Document:

EX-10.15

 

	 	 	 	 	 

EXHIBIT 10.15

 EXCHANGE AND REDEMPTION AGREEMENT

          This
Exchange and Redemption Agreement (this “Agreement”)
as of June 30, 2005, among American Railcar Industries, Inc., a Missouri corporation (“ARI”),
Hopper Investments, LLC, a Delaware limited liability company
(“Hopper”), Highcrest Investors
Corp., a Delaware corporation(“Highcrest”), Buffalo Investors Corp., a New York corporation
(“Buffalo”, and together with Hopper and Highcrest, the “Holders”) and American Railcar Leasing,
LLC, a Delaware corporation (“ARL”). All terms not otherwise defined herein shall have the
meaning ascribed to such terms in the Operating Agreement (as defined below).

W I T N E S S E T H 

          WHEREAS, the parties hereto desire to exchange the number of issued and outstanding
shares of New Preferred Stock, of ARI, (the “Preferred Stock”) set forth in Schedule A hereto
across from each Holder’s name respectively (the “Shares”), for the number of shares of A Units,
of ARL (the “A-Units”), set forth in Schedule A hereto across from each Holder’s names
respectively (the “A-Units”), subject to the provisions contained herein;

     WHEREAS, reference is made to that certain Second Amended and Restated Operating
Agreement (the “Operating Agreement”) of ARL, effective as of July 16, 2004, among ARL and
the persons listed on Schedule A thereto;

     WHEREAS, ARI is sole the record and beneficial owner of 151,669 shares of A-Units and
currently serves as the Managing Member of ARL;

     WHEREAS,
ARI, as Managing Member of ARL, hereto desires to consent to the transfer of
A-Units to each of the Holders and hereto desires to consent to the admission of Buffalo as
Managing Member of ARL;

          NOW,
THEREFORE, in consideration of the mutual promises and covenants contained in this
Agreement, and intending to be legally bound by the terms and conditions of this Agreement, the
parties hereto hereby agree as follows:

ARTICLE 1. Exchange.

          SECTION 1.1. Exchange. Subject to the terms and conditions of this Agreement, the
Holders hereby transfer their respective Shares to ARI for cancellation and redemption, and ARI
hereby accepts and acknowledges such transfer from the Holders, and in exchange therefor hereby
transfers to the Holders the number of A -Units set forth across

 

 

from such Holder’s name on Schedule A hereto, and the Holders hereby accept and
acknowledge such transfer.

     ARTICLE
2. Consent to Transfer; Operating Agreement.

          SECTION 2.1. Consent to Transfer. Pursuant to and in compliance with Section 8.1 of
the Operating Agreement, ARI, as Managing Member of ARL, hereby provides its written consent to the
transfer by ARI to each Holder of the number of shares set forth across the name of such Holder on
Schedule A hereto.

          SECTION
2.2. Substitute Members. Pursuant to and in compliance with Section 8.3 of the
Operating Agreement, ARI, as Managing Member of ARL, hereby provides its written consent to the
admission of Hopper, Buffalo and Highcrest as Substitute Members. ARI, as Managing Member of ARL,
acknowledges that Hopper, Buffalo and Highcrest, as Substitute Members, shall be entitled to
exercise or receive any of the rights, powers or benefits of a Member, including the right to
receive distributions and to share in any Profits and Losses. Each Holder hereby agrees to deliver
to ARL a counterpart to the Operating Agreement, substantially in form of Exhibit A hereto, whereby
such Holder accepts and agrees to the terms and conditions of the Operating Agreement.

          SECTION 2.3. Managing Member. Buffalo hereby becomes the Managing Member of ARL.

          SECTION 2.4. Effectiveness and Withdrawal. Pursuant to Section 8.4 of the Operating
Agreement, effective June 30, 2005, Hopper, Buffalo and Highcrest shall be admitted to ARL as
Members, and ARI shall automatically withdraw as a Member of ARL.

     ARTICLE 3. Representations and Warranties of each Holder. In connection with the
transactions contemplated by this Agreement, each Holder hereby severally and not jointly
represents and warrants solely with respect to itself and not any other Holder to ARI as
follows:

          SECTION 3.1. Title. Each Holder is the sole record and beneficial owner of, and has good
legal title to, its respective Shares, and has the full legal right, power and authority to
assign and transfer complete ownership in its respective Shares to
ARL. Each of the Holder’s
respective Shares is, and upon the effectiveness of the assignment and transfer will be, free
and clear of all liens, claims, restrictions, encumbrances, charges, options or rights of third
parties with respect thereto.

          SECTION
3.2 Organization; Authority. Each Holder is duly formed and validly existing
under the laws of the state of its formation and has full power and authority

2

 

to own its property, including its respective Shares, and to enter into and perform the
transactions contemplated hereby.

          SECTION 3.3. Non-Contravention. The execution and delivery by each Holder of this
Agreement and the consummation of the transactions contemplated hereby will not (a) violate or
conflict with any provision of the organizational documents of such Holder, each as amended to
date, (b) constitute a violation of, or be in conflict with, constitute or create a default under,
or result in the creation or imposition of any lien upon any property of such Holder pursuant to
(i) any agreement or instrument to which such  Holder is a party or by which such Holder or any of
its properties are bound or subject, or (ii) any statute, judgment, decree, order, regulation or
rule of any court or governmental authority to which such Holder is subject.

          SECTION
3.4. Approval; Binding Effect. Each Holder has obtained all corporate and
other approvals necessary for the execution and delivery of this Agreement and for the
consummation of the transactions contemplated hereby. This Agreement has been duly executed and
delivered by each Holder and constitutes the legal, valid and binding obligation of such Holder,
enforceable against such Holder in accordance with its terms, except
to the extent such
enforceability is subject to the effect of any applicable bankruptcy, insolvency, reorganization,
moratorium or other law affecting or relating to creditors’ rights generally and general
principles of equity.

          SECTION 3.5. Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder’s or other fee or commission in connection with the transactions contemplated
by this Agreement based upon any arrangement made by or on behalf of each Holder.

          SECTION 3.6. Governmental Consents. No consent, approval or authorization of, or
registration, qualification or filing with, any governmental agency or authority is required for
the execution and delivery by each Holder of this Agreement or the consummation of the
transactions contemplated hereby.

          SECTION 3.7. Investment Purpose. Each Holder is acquiring the A-Units for its own
account, for investment only and not with a view toward the resale or distribution thereof.

     ARTICLE
4. Representations and Warranties of ARI. In connection with the
transactions contemplated by this Agreement, ARI represents and warrants as follows;

          SECTION 4.1 Organization: Authority. ARI is duly organized and existing in good
standing in its jurisdiction of incorporation, and is duly qualified as a foreign corporation and
authorized to do business in all other jurisdictions in which the nature of its business or
property makes such qualification necessary, except where the

3

 

failure to so qualify would not have a material adverse effect on the business, properties,
financial position or results of operations of ARI. ARI has the corporate power to own its
properties and to carry on its business as now conducted and to enter into and perform the
transactions contemplated hereby.

          SECTION 4.2 Non-Contravention. The execution, delivery and performance by ARI of this
Agreement and the consummation of the transactions contemplated hereby, (i) are within ARI’s
corporate power and authority, (ii) have been duly authorized by all necessary corporate
proceedings, (iii) do not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other material agreement or instrument to which ARI is a party or by which ARI is
bound or to which any of the properties or assets of ARI is subject, nor will such actions result
in any violation of the provisions of the organizational documents of ARI or any statue or any
order, rule, regulation or writ of any court or governmental agency or body having proper
jurisdiction over ARI or any of its properties or assets (except for such statutes, orders, rules,
regulations or writs the violation of which would not have a material adverse effect on the
business, properties, financial positions or results of operations of ARI), and (iv) will not
result in the creation or imposition of any lien upon any property of ARI pursuant to the
terms of any agreement or instrument to which ARI is bound or to which any of the properties or
assets of ARI is subject.

          SECTION 4.3 Enforceability. The execution and delivery by ARI of this Agreement will
result in legally binding obligations of ARI, enforceable against it in accordance with the terms
and provisions hereof, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization and other similar laws affecting creditors’ rights generally, and by general
principles of equity (regardless of whether            considered in a proceeding in equity or at
law).

          SECTION 4.4 Governmental Consents. No consent, approval or authorization of, or
registration, qualification or filing with, any governmental agency
or authority is required
for the execution and delivery by ARI of this Agreement or the consummation of the transactions
contemplated hereby.

          SECTION
4.5 Title. ARI is the sole record and beneficial owner of, and has good
legal title to, the A-Units, and has the full legal right, power and authority to assign and
transfer complete ownership in the A-Units to the Holders. The A-Units are and upon the
effectiveness of the assignment and transfer will be, free and clear of all liens, claims,
restrictions, encumbrances, charges, options or rights of third parties with
respect thereto.

     ARTICLE 5. Representations and Warranties of ARL. In connection with the
transactions contemplated by this Agreement, ARL represents and warrants as follows:

4

 

          SECTION
5.1 Organization; Authority. ARL is duly organized and existing in good
standing in its jurisdiction of organization, and is duly qualified as a foreign organization and
authorized to do business in all other jurisdictions in which the nature of its business or
property makes such qualification necessary, except where the failure to so qualify would not have
a material adverse effect on the business, properties, financial position or results of operations
of ARL. ARL has the limited liability power to own its properties and to carry on its business as
now conducted and to enter into and perform the transactions contemplated hereby.

          SECTION 5.2 Non-Contravention. The execution, delivery and performance by ARL of this
Agreement and the consummation of the transactions contemplated hereby, (i) are within ARL’s power
and authority, (ii) have been duly authorized by all necessary corporate proceedings, (iii) do not
conflict with or result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other
material agreement or instrument to which ARL is a party or by which ARL is bound or to which any
of the properties or assets of ARL is subject, nor will such actions result in any violation of the
provisions of the organizational documents of ARL or any statue or any order, rule, regulation or
writ of any court or governmental agency or body having proper jurisdiction over ARI or any of its
properties or assets (except for such statutes, orders, rules, regulations or writs the violation
of which would not have a material adverse effect on the business, properties, financial positions
or results of operations of ARL), and (iv) will not result in the creation or imposition of any
lien upon any property of ARL pursuant to the terms of any agreement or instrument to which ARL is
bound or to which any of the properties or assets of ARL is subject.

          SECTION 5.3 Enforceability. The execution and delivery by ARL of this Agreement will
result in legally binding obligations of ARL, enforceable against it in accordance with the terms
and provisions hereof, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization and other similar laws affecting creditors’ rights generally, and by general
principles of equity (regardless of whether considered in a proceeding in equity or at law).

          SECTION 5.4 Governmental Consents. No consent, approval or authorization of, or
registration, qualification or filing with, any governmental agency or authority is required for
the execution and delivery by ARL of this Agreement or the consummation of the transactions
contemplated hereby.

          SECTION 5.5 No Proceedings. There are no legal or governmental proceedings to which
ARL is a party or to which any property or assets of ARL is subject which would reasonably be
expected to have a material adverse effect on the business,

5

 

properties, financial position or results of operations of ARL, and to ARL’s best
knowledge, no such proceedings are threatened or contemplated.

    ARTICLE 6. Indemnity.

          SECTION 6.1. ARI shall defend, indemnify, save and hold harmless each Holder and ARL from
and against all liabilities, losses, claims, demands, suits, costs, expenses and damages of every
kind and character, including, without limitation, attorneys’ fees, court costs, and costs of
investigation, which arise from or in connection with in any way a breach by ARI of its
representations and warranties contained in this Agreement or other breach of this Agreement by
ARI.

          SECTION 6.2. Each Holder shall severally and not jointly defend, indemnify, save and hold
harmless ARI and ARL from and against all liabilities, losses, claims, demands, suits, costs,
expenses and damages of every kind and character, including, without limitation, attorneys’ fees,
court costs, and costs of investigation, which arise from or in connection with in any way a
breach by such Holder of its respective representations and warranties contained in this
Agreement or other breach of this Agreement by such Holder.

          SECTION 6.3. ARL shall defend, indemnify, save and hold harmless ARI and each Holder from and
against all liabilities, losses, claims, demands, suits, costs, expenses and damages of every kind
and character, including, without limitation, attorneys’ fees, court costs, and costs of
investigation, which arise from or in connection with in any way a breach by ARL of its
representations and warranties contained in this Agreement or other breach of this Agreement by
ARL.

     ARTICLE 7. Miscellaneous.

          SECTION
7.1. Assignment; Successors and Assigns. The provisions of this
Agreement shall be binding upon, and inure to the benefit of, the respective
successors, assigns, heirs, executors and administrators of the parties hereto.

          SECTION 7.2. Survival of Representations and Warranties. All
indemnities, covenants, representations and warranties contained herein shall
survive the execution and delivery of this Agreement and me closing of the
transactions contemplated hereby.

          SECTION 7.3. Expenses. Each party to this Agreement shall bear its own
costs and expenses, including, but not limited to, attorneys’ fees and expenses, in
connection with the closing of the transactions contemplated hereby.

          SECTION 7.4. Entire Agreement. This Agreement, together with the instruments and
other documents contemplated to be executed and delivered in connection

6

 

herewith, contains the entire agreement and understanding of the parties hereto, and
supersedes any prior agreements or understandings between or among them, with respect to the
subject matter hereof.

          SECTION 7.5. Amendments and Waivers.. This Agreement may not be amended or waived
(either generally or in a particular instance and either retroactively or prospectively) except by
a written instrument signed by the party against whom enforcement of such amendment, modification
or waiver is sought. No waivers of or exceptions to any; term, condition or provision of this
Agreement, in any one or more instances, shall be deemed to be, or construed as, a further or
continuing waiver of any such term, condition or provision.

          SECTION 7.6. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed an original, but all of which together shall constitute one and the
same instrument

          SECTION
7.7. Captions. The captions of the sections, subsections and paragraphs of
this Agreement have been added for convenience only and shall not be deemed to be a part of this
Agreement.

          SECTION 7.8. Governing Law. This Agreement shall be governed by and interpreted and
construed in accordance with the laws of the State of New York without regard to the conflict of
law principles thereof.

          SECTION 7.9. Further Assurances. The parties hereto hereby agree to take such
further action and execute and deliver such farther documents and instruments as may be
necessary or appropriate to effect the transactions, assignments, transfers and conveyances
contemplated in this Agreement.

[signature page follows]

7

 

     IN
WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement
effective as of the date and time first above written.

	 	 	 	 	 
	AMERICAN RAILCAR INDUSTRIES, INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/ James J. Unger	 	 
	 

	 	 	 	 
	 

	 	Name: James J. Unger	 	 
	 

	 	Title: President and Chief Executive Officer
	 	 
	 
	 	 	 	 
	HOPPER INVESTMENTS, LLC	 	 
	By: Barberry Corp.	 	 
	 
	 	 	 	 
	By:

	 	/s/ Edward E. Mattner	 	 
	 

	 	 	 	 
	 

	 	Name: Edward E. Mattner	 	 
	 

	 	Title: Authorized Signatory	 	 
	 
	 	 	 	 
	HIGHCREST INVESTORS CORP,	 	 
	 
	 	 	 	 
	By:

	 	/s/ Edward E. Mattner	 	 
	 

	 	 	 	 
	 

	 	Name: Edward E. Mattner	 	 
	 

	 	Title: Authorized Signatory	 	 
	 
	 	 	 	 
	BUFFALO INVESTORS
CORP.	 	 
	 
	 	 	 	 
	By:

	 	/s/ Edward E. Mattner	 	 
	 

	 	 	 	 
	 
	 

	 	Name: Edward E. Mattner	 	 
	 

	 	Title: President and Treasurer	 	 

 

 

	 	 	 	 	 
	AMERICAN RAILCAR LEASING, LLC	 	 
	By: American Railcar Industries, Inc.	 	 
	 
	 	 	 	 
	By:

	 	/s/ James J. Unger	 	 
	 

	 	 	 	 
	 

	 	Name: James J. Unger	 	 
	 

	 	Title: President and Chief Executive Officer	 	 
	 
	 	 	 	 
	Acknowledged and consented to by.	 	 
	 
	 	 	 	 
	AMERICAN RAILCAR INDUSTRIES, INC,	 	 
	as Managing Member of ARL	 	 
	 
	 	 	 	 
	By:

	 	/s/ James J. Unger	 	 
	 

	 	 	 	 
	 

	 	Name: James J. Unger	 	 
	 

	 	Title: President and Chief Executive OfficerEX-10.16

 

 

 

Exhibit 10.16

LOAN AND SECURITY AGREEMENT

among

AMERICAN RAILCAR INDUSTRIES, INC.

as Borrower,

the
Lenders from time to time party there to,

and

NORTH FORK BUSINESS CAPITAL CORPORATION,

as Agent

Dated as of March 10,2005

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	ARTICLE I. DEFINITIONS
	 	 	1	 
	 
	 	 	 	 
	SECTION 1.1 General Definitions
	 	 	1	 
	SECTION 1.2 Accounting Terms and Determinations
	 	 	16	 
	SECTION 1.3 Other Terms; Headings
	 	 	16	 
	 
	 	 	 	 
	ARTICLE II. THE CREDIT FACILITIES
	 	 	17	 
	 
	 	 	 	 
	SECTION 2.1 The Revolving Credit Loans
	 	 	17	 
	SECTION 2.2 Procedure for Borrowing; Notices of Borrowing; Notices of
Continuation; Notices of Conversion; Settlement
	 	 	18	 
	SECTION 2.3 Application of Proceeds
	 	 	22	 
	SECTION 2.4 Maximum Amount of the Facility; Mandatory Prepayments;
Optional Prepayments
	 	 	23	 
	SECTION 2.5 Maintenance of Loan Account; Statements of Account
	 	 	23	 
	SECTION 2.6 Collection of Receivables
	 	 	23	 
	SECTION 2.7 Term
	 	 	24	 
	SECTION 2.8 Payment Procedures
	 	 	24	 
	SECTION 2. 9 Defaulting Lenders
	 	 	25	 
	SECTION 2.10
Sharing of Payments, Etc
	 	 	26	 
	SECTION 2.11 Publicity
	 	 	26	 
	 
	 	 	 	 
	ARTICLE III. SECURITY
	 	 	27	 
	 
	 	 	 	 
	SECTION 3.1 General
	 	 	27	 
	SECTION 3.2 Recourse to Security
	 	 	27	 
	SECTION 3.3 Special Provisions Relating to Inventory
	 	 	27	 
	SECTION 3.4 Special Provisions Relating to Receivables
	 	 	28	 
	SECTION 3.5
Continuation of Liens, Etc
	 	 	29	 
	SECTION 3.6 Power of Attorney
	 	 	29	 
	 
	 	 	 	 
	ARTICLE IV. INTEREST, FEES AND EXPENSES
	 	 	30	 
	 
	 	 	 	 
	SECTION 4.1 Interest
	 	 	30	 
	SECTION 4.2 Interest After Event of Default
	 	 	30	 
	SECTION 4.3 Closing Fee
	 	 	30	 
	SECTION 4.4 Unused Line Fee
	 	 	30	 
	SECTION 4.5 Calculations
	 	 	30	 
	SECTION 4.6 Indemnification in Certain Events
	 	 	30	 
	SECTION 4.7 Taxes
	 	 	31	 

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	 	 	Page
	ARTICLE V. CONDITIONS OF LENDING
	 	 	33	 
	 
	 	 	 	 
	SECTION 5.1 Conditions to Initial Loan
	 	 	33	 
	SECTION 5.2 Conditions Precedent to Each Loan
	 	 	36	 
	 
	 	 	 	 
	ARTICLE VI. REPRESENTATIONS AND WARRANTIES
	 	 	36	 
	 
	 	 	 	 
	SECTION 6.1 Representations and Warranties of the Borrower;
Reliance by the Lenders
	 	 	36	 
	 
	 	 	 	 
	ARTICLE VII. COVENANTS OF THE BORROWER
	 	 	42	 
	 
	 	 	 	 
	SECTION 7.1 Affirmative Covenants
	 	 	42	 
	SECTION 7.2 Negative Covenants
	 	 	48	 
	 
	 	 	 	 
	ARTICLE VIII. FINANCIAL COVENANTS
	 	 	49	 
	 
	 	 	 	 
	SECTION 8.1 Fixed Charge Coverage Ratio
	 	 	49	 
	SECTION 8.2 Leverage Ratio
	 	 	49	 
	SECTION 8.3 Business Plan 
	 	 	49	 
	 
	 	 	 	 
	ARTICLE IX. EVENTS OF DEFAULT
	 	 	50	 
	 
	 	 	 	 
	SECTION 9.1 Events of Default
	 	 	50	 
	SECTION 9.2 Acceleration, Termination and Demand Rights
	 	 	51	 
	SECTION 9.3 Other Remedies
	 	 	54	 
	SECTION 9.4 License for Use of Software and Other Intellectual Property
	 	 	55	 
	SECTION 9.5 No Marshalling; Deficiencies; Remedies Cumulative
	 	 	55	 
	SECTION 9.6 Waivers
	 	 	56	 
	SECTION 9.7 Further Rights of the Agent
	 	 	56	 
	SECTION 9.8 Interest After Event of Default
	 	 	56	 
	 
	 	 	 	 
	ARTICLE X. THE AGENT
	 	 	57	 
	 
	 	 	 	 
	SECTION 10.1 Appointment of Agent
	 	 	57	 
	SECTION 10.2 Nature of Duties of Agent
	 	 	57	 
	SECTION 10.3 Lack of Reliance on Agent
	 	 	57	 
	SECTION 10.4 Certain Rights of the Agent
	 	 	58	 
	SECTION 10.5 Reliance by Agent
	 	 	58	 
	SECTION 10.6 Indemnification of Agent
	 	 	58	 
	SECTION 10.7 The Agent in Its Individual Capacity
	 	 	58	 
	SECTION 10.8 Holders of Notes
	 	 	58	 
	SECTION 10.9 Successor Agent
	 	 	59	 
	SECTION 10.10 Collateral Matters
	 	 	59	 
	SECTION 10.11 Actions with Respect to Defaults
	 	 	60	 
	SECTION 10.12 Delivery of Information
	 	 	60	 

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	 	 	Page
	ARTICLE XI. GENERAL PROVISIONS
	 	 	60	 
	 
	 	 	 	 
	SECTION 11.1 Notices
	 	 	60	 
	SECTION 11.2 Delays; Partial Exercise of Remedies
	 	 	61	 
	SECTION 11.3 Right of Setoff
	 	 	61	 
	SECTION 11.4 Indemnification; Reimbursement of
Expenses of Collection
	 	 	61	 
	SECTION 11.5 Amendments, Waivers and Consents
	 	 	62	 
	SECTION 11.6 Nonliability of Agent and Lenders
	 	 	63	 
	SECTION 11.7 Assignments and Participations
	 	 	63	 
	SECTION 11.8 Counterparts; Telecopied Signatures
	 	 	65	 
	SECTION 11.9 Severability
	 	 	65	 
	SECTION 11.10 Maximum Rate
	 	 	65	 
	SECTION 11.11 Entire Agreement; Successors and
Assigns; Interpretation
	 	 	66	 
	SECTION 11.12 LIMITATION OF LIABILITY
	 	 	66	 
	SECTION 11.13. GOVERNING LAW
	 	 	66	 
	SECTION 11.14 SUBMISSION TO JURISDICTION
	 	 	67	 
	SECTION 11.15 SERVICE OF PROCESS
	 	 	67	 
	SECTION 11.16 JURY TRIAL
	 	 	67	 

-iii-

 

	 	 	 	 	 
	Schedules	 	 	 	 
	 	 	 	 	 
	Schedule 1

	 	 	 	Commitments of Lenders
	Schedule 2

	 	 	 	Pledged Deposit Accounts
	Schedule 6.1 (a)

	 	 	 	Foreign Jurisdictions
	Schedule 6. l(b)

	 	 	 	Locations of Collateral
	Schedule 6. 1(g)

	 	 	 	Ownership; Subsidiaries
	 
	 	 	 	 
	Exhibits
	 	 	 	 
	 
	 	 	 	 
	Exhibit A

	 	—
	 	Note
	Exhibit B

	 	—
	 	Assignment and Acceptance
	Exhibit C

	 	—
	 	Compliance Certificate
	Exhibit D

	 	—
	 	Notice of Borrowing
	Exhibit E

	 	—
	 	Notice of Continuation
	Exhibit F

	 	—
	 	Notice of Conversion
	Exhibit G

	 	—
	 	Borrowing Base Certificate
	Exhibit H

	 	—
	 	Perfection Certificate
	Exhibit I

	 	—
	 	Collateral Access Agreement

-iv-

 

LOAN AND SECURITY AGREEMENT

          LOAN AND SECURITY AGREEMENT, dated as of March 10,2005, among American Railcar
Industries, Inc., a Missouri corporation (the “Borrower”), each of the financial institutions
identified as a Lender on Schedule 1 (together with each of their respective direct and indirect
successors and assigns, each, a “Lender,” and collectively, the “Lenders”), and NORTH FORK BUSINESS
CAPITAL CORPORATION, a New York corporation (“NFBC”), as agent for the Lenders (the “Agent”).

W
I T N E S S E
T H:

          WHEREAS, the Borrower wishes to obtain a revolving credit facility; and

          WHEREAS, upon the terms and subject to the conditions set forth herein, the Lenders are
willing to make revolving loans to the Borrower in an aggregate amount not to exceed $50,000,000;

          NOW, THEREFORE, the Borrower, the Lenders and the Agent hereby agree as follows:

ARTICLE I.

