Document:

Exhibit
10.15

 

AMENDED AND RESTATED INTERCREDITOR AGREEMENT

 

THIS AMENDED AND RESTATED
INTERCREDITOR AGREEMENT (this “Agreement”) is entered into as of September 30, 2003, by
and among (i) Deutsche Bank Trust Company Americas, acting in its capacity as
Administrative Agent under the First Priority Credit Agreement (as hereinafter
defined) (together with its successors and assigns in such capacity, the “First
Priority Bank Agent”), (ii) Deutsche Bank Trust Company Americas, acting in
its capacity as collateral agent under the First Priority Security Agreement
(as hereinafter defined) (together with its successors and assigns in such
capacity, the “First Priority Collateral Agent”), (iii) Deutsche Bank
Trust Company Americas, acting in its capacity as Administrative Agent under
the Second Priority Credit Agreement (as hereinafter defined) (together with
its successors and assigns in such capacity, the “Second Priority Bank Agent”),
(iv) Deutsche Bank Trust Company Americas, acting in its capacity as collateral
agent under the Second Priority Security Agreement (as hereinafter defined)
(together with its successors and assigns in such capacity, the “Second
Priority Collateral Agent”), (v) Deutsche Bank Trust Company Americas, as
beneficiary for the benefit of the Secured Creditors under the Mortgages (as
hereinafter defined) (together with its successors and assigns in such
capacity, the “Mortgagee”), and (vi) HSBC Bank USA, as trustee for the
holders of Second Priority Senior Notes (as defined below) issued under the
Second Priority Senior Notes Indenture (as hereinafter defined) (in such
capacity, together with its successors and assigns in such capacity, the “Second
Priority Senior Notes Trustee”), and is acknowledged and consented to by
Huntsman LLC, a Utah limited liability company formerly known as Huntsman
Company LLC (“Borrower”).

 

R E C I T A L S

 

WHEREAS, the
Collateral Agents and Borrower are parties to that certain Intercreditor
Agreement dated as of September 30, 2002, pursuant to which the Collateral Agents
have set forth certain of their respective rights and obligations, including
with respect to the Collateral (the “Existing Intercreditor Agreement”);

 

WHEREAS, on the
date hereof, Borrower is issuing $380 million in aggregate principal amount of
11-5/8% Senior Secured Notes due 2010 (such notes, together with any exchange
notes and additional notes issued under the Second Priority Senior Notes
Indenture (as defined herein), which are permitted to be issued by the Credit
Agreements (as defined herein), the “Second Priority Senior Notes”)
under an Indenture dated as of the date hereof among Borrower, the guarantors
named therein and the Second Priority Senior Notes Trustee (as amended,
supplemented or otherwise modified from time to time, in accordance with the
terms hereof, the “Second Priority Senior Notes Indenture”);

 

WHEREAS, Borrower,
certain subsidiaries of Borrower parties thereto and the First Priority
Collateral Agent are parties to a Security Agreement with respect to the First
Priority Secured Obligations (as amended, replaced, modified, extended,
renewed, supplemented or restated (in connection with a Refinancing or
otherwise) or otherwise modified from time to time, the “First Priority
Security Agreement”);

 

 

WHEREAS,
contemporaneously herewith, in order to secure the Second Priority Senior Notes
on a pari passu basis with the Lenders that are parties to the Second Priority
Credit Agreement and the other Second Priority Secured Creditors, (i) the
Second Priority Collateral Agent, Borrower and the subsidiaries of Borrower
parties thereto are entering into the Second Amended and Restated Security
Agreement (as amended, replaced, modified, extended, renewed, supplemented or
restated (in connection with a Refinancing or otherwise) or otherwise modified
from time to time, the “Second Priority Security Agreement”) and (ii)
the Mortgages are being amended in order to add the Second Priority Senior
Notes Obligations (as defined herein) as secured obligations thereunder (as
more fully described in each such amendment); and

 

WHEREAS, the
Collateral Agents, the Bank Agents (as defined below), the Mortgagee, the
Second Priority Senior Notes Trustee and Borrower hereto desire to enter into
this Agreement for the purpose of setting forth the rights and obligations of
the Collateral Agents and the respective secured parties with respect to the
Collateral.

 

NOW, THEREFORE, in
consideration of the premises and the mutual agreements set forth herein, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:

 

Section 1.                Defined Terms. 
As used in this Agreement, the following terms shall have the following
meanings (all such meanings to be equally applicable to both the singular and
plural forms of the terms defined):

 

“Bank Agents”
shall mean the First Priority Bank Agent and the Second Priority Bank Agent.

 

“Bank Obligations”
shall mean the First Priority Bank Obligations and the Second Priority Bank
Obligations.

 

“Bankruptcy Proceeding”
shall have the meaning set forth in the Second Priority Credit Agreement.

 

“Borrower” shall
have the meaning provided in the first paragraph of this Agreement.

 

“Collateral” shall
mean the property from time to time consisting of Collateral under the First
Priority Security Agreement, the Second Priority Security Agreement and the
Mortgages.

 

“Collateral Agents”
shall mean the First Priority Collateral Agent, the Second Priority Collateral
Agent and the Mortgagee.

 

“Credit Agreements”
shall mean the First Priority Credit Agreement and the Second Priority Credit
Agreement.

 

“Credit Party”
shall mean any Credit Party (as defined in the First Priority Credit Agreement)
or any Credit Party (as defined in the Second Priority Credit Agreement).  The term “Credit Parties” shall have
a correlative meaning.

 

2

 

“Existing
Intercreditor Agreement” shall have the meaning provided in the Recitals
hereto.

 

“First Priority Agent”
shall mean the First Priority Bank Agent and/or the First Priority Collateral
Agent, as the case may be.

 

“First Priority Bank
Agent” shall have the meaning set forth in the first paragraph hereto.

 

“First Priority Bank
Obligations” shall mean Obligations (as defined in the First Priority
Credit Agreement), together with any obligations incurred to evidence any
refunding, Refinancing, replacement or successive refunding, Refinancing or
replacement thereof.

 

“First Priority
Collateral Agent” shall have the meaning set forth in the first paragraph
hereto.

 

“First Priority Credit
Agreement” shall mean that certain Revolving Credit Agreement by and among
Borrower, the other borrowers parties thereto, Deutsche Bank Trust Company
Americas, as administrative agent and collateral agent, and the lenders parties
thereto, together with any agreement or agreements from time to time executed
by Borrower to evidence any refunding, Refinancing, replacement or successive
refunding, Refinancing or replacement of all or any part of the First Priority
Bank Obligations, together with any amendments, replacements, modifications,
extensions, renewals or supplements to, or restatements of, any of the
foregoing.

 

“First Priority
Instructing Group” shall mean the Instructing Group (as defined in the
First Priority Security Agreement).

 

“First Priority Loan
Documents” shall mean the Loan Documents (as defined in the First Priority
Credit Agreement) and all other documents, instruments and agreements now or
hereafter evidencing or securing the whole or any part of the First Priority
Bank Obligations (including, without limitation, each of the loan documents as
defined in any principal agreement evidencing First Priority Bank Obligations,
including any documents evidencing or securing any complete, partial or
successive refunding, Refinancing or replacement of the First Priority Bank
Obligations or successive refunding, Refinancing or replacement, together with
any amendments, replacements, modifications, extensions, renewals or
supplements to, or restatements of, any of the foregoing).

 

“First Priority
Secured Creditors” shall mean all holders of the First Priority Secured
Obligations.

 

“First Priority
Secured Obligations” shall mean the Obligations (as defined in the First
Priority Security Agreement), together with any obligations incurred to
evidence any refunding, Refinancing, replacement or successive refunding,
Refinancing or replacement thereof.

 

“First Priority
Security Agreement” shall have the meaning set forth in the Recitals
hereto.

 

3

 

“First Priority
Security Documents” shall mean the First Priority Security Agreement and
all other Security Documents (as defined in the First Priority Credit
Agreement).

 

“Fully Paid” shall
mean, with respect to any Obligation, that the respective obligee of such
Obligation (which obligee shall, (i) in the case of the First Priority Bank
Obligations, be the First Priority Bank Agent; and (ii) in the case of the
Second Priority Bank Obligations, be the Second Priority Bank Agent, shall have
certified to the respective Collateral Agent that such Obligation has
terminated and that there remain no obligations of any kind whatsoever of the
Borrower or any Credit Party with respect thereto (other than contingent
indemnification obligations as to which no claims shall have accrued or be
pending).

 

“Lender” shall
mean any Lender (as defined in the First Priority Credit Agreement) or any
Lender (as defined in the Second Priority Credit Agreement), in each case
together with their respective successors and assigns in such capacity.

 

“Liens” shall mean
Liens (as defined in the First Priority Credit Agreement) and/or Liens (as
defined in the Second Priority Credit Agreement), as the context shall require.

 

“Loan Documents”
shall mean, collectively, the First Priority Loan Documents and the Second
Priority Loan Documents, or any of the foregoing.

 

“Mortgagee” shall
have the meaning set forth in the first paragraph hereto.

 

“Mortgages” shall
mean Mortgages (as defined in the First Priority Credit Agreement) and
Mortgages (as defined in the Second Priority Credit Agreement), as the context
shall require.

 

“Obligations”
shall mean, collectively, the First Priority Secured Obligations and the Second
Priority Secured Obligations.  “Obligation”
means any First Priority Secured Obligation or Second Priority Secured
Obligation, as the context shall require.

 

“Refinance” shall
mean, with respect to any Obligation, to refinance, extend, renew, repay,
prepay, redeem, defease or retire, or to issue indebtedness in exchange or
replacement for, such Obligation.  “Refinancing”
has a correlative meaning.

 

“Second Priority Agent”
shall mean the Second Priority Bank Agent and/or the Second Priority Collateral
Agent, as the case may be.

 

“Second Priority Bank
Agent” shall have the meaning set forth in the first paragraph hereto.

 

“Second Priority Bank
Obligations” shall mean Obligations (as defined in the Second Priority
Credit Agreement), together with any obligations incurred to evidence any
refunding, Refinancing, replacement or successive refunding, Refinancing or
replacement thereof.

 

“Second Priority
Collateral Agent” shall have the meaning set forth in the first paragraph
hereto.

 

4

 

“Second Priority
Credit Agreement” shall mean that certain Amended and Restated Credit
Agreement by and among Borrower, Deutsche Bank Trust Company Americas, as
administrative agent, and the lenders parties thereto, together with any
agreement or agreements from time to time executed by Borrower to evidence any
refunding, Refinancing, replacement or successive refunding, Refinancing or
replacement of all or any part of the Second Priority Bank Obligations,
together with any amendments, replacements, modifications, extensions,
renewals, supplements to, or restatements of, any of the foregoing.

 

“Second Priority
Instructing Group” shall mean the Instructing Group (as defined in the
Second Priority Security Agreement).

 

“Second Priority Loan
Documents” shall mean the Loan Documents (as defined in the Second Priority
Credit Agreement) and all other documents, instruments and agreements now or
hereafter evidencing or securing the whole or any part of the Second Priority
Bank Obligations (including, without limitation, each of the loan documents as
defined in any principal agreement evidencing Second Priority Bank Obligations,
including any documents evidencing or securing any complete, partial or
successive refunding, Refinancing or replacement of the Second Priority Bank
Obligations or successive refunding, Refinancing or replacement, together with
any amendments, replacements, modifications, extensions, renewals or
supplements to, or restatements of, any of the foregoing).

 

“Second Priority
Secured Creditors” shall mean all holders of the Second Priority Secured
Obligations.

 

“Second Priority
Secured Obligations” shall mean the Obligations (as defined in the Second
Priority Security Agreement, together with any obligations incurred to evidence
any refunding, Refinancing or replacement or successive refunding, Refinancing
or replacement thereof.).

 

“Second Priority
Security Agreement” shall have the meaning set forth in the Recitals
hereto.

 

“Second Priority
Security Documents” shall mean the Second Priority Security Agreement and
all other Security Documents (as defined in the Second Priority Credit
Agreement).

 

“Second Priority
Senior Noteholders” shall mean the holders of the Second Priority Senior
Notes.

 

“Second Priority
Senior Notes” shall have the meaning set forth in the Recitals thereto.

 

“Second Priority
Senior Notes Indenture” shall have the meaning set forth in the Recitals
hereto.

 

“Second Priority
Senior Notes Obligations” shall mean the obligations incurred by Borrower
under the Second Priority Senior Notes Indenture, as evidenced by the Second
Priority Senior Notes.

 

5

 

“Second Priority
Senior Notes Trustee” shall have the meaning set forth in the Recitals
hereto.

 

“Secured Creditors”
shall mean, collectively, the First Priority Secured Creditors and the Second
Priority Secured Creditors.

 

“Security Agreements”
shall have the meaning set forth in the Recitals hereto.

 

“Security Documents”
shall mean the Security Documents (as defined in the First Priority Credit
Agreement) and the Security Documents (as defined in the Second Priority Credit
Agreement).

 

Section
2.              Lien
Priorities.

 

(a)           (i)            The parties hereto hereby agree that,
notwithstanding the time, order or method of creation, attachment or perfection
of the respective security interests and/or Liens granted in favor of the
Collateral Agents to secure the Obligations or the filing or recording of
financing statements or other Security Documents; the validity or
enforceability of the security interests and Liens granted in favor of the Collateral
Agents or the First Priority Secured Creditors or the Second Priority Secured
Creditors; the dating, execution or delivery of any agreement, document or
instrument granting any Collateral Agent or Secured Creditor security interests
and/or Liens in or on any or all of the property or assets of any pledgor; the
date on which any indebtedness is extended; the giving or failure to give
notice of the acquisition or expected acquisition of any purchase money or
other security interest; any provision of the Uniform Commercial Code,
including any rule for determining priority thereunder or under any other law
or rule governing the relative priorities of secured creditors, including with
respect to real property or fixtures; any provision set forth in any Loan
Document or the Second Priority Senior Notes Indenture or the Second Priority
Notes; or the possession or control by any Collateral Agent or Secured Creditor
or any bailee of all or any part of any Collateral as of the date hereof or
otherwise, the Liens granted under the First Priority Security Documents to
secure the First Priority Secured Obligations shall be a first and prior
security interest for all purposes and the Liens granted under the Second
Priority Security Documents to secure the Second Priority Secured Obligations
shall be second and subordinated to the Liens granted under the First Priority
Security Documents.

 

(ii)           Notwithstanding
the terms of any First Priority Loan Documents, Second Priority Loan Documents
or the Second Priority Senior Notes Indenture, in the event of any enforcement
of any Liens or in connection with a Bankruptcy Proceeding, all proceeds of
Collateral, including the proceeds of any collection, sale or disposition of
the Collateral or any portion thereof in connection with the exercise of
remedies under the Security Documents or otherwise and any proceeds or
recoveries under any title insurance policy(ies) insuring any Mortgage, shall
be distributed in accordance with the following procedure:

 

(x)            Such proceeds of the Collateral
shall be applied first to the First Priority Secured Obligations (including,
without limitation, all interest thereon accruing subsequent to the filing of a
bankruptcy case (or that would accrue but for such filing) at the rate provided

 

6

 

for in the First Priority Credit Agreement, whether or
not such interest is an allowed claim under applicable law) and, after the
First Priority Secured Obligations have been Fully Paid, shall be applied to
the Second Priority Secured Obligations in accordance with the Second Priority
Security Agreement.

 

(y)           In the event that
either Collateral Agent receives the proceeds of any Collateral in
contravention of the preceding paragraph, it shall hold such proceeds in trust
for, and promptly turn over such proceeds (in the same form as received, with
any necessary non-recourse endorsement) to the proper Collateral Agent in
accordance with the provisions of clause (x) above; provided, however,
that in the event any Collateral Agent fails to provide any such endorsement,
the applicable Collateral Agent, or any of its officers or employees, is hereby
irrevocably authorized to make the same (which authorization, being coupled
with an interest, is irrevocable).

 

(iii)          For the avoidance of
doubt, it is understood and agreed that the First Priority Collateral Agent may
apply proceeds held in the Master Collection Account (as defined in the First
Priority Credit Agreement), any Deposit Account (as defined in the First
Priority Credit Agreement) and any Cash Collateral Account (as such term is
defined in both the First Priority Security Agreement and the Second Priority
Security Agreement) pursuant to and in accordance with the express terms of the
First Priority Credit Agreement, and that the mandatory prepayments provided
for in Section 4.5 of the First Priority Credit Agreement and Section 4.2 of
the Second Priority Credit Agreement may be applied in a manner consistent with
the terms of such respective agreements.

 

(iv)          Each of the parties
hereto acknowledges that the Lien priorities provided in this Agreement shall
not be affected or impaired in any manner whatsoever, including, without
limitation, on account of (i) the invalidity, irregularity or
unenforceability of all or any part of the Loan Documents, the Second Priority
Senior Notes Indenture or the Second Priority Senior Notes; (ii) any
amendment, change or modification of any Loan Document, the Second Priority
Senior Notes Indenture or the Second Priority Senior Notes; or (iii) any
impairment, modification, change, exchange, release or subordination of or
limitation on, any liability of, or stay of actions or lien enforcement
proceedings against, any Credit Party, its property, or its estate in
bankruptcy resulting from any bankruptcy, arrangement, readjustment,
composition, liquidation, rehabilitation, similar proceeding or otherwise
involving or affecting any Credit Party.

 

(b)           Each Collateral
Agent hereby appoints each other as agent for purposes of perfecting its respective
security interests, Liens and claims in the Collateral (in each case, whether
such Collateral was delivered to the First Priority Collateral Agent or the
Second Priority Collateral Agent, as the case may be, prior to, on or after the
date hereof), in each case to the extent that such perfection may be obtained
by possession or control and hereby acknowledges that it holds possession of
such collateral, including, without limitation, any instruments, for the
benefit of the other Collateral Agent. 
On the date on which the First Priority

 

7

 

Secured Obligations are Fully Paid, the First Priority Collateral Agent
shall deliver or cause to be delivered any Collateral in its possession or
control to the Second Priority Collateral Agent.

 

(c)           The parties hereto
shall not challenge or question in any proceeding the validity, perfection,
priority or enforceability of this Agreement, as a whole, or any term or
provision contained herein or the validity or enforceability of any Lien,
Mortgage or financing statement in favor of any Collateral Agent or the
relative priority of any such Lien or Mortgage.

 

(d)           In the event of any
Refinancing of the First Priority Secured Obligations, the Second Priority
Collateral Agent and the Second Priority Secured Creditors, including the
Second Priority Senior Notes Trustee, on behalf of itself and the Second
Priority Senior Noteholders, do hereby confirm (and, upon request, agree to
reconfirm at any time) the continued applicability of the provisions hereof in
respect of the relative priority between the Liens securing the Second Priority
Secured Obligations and the Liens securing any Obligations incurred as a result
of the Refinancing of the First Priority Secured Obligations, but only to the
extent that such Refinancing is consummated in accordance with all applicable
provisions of the Second Priority Credit Agreement.  In connection with any Refinancing of all or any portion of the
First Priority Secured Obligations prior to the occurrence of a Bankruptcy
Event, the Second Priority Collateral Agent, on behalf of each Second Priority
Secured Creditor, shall, if requested by Borrower or the existing or new
holders of the First Priority Secured Obligations, execute an intercreditor agreement
or amend and restate this Agreement in a manner that is substantially similar
to this Agreement with the lenders under such Refinancing.

 

(e)           The Second Priority
Collateral Agent, on behalf of itself and each Second Priority Secured Creditor
(including, without limitation, the Second Priority Senior Notes Trustee, for
itself and the Second Priority Senior Noteholders), hereby waives any
requirement on the part of the First Priority Collateral Agent or the First
Priority Secured Creditors in respect of marshalling of assets upon any
exercise of remedies by the First Priority Collateral Agent or the First
Priority Secured Creditors and any requirement that the First Priority
Collateral Agent or any First Priority Secured Creditor exercise remedies with respect
to collateral security for the First Priority Obligations in any particular
order or any particular manner.

 

(f)            Nothing in this
Agreement shall relieve any Assignor from the performance of any term,
covenant, condition or agreement on such Assignor’s part to be performed or
observed under or in respect of any of the Collateral pledged by it or from any
liability to any Person under or in respect of any of such Collateral or impose
any obligation on any Collateral Agent to perform or observe any such term,
covenant, condition or agreement on such Assignor’s part to be so performed or
observed or impose any liability on any Collateral Agent for any act or
omission on the part of such Assignor relative thereto or for any breach of any
representation or warranty on the part of such Assignor contained in this
Agreement or any other Loan Document or the Second Priority Senior Notes
Indenture, or in respect of the Collateral pledged by it.  The obligations of each Assignor contained
in this paragraph shall survive the termination of this Agreement and the
discharge of such Assignor’s other obligations hereunder.

 

8

 

Section
3.              Certain
Intercreditor Agreements Regarding Refinancing of Bank Obligations, Amendments
to Loan Documents and Related Matters.

 

(a)           The Second Priority
Senior Notes Trustee agrees, acknowledges and consents that, until the Bank
Obligations are Fully Paid, at any time and from time to time without the
consent of or notice to the Second Priority Senior Notes Trustee or any Second
Priority Senior Noteholder and, without incurring responsibility to the Second
Priority Senior Notes Trustee or any Second Priority Senior Noteholder, and
without impairing or releasing the subordination provided for herein or the
obligations hereunder, any or all of the First Priority Loan Documents and/or
any or all of the Second Priority Loan Documents and/or any or all of the
Obligations thereunder may be Refinanced, refunded, replaced, amended,
extended, renewed, restated, supplemented or otherwise modified in any way
whatsoever, including, without limitation, to:

 

(i) shorten or
extend the final maturity of all or any part of the First Priority Secured
Obligations or Second Priority Secured Obligations (other than the Second
Priority Senior Notes Obligations), (ii) modify the amortization of the
principal amount of all or any part of the First Priority Secured Obligations
or Second Priority Secured Obligations, (other than the Second Priority Senior
Notes Obligations), (iii) to the extent permitted by the Second Priority Senior
Notes Indenture, increase the principal amount of the First Priority Secured
Obligations or Second Priority Secured Obligations (other than the Second
Priority Senior Notes Obligations), or otherwise provide for additional
advances and grant any lien, mortgage, pledge, hypothecation, collateral
assignment, security interest, encumbrance, charge, deposit arrangement or
other similar encumbrance to secure any such increased indebtedness and, irrespective
of the time, order or method of creation, attachment or perfection thereof or
the filing or recording thereof, make any such lien, mortgage, pledge,
hypothecation, collateral assignment, security interest, encumbrance, charge,
deposit arrangement or other similar encumbrance, in each case subject to Section
2, including the lien priorities set forth set forth therein, (iv) raise
the standard or default per annum interest rates applicable to all or any part
of the First Priority Secured Obligations or Second Priority Secured
Obligations (other than the Second Priority Senior Notes Obligations), (v)
impose any additional fees or penalties upon Borrower or any of its
subsidiaries or increase the amount of or rate for any fees or penalties
provided for in the First Priority Loan Documents or Second Priority Loan
Documents, (vi) retain or obtain a lien, mortgage, pledge, hypothecation,
collateral assignment, security interest, encumbrance, charge, deposit
arrangement or other similar encumbrance on any property to secure any of the
First Priority Secured Obligations or Second Priority Secured Obligations,
(vii) enter into any new, replaced, amended, extended, renewed, restated,
supplemented or otherwise modified First Priority Loan Documents or Second Priority
Loan Documents, (viii) change the manner, place or terms of payment or extend
the time of payment of, or renew or alter, all or any of the First Priority
Secured Obligations or Second Priority Secured Obligations (other than the
Second Priority Senior Notes Obligations) or otherwise Refinance, refund,
replace, amend, extend, renew, restate, supplement or otherwise modify in any
manner, or grant any waiver, forbearance or release with respect to, all or any
part of the First Priority Secured Obligations or Second Priority Secured
Obligations (in each case, other than the Second Priority Senior Notes
Obligations) or any First Priority Loan Document or Second Priority Loan
Document, (ix) retain or obtain the primary or secondary obligation of any
other Person with respect to any of the First Priority Secured Obligations or
Second Priority Secured Obligations (other than the Second

 

9

 

Priority Senior
Notes Obligations), (x) release any Person liable in any manner under or in
respect of First Priority Secured Obligations or Second Priority Secured
Obligations (other than the Second Priority Senior Notes Obligations) or,
acting in accordance with the relevant Security Documents, release or
compromise any obligation of any nature of any Person with respect to any of
the First Priority Secured Obligations or Second Priority Secured Obligations,
(xi) except to the extent in violation of the Second Priority Senior Notes
Indenture, sell, exchange, not perfect or otherwise deal with any property at
any time pledged, assigned or mortgaged to secure or otherwise securing, all or
any part of the First Priority Secured Obligations or Second Priority Secured
Obligations, including without limitation, any Collateral, (xii) subject to Section
4, release its security interest in, or surrender, release or permit any
substitution or exchange for, all or any part of any property securing any
First Priority Secured Obligations or Second Priority Secured Obligations, or
release, compromise, alter or exchange any obligations of any nature of any
Person with respect to any such property, (xiii) amend or grant any waiver or
release with respect to, or consent to any departure from, any guaranty of all
or any of the First Priority Secured Obligations or Second Priority Secured
Obligations (other than the Second Priority Senior Notes Obligations), (xiv)
grant any lien, mortgage, pledge, hypothecation, collateral assignment,
security interest, encumbrance, charge, deposit arrangement or other similar
encumbrance, (xv) exercise or refrain from exercising any rights or remedies
against and release from obligations of any type (other than the Second
Priority Senior Notes Obligations), Borrower or any of its subsidiaries or any
other Person, (xvi) replace any Bank Agent, Collateral Agent or Lender, whether
or not in connection with a Refinancing and (xvii) otherwise manage and
supervise the First Priority Secured Obligations or Second Priority Secured
Obligations (other than the Second Priority Senior Notes Obligations) in
accordance with such person’s usual practices, modified from time to time as
such person deems appropriate under the circumstances.

 

(b)           The Second Priority
Senior Notes Trustee, for itself and on behalf of the Second Priority Senior
Noteholders, hereby irrevocably constitutes and appoints the Second Priority
Collateral Agent and any officer or agent of the Second Priority Collateral
Agent, with full power of substitution, as its true and lawful attorney-in-fact
with full irrevocable power and authority in the place and stead of the Second
Priority Senior Notes Trustee or such holder or in the Second Priority
Collateral Agent’s own name, from time to time in the Second Priority
Collateral Agent’s discretion, for the purpose of carrying out the terms of
this Section 3, to take any and all appropriate action and to execute
and record any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of this Section 3, including,
without limitation, any financing statements, endorsements or other instruments
of transfer or release.  In connection
therewith, the Second Priority Collateral Agent acknowledges its appointment on
the date hereof under Section 11.03 of the Second Priority Senior Notes Indenture
as Second Priority Collateral Agent for the benefit of the Second Priority
Senior Notes Trustee and the holders of the Second Priority Senior Notes,
subject to all terms and conditions set forth in the Indenture.

 

(c)           In connection with
any Refinancing, refunding, replacement, amendment, extension, renewal,
restatement, supplement or other modification of all or any portion of the
First Priority Secured Obligations or the Second Priority Secured Obligations
prior to the occurrence of a Bankruptcy Event, the Second Priority Senior Notes
Trustee, on behalf of each Second Priority Senior Noteholder, does hereby (i)
confirm (and, upon request, agrees to reconfirm at any time) the continued
applicability of the provisions hereof and (ii) consent to any

 

10

 

successor, replacement or assignee of any First Priority Agent, Second
Priority Agent or Mortgagee becoming party to this Agreement and/or any
Security Agreements or Loan Documents (including by execution of an assignment
or joinder agreement or other equivalent instrument) without any additional
consent or approval of the Second Priority Senior Notes Trustee; provided,
however, that, notwithstanding the foregoing, the Second Priority Senior
Notes Trustee shall, if requested by the Borrower, any First Priority Agent,
Second Priority Agent or the Mortgagee (or any successor, replacement or
assignee thereof), or any existing or new holder of First Priority Secured
Obligations or Second Priority Secured Obligations, execute an intercreditor
agreement, or an amendment to or restatement of this Agreement substantially
similar to this Agreement (incorporating such amendments, modifications,
waivers or variances which do not materially adversely affect the rights and benefits
of the holders of the Second Priority Senior Notes in a different manner than
the other Second Priority Secured Creditors).

 

Section 4.              Release of Liens.

 

(a)           Subject to the
provisions of Section 4(b), each of the First Priority Collateral Agent,
the Second Priority Collateral Agent and the Mortgagee may, at any time or from
time to time, acting in accordance with the First Priority Security Agreement,
the Second Priority Security Agreement or, in the case of any Mortgage, the
terms of the Credit Agreements, as the case may be, release any Liens against
all or any portion of the Collateral.

 

(b)           If (i) the First
Priority Collateral Agent releases the Liens on all Collateral in respect of
all First Priority Secured Obligations and the Second Priority Collateral Agent
releases the Liens on all Collateral in respect of all Second Priority Secured
Obligations (other than the Second Priority Senior Notes Obligations), or (ii)
all First Priority Secured Obligations and all Second Priority Secured Obligations
(other than the Second Priority Senior Notes Obligations) are Fully Paid, then
all the Liens on the Collateral securing the Second Priority Senior Notes
Obligations will be automatically released and terminated and the Second
Priority Collateral Agent shall have no further duties or obligations under the
Second Priority Security Agreement; provided, however, in the
case of either clause (i) or (ii) above, if a Default or Event of Default shall
have occurred and be continuing under the Second Priority Senior Notes
Indenture, the Liens on the Collateral securing the Second Priority Senior
Notes Obligations shall not be released and the Second Priority Security
Agreement shall not terminate until such time as the Default or Event of
Default is cured or waived in accordance with the Second Priority Senior Notes
Indenture.

 

(c)           Subject to Section
4(b), the Second Priority Senior Notes Trustee agrees that its consent
shall not be required in connection with the release of all or any portion of
the Collateral at any time, including, without limitation, any time that a
Default or Event of Default shall have occurred and be continuing under the
Second Priority Senior Notes Indenture.

 

Section 5.              Exercise of Remedies.

 

(a)           Notwithstanding
anything to the contrary in this Agreement or the Second Priority Senior Notes
Indenture, until the Second Priority Bank Obligations are Fully Paid and, so
long as all Liens securing the Second Priority Notes Obligations have not been
released, (i) neither the Second Priority Senior Notes Trustee nor any Second
Priority Senior Noteholder shall have any

 

11

 

right or power to exercise or seek to exercise any rights or remedies
(including setoff or recoupment) with respect to any Collateral (other than to
receive a share of the Proceeds (as defined in the Second Priority Security
Agreement or the applicable Mortgage, as the case may be)) of such Collateral,
if any, as and when provided in the Second Priority Security Agreement or the
applicable Mortgage, as the case may be), including, without limitation, the
following: (w) to institute any action or proceeding with respect to any
Collateral, including, without limitation, any action of foreclosure, (x)
contest, protest or object to (1) any foreclosure proceeding or action brought
by any Bank Agent or Collateral Agent, (2) the exercise of any right under any
lockbox agreement, control agreement, landlord waiver or bailee’s letter or
similar agreement or arrangement to which any Bank Agent or First Priority
Secured Creditor is a party, or (3) any other exercise by any such party, of
any rights and remedies relating to the Collateral under any First Priority
Loan Documents, any Second Priority Loan Documents or otherwise, (y) object to
the forbearance by any Bank Agent or Lender from bringing or pursuing any
foreclosure proceeding or action or any other exercise of any rights or
remedies relating to the Collateral, (z) demand, accept or obtain any lien,
mortgage, pledge, hypothecation, collateral assignment, security interest,
encumbrance, charge, deposit arrangement or other similar encumbrance on any
Collateral (other than from time to time as granted pursuant to the Second
Priority Security Agreement or the Mortgages); and (ii) the Bank Agents and the
Lenders shall have the exclusive right to enforce rights, exercise remedies
(including, without limitation, setoff, recoupment and the right to credit bid
any Obligations) and make determinations regarding release (subject to Section
4), disposition, or restrictions with respect to the Collateral without any
consultation with or the consent of the Second Priority Senior Notes Trustee or
any Second Priority Senior Noteholder. 
In exercising rights and remedies with respect to the Collateral, the
Bank Agents and the Lenders may (acting in accordance with the terms of the
applicable Loan Documents) enforce the provisions of the First Priority Loan
Documents and the Second Priority Loan Documents and exercise remedies
thereunder, all in such order and in such manner as they may determine in the
exercise of their sole discretion.  Such
exercise and enforcement shall include, without limitation, the rights of an
agent or other representative appointed by them to sell or otherwise dispose of
Collateral upon foreclosure, to incur expenses in connection with such sale or
disposition, and to exercise all the rights and remedies of a secured lender
under the Uniform Commercial Code of any applicable jurisdiction and of a
secured creditor under bankruptcy or similar laws of any applicable
jurisdiction.

 

(b)           In the event that
the Second Priority Senior Notes Trustee receives proceeds of any Collateral,
it shall hold such proceeds in trust for, and promptly turn over such proceeds
(in the same form as received, with any necessary non-recourse endorsement), to
the Second Priority Collateral Agent, which shall in turn, if required, dispose
of such Collateral in accordance with the provisions of Section 2(a)(ii);
provided, however, that in the event that the Second Priority
Senior Notes Trustee fails to provide any such endorsement, the Second Priority
Collateral Agent is hereby irrevocably authorized to make the same (which
authorization, being coupled with an interest, is irrevocable).

 

(c)           The Second Priority
Senior Notes Trustee, for itself and on behalf of the Second Priority Senior
Noteholders, agrees that the Second Priority Senior Notes Trustee and the
Second Priority Senior Noteholders will not take any action that would hinder
any exercise of remedies undertaken by the Collateral Agents under the

 

12

 

Security Documents or the Bank Agents under the Loan Documents,
including any sale, lease, exchange, transfer or other disposition of the
Collateral, whether by foreclosure or otherwise.

 

(d)           Without limiting
the generality of the foregoing, in any bankruptcy case of a pledgor of
Collateral, neither the Second Priority Senior Notes Trustee nor the Second
Priority Senior Noteholders shall directly or indirectly (i) object to the
terms of any use of cash collateral or debtor in possession financing consented
to by the Bank Agents, or file any pleading with respect to use of cash
collateral or debtor in possession financing without the prior express written
consent of the Bank Agents in each instance, provided the Second
Priority Senior Notes Obligations and Second Priority Bank Obligations are
treated similarly in connection with any such use of cash collateral or
financing, (ii) object to any adequate protection, including additional or
replacement liens or administrative priority claims, consented to by the Bank
Agents, or file any pleading with respect to any such adequate protection,
without the prior express written consent of the Bank Agents in each instance, provided
the Second Priority Senior Notes Obligations and Second Priority Bank
Obligations are treated similarly in connection with any such adequate
protection, (iii) seek relief from the automatic stay, or object to any relief
from the automatic stay requested by the Bank Agents, with respect to any
portion of the Collateral, without the prior express written consent of the
Bank Agents in each instance, provided the Second Priority Senior Notes
Obligations and Second Priority Bank Obligations are treated similarly in
connection with any such motion, (iv) object to any sale of all or any portion
of the Collateral consented to by the Bank Agents, or file any pleading with
respect to the sale of all or any portion of the Collateral, without the prior
express written consent of the Bank Agents in each instance, provided
the Second Priority Senior Notes Obligations and Second Priority Bank
Obligations are treated similarly in connection with any such sale, or (v)
appear and be heard on any matter in such case in a manner inconsistent with
the terms and provisions of this Agreement.

 

(e)           Unless and until
all Bank Obligations have been Fully Paid, the Bank Agents and the Lenders
shall have the sole and exclusive right, subject to the rights of the Borrower
under the Loan Documents, to adjust settlement for any insurance policy
governing the Collateral in the event of any loss thereunder and to approve any
award granted in any condemnation or similar proceeding affecting the
Collateral.

 

Section
6.                Amendments
to Second Priority Senior Notes Indenture.  The Second Priority Senior Notes Trustee shall not amend, modify,
waive or supplement, or cause to be amended, modified, waived or supplemented,
any provision of the Second Priority Senior Notes Indenture, unless such
amendment, modification, waiver or supplement is permitted in accordance with
any applicable terms of the Credit Agreements.

 

Section
7.                Disclaimers,
Etc.

 

(a)           Each party
executing this Agreement agrees, for itself and on behalf of the relevant
Secured Creditors, that (i) each Collateral Agent may act as the First Priority
Instructing Group or the Second Priority Instructing Group, as the case may be,
may direct (regardless of whether any Secured Creditor or any holder
represented thereby agrees, disagrees or abstains with respect to such
request), (ii) each Collateral Agent shall have no liability for acting in
accordance with such request (provided such action does not, on its
face, conflict with the

 

13

 

express terms of this Agreement) and (iii) no Secured Creditor or any
holder represented thereby shall have any liability to any other Secured
Creditor or any holder represented thereby for any such request.

 

(b)           For the avoidance
of doubt, each Collateral Agent may at any time request directions from the
First Priority Instructing Group or the Second Priority Instructing Group, as
the case may be, as to any course of action or other matter relating hereto or
as to any Security Document.  Except as
otherwise expressly specified in this Agreement, any such directions given by
the First Priority Instructing Group or the Second Priority Instructing Group
shall be binding on the First Priority Secured Creditors and the Second
Priority Secured Creditors, respectively, for all purposes as described in this
Section 7.

 

(c)           The provisions of
Article XI of the Second Priority Security Agreement are incorporated herein by
reference thereto.

 

(d)           Notwithstanding the
use of the term “Agent” herein and/or in any Loan Document, it is expressly
understood and agreed that no Collateral Agent shall have any fiduciary
responsibilities to any Secured Creditor by reason of this Agreement, any
Security Agreement or any Loan Document and that each Collateral Agent is
merely acting as the contractual representative of the applicable Secured
Creditors with only those duties as are expressly set forth in this Agreement
and the Security Agreements and Mortgages, as the case may be.  In its capacity as the Secured Creditors’
contractual representative, no Collateral Agent assumes any fiduciary duties to
any of the Secured Creditors and each is acting as an independent contractor,
the rights and duties of which are limited to those expressly set forth in this
Agreement and the Security Agreements and Mortgages, as the case may be.  Each party hereto, for itself and on behalf
of the relevant Secured Creditors hereby agrees not to assert a claim against a
Collateral Agent on any agency theory or any other theory of liability for
breach of fiduciary duty, all of which claims each party hereto, on behalf of
each Secured Creditor, hereby waives. 
In addition, no Collateral Agent shall have any implied duties to any
Secured Creditor or any obligation to any Secured Creditor to take any action
hereunder or under any Security Agreement or Mortgage, except any action
specifically provided herein or therein to be taken by such Collateral Agent.

 

Section 8.                Notices of Default and of Payment in Full of
Indebtedness.  Each party hereto agrees to use reasonable
efforts to  give to the others
copies of any written notices of default, termination, demand for payment,
redemption, acceleration, foreclosure, exercise of remedies and any other
written notice of a like nature, which may be given under or pursuant to the
terms of any of the applicable Loan Documents or the Second Priority Senior
Notes Indenture and of any notice contemplated under the definition of the term
“Fully Paid” herein, in each case concurrently with, or as soon as practicable
after, the giving of such notice to such party; provided, however,
that no failure of any party to give a copy of any such notice as provided
herein shall in any event affect the validity or effectiveness of the notice or
render the party liable to any other party in any respect or relieve any party
of its obligations and agreements contained herein; provided, further,
however, that in no event shall this Section 8 require the
delivery of any notices to Borrower.

 

14

 

Section 9.                Notices.

 

(a)           All notices and
communications hereunder shall be sent or delivered by mail, telecopier or
overnight courier service and all such notices and communications shall (i) in
the case of a notice or communication sent by mail, be effective three Business
Days following deposit with proper prepaid postage in the mail; (ii) in the
case of a notice or communication sent by telecopier, be effective when sent,
provided appropriate confirmation is received by the sender; and (iii) in the
case of a notice or communication sent by overnight courier, be effective on
the date of delivery.  All notices,
requests, demands or other communications shall be in writing and addressed as
follows:

 

(i)          If to the First Priority
Collateral Agent or First Priority Bank Agent or Mortgagee:

 

Deutsche Bank Trust Company Americas

233 South Wacker Drive

Chicago, Illinois  60606

Attention:  Frank Fazio

Telephone No.:  (312) 993-8094

Telecopier No.:  (312) 993-8139

 

with a copy to:

 

Winston & Strawn LLP

35 West Wacker Drive

Chicago, Illinois 60601

Attention:  Charles B. Boehrer

Telephone Number:  (312) 558-5600

Telecopier Number:  (312) 558-5700

 

(ii)           If to the Second
Priority Collateral Agent or Second Priority Bank Agent or Mortgagee:

 

Deutsche Bank Trust
Company Americas

31 West 52nd Street

New York, New York  10022

Attention:  John Anos

Telephone No.:  (212) 469-2750

Telecopier No.:  (212) 469-3632

 

with a copy to:

 

Winston & Strawn LLP

35 West Wacker Drive

Chicago, Illinois 60601

Attention:  Charles B. Boehrer

Telephone Number:  (312) 558-5600

Telecopier Number:  (312) 558-5700

 

15

 

(iii)          If to the Second
Priority Senior Notes Trustee:

 

HSBC Bank USA

452 Fifth Avenue

Issuer Services

New York, New York  10018

Attention:  Gloria Alli

Telephone:  (212) 525-1404

Telecopier No.:  (212) 525-1300

 

with a copy to:

 

Baker & McKenzie

805 Third Avenue

New York, New York  10022

Attention:  Lawrence D. Pringle

Telephone No.:  (212) 891-3980

Telecopier No.:  (416) 863-6275

 

or at such other address
or to any such successor or assign as any party may designate by notice to the
other party in accordance with the provisions hereof.  In the event that any Secured Creditor shall be required by the
UCC or any other applicable law to give notice to the Borrower or any other
Secured Creditor of the intended disposition of any Collateral, such notice
shall be given as provided in the Second Priority Security Agreement and ten
days notice shall be deemed to be commercially reasonable.  Each Second Priority Secured Creditor,
including the Second Priority Senior Notes Trustee, hereby appoints the Second
Priority Collateral Agent as its agent and representative for purposes of
giving and receiving notices under the Second Priority Security Documents.

 

(b)           Upon written
request from the Second Priority Collateral Agent, the Second Priority Notes
Trustee agrees to promptly notify the Second Priority Collateral Agent of (i)
the aggregate amount of principal and interest outstanding and other amounts
owing with respect to the Second Priority Senior Notes and the amount, if any,
then due and payable under the Second Priority Senior Notes Indenture, as at
such date as the Second Priority Collateral Agent may specify and (ii) any
payment received by the Second Priority Senior Notes Trustee to be applied to
the principal of or interest on the amounts due with respect to the Second
Priority Senior Notes.

 

Section 10.             GOVERNING LAW. 
THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF
THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS AND DECISIONS OF SAID STATE, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW (EXCEPT SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW).

 

Section 11.             CONSENT TO JURISDICTION. 
THE PARTIES HERETO HEREBY CONSENT TO THE JURISDICTION OF ANY STATE OR
FEDERAL COURT

 

16

 

LOCATED WITHIN THE CITY OF NEW YORK, STATE OF NEW YORK AND IRREVOCABLY
AGREE THAT ALL ACTIONS OR PROCEEDINGS RELATING TO THIS AGREEMENT SHALL BE
LITIGATED IN SUCH COURTS.  EACH PARTY
HERETO ACCEPTS FOR AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, IN ANY SUCH ACTIONS OR PROCEEDINGS, THE EXCLUSIVE JURISDICTION
OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS, AND
IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION
WITH THIS AGREEMENT, AND WITH ANY JUDGMENT SUBJECT TO RIGHTS OF APPEAL IN THE
JURISDICTIONS SET FORTH ABOVE.

 

Section 12.             WAIVER OF JURY TRIAL. 
THE PARTIES HERETO HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, OR
ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT.  THE PARTIES HERETO ALSO WAIVE ANY BOND OR
SURETY OR SECURITY UPON SUCH BOND THAT MIGHT, BUT FOR THIS WAIVER, BE REQUIRED
OF THE PARTIES HERETO.  THE SCOPE OF
THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY
BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS AGREEMENT,
INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.  THE PARTIES HERETO EACH ACKNOWLEDGE THAT
THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP,
THAT EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND
THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE
DEALINGS.  THE PARTIES HERETO FURTHER
WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL
COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL. 
THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.  IN THE EVENT OF LITIGATION, THIS AGREEMENT
MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

 

Section 13.             Section Titles. 
The section titles contained in this Agreement are and shall be without
substantive meaning or content of any kind whatsoever and are not a part of the
Agreement between the parties hereto.

 

Section 14.             Counterparts. 
This Agreement and any amendments, waivers, consents or supplements may
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all of which counterparts together shall constitute but
one and the same instrument.

 

17

 

Section 15.             Severability. 
The invalidity, illegality or unenforceability of any provision in or
obligation under this Agreement shall not affect or impair the validity,
legality or enforceability of the remaining provisions or obligations under
this Agreement.

 

Section 16.             Assignment.  This Agreement shall
be binding upon, and inure to the benefit of, the First Priority Secured
Creditors and the Second Priority Secured Creditors and their respective
successors and assigns regardless of whether such successors or assigns are
signatories hereto.  The term “Borrower”
as used herein shall also refer to the permitted successors and assigns of the
Borrower, including, without limitation, a receiver, trustee, custodian or
debtor-in-possession.  The Secured
Creditors shall have the right to assign, transfer or grant participations in
part or all of the senior debt owed to them, the security therefor and their
rights hereunder.  This Agreement shall
be binding upon and enure to the benefit of the Secured Creditors and their
successors and assigns.

 

Section 17.             Conflict with Other Agreements. 
The parties hereto agree that in the event of any conflict between the
provisions of this Agreement and the provisions of any Loan Document, the
provisions of this Agreement shall control.

 

Section 18.             Amendments and Waivers. 
This Agreement constitutes the entire agreement of the parties hereto
and does not affect any rights and remedies except as expressly provided
herein. This Agreement shall be amended, modified or waived only with the
written consent of the First Priority Collateral Agent (with such written
requisite consent of the First Priority Lenders as may be required pursuant to
Section 13.1 of the First Priority Credit Agreement) and the Second Priority
Collateral Agent (with the written consent of the Required Lenders (as defined
in the Second Priority Credit Agreement)), except that (i) written consent of
the Second Priority Senior Notes Trustee shall be required if the amendment,
modification or waiver or variance would materially adversely affect the rights
and benefits of the Second Priority Senior Noteholders in a different manner
than the other Second Priority Secured Creditors; and (ii) written consent of
the Borrower shall be required if the amendment, modification or waiver would
impose, or have the effect of imposing, on the Borrower more restrictive
covenants or greater obligations than those applicable to the Borrower under
this Agreement or any of the Loan Documents as of the date hereof.  No waiver shall be deemed to be made by
either Collateral Agent of their respective rights hereunder, unless the same
shall be in writing signed by such Collateral Agent (acting in accordance with
this Section 18), and each waiver, if any, shall be a waiver only with
respect to the specific instance involved and shall in no way impair the rights
of such Collateral Agent, in any other respect at any other time.

 

Section 19.             Miscellaneous. 
This Agreement is solely for the purpose of defining the relative rights
and priorities of the parties hereto and that of the First Priority Secured
Creditors and the Second Priority Secured Creditors and their respective
successors and assigns with respect to the Collateral, and no other person,
firm, entity or corporation shall have any right, benefit, priority or interest
under, or because of the existence of, this Agreement.  It is expressly acknowledged and agreed that
the First Priority Collateral Agent and the Second Priority Collateral Agent
may be referred to in one or more Security Documents by other defined terms,
including, without limitation, the “Revolving Credit Agreement Collateral
Agent” and the “Term Credit Agreement Collateral Agent”, respectively.  No such use of such different terminology is
intended to affect the enforcement of this Agreement or any other Security

 

18

 

Document.  This Agreement shall
not inure to the benefit of the Borrower or any Subsidiary thereof, or their
respective successors and assigns.  The
parties hereto agree and acknowledge that they shall not challenge or question
in any proceeding the validity, perfection, priority or enforceability of this
Agreement, as a whole, or any term or provision contained herein.  Without limiting the terms of this
Agreement, the parties intend that this Agreement shall be enforceable in a
bankruptcy proceeding, including pursuant to Section 510(a) of the Bankruptcy
Code (as defined in the Second Priority Security Agreement).

 

Section 20.             Termination.  Upon the one hundred
twenty-first (121st)  day after all
Bank Obligations have been Fully Paid, this Agreement shall immediately
terminate and cease to be effective and the Bank Agents, the Lenders, the Second
Priority Senior Noteholders, the Second Priority Senior Notes Trustee, and the
Credit Parties shall be released from their respective obligations hereunder
(other than such obligations that by their terms are stated to survive the
termination of this Agreement); provided, however, (a) this
Agreement shall be automatically reinstated if at any time payment of, in whole
or in part, any of the Bank Obligations are challenged by the initiation of any
suit or proceeding by any party, or are rescinded or must otherwise be restored
or returned by any Bank Agent or any Lender as a preference, fraudulent
conveyance or otherwise under any bankruptcy, insolvency or similar law, or
under any other state or federal law, the common law or any ruling in equity,
all as though such payment had not been made, and in such event, all reasonable
documented costs and expenses including, without limitation, any reasonable
documented legal fees and disbursements) incurred by any Bank Agent or any
Lender in defending any such action or proceeding or enforcing such
reinstatement shall be deemed included as part of the First Priority Bank
Obligations or Second Priority Bank Obligations, as the case may be, and the
Second Priority Senior Notes Trustee and the Second Priority Senior Noteholders
shall account for any payments received in respect of the Collateral prior to
such reinstatement and (b) immediately after all Bank Obligations have been
Fully Paid, the terms of this Agreement shall no longer be applicable to
restrict any action or failure to act by the Second Priority Senior Notes
Trustee and the Second Priority Senior Noteholders with respect to the
Collateral subject to the immediately preceding clause (a).

 

Section 21.             Effect of Amendment and Restatement.  Each party hereto hereby acknowledges that
this Agreement amends and restates in its entirety the Existing Intercreditor
Agreement and the liens and security interests of the Secured Creditors
securing payment of the Obligations are in all respects continuing and in full force
and effect with respect to the Obligations, without regard to such amendment
and restatement.  The security interest
in, lien upon and/or conditional assignment of rights and interests of the
Borrower and its relevant subsidiaries granted to the Collateral Agents
pursuant to the Security Agreements are hereby ratified and shall continue from
and after the date hereof and as such, shall remain in full force and effect
pursuant to the Security Agreements from and after the date hereof.

 

[signature pages
follow]

 

19

 

IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed and delivered by
their duly authorized representatives as of the day and year first above
written.

 

 

	
   

  	
  DEUTSCHE BANK TRUST COMPANY

  AMERICAS, as First Priority Bank Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Mary Jo Jolly

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Mary Jo Jolly

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Assistant Vice
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DEUTSCHE BANK TRUST COMPANY

  AMERICAS, as First Priority Collateral Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Mary Jo Jolly

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Mary Jo Jolly

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Assistant Vice
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DEUTSCHE BANK TRUST COMPANY

  AMERICAS, as Second Priority Bank Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Mary Jo Jolly

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Mary Jo Jolly

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Assistant Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DEUTSCHE BANK TRUST COMPANY

  AMERICAS, as Second Priority Collateral Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Mary Jo Jolly

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Mary Jo Jolly

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Assistant Vice
  President

  	
   

  
								

 

20

 

	
   

  	
  DEUTSCHE BANK TRUST COMPANY

  AMERICAS, as Mortgagee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Mary Jo Jolly

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Mary Jo Jolly

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Assistant Vice
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HSBC BANK USA, as Second Priority Senior

  Notes Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Herawattee Alli

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Herwattee Alli

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Corporate Trust Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Acknowledged and
  Agreed:

  	
   

  
	
   

  	
   

  
	
  HUNTSMAN LLC

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/  J. Kimo Esplin

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  J. Kimo Esplin

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:  Executive Vice President and Chief
  Financial Officer

  	
   

  
											

 

21Exhibit
10.16

 

EXECUTION
COPY

 

 

 

HUNTSMAN COMPANY LLC and

 

THE OTHER BORROWERS NAMED HEREIN

 

$275,000,000

 

REVOLVING CREDIT AGREEMENT

 

Dated as of September 30, 2002

 

with

 

DEUTSCHE BANK TRUST COMPANY AMERICAS,

as Administrative Agent,

 

DEUTSCHE BANK TRUST COMPANY AMERICAS,

as Collateral Agent,

 

DEUTSCHE BANK SECURITIES INC.

 

as Book Manager,

 

FLEET CAPITAL CORPORATION and

 

GENERAL ELECTRIC CAPITAL CORPORATION

 

as Co-Documentation Agents,

 

and

 

THE FINANCIAL INSTITUTIONS SIGNATORY
HERETO

 

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I DEFINITIONS AND ACCOUNTING TERMS

  	
   

  
	
   

  	
  1.1

  	
   

  	
  Definitions.

  	
   

  
	
   

  	
  1.2

  	
   

  	
  Accounting Terms; Financial Statements.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  II AMOUNT AND TERMS OF CREDIT

  	
   

  
	
   

  	
  2.1

  	
   

  	
  Revolving Credit Borrowing.

  	
   

  
	
   

  	
  2.2

  	
   

  	
  Conversion and Continuation Elections for Eurodollar Loans and Base
  Rate Loans.

  	
   

  
	
   

  	
  2.3

  	
   

  	
  Amount and Terms of Letters of Credit.

  	
   

  
	
   

  	
  2.4

  	
   

  	
  Master Collection Account.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  III INTEREST AND FEES

  	
   

  
	
   

  	
  3.1

  	
   

  	
  Interest.

  	
   

  
	
   

  	
  3.2

  	
   

  	
  Fees.

  	
   

  
	
   

  	
  3.3

  	
   

  	
  Computation of Interest and Fees.

  	
   

  
	
   

  	
  3.4

  	
   

  	
  Compensation For Funding Losses.

  	
   

  
	
   

  	
  3.5

  	
   

  	
  Increased Costs, Illegality, Etc.

  	
   

  
	
   

  	
  3.6

  	
   

  	
  Replacement of Lenders.

  	
   

  
	
   

  	
  3.7

  	
   

  	
  Change of Lending Office.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  IV REPAYMENTS; REDUCTION OF COMMITMENTS; PAYMENTS AND PREPAYMENTS

  	
   

  
	
   

  	
  4.1

  	
   

  	
  Repayment.

  	
   

  
	
   

  	
  4.2

  	
   

  	
  Voluntary Reduction of Commitments.

  	
   

  
	
   

  	
  4.3

  	
   

  	
  Mandatory Reductions of Commitments.

  	
   

  
	
   

  	
  4.4

  	
   

  	
  Voluntary Prepayments.

  	
   

  
	
   

  	
  4.5

  	
   

  	
  Mandatory Prepayments.

  	
   

  
	
   

  	
  4.6

  	
   

  	
  Payments.

  	
   

  
	
   

  	
  4.7

  	
   

  	
  Method and Place of Payment by Borrowers.

  	
   

  
	
   

  	
  4.8

  	
   

  	
  Net Payments.

  	
   

  
	
   

  	
  4.9

  	
   

  	
  Payments by the Lenders to Administrative
  Agent.

  	
   

  
	
   

  	
  4.10

  	
   

  	
  Sharing of Payments; etc.

  	
   

  
	
   

  	
  4.11

  	
   

  	
  Maintenance of Account.

  	
   

  
	
   

  	
  4.12

  	
   

  	
  Statement of Account.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V CONDITIONS OF CREDIT

  	
   

  
	
   

  	
  5.1

  	
   

  	
  Conditions Precedent to the effectiveness of the Agreement.

  	
   

  
	
   

  	
  5.2

  	
   

  	
  Conditions Precedent to All Credit Events.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI REPRESENTATIONS AND WARRANTIES

  	
   

  
	
   

  	
  6.1

  	
   

  	
  Corporate Status.

  	
   

  
	
   

  	
  6.2

  	
   

  	
  Corporate Power and Authority.

  	
   

  

 

i

 

	
   

  	
  6.3

  	
   

  	
  No Violation.

  	
   

  
	
   

  	
  6.4

  	
   

  	
  Governmental and Other Approvals.

  	
   

  
	
   

  	
  6.5

  	
   

  	
  Financial Statements; Financial Condition;
  Undisclosed Liabilities; etc.

  	
   

  
	
   

  	
  6.6

  	
   

  	
  Litigation.

  	
   

  
	
   

  	
  6.7

  	
   

  	
  True and Complete Disclosure.

  	
   

  
	
   

  	
  6.8

  	
   

  	
  Margin Regulations.

  	
   

  
	
   

  	
  6.9

  	
   

  	
  Tax Returns and Payments.

  	
   

  
	
   

  	
  6.10

  	
   

  	
  Compliance With ERISA.

  	
   

  
	
   

  	
  6.11

  	
   

  	
  Ownership of Property.

  	
   

  
	
   

  	
  6.12

  	
   

  	
  Capitalization of the Company.

  	
   

  
	
   

  	
  6.13

  	
   

  	
  Subsidiaries.

  	
   

  
	
   

  	
  6.14

  	
   

  	
  Compliance With Law, etc.

  	
   

  
	
   

  	
  6.15

  	
   

  	
  Investment Company Act.

  	
   

  
	
   

  	
  6.16

  	
   

  	
  Public Utility Holding Company Act.

  	
   

  
	
   

  	
  6.17

  	
   

  	
  Environmental Matters.

  	
   

  
	
   

  	
  6.18

  	
   

  	
  Labor Relations.

  	
   

  
	
   

  	
  6.19

  	
   

  	
  Intellectual Property.

  	
   

  
	
   

  	
  6.20

  	
   

  	
  Certain Fees.

  	
   

  
	
   

  	
  6.21

  	
   

  	
  Security Documents.

  	
   

  
	
   

  	
  6.22

  	
   

  	
  Charitable Contributions.

  	
   

  
	
   

  	
  6.23

  	
   

  	
  Asbestos Matters.

  	
   

  
	
   

  	
  6.24

  	
   

  	
  Use of Proceeds.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  VII AFFIRMATIVE COVENANTS

  	
   

  
	
   

  	
  7.1

  	
   

  	
  Financial Statements.

  	
   

  
	
   

  	
  7.2

  	
   

  	
  Certificates; Other Information.

  	
   

  
	
   

  	
  7.3

  	
   

  	
  Notices.

  	
   

  
	
   

  	
  7.4

  	
   

  	
  Maintenance of Existence.

