Document:

ex10_3.htm

 

    
      

    

    EXECUTION
VERSION

    

    

    

    
      

    

    

     

    AMENDED
AND RESTATED

     

     

    CREDIT
AGREEMENT

     

     

    dated
as of January 30, 2009

     

    among

    

    TITAN
INTERNATIONAL, INC.,

    as
the Company

    

    THE
FINANCIAL INSTITUTIONS PARTY HERETO,

    as
Lenders,

    

    

    BANK
OF AMERICA, N.A.,

    as
Administrative Agent,

    and

    Issuing
Lender,

    

    WELLS
FARGO BANK, N.A.,

    as
Syndication Agent,

    

    THE
PRIVATEBANK AND TRUST COMPANY,

    as
Documentation Agent

    

    and

    

    BANC
OF AMERICA SECURITIES, LLC

    as
Lead Arranger

    

    

    

    
      
        
          
            	 
      	 
      	 
      

          

          

          

           

          

        

         

      

      
         

        
          

        

      

      
         

      

    

    
 

    
      
        	
                SECTION
      1 DEFINITIONS.

              	
                2

              
	
                1.1 Definitions

              	
                2

              
	
                1.2 Other Interpretive
      Provisions

              	
                24

              
	
                SECTION
      2 COMMITMENTS OF THE LENDERS; BORROWING, CONVERSION AND LETTER OF CREDIT
      PROCEDURES.

              	
                25

              
	
                2.1 Commitments

              	
                25

              
	
                2.1.1 Revolving
      Commitment

              	
                25

              
	
                2.1.2 Increase in
      Commitments.

              	
                25

              
	
                2.1.3 L/C
    Commitment

              	
                27

              
	
                2.2 Loan
    Procedures.

              	
                27

              
	
                2.2.1 Various Types of
      Loans

              	
                27

              
	
                2.2.2 Borrowing
      Procedures

              	
                27

              
	
                2.2.3 Conversion and Continuation
      Procedures

              	
                28

              
	
                2.3 Letter of Credit
      Procedures.

              	
                29

              
	
                2.3.1 L/C
      Applications

              	
                29

              
	
                2.3.2 Participations in Letters
      of Credit

              	
                30

              
	
                2.3.3 Reimbursement
      Obligations

              	
                30

              
	
                2.3.4 Funding by Lenders to
      Issuing Lender

              	
                31

              
	
                2.3.5 Existing Letters of
      Credit

              	
                32

              
	
                2.4 Letter of Credit
      Amounts

              	
                32

              
	
                2.5 Commitments
      Several

              	
                32

              
	
                2.6 Certain
      Conditions

              	
                32

              
	
                SECTION
      3 EVIDENCING OF LOANS.

              	
                32

              
	
                3.1 Notes

              	
                32

              
	
                3.2 Recordkeeping

              	
                32

              
	
                SECTION
      4 INTEREST.

              	
                33

              
	
                4.1 Interest
Rates

              	
                33

              
	
                4.2 Interest Payment
      Dates

              	
                33

              
	
                4.3 Setting and Notice of LIBOR
      Rates

              	
                33

              
	
                4.4 Computation of
      Interest

              	
                34

              
	
                4.5 Interest under Existing
      Credit Agreement

              	
                34

              
	
                SECTION
      5 FEES.

              	
                34

              
	
                5.1 Non-Use Fee

              	
                34

              
	
                5.2 Letter of Credit
      Fees

              	
                34

              
	
                5.3 Administrative Agent’s and
      Lenders’ Fees

              	
                35

              
	
                5.4 Fees, Charges and Expenses
      under Existing Credit Agreement

              	
                35

              

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      
        	
                SECTION
      6 REDUCTION OR TERMINATION OF THE REVOLVING COMMITMENT;
      PREPAYMENTS.

              	
                35

              
	
                6.1 Reduction or Termination of
      the Revolving Commitment.

              	
                35

              
	
                6.1.1 Voluntary Reduction or
      Termination of the Revolving Commitment

              	
                35

              
	
                6.1.2 Mandatory Reductions of
      Revolving Commitment

              	
                35

              
	
                6.1.3 All Reductions of the
      Revolving Commitment

              	
                36

              
	
                6.2 Prepayments.

              	
                36

              
	
                6.2.1 Voluntary
      Prepayments

              	
                36

              
	
                6.3 Manner of
      Prepayments

              	
                37

              
	
                6.3.1 All
    Prepayments

              	
                37

              
	
                6.4 Repayments.

              	
                37

              
	
                6.4.1 Revolving
    Loans

              	
                37

              
	
                SECTION
      7 MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES.

              	
                37

              
	
                7.1 Making of
      Payments

              	
                37

              
	
                7.2 Application of Certain
      Payments

              	
                38

              
	
                7.3 Due Date
      Extension

              	
                38

              
	
                7.4 Setoff

              	
                38

              
	
                7.5 Proration of
      Payments

              	
                38

              
	
                7.6 Taxes.

              	
                39

              
	
                SECTION
      8 INCREASED COSTS; SPECIAL PROVISIONS FOR LIBOR LOANS.

              	
                41

              
	
                8.1 Increased
    Costs

              	
                41

              
	
                8.2 Basis for Determining
      Interest Rate Inadequate or Unfair

              	
                42

              
	
                8.3 Changes in Law Rendering
      LIBOR Loans Unlawful

              	
                42

              
	
                8.4 Funding
Losses

              	
                43

              
	
                8.5 Right of Lenders to Fund
      through Other Offices

              	
                43

              
	
                8.6 Discretion of Lenders as to
      Manner of Funding

              	
                44

              
	
                8.7 Mitigation of Circumstances;
      Replacement of Lenders

              	
                44

              
	
                8.8 Conclusiveness of Statements;
      Survival of Provisions

              	
                44

              
	
                SECTION
      9 REPRESENTATIONS AND WARRANTIES.

              	
                45

              
	
                9.1 Organization

              	
                45

              
	
                9.2 Authorization; No
      Conflict

              	
                45

              
	
                9.3 Validity and Binding
      Nature

              	
                45

              
	
                9.4 Financial
      Condition

              	
                45

              
	
                9.5 No Material Adverse
      Change

              	
                46

              
	
                9.6 Litigation and Contingent
      Liabilities

              	
                46

              
	
                9.7 Ownership of Properties;
      Liens

              	
                46

              
	
                9.8 Equity Ownership;
      Subsidiaries

              	
                46

              
	
                9.9 Pension Plans

              	
                46

              
	
                9.10 Investment Company
      Act

              	
                47

              

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      
        	
                9.11 Regulation U

              	
                47

              
	
                9.12 Taxes

              	
                47

              
	
                9.13 Solvency,
etc

              	
                48

              
	
                9.14 Environmental
      Matters

              	
                48

              
	
                9.15 Insurance

              	
                48

              
	
                9.16 Real
Property

              	
                49

              
	
                9.17 Information

              	
                49

              
	
                9.18 Intellectual
      Property

              	
                49

              
	
                9.19 Burdensome
      Obligations

              	
                50

              
	
                9.20 Labor
Matters

              	
                50

              
	
                9.21 No Default

              	
                50

              
	
                9.22 Subordinated
      Debt

              	
                50

              
	
                9.23 Subsidiary
      Assets

              	
                50

              
	
                SECTION
      10 AFFIRMATIVE COVENANTS.

              	
                50

              
	
                10.1 Reports, Certificates and
      Other Information

              	
                50

              
	
                10.1.1 Annual
    Report

              	
                50

              
	
                10.1.2 Interim
      Reports

              	
                50

              
	
                10.1.3 Compliance
      Certificates

              	
                51

              
	
                10.1.4 Notice of Default,
      Litigation and ERISA Matters

              	
                51

              
	
                10.1.5 Borrowing Base
      Certificates

              	
                52

              
	
                10.1.6 Management Recommendation
      Reports

              	
                52

              
	
                10.1.7 Budgets

              	
                52

              
	
                10.1.8 Senior Notes, Subordinated
      Debt and Other Material Debt Notices

              	
                53

              
	
                10.1.9 Other
      Information

              	
                53

              
	
                10.2 Books, Records and
      Inspections

              	
                53

              
	
                10.3 Maintenance of Property;
      Insurance.

              	
                53

              
	
                10.4 Compliance with Laws;
      Payment of Taxes and Liabilities

              	
                55

              
	
                10.5 Maintenance of Existence,
      etc

              	
                55

              
	
                10.6 Use of
    Proceeds

              	
                55

              
	
                10.7 Employee Benefit
      Plans.

              	
                55

              
	
                10.8 Environmental
      Matters

              	
                56

              
	
                10.9 Further
      Assurances

              	
                56

              
	
                10.10 Deposit
      Accounts

              	
                57

              
	
                10.12 Syndication

              	
                57

              
	
                10.13 Appraisals

              	
                57

              
	
                10.14 Immaterial Subsidiaries’
      Assets

              	
                58

              
	
                10.15 Escrow

              	
                58

              
	
                SECTION
      11 NEGATIVE COVENANTS

              	
                58

              
	
                11.1 Debt

              	
                58

              
	
                11.2 Liens

              	
                59

              

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      
        	
                11.3 Operating
    Leases

              	
                60

              
	
                11.4 Restricted
      Payments

              	
                60

              
	
                11.5 Mergers, Consolidations,
      Sales

              	
                61

              
	
                11.6 Modification of
      Organizational Documents

              	
                62

              
	
                11.7 Transactions with
      Affiliates

              	
                62

              
	
                11.8 Unconditional Purchase
      Obligations

              	
                62

              
	
                11.9 Inconsistent
      Agreements

              	
                62

              
	
                11.10 Business Activities;
      Issuance of Equity

              	
                63

              
	
                11.11 Investments

              	
                63

              
	
                11.12 Restriction of Amendments
      to Certain Documents

              	
                64

              
	
                11.13 Fiscal Year

              	
                64

              
	
                11.14 Financial
      Covenants.

              	
                64

              
	
                11.14.1 Intentionally
      Omitted.

              	
                64

              
	
                11.14.2 Fixed Charge Coverage
      Ratio

              	
                64

              
	
                11.14.3 Collateral
      Coverage

              	
                64

              
	
                11.14.4 Cancellation of
      Debt

              	
                64

              
	
                11.15 ERISA

              	
                65

              
	
                11.16 Inventory

              	
                65

              
	
                11.17 Restricted
      Subsidiaries

              	
                65

              
	
                SECTION
      12 EFFECTIVENESS; CONDITIONS OF LENDING, ETC.

              	
                65

              
	
                12.1
Effectiveness

              	
                65

              
	
                12.1.1 Notes

              	
                65

              
	
                12.1.2 Authorization
      Documents

              	
                65

              
	
                12.1.3 Consents,
    etc

              	
                65

              
	
                12.1.4
    Reaffirmation

              	
                66

              
	
                12.1.5
Assignments

              	
                66

              
	
                12.1.6 Real Estate
      Documents

              	
                66

              
	
                12.1.7 Opinions of
      Counsel

              	
                66

              
	
                12.1.8 Insurance

              	
                66

              
	
                12.1.9
    Subordination

              	
                66

              
	
                12.1.10 Payment of
      Fees

              	
                66

              
	
                12.1.11
Compliance

              	
                67

              
	
                12.1.12 Search Results; Lien
      Terminations

              	
                67

              
	
                12.1.13 Filings, Registrations
      and Recordings

              	
                67

              
	
                12.1.14 Borrowing Base
      Certificate

              	
                67

              
	
                12.1.15 Closing
      Certificate

              	
                67

              
	
                12.1.16 Prior Lender
      Consents

              	
                67

              
	
                12.1.17 Other

              	
                67

              
	
                12.2 Conditions

              	
                67

              
	
                12.2.1 Compliance with
      Warranties, No Default, etc

              	
                67

              
	
                12.2.2 Confirmatory
      Certificate

              	
                68

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      
        	
                SECTION
      13 EVENTS OF DEFAULT AND THEIR EFFECT.

              	
                68

              
	
                13.1 Events of
      Default

              	
                68

              
	
                13.1.1 Non-Payment of the Loans,
      etc

              	
                68

              
	
                13.1.2 Non-Payment of Other
      Debt

              	
                68

              
	
                13.1.3 Other Material
      Obligations

              	
                68

              
	
                13.1.4 Bankruptcy, Insolvency,
      etc

              	
                69

              
	
                13.1.5 Non-Compliance with Loan
      Documents

              	
                69

              
	
                13.1.6 Representations;
      Warranties

              	
                69

              
	
                13.1.7 Pension
    Plans

              	
                69

              
	
                13.1.8 Judgments

              	
                69

              
	
                13.1.9 Invalidity of Collateral
      Documents, etc

              	
                69

              
	
                13.1.10 Invalidity of
      Subordination Provisions, etc

              	
                70

              
	
                13.1.11 Change of
      Control

              	
                70

              
	
                13.1.12 Material Adverse
      Effect

              	
                70

              
	
                13.2 Effect of Event of
      Default

              	
                70

              
	
                SECTION
      14 THE ADMINISTRATIVE AGENT.

              	
                71

              
	
                14.1 Appointment and
      Authorization

              	
                71

              
	
                14.2 Issuing
    Lender

              	
                71

              
	
                14.3 Delegation of
      Duties

              	
                71

              
	
                14.4 Exculpation of
      Administrative Agent

              	
                71

              
	
                14.5 Reliance by Administrative
      Agent

              	
                72

              
	
                14.6 Notice of
      Default

              	
                72

              
	
                14.7 Credit
    Decision

              	
                73

              
	
                14.8
    Indemnification

              	
                73

              
	
                14.9 Administrative Agent in
      Individual Capacity

              	
                74

              
	
                14.10 Successor Administrative
      Agent

              	
                74

              
	
                14.11 Collateral
      Matters

              	
                75

              
	
                14.12 Administrative Agent May
      File Proofs of Claim

              	
                75

              
	
                14.13 Other Agents; Arrangers and
      Managers

              	
                76

              
	
                SECTION
      15 GENERAL.

              	
                76

              
	
                15.1 Waiver, Amendments and
      Replacement of Lenders.

              	
                76

              
	
                15.2
Confirmations

              	
                77

              
	
                15.3 Notices

              	
                78

              
	
                15.4 Computations

              	
                78

              
	
                15.5 Costs, Expenses and
      Taxes

              	
                78

              
	
                15.6 Assignments;
      Participations.

              	
                79

              
	
                15.6.1
Assignments

              	
                79

              
	
                15.6.2
    Participations

              	
                80

              
	
                15.7 Register

              	
                81

              
	
                15.8 GOVERNING
LAW

              	
                81

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      
        	
                15.9
    Confidentiality

              	
                81

              
	
                15.10
Severability

              	
                82

              
	
                15.11 Nature of
      Remedies

              	
                82

              
	
                15.12 Entire
      Agreement

              	
                82

              
	
                15.13
Counterparts

              	
                83

              
	
                15.14 Successors and
      Assigns

              	
                83

              
	
                15.15 Captions

              	
                83

              
	
                15.16 Customer Identification -
      USA Patriot Act Notice

              	
                83

              
	
                15.17 INDEMNIFICATION BY THE
      COMPANY

              	
                83

              
	
                15.18 Nonliability of
      Lenders

              	
                84

              
	
                15.19 FORUM SELECTION AND CONSENT
      TO JURISDICTION

              	
                85

              
	
                15.20 WAIVER OF JURY
      TRIAL

              	
                86

              
	
                15.21 Return of Old
      Notes

              	
                86

              
	
                15.22 Amendment and
      Restatement.

              	
                86

              

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    ANNEXES

    

    ANNEX
A                                           Lenders
and Pro Rata Shares

    ANNEX
B                                           Addresses
for Notices

    ANNEX
C                                           Prior
Lenders

    

     

    SCHEDULES

     

    SCHEDULE
1.1                                           Immaterial
Subsidiaries

    SCHEDULE
2.3.5                                           Existing
Letters of Credit

    SCHEDULE
9.6                                           Litigation
and Contingent Liabilities

    SCHEDULE
9.8                                           Subsidiaries

    SCHEDULE
9.13                                           Solvency

    SCHEDULE
9.15                                           Insurance

    SCHEDULE
9.16                                           Real
Property

    SCHEDULE
9.20                                           Labor
Matters

    SCHEDULE
9.23                                           Subsidiary
Assets

    SCHEDULE
11.1                                           Existing
Debt

    SCHEDULE
11.2                                           Existing
Liens

    SCHEDULE
11.7                                           Affiliate
Transactions

    SCHEDULE
11.11                                           Investments

    

    EXHIBITS

    

    EXHIBIT
A                                           Form
of Amended and Restated Note (Section 3.1)

    EXHIBIT
B                                           Form
of Compliance Certificate (Section 10.1.3)

    EXHIBIT
C                                           Form
of Borrowing Base Certificate (Section 1.1)

    EXHIBIT
D                                           Form
of Assignment Agreement (Section 15.6.1)

    EXHIBIT
E                                           Form
of Notice of Borrowing (Section 2.2.2)

    EXHIBIT
F                                           Form
of Notice of Conversion/Continuation (Section 2.2.3)

    
      
        
          

          

          

           

        

         

      

      
         

        
          

        

      

      
         

      

    

    

    AMENDED AND
RESTATED

    CREDIT
AGREEMENT

    

     

    THIS
AMENDED AND RESTATED CREDIT AGREEMENT (the “Agreement”) dated as
of January 30, 2009 is entered into among TITAN INTERNATIONAL, INC. (the “Company”), the
financial institutions that are or may from time to time become parties hereto
(together with their respective successors and assigns, the “Lenders”) and BANK OF
AMERICA, N.A. (as successor by merger to LaSalle Bank National Association) (in
its individual capacity, “Bank of America” and
as administrative agent for the Lenders, “Administrative
Agent”).

     

    WITNESSETH:

     

    WHEREAS, the Company, LaSalle Bank
National Association (“LaSalle”), General
Electric Capital Corporation (“GE Capital”) as
co-agents and certain financial institutions (the “Existing Lenders”)
entered into a certain Credit Agreement dated on or about July 23, 2004, as
amended (as in effect prior to giving effect to this Agreement, the “Existing Credit
Agreement”) and the Loan Documents (as defined in the Existing Credit
Agreement, the “Existing Loan
Documents”) pursuant to which the Existing Lenders made available to the
Company revolving loans (the “Existing Revolving
Loans”);

    

    WHEREAS, the Company, the Existing
Lenders and LaSalle subsequently entered into five (5) amendments to the
Existing Credit Agreement whereby various terms and conditions of the Existing
Credit Agreement were amended and revised including, inter alia, removing GE
Capital as co-agent and increasing the Revolving Commitment from $100,000,000 to
$250,000,000 (collectively, the “Existing Credit Agreement
Amendments”);

    

    WHEREAS, in order to secure all
Obligations (as hereinafter defined) under and as defined in the Existing Credit
Agreement, the Company and certain of its Subsidiaries have pledged and have
granted to Administrative Agent, for the benefit of the Administrative Agent and
the Lenders, a security interest in and lien upon certain of their personal and
real property as described in the Existing Loan Documents (the “Existing
Collateral”);

    

    WHEREAS,
the Company, the Administrative Agent and the Existing Lenders (other than those
set forth on Annex
C) now desire to amend and restate the Existing Credit Agreement in its
entirety so as to (i) set forth in one document all of the terms and conditions
of the Existing Credit Agreement as modified by the Existing Credit Agreement
Amendments, and (ii) make some additional and further modifications thereto,
including, but not limited to, providing for an accordion feature to the
Revolving Commitment with a minimum amount of $150,000,000 and
a

    
      
        
          

          

          

           

        

         

      

      
         

        
          

        

      

      
         

      

    

    maximum
amount of $250,000,000, to be increased in $50,000,000 increments, as provided
herein; and

    

    WHEREAS,
Loan Parties, Lenders and Administrative Agent intend that (i) the Obligations
under and as defined in the Existing Credit Agreement shall continue to exist
under, and to be evidenced by, this Agreement, (ii) the Existing Revolving Loans
shall be Loans under and as defined in this Agreement, and (iii) the Existing
Collateral shall continue to secure the Obligations (as hereinafter
defined).

    

    NOW, THEREFORE, in consideration of the
mutual covenants and obligations set out herein, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Company, the Lenders and Administrative Agent agree that the Existing Credit
Agreement is hereby amended and restated in its entirety as
follows:

    

    SECTION
1 DEFINITIONS.

     

    1.1 Definitions.  When
used herein the following terms shall have the following meanings:

     

    Account Debtor is
defined in the Guaranty and Collateral Agreement.

     

    Account or Accounts
is defined in the UCC.

     

    Accumulated Net
Income means, as of any date of determination, the accumulated total (but
not less than zero) of the Company’s Consolidated Net Income for the period from
January 1, 2008 to the end of the most recently completed fiscal year of the
Company for which the financial statements described in Section 10.1.1 have
been delivered, treating such period as a single accounting period.

     

    Acquisition means any
transaction or series of related transactions for the purpose of or resulting,
directly or indirectly, in (a) the acquisition of all or substantially all of
the assets of a Person, or of all or substantially all of any business or
division of a Person, (b) the acquisition of in excess of 50% of the Capital
Securities of any Person, or otherwise causing any Person to become a Subsidiary
or (c) a merger or consolidation or any other combination with another Person
(other than a Person that is already a Subsidiary).

     

    Adjusted Borrowing
Base means the Borrowing Base less that portion thereof attributable to
the Orderly Liquidation Value of Equipment.

     

    Administrative Agent
means Bank of America, as successor by merger to LaSalle, in its capacity as
administrative agent for the Lenders hereunder and any successor thereto in such
capacity.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    Affected Loan - see
Section
8.3.

     

    Affiliate of any
Person means (a) any other Person which, directly or indirectly, controls or is
controlled by or is under common control with such Person, (b) any officer or
director of such Person and (c) with respect to any Lender, any entity
administered or managed by such Lender or an Affiliate or investment advisor
thereof and which is engaged in making, purchasing, holding or otherwise
investing in commercial loans.  A Person shall be deemed to be
“controlled by” any other Person if such Person possesses, directly or
indirectly, power to vote 10% or more of the securities (on a fully diluted
basis) having ordinary voting power for the election of directors or managers or
power to direct or cause the direction of the management and policies of such
Person whether by contract or otherwise.  Unless expressly stated
otherwise herein, neither the Administrative Agent nor any Lender shall be
deemed an Affiliate of any Loan Party.

     

    Agreement - see the
Preamble.

     

    Applicable Margin
means, for any day, the rate per annum equal to:  (i) for LIBOR Loans,
the LIBOR Margin and (ii) for Base Rate Loans, the Base Rate
Margin.

    

    Asset Disposition
means the sale, lease, assignment or other transfer for value (each, a “Disposition”) by any
Loan Party to any Person (other than a Loan Party) of any asset or right of such
Loan Party (including, the loss, destruction or damage of any thereof or any
actual or threatened (in writing to any Loan Party) condemnation, confiscation,
requisition, seizure or taking thereof) other than (a) the Disposition of any
asset which is to be replaced, and is in fact replaced, within 180 days with
other like assets, and (b) the sale or lease of Inventory in the ordinary course
of business.

     

    Assignee - see Section
15.6.1.

     

    Assignment Agreement
- see Section
15.6.1.

     

    Attorney Costs means,
with respect to any Person, all reasonable fees and charges of any counsel to
such Person, the reasonable allocable cost of internal legal services of such
Person, all reasonable disbursements of such internal counsel and all court
costs and similar legal expenses.

     

    Available Amount
means, on any date of determination (a) the sum of (i) $50,000,000 plus (ii) fifty
percent (50%) of Accumulated Net Income on such date minus (b) the sum of
(i) all Permitted Redemptions made on or after January 1, 2008 plus (ii) all
Permitted Minority Investments made on or after January 1, 2008.

     

    Availability
Percentage means the numerical percentage equivalent of the fraction, the
numerator of which is the Revolving Outstandings and the denominator of which is
the Adjusted Borrowing Base based upon, and determined as of the date of, the
most recent Borrowing Base

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    Certificate
furnished by the Company to the Administrative Agent from time to time and as of
the date of any request by Company for a Revolving Loan.

     

    Bank of America – see
the Preamble.

     

    Bank Product
Agreements means those certain cash management service agreements entered
into from time to time between any Loan Party and a Lender or its Affiliates in
connection with any of the Bank Products.

     

    Bank Product
Obligations means all obligations, liabilities, contingent reimbursement
obligations, fees, and expenses owing by the Loan Parties to any Lender or its
Affiliates 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 a Loan Party is obligated to reimburse to
the Administrative Agent or any Lender as a result of the Administrative Agent
or such Lender purchasing participations or executing indemnities or
reimbursement obligations with respect to the Bank Products provided to the Loan
Parties pursuant to the Bank Product Agreements.

     

    Bank Products means
any service or facility extended to any Loan Party by any Lender or its
Affiliates 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)
Hedging Agreements.

     

    Base Rate means, for
any day, a rate per annum equal to the sum of (a) the highest of (i) the
Federal Funds Rate plus 0.50%, (ii) the
Prime Rate; and (iii) except during a LIBOR Unavailability Period, the LIBOR
Rate plus
2.00%, plus (b)
the Market Disruption Spread, if any.

     

    Base Rate Loan means
any Loan which bears interest at or by reference to the Base Rate.

     

    Base Rate Margin
means the rate per annum in effect and subject to adjustment from time to time
as set forth in the Pricing Grid.

     

    Borrowing Base means
an amount equal to the total of (a) 75% of the book value of
all Eligible Accounts plus (b) 50% of
the book value of all Eligible Inventory plus (c) 80% of the
Orderly Liquidation Value of Equipment.  Upon the request of the
Company and the receipt by Lenders of acceptable field exams, Lenders may, in
their sole discretion, increase such advance rates.

     

    Borrowing Base
Certificate means a certificate substantially in the form of Exhibit
C.

    
      
         

      

      
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    Brownsville Facility
means that facility currently owned and occupied by Titan Tire Corporation of
Texas as its principal place of business, located at 6700 Paredes Line Road,
Brownsville, Texas.

     

    Bryan Facility means
that facility currently owned and occupied by Titan Tire Corporation of Bryan as
its principal place of business located at 927 South Union Street, Bryan,
Ohio.

     

    BSA - see Section
10.4.

     

    Business Day means
any day on which Bank of America is open for commercial banking business in
Chicago, Illinois and, in the case of a Business Day which relates to a LIBOR
Loan or the LIBOR Rate, on which dealings are carried on in the London interbank
eurodollar market.

     

    Capital Expenditures
means all expenditures which, in accordance with GAAP, would be required to be
capitalized and shown on the consolidated balance sheet of the Company,
including expenditures in respect of Capital Leases, but excluding expenditures
made in connection with (a) the Giant OTR Project and (b) the replacement,
substitution or restoration of assets to the extent financed (i) from insurance
proceeds (or other similar recoveries) paid on account of the loss of or damage
to the assets being replaced or restored or (ii) with awards of compensation
arising from the taking by eminent domain or condemnation of the assets being
replaced.

     

    Capital Lease means,
with respect to any Person, any lease of (or other agreement conveying the right
to use) any real or personal property by such Person that, in conformity with
GAAP, is accounted for as a capital lease on the balance sheet of such
Person.

     

    Capital Securities
means, with respect to any Person, all shares, interests, participations or
other equivalents (however designated, whether voting or non-voting) of such
Person’s capital, whether now outstanding or issued or acquired after the
Restatement Date, including common shares, preferred shares, membership
interests in a limited liability company, limited or general partnership
interests in a partnership, interests in a Trust, interests in other
unincorporated organizations or any other equivalent of such ownership
interest.

     

    Cash Collateralize
means to deliver one hundred five percent (105%) of the L/C Obligations from
time to time outstanding to the Administrative Agent, to be held as cash
collateral for the L/C Obligations, pursuant to documentation satisfactory to
the Administrative Agent.  Derivatives of such term have corresponding
meanings.

     

    Change of Control
means any of the following:  (a) any person or group of persons
(within the meaning of the Securities Exchange Act of 1934, as amended) shall
have acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated
by the Securities and Exchange Commission under the Securities Exchange Act of
1934, as amended) of 30% or more

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    of the
issued and outstanding shares of Capital Securities of the Company have the
right to vote for the election of directors of the Company under ordinary
circumstances; (b) during any period of twelve (12) consecutive calendar months,
individuals who at the beginning of such period constituted the board of
directors of the Company (together with any new directors whose election by the
board of directors of the Company or whose nomination for election by the
stockholders of the Company was approved by a vote of a least two-thirds of the
directors then still in office who either were directors at the beginning of
such period or whose elections or nomination for election was previously so
approved) cease for any reason other than retirement, death or disability to
constitute a majority of the directors then in office, or (c) the Company shall
cease to own and control, directly or indirectly, all of the economic and voting
rights associated with all of the outstanding Capital Securities of any Domestic
Subsidiary.

     

    Closing Date means
the closing date under the Existing Credit Agreement, which was July 23,
2004.

     

    Code means the
Internal Revenue Code, as amended.

     

    Collateral Access
Agreement means an agreement in form and substance reasonably
satisfactory to the Administrative Agent pursuant to which a mortgagee or lessor
of real property on which collateral is stored or otherwise located, or a
warehouseman, processor or other bailee of Inventory or other property owned by
any Loan Party, acknowledges the Liens of the Administrative Agent and waives
any Liens held by such Person on such property, and, in the case of any such
agreement with a mortgagee or lessor, permits the Administrative Agent
reasonable access to and use of such real property following the occurrence and
during the continuance of an Event of Default to assemble, complete and sell any
collateral stored or otherwise located thereon.

     

    Collateral Documents
means, collectively, the Guaranty and Collateral Agreement, each Mortgage, each
Collateral Access Agreement, each Perfection Certificate, each control agreement
and any other agreement or instrument pursuant to which the Company, any
Subsidiary or any other Person grants or purports to grant collateral to the
Administrative Agent for the benefit of the Lenders or otherwise relates to such
collateral.

     

    Commitment means, as
to any Lender, such Lender’s commitment to make Loans and to issue or
participate in Letters of Credit, under this Agreement.  The amount of
each Lender’s Commitment to make Loans is set forth on Annex A attached
hereto as may be amended, if at all, and attached hereto from time to
time.

     

    Common Stock means
the existing class of common stock of the Company.

     

    Company - see the
Preamble.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    Compliance
Certificate means a Compliance Certificate in substantially the form of
Exhibit
B.

     

    Computation Period
means each period of four consecutive Fiscal Quarters ending on the last day of
a Fiscal Quarter.

     

    Consolidated Net
Income means, with respect to the Company for any period, as computed on
a consolidated basis, the net income (or loss) of the Loan Parties for such
period excluding any gains or losses from Asset Dispositions, any extraordinary
gains or losses and any gains or losses from discontinued
operations.

     

    Contingent Liability
means, with respect to any Person, each obligation and liability of such Person
and all such obligations and liabilities of such Person incurred pursuant to any
agreement, undertaking or arrangement by which such Person:  (a)
guarantees, endorses or otherwise becomes or is contingently liable upon (by
direct or indirect agreement, contingent or otherwise, to provide funds for
payment, to supply funds to, or otherwise to invest in, a debtor, or otherwise
to assure a creditor against loss) the indebtedness, dividend, obligation or
other liability of any other Person in any manner (other than by endorsement of
instruments in the course of collection), including any indebtedness, dividend
or other obligation which may be issued or incurred at some future time; (b)
guarantees the payment of dividends or other distributions upon the Capital
Securities of any other Person; (c) undertakes or agrees (whether contingently
or otherwise):  (i) to purchase, repurchase, or otherwise acquire any
indebtedness, obligation or liability of any other Person or any property or
assets constituting security therefor, (ii) to advance or provide funds for the
payment or discharge of any indebtedness, obligation or liability of any other
Person (whether in the form of loans, advances, stock purchases, capital
contributions or otherwise), or to maintain solvency, assets, level of income,
working capital or other financial condition of any other Person, or (iii) to
make payment to any other Person other than for value received; (d) agrees to
lease property or to purchase securities, property or services from such other
Person with the purpose or intent of assuring the owner of such indebtedness or
obligation of the ability of such other Person to make payment of the
indebtedness or obligation; (e) to induce the issuance of, or in connection with
the issuance of, any letter of credit for the benefit of such other Person; or
(f) undertakes or agrees otherwise to assure a creditor against
loss.  The amount of any Contingent Liability shall (subject to any
limitation set forth herein) be deemed to be the outstanding principal amount
(or maximum permitted principal amount, if larger) of the indebtedness,
obligation or other liability guaranteed or supported thereby.

     

    Controlled Group
means all members of a controlled group of corporations, all members of a
controlled group of trades or businesses (whether or not incorporated) under
common control and all members of an affiliated service group which, together
with the Company or any of its Subsidiaries, are treated as a single employer
under Section 414 of the Code or Section 4001 of ERISA.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    Debt of any Loan
Party means, without duplication, (a) all indebtedness of such Loan Party, (b)
all borrowed money of such Loan Party, whether or not evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Loan Party
as lessee under Capital Leases which have been or should be recorded as
liabilities on a balance sheet of such Loan Party in accordance with GAAP, (d)
all obligations of such Loan Party to pay the deferred purchase price of
property or services (excluding trade accounts payable in the ordinary course of
business), (e) all indebtedness secured by a Lien on the property of such Loan
Party, whether or not such indebtedness shall have been assumed by such Loan
Party; provided
that if such Loan Party has not assumed or otherwise become liable for such
indebtedness, such indebtedness shall be measured at the fair market value of
such property securing such indebtedness at the time of determination, (f) all
obligations, contingent or otherwise, with respect to the face amount of all
letters of credit (whether or not drawn), bankers’ acceptances and similar
obligations issued for the account of such Loan Party (including the Letters of
Credit), (g) all Hedging Obligations of such Loan Party, (h) all Contingent
Liabilities of such Loan Party and (i) all Debt of any partnership of which such
Loan Party is a general partner.

     

    Default means any
event that, if it continues uncured, will, with lapse of time or notice or both,
constitute an Event of Default.

     

    Defaulting Lender
means any Lender that (a) has failed to fund any portion of the Loans or
participations in L/C Obligations required to be funded by it hereunder within
one Business Day of the date required to be funded by it hereunder unless such
failure has been cured, (b) has otherwise failed to pay over to the
Administrative Agent or any other Lender any other amount required to be paid by
it hereunder within one Business Day of the date when due, unless the subject of
a good faith dispute or unless such failure has been cured, or (c) has been
deemed insolvent by the Administrative Agent which shall immediately notify the
Company upon making such determination, or become the subject of a bankruptcy or
insolvency proceeding.

     

    Designated Proceeds -
see Section
6.2.2(a).

     

    Domestic Subsidiaries
means any Subsidiary of the Company (excluding any Immaterial Subsidiary)
organized under the laws of the United States or any state thereof, including,
but not limited to, Titan Tire Corporation, an Illinois corporation, Titan Tire
Corporation of Freeport, an Illinois corporation, Titan Tire Corporation of
Bryan, an Ohio corporation, Titan Wheel Corporation of Illinois, an Illinois
corporation and Titan Wheel Corporation of Virginia, a Virginia
corporation.

     

    Dollar and the sign
“$” mean lawful
money of the United States of America.

     

    EBIT means, for any
period, Consolidated Net Income for such period plus all amounts
deducted in arriving at such Consolidated Net Income amount for such period for
Interest Expense and for foreign, federal, state and local income tax
expense.

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    EBITDA means, for any
period, Consolidated Net Income for such period plus, to the extent
deducted in determining such Consolidated Net Income, Interest Expense, federal,
state and local income tax expense, depreciation and amortization for such
period.

     

    Eligible Account
means an Account owing to the Company or any Domestic Subsidiary which meets
each of the following requirements:

     

    (a)           it
arises from the sale or lease of goods or the rendering of services which have
been fully performed by the Company or the applicable Domestic
Subsidiary;

     

    (b)           it
(i) is, subject to a perfected, first priority Lien in favor of the
Administrative Agent and (ii) is not subject to any other assignment, claim or
Lien;

     

    (c)           it
is a valid, legally enforceable and unconditional obligation of the Account
Debtor with respect thereto, and is not subject to the fulfillment of any
condition whatsoever or any counterclaim, set off, or adjustment by the Account
Debtor outside of the ordinary course of business with respect
thereto;

     

    (d)           there
is no bankruptcy, insolvency or liquidation proceeding pending by or against the
Account Debtor with respect thereto;

     

    (e)           the
Account Debtor (except for Titan Europe and its wholly-owned subsidiaries) with
respect thereto is a resident or citizen of, and is located within, the United
States, unless the sale of goods or services giving rise to such Account is on
letter of credit, banker’s acceptance or other credit terms reasonably
satisfactory to the Administrative Agent;

     

    (f)           it
arises in the ordinary course of business of the Company or the applicable
Domestic Subsidiary;

     

    (g)           if
the Account Debtor is the United States or any department, agency or
instrumentality thereof, the Company or the applicable Domestic Subsidiary has assigned its right
to payment of such Account to the Administrative Agent pursuant to the
Assignment of Claims Act of 1940 (but which Assignment shall not be filed by the
Administrative Agent except upon the occurrence of an Event of
Default);

     

    (h)           if
the Account is evidenced by chattel paper or an instrument, the originals of
such chattel paper or instrument shall have been endorsed and/or assigned and
delivered to the Administrative Agent or, in the future case of electronic
chattel paper, shall be in the control of the Administrative Agent, in each
case  in a manner satisfactory to the Administrative
Agent;

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    (i)           the
Account Debtor with respect thereto is not the Company or an Affiliate (except
for Titan Europe and its wholly-owned subsidiaries) of the Company;
and

     

    (j)           all
of the applicable representations and warranties with respect to such Account
that are contained in any of the Loan Documents remain true and
correct.

     

    An
Account which is at any time an Eligible Account, but which subsequently fails
to meet any of the foregoing requirements, shall forthwith cease to be an
Eligible Account.

     

    Eligible Inventory
means Inventory of the Company or any Domestic Subsidiary which meets each of
the following requirements:

     

    (a)           it
(i) is subject to a perfected, first priority Lien in favor of the
Administrative Agent and (ii) is not subject to any other assignment, claim or
Lien;

     

    (b)           it
is salable and not obsolete or discontinued;

     

    (c)           it
is not Inventory produced in violation of the Fair Labor Standards Act and
subject to the “hot goods” provisions contained in Title 29 U.S.C.
§215;

     

    (d)           it
is not subject to any agreement or license which would restrict the
Administrative Agent’s ability to sell or otherwise dispose of such
Inventory;

     

    (e)           it
is located in the United States or in any territory or possession of the United
States that has adopted Article 9 of the Uniform Commercial Code;

     

    (f)           it
does not materially breach any of the representations, warranties or covenants
pertaining to Inventory set forth in the Loan Documents; and

     

    (g)           it
has a value not in excess of $30,000,000 in the aggregate if it is stored
outside of the Mortgaged Real Property, the Freeport Facility, the Bryan
Facility, the Brownsville Facility and the Virginia Facility.

     

    Inventory
which is at any time Eligible Inventory but which subsequently fails to meet any
of the foregoing requirements shall forthwith cease to be Eligible
Inventory.

     

    Environmental Claims
means all claims, however asserted, by any governmental, regulatory or judicial
authority or other Person alleging potential liability or responsibility for
violation of any Environmental Law, or for release or injury to the
environment.

     

    Environmental Laws
means all present or future federal, state or local laws, statutes, common law
duties, rules, regulations, ordinances and codes, together with all
administrative or judicial orders, consent agreements, directed duties,
requests, licenses, authorizations and

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    permits
of, and agreements with, any governmental authority, in each case relating to
any matter arising out of or relating to public health and safety, or pollution
or protection of the environment or workplace, including any of the foregoing
relating to the presence, use, production, generation, handling, transport,
treatment, storage, disposal, distribution, discharge, emission, release,
threatened release, control or cleanup of any Hazardous Substance.

     

    Equipment shall mean
all machinery and equipment now owned or hereafter acquired by an Obligor and
located at the principal place of business of an Obligor, including all such
Obligor’s processing equipment, conveyors, machine tools and all engineering,
processing and manufacturing equipment, office machinery, furniture, tools,
attachments, accessories, molds, dies, stamps, and other machinery and
equipment, but not including any motor vehicles or other titled
assets.

     

    ERISA means the
Employee Retirement Income Security Act of 1974.

     

    Escrow Agent means
Attorney’s Title Guaranty Fund, Inc.

     

    Escrow Agreement
means that certain Escrow Agreement dated as of August 31, 2005, as amended,
among the Administrative Agent, the Loan Parties and the Escrow
Agent.

     

    Event of Default
means any of the events described in Section
13.1.

     

    Excluded Taxes means
taxes based upon, or measured by, the Lender’s or the Administrative Agent’s (or
a branch of the Lender’s or the Administrative Agent’s) overall net income,
overall net receipts, or overall net profits (including franchise taxes imposed
in lieu of such taxes), but only to the extent such taxes are imposed by a
taxing authority (a) in a jurisdiction in which such Lender or the
Administrative Agent is organized, (b) in a jurisdiction which the Lender’s or
the Administrative Agent’s principal office is located, or (c) in a jurisdiction
in which such Lender’s or the Administrative Agent’s lending office (or branch)
in respect of which payments under this Agreement are made is
located.

     

    Existing Credit
Agreement - see the Preamble.

     

    Existing Lenders -
see the Preamble.

     

    Existing Loan
Documents - see the Preamble.

     

    Existing Revolving
Loans - see the Preamble.

     

    Federal Funds Rate
means, for any day, the rate per annum equal to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided
that (a) if such day is not a

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    Business
Day, the Federal Funds Rate for such day shall be such rate on such transactions
on the next preceding Business Day as so published on the next succeeding
Business Day, and (b) if no such rate is so published on such next succeeding
Business Day, the Federal Funds Rate for such day shall be the average rate
(rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to
Bank of America on such day on such transactions as determined by the
Administrative Agent.  The Administrative Agent’s determination of
such rate shall be binding and conclusive absent manifest error.

     

    Fee Letter means the
fee letter dated November 25, 2008 between the Administrative Agent and the
Company.

     

    Fiscal Quarter means
a fiscal quarter of a Fiscal Year.

     

    Fiscal Year means the
fiscal year of the Company and its Subsidiaries, which period shall be the
12-month period ending on December 31st of
each year.  References to a Fiscal Year with a number corresponding to
any calendar year (e.g., “Fiscal Year 2004”)
refer to the Fiscal Year ending on December 31st of
such calendar year.

     

    Fixed Charge Coverage
Ratio means commencing January 1, 2004, for any Computation Period, the
ratio of (a) the total for such period of EBITDA of the Obligors minus the sum of
income taxes paid in cash by the Obligors and all unfinanced Capital
Expenditures of the Obligors to (b) the sum for
such period of (i) cash Interest Expense of the Obligors plus (ii) required
payments of principal of Funded Debt of the Obligors (excluding the Revolving
Loans) during such period.

     

    Foreign Affiliate
Loans means the loans made by Titan Luxembourg S.A.R.L. and Titan
International Luxembourg S.A.R.L. to the Company in an aggregate principal
amount not to exceed $50,000,000.

     

    Foreign Subsidiary
means any Subsidiaries organized under the laws of a jurisdiction outside of the
United States of America.

     

    Freeport Facility
means that facility currently owned and occupied by Titan Tire Corporation of
Freeport as its principal place of business located at 3769 Route 20 East,
Freeport, Illinois.

     

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

     

    Funded Debt means, as
to any Loan Party, all Debt of such Loan Party that matures more than one year
from the date of its creation (or is renewable or extendible, at the option of
such Person, to a date more than one year from such date).

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    GAAP means generally
accepted accounting principles set forth from time to time in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board (or agencies with similar functions of comparable
stature and authority within the U.S. accounting profession) and the SEC, which
are applicable to the circumstances as of the date of determination; provided, that the
Company may, upon not less than sixty (60) days prior written notice to the
Administrative Agent, make a one-time election to switch to IFRS, if permitted
to do so by the SEC in its filings with the SEC; and following such election,
“GAAP” shall mean IFRS; provided further,
however, that
(a) such notice of its change to IFRS shall be accompanied by a description in
reasonable detail of any material variation between the application of
accounting principles under GAAP and the application of accounting principles
under IFRS in calculating the financial covenants under Section 11.14 hereof
and the reasonable estimates of the difference between such calculations arising
as a consequence thereof, and (b) if such change is deemed by the Administrative
Agent to be material, such change shall not be effective for purposes of
calculating the financial covenants hereunder until the Company and the Required
Lenders have agreed upon amendments to the financial covenants contained herein
to reflect any change in such basis.  After such election, the Company
cannot subsequently elect to report under U.S. generally accepted accounting
principles.

