e) owed by an Account Debtor that is subject to any Insolvency Proceeding or is not
Solvent or as to which a Borrower has received notice of an imminent Insolvency Proceeding or a
material impairment of the financial condition of such Account Debtor,

(f) on account of a transaction as to which the goods giving rise to such Account
have not been shipped and billed to the Account Debtor or the services giving rise to such Account
have not been performed and accepted by the Account Debtor,

(g) a right to receive progress payments or other advance billings that are due
prior to the completion of performance by the applicable Borrower of the subject contract for goods
or services, and

(h) an Account that has not been billed to the customer.

5.3 Eligible Inventory. All Eligible Inventory is of good and merchantable
quality, free from defects. As to each item of Eligible Inventory, such Inventory is

(a) owned by a Borrower free and clear of all Liens other than Liens in favor of
Agent for the benefit of the Lender Group,

(b) either located at one of the locations set forth on Schedule E-1 or in
transit from one such location to another such location,

(c) not located on real property leased by a Borrower or in a contract warehouse, in
each case, unless subject to a Collateral Access Agreement executed by the lessor, the
warehouseman, or other third party, as the case may be, and unless segregated or otherwise
separately identifiable from goods of others, if any, stored on the premises,

(d) not goods that have been returned or rejected by Borrowers’ customers, and

(e) not goods that are obsolete or slow moving, restrictive or custom items,
work-in-process, or that constitute spare parts, packaging and shipping materials, supplies used or
consumed in Borrowers’ business, bill and hold goods, defective goods, “seconds,” or Inventory
acquired on consignment.

5.4 Equipment. All of the Equipment is used or held for use in Borrowers’
business and is fit for such purposes, ordinary wear and tear and ordinary obsolescence excepted.

5.5 Location of Inventory and Equipment. Except as set forth in Schedule
5.5, the Inventory and Equipment are not stored with a bailee, warehouseman, or similar party, and
the Inventory and Equipment are located only at or in transit between the locations identified on
Schedule 5.5.

5.6 Inventory Records. Each Borrower keeps correct and accurate records
itemizing and describing the type, quality, and quantity of its Inventory and the book value
thereof.

5.7 Location of Chief Executive Office; FEIN. The chief executive office of
each Borrower is located at the address indicated in Schedule 5.7 and each Borrower’s FEIN
is identified in Schedule 5.7.

5.8 Due Organization and Qualification; Subsidiaries.

(a) Each Borrower is duly organized and existing and in good standing under the laws
of the jurisdiction of its organization and qualified to do business in any state where the failure
to be so qualified reasonably could be expected to have a Material Adverse Change.

(b) Set forth on Schedule 5.8(b), is a complete and accurate description of
the authorized Stock of each Borrower, by class, and, as of the Closing Date, a description of the
number of shares of each such class that are issued and outstanding. Other than as described on
Schedule 5.8(b), there are no subscriptions, options, warrants, or calls relating to any shares of
each Borrower’s Stock, including any right of conversion or exchange under any outstanding security
or other instrument. No Borrower is subject to any obligation (contingent or otherwise) to
repurchase or otherwise acquire or retire any shares of its Stock or any security convertible into
or exchangeable for any of its Stock except as disclosed on Schedule 5.8(b).

(c) Set forth on Schedule 5.8(c), is a complete and accurate list of each
Borrower’s direct and indirect Subsidiaries, showing: (i) the jurisdiction of their organization;
(ii) the number of shares of each class of common and preferred Stock authorized for each of such
Subsidiaries; and (iii) the number and the percentage of the outstanding shares of each such class
owned directly or indirectly by the applicable Borrower. All of the outstanding capital Stock of
each such Subsidiary has been validly issued and is fully paid and non-assessable.

(d) Except as set forth on Schedule 5.8(c), there are no subscriptions,
options, warrants, or calls relating to any shares of any Borrower’s Subsidiaries’ capital Stock,
including any right of conversion or exchange under any outstanding security or other instrument.
No Borrower or any of its respective Subsidiaries is subject to any obligation (contingent or
otherwise) to repurchase or otherwise acquire or retire any shares of any Borrower’s Subsidiaries’
capital Stock or any security convertible into or exchangeable for any such capital Stock.

5.9 Due Authorization; No Conflict.

(a) As to each Borrower, the execution, delivery, and performance by such Borrower
of this Agreement and the Loan Documents to which it is a party have been duly authorized by all
necessary action on the part of such Borrower.

(b) As to each Borrower, the execution, delivery, and performance by such Borrower
of this Agreement and the Loan Documents to which it is a party do not and will not (i) violate any
provision of federal, state, or local law or regulation applicable to any Borrower, the Governing
Documents of any Borrower, or any order, judgment, or decree of any court or other Governmental
Authority binding on any Borrower, (ii) conflict with, result in a breach of, or constitute (with
due notice or lapse of time or both) a default under any Material Contract of any Borrower, (iii)
result in or require the creation or imposition of any Lien of any nature whatsoever upon any
properties or assets of Borrower, other than Permitted Liens, or (iv) require any approval of any
Borrower’s interestholders or any approval or consent of any Person under any Material Contract of
any Borrower.

(c) Other than the filing of financing statements, filings with the United States
Patent and Trademark Office, fixture filings, and Mortgages, the execution, delivery, and
performance by each Borrower of this Agreement and the Loan Documents to which such Borrower is a
party do not and will not require any registration with, consent, or approval of, or notice to, or
other action with or by, any Governmental Authority or other Person.

(d) As to each Borrower, this Agreement and the other Loan Documents to which such
Borrower is a party, and all other documents contemplated hereby and thereby, when executed and
delivered by such Borrower will be the legally valid and binding obligations of such Borrower,
enforceable against such Borrower in accordance with their respective terms, except as enforcement
may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or
similar laws relating to or limiting creditors’ rights generally.

(e) The Agent’s Liens are validly created, perfected, and first priority Liens,
subject only to Permitted Liens.

(f) The execution, delivery, and performance by each Subsidiary Guarantor of the
Loan Documents to which it is a party have been duly authorized by all necessary action on the part
of such Subsidiary Guarantor.

(g) The execution, delivery, and performance by such Subsidiary Guarantor of the
Loan Documents to which it is a party do not and will not (i) violate any provision of federal,
state, or local law or regulation applicable to such Subsidiary Guarantor, the Governing Documents
of such Subsidiary Guarantor, or any order, judgment, or decree of any court or other Governmental
Authority binding on such Subsidiary Guarantor, (ii) conflict with, result in a breach of, or
constitute (with due notice or lapse of time or both) a default under any Material Contract of such
Subsidiary Guarantor, (iii) result in or require the creation or imposition of any Lien of any
nature whatsoever upon any properties or assets of such Subsidiary Guarantor, other than Permitted
Liens, or (iv) require any approval of such Subsidiary Guarantor’s interestholders or any approval
or consent of any Person under any Material Contract of such Subsidiary Guarantor.

(h) The execution, delivery, and performance by each Subsidiary Guarantor of the
Loan Documents to which such Subsidiary Guarantor is a party do not and will not require any
registration with, consent, or approval of, or notice to, or other action with or by, any
Governmental Authority or other Person.

(i) The Loan Documents to which each Subsidiary Guarantor is a party, and all other
documents contemplated hereby and thereby, when executed and delivered by such Subsidiary Guarantor
will be legally valid and binding obligations of such Subsidiary Guarantor, enforceable against
such Subsidiary Guarantor in accordance with their respective terms, except as enforcement may be
limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or
similar laws relating to or limiting creditors’ rights generally.

5.10 Litigation. Other than those matters disclosed on Schedule
5.10, there are no actions, suits, or proceedings pending or, to the best knowledge of
Borrowers, threatened against Borrowers, or any of their Subsidiaries, as applicable, except for
(a) matters that are fully covered by insurance (subject to customary deductibles), and (b) matters
arising after the Closing Date that, if decided adversely to Borrowers, or any of their
Subsidiaries, as applicable, reasonably could not be expected to result in a Material Adverse
Change.

5.11 No Material Adverse Change. All financial statements relating to
Borrowers that have been delivered by Borrowers to the Lender Group have been prepared in
accordance with GAAP (except, in the case of unaudited financial statements, for the lack of
footnotes and being subject to year-end audit adjustments) and present fairly in all material
respects, Borrowers’ financial condition as of the date thereof and results of operations for the
period then ended. There has not been a Material Adverse Change with respect to Borrowers since
the date of the latest financial statements submitted to Lender on or before the Closing Date.

5.12 Fraudulent Transfer.

(a) Each Borrower is Solvent.

(b) No transfer of property is being made by any Borrower and no obligation is being
incurred by any Borrower in connection with the transactions contemplated by this Agreement or the
other Loan Documents with the intent to hinder, delay, or defraud either present or future
creditors of Borrowers.

5.13 Employee Benefits. None of Borrowers, any of their Subsidiaries, or
any of their ERISA Affiliates maintains or contributes to any Benefit Plan, other than those listed
on Schedule 5.13. Each Borrower, each of its Subsidiaries and each ERISA Affiliate have
satisfied the minimum funding standards of ERISA and the IRC with respect to each Benefit Plan to
which it is obligated to contribute. No ERISA Event has occurred nor has any other event occurred
that may result in an ERISA Event that reasonably could be expected to result in a Material Adverse
Change. No Borrower or its Subsidiaries, any ERISA Affiliate, or any fiduciary of any Plan is
subject to any direct or indirect liability with respect to any Plan under any applicable law,
treaty, rule, regulation, or agreement. No Borrower or its Subsidiaries or any ERISA Affiliate is
required to provide security to any Benefit Plan under Section 401(a)(29) of the IRC.

5.14 Environmental Condition. Except as set forth on Schedule 5.14,
(a) to Borrowers’ knowledge, none of Borrowers’ properties or assets has ever been used by
Borrowers or by previous owners or operators in the disposal of, or to produce, store, handle,
treat, release, or transport, any Hazardous Materials, where such production, storage, handling,
treatment, release or transport was in violation, in any material respect, of applicable
Environmental Law, (b) to Borrowers’ knowledge, none of Borrowers’ properties or assets has ever
been designated or identified in any manner pursuant to any environmental protection statute as a
Hazardous Materials disposal site, (c) none of Borrowers have received notice that a Lien arising
under any Environmental Law has attached to any revenues or to any Real Property owned or operated
by Borrowers, and (d) none of Borrowers have received a summons, citation, notice, or directive
from the Environmental Protection Agency or any other federal or state governmental agency
concerning any action or omission by any Borrower resulting in the releasing or disposing of
Hazardous Materials into the environment.

5.15 Brokerage Fees. Borrowers have not utilized the services of any broker
or finder in connection with Borrowers’ obtaining financing from the Lender Group under this
Agreement and no brokerage commission or finders fee is payable by Borrowers in connection
herewith.

5.16 Intellectual Property. Each Borrower owns, or holds licenses in, all
trademarks, trade names, copyrights, patents, patent rights, and licenses that are necessary to the
conduct of its business as currently conducted. Attached hereto as Schedule 5.16 is a
true, correct, and complete listing of all material patents, patent applications, trademarks,
trademark applications, copyrights, and copyright registrations as to which each Borrower is the
owner or is an exclusive licensee.

5.17 Leases. Borrowers enjoy peaceful and undisturbed possession under all
leases material to the business of Borrowers and to which Borrowers are a party or under which
Borrowers are operating. All of such leases are valid and subsisting and no material default by
Borrowers exists under any of them.

5.18 DDAs. Set forth on Schedule 5.18 are all of the DDAs of each
Borrower, including, with respect to each depository (i) the name and address of such depository,
and (ii) the account numbers of the accounts maintained with such depository.

5.19 Complete Disclosure. (a)  All factual information (taken
as a whole) furnished by or on behalf of Borrowers in writing to Agent or any Lender (including all
information contained in the Schedules hereto or in the other Loan Documents) for purposes of or in
connection with this Agreement, the other Loan Documents or any transaction contemplated herein or
therein is, and all other such factual information (taken as a whole) hereafter furnished by or on
behalf of Borrowers in writing to Agent or any Lender will be, true and accurate, in all material
respects, on the date as of which such information is dated or certified and not incomplete by
omitting to state any fact necessary to make such information (taken as a whole) not misleading in
any material respect at such time in light of the circumstances under which such information was
provided. On the Closing Date, the Closing Date Projections represent, and as of the date on which
any other Projections are delivered to Agent, such additional Projections represent Borrowers’ good
faith best estimate of its future performance for the periods covered thereby.

(b) To the best of each Borrower’s knowledge, no federal, state or local authorities
have proposed any limitations in any ordinance, regulation, plan or contract with any Borrower with
respect to such Borrower’s business as it is presently being conducted which, if enacted, could
reasonably be expected to result in a Material Adverse Change.

5.20 Indebtedness. Set forth on Schedule 5.20 is a true and
complete list of all Indebtedness of each Borrower outstanding immediately prior to the Closing
Date that is to remain outstanding after the Closing Date and such Schedule accurately reflects the
aggregate principal amount of such Indebtedness and the principal terms thereof.