DEFINITIONS

          SECTION 1.1 General Definitions. As used herein, the following terms shall
have the meanings herein specified (to be equally applicable to both the singular and plural
forms of the terms defined):

          “Advance” means a Base Rate Advance or a LIBOR Rate Advance.

          “Affiliate” means, as to any Person, any other Person who directly or indirectly controls, is
under common control with, is controlled by or is a director, officer, manager or general partner
of such Person. As used in this definition, “control” (including its correlative meanings,
“controlled by” and “under common control with”) means possession, directly or indirectly, of the
power to direct or cause the direction of management or policies (whether through ownership of
voting securities or partnership or other ownership interests, by contract or otherwise),
provided that any public company that does not conduct business in any material respect in
or with the railcar industry shall not be an Affiliate hereunder except for purposes of Section 6.1(cc). For the avoidance of doubt, a Subsidiary of the Borrower shall be deemed to be an Affiliate
of the Borrower.

          “Agent” has the meaning specified in the introductory paragraph.

          “Agent
Loan” has the meaning specified in Section 2.2(h).

 

 

          “Agent’s Payment Account” means the account of the Agent at North Fork Bank in
Melville, New York, account number 3124059415, or such other account of the Agent or any of its
Affiliates in the United States as the Agent may from time to time designate in writing to the
Borrower and the Lenders.

          “Agreement” means this Loan and Security Agreement, as amended, supplemented or
otherwise modified from time to time.

          “Assignment and Acceptance” means an assignment and acceptance entered into
by a Lender and its assignee, and accepted by the Agent, and substantially in the form of
Exhibit B.

          “Auditors” means a nationally recognized firm of independent public accountants
selected by the Borrower and reasonably satisfactory to the Agent;

          “Availability Event” means that the difference between (i) the lesser of (A) the
Borrowing Base and (B) the Maximum Amount of the Facility and (ii) the aggregate outstanding
amount of the Loans, is less than $5,000,000.

          “Bankruptcy Code” means Title 11 of the United States Code entitled
“Bankruptcy,” as that title may be amended from time to time, or any successor statute.

          “Base Rate” means the higher of (i) the highest prime, base or equivalent rate of interest
publicly announced from time to time by North Fork Bank or any successor thereto (which may not be
the lowest rate of interest charged by such bank) and (ii) the published annualized rate for
ninety-day dealer commercial paper that appears in the “Money
Rates” section of The Wall Street
Journal.

          “Base Rate Advance” means an Advance that bears interest as provided in Section
4.1 (a).

          “Blocked Account” has the meaning specified in Section 2.6.

          “Blocked Account Agreement” has the meaning specified in Section 2.6.

          “Blocked Account Bank” means Citibank, N.A., Bank of America, N.A. or U.S.
Bank National Association or any successor or any other bank acceptable to the Agent to
act as such.

          “Borrower” has the meaning specified in the introductory paragraph.

          “Borrower’s Account” means the account maintained by the Borrower at North Fork Bank
in Melville, New York or such other account as the Borrower may from time to time designate in
writing to the Agent.

          “Borrowing” has the meaning specified in Section 2.2(a).

          “Borrowing Base” has the meaning specified in Section 2.1 (a).

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          “Borrowing Base Certificate” has the meaning specified in Section
7.1 (k)(v). 

          “Borrowing
Date” means the date on which a Borrowing is
obtained.

          “Business Day” means any day other than a Saturday, a Sunday or any other day on
which commercial banks in New York, New York are required or permitted by law to close. When
used in connection with any LIBOR Rate Advance, a Business Day shall also exclude any day on
which commercial banks are not open for dealings in Dollar deposits in the London interbank
market.

          “Business Plan” means a business plan of the Borrower and its Subsidiaries,
consisting of consolidated and consolidating projected balance sheets, related cash flow
statements and related profit and loss statements, and availability forecasts, together
with appropriate supporting details and a statement of the underlying assumptions, which
covers a three-year period and which is prepared on a monthly basis for the first year
and on an annual basis thereafter and in a manner consistent with GAAP and with the
Financial Statements.

          “Capital Expenditures” means expenditures for any fixed assets or improvements,
replacements, substitutions or additions thereto or therefor which have a useful life of more
than one year, and shall include all commitments, payments in respect of Capitalized Lease
Obligations and leasehold improvements.

          “Capitalized Lease Obligations” means any rental obligation which, under GAAP,
is or will be required to be capitalized on the books of the lessee, taken at the amount
thereof
accounted for as Indebtedness (net of Interest Expense) in accordance with GAAP.

          “Cash Equivalents” means (i) securities issued, guaranteed or insured by the
United States or any of its agencies with maturities of not more than one year from the date
acquired; (ii) securities issued, guaranteed or insured by any state of the United States or
any public instrumentality thereof with maturities of not more than
one year from the date
acquired and, at the time of acquisition, having one of the three highest ratings obtainable
from either Standard & Poor’s Ratings Services or Moody’s Investors Service, Inc.; (iii) time
deposits, term deposits and certificates of deposit with maturities of not more than one year
from the date acquired, issued by (A) the Agent or any Lender or any of their respective
Affiliates, (B) any U.S. federal or state chartered commercial bank of recognized standing
which has capital and unimpaired surplus in excess of $500,000,000 or (C) any bank or its
holding company that has a short-term commercial paper rating of at least A-1 or the
equivalent by Standard & Poor’s Ratings Services or at least P-1 or the equivalent by Moody’s
Investors Service, Inc.; (iv) repurchase agreements and reverse repurchase agreements with
terms of not more than thirty days from the date acquired, for securities of the type
described in clause (i) or (ii) above and entered into only with commercial banks having the
qualifications described in clause (iii) above or such other financial institutions with a
short-term commercial paper rating of at least A-1 or the equivalent by Standard & Poor’s
Ratings Services or at least P-1 or the equivalent by Moody’s Investors Service, Inc.; (v)
commercial paper issued by any Person incorporated under the laws of the United States or any
state thereof and rated at least A-1 or the equivalent thereof by Standard & Poor’s Ratings
Services or at least P-1 or the equivalent thereof by Moody’s Investors Service, Inc., in each
case with maturities of not more than one year from the date

-3-

 

acquired; and (vi) investments in money market funds registered under the Investment Company
Act of 1940, which have net assets of at least $500,000,000 and at least eighty-five percent (85%)
of whose assets consist of securities and other obligations of the type described in clauses (i)
through (v) above.

          “Closing Date” means the date of execution and delivery of this Agreement.

          “Code” has the meaning specified in Section 1.3.

          “Collateral” means all Receivables of the Borrower (other than Excluded Receivables), all
Inventory of the Borrower and the Pledged Deposit Accounts of the Borrower.

          “Collateral Access Agreements” means a landlord waiver, mortgagee waiver,
bailee letter or similar acknowledgment of any lessor, warehouseman or processor in possession
of any Collateral or on whose property any Collateral is located, substantially in the form of
Exhibit I.

          “Collections” means all cash, funds, checks, notes, instruments, any other form of remittance
tendered by account debtors in respect of payment of Receivables of the Borrower and any other
payments received by the Borrower with respect to any Collateral.

          “Commitment” means, with respect to any Lender, its commitment to make Loans up to the
amount set forth opposite its name on Schedule 1.

          “Compliance Certificate” has the meaning specified in Section 7.1 (k)(iv).

          “Contingent Obligation” means any direct, indirect, contingent or non-contingent
guaranty or obligation for the Indebtedness of another Person, except endorsements in the ordinary
course of business.

          “Continuation” has the meaning specified in Section 2.2(b).

          “Convert.” “Conversion” and “Converted” each refers to conversion of Advances of one Type
into Advances of another Type pursuant to Section 2.2(c).

          “Default” means any of the events specified in Section 9.1, whether or not any of the
requirements for the giving of notice, the lapse of time, or both, or any other condition, has been
satisfied.

          “Defaulting Lender” has the meaning specified in Section 2.9(a).

          “Dollars” and the sign “$” means freely transferable lawful currency of the United
States.

          “EBITDA” means, for any period, with respect to the Borrower (i) net income (as
that term is determined in accordance with GAAP) for such period, plus (ii) the amount of
depreciation and amortization of fixed and intangible assets deducted in determining such net
income for such period, plus (iii) all Interest Expense arid all fees for the use of money
or the

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availability of money, including commitment, facility and like fees and charges upon Indebtedness
(including Indebtedness to the Lenders) paid or payable during such period, plus (iv) all
tax liabilities paid or accrued during such period, less (v) the; amount of all
extraordinary gains (or plus the amount of all extraordinary losses) realized during such
period including, without limitation, gains (or losses) realized upon the sale or other disposition
of property or assets that are sold or otherwise disposed of outside the ordinary course of
business, in each case, to the extent that the amount specified in clause (ii), (iii), (iv) or (v)
hereof is included in the calculation of net income for such period.

          “Eligible Assignee” means (i) a Lender or any Affiliate thereof; (ii) a commercial
bank organized or licensed under the laws of the United States or a state thereof having total
assets in excess of $500,000,000; (iii) a finance company, insurance company or other financial
institution or fund, which is regularly engaged in making, purchasing or investing in loans and
having total assets in excess of $500,000,000; or (iv) a savings
and loan association or savings
bank organized under the laws of the United States or a state thereof which has a net worth,
determined in accordance with GAAP, in excess of $500,000,000;
provided, however, that (A)
each Eligible Assignee under clauses (ii) through (iv) hereof shall be reasonably acceptable to the
Agent and, so long as no Event of Default is continuing, the Borrower and (B) nothing herein shall
restrict or require the consent of any Person to the pledge by any Lender of all or any portion of
its rights and interests under this Agreement, its Notes or any other Loan Document to any Federal
Reserve Bank in accordance with Regulation A of the Board of Governors of the Federal Reserve
System or U.S. Treasury Regulation 31 CFR 203.14, and such Federal Reserve Bank may enforce such
pledge in any manner permitted by applicable law.

          “Eligible Inventory” means only such Inventory of the Borrower located in the United
States consisting of raw materials or finished goods, which is free from any claim of title or Lien
in favor of any Person (other than Liens in favor of the Agent) and with respect to which no event
has occurred and no condition exists which could reasonably be expected to impair substantially the
Borrower’s ability to use or sell such Inventory in the ordinary course of its business. No
Inventory of the Borrower shall be Eligible Inventory unless the Agent has a perfected first
priority Lien thereon. The value of Eligible Inventory shall be computed at the lower of cost
(computed on a “first in, first out” basis) or market. Any Inventory of the Borrower that is not in
the control or possession of the Borrower and is covered by a warehouse receipt, a bill of lading
or other document of title shall in no event be Eligible Inventory unless such warehouse receipt,
bill of lading or document of title is in the name of or held by the Agent. No Inventory of the
Borrower shall be Eligible Inventory unless (i) it is located on property owned by the Borrower; or
(ii) it is located on property leased by the Borrower or in a contract warehouse (A) which is
subject to a Collateral Access Agreement executed by the mortgagee, lessor or contract
warehouseman, as the case may be, or (B) with respect to which the Agent has established a reserve
from the Borrowing Base in an amount equal to the rent or fees payable to the applicable lessor or
warehouseman for a three-month period and, in either case such Inventory is segregated or otherwise
separately identifiable from goods of others, if any, stored on the premises. No Inventory of the
Borrower shall be Eligible Inventory if it is in transit or it is consigned to or from the
Borrower. In addition, and without limitation of the foregoing, the Agent may treat any Inventory
as ineligible if:

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          (a) it is not owned solely by the Borrower or the Borrower does not have sole

and good, valid and marketable title thereto; or

          (b) it is packing or shipping materials or maintenance supplies; or

          (c) it is goods returned or rejected by the Borrower’s customer; or

          (d) it (i) is excess (as so reserved by the Borrower from time to time), (ii) is
obsolete, defective, damaged, unmerchantable or consists of an amount of Inventory in excess
of
a two-year supply, (iii) is samples or inventory on hand which is used for promotional and
other
sales activities, or (iv) does not otherwise conform to the representations and warranties
contained in the Loan Documents; or

          (e) it is repossessed, attached, seized, made subject to a writ or distress
warrant, levied upon or brought within the possession of any receiver, trustee,
custodian or
assignee for the benefit of creditors; or

          (f) it is Inventory acquired by the Borrower in or as part of (i) a “bulk”
transfer or sale of assets and such acquisition is not consummated in the ordinary course of
business unless the Borrower has complied with all applicable bulk sales or bulk transfer laws
in
connection with such acquisition or (ii) any acquisition of assets from another Person other
than
in the ordinary course of business and such Inventory is not satisfactory to the Required
Lenders
or has not been inspected by the Agent in a collateral audit examination.

          “Eligible Receivables” means and includes only those unpaid Receivables of the
Borrower, without duplication, which (i) arise out of a bona
fide sale of goods or rendition of
services of the kind ordinarily sold or rendered by the Borrower in the ordinary course of its
business, (ii) are owed by a Person competent to contract for such goods or services that is not an
Affiliate or an employee of the Borrower and is not controlled by an Affiliate of the Borrower,
(iii) are not subject to renegotiation or redating, (iv) are free and clear of any Lien in favor of
any Person other than Liens in favor of the Agent and (v) mature as stated in the invoice or other
supporting data covering such sale or services. No Receivable of the Borrower shall be an Eligible
Receivable (i) unless the Agent has a perfected first priority Lien thereon, (ii) if it is more
than ninety days past the date of the original invoice therefor or (iii) unless the delivery of the
goods or the rendition of the services giving rise to such Receivable has been completed. The Agent
may treat any Receivable as ineligible if:

          (a) any warranty contained in this Agreement or in any other Loan Document
with respect to such Receivable or in any assignment or statement of warranties or
representations relating to such Receivable delivered by the Borrower to the Agent has been
breached or is untrue in any material respect or the Borrower is not in compliance with all
applicable laws with respect to such Receivable; or

          (b) the account debtor has disputed liability, has asserted a right of setoff or
has made any claim with respect to any other Receivable due from such account debtor to the
Borrower, to the extent of the amount of such dispute or claim, or the amount of such actual
or
asserted right of setoff, as the case may be; or

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          (c) the account debtor or any of its assets is the subject of an Insolvency Event

or is reasonably likely to become the subject of an Insolvency Event; or

          (d) the account debtor has called a meeting of its creditors to obtain any
general financial accommodation; or

          (e) the account debtor is also a supplier to the Borrower, to the extent of the
aggregate amount owed by the Borrower to the account debtor; or

          (f) the sale or rendition of services is to an account debtor outside the United
States of America or Canada, unless it is on letter of credit, acceptance or other terms
reasonably
acceptable to the Required Lenders; or

          (g) twenty-five percent (25%) or more of the accounts of any account debtor
to the Borrower are unpaid more than ninety days past the date of the original invoices
therefor;
or

          (h) the amount owed by the account debtor under such Receivable and under all other
Receivables owed by such account debtor exceeds twenty percent (20%) of all Eligible
Receivables, but only to the extent of such excess; or

          (i) the account debtor is the United States of America or any department,
agency or instrumentality thereof, unless the applicable Borrower assigns its right to payment
under such Receivable to the Agent as collateral hereunder in full compliance with (including,
without limitation, the filing of a written notice of the assignment and a copy of the
assignment
with, and receipt of acknowledgment thereof by, the appropriate contracting and
disbursing offices pursuant to) the Assignment of Claims Act of 1940, as amended
(U.S.C. § 3727; 41 U.S.C. § 15); or

          (j) it was acquired by the Borrower in or as part of an acquisition of
assets from another Person and such Receivable is not satisfactory to the Required
Lenders or has not been reviewed by the Agent in a collateral examination audit.

          “Environmental Laws” means all federal, state and local statutes, laws (including common
or case law), regulations or orders applicable to the business or property of a Person
relating to pollution or protection of human health or the environment (including, without
limitation, ambient air, surface water, ground water, land surface or subsurface strata)
including, without limitation, laws and regulations relating to emissions, discharges,
releases or threatened releases of Hazardous Materials, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal, transport or
handling of any Hazardous Materials.

          “Equipment” means all machinery, equipment, furniture, fixtures,
leasehold
improvements, conveyors, tools, materials, storage and handling equipment, hydraulic
presses, cutting equipment, computer equipment and hardware, including central processing
units, terminals, drives, memory units, embedded computer programs and supporting
information, printers, keyboards, screens, peripherals and input or output devices,
molds, dies, stamps, and other equipment of every kind and nature and wherever situated
now or hereafter owned by a person or in which a Person may have any interest as lessee
or otherwise (to the extent of such

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interest), together with all additions and accessions thereto, all replacements and all
accessories and parts therefor, all manuals, blueprints, know-how, warranties and records in
connection therewith and all rights against suppliers, warrantors, manufacturers, and sellers or
others in connection therewith, together with all substitutes for any of the foregoing.

          “ERISA” means the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1000 et
seq., amendments thereto, successor statutes, and regulations or guidelines promulgated
thereunder.

          “ERISA Affiliate” means any entity required to be aggregated with the Borrower under Section
414(b), (c), (m) or (o) of the Internal Revenue Code.

          “Event of Default” means the occurrence of any of the events specified in Section 9.1.

          “Excluded Receivables” means Receivables (i) with respect to which the account
debtors are Affiliates of the Borrower and (ii) that do not arise from the sale of Inventory.

          “Expiration Date” means the earlier of (i) March 10, 2006 and (ii) the date of termination
of the Commitments.

          “Federal Funds Rate” means, for any period, a fluctuating interest rate per annum
equal, for each day during such period, to the weighted average of the rates on overnight
Federal Funds transactions with members of the Federal Reserve System arranged by Federal Funds
brokers, as published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal Funds brokers of recognized standing
selected by it.

          “Federal Reserve Board” means the Board of Governors of the Federal Reserve
System or any Person succeeding to the functions thereof.

          “Financial Covenants” means the covenants set forth in Article VIII.

          “Financial Statements” means, with respect to the Borrower and its Subsidiaries,
the balance sheets, profit and loss statements, statements of cash flow, and statements of
changes in intercompany accounts, if any, for the period specified, prepared in accordance with
GAAP and consistent with prior practices applied to the Borrower’s financial statements.

          “Fixed Charge Coverage Ratio” means (without duplication), for any period, with
respect to the Borrower, as of the date of determination thereof, the ratio of (X) (i) EBITDA for
such period, less (ii) all Capital Expenditures (other than (A) Capital Expenditures
financed by Persons other than the Lenders and (B) Capital Expenditures, not to exceed $10,000,000
in the aggregate for all periods, relating to the construction of a “paint line at the Borrower’s
facility in Paragould, Arkansas and for which the Borrower shall thereafter seek financing
from Persons other than the Lenders) paid or payable during such period, less (iii) all tax
liabilities paid during such period to (Y) (i) all scheduled principal amounts of Indebtedness paid
or scheduled to be paid during such period, plus (ii) all Interest Expense and all fees for
the use of money or the

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availability of money, including commitment, facility and like fees and charges upon
Indebtedness (including Indebtedness to the Lenders) paid or payable during such period,
plus
(iii) without limitation of Section 7.2(d) or 9.2, all
loans and Investments to any Person
(including, without limitation, any Affiliate of the Borrower) made during such period
plus  (iv) without limitation of Section 9.2, all dividends, stock repurchases or other
distributions paid
or payable in cash on account of the Borrower’s capital stock or other equity interests during

such period.

          “GAAP” means generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting Standards Board that are
applicable to the circumstances as of the date of determination.

          “Governing Documents” means, with respect to any Person, the certificate of
incorporation and bylaws or similar organizational documents of such Person.

          “Governmental
Authority” means any nation or government, any state or other political
subdivision thereof or any entity exercising executive, legislative, judicial, regulatory or
administrative functions thereof or pertaining thereto.

          “Hazardous Materials” means any and all pollutants, contaminants and toxic, caustic,
radioactive and hazardous materials, substances and wastes including, without limitation,
petroleum or petroleum distillates, asbestos or urea formaldehyde foam insulation or
asbestos-containing materials, whether or not friable, polychlorinated biphenyls, radon gas,
infectious or medical wastes and all other substances or wastes of any nature, that are regulated
under any Environmental Laws.

          “Hedging Agreement” means any interest rate protection agreement, foreign
currency exchange agreement, commodity price protection agreement or other interest or
currency exchange rate or commodity price hedging agreement.

          “Indebtedness” means, with respect to the Borrower or any other Person, as of the date of
determination thereof (without duplication), (i) all obligations  of such Person for borrowed money
of any kind or nature, including funded and unfunded debt, and any Hedging Agreements or
arrangements therefor, regardless of whether the same is evidenced by any note, debenture, bond or
other instrument, (ii) all obligations of such Person to pay the deferred purchase price of
property or services (other than current trade accounts payable under normal trade terms and which
arise in the ordinary course of business), (iii) all obligations of such Person to acquire or for
the acquisition or use of any fixed asset, including Capitalized Lease Obligations (other than, in
any such case, any portion thereof representing interest or deemed interest or payments in respect
of taxes, insurance, maintenance or service), or improvements which are payable over a period
longer than one year, regardless of the term thereof or the person or Persons to whom the same are
payable, (iv) the then outstanding amount of withdrawal or termination liability incurred by or
imposed on the Borrower or its Subsidiaries under ERISA, (v) all Indebtedness of others secured by
(or for which the holder of such Indebtedness has an existing right to be secured) a Lien on any
asset of such Person whether or not the Indebtedness is assumed by such Person, provided
that, for the purpose of determining the amount of

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Indebtedness of the type described in this clause (v), if recourse with respect to such
Indebtedness is limited to the assets of such Person, then the amount of Indebtedness shall be
limited to the fair market value of such assets, (vi) all Indebtedness of others to the extent
guaranteed by such Person and (vii) all obligations of such Person in respect of letters of credit,
bankers acceptances or similar instruments issued or accepted by banks or other financial
institutions for the account of such Person. For the avoidance of doubt, (A) Indebtedness as
defined herein shall include all Indebtedness of a Person owing to an Affiliate of such Person and
(B) obligations of a Person under an Operating Lease shall not constitute Indebtedness.

          “Insolvency Event” means, with respect to any Person, the occurrence of any of the following:
(i) such Person shall be adjudicated insolvent or bankrupt or institutes proceedings to be
adjudicated insolvent or bankrupt, or shall generally fail to pay or admit in writing its inability
to pay its debts as they become due, (ii) such Person shall seek dissolution or reorganization or
the appointment of a receiver, trustee, custodian or liquidator for it or a substantial portion of
its property, assets or business or to effect a plan or other arrangement with its creditors, (iii)
such Person shall make a general assignment for the benefit of its creditors, or consent to or
acquiesce in the appointment of a receiver, trustee, custodian or liquidator for a substantial
portion of its property, assets or business, (iv) such Person shall file a voluntary petition under
any bankruptcy, insolvency or similar law, (v) such Person shall take any corporate or similar act
in furtherance of any of the foregoing, or (vi) such Person, of a substantial portion of its
property, assets or business, shall become the subject of an involuntary proceeding or petition for
(A) its dissolution or reorganization or (B) the appointment of a receiver, trustee, custodian or
liquidator, and (I) such proceeding shall not be dismissed or stayed within ninety days or (II)
such receiver, trustee, custodian or liquidator shall be appointed; provided, however, that
the Lender shall have no obligation to make any Advance during the pendency of any ninety-day
period described in clauses (A) and (B).

          “Interest Expense” means, for any period, all interest with respect to Indebtedness
(including, without limitation, the interest component of Capitalized Lease Obligations) accrued or
capitalized during such period (whether or not actually paid during such period) determined in
accordance with GAAP.

          “Interest Period” means the period commencing on the date of a LIBOR Rate , Advance and ending
one, two or three months thereafter; provided, however, that (i) the Borrower may not
select any Interest Period that ends after the Expiration Date; (ii) whenever the last day of an
Interest Period would otherwise occur on a day other than a Business Day, the last day of such
Interest Period shall be extended to occur on the next succeeding Business Day, except that, if
such extension would cause the last day of such Interest Period to occur in the next following
calendar month, then the last day of such Interest Period shall occur on the next preceding
Business Day; and (iii) if there is no corresponding date of the month that is one, two or three
months, as the case may be, after the first day of an Interest period, such Interest Period shall
end on the last Business Day of such first, second or third month, as the case may be.

          “Internal Revenue Code” means the Internal Revenue Code of 1986, any
amendments thereto, any successor statute and any regulations and guidelines promulgated
thereunder.

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          “Internal Revenue Service” or “IRS” means the United States Internal Revenue
Service and any successor agency.

          “Inventory” means all present and future goods intended for sale, lease or other disposition
including, without limitation, all raw materials, work in process, finished goods and other retail
inventory, goods in the possession of outside processors or other third parties, consigned goods
(to the extent of the consignee’s interest therein), materials and supplies of any kind, nature or
description which are or might be used in connection with the manufacture, packing, shipping,
advertising, selling or finishing of any such goods, all documents of title or documents
representing the same and all records, files and writings with respect thereto.