  	
   

  
	
   

  	
  7.5

  	
   

  	
  Payment of Obligations.

  	
   

  
	
   

  	
  7.6

  	
   

  	
  Inspection of Property, Books and Records.

  	
   

  
	
   

  	
  7.7

  	
   

  	
  ERISA.

  	
   

  
	
   

  	
  7.8

  	
   

  	
  Maintenance of Property; Insurance.

  	
   

  
	
   

  	
  7.9

  	
   

  	
  Environmental Laws.

  	
   

  
	
   

  	
  7.10

  	
   

  	
  Additional Security; Further Assurances.

  	
   

  
	
   

  	
  7.11

  	
   

  	
  End of Fiscal Years; Fiscal Quarters.

  	
   

  
	
   

  	
  7.12

  	
   

  	
  Cash Management System.

  	
   

  
	
   

  	
  7.13

  	
   

  	
  Polymers Notes.

  	
   

  
	
   

  	
  7.14

  	
   

  	
  Compensation.

  	
   

  
	
   

  	
  7.15

  	
   

  	
  Compliance with Laws.

  	
   

  
	
   

  	
  7.16

  	
   

  	
  Furnishing of Information and Inspection of
  Records.

  	
   

  
	
   

  	
  7.17

  	
   

  	
  Keeping of Records and Books.

  	
   

  
	
   

  	
  7.18

  	
   

  	
  Conduct of Business.

  	
   

  
	
   

  	
  7.19

  	
   

  	
  Letters of Credit.

  	
   

  
	
   

  	
  7.20

  	
   

  	
  Inventory.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  VIII NEGATIVE COVENANTS

  	
   

  

 

ii

 

	
   

  	
  8.1

  	
   

  	
  Liens.

  	
   

  
	
   

  	
  8.2

  	
   

  	
  Indebtedness.

  	
   

  
	
   

  	
  8.3

  	
   

  	
  Fundamental Changes.

  	
   

  
	
   

  	
  8.4

  	
   

  	
  Dividends or Other Distributions.

  	
   

  
	
   

  	
  8.5

  	
   

  	
  Issuance of Stock.

  	
   

  
	
   

  	
  8.6

  	
   

  	
  Disposition of Assets.

  	
   

  
	
   

  	
  8.7

  	
   

  	
  Loans and Investments.

  	
   

  
	
   

  	
  8.8

  	
   

  	
  Transactions with Affiliates.

  	
   

  
	
   

  	
  8.9

  	
   

  	
  Sale-Leasebacks.

  	
   

  
	
   

  	
  8.10

  	
   

  	
  Lines of Business.

  	
   

  
	
   

  	
  8.11

  	
   

  	
  Fiscal Year.

  	
   

  
	
   

  	
  8.12

  	
   

  	
  Amendments to Organizational and Other
  Documents.

  	
   

  
	
   

  	
  8.13

  	
   

  	
  Limitation on Certain Restrictions on Subsidiaries.

  	
   

  
	
   

  	
  8.14

  	
   

  	
  Accounting Changes.

  	
   

  
	
   

  	
  8.15

  	
   

  	
  Restrictions on Certain Unrestricted Subsidiaries.

  	
   

  
	
   

  	
  8.16

  	
   

  	
  Charitable Contributions.

  	
   

  
	
   

  	
  8.17

  	
   

  	
  Collateral Account Agreements.

  	
   

  
	
   

  	
  8.18

  	
   

  	
  Extension or Amendment of Receivables.

  	
   

  
	
   

  	
  8.19

  	
   

  	
  Accounts.

  	
   

  
	
   

  	
  8.20

  	
   

  	
  Use of Proceeds.

  	
   

  
	
   

  	
  8.21

  	
   

  	
  No Excess Cash.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX FINANCIAL COVENANTS

  	
   

  
	
   

  	
  9.1

  	
   

  	
  Leverage Ratio.

  	
   

  
	
   

  	
  9.2

  	
   

  	
  Interest Coverage Ratio.

  	
   

  
	
   

  	
  9.3

  	
   

  	
  Fixed Charge Coverage Ratio.

  	
   

  
	
   

  	
  9.4

  	
   

  	
  Capital Expenditures.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X EVENTS OF DEFAULT

  	
   

  
	
   

  	
  10.1

  	
   

  	
  Events of Default.

  	
   

  
	
   

  	
  10.2

  	
   

  	
  Rights Not Exclusive.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XI COLLATERAL ADMINISTRATION

  	
   

  
	
   

  	
  11.1

  	
   

  	
  Lock-Box and Master Collection Account
  Arrangements.

  	
   

  
	
   

  	
  11.2

  	
   

  	
  Reports.

  	
   

  
	
   

  	
  11.3

  	
   

  	
  Enforcement Rights.

  	
   

  
	
   

  	
  11.4

  	
   

  	
  Responsibilities of Borrowers.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  XII ADMINISTRATIVE AGENT

  	
   

  
	
   

  	
  12.1

  	
   

  	
  Appointment.

  	
   

  
	
   

  	
  12.2

  	
   

  	
  Nature of Duties.

  	
   

  
	
   

  	
  12.3

  	
   

  	
  Rights, Exculpation, Etc.

  	
   

  
	
   

  	
  12.4

  	
   

  	
  Reliance.

  	
   

  
	
   

  	
  12.5

  	
   

  	
  Indemnification.

  	
   

  
	
   

  	
  12.6

  	
   

  	
  Administrative Agent in its Individual Capacity.

  	
   

  
	
   

  	
  12.7

  	
   

  	
  Notice of Defaults.

  	
   

  

 

iii

 

	
   

  	
  12.8

  	
   

  	
  Holders of Obligations.

  	
   

  
	
   

  	
  12.9

  	
   

  	
  Actions with Respect to Defaults.

  	
   

  
	
   

  	
  12.10

  	
   

  	
  Resignation.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  XIII MISCELLANEOUS

  	
   

  
	
   

  	
  13.1

  	
   

  	
  No Waiver; Modifications in Writing.

  	
   

  
	
   

  	
  13.2

  	
   

  	
  Further Assurances.

  	
   

  
	
   

  	
  13.3

  	
   

  	
  Notices, Etc.

  	
   

  
	
   

  	
  13.4

  	
   

  	
  Costs, Expenses and Taxes.

  	
   

  
	
   

  	
  13.5

  	
   

  	
  Defaulting Lender.

  	
   

  
	
   

  	
  13.6

  	
   

  	
  Confirmations.

  	
   

  
	
   

  	
  13.7

  	
   

  	
  Setoff; Recoupment.

  	
   

  
	
   

  	
  13.8

  	
   

  	
  Execution in Counterparts.

  	
   

  
	
   

  	
  13.9

  	
   

  	
  Binding Effect; Assignment; Addition and
  Substitution of Lenders.

  	
   

  
	
   

  	
  13.10

  	
   

  	
  CONSENT TO JURISDICTION; MUTUAL WAIVER OF JURY TRIAL.

  	
   

  
	
   

  	
  13.11

  	
   

  	
  GOVERNING LAW.

  	
   

  
	
   

  	
  13.12

  	
   

  	
  Severability of Provisions.

  	
   

  
	
   

  	
  13.13

  	
   

  	
  Transfers of Notes.

  	
   

  
	
   

  	
  13.14

  	
   

  	
  Registry.

  	
   

  
	
   

  	
  13.15

  	
   

  	
  Headings.

  	
   

  
	
   

  	
  13.16

  	
   

  	
  Termination of Agreement.

  	
   

  
	
   

  	
  13.17

  	
   

  	
  Confidentiality.

  	
   

  
	
   

  	
  13.18

  	
   

  	
  Concerning the Collateral and the Loan Documents.

  	
   

  
	
   

  	
  13.19

  	
   

  	
  Joint and Several Liability of Borrowers.

  	
   

  
	
   

  	
  13.20

  	
   

  	
  Appointment and Authorization of Funds Administrator.

  	
   

  

 

iv

 

INDEX OF EXHIBITS AND SCHEDULES

 

	
  EXHIBITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit 1.1(a)

  	
   

  	
  Credit and Collection
  Policy

  
	
  Exhibit 1.1(b)

  	
   

  	
  Lock-Boxes and Lock-Box
  Banks

  
	
  Exhibit 1.1(c)

  	
   

  	
  Form of Lock-Box Letter

  
	
  Exhibit 1.1(d)

  	
   

  	
  Form of Collateral
  Account Agreement

  
	
  Exhibit 1.1(e)

  	
   

  	
  Form of Joinder
  Agreement

  
	
  Exhibit 1.2(b)

  	
   

  	
  Fourth Quarter 2001
  EBITDA

  
	
  Exhibit 2.1(c)

  	
   

  	
  Form of Revolving Note

  
	
  Exhibit 2.1(d)

  	
   

  	
  Form of Notice of
  Borrowing

  
	
   

  	
   

  	
   

  
	
  Exhibit 2.2(b)

  	
   

  	
  Form of Notice of
  Conversion or Continuation

  
	
  Exhibit 2.3(b

  	
   

  	
  Form of Letter of
  Credit Request

  
	
  Exhibit 4.8(d)

  	
   

  	
  Form of Exhibit
  4.8(d)(ii) Certificate

  
	
  Exhibit 5.1(a)(ii)

  	
   

  	
  Form of Security
  Agreement

  
	
  Exhibit 5.1(a)(iii)(A)

  	
   

  	
  Form of Subsidiary
  Guarantee Agreement

  
	
  Exhibit 5.1(a)(iii)(B)

  	
   

  	
  Form of HSCC Subsidiary
  Guarantee Agreement

  
	
  Exhibit 5.1(a)(v)

  	
   

  	
  Form of Pledge
  Agreement

  
	
  Exhibit 5.1(a)(vii)

  	
   

  	
  Form of Perfection
  Certificates

  
	
  Exhibit 5.1(b)(i)

  	
   

  	
  Form of GOF
  Restructuring Agreement

  
	
  Exhibit 5.1(b)(ii)

  	
   

  	
  Term Sheet

  
	
  Exhibit 5.1(e)(i)

  	
   

  	
  Form of Officer’s
  Certificate Pursuant to Section 5.1(e)(i)

  
	
  Exhibit 5.1(e)(ii)-1

  	
   

  	
  Form of Opinion of
  Skadden, Arps, Slate, Meagher & Flom LLP

  
	
  Exhibit 5.1(e)(ii)-2

  	
   

  	
  Form of Opinion of
  Stoel Rives LLP

  
	
  Exhibit 5.1(f)

  	
   

  	
  Form of Tax Sharing
  Agreement

  
	
  Exhibit 7.2(a)

  	
   

  	
  Form of Auditor’s
  Certificate

  
	
  Exhibit 7.2(b)-1

  	
   

  	
  Form of Certificate of
  Responsible Financial Officer Pursuant to Section 7.2(b)

  
	
  Exhibit 7.2(b)-2

  	
   

  	
  Form of Certificate of
  Responsible Financial Officer Pursuant to Section 7.2(b)

  
	
  Exhibit 11.1

  	
   

  	
  Form of Master
  Collection Account Agreement

  
	
  Exhibit 11.2(a)

  	
   

  	
  Form of Monthly Report

  
	
  Exhibit 11.2(b)

  	
   

  	
  Form of Weekly Report

  
	
  Exhibit 13.9(c)

  	
   

  	
  Form of Assignment and
  Assumption Agreement

  
	
   

  	
   

  	
   

  
	
  SCHEDULES TO REVOLVING CREDIT AGREEMENT

  
	
   

  	
   

  	
   

  
	
  Schedule 1.1(a)

  	
   

  	
  Commitments

  
	
  Schedule 1.1(b)

  	
   

  	
  List of Approved
  Customers

  
	
  Schedule 1.1(c)

  	
   

  	
  Unrestricted
  Subsidiaries

  
	
  Schedule 1.1(d)

  	
   

  	
  Permitted Turnaround
  Capital Expenditures

  
	
  Schedule 1.1(e)

  	
   

  	
  Restructuring
  Activities and Amounts

  
	
  Schedule 2.3(j)

  	
   

  	
  Existing Letters of
  Credit

  
	
  Schedule 6.3

  	
   

  	
  Approvals and Consents

  
	
  Schedule 6.4

  	
   

  	
  Governmental Approval

  
	
  Schedule 6.5(a)

  	
   

  	
  Historical Financial
  Statements

  

 

v

 

	
  Schedule 6.5(d)

  	
   

  	
  Indebtedness and Other
  Material Liabilities

  
	
  Schedule 6.5(e)

  	
   

  	
  Pro Forma Balance Sheet

  
	
  Schedule 6.5(f)

  	
   

  	
  Financial Projections

  
	
  Schedule 6.12

  	
   

  	
  Capitalization of the
  Company

  
	
  Schedule 6.13

  	
   

  	
  Restricted Subsidiaries

  
	
  Schedule 6.17

  	
   

  	
  Environmental Matters

  
	
  Schedule 6.21(c)

  	
   

  	
  Real Property

  
	
  Schedule 6.21(f)

  	
   

  	
  Deposit Accounts

  
	
  Schedule 7.10(g)

  	
   

  	
  IRIC Account Procedures

  
	
  Schedule 7.16

  	
   

  	
  Locations

  
	
  Schedule 8.1(a)

  	
   

  	
  Existing Liens

  
	
  Schedule 8.7

  	
   

  	
  Investments

  
	
  Schedule 8.15

  	
   

  	
  Permitted Activities of
  HSCHC and HSCC

  
	
  Schedule 8.17(a)

  	
   

  	
  Procedures for
  International Risk Insurance Company with respect to Insurance Proceeds

  
	
  Schedule 8.17(b)

  	
   

  	
  Foreign Deposit
  Accounts

  
	
  Schedule 10.1(g)

  	
   

  	
  Exceptions

  

 

vi

 

REVOLVING CREDIT
AGREEMENT

 

THIS REVOLVING CREDIT
AGREEMENT is dated as of September 30, 2002, and is made by and among Huntsman
Company LLC, a Utah limited liability company (the “Company”), Huntsman
Petrochemical, Huntsman EPS, Polymers, Huntsman Fuels and Huntsman
International Trading Corporation (each, along with the Company, referred to
herein as a “Borrower” and collectively as “Borrowers”, with the
Company acting in its capacity as Funds Administrator for the Borrowers), the
financial institutions party hereto, including Deutsche Bank Trust Company
Americas (f/k/a Bankers Trust Company), in their capacities as lenders
hereunder (collectively, the “Lenders,” and each individually, a “Lender”),
and Deutsche Bank Trust Company Americas (f/k/a Bankers Trust Company), as
administrative agent (“Administrative Agent”) for the Lenders and as
Collateral Agent under the Security Agreement.

 

W I T N E S S E T
H:

 

WHEREAS, the Company,
Administrative Agent, and various financial institutions are entering into that
certain Amended and Restated Credit Agreement, dated as of the date hereof,
providing for credit facilities up to an aggregate $1.388 billion;

 

WHEREAS, the Company,
Administrative Agent and the other parties signatory thereto entered into that
certain Supplemental Accounts Receivable Credit Agreement, dated as of December
20, 2001 (the “Receivables Credit Agreement”), as a supplement to the
then existing credit facilities;

 

WHEREAS, this Agreement
is a refinancing of the Receivables Credit Agreement;

 

NOW, THEREFORE, in
consideration of the premises and of the mutual covenants herein contained, the
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:

 

ARTICLE I  

DEFINITIONS
AND ACCOUNTING TERMS

 

1.1           Definitions.  As used herein, and unless the context
requires a different meaning, the following terms have the meanings indicated:

 

“Acquisition”
means with respect to any Borrower or any Restricted Subsidiary, any
transaction or series of related transactions for the purpose of, or resulting
directly or indirectly in, the acquisition by such Borrower or Restricted
Subsidiary of all or a significant part of the assets of another Person, any
Investment in any Person which, after the Closing Date as a result of such
Investment, becomes a Subsidiary of a Borrower, or, except as permitted by Section
8.3(a), any merger, consolidation or amalgamation with any other Person.

 

 

“Additional Security
Documents” shall mean all mortgages, pledge agreements, security agreements
and other security documents entered into pursuant to Section 7.10 with
respect to additional Collateral.

 

“Administrative Agent”
has the meaning ascribed to such term in the preamble.

 

“Affiliate” means,
with respect to any Person, any Person or group acting in concert in respect of
the Person in question that, directly or indirectly, controls (including but
not limited to all directors and officers of such Person) or is controlled by
or is under common control with such Person; provided, that neither DB
nor any Affiliate of DB shall be deemed to be an Affiliate of any
Borrower.  For the purposes of this
definition, “control” (including, with correlative meanings, the terms “controlled
by” and “under common control with”), as used with respect to any Person or
group of Persons, shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of management and policies of such
Person, whether through the ownership of voting securities or by contract or
otherwise. A Person shall be deemed to control a corporation or other entity if
such Person possesses, directly or indirectly, the power to vote 10% or more of
the securities having ordinary voting power for the election of directors of
such corporation or other entity.

 

“Agreement” means
this Revolving Credit Agreement, as the same may at any time be amended,
supplemented, waived or otherwise modified in accordance with the terms hereof
and in effect.

 

“Airstar Aircraft
Financing Documents” means Operating Leases and related documents entered
into by Airstar Corporation relating to aircraft owned or acquired by it and
any agreements or documents entered into by Airstar Corporation.

 

“Amended and Restated
Credit Agreement” means that certain Amended and Restated Credit Agreement,
dated as of the date hereof, by and among the Company, DB, as administrative
agent thereunder, and the various lenders party thereto, as such agreement may
be amended, restated, supplemented or otherwise modified; provided that
no such amendment, restatement, supplement or other modification may (i)
increase the principal amount of Indebtedness thereunder, (ii) decrease the
Weighted Average Life to Maturity of Indebtedness thereunder, (iii) change the
affirmative covenants, negative covenants, financial covenants and events of
default to be more restrictive than those in effect prior to such change or
(iv) otherwise adversely affect the interests of the Lenders in any material respect
hereunder unless in each case such modification is approved by the Required
Lenders.

 

“Amended and Restated
Polymers Indenture” means that certain indenture, as amended and restated
as of June 14, 2002, by Polymers and HSBC Bank USA, a copy of which is attached
as Appendix M to the Disclosure Materials.

 

“Amended and Restated
Senior Notes Indentures” means that certain indenture as amended by that
certain amendment, dated as of June 14, 2002, by and between the Company, as
Issuer, each of the Guarantors named therein and Wilmington Trust Company, as
Trustee and that certain indenture as amended by that certain amendment dated
as of June 14, 2002, by and

 

2

 

between the Company, as
Issuer, each of the Guarantors named therein and Wilmington Trust Company, as
Trustee, a copy of which is attached as Appendix M to the Disclosure Materials.

 

“Applicable Base Rate
Margin” means, initially, 2.25%, as the same may be adjusted quarterly
based on the Pricing Grid.

 

“Applicable
Eurocurrency Margin” means, initially, 3.25%, as the same may be adjusted
quarterly based on the Pricing Grid.

 

“Applicable Margin
Period” shall mean each period which shall commence on the first Business
Day of the month following the date on which the financial statements and
compliance certificate are delivered pursuant to Section 7.1(a) or 7.1(b),
as applicable, and which shall end on the earlier of (i) the date of actual
delivery of the next financial statements and compliance certificate pursuant
to Section 7.1(a) or 7.1(b), as applicable, and (ii) the latest
date on which the next financial statements and compliance certificate are
required to be delivered pursuant to Section 7.1(a) or 7.1(b), as
applicable, provided that the first Applicable Margin Period shall
commence on the first Business Day of the month following the delivery of the
financial statements in respect to the twelve month period ending on March 31,
2003.

 

“Approved
Jurisdiction” means the USA, Canada and such additional jurisdictions as
may from time to time hereafter be approved by Administrative Agent in writing;
provided, however, that Approved Jurisdiction status for any
jurisdiction other than the USA and Canada may be revoked by Administrative
Agent, for any reason, by notification to the Funds Administrator, and provided
further, that each Approved Multinational Customer shall be deemed to be
located in an Approved Jurisdiction.

 

 “Approved Multinational Customer”
means each customer of the Borrowers listed on Schedule 1.1(b) and such
additional customers that maintain long-term unsecured debt ratings of at least
“A” by S&P and A2 by Moody’s as may be approved from time to time in the
sole discretion of the Administrative Agent.

 

“Approved Uninvoiced
Customer” means each customer of the Borrowers listed on Schedule 1.1(b)
and such additional customers as may be approved from time to time in the sole
discretion of the Administrative Agent.

 

 “Asset Disposition” means any sale,
lease, transfer or other disposition (or series of related sales, leases,
transfers or dispositions) of all or any part of an interest in shares of
Capital Stock of a Restricted Subsidiary of any Borrower (other than directors’
qualifying shares and similar arrangements required by applicable law with
respect to any Foreign Subsidiary), property or other assets (each referred to
for the purposes of this definition as a “disposition” or any variation
thereof) by any Borrower or any of such Borrower’s Restricted Subsidiaries provided,
that (i) any disposition by a Borrower or a Subsidiary to a Borrower or a
Wholly-Owned Subsidiary which is not an Unrestricted Subsidiary, (ii) the
disposition of equipment the proceeds of which are used to purchase other
equipment used in any Borrower’s or such Borrower’s Restricted Subsidiaries’
business within 180 days from the date of sale (provided that pending
any such purchase the Net Sale Proceeds thereof are used to repay Revolving
Loans

 

3

 

outstanding on the date
of receipt of such proceeds), and (iii) dispositions permitted by Section
8.4 or Section 8.6(b), (e), (f), (g), (h)
or (i) shall not constitute an Asset Disposition for purposes of this
definition.

 

“Assignee” has the
meaning assigned to that term in Section 13.8(c).

 

“Assignment and
Assumption Agreement” means an Assignment and Assumption Agreement
substantially in the form of Exhibit 13.9(c) annexed hereto and made a
part hereof by any applicable Lender, as assignor, and such Lender’s assignee
in accordance with Section 13.9.

 

“Attorney Costs”
means all reasonable fees and disbursements of any law firm or other external
counsel and the reasonable allocated cost of internal legal services, including
all reasonable disbursements of internal counsel.

 

“Australian Joint
Ventures Interests” means CPH’s 50% equity interest in HCPH Holdings Pty
Limited, 50% equity interest in Huntsman Chemical Australia Unit Trust and 20%
equity interest in Huntsman Surfactants Technology Corporation.

 

“Available Revolving
Commitment” means, as to any Revolving Lender at any time an amount equal
to the excess, if any, of (a) such Revolving Lender’s Revolving Commitment over
(b) the sum of (i) the aggregate principal amount then outstanding of Revolving
Loans made by or on behalf of such Revolving Lender and (ii) such Revolving
Lender’s Revolving Pro Rata Share of the LC Obligations then outstanding.

 

“Bankruptcy
Event” shall be deemed to have occurred with respect to any Person if
either:

 

(a)           a case or other proceeding shall be commenced, without
the application or consent of such Person, in any court, seeking the
liquidation, reorganization, debt arrangement, dissolution, winding up, or
composition or readjustment of debts of such Person, the appointment of a
trustee, receiver, custodian, liquidator, assignee, sequestrator or the like
for such Person or any substantial part of its assets, or any similar action
with respect to such Person under any law (foreign or domestic) relating to
bankruptcy, insolvency, reorganization, winding up or composition or adjustment
of debts, and such case or proceeding shall continue undismissed, or unstayed
and in effect, for a period of thirty (30) days; or any of the actions sought
in such petition or proceeding, including the entering of an order for relief
in respect of such Person or the appointment of any trustee, receiver,
custodian, liquidator, assignee, sequestrator or the like for such Person or
any substantial portion of such Person’s property shall be granted or otherwise
occur; or

 

(b)           such Person shall fail to, or admit in writing its
inability to, pay its debts generally as they become due, or shall commence a
voluntary case or other proceeding under any applicable bankruptcy, insolvency,
reorganization, debt arrangement, dissolution or other similar law now or
hereafter in effect, or shall consent to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee, custodian,

 

4

 

sequestrator (or other
similar official) for, such Person or for any substantial part of its property,
or shall make any general assignment for the benefit of creditors, or shall
take any corporate or partnership action authorizing the taking of any of
foregoing actions.

 

“Base Rate” means
the greater of (i) the rate most recently announced by DB at its principal
office as its “prime rate”, which is not necessarily the lowest rate made
available by DB or (ii) the Federal Funds Rate plus 1/2 of 1% per annum.  The “prime rate” announced by DB is evidenced
by the recording thereof after its announcement in such internal publication or
publications as DB may designate.  Any
change in the interest rate resulting from a change in such “prime rate”
announced by DB shall become effective without prior notice to the Borrowers as
of 12:01 A.M. (New York City time) on the Business Day on which each change in
such “prime rate” is announced by DB. 
DB may make commercial or other loans to others at rates of interest at,
above or below its “prime rate”.

 

“Base Rate Loan”
means any Loan which bears interest at a rate determined with reference to the
Base Rate.

 

“BASF Note” shall
mean that certain Promissory Note, dated March 4, 1997, of HSCC to BASF
Corporation in the original principal amount of $75 million, as in effect on
the Closing Date.

 

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

 

“Borrower” has the
meaning assigned to that term in the preamble and shall also include any
Wholly-Owned Restricted Subsidiary of the Company acceptable to Administrative
Agent and party to a Joinder Agreement substantially in the form of Exhibit
1.1(e) hereto.

 

“Borrowing” means
a group of Loans of a single Type made by the Lenders, as appropriate on a
single date and in the case of Loans other than Base Rate Loans, as to which a
single Interest Period is in effect.

 

“Borrowing Base”
shall mean:

 

(a)           Subject to clause (b) below, at any time, the amount
equal at such time to:

 

(i)            eighty-five percent (85%) of the Net Receivables
Balance, plus

 

(ii)           sixty-five percent (65%) of the net value of the
Eligible Inventory of the Borrowers, minus

 

(iii)          the amount of any reserves established by
Administrative Agent pursuant to clause (b) below or in the definition of
Permitted Polymers Notes Repurchase Amount.

 

(b)           Administrative Agent at any time in the exercise of
its Permitted Discretion shall be entitled to (i) establish and increase or
decrease reserves against Eligible Receivables and Eligible Inventory, (ii)
reduce the advance rates to be applied under clauses (a)(i) and (a)(ii) above
to a level below the rates stated therein or (following any such reduction)

 

5

 

restore such advance
rates to any level equal to or below the advance rates stated in clauses (a)(i)
and (a)(ii) above, (iii) impose additional restrictions (or eliminate any such
additional restrictions) to the standards of eligibility set forth in the
respective definitions of “Eligible Receivables” and “Eligible Inventory” and
(iv) establish and, once established, increase or decrease a reserve in the
amount of accrued and unpaid interest payable by any Borrower hereunder,
including interest on Loans and drawings under Letters of Credit.

 

“Borrowing Base Cash
Collateral Amount” has the meaning assigned to that term in Section
4.5(c).

 

“Business Day”
means (i) as it relates to any payment, determination, funding or notice to be
made or given in connection with any Loan, or otherwise to be made or given to
or from Administrative Agent, a day other than a Saturday, Sunday or other day
on which commercial banks in New York City are authorized or required by law to
close; provided, however, that when used in connection with a
Eurocurrency Loan, the term “Business Day” shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London interbank
market; provided, further, that when used in connection with any
Letter of Credit, the term “Business Day” shall also exclude any day on which
commercial banks in the city in which the Facing Bank for such Letter of Credit
is domiciled are required by law to close. 
For purposes of this Agreement (other than for purposes of determining
the end of any applicable Interest Period), “Business Day” shall not include
Pioneer Day as recognized in the State of Utah in any year.

 

“Capital Stock”
means, with respect to any Person, any and all shares, interests,
participations, rights in or other equivalents (however designated) of such
Person’s capital stock, partnership interests, membership interests or other
equivalent interests and any rights (other than debt securities convertible
into or exchangeable for capital stock), warrants or options exchangeable for
or convertible into such capital stock or other equity interests.

 

“Capitalized Lease”
means, at the time any determination thereof is to be made, any lease of
property, real or personal, in respect of which the present value of the
minimum rental commitment is capitalized on the balance sheet of the lessee in
accordance with GAAP.

 

“Capitalized Lease
Obligation” means, at the time any determination thereof is to be made, the
amount of the liability in respect of a Capitalized Lease which would at such
time be required to be capitalized on the balance sheet of the lessee in
accordance with GAAP.

 

“Cash” means
money, currency or the available credit balance in a Deposit Account.

 

“Cash Equivalents”
means any Investment in (i) a marketable obligation, maturing within one year
after issuance thereof, issued or guaranteed by the USA or an instrumentality
or agency thereof, (ii) a certificate of deposit or banker’s acceptance,
maturing within one year after issuance thereof, issued by any Lender, or a
national or state bank or trust company or a European, Canadian or Japanese
bank, in each case having capital, surplus and undivided profits of at least
$100,000,000 and whose long-term unsecured debt has a rating of

 

6

 

“A” or better by S&P
or A2 or better by Moody’s or the equivalent rating by any other nationally
recognized rating agency (provided that the aggregate face amount of all
Investments in certificates of deposit or bankers’ acceptances issued by the
principal offices of or branches of such European or Japanese banks located
outside the USA shall not at any time exceed 33-1/3% of all Investments
described in this definition), (iii) open market commercial paper, maturing
within 270 days after issuance thereof, which has a rating of A-1 or better by
S&P or P-1 or better by Moody’s, or the equivalent rating by any other
nationally recognized rating agency, (iv) repurchase agreements and reverse
repurchase agreements with a term not in excess of one year with any financial
institution which has been elected primary government securities dealers by the
Federal Reserve Board or whose securities are rated AA- or better by S&P or
Aa3 or better by Moody’s or the equivalent rating by any other nationally
recognized rating agency relating to marketable direct obligations issued or
unconditionally guaranteed by the USA or any agency or instrumentality thereof
and backed by the full faith and credit of the USA, (v) “Money Market”
preferred stock maturing within six months after issuance thereof or municipal
bonds issued by a corporation organized under the laws of any state of the USA,
which has a rating of “A” or better by S&P or Moody’s or the equivalent
rating by any other nationally recognized rating agency and (vi) tax exempt
floating rate option tender bonds backed by letters of credit issued by a national
or state bank whose long-term unsecured debt has a rating of AA or better by
S&P or Aa2 or better by Moody’s or the equivalent rating by any other
nationally recognized rating agency.

 

“Cash Interest Expense”
means Net Interest Expense but excluding, however, Interest Expense not
currently payable in cash.

 

“Change of Control”
means (i) prior to an Initial Public Offering, (x) the failure by Mr. Jon M.
Huntsman, his spouse, direct descendants, an entity controlled by any of the
foregoing and/or by a trust of the type described hereafter, and/or a trust for
the benefit of any of the foregoing (the “Huntsman Group”), collectively
to own and control at least 51% of the outstanding voting Capital Stock of the
Company, Holdco I and Holdco II, (y) any sale, assignment, transfer or other
disposition by GOF or the Huntsman Group of any membership interests of Holdco
I held by GOF or the Huntsman Group on the Closing Date, other than a Permitted
Transfer or (z) the failure of the Company to be a Wholly-Owned Direct Subsidiary
of Holdco II or of Holdco II to be a Subsidiary of Holdco I (except in the case
of the Company, in respect of (i) the preferred interests held by Huntsman
Cancer Foundation on the Closing Date and (ii) the interests held by Huntsman
Chemical Corporation or any other Wholly-Owned Subsidiary of the Company on the
Closing Date for so long as such interests are held by a Wholly-Owned
Subsidiary of Company) or (ii) after an Initial Public Offering, the occurrence
of the following: (x) any “person” or “group” (as such terms are used in
Sections 13(d) and 14(d) of the Securities and Exchange Act of 1934, as amended
(the “Exchange Act”)), other than GOF or one or more members of the
Huntsman Group, is or becomes the “beneficial owner” (as defined in Rules 13d-3
and 13d-5 under the Exchange Act, except that a person shall be deemed to have
“beneficial ownership” of all securities that such Person has the right to
acquire, whether such right is exercisable immediately or only after the
passage of time), directly or indirectly, of 35% or more of the then
outstanding voting Capital Stock of the Company or Issuer other than in a
transaction having the approval of the board of directors of the Company at
least a majority of

 

7

 

which members are
Continuing Directors; or (y) Continuing Directors shall cease to constitute at
least a majority of the directors constituting the board of directors of the
Company or Issuer.

 

“Closing Date”
means September 30, 2002.

 

“Code” means the
Internal Revenue Code of 1986, as from time to time amended, including the
regulations proposed or promulgated thereunder, or any successor statute and
the regulations proposed or promulgated thereunder.

 

“Collateral”
means, collectively, “Collateral” as such term is defined in any Security
Document or any other collateral pledged by any Credit Party to secure the
Obligations.

 

“Collateral Account
Agreement” means the Collateral Account Agreement executed substantially in
the form attached as Exhibit 1.1(d) hereto.

 

“Collateral Agent”
means DB acting in the capacity of Collateral Agent as such term is defined in
the Security Agreement until a successor is approved pursuant to Article XI of
the Security Agreement and thereafter shall mean such successor and all
successors thereto.

 

“Collection”
means, for any Receivable, (a) any cash collections or other cash proceeds of
such Receivable, including any Finance Charges paid and (b) any cash proceeds
from the Related Security.

 

“Commitment”
means, with respect to each Lender, the Revolving Commitment of such Lender and
“Commitments” means such commitments of all of the Lenders collectively.

 

“Commitment Period”
means, the period from and including the Closing Date to but not including the
Commitment Termination Date.

 

“Commitment
Termination Date” means June 30, 2006, or such earlier date as the
Revolving Commitments shall have been terminated or otherwise reduced to $0
pursuant to this Agreement.

 

“Consolidated Capital
Expenditures” shall mean, for the Company and its Restricted Subsidiaries,
for any period, the aggregate of all expenditures (whether paid in cash or
accrued as liabilities and including in all events all Capitalized Lease
Obligations) by the Company and its Restricted Subsidiaries during that period
that, in conformity with GAAP, are or are required to be included in the
property, plant or equipment reflected in the consolidated balance sheet of the
Company; provided that Consolidated Capital Expenditures shall not include any
portion of expenditures to replace destroyed or damaged property, plant or
equipment to the extent such capital expenditures are financed with casualty
insurance proceeds.

 

“Consolidated Debt”
means, without duplication, the sum of (i) Indebtedness of Borrowers and their
Restricted Subsidiaries (other than the Horizon Subordinated Note) to the
extent reflected on a consolidated balance sheet of the Company, determined on
a consolidated basis in accordance with GAAP (but net of Cash and Cash
Equivalents) and (ii) Indebtedness of

 

8

 

the Borrowers and their
Restricted Subsidiaries of the type referred to in clauses (x) and (xi) of the
definition of such term.

 

“Consolidated Fixed
Charges” means, for any period, for the Company and its Restricted
Subsidiaries, the sum of (without duplication) (i) Cash Interest Expense, (ii)
all scheduled payments of principal on Indebtedness of the Company and its
Restricted Subsidiaries (including, without limitation, principal payments in
respect of Capitalized Leases), (iii) net income taxes paid in cash (excluding
the effect of cash taxes on extraordinary items to the extent of cash proceeds
on such items to the extent that such cash proceeds are excluded in computing
EBITDA and net of tax distributions received from HIH), and (iv) Consolidated
Capital Expenditures payable in cash, as each of the foregoing is made during
such period of determination in accordance with GAAP on a consolidated basis.

 

“Consolidated Net
Income” and “Consolidated Net Loss” mean, respectively, with respect
to any period, the aggregate of the net income (loss) of the Company for such
period, determined in accordance with GAAP on a consolidated basis, plus or
minus, to the extent not included therein, the net income (loss) of any
Restricted Subsidiary attributable to a minority interest in such Restricted
Subsidiary, less the amount of cash dividends paid on any preferred Capital
Stock of the Company in such period; provided, that the net income
(loss) of any Person acquired in a pooling of interests transaction for any
period prior to the date of such acquisition shall be excluded in computing
Consolidated Net Income provided  further, that as used in the
definition of Restricted Subsidiary Adjusted Earnings, Consolidated Net Income
and Consolidated Net Loss shall be determined without giving effect to non-cash
adjustments (whether positive or negative) (the “Equity Deferral Plan
Non-Cash Adjustments”) attributable 
(without duplication) to changes in employees’ accounts due to (i) the
matching amount in any “Employer Credit Accounts” (as defined in the Equity
Deferral Plan) and matching associated with Expatriate Credits (as defined in
the Equity Deferral Plan), (ii) changes in the value of employees’ “Deferral
Accounts” (as defined in the Equity Deferral Plan) resulting from changes in
the value of the Employer Stock (as defined in the Equity Deferral Plan) and
(iii) changes in the value of the vested portion of such “Employer Credit
Accounts” (as defined in the Equity Deferral Plan) and the vested portion of
Expatriate Credits (as defined in the Equity Deferral Plan) resulting from
changes in the value of the Employer Stock (as defined in the Equity Deferral
Plan), provided still further, that any amounts paid or distributed
in cash (the “Equity Deferral Plan Cash Adjustments”) pursuant to the
Equity Deferral Plan attributable to such changes in employees’ accounts
described in clauses (i), (ii) and (iii) above shall, to the extent not
otherwise deducted in determining Consolidated Net Income or Consolidated Net
Loss, be deemed to be expenses at the time of payment thereof and shall, for
such period, be deducted in determining Consolidated Net Income and
Consolidated Net Loss as used in the definition of Restricted Subsidiary
Adjusted Earnings.

 

“Consolidated Total
Assets” means, with respect to any Person, the book value, determined on a
consolidated basis in accordance with GAAP, of all assets of such Person and
its Subsidiaries.

 

“Contaminant”
means any pollutant, contaminant (as those terms are defined in 42 U.S.C. §
9601(33)), toxic pollutant (as that term is defined in 33 U.S.C. § 1362(13)),

 

9

 

hazardous substance (as
that term is defined in 42 U.S.C. § 9601(14)), hazardous chemical (as that term
is defined by 29 CFR § 1910.1200(c)), hazardous waste (as that term is defined
in 42 U.S.C. § 6903(5)), or any state or local equivalent of such laws and
regulations, including, without limitation, radioactive material, special waste,
polychlorinated biphenyls, asbestos, petroleum, including crude oil or any
petroleum-derived substance, waste, or breakdown or decomposition product
thereof, or any constituent of any such substance or waste, including but not
limited to polychlorinated biphenyls and asbestos.

 

“Continuation Date”
shall mean, with respect to Eurocurrency Loans, the day, which shall be the
last day of an Interest Period with respect thereto, on which a Eurocurrency
Loan has been continued pursuant to Sections 2.2(a), or 2.2(c).

 

“Continuing Directors”
means, as of any date, the collective reference to (i) all members of the board
of directors of the Company or Issuer who have held office continuously since a
date no later than twelve months prior to the Initial Public Offering, and (ii)
all members of the board of directors of Company or Issuer who assumed office
after such date and whose appointment or nomination for election by
shareholders of the Company or Issuer was approved by a vote of at least 50% of
the Continuing Directors in office immediately prior to such appointment or
nomination.

 

“Contract” means
an agreement between a Credit Party and any Person (including but not limited
to, a written contract, an invoice, a purchase order or an open account
agreement) pursuant to or under which such Person shall be obligated to make
payments in respect of any Receivable or any Related Security to such Credit
Party from time to time.

 

“Contractual
Obligation” means, as to any Person, any provision of any Securities issued
by such Person or of any indenture or credit agreement or any agreement,
instrument or other undertaking to which such Person is a party or by which it
or any of its property is bound.

 

“Conversion Date”
shall mean, with respect to Eurodollar Loans, the day, which shall be the last
day of an Interest Period, on which Borrowers have elected to convert their
Eurodollar Loans into Base Rate Loans pursuant to Section 2.2(a)(ii).

 

“CPH” means
Consolidated Press Holdings Limited, an Australian corporation.

 

“Credit and Collection
Policy” means, with respect to any Credit Party, such Credit Party’s credit
and collection policy and practices relating to Contracts and Receivables
attached as Exhibit 1.1(a).

 

“Credit Event”
means the making of any Loan or the issuance of any Letter of Credit; provided,
however, that the following shall not be deemed “Credit Events”:  (i) a conversion or continuation of any Loan
pursuant to Section 2.2 or 3.5; or (ii) any Revolving Loan deemed
to be made to fund any Letter of Credit reimbursement obligation pursuant to Section
2.3(c).

 

“Credit Exposure”
has the meaning assigned to that term in Section 13.8(b).

 

10

 

“Credit Party”
shall mean any Borrower, any Subsidiary Guarantor and the Funds Administrator.

 

“Currency Agreement”
means any foreign exchange contract, currency swap agreement, futures contract,
option contract, synthetic cap or other similar agreement designed to protect
the Persons entering into same against fluctuations in currency values.

 

“Customary Permitted
Liens” means:

 

(i)            Liens
for taxes not yet due and payable or which are being contested in good faith by
appropriate proceedings diligently pursued, provided that (A) any
proceedings commenced for the enforcement of such Liens shall have been stayed
or suspended within 30 days of the commencement thereof and (B) provision for
the payment of all such taxes known to such Person has been made on the books
of such Person to the extent required by GAAP;

 

(ii)           mechanics’,
processor’s, materialmen’s, carriers’, warehousemen’s, landlord’s and similar
Liens arising by operation of law and arising in the ordinary course of
business and securing obligations of such Person that are not overdue for a
period of more than 30 days or are being contested in good faith by appropriate
proceedings diligently pursued, provided that (A) any proceedings
commenced for the enforcement of such Liens shall have been stayed or suspended
within 30 days of the commencement thereof and (B) provision for the payment of
such Liens has been made on the books of such Person to the extent required by
GAAP;

 

(iii)          Liens arising in connection with worker’s
compensation, unemployment insurance, old age pensions and social security
benefits which are not overdue or are being contested in good faith by
appropriate proceedings diligently pursued, provided that (A) any
proceedings commenced for the enforcement of such Liens shall have been stayed
or suspended within 30 days of the commencement thereof and (B) provision for
the payment of such Liens has been made on the books of such Person to the
extent required by GAAP;

 

(iv)          (A)
Liens incurred or deposits made in the ordinary course of business to secure
the performance of bids, tenders, statutory obligations, fee and expense
arrangements with trustees and fiscal agents (exclusive of obligations incurred
in connection with the borrowing of money or the payment of the deferred
purchase price of property) and customary deposits granted in the ordinary
course of business under Operating Leases and (B) Liens securing surety,
indemnity, performance, appeal and release bonds, provided that full
provision for the payment of all such obligations has been made on the books of
such Person to the extent required by GAAP;

 

(v)           such
imperfections of title, covenants, restrictions, easements and other
encumbrances on real property (except for such which are specifically insured
for in a lender’s title policy delivered pursuant to the terms of this
Agreement) which in each case do not arise out of the incurrence of any
Indebtedness and which as to Mortgaged

 

11

 

Properties, do not
interfere with or impair in any material respect the utility, operation, value
or marketability of the real property on which such Lien is imposed and, as to
all other properties, do not impair the value or marketability of such
properties, taken as a whole;

 

(vi)          attachment,
judgment or other similar Liens arising in connection with court or arbitration
proceedings involving individually and in the aggregate liability of
$15,000,000 or less at any one time, provided the same are discharged,
or that execution or enforcement thereof is stayed pending appeal, within 60
days or, in the case of any stay of execution or enforcement pending appeal,
within such lesser time during which such appeal may be taken;

 

(vii)         leases or subleases granted to others not
interfering in any material respect with the business of any Borrower or any of
such Borrower’s Subsidiaries and any interest or title of a lessor under any
lease permitted by this Agreement; and

 

(viii)        Environmental Liens, to the extent that (A) any
proceedings commenced for the enforcement of such Liens shall have been
suspended or are being contested in good faith, (B) provision for all liability
and damages that are the subject of said Environmental Liens has been made on
the books of such Person to the extent required by GAAP and (C) such Liens do
not relate to obligations exceeding $5,000,000 in the aggregate at any one
time.

 

“DB” means
Deutsche Bank Trust Company Americas, a New York banking corporation, and its
successors.

 

“Default Rate”
means a variable rate per annum which shall be the Default Rate Margin plus (x)
the then applicable interest rate hereunder, or (y) if there is no such
applicable interest rate, the Base Rate plus the Applicable Base Rate Margin,
in respect of the amount on which the Default Rate is being assessed, but in no
event in excess of that permitted by applicable law.

 

“Default Rate Margin”
means two percent (2%) per annum.

 

“Defaulting Lender”
shall have the meaning assigned such term in Section 13.5(b)

 

“Deposit Account”
means a demand, time, savings, passbook or like account with a bank, savings
and loan association, credit union or like organization, other than an account
evidenced by a negotiable certificate of deposit.

 

“Dilution Ratio”
shall mean, as of the last day of each month, the weighted average dilution
ratio for such month and the immediately preceding eleven months as calculated
in accordance with the method used in connection with the preparation of
reports on the Credit Parties’ accounts receivables or such other method
reasonably acceptable to Administrative Agent.

 

12

 

“Dilution Reserve”
shall mean on any day an amount equal to the greater of (i) the product of (x)
the then applicable Dilution Ratio minus six percent (6%) times (y) the
Net Receivables Balance (without reduction for the Dilution Reserve) on such
day and (ii) an amount determined from time to time by Administrative Agent in
its reasonable discretion; provided, that the Dilution Reserve shall in
no event be less than zero.

 

“Disclosure Materials”
means that certain Plan of Reorganization, the Disclosure Statement to
accompany the Plan of Reorganization and the Appendices thereto, each dated
July 15, 2002, and each amendment or supplement thereafter to the extent posted
on Intralinks at least five (5) Business Days prior to the Closing Date.

 

“Dollar” and “$”
means lawful money of the USA.

 

“Domestic Subsidiary”
means each Subsidiary of any Borrower other than a Foreign Subsidiary.

 

“EBITDA” means,
for any applicable period, Restricted Subsidiary Adjusted Earnings plus, to the
extent deducted in determining the foregoing amount (i) Net Interest Expense
for such period of the Company and its Restricted Subsidiaries, (ii) provision
for taxes for such period for the Company and its Restricted Subsidiaries,
(iii) depreciation and amortization expense for such period for the Company and
its Restricted Subsidiaries, (iv) the Huntsman Polymers Non-Cash Charge and (v)
Restructuring Charges.

 

“Eligible Assignee”
means a commercial bank, investment company, financial institution, financial
company, fund (whether a corporation, partnership, trust or other entity) or
insurance company in each case, together with its Affiliates or Related Funds,
which extends credit or buys loans in the ordinary course of its business or
any other Person approved by the Administrative Agent and the Funds
Administrator, such approval not to be unreasonably withheld.

 

“Eligible Inventory”
means Inventory of the Borrowers at the time in existence and not consumed,
valued at the lower of cost or market on a basis consistent with such
Borrowers’ current and historical accounting practice.  In determining the amount to be so included,
the amount of such Inventory shall exclude any Inventory that Administrative
Agent determines to be ineligible pursuant to the definition of the term
“Borrowing Base” set forth herein. 
Eligible Inventory shall exclude:

 

(a)           any goods returned or rejected by a Borrower’s
customers (other than commodity products readily saleable to other customers)
and goods in transit to third parties as to which title has passed (other than
to a Borrower’s agents and warehouses that are not excluded below),

 

(b)           any Inventory as to which

 

(i)            a Borrower has not acquired title,

 

13

 

(ii)           Administrative Agent does not have a first and perfected
security interest, or

 

(iii)          a Borrower has not furnished to Administrative Agent
information adequate for purposes of identification at times and in form and
substance as may be reasonably requested by Administrative Agent, and

 

(c)           any Inventory to the extent that it

 

(i)            is obsolete or not either currently useable or
currently salable in the ordinary course of a Borrower’s business,

 

(ii)           is produced in violation of the Fair Labor Standards
Act and subject to the so-called “hot goods” provision contained in Title 29, §
215(a)(1) of the United States Code,

 

(iii)          is Inventory held for consumption by a Borrower or an
Affiliate and not for sale in the ordinary course of business,

 

(iv)          constitutes finished goods which remain unsold in
excess of ninety (90) days, or in the case of performance and polymers products
which are customarily produced in batch form, the amount of such product has an
aggregate book value not inconsistent with past practices.

 

(v)           is on consignment from a third party to a Borrower for
sale or is consigned to a third party for sale,

 

(vi)          is Inventory which consists of goods in transit from
locations outside of the USA,

 

(vii)         is Inventory which is subject to a Lien in favor of
any Person other than Administrative Agent (other than statutory or common law
non-consensual Liens constituting Permitted Liens and other than Liens
permitted by Sections 8.1(i) and 8.1(k),

 

(viii)        constitutes Inventory for which a Receivable has
arisen under the terms hereof,

 

(ix)           is Inventory which is not in conformity in all
material respects with the representations made with respect thereto in this
Agreement, the Security Documents or the other Loan Documents,

 

(x)            any Inventory excluded by the Administrative Agent in
its Permitted Discretion,

 

(xi)           constitutes Inventory which is not located on a
Borrower’s or an Affiliate’s owned premises in the USA listed on Schedule 2.7
to the Security Agreement, provided, however, except to the
extent that the Administrative Agent has agreed and has

 

14

 

established a reserve for
potential lease obligations in an amount satisfactory to the Administrative
Agent, Eligible Inventory shall not include Inventory which is located (A) on
any leased premises in the USA listed on Schedule 2.7 to the Security Agreement
where the landlord thereof has not consented in writing to Administrative
Agent’s prior Lien in such Inventory and Administrative Agent’s right to enter
such premises and take possession and remove such Inventory pursuant to a
landlord access and lien waiver in form and substance satisfactory to
Administrative Agent, (B) in warehouses or with bailees in the USA listed on
Schedule 2.7 to the Security Agreement where the warehousemen or bailee has not
consented in writing to Administrative Agent’s prior Lien in such Inventory and
Administrative Agent’s right to enter such premises and take possession of and
remove such Inventory, pursuant to an access and lien waiver in form and
substance satisfactory to Administrative Agent, or (C) on railroad cars not
subject to the control of such Borrower, or

 

(xii)          is deemed by Administrative Agent in its Permitted
Discretion to be otherwise ineligible for inclusion in the calculation of the
Borrowing Base.

 

Any Inventory which is Eligible
Inventory at any time, but which subsequently fails to meet any of the
foregoing requirements, shall forthwith cease to be Eligible Inventory until
such time as it once again meets all of the foregoing requirements.

 

“Eligible
Receivables” shall mean Receivables and Uninvoiced Receivables of the
Borrowers payable in Dollars.  In
determining the amount to be so included, the face amount of such Receivables
shall exclude any such Receivables that Administrative Agent determines to be
ineligible pursuant to the definition of the term “Borrowing Base” set forth
herein.  Eligible Receivables shall
exclude any Receivable with respect to which any of the following is true:

 

(a)           the Receivable arises out of a sale made by a Borrower
to an Affiliate of a Borrower; or

 

(b)           the invoice related to such Receivable (other than
Uninvoiced Receivables) provides that payment is due within sixty (60) days
from the date of such invoice, and either (i) an amount on such Receivable
remains unpaid sixty-one (61) or more days after the original payment due date
or (ii) an amount on such Receivable remains unpaid more than thirty (30) days
but less than sixty-one (61) days after the original payment due date, provided
that up to $10 million in aggregate Outstanding Balance of Receivables that
would be Eligible Receivables but for clause (ii) shall constitute Eligible
Receivables; or

 

(c)           the invoice related to such Receivable (other than
Uninvoiced Receivables) provides that payment is due more than sixty (60) days
from the date of such invoice, and either (i) an amount on such Receivable
remains unpaid more than thirty (30) days after the original payment due date
or (ii) such Receivable, when aggregated with the aggregate Outstanding Balance
of all such other Eligible Receivables with invoices providing for payment more
than sixty (60) days from the date of the invoice, exceeds $10 million, provided
that any Receivable deemed ineligible pursuant to this clause (ii) shall be
ineligible only to the extent by which it causes the result of the calculation
in this clause (ii) to exceed $10 million; or

 

15

 

(d)           the Receivable is from a particular Obligor (or any
Affiliate thereof) and fifty percent (50%) or more, in face amount, of all
Receivables from the same Obligor (and any Affiliate thereof) are ineligible
pursuant to clauses (b) or (c) above; or

 

(e)           the Receivable, when aggregated with all other
Receivables of such Obligor (and any Affiliate thereof), exceeds seven and
one-half percent (7.5%) in face value of all Receivables of the Borrowers
combined then outstanding, to the extent of such excess, provided that
Receivables supported or secured by an irrevocable letter of credit in form and
substance satisfactory to Administrative Agent, issued by a financial
institution satisfactory to Administrative Agent, and pledged to Administrative
Agent so that Administrative Agent has a first priority perfected security
interest in such letter of credit (together with sufficient documentation to
permit direct draws by Administrative Agent) shall be excluded to the extent of
the face amount of such letter of credit for the purposes of such calculation;
or

 

(f)            (i) the Obligor on such Receivable is also a creditor
of a Borrower, (ii) the Obligor on such Receivable has disputed its liability
on, or has made any claim with respect to, such Receivable or any other
Receivable due from such Obligor to a Borrower, which has not been resolved or
(iii) such Receivable is or may reasonably be expected to become subject to any
right of setoff by the Obligor; provided that any Receivable deemed
ineligible pursuant to this clause (f) shall be ineligible only to the extent
of the amount owed by a Borrower to the Obligor, the amount of such dispute or
claim, or the amount of such setoff, as applicable; or

 

(g)           (i) the Obligor on such Receivable has commenced a
voluntary case under the federal bankruptcy laws, as now constituted or
hereafter amended, or made an assignment for the benefit of creditors, or a
decree or order for relief has been entered by a court having jurisdiction over
the Obligor in an involuntary case under the federal bankruptcy laws, as now
constituted or hereafter amended, or any other petition or other application
for relief under the federal bankruptcy laws has been filed by or against the
Obligor; or (ii) the Obligor has filed a certificate of dissolution under
applicable state law or shall be liquidated, dissolved or wound-up, or shall
authorize or commence any action or proceeding for dissolution, winding-up or
liquidation; or (iii) the Obligor has failed, suspended business, declared
itself to be insolvent, is generally not paying its debts as they become due or
has consented to or suffered a receiver, trustee, liquidator or custodian to be
appointed for it or for all or a significant portion of its assets or affairs
(any such act or event in clauses (i) through (iii), an “Act of Bankruptcy”);
unless the payment of Receivables from such Obligor is secured by assets of, or
guaranteed by, in either case in a manner reasonably satisfactory to
Administrative Agent, a Person with respect to which an Act of Bankruptcy has
not occurred and that is acceptable to Administrative Agent or, if the
Receivable from such Obligor arises subsequent to a decree or order for relief
with respect to such Obligor under the federal bankruptcy laws, as now or
hereafter in effect, Administrative Agent shall have determined that the timely
payment and collection of such Receivable will not be impaired; or

 

(h)           the Obligor on such Receivable is not located in an
Approved Jurisdiction, unless (i) such Obligor has supplied the related
Borrower with an irrevocable letter of credit in form and substance reasonably
satisfactory to Administrative Agent, issued by a financial institution
satisfactory to Administrative Agent and which has been duly transferred to

 

16

 

Administrative Agent (or
which names Administrative Agent as a beneficiary) (together with sufficient
documentation to permit direct draws by Administrative Agent) or (ii) such
Receivable is subject to credit insurance payable to Administrative Agent
issued by an insurer and on terms and in an amount reasonably acceptable to
Administrative Agent; or

 

(i)            the Receivable arises out of a sale to an Obligor
which is on a bill-and-hold, guarantied sale, sale-and-return, sale on approval
or consignment basis or made pursuant to any other written agreement providing
for repurchase or return; or

 

(j)            Administrative Agent determines in its Permitted
Discretion that collection of such Receivable is insecure or that such
Receivable may not be paid by reason of the Obligor’s financial inability to
pay; or

 

(k)           the Obligor on such Receivable is the USA, any State
or any political subdivision, department, agency or instrumentality thereof,
unless the related Borrower duly assigns its rights to payment of such
Receivable to Administrative Agent pursuant to the Assignment of Claims Act of
1940 (31 U.S.C. § 3727 et seq.) or complies with any similar State or local law
as Administrative Agent shall require; or

 

(1)           the goods giving rise to such Receivable have not been
shipped and delivered to and accepted by the Obligor or the services giving
rise to such Receivable have not been performed by the related Borrower and
accepted by the Obligor or the Receivable otherwise does not represent a final
sale; or

 

(m)          any documentation relating to such Receivable does not
comply with all applicable legal requirements, including, where applicable, the
Federal Consumer Credit Protection Act, the Federal Truth in Lending Act and
Regulation Z of the Board of Governors of the Federal Reserve System; or

 

(n)           Administrative Agent does not have a valid and
perfected first priority security interest in such Receivable or such
Receivable does not otherwise conform to the representations and warranties
contained in this Agreement or any Security Document; or

 

(o)           the Receivable is subject to any adverse security
deposit, progress payment or other similar advance made by or for the benefit
of the applicable Obligor; or

 

(p)           the Receivable is evidenced by or arises under any
instrument or chattel paper unless such instrument or chattel paper has been
pledged to Administrative Agent containing such endorsement as Administrative
Agent shall require; or

 

(q)           the Obligor on such Receivable has a presence in a
State requiring the filing of Notice of Business Activities Report or similar
report in order to permit the related Borrower to seek judicial enforcement in
such State of payment of such Receivable unless such Borrower has qualified to
do business in such State or has filed a Notice of Business Activities Report
or equivalent report for the then current year or such failure to file and
inability to seek judicial enforcement is capable of being remedied without any
material delay or material cost; or

 

17

 

(r)            the Receivable consists of progress billings (such
that the obligation of the Obligor with respect to such Receivable is
conditioned upon a Borrower’s satisfactory completion of any further
performance under the agreement giving rise thereto); or

 

(s)           the Receivable is not stated to be due and payable in
full within ninety (90) days of the invoice date thereof (except with respect
to Uninvoiced Receivables); or

 

(t)            the Receivable is deemed by Administrative Agent in
its Permitted Discretion to be otherwise ineligible for inclusion in the
calculation of the Borrowing Base.

 

Any Receivable which is
an Eligible Receivable at any time, but which subsequently fails to meet any of
the foregoing requirements, shall forthwith cease to be an Eligible Receivable
until such time as it once again meets all of the foregoing requirements.