     

    GE Capital - see the
Preamble.

     

    Giant OTR Project
means the building and equipment expenditures for the Bryan Facility used for
the production of 57-inch and 63-inch giant radial tires.

     

    Group - see Section
2.2.1.

     

    Guaranty and Collateral
Agreement means the Guaranty and Collateral Agreement dated as of the
Closing Date executed and delivered by the Loan Parties, together with any
joinders and/or amendments thereto or reaffirmations thereof (including the
Reaffirmation Agreement) and any other guaranty and collateral agreement
executed by a Loan Party, in each case in form and substance satisfactory to the
Administrative Agent.

     

    Hazardous Substances
means (a) any petroleum or petroleum products, radioactive materials,
asbestos in any form that is or could become friable, urea formaldehyde foam
insulation, dielectric fluid containing levels of polychlorinated biphenyls,
radon gas and mold; (b) any chemicals, materials, pollutant or substances
defined as or included in the definition of “hazardous substances”, “hazardous
waste”, “hazardous materials”, “extremely hazardous substances”, “restricted
hazardous waste”, “toxic substances”, “toxic pollutants”, “contaminants”,
“pollutants” or words of similar import, under any applicable Environmental Law;
and (c) any other chemical, material or substance, the exposure to, or
release of which is prohibited, limited or regulated by any governmental
authority or for which any duty or standard of care is imposed pursuant to, any
Environmental Law.

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    Hedging Agreement
means any interest rate, currency or commodity swap agreement, cap agreement or
collar agreement, and any other agreement or arrangement designed to protect a
Person against fluctuations in interest rates, currency exchange rates or
commodity prices.

     

    Hedging Obligation
means, with respect to any Person, any liability of such Person under any
Hedging Agreement.  The amount of any Person’s obligation in respect
of any Hedging Obligation shall be deemed to be the incremental obligation that
would be reflected in the financial statements of such Person in accordance with
GAAP.

     

    IFRS means the
International Financial Reporting Standards issued and/or adopted by the
International Accounting Standards Board, as in effect from time to
time.

     

    Immaterial Subsidiary
means any Domestic Subsidiary that as of the most recently ended fiscal quarter
has gross assets (excluding, in the case of Titan Tire Corporation of Texas, the
Brownsville Facility) of less than $10,000,000.  As of the Restatement
Date, the only Immaterial Subsidiaries are listed on Schedule
1.1.

     

    Increase Effective
Date - see Section
2.1.2(d).

     

    Indemnified
Liabilities - see Section
15.17.

     

    Interest Expense
means for any period the consolidated interest expense of the Company and its
Subsidiaries for such period (including all imputed interest on Capital
Leases).

     

    Interest Period
means, as to any LIBOR Loan, the period commencing on the date such Loan is
borrowed or continued as, or converted into, a LIBOR Loan and ending on the date
one, two or three months thereafter as selected by the Company pursuant to Section 2.2.2 or
2.2.3, as the
case may be; provided
that:

     

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

     

    (b)           any
Interest Period that begins on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period shall
end on the last Business Day of the calendar month at the end of such Interest
Period; and

     

    (c)           the
Company may not select any Interest Period for a Revolving  Loan which
would extend beyond the scheduled Termination Date.

    
      
         

      

      
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    Inventory is defined
in the Guaranty and Collateral Agreement.

     

    Investment means,
with respect to any Person, any investment in another Person, whether by
acquisition of any debt or Capital Security, by making any loan or advance, by
becoming obligated with respect to a Contingent Liability in respect of
obligations of such other Person (other than travel and similar advances to
employees in the ordinary course of business) or by making an
Acquisition.

     

    ISP means, with
respect to any Letter of Credit, the “International Standby Practices 1998”
published by the Institute of International Banking Law & Practice, Inc. (or
such later version thereof as may be in effect at the time of
issuance).

     

    Issuer Documents
means with respect to any Letter of Credit, the L/C Application, and any other
document, agreement and instrument entered into by the Issuing Lender and the
Company (or any Subsidiary) or in favor of the Issuing Lender and relating to
such Letter of Credit.

     

    Issuing Lender means
Bank of America, in its capacity as the issuer of Letters of Credit hereunder,
or any Affiliate of Bank of America that may from time to time issue Letters of
Credit, and their successors and assigns in such capacity, and includes Bank of
America, as successor by merger to LaSalle, with respect to the Existing Letters
of Credit.

     

    LaSalle - see the
Preamble.

     

    L/C Application
means, with respect to any request for the issuance of a Letter of Credit, a
letter of credit application in the form being used by the Issuing Lender at the
time of such request for the type of letter of credit requested.

     

    L/C Fee Rate means
the rate per annum in effect and subject to adjustment from time to time as set
forth in the Pricing Grid.

     

    L/C Obligations
means, as of any date of determination, the aggregate amount available to be
drawn under all outstanding Letters of Credit plus the aggregate of
all unreimbursed payments and disbursements under such Letters of
Credit.  For purposes of computing the amount available to be drawn
under any Letter of Credit, the amount of such Letter of Credit shall be
determined in accordance with Section
2.4.  For all purposes of this Agreement, if on any date of
determination a Letter of Credit has expired by its terms but any amount may
still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP,
such Letter of Credit shall be deemed to be “outstanding” in the amount so
remaining available to be drawn.

     

    Lender - see the
Preamble.  References
to the “Lenders” shall include the Issuing Lender; for purposes of clarification
only, to the extent that Bank of America (or any successor Issuing Lender) may
have any rights or obligations in addition to those of the other Lenders due to
its

    
      
         

      

      
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    status as
Issuing Lender, its status as such will be specifically
referenced.  In addition to the foregoing, for the purpose of
identifying the Persons entitled to share in the collateral and the proceeds
thereof under, and in accordance with the provisions of, this Agreement and the
Collateral Documents, the term “Lender” shall include Affiliates of a Lender
providing a Bank Product.

     

    Lender Party - see
Section
15.17.

     

    Letter of Credit -
see Section
2.1.3.

     

    Letter of Credit Expiration
Date means the day that is seven days prior to the Termination Date then
in effect (or, if such day is not a Business Day, the next preceding Business
Day).

     

    LIBOR Loan means any
Loan which bears interest at a rate determined by reference to the LIBOR Rate
and that is not a Base Rate Loan.

     

    LIBOR Margin means
the rate per annum in effect and subject to adjustment from time to time as set
forth in the Pricing Grid.

     

    LIBOR Office means
with respect to any Lender the office or offices of such Lender which shall be
making or maintaining the LIBOR Loans of such Lender hereunder.  A
LIBOR Office of any Lender may be, at the option of such Lender, either a
domestic or foreign office.

     

    LIBOR Rate means (a)
for any Interest Period with respect to a LIBOR Loan, the sum of (i) the rate
per annum equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as
published by Reuters (or other commercially available source providing
quotations of BBA LIBOR as designated by the Administrative Agent from time to
time) at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, for Dollar deposits (for delivery on the
first day of such Interest Period) with a term equivalent to such Interest
Period, or if such rate is not available at such time for any reason, the rate
per annum determined by the Administrative Agent to be the rate at which
deposits in Dollars for delivery on the first day of such Interest Period in
same day funds in the approximate amount of the LIBOR Loan being made, continued
or converted by Bank of America and with a term equivalent to such Interest
Period would be offered by Bank of America’s London Branch to major banks in the
London interbank eurodollar market at their request at approximately 11:00 a.m.
(London time) two Business Days prior to the commencement of such Interest
Period plus
(ii) the Market Disruption Spread, if any, at the time of determination; and (b)
for any interest rate calculation with respect to a Base Rate Loan, the rate per
annum equal to (i) BBA LIBOR, at approximately 11:00 a.m., London time on the
date of determination (provided that if such day is not a Business Day, the next
preceding Business Day) for Dollar deposits being delivered in the London
interbank market for a term of one month commencing in two Business Days or (ii)
if such published rate is not available at such time for any reason, the rate
determined by the Administrative Agent to be the rate at which deposits in
Dollars for delivery in two Business

    
      
         

      

      
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    Days in
same day funds in the approximate amount of the Base Rate Loan being made,
continued or converted by Bank of America and with a term equal to one month
would be offered by Bank of America’s London Branch to major banks in the London
interbank Eurodollar market at their request at the date and time of
determination.  Notwithstanding the foregoing, in no event shall the
LIBOR Rate be less than one and one half percent (1.50%) per annum.

     

    LIBOR Unavailability
Period means any period of time during which a notice delivered to the
Company in accordance with Section 8.2(a) shall
remain in force and effect.

     

    Lien means, with
respect to any Person, any interest granted by such Person in any real or
personal property, asset or other right owned or being purchased or acquired by
such Person (including an interest in respect of a Capital Lease) which secures
payment or performance of any obligation and shall include any mortgage, lien,
encumbrance, title retention lien, charge or other security interest of any
kind, whether arising by contract, as a matter of law, by judicial process or
otherwise.

     

    Loan Documents means
this Agreement, the Notes, the Letters of Credit, the Letter of Credit
Applications, the Issuer Documents, the Fee Letter, the Collateral Documents,
the Subordination Agreements and all amendments, modifications, restatements,
replacements or substitutions thereof along with all documents, instruments and
agreements delivered in connection with any of the foregoing.

     

    Loan Party means the
Company, each Domestic Subsidiary and any other entity that is required to
become a guarantor of the Obligations pursuant to the terms of Section
10.9.

     

    Loan or Loans means,
as the context may require, Revolving Loans.

     

    Mandatory Prepayment
Event - see Section
6.2.2(a).

     

    Margin Stock means
any “margin stock” as defined in Regulation U.

     

    Market Disruption
Spread means zero unless a notice delivered pursuant to Section 8.2(b) is in
effect, in which case, such spread shall be a rate per annum equal to
1.50%.

     

    Material Adverse
Effect means (a) a material adverse change in, or a material adverse
effect upon, the financial condition, operations, assets, business, properties
or prospects of the Obligors taken as a whole, (b) a material impairment of the
ability of any Obligor to perform any of the Obligations under any Loan Document
or (c) a material adverse effect upon any of the collateral under the Collateral
Documents or upon the legality, validity, binding effect or enforceability
against any Loan Party of any Loan Document.  Without limiting the
foregoing, any event or occurrence adverse to one or more Obligors which results
or could reasonably be expected to result in costs and/or liabilities and/or
loss of revenues, individually or in the

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    aggregate,
to any Obligor in any 30-day period in excess of 50% of the sum of (a) the net
amount available to be drawn on the date of determination under the Revolving
Credit Commitment, plus (b) the
available cash and unrestricted cash equivalents of Obligors on such date, shall
be deemed to have had a Material Adverse Effect.

     

    Material Debt means
any Debt with an outstanding principal amount of greater than $25,000,000; provided that to the
extent such Debt is owed to suppliers of the Loan Parties and was incurred in
the ordinary course of business, such Debt shall not be deemed to be Material
Debt.

     

    Mortgage means the
mortgages, deeds of trust, or similar instruments granting the Administrative
Agent a Lien on real property owned by the Company in Quincy, Illinois and by
Titan Tire Corporation in Des Moines, Iowa.

     

    Mortgaged Real
Property means the real property of each of the Company and Titan Tire
Corporation identified in the Mortgages and located in Quincy, Illinois and Des
Moines, Iowa.

     

    Multiemployer Pension
Plan means a multiemployer plan, as defined in Section 4001(a)(3) of
ERISA, to which the Company or any other member of the Controlled Group may have
any liability.

     

    Net Cash Proceeds
means:

     

    
      	
               
      

            	
              (a)

            	
              with
      respect to any Asset Disposition, the aggregate cash proceeds (including
      cash proceeds received pursuant to policies of insurance or by way of
      deferred payment of principal pursuant to a note, installment receivable
      or otherwise, but only as and when received) received by any Loan Party
      pursuant to such Asset Disposition net of (i) the direct costs relating to
      such sale, transfer or other disposition (including sales commissions and
      legal, accounting and investment banking fees), (ii) taxes paid or
      reasonably estimated by the Company to be payable as a result thereof
      (after taking into account any available tax credits or deductions and any
      tax sharing arrangements) and (iii) amounts required to be applied to the
      repayment of any Debt secured by a Lien on the asset subject to such Asset
      Disposition (other than the Loans);

            

    

     

    
      	
               
      

            	
              (b)

            	
              with
      respect to any issuance of Capital Securities, the aggregate cash proceeds
      received by any Loan Party pursuant to such issuance, net of the direct
      costs relating to such issuance (including sales and underwriters’
      commissions); and

            

    

     

    
      	
               
      

            	
              (c)

            	
              with
      respect to any issuance of Debt, the aggregate cash proceeds received by
      any Loan Party pursuant to such issuance, net of the direct costs of such
      issuance (including up-front, underwriters’ and placement
      fees).

            

    

    
      
         

      

      
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    Non-U.S. Participant
- see Section
7.6(d).

     

    Non-Use Fee Rate
means one-half of one percent (0.50%).

     

    Note means a
promissory note substantially in the form of Exhibit
A.

     

    Notice of Borrowing -
see Section
2.2.2.

     

    Notice of
Conversion/Continuation - see Section
2.2.3.

     

    Obligors shall mean
the Company, its Domestic Subsidiaries and the Immaterial
Subsidiaries.

     

    Obligations means all
obligations (monetary (including post-petition interest, allowed or not) or
otherwise) of any Loan Party under this Agreement and any other Loan Document
including Attorney Costs and any reimbursement obligations of each Loan Party in
respect of L/C Obligations and surety bonds, all Hedging Obligations permitted
hereunder which are owed to any Lender, and all Bank Products Obligations, all
in each case howsoever created, arising or evidenced, whether direct or
indirect, absolute or contingent, now or hereafter existing, or due or to become
due.

     

    OFAC - see Section
10.4.

     

    Orderly Liquidation
Value shall mean (a) the in place orderly liquidation value, as
determined by the most recent appraisal prepared for Lenders, or (b) in the case
of assets not subject to such appraisals, the book value of such
assets.

     

    Outstanding Existing
Revolving Loan Balance – see Section
2.1.1.

     

    Operating Lease means
any lease of (or other agreement conveying the right to use) any real or
personal property by any Loan Party, as lessee, other than any Capital
Lease.

     

    PBGC means the
Pension Benefit Guaranty Corporation and any entity succeeding to any or all of
its functions under ERISA.

     

    Participant - see
Section
15.6.2.

     

    Pension Plan means a
“pension plan”, as such term is defined in Section 3(2) of ERISA, which is
subject to Title IV of ERISA or the minimum funding standards of ERISA (other
than a Multiemployer Pension Plan), and as to which the Company or any member of
the Controlled Group may have any liability, including any liability by reason
of having been a substantial employer within the meaning of Section 4063 of
ERISA at any time during the preceding five years, or by reason of being deemed
to be a contributing sponsor under Section 4069 of ERISA.

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    Perfection
Certificate means any UCC-1 financing statement or amendment thereto,
assignment, control agreement or other like instrument filed, signed or
delivered to a secured creditor to perfect a Lien or security interest in
personal property pledged as collateral pursuant to, and as required by, the
Illinois Commercial Code or other applicable law related thereto.

     

    Permitted Lien means
a Lien expressly permitted hereunder pursuant to Section
11.2.

     

    Permitted Minority
Investments means all investments, however so held, to acquire, purchase
or obtain interests of less than 50% in Persons engaged in the tire and/or wheel
business made by the Obligors pursuant to Section
11.11(c).

     

    Permitted Redemptions
means all voluntary prepayments, purchases, repurchases and redemptions of the
Company’s Common Stock or Senior Notes made by the Company pursuant to Section
11.4(vi).

     

    Permitted Refinancing
means any renewal, extension, refunding, refinancing, replacement, defeasance or
discharge of the Senior Notes or other Material Debt by the Company or any of
its Subsidiaries, so long as the principal amount thereof is not increased nor
the weighted average life to maturity thereof decreased.

     

    Person means any
natural person, corporation, partnership, trust, limited liability company,
association, governmental authority or unit, or any other entity, whether acting
in an individual, fiduciary or other capacity.

     

    Pricing Grid shall
mean the pricing set forth below based on the Availability
Percentage:

     

    Availability                                                      Base
Rate                                LIBOR                      L/C

    Percentage                                                      Margin                                Margin                      Fee Rate

    

    Less than
or equal to
20%                                    0%                                2.00%                      2.00%

     

    Greater
than 20% and less

    than or
equal to
40%                                         0.25%                                2.25%                      2.25%

     

    Greater
than 40% and less

    than or
equal to
60%                                         0.50%                                2.50%                      2.50%

     

    Greater
than 60% and less

    than or
equal to
80%                                         0.75%                                2.75%                      2.75%

     

    Greater than
80%                      
                         1.00%                                3.00%                      3.00%

    

    Prime Rate means, for
any day, the rate of interest in effect for such day as publicly announced from
time to time by the Administrative Agent as its prime commercial rate (whether
or not such rate is actually charged by the Administrative Agent), which is not
intended to be the

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    Administrative
Agent’s lowest or most favorable rate of interest at any one
time.  Any change in the Prime Rate announced by the Administrative
Agent shall take effect at the opening of business on the day specified in the
public announcement of such change; provided that the
Administrative Agent shall not be obligated to give notice of any change in the
Prime Rate.

     

    Pro Rata Share
means:

     

    
      	
               
      

            	
              (a)

            	
              with
      respect to a Lender’s obligation to make Revolving Loans, participate in
      L/C Obligations, reimburse the Issuing Lender, and receive payments of
      principal, interest, fees, costs, and expenses with respect thereto,
      (x) prior to the Revolving Commitment being terminated or reduced to
      zero, the percentage, carried out to nine decimal places, obtained by
      dividing (i) such Lender’s Commitment, by (ii) the aggregate Revolving
      Commitment of all Lenders and (y) from and after the time the Revolving
      Commitment has been terminated or reduced to zero, the percentage, carried
      out to nine decimal places, obtained by dividing (i) the aggregate unpaid
      principal amount of such Lender’s Revolving Outstandings by (ii) the
      aggregate unpaid principal amount of all Revolving
      Outstandings;

            

    

     

    
      	
               
      

            	
              (b)

            	
              with
      respect to all other matters as to a particular Lender, the percentage,
      carried out to nine decimal places, obtained by dividing (i) such
      Lender’s Commitment, by (ii) the aggregate amount of Revolving Commitment
      of all Lenders; provided that
      in the event the Commitments have been terminated or reduced to zero, Pro
      Rata Share shall be the percentage, carried out to nine decimal places,
      obtained by dividing (A) the principal amount of such Lender’s Revolving
      Outstandings by (B) the principal amount of all outstanding Revolving
      Outstandings.

            

    

     

    Reaffirmation
Agreement means the Reaffirmation and Amendment to Guaranty and
Collateral Agreement dated as of the Restatement Date by and among the Loan
Parties and the Administrative Agent.

     

    Regulation D means
Regulation D of the FRB.

     

    Regulation U means
Regulation U of the FRB.

     

    Reportable Event
means a reportable event as defined in Section 4043 of ERISA and the regulations
issued thereunder as to which the PBGC has not waived the notification
requirement  of Section 4043(a), or the failure of a Pension Plan to
meet the minimum funding standards of Section 412 of the Code (without regard to
whether the Pension Plan is a plan described in Section 4021(a)(2) of ERISA) or
under Section 302 of ERISA.

     

    Required Lenders
means, at any time, Lenders whose Pro Rata Shares exceed 662⁄3%; provided that the Pro
Rata Share held or deemed held by, any Defaulting Lender shall be excluded for
purposes of making a determination of Required Lenders.

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    Restatement Date -
see Section
12.1.

     

    Revolving Commitment
means $150,000,000, as reduced from time to time pursuant to Section 6.1 or
increased from time to time pursuant to Section
2.1.2.

     

    Revolving Loan - see
Section
2.1.1.

     

    Revolving Loan
Availability means that the lesser of (i) the Revolving Commitment, and
(ii) the Borrowing Base.

     

    Revolving Loan Excess
Availability means, at any time, the Revolving Loan Availability minus
Revolving Outstandings.

     

    Revolving
Outstandings means, at any time, the sum of (a) the aggregate principal
amount of all outstanding Revolving Loans, plus (b) the L/C
Obligations.

     

    SEC means the
Securities and Exchange Commission or any other governmental authority
succeeding to any of the principal functions thereof.

     

    Senior Note Indenture
means the Indenture dated as of December 28, 2006 between the Company, each of
the guarantors party thereto, and U.S. Bank National Association, as
trustee.

     

    Senior Notes means
the $200,000,000 Senior Unsecured Notes due 2012 issued by the Company in 2006
pursuant to the Senior Note Indenture.

     

    Senior Officer means,
with respect to any Loan Party, any of the chief executive officer, the chief
financial officer, the chief operating officer, secretary or the treasurer of
such Loan Party.

     

    Subordinated Debt
means the Foreign Affiliate Loans and any other unsecured consensual Debt of the
Company which has subordination terms, covenants, pricing and other terms which
have been approved in writing by the Required Lenders.

     

    Subordinated Debt
Documents means all documents and instruments relating to the
Subordinated Debt and all amendments and modifications thereof.

     

    Subordination
Agreements means all subordination agreements executed by a holder of
Subordinated Debt in favor of the Administrative Agent and the Lenders from time
to time on or after the Closing Date.

     

    Subsidiary means,
with respect to any Person, a corporation, partnership, limited liability
company or other entity of which such Person owns, directly or indirectly, such
number of outstanding Capital Securities as have more than 50% of the ordinary
voting power for the

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

    election
of directors or other managers of such corporation, partnership, limited
liability company or other entity.  Unless the context otherwise
requires, each reference to Subsidiaries herein shall be a reference to
Subsidiaries of the Company.

     

    Taxes means any and
all present and future taxes, duties, levies, imposts, deductions, assessments,
charges or withholdings, and any and all liabilities (including interest and
penalties and other additions to taxes) with respect to the foregoing, but
excluding Excluded Taxes.

     

    Terminated Lender –
see Section
5.1.2.

     

    Termination Date
means the earlier to occur of (a) January 30, 2012; or (b) such other date on
which the Commitment terminates pursuant to Section 6 or 13.

     

    Termination Event
means, with respect to a Pension Plan that is subject to Title IV of ERISA, (a)
a material Reportable Event, (b) the withdrawal of Company or any other member
of the Controlled Group from such Pension Plan during a plan year in which
Company or any other member of the Controlled Group was a “substantial employer”
as defined in Section 4001(a)(2) of ERISA which has a Material Adverse Effect,
or was deemed such under Section 4068(f) of ERISA, (c) the termination of such
Pension Plan, the filing of a notice of intent to terminate the Pension Plan or
the treatment of an amendment of such Pension Plan as a termination under
Section 4041 of ERISA which has a Material Adverse Effect, (d) the institution
by the PBGC of proceedings to terminate such Pension Plan which has a Material
Adverse Effect or (e) any event or condition that might constitute grounds under
Section 4042 of ERISA for the termination of, or appointment of a trustee to
administer, such Pension Plan which has a Material Adverse Effect.

     

    Titan Europe means
Titan Europe Plc, a United Kingdom company, whose principal activity is
manufacturing and selling steel wheels, undercarriage components and assemblies
for tracked and wheeled “off road” vehicles in the agricultural, construction,
and mining industries.

     

    Total Plan Liability
means, at any time, the present value of all vested and unvested accrued
benefits under all Pension Plans, determined as of the then most recent
valuation date for each Pension Plan, using PBGC actuarial assumptions for
single employer plan terminations.

     

    Type - see Section
2.2.1.

     

    UCC is defined in the
Guaranty and Collateral Agreement.

     

    Unfunded Liability
means the amount (if any) by which the present value of all vested and unvested
accrued benefits under all Pension Plans exceeds the fair market value of all
assets allocable to those benefits, all determined as of the then most recent
valuation date for each Pension Plan, using PBGC actuarial assumptions for
single employer plan terminations.

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

    Virginia Facility
means that facility currently occupied by Titan Wheel Corporation
of  Virginia as its principal place of business located at 227 Allison
Gap Road, Saltville, Virginia.

     

    Withholding
Certificate - see Section
7.6(d).

     

    Wholly-Owned
Subsidiary means, as to any Person, a Subsidiary all of the Capital
Securities of which (except directors’ qualifying Capital Securities) are at the
time directly or indirectly owned by such Person and/or another Wholly-Owned
Subsidiary of such Person.

     

    1.2 Other Interpretive
Provisions.  (a)  The meanings of defined terms are
equally applicable to the singular and plural forms of the defined
terms.

     

    (b) Section, Annex,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.

     

    (c) The term
“including” is not limiting and means “including without
limitation.”

     

    (d) In the
computation of periods of time from a specified date to a later specified date,
the word “from” means “from and including”; the words “to” and “until” each mean
“to but excluding”, and the word “through” means “to and
including.”

     

    (e) Unless
otherwise expressly provided herein, (i) references to agreements
(including this Agreement and the other Loan Documents) and other contractual
instruments shall be deemed to include all subsequent amendments, restatements,
supplements and other modifications thereto, but only to the extent such
amendments, restatements, supplements and other modifications are not prohibited
by the terms of any Loan Document, and (ii) references to any statute or
regulation shall be construed as including all statutory and regulatory
provisions amending, replacing, supplementing or interpreting such statute or
regulation.

     

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

     

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

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

    
      	
              SECTION
      2  

            	
              COMMITMENTS
      OF THE LENDERS; BORROWING, CONVERSION AND LETTER OF CREDIT
      PROCEDURES.

            

    

     

    2.1 Commitments.  On
and subject to the terms and conditions of this Agreement, each of the Lenders,
severally and for itself alone, agrees to make loans to, and to issue or
participate in letters of credit for the account of, the Company as
follows:

     

    2.1.1 Revolving
Commitment.  Each Lender with a Revolving Commitment agrees to
make loans on a revolving basis (“Revolving Loans”)
from time to time until the Termination Date in such Lender’s Pro Rata Share of
such aggregate amounts as the Company may request from all Lenders; provided that the
Revolving Outstandings will not at any time exceed Revolving Loan
Availability.  Each of the parties hereto acknowledges and agrees that
the Revolving Outstandings on the Restatement Date are equal to $30,000,000
consisting of $25,000,000 outstanding Revolving Loans and $5,000,000 L/C
Obligations (together, the "Outstanding Existing
Revolving Loan Balance"); provided, that on the
Restatement Date, the Company intends to repay all $25,000,000 of outstanding
Revolving Loans.  Each of the parties hereto further acknowledges and
agrees that on the Restatement Date, the obligations of the Company with respect
to the "Revolving Commitment" and "Revolving Loans" under the Existing Credit
Agreement shall continue as the Revolving Commitment and the Revolving Loans,
respectively, hereunder. On the Restatement Date, each Revolving Lender will
make a Revolving Loan in an amount equal to its Pro Rata Share of the
Outstanding Existing Revolving Loan Balance with the proceeds thereof being paid
on a pro rata revolving basis, to the extent necessary to properly reflect their
respective Revolving Commitments, to Lenders who were Revolving Lenders under
the Existing Credit Agreement and who remain Revolving Lenders on and after the
Restatement Date.  Within the limits and provisions of this Agreement
Company may make such borrowings, repay such advances, and make additional
borrowing under the Loan.

     

    2.1.2 Increase in
Commitments.

     

    (a) Request for
Increase.  Provided there exists no Default, upon notice to the
Administrative Agent (which shall promptly notify the Lenders), the Company may
from time to time, request an increase in the Revolving Commitment by an amount
(for all such requests) not exceeding $100,000,000; provided that (i) any such
request for an increase shall be in a minimum amount of $50,000,000, and (ii)
the Company may make a maximum of two such requests that are accepted by the
Lenders.  At the time of sending such notice, the Company (in
consultation with the Administrative Agent) shall specify the time period within
which each Lender is requested to respond (which shall in no event be less than
ten Business Days from the date of delivery of such notice to the Administrative
Agent).

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

    (b) Lender Elections to
Increase.  Each Lender shall notify the Administrative Agent
within such time period whether or not it agrees to increase its Revolving
Commitment and, if so, whether by an amount equal to, greater than, or less than
its Pro Rata Share of such requested increase.  Any Lender not
responding within such time period shall be deemed to have declined to increase
its Revolving Commitment.

     

    (c) Notification by
Administrative Agent; Additional Lenders.  The Administrative
Agent shall notify the Company and each Lender of the Lenders’ responses to each
request made hereunder.

     

    (d) Effective Date and
Allocations.  If the Lenders by their collective responses
agree to increase their Revolving Commitments by not less than the amount the
Company has requested, then on the date that the Administrative Agent and the
Company shall agree upon (the “Increase Effective
Date”) the Revolving Commitment shall be increased in accordance with the
Company’s request, with the final allocation of such increase among the Lenders
as agreed by the Company and the Administrative Agent.  The
Administrative Agent shall promptly notify the Company and the Lenders of the
final allocation of such increase and the Increase Effective
Date.  Conversely, if the Lenders do not agree, collectively, to
increase their Revolving Commitments in an amount equal to or greater than the
Company’s request, there will be no such increase and the Administrative Agent
shall so advise the Company.

     

    (e) Conditions to Effectiveness
of Increase.  As a condition precedent to such increase, the
Company shall deliver to the Administrative Agent a certificate of each Loan
Party dated as of the Increase Effective Date (in a sufficient number to provide
an original for each Lender) signed by a Senior Officer of such Loan Party (i)
certifying and attaching the resolutions adopted by such Loan Party approving or
consenting to such increase, and (ii) in the case of the Company, certifying
that, before and after giving effect to such increase, (A) the representations
and warranties contained in Section 9 and the
other Loan Documents are true and correct on and as of the Increase Effective
Date, except to the extent that such representations and warranties specifically
refer to an earlier date, in which case they are true and correct as of such
earlier date, and except that for purposes of this Section 2.1.2, the
representations and warranties contained in Section 9.4 shall be
deemed to refer to the most recent financial statements furnished pursuant to
Section 10.1.1
or 10.1.2, and
(B) no Default exists.  The Company shall execute and deliver to the
Lenders as of the Increase Effective Date new Notes in the amount of the
increased Revolving Commitment with the Pro Rata Share for each Lender being
fixed in accordance with the final allocation as determined
above.  Contemporaneously therewith, the Lender shall cancel and
return to the Company the Notes which were previously delivered to
them.  Simultaneously with the Increase Effective Date, the Company
shall be deemed to have borrowed under the new Notes a sum equal to the amount
needed to pay off the old/prior notes (including any such due under Section 8.4 so as to
reallocate

    
      
         

      

      
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    the
Revolving Outstandings prior to the increase, pro rata among the Lenders in
accordance with each Lender’s Revolving Commitment after the
increase.

     

    (f) Conflicting
Provisions.  This Section shall supersede any provisions in
Sections 2.3,
7.5, or 15.1 to the
contrary.

     

    2.1.3 L/C
Commitment.  (a)  Subject to Section 2.1.3(b) and
Section 2.3.1,
the Issuing Lender agrees to issue letters of credit, in each case containing
such terms and conditions as are permitted by this Agreement and are reasonably
satisfactory to the Issuing Lender (each, a “Letter of Credit”),
at the request of and for the account of the Company from time to time before
the scheduled Termination Date and, as more fully set forth in Section 2.3.2,
each Lender agrees to purchase a participation in each such Letter of Credit;
provided that
(i) the L/C Obligations shall not at any time exceed $30,000,000, (ii) the
Revolving Outstandings shall not at any time exceed Revolving Loan Availability
and (iii) the Issuing Lender shall not be required to issue any Letter of Credit
at any time that a Defaulting Lender exists unless and until either (a) a New
Lender has replaced the Defaulting Lender in accordance with Section 15.1.2 or (b)
the Company has made arrangements satisfactory to the Issuing Lender to
eliminate any risk to the Issuing Lender from all Defaulting Lenders, including,
without limitation, by cash collateralizing the Defaulting Lenders’ Pro Rata
Share of all outstanding L/C Obligations.

     

    (b)           The
Issuing Lender shall not issue any Letter of Credit, if (i) the expiry date of
such requested Letter of Credit would occur more than twelve months after the
date of issuance, unless the Required Lenders have approved such expiry date, or
(ii) the expiry date of such requested Letter of Credit would occur after the
Letter of Credit Expiration Date, unless all the Lenders have approved such
expiry date.

     

    2.2 Loan
Procedures.

     

    2.2.1 Various Types of
Loans.  Each Revolving Loan shall be divided into tranches
which are either a Base Rate Loan or a LIBOR Loan (each a “Type” of Loan), as
the Company shall specify in the related notice of borrowing or conversion
pursuant to Section 2.2.2
or 2.2.3.  LIBOR
Loans having the same Interest Period which expire on the same day are sometimes
called a “Group” or
collectively “Groups”.  Base
Rate Loans and LIBOR Loans may be outstanding at the same time, provided that not
more than eight (8) different Groups of LIBOR Loans shall be outstanding at any
one time.  All borrowings, conversions and repayments of Revolving
Loans shall be effected so that each Lender will have a ratable share (according
to its Pro Rata Share) of all Types and Groups of
Loans.  Notwithstanding the foregoing or any other provision of this
Agreement, the Company may not select any Interest Period for a LIBOR Loan which
is longer than the date or dates selected by the Administrative Agent from time
to time for any syndication of the Loans.

     

    2.2.2 Borrowing
Procedures.  The Company shall give written notice (each such
written notice, a “Notice of Borrowing”)
substantially in the form of Exhibit E or
telephonic

    
      
         

      

      
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     notice
(followed immediately by a Notice of Borrowing) to the Administrative Agent of
each proposed borrowing not later than (a) in the case of a Base Rate
borrowing, 12:00 P.M., Chicago time, on the proposed date of such
borrowing, and (b) in the case of a LIBOR Rate borrowing, 12:00 P.M.,
Chicago time, at least three Business Days prior to the proposed date of such
borrowing.  Each such notice shall be effective upon receipt by the
Administrative Agent, shall be irrevocable, and shall specify the date, amount
and Type of borrowing and, in the case of a LIBOR borrowing, the initial
Interest Period therefor.  Promptly upon receipt of such notice, the
Administrative Agent shall advise each Lender thereof.  Not later than
1:00 P.M., Chicago time, on the date of a proposed borrowing, each Lender shall
provide the Administrative Agent at the office specified by the Administrative
Agent with immediately available funds covering such Lender’s Pro Rata Share of
such borrowing and, so long as the Administrative Agent has not received written
notice that the conditions precedent set forth in Section 11 with
respect to such borrowing have not been satisfied, the Administrative Agent
shall pay over the funds received by the Administrative Agent to the Company on
the requested borrowing date.  Each borrowing shall be on a Business
Day.  Each Base Rate borrowing shall be in an aggregate amount of at
least Five Hundred Thousand and No/100 Dollars ($500,000.00) and an integral
multiple of One Hundred Thousand and No/100 Dollars ($100,000.00), and each
LIBOR borrowing shall be in an aggregate amount of at least One Million and
No/100 Dollars ($1,000,000.00) and an integral multiple of at least One Hundred
Thousand and No/100 Dollars ($100,000.00).

     

    2.2.3 Conversion and Continuation
Procedures.  (a)  Subject to Section 2.2.1, the
Company may, upon irrevocable written notice to the Administrative Agent in
accordance with clause
(b) below:

     

    (A) elect, as
of any Business Day, to convert any Loans (or any part thereof in an aggregate
amount not less than Five Hundred Thousand and No/100 Dollars ($500,000.00) or a
higher integral multiple of One Hundred Thousand and No/100 Dollars
($100,000.00) into Loans of the other Type; or

     

    (B) elect, as
of the last day of the applicable Interest Period, to continue any LIBOR Loans
having Interest Periods expiring on such day (or any part thereof in an
aggregate amount not less than One Million and No/100 Dollars ($1,000,000.00) or
a higher integral multiple of One Hundred Thousand and No/100 Dollars
($100,000.00) for a new Interest Period;

     

    provided that after
giving effect to any prepayment, conversion or continuation, the aggregate
principal amount of each Group of LIBOR Loans shall be at least One Million and
No/100 Dollars ($1,000,000.00) and an integral multiple of One Hundred Thousand
and No/100 Dollars ($100,000.00).

     

    (b) The
Company shall give written notice (each such written notice, a “Notice of
Conversion/Continuation”) substantially in the form of Exhibit F or
telephonic notice (followed immediately by a Notice of Conversion/Continuation)
to the

    
      
         

      

      
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    Administrative
Agent of each proposed conversion or continuation not later than (i) in the case
of conversion into Base Rate Loans, 12:00 P.M., Chicago time, on the proposed
date of such conversion and (ii) in the case of conversion into or continuation
of LIBOR Loans, 12:00 P.M., Chicago time, at least three Business Days prior to
the proposed date of such conversion or continuation, specifying in each
case:

     

    (A) the
proposed date of conversion or continuation;

     

    (B) the
aggregate amount of Loans to be converted or continued;

     

    (C) the Type
of Loans resulting from the proposed conversion or continuation;
and

     

    (D) in the
case of conversion into, or continuation of, LIBOR Loans, the duration of the
requested Interest Period therefor.

     

    (c) If upon
the expiration of any Interest Period applicable to LIBOR Loans, the Company has
failed to select timely a new Interest Period to be applicable to such LIBOR
Loans, the Company shall be deemed to have elected to convert such LIBOR Loans
into Base Rate Loans effective on the last day of such Interest
Period.

     

    (d) The
Administrative Agent will promptly notify each Lender of its receipt of a notice
of conversion or continuation pursuant to this Section 2.2.3 or, if
no timely notice is provided by the Company, of the details of any automatic
conversion.

     

    (e) Any
conversion of a LIBOR Loan on a day other than the last day of an Interest
Period therefor shall be subject to Section
8.4.

     

    2.3 Letter of Credit
Procedures.

     

    2.3.1 L/C
Applications.  The Company shall give notice to the
Administrative Agent and the Issuing Lender of the proposed issuance of each
Letter of Credit on a Business Day which is at least three Business Days (or
such lesser number of days as the Administrative Agent and the Issuing Lender
shall agree in any particular instance in their sole discretion) prior to the
proposed date of issuance of such Letter of Credit.  Each such notice
shall be accompanied by an L/C Application, duly executed by the Company and in
all respects satisfactory to the Administrative Agent and the Issuing Lender,
together with such other documentation, including any Issuer Documents, as the
Administrative Agent or the Issuing Lender may request in support thereof, it
being understood that each L/C Application shall specify, among other things,
the date on which the proposed Letter of Credit is to be issued, the expiration
date of such Letter of Credit and if such Letter of Credit is to be
transferable.  Any Letter of Credit outstanding after the scheduled
Termination Date which is Cash Collateralized for the benefit of the Issuing
Lender shall be the sole responsibility of the Issuing Lender.  So
long as the Issuing Lender has

    
      
         

      

      
        29

        
          

        

      

      
         

      

    

    not
received written notice that the conditions precedent set forth in Section 12 with
respect to the issuance of such Letter of Credit have not been satisfied, the
Issuing Lender shall issue such Letter of Credit on the requested issuance
date.  The Issuing Lender shall promptly advise the Administrative
Agent of the issuance of each Letter of Credit and of any amendment thereto,
extension thereof or event or circumstance changing the amount available for
drawing thereunder.  In the event of any inconsistency between the
terms of the any L/C Application or Issuer Document and the terms of this
Agreement, the terms of this Agreement shall control.

     

    2.3.2 Participations in Letters of
Credit.  Concurrently with the issuance of each Letter of
Credit, the Issuing Lender shall be deemed to have sold and transferred to each
Lender with a Revolving Commitment, and each such Lender shall be deemed
irrevocably and unconditionally to have purchased and received from the Issuing
Lender, without recourse or warranty, an undivided interest and participation,
to the extent of such Lender’s Pro Rata Share, in such L/C
Obligation.  If the Company does not pay any L/C Obligation when due,
the Company shall be deemed to have immediately requested that the Lenders make
a Revolving Loan which is a Base Rate Loan in a principal amount equal to such
L/C Obligation.  The Administrative Agent shall promptly notify such
Lenders of such deemed request and, without the necessity of compliance with the
requirements of Section 2.2.2, 12.2 or otherwise
such Lender shall make available to the Administrative Agent its Pro Rata Share
of such Loan.  The proceeds of such Loan shall be paid over by the
Administrative Agent to the Issuing Lender for the account of the Company in
satisfaction of such reimbursement obligations.  For the purposes of
this Agreement, the unparticipated portion of each L/C Obligation shall be
deemed to be the Issuing Lender’s “participation” therein.  The
Issuing Lender hereby agrees, upon request of the Administrative Agent to
deliver to the Administrative Agent a list of all outstanding Letters of Credit
issued by the Issuing Lender, together with such information related thereto as
the Administrative Agent may reasonably request.

     

    2.3.3 Reimbursement
Obligations.  (a) The Company hereby unconditionally and
irrevocably agrees to reimburse the Issuing Lender for each payment or
disbursement made by the Issuing Lender under any Letter of Credit honoring any
demand for payment made by the beneficiary thereunder, in each case on the date
that such payment or disbursement is made.  Any amount not reimbursed
on the date of such payment or disbursement shall bear interest from the date of
such payment or disbursement to the date that the Issuing Lender is reimbursed
by the Company therefor, payable on demand, at a rate per annum equal to the
Base Rate from time to time in effect plus the Base Rate
Margin from time to time in effect plus, beginning on
the third Business Day after receipt of notice from the Issuing Lender of such
payment or disbursement, 2%.  The Issuing Lender shall notify the
Company and the Administrative Agent whenever any demand for payment is made
under any Letter of Credit by the beneficiary thereunder; provided that the
failure of the Issuing Lender to so notify the Company or the Administrative
Agent shall not affect the rights of the Issuing Lender or the Lenders in any
manner whatsoever.

    
      
         

      

      
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    (b)           The
Company’s reimbursement obligations hereunder shall be irrevocable and
unconditional under all circumstances, including (a) any lack of validity or
enforceability of any Letter of Credit, this Agreement or any other Loan
Document, (b) the existence of any claim, set-off, defense or other right which
any Loan Party may have at any time against a beneficiary named in a Letter of
Credit, any transferee of any Letter of Credit (or any Person for whom any such
transferee may be acting), the Administrative Agent, the Issuing Lender, any
Lender or any other Person, whether in connection with any Letter of Credit,
this Agreement, any other Loan Document, the transactions contemplated herein or
any unrelated transactions (including any underlying transaction between any
Loan Party and the beneficiary named in any Letter of Credit), (c) the validity,
sufficiency or genuineness of any document which the Issuing Lender has
determined complies on its face with the terms of the applicable Letter of
Credit, even if such document should later prove to have been forged,
fraudulent, invalid or insufficient in any respect or any statement therein
shall have been untrue or inaccurate in any respect, or (d) the surrender or
impairment of any security for the performance or observance of any of the terms
hereof.  Without limiting the foregoing, no action or omission
whatsoever by the Administrative Agent or any Lender (excluding any Lender in
its capacity as the Issuing Lender) under or in connection with any Letter of
Credit or any related matters shall result in any liability of the
Administrative Agent or any Lender to the Company, or relieve the Company of any
of its obligations hereunder to any such Person.