          “Investment” in any Person means, as of the date of determination thereof, (i) any payment or
contribution, or commitment to make a payment or contribution, by a Person including, without
limitation, property contributed or committed to be contributed by such Person for or in connection
with its acquisition of any stock, bonds, notes, debentures, partnership or other ownership
interest or any other security of the Person in whom such Investment is made or (ii) any loan,
advance or other extension of credit or guaranty of or other surety obligation for any Indebtedness
of such Person in whom the Investment is made. In determining the aggregate amount of Investments
outstanding at any particular time, (i) a guaranty (or other surety obligation) shall be valued at
not less than the principal outstanding amount of the primary obligation; (ii) returns of capital
(but only by repurchase, redemption, retirement, repayment, liquidating dividend or liquidating
distribution) shall be deducted; (iii) earnings, whether as dividends, interest or otherwise, shall
not be deducted; and (iv) decreases in the market value shall not be deducted unless such decreases
are computed in accordance with GAAP.

          “Lender” or “Lenders” has the meaning specified in the introductory paragraph and shall
include the Agent with respect to any Agent Loan.

          “Liabilities” of a Person as of the date of determination thereof means the
liabilities of such Person on such date as determined in accordance with GAAP. Liabilities to
Affiliates of such Person shall be treated in accordance with GAAP or as otherwise provided
herein.

          “LIBOR Rate” means, with respect to each Interest Period, the reserve adjusted rate per
annum equal to the one, two or three-month London Interbank Offered Rate, as applicable, that
appears in the “Money Rates” section of The Wall Streel Journal on the first day of such Interest
Period; provided, however, that if The Wall Street Journal no longer publishes such one,
two or three-month London Interbank Offered Rate, reference shall be made to the Dow Jones Market
Service (formerly Telerate) page 3750 for such London Interbank Offered Rate.

          “LIBOR Rate Advance” means an Advance that bears interest as provided in Section
4. 1(b).

          “Lien” means any lien, claim, charge, pledge, security interest, assignment,
hypothecation, deed of trust, mortgage, lease, conditional sale, retention of title or other

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preferential arrangement having substantially the same economic effect as any of the foregoing,
whether voluntary or imposed by law.

          “Loan Account” has the meaning specified in Section 2.5.

          “Loan Documents” means this Agreement and all documents and instruments executed and
delivered by the Borrower under or in connection with this Agreement, as each of the same may be
amended, supplemented or otherwise modified from time to time, including, without limitation, the
Notes and the Blocked Account Agreements.

          “Loans” means the Revolving Credit Loans and the Agent Loans.

          “Material Adverse Effect” means (i) a material adverse effect on the business,
prospects, operations, results of operations, assets, liabilities or condition (financial or
otherwise) of the Borrower, (ii) the impairment of (A) the Borrower’s ability to perform in any
material respect its obligations under the Loan Documents to which it is a party or (B) the ability
of the Agent or the Lenders to enforce the Obligations or realize upon the Collateral or (iii) a
material adverse effect on the value of the Collateral or the amount that the Agent or the Lenders
would be likely to receive (after giving consideration to delays in payment and costs of
enforcement) in the liquidation of the Collateral; provided, however, that (A) a material
adverse change in (I) the global, United States or regional economy generally, (II) railcar
manufacturing or leasing conditions generally or (III) global or United States securities markets,
(B) a change in laws, rules or regulations applicable to the Borrower or its business or (C) a
change caused by any announcement of the transactions contemplated by this Agreement shall not, in
and of itself, be deemed to have a Material Adverse Effect.

          “Material Indebtedness” means Indebtedness (other than the Loans), or obligations in
respect of one or more Hedging Agreements, of the Borrower in an aggregate principal amount
exceeding $20,000,000. For purposes of this definition, the “principal amount” of the obligations
of the Borrower in respect of any Hedging Agreement at any time shall be the maximum aggregate
amount (giving effect to any netting agreements) that the Borrower would be required to pay if such
Hedging Agreement were terminated at such time.

          “Maximum
Amount of the Facility” means Fifty Million Dollars ($50,000,000).

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

          “NFBC” has the meaning specified in the introductory paragraph.

          “Notes” has the meaning specified in Section 2. l(c).

          “Obligations” means and includes all loans (including the Loans), advances (including the
Advances), debts, liabilities, obligations, covenants and duties owing by the Borrower to the Agent
or the Lenders of any kind or nature, present or future, whether or not evidenced by any note,
guaranty or other instrument, which may arise under, out of, or in connection with, this Agreement,
the Notes, the other Loan Documents or any other agreement

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executed in connection herewith or therewith, whether or not for the payment of money,
whether arising by reason of an extension of credit, opening, guaranteeing or confirming of a
letter of credit, loan, guaranty, indemnification or in any other manner, whether direct or
indirect (including those acquired by assignment, purchase, discount or otherwise), whether
absolute or contingent, due or to become due, and however acquired. The term includes, without
limitation, all Loans made in excess of the Borrowing Base or of the
Maximum Amount of the
Facility and all interest (including interest accruing on or after an Insolvency Event, whether or
not such interest constitutes an allowed claim), charges, expenses, commitment, facility, closing
and collateral management fees, attorneys’ fees, and any other sum properly chargeable to the
Borrower under this Agreement, the Notes, the other Loan Documents or any other agreement executed
in connection herewith or therewith.

          “Operating Lease” means a lease treated as an operating lease in accordance with GAAP.

          “PBGC” means the Pension Benefit Guaranty Corporation and any Person
succeeding to the functions thereof.

          “Pension Plan” means a pension plan (as defined in Section 3(2) of ERISA) subject to
Title IV of ERISA (other than a Multiemployer Plan) which the Borrower or any ERISA Affiliate
sponsors or maintains, or to which it makes, is making, or is obligated to make contributions, or,
in the case of a multiple employer plan (as described in Section 4064(a) of ERISA), has made
contributions at any time during the immediately preceding five plan years.

          “Permitted Liens” means such of the following as to which no enforcement,
collection, execution, levy or foreclosure proceeding shall have been commenced and be
continuing (unless such enforcement, collection, levy or foreclosure is being contested by the
Borrower in good faith by appropriate proceedings diligently conducted and for which adequate
reserves are being maintained in accordance with GAAP): (i) Liens for taxes, assessments and
other governmental charges or levies or the claims or demands of landlords, carriers,
warehousemen, mechanics, laborers, materialmen and other like Persons arising by operation of
law in the ordinary course of business for sums which are not yet due and payable, (ii)
deposits
or pledges (other than Liens on Collateral) to secure the payment of worker’s compensation,
unemployment insurance or other social security benefits or obligations, public or statutory
obligations, surety or appeal bonds, bid or performance bonds, or other obligations of a like
nature incurred in the ordinary course of business, (iii) zoning restrictions, easements,
encroachments, licenses, restrictions or covenants on the use of any Property which do not
materially impair either the use of such Property in the operation of the business of the
Borrower
or the value of such Property, (iv) inchoate Liens arising under ERISA to secure current
service
pension liabilities as they are incurred under the provisions of employee benefit plans from
time
to time in effect, and (v) rights of general application reserved to or vested in any
Governmental
Authority to control or regulate any Property, or to use any Property in a manner which does
not
materially impair the use of such Property for the purposes for which it is held by the
Borrower,
provided that the foregoing Liens under clauses (i) through (v) hereof do not secure
liabilities in
excess of $5,000,000 in the aggregate at any time, and provided, further that
Permitted Liens
shall not include any Lien securing Indebtedness.

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          “Person” means any individual, sole proprietorship, partnership, limited liability
company, joint venture, trust, unincorporated organization, joint stock company, association,
 corporation, institution, entity, party or government (including any division, agency or
department thereof) or any other legal entity, whether acting in an individual, fiduciary or
other capacity, and, as applicable, the successors, heirs and assigns of each. For the
avoidance of doubt, a Subsidiary or other Affiliate of the Borrower shall constitute a
separate Person.

          “Plan” means any employee benefit plan, as defined in Section 3(3) of ERISA, maintained
or contributed to by the Borrower or any Subsidiary (other than a Multiemployer Plan) or with
respect to which any of them may incur liability even if such plan is not covered by ERISA
pursuant to Section 4(b)(4) thereof.

          “Pledged Deposit Accounts” means the deposit accounts specified in Schedule 2,
any other Blocked Accounts and any other deposit account of the Borrower in which any
proceeds of any Collateral are on deposit from time to time.

          “Prohibited
Transaction” means a prohibited transaction Within the meaning of
Section 406 of ERISA or Section 4975 of the Internal Revenue Code for which a statutory or
class exemption is not available or a private exemption has not previously been obtained from
the Department of Labor.

          “Property” means any real property owned, leased or controlled by the Borrower.

           “Pro Rata Share” of any amount means, with respect to any Lender, a fraction
(expressed as a percentage) (i) at any time before the Expiration Date, the numerator of
which is the Commitment of such Lender and the denominator of which is the aggregate amount
of the Commitments of all the Lenders, and (ii) at any time on and after the Expiration Date,
the numerator of which is the aggregate unpaid principal amount of the Revolving Credit Loans
made by such Lender and the denominator of which is the aggregate unpaid principal amount of
all Revolving Credit Loans, at such time.

          “Qualification” or “Qualified” means, with respect to any report of independent public
accountants covering Financial Statements, a material qualification to such report (i)
resulting from a limitation on the scope of examination of such Financial Statements or the
underlying data, (ii) as to the capability of the Borrower to continue operations as a going
concern or (iii) which could be eliminated by changes in Financial Statements or notes
thereto covered by such report (such as by the creation of or increase in a reserve or a
decrease in the carrying value of assets) and which if so eliminated by the making of any
such change and after giving effect thereto would result in a Default
or an Event of Default.

          “Receivables”
means all present and future accounts, leases, instruments and chattel
paper and all claims against third parties, drafts, acceptances, letters of credit, rights to
receive payments under letters of credit, book accounts, credits, reserves, computer tapes,
programs, discs, software, books, ledgers, files and records relating to such accounts,
leases, instruments and chattel paper, together with all supporting obligations and all
right, title, security and guaranties with respect to any of the foregoing, including any
right of stoppage in transit.

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          “Replacement Lender” means a financial institution proposed by the Borrower in
accordance with Section 2.9(d) that is reasonably satisfactory to the Agent and which has agreed
to acquire and assume all or a part of a Defaulting Lender’s Loans and Commitments under Section
2.9(d).

          “Reportable Event” means any of the events described in Section 4043 of ERISA
and the regulations thereunder, other than a reportable event for which the thirty-day
notice
requirement to the PBGC has been waived.

          “Required Lenders” means (i) before the Expiration Date, the Lenders holding
more than fifty percent of the aggregate Commitments at such time and (ii) on and after the
Expiration Date, the Lenders holding more than fifty percent of the aggregate unpaid principal
amount of the Loans at such time.

          “Requirement of Law” means (i) the Governing Documents, (ii) any law, treaty, rule,
regulation, order or determination of an arbitrator, court or other Governmental Authority or
(iii) any franchise, license, lease, permit, certificate, authorization, qualification, easement,
right of way, or other right or approval binding on the Borrower or
any of its property.

          “Responsible
Officer” means the Chairman of the Board, the President, the Chief
Executive Officer, the Chief Financial Officer, the Chief Operating Officer, the Treasurer or the
Assistant Treasurer of the Borrower, as each such term is defined or otherwise used in the bylaws
of the Borrower or in any resolution of the Borrower’s board of directors, or any other individual
designated in writing by the Chairman of the Board, the President, the Chief Executive Officer
or the Chief Financial Officer of the Borrower as a “Responsible Officer” for purposes hereof.

          “Revolving Credit Loans” has the meaning specified in Section
2.l(a).

          “Settlement”
has the meaning specified in Section 2.2(i).

          “Settlement Date” has the meaning specified in Section 2.2(i).

          “Solvent”
means, when used with respect to any Person, that as of the date as to which such
Person’s solvency is to be measured:

               (i) the fair saleable value of its assets is in excess of (A) the total
amount of its liabilities (including contingent, subordinated, absolute, fixed,
matured, unmatured, liquidated and unliquidated liabilities) and (B) the amount
that will be required to pay the probable liability of such Person on its debts as
such debts become absolute and matured;

               (ii) it has sufficient capital to conduct its business; and

               (iii) it is able to meet its debts as they mature.

          “Subsidiary”
means a corporation or other entity in which the Borrower directly or
indirectly owns or controls the shares of stock or other ownership interests having ordinary

-15-

 

voting power to elect a majority of the board of directors or other governing body, or to
appoint the majority of the managers of, such corporation or other entity.

          “Termination Event” means (i) a Reportable Event with respect to any Pension
Plan; (ii) the withdrawal of the Borrower or any ERISA Affiliate from a Pension Plan during a plan
year in which it was a “substantial employer” (as defined in Section 4001 (a)(2) of ERISA); (iii)
the providing of notice of intent to terminate a Pension Plan in a distress termination (as
described in Section 4041(c) of ERISA); (iv) the institution by the PBGC of proceedings to
terminate or appoint a trustee to administer a Pension Plan;
(v) the receipt by the Borrower or any
ERISA Affiliate of notice from a Multiemployer Plan that it is in reorganization or insolvent under
Section 4241 or 4245 of ERISA or that intends to terminate or has terminated under Section 4041A of
ERISA; or (vi) the partial or complete withdrawal, within the meaning of Sections 4203 and 4205 of
ERISA, of the Borrower or any ERISA Affiliate from a Multiemployer Plan.

          “Type”
means a Base Rate Advance or a LIBOR Rate Advance.

          SECTION
1.2 Accounting Terms and Determinations. Unless otherwise defined or
specified herein, all accounting terms used in this Agreement shall be construed in accordance with
GAAP, applied on a basis consistent in all material respects with the Financial Statements
delivered to the Agent on or before the Closing Date. All accounting determinations for purposes of
determining compliance with Article VIII shall be made in accordance with GAAP as in effect on the
Closing Date and applied on a basis consistent in all material respects with the audited Financial
Statements delivered to the Agent on or before the Closing Date. The Financial Statements required
to be delivered hereunder from and after the Closing Date, and all financial records, shall be
maintained in accordance with GAAP. If GAAP shall change from the basis used in preparing the
audited Financial Statements delivered to the Agent on or before the Closing Date, the Compliance
Certificates required to be delivered pursuant to Section 7.1 shall include calculations setting
forth the adjustments necessary to demonstrate how the Borrower is in compliance with the Financial
Covenants based upon GAAP as in effect on the Closing Date.

          SECTION
1.3 Other Terms; Headings. Unless otherwise defined herein, terms used herein
that are defined in the Uniform Commercial Code, from time to time in effect in the State of New
York (the “Code”), shall have the meanings given in the Code. An Event of Default shall “continue”
or be “continuing” unless and until such Event of Default has been waived or cured within any grace
period specified therefor under Section 9.1. The headings and the Table of Contents are for
convenience only and shall not affect the meaning or construction of any provision of this
Agreement. Whenever the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be
followed by the phrase “without limitation”. The word “will” shall be construed to have the same
meaning and effect as the word “shall”. Unless the context requires otherwise (i) any definition of
or reference to any agreement, instrument or other document herein or
in any other Loan
Document shall be construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein or in any other Loan Document), (ii) any
reference

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herein to any Person shall be construed to include such Person’s successors and
assigns, (iii) the words “herein”, “hereof and “hereunder”, and words of similar import, shall be
construed to  refer to this Agreement in its entirety and not to any particular provision hereof,
(iv) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to
refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement and (v) the words
“asset” and “property” shall be construed to have the same meaning and effect and to refer to any
and all tangible and intangible assets and properties, including cash, securities, accounts and
contract rights.

ARTICLE II.

THE CREDIT FACILITIES

          SECTION 2.1 The Revolving Credit Loans.

          (a) Each Lender severally agrees, subject to Section 2.4(a) and the other terms and conditions
of this Agreement, to make revolving credit loans (the “Revolving Credit Loans”) to the Borrower,
from time to time from the Closing Date to but excluding the Expiration Date, at the Borrower’s
request to the Agent, in an aggregate principal amount which, after giving effect thereto, would
not cause the aggregate principal amount of all outstanding Loans made by such Lender to exceed
such Lender’s Commitment reduced by such Lender’s Pro Rata Share of the amount, if any, by which
the Maximum Amount of the Facility exceeds (i) 85% of Eligible Receivables plus (ii) 65% of
Eligible Inventory (not to exceed $40,000,000) less (iii) any reserves established by the
Agent in accordance with the terms of this Agreement (the
“Borrowing Base”); provided, however, that in no event shall the aggregate amount of the Revolving Credit Loans of all the
Lenders outstanding at any time exceed the Maximum Amount of the Facility.

          (b) The Agent, at any time in the exercise of its commercially reasonable discretion, may (i)
establish and increase (or decrease) reserves against Eligible Receivables and Eligible Inventory
for variances in collateral reporting based on tests conducted during examinations of the
Collateral and (ii) impose additional restrictions (or eliminate the same) to the standards of
eligibility set forth in the definitions of “Eligible Receivables” and “Eligible Inventory” based
on information obtained by the Agent from its examination of the Collateral, the books and records
of the Borrower, public information and information furnished to the Agent by the Borrower or its
Affiliates.

          (c) The Revolving Credit Loans made by each Lender shall be evidenced by a promissory note
payable to the order of such Lender, substantially in the form of Exhibit A (as amended,
supplemented or otherwise modified from time to time, a “Note”), executed by the Borrower and
delivered to the Agent on the Closing Date. The Note payable to the order of a Lender shall be in a
stated maximum principal amount equal to such Lender’s Pro Rata Share of the Maximum Amount of the
Facility.

          (d) The Revolving Credit Loans shall be payable in full, with all interest accrued
thereon, on the Expiration Date. The Borrower may borrow, repay and reborrow Revolving Credit
Loans, in whole or in part, in accordance with the terms hereof.

- 17 -

 

          SECTION 2.2 Procedure for Borrowing: Notices of Borrowing: Notices of Continuation: Notices of Conversion: Settlement.

          (a) Each borrowing of Revolving Credit Loans (each, a “Borrowing”) shall be made on
notice, given not later than 12:00 Noon (New York time) on the third Business Day prior to the date
of the proposed Borrowing in the case of a LIBOR Rate Advance, and not later than 12:00 Noon (New
York time) on the date of the proposed Borrowing in the case of a Base Rate Advance, by the
Borrower to the Agent. Each such notice of a Borrowing shall be by telecopier, substantially in the
form of Exhibit D (a “Notice of Borrowing”), specifying therein the requested (i) date of such
Borrowing, (ii) Type of Advance comprising such Borrowing, (iii) aggregate principal amount of such
Borrowing and (iv) Interest Period, in the case of a LIBOR Rate Advance.

          (b) With respect to any Borrowing consisting of a LIBOR Rate Advance, the Borrower may,
subject to the provisions of Section 2.2(d) and so long as all the conditions set forth in Article
V have been fulfilled, elect to maintain such Borrowing or any portion thereof as a LIBOR Rate
Advance by selecting a new Interest Period for such Borrowing, which new Interest Period shall
commence on the last day of the Interest Period then ending. Each selection of a new Interest
Period (a “Continuation”) shall be made by notice given not later than 12:00 Noon (New York time)
on the third Business Day prior to the date of any such Continuation by the Borrower to the Agent.
Each such notice of a Continuation shall be by telecopier, substantially in the form of Exhibit E
(a “Notice of Continuation”), specifying whether the Advance subject to the requested Continuation
comprises part (or all) of the Revolving Credit Loans and the requested (i) date of such
Continuation, (ii) Interest Period and (iii) aggregate amount of the Advance subject to such
Continuation, which shall comply with all limitations on Loans hereunder. Upon the Agent’s receipt
of a Notice of Continuation, the Agent shall promptly notify each Lender thereof. Unless, on or
before 12:00 Noon (New York time) of the third Business Day prior to the expiration of an Interest
Period, the Agent shall have received a Notice of Continuation from the Borrower for the entire
Borrowing consisting of the LIBOR Rate Advance outstanding during such Interest Period, any amount
of such Advance comprising such Borrowing remaining outstanding at the end of such Interest Period
(or any unpaid portion of such Advance not covered by a timely Notice of Continuation) shall, upon
the expiration of such Interest Period, be Converted to a Base Rate Advance.

          (c) The Borrower may on any Business Day upon notice (each such notice, a “Notice of
Conversion”) given by the Borrower to the Agent, and subject to the provisions of Section 2.2(d),
Convert the entire amount of or a portion of an Advance of one Type into an Advance of another
Type; provided, however, that any Conversion of a LIBOR Rate Advance into a Base Rate
Advance shall be made on, and only on, the last day of an Interest Period for such LIBOR Rate
Advance. Each such Notice of Conversion shall be given not later than 12:00 Noon (New York time) on
the Business Day prior to the date of any proposed Conversion into a Base Rate Advance and on the third Business Day prior to the date of any proposed Conversion into
a LIBOR Rate Advance. Subject to the restrictions specified above, each Notice of Conversion shall
be by telecopier, substantially in the form of Exhibit F, specifying (i) the requested date of such
Conversion, (ii) the Type of Advance to be Converted, (iii) the requested Interest Period, in the
case of a Conversion into a LIBOR Rate Advance, and (iv) the amount of such Advance to be
Converted and whether such amount comprises part (or all) of the Revolving

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Credit Loans. Upon the Agent’s receipt of a Notice of Conversion, the Agent shall
promptly  notify each Lender thereof. Each Conversion shall be in an aggregate amount not less
than $1,000,000 or an integral multiple of $500,000 in excess thereof.

(d) Anything in subsection (b) or (c) above to the contrary notwithstanding,

     (i) if, at least one Business Day before the date of any requested LIBOR
Rate Advance, the introduction of or any change in or in the interpretation of any
law or regulation makes it unlawful, or any central bank or other Governmental
Authority asserts that it is unlawful, for any Lender to perform its obligations
hereunder to make a LIBOR Rate Advance or to fund or maintain a LIBOR Rate Advance
hereunder (including in the case of a Continuation or a Conversion), such Lender
shall promptly deliver written notice of such circumstance to the Agent, and the
Agent shall promptly deliver such notice to the Borrower, and the right of the
Borrower to select a LIBOR Rate Advance for such Borrowing or any subsequent
Borrowing (including a Continuation or a Conversion) shall be suspended until the
circumstances causing such suspension no longer exist, and any Advance comprising
such requested Borrowing shall be a Base Rate Advance;

     (ii) if, at least one Business Day before the first day of any Interest
Period, the Agent is unable to determine the LIBOR Rate for LIBOR Rate Advances
comprising any requested Borrowing, Continuation or Conversion, the Agent shall
promptly give written notice of such circumstance to the Borrower, and the right of
the Borrower to select or maintain LIBOR Rate Advances for such Borrowing or any
subsequent Borrowing shall be suspended until the Agent shall notify the Borrower
that the circumstances causing such suspension no longer exist, and any Advance
comprising such Borrowing shall be a Base Rate Advance;

     (iii) if any Lender shall, at least one Business Day before the date of
any requested Borrowing or Continuation of, or Conversion into, a LIBOR Rate
Advance, notify the Agent, which notice the Agent shall promptly deliver to the
Borrower, that the LIBOR Rate for Advances comprising such Borrowing, Continuation
or Conversion will not adequately reflect the cost to such Lender of making or
funding Advances for such Borrowing, the right of the Borrower to select LIBOR Rate
Advances shall be suspended until such Lender shall notify the Borrower that the
circumstances causing such suspension no longer exist, and any Advance comprising
such Borrowing shall be a Base Rate Advance;

     (iv) there shall not be outstanding at any time more than three
Borrowings which consist of LIBOR Rate Advances;

     (v) each Borrowing which consists of LIBOR Rate Advances shall be in
an amount equal to $’1,000,000 or a whole multiple of $500,000 in excess thereof;

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     (vi) not more than 80% of the principal amount of Revolving Credit
Loans outstanding at any time shall consist of LIBOR Rate Advances; and

     (vii) if a Default has occurred and is continuing, no LIBOR Rate Advances
may be borrowed or continued as such and no Base Rate Advance may be Converted into
a LIBOR Rate Advance.

          (e) Each Notice of Borrowing, Notice of Continuation and Notice of
Conversion shall be irrevocable and binding on the Borrower. The Borrower agrees to pay to the
Agent for the account of the Lenders $300 for each and any (i) default by the Borrower in making
a Borrowing of, Conversion into or Continuation of a LIBOR Rate Advance after the Borrower has
given notice requesting the same, (ii) default by the Borrower in payment when due of the
principal amount of or interest on any LIBOR Rate Advance or (iii) making of a payment or
prepayment of a LIBOR Rate Advance on a day which is not the last day of an Interest Period with
respect thereto.

          (f) Promptly after its receipt of a Notice of Borrowing under Section 2.2(a), the Agent
shall elect, in its sole and absolute discretion, (i) to have the terms of Section 2.2(g)
apply to the requested Borrowing or (ii) to make a Loan under Section 2.2(h) to the Borrower in
the amount of the requested Borrowing.

          (g) (i) If the Agent shall elect to have the terms of this Section 2.2(g) apply to a
requested Borrowing as described in Section.2.2(f)(i), then, promptly after its receipt of a
Notice of Borrowing under Section 2.2(a), the Agent shall notify the Lenders in writing (by
telecopier or otherwise as permitted hereunder) of the requested Borrowing. Each Lender shall make
the amount of such Lender’s Pro Rata Share of the requested Borrowing available to the Agent in
same day funds, for the account of the Borrower, at the Agent’s Payment Account prior to 2:00 P.M.
(New York time), on the Borrowing Date requested by the Borrower. The proceeds of such Borrowing
will then be made available to the Borrower by the Agent wire transferring to the Borrower’s
Account the aggregate of the amounts made available to the Agent by the Lenders, and in like funds
as received by the Agent by 2:00 P.M. (New York time), on the requested Borrowing Date.

