Document:

Exhibit 10.17

 

 

SUPERIOR ESSEX COMMUNICATIONS LP, and

 

ESSEX GROUP, INC.,

 

as
U.S. Borrowers, and

 

ESSEX GROUP CANADA INC.

 

as
Canadian Borrower

 

 

SECOND AMENDED AND RESTATED LOAN AGREEMENT

 

August 5,
2008

 

$350,000,000.00

 

 

CERTAIN FINANCIAL INSTITUTIONS,

 

as
Lenders

 

with

 

BANK OF AMERICA, N.A.,

 

as
Administrative Agent,

 

BANK OF AMERICA, N.A.

 

(ACTING THROUGH ITS CANADA BRANCH),

 

as
Canadian Agent

 

and

 

BANC OF AMERICA SECURITIES LLC,

 

and BARCLAYS CAPITAL,

the
investment banking division of BARCLAYS BANK PLC

 

as
Co-Lead Arrangers

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION  1.

  	
  DEFINITIONS; RULES OF
  CONSTRUCTION

  	
  3

  
	
  1.1

  	
   

  	
  Definitions

  	
  3

  
	
  1.2

  	
   

  	
  Accounting Terms

  	
  48

  
	
  1.3

  	
   

  	
  Certain Matters of
  Construction

  	
  49

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION  2.

  	
  CREDIT FACILITIES

  	
  50

  
	
  2.1

  	
   

  	
  Revolver Commitments

  	
  50

  
	
  2.2

  	
   

  	
  [Reserved]

  	
  54

  
	
  2.3

  	
   

  	
  Letter of Credit Facility

  	
  54

  
	
  2.4

  	
   

  	
  Notice of Availability
  Reserves

  	
  58

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION  3.

  	
  INTEREST, FEES AND CHARGES

  	
  58

  
	
  3.1

  	
   

  	
  Interest

  	
  58

  
	
  3.2

  	
   

  	
  Fees

  	
  61

  
	
  3.3

  	
   

  	
  Computation of Interest,
  Fees, Yield Protection

  	
  62

  
	
  3.4

  	
   

  	
  Reimbursement Obligations

  	
  62

  
	
  3.5

  	
   

  	
  Illegality

  	
  62

  
	
  3.6

  	
   

  	
  Increased Costs

  	
  63

  
	
  3.7

  	
   

  	
  Capital Adequacy

  	
  64

  
	
  3.8

  	
   

  	
  Mitigation

  	
  65

  
	
  3.9

  	
   

  	
  Funding Losses

  	
  65

  
	
  3.10

  	
   

  	
  Maximum Interest

  	
  66

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  SECTION  4.

  	
  LOAN ADMINISTRATION

  	
  67

  
	
  4.1

  	
   

  	
  Manner of Borrowing and
  Funding Revolver Loans

  	
  67

  
	
  4.2

  	
   

  	
  Defaulting Lender

  	
  69

  
	
  4.3

  	
   

  	
  Number and Amount of
  Interest Period Loans; Determination of Rate

  	
  70

  
	
  4.4

  	
   

  	
  Borrower Agent

  	
  70

  
	
  4.5

  	
   

  	
  One Obligation

  	
  70

  
	
  4.6

  	
   

  	
  Effect of Termination

  	
  70

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION  5.

  	
  PAYMENTS

  	
  71

  
	
  5.1

  	
   

  	
  General Payment Provisions

  	
  71

  
	
  5.2

  	
   

  	
  Repayment of Revolver
  Loans

  	
  71

  
	
  5.3

  	
   

  	
  Reduction of Fixed Asset
  Formula Amount; Prepayments of Revolver Loans

  	
  72

  
	
  5.4

  	
   

  	
  Payment of Interest

  	
  73

  
	
  5.5

  	
   

  	
  Payment of Other
  Obligations

  	
  73

  
	
  5.6

  	
   

  	
  Marshaling; Payments Set
  Aside

  	
  73

  
	
  5.7

  	
   

  	
  Post-Default Allocation of
  Payments

  	
  73

  
	
  5.8

  	
   

  	
  Application of Payments

  	
  75

  
	
  5.9

  	
   

  	
  Loan Account; Account
  Stated

  	
  75

  
	
  5.10

  	
   

  	
  Taxes

  	
  76

  
	
  5.11

  	
   

  	
  [Reserved.]

  	
  78

  
	
  5.12

  	
   

  	
  Currency Matters

  	
  78

  
	
  5.13

  	
   

  	
  Currency Fluctuations

  	
  79

  
	
  5.14

  	
   

  	
  Nature and Extent of Each
  Borrower’s Liability

  	
  80

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION  6.

  	
  CONDITIONS PRECEDENT

  	
  83

  
	
  6.1

  	
   

  	
  Conditions Precedent to
  Initial Loans

  	
  83

  
	
  6.2

  	
   

  	
  Conditions Precedent to
  All Credit Extensions

  	
  85

  
	
  6.3

  	
   

  	
  Limited Waiver of
  Conditions Precedent

  	
  86

  

 

i

 

	
  SECTION  7.

  	
  COLLATERAL

  	
  86

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION  8.

  	
  COLLATERAL ADMINISTRATION

  	
  87

  
	
  8.1

  	
   

  	
  Borrowing Base
  Certificates

  	
  87

  
	
  8.2

  	
   

  	
  Administration of Eligible
  Accounts

  	
  87

  
	
  8.3

  	
   

  	
  Administration of
  Inventory

  	
  89

  
	
  8.4

  	
   

  	
  Administration of
  Equipment

  	
  90

  
	
  8.5

  	
   

  	
  Administration of Deposit
  Accounts

  	
  90

  
	
  8.6

  	
   

  	
  General Provisions

  	
  90

  
	
  8.7

  	
   

  	
  Power of Attorney

  	
  92

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION  9.

  	
  REPRESENTATIONS AND
  WARRANTIES

  	
  92

  
	
  9.1

  	
   

  	
  General Representations
  and Warranties

  	
  92

  
	
  9.2

  	
   

  	
  Complete Disclosure

  	
  97

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION  10.

  	
  COVENANTS AND CONTINUING
  AGREEMENTS

  	
  97

  
	
  10.1

  	
   

  	
  Affirmative Covenants

  	
  97

  
	
  10.2

  	
   

  	
  Negative Covenants

  	
  101

  
	
  10.3

  	
   

  	
  Consolidated Fixed Charge
  Coverage Ratio

  	
  109

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION  11.

  	
  EVENTS OF DEFAULT;
  REMEDIES ON DEFAULT

  	
  109

  
	
  11.1

  	
   

  	
  Events of Default

  	
  109

  
	
  11.2

  	
   

  	
  Remedies upon Default

  	
  111

  
	
  11.3

  	
   

  	
  License

  	
  112

  
	
  11.4

  	
   

  	
  Setoff

  	
  112

  
	
  11.5

  	
   

  	
  Remedies Cumulative; No
  Waiver

  	
  112

  
	
  11.6

  	
   

  	
  Judgment Currency

  	
  113

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 12.

  	
  AGENTS

  	
  113

  
	
  12.1

  	
   

  	
  Appointment, Authority and
  Duties of Agents

  	
  113

  
	
  12.2

  	
   

  	
  Agreements Regarding
  Collateral and Field Examination Reports

  	
  115

  
	
  12.3

  	
   

  	
  Reliance By Agents

  	
  116

  
	
  12.4

  	
   

  	
  Action Upon Default

  	
  116

  
	
  12.5

  	
   

  	
  Ratable Sharing

  	
  116

  
	
  12.6

  	
   

  	
  Indemnification of Agent
  Indemnitees

  	
  117

  
	
  12.7

  	
   

  	
  Limitation on
  Responsibilities of Agents

  	
  117

  
	
  12.8

  	
   

  	
  Successor Agents and
  Co-Agents

  	
  117

  
	
  12.9

  	
   

  	
  Solidary Interests/Quebec
  Liens (Hypothecs)

  	
  118

  
	
  12.10

  	
   

  	
  Due Diligence and
  Non-Reliance

  	
  119

  
	
  12.11

  	
   

  	
  Replacement of Certain
  Lenders

  	
  119

  
	
  12.12

  	
   

  	
  Remittance of Payments and
  Collections

  	
  120

  
	
  12.13

  	
   

  	
  Agents in their Individual
  Capacities

  	
  120

  
	
  12.14

  	
   

  	
  No Third Party
  Beneficiaries

  	
  121

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION  13.

  	
  BENEFIT OF AGREEMENT;
  ASSIGNMENTS AND PARTICIPATIONS

  	
  121

  
	
  13.1

  	
   

  	
  Successors and Assigns

  	
  121

  
	
  13.2

  	
   

  	
  Participations

  	
  121

  
	
  13.3

  	
   

  	
  Assignments

  	
  121

  
	
  13.4

  	
   

  	
  Representation of Lenders

  	
  122

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION  14.

  	
  MISCELLANEOUS

  	
  122

  
	
  14.1

  	
   

  	
  Consents, Amendments and
  Waivers

  	
  122

  
	
  14.2

  	
   

  	
  General Indemnity

  	
  124

  
	
  14.3

  	
   

  	
  Limitations of Indemnities

  	
  124

  
	
  14.4

  	
   

  	
  Notices and Communications

  	
  125

  

 

ii

 

	
  14.5

  	
   

  	
  Performance of Borrowers’
  Obligations

  	
  125

  
	
  14.6

  	
   

  	
  Credit Inquiries

  	
  125

  
	
  14.7

  	
   

  	
  Severability

  	
  126

  
	
  14.8

  	
   

  	
  Cumulative Effect;
  Conflict of Terms

  	
  126

  
	
  14.9

  	
   

  	
  Counterparts; Facsimile
  Signatures

  	
  126

  
	
  14.10

  	
   

  	
  Entire Agreement

  	
  126

  
	
  14.11

  	
   

  	
  Obligations of Lenders

  	
  126

  
	
  14.12

  	
   

  	
  Lender Loss Sharing
  Agreement

  	
  126

  
	
  14.13

  	
   

  	
  Confidentiality

  	
  128

  
	
  14.14

  	
   

  	
  Governing Law

  	
  129

  
	
  14.15

  	
   

  	
  Consent to Forum

  	
  129

  
	
  14.16

  	
   

  	
  Waivers by Borrowers

  	
  129

  
	
  14.17

  	
   

  	
  PATRIOT Act Notice

  	
  130

  
	
  14.18

  	
   

  	
  JV Europe

  	
  130

  
	
  14.19

  	
   

  	
  Amendment and Restatement

  	
  130

  

 

iii

 

SECOND AMENDED AND RESTATED LOAN AGREEMENT

 

THIS SECOND
AMENDED AND RESTATED LOAN AGREEMENT (this “Agreement”)
is dated August 5, 2008, among SUPERIOR
ESSEX COMMUNICATIONS LP, a Delaware limited partnership (“Communications”),
ESSEX GROUP, INC., a Michigan
corporation (“EGI”, and together with Communications, collectively, “U.S.
Borrowers” and each a “U.S. Borrower”), ESSEX GROUP CANADA INC., a Nova Scotia company (“Canadian
Borrower”, and together with U.S. Borrowers, collectively, “Borrowers”
and each a “Borrower”), the financial institutions party to this Agreement
from time to time as lenders (collectively, “Lenders”), BANK OF AMERICA, N.A., a national banking
association (together with its successors and assigns, “Bank of America”),
acting as a U.S. Lender and an Issuing Bank, and in its capacity as Administrative
Agent, and BANK OF AMERICA, N.A.,
acting through its Canada branch, as a Canadian Lender and in its capacity as
Canadian Agent.  Capitalized terms used
in this Agreement have the meanings ascribed to them in Section 1.

 

R E C I T A L S

 

On April 14, 2006,
Communications and EGI (the “Existing Borrowers”), the financial
institutions party thereto from time to time (the “Existing Lenders”),
and Bank of America, as administrative agent for the Existing Lenders (the “Existing
Administrative Agent”), entered into that certain Amended and Restated Loan
and Security Agreement, pursuant to which Existing Administrative Agent and
Existing Lenders made certain revolving credit loans, letters of credit and
other financial accommodations to Existing Borrowers, and which agreement
amended and restated that certain Credit Agreement dated November 10, 2003
(as amended, restated modified or supplemented from time to time prior to the
date hereof, the “Existing Loan Agreement”).

 

On June 11, 2008, LS
Corp., a South Korean corporation, then known as LS Cable Ltd. (“LS Corp.”),
and Superior Essex Inc., a Delaware corporation (“SEI”), entered into an
Agreement and Plan of Merger, as joined by Cyprus Acquisition Merger Sub, Inc.,
a Delaware corporation (“Merger SPC”) pursuant to that certain Joinder
Agreement, whereby Merger SPC, became a party to the Agreement and Plan of
Merger as the Purchaser thereunder and as joined by LS Cable Ltd., a newly
formed South Korean corporation and a wholly owned subsidiary of LS Corp. (“LS Cable”)
pursuant to that certain Assignment and Joinder Agreement  (as so supplemented, the “Merger Agreement”).

 

Under the terms of the
Merger Agreement, on July 1, 2008, Merger SPC commenced a tender offer to
purchase all issued and outstanding shares of common stock, par value $0.01 per
share (each a “Share” and collectively, the “Shares”) of
SEI.  On July 31, 2008, as provided
in the Merger Agreement, and subject to the conditions set forth therein, at
the expiration of the tender offer Merger SPC accepted for payment and
purchased all Shares validly tendered in the tender offer and not withdrawn
(the date of such acceptance of Shares being the “Purchase Time”).

 

Each equity award granted to
directors and employees of SEI or its subsidiaries shall vest at the Purchase
Time (to the extent not previously vested) and the Merger Agreement provides
that such awards shall be converted into the right to receive payment of the
Offer Price (as defined in the Merger Agreement), less the applicable exercise
price in the case of options, at the Purchase Time or as soon as practicable
thereafter.

 

Pursuant to the Merger
Agreement, and subject to the conditions set forth therein, following the
Purchase Time the parties will effect a merger of Merger SPC with and into SEI
(the “Merger”), with SEI as the surviving corporation.  At the effective time of the Merger (the “Effective
Time”), each outstanding Share (other than those Shares with respect to
which appraisal rights are properly exercised under 

 

 

Delaware law and those
shares held in the treasury of the Company or by Purchaser or by any direct or
indirect wholly-owned subsidiary of LS Corp. or SEI) will, by virtue of the
Merger, and without any action on the part of the holder thereof, be converted
into the right to receive cash equal to the Offer Price.

 

At the Purchase Time, each
share of Series A Preferred Stock (as defined in the Merger Agreement) of
Superior Essex Holding Corp. (“SEHC”), a subsidiary of SEI (and the
limited partner of Communications), will be redeemed in accordance with the
Certificate of Designation (as defined in the Merger Agreement).

 

On the date hereof,
Communications and EGI also intend to deliver irrevocable notices of redemption
(the “Debt Redemption”) of all their outstanding 9% Senior Notes due
2012 issued pursuant to that certain Indenture dated as of April 14, 2004
among Borrowers, SEHC, SEI, Essex International, Inc., a Delaware
corporation (“Essex International”), and certain Subsidiaries of
Borrowers, with The Bank of New York, as trustee, in the original principal
amount of $257,100,000 (including any Exchange Notes issued in connection
therewith, the “Existing Senior Notes”).

 

After giving effect to the
Merger, (i) LS Cable will own and control 100% of the outstanding common
stock of Cyprus Investments, Inc., a Delaware corporation (“Holdings”),
(ii) Holdings and certain other Persons (collectively, the “Investor
Group”) will own and control the outstanding common stock of SEI, (iii) SEI
will own and control 100% of the outstanding common stock of SEHC, (iv) SEHC
will own and control 100% of the outstanding common stock of each of Essex
International and SE Communications GP, Inc., a Delaware corporation (“Communications
GP”), and 100% of the limited partnership interests (and 99% of the total
partnership interests) of Communications, (v) Communications GP will own
and control 100% of the general partnership interests (and 1% of the total
partnership interests) of Communications, and (vi) Essex International
will own and control 100% of the outstanding common stock of EGI.

 

The Merger Agreement
provides for or recognizes certain rights, duties and obligations of SEI and
its subsidiaries with respect to current and former directors, officers and
employees of SEI and its subsidiaries, including (i) certain payments of
(or of cash in lieu of) restricted stock units for directors, (ii) obligations
under certain indemnification agreements with directors and officers, (iii) obligations
under certain employment agreements and change in control agreements with
certain officers that provide rights to payments of certain bonuses, retention
payments and severance payments and benefits, and (iv) obligations under a
Supplemental Executive Retirement Plan.

 

In connection with the
Merger, and to refinance certain of SEI’s and the Borrowers’ existing
indebtedness, to finance certain obligations under the Merger Agreement, and to
pay fees and expenses in connection therewith, as well as for general corporate
purposes, the Borrowers have requested that the Lenders modify certain
provisions of the Existing Loan Agreement to permit the Merger and to establish
a $350,000,000 Revolving Credit Facility pursuant to which revolving credit
loans may be made to the Borrowers and letters of credit may be issued for the
account of the Borrowers (the “Revolving Credit Facility”).

 

In order to utilize the
financial powers of each Borrower in the most efficient and economical manner,
and in order to facilitate the financing of each Borrower’s needs, Lenders
will, at the request of the Borrower Agent (as defined below) and Superior
Essex, make loans to all Borrowers under the Revolving Credit Facility on a
combined basis and in accordance with the provisions hereinafter set
forth.  Borrowers’ business is a mutual
and collective enterprise, and Borrowers believe that the consolidation of all
revolving credit loans under this Agreement will enhance the aggregate
borrowing powers of each Borrower and ease the administration of their
revolving credit loan relationship with Lenders, all to the 

 

2

 

mutual advantage of
Borrowers.  Lenders’ willingness to
extend credit to Borrowers and to administer each Borrower’s collateral
security therefor, on a combined and joint and several basis as more fully set
forth in this Agreement, is done solely as an accommodation to Borrowers and at
Borrowers’ request in furtherance of Borrowers’ mutual and collective
enterprise. Each U.S. Borrower has agreed to guarantee the obligations of each
of the other Borrowers under this Agreement and each of the other Loan
Documents.

 

Agents and Lenders have
agreed, subject to the terms of this Agreement, to amend and restate the
Existing Loan Agreement in its entirety to read as set forth herein, and it has
been agreed by the parties hereto that the Loans and other Obligations
outstanding under the Existing Loan Agreement shall be governed by and deemed
to be outstanding under the amended and restated terms and conditions contained
herein.  All existing Obligations are and
shall continue to be (and all Obligations incurred pursuant hereto shall be)
secured by, among other things, the Security Documents and the other Loan
Documents and shall be guaranteed pursuant to the Guaranties (as defined
below).

 

NOW, THEREFORE, for Ten
Dollars ($10.00) in hand paid, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
hereby agree to amend and restate the Existing Loan Agreement, and the Existing
Loan Agreement is hereby amended and restated in its entirety, as follows:

 

SECTION  1.        DEFINITIONS;
RULES OF CONSTRUCTION

 

1.1          Definitions.  As used herein, the following terms have the
meanings set forth below:

 

Account - shall have
the meaning ascribed to such term in the U.S. Security Agreement or the
Canadian Security Agreement, as applicable.

 

Account Debtor - a Person who
is obligated under an Account, Chattel Paper or General Intangible.

 

Accounts Formula Amount - 85% of the
face amount of Eligible Accounts (after giving effect to any reduction thereof
required under the definition of Eligible Accounts).

 

Acquired EBITDA - means the
EBITDA of a Permitted Acquisition for any period prior to such acquisition (but
excluding any related Person, property, business or assets to the extent not so
acquired), as specified in a certificate executed by a Senior Officer and
delivered to the Administrative Agent.

 

Adjusted LIBOR - for any
Interest Period, with respect to LIBOR Loans, the per annum rate of interest
determined pursuant to the following formula:

 

	
   

  	
  LIBOR

  	
  =

  	
  Offshore Base Rate

  	
   

  
	
   

  	
   

  	
  1.00 - Eurodollar Reserve
  Percentage

  	
   

  

 

Where,

 

“Offshore
Base Rate” means the rate per annum (rounded upward, if necessary, to the
nearest 1/8th of 1%) appearing on the Reuters Screen LIBO Page (or any
successor page thereof), as the London interbank offered rate for deposits
in Dollars at approximately 11:00 a.m. (London time) three (3) Business
Days prior to the first day of such Interest Period for a term equivalent to
the applicable Interest Period; provided, however, if more than
one rate is shown on such page, 

 

3

 

the applicable rate shall be
the arithmetic mean thereof.  If for any
reason the foregoing rate is not available, the Offshore Base Rate shall be the
rate per annum determined by Administrative Agent as the rate of interest at
which Dollar deposits in the approximate amount of the applicable LIBOR Loan
would be offered by Bank of America (through its London branch) to major banks
in the London or offshore Dollar market at or about 11:00 a.m. (London
time) three (3)  Business Days prior to the first day of the applicable
Interest Period for a term equivalent to the applicable Interest Period.

 

“Eurodollar
Reserve Percentage” means the reserve percentage (expressed as a decimal,
rounded upward to the next 1/16th of 1%) applicable to member banks under
regulations issued from time to time by the Board of Governors for determining
the maximum reserve requirement (including any emergency, supplemental or other
marginal reserve requirement) with respect to Eurocurrency funding (currently
referred to as “Eurocurrency liabilities”).

 

Adjustment Date - as defined
in the definition of “Applicable Margin”.

 

Administrative Agent - Bank of
America in its capacity as administrative agent for Lenders and to the extent
provided in the Security Documents, as agent for the Agents, and in its
capacity as collateral agent for all Secured Parties under the Security
Documents, together with any successor in that capacity appointed pursuant to Section 12.8.

 

Affected Lender - as defined
in Section 12.11.

 

Affiliate - with respect
to any Person, another Person who directly, or indirectly through one or more
intermediaries, controls, is controlled by or is under common control with such
first Person.  “Control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise. Notwithstanding the
foregoing, (i) no Lender shall be deemed to be an “Affiliate” of any
Borrower, and (ii) except for purposes of clause (m) of the
definition of Eligible Accounts, no member of a Borrower Group or its
Subsidiaries  shall
be deemed to be an Affiliate of any other member of such Borrower Group.

 

Agent Indemnitees -
Administrative Agent and its officers, directors, employees, Affiliates, agents
and attorneys.

 

Agent Professionals - attorneys,
accountants, appraisers, auditors, business valuation experts, environmental
engineers or consultants, turnaround consultants, and other professionals and
experts retained by Administrative Agent.

 

Agents -
Administrative Agent and Canadian Agent.

 

Aggregate Availability - on any date
of determination thereof, the sum of U.S. Availability and Canadian
Availability.  In determining Aggregate
Availability on any date, the provisions of Section 2.1.3
shall be taken into account.

 

Allocable Amount - as defined
in Section 5.14.3.

 

Anti-Terrorism Laws - any laws
relating to terrorism or money laundering, including the PATRIOT Act and the
Proceeds of Crime Act.

 

4

 

Applicable Agent - for any
Borrower Group or the Collateral of such Borrower Group (including insurance
with respect to such Collateral), the Agent to which Obligors within such
Borrower Group have granted Liens with respect to the Collateral of such
Borrower Group.

 

Applicable Issuing Bank - Bank of
America, or its applicable branch or Affiliate, as determined by the Applicable
Agent, and their successors and assigns; provided  that, as at the
Closing Date, Bank of America (acting through its Canada branch) shall be the
Applicable Issuing Bank in respect of Canadian Letters of Credit; and provided,
further, that after the Closing Date, the Applicable Issuing Bank in
respect of Canadian Letters of Credit shall remain a Canadian Qualified Lender.

 

Applicable Law - all laws,
rules, and regulations applicable to the Person, conduct, transaction, material
agreement or matter in question, including all applicable statutory law, common
law and equitable principles, and all provisions of constitutions, treaties,
statutes, rules regulations, orders and decrees of Governmental
Authorities.

 

Applicable Lenders - with respect
to a Borrower Group, Lenders having Borrower Group Commitments to the Borrowers
within such Borrower Group.

 

Applicable Margin - a percentage
per annum equal to, 0.25% with respect to Revolver Loans that are U.S. Base
Rate Loans, Canadian Prime Rate Loans or Canadian Base Rate Loans, and 2.00%
per annum with respect to Revolver Loans that are LIBOR Loans or Canadian BA
Rate Loans; provided  that, on the third day of each Fiscal
Quarter of each Fiscal Year (the “Adjustment Date”), commencing with the
Fiscal Quarter ending March 31, 2009, the Applicable Margin shall be
increased or (if no Event of Default exists) decreased, as applicable, based
upon Average Aggregate Availability for the most recently ended Fiscal Quarter
immediately preceding such Adjustment Date, in accordance with the pricing grid
set forth below:

 

	
  Level

  	
   

  	
  Average

  Aggregate

  Availability

  	
   

  	
  U.S. Base Rate,

  Canadian Base Rate and

  Canadian Prime Rate

  Revolver Loans

  	
   

  	
  LIBOR and

  Canadian BA Rate

  Revolver Loans

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  I

  	
   

  	
  < $75,000,000

  	
   

  	
  0.75

  	
  %

  	
  2.50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  II

  	
   

  	
  > $75,000,000 

  but 

  < $150,000,000

  	
   

  	
  0.50

  	
  %

  	
  2.25

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  III

  	
   

  	
  > $150,000,000 

  but 

  < $225,000,000

  	
   

  	
  0.25

  	
  %

  	
  2.00

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IV

  	
   

  	
  > $225,000,000

  	
   

  	
  zero

  	
   

  	
  1.75

  	
  %

  

 

; provided, further,
that, on any date of determination, the Applicable Margin shall be 0.25% higher
in all instances with respect to the amount of (a) the lesser of (i) the
Canadian Revolver Loans and (ii) the Canadian Fixed Asset Formula Amount,
and (b) the lesser of (i) the U.S. Revolver Loans and (ii) the
U.S. Fixed Asset Formula Amount;

 

5

 

provided, further,
that if (a) the Canadian BA Rate plus the Applicable Margin for Canadian
BA Rate Loans is greater than (b) the Canadian Prime Rate plus the
Applicable Margin for Canadian Prime Rate Loans then (c) the Applicable
Margin for Canadian Prime Rate Loans shall be increased by the difference, and
such difference shall be adjusted on the next Adjustment Date;

 

and provided, further,
that, to the extent that the Borrowers’ Total Funded Debt to EBITDA Ratio for
the most recently ended four Fiscal Quarter period is less than 3.00 to 1.00,
then the Applicable Margin for the applicable measurement period shall be one
Level higher than otherwise required based on Average Aggregate Availability
(e.g., if the Total Funded Debt to EBITDA Ratio is less than 3.00 to 1.00 for a
period in which the Applicable Margin would otherwise be at Level III, then the
Applicable Margin for such period shall be deemed to be Level IV).

 

The foregoing margins shall
be subject to increase or decrease upon receipt by Administrative Agent of the
Borrowing Base Certificates and Compliance Certificates for the most recently
completed Fiscal Quarter, which change shall be effective on the applicable
Adjustment Date described above.

 

Applicable Payment Account - with respect
to each Borrower Group, a Deposit Account maintained by the Applicable Agent
(and under its sole dominion and control) to which all monies from time to time
deposited to a Dominion Account designated for such Borrower Group shall be
transferred, in accordance with the provisions of Section 8.2.4, which monies shall be sent in immediately
available funds.

 

Applicable Pension
Legislation - on any date, any pension or retirement benefits
legislation (whether national, federal, provincial, territorial, foreign or
otherwise) then applicable to a Borrower or any of its Subsidiaries, including,
in the case of each U.S. Borrower, ERISA.

 

Applicable Swingline Lenders - Bank of
America with respect to Swingline Loans made to U.S. Borrowers, and Bank of
America (acting through its Canada branch) with respect to Swingline Loans made
to Canadian Borrower.

 

Appropriate Notice Office - (i) with
respect to U.S. Revolver Loans and U.S. Letters of Credit, the office of
Administrative Agent located at 300 Galleria Parkway, Suite 800, Atlanta,
Georgia 30339, Attention: 
Superior Essex Loan Servicing Administrator, Telecopier No.: (404)
607-3276; and (ii) with respect to Canadian Revolver Loans and Canadian
Letters of Credit, the office of Canadian Agent located at 200 Front Street
West, Suite 2700, Toronto, Ontario Canada M5V 3L2, Telecopier No. (416)
349-4282.

 

Approved Fund - any Person
(other than a natural person) that is engaged in making, holding or investing
in extensions of credit in its ordinary course of business and is administered
or managed by a Lender, an entity that administers or manages a Lender, or an
Affiliate of either.

 

Asset Disposition - a sale,
lease, license, consignment, transfer or other disposition of Property of an
Obligor (including a termination of rights of an Obligor under any lease or
license (but excluding a termination of rights of an Obligor under any lease or
license for which such Obligor is the lessee or licensee, as applicable) or
other contract, or a disposition of Property in connection with a
sale-leaseback transaction or synthetic lease).

 

Assignment and Acceptance - an
assignment agreement between a Lender and Eligible Assignee, in the form of Exhibit E.

 

6

 

Availability Reserve - on any date
of determination thereof, an amount equal to the sum of the following (without
duplication): (i) the sum of (1) the Inventory Reserve, (2) the
Toll/Price Adjustment Reserve and (3) the Forward Revaluation Reserve; (ii) the
Rent Reserve and all amounts of past due rent, fees or other charges owing at
such time by any Obligor to any landlord of any premises where any of the
Inventory is located or to any processor, repairman, mechanic or other Person
who is in possession of any Inventory or has asserted any Lien or claim
thereto; (iii) with respect to the Canadian Borrower Group, the Canadian
Priority Payable Reserve; (iv) any amounts which any Obligor is obligated
to pay pursuant to the provisions of any of the Loan Documents that any Agent
or any Lender elects to pay for the account of such Obligor in accordance with
authority contained in any of the Loan Documents; (v) the LC Reserve; (vi) the
Environmental Reserve (provided, that, the amount of such
Environmental Reserve for any Mortgaged Real Estate, when added to any
additional reserve for environmental matters which Administrative Agent elects
to impose pursuant to clause (ix) hereof for such Mortgaged Real Estate,
shall not exceed the portion of the Fixed Asset Formula Amount allocated by
Administrative Agent to the value of the particular Mortgaged Real Estate); (vii) the
aggregate amount of all liabilities and obligations that are secured by Liens
upon any of the Collateral that are senior in priority to Agents’ Liens (provided
that the imposition of a reserve hereunder on account of such Liens
shall not be deemed a waiver of any Event of Default that may arise from the
existence of such Liens) or are Permitted Liens under Section 10.2.2(e) of the
Agreement; (viii) the aggregate amount of reserves established by Agents
from time to time in their Credit Judgment in respect of Bank Products Debt;
and (ix) such additional reserves, in such amounts and with respect to
such matters, as Administrative Agent may elect to impose from time to time in
its Credit Judgment. Notwithstanding anything in the immediately preceding
sentence to the contrary, no Availability Reserve shall be instituted with
respect to clauses (i), (vi), (viii) and (ix) above to the extent
that any such items are used as a basis for not classifying an Account or any
Inventory as an Eligible Account or as Eligible Inventory, as the case may be.

 

Average Aggregate
Availability - for any period of determination, an amount
obtained by adding the actual amount of Aggregate Availability as of the close
of business on each Business Day during such period (as determined in good
faith by Administrative Agent) and dividing such sum by the actual number of
Business Days elapsed in such period.

 

Bank of America - as defined
in the preamble to this Agreement.

 

Bank of America Indemnitees - Bank of
America, together with its Affiliates, and officers, directors, employees,
agents and attorneys-in-fact of Bank of America and its Affiliates, including
Banc of America Securities LLC.

 

Bank Product - any of the
following products, services or facilities extended to any Borrower or its
Subsidiaries by any Lender or any of its Affiliates: (a) Cash Management
Services; (b) products under Hedging Agreements (including Foreign Exchange
Services); (c) commercial credit card and merchant card services; and (d) leases
and other banking products or services as may be requested by any Borrower or
its Subsidiaries, other than Letters of Credit; provided, however,
that, for any of the foregoing to be included as an “Obligation” for purposes
of a distribution under Section 5.7.1,
the applicable Secured Party and Obligor must have previously provided written
notice to Administrative Agent of (i) the existence of such Bank Product, (ii) the
maximum dollar amount of obligations arising thereunder to be included as part
of the Availability Reserve for Bank Products (the “Bank Product Amount”),
and (iii) the methodology to be used by such parties in determining the
Bank Product Debt owing from time to time. 
For the avoidance of doubt, Borrowers and Administrative Agent
acknowledge and agree that the Cash Management Services and Foreign Exchange
Services provided by Bank of America and its Affiliates on or prior to the
Closing Date each constitute a “Bank Product” and an “Obligation” for purposes
of a distribution under Section 5.7.1,
and that written notice of such Bank Products, the Bank Product Amount 

 

7

 

thereof, and the methodology
used to determine the same, has been provided to Administrative Agent by the
applicable Secured Party and Obligor. The Bank Product Amount may be changed
from time to time upon written notice to Administrative Agent by the applicable
Secured Party and Obligor.  No Bank Product
Amount may be established or increased at any time that a Default or Event of
Default exists, or if a reserve in such amount would cause an Overadvance.

 

Bank Product Amount - as defined
in the definition of Bank Product.

 

Bank Product Debt - Debt and
other obligations of an Obligor relating to Bank Products.

 

Bankruptcy Code - Title 11 of
the United States Code.

 

Board of Governors - the Board of
Governors of the Federal Reserve System.

 

Borrowed Money - with respect
to any Obligor, without duplication, its (a) Debt that (i) arises
from the lending of money by any Person to such Obligor, (ii) is evidenced
by notes, drafts, bonds, debentures, credit documents or similar instruments, (iii) accrues
interest or is a type upon which interest charges are customarily paid, or (iv) was
issued or assumed as full or partial payment for Property; and (b) Capital
Leases.

 

Borrower Agent - as defined
in Section 4.4.

 

Borrower Group - a group
consisting of (i) U.S. Borrowers and each other U.S. Obligor; or (ii) Canadian
Borrower and each other Canadian Obligor.

 

Borrower Group Commitment - with respect
to the commitment of a Lender to fund Revolver Loans, or to participate in LC
Obligations of a Borrower Group, the amount of the commitment of such Lender
with respect to such Borrower Group as shown on Schedule 1.1.1 from time to time (as the same may be
modified from time to time as a result of such Lender’s consummation of an
assignment pursuant to an Assignment and Acceptance).

 

Borrower Group Obligations - with respect
to any Obligor, the portion of the Obligations owed by such Obligor and such
Obligor’s Borrower Group.

 

Borrowers - U.S.
Borrowers and Canadian Borrower, including each of such Persons in its capacity
as a LC Borrower.

 

Borrowing - a group of
Loans of one Type that are made on the same day or are converted into Loans of
one Type on the same day.

 

Borrowing Base - the U.S.
Borrowing Base or the Canadian Borrowing Base, as applicable; provided, that,
notwithstanding any provision of this Agreement to the contrary, in connection
with any merger (or other distribution of the assets) of a Subsidiary that is
not an Obligor with and into (or to) an Obligor, or any acquisition by an
Obligor, whether by purchase of stock, merger, or purchase of assets, and whether
in a single transaction or series of related transactions, Agents shall have
the right to determine in their Credit Judgment (based on standards and
methodologies similar to those applied to Borrowers’ then existing Accounts and
Inventory to the extent that the Accounts and Inventory so acquired are similar
to such then existing Accounts and Inventory), whether any Accounts or
Inventory so acquired shall be included in the Borrowing Base (subject to the
other applicable provisions of this Agreement). 
In connection with such determination, Agents may obtain, at Borrowers’
expense, such 

 

8

 

appraisals, commercial
finance exams and other assessments of such Accounts, Inventory, and other
Collateral as Agents may deem desirable.

 

Borrowing Base Certificate - a
certificate, substantially in the form attached hereto as Exhibit G (which form may be
modified from time to time consistent with this Agreement), by which Borrowers
shall certify to Agents and Lenders the amount, as of the date of such
certificate of the U.S. Borrowing Base and the Canadian Borrowing Base (with
the calculation shown for each such amount), provided  that such
certificate shall also set forth the amount (with supporting details of
calculation) of Aggregate Availability.

 

Brownwood Lease - the Lease
Agreement, dated as of December 16, 1993, as amended, between
Communications (f/k/a Superior Telecommunications Inc.) and ST (TX) LP.

 

Business Day - any day
excluding Saturday, Sunday and any other day that is a legal holiday under the
laws of the State of North Carolina or the State of Georgia or is a day on
which banking institutions located in such state are closed; and when used with
reference to (i) a LIBOR Loan, the term shall also exclude any day on
which banks are not open for the transaction of banking business in London,
United Kingdom and (ii) a Canadian Revolver Loan, shall also exclude a day
on which banks in Toronto, Ontario, Canada or Halifax, Nova Scotia, Canada, are
not open for the transaction of banking business.

 

Canadian Agent - Bank of
America, N.A. (acting through its Canada branch) in its capacity as
administrative agent for Canadian Lenders, together with any successor
appointed pursuant to Section 12.8.

 

Canadian Availability - on any date,
the amount that Canadian Borrower is entitled to borrow pursuant to Section 2.1 as Canadian Revolver Loans
on such date, such amount being the difference derived when the sum of the
principal amount of Canadian Revolver Loans then outstanding (including any
outstanding Swingline Loans to Canadian Borrower) is subtracted from the
Canadian Borrowing Base on such date (and if the principal amount of Canadian
Revolver Loans outstanding on any date is equal to or greater than the Canadian
Borrowing Base, then Canadian Availability on such date shall be zero or a
negative number, as applicable).

 

Canadian BA Rate - with respect
to each Interest Period for a Canadian BA Rate Loan, the rate of interest per
annum equal to the average rate applicable to Canadian Dollar Bankers’
Acceptances having an identical or comparable term as the proposed Canadian BA
Rate Loan displayed and identified as such on the display referred to as the “CDOR
Page” (or any display substituted therefor) of Reuters Monitor Money Rates
Service as at approximately 10:00 a.m. Toronto time on such day (or, if
such day is not a Business Day, as of 10:00 a.m.  Toronto time on the immediately preceding
Business Day), plus five (5) basis points, provided  that if
such rate does not appear on the CDOR Page at such time on such date, the
rate for such date will be the annual discount rate (rounded upward to the
nearest whole multiple of 1/100 of 1%) as of 10:00 a.m. Eastern time on
such day at which a Canadian chartered bank listed on Schedule 1 of the Bank
Act (Canada) as selected by Canadian Agent is then offering to purchase
Canadian Dollar Bankers’ Acceptances accepted by it having such specified term
(or a term as closely as possible comparable to such specified term), plus five
(5) basis points.

 

Canadian BA Rate Loan - a Canadian
Revolver Loan, or portion thereof, funded in Canadian Dollars and bearing
interest calculated by reference to the Canadian BA Rate.

 

9

 

Canadian Base Rate - for any day,
the rate of interest in effect for such day as publicly announced from time to
time by Bank of America (acting through its Canada branch) in Toronto, Ontario
as its “base rate” (the “base rate” being a rate set by Bank of America (acting
through its Canada branch) based on various factors including costs and desired
return of the Bank of America (acting through its Canada branch), general
economic conditions and other factors, and used as a reference point for
pricing loans in Dollars made at its “base rate”, which may be priced at, above
or below such announced rate.)  Any
change in the “base rate” announced by Bank of America (acting through its
Canada branch) shall take effect at the opening of business on the day
specified in the public announcement of such change.  Each interest rate based upon the Canadian
Base Rate shall be adjusted simultaneously with any change in the “base rate”.  In the event that Bank of America (acting
through its Canada branch) (including any successor or assignee) does not at
any time publicly announce a “base rate,” then “Canadian Base Rate”
shall mean the “base rate” publicly announced by a Schedule I of the Bank Act (Canada) chartered bank in Canada
selected by Canadian Agent.

 

Canadian Base Rate Loan - a Canadian
Revolver Loan, or portion thereof, funded in Dollars and bearing interest
calculated by reference to the Canadian Base Rate.

 

Canadian Benefit Plans - all employee
benefit plans, programs or arrangements of any nature or kind whatsoever that
are not Canadian Pension Plans and are maintained or contributed to by, or to
which there is or may be an obligation to contribute by, any Borrower or its
Subsidiaries in respect of their employees or former employees in Canada.

 

Canadian Borrower - as defined
in the preamble of this Agreement.

 

Canadian Borrowing Base - on any date
of determination thereof, an amount in Canadian Dollars equal to the lesser of
the following:

 

(a) the Canadian
Revolver Commitments, minus the LC Reserve; or

 

(b)           the sum of:

 

	
  (i)

  	
  the Accounts Formula
  Amount calculated with reference to Eligible Accounts of Canadian Borrower, plus

  
	
   

  	
   

  
	
  (ii)

  	
  the Inventory Formula
  Amount calculated with reference to Eligible Inventory of Canadian Borrower, plus

  
	
   

  	
   

  
	
  (iii)

  	
  the Canadian Fixed Asset
  Formula Amount, minus

  
	
   

  	
   

  
	
  (iv)

  	
  the Availability Reserves
  applicable to Canadian Collateral.

  

 

Canadian Collateral - all of each
Canadian Obligor’s right, title and interest in Property of such Canadian
Obligor granted to Administrative Agent, for the benefit of the Secured
Parties, in the applicable Security Documents that now or hereafter secure the
payment or performance of any of the Canadian Obligations.

 

Canadian Dollar Equivalent - on any date
of determination, with respect to an amount denominated in Canadian Dollars,
such amount of Canadian Dollars, and with respect to an amount denominated in a
currency other than Canadian Dollars, the amount of Canadian Dollars (as
conclusively ascertained by Administrative Agent absent manifest error) which
could be purchased by Administrative

 

10

 

Agent with that amount of
such other currency at the spot rate of exchange quoted by Administrative Agent
in the applicable foreign exchange market in accordance with its normal market
practice on the date of determination for the purchase of Canadian Dollars with
such currency.

 

Canadian Dollars - the lawful
currency of Canada.

 

Canadian Fixed Asset
Amortization Amount - on a monthly basis, an amount equal to $35,000 on
the first day of each month.

 

Canadian Fixed Asset Formula
Amount - as of any date of determination, the Canadian Maximum Fixed Asset
Amount, as reduced on the first day of each month by the Canadian Fixed Asset
Amortization Amount for the applicable month (and after giving effect to any
prior reductions based on the Canadian Fixed Asset Amortization Amounts in
previous months), subject to further reduction pursuant to Section 5.3.

 

Canadian LC Obligations - on any date,
the Canadian Dollar Equivalent of an amount equal to the sum of (without
duplication) (i) all amounts then due and payable by Canadian Borrower on
such date by reason of any payment that is made by the Applicable Issuing Bank
under a Letter of Credit issued pursuant to this Agreement and that has not
been repaid to such Issuing Bank or Canadian Agent (including by means of a
Revolver Loan pursuant to Section 2.3.2(a)),
plus (ii) the aggregate Undrawn Amount of all Letters of Credit which are
issued pursuant to this Agreement for the account of Canadian Borrower and
which are then outstanding or for which an LC Application has been delivered to
and accepted by the Applicable Issuing Bank, plus (iii) all fees which are
then due or to become due by Canadian Borrower with respect to outstanding
Letters of Credit issued pursuant to this Agreement; provided, however,
when used (A) as a component of the term LC Obligations as used in the
definition of Cash Collateralize, and (B) in the definition of Canadian
Revolver Exposure, the term Canadian LC Obligations shall not be deemed to
include amounts described in clause (iii) above.

 

Canadian Lenders - Bank of
America, N.A. (acting through its Canada branch) and each other Lender that
provided a Borrower Group Commitment with respect to Canadian Revolver Loans
and is a Canadian Qualified Lender.

 

Canadian Letter of Credit - a standby or
documentary letter of credit issued pursuant to this Agreement for the account
of Canadian Borrower.

 

Canadian Maximum Fixed Asset
Amount - an amount equal to the lesser of (i) the sum of 80% of the net
orderly liquidation value of the Canadian Borrower’s Equipment plus 65% of the
fair market value of the Canadian Borrower’s Real Estate, in each case, as
determined on the Closing Date, or (ii) $3,635,000.

 

Canadian Obligations - on any date,
the portion of the Obligations outstanding that are owing by Canadian Borrower
or any other Canadian Obligor.

 

Canadian Obligor - Canadian
Borrower or a Guarantor organized under the laws of Canada or a province or
territory thereof, that has granted in favor of the Administrative Agent a Lien
upon any of any of such Person’s assets to secure payment of any of the
Canadian Obligations.

 

Canadian Pension Plan - a plan,
program or arrangement which is required to be registered as a pension plan
under any applicable pension benefits standards or tax statute or regulation in
Canada 

 

11

 

maintained or contributed to
by, or to which there is or may be an obligation to contribute by, any Obligor
in respect of its Canadian employees or former employees.

 

Canadian Prime Rate - on any date,
the per annum rate of interest so designated from time to time by Bank of
America (acting through its Canada branch) as its “prime rate” for commercial
loans made by it in Canada in Canadian Dollars, such rate being a reference
rate and not necessarily representing the lowest or best rate being charged to
any customer. Any change in such rate announced by Bank of America (acting
through its Canada branch) shall take effect at the opening of business on the
day specified in the public announcement thereof.

 

Canadian Prime Rate Loan - a Canadian
Revolver Loan, or portion thereof, funded in Canadian Dollars and bearing
interest calculated by reference to the Canadian Prime Rate.

 

Canadian Priority Payable
Reserve - on any date of determination for Canadian Obligors, a reserve
established from time to time by Administrative Agent in its Credit Judgment in
such amount as Administrative Agent may determine reflects the unpaid or
un-remitted payroll tax deductions, pension plan contributions, employment
insurance premiums, amounts deducted for vacation pay, wages, workers’
compensation, and other unpaid or unremitted amounts by any Canadian Obligor
which give rise, or are capable of giving rise, to a Lien with priority under
Applicable Law over the Lien of Agents for the benefit of the Secured Parties.

 

Canadian Qualified Lender - a financial
institution that is listed on Schedule I, II, or III of the Bank Act (Canada) or is not a foreign bank
for purposes of the Bank Act
(Canada), and if such financial institution is not resident in Canada and is
not deemed to be resident in Canada for purposes of the ITA, that financial
institution deals at arm’s length with each Canadian Obligor for purposes of
the ITA.

 

Canadian Revolver Commitment - at any date
for any Canadian Lender, the obligation of such Lender to make Canadian
Revolver Loans and to purchase participations in LC Obligations pursuant to the
terms and conditions of this Agreement, which shall not exceed the principal
amount set forth opposite such Lender’s name under the heading “Revolver
Commitment” on Schedule 1.1.1
or as described in the Assignment and Acceptance by which it became a Lender,
as modified from time to time pursuant to the terms of this Agreement or to
give effect to any applicable Assignment and Acceptance; and “Canadian
Revolver Commitments” means the aggregate principal amount of the Canadian
Revolver Commitments of all Canadian Lenders, the maximum amount of which on
any date shall equal the Canadian Revolver Facility Amount.

 

Canadian Revolver Commitment
Increase Lender - as defined in Section 2.1.9(g).

 

Canadian Revolver Exposure - on any date,
an amount equal to the Dollar Equivalent of the sum of the Canadian Revolver Loans
outstanding on such date plus the Canadian LC Obligations on such date.

 

Canadian Revolver Facility
Amount - an amount in Canadian Dollars having a Dollar Equivalent of
$20,000,000, as such Canadian Facility Amount may be adjusted from time to time
in accordance with the provisions of Sections
2.1.6, 2.1.9, and 11.2.

 

Canadian Revolver Loans - Revolver
Loans made by Canadian Lenders to Canadian Borrower pursuant to Section 2.1.2, which Revolver Loans
shall, if denominated in Canadian Dollars, be either a Canadian BA Rate Loan or
a Canadian Prime Rate Loan, or, if denominated in Dollars, be either a Canadian
Base Rate Loan or a LIBOR Loan, in each case as selected by Canadian Borrower.

 

12

 

Canadian Revolver Notes - the
promissory notes to be executed by Canadian Borrower on or about the Closing
Date in favor of each Canadian Lender that requests a promissory note to
evidence the Canadian Revolver Loans funded from time to time by such Canadian
Lender (other than Swingline Loans), which shall be in the form of Exhibit A-2 to this Agreement,
together with any replacement or successor notes therefor.

 

Canadian Security Agreement - each general
security agreement, and, if any, deeds of hypothec, among Canadian Obligors,
certain U.S. Obligors and Administrative Agent.

 

Canadian Subsidiary - a Subsidiary
formed under the laws of Canada or a province or territory thereof.

 

Capital Adequacy Regulation - any law,
rule, regulation, guideline, request or directive of any central bank or other
Governmental Authority, whether or not having the force of law, regarding
capital adequacy of a bank or any Person controlling a bank.

 

Capital Expenditures - expenditures
made by a Borrower or its Subsidiaries for the acquisition of any fixed assets,
or any improvements, replacements, substitutions or additions thereto which are
required to be capitalized for financial reporting purposes in accordance with
GAAP; provided  that “Capital Expenditures” shall not
include (i) any additions to property, plant and equipment and other
capital expenditures made with (a) the proceeds of any equity securities
issued or capital contributions received, or Debt borrowed (other than
borrowings under this Agreement) by any Borrower Group or any of their
Subsidiaries in connection with such capital expenditures, (b) the
proceeds from any casualty insurance or condemnation or eminent domain, to the
extent that the proceeds therefrom are utilized for capital expenditures
pursuant to Section 8.6.2(c),
or (c) the proceeds from any sale or other disposition of any Borrower
Group’s assets (other than Inventory, Accounts and the proceeds thereof
constituting Collateral), to the extent that the proceeds therefrom are
utilized for capital expenditures pursuant to the proviso to Section 8.4.2, (ii) any portion
of the purchase price of a Permitted Acquisition which is allocated to
property, plant or equipment acquired as part of such Permitted Acquisition, or
(iii) any expenditures which are contractually required to be reimbursed
to the Loan Parties in cash by a third party and are in fact reimbursed during
the applicable Test Period.

 

Capital Lease - any lease
that is required to be capitalized for financial reporting purposes in
accordance with GAAP; provided, that for all purposes hereunder,
the amount of any obligations under any Capital Lease shall be the amount
thereof accounted for as a liability in accordance with GAAP.

 

Capitalized Lease Obligation - any Debt of
an Obligor represented by obligations under a Capital Lease.

 

Cash Collateral - cash or Cash
Equivalents, and any interest or other income earned thereon, that is delivered
to the Administrative Agent in accordance with this Agreement by a Borrower
Group to Cash Collateralize any Obligations of such Borrower Group.

 

Cash Collateral Account - a demand
deposit, money market or other account established by an Applicable Agent at
Bank of America or such other financial institutions as the Applicable Agent
may select in its reasonable discretion, which account shall be subject to the
Applicable Agent’s Liens for the benefit of Secured Parties.

 

Cash Collateralize - the delivery
of cash to an Applicable Agent, as security for the payment of Obligations of a
Borrower Group, in an amount equal to (i) with respect to LC Obligations
of such 

 

13

 

Borrower Group, 103% of the
aggregate LC Obligations of such Borrower Group, (ii) with respect to Bank
Products that are included as Obligations hereunder of such Borrower Group, the
Applicable Agent’s good faith estimate of the amount due or to become due,
including all fees and other amounts relating to such Obligations of such
Borrower Group (except to the extent an Availability Reserve has already been
established and in effect with respect thereto), and (iii) with respect to
any asserted Claims against any Borrower that is a member of such Borrower
Group, the Applicable Agent’s good faith estimate of the amount due or to
become due that consist of Obligations of such Borrower Group (except to the
extent an Availability Reserve has already been established and in effect with
respect thereto).  “Cash
Collateralization” has a correlative meaning.

 

Cash Equivalents - (a) marketable
obligations issued or unconditionally guaranteed by, and backed by the full
faith and credit of, the United States or Canadian government, maturing within
12 months of the date of acquisition; (b) certificates of deposit, time
deposits and bankers’ acceptances maturing within 12 months of the date of
acquisition, and overnight bank deposits, in each case which are issued by a
commercial bank organized under the laws of the United States, Canada or any
state or district of the United States or province or territory of Canada,
rated A-1 (or better) by S&P or P-1 (or better) by Moody’s at the time of
acquisition, and (unless issued by a Lender) not subject to offset rights; (c) repurchase
obligations with a term of not more than thirty (30) days for underlying
investments of the types described in clauses (a) and (b) entered
into with any financial institution meeting the qualifications specified in
clause (b); (d) commercial paper rated A-1 (or better) by S&P or P-1
(or better) by Moody’s, and maturing within nine months of the date of
acquisition; and (e) shares of any money market fund that has
substantially all of its assets invested continuously in the types of
investments referred to above, has net assets of at least $500,000,000 and has
the highest rating obtainable from either Moody’s or S&P.

 

Cash Management Services - any services
provided from time to time by Bank of America or its Affiliates or by any other
Lender or its Affiliates, to any Borrower or its Subsidiaries in connection
with operating, collections, payroll, trust, or other depository or
disbursement accounts, including automatic clearinghouse, controlled
disbursement, depository, electronic funds transfer, information reporting,
lockbox, stop payment, overdraft and/or wire transfer services.

 

Casualty Event - any event
that gives rise to the receipt by a Borrower or any of its Subsidiaries of any
insurance proceeds or condemnation awards in respect of any equipment, fixed
assets or real property (including any improvements thereon).

 

Catch Up Pension
Contributions - any contribution made by Borrowers to the
Retirement Income Plan for Salaried Employees of Essex Group, Inc. and the
Retirement Plan for Hourly Employees of Essex Group, Inc. over the amount
of any contributions with respect to such Plans shown as expenses in Borrowers’
income statements for such period and/or calculated in Borrowers’ Consolidated
net income for such period.

 

CERCLA - the
Comprehensive Environmental Response Compensation and Liability Act (42 U.S.C.
§ 9601 et seq.).

 

Change in Law - the
occurrence, after the date hereof, of (a) the adoption or taking effect of
any law, rule, regulation or treaty; (b) any change in any law, rule,
regulation or treaty or in the administration, interpretation or application
thereof by any Governmental Authority; or (c) the making or issuance of
any request, guideline or directive by any Governmental Authority.

 

Change of Control - the
occurrence of any of the following events after the date of this Agreement
unless such event occurs in connection with a transaction otherwise permitted
under this 

 

14

 

Agreement (including
pursuant to Section 10.2.9):  (a) LS Cable ceases to own and control,
beneficially and of record, directly or indirectly, 51% of the common stock of
SEI; or (b) SEI ceases to own and control, beneficially and of record,
directly or indirectly, 100% of the common stock of any Obligor.

 

Chattel Paper - shall have
the meaning ascribed to such term in the U.S. Security Agreement or the
Canadian Security Agreement, as applicable.

 

China Investment - as defined
in Schedule 1.1.2.

 

Claims - without
duplication, all liabilities, obligations, actual out-of-pocket losses,
damages, penalties, judgments, proceedings, costs and expenses of any kind
(including remedial response costs, reasonable attorneys’ fees and
Extraordinary Expenses) at any time (including after Full Payment of the
Obligations, resignation or replacement of Administrative Agent, or replacement
of any Lender) incurred by or asserted against any Indemnitee in any way
relating to (a) any Loans, Letters of Credit, Loan Documents, or the use
thereof or transactions relating thereto, (b) any action taken or omitted
to be taken by any Indemnitee in connection with any Loan Documents, (c) the
existence or perfection of any Liens, or realization upon any Collateral, (d) exercise
of any rights or remedies under any Loan Documents or Applicable Law, or (e) failure
by any Obligor to perform or observe any terms of any Loan Document, in each
case including all costs and expenses relating to any investigation,
litigation, arbitration or other proceeding (including an Insolvency Proceeding
or appellate proceedings), whether or not the applicable Indemnitee is a party
thereto.

 

Closing Date - as defined
in Section 6.1.

 

Closing Date Pledged Cash - cash of the
U.S. Borrowers on the Closing Date maintained in a Deposit Account at Bank of
America or Banc of America Securities LLC, which Deposit Account is subject to
Administrative Agent’s first priority security interest and Lien, and over
which Deposit Account Administrative Agent has been granted by the U.S.
Borrowers exclusive control, provided  that no more than
$60,000,000 of such cash pledged in such account shall be applied by
Administrative Agent to repay the U.S. Revolver Loans on the Business Day
immediately following the Closing Date.

 

Collateral - any Property
that is U.S. Collateral or Canadian Collateral.

 

Commitment - for any
Lender, such Lender’s Revolver Commitment. 
“Commitments” means the aggregate amount of all Revolver
Commitments.

 

Commitment Increase - as defined
in Section 2.1.9(a).

 

Commitment Increase
Amendment - as defined in Section 2.1.9(d).

 

Commitment Increase
Availability - as defined in Section 2.1.9(b).

 

Commitment Increase Closing
Date - as defined in Section 2.1.9(e).

 

Commitment Increase
Effective Date - as defined in Section 2.1.9(c).

 

Commitment Increase Notice - as defined
in Section 2.1.9(a).

 

Commitment Termination Date - with respect
to all Borrowers and all Borrower Groups, the earliest to occur of (i) the
Revolver Termination Date; (ii) the date on which Borrower Agent
terminates 

 

15

 

all of the Borrower Group
Commitments pursuant to Section 2.1.6;
or (iii) the date on which the maturity of the Loans is accelerated (or
deemed accelerated) and the Borrower Group Commitments are irrevocably
terminated (or deemed terminated) pursuant to Section 11.2.

 

Communications - as defined
in the Preamble to this Agreement.

 

Communications GP - as defined
in the Recitals to this Agreement.

 

Compliance Certificate - a
certificate (including all supporting schedules) to be provided by Borrowers to
Administrative Agent pursuant to this Agreement, substantially in the form of Exhibit C.

 

Consigned Inventory - Inventory of
a Borrower that is in the possession of another Person on a consignment or
other basis that does not constitute a final sale and acceptance of such
Inventory.

 

Consigned Inventory
Conditions - the following conditions:  (i) the Inventory is owned by a
Borrower, (ii) the Inventory has been consigned to an Eligible Consignee, (iii) the
Inventory is located in the United States or Canada (other than the Province of
Quebec), and (iv) the Inventory would otherwise constitute Eligible
Inventory if it were not Consigned Inventory.

 

Consolidated - with respect
to SEI and its Subsidiaries, consolidated in accordance with GAAP.

 

Consolidated EBITDA - means (a) EBITDA,
plus (b) Acquired EBITDA, minus Disposed EBITDA.

 

Consolidated Fixed Charge
Coverage Ratio - with respect to SEI, Borrowers and their
Subsidiaries, and with respect to any Test Period, the ratio of

 

(a) an amount equal to
the sum of (during such Test Period):

 

(i) Consolidated
EBITDA minus

 

(ii) Capital
Expenditures made by any Borrower Group or any of their Subsidiaries within
such Borrower Group in connection with such Capital Expenditures, minus

 

(iii) Taxes paid in
cash, minus

 

(iv) Catch Up Pension
Contributions made, minus

 

(v) any Distributions
made, other than (a) Upstream Payments, and (b) Distributions made
prior to the Closing Date to the extent permitted under the Existing Loan
Agreement), minus

 

(vi) payments made for
Included Investments that were not financed with the proceeds of any equity
securities issued or capital contributions received, or Borrowed Money (other
than borrowings under this Agreement) by any Borrower Group or any of their
Subsidiaries within such Borrower Group in connection with such Included
Investments, minus

 

(vii) without
duplication in this definition or the definition of EBITDA, Merger Transaction
Costs in excess of $85,000,000, minus

 

16

 

(viii) extraordinary
cash charges, plus

 

(ix) extraordinary cash
gains, minus

 

(x) payments with
respect to long-term incentive awards, to the extent not deducted in the
calculation of EBITDA for the same Test Period.

 

to (b)      the sum of (during such Test Period):

 

(i)  all cash interest
payments made on Debt, plus

 

(ii) all principal
payments made on Debt, but excluding

 

(A) any prepayments of
Revolver Loans which do not result in a permanent reduction of the Revolver
Commitment,

 

(B) any prepayments of
Debt made pursuant to Sections 5.3(a) and
5.3(b), and

 

(C) payments to
reimburse any drawings under any documentary letters of credit; plus

 

(iii)          the sum of the Canadian Fixed Asset Amortization Amount plus
the U.S. Fixed Asset Amortization Amount applicable to such Testing Period.

 

Consolidated Total Debt - as of any
date of determination, (A) the aggregate amount of (a) Debt that (i) arises
from the lending of money by any Person to such Obligor, (ii) is evidenced
by notes, drafts, bonds, debentures, credit documents or similar instruments, (iii) accrues
interest or is a type upon which interest charges are customarily paid or (iv) was
issued or assumed as full or partial payment for Property; (b) Capital
Leases; and (c) reimbursement obligations with respect to letters of
credit, minus (B) the aggregate amount of unrestricted Cash and
Cash Equivalents listed on the consolidated balance sheet of SEI, Borrowers and
their Subsidiaries.

 

Contingent Obligation - any
obligation of a Person arising from a guaranty (excluding guarantees of
performance), indemnity or other assurance of payment or performance of any
Debt, lease, dividend or other obligation (“primary obligations”) of
another obligor (“primary obligor”) in any manner, whether directly or
indirectly, including any obligation of such Person under any (a) guaranty,
endorsement, co-making or sale with recourse of an obligation of a primary
obligor; (b) obligation to make take-or-pay or similar payments regardless
of nonperformance by any other party to an agreement; and (c) arrangement (i) to
purchase any primary obligation or security therefor, (ii) to supply funds
for the purchase or payment of any primary obligation, (iii) to maintain
or assure working capital, equity capital, net worth or solvency of the primary
obligor, (iv) to purchase Property or services for the purpose of assuring
the ability of the primary obligor to perform a primary obligation, or (v) otherwise
to assure or hold harmless the holder of any primary obligation against loss in
respect thereof; provided, however, that the term “Contingent
Obligation” shall not include (i) any product warranties extended in
the Ordinary Course of Business, (ii) indemnities made to officers and
directors of any such Person whether pursuant to the governing organizational
documents of such Person or otherwise, and (iii) any environmental
indemnities identified in the schedules to the Environmental Agreements.  The amount of any Contingent Obligation shall
be deemed to be the stated or determinable amount of the primary obligation
(or, if less, the maximum amount for which such Person may be liable under the
instrument evidencing the Contingent Obligation) or, if not stated or
determinable, the maximum reasonably anticipated liability with respect 

 

17

 

thereto (assuming such
Person is required to perform thereunder) as determined by such Person in good
faith.