 

“Environmental Claim”
means any notice of violation, claim, suit, demand, abatement order or other
order or direction (conditional or otherwise) by any Governmental Authority or
any Person for any damage, including personal injury (including sickness,
disease or death), tangible or intangible property damage, contribution,
indemnity, indirect or consequential damages, damage to the environment,
nuisance, pollution, contamination or other adverse effects on the environment,
human health, or natural resources, or for fines, penalties, restrictions or
injunctive relief, resulting from or based upon (a) the occurrence or existence
of a Release or substantial threat of a material Release (whether sudden or
non-sudden or accidental or non-accidental) of, or exposure to, any Contaminant
in, into or onto the environment at, in, by, from or related to any real estate
owned, leased or operated at any time by any Borrower or any of such Borrower’s
Subsidiaries (the “Premises”), (b) the use, handling, generation,
transportation, storage, treatment or disposal of Contaminants in connection
with the operation of any Premises, or (c) the violation, or alleged violation,
of any statutes, ordinances, codes, orders, rules, regulations, permits, or
licenses or authorizations of or from any Governmental Authority or court
relating to environmental matters connected with Borrowers’ operations or any
Premises.

 

“End Date” shall
mean, for any Applicable Margin Period, the last day of such Applicable Margin
Period.

 

“Environmental Laws”
means any and all applicable foreign, federal, state or local laws, statutes,
ordinances, codes, rules, regulations, orders, decrees, judgments, directives
or Environmental Permits and cleanup or action standards, levels or objectives
imposing liability or standards of conduct for or relating to the protection of
health, safety or the environment, including, but not limited to, the following
statutes as now written and amended, and as amended hereafter: the Federal
Water Pollution Control Act, as codified in 33 U.S.C. § 1251 et seq., the Clean
Air Act, as codified in 42 U.S.C. § 7401 et seq., the Toxic Substances Control
Act, as codified in 15 U.S.C. § 2601 et seq., the Solid Waste Disposal Act, as
codified in 42 U.S.C. § 6901 et seq., the Comprehensive Environmental Response,
Compensation and Liability Act, as codified in 42 U.S.C. § 9601 et seq., the
Emergency Planning and Community Right-to-Know Act of 1986, as codified in 42
U.S.C. §11001 et seq., and the Safe Drinking Water Act, as

 

18

 

codified in 42 U.S.C. §
300f et seq. and any related regulations, as well as all state and local
equivalents

 

“Environmental Lien”
means a Lien in favor of any Governmental Authority for (i) any liability under
foreign, federal, state or local environmental laws, regulations or orders of
any Government Authority or court, or (ii) damages arising from, or costs
incurred by such Governmental Authority in response to, a Release or threatened
Release of a Contaminant into the environment.

 

“Environmental Permits”
means all permits, licenses, certificates, registrations and approvals of
Governmental Authorities required by Environmental Laws or necessary for the
business of any Borrower or any Subsidiary of any Borrower.

 

“Equity Deferral Plan”
means the Company’s July 1, 1999 Equity Deferral Plan, as amended from time to
time.

 

“ERISA” means the
Employee Retirement Income Security Act of 1974, as from time to time amended.

 

“ERISA Affiliate”
means, with respect to any Person, any trade or business (whether or not incorporated)
which, together with such Person, is under common control as described in Section
414(c) of the Code,  is a member of
a controlled group, as defined in Section 414(b) of the Code, or is a
member of an affiliated service group as defined in Section 414(m) of
the Code which includes such Person. 
Unless otherwise qualified, all references to an “ERISA Affiliate” in
this Agreement shall refer to an ERISA Affiliate of Borrower or any Subsidiary.

 

“Eurocurrency Loan”
means any Loan bearing interest at a rate determined by reference to the
Eurocurrency Rate.

 

“Eurocurrency Rate”
means the offered quotation, if any, to first class banks in the New York
interbank market by DB for U.S. Dollar deposits of amounts in immediately
available funds comparable to the principal amount of the applicable Eurodollar
Loan to be made or continued by DB for which the Eurocurrency Rate is being
determined with maturities comparable to the Interest Period for which such
Eurocurrency Rate will apply as of approximately 10:00 A.M. (New York City
time) on the applicable Interest Rate Determination Date.  The determination of the Eurocurrency Rate
by Administrative Agent shall be conclusive and binding on Borrowers absent
manifest error.

 

“Eurocurrency Reserve
Rate” means, with respect to each day during each Interest Period
pertaining to a Eurocurrency Loan, a rate per annum determined for such day in
accordance with the following formula (rounded upwards, if necessary, to the
nearest 1/100th of 1%):

 

	
  Eurocurrency
  Rate

  
	
  1.00
  - Eurocurrency Reserve Requirements

  

 

19

 

“Eurocurrency Reserve
Requirements” means, for any day as applied to a Eurocurrency Loan, the
aggregate (without duplication) of the maximum rates (expressed as a decimal
fraction) of reserve requirements in effect on such day (including, without
limitation, basic, supplemental, marginal and emergency reserves under any
regulations of the Board or other Governmental Authority having jurisdiction
with respect thereto) dealing with reserve requirements prescribed for
Eurocurrency funding (currently referred to as “Eurocurrency liabilities” in
Regulation D of the Board).

 

 “Eurodollar Loan” means any
Eurocurrency Loan in Dollars.

 

“Event of Default”
has the meaning assigned to that term in Section 10.1.

 

“Excluded Service
Contract” means any Contract, agreement or invoice between a Credit Party
and an Obligor providing solely for the rendering of (i) waste water treatment
services, (ii) electrical or other utility services or (iii) plant operating
(excluding tolling, processing or other similar arrangements or services),
marketing and administrative services, in each case, by such Credit Party to
such obligor.

 

“Existing Obligations”
shall have the meaning assigned to that term in Section 6.5(d).

 

“Facility” means
any of the credit facilities established under this Agreement.

 

“Facing Bank”
means DB or any other Lender satisfactory to DB and the Funds Administrator.

 

“Federal Bankruptcy
Code” means the federal bankruptcy code of the USA codified in Title 11 of
the United States Code.

 

“Federal Funds Rate”
means on any one day, the rate per annum equal to the weighted average (rounded
upwards, if necessary, to the nearest 1/100th of 1%) of the rate on overnight
federal funds transactions with members of the Federal Reserve System only
arranged by federal funds brokers, as published as of such 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 DB from three
federal funds brokers of recognized standing selected by DB.

 

“Finance Charges”
means, for any Receivable, any finance, interest, late or other charges owing
by an Obligor with respect to such Receivable.

 

“Finance Subsidiary”
means any Restricted Subsidiary existing on the date of this Agreement or
subsequently formed in accordance with the terms of this Agreement, (i) which
is a special purpose entity which does not engage in any business other than
borrowing funds from Borrower and lending funds to Restricted Subsidiaries
pursuant to Pledged Intercompany Notes pursuant to documentation satisfactory
to Administrative Agent with all rights of the Finance Subsidiary under such
documentation pledged to the Collateral Agent in a manner satisfactory to
Administrative Agent, (ii) which has provisions in its articles of
incorporation satisfactory to

 

20

 

Administrative Agent and
(iii) all of the Capital Stock of which is pledged by the applicable Credit
Party to the Collateral Agent on behalf of the Lenders, pursuant to the
Security Documents.

 

“First Mortgage Notes”
means all of the outstanding 11% First Mortgage Notes due 2004 of Huntsman
Petrochemical, issued pursuant to that certain Indenture between the Company
and the United States Trust Company of New York, a New York corporation, as
trustee, dated as of April 15, 1994, as amended, supplemented, restated or
otherwise modified.

 

“Fiscal Quarter”
has the meaning assigned to such term in Section 7.11.

 

“Fiscal Year” has
the meaning assigned to such term in Section 7.11.

 

 “Foreign Subsidiary” means any
Restricted Subsidiary of a Borrower that (A) is incorporated under the laws of
a jurisdiction other than any State of the USA, the District of Columbia or any
territory or possession of the USA and (B) maintains a majority of its assets
outside the USA; provided, however, that Huntsman International
Sales Corporation shall be a Foreign Subsidiary for so long as it is treated as
a foreign subsidiary under Section 956 of the Code.

 

“Funds Administrator”
means Huntsman Company LLC in its capacity as borrowing agent and funds
administrator for the Borrowers hereunder and under each of the other Loan
Documents.

 

“GAAP” means
generally accepted accounting principles in the USA as in effect from time to
time.

 

“GOF” means Matlin
Patterson Global Opportunities Partners L.P. (f/k/a CSFB Global Opportunities
Partners L.P.) by its investment advisor Matlin Patterson Global Advisers LLC
(f/k/a CSFB Global Advisers LLC)

 

“GOF Bonds” means
Senior Subordinated Notes and Polymers Senior Notes held from time to time by
GOF immediately prior to the Closing Date. 
For purpose of this Agreement, all Senior Subordinated Notes and
Polymers Senior Notes held from time to time by CPH  or its Affiliate shall be
deemed to be GOF Bonds.

 

“GOF Restructuring
Agreement” has the meaning assigned to that term in Section 5.1(p).

 

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

 

“Guarantee Obligations”
means, as to any Person, without duplication, any direct or indirect obligation
of such Person guaranteeing or intended to guarantee any Indebtedness,
dividend, Capitalized Lease or Operating Lease, any other lease or other
obligation (“primary obligations”) of any other Person (the “primary obligor”)
in any manner, whether directly or

 

21

 

indirectly, including,
without limitation, any obligation of such Person, whether or not
contingent:  (i) to purchase any such
primary obligation or any property constituting direct or indirect security
therefor;  (ii) to advance or supply
funds (a) for the purchase or payment of any such primary obligation, or (b) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor; (iii) to purchase
property, securities or services primarily for the purpose of assuring the
owner of any such primary obligation of the ability of the primary obligor to
make payment of such primary obligation; or 
(iv) otherwise to assure or hold harmless the owner of such primary
obligation against loss in respect thereof provided, however,
that the term Guarantee Obligations shall not include endorsements of
instruments for deposit or collection in the ordinary course of business.  The amount of any Guarantee Obligation at
any time shall be deemed to be an amount equal to the lesser at such time of
(x) the stated or determinable amount of the primary obligation in respect of
which such Guarantee Obligation is made or (y) the maximum amount for which
such Person may be liable pursuant to the terms of the instrument embodying
such Guarantee Obligation; or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof.

 

“Headquarters
Mortgage Loan Documents” means a mortgage or deed of trust, assignment of
rents and leases and other customary mortgage loan documents entered into by
Huntsman Headquarters Corporation, a Utah corporation, in connection with the
mortgaging of the building located at 500 Huntsman Way, Salt Lake City, Utah
and any agreements or documents entered into by Huntsman Headquarters
Corporation evidencing the renewal, replacement or refinancing of the
Indebtedness governed thereby to the extent such Indebtedness is permitted by Section
8.2(e).

 

“Hedging Agreement”
means any Interest Rate Agreement, Currency Agreement, commodity purchase or
option agreement or commodity price hedging agreement or other hedging
arrangement.

 

“HIH” means
Huntsman International Holdings, LLC, a Delaware limited liability company.

 

“HIH Unit Transfer”
shall mean (a) the dividend of one common unit of HIH (the “Transferred Unit”)
by HSCC to HSCHC, the dividend of the Transferred Unit from HSCHC to the
Company, and the dividend of the Transferred Unit from the Company to Holdco II
or (b) the transfer of the Transferred Unit from HSCC to Holdco II; provided,
however, that (i) such dividends or transfer shall only take place on the
Business Day prior to the payment of the Alta Interest Purchase Price (as
defined in the ICI Agreement) pursuant to the ICI Agreement, (ii) the
Transferred Unit shall at all times remain subject to the pledge in favor of
the Collateral Agent and (iii) the Transferred Unit shall, promptly (a) be
contributed from Holdco II to Company, from Company to HSCHC, and from HSCHC to
HSCC or (b) transferred from Holdco II to HSCC, in each case pursuant to such
documentation as may be satisfactory in form and substance to Administrative
Agent.

 

“Historical Financial
Statements” means each of the financial statements of the Company or its
Subsidiaries set forth on Schedule 6.5(a) hereto.

 

22

 

“Holdco Agreement”
has the meaning assigned to such term in Section 5.1(a)(viii) of this
Agreement.

 

“Holdco I” means
Huntsman Holdings, LLC, a Delaware limited liability company.

 

“Holdco II” means
HMP Equity Holdings Corporation, a Delaware corporation.

 

“Horizon Subordination
Agreement” has the meaning given thereto in Section 5.1(a)(ix) of
this Agreement.

 

“Horizon Subordinated
Note” means that certain Amended and Restated Subordinated Promissory Note
dated July 2, 2001 made by Borrower and payable to the order of Horizon
Ventures, L.C., a Utah limited liability company, as amended or modified in
accordance with the terms hereof.

 

“HSCC” means
Huntsman Specialty Chemicals Corporation, a Delaware corporation.

 

“HSCHC” means
Huntsman Specialty Chemicals Holdings Corporation, a Utah corporation.

 

“HSCC Agreement”
means that certain letter agreement dated as of the date hereof by and among
the Company, HSCC, the Collateral Agent and the Term Collateral Agent, as
amended, modified or supplemented from to time.

 

“HSCC Subsidiary
Guarantee Agreement” has the meaning given thereto in Section
5.1(a)(iii)(B).

 

“Huntsman EPS”
means Huntsman Expandable Polymers Company, LC, a Utah limited liability
company.

 

“Huntsman Fuels”
means Huntsman Fuels, L.P., a Texas limited partnership.

 

“Huntsman Group”
has the meaning given thereto in the definition of Change of Control in Section
1.1.

 

“Huntsman
International Trading Corporation” means Huntsman International Trading
Corporation, a Delaware corporation.

 

“Huntsman
Petrochemical” means Huntsman Petrochemical Corporation, a Delaware
corporation.

 

“Huntsman Polymers
Non-Cash Charge” means, for any period of four consecutive Fiscal Quarters
that includes the last Fiscal Quarter of 2001, the one time, actual non-cash
write down charge incurred in the last Fiscal Quarter of 2001 in connection
with Polymers asset write-downs.

 

23

 

“ICI” means ICI
Alta, Inc., a Delaware corporation.

 

“ICI Agreement”
means the Sale and Purchase Agreement dated as of June 14, 2002, by and among
Imperial Chemical Industries PLC, ICI Americas Inc., ICI, ICI Finance PLC, BNAC
Inc. and GOF, as the same may be amended in accordance with the terms of this
Agreement.

 

“Indebtedness”
means, as applied to any Person (without duplication):

 

(i)            all
indebtedness of such Person for borrowed money;

 

(ii)           the
deferred and unpaid balance of the purchase price of assets or services (other
than trade payables and other accrued liabilities incurred in the ordinary
course of business that are not overdue by more than 90 days unless being
contested in good faith) which purchase price is (a) due more than six months
from the date of incurrence of the obligation in respect thereof or (b)
evidenced by a note or a similar instrument;

 

(iii)          all Capitalized Lease Obligations;

 

(iv)          all
indebtedness secured by any Lien (other than Customary Permitted Liens) on any
property owned by such Person, whether or not such indebtedness has been
assumed by such Person or is nonrecourse to such Person;

 

(v)           notes
payable and drafts accepted representing extensions of credit whether or not
representing obligations for borrowed money (other than such notes or drafts
for the deferred purchase price of assets or services which does not constitute
Indebtedness pursuant to clause (ii) above);

 

(vi)          indebtedness
or obligations of such Person, in each case, evidenced by bonds, notes or
similar instruments;

 

(vii)         the face amount of all letters of credit and
bankers’ acceptances issued for the account of such Person, and without
duplication, all drafts drawn thereunder other than, in each case, commercial
or standby letters of credit or the functional equivalent thereof issued in
connection with performance, bid or advance payment obligations incurred in the
ordinary course of business, including, without limitation, performance
requirements under workers compensation or similar laws;

 

(viii)        all obligations of such Person under Hedging
Agreements;

 

(ix)           Guarantee
Obligations of such Person;

 

(x)            the
aggregate outstanding amount of Receivables Facility Attributed Indebtedness or
the gross proceeds from any similar transaction, regardless of whether such
transaction is effected without recourse to such Person or in a manner that

 

24

 

would
not otherwise be reflected as a liability on a balance sheet of such Person in
accordance with GAAP; and

 

(xi)           the
principal balance outstanding under any synthetic lease, tax retention,
operating lease, off balance sheet loan or similar off balance sheet financing
product to which such Person is a party, where such transaction is considered
borrowed money indebtedness for tax purposes but is classified as an operating
lease in accordance with GAAP.

 

provided,
however, notwithstanding the foregoing, “Indebtedness” shall not include
deferred taxes or unsecured indebtedness of any Borrower and/or such Borrower’s
Restricted Subsidiaries incurred to finance insurance premiums in a principal
amount not in excess of the casualty and other insurance premiums to be paid by
any Borrower and/or such Borrower’s Restricted Subsidiaries for a three year
period beginning on the date of any incurrence of such indebtedness.

 

“Initial Public
Offering” means the initial public offering of the common equity of the
Company or an entity (“Issuer”) of which the Company is a Wholly Owned
Subsidiary.

 

“Intercompany
Indebtedness” means, Indebtedness of the Company or any of the Company’s
Restricted Subsidiaries which, in the case of the Company, is owing to any
Subsidiary of the Company and which, in the case of any Subsidiary of the
Company, is owing to the Company or any of such its other Subsidiaries.

 

“Intercreditor
Agreement” means that certain Intercreditor Agreement, dated the date
hereof, by and among the Collateral Agent, the Term Collateral Agent and the
Company, in the form of Exhibit 1.3 to the Security Agreement, as amended,
modified or supplemented in accordance with the terms thereof.

 

“Interest Coverage
Ratio” has the meaning assigned to that term in Section 9.2 of this
Agreement.

 

“Interest Expense”
means, for the Company and its Restricted Subsidiaries with respect to any
period, the sum of (x) total interest expense for the Company and its
Restricted Subsidiaries to the extent reflected on a consolidated financial
statement of the Company, determined on a consolidated basis in accordance with
GAAP and (y) total cash dividends paid on any preferred Capital Stock of the
Company and its Restricted Subsidiaries to a Person other than the Company or
any of its Restricted Subsidiaries.  As
used in this definition, the term “interest” shall include, without limitation,
all interest and fees payable with respect to the Obligations under this
Agreement (other than fees which may be capitalized as transaction costs in
accordance with GAAP), any discount in respect of sales of accounts receivable
and/or related contract rights and the interest portion of Capitalized Lease
Obligations during such period, all as determined in accordance with GAAP.

 

“Interest Payment Date”
means (a)  as to any Base Rate Loan, the
last Business Day of each Fiscal Quarter to occur while such Loan is
outstanding and on the date all of the Loans hereunder are paid in full, (b) as
to any Eurocurrency Loan, the last day of the Interest

 

25

 

Period applicable thereto
and (c) as to any Eurocurrency Loan having an Interest Period longer than three
months, at the end of each three month anniversary of the first day of the
Interest Period applicable thereto; provided, however, that, in
addition to the foregoing, each of (x) the date upon which the Revolving
Commitment has been terminated and the Loans have been paid in full and (y) the
Commitment Termination Date shall be deemed to be an “Interest Payment Date”
with respect to any interest which is then accrued hereunder.

 

“Interest Period”
means with respect to any Eurocurrency Loan, the period commencing on the
Business Day such Loan is disbursed or continued (or on the date on which any
Base Rate Loan is converted to a Eurodollar Loan) and ending on the date which
is one (or such shorter period as may be agreeable to the Administrative Agent),
two, three or six months thereafter, as selected by the Funds Administrator in
an appropriate Notice of Borrowing or Notice of Conversion or Continuation;

 

provided
that:

 

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

 

(ii)           any
Interest Period pertaining to a Eurocurrency Loan that begins on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of the calendar month which is one, two,
three or six months after the calendar month in which such Interest Period
began; and

 

(iii)          no Interest Period for any Loan shall extend
beyond the Commitment Termination Date.

 

“Interest Rate
Agreement” means any interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate futures contract,
interest rate option contract or other similar agreement or arrangement to
which a Borrower or any Restricted Subsidiary is a party, designed to protect
such Borrower or Restricted Subsidiary against fluctuations in interest rates.

 

“Interest Rate
Determination Date” means the date for calculating the Eurocurrency Rate
for an Interest Period, which date shall be the second Business Day prior to
the first day of the related Interest Period for such Loan.

 

“IRIC” means
International Risk Insurance Company, a Vermont corporation.

 

“Inventory” of a
Person means, inclusively, all inventory as defined in the Uniform Commercial
Code and all goods, merchandise and other personal property wherever located,
now owned or hereafter acquired of every kind or description which are held for
sale or 

 

26

 

lease or are furnished or
to be furnished under a contract of service or are raw materials,
work-in-process or materials used or consumed or to be used or consumed in
business.

 

“Investment”
means, as applied to any Person, (i) any direct or indirect purchase or other
acquisition by that Person of, or a beneficial interest in, Securities of any
other Person, or a capital contribution by that Person to any other Person,
(ii) any direct or indirect loan or advance to any other Person (other than
prepaid expenses or accounts receivable created or acquired in the ordinary
course of business), including all Indebtedness to such Person arising from a
sale of property by such person other than in the ordinary course of its
business or (iii) any purchase by that Person of all or a significant part of
the assets of a business conducted by another Person (including by way of
merger, consolidation or amalgamation). 
The amount of any Investment by any Person on any date of determination
shall be the acquisition price of the gross assets acquired (including any
liability assumed by such Person to the extent such liability would be
reflected on a balance sheet prepared in accordance with GAAP) plus all
additional capital contributions or purchase price paid in respect thereof,
without any adjustments for increases or decreases in value, or write-ups,
write-downs or write-offs with respect to such Investment minus the amount of
all cash returns of principal or capital thereon, cash dividends thereon and
other cash returns on investment thereon or liabilities expressly assumed by
another Person (other than the Company or another Subsidiary of the Company) in
connection with the sale of such Investment. 
Whenever the term “outstanding” is used in this Agreement with reference
to an Investment, it shall take into account the matters referred to in the
preceding sentence.

 

“IRS” means the
United States Internal Revenue Service, or any successor or analogous
organization.

 

“LC Commission”
has the meaning assigned to that term in Section 2.3(f)(ii).

 

“LC Obligations”
means, at any time, an amount equal to the sum of (a) the aggregate Stated
Amount of the then outstanding Letters of Credit and (b) the aggregate amount
of drawings under Letters of Credit which have not then been reimbursed
pursuant to Section 2.3(c).  The
LC Obligation of any Revolving Lender at any time shall mean its Revolving Pro
Rata Share of the aggregate LC Obligations outstanding at such time.

 

“Lender” and “Lenders”
have the respective meanings assigned to those terms in the preamble to this
Agreement and shall include any other Person which becomes a Lender pursuant to
Section 13.9.

 

“Lending Office”
means, with respect to each Lender, the office specified under such Lender’s
name on the signature page hereto, or on the signature page to any Assignment
and Assumption Agreement, with respect to each Letter of Credit or Type of
Loan, as the case may be, or such other office as such Lender may designate in
writing from time to time to the Funds Administrator and Administrative Agent
with respect thereto.

 

“Letter of Credit
Amendment” has the meaning assigned to that term in Section 2.3(b).

 

27

 

“Letter of Credit
Payment” means, as applicable (a) all payments made by Facing Bank pursuant
to either a draft or demand for payment under a Letter of Credit or (b) all
payments made by Lenders having Revolving Commitments to Facing Bank in respect
thereof (whether or not in accordance with their Revolving Pro Rata Share).

 

“Letter of Credit
Request” has the meaning assigned to that term in Section 2.3(b).

 

“Letters of Credit”
means all Standby Letters of Credit issued pursuant to this Agreement, and
“Letter of Credit” means any one of such Letters of Credit.

 

“Leverage Ratio”
has the meaning as defined in Section 9.1 of this Agreement.

 

“Lien” means (i)
any judgment lien or execution, attachment, levy, distraint or similar legal
process and (ii) any mortgage, pledge, hypothecation, collateral assignment, security
interest, encumbrance, lien, charge or deposit arrangement (other than a
deposit to a Deposit Account in the ordinary course of business and not
intended as security) of any kind (including, without limitation, any
conditional sale or other title retention agreement or lease in the nature
thereof, any agreement to give any of the foregoing, any filing or agreement or
authorization to file a financing statement as debtor under the Uniform
Commercial Code or any similar statute (other than (x) filings for which an
agreement to release such statement has been obtained and delivered to
Administrative Agent, (y) filings improperly made against a Borrower or any of
its Subsidiaries without their consent or (z) filings to reflect ownership by a
third party of property leased or consigned to a Borrower or any of its
Subsidiaries under a lease or consignment agreement which is not in the nature
of a conditional sale or title retention agreement, or any sale of receivables
with recourse against the seller or any Affiliate of the seller).

 

“Loan” means an
extension of credit by a Lender pursuant to Article II, and “Loans”
means all of such Loans by all Lenders collectively.

 

“Loan Documents”
means, collectively, this Agreement, the Subsidiary Guarantee Agreements, the
Notes, each Security Document, each Letter of Credit, the Holdco Agreement, the
HSCC Agreement and all other agreements, instruments and documents executed in
connection therewith, in each case as the same may at any time be amended,
supplemented, restated or otherwise modified and in effect.

 

 “Lock-Box” means each post office box
or bank box listed on Exhibit 1.1(b), as adjusted pursuant to Section
11.1.

 

“Lock-Box
Account” means each account pledged to the Collateral Agent at a Lock-Box
Bank for the purpose of receiving, collecting or concentrating Collections.

 

“Lock-Box Bank”
means each of the banks set forth in Exhibit 1.1(b), as adjusted
pursuant to Section 11.1.

 

28

 

“Lock-Box Letter”
means a letter with respect to the Lock-Boxes and/or Lock-Box Accounts in
substantially the form of Exhibit 1.1(c) (with such changes therein as
are acceptable to Administrative Agent) between the applicable Borrower and the
applicable Lock-Box Bank at which such Lock-Box and/or Lock-Box Account are
maintained, together with an acknowledgment thereto executed by such Lock-Box
Bank and the Collateral Agent.

 

“Management
Fees” means for any period, all management fees or similar compensation,
excluding amounts representing reimbursement of out-of-pocket expenses incurred
in the ordinary course of business in connection with the performance of
management services.

 

“Master
Collection Account” means an account established pursuant to Section
11.1 which is maintained by the Collateral Agent, for the benefit of the
Secured Parties, and to which all Collections received in any Lock-Box or
Lock-Box Account are to be remitted. 
The initial Master Collection Account shall be account no. 00-416-540 at
Deutsche Bank Trust Company Americas.

 

“Master Collection
Account Agreement” has the meaning assigned to that term in Section 11.1.

 

“Master Collection
Account Balance” shall mean the amount of funds on deposit in the Master
Collection Account as of 5:00 P.M. (New York City time) on any Business Day.

 

“Material Adverse
Effect” means a material adverse effect on (a) the business, condition
(financial or otherwise), assets, liabilities or operations of the Company and
its Restricted Subsidiaries taken as a whole, (b) the ability of any Credit
Party to perform its respective obligations under any Loan Document to which it
is a party or (c) the validity or enforceability of this Agreement or any of
the Security Documents or the rights or remedies of Administrative Agent and
the Lenders hereunder or thereunder.

 

“Material Agreement”
means (i) any Contractual Obligation, the breach of which or the failure to
maintain would be reasonably likely to result in a Material Adverse Effect and
(ii) any material Contractual Obligation entered into in connection with an
Acquisition.

 

“Material Subsidiary”
means any Restricted Subsidiary of the Company, the Consolidated Total Assets
of which were more than 2% of the Company’s Consolidated Total Assets as of the
end of the most recently completed Fiscal Year of the Company for which audited
financial statements are available; provided that, in the event the
aggregate of the Consolidated Total Assets of all Restricted Subsidiaries that
do not constitute Material Subsidiaries exceeds 5% of the Company’s Consolidated
Total Assets as of such date, the Funds Administrator (or Administrative Agent,
in the event the Funds Administrator has failed to do so within 10 days of
request therefor by Administrative Agent) shall, to the extent necessary,
designate sufficient Restricted Subsidiaries to be deemed to be “Material
Subsidiaries” to eliminate such excess, and such designated Restricted
Subsidiaries shall thereafter constitute Material Subsidiaries.  Assets of Foreign Subsidiaries shall be
converted into Dollars at the rates

 

29

 

used for purposes of
preparing the consolidated balance sheet of the Company included in such
audited financial statements.

 

“Minimum Senior Debt
Prepayment” shall mean one or more prepayments of the principal amount of
outstanding Term Loans under the Amended and Restated Credit Agreement which
individually or in the aggregate equal at least $350,000,000 made with the net
proceeds of equity or Permitted Junior Debt.

 

“MIOA” means the
Membership Interest Option Agreement, by and among Imperial Chemical Industries
PLC, ICI and HSCC, dated as of November 2, 2001, as amended and restated as of
December 20, 2001, as the same may be amended in accordance with the terms of
this Agreement.

 

“Monthly Report”
has the meaning assigned to that term in Section 11.2.

 

“Moody’s” means
Moody’s Investors Service, Inc. or any successor to the rating agency business
thereof.

 

“Mortgaged Property”
means, collectively, all of the properties of the Borrowers and the
Subsidiaries of the Borrowers defined as “Mortgaged Property” in each of the
respective Mortgages including, without limitation, the properties listed on Schedule
6.21(c) identified as Mortgaged Property and any other property which
becomes Mortgaged Property pursuant to Section 7.10.

 

“Mortgage Policies”
has the meaning assigned to such term in Section 5.1(b)(vi).

 

 “Mortgages” means, collectively, (i)
the mortgage and leasehold mortgages in form and substance satisfactory to
Administrative Agent each dated as of the Closing Date or a date prior thereto
and executed by a Credit Party, as mortgagor, in favor of Collateral Agent (or
its designee) for the benefit of the Lenders, as mortgagee,  relating to the Mortgaged Property, and (ii)
any other mortgage, deed of trust or similar agreement executed by a Credit
Party pursuant to which such Person shall have granted a mortgage to Collateral
Agent (or its designee) for the benefit of the Lenders, as each such agreement
may at any time be amended, supplemented, restated or otherwise modified in
accordance with the terms thereof and in effect.

 

“Multiemployer Plan”
means any plan described in Section 4001(a)(3) of ERISA to which contributions
are or have within the preceding six years, been made, or are or were, within
the preceding six years, required to be made, by any Borrower or any of such
Borrower’s ERISA Affiliates or any Subsidiary of such Borrower or ERISA
Affiliates to any such Subsidiary.

 

“Net Interest Expense”
means, for the Company and its Restricted Subsidiaries with respect to any
period, Interest Expense net of interest income on Cash and Cash Equivalents,
net of amounts received under Interest Rate Agreements, to the extent permitted
hereunder.

 

30

 

“Net Receivables
Balance” shall mean, as determined by Administrative Agent in good faith,
the result of (a) the Outstanding Balance of all Eligible Receivables (without
duplication for Uninvoiced Receivables that have become the subject of an
invoice) minus (b) the sum of (i) sales, excise or similar taxes
included in the amount thereof and (ii) returns, discounts, claims, credits,
charges and allowances of any nature at any time issued, owing, granted,
outstanding, available or claimed with respect thereto minus (c) the
Dilution Reserve.

 

“Net Sale Proceeds”
means, with respect to any Asset Disposition the aggregate cash payments
received by any Borrower, HSCC, HSCHC or any Restricted Subsidiary from such
Asset Disposition (including, without limitation, cash received by way of
deferred payment pursuant to a note receivable, conversion of non-cash
consideration, cash payments in respect of purchase price adjustments or
otherwise, but only as and when such cash is received) minus the direct costs
and expenses incurred in connection therewith (including in the case of any
Asset Disposition, the payment of the outstanding principal amount of, premium,
if any, and interest on any Indebtedness (other than hereunder) required to be
repaid as a result of such Asset Disposition), and any provision for taxes in
respect thereof made in accordance with GAAP provided that such expenses
shall only include taxes to the extent that taxes are payable in cash in the
current year or the following year as a result of such Asset Disposition.  Any proceeds received in a currency other
than Dollars shall, for purposes of the calculation of the amount of Net Sale
Proceeds, be in an amount equal to the dollar equivalent as of the date of
receipt thereof by any Borrower or any Restricted Subsidiary of such Borrower.

 

“Note” means any
of the Revolving Notes, and “Notes” means all of such Notes collectively.

 

“Notice of Borrowing”
means a notice given by the Funds Administrator to Administrative Agent
pursuant to Section 2.1(d), substantially in the form of Exhibit
2.1(d) attached hereto.

 

“Notice of Conversion
or Continuation” has the meaning assigned to that term in Section 2.2(b).

 

“Obligations”
means all liabilities and obligations of each Borrower and any Subsidiary of a
Borrower now or hereafter arising under this Agreement and all of the other
Loan Documents, whether for principal, interest, fees, expenses, indemnities or
otherwise, and whether primary, secondary, direct, indirect, contingent, fixed
or otherwise (including obligations of performance).

 

“Obligor” means,
for any Receivable, the Person obligated to make payments on such Receivable or
any guarantor of such obligation.

 

“Operating Lease”
of any Person, means any lease (including, without limitation, leases which may
be terminated by the lessee at any time) of any property (whether real,
personal or mixed) by such Person, as lessee, which is not a Capitalized Lease.

 

31

 

“Organizational
Documents” means, with respect to any Person, such Person’s articles or
certificate of incorporation, bylaws, partnership agreement, limited liability
company agreement, joint venture agreement or other similar governing documents
and any document setting forth the designation, amount and/or relative rights,
limitations and preferences of any class or series of such Person’s Capital
Stock.

 

“Original Credit
Agreement” has the meaning assigned such term in the Amended and Restated
Credit Agreement.

 

 “Outstanding Balance” means, for any
Receivable, the outstanding principal balance of such Receivable, including, in
the case of Receivables originated by Huntsman Petrochemical only, demurrage,
detention and other freight charges, and excluding, in all cases, any Finance
Charges.

 

 “Participants” has the meaning
assigned to that term in Section 13.8(b).

 

“Payment Office”
means (a) with respect to Administrative Agent, 233 South Wacker Drive, Suite
8400, Chicago, Illinois 60606, or such other address as Administrative Agent
may from time to time specify in accordance with Section 13.3.

 

“PBGC” means the
Pension Benefit Guaranty Corporation created by Section 4002(a) of ERISA.

 

“Permitted Discretion”
shall mean Administrative Agent’s judgment exercised in good faith based upon
its consideration of any factor which Administrative Agent believes in good
faith: (a) will or could reasonably be expected to adversely affect the value
of any Collateral, the enforceability or priority of the Collateral Agent’s
Liens thereon or the amount which Administrative Agent, the Lenders or any
Facing Bank would be likely to receive (after giving consideration to delays in
payment and costs of enforcement) in the liquidation of such Collateral; (b)
suggests that any collateral report or financial information delivered to Administrative
Agent by any Person on behalf of any Borrower is incomplete, inaccurate or
misleading in any material respect; (c) materially increases the likelihood of
a bankruptcy, reorganization or other insolvency proceeding involving any
Credit Party or any of the Collateral; or (d) creates or reasonably could be
expected to create an Event of Default or Unmatured Event of Default.  In exercising such judgment, Administrative
Agent may consider such factors already included in or tested by the definition
of Eligible Receivable and Eligible Inventory, as well as any of the
following:  (i) the changes in
collection history and dilution with respect to the Receivables; (ii) changes
in any concentration of risk with respect to the Receivables or Inventory; (iii)
changes in demand for, pricing of, or product mix of Inventory; and (iv) any
other factors that change the credit risk of lending to the Borrowers on the
security of the Credit Parties’ Receivables and Inventory.  The burden of establishing lack of good
faith hereunder shall be on the Borrowers.

 

“Permitted Investments”
shall mean any of the following (a) investments in money market funds rated in
the highest investment category by Moody’s and S&P and (b) any other
over-night investment permitted by the Administrative Agent.

 

32

 

“Permitted Junior Debt”
means Indebtedness which is structured so as to be junior to the obligations
under the Senior Secured Credit Facilities (including the Obligations) in that it
is either (i) unsecured and subordinated to the Obligations, (ii) unsecured or
(iii) secured with liens that are expressly subordinated to the liens securing
the Obligations hereunder, in each case on terms and conditions and in form and
substance satisfactory to Administrative Agent; provided, that (a) such
terms and conditions shall not be more restrictive to the Borrowers than those
set forth herein and shall be at or below a market interest rate for comparable
instruments and (b) in no event shall any scheduled principal payments be
required to be made prior to March 31, 2007.

 

“Permitted Liens”
has the meaning assigned to that term in Section 8.1.

 

“Permitted Polymers
Notes Repurchase Amount” means proceeds of Permitted Junior Debt which are
permitted under Section 4.2(e) of the Amended and Restated Credit Agreement to
be used to purchase or retire Polymers Senior Notes; provided that the
Administrative Agent shall create a reserve against the Borrowing Base equal to
such amount pending the purchase or retirement of such Polymers Senior Notes or
the prepayment of Indebtedness under the Amended and Restated Credit Agreement
as required by Section 4.2(e) thereof.

 

“Permitted Transfer”
means from and after the date that the Term B Loan (as defined in the Amended
and Restated Credit Agreement) has been pre-paid in full, the sale or transfer
by GOF or the Huntsman Group of up to 5% of the Capital Stock of Holdings I
held by such party as of the Closing Date and thereafter, upon the pledge by
HSCC of an additional 30% of HIH pursuant to Section 7.10(f) hereof, the
sale or transfer by GOF or the Huntsman Group of up to 15% in the aggregate of
the Capital Stock of Holdings I held by each such party as of the Closing Date.

 

“Permitted Turnaround
Capital Expenditures” means capital expenditures incurred on or prior to
December 31, 2003 not exceeding the amount specified on Schedule 1.1(d)
for the specific turnaround project identified on such Schedule.

 

“Person” means an
individual or a corporation, partnership, limited liability company, trust,
incorporated or unincorporated association, joint venture, joint stock company,
government (or an agency or political subdivision thereof) or other entity of
any kind.

 

“Plan” means any
plan described in Section 4021(a) of ERISA and not excluded pursuant to Section
4021(b) thereof, which is or has, within the preceding six years, been
established or maintained, or to which contributions are or have, within the
preceding six years, been made, by any Borrower or any of its ERISA Affiliates
or any Subsidiary of such Borrower or any ERISA Affiliates of such Subsidiary,
but not including any Multiemployer Plan.

 

“Plan Administrator”
has the meaning assigned to the term “administrator” in Section 3(16)(A) of
ERISA.

 

33

 

“Plan of
Reorganization” means that certain Debtors’ Joint Prepackaged Plan of
Reorganization dated as of July 15, 2002, as modified, supplemented or amended.

 

“Plan Sponsor” has
the meaning assigned to the term “plan sponsor” in Section 3(16)(B) of ERISA.

 

“Pledge Agreement”
means, once executed and delivered, the pledge agreement delivered pursuant to
Section 5.1(b)(v).

 

“Pledged Intercompany
Notes” means, collectively, the “Pledged Intercompany Notes” as defined in
the Security Agreement.

 

“Pledged Securities”
means, collectively, “Pledged Securities” as defined in the Security Agreement
or any other pledged securities under any Security Document.

 

“Polymers” means
Huntsman Polymers Corporation, a Delaware corporation, formerly known as Rexene
Corporation.

 

 “Polymers Senior Notes” means those
certain 11-3/4% Senior Notes due 2004 of Polymers issued pursuant to the
Amended and Restated Polymers Indenture.

 

“Preferred Stock”
means preferred Capital Stock of the Company which (i) is not convertible or
exchangeable into Indebtedness, (ii) may not, upon the occurrence of any event
or circumstance or otherwise by its terms, be required to be redeemed by the
Company or be redeemable at the option of the holder thereof, in each case, at
any time prior to March 31, 2007 and (iii) does not contain other terms (other
than customary market terms for preferred stock of similar companies) which
could reasonably be expected to adversely affect the interests of the Lenders.

 

“Pricing Grid”
shall mean, at any time with respect to any Eurocurrency Loan or Base Rate
Loan, as the case may be, the chart set forth below.  From and after any Start Date to and including corresponding End
Date, the Applicable Base Rate Margin and Applicable Eurocurrency Margin shall
be a percentage per annum equal to the applicable percentage per annum set
forth below if, as of the Test Date for such Start Date, the Company shall have
the Leverage Ratio specified: 

 

	
   

  	
   

  	
  Level 1

  	
   

  	
  Level 2

  	
   

  	
  Level 3

  	
   

  	
  Level 4

  	
   

  
	
  Leverage Ratio

  	
   

  	
  >7.50:1.00

  	
   

  	
  >5.60:1.00

  but

  <7.50:1.00

  	
   

  	
  >3.50:1.00

  but

  <5.60:1.00

  	
   

  	
  <3.50:1.00

  	
   

  
	
  Applicable Eurocurrency
  Margin

  	
   

  	
  3.50

  	
  %

  	
  3.25

  	
  %

  	
  3.00

  	
  %

  	
  2.75

  	
  %

  
	
  Applicable Base Rate
  Margin

  	
   

  	
  2.50

  	
  %

  	
  2.25

  	
  %

  	
  2.00

  	
  %

  	
  1.75

  	
  %

  

 

34

 

provided,
that, notwithstanding the foregoing, if the Borrowers shall fail to deliver the
financial statements that are required to be delivered pursuant to Section
7.1(a) or 7.1(b), from the date which is three Business Days after
the date on which such financial statements were so required to be delivered
until the date of actual delivery thereof, the Applicable Base Rate Margin and
Applicable Eurocurrency Margin shall be a percentage per annum equal to the
applicable percentage amount set forth above with respect to Level 1.  If a Default or an Event of Default shall
exist at the time any reduction in the Applicable Base Rate Margin and
Applicable Eurocurrency Margin is to be implemented, that reduction shall be
deferred until the date on which such Default or Event of Default is cured or
waived and at all times during the existence of such Default or Event of
Default, the Applicable Base Rate Margin and Applicable Eurocurrency Margin
shall be a percentage per annum equal to the applicable percentage amounts set
forth above with respect to Level 1.

 

“Pro Forma Balance
Sheet” shall have the meaning given such term in Section 6.5(e).

 

“Projections” has
the meaning assigned to that term in Section 6.5(f).

 

“Receivable” means
any indebtedness and other obligations now existing and hereafter arising owed
to, or any right to payment of, a Credit Party from, or on behalf of, an
Obligor (including, but not limited to Uninvoiced Receivables), whether
constituting an account, chattel paper, investment property, instrument or
general intangible, arising in connection with the sale or lease of inventory,
goods or merchandise or the rendering of services (other than the rendering of
management services and overhead sharing arrangements in the ordinary course
between a Credit Party and any Subsidiary of the Company) by such Credit Party,
including, Finance Charges, and freight, detention and demurrage charges with
respect thereto; provided, however, that the term “Receivable”
shall not include any such amounts arising under any Excluded Service
Contract.  Indebtedness and other
obligations of any Person arising from any one transaction, or represented by
an individual invoice or agreement, shall constitute a separate Receivable from
any Receivable arising from any other transaction.

 

“Receivables Facility
Attributed Indebtedness” at any time shall mean the aggregate net
outstanding amount theretofore paid in respect of the accounts receivable sold
or transferred as part of a bulk sale or financing of accounts receivable by
it.

 

“Records” means,
for any Receivable, all Contracts and other documents, books, records and other
information (including computer programs, tapes, disks, software and related
property and rights) relating to such Receivable or the related Obligor.

 

“Recovery Event”
means the receipt by a Borrower (or any of its Restricted Subsidiaries) of any
insurance or condemnation proceeds payable (i) by reason of any theft,

 

35

 

physical destruction or
damage or any other similar event with respect to any properties or assets of
any Borrower or any Restricted Subsidiary which are included in the computation
of the Borrowing Base, (ii) by reason of any condemnation, taking, seizing or
similar event with respect to any properties or assets of any Borrower or any
Restricted Subsidiary which are included in the computation of the Borrowing
Base and (iii) under any policy of insurance required to be maintained under Section
7.8 covering properties or assets of a Borrower or any Restricted
Subsidiary which are included in the computation of the Borrowing Base; provided,
however, that in no event shall payments made under business
interruption insurance constitute a Recovery Event.

 

 “Regulation D” means Regulation D of the
Board as from time to time in effect and any successor to all or a portion
thereof establishing reserve requirements.

 

“Related Accounts”
means, for any Receivable, all deposit accounts and investment accounts into
which any Collections or other proceeds of such Receivable are deposited
(including, but not limited to, all Lock-Box Accounts and the Master Collection
Account) and all monies and other funds, certificates, securities, other
instruments, general intangibles and other items credited thereto or
constituting investments thereof from time to time.

 

“Related Fund”
means, with respect to any Lender which is a fund, any other fund that invests
in bank loans and is administered or managed by the same investment advisor of
such Lender or by an Affiliate of such investment advisor.

 

“Related Security”
means, for any Receivable, all of the applicable Credit Party’s right, title
and interest in (a) the inventory, goods and merchandise (including any
returned or repossessed inventory, goods and/or merchandise) the sale or lease
of which by a Credit Party gave rise to such Receivable, and all insurance
contracts with respect thereto, (b) all other security interests or liens and
property subject thereto purporting to secure payment of such Receivable, together
with all financing statements signed by an Obligor describing any collateral
securing such Receivable, (c) all guaranties, letters of credit, indemnities,
warranties, insurance policies and proceeds and premium refunds thereof, and
other agreements or arrangements supporting or securing payment of such
Receivable, (d) all service contracts and other contracts and agreements
related to such Receivable, (e) all Records related to such Receivable, (f) the
Related Accounts, and (g) all proceeds of any of the foregoing.

 

“Release” means
release, spill, emission, leaking, pumping, pouring, emptying, dumping,
injection, deposit, disposal, discharge, dispersal, escape, leaching, or
migration into the indoor or outdoor environment or into or out of any property
of any Borrower or such Borrower’s Subsidiaries, or at any other location to
which any Borrower or any Subsidiary has transported or arranged for the
transportation of any Contaminant, including the movement of Contaminants
through or in the air, soil, surface water, groundwater or property of any
Borrower or such Borrower’s Subsidiaries or at any other location, including
any location to which any Borrower or any Subsidiary has transported or
arranged for the transportation of any Contaminant.

 

36

 

“Remedial Action”
means actions required to (i) clean up, remove, treat or in any other way
address Contaminants in the indoor or outdoor environment; (ii) prevent or
minimize the Release or substantial threat of a material Release of
Contaminants so they do not migrate or endanger or threaten to endanger public
health or welfare or the indoor or outdoor environment; or (iii) perform
pre-remedial or post-remedial studies and investigations and post-remedial
monitoring and care.

 

“Report Date”
means the fifteenth (15th) day of each month (or, if such day is not a Business
Day, the next Business Day); provided, however, that the first
Report Date shall be deemed to be the date of this Agreement.

 

“Reportable Event”
means a “reportable event” described in Section 4043(b) of ERISA or in the
regulations thereunder with respect to a Plan other than a reportable event for
which the 30-day notice requirement to the PBGC has been waived, any event
requiring disclosure under Section 4063(a) or 4062(e) of ERISA, receipt of a
notice of withdrawal liability with respect to a Multiemployer Plan pursuant to
Section 4202 of ERISA or receipt of a notice of reorganization or insolvency
with respect to a Multiemployer Plan pursuant to Section 4242 or 4245 of ERISA.

 

“Required Lenders”
means, as of the date of determination thereof, the Lenders having more than
50% of the Commitments of the Lenders at such time; provided that if the
Commitments shall have been terminated in full, “Required Lenders” means
Lenders holding more than 50% of the then aggregate unpaid principal amount of
the sum of the value of (i) the Loans plus (ii) the LC Obligations.

 

“Requirement of Law”
means, as to any Person, any law (including common law), treaty, rule or regulation
or judgment, decree, determination or award of an arbitrator or a court or
other Governmental Authority, including without limitation, any Environmental
Law, in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.

 

“Responsible Financial
Officer” means the Chief Financial Officer, principal accounting officer, a
financial vice president, Controller, Treasurer or Assistant Treasurer of the
Company.

 

“Responsible Officer”
means any of the Chairman of the Board of Directors, the President, any
Executive Vice President, Senior Vice President, the Controller, Chief
Financial Officer, Chief Restructuring Officer, any Vice President, the
Treasurer, or the Secretary or any other similar officer or position.

 

“Restricted Domestic
Subsidiary” means any Restricted Subsidiary which is also a Domestic
Subsidiary.

 

“Restricted Subsidiary”
means any Subsidiary of the Company that is not an Unrestricted Subsidiary.

 

37

 

“Restricted Subsidiary
Adjusted Earnings” means, for any applicable period, Consolidated Net
Income or Consolidated Net Loss of the Company and its Restricted Subsidiaries
plus, to the extent not included therein, and to the extent paid out of
retained or current earnings (and not constituting a return of capital), the
amount of cash dividends or distributions paid to the Company or a Restricted
Subsidiary from any Unrestricted Subsidiary or from any Person which is not a Subsidiary
during such period; provided that in computing Consolidated Net Income
or Consolidated Net Loss for purposes of this definition extraordinary gains or
losses shall be excluded.

 

“Restructuring Charges”
means (a) non-recurring non-cash restructuring charges pertaining to the
Transactions incurred on or prior to the Closing Date, (b) non-recurring cash
restructuring charges pertaining to the Transactions incurred on or prior to
the Closing Date in an aggregate amount not to exceed $20,000,000, and (c)
non-recurring restructuring charges incurred after the Closing Date pertaining
to the contemplated restructurings described in Schedule 1.1(e) in an
aggregate amount not to exceed the amounts set forth on Schedule 1.1(e)
for such restructuring.

 

“Revolving Commitment”
means, with respect to any Revolving Lender, the obligation of such Revolving
Lender to make Revolving Loans pursuant to Sections 2.2(a),  and 2.2(b) and to participate in
Letters of Credit pursuant to Section 2.5(d), as such commitment may be
adjusted from time to time pursuant to this Agreement, which commitment as of
the date hereof is the amount set forth opposite such Revolving Lender’s name
on Schedule 1.1(a) hereto under the caption “Amount of Revolving
Commitment” and “Revolving Commitments” means such commitments
collectively, which commitments as of the date hereof equal the amount of
$275,000,000.

 

“Revolving Lenders”
means those Lenders providing Revolving Commitments hereunder and shall include
any Person which becomes a Revolving Lender as contemplated by Section 13.8.

 

“Revolving Loan”
has the meaning assigned to such term in Section 2.2(a).

 

“Revolving Note”
has the meaning assigned to that term in Section 2.2(d).

 

“Revolving Pro Rata
Share” means, when used with reference to any Revolving Lender and any
described aggregate or total amount, an amount equal to the result obtained by
multiplying such described aggregate or total amount by a fraction the
numerator of which shall be such Revolving Lender’s Revolving Commitment and the
denominator of which shall be the aggregate Revolving Commitments outstanding
for all Revolving Lenders or, if no Revolving Commitments are then outstanding,
such Revolving Lender’s aggregate Revolving Loans to the total Revolving Loans
outstanding hereunder and when used with reference to any Revolving Lender’s
percent interest, such fraction.

 

“S&P” means
Standard & Poor’s Rating Services, a division of The McGraw-Hill Companies,
Inc., or any successor to the rating agency business thereof.

 

38

 

“Sale and Leaseback
Transaction” means any arrangement, directly or indirectly, whereby a
seller or transferor shall sell or otherwise transfer any real or personal
property and then or thereafter lease, or repurchase under an extended purchase
contract, conditional sales or other title retention agreement, the same or
similar property; provided, however, that a sale and leaseback by
a Borrower or any Restricted Subsidiary of railcars acquired after the date
hereof shall not constitute a “Sale and Leaseback Transaction” for purposes of
this Agreement.

 

“SEC” means the
Securities and Exchange Commission or any successor thereto.

 

“Secured Party”
has the meaning assigned to that term in the Security Agreement.

 

“Securities” means
any stock, shares, voting trust certificates, bonds, debentures, options,
warrants, notes, or other evidences of indebtedness, secured or unsecured,
convertible, subordinated or otherwise, or in general any instruments commonly
known as “securities” or any certificates of interest, shares or participations
in temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.

 

“Security Agreement”
has the meaning assigned to that term in Section 5.1(b)(ii) of this
Agreement.

 

“Security Documents”
means, collectively the Pledged Intercompany Notes, the Security Agreement, the
Subsidiary Guarantee Agreements, the Mortgages and all other agreements,
assignments, security agreements, instruments and documents executed in
connection therewith, including, without limitation, all pledge agreements,
charges and other instruments and documents executed in connection with the
granting of a security interest to the Collateral Agent in the Capital Stock of
any Foreign Subsidiary, in each case as the same may at any time be amended,
supplemented, restated or otherwise modified and in effect.  For purposes of this Agreement, “Security
Documents” shall also include all guaranties, security agreements, mortgages,
pledge agreements, collateral assignments, subordination agreements and other
collateral documents in the nature of any thereof entered into by the Company
or any Subsidiary of the Company after the date of this Agreement in favor of
the Collateral Agent for the benefit of the Lenders in satisfaction of the
requirements of this Agreement.

 

“Senior Secured Credit
Facilities” means the facilities evidenced by the Amended and Restated
Credit Agreement and the Agreement.

 

“Senior Subordinated
Notes” means those certain (i) 9-1/2% Senior Subordinated Notes of the
Company due 2007 and Senior Subordinated Floating Rate Notes of the Company due
2007, each issued pursuant to the applicable Amended and Restated Senior Notes
Indenture, and (ii) 9-1/2% Senior Subordinated Notes of the Company due 2007
issued pursuant to the Amended and Restated Senior Notes Indentures, in each
case, as outstanding after giving effect to the Transactions.

 

“Shareholder Loans”
has the meaning assigned to that term in Section 8.4.

 

“Standby Letters of
Credit” means any of the irrevocable standby letters of credit issued for
the joint and several account of Borrowers pursuant to this Agreement, in form

 

39

 

acceptable to the Facing
Bank, together with any increases or decreases in the Stated Amount thereof and
any renewals, amendments and/or extensions thereof.

 

“Start Date” shall
mean, with respect to any Applicable Margin Period, the first day of such
Applicable Margin Period.

 

“Stated Amount” or
“Stated Amounts” means with respect to any Letter of Credit, the stated
or face amount of such Letter of Credit to the extent available at the time for
drawing (subject to presentment of all requisite documents), as the same may be
increased or decreased from time to time in accordance with the terms of such
Letter of Credit.

 

“Subsidiary” of
any Person means any corporation, partnership (limited or general), limited
liability company, trust or other entity of which a majority of the stock (or
equivalent ownership or controlling interest) having voting power to elect a
majority of the board of directors (if a corporation) or to select the trustee
or equivalent controlling interest shall, at the time such reference becomes
operative, be directly or indirectly owned or controlled by such Person or one
or more of the other subsidiaries of such Person or any combination
thereof.  Unless otherwise qualified,
all references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer
to a Subsidiary or Subsidiaries of any Borrower.

 

“Subsidiary Guarantee
Agreement” has the meaning assigned to that term in Section 5.1(a)(iii).

 

“Subsidiary Guarantor”
means a Subsidiary of any Borrower that becomes a party to the Subsidiary
Guarantee Agreement.

 

“Tax Sharing Agreement”
means that certain tax sharing agreement dated as of the date hereof by and
between the Company and Holdco II, initially substantially in the form of Exhibit 5.1(g),
as amended or otherwise modified from time to time.

 

“Taxes” has the
meaning assigned to that term in Section 4.8(a).

 

“Term Collateral Agent”
means the Collateral Agent as such term is defined in the Amended and Restated
Credit Agreement

 

“Term Loan Obligations”
means the Obligations as such term is defined in the Amended and Restated
Credit Agreement.

 

“Test Date” shall
mean, with respect to any Start Date, the last day of the most recent fiscal
quarter of the Borrower ended immediately prior to such Start Date.

 

“Total Available
Revolving Commitment” means, at the time any determination thereof is made,
the sum of the respective Available Revolving Commitments of the Revolving
Lenders at such time.

 

40

 

 “Tranche” means a group of Loans of a
single Type as in effect on the Closing Date or thereafter converted or
continued by the Lenders on a single date and in the case of Loans other than
Base Rate Loans, as to which a single Interest Period is in effect.

 

“Transaction”
shall mean and include the transactions contemplated hereby.

 

“Transaction Documents”
means the Loan Documents and any other documents relating to the restructuring
of Borrowers’ outstanding debt.

 

“Transferee” has
the meaning assigned to that term in Section 13.8(d).

 

“Type” means as to
any Loan its nature as a Base Rate Loan or a Eurodollar Loan.

 

“Uniform Commercial
Code” means the Uniform Commercial Code as in effect from time to time in
the relevant jurisdiction.

 

“Uninsured Mortgaged
Properties” has the meaning assigned to such term in Section 5.1(b)(vi).

 

“Uninvoiced Receivable”
means an amount owed by an Approved Uninvoiced Customer to a Credit Party for
any products delivered to such Approved Uninvoiced Customer pursuant to a
Contract by barge, rail or metered pipeline and for which an invoice has not
yet been issued, but for which an invoice is issued within 5 Business Days
after the end of the month in which such products were delivered.

 

“Unmatured Event of
Default” means an event, act or occurrence which with the giving of notice
or the lapse of time (or both) would become an Event of Default.

 

“Unrestricted
Subsidiary” means any Subsidiary listed on Schedule 1.1(c) of this
Agreement and any Subsidiary thereof, any Subsidiary of HIH, or any Subsidiary
of a Borrower that at the time of formation shall be designated an Unrestricted
Subsidiary in an officer’s certificate signed by two Responsible Financial
Officers of the Company and into which, within ten (10) Business Days after
such formation, an existing Unrestricted Subsidiary is merged or combined; provided,
however, that, for purposes of this Agreement, HCPH Holdings Pty Limited
and Huntsman Chemical Australia Unit Trust shall be deemed to be Unrestricted
Subsidiaries of the Company.

 

“USA” means the
United States of America (including all states and political subdivisions
thereof).

 

“Weekly Report”
has the meaning assigned to that term in Section 11.3(b).

 

“Weighted Average Life
to Maturity” means, when applied to any Indebtedness at any date, the
number of years obtained by dividing (a) the then outstanding principal amount
of such Indebtedness into (b) the sum of the products obtained by multiplying
(x) the amount of each then remaining installment, sinking fund, serial
maturity or other required payments of

 

41

 

principal, including
payment at final maturity, in respect thereof by (y) the number of years
(calculated to the nearest one-twelfth) that will elapse between such date and
the making of such payment.

 

“Wholly-Owned Direct
Subsidiary” means with respect to any Person, any Subsidiary of such
Person, all of the outstanding shares of Capital Stock of which (other than
qualifying shares required to be owned by directors, or similar de minimis
issuances of Capital Stock to comply with Requirements of Law) are at the time
owned directly by such Person.