               (ii) Unless the Agent receives contrary written notice prior to the date of any proposed
Borrowing, the Agent is entitled to assume that each Lender will make available its Pro Rata Share
of such Borrowing and, in reliance upon that assumption, but without any obligation to do so, may
advance such Pro Rata Share on behalf of such Lender. If and to the extent that such Lender shall
not have made such amount available to the Agent, but the Agent has made such amount available to
the Borrower, such Lender and the Borrower jointly and severally agree to pay and repay the Agent
forthwith on demand such corresponding amount and to pay interest thereon, for each day from the
date such amount is transferred by the Agent to the Borrower’s Account until the date such amount
is paid or repaid to the Agent, at (A) in the case of the Borrower, the interest rate applicable at
such time to such Loan and (B) in the case of each Lender, for the period from the date such amount
was wire transferred to the Borrower’s Account to (and including) three days after demand therefor
by the Agent to such Lender, at the Federal Funds Rate and, following such third day, at the
interest rate applicable at such time to such Loan together with all costs and expenses incurred by
the Agent in connection therewith. If

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a Lender shall pay to the Agent any or all of such amount, such amount so paid
shall constitute a Revolving Credit Loan by such Lender to the Borrower for purposes of this
Agreement.

          (h) If the Agent shall elect, in its sole and absolute discretion, to have the
terms of this Section 2.2(h) apply to a requested Borrowing of Revolving Credit Loans (as
described in Section 2.2(f)(ii)), the Agent shall make a Loan in the amount of such requested
Borrowing (any such Loan made solely by NFBC under this Section 2.2(h) being referred to as an
“Agent Loan”) available to the Borrower in same day funds by wire transferring such amount to the
Borrower’s Account by 2:00 P.M. (New York time) on the requested Borrowing Date. Each Agent Loan
shall be subject to all the terms and conditions applicable hereunder to the Revolving Credit
Loans except that all payments thereon shall be payable to the Agent solely for its own account
(and for the account of the holder of any participation interest with respect to such Agent
Loan). The Agent shall not make any Agent Loan if (i) my one or more of the conditions precedent
specified in Section 5.2 will not be satisfied on the requested Borrowing Date for the applicable
Borrowing unless the Agent, in its reasonable business judgment, deems the making of such Loan
necessary or desirable (A) to preserve or protect the Collateral or any portion thereof, (B) to
enhance the likelihood of, or maximize the amount of, repayment of the Loans and the other
Obligations, or (C) to pay any other amount chargeable to the Borrower under this Agreement or
any other Loan Document including, without limitation, costs, fees and expenses as described in
Section 11.4 or (ii) the requested Borrowing would cause the aggregate outstanding amount of
Revolving Credit Loans and Agent Loans to exceed the Maximum Amount of the Facility or the
Borrowing Base on such Borrowing Date, except that the Agent may, in its discretion and without
the consent of any of the Lenders, voluntarily permit, for periods of up to thirty consecutive
Business Days, the aggregate outstanding amount of the Revolving Credit Loans and the Agent Loans
at any time and from time to time to exceed the Borrowing Base by an amount up to the lesser of
(A) ten percent (10%) of the Borrowing Base and (B) $2,500,000. For purposes of the preceding
sentence, the discretion granted to the Agent hereunder shall not preclude involuntary
overadvances that may result from time to time due to the fact that the Borrowing Base was
unintentionally exceeded for any reason, including, without limitation, Collateral previously
deemed to be either “Eligible Receivables” or “Eligible Inventory,” as applicable, becomes
ineligible, Collections of Receivables applied to reduce outstanding Loans are thereafter
returned for insufficient funds or overadvances are made to protect or preserve the Collateral,
all of which involuntary overadvances shall be repaid by the Borrower on demand. The Agent Loans
shall be secured by the Collateral, shall constitute Loans and Obligations hereunder and shall
bear interest at the rate in effect from time to time applicable to the Revolving Credit Loans
comprised of Base Rate Advances, including any increase in such rate that is applicable under
Section 4.2. The Agent shall notify each Lender in writing of each Agent Loan.

          (i) Each Lender’s funded portion of any Loan is intended to be equal at all times to
such Lender’s Pro Rata Share of all outstanding Loans. Notwithstanding such agreement, the Agent
and the other Lenders agree (which agreement shall not be for the benefit of or enforceable by the
Borrower) that, to facilitate the administration of this Agreement and the other Loan
Documents, settlement among them as to the Loans and the Agent Loans shall take place on a periodic
basis in accordance with the following provision:

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     (i) The Agent shall request settlement (“Settlement”) with the Lenders on a
weekly basis, or on a more frequent basis if so determined by the Agent, with
respect to (A) each outstanding Agent Loan and (B) all payments made by the
Borrower on account of the Loans, in each case by notifying the Lenders of such
requested Settlement by telephone, confirmed immediately in writing (by telecopier
or otherwise as permitted hereunder), prior to 12:00 Noon (New York time) on the
date of such requested Settlement (any such date being a
“Settlement Date”).

     (ii) Each Lender shall make the amount of such Lender’s Pro Rata
Share of the outstanding principal amount of the Agent Loan with respect to which
Settlement is requested available to the Agent in same day funds, for itself or for
the account of NFBC, to the Agent’s Payment Account prior to 2:00 P.M. (New York
time), on the Settlement Date applicable thereto, regardless of whether the
conditions precedent specified in Section 5.2 have then been satisfied. Such amounts
made available to the Agent shall be applied against the amounts of the applicable
Agent Loan and, together with the portion of such Agent Loan representing NFBC’s Pro
Rata Share thereof, shall constitute Loans of such Lenders. If any such amount is
not made available to the Agent by any Lender on the Settlement Date applicable
thereto, the Agent shall be entitled to recover such amount on demand from such
Lender together with interest thereon at the Federal Funds Rate for the first three
days from and after such Settlement Date and thereafter at the interest rate then
applicable to Base Rate Loans.

     (iii) Notwithstanding the foregoing, not more than one Business Day after
demand is made by the Agent (whether before or after the occurrence of a Default or
an Event of Default), each Lender (other than NFBC) shall irrevocably and
unconditionally purchase and receive from the Agent, without recourse or warranty,
an undivided interest and participation in such Agent Loan to the extent of such
Lender’s Pro Rata Share thereof, by paying to the Agent, in same day funds, an
amount equal to such Lender’s Pro Rata Share of such Agent Loan, regardless of
whether the conditions precedent specified in Section 5.2 have then been satisfied.
If such amount is not made available to the Agent by any Lender, the Agent shall be
entitled to recover such amount on demand from such Lender together with interest
thereon at the Federal Funds Rate for the first three days from and after such
demand and thereafter at the interest rate then applicable to the Revolving Credit
Loans for Base Rate Advances, including any increase in such rate that is applicable
under Section 4.2.

     (iv)
From and after the date, if any, on which any Lender purchases an undivided interest and participation in an Agent Loan under clause (iii) above, the
Agent shall promptly distribute to such Lender such Lender’s Pro Rata Share of
all payments of principal and interest received by the Agent in respect of such
Agent Loan.

          SECTION 2.3 Application of Proceeds. The proceeds of the Loans shall be used by
the Borrower for its general working capital purposes, to make capital expenditures, to

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fund loans to and investments in Affiliates of the Borrower and to pay expenses
incurred by the Borrower in connection herewith.

          SECTION 2.4 Maximum Amount of the Facility; Mandatory Prepayments:
Optional Prepayments.

          (a) In no event shall the sum of the aggregate outstanding principal balances of the Loans
exceed the lesser of (i) the Borrowing Base and (ii) the Maximum Amount of the Facility.

          (b) In addition to any prepayment required as a result of an Event of Default
hereunder, the Loans shall be subject to mandatory prepayment as follows:

     (i) immediately upon discovery by or notice to the Borrower that any of
the lending limits set forth in Section 2.1 (a) or Section 2.4(a) has been
exceeded, the Borrower shall pay the Agent an amount sufficient to reduce the
outstanding balances of the Loans to the applicable maximum allowed amount shall
become due and payable by the Borrower without the necessity of a demand by the
Agent or any Lender; and

     (ii) the entire outstanding principal amount of the Loans, together with all
accrued and unpaid interest thereon and all fees, costs and expenses payable by
the Borrower hereunder, shall become due and payable on the Expiration Date.

          (c) The Borrower may prepay any or all of the Loans, without penalty or premium, subject to
Section 2.2(e)(iii).

          SECTION 2.5 Maintenance of Loan Account: Statements of Account. The Agent shall
maintain an account on its books in the name of the Borrower (the “Loan Account”) in which the
Borrower will be charged with all Loans and Advances made by each Lender to the Borrower or for
the Borrower’s account, including the Revolving Credit Loans, the Agent Loans, interest, fees,
expenses and any other Obligations. The Loan Account will be credited with all amounts received
by the Agent from the Borrower or for the Borrower’s account, including, as set forth below, all
amounts received from the Blocked Account Banks. The Agent shall send the Borrower a monthly
statement reflecting the activity in the Loan Account. Each such statement shall be an account
stated and shall be final, conclusive and binding on the Borrower, absent manifest error.

          SECTION 2.6 Collection of Receivables. The Borrower shall at all times maintain
one or more blocked accounts (each, a “Blocked Account”) Upon notice given by the Agent to the
Borrower at any time after the occurrence of an Availability Event or, in the Agent’s discretion,
during the continuation of an Event of Default (a “Blocked Account Notice”), unless and until the
Agent revokes such Blocked Account Notice in writing, the Borrower shall promptly remit to a
Blocked Account all Collections including all checks, drafts and other documents and
instruments evidencing remittances in payment (collectively, “Items of Payment”). The Borrower, the
Agent and a Blocked Account Bank shall enter into an agreement, in form and substance satisfactory
to the Agent, the Borrower and such Blocked Account Bank (as amended, supplemented or otherwise
modified from time to time, a “Blocked

- 23 -

 

Account Agreement”), which, among other things, shall provide for the opening of a
Blocked  Account for the deposit of Collections at such Blocked Account Bank. At all times after
the delivery of a Blocked Account Notice (unless and until the Agent revokes such Blocked Account
Notice in writing), all Collections and other amounts received by the Borrower from any account
debtor, in addition to all other cash proceeds of the Collateral, shall upon receipt be deposited
into a Blocked Account. The Agent will credit all such payments to the Loan Account, conditional
upon final collection; credit will be given only for cleared funds received prior to 2:00 P.M. (New
York time) by the Agent at its account at North Fork Bank, Melville, New York (Account
#3124059415), or such other bank as the Agent may designate;
provided, however, that for
purposes of calculating interest due to the Lenders, credit will be given to collections one
Business Day after receipt of cleared funds. In all cases, the Loan Account will be credited only
with the net amounts actually received in payment of their Receivables. The Borrower will not
commingle any Items of Payment with any of its other funds or property, but will segregate them
from its other assets and will hold them in trust and for the account and as the property of the
Agent. At any time (i) after the delivery of a Blocked Account Notice (unless and until the Agent
revokes such Blocked Account Notice in writing) or (ii) during the continuation of an Event of
Default, the Borrower shall endorse any Items of Payment upon the request of the Agent. Items of
Payment will be processed in accordance with the Blocked Account Agreements.

          SECTION 2.7 Term. The term of this Agreement shall be for a period from the
Closing Date to but not including March 10, 2006 unless sooner terminated in accordance with the
terms of this Agreement. Notwithstanding the foregoing, the Borrower shall have no right
to terminate this Agreement at any time that any principal of or interest on any of the Loans is
outstanding, except upon prepayment of all Obligations.

          SECTION 2.8 Payment Procedures.

          (a) The Borrower hereby authorizes the Agent to charge the Loan Account with the
amount of all principal, interest, fees, expenses and other payments to be made hereunder and
under the other Loan Documents. The Agent may, but shall not be obligated to, discharge the
Borrower’s payment obligations hereunder by so charging the Loan Account.

          (b) Each payment by the Borrower on account of principal, interest, fees or expenses
hereunder shall be made to the Agent for the benefit of the Agent and the Lenders according to the
their respective rights thereto. All payments to be made by the Borrower hereunder and under the
Notes, whether on account of principal, interest, fees or otherwise, shall be made without setoff,
deduction or counterclaim and shall be made prior to 2:00 P.M. (New York time) on the due date
thereof to the Agent, for the account of the Lenders according to their Pro Rata Shares (except as
expressly otherwise provided), at the Agent’s Payment Account in immediately available funds.
Except for payments which are expressly provided to be made (i) for the account of the Agent only
or (ii) under the settlement provisions of Section 2.2(i), the Agent shall distribute all payments
to the Lenders on the Business Day following receipt in like funds as received. Notwithstanding
anything to the contrary contained in this Agreement, if a Lender exercises its right of setoff
under Section 11.3 or otherwise, any amounts so recovered shall promptly be shared by such Lender
with the other Lenders according to their respective Pro Rata Shares.

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          (c) The Agent shall apply all amounts received by it on account of the
Obligations from the Borrower, from the Blocked Account Banks or from
any other source First, to fees, costs and expenses,
second, to interest and third, to the principal amount of
the Obligations, except that, during the continuance of an Event of Default, the Agent may, with
the consent of the Required Lenders, apply such amounts to such of the Obligations and in such
order as it may elect in its sole and absolute discretion.

          (d) Whenever any payment to be made hereunder shall be stated to be due on a day that is
not a Business Day, the payment may be made on the next succeeding Business Day (except as
specified in clause (ii) of the definition of Interest Period) and such extension of time shall be
included in the computation of the amount of interest due hereunder.

          SECTION 2.9 Defaulting Lenders.

          (a) A Lender that (i) fails to pay the Agent its Pro Rata Share of any Loans made available by
the Agent on such Lender’s behalf or (ii) fails to pay any other amount owing by it to the Agent
hereunder, is a defaulting lender (a “Defaulting Lender”). The Agent may recover all such amounts
owing by a Defaulting Lender on demand.

          (b) The failure of any Lender to fund its Pro Rata Share of any Borrowing shall not relieve
any other Lender of its obligation to fund its Pro Rata Share of such Borrowing. Conversely, no
Lender shall be responsible for the failure of another Lender to fund such other Lender’s Pro Rata
Share of a Borrowing.

          (c) The Agent shall not be obligated to transfer to a Defaulting Lender any payments made by
the Borrower to the Agent for the Defaulting Lender’s benefit; nor shall a Defaulting Lender be
entitled to the sharing of any payments hereunder. Amounts payable to a Defaulting Lender shall
instead be paid to or retained by the Agent. The Agent may hold and, in its discretion, re-lend to
the Borrower the amount of all such payments received or retained by it for the account of such
Defaulting Lender. For purposes of voting or consenting to matters with respect to the Loan
Documents and determining Pro Rata Shares, such Defaulting Lender shall be deemed not to be a
Lender and such Lender’s Commitment or Loans made by it, as applicable, for such purposes shall be
deemed to be zero. This Section shall remain effective with respect to such Lender until (i) the
Defaulting Lender has paid all amounts required to be paid to the Agent hereunder or (ii) the
Required Lenders, the Agent and the Borrower shall have waived such Lender’s default in writing.
The operation of this Section shall not be construed to increase or otherwise affect the Commitment
of any Lender or to relieve or excuse the performance by any of the Borrower of its duties and
obligations hereunder.

          (d) The Borrower may, by notice (a “Replacement Notice”) in writing to the Agent and a
Defaulting Lender, (i) request such Defaulting Lender to cooperate with the Borrower in obtaining a
Replacement Lender for such Defaulting Lender; (ii) request the
non-Defaulting Lenders to acquire
and assume all or a portion of such Defaulting Lender’s Loans and Commitment, but none of such
Lenders shall he obligated to do so; or (iii) propose a Replacement Lender, If a Replacement Lender
shall be accepted by he Agent or one or more of he non-Defaulting Lenders shall agree to acquire
and assume all or part of a Defaulting Lender’s Loans and Commitment, then such Defaulting Lender
shall assign, in accordance with Section

- 25 -

 

11.7, all or part, as the case may be, of its Loans, Commitment, Note and other
rights and obligations under this Agreement and all other Loan Documents to such Replacement Lender
or non-Defaulting Lenders, as the case may be, in exchange for payment of the principal amount of
the Loans so assigned and all interest and fees accrued on such
amount so assigned; provided,
however, that (i) such assignment shall be on the terms and conditions set forth in Section
11.7, and (ii) prior to any such assignment, the Borrower shall have (A) paid to such Defaulting
Lender all amounts properly demanded and theretofore unpaid by the Borrower under the second
sentence of Section 2.2(e) (less costs and expenses incurred by the Borrower directly as a result
of the actions of the Defaulting Lender in violation of this Agreement) and (B) paid to the Agent
all amounts properly demanded and theretofore unpaid by the Borrower under Article IV. If the
Replacement Lender and the non-Defaulting Lenders shall only be willing to acquire less than all of
a Defaulting Lender’s outstanding Loans and Commitment, the Commitment of such Defaulting Lender
shall not terminate, but shall be reduced proportionately, and such Defaulting Lender shall
continue to be a “Lender” hereunder with a reduced Commitment and Pro Rata Share. Upon the
effective date of such assignment, the Borrower shall issue replacement Notes to such Replacement
Lender, non-Defaulting Lenders and Defaulting Lender, as the case may be, in exchange for the Note
of such Defaulting Lender theretofore outstanding, and such Replacement Lender shall, if not
already a Lender, become a “Lender” for all purposes under this Agreement and the other Loan
Documents.

          SECTION 2.10 Sharing of Payments. Etc. If any Lender shall obtain at any time any
payment (whether voluntary, involuntary, through the exercise of any right of setoff, or otherwise)
on account of Obligations payable to such Lender hereunder at such time in excess of its ratable
share (according to the proportion of (i) the amount of such Obligations to (ii) the aggregate
amount of the Obligations payable to all Lenders hereunder at such time), such Lender shall
forthwith purchase from the other Lenders such participations in the Obligations payable to them as
shall be necessary to cause such purchasing Lender to share the excess payment ratably with each of
them; provided, however, that, if all or any portion of such excess payment is thereafter
recovered from such purchasing Lender, such purchase from each other Lender shall be rescinded and
such other Lender shall repay to the purchasing Lender the purchase price to the extent of such
other Lender’s ratable share (according to the proportion of (i) the purchase price paid to such
Lender to (ii) the aggregate purchase price paid to all Lenders) of such recovery together with an
amount equal to such Lender’s ratable share (according to the proportion of (i) the amount of such
other Lender’s required repayment to (ii) the total amount so recovered from the purchasing Lender)
of any interest or other amount paid or payable by the purchasing Lender in respect of the total
amount so recovered. The Borrower agrees that any Lender so purchasing a participation from another
Lender pursuant to this Section 2.10 may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of setoff) with respect to such participation as fully as if
such Lender were the direct creditor of the Borrower in the amount of such participation.

          SECTION 2.11 Publicity. The Agent or any Lender may, with the consent of he
Borrower (which shall not be unreasonably withheld or delayed), publish a tombstone or similar
advertising material relating to the financing transactions contemplated by this Agreement. The
Agent or such Lender shall provide a draft of any such tombstone or similar advertising material to
the Borrower for review and comment before the publication thereof.

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The Agent reserves the right to provide to industry trade organizations information
necessary and customary for inclusion in league table measurements.

ARTICLE III.

SECURITY

          SECTION 3.1 General. To secure the prompt and complete payment and
performance when due (whether at stated maturity, by acceleration or otherwise) of all of the Obligations, the Borrower hereby grants to the Agent for the ratable benefit of the Lenders a lien
on and security interest in all of its right, title and interest in and to the Collateral, wherever
located, whether now owned or hereafter acquired, and all additions and accessions thereto and
substitutions and replacements therefor and improvements thereon, and all proceeds (whether in the
form of cash or other property) and products thereof including, without limitation, all proceeds
of insurance covering the same and all tort claims in connection therewith. As further security for
the Obligations, and to provide other assurances to the Agent and the Lenders, the Agent and the
Lenders shall receive, among other things, the Blocked Account Agreements. This Agreement shall
constitute a security agreement for purposes of the Code.

          SECTION 3.2 Recourse to Security. Recourse to security shall not be required
for any Obligation hereunder and the Borrower hereby waives any requirement that the Agent or
the Lenders exhaust any right or take any action against any of the Collateral before proceeding
to enforce the Obligations against the Borrower.

          SECTION 3.3 Special Provisions Relating to Inventory.

          (a) All Inventory. The security interest in the Inventory granted to the Agent
hereunder shall continue through all steps of manufacture and sale and attach without further act
to raw materials, work in process, finished goods, returned goods, documents of title and
warehouse receipts, and to proceeds resulting from the sale or other disposition of such
Inventory. Until all of the Obligations have been satisfied and the Commitments have been
terminated, the Agent’s security interest in such Inventory and in all proceeds thereof shall
continue in full force and effect and, if an Event of Default is continuing, the Agent shall have
the right to take physical possession of such Inventory and to maintain it on the premises of the
Borrower, in a public warehouse, or at such other place as the Agent may deem appropriate. If the
Agent exercises such right to take possession of such Inventory, the Borrower will, upon demand,
and at the Borrower’s cost and expense, assemble such Inventory and make it available to the
Agent at a place or places convenient to the Agent.

          (b) No Liens. All Inventory of the Borrower shall be maintained at the locations
therefor shown on Schedule 6.1 (b), except for Inventory moved from such locations solely for the
purpose of sale in the ordinary course of the Borrower’s business and Inventory in transit in the
ordinary course of the Borrower’s business.

          (c) Further Assurances. The Borrower will, upon the Agent’s request,
perform any and all steps that are necessary to perfect the Agent’s security interests in the
Borrower’s Inventory including, without limitation, placing and maintaining signs, executing and
filing financing or continuation statements in form and substance satisfactory to the Agent,

- 27 -

 

maintaining stock records and conducting lien searches. In each case, the Borrower
shall take such action as promptly as possible after requested by the Agent but in any event
within five Business Days after any such request is made except that the Borrower shall take such
action immediately upon the Agent’s request following the occurrence of an Event of Default. If the
Borrower’s Inventory is in the possession or control of any Person other than a purchaser in the
ordinary course of business or a public warehouseman where the warehouse receipt is in the name of
or held by the Agent, the Borrower shall notify such Person of the Agent’s security interest
therein and, upon request, instruct such Person to acknowledge in writing its agreement to hold all
such Inventory for the benefit of the Agent and subject to the Agent’s instructions. If so
requested by the Agent, the Borrower (as promptly as possible after requested by the Agent but in
any event within five Business Days after any such request is made) will deliver (i) to the Agent
warehouse receipts covering any of the Borrower’s Inventory located in warehouses showing the Agent
as the beneficiary thereof and (ii) to the warehouseman such agreements relating to the release of
warehouse Inventory as the Agent may request. If so requested by the Agent, the Borrower shall
execute and deliver to the Agent a confirmatory written instrument, in form and substance
satisfactory to the Agent, listing all its Inventory, but any failure to execute or deliver the
same shall not limit or otherwise affect the Agent’s security interest in and to such Inventory.

          (d) Inventory Records. The Borrower shall maintain full, accurate and complete
records of its Inventory describing the kind, type and quantity of such Inventory and the
Borrower’s cost therefor, withdrawals therefrom and additions thereto, including a perpetual
inventory for raw materials, work in process and finished goods.

          SECTION 3.4 Special Provisions Relating to Receivables.

          (a)
Invoices, Etc. If an Event of Default is continuing, on the Agent’s request
therefor, the Borrower shall furnish to the Agent (i) the originals of all promissory notes and
other instruments in favor of the Borrower, (ii) copies of invoices to customers and shipping and
delivery receipts or warehouse receipts thereof, (iii) the originals of all letters of credit in
its favor, (iv) such endorsements or assignments related to such
letters of credit, notes, and
instruments as the Agent may reasonably request and (v) the written consent of the issuer of any
letter of credit to the assignment of the proceeds of such letter of credit by the Borrower to the
Agent.

          (b)
Records, Collections. Etc. The Borrower shall promptly report all customer credits
to the Agent. The Borrower shall notify the Agent of all returns and of all claims asserted with
respect to merchandise, in each case with a value in excess of $5,000,000. The Borrower shall
promptly report to the Agent each such return, providing the Agent with a description of the
returned item. The Borrower shall not, without the Agent’s prior written consent, settle or adjust
any dispute or claim, or grant any discount (except ordinary trade discounts), credit or allowance
or accept any return of merchandise, except in the ordinary course of its business. During the
continuance of an Event of Default, the Agent may (i) settle or adjust disputes or claims directly
with account debtors for amounts and upon terms which it considers advisable and (ii) notify
account debtors on the Borrower’s Receivables that such Receivables have been assigned to the
Agent, and that payments in respect thereof shall be made directly to the Agent. Where the Borrower
receives collateral of any kind or nature by reason of

- 28 -

 

transactions between itself and its customers or account debtors, the Borrower
will hold the same on the Agent’s behalf, subject to the Agent’s instructions, and as property
forming part of the Borrower’s Receivables. Where the Borrower sells goods or services to a
customer which also sells goods or services to it or which may have other claims against it, the
Borrower will so advise the Agent immediately to permit the Agent to establish a reserve therefor.
The Borrower shall maintain a record of its electronic chattel paper that identifies the Agent as
the assignee thereof and otherwise in a manner such that the Agent has control over such chattel
paper for purposes of the Code.