    

    2.3.4 Funding by Lenders to
Issuing Lender.  If the Issuing Lender makes any payment or
disbursement under any Letter of Credit and (a) the Company has not reimbursed
the Issuing Lender through the Administrative Agent in full for such payment or
disbursement by 12:00 P.M., Chicago time, on the date of such payment or
disbursement, (b) a Revolving Loan may not be made in accordance with Section 2.3.2 or (c)
any reimbursement received by the Issuing Lender from the Company is or must be
returned or rescinded upon or during any bankruptcy or reorganization of the
Company or otherwise, each other Lender with a Revolving Commitment shall be
obligated to pay to the Administrative Agent for the account of the Issuing
Lender, its Pro Rata Share of such payment or disbursement (but no such payment
shall diminish the obligations of the Company under Section 2.3.3),
and, upon notice from the Issuing Lender, the Administrative Agent shall
promptly notify each other Lender thereof.  Each Lender irrevocably
and unconditionally agrees to so pay to the Administrative Agent in immediately
available funds for the Issuing Lender’s account the amount of such other
Lender’s Pro Rata Share of such payment or disbursement.  If and to
the extent any Lender shall not have made such amount available to the
Administrative Agent by 1:00 P.M., Chicago time, on the Business Day on which
such Lender receives notice from the Administrative Agent of such payment or
disbursement (it being understood that any such notice received after noon,
Chicago time, on any Business Day shall be deemed to have been received on the
next following Business Day), such Lender agrees to pay interest on such amount
to the Administrative Agent for the Issuing Lender’s account forthwith on
demand, for each day from the date such amount was to have been delivered to the
Administrative Agent to the date such amount is paid, at a rate per annum equal
to (a) for the first three days after demand, the Federal Funds Rate from time
to time in

    
      
         

      

      
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    effect
and (b) thereafter, the Base Rate from time to time in effect.  Any
Lender’s failure to make available to the Administrative Agent its Pro Rata
Share of any such payment or disbursement shall not relieve any other Lender of
its obligation hereunder to make available to the Administrative Agent such
other Lender’s Pro Rata Share of such payment, but no Lender shall be
responsible for the failure of any other Lender to make available to the
Administrative Agent such other Lender’s Pro Rata Share of any such payment or
disbursement.

     

    2.3.5 Existing Letters of
Credit.  The Letters of Credit outstanding on the Restatement
Date and listed on Schedule 2.3.5 hereto
(the “Existing Letters
of Credit”) were issued pursuant to the Existing Credit Agreement and
were the only letters of credit issued under the Existing Credit Agreement which
were outstanding as of the Restatement Date.  The Company, Issuing
Lender and each of the Lenders hereby agree with respect to the Existing Letters
of Credit that such Existing Letters of Credit, for all purposes under this
Agreement, including, without limitation, Sections 2.1.3 and
2.3.3, shall be
deemed to be Letters of Credit governed by the terms and conditions of this
Agreement.

     

    2.4 Letter of Credit
Amounts.  Unless otherwise specified herein, the amount of a
Letter of Credit at any time shall be deemed to be the stated amount of such
Letter of Credit in effect at such time; provided, however, that with
respect to any Letter of Credit that, by its terms or the terms of any Issuer
Document related thereto, provides for one or more automatic increases in the
stated amount thereof, the amount of such Letter of Credit shall be deemed to be
the maximum stated amount of such Letter of Credit after giving effect to all
such automatic increases, whether or not such maximum stated amount is in effect
at such time.

     

    2.5 Commitments
Several.  The failure of any Lender to make a requested Loan on
any date shall not relieve any other Lender of its obligation (if any) to make a
Loan on such date, but no Lender shall be responsible for the failure of any
other Lender to make any Loan to be made by such other Lender.

     

    2.6 Certain
Conditions.  Except as otherwise provided in this Agreement no
Lender shall have an obligation to make any Loan, or to permit the continuation
of or any conversion into any LIBOR Loan, and the Issuing Lender shall not have
any obligation to issue any Letter of Credit, if an Event of Default or Default
exists.

     

    SECTION
3 EVIDENCING
OF LOANS.

     

    3.1 Notes.  The
Loans of each Lender shall be evidenced by a Note, with appropriate insertions,
payable to the order of such Lender in a face principal amount equal to such
Lender’s Revolving Commitment.

     

    3.2 Recordkeeping.  The
Administrative Agent, on behalf of each Lender, shall record in its records, the
date and amount of each Loan made by each Lender, each repayment or conversion
thereof and, in the case of each LIBOR Loan, the dates on which each Interest
Period

    
      
         

      

      
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    for such
Loan shall begin and end.  The aggregate unpaid principal amount so
recorded shall be rebuttably presumptive evidence of the principal amount of the
Loans owing and unpaid.  The failure to so record any such amount or
any error in so recording any such amount shall not, however, limit or otherwise
affect the Obligations of the Company hereunder or under any Note to repay the
principal amount of the Loans hereunder, together with all interest accruing
thereon.

     

    SECTION
4 INTEREST.

     

    4.1 Interest
Rates.  The Company promises to pay interest on the unpaid
principal amount of each Loan for the period commencing on the date of such Loan
until such Loan is paid in full as follows:

     

    (a) at all
times while such Loan is a Base Rate Loan, at a rate per annum equal to the sum
of the Base Rate from time to time in effect plus the Base Rate
Margin from time to time in effect; and

     

    (b) at all
times while such Loan is a LIBOR Loan, at a rate per annum equal to the sum of
the LIBOR Rate applicable to each Interest Period for such Loan plus the LIBOR Margin
from time to time in effect;

     

    provided that at any
time an Event of Default exists, and only as long as it continues, unless the
Required Lenders otherwise consent, the interest rate applicable to each Loan
shall be increased by 2% (and, in the case of Obligations not bearing interest,
such Obligations shall bear interest at the Base Rate applicable to Revolving
Loans plus 2%),
provided further that such
increase may thereafter be rescinded by the Required Lenders, notwithstanding
Section
15.1.  Notwithstanding the foregoing, upon the occurrence of an
Event of Default under Section 13.1.1 or 13.1.4, such increase
shall occur automatically.

     

    4.2 Interest Payment
Dates.  Accrued interest on each Base Rate Loan shall be
payable in arrears on the first day of each calendar month, upon a prepayment of
such Loan and at maturity.  Accrued interest on each LIBOR Loan shall
be payable on the last day of each Interest Period relating to such Loan, upon a
prepayment of such Loan, and at maturity.  After maturity, and at any
time an Event of Default exists, accrued interest on all Loans shall be payable
on demand.

     

    4.3 Setting and Notice of LIBOR
Rates.  The applicable LIBOR Rate for each Interest Period
shall be determined by the Administrative Agent, and notice thereof shall be
given by the Administrative Agent promptly to the Company and each
Lender.  Each determination of the applicable LIBOR Rate by the
Administrative Agent shall be conclusive and binding upon the parties hereto, in
the absence of demonstrable error.  The Administrative Agent shall,
upon written request of the Company or any Lender, deliver to the Company or
such Lender a statement showing the computations used by the Administrative
Agent in determining any applicable LIBOR Rate hereunder.

    
      
         

      

      
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    4.4 Computation of
Interest.  Interest shall be computed for the actual number of
days elapsed on the basis of a year of 365/366 days for purposes of each Base
Rate Loan, and 360 days for each LIBOR Loan.  The applicable interest
rate for each Base Rate Loan shall change simultaneously with each change in the
Base Rate.

     

    4.5 Interest under Existing
Credit Agreement.  The Company, Lenders and Administrative
Agent hereby agree that any and all accrued and unpaid interest on the “Loans”
under, and as such term is defined in, the Existing Credit Agreement shall be
due and payable, for the pro rata benefit of the Existing Lenders, on the
Restatement Date; provided, however, the Lenders agree to waive any fee due
pursuant to Section
8.4 arising from the prepayment of LIBOR Loans on the Restatement Date in
connection with the assumption and restatement of the Original Loans on the
Restatement Date.

     

    SECTION
5 FEES.

     

    5.1 Non-Use
Fee.  The Company agrees to pay to the Administrative Agent for
the account of each Lender a non-use fee (“Non-Use Fee”), for
the period from the Restatement Date to the Termination Date, at the Non-Use Fee
Rate of such Lender’s Pro Rata Share (as adjusted from time to time) of the
average daily unused amount of the Revolving Commitment calculated on a
quarterly basis.  For purposes of calculating usage under this
Section, the Revolving Commitment shall be deemed used to the extent of
Revolving Outstandings.  Such Non-Use Fee shall be payable in arrears
on the first day of each calendar quarter and on the Termination Date for any
period then ending for which such Non-Use Fee shall not have previously been
paid.  The Non-Use Fee shall be computed for the actual number of days
elapsed on the basis of a year of 360 days.

     

    5.2 Letter of Credit
Fees.  (a)  The Company agrees to pay to the
Administrative Agent for the account of each Lender a letter of credit fee for
each Letter of Credit equal to the L/C Fee Rate of such Lender’s Pro Rata Share
(as adjusted from time to time) of the undrawn amount of such Letter of Credit
(computed for the actual number of days elapsed on the basis of a year of 360
days); provided
that, unless the Required Lenders otherwise consent, the rate applicable to each
Letter of Credit shall be increased by 2% at any time, but only for so long as,
that an Event of Default exists.  Such letter of credit fee shall be
payable in arrears on the first day of each calendar quarter and on the
Termination Date (or such later date on which such Letter of Credit expires or
is terminated) for the period from the date of the issuance of each Letter of
Credit (or the last day on which the letter of credit fee was paid with respect
thereto) to the date such payment is due or, if earlier, the date on which such
Letter of Credit expired or was terminated.

     

    (b) In
addition, with respect to each Letter of Credit, the Company agrees to pay to
the Issuing Lender, for its own account, (i) such fees and expenses as the
Issuing Lender customarily requires in connection with the issuance,
negotiation, processing

    
      
         

      

      
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    and/or
administration of letters of credit in similar situations and (ii) a letter of
credit fronting fee in the amount equal to .125% per annum for each Letter of
Credit, computed on the daily amount available to be drawn under such Letter of
Credit on a quarterly basis in arrears.  Such fronting fee shall be
due and payable on the tenth Business Day after the end of each March, June,
September and December in respect of the most recently-ended quarterly period
(or portion thereof, in the case of the first payment), commencing with the
first such date to occur after the issuance of such Letter of Credit, on the
Termination Date and thereafter on demand.  For purposes of computing
the daily amount available to be drawn under any Letter of Credit, the amount of
such Letter of Credit shall be determined in accordance with Section
2.4.

     

    5.3 Administrative Agent’s and
Lenders’ Fees.  The Company agrees to pay the Administrative
Agent and the Lenders the fees set forth in the Fee Letter.

     

    5.4 Fees, Charges and Expenses
under Existing Credit Agreement.  The Company, Lenders and
Administrative Agent hereby agree that any and all accrued and unpaid fees,
charges and expenses owing by any Loan Party to Administrative Agent or any
Lender under the Existing Credit Agreement or any of the agreements or documents
contemplated thereby shall be due and payable, for the pro rata benefit of the
Existing Lenders, on the Restatement Date.

     

    
      	
              SECTION
      6  

            	
              REDUCTION
      OR TERMINATION OF THE REVOLVING COMMITMENT;
  PREPAYMENTS.

            

    

     

    6.1 Reduction or Termination of
the Revolving Commitment.

     

    6.1.1 Voluntary Reduction or
Termination of the Revolving  Commitment.  The
Company may from time to time on at least five (5) Business Days’ prior written
notice received by the Administrative Agent (which shall promptly advise each
Lender thereof) permanently reduce the Revolving Commitment to an amount not
less than the Revolving Outstandings.  Any such reduction shall be in
an amount not less than One Million and No/100 Dollars ($1,000,000.00) or a
higher integral multiple of One Hundred Thousand and No/100 Dollars
($100,000.00).  Concurrently with any reduction of the Revolving
Commitment to zero, the Company shall pay all interest on the Revolving Loans,
all Non-Use Fees and all letter of credit fees and shall Cash Collateralize in
full all L/C Obligations.

     

    6.1.2 Mandatory Reductions of
Revolving Commitment.  On the date of a Mandatory Prepayment
Event under Section
6.2.2(a)(iii) hereof, the Revolving Commitment shall be reduced by the
amount of such mandatory prepayment; provided, however, such reduction shall not
exceed $100,000,000.  In the event of a Mandatory Prepayment Event
under Section
6.2.2(a)(i) or (ii) hereof, the Revolving Commitment shall not be reduced
by any amount.

    
      
         

      

      
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    6.1.3 All Reductions of the
Revolving Commitment.  All reductions of the Revolving
Commitment shall reduce the Commitments ratably among the Lenders according to
their respective Pro Rata Shares.

     

    6.2 Prepayments.

     

    6.2.1 Voluntary
Prepayments.  The Company may from time to time prepay the
Loans in whole or in part; provided that the
Company shall give the Administrative Agent (which shall promptly advise each
Lender) notice thereof not later than (i) three Business Days prior to any date
of prepayment of LIBOR Loans and (ii) 12:00 P.M., Chicago time, on the day of
such prepayment (which shall be a Business Day), specifying the Loans to be
prepaid and the date and amount of prepayment.  Any such partial
prepayment shall be in an amount equal to Five Hundred Thousand and No/100
Dollars ($500,000.00) or a higher integral multiple of One Hundred Thousand and
No/100 Dollars ($100,000.00) for Base Rate Loans and One Million and No/100
Dollars ($1,000,000.00) or a higher integral multiple of One Hundred Thousand
and No/100 Dollars ($100,000.00) for LIBOR Loans.

     

    6.2.2           Mandatory
Prepayments.

     

    (a) The
Company shall make a prepayment of the Loans until paid in full upon the
occurrence of any of the following (each a “Mandatory Prepayment
Event”) at the following times and in the following amounts (such
applicable amounts being referred to as “Designated
Proceeds”):

     

    
      	
               
      

            	
              (i)

            	
              Concurrently
      with the receipt by any Loan Party of any Net Cash Proceeds from any Asset
      Disposition, in an amount equal to 100% of such Net Cash
      Proceeds.

            

    

     

    
      	
               
      

            	
              (ii)

            	
              Concurrently
      with the receipt by any Loan Party of any Net Cash Proceeds from any
      issuance of Capital Securities of any Loan Party (excluding (x) any
      issuance of Capital Securities pursuant to any employee or director option
      program, benefit plan or compensation program; (y) any issuance by a
      Subsidiary to the Company or another Subsidiary to the Company or another
      Subsidiary or (z) if waived by the Required Lenders, any issuance of
      Capital Securities in connection with a Change of Control of any Loan
      Party), in an amount equal to 100% of such Net Cash Proceeds (except to
      the extent such proceeds are intended to be, and in fact are, reinvested
      within 180 days from such date of
issuance).

            

    

     

    
      	
               
      

            	
              (iii)

            	
              Concurrently
      with the receipt by any Loan Party of any Net Cash Proceeds from any
      issuance of any Debt of any Loan Party (excluding Debt permitted by Section 11.1(a)
      through (i) hereof), in
      an amount equal to

            

    

    
      
         

      

      
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    100% of
such Net Cash Proceeds to the extent not used for acquisitions by a Loan Party
within one hundred eighty (180) days thereafter.

     

    (b) If on any
day the Revolving Outstandings exceeds the Borrowing Base, the Company shall
immediately prepay Revolving Loans and/or Cash Collateralize the outstanding L/C
Obligations, or do a combination of the foregoing, in an amount sufficient to
eliminate such excess.

     

    (c) If on any
day on which the Revolving Commitment is reduced pursuant to Section 6.1.2 the
Revolving Outstandings exceeds the Revolving Commitment, the Company shall
immediately prepay Revolving Loans or Cash Collateralize the outstanding L/C
Obligations, or do a combination of the foregoing, in an amount sufficient to
eliminate such excess.

     

    6.3 Manner of
Prepayments.

     

    6.3.1 All
Prepayments.  Each voluntary partial prepayment shall be in a
principal amount of Five Hundred Thousand and No/100 Dollars ($500,000.00) or a
higher integral multiple of One Hundred Thousand and No/100 Dollars
($100,000.00) for Base Rate Loans and One Million and No/100 Dollars
($1,000,000.00) or a higher integral multiple of One Hundred Thousand and No/100
Dollars ($100,000.00) for LIBOR Loans.  Any partial prepayment of a
Group of LIBOR Loans shall be subject to the proviso of Section
2.2.3(a).  Any prepayment of a LIBOR Loan on a day other than
the last day of an Interest Period therefor shall include interest on the
principal amount being repaid and shall be subject to Section
8.4.  Except as otherwise provided by this Agreement, all
principal payments in respect of the Loans shall be applied first, to repay
outstanding Base Rate Loans and then to repay outstanding LIBOR Rate Loans in
direct order of Interest Period maturities.

     

    6.4 Repayments.

     

    6.4.1 Revolving
Loans.  The Revolving Loans of each Lender shall be paid in
full and the Revolving Commitment shall terminate on the Termination
Date.

     

    SECTION
7 MAKING
AND PRORATION OF PAYMENTS; SETOFF; TAXES.

     

    7.1 Making of
Payments.  All payments of principal or interest on the Notes,
and of all fees, shall be made by the Company to the Administrative Agent in
immediately available funds at the office specified by the Administrative Agent
not later than 1:00 p.m., Chicago time, on the date due; and funds received
after that hour shall be deemed to have been received by the Administrative
Agent on the following Business Day.  The Administrative Agent shall
promptly remit to each Lender its share of all such payments received in
collected funds by the Administrative Agent for the account of such
Lender.  All payments under Section 8.1 shall be

    
      
         

      

      
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    made by
the Company directly to the Lender entitled thereto without setoff, counterclaim
or other defense.

     

    7.2 Application of Certain
Payments.  So long as no Default  or Event of Default
has occurred and is continuing, (a) payments matching specific scheduled
payments then due shall be applied to those scheduled payments and (b) voluntary
and mandatory prepayments shall be applied as set forth in Sections 6.2 and
6.3.  After
the occurrence and during the continuance of an Default or Event of Default, all
amounts collected or received by the Administrative Agent or any Lender as
proceeds from the sale of, or other realization upon, all or any part of the
collateral shall be applied as the Administrative Agent shall determine in their
discretion or, in the absence of a specific determination by the Administrative
Agent, as set forth in the Guaranty and Collateral
Agreement.  Concurrently with each remittance to any Lender of its
share of any such payment, the Administrative Agent shall advise such Lender as
to the application of such payment.

     

    7.3 Due Date
Extension.  If any payment of principal or interest with
respect to any of the Loans, or of any fees, falls due on a day which is not a
Business Day, then such due date shall be extended to the immediately following
Business Day (unless, in the case of a LIBOR Loan, such immediately following
Business Day is the first Business Day of a calendar month, in which case such
due date shall be the immediately preceding Business Day) and, in the case of
principal, additional interest shall accrue and be payable for the period of any
such extension.

     

    7.4 Setoff.  The
Company agrees that the Administrative Agent and each Lender has all rights of
set-off and bankers’ lien provided by applicable law, and in addition thereto,
the Company agrees that at any time any Event of Default exists, the
Administrative Agent and each Lender may apply to the payment of any Obligations
of the Company hereunder, whether or not then due, any and all balances,
credits, deposits, accounts or moneys of the Company then or thereafter with the
Administrative Agent or such Lender.

     

    7.5 Proration of
Payments.  If any Lender shall obtain any payment or other
recovery (whether voluntary, involuntary, by application of offset or
otherwise), on account of (a) principal of or interest on any Loan, but
excluding (i) any payment pursuant to Section 5, Section 8.7 or 15.6, (ii) payments
of interest on any Affected Loan or  (b) its participation in any L/C
Obligation in excess of its applicable Pro Rata Share of payments and other
recoveries obtained by all Lenders on account of principal of and interest on
the Loans (or such participation) then held by them, then such Lender shall
purchase from the other Lenders such participations in the Loans (or
sub-participations in L/C Obligations) held by them as shall be necessary to
cause such purchasing Lender to share the excess payment or other recovery
ratably with each of them; provided that if all
or any portion of the excess payment or other recovery is thereafter recovered
from such purchasing Lender, the purchase shall be rescinded and the purchase
price restored to the extent of such recovery.

    
      
         

      

      
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    7.6 Taxes.

     

    (a) All
payments made by the Company hereunder or under any Loan Documents shall be made
without setoff, counterclaim, or other defense.  To the extent
permitted by applicable law, all payments hereunder or under the Loan Documents
(including any payment of principal, interest, or fees) to, or for the benefit,
of any person shall be made by the Company free and clear of and without
deduction or withholding for, or account of, any Taxes now or hereinafter
imposed by any taxing authority.

     

    (b) If the
Company makes any payment hereunder or under any Loan Document in respect of
which it is required by applicable law to deduct or withhold any Taxes, the
Company shall increase the payment hereunder or under any such Loan Document
such that after the reduction for the amount of Taxes withheld (and any taxes
withheld or imposed with respect to the additional payments required under this
Section
7.6(b)), the amount paid to the Lenders or the Administrative Agent
equals the amount that was payable hereunder or under any such Loan Document
without regard to this Section
7.6(b).  To the extent the Company withholds any Taxes on
payments hereunder or under any Loan Document, the Company shall pay the full
amount deducted to the relevant taxing authority within the time allowed for
payment under applicable law and shall deliver to the Administrative Agent
within 30 days after it has made payment to such authority a receipt issued by
such authority (or other evidence satisfactory to the Administrative Agent)
evidencing the payment of all amounts so required to be deducted or withheld
from such payment.

     

    (c) If any
Lender or the Administrative Agent is required by law to make any payments of
any Taxes on or in relation to any amounts received or receivable hereunder or
under any other Loan Document, or any Tax is assessed against a Lender or the
Administrative Agent with respect to amounts received or receivable hereunder or
under any other Loan Document, the Company will indemnify such person against
(i) such Tax (and any reasonable counsel fees and expenses associated with such
Tax) and (ii) any taxes imposed as a result of the receipt of the payment under
this Section
7.6(c).  A certificate prepared in good faith as to the amount
of such payment by such Lender or the Administrative Agent shall, absent
manifest error, be final, conclusive, and binding on all parties.

     

    (d) (i)           To
the extent permitted by applicable law, each Lender that is not a United States
person within the meaning of Code section 7701(a)(30) (a “Non-U.S.
Participant”) shall deliver to the Company and the Administrative Agent
on or prior to the Restatement Date (or in the case of a Lender that is an
Assignee, on the date of such assignment to such Lender) two accurate and
complete original signed copies of IRS Form W-8BEN, W-8ECI, or W-8IMY (or any
successor or other applicable form prescribed by the IRS) certifying to such
Lender’s entitlement to a complete exemption

    
      
         

      

      
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    from, or
a reduced rate in, United States withholding tax on interest payments to be made
hereunder or any Loan.  If a Lender that is a Non-U.S. Participant is
claiming a complete exemption from withholding on interest pursuant to Sections
871(h) or 881(c) of the Code, the Lender shall deliver (along with two accurate
and complete original signed copies of IRS Form W-8BEN) a certificate in form
and substance reasonably acceptable to the Administrative Agent (any such
certificate, a “Withholding
Certificate”).  In addition, each Lender that is a Non-U.S.
Participant  agrees that from time to time after the Restatement Date,
(or in the case of a Lender that is an Assignee, after the date of the
assignment to such Lender), when a lapse in time (or change in circumstances
occurs) renders the prior certificates hereunder obsolete or inaccurate in any
material respect, such Lender shall, to the extent permitted under applicable
law, deliver to the Company and the Administrative Agent two new and accurate
and complete original signed copies of an IRS Form W-8BEN, W-8ECI, or W-8IMY (or
any successor or other applicable forms prescribed by the IRS), and if
applicable, a new Withholding Certificate, to confirm or establish the
entitlement of such Lender or the Administrative Agent to an exemption from, or
reduction in, United States withholding tax on interest payments to be made
hereunder or any Loan.  No Non-U.S. Participant shall become a Lender
if such Person fails to deliver a Withholding Certificate.

     

    (ii)           Each
Lender that is not a Non-U.S. Participant (other than any such Lender which is
taxed as a corporation for U.S. federal income tax purposes) shall provide two
properly completed and duly executed copies of IRS Form W-9 (or any successor or
other applicable form) to the Company and the Administrative Agent certifying
that such Lender is exempt from United States backup withholding
tax.  To the extent that a form provided pursuant to this Section 7.6(d)(ii) is
rendered obsolete or inaccurate in any material respects as result of change in
circumstances with respect to the status of a Lender, such Lender shall, to the
extent permitted by applicable law, deliver to the Company and the
Administrative Agent revised forms necessary to confirm or establish the
entitlement to such Lender’s or the Administrative Agent’s exemption from United
States backup withholding tax.

     

    (iii)           The
Company shall not be required to pay additional amounts to a Lender, or
indemnify any Lender, under this Section 7.6 to the
extent that such obligations would not have arisen but for the failure of such
Lender to comply with Section
7.6(d).

     

    (iv)           Each
Lender agrees to indemnify the Administrative Agent and hold the Administrative
Agent harmless for the full amount of any and all present or future Taxes and
related liabilities (including penalties, interest, additions to tax and
expenses, and any Taxes imposed by any jurisdiction on amounts payable to the
Administrative Agent under this Section 7.6) which
are imposed on or with respect to principal, interest or fees payable to such
Lender hereunder and which are not paid by the Company pursuant to this Section 7.6, whether
or not such Taxes or related liabilities were correctly or legally
asserted.  This indemnification shall be made within 30 days from the
date the Administrative Agent makes written demand therefor.

    
      
         

      

      
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              SECTION
      8  

            	
              INCREASED
      COSTS; SPECIAL PROVISIONS FOR LIBOR
LOANS.

            

    

     

    8.1 Increased
Costs.  (a)  If, after the date hereof, the adoption
of, or any change in, any applicable law, rule or regulation, or any change in
the interpretation or administration of any applicable law, rule or regulation
by any governmental authority, central bank or comparable agency charged with
the interpretation or administration thereof, or compliance by any Lender with
any request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency:  (i) shall impose,
modify or deem applicable any reserve (including any reserve imposed by the FRB,
but excluding any reserve included in the determination of the LIBOR Rate
pursuant to Section
4), special deposit or similar requirement against assets of, deposits
with or for the account of, or credit extended by any Lender; or (ii) shall
impose on any Lender any other condition affecting its LIBOR Loans, its Note or
its obligation to make LIBOR Loans; and the result of anything described in
clauses (i) and (ii) above is to increase the cost to (or to impose a cost on)
such Lender (or any LIBOR Office of such Lender) of making or maintaining any
LIBOR Loan, or to reduce the amount of any sum received or receivable by such
Lender (or its LIBOR Office) under this Agreement or under its Note with respect
thereto, then upon demand by such Lender (which demand shall be accompanied by a
statement setting forth the basis for such demand and a calculation of the
amount thereof in reasonable detail, a copy of which shall be furnished to the
Administrative Agent), the Company shall pay directly to such Lender such
additional amount as will compensate such Lender for such increased cost or such
reduction, so long as such amounts have accrued on or after the day which is 180
days prior to the date on which such Lender first made demand
therefor.

     

    (b) If any
Lender shall reasonably determine that any change in, or the adoption or
phase-in of, any applicable law, rule or regulation regarding capital adequacy,
or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or the compliance by any Lender or any
Person controlling such Lender with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on such Lender’s or such controlling Person’s capital as a consequence of
such Lender’s obligations hereunder or under any Letter of Credit to a level
below that which such Lender or such controlling Person could have achieved but
for such change, adoption, phase-in or compliance (taking into consideration
such Lender’s or such controlling Person’s policies with respect to capital
adequacy) by an amount deemed by such Lender or such controlling Person to be
material, then from time to time, upon demand by such Lender (which demand shall
be accompanied by a statement setting forth the basis for such demand and a
calculation of the amount thereof in reasonable detail, a copy of which shall be
furnished to the Administrative Agent), the Company shall pay to such Lender
such additional amount as will compensate such Lender or such
controlling

    
      
         

      

      
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    Person
for such reduction so long as such amounts have accrued on or after the day
which is 180 days prior to the date on which such Lender first made demand
therefor.  Each Lender agrees that, a promptly as practicable after it
becomes aware of any circumstances referred to above which would result in any
such increased cost, the affected Lender shall, to the extent not inconsistent
with such Lender’s internal policies of general application, use reasonable
commercial efforts to minimize costs and expenses incurred by it and payable to
it by Company pursuant to this Section.

     

    8.2 Basis for Determining
Interest Rate Inadequate or Unfair.  (a) If (i) the
Administrative Agent reasonably determines (which determination shall be binding
and conclusive on the Company) that by reason of circumstances affecting the
interbank LIBOR market adequate and reasonable means do not exist for
ascertaining the applicable LIBOR Rate; or (ii) the Required Lenders advise the
Administrative Agent that (1) Dollar deposits are not being offered to banks in
the London interbank eurodollar market for the applicable amount and Interest
Period of any requested LIBOR Loan or conversion to or continuation of any LIBOR
Loan, (2) adequate and reasonable means do not exist for determining the LIBOR
Rate for any requested Interest Period with respect to a proposed LIBOR Loan or
in connection with a Base Rate Loan or (3) the LIBOR Rate as determined by the
Administrative Agent will not adequately and fairly reflect the funding or
borrowing cost to such Lenders of maintaining or funding LIBOR Loans for such
Interest Period (taking into account any amount to which such Lenders may be
entitled under Section
8.1), then the
Administrative Agent shall promptly notify the other parties thereof and, so
long as such circumstances shall continue, (y) no Lender shall be under any
obligation to make any LIBOR Loans or Base Rate Loans as to which the interest
rate is determined with reference to the LIBOR Rate or convert any Base Rate
Loans into LIBOR Loans and (z) on the last day of the current Interest Period
for each LIBOR Loan, such Loan shall, unless then repaid in full, automatically
convert to a Base Rate Loan as to which the interest rate is not determined with
reference to the LIBOR Rate; or

     

    (b) If the
Lenders having 50% or more of the Revolving Commitment determine (which
determination shall be conclusive and binding upon the Company) that the LIBOR
Rate or the Base Rate, as the case may be, will not adequately and fairly
reflect the funding or borrowing costs to such Lenders (as conclusively
certified by such Lenders) of making or maintaining their affected Loans, the
Administrative Agent shall give notice thereof to the Company and the Lenders as
soon as practicable thereafter including with such notice, the Lenders’
certification as aforesaid and such notice shall remain in effect from the date
of such delivery until the Administrative Agent (upon the instruction of the
such Lenders) revokes such notice.  Each Lender shall instruct the
Administrative Agent to revoke the notice as soon as possible after the
circumstances initially giving rise to such notice shall cease or pass with
respect to such Lender.

     

    8.3 Changes in Law Rendering
LIBOR Loans Unlawful.  If any change in, or the adoption of any
new, law or regulation, or any change in the interpretation of any applicable
law

    
      
         

      

      
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    or
regulation by any governmental or other regulatory body charged with the
administration thereof, should make it (or in the good faith judgment of any
Lender cause a substantial question as to whether it is) unlawful for any Lender
to make, maintain or fund LIBOR Loans or to determine or change interest rates
based on the LIBOR Rate, then such Lender shall promptly notify each of the
other parties hereto and, so long as such circumstances shall continue, (a) such
Lender shall have no obligation to make or convert any Base Rate Loan into a
LIBOR Loan (but shall make Base Rate Loans as to which the interest rate is not
determined with reference to the LIBOR Rate concurrently with the making of or
conversion of Base Rate Loans into LIBOR Loans by the Lenders which are not so
affected, in each case in an amount equal to the amount of LIBOR Loans which
would be made or converted into by such Lender at such time in the absence of
such circumstances) or, if such notice relates to the unlawfulness or asserted
unlawfulness of charging interest based on the LIBOR Rate, to make Base Rate
Loans as to which the interest rate is determined with reference to the LIBOR
Rate (but shall convert such Base Rate Loans to Base Rate Loans as to which the
rate of interest is not determined with reference to the LIBOR Rate) and (b) on
the last day of the current Interest Period for each LIBOR Loan of such Lender
(or, in any event,  on such earlier date as may be required by the
relevant law, regulation or interpretation), such LIBOR Loan shall, unless then
repaid in full, automatically convert to a Base Rate Loan.  Each Base
Rate Loan made by a Lender which, but for the circumstances described in the
foregoing sentence, would be a LIBOR Loan (an “Affected Loan”) shall
remain outstanding for the period corresponding to the Group of LIBOR Loans of
which such Affected Loan would be a part absent such circumstances.

     

    8.4 Funding
Losses.  The Company hereby agrees that upon demand by any
Lender (which demand shall be accompanied by a statement setting forth the basis
for the amount being claimed, a copy of which shall be furnished to the
Administrative Agent), the Company will indemnify such Lender against any net
loss or expense which such Lender may sustain or incur (including any net loss
or expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Lender to fund or maintain any LIBOR Loan), as
reasonably determined by such Lender, as a result of (a) any payment, prepayment
or conversion of any LIBOR Loan of such Lender on a date other than the last day
of an Interest Period for such Loan (including any conversion pursuant to Section 8.3) or (b)
any failure of the Company to borrow, convert or continue any Loan on a date
specified therefor in a notice of borrowing, conversion or continuation pursuant
to this Agreement.  For this purpose, all notices to the
Administrative Agent pursuant to this Agreement shall be deemed to be
irrevocable.

     

    8.5 Right of Lenders to Fund
through Other Offices.  Each Lender may, if it so elects,
fulfill its commitment as to any LIBOR Loan by causing a foreign branch or
Affiliate of such Lender to make such Loan; provided that in such
event for the purposes of this Agreement such Loan shall be deemed to have been
made by such Lender and the obligation of the Company to repay such Loan shall
nevertheless be to such Lender and shall be deemed held by it, to the extent of
such Loan, for the account of such branch or Affiliate.

    
      
         

      

      
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    8.6 Discretion of Lenders as to
Manner of Funding.  Notwithstanding any provision of this
Agreement to the contrary, each Lender shall be entitled to fund and maintain
its funding of all or any part of its Loans in any manner it sees fit, it being
understood, however, that for the purposes of this Agreement all determinations
hereunder shall be made as if such Lender had actually funded and maintained
each LIBOR Loan during each Interest Period for such Loan through the purchase
of deposits having a maturity corresponding to such Interest Period and bearing
an interest rate equal to the LIBOR Rate for such Interest Period.

     

    8.7 Mitigation of Circumstances;
Replacement of Lenders.  (a)  Each Lender shall
promptly notify the Company and the Administrative Agent of any event of which
it has knowledge which will result in, and will use reasonable commercial
efforts available to it (and not, in such Lender’s sole judgment, otherwise
disadvantageous to such Lender) to mitigate or avoid, (i) any obligation by the
Company to pay any amount pursuant to Section 7.6 or 8.1 or (ii) the
occurrence of any circumstances described in Section 8.2 or 8.3 (and, if any
Lender has given notice of any such event described in clause (i) or (ii) above
and thereafter such event ceases to exist, such Lender shall promptly so notify
the Company and the Administrative Agent).  Without limiting the
foregoing, each Lender will designate a different funding office if such
designation will avoid (or reduce the cost to the Company of) any event
described in clause (i) or (ii) above and such designation will not, in such
Lender’s sole judgment, be otherwise disadvantageous to such
Lender.

     

    (b) If the
Company becomes obligated to pay additional amounts to any Lender pursuant to
Section 7.6 or
8.1, or any
Lender gives notice of the occurrence of any circumstances described in Section 8.2 or 8.3, the Company may
designate another bank which is acceptable to the Administrative Agent and the
Issuing Lender in their reasonable discretion (such other bank being called a
“Replacement
Lender”) to purchase the Loans of such Lender and such Lender’s rights
hereunder, without recourse to or warranty by, or expense to, such Lender, for a
purchase price equal to the outstanding principal amount of the Loans payable to
such Lender plus any accrued but
unpaid interest on such Loans and all accrued but unpaid fees owed to such
Lender and any other amounts payable to such Lender under this Agreement, and to
assume all the obligations of such Lender hereunder, and, upon such purchase and
assumption (pursuant to an Assignment Agreement), such Lender shall no longer be
a party hereto or have any rights hereunder (other than rights with respect to
indemnities and similar rights applicable to such Lender prior to the date of
such purchase and assumption) and shall be relieved from all obligations to the
Company hereunder, and the Replacement Lender shall succeed to the rights and
obligations of such Lender hereunder.

     

    8.8 Conclusiveness of
Statements; Survival of Provisions.  Determinations and
statements of any Lender pursuant to Section 8.1, 8.2, 8.3 or 8.4 shall be
conclusive absent demonstrable error.  Lenders may use reasonable
averaging and attribution methods in determining compensation under Sections 8.1 and
8.4, and the
provisions of such Sections shall

    
      
         

      

      
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    survive
repayment of the Obligations, cancellation of any Notes, expiration or
termination of the Letters of Credit and termination of this
Agreement.

     

    SECTION
9 REPRESENTATIONS
AND WARRANTIES.

     

    To induce
the Administrative Agent and the Lenders to enter into this Agreement and to
induce the Lenders to make Loans and issue and participate in Letters of Credit
hereunder, the Company represents and warrants to the Administrative Agent and
the Lenders that:

     

    9.1 Organization.  Each
Loan Party is validly existing and in good standing under the laws of its
jurisdiction of organization; and each Loan Party is duly qualified to do
business in each jurisdiction where, because of the nature of its activities or
properties, such qualification is required, except for such jurisdictions where
the failure to so qualify would not have a Material Adverse Effect.

     

    9.2 Authorization; No
Conflict.  Each Loan Party is duly authorized to execute and
deliver each Loan Document to which it is a party, the Company is duly
authorized to borrow monies hereunder and each Loan Party is duly authorized to
perform its Obligations under each Loan Document to which it is a
party.  The execution, delivery and performance by each Loan Party of
each Loan Document to which it is a party, and the borrowings by the Company
hereunder, do not and will not (a) require any consent or approval of any
governmental agency or authority (other than any consent or approval which has
been obtained and is in full force and effect), (b) conflict with (i) any
provision of law, (ii) the charter, by-laws or other organizational documents of
any Loan Party or (iii) any agreement, indenture, instrument or other document,
or any judgment, order or decree, which is binding upon any Loan Party or any of
their respective properties or (c) require, or result in, the creation or
imposition of any Lien on any asset of any Loan Party (other than Liens in favor
of the Administrative Agent created pursuant to the Collateral
Documents).

     

    9.3 Validity and Binding
Nature.  Each of this Agreement and each other Loan Document to
which any Loan Party is a party is the legal, valid and binding obligation of
such Person, enforceable against such Person in accordance with its terms,
subject to bankruptcy, insolvency and similar laws affecting the enforceability
of creditors’ rights generally and to general principles of equity.

     

    9.4  Financial
Condition.  The audited consolidated financial
statements of the Company and its Subsidiaries as at Company’s Fiscal Year 2007,
and the unaudited consolidated condensed financial statements of the Company and
the Subsidiaries as at September 30, 2008, copies of each of which have been
delivered to each Lender, were prepared in accordance with GAAP (subject, in the
case of such unaudited statements, to the absence of footnotes and to normal
year-end adjustments) and present fairly the consolidated financial condition of
the Company and its Subsidiaries as at such date(s) and the results of their
operations for the periods then ended.

    
      
         

      

      
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    9.5 No Material Adverse
Change.  Since Company’s Fiscal Year 2007, there has been no
material adverse change in the financial condition, operations, assets,
business, properties or prospects of the Loan Parties taken as a
whole.

     

    9.6 Litigation and Contingent
Liabilities.  No litigation (including derivative actions),
arbitration proceeding or governmental investigation or proceeding is pending
or, to the Company’s knowledge, threatened against any Loan Party which might
reasonably be expected to have a Material Adverse Effect, except as set forth in
Schedule
9.6.  Other than any liability incident to such litigation or
proceedings, no Loan Party has any material contingent liabilities not listed on
Schedule 9.6 or
permitted by Section
11.1.

     

    9.7 Ownership of Properties;
Liens.  Each Loan Party owns good and, in the case of real
property,  marketable title to all of its properties and assets, real
and personal, tangible and intangible, of any nature whatsoever (including
patents, trademarks, trade names, service marks and copyrights), free and clear
of all Liens, charges and claims (including infringement claims with respect to
patents, trademarks, service marks, copyrights and the like) except as permitted
by Section
11.2.

     

    9.8 Equity Ownership;
Subsidiaries.  All issued and outstanding Capital Securities of
each Domestic Subsidiary are duly authorized and validly issued, fully paid,
non-assessable, and free and clear of all Liens other than those in favor of the
Administrative Agent, and such securities were issued in compliance with all
applicable state and federal laws concerning the issuance of
securities.  Schedule 9.8 sets
forth the authorized Capital Securities of each Domestic Subsidiary as of the
Restatement Date and all of the issued and outstanding Capital Securities of
each Domestic Subsidiary is, directly or indirectly, owned by the
Company.  As of the Restatement Date, except as set forth on Schedule 9.8, there
are no pre-emptive or other outstanding rights, options, warrants, conversion
rights or other similar agreements or understandings for the purchase or
acquisition of any Capital Securities of any Domestic Subsidiary.

     

    9.9 Pension
Plans.  (a) Each Pension Plan complies in all material
respects with all applicable requirements of law and regulations.  No
contribution failure under Section 412 of the Code, Section 302 of ERISA or the
terms of any Pension Plan has occurred with respect to any Pension Plan,
sufficient to give rise to a Lien under Section 302(f) of ERISA, or otherwise to
have a Material Adverse Effect.  There are no pending or, to the
knowledge of Company, threatened, claims, actions, investigations or lawsuits
against any Pension Plan, any fiduciary of any Pension Plan, or Company or other
any member of the Controlled Group with respect to a Pension Plan which could
reasonably be expected to have a Material Adverse Effect.  Neither the
Company nor any other member of the Controlled Group has engaged in any
prohibited transaction (as defined in Section 4975 of the Code or Section 406 of
ERISA) in connection with any Pension Plan which would subject that Person to
any material liability.  Within the past five years, neither the
Company nor any other member of the Controlled Group has engaged in
a

    
      
         

      

      
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    transaction
which resulted in a Pension Plan with an Unfunded Liability being transferred
out of the Controlled Group, which could reasonably be expected to have a
Material Adverse Effect.  No Termination Event has occurred or is
reasonably expected to occur with respect to any Pension Plan, which could
reasonably be expected to have a Material Adverse Effect.

     

    (b) All
contributions (if any) have been made to any Multiemployer Pension Plan that are
required to be made by the Company or any other member of the Controlled Group
under the terms of the plan or of any collective bargaining agreement or by
applicable law; neither the Company nor any other member of the Controlled Group
has withdrawn or partially withdrawn from any Multiemployer Pension Plan,
incurred any withdrawal liability with respect to any such plan or received
notice of any claim or demand for withdrawal liability or partial withdrawal
liability from any such plan, and no condition has occurred which, if continued,
could result in a withdrawal or partial withdrawal from any such plan which
would have a Material Adverse Effect; and neither the Company nor any other
member of the Controlled Group has received any notice that any Multiemployer
Pension Plan is in reorganization, that increased contributions may be required
to avoid a reduction in plan benefits or the imposition of any excise tax, that
any such plan is or has been funded at a rate less than that required under
Section 412 of the Code, that any such plan is or may be terminated which could
reasonably be expected to have a Material Adverse Effect, or that any such plan
is or may become insolvent.

     

    9.10 Investment Company
Act.  No Loan Party is an “investment company” or a company
“controlled” by an “investment company” or a “subsidiary” of an “investment
company,” within the meaning of the Investment Company Act of 1940.

     

    9.11 Regulation
U.  The Company is not engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.

     

    9.12 Taxes.  Each Loan Party has
timely filed all tax returns and reports required by law to have been filed by
it and has paid all taxes and governmental charges due and payable with respect
to such return, except any such taxes or charges which are being diligently
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP (subject, in the case of such unaudited
statements, to the absence of footnotes and to normal year-end adjustments)
shall have been set aside on its books.  The Loan Parties have made
adequate reserves on their books and records in accordance with GAAP (subject,
in the case of such unaudited statements, to the absence of footnotes and to
normal year-end adjustments) for all taxes that have accrued but which are not
yet due and payable.  No Loan Party has participated in any
transaction that relates to a year of the taxpayer (which is still open under
the applicable statute of limitations) which is a “reportable transaction”
within the meaning of Treasury Regulation Section 1.6011-4(b)(2) (irrespective
of the date when the transaction was entered into).