5.21 [Intentionally Omitted]

5.22 Regulation U. None of the Borrowers is nor will be engaged in the
business of extending credit for the purpose of purchasing or carrying margin stock (within the
meaning of Regulations T, U or X of the Board of Governors of the Federal Reserve System), and no
proceeds of any Advance or any Term 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.

5.23 Permits, Etc. Each Borrower has, and is in compliance with, all
permits, licenses, authorizations, approvals, entitlements and accreditations required for such
Person lawfully to own, lease, manage or operate, or to acquire, each business currently owned,
leased, managed or operated, or to be acquired, by such Person except for such permits, licenses,
authorizations, approvals, entitlements and accreditations the absence of which could not
reasonably be expected to result in a Material Adverse Change. No condition exists or event has
occurred which, in itself or with the giving of notice or lapse of time or both, would result in
the suspension, revocation, impairment, forfeiture or non-renewal of any such permit, license,
authorization, approval, entitlement or accreditation, and there is no claim that any thereof is
not in full force and effect.

5.24 Material Contracts. Set forth on Schedule 5.24 is a complete
and accurate list as of the Closing Date of all Material Contracts of Borrowers, showing the
parties and subject matter thereof and amendments and modifications thereto. Each such Material
Contract (i) is in full force and effect and is binding upon and enforceable against the Borrower
that is a party thereto and, to the best knowledge of Borrowers, all other parties thereto in
accordance with its terms except to the extent terminated in accordance with its terms after the
Closing Date, (ii) has not been otherwise amended or modified, and (iii) is not in default due to
the action of any Borrower or, to the best knowledge of Borrowers, any other party thereto.

5.25 Employee and Labor Matters. There is (a) no unfair labor practice
complaint pending or, to the best knowledge of Borrowers, threatened against any Borrower before
any Governmental Authority and no grievance or arbitration proceeding pending or threatened against
any Borrower which arises out of or under any collective bargaining agreement, (b) no strike, labor
dispute, slowdown, stoppage or similar action or grievance pending or threatened against any
Borrower and (c) to the best knowledge of Borrowers, no union representation question existing with
respect to the employees of any Borrower and no union organizing activity taking place with respect
to any of the employees of any of them.

5.26 Customers and Suppliers. There exists no actual or threatened
termination, cancellation or limitation of, or modification to or change in, the business
relationship between (a) any Borrower, on the one hand, and any municipality, customer or any group
thereof, on the other hand, or (b) any Borrower, on the one hand, and any material supplier
thereof, on the other hand; and there exists no present state of facts or circumstances that could
reasonably give rise to or result in any such termination, cancellation, limitation, modification
or change, which in any such case could, individually or in the aggregate, reasonably be expected
to result in a Material Adverse Change.

5.27 Properties. (a) Each Borrower has good and marketable
title to, or valid leasehold interests in, all property and assets material to its business, free
and clear of all Liens except Permitted Liens. The properties are in good working order and
condition, ordinary wear and tear excepted.

(b) Schedule 5.27 sets forth a complete and accurate list as of the Closing
Date of the location, by state and street address, of all real property owned or leased by each
Borrower and its Subsidiaries.

5.28 Anti-Terrorism Laws.

(a) No Loan Party or any of its Affiliates is knowingly in violation in any material
respect of any Anti-Terrorism Law or knowingly engages in or conspires to engage in any material
respect in any transaction that evades or avoids, or has the purpose of evading or avoiding, or
attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law.

(b) No Loan Party or any of its Affiliates (i) is a Blocked Person, (ii) knowingly
conducts any business or engages in making or receiving any contribution of funds, goods or
services to or for the benefit of any Blocked Person, or (iii) knowingly deals in, or otherwise
engages in any transaction relating to, any property or interests in property blocked pursuant to
Executive Order No. 13224.

(c) No Loan Party or any of its Affiliates shall knowingly (i) conduct any business
or engage in any transaction or dealing with any Blocked Person, including, without limitation, the
making or receiving of any contribution of funds, goods or services to or for the benefit of any
Blocked Person, (ii) deal in, or otherwise engage in any transaction relating to, any property or
interests in property blocked pursuant to Executive Order No. 13224, or (iii) engage in or conspire
to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or
attempts to violate, any of the prohibitions set forth in Executive Order No. 13224, the USA
Patriot Act or any other Anti-Terrorism Law.

6. AFFIRMATIVE COVENANTS.

Each Borrower covenants and agrees that, so long as any credit hereunder shall be available
and until full and final payment of the Obligations, Borrowers shall and shall cause each of their
respective Subsidiaries to do all of the following:

6.1 Accounting System. Maintain a system of accounting that enables
Borrowers to produce financial statements in accordance with GAAP and maintain records pertaining
to the Collateral that contain information as from time to time reasonably may be requested by
Agent. Borrowers also shall keep an inventory reporting system that shows all additions, sales,
claims, returns, and allowances with respect to the Inventory.

6.2 Collateral Reporting. Provide Agent (and if so requested by Agent with
copies for each Lender) with the following documents at the following times in form satisfactory to
Agent:

	 	 	 
	Daily

	 	(a) a sales journal, collection journal, and credit register since the last

such schedule and a calculation of the Borrowing Base as of such date, and

(b) notice of all returns, disputes, or claims.
	 

	 	 
	Monthly (not later

than the 10th day

of each month)

	 	(c) Inventory reports specifying each Borrower’s cost and the wholesale

market value of its Inventory, by category, with additional detail showing

additions to and deletions from the Inventory.

(d) a detailed calculation of the Borrowing Base (including detail regarding

those Accounts that are not Eligible Accounts),

(e) a detailed aging, by total, of the Accounts, together with a

reconciliation to the detailed calculation of the Borrowing Base previously

provided to Lender,

(f) a summary aging, by vendor, of Borrowers’ accounts payable and any book

overdraft, and

(g) a calculation of Dilution for the prior month,

(h) a listing of all Inventory located at third party contractors, together

with the aggregate cost of such Inventory.
	 

	 	 
	Quarterly

	 	(i) a detailed list of each Borrower’s customers,

(j) a report regarding each Borrower’s accrued, but unpaid, ad valorem taxes,
	 

	 	 
	Upon request by

Agent

	 	(k) copies of invoices in connection with the Accounts, credit memos,

remittance advices, deposit slips, shipping and delivery documents in

connection with the Accounts and, for Inventory and Equipment acquired by

Borrowers, purchase orders and invoices, and

(l) such other reports as to the Collateral, or the financial condition of

Borrowers as Agent may request.
	 

	 	 

In addition, each Borrower agrees to cooperate fully with Agent to facilitate and implement a
system of electronic collateral reporting in order to provide electronic reporting of each of the
items set forth above.

6.3 Financial Statements, Reports, Certificates. Deliver to Agent, with
copies to each Lender:

(a) as soon as available, but in any event within 30 days (45 days in the case of a
month that is the end of one of the first 3 fiscal quarters in a fiscal year) after the end of each
month during each of Parent’s fiscal years,

(i) a company prepared consolidated balance sheet, income statement,
and statement of cash flow covering Parent’s and its Subsidiaries’ operations during
such period,

(ii) a certificate signed by the chief financial officer of Parent to
the effect that:

A. the financial statements delivered hereunder have been prepared in accordance
with GAAP (except for the lack of footnotes and being subject to year-end audit adjustments) and
fairly present in all material respects the financial condition of Parent and its Subsidiaries,

B. the representations and warranties of Borrowers contained in this Agreement and
the other Loan Documents are true and correct in all material respects on and as of the date of
such certificate, as though made on and as of such date (except to the extent that such
representations and warranties relate solely to an earlier date), and

C. there does not exist any condition or event that constitutes a Default or Event
of Default (or, to the extent of any non-compliance, describing such non-compliance as to which he
or she may have knowledge and what action Borrowers have taken, are taking, or propose to take with
respect thereto), and

(iii) for each month that is the date on which a financial covenant
in Section 7.20 is to be tested, a Compliance Certificate demonstrating, in
reasonable detail, compliance at the end of such period with the applicable
financial covenants contained in Section 7.20, and

(b) as soon as available, but in any event within 120 days after the end of each of
Parent’s fiscal years,

(i) financial statements of Parent and its Subsidiaries for each such
fiscal year, audited by independent certified public accountants reasonably
acceptable to Agent and certified, without any qualifications, by such accountants
to have been prepared in accordance with GAAP (such audited financial statements to
include a balance sheet, income statement, and statement of cash flow and, if
prepared, such accountants’ letter to management),

(ii) a certificate of such accountants addressed to Agent and each
Lender stating that such accountants do not have knowledge of the existence of any
Default or Event of Default under Section 7.20,

(c) as soon as available, but in any event within 30 days prior to the start of each
of Parent’s fiscal years,

(i) copies of Borrowers’ Projections, in form and substance
(including as to scope and underlying assumptions) satisfactory to Agent, in its
sole discretion, for the forthcoming 3 years, year by year, and for the forthcoming
fiscal year, month by month, certified by the chief financial officer of Parent as
being such officer’s good faith best estimate of the financial performance of Parent
and its Subsidiaries during the period covered thereby,

(d) if and when filed by any Borrower,

(i) 10-Q quarterly reports, Form 10-K annual reports, and Form 8-K
current reports,

(ii) any other filings made by any Borrower with the SEC,

(iii) copies of Borrowers’ federal income tax returns, and any
amendments thereto, filed with the Internal Revenue Service, and

(iv) any other information that is provided by Parent to its
shareholders generally,

(e) if and when filed by any Borrower and as requested by Agent or any Lender,
satisfactory evidence of payment of applicable excise taxes in each jurisdictions in which (i) any
Borrower conducts business or is required to pay any such excise tax, (ii) where any Borrower’s
failure to pay any such applicable excise tax would result in a Lien on the properties or assets of
any Borrower, or (iii) where any Borrower’s failure to pay any such applicable excise tax
reasonably could be expected to result in a Material Adverse Change,

(f) as soon as a Borrower has knowledge of any event or condition that constitutes a
Default or an Event of Default, notice thereof and a statement of the curative action that
Borrowers propose to take with respect thereto,

(g) promptly after submission to any Government Authority, all documents and
information furnished to such Government Authority in connection with any investigation of any
Borrower other than routine inquiries by such Governmental Authority,

(h) (i) as soon as possible and in any event (A) within 10 Business Days after the
Borrower or any ERISA Affiliate thereof knows or has reason to know that any Termination Event
described in clause (i) of the definition of Termination Event with respect to any Benefit Plan has
occurred, (B) within 10 Business Days after the Borrower or any ERISA Affiliate thereof knows or
has reason to know that any other Termination Event with respect to any Benefit Plan has occurred,
or (C) within 10 Business Days after the Borrower or any ERISA Affiliate thereof knows or has
reason to know that an accumulated funding deficiency has been incurred or an application has been
made to the Secretary of the Treasury for a waiver or modification of the minimum funding standard
(including installment payments) or an extension of any amortization period under Section 412 of
the IRC with respect to a Benefit Plan, a statement of an Authorized Person setting forth the
details of such occurrence and the action, if any, which the Borrower or such ERISA Affiliate
propose to take with respect thereto, (ii) promptly and in any event within three Business Days
after receipt thereof by the Borrower or any ERISA Affiliate thereof from the PBGC, copies of each
notice received by the Borrower or any ERISA Affiliate thereof of the PBGC’s intention to terminate
any Plan or to have a trustee appointed to administer any Plan, (iii) promptly and in any event
within 10 Business Days after the filing thereof with the Internal Revenue Service if requested by
Agent, copies of each Schedule B (Actuarial Information) to the annual report (Form 5500 Series)
with respect to each Benefit Plan and Multiemployer Plan, (iv) promptly and in any event within 10
Business Days after the Borrower or any ERISA Affiliate thereof knows or has reason to know that a
required installment within the meaning of Section 412 of the IRC has not been made when due with
respect to a Benefit Plan, (v) promptly and in any event within three days after receipt thereof
by the Borrower or any ERISA Affiliate thereof from a sponsor of a Multiemployer Plan or from the
PBGC, a copy of each notice received by the Borrower or any ERISA Affiliate thereof concerning the
imposition or amount of withdrawal liability under Section 4202 of ERISA or indicating that such
Multiemployer Plan may enter reorganization status under Section 4241 of ERISA, and (vi) promptly
and in any event within 10 Business Days after the Borrower or any ERISA Affiliate thereof send
notice of a plant closing or mass layoff (as defined in the Worker Adjustment and Retraining
Notification Act) to employees, copies of each such notice sent by the Borrower or any ERISA
Affiliate thereof, and

(i) upon the request of Agent, any other report reasonably requested relating to the
financial condition of Borrowers.