          (c) Excluded Receivables. Excluded Receivables shall not be governed by
this Section 3.4.

          SECTION
3.5 Continuation of Liens, Etc. The Borrower shall defend the
Collateral against all claims and demands of all Persons at any time claiming any interest therein,
other than claims relating to Liens permitted by the Loan Documents. The Borrower agrees to comply
with the requirements of all state and federal laws to grant to the Agent valid and perfected first
priority security interests in the Collateral, subject only to Permitted Liens. The Agent is
hereby authorized by the Borrower, during the continuance of an Event of Default, to sign the
Borrower’s name on any document or instrument as may be necessary or desirable to establish and
maintain the Liens covering the Collateral and the priority and continued perfection thereof or
file any financing or continuation statements or similar documents or instruments covering the
Collateral whether or not the Borrower’s signature appears thereon. The Borrower agrees, from time
to time, at the Agent’s request, to file notices of Liens, financing statements, similar documents
or instruments, and amendments, renewals and continuations thereof, and cooperate with the
Agent’s representatives, in connection with the continued perfection (and the priority status
thereof) and protection of the Collateral and the Agent’s Liens thereon. The Borrower agrees that
the Agent may file a carbon, photographic or other reproduction of this Agreement (or any financing
statement related hereto) as a financing statement.

          SECTION 3.6 Power of Attorney. In addition to all of the powers granted to the
Agent in this Article III, the Borrower hereby appoints and constitutes the Agent as the Borrower’s
attorney-in-fact to sign the Borrower’s name on any of the documents, instruments and other items
described in Section 3.5, to make any filings under the Uniform Commercial Code covering any of the
Collateral, and to request at any time from customers indebted on its Receivables verification of
information concerning such Receivables and the amount owing thereon (provided that any
verification prior to an Event of Default shall not contain the Agent’s name), and, during the
continuance of an Event of Default, (i) to convey any item of Collateral to any purchaser thereof
and (ii) to make any payment or take any act necessary or desirable to protect or preserve any
Collateral. The Agent’s authority hereunder shall include, without limitation, the authority to
execute and give receipt for any certificate of ownership or any document, to transfer title to any
item of Collateral and to take any other actions arising from or incident to the powers granted to
the Agent under this Agreement. This power of attorney is coupled with an interest and is
irrevocable.

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ARTICLE IV.

INTEREST, FEES AND EXPENSES

          SECTION 4.1 Interest. The Borrower shall pay to the Agent for the ratable
benefit of the Lenders, interest on the Advances, payable monthly in arrears on the first day of
each month, commencing with the month immediately following the Closing Date, and on the
Expiration Date, at the following rates per annum:

          (a) Base Rate Advances. If such Advance is a Base Rate Advance, at a fluctuating rate
which is equal to (i) the Base Rate then in effect less
(ii) 0.25%, each change in such
fluctuating rate to take effect simultaneously with the corresponding
change in the Base Rate.

          (b) LIBOR Rate Advances. If such Advance is a LIBOR Rate Advance, at a rate
which is equal at all times during the Interest Period for such LIBOR Rate Advance to (i) the
LIBOR Rate plus (ii) 2.50%.

          SECTION 4.2 Interest After Event of Default. From the date of occurrence
of any Event of Default until the earlier of the date upon which (i) all Obligations shall have
been paid and satisfied in full or (ii) such Event of Default shall have been waived, interest on
the Loans shall be payable on demand at a rate per annum equal to the rate that would be otherwise
applicable thereto under Section 4.1 plus up to an additional two percent (2%).

          SECTION
4.3 Closing Fee. On the Closing Date, the Borrower shall pay to the Agent
for the ratable benefit of the Lenders, a non-refundable closing fee in the amount of $125,000.

          SECTION 4.4 Unused Line Fee. The Borrower shall pay to the Agent for the ratable
benefit of the Lenders on the first day of each month, commencing with the month immediately
following the Closing Date, and on the Expiration Date, in arrears, an unused line fee equal to
three-eighths of one percent (.375%) per annum of the difference, if positive, between (i)
the Maximum Amount of the Facility and (ii) the average daily aggregate outstanding amount of the
Loans.

          SECTION 4.5 Calculations. All calculations of interest and fees hereunder shall
be made by the Agent on the basis of a year of 360 days for the actual number of days elapsed in
the period for which such interest or fees are payable. Each determination by the Agent of an
interest rate, fee or other payment hereunder shall be conclusive and binding for all purposes,
absent manifest error.

          SECTION 4.6 Indemnification in Certain Events. If, after the Closing Date, (i)
any change in or in the interpretation of any law or regulation is introduced including, without
limitation, with respect to reserve requirements, applicable to any Lender or any other banking or
financial institution from which any Lender borrows funds or obtains credit, (ii) any Lender
complies with any future guideline or request from any central bank or other Governmental Authority
or (iii) any Lender determines that the adoption of any applicable law, rule or regulation
regarding capital adequacy, or any change therein, or any change in the interpretation or
administration thereof by any Governmental Authority, central bank or comparable agency

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charged with the interpretation or administration thereof has or would have the
effect described below, or any Lender complies 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, and in the case of any event set forth in this clause (iii), such adoption, change or
compliance has or would have the direct or indirect effect of reducing the rate of return on such
Lender’s capital as a consequence of its obligations hereunder to a level below that which such
Lender could have achieved but for such adoption, change or compliance (taking into consideration
such Lender’s policies as the case may be with respect to capital adequacy) by an amount deemed by
such Lender to be material, and any of the foregoing events described in clauses (i), (ii) and
(iii) increases the cost to such Lender of funding or maintaining the Loans, or reduces the amount
receivable in respect thereof by such Lender, then the Borrower shall, upon demand by the Agent,
pay to the Agent for the benefit of such Lender additional amounts sufficient to indemnify such
Lender against such increase in cost or reduction in amount receivable. Each Lender agrees that, if
it becomes aware of the occurrence of any such event or condition that would cause it to incur any
material increased cost to fund or maintain the Loans or that would reduce the amount receivable in
respect thereof in any material respect, it will notify the Agent (and the Agent will notify the
Borrower) as promptly as practicable of such event or condition and will use its reasonable efforts
to make, fund or maintain the affected Loans of such Lender in a manner such that the additional
amounts which would otherwise be required to be paid hereunder would be materially reduced, in each
case so long as, in such Lender’s reasonable discretion, the making, funding or maintaining of such
Loans in such other manner would not otherwise materially adversely affect such Loans or such
Lender. If the Borrower shall receive notice from the Agent that amounts are due to a Lender
hereunder, the Borrower may, upon at least five Business Days’ prior written notice to such Lender
and the Agent, but not more than sixty days after receipt of notice from the Agent, identify to the
Agent an Eligible Assignee acceptable to the Borrower and the Agent, which will purchase from such
Lender the Commitment, the amount of outstanding Loans, and the Note held by such Lender and such
Lender shall thereupon assign its Commitment, any Loans owing to such Lender, and the Note held by
such Lender to such Eligible Assignee in accordance with Section 2.9.

          SECTION 4.7 Taxes.

          (a) Subject to Section 4.7(e), any and all payments by the Borrower hereunder or under
the Notes shall be made free and clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholdings and penalties, interest and all other
liabilities with respect thereto (“Taxes”), excluding any taxes imposed on the net income of the
recipient of such payment (including, without limitation, any taxes imposed on branch profits) and
franchise taxes imposed on such recipient by any applicable jurisdiction. If the Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable hereunder or under any
Loan to or for the benefit of the Agent or any Lender, (A) the sum payable shall be increased as
may be necessary so that after making all required deductions of Taxes (including deductions of
Taxes applicable to additional sums payable under this Section 4.7) the Agent or such Lender
receives an amount equal to the sum it would have received had no such deductions been made, (B)
the Borrower shall make such deductions and (C) the Borrower shall pay the full amount so deducted
to the relevant taxation authority or other authority in accordance with applicable law.

- 31 -

 

          (b) In addition, the Borrower agrees to pay any present or future stamp,
documentary, excise, privilege, intangible or similar taxes or levies that arise at any time or
from time to time (i) from any payment made under any and all Loan Documents, or (ii) from the
execution or delivery by the Borrower of, or from the filing or recording or maintenance of, or
otherwise with respect to the exercise by the Agent of its rights under, any and all Loan Documents
(hereinafter referred to as “Other Taxes”).

          (c) Within thirty days after the date of any payment of Taxes or Other Taxes, the Borrower
will, upon request, furnish to the Agent the original or a certified copy of a receipt evidencing
payment thereof.

          (d) Without prejudice to the survival of any other agreement of the Borrower hereunder,
the agreements and obligations of the Borrower contained in this Section 4.7 shall survive the
indefeasible payment in full of the Obligations.

          (e) Each Person which acquires (including as a result of the entering into of this Agreement
or the making of a Loan) an interest in this Agreement or any Loan, on or prior to the effective
date of such acquisition, will deliver to the Borrower and the Agent two valid, duly completed
copies of such documentation (including, without limitation, IRS Form W-9, W- 8BEN or W-8EC1 or any
applicable successor form), as is required to establish that such Person is entitled to receive
payments under this Agreement and the Notes payable to it without deduction or withholding of
United States federal income tax and to establish an exemption from United States backup
withholding tax. Each Person that delivers to the Borrower and the Agent a Form W-9, W-8BEN or
W-8EC1, or any other required form, pursuant to the preceding sentence, further undertakes to
deliver two further copies of such Form, or applicable successor forms, or other manner of
required certification, as the case may be, on or before the date that any such form expires or
becomes obsolete or otherwise is required to be resubmitted as a condition to obtaining an
exemption from a required withholding of United States federal income tax or after the occurrence
of any event requiring a change in the most recent form previously delivered by it to the Borrower
and the Agent, and such extensions or renewals thereof as may reasonably be requested by the
Borrower and the Agent, certifying (A) in the case of a Form W- 8BEN or W-8EC1, that such Tax
Transferee is entitled to receive payments under this Agreement without deduction or withholding of
any United States federal income taxes, unless any change in treaty, law or regulation or official
interpretation thereof has occurred after the effective date of such acquisition or change and
prior to the date on which any such delivery would otherwise be required that renders all such
forms inapplicable or that would prevent such Person from duly completing and delivering any such
form with respect to it, and such Person advises the Borrower and the Agent that it is not capable
of receiving payments without any deduction or withholding of United States federal income tax or
(B) in the case of a Form W-9, establishing an exemption from United States backup withholding tax.
If the Agent, a Lender or any other Person fails to comply with this Section 4.7(e), such Person
shall not be entitled to the benefits of Section 4.7(a).

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ARTICLE V.

CONDITIONS OF LENDING

          SECTION
5.1 Conditions to Initial Loan. The obligation of the Lenders to
make the initial Loan is subject to the satisfaction of the following conditions prior to or
concurrent with such initial Loan:

          (a) the Agent shall have received the following, each dated the date of the initial
Loan or as of an earlier date acceptable to the Agent, in form and substance satisfactory to the
Agent and its counsel:

     (i) the Notes, each duly executed by the Borrower;

     (ii) each Blocked Account Agreement, duly executed by the Borrower
and the Blocked Account Bank party thereto;

     (iii) acknowledgment copies of Uniform Commercial Code financing
statements (naming the Agent as secured party and the Borrower as debtor) and duly
authorized release or termination statements, duly filed in all jurisdictions that
the Agent deems necessary or desirable to perfect and protect the Liens created
hereunder;

     (iv) completed requests for information, dated on or before the date of
the initial Loan, listing all effective financing statements filed in the
jurisdictions referred to in clause (iii) above and in all other jurisdictions
that the Agent deems necessary or desirable to confirm the priority of the Liens
created hereunder, that name the Borrower as debtor, together with copies of such
financing statements;

     (v) a completed perfection certificate, substantially in the form of
Exhibit H, signed by a Responsible Officer of the Borrower;

     (vi) an initial Borrowing Base Certificate, duly executed by a
Responsible Officer;

     (vii) (A) the audited Financial Statements for the fiscal year ended
December 31, 2003, certified by the Auditors, and unaudited Financial Statements of
the Borrower for the eleven-month period ended November 30, 2004, certified by a
Responsible Officer, and (B) a certificate executed by a Responsible Officer
certifying that, from November 30, 2004 until the Closing Date, no change, event,
occurrence or development or event involving a prospective change in the business,
prospects, operations, results of operations, assets, liabilities or condition
(financial or otherwise) of the Borrower has occurred which has had or could
reasonably be expected to have a Material Adverse Effect, and that all information
provided by or on behalf of the Borrower to the Agent hereunder or in connection
herewith is true and correct in all respects;

     (viii) an opinion of counsel for the Borrower covering such matters
incident to the transactions contemplated by this Agreement as the Agent may

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reasonably require, which such counsel is hereby requested by the Borrower to provide;

     (ix) certified copies of all policies of insurance required by this Agreement and the
other Loan Documents, together with loss payee endorsement for all such policies naming the Agent
as lender loss payee and an additional insured;

     (x) a copy of the Business Plan for the period commencing January 1, 2005, accompanied by
a certificate executed by a Responsible Officer of the Borrower
certifying to the Agent that the
Business Plan has been prepared in good faith based upon the assumptions contained therein and all
information available at the time of preparation thereof and, as of the date of such certificate,
such Chief Financial Officer is not aware of any information contained in the Business Plan which
is false or misleading or of any omission of information which causes the Business Plan to be false
or misleading;

     (xi) copies of the Governing Documents of the Borrower and a copy of the resolutions of
the Board of Directors (or similar evidence of authorization) of the Borrower authorizing the
execution, delivery and performance of this Agreement, the other Loan Documents to which the
Borrower is or is to be a party, and the transactions contemplated hereby and thereby, attached to
which is a certificate of the Secretary or an Assistant Secretary of the Borrower certifying
(A) that such copies of the Governing Documents and resolutions (or similar evidence of
authorization) relating to the Borrower are true, complete and accurate copies thereof, have not
been amended or modified since the date of such certificate and are in full force and effect and
(B) the incumbency, names and true signatures of the officers of the Borrower authorized to sign
the Loan Documents to which it is a party;

     (xii) a certified copy of a certificate of the Secretary of State of the state of
incorporation of the Borrower, dated within two days of the Closing Date, listing the certificate
of incorporation of the Borrower and each amendment thereto on file in such official’s office and
certifying that (A) such amendments are the only amendments to such certificate of incorporation on
file in that office, (B) the Borrower has paid all franchise taxes to the date of such certificate and
(C) the Borrower is in good standing in that jurisdiction;

     (xiii) a good standing certificate from the Secretary of State of each state in
which the Borrower is qualified as a foreign corporation, each dated within ten days of the Closing
Date;

     (xiv) a Collateral Access Agreement for each parcel of Property specified in Schedule
6.1 (b) and with respect to any Collateral in the possession of any Person other than the Borrower
(in each case other than with respect to which the Agent has established a reserve as provided in
the definition of

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“Eligible Inventory”), duly executed by each Person in possession of such
Collateral or with a Lien on or other interest in such parcel of Property;

     (xv) the letter agreement as to the payment of a certain fee payable
to the Agent, duly executed by the Borrower; and

     (xvi) such other agreements, instruments, documents and evidence as
the Agent deems necessary in its reasonable discretion in connection with the
transactions contemplated hereby.

          (b) There shall be no pending or, to the knowledge of the Borrower after due inquiry,
threatened litigation, proceeding, inquiry or other action (i) seeking an injunction or other
restraining order, damages or other relief with respect to the transactions contemplated by this
Agreement or the other Loan Documents or (ii) which affects or could affect the business,
prospects, operations, assets, liabilities or condition (financial or otherwise) of the Borrower,
except, in the case of clause (ii), where such litigation, proceeding, inquiry or other action
could not reasonably be expected to have a Material Adverse Effect.

          (c) The Borrower shall have paid (i) all reasonable legal, audit and background investigation
fees of the Agent in connection with the negotiation, preparation, execution and delivery of the
Loan Documents and (ii) the closing fee payable under Section 4.3 and all other fees referred to in
this Agreement (including, without limitation, under Section 5.1 (a)(xv)) that are required to be paid on the Closing Date.

          (d) Except for the filing of the financing and termination statements under the Code specified
in Section 5.1 (a)(iii), no consent or authorization of, filing with or other act by or in respect
of any Governmental Authority or any other Person is required in connection with the execution,
delivery, performance, validity or enforceability of this Agreement, the Notes or the other Loan
Documents or the consummation of the transactions contemplated hereby or thereby or the continuing
operations of the Borrower following the consummation of such transactions.

          (e) No change, occurrence, event or development or event involving a prospective change that
could reasonably be expected to have a Material Adverse Effect shall have occurred and be
continuing.

          (f) The Agent and its counsel shall have performed (i) a review satisfactory to the Agent of
all of the material contracts and other assets (including, without limitation, leases of operating
facilities) of the Borrower, the financial condition of the Borrower, including all of its tax,
litigation, environmental and other potential contingent liabilities, the corporate and capital
structure of the Borrower and the cash management and management information systems of the
Borrower, (ii) a pre-closing audit and collateral review and (iii) reviews and investigations of
such other matters as the Agent and its counsel deem appropriate, in each case with results
satisfactory to the Agent.

          (g) The Borrower shall be in compliance with all Requirements of Law and its material
contracts, other than such noncompliance that could not reasonably be expected to have a Material
Adverse Effect.

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          (h) The Liens in favor of the Agent shall have been duly perfected and shall
constitute first priority Liens, and the Collateral shall be free and clear of all Liens other than
Liens in favor of the Agent and Permitted Liens.

          (i) After giving effect to all Revolving Credit Loans to be made on the Closing Date,
the difference between (i) the lesser of (A) the Borrowing Base and (B) the Maximum Amount of the
Facility and (ii) the aggregate outstanding amount of such Revolving Credit Loans shall exceed $
10,000,000.

          SECTION 5.2 Conditions Precedent to Each Loan. The obligation of the Lenders to
make any Loan is subject to the satisfaction of the following conditions precedent:

          (a) all representations and warranties contained in this Agreement (other than under Section
6.1(g)) and the other Loan Documents shall be true and correct in all material respects on and as
of the date of such Loan as if then made;

          (b) no Default or Event of Default shall have occurred and be continuing or would result from
the making of the requested Loan as of the date of such request; and

          (c) no Material Adverse Effect shall have occurred.

ARTICLE VI.

REPRESENTATIONS AND WARRANTIES

          SECTION
6.1 Representations and Warranties of the Borrower; Reliance by the
Lenders. The Borrower represents and warrants as of the date hereof (or as of any date
hereafter as contemplated in subsection (j) hereof) as follows:

          (a)
Organization, Good Standing and Qualification. The Borrower (i) is a corporation
duly organized, validly existing and in good standing under the laws of the state of its
organization, (ii) has the corporate power and authority to own its properties and assets and to
transact the businesses in which it presently is, or proposes to be, engaged and (iii) is duly
qualified, authorized to do business and in good standing in each jurisdiction where it presently
is, or proposes to be, engaged in business, except to the extent that the failure to so qualify or
be in good standing could not reasonably be expected to have a Material Adverse Effect. Schedule
6.1 (a) specifies the jurisdiction in which the Borrower is organized and all jurisdictions in
which the Borrower is qualified to do business as a foreign corporation as of the Closing Date and
sets forth the exact correct legal name of the Borrower as specified in the public record of the
State of Missouri.

          (b)
Locations of Offices, Records and Collateral. The address of the principal place
of business and chief executive office of the Borrower is, and the books and records of the
Borrower and all of its chattel paper and records of Receivables are maintained exclusively in the
possession of the Borrower at, the address of the Borrower specified in Schedule 6.1(b). There is
no location at which the Borrower maintains any Collateral other than the locations specified for
it in Schedule 6.1(b). Schedule 6.1(b) specifies all Property of the Borrower, and indicates
whether each location specified therein is leased or owned by the Borrower.

- 36 -

 

          (c) Authority. It has the requisite corporate power and authority to execute,
deliver and perform its obligations under each of the Loan Documents to which it is a party. All
corporate action necessary for the execution, delivery and performance by it of the Loan Documents
to which it is a party (including the consent of shareholders where required) has been taken.

          (d) Enforceability. This Agreement is and, when executed and delivered, each other
Loan Document to which it is a party, will be, the legal, valid and binding obligation of the
Borrower enforceable in accordance with its terms, except as enforceability may be limited by (i)
bankruptcy, insolvency or similar laws affecting creditors’ rights generally and (ii) general
principles of equity.

          (e) No Conflict. The execution, delivery and performance by it of each Loan Document
to which it is a party do not and will not contravene (i) any of the Governing Documents of the
Borrower, (ii) any Requirement of Law or (iii) any material contract of the Borrower and will not
result in the imposition of any Liens upon any of its properties except in favor of the Agent.

          (f) Consents and Filings. No consent, authorization or approval of, or filing with or
other act by, any shareholders of the Borrower, any Governmental Authority or any other Person is
required in connection with the execution, delivery, performance, validity or enforceability of
this Agreement or any other Loan Document, the consummation of the transactions contemplated hereby
or thereby or the continuing operations of the Borrower following such consummation, except for the
filing of financing and termination statements under the Code.

          (g) Ownership; Subsidiaries. The capital stock of each of the Borrower and its Subsidiaries is
owned by the Persons and in the amounts specified in Schedule 6.1(g).

          (h) Solvency. It is Solvent and will be Solvent upon the completion of all
transactions contemplated to occur on or before the Closing Date (including, without limitation,
the Loans to be made on the Closing Date).

          (i) Financial Data. It has provided to the Agent complete and accurate
copies of its annual audited Financial Statements for the fiscal year ended December 31, 2003,
and unaudited Financial Statements for the eleven-month period ended November 30, 2004. Such
Financial Statements have been prepared in accordance with GAAP consistently applied throughout the
periods involved and fairly present the financial position, results of operations and cash flows of
the Borrower for each of the periods covered. It has no Contingent Obligation or liability for
taxes, unrealized losses, unusual forward or long-term commitments or long-term leases, which is
not reflected in such Financial Statements or the footnotes thereto. During the period from
November 30, 2004 to and including the date hereof, there has been no sale, transfer or other
disposition by the Borrower of any material part of its business or property and no purchase or
other acquisition of any business or property (including any capital stock of any other Person)
material in relation to the financial condition of the Borrower at November 30, 2004. Since
November 30, 2004, (i) there has been no change, occurrence, development or event which has had or
could reasonably be expected to have a Material Adverse Effect and (ii) none

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of the capital stock of the Borrower has been redeemed, retired, purchased or otherwise
acquired for value by the Borrower.

          (j) Accuracy and Completeness of Information. All data, reports and information
(other than preliminary or draft data, reports or information) heretofore, contemporaneously or
hereafter furnished by or on behalf of the Borrower in writing to the Agent or the Auditors for
purposes of or in connection with this Agreement or any other Loan Document, or any transaction
contemplated hereby or thereby, are or will be true and accurate in all material respects on the
date as of which such data, reports and information are dated or certified and not incomplete by
omitting to state any material fact necessary to make such data, reports and information not
misleading at such time. There are no facts now known to any Responsible Officer of the Borrower
which individually or in the aggregate could reasonably be expected to have a Material Adverse
Effect and which have not been specified herein, in the Financial Statements, or in any
certificate, opinion or other written statement previously furnished by the Borrower to the Agent.

          (k) No Joint Ventures or Partnerships. It is not engaged in any joint venture or
partnership with any other Person.

          (l) Corporate and Trade Name. During the past five years, the Borrower has not
been known by or used any other corporate trade or fictitious name except for its name as set forth
in the introductory paragraph and on the signature page of this Agreement, which is the exact
correct legal name of the Borrower.

          (m) No Actual or Pending Material Modification of Business. There exists no actual
or, to the best of the Borrower’s knowledge after due inquiry, threatened termination, cancellation
or limitation of, or any modification or change in, the business relationship of the Borrower with
any customer or group of customers which individually or in the aggregate could reasonably be
expected to have a Material Adverse Effect.

          (n) Investment Company. It is not an “investment company,” or an “affiliated
person” of, or “promoter” or “principal underwriter” for, an “investment company,” as such terms
are defined in the Investment Company Act of 1940, as amended. Neither the making of any Loans or
the application of the proceeds or repayment thereof by the Borrower, nor the consummation of the
other transactions contemplated by this Agreement or the other Loan Documents, will violate any
provision of such Act or any rule, regulation or order of the Securities and Exchange Commission
thereunder.

          (o) Margin Stock. It does not own any “margin stock” as that term is
defined in Regulation U of the Federal Reserve Board.

-38-

 

        (p) Taxes and Tax Returns.

     (i) It has properly completed and timely filed all income tax returns
it is required to file. The information filed is complete and accurate in all
material respects. All deductions taken in such income tax returns are
appropriate and in accordance with applicable laws and regulations, except
deductions that may have been disallowed but are being challenged in good faith
and for which adequate reserves have been established in accordance with GAAP.

     (ii) All taxes, assessments, fees and other governmental charges
for periods beginning prior to the date hereof, in each case which involve an
amount in excess of $100,000, have been timely paid (or, if not yet due,
adequate reserves therefor have been established) by it and the Borrower has no
liability for taxes in excess of the amounts so paid or reserves so
established.