    
      
         

      

      
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    9.13 Solvency,
etc.  On the Restatement Date, and immediately prior to and
after giving effect to the issuance of each Letter of Credit and each borrowing
hereunder and the use of the proceeds thereof, with respect to each Loan Party
other than as set forth in Schedule 9.13 hereto,
individually, (a) the fair value of its assets is greater than the amount of its
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated in accordance with GAAP, (b)
the present fair saleable value of its assets is not less than the amount that
will be required to pay the probable liability on its debts as they become
absolute and matured, (c) it is able to realize upon its assets and pay its
debts and other liabilities (including disputed, contingent and unliquidated
liabilities) as they mature in the normal course of business, (d) it does not
intend to, and does not believe that it will, incur debts or liabilities beyond
its ability to pay as such debts and liabilities mature and (e) it is not
engaged in business or a transaction, and is not about to engage in business or
a transaction, for which its property would constitute unreasonably small
capital.

     

    9.14 Environmental
Matters.  The on-going operations of each Loan Party comply in
all respects with all Environmental Laws, except such non-compliance which could
not (if enforced in accordance with applicable law) reasonably be expected to
result, either individually or in the aggregate, in a Material Adverse
Effect.  Each Loan Party has obtained, and maintained in good
standing, all licenses, permits, authorizations, registrations and other
approvals required under any Environmental Law and required for their respective
ordinary course operations, and for their reasonably anticipated future
operations, and each Loan Party is in compliance with all terms and conditions
thereof, except where the failure to do so could not reasonably be expected to
result in material liability to any Loan Party and could not reasonably be
expected to result, either individually or in the aggregate, in a Material
Adverse Effect.  No Loan Party or any of its properties or operations
is subject to, or reasonably anticipates the issuance of, any written order from
or agreement with any Federal, state or local governmental authority, nor
subject to any judicial or docketed administrative or other proceeding,
respecting any Environmental Law, Environmental Claim or Hazardous
Substance.  There are no Hazardous Substances or other conditions or
circumstances existing with respect to any property, except for the Freeport
Facility, arising from operations prior to the Closing Date, or relating to any
waste disposal, of any Loan Party that would reasonably be expected to result,
either individually or in the aggregate, in a Material Adverse
Effect.  Except for Titan Tire Corporation (only with respect to the
Freeport Facility), no Loan Party has any underground storage tanks that are not
properly registered or permitted under applicable Environmental Laws or, to the
best of Company’s knowledge, have released, leaked, disposed of or otherwise
discharged Hazardous Substances.

     

    9.15 Insurance.  Set
forth on Schedule
9.15 is a complete and materially accurate summary of the property and
casualty insurance program of the Loan Parties as of the Restatement Date
(including the names of all insurers, policy numbers, expiration dates, amounts
and types of coverage, annual premiums, exclusions, deductibles, self-insured
retention, and a description in reasonable detail of any self-insurance program,
retrospective rating plan, fronting arrangement or other risk assumption
arrangement involving any Loan Party).  Each Loan
Party

    
      
         

      

      
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    and its
properties are insured with financially sound and reputable insurance companies
which are not Affiliates of the Loan Parties, in such amounts, with such
deductibles and covering such risks as are customarily carried by companies
engaged in similar businesses and owning similar properties in localities where
such Loan Parties operate.

     

    9.16 Real
Property.  Set forth on Schedule 9.16 is a
complete and materially accurate list, as of the Restatement Date, of the
address of all real property owned or leased by any Loan Party, together with,
in the case of leased property, the name and mailing address of the lessor of
such property.

     

    9.17 Information.  All
information heretofore or contemporaneously herewith furnished in writing by any
Loan Party to the Administrative Agent or any Lender for purposes of or in
connection with this Agreement and the transactions contemplated hereby is, and
all written information hereafter furnished by or on behalf of any Loan Party to
the Administrative Agent or any Lender pursuant hereto or in connection herewith
will be, true and accurate in every material respect on the date as of which
such information is dated or certified, and none of such information is or will
be incomplete by omitting to state any material fact necessary to make such
information not misleading in light of the circumstances under which made (it
being recognized by the Administrative Agent and the Lenders that any
projections and forecasts provided by the Company are based on good faith
estimates and assumptions believed by the Company to be reasonable as of the
date of the applicable projections or assumptions and that actual results during
the period or periods covered by any such projections and forecasts may differ
from projected or forecasted results).  The Lenders acknowledged that
these projections and forecasts are based on the Company’s expectations and are
subject to a number of risks and uncertainties, certain of which are beyond the
Company’s control.  Actual results could differ materially from these
projections and forecasts as a result of certain factors, including, (i) changes
in the Company’s end-user markets as a result of world economics or regulatory
influences, (ii) fluctuations in currency translations, (iii) changes in the
marketplace, including new products and pricing changes by the Company’s
competitors, (iv) availability and price of raw materials, (v) levels of
operating efficiencies, (vi) actions of domestic and foreign governments, (vii)
results of investments, and (viii) ability to secure financing at reasonable
terms.  Any changes in such factors could lead to significantly
different results.  The Company undertakes no obligation to update or
revise any such projections or forecasts, whether as a result of new
information, future events or otherwise.  In light of these risks and
uncertainties, there can be no assurance that the projections and forecasts
contained in this Agreement will in fact transpire.

     

    9.18 Intellectual
Property.  Each Loan Party owns and possesses or has a
license or other right to use all patents, patent rights, trademarks, trademark
rights, trade names, trade name rights, service marks, service mark rights and
copyrights as are necessary for the conduct of the businesses of the Loan
Parties, without any infringement upon rights of others which could reasonably
be expected to have a Material Adverse Effect.

    
      
         

      

      
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    9.19 Burdensome
Obligations.  No Loan Party is a party to any agreement or
contract or subject to any restriction contained in its organizational documents
which could reasonably be expected to have a Material Adverse
Effect.

     

    9.20 Labor
Matters.  Except as set forth on Schedule 9.20, no
Loan Party is subject to any labor or  collective bargaining
agreement.  There are no existing or threatened strikes, lockouts or
other labor disputes involving any Loan Party that singly or in the aggregate
could reasonably be expected to have a Material Adverse Effect.  Hours
worked by and payment made to employees of the Loan Parties are not in violation
of the Fair Labor Standards Act or any other applicable law, rule or regulation
dealing with such matters which could reasonably be expected to have a Material
Adverse Effect.

     

    9.21 No
Default.  No Event of Default or Default exists or would result
from the incurrence by any Loan Party of any Debt hereunder or under any other
Loan Document.

     

    9.22 Subordinated
Debt.  The subordination provisions of the Subordinated Debt
are enforceable against the holders of the Subordinated Debt by the
Administrative Agent and the Lenders.

     

    9.23 Subsidiary
Assets.  No Subsidiary, other than the Foreign Subsidiaries and
Domestic Subsidiaries, owns assets other than as disclosed on Schedule 9.23, which
Schedule describes both the type and approximate value of such
assets.

     

    SECTION
10 AFFIRMATIVE
COVENANTS.

     

    Until the
expiration or termination of the Commitments and thereafter until all
Obligations hereunder and under the other Loan Documents are paid in full and
all Letters of Credit have been terminated, the Company agrees that, unless at
any time the Required Lenders shall otherwise expressly consent in writing, it
will:

     

    10.1 Reports, Certificates and
Other Information.  Except as such information is available to
the public by disclosures required by the United States Securities and Exchange
Commission, furnish to the Administrative Agent and each Lender:

     

    10.1.1 Annual
Report.  Promptly when available and in any event within 90
days after the close of each Fiscal Year a copy of the annual audit report of
the Company for such Fiscal Year, including therein consolidated balance sheets
and statements of earnings and cash flows of the Company and its Subsidiaries at
the end of such Fiscal Year, each certified without adverse reference to going
concern value and without qualification by independent auditors of recognized
standing selected by the Company and reasonably acceptable to the Administrative
Agent.

     

    10.1.2 Interim
Reports.  (a)  Promptly when available and in any
event within 45 days after the end of each Fiscal Quarter, consolidated balance
sheets of each of (i) the Company and

    
      
         

      

      
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    (ii) the
Obligors as of the end of such Fiscal Quarter, together with consolidated
statements of earnings and cash flows for such Fiscal Quarter and for the period
beginning with the first day of such Fiscal Year and ending on the last day of
such Fiscal Quarter, certified by a Senior Officer of the Company; and if the
Administrative Agent requests, (b) promptly when available and in any event
within 30 days after the end of each month, consolidated balance sheets of each
of (i) the Company and (ii) the Obligors as of the end of such month, together
with consolidated statements of earnings and a consolidated statement of cash
flows for such month and for the period beginning with the first day of such
Fiscal Year and ending on the last day of such month, certified by a Senior
Officer of the Company.

     

    10.1.3 Compliance
Certificates.  Contemporaneously with the furnishing of a copy
of each annual audit report pursuant to Section 10.1.1 and
each set of quarterly statements pursuant to Section 10.1.2, a
duly completed compliance certificate in the form of Exhibit B, with
appropriate insertions, dated the date of such annual report or such quarterly
statements and signed by a Senior Officer of the Company, containing a
computation of each of the financial ratios and restrictions set forth in Section 11.14 and to
the effect that such officer has not become aware of any Event of Default or
Default that has occurred and is continuing or, if there is any such event,
describing it and the steps, if any, being taken to cure it.

     

    10.1.4 Notice of Default,
Litigation and ERISA Matters.  Promptly upon becoming aware of
any of the following, written notice describing the same and the steps being
taken by the Company or the Subsidiary affected thereby with respect
thereto:

     

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

     

    (b) any
litigation, arbitration or governmental investigation or proceeding not
previously disclosed by the Company to the Lenders which has been instituted or,
to the knowledge of the Company, is threatened against any Loan Party or to
which any of the properties of any thereof is subject which might reasonably be
expected to have a Material Adverse Effect;

     

    (c) the
institution of any steps by any member of the Controlled Group or any other
Person to terminate any Pension Plan, or the failure of any member of the
Controlled Group to make a required contribution to any Pension Plan (if such
failure is sufficient to give rise to a Lien under Section 302(f) of ERISA) or
to any Multiemployer Pension Plan, or the taking of any action with respect to a
Pension Plan which could result in the requirement that the Company furnish a
bond or other security to the PBGC or such Pension Plan, or the occurrence of
any event with respect to any Pension Plan or Multiemployer Pension Plan which
could result in the incurrence by any member of the Controlled Group of any
material liability, fine or penalty (including any claim or demand for
withdrawal liability or partial withdrawal from any Multiemployer Pension Plan),
or any material increase in the contingent liability of the Company with respect
to

    
      
         

      

      
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    any
post-retirement welfare benefit plan or other employee benefit plan of the
Company or another member of the Controlled Group, or any notice that any
Multiemployer Pension Plan is in reorganization, that increased contributions
may be required to avoid a reduction in plan benefits or the imposition of an
excise tax, that any such plan is or has been funded at a rate less than that
required under Section 412 of the Code, that any such plan is or may be
terminated, or that any such plan is or may become insolvent;

     

    (d) any
cancellation or material change in any insurance maintained by any Loan Party;
or

     

    (e) any other
event (including (i) any violation of any Environmental Law or the assertion of
any Environmental Claim or (ii) the enactment or effectiveness of any law, rule
or regulation) which might reasonably be expected to have a Material Adverse
Effect.

     

    10.1.5 Borrowing Base
Certificates.  Within thirty (30) days of the end of each of
the first three Fiscal Quarters of each Fiscal Year and within sixty (60) days
of the end of the last Fiscal Quarter of each Fiscal Year, a
Borrowing Base Certificate dated as of the end of such Fiscal Quarter and
executed by a Senior Officer of the Company on behalf of the Company (provided
that (a) the Company shall deliver a Borrowing Base Certificate within
twenty-five (25) days after the end of each calendar month if during such month
the average daily balance of the Revolving Outstandings exceeded $125,000,000,
(b) at any time an Event of Default exists, the Administrative Agent may require
the Company to deliver Borrowing Base Certificates more frequently than
quarterly), (c) the Company may, but is not required to, deliver a Borrowing
Base Certificate as of the date of any request by Company for a Revolving Loan,
and (d) the Borrowing Base Certificate for each Fiscal Quarter shall be based on
the Company’s unaudited financial statements.  In the event the
Company fails to timely deliver a Borrowing Base Certificate as set forth
hereinabove, then, in addition to all other remedies set forth herein, the Base
Rate Margin, LIBOR Margin and L/C Fee Rate shall be automatically adjusted at
the highest rates set forth in the Pricing Grid, until such Borrowing Base
Certificate is delivered.

     

    10.1.6 Management Recommendation
Reports.  If requested by the Administrative Agent and if not
otherwise prohibited, promptly upon receipt thereof, copies of all detailed
financial or management recommendation reports, if any, submitted to the Company
by independent auditors in connection with each annual audit made by such
auditors of the books of the Company.

     

    10.1.7 Budgets.  As
soon as practicable, and in any event not later than 30 days after the
commencement of each Fiscal Year, a consolidated financial budget for the
Company for such Fiscal Year (including annual operating and cash flow budgets)
prepared in a manner consistent with the budget delivered by the Company to the
Lenders prior to the Restatement

    
      
         

      

      
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    Date or
otherwise in a manner reasonably satisfactory to the Administrative Agent, and
such budgets shall have been prepared by the Company in good faith.

     

    10.1.8 Senior Notes, Subordinated
Debt and Other Material Debt Notices.  Promptly following
receipt, copies of any notices (including notices of default or acceleration)
received from any holder or trustee of, under or with respect to the Senior
Notes, any Subordinated Debt with an original principal amount greater than
$10,000,000, or any other Material Debt.

     

    10.1.9 Other
Information.  Promptly from time to time, such other
information concerning the Loan Parties as any Lender or the Administrative
Agent may reasonably request.

     

    10.2 Books, Records and
Inspections.  Keep, and cause each other Loan Party to keep,
its books and records in accordance with sound business practices sufficient to
allow the preparation of financial statements in accordance with GAAP; permit,
and cause each other Loan Party to permit, any Lender or the Administrative
Agent or any representative thereof to inspect the properties and operations of
the Loan Parties; and permit, and cause each other Loan Party to permit, at any
reasonable time and with reasonable notice (or at any time without notice if an
Event of Default exists), any Lender or the Administrative Agent or any
representative thereof to visit any or all of its offices, to discuss its
financial matters with its officers and its independent auditors (and after and
as long as an Event of Default continues the Company hereby authorizes such
independent auditors to discuss such financial matters with any Lender or the
Administrative Agent or any representative thereof), and to examine (and, at the
expense of the Loan Parties, photocopy extracts from) any of its books or other
records; and permit, and cause each other Loan Party to permit, the
Administrative Agent and its representatives to inspect the Inventory and other
tangible assets of the Loan Parties, to perform appraisals of the equipment of
the Loan Parties, and to inspect, audit, check and make copies of and extracts
from the books, records, computer data, computer programs, journals, orders,
receipts, correspondence and other data relating to Inventory, Accounts and any
other collateral, all at the expense of the Administrative Agent (except as set
out in this Agreement).  If an Event of Default or Default exists, all
such inspections or audits by the Administrative Agent shall be at the Company’s
expense.

     

    10.3 Maintenance of Property;
Insurance.

     

    (a) Keep, and
cause each other Loan Party to keep, all property useful and necessary in the
business of the Loan Parties in normal working order and condition, ordinary
wear and tear excepted.

     

    (b) Maintain,
and cause each other Loan Party to maintain, with responsible insurance
companies acceptable to the Administrative Agent, such insurance coverage as may
be required by any law or governmental regulation or court decree or order
applicable to it and such other insurance, to such extent and against such
hazards and liabilities, as is customarily maintained by companies similarly
situated, but which shall

    
      
         

      

      
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    insure
against all risks and liabilities of the type identified on Schedule 9.15 and
shall have insured amounts no less than, and deductibles no higher than, those
set forth on such schedule; and, upon request of the Administrative Agent or any
Lender, furnish to the Administrative Agent or such Lender annually or upon any
renewal of any policy a certificate setting forth in reasonable detail the
nature and extent of all insurance maintained by the Loan Parties and
delineating thereon the special provisions enumerated herein.  The
Company shall cause each issuer of an insurance policy to provide the
Administrative Agent, for the benefit of any Lender, with an endorsement (i)
showing the Administrative Agent as additional insured and loss payee with
respect to each policy of property insurance and naming the Administrative Agent
on behalf of the Lenders as an additional insured with respect to each policy of
liability insurance, (ii) providing that 30 days’ notice will be given to the
Administrative Agent prior to any cancellation of, material reduction or change
in coverage provided by or other material modification to such policy, (iii)
providing breach of warranty coverage with respect to each policy of property
insurance, and (iv) providing a waiver of subrogation in favor of the
Administrative Agent on behalf of the Lenders.  The Company shall
execute and deliver to the Administrative Agent a collateral assignment, in form
and substance satisfactory to the Administrative Agent, of each business
interruption insurance policy maintained by the Company.

     

    (c)           UNLESS THE COMPANY PROVIDES THE
ADMINISTRATIVE AGENT WITH EVIDENCE OF THE INSURANCE COVERAGE REQUIRED BY THIS
AGREEMENT, THE ADMINISTRATIVE AGENT MAY PURCHASE INSURANCE AT THE COMPANY’S
EXPENSE TO PROTECT THE ADMINISTRATIVE AGENT’S AND THE LENDERS’ INTERESTS IN THE
COLLATERAL.  THIS INSURANCE MAY, BUT NEED NOT, PROTECT ANY LOAN
PARTY’S INTERESTS.  THE COVERAGE THAT THE ADMINISTRATIVE AGENT
PURCHASES MAY NOT PAY ANY CLAIM THAT IS MADE AGAINST ANY LOAN PARTY IN
CONNECTION WITH THE COLLATERAL.  THE COMPANY MAY LATER CANCEL ANY
INSURANCE PURCHASED BY THE ADMINISTRATIVE AGENT, BUT ONLY AFTER PROVIDING THE
ADMINISTRATIVE AGENT WITH EVIDENCE THAT THE COMPANY HAS OBTAINED INSURANCE AS
REQUIRED BY THIS AGREEMENT.  IF THE ADMINISTRATIVE AGENT PURCHASES
INSURANCE FOR THE COLLATERAL, THE COMPANY WILL BE RESPONSIBLE FOR THE COSTS OF
THAT INSURANCE, INCLUDING INTEREST AND ANY OTHER CHARGES THAT MAY BE IMPOSED
WITH THE PLACEMENT OF THE INSURANCE, UNTIL THE EFFECTIVE DATE OF THE
CANCELLATION OR EXPIRATION OF THE INSURANCE.  THE COSTS OF THE
INSURANCE MAY BE ADDED TO THE PRINCIPAL AMOUNT OF THE LOANS OWING
HEREUNDER.  THE COSTS OF THE INSURANCE MAY BE MORE THAN THE COST OF
THE INSURANCE THE LOAN PARTIES MAY BE ABLE TO OBTAIN ON THEIR
OWN.

    
      
         

      

      
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    10.4 Compliance with Laws;
Payment of Taxes and Liabilities.  (a)  Comply, and
cause each other Loan Party to comply, in all material respects with all
applicable laws, rules, regulations, decrees, orders, judgments, licenses and
permits, except where failure to comply could not reasonably be expected to have
a Material Adverse Effect; (b) without limiting clause (a) above,
ensure, and cause each other Loan Party to ensure, that no person who owns a
controlling interest in or otherwise controls a Loan Party is or shall be (i)
listed on the Specially Designated Nationals and Blocked Person List maintained
by the Office of Foreign Assets Control (“OFAC”), Department of
the Treasury, and/or any other similar lists maintained by OFAC pursuant to any
authorizing statute, Executive Order or regulation or (ii) a person designated
under Section 1(b), (c) or (d) of Executive Order No. 13224 (September 23,
2001), any related enabling legislation or any other similar Executive Orders,
(c) without limiting clause (a) above,
comply, and cause each other Loan Party to comply, with all applicable Bank
Secrecy Act (“BSA”) and anti-money
laundering laws and regulations and (d) pay, and cause each other Loan Party to
pay, prior to delinquency, all taxes and other governmental charges against it
or any collateral, as well as claims of any kind which, if unpaid, could become
a Lien on any of its property; provided that the
foregoing shall not require any Loan Party to pay any such tax or charge so long
as it shall contest the validity thereof in good faith by appropriate
proceedings and shall set aside on its books adequate reserves with respect
thereto in accordance with GAAP and, in the case of a claim which could become a
Lien on any collateral, such contest proceedings shall stay the foreclosure of
such Lien or the sale of any portion of the collateral to satisfy such
claim.

     

    10.5 Maintenance of Existence,
etc.  Maintain and preserve, and (subject to Section 11.5)
cause each other Loan Party to maintain and preserve, (a) its existence and good
standing in the jurisdiction of its organization and (b) its qualification to do
business and good standing in each jurisdiction where the nature of its business
makes such qualification necessary (other than such jurisdictions in which the
failure to be qualified or in good standing could not reasonably be expected to
have a Material Adverse Effect).

     

    10.6 Use of
Proceeds.  Use the proceeds of the Loans and the Letters of
Credit, solely to fund and pay for acquisitions approved by the Required
Lenders, for working capital purposes, for Capital Expenditures and for other
general business purposes; and not use or permit any proceeds of any Loan to be
used, either directly or indirectly, for the purpose, whether immediate,
incidental or ultimate, of ‘purchasing or carrying’ any Margin
Stock.

     

    10.7 Employee Benefit
Plans.

     

    (a) Unless
and to the extent any Pension Plan is terminated, maintain, and cause each other
member of the Controlled Group to maintain, each Pension Plan in substantial
compliance with all applicable requirements of law and
regulations.

    
      
         

      

      
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    (b) Make, and
cause each other member of the Controlled Group to make, on a timely basis, all
required contributions to any Multiemployer Pension Plan.

     

    (c) Without
the Administrative Agent’s prior consent, not to be unreasonably withheld, not,
and not permit any other member of the Controlled Group to (i) seek a waiver of
the minimum funding standards of ERISA, (ii) terminate or withdraw from any
Pension Plan or Multiemployer Pension Plan or (iii) take any other action with
respect to any Pension Plan that would reasonably be expected to entitle the
PBGC to terminate, impose liability in respect of, or cause a trustee to be
appointed to administer, any Pension Plan, unless the actions or events
described in clauses (i), (ii) and (iii) individually or in the aggregate would
not have a Material Adverse Effect.

     

    (d) If any
Person institutes steps to terminate a Pension Plan, and as a result of such
termination the Company or any member of the Controlled Group could be required
to make a contribution to such Pension Plan or otherwise incur a liability to
such Pension Plan, the Company shall promptly notify the Administrative
Agent.

     

    10.8 Environmental
Matters.  If any release or threatened release or other
disposal of Hazardous Substances shall occur or shall have occurred on any real
property or any other assets of any Loan Party, the Company shall, or shall
cause the applicable Loan Party to, cause the prompt containment and removal of
such Hazardous Substances and the remediation of such real property or other
assets as necessary to comply with all Environmental Laws and to preserve the
value of such real property or other assets.  Without limiting the
generality of the foregoing, the Company shall, and shall cause each other Loan
Party to, comply with any Federal or state judicial or administrative order
requiring the performance at any real property of any Loan Party of activities
in response to the release or threatened release of a Hazardous
Substance.  To the extent that the transportation of Hazardous
Substances is permitted by this Agreement, the Company shall, and shall cause
its Subsidiaries to, dispose of such Hazardous Substances, or of any other
wastes, only at licensed disposal facilities operating in compliance with
Environmental Laws.

     

    10.9 Further
Assurances.  Take, and cause each other Loan Party to take,
such actions as are necessary or as the Administrative Agent or the Required
Lenders may reasonably request from time to time to ensure that the Obligations
of each Loan Party under the Loan Documents are (A) secured by the assets of the
type that the Loan Documents purport to grant a security interest in, including
all Capital Securities of each Domestic Subsidiary, of (i) the Company, (ii)
each Domestic Subsidiary and (iii) any Subsidiary that becomes a guarantor of
the Senior Notes or any other Material Debt, and (B) guaranteed by each Domestic
Subsidiary and any Subsidiary that becomes a guarantor of the Senior Notes or
any other Material Debt, in each case as the Administrative Agent may determine,
including (x) the execution and delivery of guaranties, security agreements,
pledge agreements, mortgages, deeds of trust, financing statements and other
documents, and the filing or recording of any of the foregoing, and (y) the
delivery of

    
      
         

      

      
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    certificated
securities and other collateral with respect to which perfection is obtained by
possession.  If the Administrative Agent at any time has a reasonable
basis to believe that there may be a violation of any Environmental Laws by any
Loan Party, on, at, in, under, above, to, from or about any of its Mortgaged
Real Property, which, in each case, could reasonably be expected to have a
Material Adverse Effect then each Loan Party, with respect to such Mortgaged
Real Property, upon the Administrative Agent’s written request shall cause the
performance of such environmental audits, including subsurface sampling of soil
and groundwater, and preparation of such environmental reports, at the Company’s
expense, as the Administrative Agent and the Company may mutually agree, or, if
any Default or Event of Default then exists and is continuing, as the
environmental consulting firms reasonably acceptable to the Administrative Agent
suggest and shall be in form and substance acceptable to the Administrative
Agent.

     

    10.10 Deposit
Accounts.  Unless the Administrative Agent otherwise consents
in writing, which consent shall not be unreasonably withheld, in order to
facilitate the Administrative Agent’s and the Lenders’ maintenance and
monitoring of their security interests in the collateral, maintain its and all
of Domestic Subsidiaries’ principal deposit accounts with the Administrative
Agent and the Lenders; provided, that any
deposit account maintained with a Lender other than the Administrative Agent is
subject to a tri-party account control agreement with respect to each such
account on terms acceptable to the Administrative Agent.

     

    10.11           Intentionally
omitted.

     

    10.12 Syndication.  Enter
into such modifications to the Loan Documents as the Administrative Agent may
reasonably request as necessary for the syndication of the Loans and the
Commitments.

     

    10.13 Appraisals.  Each
Loan Party shall, upon the Administrative Agent’s written request, (i) cause the
performance of such appraisals of the Collateral (excluding the Real Estate), at
Lenders’ expense (except with respect to the initial appraisals and any
appraisal undertaken after an Event of Default which shall be at Company’s
expense), as the Administrative Agent may from time to time reasonably request,
which shall be conducted by the prior appraisal firms or reputable firms
reasonably acceptable to the Administrative Agent and shall be in form and
substance acceptable to the Administrative Agent, and (ii) permit the
Administrative Agent or its representatives to have access to all Real Estate
for the purpose of conducting such appraisals as the Administrative Agent deems
appropriate; provided that if an Event of Default shall not have occurred, the
Administrative Agent shall request such appraisals no more frequently than once
annually from and after the Restatement Date.  Obligors shall
reimburse the Administrative Agent for the costs of such appraisals for which
they are responsible, and the same will constitute a part of  the
Obligations secured hereunder.  The Administrative Agent agrees to use
reasonable efforts to limit the costs of such appraisals to not more than
$75,000 per year without limiting the scope of any such
appraisal.  The

    
      
         

      

      
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     Administrative
Agent agrees to notify Company if any such appraisal exceeds or is anticipated
to exceed such amount.

     

    10.14 Immaterial Subsidiaries’
Assets.  Not permit any Immaterial Subsidiary listed on Schedule 9.23 to own
assets (excluding, in the case of Titan Tire Corporation of Texas, the
Brownsville Facility) having an aggregate book value which is greater than 130%
of that aggregate amount expressed in Schedule
9.23.

     

    10.15 Escrow.  All
payment Assignments made by the Obligors to the Administrative Agent pursuant to
the Assignment of Claims Act of 1940 and all Pledged Equity (as defined in the
Guaranty and Collateral Agreement) and stock powers relating thereto shall be
deposited with the Escrow Agent pursuant to the terms of the Escrow
Agreement.

     

    SECTION
11 NEGATIVE
COVENANTS

     

    Until the
expiration or termination of the Commitments and thereafter until all
Obligations hereunder and under the other Loan Documents are paid in full and
all Letters of Credit have been terminated, the Company agrees that, unless at
any time the Required Lenders shall otherwise expressly consent in writing, it
will:

     

    11.1 Debt.  Not,
and not permit any other Loan Party to, create, incur, guaranty, assume or
suffer to exist any Debt, except:

     

    (a) Debt of
the Company and the Loan Parties in an aggregate outstanding amount not at any
time exceeding $50,000,000;

     

    (b) Obligations
under this Agreement and the other Loan Documents;

     

    (c) Debt of
the Company to any Domestic Subsidiary or Debt of any Domestic Subsidiary to the
Company or another Domestic Subsidiary; provided that such
Debt shall be evidenced by a demand note in form and substance reasonably
satisfactory to the Administrative Agent and pledged and delivered to the
Administrative Agent pursuant to the Collateral Documents as additional
collateral security for the Obligations, and the obligations under such demand
note shall be subordinated to the Obligations of the Company hereunder in a
manner reasonably satisfactory to the Administrative Agent;

     

    (d) Hedging
Obligations approved by the Administrative Agent and incurred in favor of a
Lender or an Affiliate thereof for bona fide hedging purposes and not for
speculation;

     

    (e) Debt
described on Schedule
11.1 and any extension, renewal or refinancing thereof so long as the
principal amount thereof is not increased nor the amortization thereof
decreased;

    
      
         

      

      
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    (f) Unfunded
pension fund and other employee benefit plan obligations and liabilities to the
extent they are permitted to remain unfunded under applicable law;

     

    (g) Debt in
respect of Taxes, assessments, governmental charges or levies and claims for
labor, materials, and supplies to the extent payment thereof shall not at the
time be required by Section 10.4;

     

    (h) Contingent
Liabilities arising with respect to customary indemnification obligations in
favor of sellers in connection with Acquisitions permitted under Section 11.5 and
purchasers in connection with dispositions permitted under Section 11.5;
and

     

    (i) the
Senior Notes.

     

    Notwithstanding
the foregoing, neither the Company nor any other Loan Party shall be permitted
to incur Debt hereunder to the extent the Company or any other Loan Party is
prohibited from incurring such Debt pursuant to the terms of the documents
governing any Material Debt.

     

    11.2 Liens.  Not,
and not permit any other Loan Party to, create or permit to exist any Lien on
any of its real or personal properties, assets or rights of whatsoever nature
(whether now owned or hereafter acquired) including without limitation the
Freeport Facility and the Bryan Facility, except:

     

    (a) Liens for
taxes or other governmental charges not at the time delinquent or thereafter
payable without penalty or being contested in good faith by appropriate
proceedings and, in each case, for which it maintains adequate
reserves;

     

    (b) Liens
arising in the ordinary course of business (such as (i) Liens of carriers,
warehousemen, mechanics and materialmen and other similar Liens imposed by law
and securing obligations not exceeding in the aggregate $20,000,000 at any time
and (ii) Liens in the form of deposits or pledges incurred in connection with
worker’s compensation, unemployment compensation and other types of social
security (excluding Liens arising under ERISA) or in connection with surety
bonds, bids, performance bonds and similar obligations) for sums not overdue or
being contested in good faith by appropriate proceedings and not involving any
advances or borrowed money or the deferred purchase price of property or
services and, in each case, for which it maintains adequate
reserves;

     

    (c) Liens
described on Schedule
11.2 as of the Restatement Date;

     

    (d) subject
to the limitation set forth in Section 11.1(a), (i)
Liens arising in connection with Capital Leases (and attaching only to the
property being leased), (ii) Liens existing on property at the time of the
acquisition thereof by any Loan Party

    
      
         

      

      
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    (and not
created in contemplation of such acquisition) and (iii) Liens that constitute
purchase money security interests on any property securing debt incurred for the
purpose of financing all or any part of the cost of acquiring such property,
provided that
any such Lien attaches to such property within 20 days of the acquisition
thereof and attaches solely to the property so acquired;

     

    (e) attachments,
appeal bonds, judgments and other similar Liens, which would not be reasonably
expected to result in a Material Adverse Effect arising in connection with court
proceedings, provided the
execution or other enforcement of such Liens is effectively stayed and the
claims secured thereby are being actively contested in good faith and by
appropriate proceedings;

     

    (f) easements,
rights of way, restrictions, minor defects or irregularities in title and other
similar Liens not interfering in any material respect with the ordinary conduct
of the business of any Loan Party;

     

    (g) Liens
arising under the Loan Documents; and

     

    (h) the
replacement, extension or renewal of any Lien permitted by clause (c) above upon
or in the same property subject thereto arising out of the extension, renewal or
replacement of the Debt secured thereby (without increase in the amount
thereof).

     

    11.3 Operating
Leases.  Not permit the aggregate amount of all rental payments
under Operating Leases made (or scheduled to be made) by the Loan Parties (on a
consolidated basis) to exceed $15,000,000 in any Fiscal Year, except in any
Fiscal Year when prepayment described in Section 11.4(e)(vi)
may occur.

     

    11.4 Restricted
Payments.  Not, and not permit any other Loan Party to, (a)
make any distribution to any holders of its Capital Securities, (b) purchase or
redeem any of its Capital Securities in excess of $5,000,000 in the aggregate in
any Fiscal Year, (c) pay any management fees or similar fees to any of its
equityholders or any Affiliate thereof, (d) make any redemption, prepayment,
defeasance, repurchase or any other payment in respect of any Subordinated Debt,
(e) make any voluntary redemption, prepayment, defeasance, repurchase or any
other voluntary payment in respect of any Senior Notes or any other Material
Debt (other than a Debt secured by a Permitted Lien if the asset securing such
Debt is sold in accordance with Section 11.5); or (f)
set aside funds for any of the foregoing.  Notwithstanding the
foregoing, (i) any Subsidiary may pay dividends or make other distributions to
the Company or to a Domestic Subsidiary; (ii) the Company may
make regularly scheduled payments of interest in respect of Subordinated Debt to
the extent permitted under the subordination provisions thereof; (iii) the Loan
Parties may make regularly scheduled principal and interest payments in respect
of, and may prepay with any Permitted Refinancing, the Senior Notes and any
other Material Debt; (iv) the Company may pay a cash dividend in any Fiscal
Quarter of not more than $1,000,000 in the aggregate; (v) the Company may pay
directors’ fees and reimbursable expenses; and (vi) in addition to
the

    
      
         

      

      
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    purchase
or redemption of Capital Securities permitted pursuant to clause (b) of this
Section 11.4,
the Company may make Permitted Redemptions during the term of this Agreement on
any date, so long as, after giving effect thereto, tested only as of the date
thereof and not subject to a retest due to a change in any of the following at
any time thereafter: (A) the Company’s Revolving Loan Excess Availability is
equal to or greater than $100,000,000 (B) the Available Amount equals or exceeds
$0 and (C) no Event of Default or Default exists or would result
therefrom.  For purposes of clarification, neither the Company nor any
other Loan Party shall make any payment otherwise permitted to be made under
this Section
11.4 to the extent such payment would be prohibited pursuant to the terms
of the documents governing any Material Debt.

     

    11.5 Mergers, Consolidations,
Sales.  Not, and not permit any other Loan Party to, (a) create
any Subsidiary; (b) without the Required Lenders’ prior written consent, not to
be unreasonably withheld, to consummate any merger or consolidation, or purchase
or otherwise acquire all or substantially all of the assets or any Capital
Securities of any class of, or any partnership or joint venture interest in, any
other Person, including, without limitation, Titan Europe, (c) sell, transfer,
convey or lease all or any substantial part of its assets or Capital Securities
(including the sale of Capital Securities of any Subsidiary) except for sales of
Inventory in the ordinary course of business or as otherwise allowed in this
Agreement, or (d) sell or assign with or without recourse any
receivables.  Notwithstanding the foregoing, the following shall be
permitted:  (i) with Required Lenders’ prior written consent (such
consent not to be unreasonably withheld) the sale, transfer, conveyance or other
disposition by a Loan Party of machinery and equipment during the term of this
Agreement having an Orderly Liquidation Value not exceeding $50,000,000 in the
aggregate, provided however, no disposition may occur if and to the extent that
any such contemplated disposition is for a cash amount which is less than the
Orderly Liquidation Value of any such asset; (ii) transfers between Obligors
provided that the Administrative Agent maintains a first priority perfected
security interest in the asset transferred; (iii) sales of the Capital
Securities of any Foreign Subsidiary; and (iv) the sale, transfer, conveyance or
other disposition by a Loan Party of equipment or fixtures that are obsolete or
no longer used or useful in such Loan Party’s business and having a value not
exceeding $10,000,000 in the aggregate in any Fiscal Year, provided such
equipment or fixtures is replaced by equipment or fixtures of comparable value
or worth and provided further that the Administrative Agent maintains a first
priority perfected security interest in the replacement equipment or fixtures.
With respect to any disposition of assets or other properties permitted pursuant
to clause (i)
above, the Administrative Agent agrees, upon reasonable prior written notice, to
release the Lien on such assets or other properties in order to permit the
applicable Loan Party to effect such disposition and shall execute and deliver
to Company at Company’s expense, appropriate UCC-3 termination statements and
other releases as reasonably requested by Company.

    
      
         

      

      
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    11.6 Modification of
Organizational Documents.  Not permit the charter, by-laws or
other organizational documents of any Loan Party to be amended or modified in
any way which could reasonably be expected to materially adversely affect the
interests of the Lenders.

     

    11.7 Transactions with
Affiliates.  Not, and not permit any other Loan Party to, enter
into, or cause, suffer or permit to exist any transaction, arrangement or
contract with any of its other Affiliates (other than the Loan Parties) other
than in the ordinary course of business and which is on fair and reasonable
terms which are no less favorable than are obtainable from any Person which is
not one of its Affiliates. In addition, if any such transaction or series of
related transactions involves payments in excess of $10,000,000 in the
aggregate, the terms of these transactions if not previously disclosed in Schedule 11.7 must be
disclosed in advance to the Administrative Agent.  All such
transactions existing as of the date hereof are described on Schedule
11.7.  No Loan Party shall enter into any lending or borrowing
transaction with any employees of any Loan Party, except loans to their
respective employees on an arm’s-length basis in the ordinary course of business
consistent with past practices for travel expenses, relocation costs and similar
purposes and stock option financing up to a maximum of $500,000 in the aggregate
at any one time outstanding.

     

    11.8 Unconditional Purchase
Obligations.  Not, and not permit any other Loan Party to,
enter into or be a party to any contract for the purchase of materials, supplies
or other property or services if such contract requires that payment be made by
it regardless of whether delivery is ever made of such materials, supplies or
other property or services, which is outside of the ordinary course of business
and inconsistent with past practices.

     

    11.9 Inconsistent
Agreements.  Not, and not permit any other Loan Party to, enter
into any agreement containing any provision which would (a) be violated or
breached by any borrowing by the Company hereunder or by the performance by any
Loan Party of any of its Obligations hereunder or under any other Loan Document,
(b) prohibit any Loan Party from granting to the Administrative Agent and the
Lenders, a Lien on any of its assets or (c) create or permit to exist or become
effective any encumbrance or restriction on the ability of any Subsidiary to (i)
pay dividends or make other distributions to the Company or any other
Subsidiary, or pay any indebtedness owed to the Company or any other Subsidiary,
(ii) make loans or advances to any Loan Party or (iii) transfer any of its
assets or properties to any Loan Party, other than (A) customary restrictions
and conditions contained in agreements relating to the sale of all or a
substantial part of the assets of any Subsidiary pending such sale, provided that such
restrictions and conditions apply only to the Subsidiary to be sold and such
sale is permitted hereunder (B) restrictions or conditions imposed by any
agreement relating to purchase money indebtedness, Capital Leases and other
secured indebtedness permitted by this Agreement if such restrictions or
conditions apply only to the property or assets securing such indebtedness and
(C) customary provisions in leases and other contracts restricting the
assignment thereof.

    
      
         

      

      
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    11.10 Business Activities;
Issuance of Equity.  Not, and not permit any other Loan Party
to, engage in any line of business other than the businesses engaged on the date
hereof and businesses reasonably related thereto and shall not and not permit
any other Loan Party to change its business objectives, purposes or operations
if such activities could in any way adversely effect the repayment of the Loans
or any other Debt or could reasonably be expected to result in a Material
Adverse Effect.  Not, and not permit any other Loan Party to, issue
any Capital Securities other than (a) any issuance of shares of the Company’s
Common Stock pursuant to (i) a stock split approved by the Company’s board of
directors or (ii)
any employee or director option program, benefit plan or compensation program;
(b) any issuance by a Subsidiary to the Company or another Subsidiary in
accordance with Section 11.4; or (c)
for a merger or acquisition with the prior written consent of the Administrative
Agent, which shall not be unreasonably withheld.

     

    11.11 Investments.  Except
as otherwise expressly permitted by this Section 11, no Loan
Party shall make or permit to exist any Investment in, any Person, except that
(a) Obligors may hold investments comprised of notes payable, or stock or other
securities issued by Account Debtors to any Obligor pursuant to negotiated
agreements with respect to settlement of such Account Debtor’s Accounts in the
ordinary course of business, so long as Obligors deliver physical possession of
such note payable, stock or other security to the Administrative Agent along
with all endorsements and stock powers requested by the Administrative Agent
with respect to any such note payable, stock or security that exceeds
$1,000,000; (b) each Loan Party may maintain its existing investments in its
Subsidiaries and in Titan Europe as of the Restatement Date as set forth on
Schedule 11.11;
(c) Obligors may on any date make Permitted Minority Investments (and once made,
such Investments may be maintained), so long as, after giving effect thereto,
tested only as of the date thereof and not subject to a retest due to a change
in any of the following at any time thereafter: (A) the Company’s Revolving Loan
Excess Availability is equal to or greater than $100,000,000, (B) the Available
Amount equals or exceeds $0 and (C) no Event of Default or Default exists or
would result therefrom; (d) so long as no Default or Event of Default shall have
occurred and be continuing, the Obligors’ may use available unrestricted cash
balances, subject to a perfected security interest in such investment in favor
of the Administrative Agent (provided that with respect to investments existing
on the Restatement Date, such security interest is not required to be perfected
prior March 31, 2009), to acquire (i) marketable direct obligations issued or
unconditionally guaranteed by the United States of America or any agency thereof
maturing within one year from the date of acquisition thereof, (ii) commercial
paper maturing no more than one year from the date of creation thereof and
currently having the highest rating obtainable from either Standard & Poor’s
Ratings Group or Moody’s Investors Service, Inc., (iii) certificates of deposit,
maturing no more than one year from the date of creation thereof, issued by
commercial banks incorporated under the laws of the United States of America,
and either (A) such certificate of deposit is fully insured by the FDIC or (B)
is issued by such commercial banks, each having combined capital, surplus and
undivided profits of not less than $200,000,000 and having a senior unsecured
rating of “A” or better by a nationally recognized rating agency (an “A Rated Bank”), (iv)
interest or non-interest bearing

    
      
         

      

      
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    deposits
and time deposits, maturing no more than 30 days from the date of creation
thereof, in each case with A Rated Banks or Lenders and (v) mutual funds that
invest solely in one or more of the investments described in clauses (i) through
(iv) above; and (e) Obligors may hold notes payable or other indebtedness from
any Foreign Subsidiary of any Loan Party, provided that (A)
each such Foreign Subsidiary shall have executed and delivered to each such
Obligor, a demand note (collectively, the “Intercompany Notes”)
to evidence any such intercompany Indebtedness owing at any time by such Foreign
Subsidiary to such Obligor, which Intercompany Notes shall be in form and
substance satisfactory to the Administrative Agent and shall be pledged and
delivered to the Administrative Agent pursuant to a pledge agreement or security
agreement in form and content satisfactory to the Administrative Agent in its
sole discretion as additional collateral security for the Obligations, (B) each
Loan Party shall record all intercompany transactions on its books and records
in a manner consistent with past practices, (C) at the time any such
intercompany loan or advance is made by any Obligor to any Foreign Subsidiary
and after giving effect thereto, each such Obligor shall be Solvent, (D) no
Default or Event of Default exists or would occur and be continuing after giving
effect to any such proposed intercompany loan, (E) the recipient of such
intercompany loans shall be creditworthy as determined by the Administrative
Agent, (F) such foreign intercompany loans do not exceed at any time, in the
aggregate, the sum of $50,000,000; and (G) the Company’s Revolving Loan Excess
Availability is equal to or greater than $100,000,000 after giving effect to
such Investment.

     

    11.12 Restriction of Amendments to
Certain Documents.  Not amend or otherwise modify, or waive any
rights under, the Foreign Affiliate Loans, or Senior Notes if, in any case, such
amendment, modification or waiver could be adverse to the interests of the
Lenders.