 

Credit Judgment -
Administrative Agent’s reasonable judgment exercised in a manner consistent
with its customary practices or otherwise in good faith, based upon its
consideration of any factor that it reasonably believes (a) could adversely
affect the quantity, quality, mix or value of Collateral (including any
Applicable Law that may inhibit collection of an Account), the enforceability
or priority of any Agent’s Liens, or the amount that Agents and Lenders could
receive in liquidation of any Collateral; (b) provides evidence that any
collateral report or financial information delivered by any Obligor is
incomplete, inaccurate or misleading in any material respect; (c) materially
increases the likelihood of any Insolvency Proceeding involving an Obligor; or (d) creates
or could result in a Default or Event of Default.  In exercising such judgment, Administrative
Agent may consider factors already included in the definitions of Eligible
Accounts or Eligible Inventory, as well as the financial and business climate
of Borrowers’ industry, changes in collection history and dilution of Accounts,
changes in any material respect in the mix, demand for and pricing of
Inventory, changes in any material respect concentration risks, and any factors
that could materially increase the credit risk of lending to Borrowers on the
security of the Collateral.

 

Credit Party - an Agent, a
Lender or an Issuing Bank; and “Credit Parties” means Agents, Lenders
and Issuing Banks.

 

Customer Contract Inventory - Inventory of
another Person at any time in the possession of any Borrower for processing,
repairing or otherwise.

 

Customs Broker - a Person
serving as a customs broker for a Borrower in connection with such Borrower’s
importation of Inventory.

 

CWA - the Clean
Water Act (33 U.S.C. §§ 1251 et seq.).

 

Debt - as applied
to any Person, without duplication, (a) all items that would be included
as liabilities on a balance sheet in accordance with GAAP, including Capital
Leases but excluding all accrued expenses and trade payables incurred and being
paid in the Ordinary Course of Business; (b) all Contingent Obligations; (c) all
reimbursement obligations in connection with letters of credit issued for the
account of such Person; and (d) in the case of a Borrower, the
Obligations.  The Debt of a Person shall
include any recourse Debt of any partnership in which such Person is a general
partner or joint venturer.

 

Debt Redemption - as defined
in the Recitals to this Agreement.

 

Default - an event or
condition the occurrence of which would, with the lapse of time or the giving
of notice, or both, become an Event of Default.

 

Default Rate - on any date,
a rate per annum that is equal to (i) in the case of each Revolver Loan
outstanding on such date, 2% in excess of the rates otherwise applicable to
such Revolver Loans on such date; (ii) in the case of U.S. LC Obligations
outstanding and due and payable on such date, 2% in excess of the Applicable
Margin for LIBOR Loans applicable on such date; (iii) in the case of Canadian
LC Obligations outstanding and due and payable on such date, 2% in excess of
the Applicable Margin for Canadian BA Rate Loans applicable on such date; and (iv) in
the case of any of the other Obligations outstanding and due and payable on
such date, 2% in excess of the U.S. Base Rate in effect on such date plus the
Applicable Margin for U.S. Base Rate Loans applicable on such date.

 

18

 

Delayed
Credit Party Payment Rate - a per annum rate of interest that is to be
paid by one Credit Party to another Credit Party when the paying Credit Party
is delinquent in making a payment required hereunder to the other Credit Party,
which rate shall be equal to (i) the U.S. Base Rate when the payment to be
made is in Dollars, and (ii) the Canadian Prime Rate when the payment to
be made is in Canadian Dollars.

 

Deposit Account - as defined
in the U.S. Security Agreement.

 

Deposit Account Control
Agreements - the deposit account control agreements to be
executed by each institution maintaining a Deposit Account for a Borrower or
other Obligor (other than SEI), in favor of the Applicable Agent, for the
benefit of the applicable Secured Parties, as security for the Obligations of
such Borrower or other Obligor, in each case to the extent required under this
Agreement or the U.S. Security Agreement.

 

Disposed EBITDA - means EBITDA
of any Person, Property, business, product, product line or asset sold, transferred
or otherwise disposed of, closed or classified as discontinued operations by a
Borrower, for any period prior to the disposition (but excluding any related
Person, Property, business or assets to the extent not so disposed), as
specified in a certificate executed by a Senior Officer and delivered to the
Administrative Agent.

 

Distribution - any
declaration or payment of a distribution, interest or dividend on any Equity
Interest (other than payment-in-kind); any distribution, advance or repayment
of Debt to a holder of Equity Interests; or any purchase, redemption, or other
acquisition or retirement for value of any Equity Interest unless (x) made
substantially contemporaneously from the net proceeds of the sale of Equity
Interests or (y) such purchase, redemption or other acquisition or
retirement was effected solely by the exchange of other Equity Interests
therefor.

 

Document - shall have
the meaning ascribed to such term in the U.S. Security Agreement, or the  meaning ascribed to the term “document of
title” in Canadian Security Agreement, as applicable.

 

Dollar Equivalent - on any date,
with respect to any amount denominated in Dollars, such amount in Dollars, and
with respect to any stated amount in a currency other than Dollars, the amount
of Dollars that Administrative Agent determines (which determination shall be
conclusive and binding absent manifest error) would be necessary to be sold on
such date at the applicable Exchange Rate to obtain the stated amount of the
other currency.

 

Dollars and the sign $ - lawful money
of the United States of America.

 

Domestic In-Transit
Inventory - Inventory that has been purchased by a Borrower
and that is in-transit from a Vendor from a location within the continental
United States to such Borrower or a location designated by such Borrower that
is in the continental United States.

 

Domestic Subsidiary - a Subsidiary
(other than a Subsidiary that is a Borrower) that is incorporated under the
laws of a state of the United States or the District of Columbia.

 

Dominion Account - a special
Deposit Account established by Borrowers within a Borrower Group at Bank of
America or another bank reasonably acceptable to Administrative Agent, over
which the Applicable Agent shall, following the delivery of a Springing Dominion
Notice, have exclusive control in accordance with the Section 8.2.4 for withdrawal purposes.

 

19

 

EBITDA - determined
for any period, on a Consolidated basis, means net earnings (or loss) for such
period, excluding, without duplication:

 

(a) any
gain or loss arising from the sale of capital assets outside the Ordinary
Course of Business;

 

(b) any
gain arising from write-up of assets and any impairment charge or asset
write-off or write-down, including impairment charges or asset write-offs or
write-downs related to intangible assets, long-lived assets, investments in
debt and equity securities or as a result of a change in law or regulation, in
each case, pursuant to GAAP, and the amortization of intangibles arising
pursuant to GAAP;

 

(c) earnings
of any entity (other than an Obligor or its Subsidiaries) unless such earnings
have actually been received by SEI or a Borrower in the form of cash
Distributions;

 

(d) any
earnings of a Subsidiary that for any reason are unavailable for payment of
Distributions to SEI or a Borrower;

 

(e) the
cumulative effect of a change in accounting principles and changes as a result
of the adoption or modification of accounting policies;

 

(f) effects
of adjustments in the inventory, property and equipment, software, goodwill,
other intangible assets, in-process research and development, deferred revenue,
debt line items and other non-cash charges in the Consolidated financial
statements resulting from the application of purchase accounting (including any
subsequent inventory revaluation) in relation to the Merger and the Related
Transactions, or any consummated acquisition, or the amortization or write-off
of any amounts thereof, net of taxes;

 

(g) any
after-tax effect of income (loss) from the early extinguishment of Debt,

 

(h) any
fees, expenses, or charges incurred or any amortization thereof in connection
with the Merger and the Related Transactions, including closing expenses and
fees, financing costs and fees,  debt
prepayment charges, and charges for the redemption of stock options and
restricted stock and other equity awards and any other costs incurred in
connection with the Merger and the Related Transactions (collectively the “Merger
Transaction Costs”); provided, however, that such Merger
Transaction Costs shall not exceed $85,000,000;

 

(i) any gains from
insurance recoveries with respect to liability or casualty events;

 

(j) provision for
Taxes;

 

(k) Consolidated
interest expense;

 

(l) expenses
with respect to long-term incentive awards to the extent not expected to be
settled in the next twelve (12) months;

 

(m) depreciation
and amortization;

 

(n) other
non-cash expenses (including non-cash compensation relating to restricted
stock, stock-option grants and other equity awards or rights) and any amounts
deducted as a result 

 

20

 

of the amortization of any
one-time fees or expenses incurred in connection with the initial incurrence of
the Obligations on the Closing Date;

 

(o) extraordinary
gains and losses; and

 

(p) any
amount deducted from earnings in respect of dividends in such period (whether
paid or accrued) on preferred stock pursuant to Financial Accounting Standard No. 150.

 

Effective Time - as defined
in the Recitals to this Agreement.

 

EGI - as defined
in the Preamble to this Agreement.

 

Eligible Account - an Account
that arises in the Ordinary Course of Business of a Borrower from the sale of
Inventory or rendition of services, is subject to the Administrative Agent’s
duly perfected, enforceable and first priority Lien, is payable in Dollars (or,
in the case of an Account owing to a Canadian Obligor, in Dollars or Canadian
Dollars) and is deemed by Administrative Agent, in its Credit Judgment, to be
an Eligible Account.  Without limiting
the foregoing, no Account with respect to which any of the following conditions
exist shall be an Eligible Account: (a) it is unpaid for more than sixty
(60) days after the original due date, or more than one hundred twenty (120)
days after the original invoice date; (b) 50% or more of the Accounts
owing by the relevant Account Debtor are not Eligible Accounts under the
foregoing clause; (c) when aggregated with other Accounts owing by the
relevant Account Debtor, it exceeds 20% of the aggregate Eligible Accounts (or
such higher percentage as the Applicable Agent may establish for the Account
Debtor from time to time); provided, however, that any Accounts
owing by other Account Debtors that would otherwise be deemed ineligible under
this clause (c) shall not be excluded from the aggregate amount of
Eligible Accounts for purposes of calculating such percentage for the
applicable Account Debtor; (d) any covenant, representation or warranty in
this Agreement with respect to such Account has been breached; (e) it is
owing by a creditor or supplier, or is otherwise subject to a potential offset,
counterclaim, dispute, deduction, return, rebate, discount, recoupment,
reserve, defense, chargeback, credit or allowance or Tax (including sales, excise
or other taxes of the Account Debtor) (but, in each case of this clause (e),
ineligibility shall be limited to the amount thereof); (f) an Insolvency
Proceeding has been commenced by or against the Account Debtor (excluding
Delphi to the extent such Account arises post-petition and would otherwise
constitute an Eligible Account hereunder) and remains pending; or the Account
Debtor has failed, has suspended or ceased doing business, is liquidating,
dissolving or winding up its affairs, or is not Solvent; (g) the Account
Debtor is organized or has its principal offices or assets outside the United
States, Canada or Puerto Rico, unless the Account constitutes an Eligible Foreign
Account; (h) it is owing by a Government Authority (unless the Account
Debtor is the United States of America or Canada or any department, agency or
instrumentality thereof and the Account has been assigned to the Applicable
Agent in compliance with the Assignment of Claims Act, the Financial
Administration Act (Canada) or other Applicable Law), or the Account Debtor is
a state, province, territory, county or municipality, or a political
subdivision or agency thereof and Applicable Law disallows or restricts an
assignment of Accounts on which it is the Account Debtor; (i) it is not subject
to a duly perfected, first priority Lien in favor of the Applicable Agent, or
is subject to any other Lien (except a Permitted Lien), or is subject to any
revendication, repossession or retention of title rights of unpaid suppliers to
a  U.S. Borrower or Canadian Borrower; (j) the
goods giving rise to it have not been delivered to and accepted by the Account
Debtor, the services giving rise to it have not been accepted by the Account
Debtor, or it otherwise does not represent a final sale; (k) it is evidenced
by Chattel Paper or an Instrument of any kind (unless such Chattel Paper or
Instrument has been created in the Ordinary Course of Business and not as a
result of credit problems, has been delivered to the Applicable Agent fully
endorsed, and is subject to a first priority perfected Lien in favor of the
Applicable Agent) or has been reduced to judgment; (l) its payment has
been extended, the Account Debtor has made 

 

21

 

a partial payment (except in
accordance with pre-arranged payment terms), or it arises from a sale on a
cash-on-delivery basis; (m) it arises from a sale to an Affiliate or from
a sale on a bill-and-hold, guaranteed sale, sale or return, sale on approval,
consignment (unless such Account arises from Eligible Inventory sold by an
Eligible Consignee to a third party purchaser), or other repurchase or return
basis; (n) it represents a progress billing or retainage; (o) it
includes a billing for interest, fees or late charges, but ineligibility shall
be limited to the extent of such billing; (p) it arises from a retail sale
to a Person who is purchasing for personal, family or household purposes; (q) the
Account Debtor is located in any state which imposes conditions on the right of
a creditor to collect accounts receivable unless the applicable Borrower has
either qualified to transact business in such state as a foreign entity or
filed a Notice of Business Activities Report or other required report with the
appropriate officials in those states for the then current year; (r) the
Account Debtor is located in a state in which such Borrower is deemed to be
doing business under the laws of such state and which denies creditors access
to its courts in the absence of qualification to transact business in such
state or of the filing of any reports with such state, unless such Borrower has
qualified as a foreign entity authorized to transact business in such state or
has filed all required reports; (s) such Borrower has made any agreement
with the Account Debtor for any deduction therefrom, except for discounts or
allowances which are made in the Ordinary Course of Business for prompt payment
and which discounts or allowances are reflected in the calculation of the face
value of each invoice related to such Account; or (t) it arises from the
sale of any Inventory that is not Eligible Inventory pursuant to clause (b) of
the definition of “Eligible Inventory.”

 

Eligible Assignee - a Person
that is (a) a Lender, U.S.-based Affiliate of a Lender or Approved Fund; (b) any
other financial institution approved by Administrative Agent and Borrower Agent
(which approval by Borrower Agent shall not be unreasonably withheld or
delayed, and shall be deemed given if no objection is made within five (5) Business
Days after notice of the proposed assignment), that is organized under the laws
of the United States or any state or district thereof, has total assets in
excess of $5 billion, extends asset-based lending facilities in its ordinary
course of business and whose becoming an assignee would not constitute a
prohibited transaction under Section 4975 of ERISA or any other Applicable
Law; (c) during any Event of Default, any Person acceptable to
Administrative Agent in its reasonable business judgment (other than a Borrower
or any Affiliate of a Borrower); and (d) with respect to holders of
Canadian Obligations, a Canadian Qualified Lender.

 

Eligible Consignee - a consignee
that satisfies the following conditions: 
(i) such consignee shall have executed a consignment agreement in a
form agreed upon by Borrower Agent and Administrative Agent on the Closing
Date, or such other form as may be reasonably satisfactory to Administrative
Agent, which permits assignment to Administrative Agent, granting the
applicable Borrower a security interest under the UCC or the PPSA, as
applicable, in all Consigned Inventory that is consigned by such Borrower to
such consignee; (ii) consignee and such Borrower shall have executed or
otherwise authorized the filing of financing statements under the UCC or the
PPSA, as applicable, based upon the requirements of the filing jurisdiction,
naming such consignee as debtor and such Borrower as secured party (and, if
requested by Administrative Agent, naming Administrative Agent as assignee),
covering the Consigned Inventory, in form and substance reasonably satisfactory
to Administrative Agent; such financing statement shall have been filed of
record in all appropriate filing locations for the perfection of a first
priority security interest in such Consigned Inventory and the identifiable
proceeds thereof, and, after filing of such financing statements, such Borrower
shall have conducted searches of all filings made against such consignee in
such filing offices and taken such other action as Administrative Agent may
reasonably request, including notification pursuant to Section 9-324 of
the UCC (and similar applicable provisions under the PPSA) to each holder of a
conflicting Lien in such Consigned Inventory, which shall confirm that the
security interest in the Consigned Inventory in favor of such Borrower (and
assigned to Administrative Agent if so requested by Administrative Agent) is
and shall be a first priority Lien;  (iii) if
requested by Administrative Agent, Administrative Agent shall have received
copies of the consignment 

 

22

 

agreement, the filed
financing statements under the UCC and the PPSA, as applicable, and the UCC and
the PPSA searches; and (v) the consignee either (A) is rated BAA (or
better) by S&P or Baa (or better) by Moody’s, (B) is listed on Schedule 1.1.3 as a consignee approved
by Administrative Agent, or (c) is otherwise acceptable to Administrative
Agent, in Administrative Agent’s Credit Judgment.

 

Eligible Customs Broker - a Customs
Broker which is reasonably acceptable to the Administrative Agent and with
which the Administrative Agent and a Borrower have entered into an Imported
Inventory Agreement.

 

Eligible Foreign Account - a Foreign
Account which is deemed by Administrative Agent to be an Eligible Account.  Without limiting the foregoing, no Foreign
Account shall be an Eligible Foreign Account unless it otherwise constitutes an
Eligible Account hereunder, and either:

 

(a) the
sale giving rise to such Account is backed by (i) an irrevocable letter of
credit issued or confirmed by a bank reasonably acceptable to Applicable Agent
and that is in form and substance reasonably acceptable to the Applicable Agent
and payable in the full amount of the Account in freely convertible (A) Dollars
at a place of payment within the United States or (B) Canadian Dollars at
a place of payment within Canada, and, if requested by the Applicable Agent,
such letter of credit, or amounts payable thereunder, is assigned to the
Applicable Agent (with such assignment acknowledged by the issuing or
confirming bank) or (ii) credit insurance in form and substance reasonably
acceptable to the Applicable Agent and such Applicable Agent is named as sole
loss payee with respect thereto, or

 

(b) such
Foreign Account, together with the aggregate amount of all other Foreign
Accounts outstanding which are deemed by Administrative Agent to be Eligible
Foreign Accounts (other than those included in clause (a) above), does not
exceed $10,000,000.

 

Eligible In-Transit
Inventory - on any date, In-Transit Inventory that meets all
of the criteria for Eligible Inventory on such date, provided  that
(i) such Inventory has been identified to the contract between the Vendor
and a Borrower and, under the terms of sale of such Inventory, title has passed
with respect to such Inventory from the Vendor to such Borrower on or before
such date; (ii) such Inventory is insured by such Borrower in accordance
with the requirements of Section 10.1.7 hereof;
(iii) the Vendor has no right on such date, under Applicable Law or
pursuant to any document relating to the sale of such Inventory, to reclaim,
divert the shipment of, reroute, repossess, stop delivery of or otherwise
assert any Lien rights or title retention with respect to such Inventory; (iv) such
Inventory is in the possession of a common carrier, which is not an Affiliate
of the Vendor and which has issued a tangible negotiable bill of lading to the
order of such Borrower (or, if otherwise required by the Administrative Agent
in its discretion, to the order of the Administrative Agent (if necessary to
obtain a first priority Lien in the related Inventory)); (v) such bill of
lading (or an original counterpart thereof in the case of Foreign In-Transit
Inventory) is in the possession, in the United States, of such Borrower,
Administrative Agent or an Eligible Customs Broker; (vi) the Vendor of
such Inventory is an Eligible Vendor (or, in the case of Foreign In-Transit
Inventory, the purchase price is to be paid pursuant to a documentary Letter of
Credit issued by Issuing Bank); and (vii) in the case of Foreign
In-Transit Inventory, the Inventory is to be received by an Eligible Customs
Broker and the terms of the applicable Imported Inventory Agreement with
respect to such Foreign In-Transit Inventory are adhered to by the parties
thereto.

 

Eligible Inventory - Inventory
which is owned by a Borrower and which Administrative Agent, in its Credit
Judgment, deems to be Eligible Inventory. 
Without limiting the foregoing, no Inventory shall be Eligible Inventory
unless it (a) is raw materials or finished goods or work in process that
is, in Administrative Agent’s Credit Judgment, readily marketable in its
current form, and not packaging or 

 

23

 

shipping materials, labels,
samples, display items, bags, replacement parts or manufacturing supplies; (b) is
not held on consignment unless such Inventory constitutes Permitted Consigned
Inventory, nor subject to any deposit, downpayment, guaranteed sale,
sale-or-return, sale-on-approval or repurchase arrangement; (c) is in
saleable condition and is not damaged, defective, shopworn or otherwise unfit
for sale; (d) is not slow-moving, obsolete or unmerchantable, and does not
constitute returned or repossessed goods; (e) meets all standards imposed
by any Governmental Authority; (f) conforms with the covenants and
representations herein; (g) is subject to the Applicable Agent’s duly
perfected, first priority Lien, and no other Lien except a Permitted Lien and
is not subject to any retention of title right of any unpaid suppliers to a
U.S. Borrower or Canadian Borrower unless an Availability Reserve with respect
thereto has been established by Administrative Agent; (h) is in such
Borrower’s possession and control within the continental United States, Canada
or Puerto Rico, is not in transit except between locations of Borrowers or to
the extent otherwise constituting Eligible In-Transit Inventory, and is not
consigned to any Person other than an Eligible Consignee; (i) is not
subject to any warehouse receipt or negotiable Document; (j) is not
subject to any License or other arrangement that restricts such Borrower’s or
the Applicable Agent’s right to dispose of such Inventory, unless the
Applicable Agent has received an appropriate Lien Waiver; (k) is not
located on leased premises or in the possession of a warehouseman or processor
unless the lessor, warehouseman or processor has delivered a Lien Waiver or an
appropriate Rent Reserve has been established; (l) is not the subject of a
store closing, liquidation, going-out-of business or similar sale; (m) does
not constitute Customer Contract Inventory or Toll Copper Inventory; (n) has
not been sold or leased and such Borrower has not received any deposit or down
payment in respect thereof in anticipation of a sale; and (o) is not the
subject of an Intellectual Property Claim.

 

Eligible Vendor - on any date,
a Vendor that (a) is the seller of Domestic In-Transit Inventory and the
applicable Borrower is not in breach of any of its material obligations to such
Vendor, (b) is a seller of Foreign In-Transit Inventory to a Borrower and
the purchase price for such Inventory is paid or to be paid pursuant to a
documentary Letter of Credit issued by Issuing Bank and such Borrower is not in
breach of any of its material obligations to such Vendor, or (c) is a
seller of Foreign In-Transit Inventory to a Borrower, and is not an Affiliate
of such Borrower, and such Borrower is not in breach of any of its material
obligations to such Vendor.

 

Enforcement Action - with respect
to any Borrower Group, any action taken or to be taken by an Applicable Agent,
during any period that an Event of Default exists, to enforce collection of the
Borrower Group Obligations or to realize upon the Collateral of such Borrower
Group (whether by judicial action, under power of sale, by self-help
repossession, by notification to Account Debtors, or by exercise of rights of
setoff or recoupment or otherwise).

 

Environmental Agreement - (a) the
Agreement Regarding Environmental Matters of even date herewith by U.S.
Borrowers in favor of the Administrative Agent and the applicable Credit
Parties or (b) the Agreement Regarding Environmental Matters of even date
herewith by Canadian Borrower in favor of Canadian Agent and the applicable
Credit Parties.

 

Environmental Laws - all
Applicable Laws (including all programs, permits and guidance promulgated by
regulatory agencies, to the extent having the force of law), relating to public
health (but excluding occupational safety and health, to the extent regulated
by OSHA or similar foreign Governmental Authority) or the protection or
pollution of the environment, including CERCLA, RCRA and CWA.

 

Environmental Reserve - on any date
with respect to any Borrower Group, reserves established by Applicable Agent in
its Credit Judgment on a property by property basis, in an aggregate amount not
to exceed the portion of the Fixed Asset Formula Amount allocated by Applicable
Agent to the value of 

 

24

 

the applicable Mortgaged
Real Estate to reflect environmental factors that may negatively impact the
value of such Mortgaged Real Estate for comparable commercial or industrial use
or may result in any liabilities, costs, damages or expenses arising out
of or resulting from noncompliance with any applicable Environmental Laws, including any cleanup,
remediation, removal, response, abatement, containment, closure, restoration,
treatment, investigation work or monitoring work, in each case to the extent
required by any applicable Environmental Laws, or reasonably necessary to make
full economic use of any of such Mortgaged Real Estate for comparable
commercial or industrial use, and including any attorneys’ fees, costs and
expenses incurred in enforcing this Agreement or the other Loan Documents or
collecting any sums due hereunder, provided, that,
any such reserves established may be adjusted by Applicable Agent, from time to
time, based on the results of environmental investigations with respect to the
applicable Mortgaged Real Estate conducted after the Closing Date, and any
other reports, analyses, studies, documents or other due diligence
information provided by Borrowers or otherwise obtained by Applicable Agent
with respect to such Mortgaged Real Estate.

 

Equipment - shall have
the meaning ascribed to such term in the U.S. Security Agreement or the
Canadian Security Agreement, as applicable.

 

Equity Interest - the interest
of any (a) shareholder in a corporation, (b) partner in a partnership
(whether general, limited, limited liability or joint venture), (c) member
in a limited liability company, or (d) other Person having any other form
of equity security or ownership interest.

 

Equity Investors - LS Corp, LS
Cable and their Affiliates.

 

ERISA - the Employee
Retirement Income Security Act of 1974 and all rules and regulations from
time to time promulgated thereunder.

 

Essex Delaware - Essex Group, Inc.,
a Delaware corporation.

 

Essex International - as defined
in the Recitals to this Agreement.

 

Essex Wire - Essex Wire
Corporation, a Michigan corporation.

 

Event of Default - as defined
in Section 11.1.

 

Excess Amount -  as defined in Section 5.13.3.

 

Exchange Rate - on any date,
(i) with respect to Canadian Dollars in relation to Dollars, the spot rate
as quoted by Bank of America at its noon spot rate at which Dollars are offered
on such date for Canadian Dollars, and (ii) with respect to Dollars in
relation to Canadian Dollars, the spot rate as quoted by Bank of America at its
noon spot rate at which Canadian Dollars are offered on such date for such
Dollars.

 

Excluded Tax - with respect
to any Agent, any Lender, any Issuing Bank or any other recipient of a payment
to be made by or on account of any Obligation, (a) taxes imposed on or
measured by its overall net income or capital (however denominated), including
franchise taxes, and (b) Taxes in respect of which additional amounts are
payable pursuant to Section 5.10
(or that would be so payable but for a Lender’s failure or inability to comply
with the certification requirements of Sections
5.10.3 or 5.10.4, as
applicable).

 

25

 

Existing Administrative
Agent - as defined in the Recitals to this Agreement.

 

Existing Borrowers - as defined in
the Recitals to this Agreement.

 

Existing Investments - (a) Investments,
debt, loans, advances, guaranties, capital contributions or other transactions
existing on the Closing Date and more particularly described on Schedule 1.1.2, and (b) to the
extent any such Investments or other transactions under clause (a) were
made in the form of loans or advances, loans and advances made after the
Closing Date in respect of any Refinancing Debt thereof that satisfies the
Refinancing Conditions.

 

Existing Lenders - as defined
in the Recitals to this Agreement.

 

Existing Letters of Credit - as defined
in Section 2.3.5.

 

Existing Loan Agreement - as defined
in the Recitals to this Agreement.

 

Existing Senior Notes - as defined
in the Recitals to this Agreement.

 

Extraordinary Expenses - without
duplication, all out-of-pocket costs, expenses or advances incurred by
Administrative Agent (or any Lender during a Default or an Event of Default) in
connection with the Loan Documents or transactions contemplated thereby, or during
the pendency of an Insolvency Proceeding of an Obligor, including those
relating to (a) any audit, inspection, repossession, storage, repair,
appraisal, insurance, manufacture, preparation or advertising for sale, sale,
collection, or other preservation of or realization upon any Collateral; (b) any
action, arbitration or other proceeding (whether instituted by or against any
Agent, any Lender, any Obligor, any representative of creditors of an Obligor
or any other Person) in any way relating to any Collateral (including the
validity, perfection, priority or avoidability of any Agent’s Liens with
respect to any Collateral), any Loan Documents, or the validity, allowance or
amount of any Obligations, including any lender liability or other Claims asserted
against any Agent or any Lender; (c) the exercise, protection or
enforcement of any rights or remedies of any Agent in, or the monitoring of,
any Insolvency Proceeding; (d) settlement or satisfaction of any taxes,
charges or Liens with respect to any Collateral; (e) any Enforcement
Action; (f) negotiation and documentation of any modification, waiver,
workout, restructuring or forbearance with respect to any Loan Documents or
Obligations; or (g) Protective Advances. 
Such costs, expenses and advances include transfer fees, taxes, storage
fees, insurance costs, permit fees, utility reservation and standby fees, legal
fees, appraisal fees, brokers’ fees and commissions, auctioneers’ fees and
commissions, accountants’ fees, environmental study fees, wages and salaries
paid to employees of any Obligor or independent contractors in liquidating any
Collateral, and travel expenses but excluding compensation paid to employees
(including inside legal counsel who are employees) of any Agent and any Lender.

 

Extraordinary Receipts - any tax
refunds, indemnity payments, pension reversions and certain insurance proceeds
received by a Borrower but which do not otherwise constitute proceeds of an
Asset Disposition or a Casualty Event, but excluding cash receipts in the Ordinary
Course of Business.

 

Federal Funds Rate - a
fluctuating interest rate per annum equal to the weighted average of the rates
on overnight federal funds transactions among members of the Federal Reserve
System arranged by federal funds brokers, as published for the applicable day
(or, if not a Business Day, for the preceding Business Day) by the Federal
Reserve Bank of New York, or if such rate is not so published, the average of
the quotations for such day on such transactions received by Administrative
Agent from three (3) federal funds brokers of nationally recognized
standing selected by Administrative Agent.

 

26

 

Federal Reserve Act – the Federal
Reserve Act (12 U.S.C. §§ 221-522).

 

Fee Letter - the amended
and restated fee letter agreement, dated on or about the Closing Date, among
Administrative Agent, Barclays Bank PLC, LS Corp. and LS Cable, as supplemented
to join Borrowers as parties thereto.

 

Femco - Femco Magnet
Wire Corp., an Indiana corporation.

 

Financial Covenant
Availability Condition - with respect to any date of determination,
the maintenance by Borrowers of Aggregate Availability of no less than the
greater of (i) 10% of the aggregate Revolver Commitments, or (ii) the
Fixed Asset Formula Amount.

 

Fiscal Quarter - each period
of three (3) consecutive calendar months, commencing on the first day of a
Fiscal Year.

 

Fiscal Year - the fiscal
year of Borrowers and their Subsidiaries for accounting and tax purposes,
ending on December 31 of each year.

 

Fixed Asset Formula Amount - the sum of (i) the
Canadian Fixed Asset Formula Amount plus (ii) the U.S. Fixed Asset
Formula Amount.

 

Floating Rate Loan - a U.S. Base
Rate Loan, a Canadian Prime Rate Loan or a Canadian Base Rate Loan.

 

FLSA - the Fair
Labor Standards Act of 1938.

 

Foreign Account - an Account
for which the Account Debtor is organized or has its principal offices or
assets outside the United States, Canada or Puerto Rico.

 

Foreign Exchange Services - any services
provided from time to time by Bank of America or its Affiliates or by any other
Lender or its Affiliates, to any Borrower or its Subsidiaries in connection
with foreign exchange and conversion services.

 

Foreign In-Transit Inventory - Inventory of
a Borrower that is in-transit from a Vendor of such Borrower from a location
outside the continental United States to such Borrower or a location designated
by such Borrower that is in the continental United States.

 

Foreign Lender - with respect
to any Borrower Group, a Lender to such Borrower Group that is organized under
the laws of a jurisdiction other than (i) Canada or a province or
territory thereof, in the case of the Borrower Group consisting of Canadian
Obligors; or (ii) a state of the United States or the District of Columbia,
in the case of the Borrower Group consisting of U.S. Obligors; provided,
however, that relative to the Borrower Group consisting of Canadian
Obligors, a Lender shall not be considered a Foreign Lender if it is a Canadian
Qualified Lender.

 

Foreign Subsidiary - a Subsidiary
that is not a Domestic Subsidiary.

 

Forward Revaluation Amount - an amount
equal to any positive difference between the standard cost at which Borrowers
purchase copper Inventory and the actual cost paid for forward copper
contracts.

 

27

 

Forward Revaluation Reserve - a reserve
equal to the amount, if any, by which the Value of Borrowers’ Inventory
consisting of copper has been reduced by the Forward Revaluation Amount.

 

Full Payment - with respect
to any Obligations, (a) the full and indefeasible cash payment thereof,
including any interest, fees and other charges accruing during an Insolvency
Proceeding (whether or not allowed in the proceeding); (b) if such
Obligations are LC Obligations or other Obligations described in clauses (ii) and
(iii) of the definition of “Cash Collateralize”, Cash Collateralization
thereof (or delivery of a standby letter of credit reasonably acceptable to
Agent in its discretion, in the amount of the required Cash Collateral); and (c) a
release of any Claims of Obligors against Agents, Lenders and Issuing Banks
arising on or before the payment date. 
No Loans shall be deemed to have been paid in full until all Commitments
related to such Loans have expired or been terminated.

 

GAAP - generally
accepted accounting principles in the United States of America or Canada  in effect from time
to time.

 

General Intangibles - shall have
the meaning ascribed to such term in the U.S. Security Agreement, or the  meaning ascribed to the term “intangible” in
Canadian Security Agreement, as applicable.

 

Governmental Approvals - all
authorizations, consents, approvals, licenses and exemptions of, registrations
and filings with, and required reports to, all Governmental Authorities.

 

Governmental Authority - any federal,
state, municipal, foreign or other governmental department, agency, commission,
board, bureau, court, tribunal, instrumentality, political subdivision, or
other entity or officer exercising executive, legislative, judicial, regulatory
or administrative functions for or pertaining to any government or court, in
each case whether associated with the United States, a state, district or
territory thereof, Canada, a province or territory thereof, or a foreign entity
or government.

 

Guarantor Payment - as defined
in Section 5.14.3.

 

Guarantors - each Person
who guarantees payment or performance of the whole or any part of the
Obligations, including (i) in the case of the U.S. Obligations, SEI,
Communications GP, SEHC, and Essex International as guarantors of such
Obligations, and (ii) in the case of the Canadian Obligations, in addition
to those guarantors identified in clause (i), the U.S. Borrowers as guarantors
of such Obligations.

 

Guaranty - each
guaranty agreement now or hereafter executed by a Guarantor in favor of the
Applicable Agent and the Applicable Lenders with respect to any of the
Obligations of a Borrower Group, and each other guaranty and guaranty
supplement delivered pursuant to Section 10.1.9.

 

Hedging Agreement - any
transaction that provides for an interest rate, foreign exchange, currency,
commodity, credit or equity swap, cap, floor, collar, option, forward, cross
right or obligation, or combination thereof, or any transaction of a similar
nature, including Interest Rate Contracts.

 

Holdings - as defined
in the Recitals to this Agreement.

 

Immaterial Subsidiary - a Subsidiary
that is not a Material Subsidiary.

 

Imported Inventory Agreement - an Imported
Inventory Agreement in form and substance reasonably satisfactory to the
Administrative Agent.

 

28

 

In-Transit
Inventory - Inventory of a Borrower that is either Domestic
In-Transit Inventory or Foreign In-Transit Inventory.

 

Included Investment - an
Investment, loan, advance, guarantee, capital contribution, sale or transfer of
Property, made directly or indirectly, during any fiscal period in any Person
by one or more Borrowers in connection with the development, construction, and
operation of the Borrowers’ business in compliance with Section 10.2.15 hereof (other than the
Existing Investments); provided  that if the Average Aggregate
Availability for the applicable Fiscal Quarter in which the Investment was made
is greater than or equal to $50,000,000, the amount of such Investment shall be
deemed to be $-0-.

 

Indemnitees - Agent
Indemnitees, Lender Indemnitees, Issuing Bank Indemnitees and Bank of America
Indemnitees.

 

Insolvency Proceeding - any case or
proceeding or proposal commenced by or against a Person under any state,
provincial, federal or foreign law for, or any agreement of such Person to, (a) the
entry of an order for relief under the Bankruptcy Code, or any other
insolvency, debtor relief, bankruptcy, receivership, debt adjustment law or
other similar law (whether state, provincial, federal or foreign), including
the Bankruptcy and Insolvency Act (Canada) and the Companies’ Creditors
Arrangement Act (Canada); (b) the appointment of a receiver, interim
receiver, monitor, sequestator, trustee, liquidator, administrator, conservator
or other custodian for such Person or any part of its Property; or (c) an
assignment or trust mortgage for the benefit of creditors.

 

Instrument - shall have
the meaning ascribed to such term in the U.S. Security Agreement or the
Canadian Security Agreement, as applicable.

 

Insurance Assignment - each
collateral assignment of insurance pursuant to which an Obligor assigns to the
Applicable Agent, for the benefit of Secured Parties, such Obligor’s rights
under business interruption or other insurance policies required to be
maintained under Section 10.1.7,
as security for the Obligations.

 

Intellectual Property - all
intellectual and similar Property of a Person, including inventions, designs,
patents, patent applications, copyrights, trademarks, service marks, trade
names, trade secrets, confidential or proprietary information, customer lists,
know-how, software and databases; all embodiments or fixations thereof and all
related documentation, registrations and franchises; all books and records
describing or used in connection with the foregoing; and all licenses or other
rights to use any of the foregoing.

 

Intellectual Property Claim - any material
claim or assertion (whether in writing, by suit or otherwise) that a Borrower’s
or its Subsidiary’s ownership, use, marketing, sale or distribution of any
Inventory, Equipment, Intellectual Property or other Property violates another
Person’s Intellectual Property.

 

Interest Act - the Interest Act (Canada).

 

Interest Period - as defined
in Section 3.1.3.

 

Interest Period Loan - a LIBOR Loan
or a Canadian BA Rate Loan.

 

29

 

Interest Rate Contract - any interest
rate swap, collar or cap agreement, or other agreement or arrangement by any
Borrower or its Subsidiaries with a Lender or an Affiliate of a Lender that is
designed to protect against fluctuations in interest rates.

 

Internal Revenue Code - the Internal
Revenue Code of 1986.

 

Inventory - shall have
the meaning ascribed to such term in the U.S. Security Agreement or the
Canadian Security Agreement, as applicable.

 

Inventory Formula Amount - on any date
of determination thereof for all Borrower Groups, the lesser of (a) $180,000,000;
or (b) the lesser of 65% of the Value of Eligible Inventory of the
Borrowers, or 85% of the NOLV Percentage of the Value of Eligible Inventory of
the Borrowers.

 

Inventory Reserve - on any date
with respect to any Borrower Group, reserves established by Applicable Agent in
its Credit Judgment to reflect factors that may negatively impact the Value of
Inventory, including change in salability, obsolescence, seasonality, theft,
shrinkage, imbalance, change in composition or mix, markdowns and vendor
chargebacks.

 

Investment - any
acquisition of all or substantially all assets of a Person; any acquisition of
record or beneficial ownership of any Equity Interests of a Person; or any
advance or capital contribution to or other investment in a Person.

 

Investment Company Act - the
Investment Company Act (15 U.S.C. §§ 80a-1 - 80a-64).

 

Investor Group - as defined
in the Recitals to this Agreement.

 

IP Licensing - IP Licensing
LLC, a Delaware limited liability company.

 

IRS - the United
States Internal Revenue Service.

 

Issuing Bank - Bank of
America or an Affiliate of Bank of America, including Bank of America, acting
through its Canada branch.

 

Issuing Bank Indemnitees - each Issuing
Bank and its officers, directors, employees, Affiliates, agents and attorneys.

 

ITA - the Income Tax Act (Canada).

 

JV Europe - as defined
in Schedule 1.1.2.

 

LC Application - an
application by Borrower Agent to Issuing Bank for the issuance of a Letter of
Credit, in form and substance satisfactory to Issuing Bank.

 

LC Borrowers - shall have
the meaning ascribed to it in Section 2.3.1(b).

 

LC Conditions - the
following conditions, the satisfaction of each of which is required before an
Issuing Bank shall be obligated to issue a Letter of Credit for any Borrower
within a Borrower Group: (a) each of the conditions set forth in Section 6.1 (with respect to Letters
of Credit to be issued on the Closing Date) or Section 6.2 (with respect to Letters of Credit to be
issued after the Closing Date) has been and continues to be satisfied,
including the absence of any Default or Event of Default with respect 

 

30

 

to such Borrower Group; (b) after
giving effect to the issuance of the requested Letter of Credit and all other
unissued Letters of Credit for which an LC Application has been submitted by a
Borrower within such Borrower Group, the LC Obligations would not exceed an
amount equal to the Dollar Equivalent of the Letter of Credit Subline, the
Total Revolver Exposure would not exceed the Maximum Revolver Facility Amount,
the U.S. Revolver Exposure would not exceed the U.S. Borrowing Base, and the
Canadian Revolver Exposure would not exceed the Canadian Borrowing Base; (c) such
Letter of Credit has an expiration date that is (i) no more than three
hundred sixty-five (365) days from the date of issuance in the case of standby
Letters of Credit, and (ii) no more than one hundred fifty (150) days from
the date of issuance in the case of documentary Letters of Credit and, in
either event, such expiration date is at least ten (10) Business Days
prior to the Revolver Termination Date unless such Borrower Group shall Cash
Collateralize such Letter of Credit or as otherwise agreed by Applicable Agent
in its discretion; and (d) the form of the proposed Letter of Credit is
satisfactory to Applicable Agent and the Applicable Issuing Bank in their
reasonable discretion, provides for sight drafts only (as opposed to time
drafts) and does not contain any language that automatically increases the
amount available to be drawn under the Letter of Credit.

 

LC Documents - all
documents, instruments and agreements (including LC Requests and LC
Applications) delivered by Borrowers within a Borrower Group or any other
Person to the Applicable Issuing Bank or the Applicable Agent in connection
with issuance, amendment or renewal of, or payment under, any Letter of Credit.

 

LC Obligations - on any date,
the sum of the U.S. LC Obligations and the Canadian LC Obligations.

 

LC Request - a request
for issuance of a Letter of Credit, to be provided by Borrower Agent to the
Applicable Issuing Bank, substantially in the form of Exhibit D and reasonably
satisfactory to the Applicable Agent and the Applicable Issuing Bank.

 

LC Reserve - a reserve
with respect to U.S. Borrowers in the amount of the U.S. LC Obligations
(excluding any portion thereof that U.S. Borrowers shall Cash Collateralize),
and a reserve with respect to Canadian Borrower in the amount of the Canadian
LC Obligations (excluding any portion thereof that Canadian Borrower shall Cash
Collateralize).

 

Lender Counterparty - Bank of
America, an Agent or a Lender, or any branch or affiliate of Bank of America,
an Agent or a Lender, party to an agreement evidencing an obligation under a
Hedging Agreement included within the Obligations.

 

Lender Indemnitees - Lenders and
their officers, directors, employees, Affiliates, agents and attorneys.

 

Lenders - shall have
the meaning given to it in the preamble to this Agreement and shall include
U.S. Lenders, Canadian Lenders, and Applicable Swingline Lenders, and their
respective successors and permitted assigns, and any other Person who hereafter
becomes a “Lender” pursuant to an Assignment and Acceptance.

 

Lending Office - the office
designated as such by the applicable Lender at the time it becomes party to
this Agreement or thereafter by notice to Administrative Agent and Borrower
Agent.

 

Letter of Credit - a U.S.
Letter of Credit or a Canadian Letter of Credit.

 

31

 

Letter of Credit Subline - the Dollar
Equivalent of $25,000,000.

 

LIBOR Loan - a Revolver
Loan that bears interest based on Adjusted LIBOR.

 

License - any material
license or agreement under which an Obligor is authorized to use Intellectual
Property in connection with any manufacture, marketing, distribution or
disposition of any Eligible Inventory, any use of Property or any other conduct
of its business (excluding, in any event, any “off the shelf” Intellectual
Property generally available to the public).

 

Licensor - any Person
from whom an Obligor obtains a License.

 

Lien - any Person’s
interest in Property securing an obligation owed to, or a claim by, such
Person, whether such interest is based on common law, statute or contract,
including liens, security interests, pledges, hypothecations, statutory trusts,
reservations, exceptions, encroachments, easements, rights-of-way, covenants,
conditions, restrictions, leases, and other title exceptions and encumbrances
affecting Property but excluding the interest of the owner of such Property.

 

Lien Waiver - an
agreement, in form and substance reasonably satisfactory to Administrative
Agent, by which (a) for any material Collateral located on leased
premises, the lessor waives or subordinates any Lien it may have on the
Collateral, and agrees to permit the Applicable Agent to enter upon the
premises and remove the Collateral or to use the premises to store or dispose
of the Collateral; (b) for any material Collateral held by a warehouseman
or processor, such Person waives or subordinates any Lien it may have on the
Collateral, and permits the Applicable Agent to enter upon such premises and
remove such Inventory or to use the premises to store or dispose of the
Collateral; and (c) for any material Collateral held by a repairman,
mechanic or bailee, such Person acknowledges the Applicable Agent’s Lien,
waives or subordinates any Lien it may have on the Collateral, and permits the
Applicable Agent to enter upon such premises and remove such Collateral or to
use the premises to store or dispose of the Inventory.

 

Loan - a Revolver
Loan and each U.S. Base Rate Loan, LIBOR Loan, Canadian Base Rate Loan,
Canadian Prime Rate Loan or Canadian BA Rate Loan comprising such loan.

 

Loan Account - the loan
account established by each Lender on its books pursuant to Section 5.9.

 

Loan Documents - this
Agreement, Other Agreements and Security Documents.

 

Loan Year - each
calendar year commencing on the Closing Date and each anniversary of the
Closing Date.

 

LS Cable - as defined
in the Recitals to this Agreement.

 

LS Corp - as defined
in the Recitals to this Agreement.

 

Magnet Wire GP - Superior
China Magnet Wire GP, Inc., a Texas corporation.

 

Margin Stock - as defined
in Regulation U of the Board of Governors.

 

Material Adverse Effect - the effect
of any event or circumstance that after the Closing Date, taken alone or in
conjunction with other events or circumstances, (a) has or could be reasonably
expected to have a material adverse effect on the business, operations,
Properties or condition (financial or 

 

32

 

otherwise) of any Borrower
Group, taken as a whole, on the value of the Collateral taken as a whole, on
the enforceability of any Loan Documents, or on the validity or priority of the
Applicable Agent’s Liens on the Collateral taken as a whole; (b) materially
impairs the ability of any Borrower Group, taken as a whole, to perform any
material obligations under the Loan Documents, including repayment of any
Obligations; or (c) otherwise materially impairs the ability of any Agent
or any Lender to enforce or collect any Obligations or to realize upon any
material Collateral.

 

Material Contract - any
agreement or arrangement to which a Borrower or any of its Subsidiaries is
party (other than the Loan Documents) for which breach, termination,
nonperformance or failure to renew could reasonably be expected to have a
Material Adverse Effect.

 

Material Subsidiary - at any date
of determination, (a) each Subsidiary of SEI (other than the Borrowers) (i) the
total assets of which as of the last day of the most recent Test Period were
equal to or greater than 10.0% of Total Assets on such date or (ii) the
gross revenues of which for such Test Period were equal to or greater than
10.0% of the consolidated gross revenues of SEI and its Subsidiaries for such
period, in the case of each of clause (i) and (ii), calculated on a pro
forma basis and determined in accordance with GAAP), and (b) each other
Subsidiary of a Borrower that is the subject of an Event of Default under Section 11.1(i) or Section 11.1(j) and that, when
such Subsidiary’s total assets or gross revenues are aggregated with the total
assets or gross revenues, as applicable, of each other Subsidiary that is the
subject of an Event of Default under Section 11.1(i) or
Section 11.1(j), would
constitute a Material Subsidiary under clause (b) above.

 

Maximum Fixed Asset Amount - the sum of (i) the
Canadian Maximum Fixed Asset Amount  plus
(ii) the U.S. Maximum Fixed Asset Amount.

 

Maximum Revolver Facility
Amount - on any date, the sum of the U.S. Revolver Facility Amount and the
Canadian Revolver Facility Amount.

 

Merger - as defined
in the Recitals to this Agreement.

 

Merger Agreement - as defined
in the Recitals to this Agreement.

 

Merger and Related
Transactions - all transactions and obligations contemplated by
the Merger Agreement, including the closing of the Merger, the Revolving Credit
Facility and all other transactions and obligations more particularly described
in the Recitals to this Agreement.

 

Merger SPC - as defined
in the Recitals to this Agreement.

 

Merger Transaction Costs - as defined
in the definition of EBITDA.

 

Money Laundering Control Act - the Money
Laundering Control Act of 1986 (18 U.S.C. §§ 1956-1957).

 

Moody’s - Moody’s
Investors Services, Inc.

 

Mortgage - those
certain mortgages, collateral mortgages, deeds of trust or deeds to secure debt
delivered by a Borrower to any Agent, for the benefit of Secured Parties, on or
prior to the Closing Date which grant or granted Liens upon the Real Estate
owned by such Borrower, as security for the Obligations located in (i) Columbia
City, Ft. Wayne, Franklin, Kendallville and Vincennes, Indiana, (ii) 

 

33

 

Hoisington, Kansas, (iii) Tarboro,
North Carolina, (iv) Chester, South Carolina, and (v) Ontario,
Canada, and all amendments thereto.

 

Mortgaged Real Estate - Real Estate
subject to a Mortgage.

 

Multiemployer Plan - as defined
in Section 4001(a)(3) of ERISA, which, for greater certainty, does
not include any Canadian Pension Plan.

 

Negative Covenant
Availability Condition - with respect to any date of determination,
the maintenance by Borrowers of Aggregate Availability of no less than the
greater of (i) 15% of the aggregate Revolver Commitments, or (ii) the
Fixed Asset Formula Amount
plus $25,000,000.

 

Net Proceeds - with respect
to an Asset Disposition, a Casualty Event or any Extraordinary Receipt,
proceeds (including, when received, any deferred or escrowed payments) received
by a Borrower or its Subsidiaries in cash from such disposition, Casualty Event
or Extraordinary Receipt net of (a) the out-of-pocket fees and expenses
(including attorneys’ fees, investment banking fees, survey costs, title
insurance premiums, and related search and recording charges, transfer taxes,
deed or mortgage recording taxes, other customary expenses and brokerage,
consultant and other customary fees) actually incurred by any Obligor in
connection therewith; (b) amounts applied to repayment of Debt secured by
a Permitted Lien senior to any Agent’s Liens on Collateral sold; (c) all
Taxes to the extent payable as a consequence of such Asset Disposition, Casualty
Event or Extraordinary Receipts, including transfer or similar taxes; and (d) reserves
for adjustments in respect of (x) the sale price of such asset established
in accordance with GAAP and (y) any liabilities associated with such asset
and retained by any Obligor after such sale or other disposition thereof,
including pension and other post-employment benefit liabilities and liabilities
related to environmental matters or against any indemnification obligations
associated with such transaction; provided  that upon the
expiration of not more than one hundred and twenty (120) days after the
relevant Asset Disposition, any remaining reserve balance shall be remitted to
Administrative Agent for prepayment of the Obligations subject to Section 5.3, and (e) in the case
of any Asset Disposition by joint venture or other non-wholly owned Subsidiary
of an Obligor, the portion of the net proceeds thereof which is not
attributable to the applicable Obligor’s ownership percentage of such
Subsidiary.

 

New Canadian Lender - as defined
in Section 2.1.9(d).

 

New U.S. Lender - as defined
in Section 2.1.9(d).

 

NOLV Percentage - the net
orderly liquidation value of Inventory, expressed as a percentage, expected to
be realized at an orderly, negotiated sale held within a reasonable period of
time, net of all related commissions, fees and expenses, as determined from the
most recent appraisal of Borrowers’ Inventory performed by an appraiser and on
terms reasonably satisfactory to Administrative Agent.

 

Notes - each
Revolver Note or other promissory note executed by a Borrower to evidence any
Obligations.

 

Notice of Borrowing - a Notice of
Borrowing to be provided by Borrower Agent to request the funding of a
Borrowing of Revolver Loans, in form satisfactory to Administrative Agent.

 

Notice of
Conversion/Continuation - a Notice of Conversion/Continuation to be
provided by Borrower Agent to request a conversion or continuation of any Loans
as LIBOR Loans or Canadian BA Rate Loans (as applicable), in form satisfactory
to Administrative Agent.

 

34

 

Obligations - all (a) principal
of and premium, if any, on the Loans, (b) LC Obligations and other
obligations of Obligors with respect to Letters of Credit, (c) interest,
expenses, fees and other sums payable by Obligors under Loan Documents, (d) obligations
of Obligors under any indemnity for Claims, (e) Extraordinary Expenses, (f) Bank
Product Debt, and (g) other Debts, obligations and liabilities of any kind
owing by Obligors pursuant to the Loan Documents, whether now existing or
hereafter arising, whether evidenced by a note or other writing, whether
allowed in any Insolvency Proceeding, whether arising from an extension of
credit, issuance of a letter of credit, acceptance, loan, guaranty,
indemnification or otherwise, and whether direct or indirect, absolute or
contingent, due or to become due, primary or secondary, or joint or several.

 

Obligor - a U.S.
Obligor or Canadian Obligor.

 

Ordinary Course of Business - the ordinary
course of business of any Borrower or its Subsidiaries, undertaken in good
faith (and not for the purpose of evading any provision of a Loan Document).

 

Organic Documents - with respect
to any Person, its charter, certificate or articles of incorporation, bylaws,
articles of organization, limited liability agreement, operating agreement,
members agreement, shareholders agreement, partnership agreement, certificate
of partnership, certificate of formation, memorandum of association, voting
trust agreement, or similar agreement or instrument governing the formation or
operation of such Person.

 

OSHA - the
Occupational Safety and Hazard Act of 1970.

 

Other Agreement - each Note;
LC Document; Fee Letter; Lien Waiver; Related Real Estate Document; Borrowing
Base Certificate; Compliance Certificate; the Environmental Agreement; or other
document, instrument or agreement (other than this Agreement or a Security
Document) now or hereafter delivered by an Obligor to an Agent or a Lender in
connection with this Agreement or any transactions relating hereto.

 

Overadvance - as defined
in Section 2.1.7.

 

Overadvance Loan - a U.S. Base
Rate Revolver Loan or Canadian Prime Rate Loan, as applicable, made when an
Overadvance exists or is caused by the funding thereof.

 

Participant - as defined
in Section 13.2.

 

Patent Security Agreement - each patent
security agreement pursuant to which an Obligor grants to the Applicable Agent,
for the benefit of Secured Parties, a Lien on such Obligor’s interests in
patents and patent applications, as security for the Obligations.

 

PATRIOT Act - the Uniting
and Strengthening America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism Act of 2001, Pub. L. No. 107-56, 115 Stat. 272
(2001).

 

Payment Item - each check,
draft or other item of payment payable to an Obligor, including those
constituting proceeds of any Collateral.

 

Pension Benefit Guaranty
Corporation - the Pension Benefit Guaranty Corporation, the
federal corporation created under ERISA, and any successor thereto.

 

35

 

Pension Event - means (a) the
filing of a notice of intent to terminate (in whole or in part), or the
commencement of proceedings by any Governmental Authority or administrator
appointed by a Governmental Authority to terminate (in whole or in part) a
Canadian Pension Plan, (b) the occurrence of an event or condition which
might reasonably be expected to constitute grounds for the termination (in
whole or in part) of, or the appointment by a Governmental Authority of a third
party to administer, any Canadian Pension Plan, or (c) the imposition of
any liability by any Governmental Authority in respect of a Canadian Pension
Plan, other than for premiums or contributions due but not delinquent, upon any
Borrower, any Guarantor or any of their Subsidiaries.

 

Permitted Acquisition - any
acquisition by a Borrower or any of its Subsidiaries of the assets or Equity
Interests of a Person located in the United States or Canada in which each of
the following conditions is satisfied: (i) no Event of Default exists; (ii) the
business in which the Person that is the subject of such acquisition is engaged
is a Similar Business; (iii) the acquisition is not hostile or contested; (iv) in
connection with such acquisition there will be no Liens on any of such Borrower’s
or such Subsidiary’s assets after the acquisition other than Permitted Liens; (v) any
purchase price amounts payable with respect to earn-outs, notes payable to the
sellers, covenants not to compete, consulting contracts or other affiliated
contracts are and will remain subordinate to the Full Payment of the
Obligations on terms satisfactory to Administrative Agent; (vi) Borrowers
shall have delivered to Administrative Agent, not less than three (3) Business
Days prior to the proposed closing date of any such acquisition, written
evidence of the pro forma satisfaction of the other conditions set forth in
this definition after giving effect to such acquisition; and (vii) to the
extent a Subsidiary is acquired or formed in connection with any such
acquisition, such Subsidiary shall constitute a Permitted Subsidiary
hereunder.  Furthermore, unless Borrowers
are in compliance with the Negative Covenant Availability Condition, at the
time of and after giving effect to the acquisition, the aggregate amount of
acquisitions made during any Fiscal Year may not exceed a total consideration
of $25,000,000 and Borrowers shall (a) be required to be in
compliance with the Consolidated Fixed Charge Coverage Ratio covenant set forth
in Section 10.3 (regardless
of whether the Aggregate Availability of Borrowers is then less than the
Financial Covenant Availability Condition), after giving effect to the
acquisition, (b) have Aggregate Availability of at least 10% of the
Revolving Credit Facility (excluding the Fixed Asset Formula Amount on the date
thereof), after giving effect to the acquisition, (c) have provided the
Administrative Agent, by a date sufficiently in advance of the closing date of
such acquisition to allow Administrative Agent the reasonable opportunity for
review, the executed copies of the final purchase documents, including all
exhibits and schedules thereto, among the parties to such acquisition, and (d) Administrative
Agent shall have found the terms thereof reasonably acceptable.  Notwithstanding any provision of this
Agreement to the contrary, in connection with any merger (or other distribution
of the assets) of a Subsidiary that is not an Obligor with and into (or to) an
Obligor, or any acquisition by an Obligor, whether by purchase of stock,
merger, or purchase of assets, and whether in a single transaction or series of
related transactions, Agents shall have the right to determine in their Credit
Judgment (based on standards and methodologies similar to those applied to
Borrowers’ then existing Accounts and Inventory to the extent that the Accounts
and Inventory so acquired are similar to such then existing Accounts and
Inventory), whether any Accounts or Inventory so acquired shall be included in
the Borrowing Base (subject to the other applicable provisions of this
Agreement).  In connection with such
determination, Agents may obtain, at Borrowers’ expense, such appraisals,
commercial finance exams and other assessments of such Accounts, Inventory, and
other Collateral as Agents may deem desirable.

 

Permitted Asset Disposition - an Asset
Disposition that is (a) a sale of Inventory in the Ordinary Course of
Business; (b) so long as no Event of Default then exists (or as otherwise
consented to by Administrative Agent), a disposition of Equipment or Real
Estate included in the calculation of the Fixed Asset Formula Amount, the
proceeds of which are applied to reduce the Canadian Fixed Asset Formula Amount
or the U.S. Fixed Asset Formula Amount, as applicable, pursuant to Section 5.3(a); (c) a 

 

36

 

disposition of Inventory or
Equipment that is substantially worn, damaged, obsolete, unmerchantable or
otherwise unsalable or, in the reasonable business judgment of an Obligor, no
longer useful or necessary in the Ordinary Course of Business; (d) so long
as no Event of Default then exists (or as otherwise consented to by
Administrative Agent), termination of a lease of real or personal Property that
is not necessary for the Ordinary Course of Business, could not reasonably be
expected to have a Material Adverse Effect and does not result from an Obligor’s
default; (e) a transfer of Property to a Borrower or a Guarantor by a
Subsidiary thereof, or by a Borrower or a Guarantor to a Guarantor within the
same Borrower Group, or by a Borrower to another Borrower (provided  that
if Property that is included in the Borrowing Base of a Borrower Group is
transferred to another Borrower outside of such Borrower Group, such Property
shall cease to be included in the transferring Borrower Group’s Borrowing
Base); (f) non-exclusive licenses of technology and other Intellectual
Property; (g) Consigned Inventory; (h) Permitted Investments; (i) transfers
of Equity Interests of any Subsidiary that is not a Guarantor so long as such
Equity Interests are not otherwise pledged to Administrative Agent; (j) sales
or forgiveness of Accounts in the Ordinary Course of Business or in connection
with the collection or compromise thereof; (k) leases, subleases, licenses
and sublicenses of real or personal property entered into by Borrowers and
their respective Subsidiaries in the Ordinary Course of Business at arm’s
length and on market terms; (l) sales of non-core assets acquired in
connection with Permitted Acquisitions which are not used in the business of
the Obligors or their Subsidiaries in an aggregate amount not to exceed
$5,000,000 during any Fiscal Year; (l) so long as no Event of Default then
exists (or as otherwise consented to by Administrative Agent), sales of other
assets in an aggregate amount not to exceed $5,000,000 during any Fiscal Year; (m) so
long as no Event of Default then exists (or as otherwise consented to by
Administrative Agent), any other disposition of Equipment in an aggregate
amount during any Fiscal Year not to exceed (I) $5,000,000 in the case of
Equipment not included in the calculation of the Fixed Asset Formula Amount and
(II) $1,000,000 in the case of Equipment that is included in the
calculation of the Fixed Asset Formula Amount; or (n) otherwise approved
in writing by the Applicable Agent and Required Borrower Group Lenders.

 

Permitted Consigned
Inventory - Consigned Inventory, (i) the Value of which
shall not exceed $60,000,000 in the aggregate at any time, and (ii) for
which each of the Consigned Inventory Conditions is satisfied.

 

Permitted Contingent
Obligations - Contingent Obligations (a) arising from
endorsements of Payment Items for collection or deposit in the Ordinary Course
of Business; (b) arising from Hedging Agreements permitted hereunder; (c) existing
on the Closing Date, and any extension or renewal thereof that does not
increase the amount of such Contingent Obligation when extended or renewed; (d) incurred
in the Ordinary Course of Business with respect to surety, appeal or
performance bonds, or other similar obligations; (e) arising from
customary indemnification obligations in favor of purchasers (or sellers, as
applicable) in connection with Permitted Asset Dispositions and Permitted
Acquisitions; (f) arising under the Loan Documents; (g) incurred to
support Debt permitted pursuant to Section 10.2.1;
(h) arising under indemnity agreements to title insurers to issue to
Administrative Agent title insurance policies; (i) arising in connection
with guaranties of performance by an Obligor on behalf of JV Europe, SE Holding
or their subsidiaries which do not constitute guaranties of Debt; or (j) in
an aggregate amount of $25,000,000 or less at any time.