     (iii) No deficiencies for taxes have been claimed, proposed or assessed by
any taxing or other Governmental Authority against the Borrower and no tax Liens
have been filed with respect thereto. There are no pending or threatened audits,
investigations or claims for or relating to any liability of the Borrower for taxes
and there are no matters under discussion with any Governmental Authority which could
result in an additional liability for taxes, in each case which involve taxes in
excess of $100,000. The federal income tax returns of the Borrower have never been
audited by the Internal Revenue Service. No extension of a statute of limitations
relating to taxes, assessments, fees or other governmental charges is in effect with
respect to the Borrower.

     (iv) It is not a party to, and has no obligations under, any
written tax sharing agreement or agreement regarding payments in lieu of
taxes.

          (q) No Judgments or Litigation. No judgments, orders, writs or decrees
are outstanding against it, nor is there now pending or, to its knowledge after due inquiry,
threatened litigation, contested claim, investigation, arbitration, or governmental
proceeding by or against the Borrower that (i) individually or in the aggregate could
reasonably be expected to have a Material Adverse Effect or (ii) purports to affect the
legality, validity or enforceability of this Agreement, the Notes, any other Loan Document or
the consummation of the transactions contemplated hereby or thereby.

          (r) Title to Property. It has (i) good and marketable fee simple title to
or valid leasehold interests in all of its Property and (ii) good and marketable title to all
of its other property, in each case free and clear of Liens other than (A) Liens in favor of
the Agent, (B) Permitted Liens and (C) Liens securing Indebtedness reflected in the Financial
Statements delivered under Section 5.1(a)(vii).

          (s) No Other Indebtedness. On the Closing Date and after giving effect to
the transactions contemplated hereby, it has no Indebtedness other than Indebtedness
reflected in the Financial Statements delivered under Section 5.1(a)(vii) to the extent
required by GAAP to be included therein or in footnotes thereto.

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          (t) Compliance with Laws. On the Closing Date, after giving effect to the
transactions contemplated hereby, it is not in default under any term of any Requirement of Law
other than any default which, when taken together with all other similar defaults, could not
reasonably be expected to have a Material Adverse Effect.

          (u) Rights in Collateral; Priority of Liens. All of the Collateral of the
Borrower is owned or leased by it free and clear of any and all Liens in favor of third parties,
other than Liens in favor of the Agent and Permitted Liens. Upon the proper filing of the
financing and termination statements specified in Section 5.1(a)(iii), the Liens granted by the
Borrower under this Agreement constitute valid, enforceable and perfected first priority Liens on
the Collateral.

          (v) ERISA.

     (i) Each of the Borrower and its ERISA Affiliates has fulfilled its
respective contribution obligations under the minimum funding standards of Section
302 of ERISA and Section 412 of the Internal Revenue Code with respect to each
Pension Plan, and no application for a waiver of such minimum funding standards is
currently outstanding with respect to any Pension Plan.

     (ii) No Termination Event has occurred which could reasonably be expected
to have a Material Adverse Effect. Neither it nor any ERISA Affiliate has incurred
any liability to the PBGC or any Pension Plan or Multiemployer Plan, except for
ordinary funding obligations and the payment of PBGC premiums which are not past
due, and except for any such liability which could not reasonably be expected to
have a Material Adverse Effect.

     (iii) Neither it nor any ERISA Affiliate is required to or reasonably
expects to be required to provide security to any Pension Plan under Section 307 of
ERISA or Section 401(a)(29) of the Internal Revenue Code.

     (iv) Each of the Borrower and its Subsidiaries is in compliance in all
respects with all applicable provisions of ERISA and the Internal Revenue Code with
respect to the Plans, and no Person has engaged in a Prohibited Transaction with
respect to any Plan, except for any such noncompliance or Prohibited Transaction
which, individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.

          (w) Labor Matters. There are no existing or threatened strikes, lockouts or
other disputes relating to any collective bargaining or similar agreement to which the Borrower is
a party which, individually or in the aggregate, could reasonably be expected to have a Material
Adverse Effect.

          (x) Compliance with Environmental Laws. (i) It is not the subject of
any judicial or administrative proceeding or investigation relating to the violation of any
Environmental Law or asserting potential liability arising from the release or disposal by any
Person of any Hazardous Materials, (ii) it has not received from any Governmental Authority or
other Person any notice, order, stipulation or directive under any Environmental Law, nor is it

-40-

 

aware of any pending discussions within any Governmental Authority, concerning the
treatment, storage, disposal, spill or release or threatened release of any Hazardous Materials at, on,
beneath or adjacent to Property owned or leased by it, or the release or threatened release at any other
location of any Hazardous Material generated, used, stored, treated, transported or released by or
on behalf of the Borrower, (iii) during the period that Affiliates of Carl C. Icahn have
controlled the Borrower, it has disposed of all its waste in accordance with all Applicable laws and it has
not improperly stored or disposed of any waste at, on, beneath or adjacent to any of its Property,
(iv) it has no knowledge of any actual or potential liability for any release of any Hazardous
Materials, and there has been no spill or release of any Hazardous Materials at any of its
Property in violation of Environmental Laws, (v) all of its Property (including, without limitation, its
Equipment) is free, and has at all times been free, of Hazardous Materials, except as such
materials may be part of such Equipment, and underground storage tanks and (vi) to the
knowledge of the Borrower, none of its Property has ever been used as a waste disposal site,
whether registered or unregistered, where any of the foregoing could reasonably be expected
to have a Material Adverse Effect.

          (y) Licenses and Permits. It has obtained and holds in full force
and effect all franchises, licenses, leases, permits, certificates, authorizations,
qualifications, easements, rights of way and other rights and approvals which are necessary
or advisable for the operation of its business as presently conducted and as proposed to be
conducted, except where the failure to possess any of the foregoing (individually or in the
aggregate) could not reasonably be expected to have a Material Adverse Effect.

          (z) Government Regulation. It is not subject to regulation under the
Public Utility Holding Company, Act of 1935, the Federal Power Act, the Interstate Commerce Act or
any other Requirement of Law that limits its ability to incur Indebtedness or to consummate
the transactions contemplated by this Agreement and the other Loan Documents.

          (aa) Business and Properties. No business of the Borrower is affected by any
fire, explosion, accident, drought, storm, hail, earthquake, embargo, act of God or of the
public enemy or other casualty (whether or not covered by insurance) that could reasonably be
expected to have a Material Adverse Effect.

          (bb) Business Plan. The Business Plan and the Financial Statements delivered
to the Agent on the Closing Date were prepared in good faith on the basis of assumptions
which were fair in the context of the conditions existing at the time of delivery thereof,
and, with respect to the Business Plan, represented, at the time of delivery, the Borrower’s
best estimate of its future financial performance.

          (cc) Affiliate Transactions. The Borrower is not a party to or bound by any
agreement or arrangement (whether oral or written) relating to any of the Collateral to which
any Affiliate of the Borrower is a party except (i) in the ordinary course of and pursuant to
the reasonable requirements of the business of the Borrower and (ii) upon fair and reasonable
terms no less favorable to the Borrower than it could obtain in a comparable arm’s-length
transaction with an unaffiliated Person.

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          (dd) Compliance with
Anti-Terrorism Laws. The Borrower is and will remain
in full compliance with all laws and regulations applicable to it including, without limitation,
(i) ensuring that no Person who owns a controlling interest in or otherwise controls the Borrower
is or shall be (A) listed on the Specially Designated Nationals and Blocked Person List
maintained by the Office of Foreign Assets Control (“OFAC”), Department of the Treasury, or
any other similar list maintained by the OFAC under any authorizing statute, Executive Order
or regulation or (B) a Person designated under Section 1 (b), (c) or (d) of Executive Order
No. 13224 (September 23, 2001), any related enabling legislation or any similar Executive
Order and (ii) compliance with all applicable Bank Secrecy Act (“BSA”) laws, regulations and
government guidance on BSA compliance and on the prevention and detection of money laundering
violations. The Borrower acknowledges that each of the Agent and the Lenders have notified the
Borrower that the Agent and the Lenders are required, under the USA Patriot Act, 31 U.S.C.
§5318 (the “Patriot Act”), to obtain, verify and record information that identifies the
Borrower including, without limitation, the name and address of the Borrower and such other
information that will allow the Agent and the Lenders to identify the Borrower in accordance
with the Patriot Act.

All representations and warranties made by the Borrower in this Agreement and in each other Loan
Document to which it is a party shall survive the execution and delivery hereof and thereof and
the closing of the transactions contemplated hereby and thereby. The Borrower acknowledges and
confirms that the Lenders are relying on such representations and warranties without independent
inquiry in entering into this Agreement.

ARTICLE VII.

COVENANTS OF THE BORROWER

          SECTION 7.1 Affirmative Covenants. Until termination of the Commitments and
payment and satisfaction of all Obligations in full:

          (a) Corporate Existence. The Borrower shall (i) maintain its corporate existence, (ii)
maintain in full force and effect all material licenses, bonds, franchises, leases, trademarks,
qualifications and authorizations to do business, and all material patents, contracts and other
rights necessary or advisable to the profitable conduct of its businesses, and
(iii) continue in the same lines of business as presently conducted by it.

          (b) Maintenance of Property. The Borrower shall keep all property useful and necessary
to its business in good working order and condition (ordinary wear and tear excepted) in accordance
with its past operating practices.

          (c) Environmental Matters. The Borrower shall, and shall cause each of its
Subsidiaries to, conduct its business so as to comply in all material respects with all applicable
Environmental Laws including, without limitation, compliance in all material respects with the
terms and conditions of all permits and governmental authorizations, provided that the
Borrower shall not be deemed in violation hereof if the Borrower’s or any such Subsidiary’s failure
to comply with any of the foregoing could not reasonably be expected to have a Material Adverse
Effect.

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          (d) Taxes. The Borrower shall pay, when due, (i) all tax assessments, and
other governmental charges and levies imposed against it or any of its property and (ii) all
lawful claims that, if unpaid, might by law become a Lien upon its property; provided,
however, that, unless such tax assessment, charge, levy or claim has become a Lien on any of
the property of the Borrower need not be paid if it is being contested in good faith, by
appropriate proceedings diligently conducted and an adequate reserve or other appropriate provision shall have been
established therefor as required in accordance with GAAP.

          (e) Requirements of Law. The Borrower shall comply with all Requirements of Law
applicable to it, including, without limitation, all applicable federal, state, local or foreign
laws and regulations, including, without limitation, those relating to environmental and employee
matters (including the collection, payment and deposit of employees’ income, unemployment, Social
Security and Medicare hospital insurance taxes) and with respect to pension liabilities, provided
that the Borrower shall not be deemed in violation hereof if the Borrower’s failure to comply with
any of the foregoing could not reasonably be expected to have a Material Adverse Effect.

          (f) Insurance. The Borrower shall maintain public liability insurance,
business interruption insurance, third party property damage insurance and replacement value
insurance on its assets (including the Collateral) under such policies of insurance, with such
insurance companies, in such amounts and covering such risks as are in effect (and copies of which
have been provided to the Agent) immediately before the Closing Date, all of which policies
covering the Collateral shall name the Agent as an additional insured and the lender loss payee in
case of loss, and contain other provisions as the Agent may require to protect fully the Agent’s
interest in the Collateral and any payments to be made under such policies.

          (g) Books and Records; Inspections. The Borrower shall (i) maintain books and
records (including computer records and programs) of account pertaining to the assets, liabilities
and financial transactions of the Borrower in such detail, form and scope as is consistent with
good business practice and (ii) provide the Agent and its agents and one representative of each of
the Lenders access to the premises of the Borrower at any time and from time to time, during normal
business hours and upon reasonable notice under the circumstances, and at any time after the
occurrence and during the continuance of a Default or Event of Default, for the purposes of (A)
inspecting and verifying the Collateral, (B) inspecting and copying (at the Borrower’ expense) any
and all records pertaining thereto, and (C) discussing the affairs, finances and business of the
Borrower with any officer, employee or director thereof or with the Auditors, all of whom are
hereby authorized to disclose to the Agent and the Lenders all financial statements, work papers,
and other information relating to such affairs, finances or business. The Borrower shall reimburse
the Agent for the reasonable expenses of a third party examiner or accountant retained by the
Agent to verify or inspect Collateral and the records or documents related thereto (I) up to three
times in any twelve-month period (and more frequently in the Agent’s discretion at any time that an
Event of Default has occurred and is continuing) or (II) in connection with the inspection of any
Inventory acquired from another Person other than in the ordinary course of business if the value
thereof is greater than $5,000,000. If the Agent’s own employees are used to conduct any such
verification or inspection, the Borrower shall not be required to reimburse the Agent for the
expense thereof. All such Obligations may be charged to the Loan Account or any other account of
the Borrower

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with the Agent or any of its Affiliates. The Borrower hereby authorizes the Agent to communicate
directly with the Auditors to disclose to the Agent any and all financial information regarding the
Borrower including, without limitation, matters relating to any audit and copies of any letters,
memoranda or other correspondence related to the business, financial condition or other affairs of
the Borrower.

          (h) Notification Requirements. The Borrower shall timely give the Agent the
following notices and other documents:

     (i) Notice of Defaults. Promptly, and in any event within two
Business Days after becoming aware of the occurrence of a Default or Event of
Default, a certificate of a Responsible Officer specifying the nature thereof and
the Borrower’s proposed response thereto, each in reasonable detail.

     (ii) Proceedings or Changes. Promptly, and in any event within
five Business Days after the Borrower becomes aware of (A) any proceeding including,
without limitation, any proceeding the subject of which is based in whole or in part
on a commercial tort claim being instituted or threatened to be instituted by or
against the Borrower in any federal, state, local or foreign court or before any
commission or other regulatory body (federal, state, local or foreign) involving a
sum, together with the sum involved in all other similar proceedings, in a stated
amount in excess of $500,000 in the aggregate, (B) any order, judgment or decree
involving a sum, together with the sum of all other orders, judgments or decrees, in
excess of $500,000 in the aggregate being entered against the Borrower or any of its
property or assets, (C) any notice or correspondence issued to the Borrower by a
Governmental Authority warning, threatening or advising of the commencement of any
investigation involving the Borrower or any of its property or assets, (D) any
actual or prospective change, development or event which has had or could reasonably
be expected to have a Material Adverse Effect, (E) a change in the location of any
Collateral from the locations specified in Schedule 6.1(b) or (F) a proposed or
actual change of the name, identity, mailing address, chief executive office,
principal place of business, corporate structure or jurisdiction of organization of
the Borrower, a written statement describing such proceeding, order, judgment,
decree, change, development or event and any action being taken by the Borrower with
respect thereto.

     (iii) ERISA Notices.

     (A) Promptly, and in any event within Business Days after the occurrence thereof, notice
of any of the following events which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect, including with such notice a written statement of a
Responsible Officer describing the event and any action that is being
taken with respect thereto by the Borrower or ERISA Affiliate, and any
action taken or threatened by the Internal Revenue Service, the
Department of Labor or the PBGC;

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     (1) a Termination Event;

     (2) the failure to satisfy the minimum funding standards of Section 302
of ERISA or Section 412 of the Internal Revenue Code with respect to any
Pension Plan or the filing or a waiver request with the Internal Revenue
Service with respect to such minimum funding standards for any Pension Plan;

     (3) the occurrence of a Prohibited Transaction with respect to a
Plan;

     (4) a failure by the Borrower or ERISA Affiliate to make a payment to a
Pension Plan required to avoid imposition of a Lien under Section 302(f) of
ERISA or Section 412(n) of the Internal Revenue Code;

     (5) the adoption of an amendment to a Pension Plan requiring the
provision of security to such Pension Plan pursuant to Section 307 of ERISA
or Section 401(a)(29) of the Internal Revenue Code;

     (6) receipt by the Borrower or any Subsidiary of notice from the
Department of Labor of any penalty with respect to a Plan;

     (7) receipt by the Borrower or any Subsidiary of notice from the
Internal Revenue Service or the Treasury Department of any income tax
deficiency or delinquency or excise tax penalty with respect to a Plan; and

     (8) receipt by the Borrower or any Subsidiary of notice of the entry of
a judgment, award or settlement agreement with respect to a Plan; and

     (B) Promptly upon the request of the Agent, each annual report (IRS Form
5500 series) and all accompanying) schedules, the most recent actuarial reports, the
most recent financial information concerning the financial status of each Pension
Plan.

     (iv) Environmental Matters. Promptly, and in any event within ten days after
receipt by the Borrower thereof, copies of each (A) written notice that any violation of any
Environmental Law may have been committed or is about to be committed by the Borrower which
violation could reasonably be expected to result in liability or involve remediation costs that
could reasonably be expected to have a Material Adverse Effect, (B) written notice that any
administrative or judicial complaint or order has been filed or is about to be filed against the
Borrower alleging violations of any Environmental Law or requiring the Borrower to take any action
in connection with the release of toxic or Hazardous

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Materials into the environment which violation or action could reasonably be
expected to result in liability or involve remediation costs that could reasonably
be expected to have a Material Adverse Effect, (C) written notice from a
Governmental Authority or other Person alleging that the Borrower may be liable or
responsible for costs associated with a response to or cleanup of a release of a
Hazardous Material into the environment or any damages caused thereby which costs
could reasonably be expected to have a Material Adverse Effect, or (D)
Environmental Law adopted, enacted or issued after the date hereof of which the
Borrower becomes aware which could reasonably be expected to have a Material
Adverse Effect.

          (i) Casualty Loss. The Borrower shall (i) provide written notice to the Agent,
within ten Business Days, of any material damage to, the destruction of or any other material loss
to any of the Borrower’s Inventory or any other asset or property owned or used by the Borrower to
manufacture, repair or store any item of Collateral other than any such asset or property with a
net book value (individually or in the aggregate) less than $5,000,000 or any condemnation,
confiscation or other taking, in whole or in part, or any event that otherwise diminishes so as to
render impracticable or unreasonable the use of such asset or property owned or used by the
Borrower together with a statement of the amount of the damage, destruction, loss or diminution in
value (a “Casualty Loss”) and (ii) diligently file and prosecute its claim for any award or
payment in connection with a Casualty Loss.

          (j) Qualify to Transact Business. The Borrower shall, and shall cause each of
its Subsidiaries to, qualify to transact business as a foreign corporation, limited partnership or
limited liability company, as the case may be, in each jurisdiction where the nature or extent of
its business or the ownership of its property requires it to be so qualified or authorized and
where failure to qualify or be authorized could reasonably be expected to have a Material Adverse
Effect.

          (k) Financial Reporting. The Borrower shall deliver to the Agent the
following:

     (i) Annual Financial Statements. As soon as available, but not
later than 120 days after the end of each fiscal year, beginning with the fiscal
year ended December 31, 2004, (A) the Borrower’ annual audited and certified
consolidated and consolidating Financial Statements; (B) a comparison in reasonable
detail to the prior year’s audited Financial Statements; and (C) if available, the
Auditors’ opinion without Qualification, a “Management Letter” and a statement
indicating that the Auditors have not obtained knowledge of the existence of any
Default or Event of Default during their audit.

     (ii) Projections. Not later than sixty days after the end of each fiscal year
of the Borrower, the Business Plan of the Borrower certified by the Chief
Financial Officer of the Borrower for the three-year period commencing with the
following fiscal year.

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     (iii) Monthly Financial Statements. As soon as available, (A) the
Borrower’s interim consolidated and consolidating Financial Statements as of the end of each month
(beginning with the month in which the Closing Date occurs) and for the fiscal year to date and (B)
a certification by the Borrower’s Chief Financial Officer that such Financial Statements have been
prepared in accordance with GAAP and are fairly stated in all material respects (subject to normal
year-end audit adjustments).

     (iv) Quarterly Financial Statements and Compliance Certificate. As soon as
available, but not later than sixty days after the end of each fiscal quarter, beginning with the
fiscal quarter ending March 31, 2005, (A) the Borrower’s interim consolidated and consolidating
Financial Statements as of the end of such quarter and for the fiscal year to date and (B) a
compliance certificate, substantially in the form of Exhibit C (a “Compliance Certificate”),
signed by the Borrower’s Chief Financial Officer, with an attached schedule of calculations
demonstrating compliance with the Financial Covenants as of the end of such quarter.

     (v) Borrowing Base Certificate. Weekly (or, if the difference between (A) the
lesser of (I) the Borrowing Base and (II) the Maximum Amount of the Facility and (B) the aggregate
outstanding amount of the Loans is greater than $5,000,000, monthly), not later than the second
Business Day of each week (or the fifth Business Day of each month, as the case may be), a
borrowing base certificate, substantially in the form of Exhibit G, detailing the Eligible
Receivables and the Eligible Inventory, containing a calculation of availability and reflecting
all sales, collections, and debit and credit adjustments, as of the last day of (or for) the
preceding week (or month, as the case may be), which shall be prepared by or under the supervision
of the Chief Financial Officer of the Borrower and certified by such officer (a “Borrowing Base
Certificate”).

     (vi) Agings. Monthly, not later than the fifth Business Day of each month, agings
of the Borrower’ Receivables and accounts payable, in scope and detail satisfactory to the Agent,
as of the last day of the preceding month.

     (vii) Inventory Reports. (A) Monthly, not later than the fifth Business Day of
each month, a report of the Borrower’s Inventory, based upon a perpetual inventory, describing such
Inventory by category, item (in reasonable detail), location and current appraised value (at the
lower of cost or market).

     (B) Within 120 days after the end of each fiscal year, a report of the annual
physical Inventory of the Borrower as observed and tested by its public accountants
in accordance with generally accepted auditing standards and GAAP.

     (viii). Shareholder and SEC Reports. As soon as available, but not later than
five days after the same are sent or filed, as the case may be, copies of all financial statements
and reports that the Borrower sends to the shareholders of the

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Borrower (other than financial statements and reports specifically requested by
Carl C. Icahn or any of his Affiliates) or files with the Securities and Exchange
Commission or any other Governmental Authority.

     (ix) Other Financial Information. Promptly after the request by
the Agent therefor, such additional financial statements and other related data and
information as to the business, prospects, operations, results of operations,
assets, liabilities or condition (financial or otherwise) of the Borrower as the
Agent may from time to time reasonably request.

          (l) Payment of Liabilities. The Borrower shall pay and discharge, in the
ordinary course of business, all obligations and liabilities (including, without limitation, tax
liabilities and other governmental charges), except where the same may be contested in good faith
by appropriate proceedings and for which adequate reserves with respect thereto have been
established in accordance with GAAP.

          SECTION 7.2 Negative Covenants. Until termination of the Commitments and payment
and satisfaction of all Obligations in full:

          (a) Deposit Accounts. The Borrower will not establish or maintain any deposit
account in which proceeds of Collateral are on deposit unless the Agent shall have received
a Blocked Account Agreement, duly executed by the Borrower and the applicable depository
bank, covering such deposit account.

          (b) Use of Proceeds. The Borrower will not (i) use any portion of the proceeds of any
Loan in violation of Section 2.3 or for the purpose of purchasing or carrying any “margin stock”
(as defined in Regulation U of the Federal Reserve Board) in any manner which violates the
provisions of Regulation T, U or X of the Federal Reserve Board or for any other purpose in
violation of any applicable statute or regulation, or of the terms and conditions of this
Agreement, or (ii) take, or permit any Person acting on its behalf to take, any action which could
reasonably be expected to cause this Agreement or any other Loan Document to violate any regulation
of the Federal Reserve Board.

          (c) Cancellation of Debt. The Borrower will not cancel any liability or debt
owed to it in respect of any item of Collateral other than for consideration in the ordinary course
of business.

          (d) Investments. Other than as governed by Section 9.2(c)(I), the Borrower will not,
directly or indirectly, at any time use any funds included in the Collateral to make or hold any
Investment in any Person (whether in cash, securities or other property of any kind) other than
(i) Investments in Cash Equivalents and (ii) so long as no Blocked Account Notice is in effect and
no Event of Default is continuing, Investments in Affiliates of the Borrower.

          (e) Fiscal Year. The Borrower will not change its fiscal year from a year ending
December 31.

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          (f) Accounting Changes. The Borrower will not at any time make or permit
any change in accounting policies or reporting practices, except as required or allowed by
GAAP.

ARTICLE VIII.

FINANCIAL COVENANTS

          Until termination of the Commitments and the payment and satisfaction of all
Obligations in full:

          SECTION 8.1 Fixed
Charge Coverage Ratio. The Fixed Charge Coverage Ratio for
each period set forth below shall not be less than 1.2 to 1.0:

Period

          January 1, 2005 through March 31, 2005

          January 1, 2005 through June 30, 2005

          January 1, 2005 through September 30, 2005

          January 1, 2005 through December 31, 2005 and each twelve-month
period ending on the last day of each calendar quarter thereafter

          SECTION 8.2 Leverage Ratio. The ratio of (a) the outstanding amount of all the
Borrower’s Indebtedness to (b) EBITDA, determined for each period set forth below, shall not be
greater than 4.0 to 1.0:

Period

          January 1, 2005 through March 31, 2005

          January 1, 2005 through June 30, 2005

          January 1, 2005 through September 30, 2005

          January 1, 2005 through December 31, 2005 and each twelve-month period ending on
the last day of each calendar quarter thereafter

For purposes of determining the ratio hereunder for any period of less than twelve months,
EBITDA shall be annualized by (i) dividing the cumulative EBITDA for such period by the
number of months in such period and (ii) multiplying the quotient obtained in clause (i) by
twelve.