     

    11.13 Fiscal
Year.  Not change its Fiscal Year.

     

    11.14 Financial
Covenants.

     

    11.14.1 Intentionally
Omitted.

     

    11.14.2 Fixed Charge Coverage
Ratio.  In the event the average daily balance of the Revolving
Outstandings exceed $125,000,000 during any 30 day period ending during any
Fiscal Quarter, not permit the Fixed Charge Coverage Ratio for the Computation
Period ending on the last day of such Fiscal Quarter to be less than 1.0 to
1.0.

     

    11.14.3 Collateral
Coverage.  Not permit (a) the sum of the Borrowing Base, plus the unrestricted
cash of all Obligors; divided by (b) the
Revolving Outstandings, to be less than one and one-fifth (1.20).

     

    11.14.4 Cancellation of
Debt.  Not, and not permit any other Loan Party to,
cancel any claim or debt owing to it, except for reasonable consideration
negotiated on an arms-length basis and in the ordinary course of business
consistent with past practices and customary write downs and charge offs for bad
debts consistent with past practices.

    
      
         

      

      
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    11.15 ERISA.  No
Loan Party shall cause or permit to occur an event which could result in the
imposition of a Lien under Section 412 of the IRC or Section 302 or 4068 of
ERISA or cause or permit to occur a Termination Event to the extent such
Termination Event could reasonably be expected to have a Material Adverse
Effect.

     

    11.16 Inventory.  Not
permit Inventory of the Loan Parties having an aggregate book value exceeding
Sixty Million and No/100 Dollars ($60,000,000.00) at any time to be in a
location or locations other than the Mortgaged Real Property, the Brownsville
Facility, the Freeport Facility, the Bryan Facility, and that facility currently
occupied by Titan Wheel Corporation of Virginia as its principal place of
business.

     

    11.17 Restricted
Subsidiaries.  Neither Titan Luxembourg S.A.R.L., Titan Europe
nor any of their respective Subsidiaries shall (i) become Restricted
Subsidiaries (as defined in the Senior Note Indenture) under the Senior Note
Indenture or (ii) guaranty or directly or indirectly provide credit support for
any Material Debt.

     

    SECTION
12 EFFECTIVENESS;
CONDITIONS OF LENDING, ETC.

     

    The
effectiveness of this Agreement is subject to the following conditions
precedent:

     

    12.1 Effectiveness.  The
effectiveness of this Agreement is subject to the condition precedent that the
Administrative Agent shall have received all of the following, each duly
executed and dated the Restatement Date (or such earlier date as shall be
satisfactory to the Administrative Agent), in form and substance satisfactory to
the Administrative Agent (and the date on which all such conditions precedent
have been satisfied or waived in writing by the Administrative Agent and the
Lenders is called the “Restatement
Date”):

     

    12.1.1 Notes.  A
Note for each Lender.

     

    12.1.2 Authorization
Documents.  For each Loan Party, such Person’s (a) charter (or
similar formation document), certified by the secretary of each Loan Party; (b)
good standing certificates in its state of incorporation (or formation) and in
each other state requested by the Administrative Agent; (c) bylaws (or similar
governing document); (d) resolutions of its board of directors (or similar
governing body) approving and authorizing such Person’s execution, delivery and
performance of the Loan Documents to which it is party and the transactions
contemplated thereby; and (e) signature and incumbency certificates of its
officers executing any of the Loan Documents (it being understood that the
Administrative Agent and each Lender may conclusively rely on each such
certificate until formally advised by a like certificate of any changes
therein), all certified by its secretary or an assistant secretary (or similar
officer) as being in full force and effect without modification.

     

    12.1.3 Consents,
etc.  Certified copies of all documents evidencing any
necessary corporate or partnership action, consents and governmental approvals
(if any) required for the

    
      
         

      

      
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    execution,
delivery and performance by the Loan Parties of the documents referred to in
this Section 12.

     

    12.1.4 Reaffirmation.  The
Reaffirmation Agreement, all other Collateral Documents, and all instruments,
documents, certificates and agreements executed or delivered pursuant thereto
(including intellectual property assignments and all pledged Collateral, with
undated irrevocable transfer powers executed in blank, which shall be executed
by each Loan Party).

     

    12.1.5 Assignments.  The
Escrow Agent shall have received all payment Assignments made by the Obligors to
the Administrative Agent pursuant to the Assignment of Claims Act of 1940 and
all Pledged Equity and stock powers required to be delivered to the
Administrative Agent pursuant to the terms of the Guaranty and Collateral
Agreement.

     

    12.1.6 Real Estate
Documents.  With respect to each parcel of Mortgaged Real
Property, a duly executed amendment to the Mortgage, in form and substance
acceptable to the Administrative Agent, together with:

     

    (a) a
date-down of the existing ALTA Loan Title Insurance Policy containing such
endorsements as the Administrative Agent may reasonably require;
and

     

    (b) to the
extent necessary to obtain the date-down referenced in clause (a) of this
Section 12.1.6,
a survey certified to the Administrative Agent for the benefit of the Lenders
meeting such standards as the Administrative Agent may reasonably
establish.

     

    12.1.7 Opinions of
Counsel.  Opinions of counsel for each Obligor covering the
laws of the state of Illinois.

     

    12.1.8 Insurance.  Evidence
of the existence of insurance required to be maintained pursuant to Section 10.3(b),
together with evidence that the Administrative Agent has been named as a
lender’s loss payee and an additional insured on all related insurance
policies.

     

    12.1.9 Subordination.  A
duly executed reaffirmation of the existing subordination letter with respect to
the Foreign Affiliate Loans.

     

    12.1.10 Payment of
Fees.  Evidence of payment by the Company of all accrued and
unpaid fees, costs and expenses to the extent then due and payable under the Fee
Letter on or before the Restatement Date, together with all Attorney Costs of
the Administrative Agent to the extent invoiced prior to the Restatement Date,
plus such
additional amounts of Attorney Costs as shall constitute the Administrative
Agent’s reasonable estimate of Attorney Costs incurred or to be incurred by the
Administrative Agent through the closing proceedings (provided that such
estimate shall not thereafter preclude final settling of accounts between the
Company and the Administrative Agent).

    
      
         

      

      
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    12.1.11 Compliance.  The
Obligors shall be in full compliance with the terms of this Agreement and other
Loan Documents and no Event of Default or Default shall have occurred or be
continuing.

     

    12.1.12 Search Results; Lien
Terminations.  Certified copies of Uniform Commercial Code
search reports dated a date reasonably near to the Restatement Date, listing all
effective financing statements which name any Obligor (under their present names
and any previous names) as debtors, together with (a) copies of such financing
statements and (b) such other Uniform Commercial Code termination statements as
the Administrative Agent may reasonably request.

     

    12.1.13 Filings, Registrations and
Recordings.  The Administrative Agent shall have received each
document (including Uniform Commercial Code financing statements) required by
the Collateral Documents or under law or reasonably requested by the
Administrative Agent to be filed, registered or recorded in order to create or
continue in favor of the Administrative Agent, for the benefit of the Lenders, a
perfected Lien on the collateral described therein, prior to any other Liens
(subject only to Liens permitted pursuant to Section 11.2), in
proper form for filing, registration or recording.

     

    12.1.14 Borrowing Base
Certificate.  A Borrowing Base Certificate with an effective
date as of the end of the Company’s third 2008 Fiscal Quarter.

     

    12.1.15 Closing
Certificate.  A certificate executed by an officer of the
Company on behalf of the Company certifying the matters set forth in Section 12.2.1 as of
the Restatement Date.

     

    12.1.16 Prior Lender
Consents.  A consent from each Existing Lender set forth on
Annex C in form
satisfactory to the Administrative Agent.

     

    12.1.17 Other.  Such
other documents as the Administrative Agent or any Lender may reasonably
request.

     

    12.2 Conditions.  The
obligation (a) of each Lender to make each Loan and (b) of the Issuing
Lender to issue each Letter of Credit (including any such Loan or Letter of
Credit made or issued on the Restatement Date) is subject to the following
further conditions precedent that:

     

    12.2.1 Compliance with Warranties,
No Default, etc.  Both before and after giving effect to any
borrowing and the issuance of any Letter of Credit, the following statements
shall be true and correct:

     

    (a) the
representations and warranties of each Loan Party set forth in this Agreement
and the other Loan Documents shall be true and correct in all respects with the
same effect as if then made (except to the extent stated to relate to a specific
earlier

    
      
         

      

      
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    date, in
which case such representations and warranties shall be true and correct as of
such earlier date); and

     

    (b) no Event
of Default or Default shall have then occurred and be continuing.

     

    12.2.2 Confirmatory
Certificate.  If requested by the Administrative Agent or any
Lender, the Administrative Agent shall have received a certificate dated
the date of such requested Loan or Letter of Credit and signed by a duly
authorized representative of the Company as to the matters set out in Section 12.2.1 (it
being understood that each request by the Company for the making of a Loan or
the issuance of a Letter of Credit shall be deemed to constitute a
representation and warranty by the Company that the conditions precedent set
forth in Section
12.2.1 will be satisfied at the time of the making of such Loan or the
issuance of such Letter of Credit), together with such other documents as the
Administrative Agent or any Lender may reasonably request in support
thereof.

     

    SECTION
13 EVENTS OF
DEFAULT AND THEIR EFFECT.

     

    13.1 Events of
Default.  Each of the following shall constitute an Event
of Default under this Agreement:

     

    13.1.1 Non-Payment of the Loans,
etc.  Default in the payment when due of the principal of any
Loan; or default, and continuance thereof for five days, in the payment when due
of any interest, fee, reimbursement obligation with respect to any Letter of
Credit or other amount payable by the Company hereunder or under any other Loan
Document.

     

    13.1.2 Non-Payment of Other
Debt.  Any default shall occur which is not cured within any
applicable cure period under the terms applicable to any Debt of any Loan Party
in an aggregate amount (for all such Debt so affected and including undrawn
committed or available amounts and amounts owing to all creditors under any
combined or syndicated credit arrangement) exceeding Ten Million and No/100
Dollars ($10,000,000.00) and such default shall (a) consist of the failure to
pay such Debt when due, whether by acceleration or otherwise, or (b) accelerate
the maturity of such Debt or permit the holder or holders thereof, or any
trustee or agent for such holder or holders, to cause such Debt to become due
and payable (or require any Loan Party to purchase or redeem such Debt or post
cash collateral in respect thereof) prior to its expressed
maturity.

     

    13.1.3 Other Material
Obligations.  Default which is not cured within any applicable
cure period in the payment when due, or in the performance or observance of, any
material obligation of, or condition agreed to by, any Loan Party with respect
to any material purchase or lease of goods or services where such default,
singly or in the aggregate with all other such defaults, might reasonably be
expected to have a Material Adverse Effect.

    
      
         

      

      
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    13.1.4 Bankruptcy, Insolvency,
etc.  Any Loan Party becomes insolvent or generally fails to
pay, or admits in writing its inability or refusal to pay, debts as they become
due; or any Loan Party applies for, consents to, or acquiesces in the
appointment of a trustee, receiver or other custodian for such Loan Party or any
property thereof, or makes a general assignment for the benefit of creditors;
or, in the absence of such application, consent or acquiescence, a trustee,
receiver or other custodian is appointed for any Loan Party or for a substantial
part of the property of any thereof and is not discharged within 60 days; or any
bankruptcy, reorganization, debt arrangement, or other case or proceeding under
any bankruptcy or insolvency law, or any dissolution or liquidation proceeding,
is commenced in respect of any Loan Party, and if such case or proceeding is not
commenced by such Loan Party, it is consented to or acquiesced in by such Loan
Party, or remains for 60 days undismissed; or any Loan Party takes any action to
authorize, or in furtherance of, any of the foregoing.

     

    13.1.5 Non-Compliance with Loan
Documents.  (a) Failure by any Loan Party to comply with or to
perform any covenant set forth in Section 10.1.5, 10.3(b),10.5
or 10.6 or Section 11; or
(b) failure by any Loan Party to comply with or to perform any other
provision of this Agreement or any other Loan Document (and not constituting an
Event of Default under any other provision of this Section 13) and
continuance of such failure described in this clause (b) for 30
days.

     

    13.1.6 Representations;
Warranties.  Any representation or warranty made by any Loan
Party herein or any other Loan Document is breached or is false or misleading in
any material respect, or any schedule, certificate, financial statement, report,
notice or other writing furnished by any Loan Party to the Administrative Agent
or any Lender in connection herewith is false or misleading in any material
respect on the date as of which the facts therein set forth are stated or
certified.

     

    13.1.7 Pension
Plans.  (a)  any Loan Party does not materially comply
with ERISA and all other federal and local laws concerning benefit plans, or (b)
there shall occur any withdrawal or partial withdrawal from a Multiemployer
Pension Plan and the withdrawal liability (without unaccrued interest) to
Multiemployer Pension Plans as a result of such withdrawal (including any
outstanding withdrawal liability that the Company or any member of the
Controlled Group have incurred on the date of such withdrawal) is
material.

     

    13.1.8 Judgments.  Final
judgments which could result in a Material Adverse Effect rendered against any
Loan Party and shall not have been paid, discharged or vacated or had execution
thereof stayed pending appeal within 90 days after entry or filing of such
judgments, provided that the Party is diligently pursuing post-judgment
relief.

     

    13.1.9 Invalidity of Collateral
Documents, etc.  Any Collateral Document shall cease to be in
full force and effect; or any Loan Party (or any Person by, through or on behalf
of any

    
      
         

      

      
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    Loan
Party) shall contest in any manner the validity, binding nature or
enforceability of any Collateral Document.

     

    13.1.10 Invalidity of Subordination
Provisions, etc.  Any subordination provision in any document
or instrument governing Subordinated Debt, or any subordination provision in any
guaranty by any Subsidiary of any Subordinated Debt, shall cease to be in full
force and effect, or any Loan Party or any other Person (including the holder of
any applicable Subordinated Debt) shall contest in any manner the validity,
binding nature or enforceability of any such provision.

     

    13.1.11 Change of
Control.  A Change of Control shall occur.

     

    13.1.12 Material Adverse
Effect.  The occurrence of any event having a Material Adverse
Effect, as reasonably determined by the Administrative Agent.

     

    13.1.13   Intentionally
Omitted.

    

    13.2 Effect of
Event of Default.  If any Event of Default described in
Section 13.1.4
shall occur in respect of the Company, the Commitments shall immediately
terminate and the Loans and all other Obligations hereunder shall become
immediately due and payable and the Company shall become immediately obligated
to Cash Collateralize all L/C Obligations, all without presentment, demand,
protest or notice of any kind; and, if any other Event of Default shall occur
and be continuing, the Administrative Agent may (and, upon the written request
of the Required Lenders shall) declare the Commitments to be terminated in whole
or in part and/or declare all or any part of the Loans and all other Obligations
hereunder to be due and payable and/or demand that the Company immediately Cash
Collateralize all or any L/C Obligations, whereupon the Commitments shall
immediately terminate (or be reduced, as applicable) and/or the Loans and other
Obligations hereunder shall become immediately due and payable (in whole or in
part, as applicable) and/or the Company shall immediately become obligated to
Cash Collateralize the L/C Obligations (all or any, as applicable), all without
presentment, demand, protest or notice of any kind.  The
Administrative Agent shall promptly advise the Company of any such declaration,
but failure to do so shall not impair the effect of such
declaration.  Any cash collateral delivered hereunder shall be held by
the Administrative Agent (without liability for interest thereon) and applied to
the L/C Obligations as and to the extent due.  After the expiration or
termination of all Letters of Credit, such cash collateral shall be applied by
the Administrative Agent to any remaining Obligations hereunder and any excess
shall be delivered to the Company or as a court of competent jurisdiction may
elect.  During the existence of any Event of Default or Default the
Administrative Agent shall specifically be permitted to communicate directly
with the Company’s certified public accountants and Company hereby authorizes
and instructs those accountants to disclose such financial information as the
Administrative Agent shall request.

    
      
         

      

      
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    SECTION
14 THE
ADMINISTRATIVE AGENT.

     

    14.1 Appointment and
Authorization.  Each Lender hereby irrevocably (subject to
Section 14.10) appoints, designates and authorizes the Administrative Agent to
take such action on its behalf under the provisions of this Agreement and each
other Loan Document and to exercise such powers and perform such duties as are
expressly delegated to it by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental
thereto.  Notwithstanding any provision to the contrary contained
elsewhere in this Agreement or in any other Loan Document, the Administrative
Agent shall not have any duty or responsibility except those expressly set forth
herein, nor shall the Administrative Agent have or be deemed to have any
fiduciary relationship with any Lender or participant, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.  Without limiting the generality of the
foregoing sentence, the use of the term “agent” herein and in other Loan
Documents with reference to the Administrative Agent is not intended to connote
any fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable law.  Instead, such term is used merely as
a matter of market custom, and is intended to create or reflect only an
administrative relationship between independent contracting
parties.

     

    14.2 Issuing
Lender.  The Issuing Lender shall act on behalf of the Lenders
(according to their Pro Rata Shares) with respect to any Letters of Credit
issued by it and the documents associated therewith.  The Issuing
Lender shall have all of the benefits and immunities (a) provided to the
Administrative Agent in this Section 14 with
respect to any acts taken or omissions suffered by the Issuing Lender in
connection with Letters of Credit issued by it or proposed to be issued by it
and the Issuer Documents pertaining to such Letters of Credit as fully as if the
term “Administrative Agent”, as used in this Section 14, included
the Issuing Lender with respect to such acts or omissions and (b) as
additionally provided in this Agreement with respect to the Issuing
Lender.

     

    14.3 Delegation of
Duties.  The Administrative 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 and other
consultants or experts concerning all matters pertaining to such
duties.  The Administrative Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects in the
absence of gross negligence or willful misconduct.  Any decision to
foreclose a Mortgaged Real Property shall require the consent of the
Administrative Agent.

     

    14.4 Exculpation of
Administrative Agent.  Neither the Administrative Agent nor any
of its directors, officers, employees or agents 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 to the extent resulting from its own gross negligence or willful
misconduct in connection with its duties expressly set forth herein
as

    
      
         

      

      
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    determined
by a final, nonappealable judgment by a court of competent jurisdiction), or (b)
be responsible in any manner to any Lender or participant for any recital,
statement, representation or warranty made by any Loan Party or Affiliate of the
Company, or any officer thereof, contained in this Agreement or in any other
Loan Document, or in any certificate, report, statement or other document
referred to or provided for in, or received by the Administrative 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 the creation, perfection or priority of any Lien or
security interest therein), or for any failure of the Company or any other party
to any Loan Document to perform its Obligations hereunder or
thereunder.  The Administrative Agent shall not be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of the Company or any of the Company’s Subsidiaries or
Affiliates.

     

    14.5 Reliance by Administrative
Agent.  The Administrative Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, communication, signature,
resolution, representation, notice, consent, certificate, electronic mail
message, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to the
Company), independent accountants and other experts selected by the
Administrative Agent.  The Administrative Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or concurrence of
the Required Lenders as it deems appropriate and, if it so requests,
confirmation from the Lenders of their obligation to indemnify the
Administrative Agent against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any such
action.  The Administrative 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 Required
Lenders and such request and any action taken or failure to act pursuant thereto
shall be binding upon each Lender.  For purposes of determining
compliance with the conditions specified in Section 12, each
Lender that has signed this Agreement shall be deemed to have consented to,
approved or accepted or to be satisfied with, each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender unless the Administrative Agent shall have received
written notice from such Lender prior to the proposed Restatement Date
specifying its objection thereto.

     

    14.6 Notice of
Default.  The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of any Event of Default or Default except
with respect to defaults in the payment of principal, interest and fees required
to be paid to the Administrative Agent for the account of the Lenders, unless
the Administrative Agent shall have received written notice from a Lender or the
Company referring to this Agreement, describing such Event of Default or Default
and stating that such notice is a “notice of default”.  The
Administrative

    
      
         

      

      
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    Agent
will notify the Lenders of its receipt of any such notice.  The
Administrative Agent shall take such action with respect to such Event of
Default or Default as may be requested by the Required Lenders in accordance
with Section
13; provided that unless
and until the Administrative Agent has received any such request, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Event of Default or
Default as it shall deem advisable or in the best interest of the
Lenders.

     

    14.7 Credit
Decision.  Each Lender acknowledges that the Administrative
Agent has not made any representation or warranty to it, and that no act by the
Administrative Agent hereafter taken, including any consent and acceptance of
any assignment or review of the affairs of the Loan Parties, shall be deemed to
constitute any representation or warranty by the Administrative Agent to any
Lender as to any matter, including whether the Administrative Agent has
disclosed material information in its possession.  Each Lender
represents to the Administrative Agent that it has, independently and without
reliance upon the Administrative Agent and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial and
other condition and creditworthiness of the Loan Parties, and made its own
decision to enter into this Agreement and to extend credit to the Company
hereunder.  Each Lender also represents that it will, independently
and without reliance upon the Administrative Agent and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Company.  Except for notices, reports and
other documents expressly herein required to be furnished to the Lenders by the
Administrative Agent, the Administrative Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial or other
condition or creditworthiness of the Company which may come into the possession
of the Administrative Agent.

     

    14.8 Indemnification.  Whether
or not the transactions contemplated hereby are consummated, each Lender shall
indemnify upon demand the Administrative Agent and its directors, officers,
employees and agents (to the extent not reimbursed by or on behalf of the
Company and without limiting the obligation of the Company to do so), according
to its applicable Pro Rata Share, from and against any and all Indemnified
Liabilities (as hereinafter defined); provided that no
Lender shall be liable for any payment to any such Person of any portion of the
Indemnified Liabilities to the extent determined by a final, nonappealable
judgment by a court of competent jurisdiction to have resulted from the
applicable Person’s own gross negligence or willful misconduct.  No
action taken in accordance with the directions of the Required Lenders shall be
deemed to constitute gross negligence or willful misconduct for purposes of this
Section.  Without limitation of the foregoing, each Lender shall
reimburse the Administrative Agent upon demand for its ratable share of any
costs or out-of-pocket expenses

    
      
         

      

      
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    (including
Attorney Costs and Taxes) incurred by the Administrative 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 the Administrative Agent is not
reimbursed for such expenses by or on behalf of the Company.  The
undertaking in this Section shall survive repayment of the Loans, cancellation
of the Notes, expiration or termination of the Letters of Credit, any
foreclosure under, or modification, release or discharge of, any or all of the
Collateral Documents, termination of this Agreement and the resignation or
replacement of the Administrative Agent.

     

    14.9 Administrative Agent in
Individual Capacity.  Bank of America 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 the Loan Parties and
Affiliates as though Bank of America was not the Administrative Agent hereunder
and without notice to or consent of any Lender.  Each Lender
acknowledges that, pursuant to such activities, Bank of America or its
Affiliates may receive information regarding the Company or its Affiliates
(including information that may be subject to confidentiality obligations in
favor of the Company or such Affiliate) and acknowledge that the Administrative
Agent shall be under no obligation to provide such information to
them.  With respect to its Loans (if any),  Bank of America
and its Affiliates shall have the same rights and powers under this Agreement as
any other Lender and may exercise the same as though Bank of America was not the
Administrative Agent, and the terms “Lender” and “Lenders” include Bank of
America and its Affiliates, to the extent applicable, in their individual
capacities.

     

    14.10 Successor Administrative
Agent.  The Administrative Agent may resign upon 30 days’
notice to the Lenders.  If the Administrative Agent resigns under this
Agreement, the Required Lenders, with (so long as no Event of Default exists)
the consent of the Company (which shall not be unreasonably withheld or
delayed), shall appoint from among the Lenders a successor agent for the
Lenders.  If no successor agent is appointed prior to the effective
date of the resignation of the Administrative Agent, the Administrative Agent
may appoint, after consulting with the Lenders and the Company, a successor
agent from among the Lenders.  Upon the acceptance of its appointment
as successor agent hereunder, such successor agent shall succeed to all the
rights, powers and duties of the retiring Administrative Agent and the term
“Administrative Agent” shall mean such successor agent, and the retiring
Administrative Agent’s appointment, powers and duties as the Administrative
Agent shall be terminated. After the retiring Administrative Agent’s resignation
hereunder as the Administrative Agent, the provisions of this Section 14 and Sections 15.5 and
15.16 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was the Administrative Agent under this Agreement.  If no successor
agent has accepted appointment as the Administrative Agent by the date which is
30 days following a retiring Administrative Agent’s notice of resignation, the
retiring Administrative Agent’s resignation shall nevertheless thereupon become
effective and

    
      
         

      

      
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    the
Lenders shall perform all of the duties of the Administrative Agent hereunder
until such time, if any, as the Required Lenders appoint a successor agent as
provided for above.

     

    14.11 Collateral
Matters.  The Lenders irrevocably authorize the Administrative
Agent, at its option and in its discretion, (a) to release any Lien granted to
or held by the Administrative Agent under any Collateral Document (i) upon
termination of the Commitments and payment in full of all Loans and all other
obligations of the Company hereunder and the expiration or termination of all
Letters of Credit; (ii) constituting property sold or to be sold or disposed of
as part of or in connection with any disposition permitted hereunder; or (iii)
subject to Section
15.1, if approved, authorized or ratified in writing by the Required
Lenders or (b) to subordinate its interest in any collateral to any holder of a
Lien on such collateral which is permitted by Section 11.2(d)(i) or
(d)(iii)  (it
being understood that the Administrative Agent may conclusively rely on a
certificate from the Company in determining whether the Debt secured by any such
Lien is permitted by Section
11.1(a)).  Upon request by the Administrative Agent at any
time, the Lenders will confirm in writing the Administrative Agent’s authority
to release, or subordinate its interest in, particular types or items of
collateral pursuant to this Section
14.11.  Each Lender hereby authorizes the Administrative Agent
to give blockage notices in connection with any Subordinated Debt at the
direction of Required Lenders and agrees that it will not act unilaterally to
deliver such notices.

     

    14.12 Administrative Agent May
File Proofs of Claim.  In case of the pendency of any
receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement,
adjustment, composition or other judicial proceeding relative to any Loan Party,
the Administrative Agent (irrespective of whether the principal of any Loan
shall then be due and payable as herein expressed or by declaration or otherwise
and irrespective of whether the Administrative Agent shall have made any demand
on the Company) shall be entitled and empowered, by intervention in such
proceeding or otherwise:

     

    (a) to file
and prove a claim for the whole amount of the principal and interest owing and
unpaid in respect of the Loans, and all other Obligations that are owing and
unpaid and to file such other documents as may be necessary or advisable in
order to have the claims of the Lenders and the Administrative Agent (including
any claim for the reasonable compensation, expenses, disbursements and advances
of the Lenders and the Administrative Agent and its respective agents and
counsel and all other amounts due the Lenders and the Administrative Agent under
Sections 5,
15.5 and 15.16) allowed in
such judicial proceedings; and

     

    (b) to
collect and receive any monies or other property payable or deliverable on any
such claims and to distribute the same; and any custodian, receiver, assignee,
trustee, liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Lender to make such payments to the
Administrative Agent and, in the event that the Administrative Agent shall
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    payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 5, 15.5 and 15.16.

     

    Nothing contained herein shall be
deemed to authorize the Administrative Agent to authorize or consent to or
accept or adopt on behalf of any Lender any plan of reorganization, arrangement,
adjustment or composition affecting the Obligations or the rights of any Lender
or to authorize the Administrative Agent to vote in respect of the claim of any
Lender in any such proceeding.

     

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

     

    SECTION
15 GENERAL.

     

    15.1 Waiver, Amendments and
Replacement of Lenders.

     

    15.1.1           Waiver and
Amendments. No delay on the part of the Administrative Agent, or any
Lender in the exercise of any right, power or remedy shall operate as a waiver
thereof, nor shall any single or partial exercise by any of them of any right,
power or remedy preclude other or further exercise thereof, or the exercise of
any other rights, power or remedy.  No amendment, modification or
waiver of, or consent with respect to, any provision of this Agreement or the
other Loan Documents shall in any event be effective unless the same shall be in
writing and acknowledged by Lenders having aggregate Pro Rata Shares of not less
than the aggregate Pro Rata Shares expressly designated herein with respect
thereto or, in the absence of such designation as to any provision of this
Agreement, by the Required Lenders, and then any such amendment, modification,
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.  No amendment, modification, waiver
or consent shall (a) extend or increase the Commitment or Pro Rata Share of any
Lender without the written consent of such Lender, (b) extend the date scheduled
for payment of any principal (excluding mandatory prepayments) of or interest on
the Loans or any fees payable hereunder without the written consent of each
Lender directly affected thereby, (c) reduce the principal amount of any Loan,
the rate of interest thereon or any fees payable hereunder, without the consent
of each Lender directly affected thereby; (d) change the definition of Required
Lenders, any provisions

    
      
         

      

      
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    of this
Section 15.1 or reduce the aggregate Pro Rata Share required to effect an
amendment, modification, waiver or consent; or (e) release all or any
substantial part of any Accounts or Inventory which are included within the
collateral, without, in each case, the written consent of all
Lenders.  No provision of Sections 6.2.2 or 6.3 with respect to the
timing or application of mandatory prepayments of the Loans shall be amended,
modified or waived without the consent of the Required Lenders.  No
party may be released from its obligations under the Guaranty nor may all or any
substantial part of the collateral granted under the Collateral Documents (which
is not otherwise addressed by Section 15.1.1(e)
above) be released, without, in each case, the written consent of the Required
Lenders.  No provision of Section 15 or other provision of this
Agreement affecting the Administrative Agent in its capacity as such shall be
amended, modified or waived without the consent of the Administrative
Agent.  No provision of this Agreement or any Issuer Document relating
to the rights or duties of the Issuing Lender in its capacity as such shall be
amended, modified or waived without the consent of the Issuing
Lender.  Notwithstanding anything to the contrary herein, no
Defaulting Lender shall have any right to approve or disapprove any amendment,
waiver or consent hereunder, except that the Commitment of such Lender may not
be increased or extended without the consent of such Lender.

    

    15.1.2           Replacement of
Lenders.  In the event any Lender does not agree to any
amendment, modification, waiver or consent that was otherwise duly approved
pursuant to the terms of this Agreement (the “Dissenting Lenders”)
or if any Lender is a Defaulting Lender, then, with respect to each such
Dissenting Lender or Defaulting Lender (the “Terminated Lender”),
the Company and/or the Administrative Agent may designate one or more financial
institution, which may or may not be a Lender, which is acceptable to the
Company, the Administrative Agent and the Issuing Lender in their reasonable
discretion (such other bank being called a “New Lender”) to
purchase the Loans of such Terminated Lenders and such Terminated Lender’s
rights hereunder, without recourse to or warranty by, or expense to, such
Terminated Lender, for a purchase price equal to the outstanding principal
amount of the Loans payable to such Terminated Lender plus any accrued but
unpaid interest on such Loans and all accrued but unpaid fees owed to such
Terminated Lenders and any other amounts payable to such Terminated Lenders
under this Agreement, and to assume all the obligations of such Terminated
Lenders hereunder, and, upon such purchase and assumption (pursuant to an
Assignment Agreement), such Terminated Lenders shall no longer be a party hereto
or have any rights hereunder (other than rights with respect to indemnities and
similar rights applicable to such Terminated Lenders prior to the date of such
purchase and assumption) and shall be relieved from all obligations to the
Company hereunder, and the New Lenders shall succeed to the rights and
obligations of such Terminated Lenders hereunder.  Each Terminated
Lender shall sell its Loan as set forth in this Section 15.1 and use
reasonable efforts to cooperate therewith.  An existing Lender who is
not a Terminated Lender shall be an acceptable New Lender.

    

    15.2 Confirmations.  The
Company and each holder of a Note agree from time to time, upon written request
received by it from the other, to confirm to the other in writing (with a
copy

    
      
         

      

      
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    of each
such confirmation to the Administrative Agent) the aggregate unpaid principal
amount of the Loans then outstanding under such Note.

     

    15.3 Notices.  Except
as otherwise provided in Sections 2.2.2
and 2.2.3, all
notices hereunder shall be in writing (including facsimile transmission) and
shall be sent to the applicable party at its address shown on Annex B or at such
other address as such party may, by written notice received by the other
parties, have designated as its address for such purpose.  Notices
sent by facsimile transmission shall be deemed to have been given when sent;
notices sent by mail shall be deemed to have been given three Business Days
after the date when sent by registered or certified mail, postage prepaid; and
notices sent by hand delivery or overnight courier service shall be deemed to
have been given when received.  For purposes of Sections 2.2.2 and
2.2.3, the
Administrative Agent shall be entitled to rely on telephonic instructions from
any person that the Administrative Agent in good faith believe is an authorized
officer or employee of the Company, and the Company shall hold the
Administrative Agent and each other Lender harmless from any loss, cost or
expense resulting from any such reliance.

     

    15.4 Computations.  Where
the character or amount of any asset or liability or item of income or
expense is required to be determined, or any consolidation or other accounting
computation is required to be made, for the purpose of this Agreement, such
determination or calculation shall, to the extent applicable and except as
otherwise specified in this Agreement, be made in accordance with GAAP,
consistently applied; provided that if the
Company notifies the Administrative Agent that the Company wishes to amend any
covenant in Section 10 (or any related definition) to eliminate or to take into
account the effect of any change in GAAP on the operation of such covenant (or
if the Administrative Agent notifies the Company that the Required Lenders wish
to amend Section 10 (or any related definition) for such purpose), then the
Company’s compliance with such covenant shall be determined on the basis of GAAP
in effect immediately before the relevant change in GAAP became effective, until
either such notice is withdrawn or such covenant (or related definition) is
amended in a manner satisfactory to the Company and the Required
Lenders.

     

    15.5 Costs, Expenses and
Taxes.  The Company agrees to pay on demand all reasonable
out-of-pocket costs and expenses of the Administrative Agent (including Attorney
Costs and any Taxes) in connection with the preparation, execution, syndication,
delivery and administration (including perfection and protection of any
collateral and the costs of Intralinks (or other similar service), if
applicable) of this Agreement, the other Loan Documents and all other documents
provided for herein or delivered or to be delivered hereunder or in connection
herewith (including any amendment, supplement or waiver to any Loan Document),
whether or not the transactions contemplated hereby or thereby shall be
consummated, and all reasonable out-of-pocket costs and expenses (including
Attorney Costs and any Taxes) incurred by the Administrative Agent and each
Lender after an Event of Default in connection with the collection of the
Obligations or the enforcement of this Agreement, the other Loan Documents or
any such other documents or during any workout, restructuring or negotiations in
respect thereof.

    
      
         

      

      
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    In
addition, the Company agrees to pay, and to save the Administrative Agent and
the Lenders harmless from all liability for, any fees of the Company’s auditors
in connection with any reasonable exercise by the Administrative Agent and the
Lenders of their rights pursuant to Section
10.2.  All Obligations provided for in this Section 15.5 shall
survive repayment of the Loans, cancellation of the Notes, expiration or
termination of the Letters of Credit and termination of this Agreement until
expiration of the applicable statute of limitations period.

     

    15.6 Assignments;
Participations.

     

    15.6.1 Assignments.  (a)  Any
Lender may at any time assign to one or more Persons (any such Person, an “Assignee”) all or any
portion of such Lender’s Loans and Commitments, with the prior written consent
of the Administrative Agent, the Issuing Lender and, so long as no Event of
Default exists, the Company (which consents shall not be unreasonably withheld
or delayed and shall not be required for an assignment by a Lender to a Lender
or an Affiliate of a Lender).  Except as the Administrative Agent may
otherwise agree, any such assignment shall be in a minimum aggregate amount
equal to $5,000,000 or, if less, the remaining Commitment and Loans held by the
assigning Lender.  The Company and the Administrative Agent shall be
entitled to continue to deal solely and directly with such Lender in connection
with the interests so assigned to an Assignee until the Administrative Agent
shall have received and accepted an effective assignment agreement in
substantially the form of Exhibit D hereto (an
“Assignment
Agreement”) executed, delivered and fully completed by the applicable
parties thereto and a processing fee of $3,500 payable by Assignor or
Assignee.  No assignment may be made to any Person if at the time of
such assignment the Company would be obligated to pay any greater amount under
Section 7.6 or
8 to the
Assignee than the Company is then obligated to pay to the assigning Lender under
such Sections (and if any assignment is made in violation of the foregoing, the
Company will not be required to pay such greater amounts).  Any
attempted assignment not made in accordance with this Section 15.6.1 shall
be treated as the sale of a participation under Section
15.6.2.  The Company shall be deemed to have granted its
consent to any assignment requiring its consent hereunder unless the Company has
expressly objected to such assignment within three Business Days after notice
thereof.

     

    (b)           From
and after the date on which the conditions described above have been met, (i)
such Assignee shall be deemed automatically to have become a party hereto and,
to the extent that rights and obligations hereunder have been assigned to such
Assignee pursuant to such Assignment Agreement, shall have the rights and
obligations of a Lender hereunder and (ii) the assigning Lender, to the
extent that rights and obligations hereunder have been assigned by it pursuant
to such Assignment Agreement, shall be released from its rights (other than its
indemnification rights) and obligations hereunder.  Upon the request
of the Assignee (and, as applicable, the assigning Lender) pursuant to an
effective Assignment Agreement, the Company shall execute and deliver to the
Administrative Agent for delivery to the Assignee (and, as applicable, the
assigning Lender) a Note in the principal amount of the Assignee’s Pro Rata
Share of the Revolving Commitment (and, as applicable, a Note in the principal
amount of the

    
      
         

      

      
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    Pro Rata
Share of the Revolving Commitment retained by the assigning
Lender.  Each such Note shall be dated the effective date of such
assignment.  Upon receipt by the assigning Lender of such Note, the
assigning Lender shall return to the Company any prior Note held by
it.

     

    (c)           Any
Lender may at any time pledge or assign a security interest in all or any
portion of its rights under this Agreement to secure obligations of such Lender,
including any pledge or assignment to secure obligations to a Federal Reserve
Bank, and this Section shall not apply to any such pledge or assignment of a
security interest; provided that no such
pledge or assignment of a security interest shall release a Lender from any of
its obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.

     

    (d)           Notwithstanding
the foregoing provisions of this Section 15.6, any
lender (a “Granting
Lender”), may grant to a special purpose funding vehicle (an “SPC”), identified as
such in writing by the Granting Lender to the Administrative Agent and the
Company, the option to provide to the Company all or any part of any Loans that
such Granting Lender would otherwise be obligated to make the Company pursuant
to this Agreement; provided that (i) nothing herein shall constitute a
commitment by any SPC to make any Loan; and (ii) if an SPC elects  not
to exercise such option or otherwise fails to provide all or any part of such
Loan, the Granting Lender shall be obligated to make such Loan pursuant to the
terms hereof.  The making of a Loan by an SPC hereunder shall utilize
the Commitment of the Granting Lender to the same extent, and as if such Loan
were made by such Granting Lender.  No SPC shall be liable for any
indemnity or similar payment obligation under this Agreement (all liability for
which shall remain with the Granting Lender).  Any SPC may (i) with
notice to, but without the prior written consent of, the Company  and
the Administrative  Agent and without paying any processing fee
therefore, assign all or a portion of its interests in any  Loans to
the Granting Lender or to any financial institutions (consented to by the
Company and the Administrative Agent) providing liquidity and/or credit support
to or for the account of such SPC to support the  funding or
maintenance of Loans and (ii) disclose on a confidential basis any non-public
information relating to its Loans to any rating agency, commercial paper dealer
or provider of any surety, guarantee or credit or liquidity enhancement to such
SPC.  This Section 15.6.1(d) may
not be amended without the prior written consent of each Granting Lender, all or
any of whose Loans are being funded by an SPC at the time of such
amendment.  For the avoidance of doubt, the Granting Lender shall for
all purposes, including without limitation, the approval of any amendment or
waiver of any provision of any Loan Document or the obligation to pay any amount
otherwise payable by the Granting Lender under the Loan Documents, continue to
be the Lender of record hereunder.

     

    15.6.2 Participations.  Any
Lender may at any time sell to one or more Persons participating interests in
its Loans, Commitments or other interests hereunder (any such Person, a “Participant”).  In
the event of a sale by a Lender of a participating interest to a Participant,
(a) such Lender’s obligations hereunder shall remain unchanged for all purposes,
(b) the Company and the Administrative Agent shall continue to deal solely and
directly with such Lender in

    
      
         

      

      
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    connection
with such Lender’s rights and obligations hereunder and (c) all amounts
payable by the Company shall be determined as if such Lender had not sold such
participation and shall be paid directly to such Lender.  No
Participant shall have any direct or indirect voting rights hereunder except
with respect to any event described in Section 15.1
expressly requiring the unanimous vote of all Lenders or, as applicable, all
affected Lenders.  Each Lender agrees to incorporate the requirements
of the preceding sentence into each participation agreement which such Lender
enters into with any Participant.  The Company agrees that if amounts
outstanding under this Agreement are due and payable (as a result of
acceleration or otherwise), each Participant shall be deemed to have the right
of set-off in respect of its participating interest in amounts owing under this
Agreement and with respect to any Letter of Credit to the same extent as if the
amount of its participating interest were owing directly to it as a Lender under
this Agreement; provided that such
right of set-off shall be subject to the obligation of each Participant to share
with the Lenders, and the Lenders agree to share with each Participant, as
provided in Section
7.5.  The Company also agrees that each Participant shall be
entitled to the benefits of Section 7.6 or 8 as if it were a
Lender (provided that on the
date of the participation no Participant shall be entitled to any greater
compensation pursuant to Section 7.6 or 8 than would have
been paid to the participating Lender on such date if no participation had been
sold and that each Participant complies with Section 7.6(d) as if
it were an Assignee).

     

    15.7 Register.  The
Administrative Agent shall maintain a copy of each Assignment Agreement
delivered and accepted by it and register (the “Register”) for the
recordation of names and addresses of the Lenders and the Commitment of each
Lender from time to time and whether such Lender is the original Lender or the
Assignee.  No assignment shall be effective unless and until the
Assignment Agreement is accepted and registered in the Register. All records of
transfer of a Lender’s interest in the Register shall be conclusive, absent
manifest error, as to the ownership of the interests in the
Loans.  The Administrative Agent shall not incur any liability of any
kind with respect to any Lender with respect to the maintenance of the
Register.

     

    15.8 GOVERNING
LAW.  THIS AGREEMENT AND EACH NOTE SHALL BE A CONTRACT
MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS APPLICABLE
TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD
TO CONFLICT OF LAWS PRINCIPLES.

     

    15.9 Confidentiality.  As
required by federal law and the Administrative Agent’s policies and practices,
the Administrative Agent may need to obtain, verify, and record certain
customer identification information and documentation in connection with opening
or maintaining accounts, or establishing or continuing to provide
services.  The Administrative Agent and each Lender agree to use
commercially reasonable efforts (equivalent to the efforts the Administrative
Agent or such Lender applies to maintain the confidentiality of its own
confidential information) to maintain as confidential all information provided
to them by any

    
      
         

      

      
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    Loan
Party and designated as confidential for a period of 5 years following receipt
thereof, except that the Administrative Agent and each Lender may disclose such
information (a) to Persons employed or engaged by the Administrative Agent or
such Lender in evaluating, approving, structuring or administering the Loans and
the Commitments; (b) to any assignee or participant or potential assignee or
participant that has agreed to comply with the covenant contained in this Section 15.9 (and any
such assignee or participant or potential assignee or participant may disclose
such information to Persons employed or engaged by them as described in clause
(a) above); (c) as required or requested by any federal or state regulatory
authority or examiner, or any insurance industry association, or as reasonably
believed by the Administrative Agent or such Lender to be compelled by any court
decree, subpoena or legal or administrative order or process; (d) as, on the
advice of the Administrative Agent’s or such Lender’s counsel, is required by
law; (e) in connection with the exercise of any right or remedy under the Loan
Documents or in connection with any litigation to which the Administrative Agent
or such Lender is a party; (f) to any nationally recognized rating agency that
requires access to information about a Lender’s investment portfolio in
connection with ratings issued with respect to such Lender; (g) to any Affiliate
of the Administrative Agent, the Issuing Lender or any other Lender who may
provide Bank Products to the Loan Parties; or (h) that ceases to be confidential
through no fault of the Administrative Agent or any
Lender.  Notwithstanding the foregoing, the Company consents to the
publication by the Administrative Agent or any Lender of a tombstone or similar
advertising material relating to the financing transactions contemplated by this
Agreement, and the Administrative Agent reserves the right to provide to
industry trade organizations information necessary and customary for inclusion
in league table measurements.