 

“Wholly-Owned Domestic
Subsidiary” means any Wholly-Owned Subsidiary which is also a Domestic
Subsidiary.

 

“Wholly-Owned
Subsidiary” means, with respect to any Person, any Subsidiary of such
Person, all of the outstanding shares of Capital Stock of which (other than
qualifying shares required to be owned by directors, or similar de minimis
issuances of Capital Stock to comply with Requirements of Law) are at the time
owned directly or indirectly by such Person and/or one or more Wholly-Owned
Subsidiaries of such Person; provided, however, that for purposes
of this Agreement, Nitroil Vegyipari Termeló-Fejlesztró Résvénytátság and its
Wholly-Owned Subsidiaries shall be deemed to be “Wholly-Owned Subsidiaries” of
the Company.

 

 “written” or “in writing” means
any form of written communication or a communication by means of telecopier
device, or authenticated telex, telegraph or cable.

 

The foregoing definitions
shall be equally applicable to both the singular and plural forms of the
defined terms.  In the computation of
periods of time from a specified date to a later specified date, the word
“from” means “from and including” and the words “to” and “until” each mean “to
but excluding.”  The words “herein,”
“hereof” and words of similar import as used in this Agreement shall refer to
this Agreement as a whole and not to any particular provision in this
Agreement.  References to “Articles”,
“Sections”, “paragraphs”, “Exhibits” and “Schedules” in this Agreement shall
refer to Articles, Sections, paragraphs, Exhibits and Schedules of this
Agreement unless otherwise expressly provided; references to Persons include
their respective permitted successors and assigns or, in the case of
governmental Persons, Persons succeeding to the relevant functions of such
persons; and all references to statutes and related regulations shall include
any amendments of same and any successor statutes and regulations.

 

1.2           Accounting Terms; Financial
Statements.

 

(a)           All accounting terms
used herein but not expressly defined in this Agreement shall have the
respective meanings given to them in accordance with GAAP as applied in effect
on the date hereof in the USA.  Except
as otherwise expressly provided herein (including without limitation, any
modification to the terms hereof pursuant to Section 8.14), all
computations and determinations for purposes of determining compliance with the
financial requirements of this Agreement shall be made in accordance with GAAP
in effect in the USA on the date hereof and on a basis consistent with the
presentation of the financial statements delivered pursuant to, or otherwise
referred to in, Section 6.5. 
Notwithstanding the foregoing sentence, the financial statements
required to be delivered pursuant to Section 7.1 shall be

 

42

 

prepared
in accordance with GAAP in the USA as in effect on the respective dates of
their preparation.  For purposes of the
financial terms set forth herein, whenever reference is made to a determination
which is required to be made on a consolidated basis (whether in accordance
with GAAP or otherwise) for Borrowers and their Restricted Subsidiaries or for
the Company and its Restricted Subsidiaries, such determination shall be made
as if each Unrestricted Subsidiary were wholly-owned by a Person not an
Affiliate of any Borrower.

 

(b)           For purposes of
computing the ratios in the Pricing Grid and in the financial covenants in Sections
9.2 and 9.3 for any portion of any period prior to the Closing Date,
(i) Cash Interest Expense shall be calculated on a pro forma basis giving
effect to the Transactions occurring on the Closing Date as if such events
occurred on the first day of the applicable four fiscal quarter period with
interest rates in effect as of the Closing Date and (ii)  fourth quarter 2001 EBITDA shall be the
respective amounts set forth on Exhibit 1.2(b).

 

ARTICLE II 

AMOUNT
AND TERMS OF CREDIT

 

2.1           Revolving Credit Borrowing.

 

(a)           Revolving
Commitments.  Each Revolving Lender,
severally and for itself alone, hereby agrees, on the terms and subject to the
conditions hereinafter set forth and in reliance upon the representations and
warranties set forth herein and in the other Loan Documents, to make loans to
the Borrowers on a revolving basis from time to time during the Commitment
Period, in an amount not to exceed its Available Revolving Commitment after
giving effect to the use of proceeds thereof and of any other Loan made prior
thereto or simultaneously therewith on the applicable borrowing date (each such
loan by any Lender, a “Revolving Loan” and collectively, the “Revolving
Loans”); provided, that all Revolving Loans comprising the same
Borrowing hereunder shall be made by the Revolving Lenders simultaneously and
proportionately to their respective Revolving Commitments; provided, further,
that after giving effect to any Borrowing of Revolving Loans, the outstanding
principal balance of all Revolving Loans and the Stated Amount of all
outstanding LC Obligations may not exceed the Borrowing Base.  Prior to the Commitment Termination Date,
Revolving Loans may be repaid and reborrowed by the Borrowers in accordance
with the provisions hereof.

 

(b)           Revolving Loans.  The Revolving Loans may from time to time be
(i) Eurodollar Loans, (ii) Base Rate Loans, or (iii) a combination thereof, as
determined by the Funds Administrator and notified to Administrative Agent in
accordance with Section 2.1(d); provided, however, that at
no time shall there be outstanding more than ten  (10) Borrowings of Eurocurrency Loans which are part of the
Revolving Loans; provided, further, however, that no
Revolving Loan shall be made as a Eurodollar Loan after the day that is one
month prior to the Commitment Termination Date.  All Revolving Loans shall be made in Dollars.

 

(c)           Revolving Notes.  The Revolving Loans made by each Revolving
Lender shall, if requested by such Revolving Lender, be evidenced by a
promissory note substantially in

 

43

 

the
form of Exhibit 2.1(c), with appropriate insertions as to payee, date
and principal amount (a “Revolving Note”), payable to the order of such
Lender.  Each Revolving Lender is hereby
authorized to record the date, Type and amount of each Revolving Loan made by
such Lender, each continuation thereof, each conversion of all or a portion
thereof to another Type, the date and amount of each payment or prepayment of
principal thereof and, in the case of Eurodollar Loans, the length of each
Interest Period with respect thereto, on the schedule annexed to and
constituting a part of its Revolving Note (or otherwise on the records of such
Lender), and any such recordation shall (in the absence of manifest error)
constitute prima facie evidence of the accuracy of the information so recorded;
provided, however, that the failure of a Lender to make any such
recordation (or any error in such recordation) on its records or on its
Revolving Note shall not affect the obligations of the Borrowers thereunder or under
this Agreement.  Each Revolving Note
shall (x) be dated the Closing Date, (y) be stated to mature on the Commitment
Termination Date and (z) provide for the payment of interest in accordance with
Section 3.1.

 

(d)           Procedure for
Revolving Credit Borrowing. 
Borrowings shall be made on notice from the Funds Administrator to the
Administrative Agent (x) prior to 12:00 Noon (New York City time), three
Business Days prior to the requested borrowing date, if all or any part of the
requested Revolving Loans are to be Eurodollar Loans and (y) prior to 2:00 P.M.
(New York City time), on the Business Day of the requested borrowing date, with
respect to Borrowings of Base Rate Loans, specifying (i) the amount to be
borrowed, (ii) the requested borrowing date, (iii) whether the Borrowing is to
be of Eurodollar Loans, Base Rate Loans, or a combination thereof and (iv) if
the Borrowing is to be entirely or partly of Eurodollar Loans, the respective
amounts of each such Type of Loan and the respective lengths of the initial
Interest Periods therefor.  Each
Borrowing under the Revolving Commitments shall be in an amount equal to or in
excess of (x) in the case of Base Rate Loans, One Million Dollars ($1,000,000)
(or, if less, the then Total Available Revolving Commitment) and (y) in the
case of Eurodollar Loans, One Million Dollars ($1,000,000); provided, however,
that any Borrowing of Revolving Loans to be used solely to pay the aggregate
amount of the drawing on any Letter of Credit pursuant to Section 2.3 (c)
may be in the amount of such drawing. 
Such Borrowing will then be made available to Borrowers by 4:00 P.M.
(New York City time) by Administrative Agent’s crediting the account or
accounts of Borrowers designated by the Funds Administrator on the books of
such office with the aggregate of the Loans.

 

(i)            Each
Notice of Borrowing shall be given by, alternatively, telephone, facsimile or
electronic E-mail transmission, and, if by telephone or electronic E-mail
transmission, confirmed in writing on the same Business Day to the extent
requested by Administrative Agent, substantially in the form of Exhibit
2.1(d) (the “Notice of Borrowing”). 
Each Notice of Borrowing shall be irrevocable by and binding on the
Funds Administrator and the Borrowers.

 

(ii)           The
Funds Administrator shall notify the Administrative Agent in writing of the
names of the officers of the Funds Administrator authorized to request Loans on
behalf of the Borrowers and specifying which of those officers are also, or, if
none are, the other officers that are, authorized to direct the disbursement of
Loans in a manner contrary to standing disbursement instructions, and shall
provide the Administrative Agent with a specimen

 

44

 

signature
of each such officer.  In the absence of
a specification of those officers who are authorized to vary standing
disbursement instructions, the Administrative Agent may assume that each
officer authorized to request Loans also has such authority.  The Administrative Agent shall be entitled
to rely conclusively on the authority of such officers of the Funds
Administrator to request Loans on behalf of the Borrowers, or to vary standing
disbursement instructions, until the Administrative Agent receives written
notice to the contrary.  The
Administrative Agent shall have no duty to verify the authenticity of the
signature appearing on any Notice of Borrowing or other writing delivered
pursuant to this Section 2.1(d) and, with respect to an oral or
electronic E-mail request for Loans, the Administrative Agent shall have no
duty to verify the identity of any individual representing himself as one of
the officers of the Funds Administrator authorized to make such request on
behalf of the Borrowers. Neither the Administrative Agent nor any of the
Lenders shall incur any liability to the Funds Administrator or any of the
Borrowers as a result of (A) acting upon any telephonic or electronic E-mail
notice referred to in this Section 2.1(d) if the Administrative
Agent believes in good faith such notice to have been given by a duly
authorized officer of the Funds Administrator or other individual authorized to
request Loans on behalf of the Borrowers or to direct the disbursement thereof
in a manner contrary to standing disbursement instructions, or (B) otherwise
acting in good faith under this Section 2.1(d) and an advance made and
disbursed pursuant to any such telephonic or electronic E-mail notice shall be
deemed to be a Loan for all purposes of this Agreement.

 

(e)           In addition to being
evidenced by the Borrowers’ Accounts, each Lender’s Loans and the Borrowers’
joint and several obligations to repay such Loans with interest in accordance
with the terms of this Agreement shall be evidenced by this Agreement, the
records of such Lender and such Lender’s Note. 
The records of each Lender shall be prima facie evidence of such
Lender’s Loans and accrued interest thereon and of all payments made in respect
thereof.

 

(f)            Each Lender shall be
entitled to earn interest at the then applicable rate of interest, calculated
in accordance with Article III, on outstanding Loans which it has funded
to the Administrative Agent; provided that in the case of interest
accrued but unpaid at the time of a Bankruptcy Event and interest accruing
thereafter and during a Bankruptcy Event, such Lender shall be entitled to
receive only its Revolving Pro Rata Share of amounts actually received by the
Administrative Agent in respect of such interest; further  provided
that if any amount received by the Administrative Agent in respect of such
interest and distributed by it is thereafter recovered from the Administrative
Agent, such Lender shall, upon request, repay to the Administrative Agent its
Revolving Pro Rata Share of the amount so recovered to the extent received by
it, but without interest (unless the Administrative Agent is required to pay
interest on the amount recovered, in which case such Lender shall be required
to pay interest at a like rate).

 

(g)           Notwithstanding the
obligation of the Funds Administrator to send written confirmation of a Notice
of Borrowing made by telephone or electronic E-mail transmission if and when
requested by the Administrative Agent, in the event that the Administrative
Agent

 

45

 

agrees
to accept a Notice of Borrowing made by telephone or electronic E-mail
transmission, such Notice of Borrowing shall be binding on the Funds
Administrator and each Borrower whether or not written confirmation is sent by
the Funds Administrator or requested by the Administrative Agent.  The Administrative Agent may act prior to
the receipt of any requested written confirmation, without any liability
whatsoever, based upon telephonic or electronic E-mail notice believed by the
Administrative Agent in good faith to be from the Funds Administrator or its
agents.  The Administrative Agent’s
records of the terms of any telephonic or electronic E-mail transmission
Notices of Borrowing shall be conclusive on the Funds Administrator, each
Borrower and the Lenders in the absence of gross negligence or willful
misconduct on the part of the Administrative Agent in connection therewith.

 

2.2           Conversion and Continuation Elections
for Eurodollar Loans and Base Rate Loans.

 

(a)           The Funds Administrator
may upon notice to Administrative Agent in accordance with Section 2.2(b):

 

(i)            elect
to convert on any Business Day, any Base Rate Loans (or any part thereof in an
aggregate amount not less than One Million Dollars ($1,000,000)), into
Eurodollar Loans; or

 

(ii)           elect
to convert on a Conversion Date any Eurodollar Loans (or any part thereof in an
aggregate amount not less than One Million Dollars ($1,000,000)) into Base Rate
Loans; or

 

(iii)          elect to continue on a Continuation Date any
Eurodollar Loans (or any part thereof in an aggregate amount not less than One
Million Dollars ($1,000,000));

 

provided,
that if the aggregate amount of all Eurodollar Loans shall have been reduced,
by payment, prepayment, or conversion of part thereof to an amount less than
One Million Dollars ($1,000,000), the Eurodollar Loans shall automatically
convert into Base Rate Loans, on the last day of such Interest Period.

 

(b)           If the Funds
Administrator desires to convert or continue any Eurodollar Loan or Base Rate
Loan pursuant to Section 2.2(a), it shall irrevocably request a
conversion or continuation (if by telephone, to be confirmed promptly in
writing) in a Notice of Conversion or Continuation in the form of Exhibit
2.2(b) (a “Notice of Conversion or Continuation”) to be received by
Administrative Agent not later than 12:00 Noon (New York City time) at least
(i) three Business Days in advance of the Conversion Date or Continuation Date,
if the Loans are to be converted into or continued as Eurodollar Loans; and
(ii) on the same Business Day as the Conversion Date, if the Loans are to be
converted into Base Rate Loans, specifying:

 

(A)          the proposed Conversion
Date or Continuation Date;

 

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

 

46

 

(C)           the nature of the
proposed conversion or continuation; and

 

(D)          the duration of the
requested Interest Period, if the Loans are to be converted into or continued
as Eurodollar Loans.

 

(c)           If prior to the time
set forth in Section 2.2(b), (i) the Funds Administrator has failed to
give a timely Notice of Conversion or Continuation with respect to a Eurodollar
Loan, or (ii) the Funds Administrator has failed to select a new Interest
Period to be applicable to a Eurodollar Loan, the Funds Administrator shall be
deemed to have elected to continue such loan as a Base Rate Loan.

 

(d)           Upon receipt of a
Notice of Conversion or Continuation, Administrative Agent will promptly notify
each applicable Lender thereof, or, if no timely notice is provided,
Administrative Agent will promptly notify each applicable Lender of the details
of any automatic conversion or continuation. 
All conversions and continuations pursuant to this Section 2.2
shall be made pro rata according to the respective outstanding principal
amounts of the Loans being converted or continued held by each Lender.

 

(e)           Notwithstanding the
foregoing, the Funds Administrator shall not be entitled to specify or elect in
any Notice of Borrowing or Notice of Conversion or Continuation that any Loans
shall be or become Eurodollar Loans if an Event of Default shall have occurred
and be continuing unless the Required Lenders shall have notified
Administrative Agent that additional Eurodollar Loans shall be made available
while such Event of Default is continuing. 
If an Event of Default shall occur and be continuing then, unless
Administrative Agent shall receive such notice from the Required Lenders or all
Events of Default have been cured or waived, each outstanding Eurodollar Loan
shall be converted to a Base Rate Loan on the last day of its Interest Period
and any additional Revolving Loans shall be made as Base Rate Loans.  The foregoing is without prejudice to the
other rights and remedies available hereunder upon an Event of Default.

 

2.3           Amount and Terms of Letters of Credit.

 

(a)           Letter of Credit
Commitments, Terms of Letters of Credit.

 

(i)            Subject
to and upon the terms and conditions herein set forth, at any time and from
time to time on or after the Closing Date and to but not including a date which
is thirty (30) days prior to the Commitment Termination Date, the Facing Bank
agrees to issue each in its own name, but for the ratable benefit of all
Revolving Lenders having a Revolving Commitment (including the applicable Facing
Bank), one or more Letters of Credit, each having a Stated Amount in Dollars
and payable on a sight basis, for the joint and several account of the
Borrowers in a Stated Amount which together with the aggregate Stated Amount of
other Letters of Credit then outstanding does not exceed $40,000,000 provided,
however, that a Facing Bank shall not issue or extend the expiration of
any Letter of Credit if, immediately after giving effect to such issuance or
extension, (A) the aggregate LC Obligations at such time would exceed
$40,000,000 or (B) the Total Available Revolving Commitment would be less than
zero

 

47

 

or
(C) if after such issuance the sum of the principal balances of all outstanding
Revolving Loans and the sum of all LC Obligations would exceed the Borrowing
Base.  Each Revolving Lender having a
Revolving Commitment severally, but not jointly, agrees to participate in each
such Letter of Credit issued by the applicable Facing Bank in an amount equal
to its Revolving Pro Rata Share and to make available to the applicable Facing
Bank such Revolving Lender’s Revolving Pro Rata Share of any payment made to
the beneficiary of such Letter of Credit to the extent not reimbursed by the
Borrowers; provided, however, that no Revolving Lender shall be
required to participate in any Letter of Credit to the extent that such
participation therein would exceed such Revolving Lender’s Available Revolving
Commitment then in effect.  No Revolving
Lender’s obligation to participate in any Letter of Credit or to make available
to the applicable Facing Bank such Revolving Lender’s Revolving Pro Rata Share
of any Letter of Credit Payment made by the applicable Facing Bank shall be
affected by any other Revolving Lender’s failure to participate in the same or
any other Letter of Credit or by any other Revolving Lender’s failure to make
available to the applicable Facing Bank such other Revolving Lender’s Revolving
Pro Rata Share of any Letter of Credit Payment.

 

(ii)           Each
Letter of Credit issued or to be issued hereunder shall have an expiration date
not later than thirty (30) days before the Commitment Termination Date; provided,
however, that each Standby Letter of Credit may provide by its terms
that it will be automatically extended for additional successive periods not in
excess of one (1) year unless the applicable Facing Bank shall have given
notice to the applicable beneficiary (with a copy to the Funds Administrator)
of the election by the applicable Facing Bank (such election to be in the sole
and absolute discretion of the applicable Facing Bank) not to extend such
Letter of Credit, such notice to be given not less than thirty (30) days prior
to the then current expiration date of such Letter of Credit; provided, further,
that no Standby Letter of Credit or extension thereof shall be stated to expire
later than the Commitment Termination Date.

 

(b)           Procedure for
Issuance and Amendment of Letters of Credit.  Whenever the Funds Administrator desires the issuance of a Letter
of Credit hereunder, it shall give Administrative Agent and the applicable
Facing Bank at least three (3) Business Days’ prior written notice (or such
shorter period as may be agreed to by the Funds Administrator, Administrative
Agent and the applicable Facing Bank) specifying the day of issuance thereof
(which day shall be a Business Day), such notice to be given prior to 12:00
Noon (New York City time) on the date specified for the giving of such
notice.  Each such notice (each, a “Letter
of Credit Request”) shall be in the form of Exhibit 2.3(b) hereto
and shall specify (A) the proposed issuance date and expiration date, (B) the
name(s) of each obligor with respect to such Letter of Credit, (C) the
Borrowers as the account party, (D) the name and address of the beneficiary and
(E) the Stated Amount of such proposed Letter of Credit and such other
information as Facing Bank may reasonably request.  In addition, each Letter of Credit Request shall contain a
description of the terms and conditions to be included in such proposed Letter
of Credit (all of which terms and conditions shall be acceptable in form to the
applicable Facing Bank).  Promptly after
issuance or extension of any Letter of Credit, the applicable Facing Bank shall
notify Administrative Agent of such issuance or extension and such notice shall
be accompanied by a copy of the issued Letter of Credit.  Unless otherwise specified, all Letters of

 

48

 

Credit
will be governed by the Uniform Customs and Practices for Documentary Credits
as in effect on the date of issuance of such Letter of Credit.  On the Business Day specified by the Funds
Administrator and upon confirmation from Administrative Agent that the applicable
conditions set forth in Article V have been fulfilled or waived, the
applicable Facing Bank will issue the requested Letter of Credit to the
applicable beneficiary.  Promptly after
the issuance or amendment of a Letter of Credit, the Facing Bank shall notify
the Administrative Agent and the Funds Administrator, in writing, of such
issuance or amendment and such notice shall be accompanied by a copy of such
issuance or amendment. Upon receipt of such notice, the Administrative Agent
shall promptly notify the Revolving Lenders, in writing, of such issuance or
amendment and if requested by a Revolving Lender, the Administrative Agent
shall provide such Revolving Lender with copies of such issuance or
amendment.  From time to time while a
Letter of Credit is outstanding and prior to the Commitment Termination Date,
the applicable Facing Bank will, upon the written request of the Funds
Administrator received by the Facing Bank (with a copy sent by the Funds
Administrator to Administrative Agent) at least three days (or such shorter
time as the Facing Bank and Administrative Agent may agree in a particular
instance in its sole discretion) prior to the proposed date of amendment, amend
any Letter of Credit issued by it (a “Letter of Credit Amendment”).  Each such request for a Letter of Credit
Amendment shall be made by facsimile, confirmed immediately in an original
writing (each a “Letter of Credit Amendment Request”) and shall specify
in form and detail satisfactory to the Facing Bank: (i) the Letter of Credit to
be amended; (ii) the proposed date of amendment of the Letter of Credit (which
shall be a Business Day); (iii) the nature of the proposed amendment; and (iv)
such other matters as the Facing Bank may require.  The Facing Bank shall be under no obligation to amend any Letter
of Credit if: (A) the Facing Bank would have no obligation at such time to
issue such Letter of Credit in its amended form under the terms of this
Agreement, or (B) the beneficiary of any such Letter of Credit does not accept
the proposed amendment to the Letter of Credit.

 

(c)           Draws upon Letters
of Credit; Reimbursement Obligation. 
In the event of any drawing under any Letter of Credit by the
beneficiary thereof, the applicable Facing Bank shall give telephonic notice to
the Funds Administrator and Administrative Agent (x) confirming such drawing
and (y) of the date on or before such Facing Bank intends to honor such
drawing, and the Borrowers shall reimburse the applicable Facing Bank on the
day on which such drawing is honored in an amount in same day funds and like currency
equal to the amount and currency of such drawing; provided, however,
that, anything contained in this Agreement to the contrary notwithstanding, (i)
unless the Funds Adminstrator shall have notified Administrative Agent and the
applicable Facing Bank prior to 10:00 A.M. (New York City time) on the Business
Day the applicable Facing Bank intends to honor such drawing that the Borrowers
intend to reimburse the applicable Facing Bank for the amount of such drawing
with funds other than the proceeds of Revolving Loans, the Funds Administrator
shall be deemed to have timely given a Notice of Borrowing to Administrative
Agent requesting each Revolving Lender having a Revolving Commitment to make
Revolving Loans which are Base Rate Loans on the date on which such drawing is
honored in an amount equal to the amount of such drawing and Administrative
Agent shall, if such Notice of Borrowing is deemed given, promptly notify the
Revolving Lenders thereof and (ii) unless any of the events described in Sections
10.1(e) or 10.1(f) shall have occurred (in which event the
procedures of Section 2.3(d) shall apply), each such Lender shall, on
the date of such drawing, make Revolving Loans which are Base Rate Loans in the
amount of

 

49

 

its
Revolving Pro Rata Share of such drawing, the proceeds of which shall be
applied directly by Administrative Agent to reimburse the applicable Facing
Bank for the amount of such drawing; and provided, further, that,
if for any reason, proceeds of Revolving Loans are not received by the
applicable Facing Bank on such date in an amount equal to the amount of such
drawing, the Borrowers shall reimburse the applicable Facing Bank, on the
Business Day immediately following the date of such drawing, in an amount in
same day funds equal to the excess of the amount of such drawing over the
amount of such Revolving Loans, if any, which are so received, plus accrued
interest on such amount at the rate set forth in Section 3.1(a).

 

(d)           Lenders’ Participation
in Letters of Credit.  In the event
that the Borrowers shall fail to reimburse the applicable Facing Bank as
provided in Section 2.3(c) in an amount equal to the amount of any
drawing honored by the applicable Facing Bank under a Letter of Credit issued
by it in accordance with the terms hereof, the applicable Facing Bank shall
promptly notify Administrative Agent and Administrative Agent shall promptly
notify each Revolving Lender having a Revolving Commitment of the unreimbursed
amount of such drawing and of such Lender’s respective participation
therein.  Each such Lender shall
purchase a participation interest in such LC Obligation and shall make
available to the applicable Facing Bank an amount equal to its Revolving Pro
Rata Share of such drawing in same day funds, at the office of the applicable
Facing Bank specified in such notice, not later than 1:00 P.M. (New York City
time) on the Business Day after the date such Revolving Lender is notified by
Administrative Agent.  In the event that
any such Lender fails to make available to the applicable Facing Bank the
amount of such Revolving Lender’s participation in such Letter of Credit as
provided in this Section 2.3(d), the applicable Facing Bank shall be
entitled to recover such amount on demand from such Revolving Lender together
with interest at the Federal Funds Rate for two Business Days and thereafter at
the Base Rate.  Nothing in this Section
2.3(d) shall be deemed to prejudice the right of any Revolving Lender to
recover from the applicable Facing Bank any amounts made available by such
Revolving Lender to the applicable Facing Bank pursuant to this Section
2.3(d) in the event that it is determined by a court of competent
jurisdiction that the payment with respect to a Letter of Credit by the
applicable Facing Bank in respect of which payment was made by such Revolving
Lender constituted gross negligence or willful misconduct on the part of the
applicable Facing Bank.  The applicable
Facing Bank shall distribute to each other Revolving Lender which has paid all
amounts payable by it under this Section 2.3(d) with respect to any
Letter of Credit issued by the applicable Facing Bank such other Revolving
Lender’s Revolving Pro Rata Share of all payments received by the applicable
Facing Bank from Borrower in reimbursement of drawings honored by the
applicable Facing Bank under such Letter of Credit when such payments are
received.  Each Revolving Lender’s
obligation to make Revolving Loans pursuant to Section 2.3(c) or to
purchase participations pursuant to Section 2.3(d) as a result of a
drawing under a Letter of Credit shall be absolute and unconditional and
without recourse to the Facing Bank and shall not be affected by any
circumstance, including (i) any set-off, counterclaim, recoupment, defense or
other right which such Revolving Lender may have against the Facing Bank, the
Borrower or any other Person for any reason whatsoever; (ii) the occurrence or
continuance of a Default, an Event of Default or a Material Adverse Effect; or
(iii) any other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing.

 

50

 

(e)           Fees for Letters of
Credit.

 

(i)            Facing
Bank Fees.  The Company agrees to
pay the following amount to the applicable Facing Bank (or with respect to
clause (A) below, to Administrative Agent for distribution to each
participating Revolving Lender) with respect to Letters of Credit issued by it
for the account of the Borrowers:

 

(A)          with respect to drawings
made under any Letter of Credit, interest, payable on demand, on the dollar
equivalent of the amount paid by the applicable Facing Bank in respect of each
such drawing from the date of the drawing through the date such amount is
reimbursed by the Borrowers (including any such reimbursement out of the
proceeds of Revolving Loans pursuant to Section 2.3(c)) at a rate which
is at all times equal to the Applicable Eurocurrency Rate Margin per annum in
excess of the Base Rate;

 

(B)           with respect to the
issuance or amendment of each Letter of Credit and each drawing made
thereunder, documentary and processing charges in accordance with the
applicable Facing Bank’s standard schedule for such charges in effect at the
time of such issuance, amendment, transfer or drawing, as the case may be; and

 

(C)           such other fees to be
paid as separately agreed to in a fee letter between the Borrowers and the
Facing Bank.

 

(ii)           Participating
Lender Fees.  The Borrowers agree to
pay to Administrative Agent for distribution to each participating Revolving
Lender in respect of all Letters of Credit outstanding such Revolving Lender’s
Revolving Pro Rata Share of a commission equal to the Applicable Eurocurrency
Margin per annum with respect to the maximum Stated Amount under such outstanding
Letters of Credit (the “LC Commission”), payable in arrears on the last
Business Day of March, June, September and December, on the Commitment
Termination Date and thereafter, on demand. 
The LC Commission shall be computed from the first day of issuance of
each Letter of Credit and on the basis of the actual number of days elapsed
over a year of 360 days.

 

Promptly upon receipt by
a Facing Bank or Administrative Agent of any amount described in clause (i)(A)
or (ii) of this Section 2.5(e), the applicable Facing Bank or
Administrative Agent shall distribute to each Revolving Lender, its Revolving
Pro Rata Share of such amount as long as, in the case of amounts described in
clause (i)(A), such Revolving Lender has reimbursed the applicable Facing Bank
in accordance with Section 2.5(d). 
Amounts payable under clause (i)(B) and (C) of this Section 2.5(e)
shall be paid directly to the applicable Facing Bank.

 

(f)            LC Obligations
Unconditional.  The obligation of
the Borrowers to reimburse a Facing Bank (or any Revolving Lender that has
purchased a participation from or made a Loan to enable the Borrowers to
reimburse the applicable Facing Bank) for drawings made under any Letter of
Credit issued by it and the obligations of each Revolving Lender under Section
2.5(d) with respect thereto shall be unconditional and irrevocable and
shall be paid strictly in accordance with the terms of this Agreement under all
circumstances, including, without limitation, the following circumstances:

 

51

 

(i)            any
lack of validity or enforceability of such Letter of Credit;

 

(ii)           the
existence of any claim, setoff, defense or other right which any Borrower or
any of such Borrower’s Affiliates may have at any time against a beneficiary or
any transferee of such Letter of Credit (or any persons or entities for which
any such beneficiary or transferee may be acting), the applicable Facing Bank,
any Lender or any other Person, whether in connection with this Agreement, the
transactions contemplated herein or any unrelated transaction (including any
underlying transaction between any Borrower or one of such Borrower’s
Subsidiaries and the beneficiary of such Letter of Credit);

 

(iii)          any draft, demand, certificate or any other
document presented under such Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect;

 

(iv)          payment
by the applicable Facing Bank under such Letter of Credit against presentation
of a demand, draft or certificate or other document which does not comply with
the terms of such Letter of Credit;

 

(v)           any
other circumstance or happening whatsoever, whether or not similar to any of
the foregoing; or

 

(vi)          the
fact that an Event of Default or an Unmatured Event of Default shall have
occurred and be continuing.

 

Notwithstanding the
foregoing, no Borrower nor the Revolving Lenders (other than the applicable
Facing Bank in its capacity as such) shall be liable for any obligation resulting
from the gross negligence or willful misconduct of the applicable Facing Bank
with respect to any Letter of Credit.

 

(g)           Indemnification.  In addition to amounts payable as elsewhere
provided in this Agreement, the Borrowers hereby agree to protect, indemnify,
pay and save the applicable Facing Bank harmless from and against any and all
claims, demands, liabilities, damages, losses, costs, charges and expenses
(including Attorney Costs) (other than for Taxes, which shall be covered by Section
4.8) which the applicable Facing Bank may incur or be subject to as a
consequence, direct or indirect, of (i) the issuance of the Letters of Credit,
other than as a result of the gross negligence or willful misconduct of the
applicable Facing Bank or (ii) the failure of the applicable Facing Bank to
honor a drawing under any Letter of Credit as a result of any act or omissions,
whether rightful or wrongful, of any present or future de jure or de facto
Governmental Authority (all such acts or omissions herein called “Government
Acts”) other than as a result of the gross negligence or willful misconduct
of the applicable Facing Bank.  As
between the Borrowers on the one hand, and the applicable Facing Bank and the
Lenders, on the other hand, the Borrowers jointly and severally assume all
risks of the acts and omissions of, or misuse of the Letters of Credit issued
by the applicable Facing Bank by, the respective beneficiaries of such Letters
of Credit.  In furtherance and not in
limitation of the foregoing, neither the applicable Facing Bank nor any of the
Lenders shall be responsible, in the absence of

 

52

 

gross
negligence or willful misconduct, as determined by a final and non-appealable
judgment of a court of competent jurisdiction: (i) for the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document submitted by
any party in connection with the application for and issuance of or any drawing
under such Letters of Credit, even if it should in fact prove to be in any or
all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) for
the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove
to be invalid or ineffective for any reason; (iii) for failure of the
beneficiary of any such Letter of Credit to comply fully with conditions
required in order to draw upon such Letter of Credit; (iv) for errors,
omissions, interruptions or delays in transmission or delivery of any messages,
by mail, cable, telegraph, telex or otherwise, whether or not they be in
cipher; (v) for errors in interpretation of technical terms; (vi) for any loss
or delay in the transmission or otherwise of any document required in order to
make a drawing under any such Letter of Credit or of the proceeds thereof;
(vii) for the misapplication by the beneficiary of any such Letter of Credit of
the proceeds of any drawing under such Letter of Credit; and (viii) for any
consequences arising from causes beyond the control of the applicable Facing
Bank, including, without limitation, any Government Acts.  None of the above shall affect, impair, or
prevent the vesting of any of the applicable Facing Bank’s or any Lender’s
rights or powers hereunder.

 

In furtherance and
extension and not in limitation of the specific provisions hereinabove set
forth, any action taken or omitted by the applicable Facing Bank under or in
connection with the Letters of Credit issued by it or the related certificates,
if taken or omitted in good faith, shall not put the applicable Facing Bank
under any resulting liability to the Borrowers.  Notwithstanding anything to the contrary contained in this
Agreement, the Borrowers shall have no obligation to indemnify or hold harmless
the applicable Facing Bank in respect of any claims, demands, liabilities,
damages, losses, costs, charges or expenses (including Attorney Costs) incurred
by the applicable Facing Bank arising solely out of the gross negligence or
willful misconduct of the applicable Facing Bank.  The right of indemnification in the first paragraph of this Section
2.3(g) shall not prejudice any rights that the Borrowers may otherwise have
against the applicable Facing Bank with respect to a Letter of Credit issued
hereunder.

 

(h)           Stated Amount.  The Stated Amount of each Letter of Credit
shall not be less than Five Hundred Thousand Dollars ($500,000) or such lesser
amount to which the applicable Facing Bank has agreed.  For purposes of calculating the Stated
Amount of any Letter of Credit at any time:

 

(i)            any
increase in the Stated Amount of any Letter of Credit by reason of any
amendment to any Letter of Credit shall be deemed effective under this
Agreement as of the date the applicable Facing Bank actually issues an
amendment purporting to increase the Stated Amount of such Letter of Credit,
whether or not the applicable Facing Bank receives the consent of the Letter of
Credit beneficiary or beneficiaries to the amendment, except that if the Funds
Administrator has requested that the increase in Stated Amount be given effect
as of an earlier date and the applicable Facing Bank issues an amendment to
that effect, then such increase in Stated Amount shall be deemed effective
under this Agreement as of such earlier date requested by the Funds
Administrator; provided that any increase in the Stated Amount shall be
subject to

 

53

 

the
satisfaction or waiver of the conditions set forth in Section 5.2 and
the applicable Facing Bank shall promptly notify the other Lenders of any such
increase; and

 

(ii)           any
reduction in the Stated Amount of any Letter of Credit by reason of any
amendment to any Letter of Credit shall be deemed effective under this
Agreement as of the later of (x) the date the applicable Facing Bank actually
issues an amendment purporting to reduce the Stated Amount of such Letter of
Credit, whether or not the amendment provides that the reduction be given
effect as of an earlier date, or (y) the date the applicable Facing Bank
receives the written consent (including by telex or facsimile transmission) of
the Letter of Credit beneficiary or beneficiaries to such reduction, which
written consent must be dated on or after the date of the amendment issued by
the applicable Facing Bank purporting to effect such reduction.

 

(i)            Increased Costs.  If at any time after the date hereof any
Facing Bank or any Lender determines that the introduction of or any change in
any applicable law, rule, regulation, order, guideline or request or in the
interpretation or administration thereof by any Governmental Authority charged
with the interpretation or administration thereof, or compliance by the
applicable Facing Bank or such Lender with any request or directive by any such
authority (whether or not having the force of law), shall either (i) impose,
modify or make applicable any reserve, deposit, capital adequacy or similar
requirement against letters of credit issued by the applicable Facing Bank or
participated in by any Lender, or (ii) impose on the applicable Facing Bank or
any Lender any other conditions relating, directly or indirectly, to the
provisions of this Agreement relating to Letters of Credit or any Letter of
Credit; and the result of any of the foregoing is to increase the cost to the
applicable Facing Bank or any Lender of issuing, maintaining or participating
in any Letter of Credit, or reduce the amount of any sum received or receivable
by the applicable Facing Bank or any Lender hereunder or reduce the rate of
return on its capital with respect to Letters of Credit, then, upon demand to
the Borrowers by the applicable Facing Bank or any Lender (a copy of which
demand shall be sent by the applicable Facing Bank or such Lender to
Administrative Agent), the Borrowers shall pay to the applicable Facing Bank or
such Lender, as the case may be, such additional amount or amounts as will
compensate the applicable Facing Bank or such Lender for such increased cost or
reduction in the amount receivable or reduction on the rate of return on its
capital.  In determining such additional
amounts pursuant to the preceding sentence, the applicable Facing Bank or such
Lender will act reasonably and in good faith and will, to the extent the
increased costs or reductions in amounts receivable or reductions in rates of
return relate to Facing Bank’s or such Lender’s letters of credit in general
and are not specifically attributable to the Letters of Credit hereunder, use
averaging and attribution methods which are reasonable and which cover all
letters of credit similar to the Letters of Credit issued by or participated in
by the applicable Facing Bank or such Lender whether or not the documentation
for such other Letters of Credit permit the applicable Facing Bank or such
Lender to receive amounts of the type described in this Section 2.3(i).  The applicable Facing Bank or any Lender,
upon determining that any additional amounts will be payable pursuant to this Section
2.3(i), will give prompt written notice thereof to the Funds Administrator,
which notice shall include a certificate submitted to Borrower by the
applicable Facing Bank or such Lender (a copy of which certificate shall be
sent by the applicable Facing Bank or such Lender to Administrative Agent),
setting forth in reasonable detail the basis for the calculation of such
additional amount or amounts necessary to

 

54

 

compensate
the applicable Facing Bank or such Lender, although failure to give any such
notice shall not release or diminish Borrowers’ obligations to pay additional
amounts pursuant to this Section 2.3(i); provided, however,
if the applicable Facing Bank or such Lender, as applicable, has intentionally
withheld or delayed such notice, the applicable Facing Bank or such Lender, as
the case may be, shall not be entitled to receive additional amounts pursuant
to this Section 2.3(i) for periods occurring prior to the 180th day
before the giving of such notice.  The
certificate required to be delivered pursuant to this Section 2.3(i)
shall, absent manifest error, be final, conclusive and binding on the Funds
Administrator and each of the Borrowers.

 

(j)            Existing Letters of
Credit.  Schedule 2.3(j) sets
forth all letters of credit of the Borrowers issued by Facing Bank each of
which shall be deemed Letters of Credit under this Agreement and shall count
against the $40,000,000 limit on Letters of Credit as set forth in Section
2.3(a)(i).  Each Lender shall be
deemed, without further action of any party hereto, to have purchased from the
Facing Bank a participation interest equal to its Revolving Pro Rata Share of
such Letters of Credit.

 

2.4           Master Collection Account.

 

(a)           On the Closing Date,
the Collateral Agent shall establish in its own name, for the benefit of the
Secured Parties under the Security Agreement, the Master Collection Account
into which all Collections received in any Lock-Box Account or otherwise
received by any Credit Party are to be remitted.  The Master Collection Account shall be established and maintained
at DB or such other bank approved by Administrative Agent (such a bank, an “Eligible
Institution”) or as a segregated trust account in the corporate trust
department of any federal or state chartered depository institution subject to
regulations regarding fiduciary funds on deposit substantially similar to 12
C.F.R. Section 9.10(b).  The Master
Collection Account shall bear a designation clearly indicating that the funds
deposited therein are held for the benefit of the Collateral Agent.  If the Master Collection Account is at any
time maintained with an Eligible Institution (other than as a segregated trust
account in such institution’s corporate trust department as described above)
and such institution shall cease to be an Eligible Institution for purposes
hereof, Collateral Agent shall direct the Borrowers to, and the Borrowers
shall, within ten (10) calendar days thereafter, move such accounts to a
different Eligible Institution or to a segregated trust account maintained in
the corporate trust department of an institution meeting the qualifications set
forth above.  Subject to the
restrictions set forth in this Section 2.4(b), Collateral Agent shall
have the right at any time to move, or to designate any other account as,
Master Collection Account, and the Borrowers hereby agree to take any and all
action reasonably requested by Collateral Agent to facilitate any such move or
designation.

 

(b)           The Borrowers hereby agree
that they shall have no right of setoff against, and no right otherwise to
deduct from, any funds held in the Master Collection Account for any amount
owed to them by the Collateral Agent, Administrative Agent, any of the Lenders,
or any of the Credit Parties.

 

(c)           So long as no Event of
Default or Unmatured Event of Default has occurred and is continuing and no
Loan is outstanding, the Collateral Agent, at the direction of the Funds
Administrator, may invest the amounts from time to time on deposit in the
Master

 

55

 

Collection
Account in an interest-bearing deposit account or, subject to the approval of
Administrative Agent and the Collateral Agent, in other overnight investments
constituting Permitted Investments.  In
no event shall the Collateral Agent, Administrative Agent or any of the Lenders
be liable for any losses incurred on such investments, including as a result of
any early termination of such investments as aforesaid.

 

ARTICLE III  

INTEREST AND
FEES

 

3.1           Interest.

 

(a)           Revolving Loans.  Subject to Sections 3.1(d) and (e),
each Revolving Loan shall bear interest on the outstanding principal amount
thereof from the date when made until it becomes due or is prepaid in full at a
rate per annum equal to (i) in the case of Base Rate Loans, the Base Rate plus
the Applicable Base Rate Margin or (ii) in the case of Eurodollar Loans, the
Eurocurrency Rate plus the Applicable Eurocurrency Margin.

 

(b)           Payment of Interest.  Interest on each Loan shall be payable in
arrears on each Interest Payment Date; provided, however, that
interest accruing hereunder including, but not limited to, that payable
pursuant to Section 3.1(d) shall be payable from time to time on demand
of Administrative Agent or the Required Lenders.

 

(c)           Notification of Rate.  Administrative Agent, upon determining the
interest rate for any Tranche of Eurocurrency Loans for any Interest Period,
shall promptly notify the Funds Administrator and the applicable Lenders
thereof.  Such determination shall,
absent manifest error and subject to Section 3.5, be final, conclusive
and binding upon all parties hereto.

 

(d)           Default Interest.  Notwithstanding the rates of interest
specified herein, effective on the date 30 days after the occurrence and continuance
during such 30 day period of any Event of Default (other than the failure to
pay Obligations when due) and for so long thereafter as any such Event of
Default shall be continuing, and effective immediately upon any failure to pay
any Obligations or any other amounts due under any of the Loan Documents when
due, whether by acceleration or otherwise, the principal balance of each Loan
then outstanding and, to the extent permitted by applicable law, any interest
payment on each Loan not paid when due or other amounts then due and payable,
shall bear interest payable on demand, after as well as before judgment, at a
rate per annum equal to the Default Rate.

 

(e)           Maximum Interest.  If any interest payment or other charge or
fee payable hereunder exceeds the maximum amount then permitted by applicable
law, the Borrowers shall be obligated to pay the maximum amount then permitted
by applicable law and the Borrowers shall continue to pay the maximum amount
from time to time permitted by applicable law until all such interest payments
and other charges and fees otherwise due hereunder (in the absence of such
restraint imposed by applicable law) have been paid in full.

 

56

 

3.2           Fees.

 

(a)           Commitment Fee.  The Borrowers shall pay in Dollars to
Administrative Agent, for the ratable benefit of the Revolving Lenders, a
commitment fee on the sum of the Total Available Revolving Commitment of the
Lenders in effect for each day, at a rate per annum equal to 0.75%; provided
that if the Total Available Revolving Commitment of the Lenders on a given day
is less than 50% of the Total Revolving Commitments, then the rate per annum
applicable to such day shall be 0.50%. 
Such commitment fee shall accrue from the Closing Date to the Commitment
Termination Date and shall be payable quarterly, in arrears, on the last
Business Day of each Fiscal Quarter (or if such day is not a Business Day, on
the immediately preceding Business Day), and on the Commitment Termination
Date.

 

(b)           Agency Fees.  The Company shall pay to Administrative
Agent for its own account, agency and other Loan fees in the amount and at the
times set forth in the letter agreements between the Company and Administrative
Agent.

 

3.3           Computation of Interest and Fees.  Interest on all Eurocurrency Loans and all
fees hereunder shall be computed on the basis of the actual number of days
elapsed over a year of 360 days. 
Interest on all Base Rate Loans, shall be computed on the basis of the
actual number of days elapsed over a year of 365 or 366 days, as the case may
be.  Each determination of an interest
rate by Administrative Agent pursuant to any provision of this Agreement shall
be conclusive and binding on the Borrowers and the Lenders in the absence of
manifest error.  Administrative Agent
shall, at any time and from time to time upon request of the Borrowers or any
Lender, deliver to the Funds Administrator or any Lender a statement showing
the quotations used by Administrative Agent in determining any interest rate
applicable to Loans pursuant to this Agreement.

 

3.4           Compensation For Funding Losses.  Borrowers shall compensate each Lender, upon
its written request (which request shall set forth the basis for requesting
such amounts, showing the calculation thereof in reasonable detail), for all
losses, expenses and liabilities (including, without limitation, any interest
paid by such Lender to lenders of funds borrowed by it to make or carry its
Loans to the extent not recovered by the Lender in connection with the liquidation
or re-employment of such funds and including the compensation payable by such
Lender to a Person to which the Lender has participated all or a portion of
such Loan) and any loss sustained by such Lender in connection with the
liquidation or re-employment of such funds (including, without limitation, a
return on such liquidation or re-employment that would result in such Lender
receiving less than it would have received had such Loan remained outstanding
until the last day of the Interest Period applicable to such Loans) which the
Lender may sustain as a result of:  (i)
for any reason (other than a default by such Lender or Administrative Agent) a
Borrowing of, continuation of, or conversion from or into, Eurocurrency Loans
does not occur on a date specified therefor in a Notice of Borrowing or Notice
of Conversion or Continuation (whether or not withdrawn); (ii) any payment,
prepayment or conversion or continuation of any of its Eurocurrency Loans
occurring for any reason whatsoever on a date which is not the last day of an
Interest Period applicable thereto; (iii) any repayment of any of its
Eurocurrency Loans not being made on the date specified in a notice of payment
given by the Funds Administrator; or (iv) (A) any other failure by the Borrowers
to

 

57

 

repay
their Eurocurrency Loans when required by the terms of this Agreement or (B) an
election made by Borrowers pursuant to Section 3.6.  Each Lender shall submit its written request
as to additional amounts owed such Lender under this Section 3.4 to the
Funds Administrator and Administrative Agent within ten Business Days of the
event giving rise to such request, which request shall, absent manifest error,
be final, conclusive and binding for all purposes.

 

3.5           Increased
Costs, Illegality, Etc.  

 

(a)           Generally.  Except as otherwise provided in Section
4.8, in the event that any Lender shall have determined (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto but, with respect to clause (i) below, may be made only
by Administrative Agent):

 

(i)            on
any Interest Rate Determination Date that, by reason of any changes arising
after the date of this Agreement affecting the interbank Eurocurrency market,
adequate and fair means do not exist for ascertaining the applicable interest
rate on the basis provided for in the definition of the Eurocurrency Rate
applicable to such Loan for the applicable Interest Period, then, the
obligation of the Lenders to make, convert, continue or maintain Eurocurrency
Loans, as the case may be, hereunder shall be suspended until Administrative
Agent revokes such notice thereof in writing;

 

(ii)           at
any time that any Lender shall incur increased costs or reduction in the amounts
received or receivable hereunder with respect to any Eurocurrency Loan because
of any change since the date of this Agreement in any applicable law or
governmental rule, regulation, order, guideline or request (whether or not
having the force of law) or in the interpretation or administration thereof and
including the introduction of any new law or governmental rule, regulation,
order, guideline or request, such as, for example, but not limited to (A) a
change in the basis of taxation of payments to any Lender of the Principal of
or interest on the Notes or any other amounts payable hereunder (except for (a)
changes in the rate of tax on, or determined by reference to, the net income or
profits of such Lender imposed by the jurisdiction in which its principal
office or applicable lending office is located and (b) USA withholding taxes,
which shall be governed by the provisions of Section 4.5) or (B) a change in
official reserve requirements (but, in all events, excluding reserves required
under Regulation D to the extent included in the computation of the Eurodollar
Rate) and/or (y) other circumstances since the date of this Agreement affecting
such Lender or the interbank Eurodollar market or the position of such Lender
in such market (excluding, however, differences in a Lender’s cost of funds
from those of Administrative Agent which are solely the result of credit
differences between such Lender and Administrative Agent); or

 

(iii)          at any time that the making or continuance of
any Eurocurrency Loan has been made (x) unlawful by any law or governmental
rule, regulation or order, (y) impossible by compliance by any Lender in good
faith with any governmental request (whether or not having force of law) or (z)
impracticable as a result of a contingency occurring after the date of this
Agreement which materially and adversely affects the interbank Eurocurrency
market;

 

58

 

then, and in any such
event, such Lender (or Administrative Agent in the case of clause (i) above)
shall promptly give notice (by telephone, telefax or telecopier confirmed in
writing) to the Funds Administrator and, except in the case of clause (i)
above, to Administrative Agent of such determination (which notice
Administrative Agent shall promptly transmit to each of the other
Lenders).  Thereafter (A) in the case of
clause (i) above, Eurodollar Loans shall no longer be available until such time
as Administrative Agent notifies the Funds Administrator and the Lenders that
the circumstances giving rise to such notice by Administrative Agent no longer
exist, and any Notice of Borrowing or Notice of Conversion or Continuation
given by the Funds Administrator with respect to Eurodollar Loans (other than
with respect to conversions to Base Rate Loans) which have not yet been
incurred (including by way of conversion) shall be deemed rescinded by the
Funds Administrator, (B) in the case of clause (ii) above, Borrowers shall pay
to such Lender, upon written demand therefor, such additional amounts (in the
form of an increased rate of, or a different method of calculating, interest or
otherwise as such Lender in its sole discretion shall determine) as shall be
required to compensate such Lender for such increased costs or reductions in
amounts received or receivable hereunder (a written notice as to the additional
amounts owed to such Lender, showing the basis for the calculation thereof,
submitted to the Borrowers by such Lender shall, absent manifest error, be
final and conclusive and binding on all the parties hereto; however the failure
to give any such notice shall not release or diminish Borrowers’ obligations to
pay additional amounts pursuant to this Section 3.5(a); provided,
however, if the respective Lender has intentionally withheld or delayed
such notice, the respective Lender shall not be entitled to receive additional
amounts pursuant to this Section 3.5(a) for periods occurring prior to
the 180th day before the giving of such written demand) and (C) in the case of
clause (iii) above, the Funds Administrator shall take one of the actions
specified in Section 3.5(b) as promptly as possible and, in any event,
within the time period required by law. 
In determining such additional amounts pursuant to clause (B) of the
immediately preceding sentence, each Lender shall act reasonably and in good
faith and will, to the extent the increased costs or reductions in amounts
receivable relate to such Lender’s loans in general and are not specifically
attributable to a Loan hereunder, use averaging and attribution methods which
are reasonable and which cover all loans similar to the Loans made by such
Lender whether or not the loan documentation for such other loans permits the
Lender to receive increased costs of the type described in this Section
3.5(a).

 

(b)           Eurocurrency Loans.  At any time that any Eurocurrency Loan is
affected by the circumstances described in Section 3.5(a)(ii) or (iii),
the Funds Administrator may (and in the case of a Eurocurrency Loan affected by
the circumstances described in Section 3.5(a)(iii) shall) either (i) if
the affected Loan is then being made initially or if the Loan is being
converted or continued pursuant to a Notice of Conversion or Continuation, by
giving Administrative Agent telephonic notice (confirmed in writing) on the
same date that the Funds Administrator was notified by the affected Lender or
Administrative Agent pursuant to Section 3.5(a)(ii) or (iii), cancel the
respective Borrowing, or (ii) if any affected Loan is a Eurodollar Loan then
outstanding, upon at least three Business Days’ written notice to
Administrative Agent, require the affected Lender to convert such Eurodollar
Loan into a Base Rate Loan, provided that if more than one Lender is
affected at any time, then all affected Lenders must be treated the same
pursuant to this Section 3.5(b).

 

59

 

(c)           Capital Requirements.  If at any time after the date hereof, any
Lender determines that the introduction of or any change in any applicable law
or governmental rule, regulation, order, guideline or request (whether or not
having the force of law) concerning capital adequacy, or any change in
interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency, will have the effect of increasing the amount of
capital required or expected to be maintained by such Lender or any corporation
controlling such Lender based on the existence of such Lender’s Loans or its
Revolving Commitment, if any, hereunder or its obligations hereunder, then
Borrowers shall pay to such Lender, upon its delivery of the written notice
hereafter referred to, therefor, such additional amounts as shall be required
to compensate such Lender or such other corporation for the increased cost to
such Lender or such other corporation or the reduction in the rate of return to
such Lender or such other corporation as a result of such increase of
capital.  In determining such additional
amounts, each Lender will act reasonably and in good faith and will use averaging
and attribution methods which are reasonable and which will, to the extent the
increased costs or reduction in the rate of return relates to such Lender’s
commitments or obligations in general and are not specifically attributable to
the Revolving Commitments, if any, and obligations hereunder, cover all
commitments and obligations similar to the Revolving Commitments and
obligations of such Lender hereunder whether or not the loan documentation for
such other commitments or obligations permits the Lender to make the
determination specified in this Section 3.5(c), and such Lender’s
determination of compensation owing under this Section 3.5(c) shall,
absent manifest error, be final and conclusive and binding on all the parties
hereto.  Each Lender, upon determining
that any additional amounts will be payable pursuant to this Section 3.5(c),
will give prompt written notice thereof to the Funds Administrator, which
notice shall show the basis for calculation of such additional amounts,
although the failure to give any such notice shall not release or diminish any
of the Borrowers’ obligations to pay additional amounts pursuant to this Section
3.5(c); provided, however, if the respective Lender has
intentionally withheld or delayed such notice, the respective Lender shall not
be entitled to receive additional amounts pursuant to this Section 3.5(c)
for periods occurring prior to the 180th day before the giving of such notice.

 

(d)           Effect of Reserve
Requirements.  In the event that any
Governmental Authority shall impose any Eurocurrency Reserve Requirements which
increase the cost to any Lender of making or maintaining Eurocurrency Loans,
then the Borrowers shall thereafter pay in respect of the Eurocurrency Loans
which are Revolving Loans of such Lender a rate of interest based upon the
Eurocurrency Reserve Rate (rather than upon the Eurocurrency Rate).  From and after the delivery by a Lender to
the Funds Administrator of a notice indicating that the cost to any Lender has
increased as a result of such Eurocurrency Reserve Requirement, all references
contained in this Agreement to the Eurocurrency Rate (other than that in the
definition of Eurocurrency Reserve Rate), shall be deemed to be references to
the Eurocurrency Reserve Rate with respect to each such affected Lender.

 

3.6           Replacement of Lenders.

 

If any Lender is owed
increased costs under Section 3.5(a)(ii) or (iii) or Section
3.5(c) or the Borrowers are required to make any payments under Section
4.8(c) to any Lender materially in excess of those of the other Lenders,
the Borrowers shall have the right, if no Default or Event of Default then
exists, to replace such Lender (the “Replaced Lender”) with one

 

60

 

or more other Eligible
Assignee or Assignees (collectively, the “Replacement Lender”)
acceptable to Administrative Agent; provided that (i) at the time of any
replacement pursuant to this Section 3.6, the Replaced Lender and
Replacement Lender shall enter into one or more assignment agreements, in form and
substance satisfactory to such parties and Administrative Agent, pursuant to
which the Replacement Lender shall acquire all or a portion, as the case may
be, of the outstanding Loans of the Replaced Lender and (ii) all obligations of
the Borrowers owing to the Replaced Lender relating to the Loans so replaced
(including, without limitation, such increased costs and excluding those
specifically described in clause (i) above in respect of which the assignment
purchase price has been, or is concurrently being paid) shall be paid in full
to such Replaced Lender concurrently with such replacement.  Upon the execution of the respective
assignment documentation, the payment of amounts referred to in clauses (i) and
(ii) above and, if so requested by the Replacement Lender, delivery to the
Replacement Lender of the appropriate Note or Notes executed by the Borrowers,
the Replacement Lender shall become a Lender hereunder and the Replaced Lender
shall cease to be a Lender hereunder with respect to such replaced Loans,
except with respect to indemnification provisions under this Agreement, which
shall survive as to such Replaced Lender. 
The Replaced Lender shall be required to deliver for cancellation its
Notes to be cancelled on the date of replacement, or if any such Note is lost
or unavailable, such other assurances or indemnification therefor as the Funds
Administrator may reasonably request.

 

3.7           Change of Lending Office.  Each Lender agrees that upon the occurrence
of any event giving rise to increased costs or other special payments under Sections
3.5(a)(ii) and (iii), Section 3.5(c),  Section 2.8(i)
or Section 4.8(c) with respect to such Lender, it will, if requested by
the Funds Administrator, use reasonable efforts (subject to overall policy
considerations of such Lender) to designate another Lending Office for any
Loans or Letters of Credit affected by such event, provided that such
designation is made on such terms that such Lender and its Lending Office
suffer no economic, legal or regulatory disadvantage, with the object of
avoiding the consequence of the event giving rise to the operation of such
Section.  Nothing in this Section 3.7
shall affect or postpone any of the Obligations of the Borrowers or the rights
of any Lender provided in this Agreement.

 

ARTICLE IV 

REPAYMENTS;
REDUCTION OF COMMITMENTS; PAYMENTS AND PREPAYMENTS

 

4.1           Repayment.  The Borrowers shall repay the aggregate
outstanding principal amount of the Revolving Loans on the Commitment
Termination Date.