In addition to the financial statements referred to above, Borrowers agree to deliver
financial statements prepared on both a consolidated and consolidating basis and that no Borrower,
or any Subsidiary of a Borrower, will have a fiscal year different from that of Parent. Borrowers
agree that their independent certified public accountants are authorized to communicate with Agent
and to release to Agent whatever financial information concerning Borrowers that Agent reasonably
may request. Each Borrower waives the right to assert a confidential relationship, if any, it may
have with any accounting firm in connection with any information requested by Agent pursuant to or
in accordance with this Agreement, and agree that Agent may contact directly any such accounting
firm in order to obtain such information.

6.4 [Intentionally Omitted]

6.5 Return. Cause returns and allowances as between Borrowers and their
Account Debtors, to be on the same basis and in accordance with the usual customary practices of
the applicable Borrower, as they exist at the time of the execution and delivery of this Agreement.
If, at a time when no Event of Default has occurred and is continuing, any Account Debtor returns
any Inventory to any Borrower, the applicable Borrower promptly shall determine the reason for such
return and, if the applicable Borrower accepts such return, issue a credit memorandum (with a copy
to be sent to Agent upon Agent’s request) in the appropriate amount to such Account Debtor. If, at
a time when an Event of Default has occurred and is continuing, any Account Debtor returns any
Inventory to any Borrower, the applicable Borrower promptly shall determine the reason for such
return and, if Agent consents (which consent shall not be unreasonably withheld), issue a credit
memorandum (with a copy to be sent to Agent) in the appropriate amount to such Account Debtor.

6.6 Maintenance of Properties. Maintain and preserve all of its properties
which are necessary or useful in the proper conduct to its business in good working order and
condition, ordinary wear and tear excepted, and comply at all times with the provisions of all
leases to which it is a party as lessee, so as to prevent any loss or forfeiture thereof or
thereunder.

6.7 Taxes. Cause all assessments and taxes, whether real, personal, or
otherwise, due or payable by, or imposed, levied, or assessed against Borrowers or any of their
assets to be paid in full, before delinquency or before the expiration of any extension period,
except to the extent that the validity of such assessment or tax shall be the subject of a
Permitted Protest. Borrowers will make timely payment or deposit of all tax payments and
withholding taxes required of it by applicable laws, including those laws concerning F.I.C.A.,
F.U.T.A., state disability, and local, state, and federal income taxes, and will, upon request,
furnish Agent with proof satisfactory to Agent indicating that the applicable Borrower has made
such payments or deposits. Borrowers shall deliver satisfactory evidence of payment of applicable
excise taxes in each jurisdictions in which any Borrower is required to pay any such excise tax.

6.8 Insurance.

(a) At Borrowers’ expense, maintain insurance respecting its property and assets
wherever located, covering loss or damage by fire, theft, explosion, and all other hazards and
risks as ordinarily are insured against by other Persons engaged in the same or similar businesses.
Borrowers also shall maintain business interruption, public liability, and product liability
insurance, as well as insurance against larceny, embezzlement, and criminal misappropriation. All
such policies of insurance shall be in such amounts and with such insurance companies as are
reasonably satisfactory to Agent. Borrowers shall deliver copies of all such policies to Agent
with a satisfactory lender’s loss payable endorsement naming Agent as sole loss payee or additional
insured, as appropriate. Each policy of insurance or endorsement shall contain a clause requiring
the insurer to give not less than 30 days prior written notice to Agent in the event of
cancellation of the policy for any reason whatsoever.

(b) Administrative Borrower shall give Agent prompt notice of any loss covered by
such insurance. Agent shall have the exclusive right to adjust any losses payable under any such
insurance policies in excess of $100,000, without any liability to Borrowers whatsoever in respect
of such adjustments. Any monies received as payment for any loss under any insurance policy
mentioned above (other than liability insurance policies) or as payment of any award or
compensation for condemnation or taking by eminent domain, shall be paid over to Agent to be
applied at the option of Agent either to the prepayment of the Obligations or shall be disbursed to
Administrative Borrower under staged payment terms reasonably satisfactory to Lender for
application to the cost of repairs, replacements, or restorations. Any such repairs, replacements,
or restorations shall be effected with reasonable promptness and shall be of a value at least equal
to the value of the items or property destroyed prior to such damage or destruction.

(c) Borrowers shall not take out separate insurance concurrent in form or
contributing in the event of loss with that required to be maintained under this Section
6.8, unless Agent is included thereon as named insured with the loss payable to Agent under a
lender’s loss payable endorsement or its equivalent. Administrative Borrower immediately shall
notify Agent whenever such separate insurance is taken out, specifying the insurer thereunder and
full particulars as to the policies evidencing the same, and copies of such policies promptly shall
be provided to Agent.

6.9 Location of Inventory and Equipment. Keep the Inventory and Equipment
only at the locations identified on Schedule 5.5; provided, however, that
Administrative Borrower may amend Schedule 5.5 so long as such amendment occurs by written
notice to Agent not less than 30 days prior to the date on which the Inventory or Equipment is
moved to such new location, so long as such new location is within the continental United States,
and so long as, at the time of such written notification, the applicable Borrower provides any
financing statements or fixture filings necessary to perfect and continue perfected the Agent’s
Liens on such assets and also provides to Agent a Collateral Access Agreement.

6.10 Compliance with Laws. Comply with the requirements of all applicable
laws, rules, regulations, and orders of any Governmental Authority, including the Fair Labor
Standards Act and the Americans With Disabilities Act, other than laws, rules, regulations, and
orders the non-compliance with which, individually or in the aggregate, would not result in and
reasonably could not be expected to result in a Material Adverse Change.

6.11 Leases. Pay when due all rents and other amounts payable under any
leases to which any Borrower is a party or by which any Borrower’s properties and assets are bound,
unless such payments are the subject of a Permitted Protest.

6.12 Brokerage Commissions. Pay any and all brokerage commission or finders
fees incurred in connection with or as a result of Borrowers’ obtaining financing from the Lender
Group under this Agreement. Borrowers agree and acknowledge that payment of all such brokerage
commissions or finders fees shall be the sole responsibility of Borrowers, and each Borrower agrees
to indemnify, defend, and hold the Lender Group harmless from and against any claim of any broker
or finder arising out of Borrowers’ obtaining financing from the Lender Group under this Agreement.

6.13 Existence. At all times preserve and keep in full force and effect
each Borrower’s valid existence and good standing and any rights and franchises material to
Borrowers’ businesses.

6.14 Environmental. Keep any property either owned or operated by any
Borrower free of any Environmental Liens or post bonds or other financial assurances sufficient to
satisfy the obligations or liability evidenced by such Environmental Liens, (b) comply, in all
material respects, with Environmental Laws and provide to Agent documentation of such compliance
which Agent reasonably requests, (c) promptly notify Agent of any release of a Hazardous Material
of any reportable quantity from or onto property owned or operated by any Borrower and take any
Remedial Actions required to abate said release or otherwise to come into compliance with
applicable Environmental Law, and (d) promptly provide Agent with written notice within 10 Business
Days of the receipt of any of the following: (i) notice that an Environmental Lien has been filed
against any of the real or personal property of any Borrower, (ii) commencement of any
Environmental Action or notice that an Environmental Action will be filed against any Borrower, and
(iii) notice of a violation, citation, or other administrative order which reasonably could be
expected to result in a Material Adverse Change.

6.15 Disclosure Updates. Promptly and in no event later than 10 Business
Days after obtaining knowledge thereof, (a) notify Agent if any written information, exhibit, or
report furnished to the Lender Group contained any untrue statement of a material fact or omitted
to state any material fact necessary to make the statements contained therein not misleading in
light of the circumstances in which made, and (b) correct any defect or error that may be
discovered therein or in any Loan Document or in the execution, acknowledgement, filing, or
recordation thereof.

6.16 Anti-Terrorism Laws. The Parent shall deliver to the Agent any
certification or other evidence requested from time to time by the Agent in its sole discretion
confirming, as of the date of such request, each Loan Party’s compliance with the representations
and warranties contained in Section 5.28.

7. NEGATIVE COVENANTS.

Each Borrower covenants and agrees that, so long as any credit hereunder shall be available
and until full and final payment of the Obligations, Borrowers will not and will not permit any of
their respective Subsidiaries to do any of the following:

7.1 Indebtedness. Create, incur, assume, permit, guarantee, or otherwise
become or remain, directly or indirectly, liable with respect to any Indebtedness, except:

(a) Indebtedness evidenced by this Agreement and the other Loan Documents, together
with Indebtedness owed to Underlying Issuers with respect to Underlying Letters of Credit;

(b) Indebtedness set forth on Schedule 5.20;

(c) (i) Permitted Purchase Money Indebtedness and (ii) Indebtedness arising in
connection with the purchase and installation of a rolling mill in Birmingham, Alabama in an
aggregate amount not exceeding $5,000,000;

(d) refinancings, renewals, or extensions of Indebtedness permitted under clauses
(b), (c) and (h) of this Section 7.1 (and continuance or renewal of any Permitted Liens
associated therewith) so long as: (i) the terms and conditions of such refinancings, renewals, or
extensions do not, in Agent’s judgment, materially impair the prospects of repayment of the
Obligations by Borrowers or materially impair Borrowers’ creditworthiness, (ii) such refinancings,
renewals, or extensions do not result in an increase in the principal amount of, or interest rate
with respect to, the Indebtedness so refinanced, renewed, or extended, (iii) such refinancings,
renewals, or extensions do not result in a shortening of the average weighted maturity of the
Indebtedness so refinanced, renewed, or extended, nor are they on terms or conditions, that, taken
as a whole, are materially more burdensome or restrictive to the applicable Borrower, and (iv) if
the Indebtedness that is refinanced, renewed, or extended was subordinated in right of payment to
the Obligations, then the terms and conditions of the refinancing, renewal, or extension
Indebtedness must be include subordination terms and conditions that are at least as favorable to
the Lender Group as those that were applicable to the refinanced, renewed, or extended
Indebtedness;

(e) Indebtedness owing by any Borrower to any other Borrower, provided that (i) the
repayment of all such Indebtedness is subordinated to the payment of the Obligations pursuant to
the terms of and evidenced by one or more promissory notes substantially in the form of Exhibit
S hereto, and (ii) such notes shall be pledged to Agent pursuant to the Pledge Agreement;

(f) any Contingent Obligation with respect to any Indebtedness or other obligation
of a Borrower permitted under this Section 7.1;

(g) Junior Debt; provided that (i) the Borrowers shall be permitted to make
scheduled payments of principal and interest on Junior Debt in accordance with its terms and
(ii) notwithstanding anything to the contrary contained in any agreement, instrument, or document
evidencing or governing Junior Debt, the Borrowers shall be permitted to make additional
prepayments of the Junior Debt only so long as (A) no Event of Default has occurred and is
continuing or would result from the making of such payments, (B) the aggregate amount of such
payments made to the holders of Junior Debt plus the aggregate amount of Stock repurchased
by the Borrowers in accordance with Section 7.11 shall not exceed $3,000,000 during any
calendar year, (C) the Availability of Borrowers immediately after giving effect to each such
payment shall not be less than $5,000,000, (D) if the Junior Debt owing to any holder thereof is
repaid in full as a result of such prepayment, such holder shall, in conjunction with such
prepayment, release its Lien on any Collateral securing such Junior Debt and (E) Administrative
Borrower delivers to Agent, at least three (3) Business Days prior to each such payment, a
certificate of the chief executive officer or chief financial officer of Administrative Borrower
(I) certifying that the conditions set forth in clauses (A), (B) and (C) above have been satisfied
and (II) containing a calculation of the Availability test set forth in clause (C) above;

(h) Indebtedness outstanding under the Ableco Loan Agreement, provided that (i) the
aggregate principal amount of Ableco Loans shall not exceed $55,000,000 (plus any paid-in-kind
interest added to the principal balance thereof) at any time, (ii) any prepayments or repayments of
the principal amount of such Indebtedness shall reduce the amount of Indebtedness permitted under
this Section 7.1(h) on a dollar-for-dollar basis, and (iii) Ableco and the Agent have entered into
the Ableco Intercreditor Agreement;

(i) the Annaco Earn-Out Arrangements; and

(j) Indebtedness composing Permitted Investments.

7.2 Liens. Create, incur, assume, or permit to exist, directly or
indirectly, any Lien on or with respect to any of its assets, of any kind, whether now owned or
hereafter acquired, or any income or profits therefrom, except for Permitted Liens (including Liens
that are replacements of Permitted Liens to the extent that the original Indebtedness is
refinanced, renewed, or extended under Section 7.1(d) and so long as the replacement Liens
only encumber those assets that secured the refinanced, renewed, or extended Indebtedness).

7.3 Restrictions on Fundamental Changes.

(a) Enter into any merger, consolidation, reorganization, or recapitalization, or
reclassify its Stock.

(b) Liquidate, wind up, or dissolve itself (or suffer any liquidation or
dissolution).

(c) Convey, sell, lease, license, assign, transfer, or otherwise dispose of, in one
transaction or a series of transactions, all or any substantial part of its assets.

Clauses (a), (b) and (c) of this Section 7.3 shall not apply to the Merger or the
merger or consolidation of a Borrower with and into another Borrower.