     

    15.10 Severability.  Whenever
possible each provision of this Agreement shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Agreement shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.  All obligations of the Company and rights of the
Administrative Agent and the Lenders expressed herein or in any other Loan
Document shall be in addition to and not in limitation of those provided by
applicable law.

     

    15.11 Nature of
Remedies.  All Obligations of the Company and rights of the
Administrative Agent and the Lenders expressed herein or in any other Loan
Document shall be in addition to and not in limitation of those provided by
applicable law.  No failure to exercise and no delay in exercising, on
the part of the Administrative Agent or any Lender, any right, remedy, power or
privilege hereunder, shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege.

     

    15.12 Entire
Agreement.  This Agreement, together with the other Loan
Documents, embodies the entire agreement and understanding among the parties
hereto and supersedes all prior or contemporaneous agreements and understandings
of such Persons, verbal or written,

    
      
         

      

      
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    relating
to the subject matter hereof and thereof (except as relates to the fees
described in Section
5.3) and any prior arrangements made with respect to the payment by the
Company of (or any indemnification for) any fees, costs or expenses payable to
or incurred (or to be incurred) by or on behalf of the Administrative Agent or
the Lenders.

     

    15.13 Counterparts.  This
Agreement may be executed in any number of counterparts and by the
different parties hereto on separate counterparts and each such counterpart
shall be deemed to be an original, but all such counterparts shall together
constitute but one and the same Agreement.  Receipt of an executed
signature page to this Agreement by facsimile or other electronic transmission
shall constitute effective delivery thereof.  Electronic records of
executed Loan Documents maintained by the Lenders shall be deemed to be
originals.

     

    15.14 Successors and
Assigns.  This Agreement shall be binding upon the
Company, the Lenders and the Administrative Agent and their respective
successors and assigns, and shall inure to the benefit of the Company, the
Lenders and the Administrative Agent and the successors and assigns of the
Lenders and the Administrative Agent.  No other Person shall be a
direct or indirect legal beneficiary of, or have any direct or indirect cause of
action or claim in connection with, this Agreement or any of the other Loan
Documents.  The Company may not assign or transfer any of its rights
or Obligations under this Agreement without the prior written consent of the
Administrative Agent and each Lender.

     

    15.15 Captions.  Section
captions used in this Agreement are for convenience only and shall not
affect the construction of this Agreement.

     

    15.16 Customer Identification -
USA Patriot Act Notice.  Each Lender and Bank of America (for
itself and not on behalf of any other party) hereby notifies the Loan Parties
that, pursuant to the requirements of the USA Patriot Act, Title III of Pub. L.
107-56, signed into law October 26, 2001 (the “Act”), it is required
to obtain, verify and record information that identifies the Loan Parties, which
information includes the name and address of the Loan Parties and other
information that will allow such Lender or Bank of America, as applicable, to
identify the Loan Parties in accordance with the Act.

     

    15.17 INDEMNIFICATION BY THE
COMPANY.  IN CONSIDERATION OF THE EXECUTION AND DELIVERY OF
THIS AGREEMENT BY THE ADMINISTRATIVE AGENT AND THE LENDERS AND THE AGREEMENT TO
EXTEND THE COMMITMENTS PROVIDED HEREUNDER, THE COMPANY HEREBY AGREES TO
INDEMNIFY, EXONERATE AND HOLD THE ADMINISTRATIVE AGENT, EACH LENDER AND EACH OF
THE OFFICERS, DIRECTORS, EMPLOYEES, AFFILIATES AND AGENTS OF THE ADMINISTRATIVE
AGENT AND EACH LENDER (EACH A “LENDER PARTY”) FREE
AND HARMLESS FROM AND AGAINST ANY AND ALL ACTIONS, CAUSES OF ACTION, SUITS,
LOSSES, LIABILITIES, DAMAGES AND EXPENSES,

    
      
         

      

      
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    INCLUDING
ATTORNEY COSTS (COLLECTIVELY, THE “INDEMNIFIED
LIABILITIES”), INCURRED BY THE LENDER PARTIES OR ANY OF THEM AS A RESULT
OF, OR ARISING OUT OF, OR RELATING TO (A) ANY TENDER OFFER, MERGER, PURCHASE OF
CAPITAL SECURITIES, PURCHASE OF ASSETS OR OTHER SIMILAR TRANSACTION FINANCED OR
PROPOSED TO BE FINANCED IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, WITH THE
PROCEEDS OF ANY OF THE LOANS, (B) THE USE, HANDLING, RELEASE, EMISSION,
DISCHARGE, TRANSPORTATION, STORAGE, TREATMENT OR DISPOSAL OF ANY HAZARDOUS
SUBSTANCE AT ANY PROPERTY OWNED OR LEASED BY ANY LOAN PARTY, (C) ANY VIOLATION
OF ANY ENVIRONMENTAL LAWS WITH RESPECT TO CONDITIONS AT ANY PROPERTY OWNED OR
LEASED BY ANY LOAN PARTY OR THE OPERATIONS CONDUCTED THEREON, (D) THE
INVESTIGATION, CLEANUP OR REMEDIATION OF OFFSITE LOCATIONS AT WHICH ANY LOAN
PARTY OR THEIR RESPECTIVE PREDECESSORS ARE ALLEGED TO HAVE DIRECTLY OR
INDIRECTLY DISPOSED OF HAZARDOUS SUBSTANCES OR (E) THE EXECUTION, DELIVERY,
PERFORMANCE OR ENFORCEMENT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT BY ANY
OF THE LENDER PARTIES, EXCEPT FOR ANY SUCH INDEMNIFIED LIABILITIES ARISING ON
ACCOUNT OF CLAIMS AMONG OR BETWEEN THE LENDERS (EXCEPT UPON THE OCCURRENCE OF A
DEFAULT OR EVENT OF DEFAULT) OR THE APPLICABLE LENDER PARTY’S GROSS NEGLIGENCE
OR WILLFUL MISCONDUCT AS DETERMINED BY A FINAL, NONAPPEALABLE JUDGMENT BY A
COURT OF COMPETENT JURISDICTION.  IF AND TO THE EXTENT THAT THE
FOREGOING UNDERTAKING MAY BE UNENFORCEABLE FOR ANY REASON, THE COMPANY HEREBY
AGREES TO MAKE THE MAXIMUM CONTRIBUTION TO THE PAYMENT AND SATISFACTION OF EACH
OF THE INDEMNIFIED LIABILITIES WHICH IS PERMISSIBLE UNDER APPLICABLE
LAW.  ALL OBLIGATIONS PROVIDED FOR IN THIS SECTION 15.17 SHALL
SURVIVE REPAYMENT OF THE LOANS, CANCELLATION OF THE NOTES, EXPIRATION OR
TERMINATION OF THE LETTERS OF CREDIT, ANY FORECLOSURE UNDER, OR ANY
MODIFICATION, RELEASE OR DISCHARGE OF, ANY OR ALL OF THE COLLATERAL DOCUMENTS
AND TERMINATION OF THIS AGREEMENT.  UNTIL THE EXPIRATION OF THE
APPLICABLE STATUTE OF LIMITATIONS PERIOD.

     

    15.18 Nonliability of
Lenders.  The relationship between the Company on the one hand
and the Lenders and Administrative Agent on the other hand shall be solely that
of borrower and lender.  Neither the Administrative Agent nor any
Lender has any fiduciary relationship with or duty to any Loan Party arising out
of or in connection with this Agreement or any of the other Loan Documents, and
the relationship between the Loan Parties, on the one hand, and the
Administrative Agent and the Lenders, on the other hand, in connection herewith
or therewith is solely that of debtor and creditor.  Neither the
Administrative Agent nor any Lender undertakes any responsibility to any Loan
Party to review or inform any Loan Party of any matter in

    
      
         

      

      
        84

        
          

        

      

      
         

      

    

     connection
with any phase of any Loan Party’s business or operations.  The
Company agrees, on behalf of itself and each other Loan Party, that neither the
Administrative Agent nor any Lender shall have liability to any Loan Party
(whether sounding in tort, contract or otherwise) for losses suffered by any
Loan Party in connection with, arising out of, or in any way related to the
transactions contemplated and the relationship established by the Loan
Documents, or any act, omission or event occurring in connection therewith,
unless it is determined in a final non-appealable judgment by a court of
competent jurisdiction that such losses resulted from the gross negligence or
willful misconduct of the party from which recovery is sought.  NO LENDER PARTY SHALL BE LIABLE FOR
ANY DAMAGES ARISING FROM THE USE BY OTHERS OF ANY INFORMATION OR OTHER MATERIALS
OBTAINED THROUGH INTRALINKS OR OTHER SIMILAR INFORMATION TRANSMISSION SYSTEMS IN
CONNECTION WITH THIS AGREEMENT, NOR SHALL ANY LENDER PARTY HAVE ANY LIABILITY
WITH RESPECT TO, AND THE COMPANY ON BEHALF OF ITSELF AND EACH OTHER LOAN PARTY,
HEREBY WAIVES, RELEASES AND AGREES NOT TO SUE FOR ANY SPECIAL, INDIRECT OR
CONSEQUENTIAL DAMAGES RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR
ARISING OUT OF ITS ACTIVITIES IN CONNECTION HEREWITH OR THEREWITH (WHETHER
BEFORE OR AFTER THE RESTATEMENT DATE).  The Company
acknowledges that it has been advised by counsel in the negotiation, execution
and delivery of this Agreement and the other Loan Documents to which it is a
party.  No joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated hereby
among the Lenders or among the Loan Parties and the Lenders.

     

    15.19 FORUM SELECTION AND CONSENT
TO JURISDICTION.  ANY LITIGATION BASED HEREON, OR ARISING OUT
OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT,
SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE CIRCUIT COURT OF COOK COUNTY,
ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF
ILLINOIS; PROVIDED THAT NOTHING
IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE THE ADMINISTRATIVE
AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER
JURISDICTION.  THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO
THE JURISDICTION OF THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS AND OF THE UNITED
STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS FOR THE PURPOSE OF
ANY SUCH LITIGATION AS SET FORTH ABOVE.  THE COMPANY FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF
ILLINOIS.  THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN

    
      
         

      

      
        85

        
          

        

      

      
         

      

    

    ANY
SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.

     

    15.20 WAIVER OF JURY
TRIAL.  EACH OF THE COMPANY, THE ADMINISTRATIVE AGENT AND EACH
LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY NOTE, ANY OTHER LOAN
DOCUMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH
MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING
FROM ANY LENDING RELATIONSHIP EXISTING IN CONNECTION WITH ANY OF THE FOREGOING,
AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND
NOT BEFORE A JURY.

     

    15.21 Return of Old
Notes.  Upon the Restatement Date, the Existing Lenders shall
cancel and return to the Company the notes which were originally delivered to
the Existing Lenders under the Existing Credit Agreement.

     

    15.22 Amendment and
Restatement.

     

    (a) On the
Restatement Date, the Existing Credit Agreement shall be amended, restated and
superseded in its entirety.  The parties hereto acknowledge and agree
that (i) this Agreement, any Notes delivered pursuant to Section 3.1 and the
other Loan Documents executed and delivered in connection herewith do not
constitute a novation, payment and reborrowing, or termination of the
“Obligations” (as defined in the Existing Credit Agreement) under the Existing
Credit Agreement as in effect prior to the Restatement Date; (ii) such
“Obligations” are in all respects continuing with only the terms thereof being
modified as provided in this Agreement; (iii) the Liens as granted under the
Collateral Documents securing payment of such “Obligations” are in all respects
continuing and in full force and effect and secure the payment of the
Obligations (as defined in this Agreement) and are hereby fully ratified and
affirmed; and (iv) upon the effectiveness of this Agreement all loans and
letters of credit outstanding under the Existing Credit Agreement immediately
before the effectiveness of this Agreement will be part of the Loans and Letters
of Credit hereunder on the terms and conditions set forth in this
Agreement.  Without limitation of the foregoing, each of the Company
and each other Loan Party hereby fully and unconditionally ratifies and affirms
all Collateral Documents and agrees that all collateral granted thereunder shall
from and after the Restatement Date secure all Obligations
hereunder.

     

    (b) On and
after the Restatement Date, (i) each reference in the Loan Documents to the
“Credit Agreement”, “thereunder”, “thereof” or similar words referring to the
Credit Agreement shall mean and be a reference to this Agreement and (ii)
each

    
      
         

      

      
        86

        
          

        

      

      
         

      

    

    reference
in the Loan Documents to a “Note” shall mean and be a Note as defined in this
Agreement.

     

    (c) Each
Lender consents to the payment by the Company on the Restatement Date of all
outstanding Obligations owing to the Existing Lenders set forth on Annex C.

     

    (d) Each
Lender represents and warrants to the Administrative Agent and the Company that
such Lender is not a Defaulting Lender as of the Restatement Date.

     

    [signature
pages follow]

    
      
         

      

      
        87

        
          

        

      

      
         

      

    

    The
parties hereto have caused this Agreement to be duly executed and delivered by
their duly authorized officers as of the date first set forth
above.

    
 

    TITAN
INTERNATIONAL, INC.

    By:           /s/ TITAN INTERNATIONAL,
INC.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    BANK OF
AMERICA, N.A., as Administrative Agent

    

    By:           /s/ BANK OF AMERICA,
N.A.

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    BANK OF
AMERICA, N.A., as Issuing Lender and as a Lender

    

    By:           /s/  BANK OF
AMERICA,
N.A.                                    

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    WELLS
FARGO BANK, N.A., as Lender

    

    By:           /s/ WELLS FARGO BANK,
N.A. 

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    THE
PRIVATEBANK AND TRUST COMPANY, as Lender

    

    By: /s/ THE PRIVATEBANK AND
TRUST COMPANY 

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    FIRST
BANK OF HIGHLAND PARK, as Lender

    

    By:           /s/ FIRST BANK OF HIGHLAND
PARK 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    FIRST
TENNESSEE BANK NATIONAL ASSOCIATION, as Lender

    

    By: /s/ FIRST TENNESSEE BANK
NATIONAL ASSOCIATION

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    BUSEY
BANK, as Lender

    

    By:           /s/ BUSEY
BANK        

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    UMB BANK,
n.a., as Lender

    

    By:           /s/ UMB
BANK            

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ANNEX
A

     

    LENDERS
AND PRO RATA SHARES

    

    

    
      	
               

               

               

               

               

              Lender

            	
               

               

               

               

              Revolving

              Commitment Amount

            	
               

               

               

               

               

              Pro Rata Share

            
	
               

              Bank
      of America, N.A.

               

            	
              $55,000,000.00

            	
              36.666666667%

            
	
               

              Wells
      Fargo Bank, N.A.

               

            	
              $30,000,000.00

            	
              20.000000000%

            
	
               

              The
      PrivateBank and Trust Company

               

            	
              $20,000,000.00

            	
              13.333333333%

            
	
               

              First
      Bank of Highland Park

               

            	
              $15,000,000.00

            	
              10.000000000%

            
	
               

              First
      Tennessee Bank National Association

               

            	
              $10,000,000.00

            	
              6.666666667%

            
	
               

              Busey
      Bank

               

            	
              $10,000,000.00

            	
              6.666666667%

            
	
               

              UMB
      Bank, n.a.

               

            	
              $10,000,000.00

            	
              6.666666667%

            
	
               

              TOTALS

            	
               

              $150,000,000

            	
               

              100%

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    ANNEX
B

     

    ADDRESSES
FOR NOTICES

     

    TITAN
INTERNATIONAL, INC.

    2701
Spruce Street

    Quincy,
Illinois  62301

    

    Attention:
Cheri T. Holley

    Telephone:
217-221-4484

    Facsimile:
217-228-3040

     

    BANK OF AMERICA,
N.A., as Administrative Agent, Issuing Lender and a Lender

     

    Notices of Borrowing ,
Conversion, Continuation and Letter of Credit Issuance

     

    135 South
LaSalle Street

    Suite
640

    Mail
Code: IL4-135-06-40

    Chicago,
Illinois  60603

    Attention:
Linda P. Dunlap

    Telephone:
(980) 388-4257

    Telephone:
(866) 826-9729

    Facsimile: 
(704) 409-0065

    Email: linda.p.dunlap@bankofamerica.com

     

    Letter of Credit
Issuance

     

    1000 W
Temple Street

    Mail
Code: CA9-705-07-05

    Los
Angeles CA 90012-1514

    Attention:
Stella Rosales, AVP / Trade Finance Service Center Coordinator

    Standby
L/C Dept., Los Angeles

    Telephone:
(213) 481-7828

    Facsimile: 
(213) 457-8841

    Email:
stella.rosales@bankofamerica.com

     

    Back-up

     

    1000 W
Temple Street

    Mail
Code: CA9-705-07-05

    Los
Angeles CA 90012-1514

    Attention:
Bolivar G. Carrillo, AVP / Trade Finance Service Center Coordinator

    Standby
L/C Dept., Los Angeles

    Telephone:
(213) 481-7842

    Facsimile: 
(213) 457-8841

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Email:
bolivar.carrillo@bankofamerica.com

     

    All Other
Notices

     

    231 South
LaSalle Street

    Suite
1041

    Mail
Code: IL1-231-10-41

    Chicago,
Illinois  60604

    Attention:
Maria Coronado

    Telephone:
(312) 828-3727

    Facsimile: 
(206) 585-9618

    Email:
maria.m.coronado@bankofamerica.com

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ANNEX
C

     

    PRIOR
LENDERS

     

    

     

    JPMorgan
Chase Bank, N.A.

     

    First
Bank

    

    CoBank,
ACB

     

    Charter
One Bank, NA

    

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

      SCHEDULE
1.1

      IMMATERIAL
SUBSIDIARIES

      

      

      
        	
                ·  

              	
                Automation
      International, Inc.

              

      

      

      
        	
                ·  

              	
                Automotive
      Wheels, Inc.

              

      

      

      
        	
                ·  

              	
                Dico,
      Inc.

              

      

      

      
        	
                ·  

              	
                Dyneer
      Corporation

              

      

      

      
        	
                ·  

              	
                Nieman’s,
      Ltd.

              

      

      

      
        	
                ·  

              	
                Titan
      Distribution, Inc.

              

      

      

      
        	
                ·  

              	
                Titan
      Investment Corporation

              

      

      

      
        	
                ·  

              	
                Titan
      Marketing Services, Inc.

              

      

      

      
        	
                ·  

              	
                Titan
      Tire Corporation of Natchez

              

      

      

      
        	
                ·  

              	
                Titan
      Tire Corporation of Texas

              

      

      

      
        	
                ·  

              	
                Titan
      Wheel Corporation of Iowa

              

      

      

      
        	
                ·  

              	
                Titan
      Wheel Corporation of South
Carolina

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
        	
                Schedule
      2.3.5 Existing Letters of Credit

              	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                Titan
      International, Inc.

              	 
      	 
      	 
      	 
      	 
      	 
      
	
                As
      of January 26, 2009

              	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                Beneficiary

              	 
      	
                Applicant

              	 
      	
                Letter of Credit - Type

              	 
      	
                Amount

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                The
      Goodyear Tire & Rubber Company

              	
                Titan
      Tire Corporation

              	
                Irrevocable
      Standby Letter of Credit

              	
                 $     5,000,000

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	
                Total

              	 
      	
                 $     5,000,000

              

      

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    
      SCHEDULE
9.6

       

      Litigation and Contingent
Liabilities

       

       

      NONE

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    SCHEDULE
9.8

    

    SUBSIDIARIES

    

    Titan International,
Inc.

    Outstanding
Stock:

    Publicly traded on the NYSE under
symbol TWI

    

    Subsidiaries:

    

    Name of
Subsidiary                                                                                                %
of Ownership

    

    1.           Titan
Wheel Corporation of
Illinois                                                                                       100%

    2.           Titan
Wheel Corporation of
Virginia                                                                                     100%

    3.           Titan
Investment
Corporation                                                                                                100%

    

    Titan Wheel Corporation of
Illinois

    Outstanding
Stock:

    10,000
shares authorized – 1,000 shares issued to Titan International,
Inc.

    

    Subsidiaries:

    

    Name of
Subsidiary                                                                                                %
of Ownership

    

    1.           None                                                                                                  N/A

    

    Titan Wheel Corporation of
Virginia

    Outstanding
Stock:

    10,000
shares authorized – 1,000 shares issued to Titan International,
Inc.

    

    Subsidiaries:

    

    Name of
Subsidiary                                                                                                %
of Ownership

    

    1.           None                                                                                                  N/A

    

    Titan Investment
Corporation

    Outstanding
Stock:

    1,000,000
shares authorized – 1,000 shares issued to Titan International,
Inc.

    

    Subsidiaries:

    

    Name of
Subsidiary                                                                                                %
of Ownership

    

    1.           Titan
Tire
Corporation                                                                                                      
100%

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    

    Titan Tire
Corporation

    Outstanding
Stock:

    10,000,000
shares authorized – 10,000 shares issued to Titan Investment
Corporation

    

    Subsidiaries:

    

    Name of
Subsidiary                                                                                                %
of Ownership

    

    1.           Titan
Tire Corporation of
Freeport                                                                                 100%

    2.           Titan
Tire Corporation of
Bryan                                                                                     100%

    

    

    Titan Tire Corporation of
Freeport

    Outstanding
Stock:

    10,000
shares authorized – 1,000 shares issued to Titan Tire Corporation

    

    Subsidiaries:

    

    Name of
Subsidiary                                                                                                %
of Ownership

    

    1.           None                                                                                                  N/A

    

    Titan Tire Corporation of
Bryan

    Outstanding
Stock:

    1,000
shares authorized – 100 shares issued to Titan Tire Corporation

    

    Subsidiaries:

    

    Name of
Subsidiary                                                                                                %
of Ownership

    

    1.           None                                                                                                  N/A

    

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

      
        SCHEDULE
9.13

         

        Solvency

         

         

        NONE

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

      
        	 
      	 
      	 	
                Schedule
      9.15

              	 
      	 	 
      	 
      
	 
      	 
      	 	
                Titan
      International Inc.

              	 
      	 	 
      	 
      
	 
      	 
      	 	
                Insurance
      Renewal Information

              	 
      	 	 
      	 
      
	 
      	 
      	 	 
      	 
      	 	 
      	 
      
	
                Line
      of Coverage

              	
                Coverage
      Period

              	 	
                Limit

              	
                Deductible/Retention

              	 	
                Carrier

              	
                Premium

              
	
                Property

              	
                08/01/08
      - 08/01/09

              	 	
                $250,000,000

              	
                $250,000

              	 	
                Starr
      Tech

              	
                $1,002,380

              
	
                Property

              	
                08/01/08
      - 08/01/09

              	 	
                $200,000,000

              	 
      	 	
                Lloyd's,
      IRI

              	
                $300,000

              
	 
      	 
      	 	 
      	 
      	 	 
      	 
      
	
                General
      Liability/Products Liability

              	
                07/01/08
      - 07/01/09

              	 	
                $1,000,000
      per occurrence

              	
                $250,000

              	 	
                Liberty
      Surplus

              	
                $518,000

              
	 
      	 
      	 	
                $2,000,000
      General Aggregate

              	 
      	 	 
      	 
      
	 
      	 
      	 	
                $2,000,000
      Products Aggregate

              	 	 
      	 
      
	 
      	 
      	 	 
      	 
      	 	 
      	 
      
	
                Umbrella
      - Including Products

              	
                07/01/08
      - 07/01/09

              	 	
                $5,000,000
      per occurrence/agg

              	
                $0

              	 	
                CV
      Starr

              	
                $265,000

              
	 
      	 
      	 	 
      	 
      	 	 
      	 
      
	
                Pollution
      legal Liability

              	
                08/01/06
      - 08/01/11

              	 	
                $5,000,000

              	
                $250,000

              	 	
                AIG

              	
                $148,860

              
	 
      	 
      	 	 
      	 
      	 	 
      	 
      
	 
      	 
      	 	 
      	 
      	 	 
      	
                $2,234,240

              

      

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
9.16

    

    REAL
PROPERTY

    

    Titan International,
Inc.

    

    Owned:                   2701
Spruce Street, Quincy, IL 62301

    1477 Maine Street, Quincy, IL
62301

    

    Titan Tire
Corporation

    

    Owned:                  
2345 E. Market Street, Des Moines, IA 50317

    2140 Waldrep Industrial Parkway,
Dublin, GA 31021

    

    Leased:                  
1360 Joe Frank Harris Parkway, Cartersville, GA 30120

    1385 Valentine Industrial Parkway,
Pendergrass, GA 30567

    

    Titan Wheel Corporation of
Illinois

    

    Leased:                      601
North Main Street, East Peoria, IL 61611

    

    Titan Wheel Corporation of
Saltville

    

    Owned:                      227
Allison Gap Road, Saltville, VA 24370 (building)

    

    Leased:                      227
Allison Gap Road, Saltville, VA 24370 (land)

    

    Titan Investment
Corporation

    

    Owned:                      None

    

    Leased:                      None

    

    Titan Tire Corporation of
Freeport

    

    Owned:                      3769
Route 20 East, Freeport, IL 61032

    

    Leased:                      611
West Lamm Road, Freeport, IL 61032

    

    Titan Tire Corporation of
Bryan

    

    Owned:                      927
South Union Street, Bryan, OH 43506

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    SCHEDULE
9.20

    

    LABOR
MATTERS

    

    Collective
Bargaining Agreement between Titan Tire Corporation and United Steelworkers of
America Local 164

    

    Collective
Bargaining Agreement between Titan Tire Corporation of Freeport and United
Steelworkers of America Local 745

    

    Collective
Bargaining Agreement between Titan Tire Corporation of Bryan and United
Steelworkers of America Local 890L

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    
      	
              SCHEDULE
      9.23 TO CREDIT AGREEMENT

            	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
              TITAN
      INTERNATIONAL, IINC.

            	 
      	 
      	 
      	 
      
	
              ASSETS
      OF IMMATERIAL SUBSIDIARIES

            	 
      	 
      	 
      	 
      
	
              SEPTEMBER
      30, 2008

            	 
      	 
      	 
      	 
      
	
              (Amounts
      in thousands)

            	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
              Property,

            	 
      	 
      	 
      
	 
      	
              Plant
      &

            	 
      	
              Other

            	 
      
	 
      	
              Equipment

            	
              Goodwill

            	
              Assets

            	
              Total

            
	
              Dyneer
      Corporation

            	
               $          -

            	
               $   9,180

            	
               $          -

            	
               $   9,180

            
	
              Titan
      Tire Corporation of Texas

            	
                   5,344

            	
                          -

            	
                          -

            	
                   5,344

            
	
              Automotive
      Wheels, Inc.

            	
                   1,826

            	
                          -

            	
                   2,700

            	
                   4,526

            
	
              Nieman's,
      Ltd.

            	
                          -

            	
                   2,522

            	
                      876

            	
                   3,398

            
	
              Titan
      Marketing Services, Inc.

            	
                   1,329

            	
                          -

            	
                   1,676

            	
                   3,005

            
	
              Dico,
      Inc.

            	
                   1,621

            	
                          -

            	
                      539

            	
                   2,160

            
	
              Titan
      Wheel Corporation of Iowa

            	
                   1,910

            	
                          -

            	
                          -

            	
                   1,910

            
	
              Titan
      Wheel Corporation of South Carolina

            	
                   1,768

            	
                          -

            	
                          -

            	
                   1,768

            
	
              Titan
      Tire Corporation of Natchez

            	
                   1,165

            	
                          -

            	
                          -

            	
                   1,165

            
	
              Titan
      Distribution, Inc.

            	
                          -

            	
                          -

            	
                        25

            	
                        25

            
	
              Titan
      Investment Corporation

            	
                          -

            	
                          -

            	
                        20

            	
                        20

            
	
              Automation
      International, Inc.

            	
                          -

            	
                          -

            	
                          -

            	
                          -

            
	 
      	 
      	 
      	 
      	 
      
	 
      	
               $
      14,963

            	
               $
      11,702

            	
               $   5,836

            	
               $
      32,501

            
	 
      	 
      	 
      	 
      	 
      

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    SCHEDULE
11.1

    

    TITAN
INTERNATIONAL, INC. & SUBSIDIARIES

    LIST
OF OUTSTANDING DEBT

    JANUARY
26, 2009

    (Amounts
in US dollars)

    

    
      	
              Amount

            	 
      	
              Description

            
	 
      	 
      	 
      
	
              $200,000,000

            	 
      	
              Senior
      unsecured notes due January 2012

            
	 
      	 
      	 
      
	
              25,000,000

            	 
      	
              Revolving
      credit facility

            
	 
      	 
      	 
      
	
              $225,000,000

            	 
      	
              Total
      Outstanding Debt

            

    

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Schedule
11.2 to the

    CREDIT
AGREEMENT

    SEPTEMBER
30, 2008

    UNAUDITED

    

    Existing
Liens

    

    

    
      	
              1.  

            	
              Lien
      on various printers and multifunction copiers in favor of Ikon Office
      Solutions

            

    

    
      	
              2.  

            	
              Lien
      on AS400 computers in favor of IBM

            

    

    
      	
              3.  

            	
              Lien
      on Falcon 10 airplanes in favor of AVN Air
LLC

            

    

    
      	
              4.  

            	
              Lien
      on building in Cartersville, GA, in favor of B & B Realty
      LLC

            

    

    
      	
              5.  

            	
              Lien
      on building in Elko, NV, in favor of Robert
  Hecht

            

    

    
      	
              6.  

            	
              Lien
      on building in Pendergrass, GA, in favor of Rooker/Valentine
      LLC

            

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    SCHEDULE
11.7

    

    TITAN
INTERNATIONAL, INC.

    TRANSACTIONS
WITH AFFILIATES

    SEPTEMBER
30, 2008

    (Amounts
in US dollars, rounded to nearest thousand)

    

    

    Accounts
Receivable Due from Affiliates

    

    Amount                                                      Due from

    

    Titan Tire
Corporation

     
$4,105,000                                                         Titan
Europe Plc subsidiaries

    

    Titan Wheel Corporation of
Illinois

    222,000                                                        Titan
Europe Plc subsidiaries

    

    Titan Wheel Corporation of
Virginia

    1,014,000                                                         Titan
Europe Plc subsidiaries

    

    

    $5,341,000                                                          Total
accounts receivable due from affiliates

    

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    SCHEDULE
11.11

    

    TITAN
INTERNATIONAL, INC. & SUBSIDIARIES

    INVESTMENTS

    SEPTEMBER
30, 2008

    (Amounts
in US dollars)

    

    

    Investments

    

    $11,623,000                      Investment
in Titan Europe

    

    $11,623,000                      Total
Investments

    

    

    Investments in
Subsidiaries

    

    Note:  All investments in
subsidiaries are eliminated in consolidation

    

    Amount                                                      Investment
in

    

    Titan
International

    1,000                 Titan
Investment Corporation

    1,000                 Titan
Wheel Corporation of Illinois

    1,000                 Titan
Wheel Corporation of Virginia

    

    Titan Investment
Corporation

    10,000                   Titan
Tire Corporation

    

    Titan Tire
Corporation

     
100               Titan
Tire Corporation of Bryan

    1,000                 Titan
Tire Corporation of Freeport

    

    14,100                   Subtotal
investment in subs

    

       (14,100)                      Consolidating
entry to eliminate investment in subs

    $        0                    Total

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
A

     

    FORM
OF

    NOTE

     

    January
30, 2009

    Chicago,
Illinois

    $_________________                                                                                                         

     

    The
undersigned, for value received, promises to pay to the order of ______________
(the “Lender”)
at the principal office of Bank of America, N.A. (the “Administrative
Agent”) in Chicago, Illinois the aggregate unpaid amount of all Loans
made to the undersigned by the Lender pursuant to the Credit Agreement referred
to below (as shown on the schedule attached hereto (and any continuation
thereof) or in the records of the Lender), such principal amount to be payable
on the dates set forth in the Credit Agreement.

     

    The
undersigned further promises to pay interest on the unpaid principal amount of
each Loan from the date of such Loan until such Loan is paid in full, payable at
the rate(s) and at the time(s) set forth in the Credit
Agreement.  Payments of both principal and interest are to be made in
lawful money of the United States of America.

     

    This Note
evidences indebtedness incurred under, and is subject to the terms and
provisions of, the Amended and Restated Credit Agreement, dated as of January
30, 2009 (as further amended, restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”;
terms not otherwise defined herein are used herein as defined in the Credit
Agreement), among the undersigned, certain financial institutions (including the
Lender) and the Administrative Agent, to which Credit Agreement reference is
hereby made for a statement of the terms and provisions under which this Note
may or must be paid prior to its due date or its due date
accelerated.

     

    This Note
is made under and governed by the laws of the State of Illinois applicable to
contracts made and to be performed entirely within such State.

     

    TITAN
INTERNATIONAL, INC.

     

    By:_________________________

    Title:________________________

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
B

     

    FORM OF COMPLIANCE
CERTIFICATE

     

    To:                      Bank
of America, N.A., as Administrative Agent

     

    Please
refer to the Amended and Restated Credit Agreement dated as of January 30, 2009
(as further amended, restated, supplemented or otherwise modified from time to
time, the “Credit
Agreement”) among Titan International, Inc. (the “Company”), various
financial institutions and Bank of America, N.A., as Administrative
Agent.  Terms used but not otherwise defined herein are used herein as
defined in the Credit Agreement.

     

    
      	
              I.  

            	
              Reports.  Enclosed
      herewith is a copy of the [annual
      audited/quarterly/monthly] report of the Company as at
      _____________, ____ (the “Computation
      Date”), which report fairly presents in all material respects the
      financial condition and results of operations [(subject to the absence of
      footnotes and to normal year-end adjustments)] of the Company as of
      the Computation Date and has been prepared in accordance with GAAP
      consistently applied.

            

    

     

    
      	
              II.  

            	
              No
      Default.  The undersigned hereby certifies that he/she
      has no knowledge of, the existence of any condition or event which
      constitutes a Default or an Event of Default during or at the end of the
      accounting period covered by the enclosed report or as of the date of this
      Certificate, except [described in detail the nature of the condition or
      event, the period during which it existed, and the action which Company
      and its Subsidiaries have taken, are taking, or propose to take with
      respect to each such condition or
event].

            

    

     

    
      	
              III.  

            	
              Financial
      Tests.  The Company hereby certifies and warrants to you
      that the following is an accurate computation, in accordance with the
      terms of the Credit Agreement, as at the Computation Date, of the
      following ratios and/or financial restrictions contained in the Credit
      Agreement:

            

    

     

    [REVISE
AS APPROPRIATE]

     

    A.           Intentionally Omitted.

     

    B.           Section
11.14.2 - Minimum Fixed Charge Coverage Ratio

     

    1.           Highest
Average Daily Balance of

    Revolving
Outstandings                                                    $________

    (if the
average daily balance of Revolving Outstandings is less than $125,000,000 during
all 30 day periods ending during the quarter, this calculation is not
needed)

     

    2.           EBITDA                                                                       
 $________

     

    3.           Income
taxes
paid                                                                $________

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

     

    4.           Capital
Expenditures                                                           $________

     

    5.           Sum
of (3) and
(4)                                                                $________

     

    6.           Remainder
of (2) minus
(5)                                                 $________

     

    7.           Interest
Expense                                                                $________

     

    

    8.           Required
payments of

    principal
of Funded Debt

    (excluding
Revolving
Loans)                                           $________

    

    9.           Sum
of (7) and
(8)                                                                $________

     

    10.           Ratio
of (6) to
(9)                                                                ____
to 1

     

    11.           Minimum
Required                                                                1.0
to 1.0

     

    C.           Section
11.14.3 - Minimum Collateral Coverage Ratio

     

    1.           Borrowing
Base
Amount                                                    $________

    

    2.           Unrestricted
Cash of
Obligors                                           $________

     

    3.           Sum
of (1) and
(2)                                                                $________

     

    4.           Revolving
Outstandings                                                    $________

     

    5.           Ratio
of (3) to
(4)                                                                ____
to 1

     

    4.           Minimum
required                                                                1.20
to 1

     

    

     

    The
Company has caused this Certificate to be executed and delivered by its duly
authorized officer on _________________________, 20__.

     

    TITAN
INTERNATIONAL, INC.

     

    By:  ________________________                                                    

    

    Title: _______________________                                                     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    EXHIBIT
C

     

    FORM OF BORROWING BASE
CERTIFICATE

     

    To:           Bank
of America, N.A., as Administrative Agent

     

    

     

    Please
refer to the Amended and Restated Credit Agreement dated as of January 30, 2009
(as further amended, restated, supplemented or otherwise modified from time to
time, the “Credit
Agreement”) among Titan International, Inc. (the “Company”), various
financial institutions and Bank of America, N.A., as Administrative
Agent.  This certificate (this “Certificate”),
together with supporting calculations attached hereto, is delivered to you
pursuant to the terms of the Credit Agreement.  Capitalized terms used
but not otherwise defined herein shall have the same meanings herein as in the
Credit Agreement.

     

    The
Company hereby certifies and warrants to the Administrative Agent and the
Lenders that (a) at the close of business on ______________, ____ (the “Calculation Date”),
the Borrowing Base was $_____________, computed as set forth on the schedule
attached hereto; (b) the information contained herein and on the schedule
attached hereto is true and correct in all material respects regarding the
status of Eligible Accounts and Eligible Inventory; (c) the amounts reflected
herein and on the schedule attached hereto are in compliance with the provisions
of the Credit Agreement; and (d) there is no Default or Event of Default and all
representations and warranties contained in the Credit Agreement and other Loan
Documents are true and correct in all material respects.  The
undersigned understands that the Lenders will extend loans in reliance upon the
information contained herein.  In the event of a conflict between the
summary of eligibility criteria on the attached schedule and the definitions of
Eligible Accounts and Eligible Inventory contained in the Credit Agreement, the
Credit Agreement shall govern.

     

    The
Company has caused this Certificate to be executed and delivered by its officer
thereunto duly authorized on ___________,
______.

     

    TITAN
INTERNATIONAL, INC.

     

    By:  _______________________                                                    

    

    Title:  _____________________                                                    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SCHEDULE
TO BORROWING BASE CERTIFICATE

    Dated as
of
[_________________]

     

    1.           Gross
Accounts                                                                                                           $_________

     

    2.           Less
Ineligibles

     

    -           Administrative
Agent’s Lien Not Perfected      
$_________

    -           Subject
to other Lien              $_________

    -           Subject
to Offset,
etc.                                                     $_________

    -           Non-permitted
Account Debtor not in
U.S.                $_________

    -           Non-permitted
Affiliate
Receivables                            $_________

    -           Non-assignable                                                                $_________

    -           Other                                                                                 
$_________

    -           Total                                                                                                          $_________

     

    3.           Eligible
Accounts [Item 1 minus Item
2]                                                                  $_________

    

    4.           Item
3 times
75%                                                                                                    $_________

     

    5.           Gross
Inventory                                                                                                            
$_________

     

    6.           Less
Ineligibles

    -           Administrative
Agent’s Lien Not
Perfected               $_________

    -           Subject
to other
Lien                                                      $_________

    -           Not
Salable                                                                  $_________

    -           In
Excess of $30,000,000 Located
Off-Site                  $_________

    -           Reserve
for Amounts Due Third Parties

    Holding Collateral
Off-Site                                        $_________

    -           Not
located in
U.S.                                                         $_________

    -           Other                                                                       
 $_________

    -           Total                                                                                         $_________

     

    7.           Eligible
Inventory [Item 5 minus Item
6]                                                                     $_________

     

    8.           Item
7 times
50%                                                                                                      
$_________

     

    9.           Orderly
Liquidation Value of
Equipment                                                                      $_________

     

    10.           Item
9 times
80%                                                                                                            
$_________

     

    11.           Borrowing
Base

    Item 4 plus Item
8 plus Item
10                                                                                  $_________

     

    12.           Revolving
Loan Availability (lesser of Item 11 and

    the
Revolving
Commitment)                                                                                          $_________

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

     

    13.           Revolving
Outstandings (includes L/C
Obligations)         $_________

     

    

    

    14.           Availability

    [Excess of Item 12
over Item 13]                                                                                  $_________

     

    15.           Required
Prepayment

    [Excess of Item 13
over Item 12]                                                                                  $_________

    

    Determination of
Availability Percentage

    

    A.           Borrowing
Base Amount (Item
11)                                                                                  $_________

    

    B.           Portion
of Borrowing Base attributable to Equipment (Item
10)                                 $_________

    

    C.           Adjusted
Borrowing
Base                                                                                                $_________

    (Item A minus Item B)

    

    D.           Revolving
Outstandings (Item
13)                                                                                  $_________

    

    E.           Availability
Percentage                                                                                                       _________%

    (Item D divided by Item C)

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
D

     

    

    FORM
OF

    ASSIGNMENT
AGREEMENT

    

    Date:_________________

    

    To:           Titan
International, Inc.

    

    and

    

    Bank of
America, N.A. as Administrative Agent

    

    Re:           Assignment under the Credit
Agreement referred to below

    

    Gentlemen
and Ladies:

    

    Please
refer to Section 15.6.1 of the Amended and Restated Credit Agreement dated as of
January 30, 2009 (as further amended or otherwise modified from time to time,
the “Credit
Agreement”) among Titan International, Inc. (the “Company”), various
financial institutions and Bank of America, N.A., as administrative agent (in
such capacity, the “Administrative
Agent”).  Unless otherwise defined herein or the context
otherwise requires, terms used herein have the meanings provided in the Credit
Agreement.

    

       (the “Assignor”) hereby
sells and assigns, without recourse, to   (the “Assignee”), and the
Assignee hereby purchases and assumes from the Assignor, that interest in and to
the Assignor’s rights and obligations under the Credit Agreement as of the date
hereof equal to  % of all of the
Loans, of the participation interests in the L/C Obligations and of the
Commitments, such sale, purchase, assignment and assumption to be effective as
of  , ___,
or such later date on which the Company and the Administrative Agent shall have
consented hereto (the “Effective
Date”).  After giving effect to such sale, purchase, assignment
and assumption, the Assignee’s and the Assignor’s respective Pro Rata Shares for
purposes of the Credit Agreement will be as set forth opposite their names on
the signature pages hereof.

    

    The
Assignor hereby instructs the Administrative Agent to make all payments from and
after the Effective Date in respect of the interest assigned hereby directly to
the Assignee.  The Assignor and the Assignee agree that all interest
and fees accrued up to, but not including, the Effective Date are the property
of the Assignor, and not the Assignee.  The Assignee agrees that, upon
receipt of any such interest or fees, the Assignee will promptly remit the same
to the Assignor.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    The
Assignor represents and warrants that it is the legal and beneficial owner of
the interest being assigned by it hereunder and that such interest is free and
clear of any adverse claim.

    

    The
Assignee represents and warrants to the Company and the Administrative Agent
that, as of the date hereof, the Company will not be obligated to pay any
greater amount under Section 7.6 or 8 of the Credit Agreement than the Company
is obligated to pay to the Assignor under such Section.  The Assignee
has delivered, or is delivering concurrently herewith, to the Company and the
Administrative Agent the forms required by Section 7.6 of the Credit Agreement.
[INSERT IF ASSIGNEE IS ORGANIZED UNDER THE LAWS OF A JURISDICTION OTHER THAN THE
UNITED STATES OF AMERICA OR A STATE THEREOF.]  The [Assignee/Assignor]
[Company] shall pay the fee payable to the Administrative Agent pursuant to
Section 15.6.1.

    

    The
Assignee hereby confirms that it has received a copy of the Credit
Agreement.  Except as otherwise provided in the Credit Agreement,
effective as of the Effective Date:

    

    
      	
               
      

            	
              (a)

            	
              the
      Assignee (i) shall be deemed automatically to have become a party to the
      Credit Agreement and to have all the rights and obligations of a “Lender”
      under the Credit Agreement as if it were an original signatory thereto to
      the extent specified in the second paragraph hereof; and (ii) agrees to be
      bound by the terms and conditions set forth in the Credit Agreement as if
      it were an original signatory thereto;
and

            

    

    

    
      	
              (b)  

            	
              the
      Assignor shall be released from its obligations under the Credit Agreement
      to the extent specified in the second paragraph
  hereof.