          SECTION 8.3 Business Plan. The Agent and the Borrower acknowledge that the
foregoing financial covenants were established by the Agent and the Borrower on the basis of
the Business Plan delivered to the Agent on the Closing Date, after leaving a margin in favor of

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the Borrower which the Agent and the Borrower have agreed is fair. Accordingly, the Agent and
the Borrower have agreed that any failure by the Borrower to comply with the terms of any Financial
Covenant shall be deemed material for purposes of this Agreement.

ARTICLE IX.

EVENTS OF DEFAULT

          SECTION 9.1 Events of Default. The occurrence of any of the following
events shall constitute an “Event of Default”:

          (a) the Borrower shall fail to pay (i) any principal, interest, or unused line fees when
payable, whether at stated maturity, by acceleration, or otherwise, or (ii) any other Obligations
within fifteen Business Days of demand therefor; or

          (b) the Borrower shall (i) default in the performance or observance of any agreement,
covenant, condition, provision or term contained in Section 2.3, 2.4, 2.6, 7.1(a)(i), 7.1(f),
7.1(g)(ii), 7.1(h), 7.1(k), 7.2, 8.1, 8.2, 11.4 or 11.7(a) hereof; or (ii) default in the
performance or observance of any agreement, covenant, condition, provision or term contained in
this Agreement or any other Loan Document (other than those referred to in Sections 9.1 (a) and
(b)(i)) and such failure continues for a period of thirty days from the earlier of the date on
which (A) the Borrower has received notice of such failure in accordance with Section 11.1 and (B)
a Responsible Officer of the Borrower has knowledge of such failure or, if such default is capable
of being cured and the Borrower has undertaken to cure such default within such thirty- day period
and is diligently prosecuting and pursuing such cure thereafter, such failure continues for a
period of sixty days from such date of initial notice or knowledge; or

          (c) the Borrower shall dissolve, wind up or otherwise cease to conduct its business; or

          (d) the Borrower shall become the subject of an Insolvency Event; or

          (e) (i) the Borrower shall fail to make any payment (whether of principal, interest or
otherwise and regardless of amount) in respect of any Material Indebtedness when due (whether at
scheduled maturity or by required prepayment, acceleration, demand or otherwise), or (ii) any event
or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled
maturity or that enables or permits the holder or holders (or a trustee or agent on behalf of such
holder or holders) to declare any Material Indebtedness to be due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity; or

          (f) any representation or warranty made by the Borrower under or in connection with any
Loan Document or amendment or waiver thereof, or in any Financial Statement, report or
certificate delivered in connection therewith, shall prove to have been incorrect in any
material respect when made or deemed made; or

          (g) any judgment or order for the payment of money which, when taken together with all other
judgments and orders rendered against the Borrower, exceeds $1,000,000 in the aggregate shall be
rendered against the Borrower and shall not be stayed, vacated, bonded or discharged within thirty
days; or

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          (h) less than 50.1% in the aggregate of the shares of the voting stock or other voting
equity interests of the Borrower shall be directly or indirectly owned or controlled by Carl C.
Icahn, or any of such shares or equity interests shall become subject to any contractual, judicial
or statutory Lien (other than a Permitted Lien or a pledge in favor of an Affiliate of the
Borrower); or

          (i) any of the events specified in clauses (1) through (8) of Section 7.1(h)(iii)(A)
shall occur and such event, together with any other of such events, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect; or

          (j) any covenant, agreement or obligation of the Borrower contained in or evidenced by
any of the Loan Documents shall cease to be enforceable in any material respect, or shall be
determined to be unenforceable in any material respect, in accordance with its terms; the Borrower
shall deny or disaffirm its obligations under any of the Loan Documents or any Liens granted in
connection therewith or shall otherwise challenge any of its obligations under any of the Loan
Documents; or any Liens granted on any of the Collateral shall be determined to be void, voidable
or invalid, are subordinated or are not given the priority contemplated by this Agreement or any
other Loan Document; or

          (k) this Agreement shall for any reason cease to create a valid and perfected
first priority Lien on the Collateral purported to be covered thereby; or

          (l) the independent public accountants for the Borrower shall deliver a
Qualified opinion on any Financial Statement; or

          (m) the occurrence of any event or condition that has a Material Adverse
Effect.

          SECTION 9.2 Acceleration, Termination and Demand Rights. During the continuance
of an Event of Default, the Agent may, or upon the request of the Required Lenders, the Agent shall
take any or all of the following actions, without prejudice to the rights of the Agent to enforce
its claims against the Borrower:

          (a) Acceleration. To declare all Obligations immediately due and payable (except with
respect to any Event of Default with respect to the Borrower specified in Section 9.1(d), in which
case all Obligations shall automatically become immediately due and payable) without presentment,
demand, protest or any other action or obligation of the agent or any Lender.

          (b) Termination of Commitments. To declare the Commitments immediately terminated
(except with respect to any Event of Default with respect to the Borrower set forth in Section
9.1(d), in which case the Commitments shall automatically terminate) and, at all times thereafter,
any Loan made by a Lender or the Agent shall be in such Lender’s or the Agent’s sole and absolute
discretion. Notwithstanding any such termination, until all Obligations shall have been fully and
indefeasibly paid and satisfied, the Agent shall retain all security in existing and future
Receivables included in the Collateral and existing and future Inventory of the Borrower and all
other Collateral held by it hereunder.

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          (c)
Demand Rights. Notwithstanding anything herein to the contrary, the
Borrower shall, immediately upon the Borrower’s decision to take any of the following actions (and
in any event, not less than ten days before the taking of any such action), deliver to the Agent
written notice of such proposed action (together with, in the case of any action specified in
clause (A), (F), (H) or (I) hereof, such financial information as is necessary to determine the
Borrower’s compliance, on a pro forma basis giving effect to such action, with Section 8.1 or 8.2,
as the case may be), and, upon the giving of such notice (or, if such notice is not given for any
reason, the occurrence of any such action), the Agent may, or upon the request of the Required
Lenders, the Agent shall (i) declare all Obligations immediately due and payable without
presentment, demand, protest or any other action or obligation of the Agent or any Lender or
(ii) declare the Commitments immediately terminated and, notwithstanding any such termination,
until all the Obligations shall have been fully and indefeasibly paid and satisfied, the Agent
shall retain all security in existing and future Collateral:

     (A)
Indebtedness. The Borrower shall, directly or indirectly, at
any time create, incur, assume or permit to exist any Indebtedness that
causes the ratio of (1) the aggregate outstanding amount of the Borrower’s
Indebtedness to (2) EBITDA, determined on a year-to-date basis (or, if
after December 31,2005, the twelve-month period) ending on the last day of
the month preceding the month in which such Indebtedness is created,
incurred, assumed or permitted to exist (which determination shall be
made, if before December 31,2005, by annualizing EBITDA in a manner
consistent with the second sentence of Section 8.2), to be greater than 4.0
to 1.0.

     (B)
Contingent Obligations. Except as relates to the
Indebtedness reflected in the Financial Statements delivered under Section
5.1 (a)(vii), the Borrower shall, directly or indirectly, incur, assume, or
suffer to exist any Contingent Obligation, excluding indemnities given in
connection with (1) the Indebtedness reflected in the Financial Statements
delivered under Section 5.1(a)(vii) and (2) this Agreement or the other Loan
Documents in favor of the Agent and the Lenders.

     (C)
Corporate Changes, Etc. The Borrower shall, directly or
indirectly, merge or consolidate with any Person or amend, alter or modify
its Governing Documents in a manner adverse to the Agent or the Lenders, or
liquidate or dissolve itself (or suffer any liquidation or
dissolution).

     (D)
Change in Nature of Business. The Borrower shall make any
material change in the nature of its business as carried on at the date
hereof or enter into any new line of business that is materially adverse to
the Agent and the Lenders.

     (E)
Sales. Etc. of Assets. The Borrower shall, directly or
indirectly, in any fiscal year, sell, transfer or otherwise dispose of, or
grant

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any option or other right to purchase or otherwise acquire, (1) any of the Collateral (other
than sales of Inventory in the ordinary course of business) or (2) all or substantially all of its
assets.

     (F)
Loans to Other Persons. The Borrower shall make any loan or advance any credit to
any Affiliate or other Person that causes the Fixed Charge Coverage Ratio, determined on a
year-to-date basis (or, if after December 31, 2005, the twelve-month period) ended on the last day
of the month preceding the month in which such loan is made or such credit is advanced, to be less
than 1.2 to 1.0.

     (G)
Liens, Etc. The Borrower shall incur, assume or suffer to exist any Lien on or
with respect to any of the Collateral, other than:

     (1) Liens created hereunder; and

     (2) Permitted Liens.

     (H)
Dividends, Stock Redemptions, Distributions, Etc. The Borrower shall directly
or indirectly, pay any dividends or distributions on, purchase, redeem or retire any shares of any
class of its capital stock or other equity interests or any warrants, options or rights to purchase
any such capital stock or other equity interests, whether now or hereafter outstanding (“Stock”),
or make any payment on account of or set apart assets for a sinking or other analogous fund for,
the purchase, redemption, defeasance, retirement or other acquisition of its Stock, or make any
other distribution in respect thereof, either directly or indirectly, whether in cash or property
or in obligations of the Borrower, in each case that causes the Fixed Charge Coverage Ratio,
determined on a year-to-date basis (or, if after December 31, 2005, the twelve-month period) ending
on the last day of the month preceding the month in which such payment, purchase, redemption,
defeasance, retirement, acquisition or distribution is made, to be less than 1.2 to 1.0.

     (I)
Acquisition of Stock or Assets. The Borrower shall acquire or commit or
agree to acquire any stock, securities or assets of any other Person other than

     (1) acquisitions of Equipment and Inventory acquired in the ordinary course of
business;

     (2) acquisitions of securities in Affiliates of the Borrower;

     (3) acquisitions of Cash Equivalents;

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     (4) acquisitions of securities that do not violate Regulation T,
U or X of the Federal Reserve Board or any other
Requirement of Law;

     (5) acquisitions that would not result in a material
adverse change in the nature of the Borrower’s business as carried on
at the date hereof or that would result in the operation of a new
line of business that is materially adverse to the Agent and the
Lenders;

     (6) acquisitions of Equipment to replace existing
Equipment; and

     (7) other acquisitions which, after giving effect thereto, would
not have a Material Adverse Effect, result in a default under Section
8.1 or 8.2 on a pro forma basis or otherwise result in a Default or
an Event of Default.

The Borrower’s failure to repay all the Obligations upon a demand hereunder shall constitute an
Event of Default. Any failure of the Agent to declare the Obligations immediately due and payable
following the delivery of a notice by the Borrower under clause (A), (F), (H) or (I) hereof shall
not be deemed to waive any Default or Event of Default arising under Section 8.1 or 8.2 as a result
of the action specified in such notice.

          SECTION
9.3 Other Remedies.

          (a) During
the continuance of an Event of Default, the Agent shall have all rights and
remedies with respect to the Obligations and the Collateral under applicable law and the Loan
Documents, and the Agent may do any or all of the following:

     (i) remove for copying all documents, instruments, files and records
(including the copying of any computer records) relating to the Borrower’s
Receivables or use (at the expense of the Borrower) such supplies or space of the
Borrower at the Borrower’s places of business necessary to administer, enforce and
collect such Receivables including, without limitation, any supporting obligations;

     (ii)
accelerate or extend the time of payment, compromise, issue credits,
or bring suit on a Borrower’s Receivables (in the name of the Borrower or the Agent)
and otherwise administer and collect such Receivables;

     (iii) sell, assign and deliver the Borrower’s Receivables with or without
advertisement, at public or private sale, for cash, on credit or otherwise, subject
to applicable law; and

     (iv) foreclose the security interests created pursuant to the Loan
Documents by any available procedure, or take possession of any or all of the

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Collateral, without judicial process and enter any premises where any Collateral
may be located for the purpose of taking possession of or removing the same.

This subsection (a) shall govern only those Receivables of the Borrower included in the
Collateral.

          (b) The Agent may bid or become a purchaser at any sale, free from any right of
redemption, which right is expressly waived by the Borrower. If notice of intended disposition of
any Collateral is required by law, it is agreed that ten days’ notice shall constitute reasonable
notification. The Borrower will assemble the Collateral in its possession and make it available at
such locations as the Agent may specify, whether at the premises of the Borrower or elsewhere, and
will make available to the Agent the premises and facilities of the Borrower for the purpose of the
Agent’s taking possession of or removing the Collateral or putting the Collateral in saleable form.
The Agent may sell the Collateral or any part thereof in one or more parcels at public or private
sale, at any exchange, broker’s board or at any of the Agent’s offices or elsewhere, for cash, on
credit or for future delivery, and upon such other terms as the Agent may deem commercially
reasonable. The Agent shall not be obligated to make any sale of Collateral regardless of notice of
sale having been given. The Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned. The Borrower hereby grants the Agent a
license, during the continuation of an Event of Default, to enter and occupy any of the Borrower’s
leased or owned premises and facilities, without charge, to exercise any of the Agent’s rights or
remedies.

          SECTION
9.4 License for Use of Software and Other Intellectual Property. The
Borrower hereby grants to the Agent a license or other right to use, during the continuation of an
Event of Default, without charge, all computer software programs, data bases, processes,
trademarks, tradenames, copyrights, labels, trade secrets, service marks, advertising materials and
other rights, assets and materials used by the Borrower in connection with its businesses or in
connection with the Collateral.

          SECTION
9.5 No Marshalling; Deficiencies; Remedies Cumulative. The Agent shall
have no obligation to marshal any Collateral or to seek recourse against or satisfaction of any of
the Obligations from one source of Collateral or from the Borrower before seeking recourse against
or satisfaction from another source of Collateral or from the Borrower. The net cash proceeds
resulting from the Agent’s exercise of any of the foregoing rights to liquidate all or
substantially all of the Collateral, including any and all Collections (after deducting all of the
Agents expenses related thereto), shall be applied by the Agent to such of the Obligations and in
such order as the Agent shall elect in its sole and absolute discretion, whether due or to become
due. The Borrower shall remain liable to the Agent and the Lenders for any deficiencies, and the
Agent and the Lenders in turn agree to remit to the Borrower or its successor or assign any surplus
resulting therefrom. All of the Agent‘s and the Lenders’ remedies under the Loan Documents shall
be cumulative, may be exercised simultaneously against any Collateral and the Borrower or in such
order and with respect to such Collateral or the Borrower as the Agent may deem desirable, and are
not intended to be exhaustive.

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          SECTION
9.6 Waivers. Except as may be otherwise specifically provided
herein or in any other Loan Document, the Borrower hereby waives any right to a judicial or other
hearing with respect to any action or prejudgment remedy or proceeding by the Agent to take
possession, exercise control over, or dispose of any item of Collateral in any instance
(regardless of where the same may be located) where such action is permitted under the terms of
this Agreement or any other Loan Document or by applicable law or of the time, place or terms of
sale in connection with the exercise of the Agent’s rights hereunder and also waives any bonds,
security or sureties required by any statute, rule or other law as an incident to any taking of
possession by the Agent of any Collateral. The Borrower also waives any damages (direct,
consequential or otherwise) occasioned by the enforcement of the Agent’s rights under this
Agreement or any other Loan Document including the taking of possession of any Collateral or the
giving of notice to any account debtor or the collection of any Receivable of the Borrower. The
Borrower also consents that the Agent may, during the continuation of an Event of Default, enter
upon any premises owned by or leased to it without obligations to pay rent or for use and
occupancy, through self-help, without judicial process and without having first obtained an order
of any court. These waivers and all other waivers provided for in this Agreement and the other
Loan Documents have been negotiated by the parties, and the Borrower acknowledges that it has been
represented by counsel of its own choice, has consulted such counsel with respect to its rights
hereunder and has freely and voluntarily entered into this Agreement and the other Loan Documents
as the result of arm’s-length negotiations.

          SECTION
9.7 Further Rights of the Agent.

          (a)
Further Assurances. The Borrower shall do all things and shall execute and
deliver all documents and instruments reasonably requested by the Agent to protect or perfect any
Lien (and the priority thereof other than with respect to Permitted Liens) of the Agent on the
Collateral.

          (b)
Insurance; Etc. If the Borrower shall fail to purchase or maintain insurance
(where applicable), or to pay any tax, assessment, governmental charge or levy, except as the same
may be otherwise permitted hereunder or which is being  contested in good faith by appropriate
proceedings and for which adequate reserves have been established in accordance with GAAP, or if
any Lien prohibited hereby shall not be paid in full and discharged or if the Borrower shall fail
to perform or comply with any other covenant, promise or obligation to the Agent or the Lenders
hereunder or under any other Loan Document, the Agent may (but shall not be required to), if the
Borrower has not done so within ten days of the Agent’s written request, perform, pay, satisfy,
discharge or bond the same for the account of the Borrower, and all amounts so paid by the Agent
or the Lenders shall be treated as an Agent Loan or a Revolving Credit Loan, as the case may be,
comprised of Base Rate Advances hereunder and shall
constitute part of the Obligations.

          SECTION 9.8 Interest After Event of Default. The Borrower agrees and acknowledges
that the additional interest and fees that may be charged under Section 4.2 (a) are an inducement
to the Agent and the Lenders to make Advances and that the Agent and the Lenders would not
consummate the transactions contemplated by this Agreement without the inclusion of such
provisions, (b) are fair and reasonable estimates of the Agent’s and the

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Lenders’ costs of administering the credit facility upon an Event of Default, and (c) are
intended to estimate the Agent’s and the Lenders’ increased risks upon an Event of Default.

ARTICLE X.

THE AGENT

          SECTION
10.1 Appointment of Agent.

          (a) Each Lender hereby designates NFBC as its agent and irrevocably authorizes it to take
action on such Lender’s behalf under the Loan Documents and to exercise the powers and to perform
the duties described therein and to exercise such other powers as are reasonably incidental
thereto. The Agent may perform any of its duties by or through its agents or employees.

          (b) The provisions of this Article are solely for the benefit of the Agent and the Lenders,
and the Borrower shall not have any rights as third party beneficiaries of any of the provisions
hereof. The Agent shall act solely as agent of the Lenders and assume no obligation toward or
relationship of agency or trust with or for the Borrower.

          SECTION
10.2 Nature of Duties of Agent. The Agent shall have no duties or
responsibilities except those expressly set forth in the Loan Documents. Neither the Agent nor any
of its officers, directors, employees or agents shall be liable for any action taken or omitted by
it or them as such hereunder or in connection herewith, unless caused by its or their gross
negligence or willful misconduct. The duties of the Agent shall be mechanical and. administrative
in nature. The Agent does not have a fiduciary relationship with or any implied duties to any
Lender or any participant of any Lender.

          SECTION
10.3 Lack of Reliance on Agent.

          (a) Independently and without reliance upon the Agent, each Lender, to the extent it deems
appropriate, has made and shall continue to make (i) its own independent investigation of the
financial or other condition and affairs of the Borrower in connection with taking or not taking
any action related hereto and (ii) its own appraisal of the creditworthiness of the Borrower, and,
except as expressly provided in this Agreement, the Agent shall have
no duty or responsibility,
either initially or on a continuing basis, to provide any Lender with any credit
or other information with respect thereto, whether coming into its possession before the making of
the initial Loans or at any time or times thereafter.

          (b) The Agent shall not be responsible to any Lender for any recitals, statements,
information, representations or warranties herein or in any document, certificate or other writing
delivered in connection herewith or for the execution, effectiveness, genuineness, validity,
enforceability, collectibility, priority or sufficiency of this Agreement or the Notes or the
financial or other condition of the Borrower. The Agent shall not be required to make any inquiry
concerning either the performance or observance of any of the terms, provisions or conditions of
this Agreement or any other Loan Document, the financial condition of the Borrower, or the
existence or possible existence of any Default or Event of Default.

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          SECTION
10.4 Certain Rights of the Agent. The Agent may request instructions from the
Required Lenders at any time. If the Agent requests instructions from the Required Lenders with
respect to any action or inaction, it shall be entitled to await instructions from the Required
Lenders. No Lender shall have any right of action based upon the Agent’s action or inaction in
response to instructions from the Required Lenders.

          SECTION
10.5 Reliance by Agent. The Agent may rely upon any written or telephonic
communication it believes to be genuine and to have been signed, sent or made by the proper Person.
The Agent may obtain the advice of legal counsel (including counsel for the Borrower with respect
to matters concerning the Borrower), independent public accountants and other experts selected by
it and shall have no liability for any action or inaction taken or omitted to be taken by it in
good faith based upon such advice.

          SECTION
10.6 Indemnification of Agent. To the extent the Agent is not
reimbursed and indemnified by the Borrower, each Lender will reimburse and indemnify the Agent to
the extent of such Lender’s Pro Rata Share (determined as of the time that such indemnity payment
is sought) for any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses (including counsel fees and disbursements) or disbursements of
any kind or nature whatsoever which may be imposed on, incurred by or asserted against the Agent in
performing its duties hereunder or otherwise relating to the Loan Documents unless resulting from
the Agent’s gross negligence or willful misconduct. The agreements contained in this Section shall
survive any termination of this Agreement and the other Loan Documents and the payment in full of
the Obligations.

          SECTION
10.7 The Agent in Its Individual Capacity. In its individual capacity, the
Agent shall have the same rights and powers hereunder as any other Lender or holder of a Note or
participation interest and may exercise the same as though it was not performing the duties
specified herein. The terms “Lenders,” “Required Lenders,” “holders of Notes,” or any similar terms
shall, unless the context clearly otherwise indicates, include NFBC in its individual capacity. The
Agent and its Affiliates may accept deposits from, lend money to, acquire equity interests in, and
generally engage in any kind of banking, trust, financial advisory or other business with the
Borrower or any Affiliate of the Borrower as if it were not performing the duties specified herein,
and may accept fees and other consideration from the Borrower for services in connection with this
Agreement and otherwise without having to account for the same to the Lenders.

          SECTION
10.8 Holders of Notes. The Agent may deem and treat the payee of any Note
as the owner thereof for all purposes hereof unless and until a written notice of the assignment or
transfer thereof shall have been filed with the Agent. Any request, authority or consent of any
Person who, at the time of making such request or giving such authority or consent, is the holder
of any Note, shall be conclusive and binding on any subsequent holder, transferee or assignee of
such Note or of any Note or Notes issued in exchange therefor.

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          SECTION
10.9 Successor Agent.

          (a) The Agent may, upon twenty Business Days’ notice to the Lenders and the
Borrower, resign by giving written notice thereof to the Lenders and the Borrower. Any such
resignation shall be effective upon the appointment of a successor Agent.

          (b) Upon receipt of notice of resignation by the Agent, the Required Lenders
may appoint a successor agent which shall also be a Lender. If a successor agent has not
accepted its appointment within fifteen Business Days, then the retiring agent may, on behalf of
the Lenders, appoint a successor agent which shall be subject to the written approval of the
Borrower, which approval shall not be unreasonably withheld and shall be delivered to the Required
Lenders within ten Business Days after the Borrower’s receipt of notice of a proposed
successor agent.

          (c) Upon its acceptance of the agency hereunder, such successor agent shall succeed to
and become vested with all the rights, powers, privileges and duties of the retiring agent, and the
retiring agent shall be discharged from its duties and obligations under this Agreement. The
retiring agent shall continue to have the benefit of the provisions of this Article for any action
or inaction while it was agent.

          SECTION
10.10 Collateral Matters.

          (a) Except as otherwise set forth herein, any action or exercise of powers by the Agent
provided under the Loan Documents, together with such other powers as are reasonably incidental
thereto, shall be deemed authorized by and binding upon all of the Lenders. At any time and without
notice to or consent from any Lender, the Agent may take any action necessary or advisable to
perfect and maintain the perfection of the Liens upon the Collateral.

          (b) The Agent is authorized to release any Lien granted to or held by it upon any Collateral
(i) upon termination of the Commitments and payment and satisfaction of all of the Obligations,
(ii) required to be delivered from permitted sales of Collateral hereunder, if any, upon receipt of
the proceeds by the Agent (or, if permitted hereunder, the applicable Borrower) or (iii) if the
release can be and is approved by the Required Lenders (or all the Lenders, if so required under
Section 11.5). The Agent may request and the Lenders will provide confirmation of the Agent’s
authority to release particular types or items of Collateral.

          (c) Upon any sale or transfer of Collateral which is expressly permitted pursuant to the terms
of this Agreement, or consented to in writing by the Required Lenders or all of the Lenders, as
applicable, and upon at least five Business Days’ prior written request by the Borrower, the Agent
shall (and is hereby irrevocably authorized by the Lenders to) execute such documents as may be
necessary to evidence the release of the Liens granted to the Agent for the benefit of the Lenders
herein or pursuant hereto upon the Collateral that was sold or transferred, provided that
(i) the Agent shall not be required to execute any such document on terms which, in the Agent’s
reasonable opinion, would expose the Agent to liability or create any obligation or entail any
consequence other than the release of such Liens without recourse or warranty and (ii) such release
shall not in any manner discharge, affect or impair the Obligations or any Liens upon (or
obligations of the Borrower in respect of) all interests retained by the

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Borrower, including (without limitation) the proceeds of the sale, all of which shall continue to
constitute part of the Collateral. In the event of any sale or transfer of Collateral, or any
foreclosure with respect to any of the Collateral, the Agent shall be authorized to deduct all of
the expenses reasonably incurred by the Agent from the proceeds of any such sale, transfer or
foreclosure.