7.4 Disposal of Assets. Other than Permitted Dispositions, convey, sell,
lease, license, assign, transfer, or otherwise dispose of any of the assets of any Borrower.

7.5 Change Name. Change any Borrower’s name, FEIN, corporate structure or
identity, or add any new fictitious name; provided, however, that a Borrower may
change its name upon at least 10 days prior written notice by Administrative Borrower to Agent of
such change and so long as, at the time of such written notification, such Borrower provides any
financing statements or fixture filings necessary to perfect and continue perfected Agent’s Liens.

7.6 Guarantee. Guarantee or otherwise become in any way liable with respect
to the obligations of any third Person except (i) by endorsement of instruments or items of payment
for deposit to the account of Borrowers or which are transmitted or turned over to Agent, (ii) for
guarantees of Indebtedness permitted under Section  7.1 and guarantees set forth on
Schedule 5.20 and (iii) for guarantees of performance, surety or appeal bonds of any Borrower.

7.7 Nature of Business. Make any change in the principal nature of
Borrowers’ business.

7.8 Prepayments and Amendments.

(a) Except in connection with a refinancing permitted by Section 7.1(d),
prepay, redeem, defease, purchase, or otherwise acquire any Indebtedness of any Borrower, other
than (i) the Obligations in accordance with this Agreement and (ii) the Ableco Loans,
provided that (x) Borrowers shall not make any optional prepayments in respect of the
Ableco Loans without the prior written consent of Agent, and (y) if Borrowers shall be required to
make a mandatory prepayment under the terms of the Ableco Loan Agreement, Borrowers shall first
offer to make a permanent prepayment of the Obligations from the Net Cash Proceeds received in
connection with the event giving rise to such mandatory prepayment until paid in full (provided
that, in the case of amounts applied to prepay Advances, the Revolver Commitment shall be
permanently reduced dollar-for-dollar by such amounts), and if the Required Lenders waive all or
any portion of such prepayment of the Obligations, any remaining Net Cash Proceeds shall be used to
prepay the Ableco Loans, and

(b) (i) Except in connection with a refinancing permitted by Section 7.1(d),
directly or indirectly, amend, modify, alter, increase, or change any of the terms or conditions of
any agreement, instrument, document, indenture, or other writing evidencing or concerning
Indebtedness permitted under Sections 7.1(b), (c), (e), (g) or (i), or (ii) amend or modify
the Ableco Loan Agreement or any other document governing the Ableco Loans to the extent such
amendment or modification is prohibited under the Ableco Intercreditor Agreement.

(c) Amend, modify or otherwise change (i) the Governing Documents of any Borrower or
Subsidiary Guarantor, including, without limitation, by the filing or modification of any
certificate of designation, or (ii) any agreement or arrangement entered into by it with respect to
any of its Stock (including any shareholders’ agreement), or enter into any new agreement with
respect to the Stock of any Borrower or Subsidiary Guarantor, except any such amendments,
modifications or changes or any such new agreements or arrangements pursuant to clause (ii) of this
paragraph (c) that either individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.

7.9 Change of Control. Cause, permit, or suffer, directly or indirectly,
any Change of Control.

7.10 Consignments. Consign any Inventory or sell any Inventory on bill and
hold, sale or return, sale on approval, or other conditional terms of sale.

7.11 Distributions. Other than distributions or declaration and payment of
dividends by a Borrower to another Borrower or in connection with a Permitted Disposition with
respect to Beacon Stock, make any distribution or declare or pay any dividends (in cash or other
property, other than Stock including, without limitation, Beacon’s Stock) on, or purchase, acquire,
redeem, or retire any of Borrower’s Stock, of any class, whether now or hereafter outstanding,
except that Parent may repurchase shares of its common Stock so long as (a) no Event of Default has
occurred and is continuing or would result from the repurchase of such shares of Stock, (b) the
aggregate amount paid to repurchase such shares of Stock plus the aggregate amount of payments made
to the holders of Junior Debt in accordance with Section 7.1(g) shall not exceed $3,000,000
during any calendar year, (c) the Availability of Borrowers immediately after giving effect to each
such payment shall not be less than $5,000,000, and (d) Administrative Borrower delivers to Agent,
at least three (3) Business Days prior to each such repurchase, a certificate of the chief
executive officer or chief financial officer of Administrative Borrower (A) certifying that the
conditions set forth in clauses (a), (b) and (c) above have been satisfied and (B) containing a
calculation of the Availability test set forth in clause (c) above.

7.12 Accounting Methods. Modify or change its method of accounting (other
than as may be required to conform to GAAP) or enter into, modify, or terminate any agreement
currently existing, or at any time hereafter entered into with any third party accounting firm or
service bureau for the preparation or storage of Borrowers’ accounting records without said
accounting firm or service bureau agreeing to provide Agent information regarding the Collateral or
Borrowers’ financial condition.

7.13 Investments. Except for Permitted Investments, directly or indirectly,
make or acquire any Investment, or incur any liabilities (including contingent obligations) for or
in connection with any Investment; provided, however, that Borrowers shall not have
Permitted Investments (other than in the Cash Management Accounts) in excess of $500,000
outstanding at any one time unless the applicable Borrower and the applicable securities
intermediary or bank have entered into Control Agreements or similar arrangements governing such
Permitted Investments, as Agent shall determine in its Permitted Discretion, to perfect (and
further establish) the Agent’s Liens in such Permitted Investments.

7.14 Transactions with Affiliates. Directly or indirectly enter into or
permit to exist any transaction with any Affiliate of any Borrower except for transactions that are
in the ordinary course of Borrowers’ business, upon fair and reasonable terms, that are fully
disclosed to Agent, and that are no less favorable to Borrowers than would be obtained in an arm’s
length transaction with a non-Affiliate. No Borrower shall pay any management fee to any Affiliate
other than Parent.

7.15 Suspension. Suspend or go out of a substantial portion of its
business.

7.16 Compensation. Increase the annual fee or per-meeting fees paid to the
members of its Board of Directors during any year by more than 100% over the prior year; pay or
accrue total cash compensation, during any year, to its officers and senior management employees in
an aggregate amount in excess of 200% of that paid or accrued in the prior year.

7.17 Use of Proceeds. Use the proceeds of the Advances and the Term Loans
for any purpose other than (a) on the Closing Date, to pay transactional fees, costs, and expenses
incurred in connection with this Agreement, the other Loan Documents, and the transactions
contemplated hereby and thereby, and (b) thereafter, consistent with the terms and conditions
hereof, for its lawful and permitted purposes, including to fund the general ongoing working
capital requirements of the Borrowers.

7.18 Change in Location of Chief Executive Office; Inventory and Equipment with
Bailees. Relocate its chief executive office to a new location without Administrative Borrower
providing 30 days prior written notification thereof to Agent and so long as, at the time of such
written notification, the applicable Borrower provides any financing statements or fixture filings
necessary to perfect and continue perfected the Agent’s Liens and also provides to Agent a
Collateral Access Agreement with respect to such new location. The Inventory and Equipment shall
not at any time now or hereafter be stored with a bailee, warehouseman, or similar party without
Agent’s prior written consent.

7.19 Securities Accounts. Establish or maintain any Securities Account
unless Agent shall have received a Control Agreement in respect of such Securities Account.
Borrowers agree to not transfer assets out of any Securities Account; provided, however, that, so
long as no Event of Default has occurred and is continuing or would result therefrom, Borrowers may
use such assets (and the proceeds thereof) to the extent not prohibited by this Agreement.

7.20 Financial Covenants.

(a) Fail to maintain:

(i) Minimum EBITDA. EBITDA, measured on a fiscal quarter-end basis, of not
less than the required amount set forth in the following table for the applicable period set forth
opposite thereto:

	 	 	 
	Applicable Amount

	 	Applicable Period
	 

	 	 
	$15,137,394

	 	For the 12 month period ending

June 30, 2007
	 

	 	 
	$26,103,000

	 	For the 12 month period ending

September 30, 2007
	 

	 	 
	$30,568,000

	 	For the 12 month period ending

December 31, 2007
	 

	 	 

Agent shall establish required minimum amounts for each 12-month period ending on the last day
of each fiscal quarter after December 31, 2007 on such basis as Agent may determine in its
Permitted Discretion, consistent with methods employed to establish minimum amounts for prior
periods; provided, that if Agent and Borrowers cannot agree on such Projections, for
purposes of this Section 7.20(a)(i), Borrowers’ projected EBITDA for such 12 month period
shall not be less than $30,568,000.

(ii) Fixed Charge Coverage Ratio. A Fixed Charge Coverage Ratio, measured
on a month-end basis, of at least 1.0:1.0.

(b) Make:

(i) Capital Expenditures. Capital expenditures in Fiscal Year 2007 and any
fiscal year thereafter (subject to the last sentence of this Section 7.20(b)(i)) in excess
of $12,000,000, plus for any fiscal year after 2007, so long as no Event of Default shall
have occurred and be continuing, the Permitted Carry-Forward (as hereinafter defined). For
purposes of this Section 7.20(b), “Permitted Carry-Forward” shall mean, for any
fiscal year after 2007, an amount equal to the lesser of (x) $750,000 and (y) the amount (if any)
by which the aggregate maximum amount of capital expenditures that Borrowers may make during the
immediately preceding fiscal year pursuant to this Section 7.20(b)(i) exceeded the actual
amount of capital expenditures made by the Borrowers during such fiscal year. The aggregate
maximum amount of capital expenditures that Borrowers may make during fiscal years after 2007 shall
not exceed the aggregate projected amount of Borrowers’ capital expenditures for each such fiscal
year as set forth in the Projections delivered to Agent in accordance with Section 6.3(c),
which Projections are in form and substance acceptable to Agent; provided, that if Agent
and Borrowers cannot agree on such Projections, for purposes of this Section 7.20(b)(i),
the aggregate projected amount of Borrowers’ capital expenditures for each such fiscal year shall
not exceed $12,000,000.

8. EVENTS OF DEFAULT.

Any one or more of the following events shall constitute an event of default (each, an
"Event of Default”) under this Agreement:

8.1 If Borrowers (a) fail to pay when due and payable or when declared due and payable, all or
any portion of the principal of the Advances and Term Loans, or (b) fail to pay within three days
after the due date therefor all or any portion of the other Obligations (whether of interest
(including any interest which, but for the provisions of the Bankruptcy Code, would have accrued on
such amounts), fees and charges due the Lender Group, reimbursement of Lender Group Expenses, or
other amounts constituting Obligations);

8.2 If Borrowers fail to perform, keep, or observe any term, provision, condition, covenant,
or agreement contained in Sections 6.1, 6.2 (but only up to three times during any
12-month period, and only in relation to Defaults caused by the failure of third Persons to provide
required information or reporting, and not in relation to Defaults caused by a Borrower),
6.3, 6.5, 6.7, 6.9, and 6.11 of this Agreement, or
comparable provisions of the other Loan Documents, within 15 days of the date when required (or
within 5 days of the date when required in the case of Sections 6.2, 6.3,
6.9 and 6.11), or if a Borrower otherwise fails to perform, keep, or observe any
other term, provision, condition, covenant, or agreement contained in this Agreement or in any of
the other Loan Documents;

8.3 If any portion of any Borrower’s or any of its Subsidiaries’ assets with an aggregate
value in excess of $1,000,000 is attached, seized, subjected to a writ or distress warrant, levied
upon, or comes into the possession of any third Person;

8.4 If an Insolvency Proceeding is commenced by any Borrower or any of its Subsidiaries;

8.5 If an Insolvency Proceeding is commenced against any Borrower, or any of its Subsidiaries,
and any of the following events occur: (a) the applicable Borrower or the Subsidiary consents to
the institution of the Insolvency Proceeding against it, (b) the petition commencing the Insolvency
Proceeding is not timely controverted, (c) the petition commencing the Insolvency Proceeding is not
dismissed within 60 calendar days of the date of the filing thereof; provided,
however, that, during the pendency of such period, each member of the Lender Group shall be
relieved of its obligation to extend credit hereunder, (d) an interim trustee is appointed to take
possession of all or any substantial portion of the properties or assets of, or to operate all or
any substantial portion of the business of, any Borrower or any of its Subsidiaries, or (e) an
order for relief shall have been entered therein;

8.6 If any Borrower or any of its Subsidiaries is enjoined, restrained, or in any way
prevented by court order from continuing to conduct all or any material part of its business
affairs;

8.7 If a notice of Lien, levy, or assessment securing or otherwise with respect to
Indebtedness or an obligation for the payment of money in an aggregate amount in excess of $200,000
is filed of record with respect to any Borrower’s or any of its Subsidiaries’ assets by the United
States, or any department, agency, or instrumentality thereof, or by any state, county, municipal,
or governmental agency, or if any taxes or debts owing at any time hereafter to any one or more of
such entities becomes a Lien, whether choate or otherwise, upon any Borrower’s or any of its
Subsidiaries’ assets and the same is not paid before such payment is delinquent;