 

4.2           Voluntary Reduction of Commitments.  Upon at least one Business Days’ prior
written notice (or telephonic notice confirmed in writing) to Administrative
Agent at the Payment Office (which notice Administrative Agent shall promptly
transmit to each Revolving Lender), Borrowers shall have the right, without
premium or penalty, to terminate the unutilized portion of the Revolving
Commitments, in part or in whole; provided that (x) any such voluntary
termination of the Revolving Commitments shall apply to proportionately and
permanently

 

61

 

reduce
the Revolving Commitment of each Revolving Lender, (y) any partial voluntary
reduction pursuant to this Section 4.2 shall be in the amount of at
least $5,000,000  and integral multiples
of $1,000,000 in excess of that amount, and (z) any such voluntary termination
of the Revolving Commitments shall occur simultaneously with a voluntary
prepayment, if necessary, pursuant to Section 4.4 such that the total of
the Revolving Commitments shall not be so reduced below the aggregate principal
amount of outstanding Revolving Loans plus the aggregate LC Obligations.

 

4.3           Mandatory Reductions of Commitments.

 

(a)           Reduction of
Revolving Commitment.  The Revolving
Commitments shall be reduced at the times and in the amounts as required
pursuant to Section 4.5(b) and Section 4.5(h).

 

(b)           Proportionate
Reductions.  Each reduction or
adjustment to the Revolving Commitments pursuant to this Section 4.3
shall apply proportionately to the Revolving Commitment of each Lender.

 

4.4           Voluntary Prepayments.  The Borrowers shall have the right to prepay
any Borrowing in whole or in part from time to time on the following terms and
conditions: (i) the Funds Administrator shall give an irrevocable written
notice (or telephonic notice promptly confirmed in writing) to Administrative
Agent, which such notice shall state Borrowers’ intent to prepay such Loans,
the amount of such prepayment and the Loans to which such prepayment is to be
applied, which notice shall be given by the Funds Administrator to
Administrative Agent by 12:00 Noon (New York City time) at least three Business
Days prior to the date of such prepayment if a prepayment of Eurodollar Loans
or one Business Day for any other Loans and which notice shall promptly be transmitted
by Administrative Agent to each of the applicable Lenders; (ii) each partial
prepayment of any Borrowing (other than daily prepayments from the Master
Collection Account) shall be in an aggregate principal amount of at least
$1,000,000; (iii) Eurocurrency Loans may only be prepaid pursuant to this Section
4.4 on the last day of an Interest Period applicable thereto, or on any
other day subject to Section 3.4; and (iv) a partial prepayment of
Eurocurrency Loans shall not be made that would result in the remaining
aggregate outstanding principal amount thereof being less than the minimum
principal amount that would be required in respect of a Borrowing of similar
Eurocurrency Loans. Each prepayment in respect of any Borrowing shall be
applied pro rata among the Loans comprising such Borrowing.  The notice provisions, the provisions with
respect to the minimum amount of any prepayment and the provisions requiring
prepayments in integral multiples above such minimum amount are for the benefit
of Administrative Agent and may be waived unilaterally by Administrative Agent.

 

4.5           Mandatory Prepayments.

 

(a)           Prepayment of
Revolving Loans Upon Overadvance. 
The Borrowers shall prepay the outstanding principal amount of the
Revolving Loans on any date on which the aggregate outstanding principal amount
of such Loans together with the LC Obligations (after

 

62

 

giving
effect to any other repayments or prepayments on such day) exceeds the
aggregate Revolving Commitments.

 

(b)           Mandatory Prepayment
Upon a Change of Control. 
Simultaneously with any Change of Control, the Revolving Commitments
shall be reduced to zero and the Borrowers shall prepay, in full, the
outstanding principal amount of any outstanding Revolving Loans (and cash
collateralize any outstanding LC Obligations in an amount equal to 105% of the
LC Obligations), together with all accrued interest, fees, and other expenses
incurred by Administrative Agent, the Facing Bank or the Lenders as a result of
such Change in Control and prepayment.

 

(c)           Mandatory Prepayment
Upon Exceeding Borrowing Base.  At
any time that the aggregate principal amount of Loans and LC Obligations
outstanding exceeds the lesser of (i) the Borrowing Base or (ii) the Borrowing
Base as computed on the Pro Forma Borrowing Base Certificate delivered to
Administrative Agent pursuant to Section 4.5(e) or (g), the
Borrowers shall on such Business Day (x) repay the Revolving Loans in an amount
equal to such excess, and (y) thereafter, to the extent of any remaining
excess, provide cash collateral in an amount equal to 105% of the LC
Obligations to cash collateralize LC Obligations.  Any cash required to cash collateralize Obligations pursuant to
this Section 4.5(c) (the “Borrowing Base Cash Collateral Amount”)
shall be deposited or retained in the Master Collection Account and shall
constitute cash collateral subject to release or application to the Obligations
as provided herein or in the Security Documents.

 

(d)             Mandatory Prepayment of Revolving Loans
After Event of Default.  Upon the
occurrence and during the continuance of any Event of Default, at 5:00 P.M.
(New York City time) on any Business Day on which Revolving Loans are
outstanding and funds are on deposit in the Master Collection Account,
Collateral Agent shall transfer from the Master Collection Account an amount
equal to the Master Collection Account Balance first, to prepay
outstanding Revolving Loans and second to cash collateralize outstanding
Letters of Credit in an amount equal to 105% of the LC Obligations, and third,
at Funds Administrator’s request to any accounts established or maintained in
compliance with the provisions of Section 8.17.

 

(e)           Mandatory Prepayment
After Asset Disposition.  On the
Business Day on which any Asset Disposition occurs, the Funds Administrator
shall deliver to Administrative Agent a Borrowing Base certificate prepared on
a pro forma basis (a “Pro Forma Borrowing Base Certificate”) giving
effect to such Asset Disposition and setting forth the value of the Inventory
and Receivables previously included in the Borrowing Base and disposed of in
such Asset Disposition.  On such
Business Day, Borrowers shall prepay the Loans in an amount equal to the change
in the Borrowing Base as reflected in such Pro Forma Borrowing Base
Certificate.

 

(f)            Daily Mandatory
Prepayment of Revolving Loans.  On
any Business Day on which Revolving Loans are outstanding and funds are on
deposit in the Master Collection Account, Collateral Agent shall transfer from
the Master Collection Account an amount equal to the Master Collection Account
Balance to prepay outstanding Revolving Loans. 
If funds remain in the Master Collection Account after giving effect to
the provisions of the preceding sentence, such remaining balance shall be
retained in the Master Collection Account; provided, that,

 

63

 

subject
to Section 4.5(d), if no Loans are outstanding, such funds may be
transferred at the Funds Administrator’s request to any accounts established or
maintained in compliance with the provisions of Section 8.17.

 

(g)           Mandatory Prepayment
Upon Recovery Event.  Promptly
following the occurrence of any event of a type specified in the definition of
Recovery Event, the Funds Administrator shall deliver to Administrative Agent a
Pro Forma Borrowing Base Certificate setting forth the change in the Borrowing
Base as a result of such Recovery Event. 
The Borrowers shall prepay the Loans in an amount equal to the change in
the Borrowing Base as reflected in such Pro Forma Borrowing Base Certificate.

 

(h)           Mandatory Prepayment
on December 30, 2005.  If, as of the
close of business on December 29, 2005, the outstanding principal amount of
Term B Loans (as defined in the Amended and Restated Credit Agreement) shall
exceed $100 million, Borrowers shall on the following Business Day prepay, in
full, the outstanding principal amount of any outstanding Revolving Loans (and
cash collateralize any outstanding LC Obligations in an amount equal to 105% of
the LC Obligations), together with all accrued interest, fees and other
expenses due and owing to Administrative Agent and the Lenders, and the
Revolving Commitments shall be reduced to zero.  The Company shall keep Administrative Agent informed of its plans
with respect to the prepayment of the Term B Loans as contemplated by this Section
4.5(h).

 

4.6           Payments.

 

(a)           Master Collection
Account.  To the extent, pursuant to
this Agreement and after giving effect to the prepayments required by Section
4.5(c), the aggregate Revolving Commitments would be reduced below the
amount of LC Obligations or the Borrowing Base is less than the LC Obligations,
Borrowers shall cash collateralize such LC Obligations in an amount equal to
105% of the aggregate stated amount of LC Obligations by depositing and/or
maintaining the Borrowing Base Cash Collateral Amount with Administrative Agent
in the Master Collection Account.  In
the event that cash collateral is held in the Master Collection Account
pursuant to Section 4.5(c), and thereafter an Event of Default occurs,
such cash shall immediately be applied in the manner specified in Section
4.5(d).

 

(b)           Prepayments.  Except as expressly provided in this
Agreement, all amounts received by the Administrative Agent pursuant to Section
4.5 shall be distributed in the following order and if to the Lenders,
according to each Lender’s Revolving Pro Rata Share with respect to each
category set forth below:

 

first,
to the payment of any fees, costs or expenses due and payable to Administrative
Agent under any of the Loan Documents, including amounts advanced by
Administrative Agent on behalf of the Lenders pursuant to Section 4.9(b);

 

second,
during an Event of Default relating to a Bankruptcy Event, to the payment of
the unpaid principal amounts of the drawings under Letters of Credit payable to
the Facing Bank, together with accrued but unpaid interest thereon;

 

64

 

third,
to the ratable payment of any fees, costs and expenses due and payable to the
Lenders under any of the Loan Documents, other than to a Lender in its capacity
as a Facing Bank and other than those Obligations specifically referred to in
this Section 4.6(b);

 

fourth,
to the ratable payment of interest due on the Loans;

 

fifth,
to the ratable payment of principal due on the Base Rate Loans;

 

sixth,
to the payment of the outstanding balance of the other Revolving Loans (or, if
no Revolving Loans are outstanding, to the cash collateralization of LC
Obligations in an amount equal to 105% of the aggregate stated amount of LC
Obligations as required by the terms of this Agreement) and with respect to
Eurodollar Loans in such order as the Funds Administrator shall request (and in
the absence of such request, as Administrative Agent shall determine);

 

seventh,
to the ratable payment of other Obligations not specifically referred to in
this Section 4.6(b) due and payable to the Lenders (in their capacities
as such, and not in their capacity as a Facing Bank) under the Loan Documents;
and

 

eighth,
to the ratable payment of other Obligations not specifically referred to in
this Section 4.6(b) due and payable to any Facing Banks under any
Letters of Credit.

 

If any prepayment of
Eurodollar Loans made pursuant to a single Borrowing shall reduce the
outstanding Loans made pursuant to such Borrowing to an amount less than One
Million Dollars ($1,000,000), such Borrowing shall immediately be converted
into Base Rate Loans.  All prepayments
shall include payment of accrued interest on the principal amount so prepaid,
shall be applied to the payment of interest before application to principal and
shall be subject to the requirements of Section 3.4.

 

4.7           Method and Place of Payment by
Borrowers.

 

(a)           Except as otherwise
specifically provided herein, all payments (including prepayments) to be made
by the Borrowers on account of principal, interest, fees and other amounts
required hereunder shall be made without set-off or counterclaim and shall,
except as otherwise expressly provided herein, be made to Administrative Agent
for the ratable account of the applicable Lenders in Dollars and in immediately
available funds, no later than 2:00 P.M. (New York city time) on the date
specified herein.  Any such payment
shall be made to such account of Administrative Agent as Administrative Agent
shall specify by notice to the Funds Administrator, provided that unless and
until otherwise specified, all such payments payable in Dollars shall be made
to Administrative Agent at its office at 233 South Wacker Drive, Suite 8400,
Chicago, Illinois 60606.  Administrative
Agent will promptly distribute to each Lender its applicable Revolving Pro Rata
Share (or other applicable share as expressly provided herein), as the case may
be, of such principal, interest, fees or other amounts, in like funds as
received.  Any payment which is received
by Administrative Agent later than 2:00 P.M. (local time in the place

 

65

 

of
payment) shall be deemed to have been received on the immediately succeeding
Business Day and any applicable interest or fee shall continue to accrue until
such payment is deemed to have been received.

 

(b)           Whenever any payment
hereunder shall be stated to be due on a day other than a Business Day, such
payment shall be made on the next succeeding Business Day, and such extension
of time shall in such case be included in the computation of interest or fees,
as the case may be, subject to the provisions set forth in the definition of
“Interest Period” herein.

 

(c)           Unless Administrative
Agent shall have received notice from the Funds Administrator prior to the date
on which any payment is due to the Lenders hereunder that Borrowers will not
make such payment in full, Administrative Agent may assume that Borrowers have
made such payment in full to Administrative Agent as required hereunder on such
date and Administrative Agent may (but shall not be so required), in reliance
upon such assumption, cause to be distributed to each Lender on such due date
an amount equal to the amount then due such Lender.  If and to the extent Borrowers shall not have made such payment
in full to Administrative Agent, each Lender shall repay to Administrative
Agent on demand such amount distributed to such Lender, together with interest
thereon for each day from the date such amount was distributed to such Lender
until the date such Lender repays such amount to Administrative Agent, at the
Federal Funds Rate as in effect for each such day.

 

4.8           Net
Payments.

 

(a)           All payments made by
the Borrowers hereunder or under any Loan Document will be made without setoff,
counterclaim or other defense.  Except
as provided in Section 4.8(d), all payments hereunder and under any
of the Loan Documents (including, without limitation, payments on account of
principal and interest and fees) shall be made by the Borrowers free and clear
of and without deduction or withholding for or on account of any present or
future tax, duty, levy, impost, assessment or other charge of whatever nature
now or hereafter imposed by any Governmental Authority, but excluding
therefrom:

 

(i)            a
tax imposed on or measured by the overall net income (including a franchise tax
based on net income) of the Lender or its lending offices by the USA or
jurisdictions or political subdivision or taxing authority thereof in which
such Lender’s principal office or lending offices are located or are resident
or in which such Lender is incorporated;

 

(ii)           in
the case of any Lender organized under the laws of any jurisdiction other than
the USA or any state thereof (including the District of Columbia), any taxes
imposed by the USA by means of withholding at the source unless such
withholding results from a change in applicable law, treaty or regulations or
the interpretation or administration thereof (including, without limitation,
any guideline or policy not having the force of law) by any authority charged
with the administration thereof subsequent to the date such Lender becomes a
Lender with respect to the Loan or portion thereof affected by such change;

 

66

 

(iii)          any taxes to which the Lender (to the extent
of the tax rate then in effect) would be subject to (as of the Closing Date) if
a payment hereunder had been received by the Lender and, with respect to any
Lender that becomes a party hereto after the date hereof, any taxes to which
such Lender (to the extent of the tax rate then in effect) would be subject as
of the date it becomes a party hereto if a payment had been received by the
Lender (other than taxes which each other Lender is entitled to reimbursement
pursuant to this Agreement)

 

(iv)          taxes
to which the Lender becomes subject subsequent to the date referred to in
clause (iii) above as a result of a change in the residence, place of
incorporation, or principal place of business of the Lender, a change in the
branch or lending office of the Lender participating in the transactions set
forth herein or other similar circumstances unless such change or similar
circumstance shall have been made at the request of the Funds Administrator,
and

 

(v)           taxes
as a result of the recognition by the Lender of gain on the sale, assignment or
participation by the Lender of the participating interests in its creditor
positions hereunder (such tax or taxes, other than excluded tax or taxes, being
herein referred to as “Tax” or “Taxes”).  If any Borrower is required by law to make
any deduction or withholding of any Taxes from any payment due hereunder or
under any of the Loan Documents, then the amount payable will be increased to
such amount which, after deduction from such increased amount of all such Taxes
required to be withheld or deducted therefrom, will not be less than the amount
due and payable hereunder had no such deduction or withholding been required.  A certificate as to any additional amounts
payable to a Lender under this Section 4.8 submitted to the Funds
Administrator by such Lender shall show in reasonable detail the amount payable
and the calculations used to determine in good faith such amount and shall,
absent manifest error, be final, conclusive and binding upon all parties
hereto.

 

(b)           If any Borrower makes
any payment hereunder or under any of the Loan Documents in respect of which it
is required by law to make any deduction or withholding of any Taxes, it shall
pay the full amount to be deducted or withheld to the relevant taxation or
other authority within the time allowed for such payment under applicable law
and shall deliver to the Lenders within 30 days after it has made such payment
to the applicable authority a receipt issued by such authority evidencing the
payment to such authority of all amounts so required to be deducted or withheld
from such payment.

 

(c)           Without prejudice to
the other provisions of this Section 4.8, if any Lender, or
Administrative Agent on its behalf, is required by law to make any payment on
account of Taxes on or in relation to any amount received or receivable
hereunder or under any of the Loan Documents by such Lender, or Administrative
Agent on its behalf, or any liability for Tax in respect of any such payment is
imposed, levied or assessed against any Lender or Administrative Agent on its
behalf, Borrowers will promptly, following receipt of the certificate described
in the immediately following sentence, indemnify such person against such Tax
payment or liability, together with any interest, penalties and expenses
(including reasonable counsel fees and expenses) payable or incurred in
connection therewith, including any tax of any

 

67

 

Lender
arising by virtue of payments under this Section 4.8(c), computed
in a manner consistent with this Section 4.8(c).  A certificate prepared in good faith as to
the amount of such payment by such Lender, or Administrative Agent on its
behalf, showing calculations thereof in reasonable detail, absent manifest
error, shall be final, conclusive and binding upon all parties hereto for all
purposes.

 

(d)           Each Lender that is not
a USA person (as such term is defined in Section 7701(a)(30) of the Code)
agrees to deliver to the Funds Administrator and Administrative Agent on or
prior to the Closing Date, or in the case of a Lender that is an Assignee of an
interest under this Agreement (unless the respective Lender was already a Lender
hereunder immediately prior to such assignment), on the date of such assignment
to such Lender, (i) two accurate and complete original signed copies of IRS
Form W-8BEN, W-8ECI or W-8IMY (or successor or other applicable forms
prescribed by the IRS) certifying to such Lender’s entitlement to a complete
exemption from or reduced rate of USA withholding tax on interest payments to
be made under this Agreement and under any Note, or (ii) if the Lender is not a
“bank” within the meaning of Section 881(c)(3)(A) of the Code and cannot
deliver the applicable form pursuant to clause (i) above, (x) a certificate
substantially in the form of Exhibit 4.8(d) (any such certificate,
a “Section 4.8(d)(ii) Certificate”) and (y) two accurate and complete
original signed copies of IRS Form W-8 BEN or W-8ECI (or successor form)
certifying to such Lender’s entitlement to a complete exemption from USA
withholding tax on payments of interest to be made under this Agreement and
under any Note; provided, however, that no Lender shall be
required to deliver a an IRS Form W-8BEN, W-8ECI, W-8IMY, or
Section 4.8(d)(ii) Certificate under this Section 4.8(d) to the
extent that the delivery of such form is not authorized by law; provided
further, however, that in the event that a Lender provides the
Funds Administrator or the Administrative Agent with an IRS Form W-8IMY (or
substitute form) indicating that it is a “flow through” entity, as defined in
Treasury Regulations promulgated under Section 1441 of the Code, or otherwise,
not a beneficial owner of interest payments under this Agreement and under any
Note, such Lender agrees, on or prior to the Closing Date, or the date of
assignment to such Lender, as applicable, to take any actions necessary, and to
deliver to the Funds Administrator and Administrative Agent all forms
necessary, to establish such Lender’s entitlement to a complete exemption from,
or a reduction in, USA withholding tax on payments of interest to be made under
this Agreement and under any Note, including causing its partners, members,
beneficiaries, beneficial owners, and their beneficial owners, if any, to take
any actions and deliver any forms necessary to establish such exemption.  Notwithstanding the foregoing, (i) a
fiscally transparent entity may provide an IRS Form W-8BEN to claim a treaty
exemption or rate reduction to the extent that such entity is receiving
interest and is not treated as fiscally transparent by its own
jurisdiction,  provided the satisfaction
of such conditions entitles the Lender to an exemption or reduction from
withholding at the time such Lender becomes a party to this Agreement and (ii)
a withholding foreign partnership, withholding foreign trust, and qualified
intermediary shall only provide such information as is required by Treasury
Regulations promulgated under Code Section 1441.  For purposes of this Agreement, the term “Forms” shall include
any attachments for to IRS Forms W-8IMY required to be filed by the
Lender.  In addition, each Lender agrees
that from time to time after the Closing Date, when a lapse in time or change
in circumstances renders the previous certification obsolete or inaccurate in
any material respect, such Lender will deliver to the Funds Administrator and
Administrative Agent two new accurate and complete original signed copies of an
IRS Form W-8BEN, W-8ECI,

 

68

 

or
W-8IMY and a Section 4.8(d)(ii) Certificate, as the case may be, and such other
forms as may be required in order to confirm or establish the entitlement of such
Lender (or its partners, members, beneficiaries, or beneficial owners) to a
continued exemption from or reduction in USA withholding Tax on interest
payments under this Agreement and any Note, or it shall immediately notify the
Funds Administrator and Administrative Agent of its inability to deliver any
such form or certificate; provided, however, that no Lender shall
be required to deliver an IRS Form W8-BEN, W-8ECI, or W-8IMY under this Section
4.8(d) to the extent that the delivery of such form is not authorized by
law; provided, further, however, that any Lender which
does not deliver the applicable form pursuant to Section 4.8(d) shall be
entitled to additional payment pursuant to Section 4.8(a) or
indemnification under Section 4.8(c) only if and to the extent (i) such
failure results solely from a change in law or (ii) the Tax to which such
additional payment or indemnification relates would have been imposed
regardless of whether such Lender provided such forms.  Notwithstanding anything to the contrary
contained in Section 4.8, any Lender that has not provided to the Funds
Administrator the IRS Forms required to be provided to the Funds Administrator
pursuant to this Section 4.8(d) shall not be entitled to any payment of
additional amounts pursuant to Section 4.8(a) or indemnification under Section
4.8(c) with respect to any deduction or withholding which would not have
been required if such Lender had provided such forms.

 

(e)           Each Lender that is
incorporated or organized under the laws of the USA or a state thereof shall
provide two properly completed and duly executed copies of IRS Form W-9, or any
successor or other applicable form. 
Each Lender shall deliver to the Funds Administrator and Administrative
Agent (provided that such Lender remains lawfully able to do so), two further
duly executed forms and statements, properly completed in all material
respects, at or before the time any such form or statement expires or becomes
obsolete, or otherwise as reasonably requested by the Funds Administrator.  Each Lender shall promptly notify the Funds
Administrator at any time it determines that it is no longer in a position to
provide any previously delivered certificate to the Funds Administrator (or any
other form or certification adopted by U.S. taxing authorities for such
purpose).

 

(f)            Each Lender agrees
that, as promptly as practicable after it becomes aware of the occurrence of
any event or the existence of any condition that would cause any Borrower to
make a payment in respect of any Taxes to such Lender pursuant to Section
4.8(a) or a payment in indemnification for any Taxes pursuant to Section
4.8(c), it will use reasonable efforts to make, fund or maintain the Loan
(or portion thereof) of such Lender with respect to which the aforementioned
payment is or would be made through another lending office of such Lender or
take any other action reasonably requested by such Borrower if as a result
thereof the additional amounts which would otherwise be required to be paid by
such Borrower in respect of such Loans (or portions thereof) or participation
in Letters of Credit  pursuant to Section 4.8(a) or Section
4.8(c) would be materially reduced, and if, as determined by such Lender,
in its reasonable discretion, the making, funding or maintaining of such Loans
or participation in Letters of Credit (or portions thereof) through such other
lending office or taking of such other action would not otherwise materially
adversely affect such Loans or such Lender. 
The Borrowers agree to pay all reasonable expenses incurred by any
Lender in utilizing another lending office of such Lender or taking of such
other action pursuant to this Section 4.8(f).

 

69

 

4.9           Payments by the Lenders to
Administrative Agent.

 

(a)           Except as provided in Section
4.9(b), Administrative Agent shall give to each Lender prompt notice of
each Notice of Borrowing by telecopy or facsimile transmission.  No later than 3:00 P.M. (New York City time)
on the date of receipt of each Notice of Borrowing (unless such Notice of
Borrowing specifies the Closing Date as the date of Borrowing, in which case no
later than 11:00 A.M. on the Closing Date), each Lender will make available for
the account of its Lending Office, to Administrative Agent at the address of
Administrative Agent, in immediately available funds, its Revolving Pro Rata
Share of such Borrowing requested to be made. 
Unless Administrative Agent shall have been notified by any Lender prior
to the date of Borrowing that such Lender does not intend to make available to
Administrative Agent its portion of the Borrowing to be made on such date,
Administrative Agent may assume that such Lender will make such amount
available to Administrative Agent on the Settlement Date and Administrative
Agent, in reliance upon such assumption, may but shall not be obligated to make
available the amount of the Borrowing to be provided by such Lender. If and to
the extent such Lender shall not have so made available to Administrative Agent
its Revolving Pro Rata Share on such date and Administrative Agent shall have
so made available to the Borrowers a corresponding amount on behalf of such
Lender, Administrative Agent may recover such amount on demand from such Lender
in accordance with Section 13.5. 
If such Lender does not pay such corresponding amount promptly upon
Administrative Agent’s demand therefor, Administrative Agent may promptly
notify the Funds Administrator and the Borrowers shall immediately repay such
corresponding amount to Administrative Agent together with accrued interest
thereon at the applicable rate or rates provided in Section 3.1 without
making or being responsible for any payment under Section 3.4.

 

(b)           Settlement of
Advances.  Unless the Required
Lenders have instructed Administrative Agent to the contrary, Administrative
Agent on behalf of Lenders may, but shall not be obligated to, make Base Rate
Loans under Section 2.2 without prior notice of the proposed Borrowing
to the Lenders.  Loans made pursuant to
this Section 4.9(b) shall be subject to the following settlement
arrangements:

 

(i)            The
amount of each Lender’s Revolving Pro Rata Share of such Loans shall be
computed weekly (or more frequently in Administrative Agent’s discretion) and
shall be adjusted upward or downward on the basis of the amount of outstanding
Loans as of 5:00 P.M. (New York City time) on the last Business Day of the
period specified by Administrative Agent (such date, the “Settlement Date”).  Administrative Agent shall deliver to each
of the Lenders promptly after the Settlement Date a summary statement of the
amount of such outstanding Loans for such period.  The Lenders shall transfer to Administrative Agent such amounts
as are necessary so that (after giving effect to all such transfers) the amount
of Loans made by each Lender shall be equal to such Lender’s Revolving Pro Rata
Share of the aggregate amount of Loans outstanding as of such Settlement Date.
During an Event of Default or Unmatured Event of Default relating to a
Bankruptcy Event, amounts required to be transferred by the Lenders to
Administrative Agent shall, instead of constituting Loans to the Borrowers, be
in the form of participations purchased by the Lenders in the outstanding Loans
of DB, acting as Administrative Agent. 
If the summary statement is received by the Lenders

 

70

 

prior
to 12:00 Noon (New York City time) on any Business Day, each Lender shall make
the transfers described above in immediately available funds no later than 3:00
P.M. (New York City time) on the day such summary statement was received; and
if such summary statement is received by the Lenders after 12:00 Noon (New York
City time) on such day, each Lender shall make such transfers no later than
3:00 P.M. (New York City time) on the next succeeding Business Day.  The obligation of each of the Lenders to
transfer such funds shall be irrevocable and unconditional and without recourse
to or warranty by Administrative Agent. Each of Administrative Agent and the
Lenders agrees to mark its books and records on the Settlement Date to show at
all times the dollar amount of its Revolving Pro Rata Share of the outstanding
Loans.

 

(ii)           To
the extent that the settlement described above shall not yet have occurred,
upon repayment of Loans by the Borrowers, Administrative Agent may first apply
such amounts repaid directly to the amounts made available by Administrative
Agent pursuant to this Section 4.9(b).

 

(iii)          Because Administrative Agent on behalf of the
Lenders may be advancing and/or may be repaid Loans prior to the time when the
Lenders will actually advance and/or be repaid Loans, interest with respect to
Loans shall be allocated by Administrative Agent to each Lender and
Administrative Agent in accordance with the amount of Loans actually advanced
by and repaid to each Lender and Administrative Agent and shall accrue from and
including the date such Loans are so advanced to but excluding the date such
Loans are either repaid by the Borrowers in accordance with Section 4.5
or actually settled by the applicable Lender as described in this Section
4.9(b).

 

(c)           The failure of any
Lender to make any Loan on any date of Borrowing shall not relieve any other
Lender of any obligation hereunder to make a Loan on the date of such
Borrowing, but no Lender shall be responsible for the failure of any other
Lender to make the Loan or such advance to be made by such other Lender on the
date of any Borrowing.

 

4.10         Sharing of Payments; etc.

 

(a)           If, other than as
expressly set forth elsewhere herein, any Lender shall obtain on account of the
Loans made by it, any payment (whether voluntary, involuntary, through the
exercise of any right of setoffs, or otherwise) in excess of its applicable
Revolving Pro Rata Share (or other pro rata share as expressly provided herein)
of payments on account of Loans made or participated in by all the Lenders
under any Facility, such Lender shall forthwith (x) notify Administrative Agent
of such fact, and (y) purchase from the other Lenders in such Facility, such
participations in the Loans, made by them and then due, as the case may be, as
shall be necessary to cause such purchasing Lender to share the excess payment
ratably with each of them; provided, however, that if all or any
portion of such excess payment is thereafter recovered from the purchasing
Lender, such purchase shall to that extent be rescinded and each other Lender
shall repay to the purchasing Lender the purchase price paid therefor together
with an amount equal to such paying Lender’s applicable Pro Rata Share
(according to the proportion of (i) the amount of such paying Lender’s required
repayment to (ii) the total amount so

 

71

 

recovered
from the purchasing Lender) of any interest or other amount paid or payable by
the purchasing Lender in respect of the total amount so recovered.  Administrative Agent will keep records
(which shall be conclusive and binding in the absence of manifest error), of
participations purchased pursuant to this Section 4.10(a) and will in
each case promptly notify the Lenders and Borrower following any such
purchases.  Any payments received after
the Lenders have taken action pursuant to this Section 4.10(a) shall be
allocated ratably among the Revolving Loans. 
Any payments received after the Lenders have taken action pursuant to
this Section 4.10(a) shall be allocated ratably among the Loans.

 

(b)           Each Borrower agrees
that any Lender so purchasing a participation from another Lender pursuant to
this Section 4.10 may, to the fullest extent permitted by law, exercise
all its rights of payment (including the right of setoffs, but subject to Section
13.6) with respect to such participation as fully as if such Lender were
the direct creditor of such Borrower in the amount of such participation.

 

(c)           Nothing herein shall
require any Lender to exercise any right of setoffs or similar rights or shall
affect the right of any Lender to exercise, and retain the benefits of
exercising, any such right with respect to any other indebtedness or obligation
of any Borrower.

 

4.11         Maintenance of Account.  Administrative Agent shall maintain a
separate account on its books and records in the name of Borrowers (“Borrowers’
Account”) in which the Borrowers will be charged or credited with (w) the
proceeds, if any, of each Loan received by or for the account of Borrowers, (x)
payments made to Administrative Agent on account of the Obligations of
Borrowers, whether from collection of proceeds of Collateral or otherwise, (y)
the aggregate face amount of all outstanding Letters of Credit issued for the
benefit of Borrowers, and (z) all other fees, expenses and other Obligations
attributable to Borrowers as determined by Administrative Agent.  In no event shall prior recourse to any
Inventory, Receivables or other Collateral be a prerequisite to Administrative
Agent’s right to demand payment of any Obligation upon its maturity.

 

4.12         Statement of Account.  After the end of each month, Administrative
Agent shall send the Funds Administrator a statement accounting for the
charges, loans, advances and other transactions occurring among and between
Administrative Agent, the Lenders and the Borrowers during that month.  The monthly statements shall, absent
manifest error, be final, conclusive and binding on the Borrowers; provided
that any failure to so record any transaction or any error in so recording
shall not limit or otherwise affect any Borrower’s duty to pay the Obligations.

 

ARTICLE V  

CONDITIONS
OF CREDIT

 

5.1           Conditions Precedent to the
effectiveness of the Agreement.  The
obligation of the Lenders to make the Revolving Loans and the obligation of the
Facing Bank to issue and the Lenders to participate in Letters of Credit under
this Agreement shall be subject to

 

72

 

the
fulfillment, at or prior to the time of the making of such Loans, of each of
the following conditions:

 

(a)           Loan Documents.

 

(i)            Credit
Agreement and Notes.  The Borrowers
shall have duly executed and delivered to Administrative Agent, with a signed
counterpart for each Lender, this Agreement and, to the extent requested by any
Lender, the Notes payable to the order of such requesting Lender.

 

(ii)           Security
Documents.  The Company, HSCHC and
each Restricted Domestic Subsidiary of the Company (other than IRIC) shall have
duly authorized, executed and delivered a Security Agreement in substantially
the form of Exhibit 5.1(a)(ii) (as modified, supplemented or amended
from time to time, the “Security Agreement”) and shall have delivered to
the Collateral Agent, all the Pledged Securities and Pledged Intercompany Notes
referred to therein then owned, if any, by any Credit Party, (x) endorsed in
blank in the case of promissory notes constituting Pledged Securities and (y)
together with executed and undated stock powers, in the case of Capital Stock
constituting Pledged Securities and the other documents and instruments
required to be delivered under the Security Agreements together with:

 

(A)          proper financing
statements (Form UCC-1 or such other financing statements or similar notices as
shall be required by local law) fully executed for filing under the UCC or
other appropriate filing offices of each jurisdiction as may be necessary or,
in the opinion of Administrative Agent, desirable to perfect the security
interests purported to be created by the Security Agreement;

 

(B)           copies of Requests for
Information or Copies (Form UCC-1), or equivalent reports, listing all
effective financing statements or similar notices that name a Borrower or its
Restricted Domestic Subsidiaries (by its actual name or any trade name,
fictitious name or similar name), or any division or other operating unit
thereof, as debtor and that are filed in the jurisdictions referred to in
clause (i), together with copies of such other financing statements (none of
which shall cover the Collateral except to the extent evidencing Permitted
Liens or for which Administrative Agent shall have received satisfactory
evidence of release);

 

(C)           such amendments,
modifications or supplements to the Pledged Intercompany Notes as may be
requested by Administrative Agent, each such amendment, modification or
supplement to be in a form satisfactory to Administrative Agent; and

 

(D)          all other actions as may
be necessary or, in the opinion of Administrative Agent, desirable to perfect
(or be in a position to perfect by the filing of financing statements) the
security interests intended to be created by the Security Agreement.

 

73

 

(iii)          Subsidiary Guarantee Agreements.

 

(A)          Subsidiary Guarantee
Agreement.  HSCHC and each
Restricted Domestic Subsidiary of the Company (other than IRIC) shall have duly
executed and delivered the Subsidiary Guarantee Agreement substantially in the
form of Exhibit 5.1(a)(iii)(A) (as modified, supplemented or amended
from time to time, the “Subsidiary Guarantee Agreement”).

 

(B)           Subsidiary Guarantee
Agreements.  HSCC shall have duly
executed and delivered a Subsidiary Guaranty Agreement substantially in the
form of Exhibit 5.1(a)(iii)(B) (as modified, supplemented or amended
from time to time, the “HSCC Subsidiary Guarantee Agreement” and,
together with the Subsidiary Guarantee Agreement, the “Subsidiary Guarantee
Agreements”).

 

(iv)          Collateral
Account Agreements.  Administrative
Agent shall have received a fully executed Collateral Account Agreement in
substantially the form of Exhibit 1.1(d) attached hereto (each together
with such modifications thereto as may be agreeable to Administrative Agent,
a  “Collateral Account Agreement”)
shall have been entered into with respect to each of the Deposit Accounts
referenced in Schedule 6.21(f).

 

(v)           Pledge
Agreement.  HSCC shall have duly
executed and delivered the Pledge Agreement substantially in the form of Exhibit
5.1(a)(v) (as modified, supplemented or amended from time to time, the “Pledge
Agreement”) pursuant to which HSCC shall have pledged 30% of the membership
units of HIH to the Collateral Agent.

 

(vi)          Mortgage;
Title Insurance; Surveys. 
Administrative Agent shall have received (A) fully executed counterparts
of mortgages or amendments to mortgages (collectively, the “Mortgages”)
in each case in form and substance satisfactory to Administrative Agent, which
mortgages shall cover such of the Real Property owned by the Borrowers and their
Restricted Subsidiaries as shall be listed as mortgaged property on Schedule
6.21(c), together with evidence that counterparts of the Mortgages have
been delivered to the title insurance company for recording in all places to
the extent necessary or desirable, in the judgment of Administrative Agent, to
create a valid and enforceable lien on each Mortgaged Property in favor of the
Collateral Agent  (or such other trustee
as may be required or desired under local law) for the benefit of the Lenders
and the other Secured Parties under the Security Agreement, subject only to
Permitted Liens; (B) mortgagee title insurance policies issued by title
insurance companies satisfactory to Administrative Agent (the “Mortgage
Policies”) with respect to the Mortgaged Properties not already subject to
title insurance policies (each, an “Uninsured Mortgaged Property”) in
amounts satisfactory to Administrative Agent assuring Administrative Agent that
the Mortgages with respect to such Mortgaged Properties are valid and enforceable
mortgage liens on the respective Mortgaged Properties, free and clear of all
defects, encumbrances and other Liens except Permitted Liens, and the Mortgage
Policies shall be in form and substance satisfactory to Administrative Agent
and shall include, as appropriate, any other matter that Administrative Agent
in its discretion may request, shall not include an

 

74

 

exception
for mechanics’ liens, and shall provide for affirmative insurance and such
reinsurance as Administrative Agent in its discretion may request; and (C) to the extent requested by Administrative Agent, a
survey, in form and substance satisfactory to Administrative Agent, of each
Uninsured Mortgaged Property dated a recent date acceptable to Administrative
Agent, certified by a licensed professional surveyor satisfactory to
Administrative Agent, provided, however, in the event that any
survey delivered pursuant to this provision is dated on a date which is more
than six (6) months prior to the Closing Date, but less than one (1) year prior
to the Closing Date, such survey shall be acceptable so long as such survey
otherwise complies with the ALTA/ACSM standards required by Administrative
Agent, and the owner and/or lessee of the Mortgaged Property delivers a “no
change survey affidavit” in a form which is acceptable to the title insurance
company issuing the Mortgage Policy, so that the title insurance company will
delete any general survey exception in such Mortgage Policy.

 

(vii)         Perfection.  Each Credit Party shall have delivered to Administrative Agent
true and correct copies of Perfection Certificates in the form of Exhibit
5.1(a)(vii) (the “Perfection Certificates”), each of which shall be
in full force and effect and in form and substance satisfactory to
Administrative Agent as of the Closing Date.

 

(viii)        Holdco Agreement.  Holdco I and Holdco II shall have executed
and delivered an agreement in form and substance and on terms and conditions
satisfactory to the Administrative Agent (the “Holdco Agreement”).

 

(ix)           Horizon
Subordination Agreement.  The
Company shall have on or before the Closing Date, entered into an amended and
restated subordination agreement with Horizon Ventures, LLC in form and
substance and on terms and conditions satisfactory to Administrative Agent (the
“Horizon Subordination Agreement”).

 

(b)           Restructuring
Documents.

 

(i)            Restructuring
Agreement.  GOF and the Company
shall have entered into an Exchange Agreement (the “GOF Restructuring
Agreement”) substantially in the form of Exhibit 5.1(b)(i) and such
agreement shall remain in full force and effect.

 

(ii)           Holdco
Matters.  Holdco I shall have been
formed in the manner contemplated by the Term Sheet attached hereto as Exhibit
5.1(b)(ii), with such changes as are acceptable to the Administrative Agent
or, if adverse to the interests of the Lenders (as determined by the
Administrative Agent in its sole reasonable discretion after reasonable advance
notice of such proposed change), acceptable to the Required Lenders, and the
Administrative Agent shall be satisfied that such formation shall have occurred
in a manner satisfactory to it, including with respect to all matters
pertaining to the governance and capitalization of Holdco I and Holdco II.  Following such formation, each of the
following actions shall have been taken, each on terms and conditions and in
form and substance satisfactory to Administrative Agent with structural changes
to any of the following which are not adverse to the interests of the Lenders:

 

75

 

(A)          GOF shall have
contributed (or caused to be contributed) to Holdco I and Holdco I shall have,
in turn, contributed to Holdco II the rights and obligations under the ICI
Agreement;

 

(B)           The GOF Bonds shall
have been exchanged for equity of Holdco I pursuant to the GOF Restructuring
Agreement;

 

(C)           CPH (or its Affiliate)
shall have contributed (or caused to be contributed) all of its GOF Bonds to
Holdco I;

 

(D)          Huntsman Family Holdings
II Company, LLC shall have contributed (or caused to be contributed) 19.9% of
the Capital Stock of HSCHC to Holdco I, Holdco I shall have contributed or
cause to be contributed such Capital Stock to Holdco II and Holdco II shall
have, in turn, contributed such Capital Stock to Company such that, after
giving effect to such contributions the Company will own 100% of the equity of
HSCHC on the Closing Date;

 

(E)           Huntsman Family
Holdings II Company, LLC shall have contributed (or caused to be contributed)
all of the Capital Stock of the Company owned or held by it on the Closing Date
to Holdco I, Holdco I shall have contributed such Capital Stock to Holdco II;

 

(F)           Huntsman Family
Holdings II Company, LLC shall have contributed (or caused to be contributed)
20% of the Capital Stock of JK Holdings to Holdco I, Holdco I shall have
contributed such Capital Stock to Holdco II and Holdco II shall have, in turn,
contributed or cause to be contributed such equity to the Company;

 

(G)           Huntsman Family
Holdings II Company, LLC shall have contributed (or caused to be
contributed)  $500,000 of preferred
equity in Huntsman Petrochemical to Holdco I, Holdco I shall have contributed
such preferred stock to Holdco II and Holdco II shall have, in turn, contributed
or cause to be contributed such preferred stock to the Company; and

 

(H)          Huntsman Family Holdings
II Company, LLC shall have contributed (or caused to be contributed) the
contractual rights or an entity solely holding the contractual rights to
acquire the Australian Joint Venture Interests to Holdco I, Holdco I shall have
contributed such rights to Holdco II and Holdco II shall have, in turn,
contributed or cause to be contributed such rights to the Company.

 

(iii)          Restructuring.  The legal, organizational and financial
structure of the Company and its Subsidiaries (after giving effect to the
Restructuring) shall be acceptable to the Administrative Agent.  In addition, all financial, legal and tax
matters (including any tax legislation pending before Congress or any committee
thereof) relating to the Restructuring or the financing contemplated hereby
shall be satisfactory to the Administrative Agent.

 

76

 

(c)           Credit Party
Documents.  On or before the Closing
Date, the Borrowers shall deliver or cause to be delivered to Administrative
Agent the following with respect to each Credit Party:

 

(i)            Certified
copies of its Certificate or Articles of Incorporation, together with a good
standing certificate from the Secretary of State of the jurisdiction of its
incorporation and each other state in which it is qualified as a foreign
corporation to do business, except where, in the judgment of Administrative
Agent, the failure to be so qualified in a foreign jurisdiction would not be
material and, to the extent generally available, a certificate or other
evidence of good standing as to payment of any applicable franchise or similar
taxes from the appropriate taxing authority of each of such states, each dated
a recent date prior to the Closing Date;

 

(ii)           Copies
of its Bylaws, certified as of the Closing Date by its corporate secretary or
an assistant secretary;

 

(iii)          Resolutions of its Board of Directors (a)
approving and authorizing the execution, delivery and performance of each of
the Loan Documents to which it is a party, and (b) approving and authorizing
the execution, delivery and performance of the other Loan Documents to which it
is a party and all transactions related thereto, in each case certified as of
the Closing Date by its corporate secretary or an assistant secretary as being
in full force and effect without modification or amendments; and

 

(iv)          Signature
and incumbency certificates of its officers executing each of the Loan
Documents to which it is a party.

 

(d)           Third Party Loan
Documents.

 

(i)            Amended
and Restated Credit Agreement.  The
Company shall have executed and delivered the Amended and Restated Credit
Agreement and all conditions precedent to the effectiveness thereof shall have
been satisfied or waived.

 

(ii)           Amended
and Restated Senior Notes Indentures. 
On or before the Closing Date, after giving effect to the Transactions,
the Amended and Restated Senior Notes Indentures shall be in full force and
effect.

 

(iii)          Amended and Restated Polymers Indenture.  On or before the Closing Date after giving
effect to the Transactions, the Amended and Restated Polymers Indenture shall
be in full force and effect.

 

(e)           Certificates and
Opinions of Parties’ Counsel.

 

(i)            Representations
and Warranties; Default; Officer’s Certificate.  The representations and warranties set forth in Article VI
hereof shall be true and correct and no Event of Default or Unmatured Event of
Default shall have occurred or be continuing (after giving effect to this
Agreement) and Administrative Agent shall have received, with a signed
counterpart for each Lender, a certificate executed by a

 

77

 

Responsible
Officer on behalf of the Borrowers, dated the Closing Date and in the form of Exhibit
5.1(e)(i) hereto, stating that the representations and warranties set forth
in Article VI hereof are true and correct as of the date of the
certificate, that no Event of Default or Unmatured Event of Default has
occurred and is continuing (after giving effect to this Agreement), and that
the conditions of Section 5.1 hereof have been fully satisfied or
waived.

 

(ii)           Opinions
of Credit Parties’ Counsel.  Lenders
and their respective counsel shall have received (i) originally executed copies
of one or more favorable written opinions of Skadden, Arps, Slate, Meagher
& Flom, LLP counsel for the Credit Parties, in form and substance
reasonably satisfactory to Administrative Agent and its counsel, dated the
Closing Date and setting forth substantially the matters in the opinions designated
in Exhibit 5.1(e)(ii)-1 annexed hereto and as to such other matters as
Administrative Agent acting on behalf of Lenders may reasonably request, (ii)
originally executed copies of one or more favorable written opinions of Stoel
Rives LLP, in form and substance reasonably satisfactory to Administrative
Agent and its counsel, dated the Closing Date and setting forth substantially
the matters in the opinions designated in Exhibit 5.1(e)(ii)-2 annexed
hereto and as to such other matters as Administrative Agent acting on behalf of
Lenders may reasonably request, (iii) originally executed copies of one or more
favorable written opinions of such other local counsel to the Credit Parties as
Administrative Agent may request in form and substance reasonably satisfactory
to Administrative Agent and its counsel, dated the Closing Date and (iv)
evidence satisfactory to Administrative Agent that the Borrowers have requested
such counsel to deliver such opinions to Lenders.

 

(f)            Tax Sharing
Agreement.  Administrative Agent shall
have received a fully executed Tax Sharing Agreement in substantially the form
of Exhibit 5.1(f) attached hereto (together with such modifications
thereto as may be agreeable to Administrative Agent, the “Tax Sharing
Agreement”).

 

(g)           Approvals.  All necessary governmental (domestic and
foreign) and third party approvals in connection with the Transactions and the
transactions contemplated by the Loan Documents and otherwise referred to
herein or therein shall have been obtained and remain in effect, and all
applicable waiting periods shall have expired without any action being taken by
any competent authority which restrains, prevents or imposes materially adverse
conditions upon the consummation of all or any part of such Transactions or the
other transactions contemplated by the Loan Documents and otherwise referred to
herein or therein.  Additionally, there
shall not exist any judgment, order, injunction or other restraint issued or
filed or a hearing seeking injunctive relief or other restraint pending or
notified prohibiting or imposing materially adverse conditions upon all or any
part of the Transactions, the transactions contemplated by the Loan Documents.

 

(h)           Environmental
Reports.  Administrative Agent
shall have received copies of the most recent environmental risk assessment
reports in the possession of the Borrowers or their Subsidiaries or performed
at the request of the Borrowers or their Subsidiaries for any current and
former facilities of the Borrowers and their Subsidiaries.

 

78

 

(i)            Litigation.  No litigation by any entity (private or
governmental) shall be pending or, to the best knowledge of any Borrower,
threatened (except for litigation that would be rendered moot by, or would not
survive, the consummation of the Plan of Reorganization) with respect to this
Agreement, any other Loan Document or any documentation executed in connection
herewith or the transactions contemplated hereby (including, without
limitation, the Transactions), or which Administrative Agent or the Required
Lenders shall determine could reasonably be expected to have a Material Adverse
Effect.

 

(j)            Fees.  The Borrowers shall have paid to
Administrative Agent and the Lenders all costs, fees and expenses (including, without
limitation, legal fees and expenses) payable to Administrative Agent and the
Lenders to the extent then due.

 

(k)           Adverse Change.  Since December 31, 2001, nothing shall have
occurred (and the Lenders shall have become aware of no facts or conditions not
previously known) which Administrative Agent or the Required Lenders shall
reasonably determine has, or could have, a Material Adverse Effect.

 

(l)            Insurance.  Administrative Agent shall be satisfied with
the insurance coverage in effect on the Closing Date pertaining to the assets
of the Borrowers and their Restricted Subsidiaries, and shall have received
evidence satisfactory to it that Administrative Agent shall have been named as
a loss payee, mortgagee and additional insured on all such policies of
insurance, as appropriate.

 

(m)          Rating.  The Company shall have received a
prospective senior secured debt rating with respect to the Loans from each of
S&P and Moody’s.

 

(n)           Corporate
Proceedings.  All corporate and
legal proceedings and all instruments and agreements in connection with the
Transaction and the other transactions contemplated by this Agreement shall be
satisfactory in form and substance to Administrative Agent and, except as
otherwise agreed by Administrative Agent, shall have been consummated without
any waiver of any conditions or other provisions set forth therein and
Administrative Agent shall have received all information and copies of all
documents and papers, including records of corporate proceedings, governmental
approvals, good standing certificates and bring-down telegrams or certificates,
if any, which Administrative Agent or the Required Lenders reasonably may have
requested in connection therewith, such documents and papers where appropriate
to be certified by a Responsible Officer or by proper corporate or Governmental
Authorities.

 

(o)           Lock-Box Accounts
and Master Collection Account. 
Administrative Agent and Collateral Agent shall have received fully
executed copies of (i) Lock-Box Letters with respect to each Lock-Box, Lock-Box
Account and Lock-Box Bank and a Master Collection Account Agreement with
respect to the Master Collection Account.

 

(p)           Minimum Excess
Availability.  After giving effect
to all Loans on the Closing Date, there shall be unused availability under this
Agreement of at least $135,000,000.

 

79

 

(q)           Intercreditor
Agreement.  Administrative Agent
shall have received a fully executed copy of the Intercreditor Agreement.

 

Each Lender hereby agrees
that by its execution and delivery of its signature page hereto, such Lender
approves of and consents to each of the matters set forth in Section 5.1 which
must be approved by, or which must be satisfactory to, the Administrative Agent
(in the case of DB), or the Required Lenders or Lenders, as the case may be;
provided that, in the case of any agreement or document which must be approved
by, or which must be satisfactory to, the Lenders, Administrative Agent or the
Company shall have delivered a copy of such agreement or document to such
Lender if so requested on or prior to the Closing Date.

 

5.2           Conditions Precedent to All Credit
Events.  The obligation of each
Lender to make Loans (including Loans made on the Closing Date) and the
obligation of any Facing Bank to issue or any Lender to participate in any
Letter of Credit hereunder (except in each case where such Loan or Letter of
Credit issuance does not constitute a Credit Event) shall be subject to the
fulfillment in each case at or prior to the time of each any such Credit Event
of each of the following conditions:

 

(a)           Representations and
Warranties.  The representations and
warranties contained in this Agreement and the other Loan Documents shall each
be true and correct in all material respects at and as of such time, as though
made on and as of such time except to the extent such representations and
warranties are expressly made as of a specified date in which event such
representation and warranties shall be true and correct as of such specified
date.

 

(b)           No Default.  No Event of Default or Unmatured Event of
Default shall have occurred and shall then be continuing on such date or will
occur after giving effect to such Credit Event.

 

(c)           Notice of Borrowing;
Letter of Credit Request.

 

(i)            Prior
to the making of each Revolving Loan, Administrative Agent shall have received
a Notice of Borrowing meeting the requirements of Section 2.2(d).

 

(ii)           Prior
to the issuance or amendment of each Letter of Credit, Administrative Agent and
the respective Facing Bank shall have received a Letter of Credit Request or a
Letter of Credit Amendment Request meeting the requirements of Section
2.3(b).

 

(d)           Other Information.  Administrative Agent shall have received
such other instruments, documents and opinions as it may reasonably request in
connection with such Credit Event, and all such instruments and documents shall
be reasonably satisfactory in form and substance to Administrative Agent.

 

The acceptance of the
benefits of each such Credit Event by any Borrower shall be deemed to
constitute a representation and warranty by it to the effect of paragraphs (a),
(b) and (c) of this Section 5.2.

 

80

 

Each Lender hereby agrees
that by its execution and delivery of its signature page hereto and by the
funding of its Loan to be made on the Closing Date, such Lender approves of and
consents to each of the matters set forth in this Section 5.1 which must
be approved by, or which must be satisfactory to, Administrative Agent (in the
case of DB), or the Required Lenders or Lenders, as the case may be; provided
that, in the case of any agreement or document which must be approved by, or
which must be satisfactory to, the Required Lenders, Administrative Agent or
the Company shall have delivered a copy of such agreement or document to such
Lender on or prior to the Closing Date.

 

ARTICLE VI  

REPRESENTATIONS
AND WARRANTIES

 

In order to induce the
Lenders to enter into this Agreement and to make the Loans, and issue (or
participate in) the Letters of Credit as provided herein, each Borrower makes
the following representations and warranties (both before and after giving
effect to the consummation of the Transactions):

 

6.1           Corporate Status.  Each Borrower and each of their Subsidiaries (i) is a duly organized
and validly existing corporation, partnership, limited liability company, trust
or other entity in good standing under the laws of the jurisdiction of its
organization (or the equivalent thereof in the case of Foreign Subsidiaries)
except where the failure to be in such good standing would not have a Material
Adverse Effect, (ii) has the corporate or partnership or other requisite power
and authority to own its property and assets and to transact the business in
which it is engaged and presently proposed to engage in and (iii) is duly
qualified and is authorized to do business and is in good standing in each
other jurisdiction where the ownership, leasing or operation of property or the
conduct of its business requires such qualification, except for such failure to
be so qualified which, in the aggregate, would not have a Material Adverse
Effect.

 

6.2           Corporate
Power and Authority. 
Each Credit Party has the corporate or other appropriate power and
authority to execute, deliver and perform the terms and provisions of each of
the Loan Documents to which it is party and has taken all necessary corporate
or other appropriate action to authorize the execution, delivery and
performance by it of each of such Loan Documents.  Each Credit Party has duly executed and delivered each of the
Loan Documents to which it is party, and each of such Loan Documents
constitutes its legal, valid and binding obligation enforceable in accordance
with its terms, except to the extent that the enforceability thereof may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws generally affecting creditors’ rights and by equitable principles
(regardless of whether enforcement is sought in equity or at law).

 

6.3           No
Violation.  The execution, delivery
or performance by any Credit Party of the Loan Documents to which it is a party
(including, without limitation, the granting of Liens pursuant to the Security
Documents), nor compliance by it with the terms and provisions thereof, nor the
consummation of the transactions contemplated therein (i) will contravene any
provision

 

81

 

of
any Requirement of Law applicable to any Credit Party, (ii) will conflict with
or result in any breach of or constitute a tortious interference with any of
the terms, covenants, conditions or provisions of, or constitute a default
under, or result in the creation or imposition of (or the obligation to create
or impose) any Lien (except pursuant to the Security Documents) upon any of the
property or assets of any Credit Party pursuant to the terms of, any
Contractual Obligation to which any Credit Party is a party or by which it or
any of its property or assets is bound or to which it may be subject, (iii)
will violate any provision of any Organizational Document of any Credit Party
or (iv) requires any approval of stockholders or any approval or consent of any
Person (other than a Governmental Authority) except as have been obtained or as
set forth on Schedule 6.3.

 

6.4           Governmental and Other Approvals.  Except as set forth on Schedule 6.4
hereto and except for the recording of the Mortgages and the filing of UCC
financing statements, which shall be recorded and filed, respectively, on, or
as soon as practicable after, the date hereof, no order, consent, approval,
license, authorization or validation of, or filing, recording or registration
with or exemption by, any Governmental Authority (except as have been obtained
or made on or prior to the Closing Date), is required to authorize, or is
required in connection with, the execution, delivery and performance of any
Loan Document.

 

6.5           Financial Statements; Financial
Condition; Undisclosed Liabilities; etc.

 

(a)           Financial Statements.  The Historical Financial Statements copies
of which have been furnished to Administrative Agent prior to the date hereof,
have been prepared in accordance with GAAP consistently applied (except as may
be indicated in the notes thereto) subject, in the case of interim statements,
to normal year end adjustments.  Each
Historical Financial Statement presents fairly the financial condition of the
applicable Credit Party as of the date thereof.  The Historical Financial Statements identified on Schedule
6.5(a) as audited financial statements have been examined by Deloitte &
Touche, independent certified public accountants, who delivered an opinion in
respect thereto, and present fairly the financial condition of the applicable
Credit Party at the date of each respective audited balance sheet.  Since December 31, 2001, there has been no
Material Adverse Effect.

 

(b)           Solvency.  On
and as of the Closing Date, after giving effect to the Transactions and to all
Indebtedness (including the Loans) being incurred, and to be incurred (and the
use of proceeds thereof), and Liens created, and to be created, by Borrowers in
connection with the transactions contemplated hereby, (i) the sum of the
assets, at a fair valuation, of each Borrower and each other Material
Subsidiary will exceed its debts; (ii) no Borrower and no Material Subsidiary
has incurred or intends to, or believes that it will, incur debts beyond its
ability to pay such debts as such debts mature; and (iii) each Borrower and
each other Material Subsidiary will have sufficient capital with which to
conduct its business.  For purposes of
this Section 6.5(b) “debt” means any liability on a claim, and “claim”
means (y) any right to payment, whether or not such a right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured, or unsecured (including all
obligations, if any, under any Plan or the equivalent for unfunded past service
liability, and any other unfunded medical and death benefits) or (z) any right
to an equitable remedy for breach of performance if such breach gives rise to a
payment, whether or

 

82

 

not
such right to an equitable remedy is reduced to judgment, fixed, contingent,
matured, unmatured, disputed, undisputed, secured or unsecured.  In computing the amount of contingent or
unliquidated liabilities at any time, such liabilities will be computed at the
amount which, in light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.

 

(c)           No Undisclosed
Liabilities.  Except as fully
reflected in the financial statements and the notes related thereto delivered
pursuant to Section 6.5(a) and on Schedule 6.5(d) there were, to
the best of Borrowers’ knowledge, as of the Closing Date (and after giving
effect to the Transactions occurring on such date) no liabilities or
obligations with respect to any Borrower or any of its Restricted Subsidiaries
of any nature whatsoever (whether absolute, accrued, contingent or otherwise
and whether or not due) which, either individually or in aggregate, would be
material to Borrowers.