 

Permitted Investments -
collectively, any of the following Investments by a Borrower or any of its
Subsidiaries:

 

(a) the
Existing Investments;

 

(b) Investments
meeting the requirements of Included Investments;

 

37

 

(c) Cash
Equivalents that are subject to Administrative Agent’s Lien and control,
pursuant to documentation in form and substance satisfactory to Administrative
Agent;

 

(d) loans
and advances permitted under Section 10.2.7;

 

(e) acquisitions
of fixed assets to be used in the Ordinary Course of Business of such Borrower
or any of its Subsidiaries so long as the acquisition costs thereof constitute
Capital Expenditures permitted hereunder;

 

(f) acquisitions
of goods held for sale or lease or to be used in the manufacture of goods or
the provision of services by such Borrower or any of its Subsidiaries in the
Ordinary Course of Business (including inventory);

 

(g) acquisitions
of current assets arising from the sale or lease of goods or the rendition of
services in the Ordinary Course of Business of such Borrower or any of its
Subsidiaries;

 

(h) Investments
in any Securities received in satisfaction or partial satisfaction thereof from
financially troubled Account Debtors;

 

(i) deposits,
prepayments and other credits to suppliers, lessors and landlords made in the
Ordinary Course of Business;

 

(j) Investments,
loans, advances, guarantees, capital contributions, sales or transfers of
Property, made directly or indirectly, (i) by one or more U.S. Obligors or
their Subsidiaries in Canadian Borrower and its Subsidiaries not to exceed
$15,000,000 at any time outstanding, and (ii) by Canadian Borrower or its
Subsidiaries in a U.S. Obligor or its Subsidiaries not to exceed $15,000,000 at
any time outstanding;

 

(k) so
long as Borrowers (i) are in compliance with the Consolidated Fixed Charge
Coverage Ratio covenant set forth in Section 10.3
(regardless of whether the Aggregate Availability of Borrowers is then less
than the Financial Covenant Availability Condition)  and (ii) have
Aggregate Availability of at least 10% of the Revolving Credit Facility
(excluding the Fixed Asset Formula Amount on the date thereof), in each case at
the time of such Investment and after giving effect thereto,  any Investments,
loans, advances, guarantees, capital contributions, sales or transfers of Property
(in each case, other than the Existing Investments), made directly or
indirectly, without duplication, by any Obligor or its Subsidiary; provided
that any such Investments, loans, advances, guarantees, capital
contributions, sales or transfers of Property made pursuant to this clause (k) shall
not exceed an aggregate amount of $10,000,000 during any Fiscal Year; provided
further, that any such Investments, loans, advances, guarantees,
capital contributions, sales or transfers of Property made pursuant to this
clause (k) at a time when Borrowers satisfied the Negative Covenant
Availability Condition and no Event of Default existed shall not be counted
toward such limit;

 

(l) 
other Investments (in each case, other than the Existing Investments), not to exceed
an aggregate amount of $10,000,000 during any Fiscal Year, provided that the
sum of (i) the amount of such Investments plus (ii) the Capital
Expenditures made to-date during such Fiscal Year do not exceed the limitation
on Capital Expenditures set forth in Section 10.2.3;
and

 

38

 

(m) Investments
made by an Obligor or its Subsidiaries to the extent financed with the proceeds
received by such Obligor or any of its Subsidiaries from a prior or
substantially simultaneous Investment made pursuant to clauses (j), (k) and
(l).

 

Permitted Lien - as defined
in Section 10.2.2.

 

Permitted Purchase Money
Debt - Purchase Money Debt of Borrowers and their Subsidiaries that is
unsecured or secured only by a Purchase Money Lien, as long as the aggregate
amount does not exceed $25,000,000 at any time and its incurrence does not
violate Section 10.2.3.

 

Permitted Subsidiary - a Subsidiary
of a Borrower or Obligor that is in compliance with each of the Permitted
Subsidiary Conditions.

 

Permitted Subsidiary
Conditions - the following conditions, the satisfaction of
each of which is required before a Subsidiary formed or acquired after the
Closing Date shall constitute a Permitted Subsidiary under this Agreement:  (i) the Subsidiary is engaged in a
Similar Business; (ii) there are no Liens on any of such Subsidiary’s
assets other than Permitted Liens; and (iii) Borrowers, Obligors and such
Subsidiary have complied with the provisions of Section 10.1.9.

 

Person - any
individual, corporation, limited liability company, unlimited liability
company, partnership, joint venture, joint stock company, land trust, business
trust, unincorporated organization, Governmental Authority or other entity.

 

Pledge Agreement - each pledge
agreement pursuant to which an Obligor pledges to the Applicable Agent, and
grants a security interest to the Applicable Agent for the benefit of Secured
Parties, in and to the Equity Interests of each of the Subsidiaries of such
Obligor, as security for the Obligations.

 

Plan - an employee
pension benefit plan that is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code
and that is either (a) maintained by a Borrower or its Subsidiaries for
employees or (b) maintained pursuant to a collective bargaining agreement,
or other arrangement under which more than one employer makes contributions and
to which a Borrower or its Subsidiaries is making or accruing an obligation to
make contributions or has within the preceding five years made or accrued such
contributions, and includes a Canadian Pension Plan, as applicable.

 

PPSA - the Personal
Property Security Act in force in the Province of Ontario, provided  that
if by reason of mandatory provisions of Applicable Law the validity,
enforceability, enforcement, perfection and effect of perfection and
non-perfection of a security interest or other applicable Lien with respect to
any Obligor or Canadian Collateral is governed by other personal property
security laws in force in Canada, the term “PPSA” means such other
personal property security laws, including the Civil Code of Quebec.

 

Pro Forma Financial
Statements - as defined in Section 6.1(i).

 

Pro Rata - when used
with reference to a Lender’s share on any date of the total Borrower Group
Commitments to a Borrower Group, its interest in the Collateral of the members
of such Borrower Group, its participating interest in LC Obligations of and
Swingline Loans to the members of such Borrower Group, its share of payments
made by the members of such Borrower Group with respect to Borrower Group
Obligations, its share of Collateral proceeds of such Borrower Group, and its
obligation to pay or reimburse any Agent for Extraordinary Expenses owed by
such Borrower Group or to indemnify any 

 

39

 

Indemnitees for Claims
relating to such Borrower Group, a percentage (expressed as a decimal, rounded
to the ninth decimal place) derived by dividing the amount of the Borrower
Group Commitment of such Lender to such Borrower Group on such date by the aggregate
amount of the Borrower Group Commitments of all Lenders to such Borrower Group
on such date (whether or not any of such Borrower Group Commitments have been
terminated on or before such date).

 

Proceeds of Crime Act - the Proceeds
of Crime (Money Laundering) and Terrorist Financing Act (Canada) (or any
successor statute), as amended from time to time, and includes all regulations
thereunder.

 

Properly Contested - with respect
to any obligation of an Obligor, (a) the obligation is subject to a bona
fide dispute regarding amount or the Obligor’s liability to pay; (b) the
obligation is being properly contested in good faith by appropriate proceedings
promptly instituted and diligently pursued; (c) appropriate reserves have
been established in accordance with GAAP; (d) non-payment could not have a
Material Adverse Effect, nor result in forfeiture or sale of any material
assets of the Obligor; (e) no Lien is imposed on assets of the Obligor
while such dispute is being properly contested unless such Lien is at all times
junior and subordinate in priority to Liens in favor of Agents (except only
with respect to property taxes that have priority as a matter of applicable
state law and enforcement of such Lien is stayed during the period prior to the
final resolution or disposition of such dispute); (f) if the obligation
results from entry of a judgment or other order, such judgment or order is
stayed pending appeal or other judicial review; and (g) if such contest is
abandoned, settled or determined adversely (in whole or in part) to such
Obligor, such Obligor forthwith pays such Debt and all penalties, interest and
other amounts due in connection therewith.

 

Property - any interest
in any kind of property or asset, whether real / immovable, personal / movable
or mixed, or tangible or intangible.

 

Protective Advances - as defined
in Section 2.1.8.

 

Purchase Money Debt - (a) Debt
(other than the Obligations) for payment of any of the purchase price of fixed
assets; (b) Debt (other than the Obligations) incurred within forty-five
(45) days before or after acquisition of any fixed assets, for the purpose of
financing any of the purchase price thereof; and  (c) any renewals, extensions or
refinancings (but not increases in principal amounts) thereof.

 

Purchase Money Lien - a Lien that
secures Purchase Money Debt, encumbering only the fixed assets acquired with
such Debt and constituting a Capital Lease or a purchase money security
interest under the UCC, the PPSA or the Civil Code of Quebec, or constituting a
vendor’s hypothec under the Civil Code of Quebec.

 

RCRA - the Resource
Conservation and Recovery Act (42 U.S.C. §§ 6901-6992k).

 

Real Estate - all right,
title and interest (whether as owner, lessor or lessee) in any real Property or
any buildings, structures, parking areas or other improvements thereon.

 

Refinancing Conditions - the
following conditions for Refinancing Debt: 
(a) it is in an aggregate principal amount (or accreted value, if
applicable) that does not exceed the principal amount of the Debt being modified,
refunded, extended, renewed or refinanced, plus other reasonable amounts paid,
and fees and expenses reasonably incurred in connection therewith; (b) it
has a final maturity not sooner than and weighted average life not less than
that of the Debt being extended, renewed or refinanced; (c) it bears
interest at a rate that does not exceed the then current market rate (as
determined in good faith by a Senior 

 

40

 

Officer) for Debt of a
similar type and for a similar obligor; (d) it is subordinated to the
Obligations at least to the same extent as the Debt being extended, renewed or
refinanced; (e) the covenants applicable to it are no less favorable to
Borrowers than those applicable to the Debt being extended, renewed or
refinanced; and (f) upon giving effect to it, no Default or Event of
Default exists.

 

Refinancing Debt - Borrowed
Money that is the result of an extension, renewal or refinancing of Debt
permitted under Section 10.2.1.

 

Regulation D - Regulation D
of the Board of Governors.

 

Reimbursement Date - as defined
in Section 2.3.2.

 

Related Real Estate
Documents - with respect to any Mortgaged Real Estate, the
following, in form and substance satisfactory to Administrative Agent and
received by Administrative Agent for review at least ten (10) days prior
to the effective date of the Mortgage (or most recent amendment thereto):  (a) a lender’s policy of title insurance
(or an endorsement to existing policy) insuring the Applicable Agent’s interest
under the Mortgage, in a form reasonably acceptable to Administrative Agent and
for an amount equal to 100% of the value of the insured Property and by an
insurer selected by Borrower Agent and reasonably acceptable to Administrative
Agent, which must be fully paid on such effective date; (b) such
collateral assignments of leases, estoppel letters, attornment agreements,
consents, waivers and releases as Administrative Agent may reasonably require
with respect to other Persons having an interest in the Real Estate; (c) a
current, as-built survey of the Mortgaged Real Estate, containing a
metes-and-bounds property description (if sufficient to provide constructive
notice of Administrative Agent’s Lien under Applicable Law for the relevant
jurisdiction) and flood plain certification, and certified by a licensed
surveyor reasonably acceptable to Administrative Agent; (d) flood
insurance in an amount required by Administrative Agent, not to exceed 100% of
the value of each insured property, with endorsements and by an insurer
selected by Borrower Agent and reasonably acceptable to Administrative Agent,
if the Mortgaged Real Estate is within a flood plain; (e) a current
appraisal of the Mortgaged Real Estate, prepared by an appraiser reasonably
acceptable to Administrative Agent, and in form and substance satisfactory to
Required Borrower Group Lenders; (f) an environmental assessment, prepared
by environmental engineers reasonably acceptable to Administrative Agent, and
accompanied by such reports, certificates, studies or data as Administrative
Agent may reasonably require, which shall all be in form and substance
satisfactory to Required Borrower Group Lenders; and (g) an Environmental
Agreement and such other documents, instruments or agreements as Administrative
Agent may reasonably require with respect to any environmental risks regarding
the Mortgaged Real Estate.

 

Rent Reserve - a reserve
established from time to time in Administrative Agent’s Credit Judgment in an
amount equal to approximately two (2) months rent and other charges with
respect to any material Collateral in the possession of, or at a location owned
by, a Person other than a Borrower or an Affiliate of a Borrower, unless such
Person has executed a Lien Waiver; provided, however, that in no
event shall the Rent Reserve at any leased location exceed the value of the
Collateral maintained at such location.

 

Report - as defined
in Section 12.2.3.

 

Reportable Event - any event
set forth in Section 4043(b) of ERISA for which the notice
requirements of said section have not been waived.

 

Required Borrower Group
Lenders - at any date of determination thereof, Lenders having Borrower Group
Commitments to a Borrower Group representing more than 50% of the aggregate
Borrower Group Commitments to such Borrower Group at such time; provided,
however, that if any such 

 

41

 

Lender shall be in breach of
any of its obligations hereunder to Borrowers within such Borrower Group or any
Agent, including any breach resulting from its failure to honor its Borrower
Group Commitment to such Borrower Group in accordance with the terms of this
Agreement, then, for so long as such breach continues, the term “Required
Borrower Group Lenders” shall mean Lenders (excluding each Lender that is
in breach of its obligations under this Agreement to such Borrower Group)
having Borrower Group Commitments to such Borrower Group representing more than
50% of the aggregate Borrower Group Commitments to such Borrower Group
(excluding the Borrower Group Commitments of each Lender that is in breach of
its obligations under this Agreement) at such time; provided  further,
however, that if all of the Borrower Group Commitments to such Borrower Group
have been terminated, the term “Required Borrower Group Lenders” shall
mean Lenders to such Borrower Group (excluding each Lender that is in breach of
its obligations under this Agreement) holding Loans (including Swingline Loans)
representing more than 50% of the aggregate principal amount of Loans
(including Swingline Loans) outstanding at such time.

 

Required Lenders - at any date
of determination thereof, Lenders having Commitments representing more than 50%
of the aggregate Commitments at such time; provided, however,
that if any Lender shall be in breach of any of its obligations hereunder to
Borrowers or Administrative Agent, including any breach resulting from its
failure to honor its Commitment in accordance with the terms of this Agreement,
then, for so long as such breach continues, the term “Required Lenders”
shall mean, Lenders (but excluding each Lender that is in breach of its
obligations under this Agreement), having Commitments representing more than
50% of the aggregate Commitments (excluding the Commitments of each Lender that
is in breach of its obligations under the Agreement) at such time; provided
further, however, that if the Commitments have been terminated, the term
“Required Lenders” shall mean Lenders (but excluding each Lender that is
in breach of its obligations hereunder) holding Loans (including Swingline
Loans) representing more than 50% of the aggregate principal amount of Loans
(including Swingline Loans) outstanding at such time.

 

Required Perfection
Documents - with respect to any Lien granted in favor of any
Agent, all documents necessary to be filed, published or registered with any
Governmental Authority to perfect or render enforceable, or to maintain the
uninterrupted perfection and enforceability of, such Lien, including all UCC-1
financing statements, all required filings, publications, recordations or
registrations under the PPSA or the Civil Code of Quebec and any other
appropriate documentation, filings, publications or registrations under any
other Applicable Law.

 

Reset Date - as defined
in Section 5.13.1.

 

Responsible Officer - any Senior
Officer, treasurer, controller, secretary or vice president-treasury services
of any Borrower.

 

Restrictive Agreement - an agreement
(other than any of the Loan Documents, the Brownwood Lease, and, prior to the
defeasance thereof on or about the Closing Date, the Existing Senior Notes)
that, if and for so long as an Obligor or any Subsidiary of such Obligor is a
party thereto, would prohibit, condition or restrict such Obligor’s or its
Subsidiary’s right to (i) incur or repay Debt for money borrowed
(including any of the Obligations); (ii) grant Liens upon any of such
Obligor’s or its Subsidiary’s assets (including Liens granted in favor of the
Applicable Agent pursuant to the Loan Documents); (iii) declare or make
Distributions; (iv) amend, modify, extend or renew any agreement
evidencing Debt for money borrowed (including any of the Loan Documents); or (v) repay
any Debt owed to another Obligor.

 

Revolver Commitment - for any
Lender, its commitment to make Revolver Loans and to participate in LC
Obligations up to the maximum principal amount shown on Schedule 1.1.1, or as 

 

42

 

specified hereafter in the
most recent Assignment and Acceptance to which it is a party.  “Revolver Commitments” means the
aggregate amount of such commitments of all Lenders.

 

Revolver Loan - a loan made
pursuant to Section 2.1, and
any Overadvance Loan or Protective Advance.

 

Revolver Notes - the U.S.
Revolver Notes and the Canadian Revolver Notes.

 

Revolver Termination Date - August 5,
2013.

 

Revolving Credit Facility - as defined
in the Recitals to this Agreement.

 

Royalties - all
royalties, fees, expense reimbursement and other amounts payable by a Borrower
under a License.

 

S&P - Standard &
Poor’s Ratings Group, a division of McGraw-Hill, Inc.

 

SEHC - as defined
in the Recitals to this Agreement.

 

SEI - as defined
in the Recitals to this Agreement.

 

SE Holding - means S.E.
Holding, C.V., a Dutch limited partnership.

 

Secured Parties - (i) with
respect to Liens granted by U.S. Borrowers or any Guarantor to Administrative
Agent, each of the Credit Parties and Lender Counterparties making extensions
of credit (including the issuance of Letters of Credit) to or for the account
of U.S. Borrowers or providing Bank Products to U.S. Borrowers and each of the
Credit Parties and Lender Counterparties making extensions of credit (including
the issuance of Letters of Credit) to or for the account of Canadian Borrower
or providing Bank Products to Canadian Borrower; and (ii) with respect to
the Liens granted by Canadian Borrower or any Guarantor to Administrative
Agent, all Credit Parties and Lender Counterparties making extensions of credit
(including the issuance of Letters of Credit provided hereunder) to or for the
account of or guaranteed by Canadian Borrower or providing Bank Products to
Canadian Borrower.

 

Security Documents - (i) the
U.S. Security Agreement, (ii) the Canadian Security Agreement (and deeds
of hypothec, as required), (iii) the Guaranties, (iv) each Mortgage, (v) each
Insurance Assignment, (vi) the Patent Security Agreement and the Trademark
Security Agreement, (vii) the Pledge Agreements, (viii) the Deposit
Account Control Agreements, and (ix) all other instruments and agreements
now or at any time hereafter securing the whole or any part of the Obligations.

 

Senior Officer - the chairman
of the board, president, executive vice-president, chief financial officer or
general counsel of a Borrower or, if the context requires, an Obligor.

 

Settlement Report - a report
delivered by Administrative Agent to Lenders summarizing the Revolver Loans and
participations in LC Obligations outstanding as of a given settlement date,
allocated to Lenders on a Pro Rata basis in accordance with their Revolver
Commitments.

 

Share - as defined
in the Recitals to this Agreement.

 

43

 

Similar Business - any business
conducted or proposed to be conducted by SEI, Borrowers and their Subsidiaries
on the Closing Date, and any reasonable extension thereof or any business that
is similar, reasonably related, incidental or ancillary thereto.

 

Solidary Claim - as set forth
in Section 12.9.

 

Solvent - as to any
Person, such Person (i) owns Property whose fair salable value (as defined
below) is greater than the amount required to pay all of its Debts (including
contingent, subordinated, unmatured and unliquidated liabilities); (ii) owns
Property whose present fair salable value (as defined below) is greater than
the probable total liabilities (including contingent, subordinated, unmatured
and unliquidated liabilities) of such Person as they become absolute and
matured; (iii) is able to pay all of its Debts as they mature; (iv) has
capital that is not unreasonably small for its business and is sufficient to
carry on its business and transactions and all business and transactions in
which it is about to engage; (v) with respect to a U.S. Obligor, is not “insolvent”
within the meaning of Section 101(32) of the Bankruptcy Code, and, with
respect to a Canadian Obligor, is not an “insolvent person” as defined in the
Bankruptcy and Insolvency Act (Canada), as applicable; and (vi) has not
incurred (by way of assumption or otherwise) any obligations or liabilities
(contingent or otherwise) under any Loan Documents, or made any conveyance in
connection therewith, with actual intent to hinder, delay or defraud either
present or future creditors of such Person or any of its Affiliates.  “Fair salable value” means the amount
that could be obtained for assets within a reasonable time, either through
collection or through sale under ordinary selling conditions by a capable and
diligent seller to an interested buyer who is willing (but under no compulsion)
to purchase.

 

Specified Representations - as set forth
in Section 6.1(d).

 

Springing Dominion Event - (i) for
any Borrower Group comprised of U.S. Borrowers or Canadian Borrower, the
occurrence of an Event of Default with respect to such Borrower Group, and (ii) for
all Borrower Groups comprised of U.S. Borrowers or Canadian Borrower, if
Aggregate Availability is less than the Dollar Equivalent of $35,000,000.  For purposes of clause (ii) of this
definition, Aggregate Availability on any date shall be determined after giving
effect to any pending request for a Revolver Loan or Letter of Credit under
this Agreement on such date.

 

Springing Dominion Notice - a written
notice from an Agent to a bank at which a Dominion Account is maintained that a
Springing Dominion Event has occurred.

 

Statutory Reserves - the
percentage (expressed as a decimal) established by the Board of Governors as
the then stated maximum rate for all reserves (including those imposed by
Regulation D, all basic, emergency, supplemental or other marginal reserve
requirements, and any transitional adjustments or other scheduled changes in
reserve requirements) applicable to any member bank of the Federal Reserve
System in respect of Eurocurrency Liabilities (or any successor category of
liabilities under Regulation D).

 

Subordinated Debt - Debt
incurred by an Obligor which is subordinated to the Obligations pursuant to
subordination terms and conditions reasonably acceptable to the Applicable
Agent.

 

Subsidiary - with respect
to any Person, any entity of which Equity Interests representing more than 50%
of the ordinary voting power are owned by such Person (including indirect
ownership by such Person through other entities in which such Person directly
or indirectly owns Equity Interests representing more than 50% of the ordinary
voting power); provided, however, that  none of SE Holding, 

 

44

 

JV Europe, Femco, Essex
Delaware, Essex Wire, IP Licensing, Magnet Wire GP or any of their respective
subsidiaries shall be deemed a Subsidiary of any Obligor.

 

Swingline Loan - any
Borrowing of U.S. Base Rate Revolver Loans or Canadian Prime Rate Loans or
Canadian Base Rate Loans funded by an Applicable Swingline Lender, until such
Borrowing is settled among Lenders pursuant to Section 4.1.3.

 

Taxes - any taxes,
levies, imposts, duties, fees, assessments, deductions, withholdings or other
charges of whatever nature, including income, receipts, excise, property,
sales, use, transfer, license, payroll, withholding, social security,
franchise, intangibles, stamp or recording taxes imposed by any Governmental
Authority, and all interest, penalties and similar liabilities relating
thereto.

 

Test Period - as of any
date, (i) for purposes of testing the Consolidated Fixed Charge Coverage
Ratio, the most recent period of twelve consecutive months ended on or prior to
such date (taken as one accounting period) in respect of which financial
statements for each month in such period have been or are required to be
delivered pursuant to Section 10.1.2(c);
provided  that, prior to the first date on which financial
statements have been or are required to be delivered pursuant to Section 10.1.2(c), the Test Period in
effect shall be the period of twelve consecutive months ended May 31,
2008; and (ii) for purposes of testing the Total Funded Debt to EBITDA
Ratio, the most recent period of four consecutive Fiscal Quarters in respect of
which financial statements for each Fiscal Quarter or Fiscal Year in such
period have been or are required to be delivered pursuant to Section 10.1.2(a) or (b); provided
that, prior to the first date on which financial statements have been or
are required to be delivered pursuant to Section 10.1.2(a) or
(b), the Test Period in effect shall be the period of four
consecutive Fiscal Quarters ended March 31, 2008.  A Test Period may be designated by reference
to the last day thereof (i.e., the “March 31, 2008 Test Period” refers to
the period of twelve consecutive months or four consecutive Fiscal Quarters, as
applicable, ended March 31, 2008), and a Test Period shall be deemed to
end on the last day thereof.

 

Toll Copper Inventory - “toll copper”
owned by another Person at any time in the possession of any Borrower for
processing or otherwise.

 

Toll/Price Adjustment
Reserve - a reserve equal to Borrowers’ reserve for copper billed for but not
shipped or delivered to a customer plus Borrowers’ reserve for purchase price
adjustments.

 

Total Assets - the total
assets of SEI and its Subsidiaries on a Consolidated basis, as shown on the
most recent balance sheet delivered pursuant to Section 10.1.2(a) or (b); or, prior to the time any such statements are so
delivered pursuant to Section 10.1.2(a) or
(b), the Pro Forma Financial
Statements.

 

Total Funded Debt to EBITDA
Ratio - the ratio, as determined with respect to any Test Period, of (a) Consolidated
Total Debt of Borrowers and their Subsidiaries as of the last day of the
applicable Fiscal Quarter, to (b) Consolidated EBITDA for such Test
Period.

 

Total Revolver Exposure - on any date,
the sum of (i) the U.S. Revolver Exposure plus (ii) the Dollar
Equivalent of the Canadian Revolver Exposure.

 

Trademark Security Agreement - each
trademark security agreement pursuant to which an Obligor grants to the
Applicable Agent, for the benefit of Secured Parties, a Lien on such Obligor’s
interests in trademarks, as security for the Obligations.

 

45

 

Transferee - any actual
or potential Eligible Assignee, Participant or other Person acquiring an
interest in any Obligations.

 

Type - any type of
a Loan (i.e., U.S. Base Rate Loan, LIBOR Loan, Canadian BA Rate Loan, Canadian
Base Rate Loan, or Canadian Prime Rate Loan) that has the same interest option
and, in the case of LIBOR Loans or Canadian BA Rate Loans, the same Interest
Period, and which shall be either an Interest Period Loan or a Floating Rate
Loan.

 

UCC - the Uniform
Commercial Code as in effect in the State of Georgia or, when the laws of any
other jurisdiction govern the perfection or enforcement of any Lien, the
Uniform Commercial Code of such jurisdiction.

 

Undrawn Amount - on any date
with respect to a particular Letter of Credit, the Dollar Equivalent of the
amount then available to be drawn under such Letter of Credit.

 

Uniform Customs and
Practices for Documentary Credits - the rules on the
issuance and use of letters of credit published by the International Chamber of
Commerce, or any successor thereto, the version of which is in effect on the
Closing Date is designated as UCP600.

 

Upstream Payment - a
Distribution by a Subsidiary of a Borrower to such Borrower.

 

U.S. Availability - on any date,
the amount that U.S. Borrowers are entitled to borrow pursuant to Section 2.1 as U.S. Revolver Loans on
such date, such amount being the difference derived when the sum of the
principal amount of U.S. Revolver Loans then outstanding (including any
outstanding Swingline Loans to U.S. Borrowers) is subtracted from the U.S.
Borrowing Base on such date (and if such amount outstanding on any date is
equal to or greater than the U.S. Borrowing Base, then U.S. Availability on
such date shall be zero or a negative number, as applicable).

 

U.S. Base Rate - the higher
of (i) the Federal Funds Rate plus 0.50%, and (ii) the rate of
interest announced by Bank of America from time to time as its prime rate.  Such rate is a reference rate only and Bank
of America may make loans or other extensions of credit at, above or below
it.  Any change in the prime rate
announced by Bank of America shall take effect at the opening of business on
the effective day specified in the public announcement of the change.

 

U.S. Base Rate Loan - any Loan
that bears interest based on the U.S. Base Rate.

 

U.S. Base Rate Revolver Loan - a Revolver
Loan that bears interest based on the U.S. Base Rate.

 

U.S. Borrowers -
Communications, EGI and any other of SEI’s Subsidiaries that are organized
under the laws of a jurisdiction within the United States and hereafter
designated by Administrative Agent and Borrower Agent to be a “U.S. Borrower”
hereunder.

 

U.S. Borrowing Base - on any date
of determination thereof, an amount in Dollars equal to the lesser of the
following:

 

(a) the U.S. Revolver
Commitments, minus the LC Reserve; or

 

(b)                                 the sum of:

 

46

 

(i)                                     the Accounts
Formula Amount calculated with reference to Eligible Accounts of U.S.
Borrowers, plus

 

(ii)                                  the Inventory
Formula Amount calculated with reference to Eligible Inventory of U.S.
Borrowers, plus

 

(iii)                               the U.S. Fixed
Asset Formula Amount, minus

 

(iv)          the Availability Reserves applicable to U.S. Collateral.

 

U.S. Collateral - all of each
U.S. Obligor’s right, title and interest in Property of such U.S. Obligor
granted to Administrative Agent, for the benefit of the Secured Parties, in the
applicable Security Documents as security for any Obligations, and all other
Property of U.S. Obligors that now or hereafter secures (or is intended to
secure) any Obligations.

 

U.S. Fixed Asset
Amortization Amount - on a monthly basis,  an amount equal to $300,000 on the first day
of each month.

 

U.S. Fixed Asset Formula
Amount - as of any date of determination, the U.S. Maximum Fixed Asset
Amount, as reduced on the first day of each month by the U.S. Fixed Asset
Amortization Amount for the applicable month (and after giving effect to any
prior reductions based on the U.S. Fixed Asset Amortization Amounts in previous
months), subject to further reduction pursuant to Section 5.3.

 

U.S. LC Obligations - on any date,
an amount equal to the Dollar Equivalent of the sum of (without duplication) (i) all
amounts then due and payable by any U.S. Obligor on such date by reason of any
payment that is made by the Applicable Issuing Bank under a Letter of Credit
issued pursuant to this Agreement and that has not been repaid to such Issuing
Bank or Administrative Agent (including by means of a Revolver Loan pursuant to
Section 2.3.2(a)), plus (ii) the
aggregate Undrawn Amount of all Letters of Credit which are issued pursuant to
this Agreement for the account of a U.S. Borrower and which are then
outstanding or for which an LC Application has been delivered to and accepted
by the Applicable Issuing Bank, plus (iii) all fees which are then due or
to become due and payable by U.S. Borrowers with respect to outstanding Letters
of Credit issued pursuant to this Agreement; provided, however,
when used (A) as a component of the term LC Obligations as used in the
definition of Cash Collateralize, and (B) in the definition of U.S.
Revolver Exposure, the term U.S. LC Obligations shall not be deemed to include
amounts described in clause (iii) above.

 

U.S. Lender - each Lender
other than Canadian Lenders.

 

U.S. Letter of Credit - a standby or
documentary letter of credit issued pursuant to this Agreement for the account
of a U.S. Borrower.

 

U.S. Maximum Fixed Asset
Amount - an amount equal to the lesser of (i) the sum of 80% of the net
orderly liquidation value of the U.S. Borrowers’ Equipment plus 65% of the fair
market value of the U.S. Borrowers’ Real Estate, in each case, as determined on
the Closing Date, or (ii) $28,870,000.

 

U.S. Obligations - on any date,
the portion of the Obligations outstanding that are owing by U.S. Borrowers or
any other U.S. Obligor.

 

47

 

U.S. Obligor - a U.S.
Borrower or a Guarantor that is organized under the laws of a jurisdiction
within the United States of America, that has granted in favor of the
Administrative Agent a Lien upon any of such Person’s assets to secure payment
of any of the U.S. Obligations.

 

U.S. Revolver Commitment - at any date for
any U.S. Lender, the obligation of such Lender to make U.S. Revolver Loans and
to purchase participations in LC Obligations pursuant to the terms and
conditions of this Agreement, which shall not exceed the principal amount set
forth opposite such Lender’s name under the heading “Revolver Commitment”
on Schedule 1.1.1 or as
described in the Assignment and Acceptance by which it became a Lender, as
modified from time to time pursuant to the terms of this Agreement or to give
effect to any applicable Assignment and Acceptance; and “U.S. Revolver
Commitments” means the aggregate principal amount of the U.S. Revolver
Commitments of all U.S. Lenders, the maximum amount of which on any date shall
equal the U.S. Revolver Facility Amount.

 

U.S. Revolver Commitment
Increase Lender - as defined in Section 2.1.9(f).

 

U.S. Revolver Exposure - on any date,
an amount equal to the sum of the U.S. Revolver Loans outstanding on such date
plus the U.S. LC Obligations on such date.

 

U.S. Revolver Facility
Amount - an amount equal to $330,000,000, as such U.S. Revolver Facility
Amount may be adjusted from time to time in accordance with the provisions of Sections 2.1.6, 2.1.9, and 11.2.

 

U.S. Revolver Loans - Revolver
Loans made by U.S. Lenders to U.S. Borrowers (including Swingline Loans)
pursuant to Section 2.1.1,
which Revolver Loans shall be denominated in Dollars.

 

U.S. Revolver Notes - the
promissory notes to be executed by the U.S. Borrowers on or about the Closing
Date in favor of each U.S. Lender that requests a promissory note to evidence
the U.S. Revolver Loans funded from time to time by U.S. Lenders (other than
Swingline Loans), which shall be in the form of Exhibit A-1 to this Agreement, together with any
replacement or successor notes therefor.

 

U.S. Security Agreement -
collectively, the Amended and Restated Security Agreement executed by U.S.
Obligors, together with each other security agreement supplement executed and
delivered pursuant to Section 10.1.9.

 

Value - with
reference to the value of Eligible Inventory, value determined by
Administrative Agent in its Credit Judgment on the basis of the lower of cost
or market of such Eligible Inventory, with the cost thereof calculated on a
first-in, first out basis in accordance with GAAP; provided  that
the Value of Eligible Inventory shall not include the portion of the value of
the Eligible Inventory equal to the profit earned by any Affiliate on the sale
thereof to a Borrower.

 

Vendor - a Person
that sells Inventory to the Borrower.

 

1.2          Accounting
Terms.  Under the
Loan Documents (except as otherwise specified herein), all accounting terms
shall be interpreted, all accounting determinations shall be made, and all
financial statements shall be prepared, in accordance with GAAP applied on a
basis consistent with the most recent audited financial statements of Borrowers
delivered to Administrative Agent before the Closing Date and using the same
inventory valuation method as used in such financial statements, except for any
change required or permitted by GAAP if Borrowers’ certified public accountants
concur in such change, the change is disclosed to Administrative Agent, and Section 10.3 is amended in a manner
satisfactory to Required Lenders to take into account the effects of the
change.

 

48

 

1.3          Certain
Matters of Construction.  The terms “herein,” “hereof,” “hereunder” and
other words of similar import refer to this Agreement as a whole and not to any
particular section, paragraph or subdivision. 
Any pronoun used shall be deemed to cover all genders.  In the computation of periods of time from a
specified date to a later specified date, “from” means “from and including,”
and “to” and “until” each mean “to but excluding.”  The terms “including” and “include” shall
mean “including, without limitation” and, for purposes of each Loan Document,
the parties agree that the rule of ejusdem generis shall not be applicable
to limit any provision.  Section titles
appear as a matter of convenience only and shall not affect the interpretation
of any Loan Document.  All references to (a) laws
or statutes include all related rules, regulations, interpretations, amendments
and successor provisions; (b) any document, instrument or agreement
include any amendments, waivers and other modifications, extensions or renewals
(to the extent permitted by the Loan Documents); (c) any section mean,
unless the context otherwise requires, a section of this Agreement; (d) any
exhibits or schedules mean, unless the context otherwise requires, exhibits and
schedules attached hereto, which are hereby incorporated by reference; (e) any
Person include successors and assigns; (f) discretion of any Agent, any
Issuing Bank or any Lender shall mean the sole and absolute discretion of such
Person unless otherwise indicated.  All
calculations of Value, fundings of Loans, issuances of Letters of Credit and
payments of Obligations shall be in Dollars and, unless the context otherwise
requires, all determinations (including calculations of Borrowing Base and
financial covenants) made from time to time under the Loan Documents shall be
made in light of the circumstances existing at such time.  Borrowing Base calculations shall be made in
a manner consistent with historical methods of valuation and calculation, and
otherwise satisfactory to Administrative Agent (and not necessarily in
accordance with GAAP).  Borrowers shall
have the burden of establishing any alleged negligence, misconduct or lack of
good faith by any Agent, any Issuing Bank or any Lender under any Loan
Documents.  No provision of any Loan
Documents shall be construed against any party by reason of such party having,
or being deemed to have, drafted the provision. 
Whenever the phrase “to the best of Borrowers’ knowledge” or words of
similar import are used in any Loan Documents, such phrase means actual
knowledge of a Senior Officer, or knowledge that a Senior Officer would have
obtained if he or she had engaged in good faith and diligent performance of his
or her duties, including reasonably specific inquiries of employees or agents
and a good faith attempt to ascertain the matter to which such phrase
relates.  Whenever in the Agreement and
the other Loan Documents reference is made to attorneys’ fees and expenses that
are incurred by an Agent or a Lender and that are to be reimbursed to an Agent
or a Lender by Borrowers, such reference shall be understood to mean the
reasonable attorneys’ fees and expenses which are incurred by Administrative
Agent or such Lender for services actually rendered by attorneys selected by
such Agent or such Lender on such Agent’s or such Lender’s behalf.  Any Lien referred to in the Agreement or any
of the other Loan Documents as having been created in favor of an Agent, any
agreement entered into by an Agent pursuant to the Agreement or any of the other
Loan Documents, any payment made by or to, or funds received by, an Agent
pursuant to or as contemplated by any of the Loan Documents, or any other act
taken or omitted to be taken by an Agent shall, unless otherwise expressly
provided, be created, entered into, made or received, or taken or omitted for
the benefit or account of the Agents and the other Secured Parties. For
purposes of any Collateral located in the Province of Quebec or charged by any
deed of hypothec (or any other Loan Document) and for all other purposes
pursuant to which the interpretation or construction of a Loan Document may be
subject to the laws of the Province of Quebec or a court or tribunal exercising
jurisdiction in the Province of Québec, (q) “personal property” shall be deemed
to include “movable property”, (r) “real property” shall be deemed to
include “immovable property”, (s) “tangible property” shall be deemed to
include “corporeal property”, (t) “intangible property” shall be deemed to
include “incorporeal property”, (u) “security interest” and “mortgage”
shall be deemed to include a “hypothec”, (v) all references to filing,
registering or recording under the UCC or the PPSA shall be deemed to include
publication under the Civil Code of Québec, (w) all references to “perfection”
of or “perfected” Liens shall be deemed to include a reference to the “opposability”
of such Liens to third parties, (x) any “right of offset”, “right of
setoff” or similar expression shall be deemed to include a “right of 

 

49

 

compensation”, (y) “goods” shall be
deemed to include “corporeal movable property” other than chattel paper,
documents of title, instruments, money and securities, and (z) an “agent”
shall be deemed to include a “mandatary”.

 

SECTION  2.       CREDIT
FACILITIES

 

2.1          Revolver
Commitments.

 

2.1.1        U.S. Revolver Loans to U.S. Borrowers.  Each U.S. Lender agrees, severally and not
jointly with the other U.S. Lenders, upon the terms and subject to the
conditions set forth herein, to make U.S. Revolver Loans to U.S. Borrowers on
any Business Day during the period from the Closing Date to the Commitment
Termination Date, not to exceed in aggregate principal amount outstanding at
any time such Lender’s Borrower Group Commitment to U.S. Borrowers at such
time, which U.S. Revolver Loans may be repaid and reborrowed in accordance with
the provisions of this Agreement; provided, however, that such
Lenders shall have no obligation to U.S. Borrowers whatsoever to honor any
request for a U.S. Revolver Loan on or after the Commitment Termination Date or
if at the time of the proposed funding thereof the aggregate principal amount
of all U.S. Revolver Loans then outstanding (including Swingline Loans and
after giving effect to all pending requests for U.S. Revolver Loans) exceeds,
or would exceed after the funding of such U.S. Revolver Loan, the U.S.
Borrowing Base (and such Lenders shall only be obligated to the Administrative
Agent to do so to the extent they are so required  pursuant to the terms of Section 2.1.7).  Each Borrowing of U.S. Revolver Loans shall
be funded by U.S. Lenders on a Pro Rata basis in accordance with their
respective Borrower Group Commitments to U.S. Borrowers (except for Bank of
America with respect to Swingline Loans). 
The U.S. Revolver Loans shall bear interest as set forth in Section 3.1.  Each U.S. Revolver Loan shall, at the option
of U.S. Borrowers, be made or continued as, or converted into, part of one or
more Borrowings that, unless specifically provided herein, shall consist
entirely of U.S. Base Rate Loans or LIBOR Loans.  The U.S. Revolver Loans shall be repaid in
accordance with the terms of this Agreement and shall be secured by all of the
U.S. Collateral.  U.S. Borrowers shall be
jointly and severally liable to pay all of the Revolver Loans made to any
member of their Borrower Group.  Each
U.S. Revolver Loan shall be funded and repaid in Dollars.

 

2.1.2        Canadian Revolver Loans to Canadian
Borrower.  Each Canadian Lender
agrees, severally and not jointly with the other Canadian Lenders, upon the
terms and subject to the conditions set forth herein, to make Canadian Revolver
Loans to Canadian Borrower on any Business Day during the period from the
Closing Date to the Commitment Termination Date, not to exceed in aggregate
principal amount outstanding at any time, such Canadian Lender’s Borrower Group
Commitment to Canadian Borrower at such time, which Canadian Revolver Loans may
be repaid and reborrowed in accordance with the provisions of this Agreement; provided,
however, that Canadian Lenders shall have no obligation to Canadian
Borrower whatsoever to honor any request for a Canadian Revolver Loan on or
after the Commitment Termination Date or if at the time of the proposed funding
thereof the aggregate principal amount of all of the Canadian Revolver Loans
then outstanding (including Swingline Loans to Canadian Borrower and after
giving effect to all pending requests for Canadian Revolver Loans) exceeds, or
would exceed after the funding of such Canadian Revolver Loan, the Canadian
Borrowing Base (and such Lenders shall only be so obligated to the Canadian
Agent to do so to the extent they are so required  pursuant to the terms of Section 2.1.7).  Each Borrowing of Canadian Revolver Loans
shall be funded by Canadian Lenders on a Pro Rata basis in accordance with
their respective Borrower Group Commitments to Canadian Borrower (except for
Bank of America, N.A. (acting through its Canada branch) with respect to
Swingline Loans).  The Canadian Revolver
Loans shall bear interest as set forth in Section 3.1.  Each Canadian Revolver Loan shall, at the
option of Canadian Borrower, be made or continued as, or converted into, part
of one or more Borrowings that, unless specifically provided herein, shall
consist 

 

50

 

entirely of Canadian Prime
Rate Loans or Canadian BA Rate Loans if denominated in Canadian Dollars, or
Canadian Base Rate Loans or LIBOR Loans if denominated in Dollars.  The Canadian Revolver Loans shall be repaid
in accordance with the terms of this Agreement and shall be secured by all of
the Canadian Collateral and all of the U.S. Collateral. Each Canadian Revolver
Loan (i) which is (i) a Canadian Prime Rate Loan or a Canadian BA
Rate Loan shall be funded in Canadian Dollars and repaid in Canadian Dollars,
and (ii) a Canadian Base Rate Loan or a LIBOR Loan shall be funded in
Dollars and repaid in Dollars.

 

2.1.3        Cap on Total Revolver Exposure.  Notwithstanding anything to the contrary
contained in Sections 2.1.1 and 2.1.2, in no event shall any Borrower be
entitled to receive a Revolver Loan if at the time of the proposed funding of
such Revolver Loan (and after giving effect thereto and all pending requests
for Revolver Loans), the Total Revolver Exposure exceeds (or would exceed) the
Maximum Revolver Facility Amount.

 

2.1.4        Revolver Notes.  The Revolver Loans made by each Lender to
Borrowers within a Borrower Group and interest accruing thereon shall be
evidenced by the records of Administrative Agent and such Lender.  At the request of any Lender to a Borrower
Group, Borrowers within such Borrower Group shall deliver a Revolver Note
payable to such Lender (or the assignee of such Lender) in the amount of such
Lender’s Borrower Group Commitment for Revolver Loans to such Borrower Group,
which shall be executed by Borrowers within such Borrower Group, completed in
conformity with this Agreement and delivered to such Lender.  All outstanding principal amounts and accrued
interest under the Revolver Notes shall be due and payable as set forth in Sections 5.2 and 5.3.

 

2.1.5        Use of Proceeds.  The proceeds of Revolver Loans shall be used
by Borrowers solely (a) to satisfy certain existing Debt of SEI and
Borrowers (including the redemption, repayment or defeasance of the Existing
Senior Notes in accordance with the terms of Section 10.2.8);
(b) to make Distributions for the purpose of paying the Merger Transaction
Costs (subject to the limitations on Distributions set forth in this
Agreement); (c) to pay other costs or liabilities of SEI and Borrowers
related to the Merger and the Related Transactions, (d) to pay Obligations
in accordance with this Agreement; and (e) for working capital and other
lawful corporate purposes of Borrowers.

 

2.1.6        Voluntary Reduction or Termination of
Revolver Commitments.

 

(a)           Borrowers within a Borrower Group may permanently reduce
the Borrower Group Commitments, on a Pro Rata basis for each Applicable Lender,
from time to time upon written notice to the Applicable Agent, which notice shall
specify the amount of the reduction, shall be irrevocable once given, shall be
given at least five (5) Business Days prior to the end of a month and
shall be effective as of the first day of the next month.

 

(b)           The Revolver Commitments shall terminate on the Revolver
Termination Date, unless sooner terminated in accordance with this
Agreement.  Upon at least thirty (30)
days prior written notice to Administrative Agent, Borrowers may, at their
option, terminate the Revolver Commitments and this credit facility.  Any notice of termination given by Borrowers
shall be irrevocable.  On the termination
date, Borrowers shall make Full Payment of all Obligations.

 

2.1.7        Overadvances.  If (A) the aggregate amount of U.S.
Revolver Loans outstanding on any date exceeds the U.S. Borrowing Base or the
U.S. Revolver Facility Amount on such date, or (B) the Dollar Equivalent
of the aggregate amount of Canadian Revolver Loans outstanding on any date
exceeds the Dollar Equivalent of the Canadian Borrowing Base or the Canadian
Revolver Facility Amount on such date (in each case, an “Overadvance”),
the excess amount shall be payable by Borrowers 

 

51

 

on demand to the Applicable
Agent, but all such Overadvances of the U.S. Revolver Loans shall nevertheless
constitute Borrower Group Obligations of U.S. Borrowers secured by the
Collateral of U.S. Obligors and entitled to all benefits of the Loan Documents
to which U.S. Obligors are party and all such Overadvances of the Canadian
Revolver Loans shall nevertheless constitute Borrower Group Obligations of
Canadian Borrower secured by the Collateral of all Obligors and entitled to the
benefits of the Loan Documents.  Unless
its authority has been revoked in writing by Required Borrower Group Lenders,
the Applicable Agent may require the Applicable Lenders to honor requests for
Overadvance Loans and to forbear from requiring Borrowers to cure an
Overadvance in accordance with the provisions of Section 14.1.4.  In
no event shall Overadvance Loans be required that would cause the Total
Revolver Exposure to exceed the Maximum Revolver Facility Amount, the U.S.
Revolver Exposure to exceed the U.S. Revolver Facility Amount, or the Canadian
Revolver Exposure to exceed the Canadian Revolver Facility Amount. Any funding
of an Overadvance Loan or sufferance of an Overadvance shall not constitute a
waiver by the Applicable  Agent or the
Applicable Lenders of the Event of Default caused thereby.  In no event shall any Borrower or other
Obligor be deemed a beneficiary of this Section nor authorized to enforce
any of its terms.

 

2.1.8        Protective Advances.  The Applicable Agent shall be authorized by
Borrowers and Lenders, from time to time in 
its sole and absolute discretion, at any time that a Default or Event of
Default exists or any of the conditions precedent set forth in Section 6 hereof have not been
satisfied, and without regard to the aggregate Borrower Group Commitments, to
make U.S. Base Rate Loans to U.S. Borrowers or Canadian Prime Rate Loans to
Canadian Borrowers (“Protective Advances”) on behalf of the applicable
Lenders in an aggregate amount outstanding at any time not to exceed
$15,000,000 for the U.S. Borrower Group and the Canadian Borrowing Group, but
not in excess of the aggregate of the Commitments minus the LC Obligations for
such Borrower Group, to the extent that the Applicable Agent deems the funding
of the Protective Advances to be necessary or desirable (i) to preserve or
protect the Collateral or any portion thereof, (ii) to enhance the
likelihood of or the amount of repayment of the Obligations or (iii) to
pay any other amount chargeable to Borrowers pursuant to the terms of this
Agreement, including costs, fees and expenses, all of which U.S. Base Rate
Loans or Canadian Prime Rate Loans, as applicable, advanced by the Applicable
Agent shall be deemed part of the Obligations and secured by the Collateral,
shall be treated as Swingline Loans and shall be settled and paid by Borrowers
and Lenders as provided herein for Swingline Loans; provided, however, that the
Required Borrower Group Lenders may at any time revoke the Applicable Agent’s
authorization to make any such Loans by written notice to the Applicable Agent,
which shall become effective upon and after the Applicable Agent’s receipt
thereof.  The provisions of this Section 2.1.8 shall be in addition to
the provisions of Section 14.1.4
hereof.

 

2.1.9        Increase of Revolver Commitments.

 

(a)           At any time or from time to time
after the Closing Date and up to the Commitment Termination Date, Borrower
Agent may, by notice (the “Commitment Increase Notice”) to
Administrative Agent and Canadian Agent (whereupon the Applicable Agent shall
promptly deliver a copy to each Lender), request one or more increases in the
amount of the Revolver Commitments (each such increase, a “Commitment
Increase”); provided  that upon the effectiveness of any
Commitment Increase Amendment referred to below, no Default or Event of Default
shall have occurred and be continuing. 
Each Commitment Increase shall be in an aggregate principal amount that
is not less than the Dollar Equivalent of $10,000,000 or a smaller amount if
such smaller amount represents all remaining Aggregate Availability under the
limit set forth in Section 2.1.9(b).

 

(b)           Notwithstanding anything to the contrary herein, the
aggregate amount of all Commitment Increases shall not exceed $75,000,000 (the “Commitment
Increase Availability”).

 

52

 

(c)           Each Commitment Increase Notice from Borrower Agent
pursuant to this Section 2.1.9 shall
set forth the requested amount and proposed terms of the Commitment Increase
and shall specify the date (each, a “Commitment Increase Effective Date”)
on which Borrower Agent proposes that the Commitment Increase shall be
effective, which shall be a date not less than twenty days (20) Business Days
after the date on which such Commitment Increase Notice is delivered to the
Agents and Lenders.

 

(d)           Any Commitment Increase shall be offered by Borrowers of
the applicable Borrower Group to the Applicable Lenders Pro Rata in accordance
with Borrower Group Commitments for U.S. Revolver Loans or the Borrower Group
Commitments for Canadian Revolver Loans, as applicable, of such Lenders on the
date that the Commitment Increase is requested. 
The Applicable Lenders shall have twenty (20) Business Days to respond
to any request for a Commitment Increase (by notice to Borrowers of such
Borrower Group and the Applicable Agent) and may elect to accept all, a portion
or none of their respective Pro Rata shares of the proposed Commitment
Increase.  Any Applicable Lender that
fails to respond to a request for a Commitment Increase by the end of such  twenty (20) Business Day period will be
deemed to have declined the request for its Pro Rata share of the requested
Commitment Increase.  If any portion of a
requested Commitment Increase is not provided by an Applicable Lender, then
Borrowers of such Borrower Group may offer any such portion to the other
Applicable Lenders and/or request that one or more Eligible Assignees provide
such Commitment Increase (any such other Eligible Assignee being called a “New
U.S. Lender” or a “New Canadian Lender”, as applicable); provided
that the Administrative Agent shall have consented (such consent not to
be unreasonably withheld or delayed) to such Lender’s or New U.S. Lender’s
providing such Commitment Increases and the Canadian Agent shall have consented
(such consent not to be unreasonably withheld or delayed) to such Lender’s or
New Canadian Lender’s providing such Commitment Increases if such consent would
be required under Section 13.3 for
an assignment of Revolver Commitments to such Lender, New U.S. Lender or New
Canadian Lender, as applicable.  Commitments in
respect of Commitment Increases shall become Revolver Commitments (or in the
case of a Commitment Increase to be provided by an existing Revolving Lender,
an increase in such Lender’s Revolver Commitment) under this Agreement pursuant
to an amendment (a “Commitment Increase Amendment”) to this Agreement
and, as appropriate, the other Loan Documents, executed by Borrowers, each
Lender agreeing to provide such Revolver Commitment, if any, each New U.S.
Lender or New Canadian Lender, if any, and the Administrative Agent or the
Canadian Agent, as applicable. The Commitment Increase Amendment may, without
the consent of any other Lenders, effect such amendments to this Agreement and
the other Loan Documents as may be necessary or appropriate, in the reasonable
opinion of the Administrative Agent, the Canadian Agent and Borrowers, to
effect the provisions of this Section.

 

(e)           The effectiveness of any Commitment Increase Amendment
shall be subject to (A) the satisfaction on the date thereof (each, a “Commitment
Increase Closing Date”) of each of the conditions set forth in Section 6.2 (it being understood that
all references to “the date of such credit extension” or similar language in
such Section 6.2 shall be
deemed to refer to the effective date of such Commitment Increase Amendment),
and such other conditions as the parties thereto shall agree.  Borrowers shall use the proceeds of the
Commitment Increases for any purpose not prohibited by this Agreement.

 

(f)            Upon each increase in the U.S. Revolver Commitments
pursuant to this Section 2.1.9,
(x) each Lender of U.S. Revolver Loans immediately prior to such increase
shall automatically and without further act be deemed to have assigned to each
Lender providing a portion of the Commitment Increase with respect to U.S.
Revolver Loans (each a “U.S. Revolver Commitment Increase Lender”) in
respect of such increase, and each such U.S. Revolver Commitment Increase
Lender shall automatically and without further act be deemed to have assumed, a
portion of the participations of such Lender of U.S. 

 

53

 

Revolver Loan hereunder in
outstanding U.S. Letters of Credit and Swingline Loans to U.S. Borrower such
that, after giving effect to each such deemed assignment and assumption of
participations, the percentage of the aggregate outstanding (i) participations
hereunder in U.S. Letters of Credit and (ii) participations hereunder in
Swingline Loans held by each U.S. Revolver Lender (including each such U.S.
Revolver Commitment Increase Lender) shall equal the percentage of the
aggregate Revolving  Commitments of all
U.S. Revolver Lenders represented by such U.S. Revolver Lender’s Revolver
Commitment and (y) if, on the date of such increase, there are any U.S.
Revolver Loans outstanding, such U.S. Revolver Loans shall on or prior to the
effectiveness of such U.S. Revolver Commitment Increase be prepaid from the
proceeds of additional U.S. Revolver Loans made hereunder (reflecting such
increase in U.S. Revolver Commitments), which prepayment shall be accompanied
by accrued interest on the U.S. Revolver Loans being prepaid and any costs
incurred by any Lender in accordance with Section 3.9.

 

(g)           Upon each increase in the Canadian Revolver Commitments
pursuant to this Section 2.1.9,
(x) each Lender of Canadian Revolver Loans immediately prior to such
increase shall automatically and without further act be deemed to have assigned
to each Lender or New Canadian Lender providing a portion of the Commitment
Increase with respect to Canadian Revolver Loans (each a “Canadian Revolver
Commitment Increase Lender”) in respect of such increase, and each such
Canadian Revolver Commitment Increase Lender shall automatically and without
further act be deemed to have assumed, a portion of the participations of such
Lender of Canadian Revolver Loans hereunder in outstanding Canadian Letters of
Credit and Swingline Loans to Canadian Borrower such that, after giving effect
to each such deemed assignment and assumption of participations, the percentage
of the aggregate outstanding (i) participations hereunder in Canadian
Letters of Credit and (ii) participations hereunder in Swingline Loans
held by each Canadian Revolver Lender (including each such Canadian Revolver
Commitment Increase Lender) shall equal the percentage of the aggregate Revolving  Commitments of all Canadian Revolver Lenders
represented by such Canadian Revolver Lender’s Revolver Commitment and (y) if,
on the date of such increase, there are any Canadian Revolver Loans
outstanding, such Canadian Revolver Loans shall on or prior to the
effectiveness of such Canadian Revolver Commitment Increase be prepaid from the
proceeds of additional Canadian Revolver Loans made hereunder (reflecting such
increase in Canadian Revolver Commitments), which prepayment shall be
accompanied by accrued interest on the Canadian Revolver Loans being prepaid
and any costs incurred by any Lender or New Canadian Lender in accordance with Section 3.9.

 

(h)           The terms and provisions of Revolver Loans and Revolver
Commitments made following any Commitment Increase shall be identical to the
Revolver Loans and the Revolver Commitments made on the Closing Date.

 

(i)            No separate or additional Lender consent shall be
required under Section 14.1
in order to give effect to the Commitment Increases if consummated in accordance
with the terms of this Section 2.1.9.

 

2.2          [Reserved].

 

2.3          Letter
of Credit Facility.

 

2.3.1        Issuance of Letters of Credit  Subject to all of the terms and conditions
hereof, the Credit Parties agree to establish a letter of credit facility pursuant
to which the Applicable Agent shall cause the Applicable Issuing Bank to issue
Letters of Credit from time to time until thirty (30) days prior to the
Revolver Termination Date (or until the Commitment Termination Date, if
earlier), on the terms set forth herein, including the following:

 

54

 

(b)           Each Borrower acknowledges that the
Applicable Issuing Bank’s willingness to issue any Letter of Credit is
conditioned upon the Applicable Issuing Bank’s receipt of a LC Application with
respect to the requested Letter of Credit, as well as such other instruments
and agreements as the Applicable Issuing Bank may customarily require for
issuance of a letter of credit of similar type and amount.  The Applicable Issuing Bank shall have no
obligation to issue any Letter of Credit unless (i) the Applicable Issuing
Bank receives a LC Request and LC Application at least three (3) Business
Days prior to the requested date of issuance; and (ii) each LC Condition
is satisfied.  If the Applicable Agent
receives written notice from an Applicable Lender at least one (1) Business
Day before the issuance of a Letter of Credit that any LC Condition has not
been satisfied, the Applicable Agent shall have no obligation to cause the Applicable
Issuing Bank to issue the requested Letter of Credit (or any other) and the
Applicable Issuing Bank shall have no obligation to issue the requested Letter
of Credit (or any other) until such notice is withdrawn in writing by that
Applicable Lender or until the Required Borrower Group Lenders have waived such
condition in accordance with this Agreement. 
Prior to receipt of any such notice, the Applicable Issuing Bank shall
not be deemed to have knowledge of any failure of LC Conditions.

 

(c)           Letters of Credit may be requested by a Borrower only (i) to
support obligations of such Borrower incurred in the Ordinary Course of
Business; or (ii) for other purposes as the Applicable Agent and the
Applicable Lenders may approve from time to time in writing.  The renewal or extension of any Letter of
Credit shall be treated as the issuance of a new Letter of Credit, except that
delivery of a new LC Application shall be required at the discretion of the
Applicable Issuing Bank.  Each Letter of
Credit issued by an Issuing Bank for the account of a Borrower shall be deemed
to have been issued for the joint account of each Borrower within such Borrower’s
Borrower Group (each being referred to as an “LC Borrower” and
collectively as “LC Borrowers”) whether or not such other Borrowers have
executed any LC Documents, and each LC Borrower shall be jointly and severally
liable for the payment of all LC Obligations arising from or related to such
Letter of Credit.

 

(d)           LC Borrowers assume all risks of the acts, omissions or
misuses of any Letter of Credit by the beneficiary.  In connection with issuance of any Letter of
Credit, no Credit Party shall be responsible for the existence, character,
quality, quantity, condition, packing, value or delivery of any goods purported
to be represented by any Documents; any differences or variation in the
character, quality, quantity, condition, packing, value or delivery of any
goods from that expressed in any Documents; the form, validity, sufficiency,
accuracy, genuineness or legal effect of any Documents or of any endorsements
thereon; the time, place, manner or order in which shipment of goods is made;
partial or incomplete shipment of, or failure to ship, any goods referred to in
a Letter of Credit or Documents; any deviation from instructions, delay,
default or fraud by any shipper or other Person in connection with any goods,
shipment or delivery; any breach of contract between a shipper or vendor and an
LC Borrower; errors, omissions, interruptions or delays in transmission or delivery
of any messages, by mail, cable, telegraph, telex, telecopy, e-mail, telephone
or otherwise; errors in interpretation of technical terms; the misapplication
by a beneficiary of any Letter of Credit or the proceeds thereof; or any
consequences arising from causes beyond the control of any Issuing Bank, any
Agent or any Lender, including any act or omission of a Governmental
Authority.  The rights and remedies of
the Applicable Issuing Banks under the Loan Documents shall be cumulative.  Each of the Applicable Issuing Banks shall be
fully subrogated to the rights and remedies of each beneficiary whose claims
against LC Borrowers are discharged with proceeds of any Letter of Credit.

 

(e)           In connection with its administration of and enforcement
of rights or remedies under any Letters of Credit or LC Documents, the
Applicable Issuing Bank shall be entitled to act, and shall be fully protected
in acting, upon any certification, notice or other communication in whatever
form believed by the Applicable Issuing Bank, in good faith, to be genuine and
correct and to have been 

 

55

 

signed, sent or made by a
proper Person.  The Applicable Issuing
Bank may consult with and employ legal counsel, accountants and other experts
to advise it concerning its obligations, rights and remedies, and shall be
entitled to act upon, and shall be fully protected in any action taken in good
faith reliance upon, any advice given by such experts.  The Applicable Issuing Bank may employ agents
and attorneys-in-fact in connection with any matter relating to Letters of
Credit or LC Documents, and shall not be liable for the gross negligence or
willful misconduct of any such agents or attorneys-in-fact selected with
reasonable care.

 

(f)            Unless otherwise provided in any of
the LC Documents, each Letter of Credit shall be subject to the Uniform Customs
and Practices for Documentary Credits then in effect and any amendments or
revisions thereto.

 

2.3.2        Reimbursement; Participations.

 

(a)           If an Applicable Issuing Bank honors
any request for payment under a Letter of Credit, LC Borrowers in the
applicable Borrower Group shall pay to such Applicable Issuing Bank, in Dollars
or Canadian Dollars, as applicable, on the same day (“Reimbursement Date”),
the amount paid by the Applicable Issuing Bank under such Letter of Credit,
together with interest at the interest rate for U.S. Base Rate Revolver Loans
(or Canadian Prime Rate Revolver Loans, as applicable) from the Reimbursement
Date until payment by Borrowers within such Borrower Group.  The obligation of LC Borrowers within a
Borrower Group to reimburse the Applicable Issuing Bank for any payment made
under a Letter of Credit shall be absolute, unconditional, irrevocable, and
joint and several, and shall be paid without regard to any lack of validity or
enforceability of any Letter of Credit or the existence of any claim, setoff,
defense or other right that Borrowers within such Borrower Group may have at
any time against the beneficiary.  Until
the Applicable Issuing Bank has received payment from LC Borrowers in
accordance with the foregoing provisions of this subsection (a), such Issuing
Bank, in addition to all of its other rights and remedies under this Agreement
and any LC Application, shall be fully subrogated to the rights and remedies of
each beneficiary under such Letter of Credit whose claims against one or more
LC Borrowers have been discharged with the proceeds of such Letter of Credit.
Whether or not Borrower Agent submits a Notice of Borrowing, the LC Borrowers
shall be deemed to have requested a Borrowing of U.S. Base Rate Revolver Loans,
or Canadian Base Rate Loans or Canadian Prime Rate Loans, as applicable, in an
amount necessary to pay all amounts due Issuing Bank on any Reimbursement Date
and each Applicable Lender agrees to fund its Pro Rata share of such Borrowing
whether or not the Commitments have terminated, an Overadvance exists or is
created thereby, or the conditions in Section 6
are satisfied. LC Borrowers shall repay the Applicable Issuing Bank or the
Applicable Agent, as appropriate, with respect to each Letter of Credit in the
applicable currency as set forth in Section 2.3.4.

 

(b)           Upon issuance of a Letter of Credit, each Applicable
Lender shall be deemed to have irrevocably and unconditionally purchased from
the Applicable Issuing Bank, without recourse or warranty, an undivided Pro
Rata interest and participation in all LC Obligations relating to the Letter of
Credit.  If the Applicable Issuing Bank
makes any payment under a Letter of Credit and Borrowers do not reimburse such
payment on the Reimbursement Date, the Applicable Agent shall promptly notify
the Applicable Lenders and each Applicable Lender shall promptly (within one (1) Business
Day) and unconditionally pay to the Applicable Agent, for the benefit of the
Applicable Issuing Bank, the Applicable Lender’s Pro Rata share of such
payment.  Upon request by an Applicable
Lender, the Applicable Issuing Bank shall furnish copies of any Letters of
Credit and LC Documents in its possession at such time.