8.8 If a judgment or other claim for an amount in excess of $500,000 becomes a Lien or
encumbrance upon any material portion of any Borrower’s or any of its Subsidiaries’ assets;

8.9 If there is a default in any material agreement to which any Borrower or any of its
Subsidiaries is a party and such default (a)(i) occurs at the final maturity of the obligations
thereunder, or (ii) results in a right by the other party thereto, irrespective of whether
exercised, to accelerate the maturity of the applicable Borrower’s or its Subsidiaries’ obligations
thereunder, to terminate such agreement, or to refuse to renew such agreement pursuant to an
automatic renewal right therein, and (b) involves Indebtedness or an obligation for the payment of
money in an aggregate amount in excess of $500,000;

8.10 If any Borrower or any of its Subsidiaries makes any payment on account of Indebtedness
that has been contractually subordinated in right of payment to the payment of the Obligations,
except to the extent such payment is permitted by the terms of the subordination provisions
applicable to such Indebtedness;

8.11 If any material misstatement or misrepresentation exists now or hereafter in any
warranty, representation, statement, or Record, in each case made or provided in writing to the
Lender Group by any Borrower, its Subsidiaries, or any officer, employee, agent, or director of any
Borrower or any of its Subsidiaries;

8.12 If the obligation of any Guarantor under its Guaranty is limited or terminated by
operation of law or by such Guarantor thereunder;

8.13 If this Agreement or any other Loan Document that purports to create a Lien, shall, for
any reason, fail or cease to create a valid and perfected and, except to the extent permitted by
the terms hereof or thereof, first priority Lien on or security interest in any portion of the
Collateral with an aggregate value in excess of $1,000,000 covered hereby or thereby;

8.14 If any Borrower or any of its Subsidiaries or any of their ERISA Affiliates shall have
made a complete or partial withdrawal from a Multiemployer Plan, and, as a result of such complete
or partial withdrawal, such Borrower or any of its Subsidiaries or such ERISA Affiliate incurs a
withdrawal liability in an annual amount exceeding $500,000; or a Multiemployer Plan enters
reorganization status under Section 4241 of ERISA, and, as a result thereof, a Borrower’s or such
Subsidiary’s, or such ERISA Affiliate’s annual contribution requirement with respect to such
Multiemployer Plan increases in an annual amount exceeding $500,000;

8.15 any Termination Event with respect to any Benefit Plan shall have occurred, and, 30 days
after notice thereof shall have been given by Borrowers to the Agent, (i) such Termination Event
(if correctable) shall not have been corrected, and (ii) the then current value of such Benefit
Plan’s vested benefits exceeds the then current value of assets allocable to such benefits in such
Benefit Plan by more than $500,000 (or, in the case of a Termination Event involving liability
under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or
Section 4971 or 4975 of the Code, the liability is in excess of such amount); or

8.16 Any provision of any Loan Document shall at any time for any reason be declared to be
null and void, or the validity or enforceability thereof shall be contested by any Borrower, or a
proceeding shall be commenced by any Borrower, or by any Governmental Authority having jurisdiction
over any Borrower, seeking to establish the invalidity or unenforceability thereof, or any Borrower
shall deny that any Borrower has any liability or obligation purported to be created under any Loan
Document.

9. THE LENDER GROUP’S RIGHTS AND REMEDIES.

9.1 Rights and Remedies. Upon the occurrence, and during the continuation,
of an Event of Default, the Required Lenders (at their election but without notice of their
election and without demand) may authorize and instruct Agent to do any one or more of the
following on behalf of the Lender Group (and Agent, acting upon the instructions of the Required
Lenders, shall do the same on behalf of the Lender Group), all of which are authorized by
Borrowers:

(a) Declare all Obligations, whether evidenced by this Agreement, by any of the
other Loan Documents, or otherwise, immediately due and payable;

(b) Cease advancing money or extending credit to or for the benefit of Borrowers
under this Agreement, under any of the Loan Documents, or under any other agreement between
Borrowers and the Lender Group;

(c) Terminate this Agreement and any of the other Loan Documents as to any future
liability or obligation of the Lender Group, but without affecting any of the Agent’s Liens in the
Collateral and without affecting the Obligations;

(d) Settle or adjust disputes and claims directly with Account Debtors for amounts
and upon terms which Agent considers advisable, and in such cases, Agent will credit the Loan
Account with only the net amounts received by Agent in payment of such disputed Accounts after
deducting all Lender Group Expenses incurred or expended in connection therewith;

(e) Cause Borrowers to hold all returned Inventory in trust for the Lender Group,
segregate all returned Inventory from all other assets of Borrowers or in Borrowers’ possession and
conspicuously label said returned Inventory as the property of the Lender Group;

(f) Without notice to or demand upon any Borrower or any Guarantor, make such
payments and do such acts as Agent considers necessary or reasonable to protect its security
interests in the Collateral. Each Borrower agrees to assemble the Personal Property Collateral if
Agent so requires, and to make the Personal Property Collateral available to Agent at a place that
Agent may designate which is reasonably convenient to both parties. Each Borrower authorizes Agent
to enter the premises where the Personal Property Collateral is located, to take and maintain
possession of the Personal Property Collateral, or any part of it, and to pay, purchase, contest,
or compromise any Lien that in Agent’s determination appears to conflict with the Agent’s Liens and
to pay all expenses incurred in connection therewith and to charge Borrowers’ Loan Account
therefor. With respect to any of Borrowers’ owned or leased premises, each Borrower hereby grants
Agent a license to enter into possession of such premises and to occupy the same, without charge,
in order to exercise any of the Lender Group’s rights or remedies provided herein, at law, in
equity, or otherwise;

(g) Without notice to any Borrower (such notice being expressly waived), and without
constituting a retention of any collateral in satisfaction of an obligation (within the meaning of
the Code), set off and apply to the Obligations any and all (i) balances and deposits of any
Borrower held by the Lender Group (including any amounts received in the Cash Management Accounts),
or (ii) Indebtedness at any time owing to or for the credit or the account of any Borrower held by
the Lender Group;

(h) Hold, as cash collateral, any and all balances and deposits of any Borrower held
by the Lender Group, and any amounts received in the Cash Management Accounts, to secure the full
and final repayment of all of the Obligations;

(i) Ship, reclaim, recover, store, finish, maintain, repair, prepare for sale,
advertise for sale, and sell (in the manner provided for herein) the Personal Property Collateral.
Each Borrower hereby grants to Agent a license or other right to use, without charge, such
Borrower’s labels, patents, copyrights, trade secrets, trade names, trademarks, service marks, and
advertising matter, or any property of a similar nature, as it pertains to the Personal Property
Collateral, in completing production of, advertising for sale, and selling any Personal Property
Collateral and such Borrower’s rights under all licenses and all franchise agreements shall inure
to Lender’s benefit;

(j) Sell the Personal Property Collateral at either a public or private sale, or
both, by way of one or more contracts or transactions, for cash or on terms, in such manner and at
such places (including Borrowers’ premises) as Agent determines is commercially reasonable. It is
not necessary that the Personal Property Collateral be present at any such sale;

(k) Agent shall give notice of the disposition of the Personal Property Collateral
as follows:

(i) Agent shall give Administrative Borrower (for the benefit of the
applicable Borrower) a notice in writing of the time and place of public sale, or,
if the sale is a private sale or some other disposition other than a public sale is
to be made of the Personal Property Collateral, then the time on or after which the
private sale or other disposition is to be made; and

(ii) The notice shall be personally delivered or mailed, postage
prepaid, to Administrative Borrower as provided in Section 12, at least 10
days before the earliest time of disposition set forth in the notice; no notice
needs to be given prior to the disposition of any portion of the Personal Property
Collateral that is perishable or threatens to decline speedily in value or that is
of a type customarily sold on a recognized market;

(l) Agent, on behalf of the Lender Group may credit bid and purchase at any public
sale;

(m) Agent may seek the appointment of a receiver or keeper to take possession of all
or any portion of the Collateral or to operate same and, to the maximum extent permitted by law,
may seek the appointment of such a receiver without the requirement of prior notice or a hearing;

(n) The Lender Group shall have all other rights and remedies available to it at law
or in equity pursuant to any other Loan Documents; and

(o) Any deficiency that exists after disposition of the Personal Property Collateral
as provided above will be paid immediately by Borrowers. Any excess will be returned, without
interest and subject to the rights of third Persons, by Agent to Administrative Borrower (for the
benefit of the applicable Borrower).

9.2 Remedies Cumulative. The rights and remedies of the Lender Group under
this Agreement, the other Loan Documents, and all other agreements shall be cumulative. The Lender
Group shall have all other rights and remedies not inconsistent herewith as provided under the
Code, by law, or in equity. No exercise by the Lender Group of one right or remedy shall be deemed
an election, and no waiver by the Lender Group of any Event of Default shall be deemed a continuing
waiver. No delay by the Lender Group shall constitute a waiver, election, or acquiescence by it.

10. TAXES AND EXPENSES.

If any Borrower fails to pay any monies (whether taxes, assessments, insurance premiums, or,
in the case of leased properties or assets, rents or other amounts payable under such leases) due
to third Persons, or fails to make any deposits or furnish any required proof of payment or
deposit, all as required under the terms of this Agreement, then, Agent, in its sole discretion and
without prior notice to any Borrower, may do any or all of the following: (a) make payment of the
same or any part thereof, (b) set up such reserves in Borrowers’ Loan Account as Agent deems
necessary to protect the Lender Group from the exposure created by such failure, or (c) in the case
of the failure to comply with Section 6.8 hereof, obtain and maintain insurance policies of
the type described in Section 6.8 and take any action with respect to such policies as
Agent deems prudent. Any such amounts paid by Agent shall constitute Lender Expenses and any such
payments shall not constitute an agreement by the Lender Group to make similar payments in the
future or a waiver by the Lender Group of any Event of Default under this Agreement. Agent need
not inquire as to, or contest the validity of, any such expense, tax, or Lien and the receipt of
the usual official notice for the payment thereof shall be conclusive evidence that the same was
validly due and owing.

11. WAIVERS; INDEMNIFICATION.

11.1 Demand; Protest. Each Borrower waives demand, protest, notice of
protest, notice of default or dishonor, notice of payment and nonpayment, nonpayment at maturity,
release, compromise, settlement, extension, or renewal of documents, instruments, chattel paper,
and guarantees at any time held by the Lender Group on which any such Borrower may in any way be
liable.

11.2 The Lender Group’s Liability for Collateral. Each Borrower hereby
agrees that: (a) so long as Agent complies with its obligations, if any, under the Code, the
Lender Group shall not in any way or manner be liable or responsible for: (i) the safekeeping of
the Collateral, (ii) any loss or damage thereto occurring or arising in any manner or fashion from
any cause, (iii) any diminution in the value thereof, or (iv) any act or default of any carrier,
warehouseman, bailee, forwarding agency, or other Person, and (b) all risk of loss, damage, or
destruction of the Collateral shall be borne by Borrowers.

11.3 Indemnification. Each Borrower shall pay, indemnify, defend, and hold
the Agent-Related Persons, the Lender-Related Persons, each Participant, and each of their
respective officers, directors, employees, agents, and attorneys-in-fact (each, an “Indemnified
Person”) harmless (to the fullest extent permitted by law) from and against any and all claims,
demands, suits, actions, investigations, proceedings, and damages, and all reasonable attorneys
fees and disbursements and other costs and expenses actually incurred in connection therewith (as
and when they are incurred and irrespective of whether suit is brought), at any time asserted
against, imposed upon, or incurred by any of them (a) in connection with or as a result of or
related to the execution, delivery, enforcement, performance, or administration of this Agreement,
any of the other Loan Documents, or the transactions contemplated hereby or thereby, (b) with
respect to any investigation, litigation, or proceeding related to this Agreement, any other Loan
Document, or the use of the proceeds of the credit provided hereunder (irrespective of whether any
Indemnified Person is a party thereto), or any act, omission, event, or circumstance in any manner
related thereto, (c) in connection with the past, present or future operations of Borrowers and
their Subsidiaries involving any damage to real or personal property or natural resources or harm
or injury alleged to have resulted from any release of Hazardous Materials on, upon or into such
property, (d) any Environmental Liabilities and Costs incurred in connection with the
investigation, removal, cleanup and/or remediation of any Hazardous Materials present or arising
out of the operations of any facility of any Borrower and its Subsidiaries, or (e) any
Environmental Liabilities and Costs incurred in connection with any Environmental Lien (all the
foregoing, collectively, the “Indemnified Liabilities”). The foregoing to the contrary
notwithstanding, Borrowers shall have no obligation to any Indemnified Person under this
Section 11.3 with respect to any Indemnified Liability that a court of competent
jurisdiction finally determines to have resulted from the gross negligence or willful misconduct of
such Indemnified Person. This provision shall survive the termination of this Agreement and the
repayment of the Obligations. If any Indemnified Person makes any payment to any other Indemnified
Person with respect to an Indemnified Liability as to which Borrowers were required to indemnify
the Indemnified Person receiving such payment, the Indemnified Person making such payment is
entitled to be indemnified and reimbursed by Borrowers with respect thereto. WITHOUT LIMITATION,
THE FOREGOING INDEMNITY SHALL APPLY TO EACH INDEMNIFIED PERSON WITH RESPECT TO INDEMNIFIED
LIABILITIES WHICH IN WHOLE OR IN PART CAUSED BY OR ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF
SUCH INDEMNIFIED PERSON OR OF ANY OTHER PERSON.