 

(d)           Indebtedness.  Schedule 6.5(d) sets forth a true and
complete list of (i) all Indebtedness of each Borrower, each of their
Restricted Subsidiaries, HSCHC and HSCC (other than Loans, Intercompany
Indebtedness or Loans hereunder) that is outstanding as of the Closing Date and
that remains outstanding after giving effect to the Transactions, to the extent
that, in each case, such Indebtedness is in excess of $1,000,000 (the “Existing
Obligations”), in aggregate principal amount thereof as of a date not more
than three Business Days prior to the Closing Date (and the aggregate amount of
any undrawn commitments with respect thereto as of the date specified therein),
and (ii) Interest Rate Agreements, the notional amount thereof and the name of
the respective obligor and any other entity which directly or indirectly
guaranteed such debt.  No Existing
Obligation has been incurred in connection with, or in contemplation of, the
Transactions or the other transactions contemplated hereby.  Borrowers have delivered or caused to be
delivered to Administrative Agent a true and complete copy of the form of each
instrument evidencing Indebtedness for money borrowed listed on Schedule
6.5(d) and of each instrument pursuant to which such Indebtedness for money
borrowed was issued.

 

(e)           Pro Forma.  The pro  forma balance sheet of
the Borrowers attached hereto as Schedule 6.5(e) (the “Pro Forma
Balance Sheet”) presents fairly the financial condition of the Borrowers at
the date of such balance sheet and presents a good faith estimate of the pro
forma financial condition of the Borrowers (after giving effect to the
Transactions, and the other transactions contemplated hereby and thereby) at
the date thereof).  The Pro Forma
Balance Sheet has been prepared using financial statements of the Borrowers and
their Subsidiaries which were prepared in accordance with GAAP consistently
applied (except as may be indicated in the notes thereto) subject to normal
year-end adjustments.

 

(f)            Projections.  On and as of the Closing Date, the financial
projections, attached hereto as Schedule 6.5(f) and previously delivered
to Administrative Agent and the Lenders (the “Projections”) and each of
the Projections delivered after the Closing Date pursuant to Section 7.2(f)
are, at the time made, based on good faith estimates and assumptions made by
the management of Borrowers, and there are no statements or conclusions in any
of the Projections which, at the time made, are based upon or include
information known to Borrowers to be misleading or which fail to take into
account material information regarding the matters reported therein.  On the Closing Date, Borrowers believe that
the Projections are reasonable and

 

83

 

attainable,
it being understood that uncertainty is inherent in any forecasts or
projections and that no assurance can be given that the results set forth in
the Projections will actually be obtained.

 

6.6           Litigation.  There are no actions, suits or proceedings
pending or, to the best knowledge of Borrowers, threatened (except for
litigation that would be rendered moot by, or would not survive, the consummation
of the Plan of Reorganization) against Borrowers or any of its Subsidiaries (i)
with respect to any Loan Document seeking to enjoin any Borrower’s or any
Subsidiary’s performance thereof or (ii) which would reasonably be expected to
have a Material Adverse Effect.

 

6.7           True and Complete Disclosure.  All factual information (taken as a whole)
heretofore or contemporaneously furnished by or on behalf of Borrowers or any
of their Subsidiaries in writing (including electronically) to any Lender
(other than the Projections as to which Section 6.5(e) applies) for
purposes of or in connection with this Agreement or any transaction
contemplated herein is, and all other such factual information (taken as a
whole) hereafter furnished by or on behalf of Borrowers or any of their
Subsidiaries in writing to any Lender for purposes of or in connection with
this Agreement or any transaction contemplated herein will be, true and
accurate in all material respects on the date as of which such information is
dated or certified and not incomplete by omitting to state any fact necessary
to make such information (taken as a whole) not misleading in any material
respect at such time in light of the circumstances under which such information
was provided.  The Lenders acknowledge
that they have not relied on Borrowers’ company brochures.

 

6.8           Margin Regulations.  No part of the proceeds of any Loan has been or will be used to
purchase or carry any margin stock (as defined in Regulation U of the Board),
directly or indirectly, or to extend credit for the purpose of purchasing or
carrying any such margin stock for the purpose of reducing or retiring any
indebtedness which was originally incurred to purchase or carry any margin
security or for any other purpose which might cause any of the loans or
extensions of credit under this Agreement to be considered a “purpose credit”
within the meaning of Regulation T, U or X of the Board.

 

6.9           Tax Returns and Payments.  The Borrowers and their Subsidiaries have
filed or caused to be filed all tax returns which are required to be filed,
except where failure to file any such returns would not reasonably be expected
to have a Material Adverse Effect, and have paid or caused to be paid all taxes
shown to be due and payable on said returns or on any assessments made against
them or any of their respective material properties and all other material
taxes, fees or other charges imposed on them or any of their respective
properties by any Governmental Authority (other than those the amount or validity
of which is contested in good faith by appropriate proceedings and with respect
to which reserves in conformity with GAAP have been provided on the books of
Borrowers or their Subsidiaries, as the case may be) except where failure to
take any such action would not reasonably be expected to have a Material
Adverse Effect; and no tax liens have been filed and no claims are being
asserted with respect to any such taxes, fees or other charges (other than such
liens or claims, the amount or validity of which is currently being contested
in good faith by appropriate proceedings and with respect to which reserves in
conformity with GAAP have been provided) which would be reasonably expected to
have a Material Adverse Effect.

 

84

 

6.10         Compliance With ERISA.  Each Plan has been operated and administered
in a manner so as not to result in any material liability of any Borrower for
failure to comply with the applicable provisions of ERISA and the Code; no
Reportable Event which could reasonably be expected to result in the
termination of any Plan has occurred with respect to a Plan; to the best
knowledge of each Borrower, no Multiemployer Plan is insolvent or in
reorganization; no Plan has an accumulated or waived funding deficiency or has
applied for an extension of any amortization period within the meaning of
Section 412 of the Code; the Borrowers and their Subsidiaries or any ERISA
Affiliates have not incurred any material liability to or on account of a Plan
pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201 or
4204 of ERISA or Section 4971 or 4975 of the Code; no proceedings have been
instituted to terminate any Plan within the last fiscal year; using actuarial
assumptions and computation methods consistent with subpart 1 of subtitle E of
Title IV of ERISA, to the best knowledge of Borrowers, the Borrowers and their
Subsidiaries and ERISA Affiliates would not have any material liability to any
Plans which are Multiemployer Plans in the event of a complete withdrawal
therefrom, as of the close of the most recent fiscal year of each such
Multiemployer Plan ending prior to the Closing Date; no Lien imposed under the
Code or ERISA on the assets of the Borrowers or any of their Subsidiaries or any
ERISA Affiliate exists or is likely to arise on account of any Plan; and the
Borrowers and their Subsidiaries do not maintain or contribute to any employee
welfare benefit plan (as defined in Section 3(1) of ERISA) which provides
benefits to retired employees (other than as required by Section 601 of ERISA)
or any employee pension benefit plan (as defined in Section 3(2) of ERISA) the
obligations with respect to either of which could reasonably be expected to
have a Material Adverse Effect.

 

6.11         Ownership of Property.  The Borrowers and their Restricted
Subsidiaries have good and marketable title in fee simple to, a valid leasehold
interest in, or a valid contractual agreement to use, all its material real
property, and good title to, a valid leasehold interest in, or valid
contractual rights to use all its other material property, and none of such
property is subject to any Lien except for Permitted Liens.  As of the Closing Date, the Borrowers and
their Restricted Subsidiaries have granted mortgages to secure the Obligations
on all parcels of real estate which have an estimated fair market value in
excess of $1,000,000.

 

6.12         Capitalization of the Company.  On the Closing Date, the capitalization of
the Company is as set forth on Schedule 6.12 hereto.  All shares of Capital Stock of the Company
have been duly authorized and validly issued and are fully paid and
non-assessable.  Except as set forth on Schedule
6.12, no authorized but unissued or treasury shares of Capital Stock of the
Company are subject to any option, warrant, right to call or commitment of any
kind or character.  A complete and
correct copy of each of the certificate of incorporation and by-laws of the
Company in effect on the date of this Agreement has been delivered to
Administrative Agent.  Except as set
forth on Schedule 6.12, the Company does not have any outstanding stock
or securities convertible into or exchangeable for any shares of its Capital
Stock, or any rights issued to any Person (either preemptive or other) to
subscribe for or to purchase, or any options for the purchase of, or any
agreements providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to any of its Capital
Stock or any stock or securities convertible into or exchangeable for any of
its Capital Stock (other than as set forth in the certificate of incorporation
of such Borrower).  Neither the Company
nor any of its

 

85

 

Subsidiaries
is subject to any obligation (contingent or otherwise) to repurchase or
otherwise acquire or retire any shares of its Capital Stock or any convertible
securities, rights or options of the type described in the preceding sentence
except for agreements the performance of which would not violate this
Agreement.  As of the Closing Date, all
of the issued and outstanding shares of Capital Stock of the Company are owned
of record by the stockholders as set forth on Schedule 6.12 hereto.

 

6.13         Subsidiaries.

 

(a)           Organization.  Schedule 6.13 hereto sets forth, as
of the date hereof, a true, complete and correct list of each Restricted
Subsidiary of the Company and indicates for each such Subsidiary (i) its
jurisdiction of incorporation and (ii) its ownership (by holder and percentage
interest).  As of the date hereof, the
Company has no Restricted Subsidiaries except for those Restricted Subsidiaries
listed as such on Schedule 6.13 hereto.

 

(b)           Capitalization.  All shares of Capital Stock of each
Restricted Subsidiary of the Company have been duly authorized and validly
issued and, to the extent applicable in the case of Foreign Subsidiaries, are
fully paid and non-assessable and, to the extent owned by a Borrower, are owned
by such Borrower free and clear of all Liens except for Permitted Liens.  No authorized but unissued or treasury
shares of Capital Stock of any Restricted Subsidiary of the Company are subject
to any option, warrant, right to call or commitment of any kind or character.

 

(c)           Restrictions on or
Relating to Subsidiaries.  There
does not exist any consensual encumbrance or restriction on the ability of (i)
any Restricted Subsidiary of a Borrower to pay dividends or make any other
distributions on its Capital Stock or any other interest or participation in
its profits owned by a Borrower or any Restricted Subsidiary of a Borrower, or
to pay any Indebtedness owed to a Borrower or a Restricted Subsidiary of a
Borrower, (ii) any Restricted Subsidiary of a Borrower to make loans or
advances to a Borrower or any Borrower’s Subsidiaries or (iii) a Borrower or
any of its Restricted Subsidiaries to transfer any of its properties or assets
to a Borrower or any of its Subsidiaries, except for such encumbrances or
restrictions permitted to exist under Section 8.13.

 

6.14         Compliance With Law, etc.  No Borrower and no Subsidiary of any
Borrower is in default under or in violation of any Requirement of Law or
Contractual Obligation or under its Organizational Documents, as the case may
be, in each case the consequences of which default or violation, either in any
one case or in the aggregate, would have a Material Adverse Effect.

 

6.15         Investment Company Act.  No Borrower and no Subsidiary of any
Borrower is an “investment company” or a company “controlled” by an “investment
company”, within the meaning of the Investment Company Act of 1940, as amended.

 

6.16         Public Utility Holding Company Act.  No Borrower and no Subsidiary of any
Borrower is a “holding company,” or a “subsidiary company” of a “holding
company,” or an

 

86

 

“affiliate”
of a “holding company” or of a “subsidiary company” of a “holding company”
within the meaning of the Public Utility Holding Company Act of 1935, as
amended.

 

6.17         Environmental Matters.  Except as disclosed in Schedule 6.17
hereto:  (i) the operations of and the
real property owned or operated by each Borrower and each of its Subsidiaries
is in compliance with all applicable Environmental Laws except where the
failure to be in compliance, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect; (ii) each Borrower
and each of its Subsidiaries has obtained and will continue to maintain all
Environmental Permits, and all such Environmental Permits are in good standing
and each Borrower and each of its Subsidiaries are in compliance with all terms
and conditions of such Environmental Permits, except where failure to so
obtain, maintain or comply, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect; (iii) no Borrower,
Subsidiary of any Borrower and none of their present or past properties or
operations (whether owned or leased) is subject to:  (A) any Environmental Claim or other written claim, request for
information, judgment, order, decree or agreement from or with any Governmental
Authority or private party related to any material violation of or material
non-compliance with Environmental Laws or Environmental Permits to the extent
any of the foregoing could reasonably be expected to have a Material Adverse
Effect, (B) any pending or, to the knowledge of any Borrower, threatened
judicial or administrative proceeding, action, suit or investigation related to
any Environmental Laws or Environmental Permits which, if determined adversely
to a Borrower or any of its Subsidiaries, could reasonably be expected to have
a Material Adverse Effect, (C) any Remedial Action which if not taken could
reasonably be expected to have a Material Adverse Effect or (D) any
liabilities, obligations or costs arising from the Release or substantial
threat of a material Release of a Contaminant into the environment regardless
of whether the Release or substantial threat of a material Release is occurring
on any Borrower’s or any Subsidiaries’ present or past properties or at any
other location, in each case where such Release or substantial threat of a
Material Release could reasonably be expected to have a Material Adverse
Effect; (iv) there is not now, nor to the knowledge of any Borrower has there
ever been, on or from any current or former property of any Borrower or on, in
or from the current or former property of any of its Subsidiaries, to the
extent any of the following could reasonably be expected to have a Material
Adverse Effect:  (A) except in compliance
with applicable Environmental Laws and Environmental Permits, any generation,
handling, treatment, recycling, storage or off-site disposal of any hazardous
waste as those terms are defined under Environmental Laws, (B) any on-site
disposal of any hazardous waste, substance or material as those terms are
defined under applicable Environmental Laws, (C) except in compliance with
applicable Environmental Laws and Environmental Permits, any underground
storage tanks or underground injection wells, (D) any surface impoundments,
pits, ponds, lagoons or landfills, (E) except in compliance with applicable
Environmental Laws and Environmental Permits, any friable asbestos-containing
material; or (F) except in compliance with applicable Environmental Laws and Environmental
Permits, any polychlorinated biphenyls (PCB’s) or other Contaminants; (v) no
Borrower and no Subsidiary of a Borrower has received any written notice or
claim to the effect that a Borrower or any of its Subsidiaries is or may be
liable to any Person as a result of the Release or substantial threat of a
material Release of a Contaminant into the environment, which notice or claim
could reasonably be expected to result in a Material Adverse Effect; and (vi)
no Environmental Lien has attached to any property (whether owned or leased) of
a Borrower or of any of its Subsidiaries which could reasonably be

 

87

 

expected
to have a Material Adverse Effect, nor are there any facts or circumstances
currently known to a Borrower or any of its Subsidiaries that may reasonably be
expected to give rise to such an Environmental Lien.

 

6.18         Labor Relations.  No Borrower and no Restricted Subsidiary of
a Borrower is engaged in any unfair labor practice that could reasonably be
expected to have a Material Adverse Effect. 
There is (i) no significant unfair labor practice complaint pending
against a Borrower or any of its Restricted Subsidiaries or, to the best
knowledge of any Borrower, threatened against any of them before the National
Labor Relations Board, and no significant grievance or significant arbitration
proceeding arising out of or under any collective bargaining agreement is so
pending against a Borrower or any of its Restricted Subsidiaries or, to the best
knowledge of a Borrower, threatened against any of them, (ii) no significant
strike, labor dispute, slowdown or stoppage is pending against a Borrower or
any of its Restricted Subsidiaries or, to the best knowledge of a Borrower,
threatened against a Borrower or any of its Restricted Subsidiaries and (iii)
to the best knowledge of a Borrower, no question concerning union
representation exists with respect to the employees of a Borrower or any of its
Restricted Subsidiaries, except (with respect to any matter specified in clause
(i), (ii) or (iii) above, either individually or in the aggregate) such as
could not reasonably be expected to have a Material Adverse Effect.

 

6.19         Intellectual Property.  Each Borrower and each Restricted Subsidiary
of each Borrower owns or holds licenses or other rights to or under all of the
patents, patent applications, trademarks, service marks, trademark and service
mark registrations and applications therefor, trade secrets, proprietary
information, computer programs, databases, and other proprietary rights
(collectively, “Intellectual Property”) necessary for the present
conduct of its business, without any known conflict with the rights of others,
except such conflicts which could not reasonably be expected to have a Material
Adverse Effect.  No Borrower and no
Restricted Subsidiary of a Borrower has knowledge of any existing or threatened
claim by any Person contesting the validity, enforceability, use or ownership
of the Intellectual Property which could reasonably be expected to have a
Material Adverse Effect.

 

6.20         Certain Fees.  Except as otherwise disclosed to Administrative Agent in writing
prior to the date hereof, no broker’s or finder’s fees or commissions or any
similar fees or commissions will be payable by any Borrower or any Restricted
Subsidiary with respect to the incurrence and maintenance of the Obligations,
any other transaction under the Loan Documents or any services rendered in
connection with such transactions.  Each
Borrower covenants that it will indemnify Administrative Agent and each Lender
against and hold Administrative Agent and each Lender harmless from any claim,
demand or liability for broker’s or finder’s fees or similar fees or
commissions alleged to have been incurred in connection with any of the
transactions contemplated hereby.

 

6.21         Security Documents.

 

(a)           Security Agreement
Collateral.  The provisions of the
Security Documents are effective to create in favor of the Collateral Agent for
the benefit of the Secured Parties pursuant to the Security Agreement, a legal,
valid and enforceable security interest in all right,

 

88

 

title
and interest of the applicable Credit Party in the Collateral owned by such
Credit Party, and the Security Agreement, together with the filings of Form
UCC-1 in all relevant jurisdictions creates a first lien on, and security
interest in, all right, title and interest of Borrowers and such Credit Parties
in all of the Collateral described therein, subject to no other Liens other
than Permitted Liens.  Except for titled
vehicles, vessels and other collateral which may not be perfected through the
filing of financing statements under the Uniform Commercial Code of the
appropriate jurisdiction and which have an aggregate fair market value of less
than $5,000,000, all such liens have been or, upon the filing of the financing
statements delivered on the Closing Date, will be fully perfected liens except
for Permitted Liens.  The recordation in
the United States Patent and Trademark Office and in the United States
Copyright Office of assignments for security made pursuant to the Security
Agreement will be effective, under Federal law, to perfect the security
interest granted to the Collateral Agent in the trademarks, patents and
copyrights covered by the Security Agreement. 
The recordation with the United States Surface Transportation Board of
assignments for security made pursuant to the Security Agreement will be
effective under Federal law, to create a valid first lien in favor of the
Collateral Agent in the railcars covered by the Security Agreement.  Each Borrower and each Restricted Subsidiary
has good and marketable title to all Collateral, free and clear of all Liens
except Permitted Liens.

 

(b)           Pledged Securities.  The security interests created in favor of
the Collateral Agent, as pledgee for the benefit of the Lenders under the
Security Agreement, constitute perfected security interests in the Pledged
Securities and Pledged Intercompany Notes, subject to no security interests of
any other Person other than Permitted Liens. 
Except as set forth in the Security Agreement, no filings, registrations
or recordings which have not been made or will not have been made (or submitted
for recordation) within 10 Business Days after the Closing Date are required in
order to perfect the security interests created in the Pledged Securities or
Pledged Intercompany Notes under the Security Agreement.  Sixty-five percent (65%) of the Capital
Stock of all direct Foreign Subsidiaries with a net book value and a fair
market value in excess of $250,000 are pledged to the Collateral Agent.

 

(c)           Real Property
Collateral.  The Mortgages create,
as security for the obligations purported to be secured thereby, a valid and
enforceable perfected security interest in and Lien on all of the Mortgaged
Property (including, without limitation, all fixtures and improvements relating
to such Mortgaged Property and affixed or added thereto on or after the Closing
Date) in favor of the Collateral Agent 
(or such other trustee as may be named therein) for the benefit of the
Secured Parties under the Security Agreement, superior to and prior to the
rights of all third Persons (except that the security interest created in the
Mortgaged Property may be subject to the Permitted Liens related thereto) and
subject to no other Liens (other than Liens permitted under Section 8.1).  Schedule 6.21(c) contains a true and
complete list as of the Closing Date of (x) each parcel of real property of
each Borrower and each Restricted Subsidiary with an estimated fair market
value in excess of $1,000,000, (y) the type of interest in such parcel of real
property held by such Borrower or such Restricted Subsidiaries and (z) whether
or not such parcel of real property is Mortgaged Property.  Each Borrower and each Restricted Subsidiary
has good and marketable title to all Mortgaged Property free and clear of all
Liens except those described in the first sentence of this Section 6.21(c).

 

89

 

(d)           Eligible Receivables
and Eligible Inventory.  Each
Receivable included in the Net Receivables Balance is, to the best of each
Credit Party’s knowledge, an Eligible Receivable, and all Inventory included in
the calculation of the Borrowing Base constitutes, to the best of each Credit
Party’s knowledge, Eligible Inventory.

 

(e)           Lock-Box
Arrangements.  All Lock-Box Banks
(names and addresses), Lock-Box numbers and Lock-Box Account numbers are listed
on Exhibit 1.1(b) or described in a notice provided pursuant to Section
11.1.  The Funds Administrator has
sent a copy of all Lock-Box Letters to the Collateral Agent and Administrative
Agent.  No Credit Party has granted any
interest in any Lock-Box or Lock-Box Account to any Person other than the
Collateral Agent (or except as permitted by Section 8.1(i) hereof) and,
upon delivery to a Lock-Box Bank of the related Lock-Box Letter, the Collateral
Agent will have exclusive ownership and control of the Lock-Box Account and/or
Lock-Box at such Lock-Box Bank.

 

(f)            Deposit Accounts.  All domestic Deposit Accounts and
disbursement accounts of Borrowers and their Restricted Subsidiaries whose
balances exceed $100,000  as of the Closing Date are listed on Schedule
6.21(f).  No Borrower and no
Subsidiary of a Borrower has granted any interest in any such Deposit Account
or disbursement account to any Person other than pursuant to the Security
Documents or the “Security Documents” as such term is defined in the Amended
and Restated Credit Agreement.

 

6.22         Charitable Contributions.  Since October 31, 2001, no Borrower and no
Restricted Subsidiary of a Borrower has made any charitable contributions
except as would have been permitted pursuant to Section 8.17 if it had
been in effect at such time.

 

6.23         Asbestos
Matters.  No Borrower and no
Subsidiary of a Borrower (a) manufactures, produces or sells any product
containing asbestos; or (b) has manufactured, produced or sold any product
containing asbestos prior to the Effective Date which would reasonably be
expected to have a Material Adverse Effect.

 

6.24         Use
of Proceeds.  All proceeds of
the Revolving Loans shall be used: (i) to refinance all outstanding obligations
under the Receivables Credit Agreement, (ii) to pay expenses incurred in
connection with restructuring the Borrowers’ and their Subsidiaries’
Indebtedness, (iii) to pay other operating expenses incurred in the ordinary
course of business, and (iv) for general corporate purposes.  Notwithstanding the foregoing, proceeds of
the Revolving Loans shall not be used to make voluntary prepayments of the
obligations under the Amended and Restated Credit Agreement.

 

ARTICLE VII  

AFFIRMATIVE COVENANTS

 

The Borrowers hereby
agree that, so long as any of the Revolving Commitments remain in effect, or
any Loan or LC Obligation remains outstanding and unpaid or any other amount is
owing to any Lender or Administrative Agent hereunder, the Borrowers shall:

 

90

 

7.1           Financial Statements.  Furnish, or cause to be furnished, to each
Lender:

 

(a)           Quarterly Financial
Statements.  As soon as available,
but in any event not later than 45 days after the end of each of the first
three quarterly periods of each Fiscal Year of the Company, (i) the unaudited
consolidated balance sheet of the Company and its consolidated Subsidiaries as
at the end of such quarter setting forth in comparative form the audited
balance sheet of the Company and its consolidated Subsidiaries for the prior
Fiscal Year, (ii) the related unaudited consolidated statement of income of the
Company and its consolidated Subsidiaries as at the end of such quarter and for
the portion of the Fiscal Year through the end of such quarter setting forth in
comparative form the figures for the related periods in the prior Fiscal Year
and (iii) the related unaudited consolidated statements of cash flow of the
Company and its consolidated Subsidiaries for the portion of the Fiscal Year
through the end of such quarter, and setting forth in comparative form figures
for the related period in the prior Fiscal Year, all of which shall be
certified by a Responsible Financial Officer of the Company, subject to normal
year-end audit adjustments and, if the Company has established any Unrestricted
Subsidiaries, such consolidated statements shall be accompanied by a balance
sheet as of such date, and a statement of income and cash flows for such period
and the prior year comparative period, reflecting on a combined basis, for
Restricted Subsidiaries and on a combined basis for Unrestricted Subsidiaries,
the consolidating entries for each of such types of Subsidiaries; and

 

(b)           Annual Financial
Statements.  As soon as available,
but in any event within 90 days after the end of each Fiscal Year of the
Company, a copy of the consolidating and consolidated balance sheet of the
Company and its consolidated Subsidiaries as at the end of such year and the
related consolidating and consolidated statements of income and of cash flows
for such year, and setting forth in each case in comparative form the figures
for the previous year and such consolidated statements shall be accompanied by
a balance sheet as of such date, and a statement of income and cash flows for
such period, reflecting on a combined basis, for Restricted Subsidiaries and on
a combined basis for Unrestricted Subsidiaries, the consolidating entries for
each of such types of Subsidiaries; all such financial statements shall be
complete and correct in all material respects and shall be prepared in
accordance with GAAP applied consistently throughout the periods reflected
therein and with prior periods and, in the case of the consolidated financial
statements referred to in this Section 7.1(b), accompanied by a report
thereon of Deloitte & Touche or such other independent certified public
accountants of recognized national standing, which report shall contain no
qualifications with respect to the continuance of the Company and its
Subsidiaries as going concerns and shall state that such financial statements
present fairly the financial position of the Company and its Subsidiaries as at
the dates indicated and the results of their operations and cash flow for the
periods indicated in conformity with GAAP.

 

(c)           Monthly Financial
Statements.  As soon as available,
but in any event within thirty (30) days after the end of each month (other
than the last month of any Fiscal Quarter) of the Company, unaudited financial
statements consisting of a consolidated balance sheet as at the end of such
month and consolidated statements of income and cash flows of the Company and
its Restricted Subsidiaries, consolidated and business segment statements of
operations for such month and for the Fiscal Year through such month, setting
forth in each case in comparative form the figures for the comparative month
for the previous Fiscal Year, subject

 

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to
normal year-end audit adjustments all in reasonable detail and certified on
behalf of the Company by a Responsible Officer of the Company as having been
prepared in accordance with GAAP consistently applied.

 

7.2           Certificates; Other Information.  Furnish to each Lender (or, if specified
below, to Administrative Agent):

 

(a)           Accountant’s
Certificates.  Concurrently with the
delivery of the financial statements referred to in Section 7.1(b), to
the extent not contrary to the then current recommendations of the American
Institute of Certified Public Accountants, a certificate from Deloitte &
Touche or other independent certified public accountants of nationally
recognized standing substantially in the form of Exhibit 7.2(a), stating
that, in the course of their annual audit of the books and records of the
Company, no Event of Default or Unmatured Event of Default, insofar as they
relate to accounting and financial matters, has come to their attention which
was continuing at the end of such Fiscal Year or on the date of their
certificate, or if such an Event of Default or Unmatured Event of Default has
come to their attention, the certificate shall indicate the nature of such Event
of Default or Unmatured Event of Default.

 

(b)           Officer’s
Certificates.  Concurrently with the
delivery of the financial statements referred to in Section 7.1, a
certificate of a Responsible Financial Officer substantially in the form of Exhibit
7.2(b)-1 stating that, to the best of such officer’s knowledge, such
financial statements present fairly, in accordance with GAAP, the financial
condition and results of operations of the Company and its Subsidiaries for the
period referred to therein (subject to normal year-end audit adjustments) and
concurrently with the delivery of the financial statements referred to Section
7.1(a) and (b), a Certificate of a Responsible Officer substantially
in the form of Exhibit 7.2(b)-2, that no Event of Default or Unmatured
Event of Default has occurred except as specified in such certificate and, if
so specified, the action which the Borrowers propose to take with respect
thereto, which certificate shall set forth detailed computations to the extent
necessary to establish the Company’s compliance with the covenants set forth in
Article IX of this Agreement.

 

(c)           Audit Reports and
Statements.  Promptly following any
Borrower’s receipt thereof, copies of all consolidated financial or other
consolidated reports or statements, if any, submitted to such Borrower or any
of its Subsidiaries by independent public accountants relating to any annual or
interim audit of the books of such Borrower or any of its Subsidiaries.

 

(d)           Public Filings.   Within 10 days after the same become public,
copies of all financial statements and reports which the Company may make to,
or file with, the SEC.

 

(e)           Other Requested
Information.  Such other information
respecting the respective properties, business affairs, financial condition
and/or operations of Holdco I, Holdco II or the Borrowers or any of their
Subsidiaries as Administrative Agent or any Lender (through Administrative
Agent) may from time to time reasonably request.

 

(f)            Projections.  As soon as available and in any event within
sixty (60) days following the first day of each Fiscal Year commencing with the
Fiscal Year of the Company

 

92

 

beginning
January 1, 2003 projections in form similar to that delivered on the Closing
Date covering the period from the beginning of such Fiscal Year (on a quarterly
basis for the first Fiscal Year and an annual basis thereafter) through the end
of the third Fiscal Year thereafter, prepared in reasonable detail, with
appropriate presentation and discussion of the principal assumptions upon which
such projections are based.

 

(g)           Reports.  Deliver to Administrative Agent such reports
as may be required pursuant to Section 11.2.

 

7.3           Notices.  Promptly (and in any event within three
Business Days in the case of (a) below, or thirty days in the case of (b) and
(c) below) after a Responsible Officer of the Company or any Subsidiary obtains
knowledge thereof, give notice to Administrative Agent (which shall promptly
provide a copy of such notice to each Lender) of:

 

(a)           Event of Default or
Unmatured Event of Default.  The
occurrence of any Event of Default or Unmatured Event of Default, accompanied
by a statement of a Responsible Officer setting forth details of the occurrence
referred to therein and stating what action the Borrowers or such Subsidiary
proposes to take with respect thereto.

 

(b)           Litigation and
Related Matters.  The commencement
of, or any material development in, any action, suit, proceeding or
investigation affecting the Borrowers or any of their Restricted Subsidiaries
or any of their respective properties before any arbitrator or Governmental
Authority, (i) in which the amount of any claim, damage, penalty or fine
asserted against a Borrower or its Restricted Subsidiaries that the Borrowers
reasonably determine is not covered by insurance is $3,000,000 or more, (ii)
with respect to any Loan Document or any material Indebtedness or preferred
stock of a Borrower or any of its Restricted Subsidiaries or (iii) which, if
determined adversely to a Borrower or any of its Subsidiaries, could reasonably
be expected to have a Material Adverse Effect.

 

(c)           Environmental
Notification.

 

(i)            The
occurrence of one or more of the following, to the extent that any of the
following, if adversely determined, would have a material adverse effect on the
financial condition, business or properties of the Company and its Subsidiaries
taken as a whole or, in any event, could reasonably be expected to result in
liability to a Borrower or any of its Restricted Subsidiaries in excess of
$3,000,000 or a fine or penalty in excess of $1,000,000: (A) written notice,
claim or request for information to the effect that a Borrower or any of its
Subsidiaries is or may be liable in any material respect to any Person as a
result of the presence of or the Release or substantial threat of a material
Release of any Contaminant into the environment; (B) written notice that a
Borrower or any of its Subsidiaries is subject to investigation by any
Governmental Authority evaluating whether any Remedial Action is needed to
respond to the presence or to the Release or substantial threat of a material
Release of any Contaminant into the environment; (C) written notice that any
property, whether owned or leased by, or operated on behalf of, a Borrower or
its Subsidiaries is subject to a material Environmental Lien; (D) written
notice of violation to a Borrower or any of its

 

93

 

Subsidiaries
of any Environmental Laws or Environmental Permits; or (E) commencement or
written threat of any judicial or administrative proceeding alleging a
violation of any Environmental Laws or Environmental Permits; provided, however,
that the provisions of this clause (i) shall not require a Borrower to violate
or breach any confidentiality covenants to which it is bound.

 

(ii)           Upon
written request by Administrative Agent, any Borrower or any Restricted
Subsidiary shall promptly submit to Administrative Agent and the Lenders a
report providing an update of the status of each environmental, health or
safety compliance, hazard or liability issue identified in any notice or report
required pursuant to clause (i) above and any other environmental, health and
safety compliance obligation, remedial obligation or liability that could reasonably
be expected to have a Material Adverse Effect. 
All such notices shall describe in reasonable detail the nature of the
claim, investigation, condition, occurrence or removal or Remedial Action and
the Company’s or such Restricted Subsidiary’s response thereto.

 

(d)           Notices and Other
Reports.  Notwithstanding the
foregoing, to the extent not otherwise required to be delivered hereunder, the
Funds Administrator shall promptly provide to Administrative Agent a copy of
all material notices required to be delivered by a Borrower or any of its
affiliates under the Amended and Restated Credit Agreement, the ICI Agreement,
the GOF Restructuring Agreement or the MIOA.

 

7.4           Maintenance of Existence.  Preserve, renew and keep in full force and
effect its and each Subsidiary’s existence and take all reasonable action to
maintain all rights, privileges and franchises material to its and those of
each of its Subsidiaries’ businesses except to the extent that failure to take
any such action would not in the aggregate reasonably be expected to have a
Material Adverse Effect, or as otherwise permitted pursuant to Sections 8.3
and 8.7, and comply and cause each of its Subsidiaries to comply with
all Requirements of Law except to the extent that failure to comply therewith
would not in the aggregate reasonably be expected to have a Material Adverse
Effect.

 

7.5           Payment of Obligations.  Pay or discharge or otherwise satisfy at
maturity or, to the extent permitted hereby, prior to maturity or before they
become delinquent, as the case may be, and cause each of its Restricted
Subsidiaries to pay or discharge or otherwise satisfy at or before maturity or
before they become delinquent, as the case may be:

 

(i)            all
material taxes, assessments and governmental charges or levies imposed upon any
of them or upon any of their income or profits or any of their respective
properties or assets prior to the date on which penalties attach thereto; and

 

(ii)           all
lawful claims prior to the time they become a Lien (other than Permitted Liens)
upon any of their respective properties or assets;

 

provided, however, that neither a Borrower nor any of
its Subsidiaries shall be required to pay or discharge any such material tax,
assessment, charge, levy or claim (A) while the same is being contested by it
in good faith and by appropriate proceedings diligently pursued so long as such

 

94

 

Borrower or such Subsidiary, as the case may be, shall
have set aside on its books adequate reserves in accordance with GAAP
(segregated to the extent required by GAAP) with respect thereto and title to
any material properties or assets is not jeopardized in any material respect or
(B) which could not reasonably be expected to have a Material Adverse Effect.

 

7.6           Inspection of Property, Books and
Records.  Keep, or cause to be kept,
and cause each of its Subsidiaries to keep or cause to be kept, adequate
records and books of account, in which complete entries are to be made
reflecting its and their business and financial transactions, such entries to
be made in accordance with sound accounting principles consistently applied and
will permit, and cause each of its Subsidiaries to permit, any Lender or its
respective representatives, at any reasonable time, and from time to time at
the reasonable request of such Lender made to the Borrowers and upon reasonable
notice, to visit and inspect its and their respective properties, to examine
and make copies of and take abstracts from its and their respective records and
books of account, and to discuss its and their respective affairs, finances and
accounts with its and their respective principal officers, directors and with
the written consent of such Borrower (which consent shall not be required if
any Event of Default has occurred and is continuing) independent public
accountants, provided that the Borrowers may attend any such meetings (and by
this provision the Borrowers authorize such accountants to discuss with the
Lenders and such representatives the affairs, finances and accounts of the
Borrowers and their Subsidiaries).

 

7.7           ERISA.

 

(a)           As soon as practicable
and in any event within ten (10) days after any Borrower or any of its
Subsidiaries or ERISA Affiliates knows or has reason to know that a Reportable
Event has occurred with respect to any Plan (whether or not the requirement for
notice of such Reportable Event has been waived by the PBGC), deliver, or cause
such Subsidiary or ERISA Affiliate to deliver, to Administrative Agent a
certificate of a responsible officer of the Company or such Subsidiary or ERISA
Affiliate, as the case may be, setting forth the details of such Reportable
Event and the action, if any, which the Company or such Subsidiary or ERISA
Affiliate is required or proposes to take, together with any notices required
or proposed to be given;

 

(b)           Upon the request of any
Lender made from time to time, deliver, or cause each Subsidiary or ERISA
Affiliate to deliver, to each Lender a copy of the most recent actuarial report
and annual report completed with respect to any Plan;

 

(c)           as soon as possible and
in any event within ten (10) days after any Borrower or any of its Subsidiaries
or ERISA Affiliates knows or has reason to know that any of the following have
occurred with respect to any Plan:

 

(i)            such
Plan has been terminated, reorganized, petitioned or declared insolvent under
Title IV of ERISA,

 

(ii)           the
Plan Sponsor intends to terminate such Plan,

 

95

 

(iii)          the PBGC has instituted or will institute proceedings
under Section 515 of ERISA to collect a delinquent contribution to such
Plan or under Section 4042 of ERISA to terminate such Plan,

 

(iv)          that
an accumulated funding deficiency has been incurred or that an application has
been made to the Secretary of the Treasury for a waiver or modification of the
minimum funding standard (including any required installment payments) or on
extension of any amortization period under Section 412 of the Code,

 

(v)           that
any Borrower or any Subsidiary of a Borrower, or any ERISA Affiliate will be
required to make a deficit reduction contribution under Code Section 412(l) to
any Plan for any Plan year, or

 

(vi)          any
Borrower or any Subsidiary of a Borrower has incurred any liability that would
result in a Material Adverse Effect under any employee welfare benefit plan
(within the meaning of Section 3(1) of ERISA) that provides benefits to retired
employees (other than as required by Section 601 of ERISA) or any employee
pension benefit plans (as defined in Section 3(2) of ERISA), deliver, or cause
such Subsidiary or ERISA Affiliate to deliver, to Administrative Agent a
written notice thereof; and

 

(d)           as soon as possible and
in any event within thirty days after any Borrower or any of its Subsidiaries
or ERISA Affiliates knows that any of them has caused a complete withdrawal or
partial withdrawal (within the meaning of Sections 4203 and 4205, respectively,
of ERISA) from any Multiemployer Plan, deliver, or cause such Subsidiary or
ERISA Affiliate to deliver, to Administrative Agent a written notice thereof.

 

For purposes of this Section 7.7, each Borrower
shall be deemed to have knowledge of all facts known by the Plan Administrator
of any Plan of which such Borrower is the Plan Sponsor, and each Subsidiary and
ERISA Affiliate of such Borrower shall be deemed to have knowledge of all facts
known by the Plan administrator of any Plan of which such Subsidiary or ERISA
Affiliate, each respectively, is a Plan Sponsor.  In addition to its other obligations set forth in this Article
VII, each Borrower shall, and shall cause each of its Subsidiaries and
ERISA Affiliates to:

 

(i)            at
the request of any Lender, deliver to such Lender (and a copy to Administrative
Agent) a complete copy of the most recent annual report (Form 5500) of each
Plan required to be filed with the Internal Revenue Service; and

 

(ii)           at
the request of any Lender, deliver to such Lender (and a copy to Administrative
Agent) copies of the most recent annual reports and notices (as requested by
such Lender) received by such Borrower or any Subsidiary or any ERISA Affiliate
with respect to any Plan no later than ten (10) days after the date of such
request.

 

7.8           Maintenance of Property; Insurance.  (i) Keep and cause each of its Restricted
Subsidiaries to keep, all material property useful and necessary in its
business in good working order and condition, reasonable wear and tear
excepted, (ii) maintain on behalf of its

 

96

 

Restricted
Subsidiaries and cause each of its Restricted Subsidiaries to maintain, with
financially sound and reputable insurers, insurance with respect to its
material properties and business against loss or damage of the kinds
customarily insured against by Persons engaged in the same or similar business,
of such types and in such amounts as are customarily carried under similar
circumstances by such other Persons. 
Such insurance shall be maintained with financially sound and reputable
insurers, except that a portion of such insurance program (not to exceed that
which is customary in the case of companies engaged in the same or similar
business or having similar properties similarly situated) may be effected
through self-insurance, provided adequate reserves therefor, in accordance with
GAAP, are maintained.  All insurance
policies or certificates (or certified copies thereof) with respect to such
insurance (A) shall be endorsed to the Collateral Agent’s reasonable
satisfaction for the benefit of the Collateral Agent for the benefit of the
Secured Parties (including, without limitation, by naming the Collateral Agent
as loss payee or additional insured, as appropriate); and (B) shall state that
such insurance policy shall not be cancelled or revised without thirty days’
prior written notice thereof by the insurer to the Collateral Agent.

 

7.9           Environmental Laws.

 

(a)           Environmental
Compliance.  Each Borrower shall,
and shall cause each of its Restricted Subsidiaries, in the exercise of its
reasonable business judgment, to take prompt and appropriate action to respond
to any material non-compliance with applicable Environmental Laws or
Environmental Permits or to any material Release or a substantial threat of a
material Release of a Contaminant, and upon request from Administrative Agent,
shall regularly report to Administrative Agent on such response.  Without limiting the generality of the
foregoing, whenever Administrative Agent or any Lender has a reasonable basis
to believe that a Borrower is not in material compliance with applicable
Environmental Laws or Environmental Permits or that any property of a Borrower
or its Subsidiaries, or any property to which Contaminants generated by a
Borrower or its Subsidiaries have come to be located (“Offsite Property”)
has or may become contaminated or subject to an order or decree such that any
non-compliance, contamination or order or decree could reasonably be
anticipated to have a Material Adverse Effect, then, to the extent a Borrower
has the legal right to do so, such Borrower agrees to, at Administrative Agent’s
request and such Borrower’s expense: 
(i) cause an independent environmental engineer reasonably acceptable to
Administrative Agent to conduct such tests of the site where the alleged or
actual non-compliance or contamination has occurred and prepare and deliver to
Administrative Agent, the Lenders and such Borrower a report(s) reasonably
acceptable to Administrative Agent setting forth the results of such tests,
such Borrower’s proposed plan and schedule for responding to any environmental
problems described therein, and such Borrower’s estimate of the costs thereof;
and (ii) provide Administrative Agent, the Lenders and such Borrower a
supplemental report(s) of such engineer whenever the scope of the environmental
problems or such Borrower’s response thereto or the estimated costs thereof,
shall materially change. 
Notwithstanding the above, such Borrower shall not be obligated (other
than as required by applicable law) to undertake any tests or remediation at any
Offsite Property that (a) is not owned or operated by such Borrower or any of
its Subsidiaries and (b) where Contaminants generated by persons other than
such Borrower or any of its Subsidiaries have also come to be located.

 

97

 

(b)           Environmental
Indemnity.  Each Borrower shall, and
shall cause each of its Restricted Subsidiaries, to defend, indemnify and hold
harmless the Administrative Agent and the Lenders, and their respective
employees, agents, officers and directors, from and against any and all claims,
demands, penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature known or unknown, contingent or otherwise,
arising out of, or in any way relating to the violation of, noncompliance with
or liability under, any Environmental Law applicable to the operations of such
Borrower, any of its Subsidiaries or their respective properties, or any
orders, requirements or demands of Governmental Authorities related thereto,
including, without limitation, reasonable attorney’s and consultant’s fees,
investigation and laboratory fees, response costs, court costs and litigation
expenses, except to the extent that any of the foregoing arise out of the gross
negligence or willful misconduct of the party seeking indemnification
therefor.  The agreements in this Section
7.9(b) shall survive repayment of the Notes and all other Obligations.

 

7.10         Additional Security; Further Assurances.

 

(a)           Agreement to Grant
Additional Security.  Promptly, and
in any event within thirty (30) days after the acquisition by a Borrower or any
of its Restricted Domestic Subsidiaries of assets or real or personal property
of the type that would have constituted Collateral on the date hereof, in each
case in which the Collateral Agent does not have a perfected security interest
under the Security Documents (other than (v) equipment subject to Liens
permitted under Section 8.1(b) under agreements which prohibit the
creation of additional Liens on such assets, (w) the property subject to the
Headquarters Mortgage Loan Documents, (x) Capital Stock of a Subsidiary (which
is governed by clause (c) below), (y) any parcel of real estate or leasehold
interest acquired after the Closing Date with a fair market value of less than
$1,000,000 or (z) any other asset with a fair market value of less than
$100,000 individually, provided that all such other assets collectively
have a fair market value of less than $5,000,000) or promptly following request
by Administrative Agent or the Collateral Agent with respect to any other
collateral deemed material by Administrative Agent or Required Lenders (the “Additional
Collateral”), the Borrowers will, and will cause each of their Restricted
Domestic Subsidiaries to, take all necessary action, including (i) the filing of
appropriate financing statements under the provisions of the UCC, applicable
foreign, domestic or local laws, rules or regulations in each of the offices
where such filing is necessary or appropriate and (ii) with respect to real
estate, the execution of a mortgage, the obtaining of title insurance policies,
title surveys and real estate appraisals satisfying the Requirements of Law, to
grant the Collateral Agent for the benefit of the Secured Parties pursuant to
the Security Agreement a perfected Lien (subject only to Permitted Liens) in
such Collateral pursuant to and to the full extent required by the Security
Documents and this Agreement.

 

(b)           Additional
Subsidiary Guarantees and Intercompany Notes.  Each Borrower agrees to cause each Restricted Domestic Subsidiary
(other than IRIC) to execute and deliver the Subsidiary Guarantee Agreement (or
a supplement thereto), the Security Agreement (or a supplement thereto) and to
execute and deliver a Pledged Intercompany Note, if applicable.

 

(c)           Pledge of New
Subsidiary Stock.  Each Borrower
agrees to pledge (or cause its Restricted Domestic Subsidiaries to pledge) all
of the Capital Stock of each new

 

98

 

Restricted
Subsidiary established or created to the Collateral Agent for the benefit of
the Secured Parties pursuant to the Security Agreement; provided that
the pledge of the Capital Stock of any new Restricted Subsidiary which is a
Foreign Subsidiary, including “loan stock” or other obligations which are treated
as equity under the Code shall, (i) only be required to the extent owned by
such Borrower or its Restricted Domestic Subsidiaries, (ii) be limited to 65%
of the Capital Stock of any Foreign Subsidiary with a net book value and a fair
market value in excess of $250,000 and (iii) any filings or recordations with
respect to Foreign Subsidiaries will be made (or submitted for recordation)
within 10 Business Days of the acquisition thereof or such longer period as the
Administrative Agent may approve.  No Foreign
Subsidiary may be or become a shareholder of a Domestic Subsidiary.

 

(d)           Grant of Security by
New Subsidiaries.  Subject to the
provisions of Sections 7.10(a) and 7.10(c), Each Borrower will
cause each Restricted Domestic Subsidiary established or created in accordance
with Section 8.7 to grant to the Collateral Agent for the benefit of the
Secured Parties pursuant to the Security Agreement a first priority Lien
(subject to Permitted Liens) on all property (tangible and intangible) of such
Subsidiary by executing and delivering an agreement substantially in the form
of Exhibit A to the Security Agreement, or on other terms satisfactory
in form and substance to the Collateral Agent and Administrative Agent.  Each Borrower shall cause each of its
Restricted Domestic Subsidiaries, at its own expense, to execute, acknowledge
and deliver, or cause the execution, acknowledgment and delivery of, and
thereafter register, file or record in any appropriate governmental office, any
document or instrument reasonably deemed by Administrative Agent to be
necessary or desirable for the creation and perfection of the foregoing
Liens.  Each Borrower will cause each of
its Restricted Domestic Subsidiaries to take all actions requested by
Administrative Agent or the Required Lenders (including, without limitation,
the filing of UCC-1’s) in connection with the granting of such security
interests.

 

(e)           Pledge of Equity in
Unrestricted Subsidiaries.  Each
Borrower agrees to pledge (or cause its Restricted Domestic Subsidiaries to
pledge) all of the Capital Stock owned by such Borrower or its Restricted
Subsidiaries of each new Unrestricted Subsidiary established or created after
the Closing Date to the Collateral Agent for the benefit of the Secured Parties
pursuant to the Security Agreement other than a Foreign Subsidiary with
Consolidated Total Assets of $1,000,000 or less as long as the Consolidated
Total Assets of all Foreign Subsidiaries owned directly by such Borrower or its
Restricted Domestic Subsidiaries the Capital Stock of which is not pledged
hereunder, does not exceed in the aggregate $10,000,000; provided that
the pledge of the Capital Stock or Loan Stock of any new Unrestricted
Subsidiary which is a Foreign Subsidiary shall, (i) only be required to the
extent owned by such Borrower or its Restricted Domestic Subsidiaries, (ii) be
limited to 65% of the Capital Stock (or Loan Stock) of such Foreign Subsidiary
and (iii) any filings or recordations with respect to Foreign Subsidiaries will
be made (or submitted for recordation) within 10 Business Days of the
acquisition thereof or such longer period as the Administrative Agent may
approve.  Each Borrower agrees to
pledge, or cause its Restricted Subsidiaries to pledge, to the Collateral Agent
for the benefit of the Secured Parties pursuant to the Security Agreement all
instruments evidencing indebtedness owed by any Unrestricted Subsidiary to a
Borrower or any Restricted Domestic Subsidiary.

 

99

 

(f)            Pledge of
Additional Huntsman International Holdings Equity.  Immediately upon the release from pledge by
ICI of any equity in HIH, HSCC shall pledge such equity pursuant to the
Security Agreement.

 

(g)           Security Interest in
Certain Accounts.  Enter and cause
its Restricted Subsidiaries to enter into Collateral Account Agreements with
respect to all domestic operating and disbursement accounts whose balances
exceed $100,000 (except with respect to one or more such accounts maintained at
financial institutions with which no control agreement has been previously
entered into with account balances of any such accounts not to at any time
exceed $100,000 and the aggregate of all such accounts not to exceed $500,000,
except in the case of IRIC, with respect to insurance proceeds which may be
held and disbursed in accordance with the procedures set forth on Schedule
7.10(g)) granting Collateral Agent a perfected first priority security
interest in such accounts.  Schedule
6.21(f) contains a list of such accounts as of the Closing Date.

 

(h)           Documentation for
Additional Security.  The security
interests required to be granted pursuant to this Section 7.10 shall be
granted pursuant to the Annexes to the Security Documents or such other
security documentation satisfactory in form and substance to Administrative
Agent and the Required Lenders and shall constitute valid and enforceable
perfected security interests prior to the rights of all third Persons and
subject to no other Liens except Permitted Liens.  The Additional Security Documents and other instruments related
thereto shall be duly recorded or filed in such manner and in such places and
at such times as are required by law to establish, perfect, preserve and
protect the Liens, in favor of Administrative Agent for the benefit of the Lenders,
required to be granted pursuant to the Additional Security Document and, all
taxes, fees and other charges payable in connection therewith shall be paid in
full by such Borrower or its Subsidiaries. 
At the time of the execution and delivery of the Additional Security
Documents, such Borrower shall cause to be delivered to Administrative Agent
such agreements, opinions of counsel, title surveys, real estate appraisals
satisfying any Requirements of Law, and other related documents as may be
reasonably requested by Administrative Agent or the Required Lenders to assure
themselves that this Section 7.10 has been complied with.

 

7.11         End
of Fiscal Years; Fiscal Quarters.  Each Borrower shall cause its annual accounting period to end
December 31 of each year (each a “Fiscal Year”, with quarterly
accounting periods ending on March 31, June 30, September 30 and December 31 of
each Fiscal Year (each a “Fiscal Quarter”)).

 

7.12         Cash Management System.  Each Borrower shall at all times cause its
cash management system to be maintained at a bank satisfactory to
Administrative Agent, it being understood that the cash management system in
place on the date hereof at Mellon Bank and at the other banks listed in Exhibit
1.1(b) and Schedule 6.21(f) is satisfactory to Administrative Agent.

 

7.13         Polymers
Notes.  On or before the
maturity date of the Polymers Senior Notes, the Company shall have refinanced
the then outstanding Polymers Senior Notes with

 

100

 

proceeds
of Permitted Junior Debt permitted by Section 8.2(i) and/or have
redeemed or repurchased such Polymers Senior Notes in accordance with Section 8.7(h).

 

7.14         Compensation.  The Borrowers and their Restricted
Subsidiaries shall comply with the provisions of Section 7.14 of the
Amended and Restated Credit Agreement so long as such provisions are in effect.

 

7.15         Compliance with Laws.  Each Borrower will and will cause each
Credit Party to comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards imposed by any Governmental Authority
to which it or any of its properties may be subject, including those with
respect to any Receivable, the collectibility or enforceability thereof, or any
Contract related thereto (including any requirements of licensing,
registration, authorizations, consents and approvals necessary or desirable to
enter into any Contract or create any Receivable and including laws, rules and
regulations relating to usury, disclosures, truth-in-lending, fair credit billing,
fair credit reporting, equal credit opportunity, fair debt collection
practices, trade practices, consumer protection and privacy), except, in each
case, where the failure to do so would not cause a Material Adverse Effect.  Each Credit Party will pay all taxes payable
thereby as and when due.

 

7.16         Furnishing of Information and
Inspection of Records.  Each
Borrower agrees to maintain, and to cause each of its Restricted Subsidiaries
to maintain, books and records, including those pertaining to the Collateral,
in such detail, form and scope as is consistent with good business practice,
and agrees that such books and records will reflect Administrative Agent’s and
Lenders’ respective interests in its Receivables. Each Borrower agrees that
Administrative Agent or its agents may enter upon the premises of such Borrower
or any Restricted Subsidiary of such Borrower on any two occasions during a
given Fiscal Year, during normal business hours and upon reasonable notice
under the circumstances, and at any time or occasion at all on and after the
occurrence and during the continuation of an Unmatured Event of Default or
Event of Default, and which has not otherwise been waived pursuant to Section
13.1, for the purposes of (a) conducting field examinations and appraisals
and (b) inspecting and/or copying (at the Borrowers’ expense) any and all
records pertaining to the Collateral. 
Each Borrower further agrees that at any time Administrative Agent or
its agents may during normal business hours and upon reasonable notice under
the circumstances enter upon the premises of such Borrower or any Restricted
Subsidiary of such Borrower to discuss the business affairs and prospects and
financial condition of the Borrowers and each Restricted Subsidiary with any
officers, employees and directors of the Borrowers or such Restricted
Subsidiary or with auditors.  The
Company or any Borrower shall give Administrative Agent thirty (30) days (or
such shorter period approved by the Administrative Agent) prior written notice
of any change in the location of any Collateral or in the location of its chief
executive office, state of incorporation or organization or location of any
Collateral from the locations specified in Schedule 7.16, and such
Borrower shall execute in advance of such change and cause to be filed and/or
delivered to Administrative Agent any financing statements, collateral access
agreements or other documents required by Administrative Agent, all in form and
substance satisfactory to Administrative Agent. Each Borrower agrees to advise
Administrative Agent promptly, in sufficient detail, of any substantial changes
relating to the type, quantity or quality of the Collateral, or any event which
singly or in the aggregate could reasonably be expected to have a

 

101

 

Material
Adverse Effect on the value of the Collateral or on the Liens granted for the
benefit of Administrative Agent, the Lenders and any Facing Bank thereon.

 

7.17         Keeping of Records and Books.  The Borrowers will, in a manner consistent
with sound business practice and its customary standards, comply with the
following procedures regarding the keeping of books and records:

 

(a)           Have and maintain (i)
administrative and operating procedures (including an ability to recreate
records evidencing Receivables and Inventory if the originals are destroyed),
(ii) adequate facilities, personnel and equipment and (iii) all Records,
documents, books, records and other information necessary or advisable for
collecting the Receivables (including records adequate to permit the immediate
identification of each new Receivable and all Collections of, and adjustments
to, each existing Receivable).  Each
Borrower will give Administrative Agent prompt notice prior to making any material
change in such administrative and operating procedures.

 

(b)           Each Borrower will and
will cause each other Credit Party to keep true books of record and account in
which full and correct entries in accordance with GAAP will be made of all
dealings or transactions in relation to its business and activities.

 

7.18         Conduct of Business.  Each Borrower will and will cause each other
Credit Party to (at its expense) (i) comply in all material respects with each
applicable Credit and Collection Policy and (ii) refrain from any actions which
may adversely affect in any material respect the rights of the Collateral Agent
in the Collateral.

 

7.19         Letters
of Credit.  Promptly following
the Collateral Agent’s request at any time during an Event of Default, each Borrower
will and will cause each other Credit Party to deliver to the Collateral Agent
each letter of credit issued in favor of such Borrower or the applicable Credit
Party supporting a Receivable, together with evidence (satisfactory to the
Collateral Agent) that the issuing bank or confirming bank with respect to such
letter of credit shall have (i) been notified of the assignment thereof
hereunder to the Collateral Agent, (ii) 
been requested to make payment thereunder directly to the Master
Collection Account and (iii) agreed to such request.

 

7.20         Inventory.  Upon the request of the Collateral Agent
from time to time, each Borrower shall provide to the Collateral Agent written
statements listing items of Inventory in reasonable detail as requested by the
Collateral Agent.  Each Borrower shall
conduct or cause to be conducted annually a physical count of the Inventory,
and a copy of such count shall be promptly supplied to the Collateral Agent
accompanied by a report of the value (valued at the first-in-first-out method)
of such Inventory.  Each Borrower shall
conduct such a physical count at such other times and as of such dates as the
Collateral Agent shall reasonably request.