 

(c)           The obligation of each Applicable Lender to make payments
to the Applicable Agent for the account of the Applicable Issuing Bank in
connection with the Applicable Issuing Bank’s 

 

56

 

payment under a Letter of
Credit shall be absolute, unconditional and irrevocable, not subject to any
counterclaim, setoff, qualification or exception whatsoever, and shall be made
in accordance with this Agreement under all circumstances, irrespective of any
lack of validity or unenforceability of any Loan Documents; any draft,
certificate or other document presented under a Letter of Credit having been
determined to be forged, fraudulent, invalid or insufficient in any respect or
any statement therein being untrue or inaccurate in any respect; or the
existence of any setoff or defense that any Obligor may have with respect to
any Obligations.  No Issuing Bank assumes
any responsibility for any failure or delay in performance or any breach by any
LC Borrower or other Person of any obligations under any LC Documents.  No Issuing Bank makes to Lenders any express
or implied warranty, representation or guaranty with respect to the Collateral,
LC Documents or any Obligor.  No Issuing
Bank shall be responsible to any Lender for any recitals, statements,
information, representations or warranties contained in, or for the execution,
validity, genuineness, effectiveness or enforceability of any LC Documents; the
validity, genuineness, enforceability, collectibility, value or sufficiency of
any Collateral or the perfection of any Lien therein; or the assets,
liabilities, financial condition, results of operations, business,
creditworthiness or legal status of any Obligor.

 

(d)           No Issuing Bank Indemnitee shall be liable to any Lender
or other Person for any action taken or omitted to be taken in connection with
any LC Documents except as a result of its actual gross negligence or willful
misconduct.  No Applicable Issuing Bank
shall have any liability to any Lender if such Applicable Issuing Bank refrains
from any action under any Letter of Credit or LC Documents until it receives
written instructions from Required Borrower Group Lenders.

 

2.3.3        Cash Collateral.  If any LC Obligations, whether or not then
due or payable, shall for any reason be outstanding at any time (a) that
an Event of Default exists, (b) that U.S. Availability in the case of U.S.
Borrowers, or Canadian Availability in the case of Canadian Borrower, is less
than zero, or (c) after the Commitment Termination Date, then the LC
Borrowers for the applicable Borrower Group shall, at the Applicable Issuing
Bank’s or the Applicable Agent’s request, pay to the Applicable Agent, for the
benefit of itself and the Applicable Issuing Bank, the amount of all
outstanding LC Obligations owing by such Borrower Group and Cash Collateralize
all outstanding Letters of Credit issued at the request of such Borrower
Group.  If the LC Borrowers within a
Borrower Group fail to Cash Collateralize outstanding Letters of Credit as
required herein, the Applicable Lenders may (and shall upon direction of the
Applicable Agent) advance, as Revolver Loans, the amount of the Cash Collateral
required (whether or not the Commitments have terminated, an Overadvance
exists, or the conditions in Section 6
are satisfied) in the currency in which such Letter of Credit is
denominated.  Each LC Borrower hereby
pledges to each Applicable Agent and grants to such Agent a Lien upon, for the
benefit of such Agent in such capacity and for the Pro Rata benefit of the
Applicable Lenders, all Cash Collateral remitted by it and held in the Cash
Collateral Account from time to time, and all proceeds thereof, as security for
the payment of all Obligations of such LC Borrower (including LC Obligations),
whether or not then due and payable.

 

2.3.4        Currency Issues.  All payments to be made with reference to a
Letter of Credit and the LC Obligations payable in connection therewith shall
be made in the currency in which Borrowings may be made to such LC Borrower
under the Revolver Commitments, whether such payments are made by LC Borrowers
to the Applicable Issuing Bank, by LC Borrowers to an Agent, by LC Borrowers to
Indemnitees, by Lenders participating in the LC Obligations to an Applicable
Agent or Issuing Bank Indemnitees or by an Applicable Agent to Lenders
participating in the LC Obligations or by any other Person as provided in this Section 2.3.

 

2.3.5        Existing Letters of Credit.  As of the Closing Date, there exist certain
letters of credit issued by Bank of America for the account of one or more
Borrowers, as more fully described on 

 

57

 

Schedule
2.3.5 hereto (collectively, the “Existing Letters of
Credit”).  The parties hereto acknowledge
and agree that, concurrently with the making of the initial Loans hereunder,
such Existing Letters of Credit shall constitute Letters of Credit hereunder
for all purposes as fully as if such Existing Letters of Credit had been issued
as Letters of Credit hereunder.

 

2.4          Notice
of Availability Reserves.  Administrative Agent shall endeavor to give
notice to Borrower Agent of any reserves established or imposed by
Administrative Agent in its Credit Judgment in accordance with the definition
of Availability Reserve; provided, that, the failure of Administrative Agent to
give any such notice, or of Borrower Agent to receive any such notice, shall
not result in any liability to Administrative Agent or any Lender or in any way
condition Administrative Agent’s ability to establish or impose any such
reserves pursuant to the terms of this Agreement.

 

SECTION  3.      INTEREST, FEES
AND CHARGES

 

3.1          Interest.

 

3.1.1        Rates and Payment of Interest.

 

(b)           Except as otherwise provided in Section 3.1.5:

 

(i)           each U.S. Revolver
Loan that is a U.S. Base Rate Loan shall bear interest for the period
commencing with the funding thereof until paid (whether at stated maturity, on
acceleration or otherwise) at a rate per annum equal to the U.S. Base Rate in
effect from time to time plus the Applicable Margin with respect to the U.S.
Base Rate for U.S. Revolver Loans  as in
effect from time to time;

 

(ii)          each U.S. Revolver Loan that is a
LIBOR Loan shall bear interest for the period commencing with the funding
thereof and ending on the last day of the Interest Period with respect thereto
at a rate per annum equal to the Adjusted LIBOR determined for such Interest
Period plus the Applicable Margin with respect to LIBOR for U.S. Revolver Loans
as in effect from time to time;

 

(iii)         each Canadian Revolver Loan that is a
Canadian Prime Rate Loan shall bear interest for the period commencing with the
funding thereof until paid (whether at stated maturity, on acceleration or
otherwise) at a rate per annum equal to the Canadian Prime Rate in effect from
time to time plus the Applicable Margin with respect to the Canadian Prime Rate
for Canadian Revolver Loans as in effect from time to time;

 

(iv)         each Canadian Revolver Loan that is a
Canadian Base Rate Loan shall bear interest for the period commencing with the
funding thereof until paid (whether at stated maturity, on acceleration or
otherwise) at a rate per annum equal to the Canadian Base Rate for Canadian
Revolver Loans as in effect from time to time; and

 

(v)          each Canadian Revolver Loan that is a Canadian
BA Rate Loan or LIBOR Loan shall bear interest for the period commencing with
the date of funding thereof and ending on the last day of the Interest Period
with respect thereto at a rate per annum equal to the Canadian BA Rate or
Adjusted LIBOR in effect from time to time plus the Applicable Margin with
respect to the Canadian BA Rate or Adjusted LIBOR for Canadian Revolver Loans
as in effect from time to time.

 

58

 

(c)           Upon determining the Adjusted LIBOR
or the Canadian BA Rate for any Interest Period requested by Borrower Agent,
the Applicable Agent shall promptly notify Borrower Agent thereof by telephone
and, if so requested by Borrower Agent, confirm the same in writing.  Such determination shall, absent manifest
error, be final, conclusive and binding on all parties and for all
purposes.  The applicable rate of
interest for all Revolver Loans (or portions thereof) bearing interest based
upon the U.S. Base Rate or Canadian Prime Rate or Canadian Base Rate shall be
increased or decreased, as the case may be, by an amount equal to any increase
or decrease in the U.S. Base Rate or Canadian Prime Rate or Canadian Base Rate,
with such adjustments to be effective as of the opening of business on the day
on which any such change in the U.S. Base Rate or Canadian Prime Rate or
Canadian Base Rate becomes effective. 
Interest on each Loan shall accrue from and including the date on which
such Loan is made or converted to a Loan of another Type or continued as a Loan
of the same Type to (but excluding) the date of any repayment thereof; provided,
however, that, if a Revolver Loan is repaid on the same day made, one
day’s interest shall be paid on such Revolver Loan.  Interest on the Loans shall be payable in the
currency (i.e., Dollars or Canadian Dollars as the case may be) of the
underlying Loan.  The U.S. Base Rate on
the date hereof is 5.0% per annum and, therefore, the rate of interest in
effect on the date hereof, expressed in simple interest terms, is 5.25% per
annum for U.S. Base Rate Revolver Loans (other than those calculated on the
U.S. Fixed Asset Formula Amount), and 5.50% per annum for the Revolver Loans
constituting U.S. Base Rate Loans calculated on the U.S. Fixed Asset Formula
Amount.

 

(d)           During an Insolvency Proceeding with
respect to any Borrower, or the liquidation, dissolution or winding up of any
Borrower, or during any other Event of Default if Administrative Agent or
Required Lenders in their discretion so elect, Obligations shall bear interest
at the Default Rate as set forth in Section 3.1.5.

 

(e)           Interest accrued on the Loans shall be due and payable as
set forth in Section 5.4.  Interest accrued on any other Obligations
shall be due and payable as provided in the Loan Documents and, if no payment
date is specified, shall be due and payable on
demand.  Notwithstanding the
foregoing, interest accrued at the Default Rate shall be due and payable on  demand.

 

3.1.2        Application of Adjusted LIBOR or
Canadian BA Rate to Outstanding Loans.

 

(a)           Borrowers may on any Business Day,
subject to delivery of a Notice of Conversion/Continuation, elect to convert
any portion of the U.S. Base Rate Loans (or Canadian Prime Rate Loans or
Canadian Base Rate Loans, as applicable) to, or to continue any LIBOR Loan (or
Canadian BA Rate Loan, as applicable) at the end of its Interest Period as, a
LIBOR Loan (or Canadian BA Rate Loan, as applicable).  During any Default or Event of Default, Administrative
Agent may (and shall at the direction of Required Lenders) declare that no Loan
may be made, converted or continued as a LIBOR Loan (or Canadian BA Rate Loan,
as applicable).

 

(b)           Whenever U.S. Borrowers desire to convert Loans to, or
continue Loans as, LIBOR Loans, Borrower Agent shall give the Administrative
Agent a Notice of Conversion/Continuation, no later than 11:00 a.m.
(prevailing time in the location of the Appropriate Notice Office) at least
three (3)  Business Days before the requested conversion or continuation
date.  Whenever Canadian Borrower desires
to convert Loans to, or continue Loans as, LIBOR Loans (or Canadian BA Rate
Loans, as applicable), Borrower Agent shall give the Canadian Agent a Notice of
Conversion/Continuation, no later than 11:00 a.m. (prevailing time in the
location of the Appropriate Notice Office) at least three (3)  Business
Days before the requested conversion or continuation date.  Promptly after receiving any such notice, the
Applicable Agent shall notify each Applicable Lender thereof.  Each Notice of Conversion/Continuation shall
be irrevocable, and shall specify the aggregate principal amount of Loans to be
converted or continued, the conversion or continuation date (which shall 

 

59

 

be a Business Day), and the
duration of the Interest Period (which shall be deemed to be one month if not
specified).  If, upon the expiration of
any Interest Period in respect of any LIBOR Loans (or Canadian BA Rate Loans, as
applicable), Borrowers shall have failed to deliver a Notice of
Conversion/Continuation, they shall be deemed to have elected to convert such
Loans into U.S. Base Rate Loans (or Canadian Prime Rate Loans or Canadian Base
Rate Loans, as applicable).

 

3.1.3        Interest Periods.  In connection with the making, conversion or
continuation of any LIBOR Loans (or Canadian BA Rate Loans, as applicable),
Borrowers shall select an interest period (“Interest Period”) to apply, which
interest period shall be one, two, three or six months; provided, however, that:

 

(b)           the Interest Period shall commence on
the date the Loan is made or continued as, or converted into, a LIBOR Loan (or
Canadian BA Rate Loan, as applicable), and shall expire on the numerically
corresponding day in the calendar month at its end;

 

(c)           if any Interest Period commences on a day for which there
is no corresponding day in the calendar month at its end or if such
corresponding day falls after the last Business Day of such month, then the
Interest Period shall expire on the last Business Day of such month; and if any
Interest Period would expire on a day that is not a Business Day, the period
shall expire on the next Business Day; and

 

(d)           no Interest Period shall extend beyond the Revolver
Termination Date.

 

3.1.4        Interest Rate Not Ascertainable.   If the Applicable Agent shall determine in
good faith that on any date for determining Adjusted LIBOR, due to any
circumstance affecting the London interbank market or for determining Canadian
BA Rate Loans, adequate and fair means do not exist for ascertaining such rate
on the basis provided herein, then the Applicable Agent shall immediately
notify Borrower Agent of such determination. 
Until the Applicable Agent notifies Borrower Agent that such circumstance
no longer exists, the obligation of the Applicable Lenders to make LIBOR Loans
or Canadian BA Rate Loans shall be suspended, and no further Loans may be
converted into or continued as LIBOR Loans or Canadian BA Rate Loans.

 

3.1.5        Default Rate of Interest.   Borrowers within a Borrower Group shall pay
interest at a rate per annum equal to the Default Rate (i) with respect to
any portion of the principal amount of the Borrower Group Obligations of such
Borrower Group (and, to the extent permitted by Applicable Law, all past due
interest thereon) that is not paid on the due date thereof (whether due at
stated maturity, on demand, upon acceleration or otherwise) until Full Payment
thereof; (ii) with respect to the principal amount of such Borrower Group
Obligations (and, to the extent permitted by Applicable Law, all past due
interest thereon) upon the earlier to occur of (x) Borrower Agent’s
receipt of notice from the Applicable Agent of the Required Borrower Group
Lenders’ election to charge the Default Rate based upon the existence of an
Event of Default (which notice the Applicable Agent shall send at the direction
of the Required Borrower Group Lenders), whether or not acceleration or demand
for payment of such Borrower Group Obligations has been made, or (y) the
commencement by or against any Borrower of that Borrower Group of an Insolvency
Proceeding, or the liquidation, dissolution or winding up of any Borrower,
whether or not under the circumstances described in clauses (i) or (ii) hereof
the Applicable Lenders elect to accelerate the maturity or demand payment of
any of the Obligations; and (iii) with respect to the principal amount of
any Overadvance Loans owing by a Borrower Group (unless otherwise agreed in
writing by the Required Borrower Group Lenders), whether or not demand for
payment thereof has been made by the Applicable Agent.  To the fullest extent permitted by Applicable
Law, the Default Rate shall apply and accrue on any judgment entered with
respect to any of the Borrower Group 

 

60

 

Obligations and to the
unpaid principal amount of the Borrower Group Obligations during any Insolvency
Proceeding, or the liquidation, dissolution or winding up of a Borrower within
such Borrower Group.  Each Borrower
acknowledges that the cost and expense to each Agent and Lender attendant upon
the occurrence of an Event of Default are difficult to ascertain or estimate
and that the Default Rate is a fair and reasonable estimate to compensate
Administrative Agent and Lenders for such added cost and expense.  Interest accrued at the Default Rate shall be
due and payable on demand (unless otherwise agreed to by the Administrative
Agent in writing).

 

3.2          Fees

 

3.2.1        Closing Fee   Borrowers shall pay to Administrative Agent,
for the Pro Rata benefit of the Lenders, the closing fee described in the Fee
Letter, which shall be paid on the Closing Date.

 

3.2.2        Unused Line Fees   U.S. Borrowers shall pay to Administrative
Agent, for the Pro Rata benefit of U.S. Lenders, (i) if the average daily
balance of U.S. Revolver Loans and stated amount of U.S. Letters of Credit
equals or exceeds 50% of the U.S. Revolver Commitments during the immediately
preceding month, a fee equal to 0.25% per annum times the amount by which the
Borrower Group Commitments for U.S. Revolver Loans exceed the average daily
balance of U.S. Revolver Loans and stated amount of U.S. Letters of Credit
during such month, and (ii) if the average daily balance of U.S. Revolver
Loans and stated amount of Letters of Credit is less than 50% of the U.S.
Revolver Commitments during the immediately preceding month, a fee equal to
0.375% per annum times the amount by which the U.S. Revolver Commitments exceed
the average daily balance of U.S. Revolver Loans and stated amount of U.S.
Letters of Credit during such month. 
Canadian Borrower shall pay to Canadian Agent, for the Pro Rata benefit
of Canadian Lenders, (i) if the average daily balance of Canadian Revolver
Loans and stated amount of Canadian Letters of Credit equals or exceeds 50% of
the Canadian Revolver Commitments during the immediately preceding month, a fee
equal to 0.25% per annum times the amount by which the Borrower Group
Commitments for Canadian Revolver Loans exceed the average daily balance of
Canadian Revolver Loans and stated amount of Canadian Letters of Credit during
such month, and (ii) if the average daily balance of Canadian Revolver
Loans and stated amount of Letters of Credit is less than 50% of the Canadian
Revolver Commitments during the immediately preceding month, a fee equal to
0.375% per annum times the amount by which the Canadian Revolver Commitments
exceed the average daily balance of Canadian Revolver Loans and stated amount
of Canadian Letters of Credit during such month.  Such fees shall be payable in arrears, on the
first Business Day of each month and on the Commitment Termination Date.

 

3.2.3        LC Facility Fees   U.S. Borrowers shall pay (a) to
Administrative Agent, for the Pro Rata benefit of U.S. Lenders, a fee equal to
the Applicable Margin in effect for LIBOR Loans times the average daily stated
amount of U.S. Letters of Credit, which fee shall be payable monthly in
arrears, on the first Business Day of each month; (b) to Administrative
Agent, for its own account, a fronting fee equal to 0.125% of the stated amount
of each U.S. Letter of Credit, which fee shall be payable upon issuance of the
U.S. Letter of Credit and on each anniversary date of such issuance, and shall
be payable on any increase in stated amount made between any such dates; and (c) to
U.S. Issuing Bank, for its own account, all customary charges associated with
the issuance, amending, negotiating, payment, processing, transfer and
administration of Letters of Credit, which charges shall be paid as and when
incurred. Canadian Borrower shall pay (a) to Canadian Agent, for the Pro
Rata benefit of Canadian Lenders, a fee equal to the Applicable Margin in
effect for LIBOR Loans times the average daily stated amount of Canadian
Letters of Credit, which fee shall be payable monthly in arrears, on the first
Business Day of each month; (b) to Canadian Agent, for its own account, a
fronting fee equal to 0.125% of the stated amount of each Canadian Letter of
Credit, which fee shall be payable upon issuance of the Canadian 

 

61

 

Letter of Credit and on each
anniversary date of such issuance, and shall be payable on any increase in
stated amount made between any such dates; and (c) to Canadian Issuing
Bank, for its own account, all customary charges associated with the issuance,
amending, negotiating, payment, processing, transfer and administration of
Letters of Credit, which charges shall be paid as and when incurred. During an
Event of Default, the fees payable under each clause (a) of this Section 3.2.3 may be increased to
reflect the charging of the Default Rate.

 

3.2.4        Administrative Agent Fees   In consideration of Administrative Agent’s
syndication of the Commitments and service as Administrative Agent hereunder,
Borrowers shall pay to Administrative Agent, for its own account, the fees
described in the Fee Letter.

 

3.3          Computation
of Interest, Fees, Yield Protection.   All
interest, as well as fees and other charges calculated on a per annum basis,
shall be computed for the actual days elapsed, based on a year of three hundred
sixty (360) days, except that if based on U.S. Base Rate Loans, Canadian Base
Rate Loans, Canadian Prime Rate Loans or Canadian BA Rate Loans, on the basis
of a 365 day year.  Each determination by
Agents of any interest, fees or interest rate hereunder shall be final,
conclusive and binding for all purposes, absent manifest error.  All fees shall be fully earned when due and
shall not be subject to rebate or refund, nor subject to proration except as
specifically provided herein.  All fees
payable under Section 3.2 are
compensation for services and are not, and shall not be deemed to be, interest
or any other charge for the use, forbearance or detention of money.  For the purposes of the Interest Act
(Canada), (i) whenever any interest under this Agreement is calculated
using a rate based on a year of 365 days, the rate determined pursuant to such
calculation, when expressed as an annual rate, is equivalent to (x) the
applicable rate based on a year of 365 days, (y) multiplied by the actual
number of days in the calendar year in which the period for which such interest
is payable (or compounded) ends, and (z) divided by 365, (ii) the
principle of deemed reinvestment of interest does not apply to any interest
calculation under this Agreement, and (iii) the rates of interest
stipulated in this Agreement are intended to be nominal rates and not effective
rates or yields.  A certificate as to
amounts payable by Borrowers under Section 3.4,
3.6, 3.7, 3.9 or 5.8,
submitted to Borrowers by Administrative Agent or the affected Lender, as
applicable, shall be final, conclusive and binding for all purposes, absent
manifest error.

 

3.4          Reimbursement
Obligations.   Borrowers shall reimburse Agents for, without
duplication, (a) Agent’s (and, to the extent applicable, Lenders’)
Extraordinary Expenses; and (b) all reasonable legal, accounting,
appraisal, consulting and other fees, costs and expenses incurred by Agents in
connection with (i) negotiation and preparation of any Loan Documents,
including any amendment or other modification thereof; (ii) administration
of and actions relating to any Collateral, Loan Documents and transactions
contemplated thereby, including any actions taken to perfect or maintain
priority of Agents’ Liens on any Collateral, to maintain any insurance required
hereunder or to verify Collateral pursuant to Section 14.5;
and (iii) subject to the limits of Section 10.1.1(b),
each inspection, audit or appraisal with respect to any Obligor or Collateral,
whether prepared by Agents’ personnel or a third party.  All amounts reimbursable by Borrowers under
this Section shall constitute Obligations secured by the Collateral and
shall be payable on demand (except
to the extent a Revolver Loan has been extended by the Lenders for the payment
of such amounts, or as otherwise provided for pursuant to this Agreement or any
other relevant Loan Document).

 

3.5          Illegality.   Notwithstanding anything to the contrary
herein, if (a) any Change in Law has made it unlawful for a Lender to make
or maintain an Interest Period Loan or to maintain any Commitment with respect
to an Interest Period Loan or (b) a Lender determines that the making or
continuance of an Interest Period Loan has become impracticable as a result of
a circumstance that adversely affects the London interbank market then such
Lender shall give notice thereof to Agents and Borrowers and may (i) declare
that Interest Period Loans of the affected Type will not thereafter be made 

 

62

 

by such Lender, whereupon
any request for an Interest Period Loan from such Lender shall be deemed to be
a request for a Floating Rate Loan or, if applicable an Interest Period Loan of
a different Type, unless such Lender’s declaration has been withdrawn (and it
shall be withdrawn promptly upon cessation of the circumstances described in
clause (a) or (b) above); and/or (ii) require that all
outstanding Interest Period Loans of the affected Type made by such Lender be
converted to Floating Rate Loan or, if applicable an Interest Period Loan of a
different Type, immediately, in which event all outstanding Interest Period
Loans of such Lender shall be immediately converted to Floating Rate Loan or,
if applicable, an Interest Period Loan of a different Type.

 

3.6          Increased
Costs.   If, by reason of (a) any Change in Law
(including any change by way of imposition or increase of Statutory Reserves or
other reserve requirements) or interpretation thereof, or (b) the
compliance with any guideline or request from any Governmental Authority or
other Person exercising control over banks or financial institutions generally
(whether or not having the force of law):

 

(i)          a Lender shall be
subject to any Tax (other than Excluded Taxes) with respect to any Interest
Period Loan or Letter of Credit or its obligation to make Interest Period
Loans, issue Letters of Credit or participate in LC Obligations, or a change
shall result in the basis of taxation of any payment to a Lender (other than in
respect of Excluded Taxes) with respect to a Lender’s Interest Period Loans or
its obligation to make Interest Period Loans, issue Letters of Credit or
participate in LC Obligations; or

 

(ii)         any reserve
(including any imposed by the Board of Governors or any other applicable
Governmental Authority), special deposits or similar requirement against assets
of, deposits with or for the account of, or credit extended by, a Lender or
Issuing Bank shall be imposed or deemed applicable, or any other condition
affecting a Lender’s Interest Period Loans or obligation to make Interest
Period Loans, or participate in LC Obligations, or an Issuing Bank’s obligation
to issue Letters of Credit, shall be imposed on such Lender or  such Issuing Bank or the London interbank
market;

 

and as a result there shall
be an increase in the cost to such Lender or Issuing Bank of agreeing to make
or making, funding or maintaining Interest Period Loans, Letters of Credit or
participations in LC Obligations (except to the extent already included in
determination of the Adjusted LIBOR or Canadian BA Rate for Interest Period
Loans), or there shall be a reduction in the amount receivable by such Lender
or such Issuing Bank, then the Lender or Issuing Bank shall promptly notify
Borrowers and Agents of such event, and Borrowers shall, within five (5) days
following demand therefor, pay such Lender or such Issuing Bank the amount of
such increased costs or reduced amounts.

 

If a Lender or Issuing Bank
determines that, because of circumstances described above or any other
circumstances arising hereafter affecting such Lender or such Issuing Bank, the
London interbank market or the Lender’s or Issuing Bank’s position in such
market, the Adjusted LIBOR or Canadian BA Rate or its respective Applicable
Margin, as applicable, will not adequately and fairly reflect the cost to such
Lender of funding Interest Period Loans or participating in LC Obligations, or
the cost to such Issuing Bank of issuing Letters of Credit, then (A) the
Lender or Issuing Bank shall promptly notify Borrowers and Agents of such
event; (B) such Lender’s obligation to make Interest Period Loans or
participate in LC Obligations, or such Issuing Bank’s obligation to issue
Letters of Credit, shall be immediately suspended, until each condition giving
rise to such suspension no longer exists; and (C) such Lender shall make a
Floating Rate Loan as part of any requested Borrowing of Interest Period Loans,
which Floating Rate Loan shall, for all purposes, be considered part of such
Borrowing.

 

63

 

Notwithstanding anything
herein to the contrary, Borrowers shall only be required to compensate any
Lender or Issuing Bank in respect of any such increased costs or reduction in
the amount received or receivable by such Lender or Issuing Bank to the extent
Borrower has received a written request for such compensation within ninety
(90) days after such Lender or Issuing Bank has received actual notice of the
occurrence of the relevant circumstance giving rise to such increased costs or
reduction in the amount received or receivable by such Lender or Issuing Bank,
as the case may be.

 

3.7          Capital
Adequacy

 

3.7.1        Change in Law.   If any
Change in Law shall:

 

(b)           impose modify or deem applicable any
reserve, special deposit, compulsory loan, insurance charge or similar
requirement against assets of, deposits with or for the account of, or credit
extended or participated in by, any Lender (except any reserve requirement
reflected in LIBOR or the Canadian BA Rate) or Issuing Bank;

 

(c)           impose on any Lender or Issuing Bank or the London
interbank market any other condition, cost or expense affecting any Loan, Loan
Document, Letter of Credit or participation in LC Obligations; and the result
thereof shall be to increase the cost to such Lender of making or maintaining
any Interest Period Loan (or of maintaining its obligation to make any such
Loan), or to increase the cost to such Lender or Issuing Bank of participating
in, issuing or maintaining any Letter of Credit (or of maintaining its
obligation to participate in or to issue any Letter of Credit), or to reduce
the amount of any sum received or receivable by such Lender or Issuing Bank
hereunder (whether of principal, interest or any other amount) then, upon
request of such Lender or Issuing Bank, Borrowers to which such Credit Party
has Borrower Group Commitments will pay to such Lender or Issuing Bank, as
applicable, such additional amount or amounts as will compensate such Lender or
Issuing Bank, as applicable, for such additional costs incurred or reduction
suffered.

 

3.7.2        Capital Adequacy.   If any
Lender or Issuing Bank determines that any Change in Law affecting such Lender
or Issuing Bank or any Lending Office of such Lender or Issuing Bank or such
Lender’s or Issuing Bank’s holding company, if any, regarding capital
requirements has or would have the effect of reducing the rate of return on
such Lender’s, Issuing Bank’s or holding company’s capital as a consequence of
this Agreement, or such Lender’s or Issuing Bank’s Commitments, Loans, Letters
of Credit or participations in LC Obligations, to a level below that which such
Lender, Issuing Bank or holding company could have achieved but for such Change
in Law (taking into consideration such Lender’s, Issuing Bank’s and holding
company’s policies with respect to capital adequacy), then from time to time
Borrowers to which such Credit Party has Borrower Group Commitments will pay to
such Lender or Issuing Bank, as the case may be, such additional amount or
amounts as will compensate it or its holding company for any such reduction
suffered.

 

3.7.3        Compensation.   Failure
or delay on the part of any Lender or Issuing Bank to demand compensation
pursuant to this Section shall not constitute a waiver of its right to
demand such compensation, but Borrowers of a Borrower Group shall not be
required to compensate a Lender to such Borrower Group or Issuing Bank for any
increased costs incurred or reductions suffered more than nine months prior to
the date that the Lender or Issuing Bank notifies Borrower Agent of the Change
in Law giving rise to such increased costs or reductions and of such Lender’s
or Issuing Bank’s intention to claim compensation therefor (except that, if the
Change in Law giving rise to such increased costs or reductions is retroactive,
then the nine-month period referred to above shall be extended to include the
period of retroactive effect thereof).

 

64

 

Notwithstanding anything
herein to the contrary, Borrowers shall only be required to compensate any
Lender in respect of any reduction in the return of capital of Lenders to the
extent Borrowers have received a written request for such compensation within
ninety (90) days after such Lender has received actual notice of the occurrence
of the relevant circumstance giving rise to such reduction in the return of
capital of such Lender.

 

3.8          Mitigation.   Each
Lender and Issuing Bank agrees that, upon becoming aware that any of Sections 3.5, 3.6, 3.7 or 5.10 apply (or will or may apply), it will (i) take
reasonable measures to reduce Borrowers’ obligations under such Sections,
including funding or maintaining its Borrower Group Commitments or Loans
through another office, as long as use of such measures would not adversely
affect the Lender’s or Issuing Bank’s Commitments, Loans, business or
interests, and would not be inconsistent with any internal policy or applicable
legal or regulatory restriction or (ii) take such other reasonable
measures (including seeking all reasonably identifiable available refunds of
any Taxes in respect of which additional amounts have been paid pursuant to Section 5.10), if, as a result
thereof, the circumstances which would relieve Borrowers from their obligations
to pay such additional amounts (or reduce the amount of such payments), or such
withholding taxes would be reduced or refunded, and if the making, funding or
maintaining of such Commitment or Loans through such other lending office or in
accordance with such other measures, as the case may be, would not otherwise materially
adversely affect such Commitment or Loans or the interests of such Lender or
Issuing Bank.

 

3.9          Funding
Losses.   If for any reason (other than default by a
Lender) (a) any Borrowing of, or conversion to or continuation of, an
Interest Period Loan does not occur on the date specified therefor in a Notice
of Borrowing or Notice of Conversion/Continuation (whether or not withdrawn), (b) any
repayment or conversion of an Interest Period Loan occurs on a day other than
the end of its Interest Period, or (c) Borrowers within a Borrower Group
fail to repay an Interest Period Loan when required hereunder, then such
Borrowers with respect to such Interest Period Loans shall pay to the
Applicable Agent for the ratable benefit of the affected Lenders, within 10
days after Agent’s or an affected Lender’s demand therefor, an amount (if a
positive number) computed pursuant to the following formula:

 

L =  (R - T) x P x D
           360

 

where

 

L =          amount payable

 

R =          interest rate applicable to the Interest Period Loan (i) requested
but not borrowed, continued or converted; (ii) prepaid; or (iii) not
paid

 

T =          effective interest rate per annum at which any readily
marketable bond or other obligations of the United States, selected at the
Applicable Agent’s sole discretion, maturing on or nearest the last day of the
then applicable or requested Interest Period for such Interest Period Loan and
in approximately the same amount as such Interest Period Loan, can be purchased
by the Applicable Agent on the day of such payment of principal or failure to
borrow

 

P =          the principal amount of the Interest Period Loan (i) requested
but not borrowed, continued or converted; (ii) prepaid; or (iii) not
paid

 

65

 

D =          the number of days remaining in the Interest Period as of
the date of such prepayment or failure to borrow or pay

 

Borrowers shall pay such
amount upon presentation by Agent of a statement setting forth in reasonable
detail the amount, Agent’s calculation thereof pursuant hereto, and the basis
for requesting such amount under this Agreement, which statement shall be
deemed true and correct absent manifest error.  
Lenders shall not be required to purchase Dollar deposits in the London
interbank market or any other offshore Dollar market to fund any Interest
Period Loan, but the provisions hereof shall be deemed to apply as if each
Lender had purchased such deposits to fund its Interest Period Loans.

 

3.10        Maximum
Interest.

 

3.10.2      In no event shall interest, charges or
other amounts that are contracted for, charged or received by Agents and
Lenders pursuant to any Loan Documents and that are deemed interest under
Applicable Law (“interest”) exceed the highest rate permissible under
Applicable Law (“maximum rate”). 
If, in any month, any interest rate, absent the foregoing limitation,
would have exceeded the maximum rate, then the interest rate for that month
shall be the maximum rate and, if in a future month, that interest rate would
otherwise be less than the maximum rate, then the rate shall remain at the
maximum rate until the amount of interest actually paid equals the amount of
interest which would have accrued if it had not been limited by the maximum
rate.  If, upon Full Payment of the
Obligations, the total amount of interest actually paid under the Loan
Documents is less than the total amount of interest that would, but for this
Section, have accrued under the Loan Documents, then Borrowers shall, to the
extent permitted by Applicable Law, pay to the Applicable Agent, for the
account of the Applicable Lenders, (a) the lesser of (i) the amount
of interest that would have been charged if the maximum rate had been in effect
at all times, or (ii) the amount of interest that would have accrued had
the interest rate otherwise set forth in the Loan Documents been in effect,
minus (b) the amount of interest actually paid under the Loan
Documents.  If a court of competent
jurisdiction determines that any Agent or any Lender has received interest in
excess of the maximum amount allowed under Applicable Law, such excess shall be
deemed received on account of, and shall automatically be applied to reduce,
Obligations other than interest (regardless of any erroneous application
thereof by any Agent or any Lender), and upon Full Payment of the Obligations,
any balance shall be refunded to Borrowers. 
In determining whether any excess interest has been charged or received
by any Agent or any Lender, all interest at any time charged or received from
Borrowers in connection with the Loan Documents shall, to the extent permitted
by Applicable Law, be amortized, prorated, allocated and spread in equal parts
throughout the full term of the Obligations.

 

3.10.3      Without limiting the generality of the
foregoing provisions, if any provision of any of the Loan Documents would
obligate Canadian Borrower to make any payment of interest with respect to the
Canadian Obligations in an amount or calculated at a rate which would be
prohibited by Applicable Law or would result in the receipt of interest with respect
to the Canadian Obligations at a criminal rate (as such terms are construed
under the Criminal Code (Canada)), then notwithstanding such provision, such
amount or rates shall be deemed to have been adjusted with retroactive effect
to the maximum amount or rate of interest, as the case may be, as would not be
so prohibited by law or so result in a receipt by the applicable recipient of
interest with respect to the Canadian Obligations at a criminal rate, such
adjustment to be effected, to the extent necessary, as follows:  (i) first, by reducing the amount or
rates of interest required to be paid to the applicable recipient under the
Loan Documents; and (ii) thereafter, by reducing any fees, commissions,
premiums and other amounts required to be paid to the applicable recipient
which would constitute interest with respect to the Canadian Obligations for
purposes of Section 347 of the Criminal Code (Canada).  Notwithstanding the foregoing, and after
giving effect to all adjustments contemplated thereby, if the applicable
recipient shall have received an amount in excess 

 

66

 

of the maximum permitted by
that section of the Criminal Code (Canada), then Canadian Borrower shall be
entitled, by notice in writing to Canadian Agent, to obtain reimbursement from
the applicable recipient in an amount equal to such excess, and pending such
reimbursement, such amount shall be deemed to be an amount payable by the
applicable recipient to Canadian Borrower. 
Any amount or rate of interest with respect to the Canadian Obligations
referred to in this Section 3.10.2
shall be determined in accordance with generally accepted actuarial practices
and principles as an effective annual rate of interest over the term that any
Canadian Revolver Loans to Canadian Borrower remains outstanding on the
assumption that any charges, fees or expenses that fall within the meaning of “interest”
(as defined in the Criminal Code (Canada)) shall, if they relate to a specific
period of time, be pro rated over that period of time and otherwise be pro
rated over the period from the Closing Date to the date of Full Payment of the
Canadian Obligations, and, in the event of a dispute, a certificate of a Fellow
of the Canadian Institute of Actuaries appointed by Canadian Agent shall be
conclusive for the purposes of such determination.

 

SECTION 4.        LOAN ADMINISTRATION

 

4.1                              Manner of Borrowing and Funding Revolver Loans

 

4.1.1        Notice of Borrowing

 

(a)           Whenever Borrowers within a Borrower
Group desire funding of a Borrowing under Section 2.1,
Borrower Agent shall give the Applicable Agent a Notice of Borrowing, subject
to Section 4.1.4.  Such notice must be received by the
Applicable Agent no later than 12:00 noon (prevailing time in the location of
the Appropriate Notice Office) (i) on the Business Day of the requested
funding date, in the case of Floating Rate Loans, and (ii) at least three (3) 
Business Days prior to the requested funding date, in the case of Interest
Period Loans.  Notices received after 12:00
noon (prevailing time in the location of the Appropriate Notice Office) shall
be deemed received on the next Business Day. 
Each Notice of Borrowing shall be irrevocable (unless waived by the
Administrative Agent in writing) and shall specify (A) the principal
amount of the Borrowing, (B) the requested funding date (which must be a
Business Day), (C) whether the Borrowing is to be made as Floating Rate
Loans or Interest Period Loans, (D) in the case of Interest Period Loans,
the duration of the applicable Interest Period (which shall be deemed to be one
month if not specified), and (E) the currency in which such Loans are to
be denominated.

 

(b)           Unless payment is otherwise timely made by Borrowers
within a Borrower Group, the becoming due of any amount required to be paid
with respect to any of the Borrower Group Obligations of such Borrower Group
(whether principal, interest, fees or other charges, including Extraordinary
Expenses, LC Obligations, Cash Collateral and Bank Product Debt) shall be
deemed irrevocably to be a request for Revolver Loans under the Borrower Group
Commitment of such Borrower Group on the due date, in the amount of such
Obligations and shall bear interest at the per annum rate applicable hereunder
to Floating Rate Loans under the Borrower Group Commitment of such Borrower
Group.  The proceeds of such Revolver
Loans shall be disbursed as direct payment of the relevant Obligation.

 

(c)           If Borrowers within a Borrower Group establish a
controlled disbursement account with Bank of America or any branch or affiliate
of Bank of America, then the presentation for payment of any check or other
item of payment drawn on such account at a time when there are insufficient
funds to cover it shall be deemed to be a request for Revolver Loans under the
Borrower Group Commitment of such Borrower Group on the date of such
presentation, in the amount of the check and items presented for payment and
shall bear interest at the per annum rate applicable hereunder to Floating Rate
Loans under the Borrower Group Commitment of such Borrower Group.  The proceeds of 

 

67

 

such Revolver Loans may be
disbursed directly to the controlled disbursement account or other appropriate
account.

 

(d)           Neither Administrative Agent nor any Lender shall have any
obligation to Borrowers to honor any deemed request for a Revolver Loan on or
after the Commitment Termination Date, when an Overadvance exists or would
result therefrom, or when any condition in Section 6
is not satisfied, but may do so in their discretion (or to the extent they are
otherwise required to do so by Administrative Agent pursuant to the terms of Section 2.1.7), without being deemed
to have waived any Default or Event of Default.

 

4.1.2        Fundings by Lenders.   Each
Applicable Lender shall timely honor its Borrower Group Commitment by funding
its Pro Rata share of each Borrowing of Revolver Loans that is properly
requested hereunder.  Except for
Borrowings to be made as Swingline Loans, the Applicable Agent shall endeavor
to notify the Applicable Lenders of each Notice of Borrowing (or deemed request
for a Borrowing) by 1:30 p.m. (prevailing time in the location of the
Appropriate Notice Office) on the proposed funding date for Floating Rate Loans
or by 3:00 p.m. (prevailing time in the location of the Appropriate Notice
Office) at least three (3)  Business Days before any proposed funding of
Interest Period Loans.  Each Applicable
Lender shall fund to the Applicable Agent such Lender’s Pro Rata share of the
Borrowing to the account specified by the Applicable Agent in immediately
available funds not later than 3:00 p.m. (prevailing time in the location
of the Appropriate Notice Office) on the requested funding date, unless the
Applicable Agent’s notice is received after the times provided above, in which
event each Applicable Lender shall fund its Pro Rata share by 1:30 p.m.
(prevailing time in the location of the Appropriate Notice Office) on the next
Business Day.  Subject to its receipt of
such amounts from the Applicable Lenders, the Applicable Agent shall disburse
the proceeds of the Revolver Loans to Borrowers within such Borrower Group as
directed by Borrower Agent.  Unless the
Applicable Agent shall have received (in sufficient time to act) written notice
from an Applicable Lender that it does not intend to fund its Pro Rata share of
a Borrowing, the Applicable Agent may assume that such Applicable Lender has
deposited or promptly will deposit its share with the Applicable Agent, and the
Applicable Agent may disburse a corresponding amount to Borrowers with the
Borrower Group.  If an Applicable Lender’s
share of any Borrowing is not in fact received by the Applicable Agent, then
Borrowers within the Borrower Group agree to repay to the Applicable Agent on
demand the amount of such share, together with interest thereon from the date
disbursed until repaid, at the rate applicable to such Borrowing.

 

4.1.3        Swingline Loans; Settlement.

 

(a)           The Applicable Swingline Lender shall
advance Swingline Loans to Borrowers under the applicable Borrower Group for
which such Applicable Swingline Lender makes Swingline Loans in each case upon
a Notice of Borrowing from Borrower Agent received by the Applicable Agent and
the Applicable Swingline Lender not later than 3:00 p.m. Atlanta time for
U.S. Borrowers and 12:00 noon, Atlanta time for Canadian Borrower, on the
Business Day on which such Swingline Loan is requested, up to an aggregate
outstanding amount of $25,000,000 plus any Overadvance permitted to remain
outstanding or any Overadvance Loans made under Section 2.1.7 (provided  that, with respect
to Swingline Loans made to U.S. Borrowers, such Swingline Loans shall not
exceed $20,000,000 in the aggregate at any time, and with respect to Swingline
Loans made to Canadian Borrower, such Swingline Loans shall not exceed
$5,000,000  in
the aggregate at any time in the case of each of the foregoing plus any
Overadvance permitted to remain outstanding or any Overadvance Loans made under
Section 2.1.7), unless the
funding is specifically required to be made by all Lenders hereunder.  Each Swingline Loan shall constitute a
Revolver Loan for all purposes, except that payments thereon shall be made to
the Applicable Swingline Lender for its own account.  The obligation of Borrowers to repay
Swingline Loans 

 

68

 

shall be evidenced by the
records of the Applicable Swingline Lenders and need not be evidenced by any
promissory note.

 

(b)           To facilitate administration of the Revolver Loans,
Lenders and Agents agree (which agreement is solely among them, and not for the
benefit of or enforceable by any Borrower) that settlement among them with
respect to Swingline Loans and other Revolver Loans to each Borrower Group may
take place periodically on a date determined from time to time by the
Applicable Agent, but which shall occur at least once every five (5) Business
Days with respect to Swingline Loans made to the U.S. Borrowers and every ten (10) Business
Days with respect to Swingline Loans made to Canadian Borrower.  On each settlement date, settlement shall be
made with each Applicable Lender in accordance with the Settlement Report
delivered by the Applicable Agent to the Applicable Lenders.  Between settlement dates, the Applicable
Agent may in its discretion apply payments on Revolver Loans of a Borrower
Group to Swingline Loans of such Borrower Group, regardless of any designation
by any Borrower or any provision herein to the contrary.  Each Applicable Lender’s obligation to make
settlements with the Applicable Agent is absolute and unconditional, without
offset, counterclaim or other defense, and whether or not the Commitments have
terminated, an Overadvance exists, or the conditions in Section 6 are satisfied.  If, due to an Insolvency Proceeding or the
liquidation, dissolution or winding up of any Borrower, or otherwise, any
Swingline Loan may not be settled among the Applicable Lenders hereunder, then
each Applicable Lender shall be deemed to have purchased from the Applicable
Agent a Pro Rata participation in each unpaid Swingline Loan and shall transfer
the amount of such participation to the Applicable Agent, in immediately
available funds, within one (1) Business Day after the Applicable Agent’s
request therefor.

 

4.1.4        Notices.   Each
Borrower authorizes the Applicable Agent and the Applicable Lenders to extend,
convert or continue Loans, effect selections of interest rates, and transfer
funds to or on behalf of Borrowers based on telephonic or e-mailed
instructions.  Borrowers shall confirm
each such request by prompt delivery to the Applicable Agent of a Notice of
Borrowing or Notice of Conversion/Continuation, if applicable, but if it
differs in any material respect from the action taken by the Applicable Agent
or the Applicable Lenders, the records of the Applicable Agent and the
Applicable Lenders shall govern.  No
Agent nor any Lender shall have any liability for any loss suffered by a
Borrower as a result of any Agent or any Lender acting upon its understanding
of telephonic or e-mailed instructions from a person believed in good faith by
such Credit Party to be a person authorized to give such instructions on a
Borrower’s behalf.

 

4.2          Defaulting
Lender.  If a Lender
fails to make any payment to any Credit Party that is required hereunder,
Administrative Agent may (but shall not be required to), in its discretion,
retain payments that would otherwise be made to such defaulting Lender
hereunder, apply the payments to such defaulting Lender’s defaulted obligations
or readvance the funds to Borrowers within the Borrower Group to which such
Lender has issued a Borrower Group Commitment in accordance with this
Agreement.  The failure of any Lender to
fund a Loan or to make a payment in respect of a LC Obligation shall not
relieve any other Lender of its obligations hereunder, and no Lender shall be
responsible for default by another Lender. 
Lenders and Agents agree (which agreement is solely among them, and not
for the benefit of or enforceable by any Borrower) that, solely for purposes of
determining a defaulting Lender’s right to vote on matters relating to the Loan
Documents and to share in payments, fees and Collateral proceeds thereunder, a
defaulting Lender shall not be deemed to be a “Lender” until all its defaulted
obligations have been cured.  With
respect to the payment of any funds from an Agent to a Lender or from a Lender
to an Agent, the party failing to make the full payment when due pursuant to
the terms hereof shall, on demand by the other party, pay such amount together
with interest on such amount at the Delayed Credit Party Payment Rate.

 

69

 

4.3          Number
and Amount of Interest Period Loans; Determination of Rate.   For
ease of administration, all Interest Period Loans to a Borrower Group having
the same length and beginning date of their Interest Periods and denominated in
the same currency shall be aggregated together, and such Loans shall be
allocated among the Applicable Lenders on a Pro Rata basis.  With respect to U.S. Borrowers, no more than
eight (8) aggregate Interest Period Loans may be outstanding at any time,
and each aggregate Interest Period Loan when made, continued or converted shall
be in a minimum amount of $1,000,000, or integral multiples of the Dollar
Equivalent of $100,000 in excess thereof. 
With respect to Canadian Borrower, no more than four (4) aggregate
Interest Period Loans may be outstanding at any time, and each aggregate
Interest Period Loan when made, continued or converted shall be in a minimum
amount of the Dollar Equivalent of $500,000, or integral multiples of the
Dollar Equivalent of $100,000 in excess thereof.

 

4.4          Borrower
Agent.   Each Borrower hereby designates Communications
(“Borrower Agent”) as its representative and agent for all purposes under the
Loan Documents, including requests for Loans and Letters of Credit, designation
of interest rates, delivery or receipt of communications with any Agent, any
Issuing Bank or any Lender, preparation and delivery of Borrowing Base and
financial reports, receipt and payment of Obligations, requests for waivers,
amendments or other accommodations, actions under the Loan Documents (including
in respect of compliance with covenants), and all other dealings with any
Agent, any Issuing Bank or any Lender.  Borrower
Agent hereby accepts such appointment. 
Agents, Issuing Banks and Lenders shall be entitled to rely upon, and
shall be fully protected in relying upon, any notice or communication
(including any notice of borrowing) delivered by Borrower Agent on behalf of
any Borrower.  Agents, Issuing Banks and
Lenders may give any notice or communication with a Borrower hereunder to
Borrower Agent on behalf of such Borrower. 
Each Agent, Issuing Bank and Lender shall have the right, in its
discretion, to deal exclusively with Borrower Agent for any or all purposes
under the Loan Documents.  Each Borrower
agrees that any notice, election, communication, representation, agreement or
undertaking made on its behalf by Borrower Agent shall be binding upon and
enforceable against it.

 

4.5          One
Obligation.   The Borrower Group Obligations owing by each
Borrower Group shall constitute one general obligation of Borrowers within such
Borrower Group and (unless otherwise expressly provided in any Loan Document)
shall be secured by the Applicable Agent’s Lien upon all Collateral of such
Borrower Group; provided, however, that each Credit Party shall be deemed to be
a creditor of, and the holder of a separate claim against, each Borrower to the
extent of any Obligations owed by such Borrower to such Credit Party.

 

4.6          Effect
of Termination.   On the effective date of any termination of
the Commitments, all Obligations shall be immediately due and payable, and any
Lender or its Affiliates may terminate its and its affiliates’ Bank
Products.  All undertakings of Borrowers
contained in the Loan Documents shall survive any termination, and Agents shall
retain their Liens in the Collateral and all of their rights and remedies under
the Loan Documents until Full Payment of the Obligations.  Notwithstanding Full Payment of the
Obligations, Agents shall not be required to terminate their Liens in any
Collateral unless, with respect to any damages Agents may incur as a result of
the dishonor or return of Payment Items applied to Obligations, Agents receive (a) a
written agreement, executed by Borrowers and any Person whose advances are used
in whole or in part to satisfy the Obligations, indemnifying Agents and Lenders
from any such damages; or (b) such Cash Collateral as each Applicable Agent,
in its discretion, deems necessary to protect against any such damages.  The provisions of Sections 2.3, 3.4, 3.6, 3.7, 3.9, 5.7, 5.10, 12, 14.2, 14.3
and this Section, and the obligation of each Obligor and Lender with respect to
each indemnity given by it in any Loan Document, shall survive Full Payment of
the Obligations and any release relating to this credit facility.

 

70

 

SECTION 5.         PAYMENTS

 

5.1          General
Payment Provisions.   All payments of Borrower Group Obligations
shall be made without offset, counterclaim or defense of any kind, free of (and
without deduction for) any Taxes (unless required by Applicable Law), and in immediately
available funds, not later than 12:00 noon (prevailing time in the location of
the Appropriate Notice Office) on the due date. 
Any payment after such time shall be deemed made on the next Business
Day.  If any payment under the Loan
Documents shall be stated to be due on a day other than a Business Day, the due
date shall be extended to the next Business Day and such extension of time
shall be included in any computation of interest and fees.  Any payment of an Interest Period Loan prior
to the end of its Interest Period shall be accompanied by all amounts due under
Section 3.9.  Any prepayment of Loans to a Borrower Group
shall be applied first to Floating Rate Loans of such Borrower Group and then
to Interest Period Loans of such Borrower Group; provided, however, that as
long as no Event of Default exists, prepayments of Interest Period Loans may,
at the option of Borrowers of the applicable Borrower Group and Administrative
Agent, be held by in a Cash Collateral Account and applied to such Loans at the
end of their Interest Periods.  All
payments with respect to any U.S. Obligations shall be made in Dollars and all
payments with respect to any Canadian Obligations shall be made in Canadian
Dollars or, if any portion of such Canadian Obligations is denominated in a
Dollars, then in Dollars.

 

5.2          Repayment
of Revolver Loans.

 

(a)           Revolver Loans shall be due and
payable in full on the Revolver Termination Date, unless payment is sooner
required hereunder. Any portion of the Revolver Loans consisting of the
principal amount of Floating Rate Loans shall be paid by such Borrowers to the
Applicable Agent, for the Pro Rata benefit of the Applicable Lenders (or, in
the case of Swingline Loans, for the sole benefit of the Applicable Swingline
Lender) unless timely converted to an Interest Period  Loan in accordance with this Agreement,
immediately upon (i) the Commitment Termination Date and (ii) in the
case of Swingline Loans, the earlier of the Applicable Swingline Lender’s
demand for payment or on each settlement date with respect to all Swingline
Loans outstanding on such date (which payment shall be satisfied by the funding
of Revolver Loans pursuant to Section 4.1.3,
provided no Insolvency Proceeding or the liquidation, dissolution or winding up
of any Borrower, is then pending).  With
respect to Floating Rate Loans outstanding to U.S. Borrowers or Canadian
Borrower if a Springing Dominion Event has occurred, such Floating Rate Loans
shall be paid pursuant to Section 8.2.4
by such Borrower(s) upon each receipt by any Agent, Lender or Borrowers of
any proceeds of any of the  Collateral,
to the extent of such proceeds.

 

(b)           Any portion of the Revolver Loans consisting of the
principal amount of Interest Period Loans shall be paid by such Borrowers to
the Applicable Agent, for the Pro Rata benefit of the Applicable Lenders,
unless continued as an Interest Period Loan or converted to a Revolver Loan of
a different Type in accordance with the terms of this Agreement, immediately
upon (a) the last day of the Interest Period applicable thereto and (b) the
Commitment Termination Date.  Such
Borrowers shall be authorized to make a voluntary prepayment with respect to
any Revolver Loan outstanding as an Interest Period Loan prior to the last day
of the Interest Period applicable thereto, provided such Borrowers shall pay to
the Applicable Agent, for the Pro Rata benefit of the Applicable Lenders
funding such Interest Period Loan, concurrently with any prepayment of such
Interest Period Loan, any amount due Lenders under Section 3.9 as a consequence of such prepayment.  Notwithstanding the foregoing provisions of
this Section 5.2(b), if, on
any date that the Applicable Agent receives proceeds of any of the Accounts or
Inventory, there are no Revolver Loans outstanding to such Borrower Group as
Floating Rate Loans, the Applicable Agent may, at the request of Borrower
Agent, either hold such proceeds as cash security for the timely payment of the
Borrower Group Obligations or apply such proceeds to any outstanding 

 

71

 

Revolver Loans bearing
interest as Interest Period Loans as the same become due and payable (whether
at the end of the applicable Interest Periods or on the Commitment Termination
Date).

 

(c)           Notwithstanding anything to the contrary contained
elsewhere in this Agreement, if an Overadvance shall exist with respect to a
Borrower Group, Borrowers within such Borrower Group shall, on the sooner to
occur of the Applicable Agent’s demand or the first Business Day after any such
Borrower has obtained knowledge of such Overadvance, repay the outstanding
Revolver Loans that are Floating Rate Loans in an amount sufficient to reduce
the aggregate unpaid principal amount of all Revolver Loans to such Borrowers
by an amount equal to such excess; and, if such payment of Floating Rate Loans
is not sufficient to eliminate the Overadvance, then such Borrowers shall
either prepay Interest Period Loans (subject to the payment of any amounts due
as a result of such prepayment pursuant to Section 3.9)
or immediately deposit with the Applicable Agent, for the Pro Rata benefit of
the Applicable Lenders, for application to any outstanding Revolver Loans
bearing interest as Interest Period Loans as the same become due and payable
(whether at the end of the applicable Interest Periods or on the Commitment
Termination Date) cash in an amount sufficient to eliminate such Overadvance,
and the Applicable Agent may (a) hold such deposit as cash security
pending disbursement of same to the Applicable Lenders for application to the
Borrower Group Obligations, or (b) if a Default or Event of Default
exists, immediately apply such proceeds to the payment of the Borrower Group
Obligations, including the Revolver Loans outstanding as Interest Period Loans
(in which event such Borrowers shall also pay to the Applicable Agent for the
Pro Rata benefit of such Lenders any amounts required by Section 3.9 to be paid by reason of
the prepayment of an Interest Period Loan prior to the last day of the Interest
Period applicable thereto).

 

5.3          Reduction
of Fixed Asset Formula Amount; Prepayments of Revolver Loans

 

(a)           Concurrently with the receipt of any
Net Proceeds of any Permitted Asset Disposition of Equipment or Real Estate
included in the calculation of the Fixed Asset Formula Amount, Borrowers shall
prepay Revolver Loans in an amount equal to such Net Proceeds of such
disposition and the Canadian Fixed Asset Formula Amount or the U.S. Fixed Asset
Formula Amount, as applicable, shall be immediately reduced in an amount equal
to such Net Proceeds of such disposition;

 

(b)           Concurrently with the receipt of any Net Proceeds of
insurance or condemnation awards paid in respect of any Casualty Event relating
to Equipment or Real Estate included in the calculation of the Fixed Asset
Formula Amount, Borrowers shall prepay Revolver Loans in an amount equal to
such Net Proceeds of such insurance or condemnation awards and the Canadian
Fixed Asset Formula Amount or the U.S. Fixed Asset Formula Amount, as
applicable, shall be immediately reduced in an amount equal to such Net
Proceeds, subject to Section 8.6.2;

 

(c)           Concurrently with the receipt of any Net Proceeds of any
Permitted Asset Disposition of any Property of Borrowers (other than Equipment
or Real Estate included in the calculation of the Fixed Asset Formula Amount),
Borrowers shall prepay Revolver Loans in an amount equal to such Net Proceeds
of such disposition unless (i) no Event of Default then exists and (ii) Availability
equals or exceeds at all times for the ninety (90) consecutive day period
preceding the date of any such sale an amount equal to the greater of (A) $45,000,000
or (B) the sum of the Fixed Asset Formula Amount  plus $25,000,000;

 

(d)           Concurrently with the receipt of proceeds of Extraordinary
Receipts by any Borrower, such Borrower shall prepay Revolver Loans extended to
the applicable Borrower Group in an amount equal to the Net Proceeds of such
Extraordinary Receipts;

 

72

 

(e)           If a Springing Dominion Event exists, Borrowers shall
prepay the Obligations with the proceeds of Collateral (without any permanent
reduction of the Revolver Commitments), including the Net Disposition Proceeds
arising from any Permitted Asset Disposition (other than Net Disposition
Proceeds required to be applied to the reduction of the Fixed Asset Formula
Amount pursuant to clauses (a) and (b) of this Section 5.3);

 

(f)           On the Commitment Termination Date, Borrowers shall prepay
all outstanding Loans (unless sooner repaid hereunder); and

 

(g)          Borrowers may, at their option from time to time, reduce
the Fixed Asset Formula Amount, which reduction must be at least $5,000,000,
plus any increment of $1,000,000 in excess thereof.  Borrowers shall give written notice to
Administrative Agent of an intended reduction of the Fixed Asset Formula
Amount, which notice shall specify the amount of the reduction, shall be
irrevocable once given, shall be given at least 10 Business Days prior to the
end of a month and shall be effective as of the first day of the next month.

 

5.4          Payment
of Interest.   Interest accrued on the Loans outstanding to a
Borrower Group shall be due and payable in arrears on (i) the first day of
each month (for the immediately preceding month), computed through the last day
of the preceding month, with respect to each Revolver Loan that is a Floating
Rate Loan and (ii) the last day of the applicable Interest Period (and the
last day of any ninety (90) day period which expires within any Interest
Period) in the case of all Interest Period Loans, including Canadian BA Rate
Loans.  Accrued interest shall also be
paid by such Borrowers on the Commitment Termination Date.  With respect to any Floating Rate Loan
converted into an Interest Period Loan pursuant to Section 3.1.2 on a day when interest would not otherwise
have been payable with respect to such Floating Rate Loan, accrued interest to
the date of such conversion on the amount of such Floating Rate Loan so
converted shall be paid on the conversion date.

 

5.5          Payment
of Other Obligations. 
Obligations other than Loans, including LC Obligations and Extraordinary
Expenses, shall be paid by Borrowers as provided in the Loan Documents or, if
no payment date is specified, on demand.

 

5.6          Marshaling;
Payments Set Aside.   None of Agents or Lenders shall be under any
obligation to marshal any assets in favor of any Obligor or against any
Obligations.  If any Obligor makes a
payment to any Agent, any Issuing Bank or any Lender, or any Agent, any Issuing
Bank or any Lender exercises a right of setoff, and such payment or the
proceeds of such setoff or any part thereof is subsequently invalidated,
declared to be fraudulent or preferential, set aside or required (including
pursuant to any settlement entered into by such Agent, such Issuing Bank or
such Lender in its discretion) to be repaid to a trustee, receiver or any other
Person, then (a) to the extent of such recovery, the Obligation originally
intended to be satisfied, and all Liens, rights and remedies relating thereto,
shall be revived and continued in full force and effect as if such payment had
not been made or such setoff had not occurred, and (b) each Lender
severally agrees to pay to the Administrative Agent or Canadian Agent, as
applicable, upon demand its applicable share of any amount so recovered from or
repaid by any Agent, plus interest thereon from the date of such demand to the
date on which such payment is made at the Delayed Credit Party Payment Rate.

 

5.7          Post-Default
Allocation of Payments

 

5.7.1        Allocation.   Notwithstanding anything herein to the
contrary, at any time that an Event of Default exists, monies to be applied to
the Borrower Group Obligations of a Borrower Group, whether arising from
payments by Obligors of such Borrower Group, realization on Collateral securing

 

73

 

the Borrower Group
Obligations of such Borrower Group, setoff or otherwise with respect to such
Borrower Group, shall be allocated as follows:

 

(i)            first, to each
Agent to pay the amount of Extraordinary Expenses that have not been reimbursed
to such Agent by the members of a Borrower Group or Lenders, together with
interest accrued thereon at the rate applicable to Revolver Loans that are
Floating Rate Loans, until Full Payment of all such Borrower Group Obligations;

 

(ii)           second, to the Applicable Agent to
pay principal and accrued interest on any portion of the Revolver Loans
(whether as Protective Advances or otherwise) which the Applicable Agent may
have advanced on behalf of an Applicable Lender and for which such Agent has
not been reimbursed by such Lender or by the members of a Borrower Group, until
Full Payment of all such Obligations;

 

(iii)          third, to the Applicable Swingline
Lender to pay the principal and accrued interest on any portion of its
Swingline Loans outstanding to such Borrower Group, to be shared with the
Applicable Lenders that have acquired and paid for a participating interest in
such Swingline Loans, until Full Payment of all such Obligations;

 

(iv)          fourth, to the extent that the
Applicable Issuing Bank or the Applicable Agent has not received from any
Lender participating in the LC Obligations with respect to any Letter of Credit
a payment as required by Section 2.3.2,
to such Issuing Bank or the Applicable Agent to pay all such required payments
from such Lender participating in any LC Obligations with respect to any Letter
of Credit, until Full Payment of all such Borrower Group Obligations;

 

(v)           fifth, to each Agent to pay any
Claims that have not been paid pursuant to any indemnity of Agent Indemnitees
by the members of such Borrower Group, or to pay amounts owing to Agent
Indemnitees by the Applicable Lenders to such Borrower Group pursuant to Section 12.6, in each case together
with interest accrued thereon at the rate applicable to Revolver Loans that are
Floating Rate Loans, until Full Payment of all such Borrower Group Obligations;

 

(vi)          sixth, to each Agent to pay any fees
due and payable to such Agent by such Borrowers, until Full Payment of all such
Borrower Group Obligations (excluding amounts relating to Bank Product Debt);

 

(vii)         seventh, to each Applicable Lender,
ratably, for any Claims that such Lender has paid to Agent Indemnitees pursuant
to its indemnity of Agent Indemnitees and any Extraordinary Expenses that such
Lender has reimbursed to each Agent or that such Lender has incurred, to the
extent that such Lender has not been reimbursed by the members of such Borrower
Group therefor, until Full Payment of all such Borrower Group Obligations;

 

(viii)        eighth, to the Applicable Issuing Bank
or the Applicable Agent to pay principal and interest with respect to LC
Obligations of such Borrower Group (or to the extent any of such LC Obligations
are contingent and an Event of Default then exists, deposited in the Cash
Collateral Account to Cash Collateralize such LC Obligations), which payment
shall be shared with the Lenders participating in any LC Obligations with
respect to any Letter of Credit in accordance with Section 2.3.2(c), until Full Payment of such Borrower
Group Obligations;

 

74

 

(ix)         ninth, to the Applicable Lenders in
payment of the unpaid principal and accrued interest in respect of the Loans
and other Borrower Group Obligations (excluding Bank Product Debt) then owed by
such Borrower Group, in such order of application as shall be designated by
Administrative Agent (acting at the direction or with the consent of the
Required Lenders), until Full Payment of all such Borrower Group Obligations;
and

 

(x)          tenth, with respect to any remaining
proceeds of U.S. Collateral, to Canadian Agent, Canadian Issuing Bank and the
Canadian Lenders, as applicable in payment of the unpaid principal and accrued
interest in respect of the Canadian Loans and other Borrower Group Obligations
(excluding Bank Product Debt) then owed by Canadian Borrower, in such order of
application as shall be designated by Canadian Agent (acting at the direction
or with the consent of the Required Lenders), until Full Payment of all such
Canadian Obligations; and

 

(xi)         eleventh, to Bank of America, any
branch or affiliate of Bank of America, Lender or any other Person that is a
Secured Party in payment of any Bank Product Debt of such Borrower Group, until
Full Payment of all such Bank Product Debt.