12. NOTICES.

Unless otherwise provided in this Agreement, all notices or demands by Borrowers or Agent to
the other relating to this Agreement or any other Loan Document shall be in writing and (except for
financial statements and other informational documents which may be sent by first-class mail,
postage prepaid) shall be personally delivered or sent by registered or certified mail (postage
prepaid, return receipt requested), overnight courier, electronic mail (at such email addresses as
the Administrative Borrower or Agent, as applicable, may designate to each other in accordance
herewith), or telefacsimile to Borrowers in care of Administrative Borrower or to Agent, as the
case may be, at its address set forth below:

	 	 	 
	If to Administrative

Borrower:

	 	

METALICO, INC.

186 North Avenue East

Cranford, New Jersey 07016

Attn: Carlos Aguero, President

Fax No: (908) 497-1097

-and-

	 	 	 	 	 
	 	 	METALICO, INC.
	186 North Avenue East
Cranford, New Jersey 07016
Attn: General Counsel
Fax No: (908) 497-1097
with copies to:
	 	LOWENSTEIN SANDLER PC

	 	 	 
	65 Livingston Avenue

Roseland, New Jersey 07068

Attn: Steven M. Skolnick, Esq.

Fax No. (973) 597-2400

If to Agent:

	 	

WELLS FARGO FOOTHILL, INC.

	 	 	 
	1100 Abernathy Road, Suite 1600

Atlanta, GA 30328

	 	

	Attn: Business Finance Division Manager

	Fax No. (770) 804-0551

with copies to:

	 	

SCHULTE ROTH & ZABEL LLP

919 Third Avenue

New York, New York 10022

Attn: Eliot Relles, Esq.

Fax No. (212) 593-5955

Agent and Borrowers may change the address at which they are to receive notices hereunder, by
notice in writing in the foregoing manner given to the other party. All notices or demands sent in
accordance with this Section 12, other than notices by Agent in connection with enforcement
rights against the Collateral under the provisions of the Code, shall be deemed received on the
earlier of the date of actual receipt or 3 Business Days after the deposit thereof in the mail.
Each Borrower acknowledges and agrees that notices sent by the Lender Group in connection with the
exercise of enforcement rights against Collateral under the provisions of the Code shall be deemed
sent when deposited in the mail or personally delivered, or, where permitted by law, transmitted by
telefacsimile or any other method set forth above.

13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

(a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS EXPRESSLY
PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH OTHER LOAN DOCUMENT), THE
CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES
HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR
THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.

(b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND
FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK, PROVIDED, HOWEVER, THAT ANY
SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT’S
OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING SUCH ACTION OR WHERE SUCH
COLLATERAL OR OTHER PROPERTY MAY BE FOUND. BORROWERS AND EACH MEMBER OF THE LENDER GROUP WAIVE, TO
THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM
NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH
THIS SECTION 13(b).

BORROWERS AND EACH MEMBER OF THE LENDER GROUP HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY
OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. BORROWERS AND EACH MEMBER OF THE LENDER
GROUP REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS
JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF
THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

14. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.

14.1 Assignments and Participations.

(a) Each Lender may assign and delegate to one or more assignees (each an
"Assignee”) all, or any ratable part of all, of the Obligations and the other rights and
obligations of Lender hereunder and under the other Loan Documents; provided,
however, that Borrowers may continue to deal solely and directly with such Lender in
connection with the interest so assigned to an Assignee until written notice of such assignment,
together with payment instructions, addresses, and related information with respect to the
Assignee, have been given to Administrative Borrower and Agent by such Lender and the Assignee
along with a duly executed copy of the applicable Assignment and Acceptance.

(b) From and after the date that Agent notifies the assigning Lender (with a copy to
Administrative Borrower) that it has received an executed Assignment and Acceptance and payment of
a processing fee equal to $3,500, (i) the Assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment
and Acceptance, shall have the assigned and delegated rights and obligations of Lender under the
Loan Documents, and (ii) assigning Lender shall, to the extent that rights and obligations
hereunder and under the other Loan Documents have been assigned and delegated by it pursuant to
such Assignment and Acceptance, relinquish its rights (except with respect to Section 11.3
hereof) and be released from its obligations under this Agreement (and in the case of an Assignment
and Acceptance covering all or the remaining portion of such Lender’s rights and obligations under
this Agreement and the other Loan Documents, such Lender shall cease to be a party hereto and
thereto), and such assignment shall affect a novation between Borrowers and the Assignee.

(c) Immediately upon Agent’s receipt of the required processing fee payment (unless
the payment of such fee has been waived by Agent] and such fully executed Assignment and
Acceptance, this Agreement shall be deemed to be amended to the extent, but only to the extent,
necessary to reflect the addition of the Assignee and the resulting adjustment of the rights and
duties of Lender arising therefrom.

(d) Any Lender may at any time sell to one or more commercial banks, financial
institutions, or other Persons not Affiliates of Lender (a “Participant”) participating
interests in Obligations and the other rights and interests of that Lender (the “Originating
Lender”) hereunder and under the other Loan Documents; provided, however, that
(i) that Lender shall remain the “Lender” for all purposes of this Agreement and the other Loan
Documents and the Participant receiving the participating interest in the Obligations and the other
rights and interests of the Originating Lender hereunder shall not constitute a “Lender” hereunder
or under the other Loan Documents and the Originating Lender’s obligations under this Agreement
shall remain unchanged, (ii) the Originating Lender shall remain solely responsible for the
performance of such obligations, (iii) Borrowers, Agent and the Lenders shall continue to deal
solely and directly with the Originating Lender in connection with the Originating Lender’s rights
and obligations under this Agreement and the other Loan Documents, (iv) the Originating Lender
shall not transfer or grant any participating interest under which the Participant has the right to
approve any amendment to, or any consent or waiver with respect to, this Agreement or any other
Loan Document, except to the extent such amendment to, or consent or waiver with respect to this
Agreement or of any other Loan Document would (A) extend the final maturity date of the Obligations
hereunder in which such Participant is participating, (B) reduce the interest rate applicable to
the Obligations hereunder in which such Participant is participating, (C) release all or a material
portion of the Collateral or guaranties (except to the extent expressly provided herein or in any
of the Loan Documents) supporting the Obligations hereunder in which such Participant is
participating, (D) postpone the payment of, or reduce the amount of, the interest or fees payable
to such Participant through Lender, or (E) change the amount or due dates of Scheduled principal
repayments or prepayments or premiums, and (v) all amounts payable by Borrowers hereunder shall be
determined as if the Originating Lender had not sold such participation, except that, if amounts
outstanding under this Agreement are due and unpaid, or shall have been declared or shall have
become due and payable upon the occurrence of an Event of Default, each Participant shall be deemed
to have the right of set-off in respect of its participating interest in amounts owing under this
Agreement to the same extent as if the amount of its participating interest were owing directly to
it as a Lender under this Agreement. The rights of any Participant only shall be derivative
through the Originating Lender and no Participant shall have any rights under this Agreement or the
other Loan Documents or any direct rights as to Agent, Borrowers, the Collections, the Collateral,
or otherwise in respect of the Obligations. No Participant shall have the right to participate
directly in the making of decisions by Lenders among themselves.

(e) In connection with any such assignment or participation or proposed assignment
or participation, a Lender may disclose all documents and information which it now or hereafter may
have relating to Borrowers or Borrowers’ business.

(f) Any other provision in this Agreement notwithstanding, any Lender may at any
time create a security interest in, or pledge, all or any portion of its rights under and interest
in this Agreement in favor of any Federal Reserve Bank in accordance with Regulation A of the
Federal Reserve Bank or U.S. Treasury Regulation 31 CFR §203.14, and such Federal Reserve Bank may
enforce such pledge or security interest in any manner permitted under applicable law.

14.2 Successors. This Agreement shall bind and inure to the benefit of the
respective successors and assigns of each of the parties; provided, however, that
Borrowers may not assign this Agreement or any rights or duties hereunder without the Lenders’
prior written consent and any prohibited assignment shall be absolutely void ab initio. No consent
to assignment by the Lenders shall release any Borrower from its Obligations. A Lender may assign
this Agreement and the other Loan Documents and its rights and duties hereunder and thereunder
pursuant to Section 14.1 hereof and, except as expressly required pursuant to Section
14.1 hereof, no consent or approval by any Borrower is required in connection with any such
assignment.

15. AMENDMENTS; WAIVERS.

15.1 Amendments and Waivers. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent with respect to any departure by
Borrowers therefrom, shall be effective unless the same shall be in writing and signed by the
Required Lenders (or by Agent at the written request of the Required Lenders) and Administrative
Borrower (on behalf of all Borrowers) and then any such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given; provided,
however, that no such waiver, amendment, or consent shall, unless in writing and signed by
all of the Lenders affected thereby and Administrative Borrower (on behalf of all Borrowers), do
any of the following:

(a) increase or extend any Commitment of any Lender;

(b) postpone or delay any date fixed by this Agreement or any other Loan Document
for any payment of principal, interest, fees, or other amounts due hereunder or under any other
Loan Document;

(c) reduce the principal of, or the rate of interest on, any loan or other extension
of credit hereunder, or reduce any fees or other amounts payable hereunder or under any other Loan
Document;

(d) change the Pro Rata Share that is required to take any action hereunder;

(e) amend, modify or waive this Section or any provision of the Agreement providing
for consent or other action by all Lenders;

(f) other than as permitted by Section 16.12, release Agent’s Lien in and to
any of the Collateral;

(g) change the definition of “Required Lenders” or “Pro Rata Share;”

(h) contractually subordinate any of the Agent’s Liens;

(i) release any Borrower or Guarantor from any obligation for the payment of money;

(j) change the definition of “Borrowing Base” or the definitions of “Eligible
Accounts”, “Eligible Inventory”, “Maximum Revolver Amount”, or change Section 2.1(b); or

(k) amend any of the provisions of Section 16;

and, provided further, however, that no amendment, waiver or consent shall, unless
in writing and signed by Agent, Issuing Lender, or Swing Lender, as applicable, affect the rights
or duties of Agent, Issuing Lender, or Swing Lender, as applicable, under this Agreement or any
other Loan Document. The foregoing notwithstanding, any amendment, modification, waiver, consent,
termination, or release of, or with respect to, any provision of this Agreement or any other Loan
Document that relates only to the relationship of the Lender Group among themselves, and that does
not affect the rights or obligations of Borrower, shall not require consent by or the agreement of
Borrower.

15.2 Replacement of Holdout Lender.

(a) If any action to be taken by the Lender Group or Agent hereunder requires the
unanimous consent, authorization, or agreement of all Lenders, and a Lender (“Holdout
Lender”) fails to give its consent, authorization, or agreement, then Agent, upon at least 5
Business Days prior irrevocable notice to the Holdout Lender, may permanently replace the Holdout
Lender with one or more substitute Lenders (each, a “Replacement Lender”), and the Holdout
Lender shall have no right to refuse to be replaced hereunder. Such notice to replace the Holdout
Lender shall specify an effective date for such replacement, which date shall not be later than 15
Business Days after the date such notice is given.

(b) Prior to the effective date of such replacement, the Holdout Lender and each
Replacement Lender shall execute and deliver an Assignment and Acceptance, subject only to the
Holdout Lender being repaid its share of the outstanding Obligations (including an assumption of
its Pro Rata Share of the Risk Participation Liability) without any premium or penalty of any kind
whatsoever. If the Holdout Lender shall refuse or fail to execute and deliver any such Assignment
and Acceptance prior to the effective date of such replacement, the Holdout Lender shall be deemed
to have executed and delivered such Assignment and Acceptance. The replacement of any Holdout
Lender shall be made in accordance with the terms of Section 14.1. Until such time as the
Replacement Lenders shall have acquired all of the Obligations, the Commitments, and the other
rights and obligations of the Holdout Lender hereunder and under the other Loan Documents, the
Holdout Lender shall remain obligated to make the Holdout Lender’s Pro Rata Share of Advances and
to purchase a participation in each Letter of Credit, in an amount equal to its Pro Rata Share of
the Risk Participation Liability of such Letter of Credit.

15.3 No Waivers; Cumulative Remedies. No failure by Agent or any Lender to
exercise any right, remedy, or option under this Agreement or, any other Loan Document, or delay by
Agent or any Lender in exercising the same, will operate as a waiver thereof. No waiver by Agent
or any Lender will be effective unless it is in writing, and then only to the extent specifically
stated. No waiver by Agent or any Lender on any occasion shall affect or diminish the Lender
Group’s rights thereafter to require strict performance by Borrowers of any provision of this
Agreement. The Lender Group’s rights under this Agreement and the other Loan Documents will be
cumulative and not exclusive of any other right or remedy that the Lender Group may have.