 

102

 

ARTICLE VIII  

NEGATIVE
COVENANTS

 

Each Borrower hereby
agrees that, so long as any of the Revolving Commitments remain in effect or
any Loan or LC Obligation remains outstanding and unpaid or any other amount is
owing to any Lender or Administrative Agent hereunder:

 

8.1           Liens.  No Borrower shall, nor shall permit any of
its Restricted Subsidiaries to, directly or indirectly, create, incur, assume
or suffer to exist or agree to create, incur or assume any Lien in, upon or
with respect to any of its properties or assets (including, without limitation,
any securities or debt instruments of any of its Subsidiaries), whether now
owned or hereafter acquired, or assign or otherwise convey any right to receive
income to secure any obligation; except for the following Liens (herein referred
to as “Permitted Liens”):

 

(a)           Liens existing on the
Closing Date listed on Schedule 8.1(a) hereto and any extension, renewal
or replacement thereof but only if the principal amount of the Indebtedness is
not increased and such Liens do not extend to or cover any other property or
assets;

 

(b)           (i) Liens (including
Liens under Capitalized Leases) in respect of
property or assets acquired or constructed by a Borrower or a Subsidiary after
the date hereof, including, without limitation, liens on rolling stock, which
Liens are created at the time of acquisition or completion of construction of
such property or asset or within 120 days thereafter, to secure Indebtedness
assumed or incurred to finance all or any part of the purchase price or cost of
construction of such property or asset, (ii) in the case of any Person that
hereafter becomes a Subsidiary or is consolidated with or merged with or into a
Borrower or a Subsidiary, Liens existing at the time such Person becomes a
Subsidiary or is so consolidated or merged (and not incurred in anticipation
thereof), (iii) in the case of any property or asset acquired by a Borrower or
any Subsidiary after the Closing Date, Liens existing on such property or asset
at the time of acquisition thereof (and not incurred in anticipation thereof),
whether or not the Indebtedness secured thereby is assumed by a Borrower or a
Subsidiary; provided, that in any such case:

 

(x)            no such
Lien shall extend to or cover any other property or assets of a Borrower or of
such Subsidiary, as the case may be, and

 

(y)           the
aggregate principal amount of the Indebtedness secured by all such Liens in
respect of any such property or assets shall not exceed 100% of the fair market
value of such property or assets at the time of such acquisition or, in the
case of a Lien in respect of property or assets existing at the time of such
Person becoming a Subsidiary or being so consolidated or merged, the fair
market value of the property or assets acquired at such time and the amount of
Indebtedness secured on the date of issuance of such Liens shall not be less
than 80% of the fair market value unless the Collateral Agent shall have a
perfected second lien on such equipment;

 

103

 

and any extension, renewal or replacement thereof but
only if the principal amount of the Indebtedness secured thereby is not
increased and, such Liens do not extend to or cover any other property or
assets, provided  further, that the aggregate principal amount of
Indebtedness secured by Liens permitted by this Section 8.1(b) does not
exceed at any one time outstanding $15,000,000;

 

(c)           Customary Permitted
Liens;

 

(d)           Liens granted pursuant to the Security Documents;

 

(e)           Liens consisting of an
agreement to sell, transfer or dispose of any asset (to the extent such sale,
transfer or disposition is permitted hereunder);

 

(f)            Liens on property of
Huntsman Headquarters Corporation incurred pursuant to the Headquarters
Mortgage Loan Documents and Liens on property of Airstar Corporation incurred
pursuant to the Airstar Aircraft Financing Documents;

 

(g)           Lien on the assets of
Nitroil Vegyipari Termelo-Fejleszto Resvenytarsag (Nitroil Chemical Engineering
and Production Co., Plc) which secure not more than $2,000,000 of Indebtedness;

 

(h)           Liens on property of
Foreign Subsidiaries securing Indebtedness permitted by Section 8.2(j);

 

(i)            Liens securing
Obligations under the Amended and Restated Credit Agreement to the extent such
Indebtedness is permitted by Section 8.2(b);

 

(j)            Liens incurred in
connection with the sale and leaseback by any Borrower or any of its
Subsidiaries of railcars acquired after the date hereof;

 

(k)           Liens securing
Permitted Junior Debt; and

 

(l)            Liens (other than
Liens securing Indebtedness) with respect to property with a fair market value
not exceeding $5,000,000 in the aggregate at any one time outstanding.

 

8.2           Indebtedness.  No Borrower shall, nor shall it permit any
of its Restricted Subsidiaries to, directly or indirectly, incur, create,
assume directly or indirectly, or suffer to exist any Indebtedness (including
without limitation any Guarantee Obligation in respect of Indebtedness of its
Unrestricted Subsidiaries and any Receivables Facility Attributed Indebtedness)
except for:

 

(a)           Indebtedness incurred
pursuant to this Agreement and the other Loan Documents;

 

(b)           Indebtedness of a
Borrower or its Subsidiaries which are parties to the Subsidiary Guarantee
Agreement pursuant to the Amended and Restated Credit Agreement and

 

104

 

the
Loan Documents (as defined in the Amended and Restated Credit Agreement) and
guarantees thereof by any Subsidiary Guarantor;

 

(c)           Indebtedness with
respect to the Senior Subordinated Notes in an aggregate principal amount not
to exceed $60,000,000;

 

(d)           Indebtedness with
respect to the Polymers Senior Notes in an aggregate principal amount not to
exceed $37,000,000;

 

(e)           Indebtedness of
Huntsman Headquarters Corporation incurred pursuant to the Headquarters
Mortgage Loan Documents in a principal amount not in excess of $12,000,000;

 

(f)            Indebtedness (other
than Intercompany Indebtedness) outstanding on the Closing Date listed on Schedule
6.5(d) hereto;

 

(g)           Indebtedness not to
exceed $30,000 under the First Mortgage Notes and guarantees thereof by
Subsidiaries of Huntsman Petrochemical Corporation;

 

(h)           Indebtedness resulting
from the extension, renewal or refinancing or successive refinancing (whether
in whole or in part) of any Indebtedness, permitted under Sections 8.2(c),
(d), (e) and (f); provided, however, that
(i) the principal amount of any such refinancing Indebtedness (as determined as
of the date of the incurrence of such refinancing Indebtedness in accordance
with GAAP) does not exceed the principal amount of the Indebtedness refinanced
thereby on such date, (ii) the Weighted Average Life to Maturity of such
Indebtedness is not decreased, (iii) the covenants, defaults and similar
provisions applicable to such refinancing Indebtedness or obligations are
customary market terms reasonably satisfactory to the Administrative Agent and
do not conflict in any material respect with the provisions of this Agreement
and (iv) the terms of such refinancing Indebtedness shall be reasonably
satisfactory to the Administrative Agent. 
In the case of any Indebtedness which is subordinated to the
Obligations, such refinancing Indebtedness shall be subordinated to the
Obligations on the same terms or on such other terms as may be approved by the
Administrative Agent.

 

(i)            Permitted Junior Debt
of the Company and guarantees thereof by a Restricted Subsidiary consisting of
Permitted Junior Debt of such Restricted Subsidiary;

 

(j)            Indebtedness of any
Foreign Subsidiary (or, to the extent such Indebtedness is incurred with
respect to its international activities, Huntsman International Trading
Corporation) and guarantees thereof by a Borrower and/or its Subsidiaries
pursuant to over-draft lines or similar extensions of credit such that the
aggregate amount of such Indebtedness under this clause outstanding at any one
time does not exceed $5,000,000 (or the dollar equivalent thereof determined on
a quarterly basis);

 

(k)           Indebtedness of Nitroil
Vegyipari Termeló-Fejlesztró Résvénytátság in a principal amount not in excess
of $2,000,000;

 

105

 

(l)            Intercompany
Indebtedness to the extent permitted by Sections 8.7(c), (e),
(f) and (g); provided, however, that in the event of
any subsequent issuance or transfer of any Capital Stock which results in the
holder of such Indebtedness ceasing to be a Restricted Subsidiary of a Borrower
or any subsequent transfer of such Indebtedness (other than to a Borrower or
any of its Restricted Subsidiaries) such Indebtedness shall be required to be
permitted under another clause of this Section 8.2; provided, further,
however, that (x) such Intercompany Indebtedness arising after the
Closing Date shall be evidenced by a Pledged Intercompany Note and (y) any loan
or advance to any Borrower shall be unsecured;

 

(m)          Indebtedness secured by
Liens permitted by Sections 8.1(b) and 8.1(j) and any extension,
renewal or replacement thereof in accordance with the terms of Sections
8.1(b) and 8.1(j);

 

(n)           Indebtedness with
respect to Hedging Agreements entered into in the ordinary course of business
in order to manage existing or anticipated interest rate, exchange rate,
commodity or other revenue or expense risk, and not for speculative purposes,
in any case;

 

(o)           Indebtedness consisting
of Guarantee Obligations of any Subsidiary of a Borrower of the Obligations
under any Loan Document or consisting of a guarantee of obligations of a
Restricted Subsidiary under any lease or other agreement entered into in the
ordinary course of business not constituting Indebtedness and for which the
liability with respect thereto is not required to be reflected on a balance
sheet prepared in accordance with GAAP; and

 

(p)           Indebtedness consisting
of Guarantee Obligations incurred to satisfy bonding obligations not in excess
of $15,000,000 at any one time which arise in the ordinary course of business.

 

For purposes of this Section 8.2, any
Indebtedness of an entity outstanding when it becomes a Subsidiary shall be
deemed to have been incurred at that time.

 

8.3           Fundamental Changes.  No Borrower shall, nor shall it permit any
of its Restricted Subsidiaries to, directly or indirectly, (i) consummate any
Acquisition or (ii) enter into any merger, consolidation or amalgamation, or
liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution) or convey, sell, assign, lease, transfer or otherwise dispose of
(or agree to do any of the foregoing at any future time) all or substantially
all of its property, business or assets; provided, however, that
so long as prior to or simultaneously with such transactions, such Borrower has
complied with, and has caused its Subsidiaries to comply with, the provisions
of Section 7.10:

 

(a)           any Subsidiary of the
Company may be merged or consolidated with or into the Company so long as the
Company is the surviving corporation or with or into any one or more
Wholly-Owned Subsidiaries of the Company (other than an Unrestricted
Subsidiary, Airstar Corporation, Huntsman Headquarters Corporation, Huntsman
Polymers Corporation or IRIC); provided, however, that (i) the
Wholly-Owned Subsidiary or Subsidiaries shall be the surviving corporation and
(ii) in the case of any merger or consolidation between Subsidiaries at

 

106

 

least
one of which is a Subsidiary Guarantor, the surviving Person shall be or become
a party to the Subsidiary Guarantee Agreement);

 

(b)           any Subsidiary of a
Borrower may sell, lease, transfer or otherwise dispose of any or all of its
assets to a Borrower or any other Wholly-Owned Subsidiary of a Borrower (other
than an Unrestricted Subsidiary);

 

(c)           any Subsidiary of a
Borrower (other than a Finance Subsidiary or Huntsman Polymers Corporation) may
voluntarily liquidate, wind-up or dissolve;

 

(d)           any transaction
permitted pursuant to Sections 8.6(d) may be consummated;

 

(e)           agreements to conduct
the transactions referred to in clauses (a) through (d) above may
be entered into;

 

8.4           Dividends or Other Distributions.  No Borrower shall, nor shall it permit any
of its Restricted Subsidiaries to, directly or indirectly, either:  (i) declare or pay any dividend or make any
distribution on or in respect of its Capital Stock or to the direct or indirect
holders of its Capital Stock in respect of such Capital Stock (except dividends
or distributions payable solely in such Capital Stock or in options, warrants
or other rights to purchase such Capital Stock and except dividends or
distributions payable to any Borrower or a Wholly-Owned Subsidiary of any
Borrower), (ii) purchase, redeem or otherwise acquire or retire for value any
of its Capital Stock (other than Capital Stock held by any Borrower or a
Wholly-Owned Subsidiary of any Borrower), (iii) make a loan (a “Shareholder
Loan”) to any Holdco Party (as defined in the Holdco Agreement), (iv) pay
any Management Fees or (v) make any principal payment on, purchase, defease,
redeem, prepay, decrease or otherwise acquire or retire for value, prior to any
scheduled final maturity, any Polymers Senior Notes, Permitted Junior Debt or
any Indebtedness that is subordinate or junior in right of payment to the
Obligations (any such non-excepted dividend, distribution, purchase,
redemption, repurchase, other acquisition, retirement or Shareholder Loan or
payment being hereinafter referred to as a “Restricted Payment”); provided,
however, that (w) the Company may, under clause (v) above, use the Permitted
Polymers Notes Repurchase Amount to redeem or repurchase then outstanding
Polymers Senior Notes in accordance with Section 4.2(e) of the Amended
and Restated Credit Agreement, to the extent that such amount is not otherwise
required to be applied to prepay loans as required by Section 4.2(e) of
the Amended and Restated Credit Agreement, (x) the Company may make payments to
Holdco II pursuant to the terms of the Tax Sharing Agreement, (y) the Senior
Subordinated Notes may be refinanced with Subordinated Indebtedness permitted
by Section 8.2(h) and (z) the Company and its applicable Subsidiaries
may consummate the HIH Unit Transfer.

 

8.5           Issuance of Stock.

 

(a)           No Borrower will, nor
will it permit, any of its Restricted Subsidiaries to, directly or indirectly,
issue, sell, assign, pledge or otherwise encumber or dispose of any shares of
Capital Stock of any Restricted Subsidiary of a Borrower, except (i) to a
Borrower, (ii) to another Wholly-Owned Subsidiary of a Borrower which is a
Restricted Subsidiary, (iii) to

 

107

 

qualify
directors if required by applicable law or similar de minimis issuances of
Capital Stock to comply with Requirements of Law, or (iv) pledges constituting
Permitted Liens pursuant to Section 8.1(a) or 8.1(d) or 8.1 (j).  Notwithstanding the foregoing, the Borrowers
and their Subsidiaries shall be permitted to sell the outstanding stock of a
Subsidiary, subject to Sections 8.3 and 8.6.

 

(b)           The Company shall not
issue any Capital Stock, except for (i) issuances of additional units of
Membership Interests to Holdco II and (ii) issuances of Capital Stock, where
Administrative Agent and the Required Lenders have consented to the terms and
conditions of such offering.  In the
event any Capital Stock of the Company is issued pursuant to this Section
8.5(b), the Company shall apply the Net Offering Proceeds received in
connection with such disposition in accordance with Section 4.2(d) of
the Amended and Restated Credit Agreement.

 

8.6           Disposition of Assets.  No Borrower will, nor will it permit, any of
its Restricted Subsidiary to, directly or indirectly, sell, lease, assign,
transfer or otherwise dispose of any of its assets to any Person, except that:

 

(a)           Any Borrower or any
Subsidiary may engage in a transaction permitted by Section 8.3.  Any Foreign Subsidiary which is a
Wholly-Owned Subsidiary may transfer, sell or assign any of its assets to
another Foreign Subsidiary which is a Wholly-Owned Subsidiary;

 

(b)           Any Borrower or any
Subsidiary may sell, transfer or otherwise dispose of inventory and Cash
Equivalents in the ordinary course of business;

 

(c)           Any Borrower or any
Subsidiary may permit to exist Liens upon its assets which are permitted by Section
8.1;

 

(d)           Any Borrower or any
Subsidiary may sell, assign, transfer or otherwise dispose of an Investment
permitted under Sections 8.7(c), 8.7(d) and 8.7(g);

 

(e)           Any Borrower and any
Subsidiary may sell, assign, transfer or otherwise dispose of its assets to a
Borrower or any Wholly-Owned Domestic Subsidiary which is a Restricted
Subsidiary (other than Airstar Corporation, Huntsman Headquarters Corporation
or IRIC);

 

(f)            Any Borrower or any
Subsidiary may sell, lease or otherwise dispose of any assets in the ordinary
course of business which, in the reasonable judgment of the Company, have
become uneconomic, obsolete or worn out and may sell or discount, in each case
without recourse and in the ordinary course of business, overdue accounts
receivable arising in the ordinary course of business, but only in connection
with the compromise or collection thereof consistent with customary industry
practice (and not as part of any bulk sale or financing of receivables not
otherwise permitted under clause (j) below);

 

(g)           Any Borrower or any
Subsidiary may enter into operating leases as lessor in the ordinary course of
business which are not substantially equivalent to sales;

 

108

 

(h)           Any Borrower or any
Subsidiary may enter into assignments and licenses of intellectual property in
the ordinary course of business;

 

(i)            Any Borrower and any
Subsidiaries may sell railcars acquired after the Closing Date in connection
with sale and leaseback transactions;

 

(j)            Any Borrower or any
Restricted Subsidiary may dispose of any of its assets if the aggregate fair
market value (at the time of disposition thereof) of all assets disposed of by
the Borrowers and their Restricted Subsidiaries subsequent to the Closing Date
pursuant to this clause (j) plus the aggregate fair market value (net, in the
case of the real estate owned by Huntsman Headquarters Corporation, of the debt
secured by such real estate) of all the assets then proposed to be disposed of
does not exceed $50,000,000 per annum and $150,000,000 in the aggregate from
and after the Closing Date; and

 

(k)           The Company and its
applicable Subsidiaries may consummate the HIH Unit Transfer.

 

8.7           Loans and Investments.  No Borrower shall, nor shall it permit any
of its Restricted Subsidiaries to, directly or indirectly, make any or own any
Investments except that a Borrower and its Restricted Subsidiaries may:

 

(a)           acquire and hold Cash
and Cash Equivalents;

 

(b)           make or maintain
advances to their employees in the ordinary course of business for travel,
relocation and related expenses;

 

(c)           hold (i) its existing
Investments in Subsidiaries and (ii) the other Investments identified on Schedule
8.7 (in each case, as such Investments may be adjusted due to appreciation,
repayment of principal, payment of interest, return of capital and similar
circumstances);

 

(d)           acquire and hold
Investments (including debt obligations) received in connection with the
bankruptcy or reorganization of suppliers and customers and other Persons
having obligations in favor of a Borrower or a Subsidiary in settlement of
delinquent obligations of, and other disputes with, customers and suppliers and
such other Persons arising in the ordinary course of business;

 

(e)           make additional Investments
in any Restricted Domestic Subsidiary; provided that (i) any such
additional equity Investments in Restricted Domestic Subsidiaries after the
Closing Date shall not exceed, in the aggregate $10,000,000 outstanding, and
(ii) any such Investment constituting a loan or advance to a Restricted
Domestic Subsidiary shall be made pursuant to one of the Pledged Intercompany
Notes;

 

(f)            make any Investment by
any Borrower or any Restricted Domestic Subsidiary in any Foreign Subsidiary
after the Closing Date in an aggregate amount for all such Investments from and
after the Closing Date not in excess of $15,000,000 or any Investment by a
Foreign Subsidiary in any other Foreign Subsidiary;

 

109

 

(g)           make any Investment
after the Closing Date in Unrestricted Subsidiaries in an amount not in excess
of $10,000,000 in the aggregate from and after the Closing Date; provided,
that the purpose of any such Investment shall be to fund a current expenditure
of such Unrestricted Subsidiary;

 

(h)           purchase Polymers
Senior Notes in an aggregate amount not exceeding the Permitted Polymers Notes
Repurchase Amount to the extent such amount is available and not required to be
applied to prepay obligations under the Amended and Restated Credit Agreement;
and

 

(i)            make one or more
Investments in HSCHC (which may be reinvested by HSCHC in HSCC) when and as
interest payments become due and payable on the BASF Note, each in an amount
not to exceed the interest payment required to be paid in cash by HSCC on the
BASF Note.

 

8.8           Transactions with Affiliates.  No Borrower shall, nor shall it permit any
of its Restricted Subsidiaries to, directly or indirectly, enter into any
transaction with any Affiliate of a Borrower or any of its Subsidiaries (other
than any Borrower or any Restricted Subsidiary), except for (i) transactions
that are on terms no less favorable to such Borrower or such Subsidiary, as
applicable, than could be obtained in a comparable arms-length transaction with
a Person not an Affiliate of a Borrower or any of its Subsidiaries and are
necessary or desirable for such Borrower or its Subsidiary in the conduct of
its business, (ii) the Tax Sharing Agreement and transactions thereunder in
accordance with the terms thereof and (iii) the HIH Unit Transfer.

 

8.9           Sale-Leasebacks.  No Borrower shall, nor shall it permit any
of its Restricted Subsidiaries to, directly or indirectly, lease any property
as lessee in connection with Sale and Leaseback Transactions entered into after
the Closing Date.

 

8.10         Lines
of Business.  No Borrower shall,
nor shall it permit any of its Restricted Subsidiaries to, directly or
indirectly, enter into or acquire any line of business which does not consist
of the manufacture, distribution, purchase or sale of chemicals, plastics or
finished products made therefrom or is not otherwise reasonably related to the
business engaged in as of the Closing Date, except to the extent that after any
such entry or acquisition, such Borrower and its Restricted Subsidiaries, taken
as a whole, remain substantially engaged in similar lines of business as are
conducted by them as of the Closing Date. 
Notwithstanding anything to the contrary in this Agreement, IRIC shall
not engage in any business other than the business of serving as a captive
insurance company for the Company and its Subsidiaries and engaging in such
necessary activities related thereto as may be permitted to be engaged in by a
Vermont captive insurance company pursuant to applicable Vermont captive
insurance company rules and regulations; provided, that IRIC shall not
hold cash or other Investments except in a manner consistent with Schedule
8.18(a).

 

8.11         Fiscal
Year.  No Borrower shall change
its Fiscal Year.

 

8.12         Amendments to Organizational and
Other Documents.  No Borrower shall,
nor shall it permit any of its Restricted Subsidiaries to, directly or
indirectly, amend,

 

110

 

modify
or waive, or permit any amendment, modification or waiver to its Organizational
Documents if such amendment, modification or waiver could reasonably be
expected to adversely affect the interests of the Collateral Agent,
Administrative Agent or the Lenders.  No
Borrower shall, nor shall it permit any of its Subsidiaries to waive or release
any interest under any Security Document except as expressly permitted hereby
or thereby.  No Borrower shall, and nor
shall it permit any Subsidiary to, amend, modify or waive or cause to be
amended, modified or waived any provision of (a) the ICI Agreement unless such
amendment, modification or waiver is approved by the Administrative Agent and,
if adverse to the interests of the Lenders (as determined by the Administrative
Agent in its sole reasonable discretion after reasonable advance notice of such
proposed change), by the Required Lenders (b) the BASF Note, unless such
amendment, modification or waiver is approved by the Administrative Agent, (c)
the Tax Sharing Agreement, unless such amendment, modification or waiver is
approved by the Administrative Agent and, if adverse to the interests of the
Lenders (as determined by the Administrative Agent in its sole reasonable
discretion after reasonable advance notice of such proposed change), by the
Required Lenders and (d) the Horizon Subordinated Note, unless such
amendment, modification or waiver is approved by the Administrative Agent and,
if adverse to the interests of the Lenders (as determined by the Administrative
Agent in its sole reasonable discretion after reasonable advance notice of such
proposed change), by the Required Lenders. 
Neither a Borrower nor any of its Restricted Subsidiaries shall enter
into any tax sharing agreement with Holdco I or Holdco II except as set forth
in the Tax Sharing Agreement.

 

8.13         Limitation on Certain Restrictions on
Subsidiaries.  No Borrower shall,
nor shall it permit any of its Restricted Subsidiaries to, create or otherwise
cause or permit to exist or become effective any consensual encumbrance or
restriction on the ability of any Restricted Subsidiary to (i) pay dividends or
make any other distributions on its Capital Stock or pay any Indebtedness or
other Obligations owed to any Borrower or any of its other Subsidiaries, (ii)
make any loans or advances to any Borrower or any of its other Subsidiaries, (iii)
transfer any of its property or assets to any Borrower or any of its other
Subsidiaries or (iv) enter into any Material Agreement unless such agreement
expressly provides that it may be collaterally assigned to the Collateral Agent
and may be further assigned by the Collateral Agent in any foreclosure, except:

 

(a)           any encumbrance or
restriction pursuant to the Amended and Restated Credit Agreement or the
agreement governing Permitted Junior Debt or any extension, replacement or
refinancing thereof which is not otherwise prohibited by the terms of this
Agreement;

 

(b)           any such encumbrance or
restriction consisting of customary non-assignment provisions in Contractual
Obligations which are not Material Agreements and are entered into in the
ordinary course of business to the extent such provisions restrict the transfer
or assignment of such agreement;

 

(c)           in the case of clause
(iii) above, Permitted Liens or other restrictions contained in security
agreements securing Indebtedness permitted hereby to the extent such
restrictions restrict the transfer of the assets specifically
secured by such security agreement;

 

111

 

(d)           any restriction on
transfer of an asset pursuant to an agreement to
sell such asset to the extent such sale would be permitted under the terms of
this Agreement;

 

(e)           restrictions on Airstar
Corporation in the Airstar Aircraft Financing Documents and restrictions on
Huntsman Headquarters Corporation in the
Headquarters Mortgage Loan Documents;

 

(f)            restrictions in
Section 4.03 of the Articles of Incorporation of
Huntsman Chemical Corporation; and

 

(g)           restrictions on Foreign
Subsidiaries in Foreign Overdraft Facilities.

 

8.14         Accounting Changes.  No Borrower shall, nor shall it permit any of its Restricted
Subsidiaries to, make or permit to be made any change in accounting policies
affecting the presentation of financial statements or reporting practices from
those employed by it on the Closing Date, unless (i) such change is required by
GAAP, (ii) such change is disclosed to the Lenders through the Administrative
Agent or otherwise and (iii) relevant prior financial statements that are
affected by such change are restated (in form and detail satisfactory to
Administrative Agent) as may be required by GAAP to show comparative
results.  If any changes in GAAP or the
financial statements referred to in Section 6.5(a) hereof occur after
the Closing Date and such changes result in, in the sole judgment of
Administrative Agent, a meaningful change in the calculation of any financial
covenants or restrictions set forth in this Agreement, then the parties hereto
agree to enter into and diligently pursue negotiations to amend the covenants
employing financial calculations herein so as to equitably reflect such
changes, with the desired result that the criteria for evaluating the financial
condition and results of operations of the Borrowers and its Subsidiaries shall
be the same after such changes as if such changes had not been made.

 

8.15         Restrictions on Certain Unrestricted
Subsidiaries.  The Borrowers will
not permit either HSCHC or HSCC to, and HSCHC and HSCC hereby agree that they
will not, except in each case as described on Schedule 8.15, (i) incur
any Indebtedness or other material obligations of any kind; (ii) directly or
indirectly, create, incur, assume or suffer to exist or agree to create, incur
or assume any Lien in, upon or with respect to any of their properties or
assets (including, without limitation any securities or intercompany Indebtedness
in favor of HSCC or HSCHC), except as may be approved by the Administrative
Agent in connection with any settlement entered into between HSCC and ICI
and/or its Affiliates with respect to certain claims of ICI with respect to the
membership interests in HIH held by ICI; (iii) issue any Capital Stock; (iv)
dispose of or transfer any assets; (v) in the case of HSCHC, engage in any
business other than holding securities of its Subsidiaries; or (vi) in the case
of HSCC, engage in any business other than holding securities of Huntsman
International LLC; provided, that this Section 8.15 shall not prohibit
any amendment to the BASF Note to the extent not prohibited by Section 8.12.  Neither HSCHC nor HSCC will create any
additional direct Subsidiaries after the Closing Date.

 

8.16         Charitable
Contributions.  No
Borrower shall, nor shall it permit any of its Restricted Subsidiaries to, make
charitable contributions, except for de minimis civic and community
contributions made in the ordinary course of business.

 

112

 

8.17         Collateral Account Agreements.  No Borrower shall, nor shall it permit any
Credit Party to, establish or utilize any domestic Deposit Account, unless a
fully executed Collateral Account Agreement shall be in full force and effect
with respect thereto, except with respect to one or more Deposit Accounts
maintained at financial institutions with which no Collateral Account Agreement
shall have previously been entered into with account balances of any such
accounts not to at any time exceed $100,000 and the aggregate of all such
accounts not at any time to exceed $500,000, except in the case of IRIC, with
respect to insurance proceeds which may be disbursed and held in accordance
with the procedures set forth on Schedule 8.17(a).  Except as set forth on Schedule 8.17(b),
at no time shall the Dollar Equivalent of the aggregate balances in all
accounts maintained by the Borrowers and their Restricted Subsidiaries outside
the USA exceed $500,000.

 

8.18         Extension or Amendment of Receivables.  No Borrower will, or will permit any other
Credit Party or IRIC to, extend or amend any Receivable or any Contract to the
extent related thereto; provided, however, that each Borrower and
each Credit Party may grant rebates, extensions, or adjustments in the ordinary
course of business provided, however, that such extension or
adjustment shall not affect the aging of such Receivable (which shall be
calculated based on the original terms of such Receivable) nor alter the status
of such Receivable as delinquent, defaulted or charged off or limit any rights
of Administrative Agent, Collateral Agent or the Lenders under the Agreement or
the Security Documents.

 

8.19         Accounts.  No Borrower will, or will permit any
Restricted Subsidiary party to the Security Agreement to instruct any Obligor
to remit any Collections to any Person, account or lock-box other than a
Lock-Box Bank, a Lock-Box Account or a Lock-Box; provided, however,
that a Borrower that is the Obligor on another Borrower’s Receivable may make
payments of Collections on such Receivable to a Deposit Account of such other
Borrower so long as there has been no incremental borrowing on a net basis as a
result of such remittance.  No Borrower
will, or will permit any such Restricted Subsidiary to permit funds other than
Collections of Receivables to be deposited into any Lock-Box, Lock-Box Account
or (except as permitted by Section 4.5(c)) the Master Collection
Account.  At any time, if funds other
than Collections are deposited into any such Lock-Box, Lock-Box Account or
(except as permitted by Section 4.5(c)) the Master Collection Account,
such Borrower shall promptly identify such funds for segregation therefrom, and
after providing the Collateral Agent with reasonable evidence of the rightful
ownership of such funds, shall instruct the Collateral Agent to transfer such
funds to such rightful owners.  No
Borrower will, or will permit any such Restricted Subsidiary to, commingle
Collections or other funds to which Collateral Agent is entitled hereunder with
any other funds.  The Borrower shall
instruct each Lock-Box Bank to transfer all Collections at the end of each
Business Day to the Master Collection Account. 
No Borrower will, or will permit, any such Restricted Subsidiary to add
any Lock-Box Bank, any Lock-Box, or any Lock-Box Account to those listed on Exhibit
1.1(b) unless Administrative Agent and Collateral Agent shall have
consented thereto (which consent shall not be unreasonably withheld) and
received an executed and acknowledged copy of a Lock-Box Letter substantially
in the form of Exhibit 1.1(c) (with such changes as are acceptable to
Administrative Agent and Collateral Agent) to each new Lock-Box Bank with
respect thereto.  No Borrower will, or
will permit any such Restricted Subsidiary to, terminate any Lock-Box Bank or
Lock-Box or close any Lock-Box

 

113

 

Account
or Lock-Box unless Collateral Agent shall have received at least thirty (30)
days prior notice of such termination or such shorter period as the Collateral
Agent may agree to.

 

8.20         Use
of Proceeds.  No Borrower
shall, nor shall it permit any of its Subsidiaries, to use the proceeds of
Loans made hereunder for any purpose which is not permitted by Section 6.24.

 

8.21         No
Excess Cash.  No Borrower shall,
nor shall it permit any Domestic Restricted Subsidiary to, directly or
indirectly, maintain in the aggregate in all of the accounts described in Schedule
6.21(f) total Cash and Cash Equivalents in excess of $10,000,000 at any
time during which any Loans are outstanding.

 

ARTICLE IX  

FINANCIAL
COVENANTS

 

The Borrowers hereby
agree that, so long as any of the Revolving Commitments remain in effect or any
Loan or LC Obligation remains outstanding and unpaid or in any other amount is
owing to any Lender or Administrative Agent hereunder, the Borrowers shall not
directly or indirectly:

 

9.1           Leverage
Ratio.  Permit the ratio (the “Leverage
Ratio”) of (a) Consolidated Debt on the last day of any Fiscal Quarter
of the Company (after giving effect to all payments and prepayments made on
such date) to (b) EBITDA of the Company for the four Fiscal Quarter
periods ending on such day to exceed the ratio set forth below at the end of
any Fiscal Quarter occurring during the period opposite such ratio:

 

	
  Date

  	
   

  	
  Ratio

  	
   

  
	
  Closing
  Date - June 30, 2003

  	
   

  	
  8.25 to 1.0

  	
   

  
	
  July
  1, 2003 - September 30, 2003

  	
   

  	
  8.00 to 1.0

  	
   

  
	
  October
  1, 2003 - December 31, 2003

  	
   

  	
  7.25 to 1.0

  	
   

  
	
  January
  1, 2004 - March 31, 2004

  	
   

  	
  6.75 to 1.0

  	
   

  
	
  April
  1, 2004 - June 30, 2004

  	
   

  	
  6.00 to 1.0

  	
   

  
	
  July
  1, 2004 - September 30, 2004

  	
   

  	
  5.00 to 1.0

  	
   

  
	
  October
  1, 2004 - December 31, 2004

  	
   

  	
  4.75 to 1.0

  	
   

  
	
  January
  1, 2005 - June 30, 2005

  	
   

  	
  3.75 to 1.0

  	
   

  
	
  July
  1, 2005 - and thereafter

  	
   

  	
  3.25 to 1.0

  	
   

  

 

9.2           Interest Coverage Ratio.  Permit the ratio (the “Interest Coverage
Ratio”) of (i) EBITDA for each period of four consecutive Fiscal Quarters
ending on the last day of any Fiscal Quarter of the Company to (ii) the sum of
Cash Interest Expense of the Company and its Restricted Subsidiaries for such
period to be less than the ratio opposite the applicable period set forth
below:

 

114

 

	
  Date

  	
   

  	
  Ratio

  	
   

  
	
  Closing
  Date - June 30, 2003

  	
   

  	
  1.30 to 1.0

  	
   

  
	
  July
  1, 2003 - September 30, 2003

  	
   

  	
  1.40 to 1.0

  	
   

  
	
  October
  1, 2003 - December 31, 2003

  	
   

  	
  1.50 to 1.0

  	
   

  
	
  January
  1, 2004 - March 31, 2004

  	
   

  	
  1.75 to 1.0

  	
   

  
	
  April
  1, 2004 - September 30, 2004

  	
   

  	
  2.00 to 1.0

  	
   

  
	
  October
  1, 2004 - December 31, 2004

  	
   

  	
  2.25 to 1.0

  	
   

  
	
  January
  1, 2005 - June 30, 2005

  	
   

  	
  2.50 to 1.0

  	
   

  
	
  July
  1, 2005 - and thereafter

  	
   

  	
  2.75 to 1.0

  	
   

  

 

9.3           Fixed Charge Coverage Ratio.  Permit the ratio of (i) EBITDA of the
Company for each period of four consecutive Fiscal Quarters ending on the last
day of any Fiscal Quarter to (ii) Consolidated Fixed Charges for such period to
be less the ratio opposite the applicable period set forth below:

 

	
  Date

  	
   

  	
  Ratio

  	
   

  
	
  Closing
  Date - June 30, 2003

  	
   

  	
  .85 to 1.0

  	
   

  
	
  July
  1, 2003 - December 31, 2003

  	
   

  	
  .90 to 1.0

  	
   

  
	
  January
  1, 2004 - June 30, 2004

  	
   

  	
  1.00 to 1.0

  	
   

  
	
  July
  1, 2004 - and thereafter

  	
   

  	
  1.25 to 1.0

  	
   

  

 

9.4           Capital Expenditures.  Permit, nor permit any of its Restricted
Subsidiaries to, make any Consolidated Capital Expenditures, except that the
Company and its Restricted Subsidiaries may make such Consolidated Capital Expenditures
(i) during 2002, not in excess of an amount equal to $85,000,000; (ii) during
each Fiscal Year thereafter and until payment in full of all Obligations
hereunder, not in excess of an amount equal to $100,000,000 plus, in each case,
Permitted Turnaround Capital Expenditures; provided, however,
that, to the extent that the Company consummates the Minimum Senior Debt
Prepayment, the Company and its Restricted Subsidiaries may make Consolidated
Capital Expenditures in each Fiscal Year commencing on January 1, 2003 in an
amount equal to $135,000,000 plus Permitted Turnaround Capital Expenditures; provided,
further, however, to the extent Consolidated Capital Expenditures
referred to in clause (ii) for any Fiscal Year are less than the amount
allowable for such Fiscal Year, the difference thereof may be carried forward
to the immediately following fiscal year in an amount not to exceed
$10,000,000.

 

ARTICLE X  

EVENTS OF
DEFAULT

 

10.1         Events
of Default.  Any of the
following events, acts, occurrences or state of facts shall constitute an “Event
of Default” for purposes of this Agreement:

 

(a)           Failure to Make
Payments When Due.  A Borrower (i)
shall default in the payment of principal on any of the Loans or any
reimbursement obligation with respect to any Letter of Credit; or (ii) shall
default in the payment of interest on any of the Loans or default in

 

115

 

the
payment of any fee or any other amount owing hereunder or under any other Loan
Document when due and such default in payment shall continue for five (5)
Business Days; or

 

(b)           Representations and
Warranties.  Any representation or
warranty made by or on the part of a Borrower or any Credit Party, as the case
may be, contained in any Loan Document or any document, instrument or
certificate delivered pursuant hereto or thereto shall have been incorrect or
misleading in any material respect when made or deemed made; or

 

(c)           Covenants.  Any Credit Party shall (i) default in the
performance or observance of any term, covenant, condition or agreement on its
part to be performed or observed under Article VIII, Article IX
hereof or Sections 7.1, 7.2, 7.3(a), 7.4, 7.8,
7.9,  7.10, 7.11, 7.12,
7.13, 7.17 and 7.18 or any term of the HSCC Agreement or
(ii) default in the due performance or observance by it of any other term,
covenant or agreement contained in this Agreement and such default shall
continue unremedied for a period of thirty (30) days after written notice to
the Borrowers by Administrative Agent or any Lender; or

 

(d)           Default Under Other
Loan Documents.  Any Credit Party
shall default in the performance or observance of any term, covenant, condition
or agreement on its part to be performed or observed hereunder or under any
Loan Document (and not constituting an Event of Default under any other clause
of this Section 10.1) and such default shall continue unremedied for a
period of thirty (30) days (or in the case of any such breach of the Security
Agreement, such default shall continue unremedied for a period of ten (10)
days) after written or telephonic (immediately confirmed in writing) notice
thereof has been given to the Borrowers by Administrative Agent; or

 

(e)           Voluntary
Insolvency, Etc.  Holdco I, Holdco
II, any Borrower or any of its Material Subsidiaries which are Restricted
Subsidiaries shall become insolvent or generally fail to pay, or admit in
writing its inability to pay, its debts as they become due, or shall
voluntarily commence any proceeding or file any petition under any bankruptcy,
insolvency or similar law or seeking dissolution (except as permitted by Section
8.3(c)) or reorganization or the appointment of a receiver, trustee,
custodian or liquidator for it or a substantial portion of its property, assets
or business or to effect a plan or other arrangement with its creditors, or
shall file any answer admitting the jurisdiction of the court and the material
allegations of an involuntary petition filed against it in any bankruptcy,
insolvency or similar proceeding, or shall be adjudicated bankrupt, or shall
make a general assignment for the benefit of creditors, or shall consent to, or
acquiesce in the appointment of, a receiver, trustee, custodian or liquidator
for a substantial portion of its property, assets or business, shall call a meeting
of its creditors with a view to arranging a composition or adjustment of its
debts or shall take any corporate action authorizing any of the foregoing; or

 

(f)            Involuntary
Insolvency, Etc.  Involuntary
proceedings or an involuntary petition shall be commenced or filed against
Holdco I, Holdco II, any Borrower or any of its Material Subsidiaries which are
Restricted Subsidiaries under any bankruptcy, insolvency or similar law or
seeking the dissolution or reorganization of it or the appointment of a receiver,
trustee, custodian or liquidator for it or of a substantial part of its
property, assets or business, or any similar writ, judgment, warrant of
attachment, execution or process shall be issued or levied

 

116

 

against
a substantial part of its property, assets or business, and such proceedings or
petition shall not be dismissed, or such writ, judgment, warrant of attachment,
execution or similar process shall not be released, vacated or fully bonded,
within thirty (30) days after commencement, filing or levy, as the case may be,
or any order for relief shall be entered in any such proceeding; or

 

(g)           Default Under Other
Agreements.  (i)  Holdco I, Holdco II, any Borrower or any of
its Restricted Subsidiaries shall default in the payment when due, whether at
stated maturity or otherwise, of any amount pursuant to any Indebtedness (other
than Indebtedness owed to the Lenders under the Loan Documents) in excess of
$5,000,000 (or in the case of such a default under a Hedging Agreement,
$2,500,000 measured by reference to the mark to market termination value of
obligations under the respective Hedging Agreement(s) at the time) in the
aggregate beyond the period of grace, if any, provided in the instrument or
agreement under which such Indebtedness was created, (ii) a default shall occur
in the performance or observance of any agreement under any Indebtedness (other
than Indebtedness owed to the Lenders under the Loan Documents) in excess of
$5,000,000 or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event shall occur or condition exist, the effect
of which default or other event or condition is to cause, or to permit the
holder or holders of such Indebtedness (or a trustee or agent on behalf of such
holder or holders) to cause (determined without regard to whether any notice of
acceleration or similar notice is required), any such Indebtedness to become
due or be repaid prior to its stated maturity or (iii) any Indebtedness (other
than Indebtedness owed to the Lenders under the Loan Documents) in excess of
$5,000,000 of Holdco I, Holdco II, any Borrower or any of its Restricted
Subsidiaries shall be declared to be due and payable, or required to be prepaid
other than by a regularly scheduled required prepayment (other than with
proceeds of the event giving rise to such prepayment), prior to the stated
maturity thereof; or

 

(h)           Judgments.  One or more judgments or decrees shall be
entered against any Borrower or any of its Restricted Subsidiaries involving,
individually or in the aggregate, a liability (to the extent not paid or
covered by a reputable insurance company which has accepted liability in
writing) of $5,000,000 or more and all such judgments or decrees shall not have
been vacated, discharged, satisfied, stayed or bonded pending appeal within
thirty (30) days from the entry thereof; or

 

(i)            ERISA.  Either (i) any Reportable Event which
constitutes grounds for the termination of any Plan by the PBGC or of any
Multiemployer Plan or for the appointment by the appropriate United States
District Court of a trustee to administer or liquidate any Plan or
Multiemployer Plan shall have occurred; (ii) a trustee shall be appointed by a
United States District Court to administer any Plan or Multiemployer Plan;
(iii) the PBGC shall institute proceedings to terminate any Plan or
Multiemployer Plan or to appoint a trustee to administer any Plan; (iv) any
Borrower or any of its ERISA Affiliates shall become liable to the PBGC or any
other party under Section 4062, 4063 or 4064 of ERISA with respect to any Plan;
(v) any Borrower or any of its Subsidiaries or any of their ERISA Affiliates
shall become liable to make a current payment with respect to any Multiemployer
Plan under Section 4201 et seq. of ERISA; or (vi) any Borrower or any
Subsidiary of any Borrower, or any ERISA Affiliate fails to make a deficit
reduction contribution required under Code Section 412(l) to any Plan by the
due date for such contribution; if as of the date thereof or any subsequent
date, the sum of all Borrowers and

 

117

 

their
Subsidiaries’ and their ERISA Affiliates’ various liabilities (such liabilities
to include, without limitation, any liability to the PBGC or to any other party
under Section 4062, 4063 or 4064  of
ERISA with respect to any Plan, or to any Multiemployer Plan under Section 4201
et seq. of ERISA) as a result of such events listed in subclauses (i) through
(vi) above exceeds $7,500,000; or

 

(j)            Change in Control.  A Change of Control shall occur; or

 

(k)           Security Documents.  At any time after the execution and delivery
thereof, any of the Security Documents shall cease to be in full force and
effect or shall cease to give Collateral Agent the Liens, rights, powers and
privileges purported to be created thereby (including, without limitation, a
first priority perfected security interest in, and Lien on, all of the
Collateral), in favor of Collateral Agent, subject to no other Liens (except to
the extent expressly permitted herein or therein).

 

(l)            Holdco Agreement
Breach.  A “Default” (as defined in
the Holdco Agreement) shall occur under the Holdco Agreement.

 

If any of the foregoing
Events of Default shall have occurred and be continuing, Administrative Agent,
at the written direction of the Required Lenders (administered as if the
Commitments have been terminated in full) shall, take one or more of the
following actions:  (i) by written or
oral or telephonic notice (in the case of oral or telephonic notice confirmed
in writing immediately thereafter) to the Funds Administrator declare the
Commitments to be terminated whereupon the Commitments shall forthwith
terminate, (ii) by written or oral or telephonic notice (in the case of oral or
telephonic notice confirmed in writing immediately thereafter) to the Funds
Administrator declare all sums then owing by the Borrowers hereunder and under
the Loan Documents to be forthwith due and payable, whereupon all such sums
shall become and be immediately due and payable without presentment, demand,
protest or notice of any kind, all of which are hereby expressly waived by the
Borrowers, (iii) terminate any Letter of Credit which may be terminated in
accordance with its terms, (iv) direct the Borrowers to pay (and the Borrowers
agree that upon receipt of such notice, or upon the occurrence of any Event of
Default specified in Section 10.1(e) or Section 10.1(f) with
respect to the Borrowers they will pay) to Administrative Agent at the Payment
Office such additional amount of cash, to be held as security by Administrative
Agent, as is equal to 105% of the aggregate Stated Amount of all Letters of
Credit issued for the account of the Borrowers and its subsidiaries and then
outstanding and (v) enforce, as Administrative Agent (to the extent permitted
under the applicable Loan Documents), or direct the Collateral Agent to
enforce, pursuant to the terms of the Security Agreement, any of the liens and
security interests created pursuant to the Security Documents.  In cases of any occurrence of any Event of
Default described in clause (e) or (f) of this Section 10.1,
the Commitments shall terminate and the Loans, together with accrued interest
thereon, shall become due and payable forthwith without the requirement of any
such acceleration or request, and without presentment, demand, protest or other
notice of any kind, all of which are expressly waived by the Borrowers, any
provision of this Agreement or any other Loan Document to the contrary
notwithstanding, and other amounts payable by the Borrowers hereunder shall
also become immediately due and payable all without notice of any kind.

 

118

 

Anything in this Section
10.1 to the contrary notwithstanding, Administrative Agent shall, at the
request of the Required Lenders, rescind and annul any acceleration of the
Loans and termination of the Commitments by written instrument filed with the
Funds Administrator; provided that at the time such acceleration is so
rescinded and annulled:  (A) all past
due interest and principal (other than principal due solely as a result of such
acceleration), if any, on the Loans and all other sums payable under this
Agreement and the other Loan Documents shall have been duly paid, and (B) no
other Event of Default shall have occurred and be continuing which shall not
have been waived in accordance with the provisions of Section 13.1
hereof.  Upon any such rescission and
annulment, Administrative Agent shall return to the Borrowers any cash
collateral delivered pursuant to the preceding paragraph.

 

10.2         Rights Not Exclusive.  The rights provided for in this Agreement
and the other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies provided by law or in equity, or under
any other instrument, document or agreement now existing or hereafter arising.

 

ARTICLE XI  

COLLATERAL
ADMINISTRATION

 

11.1         Lock-Box
and Master Collection Account Arrangements.  The Borrowers and the Credit Parties shall
deliver to Administrative Agent and Collateral Agent a Lock-Box Letter with
respect to each of its Lock-Boxes and Lock-Box Accounts.  Each such Lock-Box Letter shall direct that
all collected and available funds on deposit in such Lock-Box Accounts are to
be remitted on a daily basis by electronic wire or ACH transfer to the Master
Collection Account.  In addition to the
above-described Lock-Box Letters, the Borrowers shall deliver to Administrative
Agent and Collateral Agent (on or prior to the date hereof or of any relocation
of such account to any other financial institution a Master Collection Account
Agreement substantially in the form attached hereto as Exhibit 11.1 (a “Master
Collection Account Agreement”), executed by the applicable Borrowers and the
applicable bank at which such account is then being maintained (the “Master
Collection Account Bank”) and covering the Master Collection Account.  Each Borrower and each Credit Party hereby
grant to Collateral Agent exclusive dominion and control of all of the Lock-Box
Accounts, the Lock-Boxes and the Master Collection Account (and all funds
deposited, or to be deposited, therein), with all rights to, among other
things, at any time (i) give notices to each Lock-Box Bank or the Master
Collection Account Bank, as applicable, (ii) direct the disposition of all
Collections that are sent to any of the Lock-Boxes and the Lock-Box Accounts to
the Master Collection Account, and all Collections that are on deposit in the
Master Collection Account in accordance with the terms hereof, and (iii) take
all other actions permitted under the Lock-Box Letters and the Master
Collection Account Agreement.  Unless
directed to do so by Administrative Agent and Collateral Agent, no Borrower
shall have authority to, nor shall it terminate any bank as the Master
Collection Account Bank, add any other financial institution as a Master
Collection Account Bank, or consent to the transfer of any funds from any
Lock-Box Bank to any financial institution other than the Master Collection
Account Bank.  To the extent a Borrower
is directed by Collateral Agent to move the Master Collection Account to a
different account or to a

 

119

 

different
financial institution, such Borrower shall deliver to Collateral Agent a new or
revised Master Collection Account Agreement, as applicable, executed by such
Borrower and the Master Collection Account Bank or new Master Collection
Account Bank, as applicable, relating to such new Master Collection Account, in
any case, prior to the designation of such account as the Master Collection
Account.  If notwithstanding the
directions in the Lock-Box Letters and this Agreement, any Borrower receives
any Collections directly, it hereby agrees to remit such Collections (within
one (1) Business Day thereafter) to the Master Collection Account in the
identical form as received by it (with any necessary endorsements).  Prior to its turnover of such Collections,
such Borrower shall hold any such Collections received by it in trust for the
Collateral Agent.

 

11.2         Reports.  (a) No later than 12:00 Noon (Chicago time)
on each Report Date, the Company shall prepare and forward to Administrative
Agent a report (certified therein as true and correct by a Responsible
Financial Officer of the Company) reflecting information as of the close of
business of the Borrowers for the immediately preceding calendar month (a “Monthly
Report”), substantially in the form of Exhibit 11.2(a) including but
not limited to monthly aging and concentration of Receivables and monthly
listing of Inventory (and containing such additional information in respect of
the Inventory, Receivables and the Obligors as is from time to time requested
by Administrative Agent).

 

(b)           No later than 5:00 P.M.
(Chicago time) on the second Business Day following the end of each calendar
week, the Company shall deliver to Administrative Agent a report (each a “Weekly
Report”) substantially in the form of Exhibit 11.2(b) reflecting
information as of the close of business of the Borrowers for the immediately
preceding calendar week (and containing such additional information as from
time to time may be requested by Administrative Agent).  The Company shall promptly provide more
frequent reports upon the request of Administrative Agent at any time after the
occurrence and during the continuation of an Event of Default.

 

(c)           To the extent
Administrative Agent disagrees with any of the computations set forth in any
such Monthly Report or Weekly Report delivered to it pursuant to this Section
11.2, it may recompute such information and, to the extent the result of
such recomputation differs from the original computation provided by the
Company, Administrative Agent may designate such recomputed result to be the
relevant result until such discrepancy is resolved to the reasonable
satisfaction of Administrative Agent. 
Notwithstanding the foregoing, Administrative Agent shall have no
obligation to confirm the accuracy of any of the information provided to it by
any Borrower in any report (including, without limitation, any Monthly Report,
Weekly Report or otherwise) and shall have no liability to any Person in
connection therewith.

 

(d)           Administrative Agent
will deliver to any Lender upon its request therefor a copy of any Monthly Report
or Weekly Report previously delivered to Administrative Agent.

 

11.3         Enforcement Rights.  (a) Collateral Agent may, at any time upon the occurrence and
during the continuance of an Event of Default, direct the Obligors and the
Lock-Box Banks to make all payments with respect to the Receivables directly to
the Master Collection Account. 
Collateral Agent may, and the Funds Administrator shall at Collateral

 

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Agent’s
request, withhold the identity of the Lenders from the Obligors and Lock-Box
Banks.  Upon Collateral Agent’s request
at any time during an Event of Default, the Funds Administrator (at the
Borrower’s expense) shall, or shall cause any applicable Credit Party to, (i)
give notice to each Obligor of the Collateral Agent’s lien on the Receivables
and direct that payments be made directly to Collateral Agent or its designee
and (ii) assemble all of the Related Security and transfer, or license the use
of, all software necessary or desirable to collect the Receivables and the
Related Security to Collateral Agent or its designee at a place selected by
Collateral Agent and (iii) segregate all cash, checks and other instruments
received by it which constitute Collections in a manner acceptable to Collateral
Agent.

 

(b)           Each Borrower hereby
irrevocably appoints Collateral Agent as its attorney-in-fact coupled with an
interest, with full power of substitution and with full authority in the place
and stead of such Borrower, to take any and all steps in the name, and on
behalf, of such Borrower necessary or desirable, in the determination of
Collateral Agent, (i) to collect any amounts due under any Receivables or
Related Security, including endorsing the name of such Borrower or any Credit
Party on checks and other instruments representing Collections and enforcing
such Receivables and Related Security. 
The Borrowers’ conferring of powers upon Collateral Agent under this Section
11.3(b) shall not subject Collateral Agent to any liability if any action
taken by it shall prove to be inadequate or invalid, nor shall it confer any
obligations upon Collateral Agent in any manner whatsoever.

 

(c)           Neither Administrative
Agent nor the Lenders shall have any obligation to take any action or commence
any proceedings to realize upon any Receivable or to enforce any of their
respective rights, powers, privileges or remedies with respect thereto.

 

11.4         Responsibilities of Borrowers.  Notwithstanding anything herein to the
contrary, each Borrower shall (a) perform all of its obligations under the
Contracts related to the Receivables to the same extent as if such Receivables
had not been pledged under the Security Documents (the exercise by Collateral
Agent, Administrative Agent or any Lender of its rights hereunder shall not
relieve the Borrowers or any Credit Party from such obligations) and (b) pay
when due any Taxes payable in connection with the Receivables or their creation
or satisfaction.  Collateral Agent,
Administrative Agent and the Lenders shall neither have any obligation or
liability with respect to any Receivable nor be obligated to perform any of the
obligations of the Borrowers or any Credit Party under any of the foregoing
(including under any Contract with respect thereto).

 

ARTICLE XII  

ADMINISTRATIVE
AGENT

 

In this Article XII,
the Lenders agree among themselves as follows:

 

12.1         Appointment.  Each Lender hereby irrevocably appoints,
designates and authorizes Administrative Agent (for purposes of this Agreement,
the term Administrative Agent shall include Administrative Agent in its
capacity as Collateral Agent pursuant to the Security Documents) to act as
herein specified.  Each Lender hereby
irrevocably authorizes, and each

 

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holder
of any Note by the acceptance of such Note shall be deemed irrevocably to
authorize, Administrative Agent to take such action on its behalf under the
provisions of the Loan Documents (including, without limitation, to give
notices and take such actions on behalf of the Required Lenders as are
consented to in writing by the Required Lenders or all Lenders, as the case may
be) and any other instruments, documents and agreements referred to therein and
to exercise such powers hereunder and thereunder as are specifically delegated to
Administrative Agent by the terms hereof and thereof and such other powers as
are reasonably incidental thereto. 
Administrative Agent may perform any of its duties hereunder, or under
the Loan Documents, by or through its officers, directors, agents, employees or
affiliates.

 

12.2         Nature
of Duties.  Administrative Agent
shall not have any duties or responsibilities except those expressly set forth
in this Agreement.  The duties of
Administrative Agent shall be mechanical and administrative in nature.  EACH LENDER HEREBY ACKNOWLEDGES AND AGREES THAT
ADMINISTRATIVE AGENT SHALL NOT HAVE, BY REASON OF THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT, A FIDUCIARY RELATIONSHIP TO OR IN RESPECT OF ANY LENDER.  Nothing in any of the Loan Documents,
expressed or implied, is intended to or shall be so construed as to impose upon
Administrative Agent any obligations in respect of any of the Loan Documents
except as expressly set forth herein or therein.  Each Lender shall make its own independent investigation of the
financial condition and affairs of the Borrowers in connection with the making
and the continuance of the Loans hereunder and shall make its own appraisal of
the credit worthiness of the Borrowers, and Administrative Agent shall not have
any duty or responsibility, either initially or on a continuing basis, to
provide any Lender with any credit or other information with respect thereto,
whether coming into its possession before making of the Loans or at any time or
times thereafter.  Administrative Agent
will promptly notify each Lender at any time that the Required Lenders have
instructed it to act or refrain from acting pursuant to Article X.

 

12.3         Rights,
Exculpation, Etc.  Neither
Administrative Agent nor any of its officers, directors, agents, employees or affiliates
shall be liable to any Lender for any action taken or omitted by it hereunder
or under any of the Loan Documents, or in connection herewith or therewith,
unless caused by its or their gross negligence or willful misconduct.  Administrative Agent shall not be
responsible to any Lender for any recitals, statements, representations or
warranties herein or for the execution, effectiveness, genuineness, validity,
enforceability, collectibility, or sufficiency of any of the Loan Documents or
any other document or the financial condition of the Borrowers.  Administrative Agent shall not be required
to make any inquiry concerning either the performance or observance of any of
the terms, provisions or conditions of this Agreement or any of the Loan
Documents or any other document or the financial condition of the Borrowers, or
the existence or possible existence of any Unmatured Event of Default or Event
of Default unless requested to do so by the Required Lenders.  Administrative Agent may at any time request
instructions from the Lenders with respect to any actions or approvals
(including the failure to act or approve) which by the terms of any of the Loan
Documents Administrative Agent is permitted or required to take or to grant,
and if such instructions are requested, Administrative Agent shall be
absolutely entitled to refrain from taking any action or to withhold any
approval and shall not be under any liability whatsoever to any Person for
refraining from any action or withholding any approval under any of the Loan

 

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Documents
until it shall have received such instructions from the Required Lenders or all
Lenders, as applicable.  Without
limiting the foregoing, no Lender shall have any right of action whatsoever
against Administrative Agent as a result of either Administrative Agent acting
or refraining from acting or approving under any of the Loan Documents in
accordance with the instructions of the Required Lenders or, to the extent
required by Section 12.1, all of the Lenders.

 

12.4         Reliance.  Administrative Agent shall be entitled to
rely, and shall be fully protected in relying, upon any written notice,
statement, certificate, order or other document or any telephone, telex,
teletype, telecopier or electronic message reasonably believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person,
and, with respect to all matters pertaining herein or to any of the other Loan
Documents and its duties hereunder or thereunder, upon advice of counsel
selected by it.

 

12.5         Indemnification.  To the extent that Administrative Agent is
not reimbursed and indemnified by the Borrowers, the Lenders will reimburse and
indemnify Administrative Agent for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against Administrative Agent, acting pursuant
hereto in such capacity, in any way relating to or arising out of any of the
Loan Documents or any action taken or omitted by Administrative Agent under any
of the Loan Documents, in proportion to each Lender’s Revolving Pro Rata Share;
provided, however, that no Lender shall be liable for any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from
Administrative Agent’s gross negligence or willful misconduct.  The obligations of the Lenders under this Section
12.5 shall survive the payment in full of the Notes and the termination of
this Agreement.