 

Amounts shall be applied to
each category of Obligations set forth above until Full Payment thereof and
then to the next category.  If amounts
are insufficient to satisfy a category, they shall be applied on a pro rata
basis among the Obligations in the category. 
Amounts distributed with respect to any Bank Product Debt shall be the
lesser of the applicable Bank Product Amount last reported to the Applicable
Agent or the actual Bank Product Debt as calculated by the methodology reported
to the Applicable Agent for determining the amount due.  The Applicable Agent shall have no obligation
to calculate the amount to be distributed with respect to any Bank Product
Debt, but may rely upon written notice of the amount (setting forth a
reasonably detailed calculation) from the Secured Party holding the Bank
Product Debt.  In the absence of such
notice, the Applicable Agent may assume the amount to be distributed is the
Bank Product Amount last reported to it. 
The allocations set forth in this Section are solely to determine
the rights and priorities of Agents and Lenders as among themselves, and may be
changed by agreement among them without the consent of any Obligor.  This Section is not for the benefit of
or enforceable by any Borrower.

 

5.7.2        Erroneous Application.   No
Agent shall be liable for any application of amounts made by it in good faith
and, if any such application is subsequently determined to have been made in
error, the sole recourse of any Lender or other Person to which such amount
should have been made shall be to recover the amount from the Person that
actually received it (and, if such amount was received by any Lender, such
Lender hereby agrees to return it).

 

5.8          Application
of Payments.   Each Borrower irrevocably waives the right to
direct the application of any payments or Collateral proceeds, and agrees that
Agents shall have the continuing, exclusive right to apply and reapply the same
against the Borrower Group Obligations of such Borrower, in such manner as
Agents deem advisable, notwithstanding any entry by Agents in their
records.  If on any date, as a result of
an Agent’s receipt of Payment Items or proceeds of Collateral, a credit balance
exists, the Applicable Agent shall hold or apply such Payment Items or proceeds
in accordance with Section 5.2(b).

 

5.9          Loan
Account; Account Stated

 

5.9.1        Loan Account.   Each
Lender shall maintain in accordance with its usual and customary practices an
account or accounts (“Loan Account”) evidencing the Debt of Borrowers within
each Borrower Group resulting from each Loan or issuance of a Letter of Credit
from time to time owing 

 

75

 

to such Lender from time to
time hereunder by such Borrower Group. 
Any failure of a Lender to record anything in the Loan Account, or any
error in doing so, shall not limit or otherwise affect the obligation of
Borrowers to pay any amount owing hereunder to such Lender.  Each Lender may maintain a single Loan Account
in the name of Borrower Agent, and each Borrower confirms that such arrangement
shall have no effect on the joint and several character of its liability for
the Obligations of its Borrower Group.

 

5.9.2        Entries Binding.   Entries
made in the Loan Account shall constitute rebuttably presumptive evidence of
the information contained therein.  If
any information contained in the Loan Account is provided to or inspected by
any Person, then such information shall be conclusive and binding on such
Person for all purposes absent manifest error, except to the extent such Person
notifies the Applicable Agent in writing within thirty (30) days after receipt
or inspection that specific information is subject to dispute.

 

5.9.3        The Register.   Administrative Agent shall maintain a register
(the “Register”), which shall include a master account and a subsidiary account
for each Lender and each Borrower Group and in which accounts (taken together)
shall be recorded (i) the date and amount of each Borrowing made
hereunder, the Type of each Loan comprising such Borrowing and any Interest
Period applicable thereto, (ii) the effective date and amount of each
Assignment and Acceptance delivered to and accepted by it and the parties
thereto, (iii) the amount of any principal or interest due and payable or
to become due and payable from Borrowers within each Borrower Group to each
Lender hereunder or under the Notes, and (iv) the amount of any sum
received by an Agent from Borrowers within each Borrower Group or any other
Obligor and each Lender’s Pro Rata share thereof.  The Register shall be available for
inspection by Borrowers or any Lender at the offices of Administrative Agent at
any reasonable time and from time to time upon reasonable prior notice.  Any failure of Administrative Agent to record
in the Register, or any error in doing so, shall not limit or otherwise affect
the obligation of Borrowers hereunder (or under any Note) to pay any amount
owing with respect to the Obligations or provide the basis for any claim
against Administrative Agent.  The
Obligations and Letters of Credit are registered obligations and the right,
title and interest of Lenders and their assignees in and to such Obligations
and Letters of Credit as the case may be, shall be transferable only upon
notation of such transfer in the Register and in accordance with this
Agreement.  Solely for purposes of this Section 5.9.3 and for tax purposes
only, Administrative Agent shall be Borrowers’ agent for purposes of
maintaining the Register (but Administrative Agent shall have no liability
whatsoever to any Borrower or any other Person on account of any inaccuracies
contained in the Register).  This Section 5.9.3 shall be construed so
that the Obligations and Letters of Credit are at all times maintained in “registered
form” within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of
the Internal Revenue Code and any related regulations (and any other relevant
or successor provisions of the Internal Revenue Code or such regulations or
other relevant provisions of Applicable Law).

 

5.10        Taxes.

 

5.10.1      Payments Free of Taxes.   Any and
all payments by any Obligor on account of any Obligations shall be made free
and clear of and without reduction or withholding for any Taxes, provided
that if an Obligor shall be required by Applicable Law to deduct any
Taxes from such payments, then (a) the Obligor shall make such deductions
and timely pay the full amount deducted to the relevant Governmental Authority
in accordance with Applicable Law; and (b) the amount payable shall be
increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section) the
Applicable Agent, Lender or Issuing Bank, as the case may be, receives an
amount equal to the sum it would have received had no such deductions been
made;  provided, however,
that no additional amounts shall be payable in respect of (i) any Taxes
imposed by reason of the Lender’s failure to comply with the provisions of this
Section 5.10; or (ii) any
Taxes 

 

76

 

imposed on or measured by
overall net income or capital (however denominated), including franchise
taxes.  Without limiting the foregoing,
Borrowers shall timely pay all stamp, transfer or documentary taxes or any other
excise taxes, charges or similar levies, and any penalties, additions to tax or
interest due with respect thereto, that may be imposed in connection with the
execution, delivery, issuance or recording of any Loan Documents, or the
creation or repayment of any Obligations.

 

5.10.2      Payment.   Borrowers within each Borrower Group shall
indemnify, hold harmless and reimburse the Applicable Agent, the Applicable
Lenders and the Applicable Issuing Bank, within 10 days after demand therefor,
for the full amount of any Taxes (including Taxes imposed on or with respect to
amounts payable under this Section) that the relevant Obligor was required to
withhold and gross-up pursuant to this Section 5.10
but instead were paid by the Applicable Agent, any Applicable Lender or the Applicable
Issuing Bank, and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto.  As
soon as practicable after any payment of Taxes by a Borrower, Borrower Agent
shall deliver to Administrative Agent a receipt issued by the Governmental
Authority evidencing such payment or other evidence of payment satisfactory to
the Applicable Agent.

 

5.10.3      Tax Certification; U.S. Borrowers.   In the
case of a U.S. Borrower,

 

(i)            except as set forth in clause (iv) below,
each Foreign Lender shall deliver to the Applicable Agent and Borrower Agent
(in such number of copies as shall be requested by the recipient) on or prior
to the date on which such Foreign Lender becomes a Lender hereunder (and from
time to time thereafter upon the request of Administrative Agent or Borrower
Agent, but only if such Foreign Lender is legally entitled to do so), (a) duly
completed copies of IRS Form W-8BEN certifying that the Foreign Lender is
eligible for an exemption from U.S. withholding tax under an income tax treaty
to which the United States is a party in respect of payments it receives
pursuant to the Loan Documents; (b) duly completed copies of IRS Form W-8ECI
certifying that the Foreign Lender’s income from the Loan Documents is
effectively connected with its conduct of a trade or business in the United
States; or (c) in the case of a Foreign Lender claiming the benefits of
the exemption for portfolio interest under section 881(c) of the Internal
Revenue Code, duly completed copies of IRS Form W-8BEN certifying that the
Foreign Lender is not a U.S. person and a certificate to the effect that such
Foreign Lender is not (A) a “bank” within the meaning of section 881(c)(3)(A) of
the Internal Revenue Code, (B) a “10 percent shareholder” of any Obligor
within the meaning of section 881(c)(3)(B) of the Internal Revenue Code,
or (C) a “controlled foreign corporation” described in section 881(c)(3)(C) of
the Internal Revenue Code;

 

(ii)           each U.S. Lender that is organized
under the laws of a jurisdiction within the United States of America shall
deliver to the Applicable Agent and Borrower Agent (in such number of copies as
shall be requested by the recipient) on or prior to the date on which such U.S.
Lender becomes a Lender hereunder (and from time to time thereafter upon the
request of Administrative Agent or Borrower Agent), a statement signed by an
authorized signatory of the Lender to the effect that it is a United States
person together with a duly completed and executed copy of IRS Form W-9 or
successor form establishing that the Lender is not subject to U.S. backup
withholding tax;

 

(iii)          each Foreign Lender further agrees to
complete and deliver to the Applicable Agent and Borrower Agent (in such number
of copies as shall be requested by the recipient) from time to time, so long as
it is eligible to do so, any successor or additional form required by the IRS
or reasonably requested by the Borrower in order to secure an exemption from,
or reduction 

 

77

 

in the rate of, U.S.
withholding tax, duly completed together with such supplementary documentation
as may be prescribed by Applicable Law; and

 

(iv)          notwithstanding anything to the
contrary set forth in clauses (i), (ii) or (iii) above, any Foreign
Lender that first becomes a Lender at a time when an Event of Default exists
shall, to the extent such Lender determines, in its reasonable discretion, that
it is eligible to receive payments under the Loan Documents without withholding
tax or at a reduced rate of withholding tax, shall deliver to the Applicable
Agent and Borrower Agent (in such number of copies as may be reasonably
requested by the recipient) on or within a reasonable time following the date
on which such Lender becomes a Lender hereunder (and from time to time
thereafter upon the reasonable request of the Applicable Agent or Borrower
Agent, but only if such Lender is legally entitled to do so) properly completed
and executed documentation, if any, prescribed by Applicable Law as will permit
payments under the Loan Documents to be made by it without withholding tax or
at a reduced rate of withholding to the extent permitted under Applicable Law.

 

5.10.4      Tax Certification; Canadian Borrowers.
  In the case of a Canadian Borrower,

 

(i)            except as set forth in clause (ii) below,
each Foreign Lender shall deliver to the Applicable Agent and Borrower Agent,
at the time or times prescribed by Applicable Law or reasonably requested by
the Applicable Agent or Borrower Agent, such properly completed and executed
documentation prescribed by Applicable Law as will permit payments under the
Loan Documents to be made to it without withholding tax or, in the case of
documentation requested after the Foreign Lender becomes a Lender, at a reduced
rate of withholding.  In addition, each
Lender, if requested by the Applicable Agent or Borrower Agent, shall deliver
such other documentation prescribed by Applicable Law or reasonably requested
by the Applicable Agent or Borrower Agent as will enable Administrative Agent and
Borrower Agent to determine whether or not such Lender is subject to backup
withholding or information reporting requirements; and

 

(ii)           notwithstanding anything to the
contrary set forth in clause (i) above, any Lender that first becomes a
Lender at a time when an Event of Default exists shall, to the extent such
Lender determines, in its reasonable discretion, that it is eligible to receive
payments under the Loan Documents without withholding tax or at a reduced rate
of withholding tax, shall deliver to the Applicable Agent and Borrower Agent
(in such number of copies as may be reasonably requested by the recipient) on
or within a reasonable time following the date on which such Lender becomes a
Lender hereunder (and from time to time thereafter upon the reasonable request
of the Applicable Agent or Borrower Agent, but only if such Lender is legally
entitled to do so) properly completed and executed documentation, if any,
prescribed by Applicable Law as will permit payments under the Loan Documents
to be made by it without withholding tax or at a reduced rate of withholding to
the extent permitted under Applicable Law.

 

5.10.5      Survival.   The
covenants contained in this Section 5.10
shall survive the Full Payment of the Obligations under this Agreement.

 

5.11        [Reserved.]

 

5.12        Currency Matters.  Dollars are the currency of account and
payment for each and every sum at any time due from the Borrowers hereunder,
provided that, unless otherwise provided in this Agreement or any other Loan
Document or otherwise agreed to by the Administrative Agent:

 

78

 

5.12.2      Each repayment of a Loan or LC Obligation
or a part thereof shall be made in the currency in which such Loan or LC
Obligation is denominated at the time of that repayment;

 

5.12.3      Each payment of interest shall be made in
the currency in which such principal or other sum in respect of which such
interest is denominated;

 

5.12.4      Each payment of fees by a U.S. Borrower
pursuant to Section 3.2 shall
be in Dollars;

 

5.12.5      Each payment of fees by Canadian Borrower
pursuant to Section 3.2 shall
be in Canadian Dollars;

 

5.12.6      Each payment in respect of Extraordinary
Expenses and any other costs, expenses and indemnities shall be made in the
currency in which the same were incurred by the party to whom payment is to be
made; and

 

5.12.7      Any amount expressed to be payable in
Canadian Dollars shall be paid in Canadian Dollars.

 

No payment to any Credit
Party (whether under any judgment or court order or otherwise) shall discharge
the obligation or liability of the Obligor in respect of which it was made
unless and until such Credit Party shall have received payment in full in the
currency in which such obligation or liability was incurred.  To the extent that the amount of any such
payment shall, on actual conversion into such currency, fall short of such
obligation or liability actual or contingent expressed in that currency, such
Obligor (together with the other Obligors within its Borrower Group) agrees to
indemnify and hold harmless such Credit Party, with respect to the amount of
the shortfall with respect to amounts payable by such Obligor hereunder, with
such indemnity surviving the termination of this Agreement and any legal
proceeding, judgment or court order pursuant to which the original payment was
made which resulted in the shortfall.  To
the extent that the amount of any such payment to a Credit Party shall, upon an
actual conversion into such currency, exceed such obligation or liability,
actual or contingent, expressed in that currency, such Credit Party shall
return such excess to the members of the affected Borrower Group.

 

5.13        Currency
Fluctuations.

 

5.13.1      Not later than 1:00 p.m.    (prevailing time in the location of the
Appropriate Notice Office) on the last Business Day of each calendar month or,
in the event that the Exchange Rate fluctuates in excess of 10% during such
calendar month, any other Business Day in the reasonable discretion of
Administrative Agent (the “Calculation Date”), Administrative Agent
shall reasonably determine the Exchange Rate as of such date.  The Exchange Rate so determined shall become
effective on the first Business Day immediately following such determination (a
“Reset Date”) and shall remain effective until the next succeeding Reset
Date.  Nothing contained in this Section 5.13 shall be construed to
require Administrative Agent to calculate compliance under this Section 5.13 more frequently than once
each month.

 

5.13.2      Not later than 4:00 p.m.   (prevailing time in the location of the
Appropriate Notice Office) on each Reset Date, Administrative Agent shall
determine the Dollar Equivalent of the Canadian Revolver Exposure.

 

5.13.3      If, on any Reset Date, the Total Revolver
Exposure exceeds the total amount of the Maximum Revolver Facility Amount on
such date, or the Canadian Revolver Exposure on such date 

 

79

 

exceeds the Dollar
Equivalent of the Canadian Revolver Facility Amount on such date (the amount of
any such excess referred to herein as the “Excess Amount”) then (i) Administrative
Agent shall give notice thereof to Borrowers and Lenders and (ii) within
one (1) Business Day thereafter, Borrowers shall cause such excess to be
eliminated, either by repayment of Revolver Loans or depositing of Cash
Collateral with Administrative Agent with respect to LC Obligations and until
such Excess Amount is repaid, Lenders shall not have any obligation to make any
Loans.

 

5.14        Nature
and Extent of Each Borrower’s Liability

 

5.14.1      Joint and Several Liability

 

(a)           Each U.S. Borrower shall be liable
for, on a joint and several basis, and hereby guarantees the timely payment by
all other U.S. Borrowers of all of the Borrower Group Obligations, regardless
of which U.S. Borrower actually may have received the proceeds of any Loans or
other extensions of credit hereunder or the amount of such Loans received or
the manner in which any Credit Party accounts for such Loans or other
extensions of credit on its books and records, it being acknowledged and agreed
that Loans to any U.S. Borrower inure to the mutual benefit of all U.S.
Borrowers and that each Credit Party is relying on the joint and several
liability of all U.S. Borrowers in extending the Loans and other financial
accommodations hereunder to the U.S. Borrowers. 
Each U.S. Borrower hereby unconditionally and irrevocably agrees that
upon default in the payment when due (whether at stated maturity, by
acceleration or otherwise) of any principal of, or interest owed on, any of the
Borrower Group Obligations owed by U.S. Borrower, such U.S. Borrowers shall
forthwith pay the same, without notice or demand.

 

(b)           Each U.S. Borrower’s joint and several liability hereunder
with respect to, and guaranty of, Borrower Group Obligations of U.S. Borrowers,
shall, to the fullest extent permitted by Applicable Law, be unconditional
irrespective of (i) the validity, enforceability, avoidance or
subordination of any of such  Borrower
Group Obligations or of any promissory note or other document evidencing all or
any part of such Borrower Group Obligations, (ii) the absence of any
attempt to collect any of such Borrower Group Obligations from any other U.S.
Obligor or any U.S. Collateral or other security therefor, or the absence of
any other action to enforce the same, (iii) the waiver, consent,
extension, forbearance or granting of any indulgence by any Credit Party with
respect to any provision of any instrument evidencing or securing the payment
of any of such Borrower Group Obligations, or any other agreement now or
hereafter executed by any other Borrower and delivered to any Credit Party, (iv) the
failure by the Applicable Agent to take any steps to perfect or maintain the
perfected status of its security interest in or other Lien upon, or to preserve
its rights to, any of the U.S. Collateral or other security for the payment or
performance of any of such Borrower Group Obligations or any Agent’s release of
any Collateral or of its Liens upon any U.S. Collateral, (v) any Credit
Party’s election, in any proceeding instituted under the Bankruptcy Code, for
the application of Section 1111(b)(2) of the Bankruptcy Code, (vi) any
borrowing or grant of a security interest by any other U.S. Borrower, as debtor
or debtor-in-possession under any insolvency law (including Section 364 of
the Bankruptcy Code), (vii) the release or compromise, in whole or in
part, of the liability of any U.S. Obligor for the payment of any of such
Borrower Group Obligations, (viii) any amendment or modification of any of
the Loan Documents or any waiver of an applicable Default or Event of Default, (ix) any
increase in the amount of such Borrower Group Obligations beyond any limits
imposed herein or in the amount of any interest, fees or other charges payable
in connection therewith, or any decrease in the same, (x) the disallowance
of all or any portion of any Credit Party’s claims against any other U.S.
Obligor for the repayment of any of such Borrower Group Obligations under any
Insolvency Law (including Section 502 of the Bankruptcy Code), or (xi) to
the fullest extent permitted by law, any other circumstance that might
constitute a legal or equitable discharge or defense of any Obligor.  After the occurrence and during the
continuance of any 

 

80

 

Event of Default,
Administrative Agent or the Applicable Agent, or both, may proceed directly and
at once, without notice to any Obligor, against any or all of U.S. Obligors to
collect and recover all or any part of the Borrower Group Obligations owing by
U.S. Obligors (whether or not then due or payable), without first proceeding
against any other U.S. Obligor or against any U.S. Collateral or other security
for the payment or performance of any of such Borrower Group Obligations, and
to the fullest extent permitted by law, each U.S. Borrower waives any provision
under Applicable Law that might otherwise require any Agent to pursue or
exhaust its remedies against any U.S. Collateral or U.S. Obligor before
pursuing another U.S. Obligor.

 

(c)           No payment or payments made by a U.S. Obligor or received
or collected by any Credit Party or any other Person by virtue of any action or
proceeding or any setoff or appropriation or application at any time or from
time to time in reduction of or in payment of the Obligations shall be deemed
to modify, release or otherwise affect the liability of any U.S. Borrower under
this Agreement for any remaining Borrower Group Obligations, each of whom shall
remain jointly and severally liable for the payment and performance of all of
its Borrower Group Obligations until Full Payment of such Obligations.

 

5.14.2      Waivers

 

(a)           Each Borrower expressly waives all
rights that it may have now or in the future under any statute, at common law,
in equity or otherwise, to compel Administrative Agent or Lenders to marshal
assets or to proceed against any Obligor, other Person or security for the
payment or performance of any Obligations before, or as a condition to,
proceeding against such Borrower.  It is
agreed among each Borrower, Administrative Agent and Lenders that the
provisions of this Section are of the essence of the transaction
contemplated by the Loan Documents and that, but for such provisions,
Administrative Agent and Lenders would decline to make Loans and issue Letters
of Credit.  Notwithstanding anything to
the contrary in any Loan Document, and except as set forth in Section 5.14.3, each Borrower
expressly waives all rights at law or in equity to subrogation, reimbursement,
exoneration, contribution, indemnification or set off, as well as all defenses
available to a surety, guarantor or accommodation co-obligor.  Each Borrower acknowledges that its joint and
several liability and waiver pursuant to this Section is necessary to the
conduct and promotion of its business, and can be expected to benefit such
business.

 

(b)           Administrative Agent and Lenders may, in their discretion,
pursue such rights and remedies as they deem appropriate, including realization
upon Collateral by judicial foreclosure or non judicial sale or enforcement,
without affecting any rights and remedies under this Section 5.14.  If,
in the exercise of any rights or remedies, Administrative Agent or any Lender
shall forfeit any of its rights or remedies, including its right to enter a
deficiency judgment against any Borrower or any other Person, whether because
of any applicable laws pertaining to “election of remedies” or otherwise, each
Borrower consents to such action by Administrative Agent or such Lender and
waives any claim based upon such action, even if the action may result in loss
of any rights of subrogation that any Borrower might otherwise have had but for
such action.  Any election of remedies
that results in denial or impairment of the right of Administrative Agent or
any Lender to seek a deficiency judgment against any Borrower shall not impair
any other Borrower’s obligation to pay the full amount of the Obligations.  Each Borrower waives all rights and defenses
arising out of an election of remedies, such as nonjudicial foreclosure with
respect to any security for the Obligations, even though that election of
remedies destroys such Borrower’s rights of subrogation against any other
Person.  If Administrative Agent bids at
any foreclosure or trustee’s sale or at any private sale, Administrative Agent
may bid all or a portion of the Obligations and the amount of such bid need not
be paid by Administrative Agent but shall be credited against the
Obligations.  The amount of the
successful bid at any such sale, whether Administrative Agent 

 

81

 

or any other Person is the
successful bidder, shall be conclusively deemed to be the fair market value of
the Collateral, and the difference between such bid amount and the remaining
balance of the Obligations shall be conclusively deemed to be the amount of the
Obligations guaranteed under this Section 5.14,
notwithstanding that any present or future law or court decision may have the
effect of reducing the amount of any deficiency claim to which Administrative
Agent or any Lender might otherwise be entitled but for such bidding at any
such sale.

 

5.14.3      Extent of Liability; Contribution

 

(a)           Notwithstanding anything herein to
the contrary, each Borrower’s liability under this Section 5.14 shall be limited to the greater of (i) all
amounts for which such Borrower is primarily liable, as described below, and (ii) such
Borrower’s Allocable Amount.

 

(b)           If any Borrower makes a payment under this Section 5.14 of any Obligations (other
than amounts for which such Borrower is primarily liable) (a “Guarantor
Payment”) that, taking into account all other Guarantor Payments previously
or concurrently made by any other Borrower, exceeds the amount that such
Borrower would otherwise have paid if each Borrower had paid the aggregate
Obligations satisfied by such Guarantor Payments in the same proportion that
such Borrower’s Allocable Amount bore to the total Allocable Amounts of all
Borrowers, then such Borrower shall be entitled to receive contribution and
indemnification payments from, and to be reimbursed by, each other Borrower for
the amount of such excess, pro rata based upon their respective Allocable
Amounts in effect immediately prior to such Guarantor Payment.  The “Allocable Amount” for any
Borrower shall be the maximum amount that could then be recovered from such
Borrower under this Section 5.14
without rendering such payment voidable or avoidable under Section 548 of
the Bankruptcy Code or under any applicable state fraudulent transfer or
conveyance act, or similar statute or common law.

 

(c)           Nothing contained in this Section 5.14 shall limit the liability of any Borrower to
pay Loans made directly or indirectly to that Borrower (including Loans
advanced to any other Borrower and then re-loaned or otherwise transferred to,
or for the benefit of, such Borrower), LC Obligations relating to Letters of
Credit issued to support such Borrower’s business, and all accrued interest,
fees, expenses and other related Obligations with respect thereto, for which
such Borrower shall be primarily liable for all purposes hereunder.  Agents and Lenders shall have the right, in
their discretion at any time that a Default or Event of Default exists or
Aggregate Availability is less than $30,000,000, to condition Loans and Letters
of Credit upon a separate calculation of borrowing availability for each
Borrower and to restrict the disbursement and use of such Loans and Letters of
Credit to such Borrower.

 

5.14.4      Joint Enterprise.   Each
Borrower has requested that Agents and Lenders make the credit facility
established hereunder available to Borrowers on a combined basis, in order to
finance Borrowers’ business most efficiently and economically.  Borrowers’ business is a mutual and
collective enterprise, and Borrowers believe that consolidation of their credit
facility will enhance the borrowing power of each Borrower and ease the
administration of their relationship with Lenders, all to the mutual advantage
of Borrowers.  Borrowers acknowledge and
agree that Agents’ and Lenders’ willingness to extend credit to Borrowers and
to administer the Collateral on a combined basis, as set forth herein, is done
solely as an accommodation to Borrowers and at Borrowers’ request.

 

5.14.5      Subordination.   Each
Borrower hereby subordinates any claims, including any right of payment,
subrogation, contribution and indemnity, that it may have from or against any
other Obligor in the same Borrower Group, and any successor or assign of any
other Obligor, including any creditor representative or debtor in possession,
howsoever arising, due or owing or whether heretofore, now or hereafter
existing, to the Full Payment of all of its Borrower Group Obligations.

 

82

 

SECTION 6.      CONDITIONS
PRECEDENT

 

6.1          Conditions
Precedent to Initial Loans.  In addition to the conditions set forth in Section 6.2, the Lenders shall not be
required to fund any requested Loan or otherwise extend credit to any Borrower
within a Borrower Group, nor shall Issuing Banks or any Applicable Agent have
any obligation to issue any Letter of Credit for the account of any Borrower
within such Borrower Group hereunder, until the date (“Closing Date”)
that each of the following conditions has been satisfied with respect to such
Borrower Group and its members:

 

(a)           Notes shall have been executed by
Borrowers and delivered to each Lender that requests issuance of a Note.  Each other Loan Document shall have been duly
executed and delivered to Agents by each of the signatories thereto, and each
Obligor within such Borrower Group shall be in compliance with all terms
thereof.

 

(b)           Each of the Applicable Agents shall have received (i) acknowledgments
of those filings or recordations necessary to perfect its Liens in the
Collateral (including any applicable filing or registrations with respect to
Canadian Obligors) as are consistent with the Existing Loan Agreement and the
related loan documents, subject to Borrowers’ commercially reasonable efforts
prior to the Closing Date with respect to any additional filings against
Collateral not subject to the Existing Loan Agreement, as well as (ii) UCC,
PPSA and Lien searches and other evidence satisfactory to Agents that such
Liens are the only Liens upon the Collateral, except Permitted Liens.

 

(c)           Agents shall have received duly executed Deposit Account
Control Agreements for each Deposit Account of each Obligor (other than SEI)
within such Borrower Group and any related lockbox, in form and substance, and
with financial institutions, satisfactory to Agents to the extent required
pursuant to Section 8.2.4.

 

(d)           Agents shall have received certificates, in form and
substance satisfactory to them, from a knowledgeable Senior Officer of each
Borrower certifying that, after giving effect to the initial Loans and
transactions related thereto on the Closing Date, (i) such Borrower is
Solvent; (ii) no Default or Event of Default exists; (iii) the
representations and warranties set forth in Sections
9.1.1, 9.1.2, 9.1.3, 9.1.6, 9.1.14 (with respect to the PATRIOT Act
and other Anti-Terrorism Laws), and 9.1.24 (the
“Specified Representations”) are true and correct; and (iv) such
Borrower has complied with all agreements and conditions required to be
satisfied by it on the Closing Date under the Loan Documents.

 

(e)           Agents shall have received a certificate of a duly
authorized officer of each Obligor within such Borrower Group, certifying (i) that
attached copies of such Obligor’s Organic Documents are true and complete, and
in full force and effect, without amendment except as shown, (ii) that an
attached copy of resolutions authorizing execution and delivery of the Loan
Documents is true and complete, and that such resolutions are in full force and
effect, were duly adopted, have not been amended, modified or revoked, and
constitute all resolutions adopted with respect to this credit facility, and (iii) to
the title, name and signature of each Person authorized to sign the Loan
Documents.  Agents may conclusively rely
on this certificate until they are otherwise notified by the applicable Obligor
in writing.

 

(f)            Agents and Lenders shall have received a written opinion
of Jones Day,  counsel to Borrowers,
Foley & Lardner LLP, Michigan counsel to EGI, and Blake, Cassells &
Graydon LLP, Borrowers’ Canadian local counsel, and local counsel for state or
provincial jurisdiction of an Obligor’s organization or in which a Mortgage (or
amendment thereto) or other Lien filing is being recorded in each case in form
and substance satisfactory to Agents.

 

83

 

(g)           Agents shall have received copies of the charter documents
of each Obligor within such Borrower Group, certified as appropriate by the
Secretary of State or another official of such Obligor’s jurisdiction of
organization.  Agents shall have received
good standing certificates / certificates of status for each Obligor within
such Borrower Group, issued by the Secretary of State or other appropriate
official of such Obligor’s jurisdiction of organization and each jurisdiction
where such Obligor’s conduct of business or ownership of Property necessitates
qualification.

 

(h)           There shall not have occurred since December 31, 2007
any event or condition that has had, or could be reasonably expected, either
individually or in the aggregate, to have, a “Material Adverse Effect” (as
defined in the Merger Agreement), and SEHC (as defined in the Merger Agreement)
has not, without the prior written consent of Administrative Agent, made any
consent or request to SEI and its Subsidiaries in connection with clause (iv) of
the definition of “Material Adverse Effect” in Section 4.1(a) of the Merger Agreement that is
materially adverse to Agents’ and Lenders’ interests.

 

(i)            Agents and the Lenders shall have received:  (a)(I) unaudited consolidated balance
sheets, and related statements of income and cash flow of SEI, for each month
and Fiscal Quarter of the current Fiscal Year in each case ended at least 45
days before the Closing Date, which balance sheet and statement of income shall
be prepared in accordance with GAAP (without the requirement of footnote
disclosures), and (II) consolidating financial information on a subsidiary
or divisional basis, in each case with the same level of detail and in the same
form as currently provided under the Existing Loan Agreement, (b) with the
same level of detail and in the same form as currently provided by Borrowers
under the Existing Loan Agreement, a pro forma consolidated and consolidating
balance sheet of SEI as of the date of the most recent consolidated balance
sheet delivered pursuant to the preceding clause (a) and a pro forma
consolidated and consolidating statement of operations for the most recent
fiscal year, interim period (if available) and 12-month period ending on the
last day of such interim period, in each case adjusted to give effect to the
Merger, the other transactions related thereto and any other transactions that
would be required to be given pro forma effect by Regulation S-X promulgated under
the Securities Act of 1933 and such other adjustments as shall be agreed
between Holdings and the Administrative Agent (the “Pro Forma Financial
Statements”), and (c) a financial model of Borrowers to include
projected financial performance (including balance sheet and availability
projections and debt tranches) on a monthly basis for the first Loan Year and
on an annual basis thereafter, which financial model reflects the Borrowers’
ability to perform their obligations under the Loan Documents, and meet their
debts as they become due, after the Closing Date.

 

(j)            Agents shall have received all documentation and
information about the Equity Investors as is requested in writing by the Agents
under applicable “know your customer” and anti-money laundering rules and
regulations, including without limitation, the PATRIOT Act, in form and
substance satisfactory to the Agents and Lenders.

 

(k)           Either (A) the Merger shall have been consummated or (B) Holdings
shall have acquired more than 50% of the issued and outstanding capital stock
of SEI, in either case concurrently with or prior to the initial borrowing
under the Revolving Credit Facility in accordance with the terms of the Merger
Agreement and the related tender documents, and the Merger Agreement and the other
material agreements consisting of the tender documents and the organizational
documents of Merger SPC shall not have been altered, amended or otherwise
changed or supplemented or any condition therein waived without the prior
written consent of Administrative Agent (other than alterations, amendments,
changes, supplements or waivers that are not materially adverse to the
interests of Lenders).

 

84

 

(l)            The capital structure of the Holdings, SEI and the Borrowers,
after giving effect to the Merger and Related Transactions, and the flow of
funds with respect to the Merger and Related Transactions, shall all be
satisfactory to Agents and Lenders.

 

(m)          Agents shall be satisfied that, as of the Closing Date, the
sum of (A) Aggregate Availability under the Revolving Credit Facility plus
(B) Closing Date Pledged Cash, shall be not less than $60,000,000 after
giving effect to the Merger and Related Transactions (including all Merger
Transaction Costs) and all extensions of credit under the Revolving Credit
Facility on such date.

 

(n)           Borrowers within such Borrower Group shall have paid all
fees and expenses to be paid to Agents and Lenders on the Closing Date.

 

(o)           Agents shall have received copies of the property and
casualty insurance policies of Borrowers with respect to the Collateral of such
Borrower Group, or certificates of insurance with respect to such policies in
form acceptable to Administrative Agent, and loss payable endorsements on
Administrative Agent’s standard form (or other form acceptable to Agents) of
loss payee endorsement naming the Applicable Agent as sole lender’s loss payee
with respect to each such policy and copies of such Borrowers’ liability
insurance policies, including product liability policies, together with
endorsements naming the Applicable Agent as an additional insured, all as
required by the Loan Documents.

 

(p)           With respect to the issuance of any Letter of Credit on
the Closing Date, each of the LC Conditions is satisfied with respect to such
Borrower Group.

 

(q)           Each of the conditions specified in Section 6.2 is satisfied with respect
to such Borrower Group on the Closing Date (other than Section 6.2(f) with respect to
the Borrowers, and Section 6.2(g) and
(h) with respect to the U.S.
Borrowers).

 

(r)            Agents shall have received, and found acceptable, all
Related Real Estate Documents with respect to the Mortgaged Real Estate.

 

Notwithstanding the
satisfaction of each of the foregoing conditions precedent with respect to any
Borrower Group, no Credit Party shall have any obligation to make Revolver
Loans or otherwise extend credit to or for the benefit of any Borrower within
such Borrower Group unless all of the foregoing conditions precedent are also
satisfied with respect to the Borrower Group consisting of U.S. Borrowers.

 

6.2          Conditions
Precedent to All Credit Extensions.  No Credit Party shall be required to fund any
Loan or otherwise extend any credit to or for the benefit of Borrowers within a
Borrower Group, nor shall Issuing Banks or any Applicable Agent have any
obligation to issue any Letter of Credit for the account of any Borrower within
a Borrower Group, unless and until each of the following conditions has been
and continues to be satisfied with respect to such Borrower Group and its
members:

 

(a)           No Default or Event of Default exists
at the time, or would result from the funding, of any Revolver Loan or other
extension of credit pursuant to this Agreement to or for the benefit of such
Borrower Group;

 

(b)           Each of the representations and warranties applicable to
such Borrower Group or its members in any of the Loan Documents (including any
representations and warranties in any certificate furnished at any time in
connection herewith) are true and correct in all material respects on and as of
the date of each extension of credit hereunder (except for those
representations or warranties 

 

85

 

which expressly relate to an
earlier date); provided  that, with respect to those Loans made by
Lenders on the Closing Date, this condition precedent shall be limited to the
Specified Representations;

 

(c)           Each of the conditions precedent set forth in any other
Loan Document and applicable to such Borrower Group or its members shall have
been and shall remain satisfied;

 

(d)          No event shall have occurred and no condition shall exist
which has or could be reasonably expected to have a Material Adverse Effect
with respect to such Borrower Group;

 

(e)           Administrative Agent shall have received each Borrowing
Base Certificate then required by the terms of this Agreement or otherwise
requested by Administrative Agent, including a Borrowing Base Certificate as of
the most recent week-end preceding the Closing Date (unless otherwise provided
in Section 8.1 hereof);

 

(f)           With respect to the issuance for the account of any
Borrower Group member of any Letter of Credit pursuant to this Agreement after
the Closing Date, each of the LC Conditions is satisfied;

 

(g)          No request by the Canada Revenue Agency or any other
Governmental Authority for payment pursuant to Section 224 (1.1) or any
successor section of the ITA or any comparable provision of any other taxing
statute shall have been received by any Person in respect of such Borrower
Group or its members; and

 

(h)          There exists no fact or circumstance, including by reason
of the application of any so-called “currency exchange” laws, rules or
regulations (as in effect at the time of any proposed Borrowings hereunder by
such Borrower Group) which could reasonably be expected to interfere with the
ability of such Borrower Group or its members to satisfy any of their Borrower
Group Obligations in full at such time as such Obligations become due and
payable pursuant to the terms hereof.

 

Each request (or deemed request)
by Borrowers for funding of a Loan, issuance of a Letter of Credit or grant of
an accommodation shall constitute a representation by Borrowers that the
foregoing conditions are satisfied on the date of such request and on the date
of such funding, issuance or grant.  As
an additional condition to any funding, issuance or grant, Administrative Agent
shall have received such other information, documents, instruments and
agreements as it deems appropriate in connection therewith.

 

6.3                               Limited Waiver of Conditions Precedent.   If
Agents, Issuing Banks or Lenders fund any Loans, arrange for issuance of any
Letters of Credit pursuant to this Agreement or grant any other accommodation
when any conditions precedent are not satisfied (regardless of whether the lack
of satisfaction was known or unknown at the time), it shall not operate as a
waiver of (a) the right of Agents, Issuing Banks and Lenders to insist
upon satisfaction of all conditions precedent with respect to any subsequent
funding, issuance or grant; nor (b) any Default or Event of Default due to
such failure of conditions or otherwise.

 

SECTION 7.                        COLLATERAL

 

U.S. Borrowers have granted,
pursuant to the Existing Security Agreement and the security interest and
collateral provisions of the Existing Loan Agreement, and are concurrently
granting, pursuant to the terms and conditions of the U.S. Security Agreement
and the other Security Documents to which they are parties, to Administrative
Agent, security interests and Liens upon their respective portions of the 

 

86

 

Collateral as security for
the Obligations hereunder and under the U.S. Borrowers’ Guaranty.  Canadian Borrower is concurrently granting to
Administrative Agent security interests and Liens upon its respective portion
of the Collateral pursuant to the terms and conditions of the Canadian Security
Agreement and the other Security Documents to which it is a party as security
for the Canadian Obligations. The U.S. Security Agreement amends, restates and
continues the Existing Security Agreement as well as the security interest and
collateral provisions of the Existing Loan Agreement.   Notwithstanding anything to the contrary set
forth herein or in any of the other Loan Documents, the parties hereto
acknowledge and agree that the amendment and restatement of the Existing
Security Agreement and the security interest and collateral provisions of the
Existing Loan Agreement are not intended to constitute, nor do they constitute
or result in, a novation, interruption, suspension of continuity, satisfaction,
discharge, subordination or termination of the obligations, loans, liabilities
or indebtedness under the Existing Loan Agreement and the other Loan Documents,
or the collateral security and guaranties therefor, and the Secured Parties
pursuant to this Agreement and the U.S. Security Agreement, and the Obligations
hereunder and under the other Loan Documents, are entitled to all rights,
benefits and security originally pertaining to the Existing Loan Agreement and
the other Loan Documents (as defined therein).

 

SECTION 8.      COLLATERAL
ADMINISTRATION

 

8.1          Borrowing
Base Certificates.   On the Closing Date and on or prior to the
twentieth (20th) day of each calendar month thereafter, Borrowers shall deliver
to Administrative Agent (and Administrative Agent shall promptly deliver same
to the Applicable Lenders) a Borrowing Base Certificate prepared as of the
close of business of the previous calendar month; provided, however, that if
the Aggregate Availability of Borrowers is less than $50,000,000 or if an Event
of Default then exists, then upon Administrative Agent’s reasonable request,
Borrowers shall deliver to Administrative Agent (and Administrative Agent shall
upon request from a Lender, promptly deliver to such Lender) a Borrowing Base
Certificate on or before the fourth (4th) Business Day of each week, prepared
as of the close of business in the last Business Day of the preceding week,
until such time as the Aggregate Availability of Borrowers is equal to or
exceeds $50,000,000 or such Event of Default is cured or waived.  All calculations of Availability or Aggregate
Availability in any Borrowing Base Certificate shall originally be made by
Borrowers and certified by a Responsible Officer; provided  that
Administrative Agent may from time to time review and adjust any such
calculation to the extent the calculation is not made in accordance with this
Agreement or does not accurately reflect the Availability Reserve; provided,
further, that to the extent that any Borrowing Base Certificate does not
accurately reflect an Availability Reserve established by Agent in its Credit
Judgment, then such inaccuracy shall not result in a breach of the Borrowers’
representations and warranties made with respect to such Borrowing Base
Certificate.  Each Borrowing Base
Certificate shall be sent to the Appropriate Notice Office of Administrative
Agent and shall set forth the calculation of the U.S. Borrowing Base in
Dollars, and the Canadian Borrowing Base in Canadian Dollars and in Dollars,
provided that, in expressing the Canadian Borrowing Base in Dollars on any
date, the Dollar amount with reference to another currency shall be equal to
the amount of Dollars that Administrative Agent reasonably determines (which
determination shall be communicated to Borrower Agent and shall be conclusive
and binding absent manifest error) could be purchased on such date at the
applicable Exchange Rate with the other currency.  In no event shall the Borrowing Base (or the
U.S. Borrowing Base or the Canadian Borrowing Base) or Aggregate Availability
on any date be deemed to exceed the amounts shown on the Borrowing Base
Certificate last received by Administrative Agent prior to such date.

 

8.2          Administration
of Eligible Accounts

 

8.2.1        Records and Schedules of Accounts.
  Each Borrower shall keep accurate and complete
records of its Accounts, including all payments and collections thereon, and
shall submit to 

 

87

 

Administrative Agent, on such
periodic basis as Administrative Agent may reasonably request, a sales and
collections report solely with respect to Accounts, in form satisfactory to
Administrative Agent (which form shall be substantially consistent with forms
required by Administrative Agent from its other customers in the same or
similar business as Borrowers (other than changes necessary due to Borrowers’
specific business operations).  Each
Borrower shall also provide to Administrative Agent, together with the
Borrowing Base Certificate delivered in accordance with Section 8.1, a detailed aged trial
balance of all Accounts as of the end of the preceding period, specifying each
Account’s Account Debtor name and address, amount, invoice date and due date,
and, to the extent that a Borrower grants any discount, allowance, credit,
authorized return or dispute that is not shown on the face of the invoice for
the Account involved, showing any such discount, allowance, credit, authorized
return or dispute and including such proof of delivery, copies of invoices and
invoice registers, copies of related documents, repayment histories, status
reports and other information as Administrative Agent may reasonably
request.  If Accounts of a Borrower or
Borrowers within a Borrower Group having an aggregate face amount of $2,000,000
or more in the case of U.S. Borrowers, or $500,000 in the case of Canadian
Borrower, cease to be Eligible Accounts, Borrower Agent shall notify
Administrative Agent of such occurrence promptly (and in any event within two (2) Business
Days) after any Borrower has knowledge thereof.

 

8.2.2        Taxes.  If an Eligible Account of any Borrower
includes a charge for any Taxes, Administrative Agent is authorized, in its
discretion from and after the occurrence and during the continuation of an
Event of Default, to pay the amount thereof to the proper taxing authority for
the account of such Borrower and to charge such Borrower and the members of its
Borrower Group therefor; provided, however, that neither Administrative Agent
nor Lenders shall be liable for any Taxes that may be due from Borrowers or
with respect to any Collateral.

 

8.2.3        Account Verification.   Whether
or not an Event of Default exists, Administrative Agent shall have the right at
any time (but limited to regular business hours to the extent no Event of
Default then exists), in the name of Administrative Agent, any designee of
Administrative Agent or any Borrower to verify the validity, amount or any
other matter relating to any Eligible Accounts of Borrowers by mail, telephone
or otherwise.  Borrowers shall cooperate
fully with Administrative Agent in an effort to facilitate and promptly
conclude any such verification process.

 

8.2.4        Maintenance of Deposit Accounts.   Each Borrower Group shall maintain Deposit
Accounts designated for such Borrower Group, pursuant to lockbox or other
arrangements acceptable to the Applicable Agent.  Borrowers shall obtain a Deposit Account
Control Agreement (in form and substance satisfactory to Administrative Agent)
from each lockbox servicer and depository bank, for each lockbox or Dominion
Account, establishing Administrative Agent’s control over and Lien in the
lockbox or Dominion Account; provided, that, the parties agree
that Canadian Borrower may obtain and deliver a Deposit Account Control
Agreement with respect to its Dominion Account within ten (10) Business
Days after the Closing Date.  Pursuant to
such Deposit Account Control Agreements, (a) prior to any depository bank’s
receipt of a Springing Dominion Notice from the Applicable Agent arising from
the occurrence of a Springing Dominion Event, such depository bank shall remit
all funds deposited into such Dominion Account pursuant to the instructions of
Obligors within such Borrower Group, and (b) after any depository bank’s
receipt of a Springing Dominion Notice, such depository bank shall immediately,
and without further consent of or notice to any Obligor, transfer to the
Applicable Payment Account all monies deposited to such Dominion Account solely
pursuant to the instructions of the Applicable Agent until delivery of further
notice by the Applicable Agent.  If,
after a Springing Dominion Notice has been delivered, Borrowers maintain
Aggregate Availability of at least $35,000,000 for a 90 consecutive day period
and no Event of Default occurs or exists during such 90-day period, then the
Applicable Agent will withdraw the Springing Dominion Notice upon expiration of
such 90-day period and shall not deliver another Springing Dominion Notice
unless and until another Springing Dominion Event occurs.  Neither 

 

88

 

Administrative Agent nor any
of Lenders assume any responsibility to Borrowers for any lockbox arrangement
or Deposit Account, including any claim of accord and satisfaction or release
with respect to any Payment Items accepted by any bank.  Notwithstanding anything to the contrary in
this Section 8.2.4, for so
long as no Springing Dominion Event occurs, the Deposit Accounts of Borrowers
maintained in Mexico shall not be subject to this Section 8.2.4.

 

8.2.5        Proceeds of Collateral.   Borrowers shall request in writing and
otherwise take all reasonable steps to ensure that all payments on Accounts or
otherwise relating to Collateral are made directly to a Dominion Account (or a
lockbox relating to a Dominion Account). 
If any Borrower or any of its Subsidiaries receives cash or Payment
Items with respect to any Collateral, it shall promptly (not later than the
next Business Day) deposit the same into a Dominion Account subject to a
Deposit Account Control Agreement.

 

8.3          Administration
of Inventory

 

8.3.1        Records and Reports of Inventory.
  Each Borrower within a Borrower Group shall
keep accurate and complete records of its Inventory, including costs and daily
withdrawals and additions, and shall submit to Administrative Agent inventory
reports with respect to Inventory in form satisfactory to Administrative Agent
(which reports shall be substantially consistent with reports required by
Administrative Agent from its other customers in the same or similar business
as Borrowers (other than changes necessary due to Borrowers’ specific business
operations), on such periodic basis as Administrative Agent may reasonably
request but in no event more frequently than once per calendar month if no
Default or Event of Default exists.  Each
Borrower shall conduct a physical inventory of Inventory at least once per
calendar year (and on a more frequent basis if requested by Administrative
Agent when an Event of Default exists) and periodic cycle counts consistent
with historical practices, and shall provide to Administrative Agent a report
based on each such inventory and count promptly upon completion thereof,
together with such supporting information as Administrative Agent may
reasonably request.  Administrative Agent
may participate in and observe each inventory or physical count of Inventory,
at the expense of the Borrowers within such Borrower’s Borrower Group.

 

8.3.2        Returns of Inventory.  No Borrower shall return any Inventory to a
supplier, vendor or other Person, whether for cash, credit or otherwise, unless
(a) such return is in the Ordinary Course of Business; (b) no
Default, Event of Default or Overadvance applicable to such Borrower or its
Borrower Group exists or would result therefrom; and (c) any payment
received by a Borrower for a return is promptly remitted to the Applicable
Agent for application to the Obligations to the extent required under Section 8.2.4.

 

8.3.3        Acquisition, Sale and Maintenance.
  No Borrower shall acquire or accept Eligible
Inventory on consignment or approval, and shall cause all Eligible Inventory to
be produced in accordance with all material aspects of Applicable Law,
including the FLSA (with respect to Eligible Inventory that is produced in the
United States of America).  No Borrower
shall sell any Eligible Inventory on approval or any other basis under which
the customer may return or require a Borrower to repurchase such Eligible
Inventory (except Consigned Inventory for which the Consigned Inventory Conditions
are met) (it being acknowledged that the foregoing does not include the
discretionary decisions on the part of a Borrower to repurchase Eligible
Inventory and Eligible Inventory sold on consignment).  Borrowers shall use, store and maintain all Eligible
Inventory with reasonable care and caution, in accordance with applicable
standards of any insurance and in conformity with all material respects of all
Applicable Law, and shall make current rent payments (within applicable grace
periods provided for in leases) at all locations where any Eligible Inventory
is located.

 

89

 

8.4          Administration
of Equipment

 

8.4.1        Records and Schedules of Equipment.
  Each Borrower within a Borrower Group shall
keep accurate and complete records of its Equipment which has a fair market
value in excess of $500,000, including kind, quality, quantity, cost,
acquisitions and dispositions thereof. 
Promptly upon Administrative Agent’s reasonable request (but no more
frequently than once per Fiscal Quarter unless an Event of Default then
exists), Borrowers shall deliver to Administrative Agent evidence of their
ownership or interests in any Equipment which has a fair market value in excess
of $500,000.

 

8.4.2        Dispositions of Equipment.   No
Borrower shall sell, lease or otherwise dispose of any Equipment, without the
prior written consent of Administrative Agent, other than (a) a Permitted
Asset Disposition; (b) replacement of Equipment that is worn, damaged or
obsolete with Equipment of like function and value, if the replacement
Equipment is acquired substantially contemporaneously with such disposition and
is free of Liens other than Permitted Liens; and (c) dispositions of
Equipment by a Borrower to another Borrower or any Guarantor.

 

8.4.3        Condition of Equipment.   Each
Borrower shall use commercially reasonable efforts to ensure that material
Equipment is in good operating condition and repair, and all necessary
replacements and repairs have been made, reasonable wear and tear
excepted.  No Borrower shall permit any
material Equipment to become affixed to real Property (other than (i) the
real Property subject to the Brownwood Lease so long as such real Property is
purchased by Borrowers pursuant to the terms of Section 10.2.8(b) and (ii) the real Property
consisting of Borrowers’ magnet wire manufacturing plant at 120 Southeast
Parkway Drive, Franklin, Tennessee) unless such Borrower obtains and delivers
to the Applicable Agent a Lien Waiver or similar instrument from the relevant
landlord or mortgagee.

 

8.5          Administration
of Deposit Accounts.   Schedule
8.5 sets forth all Deposit Accounts maintained by
Borrowers.  Subject to Section 8.2.4, Borrowers shall take
all actions necessary to establish the Applicable Agent’s control (as defined
under Section 9-104 of the UCC) of each such Deposit Account (other than (i) an
account exclusively used for payroll, payroll taxes, employee benefits, workers’
compensation claims, prepaid insurance, (ii) any account maintained
exclusively for, and in required pursuant to, Hedging Agreements, or (iii) an
account containing not more than $250,000 at any time).  Only one Borrower shall be the sole account
holder of each Deposit Account and shall not allow any other Person (other than
the Applicable Agent) to have control over such Deposit Account or any Property
deposited therein.  Each Borrower shall
promptly notify the Applicable Agent on a monthly basis of any opening or
closing of a Deposit Account and, with the consent of the Applicable Agent,
will amend Schedule 8.5 to
reflect the same.

 

8.6          General
Provisions.

 

8.6.1        Location of Collateral.   All
tangible items of Collateral, other than Inventory in transit and Consigned
Inventory, shall at all times be kept by Borrowers at the business locations
set forth in Schedule 8.6.1,
except that Borrowers may (a) make sales or other dispositions of
Collateral in accordance with Section 10.2.6;
and (b) move Collateral to another location in the United States (if it is
a U.S. Obligor) or in Canada (if it is a Canadian Obligor), upon ten (10) Business
Days prior written notice to Administrative Agent, and so long as there have
been filed, registered or published any Required Perfection Documents with
respect to each Applicable Agent’s Liens upon such Collateral.

 

90

 

8.6.2        Insurance of Collateral; Condemnation
Proceeds.

 

(a)           Each Borrower shall maintain
insurance with respect to the Collateral, covering casualty, hazard, public
liability, theft, malicious mischief, and such other risks, in such amounts as
are usually insured against by companies of a similar size engaged in similar
businesses in the same geographic area (but at a minimum providing for property
coverage not less than 100% of the value of the Collateral), and with those
insurance companies reflected on Schedule
8.6.2 or such other sound and reputable insurers as are
reasonably satisfactory to the Applicable Agent.  From time to time as reasonably requested by
the Applicable Agent, Borrowers shall deliver the originals or certified copies
of its insurance policies to the Applicable Agent.  Unless the Applicable Agent shall agree
otherwise, each policy shall include satisfactory endorsements (i) showing
the Applicable Agent as lender loss payee, mortgagee or additional insured, as
appropriate; (ii) requiring thirty (30) days prior written notice to the
Applicable Agent in the event of cancellation of the policy for any reason
whatsoever other than non-payment of premiums (in which case ten (10) days
prior written notice shall be required); and (iii) specifying that the
interest of the Applicable Agent shall not be impaired or invalidated by any
act or neglect of any Borrower or the owner of the Property, nor by the
occupation of the premises for purposes more hazardous than are permitted by
the policy.  If any Borrower fails to
provide and pay for such insurance, any Agent may, at its option, but shall not
be required to, procure the insurance and charge Borrowers therefor.  Each Borrower agrees to deliver to Agents,
promptly as rendered, copies of all material reports made in any reporting
forms to insurance companies.  While no
Event of Default exists, Borrowers with a Borrower Group may settle, adjust or
compromise any insurance claim, as long as the proceeds are delivered to
Administrative Agent or otherwise reinvested to the extent permitted by this
Agreement.  If an Event of Default
exists, only the Applicable Agent shall be authorized to settle, adjust and compromise
such claims.

 

(b)           Any proceeds of property or casualty insurance and any
awards arising from a Casualty Event or condemnation of any Collateral shall be
paid to the Applicable Agent or otherwise reinvested to the extent permitted by
this Agreement.  Any such proceeds or
awards that relate to Inventory shall be applied to payment of the Revolver
Loans of the applicable Borrower Group, and then to any other Obligations of
the applicable Borrower Group outstanding. 
Subject to clause (c) below, any proceeds or awards that relate to
Equipment or Real Estate included in the calculation of the Fixed Asset Formula
Amount shall be applied to reduce the Fixed Asset Formula Amount of the
applicable Borrower Group, then to the other Revolver Loans of the applicable
Borrower Group, and then to other Obligations of the applicable Borrower Group.

 

(c)           Borrowers may use insurance proceeds or condemnation
awards relating to any loss or destruction of Equipment or Real Estate to
repair or replace such Equipment or Real Estate as long as (i) no Default
or Event of Default exists; (ii) such repair or replacement is promptly
undertaken and concluded, in accordance with plans satisfactory to the
Applicable Agent ; (iii) replacement buildings are of comparable size,
quality and utility to the destroyed buildings; (iv) the repaired or
replaced Property is free of Liens, other than Permitted Liens that are not
Purchase Money Liens; (v) Borrowers comply with disbursement procedures
for such repair or replacement as Administrative Agent may reasonably require
(including the payment by Borrowers of the insurance proceeds or condemnation
awards to the Applicable Agent to be held as Cash Collateral until payment
thereof is required under the plans approved by the Applicable Agent under
clause (ii) above); and (vi) the aggregate amount of such proceeds or
awards from any single Casualty Event or condemnation does not exceed
$5,000,000.

 

8.6.3        Protection of Collateral.   All
expenses of protecting, storing, warehousing, insuring, handling, maintaining
and shipping any Collateral, all Taxes payable with respect to any Collateral
(including upon any sale thereof), and all other payments required to be made
by any Agent to any Person to realize upon any Collateral, shall be borne and
paid by Borrowers.  Agents shall not be
liable or responsible in any way for the safekeeping of any Collateral, for any
loss or damage thereto 

 

91

 

(except for reasonable care
in its custody while Collateral is in the Applicable Agent’s actual possession),
for any diminution in the value thereof, or for any act or default of any
warehouseman, carrier, forwarding agency or other Person whatsoever, but the
same shall be at Borrowers’ sole risk.

 

8.6.4        Defense of Title to Collateral.   Each
Borrower shall at all times use commercially reasonable efforts to defend its
title to Collateral and the Applicable Agent’s Liens therein against all
Persons, claims and demands whatsoever, except Permitted Liens.

 

8.7          Power of
Attorney.   Each Borrower within a Borrower Group hereby
irrevocably constitutes and appoints the Applicable Agent (and all Persons
designated by the Applicable Agent) as such Borrower’s true and lawful attorney
(and agent-in-fact) for the purposes provided in this Section.  The Applicable Agent, or such Applicable
Agent’s designee, may, without notice and in either its or a Borrower’s name,
but at the reasonable cost and expense of Borrowers:

 

(a)           Endorse a Borrower’s name on any
Payment Item or other proceeds of Collateral (including proceeds of insurance)
that come into the Applicable Agent’s possession or control; and

 

(b)           During the existence of an Event of Default, (i) notify
any Account Debtors of the assignment of their Accounts, demand and enforce
payment of Accounts, by legal proceedings or otherwise, and generally exercise
any rights and remedies with respect to Accounts; (ii) settle, adjust,
modify, compromise, discharge or release any Accounts or other Collateral, or
any legal proceedings brought to collect Accounts or Collateral; (iii) sell
or assign any Accounts and other Collateral upon such terms, for such amounts
and at such times as Administrative Agent deems advisable; (iv) take
control, in any manner, of any proceeds of Collateral; (v) prepare, file
and sign a Borrower’s name to a proof of claim or other document in a
bankruptcy of an Account Debtor, or to any notice, assignment or satisfaction
of Lien or similar document; (vi) receive, open and dispose of mail
addressed to a Borrower, and notify postal authorities to change the address
for delivery thereof to such address as the Applicable Agent may designate; (vii) endorse
any Chattel Paper, Document, Instrument, invoice, freight bill, bill of lading,
or similar document or agreement relating to any Accounts, Inventory or other Collateral;
(viii) use a Borrower’s stationery and sign its name to verifications of
Accounts and notices to Account Debtors; (ix) use the information recorded
on or contained in any data processing equipment and computer hardware and
software relating to any Collateral; (x) make and adjust claims under
policies of insurance; (xi) take any action as may be necessary or appropriate
to obtain payment under any letter of credit or banker’s acceptance for which a
Borrower is a beneficiary; and (xii) take all other actions as the Applicable
Agent deems appropriate to fulfill any Borrower’s obligations under the Loan
Documents.

 

SECTION 9.      REPRESENTATIONS
AND WARRANTIES

 

9.1          General
Representations and Warranties.   To
induce Agents and Lenders to enter into this Agreement and to make available
the Borrower Group Commitments, Loans and Letters of Credit, each Borrower
represents and warrants to the Credit Parties that:

 

9.1.2        Organization and Qualification.   Each
Borrower and its Subsidiaries are duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization.  Each Borrower and its Subsidiaries are duly
qualified, authorized to do business and in good standing as a foreign corporation
in each jurisdiction where failure to be so qualified could reasonably be
expected to have a Material Adverse Effect.

 

9.1.3        Power and Authority; No Conflicts.
  Each Obligor is duly authorized to execute,
deliver and perform its Loan Documents. 
The execution, delivery and performance of the Loan 

 

92

 

Documents have been duly
authorized by all necessary action, and do not (a) require any consent or
approval of any holders of Equity Interests of any Obligor, other than those
already obtained; (b) contravene the Organic Documents of any Obligor; (c) violate
or cause a default under any Applicable Law or Material Contract; or (d) result
in or require the imposition of any Lien (other than Permitted Liens) on any
Property of any Obligor.

 

9.1.4        Enforceability.   Each
Loan Document is a legal, valid and binding obligation of each Obligor party
thereto, enforceable in accordance with its terms, except as enforceability may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the enforcement of creditors’ rights generally, subject to
general principles of equity, regardless of whether considered in a proceeding
in equity or law.

 

9.1.5        Capital Structure.   Schedule 9.1.4 shows, for each Borrower
and its Subsidiaries, its name, its jurisdiction of organization, its
authorized and issued Equity Interests, the holders of its Equity Interests,
and all agreements binding on such holders with respect to their Equity
Interests, and each Borrower and its Subsidiaries have good title to its Equity
Interests in its Subsidiaries, free of any Lien (other than Permitted Liens),
and all such Equity Interests are duly issued, fully paid and
non-assessable.  There are no outstanding
options to purchase, warrants, subscription rights, agreements to issue or
sell, convertible interests, phantom rights or powers of attorney relating to
any Equity Interests of any Borrower or its Subsidiaries.