16. AGENT; THE LENDER GROUP.

16.1 Appointment and Authorization of Agent. Lenders hereby designate and
appoints Foothill as their representative under this Agreement and the other Loan Documents and
Lenders hereby irrevocably authorize Agent to execute and deliver each of the other Loan Documents
on their behalf and to take such other action on its behalf under the provisions of this Agreement
and each other Loan Document and to exercise such powers and perform such duties as are expressly
delegated to Agent by the terms of this Agreement or any other Loan Document, together with such
powers as are reasonably incidental thereto. Agent agrees to act as such on the express conditions
contained in this Section 16. The provisions of this Section 16 are solely for the
benefit of Agent, and the Lenders, and Borrowers and their Subsidiaries shall have no rights as a
third party beneficiary of any of the provisions contained herein. Any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document notwithstanding, Agent shall
not have any duties or responsibilities, except those expressly set forth herein, nor shall Agent
have or be deemed to have any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement
or any other Loan Document or otherwise exist against Agent; it being expressly understood and
agreed that the use of the word “Agent” is for convenience only, that Foothill is merely the
representative of the Lenders, and only has the contractual duties set forth herein. Except as
expressly otherwise provided in this Agreement, Agent shall have and may use its sole discretion
with respect to exercising or refraining from exercising any discretionary rights or taking or
refraining from taking any actions that Agent expressly is entitled to take or assert under or
pursuant to this Agreement and the other Loan Documents. Without limiting the generality of the
foregoing, or of any other provision of the Loan Documents that provides rights or powers to Agent,
the Lenders agree that Agent shall have the right to exercise the following powers as long as this
Agreement remains in effect: (a) maintain, in accordance with its customary business practices,
ledgers and records reflecting the status of the Obligations, the Collateral, the Collections of
Borrowers and their Subsidiaries, and related matters, (b) execute or file any and all financing or
similar statements or notices, amendments, renewals, supplements, documents, instruments, proofs of
claim, notices and other written agreements with respect to the Loan Documents, (c) make Advances,
for itself or on behalf of the Lenders as provided in the Loan Documents, (d) exclusively receive,
apply, and distribute the Collections of Borrowers and their Subsidiaries as provided in the Loan
Documents, (e) open and maintain such bank accounts and cash management arrangements as Agent deems
necessary and appropriate in accordance with the Loan Documents for the foregoing purposes with
respect to the Collateral and the Collections of Borrowers and their Subsidiaries, (f) perform,
exercise, and enforce any and all other rights and remedies of the Lender Group with respect to
Borrowers, the Obligations, the Collateral, the Collections of Borrowers and their Subsidiaries, or
otherwise related to any of same as provided in the Loan Documents, and (g) incur and pay such
Lender Group Expenses as Agent may deem necessary or appropriate for the performance and
fulfillment of its functions and powers pursuant to the Loan Documents.

16.2 Delegation of Duties. Agent may execute any of its duties under this
Agreement or any other Loan Document by or through agents, employees or attorneys in fact and shall
be entitled to advice of counsel concerning all matters pertaining to such duties. Agent shall not
be responsible for the negligence or misconduct of any agent or attorney in fact that it selects as
long as such selection was made without gross negligence or willful misconduct.

16.3 Liability of Agent. None of the Agent Related Persons shall (a) be
liable for any action taken or omitted to be taken by any of them under or in connection with this
Agreement or any other Loan Document or the transactions contemplated hereby (except for its own
gross negligence or willful misconduct), or (b) be responsible in any manner to the Lenders for any
recital, statement, representation or warranty made by any Borrower or any Subsidiary or Affiliate
of any Borrower, or any officer or director thereof, contained in this Agreement or in any other
Loan Document, or in any certificate, report, statement or other document referred to or provided
for in, or received by Agent under or in connection with, this Agreement or any other Loan
Document, or the validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document, or for any failure of any Borrower or any other party to any
Loan Document to perform its obligations hereunder or thereunder. No Agent-Related Person shall be
under any obligation to the Lenders to ascertain or to inquire as to the observance or performance
of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document,
or to inspect the Books or properties of Borrowers or the books or records or properties of any of
Borrowers’ Subsidiaries or Affiliates.

16.4 Reliance by Agent. Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent, certificate, affidavit,
letter, telegram, telefacsimile or other electronic method of transmission, telex or telephone
message, statement or other document or conversation believed by it to be genuine and correct and
to have been signed, sent, or made by the proper Person or Persons, and upon advice and statements
of legal counsel (including counsel to Borrowers or counsel to any Lender), independent accountants
and other experts selected by Agent. Agent shall be fully justified in failing or refusing to take
any action under this Agreement or any other Loan Document unless Agent shall first receive such
advice or concurrence of the Lenders as they deem appropriate and until such instructions are
received, Agent shall act, or refrain from acting, as it deems advisable. If Agent so requests, it
shall first be indemnified to its reasonable satisfaction by the Lenders against any and all
liability and expense that may be incurred by it by reason of taking or continuing to take any such
action. Agent shall in all cases be fully protected in acting, or in refraining from acting, under
this Agreement or any other Loan Document in accordance with a request or consent of the Lenders
and such request and any action taken or failure to act pursuant thereto shall be binding upon the
Lenders.

16.5 Notice of Default or Event of Default. Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default, except with respect
to defaults in the payment of principal, interest, fees, and expenses required to be paid to Agent
for the account of the Lenders and, except with respect to Events of Default of which Agent has
actual knowledge, unless Agent shall have received written notice from the Lenders or
Administrative Borrower referring to this Agreement, describing such Default or Event of Default,
and stating that such notice is a “notice of default.” Agent promptly will notify the Lenders of
its receipt of any such notice or of any Event of Default of which Agent has actual knowledge. If
any Lender obtains actual knowledge of any Event of Default, such Lender promptly shall notify
Agent of such Event of Default. A Lender shall be solely responsible for giving any notices to its
Participants, if any. Subject to Section 16.4, Agent shall take such action with respect
to such Default or Event of Default as may be requested by the Lenders in accordance with
Section 9; provided, however, that unless and until Agent has received any
such request, Agent may (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Default or Event of Default as it shall deem advisable.

16.6 Credit Decision. The Lenders acknowledge that none of the Agent
Related Persons has made any representation or warranty to it, and that no act by Agent hereinafter
taken, including any review of the affairs of Borrowers and their Subsidiaries or Affiliates, shall
be deemed to constitute any representation or warranty by any Agent-Related Person to the Lenders.
Each Lender represents to Agent that it has, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business, prospects, operations, property,
financial and other condition and creditworthiness of Borrowers and any other Person party to a
Loan Document, and all applicable bank regulatory laws relating to the transactions contemplated
hereby, and made its own decision to enter into this Agreement and to extend credit to Borrowers.
Each Lender also represents that it will, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such investigations as it deems
necessary to inform itself as to the business, prospects, operations, property, financial and other
condition and creditworthiness of Borrowers and any other Person party to a Loan Document. Except
for notices, reports, and other documents expressly herein required to be furnished to the Lenders
by Agent, Agent shall not have any duty or responsibility to provide the Lenders with any credit or
other information concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of Borrowers and any other Person party to a Loan Document that may
come into the possession of any of the Agent-Related Persons.

16.7 Costs and Expenses; Indemnification. Agent may incur and pay Lender
Group Expenses to the extent Agent reasonably deems necessary or appropriate for the performance
and fulfillment of its functions, powers, and obligations pursuant to the Loan Documents, including
court costs, attorneys fees and expenses, fees and expenses of financial accountants, advisors,
consultants, and appraisers, costs of collection by outside collection agencies, auctioneer fees
and expenses, and costs of security guards or insurance premiums paid to maintain the Collateral,
whether or not Borrowers are obligated to reimburse Agent or Lenders for such expenses pursuant to
this Agreement or otherwise. Agent is authorized and directed to deduct and retain sufficient
amounts from the Collections of Borrowers and their Subsidiaries received by Agent to reimburse
Agent for such out-of-pocket costs and expenses prior to the distribution of any amounts to the
Lenders. In the event Agent is not reimbursed for such costs and expenses from the Collections of
Borrowers and their Subsidiaries received by Agent, the Lenders hereby agree that they are and
shall be obligated to pay to or reimburse Agent therefor. Whether or not the transactions
contemplated hereby are consummated, the Lenders shall indemnify upon demand the Agent Related
Persons (to the extent not reimbursed by or on behalf of Borrowers and without limiting the
obligation of Borrowers to do so), according to their Pro Rata Shares, from and against any and all
Indemnified Liabilities; provided, however, that the Lenders shall not be liable
for the payment to any Agent-Related Person of any portion of such Indemnified Liabilities
resulting solely from such Person’s gross negligence or willful misconduct. Without limitation of
the foregoing, the Lenders shall reimburse Agent upon demand for any costs or out of pocket
expenses (including attorneys, accountants, advisors, and consultants fees and expenses) incurred
by Agent in connection with the preparation, execution, delivery, administration, modification,
amendment, or enforcement (whether through negotiations, legal proceedings or otherwise) of, or
legal advice in respect of rights or responsibilities under, this Agreement, any other Loan
Document, or any document contemplated by or referred to herein, to the extent that Agent is not
reimbursed for such expenses by or on behalf of Borrowers. The undertaking in this Section shall
survive the payment of all Obligations hereunder and the resignation or replacement of Agent.

16.8 Agent in Individual Capacity. Foothill and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from, acquire equity
interests in, and generally engage in any kind of banking, trust, financial advisory, underwriting,
or other business with Borrowers and their Subsidiaries and Affiliates and any other Person party
to any Loan Documents as though Foothill were not Agent hereunder, and, in each case, without
notice to or consent of any Lender. Each Lender acknowledges that, pursuant to such activities,
Foothill or its Affiliates may receive information regarding Borrowers or their Affiliates and any
other Person party to any Loan Documents that is subject to confidentiality obligations in favor of
Borrowers or such other Person and that prohibit the disclosure of such information to the Lenders,
and each Lender acknowledges that, in such circumstances (and in the absence of a waiver of such
confidentiality obligations, which waiver Agent will use its reasonable best efforts to obtain),
Agent shall not be under any obligation to provide such information to them.

16.9 Successor Agent. Agent may resign as Agent upon 45 days notice to the
Lenders. If Agent resigns under this Agreement, the Required Lenders shall appoint a successor
Agent for the Lenders. If no successor Agent is appointed prior to the effective date of the
resignation of Agent, Agent may appoint, after consulting with the Required Lenders, a successor
Agent. If Agent has materially breached or failed to perform any material provision of this
Agreement or of applicable law, the Lenders may remove and replace Agent with a successor Agent.
In any such event, upon the acceptance of its appointment as successor Agent hereunder, such
successor Agent shall succeed to all the rights, powers, and duties of the retiring Agent and the
term “Agent” shall mean such successor Agent and the retiring Agent’s appointment, powers, and
duties as Agent shall be terminated. After any retiring Agent’s resignation hereunder as Agent,
the provisions of this Section 16 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent under this Agreement. If no successor Agent has accepted
appointment as Agent by the date which is 45 days following a retiring Agent’s notice of
resignation, the retiring Agent’s resignation shall nevertheless thereupon become effective and the
Lenders shall perform all of the duties of Agent hereunder until such time, if any, as the Required
Lenders appoint a successor Agent as provided for above.

16.10 Agency for Perfection. Agent hereby appoints each other Lender as its
agent (and each Lender hereby accepts such appointment) for the purpose of perfecting the Agent’s
Liens in assets which, in accordance with Article 8 or Article 9, as applicable, of the Code can be
perfected only by possession or control. Should any Lender obtain possession or control of any
such Collateral, such Lender shall notify Agent thereof, and, promptly upon Agent’s request
therefor shall deliver possession or control of such Collateral to Agent or in accordance with
Agent’s instructions.

16.11 Payments by Agent to the Lenders. All payments to be made by Agent to
the Lenders shall be made by bank wire transfer of immediately available funds pursuant to such
wire transfer instructions as each party may designate for itself by written notice to Agent.
Concurrently with each such payment, Agent shall identify whether such payment (or any portion
thereof) represents principal, premium, fees, or interest of the Obligations.

16.12 Concerning the Collateral and Related Loan Documents. Each member of
the Lender Group authorizes and directs Agent to enter into this Agreement and the other Loan
Documents. Each member of the Lender Group agrees that any action taken by Agent in accordance
with the terms of this Agreement or the other Loan Documents relating to the Collateral and the
exercise by Agent of its powers set forth therein or herein, together with such other powers that
are reasonably incidental thereto, shall be binding upon all of Lender.