          (d) The Agent shall not have any obligation to assure that the Collateral exists or is
owned by the Borrower, that the Collateral is cared for, protected or insured, or that the Liens
on the Collateral have been created or perfected or have any particular priority. With respect to
the Collateral, the Agent may act in any manner it may deem appropriate, in its sole discretion,
given NFBC’s own interest in the Collateral as one of the Lenders, and it shall have no duty or
liability whatsoever to the Lenders with respect thereto, except for its gross
negligence or willful misconduct.

          SECTION
10.11 Actions with Respect to Defaults. In addition to the Agent’s right
to take actions on its own accord as permitted under this Agreement, the Agent shall take such
action with respect to an Event of Default as shall be directed by the Required Lenders. Until the
Agent shall have received such directions, the Agent may act or not act as it deems advisable and
in the best interests of the Lenders.

          SECTION
10.12 Delivery of Information. The Agent shall not be required to deliver to
any Lender originals or copies of any documents, instruments, notices, communications or other
information received by the Agent from the Borrower, the Required Lenders, any Lender or any other
Person under or in connection with this Agreement or any other Loan Document except (i) for the
Financial Statements, Business Plans, certificates and reports received by the Agent from the
Borrower under Section 7.1(k)(i), (ii), (iii), (iv), (v) or (viii); (ii) for any notice of the
occurrence of a Default or an Event of Default received by the Agent from the Borrower under
Section 7.2(h)(i); (iii) as otherwise specifically provided in this Agreement or any other Loan
Document; and (iv) as specifically requested from time to time in writing by any Lender with
respect to a specific document, instrument, notice or other written communication received by and
in the possession of the Agent at the time of receipt of such request and then only in accordance
with such specific request.

ARTICLE XI.

GENERAL PROVISIONS

          SECTION
11.1 Notices. Except as otherwise provided herein, all notices and other
communications hereunder shall be in writing and sent by certified or registered mail, return
receipt requested, by overnight delivery service, with all charges prepaid, by hand delivery, or
by telecopier followed by a hard copy sent by regular mail, if to the Agent, then to North Fork
Business Capital Corporation, 1415 West 22nd Street, Suite 750E, Oak Brook, Illinois
60523, Telecopy: (630) 684-0228, Attn.: Regional Manager, with a
copy to North Fork Business
Capital Corporation, 275 Broadhollow Road, P.O. Box 8914, Melville, New York 11747, Telecopy:
(631) 501-5524, Attn.: General Counsel, if to any Lender, then to its address specified in
Schedule 1 or in the Assignment and Acceptance under which it became a party hereto, and if to the
Borrower, then to 100 Clark Street, St. Charles, Missouri 63301, Telecopy: (636) 940-5109, Attn.:
Mr. Umesh Choksi, with a copy to Icahn Associates Corp., 767 Fifth

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Avenue, 47th Floor, New York, New York 10153, Telecopy: (212) 668-1158, Attn.: Jesse A.
Lynn, Esq., or, in each case, to such other address as the Borrower, a Lender or the Agent may
specify to the other parties in the manner required hereunder. All such notices and
correspondence shall be deemed given (i) if sent by certified or registered mail, three Business
Days after being postmarked, (ii) if sent by overnight delivery service or by hand delivery, when
received at the above stated addresses or when delivery is refused and (iii) if sent by telecopier
transmission, when such transmission is confirmed.

          SECTION
11.2 Delays; Partial Exercise of Remedies. No delay or omission of the
Agent or any Lender to exercise any right or remedy hereunder shall impair any such right or
operate as a waiver thereof. No single or partial exercise by the Agent or any Lender of any right
or remedy shall preclude any other or further exercise thereof, or preclude any other right or
remedy.

          SECTION 11.3 Right of Setoff. In addition to and not in limitation of all rights
of offset that the Agent, any Lender or any of their respective Affiliates may have under
applicable law, while an Event of Default is continuing, the Agent, the Lenders and their
respective Affiliates shall have the right to set off and apply any and all deposits (general or
special, time or demand, provisional or final, or any other type) at any time held and any other
Indebtedness at any time owing by the Agent, the Lenders or any of their respective Affiliates to
or for the credit or the account of the Borrower or the Borrower’s Subsidiaries against any and all
of the Obligations. In the event that the Agent or any Lender exercises any of its rights under
this Section 11.3, the Agent or such Lender shall provide notice to the Borrower of such exercise,
provided that, without prejudice to the Borrower’s right to assert a claim for any damages
it may incur as a result of any failure by the Agent or such Lender to give such notice, the
failure to give such notice shall not affect the validity of the exercise of such rights.

          SECTION
11.4 Indemnification; Reimbursement of Expenses of Collection.

          (a) The Borrower hereby agrees that, whether or not any of the transactions contemplated
by this Agreement or the other Loan Documents are consummated, the Borrower will indemnify, defend
and hold harmless (on an after-tax basis) the Agent, the Lenders and their respective successors,
assigns, directors, officers, agents, employees advisors, shareholders and attorneys (each, an
“Indemnified Party”) from and against any and all losses, claims, damages, liabilities,
deficiencies, obligations, fines, penalties, actions (whether threatened or existing), judgments,
suits (whether threatened or existing) or expenses (including, without limitation, reasonable fees
and disbursements of counsel, experts, consultants and other professionals) incurred by any of them
(collectively, “Claims”) (except, in the case of each Indemnified Party, to the extent that any
Claim is determined in a final and non-appealable judgment by a court of (competent jurisdiction to
have directly resulted from such Indemnified Party’s gross negligence or willful misconduct)
arising out of or by reason of (i) any litigation, investigation, claim or proceeding related to
(A) this Agreement, any other Loan Document or the transactions contemplated hereby or thereby, (B)
any actual or proposed use by the Borrower of the proceeds of the Loans or (C) the Agent’s or any
Lender’s entering into this Agreement, the other Loan Documents or any other agreements and
documents relating hereto (other than consequential damages and loss of anticipated profits or
earnings), including, without limitation, amounts paid in settlement (provided that any such
settlement has been approved by the Borrower), court costs

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and the fees and disbursements of counsel incurred in connection with any such litigation,
investigation, claim or proceeding, (ii) any remedial or other action taken or required to be taken
by the Borrower in connection with compliance by the Borrower, or any of its properties, with any
federal, state or local Environmental Laws and (iii) any pending, threatened or actual action,
claim, proceeding or suit by any shareholder or director of the Borrower or any actual or purported
violation of the Borrower’s Governing Documents or any other agreement or instrument to which the
Borrower is a party or by which any of its properties is bound. In addition, the Borrower shall,
upon demand, pay to the Agent all costs and expenses incurred by the Agent (including the
reasonable fees and disbursements of counsel and other professionals) in connection with the
preparation, execution, delivery, administration, modification and amendment of the Loan Documents,
and pay to the Agent and each Lender all costs and expenses (including the reasonable fees and
disbursements of counsel and other professionals) paid or incurred by the Agent or such Lender in
(A) enforcing or defending its rights under or in respect of this Agreement, the other Loan
Documents or any other document or instrument now or hereafter executed and delivered in
connection herewith, (B) collecting the Obligations or otherwise administering this Agreement and
(C) foreclosing or otherwise realizing upon the Collateral or any part thereof. If and to the
extent that the obligations of the Borrower hereunder are unenforceable for any reason, the
Borrower hereby agree to make the maximum contribution to the payment and satisfaction of such
obligations that is permissible under applicable law.

          (b) The Borrower’ obligations under Sections 4.6 and 4.7 and this Section 11.4 shall
survive any termination of this Agreement and the other Loan Documents, the termination and the
payment in full of the Obligations, and are in addition to, and not in substitution of, any of the
other Obligations.

          SECTION
11.5 Amendments, Waivers and Consents. No amendment or waiver of any provision of
this Agreement or any other Loan Document, or consent to any departure by the Borrower therefrom,
shall in any event be effective unless the same shall be in writing and signed by the Borrower and
the Required Lenders (or by the Agent on their behalf) without taking into account the Commitments
or Loans held by Defaulting Lenders or the Borrower or any of its Affiliates (determined without
giving effect to the proviso to the definition of “Affiliates”), and then such amendment, waiver
or consent shall be effective only in the specific instance and for the specific purpose for which
given; provided, however, that no amendment, waiver or consent shall, unless in writing
and signed by the Borrower and all the Lenders (other than any Defaulting Lender or the Borrower
or any of its Affiliates (determined without giving effect to the proviso to the definition of
“Affiliates”)), do any of the following at any time: (a) change the number of Lenders that shall
be required for the Lenders or any of them to take any action hereunder; (b) amend the definition
of “Required Lenders”; (c) amend this Section 11.5; (d) reduce the amount of principal of, or
interest on, or the interest rate applicable to, the Loans or any fees or other amounts payable
hereunder, (e) postpone any date on which any payment of principal of, or interest on, the Loans
or any fees or other amounts payable hereunder is required to be made; (f) release all or
substantially all the Collateral; or (g) amend the definition of “Borrowing Base” if the effect
thereof would be to increase the amount of Loans available to the
Borrower; provided, further that no amendment, waiver or consent shall, unless in writing and signed by (i) a
Lender, change the Pro Rata Share or increase the Commitment of such Lender, and (ii) the Agent,
in addition to the Lenders required above, to

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take any such action that affects the rights or duties of the Agent under this Agreement
or any other Loan Document.

          SECTION
11.6 Nonliability of Agent and Lenders. The relationship among the
Borrower and each Lender shall be solely that of borrower and lender. Neither the Agent nor any
Lender shall have any fiduciary responsibilities to the Borrower, Neither the Agent nor any Lender
undertakes any responsibility to the Borrower to review or inform the Borrower of any matter in
connection with any phase of the Borrower’ business or operations.

          SECTION 11.7 Assignments and Participations.

          (a) Borrower Assignment. None of the Borrower) shall assign this Agreement or any of
its rights or obligations hereunder without the prior written consent of the Agent and the Required
Lenders.

          (b) Lender Assignments. Each Lender may, with the consent of the Agent (not to be
unreasonably withheld), assign to one or more Eligible Assignees (or, if an Event of Default has
occurred and is continuing, to one or more other Persons) all or a portion of its rights and
obligations under this Agreement, the Notes and the other Loan Documents upon execution and
delivery to the Agent, for its acceptance and recording in the Register, of an Assignment and
Acceptance, together with surrender of any Note or Notes subject to such assignment and a
processing and recordation fee payable to the Agent for its account of $3,500. No such assignment
shall be for less than $5,000,000 of the Commitments or Loans unless it is to another Lender, and
each such assignment shall be of a uniform, and not a varying, percentage of all rights and
obligations in respect of the Commitments and the Revolving Credit Loans. Upon the execution and
delivery to the Agent of an Assignment and Acceptance and the payment of the recordation fee to the
Agent, from and after the date specified as the effective date in the Assignment and Acceptance
(the “Acceptance Date”), (i) the assignee thereunder shall be a party hereto, and, to the extent
that rights and obligations hereunder have been assigned to it under such Assignment and
Acceptance, such assignee shall have the rights and obligations of a Lender hereunder and (ii) the
assignor thereunder shall, to the extent that rights and obligations hereunder have been assigned
by it under such Assignment and Acceptance, relinquish its rights (other than any rights it may
have under Sections 4.6, 4.7 and 11.4, which shall survive such assignment) and be released from
its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all
or the remaining portion of an assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto).

          (c) Agreements of Assignee. By executing and delivering an Assignment and Acceptance,
the assignee thereunder confirms and agrees as follows: (i) other than as provided in such
Assignment and Acceptance, the assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations made in or in
connection with this Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement, the Notes or any other Loan Documents, (ii) such assigning
Lender makes no representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or the performance or observance by the Borrower of any of its
obligations under this Agreement or any other Loan Document, (iii) such assignee confirms that it
is an Eligible Assignee and has received a copy of this Agreement,

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together with copies of the Financial Statements referred to in Section 6.1(i), the Financial
Statements delivered pursuant to Section 7.1(k), if any, and such other documents and information
as it has deemed appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance, (iv) such assignee will, independently and without reliance upon the
Agent, such assigning Lender or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in taking or not
taking action under this Agreement, (v) such assignee appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers under this Agreement as are
delegated to the Agent by the terms hereof, together with such powers as are reasonably incidental
thereto, and (vi) such assignee agrees that it will perform in accordance with their terms all of
the obligations which by the terms of this Agreement are required to be performed by it as a
Lender.

          (d) Agent’s Register. The Agent shall maintain a register of the names and addresses
of the Lenders, their Commitments and the principal amount of their Loans (the “Register”). The
Agent shall also maintain a copy of each Assignment and Acceptance delivered to and accepted by it
and modify the Register to give effect to each Assignment and Acceptance. The entries in the
Register shall be conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Agent and the Lenders may treat each Person whose name is recorded in the Register
as a Lender hereunder for all purposes of this Agreement. The Register and copies of each
Assignment and Acceptance shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice. Upon its receipt of each
Assignment and Acceptance and surrender of the affected Note or Notes subject to such assignment,
the Agent will give prompt notice thereof to the Borrower. Within five Business Days after its
receipt of such notice, the Borrower shall execute and deliver to the Agent a new Note to the
order of the assignee in the amount of the applicable Commitment or Loans assumed by it and to the
assignor in the amount of the applicable Commitment or Loans retained by it, if any. Such new Note
or Notes shall re-evidence the indebtedness outstanding under the surrendered Note or Notes, shall
be in an aggregate principal amount equal to the aggregate principal amount of such surrendered
Note or Notes and shall be dated as of the Acceptance Date. The Agent shall be entitled to rely
upon the Register exclusively for purposes of identifying the Lenders hereunder.

          (e) Lender Participations. Each Lender may sell participations to one or more parties
(each, a “Participant”) in or to all or a portion of its rights and obligations under this
Agreement, the Notes and the other Loan Documents. Notwithstanding a Lender’s sale of a
participation interest, such Lender’s obligations hereunder shall remain unchanged. The
Borrower, the Agent, and the other Lenders shall continue to deal solely and directly with such
Lender. No Lender shall grant any Participant the right to approve any amendment or waiver of this
Agreement except to the extent such amendment or waiver would (i) increase the Commitment of the
Lender from which the Participant purchased its participation interest; (ii) reduce the principal
of, or rate or amount of interest on, the Loans subject to such participation interest; or (iii)
postpone any date fixed for any payment of principal of, or interest on, the Loans subject to such
participation interest. To the extent permitted by applicable law, each Participant shall also be
entitled to the benefits of Section 11.3 as if it were a Lender, provided that such
Participant agrees to be subject to the last sentence of Section 2.8(b) as if it were a Lender.

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          (f) Securities Laws. Each Lender agrees that it will not make any
assignment hereunder in any manner or under any circumstances that would require registration or
qualification of, or filings in respect of, any Loan, Note or other Obligation under the securities
laws of the United States or of any other jurisdiction.

          (g) Information. In connection with their efforts to assign their rights or
obligations or sell participations pursuant to Sections 11.7(b) and (e), the Agent and the Lenders
may disclose any information they have, now or in the future, with respect to the business of the
Borrower to prospective assignees or purchasers, provided that such disclosure is subject
to written confidentiality arrangements customary for assignment or participation transactions of
such type.

          (h) Pledge to Federal Reserve Bank. 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.

          SECTION
11.8 Counterparts; Telecopied Signatures. This Agreement and any waiver or
amendment hereto may be executed in counterparts and by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. This Agreement and each of the other Loan
Documents may be executed and delivered by telecopier or other facsimile transmission all with the
same force and effect as if the same was a fully executed and delivered original manual
counterpart.

          SECTION 11.9 Severability. In case any provision in or obligation under this
Agreement, any Note or any other Loan Document shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations,
or of such provision or obligation in any other jurisdiction, shall not in any way be affected or
impaired thereby.

          SECTION 11.10 Maximum Rate. Notwithstanding anything to the contrary contained
elsewhere in this Agreement or in any other Loan Document, the parties hereto hereby agree that all
agreements between them under this Agreement and the other Loan Documents, whether now existing or
hereafter arising and whether written or oral, are expressly limited so that in no contingency or
event whatsoever shall the amount paid, or agreed to be paid, to the Agent or any Lender for the
use, forbearance, or detention of the money loaned to the Borrower and evidenced hereby or thereby
or for the performance or payment of any covenant or obligation contained herein or therein, exceed
the maximum non-usurious interest rate, if any, that at any time or from time to time may be
contracted for, taken, reserved, charged or received on the Obligations, under the laws of the
State of New York (or the laws of any other jurisdiction whose laws may be mandatorily applicable
notwithstanding other provisions of this Agreement and the other Loan Documents), or under
applicable federal laws which may presently or hereafter be in effect and which allow a higher
maximum non-usurious interest rate than under

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the laws of the State of New York (or such other jurisdiction), in any case after taking into
account, to the extent permitted by applicable law, any and all relevant payments or charges under
this Agreement and the other Loan Documents executed in connection herewith, and any available
exemptions, exceptions and exclusions (the “Highest Lawful Rate”). If due to any circumstance
whatsoever, fulfillment of any provision of this Agreement or any of the other Loan Documents
at the time performance of such provision shall be due shall exceed the Highest Lawful Rate, then,
automatically, the obligation to be fulfilled shall be modified or reduced to the extent necessary
to limit such interest to the Highest Lawful Rate, and if from any such circumstance any Lender
should ever receive anything of value deemed interest by applicable law which would exceed the
Highest Lawful Rate, such excessive interest shall be applied to the reduction of the principal
amount then outstanding hereunder or on account of any other then outstanding Obligations and not
to the payment of interest, or if such excessive interest exceeds the principal unpaid balance then
outstanding hereunder and such other then outstanding Obligations, such excess shall be refunded to
the Borrower. All sums paid or agreed to be paid to the Lenders for the use, forbearance, or
detention of the Obligations and other Indebtedness of the Borrower to the Lenders shall, to the
extent permitted by applicable law, be amortized, prorated, allocated and spread throughout the
full term of such Indebtedness, until payment in full thereof, so that the actual rate of interest
on account of all such Indebtedness does not exceed the Highest Lawful Rate throughout the entire
term of such Indebtedness. The terms and provisions of this Section shall control every other
provision of this Agreement, the other Loan Documents and all other agreements among the parties
hereto.

          SECTION
11.11 Entire Agreement; Successors and Assigns; Interpretation. This
Agreement and the other Loan Documents constitute the entire agreement among the parties,
supersede any prior written and verbal agreements among them, and shall bind and benefit the
parties and their respective successors and permitted assigns. This Agreement shall be deemed to
have been jointly drafted, and no provision of it shall be interpreted or construed for or
against a party because such party purportedly prepared or requested such provision, any other
provision, or this Agreement as a whole.

          SECTION 11.12 LIMITATION OF LIABILITY. NEITHER THE AGENT NOR ANY LENDER SHALL HAVE
ANY LIABILITY TO THE BORROWER (WHETHER SOUNDING IN CONTRACT, TORT OR EQUITY OR OTHERWISE) FOR
LOSSES SUFFERED BY THE BORROWER IN CONNECTION WITH, ARISING OUT OF, OR IN ANY WAY RELATED TO THE
TRANSACTIONS OR RELATIONSHIPS CONTEMPLATED BY THIS AGREEMENT, OR ANY ACT, OMISSION OR EVENT
OCCURRING IN CONNECTION THEREWITH, UNLESS IT IS DETERMINED BY A FINAL AND NONAPPEALABLE JUDGMENT
OR COURT ORDER BINDING ON THE AGENT OR SUCH LENDER THAT THE LOSSES WERE THE RESULT OF ACTS OR
OMISSIONS CONSTITUTING GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE AGENT OR SUCH LENDER. THE
BORROWER HEREBY WAIVES ALL FUTURE CLAIMS AGAINST THE AGENT AND EACH LENDER FOR SPECIAL, INDIRECT,
CONSEQUENTIAL OR PUNITIVE DAMAGES.

          SECTION 11.13 GOVERNING LAW. THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS AND ANY DISPUTE ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT

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OR ANY OF THE OTHER LOAN DOCUMENTS, WHETHER SOUNDING IN CONTRACT, TORT OR EQUITY OR OTHERWISE,
SHALL BE GOVERNED BY THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF LAW PROVISIONS OTHER THAN
SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW) AND DECISIONS OF THE STATE OF NEW YORK.

          SECTION 11.14 SUBMISSION TO JURISDICTION. ALL DISPUTES BETWEEN OR AMONG THE
BORROWER, THE AGENT OR ANY LENDER BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO (I) THIS
AGREEMENT; (II) ANY OTHER LOAN DOCUMENT OR OTHER PRESENT OR FUTURE INSTRUMENT OR AGREEMENT BETWEEN
OR AMONG THE BORROWER, THE AGENT AND A LENDER; OR (III) ANY CONDUCT, ACT OR OMISSION OF THE
BORROWER, THE AGENT, A LENDER OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AGENTS,
ATTORNEYS OR OTHER AFFILIATES, IN EACH CASE WHETHER SOUNDING IN CONTRACT, TORT OR EQUITY OR
OTHERWISE, SHALL BE RESOLVED ONLY BY STATE AND FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK AND THE
COURTS TO WHICH AN APPEAL THEREFROM MAY BE TAKEN; PROVIDED, HOWEVER, THAT THE AGENT SHALL
HAVE THE RIGHT, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, TO PROCEED AGAINST THE BORROWER
OR ITS PROPERTY IN (A) ANY COURTS OF COMPETENT JURISDICTION AND VENUE AND (B) ANY LOCATION SELECTED
BY THE AGENT TO ENABLE THE AGENT TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A JUDGMENT OR OTHER
COURT ORDER IN FAVOR OF THE AGENT. THE BORROWER AGREES THAT IT WILL NOT ASSERT ANY PERMISSIVE
COUNTERCLAIMS, SETOFFS OR CROSS-CLAIMS IN ANY PROCEEDING BROUGHT BY THE AGENT. THE BORROWER WAIVES
ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH THE AGENT HAS COMMENCED A
PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON FORUM
NON CONVENIENS.

          SECTION 11.15 SERVICE OF PROCESS. THE BORROWER HEREBY IRREVOCABLY DESIGNATES
CORPORATION SERVICE COMPANY, 1133 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK 10036 OR ITS SUCCESSOR
AS THE DESIGNEE AND AGENT OF THE BORROWER TO RECEIVE, FOR AND ON BEHALF OF THE BORROWER, SERVICE OF
PROCESS IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT. IT IS UNDERSTOOD THAT A COPY OF SUCH PROCESS SERVED ON SUCH AGENT AT ITS ADDRESS WILL BE
PROMPTLY FORWARDED BY MAIL TO THE BORROWER, BUT THE FAILURE OF THE BORROWER TO RECEIVE SUCH COPY
SHALL NOT AFFECT IN ANY WAY THE SERVICE OF SUCH PROCESS. NOTHING HEREIN SHALL AFFECT THE RIGHT OF
THE AGENT TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.

          SECTION 11.16 JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED
UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO (I) THIS AGREEMENT; (II) ANY

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OTHER LOAN DOCUMENT OR OTHER PRESENT OR FUTURE INSTRUMENT OR AGREEMENT BETWEEN OR AMONG THE
BORROWER, THE AGENT AND A LENDER; OR (III) ANY CONDUCT, ACT OR OMISSION OF THE BORROWER, THE AGENT,
A LENDER OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS OR OTHER
AFFILIATES, IN EACH CASE WHETHER SOUNDING IN CONTRACT, TORT OR EQUITY OR OTHERWISE.

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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their
proper and duly authorized officers as of the date first set forth above.

	 	 	 	 	 
	 	 	BORROWER
	 
	 	 	 	 
	 	 	AMERICAN RAILCAR INDUSTRIES, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Umesh Choksi
	 

	 	 	 	 
	 

	 	 	 	Umesh Choksi
	 

	 	 	 	Assistant Treasurer
	 
	 	 	 	 
	 	 	LENDERS
	 
	 	 	 	 
	 	 	NORTH FORK BUSINESS CAPITAL

CORPORATION
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Robert L. Heinz
	 

	 	 	 	 
	 

	 	 	 	Robert L. Heinz
	 

	 	 	 	Senior Vice President
	 
	 	 	 	 
	 	 	FIRST BANK
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Ed Dehner
	 

	 	 	 	 
	 

	 	 	 	Ed Dehner
	 

	 	 	 	Assistant Vice President
	 
	 	 	 	 
	 	 	HEARTLAND BANK
	 
	 	 	 	 
	 

	 	By:
	 	 /s/ Bruce G. Forster
	 

	 	 	 	 
	 

	 	 	 	Bruce G. Forster
	 

	 	 	 	Vice President
	 
	 	 	 	 
	 	 	THE CIT GROUP/BUSINESS CREDIT, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Barry O’Neall
	 

	 	 	 	 
	 

	 	 	 	Barry O’Neall
	 

	 	 	 	Vice President

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	 	 	AGENT
	 
	 	 	 	 
	 	 	NORTH FORK BUSINESS CAPITAL

CORPORATION
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Robert L. Heinz
	 

	 	 	 	 
	 

	 	 	 	Robert L. Heinz
	 

	 	 	 	Senior Vice President

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