 

9.1.6        Corporate Names; Locations.   During
the five years preceding the Closing Date, except as shown on Schedule 9.1.5, no Borrower or any of
its Subsidiaries has been known as or used any corporate, fictitious or trade
names, has been the surviving corporation of a merger, amalgamation or
combination, or has acquired any substantial part of the assets of any
Person.  The chief executive offices and
other places of business of Borrowers and their Subsidiaries are shown on Schedule 8.6.1.  During the five years preceding the Closing
Date, no Borrower or any of its Subsidiaries has had any other office or place
of business.

 

9.1.7        Title to Properties; Priority of
Liens.   Each Borrower and its Subsidiaries have good
and marketable title to (or valid leasehold interests in) all of its Real
Estate, and good title to all of its material personal Property, including all
material Property reflected in any financial statements delivered to
Administrative Agent or Lenders, in each case free of Liens except Permitted
Liens.  Each Borrower and its
Subsidiaries have paid and discharged all lawful claims that, if unpaid, could
become a Lien on its Properties, other than Permitted Liens.  All Liens of Agents in the Collateral are
duly perfected, first priority Liens, subject only to Permitted Liens that are
not required to be junior to Agents’ Liens pursuant to Section 10.2.2.

 

9.1.8        Accounts.   Each of
the Agents may rely, in determining which Accounts are Eligible Accounts, on
all statements and representations made by Borrowers with respect thereto.  Borrowers warrant, with respect to each
Account at the time it is shown as an Eligible Account in a Borrowing Base
Certificate, that:

 

(b)           it is genuine and in all respects
what it purports to be, and is not evidenced by a judgment;

 

(c)           it arises out of a completed, bona fide sale and delivery
of goods in the Ordinary Course of Business, and substantially in accordance
with any purchase order, contract or other document relating thereto;

 

93

 

(d)           it is for a sum certain, maturing as stated in the invoice
covering such sale, a copy of which has been furnished or is available to the
Applicable Agent on request;

 

(e)           it is not subject to any offset, Lien (other than the
Applicable Agent’s Lien), deduction, defense, dispute, counterclaim or other
adverse condition except as arising in the Ordinary Course of Business and
disclosed to the Applicable Agent; and it is absolutely owing by the Account
Debtor, without contingency in any respect;

 

(f)            no purchase order, agreement, document or Applicable Law
restricts assignment of the Account to the Applicable Agent (regardless of
whether, under the UCC or the PPSA, the restriction is ineffective);

 

(g)           no extension, compromise, settlement, modification,
credit, deduction or return has been authorized with respect to the Account, except
discounts or allowances granted in the Ordinary Course of Business that are
reflected on the face of the invoice related thereto and in the reports
submitted to the Applicable Agent hereunder; and

 

(h)           to the best of Borrowers’ knowledge, (i) there are no
facts or circumstances that are reasonably likely to impair the enforceability
or collectibility of such Account; (ii) the Account Debtor had the
capacity to contract when the Account arose, continues to meet the applicable
Borrower’s customary credit standards, is Solvent, is not contemplating or
subject to an Insolvency Proceeding, any liquidation, dissolution or winding
up, and has not failed, or suspended or ceased doing business; and (iii) there
are no proceedings or actions threatened or pending against any Account Debtor
that could reasonably be expected to have a material adverse effect on the
Account Debtor’s financial condition.

 

9.1.9        Financial Statements.   The
consolidated and consolidating balance sheets, and related statements of
income, cash flow and shareholder’s equity, of SEI (including its direct and
indirect Subsidiaries and SE Holding and its subsidiaries) that have been and
are from time to time hereafter delivered to Administrative Agent and Lenders,
are prepared in accordance with GAAP, (A) except as otherwise expressly
noted therein and (B) subject, in the case of the quarterly financial
statements, to changes resulting from audit, normal year-end audit adjustments
and the absence of footnotes, and fairly present in all material respects the
financial positions and results of operations of SEI, Borrowers and their
Subsidiaries, SE Holdings and its Subsidiaries at the dates and for the periods
indicated.  All projections delivered
from time to time to Agents and Lenders based upon estimates and assumptions
stated therein, all of which Borrowers believe to be reasonable and fair in
light of the then-current conditions and the then-current facts known to
Borrowers and, as of the date of delivery thereof, reflect the Borrowers’ good
faith and reasonable estimates (in all material respects) of the future
financial performance of Borrowers and of the other information projected
therein for the period set forth therein, it being recognized by Agents and
Lenders that projections as to future events are not to be viewed as facts or
factual information and that actual results during the period or periods
covered thereby may differ materially from projected results.  As of the Closing Date, since December 31,
2007, there has been no change in the condition, financial or otherwise, of any
Borrower or any of its Subsidiaries that has had, or could reasonably be
expected, either individually or in the aggregate, to have a Material Adverse
Effect (as defined in the Merger Agreement). 
No financial statement delivered to Agents or Lenders at any time
contains any untrue statement of a material fact, nor fails to disclose any
material fact necessary to make such statement not materially misleading.  Each Borrower is Solvent.

 

9.1.10      Surety Obligations.   No
Borrower nor any of its Subsidiaries is obligated as surety or indemnitor under
any bond or other contract that assures payment or performance of any
obligation of any Person, except as permitted hereunder or as otherwise
disclosed on Schedule 9.1.9.

 

94

 

9.1.11      Taxes.  Each Borrower and its Subsidiaries have filed
all material federal, state and local tax returns and other material reports
that it is required by law to file, and has paid, or made provision for the
payment of, all material Taxes upon it, its income and its Properties that are due and
payable, except to the extent being Properly Contested.  The provision for Taxes on the books of each
Borrower and its Subsidiaries is adequate for its current Fiscal Year to the
Closing Date.

 

9.1.12      Brokers.  Other than the fees provided in the Fee
Letter, there are no brokerage commissions, finder’s fees or investment banking
fees payable in connection with any transactions contemplated by the Loan
Documents.

 

9.1.13      Intellectual Property.  Each Borrower and its Subsidiaries own or
have the lawful right to use all material Intellectual Property necessary for
the conduct of its business, without infringement upon any rights of others,
except for infringements that could not reasonably be expected to have a Material
Adverse Effect.  Except as disclosed on Schedule 9.1.12, there is no pending
or, to any Borrower’s knowledge, threatened Intellectual Property Claim with
respect to any Borrower, any of its Subsidiaries or any of their Property
(including any material Intellectual Property). 
Except as disclosed on Schedule
9.1.12, no Borrower nor any of its Subsidiaries owes any Royalty
or other compensation to any Person with respect to any material registered
Intellectual Property.  All material
registered Intellectual Property owned, used or licensed by, or otherwise
subject to any interests of, any Borrower or its Subsidiaries is shown on Schedule 9.1.12.

 

9.1.14      Governmental Approvals.  Each Borrower and its Subsidiaries has, is in
compliance with, and is in good standing with respect to, all Governmental
Approvals necessary to conduct its business and to own, lease and operate its
Properties except where the failure to obtain or maintain such Governmental
Approval could not reasonably be expected to have a Material Adverse
Effect.  All necessary import, export or
other licenses, permits or certificates for the import or handling of any goods
or other Collateral have been procured and are in effect, and Borrowers and
their Subsidiaries have complied with all foreign and domestic laws with
respect to the shipment and importation of any goods or Collateral, except
where noncompliance could not reasonably be expected to have a Material Adverse
Effect.

 

9.1.15      Compliance with Laws.  Each Borrower and its Subsidiaries has duly
complied, and their Properties and business operations are in compliance, with
all Applicable Law, except where noncompliance could not reasonably be expected
to have a Material Adverse Effect.  There
have been no citations, notices or orders of noncompliance issued to any
Borrower or its Subsidiaries under any Applicable Law which could reasonably be
expected to have a Material Adverse Effect. 
To the best knowledge of the Borrowers, no Eligible Inventory has been
produced in violation of the FLSA.

 

9.1.16      Environmental Matters.  The Borrowers’ and their Subsidiaries’
representations and warranties with respect to environmental matters are set
forth in the Environmental Agreement.

 

9.1.17      Burdensome Contracts.   No Borrower or any of its Subsidiaries is a
party or subject to any Restrictive Agreement, except as shown on Schedule 9.1.16, none of which prohibit
the execution or delivery of any Loan Documents by an Obligor nor the
performance by an Obligor of any obligations thereunder.

 

9.1.18      Litigation.  Except as shown on Schedule 9.1.17, there are no
proceedings or investigations pending or, to any Borrower’s knowledge,
threatened against any Borrower or any of its Subsidiaries, or any of their
businesses, operations, Properties or conditions, that (a) relate to any
Loan Documents or transactions contemplated thereby; or (b) could
reasonably be expected to have a Material 

 

95

 

Adverse Effect if determined
adversely to any Borrower or Obligor (after giving effect to any insurance
coverage applicable thereto).  No
Borrower or any of its Subsidiaries is in default in any material respect with
respect to any material order, injunction or judgment of any Governmental
Authority.

 

9.1.19      No Defaults.  No event or circumstance has occurred or
exists that constitutes a Default or Event of Default.  No Borrower or nor any of its Subsidiaries is
in default, and no event or circumstance has occurred or exists that with the passage
of time or giving of notice would constitute a Borrower default, under any
Material Contract or in the payment of any Borrowed Money with a principal
aggregate amount of $5,000,000.

 

9.1.20      ERISA.  Except as disclosed on Schedule 9.1.19, no Borrower or any of
its Subsidiaries has any Multiemployer Plan or Canadian Pension Plan.  Each Borrower and its Subsidiaries are in
material compliance with the requirements of all Applicable Law, including
ERISA, relating to each Multiemployer Plan. 
No fact or situation exists that could reasonably be expected to result
in a Material Adverse Effect in connection with any Multiemployer Plan.  No Obligor is liable for any withdrawal
liability in connection with a Multiemployer Plan.  Each of the Canadian Pension Plans which is
sponsored and administered by the Canadian Borrower or any of its Subsidiaries
is duly registered under and has been administered in compliance with the ITA
and all other Applicable Pension Legislation, except where the failure to so
comply could not reasonably be expected to have a Material Adverse Effect; all
obligations of Canadian Borrower or any of its Subsidiaries (including
fiduciary, funding, investment and administration obligations) required to be
performed in connection with any Canadian Pension Plan which is sponsored and
administered by the Canadian Borrower or any of its Subsidiaries and the
funding agreements therefor have been performed in a timely fashion, except
where the failure to so perform could not reasonably be expected to have a
Material Adverse Effect; there are no outstanding disputes, actions, suits or
claims concerning the assets of any Canadian Pension Plan which is sponsored
and administered by the Canadian Borrower or any of its Subsidiaries (other
than any claims for benefits in the Ordinary Course of Business) that could
reasonably be expected to result in a Material Adverse Effect; Canadian
Borrower and its Subsidiaries have withheld all required employee withholdings
and have made all required employer contributions to be made by it pursuant to
any Applicable Pension Legislation on account of each Canadian Pension Plan,
Canadian Benefit Plan, and Canadian employment insurance and employee income
taxes, except where the failure to do so could not reasonably be expected to
have a Material Adverse Effect; and no condition exists or transaction has
occurred in connection with any Canadian Pension Plan or Canadian Benefit Plan
which could result in the incurrence by Canadian Borrower or any of its
Subsidiaries of any liability, fine or penalty that could reasonably be
expected to result in a Material Adverse Effect; no Pension Event that could
reasonably be expected to result in a Material Adverse Effect has occurred; and
no Lien has arisen, choate or inchoate, in respect of Canadian Borrower or its
Property, in connection with any Canadian Pension Plan (save for contributions
amounts not yet due).

 

9.1.21      Trade Relations.  As of the Closing Date, there exists no
actual or, to the knowledge of Borrowers, threatened termination, limitation or
modification of any business relationship between any Borrower and its
Subsidiaries and any customer or supplier, or any group of customers or
suppliers, which individually or in the aggregate could reasonably be expected
to have a Material Adverse Effect on the business of such Borrower or its
Subsidiaries.  As of the Closing Date,
there exists no condition or circumstance that could reasonably be expected to
materially impair the ability of any Borrower or its Subsidiaries to conduct
its business at any time hereafter in substantially the same manner as
conducted on the Closing Date.

 

9.1.22      Labor Relations  Except as described on Schedule 9.1.21, no Borrower or any of
its Subsidiaries is on the Closing Date party to or bound by any collective
bargaining agreement.  On the 

 

96

 

Closing Date, there are no
material grievances, disputes or controversies with any union or other
organization of Borrower’s or its Subsidiaries’ employees, or, to any Borrower’s
knowledge, any asserted or threatened strikes, work stoppages or demands
for collective bargaining.

 

9.1.23      Payable Practices  No Borrower or any of its Subsidiaries has
made any  change to its historical
accounts payable practices from those in effect on the Closing Date except those
changes that are required by any Change of Law (including changes to GAAP) or
could not reasonably be expected to result in a Material Adverse Effect.

 

9.1.24      Not a Regulated Entity  No Obligor is an “investment company” or a “person
directly or indirectly controlled by or acting on behalf of an investment
company” within the meaning of the Investment Company Act of 1940.

 

9.1.25      Margin Stock  No Borrower nor any of its Subsidiaries is
engaged, principally or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any Margin
Stock.  No Loan proceeds or Letters of
Credit will be used by it to purchase or carry, or to reduce or refinance any
Debt incurred to purchase or carry, any Margin Stock in violation of Regulation
U of the Board of Governors.

 

9.1.26      Plan Assets  No Borrower is an entity deemed to hold “plan
assets” within the meaning of 29 C.F.R. §2510.3-101 of any “employee benefit
plan” (as defined in Section 3(3) of ERISA) that is subject to Title
I of ERISA or any “plan” (within the meaning of Section 4975 of the
Internal Revenue Code), and neither the execution of this Agreement nor the
funding of any Loans gives rise to a prohibited transaction within the meaning
of Section 406 of ERISA or Section 4975 of the Internal Revenue Code.

 

9.1.27      Real Estate.  Except as disclosed on Schedule 9.1.26 hereto, none of the
Mortgaged Real Estate of any Borrower is located in an area that has been
identified by the Secretary of Housing and Urban Development as an area having
special flood hazards and in which flood insurance has been made available
under the National Flood Insurance Act of 1968 and to the extent such Real
Estate is located in such an area, Borrowers have obtained acceptable flood insurance
with respect thereto.

 

9.2          Complete
Disclosure  No Loan
Document contains any untrue statement of a material fact, nor fails to
disclose any material fact necessary to make the statements contained therein
not materially misleading in each case, in light of the facts and circumstances
existing at the time any such statement was made.  Additionally, none of the reports, financial
statements, certificates or other information (other than any projections, pro
formas, budgets and general market information) concerning the Obligors
furnished by or on at the direction of any Obligor to any Credit Party in
connection with the negotiation of this Agreement or any other Loan Document or
delivered hereunder or thereunder (as modified or supplemented by other information
so furnished), when taken as a whole, contains, as of the date furnished, any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not materially misleading in light of the circumstances under which
such statements were made.

 

SECTION  10.      COVENANTS
AND CONTINUING AGREEMENTS

 

10.1        Affirmative
Covenants.  For so long as there are any Borrower Group
Commitments outstanding and thereafter until Full Payment of the Obligations
thereunder, each Borrower that is a member of the applicable Borrower Group
shall, and shall cause each Subsidiary to:

 

97

 

10.1.2      Inspections; Appraisals

 

(a)           Permit any Agent from time to time,
subject to (except when a Default or Event of Default exists) reasonable notice
and normal business hours, to visit and inspect the Properties of any Borrower
or its Subsidiaries, inspect, audit and make extracts from any Borrower’s or
its Subsidiaries’ books and records, and discuss with its officers, employees,
agents, advisors and independent accountants the business, financial condition,
assets, prospects and results of operations of such Borrower or its
Subsidiaries.  Lenders may participate in
any such visit or inspection, at their own expense (except when a Default or
Event of Default exists).  No Agent nor
any Lender shall have any duty to any Borrower to make any inspection, or to share
any results of any inspection, appraisal or report with any Borrower.  To the extent any appraisal or other
information is shared by an Agent or a Lender with any Borrower, such Borrower
acknowledges that it was prepared by Agents and Lenders for their purposes and
Borrowers shall not be entitled to rely upon it.

 

(b)           Reimburse Agents for all charges, costs and expenses of
Agents in connection with (i) examinations of any Obligor’s books and
records or any other financial or Collateral matters as Agents deem
appropriate, up to two (2) times per Loan Year; and (ii) appraisals
of Inventory, Equipment and Real Estate up to one time per Loan Year; provided,
however, that if an examination or appraisal is initiated during an
Event of Default, all charges, costs and expenses therefor shall be reimbursed
by Borrowers without regard to such limits. 
Subject to the foregoing, Borrowers shall pay Agents’ standard charges
($850 per day as of the Closing Date or standard charges as in effect
thereafter) for each day that an employee of an Agent or its Affiliates is
engaged in any examination activities, and shall pay the standard charges of
Administrative Agent’s internal appraisal group.  This Section shall not be construed to
limit any Agent’s right to conduct examinations or to obtain appraisals at any time
in its discretion, nor to use third parties for such purposes.

 

10.1.3      Financial and Other Information.  Keep adequate records and books of account
with respect to its business activities, in which proper entries are made in
accordance with GAAP reflecting all financial transactions; and furnish to
Agents and Lenders:

 

(b)           as soon as available, and in any
event within ninety (90) days after the close of each Fiscal Year, audited
balance sheets of SEI (including its Subsidiaries and SE Holding and its subsidiaries)
as of the end of such Fiscal Year and the related statements of income,
shareholders’ equity and cash flow, on a Consolidated and consolidating basis,
such consolidated statements to be audited and accompanied by a report and
opinion of an independent certified public accountant of nationally recognized
standing reasonably acceptable to the Agents, which report and opinion shall be
prepared in accordance with generally accepted auditing standards and shall not
be subject to any “going concern” or like qualification or exception or any
qualification or exception as to the scope of such audit, and, with respect to
SEI and its Subsidiaries, setting forth in each case in comparative form the
corresponding Consolidated figures for the preceding Fiscal Year;

 

(c)           as soon as available, and in any event within forty-five
(45) days after the end of each Fiscal Quarter hereafter (other than the fourth
Fiscal Quarter of any Fiscal Year), unaudited balance sheets of SEI (including
Borrowers, its Subsidiaries and SE Holding and its Subsidiaries) as of the end
of such Fiscal Quarter and the related unaudited statements of income and cash
flow for such Fiscal Quarter, on a Consolidated and consolidating basis,
setting forth in each case in comparative form the corresponding figures for
the preceding Fiscal Year and certified by the principal financial officer of
Borrowers as prepared in accordance with GAAP and fairly presenting the
Consolidated financial position and results of operations of SEI and its Subsidiaries
and SE Holding and its subsidiaries for such 

 

98

 

Fiscal Quarter and period
subject only to changes from audit and year end adjustments and except that
such statements need not contain notes;

 

(d)           as soon as available, and in any event within thirty-five
(35) days after the end of each month (other than the month which is the last
month of any Fiscal Quarter), unaudited balance sheets of SEI, Borrowers and
its Subsidiaries as of the end of such month and the related unaudited
statements of income and cash flow for such month and for the portion of the
Fiscal Year then elapsed, on a Consolidated basis, setting forth in each case
in comparative form the corresponding figures for the preceding Fiscal Year and
certified by the principal financial officer of Borrowers as prepared in
accordance with GAAP and fairly presenting the Consolidated financial position
and results of operations of SEI, Borrowers and their Subsidiaries for such
month and period subject only to changes from audit and year-end adjustments
and except that such statements need not contain notes;

 

(e)           concurrently with delivery of financial statements under
clauses (a), (b) and (c) above, or more frequently if requested by
the Applicable Agent while an Event of Default exists, a Compliance Certificate
executed by the chief financial officer of Borrower Agent;

 

(f)            concurrently with delivery of financial statements under
clause (a) above, copies of all management letters and other material
reports submitted to SEI or Borrowers by their accountants in connection with
such financial statements;

 

(g)           not later than January 31 of each Fiscal Year, the
budget of Borrowers for the upcoming Fiscal Year;

 

(h)           while an Event of Default exists, at Agents’ request, a
listing of each Borrower’s trade payables, specifying the trade creditor and
balance due, and a detailed trade payable aging, all in form satisfactory to
Administrative Agent;

 

(i)            within fifteen (15) days (or promptly, if an Event of
Default exists) after the sending or filing thereof, copies of any annual
report to be filed in connection with each Plan, other than any Canadian
Pension Plan, and a copy of the most recent actuarial report and annual
information return required to be filed with the Financial Services Commission
of Ontario, Canada, the Régie des Rentes du Québec or the Canada Revenue Agency
or any other applicable Governmental Authority in connection with each Canadian
Pension Plan; and

 

(j)            within fifteen (15) days (or promptly, if an Event of
Default exists) after the sending of the request therefor, such other reports
and information (financial or otherwise) as Administrative Agent may reasonably
request (on behalf of itself or any Lender) from time to time in connection
with any Collateral or any Borrower’s, Subsidiary’s or other Obligor’s
financial condition or business.

 

10.1.4      Notices.  Notify Agents and Lenders in writing,
promptly after a Borrower’s obtaining knowledge thereof, of any of the
following that affects a Borrower or any other Obligors:  (a) the threat or commencement of any
proceeding or investigation, whether or not covered by insurance, that could
reasonably be expected to be determined adversely and, if so determined, could
reasonably be expected to result in a Material Adverse Effect; (b) any
pending or threatened labor dispute, strike or walkout, or the expiration of
any labor contract, which, in the case of each of the foregoing, could
reasonably be expected to have a Material Adverse Effect; (c) any event of
default under or termination of a Material Contract; (d) the existence of
any Borrower Group Default or Borrower Group Event of Default; (e) any
judgment in an amount exceeding $5,000,000 (after giving effect to any
insurance 

 

99

 

coverage applicable
thereto); (f) the assertion of any Intellectual Property Claim with
respect to any material Intellectual Property that could reasonably be expected
to be determined adversely and, if so determined, could reasonably be expected
to result in a Material Adverse Effect; (g) any governmental proceeding
pending against any Obligor in respect of any asserted violation of any
Applicable Law (including ERISA, OSHA, FLSA, or any Environmental Laws) that
could reasonably be expected to be determined adversely and, if so determined,
could reasonably be expected to result in a Material Adverse Effect; (h) any
matters required to be disclosed to Agents and Lenders pursuant to the
Environmental Agreement; (i) any Borrower’s opening of any new office or
place of business, on a monthly basis, or 
otherwise at the request of Administrative Agent, or (j) the
discharge of or any withdrawal or resignation by Borrowers’ independent
accountants.  Agents and Lenders
acknowledge as of the Closing Date receipt of notice of the matters set forth
on Schedule 10.1.3.

 

10.1.5      Landlord and Storage Agreements.  Upon reasonable request, provide
Administrative Agent with copies of all agreements between an Obligor and any
landlord, warehouseman or processor that owns any premises at which any
material Collateral may be kept or that otherwise may possess or handle any
material Collateral.

 

10.1.6      Compliance with Laws.  Comply with all Applicable Laws, including
ERISA, Environmental Laws, FLSA, OSHA, Anti-Terrorism Laws, and laws regarding
collection and payment of Taxes, and maintain all Governmental Approvals
necessary to the ownership of its Properties or conduct of its business, unless
failure to comply (other than failure to comply with Anti-Terrorism Laws) or
maintain could not reasonably be expected to have a Material Adverse Effect.

 

10.1.7      Taxes.  Pay and discharge all material Taxes prior to
the date on which they become delinquent or penalties attach, unless such Taxes
are being Properly Contested.

 

10.1.8      Insurance.  In addition to the insurance required under Section 8.6.2 with respect to
Collateral, maintain with its insurers as of the Closing Date or with other
financially sound and reputable insurers, (a) insurance with respect to
the Properties and business of Borrowers and their Subsidiaries of such type
(including general liability, product liability, workers’ compensation,
larceny, embezzlement, or other criminal misappropriation insurance), in such
amounts and with such coverage, and with such deductibles as are customary for
companies similarly situated, and (b) business interruption insurance in
an amount not less than the amounts reflected in Schedule 8.6.2 or otherwise as is then customary for
companies similarly situated.

 

10.1.9      Licenses.  (a) Keep each material License affecting
any Eligible Inventory (including the manufacture, distribution or disposition
of Inventory) or any other material Property of Borrowers and their
Subsidiaries in full force and effect unless such Borrower or any of its
Subsidiaries determines that such License or the underlying Intellectual
Property is no longer useful or necessary or that the counterparty to the
License has defaulted thereunder; (b) promptly notify Agents of any
proposed entry into or materially adverse modification of any material License;
(c) pay all Royalties when due with respect to any material License unless
Properly Contested; and (d) notify Agents of any material default or
breach asserted by any Person to have occurred under any material License.

 

10.1.10    Future Subsidiaries.  Promptly notify Agents upon any Person
becoming a Subsidiary of a Borrower or a Subsidiary of any of such Borrower’s
Subsidiaries, and, if such Person is a U.S. Subsidiary or a Canadian
Subsidiary, cause it, within ten (10) Business Days after its formation or
acquisition, to guaranty the Obligations in a manner satisfactory to Agents (or
alternatively, at the election of Agents, in the case of a U.S. Subsidiary, to
be joined as a U.S. Borrower hereunder), and to execute and deliver such
documents, instruments and agreements and to take such other actions as Agents
shall 

 

100

 

require to evidence and
perfect a Lien in favor of the Applicable Agent (for the benefit of Secured
Parties) on all assets of such Person, including delivery of such legal
opinions, in form and substance satisfactory to Agents, as Agents shall deem
appropriate.  In addition, subject to the
limitations set forth in the Security Agreement, each Borrower shall, or shall
cause the applicable Obligor within ten (10) Business Days after the
formation or acquisition of any new Subsidiary, to, pursuant to documentation
acceptable to Agents, pledge to the Applicable Agent (for the benefit of
Secured Parties), all of the outstanding Equity Interests of each new
Subsidiary owned directly by such Borrower or other Obligor, along with undated
stock powers for such certificates, executed in blank (or, if any such Equity
Interests are uncertificated, confirmation and evidence reasonably satisfactory
to Agents that the security interest in such uncertificated securities has been
transferred to and perfected by the Applicable Agent, for the benefit of
Secured Parties, in accordance with Sections 8-106 and 9-106 of
the UCC, the PPSA or any other Applicable Law).  Notwithstanding anything to the contrary
contained herein in or in the other Loan Documents, the U.S. Obligors shall not
pledge more than 65% of the voting Equity Interests in any Foreign Subsidiary
as Collateral.

 

10.1.11    Environmental Matters. The Borrowers’
and their Subsidiaries’ affirmative covenants with respect to environmental
matters are set forth in the Environmental Agreement.

 

10.2        Negative
Covenants.  For so long as there are any Borrower Group
Commitments outstanding and thereafter until Full Payment of the Obligations
thereunder, each Borrower that is a member of the applicable Borrower Group
shall not, and shall cause each Subsidiary not to:

 

10.2.2      Permitted Debt.  Create, incur, guarantee or suffer to exist
any Debt, except:

 

(b)           the Obligations;

 

(c)           Debt existing on the Closing Date and set forth on Schedule 1.1.2, and any Refinancing
Debt thereof that meets the Refinancing Conditions at the time of refinancing;

 

(d)           Debt incurred in the Ordinary Course of Business under any
of the following products, services or facilities extended to any Borrower or
its Subsidiaries by any bank or financial institution other than a Lender or
its Affiliates: (i) services provided from time to time to any Borrower or
its Subsidiaries in connection with operating, collections, payroll, trust, or
other depository or disbursement accounts, including automatic clearinghouse,
controlled disbursement, depository, electronic funds transfer, information
reporting, lockbox, stop payment, overdraft and/or wire transfer services; (ii) products
under Hedging Agreements (including services provided in connection with
foreign exchange or conversion services); (iii) commercial credit card and
merchant card services; (iv) netting services, overdraft protections and
otherwise in connection with Deposit Accounts;  and (v) other banking products or
services as may be requested by any Borrower or its Subsidiaries;

 

(e)           Subordinated Debt in an amount not to exceed $25,000,000;

 

(f)            Purchase Money Debt and Capitalized Lease Obligations
(excluding the Brownwood Lease) which do not exceed in the aggregate
$25,000,000 at any time outstanding;

 

(g)           Refinancing Debt which has a stated maturity no sooner
than 6 months after the Revolver Termination Date or any extension of the
Revolver Termination Date so long as each of the Refinancing Conditions is met;

 

(h)           Permitted Contingent Obligations;

 

101

 

(i)            Debt in respect of the Brownwood Lease;

 

(j)            Debt incurred in the Ordinary Course of Business solely
to support any Borrower or any of its Subsidiaries’’ insurance or
self-insurance obligations in the Ordinary Course of Business (including to
secure worker’s compensation and other similar insurance coverages);

 

(k)           Debt of an Obligor to another Obligor, or Debt of a
Subsidiary of an Obligor to an Obligor, including Loans permitted pursuant to Section 10.2.7;

 

(l)            Debt incurred by a Borrower or its Subsidiaries in
connection with an acquisition constituting an Investment permitted pursuant to
Section 10.2.5 or otherwise
hereunder (or Debt assumed at the time of an Investment permitted pursuant to Section 10.2.5), other than
Obligations hereunder, in an amount not to exceed $25,000,000;

 

(m)          Debt of Borrowers under the Existing Senior Notes, which
Debt shall cease to remain outstanding no later than five (5) Business
Days after the completion of the redemption or other similar period applicable
to such series of Existing Senor Notes following the delivery of each such
notice of redemption (or other similar document, if applicable), unless the
U.S. Borrowers shall have deposited with the applicable trustee for the
Existing Senior Notes an amount sufficient to redeem, repurchase or otherwise
retire any portion of the Existing Senior Notes that remains outstanding after
the expiration of such five-Business-Day period;

 

(n)           Debt relating to letters of credit obtained in the
Ordinary Course of Business; provided that any such letter of credit may be
secured only by Liens attaching to the related documents of title and not the
Inventory represented thereby;

 

(o)           Debt incurred by any Foreign Subsidiary (other than
Canadian Borrower or any other Canadian Subsidiary) for working capital or
general corporate purposes which is not guaranteed by or secured by any assets
of any Obligor (other than the capital stock of such Foreign Subsidiary held by
such Obligor); and

 

(p)           other unsecured Debt, provided  that (a) no
Event of Default exists as of the date of the incurrence thereof or would exist
by reason of the incurrence of such Debt and (b) at the time of and after
giving effect to the incurrence of such Debt, Borrowers are in compliance with
the Negative Covenant Availability Condition.

 

10.2.3      Permitted Liens.  Create any Lien upon any of its Property,
income or profits or enter into any agreement to do the same except the
following (collectively, “Permitted Liens”):

 

(b)           Liens in favor of the Administrative
Agent or the Canadian Agent;

 

(c)           Liens for Taxes (excluding any Lien imposed pursuant to
any provisions of ERISA) not yet due or being Properly Contested;

 

(d)           cash collateral provided by Borrowers securing Debt
permitted under Section 10.2.1(c);

 

(e)           statutory, common or civil law Liens (excluding any other
Permitted Lien under this Section 10.2.2,
but including any Lien imposed pursuant to any of the provisions of ERISA,
worker’s compensation, unemployment insurance, other social security laws or
regulations, and landlords’, carriers’

 

102

 

warehousemen’s, mechanics’,
materialmen’s, repairmen’s or other like Liens) arising in the Ordinary Course
of Business of a Borrower or its Subsidiaries, but only if and for so long as (x) payment
in respect of any such Lien is not at the time required or such Lien is being
Properly Contested and (y) such Liens do not materially impair the conduct
of the Ordinary Course of Business;

 

(f)            Purchase Money Liens securing Purchase Money Debt;

 

(g)           Liens securing Debt of a Borrower or its Subsidiaries to a
Borrower;

 

(h)           Liens arising by virtue of a judgment or judicial order
against any Borrower or any of its Subsidiaries, or any Property of a Borrower
or any of its Subsidiaries, as long as such Liens are (i) in existence for
less than twenty (20) consecutive days or are being Properly Contested, and (ii) at
all times junior to the Applicable Agent’s Liens;

 

(i)            Liens incurred or deposits made in the Ordinary Course of
Business to secure the performance of tenders, bids, leases, trade contracts
(other than for the repayment of Borrowed Money), surety and appeal bonds,
statutory obligations and other similar obligations or arising as a result of
progress payments under government contracts; provided  that, to
the extent any such Liens attach to any of the Collateral, such Liens are at
all times subordinate and junior to the Liens upon the Collateral in favor of
the Applicable Agent;

 

(j)            servitudes, easements, rights-of-way, restrictions,
covenants, conditions, building code laws, zoning restrictions, developments,
site plans or other agreements of record and other similar charges or
encumbrances affecting title to or the use of real Property of a Borrower or
any of its Subsidiaries that do not secure any monetary obligation and do not
materially interfere with the Ordinary Course of Business of such Borrower or
such Subsidiary;

 

(k)           Liens arising solely by virtue of any statutory or common
law provisions relating to bankers’ liens, liens in favor of securities
intermediaries, normal and customary rights of setoff upon deposits of cash in
favor of banks and other depository institutions and Liens of a collecting bank
arising under the UCC or PPSA on Payment Items in the course of collection;

 

(l)            such other Liens as appear on Schedule 10.2.2 hereto, to the extent
provided therein;

 

(m)          Liens solely on any cash earnest money deposits made by SEI
or any of its Subsidiaries in connection with any letter of intent or purchase
agreement permitted hereunder;

 

(n)           Liens securing Capitalized Lease Obligations permitted to
be incurred under Section 10.2.1
to the extent such Liens do not extend to any Property other than the Property
that is the subject of the underlying lease;

 

(o)           Licenses, sublicenses, leases or subleases (other than
with respect to the Mortgaged Real Estate; provided, that leases
with respect to the Mortgaged Real Estate shall be permitted hereunder to the
extent that such leases, in the aggregate, do not relate to more than 10% of
such Mortgaged Real Estate’s aggregate available space) granted to other
Persons in the Ordinary Course of Business and not interfering in any material
respect with the business of any Obligor;

 

(p)           Liens on Property of a Foreign Subsidiary (other than an
Obligor) securing Debt of such Foreign Subsidiary permitted under Section 10.2.1(n);

 

103

 

(q)           Liens securing Refinancing Debt to the extent of the Liens
securing the Debt refinanced; provided  that if the Liens securing
the debt refinanced are subordinate to the Liens of the Applicable Agent, then
the Liens securing the Refinancing Debt shall be subordinate on the same terms
and to the same extent;

 

(r)            purported Liens evidenced by the filing of precautionary
UCC financing statements relating solely to operating leases of equipment
entered into in the Ordinary Course of Business;

 

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

 

(t)            Liens on Property of Borrowers or their Subsidiaries not
constituting Collateral for so long as the aggregate fair market value of such
Property, and any Debt secured thereby, does not exceed $2,500,000; and

 

(u)           Liens on Property acquired by a Borrower or its
Subsidiaries in connection with a Permitted Acquisition, Permitted Investment
or other Investment permitted pursuant to Section 10.2.5
to the extent that the Debt secured by such Liens is permitted under Section 10.2.1 hereof; provided
that (i) such Liens are not incurred in connection with, or in
anticipation or contemplation of, such Permitted Acquisition, Permitted
Investment or other Investment permitted pursuant to Section 10.2.5 or and (ii) such Liens attach solely
to such Property acquired and do not include any Accounts, Inventory or other
Equipment, Real Estate or other Collateral that may be included in the
Borrowing Base or utilized by Agents in calculating the Fixed Asset Formula
Amount hereunder;

 

(v)           ground leases in respect of real property on which facilities
owned or leased by the Borrowers or any of their respective Subsidiaries are
located; and

 

(w)          such other Liens as Agents and Required Lenders in their
sole discretion may hereafter approve in writing.

 

The foregoing negative
pledge shall not apply to any Margin Stock to the extent such application would
violate or require filings or other actions by any Lender under Regulation U or
any similar law.

 

10.2.4      Capital Expenditures.  Make Capital Expenditures (excluding any
assets acquired pursuant to Section 10.2.5
hereof) in excess of $40,000,000 in the aggregate during any Fiscal Year,
unless at the time of the making of such Capital Expenditure, Borrowers satisfy
the Negative Covenant Availability Condition and no Event of Default exists;
provided, however, that if the amount of Capital Expenditures (excluding any
assets acquired pursuant by to Section 10.2.5
hereof) permitted to be made in any Fiscal Year exceeds the amount actually
made, such excess amount may be carried forward to the next Fiscal Year.

 

10.2.5      Distributions; Upstream Payments.  Neither SEI nor any Borrower shall, and shall
not permit any of their respective Subsidiaries to, declare or make any
Distributions, except (a) Distributions for the purpose of paying
permitted Merger Transaction Costs, (b) Upstream Payments, (c) Distributions
to SEI for the purpose of paying all costs and expenses incurred by SEI in the
Ordinary Course of Business in an amount not to exceed $25,000,000 during any
Fiscal Year related to the oversight, management, administration and support of
the business and affairs of the Obligors and their Subsidiaries and serving as
holding company for the Obligors and their Subsidiaries, including direct and
indirect costs, compensation and business costs related to employees (including
salary, bonuses and 

 

104

 

health, welfare and other
benefits), contractors, temporary and other workers, consulting, professional
and advisory fees and expenses, taxes and overhead costs and expenses,
including rent, equipment, supplies, storage, licenses and other costs; (d) Distributions
to SEI or to any direct or indirect parent company of SEI so long as either (x) Borrowers
are in compliance with the Negative Covenant Availability Condition (i) for
a period of 90 consecutive calendar days prior to any such Distribution and (ii) immediately
after giving pro forma effect to such Distribution, or (y) immediately
after giving effect to such Distribution, Borrowers (i) are in compliance
with the Consolidated Fixed Charge Coverage Ratio covenant set forth in Section 10.3 (regardless of whether
the Aggregate Availability of Borrowers is then less than the Financial
Covenant Availability Condition)  and (ii) have pro forma Aggregate Availability of
at least 10% of the Revolver Commitments (excluding the Fixed Asset Formula
Amount on the date thereof), in each case at the time of and after giving
effect to any such Distribution; and (e) payments by SEI to Holdings
pursuant to a tax sharing agreement permitted under Section 10.2.16(m), and any Distributions made by SEI’s
Subsidiaries for the sole purpose of allowing SEI to satisfy its payment
obligations under tax sharing agreements permitted under Section 10.2.16(m); provided, however
that U.S. Obligors may not make such Distributions for the purpose of allowing
SEI to satisfy its payment obligations under such tax sharing agreements that
relate to future Subsidiaries that are not Obligors or Subsidiaries of
Obligors.

 

10.2.6      Restricted Investments.  Make any Investment at any time that
Borrowers do not satisfy the Negative Covenant Availability Condition or an
Event of Default exists, except (a) Permitted Investments and (b) Permitted
Acquisitions, in each case subject to the terms and conditions thereof (including
any requirement thereunder that no Event of Default exist or that the Negative
Covenant Availability Condition is complied with).

 

10.2.7      Disposition of Assets.  Make any Asset Disposition at any time that
Borrowers do not satisfy the Negative Covenant Availability Condition or an
Event of Default exists, except (a) a Permitted Asset Disposition, (b) a
disposition of Equipment under Section 8.4.2,
or (c) transfer of Property (other than Equipment or Real Estate) by a
Subsidiary or Obligor to a Borrower; provided that unless (i) Aggregate
Availability equals or exceeds an amount equal to the greater of (A) $45,000,000
or (B) the sum of (I) the Fixed Asset Formula Amount plus (II) $25,000,000
on the date of any such disposition and at all times for ninety (90)
consecutive days preceding the date of any such disposition,  and (ii) no Event of Default exists as
of the date of any such disposition, the Net Proceeds of any such disposition
shall be remitted to Administrative Agent for application to the Obligations.

 

10.2.8      Loans.  Make any loans or other advances of money to
any Person at any time that the Borrowers do not satisfy the Negative Covenant
Availability Condition or an Event of Default exists, except (a) advances
to an officer or employee of an Obligor, a Subsidiary of an Obligor, Femco, JV
Europe or SE Holding (or any Subsidiary thereof) for salary, bonus, travel
expenses, moving and other relocation expenses, commissions and similar items
in the Ordinary Course of Business; (b) prepaid expenses and extensions of
trade credit made in the Ordinary Course of Business; (c) deposits with
financial institutions permitted hereunder; (d) intercompany loans by a
U.S. Borrower to another U.S. Borrower or by a Canadian Obligor to another
Canadian Obligor; and (e) Debt permitted under Section 10.2.1; and (f) Investments permitted under Section 10.2.5.

 

10.2.9      Restrictions on Payment of Certain Debt.  Make any payments (whether voluntary or
mandatory, or a prepayment, redemption, retirement, defeasance or acquisition)
with respect to any Subordinated Debt or Borrowed Money (other than the
Obligations), prior to its scheduled due date, except for:

 

(b)           (a) redemption, retirement or
defeasance in full of the Existing Senior Notes within eighty (80) days after
the Closing Date,

 

105

 

(c)           (b) payment of the amounts
required under the Brownwood Lease in order for Borrowers to consummate the
exercise of their option to purchase the underlying Real Estate subject to the Brownwood
Lease within the timeframe therefor set forth in the Brownwood Lease; provided,
that Borrowers deliver to Administrative Agent, for the benefit of the
Secured Parties, a Mortgage with respect to such Real Estate and the Related
Real Estate Documents with respect thereto within sixty (60) days following
Borrowers’ acquisition of a fee (ownership) interest in the Real Estate subject
to the Brownwood Lease,

 

(d)           (c) regularly scheduled payments
of principal, interest and fees and mandatory prepayments made pursuant to the
agreements relating to such Debt, but only to the extent (i) permitted
under any applicable subordination agreement relating to such Debt, and (ii) a
Responsible Officer of Borrower Agent shall have certified to Administrative
Agent, not less than five (5) Business Days prior to the date of payment,
that all conditions set forth in clause (c) have been or will have been
satisfied on the date of payment, or

 

(e)           (d) if at the time of and after
giving effect to any such payment, (i) no Event of Default exists, (ii) either
(x) Borrowers are in compliance with the Negative Covenant Availability
Condition, or (y) Borrowers are in compliance with the Consolidated Fixed
Charge Coverage Ratio covenant set forth in Section 10.3
(regardless of whether the Aggregate Availability of Borrowers is
then less than the Financial Covenant Availability Condition)  and have Aggregate
Availability of at least 10% of the Revolving Credit Facility (excluding the
Fixed Asset Formula Amount on the date thereof), and (iii) a Responsible
Officer of Borrower Agent shall have certified to Administrative Agent, not
less than five (5) Business Days prior to the date of payment, that all
conditions set forth in this clause (d) have been or will have been
satisfied on the date of payment.

 

10.2.10    Fundamental Changes.  Merge, amalgamate, combine or consolidate
with and into any Person, or permit any other Person to merge, amalgamate,
combine or consolidate with and into it, or liquidate, wind up its affairs or
dissolve itself, in each case whether in a single transactions or in a series
of related transactions, except that (a) any Subsidiary of a U.S. Obligor
(other than a Borrower) may merge, combine or consolidate with and into a U.S.
Obligor (or another Subsidiary of a U.S. Obligor) in a transaction in which
such U.S. Obligor is the surviving Person, or dissolve or liquidate so long as
the assets of such entity are distributed up to a U.S. Obligor shareholder, (b) any
Subsidiary of a Canadian Obligor may amalgamate, combine or consolidate with
and into a Canadian Obligor in a transaction in which such Canadian Obligor is
the surviving Person, or dissolve or liquidate so long as the assets of such
entity are distributed up to a Canadian Obligor shareholder, (c) any U.S.
Obligor may merge, or combine or consolidate with and into any other U.S.
Obligor, (d) any Canadian Obligor may merge, amalgamate, combine or
consolidate with and into any other Canadian Obligor, (e) any Immaterial
Subsidiary or dormant Subsidiary of an Obligor may merge, amalgamate, combine
or consolidate with and into an Obligor or its Subsidiaries, or dissolve or
liquidate so long as the assets of such entity are distributed up to an Obligor
shareholder, and except for (f)  transactions otherwise permitted under
this Agreement (including but not limited to transactions permitted pursuant to
Sections 10.2.5 and 10.2.6 hereof), in each case so long as
such mergers, amalgamations, consolidations, dissolutions or liquidations are
permitted under and consummated in accordance with Applicable Law.

 

10.2.11    Subsidiaries.  Form or acquire any Subsidiary after the
Closing Date, other than a Permitted Subsidiary; or permit any existing
Subsidiary to issue any additional Equity Interests except (a) director’s
qualifying shares and (b) Equity Interests granted to a Borrower or its
Subsidiaries which are promptly pledged to the Administrative Agent pursuant to
the applicable Pledge Agreement.

 

106

 

10.2.12    Organic Documents.  Amend, modify or otherwise change any of its
Organic Documents as in effect on the Closing Date, except for changes that do
not affect in any adverse way such Borrower’s or any of its Subsidiaries’
rights and obligations to enter into and perform the Loan Documents to which it
is a party and to pay all of the Obligations and that do not otherwise have a
Material Adverse Effect.

 

10.2.13    Tax Consolidation.  File or consent to the filing of any
consolidated income tax return with any Person other than Holdings, SEI, SEHC,
Borrowers, Subsidiaries, SE Holding and its Subsidiaries.

 

10.2.14    Accounting Changes.  (a) Make any material change in
accounting treatment or reporting practices, except in compliance with GAAP or (b) change
its Fiscal Year, in each case of the foregoing without the prior consent of the
Agents (which consent shall not be unreasonably withheld or delayed).

 

10.2.15    Hedging Agreements.  Enter into any Hedging Agreement, except to
hedge or mitigate risks arising in the Ordinary Course of Business to which any
Borrower or any of its Subsidiaries is exposed in the conduct of its business
or the management of its liabilities and not for any speculative purpose.

 

10.2.16    Conduct of Business.  Engage in any material line of business other
than a Similar Business.

 

10.2.17    Affiliate Transactions.  Enter into or be party to any transaction
with an Affiliate, at any time that Borrowers do not satisfy the Negative
Covenant Availability Condition or an Event of Default exists, except:

 

(b)           the transactions contemplated by the
Loan Documents;

 

(c)           the Merger and Related Transactions and the payment of
fees, expenses and other obligations in connection therewith;

 

(d)           payment of reasonable compensation to officers and
employees of the direct or indirect parent company of SEI (or of its Affiliates
in the Ordinary Course of Business) for services actually rendered to SEI,
Borrowers or their respective Subsidiaries;

 

(e)           the payment of customary fees and reasonable out-of-pocket
costs to, and indemnities provided on behalf of, directors, officers, employees
and consultants of SEI and its Subsidiaries or any direct or indirect parent of
SEI in the Ordinary Course of Business to the extent attributable to the
ownership or operation of SEI and its Subsidiaries;

 

(f)            transactions pursuant to any other agreement, instrument
or arrangement as in effect on the Closing Date and, to the extent entered into
after December 31, 2007 and involving aggregate consideration in excess of
$2,000,000 individually or $5,000,000 in the aggregate, set forth on Schedule 1.1.2, and any amendment
thereto so long as such amendment is not disadvantageous to the Lenders when
taken as a whole in any material respect as compared to the applicable
agreement, instrument or arrangement as in effect on the Closing Date;

 

(g)           transactions involving the purchase or sale of raw
materials, scrap, finished goods, enamels, and packaging in the Ordinary Course
of Business;

 

107

 

(h)           the transfer of Equipment previously used in connection
with a closed or restructured facility;

 

(i)            transactions not otherwise restricted under Section 10.2 of this Agreement with
Affiliates pursuant to the reasonable requirements of such Borrower’s or such
Subsidiary’s business and upon fair and reasonable terms that are fully
disclosed to Agents;

 

(j)            transactions pursuant to which an Obligor or its
Subsidiary licenses any intellectual property on a non-exclusive basis to or
from any of its Affiliates, including LS Cable, SE Holding, SEI or any of its
Subsidiaries;

 

(k)           guarantees, to the extent constituting Permitted
Contingent Obligations or Existing Investments;

 

(l)            transactions that constitute Permitted Investments,
Permitted Acquisitions or Permitted Asset Dispositions, in each case to the
extent involving an Affiliate, or which are otherwise permitted under Sections 10.2.1, 10.2.4, 10.2.7, and 10.2.9;

 

(m)          transfers of funds in connection with cash management
system in the Ordinary Course of Business;

 

(n)           tax sharing agreements between Holdings and SEI and its
Subsidiaries providing for reimbursements to Holdings of taxes that SEI and its
Subsidiaries would have incurred and paid directly to the applicable
Governmental Authority (as the parent company of its Subsidiaries), had SEI and
its Subsidiaries not been consolidated with Holdings for tax purposes;

 

(o)           allocations and arrangements allocating costs of (i) business,
casualty, financial and other insurance, and (ii) health and welfare plans
and benefits; and

 

(p)           other transactions with Affiliates described on Schedule 1.1.2, or otherwise consented
to in writing by Agent and the Required Lenders.

 

10.2.18    Plans.  Become party to any Multiemployer Plan or
Canadian Pension Plan other than any in existence on the Closing Date.

 

10.2.19    Restrictions on Upstream Payments.  Create or suffer to exist any encumbrance or
restriction on the ability of a Subsidiary to make any Upstream Payment, except
for encumbrances or restrictions (i) pursuant to the Loan Documents, (ii) existing
under Applicable Law, (iii) pursuant to the Brownwood Lease, (iv) pursuant
to joint venture agreements with any Permitted Subsidiary entered into in the
Ordinary Course of Business, and (v) identified and fully disclosed in Schedule 9.1.16.

 

10.2.20    Amendments to Funded Debt Documents.  Amend, supplement or otherwise modify any
document, instrument or agreement relating to any Debt for Borrowed Money,
individually or in the aggregate, having an aggregate principal amount exceeding
$50,000,000, in each case to the extent that such action would, taken as a
whole, reasonably be expected to be materially adverse to the interests of
Lenders. .

 

10.2.21    Environmental Matters.  The Borrowers’ and their Subsidiaries’
negative covenants with respect to environmental matters are set forth in the
Environmental Agreement.

 

108

 

10.3        Consolidated
Fixed Charge Coverage Ratio.  At any time that the Aggregate Availability
of Borrowers is less than the Financial Covenant Availability Condition, SEI,
Borrowers and their Subsidiaries shall maintain a Consolidated Fixed Charge
Coverage Ratio of not less than 1.00 to 1.00 as of the immediately preceding
fiscal month end for which financial statements have been (or were required to
be) delivered hereunder and as of each subsequent fiscal month.

 

To the extent that SEI,
Borrowers and their Subsidiaries fail to satisfy the Consolidated Fixed Charge
Coverage Ratio covenant of this Section 10.3,
such failure shall not constitute an Event of Default hereunder if, within two (2) Business
Days after the date on which financial statements with respect to the Test
Period for which the Consolidated Fixed Charge Coverage Ratio is being measured
are required to be delivered pursuant to Section 10.1.2(a) or
(b), any Equity Investor or direct
or indirect parent of SEI makes an equity contribution (or provides
Subordinated Debt pursuant to a debt subordination agreement acceptable to
Administrative Agent in all respects in its sole and absolute discretion) to
Borrowers, in an amount sufficient, when added to Consolidated EBITDA, to
satisfy the Fixed Charge Coverage Ratio, and provides Administrative Agent with
evidence thereof in form and substance satisfactory to Administrative Agent; provided
that, such equity cure right may be exercised by Borrowers and any
Equity Investor or direct or indirect parent of SEI only once during any twelve
(12) month period.

 

If, after the Aggregate
Availability of Borrowers has fallen below the Financial Covenant Availability
Condition, Borrowers maintain Aggregate Availability of an amount in excess of
the Financial Covenant Availability Condition for a sixty (60) consecutive day
period and no Event of Default occurs or exists during such 60-day period, then
the Applicable Agent will cease testing the Consolidated Fixed Charge Coverage
Ratio for the next Testing Period and thereafter unless and until the Aggregate
Availability of Borrowers again falls below the Financial Covenant Availability
Condition.

 

SECTION  11.      EVENTS
OF DEFAULT; REMEDIES ON DEFAULT

 

11.1        Events of
Default.  Each of the
following as to any Borrower Group shall be a “Event of Default” hereunder, if
the same shall occur for any reason whatsoever, whether voluntary or involuntary,
by operation of law or otherwise:

 

(a)           Any Borrower within such Borrower
Group fails to pay (i) any payment of principal when due; (ii) any
interest or fees within three (3) Business Days of the due date; or (iii) any
other Obligations within ten (10) Business Days when due (in each case,
whether at stated maturity, on demand, upon acceleration or otherwise);

 

(b)           Any representation, warranty or other written statement of
SEI, any Borrower or any Material Subsidiary within such Borrower Group made in
connection with any Loan Documents or transactions contemplated thereby is
incorrect or misleading in any material respect when given;

 

(c)           Any Borrower within such Borrower Group shall breach or
fail to perform any covenant contained in Section 8.1,
8.2.4, 8.2.5, 8.6.2, 10.1.1(a), 10.1.2, 10.1.6, 10.1.7, 10.2 or 10.3;

 

(d)           SEI, any Borrower or any Material Subsidiary thereof
within such Borrower Group breaches or fails to perform any other covenant
contained in any Loan Documents, and such breach or failure is not cured within
thirty (30) days after a Senior Officer of such Obligor has knowledge thereof
or receives notice thereof from Administrative Agent, whichever is sooner; provided,
however, that such notice and opportunity to cure shall not apply if the
breach or failure to perform is not capable of being cured within such period;

 

109

 

(e)           SEI, any Borrower or any Material Subsidiary that is a
Guarantor of the Borrower Group Obligations repudiates, revokes or attempts to
revoke its Guaranty or denies or contests the validity or enforceability of any
Loan Documents or Obligations, or the perfection or priority of any Lien
granted to the Applicable Agent; or any Loan Document ceases to be in full
force or effect for any reason (other than a waiver or release by Agents and
Lenders);

 

(f)            Any breach or default of SEI, any Borrower or any
Material Subsidiary within such Borrower Group occurs under any document,
instrument or agreement to which it is a party or by which it or any of its
Properties is bound, relating to any Debt (other than the Obligations) in
excess of $10,000,000, if the maturity of or any payment with respect to such
Debt may be accelerated or demanded due to such breach;

 

(g)           Any judgment or order for the payment of money is entered
against SEI, any Borrower or any Material Subsidiary within such Borrower Group
in an amount that exceeds, individually or cumulatively with all unsatisfied
judgments or orders against all Obligors, $10,000,000 (net of any insurance
coverage therefor acknowledged in writing by the insurer), unless a stay of
enforcement of such judgment or order is in effect, by reason of a pending
appeal or otherwise;

 

(h)           Any loss, theft, damage or destruction occurs with respect
to any Collateral of members of such Borrower Group if the amount not covered
by insurance exceeds $10,000,000;

 

(i)            SEI or any Borrower is enjoined, restrained or in any way
prevented by any Governmental Authority from conducting any material part of
its business; SEI or any Borrower suffers the loss, revocation or termination
of any material license, permit, lease or agreement necessary to its business;
there is a cessation of any material part of the business of SEI or any
Borrower for a material period of time; any material Collateral or Property of
SEI or any Borrower is taken or impaired through condemnation; SEI or any
Borrower agrees to or commences any liquidation, dissolution or winding up of
its affairs; or SEI, any Borrower or any Material Subsidiary within such
Borrower Group ceases to be Solvent;

 

(j)            Any Insolvency Proceeding, liquidation, dissolution or
winding up  is
commenced by SEI, any Borrower or any of their Material Subsidiaries; (B) an
Insolvency Proceeding is commenced against SEI, any Borrower or any of their
Material Subsidiaries and either (i) such entity consents to the
institution of the proceeding against it, (ii) the petition commencing the
proceeding is not timely controverted by such entity, (iii) the petition
is not dismissed within thirty (30) days after its filing, or (iv) an
order for relief is entered in the proceeding; (C) a trustee (including an
interim trustee), receiver, monitor, sequestrator, liquidator, or similar
official, is appointed to take possession of any substantial Property of or to
operate any of the business of SEI, any Borrower or any of their Material
Subsidiaries; or (D) SEI, any Borrower or any of their Material
Subsidiaries makes an offer of settlement, extension or composition to its
unsecured creditors generally;

 

(k)           A Reportable Event occurs that Administrative Agent, in
its reasonable discretion, determines constitutes grounds for termination by
the Pension Benefit Guaranty Corporation of any Multiemployer Plan or
appointment of a trustee for any Multiemployer Plan; any Multiemployer Plan is
terminated or any such trustee is requested or appointed and the resulting
withdrawal liability, if any, has a Material Adverse Effect; any Obligor within
such Borrower Group is in “default” (as defined in Section 4219(c)(5) of
ERISA) with respect to payments to a Multiemployer Plan resulting from any
withdrawal therefrom; or a Pension Event shall occur with respect to a Canadian
Pension Plan or Multi employer Plan which has resulted or could reasonably be
expected to result in a new net liability of the Borrower or any of the
Guarantors in an aggregate amount in excess of $10,000,000; or any Borrower or 

 

110

 

any of the Guarantors shall
fail to pay or remit when due any amount for which they are liable in respect
of any Canadian Pension Plan or any Lien arises on any property of any Borrower
or any of the Guarantors under or in respect of any Canadian Pension Plan
(except for contribution amounts not due and delinquent) and such failure or
Lien would reasonably be expected to have a Material Adverse Effect;

 

(l)            SEI or any Borrower is criminally indicted or convicted
for (i) a felony committed in the conduct of SEI’s or such Borrower’s
business, or (ii) any state or federal law (including the Controlled
Substances Act, Money Laundering Control Act and Illegal Exportation of War
Materials Act) that could reasonably be expected to lead to forfeiture of any
material Collateral; or

 

(m)          A Change of Control occurs.

 

Notwithstanding the
foregoing, an Event of Default shall be deemed to exist with respect to all
Borrower Groups and each Borrower within each such Borrower Group (entitling
Agents and Lenders to exercise all of their rights and remedies set forth in
the Loan Documents and under Applicable Law) if (a) an Event of Default
shall occur with respect to U.S. Borrowers, (b) Borrowers shall be in
breach of Section 10.3, (c) an
Event of Default shall occur under Sections
11.1(e), 11.1(j), 11.1(l), or 11.1(m),
or (d) U.S. Borrowers shall fail to pay any amounts owing by any of them
under any guaranty given in respect of any of the Canadian Obligations.

 

11.2        Remedies
upon Default.  If an Event
of Default described in Section 11.1(j) occurs
with respect to any Borrower, then to the extent permitted by Applicable Law,
all Obligations shall become automatically due and payable and all Commitments
shall terminate, without any action by Administrative Agent or notice of any
kind.  Without in any way limiting the
right of Agents to demand payment of any portion of the Obligations payable on
demand in accordance with this Agreement, upon or at any time after the
occurrence of an Event of Default (other than pursuant to Section 11.1(j)) and for so long as
such Event of Default shall exist, the Applicable Agent may in its discretion
(and, upon receipt of written instructions to do so from the Required Borrower
Group Lenders, shall),  do any one or
more of the following from time to time:

 

(a)           declare any Borrower Group
Obligations of the affected Borrower Group(s) immediately due and payable,
whereupon they shall be due and payable without diligence, presentment, demand,
protest or notice of any kind, all of which are hereby waived by Borrowers to
the fullest extent permitted by law;

 

(b)           terminate, reduce or condition any Borrower Group
Commitments applicable to such Borrower Group, or make any adjustment to the
Borrowing Base; provided, however, that upon the occurrence of an
Event of Default specified in Section 11.1(j),
all of the Borrower Group Obligations of the affected Borrower Group shall
become automatically due and payable without declaration, notice or demand by
any Agent to or upon any Obligor and the Borrower Group Commitments to each
Borrower Group shall automatically terminate;

 

(c)           require Obligors to Cash Collateralize LC Obligations, or
the other Obligations described in clauses (ii) and (iii) of the
definition of Cash Collateralize, and, if Obligors within such Borrower Group
fail promptly to deposit such Cash Collateral, Lenders may (and shall upon the
direction of Required Lenders) advance the required Cash Collateral as Revolver
Loans (whether or not an Overadvance exists or is created thereby, or the
conditions in Section 6 are
satisfied); and

 

(d)           exercise any other rights or remedies afforded under any
agreement, by law, at equity or otherwise, including the rights and remedies of
a secured party under the UCC, PPSA or other 

 

111

 

Applicable Law.  Such rights and remedies include the rights
to (i) take possession of any Collateral; (ii) require Borrowers to
assemble Collateral, at Borrowers’ expense, and make it available to the
Applicable Agent at a place designated by the Applicable Agent; (iii) enter
any premises where Collateral is located and store Collateral on such premises
until sold (and if the premises are owned or leased by a Borrower, Borrowers
agree not to charge for such storage); and (iv) sell or otherwise dispose
of any Collateral in its then condition, or after any further manufacturing or
processing thereof, at public or private sale, with such notice as may be
required by Applicable Law, in lots or in bulk, at such locations, all as the
Applicable Agent, in its discretion, deems advisable.  Each Borrower agrees that ten (10) days
notice (or fifteen (15) days notice with respect to Canadian Borrower to the
extent required under the PPSA) of any proposed sale or other disposition of
Collateral by the Applicable Agent shall be reasonable.  The Applicable Agent shall have the right to
conduct such sales on any Obligor’s premises, without charge, and such sales
may be adjourned from time to time in accordance with Applicable Law.  The Applicable Agent shall have the right to
sell, lease or otherwise dispose of any Collateral for cash, credit or any
combination thereof, and the Applicable Agent may purchase any Collateral at
public or, if permitted by law, private sale and, in lieu of actual payment of
the purchase price, may set off the amount of such price against the
Obligations.

 

11.3        License.  Each of the Agents is hereby granted an
irrevocable, non-exclusive license or other right to use, license or
sub-license (without additional payment of royalty or other compensation to any
Person) any or all Intellectual Property of Borrowers, computer hardware and
software, trade secrets, brochures, customer lists, promotional and advertising
materials, labels, packaging materials and other Property, in advertising for
sale, marketing, selling, collecting, completing manufacture of, or otherwise
exercising any rights or remedies with respect to, any Collateral.  Each Borrower’s rights and interests under
Intellectual Property shall inure to Agents’ benefit.

 

11.4        Setoff.  At any time during an Event of Default, the
Applicable Agent (and subject to the Applicable Agent’s consent, the Applicable
Issuing Bank, the Applicable Lenders), and any of their Affiliates are
authorized, to the fullest extent permitted by Applicable Law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final, in whatever currency) at any time held and other obligations (in
whatever currency) at any time owing by the Applicable Agent, the Applicable
Issuing Bank, such Applicable Lender or such Affiliate to or for the credit or
the account of an Obligor against any Borrower Group Obligations of the
applicable Borrower Group, irrespective of whether or not the Applicable Agent,
the Applicable Issuing Bank, such Applicable Lender or such Affiliate shall
have made any demand under this Agreement or any other Loan Document and
although such Borrower Group Obligations may be contingent or unmatured or are
owed to a branch or office of the Applicable Agent, the Applicable Issuing
Bank, such Applicable Lender or such Affiliate different from the branch or
office holding such deposit or obligated on such indebtedness.  The rights of each Agent (and subject to the
Applicable Agent’s consent, each Issuing Bank, each Lender), and each such
Affiliate under this Section are in addition to other rights and remedies
(including other rights of setoff) that such Person may have.