16.13 Several Obligations; No Liability. Notwithstanding that certain of
the Loan Documents now or hereafter may have been or will be executed only by or in favor of Agent
in its capacity as such, and not by or in favor of Lender, any and all obligations on the part of
Agent (if any) to make any credit available hereunder shall constitute the several (and not joint)
obligations of Lender.

17. GENERAL PROVISIONS.

17.1 Effectiveness. This Agreement shall be binding and deemed effective
when executed by Borrowers, Agent and each Lender whose signature is provided for on the signature
pages hereof.

17.2 Section Headings. Headings and numbers have been set forth herein for
convenience only. Unless the contrary is compelled by the context, everything contained in each
Section applies equally to this entire Agreement.

17.3 Interpretation. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed against the Lender Group or Borrowers, whether under any rule
of construction or otherwise. On the contrary, this Agreement has been reviewed by all parties and
shall be construed and interpreted according to the ordinary meaning of the words used so as to
accomplish fairly the purposes and intentions of all parties hereto.

17.4 Severability of Provisions. Each provision of this Agreement shall be
severable from every other provision of this Agreement for the purpose of determining the legal
enforceability of any specific provision.

17.5 Withholding Taxes. All payments made by Borrowers hereunder or under
any note will be made without setoff, counterclaim, or other defense, except as required by
applicable law other than for Taxes (as defined below). All such payments will be made free and
clear of, and without deduction or withholding for, any present or future taxes, levies, imposts,
duties, fees, assessments or other charges of whatever nature now or hereafter imposed by any
jurisdiction (other than the United States) or by any political subdivision or taxing authority
thereof or therein (other than of the United States) with respect to such payments (but excluding,
any tax imposed by any jurisdiction or by any political subdivision or taxing authority thereof or
therein (i) measured by or based on the net income or net profits of Lender, or (ii) to the extent
that such tax results from a change in the circumstances of a Lender, including a change in the
residence, place of organization, or principal place of business of such Lender, or a change in the
branch or lending office of such Lender participating in the transactions set forth herein) and all
interest, penalties or similar liabilities with respect thereto (all such non-excluded taxes,
levies, imposts, duties, fees, assessments or other charges being referred to collectively as
"Taxes”). If any Taxes are so levied or imposed, each Borrower agrees to pay the full
amount of such Taxes, and such additional amounts as may be necessary so that every payment of all
amounts due under this Agreement or under any note, including any amount paid pursuant to this
Section 17.5 after withholding or deduction for or on account of any Taxes, will not be
less than the amount provided for herein; provided, however, that Borrowers shall
not be required to increase any such amounts payable to Agent for the benefit of the Lender Group
if the increase in such amount payable results from Agent’s or a Lender’s own willful misconduct or
gross negligence. Borrowers will furnish to the Lender Group as promptly as possible after the
date the payment of any Taxes is due pursuant to applicable law certified copies of tax receipts
evidencing such payment by Borrowers.

17.6 Amendments in Writing. This Agreement only can be amended by a writing
signed by Agent, the Required Lenders and each Borrower.

17.7 Counterparts; Telefacsimile Execution. This Agreement may be executed
in any number of counterparts and by different parties on separate counterparts, each of which,
when executed and delivered, shall be deemed to be an original, and all of which, when taken
together, shall constitute but one and the same Agreement. Delivery of an executed counterpart of
this Agreement by telefacsimile shall be equally as effective as delivery of an original executed
counterpart of this Agreement. Any party delivering an executed counterpart of this Agreement by
telefacsimile also shall deliver an original executed counterpart of this Agreement but the failure
to deliver an original executed counterpart shall not affect the validity, enforceability, and
binding effect of this Agreement. The foregoing shall apply to each other Loan Document mutatis
mutandis.

17.8 Revival and Reinstatement of Obligations. If the incurrence or payment
of the Obligations by any Borrower or any Guarantor or the transfer to the Lender Group of any
property should for any reason subsequently be declared to be void or voidable under any state or
federal law relating to creditors’ rights, including provisions of the Bankruptcy Code relating to
fraudulent conveyances, preferences, or other voidable or recoverable payments of money or
transfers of property (collectively, a “Voidable Transfer”), and if the Lender Group is
required to repay or restore, in whole or in part, any such Voidable Transfer, or elects to do so
upon the reasonable advice of its counsel, then, as to any such Voidable Transfer, or the amount
thereof that the Lender Group is required or elects to repay or restore, and as to all reasonable
costs, expenses, and attorneys fees of the Lender Group related thereto, the liability of Borrowers
or Guarantors automatically shall be revived, reinstated, and restored and shall exist as though
such Voidable Transfer had never been made.

17.9 Integration. This Agreement, together with the other Loan Documents,
reflects the entire understanding of the parties with respect to the transactions contemplated
hereby and shall not be contradicted or qualified by any other agreement, oral or written, before
the date hereof.

17.10 Parent as Agent for Borrowers. Each Borrower hereby irrevocably
appoints Parent as the borrowing agent and attorney-in-fact for all Borrowers (the
"Administrative Borrower”) which appointment shall remain in full force and effect unless
and until Agent shall have received prior written notice signed by each Borrower that such
appointment has been revoked and that another Borrower has been appointed Administrative Borrower.
Each Borrower hereby irrevocably appoints and authorizes the Administrative Borrower (i) to provide
Agent with all notices with respect to Advances and Letters of Credit obtained for the benefit of
any Borrower and all other notices and instructions under this Agreement and (ii) to take such
action as the Administrative Borrower deems appropriate on its behalf to obtain Advances and
Letters of Credit and to exercise such other powers as are reasonably incidental thereto to carry
out the purposes of this Agreement. It is understood that the handling of the Loan Account and
Collateral of Borrowers in a combined fashion, as more fully set forth herein, is done solely as an
accommodation to Borrowers in order to utilize the collective borrowing powers of Borrowers in the
most efficient and economical manner and at their request, and that Lender shall not incur
liability to any Borrower as a result hereof. Each Borrower expects to derive benefit, directly or
indirectly, from the handling of the Loan Account and the Collateral in a combined fashion since
the successful operation of each Borrower is dependent on the continued successful performance of
the integrated group. To induce the Lender Group to do so, and in consideration thereof, each
Borrower hereby jointly and severally agrees to indemnify each member of the Lender Group harmless
against any and all liability, expense, loss or claim of damage or injury, made against the Lender
Group by any Borrower or by any third party whosoever, arising from or incurred by reason of (a)
the handling of the Loan Account and Collateral of Borrowers as herein provided, (b) the Lender
Group’s relying on any instructions of the Administrative Borrower, or (c) any other action taken
by the Lender Group hereunder or under the other Loan Documents, except that Borrowers will have no
liability to the relevant Agent Related Person or Lender-Related Person under this Section
17.10 with respect to any liability that has been finally determined by a court of competent
jurisdiction to have resulted solely from the gross negligence or willful misconduct of such Agent
Related Person or Lender-Related Person, as the case may be.

17.11 No Novation. This Agreement constitutes an amendment and restatement
of the Existing Loan Agreement and does not extinguish the obligations for the payment of money
outstanding under the Existing Loan Agreement or discharge or release the Obligations (including
the Obligations of any predecessor corporations) under, and as defined in, the Existing Loan
Agreement or the Lien or priority of any mortgage, pledge, security agreement or any other security
therefor. Nothing herein contained shall be construed as a substitution or novation of the
Obligations outstanding under, and as defined in, the Existing Loan Agreement or instruments
securing the same, which shall remain in full force and effect, except as modified hereby or by
instruments or documents executed concurrently herewith. Nothing expressed or implied in this
Agreement shall be construed as a release or other discharge of any Loan Party under the Existing
Loan Agreement from any of its obligations and liabilities as a “Borrower” or “Guarantor”
thereunder. Each Loan Party hereby (i) confirms and agrees that each Loan Document to which it is
a party is, and shall continue to be, in full force and effect, as modified by this amendment and
restatement and instruments or documents executed concurrently herewith, and is hereby ratified and
confirmed in all respects except that on and after the Closing Date all references in any such Loan
Document to “the Loan Agreement,” “thereto,” “thereof,” “thereunder” or words of like import
referring to the Existing Loan Agreement shall mean the Existing Loan Agreement as amended and
restated by this Agreement and (ii) confirms and agrees that to the extent that any such Loan
Document purports to assign or pledge to the Agent a security interest in or Lien on, any
collateral as security for the obligations of the Borrowers or the Guarantors from time to time
existing in respect of the Existing Loan Agreement and the Loan Documents, such pledge, assignment
and/or grant of the security interest or lien is hereby ratified and confirmed in all respects.

[Signature page to follow.]

2

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

BORROWERS:

	 
	METALICO, INC.,
a Delaware corporation
By: _____________________________
Name:

	Title
METALICO AKRON, INC.,
an Ohio corporation
By: _____________________________
Name:

	Title
METALICO AKRON REALTY, INC.,
an Ohio corporation
By: _____________________________
Name:

	Title
METALICO ALABAMA REALTY, INC.,
an Alabama corporation
By: _____________________________
Name:

	Title
METALICO ALUMINUM RECOVER, INC.,
a New York corporation
By: _____________________________
Name:

	Title
METALICO BUFFALO, INC.,
a New York corporation
By: _____________________________
Name:

	Title
METALICO-COLLEGE GROVE, INC.,
a Tennessee corporation
By: _____________________________
Name:

	Title
METALICO-GRANITE CITY, INC.,
an Illinois corporation
By: _____________________________
Name:

	Title
METALICO NIAGARA, INC.,
a New York corporation
By: _____________________________
Name:

	Title
METALICO ROCHESTER, INC.,
a New York corporation
By: _____________________________
Name:

	Title
METALICO SYRACUSE, INC.,
a New York corporation
By: _____________________________
Name:

	Title
METALICO SYRACUSE REALTY, INC.,
a New York corporation
By: _____________________________
Name:

	Title
METALICO TRANSFER, INC.,
a New York corporation
By: _____________________________
Name:

	Title
METALICO TRANSFER REALTY, INC.,
a New York corporation
By: _____________________________
Name:

	Title
METALICO TRANSPORT, INC.,
a New York corporation
By: _____________________________
Name:

	Title
GULF COAST RECYCLING, INC.,
a Florida corporation
By: _____________________________
Name:

	Title
MAYCO INDUSTRIES, INC.,
an Alabama corporation
By: _____________________________
Name:

	Title
SANTA ROSA LEAD PRODUCTS, INC.,
a California corporation
By: _____________________________
Name:

	Title
TRANZACT CORPORATION,
a Delaware corporation
By: _____________________________
Name:

	Title
WEST COAST SHOT, INC.,
a Nevada corporation
By: _____________________________
Name:

	Title
Elizabeth Hazel LLC,
an Ohio limited liability company
By: _____________________________
Name:

	Title
Melinda Hazel LLC,
an Ohio limited liability company
By: _____________________________
Name:

	Title
AGENT AND LENDER:

	 

	WELLS FARGO FOOTHILL, INC.
a California corporation, as Agent and as Lender
By: _____________________________
Name:

	Title

3

EXHIBITS AND SCHEDULES

	 	 	 
	Exhibit A-1

Exhibit B-1

Exhibit C-1

Exhibit L-1

Schedule C-1

Schedule E-1

Schedule F-1

Schedule M-1

Schedule M-2

Schedule P-1

Schedule P-2

Schedule R-1

Schedule 2.7(a)

Schedule 2.12(g)

Schedule 5.5

Schedule 5.7

Schedule 5.8(b)

Schedule 5.8(c)

Schedule 5.10

Schedule 5.13

Schedule 5.14

Schedule 5.16

Schedule 5.18

Schedule 5.20

Schedule 5.24

	 	Form of Assignment and Acceptance

Form of Borrowing Base Certificate

Form of Compliance Certificate

Form of LIBOR Notice

Commitments

Eligible Inventory Locations

Facility locations

Modifications of Mortgages (locations)

Mortgages (locations)

Permitted Liens

Permitted Liens (Real Property)

Real Property Collateral

Cash Management Banks

Existing Letters of Credit

Locations of Inventory and Equipment

Jurisdiction of Incorporation, Chief Executive Office and FEIN;

Organizational ID Number

Capitalization of Loan Parties

Capitalization of Loan Parties’ Subsidiaries

Litigation

Benefit Plans

Environmental Matters

Intellectual Property

Demand Deposit Accounts

Indebtedness

Material Contracts

4

Schedule 5.27 Real PropertySchedule C-1

Lenders and Lenders’ Commitments

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Revolver	 	Term Loan A	 	Term Loan B	 	Term Loan C	 	Total
	Lender
	 	Commitment	 	Commitment	 	Commitment	 	Commitment	 	Commitment
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Wells Fargo
Foothill, Inc.
	 	$	63,000,000	 	 	$	8,000,000	 	 	$	2,000,000	 	 	$	12,000,000	 	 	$	85,000,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total
	 	$	63,000,000	 	 	$	8,000,000	 	 	$	2,000,000	 	 	$	12,000,000	 	 	$	85,000,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

5

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