            

    

    

    The
Assignee hereby advises each of you of the following administrative details with
respect to the assigned Loans and Commitment:

    

    (A)           Institution
Name:

    

    Address:

    

    Attention:

    

    Telephone:

    

    Facsimile:

    

    (B)           Payment
Instructions:

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    This Assignment shall be governed by
and construed in accordance with the laws of the State of Illinois.

    

    Please
evidence your receipt hereof and your consent to the sale, assignment, purchase
and assumption set forth herein by signing and returning counterparts hereof to
the Assignor and the Assignee.

    

    

    Percentage
=
___%                                                                [ASSIGNEE]

    

    By:           ______________________________

    Title:           ______________________________

    

    Adjusted
Percentage =
___%                                                                [ASSIGNOR]

    

    

    By:           _____________________________

    Title:           _____________________________

    

    

    ACKNOWLEDGED
AND CONSENTED TO

    this ____
day of ________, ____

    

    BANK OF
AMERICA, N.A., as Administrative Agent

    

    

    By:           ______________________________

    Title:           ______________________________

    

    

    ACKNOWLEDGED
AND CONSENTED TO

    this
___ day of _________, 

    

    TITAN
INTERNATIONAL, INC.

    

    

    By:           ______________________________

    Title:           ______________________________

    

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
E

    

    FORM OF
NOTICE OF BORROWING

     

    To:                      Bank
of America, N.A., as Administrative Agent

     

    Please
refer to the Amended and Restated Credit Agreement dated as of January 30, 2009
(as further amended, restated, supplemented or otherwise modified from time to
time, the “Credit
Agreement”) among Titan International, Inc. (the “Company”), various
financial institutions and Bank of America, N.A., as the Administrative
Agent.  Terms used but not otherwise defined herein are used herein as
defined in the Credit Agreement.

     

    The
undersigned hereby gives irrevocable notice, pursuant to Section 2.2.2 of
the Credit Agreement, of a request hereby for a borrowing as
follows:

     

    (i)           The
requested borrowing date for the proposed borrowing (which is a Business Day) is
______________, ____.

     

    (ii)           The
aggregate amount of the proposed borrowing is $______________.

     

    (iii)           The
Type of Revolving Loans comprising the proposed borrowing are [Base Rate]
[LIBOR] Loans.

     

    (iv)           The
duration of the Interest Period for each LIBOR Loan made as part of the proposed
borrowing, if applicable, is ___________ months (which shall be 1, 2, or 3
months).

     

    (v)           The
Revolving  Loan Availability less the Revolving Outstandings,
determined based upon the most recent Borrowing Base Certificate, is
$________________________.

     

    The
undersigned hereby certifies that on the date hereof and on the date of
borrowing set forth above, and immediately after giving effect to the borrowing
requested hereby: (i) there exists and there shall exist no Default or Event of
Default under the Credit Agreement; and (ii) each of the representations and
warranties contained in the Credit Agreement and the other Loan Documents is
true and correct as of the date hereof, except to the extent that such
representation or warranty expressly relates to another date and except for
changes therein expressly permitted or expressly contemplated by the Credit
Agreement.

     

    The
Company has caused this Notice of Borrowing to be executed and delivered by its
officer thereunto duly authorized on ___________, ______.

     

    TITAN
INTERNATIONAL, INC.

     

    By: ______________________                                                               

    Title: _____________________                                                               

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
F

    

    FORM OF
NOTICE OF CONVERSION/CONTINUATION

     

    To:                      Bank
of America, N.A., as Administrative Agent

     

    Please
refer to the Amended and Restated Credit Agreement dated as of January 30, 2009
(as further amended, restated, supplemented or otherwise modified from time to
time, the “Credit
Agreement”) among Titan International, Inc. (the “Company”), various
financial institutions and Bank of America, N.A., as the Administrative
Agent.  Terms used but not otherwise defined herein are used herein as
defined in the Credit Agreement.

     

    The
undersigned hereby gives irrevocable notice, pursuant to Section 2.2.3 of the
Credit Agreement, of its request to:

     

    (a)           on
[    date    ] convert $[________]of the
aggregate outstanding principal amount of the [_______] Loan, bearing interest
at the [________] Rate, into a(n) [________] Loan [and, in the case of a LIBOR
Loan, having an Interest Period of [_____] month(s)];

     

    [(b)           on
[    date    ] continue $[________]of
the aggregate outstanding principal amount of the [_______] Loan, bearing
interest at the LIBOR Rate, as a LIBOR Loan having an Interest Period of [_____]
month(s)].

    

    The
undersigned hereby represents and warrants that all of the conditions contained
in Section 12.2
of the Credit Agreement have been satisfied on and as of the date hereof,
and will continue to be satisfied on and as of the date of the
conversion/continuation requested hereby, before and after giving effect
thereto.

    

    The
Company has caused this Notice of Conversion/Continuation to be executed and
delivered by its officer thereunto duly authorized on ___________,
______.

     

    TITAN
INTERNATIONAL, INC.

     

    By: ________________________                                                               

    Title: _______________________fredaecwellsagreement

 

 

 

 

AGREEMENT REGARDING MASTER FINANCING AGREEMENT

THIS
AGREEMENT REGARDING MASTER FINANCING AGREEMENT (“Agreement”) is made as of December
__, 2009 by and between WELLS FARGO BANK, NATIONAL ASSOCIATION, a
national banking association (“Lender”) and ASSOCIATED ESTATES REALTY
CORPORATION, an Ohio corporation (the “Sponsor”) provides as
follows:

RECITALS

A.                
Lender is prepared
to enter into a certain Master Financing Agreement dated as of even date
herewith (the “Master Financing Agreement”).

B.                
Once the Master Financing
Agreement is fully executed, Lender and the Sponsor have agreed that the Sponsor
(or a Borrower, as defined in the Master Financing Agreement) may request that Lender
make Mortgages pursuant to the Master Financing Agreement and Lender has agreed
to make Mortgages pursuant to the Master Financing Agreement as set forth
herein.

C.                
Lender’s execution
of the Master Financing Agreement is conditioned upon the Sponsor’s execution
of this Agreement and payment of (i) the Transaction Fee in the amount of
$100,000.00 as set forth in Section 7.5.1 of the Master Financing Agreement
(the “Transaction Fee”) and (ii) a Facility Processing Fee of $50,000 as
set froth in the application letter dated December 2, 2009 between the parties
(the “Facility Processing Fee”).

D.                
All capitalized
but otherwise undefined terms set forth herein shall have the same meaning as
set forth in the Master Financing Agreement.

AGREEMENT

NOW THEREFORE, for and in
consideration of Ten Dollars ($10.00) and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:

1.                 
The parties hereby
incorporate the covenants, terms and conditions of the Master Financing Agreement
into this Agreement by reference.

2.                 
The Sponsor agrees
to pay (i) the Transaction Fee and (ii) the Facility Processing Fee, each in
accordance with the wiring instructions set forth below upon execution of this
Agreement.  The Sponsor further agrees to perform the covenants and observe the
terms and conditions set forth in the Master Financing Agreement, including,
without limitation, those covenants as set forth in Sections 7.5.2, 7.5.3,
7.5.4, 7.7.1.a, 8.2, 10.1 and specifically acknowledges the circumstances
described in Sections 7.2, 7.3, 7.4 and 7.7.1.b.; provided, however, the
Sponsor shall have no obligation to perform covenants in the Master Financing
Agreement that are personal to Lender and that by their nature cannot be
performed by the Sponsor.  The wiring instructions are as follows:

 

 

Bank:    
Wells Fargo Bank, N.A.

ABA:     
121000

Credit:   
Wells Fargo Bank, N.A.

               
McLean, VA

                                Acct
#:   412-1489116

            Ref:             AEC Credit Facility

 

3.                 
Upon Lender’s
receipt of a copy of this Agreement executed by the Sponsor, along with payment
in immediately available funds sufficient to pay the Transaction Fee and the
Facility Processing Fee, Lender shall execute the Master Financing Agreement
and deliver an executed copy to Freddie Mac, and thereafter Lender agrees (i) to
process, underwrite, document and fund Mortgages to Borrowers in accordance
with and subject to the covenants, terms and conditions set forth in the Master
Financing Agreement, and (ii) not to modify the Master Financing Agreement in
any way that would adversely affect the interests of the Sponsor in the way
that Lender processes, underwrites, documents and funds the Mortgages without
the prior written consent of the Sponsor.

4.                 
The Sponsor agrees
to pay reasonable attorney’s fees of Freddie Mac’s counsel and the Lender’s counsel
in connection with the Master Financing Agreement and this Agreement.

5.                 
In addition to the
fees and costs set forth in the Master Financing Agreement, each application
and commitment with respect to a proposed Mortgage or a proposed Substitution
shall provide that the applicable Borrower (i) shall pay, at the time of the
application, a review fee to Lender in the amount of $5,000.00, (ii) shall
deposit, at the time of application, an amount equal to the estimated costs of
the out-of-pocket expenses in connection with the processing of the proposed
Mortgage, including the cost of the appraisal, engineering reports, audit
checks and other third party expenses, (iii) shall pay reasonable legal
expenses in connection with the proposed Mortgage, whether or not the Mortgage
closes and (iv) shall pay, at the time a Mortgage closes, an origination fee in
an amount based on the applicable percentage of the amount of the Mortgage,
such applicable percentage being 0.60% (60 bps) on the first $30,000,000.00 of
Mortgages, 0.55% (55 bps) on the next $30,000,000.00 of Mortgages, and 0.50 (50
bps) on the amount of Mortgages over $60,000,000.00.

6.                 
This Agreement
shall terminate upon the earlier of (i) the termination of the Master Financing
Agreement in accordance with the terms of the Master Financing
Agreement or (ii) a termination of this Agreement as set forth in Section
7 below.

7.                 
The liability of
the Sponsor under this Agreement shall be limited to the payment of the
Transaction Fee, the Facility Processing Fee, any fee expressly set forth in an
application or commitment executed by the Sponsor or its Borrower affiliate for
a proposed Mortgage and all actual out-of-pocket costs 9including
reasonable legal fees) incurred by Freddie Mac or Lender in connection with the
Master Financing Agreement or this Agreement. Lender’s sole remedy for the
Sponsor’s breach of any other provision of this Agreement (not involving the
payment of the amounts set forth in the preceding sentence) shall be to
terminate this Agreement.

2

 

 

 

 

 

IN WITNESS WHEREOF, the
parties have executed this Agreement pursuant to due authorization.

WELLS FARGO BANK,
NATIONAL ASSOCIATION

 

 

 

By:_______________________________________ 

Name:

Title:

 

 

 

3

 

 

 

 

 

 

 

ASSOCIATED ESTATES REALTY CORPORATION, an Ohio corporation 

 

 

By:   ________________________________

Name:

Title:

 

4

 

 

 

 

 

MASTER
FINANCING AGREEMENT

BY AND BETWEEN

WELLS FARGO BANK, NATIONAL ASSOCIATION

AND

FEDERAL HOME LOAN MORTGAGE CORPORATION

 

December 22, 2009

 

 

 

 

 

TABLE OF
CONTENTS

Page

RECITALS. 1

1.    DEFINITIONS. 1

1.1.           Definitions. 1

1.2.           Terms
not Defined Herein. 9

1.3.           Construction. 10

1.3.1.   Number;
Inclusion. 10

1.3.2.   Determination. 10

1.3.3.   Freddie
Mac's Discretion and Consent; References to Freddie Mac's Requirements. 10

1.3.4.   Documents
Taken as a Whole. 10

1.3.5.   Headings. 10

1.3.6.   Implied
References to this Agreement. 10

1.3.7.   Persons. 10

1.3.8.   Modifications
to Documents. 11

1.3.9.   From,
To and Through. 11

1.3.10. Conflicts with Other Loan Documents. 11

1.4.           Accounting
Principles. 11

2.    COMMITMENT. 11

2.1.           Amount
of Commitment. 11

2.2.           Application
Period. 12

2.3.           Good
Faith Deposit. 12

2.4.           Breakage
Provisions. 12

2.4.           Nondelivery. 12

 

i.

 

3.    MORTGAGE
TERMS APPLICABLE TO ALL MORTGAGES. 12

3.1.           Mortgage
Amount 12

3.1.1.   Minimum
and Maximum Mortgage Amount. 12

3.1.2.   Determination
of Loan Amount for Fixed Rate Loans and Fixed to Float Loans. 13

3.2.           Borrower. 14

3.2.1.   Type
of Borrower. 14

3.2.2    Ownership
and Control. 14

3.2.3.   Single
Asset Entity. 14

3.3.           Properties. 14

3.3.1.   Property
Fundamentals. 15

3.3.2.   Occupancy. 15

3.4.           Property
Management 15

3.5.           Rate-Lock. 15

3.6.           Amortization;
Interest Calculation Convention. 15

3.6.1.   Amortization
Period. 15

3.6.2.   Interest
Calculation. 15

3.7.           Guaranties. 15

3.8.           Escrows. 16

3.9.           Replacement
Reserves. 16

3.10.         Repairs. 16

3.10.1. Repair and Escrow Agreement 16

3.10.2. Repair Escrow Fund. 16

3.10.3. Immediate Repairs. 16

3.11.         Transfers/Assumptions. 16

3.11.1. Variable Rate Loans subject to Third Party Cap Agreement 17

ii

 

3.11.2. All Other Loans. 17

3.12.         Third-Party
Subordinate Financing. 17

3.13.         Substitution
Rights. 17

3.13.1  Substitution
Agreement 17

3.14.         Reporting
Requirements. 17

3.15.         Supplemental
Financing. 18

3.16.         Moisture
Management Plan. 18

4.    FIXED
RATE LOANS. 18

4.1.           Loan
Term. 18

4.2.           Fixed
Interest Rate. 18

4.3.           Fixed
Rate Prepayment Premium.. 18

5.    FIXED
RATE LOANS. 18

5.1.           Loan
Term. 18

5.2.           Interest
Rates. 18

5.2.1.   Fixed
Rate Period. 18

5.2.2.   Extension
Period. 19

5.3.           Fixed
to Float Prepayment Premium.. 19

6.    VARIABLE
RATE LOANS. 19

6.1.           Loan
Term. 19

6.2.           Interest
Rates. 19

6.3.           Third
Party Cap Agreements. 19

6.3.1.   Interest
Rate Cap Required. 19

6.3.2.   Third
Party Cap Agreement Terms. 20

6.3.3.   Replacement
Cap Escrow. 20

6.3.4.  
Third Party Cap Agreement Guaranty. 20

iii

 

6.4.           Variable
Rate Prepayment Premium. 20

6.5.           Conversion
of Variable Rate Mortgages. 21

7.    ADDITIONAL
TERMS. 21

7.1.           Loan
Applications under this Agreement. 21

7.2.           Multifamily
Seller/Servicer Guide, Commitment and Loan Documents. 21

7.3.           Servicing
of Mortgage. 21

7.4.           Replacement
of Seller. 22

7.5.           Fees
and Expenses. 22

7.5.1.   Fees
and Expenses Due on the Closing Date. 22

7.5.2.   Fees
Due in Connection with the Issuance of each Commitment 22

7.5.3.   Substitution
Fees. 23

7.5.4.   Annual
Servicing Fee. 23

7.6.           Use
of Proceeds. 23

7.7.           Material
Adverse Change. 23

7.7.1.   Reporting
Requirements. 23

7.7.2.   Monitoring
Compliance. 24

7.7.3.   Consequences
of a Material Adverse Change. 24

7.8.           No
Renewal or Extension Options. 24

7.9.           Term. 24

8.    ACKNOWLEDGEMENTS
BY SELLER. 24

8.1.           Insurance. 24

8.2.           Further
Documentation. 24

9.    RIGHT
OF TERMINATION.. 24

9.1.           Termination
Events. 24

9.1.1.   Default
under this Agreement. 24

iv

 

9.1.2.   Event
of Default under the Loan Documents. 25

9.1.3.   Nondelivery
of Mortgage. 25

9.1.4.   Insolvency. 25

9.1.5.   Cessation
of Business. 25

9.1.6.   Bankruptcy
and Other Proceedings. 25

9.1.7.   Material
Adverse Change. 25

9.1.8.   Preservation
of Existence. 25

9.1.9.   Liquidations,
Mergers, Consolidations, Acquisitions. 25

9.2.           Consequences
of Termination Event. 26

10.  MISCELLANEOUS. 26

10.1.         Cooperation
by the Sponsor and Borrower; the Sponsor's Obligations. 26

10.2.         Successors
and Assigns. 26

10.3.         No
Agency. 26

10.4.         Modifications,
Amendments or Waivers. 26

10.5.         Remedies
Cumulative. 26

10.6.         Notices. 27

10.7.         Severability. 27

10.8.         Governing
Law; Consent to Jurisdiction and Venue. 28

10.9.         Prior
Understanding. 28

10.10.       Disclosure
of Information. 28

10.11.       No
Third Parties Benefited. 28

10.12.       Advertising. 28

10.13.      
Time of Essence. 28

10.14.       Counterparts. 28

10.15.       WAIVER
OF TRIAL BY JURY. 29

v

 

 

 

 

 

MASTER Financing AGREEMENT

 

 

THIS
MASTER FINANCING AGREEMENT ("Agreement")
is dated as of December 22, 2009, and is made between WELLS FARGO BANK,
NATIONAL ASSOCIATION, having an address at 2010 Corporate Ridge, Suite 1000, McLean, Virginia 22102 (the "Lender", the "Seller"
or the "Servicer"), and FEDERAL HOME LOAN MORTGAGE
CORPORATION, a federally chartered corporation organized and existing under
the laws of the United States of America having an address at 8100 Jones Branch
Drive, McLean, Virginia 22102 ("Freddie Mac").

 

RECITALS

 

A.        Associated Estates Realty Corporation, an Ohio corporation (the "Sponsor"), has requested that
the Seller make fixed and adjustable interest rate loans in the aggregate
amount of up to $100,000,000 to single asset entities majority owned and
controlled, directly or indirectly, by the Sponsor.

B.         The Sponsor has offered to
cause such entities to grant to the Seller a security interest in real property
and other assets owned or to be acquired by such entities as security for such
entities' repayment of such loans.  (Any such entity is a "Borrower"
and all such entities are, collectively, the "Borrowers".)

C.        The Seller is willing to make
the above-described loans to the Borrowers secured by an interest in such real
property and other assets.

D.        In order to finance such loans
to the Borrowers, the Seller desires to obtain from Freddie Mac an agreement
pursuant to which Freddie Mac will purchase such loans from the Seller.

 

AGREEMENT

1.         DEFINITIONS.

1.1.      Definitions.  In addition to words and terms defined elsewhere in
this Agreement, the following words and terms shall have the following
meanings, respectively, unless the context hereof clearly requires otherwise:

"Acquisition Loan" shall
mean a Loan for which the proceeds will be used to purchase the Property
securing the Borrower's repayment of such Loan.

 

1.

 

 

 

 

 

"Affiliate" or "Affiliates"
as to any Person shall mean any other Person (i) which directly or indirectly
Controls, is Controlled by, or is under common Control with such Person, (ii)
which beneficially owns or holds 5% or more of any class of the voting or other
equity interests of such Person, or (iii) 5% or more of any class of voting
interests or other equity interests of which is beneficially owned or held,
directly or indirectly, by such Person.

"Aggregate Commitment Available"
shall mean the maximum aggregate original principal amounts of Mortgages that
may be purchased from time to time pursuant to the terms of this Agreement,
which amount is set forth in Section 2.1.  

"Agreement" shall mean
this Master Financing Agreement, as the same may be supplemented or amended
from time to time, including all schedules and exhibits attached hereto. 

"Amortizing DCR" shall
mean DCR calculated based upon debt service payments of principal and interest
on a 30-year amortization schedule.

"Amortizing Loan" shall
mean a Loan that will be amortized on a thirty (30) year basis.

"Anniversary Date Financial
Documentation" shall have the meaning set forth in Section 7.7.1
of this Agreement.

"Anniversary Delivery Date"
shall have the meaning set forth in Section 7.7.1 of this Agreement.

"Application" shall mean
any application between the Seller and a Borrower, evidencing such Borrower's
request for a Mortgage from the Seller.

"Application Due Date"
shall mean the date that is thirty (30) days prior to the Expiration Date.

"Application Fee" shall
have the meaning set forth in Section 7.5.2 of this Agreement.

"Authorized Representative"
shall mean, (i) with respect to any
Person that is not an individual, such individuals duly authorized to execute
documents on behalf of, and legally bind, such Person and (ii) with respect to
any Person that is an individual, such individual himself or herself, as
applicable.

"Borrower" shall have
the meaning set forth in the Recitals of this Agreement.

"Business Day" shall
mean any day on which Freddie Mac is open for business.  

2

 

 

 

 

 

"Cash Out Refinance Loan"
shall mean a Loan, the Loan Amount of which is greater than the sum of (i) the
unpaid principal balance (the "UPB") of any existing mortgage
or mortgages on the applicable Property (an "Existing Mortgage")
being paid off with the proceeds of such Loan, (ii) any prepayment costs and/or
premiums paid by the Borrower in connection with the payoff of the Existing
Mortgage, (iii) closing costs paid by the Borrower in connection with the
payoff of the Existing Mortgage that are acceptable to Freddie Mac, (iv) two
percent (2%) of the UPB of the Existing Mortgage, and (v) the amount that
Freddie Mac requires to be placed into escrow for repairs to the applicable
Property, as determined by Freddie Mac in its discretion.

"Closing Date" shall
mean the first date on which this Agreement has been fully executed.

"Collateral Agreements"
shall mean (i) any agreements between a Borrower and the Seller for the purpose
of establishing reserves for the Properties or a particular Property, including
(a) agreements establishing a fund to assure the completion of repairs or
improvements specified in any such agreement, or (b) agreements assuring a
reduction of the outstanding principal balance of the Mortgage if the occupancy
percentage or income from a Property does not increase to a level specified in
such agreement, and (ii) any other agreement or agreements between a Borrower
and the Seller which provide for the establishment of any other fund, reserve
or account, all of the foregoing to be imposed only pursuant to an express
written agreement between such Borrower and the Seller entered into on an
Origination Date in connection with a Mortgage.

"Commitment" shall mean
Freddie Mac's written indication that Freddie Mac (i) has made an offer to the
Seller to purchase a Mortgage pursuant to a letter of commitment or (ii) has
accepted the Seller's offer to sell to Freddie Mac any Mortgage pursuant to an
early rate-lock application or early spread-lock application issued by the
Seller to Freddie Mac.  The Commitment and any adjustment letters and
amendments thereto shall set forth all of the terms and conditions of any
Mortgage purchase.

"Control" shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person whether through ownership
of voting securities, beneficial interests, by contract or otherwise.  The definition is to be construed to apply equally to
variations of the word "Control," including "Controlled," "Controlling" or "Controlled by."

"DCR" shall mean, at the
time of determination, the ratio of the NOI to the annualized debt service
payments as calculated by Freddie Mac in accordance with Section 3.1.2. 

"Dollar", "U.S. Dollars"
and the symbol $ shall mean lawful money of the United States of America.

"Expiration Date" shall
mean the earlier to occur of the following:  (i) the date a Termination Event
occurs and Freddie Mac terminates its obligations to issue Commitments as set
forth in Section 9.2 and (ii) December 21, 2011.

"Extension Period" shall
mean, for a Fixed to Float Loan, the twelve calendar month period ending on the
first anniversary of the scheduled initial maturity date of such Fixed to Float
Loan as set forth in the applicable Note.

3

 

 

 

 

 

"Fixed Interest Rate"
shall mean that certain annual fixed interest rate for a Fixed Rate Loan
applicable during the entire term of such Fixed Rate Loan or that certain
annual fixed interest rate for a Fixed to Float Loan applicable during the
entire term of such Fixed to Float Loan except during the Extension Period for
such Fixed to Float Loan, if applicable.  The Fixed Interest Rate for each
Fixed Rate Loan and Fixed to Float Loan will be established at Rate Lock for
such Fixed Rate Loan or Fixed to Float Rate Loan.

"Fixed Rate Loan" or
"Fixed Rate Mortgage" shall mean a Mortgage with a Fixed Interest
Rate during its entire term.

"Fixed Rate Period"
shall mean, for a Fixed to Float Loan, the period beginning on the date of the
Note for such Fixed to Float Loan through the day immediately preceding the
scheduled initial maturity date of such Fixed to Float Loan as set forth in the
applicable Note.

"Fixed to Float Loan"
shall mean a Mortgage with a Fixed Interest Rate during its entire term except
for the Extension Period, if applicable.

"Form ARM Note" shall
have the meaning set forth in Section 6.4 of this Agreement.

"Form Fixed Rate Note"
shall have the meaning set forth in Section 4.3 of this
Agreement.

"Form FTF Note" shall
have the meaning set forth in Section 5.3 of this Agreement.

"Form Loan Documents"
shall mean the documents required by Freddie Mac under Freddie Mac's
Conventional Cash Purchase Program, as such documents are amended or modified
pursuant to this Agreement.  The modifications approved by Freddie Mac for its
current form of loan documents are attached hereto as Exhibit A.

"Freddie Mac" shall mean
the Federal Home Loan Mortgage Corporation, a federally chartered corporation.

"GAAP" shall mean
generally accepted accounting principles as are in effect from time to time,
subject to the provisions of Section 1.4, and applied on a
consistent basis both as to classification of items and amounts.

"Guarantor" shall mean
the Sponsor or any other Person who executes a Guaranty.

"Guaranty" shall mean
any Freddie Mac Conventional Cash Purchase Program Guaranty executed by a
Guarantor in favor of the Seller as one of the Loan Documents, together with
any and all amendments, extensions, renewals or replacements thereof, in whole
or in part.

"Guide" shall mean the
then-current version of the Freddie Mac Multifamily Seller/Servicer Guide.

4

 

 

 

 

 

"Index" shall mean (i)
for each Variable Rate Loan, the one (1) month Reference Bills®
Security or, at the option of the Borrower, the British Bankers Association's (BBA)
one (1) month LIBOR Rate for United States Dollar deposits, as displayed on the
LIBOR Index Page used to establish the LIBOR Index Rate, at the time of Rate
Lock, as such terms are defined in, and as more fully described in, the Note
for the applicable Loan; and (ii) during the Extension Period, if applicable,
for each Fixed to Float Loan, the one (1) month LIBOR Rate; both subject to the
terms of the Note for the applicable Loan in the event an alternative Index is
required.

"Index Rate" for each
Mortgage shall have the meaning given to that term in the Note for such
Mortgage.

"Interest Only Loan"
shall mean a Loan that will require interest only debt service payments with no
amortization of principal prior to the Maturity Date (as defined in the applicable
Note).

"Law" shall mean any
applicable law (including common law), constitution, statute, treaty,
regulation, rule, ordinance, ruling, order, injunction, writ, decree or award
of any Official Body.

"Lender" shall mean the
Seller and its successors and assigns as holder of a Note evidencing a
Mortgage.

"Loan" or "Mortgage"
shall mean any conventional, cash loan made to any Borrower by the Seller and
purchased by Freddie Mac pursuant to this Agreement.  

"Loan Amount" shall
mean, with respect to each Loan, the initial principal amount of the applicable
Mortgage.  The final Loan Amount for each Mortgage shall be set forth in the
Commitment related to such Mortgage.

"Loan Document" or
"Loan Documents" shall mean the then-current versions of the
Form Loan Documents, any indemnity agreements, Collateral Agreements, O&M
Programs, the MMP, opinions and any other documents now or in the future
executed and/or delivered by any Borrower or Guarantor or any other Person in
connection with a Mortgage, together with any and all amendments, extensions,
renewals or replacements thereof, in whole or in part.  This Agreement is not a
Loan Document.

"LTV" shall mean, with
respect to each Loan, the ratio, expressed as a percentage, of the Loan Amount
to Freddie Mac's underwritten value of the Property to serve as collateral for
such Loan.

"Margin" shall mean the
spread (expressed in percentage points and/or basis points) to be added to the
applicable Index Rate.

5

 

"Material
Adverse Change" shall mean (a) any set of circumstances or events
which, in Freddie Mac's reasonable discretion would have or is then reasonably
expected to have a material adverse effect on: (i) the validity or
enforceability of this Agreement, the Seller Master Financing Agreement,
Guaranty or any other Loan Document, (ii) the ability of the Sponsor, any
Borrower or Guarantor to duly and punctually pay or perform its respective
Obligations, or (iii) the financial condition or credit of the Sponsor, any
Borrower or Guarantor from that which was disclosed in writing to the Seller or
Freddie Mac, or (b) with respect to any Mortgage, a change in the direct or
indirect ownership of any Borrower or Guarantor (if such Guarantor is not a
natural person) prior to the Origination Date of such Mortgage from that identified
to the Seller or Freddie Mac as of the Closing Date, which results in a
structure in which (i) the Sponsor does not hold a direct or indirect majority
ownership interest in such Borrower or Guarantor; or (ii) the Sponsor does not
directly or indirectly exercise Control of such Borrower or Guarantor without
the requirement of consent of any other Person that is a Required Borrower
Principal unless such Required Borrower Principal has been reviewed and
approved by Freddie Mac prior to the Origination Date of such Mortgage based on
Freddie Mac's then-current credit and underwriting standards.

"MMP" shall mean, with
respect to each Mortgage, the moisture management plan to control water
intrusion and prevent the development of mold or moisture at a Property which
the applicable Borrower must implement as of the Origination Date of the
Mortgage for such Property and maintain throughout the term of such Mortgage.

"Mortgage Review Fee"
shall have the meaning set forth in Section 7.5.2 of this
Agreement.

"No Cash Out Refinance Loan"
shall mean (a) a Loan, the Loan Amount of which is less than or equal to the
sum of (i) the UPB of any Existing Mortgage to be paid off with the proceeds of
such Loan, (ii) any prepayment costs and/or premiums in connection with the payoff
of the Existing Mortgage, (iii) closing costs paid by the Borrower in
connection with the payoff of the Existing Mortgage that are acceptable to
Freddie Mac, (iv) two percent (2%) of the UPB of the Existing Mortgage, and (v)
the amount that Freddie Mac requires to be placed into escrow for repairs to
the applicable Property, as determined by Freddie Mac in its discretion, or (b)
a refinance Loan securing a Property that was purchased by the Sponsor or one
of its Affiliates not more than two (2) years prior to the Origination Date or
constructed not more than two (2) years prior to the Origination Date.

"NOI" shall mean an annualized dollar amount equal to the income from
the operation of a Property that is available for repayment of debt and return
of equity after deducting for economic vacancy and all expenses (exclusive of
debt service).  NOI shall be calculated by Freddie Mac for each individual
Property, in accordance with Freddie Mac's then-current methodology, consistently applied, excluding from
such calculation expenses from depreciation, amortization, interest expenses,
non-recurring items and capital expenses, but including in such calculation an
assumed capital expense reserve in an amount consistent with Freddie Mac's then-current
requirements for such capital reserves.

"Note" shall mean any
Freddie Mac Conventional Cash Purchase Program Multifamily Note executed by a
Borrower, individually or collectively, as the context may require, together
with any and all amendments, extensions, renewals or replacements thereof, in
whole or in part. 

"O&M Programs" shall
mean any written program of operations and maintenance for a Property approved
in writing by Freddie Mac.

6

 

 

 

 

 

"Obligation" shall mean
any obligation or liability of the Sponsor, any Borrower or Guarantor to the
Seller or Freddie Mac, howsoever created, arising or evidenced, whether direct
or indirect, absolute or contingent, now or hereafter existing, or due or to
become due, under or in connection with this Agreement, the Seller Master Financing
Agreement, the Note or any other Loan Document.

"Official Body" shall
mean any applicable national, federal, state, local or other government or
political subdivision or any agency, authority, bureau, commission, department
or instrumentality of any national, federal, state, local or other government
or political subdivision, or any court, tribunal or grand jury, in each case
whether foreign or domestic (to the extent such court, tribunal or grand jury
has appropriate jurisdiction).

"Origination Date" shall
mean, with respect to any Mortgage, the date a Mortgage closes, which shall be
a Business Day.

"Partial Interest Only Loan"
shall mean a Loan that will require interest only debt service payments with no
amortization of principal for a period of up to two (2) years, as set forth in
the applicable Commitment, followed by an amortization period on a thirty (30)
year basis.

"Person" shall mean any
individual, corporation, partnership, limited liability company, association,
joint-stock company, trust, unincorporated organization, joint venture,
government or political subdivision or agency thereof, or any other entity.

"Property" shall mean
multifamily real property or properties, as the case may be, located in a State
and all other assets owned or to be acquired by a Borrower as collateral for a
Mortgage.  Each Property must have five or more apartment units.

"Rate Lock" shall mean
determining the fixed interest rate on a Fixed Rate Loan or Fixed to Float Loan
or the Index and the Margin on a Variable Rate Loan pursuant to this Agreement
and the applicable Commitment.

"Reference Bills®
Securities" shall mean the unsecured general obligations of Freddie
Mac designated by Freddie Mac as "Reference Bills®
Securities" and as more particularly described from time to time in the
Loan Documents.

"Repair and Escrow Agreement"
shall mean the Freddie Mac Conventional Cash Purchase Program agreement
executed by a Borrower to complete Repairs in accordance with the terms
thereof, which may or may not require a Repair Escrow, together with any and
all amendments, extensions, renewals or replacements thereof, in whole or in
part.

"Repair Escrow" shall
mean the escrow to be deposited into a Repair Escrow Fund and governed by the
applicable Repair and Escrow Agreement, if applicable, as determined by Freddie
Mac.

"Repair Escrow Fund"
shall mean the account established by the Repair and Escrow Agreement (if
applicable) into which the applicable Repair Escrow is deposited.

7

 

 

 

 

 

"Repairs" shall mean any
remediation or repair or capital improvements to the land or improvements on a
Property required by Freddie Mac for such Property as set forth in the
applicable Commitment.

"Replacement Reserve Agreement"
shall mean the Freddie Mac Conventional Cash Purchase Program agreement
executed by a Borrower pursuant to which a Borrower agrees to deposit monthly
escrows for long term repairs and capital improvements to the applicable
Property, together with any and all amendments, extensions, renewals or
replacements thereof, in whole or in part.

"Required Borrower Principal"
shall mean, with respect to any Borrower, any Person that directly or
indirectly controls the Borrower including (i) any general partner of a general
partnership or limited partnership, (ii) any manager or a managing member of a
limited liability company, (iii) any joint venture partner of a joint venture,
(iv) any settler or grantor of a living trust, (v) any Person with a collective
equity interest in the Borrower equal to or exceeding twenty-five percent
(25%), but expressly excluding any publicly-traded shareholders of Sponsor,
(vi) any beneficiary with a twenty-five percent (25%) or more interest in a
testamentary or irrevocable trust, or (vii) a beneficiary with a twenty-five
percent (25%) or more interest an Illinois land trust.

"Security Instrument"
shall mean any Freddie Mac Conventional Cash Purchase Program mortgage, deed of
trust, or deed to secure debt encumbering any of the Properties, executed by a
Borrower as security for a Mortgage, together with any and all amendments,
extensions, renewals or replacements thereof, in whole or in part.

"Seismic Report Fee"
shall mean a nonrefundable fee equal to Freddie Mac’s out-of-pocket costs and
expenses incurred in connection with obtaining a seismic report and probable
maximum loss (PML) analysis with respect to any Property located in Seismic
Risk Zone 3 or 4, as set forth in the current edition of the Uniform Building
Code.

"Seller" shall mean
Wells Fargo Bank, National Association, a national banking association.

"Seller Master Financing
Agreement" shall mean the Agreement Regarding Master Financing
Agreement dated on or about the date hereof by and between the Sponsor and the
Seller.

"Servicer" shall mean
Wells Fargo Bank, National Association, or any subsequent independent
contractor appointed by Freddie Mac, at Freddie Mac's sole cost and expense, to
administer each Mortgage and the Loan Documents or otherwise perform certain
functions in connection therewith under the terms of the Guide or a Servicing
Agreement.  Pursuant to the terms of the Guide or any Servicing Agreement,
Freddie Mac may designate Servicer to perform some or all of Freddie Mac's
obligations under any Mortgage, Note or other Loan Documents.

"Servicing Agreement"
shall mean any agreement between Freddie Mac and an independent contractor
pursuant to which Freddie Mac appoints said independent contractor as Servicer
under each Mortgage, Note and other Loan Documents, together with any and all
amendments, extensions, renewals or replacements thereof, in whole or in part.

8

 

 

 

 

 

"Solvent" shall mean,
with respect to any Person on a particular date, that on such date (i) the fair
value of the assets of such Person is greater than the total amount of
liabilities, including, without limitation, contingent liabilities, of such
Person, (ii) the present fair saleable 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 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 after giving due consideration to the prevailing practice in the
industry in which such Person is engaged.  In computing the amount of
contingent liabilities at any time, it is intended that such liabilities will
be computed at the amount which, in light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability of such Person after giving effect to any
rights of contribution, subrogation or indemnification of such Person.

"Sponsor" shall mean
Associated Estates Realty Corporation.

"Substitution" shall
have the meaning set forth in Section 3.13.1 of this Agreement.

"Substitution Agreement"
shall have the meaning set forth in Section 3.13.1 of this
Agreement.

"Termination Event"
shall mean any of the events described in Section 9.1 or
otherwise referred to herein as a "Termination Event" or an
"Event of Default" in the Loan Documents.

"Third Party Cap Agreement"
shall mean an interest rate cap agreement described in Sections 6.3.1 and
6.3.2, together with any and all amendments, extensions, renewals or
replacements thereof, in whole or in part.

"Transaction Fee" shall
have the meaning set forth in Section 7.5.1 of this Agreement.

"Variable Rate Interest Rate"
shall mean an adjustable interest rate, equal to the Margin plus the Index, in
effect on a Variable Rate Loan during its term and on a Fixed to Float Loan
during the Extension Period for such Fixed to Float Loan, if applicable, that
periodically adjusts as set forth in the Note for such Loan.

"Variable Rate Loan" or
"Variable Rate Mortgage" shall mean a Mortgage with a Variable
Rate Interest Rate during its entire term.

1.2.      Terms Not Defined Herein.  Capitalized terms used but not defined in this
Agreement will have the meanings assigned to them by the Guide.

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1.3.      Construction.  Unless the context of this Agreement otherwise
clearly requires, the following rules of construction shall apply to this
Agreement:

1.3.1.   Number; Inclusion.  References to the plural include the singular, the
plural, the part and the whole; "or" has the inclusive meaning
represented by the phrase "and/or", and "including" has the
meaning represented by the phrase "including without limitation".

1.3.2.   Determination.  References to "determination" of or by
Freddie Mac shall be deemed to include good-faith estimates by Freddie Mac (in
the case of quantitative determinations) and good-faith beliefs by Freddie Mac
(in the case of qualitative determinations) and such determinations shall be
conclusive absent manifest error.

1.3.3.   Freddie Mac's Discretion and
Consent; References to Freddie Mac's Requirements.  Whenever Freddie Mac is granted the right herein to
act in its sole discretion or to grant or withhold consent, such right shall be
exercised in good faith, and whenever a reference is made to "Freddie
Mac's then-current requirements", "Freddie Mac's then-current
programs" or the like, such reference shall be deemed to mean such
requirements, programs and the like as are then in effect by Freddie Mac, as
such standards are generally reflected in the Guide.

1.3.4.   Documents Taken as a Whole.  The words "hereof," "herein,"
"hereunder," "hereto" and similar terms in this Agreement
refer to this Agreement as a whole and not to any particular provision of this
Agreement.

1.3.5.   Headings.  The section and other headings contained in this
Agreement and the Table of Contents preceding this Agreement are for reference
purposes only and shall not control or affect the construction of this
Agreement or the interpretation thereof in any respect.

1.3.6.   Implied References to this
Agreement.  Article, section, subsection, clause, schedule and
exhibit references are to this Agreement unless otherwise specified, and
schedules and exhibits attached hereto are incorporated herein by this
reference.

1.3.7.   Persons.  Reference to any Person includes such Person's
successors and assigns (but only if such successors and assigns are permitted
by this Agreement or such other Loan Document, as the case may be), and
reference to a Person in a particular capacity excludes such Person in any
other capacity.

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1.3.8.   Modifications to Documents.  Reference to any agreement (including this Agreement
and any Loan Document, together with any schedules and exhibits hereto or
thereto), document or instrument means such agreement, document or instrument
as amended, modified, replaced, substituted for, superseded or restated.

1.3.9.   From, To and Through.  Relative to the determination of any period of time,
"from" means "from and including", "to" means
"to but excluding", and "through" means "through and
including".

1.3.10. Conflicts with Other Loan
Documents.  In the event of any conflict between the terms and
provisions of this Agreement and any Loan Document, the terms and provisions of
the Loan Document shall prevail.

1.4.      Accounting Principles.  Except as otherwise provided in this Agreement, all
computations and determinations as to accounting or financial matters and all
financial statements to be delivered pursuant to this Agreement shall be made
and prepared in accordance with GAAP (including principles of consolidation
where appropriate) and all accounting or financial terms shall have the
meanings ascribed to such terms by GAAP.  In the event of any change after the
date hereof in GAAP, and if such change would result in the inability to
determine compliance with any financial covenants set forth herein, then the
parties hereto agree to endeavor, in good faith, to agree upon an amendment to
this Agreement that would adjust such financial covenants in a manner that
would not affect the substance thereof, but would allow compliance therewith to
be determined in accordance with Borrower's financial statements at that time.

2.         COMMITMENT.

2.1.      Amount of Commitment.  Subject to the terms and conditions hereof and
relying upon the representations and warranties set forth herein, if any,
Freddie Mac agrees to purchase from the Seller Mortgages with an aggregate Loan
Amount not to exceed One Hundred Million and 00/100 Dollars ($100,000,000.00)
(the "Aggregate Commitment Available") under and pursuant to
the Commitments executed by Freddie Mac pursuant to this Agreement at any time
or from time to time during the term hereof.  Subject to the provisions of Section
7.2 of this Agreement, (a) each Mortgage must be purchased pursuant to
and conform to Freddie Mac's Multifamily Conventional Cash Mortgage Purchase
Program, including without limitation all of Freddie Mac's then-current
internal underwriting standards for its borrowers, guarantors, and their
principals, and (b) except as expressly provided herein, all provisions of the
Guide shall apply to the underwriting and purchase of such Mortgages.  This
Agreement is not a revolving credit facility and Borrowers may not borrow,
repay and re-borrow with respect to this Agreement.

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            2.2.      Application
Period.  The Sponsor, or any Borrower, may present the Seller
with Applications for Mortgages on or before the Application Due Date.  So long
as Freddie Mac has received all documentation and information that it requires
to underwrite a Property from the Seller and/or from the applicable Borrower by
the Application Due Date, Freddie Mac will make reasonable efforts to
underwrite such Property and issue a Commitment prior to the Expiration Date. 
Until Freddie Mac issues a Commitment for a Property, Freddie Mac is not
obligated to purchase any Mortgage for which it has received an Application. 
The Seller must originate each Mortgage that Freddie Mac has agreed to purchase
as set forth in a Commitment by the date necessary to cause the Final Delivery
Package (as defined in the Guide) for such Mortgage to be received by Freddie
Mac by the Mandatory Delivery Date for such Mortgage as set forth in the
applicable Commitment.

 

2.3.      Good Faith Deposit.  With respect to any Loan subject to a Freddie Mac
early rate-lock application or early spread-lock application, the Seller must
deliver to Freddie Mac a good faith
deposit in the amount required by the Guide prior to Rate Lock for each such
Loan in accordance with the terms of the Commitment for such Loan.

2.4.      Breakage Provisions.  Neither the Seller nor the Sponsor nor any Borrower
will be liable for any breakage fee or unused facility fee for failing to
submit Applications for Mortgages.  Upon Rate Lock of a Mortgage pursuant to a
Freddie Mac early rate-lock application or early spread-lock application, the
Sponsor and the individual Borrower will be responsible (Freddie Mac and the
Seller hereby agreeing that the Seller will assign to Freddie Mac all of the
Seller's rights under the Seller's Application for the Mortgage for the
collection of the good faith deposit and Freddie Mac's then-current standard
floating or fixed rate borrower breakage fee, as applicable, in the manner
prescribed by Freddie Mac) for the payment of such good faith deposit and
Freddie Mac's then-current standard floating or fixed rate borrower breakage
fee, as applicable, with respect to such Mortgage as is set forth in the
Commitment for such Mortgage.  