 

11.5        Remedies
Cumulative; No Waiver.

 

11.5.1      Cumulative Rights.  All covenants, conditions, provisions,
warranties, guaranties, indemnities and other undertakings of Borrowers
contained in the Loan Documents are cumulative and not in derogation or
substitution of each other.  In
particular, the rights and remedies of Agents and Lenders are cumulative, may
be exercised at any time and from time to time, concurrently or in any order,
and shall not be exclusive of any other rights or remedies that Agents and
Lenders may have, whether under any agreement, by law, at equity or otherwise.

 

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11.5.2      Waivers.  The failure or delay of any of the Agents or
any Lender to require strict performance by Borrowers with any terms of the
Loan Documents, or to exercise any rights or remedies with respect to
Collateral or otherwise, shall not operate as a waiver thereof nor as
establishment of a course of dealing. 
All rights and remedies shall continue in full force and effect until
Full Payment of all Obligations.  No
modification of any terms of any Loan Documents (including any waiver thereof)
shall be effective, unless such modification is specifically provided in a
writing directed to Borrowers and executed the Applicable Agent or the
requisite Lenders, and such modification shall be applicable only to the matter
specified.  No waiver of any Default or
Event of Default shall constitute a waiver of any other Default or Event of
Default that may exist at such time, unless expressly stated.  If the Applicable Agent or any Lender accepts
performance by any Obligor under any Loan Documents in a manner other than that
specified therein, or during any Default or Event of Default, or if any of the
Agents or any Lender shall delay or exercise any right or remedy under any Loan
Documents, such acceptance, delay or exercise shall not operate to waive any
Default or Event of Default nor to preclude exercise of any other right or
remedy.  It is expressly acknowledged by
Borrowers that any failure to satisfy a financial covenant on a measurement
date shall not be cured or remedied by satisfaction of such covenant on a
subsequent date, except to the extent expressly set forth in Section 10.3.

 

11.6        Judgment
Currency.  If, for the
purpose of obtaining judgment in any court or obtaining an order enforcing a
judgment, it becomes necessary to convert any amount due under this Agreement
in Dollars or in any other currency (hereinafter in this Section 11.6 called the “first
currency”) into any other currency (hereinafter in this Section 11.6 called the “second
currency”), then the conversion shall be made at the Exchange Rate for buying
the first currency with the second currency prevailing at the Administrative
Agent’s close of business on the Business Day next preceding the day on which
the judgment is given or (as the case may be) the order is made.  Any payment made by a Borrower to any Credit
Party pursuant to this Agreement in the second currency shall constitute a
discharge of the obligations of Borrowers to pay to such Credit Party any
amount originally due to the Credit Party in the first currency under this
Agreement only to the extent of the amount of the first currency which such
Credit Party is able, on the date of the receipt by it of such payment in any
second currency, to purchase, in accordance with such Credit Party’s normal
banking procedures, with the amount of such second currency so received.  If the amount of the first currency converted
from the second currency pursuant to the preceding sentence falls short of the
amount originally due to such Credit Party in the first currency under this
Agreement, Borrowers within such Borrower Group agree that they will indemnify
each Credit Party against and save such Credit Party harmless from any
shortfall so arising.  This indemnity
shall constitute an obligation of each such Borrower separate and independent
from the other obligations contained in this Agreement, shall give rise to a
separate and independent cause of action and shall continue in full force and
effect notwithstanding any judgment or order for a liquidated sum or sums in
respect of amounts due to any Credit Party under any Loan Documents or under
any such  judgment or order.  Any such shortfall shall be deemed to
constitute a loss suffered by such Credit Party and Borrowers shall not be
entitled to require any proof or evidence of any actual loss.  If the amount of the first currency exceeds
the amount originally due to a Credit Party in the first currency under this
Agreement, such Credit Party shall promptly remit such excess to the Borrowers
in the affected Borrower Group.  The covenants
contained in this Section 11.6
shall survive the Full Payment of the Obligations under this Agreement.

 

SECTION  12.      AGENTS

 

12.1        Appointment,
Authority and Duties of Agents

 

12.1.1      Appointment and Authority of
Administrative Agent.  Each Lender
appoints and designates Bank of America as Administrative Agent hereunder.  Administrative Agent may, and each 

 

113

 

Lender authorizes
Administrative Agent to, enter into all Loan Documents to which Administrative
Agent is intended to be a party and accept all Security Documents, for
Administrative Agent’s benefit and the Pro Rata benefit of Lenders.  Each Lender agrees that any action taken by
Administrative Agent or Required Lenders or Required Borrower Group Lenders in
accordance with the provisions of the Loan Documents, and the exercise by
Administrative Agent or Required Lenders or Required Borrower Group Lenders of
any rights or remedies set forth therein, together with all other powers
reasonably incidental thereto, shall be authorized and binding upon all
Lenders.  Without limiting the generality
of the foregoing, Administrative Agent shall have the sole and exclusive
authority to (a) act as the disbursing and collecting agent for U.S.
Lenders with respect to all payments and collections arising in connection with
the Loan Documents; (b) execute and deliver as Administrative Agent each
Loan Document, including any intercreditor or subordination agreement, and
accept delivery of each Loan Document from any Obligor or other Person; (c) act
as collateral agent for Secured Parties for purposes of perfecting and
administering Liens under the Loan Documents, and for all other purposes stated
therein; provided that Administrative Agent hereby appoints, authorizes and
directs each Lender to act as a collateral sub-agent for Administrative Agent
and the other Lenders for purposes of the perfection of all Liens with respect
to a Borrower’s Deposit Accounts maintained with, and all cash and Cash
Equivalents held by, such Lender; (d) subject to the direction of the
Required Borrower Group Lenders, manage, supervise or otherwise deal with the
Collateral of Borrowers; and (e) except as may be otherwise specifically
restricted by the terms of this Agreement and subject to the direction of the
Required Borrower Group Lenders, exercise all remedies given to Administrative
Agent with respect to any of the Collateral under the Loan Documents relating
thereto, Applicable Law or otherwise. 
The duties of Administrative Agent shall be ministerial and
administrative in nature, and Administrative Agent shall not have a fiduciary
relationship with any Lender, Secured Party, Participant or other Person, by
reason of any Loan Document or any transaction relating thereto.  Administrative Agent alone shall be
authorized to determine whether any Accounts or Inventory constitute Eligible
Accounts or Eligible Inventory, or whether to impose or release any reserve,
which determinations and judgments, if exercised in good faith, shall exonerate
Administrative Agent from liability to any Lender or other Person for any error
in judgment.

 

12.1.2      Appointment and Authority of Canadian
Agent.  Each Canadian Lender hereby
appoints and authorizes Canadian Agent to take such actions on its behalf (and
on behalf of Administrative Agent) and to exercise such powers under this
Agreement and the other Loan Documents with respect to the administration of
all Canadian Revolver Loans and other extensions of credit made to Canadian
Borrower.  Each Lender authorizes
Administrative Agent to delegate to Canadian Agent any and all of its
obligations under this Agreement and the other Loan Documents with respect to
all actions required to be taken in Canada, respectively, of any kind
whatsoever.  Canadian Agent, when acting
pursuant to the authority granted hereunder, shall have all of the protections,
indemnities, rights and powers granted to Administrative Agent under this
Agreement and any other Loan Document. 
Any proceeds realized by Canadian Agent in connection with the
enforcement of any Liens with respect to the Canadian Collateral, shall be
disbursed to Administrative Agent (unless otherwise directed by Administrative
Agent) for distribution to the Credit Parties entitled thereto in accordance
with Section 5.7.

 

12.1.3      Duties.  Each of the Agents (which term, as used in
this sentence, shall include reference to each of the Agents’ officers,
directors, employees, attorneys, agents and affiliates and to the officers,
directors, employees, attorneys and agents of each of the Agents’ affiliates)
shall not have any duties except those expressly set forth in the Loan
Documents, nor be required to initiate or conduct any Enforcement Action except
to the extent directed to do so by Required Lenders while an Event of Default
exists.  The conferral upon any of Agents
of any right shall not imply a duty on any of Agents’ part to exercise such
right, unless instructed to do so by Required Lenders or Required Borrower
Group Lenders in accordance with this Agreement.  The duties of each of the Agents shall be
ministerial and 

 

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administrative in nature,
and none of the Agents shall have by reason of this Agreement or any of the
other Loan Documents a fiduciary or trust relationship with any Credit Party or
any Participants).

 

12.1.4      Agent Professionals.  Each of the Agents may perform its duties
through agents and employees.  Each of
the Agents may consult with and employ Agent Professionals, and shall be
entitled to act upon, and shall be fully protected in any action taken in good
faith reliance upon, any advice given by an Agent Professional.  None of the Agents shall be responsible for
the negligence or misconduct of any agents, employees or Agent Professionals
selected by it with reasonable care.

 

12.1.5      Instructions of Required Lenders and
Required Borrower Group Lenders.  The
rights and remedies conferred upon each of the Agents under the Loan Documents
may be exercised without the necessity of joinder of any other party, unless
required by Applicable Law.  Each of the
Agents may request instructions from Required Lenders or the Borrower Group
Lenders, as applicable, with respect to any act (including the failure to act)
in connection with any Loan Documents, and may seek assurances to its
satisfaction from Lenders of their indemnification obligations under Section 12.6 against all Claims that
could be incurred by any of the Agents in connection with any act.  Each of the Agents shall be entitled to
refrain from any act until it has received such instructions or assurances, and
none of the Agents shall incur liability to any Person by reason of so
refraining.  Instructions of Required
Lenders, or Required Borrower Group Lenders, as applicable, shall be binding
upon all Lenders, and no Lender shall have any right of action whatsoever
against any of the Agents as a result of any of the Agents acting or refraining
from acting in accordance with the instructions of Required Lenders or Required
Borrower Group Lenders, as applicable.  Notwithstanding
the foregoing, instructions by and consent of all Lenders shall be required in
the circumstances described in Section 14.1.1,
and in no event shall Required Lenders, or Required Borrower Group Lenders, as
applicable, without the prior written consent of each Lender, direct any of the
Agents to accelerate and demand payment of Loans held by one Lender without
accelerating and demanding payment of all other Loans, nor to terminate the
Commitments of one Lender without terminating the Commitments of all Lenders.  In no event shall any of the Agents be
required to take any action that, in its opinion, is contrary to Applicable Law
or any Loan Documents or could subject any Agent Indemnitee to personal
liability.

 

12.2        Agreements
Regarding Collateral and Field Examination Reports

 

12.2.1      Lien Releases; Care of Collateral.  Lenders authorize each of the Agents to
release any Lien with respect to any Collateral of a Borrower Group (a) upon
Full Payment of the Borrower Group Obligations, (b) that is the subject of
an Asset Disposition which Borrowers certify in writing to the Applicable Agent
is a Permitted Asset Disposition or a Lien which Borrowers certify is a
Permitted Lien entitled to priority over the Applicable Agent’s Liens (and each
of the Agents may rely conclusively on any such certificate without further
inquiry), (c) that does not constitute a material part of the Collateral,
or (d) with such written consent as is required pursuant to Section 14.1.1.  None of the Agents shall have any obligation
whatsoever to any Lenders to assure that any Collateral exists or is owned by a
Borrower, or is cared for, protected, insured or encumbered, nor to assure that
the Applicable Agent’s Liens have been properly created, perfected or enforced,
or are entitled to any particular priority, nor to exercise any duty of care
with respect to any Collateral.

 

12.2.2      Possession of Collateral.  Agents and Lenders appoint each other Lender
as agent for the purpose of perfecting Liens (for the benefit of Secured
Parties) in any Collateral that, under the UCC or other Applicable Law, can be
perfected by possession.  If any Lender
obtains possession of any such Collateral, it shall notify the Applicable Agent
thereof and, promptly upon the Applicable Agent’s request, deliver such
Collateral to the Applicable Agent or otherwise deal with such Collateral in
accordance with the Applicable Agent’s instructions.

 

115

 

12.2.3      Reports.  Agents shall promptly, upon receipt thereof,
forward to each Lender copies of the results of any field audit or other
examination or any appraisal prepared by or on behalf of Agents with respect to
any Obligor or Collateral (“Report”). 
Each Lender agrees (a) that neither Bank of America nor any of
Agents makes any representation or warranty as to the accuracy or completeness
of any Report, and shall not be liable for any information contained in or
omitted from any Report; (b) that the Reports are not intended to be
comprehensive audits or examinations, and that the Agents or any other Person
performing any audit or examination will inspect only specific information
regarding Obligations or the Collateral and will rely significantly upon
Borrowers’ books and records as well as upon representations of Borrowers’
officers and employees; and (c) to keep all Reports confidential and
strictly for such Lender’s internal use, and not to distribute any Report (or
the contents thereof) to any Person (except to such Lender’s Participants,
attorneys, accountants and other Persons with whom such Lender has a
confidential relationship) or use any Report in any manner other than
administration of the Loans and other Obligations.  Each Lender agrees to indemnify and hold
harmless each of the Agents and any other Person preparing a Report from any
action such Lender may take as a result of or any conclusion it may draw from
any Report, as well as any Claims arising in connection with any third parties
that obtain all or any part of a Report through such Lender.

 

12.3        Reliance
By Agents.  Each of the
Agents shall be entitled to rely, and shall be fully protected in relying, upon
any certification, notice or other communication (including those by telephone,
telex, telegram, telecopy or e-mail) believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person, and upon the advice
and statements of Agent Professionals. 
As to any matters not expressly provided for by this Agreement or any of
the other Loan Documents, each of the Agents shall in all cases be fully
protected in acting or refraining from acting hereunder and thereunder in
accordance with the instructions of the Applicable Lenders, the Required
Lenders or the Required Borrower Group Lenders, as applicable, and such
instructions and any action taken or failure to act pursuant thereto shall be
binding upon Credit Parties.

 

12.4        Action
Upon Default.  None of the
Agents shall be deemed to have knowledge of any Default or Event of Default
unless it has received written notice from a Lender or Borrower specifying the
occurrence and nature thereof.  If any
Lender acquires knowledge of a Default or Event of Default, it shall promptly
notify the Agents and the other Lenders thereof in writing.  Each Lender agrees that, except as otherwise
provided in any Loan Documents or with the written consent of Agents and
Required Lenders, or Required Borrower Group Lenders, as applicable, it will
not take any Enforcement Action, accelerate its Obligations, or exercise any
right that it might otherwise have under Applicable Law to credit bid at
foreclosure sales, UCC sales or other similar dispositions of Collateral.  Notwithstanding the foregoing, however, a
Lender may take action to preserve or enforce its rights against an Obligor
where a deadline or limitation period is applicable that would, absent such
action, bar enforcement of Obligations held by such Lender, including the
filing of proofs of claim in an Insolvency Proceeding.

 

12.5        Ratable
Sharing.  If any
Lender shall obtain any payment or reduction of any Obligation, whether through
set-off or otherwise, in excess of its share of such Obligation, determined on
a Pro Rata basis or in accordance with Section 5.7.1.,
as applicable, such Lender shall forthwith purchase from Agents, Issuing Banks
and the other Lenders such participations in the affected Obligation as are
necessary to cause the purchasing Lender to share the excess payment or
reduction, net of costs incurred in connection therewith, on a Pro Rata basis
or in accordance with Section 5.7.1.,
as applicable.  If any of such payment or
reduction is thereafter recovered from the purchasing Lender, the purchase
shall be rescinded and the purchase price restored to the extent of such
recovery or additional costs, but without interest.

 

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12.6        Indemnification
of Agent Indemnitees

 

12.6.1      Indemnification.  EACH LENDER SHALL INDEMNIFY AND HOLD HARMLESS
AGENT INDEMNITEES, TO THE EXTENT NOT REIMBURSED BY OBLIGORS (BUT WITHOUT
LIMITING THE INDEMNIFICATION OBLIGATIONS OF OBLIGORS UNDER ANY LOAN DOCUMENTS),
ON A PRO RATA BASIS, AGAINST ALL CLAIMS THAT MAY BE INCURRED BY OR
ASSERTED AGAINST ANY AGENT INDEMNITEE. 
If any of the Agents is sued by any receiver, trustee in bankruptcy,
debtor-in-possession or other Person for any alleged preference from an Obligor
or fraudulent transfer, then any monies paid by Agents in settlement or
satisfaction of such proceeding, together with all interest, costs and expenses
(including attorneys’ fees) incurred in the defense of same, shall be promptly
reimbursed to Agents by Lenders to the extent of each Lender’s Pro Rata share.

 

12.6.2      Proceedings.  Without limiting the generality of the
foregoing, if at any time (whether prior to or after the Commitment Termination
Date) any proceeding is brought against any Agent Indemnitees by an Obligor, or
any Person claiming through an Obligor, to recover damages for any act taken or
omitted by any of the Agents in connection with any Obligations, Collateral,
Loan Documents or matters relating thereto, or otherwise to obtain any other
relief of any kind on account of any transaction relating to any Loan
Documents, each Lender agrees to indemnify and hold harmless Agent Indemnitees
with respect thereto and to pay to Agent Indemnitees such Lender’s Pro Rata
share of any amount that any Agent Indemnitee is required to pay under any
judgment or other order entered in such proceeding or by reason of any
settlement, including all interest, costs and expenses (including attorneys’
fees) incurred in defending same.  In the
Applicable Agent’s discretion, the Applicable Agent may reserve for any such
proceeding, and may satisfy any judgment, order or settlement, from proceeds of
Collateral prior to making any distributions of Collateral proceeds to Lenders.

 

12.7        Limitation
on Responsibilities of Agents.  None of the Agents shall be liable to Lenders
for any action taken or omitted to be taken under the Loan Documents, except
for losses directly and solely caused by the Applicable Agent’s gross
negligence or willful misconduct.  None
of the Administrative Agent’s assume any responsibility for any failure or
delay in performance or any breach by any Obligor or Lender of any obligations
under the Loan Documents.  None of the
Agents makes to Lenders any express or implied warranty, representation or
guarantee with respect to any Obligations, Collateral, Loan Documents or
Obligor.  No Agent Indemnitee shall be
responsible to Lenders for any recitals, statements, information,
representations or warranties contained in any Loan Documents; the execution,
validity, genuineness, effectiveness or enforceability of any Loan Documents;
the genuineness, enforceability, collectibility, value, sufficiency, location
or existence of any Collateral, or the validity, extent, perfection or priority
of any Lien therein; the validity, enforceability or collectibility of any
Obligations; or the assets, liabilities, financial condition, results of
operations, business, creditworthiness or legal status of any Obligor or
Account Debtor.  No Agent Indemnitee
shall have any obligation to any Lender to ascertain or inquire into the
existence of any Default or Event of Default, the observance or performance by
any Obligor of any terms of the Loan Documents, or the satisfaction of any
conditions precedent contained in any Loan Documents.

 

12.8        Successor
Agents and Co-Agents

 

12.8.1      Resignation; Successor Administrative
Agent.  Subject to the appointment
and acceptance of a successor Administrative Agent (or Canadian Agent) as
provided below, Administrative Agent (or Canadian Agent) may resign at any time
by giving at least thirty (30) days written notice thereof to Lenders and
Borrowers within each affected Borrower Group. 
Upon receipt of such notice, Required Lenders shall have the right to
appoint a successor Administrative Agent (or Canadian Agent) which shall be (a) a
Lender or an Affiliate of a Lender; or (b) a commercial bank that is
organized under the laws of the United States or any state or district thereof,
has a combined capital surplus of at least 

 

117

 

$200,000,000 and (provided
no Default or Event of Default exists) is reasonably acceptable to
Borrowers.  If no successor agent is
appointed prior to the effective date of the resignation of Administrative
Agent (or Canadian Agent), then Administrative Agent (or Canadian Agent) may
appoint a successor agent from among Lenders. 
Upon acceptance by a successor Administrative Agent (or Canadian Agent)
of an appointment to serve as Administrative Agent (or Canadian Agent)
hereunder, such successor Administrative Agent (or Canadian Agent) shall
thereupon succeed to and become vested with all the powers and duties of the
retiring Administrative Agent (or Canadian Agent) without further act, and the
retiring Administrative Agent (or Canadian Agent) shall be discharged from its
duties and obligations hereunder but shall continue to enjoy the benefits of
the indemnification set forth in Sections
12.6 and 14.2.  Notwithstanding any Agent’s resignation, the
provisions of this Section 12
shall continue in effect for its benefit with respect to any actions taken or
omitted to be taken by it while Administrative Agent (or Canadian Agent).  Any successor by merger or acquisition of the
stock or assets of Bank of America shall continue to be Administrative Agent
(or Canadian Agent) hereunder without further act on the part of the parties
hereto, unless such successor resigns as provided above.

 

12.8.2      Separate Collateral Agent.  It is the intent of the parties that there
shall be no violation of any Applicable Law denying or restricting the right of
financial institutions to transact business in any jurisdiction.  If Administrative Agent believes that it may
be limited in the exercise of any rights or remedies under the Loan Documents due
to any Applicable Law, any of the Agents may appoint an additional Person who
is not so limited, as a separate collateral agent or co-collateral agent.  If any of the Agents so appoints a collateral
agent or co-collateral agent, each right and remedy intended to be available to
Administrative Agent (or Canadian Agent) under the Loan Documents shall also be
vested in such separate agent.  Every
covenant and obligation necessary to the exercise thereof by such agent shall
run to and be enforceable by it as well as Administrative Agent (or Canadian
Agent) .  Lenders shall execute and
deliver such documents as Administrative Agent (or Canadian Agent) deems
appropriate to vest any rights or remedies in such agent.  If any collateral agent or co-collateral agent
shall die or dissolve, become incapable of acting, resign or be removed, then
all the rights and remedies of such agent, to the extent permitted by
Applicable Law, shall vest in and be exercised by Administrative Agent (or
Canadian Agent) until appointment of a new agent.

 

12.9        Solidary
Interests/Quebec Liens (Hypothecs).  For the purposes of creating a solidarité
active in accordance with Article 1541 of the Civil Code of Québec between
each Secured Party, taken individually, on the one hand, and Administrative
Agent, on the other hand, each Obligor granting a Lien (hypothec) to
Administrative Agent under the Civil Code of Quebec and each such Secured Party
acknowledges and agrees with Administrative Agent that such Secured Party and
Administrative Agent are hereby conferred the legal status of solidary
creditors of each such Obligor in respect of all indebtedness, liabilities and
other obligations, present and future, owed by each such Obligor to
Administrative Agent and such Secured Party hereunder and under the other Loan
Documents (collectively, the “Solidary Claim”) and that, accordingly,
but subject (for the avoidance of doubt) to Article 1542 of the Civil Code
of Québec, each such Obligor is irrevocably bound towards Administrative Agent
and each Secured Party in respect of the entire Solidary Claim of
Administrative Agent and such Secured Party. 
As a result of the foregoing, the parties hereto acknowledge that
Administrative Agent and each Secured Party shall at all times have a valid and
effective right of action for the entire Solidary Claim of Administrative Agent
and such Secured Party and the right to give full acquittance for it.  Accordingly, and without limiting the
generality of the foregoing, Administrative Agent, as solidary creditor with
each Secured Party, shall at all times have a valid and effective right of
action in respect of the Solidary Claim and the right to give a full
acquittance for same.  By its execution
of the Loan Documents to which it is a party, each such Obligor not a party
hereto shall also be deemed to have accepted the stipulations hereinabove
provided.  The parties further agree and
acknowledge that such 

 

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Liens (hypothecs) under the
Loan Documents shall be granted to Administrative Agent, for its own benefit
and for the benefit of Secured Parties, as solidary creditor as hereinabove set
forth.

 

12.10      Due
Diligence and Non-Reliance.  Each Lender acknowledges and agrees that it
has, independently and without reliance upon any of the Agents or any other
Lenders, and based upon such documents, information and analyses as it has
deemed appropriate, made its own credit analysis of each Obligor and its own
decision to enter into this Agreement and to fund Loans and participate in LC
Obligations hereunder.  Each Lender has
made such inquiries concerning the Loan Documents, the Collateral and each
Obligor as such Lender feels necessary. 
Each Lender further acknowledges and agrees that the other Lenders and
Agents have made no representations or warranties concerning any Obligor, any
Collateral or the legality, validity, sufficiency or enforceability of any Loan
Documents or Obligations.  Each Lender
will, independently and without reliance upon the other Lenders or Agents, and
based upon such financial statements, documents and information as it deems
appropriate at the time, continue to make and rely upon its own credit
decisions in making Loans and participating in LC Obligations, and in taking or
refraining from any action under any Loan Documents.  Except for notices, reports and other
information expressly requested by a Lender, none of the Agents shall have any
duty or responsibility to provide any Lender with any notices, reports or
certificates furnished to Administrative Agent by any Obligor or any credit or
other information concerning the affairs, financial condition, business or
Properties of any Obligor (or any of its Affiliates) which may come into
possession of any of the Agents or any of Agents’ Affiliates.

 

12.11      Replacement
of Certain Lenders.  If a
Lender (an “Affected Lender”) shall have (i) failed to fund its Pro
Rata share of any Loan or LC Obligation requested (or deemed requested) by a
Borrower which such Lender is obligated to fund under the terms of this
Agreement and which such failure has not been cured within two (2) Business
Days, (ii) requested compensation from Borrower under Section 3.6 to recover increased costs
incurred by such Lender (or its parent or holding company) which are not
being incurred generally by the other Lenders (or their respective parents or
holding companies), (iii) delivered a notice pursuant to Section 3.5 hereof claiming that such
Lender is unable to extend Interest Periods Loans to such Borrower for reasons
not generally applicable to the other Lenders, or (iv) failed or
refused to give its consent to any amendment, waiver or action for which
consent of all of the Lenders (or all Borrower Group Lenders, as applicable) is
required and in respect of which the Required Lenders (or Required Borrower
Group Lenders, as applicable) have consented, then, in any such case and in
addition to any other rights and remedies that any of Agents, any other Lender
or Borrowers may have against such Affected Lender, Borrower or the Applicable
Agent may make written demand on such Affected Lender (with a copy to
Agents in the case of a demand by Borrowers and a copy to Borrowers in the case
of a demand by Agents) for the Affected Lender to assign, and such Affected
Lender shall assign pursuant to one or more duly executed Assignment and
Acceptances within five (5) Business Days after the date of such demand,
to one or more Lenders willing to accept such assignment or assignments, or to
one or more Eligible Assignees designated by Agents, all of such Affected
Lender’s rights and obligations under this Agreement (including its Commitments
and all Loans owing to it) in accordance with Section 13
hereof.  Each of the Agents is
hereby irrevocably authorized to execute one or more Assignment and Acceptances
as attorney-in-fact for any Affected Lender which fails or refuses to execute
and deliver the same within five (5) Business Days after the date of such
demand.  The Affected Lender shall be
entitled to receive, in cash and concurrently with execution and delivery of
each such Assignment and Acceptance, all amounts owed to the Affected Lender
hereunder or under any other Loan Document, including the aggregate outstanding
principal amount of the Loans owed to such Lender, together with accrued
interest thereon through the date of such assignment.  Upon the replacement of any Affected Lender
pursuant to this Section 12.11,
such Affected Lender shall cease to have any participation in, entitlement
to, or other right to share in the Liens of Agents in any Collateral and
such Affected Lender shall have no further liability to any Agent, any
Lender or any other Person 

 

119

 

under any of the Loan
Documents (except as provided in Section 12.6
hereof as to events or transactions which occur prior to the replacement of
such Affected Lender), including any commitment to make Loans or purchase
participations in LC Obligations.

 

12.12      Remittance
of Payments and Collections

 

12.12.1    Remittances Generally.  All payments by any Lender to any of Agents
shall be made by the time and on the day set forth in this Agreement, in
immediately available funds.  If no time
for payment is specified or if payment is due on demand by the Applicable Agent
and request for payment is made by the Applicable Agent by 11:00 a.m.
(prevailing time in the location of the Appropriate Notice Office) on a
Business Day, payment shall be made by Lender not later than 11:00 a.m.
(prevailing time in the location of the Appropriate Notice Office) on the next
Business Day.  Payment by any of the
Agents to any Lender shall be made by wire transfer, in the type of funds
received by the Applicable Agent; provided, however, that if the Applicable
Agent receives such funds at or prior to 12:00 noon (prevailing time in the
location of the Appropriate Notice Office), such Applicable Agent shall pay
such funds to such Lender by 2:00 p.m. (prevailing time in the location of
the Appropriate Notice Office) on such Business Day, but if such Applicable
Agent receives such funds after 12:00 noon (prevailing time in the location of
the Appropriate Notice Office), such Applicable Agent shall pay such funds to
such Lender by 2:00 p.m. (prevailing time in the location of the
Appropriate Notice Office) on the next Business Day  Any such payment shall be subject to the
Applicable Agent’s right of offset for any amounts due from such Lender under
the Loan Documents.

 

12.12.2    Failure to Pay.  If any Lender fails to pay any amount when
due by it to any of the Agents pursuant to the terms hereof, such amount shall
bear interest from the due date until paid at the Delayed Credit Party Payment
Rate.  In no event shall Borrowers be
entitled to receive credit for any interest paid by a Lender to the Applicable
Agent.

 

12.12.3    Recovery of Payments.  If any of the Agents pays any amount to a
Lender in the expectation that a related payment will be received by the
Applicable Agent from an Obligor and such related payment is not received, then
the Applicable Agent may recover such amount from each Lender that received
it.  If any of the Agents determines at
any time that an amount received under any Loan Document must be returned to an
Obligor or paid to any other Person pursuant to Applicable Law or otherwise,
then, notwithstanding any other term of any Loan Document, the Applicable Agent
shall not be required to distribute such amount to any Lender.  If any amounts received and applied by any of
the Agents to any Obligations are later required to be returned by the
Applicable Agent pursuant to Applicable Law, Lenders shall pay to the
Applicable Agent, on demand, such Lender’s Pro Rata share of the amounts
required to be returned.

 

12.13      Agents in
their Individual Capacities.  As a Lender, Bank of America shall have the
same rights and remedies under the other Loan Documents as any other Lender,
and the terms “Lenders,” “Required Lenders” or any similar term shall include
Bank of America in its capacity as a Lender. 
Each of Bank of America and its Affiliates may accept deposits from,
maintain deposits or credit balances for, invest in, lend money to, provide
Bank Products to, act as trustee under indentures of, serve as financial or
other advisor to, and generally engage in any kind of business with, Obligors
and their Affiliates, as if Bank of America were any other bank, without any
duty to account therefor (including any fees or other consideration received in
connection therewith) to the other Lenders. 
In their individual capacity, Bank of America and its Affiliates may
receive information regarding Obligors, their Affiliates and their Account
Debtors (including information subject to confidentiality obligations), and
each Lender agrees that Bank of America and its Affiliates shall be under no
obligation to provide such information to Lenders, if acquired in such
individual capacity and not as Administrative Agent hereunder.

 

120

 

12.14      No Third
Party Beneficiaries.  This
Section 12 is an agreement
solely among Lenders and Agents, and does not confer any rights or benefits
upon Borrowers or any other Person.  As
between Borrowers and Agents, any action that Agents may take under any Loan
Documents shall be conclusively presumed to have been authorized and directed
by Lenders as herein provided.

 

SECTION  13.      BENEFIT
OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS

 

13.1        Successors
and Assigns.  This
Agreement shall be binding upon and inure to the benefit of Borrowers, Agents
and Lenders and their respective successors and assigns, except that (a) no
Borrower shall have the right to assign its rights or delegate its obligations
under any Loan Documents, and (b) any assignment by a Lender must be made
in compliance with Section 13.3.  Each of the Agents may treat the Person which
made any Loan as the owner thereof for all purposes until such Person makes an
assignment in accordance with Section 13.3.  Any authorization or consent of a Lender
shall be conclusive and binding on any subsequent transferee or assignee of
such Lender.

 

13.2        Participations

 

13.2.1      Permitted Participants; Effect.  Any Lender may, in the ordinary course of its
business and in accordance with Applicable Law, at any time sell to a financial
institution (“Participant”) a participating interest in the rights and
obligations of such Lender under any Loan Documents.  Despite any sale by a Lender of participating
interests to a Participant, such Lender’s obligations under the Loan Documents
shall remain unchanged, such Lender shall remain solely responsible to the
other parties hereto for performance of such obligations, such Lender shall
remain the holder of its Loans and Borrower Group Commitments for all purposes,
all amounts payable by Borrowers shall be determined as if such Lender had not
sold such participating interests, and Borrowers and Agents shall continue to
deal solely and directly with such Lender in connection with the Loan
Documents.  Each Lender shall be solely
responsible for notifying its Participants of any matters under the Loan Documents,
and Agents and the other Lenders shall not have any obligation or liability to
any such Participant.  A Participant that
would be a Foreign Lender if it were a Lender shall not be entitled to the
benefits of Section 5.10
unless Borrowers agree otherwise in writing.

 

13.2.2      Voting Rights.  Each Lender shall retain the sole right to
approve, without the consent of any Participant, any amendment, waiver or other
modification of any Loan Documents other than that which forgives principal,
interest or fees, reduces the stated interest rate or fees payable with respect
to any Loan or Borrower Group Commitment in which such Participant has an
interest, postpones the Commitment Termination Date or any date fixed for any
regularly scheduled payment of principal, interest or fees on such Loan or Borrower
Group Commitment, or releases any Borrower, Guarantor or substantial portion of
the Collateral.

 

13.2.3      Benefit of Set-Off.  Borrowers agree that each Participant shall
have a right of set-off in respect of its participating interest relating to
the particular Borrower Group to the same extent as if such interest were owing
directly to a Lender, and each Lender shall also retain the right of set-off
with respect to any participating interests sold by it.  By exercising any right of set-off, a
Participant agrees to share with Lenders all amounts received through its
set-off, in accordance with Section 12.5
as if such Participant were a Lender.

 

13.3        Assignments

 

13.3.1      Permitted Assignments.  A Lender may assign to any Eligible Assignee
any of its rights and obligations under the Loan Documents, as long as (a) each
assignment is of a constant, and not 

 

121

 

a varying, percentage of the
transferor Lender’s rights and obligations under the Loan Documents and, in the
case of a partial assignment, is in a minimum principal amount of $5,000,000
(unless otherwise agreed by the Applicable Agent in its discretion) and
integral multiples of $5,000,000 in excess of that amount; (b) except in
the case of an assignment in whole of a Lender’s rights and obligations, the
aggregate amount of the Borrower Group Commitments retained by the transferor
Lender be at least $15,000,000 (unless otherwise agreed by the Applicable Agent
in its discretion); and (c) the parties to each such assignment shall
execute and deliver to Administrative Agent, for its acceptance and recording,
an Assignment and Acceptance.  Nothing
herein shall limit the right of a Lender to pledge or assign any rights under
the Loan Documents to (i) any Federal Reserve Bank or the United States
Treasury as collateral security pursuant to Regulation A of the Board of
Governors and any operating circular issued by such Federal Reserve Bank, or (ii) counterparties
to swap agreements relating to any Loans; provided, however, that any payment
by Borrowers to the assigning Lender in respect of any Obligations assigned as
described in this sentence shall satisfy Borrowers’ obligations hereunder to
the extent of such payment, and no such assignment shall release the assigning
Lender from its obligations hereunder.

 

13.3.2      Effect; Effective Date.  Upon delivery to Administrative Agent of an
assignment notice in the form of Exhibit F,
such assignment shall become effective as specified in the notice, if it
complies with this Section 13.3.  From the effective date of such assignment,
the Eligible Assignee shall for all purposes be a Lender under the Loan
Documents, and shall have all rights and obligations of a Lender thereunder.  Upon consummation of an assignment, the transferor
Lender, Agents and Borrowers shall make appropriate arrangements for issuance
of replacement and/or new Notes, as appropriate. The transferee Lender shall
comply with Section 5.10.3
with respect to U.S. Borrowers, and Section 5.10.4
with respect to Canadian Borrower, in each case to the extent compliance by
such Lender is required thereunder.

 

13.4        Representation
of Lenders.  Each Lender
represents and warrants to each Borrower, Administrative Agent and other
Lenders that none of the consideration used by it to fund its Loans or to
participate in any other transactions under this Agreement constitutes for any
purpose of ERISA or Section 4975 of the Internal Revenue Code assets of
any “plan” as defined in Section 3(3) of ERISA or Section 4975
of the Internal Revenue Code and the interests of such Lender in and under the
Loan Documents shall not constitute plan assets under ERISA.

 

SECTION  14.      MISCELLANEOUS

 

14.1        Consents,
Amendments and Waivers

 

14.1.1      Amendment.  No modification of any Loan Document, including
any extension or amendment of a Loan Document or any waiver of a Default or
Event of Default, shall be effective without the prior written agreement of
each of the Agents, with the consent of Required Lenders, and each Obligor
party to such Loan Document; provided, however, that:

 

(b)           without the prior written consent of
the Applicable Agent, no modification shall be effective with respect to any
provision in a Loan Document that relates to any rights, duties or discretion
of such Applicable Agent;

 

(c)           without the prior written consent of Issuing Bank, no
modification shall be effective with respect to any LC Obligations or Section 2.3;

 

122

 

(d)           without the prior written consent of each affected Lender,
no modification shall be effective that would (i) increase any Borrower
Group Commitment of such Lender; or (ii) reduce the amount of, or waive or
delay payment of, any principal, interest or fees payable to such Lender;

 

(e)           without the prior written consent of all Lenders (except a
defaulting Lender as provided in Section 4.2),
no modification shall be effective that would (i) extend the Revolver
Termination Date; (ii) alter Section 5.7,
7 (except to add Collateral) or 14.1.1; (iii) amend the definitions of
Borrowing Base (and the component terms used in such definition), Pro Rata or
Required Lenders or Required Borrower Group Lenders; (iv) increase any
advance rate; (v) release a material portion of the Collateral, except as
currently contemplated by the Loan Documents; (vi) alter the time or
amount of repayment of any of the Loans (except a moratorium or deferral of
payment pursuant to a forbearance agreement entered into by Administrative
Agent and the Required Lenders with Borrowers at any time an Event of Default
exists) or waive any Event of Default resulting from nonpayment of the Loans on
the due date thereof (or within any applicable period of grace), (vii) forgive
any of the Obligations, except any portion of the Obligations held by a Lender
who consents in writing to such forgiveness, (viii) increase the Maximum
Revolver Facility Amount other than pursuant to Section 2.1.9, or (ix) release any Obligor from
liability for any Obligations, if such Obligor is Solvent at the time of the
release;

 

(f)            without the prior written consent of the Required
Borrower Group Lenders with respect to a Borrower Group, no amendment or waiver
shall be effective that would affect such Borrower Group, the Borrower Group
Obligations of such Borrower Group or the Collateral of such Borrower Group;

 

(g)           without the prior written consent of all Borrower Group
Lenders with respect to U.S. Borrowers, no modification shall be effective that
would increase the U.S. Revolver Facility Amount other than pursuant to Section 2.1.9, and without the prior
written consent of all Borrower Group Lenders with respect to Canadian
Borrower, no modification shall be effective that would increase the Canadian
Revolver Facility Amount other than pursuant to Section 2.1.9; and

 

(h)           the Required Borrower Group Lenders with respect to a
Borrower Group may waive any Default or Event of Default, except where the
written consent of all Applicable Lenders with respect to such Borrower Group
is required pursuant to clause (d) of this Section 14.1.1.

 

14.1.2      Limitations.  The agreement of Borrowers shall not be
necessary to the effectiveness of any modification of a Loan Document that
deals solely with the rights and duties of Lenders, Agents and/or Issuing Banks
as among themselves.  Only the consent of
the parties to the Fee Letter or any agreement relating to a Bank Product shall
be required for any modification of such agreement, and no Affiliate of a
Lender that is party to a Bank Product agreement shall have any other right to
consent to or participate in any manner in modification of any other Loan
Document.  The making of any Loans during
the existence of a Default or Event of Default shall not be deemed to
constitute a waiver of such Default or Event of Default, nor to establish a
course of dealing.  Any waiver or consent
granted by Lenders hereunder shall be effective only if in writing, and then
only in the specific instance and for the specific purpose for which it is
given.

 

14.1.3      Payment for Consents.  No Borrower will, directly or indirectly, pay
any remuneration or other thing of value, whether by way of additional
interest, fee or otherwise, to any Lender (in its capacity as a Lender
hereunder) as consideration for agreement by such Lender with any modification
of any Loan Documents, unless such remuneration or value is concurrently paid,
on the same terms, on a Pro Rata basis to all Lenders providing their consent.

 

123

 

14.1.4      Overadvances.  Unless otherwise directed in writing by the
Required Lenders, Agents may require Lenders to honor requests by Borrowers for
Overadvance Loans (in which event, and notwithstanding anything to the contrary
set forth in Section 2.1 or
elsewhere in this Agreement, Lenders shall continue to make Revolver Loans up
to their Pro Rata share of the Borrower Group Commitments) and to forbear from
requiring Borrowers to cure an Overadvance, (1) when no Event of Default
exists (or if an Event of Default exists, when the existence of such Event of
Default is not known by Administrative Agent), if and for so long as (i) such
Overadvance does not continue for a period of more than thirty (30) consecutive
days, following which no Overadvance exists for at least thirty (30)
consecutive days before another Overadvance exists, (ii) the amount of the
Revolver Loans outstanding at any time does not exceed the aggregate of the
Commitments at such time, and (iii) the Overadvance is not known by the
Applicable Agent at the time in question to exceed $15,000,000; and (2) regardless
of whether or not an Event of Default exists, if the Applicable Agent discovers
the existence of an Overadvance not previously known by it to exist, Lenders
shall be obligated to continue making such Revolver Loans as directed by the
Applicable Agent only (A) if the amount of the Overadvance is not
increased by more than $15,000,000  above the amount determined by the
Applicable Agent to exist on the date of discovery thereof and (B) for a
period not to exceed fifteen (15) Business Days; provided, however, that
without the consent of all Lenders, the aggregate amount of the Overadvance
permitted under this Section 14.1.4, together
with the aggregate amount of any Protective Advances outstanding under Section 2.1.8, may not exceed
$25,000,000 at any time.  If any
Overadvance shall continue to exist at any time after the expiration of the
periods set forth in clauses (1) or (2) above, the Applicable Agent
may (and shall at the request of the Required Lenders) demand payment
thereof.  In no event shall any Borrower
or any other Obligor be deemed to be a beneficiary of this Section 14.1.4 or authorized to
enforce any of the provisions of this Section 14.1.4.  The provisions of this Section 14.1.4 shall be in addition to
the provisions of Section 2.1.7
hereof.

 

14.2        General
Indemnity.  EACH
BORROWER SHALL INDEMNIFY AND HOLD HARMLESS THE INDEMNITEES AGAINST ANY CLAIMS
THAT MAY BE INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEES, INCLUDING
CLAIMS ARISING FROM THE NEGLIGENCE OF AN INDEMNITEE.  NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED HEREIN, THE INDEMNIFICATION PROVISIONS OF THE ENVIRONMENTAL
AGREEMENTS SHALL BE THE SOLE AND EXCLUSIVE INDEMNITY PROVISIONS APPLICABLE TO
ANY INDEMNITEE WITH RESPECT TO THE ENVIRONMENTAL DAMAGES DESCRIBED IN SECTION 6
THEREOF.

 

14.3        Limitations
of Indemnities.  IN NO EVENT
SHALL ANY PARTY TO A LOAN DOCUMENT HAVE ANY OBLIGATION THEREUNDER TO INDEMNIFY
AN INDEMNITEE WITH RESPECT TO A CLAIM (A) THAT IS DETERMINED IN A FINAL,
NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO RESULT FROM THE
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE OR (B) WHICH
CONSTITUTE SPECIAL, INDIRECT, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES (AS
OPPOSED TO DIRECT OR ACTUAL DAMAGES) IN ANY WAY.  NOTWITHSTANDING ANYTHING TO THE CONTRARY IN SECTION 14.2
HEREOF, CANADIAN BORROWER’S OBLIGATION TO PAY AND INDEMNIFY SHALL BE LIMITED TO
MATTERS, FEES, EXPENSES CHARGES AND DISBURSEMENT, OR LOSSES, CLAIMS, DAMAGES
AND LIABILITIES WHICH ADMINISTRATIVE AGENT OR CANADIAN AGENT DETERMINES IN ITS
REASONABLE JUDGMENT TO BE PROPERLY ATTRIBUTABLE OR ALLOCABLE TO CANADIAN
BORROWER.  The obligation of each Obligor
and Credit Party with respect to each indemnity given by it in any Loan
Documents shall survive Full Payment of the Obligations.

 

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14.4        Notices
and Communications

 

14.4.1      Notice Address.  Subject to Section 4.1.4,
all notices, requests and other communications by or to a party hereto shall be
in writing and shall be given to any Borrower, at Borrower Agent’s address
shown on the signature pages hereof, and to any other Person at its
address shown on the signature pages hereof (or, in the case of a Person
who becomes a Lender after the Closing Date, at the address shown on its
Assignment and Acceptance), or at such other address as a party may hereafter
specify by notice in accordance with this Section 14.4.  Each such notice, request or other
communication shall be effective only (a) if given by facsimile
transmission, when transmitted to the applicable facsimile number, if
confirmation of receipt is received; (b) if given by mail, three (3) Business
Days after deposit in the U.S. mail, with first-class postage pre-paid,
addressed to the applicable address; or (c) if given by personal delivery
or nationally recognized overnight courier, when duly delivered to the notice
address with receipt acknowledged. 
Notwithstanding the foregoing, no notice to any of the Agents pursuant
to Section 2.1.6, 2.3, 3.1.2
or 4.1.1 shall be effective until
actually received by the individual to whose attention at the Applicable Agent
such notice is required to be sent.  Any
written notice, request or other communication that is not sent in conformity
with the foregoing provisions shall nevertheless be effective on the date
actually received by the noticed party. 
Any notice received by Borrower Agent shall be deemed received by all
Borrowers.

 

14.4.2      Electronic Communications; Voice Mail.  Electronic mail and internet websites may be
used only for routine communications, such as financial statements, Borrowing
Base Certificates and other information required by Section 10.1.2, administrative matters, and distribution
of Loan Documents for execution and matters permitted under Section 4.1.4.  Agents and the other Credit Parties make no
assurances as to the privacy and security of electronic communications.  Electronic and voice mail may not be used as
effective notice under the Loan Documents.

 

14.4.3      Non-Conforming Communications.  Agents and the other Credit Parties may rely
upon any notices (including telephonic communications) purportedly given by or
on behalf of any Borrower even if such notices were not made in a manner
specified herein, were incomplete or were not confirmed, or if the terms
thereof, as understood by the recipient, varied from a later confirmation.  Each Borrower shall indemnify and hold
harmless each Indemnitee from any liabilities, losses, costs and expenses
arising from any telephonic communication purportedly given by or on behalf of
a Borrower, subject to the limitations set forth in Section 14.3.

 

14.5        Performance
of Borrowers’ Obligations.  Each of the Agents may, in its discretion at
any time and from time to time, at Borrowers’ expense, pay any amount or do any
act required of a Borrower under any Loan Documents or otherwise lawfully
requested by the Applicable Agent to (a) enforce any Loan Documents or
collect any Obligations; (b) protect, insure, maintain or realize upon any
Collateral; or (c) defend or maintain the validity or priority of Agents’
Liens in any Collateral; including any payment of a judgment, insurance
premium, warehouse charge, finishing or processing charge, or landlord claim,
or any discharge of a Lien.  All
payments, costs and expenses (including Extraordinary Expenses) of Agents under
this Section shall be reimbursed to Agents by Borrowers, on demand, with
interest from the date incurred to the date of payment thereof at the Default
Rate applicable to U.S. Base Rate Revolver Loans.  Any payment made or action taken by Agents
under this Section shall be without prejudice to any right to assert an
Event of Default or to exercise any other rights or remedies under the Loan
Documents.

 

14.6        Credit
Inquiries.  Each
Borrower hereby authorizes Agents and the other Credit Parties (but they shall
have no obligation) to respond to usual and customary credit inquiries from
third parties 

 

125

 

concerning any Borrower or
its Subsidiaries, in each case, subject to Agents’ and the other Credit Parties’
obligations under Section 14.13.

 

14.7        Severability.  Wherever possible, each provision of the Loan
Documents shall be interpreted in such manner as to be valid under Applicable
Law.  If any provision is found to be
invalid under Applicable Law, it shall be ineffective only to the extent of
such invalidity and the remaining provisions of the Loan Documents shall remain
in full force and effect.

 

14.8        Cumulative
Effect; Conflict of Terms.  The provisions of the Loan Documents are
cumulative.  The parties acknowledge that
the Loan Documents may use several different limitations, tests or measurements
to regulate the same or similar matters, and they agree that these are
cumulative and that each must be performed as provided.  Except as otherwise specifically provided in
another Loan Document (by specific reference to the applicable provision of
this Agreement), if any provision contained herein is in direct conflict with
any provision in another Loan Document, the provision herein shall govern and
control.

 

14.9        Counterparts;
Facsimile Signatures.  Any
Loan Document may be executed in counterparts, each of which taken together
shall constitute one instrument.  Loan
Documents may be executed and delivered by facsimile, and they shall have the
same force and effect as manually signed originals.  Administrative Agent may require confirmation
by a manually-signed original, but failure to request or deliver same shall not
limit the effectiveness of any facsimile signature.

 

14.10      Entire
Agreement.  Time is of
the essence of the Loan Documents.  The
Loan Documents embody the entire understanding of the parties with respect to
the subject matter thereof and supersede all prior understandings regarding the
same subject matter.

 

14.11      Obligations
of Lenders.  The
obligations of each Lender hereunder are several, and no Lender shall be
responsible for the obligations or Commitments of any other Lender.  Amounts payable hereunder to each Lender
shall be a separate and independent debt, and each Lender shall be entitled, to
the extent not otherwise restricted hereunder, to protect and enforce its
rights arising out of the Loan Documents. 
It shall not be necessary for any of the Agents or any other Lender to
be joined as an additional party in any proceeding for such purposes.  Nothing in this Agreement and no action of
any of the Agents or Lenders pursuant to the Loan Documents shall be deemed to
constitute Agents and Lenders to be a partnership, association, joint venture
or any other kind of entity, nor to constitute control of any Borrower.  Each Borrower acknowledges and agrees that in
connection with all aspects of any transaction contemplated by the Loan
Documents, Borrowers, Agents, Issuing Banks and Lenders have an arms-length
business relationship that creates no fiduciary duty on the part of any of the
Agents, Issuing Banks or Lenders, and each of Borrowers, Agents, Issuing Banks
and Lenders expressly disclaims any fiduciary relationship.

 

14.12      Lender
Loss Sharing Agreement.

 

(a)           Definitions.  As used in this Section 14.12, the following terms shall have the
following meanings:

 

(i)            CAM: the
mechanism for the allocation and exchange of interests in the Loans,
participations in Letters of Credit and collections thereunder established
under Section 14.12(b).

 

126

 

(ii)           CAM Exchange: the exchange of
the U.S. Lenders’ interests and the Canadian Lenders’ interests provided for in
Section 14.12(b).

 

(iii)          CAM Exchange Date: the first
date after the Closing Date on which there shall occur (a) any event described
in Section 11.1(j) with
respect to any Borrower, or (b) an acceleration of Loans and termination
of the Commitments pursuant to Section 11.2.

 

(iv)          CAM Percentage: as to each
Lender, a fraction, (a) the numerator of which shall be the aggregate amount
of such Lender’s Commitments immediately prior to the CAM Exchange Date and the
termination of the Commitments, and (b) the denominator of which shall be
the amount of the Commitments of all the Lenders immediately prior to the CAM
Exchange Date and the termination of the Commitments.

 

(v)           Designated Obligations: all
Obligations of the Borrowers with respect to (a) principal and interest
under the U.S. Revolver Loans, Canadian Revolver Loans, Swingline Loans,
Overadvance Loans and Protective Advances, (b) unreimbursed drawings under
Letters of Credit and interest thereon, and (c) fees under Sections 3.2.2 and 3.2.3(a).

 

(vi)          Revolver Facilities: the
facility established for the U.S. Revolver Loans and the Canadian Revolver
Loans, and Revolver Facility means any one of such Revolver Facilities.

 

(b)           CAM Exchange.

 

(i)            On the CAM Exchange
Date,

 

(a)           the Borrower Group Commitments for
U.S. Revolver Loans and the Borrower Group Commitments for Canadian Revolver
Loans shall have terminated in accordance with Section 11.2 of this Agreement,

 

(b)           each U.S. Lender shall fund its
participation in any outstanding Swingline Loans and Protective Advances in
accordance with Section 4.1.3(b) and
Section 2.1.8 of this
Agreement, and each Canadian Lender shall fund its participation in any
outstanding Swingline Loans and Protective Advances in accordance with Section 4.1.3(b) and Section 2.1.8 of this Agreement,

 

(c)           each U.S. Lender shall fund its
participation in any unreimbursed drawings made under the applicable U.S. Letters
of Credit pursuant to Section 2.3.2(b),
and each Canadian Lender shall fund its participation in any unreimbursed
drawings made under the applicable Canadian Letters of Credit pursuant to Section 2.3.2(b), and

 

(d)           the Lenders shall purchase at par interests
in the Designated Obligations under each Revolver Facility (and shall make
payments to Administrative Agent for reallocation to other Lenders to the
extent necessary to give effect to such purchases) and shall assume the
obligations to reimburse Issuing Bank for unreimbursed drawings under
outstanding Letters of Credit under such Revolver Facility such that, in lieu
of the interests of each Lender in the Designated Obligations under Borrower
Group Commitments for U.S. Revolver Loans and the Borrower Group Commitments
for Canadian Revolver 

 

127

 

Loans in which it shall
participate immediately prior to the CAM Exchange Date, such Lender shall own
an interest equal to such Lender’s CAM Percentage in each component of the
Designated Obligations immediately following the CAM Exchange.

 

(ii)           Each Lender and
each Person acquiring a participation from any Lender as contemplated by Section 13.2 hereby consents and
agrees to the CAM Exchange.  Each
Borrower agrees from time to time to execute and deliver to Lenders all such
promissory notes and other instruments and documents as Administrative Agent
shall reasonably request to evidence and confirm the respective interests and
obligations of Lenders after giving effect to the CAM Exchange, and each Lender
agrees to surrender any promissory notes originally received by it in
connection with its Loans under this Agreement to Administrative Agent against
delivery of any promissory notes so executed and delivered; provided  that
the failure of any Lender to deliver or accept any such promissory note,
instrument or document shall not affect the validity or effectiveness of the
CAM Exchange.

 

(iii)          As a result of the CAM Exchange, from
and after the CAM Exchange Date, each payment received by Administrative Agent
pursuant to any Loan Document in respect of any of the Designated Obligations
shall be distributed to Lenders, pro rata in accordance with their respective
CAM Percentages.

 

(iv)          In the event that on or after the CAM
Exchange Date, the aggregate amount of the Designated Obligations shall change
as a result of the making of a disbursement under a Letter of Credit by Issuing
Bank that is not reimbursed by U.S. Borrowers or Canadian Borrower, as
applicable, then each Lender shall promptly reimburse Issuing Bank for its CAM
Percentage of such unreimbursed payment.

 

Notwithstanding any other
provision of this Section 14.12,
each of Agents and Lenders agree that if any of Agents or Lenders is required
under Applicable Law to withhold or deduct any taxes or other amounts from
payments made by it hereunder or as a result hereof, such Person shall be
entitled to withhold or deduct such amounts and pay over such taxes or other
amounts to the applicable Governmental Authority imposing such tax without any
obligation to indemnify any of Agents or Lenders with respect to such amounts
and without any other obligation of gross up or offset with respect thereto and
there shall be no recourse whatsoever by Agents or Lenders subject to such
withholding to Agents or any other Lenders making such withholding and paying
over such amounts, but without diminution of the rights of Agents or such
Lenders subject to such withholding as against Borrowers and the other Obligors
to the extent (if any) provided in this Agreement and the other Loan
Documents.  Any amounts so withheld or
deducted shall be treated as, for the purpose of this Section 14.12, having been paid to
Agents or such Lenders with respect to which such withholding or deduction was
made.

 

14.13      Confidentiality.  During the term of this Agreement, the Credit
Parties agree to take reasonable precautions to maintain the confidentiality of
any information that Borrowers deliver to the Credit Parties and identify as
confidential at the time of delivery, except that Administrative Agent and any
of the other Credit Parties may disclose such information (a) to their
respective officers, directors, employees, Affiliates and agents, including
legal counsel, auditors and other professional advisors; (b) to any party
to the Loan Documents from time to time; (c) pursuant to the order of any
court or administrative agency; (d) upon the request of any Governmental
Authority exercising regulatory authority over the Applicable Agent or such
other Credit Party; (e) which ceases to be confidential, other than by an
act or omission of the Applicable Agent or any other Credit Party, or which
becomes available to the Applicable Agent or any other Credit Party on a
non-confidential basis; (f) to the extent reasonably 

 

128

 

required in connection with
any litigation relating to any Loan Documents or transactions contemplated
thereby, or otherwise as required by Applicable Law; (g) to the extent
reasonably required for the exercise of any rights or remedies under the Loan
Documents; (h) to any actual or proposed party to a Bank Product or to any
Transferee, as long as such Person agrees to be bound by the provisions of this
Section; (i) to the National Association of Insurance Commissioners or any
similar organization, or to any nationally recognized rating agency that
requires access to information about a Credit Party’s portfolio in connection
with ratings issued with respect to such Credit Party; (j) to any investor
or potential investor in an Approved Fund that is a Credit Party or Transferee,
but solely for use by such investor to evaluate an investment in such Approved
Fund, or to any manager, servicer or other Person in connection with its
administration of any such Approved Fund; or (k) with the consent of
Borrowers.  Notwithstanding the
foregoing, Agents and the other Credit Parties may with the prior written
consent of Borrowers, issue and disseminate to the public general information
describing this credit facility, including the names and addresses of Borrowers
and a general description of Borrowers’ businesses, and may use Borrowers’
names in advertising and other promotional materials.

 

14.14      Governing
Law.  THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS, UNLESS OTHERWISE SPECIFIED, SHALL BE GOVERNED BY THE LAWS OF
THE STATE OF GEORGIA WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES
(BUT GIVING EFFECT TO FEDERAL LAWS RELATING TO NATIONAL BANKS); PROVIDED,
HOWEVER, THAT IF THE LAWS OF ANY JURISDICTION OTHER THAN GEORGIA SHALL GOVERN
IN REGARD TO THE VALIDITY, PERFECTION OR EFFECT OF PERFECTION OF ANY LIEN OR IN
REGARD TO PROCEDURAL MATTERS AFFECTING ENFORCEMENT OF ANY LIENS IN COLLATERAL,
SUCH LAWS OF SUCH OTHER JURISDICTIONS SHALL CONTINUE TO APPLY TO THAT EXTENT.

 

14.15      Consent to
Forum.  EACH
BORROWER HEREBY CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF ANY FEDERAL OR
STATE COURT SITTING IN OR WITH JURISDICTION OVER THE NORTHERN DISTRICT OF
GEORGIA, IN ANY PROCEEDING OR DISPUTE RELATING IN ANY WAY TO ANY LOAN
DOCUMENTS, AND AGREES THAT ANY SUCH PROCEEDING SHALL BE BROUGHT BY IT SOLELY IN
ANY SUCH COURT.  EACH BORROWER
IRREVOCABLY WAIVES ALL CLAIMS, OBJECTIONS AND DEFENSES THAT IT MAY HAVE
REGARDING SUCH COURT’S PERSONAL OR SUBJECT MATTER JURISDICTION, VENUE OR
INCONVENIENT FORUM.  Nothing herein shall
limit the right of any of the Agents or any other Credit Party to bring
proceedings against any Obligor in any other court.  Nothing in this Agreement shall be deemed to
preclude enforcement by Agents of any judgment or order obtained in any forum
or jurisdiction.

 

14.16      Waivers by
Borrowers.  To the fullest extent
permitted by Applicable Law, each Borrower waives (a) the right to trial
by jury (which each of Agents and the other Credit Parties hereby also waive)
in any proceeding, claim or counterclaim of any kind relating in any way to any
Loan Documents, Obligations or Collateral; (b) presentment, demand, and
protest, and notice of presentment, default, non-payment, maturity, release,
compromise, settlement, extension or renewal of any commercial paper, accounts,
contract rights, documents, instruments, chattel paper and guaranties at any
time held by Agents on which a Borrower may in any way be liable, and hereby
ratifies anything Agents may do in this regard; (c) notice prior to taking
possession or control of any Collateral 
or any bond or security which might be required by any court prior to
allowing Agents to exercise any of Agents’ remedies; (d) the benefit of
all valuation, appraisement and exemption laws; (e) any claim against any
of Agents or the other Credit Parties, on any theory of liability, for special,
indirect, consequential, exemplary or punitive damages (as opposed to direct or
actual damages) in any way relating to any Enforcement Action, Obligations,
Loan Documents 

 

129

 

or
transactions relating thereto; and (f) notice of acceptance hereof.  Each Borrower acknowledges that the foregoing
waivers are a material inducement to Agents and the other Credit Parties
entering into this Agreement and that Agents and the other Credit Parties are
relying upon the foregoing in their dealings with Borrowers.  Each Borrower has reviewed the foregoing
waivers with its legal counsel and has knowingly and voluntarily waived its
jury trial and other rights following consultation with legal counsel.  In the event of litigation, this Agreement
may be filed as a written consent to a trial by the court.

 

14.17      PATRIOT
Act Notice.  Agents and
the other Credit Parties hereby notify Borrowers that pursuant to the
requirements of the PATRIOT Act, Agents and the other Credit Parties are
required to obtain, verify and record information that identifies each
Borrower, including its legal name, address, tax ID number and other
information that will allow Agents and the other Credit Parties to identify it
in accordance with the PATRIOT Act. 
Agents and the other Credit Parties will also require information
regarding each personal guarantor, if any, and may require information
regarding Borrowers’ management and owners, such as legal name, address, social
security number and date of birth.

 

14.18      JV Europe.  Nothing in this Agreement shall be deemed to
cause JV Europe or its subsidiaries to become a guarantor of or pledge its
assets to secure the Obligations, nor shall this Agreement prohibit JV Europe
or its subsidiaries from paying dividends, making payments under its
indebtedness to Nexans or its secured lending arrangements or to prohibit SEI
from issuing new shares of its common stock in payment of the put price which
may be payable to Nexans with respect to JV Europe.