 

12.6         Administrative Agent in its Individual
Capacity.  With respect to its Loans
made by it, the Administrative Agent shall have and may exercise the same
rights and powers hereunder and is subject to the same obligations and
liabilities as and to the extent set forth herein for any other Lender or
holder of Obligations.  The terms
“Lenders”, “holder of Obligations” or “Required Lenders” or any similar terms
shall, unless the context clearly otherwise indicates, include the
Administrative Agent in its individual capacity as a Lender, one of the
Required Lenders or a holder of Obligations. 
The Administrative Agent may accept deposits from, lend money to, and
generally engage in any kind of banking, trust or other business with any
Borrower or any Subsidiary of any Borrower as if it were not acting as the
Administrative Agent hereunder or under any other Loan Document, including the
acceptance of fees or other consideration for services without having to
account for the same to any of the Lenders.

 

12.7         Notice
of Defaults.  Administrative
Agent shall not be deemed to have knowledge or notice of the occurrence of any
Event of Default or Unmatured Event of Default hereunder unless Administrative
Agent has received written notice from a Lender or any Borrower referring to
this Agreement describing such Event of Default or Unmatured Event of Default
and stating that such notice is a “notice of default”.  In the event Administrative Agent receives
such a notice, Administrative Agent shall give prompt notice thereof to the
Lenders.

 

123

 

12.8         Holders of Obligations.  Administrative Agent may deem and treat the
payee of any Obligation as reflected on the books and records of Administrative
Agent as the owner thereof for all purposes hereof unless and until a written
notice of the assignment or transfer thereof shall have been filed with
Administrative Agent pursuant to Section 13.9(c).  Any request, authority or consent of any
Person who, at the time of making such request or giving such authority or
consent, is the holder of any Obligation shall be conclusive and binding on any
subsequent holder, transferee or assignee of such Obligation or of any
Obligation or Obligations granted in exchange therefor.

 

12.9         Actions with Respect to Defaults.  In addition to the Administrative Agent’s
right to take actions on its own accord as permitted under this Credit Agreement,
the Administrative Agent shall take such action with respect to a Default or
Event of Default as shall be directed by the Required Lenders; provided that
until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable and in the best interests of the Lenders and
the Facing Banks; and, further, provided that the Administrative Agent shall
not be required under any circumstances to take any action that, in its
judgment, (a) is contrary to any provision of the Loan Documents or applicable
law or (b) will expose it to any liability or expense against which it has not
been indemnified to its satisfaction. 
If any indemnity furnished to Administrative Agent for any purpose
shall, in the opinion of Administrative Agent, be insufficient or become
impaired, Administrative Agent may call for additional indemnity and cease, or
not commence, to do the acts indemnified against until such additional
indemnity is furnished.

 

12.10       Resignation.

 

(a)           Administrative Agent
may resign from the performance of all its functions and duties hereunder at
any time by giving fifteen (15) Business Days’ prior written notice to the
Funds Administrator and the Lenders. 
Such resignation shall take effect upon the acceptance by a successor
Administrative Agent of appointment pursuant to clause (b), (c) or (d) below.

 

(b)           Upon any such notice of
resignation by Administrative Agent, Required Lenders shall appoint a successor
Administrative Agent who shall be satisfactory to the Funds Administrator and
shall be an incorporated bank or trust company.

 

(c)           If a successor
Administrative Agent shall not have been so appointed within said 15 Business
Day period, Administrative Agent, with the consent of the Funds Administrator,
shall then appoint its successor who shall serve as Administrative Agent, as
the case may be, until such time, if any, as the Required Lenders, with the
consent of the Funds Administrator, appoint a successor as provided above.

 

(d)           If no successor
Administrative Agent has been appointed pursuant to clause (b) or (c), by the
20th Business Day after the date such notice of resignation was given by
Administrative Agent, as the case may be, such resignation shall become
effective and the Required Lenders shall thereafter perform all the duties of
Administrative Agent hereunder until

 

124

 

such
time, if any, as the Required Lenders, with the consent of the Funds
Administrator, appoint a successor Administrative Agent as provided above.

 

ARTICLE XIII 

MISCELLANEOUS

 

13.1         No
Waiver; Modifications in Writing.  No failure or delay on the part of Administrative Agent or any
Lender in exercising any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. 
The remedies provided for herein are cumulative and are not exclusive of
any remedies that may be available to Administrative Agent or any Lender at law
or in equity or otherwise.  No
amendment, modification, supplement, termination or waiver of or to any
provision of this Agreement, nor consent to any departure by any Borrower or
any of its Subsidiaries therefrom, shall be effective unless the same shall be
in writing and signed by or on behalf of the Required Lenders and the
Borrowers; provided, however, that no such amendment,
modification, supplement, termination, waiver or consent, as the case may be,
shall (A) reduce the rate of interest or extend the final maturity of the
Revolving Commitments (but excluding any change relating to waiver of the
applicability of the Default Rate or any mandatory or voluntary repayment of
any principal sum payable by any Borrower to any Lender hereunder or any
mandatory commitment reduction of the Revolving Commitment related to any
mandatory prepayment other than the mandatory commitment reduction at the end
of the Commitment Period), or the date for payment of any fees or interest on
any Loan, or Letter of Credit or any date for reimbursement of any Letter of
Credit Payment or waive or excuse any such payment or any part thereof, or
decrease the rate of interest on any Loan or Letter of Credit Payment, or amend
the definition of “Borrowing Base” to increase the advance rate percentages
specified therein to a level higher than that existing on the date hereof,
without the prior written consent of each holder of a Note or Lender affected
thereby, (B) without the prior written consent of the affected Lender, increase
the Commitment of any Lender, extend any Commitment, decrease the principal
amount of any Loan or fees owed to any Lender hereunder or change the Revolving
Pro Rata Share of any Lender, or, without the prior written consent of all
Lenders, increase the amount of the Commitments, (C) change this Section
13.1 or the definitions of the terms “Required Lenders” or “Revolving Pro
Rata Share,” without the prior written consent of each Lender affected thereby,
or (D) other than as expressly permitted in Section 13.16, effect any
release of any material portion of the Collateral during the term of this
Agreement or release of any Borrower or Subsidiary Guarantor (other than a
Subsidiary Guarantor which is not a Material Subsidiary) from all or
substantially all its obligations under the Subsidiary Guarantee Agreement or
amend any of the Loan Documents to change the first lien nature of the
Collateral without the prior written consent of all Lenders hereunder (other
than as a result of a transaction permitted by Section 8.3 or an Asset
Disposition made in accordance with the terms of this Agreement (including any
amendments thereto permitted hereby) or as otherwise permitted pursuant to the
Subsidiary Guarantee Agreement); and provided, further, that no
such amendment, modification, supplement, termination, waiver or consent, as the
case may be, which has the effect of (x) increasing the duties or obligations
of Administrative Agent hereunder, (y)

 

125

 

increasing
the standard of care or performance required on the part of Administrative
Agent hereunder, or (z) reducing or eliminating the fees, indemnities or
immunities to which Administrative Agent is entitled hereunder (including,
without limitation, any amendment or modification of this Section 13.1(a)),
shall be effective unless the same shall be signed by or on behalf of
Administrative Agent; and provided  further, that no such
amendment, modification, supplement, termination, waiver or consent, as the
case may be, affecting the rights or duties of any Facing Bank under this
Agreement or any other Loan Document, shall be effective unless the same shall
be signed by such Facing Bank.  Any
amendment, modification or supplement of or to any provision of this Agreement,
any waiver of any provision of this Agreement, and any consent to any departure
by the Borrowers from the terms of any provision of this Agreement, shall be
effective only in the specific instance and for the specific purpose for which
made or given.  Except where notice is
specifically required by any Loan Document, no notice to or demand on a
Borrower in any case shall entitle any Borrower to any other or further notice
or demand in similar or other circumstances.

 

13.2         Further Assurances.  Each Borrower agrees to do such further acts and things and to
execute and deliver to Administrative Agent such additional assignments,
agreements, powers and instruments, as Administrative Agent may reasonably
require or deem advisable to carry into effect the purposes of this Agreement
or any of the Loan Documents or to better assure and confirm unto
Administrative Agent its rights, powers and remedies hereunder.

 

13.3         Notices,
Etc.  Except where telephonic
instructions or notices are authorized herein to be given, all notices,
demands, instructions and other communications required or permitted to be
given to or made upon any party hereto or any other Person shall be in writing
and shall be personally delivered or sent by registered or certified mail,
postage prepaid, return receipt requested, or by a reputable overnight or
courier delivery service, or by telecopier, and shall be deemed to be given for
purposes of this Agreement on the third day after deposit in registered or
certified mail, postage prepaid, and otherwise on the day that such writing is
delivered or sent to the intended recipient thereof, or in the case of notice
delivered by telecopy, upon completion of transmission with a copy of such
notice also being delivered under any of the other methods provided above, all
in accordance with the provisions of this Section 13.3.  Unless otherwise specified in a notice sent
or delivered in accordance with the foregoing provisions of this Section
13.3, notices, demands, instructions and other communications in writing
shall be given to or made upon the respective parties hereto at their
respective addresses (or to their respective telecopier numbers) indicated on
its signature page to this Agreement or, in the case of any Assignee, on its
signature page to its Assignment and Assumption Agreement and, in the case of
telephonic instructions or notices, by calling the telephone number or numbers
indicated for such party on its signature page to this Agreement or such
Assignment or Assumption Agreement, as the case may be.

 

13.4         Costs,
Expenses and Taxes.

 

(a)           Generally.  Each Borrower agrees without duplication to
pay promptly upon request by Administrative Agent all reasonable costs and
expenses incurred by or on behalf of the Administrative Agent in connection
with the negotiation, preparation, printing, typing, reproduction, execution and
delivery of this Agreement and the other Loan Documents and the

 

126

 

documents
and instruments referred to herein and therein and any amendment, waiver,
consent relating hereto or thereto or other modifications of (or supplements
to) any of the foregoing and any and all other documents and instruments
furnished pursuant hereto or thereto or in connection herewith or therewith,
including without limitation, the reasonable fees and out-of-pocket expenses of
Winston & Strawn, special counsel to Administrative Agent, and any local
counsel retained by Administrative Agent relative thereto, other Attorney
Costs, independent public accountants and other outside experts retained by
Administrative Agent in connection with the administration of this Agreement
and the other Loan Documents, and all search fees, appraisal fees and expenses,
title insurance policy fees, costs and expenses and filing and recording fees
and all costs and expenses (including, without limitation, Attorney Costs), if
any, in connection with the enforcement of this Agreement, any of the Loan
Documents or any other agreement furnished pursuant hereto or thereto or in
connection herewith or therewith.  In addition,
each Borrower shall pay any and all present and future stamp, transfer, excise
and other similar taxes payable or determined to be payable in connection with
the execution and delivery of this Agreement, any Loan Document, or the making
of any Loan, and agrees to save and hold Administrative Agent and each Lender
harmless from and against any and all liabilities with respect to or resulting
from any delay by such Borrower in paying, or omission by such Borrower to pay,
such taxes.  Any portion of the
foregoing fees, costs and expenses which remains unpaid more than thirty (30)
days following Administrative Agent’s or any Lender’s statement and request for
payment thereof shall bear interest from the date of such statement and request
to the date of payment at the Default Rate.

 

(b)           Indemnification.   Borrowers will jointly and severally
indemnify and hold harmless Administrative Agent and each Lender and each
director, officer, employee, agent, attorney, trustee, advisor and Affiliate of
Administrative Agent and each Lender (each such Person an “Indemnified
Person” and collectively, the “Indemnified Persons”) from and
against all losses, claims, damages, obligations (including removal or remedial
actions), expenses or liabilities (not including Taxes as to which a Borrower
is not required to make any payment of additional amounts pursuant to Section
4.7(c) hereof) to which such Indemnified Person may become subject, insofar
as such losses, claims, damages, penalties, obligations (including removal or
remedial actions), expenses or liabilities (or actions, suits or proceedings
including any inquiry or investigation or claims in respect thereof (whether or
not Administrative Agent or any Lender is a party thereto)) arise out of, in
any way relate to, or result from the transactions contemplated by this
Agreement or any of the other Loan Documents and to reimburse each Indemnified
Person upon their demand, for any Attorney Costs or other expenses incurred in
connection with investigating, preparing to defend or defending any such loss,
claim, damage, liability, action or claim; provided, however,

 

(i)            that
no Indemnified Person shall have the right to be so indemnified hereunder
for any loss, claim, damage, penalties, obligations, expense or liability to
the extent it arises or results from the gross negligence or willful misconduct
or bad faith of such Indemnified Person as finally determined by a court of
competent jurisdiction and

 

(ii)           that
nothing contained herein shall affect the obligations and liabilities of the
Lenders to the Borrowers contained herein.

 

127

 

(iii)          If any action, suit or proceeding arising
from any of the foregoing is brought against Administrative Agent, any Lender
or any other Person indemnified or intended to be indemnified pursuant to this Section 13.4,
the Borrowers will, if requested by Administrative Agent, any Lender or any
such Indemnified Person, resist and defend such action, suit or proceeding or
cause the same to be resisted and defended by counsel reasonably satisfactory
to the Person or Persons indemnified or intended to be indemnified.  Each Indemnified Person shall, unless
Administrative Agent, a Lender or other Indemnified Person has made the request
described in the preceding sentence and such request has been complied with,
have the right to employ its own counsel (or (but not as well as) staff
counsel) to investigate and control the defense of any matter covered by such
indemnity and the reasonable fees and expenses of such counsel shall be at the
expense of the indemnifying party. 
Excluding any liability to the extent arising out of the gross
negligence or willful misconduct of any Indemnified Person as determined by a
court of competent jurisdiction in a final non-appealable judgment, the
Borrowers further agree to indemnify and hold each Indemnified Person harmless
from all loss, cost (including Attorney Costs), liability and damage whatsoever
incurred by any Indemnified Person by reason of any violation of any
Environmental Laws or Environmental Permits or for the Release or Threatened
Release of any Contaminants into the environment for which any Borrower or any
of its Subsidiaries has any liability or which occurs upon the Mortgaged
Property or which is related to any property currently or formerly owned,
leased or operated by or on behalf of any Borrower or any of its Subsidiaries,
or by reason of the imposition of any Environmental Lien or which occurs by a
breach of any of the representations, warranties or covenants relating to
environmental matters contained herein, including, without limitation, by
reason of any matters disclosed in Schedule 6.17, provided that,
with respect to any liabilities arising from acts or failure to act for which
any Borrower or any of its Subsidiaries is strictly liable under any
Environmental Law or Environmental Permit, such Borrower’s obligation to each
Indemnified Person under this indemnity shall likewise be without regard
to fault on the part of any Borrower or any such Subsidiary.  If the Borrowers shall fail to do any act or
thing which it has covenanted to do hereunder or any representation or warranty
on the part of any Borrower or any Subsidiary contained herein or in any other
Loan Document shall be breached, Administrative Agent may (but shall not be
obligated to) do the same or cause it to be done or remedy any such breach, and
may expend its funds for such purpose, and will use its best efforts to give
prompt written notice to the Funds Administrator that it proposes to take such
action.  Any and all amounts so expended
by Administrative Agent shall be repaid to it by the Borrowers promptly upon
Administrative Agent’s demand therefor, with interest at the Default Rate in
effect from time to time during the period including the date so expended by
Administrative Agent to the date of repayment. 
To the extent that the undertaking to indemnify, pay or hold harmless
Administrative Agent or any Lender as set forth in this Section 13.4
may be unenforceable because it is violative of any law or public policy, the
Borrowers shall make the maximum contribution to the payment and satisfaction
of each of the indemnified liabilities which is permissible under applicable
law.  The obligations of the Borrowers
under this Section 13.4 shall survive the termination of this Agreement
and the discharge of the Borrowers’ other Obligations hereunder.

 

128

 

13.5         Defaulting
Lender.

 

(a)           Unless the
Administrative Agent shall have received notice from a Lender that such Lender
will not make available to the Administrative Agent a Loan required to be made
by it pursuant to Section 2.2 or its participation pursuant to Section
2.5(d)(ii), Administrative Agent may assume that such Lender has made such
amounts available to the Administrative Agent in accordance with such Sections
and the Administrative Agent in its sole discretion may, in reliance upon such
assumption, make available to the Borrowers, pursuant to the directions of the
Funds Administrator, or the applicable Facing Bank a corresponding amount on
behalf of such Lender.

 

(b)           If any amount referred
to in Section 13.5(a) or in Section 4.9 is not made available to
the Administrative Agent by a Lender (a “Defaulting Lender”) and the
Administrative Agent has made such amount available to the Borrowers or a
Facing Bank, the Administrative Agent shall be entitled to recover such amount
on demand from such Defaulting Lender together with interest as hereinafter
provided. If such Defaulting Lender does not pay such amount forthwith upon the
Administrative Agent’s demand therefore, Administrative Agent shall promptly
notify the Borrowers and the Borrowers shall immediately (but in no event later
than five Business Days after such demand) pay such amount to the
Administrative Agent together with interest calculated as hereinafter provided.
The Administrative Agent shall also be entitled to recover from such Defaulting
Lender and/or the Borrowers, as the case may be, (i) interest on such amount in
respect of each day from the date such corresponding amount was made available
by the Administrative Agent to the Borrowers to the date such amount is
recovered by the Administrative Agent, at a rate per annum equal to either (A)
if paid by such Defaulting Lender, the Federal Funds Rate or (B) if paid by the
Borrowers, the then applicable rate of interest, calculated in accordance with Section
3.1, plus (ii) in each case, an amount equal to any costs (including
legal expenses) and losses incurred as a result of the failure of such
Defaulting Lender to provide such amount as provided in this Agreement. Nothing
herein shall be deemed to relieve any Lender from its duty to fulfill its
obligations hereunder or to prejudice any rights which the Borrowers or the
Facing Bank, may have against any Lender as a result of any default by such
Lender hereunder, including the right of the Borrowers to seek reimbursement
from any Defaulting Lender for any amounts paid by the Borrowers under clause
(ii) above on account of such Defaulting Lender’s default.

 

(c)           (i)            Notwithstanding
anything contained herein to the contrary, so long as any Lender is a
Defaulting Lender or has rejected its Commitment, the Administrative Agent
shall not be obligated to transfer to such Lender any payments made by the
Borrowers to the Administrative Agent for the benefit of such Lender; and such
Lender shall not be entitled to the sharing of any payments pursuant to Section
4.10. Amounts otherwise payable to such Lender under Section 4.10
shall instead be paid to the Administrative Agent.  For so long as any Lender shall be in default for a period of at
least 2 Business Days of its obligation to fund its Revolving Pro Rata Share of
any Loan, no fees shall be accrued by or paid to such Lender.

 

(ii)           For
purposes of voting or consenting to matters with respect to the Loan Documents
and determining Revolving Pro Rata Share, such Defaulting Lender

 

129

 

shall
be deemed not to be a “Lender” and such Lender’s Commitment shall be deemed to
be zero (0).

 

(iii)          This Section 13.5(c) shall remain
effective with respect to a Defaulting Lender until (A) the Obligations under
this Agreement shall have been declared or shall have become immediately due
and payable or (B) the Required Lenders, the Administrative Agent and the Funds
Administrator shall have waived such Lender’s default in writing.

 

(iv)          No
Lender’s Commitment shall be increased or otherwise affected, and performance
by the respective Borrower shall not be excused, by the operation of this Section
13.5(c). Any payments of principal or interest which would, but for this Section
13.5(c), be paid to any Lender, shall be paid to the Lenders who shall not
be in default under their respective Commitments and who shall not have
rejected any Commitment, for application to the Loans then due and payable or
to the other Obligations then due and payable or to provide cash collateral to
secure Obligations not then due and payable in such manner and order as shall
be determined by the Administrative Agent.

 

13.6         Confirmations.  Each Borrower and each holder of any portion
of the Obligations agrees from time to time, upon written request received by
it from the other, to confirm to the other in writing (with a copy of each such
confirmation to Administrative Agent) the aggregate unpaid principal amount of
the Loan or Loans and other Obligations then outstanding.

 

13.7         Setoff;
Recoupment.

 

(a)           In addition to any
rights and remedies of the Lenders provided by law, each Lender shall have the
right, without prior notice to the Funds Administrator, any such notice being
expressly waived by the Funds Administrator, upon the occurrence and during the
continuance of an Event of Default, to setoff and apply against any
Obligations, whether matured or unmatured, of the Borrowers to such Lender, any
amount owing from such Lender to the Borrowers, at or at any time after, the
happening of any of the above-mentioned events, and the aforesaid right of
setoff may be exercised by such Lender against the Borrowers or against any
trustee in bankruptcy, debtor in possession, assignee for the benefit of
creditors, receivers, or execution, judgment or attachment creditor of the
Borrowers, or against anyone else claiming through or against, the Borrowers or
such trustee in bankruptcy, debtor in possession, assignee for the benefit of
creditors, receivers, or execution, judgment or attachment creditor,
notwithstanding the fact that such right of setoff shall not have been
exercised by such Lender prior to the making, filing or issuance, or service
upon such Lender of, or of notice of, any such petition, assignment for the
benefit of creditors, appointment or application for the appointment of a
receiver, or issuance of execution, subpoena, order or warrant.  Each Lender agrees promptly to notify the
Funds Administrator and Administrative Agent after any such setoff and
application made by such Lender, provided that the failure to give such
notice shall not affect the validity of such setoff and application.

 

130

 

(b)           Borrowers expressly
agree that to the extent the Borrowers make a payment or payments and such
payment or payments, or any part thereof, are subsequently invalidated,
declared to be fraudulent or preferential, set aside or are required to be repaid
to a trustee, receiver, or any other party under any bankruptcy act, state or
federal law, common law or equitable cause, then to the extent of such payment
or repayment, the Indebtedness to the Lenders or part thereof intended to be
satisfied shall be revived and continued in full force and effect as if said
payment or payments had not been made.

 

13.8         Execution
in Counterparts.  This Agreement may
be executed in any number of counterparts and by different parties hereto on
separate counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Agreement.

 

13.9         Binding
Effect; Assignment; Addition and Substitution of Lenders.

 

(a)           This Agreement shall be
binding upon, and inure to the benefit of, the Borrowers, Collateral Agent,
Administrative Agent, the Lenders, all future holders of the Notes and their
respective successors and assigns; provided, however, that the
Borrowers may not assign their rights or obligations hereunder or in connection
herewith or any interest herein (voluntarily, by operation of law or otherwise)
without the prior written consent of Administrative Agent and all of the
Lenders.

 

(b)           Each Lender may at any
time sell to one or more banks or other entities (“Participants”)
participating interests in all or any portion of its Commitment and Loans or
participation in Letters of Credit or any other interest of such Lender
hereunder (in respect of any Lender, its “Credit Exposure”).  In the event of any such sale by a Lender of
participating interests to a Participant, such Lender’s obligations under this
Agreement shall remain unchanged, such Lender shall remain solely responsible
for the performance thereof, and the Funds Administrator and Administrative
Agent shall continue to deal solely and directly with such Lender in connection
with such Lender’s rights and obligations under this Agreement.  At the time of each sale of a participating
interest, pursuant to this Section 13.8(b), the Lender shall provide to
the Funds Administrator or Administrative Agent revised IRS Forms, and if
applicable, a Section 4.8(d)(ii) Certificate described in Section 4.8(d),
reflecting that portion of its Commitment and Loan retained by it on an amended
IRS Form W-8BEN and that portion of its Commitment and Loan which had been sold
to a Participant on a IRS Form W-8IMY (together with any required
attachments).  The Borrowers agree that
if amounts outstanding under this Agreement or any of the Loan Documents are
due or unpaid, or shall have been declared or shall have become due and payable
upon the occurrence of an Event of Default, each Participant shall be deemed to
have the right of setoff in respect of its participating interest in amounts
owing under this Agreement and the Loan Documents to the same extent as if the
amount of its participating interest were owing directly to it as a Lender
under this Agreement or any other Loan Document, provided, however,  that such right of setoff shall be subject
to the obligation of such Participant to share with the Lenders, and the
Lenders agree to share with such Participant, as provided in Section 4.10.  The Borrowers also agree that each
Participant shall be entitled to the benefits of Section 3.5 and 4.8
with respect to its participation in the Loans outstanding from time to time,
provided that such Participant’s benefits under Sections 3.5 and

 

131

 

4.8 shall be limited to the benefits that the primary
Lender would be entitled to thereunder. 
Each Lender agrees that any agreement between such Lender and any such
Participant in respect of such participating interest shall not restrict such
Lender’s right to approve or agree to any amendment, restatement, supplement or
other modification to, waiver of, or consent under, this Agreement or any of
the Loan Documents except to the extent that any of the forgoing would (i)
extend the final scheduled maturity of any Loan or Note in which such Participant
is participating or extend the stated maturity of any Letter of Credit in which
such Participant is participating beyond the Commitment Termination Date, or
reduce the rate or extend the time of payment of interest or fees on any such
Loan, Note or Letter of Credit (except in connection with a waiver of
applicability of any post-default increase in interest rates) or reduce the
principal amount thereof, or increase the amount of the Participant’s
participation over the amount thereof then in effect (it being understood that
waivers or modifications of conditions precedent, covenants, Events of Default
or Unmatured Events of Default or of a mandatory reduction in Commitments shall
not constitute a change in the terms of such participation, and that an increase
in any Commitment or Loan shall be permitted without the consent of any
Participant if the Participant’s participation is not increased as a result
thereof), (ii) consent to the assignment or transfer by the Borrowers of any of
their rights and obligations under this Agreement or (iii) release all or
substantially all of the Collateral under all of the Security Documents (except
as expressly provided in the Loan Documents) supporting the Loans and/or
Letters of Credit hereunder in which such Participant is participating.

 

(c)           Any Lender may at any
time assign to one or more Eligible Assignees, including an Affiliate thereof
(treating any Related Fund as a single Eligible Assignee) (each an “Assignee”),
all or any part of its Credit Exposure pursuant to an Assignment and Assumption
Agreement, provided that (i) it assigns its Credit Exposure in an amount
not less than $1,000,000 with respect to Revolving Loans, and (ii) any
assignment of all or any portion of any Lender’s Credit Exposure to an Assignee
other than an Affiliate of such Lender or another Lender, or in the case of a
Lender that is a fund that invests in senior loans, any Related Fund, shall
require the prior written consent of the Administrative Agent and, so long as
no Event of Default has occurred and is continuing, the Funds Administrator
(the consent of the Funds Administrator and the Administrative Agent not to be
unreasonably withheld or delayed, provided, however, that for the
first fifteen Business Days following the Closing Date, assignments by
Administrative Agent shall not require the consent of the Funds Administrator)
and provided  further, that notwithstanding the foregoing
limitations, any Lender may at any time assign all or any part of its Credit
Exposure to any Affiliate of such Lender or to any other Lender (or in the case
of a Lender which is a fund, any Related Fund).  Upon execution of an Assignment and Assumption Agreement and the
payment of a nonrefundable assignment fee of $3,500 (provided that no such fee
shall be payable upon assignments by any Lender which is a fund that invests in
bank loans to any Related Fund in immediately available funds to the
Administrative Agent at its Payment Office in connection with each such
assignment, written notice thereof by such transferor Lender to the
Administrative Agent and the recording by the Administrative Agent in the
Register of such assignment and the resulting effect upon the Revolving
Commitment of the assigning Lender and the Assignee, the Assignee shall have,
to the extent of such assignment, the same rights and benefits as it would have
if it were a Lender hereunder and the holder of the Obligations (provided that
the Funds Administrator and the Administrative Agent shall be entitled to
continue to deal solely and directly with the assignor Lender in connection
with the

 

132

 

interests
so assigned to the Assignee until written notice of such assignment, together
with payment instructions, addresses and related information with respect to
the Assignee, shall have been given to the Funds Administrator and the
Administrative Agent by the assignor Lender and the Assignee) and, if the
Assignee has expressly assumed, for the benefit of the Borrowers, some or all
of the transferor Lender’s obligations hereunder, such transferor Lender shall
be relieved of its obligations hereunder to the extent of such assignment and
assumption, and except as described above, no further consent or action by any
Borrower, the Funds Administrator, the Lenders or the Administrative Agent
shall be required.  At the time of each
assignment pursuant to this Section 13.9(c) to a Person which is not
already a Lender hereunder and which is not a United States person (as such
term is defined in Section 7701(a)(30) of the Code) for United States Federal
income tax purposes, the respective Assignee shall provide to the Funds
Administrator and the Administrative Agent the appropriate IRS Forms (and, if
applicable a Section 4.8(d)(ii) Certificate) described in Section 4.8(d) and
(e).  Each Assignee shall take such
Credit Exposure subject to the provisions of this Agreement and to any request
made, waiver or consent given or other action taken hereunder, prior to the
receipt by Administrative Agent and the Funds Administrator of written notice
of such transfer, by each previous holder of such Credit Exposure.  Such Assignment and Assumption Agreement
shall be deemed to amend this Agreement and Schedule 1.1(a) hereto, to
the extent, and only to the extent, necessary to reflect the addition of such
Assignee as a Lender and the resulting adjustment of all or a portion of the
rights and obligations of such transferor Lender under this Agreement, the
Commitments, the determination of its Revolving Pro Rata Share (rounded to twelve
decimal places), the Loans, any outstanding Letters of Credit and any new Notes
to be issued, at the Borrowers’ expense, to such Assignee, and no further
consent or action by the Borrowers, the Funds Administrator or Lenders shall be
required to effect such amendments.

 

(d)           The Borrowers authorize
each Lender to disclose to any Participant or Assignee or its investment
advisor (each, a “Transferee”) and any prospective Transferee any and
all financial information in such Lender’s possession concerning any Borrower
and any Subsidiary of any Borrower which has been delivered to such Lender by
any Borrower pursuant to this Agreement or which has been delivered to such
Lender by such Borrower in connection with such Lender’s credit evaluation of
such Borrower prior to entering into this Agreement; provided that such
Transferee or prospective Transferee agrees to treat any such information which
is not public as confidential in accordance with Section 13.17.

 

(e)           Notwithstanding any
other provision set forth in this Agreement, any Lender may at any time pledge
or assign all or any portion of its rights under this Agreement and the other
Loan Documents (including, without limitation, the Notes held by it) to any
Federal Reserve Bank in accordance with Regulation A of the Federal Reserve
Board without notice to, or the consent of, any Borrower or the Funds
Administrator; provided that no such pledge or assignment of a security
interest under this Section 13.9(f) shall release a Lender from any
obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.  Any Lender
which is a fund may pledge all or any portion of its Notes or Loans to its
trustee (or other similar representative) in support of its obligations to its
trustee.  No such pledge or assignment
shall release the transferor Lender from its obligations hereunder.

 

133

 

13.10       CONSENT TO JURISDICTION; MUTUAL WAIVER
OF JURY TRIAL.

 

(A)          ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE
OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND,
BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH CREDIT PARTY HEREBY IRREVOCABLY
ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS.  EACH CREDIT PARTY FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN
ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH CREDIT PARTY, AT ITS ADDRESS SET FORTH
OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO BECOME EFFECTIVE THIRTY (30) DAYS
AFTER SUCH MAILING.  NOTHING HEREIN
SHALL AFFECT THE RIGHT OF AGENT UNDER THIS AGREEMENT, ANY LENDER OR THE HOLDER
OF ANY NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST EACH CREDIT PARTY IN
ANY OTHER JURISDICTION.

 

(B)           EACH CREDIT PARTY HEREBY IRREVOCABLY WAIVES ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF
THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN
CLAUSE (A) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD
OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

 

(C)           EACH OF THE PARTIES TO THIS AGREEMENT HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN ANY COURT OR
JURISDICTION, INCLUDING WITHOUT LIMITATION THOSE REFERRED TO IN CLAUSE (A)
ABOVE, IN RESPECT TO ANY MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY.

 

13.11       GOVERNING
LAW.  THIS AGREEMENT AND EACH
NOTE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW
YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL
LAWS AND DECISIONS OF SAID STATE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAW.

 

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

 

134

 

13.13       Transfers
of Notes.  In the event that the
holder of any Note (including any Lender) shall transfer such Note, it shall
immediately advise Administrative Agent and the Funds Administrator of such
transfer, and Administrative Agent and the Borrowers shall be entitled
conclusively to assume that no transfer of any Note has been made by any holder
(including any Lender) unless and until Administrative Agent and the Funds
Administrator shall have received written notice to the contrary.  Except as otherwise provided in this
Agreement or as otherwise expressly agreed in writing by all of the other
parties hereto, no Lender shall, by reason of the transfer of a Note or
otherwise, be relieved of any of its obligations hereunder.  Each transferee of any Note shall take such
Note subject to the provisions of this Agreement and to any request made,
waiver or consent given or other action taken hereunder, prior to the receipt
by Administrative Agent and the Funds Administrator of written notice of such
transfer, by each previous holder of such Note, and, except as expressly
otherwise provided in such transfer, Administrative Agent, any Borrower and the
Funds Administrator shall be entitled conclusively to assume that the
transferee named in such notice shall hereafter be vested with all rights and
powers under this Agreement with respect to the Revolving Pro Rata Share of the
Loans of the Lender named as the payee of the Note which is the subject of such
transfer.

 

13.14       Registry.  The Borrowers hereby designate
Administrative Agent to serve as the Borrowers’ agent, solely for purposes of
this Section 13.14 to maintain a register (the “Register”) on which it
will record the Loans made by each of the Lenders and each repayment in respect
of the principal amount of the Loans of each Lender.  Failure to make any such recordation, or any error in such
recordation shall not affect any Borrower’s obligations in respect of such
Loans.  With respect to any Lender, the
transfer of the rights to the principal of, and interest on, any Loan shall not
be effective until such transfer is recorded on the Register maintained by
Administrative Agent with respect to ownership of such Loans and prior to such
recordation all amounts owing to the transferor with respect to such Loans
shall remain owing to the transferor. 
The registration of assignment or transfer of all or part of any Loans
shall be recorded by Administrative Agent on the Register only upon the
acceptance by Administrative Agent of a properly executed and delivered
Assignment and Assumption Agreement pursuant to Section 13.9(c).  Coincident with the delivery of such an
Assignment and Assumption Agreement to Administrative Agent for acceptance and
registration of assignment or transfer of all or part of a Loan, or as soon
thereafter as practicable, the assigning or transferor Lender shall surrender
the Note (if any) evidencing such Loan, and thereupon one or more new Notes in
the same aggregate principal amount then owing to such assignor or transferor
Lender shall be issued to the assigning or transferor Lender and/or the new
Lender.  The Borrowers agree to
indemnify Administrative Agent from and against any and all losses, claims,
damages and liabilities of whatsoever nature which may be imposed on, asserted
against or incurred by Administrative Agent (other than those arising from the
gross negligence or willful negligence of the Administrative Agent) in
performing its duties under this Section 13.14.

 

13.15       Headings.  The Table of Contents and Article and
Section headings used in this Agreement are for convenience of reference only
and shall not affect the construction of this Agreement.

 

13.16       Termination of Agreement.  This Agreement shall terminate when the
Revolving Commitment of each Lender has terminated and all outstanding
Obligations and

 

135

 

Loans
have been paid in full and all Letters of Credit have expired or been
terminated or otherwise handled in a manner satisfactory to the issuer thereof;
provided, however, that the rights and remedies of Collateral
Agent, Administrative Agent and each Lender with respect to any representation
and warranty made by the Borrowers pursuant to this Agreement or any other Loan
Document, and the indemnification provisions contained in this Agreement and
any other Loan Document, including, without limitation, Sections 3.4, 3.5,
and 4.8, shall be continuing and shall survive any termination of this
Agreement or any other Loan Document. 
The Mortgaged Property, the Collateral and any other collateral security
for the Obligations shall be released from any security interest or Lien
created by the Loan Documents in accordance with the terms of the applicable
Security Documents.

 

13.17       Confidentiality.  Each of the Lenders severally agrees to keep
confidential all non-public information pertaining to any Borrower and any
Subsidiaries or Affiliates which is provided to it by any such parties in
accordance with such Lender’s customary procedures for handling confidential
information of this nature and in a prudent fashion, and shall not disclose
such information to any Person except:

 

(a)           to the extent such
information is public when received by such Lender or becomes public thereafter
due to the act or omission of any party other than a Lender,

 

(b)           to the extent such
information is independently obtained from a source other than a Borrower or
its Subsidiaries and such information from such source is not, to such Lender’s
knowledge, subject to an obligation of confidentiality or, if such information
is subject to an obligation of confidentiality, that disclosure of such
information is permitted,

 

(c)           to an Affiliate of such
Lender, counsel, auditors, examiners of any regulatory authority having or
reasonably asserting jurisdiction over such Lender, accountants and other
consultants retained by Administrative Agent or any Lender or to any Affiliate
of a Lender which is a direct or indirect contractual counterparty in swap
agreements with any Borrower or a Subsidiary of any Borrower or such
contractual counterparty’s professional advisor (so long as such contractual
counterparty or professional advisor to such contractual counterparty agrees to
be bound by the provisions of this Section 13.17) or to the National
Association of Insurance Commissioners or any similar organization or any
nationally recognized rating agency that requires access to information about a
Lender’s investment portfolio in connection with rating issued with respect to
such Lender,

 

(d)           in connection with any
litigation or the enforcement of the rights of any Lender or Administrative
Agent under this Agreement or any other Loan Document,

 

(e)           to the extent (x)
required by any applicable statute, rule or regulation or court order
(including, without limitation, by way of subpoena) or pursuant to the request
of any Governmental Authority having or reasonably asserting jurisdiction over
any Lender or Administrative Agent; provided, however, that in such event, if
the Lender(s) are able to do so, the Lender shall provide the Funds
Administrator with prompt notice of such requested disclosure so that the
Borrowers may seek a protective order or other appropriate remedy, and, in any
event, the Lenders will endeavor in good faith to provide only that portion of
such

 

136

 

information
which, in the reasonable judgment of the Lender(s), is relevant and legally
required to be provided, (y) requested by any nationally recognized rating
agency that requires access to information about a Lender’s investment
portfolio in connection with rating issued with respect to such Lender or
(z)  requested by an Affiliate of a
Lender which is a direct or indirect contractual counterparty in swap agreements
with a Borrower or a Subsidiary of the Borrower or such contractual
counterparty’s professional advisor (so long as such contractual counterparty
or professional advisor to such contractual counterparty agrees to be bound by
the provisions of this Section 13.17) or to the National Association of
Insurance Commissioners or any similar organization or any nationally
recognized rating agency that requires access to information about a Lender’s
investment portfolio in connection with rating issued with respect to such
Lender,

 

(f)            to the extent
disclosure to other entities is appropriate in connection with any proposed or
actual assignment or grant of a participation by any of the Lenders of
interests in this Agreement and/or any of the other Loan Documents to such
other entities (who will in turn be required to maintain confidentiality as if
they were Lenders parties to this Agreement). 
In no event shall Administrative Agent or any Lender be obligated or
required to return any such information or other materials furnished by the
Borrowers.

 

13.18       Concerning the Collateral and the
Loan Documents.

 

(a)           Authority.  Each Lender and each Facing Bank authorizes
and directs Administrative Agent to act as Collateral Agent and to enter into
the Loan Documents relating to the Collateral for the benefit of the Lenders
and the Facing Banks and the other Secured Parties.  Each Lender and each Facing Bank agree that any action taken by
Administrative Agent, the Collateral Agent or the Required Lenders (or, where
required by the express terms hereof, a different proportion of the Lenders) in
accordance with the provisions hereof or of the other Loan Documents, and the
exercise by Administrative Agent, the Collateral Agent or the Required Lenders
(or, where so required, such different proportion of the Lenders) of the powers
set forth herein or therein, together with such other powers as are reasonably
incidental thereto, shall be authorized and binding upon all of the Lenders and
Facing Banks.  Without limiting the generality
of the foregoing, Administrative Agent or the Collateral Agent as the case may
be, shall have the sole and exclusive right and authority to (i) act as the
disbursing and collecting agent for the Lenders and the Facing Banks with
respect to all payments and collections arising in connection herewith and with
the Loan Documents relating to the Collateral; (ii) execute and deliver each
Loan Document relating to the Collateral and accept delivery of each such
agreement delivered by any Borrower or any of its Subsidiaries; (iii) act as
Collateral Agent for the Lenders and the Facing Banks for purposes of the
perfection of security interests and Liens created by such agreements and all
other purposes stated therein to the extent such perfection is required under
the Loan Documents, provided, however, the Collateral Agent
hereby appoints, authorizes and directs each Lender and each Facing Bank to act
as collateral sub-agent for Administrative Agent, the Lenders and the Facing
Banks for purposes of the perfection of all security interests and Liens with
respect to a Borrower’s and its Subsidiaries’ respective deposit accounts
maintained with, and cash and Cash Equivalents held by, such Lender or such
Facing Bank; (iv) manage, supervise and otherwise deal with the Collateral; (v)
take such action as is necessary or desirable to maintain the perfection and
priority of the security interests and liens created or purported to be created
by the Loan Documents; and (vi) except as may be otherwise

 

137

 

specifically
restricted by the terms hereof or of any other Loan Document, exercise all
remedies given to Administrative Agent, the Lenders or the Facing Banks with
respect to the Collateral under the Loan Documents relating thereto, applicable
law or otherwise.

 

(b)           Release of
Collateral.  (i) Each of the
Administrative Agent, the Lenders and the Facing Banks hereby direct the
Administrative Agent or the Collateral Agent, as the case may be, to release,
in accordance with the terms hereof, any Lien held by the Administrative Agent
or the Collateral Agent, as the case may be, under the Security Documents (and,
in the case of clause (B) below, release the affected Subsidiary from its
guaranty),

 

(A)          against all of the
Collateral, upon final and indefeasible payment in full in cash of the Loans
and Obligations and termination hereof;

 

(B)           against any part of the
Collateral sold or disposed of by any Borrower or any of its Restricted
Subsidiaries (other than sales permitted under Section 8.6(e) but
including, without limitation, in the case of a sale or disposition of all of
the Capital Stock of a Subsidiary owned by a Borrower and its Subsidiaries, all
assets of such Subsidiary and its Subsidiaries and all Pledged Intercompany
Notes issued by such Subsidiary and its Subsidiaries), if such sale or
disposition is permitted hereby (or permitted pursuant to a waiver or consent
of a transaction otherwise prohibited by such Section);

 

(C)           against any Collateral
acquired by any Borrower or any of its Subsidiaries after the Closing Date and
at least 80% of the purchase price therefor is within 120 days of the
acquisition thereof financed with Indebtedness secured by a Lien permitted by Section
8.1(b)(i); and

 

(D)          against a part of the
Collateral which release does not require the consent of all of the Lenders as
set forth in Section 13.1(a)(D), if such release is consented to by the
Required Lenders;

 

provided,
however, that (i) the Administrative Agent or the Collateral Agent, as
the case may be, shall not be required to execute any such document on terms
which, in its opinion, would expose it to liability or create any obligation or
entail any consequence other than the release of such Liens without recourse or
warranty, and (ii) such release shall not in any manner discharge, affect or
impair the Obligations or any Liens upon (or obligations of any Borrower or any
of its Subsidiaries in respect of) all interests retained by any Borrower
and/or any of its Subsidiaries, including (without limitation) the proceeds of
any sale, all of which shall continue to constitute part of the Collateral.

 

(ii)           Each of the Lenders and the Facing Banks hereby direct
the Collateral Agent to execute and deliver or file such termination and
partial release statements and do such other things as are necessary to release
Liens to be released pursuant to this Section 13.18 promptly upon the
effectiveness of any such release or enter into intercreditor agreements
contemplated or permitted herein.

 

138

 

(c)           No Obligation.  Neither Administrative Agent nor the
Collateral Agent shall have any obligation whatsoever to any Lender or to any
other Person to assure that the Collateral exists or is owned by any Borrower
or any of its Subsidiaries or is cared for, protected or insured or has been
encumbered or that the Liens granted to Administrative Agent or the Collateral
Agent herein or pursuant to the Loan Documents have been properly or
sufficiently or lawfully created, perfected, protected or enforced or are entitled
to any particular priority, or to exercise at all or in any particular manner
or under any duty of care, disclosure or fidelity, or to continue exercising,
any of the rights, authorities and powers granted or available to
Administrative Agent or the Collateral Agent in any of the Loan Documents, it
being understood and agreed that in respect of the Collateral, or any act,
omission or event related thereto, Administrative Agent and the Collateral
Agent may act in any manner it may deem appropriate, in its sole discretion,
given Administrative Agent’s own interests in the Collateral as one of the
Lenders and that neither Administrative Agent nor the Collateral Agent shall
have any duty or liability whatsoever to any Lender; provided, that,
notwithstanding the foregoing, Administrative Agent shall be responsible for
their grossly negligent actions or actions constituting intentional misconduct.

 

(d)           Senior Liens.  Each Lender hereby instructs the
Administrative Agent and the Collateral Agent to enter into the Security
Agreement and the Intercreditor Agreement and such amendments or modifications
thereto and to the other Security Documents consistent herewith as the
Administrative Agent or the Collateral Agent reasonably determines to be
necessary to cause the Liens granted by the Borrowers and the Restricted
Subsidiaries in favor of the Administrative Agent and Lenders to secure the
Obligations to be senior to the Liens granted to secure the Term Loan
Obligations.  Each Lender agrees that it
shall be bound by the terms of the Intercreditor Agreement.

 

13.19       Joint
and Several Liability of Borrowers.

 

(a)           Each of the Borrowers
shall be jointly and severally liable hereunder and under each of the other
Loan Documents with respect to all Obligations, regardless of which of the
Borrowers actually receives the proceeds of the Loans or the benefit of any
other extensions of credit hereunder, or the manner in which the Funds
Administrator, the Borrowers, the Administrative Agent, the Lenders or any of
the Facing Banks account therefore in their respective books and records. In
furtherance and not in limitation of the foregoing, (i) each Borrower’s
obligations and liabilities with respect to proceeds of Loans which it receives
or Letters of Credit issued for its account, and related fees, costs and
expenses, and (ii) each Borrower’s obligations and liabilities arising as a
result of the joint and several liability of the Borrowers hereunder with
respect to proceeds of Loans received by, or Letters of Credit issued for the
account of, any of the other Borrowers, together with the related fees, costs
and expenses, shall be separate and distinct obligations, both of which are
primary obligations of such Borrower. Neither the joint and several liability
of, nor the Liens granted to the Collateral Agent under the Security Documents
by, any of the Borrowers shall be impaired or released by (A) the failure of
the Administrative Agent, any Lender or any Facing Bank, any successors or
assigns thereof, or any holder of any Note or any of the Obligations to assert
any claim or demand or to exercise or enforce any right, power or remedy
against the Funds Administrator, any Borrower, any Subsidiary of any Borrower,
any other Person, the Collateral or otherwise; (B) any extension

 

139

 

or
renewal for any period (whether or not longer than the original period) or
exchange of any of the Obligations or the release or compromise of any
obligation of any nature of any Person with respect thereto; (C) the surrender,
release or exchange of all or any part of any property (including without
limitation the Collateral) securing payment, performance and/or observance of
any of the Obligations or the compromise or extension or renewal for any period
(whether or not longer than the original period) of any obligations of any
nature of any Person with respect to any such property; (D) any action or
inaction on the part of the Administrative Agent, any Lender or any Facing
Bank, or any other event or condition with respect to any other Borrower,
including any such action or inaction or other event or condition, which might
otherwise constitute a defense available to, or a discharge of, such Borrower,
or a guarantor or surety of or for any or all of the Obligations; and (E) any
other act, matter or thing (other than payment or performance of the
Obligations) which would or might, in the absence of this provision, operate to
release, discharge or otherwise prejudicially affect the obligations of such
Borrower or any other Borrower.

 

(b)           Notwithstanding any
provision to the contrary contained herein or in any other of the Loan
Documents, to the extent the joint obligations of a Borrower shall be
adjudicated to be invalid or unenforceable for any reason (including, without
limitation, because of Section 548 of Chapter 11 of the Bankruptcy Code or
under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent
Conveyance Act or similar statute or common law) then the Obligations of each
Borrower hereunder shall be limited to the maximum amount that is permissible
under applicable law (whether federal or state and including, without
limitation, the federal Bankruptcy Code).

 

(c)           To the extent that any
Borrower shall make a payment under this Section 13.19(c) of all or
any of the Obligations (other than Loans made to that Borrower for which it is
primarily liable) (a “Guarantor Payment”) that, taking into account all
other Guarantor Payments then 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
Payment in the same proportion that such Borrower’s “Allocable Amount” (as
defined below) (as determined immediately prior to such Guarantor Payment) bore
to the aggregate Allocable Amounts of each of the Borrowers as determined
immediately prior to the making of such Guarantor Payment, then, following
indefeasible payment in full in cash of the Obligations and termination of the
Commitments, such Borrower shall be entitled to receive contribution and
indemnification payments from, and 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.  As of any date of determination, the
“Allocable Amount” of any Borrower shall be equal to the maximum amount of the
claim that could then be recovered from such Borrower under this Section
13.19(c) without rendering such claim voidable or avoidable under Section
548 of Chapter 11 of the Bankruptcy Code or under any applicable state Uniform
Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar statute
or common law.  This Section 13.19(c)
is intended only to define the relative rights of the Borrowers and nothing set
forth in this Section 13.19(c) is intended to or shall impair the
obligations of the Borrowers,  jointly
and severally, to pay any amounts as and when the same shall become due and
payable in accordance with the terms of this Agreement, including Section
13.19(a).  Nothing contained in this
Section 13.19(c) shall

 

140

 

limit
the liability of any Borrower to pay the Loans made directly or indirectly to
that Borrower and accrued interest, fees and expenses with respect thereto for
which such Borrower shall be primarily liable. 
The parties hereto acknowledge that the rights of contribution and
indemnification hereunder shall constitute assets of the Borrower to which such
contribution and indemnification is owing. 
The rights of each Borrower against each other Borrower under this Section
13.19(c) shall not be exercisable until the full and indefeasible payment
of the Obligations and the termination of the Commitments.

 

(d)           The liability of the
Borrowers under this Section 13.19  is in addition to and shall be cumulative
with all liabilities of each Borrower to Administrative Agent and Lenders under
this Agreement and the other Loan Documents to which such Borrower is a party,
without any limitation as to amount.

 

13.20       Appointment and Authorization of
Funds Administrator.

 

(a)           Each Borrower hereby
designates, appoints, authorizes and empowers the Company as its agent to act
as specified in the capacity of Funds Administrator under this Agreement and
each of the other Loan Documents and the Company hereby acknowledges such
designation, authorization and empowerment, and accepts such appointment. Each
Borrower hereby irrevocably authorizes and directs the Funds Administrator to
take such action on its behalf under the respective provisions of this
Agreement and the other Loan Documents, and any other instruments, documents
and agreements referred to herein or therein, and to exercise such powers and to
perform such duties hereunder and thereunder as are specifically delegated to
or required of the Funds Administrator by the respective terms and provisions
hereof and thereof, and such other powers as are reasonably incidental thereto,
including, without limitation, to take the following actions for and on such
Borrower’s behalf:

 

(i)            to
submit on behalf of each Borrower Notices of Borrowing, Notices of Conversion
and Notices of Continuation to Administrative Agent in accordance with the
provisions of this Agreement, each such notice to be submitted by the Funds
Administrator to Administrative Agent as soon as practicable after its receipt
of a request to do so from a Borrower; and

 

(ii)           to
submit on behalf of each Borrower requests for the issuance of Letters of
Credit in accordance with the provisions of this Agreement, each such request
for the issuance of a Letter of Credit to be submitted by the Funds
Administrator as soon as practicable after its receipt of a request to do so
from any Borrower.

 

The Funds Administrator is further authorized and
directed by each of the Borrowers to take all such actions on behalf of such
Borrower necessary to exercise the specific powers granted in clauses (i) and
(ii) above and to perform such other duties hereunder and under the other Loan
Documents, and deliver such documents as delegated to or required of the Funds
Administrator by the terms hereof or thereof. 
Administrative Agent and each Lender may regard any notice or other
communication pursuant to any Loan Documents from the Funds Administrator as a
notice or communication from all Borrowers, and may give any notice or
communication required or permitted to be given to any Borrower or

 

141

 

Borrowers hereunder to the Funds Administrator on
behalf of such Borrower or Borrowers. 
Each Borrower agrees that each notice, election, representation and
warranty, covenant, agreement and undertaking made on its behalf by the Funds
Administrator shall be deemed for all purposes to have been made by such
Borrower and shall be binding upon and enforceable against such Borrower to the
same extent as if the same had been made directly by such Borrower.

 

(b)           The Funds Administrator
may perform any of its duties hereunder or under any of the other Loan
Documents by or through its agents or employees.

 

 

[signature pages
follow]

 

142

 

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

 

	
   

  	
   

  	
  HUNTSMAN COMPANY
  LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/  Samuel D. Scruggs

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Samuel D. Scruggs

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Executive Vice
  President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Huntsman Company LLC

  
	
   

  	
   

  	
  500 Huntsman Way

  
	
   

  	
   

  	
  Salt Lake City, Utah
  84108

  
	
   

  	
   

  	
  Attn: General Counsel

  
	
   

  	
   

  	
  Tel. No.: (801)
  532-5200

  
	
   

  	
   

  	
  Telecopier No.: (801)
  584-5781

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  HUNTSMAN PETROCHEMICAL

  CORPORATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/  Samuel D. Scruggs

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Samuel D. Scruggs

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President and
  Treasurer

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Huntsman Company LLC

  
	
   

  	
   

  	
  500 Huntsman Way

  
	
   

  	
   

  	
  Salt Lake City, Utah
  84108

  
	
   

  	
   

  	
  Attn: General Counsel

  
	
   

  	
   

  	
  Tel. No.: (801)
  532-5200

  
	
   

  	
   

  	
  Telecopier No.: (801)
  584-5781

  
										

 

143

 

	
   

  	
  HUNTSMAN EXPANDABLE
  POLYMERS

  COMPANY, LC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Huntsman Chemical
  Company LLC, its Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/  Samuel D. Scruggs

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Samuel D. Scruggs

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  	
   

  
	
   

  	
  Huntsman Company LLC

  	
   

  
	
   

  	
  500 Huntsman Way

  	
   

  
	
   

  	
  Salt Lake City, Utah
  84108

  	
   

  
	
   

  	
  Attn: General Counsel

  	
   

  
	
   

  	
  Tel. No.: (801)
  532-5200

  	
   

  
	
   

  	
  Telecopier No.: (801)
  584-5781

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HUNTSMAN INTERNATIONAL
  TRADING

  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/  Samuel D. Scruggs

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Samuel D. Scruggs

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Huntsman Company LLC

  	
   

  
	
   

  	
  500 Huntsman Way

  	
   

  
	
   

  	
  Salt Lake City, Utah
  84108

  	
   

  
	
   

  	
  Attn: General Counsel

  	
   

  
	
   

  	
  Tel. No.: (801)
  532-5200

  	
   

  
	
   

  	
  Telecopier No.: (801)
  584-5781

  
								

 

144

 

	
   

  	
   

  	
  HUNTSMAN FUELS, L.P.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/  Samuel D. Scruggs

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Samuel D. Scruggs

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Huntsman Company LLC

  
	
   

  	
   

  	
  500 Huntsman Way

  
	
   

  	
   

  	
  Salt Lake City, Utah
  84108

  
	
   

  	
   

  	
  Attn: General Counsel

  
	
   

  	
   

  	
  Tel. No.: (801) 532-5200

  
	
   

  	
   

  	
  Telecopier No.: (801)
  584-5781

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  HUNTSMAN POLYMERS
  CORPORATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/  Samuel D. Scruggs

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Samuel D. Scruggs

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President and
  Treasurer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Huntsman Company LLC

  
	
   

  	
   

  	
  500 Huntsman Way

  
	
   

  	
   

  	
  Salt Lake City, Utah
  84108

  
	
   

  	
   

  	
  Attn: General Counsel

  
	
   

  	
   

  	
  Tel. No.: (801)
  532-5200

  
	
   

  	
   

  	
  Telecopier No.: (801)
  584-5781

  
								

 

145

 

 

	
   

  	
  DEUTSCHE BANK TRUST
  COMPANY

  AMERICAS, in its individual capacity

  as a Lender and as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/  Marco Orlando

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Marco Orlando

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Director

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
  Deutsche Bank Trust
  Company Americas

  
	
   

  	
  233 South Wacker Drive

  
	
   

  	
  Suite 8400

  
	
   

  	
  Chicago, Illinois 60606

  
	
   

  	
  Attention: Frank Fazio

  
	
   

  	
  Tel. No.:  (312) 993-8000

  
	
   

  	
  Telecopier No.:  (312) 993-8139

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Winston & Strawn

  
	
   

  	
  35 West Wacker Drive

  
	
   

  	
  Chicago, Illinois 60601

  
	
   

  	
  Attention:  Charles B. Boehrer, Esq.

  
	
   

  	
  Tel. No.:  (312) 558-5600

  
	
   

  	
  Telecopier No.:  (312) 558-5700

  
							

 

146

 

	
   

  	
   

  	
  DEUTSCHE BANK TRUST
  COMPANY

  AMERICAS, as Collateral Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/  Marco Orlando

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Marco Orlando

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Director

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Deutsche Bank Trust
  Company Americas

  
	
   

  	
   

  	
  233 South Wacker Drive

  
	
   

  	
   

  	
  Suite 8400

  
	
   

  	
   

  	
  Chicago, Illinois 60606

  
	
   

  	
   

  	
  Attention:  Frank Fazio

  
	
   

  	
   

  	
  Tel. No.:  (312) 993-8000

  
	
   

  	
   

  	
  Telecopier No.:  (312) 993-8139

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Winston & Strawn

  
	
   

  	
   

  	
  35 West Wacker Drive

  
	
   

  	
   

  	
  Chicago, Illinois 60601

  
	
   

  	
   

  	
  Attention:  Charles B. Boehrer, Esq.

  
	
   

  	
   

  	
  Tel. No.:  (312) 558-5600

  
	
   

  	
   

  	
  Telecopier No.:  (312) 558-5700

  
								

 

147

 

Solely for purposes of Section
8.15 of this Agreement:

 

 

	
  HUNTSMAN SPECIALTY
  CHEMICALS

  CORPORATION

  	
   

  
	
   

  
	
  By:

  	
  /s/  Samuel D. Scruggs

  	
   

  
	
  Name:

  	
  Samuel D. Scruggs

  	
   

  
	
  Title:

  	
  Vice President and
  Treasurer

  	
   

  
	
   

  
	
   

  	
   

  
	
  Solely for purposes of Section
  8.15 of this Agreement:

  
	
   

  
	
   

  	
   

  
	
  HUNTSMAN SPECIALTY
  CHEMICALS

  HOLDINGS CORPORATION

  	
   

  
	
   

  
	
  By: 

  	
  /s/  Samuel D. Scruggs

  	
   

  
	
  Name:

  	
  Samuel D. Scruggs

  	
   

  
	
  Title:

  	
  Vice President and
  Treasurer

  	
   

  
								

 

148

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