2.5.      Nondelivery.  If after Rate Lock of a Mortgage pursuant to a
Freddie Mac Commitment issued under Freddie Mac's standard delivery process, a
nondelivery (as such term is used in the Guide) occurs, the Seller must pay or
cause to be paid to Freddie Mac a nondelivery fee in the amount of two percent
(2%) of the Loan Amount specified in the Commitment for such Mortgage in
accordance with the requirements of, and as more fully set forth in, the Guide.

3.         MORTGAGE TERMS APPLICABLE TO ALL
MORTGAGES.

3.1.      Mortgage Amount.

3.1.1.   Minimum and Maximum Mortgage
Amount.  The minimum original Loan Amount of each Mortgage
shall be $10,000,000.  Notwithstanding the foregoing, the minimum original Loan
Amount of the proposed Mortgage to be secured by that certain property known as
Cambridge at Buckhead and assets related thereto may be less than $10,000,000,
but in no event less than $9,000,000.  Without the prior written consent of
Freddie Mac, the aggregate of the Loan Amounts of all Mortgages purchased
pursuant to this Agreement will not exceed the Aggregate Commitment Available.

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3.1.2.   Determination of Loan Amount.  The Loan Amount for each Mortgage will be determined
by Freddie Mac.  Each Loan must satisfy Freddie Mac's refinance requirements
based on Freddie Mac's then-current underwriting and credit policies.  

For Fixed Rate Loans and Fixed to Float
Loans, the Fixed Interest Rate will be established at Rate Lock.  For purposes
of determining the Loan Amount, this Fixed Interest Rate will be the interest
rate that produces a minimum Amortizing DCR in accordance with the requirements
of subsection a.ii, b.ii, or cii set forth below, as applicable.

For Variable Rate Loans, the Loan Amount
will be based on the following two tests:  (a)  a comparable fixed rate note
rate, as determined by Freddie Mac, will be the interest rate that produces a minimum
Amortizing DCR in accordance with the requirements of subsection a.ii, b.ii, or
c.ii set forth below, as applicable, and (b) a maximum note rate or maximum
capped note rate, established at the time of Rate Lock, will be the interest
rate that produces a minimum Amortizing DCR in accordance with the requirements
of subsection a.ii, b.ii or c.ii set forth below, as applicable.

Notwithstanding the foregoing, Freddie Mac may adjust maximum LTV and minimum DCR for
softer markets as published by Freddie Mac from time to time in the online Multisuite Resource Center under "Multifamily Market Ratings."  If Freddie Mac
has determined, in its sole discretion, that no market adjustment is required,
the initial sizing of each Loan must comply with the following terms and
conditions (as also reflected in the
chart set forth in Exhibit C to this Agreement):

a.         Loan Terms of 5 years or 5
years plus Extension Period.  The following terms will apply to Loans with
a term of five (5) years or five (5) years plus an Extension Period:

i.          LTV.  For an
Acquisition Loan, the LTV for such Mortgage will not exceed 70%.  For a No Cash
Out Refinance Loan or a Cash Out Refinance Loan, the LTV for such Mortgage will
not exceed 65%.

ii.          DCR.  The Loan Amount
for Acquisition Loans and No Cash Out Refinance Loans will not exceed the
amount that produces: (i) for a Fixed Rate Loan or Fixed to Float Loan, an
Amortizing DCR of 1.30:1.0, and (ii) for a Variable Rate Loan, an Amortizing
DCR of 1.05:1.0.  The Loan Amount for Cash Out Refinance Loans will not exceed
the amount that produces:  (i) for a Fixed Rate Loan or Fixed to Float Loan, an
Amortizing DCR of 1.35:1.0, and (ii) for a Variable Rate Loan, an Amortizing
DCR of 1.10:1.0.

b.         Loan Term of 7 years, 6
years plus Extension Period or 7 years plus Extension Period.  The
following terms will apply to Loans with a term of seven (7) years, six (6)
years plus an Extension Period or seven (7) years plus an Extension Period:

i.          LTV.  For an
Acquisition Loan, the LTV for such Mortgage will not exceed 75%.  For a No Cash
Out Refinance Loan or a Cash Out Refinance Loan, the LTV for such Mortgage will
not exceed 70%.

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ii.          DCR.  The Loan Amount
for Acquisition Loans and No Cash Out Refinance Loans will not exceed the
amount that produces: (i) for a Fixed Rate Loan or Fixed to Float Loan, an
Amortizing DCR of 1.25:1.0, and (ii) for a Variable Rate Loan, an Amortizing
DCR of 1.05:1.0.  The Loan Amount for Cash Out Refinance Loans will not exceed
the amount that produces:  (i) for a Fixed Rate Loan or Fixed to Float Loan, an
Amortizing DCR of 1.30:1.0, and (ii) for a Variable Rate Loan, an Amortizing
DCR of 1.10:1.0.

c.         Loan Term of 10 years, 9
years plus Extension Period or 10 years plus Extension Period.  The
following terms will apply to Loans with a term of ten (10) years or nine (9)
years plus an Extension Period or ten (10) years plus an Extension Period:

i.          LTV.  For an
Acquisition Loan, No Cash Out Refinance Loan or a Cash Out Refinance Loan, the
LTV for such Mortgage will not exceed 75%.

ii.          DCR.  The Loan Amount
for Acquisition Loans and No Cash Out Refinance Loans will not exceed the
amount that produces: (i) for a Fixed Rate Loan or Fixed to Float Loan, an
Amortizing DCR of 1.25:1.0, and (ii) for a Variable Rate Loan, an Amortizing
DCR of 1.05:1.0.  The Loan Amount for Cash Out Refinance Loans will not exceed
the amount that produces (i) for a Fixed Rate Loan or Fixed to Float Loan, an
Amortizing DCR of 1.30:1.0, and (ii) for a Variable Rate Loan, an Amortizing
DCR of 1.10:1.10.

3.2.      Borrower.

3.2.1.   Type of Borrower.  Each Borrower shall be an entity permitted pursuant
to the terms of the Guide and organized pursuant to state law.      

3.2.2    Ownership and Control.  The Sponsor must (i) have a direct or indirect
majority ownership interest in each Borrower and (ii) exercise Control of each Borrower without the
requirement of consent of any other Person that is a Required Borrower
Principal.  Subject to the following sentence, Freddie Mac will consider a
structure in which the Sponsor (i) has a direct or indirect majority ownership
interest in a Borrower and (ii) Controls such Borrower together with one or
more other Required Borrower Principals.  Notwithstanding the foregoing, any
Required Borrower Principals (other than the
Sponsor and any publicly-traded shareholders of the Sponsor) in the ownership structure of any Borrower must be
reviewed and approved by Freddie Mac prior to the Origination Date of the
applicable Mortgage based on Freddie Mac's then current credit and underwriting
standards.

3.2.3.   Single Asset Entity.  Each Borrower (a) shall be a single asset entity
throughout the term of the applicable Mortgage; (b) shall not own any real or
personal property other than the applicable Property securing the applicable
Mortgage and personal property related to the operation and maintenance of such
Property; (c) shall not operate any business other than the operation of
such Property; and (d) shall not maintain its assets in a way difficult to
segregate and identify.

3.3.      Properties.

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3.3.1.   Property Fundamentals.  The physical
condition, location, and other aspects of each Property, including but not
limited to environmental and zoning, and the conditions in the market where
each Property is located, must satisfy Freddie Mac's underwriting criteria in
effect from time to time.

3.3.2.   Occupancy.  On or
prior to the applicable Origination Date, each Property must be stabilized and
the ratio of units leased to tenants under leases meeting Freddie Mac's lease
requirements (as set forth in the applicable Security Instrument) over total
rentable units must satisfy Freddie Mac's then-current occupancy requirements.

3.4.      Property
Management.  With respect to each Property, the Sponsor, and/or the Sponsor's
existing subsidiary management company wholly owned and controlled by the
Sponsor and designated by the Sponsor as the property manager for the state
where the applicable Property is located, is/are approved as initial property
manager(s).

3.5.      Rate-Lock.  The interest rate or Margin, as the case may be, and
terms for each Mortgage will be set forth in the Commitment for such Mortgage
and will be fixed at Rate Lock except as otherwise set forth in the applicable
Commitment; provided, however, that without the approval of Freddie Mac and the
Seller (as evidenced by the execution and delivery by Freddie Mac and Seller of
any applicable Commitment or adjustment letter or amendment thereto), a Commitment
will not contain terms inconsistent with this Agreement.

 

3.6.      Amortization; Interest Calculation
Convention.

3.6.1.   Amortization Period.  Each Loan will be amortized on a thirty (30) year
basis; provided, however, at the Sponsor's request, Freddie Mac will consider
structuring a particular Loan as an Interest Only Loan or a Partial Interest
Only Loan provided that such Loan meets Freddie Mac's then-current underwriting
and credit requirements

                        3.6.2.   Interest
Calculation. At the Borrower's option, interest on each Loan shall
be calculated (i) on the basis of a 360-day year and the actual number of days
in the period for which interest is being calculated, or (ii) on the basis of a
360-day year and twelve (12) 30-day months.

3.7.      Guaranties.  A Guaranty will be required for each Mortgage.  Any
Guarantor must have a direct or indirect ownership interest in each Borrower. 
The "Base Recourse" under each Note and the "Base Guaranty"
under each Guaranty shall be zero percent (0%).

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3.8.      Escrows.  Collection of
monthly escrow deposits for the payment of real estate taxes will be required
for each Mortgage.  Collection of monthly escrow deposits for the payment of
fire, hazard and other insurance premiums will be required; provided, however,
Freddie Mac will consider deferring collection of such monthly escrow deposits
subject to an umbrella insurance policy acceptable to Freddie Mac. Collection
of monthly escrow deposits for water, sewer and other charges that could result
in a lien upon the applicable Property will be deferred.  Notwithstanding the
foregoing, (i) commencement of monthly escrow deposits for any charges for
which monthly escrow deposits have been deferred may be required for a Loan if
the Borrower does not timely pay any such charges, if the Borrower fails to
provide timely proof of payment of such charges or at any time during the
existence of an Event of Default (as defined in the applicable Loan Documents)
and (ii) the Borrower and Guarantor will be personally liable for the amount of
any loss or damage incurred by the Lender as a result of any unpaid charges for
which escrow deposits are deferred.

3.9.      Replacement Reserves.  Collection of monthly Replacement Reserve deposits
will be required with respect to each Mortgage.  Freddie Mac will determine in
its discretion the amount of any initial deposit and the monthly deposits under
each Replacement Reserve Agreement.  The amount of any initial deposit and the
monthly deposits under a Replacement Reserve Agreement shall be set forth in
the Commitment for such Mortgage.  Notwithstanding the foregoing, Freddie Mac
will consider deferring collection of monthly Replacement Reserve deposits on a
Loan by Loan basis, provided that such Loan meet Freddie Mac's then-current
underwriting and credit requirements for deferrals of Replacement Reserve
deposits.  As a condition of any such deferral, the applicable
Borrower will be obligated to make capital replacements to the applicable
Property, on an annual basis, in an amount not less than the engineer’s
recommended amount.

3.10     Repairs.

3.10.1. Repair and Escrow Agreement.  Freddie Mac may require a Repair and Escrow
Agreement for each Mortgage, as determined by Freddie Mac.  Freddie Mac must
approve, and each Commitment will include, a schedule of any required Repairs
to be completed for each Property.

3.10.2. Repair Escrow Fund.  If a Repair and Escrow Agreement is required for a
particular Property, and Freddie Mac requires a Repair Escrow, the applicable
Borrower must establish a Repair Escrow Fund in the amount required by the
Commitment, in accordance with the terms of the Commitment and the Repair and
Escrow Agreement.  After satisfactory completion of the Repairs, the Servicer,
on behalf of Freddie Mac, will return to such Borrower any funds remaining in
the Repair Escrow Fund.  

3.10.3. Immediate Repairs.  In addition to any Repairs required to be completed
pursuant to a Repair and Escrow Agreement, Freddie Mac may in its discretion
also require a Borrower to make immediate Repairs to a Property depending upon
the condition of such Property within a period of time prior to the Origination
Date.  Any immediate Repairs and the timeframe within which such immediate
Repairs must be completed will be set forth in the Commitment.  

3.11.    Transfers/Assumptions.

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3.11.1. Variable Rate Loans subject to
Third Party Cap Agreement.  Each Security Instrument for a Variable Rate Loan
subject to a Third  Party Cap Agreement must contain the version of Section 21
entitled TRANSFERS OF THE MORTGAGED PROPERTY OR INTERESTS IN BORROWER.  [NO
RIGHT TO TRANSFER.]  Variable Rate Loans subject to Third Party Cap Agreements
are not eligible for assumption.

3.11.2. All Other Loans.  Each Security Instrument for a Loan other than a
Variable Rate Loan subject to a Third Party Cap Agreement must contain the
version of Section 21 entitled TRANSFERS OF THE MORTGAGED PROPERTY OR INTERESTS
IN BORROWER [RIGHT TO UNLIMITED TRANSFERS—WITH LENDER APPROVAL], subject to the
modifications set forth in Exhibit A.  In connection with a
transfer that requires approval by the Lender pursuant to the terms of the
Security Instrument, in addition to the terms and conditions set forth in such
version of Section 21 of the Security Instrument, each Security Instrument must
provide (i) that Freddie Mac must approve a third party transferee based on
Freddie Mac's underwriting standards customarily applied by Freddie Mac at the
time of the proposed transfer to the approval of borrowers in connection with
the origination or purchase of similar mortgages on multifamily properties and
(ii) that the Borrower must
pay to Freddie Mac a transfer fee equal to 1% of the outstanding principal
balance of the applicable Mortgage, a $3,000 review fee, and all costs and
expenses incurred in connection with the approval and implementation of any
transfer and assumption.  Each Security Instrument shall provide that the
Borrower must pay to Freddie Mac a $3,000 review fee, and all costs and
expenses incurred in connection with any transfer to a Person related to the
Sponsor in accordance with the terms of Section 21 of the Security Instrument;
provided, however, no transfer fee will be charged in connection therewith. 
The terms of any assumption will be set forth in Freddie Mac's assumption
approval.  The review fees and transfer fees shall be allocated between Freddie
Mac and the Seller as set forth in the Guide.  Any Loan that is assumed will not
be eligible for a Substitution (as defined below).

3.12.    Third-Party Subordinate
Financing.  No subordinate financing will be permitted,
including mezzanine financing, from a party other than the Seller/Freddie Mac. 

3.13.    Substitution
Rights.

3.13.1  Substitution Agreement.  The
Borrowers must enter into a Master Substitution Agreement in the form attached
hereto as Exhibit B (the "Substitution Agreement")
on or before the Expiration Date.  Subject to the terms and limitations of, and
as more fully set forth in, the Substitution Agreement, if Freddie Mac has
purchased at least two (2) of the Mortgages, each Borrower will have the right
from time to time after the Expiration Date to substitute the Property securing
such Borrower's Mortgage with another Property (a "Substitution"). 
If Freddie Mac does not receive a fully-executed Substitution Agreement on or
before the Expiration Date, no Substitutions of any of the Properties will be
permitted under any of the Mortgages.

3.14.    Reporting
Requirements.  The Loan Documents will provide for
periodic financial reporting for the Sponsor, each Borrower, each Guarantor and
each Property.

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3.15.    Supplemental Financing.  Freddie
Mac will consider purchasing supplemental Mortgages in accordance with the
Supplemental Financing provision set forth in Exhibit A to this
Agreement, which will be included in Exhibit B to each Security Instrument.

3.16.    Moisture Management Plan.  A MMP
approved by Freddie Mac in its sole discretion will be required for each
Property throughout the term of the applicable Mortgage; provided, however,
Freddie Mac will consider, in its sole discretion, approving a Borrower’s
policies and procedures regarding moisture and mold as the required MMP subject
to Freddie Mac’s review and approval of such policies and procedures and the
Property Condition Report with respect to the applicable Property.

4.         FIXED RATE LOANS.

4.1.      Loan Term.  Each Fixed
Rate Loan will, at the Sponsor's option, have a term of five (5), seven (7) or
ten (10) years.

4.2.      Fixed Interest Rate.  At Rate Lock for a Fixed Rate Loan, Freddie Mac
will provide to the Seller and the Sponsor an interest rate quote for the Fixed
Interest Rate, which will be based upon a spread or margin, as determined by
Freddie Mac at Rate Lock, above the yield rate on the United States Treasury
Security applicable to the term of the Fixed Rate Loan.  Such United States
Treasury Security will also be referenced in the Note for the applicable
Mortgage for the purposes of calculating prepayment premiums.  Throughout the
term of the Fixed Rate Loan, interest on the principal balance of such Fixed
Rate Loan will accrue at such Fixed Interest Rate.

4.3.      Fixed
Rate Prepayment Premium.  Subject to Section 7.2 of
this Agreement, each Fixed Rate Loan shall be documented using Freddie Mac's
then-current form "Fixed Rate" Multifamily Note ("Form Fixed
Rate Note").  Each Fixed Rate Loan shall be subject to payment of a
prepayment premium upon prepayment prior to the last three (3) months of the
term of such Fixed Rate Loan as more fully described in the applicable Form
Fixed Rate Note.

5.         FIXED TO FLOAT LOANS.

5.1.      Loan Term.  Each Fixed to Float Loan will have, at the option of
the Sponsor, a term of five (5), six (6), seven (7), nine (9) or ten (10) years
plus the Extension Period, if applicable.

5.2.      Interest Rates.

5.2.1.   Fixed Rate Period.  At Rate Lock for a Fixed to Float Loan, Freddie Mac
will provide to the Seller an interest rate quote for the Fixed Interest Rate
to be applicable during the Fixed Rate Period, which will be based upon a
spread or margin, as determined by Freddie Mac at Rate Lock, above the yield
rate on the United States Treasury Security applicable to the term of the Fixed
Rate Period.  Such United States Treasury Security will also be referenced in
the Note for the applicable Mortgage for the purposes of calculating prepayment
premiums.  During the Fixed Rate Period, interest on the principal balance of
such Fixed to Float Loan will accrue at such Fixed Interest Rate.

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5.2.2.   Extension Period.  If an Extension Period applies to a Fixed to Float
Loan, the interest rate shall convert to a Variable Rate Interest Rate on the
first day of the Extension Period.  During the Extension Period, the Variable
Rate Interest Rate shall adjust each calendar month so as to equal the Index
Rate plus a Margin as set forth in the Commitment.  The Margin applicable
during the Extension Period for such Fixed to Float Loan shall be determined by
Freddie Mac based on the then-current market level determined in its sole
discretion.

5.3.      Fixed to Float Prepayment
Premium.  Subject to Section 7.2 of this
Agreement, each Fixed to
Float Loan shall be documented using Freddie Mac's then-current form
"Fixed to Float" Multifamily Note ("Form FTF Note"). 
Each Fixed to Float Loan shall be subject to payment of a prepayment premium
upon prepayment prior to the Extension Period, if applicable, of such Fixed to
Float Loan as more fully described in the applicable Form FTF Note.

6.         VARIABLE RATE LOANS.

6.1.      Loan Term.  Each Variable Rate Loan will have, at the option of
the Sponsor, a term of five (5), seven (7) or ten (10) years.

6.2.      Interest Rates.  At Rate Lock for a Variable Rate Loan the Seller, in
consultation with the Sponsor or Borrower, shall select as the Index either the
one (1) month Reference Bills® Security or the one (1) month LIBOR
Rate, and Freddie Mac will determine the Margin.  The Variable Rate Interest
Rate will adjust each interest adjustment period (each one calendar month
period) so as to equal the Index Rate plus the Margin. The Margin for a
Variable Rate Loan will remain constant during the entire term of such Variable
Rate Loan.  The Index for such Variable Rate Loan shall be selected by the
Borrower as provided for by this Agreement, and the Margin for such Variable
Rate Loan shall be determined by Freddie Mac based on the then-current market
level determined in its sole discretion.

6.3.      Third Party Cap Agreements.  

                        6.3.1.   Interest
Rate Cap Required.  Unless Freddie Mac determines in its sole discretion
that a Property's LTV is less than or equal to 60%, or unless the Commitment
for a Variable Rate Loan provides for an "internal" interest rate cap
(the cost of which will be included in the Margin), the Borrower of each
Variable Rate Loan must maintain in effect during the entire term of such Variable
Rate Loan a Third Party Cap Agreement.  Each Third Party Cap Agreement shall
have a notional amount equal to the Loan Amount and a term in accordance with
the following requirements:

19

 

 	
   TERM OF LOAN

   	
   LTV

   	
   MINIMUM TERM OF THIRD PARTY CAP AGREEMENT

   
	
  5
  years

  	
  At
  maximum allowed under §3.1.2

  	
  5
  years

  
	
  5
  years

  	
  At
  least 5% less than maximum allowed under §3.1.2

  	
  3
  years with escrow

  
	
  7
  years

  	
  At
  maximum allowed under §3.1.2

  	
  7
  years

  
	
  7
  years

  	
  At
  least 5% less than maximum allowed under §3.1.2

  	
  4
  years with escrow

  
	
  10
  years

  	
  At
  maximum allowed under §3.1.2

  	
  10
  years

  
	
  10
  years

  	
  At
  least 5% less than maximum allowed under §3.1.2

  	
  5
  years with escrow

  

 

6.3.2.   Third Party Cap Agreement
Terms. Each Third Party Cap Agreement shall be with a rate
cap provider approved by Freddie Mac as an acceptable interest rate cap
provider at such time, and shall be on a form previously agreed upon by Freddie
Mac and such provider.  Each Third Party Cap Agreement shall have a strike rate
or cap rate that produces an Amortizing DCR in accordance with the requirements
of Section 3.1.2 of this Agreement.

6.3.3.   Replacement Cap Escrow.  With respect to each Variable Rate Mortgage for
which a Third Party Cap Agreement is required but the term of such Third Party
Cap Agreement may be less than the term of the Variable Rate Mortgage pursuant
to Section 6.3.1 of this Agreement, the Security Instrument will
provide that if at any time the term of the Third Party Cap Agreement then in
place is less than the remaining term of the applicable Variable Rate Mortgage,
the Borrower shall escrow monthly deposits to allow for the purchase of a
replacement Third Party Cap Agreement.  Freddie Mac will determine the amount
of the escrow based upon 125% of the projected costs of the existing cap rate,
using the original strike rate.  The Security Instrument will also provide that
the Lender may adjust the amount of such monthly deposits annually, except
during the twelve (12) calendar month period immediately prior to the
expiration date of the Third Party Cap Agreement then in place, during which
twelve (12) month period Lender may adjust the amount of such monthly deposits
as frequently as monthly.

6.3.4.   Third Party Cap Agreement
Guaranty.  The Loan Documents for each Variable Rate Mortgage
for which a Third Party Cap Agreement is required will provide that Borrower
and Guarantor will be personally liable to Freddie Mac for failure to maintain
a Third Party Cap Agreement at any time during the term of a Variable Rate
Mortgage that does not provide for an internal interest rate cap. 

6.4.      Variable Rate Prepayment
Premium.  Subject to Section 7.2 of this
Agreement, each Variable Rate Loan shall be documented using Freddie Mac's
then-current form "Adjustable Rate" Multifamily Note ("Form
ARM Note").  Each Variable Rate Loan shall be subject to a prepayment premium
upon prepayment prior to the last three (3) months of the term of such Variable
Rate Loan as more fully described in the applicable Commitment and Form ARM
Note.  Variable Rate Loans may be subject to a lockout period equal to the
twelve (12) month period following the date of the first monthly installment of
interest payable under the Note for such Variable Rate Loan.  If applicable, no
prepayment may be made during such lockout period.

20

 

 

 

 

 

            6.5.      Conversion of Variable Rate
Mortgages.  The Borrower of a Variable Rate Loan may convert
such Variable Rate Loan to a Fixed Rate Loan or Fixed to Float Loan at any time
during the term of the Variable Rate Loan in accordance with Freddie Mac's
Streamlined Refinance Mortgage Purchase Product as then in effect.  The Fixed
Rate Loan or Fixed to Float Loan resulting from a conversion of a Variable Rate
Loan shall not be counted against the Aggregate Commitment Available or
otherwise subject to the terms of this Agreement.

7.         ADDITIONAL TERMS.

7.1.      Loan
Applications under this Agreement.  The Seller may from time to time prior to the
Expiration Date request Freddie Mac to purchase Mortgages under the terms of
this Agreement.  Each such request will be made in accordance with Freddie
Mac's application process in effect from time to time.

7.2.      Multifamily Seller/Servicer
Guide, Commitment and Loan Documents.  From time to time, Freddie Mac in its sole
discretion revises the Guide, the form Commitment and the Form Loan Documents
to add, delete or change requirements, conditions and form documents.  As the
Guide, the form Commitment and the Form Loan Documents are revised, such
revised documents shall be used for each Mortgage for which a Commitment has
not yet been issued.  If a conflict develops between this Agreement and the
revised form of the Guide, form Commitment or Form Loan Documents, the revised
form of the Guide, form Commitment or Form Loan Documents shall govern, except
for the general terms of Sections 2, 3, 4, 5 and 6 of this
Agreement.  (For example, as the form Guaranty is revised, the terms of such
revised Guaranty shall apply to each Mortgage for which a Commitment has not
yet been issued by Freddie Mac and accepted by the Seller; however, the
"Base Guaranty" shall remain at zero percent (0%) as set forth in Section
3.7.1 of this Agreement.  As a further example, if Freddie Mac revises
its underwriting or credit policies, such revised underwriting or credit
policies shall apply to each Mortgage for which a Commitment has not yet been
issued by Freddie Mac and accepted by the Seller, except as explicitly set
forth in Sections 2 through 6 of this Agreement). 
Except to the extent that revisions to the Guide, the Form Loan Documents or
Freddie Mac’s policies or procedures necessitate a change to the Modifications of
Form Loan Documents set forth in Exhibit A to this Agreement, as
determined by Freddie Mac in its reasonable discretion, the Modifications of
Form Loan Documents set forth in Exhibit A to this Agreement will
apply to any revised Form Loan Documents.

If this Agreement is silent with respect to any
subject that is covered by provisions set forth in the Guide or in any
Commitment, the provisions of the Guide and Commitment, respectively, will
govern.

 

7.3.      Servicing of Mortgage.  The Servicer shall service each Mortgage pursuant to
the requirements of the Guide.  In addition, if this Agreement or any Loan
Documents provide additional servicing requirements, the Servicer shall perform
such additional servicing requirements without payment of any additional
servicing fee, except as otherwise agreed in writing by Freddie Mac and the
Servicer.

21

 

 

 

 

 

7.4.      Replacement of Seller.  The Seller is an approved Freddie Mac Program Plus
Seller/Servicer as of the date of this Agreement.  If at any time the Seller is
no longer an approved Program Plus Seller/Servicer, Freddie Mac may replace the
Seller with another seller/servicer under this Agreement without payment of any
fee or penalty to the Seller.  Notwithstanding the foregoing, so long as no
Termination Event has occurred and is continuing, the Sponsor shall have the
right to approve any replacement of such Seller, such approval to not be
unreasonably withheld, conditioned or delayed; provided, however, if the
Sponsor does not approve any such replacement, Freddie Mac will have the right
to terminate this Agreement.  Any Servicer terminated
hereunder must transfer the servicing of any Mortgage in accordance with the
Guide to a replacement Servicer selected by Freddie Mac.

7.5.      Fees
and Expenses.

7.5.1.   Fees and Expenses Due on the
Closing Date.  The Seller shall remit to Freddie Mac on the Closing
Date, as further consideration for Freddie Mac's agreements hereunder, a
non-refundable fee equal to one tenth of one percent (0.10%) of the Aggregate
Commitment Available ("Transaction Fee").  In addition, the
Seller shall cause the Sponsor to pay or reimburse the Seller and Freddie Mac
for their respective expenses, including legal fees incurred in connection with
this Agreement and any other documents related hereto.

7.5.2.   Fees
Due in Connection with the Issuance of each Commitment.

a.         With respect to each Loan, the
Seller must remit to Freddie Mac, as additional consideration for Freddie Mac's
costs in underwriting the transactions contemplated hereby, a non-refundable
fee in the amount of Five Thousand and 00/100 Dollars ($5,000.00) (the "Mortgage
Review Fee") and a Seismic Report Fee, as applicable.  The Mortgage
Review Fee and a Five Hundred and 00/100 Dollar ($500.00) deposit for the
Seismic Report Fee, if applicable, shall be paid at the same time as the
Application Fee pursuant to the terms of the Guide.

b.         With respect to each Loan, the
Seller must remit to Freddie Mac a non-refundable application fee equal to the
greater of Two Thousand and 00/100 Dollars ($2,000.00) or one-tenth of one
percent (0.10%) of the proposed Loan Amount (the "Application Fee"). 
For a Loan under Freddie Mac's standard delivery process, the Seller must remit
the Application Fee to Freddie Mac with the full underwriting package in
accordance with the Guide.  For a Loan under Freddie Mac's early rate-lock
delivery process, the Application Fee is deemed earned by Freddie Mac upon Rate
Lock and the Seller must remit the Application Fee to Freddie Mac in accordance
with the terms of the Commitment.  

c.         In addition to the fees and
costs set forth in subsections a. and b. above, the Seller shall pay or
reimburse, or cause the Borrowers to pay or reimburse, Freddie Mac for its
other actual third party costs and expenses, including costs and expenses for
thirty party reports and reasonable legal fees for outside counsel, incurred in
connection with each Loan.

22

 

 

 

 

 

d.         The fees payable to Freddie
Mac hereunder are in addition to any fees, expenses and deposits required to be
paid by a Borrower to the Seller pursuant to an Application.

            7.5.3.   Substitution Fees.  In
connection with any Substitution, the applicable Borrower must pay the
applicable Substitution fees pursuant to the terms of the Substitution
Agreement.

            7.5.4.   Annual Servicing
Fee.  With respect to each Loan, the Servicer will
receive an annual servicing fee in an amount permitted under the Guide but in
no event in excess of one-tenth of one percent (0.10%) or ten (10) basis points
of the original Mortgage Loan Amount, such fee to be included in the Fixed
Interest Rate for Fixed Rate Loans and Fixed to Float Loans and in the Margin
for Variable Rate Loans.  

7.6.      Use of Proceeds.  The proceeds of any Mortgage may be used for any
lawful purpose.

7.7.      Material
Adverse Change.

7.7.1.   Reporting
Requirements.

a.         The Seller Master Financing
Agreement must require the Sponsor to deliver the following to the Seller no
later than sixty (60) days prior to the anniversary of the Closing Date (the
"Anniversary Delivery Date"):

i.          The Sponsor's and, if the
Guarantor is a Person other than the Sponsor, the Guarantor's most recent Form
10-K and Form 10-Q; and

ii.          a complete Freddie Mac Form
1115 dated within ninety (90) days of the anniversary of the Closing Date.

b.         The Seller must review and
analyze the documentation required by subsection (a) above (collectively, the
"Anniversary Date Financial Documentation") and, no later than
thirty (30) days prior to the anniversary of the Closing Date, deliver to
Freddie Mac (i) all such Anniversary Date Financial Documentation, (ii) the
Seller’s analysis thereof, and (iii) a certification from the Seller that the
Seller has reviewed the Anniversary Date Financial Documentation and (A) the
Seller has determined that the Sponsor's and, if the Guarantor is a Person
other than the Sponsor, the Guarantor's current financial position is equal to
or better than such party’s financial position as of the Closing Date, or (B)
the Seller has determined that either the Sponsor' or, if the Guarantor is a
Person other than the Sponsor, the Guarantor's current financial position is
not equal to or better than such party’s financial position as of the Closing
Date, together with the percentage by which such party’s net worth, liquidity
and/or contingent liabilities have changed since the Closing Date.

23

 

 

 

 

 

7.7.2.   Monitoring Compliance.  The Seller shall monitor compliance with the
requirements described in this Section 7.7, collect and review
any documentation described herein and immediately report to Freddie Mac any
violations of the requirements described above or any other violations of the
Obligations.

7.7.3.   Underwriting Mortgages.  In addition to
Freddie Mac’s assessment of the Anniversary Date Financial Documentation,
Freddie Mac may determine that a Material Adverse Change has occurred based on
its review and underwriting in connection with each Mortgage.

7.7.4.   Consequences of a Material
Adverse Change.  If a Material
Adverse Change has occurred, Freddie Mac may, at its option and in its sole and
absolute discretion, declare a Termination Event and exercise any of its rights
and remedies under Section 9.2 of this Agreement.

7.8.      No Renewal or Extension
Options.  Neither the Sponsor nor any Borrower shall have any
right to renew or extend the terms of this Agreement.

7.9.      Term.  The term of this Agreement shall commence on the
Closing Date and terminate on the Expiration Date unless otherwise terminated
earlier pursuant to the provisions hereof.

8.         ACKNOWLEDGEMENTS BY SELLER.

The Seller
acknowledges to Freddie Mac as follows:

8.1.      Insurance.  The Seller acknowledges that Freddie Mac, from time
to time, revises its insurance requirements as set forth in the Guide and in
each Commitment and that compliance with all revised insurance requirements is
required by Freddie Mac during the term of this Agreement.

8.2.      Further Documentation.  In the event Freddie Mac requires any further
documentation or information with respect to a Mortgage prior to the
Origination Date of such Mortgage or with respect to the Sponsor or Guarantor
to carry out the intent of this Agreement, the Seller shall provide, or the
Seller shall cause any applicable Borrower, the Sponsor or Guarantor, as the
case may be, to provide, or cause to be provided to Freddie Mac at the Seller's
or Borrower's, the Sponsor's and Guarantor's sole cost and expense.

9.         RIGHT OF TERMINATION.

9.1.      Termination Events.  The occurrence or existence of any one or more of
the following events or conditions (whatever the reason therefor and whether
voluntary, involuntary or effected by operation of Law) shall be a "Termination
Event":

9.1.1.   Default under this Agreement.  The Seller shall be in default under this Agreement.

24

 

 

 

 

 

9.1.2.   Event of Default under the
Loan Documents.  Any Borrower shall be in default under any Security
Instrument or other Loan Document, beyond any applicable cure period or any
Guarantor shall be in default under any Guaranty beyond any applicable cure period.

9.1.3.   Nondelivery of Mortgage.  A nondelivery (as such term is used in the Guide) of
any Mortgage shall have occurred, as determined by Freddie Mac.

9.1.4.   Insolvency.  The Sponsor or Guarantor ceases to be Solvent or
admits in writing its inability to pay its debts as they mature.

9.1.5.   Cessation of Business.  The Sponsor or Guarantor ceases to conduct the business
of the Sponsor or Guarantor, respectively, or the Sponsor or Guarantor is
enjoined, restrained or in any way prevented by court order from conducting all
or any material part of the business of the Sponsor or Guarantor, respectively,
and such injunction, restraint or other preventive order is not stayed or
dismissed within twenty (20) Business Days after the entry thereof.

9.1.6.   Bankruptcy and Other
Proceedings.  The Sponsor or Guarantor files for bankruptcy
protection under the United States Bankruptcy Code or voluntarily becomes
subject to any reorganization, receivership, insolvency proceeding or other
similar proceeding pursuant to any other federal or state Law affecting debtor
and creditor rights, or an involuntary case is commenced against the Sponsor or
Guarantor by any creditor (other than the Seller or Freddie Mac) of the Sponsor
or Guarantor, respectively, pursuant to the United States Bankruptcy Code or
other federal or state Law affecting debtor and creditor rights and is not
dismissed or discharged within sixty (60) days after filing.

9.1.7.   Material Adverse Change.  A Material Adverse Change shall have occurred.

9.1.8.   Preservation of Existence.  Any Guarantor that is a corporation, general or
limited partnership or limited liability company fails to maintain its legal
existence as a corporation, general or limited partnership or limited liability
company, as the case may be, and its license or qualification and good standing
in each jurisdiction in which its ownership or lease of a Property or the
nature of its business makes such license or qualification necessary or desirable,
as applicable.

9.1.9.   Liquidations, Mergers,
Consolidations, Acquisitions.  Except for transfers permitted by Section 3.11 and
Exhibit A, any Guarantor that is not a natural person dissolves, liquidates or
winds-up its affairs, or becomes a party to any merger or consolidation, or
acquires by purchase, lease or otherwise all or substantially all of the assets
or capital stock of any other Person.

25

 

 

 

 

 

9.2.      Consequences of Termination
Event.  Upon the occurrence of a Termination Event under Section
9.1, Freddie Mac shall be entitled at its sole and exclusive option, to
terminate its obligations to issue Commitments; it being understood and agreed
that if a Termination Event shall also constitute a default or event of default
by Borrower under any Loan Document, then the provisions of this Section
9.2 shall not be deemed to preclude Freddie Mac from exercising all of
its rights and remedies provided for under such applicable Loan Document. 
Notwithstanding the foregoing, Freddie Mac also shall be entitled at its option
not to terminate its obligations to issue Commitments and to elect to modify
the terms set forth in this Agreement under which Freddie Mac will agree to
issue additional Commitments under this Agreement.

10.       MISCELLANEOUS.

10.1.    Cooperation by the Sponsor and
Borrower; the Sponsor's Obligations.  The Sponsor must grant to Freddie Mac the right to
distribute on a confidential basis financial and other information concerning
the Sponsor, Guarantor, each Borrower, each indemnitor, other Person, the
Properties, and other pertinent information with respect to any Mortgage to any
party purchasing securities issued by Freddie Mac.

10.2.    Successors and Assigns.  This Agreement shall be binding upon and shall inure
to the benefit of Freddie Mac, the Seller and their respective successors and
assigns, except that the Seller may not assign or transfer any of its rights or
obligations hereunder or any interest herein, except (i) pursuant to any written
agreement among Freddie Mac, Sponsor (as long as no Termination Event has
occurred and is continuing) and the Seller permitting such assignment or
transfer, or (ii) as otherwise approved in writing by Freddie Mac and Sponsor
(as long as no Termination Event has occurred and is continuing); provided,
however, that if the Sponsor does not approve any such assignment, Freddie Mac
shall have the right to terminate this Agreement.

10.3.    No Agency.  The Seller is not an agent of Freddie Mac.

10.4.    Modifications, Amendments or
Waivers.  Freddie Mac and the Seller may from time to time
enter into written agreements amending or changing any provision of this Agreement
or the rights of Freddie Mac or the Seller hereunder, or may grant written
waivers or consents to a departure from the due performance of the obligations
of the Seller or Freddie Mac hereunder.  Any such written agreement, waiver or
consent shall be effective to bind Freddie Mac and the Seller.

10.5.    Remedies Cumulative.  Each right and remedy provided in this Agreement is
distinct from all other rights or remedies under this Agreement or any Loan
Document or afforded by applicable Law, and each shall be cumulative and may be
exercised concurrently, independently, or successively, in any order.

26

 

 

 

 

 

10.6.    Notices.  All notices, requests, demands, directions and other
communications given to or made upon any party hereto under the provisions of
this Agreement shall be in writing unless otherwise expressly provided
hereunder and shall be delivered or sent by telex, facsimile, certified mail or
hand delivery if to Freddie Mac or to the Seller, to each of them at the
addresses and numbers set forth below, or in accordance with any subsequent
unrevoked written direction from any party to the others.  All such notices
shall, except as otherwise expressly herein provided, be effective (a) in the
case of telex or facsimile, when received, (b) in the case of hand-delivered
notice, when hand-delivered, (c) if given by certified mail, three (3) days
after such communication is deposited in the mail with first-class postage
prepaid, return receipt requested, and (d) if given by any other means
(including by air courier), when delivered; provided, that all such
notices to Freddie Mac shall not be effective until received.

Freddie
Mac's Notice Address:

Freddie Mac

M.S. B-4F

8100 Jones Branch Drive

McLean, Virginia  22102

Attention:
Multifamily Business Initiatives Director

 

with a
copy to:

Freddie Mac

M.S. B-4B

8100 Jones Branch Drive

McLean, Virginia  22102

Attention: 
Conventional Structured Transactions Director

 

Seller's
Notice Address:

Wells Fargo Bank, National Association

2010 Corporate Ridge, Suite 1000

McLean, Virginia  22102

Attention: 
Servicing/Asset Management Department

Fax No. (866) 359-6885

 

 

10.7.    Severability.  The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision, and all other provisions shall remain in full force and effect. 
This Agreement and the Guide contain the entire agreement between the parties as
to the rights granted and the obligations assumed in this Agreement.  This
Agreement may not be amended or modified except by a writing signed by the
party against whom enforcement is sought.

27

 

 

 

 

 

10.8.    Governing Law; Consent to
Jurisdiction and Venue.  The Laws of the Commonwealth of Virginia shall govern this Agreement.  The Seller agrees that any controversy arising under or
in relation to this Agreement shall be litigated exclusively in the courts of
the Commonwealth of Virginia; provided, however, the Loan Documents shall be
governed by the Laws of the jurisdiction specified therein.  The state and
federal courts and authorities with jurisdiction in the Commonwealth of Virginia shall have exclusive jurisdiction over all controversies that shall arise under or in
relation to this Agreement.  The Seller irrevocably consents to service,
jurisdiction, and venue of such courts for any such litigation and waives any
other venue to which it might be entitled by virtue of domicile, habitual
residence or otherwise. 

10.9.    Prior Understanding.  This Agreement and the other Loan Documents
supersede all prior understandings and agreements, whether written or oral,
between the parties hereto and thereto relating to the transactions provided
for herein and therein, including any prior term sheets.

10.10.  Disclosure of Information.  Freddie Mac may furnish information regarding the
Seller, the Sponsor, any Borrower or any Property to third parties with an
existing or prospective interest in the servicing, enforcement, evaluation,
performance, purchase or securitization of a Mortgage, including but not
limited to Freddie Mac's regulators, accountants, trustees, master servicers,
special servicers, rating agencies, and organizations maintaining databases on
the underwriting and performance of multifamily mortgage loans.

10.11.  No Third Parties Benefited.  No creditor of any party to this Agreement and no
other person shall be a third party beneficiary of this Agreement or any Loan
Document.  Without limiting the generality of the preceding sentence, (i) an
agreement, if any, including any Servicing Agreement, between Freddie Mac and
the Seller for purchases of Mortgages shall constitute a contractual obligation
of the Seller that is independent of the obligation of Borrower for the payment
of a Mortgage, (ii) neither the Sponsor nor any Borrower shall be a third party
beneficiary of this Agreement, and (iii) no payment by the Seller under any
such agreement will reduce the outstanding principal amount of a Mortgage or
any interest accrued thereon.

10.12.  Advertising.  Freddie Mac may include the name of the Seller, any
Borrower, the Sponsor, the name and location of any Property, the Loan Amount
and the number of apartment units contained in any Property on Freddie Mac's
client list and in any typical advertisement.  

10.13.  Time of Essence.  Time is of the essence with respect to each
obligation of the Seller and Freddie Mac hereunder.

10.14.  Counterparts.  This Agreement may be executed by different parties
hereto on any number of separate counterparts, each of which, when so executed
and delivered, shall be an original, and all such counterparts shall together
constitute one and the same instrument.

 

[Section 10.16 and signatures follow on subsequent
pages]

28

 

 

 

 

 

10.15.  WAIVER OF TRIAL BY JURY.  THE SELLER AND FREDDIE MAC EACH (A) COVENANTS AND
AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF
THIS AGREEMENT OR THE RELATIONSHIP BETWEEN THE PARTIES AS THE SELLER AND
FREDDIE MAC UNDER THIS AGREEMENT THAT IS TRIABLE OF RIGHT BY A JURY AND (B)
WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT
ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE.  THIS WAIVER OF RIGHT TO TRIAL BY
JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND VOLUNTARILY WITH THE
BENEFIT OF COMPETENT LEGAL COUNSEL.

                                                                                               

Initials of the Authorized Officer of
Seller and Freddie Mac

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

29

 

 

 

 

 

 

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

SELLER:

 

WELLS
  FARGO BANK, NATIONAL ASSOCIATION

 

 

 

By:_______________________________________ 

Name:

Title:

 

30

 

 

 

 

 

 

FREDDIE
MAC:

 

FEDERAL
HOME LOAN MORTGAGE CORPORATION, a
federally chartered corporation

 

 

 

By:                                                                               

Name:

Title:

31

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