 

14.19      Amendment
and Restatement.  This
Agreement amends and restates the Existing Loan Agreement. All rights,
benefits, indebtedness, interests, liabilities and obligations of the parties
to the Existing Loan Agreement are hereby renewed, amended, restated and
superseded in their entirety according to the terms and provisions set forth
herein.  This Agreement does not constitute,
nor shall it result in, a waiver of or release, discharge or forgiveness of any
amount payable pursuant to the Existing Loan Agreement or the other Loan
Documents executed in connection therewith (the “Existing Loan Documents”) or
any indebtedness, liabilities or obligations of the Existing Borrowers
thereunder, all of which are renewed and continued and are hereafter payable
and to be performed in accordance with this Agreement and the other Loan
Documents.  Neither this Agreement nor
any other Loan Document extinguishes the indebtedness or liabilities
outstanding in connection with the Existing Loan Documents, nor do they
constitute a novation with respect thereto. 
All security interests, pledges, assignments and other Liens previously
granted by Existing Borrowers pursuant to the Original Loan Documents are
hereby renewed and continued, and all such security interests, pledges,
assignments and other Liens shall remain in full force and effect as security
for the Obligations except as modified by the provisions hereof.  Amounts in respect of interest, fees and
other amounts payable to or for the account of Agents and the other Credit
Parties shall be calculated (i) in accordance with the provisions of the
Original Loan Agreement with respect to any period (or a portion of any period)
ending prior to the Closing Date, and (ii) in accordance with the
provisions of this Agreement with respect to any period (or a portion of any
period) commencing on or after the Closing Date.

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURES
BEGIN ON FOLLOWING PAGE]

 

130

 

IN WITNESS
WHEREOF, this Agreement has been executed and delivered as of the date set
forth above.

 

	
   

  	
  BORROWERS:  

  
	
   

  	
   

  
	
   

  	
  SUPERIOR ESSEX COMMUNICATIONS LP  

  
	
   

  	
   

  
	
   

  	
  By:  

  
	
   

  	
         Title:  

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:  

  
	
   

  	
  6120 Powers Ferry Road, Suite 150 Atlanta, 

  
	
   

  	
  Georgia 30339  

  
	
   

  	
  Attention: Chief Financial Officer  

  
	
   

  	
  Telecopier No.: (770) 303-8892

  
	
   

  	
   

  
	
   

  	
  ESSEX GROUP, INC.  

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  
	
   

  	
         Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:  

  
	
   

  	
  c/o Superior Essex Communications LP  

  
	
   

  	
  6120 Powers Ferry Road, Suite 150 Atlanta, 

  
	
   

  	
  Georgia 30339  

  
	
   

  	
  Attention: Chief Financial Officer  

  
	
   

  	
  Telecopier No.: (770) 303-8892

  
	
   

  	
   

  
	
   

  	
  ESSEX GROUP CANADA INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  
	
   

  	
         Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
  c/o Superior Essex Communications LP

  
	
   

  	
  6120 Powers Ferry Road, Suite 150 Atlanta,

  
	
   

  	
  Georgia 30339

  
	
   

  	
  Attention: Chief Financial Officer  

  
	
   

  	
  Telecopier No.: (770) 303-8892

  
					

 

 

	
   

  	
  AGENT:

  
	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A.,

  
	
   

  	
  as Administrative Agent

  
	
   

  	
   

  
	
   

  	
  By:

  
	
   

  	
         Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
  300 Galleria Parkway, Suite 800

  
	
   

  	
  Atlanta, Georgia 30339

  
	
   

  	
  Attention: Loan Administration Manager

  
	
   

  	
  Telecopier No.: (404) 607-3276

  
	
   

  	
   

  
	
   

  	
  CANADIAN AGENT:

  
	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A. (ACTING
  THROUGH 

  ITS CANADA BRANCH),

  
	
   

  	
  as Canadian Agent

  
	
   

  	
   

  
	
   

  	
  By:

  
	
   

  	
         Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
  200 Front Street West, Suite 2700

  
	
   

  	
  Toronto, Ontario Canada M5V 3L2

  
	
   

  	
  Telecopier No.: (416) 349-4282

  
				

 

 

	
   

  	
  U. S. LENDERS:

  
	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A.

  
	
   

  	
   

  
	
   

  	
  By:

  
	
   

  	
         Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
  300 Galleria Parkway, Suite 800

  
	
   

  	
  Atlanta, Georgia 30339

  
	
   

  	
  Attention: Loan Administration Manager

  
	
   

  	
  Telecopier No.: (404) 607-3276

  
	
   

  	
   

  
	
   

  	
  LIBOR Lending Office

  
	
   

  	
  300 Galleria Parkway, Suite 800

  
	
   

  	
   

  
	
   

  	
  Attention: Loan Administration Manager

  
	
   

  	
  Telecopier No.: (404) 607-3276

  

 

 

	
   

  	
  BARCLAYS BANK PLC

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
         Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LIBOR Lending Office:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
  Telecopier No.:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
         Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LIBOR Lending Office:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
  Telecopier No.:

  	
   

  
						

 

 

	
   

  	
  CANADIAN LENDERS:

  
	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A.,

  
	
   

  	
  (ACTING THROUGH ITS CANADA BRANCH)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  
	
   

  	
         Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
  200 Front Street West, Suite 2700

  
	
   

  	
  Toronto, Ontario Canada M5V 3L2

  
	
   

  	
  Telecopier No.: (416) 349-4282

  
	
   

  	
   

  
	
   

  	
  [BARCLAYS BANK
  PLC]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  
	
   

  	
        Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  
	
   

  	
       Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  
						

 

 

 

SCHEDULE 1.1.1

to

Second
Amended and Restated Loan Agreement

 

BORROWER GROUP COMMITMENTS OF LENDERS FOR REVOLVER  LOANS

 

	
  Lender

  	
   

  	
  U.S. Revolver

  Commitment

  	
   

  	
  Canadian Revolver

  Commitment

  Dollar Equivalent of:

  	
   

  	
  Total Commitments

  Dollar Equivalent of:

  	
   

  
	
  Bank of America, N.A.

  	
   

  	
  $

  	
  198,000,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  198,000,000.00

  	
   

  
	
  Barclays Bank PLC

  	
   

  	
  $

  	
  132,000,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  132,000,000.00

  	
   

  
	
  Bank of America, N.A. (acting through its Canada branch)

  	
   

  	
   

  	
   

  	
  $

  	
  12,000,000.00

  	
   

  	
  $

  	
  12,000,000.00

  	
   

  
	
  Barclays Bank PLC

  	
   

  	
   

  	
   

  	
  $

  	
  8,000,000.00

  	
   

  	
  $

  	
  8,000,000.00

  	
   

  
	
  Total:

  	
   

  	
  $

  	
  330,000,000.00

  	
   

  	
  $

  	
  20,000,000.00

  	
   

  	
  $

  	
  350,000,000.00

  	
   

  

 

 

EXHIBITS

 

EXHIBIT A-1                        US Revolver Notes

EXHIBIT A-2                        Canadian Revolver Notes

EXHIBIT B                            Reserved

EXHIBIT C                            Compliance
Certificate

EXHIBIT D                            LC Request

EXHIBIT E                            Form of
Assignment and Acceptance

EXHIBIT F                            Form of Notice
of Assignment and Acceptance

 

 

ExhibIT A-1

to

 

Second
Amended and Restated Loan Agreement

 

[AMENDED AND RESTATED] REVOLVER NOTE (U.S.)

 

	
                        ,
  2008

  	
  $                             

  	
   Atlanta, Georgia

  
	
   

  	
   

  	
   

  

 

SUPERIOR
ESSEX COMMUNICATIONS LP (hereinafter referred to as “Superior
Essex” and “Borrower Agent”), a Delaware limited partnership, and ESSEX GROUP, INC., a Michigan corporation (“Essex”;
Superior Essex and Essex collectively referred to herein as “U.S. Borrowers”
and individually as a “U.S. Borrower”), for value received, hereby
unconditionally promise to pay, on a joint and several basis, to the order of
                                                        
(“Lender”), the principal sum of                                
DOLLARS
($                      ),
or such lesser amount as may be advanced by Lender as U.S. Revolver Loans and
owing as U.S. LC Obligations from time to time under the Loan Agreement
described below, together with all accrued and unpaid interest thereon.  Terms are used herein as defined in the
Second Amended and Restated Loan Agreement dated August 5, 2008, among
U.S. Borrowers,  the other borrowers
named therein, Bank of America, N.A., as collateral and administrative agent (together
with its successors in such capacity, “Administrative Agent”), for
itself and the financial institutions from time to time parties thereto as
lenders (“Lenders”), certain other agents and such Lenders, as such
agreement may be amended, modified, renewed or extended from time to time (“Loan
Agreement”).  Capitalized terms used
herein, unless otherwise defined herein, shall have the meanings ascribed to
such terms in the Loan Agreement.

 

Principal of and interest on
this Note from time to time outstanding shall be due and payable as provided in
the Loan Agreement.  This Note is issued
pursuant to and evidences Lender’s U.S. Revolver Loans and U.S.
LC Obligations under the Loan Agreement, to which reference is made for a
statement of the rights and obligations of Lender and the duties and
obligations of U.S. Borrowers.  The Loan
Agreement contains provisions for acceleration of the maturity of this Note
upon the happening of certain stated events, and for the borrowing, prepayment
and reborrowing of amounts upon specified terms and conditions.

 

The holder of this Note is
hereby authorized by U.S. Borrowers to record on a schedule annexed to this
Note (or on a supplemental schedule) the amounts owing with respect to U.S.
Revolver Loans and U.S. LC Obligations, and the payment thereof.  Failure to make any notation, however, shall
not affect the rights of the holder of this Note or any obligations of U.S.
Borrowers hereunder or under any other Loan Documents.

 

 

Time is of the essence under
this Note.  Each U.S. Borrower and all
endorsers, sureties and guarantors of this Note hereby severally waive demand,
presentment for payment, protest, notice of protest, notice of intention to
accelerate the maturity of this Note, diligence in collecting, the bringing of
any suit against any party, and any notice of or defense on account of any
extensions, renewals, partial payments, or changes in any manner of or in this
Note or in any of its terms, provisions and covenants, or any releases or
substitutions of any security, or any delay, indulgence or other act of any
trustee or any holder hereof, whether before or after maturity.  U.S. Borrowers jointly and severally agree to
pay, and to save the holder of this Note harmless against, any liability for
the payment of all costs and expenses (including without limitation reasonable
attorneys’ fees) if this Note is collected by or through an attorney-at-law.

 

In no contingency or event
whatsoever shall the amount paid or agreed to be paid to the holder of this
Note for the use, forbearance or detention of money advanced hereunder exceed
the highest lawful rate permitted under Applicable Law.  If any such excess amount is inadvertently
paid by U.S. Borrowers or inadvertently received by the holder of this Note,
such excess shall be returned to U.S. Borrowers or credited as a payment of
principal, in accordance with the Loan Agreement.  It is the intent hereof that U.S. Borrowers
not pay or contract to pay, and that holder of this Note not receive or
contract to receive, directly or indirectly in any manner whatsoever, interest
in excess of that which may be paid by U.S. Borrowers under Applicable Law.

 

This Note shall be governed
by the laws of the State of Georgia, without giving effect to any conflict of
law principles (but giving effect to federal laws relating to national banks).

 

[This Note amends and restates that certain Amended and Restated
Revolver Note dated April 14, 2006, from Borrowers to Lender in the
original principal amount of $                            (the “Prior Note”). Nothing contained herein or
in the Prior Note shall constitute a novation or an accord and satisfaction.]

 

IN WITNESS
WHEREOF, this Revolver Note is executed the date set forth above.

 

 

	
   

  	
  SUPERIOR
  ESSEX COMMUNICATIONS LP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
				

 

 

	
   

  	
  ESSEX
  GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				

 

 

ExhibIT A-2

to

 

Second
Amended and Restated Loan Agreement

 

REVOLVER NOTE (CANADA)

 

	
                        ,
  2008

  	
  $                    

  	
   Toronto, Ontario, Canada

  
	
   

  	
   

  	
   

  

 

ESSEX GROUP
CANADA INC., a Nova Scotia company (“Canadian Borrower”),
for value received, hereby unconditionally promises to pay to the order of
                                                        
(“Lender”), the principal sum of
                               
DOLLARS
($                      ),
or such lesser amount as may be advanced by Lender as Canadian Revolver Loans
and owing as Canadian LC Obligations from time to time under the Loan Agreement
described below, together with all accrued and unpaid interest thereon.  Terms are used herein as defined in the
Second Amended and Restated Loan Agreement dated August 5, 2008, among
Canadian Borrower, the other borrowers named therein, Bank of America, N.A., as
collateral and administrative agent (together with its successors in such
capacity, “Administrative Agent”), for itself and the financial
institutions from time to time parties thereto as lenders (“Lenders”),
certain other agents and such Lenders, as such agreement may be amended,
modified, renewed or extended from time to time (“Loan Agreement”).  Capitalized terms used herein, unless
otherwise defined herein, shall have the meanings ascribed to such terms in the
Loan Agreement.

 

Principal of and interest on
this Note from time to time outstanding shall be due and payable as provided in
the Loan Agreement.  This Note is issued
pursuant to and evidences Lender’s Canadian Revolver Loans and Canadian
LC Obligations under the Loan Agreement, to which reference is made for a
statement of the rights and obligations of Lender and the duties and
obligations of Canadian Borrower.  The
Loan Agreement contains provisions for acceleration of the maturity of this
Note upon the happening of certain stated events, and for the borrowing, prepayment
and reborrowing of amounts upon specified terms and conditions.

 

The holder of this Note is
hereby authorized by Canadian Borrower to record on a schedule annexed to this
Note (or on a supplemental schedule) the amounts owing with respect to Canadian
Revolver Loans and Canadian LC Obligations, and the payment thereof.  Failure to make any notation, however, shall
not affect the rights of the holder of this Note or any obligations of Canadian
Borrower hereunder or under any other Loan Documents.

 

Time is of the essence under
this Note.  Canadian Borrower and all
endorsers, sureties and guarantors of this Note hereby severally waive demand,
presentment for payment, protest, notice of protest, notice of intention to
accelerate the maturity of this Note, diligence in collecting, the bringing of 

 

 

any suit against any party,
and any notice of or defense on account of any extensions, renewals, partial
payments, or changes in any manner of or in this Note or in any of its terms,
provisions and covenants, or any releases or substitutions of any security, or
any delay, indulgence or other act of any trustee or any holder hereof, whether
before or after maturity.  Canadian
Borrower agrees to pay, and to save the holder of this Note harmless against,
any liability for the payment of all costs and expenses (including without
limitation reasonable attorneys’ fees) if this Note is collected by or through
an attorney-at-law.

 

In no contingency or event
whatsoever shall the amount paid or agreed to be paid to the holder of this
Note for the use, forbearance or detention of money advanced hereunder exceed
the highest lawful rate permitted under Applicable Law.  If any such excess amount is inadvertently
paid by Canadian Borrower or inadvertently received by the holder of this Note,
such excess shall be returned to Canadian Borrower or credited as a payment of
principal, in accordance with the Loan Agreement.  It is the intent hereof that Canadian
Borrower not pay or contract to pay, and that holder of this Note not receive
or contract to receive, directly or indirectly in any manner whatsoever,
interest in excess of that which may be paid by Canadian Borrower under
Applicable Law.

 

This Note shall be governed
by the laws of the State of Georgia, without giving effect to any conflict of
law principles (but giving effect to federal laws relating to national banks).

 

IN WITNESS
WHEREOF, this Revolver Note is executed the date set forth above.

 

 

	
   

  	
  ESSEX
  GROUP CANADA INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
				

 

 

ExhibIT B

to

 

Second
Amended and Restated Loan Agreement

 

[Reserved.]

 

 

EXHIBIT C

 

to

 

Second
Amended and Restated Loan Agreement

 

COMPLIANCE CERTIFICATE

 

[Letterhead
of Borrower Agent]

 

                                ,
20  

 

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

 

300 Galleria Parkway, N.W.

 

Suite 800

 

Atlanta, Georgia 30339

 

The undersigned, the chief
financial officer of Superior Essex
Communications LP, a Delaware limited partnership (“Borrower
Agent”), as Borrower Agent, on behalf of itself and the other Borrowers,
gives this certificate to Bank of America,
N.A.  as collateral and
administrative agent (together with its successors in such capacity, “Administrative
Agent”) in accordance with the requirements of Section 10.1.2 of that certain Second Amended and
Restated Loan Agreement dated August 5, 2008, among Borrowers,
Administrative Agent, for itself and the financial institutions from time to
time parties thereto as lenders (“Lenders”), certain other agents and
such Lenders, as such agreement may be amended, modified, renewed or extended
from time to time (“Loan Agreement”). Capitalized terms used in this
Certificate, unless otherwise defined herein, shall have the meanings ascribed
to them in the Loan Agreement.

 

1.             Based upon my
review of the balance sheets and statements of income of Borrowers and their
Subsidiaries for the [Fiscal Year] [quarterly period] ending
          , 20      ,
copies of which are attached hereto, I hereby certify that:

 

(a)           Consolidated Fixed Charge Coverage Ratio was
             to
1.0;

 

 

(b)           Average Aggregate Availability during the period was $                               ;
and

 

(c)           Capital Expenditures for Borrowers during the period were
$                      .

 

2.             No Default exists on
the date hereof, other
than:                                          [if
none, so state]; and

 

3.             No Event of Default
exists on the date hereof, other than                                               [if
none, so state].

 

4.             As of the date
hereof, each Borrower is current in its payment of all accrued rent and other charges
to Persons who own or lease any premises where any of the Collateral is
located, and there are no pending disputes or claims regarding any Borrower’s
failure to pay or delay in payment of any such rent or other charges.

 

5.             As of the date
hereof, each Borrower’s payroll is current and all payroll taxes have been
withheld and deposited as required by law.

 

6.             Attached hereto is
a schedule showing the calculations that support Borrowers’ compliance [non-compliance] with  the financial covenants, as shown above.

 

Very truly yours,

 

 

SUPERIOR
ESSEX COMMUNICATIONS LP,

 

as Borrower Agent

 

 

 

	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  , Chief Financial Officer

  

 

EXHIBIT D

 

to

 

Second
Amended and Restated Loan Agreement

 

LETTER OF CREDIT PROCUREMENT REQUEST

 

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

 

Suite 800

 

300 Galleria Parkway

 

Atlanta, Georgia 30339

 

Attention:

 

This Letter of Credit
Procurement Request is delivered to you pursuant to the Second Amended and
Restated Loan Agreement, dated August 5, 2008, among SUPERIOR ESSEX COMMUNICATIONS LP (hereinafter
referred to as “Superior Essex” or “Borrower Agent”), a Delaware
limited partnership, ESSEX GROUP, INC., a
Michigan corporation (hereinafter referred to as “Essex”; Superior Essex
and Essex being referred to collectively as “U.S. Borrowers,” and
individually as a “U.S. Borrower”), ESSEX
GROUP CANADA INC., a Nova Scotia company (hereinafter referred to as
 “Canadian Borrower”, and together
with U.S. Borrowers, “Borrowers”), BANK
OF AMERICA, N.A. (“BofA”), as collateral and administrative
agent (in such capacity, “Administrative Agent”) for itself and the
financial institutions from time to time parties thereto as lenders (“Lenders”),
BANK OF AMERICA, N.A. (THROUGH ITS CANADA
BRANCH) (“BofA Canada”), as Canadian agent (in such capacity,
“Canadian Agent”) for itself and Lenders, such Lenders and the other
parties named therein (as the same may be amended, supplemented, restated or
otherwise modified from time to time, the “Loan Agreement”). Unless
otherwise defined herein, terms used herein have the meanings assigned to them
in the Loan Agreement.

 

[U.S. Borrowers / Canadian Borrower] hereby request[s] that [BofA / BofA Canada]
(the “Issuing Bank”) issue a Letter of Credit, as follows:

 

(1)           Borrower’s/Account Party’s Name

 

(2)           Amount of Letter of Credit:                                                                $

 

(3)           Issuance Date:

 

 

(4)                                  Beneficiary’s
Name:

 

(5)                                  Beneficiary’s
Address:

 

 

(6)                                  Expiry Date:

 

(7)                                  Draw
Conditions:

 

 

(8)                                  Single draw o or Multiple draw o

 

(9)                                  Purpose of
Letter of Credit:

 

Attached hereto is the
Issuing Bank’s form of LC Application, completed with the details of the Letter
of Credit requested herein.

 

Borrower Agent hereby
certifies, on behalf of [U.S.
Borrowers / Canadian Borrower,] that each of the LC Conditions
is now, and will on the date of issuance of the Letter of Credit be, satisfied
in all  respects and that no
Default or Event of Default exists. Borrower Agent hereby ratifies and
reaffirms on behalf of [U.S.
Borrowers / Canadian Borrower,] all of the Loan Documents and [U.S. / Canadian] Obligations
arising thereunder.

 

IN WITNESS WHEREOF, Borrower
Agent, on behalf of [U.S.
Borrowers / Canadian Borrower,] has caused this Letter of Credit
Procurement Request to be executed and delivered by its duly authorized
officer, this day of                 ,
20       .

 

 

	
   

  	
  SUPERIOR
  ESSEX COMMUNICATIONS LP

  
	
   

  	
   (“Borrower Agent”)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

 

EXHIBIT E

 

to

 

Second
Amended and Restated Loan Agreement

 

FORM OF ASSIGNMENT AND ACCEPTANCE

 

[U.S. / CANADIAN OBLIGATIONS]

 

Dated as of                  ,
20    

 

Reference is made to the
Second Amended and Restated Loan Agreement dated  August 5, 2008 (at any time amended,
restated, modified or supplemented, the “Loan Agreement”), among SUPERIOR ESSEX COMMUNICATIONS LP (hereinafter
referred to as “Superior Essex” or “Borrower Agent”), a Delaware
limited partnership, ESSEX GROUP, INC., a
Michigan corporation (hereinafter referred to as “Essex”; Superior Essex
and Essex being referred to collectively as “U.S. Borrowers,” and
individually as a “U.S. Borrower”), ESSEX
GROUP CANADA INC., a Nova Scotia company (hereinafter referred to
as  “Canadian Borrower”, and
together with U.S. Borrowers, “Borrowers”), BANK OF AMERICA, N.A. (“BofA”), as collateral and
administrative agent (in such capacity, “Administrative Agent”) for
itself and the financial institutions from time to time parties thereto as
lenders (“Lenders”), BANK OF AMERICA,
N.A. (THROUGH ITS CANADA BRANCH), as Canadian agent (in such
capacity, “Canadian Agent”) for itself and Lenders, such Lenders and the
other parties named therein. Capitalized terms used herein and not otherwise
defined shall have the meanings assigned to such terms in the Loan Agreement.

 

                                                              
(the “Assignor”) and
                                                        
(the “Assignee”) agree as follows:

 

1.             Assignor hereby
assigns to Assignee and Assignee hereby purchases and assumes from Assignor (i) a
principal amount of
$                                  
of the outstanding [U.S.
/ Canadian] Revolver Loans held by Assignor, and
$                            
of participations of Assignor in [U.S. / Canadian] LC Obligations (which amounts,
according to the records of [Administrative Agent / Canadian Agent], represent,
        % of the total principal amount
of outstanding [U.S. /
Canadian] Revolver Loans and [U.S. / Canadian] LC Obligations) and (ii) a
principal amount of
$                              
of Assignor’s Borrower Group Commitments (which amount includes Assignor’s
outstanding [U.S. /
Canadian] Revolver Loans being assigned to Assignee pursuant to
clause (i) above and which, according to the records of [Administrative Agent / Canadian
Agent], represents
(        %) of the total Commitments of
Lenders under the Loan Agreement (the “Assigned Interest”), together
with an interest in the Loan Documents corresponding to the Assigned Interest.
This Agreement shall be effective from the date (the “Assignment Effective
Date”) on which Assignor receives both (x) the principal amount of the
Assigned Interest in the Loans on the Assignment Effective Date, if any, and (y) a
copy of this Agreement duly 

 

 

executed
by Assignee. From and after the Assignment Effective Date, Assignee hereby
expressly assumes, and undertakes to perform, all of Assignor’s obligations in
respect of Assignor’s Commitments to the extent, and only to the extent, of
Assignee’s Assigned Interest, and all principal, interest, fees and other
amounts which would otherwise be payable to or for Assignor’s account in
respect of the Assigned Interest shall be payable to or for Assignee’s account,
to the extent such amounts have accrued subsequent to the Assignment Effective
Date.

 

2.             Assignor (i) represents
that as of the date hereof, the aggregate of its Borrower Group Commitments
with respect to [U.S.
Borrowers/Canadian Borrower] under the Loan Agreement (without
giving effect to assignments thereof, which have not yet become effective) is $           ,
and the outstanding balance of its Loans and participations in LC Obligations
(unreduced by any assignments thereof, which have not yet become effective)
with respect to such Borrower Group is $              ;
(ii) makes no representation or warranty and assumes no responsibility
with respect to any statements, warranties or representations made in or in
connection with the Loan Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Loan Agreement or any
other instrument or document furnished pursuant thereto, other than that
Assignor is the legal and beneficial owner of the interest being assigned by it
hereunder and that such interest is free and clear of any adverse claim:, [and] (iii) makes no representation
or warranty and assumes no responsibility with
respect to the financial condition of [U.S. Borrowers/Canadian Borrower], the
performance or observance by [U.S. Borrowers/Canadian Borrower] of any of [their / its] obligations
under the Loan Agreement or any of the Loan Documents[; and (iv) attaches the Notes held by it and
requests that [Administrative Agent /
Canadian Agent] exchange such Notes for new Notes payable to
Assignee and the Assignor in the principal amounts set forth on Schedule
A hereto].

 

3.             Assignee (i) represents
and warrants that it is legally authorized to enter into this Assignment and
Acceptance; (ii) confirms that it has received a copy of the Loan
Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 10.1.2 thereof,
and copies of such other Loan Documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (iii) agrees that it shall, independently and
without reliance upon the Assignor and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Loan Agreement; (iv) confirms
that it is eligible to become an Assignee; (v) appoints and authorizes
each of the Agents to take such action as agent on its behalf and to exercise
such powers under the Loan Agreement as are delegated to Agents by the terms
thereof, together with such powers as are incidental thereto; (vi) agrees
that it will strictly observe and perform all the obligations that are required
to be performed by it as a “Lender” under the terms of the Loan Agreement and
the other Loan Documents; and (vii) agrees that it will keep confidential
all information with respect to [U.S. Borrowers/Canadian Borrower] furnished to it by [U.S. Borrowers/Canadian Borrower]
or the Assignor to the extent provided in the Loan Agreement.

 

4.             Assignor
acknowledges and agrees that it will not sell or otherwise dispose of the
Assigned Interest or any portion thereof, or grant any participation therein,
in a manner which, or take any action in connection therewith which, would
violate the terms of any of the Loan Documents.

 

5.             This Agreement and
all rights and obligations shall be interpreted in accordance with and governed
by the laws of the State of Georgia. If any provision hereof would be invalid
under Applicable Law, then such provision shall be deemed to be modified to the
extent necessary to render it valid while 

 

 

most
nearly preserving its original intent; no provision hereof shall be affected by
another provision’s being held invalid.

 

6.             Each notice or
other communication hereunder shall be in writing, shall be sent by messenger,
by telecopy or facsimile transmission or by first-class mail, shall be deemed
given when sent and shall be sent as follows:

 

(a)                                  If to Assignee,
to the following address (or to such other address as Assignee may designate
from time to time):

 

 

(b)                                 If to Assignor,
to the following address (or to such other address as Assignor may designate
from time to time):

 

 

Payments hereunder shall be
made by wire transfer of immediately available Dollars as follows:

 

 

If to Assignee, to the
following account (or to such other account as Assignee may designate from time
to time):

 

ABA No.

 

Account No.

 

Reference:

 

 

If to Assignor, to the
following account (or to such other account as Assignor may designate from time
to time):

 

ABA No.

 

For Account of:

 

Reference:

 

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

 

	
   

  	
   

  
	
   

  	
  (“Assignor”)

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (“Assignee”)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
				

 

 

SCHEDULE A TO ASSIGNMENT AND ACCEPTANCE

 

 

EXHIBIT F

 

to

 

Second
Amended and Restated Loan Agreement

 

 

FORM OF NOTICE

 

Reference is made to (i) Second
Amended and Restated Loan Agreement dated 
August 5, 2008 (at any time amended, restated, modified or
supplemented, the “Loan Agreement”), among SUPERIOR ESSEX COMMUNICATIONS LP (hereinafter referred to as “Superior
Essex” or “Borrower Agent”), a Delaware limited partnership, ESSEX GROUP, INC., a Michigan corporation
(hereinafter referred to as “Essex”; Superior Essex and Essex being
referred to collectively as “U.S. Borrowers,” and individually as a “U.S.
Borrower”), ESSEX GROUP CANADA INC., a
Nova Scotia company (hereinafter referred to as 
“Canadian Borrower”, and together with U.S. Borrowers, “Borrowers”),
BANK OF AMERICA, N.A., as
collateral and administrative agent (in such capacity, “Administrative Agent”)
for itself and the financial institutions from time to time parties thereto as
lenders (“Lenders”), BANK OF AMERICA,
N.A. (THROUGH ITS CANADA BRANCH), as Canadian agent (in such
capacity, “Canadian Agent”) for itself and Lenders, such Lenders and the
other parties named therein, and (ii) the Assignment and Acceptance dated
as of                 ,
20     (the “Assignment Agreement”) between
                                                        (the
“Assignor”) and                           (the
“Assignee”). Except as otherwise defined herein, capitalized terms used
herein which are defined in the Loan Agreement are used herein with the
respective meanings specified therein.

 

The Assignor hereby notifies
Borrowers and [Administrative
Agent / Canadian Agent] of Assignor’s intent to assign to
Assignee pursuant to the Assignment Agreement a principal amount of (i) $                                  
of the outstanding [U.S.
/ Canadian] Revolver Loans held by Assignor and
$                            
of participations of Assignor in [U.S. / Canadian] LC Obligations, and (ii) $                                    of
Assignor’s Borrower Group Commitments with respect to [U.S. Borrowers/Canadian Borrower]
(which amount includes Assignor’s outstanding [U.S. / Canadian] Revolver Loans being
assigned to Assignee pursuant to clause (i) above), together with an
interest in the Loan Documents corresponding to the interest in the Loans and
Commitments so assigned. Pursuant to the Assignment Agreement, Assignee has
expressly assumed all of Assignor’s obligations under the Loan Agreement to the
extent of the Assigned Interest (as defined in the Assignment Agreement).

 

154

 

For purposes of the Loan
Agreement, [Administrative
Agent / Canadian Agent] shall deem Assignor’s share of the
Borrower Group Commitments with respect to [U.S. Borrowers/Canadian Borrower] to be
reduced by $                           , and Assignee’s share of the Borrower
Group Commitments with respect to [U.S. Borrowers/Canadian Borrower] to be
increased by $                  .

 

The address of the Assignee
to which notices,  information and
payments are to be sent under the terms of the Loan Agreement is:

 

 

Assignee’s LIBOR Lending
Office address is as follows:

 

 

This Notice is being
delivered to Borrowers and [Administrative
Agent / Canadian Agent] pursuant to Section 13.3 of the Loan Agreement. Please acknowledge
your receipt of this Notice by executing and returning to Assignee and Assignor
a copy of this Notice.

 

 

IN WITNESS WHEREOF, the
undersigned have caused the execution of this Notice, as of               ,
20     .

 

	
   

  	
   

  
	
   

  	
  (“Assignor”)

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (“Assignee”)

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
				

 

 

ACKNOWLEDGED AND AGREED TO

 

AS OF THE DATE SET FORTH
ABOVE:

 

 

BORROWER
AGENT:

 

 

	
  SUPERIOR
  ESSEX COMMUNICATIONS LP,*

  	
   

  
	
   

  	
   

  
	
  as Borrower Agent

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
				

 

* No signature required by
Borrower Agent when an Event of Default exists.

 

 

	
  BANK OF
  AMERICA, N.A. [THROUGH ITS CANADA BRANCH,]

  	
   

  
	
   

  	
   

  
	
  as [Administrative Agent / Canadian
  Agent]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
					

 

 

EXHIBIT G

 

to

 

Second
Amended and Restated Loan Agreement

 

FORM OF
BORROWING BASE CERTIFICATE

 

[See
attached]Exhibit 10.18

 

AGREEMENT REGARDING ENVIRONMENTAL MATTERS

 

THIS
AGREEMENT REGARDING ENVIRONMENTAL MATTERS (this “Agreement”) is made on August 5,
2008, by SUPERIOR ESSEX COMMUNICATIONS LP, a
Delaware limited partnership (“Communications”), ESSEX GROUP,
INC., a Michigan corporation (“EGI”; Communications and EGI
are collectively referred to herein as “Indemnitors” and individually as
an “Indemnitor”), each with a mailing address at 6120 Powers Ferry Road,
Suite 150, Atlanta, Georgia 30339, in favor of BANK OF
AMERICA, N.A.,  a national
banking association with a mailing address at 300 Galleria Parkway, N.W., Suite 800,
Atlanta, Georgia 30339, as administrative and collateral  agent
(in such capacity, together with its successors in such capacity, “Agent”)
for each of the financial institutions (collectively, “Lenders”) now or
hereafter parties to the Loan Agreement (as defined below), and the other
Credit Parties (as defined in the Loan Agreement).

Recitals:

 

Agent and Lenders have been
requested to make loans and other extensions of credit to Indemnitors and ESSEX GROUP CANADA, INC., a Nova Scotia company (“Canadian
Borrower”; Indemnitors and Canadian Borrower are collectively referred to
herein as “Borrowers” and individually as a “Borrower”) pursuant
to the terms of a certain Second Amended and Restated Loan and Security
Agreement dated of even date herewith by and among Borrowers, Agent, Lenders,
and the other parties thereto (as at any time amended, modified, renewed or
supplemented, the “Loan Agreement”), all of which loans and other
extensions of credit are to be secured by, among other things, all of
Indemnitors’ right, title and interest (including any leasehold interest) in
and to various parcels of real estate and improvements thereon located in Allen
County, Johnson County, Knox County, Noble County, and Whitley County, Indiana;
Barton County, Kansas; Edgecombe County, North Carolina; Chester County, South
Carolina; and Simcoe, Ontario, Canada, as more particularly described in Exhibit A
attached hereto (all such real property and improvements being collectively
called the “Premises”).

 

A condition under the Loan
Agreement to Agent’s and Lenders’ willingness to consider making any loans or
extending any other credit to or for the benefit of Borrowers is the execution
and delivery of this Agreement by each Indemnitor in favor of Agent and the
other Credit Parties.

 

NOW, THEREFORE, in
consideration of Ten Dollars ($10.00) in hand paid, the premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound, each Indemnitor hereby
covenants, warrants, represents and agrees as follows:

 

1.            Definitions;
Matters of Construction.

 

1.1.          Definitions.  Capitalized terms used herein, unless
otherwise defined in this Section 1 or elsewhere in this Agreement, shall
have the meanings ascribed to them in the Loan Agreement.  In addition, for purposes of this Agreement,
the following terms shall have the following meanings (terms defined in the singular
to have the meaning when used in the plural, and vice versa):

 

“CEPA” means the Canadian Environmental Protection Act, 1999
(S.C. 1999, c. 33) and all rules and regulations promulgated pursuant
thereto.

 

“CERCLA” means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (42 U.S.C. §§ 9601, et  seq.),
and all rules and regulations promulgated pursuant thereto.

 

 

“Contamination” means the presence of Regulated Substances
at, under or upon the environment relating to the Premises or migrating to or
from the Premises, which requires investigation, response or removal action or
remediation under any applicable Environmental Laws.

 

“Corrective Work” shall have the meaning ascribed thereto in Section 9
of this Agreement.

 

“CWA” means the Clean Water Act (33 U.S.C. §§ 1251 et  seq.)
and all rules and regulations promulgated pursuant thereto.

 

“Environmental Damages” means, with respect to any Person,
all liabilities, costs, damages or expenses that are at any time suffered or
incurred by such Person and that arise out of or result from any Indemnitor’s
noncompliance with any Environmental Law or its breach of a covenant,
representation or warranty in this Agreement, including liabilities, costs,
damages or expenses consisting of:

 

(i)            damages
actually suffered by such Person for personal injury, or injury to property or
natural resources, including the cost of demolition and rebuilding of any
improvements on real property;

 

(ii)           reasonable
fees and expenses incurred by such Person for the services of attorneys,
consultants, contractors, experts, laboratories and all other costs and
expenses incurred in connection with preparation of any feasibility studies or
reports, investigation, monitoring, cleanup, remediation, removal, response,
abatement, containment, closure, restoration, treatment, or post-remediation
monitoring, operation and maintenance, relating to any Regulated Substances or
Contamination, in each case to the extent required by any applicable
Environmental Laws, or reasonably necessary to make full economic use of any of
the Premises (for comparable commercial or industrial purposes);

 

(iii)          all
reasonable amounts expended by such Person in the defense (or settlement) of
any action, suit or other proceeding, whether brought by any Governmental
Authority or any other Person, including amounts paid for the services of
attorneys, consultants, contractors, experts and other professional persons;

 

(iv)          any
reasonable costs incurred to comply, in connection with all or any portion of
any of the Premises or any area surrounding or adjoining any of the Premises,
with applicable Environmental Laws; but in all circumstances excluding any
claim on any theory of liability for special, indirect, consequential,
exemplary or punitive damages (as opposed to direct or actual damages); and

 

(v)           any
diminution in the value of any of the Premises, and damages for the loss of
business and restriction on the use or adverse impact on the marketing of
rentable or usable space or of any amenity of any of the Premises in each case
with respect to the use of the Premises for comparable commercial or industrial
purposes.

 

“Environmental Laws” means all federal, state or
commonwealth, provincial, territorial, and local laws, regulations, statutes,
codes, rules, resolutions, directives, orders, executive orders, consent
orders, enforceable guidance from regulatory agencies, judicial decrees,
standards, permits, licenses and ordinances, or any judicial or administrative
interpretation of any of the foregoing, pertaining to the protection of land,
water, air, health, safety or the environment, whether now or in the 

 

2

 

future
enacted, promulgated or issued, including CERCLA, RCRA, CWA, EPA, FA, CEPA, and
all Environmental Property Transfer Acts.

 

“Environmental Lien” means a Lien in favor of any
Governmental Authority for any (i) liabilities arising under any
Environmental Laws or (ii) Environmental Damages arising from, or costs
incurred by such Governmental Authority in response to, a Contamination or
threatened Contamination.

 

“Environmental Notice” means a notice (whether written or
oral) from any Governmental Authority or any other Person of possible or
alleged noncompliance with or liability under any Environmental Laws, including
any complaints, citations, demands or request from any Governmental Authority
or any other Person for correction or remediation of any asserted violation of
any Environmental Laws or any investigations concerning any asserted violation
of any Environmental Laws.

 

“Environmental Permit” means any permit, license, approval,
certificate of approval, authorization, consent or waiver of or from any
Governmental Authority that is applicable to any property owned, leased,
operated or otherwise used by any Indemnitor or the operations of any
Indemnitor and that is required to be obtained under any Environmental Law.

 

“Environmental Property Transfer Acts” means any applicable
laws that condition, restrict, prohibit or require any notification or
disclosure triggered by the transfer, sale, lease or closure of any property,
deed or title for any property for environmental reasons, including any
so-called “Environmental Cleanup Responsibility Acts,” “Industrial Site
Recovery Act” or “Responsible Transfer Acts”.

 

“EPA” means the Environmental Protection Act (R.S.O. 1990, c.
E-19) and all rules and regulations promulgated pursuant thereto.

 

“FA” means the Fisheries Act (R.S.O. 1985, c. F-14) and all rules and
regulations promulgated pursuant thereto.

 

“Indemnified Parties” means (i) Agent, on behalf of
Lenders and the other Credit Parties (including Agent as
mortgagee-in-possession or successor-in-interest to any Indemnitor as owner of
any of the Premises by virtue of a foreclosure or acceptance of a deed-in-lieu
of foreclosure), (ii) Lenders and the other Credit Parties under (and as
defined in) the Loan Agreement, (iii) all of Agent’s and the other Credit
Parties’ officers, directors, employees and agents and each participant in any
loans or other extensions of credit made by Agent and the other Credit Parties
to or for the benefit of any Indemnitor under the Loan Agreement, together with
all of the respective successors and assigns of the foregoing Persons.

 

“Mortgage” means any mortgage, security deed, deed of trust,
hypothec, assignment of rents or other instrument creating an interest in land
under applicable law and executed by any Indemnitor in favor of Agent, for the
benefit of itself and the other Credit Parties, to convey to Agent, for the
benefit of itself and the other Credit Parties, a Lien upon all of such
Indemnitor’s interest in any of the Premises.

 

“RCRA” means the Resource Conservation and Recovery Act (42
U.S.C. §§ 6991-6991i) and all rules and regulations promulgated pursuant
thereto.

 

3

 

“Regulated Substances” means any substances, chemicals,
materials or elements that are prohibited, limited or regulated by the
Environmental Laws, or any other substances, chemicals, materials or elements
that are defined as “hazardous” or “toxic” 
under the Environmental Laws, or that are known or considered to be
harmful to the health or safety of occupants or users of the Premises.  Without limiting the generality of the
foregoing, the term “Regulated Substances” shall also include any substance,
chemical, material or element (i) defined as a “regulated substance”
within the meaning of Subtitle I of the RCRA; (ii) designated as a “hazardous
substance” pursuant to Section 311 of the CWA, or listed pursuant to Section 307
of the CWA; (iii) defined as “hazardous”, “toxic”, or otherwise regulated,
under any applicable Environmental Laws adopted by the state or province in
which the Premises is located, or its agencies or political subdivisions; (iv) which
is petroleum, petroleum products or derivatives or constituents thereof; (v) listed
as a “toxic substance” under CEPA; (vi) that would be considered a “pollutant”
or “contaminant” under the EPA; (vii) that would be considered to be “deleterious”
under the FA; (viii) which is asbestos or asbestos-containing materials; (ix) the
presence of which requires notification, investigation or remediation under any
applicable Environmental Laws; (x) which is urea formaldehyde foam
insulation or urea formaldehyde foam insulation-containing materials, lead
based paint or lead based paint-containing materials, polychlorinated biphenyls
or polychlorinated biphenyl-containing materials, radon or radon-containing or
producing materials, radioactive substances, methane or volatile hydrocarbons;
or (xi) which by any laws of any Governmental Authority requires special
handling in its collection, storage, treatment, or disposal due to a “hazardous”
or “toxic” characteristic.

 

1.2.          Matters of Construction.  The terms “herein,” “hereof” and “hereunder”
and other words of similar import refer to this Agreement as a whole and not to
any particular section, paragraph or subdivision.  Any pronoun used shall be deemed to cover all
genders.  The section titles appear as a
matter of convenience only and shall not affect the interpretation of the
Agreement.  All references to statutes
and related regulations shall include any amendments of same and any successor
statutes and regulations; to any documents, agreements or instruments shall
include any and all modifications thereto and any and all restatements,
extensions or renewals thereof;  to any
Person shall mean and include the successors and permitted assigns of such
Person; or to “including” and “include” shall be understood to mean “including,
without limitation.”

 

2.            Cumulative Rights
and Remedies.  Agent’s
rights and remedies under this Agreement shall be in addition to all rights and
remedies of Agent and the other Credit Parties under any of the other Loan
Documents.  Payments, if any, by any
Indemnitor as required under this Agreement shall not reduce such Indemnitor’s
obligations and liabilities under any of the other Loan Documents. Any default
by any Indemnitor under this Agreement (including any breach of any
representation or warranty made by such Indemnitor) shall constitute an “Event
of Default” to the extent set forth in Section 11.1 of the Loan Agreement.

 

3.            Representations
and Warranties.  Each
Indemnitor hereby represents and warrants that, except as is otherwise set
forth on Schedule I attached hereto:

 

(a)           No Contamination is present at, on or
under the Premises and no Contamination is being discharged, released or
emitted from any of the Premises into the air or onto any surrounding areas
(except for instances of Contamination which could not reasonably be expected
to have a Material Adverse Effect);

 

(b)           All activities and operations at the
Premises (including any activities or operations involving the generation,
manufacture, refinement, transportation, handling, transfer, production,
treatment, storage, disposal or processing of any Regulated Substances) have
been and are being 

 

4

 

conducted
in compliance with all applicable Environmental Laws (except for instances of
noncompliance which could not reasonably be expected to have a Material Adverse
Effect);

 

(c)           Each Indemnitor has obtained all material Environmental
Permits for the conduct of operations and activities at the Premises, and all
such Environmental Permits are in full force and effect;

 

(d)           To the best knowledge of Indemnitors,
no measurable levels of radon or radon containing or producing products that
require investigation or remediation pursuant to applicable Environmental Laws
are present in the existing structures on any of the Premises;

 

(e)           No civil, administrative or criminal
proceeding is pending, or to the best knowledge of Indemnitors threatened,
against such Indemnitor or the Premises relating to any asserted violation of
any Environmental Law with respect to the Premises; such Indemnitor has not
received (nor does such Indemnitor have reason to believe that it will receive)
any Environmental Notice with respect to the Premises (except for Environmental
Notices which could not reasonably be expected to have a Material Adverse
Effect); nor has such Indemnitor entered into any consent, decree or judicial
order or settlement under any Environmental Law affecting any of the Premises;

 

(f)            None of the Premises is listed or (to
the knowledge of such Indemnitor) proposed for listing on the National
Priorities List pursuant to Section 9605 of CERCLA, on the Comprehensive
Environmental Response, Compensation and Liability Information System or on any
similar state or local list of environmentally problematic/regulated sites;

 

(g)           No Environmental Lien has been filed
with respect to any of the Premises or any other assets of such Indemnitor;

 

(h)           To the best of such Indemnitor’s knowledge, after due
inquiry and investigation, no report, analysis, study or other document
prepared by or from any Person exists stating that any Contamination has been
or currently is, located at, under or about any of the Premises; and

 

(i)            Neither the transactions contemplated by the Loan
Documents nor any transactions involving the sale, transfer or exchange of any
of the Premises is subject to any Environmental Property Transfer Act or, to
the extent any such Environmental Property Transfer Act is applicable, such
Indemnitor has complied with the requirements thereof in all material respects.

 

4.            Environmental
Covenants.  Each
Indemnitor hereby covenants and agrees as follows:

 

(a)           To cause all activities at the
Premises prior to Full Payment of the Obligations (including any activities
involving the generation, manufacture, refinement, transportation, handling,
transfer, production, treatment, storage, disposal or processing of any
Regulated Substances) to be conducted in compliance with all applicable
Environmental Laws, except in the event that noncompliance could not reasonably
be expected to have a Material Adverse Effect;

 

(b)           To provide Agent upon its reasonable
request with copies of all:  (i) material
Environmental Notices relating to alleged material noncompliance or material
liability and all other material correspondence, notices of violation, summons,
orders, complaints or other documents received by such Indemnitor pertaining to
compliance with any Environmental Laws; (ii) material reports of previous
environmental investigations undertaken at any of the Premises that such
Indemnitor knows of, or has or can obtain possession; (iii) Environmental
Permits; (iv) a description of the operations and processes of such
Indemnitor; and (v) other material information that Agent may reasonably
request from time to time pertaining to such Indemnitor’s compliance with
applicable Environmental Laws;

 

5

 

(c)           Not to generate, manufacture, refine,
transport, transfer, produce, store, use, process, treat, dispose of, handle or
in any manner deal with, any Regulated Substances on any part of any of the
Premises, nor permit others to do so, except for (i) those Regulated
Substances that are used or present in the ordinary course of such Indemnitor’s
business in compliance with all applicable Environmental Laws in all material
respects and have not been released into the environment in such a manner as to
constitute a material Contamination, and (ii) those Regulated Substances
which are naturally occurring on any of the Premises, but only in such
naturally occurring form and concentration(s);

 

(d)           Not to cause or permit, the presence
of Regulated Substances or Contamination on any of the Premises, whether as a
result of any intentional or unintentional act or omission on the part of such
Indemnitor or any other Person, except for (i) those Regulated Substances
which are used or present in the ordinary course of such Indemnitor’s business
in compliance in all material respects with all applicable Environmental Laws
and have not been released into the environment in such a manner as to
constitute a material Contamination, and (ii) those Regulated Substances
which are naturally occurring on any of the Premises, but only in such
naturally occurring form and concentration(s);

 

(e)           To give notice and a full description
to Agent, promptly upon such Indemnitor’s acquiring knowledge thereof, of (i) any
enforcement, clean-up, removal or other regulatory actions threatened,
instituted or completed by any Governmental Authority under any Environmental
Law with respect to any of the Premises; (ii) material claims made or
threatened by any third party with respect to any of the Premises relating to
damage, contribution, compensation, loss or injury resulting from any Regulated
Substances or Contamination; and (iii) the presence of material
Contamination on, under, from or affecting any of the Premises;

 

(f)            To conduct and complete all
investigations, studies, sampling and testing of as well as all remedial,
removal and other actions necessary to clean up and remove all Contamination
on, under, from or affecting the Premises, to the extent required by applicable
Environmental Laws and in accordance therewith;

 

(g)           To obtain and maintain Environmental
Permits relating to such Indemnitor, the Premises, or the operation of such
Indemnitor’s business, except to the extent that failure to obtain or maintain
any such Environmental Permits could not reasonably be expected to have a
Material Adverse Effect.

 

(h)           If,  at any time
prior to the Full Payment of the Obligations, 
measurable amounts of radon are detected in any structures on any of the
Premises, to, at Indemnitor’s expense, take all actions necessary to reduce
such radon gas to acceptable levels under applicable Environmental Laws.

 

5.             Right to Conduct
an Investigation.

 

(a)           Agent may, at any time and at its sole
discretion, conduct an investigation into the presence of Regulated Substances
or Contamination on, from or affecting any or all of the Premises, or any
Indemnitor’s compliance with applicable Environmental Laws at, or relating to,
any or all of the Premises.  Such an
investigation performed by Agent shall be at Indemnitors’ expense if the
performance of the investigation is commenced (i) upon the occurrence and
during the continuation of a default hereunder or an Event of Default under the
Loan Agreement or any other Loan Documents; or (ii) because Agent has a
reasonable belief that any Indemnitor has materially violated any provision of
this Agreement (including any representation, warranty or covenant
herein).  Except as may be otherwise
provided in the Loan Agreement, all other investigations performed by Agent
shall be at Agent’s expense.  In
connection with any such investigation, each Indemnitor shall (and shall
require any occupants of the Premises to) comply with all reasonable requests
for information made by Agent, subject to the provisions of Section 5(c) hereof,
and each Indemnitor represents and warrants that all responses to any 

 

6

 

such
requests for information will be correct and complete.  Each Indemnitor shall provide Agent and its
agents with rights of access to all areas of the Premises, subject to (except
when a Default or Event of Default exists) reasonable notice and normal business
hours,  and permit Agent and its agents
to perform testing (including any invasive testing) necessary or appropriate,
in Agent’s reasonable judgment, to perform such investigation.

 

(b)           Agent is under no duty to conduct such
investigations of the Premises or any Indemnitor’s compliance with applicable
Environmental Laws, and any such investigations by Agent shall be solely for
the purposes of protecting Agent’s Liens in the Premises and preserving its
rights under the Loan Documents.  No site
visit, observation, or testing by Agent shall constitute a waiver of any
Default or Event of Default or be characterized as a representation regarding
the presence or absence of Regulated Substances or Contamination at any of the
Premises.   Agent owes no duty of care to
protect any Indemnitor or any third party from the presence of Regulated
Substances, Contamination or any other adverse condition affecting any of the
Premises.  Agent agrees to indemnify and
hold harmless from and against any personal injury or property damage arising
directly from Agent’s investigation of any of the Premises that are the result
of Agent’s or its agent’s gross negligence or willful misconduct and return
such Premises to the same physical condition as before the investigation. Agent
shall provide copies to Indemnitors, upon the request of any Indemnitor, of any
report or findings made in connection with any investigation done on behalf of
Agent.  To the extent any investigation
report, findings or other information is shared by an Agent or a Lender with
any Borrower, such Indemnitor acknowledges that it was prepared by Agents and
Lenders for their purposes and Indemnitors shall not be entitled to rely upon
it.

 

(c)           Agent agrees to keep any information provided by
Indemnitors pursuant to or in connection with this Agreement, whether such
information be expressly identified as confidential or not, in confidence in
accordance with the provisions of Section 14.13 of the Loan Agreement.

 

6.             Indemnification.

 

(a)           Each Indemnitor agrees to indemnify
and defend each of the Indemnified Parties and to hold each of the Indemnified
Parties harmless from and against any and all Environmental Damages that may at
any time be imposed upon, threatened against, incurred by or asserted or
awarded against any of the Indemnified Parties (whether before or after the
release, satisfaction or extinguishment of any Mortgage) and arising from or
out of:

 

(i)            such
Indemnitor’s failure to comply with any of the provisions of this Agreement,
including such Indemnitor’s breach of any covenant, representation or warranty
contained in this Agreement;

 

(ii)           any
Contamination, or threatened release of any Regulated Substances or
Contamination, on, in, under, affecting or migrating or threatening to migrate
to or from all or any portion of any of the Premises, to the extent occurring
or existing prior to Full Payment of the Obligations and prior to the delivery
of possession of the Premises to a Person other than an Indemnitor following
any foreclosure upon any Lien of Agent with respect to the Premises or other
taking of title to all or any portion of any of the Premises by Agent or any
affiliate of Agent; or

 

(iii)          any
violation of or noncompliance with, or alleged violation of or noncompliance
with, any applicable Environmental Laws by such Indemnitor, including costs to
remove any Environmental Lien upon any of the Premises;

 

7

 

(iv)          the
willful misconduct, error or omission or negligent act or omission of such
Indemnitor that results in any Contamination or the issuance of an
Environmental Notice to such Indemnitor or Agent;

 

(v)           any
judgment, Lien, order, complaint, notice, citation, action, proceeding or
investigation pending or threatened by or before any Governmental Authority or
any private party litigant or before any court of law (including any private
civil litigation) with respect to such Indemnitor’s business, assets, property
or facilities, including the Premises, in connection with any Regulated
Substances, Contamination or any Environmental Laws (including the assertion by
any Governmental Authority that any Environmental Lien takes priority over any
Lien in favor of Agent with respect to the Premises); or

 

(vi)         
the enforcement of this Agreement or the assertion by such Indemnitor of any
defense to its obligations hereunder.

 

Each
Indemnitor’s indemnification obligations set forth in this Section 6 shall
survive pursuant to Section 16 hereof and shall be in effect and
enforceable regardless of whether any such indemnification obligations arise
before or after foreclosure upon any Lien of Agent with respect to the Premises
or other taking of title to all or any portion of any of the Premises by Agent
or any affiliate of Agent, and whether the underlying basis of any claim arose
from events prior to such Indemnitor acquiring ownership of any of the
Premises; provided, however, that Indemnitors’ indemnification
shall not include any Environmental Damages arising and resulting directly from
the gross negligence or willful misconduct or Agent or any affiliate of Agent.

 

(b)           Promptly after the receipt by Agent of
written notice of any demand or claim or the commencement of any action, suit
or proceeding concerning any Indemnitor or Agent in connection with any of the
Premises, Agent shall endeavor to notify such Indemnitor thereof in
writing.  The failure by Agent promptly
to give such notice shall not relieve any Indemnitor of any liability to Agent
hereunder.

 

7.            Agent’s Right to
Select Professionals.  Without limiting
any other provision hereof, if any claim (whether or not a judicial or
administrative action is involved) is asserted against Agent or any other
Credit Party with respect to Regulated Substances, Environmental Laws or
Contamination, Agent shall have the right to select the engineers, consultants,
attorneys and other professional persons for Agent’s or any other Credit Party’s
defense or guidance, determine the appropriate legal strategy for such defense,
and compromise or settle such claim, all in Agent’s sole discretion, and
Indemnitors shall be liable to pay or reimburse Agent for all Environmental
Damages and other reasonable expenses incurred by Agent or any other Credit
Party in connection therewith to the extent of Indemnitors’ obligations pursuant
to this Agreement.

 

8.            Indemnitors’
Obligation to Deliver Premises.  Each Indemnitor
agrees that, if any Mortgage is foreclosed (whether judicially or by power of
sale) or a deed in lieu of foreclosure with respect to any of the Premises is
tendered, such Indemnitor shall deliver the Premises to Agent free of any and
all Regulated Substances (except for (a) those Regulated Substances which
are used or present in the Ordinary Course of Business of such Indemnitor in
compliance in all material respects with all applicable Environmental Laws or
are listed on Schedule I hereto and have not been emitted, discharged or
released into the environment in such a manner as to constitute material
Contamination hereunder, and (b) those Regulated Substances that are naturally
occurring on the Premises, but only in such naturally occurring form and
concentration(s)) or Contamination in a condition such that the Premises
conforms in all material respects with all applicable Environmental Laws and
such that no material remedial or removal action will be required under
applicable Environmental Laws with respect to the Premises.  Each 

 

8

 

Indemnitor’s
obligations as set forth in this Section are strictly for the benefit of
Agent and the other Credit Parties and any successors or assigns of Agent and
the other Credit Parties as holder of any portion of the Obligations and shall
not in any way impair or affect Agent’s right to foreclose against any of the
Premises.

 

9.            Agent’s Right to
Cure.  In addition to
the other remedies provided to Agent in any Mortgage and the other Loan
Documents, should any Indemnitor fail to abide by any provisions of this
Agreement, Agent may, should it elect to do so, perform any corrective work
required to achieve compliance with the environmental covenants required under Section 4
(“Corrective Work”).  All funds
reasonably expended by Agent in connection with the performance of any
Corrective Work, including all attorneys’ fees, engineering fees, consultant
fees and similar charges, shall become a part of the Obligations secured by
Collateral and shall be due and payable by Indemnitors on demand. Each
disbursement made by Agent pursuant to this provision shall bear interest at
the Default Rate from the date any Indemnitor shall have received written
notice that the funds have been advanced by Agent and the other Credit Parties
until paid in full.

 

10.          Scope of Liability.  The liability under this
Agreement shall in no way be limited or impaired by (a) any extension of
time for performance required by any of the Loan Documents; (b) any sale
or assignment of any Obligations or Mortgage, any foreclosure or acceptance of
a deed in lieu of foreclosure or trustee’s sale, or any sale or transfer of all
or part of any of the Premises; (c) the discharge of the Obligations or
the reconveyance or release of any Mortgage; (d) any exculpatory
provisions in any of the Loan Documents limiting Agent’s or any other Secured
Party’s recourse; (e) the accuracy or inaccuracy of the representations
and warranties made by any Indemnitor, or any other obligor under any of the
Loan Documents; (f) the release of any Indemnitor or any other Person from
performance or observance of any of the agreements, covenants, terms or
conditions contained in any of the Loan Documents by operation of law, Agent’s
voluntary act or otherwise; (g) the release or substitution, in whole or
in part, of any security for the Obligations; or (h) Agent’s failure to
record the Mortgages or file any UCC financing statements (or Agent’s improper
recording or filing of any thereof) or to otherwise perfect, protect, secure or
insure any security interest or lien given as security for the Obligations;
and, in any such case, whether with or without notice to any Indemnitor or any
guarantor or other person or entity and with or without consideration.

 

11.          Notices.  All notices, demands,
requests, consents, approvals and other communications required or permitted
hereunder must be in writing and will be effective if and when delivered in
accordance with the provisions of the Loan Agreement.

 

12.          Preservation of
Rights.  No delay or
omission on Agent’s part to exercise any right or power arising hereunder will
impair any such right or power or be considered a waiver of any such right or
power, nor will Agent’s action or inaction impair any such right or power.
Agent’s and the other Credit Parties’ rights and remedies hereunder are
cumulative and not exclusive of any other rights or remedies which Agent may
have under any of the other Loan Documents, at law or in equity. Any
representations, warranties, covenants or indemnification liabilities for
breach thereof contained in this Agreement shall not be affected by any
knowledge of, or investigations performed by, Agent. Any one or more Persons
comprising any Indemnitor, or any other Person liable upon or in respect of
this Agreement or the Obligations, may be released without affecting the
liability of any party not so released.

 

13.          Illegality.  In case any one or more of the
provisions contained in this Agreement should be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby.

 

9

 

14.          Changes in Writing.  No modification, amendment
or waiver of any provision of this Agreement nor consent to any departure by
any Indemnitor therefrom will be effective unless made in a writing signed by
Agent, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice to or demand on any
Indemnitor in any case will entitle any Indemnitor to any other or further
notice or demand in the same, similar or other circumstance.

 

15.          Successors and
Assigns.  This Agreement
shall be binding upon each Indemnitor and such Indemnitor’s successors and
assigns, and shall inure to the benefit of each Indemnified Party and its
successors and assigns as well as any Persons who acquire title to or ownership
of the Premises from, or through action by, Agent (including at a foreclosure,
sheriff’s or judicial sale); provided, however, that no
Indemnitor may assign this Agreement or delegate performance hereunder in whole
or in part without Agent’s prior written consent and Agent at any time may
assign this Agreement in whole or in part.

 

16.          Survival; Joint
and Several Obligations.  Except as
otherwise expressly provided herein, each Indemnitor’s obligations under this Agreement
shall be joint and several and shall survive any judicial foreclosure,
foreclosure by power of sale, deed in lieu of foreclosure, transfer of any of
the Premises by any Indemnitor or Agent and Full Payment of the Obligations.

 

17.          Governing Law and
Jurisdiction.  This Agreement
has been delivered to and accepted by Agent and will be deemed to be made in
the State where Agent’s office indicated above is located.  THIS AGREEMENT WELL BE INTERPRETED AND THE
RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF GEORGIA.  Each Indemnitor hereby irrevocably consents
to the non-exclusive jurisdiction of any state or federal court for the county
or judicial district where Agent’s office indicated above is located, and
consents that all service of process be sent by nationally recognized overnight
courier service directed to such Indemnitor at such Indemnitor’s address set
forth herein and service so made will be deemed to be completed on the business
day after deposit with such courier; provided  that nothing
contained in this Agreement will prevent Agent from bringing any action,
enforcing any award or judgment or exercising any rights against any
Indemnitor, against any security or against any property of any Indemnitor
within any other county, state, province, territory or other foreign or
domestic jurisdiction. Each Indemnitor acknowledges and agrees that the venue
provided above is the most convenient forum for both Agent and Indemnitor.  Each Indemnitor waives any objection to venue
and any objection based on a more convenient forum in any action instituted
under this Agreement.

 

18.            WAIVER OF JURY TRIAL.  TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, EACH INDEMNITOR AND AGENT IRREVOCABLY WAIVES ANY AND ALL RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM OF ANY NATURE RELATING TO
THIS AGREEMENT, ANY DOCUMENTS EXECUTED IN CONNECTION WITH THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED IN ANY OF SUCH DOCUMENTS.  EACH INDEMNITOR ACKNOWLEDGES THAT THE
FOREGOING WAIVER IS KNOWING AND VOLUNTARY.

 

[Remainder
of page intentionally left blank; signatures begin on following page.]

 

10

 

WITNESS the due execution
hereof as a document under seal, on the date first written above.

 

	
   

  	
  SUPERIOR
  ESSEX COMMUNICATIONS LP

  
	
   

  	
  (“Indemnitor”)

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  [COMPANY SEAL]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ESSEX
  GROUP, INC.

  
	
   

  	
  (“Indemnitor”)

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  [CORPORATE SEAL]

  
	
   

  	
   

  
	
   

  	
  Accepted
  in Atlanta, Georgia:

  
	
   

  	
   

  
	
   

  	
  BANK
  OF AMERICA, N.A.,

  
	
   

  	
  as
  Agent for the Credit Parties

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

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